SECTION 3. COMPUTATION OF

CREDIT

Under § 45J(b)(1) and (c), the credit allowed for a taxable year with respect to the qualified electricity produced at an advanced nuclear power facility is computed under the following rules:

(1) A tentative credit for the taxable year is computed for the facility. The facility’s tentative credit for the taxable year is equal to 1.8 cents multiplied by the kilowatt hours of qualified electricity produced at the facility and sold during the taxable year to an unrelated person.

(2) The credit percentage is computed for each taxpayer that has been allocated all or part of the facility limitation. Each taxpayer’s credit percentage is determined by dividing the facility limitation that is allocated to the taxpayer under Section 4.04(3), (4), or (5) of this Notice by the nameplate capacity of the facility.

(3) The credit allowed to a taxpayer is the lesser of (a) the tentative credit for the facility multiplied by the taxpayer’s credit

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amount of national megawatt capacity limitation equal to its nameplate capacity.

(2) If the total nameplate capacity of all qualifying facilities for which applications are submitted exceeds the national megawatt capacity limitation, the national megawatt capacity limitation will be allocated among the facilities in proportion to their nameplate capacities.

(3) If only one taxpayer owns a direct interest in a facility, the entire facility limitation is allocated to such taxpayer. If more than one taxpayer owns a direct interest in a facility, each taxpayer’s undivided ownership share in the facility will be treated for purposes of this Notice as a separate facility owned by such taxpayer. In such cases, a taxpayer’s application must identify the portion of the total nameplate capacity of the facility that is equal to its undivided ownership share in the facility.

(4) Except as provided in Section 4.04(5) of this Notice, if a facility is owned by a partnership or S corporation, then the partnership or S corporation, and not the partners or shareholders, will be treated as the taxpayer that owns the facility for the purposes of this Notice. In such cases, the § 45J credit must be allocated to the partners or shareholders in accordance with either § 1.704–1(b)(4)(ii), in the case of partnerships, or § 1.1366–1(a)(2)(v), in the case of S corporations.

(5) If a facility is owned through an organization that has made a valid § 761(a) election, each member’s undivided ownership share in the facility will be treated for purposes of this Notice as a separate facility owned by such member. In such cases, a member’s application must identify the portion of the total nameplate capacity of the facility that is equal to its undivided ownership share in the facility.

.05 Service Action . Upon receipt of the taxpayer’s application, the Service will determine whether the application satisfies the provisions of Section 5 of this Notice. If the application does not satisfy that Section, the Service may advise the applicant regarding how to perfect the application and may request additional information necessary to complete the application. Once an application satisfies Section 5 of this Notice, the Service will forward the application to the DOE for the certification described in

Section 4.02(2) of this Notice. Upon receipt of a certification by the DOE that the facility qualifies as an advanced nuclear facility, the Service will accept or reject the taxpayer’s application and will notify the taxpayer, by letter, of its decision. If the taxpayer’s application is accepted, the acceptance letter will state the facility limitation and the amount of the facility limitation allocated to the taxpayer.