[Congressional Record Volume 145, Number 95 (Wednesday, June 30, 1999)]
[Senate]
[Page S7938]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MURKOWSKI:
  S. 1308. A bill to amend section 468A of the Internal Revenue Code of 
1986 with respect to deductions for decommissioning costs of nuclear 
power plants; to the Committee on Finance.


                      nuclear decommissioning fund

  Mr. MURKOWSKI. Mr. President, I am joined today by Senator John 
Breaux in introducing The Nuclear Decommissioning Funds Clarification 
Act. This change in the tax law is necessary because the electricity 
industry is rapidly moving from a regulatory monopoly model to the 
competitive marketplace.
  In 1984, Congress enacted Code Section 468A which was designed to 
allow state public service commissions to authorize that future costs 
for decommissioning nuclear power plants could be charged by a utility 
to its customers to be dedicated to a nuclear decommissioning fund. 
Currently, utilities are permitted a deduction for contributions to 
their decommissioning funds. The amount that can be deducted is 
currently limited to the cost of service amount or the ruling amount. 
The cost of service amount is the amount of decommissioning costs 
included in the taxpayer's cost of service for ratemaking purposes. The 
ruling amount is the amount that the IRS determines to be necessary to 
provide for level funding of an amount equal to the taxpayer's nuclear 
decommissioning costs.
  Since Section 468A was adopted, the electricity industry landscape 
has been substantially transformed. Since 1992, more than 20 states 
have approved plans to introduce competition and all states are 
considering deregulation. The Energy Committee which I chair has also 
held several hearings on Federal deregulation proposals and it is my 
hope that a federal deregulation bill will be adopted in this Congress.
  Since deductible contributions made to a nuclear decommissioning fund 
are based on limitations reflected in cost-of-service ratemaking, 
companies operating in a competitive market can no longer deduct 
contributions to decommissioning funds. Our bill clarifies the 
deductibility of nuclear decommissioning costs in a market environment 
and codifies the definition of nuclear decommissioning costs that limit 
contributions.
  This legislation also clarifies a number of tax issues relating to 
decommissioning funds to ensure that nuclear utilities can operate 
effectively in this new competitive environment.
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