Nuclear Decommissioning Funds Clarification Act

Nuclear Decommissioning Funds Clarification Act - Amends the Internal Revenue Code to revise provisions concerning, among other things: (1) the limitation on the amounts which may be paid into a Nuclear Decommissioning Reserve Fund; and (2) the deduction allowed for nuclear decommissioning costs.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1702 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 1702

To amend section 468A of the Internal Revenue Code of 1986 with respect 
    to deductions for decommissioning costs of nuclear powerplants.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 3, 2001

 Mr. Weller (for himself, Mr. Cardin, Mrs. Johnson of Connecticut, Mr. 
Crane, and Mr. Foley) introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend section 468A of the Internal Revenue Code of 1986 with respect 
    to deductions for decommissioning costs of nuclear powerplants.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nuclear Decommissioning Funds 
Clarification Act''.

SEC. 2. NUCLEAR DECOMMISSIONING RESERVE FUND.

    (a) Increase in Amount Permitted To Be Paid Into Nuclear 
Decommissioning Reserve Fund.--Subsection (b) of section 468A of the 
Internal Revenue Code of 1986 is amended to read as follows:
    ``(b) Limitation on Amounts Paid Into Fund.--
            ``(1) In general.--The amount which a taxpayer may pay into 
        the Fund for any taxable year during the funding period shall 
        not exceed the level funding amount determined pursuant to 
        subsection (d), except--
                    ``(A) where the taxpayer is permitted by Federal or 
                State law or regulation (including authorization by a 
                public service commission) to charge customers a 
                greater amount for nuclear decommissioning costs, in 
                which case the taxpayer may pay into the Fund such 
                greater amount; or
                    ``(B) in connection with the transfer of a nuclear 
                powerplant, where the transferor or transferee (or 
                both) is required pursuant to the terms of the transfer 
                to contribute a greater amount for nuclear 
                decommissioning costs, in which case the transferor or 
                transferee (or both) may pay into the Fund such greater 
                amount.
            ``(2) Contributions after funding period.--Notwithstanding 
        any other provision of this section, a taxpayer may make 
        deductible payments to the Fund in any taxable year between the 
        end of the funding period and the termination of the license 
        issued by the Nuclear Regulatory Commission for the nuclear 
        powerplant to which the Fund relates provided such payments do 
        not cause the assets of the Fund to exceed the nuclear 
        decommissioning costs allocable to the taxpayer's current or 
        former interest in the nuclear powerplant to which the Fund 
        relates. The foregoing limitation shall be applied by taking 
        into account a reasonable rate of inflation for the nuclear 
        decommissioning costs and a reasonable after-tax rate of return 
        on the assets of the Fund until such assets are anticipated to 
        be expended.''.
    (b) Deduction for Nuclear Decommissioning Costs When Paid.--
Paragraph (2) of section 468A(c) of such Code is amended to read as 
follows:
            ``(2) Deduction of nuclear decommissioning costs.--In 
        addition to any deduction under subsection (a), nuclear 
        decommissioning costs paid or incurred by the taxpayer during 
        any taxable year shall constitute ordinary and necessary 
        expenses in carrying on a trade or business under section 
        162.''.
    (c) Level Funding Amounts.--Subsection (d) of section 468A of such 
Code is amended to read as follows:
    ``(d) Level Funding Amounts.--
            ``(1) Annual amounts.--For purposes of this section, the 
        level funding amount for any taxable year shall equal the 
        annual amount required to be contributed to the Fund in each 
        year remaining in the funding period in order for the Fund to 
        accumulate the nuclear decommissioning costs allocable to the 
        taxpayer's current or former interest in the nuclear powerplant 
        to which the Fund relates. The annual amount described in the 
        foregoing sentence shall be calculated by taking into account a 
        reasonable rate of inflation for the nuclear decommissioning 
        costs and a reasonable after-tax rate of return on the assets 
        of the Fund until such assets are anticipated to be expended.
            ``(2) Funding period.--The funding period for a Fund shall 
        end on the last day of the last taxable year of the expected 
        operating life of the nuclear powerplant.
            ``(3) Nuclear decommissioning costs.--For purposes of this 
        section, the term `nuclear decommissioning costs' shall mean 
        all costs to be incurred in connection with entombing, 
        decontaminating, dismantling, removing, and disposing of a 
        nuclear powerplant, and shall include all associated 
        preparation, security, fuel storage, and radiation monitoring 
        costs. The taxpayer may identify such costs by reference either 
        to a site-specific engineering study or to the financial 
        assurance amount calculated pursuant to section 50.75 of title 
        10 of the Code of Federal Regulations. The term shall include 
        all such costs which, outside of the decommissioning context, 
        might otherwise be capital expenditures.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid after May 3, 2001, in taxable years ending after 
such date.
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