169
‘‘(B) which reduces the discharge into the
atmosphere of 1 or more of the following pollut-
ants to not more than—
‘‘(i) 5 percent of the potential com-
bustion concentration sulfur dioxide emis-
sions for a coal with a potential combus-
tion concentration sulfur emission of 1.2
lb/million btu of heat input or greater,
‘‘(ii) 15 percent of the potential com-
bustion concentration sulfur dioxide emis-
sions for a coal with a potential combus-
tion concentration sulfur emission of less
than 1.2 lb/million btu of heat input,
‘‘(iii) nitrogen oxide emissions of 0.1
lb per million btu of heat input from other
than cyclone-fired boilers,
‘‘(iv) 15 percent of the uncontrolled
nitrogen oxide emissions from cyclone-fired
boilers,
‘‘(v) particulate emissions of 0.02 lb
per million btu of heat input, and
‘‘(vi) the emission levels specified in
the new source performance standards of
the Clean Air Act (42 U.S.C. 7411) in ef-
fect at the time of retrofitting, repowering,
170
or replacement of the qualifying clean coal
technology unit for the category of source
if such level is lower than the levels speci-
fied in clause (i), (ii), (iii), (iv), or (v).
‘‘(2) EXCEPTIONS.—Such term shall not in-
clude any projects receiving or scheduled to receive
funding under the Clean Coal Technology Program,
or the Power Plant Improvement administered by
the Secretary of the Department of Energy.
‘‘(d) CLEAN COAL TECHNOLOGY.—For purposes of
this section, the term ‘clean coal technology’ means ad-
vanced technology which uses coal to produce 75 percent
or more of its thermal output as electricity including ad-
vanced pulverized coal or atmospheric fluidized bed com-
bustion, pressurized fluidized bed combustion, integrated
gasification combined cycle with or without fuel or chem-
ical co-production, and any other technology for the pro-
duction of electricity which exceeds the performance of
conventional technology.
‘‘(e) CONVENTIONAL TECHNOLOGY.—The term ‘con-
ventional technology’ means—
‘‘(1) coal-fired combustion technology with a de-
sign net heat rate of not less than 9,500 Btu per kil-
owatt hour (HHV) and a carbon equivalents emis-
sion rate of not more than 0.54 pounds of carbon
171
per kilowatt hour when the design coal has a heat
content of more than 9,000 Btu per pound,
‘‘(2) coal-fired combustion technology with a de-
sign net heat rate of not less than 10,500 Btu per
kilowatt hour (HHV) and a carbon equivalents emis-
sion rate of not more than 0.60 pounds of carbon
per kilowatt hour when the design coal has a heat
content of 9,000 Btu per pound or less, or
‘‘(3) natural gas-fired combustion technology
with a design net heat rate of not less than 7,500
Btu per kilowatt hour (HHV) and a carbon equiva-
lents emission rate of not more than 0.24 pounds of
carbon per kilowatt hour.
‘‘(f) DESIGN NET HEAT RATE.—The design net heat
rate shall be based on the design annual heat input to
and the design annual net electrical output from the quali-
fying advanced clean coal technology (determined without
regard to such technology’s co-generation of steam).
‘‘(g) SELECTION CRITERIA.—Selection criteria for
qualifying advanced clean coal technology facilities—
‘‘(1) shall be established by the Secretary of
Energy as part of a competitive solicitation,
‘‘(2) shall include primary criteria of minimum
design net heat rate, maximum design thermal effi-
172
ciency, environmental performance, and lowest cost
to the government, and
‘‘(3) shall include supplemental criteria as de-
termined appropriate by the Secretary of Energy.
‘‘(h) QUALIFIED INVESTMENT.—For purposes of
subsection (a), the term ‘qualified investment’ means, with
respect to any taxable year, the basis of a qualifying ad-
vanced clean coal technology facility placed in service by
the taxpayer during such taxable year.
‘‘(i) 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 (c) without regard to this
section) 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
advanced clean coal technology facility which is
173
being 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.
174
‘‘(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
ADVANCED
CLEAN
COAL
TECHNOLOGY
FACILITY TO BE TAKEN INTO ACCOUNT.—Con-
struction shall be taken into account only if, for
purposes of this subpart, expenditures therefor
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.
‘‘(j) 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-
177
‘‘(I) a site,
‘‘(II) contractual commitments
for procurement and construction,
‘‘(III) filings for all necessary
preconstruction approvals,
‘‘(IV) a demonstrated record of
having successfully completed com-
parable projects on a timely basis, and
‘‘(V) such other factors that the
Secretary shall determine are appro-
priate;
‘‘(iii) to allocate credits to a portion of
a facility (or a portion of the production
from a facility) if the Secretary determines
that such an allocation should maximize
the amount of efficient production encour-
aged with the available tax credits;
‘‘(C) to set progress requirements and con-
ditional approvals so that credits for approved
projects that become unlikely to meet the nec-
essary conditions that can be reallocated by the
Secretary to other projects;
‘‘(D) to reallocate credits that are not allo-
cated to 1 technology described in clauses (i)
through (iv) of subsection (c)(1)(A) because an
178
insufficient number of qualifying facilities re-
quested credits for one technology, to another
technology described in another subparagraph
of subsection (c) in order to maximize the
amount of energy efficient production encour-
aged with the available tax credits; and
‘‘(E) to provide taxpayers with opportuni-
ties to correct administrative errors and omis-
sions with respect to allocations and record-
keeping within a reasonable period after their
discovery, taking into account the availability of
regulations and other administrative guidance
from the Secretary.’’.
(c) RECAPTURE.—Section 50(a) (relating to other
special rules) is amended by adding at the end the fol-
lowing:
‘‘(6) SPECIAL RULES RELATING TO QUALIFYING
ADVANCED CLEAN COAL TECHNOLOGY FACILITY.—
For purposes of applying this subsection in the case
of any credit allowable by reason of section 48A, 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
179
section 38 for all prior taxable years with re-
spect to a qualifying advanced clean coal tech-
nology facility (as defined by section 48A(b)(1))
multiplied by a fraction whose numerator is the
number of years remaining to fully depreciate
under this title the qualifying advanced clean
coal technology facility disposed of, and whose
denominator is the total number of years over
which such facility would otherwise have been
subject to depreciation. For purposes of the
preceding sentence, the year of disposition of
the qualifying advanced clean coal technology
facility 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 advanced clean coal technology facil-
ity under section 48A, 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-
180
spect to the credit allowed under section 38 re-
garding a qualifying advanced clean coal tech-
nology facility.’’.
(d) TRANSITIONAL RULE.—Section 39(d) (relating to
transitional rules) is amended by adding at the end the
following:
‘‘(14) NO CARRYBACK OF SECTION 48A CREDIT
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is
attributable to the qualifying advanced clean coal
technology facility credit determined under section
48A may be carried back to a taxable year ending
before January 1, 2002.’’.
(e) TECHNICAL AMENDMENTS.—
(1) Section 49(a)(1)(C) is amended by striking
‘‘and’’ at the end of clause (ii), by striking the pe-
riod at the end of clause (iii) and inserting ‘‘, and’’,
and by adding at the end the following:
‘‘(iv) the portion of the basis of any
qualifying advanced clean coal technology
facility attributable to any qualified invest-
ment (as defined by section 48A(c)).’’
(2) Section 50(a)(4) is amended by striking
‘‘and (2)’’ and inserting ‘‘, (2), and (6)’’.
181
(3) Section 50(c) is amended by adding at the
end the following new paragraph:
‘‘(6) SPECIAL
RULE
FOR
QUALIFYING
AD-
VANCED CLEAN COAL TECHNOLOGY FACILITIES.—
Paragraphs (1) and (2) shall not apply to any prop-
erty with respect to the credit determined under sec-
tion 48A.’’
(4) The table of sections for subpart E of part
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 48 the fol-
lowing:
‘‘Sec. 48A. Qualifying advanced clean coal technology facility credit.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to periods after December 31,
2001, 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 Reconcili-
ation Act of 1990).
SEC. 308. CREDIT FOR PRODUCTION FROM QUALIFYING
ADVANCED CLEAN COAL TECHNOLOGY.
(a) CREDIT FOR PRODUCTION FROM QUALIFYING
ADVANCED CLEAN COAL TECHNOLOGY.—Subpart D of
part IV of subchapter A of chapter 1 (relating to business
related credits) is amended by adding at the end the fol-
lowing:
182
‘‘SEC. 45K. CREDIT FOR PRODUCTION FROM QUALIFYING
ADVANCED CLEAN COAL TECHNOLOGY.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the qualifying advanced clean coal technology production
credit of any taxpayer for any taxable year is equal to—
‘‘(1) the applicable amount of advanced clean
coal technology production credit, multiplied by
‘‘(2) the sum of—
‘‘(A) the kilowatt hours of electricity, plus
‘‘(B) each 3,413 Btu of fuels or chemicals,
produced by the taxpayer during such taxable year
at a qualifying advanced clean coal technology facil-
ity during the 10-year period beginning on the date
the facility was originally placed in service.
‘‘(b) APPLICABLE AMOUNT.—For purposes of this
section, the applicable amount of advanced clean coal tech-
nology production credit with respect to production from
a qualifying advanced clean coal technology facility shall
be determined as follows:
‘‘(1) Where the design coal has a heat content
of more than 9,000 Btu per pound:
‘‘(A) In the case of a facility originally
placed in service before 2009, if—
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not more than 8,400 ............................................................
$.0060
$.0038
More than 8,400 but not more than 8,550 ..........................
$.0025
$.0010
183
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
More than 8,550 but not more than 8,750 ..........................
$.0010
$.0010.
‘‘(B) In the case of a facility originally
placed in service after 2008 and before 2013,
if—
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not more than 7,770 ............................................................
$.0105
$.0090
More than 7,770 but not more than 8,125 ..........................
$.0085
$.0068
More than 8,125 but not more than 8,350 ..........................
$.0075
$.0055.
‘‘(C) In the case of a facility originally
placed in service after 2012 and before 2017,
if—
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not more than 7,380 ............................................................
$.0140
$.01
More than 7,380 but not more than 7,720 ..........................
$.0120
$.0090.
‘‘(2) Where the design coal has a heat content
of not more than 9,000 Btu per pound:
‘‘(A) In the case of a facility originally
placed in service before 2009, if—
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not more than 8,500 ............................................................
$.0060
$.0038
More than 8,500 but not more than 8,650 ..........................
$.0025
$.0010
More than 8,650 but not more than 8,750 ..........................
$.0010
$.0010.
184
‘‘(B) In the case of a facility originally
placed in service after 2008 and before 2013,
if—
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not more than 8,000 ............................................................
$.0105
$.009
More than 8,000 but not more than 8,250 ..........................
$.0085
$.0068
More than 8,250 but not more than 8,400 ..........................
$.0075
$.0055.
‘‘(C) In the case of a facility originally
placed in service after 2012 and before 2017,
if—
‘‘The facility design net heat rate, Btu/kWh (HHV) is
equal to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not more than 7,800 ............................................................
$.0140
$.0115
More than 7,800 but not more than 7,950 ..........................
$.0120
$.0090.
‘‘(3) Where the clean coal technology facility is
producing fuel or chemicals:
‘‘(A) In the case of a facility originally
placed in service before 2009, if—
‘‘The facility design net thermal efficiency (HHV) is equal
to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not less than 40.6 percent ...................................................
$.0060
$.0038
Less than 40.6 but not less than 40 percent .......................
$.0025
$.0010
Less than 40 but not less than 39 percent ..........................
$.0010
$.0010.
‘‘(B) In the case of a facility originally
placed in service after 2008 and before 2013,
if—
‘‘The facility design net thermal efficiency (HHV) is equal
to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not less than 43.9 percent ...................................................
$.0105
$.009
185
‘‘The facility design net thermal efficiency (HHV) is equal
to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Less than 43.9 but not less than 42 percent .......................
$.0085
$.0068
Less than 42 but not less than 40.9 percent .......................
$.0075
$.0055.
‘‘(C) In the case of a facility originally
placed in service after 2012 and before 2017,
if—
‘‘The facility design net thermal efficiency (HHV) is equal
to:
The applicable amount is:
For 1st 5 years
of such service
For 2d 5 years of
such service
Not less than 44.2 percent ...................................................
$.0140
$.0115
Less than 44.2 but not less than 43.6 percent ....................
$.0120
$.0090.
‘‘(c) INFLATION ADJUSTMENT FACTOR.—For cal-
endar years after 2001, each amount in paragraphs (1),
(2), and (3) shall be adjusted by multiplying such amount
by the inflation adjustment factor for the calendar year
in which the amount is applied. If any amount as in-
creased under the preceding sentence is not a multiple of
0.01 cent, such amount shall be rounded to the nearest
multiple of 0.01 cent.
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—Any term used in this sec-
tion which is also used in section 48A shall have the
meaning given such term in section 48A.
‘‘(2) APPLICABLE RULES.—The rules of para-
graphs (3), (4), and (5) of section 45 shall apply.
186
‘‘(3) 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 2001.
‘‘(4) 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.’’.
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) is amended by striking ‘‘plus’’ at the end of
paragraph (18), by striking the period at the end of para-
graph (19) and inserting ‘‘, plus’’, and by adding at the
end the following:
‘‘(20) the qualifying advanced clean coal tech-
nology production credit determined under section
45K(a).’’.
(c) TRANSITIONAL RULE.—Section 39(d) (relating to
transitional rules is amended by adding at the end the fol-
lowing:
187
‘‘(15) NO CARRYBACK OF SECTION 45K CREDIT
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is
attributable to the qualifying advanced clean coal
technology production credit determined under sec-
tion 45K may be carried back to a taxable year end-
ing before the date of enactment of section 45K.’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
is amended by adding at the end the following:
‘‘Sec. 45K. Credit for production from qualifying advanced clean
coal technology.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to production after the date of en-
actment of this Act.
SEC. 309. BUSINESS RELATED ENERGY CREDITS ALLOWED
AGAINST REGULAR AND MINIMUM TAX.
(a) IN GENERAL.—Subsection (c) of section 38 (re-
lating to limitation based on amount of tax) is amended
by redesignating paragraph (3) as paragraph (4) and by
inserting after paragraph (2) the following new paragraph:
‘‘(3) SPECIAL RULES FOR SPECIFIED ENERGY
CREDITS.—
‘‘(A) IN GENERAL.—In the case of speci-
fied energy credits—
188
‘‘(i) this section and section 39 shall
be applied separately with respect to such
credits, and
‘‘(ii) in applying paragraph (1) to
such credits—
‘‘(I) the tentative minimum tax
shall be treated as being zero, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable year (other than the specified
energy credits).
‘‘(B) SPECIFIED
ENERGY
CREDITS.—For
purposes of this subsection, the term ‘specified
energy credits’ means the credits determined
under sections 45G, 45H, 45I, 45J, and 45K.’’.
(b) CONFORMING AMENDMENT.—Subclause (II) of
section 38(c)(2)(A)(ii) is amended by inserting ‘‘or the
specified energy credits’’ after ‘‘employment credit’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years ending after the
date of enactment of this Act.
189
SEC. 310. TEMPORARY REPEAL OF ALTERNATIVE MINIMUM
TAX PREFERENCE FOR INTANGIBLE DRILL-
ING COSTS.
(a) IN GENERAL.—Clause (ii) of section 57(a)(2)(E)
is amended by adding at the end the following new sen-
tence:‘‘The preceding sentence shall not apply to taxable
years beginning after December 31, 2001, and before Jan-
uary 1, 2005.’’.
(b) EFFECTIVE DATES.—The amendment made by
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2001.
SEC. 311. ALLOWANCE OF ENHANCED RECOVERY CREDIT
AGAINST THE ALTERNATIVE MINIMUM TAX.
(a) IN GENERAL.—Subparagraph (B) of section
38(c)(3) is amended by adding at the end the following
new sentence: ‘‘For taxable years beginning before Janu-
ary 1, 2005, such term includes the credit determined
under section 43.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SEC. 312. EXTENSION OF CERTAIN BENEFITS FOR ENERGY-
RELATED BUSINESSES ON INDIAN RESERVA-
TIONS.
(a) DEPRECIATION FOR PROPERTY ON INDIAN RES-
ERVATIONS.—Paragraph (8) of section 168(j) (relating to
190
termination) is amended by adding at the end the fol-
lowing new sentence: ‘‘The preceding sentence shall be ap-
plied by substituting ‘‘December 31, 2006’’ for ‘‘December
31, 2003’’ in the case of property placed in service as part
of a facility for—
‘‘(A) the generation or transmission of
electricity (including from any qualified energy
resource, as defined in section 45(c)),
‘‘(B) an oil or gas well,
‘‘(C) the transmission or refining of oil or
gas, or
‘‘(D) the production of any qualified fuel
(as defined in section 29(c)).’’
(b) EMPLOYMENT OF INDIANS.—Subsection (f) of
section 45A (relating to termination) is amended by add-
ing at the end the following new sentence: ‘‘The preceding
sentence shall be applied by substituting ‘‘December 31,
2006’’ for ‘‘December 31, 2003’’ in the case of wages paid
for services performed at a facility described in section
168(j)(8).’’
Æ