SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Nuclear Renewal Act of 2001''.

SEC. 2. CREDIT FOR PRODUCTION FROM NUCLEAR POWER PLANTS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following:

``SEC. 45E. CREDIT FOR PRODUCTION FROM NUCLEAR POWER.

    ``(a) General Rule.--For purposes of section 38, the nuclear power 
production credit of any taxpayer for any taxable year is--
            ``(1) in the case of a qualified nuclear power facility, an 
        amount equal to .34 cents, multiplied by the kilowatt hours of 
        electricity--
                    ``(A) produced by the taxpayer at a qualified 
                nuclear power facility during the 5-year period 
                beginning on the date the facility is originally placed 
                in service, and
                    ``(B) sold by the taxpayer to an unrelated person 
                during such taxable year, and
            ``(2) in the case of a qualified nuclear power facility 
        upgrade, an amount equal to .34 cents, multiplied by the 
        kilowatt hours of electricity--
                    ``(A) produced by the taxpayer as a result of a 
                qualified nuclear power facility upgrade during the 3-
                year period beginning on the date the upgrade is 
                effective, and
                    ``(B) sold by the taxpayer to an unrelated person 
                during such taxable year.
    ``(b) Limitation.--The amount of the credit determined under 
subsection (a) for any taxable year with respect to a nuclear power 
facility shall not exceed $50,000,000.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified nuclear power facility.--The term 
        `qualified nuclear power facility' means any facility owned by 
        the taxpayer--
                    ``(A) with respect to which a construction license 
                is approved by the Nuclear Regulatory Commission before 
                the date of the enactment of this section and which is 
                originally placed in service after such date, or
                    ``(B) which resumes service after the date of the 
                enactment of this section after a period of non-
                operation of at least 10 years.
            ``(2) Qualified nuclear power facility upgrade.--The term 
        `qualified nuclear power facility upgrade' means an upgrade to 
        a nuclear power facility after the date of the enactment of 
        this section which allows electricity production of the 
        facility in excess of the original rated thermal power of the 
        facility prior to the upgrade. An upgrade under this paragraph 
        shall not be treated as effective until the date on which the 
        operating license of the facility has been approved by the 
        Nuclear Regulatory Commission to reflect such upgrade.
            ``(3) Credit may be transferred.--Nothing in any law or 
        rule of law shall be construed to limit the transferability of 
        the credit allowed by this section through agreements by the 
        owner of a nuclear power facility with any producer of 
        electricity.
            ``(4) Credits for certain tax exempt organizations and 
        governmental units.--
                    ``(A) Allowance of credit.--Any credit which would 
                be allowable under this section with respect to a 
                nuclear power facility of an entity if such entity were 
                not exempt from tax under this chapter shall be treated 
                as a credit allowable under subpart C to such entity if 
                such entity is--
                            ``(i) a public utility (as defined in 
                        section 136(c)(2)(B)), or
                            ``(ii) the Tennessee Valley Authority.
                    ``(B) Transfer of credit.--An entity described in 
                subparagraph (A) may transfer any credit allowable to 
                such entity under subparagraph (A) in accordance with 
                paragraph (3).
            ``(5) Special rules.--The rules of subsection (b)(3) and 
        paragraphs (3), (4), and (5) of subsection (d) of section 45 
        shall apply.
    ``(e) Termination.--This section shall not apply to production in 
taxable years beginning after December 31, 2011.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 is amended by striking ``plus'' at the 
end of paragraph (12), by striking the period at the end of paragraph 
(13) and inserting ``, plus'', and by adding at the end the following:
            ``(14) the nuclear power production credit determined under 
        section 45E(a).''.
    (c) Transitional Rule.--Section 39(d) of the Internal Revenue Code 
of 1986 (relating to transitional rules) is amended by adding at the 
end the following:
            ``(10) No carryback of section 45e credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the nuclear power production 
        credit determined under section 45E may be carried back to a 
        taxable year ending before the date of the enactment of section 
        45E.''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

                              ``Sec. 45E. Credit for production from 
                                        nuclear power.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to production after the date of the enactment of this Act.

SEC. 4. DEPRECIATION OF PROPERTY USED IN THE GENERATION OF ELECTRICITY.

    (a) Depreciation of Property Used in the Generation of 
Electricity.--
            (1) In general.--Subparagraph (C) of section 168(e)(3) of 
        the Internal Revenue Code of 1986 (relating to 7-year property) 
        is amended by redesignating clause (ii) as clause (iii) and by 
        inserting after clause (i) the following new clause:
                            ``(ii) any property used in the generation 
                        of electricity, and''.
            (2) 10-year class life.--The table contained in section 
        168(g)(3)(B) of such Code is amended by inserting after the 
        item relating to subparagraph (C)(ii) the following new item:

``(C)(ii)......................................................   10''.
    (b) Definition of Property Used in the Generation of Electricity.--
Subsection (i) of section 168 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraph:
            ``(15) Property used in the generation of electricity.--The 
        term `property used in the generation of electricity' means 
        property (other than electric utility nuclear fuel assemblies) 
        used in any qualified nuclear power facility or in any 
        qualified nuclear power facility upgrade (as defined in 
        paragraphs (1) and (2) of section 45E(c), respectively).''.
    (c) Tax-Exempt Use Property.--Subparagraph (A) of section 168(h)(1) 
of the Internal Revenue Code of 1986 (defining tax-exempt use property) 
is amended by inserting ``or property used in any qualified nuclear 
power facility or in any qualified nuclear power facility upgrade (as 
defined in paragraphs (1) and (2) of section 45E(c), respectively)'' 
after ``nonresidential real property''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.
Nuclear Renewal Act of 2001 - Amends the Internal Revenue Code provide limited business tax credits for qualified nuclear power facilities and facility upgrades through tax year 2011. Extends such credit to certain tax exempt public utilities and the Tennessee Valley Authority.Classifies property used in the generation of electricity (property used in any qualified nuclear power facility or facility upgrade) as seven-year depreciable property (with a ten-year class life for alternative depreciation purposes).
A bill to amend the Internal Revenue Code of 1986 to provide tax credits with respect to nuclear facilities, and for other purposes.