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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5653 Introduced in House (IH)]

109th CONGRESS
  2d Session
                                H. R. 5653

  To amend the Internal Revenue Code of 1986 to promote investment in 
energy independence through coal to liquid technology, biomass, and oil 
                                 shale.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 20, 2006

Mr. Lewis of Kentucky 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 promote investment in 
energy independence through coal to liquid technology, biomass, and oil 
                                 shale.

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

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Investment in 
Energy Independence Act of 2006''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
Sec. 2. Credit for investment in coal-to-liquid fuels projects.
Sec. 3. Temporary expensing for equipment used in coal-to-liquid fuels 
                            process.
Sec. 4. Expansion and extension of alternative fuel credit.
Sec. 5. Modifications to enhanced oil, natural gas, and coalbed methane 
                            recovery credit.
Sec. 6. Allowance of enhanced oil, natural gas, and coalbed methane 
                            recovery credit against the alternative 
                            minimum tax.
Sec. 7. Expansion of expensing of oil and alternative fuel refineries.
Sec. 8. Expensing for conversion of natural gas-fired facilities for 
                            the production ethanol to coal-fired 
                            facilities.

SEC. 2. CREDIT FOR INVESTMENT IN COAL-TO-LIQUID FUELS PROJECTS.

    (a) In General.--Section 46 of the Internal Revenue Code of 1986 
(relating to amount of credit) is amended by striking ``and'' at the 
end of paragraph (3), by striking the period at the end of paragraph 
(4) and inserting ``, and'', and by adding at the end the following new 
paragraph:
            ``(5) the qualifying coal-to-liquid fuels project 
        credit.''.
    (b) Amount of Credit.--Subpart E of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to rules for 
computing investment credit) is amended by inserting after section 48B 
the following new section:

``SEC. 48C. QUALIFYING COAL-TO-LIQUID FUELS PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying coal-
to-liquid fuels project credit for any taxable year is an amount equal 
to 20 percent of the qualified investment for such taxable year.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment for any taxable year is the basis of 
        property placed in service by the taxpayer during such taxable 
        year which is part of a qualifying coal-to-liquid fuels 
        project--
                    ``(A)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer, and
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(2) Applicable rules.--For purposes of this section, 
        rules similar to the rules of subsection (a)(4) and (b) of 
        section 48 shall apply.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualifying coal-to-liquid fuels project.--The term 
        `qualifying coal-to-liquid fuels project' means any domestic 
        project which--
                    ``(A) employs the Fischer-Tropsch process to 
                produce at least 5,000 barrels per day of 
                transportation grade liquid fuels from coal, including 
                any property which allows for the capture, 
                transportation, or sequestration of by-products 
                resulting from such process, including carbon 
                emissions, and
                    ``(B) any portion of the qualified investment in 
                which is certified under the qualifying coal-to-liquid 
                program as eligible for credit under this section in an 
                amount (not to exceed $200,000,000) determined by the 
                Secretary.
            ``(2) Coal.--The term `coal' means any carbonized or 
        semicarbonized matter, including peat and biomass.
            ``(3) Biomass.--The term `biomass' means any organic 
        material other than oil and natural gas (or any product 
        thereof).
    ``(d) Qualifying Coal-to-Liquid Fuels Project Program.--
            ``(1) In general.--The Secretary, in consultation with the 
        Secretary of Energy, shall establish a qualifying coal-to-
        liquid fuels project program to consider and award 
        certifications for qualified investment eligible for credits 
        under this section to 10 qualifying coal-to-liquid fuels 
        project sponsors under this section, not less than 2 of which 
        shall not have the capacity to produce more than 10,000 barrels 
        of transportation grade liquid fuels from coal per day. The 
        total qualified investment which may be awarded eligibility for 
        credit under the program shall not exceed $2,000,000,000.
            ``(2) Period of issuance.--A certificate of eligibility 
        under paragraph (1) may be issued only during the 10-fiscal 
        year period beginning on October 1, 2006.
            ``(3) Selection criteria.--The Secretary shall not make a 
        competitive certification award for qualified investment for 
        credit eligibility under this section unless the recipient has 
        documented to the satisfaction of the Secretary that--
                    ``(A) the award recipient is financially viable 
                without the receipt of additional Federal funding 
                associated with the proposed project,
                    ``(B) the recipient will provide sufficient 
                information to the Secretary for the Secretary to 
                ensure that the qualified investment is spent 
                efficiently and effectively,
                    ``(C) a market exists for the products of the 
                proposed project as evidenced by contracts or written 
                statements of intent from potential customers,
                    ``(D) the fuels identified with respect to the 
                gasification technology for such project will comprise 
                at least 90 percent of the fuels required by the 
                project for the production of transportation grade 
                liquid fuels,
                    ``(E) the award recipient's project team is 
                competent in the construction and operation of the 
                Fischer-Tropsch process, with preference given to those 
                recipients with experience which demonstrates 
                successful and reliable operations of such process, and
                    ``(F) the award recipient has met other criteria 
                established and published by the Secretary.
    ``(e) Denial of Double Benefit.--No deduction or other credit shall 
be allowed with respect to the basis of any property taken into account 
in determining the credit allowed under this section.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
        1986 is amended by striking ``and'' at the end of clause (iii), 
        by striking the period at the end of clause (iv) and inserting 
        ``, and'', and by adding after clause (iv) the following new 
        clause:
                            ``(v) the basis of any property which is 
                        part of a qualifying coal-to-liquid fuels 
                        project under section 48C.''.
            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 48B the following new item:

``Sec. 48C. Qualifying coal-to-liquid fuels project credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act, under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990).

SEC. 3. TEMPORARY EXPENSING FOR EQUIPMENT USED IN COAL-TO-LIQUID FUELS 
              PROCESS.

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

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

    ``(a) Treatment as Expenses.--A taxpayer may elect to treat the 
cost of any qualified coal-to-liquid fuels process property as an 
expense which is not chargeable to capital account. Any cost so treated 
shall be allowed as a deduction for the taxable year in which the 
expense is incurred.
    ``(b) Election.--
            ``(1) In general.--An election under this section for any 
        taxable year shall be made on the taxpayer's return of the tax 
        imposed by this chapter for the taxable year. Such election 
        shall be made in such manner as the Secretary may by 
        regulations prescribe.
            ``(2) Election irrevocable.--Any election made under this 
        section may not be revoked except with the consent of the 
        Secretary.
    ``(c) Qualified Coal-to-Liquid Fuels Process Property.--The term 
`qualified coal-to-liquid fuels process property' means any property 
located in the United States--
            ``(1) which employs the Fischer-Tropsch process to produce 
        transportation grade liquid fuels from coal (as defined in 
        section 48C(c)(2)), including any property which allows for the 
        capture, transportation, or sequestration of by-products 
        resulting from such process, including carbon emissions,
            ``(2) the original use of which commences with the 
        taxpayer,
            ``(3) the construction of which--
                    ``(A) except as provided in subparagraph (B), is 
                subject to a binding construction contract entered into 
                after the date of the enactment of this section and 
                before January 1, 2011, but only if there was no 
                written binding construction contract entered into on 
                or before such date of enactment, or
                    ``(B) in the case of self-constructed property, 
                began after the date of the enactment of this section 
                and before January 1, 2011, and
            ``(4) which is placed in service by the taxpayer after the 
        date of the enactment of this section and before January 1, 
        2016.
    ``(d) Election To Allocate Deduction to Cooperative Owner.--If--
            ``(1) a taxpayer to which subsection (a) applies is an 
        organization to which part I of subchapter T applies, and
            ``(2) one or more persons directly holding an ownership 
        interest in the taxpayer are organizations to which part I of 
        subchapter T apply,
the taxpayer may elect to allocate all or a portion of the deduction 
allowable under subsection (a) to such persons. Such allocation shall 
be equal to the person's ratable share of the total amount allocated, 
determined on the basis of the person's ownership interest in the 
taxpayer. The taxable income of the taxpayer shall not be reduced under 
section 1382 by reason of any amount to which the preceding sentence 
applies.
    ``(e) Basis Reduction.--
            ``(1) In general.--For purposes of this title, if a 
        deduction is allowed under this section with respect to any 
        qualified coal-to-liquid fuels process property, the basis of 
        such property shall be reduced by the amount of the deduction 
        so allowed.
            ``(2) Ordinary income recapture.--For purposes of section 
        1245, the amount of the deduction allowable under subsection 
        (a) with respect to any property which is of a character 
        subject to the allowance for depreciation shall be treated as a 
        deduction allowed for depreciation under section 167.
    ``(f) Application With Other Deductions and Credits.--
            ``(1) Other deductions.--No deduction shall be allowed 
        under any other provision of this chapter with respect to any 
        expenditure with respect to which a deduction is allowed under 
        subsection (a) to the taxpayer.
            ``(2) Credits.--No credit shall be allowed under section 38 
        with respect to any amount for which a deduction is allowed 
        under subsection (a).
    ``(g) Reporting.--No deduction shall be allowed under subsection 
(a) to any taxpayer for any taxable year unless such taxpayer files 
with the Secretary a report containing such information with respect to 
the operation of the property of the taxpayer as the Secretary shall 
require.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986 is 
        amended by striking ``and'' at the end of paragraph (36), by 
        striking the period at the end of paragraph (37) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(38) to the extent provided in section 179E(e)(1).''.
            (2) Section 1245(a) of such Code is amended by inserting 
        ``179E,'' after ``179D,'' both places it appears in paragraphs 
        (2)(C) and (3)(C).
            (3) Section 263(a)(1) of such Code is amended by striking 
        ``or'' at the end of subparagraph (J), by striking the period 
        at the end of subparagraph (K) and inserting ``, or'', and by 
        inserting after subparagraph (K) the following new 
        subparagraph:
                    ``(L) expenditures for which a deduction is allowed 
                under section 179E.''.
            (4) Section 312(k)(3)(B) of such Code is amended by 
        striking ``or 179D'' each place it appears in the heading and 
        text and inserting ``179D, or 179E''.
            (5) The table of sections for part VI of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 179D the following new item:

``Sec. 179E. Election to expense certain coal-to-liquid fuels 
                            facilities.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to properties placed in service after the date of the enactment 
of this Act.

SEC. 4. EXPANSION AND EXTENSION OF ALTERNATIVE FUEL CREDIT.

    (a) Expansion.--
            (1) Paragraph (2) of section 6426(d) of the Internal 
        Revenue Code of 1986 (defining alternative fuel) is amended by 
        striking ``and'' at the end of subparagraph (E), by striking 
        the period at the end of subparagraph (F) and inserting ``, 
        and'', and by inserting after subparagraph (F) the following:
                    ``(G) any liquid fuel derived from oil shale 
                extracted in the United States.''.
            (2) Subparagraph (E) of section 6426(d)(2)(d) of such Code 
        is amended by inserting ``and biomass (as defined in section 
        45K(c)(3) without regard to subparagraph (B) thereof)'' after 
        ``peat''.
    (b) Extension.--
            (1) Alternative fuel credit.--Paragraph (4) of section 
        6426(d) of such Code is amended to read as follows:
            ``(4) Termination.--This subsection shall not apply to--
                    ``(A) any sale or use involving liquified hydrogen 
                for any period after September 30, 2020,
                    ``(B) any sale or use involving liquid fuel derived 
                from coal (including peat and biomass) through the 
                Fischer-Tropsch process for any period after September 
                30, 2020,
                    ``(C) any sale or use involving liquid hydrocarbons 
                derived from biomass (as specified in paragraph (2)(F) 
                for any period after September 30, 2020,
                    ``(D) any sale or use involving liquid fuel derived 
                from oil shale for any period after September 30, 2020,
                    ``(E) any other sale or use for any period after 
                September 30, 2009.''.
            (2) Payments.--
                    (A) In general.--Paragraph (5) of section 6427(e) 
                of the Internal Revenue Code of 1986 is amended by 
                striking ``and'' and the end of subparagraph (C), by 
                striking the period at the end of subparagraph (D) and 
                inserting a comma, and by adding at the end the 
                following new subparagraphs:
                    ``(E) any alternative fuel or alternative fuel 
                mixture (as so defined) involving liquid fuel derived 
                from coal (including peat and biomass) through the 
                Fischer-Tropsch process sold or used after September 
                30, 2020, and
                    ``(F) any sale or use involving liquid derived from 
                oil shale for any period after September 30, 2020.''.
                    (B) Conforming amendment.--Section 6427(e)(5)(C) of 
                such Code is amended by striking ``subparagraph (D)'' 
                and inserting ``subparagraphs (D), (E), and (F)''.

SEC. 5. MODIFICATIONS TO ENHANCED OIL, NATURAL GAS, AND COALBED METHANE 
              RECOVERY CREDIT.

    (a) Enhanced Credit for Carbon Dioxide Injections.--Section 43 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(f) Enhanced Credit for Projects Using Qualified Carbon 
Dioxide.--
            ``(1) In general.--For purposes of this section--
                    ``(A) the term `qualified project' includes a 
                project described in paragraph (2), and
                    ``(B) in the case of a project described in 
                paragraph (2), subsection (a) shall be applied by 
                substituting `50 percent' for `15 percent'.
            ``(2) Projects described.--
                    ``(A) In general.--A project is described in this 
                paragraph if--
                            ``(i) the project begins or is 
                        substantially expanded after December 31, 2006, 
                        and
                            ``(ii) the project uses qualified carbon 
                        dioxide in an enhanced oil, natural gas, or 
                        coalbed methane recovery method which involves 
                        flooding or injection.
                    ``(B) Enhanced oil recovery.--For purposes of this 
                subsection, the term `enhanced oil recovery' means 
                recovery of oil by injecting or flooding with qualified 
                carbon dioxide.
                    ``(C) Enhanced natural gas recovery.--The term 
                `enhanced natural gas recovery' means recovery of 
                natural gas by injecting or flooding with qualified 
                carbon dioxide.
                    ``(D) Enhanced coalbed methane recovery.--The term 
                `enhanced coalbed methane recovery' means recovery of 
                coalbed methane by injecting or flooding with qualified 
                carbon dioxide.
                    ``(E) Qualified carbon dioxide.--For purposes of 
                this subsection, the term `qualified carbon dioxide' 
                means carbon dioxide that is--
                            ``(i) separated from natural gas and 
                        natural gas liquids at a natural gas processing 
                        plant, or
                            ``(ii) from any other industrial source.
            ``(3) Termination.--This subsection shall not apply to 
        costs paid or incurred for any qualified enhanced oil recovery 
        project after December 31, 2020.''.
    (b) Conforming Amendments.--
            (1) Section 43 of such Code is amended--
                    (A) in subsection (a) by striking ``enhanced oil 
                recovery credit'' and inserting ``enhanced oil, natural 
                gas, and coalbed methane recovery credit'', and
                    (B) by striking ``qualified enhanced oil recovery 
                costs'' each place it appears and inserting ``qualified 
                costs'',
                    (C) by striking ``qualified enhanced oil recovery 
                project'' each place it appears and inserting 
                ``qualified project'', and
                    (D) in the section heading by inserting ``, natural 
                gas, and coalbed methane'' after ``oil''.
            (2) The item in the table of sections for subpart D of part 
        IV of subchapter A of chapter 1 of such Code relating to 
        section 43 is amended to read as follows:

``Sec. 43. Enhanced oil, natural gas, and coalbed methane recovery 
                            credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred in taxable years ending after December 
31, 2006.

SEC. 6. ALLOWANCE OF ENHANCED OIL, NATURAL GAS, AND COALBED METHANE 
              RECOVERY CREDIT AGAINST THE ALTERNATIVE MINIMUM TAX.

    (a) In General.--Subsection (c) of section 38 of the Internal 
Revenue Code of 1986 (relating to limitation based on amount of tax) is 
amended by redesignating paragraph (4) as paragraph (5) and by 
inserting after paragraph (3) the following new paragraph:
            ``(4) Special rules for enhanced oil, natural gas, and 
        coalbed methane recovery credit.--In the case of the enhanced 
        oil, natural gas, and coalbed methane recovery credit 
        determined under section 43--
                    ``(A) this section and section 39 shall be applied 
                separately with respect to such credit, and
                    ``(B) in applying paragraph (1) to such credit--
                            ``(i) the tentative minimum tax shall be 
                        treated as being zero, and
                            ``(ii) the limitation under paragraph (1) 
                        (as modified by clause (i)) shall be reduced by 
                        the credit allowed under subsection (a) for the 
                        taxable year (other than the enhanced oil 
                        recovery credit).''.
    (b) Conforming Amendments.--Paragraphs (2)(A)(ii)(II) and 
(3)(A)(ii)(II) of section 38(c) of such Code are each amended by 
inserting ``or the enhanced oil, natural gas, and coalbed methane 
recovery credit'' after ``employee credit''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 7. EXPANSION OF EXPENSING OF OIL AND ALTERNATIVE FUEL REFINERIES.

    (a) Extension of Placed in Service Requirement.--Subparagraph (B) 
of section 179C(c)(1) of the Internal Revenue Code of 1986 (defining 
qualified refinery property) is amended by striking ``January 1, 2012'' 
and inserting ``January 1, 2016''.
    (b) Production Capacity.--Subsection (e) of section 179C of such 
Code (relating to production capacity) is amended by striking ``or'' at 
the end of paragraph (1), by striking the period at the end of 
paragraph (2) and inserting ``, or'', and by inserting after paragraph 
(2) the following new paragraph:
            ``(3) enables the existing qualified refinery to process 
        liquids from coal, oil shale, or biomass.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to properties placed in service after the date of the enactment 
of this Act.

SEC. 8. EXPENSING FOR CONVERSION OF NATURAL GAS-FIRED FACILITIES FOR 
              THE PRODUCTION ETHANOL TO COAL-FIRED FACILITIES.

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

``SEC. 179F. ELECTION TO EXPENSE COAL-FIRED FACILITIES FOR PRODUCTION 
              OF ETHANOL.

    ``(a) Treatment as Expenses.--A taxpayer may elect to treat 50 
percent of the cost of any qualified ethanol plant fueling property as 
an expense which is not chargeable to capital account. Any cost so 
treated shall be allowed as a deduction for the taxable year in which 
the qualified ethanol plant fueling property is placed in service.
    ``(b) Election.--
            ``(1) In general.--An election under this section for any 
        taxable year shall be made on the taxpayer's return of the tax 
        imposed by this chapter for the taxable year. Such election 
        shall be made in such manner as the Secretary may by 
        regulations prescribe.
            ``(2) Election irrevocable.--Any election made under this 
        section may not be revoked except with the consent of the 
        Secretary.
    ``(c) Qualified Ethanol Plant Fueling Property.--
            ``(1) In general.--The term `qualified ethanol plant 
        fueling property' means, with respect to a qualified ethanol 
        refinery, property using coal to produce energy used to produce 
        ethanol--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is placed in service by the taxpayer 
                after the date of the enactment of this section and 
                before January 1, 2016, and
                    ``(C) which meets all applicable environmental laws 
                in effect on the date such portion was placed in 
                service.
            ``(2) Special rule for sale-leasebacks.--For purposes of 
        paragraph (1)(A), if property is--
                    ``(A) originally placed in service after the date 
                of the enactment of this section by a person, and
                    ``(B) sold and leased back by such person within 3 
                months after the date such property was originally 
                placed in service,
        such property shall be treated as originally placed in service 
        not earlier than the date on which such property is used under 
        the leaseback referred to in subparagraph (B).
            ``(3) Effect of waiver under clean air act.--A waiver under 
        the Clean Air Act shall not be taken into account in 
        determining whether the requirements of paragraph (1)(C) are 
        met.
    ``(d) Qualified Ethanol Refinery.--For purposes of this section, 
the term `qualified ethanol refinery' means any refinery located in the 
United States which--
            ``(1) is designed to serve the primary purpose of 
        processing material into ethanol,
            ``(2) on the date of the enactment of this section, used 
        natural gas to produce energy in the ethanol production 
        process, and
            ``(3) after the date of the enactment of this section, 
        converted to the use of coal to produce energy in the ethanol 
        production process.
    ``(e) Ineligible Refinery Property.--No deduction shall be allowed 
under subsection (a) for any qualified refinery property which is built 
solely to comply with consent decrees or projects mandated by Federal, 
State, or local governments.
    ``(f) Election To Allocate Deduction to Cooperative Owner.--
            ``(1) In general.--If--
                    ``(A) a taxpayer to which subsection (a) applies is 
                an organization to which part I of subchapter T 
                applies, and
                    ``(B) one or more persons directly holding an 
                ownership interest in the taxpayer are organizations to 
                which part I of subchapter T apply,
        the taxpayer may elect to allocate all or a portion of the 
        deduction allowable under subsection (a) to such persons. Such 
        allocation shall be equal to the person's ratable share of the 
        total amount allocated, determined on the basis of the person's 
        ownership interest in the taxpayer. The taxable income of the 
        taxpayer shall not be reduced under section 1382 by reason of 
        any amount to which the preceding sentence applies.
            ``(2) Form and effect of election.--An election under 
        paragraph (1) for any taxable year shall be made on a timely 
        filed return for such year. Such election, once made, shall be 
        irrevocable for such taxable year.
            ``(3) Written notice to owners.--If any portion of the 
        deduction available under subsection (a) is allocated to owners 
        under paragraph (1), the cooperative shall provide any owner 
        receiving an allocation written notice of the amount of the 
        allocation. Such notice shall be provided before the date on 
        which the return described in paragraph (2) is due.
    ``(g) Reporting.--No deduction shall be allowed under subsection 
(a) to any taxpayer for any taxable year unless such taxpayer files 
with the Secretary a report containing such information with respect to 
the operation of the refineries of the taxpayer as the Secretary shall 
require.''.
    (b) Conforming Amendments.--
            (1) Section 1245(a) of such Code is amended by inserting 
        ``179F,'' after ``179E,'' both places it appears in paragraphs 
        (2)(C) and (3)(C).
            (2) Section 263(a)(1) of such Code is amended by striking 
        ``or'' at the end of subparagraph (K), by striking the period 
        at the end of subparagraph (L) and inserting ``, or'', and by 
        inserting after subparagraph (L) the following new 
        subparagraph:
                    ``(M) expenditures for which a deduction is allowed 
                under section 179F.''.
            (3) Section 312(k)(3)(B) of such Code is amended by 
        striking ``or 179E'' each place it appears in the heading and 
        text and inserting ``179E, or 179F''.
            (4) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by inserting after the item relating to 
        section 179E the following new item:

``Sec. 179F. Election to expense coal-fired facilities for production 
                            of ethanol.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to properties placed in service after the date of the enactment 
of this Act.
                                 <all>
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