I 
109TH CONGRESS 
1ST SESSION H. R. 3580 
To amend the Internal Revenue Code of 1986 to provide for a transferable 
credit against the income tax for producing energy from waste coal. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 28, 2005 
Mr. MURPHY (for himself, Mr. MURTHA, Mr. PETERSON of Pennsylvania, Ms. 
HART, and Mr. ENGLISH of Pennsylvania) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for a transferable credit against the income tax for pro-
ducing energy from waste coal. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Environmental Res-
toration Act of 2005’’. 
SEC. 2. FINDINGS AND PURPOSE. 
(a) FINDINGS.—Congress finds the following: 
(1) Coal mining has been an important part of 
the industrial heritage of the United States for over
150 years. As coal is removed from underground 
mines, a large amount of other materials accom-
panies the coal to the surface. This substance, 
known as gob, contains a mixture of clay, rocks, soil, 
minerals, and other raw materials. The gob piles 
contain millions of cubic feet of material known to 
contribute to acid mine drainage. 
(2) The mountains of gob contain large 
amounts of potential energy that can be recycled to 
create new sources of power. The technology to use 
the gob pile materials as an efficient alternative en-
ergy source has been developed over the past 15 
years. However, the incentive to invest in the tech-
nology has not been pursued due to the high capital-
ization and operating costs. 
(3) Circulating Fluidized Bed (CFB) combus-
tion is a clean coal technology that produces low 
emissions of sulfur dioxides, nitrogen oxides, particu-
late matter, and mercury. CFB represents the best 
available control technology to burn waste coal and 
recover the energy stored therein. By using waste 
coal as the fuel source, the existing waste coal sites 
can be reclaimed, the mine drainage associated with 
these sites ameliorated, and the alkaline coal com-
bustion byproducts beneficially used in reclaiming 
the mine lands. 
(4) Developing alternate energy sources reduces 
energy costs, reduces dependencies on foreign oil, 
and improves the competitiveness of American in-
dustry. Increasing energy demands, and over reli-
ance on limited sources of energy, will result in high-
er prices for homeowners and industry. Higher pro-
duction costs hurt American jobs, overburdens in-
dustry, and stifles economic growth. The develop-
ment of alternate energy sources will result in lower 
prices, a cleaner environment, new manufacturing, 
and more jobs. 
(b) PURPOSE.—The purpose of this Act is to encour-
age and create incentives for alternate fuel sources to meet 
the increasing demands of homeowners and industries 
while helping to keep the environment clean by utilizing 
waste coal efficiently. 
SEC. 3. ENERGY PRODUCED FROM WASTE COAL. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
inserting after section 45I the following new section:
‘‘SEC. 45J. ENERGY PRODUCED FROM WASTE COAL. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the waste coal energy production credit for any taxable 
year is an amount equal to $0.75 per million Btu of heat 
input utilized by the taxpayer to produce energy in an eli-
gible facility from qualified waste coal during the taxable 
year. 
‘‘(b) CREDIT REDUCED FOR GRANTS.—The amount 
of the credit determined under subsection (a) with respect 
to any project for any taxable year shall be reduced by 
the amount which is the product of the amount so deter-
mined for such year and a fraction— 
‘‘(1) the numerator of which is the sum, for the 
taxable year and all prior taxable years, of— 
‘‘(A) grants provided by the United States, 
a State, or a political subdivision of a State for 
use in connection with the project, and 
‘‘(B) the amount of any other credit allow-
able with respect to any property which is part 
of the project, and 
‘‘(2) the denominator of which is the aggregate 
amount of additions to the capital account for the 
project for the taxable year and all prior taxable 
years.
The amounts under the preceding sentence for any taxable 
year shall be determined as of the close of the taxable 
year. 
‘‘(c) QUALIFIED WASTE COAL.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified waste coal’ means coal cer-
tified by the Secretary to be waste (as defined in 
paragraphs (1) through (6) of section 292.202(b) of 
title 18, Code of Federal Regulations (as in effect on 
the date of the enactment of this section)). 
‘‘(2) CERTIFICATION PROCESS.—For purposes 
of paragraph (1), coal may not be certified as quali-
fied waste coal unless application therefor is sub-
mitted— 
‘‘(A) with respect to a facility placed in 
service prior to, or within 12 months after, the 
date of enactment of this section, not later than 
6 months after the date of such enactment, and 
‘‘(B) with respect to a facility placed in 
service at least 12 months after the date of the 
enactment of this section, at least 6 months 
prior to the anticipated commercial operation 
date of such facility. 
‘‘(d) ELIGIBLE FACILITY.—For purposes of this sec-
tion—
‘‘(1) IN GENERAL.—The term ‘eligible facility’ 
means a facility— 
‘‘(A) whose heat input is not less than 75 
percent from qualified waste coal, 
‘‘(B) which, as of the date on which the 
Secretary determines by private letter ruling 
that the taxpayer is eligible for the allowance of 
the credit under this section, has under its con-
trol, by ownership, lease, or contract— 
‘‘(i) with respect to a facility placed in 
service after the date of the enactment of 
this section, not less than a 15-year supply 
of qualified waste coal, or 
‘‘(ii) with respect to a facility placed 
in service prior to the date of the enact-
ment of this section, not less than a 10- 
year supply of qualified waste coal, and 
‘‘(C) which— 
‘‘(i) is placed in service prior to, or 
within 12 months after, the date of the en-
actment of this section, or 
‘‘(ii) is placed in service not more 
than 48 months after the month in which 
the taxpayer receives the private letter rul-
ing referred to in subparagraph (B).
‘‘(2) PRIVATE LETTER RULING.—For purposes 
of paragraph (1)(B), a private letter ruling shall not 
be taken into account unless the request for such 
ruling is submitted to the Secretary within 30 days 
after the date on which the supply of coal that the 
taxpayer has under its control is certified as quali-
fied waste coal under subsection (c). 
‘‘(e) 
OTHER
DEFINITION
AND
APPLICABLE 
RULES.—For purposes of this section— 
‘‘(1) HEAT CONTENT.—Heat content shall be 
determined on an ‘as received’ basis. 
‘‘(2) APPLICABLE RULES.—Rules similar to the 
rules of section 45(e) (other than paragraph (2)) 
shall apply. 
‘‘(3) FORCE MAJEURE.—Performance time re-
quirements specified in this section may be sus-
pended by the Secretary for reasons beyond the con-
trol of the taxpayer when the Secretary is so re-
quested to extend deadlines by the taxpayer as long 
as the taxpayer makes such request within 72 hours 
of determining such event has occurred. Such events 
include acts of God and third party actions causing 
delay. 
‘‘(f) TERMINATION OF CREDIT.—
‘‘(1) IN GENERAL.—No amount shall be allowed 
as a credit under subsection (a) with respect to an 
eligible facility for taxable years beginning after the 
expiration of the period determined under paragraph 
(1). 
‘‘(2) PERIOD OF APPLICABILITY.—The period 
determined under this paragraph is— 
‘‘(A) with respect to a facility placed in 
service not later than 5 years after the date of 
the enactment of this section, the 10-year pe-
riod beginning on the date on which such facil-
ity receives certification that it is an eligible fa-
cility (as defined in subsection (d)), and 
‘‘(B) with respect to a facility placed in 
service more than 5 years after the date of en-
actment of this section, the period beginning on 
the date on which such facility receives certifi-
cation that it is an eligible facility (as defined 
in subsection (d)) and ending on the date that 
is 15 years after the date of the enactment of 
this section. 
‘‘(g) SPECIAL
ANNUAL
APPLICATION.—Notwith-
standing any other provision of this title, no amount shall 
be allowed as a credit for a taxable year under subsection
(a) until after the taxpayer submits an application for 
such credit to the Secretary. 
‘‘(h) CREDIT MAY BE TRANSFERRED.—Nothing in 
any law or rule of law shall be construed to limit the trans-
ferability of the credit allowed by this section through sale 
or repurchase agreements.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to current year business credit) is amended by strik-
ing ‘‘plus’’ at the end of paragraph (18), by striking the 
period at the end of paragraph (19) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(20) the waste coal energy production credit 
determined under section 45J.’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 
such Code (relating to certain expenses for which credits 
are allowable) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(e) WASTE COAL ENERGY PRODUCTION CREDIT.— 
No deduction shall be allowed for that portion of expenses 
incurred by the taxpayer to purchase qualified waste coal 
(excluding costs of transportation, handling, and prepara-
tion that may be included in the purchase price) otherwise 
allowable as a deduction for the taxable year which is
equal to the amount of the credit determined for such tax-
able year under section 45J.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45I the following new item: 
‘‘45J. Energy produced from waste coal.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2005. 
SEC. 4. TREATMENT OF WASTE COAL PROCESSING FACIL-
ITY AS EXEMPT FACILITY BOND. 
(a) IN GENERAL.—Paragraph (6) of section 142(a) 
(relating to definition of exempt facility bond) is amended 
by striking ‘‘facilities,’’ and inserting ‘‘facilities, including 
waste coal processing facilities,’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after December 
31, 2005. 
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