To amend the Internal Revenue Code of 1986 to provide for the treatment of bonds issued to finance electric output facilities, and for other purposes.

SECTION 1. TREATMENT OF BONDS ISSUED TO FINANCE ELECTRIC OUTPUT 
              FACILITIES.

    (a) In General.--Section 141 of the Internal Revenue Code of 1986 
(relating to private activity bond; qualified bond) is amended by 
redesignating subsection (e) as subsection (f) and inserting after 
subsection (d) the following new subsection:
    ``(e) Bonds for Electric Output Facilities.--
            ``(1) Bonds issued before enactment of comprehensive 
        electricity competition act.--
                    ``(A) In general.--The determination of whether any 
                pre-effective date electric output facility bond is a 
                private activity bond (or an industrial development 
                bond under the Internal Revenue Code of 1954), shall be 
                made without regard to any permissible competitive 
                actions taken by the issuer.
                    ``(B) Pre-effective date electric output facility 
                bond.--For purposes of subparagraph (A), the term `pre-
                effective date electric output facility bond' means any 
                bond issued as part of an issue if--
                            ``(i) such bond was issued before the date 
                        of the enactment of the Comprehensive 
                        Electricity Competition Act,
                            ``(ii) any portion of the proceeds of such 
                        issue was used with respect to an electric 
                        output facility, and
                            ``(iii) such bond was not, as of such date 
                        of enactment, a private activity bond (or an 
                        industrial development bond under the Internal 
                        Revenue Code of 1954).
                    ``(C) Permissible competitive actions.--For 
                purposes of subparagraph (A), the term `permissible 
                competitive actions' means any action taken by the 
                issuer on or after the date of the enactment of the 
                Comprehensive Electricity Competition Act regarding--
                            ``(i) transmission property owned by the 
                        issuer if the issuer is subject to an order of 
                        the Federal Energy Regulatory Commission 
                        requiring nondiscriminatory, open access to 
                        transmission facilities in a manner consistent 
                        with rules promulgated by the Commission under 
                        sections 205 and 206 of the Federal Power Act 
                        (as in effect on the date of the enactment of 
                        the Comprehensive Electricity Competition Act), 
                        or
                            ``(ii) generation property or distribution 
                        property owned by the issuer if the issuer--
                                    ``(I) implements retail competition 
                                under section 609 of the Public Utility 
                                Regulatory Policies Act of 1978 (as 
                                amended by, and as in effect on the 
                                date of the enactment of, the 
                                Comprehensive Electricity Competition 
                                Act), or
                                    ``(II) enters into a contract for 
                                the sale of electricity or use of its 
                                distribution property which will not 
                                become effective prior to the date that 
                                the issuer implements retail 
                                competition under section 609 of the 
                                Public Utility Regulatory Policies Act 
                                of 1978 (as amended by, and as in 
                                effect on the date of the enactment of, 
                                the Comprehensive Electricity 
                                Competition Act).
                    ``(D) Comprehensive electricity competition act.--
                For purposes of this paragraph, references to the 
                Comprehensive Electricity Competition Act shall be 
                treated as references to any law which is substantially 
                identical to S. 2287 of the 105th Congress, as 
                introduced.
            ``(2) Bonds issued on or after enactment of comprehensive 
        electricity competition act.--
                    ``(A) In general.--For purposes of this title, the 
                term `private activity bond' includes any bond issued 
                as part of an issue any of the proceeds of which are to 
                be used (directly or indirectly) for electric output 
                facilities other than small distribution property.
                    ``(B) Small distribution property.--For purposes of 
                subparagraph (A), the term `small distribution 
                property' means any output facility, including 
                functionally related and subordinate property, that 
                operates at 69 kilovolts or less.''.
    (b) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendment made by this section shall apply to 
        obligations issued on or after the date of the enactment of the 
        Comprehensive Electricity Competition Act (within the meaning 
        of section 141(e)(1)(D) of the Internal Revenue Code of 1986, 
        as added by this section).
            (2) Treatment of pre-effective date bonds.--Section 
        141(e)(1) of such Code, as added by this section, shall take 
        effect on the date of the enactment of this Act.
            (3) Refunding bonds.--
                    (A) In general.--For purposes of this subsection 
                and the amendment made by this section, section 
                141(e)(2) of the Internal Revenue Code of 1986, as 
                added by this section, shall not apply to any qualified 
                refunding bond.
                    (B) Qualified refunding bond.--For purposes of 
                subparagraph (A), the term ``qualified refunding bond'' 
                means any bond (or a bond which is part of a series of 
                refundings) issued to refund a pre-effective date 
                electric output facility bond if--
                            (i) the weighted average maturity of the 
                        issue of which the refunding bond is a part 
                        does not exceed 120 percent of the average 
                        reasonably expected economic life of the 
                        facilities being financed with the net proceeds 
                        of such issue (determined under section 147(b) 
                        of such Code),
                            (ii) the amount of the refunding bond does 
                        not exceed the outstanding amount of the 
                        refunded bond, and
                            (iii) the net proceeds of the refunding 
                        bond are used to redeem the refunded bond not 
                        later than 90 days after the date of issuance 
                        of the refunding bond.

SEC. 2. NUCLEAR DECOMMISSIONING COSTS.

    (a) In General.--Subsection (b) of section 468A of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(b) Limitation on Amount Paid Into Fund.--The amount which a 
taxpayer may pay into the Fund for any taxable year shall not exceed 
the ruling amount applicable to such taxable year.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

Summary: Amends the Internal Revenue Code concerning:  (1) the treatment of bonds issued to finance electric output facilities; and (2) the special rules for nuclear decommissioning costs.