(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts received after the date
of the enactment of this Act.
SEC. 5. TAX TREATMENT OF NUCLEAR DECOMMISSIONING
FUNDS.
(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 (relating to special rules for nuclear decom-
missioning costs) is amended to read as follows:
‘‘(b) LIMITATION ON AMOUNTS PAID INTO FUND.—
‘‘(1) IN GENERAL.—The amount which a tax-
payer 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 tax-
payer 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
PE-
RIOD.—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 the Internal Revenue Code of 1986 (relating to income
and deductions of the taxpayer) is amended to read as
follows:
‘‘(2) DEDUCTION
OF
NUCLEAR
DECOMMIS-
SIONING 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 the Internal Revenue Code of 1986 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 accumu-
late the nuclear decommissioning costs allocable to
the taxpayer’s current or former interest in the nu-
clear powerplant to which the Fund relates. The an-
nual amount described in the foregoing sentence
shall be calculated by taking into account a reason-
able rate of inflation for the nuclear decommis-
sioning costs and a reasonable after-tax rate of re-
turn 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 tax-
able year of the expected operating life of the nu-
clear powerplant.
‘‘(3) NUCLEAR DECOMMISSIONING COSTS.—For
purposes of this section—
‘‘(A) IN GENERAL.—The term ‘nuclear de-
commissioning costs’ means all costs to be in-
curred in connection with entombing, decon-
taminating, dismantling, removing, and dis-
posing of a nuclear powerplant, and shall in-
clude all associated preparation, security, fuel
storage, and radiation monitoring costs. Such
term shall include all such costs which, outside
of the decommissioning context, might other-
wise be capital expenditures.
‘‘(B) IDENTIFICATION
OF
COSTS.—The
taxpayer may identify nuclear decommissioning
costs by reference either to a site-specific engi-
neering study or to the financial assurance
amount calculated pursuant to section 50.75 of
title 10 of the Code of Federal Regulations.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid after June 30,
2000, in taxable years ending after such date.
Æ