182
in connection with the construction or recon-
struction of a structure, such expenditure shall 
be treated as made when the original use of the 
constructed or reconstructed structure by the 
taxpayer begins. 
‘‘(C) AMOUNT.—The amount of any ex-
penditure shall be the cost thereof. 
‘‘(7) REDUCTION OF CREDIT FOR GRANTS, TAX-
EXEMPT BONDS, AND SUBSIDIZED ENERGY FINANC-
ING.—The rules of section 29(b)(3) shall apply for 
purposes of this section. 
‘‘(e) BASIS ADJUSTMENTS.—For purposes of this 
subtitle, if a credit is allowed under this section for any 
expenditure with respect to any property, the increase in 
the basis of such property which would (but for this sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(f) TERMINATION.—The credit allowed under this 
section shall not apply to taxable years beginning after 
December 31, 2009.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (34), by striking the 
period at the end of paragraph (35) and inserting ‘‘; 
and’’, and by adding at the end the following:
183
‘‘(36) to the extent provided in section 25C(e), 
in the case of amounts with respect to which a credit 
has been allowed under section 25C.’’. 
(2) The table of sections for subpart A of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 25B the fol-
lowing:
‘‘Sec. 25C. Residential solar, wind, and fuel cell energy property.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures made after the 
date of the enactment of this Act, in taxable years ending 
after such date. 
SEC. 328. CREDIT FOR ENERGY MANAGEMENT SYSTEMS 
USING RESIDENTIAL REAL TIME METERING 
SYSTEMS. 
(a) CREDIT FOR ENERGY MANAGEMENT SYSTEMS.—
(1) IN GENERAL.—Subpart B of part IV of 
subchapter A of chapter 1 (relating to foreign tax 
credits, etc.) is amended by inserting after section 
30C the following new section: 
‘‘SEC. 30D. CREDIT FOR ENERGY MANAGEMENT SYSTEMS. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year—
184
‘‘(1) an amount equal to $20 for each qualified 
energy management device originally placed in serv-
ice during the taxable year, and 
‘‘(2) for each qualified retrofitted meter origi-
nally placed in service during the taxable year, an 
amount equal to the lesser of—
‘‘(A) $20, or 
‘‘(B) the adjusted basis of such meter. 
‘‘(b) DEFINITIONS.—
‘‘(1) QUALIFIED
ENERGY
MANAGEMENT
DE-
VICE.—For purposes of this section, the term ‘quali-
fied energy management device’ means any meter or 
metering device acquired and used by an electric en-
ergy or natural gas supplier or service provider to 
enable consumers or others to manage their pur-
chase, sale, or use of electricity or natural gas in re-
sponse to energy price and usage signals. 
‘‘(2) QUALIFIED
RETROFITTED
METER.—For 
purposes of this section, the term ‘qualified retro-
fitted meter’ means an electric energy or natural gas 
meter or metering device that has been modified by 
the addition of equipment designed to enable users 
to manage the purchase, sale, or use of electricity 
and natural gas in response to energy price and 
usage signals.
185
‘‘(3) PLACED
IN
SERVICE.—For purposes of 
this section, the term ‘placed in service’ means inter-
connected with other devices in a manner that per-
mits reading of energy price and usage signals on at 
least a daily basis. 
‘‘(4) COST OF METERS INCLUDES COST OF IN-
STALLATION.—The cost of any qualified energy 
management device or qualified retrofitted meter re-
ferred to in paragraph (1) or (2) shall include the 
cost of the original installation of such property. 
‘‘(c) SPECIAL RULES.—
‘‘(1) BASIS
REDUCTION.—The basis of any 
property for which a credit is allowed under sub-
section (a) shall be reduced by the amount of such 
credit. 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property that ceases to be property eligible for 
such credit. 
‘‘(3) PROPERTY USED OUTSIDE THE UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowed under subsection (a) with respect to any 
property referred to in section 50(b)(1) or with re-
186
spect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(4) ELECTION
TO
NOT
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
energy management device if the taxpayer elects to 
not have this section apply to such device. 
‘‘(5) CREDITS FOR CERTAIN TAX EXEMPT OR-
GANIZATIONS AND GOVERNMENTAL UNITS.—
‘‘(A) ALLOWANCE OF CREDIT.—Any credit 
which would be allowable under subsection (a) 
with respect to a qualified energy management 
device or a qualified retrofitted meter placed in 
service by an entity if such entity were not ex-
empt from tax under this chapter shall be treat-
ed as a credit allowable under subpart B to 
such entity if such entity is—
‘‘(i) an organization described in sec-
tion 501(c)(12)(C) and exempt from tax 
under section 501(a), 
‘‘(ii) an organization described in sec-
tion 1381(a)(2)(C), 
‘‘(iii) an entity the income of which is 
excludable from gross income under section 
115, or
187
‘‘(iv) a State, the District of Colum-
bia, any territory or possession of the 
United States, or any political subdivision 
thereof. 
‘‘(B) USE OF CREDIT.—
‘‘(i) TRANSFER OF CREDIT.—An enti-
ty described in subparagraph (A) may as-
sign, trade, sell, or otherwise transfer any 
credit allowable to such entity under sub-
paragraph (A) to any taxpayer. 
‘‘(ii) USE
OF
CREDIT
AS
AN
OFF-
SET.—Notwithstanding any other provision 
of law, in the case of an entity described 
in clause (i) or (ii) of subparagraph (A), 
any credit allowable to such entity under 
subparagraph (A) may be applied by such 
entity, without penalty, as a prepayment of 
any loan, debt, or other obligation the enti-
ty has incurred under subchapter I of 
chapter 31 of title 7 of the Rural Elec-
trification Act of 1936 (7 U.S.C. 901 et 
seq.). 
‘‘(C) CREDIT
NOT
INCOME.—Neither a 
transfer under clause (i) nor a use under clause 
(ii) of subparagraph (B) of any credit allowable
188
under subparagraph (A) shall result in income 
for purposes of section 501(c)(12). 
‘‘(D) TRANSFER PROCEEDS TREATED AS 
ARISING FROM ESSENTIAL GOVERNMENT FUNC-
TION.—Any proceeds derived by an entity de-
scribed in subparagraph (A)(iii) from the trans-
fer of any credit under subparagraph (B)(i) 
shall be treated as arising from an essential 
government function. 
‘‘(d) TERMINATION.—This section shall not apply to 
any property placed in service after December 31, 2012.’’. 
(2) INCLUSION
OF
INDIAN
TRIBAL
GOVERN-
MENTS.—Section 7871(a)(7) is amended by striking 
‘‘and’’ at the end of subparagraph (B), by striking 
the period at the end of subparagraph (C), and by 
adding at the end the following: 
‘‘(D) section 30D (relating to credit for en-
ergy management systems).’’. 
(3) CONFORMING AMENDMENTS.—
(A) The table of contents for subpart B of 
part IV of subchapter A of chapter 1 is amend-
ed by inserting after the item relating to section 
30C the following new item:
‘‘Sec. 30D. Credit for energy management systems.’’.
(B) Section 1016(a) is amended by strik-
ing ‘‘and’’ at the end of paragraph (35), by
189
striking the period at the end of paragraph (36) 
and inserting ‘‘, and’’, and by adding at the end 
the following new paragraph: 
‘‘(37) to the extent provided in section 
30D(c)(1).’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to qualified energy 
management devices placed in service after the date 
of the enactment of this Act and to qualified retro-
fitted meters that are placed in service on or after, 
or that are in use as of, January 1, 2006. 
(b) 5–Year Applicable Recovery Period for Deprecia-
tion of Qualified Energy Management Devices.—
(1) IN GENERAL.—Subparagraph (B) of section 
168(e)(3) (relating to classification of property) 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 at the end the fol-
lowing new clause: 
‘‘(vii) any qualified energy manage-
ment device.’’. 
(2) DEFINITION OF QUALIFIED ENERGY MAN-
AGEMENT DEVICE.—Section 168(i) (relating to defi-
nitions and special rules) is amended by inserting at 
the end the following new paragraph:
190
‘‘(17) QUALIFIED
ENERGY
MANAGEMENT
DE-
VICE.—The term ‘qualified energy management de-
vice’ means a meter or metering device that is ac-
quired and used by an electric energy or natural gas 
supplier or service provider to enable consumers and 
others to manage their purchase, sale, and use of 
electricity or natural gas in response to energy price 
and usage signals that are readable on at least a 
daily basis. For purposes of the preceding sentence, 
the cost of any qualified energy management device 
shall (at the election of the taxpayer) include the 
cost of the original installation of such property.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to property placed in 
service after December 31, 2005, and before Janu-
ary 1, 2012. 
SEC. 329. CREDIT FOR FLYWHEEL PROPERTY. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to foreign tax credits, 
etc.) is amended by inserting after section 30D the fol-
lowing new section: 
‘‘SEC. 30E. CREDIT FOR FLYWHEEL PROPERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 10 percent of the
191
cost of any qualified flywheel property placed in service 
by the taxpayer during the taxable year. 
‘‘(b) LIMITATION.—The credit allowed under sub-
section (a) shall not exceed $2,000 for a taxable year. 
‘‘(c) QUALIFIED FLYWHEEL PROPERTY.—For pur-
poses of this section, the term ‘qualified flywheel property’ 
means a flywheel designed exclusively to store energy that 
is used to generate electricity. 
‘‘(d) SPECIAL RULES.—
‘‘(1) BASIS
REDUCTION.—The basis of any 
property for which a credit is allowable under sub-
section (a) shall be reduced by the amount of such 
credit. 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property that ceases to be property eligible for 
such credit. 
‘‘(3) PROPERTY USED OUTSIDE THE UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowed under subsection (a) with respect to any 
property referred to in section 50(b)(1) or with re-
spect to the portion of the cost of any property 
taken into account under section 179.
192
‘‘(4) ELECTION
TO
NOT
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
qualified flywheel property if the taxpayer elects to 
not have this section apply to such property. 
‘‘(d) TERMINATION.—This section shall not apply to 
any property placed in service after December 31, 2009.’’. 
(b) CONFORMING AMENDMENTS.—
(1) The table of contents for subpart B of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 30D the 
following new item:
‘‘Sec. 30E. Credit for qualified flywheel property.’’.
(2) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (36), by striking the 
period at the end of paragraph (37) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(38) to the extent provided in section 
30E(c)(1).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service in 
taxable years ending after the date of the enactment of 
this Act. 
SEC. 330. CREDITS FOR CLEAN COAL. 
(a) ALLOWANCE
OF
QUALIFYING
CLEAN
COAL 
TECHNOLOGY UNIT CREDIT.—
193
(1) IN
GENERAL.—Section 46 (relating to 
amount of credit), as amended by this Act, is 
amended by striking ‘‘and’’ at the end of paragraph 
(2), by striking the period at the end of paragraph 
(3) and inserting ‘‘, and’’, and by adding at the end 
the following: 
‘‘(4) the qualifying clean coal technology unit 
credit.’’. 
(2) AMOUNT
OF
QUALIFYING
CLEAN
COAL 
TECHNOLOGY UNIT CREDIT.—Subpart E of part IV 
of subchapter A of chapter 1 (relating to rules for 
computing investment credit) is amended by insert-
ing after section 48A the following: 
‘‘SEC. 48B. QUALIFYING CLEAN COAL TECHNOLOGY UNIT 
CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
qualifying clean coal technology unit credit for any taxable 
year is an amount equal to 10 percent of the qualified 
investment in a qualifying system of continuous emission 
control for such taxable year. 
‘‘(b) QUALIFYING SYSTEM OF CONTINUOUS EMIS-
SION CONTROL.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the term ‘qualifying system of continuous emis-
194
sion control’ means a system of the taxpayer 
which—
‘‘(A) serves, is added to, or retrofits an ex-
isting coal-based electricity generation unit, the 
construction, installation, or retrofitting of 
which is completed by the taxpayer (but only 
with respect to that portion of the basis which 
is properly attributable to such construction, in-
stallation, or retrofitting), 
‘‘(B) removes or reduces—
‘‘(i) 90 percent or more of carbon di-
oxide emissions, or 
‘‘(ii) any pollutant subject to the re-
quirements of section 109 of the Clean Air 
Act or any hazardous pollutant listed 
under section 112(b) of such Act, to a 
greater extent than is required under such 
Act, 
‘‘(C) is depreciable under section 167, 
‘‘(D) has a useful life of not less than 4 
years, and 
‘‘(E) is located in the United States. 
‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.—
For purposes of subparagraph (A) of paragraph (1), 
in the case of a unit which—
195
‘‘(A) is originally placed in service by a 
person, and 
‘‘(B) is sold and leased back by such per-
son, or is leased to such person, within 3 
months after the date such unit was originally 
placed in service, for a period of not less than 
12 years, such unit shall be treated as originally 
placed in service not earlier than the date on 
which such property is used under the leaseback 
(or lease) referred to in subparagraph (B). The 
preceding sentence shall not apply to any prop-
erty if the lessee and lessor of such property 
make an election under this sentence. Such an 
election, once made, may be revoked only with 
the consent of the Secretary. 
‘‘(c) EXISTING COAL-BASED ELECTRICITY GENERA-
TION UNIT.—For purposes of subsection (a), the term ‘ex-
isting coal-based electricity generating unit’ means, with 
respect to any taxable year, a steam generator-turbine 
unit which uses coal to produce 75 percent or more of 
its output as electricity and was in operation before the 
effective date of this section. 
‘‘(d) LIMIT ON QUALIFYING CLEAN COAL TECH-
NOLOGY UNIT CREDIT.—For purposes of subsection (a), 
the credit shall be applicable to not more than the first
196
$100,000,000 of qualifying investment in a qualifying sys-
tem of continuous emission control at any 1 existing coal-
based electricity generating unit. 
‘‘(e) QUALIFIED INVESTMENT.—For purposes of sub-
section (a), the term ‘qualified investment’ means, with 
respect to any taxable year, the basis of a qualifying sys-
tem of continuous emission control placed in service by 
the taxpayer during such taxable year. 
‘‘(f) QUALIFIED PROGRESS EXPENDITURES.—
‘‘(1) INCREASE IN QUALIFIED INVESTMENT.—
In the case of a taxpayer who has made an election 
under paragraph (5), the amount of the qualified in-
vestment of such taxpayer for the taxable year (de-
termined under subsection (e) without regard to this 
subsection) shall be increased by an amount equal to 
the aggregate of each qualified progress expenditure 
for the taxable year with respect to progress expend-
iture property. 
‘‘(2) PROGRESS EXPENDITURE PROPERTY DE-
FINED.—For purposes of this subsection, the term 
‘progress expenditure property’ means any property 
being constructed by or for the taxpayer and which 
it is reasonable to believe will qualify as a qualifying 
system of continuous emission control which is being
197
constructed by or for the taxpayer when it is placed 
in service. 
‘‘(3) QUALIFIED PROGRESS EXPENDITURES DE-
FINED.—For purposes of this subsection—
‘‘(A) SELF-CONSTRUCTED PROPERTY.—In 
the case of any self-constructed property, the 
term ‘qualified progress expenditures’ means 
the amount which, for purposes of this subpart, 
is properly chargeable (during such taxable 
year) to capital account with respect to such 
property. 
‘‘(B) 
NONSELF-CONSTRUCTED
PROP-
ERTY.—In the case of nonself-constructed prop-
erty, the term ‘qualified progress expenditures’ 
means the amount paid during the taxable year 
to another person for the construction of such 
property. 
‘‘(4) OTHER
DEFINITIONS.—For purposes of 
this subsection—
‘‘(A) SELF-CONSTRUCTED
PROPERTY.—
The term ‘self-constructed property’ means 
property for which it is reasonable to believe 
that more than half of the construction expendi-
tures will be made directly by the taxpayer.
198
‘‘(B) 
NONSELF-CONSTRUCTED
PROP-
ERTY.—The term ‘nonself-constructed property’ 
means property which is not self-constructed 
property. 
‘‘(C) CONSTRUCTION, 
ETC.—The term 
‘construction’ includes reconstruction and erec-
tion, and the term ‘constructed’ includes recon-
structed and erected. 
‘‘(D) ONLY
CONSTRUCTION
OF
QUALI-
FYING SYSTEM OF CONTINUOUS EMISSION CON-
TROL TO BE TAKEN INTO ACCOUNT.—Construc-
tion shall be taken into account only if, for pur-
poses of this subpart, expenditures therefore 
are properly chargeable to capital account with 
respect to the property. 
‘‘(5) ELECTION.—An election under this sub-
section may be made at such time and in such man-
ner as the Secretary may by regulations prescribe. 
Such an election shall apply to the taxable year for 
which made and to all subsequent taxable years. 
Such an election, once made, may not be revoked ex-
cept with the consent of the Secretary. 
‘‘(g) COORDINATION WITH OTHER CREDITS.—This 
section shall not apply to any property with respect to 
which the rehabilitation credit under section 47 or the en-
199
ergy credit under section 48A is allowed unless the tax-
payer elects to waive the application of such credit to such 
property. 
‘‘(h) TERMINATION.—This section shall not apply 
with respect to any qualified investment made more than 
10 years after the effective date of this section.’’. 
(3) RECAPTURE.—Section 50(a) (relating to 
other special rules) is amended by adding at the end 
the following: 
‘‘(6) SPECIAL RULES RELATING TO QUALIFYING 
SYSTEM OF CONTINUOUS EMISSION CONTROL.—For 
purposes of applying this subsection in the case of 
any credit allowable by reason of section 48B, the 
following shall apply: 
‘‘(A) GENERAL
RULE.—In lieu of the 
amount of the increase in tax under paragraph 
(1), the increase in tax shall be an amount 
equal to the investment tax credit allowed under 
section 38 for all prior taxable years with re-
spect to a qualifying system of continuous emis-
sion control (as defined by section 48B(b)(1)) 
multiplied by a fraction whose numerator is the 
number of years remaining to fully depreciate 
under this title the qualifying system of contin-
uous emission control disposed of, and whose
200
denominator is the total number of years over 
which such unit would otherwise have been sub-
ject to depreciation. For purposes of the pre-
ceding sentence, the year of disposition of the 
qualifying system of continuous emission con-
trol property shall be treated as a year of re-
maining depreciation. 
‘‘(B) PROPERTY CEASES TO QUALIFY FOR 
PROGRESS
EXPENDITURES.—Rules similar to 
the rules of paragraph (2) shall apply in the 
case of qualified progress expenditures for a 
qualifying system of continuous emission con-
trol under section 48B, except that the amount 
of the increase in tax under subparagraph (A) 
of this paragraph shall be substituted in lieu of 
the amount described in such paragraph (2). 
‘‘(C) APPLICATION OF PARAGRAPH.—This 
paragraph shall be applied separately with re-
spect to the credit allowed under section 38 re-
garding a qualifying system of continuous emis-
sion control.’’. 
(4) TECHNICAL AMENDMENTS.—
(A) Section 49(a)(1)(C) is amended by 
striking ‘‘and’’ at the end of clause (ii), by 
striking the period at the end of clause (iii) and
201
inserting ‘‘, and’’, and by adding at the end the 
following: 
‘‘(iv) the portion of the basis of any 
qualifying system of continuous emission 
control attributable to any qualified invest-
ment (as defined by section 48B(e)).’’. 
(B) Section 50(a)(4) is amended by strik-
ing ‘‘and (2)’’ and inserting ‘‘, (2), and (6)’’. 
(C) Section 50(c) is amended by adding at 
the end the following: 
‘‘(6) NONAPPLICATION.—Paragraphs (1) and 
(2) shall not apply to any qualifying clean coal tech-
nology unit credit under section 48B.’’. 
(D) The table of sections for subpart E of 
part IV of subchapter A of chapter 1 is amend-
ed by inserting after the item relating to section 
48A the following:
‘‘Sec. 48B. Qualifying clean coal technology unit credit.’’.
(5) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to periods after De-
cember 31, 2005, 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 enactment 
of the Revenue Reconciliation Act of 1990). 
(b) CREDIT FOR PRODUCTION FROM A QUALIFYING 
CLEAN COAL TECHNOLOGY UNIT.—
202
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 (relating to business re-
lated credits) is amended by adding at the end the 
following: 
‘‘SEC. 45L. CREDIT FOR PRODUCTION FROM A QUALIFYING 
CLEAN COAL TECHNOLOGY UNIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the qualifying clean coal technology production credit of 
any taxpayer for any taxable year is equal to the product 
of—
‘‘(1) the applicable amount of clean coal tech-
nology production credit, multiplied by 
‘‘(2) the kilowatt hours of electricity produced 
by the taxpayer during such taxable year at a quali-
fying clean coal technology unit during the 10-year 
period beginning on the date the unit was returned 
to service after retrofit, repowering, or replacement. 
‘‘(b) Applicable Amount. 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the applicable amount of clean coal technology 
production credit is equal to $0.0034. 
‘‘(2) INFLATION
ADJUSTMENT
FACTOR.—For 
calendar years after 2005, the applicable amount of 
clean coal technology production credit shall be ad-
justed by multiplying such amount by the inflation
203
adjustment factor for the calendar year in which the 
amount is applied. If any amount as increased under 
the preceding sentence is not a multiple of 0.01 cent, 
such amount shall be rounded to the nearest mul-
tiple of 0.01 cent. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) QUALIFYING
CLEAN
COAL
TECHNOLOGY 
UNIT.—The term ‘qualifying clean coal technology 
unit’ means a unit of the taxpayer which—
‘‘(A) is an existing coal-based electricity 
generating steam generator-turbine unit, 
‘‘(B) has a nameplate capacity rating of 
not more than 300,000 kilowatts, and 
‘‘(C) has been retrofitted, repowered, or re-
placed with a clean coal technology within 10 
years of the effective date of this section. 
‘‘(2) CLEAN
COAL
TECHNOLOGY.—The term 
‘clean coal technology’ means technology which—
‘‘(A) uses coal to produce 50 percent or 
more of its thermal output as electricity, includ-
ing advanced pulverized coal or atmospheric flu-
idized bed combustion, pressurized fluidized bed 
combustion, integrated gasification combined
204
cycle, or any other technology for the produc-
tion of electricity, 
‘‘(B) has a design heat rate not less than 
500 Btu/kWh below that of the existing unit be-
fore it is retrofit, repowered, or replaced with 
the qualifying clean coal technology, 
‘‘(C) has a maximum design heat rate of 
not more than 9,000 Btu/kWh when the design 
coal has a heat content of more than 8,000 Btu 
per pound, and 
‘‘(D) has a maximum design heat rate of 
not more than 10,500 Btu/kWh when the de-
sign coal has a heat content of 8,000 Btu per 
pound or less. 
‘‘(3) APPLICATION OF CERTAIN RULES.—The 
rules of paragraphs (3), (4), and (5) of section 45(e) 
shall apply. 
‘‘(4) INFLATION
ADJUSTMENT
FACTOR.—The 
term ‘inflation adjustment factor’ means, with re-
spect to a calendar year, a fraction the numerator 
of which is the GDP implicit price deflator for the 
preceding calendar year and the denominator of 
which is the GDP implicit price deflator for the cal-
endar year 2005.
205
‘‘(5) GDP IMPLICIT
PRICE
DEFLATOR.—The 
term ‘GDP implicit price deflator’ means the most 
recent revision of the implicit price deflator for the 
gross domestic product as computed by the Depart-
ment of Commerce before March 15 of the calendar 
year. 
‘‘(d) COORDINATION WITH OTHER CREDITS.—This 
section shall not apply to any property with respect to 
which the qualifying clean coal technology unit credit 
under section 48A is allowed unless the taxpayer elects 
to waive the application of such credit to such property.’’. 
(2) CREDIT TREATED AS BUSINESS CREDIT.—
Section 38(b) is amended by striking ‘‘plus’’ at the 
end of paragraph (21), by striking the period at the 
end of paragraph (22) and inserting ‘‘, plus’’, and 
by adding at the end the following: 
‘‘(23) the qualifying clean coal technology pro-
duction credit determined under section 45L(a).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 is amended after the item relating to sec-
tion 45K the following:
‘‘Sec. 45L. Credit for production from a qualifying clean coal technology unit.’’.
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to production after the 
date of enactment of this Act.
206
(c) CREDIT FOR INVESTMENT IN QUALIFYING AD-
VANCED CLEAN COAL TECHNOLOGY.—
(1) ALLOWANCE
OF
QUALIFYING
ADVANCED 
CLEAN COAL TECHNOLOGY FACILITY CREDIT.—Sec-
tion 46 (relating to amount of credit) is amended by 
striking ‘‘and’’ at the end of paragraph (3), by strik-
ing the period at the end of paragraph (4) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing: 
‘‘(5) the qualifying advanced clean coal tech-
nology facility credit.’’. 
(2) AMOUNT OF QUALIFYING ADVANCED CLEAN 
COAL TECHNOLOGY FACILITY CREDIT.—Subpart E 
of part IV of subchapter A of chapter 1 (relating to 
rules for computing investment credit) is amended 
by inserting after section 48B the following: 
‘‘SEC. 48C. QUALIFYING ADVANCED CLEAN COAL TECH-
NOLOGY FACILITY CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
qualifying advanced clean coal technology facility credit 
for any taxable year is an amount equal to 10 percent 
of the qualified investment in a qualifying advanced clean 
coal technology facility for such taxable year. 
‘‘(b) QUALIFYING ADVANCED CLEAN COAL TECH-
NOLOGY FACILITY.—