Nuclear Decommissioning Funds, 80697-80716 [2010-32049]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 75, Number 246 (Thursday, December 23, 2010)]
[Rules and Regulations]
[Pages 80697-80716]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32049]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 602

[TD 9512]
RIN 1545-BF08


Nuclear Decommissioning Funds

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

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SUMMARY: This document contains final regulations under section 468A of 
the Internal Revenue Code relating to deductions for contributions to 
trusts maintained for decommissioning nuclear power plants. These final 
regulations affect taxpayers that own an interest in a nuclear power 
plant and reflect recent statutory changes. The corresponding temporary 
regulations are removed.

DATES: Effective Date: These regulations are effective on December 23, 
2010.
    Applicability Dates: For dates of applicability, see Sec. Sec.  
1.468A-9, 1.468A-3, and 1.468A-8.

FOR FURTHER INFORMATION CONTACT: Patrick S. Kirwan, (202) 622-3110 (not 
a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in these final regulations 
has

[[Page 80698]]

been reviewed and approved by the Office of Management and Budget in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) 
under control number 1545-2091. The collections of information in these 
final regulations are contained in Sec. Sec.  1.468A-3, 1.468A-4, 
1.468A-7, and 1.468A-8. Responses to these collections of information 
are required to obtain a tax benefit.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid OMB control number.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    On December 31, 2007, the IRS and Treasury Department issued a 
notice of proposed rulemaking (REG-147290-05, 2008-10 IRB 576 [72 FR 
74213]) regarding section 468A of the Internal Revenue Code of 1986 
(Code). This proposed rulemaking consisted of a general updating of the 
prior regulations under section 468A and, in particular, reflected the 
changes to section 468A made by section 1310 of the Energy Policy Act 
of 2005 (the Energy Policy Act), Public Law 109-58 (119 Stat. 594).
    Written, electronic, and oral comments responding to the notice of 
proposed rulemaking were received. A public hearing was held on June 
17, 2008. After consideration of all of the comments received as well 
as those comments made at the hearing, these final regulations 
generally adopt the rules of the proposed regulations with certain 
clarifications and modifications. The significant comments and 
modifications are discussed in this preamble.

1. Definitional Matters

A. Definition of Nuclear Decommissioning Costs
    One commentator on the proposed regulations suggested that the 
definition of ``nuclear decommissioning costs'' be expanded to 
explicitly include two types of costs that have generally been 
recognized by the IRS in letter rulings to be included within the ambit 
of nuclear decommissioning costs. Those two types of costs are (1) 
costs to decommission structures, systems, and components from a 
nuclear power plant that continues to produce electric energy; and (2) 
costs to store spent nuclear fuel pending delivery to a permanent 
repository. The IRS and Treasury agree that changes such as those 
proposed by this commentator bring clarity to the final regulations. 
Accordingly, Sec.  1.468A-1(b)(6) of the final regulations provides 
that costs for the final decommissioning of structures, systems, and 
components from a nuclear power plant that continues to produce 
electric energy and costs associated with facilities to store spent 
nuclear fuel pending delivery to a permanent repository are included 
within the definition of nuclear decommissioning costs.
B. Estimated Useful Life
    Several commentators observed that the term ``estimated useful 
life'' was used for two different purposes in the proposed regulations, 
and that the date on which such estimated useful life would end might 
differ, depending on the purpose for which the term was used. Estimated 
useful life of a nuclear power plant is used to calculate the schedule 
of ruling amounts in Sec.  1.468A-3(c)(1). In addition, the same term 
is used in Sec.  1.468A-8(b)(1) and (c)(1) to determine the years over 
which a taxpayer may deduct a special transfer made under Sec.  1.468A-
8. One commentator suggested that the IRS add a provision recognizing 
that the term is used for more than one purpose and that the date of 
the end of such period may differ depending on the use of the term. The 
IRS and Treasury agree with this suggestion and have incorporated that 
change in Sec.  1.468A-3(c)(2)(iii) of the final regulations.

2. Matters Relating to Special Transfers and Schedules of Deduction 
Amounts

A. General Comment
    One commentator suggested that the proposed requirement that a 
taxpayer obtain a schedule of deduction amounts with respect to a 
special transfer was not required by the statute and indeed such 
requirement constituted an impermissible overreaching by the IRS and 
Treasury. The commentator suggested that, in lieu of a schedule of 
deduction amounts, the final regulations simply provide that the IRS 
will rule on the maximum special transfer amount and allow the taxpayer 
to calculate the pro rata portion of that amount over the remaining 
estimated useful life of the nuclear power plant. The commentator 
expressed concern that the ruling from the IRS might provide a schedule 
of deduction amounts in excess of the actual appropriate deductible 
amounts or, alternatively, that the schedule would not allow a taxpayer 
to deduct more than a pro rata share of the amount that the taxpayer 
may choose to contribute, even if that amount is less than the maximum 
special transfer amount. The IRS and Treasury do not believe that these 
concerns justify a change in the regulations. Section 468A permits 
deduction of the amount of a special transfer and requires the taxpayer 
to obtain from the Secretary a new schedule of ruling amounts in 
connection with the transfer. The IRS and Treasury believe that the 
schedule of deduction amounts is an appropriate adjunct to the schedule 
of ruling amounts required in connection with the special transfer. 
Moreover, concerns regarding the deduction amounts provided in the 
schedule of deduction amounts are unwarranted. When the IRS issues a 
schedule of deduction amounts, that schedule allocates the requested 
special transfer amount (or the maximum allowable special transfer 
amount if the taxpayer has requested an excessive amount) over the 
remaining estimated useful life of the nuclear power plant. Thus, the 
schedule will not provide for deductions in excess of the actual 
appropriate deductible amounts. With respect to the commentator's 
alternative concern, the IRS and Treasury believe that the rule 
limiting deductions to a pro rata share of the amount of the special 
transfer (rather than a pro rata share of the maximum amount that could 
have been transferred) is consistent with section 468A(f)(2)(A), which 
provides that the deduction allowed ``for any transfer'' shall be 
allowed ratably over the remaining useful life.
B. Deemed Payment Date for Special Transfers
    Several commentators observed that the proposed regulations did not 
specify the deemed payment date for special transfers. While taxpayers 
generally assumed that the deemed payment date for special transfers 
was the same as that for the contributions of ruling amounts, they 
requested that the IRS resolve the ambiguity. The IRS and Treasury 
agree that this possible ambiguity should be resolved and, therefore, 
clarifying changes are included in Sec. Sec.  1.468A-7(b)(4) and 
1.468A-8(a).
C. Extension of Deadline for Actual Payment of Special Transfers
    Several commentators requested that the IRS and Treasury provide 
certain transitional relief for taxpayers seeking to make special 
transfers relating to taxable years in which taxpayers did not have the 
benefit of the clarifications provided in these regulations. The

[[Page 80699]]

transitional relief requested included an extension of the time to 
request a ruling regarding the special transfer for a taxable year as 
well as a rule allowing the special transfer to relate back to that 
year. The final regulations provide the requested transitional relief. 
Under Sec.  1.468A-8 (d)(1) the ruling request for a special transfer 
relating to a taxable year beginning in 2006, 2007, 2008, or 2009 is 
timely if filed with the IRS within 60 days after the date of 
publication of these final regulations in the Federal Register. Under 
Sec.  1.468A-8(a), a special transfer that the taxpayer designates as 
relating to such a year is deemed made during the year provided that 
the special transfer amount is transferred to the qualified fund within 
90 days after the taxpayer receives a ruling from the Secretary 
allowing such special transfer.
    One commentator noted that the proposed regulations do not address 
the case of a taxpayer that has requested a schedule of deduction 
amounts from the IRS but has not received the necessary ruling prior to 
the payment deadline. Under Sec.  1.468A-3(g), a taxpayer that has 
requested a ruling from the IRS on a schedule of ruling amounts may 
contribute the ruling amount proposed in its ruling request in those 
circumstances. The commentator requested a similar rule for special 
transfers. The final regulations provide such a rule for special 
transfers in Sec.  1.468A-8(c).
D. Special Transfers With Respect to Nuclear Power Plants That Have 
Been Transferred
    A commentator suggested that the owner of a nuclear power plant 
that had a qualifying percentage of less than 100 percent under pre-
2005 law should be allowed to make a special transfer so that the 
entire cost of decommissioning the plant can be covered by the 
qualified fund even if the current owner purchased the plant and was 
not the owner prior to the enactment of section 468A. The final 
regulations clarify that when Sec.  1.468A-6 (relating to 
nonrecognition of gain or loss on certain fund transfers) applies to 
the transfer of a qualified fund (or part or all of its assets) the 
transferee succeeds to the transferor's qualifying percentage. If Sec.  
1.468A-6 does not apply to the transfer and the transferee's fund is 
treated as a completely new fund, the transferee cannot make a special 
transfer but the entire cost of decommissioning the plant can be funded 
by increasing annual deductible contributions over the remaining useful 
life of the plant through a schedule of ruling amounts that is 
determined without regard to the qualifying percentage limitation that 
applied under pre-2005 law.
E. Special Transfer Over More Than One Year
    A commentator suggested that the regulations should allow a 
taxpayer making a special transfer over several years to get a single 
ruling for the entire special transfer. It has been the ruling policy 
of the IRS to provide, in a single ruling, multiple schedules of 
deduction amounts where a taxpayer requests rulings on special 
transfers made over several years. The final regulations incorporate 
this ruling policy in Sec.  1.468A-8(c)(2).
F. Acceleration of Special Transfer Deduction
    Although deductions for special transfers are generally allowed 
ratably over the plant's remaining useful life, a special rule applies 
if the fund is transferred before the end of the remaining useful life. 
In that case, the entire remaining deduction for the special transfer 
is allowed in the year the fund is transferred. This acceleration 
allows the taxpayer to close its books on the asset. Section 1.468A-
8T(b)(3)(ii) of the temporary regulations provides that, in the case of 
a transfer of a qualified nuclear decommissioning fund to a related 
person, the transferee's ruling amounts will be adjusted to the extent 
necessary to offset the benefit provided by the acceleration of 
deductions. One commentator suggested that the acceleration of the 
special transfer deduction should be viewed as on offset to the timing 
detriment the transferor previously incurred because it was unable to 
fully fund decommissioning costs under pre-2005 law. The commentator 
further suggested that transfers to affiliates should not be treated 
less favorably than transfers to non-affiliates. The IRS and Treasury 
recognize that the transferor may have incurred a timing detriment, but 
section 468A clearly provides that this detriment is to be offset 
ratably over the remaining estimated useful life of the plant rather 
than all at once. While the statute provides for acceleration of the 
deduction when the fund is transferred, the IRS and Treasury continue 
to believe that such acceleration provides an inappropriate benefit to 
a taxpayer that directly or indirectly retains an interest in the plant 
and that failure to recapture the benefit in those circumstances would 
frustrate the intent of Congress in providing for the ratable deduction 
of the special transfer amount. Thus, the final regulations retain the 
limitation on the acceleration of the deduction for special transfers 
where the plant is transferred to an affiliated party.
G. Basis of Property Contributed in a Special Transfer
    Taxpayers may make special transfers of property other than cash. 
Section 468A(f)(2)(D) provides that no gain or loss is recognized on 
the transfer and that for transfers of appreciated property the amount 
of the deduction shall not exceed the adjusted basis of the property. 
The legislative history (footnote 16 of H. Rep. 109-45) includes the 
following discussion relating to such transfers:

    A taxpayer recognizes no gain or loss on the contribution of 
property to a qualified fund under this special rule. The qualified 
fund will take a transferred (carryover) basis in such property. 
Correspondingly, a taxpayer's deduction (over the estimated life of 
the powerplant) is to be based on the adjusted tax basis of the 
property contributed rather than the fair market value of such 
property.

Although the legislative history does not distinguish between 
appreciated property and property with a value less than its basis 
(built-in loss property), the statutory language makes it clear that 
the rule basing the deduction on the property's adjusted tax basis 
applies only to appreciated property. Accordingly, the proposed 
regulations provided that the deduction for property contributed in a 
special transfer is limited to the lesser of fair market value or the 
transferor's adjusted basis in the property. One commentator disagreed 
with this rule and recommended that the regulations allow a deduction 
equal to basis for contributions of built-in loss property. The 
commentator noted that section 362, a nonrecognition provision similar 
to section 468A, provides for a stepped-down basis in the hands of the 
transferee for built-in loss property. The commentator argued for 
adoption of rules similar to those in section 362 so that the 
transferor would get a deduction of its adjusted basis in the property 
and the qualified fund would get a ``stepped-down'' basis of the fair 
market value at the time of transfer. The commentator also noted the 
unfairness of limiting the deduction for built-in loss property to fair 
market value where the transferee is taxed at a higher rate than the 
qualified fund.
    The IRS and Treasury recognize that the transferor and the fund 
could achieve generally the same result as the commentator proposes by 
selling the loss property and contributing the proceeds to the 
qualified fund which could use the proceeds to repurchase the property. 
To eliminate the need for such transactions, the final regulations

[[Page 80700]]

provide that the transferor may deduct the adjusted basis of built-in 
loss property contributed to a fund if the fund elects to treat the 
fair market value of the property as its adjusted basis. Further, the 
final regulations provide that this election may be made and a 
deduction equal to basis will be allowed for built-in loss property 
contributed before December 23, 2010. In such cases, the election may 
be made and the deduction equal to basis may be claimed by filing an 
amended tax return.
H. Miscellaneous Special Transfer Issues
    (i) One commentator noted that the schedule of deduction amounts is 
calculated based on the ``pre-2005 nonqualifying amount'' and 
recommends that this be changed to the pre-2006 nonqualifying amount. 
The commentator correctly notes that, while the changes to section 468A 
were made by the Energy Policy Act of 2005, those changes were 
effective for tax years beginning after December 31, 2005. The modifier 
``pre-2005'' refers to the state of section 468A prior to the changes 
made by the Energy Policy Act of 2005. The pre-2005 nonqualifying 
amount referred to in the proposed regulations was fixed years before 
and was not determined by reference to the effective date of the Energy 
Policy Act of 2005. Thus, the modifier ``pre-2005 nonqualifying 
amount'' is retained in the final regulations.
    (ii) Section 1.468A-3(f)(1)(iii) of the proposed regulations 
requires that a taxpayer request a new schedule of ruling amounts when 
requesting a schedule of deduction amounts. The revised schedule of 
ruling amounts must apply beginning with the first taxable year for 
which a deduction is allowed under the schedule of deduction amounts. 
One commentator suggested that the new schedule of ruling amounts 
should not apply until the following year because the special transfer 
may actually occur at any time during the first taxable year in which a 
deduction is allowed under the schedule of deduction amounts (and under 
the deemed payment rules may occur during the first two-and-a-half 
months of the following taxable year). Section 1.468A-3(f)(1)(iii) of 
the final regulations adopts this suggestion.
    (iii) Section 1.468A-8(a)(2) of the proposed regulations provides 
that the present value of estimated future decommissioning costs is 
determined as of the first day of the taxable year of the taxpayer in 
which the special transfer is made. One commentator noted that the 
special transfer may be made after the first day of the taxable year 
and suggested that the regulations permit determinations of present 
value as of an alternative date. The final regulations permit the use 
of an alternative date that is not later than the date on which the 
special transfer is made if the taxpayer establishes that the 
determination of present value as of such date is reasonable and 
consistent with the principles and provisions of Sec.  1.468A-8.

3. Transfers of Nuclear Power Plants and Their Associated Qualified 
Funds

A. Ambiguity Relating to a Plant That has Ceased Producing Electric 
Energy
    The proposed regulations, at Sec.  1.468A-6(a), provide that, for 
purposes of determining the tax consequences of the transfer of a 
qualified fund associated with a nuclear power plant, a nuclear power 
plant includes a plant that previously qualified as a nuclear power 
plant but that has permanently ceased producing electric energy. One 
commentator notes that this provision apparently allows the tax-free 
transfer of a qualified fund associated with a plant that has 
permanently ceased producing electric energy if all the other 
requirements of Sec.  1.468A-6 are satisfied. That was the intended 
effect of the provision and it is retained in the final regulations.
B. Tax-Free Transfer of a Qualified Fund
    The proposed regulations, at Sec.  1.468A-6(b)(3)(i), require that, 
in order to qualify as a tax-free transfer of a qualified fund, the 
transferee of a nuclear power plant and its associated qualified fund 
must acquire that portion of the qualified fund equal to the 
proportionate amount of the nuclear power plant acquired. One 
commentator expressed disagreement with this rule, arguing that the 
rule as it exists requires a choice between potential disqualification 
of the entire fund and over-funding the qualified fund.
    The commentator's position would allow for the removal of assets at 
transfer when their value is high and perhaps leave the fund without 
sufficient assets to provide for decommissioning. This is contrary to 
the general rule of section 468A, which does not permit withdrawals 
from a qualified fund except to pay for decommissioning and the cost of 
administering the fund. The IRS and Treasury believe a primary purpose 
of section 468A is to ensure that adequate assets will be available to 
decommission the nuclear power plant. Given the long life of nuclear 
power plants and the variability of investment returns, what may appear 
to be overfunding in one decade may be inadequate in the next. 
Moreover, the IRS and Treasury believe that overfunding can be 
adequately addressed by reducing future payments to the qualified 
funds.

4. Miscellaneous Matters

A. Minor Changes in Wording To Reflect Deregulation in Certain 
Jurisdictions
    The proposed regulations, in Sec. Sec.  1.468A-3(a)(2)(i) and 
1.468A-3(e)(2)(vi)(H), refer to ``amounts collected for'' the qualified 
fund. One commentator noted that in certain jurisdictions that have 
undergone deregulation, amounts are no longer collected for the 
qualified funds. The final regulations refer, instead, to the ``assets 
of'' the qualified fund.
B. New Schedule of Ruling Amounts When License is Extended
    Section 1.468A-3(f)(1)(iv) of the proposed regulations requires 
that a taxpayer request a revised schedule of ruling amounts by the 
deemed payment deadline for the year in which the operating license for 
the nuclear power plant is extended by the Nuclear Regulatory 
Commission (NRC). One commentator requested that the deadline for 
requesting a revised schedule of ruling amounts be extended to the 
deemed payment deadline for the year following the year in which the 
operating license is extended by the NRC. The commentator argued that 
the NRC could act late in the year and give the taxpayer little time to 
prepare the request for the revised schedule of ruling amounts. The IRS 
and Treasury believe that the deadline in the proposed regulations 
provides sufficient time to prepare and submit a request for a revised 
schedule of ruling amounts and it is retained in the final regulations.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 12866. 
Therefore, a regulatory assessment is not required. It also has been 
determined that section 553(b) and (d) of the Administrative Procedure 
Act (5 U.S.C. chapter 5) does not apply to these regulations. It is 
hereby certified that this regulation will not have a significant 
economic impact on a substantial number of small entities. The proposed 
regulations do not impose a collection of information on small 
entities. Accordingly, a regulatory flexibility analysis is not 
required. Pursuant to section 7805(f) of the Code, the notice of 
proposed rulemaking preceding these regulations

[[Page 80701]]

was submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on their impact on small business.

Drafting Information

    The principal author of these regulations is Patrick S. Kirwan, 
Office of Associate Chief Counsel (Passthroughs and Special 
Industries). However, other personnel from the IRS and Treasury 
Department participated in their development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 602

    Reporting and recordkeeping requirements.

Amendments to the Regulations

0
Accordingly, 26 CFR parts 1 and 602 are amended as follows:

PART 1--INCOME TAXES

0
Paragraph 1. The authority citation for part 1 is amended by adding an 
entry in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 1.468A-5 also issued under 26 U.S.C. 468A(e)(5). * * *

1.468A-0T through 1.468A-9T   [Removed]

0
Par. 2. Sections 1.468A-0T through 1.468A-9T are removed.
0
Par. 3. Sections 1.468A-0 through 1.468A-9 are added to read as 
follows:


Sec.  1.468A-0  Nuclear decommissioning costs; table of contents.

    This section lists the paragraphs contained in Sec. Sec.  1.468A-1 
through 1.468A-9.


Sec.  1.468A-1  Nuclear decommissioning costs; general rules.

    (a) Introduction.
    (b) Definitions.
    (c) Special rules applicable to certain experimental nuclear 
facilities.


Sec.  1.468A-2  Treatment of electing taxpayer.

    (a) In general.
    (b) Limitation on payments to a nuclear decommissioning fund.
    (1) In general.
    (2) Excess contributions not deductible.
    (c) Deemed payment rules.
    (1) In general.
    (2) Cash payment by customer.
    (d) Treatment of distributions.
    (1) In general.
    (2) Exceptions to inclusion in gross income.
    (i) Payment of administrative costs and incidental expenses.
    (ii) Withdrawals of excess contributions.
    (iii) Actual distributions of amounts included in gross income as 
deemed distributions.
    (e) Deduction when economic performance occurs.


Sec.  1.468A-3  Ruling amount.

    (a) In general.
    (b) Level funding limitation.
    (c) Funding period.
    (d) Decommissioning costs allocable to a fund.
    (1) General rule.
    (2) Total estimated cost of decommissioning.
    (3) Taxpayer's share.
    (e) Manner of requesting schedule of ruling amounts.
    (1) In general.
    (2) Information required.
    (3) Administrative procedures.
    (f) Review and revision of schedule of ruling amounts.
    (1) Mandatory review.
    (2) Elective review.
    (3) Determination of revised schedule of ruling amounts.
    (g) Special rule permitting payments to a nuclear decommissioning 
fund before receipt of an initial or revised ruling amount applicable 
to a taxable year.


Sec.  1.468A-4  Treatment of nuclear decommissioning fund.

    (a) In general.
    (b) Modified gross income.
    (c) Special rules.
    (1) Period for computation of modified gross income.
    (2) Gain or loss upon distribution of property by a fund.
    (3) Denial of credits against tax.
    (4) Other corporate taxes inapplicable.
    (d) Treatment as corporation for purposes of subtitle F.


Sec.  1.468A-5  Nuclear decommissioning fund--miscellaneous provisions.

    (a) Qualification requirements.
    (1) In general.
    (2) Limitation on contributions.
    (3) Limitation on use of fund.
    (i) In general.
    (ii) Definition of administrative costs and expenses.
    (4) Trust provisions.
    (b) Prohibitions against self-dealing.
    (1) In general.
    (2) Self-dealing defined.
    (3) Disqualified person defined.
    (c) Disqualification of nuclear decommissioning fund.
    (1) In general.
    (2) Exception to disqualification.
    (i) In general.
    (ii) Excess contribution defined.
    (iii) Taxation of income attributable to an excess contribution.
    (3) Effect of disqualification.
    (4) Further effects of disqualification.
    (d) Termination of nuclear decommissioning fund upon substantial 
completion of decommissioning.
    (1) In general.
    (2) Additional rules.
    (3) Substantial completion of decommissioning defined.


Sec.  1.468A-6  Disposition of an interest in a nuclear power plant.

    (a) In general.
    (b) Requirements.
    (c) Tax consequences.
    (1) The transferor and its Fund.
    (2) The transferee and its Fund.
    (3) Basis.
    (d) Determination of proportionate amount.
    (e) Calculation of schedule of ruling amounts and schedule of 
deduction amounts for dispositions described in this section.
    (1) Transferor.
    (i) Taxable year of disposition.
    (ii) Taxable years after the disposition.
    (2) Transferee.
    (i) Taxable year of disposition.
    (ii) Taxable years after the disposition.
    (3) Examples.
    (f) Anti-abuse provision.


Sec.  1.468A-7  Manner of and time for making election.

    (a) In general.
    (b) Required information.


Sec.  1.468A-8  Special transfers to qualified funds pursuant to 
section 468A(f).

    (a) General rule.
    (1) In general.
    (2) Pre-2005 nonqualifying amount.
    (i) In general.
    (ii) Pre-2005 nonqualifying amount of transferee.
    (3) Transfers in multiple years.
    (4) Deemed payment rules.
    (i) In general.
    (ii) Special rule for certain transfers.
    (b) Deduction for amounts transferred.
    (1) In general.
    (2) Amount of deduction.
    (i) General Rule.
    (ii) Election.
    (A) In general.
    (B) Manner of making election.
    (C) Election allowed for property transferred prior to December 23, 
2010.
    (3) Denial of deduction for previously deducted amounts.
    (4) Transfers of qualified nuclear decommissioning funds.
    (5) Special rules.
    (i) Gain or loss not recognized on transfers to fund.

[[Page 80702]]

    (ii) Taxpayer basis in fund.
    (iii) Fund basis in transferred property.
    (A) In general.
    (B) Basis in case of election.
    (c) Schedule of deductions required.
    (1) In general.
    (2) Transfers in multiple taxable years.
    (3) Transfer of partial interest in fund.
    (4) Special transfer permitted before receipt of schedule.
    (d) Manner of requesting schedule of deduction amounts.
    (1) In general.
    (2) Information required.
    (3) Statement required.
    (4) Administrative procedures.


Sec.  1.468A-9  Effective/applicability date.

Sec.  1.468A-1  Nuclear decommissioning costs; general rules.

    (a) Introduction. Section 468A provides an elective method for 
taking into account nuclear decommissioning costs for Federal income 
tax purposes. In general, an eligible taxpayer that elects the 
application of section 468A pursuant to the rules contained in Sec.  
1.468A-7 is allowed a deduction (as determined under Sec.  1.468A-2) 
for the taxable year in which the taxpayer makes a cash payment to a 
nuclear decommissioning fund. Taxpayers using an accrual method of 
accounting that do not elect the application of section 468A are not 
allowed a deduction for nuclear decommissioning costs prior to the 
taxable year in which economic performance occurs with respect to such 
costs (see section 461(h)).
    (b) Definitions. The following terms are defined for purposes of 
section 468A and Sec. Sec.  1.468A-1 through 1.468A-9:
    (1) The term eligible taxpayer means any taxpayer that possesses a 
qualifying interest in a nuclear power plant (including a nuclear power 
plant that is under construction).
    (2) The term qualifying interest means--
    (i) A direct ownership interest; and
    (ii) A leasehold interest in any portion of a nuclear power plant 
if--
    (A) The holder of the leasehold interest is primarily liable under 
Federal or State law for decommissioning such portion of the nuclear 
power plant; and
    (B) No other person establishes a nuclear decommissioning fund with 
respect to such portion of the nuclear power plant.
    (3) The term direct ownership interest includes an interest held as 
a tenant in common or joint tenant, but does not include stock in a 
corporation that owns a nuclear power plant or an interest in a 
partnership that owns a nuclear power plant. Thus, in the case of a 
partnership that owns a nuclear power plant, the election under section 
468A must be made by the partnership and not by the partners. In the 
case of an unincorporated organization described in Sec.  1.761-2(a)(3) 
that elects under section 761(a) to be excluded from the application of 
subchapter K, each taxpayer that is a co-owner of the nuclear power 
plant is eligible to make a separate election under section 468A.
    (4) The terms nuclear decommissioning fund and qualified nuclear 
decommissioning fund mean a fund that satisfies the requirements of 
Sec.  1.468A-5. The term nonqualified fund means a fund that does not 
satisfy those requirements.
    (5) The term nuclear power plant means any nuclear power reactor 
that is used predominantly in the trade or business of the furnishing 
or sale of electric energy. Each unit (that is, nuclear reactor) 
located on a multi-unit site is a separate nuclear power plant. The 
term nuclear power plant also includes the portion of the common 
facilities of a multi-unit site allocable to a unit on that site.
    (6) The term nuclear decommissioning costs or decommissioning costs 
includes all otherwise deductible expenses to be incurred in connection 
with the entombment, decontamination, dismantlement, removal and 
disposal of the structures, systems and components of a nuclear power 
plant, whether that nuclear power plant will continue to produce 
electric energy or has permanently ceased to produce electric energy. 
Such term includes all otherwise deductible expenses to be incurred in 
connection with the preparation for decommissioning, such as 
engineering and other planning expenses, and all otherwise deductible 
expenses to be incurred with respect to the plant after the actual 
decommissioning occurs, such as physical security and radiation 
monitoring expenses. Such term also includes costs incurred in 
connection with the construction, operation, and ultimate 
decommissioning of a facility used solely to store, pending acceptance 
by the government for permanent storage or disposal, spent nuclear fuel 
generated by the nuclear power plant or plants located on the same site 
as the storage facility. Such term does not include otherwise 
deductible expenses to be incurred in connection with the disposal of 
spent nuclear fuel under the Nuclear Waste Policy Act of 1982 (Pub. L. 
97-425). An expense is otherwise deductible for purposes of this 
paragraph (b)(6) if it would be deductible under chapter 1 of the 
Internal Revenue Code without regard to section 280B.
    (7) The term public utility commission means any State or political 
subdivision thereof, any agency, instrumentality or judicial body of 
the United States, or any judicial body, commission or other similar 
body of the District of Columbia or of any State or any political 
subdivision thereof that establishes or approves rates for the 
furnishing or sale of electric energy.
    (8) The term ratemaking proceeding means any proceeding before a 
public utility commission in which rates for the furnishing or sale of 
electric energy are established or approved. Such term includes a 
generic proceeding that applies to two or more taxpayers that are 
subject to the jurisdiction of a single public utility commission.
    (9) The term special transfer means any transfer of funds to a 
qualified nuclear decommissioning fund pursuant to Sec.  1.468A-8.
    (c) Special rules applicable to certain experimental nuclear 
facilities. (1) The owner of a qualifying interest in an experimental 
nuclear facility possesses a qualifying interest in a nuclear power 
plant for purposes of paragraph (b) of this section if such person is 
engaged in the trade or business of the furnishing or sale of electric 
energy.
    (2) An owner of stock in a corporation that owns an experimental 
nuclear facility possesses a qualifying interest in a nuclear power 
plant for purposes of paragraph (b)(1) of this section if--
    (i) Such stockholder satisfies the conditions of paragraph (c)(1) 
of this section; and
    (ii) The corporation that directly owns the facility is not engaged 
in the trade or business of the furnishing or sale of electric energy.
    (3) For purposes of this paragraph (c), an experimental nuclear 
facility is a nuclear power reactor that is used predominantly for the 
purpose of conducting experimentation and research.


Sec.  1.468A-2  Treatment of electing taxpayer.

    (a) In general. An eligible taxpayer that elects the application of 
section 468A pursuant to the rules contained in Sec.  1.468A-7 (an 
electing taxpayer) is allowed a deduction for the taxable year in which 
the taxpayer makes a cash payment (or is deemed to make a cash payment 
as provided in paragraph (c) of this section) to a nuclear 
decommissioning fund and for any taxable year in which a deduction is 
allowed for a special transfer described in Sec.  1.468A-8. The amount 
of the deduction for any taxable year equals

[[Page 80703]]

the total amount of cash payments made (or deemed made) by the electing 
taxpayer to a nuclear decommissioning fund (or nuclear decommissioning 
funds) during such taxable year under this section, plus any amount 
allowable as a deduction in that taxable year for a special transfer 
described in Sec.  1.468A-8. The amount of a special transfer permitted 
under Sec.  1.468A-8 is not treated as a cash payment for purposes of 
this paragraph (a), and a taxpayer making a special transfer is allowed 
a ratable deduction in each taxable year during the remaining useful 
life of the nuclear power plant for the special transfer. A payment may 
not be made (or deemed made) to a nuclear decommissioning fund before 
the first taxable year in which all of the following conditions are 
satisfied:
    (1) The construction of the nuclear power plant to which the 
nuclear decommissioning fund relates has commenced.
    (2) A ruling amount is applicable to the nuclear decommissioning 
fund (see Sec.  1.468A-3).
    (b) Limitation on payments to a nuclear decommissioning fund--(1) 
In general. For purposes of paragraph (a) of this section, the maximum 
amount of cash payments made (or deemed made) to a nuclear 
decommissioning fund under paragraph (a) of this section during any 
taxable year shall not exceed the ruling amount applicable to the 
nuclear decommissioning fund for such taxable year (as determined under 
Sec.  1.468A-3).
    (2) Excess contributions not deductible. If the amount of cash 
payments made (or deemed made) to a nuclear decommissioning fund during 
any taxable year exceeds the limitation of paragraph (b)(1) of this 
section, the excess is not deductible by the electing taxpayer. In 
addition, see paragraph (c) of Sec.  1.468A-5 for rules which provide 
that the Internal Revenue Service may disqualify a nuclear 
decommissioning fund if the amount of cash payments made (or deemed 
made) to a nuclear decommissioning fund during any taxable year exceeds 
the limitation of paragraph (b)(1) of this section.
    (3) Special transfer disregarded. The amount of a special transfer 
permitted under Sec.  1.468A-8 is not treated as a cash payment for 
purposes of this paragraph (b).
    (c) Deemed payment rules--(1) In general. The amount of any cash 
payment made by an electing taxpayer to a nuclear decommissioning fund 
on or before the 15th day of the third calendar month after the close 
of any taxable year (the deemed payment deadline date) shall be deemed 
made during such taxable year if the electing taxpayer irrevocably 
designates the amount as relating to such taxable year on its timely 
filed Federal income tax return for such taxable year (see Sec.  
1.468A-7(b)(4)(iii) and (iv) for rules relating to such designation).
    (2) Cash payment by customer. The amount of any cash payment made 
by a customer of an electing taxpayer to a nuclear decommissioning fund 
of such electing taxpayer shall be deemed made by the electing taxpayer 
if the amount is included in the gross income of the electing taxpayer 
in the manner prescribed by section 88 and Sec.  1.88-1.
    (d) Treatment of distributions--(1) In general. Except as otherwise 
provided in paragraph (d)(2) of this section, the amount of any actual 
or deemed distribution from a nuclear decommissioning fund shall be 
included in the gross income of the electing taxpayer for the taxable 
year in which the distribution occurs. The amount of any distribution 
of property equals the fair market value of the property on the date of 
the distribution. See Sec.  1.468A-5(c) and (d) for rules relating to 
the deemed distribution of the assets of a nuclear decommissioning fund 
in the case of a disqualification or termination of the fund. A 
distribution from a nuclear decommissioning fund shall include an 
expenditure from the fund or the use of the fund's assets--
    (i) To satisfy, in whole or in part, the liability of the electing 
taxpayer for decommissioning costs of the nuclear power plant to which 
the fund relates; and
    (ii) To pay administrative costs and other incidental expenses of 
the fund.
    (2) Exceptions to inclusion in gross income--(i) Payment of 
administrative costs and incidental expenses. The amount of any payment 
by a nuclear decommissioning fund for administrative costs or other 
incidental expenses of such fund (as defined in Sec.  1.468A-
5(a)(3)(ii)) shall not be included in the gross income of the electing 
taxpayer unless such amount is paid to the electing taxpayer (in which 
case the amount of the payment is included in the gross income of the 
electing taxpayer under section 61).
    (ii) Withdrawals of excess contributions. The amount of a 
withdrawal of an excess contribution (as defined in Sec.  1.468A-
5(c)(2)(ii)) by an electing taxpayer pursuant to the rules of Sec.  
1.468A-5(c)(2) shall not be included in the gross income of the 
electing taxpayer. See paragraph (b)(2) of this section, which provides 
that the payment of such amount to the nuclear decommissioning fund is 
not deductible by the electing taxpayer.
    (iii) Actual distributions of amounts included in gross income as 
deemed distributions. If the amount of a deemed distribution is 
included in the gross income of the electing taxpayer for the taxable 
year in which the deemed distribution occurs, no further amount is 
required to be included in gross income when the amount of the deemed 
distribution is actually distributed by the nuclear decommissioning 
fund. The amount of a deemed distribution is actually distributed by a 
nuclear decommissioning fund as the first actual distributions are made 
by the nuclear decommissioning fund on or after the date of the deemed 
distribution.
    (e) Deduction when economic performance occurs. An electing 
taxpayer using an accrual method of accounting is allowed a deduction 
for nuclear decommissioning costs no earlier than the taxable year in 
which economic performance occurs with respect to such costs (see 
section 461(h)(2)). The amount of nuclear decommissioning costs that is 
deductible under this paragraph (e) is determined without regard to 
section 280B (see Sec.  1.468A-1(b)(6)). A deduction is allowed under 
this paragraph (e) whether or not a deduction was allowed with respect 
to such costs under section 468A(a) and paragraph (a) of this section 
for an earlier taxable year.


Sec.  1.468A-3  Ruling amount.

    (a) In general. (1) Except as otherwise provided in paragraph (g) 
of this section or in Sec.  1.468A-8 (relating to deductions for 
special transfers into a nuclear decommissioning fund), an electing 
taxpayer is allowed a deduction under section 468A(a) for the taxable 
year in which the taxpayer makes a cash payment (or is deemed to make a 
cash payment) to a nuclear decommissioning fund only if the taxpayer 
has received a schedule of ruling amounts for the nuclear 
decommissioning fund that includes a ruling amount for such taxable 
year. Except as provided in paragraph (a)(4) or (5) of this section, a 
schedule of ruling amounts for a nuclear decommissioning fund (schedule 
of ruling amounts) is a ruling (within the meaning of Sec.  
601.201(a)(2) of this chapter) specifying the annual payments (ruling 
amounts) that, over the taxable years remaining in the funding period 
as of the date the schedule first applies, will result in a projected 
balance of the nuclear decommissioning fund as of the last day of the 
funding period equal to (and in no event greater than) the amount of 
decommissioning costs allocable to the fund. The projected balance of a 
nuclear decommissioning

[[Page 80704]]

fund as of the last day of the funding period shall be calculated by 
taking into account the fair market value of the assets of the fund as 
of the first day of the first taxable year to which the schedule of 
ruling amounts applies and the estimated rate of return to be earned by 
the assets of the fund after payment of the estimated administrative 
costs and incidental expenses to be incurred by the fund (as defined in 
Sec.  1.468A-5(a)(3)(ii)), including all Federal, State and local 
income taxes to be incurred by the fund (the after-tax rate of return). 
See paragraph (c) of this section for a definition of funding period 
and paragraph (d) of this section for guidance with respect to the 
amount of decommissioning costs allocable to a fund.
    (2) Each schedule of ruling amounts must be consistent with the 
principles and provisions of this section and must be based on 
reasonable assumptions concerning--
    (i) The after-tax rate of return to be earned by the assets of the 
qualified nuclear decommissioning fund;
    (ii) The total estimated cost of decommissioning the nuclear power 
plant (see paragraph (d)(2) of this section); and
    (iii) The frequency of contributions to a nuclear decommissioning 
fund for a taxable year (for example, monthly, quarterly, semi-annual 
or annual contributions).
    (3) The Internal Revenue Service (IRS) shall provide a schedule of 
ruling amounts that is identical to the schedule of ruling amounts 
proposed by the taxpayer in connection with the taxpayer's request for 
a schedule of ruling amounts (see paragraph (e)(2)(viii) of this 
section), but no schedule of ruling amounts shall be provided unless 
the taxpayer's proposed schedule of ruling amounts is consistent with 
the principles and provisions of this section and is based on 
reasonable assumptions. If a proposed schedule of ruling amounts is not 
consistent with the principles and provisions of this section or is not 
based on reasonable assumptions, the taxpayer may propose an amended 
schedule of ruling amounts that is consistent with such principles and 
provisions and is based on reasonable assumptions.
    (4) The taxpayer bears the burden of demonstrating that the 
proposed schedule of ruling amounts is consistent with the principles 
and provisions of this section and is based on reasonable assumptions. 
If a public utility commission established or approved the currently 
applicable rates for the furnishing or sale by the taxpayer of 
electricity from the plant, the taxpayer can generally satisfy this 
burden of proof by demonstrating that the schedule of ruling amounts is 
calculated using the assumptions used by the public utility commission 
in its most recent order. In addition, a taxpayer that owns an interest 
in a deregulated nuclear plant may submit assumptions used by a public 
utility commission that formerly had regulatory jurisdiction over the 
plant as support for the assumptions used in calculating the taxpayer's 
proposed schedule of ruling amounts, with the understanding that the 
assumptions used by the public utility commission may be given less 
weight if they are out of date or were developed in a proceeding for a 
different taxpayer. The use of other industry standards, such as the 
assumptions underlying the taxpayer's most recent financial assurance 
filing with the NRC, are an alternative means of demonstrating that the 
taxpayer has calculated its proposed schedule of ruling amounts on a 
reasonable basis. Consistency with financial accounting statements is 
not sufficient, in the absence of other supporting evidence, to meet 
the taxpayer's burden of proof under this paragraph (a)(4).
    (5) The IRS will approve, at the request of the taxpayer, a formula 
or method for determining a schedule of ruling amounts (rather than 
providing a schedule specifying a dollar amount for each taxable year) 
if the formula or method is consistent with the principles and 
provisions of this section and is based on reasonable assumptions. See 
paragraph (f)(1)(ii) of this section for a special rule relating to the 
mandatory review of ruling amounts that are determined pursuant to a 
formula or method.
    (6) The IRS may, in its discretion, provide a schedule of ruling 
amounts that is determined on a basis other than the rules of 
paragraphs (a) through (d) of this section if--
    (i) In connection with its request for a schedule of ruling 
amounts, the taxpayer explains the need for special treatment and sets 
forth an alternative basis for determining the schedule of ruling 
amounts; and
    (ii) The IRS determines that special treatment is consistent with 
the purpose of section 468A.
    (b) Level funding limitation. (1) Except as otherwise provided in 
paragraph (b)(3) of this section, the ruling amount specified in a 
schedule of ruling amounts for any taxable year in the funding period 
(as defined in paragraph (c) of this section) shall not be less than 
the ruling amount specified in such schedule for any earlier taxable 
year.
    (2) The ruling amount specified in a schedule of ruling amounts for 
a taxable year after the end of the funding period may be less than the 
ruling amount specified in such schedule for an earlier taxable year.
    (3) The ruling amount specified in a schedule of ruling amounts for 
the last taxable year in the funding period may be less than the ruling 
amount specified in such schedule for an earlier taxable year if, when 
annualized, the amount specified for the last taxable year is not less 
than the amount specified for such earlier taxable year. The amount 
specified for the last taxable year is annualized by--
    (i) Determining the number of days between the beginning of the 
taxable year and the end of the plant's estimated useful life;
    (ii) Dividing the amount specified for the last taxable year by 
such number of days; and
    (iii) Multiplying the result by the number of days in the last 
taxable year (generally 365).
    (c) Funding period--(1) In general. For purposes of this section, 
the funding period for a nuclear decommissioning fund is the period 
that--
    (i) Begins on the first day of the first taxable year for which a 
deductible payment is made (or deemed made) to such nuclear 
decommissioning fund (see Sec.  1.468A-2(a) for rules relating to the 
first taxable year for which a payment may be made (or deemed made) to 
a nuclear decommissioning fund); and
    (ii) Ends on the last day of the taxable year that includes the 
last day of the estimated useful life of the nuclear power plant to 
which the nuclear decommissioning fund relates.
    (2) Estimated useful life. The last day of the estimated useful 
life of a nuclear power plant is determined under the following rules:
    (i) Except as provided in paragraph (c)(2)(ii) of this section--
    (A) The last day of the estimated useful life of a nuclear power 
plant that has been included in rate base for ratemaking purposes in 
any ratemaking proceeding that established rates for a period before 
January 1, 2006, is the date used in the first such ratemaking 
proceeding as the estimated date on which the nuclear power plant will 
no longer be included in the taxpayer's rate base for ratemaking 
purposes;
    (B) The last day of the estimated useful life of a nuclear power 
plant that is not described in paragraph (c)(2)(i)(A) of this section 
is the last day of the estimated useful life of the plant determined as 
of the date it is placed in service;

[[Page 80705]]

    (C) A taxpayer with an interest in a plant that is not described in 
paragraph (c)(2)(i)(A) of this section may use any reasonable method 
for determining the last day of such estimated useful life; and
    (D) A reasonable method for purposes of paragraph (c)(2)(i)(C) of 
this section may include use of the period for which a public utility 
commission has included a comparable nuclear power plant in rate base 
for ratemaking purposes.
    (ii) If it can be established that the estimated useful life of the 
nuclear power plant will end on a date other than the date determined 
under paragraph (c)(2)(i) of this section, the taxpayer may use such 
other date as the last day of the estimated useful life but is not 
required to do so. If the last day of the estimated useful life was 
determined under paragraph (c)(2)(i)(A) of this section and the most 
recent ratemaking proceeding used an alternative date as the estimated 
date on which the nuclear power plant will no longer be included rate 
base, the most recent ratemaking proceeding will generally be treated 
as establishing such alternative date as the last day of the estimated 
useful life.
    (iii) The estimated useful life of a nuclear power plant determined 
for purposes of paragraph (c)(1) of this section may end on a different 
date from the estimated useful life of a nuclear power plant determined 
for purposes of Sec.  1.468A-8(b)(1) and (c)(1).
    (d) Decommissioning costs allocable to a fund. The amount of 
decommissioning costs allocable to a nuclear decommissioning fund is 
determined for purposes of this section by applying the following rules 
and definitions:
    (1) General rule. The amount of decommissioning costs allocable to 
a nuclear decommissioning fund is the taxpayer's share of the total 
estimated cost of decommissioning the nuclear power plant to which the 
fund relates.
    (2) Total estimated cost of decommissioning. Under paragraph (a)(2) 
of this section, the taxpayer must demonstrate the reasonableness of 
the assumptions concerning the total estimated cost of decommissioning 
the nuclear power plant.
    (3) Taxpayer's share. The taxpayer's share of the total estimated 
cost of decommissioning a nuclear power plant equals the total 
estimated cost of decommissioning such nuclear power plant multiplied 
by the percentage of such nuclear power plant that the qualifying 
interest of the taxpayer represents. (See Sec.  1.468A-1(b)(2) for 
circumstances in which a taxpayer possesses a qualifying interest in a 
nuclear power plant).
    (e) Manner of requesting schedule of ruling amounts--(1) In 
general. (i) In order to receive a ruling amount for any taxable year, 
a taxpayer must file a request for a schedule of ruling amounts that 
complies with the requirements of this paragraph (e), the applicable 
procedural rules set forth in Sec.  601.201(e) of this chapter 
(Statement of Procedural Rules), and the requirements of any applicable 
revenue procedure that is in effect on the date the request is filed.
    (ii) A separate request for a schedule of ruling amounts is 
required for each nuclear decommissioning fund established by a 
taxpayer. (See paragraph (a) of Sec.  1.468A-5 for rules relating to 
the number of nuclear decommissioning funds that a taxpayer can 
establish.)
    (iii) Except as provided by Sec. Sec.  1.468A-5(a)(1)(iv) (relating 
to certain unincorporated organizations that may be taxable as 
corporations) and 1.468A-8 (relating to a special transfer under 
section 468A(f)(1)), a request for a schedule of ruling amounts must 
not contain a request for a ruling on any other issue, whether the 
issue involves section 468A or another section of the Internal Revenue 
Code.
    (iv) In the case of an affiliated group of corporations that join 
in the filing of a consolidated return, the common parent of the group 
may request a schedule of ruling amounts for each member of the group 
that possesses a qualifying interest in the same nuclear power plant by 
filing a single submission with the IRS.
    (v) The IRS will not provide or revise a ruling amount applicable 
to a taxable year in response to a request for a schedule of ruling 
amounts that is filed after the deemed payment deadline date (as 
defined in Sec.  1.468A-2(c)(1)) for such taxable year. In determining 
the date when a request is filed, the principles of sections 7502 and 
7503 shall apply.
    (vi) Except as provided in paragraph (e)(1)(vii) of this section, a 
request for a schedule of ruling amounts shall be considered filed only 
if such request complies substantially with the requirements of this 
paragraph (e).
    (vii) If a request does not comply substantially with the 
requirements of this paragraph (e), the IRS will notify the taxpayer of 
that fact. If the information or materials necessary to comply 
substantially with the requirements of this paragraph (e) are provided 
to the IRS within 30 days after this notification, the request will be 
considered filed on the date of the original submission. In addition, 
the request will be considered filed on the date of the original 
submission in a case in which the information and materials are 
provided more than 30 days after the notification if the IRS determines 
that the electing taxpayer made a good faith effort to provide the 
applicable information or materials within 30 days after notification 
and also determines that treating the request as filed on the date of 
the original submission is consistent with the purposes of section 
468A. In any other case in which the information or materials necessary 
to comply substantially with the requirements of this paragraph (e) are 
not provided within 30 days after the notification, the request will be 
considered filed on the date that all information or materials 
necessary to comply with the requirements of this paragraph (e) are 
provided.
    (2) Information required. A request for a schedule of ruling 
amounts must contain the following information:
    (i) The taxpayer's name, address, and taxpayer identification 
number.
    (ii) Whether the request is for an initial schedule of ruling 
amounts, a mandatory review of the schedule of ruling amounts (see 
paragraph (f)(1) of this section), or an elective review of the 
schedule of ruling amounts (see paragraph (f)(2) of this section).
    (iii) The name and location of the nuclear power plant with respect 
to which a schedule of ruling amounts is requested.
    (iv) A description of the taxpayer's qualifying interest in the 
nuclear power plant and the percentage of such nuclear power plant that 
the qualifying interest of the taxpayer represents.
    (v) Where applicable, an identification of each public utility 
commission that establishes or approves rates for the furnishing or 
sale by the taxpayer of electric energy generated by the nuclear power 
plant, and, for each public utility commission identified--
    (A) Whether the public utility commission has determined the amount 
of decommissioning costs to be included in the taxpayer's cost of 
service for ratemaking purposes;
    (B) The amount of decommissioning costs that are to be included in 
the taxpayer's cost of service for each taxable year under the current 
determination and amounts that otherwise are required to be included in 
the taxpayer's income under section 88 and the regulations thereunder;
    (C) A description of the assumptions, estimates and other factors 
used by the public utility commission to determine the amount of 
decommissioning costs;
    (D) A copy of such portions of any order or opinion of the public 
utility commission as pertain to the public

[[Page 80706]]

utility commission's most recent determination of the amount of 
decommissioning costs to be included in cost of service; and
    (E) A copy of each engineering or cost study that was relied on or 
used by the public utility commission in determining the amount of 
decommissioning costs to be included in the taxpayer's cost of service 
under the current determination.
    (vi) A description of the assumptions, estimates and other factors 
that were used by the taxpayer to determine the amount of 
decommissioning costs, including each of the following if applicable:
    (A) A description of the proposed method of decommissioning the 
nuclear power plant (for example, prompt removal/dismantlement, safe 
storage entombment with delayed dismantlement, or safe storage 
mothballing with delayed dismantlement).
    (B) The estimated year in which substantial decommissioning costs 
will first be incurred.
    (C) The estimated year in which the decommissioning of the nuclear 
power plant will be substantially complete (see Sec.  1.468A-5(d)(3) 
for a definition of substantial completion of decommissioning).
    (D) The total estimated cost of decommissioning expressed in 
current dollars (that is, based on price levels in effect at the time 
of the current determination).
    (E) The total estimated cost of decommissioning expressed in future 
dollars (that is, based on anticipated price levels when expenses are 
expected to be paid).
    (F) For each taxable year in the period that begins with the year 
specified in paragraph (e)(2)(vi)(B) of this section (the estimated 
year in which substantial decommissioning costs will first be incurred) 
and ends with the year specified in paragraph (e)(2)(vi)(C) of this 
section (the estimated year in which the decommissioning of the nuclear 
power plant will be substantially complete), the estimated cost of 
decommissioning expressed in future dollars.
    (G) A description of the methodology used in converting the 
estimated cost of decommissioning expressed in current dollars to the 
estimated cost of decommissioning expressed in future dollars.
    (H) The assumed after-tax rate of return to be earned by the assets 
of the qualified nuclear decommissioning fund.
    (I) A copy of each engineering or cost study that was relied on or 
used by the taxpayer in determining the amount of decommissioning 
costs.
    (vii) A proposed schedule of ruling amounts for each taxable year 
remaining in the funding period as of the date the schedule of ruling 
amounts will first apply.
    (viii) A description of the assumptions, estimates and other 
factors that were used in determining the proposed schedule of ruling 
amounts, including, if applicable--
    (A) The funding period (as such term is defined in paragraph (c) of 
this section);
    (B) The assumed after-tax rate of return to be earned by the assets 
of the nuclear decommissioning fund;
    (C) The fair market value of the assets (if any) of the nuclear 
decommissioning fund as of the first day of the first taxable year to 
which the schedule of ruling amounts will apply;
    (D) The amount expected to be earned by the assets of the nuclear 
decommissioning fund (based on the after-tax rate of return applicable 
to the fund) over the period that begins on the first day of the first 
taxable year to which the schedule of ruling amounts will apply and 
ends on the last day of the funding period;
    (E) The amount of decommissioning costs allocable to the nuclear 
decommissioning fund (as determined under paragraph (d) of this 
section);
    (F) The total estimated cost of decommissioning (as determined 
under paragraph (d)(2) of this section); and
    (G) The taxpayer's share of the total estimated cost of 
decommissioning (as such term is defined in paragraph (d)(3) of this 
section).
    (ix) If the request is for a revised schedule of ruling amounts, 
the after-tax rate of return earned by the assets of the nuclear 
decommissioning fund for each taxable year in the period that begins 
with the date of the initial contribution to the fund and ends with the 
first day of the first taxable year to which the revised schedule of 
ruling amounts applies.
    (x) If applicable, an explanation of the need for a schedule of 
ruling amounts determined on a basis other than the rules of paragraphs 
(a) through (d) of this section and a description of an alternative 
basis for determining a schedule of ruling amounts (see paragraph 
(a)(5) of this section).
    (xi) A chart or table, based upon the assumed after-tax rate of 
return to be earned by the assets of the nuclear decommissioning fund, 
setting forth the years the fund will be in existence, the annual 
contribution to the fund, the estimated annual earnings of the fund and 
the cumulative total balance in the fund.
    (xii) If the request is for a revised schedule of ruling amounts, a 
copy of the schedule of ruling amounts that the revised schedule would 
replace.
    (xiii) If the request for a schedule of ruling amounts contains a 
request, pursuant to Sec.  1.468A-5(a)(1)(iv), that the IRS rule 
whether an unincorporated organization through which the assets of the 
fund are invested is an association taxable as a corporation for 
Federal tax purposes, a copy of the legal d