I 
108TH CONGRESS 
1ST SESSION H. R. 1213
To facilitate the production and generation of coal-based power. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 11, 2003
Mr. WHITFIELD (for himself, Mr. BOUCHER, Mr. SHIMKUS, Mr. COSTELLO, 
Mr. LEWIS of Kentucky, Mr. MOLLOHAN, Mrs. CAPITO, Mr. STRICK-
LAND, and Mr. LAHOOD) introduced the following bill; which was re-
ferred to the Committee on Science, and in addition to the Committees 
on Ways and Means, and Energy and Commerce, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To facilitate the production and generation of coal-based 
power.
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 ‘‘Clean Coal Power Act 
of 2003’’. 
SEC. 2. DEFINITIONS. 
For purposes of this Act:
(1) COST
AND
PERFORMANCE
GOALS.—The 
term ‘‘cost and performance goals’’ means the cost 
and performance goals established under section 
101(a). 
(2) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
TITLE I—CLEAN COAL GENERA-
TION, 
FEEDSTOCKS, 
AND 
TRANSPORTATION 
SEC. 101. COAL AND RELATED PROGRAMS. 
(a) ESTABLISHMENT OF COST AND PERFORMANCE 
GOALS.—
(1) IN GENERAL.—The Secretary shall perform 
an assessment that identifies cost and performance 
goals, for achievement in 2007, 2015, and the years 
after 2020, for technologies that would permit the 
continued cost-competitive use of coal for electricity 
generation, as chemical feedstocks, and as transpor-
tation fuel. 
(2) CONSULTATION.—In establishing the cost 
and performance goals under this subsection, the 
Secretary shall—
(A) consider activities and studies under-
taken by industry in cooperation with the De-
partment of Energy in support of the assess-
ment performed under paragraph (1); and 
(B) consult with interested entities, includ-
ing coal producers, industries using coal, orga-
nizations to promote coal and advanced coal 
technologies, environmental organizations, and 
organizations representing workers. 
(3) TIMING.—The Secretary shall—
(A) not later than 120 days after the date 
of enactment of this Act, issue a set of draft 
cost and performance goals for public comment; 
and 
(B) not later than 180 days after the date 
of enactment of this Act, after taking into con-
sideration any public comments received, trans-
mit to Congress the final cost and performance 
goals. 
(b) STUDY.—
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, and once every 2 
years thereafter through 2016, the Secretary, in co-
operation with other appropriate Federal agencies, 
shall conduct and transmit to the Congress a study 
to—
(A) identify technologies that, by them-
selves or in combination with other tech-
nologies, may be capable of achieving the cost 
and performance goals; 
(B) assess the costs that would be incurred 
by, and the period of time that would be re-
quired for, the deployment of technologies that, 
by themselves or in combination with other 
technologies, contribute to the achievement of 
the cost and performance goals; 
(C) develop recommendations for tech-
nology programs, which the Department of En-
ergy could carry out in cooperation with indus-
try, by themselves or in combination with other 
technologies, to achieve the cost and perform-
ance goals; and 
(D) develop recommendations for addi-
tional authorities required to achieve the cost 
and performance goals and review and rec-
ommend changes, if any, to those cost and per-
formance goals if the Secretary determines that 
such changes are necessary. 
(2) EXPERT ADVICE.—In carrying out this sub-
section, the Secretary shall give due weight to the
expert advice of representatives of the entities de-
scribed in subsection (a)(2)(B). 
SEC. 102. PRODUCTION AND GENERATION OF COAL-BASED 
POWER. 
(a) IN GENERAL.—The Secretary shall carry out a 
program to facilitate production and generation of coal-
based power through methods and equipment under—
(1) this title; 
(2) the Federal Nonnuclear Energy Research 
and Development Act of 1974 (42 U.S.C. 5901 et 
seq.); 
(3) the Energy Reorganization Act of 1974 (42 
U.S.C. 5801 et seq.); and 
(4) title XVI of the Energy Policy Act of 1992 
(42 U.S.C. 13381 et seq.). 
(b) CONDITIONS.—The program described in sub-
section (a) shall be designed to achieve the cost and per-
formance goals. 
SEC. 103. AUTHORIZATION OF APPROPRIATIONS. 
(a) IN GENERAL.—There are authorized to be appro-
priated to the Secretary $200,000,000 for fiscal year 
2005, 
$210,000,000 
for 
fiscal 
year 
2006, 
and 
$220,500,000 for fiscal year 2007, to remain available 
until expended, for carrying out the program under section 
102, which may include—
(1) innovations for existing plants; 
(2) integrated gasification combined cycle; 
(3) advanced combustion systems; 
(4) turbines for synthesis gas derived from coal; 
(5) carbon capture and sequestration; 
(6) coal-derived transportation fuels and chemi-
cals; 
(7) solid fuels and feedstocks; 
(8) advanced coal-related projects; and 
(9) advanced separation technologies. 
(b) LIMIT ON USE OF FUNDS.—The Secretary shall 
not use funds appropriated under this section until 30 
days after the Secretary has transmitted to the Congress 
a report describing the proposed use of such funds and 
containing a plan that includes—
(1) a detailed description of how proposals, if 
any, will be solicited and evaluated, including a list 
of all activities expected to be undertaken; 
(2) a detailed list of technical milestones for 
each coal and related technology that will be pur-
sued; and 
(3) a description of how the programs for which 
such funds are authorized will be carried out so as 
to complement and not duplicate activities author-
ized under the Clean Coal Power Initiative author-
ized under title II. 
TITLE II—CLEAN COAL POWER 
INITIATIVE 
SEC. 201. PROJECT CRITERIA. 
(a) IN GENERAL.—The Secretary shall provide fund-
ing under this title for coal energy generation projects that 
advance efficiency, environmental performance, and cost 
competitiveness well beyond the level of technologies that 
on a full scale are in operation or have been demonstrated 
as of the date of enactment of this Act. 
(b) TECHNICAL CRITERIA FOR CLEAN COAL POWER 
INITIATIVE.—
(1) GASIFICATION.—
(A) TECHNOLOGIES.—In allocating the 
funds made available under section 204(a), the 
Secretary shall ensure that up to 80 percent of 
the funds are used for coal-based gasification 
technologies, including gasification combined 
cycle, gasification fuel cells, gasification co-
production, and hybrid gasification/combustion 
projects. 
(B) TECHNICAL
MILESTONES.—The Sec-
retary shall set technical milestones specifying 
emissions levels for projects funded under this
paragraph. The milestones shall be designed to 
increasingly restrict emissions levels through 
the life of the program. The milestones shall be 
designed to achieve by 2020 coal gasification 
projects able—
(i) to remove 99 percent of sulfur di-
oxide; 
(ii) to emit no more than .05 lb of 
NOX per million Btu; 
(iii) to achieve substantial reductions 
in mercury emissions; and 
(iv) to achieve a thermal efficiency 
of—
(I) 60 percent for coal of more 
than 9,000 Btu; 
(II) 59 percent for coal of 7,000 
to 9,000 Btu; and 
(III) 50 percent for coal of less 
than 7,000 Btu. 
(2) OTHER PROJECTS.—For projects not de-
scribed in paragraph (1), the Secretary shall set 
technical milestones specifying emissions levels. The 
milestones shall be designed to increasingly restrict 
emissions levels through the life of the program. The
milestones shall be designed to achieve by 2010 
projects able—
(A) to remove 97 percent of sulfur dioxide; 
(B) to emit no more than .08 lb of NOX 
per million Btu; 
(C) to achieve substantial reductions in 
mercury emissions; and 
(D) except as provided in paragraph (4), 
to achieve a thermal efficiency of—
(i) 45 percent for coal of more than 
9,000 Btu; 
(ii) 44 percent for coal of 7,000 to 
9,000 Btu; and 
(iii) 40 percent for coal of less than 
7,000 Btu. 
(3) CONSULTATION.—Before setting the tech-
nical milestones under paragraphs (1)(B) and (2), 
the Secretary shall consult with the Administrator of 
the Environmental Protection Agency and interested 
entities, including coal producers, industries using 
coal, organizations to promote coal or advanced coal 
technologies, environmental organizations, and orga-
nizations representing workers. 
(4) EXISTING UNITS.—In the case of projects 
at coal-powered electricity generating facilities exist-
ing as of the date of enactment of this Act, in lieu 
of the thermal efficiency requirements set forth in 
paragraph (1)(B)(iv) and (2)(D), the projects shall 
be designed to achieve an overall thermal efficiency 
improvement, compared to the efficiency of the unit 
as of the date of enactment of this Act, of not less 
than—
(A) 7 percent for coal of more than 9,000 
Btu; 
(B) 6 percent for coal of 7,000 to 9,000 
Btu; and 
(C) 4 percent for coal of less than 7,000 
Btu. 
(5) PERMITTED USES.—In allocating amounts 
made available under this title, the Secretary may 
fund projects that include as part of the project the 
separation and capture of carbon dioxide. 
(c) FINANCIAL CRITERIA.—The Secretary shall not 
provide a funding award under this title unless the recipi-
ent has documented to the satisfaction of the Secretary 
that—
(1) the award recipient is financially viable 
without the receipt of additional Federal funding; 
(2) the recipient will provide sufficient informa-
tion to the Secretary for the Secretary to ensure
that the award funds are spent efficiently and effec-
tively; and 
(3) a market exists for the technology, as evi-
denced by statements of interest in writing from po-
tential purchasers of the technology. 
(d) FINANCIAL ASSISTANCE.—The Secretary shall 
provide financial assistance to projects that meet the re-
quirements of subsections (a), (b), and (c) and are likely 
to—
(1) achieve overall cost reductions in the utiliza-
tion of coal to generate useful forms of energy; 
(2) improve the competitiveness of coal among 
various forms of energy in order to maintain a diver-
sity of fuel choices in the United States to meet elec-
tricity generation requirements; and 
(3) demonstrate methods and equipment that 
are applicable to 25 percent of the electricity gener-
ating facilities that use coal as the primary feedstock 
as of the date of the enactment of this Act. 
(e) FEDERAL SHARE.—The Federal share of the cost 
of a project funded under this title shall not exceed 50 
percent. 
(f) APPLICABILITY.—No technology, or level of emis-
sion reduction, shall be treated as adequately dem-
onstrated for purposes of section 111 of the Clean Air Act,
achievable for purposes of section 169 of that Act, or 
achievable in practice for purposes of section 171 of that 
Act solely by reason of the use of such technology, or the 
achievement of such emission reduction, by one or more 
facilities receiving assistance under this title. 
SEC. 202. REPORT. 
Not later than 1 year after the date of the enactment 
of this Act, and once every 2 years thereafter through 
2012, the Secretary, in consultation with other appro-
priate Federal agencies, shall transmit to the Congress a 
report describing—
(1) the technical milestones set forth in section 
201 and how those milestones ensure progress to-
ward meeting the requirements of subsections 
(b)(1)(B) and (b)(2) of section 201; and 
(2) the status of projects funded under this 
title. 
SEC. 203. CLEAN COAL CENTERS OF EXCELLENCE. 
As part of the program authorized under this title, 
the Secretary shall award competitive, merit-based grants 
to universities for the establishment of Centers of Excel-
lence for Energy Systems of the Future. The Secretary 
shall provide grants to universities that can show the 
greatest potential for advancing new clean coal tech-
nologies.
SEC. 204. AUTHORIZATION OF APPROPRIATIONS. 
(a) CLEAN COAL POWER INITIATIVE.—Except as 
provided in subsection (b), there are authorized to be ap-
propriated to the Secretary to carry out the activities au-
thorized by this title $200,000,000 for each of the fiscal 
years 2005 through 2013, to remain available until ex-
pended. 
(b) LIMIT ON USE OF FUNDS.—
(1) OBLIGATION OF FUNDS.—The Secretary is 
authorized to obligate the use of funds under this 
section prior to the fiscal year such funds are au-
thorized for under subsection (a), subject to appro-
priations. 
(2) REPORT.—The Secretary shall transmit to 
the Congress a report describing the proposed use of 
funds which includes—
(A) a detailed assessment of whether the 
aggregate funding levels provided under sub-
section (a) are the appropriate funding levels 
for this title; 
(B) a detailed description of how proposals 
will be solicited and evaluated, including a list 
of all activities expected to be undertaken; 
(C) a detailed list of technical milestones 
for each technology that will be pursued; and
(D) a detailed description of how the ini-
tiative under this title will avoid problems enu-
merated in General Accounting Office reports 
on the Clean Coal Technology Program, includ-
ing problems that have resulted in unspent 
funds and projects that failed either financially 
or scientifically. 
(3) USE OF FUNDS.—The Secretary may not 
use funds appropriated under this section until 30 
days have elapsed after receipt of the report under 
paragraph (2). 
(c) APPLICABILITY.—Subsection (b) shall not apply 
to any project selected before September 30, 2004.
TITLE III—CONSERVATION 
SEC. 301. CREDIT FOR PRODUCTION FROM A QUALIFYING 
CLEAN COAL TECHNOLOGY UNIT. 
(a) CREDIT FOR PRODUCTION FROM A QUALIFYING 
CLEAN COAL TECHNOLOGY UNIT.—Subpart D of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
of 1986 (relating to business related credits) is amended 
by adding at the end the following new section: 
‘‘SEC. 45G. 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 applicable percentage of the kilowatt 
hours of electricity produced and the equivalent heat 
value of other fuels or chemicals produced by the 
taxpayer during such taxable year at a qualifying 
clean coal technology unit, but only if such produc-
tion occurs during the 10-year period beginning on 
the date the unit was returned to service after be-
coming a qualifying clean coal technology unit. 
‘‘(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 per kilowatt-
hour of electricity produced and the equivalent heat 
value of other fuels or chemicals produced from not 
more than 300,000 kilowatts of nameplate capacity 
at the same qualifying clean coal technology unit. 
‘‘(2) INFLATION
ADJUSTMENT.—For calendar 
years after 2004, the applicable amount of clean coal 
technology production credit 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 increased under the pre-
ceding sentence is not a multiple of 0.01 cent, such 
amount shall be rounded to the nearest multiple of 
0.01 cent. 
‘‘(c) APPLICABLE PERCENTAGE.—For purposes of 
this section, with respect to any qualifying clean coal tech-
nology unit, the applicable percentage is the percentage 
equal to the ratio which the portion of the national mega-
watt capacity limitation allocated to the taxpayer with re-
spect to such unit under subsection (e) bears to the total 
megawatt capacity of such unit. 
‘‘(d) 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 clean coal technology unit of the tax-
payer which—
‘‘(A) on the date of the enactment of this 
section was a coal-based electricity generating 
steam generator-turbine unit which was not a 
clean coal technology unit, 
‘‘(B) has a nameplate capacity rating of 
300,000 kilowatts as of the date of enactment 
of this section,
‘‘(C) becomes a clean coal technology unit 
as the result of the retrofitting, repowering, or 
replacement of the unit with clean coal tech-
nology, the nameplate capacity of which may 
then be greater than 300,000 kilowatts, during 
the 10-year period beginning on the date of the 
enactment of this section, 
‘‘(D) is not receiving nor is scheduled to 
receive funding under the Clean Coal Tech-
nology Program, the Power Plant Improvement 
Initiative, or the Clean Coal Power Initiative 
administered by the Secretary of Energy, and 
(E) receives an allocation of a portion of the 
national megawatt capacity limitation under 
subsection (e), which shall not exceed 300,000 
kilowatts. 
‘‘(2) CLEAN
COAL
TECHNOLOGY
UNIT.—The 
term ‘clean coal technology unit’ means a unit 
which—
‘‘(A) uses clean coal technology, including 
advanced pulverized coal or atmospheric fluid-
ized bed combustion, pressurized fluidized bed 
combustion, integrated gasification combined 
cycle, or any other technology for the produc-
tion of electricity,
‘‘(B) uses at least 75 percent coal to 
produce 50 percent or more of its thermal out-
put as electricity, 
‘‘(C) has a design net heat rate of at least 
500 less than that of such unit as described in 
paragraph (1)(A), 
‘‘(D) has a maximum design net heat rate 
of not more than 9,500, and 
‘‘(E) meets the pollution control require-
ments of paragraph (3). 
‘‘(3) POLLUTION CONTROL REQUIREMENTS.—
‘‘(A) IN GENERAL.—A unit meets the re-
quirements of this paragraph if—
‘‘(i) its emissions of sulfur dioxide, ni-
trogen oxide, or particulates meet the 
lower of the emission levels for each such 
emission specified in—
‘‘(I) subparagraph (B), or 
‘‘(II) the new source performance 
standards of the Clean Air Act (42 
U.S.C. 7411) which are in effect for 
the category of source at the time of 
the retrofitting, repowering, or re-
placement of the unit, and
‘‘(ii) its emissions do not exceed any 
relevant emission level specified by regula-
tion pursuant to the hazardous air pollut-
ant requirements of the Clean Air Act (42 
U.S.C. 7412) in effect at the time of the 
retrofitting, repowering, or replacement. 
‘‘(B) SPECIFIC LEVELS.—The levels speci-
fied in this subparagraph are—
‘‘(i) in the case of sulfur dioxide emis-
sions, 50 percent of the sulfur dioxide 
emission levels specified in the new source 
performance standards of the Clean Air 
Act (42 U.S.C. 7411) in effect on the date 
of the enactment of this section for the 
category of source, 
‘‘(ii) in the case of nitrogen oxide 
emissions—
‘‘(I) 0.1 pound per million Btu of 
heat input if the unit is not a cyclone-
fired boiler, and 
‘‘(II) if the unit is a cyclone-fired 
boiler, 15 percent of the uncontrolled 
nitrogen oxide emissions from such 
boilers, and
‘‘(iii) in the case of particulate emis-
sions, 0.02 pound per million Btu of heat 
input. 
‘‘(4) DESIGN NET HEAT RATE.—The design net 
heat rate with respect to any unit, measured in Btu 
per kilowatt hour (HHV)—
‘‘(A) shall be based on the design annual 
heat input to and the design annual net elec-
trical power, fuels and chemicals output from 
such unit (determined without regard to such 
unit’s co-generation of steam), 
‘‘(B) shall be adjusted for the heat content 
of the design coal to be used by the unit if it 
is less than 12,000 Btu per pound according to 
the following formula:
Design net heat rate = unit net heat rate × [1 – {(12,000 – design coal 
heat contents, Btu per pound) × .001) × .013}]
‘‘(C) shall be corrected for the site ref-
erence conditions of—
‘‘(i) elevation above sea level of 500 
feet, 
‘‘(ii) air pressure of 14.4 pounds per 
square inch absolute (psia), 
‘‘(iii) temperature, dry bulb of 63°F,
‘‘(iv) temperature, wet bulb of 54°F, 
and
‘‘(v) relative humidity of 55 percent; 
and 
‘‘(D) shall be adjusted (or credit given) for 
any qualifying unit that installs carbon capture 
controls that remove not less than 50 percent of 
the unit’s carbon dioxide emissions up to the 
design heat rate level that would have resulted 
without installation of carbon capture controls. 
‘‘(5) HHV.—The term ‘HHV’ means higher 
heating value. 
‘‘(6) APPLICATION OF CERTAIN RULES.—The 
rules of paragraphs (3), (4), and (5) of section 45(d) 
shall apply. 
‘‘(7) INFLATION ADJUSTMENT FACTOR.—
‘‘(A) IN
GENERAL.—The term ‘inflation 
adjustment factor’ means, with respect to a cal-
endar year, a fraction the numerator of which 
is the GDP implicit price deflator for the pre-
ceding calendar year and the denominator of 
which is the GDP implicit price deflator for the 
calendar year 2003. 
‘‘(B) 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 com-
puted by the Department of Commerce before 
March 15 of the calendar year. 
‘‘(8) 
NONCOMPLIANCE
WITH
POLLUTION 
LAWS.—For purposes of this section, a unit which is 
not in compliance with the applicable State and Fed-
eral pollution prevention, control, and permit re-
quirements for any period of time shall not be con-
sidered to be a qualifying clean coal technology unit 
during such period. 
‘‘(e) NATIONAL LIMITATION ON THE AGGREGATE CA-
PACITY
OF
QUALIFYING
CLEAN
COAL
TECHNOLOGY 
UNITS.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(d)(1)(E), the national megawatt capacity limitation 
for qualifying clean coal technology units is 5,000 
megawatts. 
‘‘(2) ALLOCATION OF LIMITATION.—The Sec-
retary shall allocate the national megawatt capacity 
limitation for qualifying clean coal technology units 
in such manner as the Secretary may prescribe 
under the regulations under paragraph (3) provided 
however that such allocation shall not exceed 
300,000 kilowatts per qualifying clean coal tech-
nology unit.
‘‘(3) REGULATIONS.—Not later than 6 months 
after the date of the enactment of this section, the 
Secretary shall prescribe such regulations as may be 
necessary or appropriate—
‘‘(A) to carry out the purposes of this sub-
section, 
‘‘(B) to limit the capacity of any qualifying 
clean coal technology unit to which this section 
applies so that the combined megawatt capacity 
allocated to all such units under this subsection 
when all such units are placed in service during 
the 10-year period described in subsection 
(d)(1)(C), does not exceed 5,000 megawatts, 
‘‘(C) to provide a certification process 
under which the Secretary, in consultation with 
the Secretary of Energy, shall approve and allo-
cate the national megawatt capacity limita-
tion—
‘‘(i) to encourage that units with the 
highest thermal efficiencies, when adjusted 
for the heat content of the design coal and 
site reference conditions described in sub-
section (d)(4)(C), and environmental per-
formance be placed in service as soon as 
possible,
‘‘(ii) to allocate capacity to taxpayers 
that have a definite and credible plan for 
placing into commercial operation a quali-
fying clean coal technology unit, includ-
ing—
‘‘(I) a site, 
‘‘(II) contractual commitments 
for procurement and construction or, 
in the case of regulated utilities, the 
agreement of the State utility commis-
sion, 
‘‘(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 determines are appropriate, 
‘‘(D) to allocate the national megawatt ca-
pacity limitation to a portion of the capacity of 
a qualifying clean coal technology unit if the 
Secretary determines that such an allocation 
would maximize the amount of efficient produc-
tion encouraged with the available tax credits,
‘‘(E) to set progress requirements and con-
ditional approvals so that capacity allocations 
for clean coal technology units that become un-
likely to meet the necessary conditions for 
qualifying can be reallocated by the Secretary 
to other clean coal technology units, and 
‘‘(F) 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 dis-
covery, taking into account the availability of 
regulations and other administrative guidance 
from the Secretary.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of such Code is amended by striking ‘‘plus’’ 
at the end of paragraph (14), by striking the period at 
the end of paragraph (15) and inserting ‘‘, plus’’, and by 
adding at the end the following new paragraph: 
‘‘(16) the qualifying clean coal technology pro-
duction credit determined under section 45G(a).’’. 
(c) TRANSITIONAL RULE.—Section 39(d) of such 
Code (relating to transitional rules) is amended by adding 
at the end the following new paragraph:
‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is 
attributable to the qualifying clean coal technology 
production credit determined under section 45G may 
be carried back to a taxable year ending on or before 
the date of the enactment of section 45G.’’. 
(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 adding at the end the fol-
lowing new item:
‘‘Sec. 45G. Credit for production from a qualifying clean coal 
technology unit.’’.
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to production after December 31, 
2003. 
SEC. 302. CREDIT FOR INVESTMENT IN QUALIFYING AD-
VANCED CLEAN COAL TECHNOLOGY. 
(a) ALLOWANCE OF QUALIFYING ADVANCED CLEAN 
COAL TECHNOLOGY FACILITY CREDIT.—Section 46 of 
the Internal Revenue Code of 1986 (relating to amount 
of credit) is amended by striking ‘‘and’’ at the end of para-
graph (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 advanced clean coal tech-
nology facility credit.’’.
(b) AMOUNT
OF QUALIFYING ADVANCED CLEAN 
COAL TECHNOLOGY FACILITY CREDIT.—Subpart E of 
part IV of subchapter A of chapter 1 of such Code (relat-
ing to rules for computing investment credit) is amended 
by inserting after section 48 the following: 
‘‘SEC. 48A. 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.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the term ‘qualifying advanced clean coal tech-
nology facility’ means a facility of the taxpayer—
‘‘(A)(i)(I) the original use of which com-
mences with the taxpayer, or 
‘‘(II) which is a retrofitted or repowered 
conventional 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) which is acquired through purchase 
(as defined by section 179(d)(2)), 
‘‘(B) which is depreciable under section 
167, 
‘‘(C) which has a useful life of not less 
than 4 years, 
‘‘(D) which is located in the United States, 
and 
‘‘(E) which 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—
‘‘(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 prop-
erty 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 les-
sor of such property make an election under this 
sentence. Such an election, once made, may be re-
voked only with the consent of the Secretary. 
‘‘(c) QUALIFYING ADVANCED CLEAN COAL TECH-
NOLOGY.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualifying ad-
vanced clean coal technology’ means, with respect to 
clean coal, technology—
‘‘(A) which has—
‘‘(i) multiple applications, with a com-
bined capacity of not more than 1,500 
megawatts (750 megawatts before 2011), 
of advanced pulverized coal or atmospheric 
fluidized bed combustion technology—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2002 and 
2014, and 
‘‘(III) having a design net heat 
rate of not more than 8,900 Btu per 
kilowatt hour, 
‘‘(ii) multiple applications, with a 
combined capacity of not more than 500 
megawatts (250 megawatts before 2011),
of pressurized fluidized bed combustion 
technology—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2002 and 
2018, and 
‘‘(III) having a design net heat 
rate of not more than 8,900 Btu per 
kilowatt hour, and 
‘‘(iii) multiple applications, with a 
combined capacity of not more than 2,500 
megawatts (750 megawatts, or no more 
than one project with a heat rate greater 
than 8,900 Btu, whichever is less, in the 
case of units placed in service before 2011 
and 1,500 megawatts before 2015), of in-
tegrated gasification combined cycle tech-
nology, with or without fuel or chemical co-
production—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2002 and 
2018,
‘‘(III) having a design net heat 
rate of not more than 8,900 Btu per 
kilowatt hour, and 
‘‘(IV) having a net thermal effi-
ciency on any fuel or chemical co-pro-
duction of not less than 39 percent 
(higher heating value), or 
‘‘(iv) multiple applications, with a 
combined capacity of not more than 500 
megawatts (250 megawatts before 2011) 
of technology for the production of elec-
tricity—
‘‘(I) installed as a new, retrofit, 
or repowering application, 
‘‘(II) operated between 2002 and 
2018, and 
‘‘(III) having a carbon emission 
rate which is not more than 85 per-
cent of conventional technology, and 
‘‘(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, 
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 
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 with respect to any unit, measured in Btu per kilo-
watt hour (HHV)—
‘‘(1) shall be based on the design annual heat 
input to and the design annual net electrical power, 
fuels and chemicals output from such unit (deter-
mined without regard to such unit’s co-generation of 
steam), 
‘‘(2) shall be adjusted for the heat content of 
the design coal to be used by the unit if it is less 
than 12,000 Btu per pound according to the fol-
lowing formula:
Design net heat rate = unit net heat rate × [1 – {((12,000 – design coal 
heat contents, Btu per pound) × .001) × .013}]
‘‘(3) shall be corrected for the site reference 
conditions of—
‘‘(A) elevation above sea level of 500 feet, 
‘‘(B) air pressure of 14.4 pounds per 
square inch absolute (psia),
‘‘(C) temperature, dry bulb of 63°F, 
‘‘(D) temperature, wet bulb of 54°F, and 
‘‘(E) relative humidity of 55 percent; and 
‘‘(4) shall be adjusted (or credit given) for any 
qualifying unit that installs carbon capture controls 
that remove not less than 50 percent of the unit’s 
carbon dioxide emissions up to the design heat rate 
level that would have resulted without installation of 
carbon capture controls . 
‘‘(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-
ciency, environmental performance, and lowest cost 
to the government, 
‘‘(3) shall include criteria for the selection of a 
unit(s) that achieves a thermal efficiency of greater 
than 8,900 Btu in that instance where two or more 
projects are otherwise eligible for the credit provided 
by this section, and have applied to the Secretary for 
selection at or near the same period in time, and
‘‘(4) 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 
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. 
‘‘(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-
ergy credit under section 48 is allowed unless the taxpayer 
elects to waive the application of such credit to such prop-
erty.
‘‘(k) TERMINATION.—This section shall not apply 
with respect to any qualified investment made after De-
cember 31, 2011. 
‘‘(l) NATIONAL LIMITATION.—
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this section, the term ‘qualifying ad-
vanced clean coal technology facility’ shall include 
such a facility only to the extent that such facility 
is allocated a portion of the national megawatt limi-
tation under this subsection. 
‘‘(2) NATIONAL MEGAWATT LIMITATION.—The 
national megawatt limitation under this subsection 
is 5,000 megawatts. 
‘‘(3) ALLOCATION
OF
LIMITATION.—The na-
tional megawatt limitation shall be allocated by the 
Secretary under rules prescribed by the Secretary. 
Not later than 6 months after the date of the enact-
ment of this subsection, the Secretary shall prescribe 
such regulations as may be necessary or appropriate 
to carry out the purposes of this section, including 
regulations—
‘‘(A) to limit which facility qualifies as 
‘qualified advanced clean coal technology’ in 
subsection (c) to particular facilities, a portion 
of particular facilities, or a portion of the pro-
duction from particular facilities, so that when 
all such facilities (or portions thereof) are 
placed in service over the ten year period in 
subsection (k), the combination of facilities ap-
proved for tax credits (and/or portions of facili-
ties approved for tax credits) will not exceed a 
combined capacity of 5,000 megawatts; 
‘‘(B) to provide a certification process in 
consultation with the Secretary of Energy 
under subsection (g) that will approve and allo-
cate the 5,000 megawatts of available tax cred-
its authority—
‘‘(i) to encourage that facilities with 
the highest thermal efficiencies and envi-
ronmental performance be placed in service 
as soon as possible; 
‘‘(ii) to allocate credits to taxpayers 
that have a definite and credible plan for 
placing into commercial operation a quali-
fying advanced clean coal technology facil-
ity, including—
‘‘(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 
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) of such Code (relat-
ing to other special rules) is amended by adding at the 
end the following: 
‘‘(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 
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-
spect to the credit allowed under section 38 re-
garding a qualifying advanced clean coal tech-
nology facility.’’.
(d) TRANSITIONAL RULE.—Section 39(d) of such 
Code (relating to transitional rules) is amended by adding 
at the end the following: 
‘‘(12) 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, 2004.’’. 
(e) TECHNICAL AMENDMENTS.—
(1) Section 49(a)(1)(C) of such Code is amend-
ed by striking ‘‘and’’ at the end of clause (ii), by 
striking the period at the end of clause (iii) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing: 
‘‘(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(h)).’’. 
(2) Section 50(a)(4)of such Code is amended by 
striking ‘‘and (2)’’ and inserting ‘‘, (2), and (6)’’. 
(3) Section 50(c) of such Code 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 of such Code is 
amended by inserting after the item relating to sec-
tion 48 the following:
‘‘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, 
2003, 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 the enactment of the Revenue Rec-
onciliation Act of 1990). 
SEC. 303. 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 of the Internal Rev-
enue Code of 1986 (relating to business related credits) 
is amended by adding after section 45G the following:
‘‘SEC. 45H. 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 2011, if—
‘‘The facility design net heat rate, Btu/kWh 
(HHV) is: 
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 8,750 ............
$.0025
$.0010
More than 8,750 but not more than 8,900 ............
$.0010
$.0010. 
‘‘(B) In the case of a facility originally 
placed in service after 2010 and before 2015, 
if—
‘‘The facility design net heat rate, Btu/kWh 
(HHV) is: 
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 2014 and before 2019, 
if—
‘‘The facility design net heat rate, Btu/kWh 
(HHV) is: 
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 2011, if—
‘‘The facility design net heat rate, Btu/kWh 
(HHV) is: 
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 8,750 ............
$.0025
$.0010
More than 8,750 but not more than 9,000 ............
$.0010
$.0010. 
‘‘(B) In the case of a facility originally 
placed in service after 2010 and before 2015, 
if—
‘‘The facility design net heat rate, Btu/kWh 
(HHV) is: 
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 2014 and before 2019, 
if—
‘‘The facility design net heat rate, Btu/kWh 
(HHV) is: 
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 2011, if—
‘‘The facility design net thermal efficiency (HHV) 
is: 
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 2010 and before 2015, 
if—
‘‘The facility design net thermal efficiency (HHV) 
is: 
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
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 2014 and before 2019, 
if—
‘‘The facility design net thermal efficiency (HHV) 
is: 
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) A qualifying clean coal technology facility origi-
nally placed in service before 2009 that has a design heat 
rate that meets a lower heat rate test in paragraphs 
(1)(A), (B) and (C), (2)(A), (B) and (C), or (3)(A), (B) 
and (C) of subsection (b), or a qualifying clean coal tech-
nology facility originally placed in service before 2013 that 
has a design heat rate that meets a lower heat rate test 
in paragraphs (1)(C), (2)(C), or (3)(C) of subsection (b), 
shall receive the highest applicable amount with respect 
to a production tax credit for which it qualifies. 
‘‘(d) INFLATION ADJUSTMENT FACTOR.—For cal-
endar years after 2004, 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. 
‘‘(e) 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. 
‘‘(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 2003. 
‘‘(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) of such Code is amended by striking ‘‘plus’’ 
at the end of paragraph (15), by striking the period at
the end of paragraph (16) and inserting ‘‘, plus’’, and by 
adding at the end the following: 
‘‘(17) the qualifying advanced clean coal tech-
nology production credit determined under section 
45K(a).’’. 
(c) TRANSITIONAL RULE.—Section 39(d) of such 
Code (relating to transitional rules) is amended by adding 
after paragraph (12) the following: 
‘‘(13) 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 45H may be carried back to a taxable year end-
ing before the date of the enactment of section 
45H.’’. 
(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 adding at the end the fol-
lowing:
‘‘Sec. 45H. Credit for production from qualifying advanced clean 
coal technology.’’.
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to production in taxable years be-
ginning after December 31, 2003. 
SEC. 304. TREATMENT OF PERSONS NOT ABLE TO USE EN-
TIRE CREDIT RELATING TO CLEAN COAL 
TECHNOLOGY. 
(a) IN GENERAL.—Section 45G of the Internal Rev-
enue Code of 1986, as added by this Act, is amended by 
adding at the end the following new subsection: 
‘‘(f) TREATMENT OF PERSON NOT ABLE TO USE 
ENTIRE CREDIT.—
‘‘(1) ALLOWANCE OF CREDITS.—
‘‘(A) IN GENERAL.—Any credit allowable 
under this section, section 45H, or section 48A 
with respect to a facility owned by a person de-
scribed in subparagraph (B) may be transferred 
or used as provided in this subsection, and the 
determination as to whether the credit is allow-
able shall be made without regard to the tax-
exempt status of the person. 
‘‘(B) PERSONS DESCRIBED.—A person is 
described in this subparagraph if the person 
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) a public utility (as defined in 
section 136(c)(2)(B)), 
‘‘(iv) any State or political subdivision 
thereof, the District of Columbia, or any 
agency or instrumentality of any of the 
foregoing, 
‘‘(v) any Indian tribal government 
(within the meaning of section 7871) or 
any agency or instrumentality thereof, or 
‘‘(vi) the Tennessee Valley Authority. 
‘‘(2) TRANSFER OF CREDIT.—
‘‘(A) IN GENERAL.—A person described in 
clause (i), (ii), (iii), (iv), or (v) of paragraph 
(1)(B) may transfer any credit to which para-
graph (1)(A) applies through an assignment to
any other person not described in paragraph 
(1)(B). 
Such transfer may be revoked only with the consent 
of the Secretary. 
‘‘(B) REGULATIONS.—The Secretary shall 
prescribe such regulations as necessary to in-
sure that any credit described in subparagraph 
(A) is claimed once and not reassigned by such 
other person. 
‘‘(C) TRANSFER
PROCEEDS
TREATED
AS 
ARISING FROM ESSENTIAL GOVERNMENT FUNC-
TION.—Any proceeds derived by a person de-
scribed in clause (iii), (iv), or (v) of paragraph 
(1)(B) from the transfer of any credit under 
subparagraph (A) shall be treated as arising 
from the exercise of an essential government 
function. 
‘‘(3) USE BY TVA.—
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, in the case of a person 
described in paragraph (1)(B)(vi), any credit to 
which paragraph (1)(A) applies may be applied 
as a credit against the payments required to be 
made in any fiscal year under section 15d(e) of 
the Tennessee Valley Authority Act of 1933 (16
U.S.C. 831n–4(e)) as an annual return on the 
appropriations investment and an annual repay-
ment sum. 
‘‘(B) TREATMENT OF CREDITS.—The ag-
gregate amount of credits described in para-
graph (1)(A) with respect to such person shall 
be treated in the same manner and to the same 
extent as if such credits were a payment in cash 
and shall be applied first against the annual re-
turn on the appropriations investment. 
‘‘(C) CREDIT
CARRYOVER.—With respect 
to any fiscal year, if the aggregate amount of 
credits described paragraph (1)(A) with respect 
to such person exceeds the aggregate amount of 
payment obligations described in subparagraph 
(A), the excess amount shall remain available 
for application as credits against the amounts 
of such payment obligations in succeeding fiscal 
years in the same manner as described in this 
paragraph. 
‘‘(4) CREDIT
NOT
INCOME.—Any transfer 
under paragraph (2) of any credit to which para-
graph (1)(A) applies shall not be treated as income 
for purposes of section 501(c)(12).
‘‘(5) TREATMENT OF UNRELATED PERSONS.—
For purposes of this subsection, sales among and be-
tween persons described in clauses (i), (ii), (iii), (iv), 
and (v) of paragraph (1)(A) shall be treated as sales 
between unrelated parties.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to production after December 31, 
2003.
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