[Congressional Record Volume 141, Number 80 (Monday, May 15, 1995)]
[Extensions of Remarks]
[Page E1034]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


        NUCLEAR DECOMMISSIONING COSTS SIMPLIFICATION ACT OF 1995

                                 ______


                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                          Monday, May 15, 1995
  Mr. CRANE. Mr. Speaker, one of the issues that the voters expect this 
Congress to address relates to the elimination of unnecessary and 
burdensome Federal requirements and regulations. In that spirit, I am 
today introducing legislation, the Nuclear Decommissioning Costs 
Simplification Act of 1995, which will take one small and reasonable 
step toward simplifying our Tax Code.
  Under current law, section 468A of the Internal Revenue Code permits 
a utility to elect a deduction for the amount of payments made to a 
nuclear decommissioning reserve fund. The fund must be dedicated 
exclusively for the payment of costs associated with decommissioning a 
nuclear power reactor. The amount of the deductible payment for a 
particular tax year is limited to the lesser of: first, the nuclear 
decommissioning cost included in the taxpayer's cost of service for 
ratemaking purposes or, second, the so-called ruling amount as 
determined by the Internal Revenue Service [IRS]. In order to claim a 
deduction, the taxpayer must submit a detailed application to the IRS 
which sets forth the computation of the ruling amount.
  It has been indicated to me that the process required by section 468A 
is the only provision of the Internal Revenue Code in which a deduction 
is made conditional upon pre-approval by the Secretary of the Treasury. 
Moreover, preparation of each ruling request costs utilities thousands 
of dollars in legal and other fees in addition to the $3,000 user fee 
imposed for filing the ruling request. In many cases, utilities have 
more than one reactor, in which case the utility must absorb the 
preparation costs and pay the filing fee several times in a single 
year. For example, a taxpayer with four reactors that contributes to 
four reserve funds would incur costs in excess of $50,000 to submit 
four ruling requests.
  Mr. Speaker, perhaps this unique pre-clearance procedure would be 
necessary if there was a particular risk of fraud, abuse, or 
miscalculation. However, there is no evidence that any such risk exists 
or ever has existed for that matter. Nevertheless, the pre-clearance 
requirement lives on in the Internal Revenue Code. The time has come to 
recognize that the process that utilities go through to comply with 
section 468A is entirely computational, and presents no unusual set of 
circumstances requiring the abandonment of the normal rule that 
taxpayers take deductions subject to a subsequent audit.
  The Nuclear Decommissioning Costs Simplification Act of 1995 is truly 
a simplification proposal. The bill, if enacted, would modify section 
468A by striking the requirement that the taxpayer must request and 
receive a schedule of ruling amounts from the Secretary of the Treasury 
as a condition to claiming a deduction for payments to the nuclear 
decommissioning reserve fund. The bill would not result in larger 
deductions because the current substantive rule limiting the deduction 
would remain in place. The proposal simply would have the effect of 
treating the deduction for amounts paid into the fund in the same 
manner as other deductions are treated and if, on audit, the IRS 
determines that an excess amount was deducted by the utility, 
additional tax payments, interest, and penalties would be imposed.
  Mr. Speaker, this reform may not be as dramatic as some others that 
we have debated in the House this year, but it is no less worthy. The 
bill I am introducing today is narrowly targeted to relieve utilities 
of a regulatory requirement that long ago outlived its usefulness. It 
will neither create a tax loophole nor compromise safety, but it will 
strike a small blow for sensible deregulation. I am hopeful that this 
legislation will be considered in the context of tax legislation this 
year, and I urge my colleagues to support this effort.


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