I 

108TH CONGRESS 

1ST SESSION H. R. 3531

To amend the Internal Revenue Code of 1986 to provide for a transferable 

credit against the income tax for producing energy from waste coal. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 19, 2003

Mr. MURPHY (for himself, Mr. MURTHA, and Mr. ENGLISH) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to provide 

for a transferable credit against the income tax for producing energy from waste coal.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Environmental Res5 toration Act of 2003’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress finds the following: 

8 (1) Coal mining has been an important part of 

9 America’s industrial heritage for over 150 years. As 

10 coal is removed from underground mines, a large 
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1 amount of other materials accompanies the coal to 

2 the surface. This substance, known as gob, contains 

3 a mixture of clay, rocks, soil, minerals and other raw 

4 materials. The gob piles contain millions of cubic 

5 feet of material known to contribute to acid mine 

6 drainage. 

7 (2) The mountains of gob contain large 

8 amounts of potential energy that can be recycled to 

9 create new sources of power. The technology to use 

10 the gob pile materials as an efficient alternative en11 ergy source has been developed over the past 15 

12 years. However, the incentive to invest in the tech13 nology has not been pursued due to the high capital14 ization and operating costs. 

15 (3) Developing alternate energy sources reduces 

16 energy costs, reduces dependencies on foreign oil, 

17 and improves the competitiveness of American in18 dustry. Increasing energy demands, and over reli19 ance on limited sources of energy, will result in high20 er prices for homeowners and industry. Higher pro21 duction costs hurt American jobs, overburdens in22 dustry, and stifles economic growth. The develop23 ment of alternate energy sources will result in lower 

24 prices, a cleaner environment, new manufacturing, 

25 and more jobs. 
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1 (b) PURPOSE.—The purpose of this Act is to encour2 age and create incentives for alternate fuel sources to meet 

3 increasing demand for homeowners and industries. 

4 SEC. 3. ENERGY PRODUCED FROM WASTE COAL. 

5 (a) IN GENERAL.—Subpart D of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of 

7 1986 (relating to business related credits) is amended by 

8 inserting after section 45F the following new section: 

9 ‘‘SEC. 45G. ENERGY PRODUCED FROM WASTE COAL. 

10 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

11 the waste coal energy production per ton credit for any 

12 taxable year is an amount equal to $1.50 per million Btu 

13 of heat input utilized by the taxpayer to produce energy 

14 in an eligible facility from qualified waste coal during the 

15 10-year period beginning on the date the facility was origi16 nally placed in service (or, if later, the date of the enact17 ment of this section). 

18 ‘‘(b) CREDIT REDUCED FOR GRANTS.—The amount 

19 of the credit determined under subsection (a) with respect 

20 to any project for any taxable year shall be reduced by 

21 the amount which is the product of the amount so deter22 mined for such year and a fraction—

23 ‘‘(1) the numerator of which is the sum, for the 

24 taxable year and all prior taxable years, of—
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1 ‘‘(A) grants provided by the United States, 

2 a State, or a political subdivision of a State for 

3 use in connection with the project, and 

4 ‘‘(B) the amount of any other credit allow5 able with respect to any property which is part 

6 of the project, and 

7 ‘‘(2) the denominator of which is the aggregate 

8 amount of additions to the capital account for the 

9 project for the taxable year and all prior taxable 

10 years. The amounts under the preceding sentence 

11 for any taxable year shall be determined as of the 

12 close of the taxable year. 

13 ‘‘(c) QUALIFIED WASTE COAL.—

14 ‘‘(1) IN GENERAL.—For purposes of this sec15 tion, the term ‘qualified waste coal’ means coal cer16 tified by the Secretary to be waste (as defined in 

17 paragraphs (1) through (6) of section 292.202 of 

18 title 18, Code of Federal Regulations (as in effect on 

19 the date of the enactment of this section)). 

20 ‘‘(2) CERTIFICATION PROCESS.—For purposes 

21 of paragraph (1), coal may not be certified as waste 

22 coal unless application therefor is submitted before 

23 the end of the 6-month period beginning on the date 

24 of the enactment of this section to the Secretary. 
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1 ‘‘(d) ELIGIBLE FACILITY.—For purposes of this sec2 tion—

3 ‘‘(1) IN GENERAL.—The term ‘eligible facility’ 

4 means a facility—

5 ‘‘(A) whose heat input is not less than 75 

6 percent from qualified waste coal, and 

7 ‘‘(B) which, as of the date on which the 

8 Secretary determines by private letter ruling 

9 that the taxpayer is eligible for the allowance of 

10 the credit under this section, has under its con11 trol, by ownership or lease, not less than a 15-

12 year supply of qualified waste coal, and 

13 ‘‘(C) which is placed in service not more 

14 than 42 months after the month in which the 

15 taxpayer receives the private letter ruling re16 ferred to in subparagraph (B). 

17 ‘‘(2) PRIVATE LETTER RULING.—For purposes 

18 of paragraph (1)(B), a private letter ruling shall not 

19 be taken into account unless the request therefor is 

20 submitted to the Secretary within 30 days after the 

21 date on which the taxpayer receives the certification 

22 required by subsection (b). 

23 ‘‘(e) OTHER DEFINITION AND APPLICABLE

24 RULES.—For purposes of this section—
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1 ‘‘(1) HEAT CONTENT.—Heat content shall be 

2 determined on an ‘as received’ basis. 

3 ‘‘(2) APPLICABLE RULES.—Rules similar to the 

4 rules of section 45(d) (other than paragraph (2)) 

5 shall apply. 

6 ‘‘(3) FORCE MAJEURE.—Performance time re7 quirements specified in this section may be sus8 pended by the Secretary for reasons beyond the con9 trol of the taxpayer when the Secretary is so re10 quested to extend deadlines by the taxpayer as long 

11 as the taxpayer makes such request within 72 hours 

12 of determining such event has occurred. Such events 

13 include Acts of God and third party actions causing 

14 delay. 

15 ‘‘(f) SPECIAL ANNUAL APPLICATION.—Notwith16 standing any other provision of this title, no amount shall 

17 be allowed as a credit for a taxable year under subsection 

18 (a) until after the taxpayer submits an application for 

19 such credit to the Secretary. 

20 ‘‘(g) CREDIT MAY BE TRANSFERRED.—Nothing in 

21 any law or rule of law shall be construed to limit the trans22 ferability of the credit allowed by this section through sale 

23 and repurchase agreements.’’. 

24 (b) CREDIT MADE PART OF GENERAL BUSINESS

25 CREDIT.—Subsection (b) of section 38 of such Code (re-
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1 lating to current year business credit) is amended by strik2 ing ‘‘plus’’ at the end of paragraph (14), by striking the 

3 period at the end of paragraph (15) and inserting ‘‘, plus’’, 

4 and by adding at the end thereof the following new para5 graph: 

6 ‘‘(16) the waste coal energy production per ton 

7 credit determined under section 45G.’’. 

8 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

9 such Code (relating to certain expenses for which credits 

10 are allowable) is amended by adding at the end thereof 

11 the following new subsection: 

12 ‘‘(d) WASTE COAL ENERGY PRODUCTION PER TON

13 CREDIT.—No deduction shall be allowed for that portion 

14 of expenses incurred by the taxpayer to purchase qualified 

15 waste coal (excluding costs of transportation, handling, 

16 and preparation that may be included in the purchase 

17 price) otherwise allowable as a deduction for the taxable 

18 year which is equal to the amount of the credit determined 

19 for such taxable year under section 45G.’’. 

20 (d) LIMITATION ON CARRYBACK.—Subsection (d) of 

21 section 39 of such Code is amended by adding at the end 

22 the following new paragraph: 

23 ‘‘(14) NO CARRYBACK OF WASTE COAL ENERGY

24 PRODUCTION PER TON CREDIT BEFORE EFFECTIVE

25 DATE.—No portion of the unused business credit for 
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1 any taxable year which is attributable to the credit 

2 determined under section 45G may be carried back 

3 to any taxable year ending before January 1, 

4 2004.’’. 

5 (e) CLERICAL AMENDMENT.—The table of sections 

6 for subpart D of part IV of subchapter A of chapter 1 

7 of such Code is amended by inserting after the item relat8 ing to section 45F the following new item:

‘‘Sec. 45G. Energy produced from waste coal.’’.

9 (f) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years ending after De11 cember 31, 2003.

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