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Exhibit 8.1
MAY 9, 2001
RE: Issuance and Sale of Premium Equity Participating Security Units
PPL CORPORATION
TWO NORTH NINTH STREET
ALLENTOWN, PA 18101-1179
PPL CAPITAL FUNDING, INC.
TWO NORTH NINTH STREET
ALLENTOWN, PA 18101-1179
PPL CAPITAL FUNDING TRUST I
TWO NORTH NINTH STREET
ALLENTOWN, PA 18101-1179
Ladies and Gentlemen:
We have acted as tax counsel ("Tax Counsel") to PPL Corporation, a
Pennsylvania corporation (the "Company"), PPL Capital Funding, Inc., a Delaware
Corporation ("PPL Capital Funding") and PPL Capital Funding Trust I, a statutory
business trust created under the laws of the State of Delaware (the "Trust"), in
connection with the preparation and filing by the Company and the Trust with the
Securities and Exchange Commission (the "Commission") of the Prospectus
Supplement dated May 3, 2001 to the Prospectus dated February 9, 2001 (together,
the "Prospectus"), which formed a part of the Registration Statement on Form S-3
(as amended, the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to the issuance of 20,000,000 (plus an
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PPL CORPORATION
PPL CAPITAL FUNDING, INC.
PPL CAPITAL FUNDING TRUST I
-2- MAY 9, 2001
additional 3,000,000 if the over-allotment option is exercised in full by the
underwriters) 7 3/4% Premium Equity Participating Securities Units (the "PEPS
Units"), each of which will initially consist of (i) a purchase contract under
which the holder agrees to purchase, for $25, shares of common stock of the
Company on May 18, 2004 (a "Purchase Contract") and (ii) a trust preferred
security of the Trust, with a stated liquidation amount of $25 (a "Trust
Preferred Security") .
The Trust Preferred Securities represent undivided beneficial interests in the
assets of the Trust. The Trust's assets will consist of up to $515,463,918
(plus an additional $77,319,588 if the over-allotment option is exercised in
full by the underwriters) aggregate principal amount of Subordinated Notes due
May 18, 2006 (the "Subordinated Notes") to be issued by PPL Capital Funding.
All capitalized terms used in this opinion letter and not otherwise defined
herein shall have the meaning ascribed to such terms in the Registration
Statement.
In delivering this opinion letter, we have reviewed and relied upon: (i) the
Registration Statement; (ii) a form of the Subordinated Indenture; (iii) a form
of the Supplemental Indenture; (iv) a form of the Subordinated Note; (v) a form
of the Trust Agreement; (vi) a form of the Guarantee; (vii) forms of the Trust
Securities; (viii) a form of the Purchase Contract Agreement; (ix) a form of
the Remarketing Agreement; (x) a form of the Pledge Agreement; (xi) a form of
the Underwriting Agreement; (xii) a form of the Global PEPS Units Certificates;
and (xiii) a form of the Global Treasury Units Certificates. We also have
examined and relied upon originals, or duplicates or certified or conformed
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PPL CORPORATION
PPL CAPITAL FUNDING, INC.
PPL CAPITAL FUNDING TRUST I
-3- MAY 9, 2001
copies, of such records of the Company, PPL Capital Funding and the Trust and
such other documents, certificates, representations and records as we have
deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination of such material, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us as originals
and the conformity to original documents of all copies of documents submitted to
us. In addition, we also have assumed that factual representations made to us
are true, correct and complete and that the transactions related to the issuance
of the PEPS Units, the Trust Securities, and the Subordinated Notes will be
consummated in accordance with the terms of the documents and forms of documents
described herein. If any of the above described assumptions are untrue for any
reason or if the issuance of the PEPS Units, the Trust Securities and the
Subordinated Notes is consummated in a manner that is inconsistent with the
manner in which it is described in the Prospectus, our opinions as expressed
below may be adversely affected and may not be relied upon.
On the basis of the foregoing and assuming that the Trust was formed and
will be maintained in compliance with the terms of the Trust Agreement, we are
of the opinion that under current United States federal income tax law:
(1) The Trust will be classified as a grantor trust for United
States federal income tax purposes and not as an association
taxable as a corporation.
(2) The Subordinated Notes will be classified as indebtedness for
United States federal income tax purposes.
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PPL CORPORATION
PPL CAPITAL FUNDING, INC.
PPL CAPITAL FUNDING TRUST I
-4- MAY 9, 2001
We express no opinion with respect to the transactions referred to
herein or in the Prospectus other than as expressly set forth herein. Moreover,
we note that there is no authority directly on point dealing with securities
such as the PEPS Units, Trust Securities or transactions of the type described
herein and that our opinion is not binding on the Internal Revenue Service or
the courts, either of which could take a contrary position. Nevertheless, we
believe that the opinions expressed in the Prospectus, if challenged, would be
sustained by a court with jurisdiction in a properly presented case.
Our opinions are based upon the Internal Revenue Code of 1986, as
amended, the Treasury regulations promulgated thereunder and other relevant
authorities and law, all as in effect on the date hereof. Consequently, future
changes in the law may cause the tax treatment of the transactions referred to
herein to be materially different from that described above. We disclaim any
undertaking to advise you of any subsequent changes of the matters stated,
represented or assumed herein or any subsequent changes in applicable law,
regulations or interpretations thereof.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the federal law of the
United States.
We consent to the filing of this opinion as an exhibit to the Form 8-K
to be filed with the Securities and Exchange Commission and to the use of our
name in the Registration Statement under the caption "United States Federal
Income Tax Consequences" and "Validity of the Securities".
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PPL CORPORATION
PPL CAPITAL FUNDING, INC.
PPL CAPITAL FUNDING TRUST I
-5- MAY 9, 2001
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT