I
107TH CONGRESS
1ST SESSION
H. R. 2323
To authorize Department of Energy programs to develop and implement
an accelerated research and development program for advanced clean
coal technologies for use in coal-based electricity generating facilities
and to amend the Internal Revenue Code of 1986 to provide financial
incentives to encourage new construction and the retrofitting, repowering,
or replacement of coal-based electricity generating facilities to protect
the environment and improve efficiency and encourage the early commer-
cial application of advanced clean coal technologies, so as to allow coal
to help meet the growing need to the United States for the generation
of reliable and affordable electricity.
IN THE HOUSE OF REPRESENTATIVES
JUNE 26, 2001
Mr. WHITFIELD (for himself, Mr. BOUCHER, Mr. SHIMKUS, Mr. MOLLOHAN,
Mrs. CAPITO, Mr. COSTELLO, Mr. LEWIS of Kentucky, Mr. PHELPS, Ms.
HART, Mr. STRICKLAND, Mr. DOYLE, Mr. TIBERI, and Mr. ROGERS of
Kentucky) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Science,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of the
committee concerned
A BILL
To authorize Department of Energy programs to develop
and implement an accelerated research and development
program for advanced clean coal technologies for use
in coal-based electricity generating facilities and to
amend the Internal Revenue Code of 1986 to provide
financial incentives to encourage new construction and
the retrofitting, repowering, or replacement of coal-based
electricity generating facilities to protect the environment
and improve efficiency and encourage the early commer-
cial application of advanced clean coal technologies, so
as to allow coal to help meet the growing need to the
United States for the generation of reliable and afford-
able electricity.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘National Electricity and Environmental Technology
Act’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I—TECHNOLOGY ASSESSMENT AND RESEARCH AND
DEVELOPMENT
Sec. 101. Definitions.
Sec. 102. Technology assessment.
Sec. 103. Study.
Sec. 104. Technology research and development program.
Sec. 105. Authorization of appropriations.
Sec. 106. Clean Coal Power Commercial Applications Initiative.
Sec. 107. Financial assistance.
TITLE II—CREDIT FOR EMISSION REDUCTIONS AND EFFICIENCY
IMPROVEMENTS IN EXISTING COAL-BASED ELECTRICITY GEN-
ERATION FACILITIES
Sec. 201. Credit for investment in qualifying clean coal technology.
Sec. 202. Credit for production from a qualifying clean coal technology unit.
TITLE III—INCENTIVES FOR EARLY COMMERCIAL APPLICATIONS
OF ADVANCED CLEAN COAL TECHNOLOGIES
Sec. 301. Credit for investment in qualifying advanced clean coal technology.
Sec. 302. Credit for production from qualifying advanced clean coal technology.
Sec. 303. Risk pool for qualifying advanced clean coal technology.
TITLE IV—TREATMENT OF CERTAIN GOVERNMENTAL AND
OTHER ENTITIES
Sec. 401. Credits for certain organizations and governmental units.
SEC. 2. FINDINGS.
Congress finds that—
(1) reliable, affordable, increasingly clean elec-
tricity will continue to power the growing United
States economy;
(2) an increasing use of electrotechnologies, the
desire for continuous environmental improvement, a
more competitive electricity market, and concerns
about rising energy prices add importance to the
need for reliable, affordable, increasingly clean elec-
tricity;
(3) coal, which, as of the date of enactment of
this Act, accounts for more than 1⁄2 of all electricity
generated in the United States, is the most abun-
dant fossil energy resource of the United States;
(4) coal comprises more than 85 percent of all
fossil resources in the United States and exists in
quantities sufficient to supply the United States for
250 years at current usage rates;
(5) investments in electricity generating facility
emissions control technology over the past 30 years
have reduced the aggregate emissions of pollutants
from coal-based generating facilities by 21 percent,
even as coal use for electricity generation has nearly
tripled;
(6) continuous improvement in efficiency and
environmental performance from electricity gener-
ating facilities would allow continued use of coal and
preserve less abundant energy resources for other
energy uses;
(7) new technologies for converting coal into
electricity can effectively eliminate health-threat-
ening emissions and improve efficiency by as much
as 50 percent, but initial commercial deployment of
new coal generation technologies entails significant
risk that generators may be unable to accept in a
newly competitive electricity market; and
(8) continued environmental improvement in
coal-based generation through continued research,
development, and demonstration toward an ultimate
goal of near-zero emissions is important and desir-
able.
TITLE I—TECHNOLOGY ASSESS-
MENT AND RESEARCH AND
DEVELOPMENT
SEC. 101. DEFINITIONS.
In this title:
(1) COST
AND
PERFORMANCE
GOALS.—The
term ‘‘cost and performance goals’’ means the cost
and performance goals established under section
102.
(2) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Energy.
SEC. 102. TECHNOLOGY ASSESSMENT.
(a) IN GENERAL.—The Secretary shall perform an
assessment that establishes cost and performance goals
with respect to technologies that would permit the contin-
ued cost-competitive use of coal for electricity generation,
as chemical feedstocks, and as transportation fuel in 2007,
2015, and 2020.
(b) CONSULTATION.—In establishing the cost and
performance goals, the Secretary shall consult with rep-
resentatives of—
(1) the United States coal industry;
(2) State coal development agencies;
(3) the electric utility industry;
(4) railroads and other transportation indus-
tries;
(5) manufacturers of equipment using advanced
coal technologies;
(6) organizations representing workers;
(7) organizations formed to—
(A) promote the use of coal;
(B) further the goals of environmental pro-
tection; and
(C) promote the development and use of
advanced coal technologies; and
(8) other appropriate Federal and State agen-
cies.
(c) TIMING.—The Secretary shall—
(1) 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
(2) not later than 180 days after the date of
enactment of this Act, after taking into consider-
ation any public comments received, submit to Con-
gress the final cost and performance goals.
SEC. 103. STUDY.
(a) 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 cooperation
with the Secretary of the Interior and the Administrator
of the Environmental Protection Agency, shall transmit to
the Congress a report containing the results of a study
to—
(1) identify technologies that, by themselves or
in combination with other technologies, may be capa-
ble of achieving the cost and performance goals;
(2) assess the costs that would be incurred by,
and the period of time that would be required for,
the development and demonstration of technologies
that, by themselves or in combination with other
technologies, contribute to the achievement of the
cost and performance goals;
(3) develop recommendations for technology de-
velopment programs, which the Department of En-
ergy could carry out in cooperation with industry, to
develop and demonstrate technologies that, by them-
selves or in combination with other technologies,
achieve the cost and performance goals; and
(4) develop recommendations for additional au-
thorities required to achieve the cost and perform-
ance goals.
(b) EXPERT ADVICE.—In carrying out this section,
the Secretary shall give due weight to the expert advice
of representatives of the entities described in section
102(b).
SEC. 104. TECHNOLOGY RESEARCH AND DEVELOPMENT
PROGRAM.
(a) IN GENERAL.—The Secretary shall carry out a
program of research on and development, demonstration,
and commercial application of coal-based technologies
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 XIII of the Energy Policy Act of 1992
(42 U.S.C. 13331 et seq.).
(b) CONDITIONS.—The research, development, dem-
onstration, and commercial application program described
in subsection (a) shall be designed to achieve the cost and
performance goals.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—There are authorized to be appro-
priated to the Secretary to carry out sections 102, 103,
and 104, $100,000,000 for each of the fiscal years 2002
through 2012, to remain available until expended.
(b) CONDITIONS OF AUTHORIZATION.—The author-
ization of appropriations under subsection (a)—
(1) shall be in addition to authorizations of ap-
propriations in effect on the date of enactment of
this Act; and
(2) shall not be a cap on Department of Energy
fossil energy research and development and clean
coal technology appropriations.
SEC. 106. CLEAN COAL POWER COMMERCIAL APPLICA-
TIONS INITIATIVE.
(a) IN GENERAL.—The Secretary shall establish a
clean coal power commercial applications initiative that
will demonstrate commercial applications of advanced
coal-based technologies applicable to new or existing power
plants, including coproduction plants.
(b) REQUIREMENTS.—The technologies to be dem-
onstrated under the initiative—
(1) shall be technologies that, by themselves or
in combination with other technologies, advance effi-
ciency, environmental performance, and cost com-
petitiveness well beyond that which is in operation or
has been demonstrated as of the date of enactment
of this Act; and
(2) may include technologies that have not pre-
viously been envisioned for commercial applications.
(c) PLAN.—Not later than 120 days after the date
of enactment of this Act, the Secretary shall transmit to
Congress a plan to carry out subsection (a) that includes
a description of—
(1) the program elements and management
structure to be used;
(2) the technical milestones to be achieved with
respect to each of the advanced coal-based tech-
nologies included in the plan; and
(3) the demonstration activities proposed to be
conducted at facilities that serve or are located at
new or existing coal-based electric generation units
having at least 50 megawatts nameplate rating, in-
cluding improvements to allow the units to achieve
1 or more of the following:
(A) An overall design efficiency improve-
ment of not less than 3 percent as compared
with the efficiency of the unit as operated as of
the date of enactment of this Act and before
any retrofit, repowering, replacement, or instal-
lation.
(B) A significant improvement in, or new
alternative technology to enhance, the environ-
mental performance related to the control of
sulfur dioxide, nitrogen oxide, or mercury in a
manner that is different and well below the cost
of technologies that are in operation or have
been demonstrated as of the date of enactment
of this Act.
(C) A means of recycling or reusing a sig-
nificant portion of coal combustion or gasifi-
cation wastes or byproducts produced by coal-
based generating units, excluding practices that
are commercially available as of the date of en-
actment of this Act.
(D) A means to capture, separate, and
reuse or dispose of carbon dioxide that is dif-
ferent and well below the cost of technologies
that are in operation or have been dem-
onstrated as of the date of enactment of this
Act.
SEC. 107. FINANCIAL ASSISTANCE.
(a) IN GENERAL.—Not later than 180 days after the
date on which the Secretary transmits to Congress the
plan under section 106(c), the Secretary shall solicit pro-
posals for projects that serve or are located at new or ex-
isting facilities designed to achieve 1 or more of the levels
of performance set forth in section 106(c)(3).
(b) PROJECT CRITERIA.—A solicitation under sub-
section (a) may include solicitation of a proposal for a
project to demonstrate—
(1) an overall design efficiency improvement of
not less than 3 percentage points as compared with
the efficiency of the unit as operated as of the date
of enactment of this Act and with no increase in the
potential to emit sulfur dioxide, nitrogen oxide, par-
ticulate matter, mercury, or carbon monoxide;
(2) a reduction of emissions to a level of not
more than—
(A)(i) in the case of sulfur dioxide—
(I) in the case of coal with a potential
combustion concentration sulfur emission
of 1.2 or more pounds per million British
thermal units of heat input, 5 percent of
the potential combustion concentration sul-
fur dioxide emissions; or
(II) in the case of a coal with a poten-
tial combustion concentration of less than
1.2 pounds per million British thermal
units of heat input, 15 percent of the po-
tential combustion concentration of sulfur
dioxide emissions;
(ii) in the case of nitrogen oxide—
(I) in the case of a boiler other than
a cyclone-fired boiler, emissions of 0.1
pound per million British thermal units of
heat; or
(II) in the case of a cyclone-fired boil-
er, 15 percent of the uncontrolled nitrogen
oxide emissions from the boiler; or
(iii) in the case of particulate matter, emis-
sions of 0.02 pound per million British thermal
units of heat input; or
(B) the emission levels for the pollutants
identified in subparagraph (A) that are speci-
fied in the new source performance standards of
the Clean Air Act (42 U.S.C. 7411) in effect at
the time of construction, installation, or retro-
fitting of the advanced coal-based technology
for the category of source if they are lower than
the levels specified in subparagraph (A); or
(3) the production of coal combustion byprod-
ucts that are capable of obtaining economic values
significantly greater than byproducts produced as of
the date of enactment of this Act with no increase
in the potential to emit sulfur dioxide, nitrogen
oxide, particulate matter, mercury, or carbon mon-
oxide.
(c) FINANCIAL ASSISTANCE.—The Secretary shall
provide financial assistance to projects that—
(1) demonstrate overall cost reductions in the
utilization 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;
(3) achieve, in a cost-effective manner, 1 or
more of the criteria described in the solicitation; and
(4) demonstrate technologies that are applicable
to 25 percent of the electricity generating facilities
that use coal as the primary feedstock as of the date
of enactment of this Act.
(d) FEDERAL SHARE.—The Federal share of the cost
of a project funded under this section shall not exceed 50
percent.
(e) FUNDING.—To carry out this section, the Sec-
retary may use any unobligated funds available to the Sec-
retary and any funds obligated to any project selected
under the clean coal technology program that become un-
obligated.
TITLE II—CREDIT FOR EMISSION
REDUCTIONS 
AND 
EFFI-
CIENCY 
IMPROVEMENTS 
IN
EXISTING COAL-BASED ELEC-
TRICITY GENERATION FACILI-
TIES
SEC. 201. CREDIT FOR INVESTMENT IN QUALIFYING CLEAN
COAL TECHNOLOGY.
(a) ALLOWANCE
OF
QUALIFYING
CLEAN
COAL
TECHNOLOGY UNIT CREDIT.—Section 46 of the Internal
Revenue Code of 1986 (relating to amount of credit) is
amended by striking ‘‘and’’ at the end of paragraph (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 clean coal technology unit
credit.’’.
(b) AMOUNT OF QUALIFYING CLEAN COAL TECH-
NOLOGY UNIT CREDIT.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to rules for computing investment credit)
is amended by inserting after section 48 the following:
‘‘SEC. 48A. QUALIFYING CLEAN COAL TECHNOLOGY UNIT
CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 46, the
qualifying clean coal technology unit credit for any taxable
year is an amount equal to 10 percent of the qualified
investment in a qualifying system of continuous emission
control for such taxable year.
‘‘(b) QUALIFYING SYSTEM OF CONTINUOUS EMIS-
SION CONTROL.—
‘‘(1) IN GENERAL.—For purposes of subsection
(a), the term ‘qualifying system of continuous emis-
sion control’ means a system of the taxpayer
which—
‘‘(A) serves, is added to, or retrofits an ex-
isting coal-based electricity generation unit, the
construction, installation, or retrofitting of
which is completed by the taxpayer (but only
with respect to that portion of the basis which
is properly attributable to such construction, in-
stallation, or retrofitting),
‘‘(B) reduces the discharge into the atmos-
phere of 1 or more of the following pollutants
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.l 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 emission 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
force at the time of construction, installa-
tion or retrofitting of the qualifying system
of continuous emission control for the cat-
egory of source if such level is lower than
the levels specified in clause (i), (ii), (iii),
(iv), or (v),
‘‘(C) is depreciable under section 167,
‘‘(D) has a useful life of not less than 4
years, and
‘‘(E) is located in the United States.
‘‘(2) SPECIAL RULE FOR SALE-LEASEBACKS.—
For purposes of subparagraph (A) of paragraph (1),
in the case of a unit 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 unit was originally
placed in service, for a period of not less than
12 years,
such unit 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) EXISTING COAL-BASED ELECTRICITY GENERA-
TION UNIT.—For purposes of subsection (a), the term ‘ex-
isting coal-based electricity generating unit’ means, with
respect to any taxable year, a steam generator-turbine
unit which uses coal to produce 75 percent or more of
its output as electricity and was operated commercially be-
fore the effective date of this section.
‘‘(d) LIMIT ON QUALIFYING CLEAN COAL TECH-
NOLOGY UNIT CREDIT.—For purposes of subsection (a),
the credit shall be applicable to not more than the first
$100,000,000 of qualifying investment in a qualifying sys-
tem of continuous emission control at any 1 existing coal-
based electricity generating unit.
‘‘(e) QUALIFIED INVESTMENT.—For purposes of sub-
section (a), the term ‘qualified investment’ means, with
respect to any taxable year, the basis of a qualifying sys-
tem of continuous emission control placed in service by
the taxpayer during such taxable year.
‘‘(f) 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 (e) without regard to this
subsection) 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
system of continuous emission control 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 SYSTEM OF CONTINUOUS EMISSION CON-
TROL TO BE TAKEN INTO ACCOUNT.—Construc-
tion shall be taken into account only if, for pur-
poses of this subpart, expenditures therefor are
properly chargeable to capital account with re-
spect 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.
‘‘(g) 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.
‘‘(h) TERMINATION.—This section shall not apply
with respect to any qualified investment made more than
10 years after the effective date of this section.’’.
(c) RECAPTURE.—Section 50(a) of the Internal Rev-
enue Code of 1986 (relating to other special rules) is
amended by adding at the end the following:
‘‘(6) SPECIAL RULES RELATING TO QUALIFYING
SYSTEM OF CONTINUOUS EMISSION CONTROL.—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 system of continuous emis-
sion control (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 system of contin-
uous emission control disposed of, and whose
denominator is the total number of years over
which such unit would otherwise have been sub-
ject to depreciation. For purposes of the pre-
ceding sentence, the year of disposition of the
qualifying system of continuous emission con-
trol 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 system of continuous emission con-
trol 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 system of continuous emis-
sion control.’’.
(d) TRANSITIONAL RULE.—Section 39(d) of the In-
ternal Revenue Code of 1986 (relating to transitional
rules) is amended by adding at the end the following:
‘‘(11) 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 clean coal technology
unit credit determined under section 48A may be
carried back to a taxable year ending before the date
of enactment of section 48A.’’.
(e) TECHNICAL AMENDMENTS.—
(1) Section 49(a)(1)(C) of the Internal Revenue
Code of 1986 is amended by striking ‘‘and’’ at the
end of clause (ii), by striking the period 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 system of continuous emission
control attributable to any qualified invest-
ment (as defined by section 48A(e)).’’.
(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:
‘‘(6) NONAPPLICATION.—Paragraphs (1) and
(2) shall not apply to any qualifying clean coal tech-
nology unit credit under section 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 clean coal technology unit 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. 202. 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:
‘‘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
‘‘(1) QUALIFYING
CLEAN
COAL
TECHNOLOGY
UNIT.—The term ‘qualifying clean coal technology
unit’ means a unit of the taxpayer which—
‘‘(A) is an existing coal-based electricity
generating steam generator-turbine unit,
‘‘(B) has a nameplate capacity rating of
not more than 300,000 kilowatts, and
‘‘(C) has been retrofitted, repowered, or re-
placed with a clean coal technology within 10
years after the effective date of this section.
‘‘(2) CLEAN
COAL
TECHNOLOGY.—The term
‘clean coal technology’ means technology which—
‘‘(A) uses coal to produce 50 percent or
more of its thermal output as electricity, includ-
ing advanced pulverized coal or atmospheric flu-
idized bed combustion, pressurized fluidized bed
combustion, integrated gasification combined
cycle, or any other technology for the produc-
tion of electricity,
‘‘(B) has a design heat rate not less than
500 Btu/kWh below that of the existing unit be-
fore it is retrofit, repowered, or replaced with
the qualifying clean coal technology,
‘‘(C) has a maximum design heat rate of
not more than 9,500 Btu/kWh when the design
coal has a heat content of more than 9,000 Btu
per pound,
‘‘(D) has a maximum design heat rate of
not more than 10,500 Btu/kWh when the de-
sign coal has a heat content of 9,000 Btu per
pound or less, and
‘‘(E) reduces the discharge into the atmos-
phere of 1 or more of the following pollutants
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 construction, installa-
tion or retrofitting of the qualifying clean
coal technology unit for the category of
source if such level is lower than the levels
specified in clause (i), (ii), (iii), (iv), or (v).
‘‘(3) APPLICATION OF CERTAIN RULES.—The
rules of paragraphs (3), (4), and (5) of section 45
shall apply.
‘‘(4) 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.
‘‘(5) 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.
‘‘(d) COORDINATION WITH OTHER CREDITS.—This
section shall not apply to any property with respect to
which the qualifying clean coal technology unit credit
under section 48A is allowed unless the taxpayer elects
to waive the application of such credit to such property.’’.
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘plus’’ at the end of paragraph (14), by
striking the period at the end of paragraph (15) and in-
serting ‘‘, plus’’, and by adding at the end the following:
‘‘(16) the qualifying clean coal technology pro-
duction credit determined under section 45G(a).’’.
(c) TRANSITIONAL RULE.—Section 39(d) of the In-
ternal Revenue Code of 1986 (relating to transitional
rules), as amended by section 201(d), is amended by add-
ing at the end the following:
‘‘(12) 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 before the
date of enactment of section 45G.’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following:
‘‘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 the date of en-
actment of this Act.
TITLE 
III—INCENTIVES 
FOR
EARLY COMMERCIAL APPLI-
CATIONS 
OF 
ADVANCED
CLEAN COAL TECHNOLOGIES
SEC. 301. 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), as amended by section 201(a), 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:
‘‘(5) 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 the Internal Rev-
enue Code of 1986 (relating to rules for computing invest-
ment credit), as amended by section 201(b), is amended
by inserting after section 48A the following:
‘‘SEC. 48B. 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
which—
‘‘(A)(i)(I) 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—
‘‘(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 paragraph (1)—
‘‘(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 5,000
megawatts (4,000 megawatts before 2009),
of advanced pulverized coal or atmospheric
fluidized bed combustion technology—
‘‘(I) installed as a new, retrofit,
or repowering application,
‘‘(II) operated between 2000 and
2012, and
‘‘(III) having a design net heat
rate of not more than 9,500 Btu per
kilowatt hour when the design coal
has a heat content of more than 9,000
Btu per pound, or a design net heat
rate of not more than 9,900 Btu per
kilowatt hour when the design coal
has a heat content of 9,000 Btu per
pound or less,
‘‘(ii) multiple applications, with a
combined capacity of not more than 1,000
megawatts (500 megawatts before 2009
and 750 megawatts before 2013), of pres-
surized 
fluidized 
bed 
combustion
technology—
‘‘(I) installed as a new, retrofit,
or repowering application,
‘‘(II) operated between 2000 and
2016, and
‘‘(III) having a design net heat
rate of not more than 8,400 Btu per
kilowatt hour when the design coal
has a heat content of more than 9,000
Btu per pound, or a design net heat
rate of not more than 9,900 Btu’s per
kilowatt hour when the design coal
has a heat content of 9,000 Btu per
pound or less, and
‘‘(iii) multiple applications, with a
combined capacity of not more than 2,000
megawatts (1,000 megawatts before 2009
and 1,500 megawatts before 2013), 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 2000 and
2016,
‘‘(III) having a design net heat
rate of not more than 8,550 Btu per
kilowatt hour when the design coal
has a heat content of more than 9,000
Btu per pound, or a design net heat
rate of not more than 9,900 Btu per
kilowatt hour when the design coal
has a heat content of 9,000 Btu per
pound or less, 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 2,000
megawatts (1,000 megawatts before 2009
and 1,500 megawatts before 2013) of tech-
nology for the production of electricity—
‘‘(I) installed as a new, retrofit,
or repowering application,
‘‘(II) operated between 2000 and
2016, 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 or a
Qualifying Clean Coal Technology Unit as defined in
section 45G(c)(1).
‘‘(d) CLEAN COAL TECHNOLOGY.—The term ‘clean
coal technology’ means advanced technology which uses
coal to produce 75 percent or more of its thermal output
as electricity including advanced pulverized coal or atmos-
pheric fluidized bed combustion, pressurized fluidized 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 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 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-
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
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 more than
10 years after the effective date of this section.’’.
(c) RECAPTURE.—Section 50(a) of the Internal Rev-
enue Code of 1986 (relating to other special rules), as
amended by section 201(c), is amended by adding at the
end the following:
‘‘(7) 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 48B, 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 48B(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 48B, 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 the In-
ternal Revenue Code of 1986 (relating to transitional
rules), as amended by section 202(c), is amended by add-
ing at the end the following:
‘‘(13) NO CARRYBACK OF SECTION 48B 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
48B may be carried back to a taxable year ending
before the date of enactment of section 48B.’’.
(e) TECHNICAL AMENDMENTS.—
(1) Section 49(a)(1)(C) of the Internal Revenue
Code of 1986, as amended by section 201(e)(1), is
amended by striking ‘‘and’’ at the end of clause (iii),
by striking the period at the end of clause (iv) and
inserting ‘‘, and’’, and by adding at the end the fol-
lowing:
‘‘(v) the portion of the basis of any
qualifying advanced clean coal technology
facility attributable to any qualified invest-
ment (as defined by section 48B(c)).’’.
(2) Section 50(a)(4) of such Code, as amended
by section 201(e)(2), is amended by striking ‘‘and
(6)’’ and inserting ‘‘(6), and (7)’’.
(3) Section 50(c)(6) of such Code, as added by
section 201(e)(3), is amended by inserting ‘‘or any
advanced clean coal technology facility credit under
section 48B’’ after ‘‘section 48A’’.
(4) The table of sections for subpart E of part
IV of subchapter A of chapter 1, as amended by sec-
tion 201(e)(4), is amended by inserting after the
item relating to section 48A the following:
‘‘Sec. 48B. 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. 302. 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),
as amended by section 202(a), is amended by adding at
the end 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 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
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.
‘‘(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
‘‘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 48B shall have the
meaning given such term in section 48B.
‘‘(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 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) of the Internal Revenue Code of 1986, as
amended by section 202(b), 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
45H(a).’’.
(c) TRANSITIONAL RULE.—Section 39(d) of the In-
ternal Revenue Code of 1986 (relating to transitional
rules), as amended by section 301(d), is amended by add-
ing at the end the following:
‘‘(14) NO CARRYBACK OF SECTION 45H 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 enactment of section 45H.’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986, as amended by sec-
tion 202(d), is amended by adding at the end the fol-
lowing:
‘‘Sec. 45H. Credit for production from qualifying advanced clean coal tech-
nology.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to production after the date of en-
actment of this Act.
SEC. 303. RISK POOL FOR QUALIFYING ADVANCED CLEAN
COAL TECHNOLOGY.
(a) ESTABLISHMENT.—The Secretary of the Treas-
ury shall establish a financial risk pool which shall be
available to any United States owner of a qualifying ad-
vanced clean coal technology which has qualified for an
advanced clean coal technology production credit (as de-
fined in section 45H of the Internal Revenue Code of
1986, as added by section 302) to offset for the first 3
years of the operation of such technology the costs (not
to exceed 5 percent of the total cost of installation) for
modifications resulting from the technology’s failure to
achieve its design performance.
(b) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated such sums as are necessary
to carry out the purposes of this section.
TITLE IV—TREATMENT OF CER-
TAIN 
GOVERNMENTAL 
AND
OTHER ENTITIES
SEC. 401. CREDITS FOR CERTAIN ORGANIZATIONS AND
GOVERNMENTAL UNITS.
Section 6401(b) of the Internal Revenue Code of
1986 (relating to excessive credits) is amended by adding
at the end the following:
‘‘(3) CREDITS
FOR
CERTAIN
ORGANIZATIONS
AND GOVERNMENTAL UNITS.—
‘‘(A) ALLOWANCE OF CREDITS.—Any cred-
it which would be allowable under section 45G,
45H, 48A, or 48B with respect to a facility of
an entity whether or not such entity is exempt
from tax, shall be treated as a credit allowable
under subpart C of part IV of subchapter A of
chapter 1 of subtitle A to such entity if such
entity 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) a State, the District of Colum-
bia, or a possession of the United States,
or any political subdivision thereof, or
‘‘(v) the Tennessee Valley Authority.
‘‘(B) USE OF CREDIT.—
‘‘(i) TRANSFER OF CREDIT.—An enti-
ty described in clause (i), (ii), (iii), or (iv)
of subparagraph (A) may assign, trade,
sell, or otherwise transfer any credit allow-
able to such entity under subparagraph
(A) to any other person or entity.
‘‘(ii) USE
OF
CREDIT
AS
AN
OFF-
SET.—Notwithstanding any other provision
of law, in the case of any entity described
in clause (i) or (ii) of subparagraph (A),
any credit allowable to such entity under
subparagraph (A) may be applied by such
entity, without penalty, as a prepayment of
any loan, debt or other obligation the enti-
ty has made, incurred or guaranteed under
the Rural Electrification Act of 1936 (7
U.S.C. 901 et seq.).
‘‘(iii) USE BY TVA.—
‘‘(I) 
IN
GENERAL.—Notwith-
standing any other provision of law, in
the case of an entity described in sub-
paragraph (A)(v), any credit allowable
under subparagraph (A) to such enti-
ty 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. 83ln–4(e)) as an an-
nual return on the appropriations in-
vestment and an annual repayment
sum.
‘‘(II) 
TREATMENT
OF
CRED-
ITS.—The aggregate amount of cred-
its described in subparagraph (A)
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 an-
nual return on the appropriations in-
vestment.
‘‘(III) 
CREDIT
CARRYOVER.—
With respect to any fiscal year, if the
aggregate amount of the credits de-
scribed in subparagraph (A) exceeds
the aggregate amount of payment ob-
ligations described in subclause (I),
the excess amount shall remain avail-
able for application as credits against
the amounts of such payment obliga-
tions in succeeding fiscal years in the
same manner as described in this
clause.
‘‘(C) CREDIT
NOT
INCOME.—Neither a
transfer under clause (i) nor a use under clause
(ii) of subparagraph (B) of any credit allowable
under subparagraph (A) shall result in income
for purposes of section 501(c)(12).
‘‘(D) TRANSFER PROCEEDS TREATED AS
ARISING FROM ESSENTIAL GOVERNMENT FUNC-
TION.—Any proceeds derived by an entity de-
scribed in clause (iii) or (iv) of subparagraph
(A) from the transfer of any such credit under
subparagraph (B)(I) shall be treated as arising
from an essential government function.
‘‘(E) TREATMENT
OF
UNRELATED
PER-
SONS.—For purposes of this title, sales among
and between entities described in clauses (i),
(ii), (iii), and (iv) of subparagraph (A) shall be
treated as sales between unrelated parties.’’.
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