Internal Revenue Code:Sec. 48A. Qualifying advanced coal project credit
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Contents |
Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter A - Determination of Tax Liability
PART IV - CREDITS AGAINST TAX
Subpart E - Rules for Computing Investment Credit
Statute
Sec. 48A. Qualifying advanced coal project credit.
(a) In General- For purposes of section 46, the qualifying advanced
coal project credit for any taxable year is an amount equal to--
(1) 20 percent of the qualified investment for such taxable year
in the case of projects described in subsection (d)(3)(B)(i), and
(2) 15 percent of the qualified investment for such taxable year
in the case of projects described in subsection (d)(3)(B)(ii).
(b) Qualified Investment-
(1) IN GENERAL- For purposes of subsection (a), the qualified
investment for any taxable year is the basis of eligible
property placed in service by the taxpayer during such taxable
year which is part of a qualifying advanced coal project--
(A)(i) the construction, reconstruction, or erection of which
is completed by the taxpayer, or
(ii) which is acquired by the taxpayer if the original use
of such property commences with the taxpayer, and
(B) with respect to which depreciation (or amortization in lieu
of depreciation) is allowable.
(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED PROPERTY- Rules similar
to section 48(a)(4) shall apply for purposes of this section.
(3) CERTAIN QUALIFIED PROGRESS EXPENDITURES RULES MADE APPLICABLE-
Rules similar to the rules of subsections (c)(4) and (d) of
section 46 (as in effect on the day before the enactment of the
Revenue Reconciliation Act of 1990) shall apply for purposes of
this section.
(c) Definitions- For purposes of this section--
(1) QUALIFYING ADVANCED COAL PROJECT- The term `qualifying
advanced coal project' means a project which meets the
requirements of subsection (e).
(2) ADVANCED COAL-BASED GENERATION TECHNOLOGY- The term `advanced
coal-based generation technology' means a technology which meets
the requirements of subsection (f).
(3) ELIGIBLE PROPERTY- The term `eligible property' means--
(A) in the case of any qualifying advanced coal project using
an integrated gasification combined cycle, any property which
is a part of such project and is necessary for the
gasification of coal, including any coal handling and gas
separation equipment, and
(B) in the case of any other qualifying advanced coal project,
any property which is a part of such project.
(4) COAL- The term `coal' means anthracite, bituminous coal,
subbituminous coal, lignite, and peat.
(5) GREENHOUSE GAS CAPTURE CAPABILITY- The term `greenhouse gas
capture capability' means an integrated gasification combined
cycle technology facility capable of adding components which can
capture, separate on a long-term basis, isolate, remove, and
sequester greenhouse gases which result from the generation of
electricity.
(6) ELECTRIC GENERATION UNIT- The term `electric generation unit'
means any facility at least 50 percent of the total annual net
output of which is electrical power, including an otherwise
eligible facility which is used in an industrial application.
(7) INTEGRATED GASIFICATION COMBINED CYCLE- The term `integrated
gasification combined cycle' means an electric generation unit
which produces electricity by converting coal to synthesis gas
which is used to fuel a combined-cycle plant which produces
electricity from both a combustion turbine (including a
combustion turbine/fuel cell hybrid) and a steam turbine.
(d) Qualifying Advanced Coal Project Program-
(1) ESTABLISHMENT- Not later than 180 days after the date of
enactment of this section, the Secretary, in consultation with
the Secretary of Energy, shall establish a qualifying advanced
coal project program for the deployment of advanced coal-based
generation technologies.
(2) CERTIFICATION-
(A) APPLICATION PERIOD- Each applicant for certification under
this paragraph shall submit an application meeting the
requirements of subparagraph (B). An applicant may only submit
an application during the 3-year period beginning on the date
the Secretary establishes the program under paragraph (1).
(B) REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATION- An
application under subparagraph (A) shall contain such
information as the Secretary may require in order to make a
determination to accept or reject an application for
certification as meeting the requirements under
subsection (e)(1). Any information contained in the
application shall be protected as provided in
section 552(b)(4) of title 5, United States Code.
(C) TIME TO ACT UPON APPLICATIONS FOR CERTIFICATION- The
Secretary shall issue a determination as to whether an
applicant has met the requirements under subsection (e)(1)
within 60 days following the date of submittal of the
application for certification.
(D) TIME TO MEET CRITERIA FOR CERTIFICATION- Each applicant for
certification shall have 2 years from the date of acceptance
by the Secretary of the application during which to provide to
the Secretary evidence that the criteria set forth in
subsection (e)(2) have been met.
(E) PERIOD OF ISSUANCE- An applicant which receives a
certification shall have 5 years from the date of issuance of
the certification in order to place the project in service and
if such project is not placed in service by that time period
then the certification shall no longer be valid.
(3) AGGREGATE CREDITS-
(A) IN GENERAL- The aggregate credits allowed under
subsection (a) for projects certified by the Secretary under
paragraph (2) may not exceed $1,300,000,000.
(B) PARTICULAR PROJECTS- Of the dollar amount in
subparagraph (A), the Secretary is authorized to certify--
(i) $800,000,000 for integrated gasification combined cycle
projects, and
(ii) $500,000,000 for projects which use other advanced coal-
based generation technologies.
(4) REVIEW AND REDISTRIBUTION-
(A) REVIEW- Not later than 6 years after the date of enactment
of this section, the Secretary shall review the credits
allocated under this section as of the date which is 6 years
after the date of enactment of this section.
(B) REDISTRIBUTION- The Secretary may reallocate credits
available under clauses (i) and (ii) of paragraph (3)(B) if
the Secretary determines that--
(i) there is an insufficient quantity of qualifying
applications for certification pending at the time of the
review, or
(ii) any certification made pursuant to subsection
paragraph (2) has been revoked pursuant to subsection
paragraph (2)(D) because the project subject to the
certification has been delayed as a result of third party
opposition or litigation to the proposed project.
(C) REALLOCATION- If the Secretary determines that credits
under clause (i) or (ii) of paragraph (3)(B) are available
for reallocation pursuant to the requirements set forth in
paragraph (2), the Secretary is authorized to conduct an
additional program for applications for certification.
(e) Qualifying Advanced Coal Projects-
(1) REQUIREMENTS- For purposes of subsection (c)(1), a project
shall be considered a qualifying advanced coal project that the
Secretary may certify under subsection (d)(2) if the Secretary
determines that, at a minimum--
(A) the project uses an advanced coal-based generation
technology--
(i) to power a new electric generation unit; or
(ii) to retrofit or repower an existing electric generation
unit (including an existing natural gas-fired combined
cycle unit);
(B) the fuel input for the project, when completed, is at least
75 percent coal;
(C) the project, consisting of one or more electric generation
units at one site, will have a total nameplate generating
capacity of at least 400 megawatts;
(D) the applicant provides evidence that a majority of the
output of the project is reasonably expected to be acquired
or utilized;
(E) the applicant provides evidence of ownership or control of
a site of sufficient size to allow the proposed project to be
constructed and to operate on a long-term basis; and
(F) the project will be located in the United States.
(2) REQUIREMENTS FOR CERTIFICATION- For the purpose of
subsection (d)(2)(D), a project shall be eligible for
certification only if the Secretary determines that--
(A) the applicant for certification has received all Federal
and State environmental authorizations or reviews necessary
to commence construction of the project; and
(B) the applicant for certification, except in the case of a
retrofit or repower of an existing electric generation unit,
has purchased or entered into a binding contract for the
purchase of the main steam turbine or turbines for the
project, except that such contract may be contingent upon
receipt of a certification under subsection (d)(2).
(3) PRIORITY FOR INTEGRATED GASIFICATION COMBINED CYCLE PROJECTS-
In determining which qualifying advanced coal projects to
certify under subsection (d)(2), the Secretary shall--
(A) certify capacity, in accordance with the procedures set
forth in subsection (d), in relatively equal amounts to--
(i) projects using bituminous coal as a primary feedstock,
(ii) projects using subbituminous coal as a primary
feedstock, and
(iii) projects using lignite as a primary feedstock, and
(B) give high priority to projects which include, as determined
by the Secretary--
(i) greenhouse gas capture capability,
(ii) increased by-product utilization, and
(iii) other benefits.
(f) Advanced Coal-Based Generation Technology-
(1) IN GENERAL- For the purpose of this section, an electric
generation unit uses advanced coal-based generation technology
if--
(A) the unit--
(i) uses integrated gasification combined cycle technology, or
(ii) except as provided in paragraph (3), has a design net
heat rate of 8530 Btu/kWh (40 percent efficiency), and
(B) the unit is designed to meet the performance requirements
in the following table:
--------------------------------------------------------------------
--------------------------------------------------------------------
Performance characteristic: Design level for project:
SO2 (percent removal) 99 percent
NOx (emissions) 0.07 lbs/MMBTU
PM* (emissions) 0.015 lbs/MMBTU
Hg (percent removal) 90 percent
--------------------------------------------------------------------
For purposes of the performance requirement specified for the
removal of SO<INF>2</INF> in the table contained in subparagraph
(B), the SO<INF>2</INF> removal design level in the case of a
unit designed for the use of feedstock substantially all of
which is subbituminous coal shall be 99 percent SO<INF>2</INF>
removal or the achievement of an emission level of 0.04 pounds
or less of SO<INF>2</INF> per million Btu, determined on a 30-
day average.
(2) DESIGN NET HEAT RATE- For purposes of this subsection, design net
heat rate with respect to an electric generation unit shall--
(A) be measured in Btu per kilowatt hour (higher heating value),
(B) be based on the design annual heat input to the unit and the
rated net electrical power, fuels, and chemicals output of the unit
(determined without regard to the cogeneration of steam by the unit),
(C) be adjusted for the heat content of the design coal to be used by
the unit--
(i) if the heat content is less than 13,500 Btu per pound, but
greater than 7,000 Btu per pound, according to the following
formula: design net heat rate = unit net heat rate x [1-[((13,500-
design coal heat content, Btu per pound)/1,000)* 0.013]], and
(ii) if the heat content is less than or equal to 7,000 Btu per
pound, according to the following formula: design net heat rate =
unit net heat rate x [1-[((13,500-design coal heat content, Btu
per pound)/1,000)* 0.018]], and
(D) be corrected for the site reference conditions of--
(i) elevation above sea level of 500 feet,
(ii) air pressure of 14.4 pounds per square inch absolute,
(iii) temperature, dry bulb of 63«F,
(iv) temperature, wet bulb of 54«F, and
(v) relative humidity of 55 percent.
(3) EXISTING UNITS- In the case of any electric generation unit in
existence on the date of the enactment of this section, such unit
uses advanced coal-based generation technology if, in lieu of the
requirements under paragraph (1)(A)(ii), such unit achieves a minimum
efficiency of 35 percent and an overall thermal design efficiency
improvement, compared to the efficiency of the unit as operated, of
not less than--
(A) 7 percentage points for coal of more than 9,000 Btu,
(B) 6 percentage points for coal of 7,000 to 9,000 Btu, or
(C) 4 percentage points for coal of less than 7,000 Btu.
(g) Applicability- No use of technology (or level of emission reduction
solely by reason of the use of the technology), and no achievement of
any emission reduction by the demonstration of any technology or
performance level, by or at one or more facilities with respect to which
a credit is allowed under this section, shall be considered to indicate
that the technology or performance level is--
(1) adequately demonstrated for purposes of section 111 of the Clean
Air Act (42 U.S.C. 7411);
(2) achievable for purposes of section 169 of that
Act (42 U.S.C. 7479); or
(3) achievable in practice for purposes of section 171 of such
Act (42 U.S.C. 7501).
Sources
This section was created by the Energy Policy Act of 2005, PL 109-058,
Section 1307(b.
The amendments made by this section shall apply to periods after the
date of the enactment of this Act, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in effect
on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990).
Miscellaneous
AMENDMENTS
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 203. PERFORMANCE STANDARDS FOR SULFUR DIOXIDE REMOVAL IN ADVANCED
COAL-BASED GENERATION TECHNOLOGY UNITS DESIGNED TO USE
SUBBITUMINOUS COAL.
(a) In General.--Paragraph (1) of section 48A(f) <<NOTE: 26 USC
48A.>> (relating to advanced coal-based generation technology) is
amended by adding at the end the following new flush sentence:
``For purposes of the performance requirement specified for the
removal of SO<INF>2</INF> in the table contained in subparagraph
(B), the SO<INF>2</INF> removal design level in the case of a
unit designed for the use of feedstock substantially all of
which is subbituminous coal shall be 99 percent SO<INF>2</INF>
removal or the achievement of an emission level of 0.04 pounds
or less of SO<INF>2</INF> per million Btu, determined on a 30-
day average.''.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 203(b) <<NOTE: 26 USC 48A note.>> Effective Date.--The amendment made
by this section shall take apply with respect to applications for
certification under section 48A(d)(2) of the Internal Revenue Code of
1986 submitted after October 2, 2006.
References
SECTION REFERRED TO IN OTHER SECTIONS
