26 U.S.C. § 468A — Special rules for nuclear decommissioning costs

(a) In general If a taxpayer elects this section, it can deduct, for any tax year, the payments it makes that year to a Nuclear Decommissioning Reserve Fund ("the Fund"). (b) Limitation on amounts paid into Fund Payments into the Fund for a year cannot be more than the "ruling amount" set for that year. (c) Income and deductions of the taxpayer (1) Inclusion of amounts distributed: the taxpayer must include in gross income (A) any amount distributed from the Fund that year, except amounts distributed to pay the fund costs described in (e)(4)(B), and (B) except as regulations provide, amounts properly includible from a deemed distribution under (e)(6), a termination under (e)(7), or disposing of an interest in the nuclear power plant. (2) Deduction when economic performance occurs: besides the deduction in (a), the taxpayer can also deduct, for the year, the amount of nuclear decommissioning costs for which "economic performance" (as defined in section 461(h)(2)) happens that year. (d) Ruling amount (1) Request required: no deduction is allowed for any payment to the Fund unless the taxpayer has asked for, and received, a schedule of ruling amounts from the Secretary; the taxpayer must ask again each time the nuclear plant's operating license is renewed. (2) Ruling amount: this is the amount the Secretary decides, for a given tax year, is needed to (A) fully fund total nuclear decommissioning costs over the plant's estimated useful life, and (B) prevent overfunding those costs, or funding them faster than steady, level funding — taking into account whatever discount rates the Secretary thinks are appropriate. (3) Review of amount: the Secretary must review, and revise if needed, the schedule of ruling amounts at least once during the plant's useful life, or more often if the taxpayer asks. (e) Nuclear Decommissioning Reserve Fund (1) In general: each taxpayer that elects this section must set up a separate Fund for each nuclear power plant the election covers. (2) Taxation of Fund: (A) the Fund's gross income is taxed each year at a 20 percent rate, except (i) any payment to the Fund for which the taxpayer got a deduction under (a) is not counted as the Fund's income, and (ii) the Fund can deduct amounts it pays that are described in (4)(B) (other than payments to the taxpayer) that would be deductible in figuring a corporation's taxable income. (B) This 20 percent tax replaces any other tax on the Fund's investment income. (C) For purposes of subtitle F, the Fund is treated as if it were a corporation, and this tax is treated as the tax imposed by section 11. (3) Contributions to Fund: except as (f) allows, the Fund cannot accept any payment other than one for which a deduction is allowed under (a). (4) Use of Fund: the Fund can only be used to (A) pay, in whole or part, anyone's liability for decommissioning the nuclear power plant (or a unit of it); (B) pay the Fund's own administrative costs (including taxes) and other incidental expenses, such as legal, accounting, actuarial, and trustee expenses, tied to running the Fund; and (C) make investments with any part of the Fund not currently needed for (A) or (B). (5) Prohibitions against self-dealing: under Treasury regulations, for purposes of section 4951, the Fund is treated the same as a trust described in section 501(c)(21). (6) Disqualification of Fund: if the Fund breaks this section or section 4951, the Secretary may disqualify it from this section; when that happens, the Fund is treated as having distributed all of its money on the date the disqualification takes effect. (7) Termination upon completion: once decommissioning of the plant is substantially complete, the taxpayer must close the Fund. (f) Transfers into qualified funds (1) In general: a taxpayer may transfer into the Fund up to the present value of the part of total decommissioning costs it previously excluded under the old version of (d)(2)(A) that applied before this subsection was enacted. (2) Deduction for amounts transferred: (A) except as (C) provides, the deduction for a transfer under this subsection is spread evenly over the plant's remaining estimated useful life, starting with the year of the transfer; (B) no deduction is allowed for any part of a transfer that was already deducted before, or that was never included in the taxpayer's (or a predecessor's) gross income; (C) if the transferred Fund is itself later transferred to someone else, any remaining deduction for years ending after that later transfer goes to the original transferor, for the year that includes the date of that later transfer; (D) no gain or loss is recognized on a transfer described in (1), and if appreciated property is transferred, the deduction cannot be more than the property's adjusted basis. (3) A new ruling-amount schedule must be requested from the Secretary before this transfer rule can apply. (4) The taxpayer's basis in the Fund is not increased because of a transfer permitted under this subsection. (g) Nuclear powerplant For this section, "nuclear powerplant" includes any unit of a nuclear powerplant. (h) Time when payments deemed made A payment made within 2½ months after a tax year ends, if it is made on account of that year, is treated as made on the last day of that tax year.