S 155 ISCommentsClose CommentsPermalink

To promote coal-to-liquid fuel activities.CommentsClose CommentsPermalink

January 4, 2007

Mr. BUNNING (for himself, Mr. OBAMA, Mr. LUGAR, Mr. PRYOR, Ms. MURKOWSKI, Mr. BOND, Mr. THOMAS, Mr. MARTINEZ, Mr. ENZI, Ms. LANDRIEU, and Mr. CRAIG) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To promote coal-to-liquid fuel activities.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.

This Act may be cited as the `Coal-to-Liquid Fuel Promotion Act of 2007'.CommentsClose CommentsPermalink

TITLE I--COAL-TO-LIQUID FUEL ACTIVITIES

SEC. 101. DEFINITIONS.

In this title:CommentsClose CommentsPermalink





(1) COAL-TO-LIQUID- The term `coal-to-liquid' means--CommentsClose CommentsPermalink





(A) with respect to a process or technology, the use of a feedstock, the majority of which is the coal resources of the United States, using the class of reactions known as Fischer-Tropsch, to produce synthetic fuel suitable for transportation; andCommentsClose CommentsPermalink





(B) with respect to a facility, the portion of a facility related to producing the inputs to the Fischer-Tropsch process, the Fischer-Tropsch process, finished fuel production, or the capture, transportation, or sequestration of byproducts of the use of a feedstock that is primarily domestic coal at the Fischer-Tropsch facility, including carbon emissions.CommentsClose CommentsPermalink





(2) SECRETARY- The term `Secretary' means the Secretary of Energy.CommentsClose CommentsPermalink

SEC. 102. COAL-TO-LIQUID FUEL LOAN GUARANTEE PROGRAM.

(a) Eligible Projects- Section 1703(b) of the Energy Policy Act of 2005 (42 U.S.C. 16513(b)) is amended by adding at the end the following:CommentsClose CommentsPermalink





`(11) Large-scale coal-to-liquid facilities (as defined in section 101 of the Coal-to-Liquid Fuel Promotion Act of 2007) that use a feedstock, the majority of which is the coal resources of the United States, to produce not less than 10,000 barrels a day of liquid transportation fuel.'.CommentsClose CommentsPermalink





(b) Authorization of Appropriations- Section 1704 of the Energy Policy Act of 2005 (42 U.S.C. 16514) is amended by adding at the end the following:CommentsClose CommentsPermalink





`(c) Coal-to-Liquid Projects-CommentsClose CommentsPermalink





`(1) IN GENERAL- There are authorized to be appropriated such sums as are necessary to provide the cost of guarantees for projects involving large-scale coal-to-liquid facilities under section 1703(b)(11).CommentsClose CommentsPermalink





`(2) ALTERNATIVE FUNDING- If no appropriations are made available under paragraph (1), an eligible applicant may elect to provide payment to the Secretary, to be delivered if and at the time the application is approved, in the amount of the estimated cost of the loan guarantee to the Federal Government, as determined by the Secretary.CommentsClose CommentsPermalink





`(3) LIMITATIONS-CommentsClose CommentsPermalink





`(A) IN GENERAL- No loan guarantees shall be provided under this title for projects described in paragraph (1) after (as determined by the Secretary)--CommentsClose CommentsPermalink





`(i) the tenth such loan guarantee is issued under this title; orCommentsClose CommentsPermalink





`(ii) production capacity covered by such loan guarantees reaches 100,000 barrels per day of coal-to-liquid fuel.CommentsClose CommentsPermalink





`(B) INDIVIDUAL PROJECTS-CommentsClose CommentsPermalink





`(i) IN GENERAL- A loan guarantee may be provided under this title for any large-scale coal-to-liquid facility described in paragraph (1) that produces no more than 20,000 barrels of coal-to-liquid fuel per day.CommentsClose CommentsPermalink





`(ii) NON-FEDERAL FUNDING REQUIREMENT- To be eligible for a loan guarantee under this title, a large-scale coal-to-liquid facility described in paragraph (1) that produces more than 20,000 barrels per day of coal-to-liquid fuel shall be eligible to receive a loan guarantee for the proportion of the cost of the facility that represents 20,000 barrels of coal-to-liquid fuel per day of production.CommentsClose CommentsPermalink





`(4) REQUIREMENTS-CommentsClose CommentsPermalink





`(A) GUIDELINES- Not later than 180 days after the date of enactment of this subsection, the Secretary shall publish guidelines for the coal-to-liquids loan guarantee application process.CommentsClose CommentsPermalink





`(B) APPLICATIONS- Not later than 1 year after the date of enactment of this subsection, the Secretary shall begin to accept applications for coal-to-liquid loan guarantees under this subsection.CommentsClose CommentsPermalink





`(C) DEADLINE- Not later than 1 year from the date of acceptance of an application under subparagraph (B), the Secretary shall evaluate the application and make final determinations under this subsection.CommentsClose CommentsPermalink





`(5) REPORTS TO CONGRESS- The Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the status of the program under this subsection not later than each of--CommentsClose CommentsPermalink





`(A) 180 days after the date of enactment of this subsection;CommentsClose CommentsPermalink





`(B) 1 year after the date of enactment of this subsection; andCommentsClose CommentsPermalink





`(C) the dates on which the Secretary approves the first and fifth applications for coal-to-liquid loan guarantees under this subsection.'.CommentsClose CommentsPermalink

SEC. 103. COAL-TO-LIQUID FACILITIES LOAN PROGRAM.

(a) Definition of Eligible Recipient- In this section, the term `eligible recipient' means an individual, organization, or other entity that owns, operates, or plans to construct a coal-to-liquid facility that will produce at least 10,000 barrels per day of coal-to-liquid fuel.CommentsClose CommentsPermalink





(b) Establishment- The Secretary shall establish a program under which the Secretary shall provide loans, in a total amount not to exceed $20,000,000, for use by eligible recipients to pay the Federal share of the cost of obtaining any services necessary for the planning, permitting, and construction of a coal-to-liquid facility.CommentsClose CommentsPermalink





(c) Application- To be eligible to receive a loan under subsection (b), the eligible recipient shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require.CommentsClose CommentsPermalink





(d) Non-Federal Match- To be eligible to receive a loan under this section, an eligible recipient shall use non-Federal funds to provide a dollar-for-dollar match of the amount of the loan.CommentsClose CommentsPermalink





(e) Repayment of Loan-CommentsClose CommentsPermalink





(1) IN GENERAL- To be eligible to receive a loan under this section, an eligible recipient shall agree to repay the original amount of the loan to the Secretary not later than 5 years after the date of the receipt of the loan.CommentsClose CommentsPermalink





(2) SOURCE OF FUNDS- Repayment of a loan under paragraph (1) may be made from any financing or assistance received for the construction of a coal-to-liquid facility described in subsection (a), including a loan guarantee provided under section 1703(b)(11) of the Energy Policy Act of 2005 (42 U.S.C. 16513(b)(11)).CommentsClose CommentsPermalink





(f) Requirements-CommentsClose CommentsPermalink





(1) GUIDELINES- Not later than 180 days after the date of enactment of this Act, the Secretary shall publish guidelines for the coal-to-liquids loan application process.CommentsClose CommentsPermalink





(2) APPLICATIONS- Not later than 1 year after the date of enactment of this Act, the Secretary shall begin to accept applications for coal-to-liquid loans under this section.CommentsClose CommentsPermalink





(g) Reports to Congress- Not later than each of 180 days and 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the status of the program under this section.CommentsClose CommentsPermalink





(h) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $200,000,000, to remain available until expended.CommentsClose CommentsPermalink

SEC. 104. LOCATION OF COAL-TO-LIQUID MANUFACTURING FACILITIES.

The Secretary, in coordination with the head of any affected agency, shall promulgate such regulations as the Secretary determines to be necessary to support the development on Federal land (including land of the Department of Energy, military bases, and military installations closed or realigned under the defense base closure and realignment) of coal-to-liquid manufacturing facilities and associated infrastructure, including the capture, transportation, or sequestration of carbon dioxide.CommentsClose CommentsPermalink

SEC. 105. STRATEGIC PETROLEUM RESERVE.

(a) Development, Operation, and Maintenance of Reserve- Section 159 of the Energy Policy and Conservation Act (42 U.S.C. 6239) is amended--CommentsClose CommentsPermalink





(1) by redesignating subsections (f), (g), (j), (k), and (l) as subsections (a), (b), (e), (f), and (g), respectively; andCommentsClose CommentsPermalink





(2) by inserting after subsection (b) (as redesignated by paragraph (1)) the following:CommentsClose CommentsPermalink





`(c) Study of Maintaining Coal-to-Liquid Products in Reserve- Not later than 1 year after the date of enactment of the Coal-to-Liquid Fuel Promotion Act of 2007, the Secretary and the Secretary of Defense shall--CommentsClose CommentsPermalink





`(1) conduct a study of the feasibility and suitability of maintaining coal-to-liquid products in the Reserve; andCommentsClose CommentsPermalink





`(2) submit to the Committee on Energy and Natural Resources and the Committee on Armed Services of the Senate and the Committee on Energy and Commerce and the Committee on Armed Services of the House of Representatives a report describing the results of the study.CommentsClose CommentsPermalink





`(d) Construction of Storage Facilities- As soon as practicable after the date of enactment of the Coal-to-Liquid Fuel Promotion Act of 2007, the Secretary may construct 1 or more storage facilities in the vicinity of pipeline infrastructure and at least 1 military base.'.CommentsClose CommentsPermalink





(b) Petroleum Products for Storage in Reserve- Section 160 of the Energy Policy and Conservation Act (42 U.S.C. 6240) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in paragraph (1), by inserting a semicolon at the end;CommentsClose CommentsPermalink





(B) in paragraph (2), by striking `and' at the end;CommentsClose CommentsPermalink





(C) in paragraph (3), by striking the period at the end and inserting `; and'; andCommentsClose CommentsPermalink





(D) by adding at the end the following:CommentsClose CommentsPermalink





`(4) coal-to-liquid products (as defined in section 101 of the Coal-to-Liquid Fuel Promotion Act of 2007), as the Secretary determines to be appropriate, in a quantity not to exceed 20 percent of the total quantity of petroleum and petroleum products in the Reserve.';CommentsClose CommentsPermalink





(2) in subsection (b), by redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively; andCommentsClose CommentsPermalink





(3) by redesignating subsections (f) and (h) as subsections (d) and (e), respectively.CommentsClose CommentsPermalink





(c) Conforming Amendments- Section 167 of the Energy Policy and Conservation Act (42 U.S.C. 6247) is amended--CommentsClose CommentsPermalink





(1) in subsection (b)--CommentsClose CommentsPermalink





(A) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; andCommentsClose CommentsPermalink





(B) in paragraph (2) (as redesignated by subparagraph (A)), by striking `section 160(f)' and inserting `section 160(e)'; andCommentsClose CommentsPermalink





(2) in subsection (d), in the matter preceding paragraph (1), by striking `section 160(f)' and inserting `section 160(e)'.CommentsClose CommentsPermalink

SEC. 106. AUTHORIZATION TO CONDUCT RESEARCH, DEVELOPMENT, TESTING, AND EVALUATION OF ASSURED DOMESTIC FUELS.

Of the amount authorized to be appropriated for the Air Force for research, development, testing, and evaluation, $10,000,000 may be made available for the Air Force Research Laboratory to continue support efforts to test, qualify, and procure synthetic fuels developed from coal for aviation jet use.CommentsClose CommentsPermalink

SEC. 107. COAL-TO-LIQUID LONG-TERM FUEL PROCUREMENT AND DEPARTMENT OF DEFENSE DEVELOPMENT.

Section 2398a of title 10, United States Code is amended--CommentsClose CommentsPermalink





(1) in subsection (b)--CommentsClose CommentsPermalink





(A) by striking `The Secretary' and inserting the following:CommentsClose CommentsPermalink





`(1) IN GENERAL- The Secretary'; andCommentsClose CommentsPermalink





(B) by adding at the end the following:CommentsClose CommentsPermalink





`(2) COAL-TO-LIQUID PRODUCTION FACILITIES-CommentsClose CommentsPermalink





`(A) IN GENERAL- The Secretary of Defense may enter into contracts or other agreements with private companies or other entities to develop and operate coal-to-liquid facilities (as defined in section 101 of the Coal-to-Liquid Fuel Promotion Act of 2007) on or near military installations.CommentsClose CommentsPermalink





`(B) CONSIDERATIONS- In entering into contracts and other agreements under subparagraph (A), the Secretary shall consider land availability, testing opportunities, and proximity to raw materials.';CommentsClose CommentsPermalink





(2) in subsection (d)--CommentsClose CommentsPermalink





(A) by striking `Subject to applicable provisions of law, any' and inserting `Any'; andCommentsClose CommentsPermalink





(B) by striking `1 or more years' and inserting `up to 25 years'; andCommentsClose CommentsPermalink





(3) by adding at the end the following:CommentsClose CommentsPermalink





`(f) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.'.CommentsClose CommentsPermalink

SEC. 108. REPORT ON EMISSIONS OF FISCHER-TROPSCH PRODUCTS USED AS TRANSPORTATION FUELS.

(a) In General- In cooperation with the Administrator of the Environmental Protection Agency, the Secretary of Defense, the Administrator of the Federal Aviation Administration, and the Secretary of Health and Human Services, the Secretary shall--CommentsClose CommentsPermalink





(1) carry out a research and demonstration program to evaluate the emissions of the use of Fischer-Tropsch fuel for transportation, including diesel and jet fuel;CommentsClose CommentsPermalink





(2) evaluate the effect of using Fischer-Tropsch transportation fuel on land and air engine exhaust emissions; andCommentsClose CommentsPermalink





(3) in accordance with subsection (e), submit to Congress a report on the effect on air quality and public health of using Fischer-Tropsch fuel in the transportation sector.CommentsClose CommentsPermalink





(b) Guidance and Technical Support- The Secretary shall issue any guidance or technical support documents necessary to facilitate the effective use of Fischer-Tropsch fuel and blends under this section.CommentsClose CommentsPermalink





(c) Facilities- For the purpose of evaluating the emissions of Fischer-Tropsch transportation fuels, the Secretary shall--CommentsClose CommentsPermalink





(1) support the use and capital modification of existing facilities and the construction of new facilities at the research centers designated in section 417 of the Energy Policy Act of 2005 (42 U.S.C. 15977); andCommentsClose CommentsPermalink





(2) engage those research centers in the evaluation and preparation of the report required under subsection (a)(3).CommentsClose CommentsPermalink





(d) Requirements- The program described in subsection (a)(1) shall consider--CommentsClose CommentsPermalink





(1) the use of neat (100 percent) Fischer-Tropsch fuel and blends of Fischer-Tropsch fuels with conventional crude oil-derived fuel for heavy-duty and light-duty diesel engines and the aviation sector; andCommentsClose CommentsPermalink





(2) the production costs associated with domestic production of those fuels and prices for consumers.CommentsClose CommentsPermalink





(e) Reports- The Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives--CommentsClose CommentsPermalink





(1) not later than 180 days after the date of enactment of this Act, an interim report on actions taken to carry out this section; andCommentsClose CommentsPermalink





(2) not later than 1 year after the date of enactment of this Act, a final report on actions taken to carry out this section.CommentsClose CommentsPermalink





(f) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.CommentsClose CommentsPermalink

TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

SEC. 201. CREDIT FOR INVESTMENT IN COAL-TO-LIQUID FUELS PROJECTS.

(a) In General- Section 46 of the Internal Revenue Code of 1986 (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 coal-to-liquid fuels project credit.'.CommentsClose CommentsPermalink





(b) Amount of Credit- 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 COAL-TO-LIQUID FUELS PROJECT CREDIT.

`(a) In General- For purposes of section 46, the qualifying coal-to-liquid fuels project credit for any taxable year is an amount equal to 20 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 of property placed in service by the taxpayer during such taxable year which is part of a qualifying coal-to-liquid fuels project--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) APPLICABLE RULES- For purposes of this section, rules similar to the rules of subsection (a)(4) and (b) of section 48 shall apply.CommentsClose CommentsPermalink





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





`(1) QUALIFYING COAL-TO-LIQUID FUELS PROJECT- The term `qualifying coal-to-liquid fuels project' means any domestic project which--CommentsClose CommentsPermalink





`(A) employs the class of reactions known as Fischer-Tropsch to produce at least 10,000 barrels per day of transportation grade liquid fuels from a feedstock that is primarily domestic coal (including any property which allows for the capture, transportation, or sequestration of by-products resulting from such process, including carbon emissions), andCommentsClose CommentsPermalink





`(B) any portion of the qualified investment in which is certified under the qualifying coal-to-liquid program as eligible for credit under this section in an amount (not to exceed $200,000,000) determined by the Secretary.CommentsClose CommentsPermalink





`(2) COAL- The term `coal' means any carbonized or semicarbonized matter, including peat.CommentsClose CommentsPermalink





`(d) Qualifying Coal-to-Liquid Fuels Project Program-CommentsClose CommentsPermalink





`(1) IN GENERAL- The Secretary, in consultation with the Secretary of Energy, shall establish a qualifying coal-to-liquid fuels project program to consider and award certifications for qualified investment eligible for credits under this section to 10 qualifying coal-to-liquid fuels project sponsors under this section. The total qualified investment which may be awarded eligibility for credit under the program shall not exceed $2,000,000,000.CommentsClose CommentsPermalink





`(2) PERIOD OF ISSUANCE- A certificate of eligibility under paragraph (1) may be issued only during the 10-fiscal year period beginning on October 1, 2007.CommentsClose CommentsPermalink





`(3) SELECTION CRITERIA- The Secretary shall not make a competitive certification award for qualified investment for credit eligibility under this section unless the recipient has documented to the satisfaction of the Secretary that--CommentsClose CommentsPermalink





`(A) the proposal of the award recipient is financially viable,CommentsClose CommentsPermalink





`(B) the recipient will provide sufficient information to the Secretary for the Secretary to ensure that the qualified investment is spent efficiently and effectively,CommentsClose CommentsPermalink





`(C) the fuels identified with respect to the gasification technology for such project will comprise at least 90 percent of the fuels required by the project for the production of transportation grade liquid fuels,CommentsClose CommentsPermalink





`(D) the award recipient's project team is competent in the planning and construction of coal gasification facilities and familiar with operation of the Fischer-Tropsch process, with preference given to those recipients with experience which demonstrates successful and reliable operations of such process, andCommentsClose CommentsPermalink





`(E) the award recipient has met other criteria established and published by the Secretary.CommentsClose CommentsPermalink





`(e) Denial of Double Benefit- No deduction or other credit shall be allowed with respect to the basis of any property taken into account in determining the credit allowed under this section.'.CommentsClose CommentsPermalink





(c) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986 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 coal-to-liquid fuels project under section 48C.'.CommentsClose CommentsPermalink





(2) 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





`48C. Qualifying coal-to-liquid fuels project credit.'.CommentsClose CommentsPermalink





(d) 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. 202. TEMPORARY EXPENSING FOR EQUIPMENT USED IN COAL-TO-LIQUID FUELS PROCESS.

(a) In General- Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 179D the following new section:CommentsClose CommentsPermalink

`SEC. 179E. ELECTION TO EXPENSE CERTAIN COAL-TO-LIQUID FUELS FACILITIES.

`(a) Treatment as Expenses- A taxpayer may elect to treat the cost of any qualified coal-to-liquid fuels process property as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the expense is incurred.CommentsClose CommentsPermalink





`(b) Election-CommentsClose CommentsPermalink





`(1) IN GENERAL- An election under this section for any taxable year shall be made on the taxpayer's return of the tax imposed by this chapter for the taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe.CommentsClose CommentsPermalink





`(2) ELECTION IRREVOCABLE- Any election made under this section may not be revoked except with the consent of the Secretary.CommentsClose CommentsPermalink





`(c) Qualified Coal-to-Liquid Fuels Process Property- The term `qualified coal-to-liquid fuels process property' means any property located in the United States--CommentsClose CommentsPermalink





`(1) which employs the Fischer-Tropsch process to produce transportation grade liquid fuels from a feedstock that is primarily domestic coal (including any property which allows for the capture, transportation, or sequestration of by-products resulting from such process, including carbon emissions),CommentsClose CommentsPermalink





`(2) the original use of which commences with the taxpayer,CommentsClose CommentsPermalink





`(3) the construction of which--CommentsClose CommentsPermalink





`(A) except as provided in subparagraph (B), is subject to a binding construction contract entered into after the date of the enactment of this section and before January 1, 2011, but only if there was no written binding construction contract entered into on or before such date of enactment, orCommentsClose CommentsPermalink





`(B) in the case of self-constructed property, began after the date of the enactment of this section and before January 1, 2011, andCommentsClose CommentsPermalink





`(4) which is placed in service by the taxpayer after the date of the enactment of this section and before January 1, 2016.CommentsClose CommentsPermalink





`(d) Election to Allocate Deduction to Cooperative Owner- If--CommentsClose CommentsPermalink





`(1) a taxpayer to which subsection (a) applies is an organization to which part I of subchapter T applies, andCommentsClose CommentsPermalink





`(2) one or more persons directly holding an ownership interest in the taxpayer are organizations to which part I of subchapter T apply,CommentsClose CommentsPermalink





the taxpayer may elect to allocate all or a portion of the deduction allowable under subsection (a) to such persons. Such allocation shall be equal to the person's ratable share of the total amount allocated, determined on the basis of the person's ownership interest in the taxpayer. The taxable income of the taxpayer shall not be reduced under section 1382 by reason of any amount to which the preceding sentence applies.CommentsClose CommentsPermalink





`(e) Basis Reduction-CommentsClose CommentsPermalink





`(1) IN GENERAL- For purposes of this title, if a deduction is allowed under this section with respect to any qualified coal-to-liquid fuels process property, the basis of such property shall be reduced by the amount of the deduction so allowed.CommentsClose CommentsPermalink





`(2) ORDINARY INCOME RECAPTURE- For purposes of section 1245, the amount of the deduction allowable under subsection (a) with respect to any property which is of a character subject to the allowance for depreciation shall be treated as a deduction allowed for depreciation under section 167.CommentsClose CommentsPermalink





`(f) Application With Other Deductions and Credits-CommentsClose CommentsPermalink





`(1) OTHER DEDUCTIONS- No deduction shall be allowed under any other provision of this chapter with respect to any expenditure with respect to which a deduction is allowed under subsection (a) to the taxpayer.CommentsClose CommentsPermalink





`(2) CREDITS- No credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a).CommentsClose CommentsPermalink





`(g) Reporting- No deduction shall be allowed under subsection (a) to any taxpayer for any taxable year unless such taxpayer files with the Secretary a report containing such information with respect to the operation of the property of the taxpayer as the Secretary shall require.'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 1016(a) of the Internal Revenue Code of 1986 is amended by striking `and' at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting `, and', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(38) to the extent provided in section 179E(e)(1).'.CommentsClose CommentsPermalink





(2) Section 1245(a) of such Code is amended by inserting `179E,' after `179D,' both places it appears in paragraphs (2)(C) and (3)(C).CommentsClose CommentsPermalink





(3) Section 263(a)(1) of such Code is amended by striking `or' at the end of subparagraph (J), by striking the period at the end of subparagraph (K) and inserting `, or', and by inserting after subparagraph (K) the following new subparagraph:CommentsClose CommentsPermalink





`(L) expenditures for which a deduction is allowed under section 179E.'.CommentsClose CommentsPermalink





(4) Section 312(k)(3)(B) of such Code is amended by striking `or 179D' each place it appears in the heading and text and inserting `179D, or 179E'.CommentsClose CommentsPermalink





(5) The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 179D the following new item:CommentsClose CommentsPermalink





`Sec. 179E. Election to expense certain coal-to-liquid fuels facilities.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to properties placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 203. EXTENSION OF ALTERNATIVE FUEL CREDIT FOR FUEL DERIVED FROM COAL THROUGH THE FISCHER-TROPSCH PROCESS.

(a) Alternative Fuel Credit- Paragraph (4) of section 6426(d) of the Internal Revenue Code of 1986 is amended to read as follows:CommentsClose CommentsPermalink





`(4) TERMINATION- This subsection shall not apply to--CommentsClose CommentsPermalink





`(A) any sale or use involving liquid fuel derived from a feedstock that is primarily domestic coal (including peat) through the Fischer-Tropsch process for any period after September 30, 2020,CommentsClose CommentsPermalink





`(B) any sale or use involving liquified hydrogen for any period after September 30, 2014, andCommentsClose CommentsPermalink





`(C) any other sale or use for any period after September 30, 2009.'.CommentsClose CommentsPermalink





(b) Payments-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (5) of section 6427(e) of the Internal Revenue Code of 1986 is amended by striking `and' and the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting `, and', and by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





`(E) any alternative fuel or alternative fuel mixture (as so defined) involving liquid fuel derived from coal (including peat) through the Fischer-Tropsch process sold or used after September 30, 2020.'.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Section 6427(e)(5)(C) of such Code is amended by striking `subparagraph (D)' and inserting `subparagraphs (D) and (E)'.CommentsClose CommentsPermalink

SEC. 204. MODIFICATIONS TO ENHANCED OIL RECOVERY CREDIT.

(a) Enhanced Credit for Carbon Dioxide Injections- Section 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(f) Enhanced Credit for Projects Using Qualified Carbon Dioxide-CommentsClose CommentsPermalink





`(1) IN GENERAL- For purposes of this section--CommentsClose CommentsPermalink





`(A) the term `qualified project' includes a project described in paragraph (2), andCommentsClose CommentsPermalink





`(B) in the case of a project described in paragraph (2), subsection (a) shall be applied by substituting `50 percent' for `15 percent'.CommentsClose CommentsPermalink





`(2) PROJECTS DESCRIBED- A project is described in this paragraph if it begins or is substantially expanded after December 31, 2007, andCommentsClose CommentsPermalink





`(A) uses qualified carbon dioxide in an enhanced oil, natural gas, or coalbed methane recovery method, which involves flooding or injection, orCommentsClose CommentsPermalink





`(B) enables the capture or sequestration of qualified carbon dioxide.CommentsClose CommentsPermalink





`(3) DEFINITIONS- For purposes of this subsection--CommentsClose CommentsPermalink





`(A) ENHANCED OIL RECOVERY- The term `enhanced oil recovery' means recovery of oil by injecting or flooding with qualified carbon dioxide.CommentsClose CommentsPermalink





`(B) ENHANCED NATURAL GAS RECOVERY- The term `enhanced natural gas recovery' means recovery of natural gas by injecting or flooding with qualified carbon dioxide.CommentsClose CommentsPermalink





`(C) ENHANCED COALBED METHANE RECOVERY- The term `enhanced coalbed methane recovery' means recovery of coalbed methane by injecting or flooding with qualified carbon dioxide.CommentsClose CommentsPermalink





`(D) QUALIFIED CARBON DIOXIDE- The term `qualified carbon dioxide' means carbon dioxide which is produced from the gasification and subsequent refinement of a feedstock which is primarily domestic coal, at a facility which produces coal-to-liquid fuel.CommentsClose CommentsPermalink





`(E) CAPTURE OR SEQUESTRATION- The term `capture or sequestration' means any equipment or facility necessary to--CommentsClose CommentsPermalink





`(i) capture or separate qualified carbon dioxide from other emissions,CommentsClose CommentsPermalink





`(ii) transport qualified carbon dioxide, orCommentsClose CommentsPermalink





`(iii) process and use qualified carbon dioxide in a qualified project.CommentsClose CommentsPermalink





`(4) TERMINATION- This subsection shall not apply to costs paid or incurred for any qualified project after December 31, 2020.'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 43 of the Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(A) by striking `enhanced oil recovery credit' in subsection (a) and inserting `enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit',CommentsClose CommentsPermalink





(B) by striking `qualified enhanced oil recovery costs' each place it appears and inserting `qualified costs',CommentsClose CommentsPermalink





(C) by striking `qualified enhanced oil recovery project' each place it appears and inserting `qualified project', andCommentsClose CommentsPermalink





(D) by striking the heading and inserting:CommentsClose CommentsPermalink

`SEC. 43. ENHANCED OIL, NATURAL GAS, AND COALBED METHANE RECOVERY, AND CAPTURE AND SEQUESTRATION CREDIT.'.

(2) The item in the table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code relating to section 43 is amended to read as follows:CommentsClose CommentsPermalink





`Sec. 43. Enhanced oil. natural gas, and coalbed methane recovery, and capture and sequestration credit.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to costs paid or incurred in taxable years ending after December 31, 2007.CommentsClose CommentsPermalink

SEC. 205. ALLOWANCE OF ENHANCED OIL, NATURAL GAS, AND COALBED METHANE RECOVERY, AND CAPTURE AND SEQUESTRATION CREDIT AGAINST THE ALTERNATIVE MINIMUM TAX.

(a) In General- Subsection (c) of section 38 of the Internal Revenue Code of 1986 (relating to limitation based on amount of tax) is amended by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph:CommentsClose CommentsPermalink





`(4) SPECIAL RULES FOR ENHANCED OIL, NATURAL GAS, AND COALBED METHANE RECOVERY, AND CAPTURE AND SEQUESTRATION CREDIT- In the case of the enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit determined under section 43--CommentsClose CommentsPermalink





`(A) this section and section 39 shall be applied separately with respect to such credit, andCommentsClose CommentsPermalink





`(B) in applying paragraph (1) to such credit--CommentsClose CommentsPermalink





`(i) the tentative minimum tax shall be treated as being zero, andCommentsClose CommentsPermalink





`(ii) the limitation under paragraph (1) (as modified by clause (i)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit and the specified credits).'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Section 38(c)(2)(A)(ii)(II) of such Code is amended by inserting `the enhanced oil, natural gas, and coalbed methane recovery, and capture and sequestration credit,' after `employee credit,'.CommentsClose CommentsPermalink





(2) Section 38(c)(3)(A)(ii)(II) of such Code is amended by inserting `, the enhanced oil, natural gas, coalbed methane recovery, capture and sequestration credit,' after `employee credit'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years ending after December 31, 2007.CommentsClose CommentsPermalink