To amend the Internal Revenue Code of 1986 to provide for a transferable credit against the income tax for producing energy from waste coal.

Summary: Environmental Restoration Act of 2003 - Amends the Internal Revenue Code to establish a waste coal energy production per ton credit equal to $1.50 per million Btu of heat input utilized by the taxpayer to produce energy in an eligible facility from qualified waste coal during the 10-year period beginning on the date the facility was originally placed in service (or, if later, the date of the enactment of this section). Permits transfer of the credit through sale and repurchase agreements.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Environmental Restoration Act of 
2003''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds the following:
            (1) Coal mining has been an important part of America's 
        industrial heritage for over 150 years. As coal is removed from 
        underground mines, a large amount of other materials 
        accompanies the coal to the surface. This substance, known as 
        gob, contains a mixture of clay, rocks, soil, minerals and 
        other raw materials. The gob piles contain millions of cubic 
        feet of material known to contribute to acid mine drainage.
            (2) The mountains of gob contain large amounts of potential 
        energy that can be recycled to create new sources of power. The 
        technology to use the gob pile materials as an efficient 
        alternative energy source has been developed over the past 15 
        years. However, the incentive to invest in the technology has 
        not been pursued due to the high capitalization and operating 
        costs.
            (3) Developing alternate energy sources reduces energy 
        costs, reduces dependencies on foreign oil, and improves the 
        competitiveness of American industry. Increasing energy 
        demands, and over reliance on limited sources of energy, will 
        result in higher prices for homeowners and industry. Higher 
        production costs hurt American jobs, overburdens industry, and 
        stifles economic growth. The development of alternate energy 
        sources will result in lower prices, a cleaner environment, new 
        manufacturing, and more jobs.
    (b) Purpose.--The purpose of this Act is to encourage and create 
incentives for alternate fuel sources to meet increasing demand for 
homeowners and industries.

SEC. 3. ENERGY PRODUCED FROM WASTE COAL.

    (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 inserting after section 45F the following new 
section:

``SEC. 45G. ENERGY PRODUCED FROM WASTE COAL.

    ``(a) General Rule.--For purposes of section 38, the waste coal 
energy production per ton credit for any taxable year is an amount 
equal to $1.50 per million Btu of heat input utilized by the taxpayer 
to produce energy in an eligible facility from qualified waste coal 
during the 10-year period beginning on the date the facility was 
originally placed in service (or, if later, the date of the enactment 
of this section).
    ``(b) Credit Reduced for Grants.--The amount of the credit 
determined under subsection (a) with respect to any project for any 
taxable year shall be reduced by the amount which is the product of the 
amount so determined for such year and a fraction--
            ``(1) the numerator of which is the sum, for the taxable 
        year and all prior taxable years, of--
                    ``(A) grants provided by the United States, a 
                State, or a political subdivision of a State for use in 
                connection with the project, and
                    ``(B) the amount of any other credit allowable with 
                respect to any property which is part of the project, 
                and
            ``(2) the denominator of which is the aggregate amount of 
        additions to the capital account for the project for the 
        taxable year and all prior taxable years. The amounts under the 
        preceding sentence for any taxable year shall be determined as 
        of the close of the taxable year.
    ``(c) Qualified Waste Coal.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified waste coal' means coal certified by the Secretary to 
        be waste (as defined in paragraphs (1) through (6) of section 
        292.202 of title 18, Code of Federal Regulations (as in effect 
        on the date of the enactment of this section)).
            ``(2) Certification process.--For purposes of paragraph 
        (1), coal may not be certified as waste coal unless application 
        therefor is submitted before the end of the 6-month period 
        beginning on the date of the enactment of this section to the 
        Secretary.
    ``(d) Eligible Facility.--For purposes of this section--
            ``(1) In general.--The term `eligible facility' means a 
        facility--
                    ``(A) whose heat input is not less than 75 percent 
                from qualified waste coal, and
                    ``(B) which, as of the date on which the Secretary 
                determines by private letter ruling that the taxpayer 
                is eligible for the allowance of the credit under this 
                section, has under its control, by ownership or lease, 
                not less than a 15-year supply of qualified waste coal, 
                and
                    ``(C) which is placed in service not more than 42 
                months after the month in which the taxpayer receives 
                the private letter ruling referred to in subparagraph 
                (B).
            ``(2) Private letter ruling.--For purposes of paragraph 
        (1)(B), a private letter ruling shall not be taken into account 
        unless the request therefor is submitted to the Secretary 
        within 30 days after the date on which the taxpayer receives 
        the certification required by subsection (b).
    ``(e) Other Definition and Applicable Rules.--For purposes of this 
section--
            ``(1) Heat content.--Heat content shall be determined on an 
        `as received' basis.
            ``(2) Applicable rules.--Rules similar to the rules of 
        section 45(d) (other than paragraph (2)) shall apply.
            ``(3) Force majeure.--Performance time requirements 
        specified in this section may be suspended by the Secretary for 
        reasons beyond the control of the taxpayer when the Secretary 
        is so requested to extend deadlines by the taxpayer as long as 
        the taxpayer makes such request within 72 hours of determining 
        such event has occurred. Such events include Acts of God and 
        third party actions causing delay.
    ``(f) Special Annual Application.--Notwithstanding any other 
provision of this title, no amount shall be allowed as a credit for a 
taxable year under subsection (a) until after the taxpayer submits an 
application for such credit to the Secretary.
    ``(g) Credit May Be Transferred.--Nothing in any law or rule of law 
shall be construed to limit the transferability of the credit allowed 
by this section through sale and repurchase agreements.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of such Code (relating to current year business credit) is 
amended by striking ``plus'' at the end of paragraph (14), by striking 
the period at the end of paragraph (15) and inserting ``, plus'', and 
by adding at the end thereof the following new paragraph:
            ``(16) the waste coal energy production per ton credit 
        determined under section 45G.''.
    (c) Denial of Double Benefit.--Section 280C of such Code (relating 
to certain expenses for which credits are allowable) is amended by 
adding at the end thereof the following new subsection:
    ``(d) Waste Coal Energy Production Per Ton Credit.--No deduction 
shall be allowed for that portion of expenses incurred by the taxpayer 
to purchase qualified waste coal (excluding costs of transportation, 
handling, and preparation that may be included in the purchase price) 
otherwise allowable as a deduction for the taxable year which is equal 
to the amount of the credit determined for such taxable year under 
section 45G.''.
    (d) Limitation on Carryback.--Subsection (d) of section 39 of such 
Code is amended by adding at the end the following new paragraph:
            ``(14) No carryback of waste coal energy production per ton 
        credit before effective date.--No portion of the unused 
        business credit for any taxable year which is attributable to 
        the credit determined under section 45G may be carried back to 
        any taxable year ending before January 1, 2004.''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45F the following new 
item:

``Sec. 45G. Energy produced from waste coal.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2003.