```

[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 601 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                 S. 601

 To direct Federal investment in carbon capture and storage and other 
            clean coal technologies, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           February 26, 2015

Ms. Heitkamp (for herself and Mr. Kaine) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To direct Federal investment in carbon capture and storage and other 
            clean coal technologies, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Advanced Clean 
Coal Technology Investment in Our Nation Act of 2015'' or the ``ACCTION 
Act of 2015''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
         TITLE I--FEDERAL INVESTMENT IN CLEAN COAL TECHNOLOGIES

Sec. 101. Large-scale carbon storage program.
Sec. 102. Research, development and demonstration programs.
Sec. 103. Innovative technology loan guarantee program.
Sec. 104. Coordination of clean coal generating projects.
   TITLE II--FEDERAL INCENTIVES FOR PRIVATE INVESTMENT IN CLEAN COAL 
                              TECHNOLOGIES

Sec. 201. Seven-year amortization for certain systems installed on 
                            coal-fired electric generation units.
Sec. 202. Credit for carbon sequestration from coal facilities.
Sec. 203. Variable price support for carbon dioxide sequestration.
Sec. 204. Clean energy coal bonds.
                      TITLE III--REPORTS REQUIRED

Sec. 301. Definitions.
Sec. 302. Reports to Congress.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the President believes that the United States energy 
        policy must have ``an all-of-the-above strategy for the 21st 
        century that develops every source of American-made energy'';
            (2) according to the Energy Information Administration, 37 
        percent of all energy generated in the United States comes from 
        coal and by 2040, coal will still account for 32 percent of 
        energy generation in the United States;
            (3) the United States has enough recoverable coal reserves 
        to last at least another 250 years;
            (4) as the world becomes increasingly carbon constrained, 
        coal-fired power plants must increasingly be integrated with 
        carbon capture and storage systems;
            (5) efficiency improvements to the coal fleet will decrease 
        carbon emissions and use less coal while providing the same 
        power;
            (6) the potential to increase efficiency is evident in the 
        current fleet of power plants in the United States, as the top 
        10 percent of coal plants have efficiencies as high as 37 
        percent while the average plant has an efficiency of 32 
        percent;
            (7) efficiencies as high as 48 percent may be attained with 
        ultrasupercritical coal-fired power plants.
            (8) replacing the average subcritical coal-fired power 
        plant with a supercritical or ultrasupercritical coal-fired 
        power plant would reduce carbon emissions by 18 to 22 percent 
        per megawatt hour of energy generated; and
            (9) the coal industry is a significant source of jobs in 
        the United States as in 2012 alone, coal was responsible for 
        137,650 jobs for coal miners, 92,472 jobs for operator 
        employees, and 45,178 jobs for contractors.

         TITLE I--FEDERAL INVESTMENT IN CLEAN COAL TECHNOLOGIES

SEC. 101. LARGE-SCALE CARBON STORAGE PROGRAM.

    (a) In General.--Subtitle F of title IX of the Energy Policy Act of 
2005 (42 U.S.C. 16291 et seq.) is amended by inserting after section 
963 (42 U.S.C. 16293) the following:

``SEC. 963A. LARGE-SCALE CARBON STORAGE PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Industrial source.--The term `industrial source' 
        means any source of carbon dioxide that is not naturally 
        occurring.
            ``(2) Large-scale.--The term `large-scale' means the 
        injection from industrial sources into a geological formation 
        of--
                    ``(A) over 1,000,000 tons of carbon dioxide each 
                year; or
                    ``(B) carbon dioxide to a scale that demonstrates 
                the ability to inject and sequester several million 
                metric tons of industrial source carbon dioxide for a 
                large number of years.
            ``(3) Secretary concerned.--The term `Secretary concerned' 
        means--
                    ``(A) the Secretary of Agriculture (acting through 
                the Chief of the Forest Service), with respect to 
                National Forest System land; and
                    ``(B) the Secretary of the Interior, with respect 
                to land managed by the Bureau of Land Management 
                (including land held for the benefit of an Indian 
                tribe).
    ``(b) Program.--The Secretary shall carry out a program to 
demonstrate the integration of systems for the capture, transportation, 
and injection of carbon dioxide from industrial sources, either for the 
purpose of long-term geological storage or enhanced oil recovery at a 
commercial scale.
    ``(c) Authorized Assistance.--
            ``(1) In general.--In carrying out the program, the 
        Secretary may enter into cooperative agreements to provide 
        financial and technical assistance to up to 10 large-scale 
        geological storage or enhanced oil recovery projects.
            ``(2) Limitation.--Not fewer than 3 of the 10 projects 
        selected shall be large-scale projects that undertake site 
        characterization and permitting to qualify the projects as 
        ready for long-term saline storage sites.
    ``(d) Project Selection.--The Secretary shall competitively select 
recipients of cooperative agreements under this section from among 
applicants that--
            ``(1) provide the Secretary with sufficient geological site 
        information (including hydrogeological and geophysical 
        information) to establish that the proposed geological 
        formation is capable of use for enhanced oil recovery and, in 
        the case of geological storage, is capable of long-term storage 
        of the injected carbon dioxide, including--
                    ``(A) the location, extent, and storage capacity of 
                the geological storage unit at the site into which the 
                carbon dioxide will be injected;
                    ``(B) the principal potential modes of 
                geomechanical failure in the geological storage unit;
                    ``(C) the ability of the geological storage unit to 
                retain injected carbon dioxide;
                    ``(D) the measurement, monitoring, and verification 
                requirements necessary to ensure adequate information 
                on the operation of the geological storage unit during 
                and after the injection of carbon dioxide; and
                    ``(E) a study and report on the rate of injection 
                of carbon dioxide from power plants (based on operating 
                the plant on a 24-hours-a-day, 7-days-a-week, and 365-
                days-a-year basis over several decades) necessary to 
                avoid--
                            ``(i) imbalances of carbon dioxide; and
                            ``(ii) making the proposed geological 
                        formation of the site into which the carbon 
                        dioxide will be injected unusable, unstable, or 
                        such that there would be forced stoppages of 
                        injection;
            ``(2) have legal authority to use the land or interests in 
        land necessary for--
                    ``(A) the injection of the carbon dioxide at the 
                proposed geological storage unit or enhanced oil 
                recovery site; and
                    ``(B) the storage, closure, monitoring, and long-
                term stewardship of the geological storage unit for 
                geological storage of carbon dioxide; and
            ``(3) sequester not fewer than 500,000 metric tons of 
        carbon dioxide in 1 contiguous geographic and geologic 
        formation.
    ``(e) Terms and Conditions.--The Secretary shall condition receipt 
of financial assistance pursuant to a cooperative agreement under this 
section on the recipient agreeing--
            ``(1) to comply with all applicable Federal and State laws 
        (including regulations), including--
                    ``(A) the requirements of the underground injection 
                control program under part C of the Safe Drinking Water 
                Act (42 U.S.C. 300h et seq.) (referred to in this 
                section as the `UIC program'); and
                    ``(B) any other Federal and State requirements to 
                protect drinking water supplies; and
            ``(2) in the case of industrial sources subject to the 
        Clean Air Act (42 U.S.C. 7401 et seq.), to inject only carbon 
        dioxide captured from industrial sources in compliance with 
        that Act.
    ``(f) Indemnification Agreements for Geological Storage.--
            ``(1) Definition of liability.--In this subsection, the 
        term `liability' means any legal liability for--
                    ``(A) bodily injury, sickness, disease, or death;
                    ``(B) loss of or damage to property, or loss of use 
                of property; or
                    ``(C) injury to or destruction or loss of natural 
                resources, including fish, wildlife, and drinking water 
                supplies.
            ``(2) Agreements.--Not later than 1 year after the date of 
        the receipt by the Secretary of a completed application for 
        assistance authorized under subsection (c), the Secretary may 
        agree to indemnify and hold harmless the recipient of a 
        cooperative agreement under this section from liability arising 
        out of or resulting from a demonstration project in excess of 
        the amount of liability covered by financial protection 
        maintained by the recipient in accordance with the requirements 
        of the UIC program.
            ``(3) Exception for gross negligence and intentional 
        misconduct.--Notwithstanding paragraph (1), the Secretary may 
        not indemnify the recipient of a cooperative agreement under 
        this section from liability arising out of conduct of a 
        recipient that is grossly negligent or that constitutes 
        intentional misconduct.
            ``(4) Collection of fees.--
                    ``(A) In general.--The Secretary shall collect a 
                fee from any person with whom an agreement for 
                indemnification is executed under this subsection in an 
                amount that is equal to the net present value of 
                payments made by the United States to cover liability 
                under the indemnification agreement.
                    ``(B) Amount.--The Secretary shall establish, by 
                regulation, criteria for determining the amount of the 
                fee, taking into account--
                            ``(i) the likelihood of an incident 
                        resulting in liability to the United States 
                        under the indemnification agreement; and
                            ``(ii) other factors pertaining to the 
                        hazard of the indemnified project.
                    ``(C) Use of fees.--Fees collected under this 
                paragraph shall be deposited in the Treasury and 
                credited to miscellaneous receipts.
            ``(5) Contracts in advance of appropriations.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may enter into agreements of indemnification 
                under this subsection in advance of appropriations and 
                incur obligations without regard to section 1341 of 
                title 31, United States Code (commonly known as the 
                `Anti-Deficiency Act'), or section 11 of title 41, 
                United States Code (commonly known as the `Adequacy of 
                Appropriations Act').
                    ``(B) Limitation.--The amount of indemnification 
                under this subsection shall not exceed $10,000,000,000 
                (adjusted not less than once during each 5-year period 
                following the date of enactment of this section, in 
                accordance with the aggregate percentage change in the 
                Consumer Price Index since the previous adjustment 
                under this subparagraph), in the aggregate, for all 
                persons indemnified in connection with an agreement and 
                for each project, including such legal costs as are 
                approved by the Secretary.
            ``(6) Conditions of agreements of indemnification.--
                    ``(A) In general.--The agreement shall provide 
                that, if the Secretary makes a determination that there 
                is a substantial likelihood that the United States will 
                be required to make indemnity payments under the 
                agreement, the Attorney General--
                            ``(i) shall collaborate with the recipient 
                        of an award under this subsection; and
                            ``(ii) may--
                                    ``(I) approve the payment of any 
                                claim under the agreement of 
                                indemnification;
                                    ``(II) appear on behalf of the 
                                recipient;
                                    ``(III) take charge of an action; 
                                and
                                    ``(IV) settle or defend an action.
                    ``(B) Settlement of claims.--
                            ``(i) In general.--The Attorney General 
                        shall have final authority on behalf of the 
                        United States to settle or approve the 
                        settlement of any claim under this subsection 
                        on a fair and reasonable basis with due regard 
                        for the purposes of this subsection.
                            ``(ii) Expenses.--The settlement shall not 
                        include expenses in connection with the claim 
                        incurred by the recipient.
    ``(g) Federal Land.--
            ``(1) In general.--The Secretary concerned may authorize 
        the siting of a project on Federal land under the jurisdiction 
        of the Secretary concerned in a manner consistent with 
        applicable laws and land management plans and subject to such 
        terms and conditions as the Secretary concerned determines to 
        be necessary.
            ``(2) Framework for geological carbon sequestration on 
        public land.--In determining whether to authorize a project on 
        Federal land, the Secretary concerned shall take into account 
        the framework for geological carbon sequestration on public 
        land prepared in accordance with section 714 of the Energy 
        Independence and Security Act of 2007 (Public Law 110-140; 121 
        Stat. 1715).
    ``(h) Acceptance of Title and Long-Term Monitoring.--
            ``(1) In general.--As a condition of a cooperative 
        agreement under this section, the Secretary may accept title 
        to, or transfer of administrative jurisdiction from another 
        Federal agency over, any land or interest in land necessary for 
        the monitoring, remediation, or long-term stewardship of a 
        project site.
            ``(2) Long-term monitoring activities for geological 
        storage.--After accepting title to, or transfer of, a site 
        closed in accordance with this section, the Secretary shall 
        monitor the site and conduct any remediation activities to 
        ensure the geological integrity of the site and prevent any 
        endangerment of public health or safety.
            ``(3) Funding.--There is appropriated to the Secretary, out 
        of funds of the Treasury not otherwise appropriated, such sums 
        as are necessary to carry out paragraph (2).
    ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as are necessary.''.

SEC. 102. RESEARCH, DEVELOPMENT AND DEMONSTRATION PROGRAMS.

    (a) In General.--Section 962 of the Energy Policy Act of 2005 (42 
U.S.C. 16292) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (10), by striking ``and'' at the 
                end;
                    (B) in paragraph (11), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(12) specific additional programs to address water use 
        and reuse;
            ``(13) the testing, including the construction of testing 
        facilities, for high temperature materials for use in advanced 
        systems for combustion or use of coal; and
            ``(14) innovations to application of existing coal 
        conversion systems designed to increase efficiency of 
        conversion, flexibility of operation, and other modifications 
        to address existing usage requirements.'';
            (2) by redesignating subsections (b) through (d) as 
        subsections (c) through (e), respectively;
            (3) by inserting after subsection (a) the following:
    ``(b) Transformational Coal Technology Program.--
            ``(1) In general.--As part of the program established under 
        subsection (a), the Secretary may carry out a program designed 
        to undertake research, development, and demonstration of 
        technologies, including the accelerated development of--
                    ``(A) chemical looping technology;
                    ``(B) supercritical carbon dioxide power generation 
                cycles;
                    ``(C) pressurized oxycombustion, including new and 
                retrofit technologies; and
                    ``(D) other technologies that are characterized by 
                the use of--
                            ``(i) alternative energy cycles;
                            ``(ii) thermionic devices using waste heat;
                            ``(iii) fuel cells;
                            ``(iv) replacement of chemical processes 
                        with biotechnology;
                            ``(v) nanotechnology;
                            ``(vi) new materials in applications (other 
                        than extending cycles to higher temperature and 
                        pressure), such as membranes or ceramics;
                            ``(vii) carbon utilization (other than 
                        enhanced oil recovery), such as construction 
                        materials, using low quality energy to 
                        reconvert back to a fuel, or manufactured food;
                            ``(viii) advanced gas separation concepts; 
                        and
                            ``(ix) other technologies, including--
                                    ``(I) modular, manufactured 
                                components; and
                                    ``(II) innovative production or 
                                research techniques, such as using 3-D 
                                printer systems, for the production of 
                                early research and development 
                                prototypes.
            ``(2) Cost share.--In carrying out the program described in 
        paragraph (1), the Secretary may enter into partnerships with 
        private entities to share the costs of carrying out the 
        program.''; and
            (4) in subsection (c) (as so redesignated)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--In carrying out programs authorized by 
        this section, during each of calendar years 2016, 2018, 2021, 
        and annually thereafter, the Secretary shall identify cost and 
        performance goals for coal-based technologies that would permit 
        the continued cost-competitive use of coal for the production 
        of electricity, chemical feedstocks, transportation fuels, and 
        other marketable products.''; and
                    (B) in paragraph (2), by striking ``date of 
                enactment of this Act'' each place it appears and 
                inserting ``date of enactment of the Advanced Clean 
                Coal Technology Investment in Our Nation Act of 2015''.
    (b) Advisory Committee; Authorization of Appropriations.--Section 
963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) is amended--
            (1) in subsection (c), by striking paragraph (6) and 
        inserting the following:
            ``(6) Advisory committee.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall establish an advisory committee--
                            ``(i) to undertake, not less frequently 
                        than once every 3 years, a review and prepare a 
                        report on the progress being made by the 
                        Department of Energy to achieve the goals 
                        described in subsections (a) and (b) of section 
                        962 and subsection (b) of this section; and
                            ``(ii) to assess and provide 
                        recommendations on how the capture of carbon 
                        from other fossil fuels could be supported 
                        through the objectives described in subsection 
                        (b).
                    ``(B) Membership requirements.--Members of the 
                advisory committee under subparagraph (A) shall be 
                appointed by the President.''; and
            (2) by striking subsection (d) and inserting the following:
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out section 962 and this section--
            ``(1) $1,654,000,000 for fiscal years 2016 through 2019;
            ``(2) $5,283,000,000 for fiscal years 2020 through 2026; 
        and
            ``(3) $3,300,000,000 for fiscal years 2027 through 2036.''.
    (c) Cost Sharing Reduction.--Section 988(b) of the Energy Policy 
Act of 2005 (42 U.S.C. 16352(b)) is amended by striking paragraph (3) 
and inserting the following:
            ``(3) Reduction.--The Secretary shall reduce or eliminate 
        the requirement of paragraph (1) for a research and development 
        activity of an applied nature if the Secretary--
                    ``(A) is petitioned for a reduction by a non-
                Federal source; and
                    ``(B) determines that the reduction is necessary 
                and appropriate to achieve the purposes and goals of--
                            ``(i) this Act; and
                            ``(ii) the program or activity for which 
                        the research or development activity is being 
                        undertaken.''.

SEC. 103. INNOVATIVE TECHNOLOGY LOAN GUARANTEE PROGRAM.

    (a) In General.--Section 1703 of the Energy Policy Act of 2005 (42 
U.S.C. 16513) is amended by adding at the end the following:
    ``(f) Other Forms of Federal Support Allowed.--An eligible project 
that is eligible for or in receipt of other forms of Federal financial 
assistance shall not be precluded from receiving a loan guarantee made 
pursuant to this section.
    ``(g) Timeline for Loan Guarantee Approval for Certain Projects.--
Notwithstanding any other provision of law, not later than 2 years 
after the date of enactment of the Advanced Clean Coal Technology 
Investment in Our Nation Act of 2015, the Secretary shall--
            ``(1) give final approval to applications for loan 
        guarantees under subsection (a) for projects described in 
        subsection (b)(2); and
            ``(2) make loans for those projects in amounts equal to 
        $2,000,000,000.''.
    (b) Conforming Amendments.--
            (1) Title III of division C of the Omnibus Appropriations 
        Act, 2009 (Public Law 111-8; 123 Stat. 619) is amended in the 
        matter under the heading ``Title 17 Innovative Technology Loan 
        Guarantee Program'', by striking the seventh, eighth, and ninth 
        provisos.
            (2) The Supplemental Appropriations Act, 2009 (Public Law 
        111-32) is amended by striking section 408 (123 Stat. 1878).

SEC. 104. COORDINATION OF CLEAN COAL GENERATING PROJECTS.

    (a) Definitions.--In this section, the term ``eligible clean coal 
generating projects'' means any project undertaken to install and 
operate an advanced carbon capture and storage technology at a new or 
existing steam generating unit.
    (b) Lead Agency.--The Department of Energy shall be the lead agency 
for the purposes of coordinating all requirements under Federal law 
with respect to eligible clean coal generating projects, including any 
requirements of--
            (1) the Clean Air Act (42 U.S.C. 7401 et seq.);
            (2) the Federal Water Pollution Control Act (33 U.S.C. 1251 
        et seq.);
            (3) the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
        seq.);
            (4) the National Environmental Policy Act of 1969 (42 
        U.S.C. 4321 et seq.); and
            (5) the Safe Drinking Water Act (42 U.S.C. 300f et seq.).
    (c) Schedule.--In carrying out subsection (b), the Secretary of 
Energy shall establish a schedule for all Federal authorizations with 
respect to each eligible project, including by--
            (1) setting binding intermediate milestones and deadlines 
        to ensure expeditious completion of all proceedings and final 
        action on all Federal authorizations relating to the eligible 
        project;
            (2) requiring that all permit decisions and related 
        environmental reviews under applicable Federal law shall be 
        completed not later than 1 year after the date on which a 
        complete application for each environmental review is 
        submitted, or as soon as practicable thereafter; and
            (3) coordinating, to the maximum extent practicable, any 
        State permitting and environmental requirements.
    (d) Memoranda of Understanding.--To streamline and expedite review 
of Federal authorizations for eligible clean coal generating projects, 
the Secretary of Energy shall--
            (1) enter into memoranda of understanding with applicable 
        Federal agencies;
            (2) facilitate a pre-application review process with 
        applicable Federal agencies; and
            (3) consolidate all environmental reviews of the eligible 
        clean coal generating project into a single environmental 
        review document.
    (e) Judicial Review.--With respect to an application for Federal 
authorization relating to an eligible clean coal generating project, 
the applicable Federal circuit court may review and remedy--
            (1) any failure by a Federal agency to complete action on 
        the application by the date that is 1 year after the date on 
        which the complete application was submitted to the agency; and
            (2) any issuance of an action or order by a Federal agency 
        with respect to the application that is inconsistent with 
        applicable Federal law.

   TITLE II--FEDERAL INCENTIVES FOR PRIVATE INVESTMENT IN CLEAN COAL 
                              TECHNOLOGIES

SEC. 201. SEVEN-YEAR AMORTIZATION FOR CERTAIN SYSTEMS INSTALLED ON 
              COAL-FIRED ELECTRIC GENERATION UNITS.

    (a) In General.--Subsection (d) of section 169 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(6) Special rule for systems installed on coal-fired 
        electric generation units.--
                    ``(A) In general.--Any mechanical or electronic 
                system--
                            ``(i) which is installed on a coal-fired 
                        electric generation unit after the date of the 
                        enactment of this paragraph, and
                            ``(ii) which reduces carbon dioxide 
                        emissions per net megawatt hour of electricity 
                        generation by 1 or more of the means described 
                        in subparagraph (B) or any other means,
                shall be treated for purposes of this section as a new 
                identifiable treatment facility which abates or 
                controls atmospheric pollution or contamination by 
                removing, altering, disposing, storing, or preventing 
                the creation or emission of pollutants, contaminants, 
                wastes, or heat. Paragraph (1)(C) of this subsection, 
                and subsection (e), shall not apply to any system which 
                is so treated.
                    ``(B) Means for reducing emissions.--The means 
                described in this subparagraph are--
                            ``(i) optimizing combustion,
                            ``(ii) optimizing sootblowing and heat 
                        transfer,
                            ``(iii) upgrading steam temperature control 
                        capabilities,
                            ``(iv) reducing exit gas temperatures (air 
                        heater modifications),
                            ``(v) predrying low rank coals using power 
                        plant waste heat,
                            ``(vi) modifying steam turbines or change 
                        the steam path/blading,
                            ``(vii) replacing single speed motors with 
                        variable speed drives for fans and pumps, and
                            ``(viii) improving operational controls, 
                        including neural networks.
                    ``(C) Special rule for minimum tax.--Section 
                56(a)(5) shall not apply to property to which this 
                paragraph applies.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of the enactment of this 
Act.

SEC. 202. CREDIT FOR CARBON SEQUESTRATION FROM COAL FACILITIES.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48D the following new section:

``SEC. 48E. QUALIFYING CARBON DIOXIDE CAPTURE, TRANSPORT, AND STORAGE 
              EQUIPMENT CREDIT.

    ``(a) General Rule.--For purposes of section 46, the qualifying 
carbon dioxide capture, transport, and storage equipment credit for any 
taxable year is an amount equal to 30 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 
        eligible carbon dioxide capture, transport, and storage 
        property placed in service by the taxpayer during such taxable 
        year which is part of a qualifying clean coal 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) Special rule for certain subsidized property.--Rules 
        similar to section 48(a)(4) shall apply for purposes of this 
        section.
            ``(3) Certain qualified progress expenditures rules made 
        applicable.--Rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the 
        enactment of the Revenue Reconciliation Act of 1990) shall 
        apply for purposes of this section.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Coal.--The term `coal' means bituminous coal, 
        subbituminous coal, and lignite.
            ``(2) Eligible carbon dioxide capture, transport, and 
        storage property.--The term `eligible carbon dioxide capture, 
        transport, and storage property' means any property--
                    ``(A) which is used to capture, transport, or store 
                carbon dioxide emitted at a qualifying clean coal 
                project, including equipment used to separate and 
                pressurize carbon dioxide for transport (including 
                equipment to operate such equipment),
                    ``(B)(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
                    ``(C) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable.
            ``(3) Qualified polygeneration plant.--The term `qualified 
        polygeneration plant' means a plant that produces 2 or more 
        marketable products, including electricity, chemicals, liquid 
        or gaseous fuels, and carbon dioxide for beneficial use or 
        sale.
            ``(4) Qualifying clean coal project.--
                    ``(A) In general.--The term `qualifying clean coal 
                project' means any project if such project--
                            ``(i) uses--
                                    ``(I) gasification technology (as 
                                defined in section 48B(c)(2)), or
                                    ``(II) coal as not less than 75 
                                percent of the project fuel source,
                        to produce electricity or is a polygeneration 
                        plant, and
                            ``(ii)(I) is a new project which is 
                        designed to meet the requirements of 
                        subparagraph (B), or
                            ``(II) consists of retrofits to existing 
                        equipment such that the project meets the 
                        requirements of subparagraph (B).
                    ``(B) Requirements.--
                            ``(i) In general.--A project shall meet the 
                        emission requirement of clause (ii) and the 
                        carbon capture requirement of clause (iii).
                            ``(ii) Emission requirement.--The 
                        requirement of this clause is met if the 
                        project is designed--
                                    ``(I) to emit carbon dioxide at an 
                                average annual rate of less than 1,100 
                                pounds per net megawatt hour of 
                                electrical generation, or
                                    ``(II) such that the carbon dioxide 
                                emissions of such project are no 
                                greater than half of the average carbon 
                                dioxide emissions for facilities 
                                producing electricity during 2005 from 
                                the same coal rank as such project, as 
                                determined under regulations prescribed 
                                by the Secretary in consultation with 
                                the Secretary of Energy and the 
                                Administrator of the Environmental 
                                Protection Agency.
                            ``(iii) Carbon capture requirement.--The 
                        requirement of this clause is met--
                                    ``(I) if such unit is among the 
                                first 1,000 megawatts of electric 
                                generation units certified by the 
                                Secretary under subsection (e), to 
                                capture and sequester not less than 
                                500,000 metric tons per year of carbon 
                                dioxide,
                                    ``(II) if such unit is among the 
                                next 3,000 megawatts of electric 
                                generation units certified by the 
                                Secretary under subsection (e), to 
                                capture and sequester not less than 
                                1,000,000 metric tons per year of 
                                carbon dioxide, and
                                    ``(III) for any other unit, to 
                                capture and sequester not less than 
                                2,000,000 metric tons per year of 
                                carbon dioxide.
    ``(d) Aggregate Credits.--
            ``(1) In general.--No credit shall be allowed under this 
        section with respect to any qualifying clean coal project 
        unless such project is certified by the Secretary under 
        subsection (e).
            ``(2) Limitation on projects certified.--The Secretary may 
        certify under subsection (e) no more than--
                    ``(A) 20 projects described in subsection 
                (c)(4)(A)(ii)(I), and
                    ``(B) 20 projects described in subsection 
                (c)(4)(A)(ii)(II).
    ``(e) Certification.--
            ``(1) Certification process.--The Secretary, in 
        consultation with the Secretary of Energy and the Administrator 
        of the Environmental Protection Agency, shall establish a 
        certification process to determine if a project meets all 
        criteria and other requirements to be recognized as a 
        qualifying clean coal project.
            ``(2) Feedstock requirements.--After the date of 
        publication by the Secretary of the final certification process 
        referred to in paragraph (1), the Secretary shall allocate the 
        limitation in subsection (d)(2) in equal amounts among--
                    ``(A) projects using bituminous coal as a primary 
                feedstock,
                    ``(B) projects using subbituminous coal as a 
                primary feedstock, and
                    ``(C) projects using lignite as a primary 
                feedstock.
            ``(3) Redistribution.--The Secretary may reallocate credits 
        if the Secretary determines that there is an insufficient 
        quantity of qualifying applications for certification, pending 
        at the time of review, to comply with the feedstock 
        requirements of paragraph (2). The Secretary may conduct an 
        additional program for applications for certification and 
        reallocate available credits without regard to the feedstock 
        requirement which was not satisfied as a result of insufficient 
        applications for certification.
            ``(4) Requirements for applications for certification.--An 
        application for certification shall contain such information as 
        the Secretary may require in order to make a determination to 
        accept or reject the application and establish applicable 
        credit entitlement. Any information contained in the 
        application shall be protected as provided in section 552(b)(4) 
        of title 5, United States Code.
    ``(f) Denial of Double Benefit.--No credit shall be allowed under 
this section for any property for which credit is allowed under 
sections 48A, 48B, or 48C.''.
    (b) Conforming Amendments.--
            (1) Section 46 of such Code (relating to amount of credit) 
        is amended by striking ``and'' at the end of paragraph (5), by 
        striking the period at the end of paragraph (6) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(7) the qualifying carbon dioxide capture, transport, and 
        storage equipment credit.''.
            (2) Subparagraph (C) of section 49(a)(1) of such Code is 
        amended by striking ``and'' at the end of clause (v), by 
        striking the period at the end of clause (vi) and inserting ``, 
        and'', and by adding after clause (vi) the following new 
        clause:
                            ``(vii) the basis of any qualifying carbon 
                        dioxide capture, transport, and storage 
                        equipment under section 48E.''.
            (3) 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 48D the following new item:

``Sec. 48E. Qualifying carbon dioxide capture, transport, and storage 
                            equipment credit.''.
    (c) 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. 203. VARIABLE PRICE SUPPORT FOR CARBON DIOXIDE SEQUESTRATION.

    (a) Definitions.--In this section:
            (1) Carbon dioxide price difference.--The term ``carbon 
        dioxide price difference'' means the amount calculated in 
        accordance with subsection (f)(1).
            (2) Design capacity.--The term ``design capacity'' means a 
        project that has the capacity to capture--
                    (A) not fewer than 3,000,000 tons of carbon dioxide 
                annually; or
                    (B) fewer than 3,000,000 tons of carbon dioxide 
                annually if agreed to by the Secretary and project 
                owner.
            (3) Eligible project.--The term ``eligible project'' means 
        a project that--
                    (A) captures and sells carbon dioxide that is used 
                for enhanced recovery and generates electricity or 
                gaseous or liquid fuels, or is a qualified 
                polygeneration plant (as defined in section 48E(c) of 
                the Internal Revenue Code of 1986);
                    (B) is located in the United States;
                    (C) uses coal as not less than 75 percent of the 
                project fuel source;
                    (D) captures not less than 50 percent of carbon 
                dioxide produced by coal conversion;
                    (E) has reached design capacity; and
                    (F) has a contract with an enhanced recovery 
                company that is for a period that is equal to or 
                greater than the subsidy period.
            (4) Enhanced recovery.--The term ``enhanced recovery'' 
        means enhanced oil recovery and enhanced gas recovery.
            (5) Lowest bid.--The term ``lowest bid'' means a bid made 
        by an applicant to the program that has the least cost to the 
        Federal Government, as compared to competing bids.
            (6) Market price of oil.--The term ``market price of oil'' 
        means the price of oil as reported in a public oil market index 
        such as the New York Mercantile Exchange.
            (7) Program.--The term ``program'' means the Enhanced 
        Recovery Program established under subsection (b).
            (8) Qualifying carbon dioxide.--The term ``qualifying 
        carbon dioxide'' means carbon dioxide that is captured from an 
        eligible project and is eligible for variable price support.
            (9) Rate.--The term ``rate'' means the ratio bid by the 
        project owner of the price of carbon dioxide to the market 
        price of oil, and that is used to calculate the synthetic price 
        of carbon dioxide.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (11) Strike price of carbon dioxide.--The term ``strike 
        price of carbon dioxide'' means the price of carbon dioxide bid 
        by the project owner--
                    (A) below which a project will receive a subsidy; 
                and
                    (B) above which the project owner will make 
                payments to the Federal Government.
            (12) Subsidy period.--The term ``subsidy period'' means the 
        period of time, not to exceed 10 years, bid by the project 
        owner during which the eligible project will be eligible to 
        receive a subsidy under this section.
            (13) Synthetic price of carbon dioxide.--The term 
        ``synthetic price of carbon dioxide'' means the price of carbon 
        dioxide calculated by multiplying the market price of oil by 
        the rate.
            (14) Variable price support.--The term ``variable price 
        support'' means financial support provided by the Federal 
        Government in an amount equal to the carbon dioxide price 
        difference for each ton of qualifying carbon dioxide provided 
        directly to the owner of an eligible project selected to 
        receive assistance under this section.
    (b) Establishment; Purpose.--
            (1) In general.--There is established in the Department of 
        Energy a variable price support program, to be known as the 
        ``Enhanced Recovery Program'', to accelerate the construction 
        and operation of eligible advanced coal-fueled projects that 
        capture carbon dioxide emissions and sell or use the carbon 
        dioxide for enhanced recovery.
            (2) Purpose.--The purpose of the program shall be--
                    (A) to reduce the cost of carbon capture by 
                providing variable price support to carbon capture and 
                sequestration project owners to enable the owner to 
                finance eligible projects;
                    (B) to advance the development and widespread use 
                of carbon capture technology; and
                    (C) to increase the domestic production of oil and 
                natural gas in the United States.
    (c) Variable Price Support.--
            (1) In general.--In carrying out the program, the 
        Secretary, in consultation with the Secretary of the Treasury, 
        is authorized to provide variable price support for eligible 
        projects--
                    (A) for which an application is submitted to the 
                Secretary under subsection (d);
                    (B) that are selected under the competitive bidding 
                process under subsection (e); and
                    (C) for which a variable price support agreement to 
                implement the payment terms described in subsections 
                (f) and (g) is executed.
            (2) Period.--The Secretary shall provide variable price 
        support to an eligible project under this section for a period 
        of not more than 10 years beginning on the date on which the 
        eligible project reaches design capacity.
            (3) Profit sharing agreements.--
                    (A) In general.--To be eligible to receive variable 
                price support under paragraph (1), a project owner 
                shall enter into a profit-sharing agreement with the 
                Secretary at the time that the variable price support 
                agreement is executed.
                    (B) Payments.--Once every calendar quarter, for 
                each project owner subject to a profit-sharing 
                agreement executed under subparagraph (A), the 
                Secretary shall calculate whether the synthetic price 
                of carbon dioxide is greater than the strike price of 
                carbon dioxide, and, if so, request from the project 
                owner a profit-sharing payment for that quarter, in an 
                amount equal to--
                            (i) the difference between the synthetic 
                        price of carbon dioxide and the strike price of 
                        carbon dioxide; less
                            (ii) any repayments made under subsection 
                        (g) during that calendar quarter.
    (d) Applications.--An owner of an eligible project desiring 
variable price support under this section shall submit to the Secretary 
an application at such time, in such manner, and containing such 
information as the Secretary may require.
    (e) Selection; Competitive Bidding Process.--
            (1) In general.--Once every year, the Secretary shall 
        solicit bids from applicants for an allocation of the funding 
        made available under subsection (h) to provide variable price 
        support to eligible projects.
            (2) Bid submission.--Applicants participating in the 
        competitive bidding process shall submit a bid for an eligible 
        project that includes--
                    (A) the strike price of carbon dioxide for a ton of 
                qualifying carbon dioxide;
                    (B) a rate;
                    (C) a plan for the project for a period of not more 
                than 10 years; and
                    (D) the projected tonnage of qualifying carbon 
                dioxide that the eligible project will capture and sell 
                for enhanced recovery over the project period.
            (3) Selection.--For each fiscal year, the Secretary shall--
                    (A) determine the cost to the Federal Government of 
                each bid submitted under paragraph (2); and
                    (B)(i) select 1 or more of the lowest bids until 
                all of the available funding authorized by subsection 
                (h) is obligated; or
                    (ii) if the Secretary determines that no bids 
                submitted under paragraph (2) are acceptable to the 
                Secretary, reject the bids.
    (f) Administration.--
            (1) In general.--In carrying out a variable price support 
        agreement entered into under subsection (c), the Secretary 
        shall calculate the carbon dioxide price difference as a dollar 
        amount equal to--
                    (A) the strike price of carbon dioxide; less
                    (B) the synthetic price of carbon dioxide in a 
                qualifying ton.
            (2) Payments.--Payments between the Secretary and the 
        project owner shall be made as follows:
                    (A) If the amount calculated in paragraph (1) is a 
                positive number, the Secretary shall pay to the project 
                owner an amount equal to the product obtained by 
                multiplying--
                            (i) the carbon dioxide price difference 
                        calculated under paragraph (1); and
                            (ii) the quantity in tons of qualifying 
                        carbon dioxide sold for enhanced recovery.
                    (B) If the amount calculated in paragraph (1) is a 
                negative number, the project owner shall pay to the 
                Secretary an amount equal to the product obtained by 
                multiplying--
                            (i) the absolute value of the carbon 
                        dioxide price difference calculated under 
                        paragraph (1); and
                            (ii) the quantity in tons of qualifying 
                        carbon dioxide sold for enhanced recovery.
                    (C) Payments between the Secretary and the project 
                owner made under subparagraphs (A) and (B) shall be 
                reconciled on an annual basis based on--
                            (i) daily carbon dioxide sales records 
                        reported by the project owner; and
                            (ii) the daily price of West Texas 
                        intermediate crude oil listed in the New York 
                        Mercantile Exchange.
    (g) Payments to the Federal Government.--
            (1) In general.--The Secretary shall establish terms and 
        conditions for a variable price support agreement entered into 
        under subsection (c)(1)(C).
            (2) Repayments.--The repayment terms of any variable price 
        support agreement shall commence if, during the subsidy period 
        of the agreement, and subject to the limitations described in 
        paragraph (3), the amount calculated under subsection (f)(1) is 
        a positive number.
            (3) Limitations.--
                    (A) In general.--The repayment terms described in 
                paragraph (2) shall be subject to the following 
                limitations:
                            (i) If, during any calendar quarter during 
                        the subsidy period of the variable price 
                        support agreement, the synthetic price of 
                        carbon dioxide is less than the strike price of 
                        carbon dioxide, the project owner may elect to 
                        defer all or part of the repayment obligations 
                        of the project owner due in that quarter and 
                        any unpaid obligations will continue to accrue 
                        interest.
                            (ii) If, during any calendar quarter during 
                        the subsidy period of the variable price 
                        support agreement, the synthetic price of 
                        carbon dioxide is greater than the strike price 
                        of carbon dioxide, the project owner--
                                    (I) shall meet the scheduled 
                                repayment obligations plus any deferred 
                                repayment obligations; but
                                    (II) shall not be required to pay 
                                in that quarter an amount that is 
                                greater than the amount equal to the 
                                product obtained by multiplying--
                                            (aa) the excess of the 
                                        synthetic price of carbon 
                                        dioxide over the strike price 
                                        of carbon dioxide; and
                                            (bb) the output of the 
                                        project.
                    (B) Repayments beyond subsidy term.--At the end of 
                the subsidy period of the agreement, the cumulative 
                amount of any deferred repayment obligations, together 
                with accrued interest, shall be amortized (with 
                interest) over the remainder of the full term of the 
                agreement.
    (h) Funding.--
            (1) In general.--Prior to selecting bids under subsection 
        (e)(3) for a fiscal year, the Secretary shall make available to 
        carry out the program the following amounts, to be allocated 
        from unobligated funds of the Department of Energy.

 
                                                        Available Credit
 
Year 1                                                        $1,350,000
Year 2                                                        $1,350,000
Year 3                                                        $1,350,000
Year 4                                                        $2,700,000
Year 5                                                        $2,700,000
Year 6                                                        $2,700,000
Year 7                                                        $4,050,000
Year 8                                                        $5,400,000
Year 9 and thereafter                                        $6,750,000.
 

            (2) Extension.--If the amounts made available under 
        paragraph (1) for a fiscal year are not used during the 
        applicable fiscal year--
                    (A) the program shall be extended for an additional 
                fiscal year; and
                    (B) the amounts authorized under paragraph (1) that 
                were not used during the applicable fiscal year shall 
                be carried over to carry out the program during the 
                additional fiscal year.

SEC. 204. CLEAN ENERGY COAL BONDS.

    (a) In General.--
            (1) Treatment as tax credit bonds.--Subpart I of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by adding at the end the following new section:

``SEC. 54G. CLEAN ENERGY COAL BONDS.

    ``(a) Clean Energy Coal Bond.--For purposes of this subchapter--
            ``(1) In general.--The term `clean energy coal bond' means 
        any bond issued as part of an issue if--
                    ``(A) the bond is issued by a qualified issuer 
                pursuant to an allocation by the Secretary to such 
                issuer of a portion of the national clean energy coal 
                bond limitation under subsection (b)(2),
                    ``(B) so much of the available project proceeds 
                from the sale of such issue as is equal to 95 percent 
                of the excess of--
                            ``(i) the total available project proceeds 
                        from the sale of such issue, over
                            ``(ii) the amounts in a reasonably required 
                        reserve (within the meaning of section 
                        150(a)(3)) with respect to such issue,
                are to be used for capital expenditures incurred by 
                qualified borrowers for 1 or more qualified projects,
                    ``(C) the qualified issuer makes an irrevocable 
                election to have this section apply,
                    ``(D) the qualified issuer designates such bond for 
                purposes of this section and the bond is in registered 
                form, and
                    ``(E) in lieu of the requirements of section 
                54A(d)(2), the issue meets the requirements of 
                subsection (c).
            ``(2) Qualified project; special use rules.--
                    ``(A) In general.--The term `qualified project' 
                means a qualified clean coal project (as defined in 
                subsection (h)(1)) placed in service by a qualified 
                borrower.
                    ``(B) Refinancing rules.--For purposes of paragraph 
                (1)(B), a qualified project may be refinanced with 
                proceeds of a clean energy coal bond only if the 
                indebtedness being refinanced (including any obligation 
                directly or indirectly refinanced by such indebtedness) 
                was originally incurred by a qualified borrower after 
                the date of the enactment of this section.
                    ``(C) Reimbursement.--For purposes of paragraph 
                (1)(B), a clean energy coal bond may be issued to 
                reimburse a qualified borrower for amounts paid after 
                the date of the enactment of this section with respect 
                to a qualified project, but only if--
                            ``(i) prior to the payment of the original 
                        expenditure, the qualified borrower declared 
                        its intent to reimburse such expenditure with 
                        the proceeds of a clean energy coal bond,
                            ``(ii) not later than 60 days after payment 
                        of the original expenditure, the qualified 
                        issuer adopts an official intent to reimburse 
                        the original expenditure with such proceeds, 
                        and
                            ``(iii) reimbursement is not made later 
                        than 18 months after the date the original 
                        expenditure is paid or the date the project is 
                        placed in service or abandoned, but in no event 
                        more than 3 years after the original 
                        expenditure is paid.
                    ``(D) Treatment of changes in use.--For purposes of 
                paragraph (1)(B), the proceeds of an issue shall not be 
                treated as used for a qualified project to the extent 
                that a qualified borrower takes any action within its 
                control which causes such proceeds not to be used for a 
                qualified project. The Secretary shall prescribe 
                regulations specifying remedial actions that may be 
                taken (including conditions to taking such remedial 
                actions) to prevent an action described in the 
                preceding sentence from causing a bond to fail to be a 
                clean energy coal bond.
    ``(b) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a national clean 
        energy coal bond limitation of $5,000,000,000.
            ``(2) Allocation by secretary.--The Secretary shall 
        allocate the amount described in paragraph (1) among qualified 
        projects in such manner as the Secretary determines 
        appropriate.
    ``(c) Special Rules Relating to Expenditures.--
            ``(1) In general.--An issue shall be treated as meeting the 
        requirements of this subsection if, as of the date of issuance, 
        the qualified issuer reasonably expects--
                    ``(A) 100 percent or more of the available project 
                proceeds from the sale of the issue are to be spent for 
                1 or more qualified projects within the 5-year period 
                beginning on the date of issuance of the clean energy 
                bond,
                    ``(B) a binding commitment with a third party to 
                spend at least 10 percent of such available project 
                proceeds from the sale of the issue will be incurred 
                within the 6-month period beginning on the date of 
                issuance of the clean energy bond or, in the case of a 
                clean energy bond the available project proceeds of 
                which are to be loaned to 2 or more qualified 
                borrowers, such binding commitment will be incurred 
                within the 6-month period beginning on the date of the 
                loan of such proceeds to a qualified borrower, and
                    ``(C) such projects will be completed with due 
                diligence and the available project proceeds from the 
                sale of the issue will be spent with due diligence.
            ``(2) Extension of period.--Upon submission of a request 
        prior to the expiration of the period described in paragraph 
        (1)(A), the Secretary may extend such period if the qualified 
        issuer establishes that the failure to satisfy the 5-year 
        requirement is due to reasonable cause and the related projects 
        will continue to proceed with due diligence.
            ``(3) Failure to spend required amount of bond proceeds 
        within 5 years.--To the extent that less than 100 percent of 
        the available project proceeds of such issue are expended by 
        the close of the 5-year period beginning on the date of 
        issuance (or if an extension has been obtained under paragraph 
        (2), by the close of the extended period), the qualified issuer 
        shall redeem all of the nonqualified bonds within 90 days after 
        the end of such period. For purposes of this paragraph, the 
        amount of the nonqualified bonds required to be redeemed shall 
        be determined in the same manner as under section 142.
    ``(d) Reduced Credit Amount.--The annual credit determined under 
section 54A(b) with respect to any clean coal energy bond shall be 70 
percent of the amount so determined without regard to this subsection.
    ``(e) Cooperative Electric Company; Qualified Energy Tax Credit 
Bond Lender; Governmental Body; Qualified Borrower.--For purposes of 
this section:
            ``(1) Cooperative electric company.--The term `cooperative 
        electric company' means a mutual or cooperative electric 
        company described in section 501(c)(12) or section 
        1381(a)(2)(C), or a not-for-profit electric utility which has 
        received a loan or loan guarantee under the Rural 
        Electrification Act.
            ``(2) Clean energy bond lender.--The term `clean energy 
        bond lender' means a lender which is a cooperative which is 
        owned by, or has outstanding loans to, 100 or more cooperative 
        electric companies and is in existence on February 1, 2002, and 
        shall include any affiliated entity which is controlled by such 
        lender.
            ``(3) Public power entity.--The term `public power entity' 
        means a State utility with a service obligation, as such terms 
        are defined in section 217 of the Federal Power Act (as in 
        effect on the date of enactment of this paragraph).
            ``(4) Qualified issuer.--The term `qualified issuer' 
        means--
                    ``(A) a clean energy bond lender,
                    ``(B) a cooperative electric company, or
                    ``(C) a public power entity.
            ``(5) Qualified borrower.--The term `qualified borrower' 
        means--
                    ``(A) a mutual or cooperative electric company 
                described in section 501(c)(12) or 1381(a)(2)(C), or
                    ``(B) a public power entity.
    ``(f) Special Rules Relating to Pool Bonds.--No portion of a pooled 
financing bond may be allocable to any loan unless the borrower has 
entered into a written loan commitment for such portion prior to the 
issue date of such issue.
    ``(g) Gross-Up of Payment to Issuers in Case of Sequestration.--In 
the case of any payment due under section 6431(b) by reason of section 
6431(f)(3)(A)(v) which is subject to reduction in accordance with a 
sequestration report prepared by the Director of the Office of 
Management and Budget pursuant to the Balanced Budget and Emergency 
Deficit Control Act of 1985 or the Statutory Pay-As-You-Go Act of 
2010--
            ``(1) the amount of such payment shall be increased to an 
        amount equal to the product of--
                    ``(A) the amount of such payment as determined 
                before the reduction in accordance with the 
                sequestration report, and
                    ``(B) a fraction the numerator of which is 1 and 
                the denominator of which is the excess of--
                            ``(i) 100, over
                            ``(ii) the percentage by which such payment 
                        is reduced (without regard to this subsection) 
                        in accordance with the sequestration report, 
                        and
            ``(2) such increase shall be treated as not subject to the 
        sequestration report.
    ``(h) Other Definitions and Special Rules.--For purposes of this 
section:
            ``(1) Qualified clean coal project.--The term `qualified 
        clean coal project' means--
                    ``(A) an atmospheric pollution control facility 
                (within the meaning of section 169(d)(1)),
                    ``(B) a qualifying clean coal project (within the 
                meaning of section 48E(c)(1)),
                    ``(C) a qualified facility (within the meaning of 
                section 45Q(c)), or
                    ``(D) an integrated gasification combined cycle 
                unit, supercritical coal-fired power plant, or 
                ultrasupercritical coal-fired power plant, with an 
                energy efficiency percentage (as defined in section 
                48(c)(3)(C)(i)) that is not less than 5 percentage 
                points greater than the average energy efficiency 
                percentage for coal electrical production facilities in 
                the United States and corrected for the impact of 
                carbon capture (as determined by the Secretary of 
                Energy).
            ``(2) Definitions.--
                    ``(A) Integrated gasification combined cycle 
                unit.--The term `integrated gasification combined cycle 
                unit' means an electric generation unit that produces 
                electricity by converting coal to synthesis gas that is 
                used to fuel a combined-cycle plant that produces 
                electricity from both a combustion turbine (including a 
                combustion turbine/fuel cell hybrid) and a steam 
                turbine.
                    ``(B) Pooled financing bond.--The term `pooled 
                financing bond' shall have the meaning given such term 
                by section 149(f)(6)(A).
                    ``(C) Supercritical coal-fired power plant.--The 
                term `supercritical coal-fired power plant' means a 
                coal-fired power plant operating at pressures such that 
                water boils first and then is converted to superheated 
                steam.
                    ``(D) Ultrasupercritical coal-fired power plant.--
                The term `ultrasupercritical coal-fired power plant' 
                means a power plant described in subparagraph (C) 
                operating above supercritical pressure and at steam 
                temperatures above 1,100 degrees Fahrenheit.''.
            (2) Bonds not subject to maturity limitation.--Paragraph 
        (5) of section 54A(d) of such Code is amended by adding at the 
        end the following new subparagraph:
                    ``(C) Special rule for clean energy coal bonds.--
                The requirements of this paragraph shall not apply to a 
                clean energy coal bond under section 54G.''.
            (3) Conforming amendments.--
                    (A) Paragraph (1) of section 54A(d) of the Internal 
                Revenue Code of 1986 is amended by striking ``or'' at 
                the end of subparagraph (D), by inserting ``or'' at the 
                end of subparagraph (E), and by inserting after 
                subparagraph (E) the following new subparagraph:
                    ``(F) a clean energy coal bond,''.
                    (B) The table of sections for subpart I of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986 is amended by adding at the end the 
                following new item:

``Sec. 54G. Clean energy coal bonds.''.
    (b) Bonds Treated as Specified Tax Credit Bonds.--
            (1) In general.--Section 6431(f)(3)(A) of the Internal 
        Revenue Code of 1986 is amended by striking ``or'' at the end 
        of clause (iii), by striking ``and'' at the end of clause (iv) 
        and inserting ``or'', and by adding at the end the following 
        new clause:
                            ``(v) a clean energy coal bond (as defined 
                        in section 54G), and''.
            (2) Special rule.--Paragraph (2) of section 6431(f) of such 
        Code is amended--
                    (A) by striking ``clause (i) or (ii)'' and 
                inserting ``clause (i), (ii), or (v)''; and
                    (B) by striking the heading and inserting ``Special 
                rule for certain bonds''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

                      TITLE III--REPORTS REQUIRED

SEC. 301. DEFINITIONS.

    In this title:
            (1) CCS.--the term ``CCS'' means carbon capture and 
        storage, including geological storage and enhanced oil 
        recovery, as well as other forms of carbon utilization.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 302. REPORTS TO CONGRESS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, and annually thereafter, the Secretary shall submit to 
Congress and make available to the public (including on the website of 
the Department of Energy) a report that--
            (1) provides a comprehensive review of the annual progress 
        made by the National Laboratories and the offices of the 
        Department of Energy that are currently active in researching 
        and developing clean coal technologies and CCS, including--
                    (A) the status of carbon capture, transport, 
                storage, and utilization, including--
                            (i) an overview and evaluation of key 
                        technologies;
                            (ii) a description of existing CCS 
                        infrastructure and demonstration projects in 
                        the United States, including the status of 
                        permitting, financing, and construction and the 
                        expected date of commencement of operations;
                            (iii) the associated costs of key 
                        technologies, including the amount and type of 
                        Federal funding; and
                            (iv) an estimated timeline to commercial 
                        scalability;
                    (B) a description of the current barriers for CCS 
                deployment and commercialization, including--
                            (i) market failures;
                            (ii) regulatory framework;
                            (iii) long-term liability for carbon 
                        storage;
                            (iv) public outreach; and
                            (v) annual progress on overcoming the 
                        identified barriers;
                    (C) possible solutions to address the barriers 
                described in subparagraph (B), including--
                            (i) funding options for CCS projects;
                            (ii) options to improve the current legal 
                        and regulatory framework; and
                            (iii) suggestions for Federal Government 
                        action on effective public outreach; and
                    (D) a separate review that focuses on international 
                research and projects sponsored by the Department of 
                Energy, including--
                            (i) a clear description of how the Federal 
                        Government has participated in each project, 
                        including the amount and type of Federal 
                        funding;
                            (ii) the technical and economic status of 
                        each project, including the expected date of 
                        commencement of operations; and
                            (iii) recommendations on--
                                    (I) how to most efficiently engage 
                                in each project in the future; and
                                    (II) whether a change of funding 
                                support could assist in those efforts; 
                                and
            (2) addresses all of the international consortia that the 
        Federal Government is currently engaged in by--
                    (A) detailing the type of Federal Government 
                activity in each consortium;
                    (B) including a description of any ``lessons 
                learned'' by participants from the Federal Government 
                as a direct result of consortium activity;
                    (C) describing the benefits derived from Federal 
                Government involvement; and
                    (D) making recommendations for the involvement of 
                the Federal Government in each consortium including--
                            (i) whether the Federal Government should 
                        continue to participate; and
                            (ii) how the Federal Government could 
                        increase the productivity of the consortium, if 
                        possible.
    (b) Additional Report.--Not later than 18 months after the date of 
enactment of this Act, and not less frequently than once every year for 
the next 5 years thereafter, the Secretary shall submit to Congress and 
make available to the public (including on the website of the 
Department of Energy) a report that--
            (1) provides an assessment of the upcoming CCS projects in 
        Canada, including--
                    (A) the SaskPower Boundary Dam Integrated CCS 
                Demonstration Project;
                    (B) the Shell Quest Project; and
                    (C) the Alberta Carbon Trunk Line; and
            (2) determines--
                    (A) whether operation of the CCS system is meeting 
                the project goals;
                    (B) the economic status of the project, including--
                            (i) an overview of the ratio of private and 
                        public funds for capital costs;
                            (ii) whether the project is generating 
                        revenue; and
                            (iii) the current return on investment;
                    (C) whether the project is the type of project that 
                the Federal Government should replicate in the United 
                States to move CCS forward on a pilot level;
                    (D) whether the project could comply with 
                subparagraphs (E) or (F) if the project should be 
                replicated under subparagraph (C);
                    (E) whether the Federal Government and private 
                industry in the United States can work together to 
                develop a similar pilot project in the United States; 
                and
                    (F) if the Federal Government and private industry 
                cannot work together under subparagraph (E), whether 
                the Federal Government should work jointly with Canada 
                on a similar project.
                                 <all>
```