is clear quote thirty percent of quote basis of quote specified energy property ok and for purposes of the cross motions there's no dispute about the basis the government has conceded has in  qualified property here has a cost of two hundred and eighty million dollars ok with the qualified property according to forty three dollars is facility using open loop biomass to produce electricity facility that's a definition of qualified facility that's the definition of the government states over and over that there's a definition of of open loop biomass for selling that conditions the grant on the production of electricity there is no definition of treat the guidance as law it would have to treat the guy he says well that's the only place allocation is mentioned that's the only place qualifying activity or non qualifying activity is mentioned those terms are not in the statute those terms have no relationship to anything in the statute and it's not you know the guidance is not law that's not how administrative law works you can't have an agency that comes out with an informal guidance no tether to the statute and say that this is going to affect forty million dollars worth of a statutory grant where the statutory terms are clear thirty percent of basis in specified energy property ok you know let me just take a step back the big picture here is this west rock did exactly what congress wanted it to do after the recession west rock invested almost three hundred million dollars in a renewable energy facility in reliance on the statute it's clear that says they're going to get thirty percent of their basis in specified energy property that was eighty five million dollars approximately on that list yes or my understanding of the record  wrong i understood that her or a percentage of the steam was used to generate electricity and a percentage went to people know yours that one hundred percent of this was used so i don't know if it goes through the turban generator i don't think that's disputed i also don't think it's relevant all of this listen i don't care whether you think it's wrong ok i want you to answer my that is at  and seventy eight i have in my notes here is one place where that this  you know i would also say that the purpose here as i was starting to say congress's purpose was to incentivize renewable energy projects the steam let's say they say there's no difference in our  view of this between the steam in the energy there's no proper basis to allocate them but even if there were the steam itself is generated by renewable energy it's part of the statutory purpose previously west rock used coal and oil to create steam for this did exactly what congress wanted it invested three hundred million dollars in a renewable energy priscilla and it did so in reliance on this statute in reliance one hundred and eighty five million dollars grant the government says well we'll tell you after five years of litigation how much your grant is the government admits expressly they say they say outpatient is required but they say in their brief that there's no particular allocation method in w e partners there was one allocation method n g o s even was one allocation method this is in the government's brief at i believe four thousand five hundred and forty three dollars so the government's position is we'll tell you after five years of litigation how much your grant is and by the way it's thirty nine million dollars not the eighty five million dollars that you coun on when you made this investment in reliance on the statutory terms thirty percent of the basis that's just not how tax incentives work investors are entitled to to certainty they're entitled to know what is not strictly tax what they're entitled to know what the financial consequences of their three hundred million dollars investment are at the outset and the statute says thirty percent of basis and that's what they're entitled to the arguments that the government makes in the court of federal claims accepted for limiting basis allocating bases are not in the statute there's nothing about limitation there's nothing about conditioning there's nothing about qualifying activity or even one qualifying activity as that's all argument by the government here in their briefs ok and again as i said that is not how administrative law works it's the court in forces th guide the treasury guidance as long as if it went through notice and comment rule making it just is going to invite mischief and a whole range of cases where agencies issue in formal declaration all the time it's not law it's not in the statute it's not a construction of any term in the statute what was assumed was the basis in the record for the determination that contest that incident as a fact matter we did contest that as a fact matter on what basis on the basis that there isn't the basis that look all of the steam runs through the turban and it comes out i started this question questioning by asking about yes your honor let me let me try to further answer a question all of the steam runs through the turban any facility that generates electricity using steam is going to have steam coming out the other side there's a question about what to do with it has to condense so that it can go back into the big to the front of the target you can condense it by putting it in by allow by putting in a big condenser and allowing the remaining energy in the steam to be wasted or you can run it back t facility and use it for other purposes to condense the steam that's what happened here but just say that there's electricity plus steam is double counting because that the steam has already been counted when it goes through the  attendance and this is in the record used oil and gas to create seem to run this facility now they're using biomass that's what congress wanted congress wanted investment it wanted jobs after two thousand and eight it wanted renewable energy facilities that's what it got three hundred million dollars two hundred and eighty six million dollars of a renewable energy facility electricity is made from renewable energy the steam is made from a new level energy and west rock invested that money you know this was also a very minor thing disputed below we say that's but you know that is biomass and i can give you a cite for that when i come back with my remaining time and that allocation is made on b there's something called a checklist an apple or a application checklist so when the national energy lab go in and audit this yes so what happens is when an application comes and then the then it goes to l which is a scientific laboratory body that reviews the substance of the application and in this case the application claimed that one hundred percent of the energy produced was used to generate electricity it was not true but it did its investigation and based on the schematics of how the facility was set up it's a term in that i want to get make sure i get the percentages right that point to two percent of the energy was generated by fossil fuel based on start up in flames they wish ation and then another forty nine point one percent of the fuel it's not eligible for payment if it doesn't produce electricity it is also not eligible for the payment and so when you have a facility that is producing kinetic energy that is producing steam that both powers a generator to produce electricity and the something else you have to allocate now you have to allocate under section forty eight and you have to allocate under one thousand six hundred and three now the statute  in government's view is is plain st of all you have the point language of a statute and then you have the fact that you're supposed to construe credits narrow and so therefore if you're doing something that's not the activity as required by the statute and that is not a then you do not create credit for that in addition to that as i said the section forty five dollars only gives you a credit if you produce electricity so if you produce electorate if you don't produce any electricity then you don't get any credit whatsoever under forty eight dollars forty eight says book because at the same time the congress created the stimulus package congress a wowed taxpayers to claim the basis their their require you to allocate when there is an activity that doesn't meet with the terms of a statute the regulations addressed solar facilities because solar facilities have been in forty eight for decades this is if you're doing something that is both within the confines of what congress deems credible and outside of what congress theme is credible then you have to allocate as between those two activities mr weiner you referred to page a lemon in the appendix yet you read the senate west rock extracts a portion of the steam from the steam turbine generator prior to exhaustion and diverts the steam to the paper mill to be used in its industrial process portion of the even less efficient steam extracted and sent by an outgoing pike to the adjacent paper mill so it sounds to me that what he is saying is clearly consistent with and the turbine is generating electricity then is that the entire facility there to generate electricity no and the diverted steam is simply steam that would otherwise be wasted no your honor that that's that's that's that that part we respectfully disagree with and tell me why tell us the facts the facts on this that and that is so so so that the turbine generator is not is not a single point in time there is a there is a path by which the stream the steam travels all the way through and the generated by virtue of extracting i don't mean to interrupt but i'm going to interrupt and is there any steam that is produced that is not st fed and my understanding is now it all enters the generator and then all of the steam is helping to motivate turbine which is a source of generating electricity right correct but if the the energy that is in that steam is not used to its full capacity to generate electricity  choice or is just a matter of inefficiency oh no that is of the waiver choice because it is extracted at three different points there is a high there is that is steam is high pressure medium pressure in a pressure at all points the steam the steam is still use a bowl to generate electricity and it is extracted and it is diverted to the pipe to the paper mill for industrial purpose which is a non credible activity well congress here is that in the reverend i mean you know it back into the river back into the the boiler and then at a lower point this is the middle and the oak pressure it is then extracted it still is very useful for the there is legitimacy in saying that the one percent who went over the percentages used for electricity and the other forty nine percent was designed to produce a different result and that is the design of the facility and that and that's your argument then is that that ties back into section forty five dollars the three of us the facility is on is designed so that create an incentive when credits aren't creating an incentive to invest in these renewable resources now what congress wasn't doing though wasn't creating a new incentive it was creating a different form by which it had already incentivized for credits and so therefore instead of getting a production credit under forty five dollars which is how much electricity your produce or instead of getting an investment credit under forty eight dollars which would that is designed to be in will of not a it's not a new it's not a subsidy and because then so what's really going on here is they're trying to say look all we've got percent more electricity there were no findings that were ever made on that by the by the lower court with the lower court did was it affirmed the allocation in the treasury award letter of the forty eight two percent i believe it is and fifty two two percent  grant of summary judgment to the government was improper even if allocation is proper because there was no finding that the allocation that led to the award that treasury made was supported by there's just nothing in this in the lower court decision about that but i to go back to what did you challenge as a fact yes we did of course we did yes we there was expert testimony going on the expert report that my friend just quoted from as i said was disputed by our expert in terms of what the effect extract in the scheme was but judge well upon your question i hope we've cleared it up that the scheme goes into the generator but i'm standing by our position here that it's not relevant for the statutory text my friend said a couple of times when i was up here that if the facility produces electricity you can go down the road your problem is we i mean it's a qualified facility if it produces electricity this facility produces electricity there is nothing in any statutory text about conditioning for limiting allocating qualifying activities non qualifying activities there is nothing in any statutory text about conditioning the thirty percent of the basis for the part where does it say that if it doesn't say that in the statute and i you know it doesn't say that in the statute it defines qualified facility as biomass to generate to produce electricity that's what this does there's another subsection that says a facility using solar to produce electricity is a qualified facility there's another subsection hundred million dollars was invested here in a renewable energy facility it produces electricity it meets the statutory terms and the only place you will find anything about allocation is in the treasury guidance which is not law it's not law it's an agency's informal guidance not that there's no explanation of how it relates to the to the statutory text there's no explanation of what a qualified or unqualified facility is these are all