PRIA, Government Policy, Made Personal

Summary

Pays a tax credit of 1.8 cents for every kilowatt-hour of electricity a company makes at an eligible advanced nuclear power plant during the first 8 years after the plant first starts operating, as long as the power is sold to someone not related to the seller. The credit for any one plant is limited by a national cap of 6,000 megawatts that the Treasury Secretary must allocate. The yearly credit for a plant also can’t exceed a share of $125,000,000 based on that plant’s allocated megawatts out of 1,000. The credit is cut back if the reference market price (defined elsewhere in the tax code) for the year is more than 8 cents per kWh; the cutback scales up to when that price is 11 cents, and the 8-cent threshold is adjusted for inflation and rounded to 0.1 cent. The Secretary must write rules, including a certification process, within 6 months after this law or any change to it. Any unused portion of the 6,000 megawatt cap after December 31, 2020 must be reallocated quickly first to plants placed in service on or before that date that didn’t get full allocations, then to later plants in the order they come in. One-line definitions: Advanced nuclear power facility — a plant owned by the taxpayer that uses nuclear power and was placed in service after the law took effect and before January 1, 2021. Advanced nuclear facility — a reactor design approved after December 31, 1993. Qualified public entity — a federal, state, or local government unit, certain co-ops, or certain nonprofit rural utilities. Eligible project partner — a designer, builder, supplier, financier, or owner that worked on the plant. Qualified public entities may elect to let an eligible project partner claim the credit instead, with special partnership and timing rules that follow the tax code. Some other technical rules like those in section 45(e) also apply.

Title 26, §45J

Internal Revenue Code, Source: USLM XML via OLRC

(a)General rule

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)

(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)National limitation

(1)In general

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)Amount of national limitation

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

(3)Allocation of limitation

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

(4)Regulations

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)Allocation of unutilized limitation

(A)In general

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)Unutilized national megawatt capacity limitation

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

(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)Coordination with other provisions

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

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

(c)Other limitations

(1)Annual limitation

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)Phaseout of credit

(A)In general

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)Phaseout adjustment based on inflation

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)Advanced nuclear power facility

For purposes of this section

(1) In general

(2)Advanced nuclear facility

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)Transfer of credit by certain public entities

(1)In general

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,

the eligible project partner specified in such election, and not the qualified public entity, shall be treated as the taxpayer for purposes of this title with respect to such credit (or such portion thereof).

(2)Definitions

For purposes of this subsection

(A) Qualified public entity

(B)Eligible project partner

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)Special rules

(A)Application to partnerships

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)Taxable year in which credit taken into account

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)Treatment of transfer under private use rules

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)Other rules to apply

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

Effective Date

Effective Date

Citations & Metadata