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
     
 

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