II 

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. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Advanced Clean Coal Technology Investment in Our Na6 tion Act of 2015’’ or the ‘‘ACCTION Act of 2015’’. 

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

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

TITLE I—FEDERAL INVESTMENT IN CLEAN COAL 

TECHNOLOGIES 


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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. 

1 SEC. 2. FINDINGS. 

2 Congress finds that— 

3 (1) the President believes that the United 

4 States energy policy must have ‘‘an all-of-the-above 

5 strategy for the 21st century that develops every 

6 source of American-made energy’’; 

7 (2) according to the Energy Information Ad8 ministration, 37 percent of all energy generated in 

9 the United States comes from coal and by 2040, 

10 coal will still account for 32 percent of energy gen11 eration in the United States; 

12 (3) the United States has enough recoverable 

13 coal reserves to last at least another 250 years; 

14 (4) as the world becomes increasingly carbon 

15 constrained, coal-fired power plants must increas16 ingly be integrated with carbon capture and storage 

17 systems; 


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1 (5) efficiency improvements to the coal fleet will 

2 decrease carbon emissions and use less coal while 

3 providing the same power; 

4 (6) the potential to increase efficiency is evident 

5 in the current fleet of power plants in the United 

6 States, as the top 10 percent of coal plants have ef7 ficiencies as high as 37 percent while the average 

8 plant has an efficiency of 32 percent; 

9 (7) efficiencies as high as 48 percent may be at10 tained with ultrasupercritical coal-fired power plants. 

11 (8) replacing the average subcritical coal-fired 

12 power plant with a supercritical or ultrasupercritical 

13 coal-fired power plant would reduce carbon emis14 sions by 18 to 22 percent per megawatt hour of en15 ergy generated; and 

16 (9) the coal industry is a significant source of 

17 jobs in the United States as in 2012 alone, coal was 

18 responsible for 137,650 jobs for coal miners, 92,472 

19 jobs for operator employees, and 45,178 jobs for 

20 contractors. 

21 TITLE I—FEDERAL INVESTMENT 

22 IN CLEAN COAL TECHNOLOGIES 

23 SEC. 101. LARGE-SCALE CARBON STORAGE PROGRAM. 

24 (a) IN GENERAL.—Subtitle F of title IX of the En25 ergy Policy Act of 2005 (42 U.S.C. 16291 et seq.) is 


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1 amended by inserting after section 963 (42 U.S.C. 16293) 

2 the following: 

3 ‘‘SEC. 963A. LARGE-SCALE CARBON STORAGE PROGRAM. 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) INDUSTRIAL SOURCE.—The term ‘indus6 trial source’ means any source of carbon dioxide that 

7 is not naturally occurring. 

8 ‘‘(2) LARGE-SCALE.—The term ‘large-scale’ 

9 means the injection from industrial sources into a 

10 geological formation of— 

11 ‘‘(A) over 1,000,000 tons of carbon dioxide 

12 each year; or 

13 ‘‘(B) carbon dioxide to a scale that dem14 onstrates the ability to inject and sequester sev15 eral million metric tons of industrial source car16 bon dioxide for a large number of years. 

17 ‘‘(3) SECRETARY CONCERNED.—The term ‘Sec18 retary concerned’ means— 

19 ‘‘(A) the Secretary of Agriculture (acting 

20 through the Chief of the Forest Service), with 

21 respect to National Forest System land; and 

22 ‘‘(B) the Secretary of the Interior, with re23 spect to land managed by the Bureau of Land 

24 Management (including land held for the ben25 efit of an Indian tribe). 


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1 ‘‘(b) PROGRAM.—The Secretary shall carry out a pro2 gram to demonstrate the integration of systems for the 

3 capture, transportation, and injection of carbon dioxide 

4 from industrial sources, either for the purpose of long5 term geological storage or enhanced oil recovery at a com6 mercial scale. 

7 ‘‘(c) AUTHORIZED ASSISTANCE.— 

8 ‘‘(1) IN GENERAL.—In carrying out the pro9 gram, the Secretary may enter into cooperative 

10 agreements to provide financial and technical assist11 ance to up to 10 large-scale geological storage or en12 hanced oil recovery projects. 

13 ‘‘(2) LIMITATION.—Not fewer than 3 of the 10 

14 projects selected shall be large-scale projects that 

15 undertake site characterization and permitting to 

16 qualify the projects as ready for long-term saline 

17 storage sites. 

18 ‘‘(d) PROJECT SELECTION.—The Secretary shall 

19 competitively select recipients of cooperative agreements 

20 under this section from among applicants that— 

21 ‘‘(1) provide the Secretary with sufficient geo22 logical site information (including hydrogeological 

23 and geophysical information) to establish that the 

24 proposed geological formation is capable of use for 

25 enhanced oil recovery and, in the case of geological 


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1 storage, is capable of long-term storage of the in2 jected carbon dioxide, including— 

3 ‘‘(A) the location, extent, and storage ca4 pacity of the geological storage unit at the site 

5 into which the carbon dioxide will be injected; 

6 ‘‘(B) the principal potential modes of 

7 geomechanical failure in the geological storage 

8 unit; 

9 ‘‘(C) the ability of the geological storage 

10 unit to retain injected carbon dioxide; 

11 ‘‘(D) the measurement, monitoring, and 

12 verification requirements necessary to ensure 

13 adequate information on the operation of the 

14 geological storage unit during and after the in15 jection of carbon dioxide; and 

16 ‘‘(E) a study and report on the rate of in17 jection of carbon dioxide from power plants 

18 (based on operating the plant on a 24-hours-a19 day, 7-days-a-week, and 365-days-a-year basis 

20 over several decades) necessary to avoid— 

21 ‘‘(i) imbalances of carbon dioxide; and 

22 ‘‘(ii) making the proposed geological 

23 formation of the site into which the carbon 

24 dioxide will be injected unusable, unstable, 


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1 or such that there would be forced stop2 pages of injection; 

3 ‘‘(2) have legal authority to use the land or in4 terests in land necessary for— 

5 ‘‘(A) the injection of the carbon dioxide at 

6 the proposed geological storage unit or en7 hanced oil recovery site; and 

8 ‘‘(B) the storage, closure, monitoring, and 

9 long-term stewardship of the geological storage 

10 unit for geological storage of carbon dioxide; 

11 and 

12 ‘‘(3) sequester not fewer than 500,000 metric 

13 tons of carbon dioxide in 1 contiguous geographic 

14 and geologic formation. 

15 ‘‘(e) TERMS AND CONDITIONS.—The Secretary shall 

16 condition receipt of financial assistance pursuant to a co17 operative agreement under this section on the recipient 

18 agreeing— 

19 ‘‘(1) to comply with all applicable Federal and 

20 State laws (including regulations), including— 

21 ‘‘(A) the requirements of the underground 

22 injection control program under part C of the 

23 Safe Drinking Water Act (42 U.S.C. 300h et 

24 seq.) (referred to in this section as the ‘UIC 

25 program’); and 


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1 ‘‘(B) any other Federal and State require2 ments to protect drinking water supplies; and 

3 ‘‘(2) in the case of industrial sources subject to 

4 the Clean Air Act (42 U.S.C. 7401 et seq.), to inject 

5 only carbon dioxide captured from industrial sources 

6 in compliance with that Act. 

7 ‘‘(f) INDEMNIFICATION AGREEMENTS FOR GEOLOGI8 CAL STORAGE.— 

9 ‘‘(1) DEFINITION OF LIABILITY.—In this sub10 section, the term ‘liability’ means any legal liability 

11 for— 

12 ‘‘(A) bodily injury, sickness, disease, or 

13 death; 

14 ‘‘(B) loss of or damage to property, or loss 

15 of use of property; or 

16 ‘‘(C) injury to or destruction or loss of nat17 ural resources, including fish, wildlife, and 

18 drinking water supplies. 

19 ‘‘(2) AGREEMENTS.—Not later than 1 year 

20 after the date of the receipt by the Secretary of a 

21 completed application for assistance authorized 

22 under subsection (c), the Secretary may agree to in23 demnify and hold harmless the recipient of a cooper24 ative agreement under this section from liability 

25 arising out of or resulting from a demonstration 


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1 project in excess of the amount of liability covered 

2 by financial protection maintained by the recipient 

3 in accordance with the requirements of the UIC pro4 gram. 

5 ‘‘(3) EXCEPTION FOR GROSS NEGLIGENCE AND

6 INTENTIONAL MISCONDUCT.—Notwithstanding para7 graph (1), the Secretary may not indemnify the re8 cipient of a cooperative agreement under this section 

9 from liability arising out of conduct of a recipient 

10 that is grossly negligent or that constitutes inten11 tional misconduct. 

12 ‘‘(4) COLLECTION OF FEES.— 

13 ‘‘(A) IN GENERAL.—The Secretary shall 

14 collect a fee from any person with whom an 

15 agreement for indemnification is executed under 

16 this subsection in an amount that is equal to 

17 the net present value of payments made by the 

18 United States to cover liability under the in19 demnification agreement. 

20 ‘‘(B) AMOUNT.—The Secretary shall estab21 lish, by regulation, criteria for determining the 

22 amount of the fee, taking into account— 

23 ‘‘(i) the likelihood of an incident re24 sulting in liability to the United States 

25 under the indemnification agreement; and 


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1 ‘‘(ii) other factors pertaining to the 

2 hazard of the indemnified project. 

3 ‘‘(C) USE OF FEES.—Fees collected under 

4 this paragraph shall be deposited in the Treas5 ury and credited to miscellaneous receipts. 

6 ‘‘(5) CONTRACTS IN ADVANCE OF APPROPRIA7 TIONS.— 

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), the Secretary may enter into agree10 ments of indemnification under this subsection 

11 in advance of appropriations and incur obliga12 tions without regard to section 1341 of title 31, 

13 United States Code (commonly known as the 

14 ‘Anti-Deficiency Act’), or section 11 of title 41, 

15 United States Code (commonly known as the 

16 ‘Adequacy of Appropriations Act’). 

17 ‘‘(B) LIMITATION.—The amount of indem18 nification under this subsection shall not exceed 

19 $10,000,000,000 (adjusted not less than once 

20 during each 5-year period following the date of 

21 enactment of this section, in accordance with 

22 the aggregate percentage change in the Con23 sumer Price Index since the previous adjust24 ment under this subparagraph), in the aggre25 gate, for all persons indemnified in connection 


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1 with an agreement and for each project, includ2 ing such legal costs as are approved by the Sec3 retary. 

4 ‘‘(6) CONDITIONS OF AGREEMENTS OF INDEM5 NIFICATION.— 

6 ‘‘(A) IN GENERAL.—The agreement shall 

7 provide that, if the Secretary makes a deter8 mination that there is a substantial likelihood 

9 that the United States will be required to make 

10 indemnity payments under the agreement, the 

11 Attorney General— 

12 ‘‘(i) shall collaborate with the recipi13 ent of an award under this subsection; and 

14 ‘‘(ii) may— 

15 ‘‘(I) approve the payment of any 

16 claim under the agreement of indem17 nification; 

18 ‘‘(II) appear on behalf of the re19 cipient; 

20 ‘‘(III) take charge of an action; 

21 and 

22 ‘‘(IV) settle or defend an action. 

23 ‘‘(B) SETTLEMENT OF CLAIMS.— 

24 ‘‘(i) IN GENERAL.—The Attorney 

25 General shall have final authority on behalf 


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1 of the United States to settle or approve 

2 the settlement of any claim under this sub3 section on a fair and reasonable basis with 

4 due regard for the purposes of this sub5 section. 

6 ‘‘(ii) EXPENSES.—The settlement 

7 shall not include expenses in connection 

8 with the claim incurred by the recipient. 

9 ‘‘(g) FEDERAL LAND.— 

10 ‘‘(1) IN GENERAL.—The Secretary concerned 

11 may authorize the siting of a project on Federal 

12 land under the jurisdiction of the Secretary con13 cerned in a manner consistent with applicable laws 

14 and land management plans and subject to such 

15 terms and conditions as the Secretary concerned de16 termines to be necessary. 

17 ‘‘(2) FRAMEWORK FOR GEOLOGICAL CARBON

18 SEQUESTRATION ON PUBLIC LAND.—In determining 

19 whether to authorize a project on Federal land, the 

20 Secretary concerned shall take into account the 

21 framework for geological carbon sequestration on 

22 public land prepared in accordance with section 714 

23 of the Energy Independence and Security Act of 

24 2007 (Public Law 110–140; 121 Stat. 1715). 


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1 ‘‘(h) ACCEPTANCE OF TITLE AND LONG-TERM MONI2 TORING.— 

3 ‘‘(1) IN GENERAL.—As a condition of a cooper4 ative agreement under this section, the Secretary 

5 may accept title to, or transfer of administrative ju6 risdiction from another Federal agency over, any 

7 land or interest in land necessary for the monitoring, 

8 remediation, or long-term stewardship of a project 

9 site. 

10 ‘‘(2) LONG-TERM MONITORING ACTIVITIES FOR

11 GEOLOGICAL STORAGE.—After accepting title to, or 

12 transfer of, a site closed in accordance with this sec13 tion, the Secretary shall monitor the site and con14 duct any remediation activities to ensure the geologi15 cal integrity of the site and prevent any 

16 endangerment of public health or safety. 

17 ‘‘(3) FUNDING.—There is appropriated to the 

18 Secretary, out of funds of the Treasury not other19 wise appropriated, such sums as are necessary to 

20 carry out paragraph (2). 

21 ‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated to carry out this section 

23 such sums as are necessary.’’. 


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1 SEC. 102. RESEARCH, DEVELOPMENT AND DEMONSTRA2 TION PROGRAMS. 

3 (a) IN GENERAL.—Section 962 of the Energy Policy 

4 Act of 2005 (42 U.S.C. 16292) is amended— 

5 (1) in subsection (a)— 

6 (A) in paragraph (10), by striking ‘‘and’’ 

7 at the end; 

8 (B) in paragraph (11), by striking the pe9 riod at the end and inserting ‘‘; and’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(12) specific additional programs to address 

12 water use and reuse; 

13 ‘‘(13) the testing, including the construction of 

14 testing facilities, for high temperature materials for 

15 use in advanced systems for combustion or use of 

16 coal; and 

17 ‘‘(14) innovations to application of existing coal 

18 conversion systems designed to increase efficiency of 

19 conversion, flexibility of operation, and other modi20 fications to address existing usage requirements.’’; 

21 (2) by redesignating subsections (b) through (d) 

22 as subsections (c) through (e), respectively; 

23 (3) by inserting after subsection (a) the fol24 lowing: 

25 ‘‘(b) TRANSFORMATIONAL COAL TECHNOLOGY PRO26 GRAM.— 


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1 ‘‘(1) IN GENERAL.—As part of the program es2 tablished under subsection (a), the Secretary may 

3 carry out a program designed to undertake research, 

4 development, and demonstration of technologies, in5 cluding the accelerated development of— 

6 ‘‘(A) chemical looping technology; 

7 ‘‘(B) supercritical carbon dioxide power 

8 generation cycles; 

9 ‘‘(C) pressurized oxycombustion, including 

10 new and retrofit technologies; and 

11 ‘‘(D) other technologies that are character12 ized by the use of— 

13 ‘‘(i) alternative energy cycles; 

14 ‘‘(ii) thermionic devices using waste 

15 heat; 

16 ‘‘(iii) fuel cells; 

17 ‘‘(iv) replacement of chemical proc18 esses with biotechnology; 

19 ‘‘(v) nanotechnology; 

20 ‘‘(vi) new materials in applications 

21 (other than extending cycles to higher tem22 perature and pressure), such as mem23 branes or ceramics; 

24 ‘‘(vii) carbon utilization (other than 

25 enhanced oil recovery), such as construcVerDate Sep 11 2014 20:10 Mar 06, 2015 Jkt 049200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S601.IS S601

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1 tion materials, using low quality energy to 

2 reconvert back to a fuel, or manufactured 

3 food; 

4 ‘‘(viii) advanced gas separation con5 cepts; and 

6 ‘‘(ix) other technologies, including— 

7 ‘‘(I) modular, manufactured com8 ponents; and 

9 ‘‘(II) innovative production or re10 search techniques, such as using 3-D 

11 printer systems, for the production of 

12 early research and development proto13 types. 

14 ‘‘(2) COST SHARE.—In carrying out the pro15 gram described in paragraph (1), the Secretary may 

16 enter into partnerships with private entities to share 

17 the costs of carrying out the program.’’; and 

18 (4) in subsection (c) (as so redesignated)— 

19 (A) by striking paragraph (1) and insert20 ing the following: 

21 ‘‘(1) IN GENERAL.—In carrying out programs 

22 authorized by this section, during each of calendar 

23 years 2016, 2018, 2021, and annually thereafter, 

24 the Secretary shall identify cost and performance 

25 goals for coal-based technologies that would permit 


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1 the continued cost-competitive use of coal for the 

2 production of electricity, chemical feedstocks, trans3 portation fuels, and other marketable products.’’; 

4 and 

5 (B) in paragraph (2), by striking ‘‘date of 

6 enactment of this Act’’ each place it appears 

7 and inserting ‘‘date of enactment of the Ad8 vanced Clean Coal Technology Investment in 

9 Our Nation Act of 2015’’. 

10 (b) ADVISORY COMMITTEE; AUTHORIZATION OF AP11 PROPRIATIONS.—Section 963 of the Energy Policy Act of 

12 2005 (42 U.S.C. 16293) is amended— 

13 (1) in subsection (c), by striking paragraph (6) 

14 and inserting the following: 

15 ‘‘(6) ADVISORY COMMITTEE.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), the Secretary shall establish an advi18 sory committee— 

19 ‘‘(i) to undertake, not less frequently 

20 than once every 3 years, a review and pre21 pare a report on the progress being made 

22 by the Department of Energy to achieve 

23 the goals described in subsections (a) and 

24 (b) of section 962 and subsection (b) of 

25 this section; and 


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1 ‘‘(ii) to assess and provide rec2 ommendations on how the capture of car3 bon from other fossil fuels could be sup4 ported through the objectives described in 

5 subsection (b). 

6 ‘‘(B) MEMBERSHIP REQUIREMENTS.— 

7 Members of the advisory committee under sub8 paragraph (A) shall be appointed by the Presi9 dent.’’; and 

10 (2) by striking subsection (d) and inserting the 

11 following: 

12 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

13 are authorized to be appropriated to carry out section 962 

14 and this section— 

15 ‘‘(1) $1,654,000,000 for fiscal years 2016 

16 through 2019; 

17 ‘‘(2) $5,283,000,000 for fiscal years 2020 

18 through 2026; and 

19 ‘‘(3) $3,300,000,000 for fiscal years 2027 

20 through 2036.’’. 

21 (c) COST SHARING REDUCTION.—Section 988(b) of 

22 the Energy Policy Act of 2005 (42 U.S.C. 16352(b)) is 

23 amended by striking paragraph (3) and inserting the fol24 lowing: 


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1 ‘‘(3) REDUCTION.—The Secretary shall reduce 

2 or eliminate the requirement of paragraph (1) for a 

3 research and development activity of an applied na4 ture if the Secretary— 

5 ‘‘(A) is petitioned for a reduction by a non6 Federal source; and 

7 ‘‘(B) determines that the reduction is nec8 essary and appropriate to achieve the purposes 

9 and goals of— 

10 ‘‘(i) this Act; and 

11 ‘‘(ii) the program or activity for which 

12 the research or development activity is 

13 being undertaken.’’. 

14 SEC. 103. INNOVATIVE TECHNOLOGY LOAN GUARANTEE 

15 PROGRAM. 

16 (a) IN GENERAL.—Section 1703 of the Energy Policy 

17 Act of 2005 (42 U.S.C. 16513) is amended by adding at 

18 the end the following: 

19 ‘‘(f) OTHER FORMS OF FEDERAL SUPPORT AL20 LOWED.—An eligible project that is eligible for or in re21 ceipt of other forms of Federal financial assistance shall 

22 not be precluded from receiving a loan guarantee made 

23 pursuant to this section. 

24 ‘‘(g) TIMELINE FOR LOAN GUARANTEE APPROVAL

25 FOR CERTAIN PROJECTS.—Notwithstanding any other 


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1 provision of law, not later than 2 years after the date of 

2 enactment of the Advanced Clean Coal Technology Invest3 ment in Our Nation Act of 2015, the Secretary shall— 

4 ‘‘(1) give final approval to applications for loan 

5 guarantees under subsection (a) for projects de6 scribed in subsection (b)(2); and 

7 ‘‘(2) make loans for those projects in amounts 

8 equal to $2,000,000,000.’’. 

9 (b) CONFORMING AMENDMENTS.— 

10 (1) Title III of division C of the Omnibus Ap11 propriations Act, 2009 (Public Law 111–8; 123 

12 Stat. 619) is amended in the matter under the head13 ing ‘‘TITLE 17 INNOVATIVE TECHNOLOGY LOAN

14 GUARANTEE PROGRAM’’, by striking the seventh, 

15 eighth, and ninth provisos. 

16 (2) The Supplemental Appropriations Act, 2009 

17 (Public Law 111–32) is amended by striking section 

18 408 (123 Stat. 1878). 

19 SEC. 104. COORDINATION OF CLEAN COAL GENERATING 

20 PROJECTS. 

21 (a) DEFINITIONS.—In this section, the term ‘‘eligible 

22 clean coal generating projects’’ means any project under23 taken to install and operate an advanced carbon capture 

24 and storage technology at a new or existing steam gener25 ating unit. 


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1 (b) LEAD AGENCY.—The Department of Energy 

2 shall be the lead agency for the purposes of coordinating 

3 all requirements under Federal law with respect to eligible 

4 clean coal generating projects, including any requirements 

5 of— 

6 (1) the Clean Air Act (42 U.S.C. 7401 et seq.); 

7 (2) the Federal Water Pollution Control Act 

8 (33 U.S.C. 1251 et seq.); 

9 (3) the Endangered Species Act of 1973 (16 

10 U.S.C. 1531 et seq.); 

11 (4) the National Environmental Policy Act of 

12 1969 (42 U.S.C. 4321 et seq.); and 

13 (5) the Safe Drinking Water Act (42 U.S.C. 

14 300f et seq.). 

15 (c) SCHEDULE.—In carrying out subsection (b), the 

16 Secretary of Energy shall establish a schedule for all Fed17 eral authorizations with respect to each eligible project, 

18 including by— 

19 (1) setting binding intermediate milestones and 

20 deadlines to ensure expeditious completion of all pro21 ceedings and final action on all Federal authoriza22 tions relating to the eligible project; 

23 (2) requiring that all permit decisions and re24 lated environmental reviews under applicable Federal 

25 law shall be completed not later than 1 year after 


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1 the date on which a complete application for each 

2 environmental review is submitted, or as soon as 

3 practicable thereafter; and 

4 (3) coordinating, to the maximum extent prac5 ticable, any State permitting and environmental re6 quirements. 

7 (d) MEMORANDA OF UNDERSTANDING.—To stream8 line and expedite review of Federal authorizations for eli9 gible clean coal generating projects, the Secretary of En10 ergy shall— 

11 (1) enter into memoranda of understanding 

12 with applicable Federal agencies; 

13 (2) facilitate a pre-application review process 

14 with applicable Federal agencies; and 

15 (3) consolidate all environmental reviews of the 

16 eligible clean coal generating project into a single 

17 environmental review document. 

18 (e) JUDICIAL REVIEW.—With respect to an applica19 tion for Federal authorization relating to an eligible clean 

20 coal generating project, the applicable Federal circuit 

21 court may review and remedy— 

22 (1) any failure by a Federal agency to complete 

23 action on the application by the date that is 1 year 

24 after the date on which the complete application was 

25 submitted to the agency; and 


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1 (2) any issuance of an action or order by a 

2 Federal agency with respect to the application that 

3 is inconsistent with applicable Federal law. 

4 TITLE II—FEDERAL INCENTIVES 

5 FOR PRIVATE INVESTMENT 

6 IN CLEAN COAL TECH7 NOLOGIES 

8 SEC. 201. SEVEN-YEAR AMORTIZATION FOR CERTAIN SYS9 TEMS INSTALLED ON COAL-FIRED ELECTRIC 

10 GENERATION UNITS. 

11 (a) IN GENERAL.—Subsection (d) of section 169 of 

12 the Internal Revenue Code of 1986 is amended by adding 

13 at the end the following new paragraph: 

14 ‘‘(6) SPECIAL RULE FOR SYSTEMS INSTALLED

15 ON COAL-FIRED ELECTRIC GENERATION UNITS.— 

16 ‘‘(A) IN GENERAL.—Any mechanical or 

17 electronic system— 

18 ‘‘(i) which is installed on a coal-fired 

19 electric generation unit after the date of 

20 the enactment of this paragraph, and 

21 ‘‘(ii) which reduces carbon dioxide 

22 emissions per net megawatt hour of elec23 tricity generation by 1 or more of the 

24 means described in subparagraph (B) or 

25 any other means, 


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1 shall be treated for purposes of this section as 

2 a new identifiable treatment facility which 

3 abates or controls atmospheric pollution or con4 tamination by removing, altering, disposing, 

5 storing, or preventing the creation or emission 

6 of pollutants, contaminants, wastes, or heat. 

7 Paragraph (1)(C) of this subsection, and sub8 section (e), shall not apply to any system which 

9 is so treated. 

10 ‘‘(B) MEANS FOR REDUCING EMISSIONS.— 

11 The means described in this subparagraph 

12 are— 

13 ‘‘(i) optimizing combustion, 

14 ‘‘(ii) optimizing sootblowing and heat 

15 transfer, 

16 ‘‘(iii) upgrading steam temperature 

17 control capabilities, 

18 ‘‘(iv) reducing exit gas temperatures 

19 (air heater modifications), 

20 ‘‘(v) predrying low rank coals using 

21 power plant waste heat, 

22 ‘‘(vi) modifying steam turbines or 

23 change the steam path/blading, 


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1 ‘‘(vii) replacing single speed motors 

2 with variable speed drives for fans and 

3 pumps, and 

4 ‘‘(viii) improving operational controls, 

5 including neural networks. 

6 ‘‘(C) SPECIAL RULE FOR MINIMUM TAX.— 

7 Section 56(a)(5) shall not apply to property to 

8 which this paragraph applies.’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 this section shall apply to property placed in service after 

11 the date of the enactment of this Act. 

12 SEC. 202. CREDIT FOR CARBON SEQUESTRATION FROM 

13 COAL FACILITIES. 

14 (a) IN GENERAL.—Subpart E of part IV of sub15 chapter A of chapter 1 of the Internal Revenue Code of 

16 1986 is amended by inserting after section 48D the fol17 lowing new section: 

18 ‘‘SEC. 48E. QUALIFYING CARBON DIOXIDE CAPTURE, 

19 TRANSPORT, AND STORAGE EQUIPMENT 

20 CREDIT. 

21 ‘‘(a) GENERAL RULE.—For purposes of section 46, 

22 the qualifying carbon dioxide capture, transport, and stor23 age equipment credit for any taxable year is an amount 

24 equal to 30 percent of the qualified investment for such 

25 taxable year. 


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1 ‘‘(b) QUALIFIED INVESTMENT.— 

2 ‘‘(1) IN GENERAL.—For purposes of subsection 

3 (a), the qualified investment for any taxable year is 

4 the basis of eligible carbon dioxide capture, trans5 port, and storage property placed in service by the 

6 taxpayer during such taxable year which is part of 

7 a qualifying clean coal project— 

8 ‘‘(A)(i) the construction, reconstruction, or 

9 erection of which is completed by the taxpayer, 

10 or 

11 ‘‘(ii) which is acquired by the taxpayer if 

12 the original use of such property commences 

13 with the taxpayer, and 

14 ‘‘(B) with respect to which depreciation (or 

15 amortization in lieu of depreciation) is allow16 able. 

17 ‘‘(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED

18 PROPERTY.—Rules similar to section 48(a)(4) shall 

19 apply for purposes of this section. 

20 ‘‘(3) CERTAIN QUALIFIED PROGRESS EXPENDI21 TURES RULES MADE APPLICABLE.—Rules similar to 

22 the rules of subsections (c)(4) and (d) of section 46 

23 (as in effect on the day before the enactment of the 

24 Revenue Reconciliation Act of 1990) shall apply for 

25 purposes of this section. 


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1 ‘‘(c) DEFINITIONS.—For purposes of this section— 

2 ‘‘(1) COAL.—The term ‘coal’ means bituminous 

3 coal, subbituminous coal, and lignite. 

4 ‘‘(2) ELIGIBLE CARBON DIOXIDE CAPTURE, 

5 TRANSPORT, AND STORAGE PROPERTY.—The term 

6 ‘eligible carbon dioxide capture, transport, and stor7 age property’ means any property— 

8 ‘‘(A) which is used to capture, transport, 

9 or store carbon dioxide emitted at a qualifying 

10 clean coal project, including equipment used to 

11 separate and pressurize carbon dioxide for 

12 transport (including equipment to operate such 

13 equipment), 

14 ‘‘(B)(i) the construction, reconstruction, or 

15 erection of which is completed by the taxpayer, 

16 or 

17 ‘‘(ii) which is acquired by the taxpayer if 

18 the original use of such property commences 

19 with the taxpayer, and 

20 ‘‘(C) with respect to which depreciation (or 

21 amortization in lieu of depreciation) is allow22 able. 

23 ‘‘(3) QUALIFIED POLYGENERATION PLANT.— 

24 The term ‘qualified polygeneration plant’ means a 

25 plant that produces 2 or more marketable products, 


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1 including electricity, chemicals, liquid or gaseous 

2 fuels, and carbon dioxide for beneficial use or sale. 

3 ‘‘(4) QUALIFYING CLEAN COAL PROJECT.— 

4 ‘‘(A) IN GENERAL.—The term ‘qualifying 

5 clean coal project’ means any project if such 

6 project— 

7 ‘‘(i) uses— 

8 ‘‘(I) gasification technology (as 

9 defined in section 48B(c)(2)), or 

10 ‘‘(II) coal as not less than 75 

11 percent of the project fuel source, 

12 to produce electricity or is a polygeneration 

13 plant, and 

14 ‘‘(ii)(I) is a new project which is de15 signed to meet the requirements of sub16 paragraph (B), or 

17 ‘‘(II) consists of retrofits to existing 

18 equipment such that the project meets the 

19 requirements of subparagraph (B). 

20 ‘‘(B) REQUIREMENTS.— 

21 ‘‘(i) IN GENERAL.—A project shall 

22 meet the emission requirement of clause 

23 (ii) and the carbon capture requirement of 

24 clause (iii). 


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1 ‘‘(ii) EMISSION REQUIREMENT.—The 

2 requirement of this clause is met if the 

3 project is designed— 

4 ‘‘(I) to emit carbon dioxide at an 

5 average annual rate of less than 1,100 

6 pounds per net megawatt hour of elec7 trical generation, or 

8 ‘‘(II) such that the carbon diox9 ide emissions of such project are no 

10 greater than half of the average car11 bon dioxide emissions for facilities 

12 producing electricity during 2005 

13 from the same coal rank as such 

14 project, as determined under regula15 tions prescribed by the Secretary in 

16 consultation with the Secretary of En17 ergy and the Administrator of the En18 vironmental Protection Agency. 

19 ‘‘(iii) CARBON CAPTURE REQUIRE20 MENT.—The requirement of this clause is 

21 met— 

22 ‘‘(I) if such unit is among the 

23 first 1,000 megawatts of electric gen24 eration units certified by the Sec25 retary under subsection (e), to capVerDate Sep 11 2014 20:10 Mar 06, 2015 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S601.IS S601

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1 ture and sequester not less than 

2 500,000 metric tons per year of car3 bon dioxide, 

4 ‘‘(II) if such unit is among the 

5 next 3,000 megawatts of electric gen6 eration units certified by the Sec7 retary under subsection (e), to cap8 ture and sequester not less than 

9 1,000,000 metric tons per year of car10 bon dioxide, and 

11 ‘‘(III) for any other unit, to cap12 ture and sequester not less than 

13 2,000,000 metric tons per year of car14 bon dioxide. 

15 ‘‘(d) AGGREGATE CREDITS.— 

16 ‘‘(1) IN GENERAL.—No credit shall be allowed 

17 under this section with respect to any qualifying 

18 clean coal project unless such project is certified by 

19 the Secretary under subsection (e). 

20 ‘‘(2) LIMITATION ON PROJECTS CERTIFIED.— 

21 The Secretary may certify under subsection (e) no 

22 more than— 

23 ‘‘(A) 20 projects described in subsection 

24 (c)(4)(A)(ii)(I), and 


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1 ‘‘(B) 20 projects described in subsection 

2 (c)(4)(A)(ii)(II). 

3 ‘‘(e) CERTIFICATION.— 

4 ‘‘(1) CERTIFICATION PROCESS.—The Secretary, 

5 in consultation with the Secretary of Energy and the 

6 Administrator of the Environmental Protection 

7 Agency, shall establish a certification process to de8 termine if a project meets all criteria and other re9 quirements to be recognized as a qualifying clean 

10 coal project. 

11 ‘‘(2) FEEDSTOCK REQUIREMENTS.—After the 

12 date of publication by the Secretary of the final cer13 tification process referred to in paragraph (1), the 

14 Secretary shall allocate the limitation in subsection 

15 (d)(2) in equal amounts among— 

16 ‘‘(A) projects using bituminous coal as a 

17 primary feedstock, 

18 ‘‘(B) projects using subbituminous coal as 

19 a primary feedstock, and 

20 ‘‘(C) projects using lignite as a primary 

21 feedstock. 

22 ‘‘(3) REDISTRIBUTION.—The Secretary may re23 allocate credits if the Secretary determines that 

24 there is an insufficient quantity of qualifying appli25 cations for certification, pending at the time of reVerDate Sep 11 2014 20:10 Mar 06, 2015 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S601.IS S601

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1 view, to comply with the feedstock requirements of 

2 paragraph (2). The Secretary may conduct an addi3 tional program for applications for certification and 

4 reallocate available credits without regard to the 

5 feedstock requirement which was not satisfied as a 

6 result of insufficient applications for certification. 

7 ‘‘(4) REQUIREMENTS FOR APPLICATIONS FOR

8 CERTIFICATION.—An application for certification 

9 shall contain such information as the Secretary may 

10 require in order to make a determination to accept 

11 or reject the application and establish applicable 

12 credit entitlement. Any information contained in the 

13 application shall be protected as provided in section 

14 552(b)(4) of title 5, United States Code. 

15 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No credit shall 

16 be allowed under this section for any property for which 

17 credit is allowed under sections 48A, 48B, or 48C.’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) Section 46 of such Code (relating to amount 

20 of credit) is amended by striking ‘‘and’’ at the end 

21 of paragraph (5), by striking the period at the end 

22 of paragraph (6) and inserting ‘‘, and’’, and by add23 ing at the end the following new paragraph: 

24 ‘‘(7) the qualifying carbon dioxide capture, 

25 transport, and storage equipment credit.’’. 


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1 (2) Subparagraph (C) of section 49(a)(1) of 

2 such Code is amended by striking ‘‘and’’ at the end 

3 of clause (v), by striking the period at the end of 

4 clause (vi) and inserting ‘‘, and’’, and by adding 

5 after clause (vi) the following new clause: 

6 ‘‘(vii) the basis of any qualifying car7 bon dioxide capture, transport, and storage 

8 equipment under section 48E.’’. 

9 (3) The table of sections for subpart E of part 

10 IV of subchapter A of chapter 1 of such Code is 

11 amended by inserting after the item relating to sec12 tion 48D the following new item: 

‘‘Sec. 48E. Qualifying carbon dioxide capture, transport, and storage equipment credit.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to periods after the date of the 

15 enactment of this Act under rules similar to the rules of 

16 section 48(m) of the Internal Revenue Code of 1986 (as 

17 in effect on the day before the date of the enactment of 

18 the Revenue Reconciliation Act of 1990). 

19 SEC. 203. VARIABLE PRICE SUPPORT FOR CARBON DIOXIDE 

20 SEQUESTRATION. 

21 (a) DEFINITIONS.—In this section: 

22 (1) CARBON DIOXIDE PRICE DIFFERENCE.— 

23 The term ‘‘carbon dioxide price difference’’ means 


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1 the amount calculated in accordance with subsection 

2 (f)(1). 

3 (2) DESIGN CAPACITY.—The term ‘‘design ca4 pacity’’ means a project that has the capacity to 

5 capture— 

6 (A) not fewer than 3,000,000 tons of car7 bon dioxide annually; or 

8 (B) fewer than 3,000,000 tons of carbon 

9 dioxide annually if agreed to by the Secretary 

10 and project owner. 

11 (3) ELIGIBLE PROJECT.—The term ‘‘eligible 

12 project’’ means a project that— 

13 (A) captures and sells carbon dioxide that 

14 is used for enhanced recovery and generates 

15 electricity or gaseous or liquid fuels, or is a 

16 qualified polygeneration plant (as defined in 

17 section 48E(c) of the Internal Revenue Code of 

18 1986); 

19 (B) is located in the United States; 

20 (C) uses coal as not less than 75 percent 

21 of the project fuel source; 

22 (D) captures not less than 50 percent of 

23 carbon dioxide produced by coal conversion; 

24 (E) has reached design capacity; and 


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1 (F) has a contract with an enhanced recov2 ery company that is for a period that is equal 

3 to or greater than the subsidy period. 

4 (4) ENHANCED RECOVERY.—The term ‘‘en5 hanced recovery’’ means enhanced oil recovery and 

6 enhanced gas recovery. 

7 (5) LOWEST BID.—The term ‘‘lowest bid’’ 

8 means a bid made by an applicant to the program 

9 that has the least cost to the Federal Government, 

10 as compared to competing bids. 

11 (6) MARKET PRICE OF OIL.—The term ‘‘market 

12 price of oil’’ means the price of oil as reported in a 

13 public oil market index such as the New York Mer14 cantile Exchange. 

15 (7) PROGRAM.—The term ‘‘program’’ means 

16 the Enhanced Recovery Program established under 

17 subsection (b). 

18 (8) QUALIFYING CARBON DIOXIDE.—The term 

19 ‘‘qualifying carbon dioxide’’ means carbon dioxide 

20 that is captured from an eligible project and is eligi21 ble for variable price support. 

22 (9) RATE.—The term ‘‘rate’’ means the ratio 

23 bid by the project owner of the price of carbon diox24 ide to the market price of oil, and that is used to 

25 calculate the synthetic price of carbon dioxide. 


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1 (10) SECRETARY.—The term ‘‘Secretary’’ 

2 means the Secretary of Energy. 

3 (11) STRIKE PRICE OF CARBON DIOXIDE.—The 

4 term ‘‘strike price of carbon dioxide’’ means the 

5 price of carbon dioxide bid by the project owner— 

6 (A) below which a project will receive a 

7 subsidy; and 

8 (B) above which the project owner will 

9 make payments to the Federal Government. 

10 (12) SUBSIDY PERIOD.—The term ‘‘subsidy pe11 riod’’ means the period of time, not to exceed 10 

12 years, bid by the project owner during which the eli13 gible project will be eligible to receive a subsidy 

14 under this section. 

15 (13) SYNTHETIC PRICE OF CARBON DIOXIDE.— 

16 The term ‘‘synthetic price of carbon dioxide’’ means 

17 the price of carbon dioxide calculated by multiplying 

18 the market price of oil by the rate. 

19 (14) VARIABLE PRICE SUPPORT.—The term 

20 ‘‘variable price support’’ means financial support 

21 provided by the Federal Government in an amount 

22 equal to the carbon dioxide price difference for each 

23 ton of qualifying carbon dioxide provided directly to 

24 the owner of an eligible project selected to receive 

25 assistance under this section. 


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1 (b) ESTABLISHMENT; PURPOSE.— 

2 (1) IN GENERAL.—There is established in the 

3 Department of Energy a variable price support pro4 gram, to be known as the ‘‘Enhanced Recovery Pro5 gram’’, to accelerate the construction and operation 

6 of eligible advanced coal-fueled projects that capture 

7 carbon dioxide emissions and sell or use the carbon 

8 dioxide for enhanced recovery. 

9 (2) PURPOSE.—The purpose of the program 

10 shall be— 

11 (A) to reduce the cost of carbon capture by 

12 providing variable price support to carbon cap13 ture and sequestration project owners to enable 

14 the owner to finance eligible projects; 

15 (B) to advance the development and wide16 spread use of carbon capture technology; and 

17 (C) to increase the domestic production of 

18 oil and natural gas in the United States. 

19 (c) VARIABLE PRICE SUPPORT.— 

20 (1) IN GENERAL.—In carrying out the program, 

21 the Secretary, in consultation with the Secretary of 

22 the Treasury, is authorized to provide variable price 

23 support for eligible projects— 

24 (A) for which an application is submitted 

25 to the Secretary under subsection (d); 


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1 (B) that are selected under the competitive 

2 bidding process under subsection (e); and 

3 (C) for which a variable price support 

4 agreement to implement the payment terms de5 scribed in subsections (f) and (g) is executed. 

6 (2) PERIOD.—The Secretary shall provide vari7 able price support to an eligible project under this 

8 section for a period of not more than 10 years begin9 ning on the date on which the eligible project 

10 reaches design capacity. 

11 (3) PROFIT SHARING AGREEMENTS.— 

12 (A) IN GENERAL.—To be eligible to receive 

13 variable price support under paragraph (1), a 

14 project owner shall enter into a profit-sharing 

15 agreement with the Secretary at the time that 

16 the variable price support agreement is exe17 cuted. 

18 (B) PAYMENTS.—Once every calendar 

19 quarter, for each project owner subject to a 

20 profit-sharing agreement executed under sub21 paragraph (A), the Secretary shall calculate 

22 whether the synthetic price of carbon dioxide is 

23 greater than the strike price of carbon dioxide, 

24 and, if so, request from the project owner a 


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1 profit-sharing payment for that quarter, in an 

2 amount equal to— 

3 (i) the difference between the syn4 thetic price of carbon dioxide and the 

5 strike price of carbon dioxide; less 

6 (ii) any repayments made under sub7 section (g) during that calendar quarter. 

8 (d) APPLICATIONS.—An owner of an eligible project 

9 desiring variable price support under this section shall 

10 submit to the Secretary an application at such time, in 

11 such manner, and containing such information as the Sec12 retary may require. 

13 (e) SELECTION; COMPETITIVE BIDDING PROCESS.— 

14 (1) IN GENERAL.—Once every year, the Sec15 retary shall solicit bids from applicants for an alloca16 tion of the funding made available under subsection 

17 (h) to provide variable price support to eligible 

18 projects. 

19 (2) BID SUBMISSION.—Applicants participating 

20 in the competitive bidding process shall submit a bid 

21 for an eligible project that includes— 

22 (A) the strike price of carbon dioxide for a 

23 ton of qualifying carbon dioxide; 

24 (B) a rate; 


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1 (C) a plan for the project for a period of 

2 not more than 10 years; and 

3 (D) the projected tonnage of qualifying 

4 carbon dioxide that the eligible project will cap5 ture and sell for enhanced recovery over the 

6 project period. 

7 (3) SELECTION.—For each fiscal year, the Sec8 retary shall— 

9 (A) determine the cost to the Federal Gov10 ernment of each bid submitted under paragraph 

11 (2); and 

12 (B)(i) select 1 or more of the lowest bids 

13 until all of the available funding authorized by 

14 subsection (h) is obligated; or 

15 (ii) if the Secretary determines that no 

16 bids submitted under paragraph (2) are accept17 able to the Secretary, reject the bids. 

18 (f) ADMINISTRATION.— 

19 (1) IN GENERAL.—In carrying out a variable 

20 price support agreement entered into under sub21 section (c), the Secretary shall calculate the carbon 

22 dioxide price difference as a dollar amount equal 

23 to— 

24 (A) the strike price of carbon dioxide; less 


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1 (B) the synthetic price of carbon dioxide in 

2 a qualifying ton. 

3 (2) PAYMENTS.—Payments between the Sec4 retary and the project owner shall be made as fol5 lows: 

6 (A) If the amount calculated in paragraph 

7 (1) is a positive number, the Secretary shall pay 

8 to the project owner an amount equal to the 

9 product obtained by multiplying— 

10 (i) the carbon dioxide price difference 

11 calculated under paragraph (1); and 

12 (ii) the quantity in tons of qualifying 

13 carbon dioxide sold for enhanced recovery. 

14 (B) If the amount calculated in paragraph 

15 (1) is a negative number, the project owner 

16 shall pay to the Secretary an amount equal to 

17 the product obtained by multiplying— 

18 (i) the absolute value of the carbon di19 oxide price difference calculated under 

20 paragraph (1); and 

21 (ii) the quantity in tons of qualifying 

22 carbon dioxide sold for enhanced recovery. 

23 (C) Payments between the Secretary and 

24 the project owner made under subparagraphs 


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1 (A) and (B) shall be reconciled on an annual 

2 basis based on— 

3 (i) daily carbon dioxide sales records 

4 reported by the project owner; and 

5 (ii) the daily price of West Texas in6 termediate crude oil listed in the New York 

7 Mercantile Exchange. 

8 (g) PAYMENTS TO THE FEDERAL GOVERNMENT.— 

9 (1) IN GENERAL.—The Secretary shall establish 

10 terms and conditions for a variable price support 

11 agreement entered into under subsection (c)(1)(C). 

12 (2) REPAYMENTS.—The repayment terms of 

13 any variable price support agreement shall com14 mence if, during the subsidy period of the agree15 ment, and subject to the limitations described in 

16 paragraph (3), the amount calculated under sub17 section (f)(1) is a positive number. 

18 (3) LIMITATIONS.— 

19 (A) IN GENERAL.—The repayment terms 

20 described in paragraph (2) shall be subject to 

21 the following limitations: 

22 (i) If, during any calendar quarter 

23 during the subsidy period of the variable 

24 price support agreement, the synthetic 

25 price of carbon dioxide is less than the 


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1 strike price of carbon dioxide, the project 

2 owner may elect to defer all or part of the 

3 repayment obligations of the project owner 

4 due in that quarter and any unpaid obliga5 tions will continue to accrue interest. 

6 (ii) If, during any calendar quarter 

7 during the subsidy period of the variable 

8 price support agreement, the synthetic 

9 price of carbon dioxide is greater than the 

10 strike price of carbon dioxide, the project 

11 owner— 

12 (I) shall meet the scheduled re13 payment obligations plus any deferred 

14 repayment obligations; but 

15 (II) shall not be required to pay 

16 in that quarter an amount that is 

17 greater than the amount equal to the 

18 product obtained by multiplying— 

19 (aa) the excess of the syn20 thetic price of carbon dioxide 

21 over the strike price of carbon di22 oxide; and 

23 (bb) the output of the 

24 project. 


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1 (B) REPAYMENTS BEYOND SUBSIDY

2 TERM.—At the end of the subsidy period of the 

3 agreement, the cumulative amount of any de4 ferred repayment obligations, together with ac5 crued interest, shall be amortized (with inter6 est) over the remainder of the full term of the 

7 agreement. 

8 (h) FUNDING.— 

9 (1) IN GENERAL.—Prior to selecting bids under 

10 subsection (e)(3) for a fiscal year, the Secretary 

11 shall make available to carry out the program the 

12 following amounts, to be allocated from unobligated 

13 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. 

14 (2) EXTENSION.—If the amounts made avail15 able under paragraph (1) for a fiscal year are not 

16 used during the applicable fiscal year— 

17 (A) the program shall be extended for an 

18 additional fiscal year; and 

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1 cable fiscal year shall be carried over to carry 

2 out the program during the additional fiscal 

3 year. 

4 SEC. 204. CLEAN ENERGY COAL BONDS. 

5 (a) IN GENERAL.— 

6 (1) TREATMENT AS TAX CREDIT BONDS.—Sub7 part I of part IV of subchapter A of chapter 1 of 

8 the Internal Revenue Code of 1986 is amended by 

9 adding at the end the following new section: 

10 ‘‘SEC. 54G. CLEAN ENERGY COAL BONDS. 

11 ‘‘(a) CLEAN ENERGY COAL BOND.—For purposes of 

12 this subchapter— 

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

14 coal bond’ means any bond issued as part of an 

15 issue if— 

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

17 issuer pursuant to an allocation by the Sec18 retary to such issuer of a portion of the na19 tional clean energy coal bond limitation under 

20 subsection (b)(2), 

21 ‘‘(B) so much of the available project pro22 ceeds from the sale of such issue as is equal to 

23 95 percent of the excess of— 

24 ‘‘(i) the total available project pro25 ceeds from the sale of such issue, over 


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1 ‘‘(ii) the amounts in a reasonably re2 quired reserve (within the meaning of sec3 tion 150(a)(3)) with respect to such issue, 

4 are to be used for capital expenditures incurred 

5 by qualified borrowers for 1 or more qualified 

6 projects, 

7 ‘‘(C) the qualified issuer makes an irrev8 ocable election to have this section apply, 

9 ‘‘(D) the qualified issuer designates such 

10 bond for purposes of this section and the bond 

11 is in registered form, and 

12 ‘‘(E) in lieu of the requirements of section 

13 54A(d)(2), the issue meets the requirements of 

14 subsection (c). 

15 ‘‘(2) QUALIFIED PROJECT; SPECIAL USE

16 RULES.— 

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

18 project’ means a qualified clean coal project (as 

19 defined in subsection (h)(1)) placed in service 

20 by a qualified borrower. 

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

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

23 refinanced with proceeds of a clean energy coal 

24 bond only if the indebtedness being refinanced 

25 (including any obligation directly or indirectly 


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1 refinanced by such indebtedness) was originally 

2 incurred by a qualified borrower after the date 

3 of the enactment of this section. 

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

5 paragraph (1)(B), a clean energy coal bond 

6 may be issued to reimburse a qualified borrower 

7 for amounts paid after the date of the enact8 ment of this section with respect to a qualified 

9 project, but only if— 

10 ‘‘(i) prior to the payment of the origi11 nal expenditure, the qualified borrower de12 clared its intent to reimburse such expendi13 ture with the proceeds of a clean energy 

14 coal bond, 

15 ‘‘(ii) not later than 60 days after pay16 ment of the original expenditure, the quali17 fied issuer adopts an official intent to re18 imburse the original expenditure with such 

19 proceeds, and 

20 ‘‘(iii) reimbursement is not made later 

21 than 18 months after the date the original 

22 expenditure is paid or the date the project 

23 is placed in service or abandoned, but in 

24 no event more than 3 years after the origi25 nal expenditure is paid. 


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

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

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

4 qualified project to the extent that a qualified 

5 borrower takes any action within its control 

6 which causes such proceeds not to be used for 

7 a qualified project. The Secretary shall pre8 scribe regulations specifying remedial actions 

9 that may be taken (including conditions to tak10 ing such remedial actions) to prevent an action 

11 described in the preceding sentence from caus12 ing a bond to fail to be a clean energy coal 

13 bond. 

14 ‘‘(b) LIMITATION ON AMOUNT OF BONDS DES15 IGNATED.— 

16 ‘‘(1) NATIONAL LIMITATION.—There is a na17 tional clean energy coal bond limitation of 

18 $5,000,000,000. 

19 ‘‘(2) ALLOCATION BY SECRETARY.—The Sec20 retary shall allocate the amount described in para21 graph (1) among qualified projects in such manner 

22 as the Secretary determines appropriate. 

23 ‘‘(c) SPECIAL RULES RELATING TO EXPENDI24 TURES.— 


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

2 meeting the requirements of this subsection if, as of 

3 the date of issuance, the qualified issuer reasonably 

4 expects— 

5 ‘‘(A) 100 percent or more of the available 

6 project proceeds from the sale of the issue are 

7 to be spent for 1 or more qualified projects 

8 within the 5-year period beginning on the date 

9 of issuance of the clean energy bond, 

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

11 party to spend at least 10 percent of such avail12 able project proceeds from the sale of the issue 

13 will be incurred within the 6-month period be14 ginning on the date of issuance of the clean en15 ergy bond or, in the case of a clean energy bond 

16 the available project proceeds of which are to be 

17 loaned to 2 or more qualified borrowers, such 

18 binding commitment will be incurred within the 

19 6-month period beginning on the date of the 

20 loan of such proceeds to a qualified borrower, 

21 and 

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

23 due diligence and the available project proceeds 

24 from the sale of the issue will be spent with due 

25 diligence. 


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

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

4 extend such period if the qualified issuer establishes 

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

6 due to reasonable cause and the related projects will 

7 continue to proceed with due diligence. 

8 ‘‘(3) FAILURE TO SPEND REQUIRED AMOUNT

9 OF BOND PROCEEDS WITHIN 5 YEARS.—To the ex10 tent that less than 100 percent of the available 

11 project proceeds of such issue are expended by the 

12 close of the 5-year period beginning on the date of 

13 issuance (or if an extension has been obtained under 

14 paragraph (2), by the close of the extended period), 

15 the qualified issuer shall redeem all of the non16 qualified bonds within 90 days after the end of such 

17 period. For purposes of this paragraph, the amount 

18 of the nonqualified bonds required to be redeemed 

19 shall be determined in the same manner as under 

20 section 142. 

21 ‘‘(d) REDUCED CREDIT AMOUNT.—The annual credit 

22 determined under section 54A(b) with respect to any clean 

23 coal energy bond shall be 70 percent of the amount so 

24 determined without regard to this subsection. 


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1 ‘‘(e) COOPERATIVE ELECTRIC COMPANY; QUALIFIED

2 ENERGY TAX CREDIT BOND LENDER; GOVERNMENTAL

3 BODY; QUALIFIED BORROWER.—For purposes of this sec4 tion: 

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

6 term ‘cooperative electric company’ means a mutual 

7 or cooperative electric company described in section 

8 501(c)(12) or section 1381(a)(2)(C), or a not-for9 profit electric utility which has received a loan or 

10 loan guarantee under the Rural Electrification Act. 

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

12 term ‘clean energy bond lender’ means a lender 

13 which is a cooperative which is owned by, or has out14 standing loans to, 100 or more cooperative electric 

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

16 and shall include any affiliated entity which is con17 trolled by such lender. 

18 ‘‘(3) PUBLIC POWER ENTITY.—The term ‘public 

19 power entity’ means a State utility with a service ob20 ligation, as such terms are defined in section 217 of 

21 the Federal Power Act (as in effect on the date of 

22 enactment of this paragraph). 

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

24 issuer’ means— 

25 ‘‘(A) a clean energy bond lender, 


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1 ‘‘(B) a cooperative electric company, or 

2 ‘‘(C) a public power entity. 

3 ‘‘(5) QUALIFIED BORROWER.—The term ‘quali4 fied borrower’ means— 

5 ‘‘(A) a mutual or cooperative electric com6 pany described in section 501(c)(12) or 

7 1381(a)(2)(C), or 

8 ‘‘(B) a public power entity. 

9 ‘‘(f) SPECIAL RULES RELATING TO POOL BONDS.— 

10 No portion of a pooled financing bond may be allocable 

11 to any loan unless the borrower has entered into a written 

12 loan commitment for such portion prior to the issue date 

13 of such issue. 

14 ‘‘(g) GROSS-UP OF PAYMENT TO ISSUERS IN CASE

15 OF SEQUESTRATION.—In the case of any payment due 

16 under section 6431(b) by reason of section 

17 6431(f)(3)(A)(v) which is subject to reduction in accord18 ance with a sequestration report prepared by the Director 

19 of the Office of Management and Budget pursuant to the 

20 Balanced Budget and Emergency Deficit Control Act of 

21 1985 or the Statutory Pay-As-You-Go Act of 2010— 

22 ‘‘(1) the amount of such payment shall be in23 creased to an amount equal to the product of— 


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1 ‘‘(A) the amount of such payment as deter2 mined before the reduction in accordance with 

3 the sequestration report, and 

4 ‘‘(B) a fraction the numerator of which is 

5 1 and the denominator of which is the excess 

6 of— 

7 ‘‘(i) 100, over 

8 ‘‘(ii) the percentage by which such 

9 payment is reduced (without regard to this 

10 subsection) in accordance with the seques11 tration report, and 

12 ‘‘(2) such increase shall be treated as not sub13 ject to the sequestration report. 

14 ‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 

15 For purposes of this section: 

16 ‘‘(1) QUALIFIED CLEAN COAL PROJECT.—The 

17 term ‘qualified clean coal project’ means— 

18 ‘‘(A) an atmospheric pollution control facil19 ity (within the meaning of section 169(d)(1)), 

20 ‘‘(B) a qualifying clean coal project (within 

21 the meaning of section 48E(c)(1)), 

22 ‘‘(C) a qualified facility (within the mean23 ing of section 45Q(c)), or 

24 ‘‘(D) an integrated gasification combined 

25 cycle unit, supercritical coal-fired power plant, 


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1 or ultrasupercritical coal-fired power plant, with 

2 an energy efficiency percentage (as defined in 

3 section 48(c)(3)(C)(i)) that is not less than 5 

4 percentage points greater than the average en5 ergy efficiency percentage for coal electrical 

6 production facilities in the United States and 

7 corrected for the impact of carbon capture (as 

8 determined by the Secretary of Energy). 

9 ‘‘(2) DEFINITIONS.— 

10 ‘‘(A) INTEGRATED GASIFICATION COM11 BINED CYCLE UNIT.—The term ‘integrated gas12 ification combined cycle unit’ means an electric 

13 generation unit that produces electricity by con14 verting coal to synthesis gas that is used to fuel 

15 a combined-cycle plant that produces electricity 

16 from both a combustion turbine (including a 

17 combustion turbine/fuel cell hybrid) and a 

18 steam turbine. 

19 ‘‘(B) POOLED FINANCING BOND.—The 

20 term ‘pooled financing bond’ shall have the 

21 meaning given such term by section 

22 149(f)(6)(A). 

23 ‘‘(C) SUPERCRITICAL COAL-FIRED POWER

24 PLANT.—The term ‘supercritical coal-fired 

25 power plant’ means a coal-fired power plant opVerDate Sep 11 2014 20:10 Mar 06, 2015 Jkt 049200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S601.IS S601

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1 erating at pressures such that water boils first 

2 and then is converted to superheated steam. 

3 ‘‘(D) ULTRASUPERCRITICAL COAL-FIRED

4 POWER PLANT.—The term ‘ultrasupercritical 

5 coal-fired power plant’ means a power plant de6 scribed in subparagraph (C) operating above 

7 supercritical pressure and at steam tempera8 tures above 1,100 degrees Fahrenheit.’’. 

9 (2) BONDS NOT SUBJECT TO MATURITY LIMITA10 TION.—Paragraph (5) of section 54A(d) of such 

11 Code is amended by adding at the end the following 

12 new subparagraph: 

13 ‘‘(C) SPECIAL RULE FOR CLEAN ENERGY

14 COAL BONDS.—The requirements of this para15 graph shall not apply to a clean energy coal 

16 bond under section 54G.’’. 

17 (3) CONFORMING AMENDMENTS.— 

18 (A) Paragraph (1) of section 54A(d) of the 

19 Internal Revenue Code of 1986 is amended by 

20 striking ‘‘or’’ at the end of subparagraph (D), 

21 by inserting ‘‘or’’ at the end of subparagraph 

22 (E), and by inserting after subparagraph (E) 

23 the following new subparagraph: 

24 ‘‘(F) a clean energy coal bond,’’. 


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1 (B) The table of sections for subpart I of 

2 part IV of subchapter A of chapter 1 of the In3 ternal Revenue Code of 1986 is amended by 

4 adding at the end the following new item: 

‘‘Sec. 54G. Clean energy coal bonds.’’. 

5 (b) BONDS TREATED AS SPECIFIED TAX CREDIT

6 BONDS.— 

7 (1) IN GENERAL.—Section 6431(f)(3)(A) of the 

8 Internal Revenue Code of 1986 is amended by strik9 ing ‘‘or’’ at the end of clause (iii), by striking ‘‘and’’ 

10 at the end of clause (iv) and inserting ‘‘or’’, and by 

11 adding at the end the following new clause: 

12 ‘‘(v) a clean energy coal bond (as de13 fined in section 54G), and’’. 

14 (2) SPECIAL RULE.—Paragraph (2) of section 

15 6431(f) of such Code is amended— 

16 (A) by striking ‘‘clause (i) or (ii)’’ and in17 serting ‘‘clause (i), (ii), or (v)’’; and 

18 (B) by striking the heading and inserting 

19 ‘‘SPECIAL RULE FOR CERTAIN BONDS’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to bonds issued after the date of 

22 the enactment of this Act. 

23 TITLE III—REPORTS REQUIRED 

24 SEC. 301. DEFINITIONS. 

25 In this title: 


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1 (1) CCS.—the term ‘‘CCS’’ means carbon cap2 ture and storage, including geological storage and 

3 enhanced oil recovery, as well as other forms of car4 bon utilization. 

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

6 the Secretary of Energy. 

7 SEC. 302. REPORTS TO CONGRESS. 

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

9 date of enactment of this Act, and annually thereafter, 

10 the Secretary shall submit to Congress and make available 

11 to the public (including on the website of the Department 

12 of Energy) a report that— 

13 (1) provides a comprehensive review of the an14 nual progress made by the National Laboratories 

15 and the offices of the Department of Energy that 

16 are currently active in researching and developing 

17 clean coal technologies and CCS, including— 

18 (A) the status of carbon capture, trans19 port, storage, and utilization, including— 

20 (i) an overview and evaluation of key 

21 technologies; 

22 (ii) a description of existing CCS in23 frastructure and demonstration projects in 

24 the United States, including the status of 

25 permitting, financing, and construction 


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1 and the expected date of commencement of 

2 operations; 

3 (iii) the associated costs of key tech4 nologies, including the amount and type of 

5 Federal funding; and 

6 (iv) an estimated timeline to commer7 cial scalability; 

8 (B) a description of the current barriers 

9 for CCS deployment and commercialization, in10 cluding— 

11 (i) market failures; 

12 (ii) regulatory framework; 

13 (iii) long-term liability for carbon stor14 age; 

15 (iv) public outreach; and 

16 (v) annual progress on overcoming the 

17 identified barriers; 

18 (C) possible solutions to address the bar19 riers described in subparagraph (B), includ20 ing— 

21 (i) funding options for CCS projects; 

22 (ii) options to improve the current 

23 legal and regulatory framework; and 


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1 (iii) suggestions for Federal Govern2 ment action on effective public outreach; 

3 and 

4 (D) a separate review that focuses on 

5 international research and projects sponsored 

6 by the Department of Energy, including— 

7 (i) a clear description of how the Fed8 eral Government has participated in each 

9 project, including the amount and type of 

10 Federal funding; 

11 (ii) the technical and economic status 

12 of each project, including the expected date 

13 of commencement of operations; and 

14 (iii) recommendations on— 

15 (I) how to most efficiently engage 

16 in each project in the future; and 

17 (II) whether a change of funding 

18 support could assist in those efforts; 

19 and 

20 (2) addresses all of the international consortia 

21 that the Federal Government is currently engaged in 

22 by— 

23 (A) detailing the type of Federal Govern24 ment activity in each consortium; 


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1 (B) including a description of any ‘‘lessons 

2 learned’’ by participants from the Federal Gov3 ernment as a direct result of consortium activ4 ity; 

5 (C) describing the benefits derived from 

6 Federal Government involvement; and 

7 (D) making recommendations for the in8 volvement of the Federal Government in each 

9 consortium including— 

10 (i) whether the Federal Government 

11 should continue to participate; and 

12 (ii) how the Federal Government 

13 could increase the productivity of the con14 sortium, if possible. 

15 (b) ADDITIONAL REPORT.—Not later than 18 

16 months after the date of enactment of this Act, and not 

17 less frequently than once every year for the next 5 years 

18 thereafter, the Secretary shall submit to Congress and 

19 make available to the public (including on the website of 

20 the Department of Energy) a report that— 

21 (1) provides an assessment of the upcoming 

22 CCS projects in Canada, including— 

23 (A) the SaskPower Boundary Dam Inte24 grated CCS Demonstration Project; 

25 (B) the Shell Quest Project; and 


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1 (C) the Alberta Carbon Trunk Line; and 

2 (2) determines— 

3 (A) whether operation of the CCS system 

4 is meeting the project goals; 

5 (B) the economic status of the project, in6 cluding— 

7 (i) an overview of the ratio of private 

8 and public funds for capital costs; 

9 (ii) whether the project is generating 

10 revenue; and 

11 (iii) the current return on investment; 

12 (C) whether the project is the type of 

13 project that the Federal Government should 

14 replicate in the United States to move CCS for15 ward on a pilot level; 

16 (D) whether the project could comply with 

17 subparagraphs (E) or (F) if the project should 

18 be replicated under subparagraph (C); 

19 (E) whether the Federal Government and 

20 private industry in the United States can work 

21 together to develop a similar pilot project in the 

22 United States; and 

23 (F) if the Federal Government and private 

24 industry cannot work together under subpara25 graph (E), whether the Federal Government 


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1 should work jointly with Canada on a similar 

2 project. 

Æ 


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