Exhibit D
AMEREN CORPORATION
AND ITS AFFILIATED CORPORATIONS
TAX ALLOCATION AGREEMENT
This agreement is made as of ______________, 19__ by and among Ameren
Corporation, a registered public utility holding and its affiliated
corporations, as identified in Exhibit A hereto (collectively, the "Group";
individually, "member of the Group").
WHEREAS, the members of the Group are affiliated corporations within the
meaning of section 1504 of the Internal Revenue Code of 1986, as amended, and
will join in the annual filing of a consolidated federal income tax return;
WHEREAS, the members of the Group intend to allocate the consolidated
income tax liabilities and benefits to each member of the Group in a fair and
equitable manner; and
WHEREAS, the members of the Group intend to allocate the liabilities and
benefits arising from the Group's annual consolidated income tax returns in
compliance with Title 17, section 250.45(c) of the Code of Federal Regulations,
section 1552(a)(1) of the Internal Revenue Code and Title 26, section
1.1502-33(d)(2) of the Code of Federal Regulations;
IT IS THEREFORE AGREED, as follows:
Section 1. Definitions
For purposes of this agreement, the following definitions shall apply:
(a) "Consolidated tax" shall mean the Group's aggregate tax liability
for a taxable year as shown on the consolidated federal income
tax return.
(b) "Consolidated refund" shall mean the Group's refund for a taxable
year as shown on the consolidated federal income tax return.
(c) "Corporate taxable income" or "corporate taxable loss" shall mean
the income or loss of a member of the Group for a taxable year,
computed as though the member had filed a separate federal income
tax return on the same basis as used in the consolidated return,
except that:
(1) Dividend income from other members of the Group shall be
disregarded, and
(2) Intercompany transactions that are eliminated in the
consolidated return shall be given appropriate treatment.
(d) "Separate return tax" shall mean the federal income tax liability
or federal income tax refund, computed with respect to the
corporate taxable income or loss of a member of the Group as
though the member were not a member of the Group. If the separate
return tax is a liability, it shall be referred to as a "positive
separate return tax." If the separate return tax is a refund, it
shall be referred to as a "negative separate return tax."
(e) A "positive" allocation shall be the obligation to make a payment
to the Group. A "negative" allocation shall be the right to
receive a payment from the Group.
Section 2. General Allocation Method
Each taxable year, the members of the Group shall allocate the consolidated
tax or consolidated refund in accordance with the following procedures:
(a) A member, to include Ameren Corporation, that would have a
positive separate return tax shall receive a positive allocation
in an amount equal to such positive separate return tax.
(b) A member, other than Ameren Corporation, that would have a
negative separate return tax shall receive a negative allocation
in an amount equal to such negative separate return tax.
(c) If Ameren Corporation would have a negative separate return tax,
then each member having positive separate return tax shall
receive a negative allocation in an amount equal to such negative
separate return tax multiplied by the member's share of the sum
of the positive separate return tax.
Section 3. Special Allocation Rules
(a) Alternative Minimum Tax. In any year in which alternative minimum
tax (AMT) is payable by the Group, the consolidated tax shall be
separated into two parts: regular tax and AMT.
(1) Regular tax shall be allocated in accordance with the
general allocation method set forth in section 2, above.
(2) AMT will be allocated to each member of the Group based on
the proportion of:
(A) the excess of its separate company tentative minimum tax
over its separate company regular tax liability, to
(B) the aggregate of the excesses of such companies'
tentative minimum tax amounts over their regular tax
liability amounts.
(3) Each member whose regular tax liability exceeds its
tentative minimum tax on a separate company basis shall be
excluded from this calculation and shall not be impacted by
the Group's AMT liability.
(4) The minimum tax credit shall be allocated to the members of
the Group to which the associated AMT was allocated, in
proportion to the associated AMT allocated to such members.
(b) Investment Tax Credits; Other Tax Benefits and Material Items
Taxed at Different Rates. Any investment tax credits, other tax
benefits and material items taxed at rates other than the rate
applicable to corporate taxable income shall be allocated
directly to the members of the Group giving rise to them.
Section 4. Maximum Allocation
The tax apportioned to any member shall not exceed the separate return tax
of such member.
Section 5. Payments
Each member of the Group is responsible for its own tax liability. Payment
of such liability shall be made in accordance with the following procedure:
(a) A member of the Group with a net positive allocation shall pay
Ameren Corporation the net amount allocated.
(b) A member of the Group with a net negative allocation shall
receive payment from Ameren Corporation in the amount of the net
negative allocation.
(c) Ameren Corporation shall pay to the Internal Revenue Service the
Group's net current federal income tax liability from the net of
the receipts and payments to and from members of the Group.
(d) Ameren Corporation shall make any calculations on behalf of the
members of the Group necessary to comply with the estimated tax
provisions of IRC section 6655. Based on such calculations,
Ameren Corporation shall charge the members appropriate amounts
at intervals consistent with the dates in that section.
(e) If the Group has a consolidated net operating loss ("NOL") for a
taxable year (the "loss year") and the NOL cannot be used in full
by being carried back to a prior taxable year, the unused portion
of the NOL shall be allocated (as negative allocations) to the
members of the Group having negative allocations for the loss
year in proportion to the relative magnitude of such negative
allocations for the loss year. Each such member shall carry
negative allocation from the loss year forward to the following
taxable year and combine it with its allocation for such
following taxable year.
(f) A member shall make any payment required by this section within
60 days after receiving notice of such payment from Ameren
Corporation. Alternatively, in the case of any second tier
subsidiary (any company that is wholly-owned by Union Electric
Company, Central Illinois Public Service Company, or CIPSCO
Investment Company), the parent of such second-tier subsidiary
may make the payment required by the preceding sentence for
itself and all of its second-tier subsidiaries within the 60-day
period, with the second-tier subsidiaries to compensate such
parent within a reasonable time thereafter.
Section 6. Adjustments to Tax Liability Shown on Returns
(a) In the event that the consolidated tax or consolidated refund is
subsequently adjusted by the Internal Revenue Service or by a
court decision, the consolidated tax, consolidated refund and
separate return tax shall be adjusted accordingly consistent with
the methodology set forth previously in this agreement. Any prior
payments among the members of the Group shall be adjusted to
conform to the change.
(b) If any interest is paid or received as a result of an adjustment
to consolidated tax or consolidated refund, it will be allocated
to the parties in the proportion that each member's change in
separate tax in each affected year bears to the change in
consolidated tax or consolidated refund.
(c) Any penalty shall be paid by the member of the Group that is
responsible for the penalty. If the party at fault cannot be
determined, the penalty shall be allocated in the same manner as
if it were additional tax.
Section 7. State Income Taxes
(a) Any state income tax liability (including liability for interest
or penalties) associated with the filing of a separate state
income tax return by a member of the Group shall be allocated to
and paid directly by such member.
(b) Any state income tax liability (including liability for interest
or penalties) associated with the filing of a unitary or combined
state return shall be allocated to the members of the Group
participating in the returns following the procedures set forth
above for federal income tax liabilities. Because certain states
utilize a unitary method, the Group's aggregate income tax
liability to a state may exceed the sum of the members' separate
return income tax liabilities to the state. If this occurs, the
excess of the Groups aggregate liability to such state over the
sum of the members' separate return liabilities for such state
shall be allocated to the member or members whose operations
caused the Group to be taxed by the state, following the
procedures set forth above for federal income tax liabilities.
Conversely, the sum of the members' separate return liabilities
may exceed the Group's aggregate liability to a state. If this
occurs, the excess of the sum of the members' separate return
liabilities for such state over the Group's aggregate liability
to such state shall be allocated to the member or members whose
operations caused the excess, following the procedures set forth
above for federal income tax liabilities.
Section 8. New Affiliates
The members of the Group will cause any corporation which becomes an
affiliated corporation within the meaning of IRC section 1504 to join in this
agreement.
Section 9. Amendment
This agreement may be amended from time to time as the result of changes in
federal or state law or relevant facts and circumstances.
Section 10. Cooperation of Members
Each member shall execute and file such consent, elections and other
documents that may be required or appropriate for the proper filing of
consolidated income tax returns and for the allocations provided by this
consent.
* * * * * * * *
The above procedures for allocating the consolidated income tax liability
of the Group have been agreed to by each of the below listed members of the
Group, as evidenced by the signature of an officer of each member.
Ameren Corporation by: ________________________________
Ameren Services Company by: ________________________________
Union Electric Company by: ________________________________
Union Electric Development
Corporation by: ________________________________
Central Illinois Public Service
Company by: ________________________________
CIPSCO Investment Company by: ________________________________
Ameren Energy, Inc. by: ________________________________
CIPS Energy Inc. by: ________________________________
Illinois Steam, Inc. by: ________________________________
Ameren Development Company by: ________________________________
Ameren ERC, Inc. by: ________________________________
Ameren Energy Communications,
Inc. by: ________________________________
EXHIBIT A
Ameren Corporation
Ameren Services Company
Union Electric Company
Union Electric Development Corporation
Central Illinois Public Service Company
CIPSCO Investment Company
Ameren Energy, Inc.
CIPS Energy Inc.
Illinois Steam, Inc.
Ameren Development Company
Ameren ERC, Inc.
Ameren Energy Communications, Inc.
