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petitioner “did not enter into any written supply contracts that
were binding on December 31, 1985.”
Pursuant to TRA section 204(a)(3), property qualifies for
relief from the ITC repeal only when it is “readily identifiable
with and necessary to carry out a written supply or service
contract, * * * which was binding on” December 31, 1985. See
also sec. 49(e)(1). Many courts have grappled with interpreting
this language and have looked to legislative history for
guidance. See United States v. Commonwealth Energy Sys., supra;
Bell Atl. Corp. v. United States, 224 F.3d 220 (3d Cir. 2000),
affg. 82 AFTR 2d 7375, 99-1 USTC par. 50,119 (E.D. Pa. 1998);
Maine Yankee Atomic Power Co. v. Commissioner, T.C. Memo. 2002-
176. As the Court of Appeals for the First Circuit explained:
“Still it is possible to think that there are ambiguities
inherent in the clause ‘readily identifiable with and necessary
to carry out,’ and that the level of specificity required as to
both ‘readily identifiable’ and ‘necessary’ is not self-
defining.” United States v. Commonwealth Energy Sys., supra at
16. The conference report explains:
This transitional rule is applicable only where
the specifications and amount of the property are
readily ascertainable from the terms of the contract,
or from related documents. A supply or service
contract or agreement to lease must satisfy the
requirements of a binding contract * * *.
H. Conf. Rept. 99-841 (Vol. II), at II-60 (1986), 1986-3 C.B.
(Vol. 4) 1, 60.
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