[Federal Register Volume 70, Number 177 (Wednesday, September 14, 2005)]
[Notices]
[Pages 54421-54424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-5013]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 35-28026]


Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

September 8, 2005.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission pursuant to provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by October 3, 2005, to the Secretary, Securities and Exchange 
Commission, 100 F Street, NE., Washington, DC 20549-9303, and serve a 
copy on the relevant applicant(s) and/or declarant(s) at the 
address(es) specified below. Proof of service (by affidavit or, in the 
case of an attorney at law, by certificate) should be filed with the 
request. Any request for hearing should identify specifically the 
issues of facts or law that are disputed. A person who so requests will 
be notified of any hearing, if ordered, and will receive a copy of any 
notice or order issued in the matter. After October 3, 2005, the 
application(s) and/or declaration(s), as filed or as amended, may be 
granted and/or permitted to become effective.

Ameren Corp., et al. (70-10078)

    Ameren Corporation (``Ameren''), a registered holding company, 1901 
Chouteau Avenue, St. Louis, Missouri 63103, CILCORP Inc. (``CILCORP''), 
a wholly owned exempt holding company subsidiary of Ameren, AmernEnergy 
Resources Generating Company (``AERG''), a wholly owned indirect 
electric utility company subsidiary of Ameren, and CILCORP Investment

[[Page 54422]]

Management, Inc. (``CIM'') a wholly owned direct nonutility subsidiary 
of CILCORP, all at 300 Liberty Street, Peoria, Illinois 61602, have 
filed an application-declaration under sections 6(a), 7, 9(a),10, 
11(b)(1), 12(b) and 12(f) of the Act and rule 45 under the Act.

I. Background

A. The Ameren System
    Ameren directly owns all of the issued and outstanding common stock 
of Union Electric Company, dba ``AmerenUE,'' Central Illinois Public 
Service Company, dba ``AmerenCIPS,'' and Illinois Power Company dba 
``AmerenIP.'' Additionally, through CILCORP, Ameren owns all of the 
issued and outstanding common stock of Central Illinois Light Company, 
dba ``AmerenCILCO.'' AmerenCILCO also holds all of the outstanding 
common stock of AERG, an electric utility generating subsidiary to 
which AmerenCILCO transferred substantially all of its generating 
assets in October 2003. Together, AmerenUE, AmerenCIPS, AmerenIP and 
AmerenCILCO provide retail and wholesale electric service to 
approximately 2.3 million customers and retail natural gas service to 
approximately 935,000 customers in parts of Missouri and Illinois.
    CIM holds investments in several leasing transactions, including 
those held through its wholly-owned subsidiaries: CIM Air Leasing, Inc. 
(``CIM Air''), CILCORP Lease Management Inc. (``CLM''), CIM Leasing, 
Inc. (``CIM Leasing'') and CIM Energy Investments, Inc. (``CIM 
Energy''). CIM also owns interests in the following partnerships: 
Midwest Corporate Tax Credit Fund, LP; Midwest Corporate Tax Credit 
Fund II, LP; Provident Tax Credit Fund III, LP; Illinois Equity Fund 
1992 Limited Partnership; Illinois Equity Fund 1994 Limited 
Partnership; Illinois Equity Fund 1996 Limited Partnership; and 
Illinois Equity Fund 1998 Limited Partnership (collectively, ``Housing 
Credit Partnerships'').
B. Past Orders
    By order dated January 29, 2003, (HCAR No. 27645, ``Initial 
Order''), the Commission authorized Ameren to acquire all of the issued 
and outstanding common stock of CILCORP. Ameren completed the 
acquisition of CILCORP on January 31, 2003. In the Initial Order, the 
Commission reserved jurisdiction over Ameren's retention of certain 
indirect non-utility subsidiaries and investments of CILCORP under 
section 11(b)(1) of the Act, including the following:
     CIM's 40% interest--held by CIM Air through a grantor 
trust--in Freighter Express Partners (``FEP''), which owns a commercial 
aircraft that is leased to an unrelated third party under an agreement 
dated as of October 1, 1993 and subject to non-recourse lease debt 
(``FEP Partnership Interest'').
     CIM's 100% interest--held by CIM Leasing through a grantor 
trust--in passenger railcars that are leased to an unrelated third 
party under an agreement dated as of September 1, 1993 and subject to 
non-recourse lease debt (``Railcars Interest'').
     CLM's 7.4257% interest--held through a grantor trust--in 
Unit No. 1 of the Springerville Power Plant, which is leased to an 
unrelated third party under an agreement dated December 15, 1986 and 
subject to non-recourse lease debt (``Power Plant Interest'').
     CLM's 49.9% interest--held by two wholly-owned 
subsidiaries, CLM Inc., IV (``CLM IV'') and CLM XII, Inc. (``CLM 
XII'')--in D.C.L. Leasing Partners Limited Partnership, Ltd.-IV (``DCL 
IV''), which owns an office building in California that is leased to an 
unrelated third party under an agreement dated November 10, 1982 and 
subject to a mortgage (the ``California Office Building Interest'').
     CLM's 49.9% interest in D.C.L. Leasing Partners Limited 
Partnership, Ltd.-VI (``DCL VI''), which owns an office building in 
Delaware that is leased to an unrelated third party under an agreement 
dated April 1, 1984 and subject to a mortgage (``Delaware Office 
Building Interest''). CLM XI, Inc. (``CLM XI'') and CLM Inc., VI (``CLM 
VI''), each a wholly owned subsidiary of CLM X, Inc. (``CLM X''), 
together own the Delaware Office Building Interest. CLM X is a wholly-
owned subsidiary of CLM.
     CLM's 14.95016611% interest--held by CLM VI through a 
grantor trust--in a waste-to-energy electric generating facility that 
is leased to an unrelated third party under an agreement dated July 21, 
1997 and subject to non-recourse lease debt (``Generation Facility 
Interest'').
     CLM's 50% interest--held by CLM Inc.--VII (``CLM VII'') 
and CLM Inc.--VIII (``CLM VIII''), each a wholly owned subsidiary of 
CLM, through a grantor trust--in 24 commercial real estate properties, 
each of which is leased to an unrelated third party under an agreement 
dated as of December 1, 1986 and subject to non-recourse lease debt 
(``Commercial Real Estate Interest'').
    The Railcars Interest, the Power Plant Interest, and the Generation 
Facility Interest are referred to as the ``Equipment Interests;'' the 
FEP Partnership Interest, the California Office Building Interest, the 
Delaware Office Building Interest, and the Commercial Real Estate 
Interest are referred to as the ``Non-Equipment Interests;'' the 
Equipment Interests and the Non-Equipment Interests are together 
referred to as the ``Lease Interests.''
    By order dated April 15, 2004, (HCAR No. 27835, ``Supplemental 
Order''), the Commission determined that certain nonutility interests 
and investments--referred to as the ``Non-Retainable Interests''--of 
CILCORP, including the Lease Interests described above, are not 
retainable by Ameren under the standards of section 11(b)(1) of the 
Act. The Supplemental Order requires that Ameren cause CIM or any 
subsidiary to sell or otherwise dispose of the Non-Retainable Interests 
not later than January 31, 2006. Ameren committed that, within 24 
months of receipt, it would either: (1) Expend the net proceeds from 
any sale or disposition of a Non-Retainable Interest to either retire 
or cancel securities representing indebtedness of the transferor or 
otherwise purchase property other than ``nonexempt property'' within 
the meaning of section 1083 of the Internal Revenue Code of 1986, as 
amended (``Code''); or (2) invest such amount as a contribution to the 
capital, or as paid-in surplus, of another direct or indirect 
subsidiary of Ameren in a manner that satisfies the non-recognition 
provisions of Code section 1081.
C. Summary of Relevant Provisions of the Code
    Code section 1081(b)(1) provides for the non-recognition of gain or 
loss from a sale or exchange of property made to comply with a 
Commission order. Code section 1082(a)(2) requires that any 
unrecognized gain under Code section 1081(b)(1) be applied to reduce 
the basis of the transferor's remaining assets in a specified manner.
    An exception from this non-recognition treatment exists under Code 
section 1081(b)(1) where certain ``nonexempt property'' is received by 
the transferor. If any ``nonexempt property'' is received,\1\ the gain 
must be recognized unless, within 24 months of the transfer, the 
``nonexempt property'' is expended for property other than ``nonexempt 
property'' or invested in accordance with Code section 1081(b)(2) and 
the Commission's order recites that

[[Page 54423]]

such expenditure or investment is necessary or appropriate to the 
integration or simplification of the transferor's holding company 
system. Code section 1081(b)(3) provides that an appropriate 
expenditure for property other than ``nonexempt property'' for purposes 
of Code section 1081(b)(2) includes each of: (1) A payment in complete 
or partial retirement or cancellation of securities representing 
indebtedness of the transferor; and (2) the amount of any liability of 
the transferor that is assumed (or to which transferred property is 
subject) in connection with any transfer of property in obedience to a 
Commission order.
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    \1\ Under section 1083(e) of the Code, ``nonexempt property'' is 
defined to include, among other things, cash indebtedness of the 
transferor that is cancelled or assumed by the purchaser in the 
exchange.
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    Code section 1081(d) provides for the non-recognition of gain or 
loss from certain inter-company transactions within the same system 
group if such transactions are effected to comply with a Commission 
order.
D. Sale of the Lease Interests
    CILCORP states that it intends to enter into one or more definitive 
agreements to sell all of the Lease Interests. The sale of the Lease 
Interests would result in a significant amount of gain for Federal 
income tax purposes. Ameren would structure the sale transaction(s) in 
a manner that would enable it to utilize the non-recognition provisions 
of Code section 1081, as contemplated by the Supplemental Order. To 
achieve this result, Ameren would cause CILCORP, CIM, and certain of 
its other direct and indirect subsidiaries (as described below) to 
engage in a series of essentially simultaneous inter-company 
transactions the purposes of which would be: (1) To transfer certain 
investments of CIM that are not among the Non-Retainable Interests (and 
are thus not part of the assets being sold) to other direct or indirect 
subsidiaries of Ameren; and (2) to structure the sale(s) of the Lease 
Interests to occur from a subsidiary or subsidiaries of Ameren with 
sufficient tax basis in similar classes of property to absorb the basis 
reductions required by Code section 1082(b).
    More specifically, to comply with the Supplemental Order, Ameren 
and its subsidiaries intend to engage in the following transactions 
(collectively, ``Proposed Transactions''):

    1. On or prior to the earliest closing date with respect to the 
sale(s) of any or all of the Lease Interests (``Closing Date''), 
Ameren Energy Resources Company (``Resources''), an intermediate 
subsidiary that is owned directly by Ameren, would contribute the 
stock of certain of its direct nonutility subsidiaries to Ameren 
Energy Development Company (``Development''),\2\ which is also a 
direct wholly-owned nonutility subsidiary of Resources.
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    \2\ Resources would contribute to Development the stock that it 
holds in Illinois Materials Supply Co., Ameren Energy Marketing 
Company, and Ameren Energy Fuels and Services Company, which are 
``energy-related companies'' under rule 58, and Electric Energy, 
Inc. and AmerenEnergy Medina Valley Cogen (No. 4), which are 
``exempt wholesale generators'' under section 32 of the Act. By 
order dated December 18, 2003 (HCAR No. 27777, ``December 2003 
Order''), the Commission authorized Ameren to reorganize its 
ownership interest in exempt and nonexempt nonutility subsidiaries 
under intermediate subsidiaries.
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    2. On or prior to the Closing Date: (a) CIM would distribute the 
stock of CIM Energy to CILCORP; (b) CIM would transfer its interests 
in the Housing Credit Partnerships to an affiliated entity by a 
combination of distributions and contributions; and (c) CIM Leasing 
would transfer its interest in SunAmerica 51 to an affiliated entity 
by a combination of distributions and contributions.
    3. On or prior to the Closing Date, CLM VI would distribute the 
Generation Facility Interest to CLM X, and CLM X would distribute 
the Generation Facility Interest to CLM. On or prior to the Closing 
Date, CLM would distribute the Power Plant Interest and the 
Generation Facility Interest to CIM, and CIM would contribute the 
Power Plant Interest and the Generation Facility Interest to CIM 
Leasing.
    4. On or prior to the Closing Date, CIM would transfer the stock 
of CIM Leasing to AERG in exchange for a promissory note (``AERG 
Note'') and possibly cash (together with the AERG Note, ``AERG 
Consideration'').
    5. On or prior to the Closing Date, CIM would distribute the 
AERG Consideration to CILCORP.
    6. On or prior to the Closing Date, CILCORP would transfer the 
stock of CIM to Resources in exchange for a promissory note 
(``Resources Note'') and possibly cash (together with the Resources 
Note, ``Resources Consideration'').
    7. On or prior to the Closing Date, Ameren would cause each of 
CIM Air, CLM, CIM Leasing, CLM IV, CLM VI, CLM VII, CLM VIII, CLM X, 
CLM XI, and CLM XII to convert into Delaware limited liability 
companies and would cause CIM to convert into an Illinois limited 
liability company.\3\
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    \3\ By the December 2003 Order, the Commission authorized Ameren 
to convert its nonutility subsidiaries from one business form to 
another.
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    8. On the closing date with respect to the applicable Lease 
Interests, AERG would sell the CIM Leasing membership interest and/
or any of the Equipment Interests to a buyer or buyers, in each case 
in exchange for cash, which would be treated for federal income tax 
purposes as a deemed sale of the Equipment Interests.
    9. On the closing date with respect to the applicable Lease 
Interests, Resources would sell the CIM membership interest and/or 
any of the Non-Equipment Interests to a buyer or buyers, in each 
case in exchange for cash, which would be treated for federal income 
tax purposes as a deemed sale of the Non-Equipment Interests.
    10. On the closing date with respect to the applicable Lease 
Interests, or within 24 months after that date, AERG would expend 
the cash received from the buyer(s) to reduce the AERG Note or would 
otherwise expend or invest such cash in accordance with Code section 
1081(b).
    11. On the closing date with respect to the applicable Lease 
Interests, or within 24 months after that date, Resources would 
expend the cash received from the buyer(s) to reduce the Resources 
Note.\4\

    \4\ Applicants expect that the AERG Note and the Resources Note 
would be retired on or shortly after the latest applicable closing 
date.
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    Applicants state that the Proposed Transactions are intended in 
part to allow Ameren to match the unrecognized gain from the sale of 
the Lease Interests under Code section 1081(b) to certain subsidiaries 
of Ameren that have a sufficiently high tax basis in other similar 
classes of property so that the unrecognized gain can be fully absorbed 
by the basis reductions required by Code section 1082(a)(2).\5\
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    \5\ Ameren has requested that the Internal Revenue Service issue 
a private letter ruling confirming the federal income tax 
consequences of the Proposed Transactions. Applicants state that it 
is possible that the Internal Revenue Service may require Ameren to 
modify the Proposed Transactions to obtain the private letter 
ruling. The Proposed Transactions would include any IRS-required 
modification, to the extent the modification allows Ameren to comply 
with the Supplemental Order and is otherwise acceptable to Ameren.
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II. Requests for Authority

    Applicants request that the Commission modify the Supplemental 
Order to eliminate the deadline (January 31, 2006) by which Ameren must 
complete the sale or other disposition of the Non-Retainable Interests.
    Applicants request authority for: (1) AERG to issue the AERG Note 
(in consideration for the stock of CIM Leasing); (2) CIM to acquire the 
AERG Note; and (3) AERG to acquire of the stock of CIM Leasing.
    In addition, in accordance with Code section 1081(f) and the 
Supplemental Order, Ameren requests that the Commission issue a further 
supplemental order in this proceeding confirming that: (1) The proposed 
disposition of the Lease Interests through the Proposed Transactions 
would be a disposition for cash or cash equivalents in compliance with 
the Supplemental Order; (2) the application of the net proceeds to 
retire all or part of the AERG Note and the Resources Note would be a 
complete or partial retirement of securities representing indebtedness 
of AERG and Resources; (3) the amount of liabilities assumed and the 
amount of liabilities to which transferred property is subject upon the 
disposition of the Lease Interests through the Proposed Transactions

[[Page 54424]]

would be an expenditure for property other than ``nonexempt property'' 
in compliance with the Supplemental Order; and (4) accordingly, each of 
the Proposed Transactions is necessary or appropriate to the 
integration or simplification of the Ameren holding company system and 
would effectuate the provisions of section 11(b)(1) of the Act, , and 
will be made in obedience to the supplemental order and the further 
supplemental order in this proceeding.

    For the Commission by the Division of Investment Management, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. E5-5013 Filed 9-13-05; 8:45 am]
BILLING CODE 8010-01-P