HR 6756 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide tax incentives for clean coal technology, and for other purposes.CommentsClose CommentsPermalink

July 31, 2008CommentsClose CommentsPermalink

Mr. POMEROY (for himself and Mr. LEWIS of Kentucky) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide tax incentives for clean coal technology, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; FINDINGS.

(a) Short Title- This Act may be cited as the ‘Carbon Reduction Technology Bridge Act of 2008’.CommentsClose CommentsPermalink





(b) Findings- The Congress finds the following:CommentsClose CommentsPermalink





(1) Significantly reducing greenhouse gas emissions from U.S. coal plants must be part of a strategy to address climate change.CommentsClose CommentsPermalink





(2) Carbon capture and sequestration is the key to continued enjoyment of the energy security and economic benefits associated with the use of the Nation’s abundant domestic coal resources for power generation.CommentsClose CommentsPermalink





(3) Multiple technology demonstrations that increase the efficiency of power plants and thereby reduce carbon dioxide emissions and that demonstrate carbon dioxide capture and sequestration are needed in the near-term as a bridge to a reliable and affordable power system that can achieve future greenhouse gas reduction goals.CommentsClose CommentsPermalink

SEC. 2. SEVEN-YEAR AMORTIZATION FOR CERTAIN SYSTEMS INSTALLED ON COAL-FIRED ELECTRIC GENERATION UNITS AFTER 2007.

(a) In General- Subsection (d) of section 169 of the Internal Revenue Code of 1986 (relating to amortization of pollution control facilities) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) SPECIAL RULE FOR SYSTEMS INSTALLED ON COAL-FIRED ELECTRIC GENERATION UNITS AFTER 2007-CommentsClose CommentsPermalink





‘(A) IN GENERAL- Any mechanical or electronic system--CommentsClose CommentsPermalink





‘(i) which is installed on a coal-fired electric generation unit after December 31, 2007, andCommentsClose CommentsPermalink





‘(ii) which reduces carbon dioxide emissions per net megawatt hour of electricity generation by 1 or more of the means described in subparagraph (B) or any other means,CommentsClose CommentsPermalink





shall be treated for purposes of this section as an identifiable treatment facility which abates or controls atmospheric pollution or contamination by removing, altering, disposing, storing, or preventing the creation or emission of pollutants, contaminants, wastes, or heat. Paragraph (1)(C) of this subsection, and subsection (e), shall not apply to any system which is so treated.CommentsClose CommentsPermalink





‘(B) MEANS FOR REDUCING EMISSIONS- The means described in this subparagraph are--CommentsClose CommentsPermalink





‘(i) optimizing combustion,CommentsClose CommentsPermalink





‘(ii) optimizing sootblowing and heat transfer,CommentsClose CommentsPermalink





‘(iii) upgrading steam temperature control capabilities,CommentsClose CommentsPermalink





‘(iv) reducing exit gas temperatures (air heater modifications),CommentsClose CommentsPermalink





‘(v) predrying low rank coals using power plant waste heat,CommentsClose CommentsPermalink





‘(vi) modifying steam turbines or change the steam path/blading,CommentsClose CommentsPermalink





‘(vii) replacing single speed motors with variable speed drives for fans and pumps, andCommentsClose CommentsPermalink





‘(viii) improving operational controls, including neural networks.CommentsClose CommentsPermalink





‘(C) SPECIAL RULE FOR MINIMUM TAX- Section 56(a)(5) shall not apply to property to which this paragraph applies.’CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to property placed in service after December 31, 2007.CommentsClose CommentsPermalink

SEC. 3. CREDIT FOR CLOSED-LOOP BIOMASS CO-FIRED WITH COAL.

(a) In General- Subparagraph (A) of section 45(d)(2) of the Internal Revenue Code of 1986 (relating to closed-loop biomass facility) is amended by striking the period at the end of clause (ii) and inserting ‘, or’ and by adding after clause (ii) the following new clause:CommentsClose CommentsPermalink





‘(iii) owned by the taxpayer which before January 1, 2014, is originally placed in service as--CommentsClose CommentsPermalink





‘(I) a facility to use closed-loop biomass to co-fire (or, in the case of an integrated gasification combined cycle facility, co-process) with coal, orCommentsClose CommentsPermalink





‘(II) a coal-fired facility which is modified to use closed-loop biomass to co-fire (or, in the case of an integrated gasification combined cycle facility, co-process) with coal.’CommentsClose CommentsPermalink





(b) Conforming Amendment- Subparagraph (B) of section 45(d)(2) of such Code is amended by striking ‘subparagraph (A)(ii)’ and inserting ‘clause (ii) or (iii) of subparagraph (A)’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. CREDIT FOR INVESTMENT IN QUALIFIED NEW CLEAN COAL ELECTRIC GENERATION UNITS.

(a) In General- Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to rules for computing investment credit) is amended by inserting after section 48B the following new section:CommentsClose CommentsPermalink

‘SEC. 48C. QUALIFYING NEW CLEAN COAL ELECTRIC GENERATION UNIT CREDIT.

‘(a) General Rule- For purposes of section 46, the qualifying new clean coal electric generation credit for any taxable year is an amount equal to the applicable percentage of the qualified investment for such taxable year.CommentsClose CommentsPermalink





‘(b) Applicable Percentage- For purposes of subsection (a)--CommentsClose CommentsPermalink





‘(1) IN GENERAL- Except as provided in paragraph (2), the applicable percentage is the percentage determined under the following table using the design net heat rate of the qualified clean coal electric generation unit.CommentsClose CommentsPermalink

-------------------------------------------------------CommentsClose CommentsPermalink

‘Design Net Heat Rate in Btus/kilowatt hour Percentage CommentsClose CommentsPermalink

-------------------------------------------------------CommentsClose CommentsPermalink

More than 8322 but not more than 8530 (40%)         10 CommentsClose CommentsPermalink

More than 8120 but not more than 8322 (41%)         10 CommentsClose CommentsPermalink

More than 7940 but not more than 8120 (42%)         20 CommentsClose CommentsPermalink

More than 7760 but not more than 7940 (43%)         26 CommentsClose CommentsPermalink

More than 7580 but not more than 7760 (44%)         28 CommentsClose CommentsPermalink

Not more than 7580 (45%)                            30 CommentsClose CommentsPermalink

-------------------------------------------------------CommentsClose CommentsPermalink

‘(2) ELECTION TO USE ALTERNATIVE METHOD FOR DETERMINING PERCENTAGE- In the case of a qualified clean coal electric generation unit which is designed to emit carbon dioxide at an average annual rate of not more than 800 pounds per net megawatt hour of electricity generation, in lieu of applying paragraph (1), the taxpayer may elect an applicable percentage of 30 percent.CommentsClose CommentsPermalink





‘(c) Qualified Investment-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of subsection (a), the qualified investment for any taxable year is the basis of property placed in service by the taxpayer during such taxable year as part of, or in connection with, a qualified clean coal electric generation unit--CommentsClose CommentsPermalink





‘(A)(i) the construction, reconstruction, or erection of which is completed by the taxpayer, orCommentsClose CommentsPermalink





‘(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, andCommentsClose CommentsPermalink





‘(B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.CommentsClose CommentsPermalink





‘(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED PROPERTY- Rules similar to section 48(a)(4) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(d) Aggregate Credits-CommentsClose CommentsPermalink





‘(1) IN GENERAL- No credit shall be allowed under this section with respect to any qualified clean coal electric generation unit unless such unit is certified by the Secretary under subsection (f).CommentsClose CommentsPermalink





‘(2) LIMITATION ON UNITS CERTIFIED- The Secretary may certify under subsection (f) in the aggregate no more than 6,000 megawatts of electric generation units.CommentsClose CommentsPermalink





‘(e) Definitions- For purposes of this section--CommentsClose CommentsPermalink





‘(1) QUALIFIED CLEAN COAL ELECTRIC GENERATION UNIT- The term ‘qualified clean coal electric generation unit’ means a coal-based electric generation unit if--CommentsClose CommentsPermalink





‘(A) the unit achieves a design net heat rate of not more than 8530 Btu/Kw-hr,CommentsClose CommentsPermalink





‘(B) the unit is designed to meet the performance requirements specified in the table contained in section 48A(f)(1)(B),CommentsClose CommentsPermalink





‘(C) the unit includes--CommentsClose CommentsPermalink





‘(i) carbon dioxide capture, transport, and storage property (as defined in section 48D(c)) for carbon dioxide produced by such unit, andCommentsClose CommentsPermalink





‘(ii) 1 or more sites for the storage of such carbon dioxide,CommentsClose CommentsPermalink





‘(D) the unit is designed to capture, and store, at least--CommentsClose CommentsPermalink





‘(i) 500,000 metric tons per year of carbon dioxide if such unit is among the first 1,000 megawatts of electric generation units certified by the Secretary under subsection (f), andCommentsClose CommentsPermalink





‘(ii) 1,000,000 metric tons per year of carbon dioxide if such unit is among the next 3,000 megawatts of electric generation units certified by the Secretary under subsection (f), andCommentsClose CommentsPermalink





‘(iii) 2,000,000 metric tons per year of carbon dioxide for any other unit,CommentsClose CommentsPermalink





‘(E) the fuel input for the unit, when completed, is at least 75 percent coal, andCommentsClose CommentsPermalink





‘(F) the unit is located in the United States.CommentsClose CommentsPermalink





‘(2) DESIGN NET HEAT RATE- Design net heat rate shall be determined as provided in section 48A(f)(2) and before any energy loss resulting from the operation of the carbon dioxide capture process.CommentsClose CommentsPermalink





‘(3) COAL- The term ‘coal’ means bituminous coal, subbituminous coal, and lignite.CommentsClose CommentsPermalink





‘(4) ELECTRIC GENERATION UNIT- The term ‘electric generation unit’ means any unit at least 50 percent of the total annual net output of which is electrical power, including an otherwise eligible unit which is used in an industrial application.CommentsClose CommentsPermalink





‘(f) Certification-CommentsClose CommentsPermalink





‘(1) CERTIFICATION PROCESS- The Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, shall establish a certification process to determine if a coal-based electric generation unit meets all criteria and other requirements to be recognized as a qualified clean coal electric generation unit. The certification process shall also be designed to determine the efficiency (and, in the case of an election under subsection (b)(2), the carbon dioxide emission rate) of such unit to establish the amount of the credit under subsection (a).CommentsClose CommentsPermalink





‘(2) PRIORITY FOR UNITS EXCEEDING CAPTURE AND STORAGE REQUIREMENTS- In determining which qualified clean coal generation units to certify under subsection (f), the Secretary shall give high priority to those units which exceed the carbon dioxide and storage requirements provided in subsection (e)(1)(D).CommentsClose CommentsPermalink





‘(3) FEEDSTOCK REQUIREMENTS- After the date of publication by the Secretary of the final certification process referred to in subsection (d), the Secretary shall allocate the limitation in subsection (d)(2) in equal amounts among--CommentsClose CommentsPermalink





‘(A) units using bituminous coal as a primary feedstock,CommentsClose CommentsPermalink





‘(B) units using subbituminous coal as a primary feedstock, andCommentsClose CommentsPermalink





‘(C) units using lignite as a primary feedstock.CommentsClose CommentsPermalink





‘(4) REDISTRIBUTION- The Secretary may reallocate credits if the Secretary determines that there is an insufficient quantity of qualifying applications for certification, pending at the time of review, to comply with the feedstock requirements of paragraph (3). The Secretary may conduct an additional program for applications for certification and reallocate available credits without regard to the feedstock requirement which was not satisfied as a result of insufficient applications for certification.CommentsClose CommentsPermalink





‘(5) REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATION- An application for certification shall contain such information as the Secretary may require in order to make a determination to accept or reject the application and establish applicable credit entitlement. Any information contained in the application shall be protected as provided in section 552(b)(4) of title 5, United States Code.CommentsClose CommentsPermalink





‘(g) Denial of Double Benefit- No credit shall be allowed under this section for any property for which credit is allowed under sections 48A, 48B, or 48D.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 46 of such Code (relating to amount of credit) is amended by striking ‘and’ at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting ‘, and’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(5) the qualifying new clean coal electric generation credit.’.CommentsClose CommentsPermalink





(2) Subparagraph (C) of section 49(a)(1) of such Code is amended by striking ‘and’ at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ‘, and’, and by adding after clause (iv) the following new clause:CommentsClose CommentsPermalink





‘(v) the basis of any property which is part of a qualifying clean coal electric generation unit under section 48C.’.CommentsClose CommentsPermalink





(3) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48B the following new item:CommentsClose CommentsPermalink





‘Sec. 48C. Qualifying new clean coal electric generation unit credit.’.CommentsClose CommentsPermalink





(c) Effective Date- 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).CommentsClose CommentsPermalink

SEC. 5. TAX CREDIT FOR INSTALLATION OF CARBON DIOXIDE CAPTURE, TRANSPORT, AND STORAGE EQUIPMENT.

(a) In General- Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to rules for computing investment credit) is amended by inserting after section 48C the following new section:CommentsClose CommentsPermalink

‘SEC. 48D. QUALIFYING CARBON DIOXIDE CAPTURE, TRANSPORT, AND STORAGE EQUIPMENT CREDIT.

‘(a) General Rule- For purposes of section 46, the qualifying carbon dioxide equipment credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year.CommentsClose CommentsPermalink





‘(b) Qualified Investment-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of subsection (a), the qualified investment for any taxable year is the basis eligible property which is placed in service by the taxpayer during such taxable year.CommentsClose CommentsPermalink





‘(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED PROPERTY- Rules similar to section 48(a)(4) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(c) Definitions- For purposes of this section--CommentsClose CommentsPermalink





‘(1) ELIGIBLE PROPERTY- The term ‘eligible property’ means carbon dioxide capture, transport, and storage property--CommentsClose CommentsPermalink





‘(A) which is part of (or used in connection with) a qualified coal-fired electric generation unit of the taxpayer,CommentsClose CommentsPermalink





‘(B)(i) the construction, reconstruction, or erection of which is completed by the taxpayer, orCommentsClose CommentsPermalink





‘(ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer, andCommentsClose CommentsPermalink





‘(C) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.CommentsClose CommentsPermalink





‘(2) CARBON DIOXIDE CAPTURE, TRANSPORT, AND STORAGE PROPERTY- The term ‘carbon dioxide capture, transport, and storage property’ means equipment to capture, transport, or store carbon dioxide produced at such unit, including--CommentsClose CommentsPermalink





‘(A) equipment to separate and pressurize carbon dioxide for transport (including equipment to operate such equipment), andCommentsClose CommentsPermalink





‘(B) equipment to transport, inject, and monitor such carbon dioxide.CommentsClose CommentsPermalink





‘(3) QUALIFIED COAL-FIRED ELECTRIC GENERATION UNIT- The term ‘qualified coal-fired electric generation unit’ means any coal-fired electric generation unit--CommentsClose CommentsPermalink





‘(A) which, after installation of eligible property, is designed--CommentsClose CommentsPermalink





‘(i) to emit carbon dioxide at an average annual rate of less than 1100 pounds of carbon dioxide per net megawatt hour of electricity generation, orCommentsClose CommentsPermalink





‘(ii) to capture and store in a secure geologic formation at least 500,000 metric tons of carbon dioxide per year,CommentsClose CommentsPermalink





‘(B) the fuel input for which is at least 75 percent coal, andCommentsClose CommentsPermalink





‘(C) which is located in the United States.CommentsClose CommentsPermalink





‘(4) COAL- The term ‘coal’ means bituminous coal, subbituminous coal, and lignite.CommentsClose CommentsPermalink





‘(d) Aggregate Credits-CommentsClose CommentsPermalink





‘(1) IN GENERAL- No credit shall be allowed under this section for property which is part of (or used in connection with) a qualified coal-fired electric generation unit unless such unit is certified by the Secretary under subsection (e).CommentsClose CommentsPermalink





‘(2) LIMITATION ON UNITS CERTIFIED- The Secretary may certify under subsection (e) in the aggregate no more than 9,000 megawatts of electric generation units.CommentsClose CommentsPermalink





‘(e) Certification-CommentsClose CommentsPermalink





‘(1) CERTIFICATION PROCESS- The Secretary shall establish a certification process for purposes of this section.CommentsClose CommentsPermalink





‘(2) FEEDSTOCK REQUIREMENTS- During the first 24 months after the date of publication by the Secretary of the final certification process referred to in paragraph (1), the Secretary shall allocate the limitation in subsection (d)(2) in equal amounts among--CommentsClose CommentsPermalink





‘(A) units using bituminous coal as a primary feedstock,CommentsClose CommentsPermalink





‘(B) units using subbituminous coal as a primary feedstock, andCommentsClose CommentsPermalink





‘(C) units using lignite as a primary feedstock.CommentsClose CommentsPermalink





‘(3) REDISTRIBUTION- The Secretary may reallocate credits if the Secretary determines that there is an insufficient quantity of qualifying applications for certification, pending at the time of review, to comply with the feedstock requirements of paragraph (2). The Secretary may conduct an additional program for applications for certification and reallocate available credits without regard to the feedstock requirement which was not satisfied as a result of insufficient applications for certification.CommentsClose CommentsPermalink





‘(4) REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATION- An application for certification shall contain such information as the Secretary may require in order to establish credit entitlement. Any information contained in an application shall be protected as provided in section 552(b)(4) of title 5, United States Code.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 46 of such Code (relating to amount of credit), as amended by this Act, is amended by striking ‘and’ at the end of paragraph (4), by striking the period at the end of paragraph (5) and inserting ‘, and’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(6) the qualifying carbon dioxide equipment credit.’.CommentsClose CommentsPermalink





(2) Subparagraph (C) of section 49(a)(1) of such Code, as amended by this Act, is amended by striking ‘and’ at the end of clause (iv), by striking the period at the end of clause (v) and inserting ‘, and’, and by adding after clause (v) the following new clause:CommentsClose CommentsPermalink





‘(vi) the basis of any eligible property (as defined in section 48D(c)(1)).’.CommentsClose CommentsPermalink





(3) The table of sections for such subpart E is amended by inserting after the item relating to section 48C the following new item:CommentsClose CommentsPermalink





‘Sec. 48D. Qualifying carbon dioxide capture, transport, and storage equipment credit.’.CommentsClose CommentsPermalink





(c) Effective Date- 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).CommentsClose CommentsPermalink

SEC. 6. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION.

‘(a) General Rule- For purposes of section 38, the carbon dioxide sequestration credit for any taxable year is an amount equal to the sum of--CommentsClose CommentsPermalink





‘(1) $30 per metric ton of qualified carbon dioxide which is stored by the taxpayer in secure geological storage,CommentsClose CommentsPermalink





‘(2) $20 per metric ton of qualified carbon dioxide which is compressed, and transferred, by the taxpayer to the United States at a facility under such rules and conditions as the Federal Government shall prescribe not later than 18 months prior to any transfer, andCommentsClose CommentsPermalink





‘(3) $15 per metric ton of qualified carbon dioxide which is used by the taxpayer as a tertiary injectant in a qualified enhanced oil or natural gas recovery project.CommentsClose CommentsPermalink





‘(b) Qualified Carbon Dioxide- For purposes of this section, the term ‘qualified carbon dioxide’ means carbon dioxide--CommentsClose CommentsPermalink





‘(1) which is captured from a qualified electric generation unit during the 10-year period beginning on the date that carbon dioxide capture equipment was originally placed in service at such unit,CommentsClose CommentsPermalink





‘(2) which would otherwise be released into the atmosphere, andCommentsClose CommentsPermalink





‘(3) which is measured at the source of capture and verified at the point of disposal or injection.CommentsClose CommentsPermalink





‘(c) Qualified Electric Generation Unit- For purposes of this section, the term ‘qualified electric generation unit’ means any electric generation unit (as defined in section 48A(c)(6))--CommentsClose CommentsPermalink





‘(1) which is owned by the taxpayer,CommentsClose CommentsPermalink





‘(2) at which the fuel input is at least 75 percent coal,CommentsClose CommentsPermalink





‘(3) at which carbon dioxide capture equipment is placed in service,CommentsClose CommentsPermalink





‘(4) which--CommentsClose CommentsPermalink





‘(A) captures not less than 500,000 metric tons of carbon dioxide during the taxable year, orCommentsClose CommentsPermalink





‘(B) is designed to emit carbon dioxide at an average annual rate of less than 1100 pounds of carbon dioxide per net megawatt hour of electricity generated during the taxable year, andCommentsClose CommentsPermalink





‘(5) which is located in--CommentsClose CommentsPermalink





‘(A) the United States (within the meaning of section 638(1)), orCommentsClose CommentsPermalink





‘(B) a possession of the United States (within the meaning of section 638(2)).CommentsClose CommentsPermalink





‘(d) Aggregate Credits-CommentsClose CommentsPermalink





‘(1) IN GENERAL- No credit shall be allowed under this section for carbon dioxide captured from a qualified facility unless such facility is certified by the Secretary for purposes of this section. The owner of a qualified facility may request to be certified for purposes of this section by submitted a request to the Secretary containing such information as the Secretary may require.CommentsClose CommentsPermalink





‘(2) LIMITATION ON UNITS CERTIFIED- The Secretary may certify in the aggregate no more than 9,000 megawatts of electric generation units.CommentsClose CommentsPermalink





‘(e) Certification-CommentsClose CommentsPermalink





‘(1) CERTIFICATION PROCESS- The Secretary shall establish a certification process for purposes of this section.CommentsClose CommentsPermalink





‘(2) FEEDSTOCK REQUIREMENTS- During the first 24 months after the date of publication by the Secretary of the final certification process referred to in paragraph (1), the Secretary shall allocate the limitation in subsection (d)(2) in equal amounts among--CommentsClose CommentsPermalink





‘(A) units using bituminous coal as a primary feedstock,CommentsClose CommentsPermalink





‘(B) units using subbituminous coal as a primary feedstock, andCommentsClose CommentsPermalink





‘(C) units using lignite as a primary feedstock.CommentsClose CommentsPermalink





‘(3) REDISTRIBUTION- The Secretary may reallocate credits if the Secretary determines that there is an insufficient quantity of qualifying applications for certification, pending at the time of review, to comply with the feedstock requirements of paragraph (2). The Secretary may conduct an additional program for applications for certification and reallocate available credits without regard to the feedstock requirement which was not satisfied as a result of insufficient applications for certification.CommentsClose CommentsPermalink





‘(4) REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATION- An application for certification shall contain such information as the Secretary may require in order to make a determination to accept or reject the application and establish applicable credit entitlement. Any information contained in the application shall be protected as provided in section 552(b)(4) of title 5, United States Code.CommentsClose CommentsPermalink





‘(f) Special Rules and Other Definitions- For purposes of this section--CommentsClose CommentsPermalink





‘(1) SECURE GEOLOGICAL STORAGE- The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish regulations for determining adequate security measures for the geological storage of carbon dioxide under subsection (a)(1)(B). Such regulation shall include storage within deep saline formations and umninable coal seams under such conditions as the Secretary may determine under such regulations.CommentsClose CommentsPermalink





‘(2) RULES RELATING TO USE AS TERTIARY INJECTANT-CommentsClose CommentsPermalink





‘(A) TERTIARY INJECTANT- The term ‘tertiary injectant’ has the same meaning as when used within section 193(b)(1).CommentsClose CommentsPermalink





‘(B) QUALIFIED ENHANCED OIL OR NATURAL GAS RECOVERY PROJECT- The term ‘qualified enhanced oil or natural gas recovery project’ has the meaning given the term ‘qualified enhanced oil recovery project’ by section 43(c)(2), determined by substituting ‘crude oil or natural gas’ for ‘crude oil’ in subparagraph (A)(i) thereof.CommentsClose CommentsPermalink





‘(C) RECYCLED CARBON DIOXIDE- No credit shall be allowed under this section for carbon dioxide that is recaptured, recycled, and reinjected as part of the enhanced oil and natural gas recovery process.CommentsClose CommentsPermalink





‘(3) CREDIT ATTRIBUTABLE TO TAXPAYER- Any credit under this section shall be attributable to the person that captures and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified carbon dioxide, except to the extent provided in regulations prescribed by the Secretary.CommentsClose CommentsPermalink





‘(4) RECAPTURE- The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any qualified carbon dioxide which ceases to be captured, disposed of, or used as a tertiary injectant in a manner consistent with the requirements of this section.CommentsClose CommentsPermalink





‘(5) INFLATION ADJUSTMENT- In the case of any taxable year beginning in a calendar year after 2008, there shall be substituted for each dollar amount contained in subsection (a) an amount equal to the product of--CommentsClose CommentsPermalink





‘(A) such dollar amount, multiplied byCommentsClose CommentsPermalink





‘(B) the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting ‘2008’ for ‘1990’.CommentsClose CommentsPermalink





‘(6) COAL- The term ‘coal’ means bituminous coal, subbituminous coal, and lignite.’.CommentsClose CommentsPermalink





(b) Conforming Amendment- Section 38(b) of such Code is amended by striking ‘plus’ at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting ‘, plus’, and by adding at the end of following new paragraph:CommentsClose CommentsPermalink





‘(34) the carbon dioxide sequestration credit determined under section 45Q(a).’.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 45Q. Credit for carbon dioxide sequestration.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply carbon dioxide captured after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 7. CLEAN ENERGY COAL BONDS.

(a) In General- Subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to qualified tax credit bonds) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 54C. CLEAN ENERGY COAL BONDS.

‘(a) Clean Energy Coal Bond- For purposes of this subchapter--CommentsClose CommentsPermalink





‘(1) IN GENERAL- The term ‘clean energy coal bond’ means any bond issued as part of an issue if--CommentsClose CommentsPermalink





‘(A) the bond is issued by a qualified issuer pursuant to an allocation by the Secretary to such issuer of a portion of the national clean energy coal bond limitation under subsection (b)(2);CommentsClose CommentsPermalink





‘(B) 100 percent of the available project proceeds from the sale of such issue are to be used for capital expenditures incurred by qualified borrowers for 1 or more qualified projects;CommentsClose CommentsPermalink





‘(C) the qualified issuer designates such bond for purposes of this section and the bond is in registered form; andCommentsClose CommentsPermalink





‘(D) in lieu of the requirements of section 54A(d)(2), the issue meets the requirements of subsection (c).CommentsClose CommentsPermalink





‘(2) QUALIFIED PROJECT; SPECIAL USE RULES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The term ‘qualified project’ means a qualified clean coal project (as defined in subsection (f)(1)) placed in service by a qualified borrower.CommentsClose CommentsPermalink





‘(B) REFINANCING RULES- For purposes of paragraph (1)(B), a qualified project may be refinanced with proceeds of a clean energy coal bond only if the indebtedness being refinanced (including any obligation directly or indirectly refinanced by such indebtedness) was originally incurred by a qualified borrower after the date of the enactment of this section.CommentsClose CommentsPermalink





‘(C) REIMBURSEMENT- For purposes of paragraph (1)(B), a clean energy coal bond may be issued to reimburse a qualified borrower for amounts paid after the date of the enactment of this section with respect to a qualified project, but only if--CommentsClose CommentsPermalink





‘(i) prior to the payment of the original expenditure, the qualified borrower declared its intent to reimburse such expenditure with the proceeds of a clean energy coal bond;CommentsClose CommentsPermalink





‘(ii) not later than 60 days after payment of the original expenditure, the qualified issuer adopts an official intent to reimburse the original expenditure with such proceeds; andCommentsClose CommentsPermalink





‘(iii) reimbursement is not made later than 18 months after the date the original expenditure is paid or the date the project is placed in service or abandoned, but in no event more than 3 years after the original expenditure is paid.CommentsClose CommentsPermalink





‘(D) TREATMENT OF CHANGES IN USE- For purposes of paragraph (1)(B), the proceeds of an issue shall not be treated as used for a qualified project to the extent that a qualified borrower takes any action within its control which causes such proceeds not to be used for a qualified project. The Secretary shall prescribe regulations specifying remedial actions that may be taken (including conditions to taking such remedial actions) to prevent an action described in the preceding sentence from causing a bond to fail to be a clean energy coal bond.CommentsClose CommentsPermalink





‘(b) Limitation on Amount of Bonds Designated-CommentsClose CommentsPermalink





‘(1) NATIONAL LIMITATION- There is a national clean energy coal bond limitation of $5,000,000,000.CommentsClose CommentsPermalink





‘(2) ALLOCATION BY SECRETARY- The Secretary shall allocate the amount described in paragraph (1) among qualified projects in such manner as the Secretary determines appropriate.CommentsClose CommentsPermalink





‘(c) Special Rules Relating to Expenditures-CommentsClose CommentsPermalink





‘(1) IN GENERAL- An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the qualified issuer reasonably expects--CommentsClose CommentsPermalink





‘(A) 100 percent or more of the available project proceeds from the sale of the issue are to be spent for 1 or more qualified projects within the 5-year period beginning on the date of issuance of the clean energy bond;CommentsClose CommentsPermalink





‘(B) a binding commitment with a third party to spend at least 10 percent of such available project proceeds from the sale of the issue will be incurred within the 6-month period beginning on the date of issuance of the clean energy bond or, in the case of a clean energy bond the available project proceeds of which are to be loaned to 2 or more qualified borrowers, such binding commitment will be incurred within the 6-month period beginning on the date of the loan of such proceeds to a qualified borrower; andCommentsClose CommentsPermalink





‘(C) such projects will be completed with due diligence and the available project proceeds from the sale of the issue will be spent with due diligence.CommentsClose CommentsPermalink





‘(2) EXTENSION OF PERIOD- Upon submission of a request prior to the expiration of the period described in paragraph (1)(A), the Secretary may extend such period if the qualified issuer establishes that the failure to satisfy the 5-year requirement is due to reasonable cause and the related projects will continue to proceed with due diligence.CommentsClose CommentsPermalink





‘(3) FAILURE TO SPEND REQUIRED AMOUNT OF BOND PROCEEDS WITHIN 5 YEARS- To the extent that less than 100 percent of the available project proceeds of such issue are expended by the close of the 5-year period beginning on the date of issuance (or if an extension has been obtained under paragraph (2), by the close of the extended period), the qualified issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.CommentsClose CommentsPermalink





‘(d) Cooperative Electric Company; Qualified Energy Tax Credit Bond Lender; Governmental Body; Qualified Borrower- For purposes of this section--CommentsClose CommentsPermalink





‘(1) COOPERATIVE ELECTRIC COMPANY- The term ‘cooperative electric company’ means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C), or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.CommentsClose CommentsPermalink





‘(2) CLEAN ENERGY BOND LENDER- The term ‘clean energy bond lender’ means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.CommentsClose CommentsPermalink





‘(3) PUBLIC POWER ENTITY- The term ‘public power entity’ means a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of enactment of this paragraph).CommentsClose CommentsPermalink





‘(4) QUALIFIED ISSUER- The term ‘qualified issuer’ means--CommentsClose CommentsPermalink





‘(A) a clean energy bond lender;CommentsClose CommentsPermalink





‘(B) a cooperative electric company; orCommentsClose CommentsPermalink





‘(C) a public power entity.CommentsClose CommentsPermalink





‘(5) QUALIFIED BORROWER- The term ‘qualified borrower’ means--CommentsClose CommentsPermalink





‘(A) a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2)(C); orCommentsClose CommentsPermalink





‘(B) a public power entity.CommentsClose CommentsPermalink





‘(e) Special Rules Relating to Pool Bonds- No portion of a pooled financing bond may be allocable to any loan unless the borrower has entered into a written loan commitment for such portion prior to the issue date of such issue.CommentsClose CommentsPermalink





‘(f) Other Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





‘(1) QUALIFIED CLEAN COAL PROJECT- For purposes of this section, the term ‘qualified clean coal project’ means--CommentsClose CommentsPermalink





‘(A) an atmospheric pollution control facility (within the meaning of section 169(d)(6));CommentsClose CommentsPermalink





‘(B) a closed-loop biomass facility (within the meaning of section 45(d)(2));CommentsClose CommentsPermalink





‘(C) a qualified new clean coal electric generation unit (within the meaning of section 48C(d)(1));CommentsClose CommentsPermalink





‘(D) qualifying carbon dioxide equipment described in section 48D(c)(1); orCommentsClose CommentsPermalink





‘(E) a qualified facility (within the meaning of section 45Q(c)).CommentsClose CommentsPermalink





‘(2) POOLED FINANCING BOND- The term ‘pooled financing bond’ shall have the meaning given such term by section 149(f)(4)(A).CommentsClose CommentsPermalink





‘(g) Termination- This section shall not apply with respect to any bond issued after December 31, 2018.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Paragraph (1) of section 54A(d) of the Internal Revenue Code of 1986 is amended to read as follows:CommentsClose CommentsPermalink





‘(1) QUALIFIED TAX CREDIT BOND- The term ‘qualified tax credit bond’ means--CommentsClose CommentsPermalink





‘(A) a qualified forestry conservation bond, orCommentsClose CommentsPermalink





‘(B) a clean energy coal bond,CommentsClose CommentsPermalink





which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).’.CommentsClose CommentsPermalink





(2) Subparagraph (C) of section 54A(d)(2) of such Code is amended to read as follows:CommentsClose CommentsPermalink





‘(C) QUALIFIED PURPOSE- For purposes of this paragraph, the term ‘qualified purpose’ means--CommentsClose CommentsPermalink





‘(i) in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e), andCommentsClose CommentsPermalink





‘(ii) in the case of a clean energy coal bond, a purpose specified in section 54C(f)(1).’.CommentsClose CommentsPermalink





(c) Clerical Amendment- The table of sections for subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 54C. Clean energy coal bonds.’.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to bonds issued after December 31, 2008.CommentsClose CommentsPermalink

SEC. 8. CERTAIN INCOME AND GAINS RELATING TO INDUSTRIAL SOURCE CARBON DIOXIDE TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS.

(a) In General- Subparagraph (E) of section 7704(d)(1) of the Internal Revenue Code of 1986 (defining qualifying income) is amended--CommentsClose CommentsPermalink





(1) by striking ‘or the marketing’ and inserting ‘the marketing’, andCommentsClose CommentsPermalink





(2) by inserting ‘or industrial source carbon dioxide’ after ‘timber)’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act, in taxable years ending after such date.CommentsClose CommentsPermalink