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‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the term ‘qualifying advanced clean coal tech-
nology facility’ means a facility of the taxpayer 
which—
‘‘(A)(i)(I) replaces a conventional tech-
nology facility of the taxpayer and the original 
use of which commences with the taxpayer, or 
‘‘(II) is a retrofitted or repowered conven-
tional technology facility, the retrofitting or 
repowering of which is completed by the tax-
payer (but only with respect to that portion of 
the basis which is properly attributable to such 
retrofitting or repowering), or 
‘‘(ii) is acquired through purchase (as de-
fined by section 179(d)(2)), 
‘‘(B) is depreciable under section 167, 
‘‘(C) has a useful life of not less than 4 
years, 
‘‘(D) is located in the United States, and 
‘‘(E) uses qualifying advanced clean coal 
technology. 
‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.—
For purposes of subparagraph (A) of paragraph (1), 
in the case of a facility which—
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‘‘(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 facility was origi-
nally placed in service, for a period of not less 
than 12 years, such facility 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 property 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. 
‘‘(3) QUALIFYING
ADVANCED
CLEAN
COAL 
TECHNOLOGY.—For purposes of paragraph (1)—
‘‘(A) IN GENERAL.—The term ‘qualifying 
advanced clean coal technology’ means, with re-
spect to clean coal technology—
‘‘(i) multiple applications, with a 
combined capacity of not more than 
5,000 megawatts, of advanced pulver-
ized coal or atmospheric fluidized bed 
combustion technology—
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‘‘(I) installed as a new, ret-
rofit, or repowering application, 
‘‘(II) operated between 2006 
and 2015, and 
‘‘(III) with a design net heat 
rate of not more than 9,500 Btu 
per kilowatt hour when the de-
sign coal has a heat content of 
more than 8,000 Btu per pound, 
or a design net heat rate of not 
more than 9,900 Btu per kilo-
watt hour when the design coal 
has a heat content of 8,000 Btu 
per pound or less, 
‘‘(ii) multiple applications, with a 
combined capacity of not more than 1,000 
megawatts, of pressurized fluidized bed 
combustion technology—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2006 and 
2015, and 
‘‘(III) with a design net heat rate 
of not more than 8,400 Btu per kilo-
watt hour when the design coal has a
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heat content of more than 8,000 Btu 
per pound, or a design net heat rate 
of not more than 9,900 Btu’s per kilo-
watt hour when the design coal has a 
heat content of 8,000 Btu per pound 
or less, 
‘‘(iii) multiple applications, with a 
combined capacity of not more than 2,000 
megawatts, of integrated gasification com-
bined cycle technology, with or without fuel 
or chemical co-production—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2006 and 
2015, 
‘‘(III) with a design net heat rate 
of not more than 8,550 Btu per kilo-
watt hour when the design coal has a 
heat content of more than 8,000 Btu 
per pound, or a design net heat rate 
of not more than 9,900 Btu per kilo-
watt hour when the design coal has a 
heat content of 8,000 Btu per pound 
or less, and
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‘‘(IV) with a net thermal effi-
ciency on any fuel or chemical co-pro-
duction of not less than 39 percent 
(higher heating value), and 
‘‘(iv) multiple applications, with a 
combined capacity of not more than 2,000 
megawatts of technology for the production 
of electricity—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2006 and 
2015, and 
‘‘(III) with a carbon emission 
rate which is not more than 85 per-
cent of conventional technology. 
‘‘(B) EXCEPTIONS.—Such term shall not 
include clean coal technology projects receiving 
or scheduled to receive funding under the Clean 
Coal Technology Program of the Department of 
Energy. 
‘‘(C) CLEAN
COAL
TECHNOLOGY.—The 
term ‘clean coal technology’ means advanced 
technology which uses coal to produce 75 per-
cent or more of its thermal output as electricity 
including advanced pulverized coal or atmos-
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pheric fluidized bed combustion, pressurized flu-
idized bed combustion, integrated gasification 
combined cycle with or without fuel or chemical 
co-production, and any other technology for the 
production of electricity which exceeds the per-
formance of conventional technology. 
‘‘(D) CONVENTIONAL TECHNOLOGY.—The 
term ‘conventional technology’ means—
‘‘(i) coal-fired combustion technology 
with a design net heat rate of not less than 
9,500 Btu per kilowatt hour (HHV) and a 
carbon equivalents emission rate of not 
more than 0.54 pounds of carbon per kilo-
watt hour when the design coal has a heat 
content of more than 8,000 Btu per 
pound, 
‘‘(ii) coal-fired combustion technology 
with a design net heat rate of not less than 
10,500 Btu per kilowatt hour (HHV) and 
a carbon equivalents emission rate of not 
more than 0.60 pounds of carbon per kilo-
watt hour when the design coal has a heat 
content of 8,000 Btu per pound or less, or 
‘‘(iii) natural gas-fired combustion 
technology with a design net heat rate of
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not less than 7,500 Btu per kilowatt hour 
(HHV) and a carbon equivalents emission 
rate of not more than 0.24 pounds of car-
bon per kilowatt hour. 
‘‘(E) DESIGN NET HEAT RATE.—The de-
sign net heat rate shall be based on the design 
annual heat input to and the design annual net 
electrical output from the qualifying advanced 
clean coal technology (determined without re-
gard to such technology’s co-generation of 
steam). 
‘‘(F) SELECTION CRITERIA.—Selection cri-
teria for clean coal technology facilities—
‘‘(i) shall be established by the Sec-
retary of Energy as part of a competitive 
solicitation, 
‘‘(ii) shall include primary criteria of 
minimum design net heat rate, maximum 
design thermal efficiency, and lowest cost 
to the government, and 
‘‘(iii) shall include supplemental cri-
teria as determined appropriate by the 
Secretary of Energy. 
‘‘(c) QUALIFIED INVESTMENT.—For purposes of sub-
section (a), the term ‘qualified investment’ means, with
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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. 
‘‘(d) 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 
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
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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. 
‘‘(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-