Amends the Internal Revenue Code to allow tax credits for investment in: (1) a qualifying clean coal technology unit in an existing coal-based electricity generation facility; and (2) early commercial applications of qualifying advanced clean coal technologies. Sets forth formulae for determining tax credits for unit production of both kinds of technologies.
Exempts the installation of a qualifying system of continuous emission control from new source review requirements under the Clean Air Act. Grants a ten-year exemption from any new or increased emission control requirements for the specific pollutant controlled by such a system to any existing coal-based electricity generating unit on which it has been installed, if the system meets or exceeds the specified standard of performance for new stationary sources.
Directs the Secretary of the Treasury to establish a financial risk pool for a limited time to offset the modification costs resulting from the failure of qualifying advanced clean coal technology to achieve its design performance.
Cites conditions under which credits for emission reductions and efficiency improvements in existing coal-based generating facilities of electric cooperatives or publicly owned electric utilities may be treated as offset credits.
Entitles the Tennessee Valley Authority to aggregate certain clean coal technology credits and apply them as a credit against obligations for annual returns on the appropriations investment and annual repayment sums.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 60 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 60
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 the retrofitting, repowering, or replacement of
coal-based electricity generating facilities to protect the environment
and improve efficiency and encourage the early commercial application
of advanced clean coal technologies, so as to allow coal to help meet
the growing need of the United States for the generation of reliable
and affordable electricity.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 22, 2001
Mr. Byrd introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
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 the retrofitting, repowering, or replacement of
coal-based electricity generating facilities to protect the environment
and improve efficiency and encourage the early commercial application
of advanced clean coal technologies, so as to allow coal to help meet
the growing need of the United States for the generation of reliable
and affordable electricity.
Be it enacted by the Senate and House of Representatives 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 and purposes.
TITLE I--ACCELERATED TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM FOR
ADVANCED CLEAN COAL TECHNOLOGY FOR COAL-BASED ELECTRICITY GENERATING
FACILITIES
Sec. 101. Purpose.
Sec. 102. Definitions.
Subtitle A--National Coal-Based Technology Development and Applications
Program
Sec. 111. Cost and performance goals.
Sec. 112. Study.
Sec. 113. Technology research and development program.
Sec. 114. Authorization of appropriations.
Subtitle B--Power Plant Improvement Initiative
Sec. 121. Power plant improvement initiative program.
Sec. 122. Financial assistance.
Sec. 123. Funding.
TITLE II--CREDIT FOR EMISSION REDUCTIONS AND EFFICIENCY IMPROVEMENTS IN
EXISTING COAL-BASED ELECTRICITY GENERATION 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 TAX-EXEMPT ENTITIES
Sec. 401. Offset credits for electric cooperatives or publicly owned
electric utilities.
Sec. 402. Offset of certain annual payment obligations in lieu of
qualifying clean coal technology credits.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) reliable, affordable, increasingly clean electricity
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 electricity;
(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 abundant 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 generating 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-threatening 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 desirable.
(b) Purposes.--The purposes of this Act are--
(1) 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
(2) to amend the Internal Revenue Code of 1986--
(A) to provide financial incentives to encourage
the retrofitting, repowering, or replacement of coal-
based electricity generating facilities to protect the
environment and improve efficiency;
(B) to encourage the early commercial application
of advanced clean coal technologies; and
(C) to develop technologies that provide
flexibility in obtaining environmental objectives at
the lowest possible cost in order to provide
electricity to the consumer at the lowest possible
cost;
so as to allow coal to help meet the growing need of the United States
for the generation of clean, reliable, and affordable electricity.
TITLE I--ACCELERATED TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM FOR
ADVANCED CLEAN COAL TECHNOLOGY FOR COAL-BASED ELECTRICITY GENERATING
FACILITIES
SEC. 101. PURPOSE.
The purpose of this title is to direct the Secretary--
(1) to establish a coal-based technology development
program designed to achieve cost and performance goals;
(2) to carry out a study to identify technologies that may
be capable of achieving the cost and performance goals and for
other purposes; and
(3) to implement a research, development, and demonstration
program to develop and demonstrate in commercial-scale
applications advanced clean coal technologies for coal-fired
generating units constructed before the date of enactment of
this Act.
SEC. 102. DEFINITIONS.
In this title:
(1) Cost and performance goals.--The term ``cost and
performance goals'' means the cost and performance goals
established under section 111.
(2) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
Subtitle A--National Coal-Based Technology Development and Applications
Program
SEC. 111. COST AND PERFORMANCE GOALS.
(a) In General.--The Secretary shall perform an assessment that
identifies costs and associated performance of technologies that would
permit the continued cost-competitive use of coal for electricity
generation, as chemical feedstocks, and as transportation fuel in 2007,
2015, and the years after 2020.
(b) Consultation.--In establishing the cost and performance goals,
the Secretary shall consult with representatives of--
(1) the United States coal industry;
(2) State coal development agencies;
(3) the electric utility industry;
(4) railroads and other transportation industries;
(5) manufacturers of equipment using advanced coal
technologies;
(6) organizations representing workers; and
(7) organizations formed to--
(A) further the goals of environmental protection;
(B) promote the use of coal; or
(C) promote the development and use of advanced
coal technologies.
(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 consideration any public comments
received, submit to Congress the final cost and performance
goals.
SEC. 112. STUDY.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary, in cooperation with the Secretary of the
Interior and the Administrator of the Environmental Protection Agency,
shall conduct a study to--
(1) identify technologies capable 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 the cost and performance goals; and
(3) develop recommendations for technology development
programs, which the Department of Energy could carry out in
cooperation with industry, to develop and demonstrate the cost
and performance goals.
(b) Cooperation.--In carrying out this section, the Secretary shall
give due weight to the expert advice of representatives of the entities
described in section 111(b).
SEC. 113. 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 Act;
(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 research, development, demonstration, and
commercial application programs identified in section 112(a) shall be
designed to achieve the cost and performance goals.
(c) Report.--Not later than 18 months after the date of enactment
of this Act, the Secretary shall submit to the President and Congress a
report containing--
(1) a description of the programs that, as of the date of
the report, are in effect or are to be carried out by the
Department of Energy to support technologies that are designed
to achieve the cost and performance goals; and
(2) recommendations for additional authorities required to
achieve the cost and performance goals.
SEC. 114. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There is authorized to be appropriated to carry
out this subtitle $100,000,000 for each of fiscal years 2002 through
2012, to remain available until expended.
(b) Conditions of Authorization.--The authorization of
appropriations under subsection (a)--
(1) shall be in addition to authorizations of
appropriations 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.
Subtitle B--Power Plant Improvement Initiative
SEC. 121. POWER PLANT IMPROVEMENT INITIATIVE PROGRAM.
(a) In General.--The Secretary shall carry out a power plant
improvement initiative program that will demonstrate commercial
applications of advanced coal-based technologies applicable to new or
existing power plants, including co-production plants, which must
advance the efficiency, environmental performance, and cost
competitiveness well beyond that which is in operation or has been
demonstrated on the date of enactment of this Act.
(b) Plan.--Not later than 120 days after the date of enactment of
this Act, the Secretary shall submit 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 technologies included in the
plan; and
(3) the demonstration activities proposed to be conducted
at new or existing coal-based electric generation units having
at least 50 megawatts nameplate rating, including improvements
to allow the units to achieve 1 or more of the following:
(A) An overall design efficiency improvement of not
less than 3 percent as compared with the efficiency of
the unit as operated on the date of enactment of this
Act and before any retrofit, repowering, replacement,
or installation.
(B) A significant improvement in the environmental
performance related to the control of sulfur dioxide,
nitrogen oxide, and mercury in a manner that is
different and well below the cost of technologies that
are in operation or have been demonstrated on the date
of enactment of this Act.
(C) A means of recycling or reusing a significant
portion of coal combustion wastes produced by coal-
based generating units excluding practices that are
commercially available at the date of enactment of this
Act.
SEC. 122. FINANCIAL ASSISTANCE.
(a) In General.--Not later than 180 days after the date on which
the Secretary submits to Congress the plan under section 121(b), the
Secretary shall solicit proposals for projects at new or existing
facilities designed to achieve the levels of performance set forth in
section 121(b)(3).
(b) Project Criteria.--A solicitation under subsection (a) may
include solicitation of a proposal for a project to demonstrate--
(1) the control of emissions of 1 or more pollutants; or
(2) the production of coal combustion byproducts that are
capable of obtaining economic values significantly greater than
byproducts produced on the date of enactment of this Act.
(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 diversity of fuel choices in
the United States to meet electricity 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 on the date of enactment of this Act.
(d) Federal Share.--The Federal share cost of a project funded
under this subtitle shall not exceed 50 percent.
(e) Exemption From New Source Review Provisions.--A project funded
under this subtitle shall be exempt from the new source review
provisions of the Clean Air Act (42 U.S.C. 7401 et seq.).
SEC. 123. FUNDING.
To carry out this subtitle, the Secretary may use any unobligated
funds available to the Secretary and any funds obligated to any project
selected under the clean coal technology program that become
unobligated.
TITLE II--CREDIT FOR EMISSION REDUCTIONS AND EFFICIENCY IMPROVEMENTS IN
EXISTING COAL-BASED ELECTRICITY GENERATION FACILITIES
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 Technology Unit Credit.--
Subpart E of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 (relating to rules for computing investment
credit) is amended by inserting after section 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 Emission Control.--
``(1) In general.--For purposes of subsection (a), the term
`qualifying system of continuous emission control' means a
system of the taxpayer which--
``(A) serves, is added to, or retrofits an existing
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, installation, or
retrofitting),
``(B) removes or reduces 1 or more of the
pollutants regulated under title I of the Clean Air Act
(42 U.S.C. 7401 et seq.),
``(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 person, 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 property is used under the
leaseback (or lease) referred to in subparagraph (B). The
preceding sentence shall not apply to any property if the
lessee and lessor of such property make an election under this
sentence. Such an election, once made, may be revoked only with
the consent of the Secretary.
``(c) Existing Coal-Based Electricity Generation Unit.--For
purposes of subsection (a), the term `existing 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 in operation before the effective
date of this section.
``(d) Limit on Qualifying Clean Coal Technology 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
system of continuous emission control at any 1 existing coal-based
electricity generating unit.
``(e) Qualified Investment.--For purposes of subsection (a), the
term `qualified investment' means, with respect to any taxable year,
the basis of a qualifying system 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 investment of such taxpayer for the
taxable year (determined 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 expenditure property.
``(2) Progress expenditure property defined.--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 defined.--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 property.--In the case of
nonself-constructed property, 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 expenditures will be made directly by the
taxpayer.
``(B) Nonself-constructed property.--The term
`nonself-constructed property' means property which is
not self-constructed property.
``(C) Construction, etc.--The term `construction'
includes reconstruction and erection, and the term
`constructed' includes reconstructed and erected.
``(D) Only construction of qualifying system of
continuous emission control to be taken into account.--
Construction 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 subsection may be
made at such time and in such manner 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 except
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 energy credit under section 48 is allowed
unless the taxpayer elects to waive the application of such credit to
such property.
``(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 Revenue 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 respect to a qualifying system of continuous
emission 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 continuous emission control
disposed of, and whose denominator is the total number
of years over which such unit would otherwise have been
subject to depreciation. For purposes of the preceding
sentence, the year of disposition of the qualifying
system of continuous emission control property shall be
treated as a year of remaining 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 control 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 respect to the credit
allowed under section 38 regarding a qualifying system
of continuous emission control.''.
(d) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules) is amended by adding at the
end the following:
``(9) No carryback of section 48a credit before effective
date.--No portion of the unused 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
investment (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 technology 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 section 48 the following:
``Sec. 48A. Qualifying clean coal technology unit credit.''.
(f) Installations Not Subject to New Source Review, Etc.--
(1) Exemption from new source review.--The installation of
a qualifying system of continuous emission control (as defined
in section 48A(b)(1) of the Internal Revenue Code of 1986, as
added by subsection (b)), shall be exempt from the new source
review provisions of the Clean Air Act (42 U.S.C. 7401 et
seq.).
(2) Exemption from emission control requirements.--The
installation of a qualifying system of continuous emission
control (as so defined) on an existing coal-based electricity
generating unit, which meets or exceeds, for the applicable
source category and pollutant being controlled by such
qualified system, the standard of performance for new
stationary sources, shall exempt the existing unit from any new
or increased emission control requirements for the pollutant
being controlled by such qualified system under title I of the
Clean Air Act (42 U.S.C. 7401 et seq.) for a period of 10 years
after the date such qualified system is originally placed in
service.
(g) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2000, 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
Reconciliation 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. 45E. 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 technology
production credit, multiplied by
``(2) the kilowatt hours of electricity produced by the
taxpayer during such taxable year at a qualifying clean coal
technology unit during the 10-year period beginning on the date
the unit was returned to service after retrofit, repowering, or
replacement.
``(b) Applicable Amount.--
``(1) In general.--For purposes of this section, the
applicable amount of clean coal technology production credit is
equal to $0.0034.
``(2) Inflation adjustment factor.--For calendar years
after 2001, 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 preceding sentence is not a multiple of 0.01 cent, such
amount shall be rounded to the nearest multiple of 0.01 cent.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(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 replaced
with a clean coal technology within 10 years of 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, including advanced
pulverized coal or atmospheric fluidized bed
combustion, pressurized fluidized bed combustion,
integrated gasification combined cycle, or any other
technology for the production of electricity,
``(B) has a design heat rate not less than 500 Btu/
kWh below that of the existing unit before it is
retrofit, repowered, or replaced with the qualifying
clean coal technology,
``(C) has a maximum design heat rate of not more
than 9,000 Btu/kWh when the design coal has a heat
content of more than 8,000 Btu per pound, and
``(D) has a maximum design heat rate of not more
than 10,500 Btu/kWh when the design coal has a heat
content of 8,000 Btu per pound or less.
``(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 respect 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 calendar year
2000.
``(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 Department 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.--Section 38(b) of the
Internal Revenue Code of 1986 is amended by striking ``plus'' at the
end of paragraph (11), by striking the period at the end of paragraph
(12) and inserting ``, plus'', and by adding at the end the following:
``(13) the qualifying clean coal technology production
credit determined under section 45E(a).''.
(c) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by section 201(d),
is amended by adding at the end the following:
``(10) No carryback of section 45e credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the qualifying clean coal
technology production credit determined under section 45E may
be carried back to a taxable year ending before the date of
enactment of section 45E.''.
(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 adding at the end the following:
``Sec. 45E. Credit for production from a qualifying clean coal
technology unit.''.
(e) Modifications and Installations Not Subject to New Source
Review, Etc.--
(1) Exemption from new source review.--Modifications made
to an existing coal-based generation unit because of, or as
part of a qualifying clean coal technology unit (as defined in
section 45E(c)(1) of the Internal Revenue Code of 1986, as
added by subsection (a)), shall be exempt from the new source
review provisions of the Clean Air Act (42 U.S.C. 7401 et
seq.).
(2) Exemption from emission control requirements.--The
installation of a qualifying clean coal technology unit (as so
defined) on an existing coal-based electricity generating unit,
which meets or exceeds, for the applicable source category, the
standard of performance for new stationary sources under
section 111 of the Clean Air Act (42 U.S.C. 7411), shall exempt
the existing unit from any new or increased emission control
requirements under title I of such Act (42 U.S.C. 7401 et seq.)
for a period of 10 years after the date the qualifying clean
coal technology is originally placed in service.
(f) Effective Date.--The amendments made by this section shall
apply to production after the date of enactment of this Act.
TITLE III--INCENTIVES FOR EARLY COMMERCIAL APPLICATIONS OF ADVANCED
CLEAN COAL TECHNOLOGIES
SEC. 301. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED 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 technology
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 Revenue Code of 1986 (relating to rules for computing
investment credit), as amended by section 201(b), is amended by
inserting after section 48A the following:
``SEC. 48B. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY 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 Technology Facility.--
``(1) In general.--For purposes of subsection (a), the term
`qualifying advanced clean coal technology facility' means a
facility of the taxpayer which--
``(A)(i)(I) replaces a conventional technology
facility of the taxpayer and the original use of which
commences with the taxpayer, or
``(II) is a retrofitted or repowered conventional
technology facility, the retrofitting or repowering of
which is completed by the taxpayer (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 defined 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 person, or is
leased to such person, within 3 months after the date
such facility was originally placed in service, for a
period of not less than 12 years,
such facility shall be treated as originally placed in service
not earlier than the date on which such property is used under
the leaseback (or lease) referred to in subparagraph (B). The
preceding sentence shall not apply to any property if the
lessee and lessor of such property make an election under this
sentence. Such an election, once made, may be revoked only with
the consent of the Secretary.
``(3) Qualifying advanced clean coal technology.--For
purposes of paragraph (1)--
``(A) In general.--The term `qualifying advanced
clean coal technology' means, with respect to clean
coal technology--
``(i) multiple applications, with a
combined capacity of not more than 5,000
megawatts, of advanced pulverized coal or
atmospheric fluidized bed combustion
technology--
``(I) installed as a new, retrofit,
or repowering application,
``(II) operated between 2000 and
2011, and
``(III) with 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 8,000 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 8,000 Btu per pound or less,
``(ii) multiple applications, with a
combined capacity of not more than 1,000
megawatts, of pressurized fluidized bed
combustion technology--
``(I) installed as a new, retrofit,
or repowering application,
``(II) operated between 2000 and
2015, and
``(III) with 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 8,000 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 8,000 Btu per pound or less,
``(iii) multiple applications, with a
combined capacity of not more than 2,000
megawatts, of integrated gasification combined
cycle technology, with or without fuel or
chemical co-production--
``(I) installed as a new, retrofit,
or repowering application,
``(II) operated between 2000 and
2015,
``(III) with 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 8,000 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 8,000 Btu per pound or less, and
``(IV) with a net thermal
efficiency on any fuel or chemical co-
production of not less than 39 percent
(higher heating value), and
``(iv) multiple applications, with a
combined capacity of not more than 2,000
megawatts of technology for the production of
electricity--
``(I) installed as a new, retrofit,
or repowering application,
``(II) operated between 2000 and
2015, and
``(III) with a carbon emission rate
which is not more than 85 percent of
conventional technology.
``(B) Exceptions.--Such term shall not include
clean coal technology projects receiving or scheduled
to receive funding under the Clean Coal Technology
Program of the Department of Energy.
``(C) Clean coal technology.--The term `clean coal
technology' means advanced technology which uses coal
to produce 75 percent or more of its thermal output as
electricity including advanced pulverized coal or
atmospheric 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.
``(D) Conventional technology.--The term
`conventional technology' means--
``(i) coal-fired combustion technology with
a design net heat rate of not less than 9,500
Btu per kilowatt hour (HHV) and a carbon
equivalents emission rate of not more than 0.54
pounds of carbon per kilowatt hour when the
design coal has a heat content of more than
8,000 Btu per pound,
``(ii) coal-fired combustion technology
with a design net heat rate of not less than
10,500 Btu per kilowatt hour (HHV) and a carbon
equivalents emission rate of not more than 0.60
pounds of carbon per kilowatt hour when the
design coal has a heat content of 8,000 Btu per
pound or less, or
``(iii) natural gas-fired combustion
technology with a design net heat rate of not
less than 7,500 Btu per kilowatt hour (HHV) and
a carbon equivalents emission rate of not more
than 0.24 pounds of carbon per kilowatt hour.
``(E) 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
qualifying advanced clean coal technology (determined
without regard to such technology's co-generation of
steam).
``(F) Selection criteria.--Selection criteria for
clean coal technology facilities--
``(i) shall be established by the Secretary
of Energy as part of a competitive
solicitation,
``(ii) shall include primary criteria of
minimum design net heat rate, maximum design
thermal efficiency, and lowest cost to the
government, and
``(iii) shall include supplemental criteria
as determined appropriate by the Secretary of
Energy.
``(c) Qualified Investment.--For purposes of subsection (a), the
term `qualified investment' means, with respect to any taxable year,
the basis of a qualifying advanced clean coal technology facility
placed in service by the taxpayer during such taxable year.
``(d) Qualified Progress Expenditures.--
``(1) Increase in qualified investment.--In the case of a
taxpayer who has made an election under paragraph (5), the
amount of the qualified investment of such taxpayer for the
taxable year (determined 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 expenditure property.
``(2) Progress expenditure property defined.--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 defined.--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 property.--In the case of
nonself-constructed property, 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 expenditures will be made directly by the
taxpayer.
``(B) Nonself-constructed property.--The term
`nonself-constructed property' means property which is
not self-constructed property.
``(C) Construction, etc.--The term `construction'
includes reconstruction and erection, and the term
`constructed' includes reconstructed and erected.
``(D) Only construction of qualifying advanced
clean coal technology facility to be taken into
account.--Construction 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 subsection may be
made at such time and in such manner 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 except
with the consent of the Secretary.
``(e) Coordination With Other Credits.--This section shall not
apply to any property with respect to which the rehabilitation credit
under section 47 or the energy credit under section 48 is allowed
unless the taxpayer elects to waive the application of such credit to
such property.
``(f) 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 Revenue 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 respect to a qualifying advanced clean coal
technology 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 remaining
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 facility 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 respect to the credit
allowed under section 38 regarding a qualifying
advanced clean coal technology facility.''.
(d) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by section 202(c),
is amended by adding at the end the following:
``(11) No carryback of section 48b credit before effective
date.--No portion of the unused 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 following:
``(v) the portion of the basis of any
qualifying advanced clean coal technology
facility attributable to any qualified
investment (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 section 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, 2000, 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
Reconciliation 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 Revenue Code of 1986 (relating to business related credits),
as amended by section 202(a), is amended by adding at the end the
following:
``SEC. 45F. 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 facility 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 technology 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
8,000 Btu per pound:
``(A) In the case of a facility originally placed
in service before 2008, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
heat rate, Btu/kWh (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not more than 8,400......... $.0050 $.0030
More than 8,400 but not more $.0010 $.0010
than 8,550.
More than 8,550 but not more $.0005 $.0005.
than 8,750.
------------------------------------------------------------------------
``(B) In the case of a facility originally placed
in service after 2007 and before 2012, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
heat rate, Btu/kWh (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not more than 7,770......... $.0090 $.0075
More than 7,770 but not more $.0070 $.0050
than 8,125.
More than 8,125 but not more $.0060 $.0040.
than 8,350.
------------------------------------------------------------------------
``(C) In the case of a facility originally placed
in service after 2011 and before 2015, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
heat rate, Btu/kWh (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not more than 7,380......... $.0120 $.0090
More than 7,380 but not more $.0095 $.0070.
than 7,720.
------------------------------------------------------------------------
``(2) Where the design coal has a heat content of not more
than 8,000 Btu per pound:
``(A) In the case of a facility originally placed
in service before 2008, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
heat rate, Btu/kWh (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not more than 8,500......... $.0050 $.0030
More than 8,500 but not more $.0010 $.0010
than 8,650.
More than 8,650 but not more $.0005 $.0005.
than 8,750.
------------------------------------------------------------------------
``(B) In the case of a facility originally placed
in service after 2007 and before 2012, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
heat rate, Btu/kWh (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not more than 8,000......... $.0090 $.0075
More than 8,000 but not more $.0070 $.0050
than 8,250.
More than 8,250 but not more $.0060 $.0040.
than 8,400.
------------------------------------------------------------------------
``(C) In the case of a facility originally placed
in service after 2011 and before 2015, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
heat rate, Btu/kWh (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not more than 7,800......... $.0120 $.0090
More than 7,800 but not more $.0095 $.0070.
than 7,950.
------------------------------------------------------------------------
``(3) Where the clean coal technology facility is producing
fuel or chemicals:
``(A) In the case of a facility originally placed
in service before 2008, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
thermal efficiency (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not less than 40.6 percent.. $.0050 $.0030
Less than 40.6 but not less $.0010 $.0010
than 40 percent.
Less than 40 but not less $.0005 $.0005.
than 39 percent.
------------------------------------------------------------------------
``(B) In the case of a facility originally placed
in service after 2007 and before 2012, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
thermal efficiency (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not less than 43.9 percent.. $.0090 $.0075
Less than 43.9 but not less $.0070 $.0050
than 42 percent.
Less than 42 but not less $.0060 $.0040.
than 40.9 percent.
------------------------------------------------------------------------
``(C) In the case of a facility originally placed
in service after 2011 and before 2015, if--
------------------------------------------------------------------------
The applicable amount is:
``The facility design net -------------------------------------------
thermal efficiency (HHV) is For 1st 5 years of For 2d 5 years of
equal to: such service such service
------------------------------------------------------------------------
Not less than 44.2 percent.. $.0120 $.0090
Less than 44.2 but not less $.0095 $.0070.
than 43.6 percent.
------------------------------------------------------------------------
``(c) Inflation Adjustment Factor.--For calendar 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
increased 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 purposes of this
section--
``(1) In general.--Any term used in this section which is
also used in section 48B shall have the meaning given such term
in section 48B.
``(2) Applicable rules.--The rules of paragraphs (3), (4),
and (5) of section 45 shall apply.
``(3) Inflation adjustment factor.--The term `inflation
adjustment factor' means, with respect 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 calendar year
2000.
``(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 Department of Commerce before March 15 of the calendar
year.''.
(b) Credit Treated as Business Credit.--Section 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 (12), by striking the
period at the end of paragraph (13) and inserting ``, plus'', and by
adding at the end the following:
``(14) the qualifying advanced clean coal technology
production credit determined under section 45F(a).''.
(c) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by section 301(d),
is amended by adding at the end the following:
``(12) No carryback of section 45f credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the qualifying advanced clean
coal technology production credit determined under section 45F
may be carried back to a taxable year ending before the date of
enactment of section 45F.''.
(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 section 202(d), is amended by adding at the end the
following:
``Sec. 45F. Credit for production from qualifying advanced clean coal
technology.''.
(e) Installations Not Subject to New Source Review, Etc.--
(1) Exemption from new source review.--The installation of
a qualifying advanced clean coal technology facility which has
qualified for a qualifying advanced clean coal technology
production credit determined under section 45F of the Internal
Revenue Code of 1986, as added by subsection (a), shall be
exempt from the new source review provisions of the Clean Air
Act (42 U.S.C. 7401 et seq.).
(2) Exemption from emission control requirements.--The
installation of a qualifying advanced clean coal technology
facility which has qualified for a qualifying advanced clean
coal technology production credit determined under such section
45F and which meets or exceeds, for the applicable source
category, the standard of performance for new stationary
sources established under section 111 of the Clean Air Act (42
U.S.C. 7411), shall exempt that facility from any new or
increased emission control requirements under title I of such
Act (42 U.S.C. 7401 et seq.) for a period of 10 years after the
date the qualifying clean coal technology facility is
originally placed in service.
(f) Effective Date.--The amendments made by this section shall
apply to production after the date of enactment of this Act.
SEC. 303. RISK POOL FOR QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY.
(a) Establishment.--The Secretary of the Treasury shall establish a
financial risk pool which shall be available to any United States owner
of a qualifying advanced clean coal technology which has qualified for
an advanced clean coal technology production credit (as defined in
section 45F 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 CERTAIN TAX-EXEMPT ENTITIES
SEC. 401. OFFSET CREDITS FOR ELECTRIC COOPERATIVES OR PUBLICLY OWNED
ELECTRIC UTILITIES.
(a) Offset Credits.--Section 6401(b) of the Internal Revenue Code
of 1986 (relating to excessive credits) is amended by adding at the end
the following:
``(3) Special rule for credits under sections 45e, 45f,
48a, and 48b.--
``(A) In general.--For purposes of paragraph (1),
the credits allowed under sections 45E, 45F, 48A, and
48B (relating to credits for emission reductions and
efficiency improvements in existing coal-based
generating facilities) shall be treated for the taxable
year as credits allowable under subpart C of part IV of
subchapter A of chapter 1 (relating to refundable
credits) only if with respect to such taxable year--
``(i) the taxpayer is an electric
cooperative which is--
``(I) an organization engaged in
marketing, generating, purchasing,
transmitting, or distributing electric
energy,
``(II) recognized for purposes of
this title as operating on a
cooperative basis, and
``(III) the owner of a qualifying
system of continuous emission control
or a qualifying clean coal technology
unit or both or a qualifying advanced
clean coal technology facility from
which such credits are derived, or
``(ii) the taxpayer is a public utility
which is--
``(I) organized by an Act of
Congress or whose income would qualify
under section 115 as income derived
from a State or any subdivision
thereof, and
``(II) the owner of the existing
coal-based generating facility which is
retrofitted, repowered, or replaced
with a qualifying clean coal technology
for purposes of the credit under
section 45E or served by, added to by,
or retrofitted with a qualifying system
of continuous emission control for
purposes of the credit under section
48A, or the owner of qualifying
advanced clean coal technology for
purposes of the credits under sections
45F and 48B.
``(B) Treatment of cooperative taxpayer.--For
purposes of this paragraph--
``(i) In general.--An electric cooperative
shall be deemed a taxpayer thereby qualifying
for the credits described in sections 45E, 45F,
48A, and 48B notwithstanding any other
provision to the contrary.
``(ii) Use of offset credits.--
Notwithstanding any other provision of law, in
the case of a cooperative taxpayer, the credits
described in sections 45E, 45F, 48A, and 48B
shall be applied, without penalty, as a
prepayment of any debt or obligation the
cooperative has incurred under subchapter I of
chapter 31 of title 7 of the Rural
Electrification Act of 1936 (7 U.S.C. 901 et
seq.). Such credits shall be applied to loans
as selected by the cooperative.
``(C) Public utility defined.--For purposes of this
paragraph only, the term `public utility' means a
utility providing electricity which is owned by the
Federal Government, a State or local government, or any
political subdivision thereof.
``(D) Treatment of credit.--Neither the amount of
credit produced nor the amount of credit refunded
pursuant to this paragraph shall result in income for
purposes of section 501(c)(12).
``(E) Treatment of unrelated persons.--For purpose
of this paragraph, the rules of section 45(d)(4) shall
apply.
``(F) Treatment of tva.--This paragraph shall not
apply with respect to the Tennessee Valley
Authority.''.
SEC. 402. OFFSET OF CERTAIN ANNUAL PAYMENT OBLIGATIONS IN LIEU OF
QUALIFYING CLEAN COAL TECHNOLOGY CREDITS.
(a) In General.--Notwithstanding any other provision of law, the
Tennessee Valley Authority shall be entitled, with respect to its being
an owner of a qualifying system of continuous emission control for
purposes of the credit under section 45E of the Internal Revenue Code
of 1986, a qualifying clean coal technology unit for purposes of the
credit under section 48A of such Code, or a qualifying advanced clean
coal technology facility for purposes of the credit under section 45F
or 48B of such Code, to have an amount, equal to the aggregate amount
of such credits for any fiscal year, applied as a credit against the
payments required to be made in such 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
repayment sum.
(b) Treatment of Credits.--The aggregate amount of credits
described in subsection (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 annual return on the appropriations
investment.
(c) Credit Carryover.--With respect to any fiscal year, if the
aggregate amount of credits described in subsection (a) exceeds the
aggregate amount of payment obligations described in subsection (a),
the excess amount shall remain available to the Tennessee Valley
Authority for application as credits against the amounts of such
payment obligations in succeeding fiscal years in the same manner as
described in this section.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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