I 
109TH CONGRESS 
2D SESSION 
H. R. 5653 
To amend the Internal Revenue Code of 1986 to promote investment in 
energy independence through coal to liquid technology, biomass, and oil shale. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 20, 2006 
Mr. LEWIS of Kentucky 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 promote 
investment in energy independence through coal to liquid 
technology, biomass, and oil shale. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Investment in Energy Independence Act of 2006’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
Sec. 2. Credit for investment in coal-to-liquid fuels projects. 
Sec. 3. Temporary expensing for equipment used in coal-to-liquid fuels process. 
Sec. 4. Expansion and extension of alternative fuel credit. 
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Sec. 5. Modifications to enhanced oil, natural gas, and coalbed methane recov-
ery credit. 
Sec. 6. Allowance of enhanced oil, natural gas, and coalbed methane recovery 
credit against the alternative minimum tax. 
Sec. 7. Expansion of expensing of oil and alternative fuel refineries. 
Sec. 8. Expensing for conversion of natural gas-fired facilities for the produc-
tion ethanol to coal-fired facilities. 
SEC. 2. CREDIT FOR INVESTMENT IN COAL-TO-LIQUID 
FUELS PROJECTS. 
(a) IN GENERAL.—Section 46 of the Internal Rev-
enue Code of 1986 (relating to amount of credit) is 
amended by striking ‘‘and’’ at the end of paragraph (3), 
by striking the period at the end of paragraph (4) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(5) the qualifying coal-to-liquid fuels project 
credit.’’. 
(b) AMOUNT OF CREDIT.—Subpart E of part IV of 
subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to rules for computing investment credit) 
is amended by inserting after section 48B the following 
new section: 
‘‘SEC. 48C. QUALIFYING COAL-TO-LIQUID FUELS PROJECT 
CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
qualifying coal-to-liquid fuels project credit for any taxable 
year is an amount equal to 20 percent of the qualified 
investment for such taxable year. 
‘‘(b) QUALIFIED INVESTMENT.— 
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‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the qualified investment for any taxable year is 
the basis of property placed in service by the tax-
payer during such taxable year which is part of a 
qualifying coal-to-liquid fuels project— 
‘‘(A)(i) the construction, reconstruction, or 
erection of which is completed by the taxpayer, 
or 
‘‘(ii) which is acquired by the taxpayer if 
the original use of such property commences 
with the taxpayer, and 
‘‘(B) with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able. 
‘‘(2) APPLICABLE RULES.—For purposes of this 
section, rules similar to the rules of subsection 
(a)(4) and (b) of section 48 shall apply. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
QUALIFYING
COAL-TO-LIQUID
FUELS 
PROJECT.—The term ‘qualifying coal-to-liquid fuels 
project’ means any domestic project which— 
‘‘(A) employs the Fischer-Tropsch process 
to produce at least 5,000 barrels per day of 
transportation grade liquid fuels from coal, in-
cluding any property which allows for the cap-
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ture, transportation, or sequestration of by- 
products resulting from such process, including 
carbon emissions, and 
‘‘(B) any portion of the qualified invest-
ment in which is certified under the qualifying 
coal-to-liquid program as eligible for credit 
under this section in an amount (not to exceed 
$200,000,000) determined by the Secretary. 
‘‘(2) COAL.—The term ‘coal’ means any carbon-
ized or semicarbonized matter, including peat and 
biomass. 
‘‘(3) BIOMASS.—The term ‘biomass’ means any 
organic material other than oil and natural gas (or 
any product thereof). 
‘‘(d) QUALIFYING COAL-TO-LIQUID FUELS PROJECT 
PROGRAM.— 
‘‘(1) IN GENERAL.—The Secretary, in consulta-
tion with the Secretary of Energy, shall establish a 
qualifying coal-to-liquid fuels project program to 
consider and award certifications for qualified in-
vestment eligible for credits under this section to 10 
qualifying coal-to-liquid fuels project sponsors under 
this section, not less than 2 of which shall not have 
the capacity to produce more than 10,000 barrels of 
transportation grade liquid fuels from coal per day. 
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The total qualified investment which may be award-
ed eligibility for credit under the program shall not 
exceed $2,000,000,000. 
‘‘(2) PERIOD
OF
ISSUANCE.—A certificate of 
eligibility under paragraph (1) may be issued only 
during the 10-fiscal year period beginning on Octo-
ber 1, 2006. 
‘‘(3) SELECTION
CRITERIA.—The Secretary 
shall not make a competitive certification award for 
qualified investment for credit eligibility under this 
section unless the recipient has documented to the 
satisfaction of the Secretary that— 
‘‘(A) the award recipient is financially via-
ble without the receipt of additional Federal 
funding associated with the proposed project, 
‘‘(B) the recipient will provide sufficient 
information to the Secretary for the Secretary 
to ensure that the qualified investment is spent 
efficiently and effectively, 
‘‘(C) a market exists for the products of 
the proposed project as evidenced by contracts 
or written statements of intent from potential 
customers, 
‘‘(D) the fuels identified with respect to 
the gasification technology for such project will 
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