II 

109TH CONGRESS 

1ST SESSION S. 1133 

To authorize the Secretary of Energy to develop and implement an accelerated 

research, development, and demonstration program for advanced clean 

coal technologies for use in coal-based generation facilities and to provide 

financial incentives to encourage the early commercial deployment of 

advanced clean coal technologies through the retrofitting, repowering, 

replacement, and new construction of coal-based electricity generating 

facilities and industrial gasification facilities. 

IN THE SENATE OF THE UNITED STATES 

MAY 26, 2005 

Mr. BYRD (for himself, Mr. ROCKEFELLER, and Mr. SPECTER) introduced the 

following bill; which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL

To authorize the Secretary of Energy to develop and implement an accelerated research, development, and demonstration program for advanced clean coal technologies 

for use in coal-based generation facilities and to provide 

financial incentives to encourage the early commercial 

deployment of advanced clean coal technologies through 

the retrofitting, repowering, replacement, and new construction of coal-based electricity generating facilities and 

industrial gasification facilities.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2

•S 1133 IS

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Clean Coal Research, Development, Demonstration, and 

4 Deployment Act of 2005’’. 

5 (b) TABLE OF CONTENTS.—The table of contents of 

6 this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—CLEAN COAL INITIATIVE 

Subtitle A—Clean Coal Research, Development, and Demonstration Program 

Sec. 101. Clean coal power initiative. 

Sec. 102. Research and development programs. 

Sec. 103. Authorization of appropriations. 

Subtitle B—Coal-Based Electric Generation Deployment Program 

Sec. 111. Purpose. 

Sec. 112. Definitions. 

Sec. 113. Deployment incentive program. 

Sec. 114. Election of Federal financial incentives. 

Sec. 115. Qualifying advanced coal projects. 

Sec. 116. Advanced coal-based generation technology. 

Sec. 117. Federal project coordinator. 

Sec. 118. Applicability. 

Sec. 119. Investment tax credit and shortened recovery period. 

Sec. 120. Credit to holders of clean energy bonds. 

TITLE II—INDUSTRIAL GASIFICATION INITIATIVE 

Sec. 201. Findings and purpose. 

Sec. 202. Definitions. 

Subtitle A—Industrial Gasification Research, Development, and 

Demonstration Program 

Sec. 211. Establishment. 

Sec. 212. Cost and performance goals. 

Sec. 213. Study. 

Sec. 214. Authorization of appropriations. 

Subtitle B—Industrial Gasification Deployment Program 

Sec. 221. Establishment of certification program. 

Sec. 222. Credit for production from certified industrial gasification projects.

7 SEC. 2. DEFINITIONS. 

8 In this Act: 
3

•S 1133 IS

1 (1) DEPARTMENT.—The term ‘‘Department’’ 

2 means the Department of Energy. 

3 (2) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of Energy. 

5 TITLE I—CLEAN COAL 

6 INITIATIVE 

7 Subtitle A—Clean Coal Research, 

8 Development, and Demonstra9 tion Program 

10 SEC. 101. CLEAN COAL POWER INITIATIVE. 

11 (a) IN GENERAL.— 

12 (1) ESTABLISHMENT.—The Secretary shall es13 tablish a clean coal power initiative under which the 

14 Secretary shall provide assistance under this subtitle 

15 for projects described in paragraph (2). 

16 (2) PROJECTS.—To be eligible to receive assist17 ance under this subtitle, a project shall— 

18 (A) significantly advance efficiency, reli19 ability, environmental performance, and cost 

20 competitiveness or develop alternative tech21 nology pathways beyond the levels of tech22 nologies that— 

23 (i) are in commercial service as of the 

24 date of enactment of this Act; or 
4

•S 1133 IS

1 (ii) have been demonstrated at scales 

2 sufficient to demonstrate that commercial 

3 service is viable, as determined by the Sec4 retary; and 

5 (B) be operated in the United States using 

6 United States coal. 

7 (b) TECHNICAL CRITERIA.— 

8 (1) GASIFICATION PROJECTS.— 

9 (A) ALLOCATION OF FUNDS.—In allocating 

10 the funds made available under section 103(a), 

11 the Secretary shall ensure that at least 65 per12 cent of the funds are used to fund projects 

13 using coal-based gasification technologies, in14 cluding— 

15 (i) gasification combined cycle; 

16 (ii) gasification fuel cells and turbine 

17 combined cycle; 

18 (iii) gasification coproduction; and 

19 (iv) hybrid gasification and combus20 tion. 

21 (B) TECHNICAL MILESTONES.— 

22 (i) PERIODIC DETERMINATION.— 

23 (I) IN GENERAL.—The Secretary 

24 shall periodically establish technical 

25 milestones specifying the emission and 
5

•S 1133 IS

1 thermal efficiency levels to which 

2 power and coproduction projects 

3 under this subtitle shall be designed, 

4 and reasonably expected, to achieve. 

5 (II) PRESCRIPTIVE MILE6 STONES.—The technical milestones 

7 shall become more prescriptive during 

8 the period of the clean coal power ini9 tiative. 

10 (ii) 2020 GOALS.—The Secretary shall 

11 establish periodic milestones so as to 

12 achieve, by the year 2020, coal gasification 

13 projects able— 

14 (I) to remove at least 99 percent 

15 of the sulfur compounds; 

16 (II) to emit not more than .05 

17 lbs of NOx per million Btu; 

18 (III) to achieve 95 percent reduc19 tions in mercury emissions; and 

20 (IV) to achieve thermal to elec21 trical conversion efficiencies (also 

22 known as ‘‘higher heating value’’) of 

23 at least— 

24 (aa) 50 percent for coal of 

25 more than 9,000 Btu; 
6

•S 1133 IS

1 (bb) 48 percent for coal of 

2 7,000 to 9,000 Btu; and 

3 (cc) 46 percent for coal of 

4 less than 7,000 Btu. 

5 (2) OTHER PROJECTS.— 

6 (A) ALLOCATION OF FUNDS.—The Sec7 retary shall ensure that not more than 35 per8 cent of the funds made available under section 

9 103(a) are used to fund projects other than 

10 those described in paragraph (1)(A). 

11 (B) TECHNICAL MILESTONES.— 

12 (i) PERIODIC DETERMINATION.— 

13 (I) IN GENERAL.—The Secretary 

14 shall periodically establish technical 

15 milestones specifying the emission and 

16 thermal efficiency levels that projects 

17 other than those described in para18 graph (1)(A) shall be designed, and 

19 reasonably expected, to achieve. 

20 (II) PRESCRIPTIVE MILE21 STONES.—The technical milestones 

22 shall become more prescriptive during 

23 the period of the clean coal power ini24 tiative. 
7

•S 1133 IS

1 (ii) 2020 GOALS.—The Secretary shall 

2 establish the periodic milestones so as to 

3 achieve, by the year 2020, projects able— 

4 (I) to remove at least 97 percent 

5 of sulfur dioxide; 

6 (II) to emit not more than .08 

7 lbs of NOx per million Btu; 

8 (III) to achieve 90 percent reduc9 tions in mercury emissions; and 

10 (IV) to achieve thermal to elec11 trical conversion efficiencies (also 

12 known as ‘‘higher heating value’’) of 

13 at least— 

14 (aa) 43 percent for coal of 

15 more than 9,000 Btu; 

16 (bb) 41 percent for coal of 

17 7,000 to 9,000 Btu; and 

18 (cc) 39 percent for coal of 

19 less than 7,000 Btu. 

20 (3) EXISTING UNITS.—In the case of projects 

21 at units in existence on the date of enactment of this 

22 Act, in lieu of the thermal efficiency requirements 

23 described in paragraphs (1)(B)(ii) and (2)(B)(ii), 

24 the milestones shall be designed to achieve an overall 

25 thermal design efficiency improvement, compared to 
8

•S 1133 IS

1 the efficiency of the unit as operated, of not less 

2 than— 

3 (A) 7 percentage points for coal of more 

4 than 9,000 Btu; 

5 (B) 6 percentage points for coal of 7,000 

6 to 9,000 Btu; or 

7 (C) 4 percentage points for coal of less 

8 than 7,000 Btu. 

9 (c) PROJECT SELECTION.— 

10 (1) IN GENERAL.—In evaluating project pro11 posals, the Secretary shall select those demonstra12 tion projects that are expected to demonstrate 

13 progress toward achieving the milestones described 

14 in paragraphs (1) and (2) of subsection (b). 

15 (2) SITE ELEVATION AND RANK OF COAL.—In 

16 evaluating project proposals to achieve the mile17 stones described in paragraphs (1)(B)(i), (2)(B)(i), 

18 and (3) of subsection (b), and in determining 

19 progress toward achieving the milestones described 

20 in paragraph (4) and paragraphs (1)(B)(ii) and 

21 (2)(B)(ii) of subsection (b), the Secretary shall take 

22 into account and make adjustments for the Btu 

23 value of various coals and the elevation of the site 

24 at which a project is proposed to be constructed. 
9

•S 1133 IS

1 (3) CONSULTATION.—Before establishing the 

2 technical milestones under paragraphs (1)(B)(i)(I) 

3 and (2)(B)(i)(I) of subsection (b), the Secretary 

4 shall consult with— 

5 (A) the Administrator of the Environ6 mental Protection Agency; and 

7 (B) interested persons, including— 

8 (i) coal producers; 

9 (ii) industries using coal; 

10 (iii) organizations that promote coal 

11 or advanced coal technologies; 

12 (iv) environmental organizations; 

13 (v) organizations representing work14 ers; and 

15 (vi) organizations representing con16 sumers. 

17 (4) PERMITTED USES.—In carrying out this 

18 subtitle, the Secretary shall give high priority to 

19 projects that include, as part of the project— 

20 (A) the separation or capture of carbon di21 oxide; or 

22 (B) the reduction of the demand for nat23 ural gas if deployed. 

24 (d) FINANCIAL CRITERIA.—The Secretary shall not 

25 provide assistance under this subtitle for a project unless 
10

•S 1133 IS

1 the recipient documents to the satisfaction of the Sec2 retary that— 

3 (1) the recipient organization is financially re4 sponsible; 

5 (2) the recipient shall provide sufficient infor6 mation to the Secretary to ensure the Secretary that 

7 the federally-awarded funds will be spent efficiently 

8 and effectively; and 

9 (3) a market exists for the technology being 

10 demonstrated or applied, as evidenced by statements 

11 of interest in writing from potential purchasers of 

12 the technology. 

13 (e) FINANCIAL ASSISTANCE.—The Secretary shall 

14 provide assistance to projects that, as determined by the 

15 Secretary— 

16 (1) meet the requirements of subsections (a), 

17 (b), and (c); and 

18 (2) are likely— 

19 (A) to achieve overall cost reductions in 

20 the use of coal to generate useful forms of en21 ergy or chemical feedstocks; and 

22 (B) to improve the competitiveness of coal 

23 among various forms of energy in order to 

24 maintain a diversity of fuel choices in the 
11

•S 1133 IS

1 United States to meet electricity generation or 

2 chemical feedstock requirements. 

3 (f) FEDERAL SHARE.—The Federal share of the cost 

4 of a coal or related technology project carried out using 

5 funds made available under this subtitle shall not exceed 

6 50 percent, as determined by the Secretary. 

7 (g) SCHEDULED COMPLETION OF SELECTED

8 PROJECTS.— 

9 (1) IN GENERAL.—In selecting a project for fi10 nancial assistance under this section, the Secretary 

11 shall establish a reasonable period of time during 

12 which the owner or operator of the project shall 

13 complete the construction or demonstration phase of 

14 the project, as the Secretary determines to be appro15 priate. 

16 (2) CONDITION OF FINANCIAL ASSISTANCE.—

17 The Secretary shall require as a condition of receipt 

18 of any financial assistance under this subtitle that 

19 the recipient of the assistance enter into an agree20 ment with the Secretary not to request an extension 

21 of the time period established for the project by the 

22 Secretary under paragraph (1). 

23 (3) EXTENSION OF TIME PERIOD.— 

24 (A) IN GENERAL.—Subject to subpara25 graph (B), the Secretary may extend the time 
12

•S 1133 IS

1 period established under paragraph (1) if the 

2 Secretary determines, in the sole discretion of 

3 the Secretary, that the owner or operator of the 

4 project cannot complete the construction or 

5 demonstration phase of the project within the 

6 time period due to circumstances beyond the 

7 control of the owner or operator. 

8 (B) LIMITATION.—The Secretary shall not 

9 extend a time period under subparagraph (A) 

10 by more than 4 years. 

11 (h) REPAYMENT OF FEDERAL SHARE.—Notwith12 standing any other provision of law, the Secretary shall 

13 not condition an award of financial assistance to a Clean 

14 Coal Power Initiative project under this subtitle on repay15 ment of the Federal share of the cost of the project. 

16 (i) APPLICABILITY.—No technology, or level of emis17 sion reduction, solely by reason of the use of the tech18 nology, or the achievement of the emission reduction by 

19 the demonstration of any technology or performance level 

20 by 1 or more facilities receiving assistance under this sub21 title, shall be considered to indicate that the technology 

22 or performance level is— 

23 (1) adequately demonstrated for purposes of 

24 section 111 of the Clean Air Act (42 U.S. C. 7411); 
13

•S 1133 IS

1 (2) achievable for purposes of section 169 of 

2 that Act (42 U.S. C. 7479); or 

3 (3) achievable in practice for purposes of sec4 tion 171 of that Act (42 U.S. C. 7501). 

5 (j) REPORT.—Not later than 1 year after the date 

6 of enactment of this Act, and once every 2 years thereafter 

7 through 2013, the Secretary, in consultation with other 

8 appropriate Federal agencies, shall submit to Congress a 

9 report describing— 

10 (1)(A) the technical milestones described in this 

11 section; and 

12 (B) how those milestones ensure progress to13 ward meeting the requirements of paragraphs 

14 (1)(B)(ii) and (2)(B)(ii) of subsection (b); 

15 (2) how the technologies being demonstrated 

16 under the clean coal power initiative demonstrate 

17 methods and equipment that can be used in broader 

18 commercial applications in addition to electric power 

19 generation; and 

20 (3) the status of projects that receive assistance 

21 under this subtitle. 

22 (k) FEE TITLE.—The Secretary may vest fee title or 

23 other property interests acquired under cost-share Clean 

24 Coal Power Initiative agreements in any entity, including 

25 the United States. 
14

•S 1133 IS

1 (l) DATA PROTECTION.—For a period not exceeding 

2 5 years after completion of the operations phase of a coop3 erative agreement, the Secretary may provide appropriate 

4 protections, including exemptions from subchapter II of 

5 chapter 5 of title 5, United States Code, against the dis6 semination of information that results from demonstration 

7 activities carried out under the Clean Coal Power Initia8 tive Program and that would be a trade secret or commer9 cial or financial information that is privileged or confiden10 tial if the information had been obtained from and first 

11 produced by a non-Federal party participating in a Clean 

12 Coal Power Initiative project. 

13 SEC. 102. RESEARCH AND DEVELOPMENT PROGRAMS. 

14 (a) OBJECTIVES.—The Secretary shall conduct a pro15 gram of technology research, development, demonstration, 

16 and commercial application for coal and power systems, 

17 including programs to facilitate production and generation 

18 of coal-based energy through— 

19 (1) innovations for existing plants; 

20 (2) gasification systems; 

21 (3) advanced combustion systems; 

22 (4) turbines for synthesis gas derived from coal; 

23 (5) carbon capture and sequestration research 

24 and development; 
15

•S 1133 IS

1 (6) coal-derived chemicals and liquid transpor2 tation fuels; 

3 (7) solid fuels and feedstocks; 

4 (8) advanced coal-related research; 

5 (9) advanced separation technologies; 

6 (10) fuel cells for operation on synthesis gas de7 rived from coal; and 

8 (11) projects for permeability enhancement in 

9 coals for natural gas production and carbon dioxide 

10 sequestration. 

11 (b) CARBON CAPTURE RESEARCH AND DEVELOP12 MENT PROGRAM.— 

13 (1) IN GENERAL.—In addition to the research 

14 and development activities authorized under sub15 section (a)(5), the Secretary shall carry out a 10-

16 year carbon capture research and development pro17 gram to develop carbon dioxide capture technologies 

18 for use— 

19 (A) in new coal utilization facilities; and 

20 (B) on the existing fleet of coal-based 

21 units. 

22 (2) OBJECTIVES.—The program objectives shall 

23 be— 

24 (A) to develop carbon dioxide capture tech25 nologies, including adsorption and absorption 
16

•S 1133 IS

1 techniques and chemical processes, to remove 

2 the carbon dioxide from gas streams containing 

3 carbon dioxide potentially amenable to seques4 tration; 

5 (B) to develop technologies that would di6 rectly produce concentrated streams of carbon 

7 dioxide potentially amenable to sequestration; 

8 (C) to increase the efficiency of the overall 

9 system to reduce the quantity of carbon dioxide 

10 emissions released from the system per mega11 watt generated; and 

12 (D) in conjunction with the carbon dioxide 

13 capture program, to promote a robust carbon 

14 sequestration program and continue the work of 

15 the Department in conjunction with the private 

16 sector, through regional carbon sequestration 

17 partnerships. 

18 (c) COST AND PERFORMANCE GOALS.— 

19 (1) IN GENERAL.—In carrying out programs 

20 under this section, in each of fiscal years 2008 and 

21 2016 and in each year following fiscal year 2021, 

22 the Secretary shall identify cost and performance 

23 goals for coal-based technologies that would permit 

24 the continued cost-competitive use of coal for the 
17

•S 1133 IS

1 production of electricity, chemical feedstocks, and 

2 liquid transportation fuels. 

3 (2) ESTABLISHING GOALS.—In identifying cost 

4 and performance goals under paragraph (1), the 

5 Secretary shall— 

6 (A) consider activities and studies under7 taken as of the date of enactment of this Act 

8 by industry in cooperation with the Department 

9 in support of the goals; 

10 (B) consult with interested persons, includ11 ing— 

12 (i) coal producers; 

13 (ii) industries using coal; 

14 (iii) organizations that promote coal 

15 and advanced coal technologies; 

16 (iv) environmental organizations; 

17 (v) organizations representing work18 ers; and 

19 (vi) organizations representing con20 sumers; 

21 (C) not later than 120 days after the date 

22 of enactment of this Act, publish in the Federal 

23 Register proposed draft cost and performance 

24 goals for public comment; and 
18

•S 1133 IS

1 (D) not later than 180 days after the date 

2 of enactment of this Act and every 4 years 

3 thereafter, submit to Congress a report that— 

4 (i) describes final cost and perform5 ance goals for technologies described in 

6 paragraph (1); 

7 (ii) includes a list of technical mile8 stones; and 

9 (iii) explains how programs authorized 

10 in this section will not duplicate activities 

11 carried out under section 101. 

12 SEC. 103. AUTHORIZATION OF APPROPRIATIONS. 

13 (a) CLEAN COAL POWER INITIATIVE.— 

14 (1) IN GENERAL.—There is authorized to be 

15 appropriated to the Secretary to carry out section 

16 101 $200,000,000 for each of fiscal years 2006 

17 through 2012, to remain available until expended. 

18 (2) REPORT.—Not later than March 31, 2006, 

19 the Secretary shall submit to Congress a report that 

20 includes a 10-year plan that includes— 

21 (A) a detailed assessment of whether the 

22 aggregate assistance levels provided under para23 graph (1) are the appropriate assistance levels 

24 for the clean coal power initiative; 
19

•S 1133 IS

1 (B) a detailed description of how proposals 

2 for assistance under the clean coal power initia3 tive will be solicited and evaluated, including a 

4 list of all activities expected to be undertaken; 

5 (C) a detailed list of technical milestones 

6 for each coal and related technology that will be 

7 pursued; and 

8 (D) a detailed description of how the clean 

9 coal initiative will avoid problems enumerated in 

10 Government Accountability Office reports on 

11 the Clean Coal Technology Program of the De12 partment, including problems that have resulted 

13 in unspent funds and projects that failed either 

14 financially or scientifically. 

15 (b) RESEARCH AND DEVELOPMENT PROGRAMS.— 

16 (1) IN GENERAL.—There are authorized to be 

17 appropriated to the Secretary to carry out clean coal 

18 technology research, development, demonstration, 

19 and commercial application activities, including ac20 tivities described in section 102(a)— 

21 (A) $324,000,000 for fiscal year 2005; 

22 (B) $337,000,000 for fiscal year 2006; 

23 (C) $364,000,000 for fiscal year 2007; 

24 (D) $394,000,000 for fiscal year 2008; 

25 and 
20

•S 1133 IS

1 (E) $427,000,000 for fiscal year 2009. 

2 (2) CARBON CAPTURE RESEARCH AND DEVEL3 OPMENT PROGRAM.—In addition to the funds au4 thorized to be appropriated to carry out section 

5 102(a)(5), there are authorized to be appropriated 

6 to the Secretary to carry out section 102(b)— 

7 (A) $20,000,000 for fiscal year 2006; 

8 (B) $25,000,000 for fiscal year 2007; 

9 (C) $30,000,000 for fiscal year 2008; 

10 (D) $35,000,000 for fiscal year 2009; and 

11 (E) $40,000,000 for fiscal year 2010. 

12 Subtitle B—Coal-Based Electric 

13 Generation Deployment Program 

14 SEC. 111. PURPOSE. 

15 The purpose of this subtitle is to provide Federal fi16 nancial assistance for projects that will use integrated gas17 ification combined cycle or other advanced coal-based gen18 eration technologies— 

19 (1) in new electric generating units; 

20 (2) to repower existing electric generation units; 

21 or 

22 (3) to retrofit existing natural gas combined 

23 cycle units to operate on coal instead of natural gas. 

24 SEC. 112. DEFINITIONS. 

25 In this subtitle: 
21

•S 1133 IS

1 (1) ADVANCED COAL-BASED GENERATION

2 TECHNOLOGY.—The term ‘‘advanced coal-based gen3 eration technology’’ means a technology that meets 

4 the requirements of section 116. 

5 (2) CARBON CAPTURE CAPABILITY.—The term 

6 ‘‘carbon capture capability’’ means an integrated 

7 gasification combined cycle technology facility capa8 ble of adding components that can capture, separate 

9 on a long-term basis, isolate, remove, and sequester 

10 greenhouse gases that result from the generation of 

11 electricity. 

12 (3) ELECTRIC GENERATION UNIT.—The term 

13 ‘‘electric generation unit’’ means any facility at least 

14 50 percent of the total annual net output of which 

15 is electrical power, including an otherwise eligible fa16 cility that is used in an industrial application. 

17 (4) INTEGRATED GASIFICATION COMBINED

18 CYCLE.—The term ‘‘integrated gasification combined 

19 cycle’’ means an electric generation unit that pro20 duces electricity by converting coal to synthesis gas 

21 that is used to fuel a combined-cycle plant that pro22 duces electricity from both a combustion turbine (in23 cluding a combustion turbine/fuel cell hybrid) and a 

24 steam turbine. 
22

•S 1133 IS

1 (5) QUALIFYING ADVANCED COAL PROJECT.—

2 The term ‘‘qualifying advanced coal project’’ means 

3 a project that meets the requirements of section 

4 115. 

5 SEC. 113. DEPLOYMENT INCENTIVE PROGRAM. 

6 (a) ESTABLISHMENT.—Not later than 180 days after 

7 the date of enactment of this Act, the Secretary shall 

8 begin carrying out a program to provide Federal financial 

9 incentives for deployment of advanced coal-based genera10 tion technologies. 

11 (b) CERTIFICATION.— 

12 (1) IN GENERAL.—The Secretary may certify a 

13 qualifying advanced coal project as eligible to receive 

14 1 of the Federal financial incentives provided under 

15 section 114. 

16 (2) PERIOD OF ISSUANCE.—A certificate of eli17 gibility under this subsection may be issued only 

18 during the 10 fiscal year period beginning on Octo19 ber 1, 2005. 

20 (3) AGGREGATE GENERATING CAPACITY.— 

21 (A) IN GENERAL.—The aggregate gener22 ating capacity of projects certified by the Sec23 retary under paragraph (1) may not exceed 

24 10,000 megawatts. 
23

•S 1133 IS

1 (B) PARTICULAR PROJECTS.—Of the total 

2 megawatts of capacity that the Secretary is au3 thorized to certify— 

4 (i) 6,000 megawatts shall be available 

5 only for use for integrated gasification 

6 combined cycle projects; and 

7 (ii) 4,000 megawatts shall be available 

8 only for use for projects that use other ad9 vanced coal-based generation technologies. 

10 (C) DETERMINATION OF CAPACITY.—In 

11 determining capacity under this paragraph in 

12 the case of a retrofitted or repowered plant, ca13 pacity shall be determined based on total design 

14 capacity after the retrofit or repowering of the 

15 existing facility is accomplished. 

16 (4) APPLICATIONS.—The Secretary shall act on 

17 applications for certification as the applications are 

18 received. 

19 (5) DETERMINATION.—In determining whether 

20 to certify a qualifying advanced coal project, the 

21 Secretary shall take into account any written state22 ment from the Governor of the State in which the 

23 project is to be sited that the construction and oper24 ation of the project is consistent with State environ25 mental and energy policy and requirements. 
24

•S 1133 IS

1 (6) APPLICATION REQUIREMENT.—An applica2 tion for certification shall specify which of the incen3 tives under section 114 the project sponsor will elect. 

4 (7) REVIEW AND REDISTRIBUTION.— 

5 (A) REVIEW.—Not later than 6 years after 

6 the date of enactment of this Act, the Secretary 

7 shall review the projects certified and 

8 megawatts allocated under this section as of the 

9 date that is 6 years after the date of enactment 

10 of this Act. 

11 (B) REDISTRIBUTION.—The Secretary 

12 may reallocate the megawatts available under 

13 clauses (i) and (ii) of subsection (b)(3)(B) if the 

14 Secretary determines that— 

15 (i) capacity cannot be used because 

16 there is an insufficient quantity of quali17 fying applications for certification pending 

18 for any available capacity at the time of 

19 the review; or 

20 (ii) any certification commitment 

21 made pursuant to section 115(d)(2) has 

22 not been revoked pursuant to section 

23 115(d)(2)(B)(ii) because the project sub24 ject to the certification commitment has 

25 been delayed as a result of third party op-
25

•S 1133 IS

1 position or litigation to the proposed 

2 project. 

3 SEC. 114. ELECTION OF FEDERAL FINANCIAL INCENTIVES. 

4 (a) IN GENERAL.—The project sponsor of a quali5 fying advanced coal project certified under section 113(b) 

6 may elect to receive the Federal financial incentives de7 scribed in either section 119 or 120. 

8 (b) LIMITATION.—A project sponsor may not elect 

9 more than 1 section described in subsection (a). 

10 SEC. 115. QUALIFYING ADVANCED COAL PROJECTS. 

11 (a) REQUIREMENTS.—For the purpose of section 

12 113(b), a project shall be considered a qualifying advanced 

13 coal project that the Secretary may certify under section 

14 113(b) if the Secretary determines that, at a minimum— 

15 (1) the project uses an advanced coal-based 

16 generation technology— 

17 (A) to power a new electric generation or 

18 polygeneration unit; or 

19 (B) to retrofit or repower an existing elec20 tric generation unit (including an existing nat21 ural gas-fired combined cycle unit); 

22 (2) the fuel input for the project, when com23 pleted, is at least 75 percent coal; 

24 (3) the applicant provides an assurance satis25 factory to the Secretary that— 
26

•S 1133 IS

1 (A) the project is technologically feasible; 

2 and 

3 (B) the project is not financially feasible 

4 without the Federal financial incentives, after 

5 taking into account— 

6 (i) regulatory approvals or power pur7 chase contracts referred to in paragraph 

8 (4); 

9 (ii) arrangements for the supply of 

10 fuel to the project; 

11 (iii) contracts or other arrangements 

12 for construction of the project facilities; 

13 (iv) any performance guarantees to be 

14 provided by contractors and equipment 

15 vendors; and 

16 (v) evidence of the availability of 

17 funds to develop and construct the project; 

18 (4) the applicant demonstrates that the appli19 cant has obtained— 

20 (A) approval by the appropriate regulatory 

21 commission of the recovery of the cost of the 

22 project; or 

23 (B) a power purchase agreement (or letter 

24 of intent, subject to subsection (c)) that has 
27

•S 1133 IS

1 been approved by the board of directors of, and 

2 executed by, a creditworthy purchasing party; 

3 (5) except as provided in subsection (d), the ap4 plicant demonstrates that the applicant has, or will, 

5 obtain all project agreements and approvals; and 

6 (6) the project will be operated in the United 

7 States using United States coal. 

8 (b) PRIORITY FOR INTEGRATED GASIFICATION COM9 BINES CYCLE PROJECTS.—In determining which quali10 fying advanced coal projects to certify under section 

11 113(b)(3)(B)(i), the Secretary shall give high priority to 

12 projects that include, as determined by the Secretary— 

13 (1) carbon capture capability; 

14 (2) increased by-product utilization; and 

15 (3) other benefits. 

16 (c) LETTER OF INTENT.—A letter of intent described 

17 in subsection (a)(4)(B) shall be replaced by a binding con18 tract before a certificate may be issued. 

19 (d) PROJECT AGREEMENTS AND APPROVALS.— 

20 (1) DEFINITION OF PROJECT AGREEMENTS AND

21 APPROVALS.—In this section, the term ‘‘project 

22 agreements and approvals’’ means— 

23 (A) all necessary power purchase agree24 ments, and all other contracts, that the Sec-
28

•S 1133 IS

1 retary determines are necessary to construct, fi2 nance, and operate a project; and 

3 (B) all authorizations by Federal, State, 

4 and local agencies that are required to con5 struct, operate, and recover the cost of the 

6 project. 

7 (2) CERTIFICATION COMMITMENT.— 

8 (A) IN GENERAL.—If the applicant has not 

9 obtained all agreements and approvals prior to 

10 application, the Secretary may issue a certifi11 cation commitment. 

12 (B) REQUIREMENTS.— 

13 (i) IN GENERAL.—An applicant that 

14 receives a certification commitment shall 

15 obtain any remaining project agreements 

16 and approvals not later than 4 years after 

17 the issuance of the certification commit18 ment. 

19 (ii) REVOCATION.—If all project 

20 agreements and approvals are not obtained 

21 during the 4-year period described in 

22 clause (i), the certification commitment is 

23 terminated without any other action by the 

24 Secretary. 
29

•S 1133 IS

1 (iii) FINAL CERTIFICATE.—No certifi2 cate may be issued until all project agree3 ments and approvals are obtained. 

4 SEC. 116. ADVANCED COAL-BASED GENERATION TECH5 NOLOGY. 

6 (a) IN GENERAL.—For the purpose of this subtitle, 

7 an electric generation unit uses advanced coal-based gen8 eration technology if— 

9 (1) the unit— 

10 (A) uses integrated gasification combined 

11 cycle technology; or 

12 (B) has a design net heat rate of 8530 

13 Btu/kWh (40 percent efficiency); and 

14 (2) the vendor warrants that the unit is de15 signed to meet the performance requirements in the 

16 following table:

Performance characteristic: Design level for 

project:

SO2 (percent removal) ............................................ 99 percent 

NOx (emissions) ..................................................... 0.07 lbs/MMBTU 

PM* (emissions) ..................................................... 0.015 lbs/MMBTU 

Hg (percent removal) ............................................. 90 percent 

17 (b) DESIGN NET HEAT RATE.—For purposes of this 

18 section, design net heat rate with respect to an electric 

19 generation unit shall— 

20 (1) be measured in Btu per kilowatt hour (high21 er heating value); 
30

•S 1133 IS

1 (2) be based on the design annual heat input to 

2 the unit and the rated net electrical power, fuels, 

3 and chemicals output of the unit (determined with4 out regard to the cogeneration of steam by the unit); 

5 (3) be adjusted for the heat content of the de6 sign coal to be used by the unit— 

7 (A) if the heat content is less than 13,500 

8 Btu per pound, but greater than 7,000 Btu per 

9 pound, according to the following formula: de10 sign net heat rate = unit net heat rate x [1–

11 {((13,500-design coal heat content, Btu per 

12 pound)/1,000)* 0.013}]; and 

13 (B) if the heat content is less than or 

14 equal to 7,000 Btu per pound, according to the 

15 following formula: design net heat rate = unit 

16 net heat rate x [1–{((13,500-design coal heat 

17 content, Btu per pound)/1,000)* 0.018}]; and 

18 (4) be corrected for the site reference conditions 

19 of— 

20 (A) elevation above sea level of 500 feet; 

21 (B) air pressure of 14.4 pounds per square 

22 inch absolute; 

23 (C) temperature, dry bulb of 63oF; 

24 (D) temperature, wet bulb of 54oF; and 

25 (E) relative humidity of 55 percent. 
31

•S 1133 IS

1 SEC. 117. FEDERAL PROJECT COORDINATOR. 

2 The Secretary shall designate a Federal project coor3 dinator to facilitate any Federal agency approvals of eligi4 ble advanced coal-generation projects. 

5 SEC. 118. APPLICABILITY. 

6 No technology, or level of emission reduction, solely 

7 by reason of the use of the technology, or the achievement 

8 of the emission reduction by the demonstration of any 

9 technology or performance level by 1 or more facilities re10 ceiving assistance under this subtitle, shall be considered 

11 to indicate that the technology or performance level is— 

12 (1) adequately demonstrated for purposes of 

13 section 111 of the Clean Air Act (42 U.S. C. 7411); 

14 (2) achievable for purposes of section 169 of 

15 that Act (42 U.S. C. 7479); or 

16 (3) achievable in practice for purposes of sec17 tion 171 of that Act (42 U.S. C. 7501). 

18 SEC. 119. INVESTMENT TAX CREDIT AND SHORTENED RE19 COVERY PERIOD. 

20 (a) IN GENERAL.—Section 48(a)(3)(A) of the Inter21 nal Revenue Code of 1986 (relating to energy property) 

22 is amended— 

23 (1) by striking ‘‘or’’ at the end of clause (i), 

24 (2) by inserting ‘‘or’’ at the end of clause (ii), 

25 and 
32

•S 1133 IS

1 (3) by adding at the end the following new 

2 clause: 

3 ‘‘(iii) certified coal property,’’. 

4 (b) CREDIT RATE.—Section 48(a)(2)(A) of such 

5 Code (relating to energy percentage) is amended by strik6 ing ‘‘10 percent’’ and inserting ‘‘10 percent for energy 

7 property other than certified coal property, and 20 percent 

8 for certified coal property’’. 

9 (c) DEFINITION.—Section 48 of such Code (relating 

10 to energy credit) is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(c) CERTIFIED COAL PROPERTY.—For purposes of 

13 this section, the term ‘certified coal property’ means any 

14 property that is part of a qualifying advanced coal project 

15 that the Secretary of Energy has certified under section 

16 113(b) of the Clean Coal Research, Development, Dem17 onstration, and Deployment Act of 2005, if the project 

18 sponsor has elected the application of this section for such 

19 project under section 114(a) of such Act.’’. 

20 SEC. 120. CREDIT TO HOLDERS OF CLEAN ENERGY BONDS. 

21 (a) IN GENERAL.—Part IV of subchapter A of chap22 ter 1 of the Internal Revenue Code of 1986 (relating to 

23 credits against tax) is amended by adding at the end the 

24 following new subpart: 
33 

•S 1133 IS

1 ‘‘Subpart H—Nonrefundable Credit to Holders of 

2 Clean Energy Bonds 

‘‘Sec. 54. Credit to holders of clean energy bonds. 

3 ‘‘SEC. 54. CREDIT TO HOLDERS OF CLEAN ENERGY BONDS. 

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax5 payer who holds a clean energy bond on a credit allowance 

6 date of such bond, which occurs during the taxable year, 

7 there shall be allowed as a credit against the tax imposed 

8 by this chapter for such taxable year an amount equal to 

9 the sum of the credits determined under subsection (b) 

10 with respect to credit allowance dates during such year 

11 on which the taxpayer holds such bond. 

12 ‘‘(b) AMOUNT OF CREDIT.— 

13 ‘‘(1) IN GENERAL.—The amount of the credit 

14 determined under this subsection with respect to any 

15 credit allowance date for a clean energy bond is 25 

16 percent of the annual credit determined with respect 

17 to such bond. 

18 ‘‘(2) ANNUAL CREDIT.—The annual credit de19 termined with respect to any clean energy bond is 

20 the product of— 

21 ‘‘(A) the credit rate determined by the Sec22 retary under paragraph (3) for the day on 

23 which such bond was sold, multiplied by 

24 ‘‘(B) the outstanding face amount of the 

25 bond. 
34 

•S 1133 IS

1 ‘‘(3) DETERMINATION.—For purposes of para2 graph (2), with respect to any clean energy bond, 

3 the Secretary shall determine daily or caused to be 

4 determined daily a credit rate which shall apply to 

5 the first day on which there is a binding, written 

6 contract for the sale or exchange of the bond. The 

7 credit rate for any day is the credit rate which the 

8 Secretary or the Secretary’s designee estimates will 

9 permit the issuance of clean energy bonds with a 

10 specified maturity or redemption date without dis11 count and without interest cost to the qualified 

12 issuer. 

13 ‘‘(4) CREDIT ALLOWANCE DATE.—For purposes 

14 of this section, the term ‘credit allowance date’ 

15 means— 

16 ‘‘(A) March 15, 

17 ‘‘(B) June 15, 

18 ‘‘(C) September 15, and 

19 ‘‘(D) December 15. 

20 Such term also includes the last day on which the 

21 bond is outstanding. 

22 ‘‘(5) SPECIAL RULE FOR ISSUANCE AND RE23 DEMPTION.—In the case of a bond which is issued 

24 during the 3-month period ending on a credit allow25 ance date, the amount of the credit determined 
35 

•S 1133 IS

1 under this subsection with respect to such credit al2 lowance date shall be a ratable portion of the credit 

3 otherwise determined based on the portion of the 3- 

4 month period during which the bond is outstanding. 

5 A similar rule shall apply when the bond is redeemed 

6 or matures. 

7 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 

8 ‘‘(1) IN GENERAL.—The credit allowed under 

9 subsection (a) for any taxable year shall not exceed 

10 the excess of— 

11 ‘‘(A) the sum of the regular tax liability 

12 (as defined in section 26(b)) plus the tax im13 posed by section 55, over 

14 ‘‘(B) the sum of the credits allowable 

15 under this part (other than subpart C thereof, 

16 relating to refundable credits). 

17 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

18 credit allowable under subsection (a) exceeds the 

19 limitation imposed by paragraph (1) for such taxable 

20 year, the difference shall be carried to the suc21 ceeding taxable year and added to the credit allow22 able under subsection (a) for such taxable year. 

23 ‘‘(d) CLEAN ENERGY BOND.—For purposes of this 

24 section— 
36 

•S 1133 IS

1 ‘‘(1) IN GENERAL.—The term ‘clean energy 

2 bond’ means any bond issued as part of an issue 

3 if— 

4 ‘‘(A) the bond is issued by a qualified 

5 issuer, 

6 ‘‘(B) 95 percent or more of the proceeds 

7 from the sale of such issue are to be used for 

8 capital expenditures incurred by qualified bor9 rowers for 1 or more qualified projects, 

10 ‘‘(C) the qualified issuer designates such 

11 bond for purposes of this section and the bond 

12 is in registered form, and 

13 ‘‘(D) the issue meets the requirements of 

14 subsections (e), (g), and (h). 

15 ‘‘(2) QUALIFIED PROJECT; SPECIAL USE

16 RULES.— 

17 ‘‘(A) IN GENERAL.—The term ‘qualified 

18 project’ means a certified coal property (as de19 fined in section 48(c)(1)) placed in service by a 

20 qualified borrower. 

21 ‘‘(B) REFINANCING RULES.—For purposes 

22 of paragraph (1)(B), a qualified project may be 

23 refinanced with proceeds of a clean energy bond 

24 only if the indebtedness being refinanced (in25 cluding any obligation directly or indirectly refi-
37 

•S 1133 IS

1 nanced by such indebtedness) was originally in2 curred by a qualified borrower after the date of 

3 the enactment of this section. 

4 ‘‘(C) REIMBURSEMENT.—For purposes of 

5 paragraph (1)(B), a clean energy bond may be 

6 issued to reimburse a qualified borrower for 

7 amounts paid after the date of the enactment 

8 of this section with respect to a qualified 

9 project, but only if prior to the payment of such 

10 expenditure, the qualified borrower declared its 

11 intent to reimburse such expenditure with the 

12 proceeds of a clean energy bond. 

13 ‘‘(D) TREATMENT OF CHANGES IN USE.— 

14 For purposes of paragraph (1)(B), the proceeds 

15 of an issue shall not be treated as used for a 

16 qualified project to the extent that a qualified 

17 borrower takes any action within its control 

18 which causes such proceeds not to be used for 

19 a qualified project. The Secretary shall pre20 scribe regulations specifying remedial actions 

21 that may be taken (including conditions to tak22 ing such remedial actions) to prevent an action 

23 described in the preceding sentence from caus24 ing a bond to fail to be a clean energy bond. 

25 ‘‘(e) MATURITY LIMITATIONS.— 
38 

•S 1133 IS

1 ‘‘(1) DURATION OF TERM.—A bond shall not be 

2 treated as a clean energy bond if such bond is issued 

3 as part of an issue and— 

4 ‘‘(A) the average maturity of bonds issued 

5 as a part of such issue, exceeds 

6 ‘‘(B) 120 percent of the average reasonable 

7 expected economic life of the facilities being fi8 nanced with the proceeds from the sale of such 

9 issue. 

10 ‘‘(2) DETERMINATION OF AVERAGES.—For pur11 poses of paragraph (1), the determination of aver12 ages of an issue and economic life of any facility 

13 shall be determined in accordance with section 

14 147(b). 

15 ‘‘(3) RATABLE PRINCIPAL AMORTIZATION RE16 QUIRED.—A bond shall not be treated as a clean en17 ergy bond unless it is part of an issue which pro18 vides for an equal amount of principal to be paid by 

19 the qualified issuer during each calendar year that 

20 the issue is outstanding. 

21 ‘‘(f) CREDIT INCLUDED IN GROSS INCOME.—Gross 

22 income includes the amount of the credit allowed to the 

23 taxpayer under this section (determined without regard to 

24 subsection (c)) and the amount so included shall be treat25 ed as interest income. 
39 

•S 1133 IS

1 ‘‘(g) SPECIAL RULES RELATING TO EXPENDI2 TURES.— 

3 ‘‘(1) IN GENERAL.—An issue shall be treated as 

4 meeting the requirements of this subsection if, as of 

5 the date of issuance, the qualified issuer reasonably 

6 expects— 

7 ‘‘(A) at least 95 percent of the proceeds 

8 from the sale of the issue are to be spent for 

9 1 or more qualified projects within the 5-year 

10 period beginning on such date, 

11 ‘‘(B) a binding commitment with a third 

12 party to spend at least 10 percent of the pro13 ceeds from the sale of the issue will be incurred 

14 within the 6-month period beginning on the 

15 date of issuance of the clean energy bond or, in 

16 the case of a clean energy bond, the proceeds 

17 of which are to be loaned to 2 or more qualified 

18 borrowers, such binding commitment will be in19 curred within the 6-month period beginning on 

20 the date of the loan of such proceeds to a quali21 fied borrower, and 

22 ‘‘(C) such projects will be completed with 

23 due diligence and the proceeds from the sale of 

24 the issue will be spent with due diligence. 
40 

•S 1133 IS

1 ‘‘(2) EXTENSION OF PERIOD.—Upon submis2 sion of a request prior to the expiration of the period 

3 described in paragraph (1)(A), the Secretary may 

4 extend such period if the qualified issuer establishes 

5 that the failure to satisfy the 5-year requirement is 

6 due to reasonable cause and the related projects will 

7 continue to proceed with due diligence. 

8 ‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT

9 OF BOND PROCEEDS WITHIN 5 YEARS.—To the ex10 tent that less than 95 percent of the proceeds of 

11 such issue are expended within such 5-year period 

12 (and no extension has been obtained under para13 graph (2)), the qualified issuer shall redeem all of 

14 the nonqualified bonds on the earliest call date sub15 sequent to the expiration of the 5-year period. If 

16 such earliest call date is more than 90 days subse17 quent to the expiration of the 5-year period, the 

18 qualified issuer shall establish a yield-restricted de19 feasance escrow within such 90 days to retire such 

20 nonqualified bonds on the earlier of the date which 

21 is 10 years after the issue date or the first call date. 

22 For purposes of this paragraph, the term ‘non23 qualified bonds’ means the portion of the out24 standing bonds in an amount that, if the remaining 

25 bonds were issued on the fifth anniversary of the 
41 

•S 1133 IS

1 date of the issuance of the issue, at least 95 percent 

2 of the proceeds of the remaining bonds would be 

3 used to provide qualified projects. 

4 ‘‘(h) SPECIAL RULES RELATING TO ARBITRAGE.— 

5 ‘‘(1) IN GENERAL.—A bond which is part of an 

6 issue shall not be treated as a clean energy bond un7 less, with respect to the issue of which the bond is 

8 a part, the issuer satisfies the arbitrage rebate re9 quirements of section 148 with respect to gross pro10 ceeds of the issue (other than any amounts applied 

11 in accordance with subsection (g)). For purposes of 

12 such requirements, yield over the term of an issue 

13 shall be determined under the principles of section 

14 148 based on the qualified issuer’s payments of 

15 principal, interest (if any), and fees for guarantees 

16 on such issue. 

17 ‘‘(2) EXCEPTION.—Amounts on deposit in a 

18 bona fide debt service fund with regard to any clean 

19 energy bond are not subject to the arbitrage rebate 

20 requirements of section 148. 

21 ‘‘(i) COOPERATIVE ELECTRIC COMPANY; CLEAN EN22 ERGY BOND LENDER; GOVERNMENTAL BODY; QUALIFIED

23 BORROWER.—For purposes of this section— 

24 ‘‘(1) COOPERATIVE ELECTRIC COMPANY.—The 

25 term ‘cooperative electric company’ means a mutual 
42 

•S 1133 IS

1 or cooperative electric company described in section 

2 501(c)(12) or section 1381(a)(2)(C), or a not-for3 profit electric utility which has received a loan or 

4 loan guarantee under the Rural Electrification Act. 

5 ‘‘(2) CLEAN ENERGY BOND LENDER.—The 

6 term ‘clean energy bond lender’ means a lender 

7 which is a cooperative which is owned by, or has out8 standing loans to, 100 or more cooperative electric 

9 companies and is in existence on February 1, 2002, 

10 and shall include any affiliated entity which is con11 trolled by such lender. 

12 ‘‘(3) GOVERNMENTAL BODY.—The term ‘gov13 ernmental body’ means any State, territory, posses14 sion of the United States, the District of Columbia, 

15 Indian tribal government, and any political subdivi16 sion thereof. 

17 ‘‘(4) QUALIFIED ISSUER.—The term ‘qualified 

18 issuer’ means— 

19 ‘‘(A) a clean energy bond lender, 

20 ‘‘(B) a cooperative electric company, 

21 ‘‘(C) a governmental body, or 

22 ‘‘(D) the Tennessee Valley Authority. 

23 ‘‘(5) QUALIFIED BORROWER.—The term ‘quali24 fied borrower’ means— 

25 ‘‘(A) a cooperative electric company, 
43 

•S 1133 IS

1 ‘‘(B) a governmental body, or 

2 ‘‘(C) the Tennessee Valley Authority. 

3 ‘‘(j) POOL BONDS.—The portion of a clean energy 

4 bond issue allocable to each loan, if any, shall be deemed 

5 to be (and treated as) a separate issue of clean energy 

6 bonds and the failure of any such deemed separate clean 

7 energy bond issue to satisfy the requirements set forth 

8 under this section shall not affect the qualification of any 

9 other deemed separate clean energy bond issue. 

10 ‘‘(k) OTHER DEFINITIONS AND SPECIAL RULES.— 

11 For purposes of this section— 

12 ‘‘(1) BOND.—The term ‘bond’ includes any ob13 ligation. 

14 ‘‘(2) PARTNERSHIP; S CORPORATION; AND

15 OTHER PASS-THRU ENTITIES.—Under regulations 

16 prescribed by the Secretary, in the case of a partner17 ship, trust, S corporation, or other pass-thru entity, 

18 rules similar to the rules of section 41(g) shall apply 

19 with respect to the credit allowable under subsection 

20 (a). 

21 ‘‘(3) BONDS HELD BY REGULATED INVEST22 MENT COMPANIES.—If any clean energy bond is held 

23 by a regulated investment company, the credit deter24 mined under subsection (a) shall be allowed to 
44 

•S 1133 IS

1 shareholders of such company under procedures pre2 scribed by the Secretary. 

3 ‘‘(4) TREATMENT FOR ESTIMATED TAX PUR4 POSES.—Solely for purposes of sections 6654 and 

5 6655, the credit allowed by this section to a tax6 payer by reason of holding a clean energy bond on 

7 a credit allowance date shall be treated as if it were 

8 a payment of estimated tax made by the taxpayer on 

9 such date. 

10 ‘‘(5) REPORTING.—Issuers of clean energy 

11 bonds shall submit reports similar to the reports re12 quired under section 149(e). 

13 ‘‘(l) TERMINATION.—This section shall not apply 

14 with respect to any bond issued after December 31, 

15 2008.’’. 

16 (b) REPORTING.—Subsection (d) of section 6049 of 

17 the Internal Revenue Code of 1986 (relating to returns 

18 regarding payments of interest) is amended by adding at 

19 the end the following new paragraph: 

20 ‘‘(8) REPORTING OF CREDIT ON CLEAN ENERGY

21 BONDS.— 

22 ‘‘(A) IN GENERAL.—For purposes of sub23 section (a), the term ‘interest’ includes amounts 

24 includible in gross income under section 54(f) 

25 and such amounts shall be treated as paid on 
45 

•S 1133 IS

1 the credit allowance date (as defined in section 

2 54(b)(4)). 

3 ‘‘(B) REPORTING TO CORPORATIONS, 

4 ETC.—Except as otherwise provided in regula5 tions, in the case of any interest described in 

6 subparagraph (A), subsection (b)(4) shall be 

7 applied without regard to subparagraphs (A), 

8 (H), (I), (J), (K), and (L)(i) of such subsection. 

9 ‘‘(C) REGULATORY AUTHORITY.—The Sec10 retary may prescribe such regulations as are 

11 necessary or appropriate to carry out the pur12 poses of this paragraph, including regulations 

13 which require more frequent or more detailed 

14 reporting.’’. 

15 (c) CLERICAL AMENDMENTS.— 

16 (1) The table of subparts for part IV of sub17 chapter A of chapter 1 of the Internal Revenue Code 

18 of 1986 is amended by adding at the end the fol19 lowing new item: 

‘‘SUBPART H. NONREFUNDABLE CREDIT TO HOLDERS OF CLEAN ENERGY

BONDS.’’. 

20 (2) Section 6401(b)(1) of such Code is amend21 ed by striking ‘‘and G’’ and inserting ‘‘G, and H’’. 

22 (d) ISSUANCE OF REGULATIONS.—The Secretary of 

23 Treasury shall issue regulations required under section 54 

24 of the Internal Revenue Code of 1986 (as added by this 
46 

•S 1133 IS

1 section) not later than 120 days after the date of the en2 actment of this Act. 

3 TITLE II—INDUSTRIAL 

4 GASIFICATION INITIATIVE 

5 SEC. 201. FINDINGS AND PURPOSE. 

6 (a) FINDINGS.—Congress finds that widespread do7 mestic use of gasification technologies can make signifi8 cant contributions to the economy, environmental 

9 beneficiation, and the general welfare of the citizens of the 

10 United States. 

11 (b) PURPOSE.—The purpose of the industrial gasifi12 cation research, development, and demonstration program 

13 shall be to support a significant acceleration of gasifi14 cation technology deployment in industrial applications 

15 to— 

16 (1) reduce the demand pressure on domestic 

17 natural gas prices and supply for all consumers by 

18 promoting the use of synthesis gas derived from do19 mestic coal, biomass, petroleum residues, and other 

20 domestic fuel sources for industrial use; 

21 (2) promote the use of those fuel sources in an 

22 environmentally benign manner; 

23 (3) preserve domestic jobs; 

24 (4) reduce the deficit of the United States as of 

25 the date of enactment of this Act; 
47 

•S 1133 IS

1 (5) reduce imports of energy from foreign 

2 sources; 

3 (6) avoid dependence on remote foreign sources 

4 for chemicals, ammonia-based fertilizers, and other 

5 strategic products for which natural gas has tradi6 tionally been a significant component in the manu7 facturing process; 

8 (7) promote the position of the United States 

9 as a global leader in advanced gasification tech10 nology development and sales of related products; 

11 (8) promote the potential for future use or se12 questration of industrial carbon emissions in an effi13 cient manner; 

14 (9) provide coordination within the Department 

15 for research, development, and demonstration of in16 dustrial gasification technologies using a diverse fuel 

17 mix; and 

18 (10) support the deployment of industrial gas19 ification technologies that will produce or displace, 

20 by 2020, the equivalent of 1.5 trillion cubic feet of 

21 natural gas annually. 

22 SEC. 202. DEFINITIONS. 

23 In this title: 

24 (1) BIOMASS.— 
48 

•S 1133 IS

1 (A) IN GENERAL.—The term ‘‘biomass’’ 

2 means— 

3 (i) any agricultural or plant waste; 

4 (ii) byproduct of wood or paper mill 

5 operations, including lignin in spent 

6 pulping liquors; and 

7 (iii) other products of forestry mainte8 nance. 

9 (B) EXCLUSION.—The term ‘‘biomass’’ 

10 does not include paper that is commonly recy11 cled. 

12 (2) CARBON CAPTURE CAPABILITY.—The term 

13 ‘‘carbon capture capability’’ means an industrial gas14 ification plant design that is determined by the Sec15 retary to reflect reasonable consideration for, and be 

16 capable of, accommodating the equipment likely to 

17 be necessary to capture carbon dioxide from the gas18 eous stream, for later use or sequestration, that 

19 would otherwise be emitted in the flue gas from a 

20 project that uses a nonrenewable fuel. 

21 (3) COAL.—The term ‘‘coal’’ means any carbon22 ized or semicarbonized matter, including peat. 

23 (4) COPRODUCED POWER.—The term ‘‘copro24 duced power’’ means heat, steam, or electricity de25 rived from a plant or plant product. 
49 

•S 1133 IS

1 (5) ELIGIBLE ENTITY.—The term ‘‘eligible enti2 ty’’ means any person whose application for Federal 

3 assistance under subtitle A, or whose application for 

4 certification under subtitle B, is principally intended 

5 for use in a domestic project that employs domestic 

6 gasification applications related to— 

7 (A) chemicals; 

8 (B) fertilizers; 

9 (C) glass; 

10 (D) steel; 

11 (E) petroleum residues; 

12 (F) forest products; and 

13 (G) agriculture, including feedlots and 

14 dairy operations. 

15 (6) GASIFICATION TECHNOLOGY.—The term 

16 ‘‘gasification technology’’ means any process that 

17 converts a solid or liquid product from coal, petro18 leum residue, biomass, or other materials that are 

19 recovered for their energy or feedstock value into a 

20 synthesis gas composed primarily of carbon mon21 oxide and hydrogen for direct use or subsequent 

22 chemical or physical conversion. 

23 (7) INDUSTRIAL GASIFICATION PROJECT.—The 

24 term ‘‘industrial gasification project’’ means any 

25 project that— 
50 

•S 1133 IS

1 (A) employs gasification technology; and 

2 (B) will be carried out by an eligible entity. 

3 (8) PETROLEUM RESIDUE.—The term ‘‘petro4 leum residue’’ means the carbonized product of high5 boiling hydrocarbon fractions obtained in petroleum 

6 processing. 

7 (9) TOTAL PLANT INVESTMENT.—The term 

8 ‘‘total plant investment’’ means the total project cost 

9 for engineering, design, procurement, construction, 

10 project development and financing, and reasonable 

11 contingency reserves as agreed upon by the Sec12 retary and the project sponsor. 

13 Subtitle A—Industrial Gasification 

14 Research, Development, and 

15 Demonstration Program 

16 SEC. 211. ESTABLISHMENT. 

17 (a) IN GENERAL.—The Secretary shall establish an 

18 industrial gasification technology research, development, 

19 and demonstration program to facilitate production of 

20 synthesis gas, chemical feedstocks, ammonia-based fer21 tilizers, or liquid transportation fuels and generation of 

22 coproduced power, through methods and equipment 

23 under— 

24 (1) this subtitle; 
51 

•S 1133 IS

1 (2) the Federal Nonnuclear Energy Research 

2 and Development Act of 1974 (42 U.S.C. 5901 et 

3 seq.); 

4 (3) the Energy Reorganization Act of 1974 (42 

5 U.S.C. 5801 et seq.); and 

6 (4) title XVI of the Energy Policy Act of 1992 

7 (42 U.S.C. 13381 et seq.). 

8 (b) CONDITIONS.—The program described in sub9 section (a) shall be designed to achieve the cost and per10 formance goals established under section 212. 

11 (c) OFFICE OF INDUSTRIAL GASIFICATION COORDI12 NATION.—The Secretary shall establish an Office of In13 dustrial Gasification Coordination that shall— 

14 (1) report directly to the Secretary; 

15 (2) analyze the strategic and economic con16 sequences of natural gas dependency in the indus17 trial and agricultural sectors; 

18 (3) prepare biannual plans for the development 

19 and deployment of industrial gasification tech20 nologies that may be capable of reducing this de21 pendence in a manner that is cost-effective for the 

22 United States as a whole; 

23 (4) not later than 180 days after the date of 

24 enactment of this Act and thereafter not later than 

25 the first day of March every 2 years through 2016, 
52 

•S 1133 IS

1 in coordination with the study under section 213, 

2 submit the biannual plan to— 

3 (A) the Committee on Energy and Com4 merce of the House of Representatives; 

5 (B) the Committee on Energy and Natural 

6 Resources of the Senate; and 

7 (C) the Committees on Appropriations; 

8 and 

9 (5) make recommendations to the Secretary to 

10 coordinate gasification research and associated ex11 penditures among the several relevant programs of 

12 the Department. 

13 SEC. 212. COST AND PERFORMANCE GOALS. 

14 (a) IN GENERAL.—The Secretary shall perform an 

15 assessment that identifies cost and performance goals of 

16 industrial gasification technologies the deployment of 

17 which would permit the continued cost-competitive gasifi18 cation of the fuels identified in section 202(6) to— 

19 (1) produce chemical feedstocks or ammonia20 based fertilizers; 

21 (2) produce liquid transportation fuels; and 

22 (3) coproduce power. 

23 (b) CONSULTATION.—In establishing the cost and 

24 performance goals, the Secretary shall— 
53 

•S 1133 IS

1 (1) consider activities and studies undertaken 

2 to date by industry in cooperation with the Depart3 ment in support of the assessment described in sub4 section (a); 

5 (2) consult with interested entities, including— 

6 (A) coal producers; 

7 (B) industries using the fuels identified in 

8 section 202(6); 

9 (C) organizations that promote fuels iden10 tified in section 202(6) and advanced gasifi11 cation technologies that use those fuels; 

12 (D) environmental organizations; 

13 (E) organizations representing workers; 

14 (F) organizations representing consumers; 

15 and 

16 (3) consult with the Administrator of the Envi17 ronmental Protection Agency and the Secretary of 

18 Agriculture. 

19 (c) TIMING.—The Secretary shall— 

20 (1) not later than 120 days after the date of 

21 enactment of this Act, issue a set of draft cost and 

22 performance goals for public comment; and 

23 (2) not later than 180 days after the date of 

24 enactment of this Act, after taking into consider25 ation any public comments received, submit to Con-
54 

•S 1133 IS

1 gress a description of the final cost and performance 

2 goals. 

3 SEC. 213. STUDY. 

4 (a) IN GENERAL.—Not later than 1 year after the 

5 date of enactment of this Act, and once every 2 years 

6 thereafter through 2016, the Secretary, in cooperation 

7 with other appropriate Federal agencies, shall conduct a 

8 study to— 

9 (1) identify industrial gasification technologies 

10 that, alone or in combination with other tech11 nologies, may be capable of achieving the cost and 

12 performance goals; 

13 (2) assess the costs that would be incurred by, 

14 and the period of time that would be required for, 

15 the development and demonstration of industrial 

16 gasification technologies that, alone or in combina17 tion with other technologies, contribute to the 

18 achievement of the cost and performance goals; 

19 (3) develop recommendations for industrial gas20 ification technology development programs that the 

21 Department could carry out in cooperation with in22 dustry, to develop, demonstrate, and deploy tech23 nologies that, alone or in combination with other 

24 technologies, achieve the cost and performance goals; 

25 and 
55 

•S 1133 IS

1 (4) develop recommendations for additional au2 thorities required to achieve the industrial gasifi3 cation cost and performance goals, and review and 

4 recommend changes, if any, to those cost and per5 formance goals if the Secretary determines that the 

6 changes are necessary as a result of ongoing re7 search, development, demonstration, and deployment 

8 of technologies. 

9 (b) COOPERATION.—In carrying out this section, the 

10 Secretary shall give due weight to the expert advice of rep11 resentatives of the entities described in section 212(b)(2). 

12 SEC. 214. AUTHORIZATION OF APPROPRIATIONS. 

13 (a) AUTHORIZATION.— 

14 (1) IN GENERAL.—There are authorized to be 

15 appropriated to the Secretary to carry out activities 

16 described in paragraph (2), to remain available until 

17 expended— 

18 (A) $80,000,000 for fiscal year 2006; 

19 (B) $100,000,000 for fiscal year 2007; 

20 (C) $150,000,000 for fiscal year 2008; 

21 (D) $160,000,000 for fiscal year 2009; 

22 and 

23 (E) $120,000,000 for fiscal year 2010. 

24 (2) ACTIVITIES.—Activities covered by para25 graph (1) are industrial gasification and related 
56 

•S 1133 IS

1 technologies research, development, and demonstra2 tion programs, including— 

3 (A) innovations for existing plants; 

4 (B) industrial-scale turbines (less than 

5 50MW) for synthesis gas derived from the fuels 

6 identified in section 202(6); 

7 (C) synthesis gas, chemicals feedstocks, 

8 ammonia-based fertilizers, and transportation 

9 liquid fuels derived from the fuels identified in 

10 section 202(6); and 

11 (D) collection and gasification of biomass. 

12 (b) LIMIT ON USE OF FUNDS.— 

13 (1) IN GENERAL.—Before the use of funds au14 thorized by subsection (a), the Secretary shall sub15 mit to Congress a report that— 

16 (A) describes the proposed use of funds; 

17 and 

18 (B) contains a plan that includes— 

19 (i) a detailed description of how any 

20 proposals will be solicited and evaluated, 

21 including a list of all activities expected to 

22 be undertaken; 

23 (ii) a detailed list of technical mile24 stones for each fuel application and related 

25 technology that will be pursued; and 
57 

•S 1133 IS

1 (iii) a description of how the programs 

2 authorized by this section will be carried 

3 out so as to complement and not duplicate 

4 activities authorized under— 

5 (I) the Industries of the Future 

6 Program; 

7 (II) the Biomass Program; 

8 (III) the Clean Coal Power Ini9 tiative; and 

10 (IV) other programs and authori11 ties being carried out by the Sec12 retary. 

13 (2) WAITING PERIOD.—The Secretary may not 

14 use any funds authorized by subsection (a) before 

15 the date that is 30 days after the date of receipt by 

16 Congress of the report required by paragraph (1). 

17 Subtitle B—Industrial Gasification 

18 Deployment Program 

19 SEC. 221. ESTABLISHMENT OF CERTIFICATION PROGRAM. 

20 (a) IN GENERAL.—The Secretary shall establish a 

21 competitive program to consider and award certifications 

22 for investment and production tax credits to industrial 

23 gasification project sponsors. 

24 (b) COMPETITIVE AWARDS.— 
58 

•S 1133 IS

1 (1) IN GENERAL.—Not later than 270 days 

2 after the date of enactment of this Act, and every 

3 2 years thereafter through 2016, the Secretary, in 

4 consultation with the Secretary of the Treasury and 

5 the Secretary of Agriculture, shall carry out a com6 petitive solicitation for the award of certifications 

7 that entitle the recipients to specific investment and 

8 production tax credits associated with the year of 

9 certification as described in section 45J of the Inter10 nal Revenue Code of 1986 (as added by section 

11 222(a)). 

12 (2) COMPETITIVE CERTIFICATION PROCESS.— 

13 Notwithstanding the limitations imposed in section 

14 45J of the Internal Revenue Code of 1986 (as added 

15 by section 222(a)), the Secretary may during a bian16 nual competitive certification process deem that a 

17 certification award be considered as having been 

18 awarded up to 4 years earlier than the actual date 

19 of certification for not more than 2 projects that the 

20 Secretary determines use a technology that has not 

21 previously been deployed. 

22 (c) APPLICATIONS LIMITED TO ELIGIBLE ENTI23 TIES.—A project sponsor shall be eligible to compete for 

24 the tax credit certifications awarded competitively by the 

25 Secretary under subsection (a) only if— 
59 

•S 1133 IS

1 (1) the project sponsor is an eligible entity; and 

2 (2) the project of the project sponsor advances 

3 the purposes described in section 201. 

4 (d) SELECTION CRITERIA.—The Secretary shall not 

5 make a competitive certification award for production tax 

6 credit eligibility unless the recipient has documented to the 

7 satisfaction of the Secretary that— 

8 (1) the award recipient is financially viable 

9 without the receipt of additional Federal funding as10 sociated with the proposed project; 

11 (2) the recipient will provide sufficient informa12 tion to the Secretary for the Secretary to ensure 

13 that the award funds are spent efficiently and effec14 tively; 

15 (3) a market exists for the products of the pro16 posed deployment project as evidenced by contracts 

17 or written statements of intent from potential cus18 tomers; 

19 (4) the fuels identified in section 202(6) will 

20 comprise at least 90 percent of the fuels required by 

21 the project for the production of chemical feedstocks, 

22 liquid transportation fuels, or coproduction of elec23 tricity; 

24 (5) the award recipient’s project team is com25 petent in the construction and operation of the gas-
60 

•S 1133 IS

1 ification technology proposed, with preference given 

2 to those recipients with experience that demonstrates 

3 successful and reliable operations of the technology 

4 on domestic fuels identified in section 202(6); and 

5 (6) the award recipient has met other criteria 

6 established and published by the Secretary. 

7 (e) COMBINED LIMIT FOR THE USE OF MORE THAN

8 ONE FEDERAL CREDIT, LOAN OR LOAN GUARANTEE.— 

9 The allowable combined value of all credits, loans or loan 

10 guarantees claimed in association with any single certified 

11 industrial gasification property is limited to the project 

12 total credit limit associated with the project’s year of cer13 tification or deemed year of certification as determined 

14 under section 221 of the Clean Coal Research, Develop15 ment, Demonstration, and Deployment Act of 2005. 

16 SEC. 222. CREDIT FOR PRODUCTION FROM CERTIFIED IN17 DUSTRIAL GASIFICATION PROJECTS. 

18 (a) IN GENERAL.—Subpart D of part IV of sub19 chapter A of chapter 1 of the Internal Revenue Code of 

20 1986 (relating to business related credits) is amended by 

21 adding at the end the following new section: 

22 ‘‘SEC. 45J. CREDIT FOR PRODUCTION FROM CERTIFIED IN23 DUSTRIAL GASIFICATION PROJECTS. 

24 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

25 synthesis gas production tax credit for any taxable year 
61 

•S 1133 IS

1 is determined by the year in which the taxpayer’s indus2 trial gasification project is certified or deemed certified in 

3 accordance with the provisions of section 221 of the Clean 

4 Coal Research, Development, Demonstration, and Deploy5 ment Act of 2005. 

6 ‘‘(b) DETERMINATION OF CREDIT AMOUNT.— 

7 ‘‘(1) IN GENERAL.— 

8 ‘‘(A) IN GENERAL.—With respect to each 

9 industrial gasification project sponsor, the syn10 thesis gas production tax credit for all taxable 

11 years shall not exceed the credit value per-mil12 lion-Btu’s and project total credit limitation as13 sociated with the project’s year of certification 

14 or deemed year of certification as specified in 

15 the following table: 

Year of certification Number of project 

certifications 

Credit value per 

million Btu’s 

Project total 

credit limit 

2006 ......................... 3 ............................... $.62 .......................... $174,000,000 

2008 ......................... 3 ............................... $.496 ........................ $116,725,000 

2010 ......................... 4 ............................... $.397 ........................ $77,855,575 

2012 ......................... 7 ............................... $.317 ........................ $51,929.669 

2014 ......................... 10 ............................. $.254 ........................ $34,637,089 

2016 ......................... 14 ............................. $.203 ........................ $23,102,938 

16 ‘‘(B) INFLATION ADJUSTMENT.— 

17 ‘‘(i) IN GENERAL.—For calendar 

18 years after 2006, each amount in the third 

19 and fourth columns of the table contained 

20 in subparagraph (A) shall be adjusted by 
62 

•S 1133 IS

1 multiplying such amount by the inflation 

2 adjustment factor for the calendar year in 

3 which the amount is applied. If any 

4 amount in such third column as increased 

5 under the preceding sentence is not a mul6 tiple of 0.01 cent, such amount shall be 

7 rounded to the nearest multiple of 0.01 

8 cent. If any amount in such fourth column 

9 is increased under the preceding sentence 

10 is not a multiple of $50, such amount shall 

11 be rounded to the nearest multiple of $50. 

12 ‘‘(ii) INFLATION ADJUSTMENT FAC13 TOR.—For purposes of clause (i)— 

14 ‘‘(I) IN GENERAL.—The term ‘in15 flation adjustment factor’ means, with 

16 respect to a calendar year, a fraction 

17 the numerator of which is the GDP 

18 implicit price deflator for the pre19 ceding calendar year and the denomi20 nator of which is the GDP implicit 

21 price deflator for the calendar year 

22 2005. 

23 ‘‘(II) GDP IMPLICIT PRICE

24 DEFLATOR.—The term ‘GDP implicit 

25 price deflator’ means, for any cal-
63 

•S 1133 IS

1 endar year, the most recent revision of 

2 the implicit price deflator for the 

3 gross domestic product as of June 30 

4 of such calendar year as computed by 

5 the Department of Commerce before 

6 October 1 of such calendar year. 

7 ‘‘(2) LIMITATIONS.— 

8 ‘‘(A) CREDIT LIMITED BY PROJECT IN9 VESTMENT.—The credit amount for any indus10 trial gasification project otherwise determined 

11 under this section shall not exceed an amount 

12 equal to 20 percent of the total plant invest13 ment made in such project. 

14 ‘‘(B) CREDIT LIMITED BY BTU’S CON15 SUMED IN PRODUCTION OF ELECTRICITY.—Not 

16 more than 60 percent of the credit amount for 

17 any industrial gasification project otherwise de18 termined under this section for any taxable year 

19 may be attributable to Btu’s consumed in the 

20 production of electricity. 

21 ‘‘(3) ADDITIONAL CREDIT AMOUNT.—The credit 

22 amount and project total credit limit for any indus23 trial gasification project otherwise determined under 

24 this section (determined without regard to para25 graph (2)) shall be increased by 30 percent for any 
64 

•S 1133 IS

1 synthises gas produced and used for purposes other 

2 than coproduced power (as defined in section 202(4) 

3 of the Clean Coal Research, Development, Dem4 onstration, and Deployment Act of 2005. 

5 ‘‘(c) EXCEPTION FOR DEPLOYMENT OF NEW TECH6 NOLOGIES.—Notwithstanding subsection (b), the Sec7 retary may during a competitive certification process as8 sign credit values and total project credit value limitations 

9 associated with certification periods not to exceed 4 years 

10 prior to the current year of awards to not more than 2 

11 industrial gasification projects which the Secretary deter12 mines are particularly consistent with the program pur13 poses in section 201(b) of the Clean Coal Research, Devel14 opment, Demonstration, and Deployment Act of 2005 and 

15 which utilize a technology that has not previously been de16 ployed. 

17 ‘‘(d) TREATMENT OF PERSON NOT ABLE TO USE

18 ENTIRE CREDIT.— 

19 ‘‘(1) ALLOWANCE OF CREDITS.— 

20 ‘‘(A) IN GENERAL.—Any credit allowable 

21 under this section or section 46(2) by reason of 

22 section 48(a)(3)(A)(iv) with respect to a facility 

23 owned by a person described in subparagraph 

24 (B) may be transferred or used as provided in 

25 this subsection, and the determination as to 
65 

•S 1133 IS

1 whether the credit is allowable shall be made 

2 without regard to the tax-exempt status of the 

3 person. 

4 ‘‘(B) PERSONS DESCRIBED.—A person is 

5 described in this subparagraph if the person 

6 is— 

7 ‘‘(i) an organization described in sec8 tion 501(c)(12)(C) and exempt from tax 

9 under section 501(a), 

10 ‘‘(ii) an organization described in sec11 tion 1381(a)(2)(C), 

12 ‘‘(iii) a public utility (as defined in 

13 section 136(c)(2)(B)), 

14 ‘‘(iv) any State or political subdivision 

15 thereof, the District of Columbia, or any 

16 agency or instrumentality of any of the 

17 foregoing, 

18 ‘‘(v) any Indian tribal government 

19 (within the meaning of section 7871) or 

20 any agency or instrumentality thereof, or 

21 ‘‘(vi) the Tennessee Valley Authority. 

22 ‘‘(2) TRANSFER OF CREDIT.— 

23 ‘‘(A) IN GENERAL.—A person described in 

24 clause (i), (ii), (iii), (iv), or (v) of paragraph 

25 (1)(B) may transfer any credit to which para-
66 

•S 1133 IS

1 graph (1)(A) applies through an assignment to 

2 any other person not described in paragraph 

3 (1)(B). Such transfer may be revoked only with 

4 the consent of the Secretary. 

5 ‘‘(B) REGULATIONS.—The Secretary shall 

6 prescribe such regulations as necessary to en7 sure that any credit described in subparagraph 

8 (A) is claimed once and not reassigned by such 

9 other person. 

10 ‘‘(C) TRANSFER PROCEEDS TREATED AS

11 ARISING FROM ESSENTIAL GOVERNMENT FUNC12 TION.—Any proceeds derived by a person de13 scribed in clause (iii), (iv), or (v) of paragraph 

14 (1)(B) from the transfer of any credit under 

15 subparagraph (A) shall be treated as arising 

16 from the exercise of an essential government 

17 function. 

18 ‘‘(D) CREDIT NOT INCOME.—Any transfer 

19 under subparagraph (A) of any credit to which 

20 paragraph (1)(A) applies shall not be treated as 

21 income for purposes of section 501(c)(12). 

22 ‘‘(3) USE BY TVA.— 

23 ‘‘(A) IN GENERAL.—Notwithstanding any 

24 other provision of law, in the case of a person 

25 described in paragraph (1)(B)(vi), any credit to 
67 

•S 1133 IS

1 which paragraph (1)(A) applies may be applied 

2 as a credit against the payments required to be 

3 made in any fiscal year under section 15d(e) of 

4 the Tennessee Valley Authority Act of 1933 (16 

5 U.S.C. 831n–4(e)) as an annual return on the 

6 appropriations investment and an annual repay7 ment sum. 

8 ‘‘(B) TREATMENT OF CREDITS.—The ag9 gregate amount of credits described in para10 graph (1)(A) with respect to such person shall 

11 be treated in the same manner and to the same 

12 extent as if such credits were a payment in cash 

13 and shall be applied first against the annual re14 turn on the appropriations investment. 

15 ‘‘(C) CREDIT CARRYOVER.—With respect 

16 to any fiscal year, if the aggregate amount of 

17 credits described paragraph (1)(A) with respect 

18 to such person exceeds the aggregate amount of 

19 payment obligations described in subparagraph 

20 (A), the excess amount shall remain available 

21 for application as credits against the amounts 

22 of such payment obligations in succeeding fiscal 

23 years in the same manner as described in this 

24 paragraph. 
68 

•S 1133 IS

1 ‘‘(4) TREATMENT OF UNRELATED PERSONS.— 

2 For purposes of this subsection, transfers among 

3 and between persons described in clauses (i), (ii), 

4 (iii), (iv), and (v) of paragraph (1)(B) shall be treat5 ed as transfers between unrelated parties. 

6 ‘‘(e) APPLICABLE RULES.—For purposes of this sec7 tion, the rules of paragraphs (3), (4), and (5) of section 

8 45(e) shall apply.’’. 

9 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec10 tion 38(b) of the Internal Revenue Code of 1986 (relating 

11 to current year business credit) is amended by striking 

12 ‘‘plus’’ at the end of paragraph (18), by striking the period 

13 at the end of paragraph (19) and inserting ‘‘, plus’’, and 

14 by adding at the end the following new paragraph: 

15 ‘‘(20) the synthesis gas production tax credit 

16 determined under section 45J(a).’’. 

17 (c) DENIAL OF DOUBLE BENEFIT.—Section 29(d) of 

18 the Internal Revenue Code of 1986 (relating to other defi19 nitions and special rules) is amended by adding at the end 

20 the following new paragraph: 

21 ‘‘(9) DENIAL OF DOUBLE BENEFIT.—This sec22 tion shall not apply with respect to any qualified fuel 

23 the production of which may be taken into account 

24 for purposes of determining the credit under section 

25 45J.’’. 
69 

•S 1133 IS

1 (d) CLERICAL AMENDMENT.—The table of sections 

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

3 of the Internal Revenue Code of 1986 is amended by add4 ing at the end the following new item: 

‘‘Sec. 45J. Credit for production from certified industrial gasification 

projects.’’. 

5 (e) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to production after the date of the 

7 enactment of this Act, in taxable years ending after such 

8 date. 

9 SEC. 223. INVESTMENT TAX CREDIT FOR CERTIFIED INDUS10 TRIAL GASIFICATION PROJECTS. 

11 (a) IN GENERAL.—Section 48 (a)(3)(A) of the Inter12 nal Revenue Code of 1986 (relating to energy property), 

13 as amended by this Act, is amended— 

14 (1) by striking ‘‘or’’ at the end of clause (ii), 

15 (2) by inserting ‘‘or’’ at the end of clause (iii), 

16 and 

17 (3) by adding at the end the following new 

18 clause: 

19 ‘‘(iv) certified industrial gasification 

20 property,’’. 

21 (b) CREDIT RATE.—Section 48(a)(2)(A) of the Inter22 nal Revenue Code of 1986 (relating to energy percentage), 

23 as amended by this Act, is amended by inserting ‘‘or a 
70 

•S 1133 IS

1 certified industrial gasification property’’ after ‘‘certified 

2 coal property’’ both places it appears. 

3 (c) DEFINITIONS.—Section 48 of the Internal Rev4 enue Code of 1986 (relating to energy credit), as amended 

5 by this Act, is amended by adding the following new sub6 section: 

7 ‘‘(d) CERTIFIED INDUSTRIAL GASIFICATION PROP8 ERTY.—For purposes of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘certified indus10 trial gasification property’ means any property that 

11 is part of an industrial gasification project as de12 fined in section 202(7) of the Clean Coal Research, 

13 Development, Demonstration, and Deployment Act 

14 of 2005 and that has been certified by the Secretary 

15 of Energy under section 221 of that Act. 

16 ‘‘(2) LIMIT ON USE OF CREDITS.—Any credit 

17 claimed by a taxpayer under section 46(2) by reason 

18 of subsection (a)(3)(A)(iv) shall be limited to the 

19 project total credit limit associated with the project’s 

20 year of certification or deemed year of certification 

21 as determined under section 221 of the Clean Coal 

22 Research, Development, Demonstration, and Deploy23 ment Act of 2005.’’. 

Æ 
71

•S 1133 IS

1 fined in section 202(7) of the Clean Coal Research, 

2 Development, Demonstration, and Deployment Act 

3 of 2005 and that has been certified by the Secretary 

4 of Energy under section 221 of that Act. 

5 ‘‘(2) LIMIT ON USE OF CREDITS.—Any credit 

6 claimed by a taxpayer under section 46(2) by reason 

7 of subsection (a)(3)(A)(iv) shall be limited to the 

8 project total credit limit associated with the project’s 

9 year of certification or deemed year of certification 

10 as determined under section 221 of the Clean Coal 

11 Research, Development, Demonstration, and Deploy12 ment Act of 2005.’’.

Æ