PUBLIC LAW 101-508 —NOV. 5, 1990 104 STAT. 1388-533 "(i) in the case of a liability arising out of a Federal or State law, the act (or failure to act) giving rise to such liability occurs at legist 3 years before the beginning of the taxable year, or "(ii) in the case of a liability arising out of a tort, such liability arises out of a series of actions (or failures to act) over an extended period of time a substantial portion of which occurs at least 3 years before the beginning of the taxable year. A liability shall not be taken into account under subparagraph (B) unless the taxpayer used an accrual method of accounting throughout the period or periods during which the acts or failures to act giving rise to such liability occurred. "(2) LIMITATION.—The amount of the specified liability loss for any taxable year shall not exceed the amount of the net operating loss for such taxable year. "(3) SPECIAL RULE FOR NUCLEAR POWERPLANTS. — Except as provided in regulations prescribed by the Secretary, that portion of a specified liability loss which is attributable to amounts incurred in the decommissioning of a nuclear powerplant (or any unit thereof) may, for purposes of subsection (b)(l)(C), be carried back to each of the taxable years during the period— "(A) beginning with the tsixable year in which such plant (or unit thereof) was placed in service, and "(B) ending with the taxable year preceding the loss year. "(4) PRODUCT LIABILITY.— The term 'product liability' means— "(A) liability of the taxpayer for damages on account of physical injury or emotional harm to individuals, or damage to or loss of the use of property, on account of any defect in any product which is manufactured, leased, or sold by the taxpayer, but only if "(B) such injury, harm, or damage arises after the taxpayer has completed or terminated operations with respect to, and has relinquished possession of, such product. "(5) COORDINATION WITH SUBSECTION (b)(2).— For purposes of applying subsection (b)(2), a specified liability loss for any taxable year shall be treated as a separate net operating loss for such taxable year to be taken into account after the remaining portion of the net operating loss for such taxable year. "(6) ELECTION.—Any taxpayer entitled to a 10-year carryback under subsection (b)(l)(C) from any loss year may elect to have the carryback period with respect to such loss year determined without regard to subsection (b)(l)(C). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for that taxable year." (B) The portion of any loss which is attributable to a deferred 26 USC 172 note, statutory or tort liability loss (as defined in section 172(k) of the Internal Revenue Code of 1986 as in effect on the day before the date of the enactment of this Act) may not be carried back to any taxable year beginning before January 1, 1984, by reason of the amendment made by subparagraph (A). (3) Paragraph (2) of section 172(g) (as redesignated by paragraph (1)) is amended to read as follows:
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