§45J — Title 26 Internal Revenue Code | U.S. Code

Summary

Taxpayers can get a production tax credit of 1.8 cents for each kilowatt-hour of electricity made at an eligible advanced nuclear power plant during the first 8 years after the plant starts service, only for electricity sold to an unrelated buyer. The credit for any plant is limited by how much of the national megawatt capacity the plant is given. The total national capacity for these credits is capped at 6,000 megawatts and the Treasury Secretary will decide how to divide that capacity and set up a certification process after consulting the Secretary of Energy. The credit a plant can actually use is also capped so it cannot exceed a share of $125,000,000 based on how many megawatts were allocated to it out of 1,000. If a market “reference price” for electricity is higher than 8 cents (adjusted for inflation and rounded to the nearest 0.1 cent), the credit is cut back in proportion to how much that price exceeds 8 cents, measured against 3 cents. Any unused national capacity left after December 31, 2020 must be reallocated quickly by the Secretary, first to plants in service on or before that date that did not get full allocations, then to later plants in the order they go into service; these reallocations count the same as original allocations. Defined terms (one line each): “advanced nuclear power facility” — a nuclear electricity plant owned by the taxpayer and placed in service after this law was passed but before January 1, 2021. “Advanced nuclear facility” — a plant whose reactor design was approved after December 31, 1993 and that was not approved in the same form before that date. Certain public entities (federal, state, or local government bodies; some mutual or cooperative electric companies; and certain rural not-for-profit utilities) may elect to let eligible project partners (designers, builders, nuclear system or fuel providers, lenders, or owners) claim the credit instead, with rules for partnerships and timing spelled out. Some rules like paragraphs (1), (3), (4), and (5) of section 45(e) also apply here.

Title 26, §45J

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of section 38, the advanced nuclear power facility production credit of any taxpayer for any taxable year is equal to the product of—

(1)1.8 cents, multiplied by

(2)the kilowatt hours of electricity—

(A)produced by the taxpayer at an advanced nuclear power facility during the 8-year period beginning on the date the facility was originally placed in service, and

(B)sold by the taxpayer to an unrelated person during the taxable year.

(b)(1)The amount of credit which would (but for this subsection and subsection (c)) be allowed with respect to any facility for any taxable year shall not exceed the amount which bears the same ratio to such amount of credit as—

(A)the national megawatt capacity limitation allocated to the facility, bears to

(B)the total megawatt nameplate capacity of such facility.

(2)The aggregate amount of national megawatt capacity limitation allocated by the Secretary under paragraph (3) shall not exceed 6,000 megawatts.

(3)The Secretary shall allocate the national megawatt capacity limitation in such manner as the Secretary may prescribe.

(4)Not later than 6 months after the date of the enactment of or any amendment to this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection. Such regulations shall provide a certification process under which the Secretary, after consultation with the Secretary of Energy, shall approve and allocate the national megawatt capacity limitation.

(5)(A)Any unutilized national megawatt capacity limitation shall be allocated by the Secretary under paragraph (3) as rapidly as is practicable after December 31, 2020—

(i)first to facilities placed in service on or before such date to the extent that such facilities did not receive an allocation equal to their full nameplate capacity, and

(ii)then to facilities placed in service after such date in the order in which such facilities are placed in service.

(B)The term “unutilized national megawatt capacity limitation” means the excess (if any) of—

(i)6,000 megawatts, over

(ii)the aggregate amount of national megawatt capacity limitation allocated by the Secretary before January 1, 2021, reduced by any amount of such limitation which was allocated to a facility which was not placed in service before such date.

(C)In the case of any unutilized national megawatt capacity limitation allocated by the Secretary pursuant to this paragraph—

(i)such allocation shall be treated for purposes of this section in the same manner as an allocation of national megawatt capacity limitation, and

(ii)subsection (d)(1)(B) shall not apply to any facility which receives such allocation.

(c)(1)The amount of the credit allowable under subsection (a) (after the application of subsection (b)) for any taxable year with respect to any facility shall not exceed an amount which bears the same ratio to $125,000,000 as—

(A)the national megawatt capacity limitation allocated under subsection (b) to the facility, bears to

(B)1,000.

(2)(A)The amount of the credit determined under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as—

(i)the amount by which the reference price (as defined in section 45(e)(2)(C)) for the calendar year in which the sale occurs exceeds 8 cents, bears to

(ii)3 cents.

(B)The 8 cent amount in subparagraph (A) shall be adjusted by multiplying such amount by the inflation adjustment factor (as defined in section 45(e)(2)(B)) for the calendar year in which the sale occurs. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.

(d)For purposes of this section—

(1)The term “advanced nuclear power facility” means any advanced nuclear facility—

(A)which is owned by the taxpayer and which uses nuclear energy to produce electricity, and

(B)which is placed in service after the date of the enactment of this paragraph and before January 1, 2021.

(2)For purposes of paragraph (1), the term “advanced nuclear facility” means any nuclear facility the reactor design for which is approved after December 31, 1993, by the Nuclear Regulatory Commission (and such design or a substantially similar design of comparable capacity was not approved on or before such date).

(e)(1)If, with respect to a credit under subsection (a) for any taxable year—

(A)a qualified public entity would be the taxpayer (but for this paragraph), and

(B)such entity elects the application of this paragraph for such taxable year with respect to all (or any portion specified in such election) of such credit,

(2)For purposes of this subsection—

(A)The term “qualified public entity” means—

(i)a Federal, State, or local government entity, or any political subdivision, agency, or instrumentality thereof,

(ii)a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2), or

(iii)a not-for-profit electric utility which had or has received a loan or loan guarantee under the Rural Electrification Act of 1936.

(B)The term “eligible project partner” means any person who—

(i)is responsible for, or participates in, the design or construction of the advanced nuclear power facility to which the credit under subsection (a) relates,

(ii)participates in the provision of the nuclear steam supply system to such facility,

(iii)participates in the provision of nuclear fuel to such facility,

(iv)is a financial institution providing financing for the construction or operation of such facility, or

(v)has an ownership interest in such facility.

(3)(A)In the case of a credit under subsection (a) which is determined at the partnership level—

(i)for purposes of paragraph (1)(A), a qualified public entity shall be treated as the taxpayer with respect to such entity’s distributive share of such credit, and

(ii)the term “eligible project partner” shall include any partner of the partnership.

(B)In the case of any credit (or portion thereof) with respect to which an election is made under paragraph (1), such credit shall be taken into account in the first taxable year of the eligible project partner ending with, or after, the qualified public entity’s taxable year with respect to which the credit was determined.

(C)For purposes of section 141(b)(1), any benefit derived by an eligible project partner in connection with an election under this subsection shall not be taken into account as a private business use.

(f)Rules similar to the rules of paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for purposes of this section.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The date of the enactment of this section and the date of the enactment of this paragraph, referred to in subsecs. (b)(4) and (d)(1)(B), are the date of enactment of Pub. L. 109–58, which was approved Aug. 8, 2005. The Rural Electrification Act of 1936, referred to in subsec. (e)(2)(A)(iii), is act May 20, 1936, ch. 432, 49 Stat. 1363, which is classified generally to chapter 31 (§ 901 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 901 of Title 7 and Tables.

Amendments

2018—Subsec. (b)(4). Pub. L. 115–123, § 40501(a)(1), inserted “or any amendment to” after “enactment of”. Subsec. (b)(5). Pub. L. 115–123, § 40501(a)(2), added par. (5). Subsecs. (e), (f). Pub. L. 115–123, § 40501(b)(1), added subsec. (e) and redesignated former subsec. (e) as (f). 2007—Subsec. (b)(2). Pub. L. 110–172 reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “The national megawatt capacity limitation shall be 6,000 megawatts.” 2005—Subsec. (c)(2). Pub. L. 109–135, § 402(d)(1), amended heading and text of par. (2) generally. Prior to amendment, text read as follows: “Rules similar to the rules of section 45(b)(1) shall apply for purposes of this section.” Subsec. (e). Pub. L. 109–135, § 402(d)(2), struck out “(2),” after “(1),”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2018 Amendment Pub. L. 115–123, div. D, title I, § 40501(c), Feb. 9, 2018, 132 Stat. 154, provided that: “(1) Treatment of unutilized limitation amounts.—The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [Feb. 9, 2018]. “(2) Transfer of credit by certain public entities.—The

Amendments

made by subsection (b) [amending this section and section 501 of this title] shall apply to taxable years beginning after the date of the enactment of this Act.”

Effective Date

of 2007 AmendmentAmendment by Pub. L. 110–172 effective as if included in the provisions of the Energy Policy Act of 2005, Pub. L. 109–58, to which such amendment relates, see section 6(e) of Pub. L. 110–172, set out as a note under section 30C of this title.

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–135 effective as if included in the provision of the Energy Policy Act of 2005, Pub. L. 109–58, to which such amendment relates, see section 402(m)(1) of Pub. L. 109–135, set out as a note under section 23 of this title.

Effective Date

Section applicable to production in taxable years beginning after Aug. 8, 2005, see section 1306(d) of Pub. L. 109–58, set out as an

Effective Date

of 2005 Amendment note under section 38 of this title.

§45J Credit for Production From Advanced Nuclear Power Facilities

Summary

Title 26, §45J

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Effective Date

Effective Date

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Effective Date

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