A bill to amend sections 46(f) and 167 (1) of the Internal Revenue Code of 1954 regarding the treatment of public utility property and to provide a transitional rule with respect thereto.

Summary

Amends the Internal Revenue Code with respect to the treatment of public utility property to prohibit any taxpaying utility from using the normalization method of accounting if, for rate-making purposes or for reflecting operating results in its regulated books of account, it employs any adjustment that is inconsistent with the existing requirements for users of such accounting method. States that an adjustment shall be considered inconsistent with such requirements: (1) if such adjustment is based on estimates or projections of the taxpayer's regulated tax expense, regulated depreciation expense, rate base used for ratemaking purposes, or its tax deferral reserve, that are not consistent with observed relationships among such items; or (2) if such adjustment otherwise is based on estimates or projections that do not employ consistent assumptions or bases for projection. Authorizes the Secretary of the Treasury to adopt rules defining other adjustments that are not consistent with such requirements. Revises the formula for determination of the allowability of an investment tax credit on certain depreciable public utility property. Declares that, in determining ratable restorations to base and ratable portions, the taxpayer's rate base, cost of service, or investment tax credit is subject to any adjustment that results, directly or indirectly, in the rate base's being restored less rapidly than ratably, or in the cost of service for ratemaking purposes being reduced by more than a ratable portion of such tax credit. States that an adjustment shall be considered inconsistent with this new requirement: (1) if such adjustment is based on estimates or projections of the amount by which the rate base is to be reduced, or of the amount of a ratable portion of which may be flowed through, that are not consistent with observed relationships between such amounts and the taxpayer's investment in certain depreciable property for which a credit may be taken; or (2) if such adjustment otherwise is based on estimates or projections that do not employ consistent assumptions or bases for projection. Authorizes the Secretary to adopt rules defining other adjustments that are not consistent with such requirements.

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Documents

4 official files

• Reported to Senate with amendment(s)

  summary · EN · 25 November 1980

  Open at official source

• Passed House amended

  summary · EN · 24 September 1980

  Open at official source

• Reported to House with amendment(s)

  summary · EN · 30 July 1980

  Open at official source

• Introduced in House

  summary · EN · 13 March 1980

  Open at official source

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