26 U.S.C. § 45J — Credit for production from advanced nuclear power facilities

(a) General rule For the general business credit under section 38, the advanced nuclear power facility production credit for a taxable year is 1.8 cents times the kilowatt hours of electricity that meet two conditions: the taxpayer produced the electricity at an advanced nuclear power facility during the 8-year period that starts when the facility first went into service, and the taxpayer sold that electricity to an unrelated buyer during the tax year. (b) National limitation (1) In general: The credit for any one facility can't be bigger than its share of the national limit. Take the megawatt capacity the Secretary allocated to that facility. Divide it by the facility's total nameplate megawatt capacity. That fraction sets the most of the credit the facility can get. (2) Amount of national limitation: The Secretary can allocate at most 6,000 megawatts of capacity nationwide across all facilities. (3) Allocation of limitation: The Secretary decides how to divide up that 6,000 megawatts, using whatever method the Secretary prescribes. (4) Regulations: Within 6 months of this section (or any amendment to it) becoming law, the Secretary must write regulations needed to carry out this limit. Those regulations must set up a certification process. Under that process the Secretary — after talking with the Secretary of Energy — approves facilities and allocates them capacity. (5) Allocation of unutilized limitation: (A) Any part of the 6,000-megawatt limit that hasn't been given out yet must be allocated as fast as practical after December 31, 2020. It goes first to facilities that were already in service by that date but didn't get their full nameplate capacity allocated. After that, it goes to facilities placed in service after that date, in the order they came online. (B) "Unutilized national megawatt capacity limitation" means 6,000 megawatts minus the amount the Secretary had allocated before January 1, 2021 — reduced further by (that is, adding back) any allocation given to a facility that was not placed in service before that date. (C) When the Secretary allocates this leftover capacity, it counts the same as any other allocation under this section. But one rule doesn't apply to a facility that gets leftover capacity this way: it does not have to meet the "placed in service before January 1, 2021" deadline in subsection (d)(1)(B). (c) Other limitations (1) Annual limitation: After applying the national limitation in (b), there's a dollar cap too. Take the facility's allocated megawatt capacity. Divide it by 1,000. Multiply that by $125,000,000. That's the most credit the facility can claim for the year. (2) Phaseout of credit: (A) The credit shrinks if electricity prices are high. Take the "reference price" (a term this section does not define itself — it points to section 45(e)(2)(C)) for the calendar year the sale happened. Subtract 8 cents from it. Divide that by 3 cents. Multiply the credit by that fraction, and subtract the result from the credit. (B) That 8-cent number itself goes up every year with inflation, using an "inflation adjustment factor" this section borrows from section 45(e)(2)(B) rather than defining here. If the adjusted number isn't a round multiple of 0.1 cent, round it to the nearest 0.1 cent. (d) Advanced nuclear power facility (1) In general: An "advanced nuclear power facility" is an "advanced nuclear facility" that the taxpayer owns and uses to make electricity, and that went into service after this paragraph became law but before January 1, 2021. (2) Advanced nuclear facility: This is any nuclear facility whose reactor design was approved by the Nuclear Regulatory Commission after December 31, 1993 — as long as no substantially similar design of comparable capacity was approved on or before that date. (e) Transfer of credit by certain public entities (1) In general: Normally a "qualified public entity" that owns the facility would be the one to claim the credit. But it can instead elect to give some or all of the credit to a partner it names — an "eligible project partner." If it does, that partner (not the public entity) is treated as the taxpayer for that credit. (2) Definitions: (A) A "qualified public entity" is a federal, state, or local government (or any part of one); or a mutual or cooperative electric company described in sections 501(c)(12) or 1381(a)(2); or a not-for-profit electric utility that has gotten a loan or loan guarantee under the Rural Electrification Act of 1936. (B) An "eligible project partner" is anyone who helps design or build the facility, supplies its nuclear steam system, supplies its nuclear fuel, finances its construction or operation, or owns part of it. (3) Special rules: (A) If the credit is figured at the partnership level, the public entity is treated as the taxpayer only for its own distributive share of the credit, and any partner in the partnership can be an "eligible project partner." (B) A partner who receives credit this way claims it in its first tax year that ends on or after the public entity's tax year for which the credit was figured. (C) Under the tax-exempt bond private-use rules in section 141(b)(1), a partner benefiting from this transfer isn't treated as making "private business use" of the facility. (f) Other rules to apply This section borrows rules from section 45(e), specifically paragraphs (1), (3), (4), and (5) of that section, without restating them here.