Clean Coal Research, Development, Demonstration, and Deployment Act of 2005 - Instructs the Secretary of Energy to establish a clean coal power initiative to provide assistance to specified projects that: (1) operate within the United States with U.S. coal; and (2) advance efficiency, reliability, environmental performance, and cost competitiveness, or develop alternative technology pathways beyond the levels of technologies that are either currently in commercial service, or have demonstrated that commercial service is viable.
Directs the Secretary to conduct a program of technology research, development, demonstration, and commercial application for coal and power systems.
Sets forth a program to provide federal financial: (1) assistance for projects that will use integrated gasification combined cycle or other advanced coal-based generation technologies; and (2) incentives for deployment of advanced coal-based generation technologies.
Amends the Internal Revenue Code of 1986 to designate certified coal property as entitled to the energy investment tax credit.
Allows a credit against tax for holders of clean energy bonds.
Instructs the Secretary to: (1) establish an industrial gasification technology research, development, and demonstration program; (2) establish an Office of Industrial Gasification Coordination; and (3) identify cost and performance goals of industrial gasification technologies whose deployment would permit the continued cost-competitive gasification of certain fuels to produce chemical feedstocks or ammonia-based fertilizers and liquid transportation fuels.
Directs the Secretary to establish a competitive program to consider and award certifications for investment and production tax credits to industrial gasification project sponsors.
Amends the Internal Revenue Code of 1986 to allow: (1) a synthesis gas production tax credit for production from certified industrial gasification projects; and (2) an investment tax credit for property involved in such projects.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1133 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 1133
To authorize the Secretary of Energy to develop and implement an
accelerated research, development, and demonstration program for
advanced clean coal technologies for use in coal-based generation
facilities and to provide financial incentives to encourage the early
commercial deployment of advanced clean coal technologies through the
retrofitting, repowering, replacement, and new construction of coal-
based electricity generating facilities and industrial gasification
facilities.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 26, 2005
Mr. Byrd (for himself, Mr. Rockefeller, and Mr. Specter) introduced the
following bill; which was read twice and referred to the Committee on
Energy and Natural Resources
_______________________________________________________________________
A BILL
To authorize the Secretary of Energy to develop and implement an
accelerated research, development, and demonstration program for
advanced clean coal technologies for use in coal-based generation
facilities and to provide financial incentives to encourage the early
commercial deployment of advanced clean coal technologies through the
retrofitting, repowering, replacement, and new construction of coal-
based electricity generating facilities and industrial gasification
facilities.
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 ``Clean Coal
Research, Development, Demonstration, and Deployment Act of 2005''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--CLEAN COAL INITIATIVE
Subtitle A--Clean Coal Research, Development, and Demonstration Program
Sec. 101. Clean coal power initiative.
Sec. 102. Research and development programs.
Sec. 103. Authorization of appropriations.
Subtitle B--Coal-Based Electric Generation Deployment Program
Sec. 111. Purpose.
Sec. 112. Definitions.
Sec. 113. Deployment incentive program.
Sec. 114. Election of Federal financial incentives.
Sec. 115. Qualifying advanced coal projects.
Sec. 116. Advanced coal-based generation technology.
Sec. 117. Federal project coordinator.
Sec. 118. Applicability.
Sec. 119. Investment tax credit and shortened recovery period.
Sec. 120. Credit to holders of clean energy bonds.
TITLE II--INDUSTRIAL GASIFICATION INITIATIVE
Sec. 201. Findings and purpose.
Sec. 202. Definitions.
Subtitle A--Industrial Gasification Research, Development, and
Demonstration Program
Sec. 211. Establishment.
Sec. 212. Cost and performance goals.
Sec. 213. Study.
Sec. 214. Authorization of appropriations.
Subtitle B--Industrial Gasification Deployment Program
Sec. 221. Establishment of certification program.
Sec. 222. Credit for production from certified industrial gasification
projects.
SEC. 2. DEFINITIONS.
In this Act:
(1) Department.--The term ``Department'' means the
Department of Energy.
(2) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
TITLE I--CLEAN COAL INITIATIVE
Subtitle A--Clean Coal Research, Development, and Demonstration Program
SEC. 101. CLEAN COAL POWER INITIATIVE.
(a) In General.--
(1) Establishment.--The Secretary shall establish a clean
coal power initiative under which the Secretary shall provide
assistance under this subtitle for projects described in
paragraph (2).
(2) Projects.--To be eligible to receive assistance under
this subtitle, a project shall--
(A) significantly advance efficiency, reliability,
environmental performance, and cost competitiveness or
develop alternative technology pathways beyond the
levels of technologies that--
(i) are in commercial service as of the
date of enactment of this Act; or
(ii) have been demonstrated at scales
sufficient to demonstrate that commercial
service is viable, as determined by the
Secretary; and
(B) be operated in the United States using United
States coal.
(b) Technical Criteria.--
(1) Gasification projects.--
(A) Allocation of funds.--In allocating the funds
made available under section 103(a), the Secretary
shall ensure that at least 65 percent of the funds are
used to fund projects using coal-based gasification
technologies, including--
(i) gasification combined cycle;
(ii) gasification fuel cells and turbine
combined cycle;
(iii) gasification coproduction; and
(iv) hybrid gasification and combustion.
(B) Technical milestones.--
(i) Periodic determination.--
(I) In general.--The Secretary
shall periodically establish technical
milestones specifying the emission and
thermal efficiency levels to which
power and coproduction projects under
this subtitle shall be designed, and
reasonably expected, to achieve.
(II) Prescriptive milestones.--The
technical milestones shall become more
prescriptive during the period of the
clean coal power initiative.
(ii) 2020 goals.--The Secretary shall
establish periodic milestones so as to achieve,
by the year 2020, coal gasification projects
able--
(I) to remove at least 99 percent
of the sulfur compounds;
(II) to emit not more than .05 lbs
of NOx per million Btu;
(III) to achieve 95 percent
reductions in mercury emissions; and
(IV) to achieve thermal to
electrical conversion efficiencies
(also known as ``higher heating
value'') of at least--
(aa) 50 percent for coal of
more than 9,000 Btu;
(bb) 48 percent for coal of
7,000 to 9,000 Btu; and
(cc) 46 percent for coal of
less than 7,000 Btu.
(2) Other projects.--
(A) Allocation of funds.--The Secretary shall
ensure that not more than 35 percent of the funds made
available under section 103(a) are used to fund
projects other than those described in paragraph
(1)(A).
(B) Technical milestones.--
(i) Periodic determination.--
(I) In general.--The Secretary
shall periodically establish technical
milestones specifying the emission and
thermal efficiency levels that projects
other than those described in paragraph
(1)(A) shall be designed, and
reasonably expected, to achieve.
(II) Prescriptive milestones.--The
technical milestones shall become more
prescriptive during the period of the
clean coal power initiative.
(ii) 2020 goals.--The Secretary shall
establish the periodic milestones so as to
achieve, by the year 2020, projects able--
(I) to remove at least 97 percent
of sulfur dioxide;
(II) to emit not more than .08 lbs
of NOx per million Btu;
(III) to achieve 90 percent
reductions in mercury emissions; and
(IV) to achieve thermal to
electrical conversion efficiencies
(also known as ``higher heating
value'') of at least--
(aa) 43 percent for coal of
more than 9,000 Btu;
(bb) 41 percent for coal of
7,000 to 9,000 Btu; and
(cc) 39 percent for coal of
less than 7,000 Btu.
(3) Existing units.--In the case of projects at units in
existence on the date of enactment of this Act, in lieu of the
thermal efficiency requirements described in paragraphs
(1)(B)(ii) and (2)(B)(ii), the milestones shall be designed to
achieve an overall thermal design efficiency improvement,
compared to the efficiency of the unit as operated, of not less
than--
(A) 7 percentage points for coal of more than 9,000
Btu;
(B) 6 percentage points for coal of 7,000 to 9,000
Btu; or
(C) 4 percentage points for coal of less than 7,000
Btu.
(c) Project Selection.--
(1) In general.--In evaluating project proposals, the
Secretary shall select those demonstration projects that are
expected to demonstrate progress toward achieving the
milestones described in paragraphs (1) and (2) of subsection
(b).
(2) Site elevation and rank of coal.--In evaluating project
proposals to achieve the milestones described in paragraphs
(1)(B)(i), (2)(B)(i), and (3) of subsection (b), and in
determining progress toward achieving the milestones described
in paragraph (4) and paragraphs (1)(B)(ii) and (2)(B)(ii) of
subsection (b), the Secretary shall take into account and make
adjustments for the Btu value of various coals and the
elevation of the site at which a project is proposed to be
constructed.
(3) Consultation.--Before establishing the technical
milestones under paragraphs (1)(B)(i)(I) and (2)(B)(i)(I) of
subsection (b), the Secretary shall consult with--
(A) the Administrator of the Environmental
Protection Agency; and
(B) interested persons, including--
(i) coal producers;
(ii) industries using coal;
(iii) organizations that promote coal or
advanced coal technologies;
(iv) environmental organizations;
(v) organizations representing workers; and
(vi) organizations representing consumers.
(4) Permitted uses.--In carrying out this subtitle, the
Secretary shall give high priority to projects that include, as
part of the project--
(A) the separation or capture of carbon dioxide; or
(B) the reduction of the demand for natural gas if
deployed.
(d) Financial Criteria.--The Secretary shall not provide assistance
under this subtitle for a project unless the recipient documents to the
satisfaction of the Secretary that--
(1) the recipient organization is financially responsible;
(2) the recipient shall provide sufficient information to
the Secretary to ensure the Secretary that the federally-
awarded funds will be spent efficiently and effectively; and
(3) a market exists for the technology being demonstrated
or applied, as evidenced by statements of interest in writing
from potential purchasers of the technology.
(e) Financial Assistance.--The Secretary shall provide assistance
to projects that, as determined by the Secretary--
(1) meet the requirements of subsections (a), (b), and (c);
and
(2) are likely--
(A) to achieve overall cost reductions in the use
of coal to generate useful forms of energy or chemical
feedstocks; and
(B) to 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 or chemical feedstock
requirements.
(f) Federal Share.--The Federal share of the cost of a coal or
related technology project carried out using funds made available under
this subtitle shall not exceed 50 percent, as determined by the
Secretary.
(g) Scheduled Completion of Selected Projects.--
(1) In general.--In selecting a project for financial
assistance under this section, the Secretary shall establish a
reasonable period of time during which the owner or operator of
the project shall complete the construction or demonstration
phase of the project, as the Secretary determines to be
appropriate.
(2) Condition of financial assistance.--The Secretary shall
require as a condition of receipt of any financial assistance
under this subtitle that the recipient of the assistance enter
into an agreement with the Secretary not to request an
extension of the time period established for the project by the
Secretary under paragraph (1).
(3) Extension of time period.--
(A) In general.--Subject to subparagraph (B), the
Secretary may extend the time period established under
paragraph (1) if the Secretary determines, in the sole
discretion of the Secretary, that the owner or operator
of the project cannot complete the construction or
demonstration phase of the project within the time
period due to circumstances beyond the control of the
owner or operator.
(B) Limitation.--The Secretary shall not extend a
time period under subparagraph (A) by more than 4
years.
(h) Repayment of Federal Share.--Notwithstanding any other
provision of law, the Secretary shall not condition an award of
financial assistance to a Clean Coal Power Initiative project under
this subtitle on repayment of the Federal share of the cost of the
project.
(i) Applicability.--No technology, or level of emission reduction,
solely by reason of the use of the technology, or the achievement of
the emission reduction by the demonstration of any technology or
performance level by 1 or more facilities receiving assistance under
this subtitle, shall be considered to indicate that the technology or
performance level is--
(1) adequately demonstrated for purposes of section 111 of
the Clean Air Act (42 U.S. C. 7411);
(2) achievable for purposes of section 169 of that Act (42
U.S. C. 7479); or
(3) achievable in practice for purposes of section 171 of
that Act (42 U.S. C. 7501).
(j) Report.--Not later than 1 year after the date of enactment of
this Act, and once every 2 years thereafter through 2013, the
Secretary, in consultation with other appropriate Federal agencies,
shall submit to Congress a report describing--
(1)(A) the technical milestones described in this section;
and
(B) how those milestones ensure progress toward meeting the
requirements of paragraphs (1)(B)(ii) and (2)(B)(ii) of
subsection (b);
(2) how the technologies being demonstrated under the clean
coal power initiative demonstrate methods and equipment that
can be used in broader commercial applications in addition to
electric power generation; and
(3) the status of projects that receive assistance under
this subtitle.
(k) Fee Title.--The Secretary may vest fee title or other property
interests acquired under cost-share Clean Coal Power Initiative
agreements in any entity, including the United States.
(l) Data Protection.--For a period not exceeding 5 years after
completion of the operations phase of a cooperative agreement, the
Secretary may provide appropriate protections, including exemptions
from subchapter II of chapter 5 of title 5, United States Code, against
the dissemination of information that results from demonstration
activities carried out under the Clean Coal Power Initiative Program
and that would be a trade secret or commercial or financial information
that is privileged or confidential if the information had been obtained
from and first produced by a non-Federal party participating in a Clean
Coal Power Initiative project.
SEC. 102. RESEARCH AND DEVELOPMENT PROGRAMS.
(a) Objectives.--The Secretary shall conduct a program of
technology research, development, demonstration, and commercial
application for coal and power systems, including programs to
facilitate production and generation of coal-based energy through--
(1) innovations for existing plants;
(2) gasification systems;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
(5) carbon capture and sequestration research and
development;
(6) coal-derived chemicals and liquid transportation fuels;
(7) solid fuels and feedstocks;
(8) advanced coal-related research;
(9) advanced separation technologies;
(10) fuel cells for operation on synthesis gas derived from
coal; and
(11) projects for permeability enhancement in coals for
natural gas production and carbon dioxide sequestration.
(b) Carbon Capture Research and Development Program.--
(1) In general.--In addition to the research and
development activities authorized under subsection (a)(5), the
Secretary shall carry out a 10-year carbon capture research and
development program to develop carbon dioxide capture
technologies for use--
(A) in new coal utilization facilities; and
(B) on the existing fleet of coal-based units.
(2) Objectives.--The program objectives shall be--
(A) to develop carbon dioxide capture technologies,
including adsorption and absorption techniques and
chemical processes, to remove the carbon dioxide from
gas streams containing carbon dioxide potentially
amenable to sequestration;
(B) to develop technologies that would directly
produce concentrated streams of carbon dioxide
potentially amenable to sequestration;
(C) to increase the efficiency of the overall
system to reduce the quantity of carbon dioxide
emissions released from the system per megawatt
generated; and
(D) in conjunction with the carbon dioxide capture
program, to promote a robust carbon sequestration
program and continue the work of the Department in
conjunction with the private sector, through regional
carbon sequestration partnerships.
(c) Cost and Performance Goals.--
(1) In general.--In carrying out programs under this
section, in each of fiscal years 2008 and 2016 and in each year
following fiscal year 2021, the Secretary shall identify cost
and performance goals for coal-based technologies that would
permit the continued cost-competitive use of coal for the
production of electricity, chemical feedstocks, and liquid
transportation fuels.
(2) Establishing goals.--In identifying cost and
performance goals under paragraph (1), the Secretary shall--
(A) consider activities and studies undertaken as
of the date of enactment of this Act by industry in
cooperation with the Department in support of the
goals;
(B) consult with interested persons, including--
(i) coal producers;
(ii) industries using coal;
(iii) organizations that promote coal and
advanced coal technologies;
(iv) environmental organizations;
(v) organizations representing workers; and
(vi) organizations representing consumers;
(C) not later than 120 days after the date of
enactment of this Act, publish in the Federal Register
proposed draft cost and performance goals for public
comment; and
(D) not later than 180 days after the date of
enactment of this Act and every 4 years thereafter,
submit to Congress a report that--
(i) describes final cost and performance
goals for technologies described in paragraph
(1);
(ii) includes a list of technical
milestones; and
(iii) explains how programs authorized in
this section will not duplicate activities
carried out under section 101.
SEC. 103. AUTHORIZATION OF APPROPRIATIONS.
(a) Clean Coal Power Initiative.--
(1) In general.--There is authorized to be appropriated to
the Secretary to carry out section 101 $200,000,000 for each of
fiscal years 2006 through 2012, to remain available until
expended.
(2) Report.--Not later than March 31, 2006, the Secretary
shall submit to Congress a report that includes a 10-year plan
that includes--
(A) a detailed assessment of whether the aggregate
assistance levels provided under paragraph (1) are the
appropriate assistance levels for the clean coal power
initiative;
(B) a detailed description of how proposals for
assistance under the clean coal power initiative will
be solicited and evaluated, including a list of all
activities expected to be undertaken;
(C) a detailed list of technical milestones for
each coal and related technology that will be pursued;
and
(D) a detailed description of how the clean coal
initiative will avoid problems enumerated in Government
Accountability Office reports on the Clean Coal
Technology Program of the Department, including
problems that have resulted in unspent funds and
projects that failed either financially or
scientifically.
(b) Research and Development Programs.--
(1) In general.--There are authorized to be appropriated to
the Secretary to carry out clean coal technology research,
development, demonstration, and commercial application
activities, including activities described in section 102(a)--
(A) $324,000,000 for fiscal year 2005;
(B) $337,000,000 for fiscal year 2006;
(C) $364,000,000 for fiscal year 2007;
(D) $394,000,000 for fiscal year 2008; and
(E) $427,000,000 for fiscal year 2009.
(2) Carbon capture research and development program.--In
addition to the funds authorized to be appropriated to carry
out section 102(a)(5), there are authorized to be appropriated
to the Secretary to carry out section 102(b)--
(A) $20,000,000 for fiscal year 2006;
(B) $25,000,000 for fiscal year 2007;
(C) $30,000,000 for fiscal year 2008;
(D) $35,000,000 for fiscal year 2009; and
(E) $40,000,000 for fiscal year 2010.
Subtitle B--Coal-Based Electric Generation Deployment Program
SEC. 111. PURPOSE.
The purpose of this subtitle is to provide Federal financial
assistance for projects that will use integrated gasification combined
cycle or other advanced coal-based generation technologies--
(1) in new electric generating units;
(2) to repower existing electric generation units; or
(3) to retrofit existing natural gas combined cycle units
to operate on coal instead of natural gas.
SEC. 112. DEFINITIONS.
In this subtitle:
(1) Advanced coal-based generation technology.--The term
``advanced coal-based generation technology'' means a
technology that meets the requirements of section 116.
(2) Carbon capture capability.--The term ``carbon capture
capability'' means an integrated gasification combined cycle
technology facility capable of adding components that can
capture, separate on a long-term basis, isolate, remove, and
sequester greenhouse gases that result from the generation of
electricity.
(3) Electric generation unit.--The term ``electric
generation unit'' means any facility at least 50 percent of the
total annual net output of which is electrical power, including
an otherwise eligible facility that is used in an industrial
application.
(4) Integrated gasification combined cycle.--The term
``integrated gasification combined cycle'' means an electric
generation unit that produces electricity by converting coal to
synthesis gas that is used to fuel a combined-cycle plant that
produces electricity from both a combustion turbine (including
a combustion turbine/fuel cell hybrid) and a steam turbine.
(5) Qualifying advanced coal project.--The term
``qualifying advanced coal project'' means a project that meets
the requirements of section 115.
SEC. 113. DEPLOYMENT INCENTIVE PROGRAM.
(a) Establishment.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall begin carrying out a program
to provide Federal financial incentives for deployment of advanced
coal-based generation technologies.
(b) Certification.--
(1) In general.--The Secretary may certify a qualifying
advanced coal project as eligible to receive 1 of the Federal
financial incentives provided under section 114.
(2) Period of issuance.--A certificate of eligibility under
this subsection may be issued only during the 10 fiscal year
period beginning on October 1, 2005.
(3) Aggregate generating capacity.--
(A) In general.--The aggregate generating capacity
of projects certified by the Secretary under paragraph
(1) may not exceed 10,000 megawatts.
(B) Particular projects.--Of the total megawatts of
capacity that the Secretary is authorized to certify--
(i) 6,000 megawatts shall be available only
for use for integrated gasification combined
cycle projects; and
(ii) 4,000 megawatts shall be available
only for use for projects that use other
advanced coal-based generation technologies.
(C) Determination of capacity.--In determining
capacity under this paragraph in the case of a
retrofitted or repowered plant, capacity shall be
determined based on total design capacity after the
retrofit or repowering of the existing facility is
accomplished.
(4) Applications.--The Secretary shall act on applications
for certification as the applications are received.
(5) Determination.--In determining whether to certify a
qualifying advanced coal project, the Secretary shall take into
account any written statement from the Governor of the State in
which the project is to be sited that the construction and
operation of the project is consistent with State environmental
and energy policy and requirements.
(6) Application requirement.--An application for
certification shall specify which of the incentives under
section 114 the project sponsor will elect.
(7) Review and redistribution.--
(A) Review.--Not later than 6 years after the date
of enactment of this Act, the Secretary shall review
the projects certified and megawatts allocated under
this section as of the date that is 6 years after the
date of enactment of this Act.
(B) Redistribution.--The Secretary may reallocate
the megawatts available under clauses (i) and (ii) of
subsection (b)(3)(B) if the Secretary determines that--
(i) capacity cannot be used because there
is an insufficient quantity of qualifying
applications for certification pending for any
available capacity at the time of the review;
or
(ii) any certification commitment made
pursuant to section 115(d)(2) has not been
revoked pursuant to section 115(d)(2)(B)(ii)
because the project subject to the
certification commitment has been delayed as a
result of third party opposition or litigation
to the proposed project.
SEC. 114. ELECTION OF FEDERAL FINANCIAL INCENTIVES.
(a) In General.--The project sponsor of a qualifying advanced coal
project certified under section 113(b) may elect to receive the Federal
financial incentives described in either section 119 or 120.
(b) Limitation.--A project sponsor may not elect more than 1
section described in subsection (a).
SEC. 115. QUALIFYING ADVANCED COAL PROJECTS.
(a) Requirements.--For the purpose of section 113(b), a project
shall be considered a qualifying advanced coal project that the
Secretary may certify under section 113(b) if the Secretary determines
that, at a minimum--
(1) the project uses an advanced coal-based generation
technology--
(A) to power a new electric generation or
polygeneration unit; or
(B) to retrofit or repower an existing electric
generation unit (including an existing natural gas-
fired combined cycle unit);
(2) the fuel input for the project, when completed, is at
least 75 percent coal;
(3) the applicant provides an assurance satisfactory to the
Secretary that--
(A) the project is technologically feasible; and
(B) the project is not financially feasible without
the Federal financial incentives, after taking into
account--
(i) regulatory approvals or power purchase
contracts referred to in paragraph (4);
(ii) arrangements for the supply of fuel to
the project;
(iii) contracts or other arrangements for
construction of the project facilities;
(iv) any performance guarantees to be
provided by contractors and equipment vendors;
and
(v) evidence of the availability of funds
to develop and construct the project;
(4) the applicant demonstrates that the applicant has
obtained--
(A) approval by the appropriate regulatory
commission of the recovery of the cost of the project;
or
(B) a power purchase agreement (or letter of
intent, subject to subsection (c)) that has been
approved by the board of directors of, and executed by,
a creditworthy purchasing party;
(5) except as provided in subsection (d), the applicant
demonstrates that the applicant has, or will, obtain all
project agreements and approvals; and
(6) the project will be operated in the United States using
United States coal.
(b) Priority for Integrated Gasification Combines Cycle Projects.--
In determining which qualifying advanced coal projects to certify under
section 113(b)(3)(B)(i), the Secretary shall give high priority to
projects that include, as determined by the Secretary--
(1) carbon capture capability;
(2) increased by-product utilization; and
(3) other benefits.
(c) Letter of Intent.--A letter of intent described in subsection
(a)(4)(B) shall be replaced by a binding contract before a certificate
may be issued.
(d) Project Agreements and Approvals.--
(1) Definition of project agreements and approvals.--In
this section, the term ``project agreements and approvals''
means--
(A) all necessary power purchase agreements, and
all other contracts, that the Secretary determines are
necessary to construct, finance, and operate a project;
and
(B) all authorizations by Federal, State, and local
agencies that are required to construct, operate, and
recover the cost of the project.
(2) Certification commitment.--
(A) In general.--If the applicant has not obtained
all agreements and approvals prior to application, the
Secretary may issue a certification commitment.
(B) Requirements.--
(i) In general.--An applicant that receives
a certification commitment shall obtain any
remaining project agreements and approvals not
later than 4 years after the issuance of the
certification commitment.
(ii) Revocation.--If all project agreements
and approvals are not obtained during the 4-
year period described in clause (i), the
certification commitment is terminated without
any other action by the Secretary.
(iii) Final certificate.--No certificate
may be issued until all project agreements and
approvals are obtained.
SEC. 116. ADVANCED COAL-BASED GENERATION TECHNOLOGY.
(a) In General.--For the purpose of this subtitle, an electric
generation unit uses advanced coal-based generation technology if--
(1) the unit--
(A) uses integrated gasification combined cycle
technology; or
(B) has a design net heat rate of 8530 Btu/kWh (40
percent efficiency); and
(2) the vendor warrants that the unit is designed to meet
the performance requirements in the following table:
Performance characteristic: Design level for project:
SO2 (percent removal)........... 99 percent
NOx (emissions)................. 0.07 lbs/MMBTU
PM* (emissions)................. 0.015 lbs/MMBTU
Hg (percent removal)............ 90 percent
(b) Design Net Heat Rate.--For purposes of this section, design net
heat rate with respect to an electric generation unit shall--
(1) be measured in Btu per kilowatt hour (higher heating
value);
(2) be based on the design annual heat input to the unit
and the rated net electrical power, fuels, and chemicals output
of the unit (determined without regard to the cogeneration of
steam by the unit);
(3) be adjusted for the heat content of the design coal to
be used by the unit--
(A) if the heat content is less than 13,500 Btu per
pound, but greater than 7,000 Btu per pound, according
to the following formula: design net heat rate = unit
net heat rate x [1-{((13,500-design coal heat content,
Btu per pound)/1,000)* 0.013}]; and
(B) if the heat content is less than or equal to
7,000 Btu per pound, according to the following
formula: design net heat rate = unit net heat rate x
[1-{((13,500-design coal heat content, Btu per pound)/
1,000)* 0.018}]; and
(4) be corrected for the site reference conditions of--
(A) elevation above sea level of 500 feet;
(B) air pressure of 14.4 pounds per square inch
absolute;
(C) temperature, dry bulb of 63\o\F;
(D) temperature, wet bulb of 54\o\F; and
(E) relative humidity of 55 percent.
SEC. 117. FEDERAL PROJECT COORDINATOR.
The Secretary shall designate a Federal project coordinator to
facilitate any Federal agency approvals of eligible advanced coal-
generation projects.
SEC. 118. APPLICABILITY.
No technology, or level of emission reduction, solely by reason of
the use of the technology, or the achievement of the emission reduction
by the demonstration of any technology or performance level by 1 or
more facilities receiving assistance under this subtitle, shall be
considered to indicate that the technology or performance level is--
(1) adequately demonstrated for purposes of section 111 of
the Clean Air Act (42 U.S. C. 7411);
(2) achievable for purposes of section 169 of that Act (42
U.S. C. 7479); or
(3) achievable in practice for purposes of section 171 of
that Act (42 U.S. C. 7501).
SEC. 119. INVESTMENT TAX CREDIT AND SHORTENED RECOVERY PERIOD.
(a) In General.--Section 48(a)(3)(A) of the Internal Revenue Code
of 1986 (relating to energy property) is amended--
(1) by striking ``or'' at the end of clause (i),
(2) by inserting ``or'' at the end of clause (ii), and
(3) by adding at the end the following new clause:
``(iii) certified coal property,''.
(b) Credit Rate.--Section 48(a)(2)(A) of such Code (relating to
energy percentage) is amended by striking ``10 percent'' and inserting
``10 percent for energy property other than certified coal property,
and 20 percent for certified coal property''.
(c) Definition.--Section 48 of such Code (relating to energy
credit) is amended by adding at the end the following new subsection:
``(c) Certified Coal Property.--For purposes of this section, the
term `certified coal property' means any property that is part of a
qualifying advanced coal project that the Secretary of Energy has
certified under section 113(b) of the Clean Coal Research, Development,
Demonstration, and Deployment Act of 2005, if the project sponsor has
elected the application of this section for such project under section
114(a) of such Act.''.
SEC. 120. CREDIT TO HOLDERS OF CLEAN ENERGY BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to credits against tax) is
amended by adding at the end the following new subpart:
``Subpart H--Nonrefundable Credit to Holders of Clean Energy Bonds
``Sec. 54. Credit to holders of clean energy bonds.
``SEC. 54. CREDIT TO HOLDERS OF CLEAN ENERGY BONDS.
``(a) Allowance of Credit.--In the case of a taxpayer who holds a
clean energy bond on a credit allowance date of such bond, which occurs
during the taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for such taxable year an amount equal to
the sum of the credits determined under subsection (b) with respect to
credit allowance dates during such year on which the taxpayer holds
such bond.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a clean energy bond is 25 percent of the annual credit
determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any clean energy bond is the product of--
``(A) the credit rate determined by the Secretary
under paragraph (3) for the day on which such bond was
sold, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Determination.--For purposes of paragraph (2), with
respect to any clean energy bond, the Secretary shall determine
daily or caused to be determined daily a credit rate which
shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The
credit rate for any day is the credit rate which the Secretary
or the Secretary's designee estimates will permit the issuance
of clean energy bonds with a specified maturity or redemption
date without discount and without interest cost to the
qualified issuer.
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term also includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
part (other than subpart C thereof, relating to
refundable credits).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, the difference shall be
carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.
``(d) Clean Energy Bond.--For purposes of this section--
``(1) In general.--The term `clean energy bond' means any
bond issued as part of an issue if--
``(A) the bond is issued by a qualified issuer,
``(B) 95 percent or more of the proceeds from the
sale of such issue are to be used for capital
expenditures incurred by qualified borrowers for 1 or
more qualified projects,
``(C) the qualified issuer designates such bond for
purposes of this section and the bond is in registered
form, and
``(D) the issue meets the requirements of
subsections (e), (g), and (h).
``(2) Qualified project; special use rules.--
``(A) In general.--The term `qualified project'
means a certified coal property (as defined in section
48(c)(1)) placed in service by a qualified borrower.
``(B) Refinancing rules.--For purposes of paragraph
(1)(B), a qualified project may be refinanced with
proceeds of a clean energy bond only if the
indebtedness being refinanced (including any obligation
directly or indirectly refinanced by such indebtedness)
was originally incurred by a qualified borrower after
the date of the enactment of this section.
``(C) Reimbursement.--For purposes of paragraph
(1)(B), a clean energy bond may be issued to reimburse
a qualified borrower for amounts paid after the date of
the enactment of this section with respect to a
qualified project, but only if prior to the payment of
such expenditure, the qualified borrower declared its
intent to reimburse such expenditure with the proceeds
of a clean energy bond.
``(D) Treatment of changes in use.--For purposes of
paragraph (1)(B), the proceeds of an issue shall not be
treated as used for a qualified project to the extent
that a qualified borrower takes any action within its
control which causes such proceeds not to be used for a
qualified project. The Secretary shall prescribe
regulations specifying remedial actions that may be
taken (including conditions to taking such remedial
actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a
clean energy bond.
``(e) Maturity Limitations.--
``(1) Duration of term.--A bond shall not be treated as a
clean energy bond if such bond is issued as part of an issue
and--
``(A) the average maturity of bonds issued as a
part of such issue, exceeds
``(B) 120 percent of the average reasonable
expected economic life of the facilities being financed
with the proceeds from the sale of such issue.
``(2) Determination of averages.--For purposes of paragraph
(1), the determination of averages of an issue and economic
life of any facility shall be determined in accordance with
section 147(b).
``(3) Ratable principal amortization required.--A bond
shall not be treated as a clean energy bond unless it is part
of an issue which provides for an equal amount of principal to
be paid by the qualified issuer during each calendar year that
the issue is outstanding.
``(f) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(g) Special Rules Relating to Expenditures.--
``(1) In general.--An issue shall be treated as meeting the
requirements of this subsection if, as of the date of issuance,
the qualified issuer reasonably expects--
``(A) at least 95 percent of the proceeds from the
sale of the issue are to be spent for 1 or more
qualified projects within the 5-year period beginning
on such date,
``(B) a binding commitment with a third party to
spend at least 10 percent of the proceeds from the sale
of the issue will be incurred within the 6-month period
beginning on the date of issuance of the clean energy
bond or, in the case of a clean energy bond, the
proceeds of which are to be loaned to 2 or more
qualified borrowers, such binding commitment will be
incurred within the 6-month period beginning on the
date of the loan of such proceeds to a qualified
borrower, and
``(C) such projects will be completed with due
diligence and the proceeds from the sale of the issue
will be spent with due diligence.
``(2) Extension of period.--Upon submission of a request
prior to the expiration of the period described in paragraph
(1)(A), the Secretary may extend such period if the qualified
issuer establishes that the failure to satisfy the 5-year
requirement is due to reasonable cause and the related projects
will continue to proceed with due diligence.
``(3) Failure to spend required amount of bond proceeds
within 5 years.--To the extent that less than 95 percent of the
proceeds of such issue are expended within such 5-year period
(and no extension has been obtained under paragraph (2)), the
qualified issuer shall redeem all of the nonqualified bonds on
the earliest call date subsequent to the expiration of the 5-
year period. If such earliest call date is more than 90 days
subsequent to the expiration of the 5-year period, the
qualified issuer shall establish a yield-restricted defeasance
escrow within such 90 days to retire such nonqualified bonds on
the earlier of the date which is 10 years after the issue date
or the first call date. For purposes of this paragraph, the
term `nonqualified bonds' means the portion of the outstanding
bonds in an amount that, if the remaining bonds were issued on
the fifth anniversary of the date of the issuance of the issue,
at least 95 percent of the proceeds of the remaining bonds
would be used to provide qualified projects.
``(h) Special Rules Relating to Arbitrage.--
``(1) In general.--A bond which is part of an issue shall
not be treated as a clean energy bond unless, with respect to
the issue of which the bond is a part, the issuer satisfies the
arbitrage rebate requirements of section 148 with respect to
gross proceeds of the issue (other than any amounts applied in
accordance with subsection (g)). For purposes of such
requirements, yield over the term of an issue shall be
determined under the principles of section 148 based on the
qualified issuer's payments of principal, interest (if any),
and fees for guarantees on such issue.
``(2) Exception.--Amounts on deposit in a bona fide debt
service fund with regard to any clean energy bond are not
subject to the arbitrage rebate requirements of section 148.
``(i) Cooperative Electric Company; Clean Energy Bond Lender;
Governmental Body; Qualified Borrower.--For purposes of this section--
``(1) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C), or a not-for-profit electric utility which has
received a loan or loan guarantee under the Rural
Electrification Act.
``(2) Clean energy bond lender.--The term `clean energy
bond lender' means a lender which is a cooperative which is
owned by, or has outstanding loans to, 100 or more cooperative
electric companies and is in existence on February 1, 2002, and
shall include any affiliated entity which is controlled by such
lender.
``(3) Governmental body.--The term `governmental body'
means any State, territory, possession of the United States,
the District of Columbia, Indian tribal government, and any
political subdivision thereof.
``(4) Qualified issuer.--The term `qualified issuer'
means--
``(A) a clean energy bond lender,
``(B) a cooperative electric company,
``(C) a governmental body, or
``(D) the Tennessee Valley Authority.
``(5) Qualified borrower.--The term `qualified borrower'
means--
``(A) a cooperative electric company,
``(B) a governmental body, or
``(C) the Tennessee Valley Authority.
``(j) Pool Bonds.--The portion of a clean energy bond issue
allocable to each loan, if any, shall be deemed to be (and treated as)
a separate issue of clean energy bonds and the failure of any such
deemed separate clean energy bond issue to satisfy the requirements set
forth under this section shall not affect the qualification of any
other deemed separate clean energy bond issue.
``(k) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Partnership; s corporation; and other pass-thru
entities.--Under regulations prescribed by the Secretary, in
the case of a partnership, trust, S corporation, or other pass-
thru entity, rules similar to the rules of section 41(g) shall
apply with respect to the credit allowable under subsection
(a).
``(3) Bonds held by regulated investment companies.--If any
clean energy bond is held by a regulated investment company,
the credit determined under subsection (a) shall be allowed to
shareholders of such company under procedures prescribed by the
Secretary.
``(4) Treatment for estimated tax purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by this
section to a taxpayer by reason of holding a clean energy bond
on a credit allowance date shall be treated as if it were a
payment of estimated tax made by the taxpayer on such date.
``(5) Reporting.--Issuers of clean energy bonds shall
submit reports similar to the reports required under section
149(e).
``(l) Termination.--This section shall not apply with respect to
any bond issued after December 31, 2008.''.
(b) Reporting.--Subsection (d) of section 6049 of the Internal
Revenue Code of 1986 (relating to returns regarding payments of
interest) is amended by adding at the end the following new paragraph:
``(8) Reporting of credit on clean energy bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54(f) and such amounts shall
be treated as paid on the credit allowance date (as
defined in section 54(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(c) Clerical Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new item:
``subpart h. nonrefundable credit to holders of clean energy bonds.''.
(2) Section 6401(b)(1) of such Code is amended by striking
``and G'' and inserting ``G, and H''.
(d) Issuance of Regulations.--The Secretary of Treasury shall issue
regulations required under section 54 of the Internal Revenue Code of
1986 (as added by this section) not later than 120 days after the date
of the enactment of this Act.
TITLE II--INDUSTRIAL GASIFICATION INITIATIVE
SEC. 201. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds that widespread domestic use of
gasification technologies can make significant contributions to the
economy, environmental beneficiation, and the general welfare of the
citizens of the United States.
(b) Purpose.--The purpose of the industrial gasification research,
development, and demonstration program shall be to support a
significant acceleration of gasification technology deployment in
industrial applications to--
(1) reduce the demand pressure on domestic natural gas
prices and supply for all consumers by promoting the use of
synthesis gas derived from domestic coal, biomass, petroleum
residues, and other domestic fuel sources for industrial use;
(2) promote the use of those fuel sources in an
environmentally benign manner;
(3) preserve domestic jobs;
(4) reduce the deficit of the United States as of the date
of enactment of this Act;
(5) reduce imports of energy from foreign sources;
(6) avoid dependence on remote foreign sources for
chemicals, ammonia-based fertilizers, and other strategic
products for which natural gas has traditionally been a
significant component in the manufacturing process;
(7) promote the position of the United States as a global
leader in advanced gasification technology development and
sales of related products;
(8) promote the potential for future use or sequestration
of industrial carbon emissions in an efficient manner;
(9) provide coordination within the Department for
research, development, and demonstration of industrial
gasification technologies using a diverse fuel mix; and
(10) support the deployment of industrial gasification
technologies that will produce or displace, by 2020, the
equivalent of 1.5 trillion cubic feet of natural gas annually.
SEC. 202. DEFINITIONS.
In this title:
(1) Biomass.--
(A) In general.--The term ``biomass'' means--
(i) any agricultural or plant waste;
(ii) byproduct of wood or paper mill
operations, including lignin in spent pulping
liquors; and
(iii) other products of forestry
maintenance.
(B) Exclusion.--The term ``biomass'' does not
include paper that is commonly recycled.
(2) Carbon capture capability.--The term ``carbon capture
capability'' means an industrial gasification plant design that
is determined by the Secretary to reflect reasonable
consideration for, and be capable of, accommodating the
equipment likely to be necessary to capture carbon dioxide from
the gaseous stream, for later use or sequestration, that would
otherwise be emitted in the flue gas from a project that uses a
nonrenewable fuel.
(3) Coal.--The term ``coal'' means any carbonized or
semicarbonized matter, including peat.
(4) Coproduced power.--The term ``coproduced power'' means
heat, steam, or electricity derived from a plant or plant
product.
(5) Eligible entity.--The term ``eligible entity'' means
any person whose application for Federal assistance under
subtitle A, or whose application for certification under
subtitle B, is principally intended for use in a domestic
project that employs domestic gasification applications related
to--
(A) chemicals;
(B) fertilizers;
(C) glass;
(D) steel;
(E) petroleum residues;
(F) forest products; and
(G) agriculture, including feedlots and dairy
operations.
(6) Gasification technology.--The term ``gasification
technology'' means any process that converts a solid or liquid
product from coal, petroleum residue, biomass, or other
materials that are recovered for their energy or feedstock
value into a synthesis gas composed primarily of carbon
monoxide and hydrogen for direct use or subsequent chemical or
physical conversion.
(7) Industrial gasification project.--The term ``industrial
gasification project'' means any project that--
(A) employs gasification technology; and
(B) will be carried out by an eligible entity.
(8) Petroleum residue.--The term ``petroleum residue''
means the carbonized product of high-boiling hydrocarbon
fractions obtained in petroleum processing.
(9) Total plant investment.--The term ``total plant
investment'' means the total project cost for engineering,
design, procurement, construction, project development and
financing, and reasonable contingency reserves as agreed upon
by the Secretary and the project sponsor.
Subtitle A--Industrial Gasification Research, Development, and
Demonstration Program
SEC. 211. ESTABLISHMENT.
(a) In General.--The Secretary shall establish an industrial
gasification technology research, development, and demonstration
program to facilitate production of synthesis gas, chemical feedstocks,
ammonia-based fertilizers, or liquid transportation fuels and
generation of coproduced power, through methods and equipment under--
(1) this subtitle;
(2) the Federal Nonnuclear Energy Research and Development
Act of 1974 (42 U.S.C. 5901 et seq.);
(3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801
et seq.); and
(4) title XVI of the Energy Policy Act of 1992 (42 U.S.C.
13381 et seq.).
(b) Conditions.--The program described in subsection (a) shall be
designed to achieve the cost and performance goals established under
section 212.
(c) Office of Industrial Gasification Coordination.--The Secretary
shall establish an Office of Industrial Gasification Coordination that
shall--
(1) report directly to the Secretary;
(2) analyze the strategic and economic consequences of
natural gas dependency in the industrial and agricultural
sectors;
(3) prepare biannual plans for the development and
deployment of industrial gasification technologies that may be
capable of reducing this dependence in a manner that is cost-
effective for the United States as a whole;
(4) not later than 180 days after the date of enactment of
this Act and thereafter not later than the first day of March
every 2 years through 2016, in coordination with the study
under section 213, submit the biannual plan to--
(A) the Committee on Energy and Commerce of the
House of Representatives;
(B) the Committee on Energy and Natural Resources
of the Senate; and
(C) the Committees on Appropriations; and
(5) make recommendations to the Secretary to coordinate
gasification research and associated expenditures among the
several relevant programs of the Department.
SEC. 212. COST AND PERFORMANCE GOALS.
(a) In General.--The Secretary shall perform an assessment that
identifies cost and performance goals of industrial gasification
technologies the deployment of which would permit the continued cost-
competitive gasification of the fuels identified in section 202(6) to--
(1) produce chemical feedstocks or ammonia-based
fertilizers;
(2) produce liquid transportation fuels; and
(3) coproduce power.
(b) Consultation.--In establishing the cost and performance goals,
the Secretary shall--
(1) consider activities and studies undertaken to date by
industry in cooperation with the Department in support of the
assessment described in subsection (a);
(2) consult with interested entities, including--
(A) coal producers;
(B) industries using the fuels identified in
section 202(6);
(C) organizations that promote fuels identified in
section 202(6) and advanced gasification technologies
that use those fuels;
(D) environmental organizations;
(E) organizations representing workers;
(F) organizations representing consumers; and
(3) consult with the Administrator of the Environmental
Protection Agency and the Secretary of Agriculture.
(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 a description of the final cost
and performance goals.
SEC. 213. 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 other appropriate Federal agencies,
shall conduct a study to--
(1) identify industrial gasification technologies that,
alone or in combination with other technologies, may be 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 industrial gasification technologies that,
alone or in combination with other technologies, contribute to
the achievement of the cost and performance goals;
(3) develop recommendations for industrial gasification
technology development programs that the Department could carry
out in cooperation with industry, to develop, demonstrate, and
deploy technologies that, alone or in combination with other
technologies, achieve the cost and performance goals; and
(4) develop recommendations for additional authorities
required to achieve the industrial gasification cost and
performance goals, and review and recommend changes, if any, to
those cost and performance goals if the Secretary determines
that the changes are necessary as a result of ongoing research,
development, demonstration, and deployment of technologies.
(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 212(b)(2).
SEC. 214. AUTHORIZATION OF APPROPRIATIONS.
(a) Authorization.--
(1) In general.--There are authorized to be appropriated to
the Secretary to carry out activities described in paragraph
(2), to remain available until expended--
(A) $80,000,000 for fiscal year 2006;
(B) $100,000,000 for fiscal year 2007;
(C) $150,000,000 for fiscal year 2008;
(D) $160,000,000 for fiscal year 2009; and
(E) $120,000,000 for fiscal year 2010.
(2) Activities.--Activities covered by paragraph (1) are
industrial gasification and related technologies research,
development, and demonstration programs, including--
(A) innovations for existing plants;
(B) industrial-scale turbines (less than 50MW) for
synthesis gas derived from the fuels identified in
section 202(6);
(C) synthesis gas, chemicals feedstocks, ammonia-
based fertilizers, and transportation liquid fuels
derived from the fuels identified in section 202(6);
and
(D) collection and gasification of biomass.
(b) Limit on Use of Funds.--
(1) In general.--Before the use of funds authorized by
subsection (a), the Secretary shall submit to Congress a report
that--
(A) describes the proposed use of funds; and
(B) contains a plan that includes--
(i) a detailed description of how any
proposals will be solicited and evaluated,
including a list of all activities expected to
be undertaken;
(ii) a detailed list of technical
milestones for each fuel application and
related technology that will be pursued; and
(iii) a description of how the programs
authorized by this section will be carried out
so as to complement and not duplicate
activities authorized under--
(I) the Industries of the Future
Program;
(II) the Biomass Program;
(III) the Clean Coal Power
Initiative; and
(IV) other programs and authorities
being carried out by the Secretary.
(2) Waiting period.--The Secretary may not use any funds
authorized by subsection (a) before the date that is 30 days
after the date of receipt by Congress of the report required by
paragraph (1).
Subtitle B--Industrial Gasification Deployment Program
SEC. 221. ESTABLISHMENT OF CERTIFICATION PROGRAM.
(a) In General.--The Secretary shall establish a competitive
program to consider and award certifications for investment and
production tax credits to industrial gasification project sponsors.
(b) Competitive Awards.--
(1) In general.--Not later than 270 days after the date of
enactment of this Act, and every 2 years thereafter through
2016, the Secretary, in consultation with the Secretary of the
Treasury and the Secretary of Agriculture, shall carry out a
competitive solicitation for the award of certifications that
entitle the recipients to specific investment and production
tax credits associated with the year of certification as
described in section 45J of the Internal Revenue Code of 1986
(as added by section 222(a)).
(2) Competitive certification process.--Notwithstanding the
limitations imposed in section 45J of the Internal Revenue Code
of 1986 (as added by section 222(a)), the Secretary may during
a biannual competitive certification process deem that a
certification award be considered as having been awarded up to
4 years earlier than the actual date of certification for not
more than 2 projects that the Secretary determines use a
technology that has not previously been deployed.
(c) Applications Limited to Eligible Entities.--A project sponsor
shall be eligible to compete for the tax credit certifications awarded
competitively by the Secretary under subsection (a) only if--
(1) the project sponsor is an eligible entity; and
(2) the project of the project sponsor advances the
purposes described in section 201.
(d) Selection Criteria.--The Secretary shall not make a competitive
certification award for production tax credit eligibility unless the
recipient has documented to the satisfaction of the Secretary that--
(1) the award recipient is financially viable without the
receipt of additional Federal funding associated with the
proposed project;
(2) the recipient will provide sufficient information to
the Secretary for the Secretary to ensure that the award funds
are spent efficiently and effectively;
(3) a market exists for the products of the proposed
deployment project as evidenced by contracts or written
statements of intent from potential customers;
(4) the fuels identified in section 202(6) will comprise at
least 90 percent of the fuels required by the project for the
production of chemical feedstocks, liquid transportation fuels,
or coproduction of electricity;
(5) the award recipient's project team is competent in the
construction and operation of the gasification technology
proposed, with preference given to those recipients with
experience that demonstrates successful and reliable operations
of the technology on domestic fuels identified in section
202(6); and
(6) the award recipient has met other criteria established
and published by the Secretary.
(e) Combined Limit for the Use of More Than One Federal Credit,
Loan or Loan Guarantee.--The allowable combined value of all credits,
loans or loan guarantees claimed in association with any single
certified industrial gasification property is limited to the project
total credit limit associated with the project's year of certification
or deemed year of certification as determined under section 221 of the
Clean Coal Research, Development, Demonstration, and Deployment Act of
2005.
SEC. 222. CREDIT FOR PRODUCTION FROM CERTIFIED INDUSTRIAL GASIFICATION
PROJECTS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business related
credits) is amended by adding at the end the following new section:
``SEC. 45J. CREDIT FOR PRODUCTION FROM CERTIFIED INDUSTRIAL
GASIFICATION PROJECTS.
``(a) In General.--For purposes of section 38, the synthesis gas
production tax credit for any taxable year is determined by the year in
which the taxpayer's industrial gasification project is certified or
deemed certified in accordance with the provisions of section 221 of
the Clean Coal Research, Development, Demonstration, and Deployment Act
of 2005.
``(b) Determination of Credit Amount.--
``(1) In general.--
``(A) In general.--With respect to each industrial
gasification project sponsor, the synthesis gas
production tax credit for all taxable years shall not
exceed the credit value per-million-Btu's and project
total credit limitation associated with the project's
year of certification or deemed year of certification
as specified in the following table:
----------------------------------------------------------------------------------------------------------------
Number of project Credit value per million Project total
Year of certification certifications Btu's credit limit
----------------------------------------------------------------------------------------------------------------
2006.................................... 3......................... $.62...................... $174,000,000
2008.................................... 3......................... $.496..................... $116,725,000
2010.................................... 4......................... $.397..................... $77,855,575
2012.................................... 7......................... $.317..................... $51,929.669
2014.................................... 10........................ $.254..................... $34,637,089
2016.................................... 14........................ $.203..................... $23,102,938
----------------------------------------------------------------------------------------------------------------
``(B) Inflation adjustment.--
``(i) In general.--For calendar years after
2006, each amount in the third and fourth
columns of the table contained in subparagraph
(A) 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 in such third column 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.
If any amount in such fourth column is
increased under the preceding sentence is not a
multiple of $50, such amount shall be rounded
to the nearest multiple of $50.
``(ii) Inflation adjustment factor.--For
purposes of clause (i)--
``(I) In general.--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 2005.
``(II) GDP implicit price
deflator.--The term `GDP implicit price
deflator' means, for any calendar year,
the most recent revision of the
implicit price deflator for the gross
domestic product as of June 30 of such
calendar year as computed by the
Department of Commerce before October 1
of such calendar year.
``(2) Limitations.--
``(A) Credit limited by project investment.--The
credit amount for any industrial gasification project
otherwise determined under this section shall not
exceed an amount equal to 20 percent of the total plant
investment made in such project.
``(B) Credit limited by btu's consumed in
production of electricity.--Not more than 60 percent of
the credit amount for any industrial gasification
project otherwise determined under this section for any
taxable year may be attributable to Btu's consumed in
the production of electricity.
``(3) Additional credit amount.--The credit amount and
project total credit limit for any industrial gasification
project otherwise determined under this section (determined
without regard to paragraph (2)) shall be increased by 30
percent for any synthises gas produced and used for purposes
other than coproduced power (as defined in section 202(4) of
the Clean Coal Research, Development, Demonstration, and
Deployment Act of 2005.
``(c) Exception for Deployment of New Technologies.--
Notwithstanding subsection (b), the Secretary may during a competitive
certification process assign credit values and total project credit
value limitations associated with certification periods not to exceed 4
years prior to the current year of awards to not more than 2 industrial
gasification projects which the Secretary determines are particularly
consistent with the program purposes in section 201(b) of the Clean
Coal Research, Development, Demonstration, and Deployment Act of 2005
and which utilize a technology that has not previously been deployed.
``(d) Treatment of Person Not Able to Use Entire Credit.--
``(1) Allowance of credits.--
``(A) In general.--Any credit allowable under this
section or section 46(2) by reason of section
48(a)(3)(A)(iv) with respect to a facility owned by a
person described in subparagraph (B) may be transferred
or used as provided in this subsection, and the
determination as to whether the credit is allowable
shall be made without regard to the tax-exempt status
of the person.
``(B) Persons described.--A person is described in
this subparagraph if the person is--
``(i) an organization described in section
501(c)(12)(C) and exempt from tax under section
501(a),
``(ii) an organization described in section
1381(a)(2)(C),
``(iii) a public utility (as defined in
section 136(c)(2)(B)),
``(iv) any State or political subdivision
thereof, the District of Columbia, or any
agency or instrumentality of any of the
foregoing,
``(v) any Indian tribal government (within
the meaning of section 7871) or any agency or
instrumentality thereof, or
``(vi) the Tennessee Valley Authority.
``(2) Transfer of credit.--
``(A) In general.--A person described in clause
(i), (ii), (iii), (iv), or (v) of paragraph (1)(B) may
transfer any credit to which paragraph (1)(A) applies
through an assignment to any other person not described
in paragraph (1)(B). Such transfer may be revoked only
with the consent of the Secretary.
``(B) Regulations.--The Secretary shall prescribe
such regulations as necessary to ensure that any credit
described in subparagraph (A) is claimed once and not
reassigned by such other person.
``(C) Transfer proceeds treated as arising from
essential government function.--Any proceeds derived by
a person described in clause (iii), (iv), or (v) of
paragraph (1)(B) from the transfer of any credit under
subparagraph (A) shall be treated as arising from the
exercise of an essential government function.
``(D) Credit not income.--Any transfer under
subparagraph (A) of any credit to which paragraph
(1)(A) applies shall not be treated as income for
purposes of section 501(c)(12).
``(3) Use by tva.--
``(A) In general.--Notwithstanding any other
provision of law, in the case of a person described in
paragraph (1)(B)(vi), any credit to which paragraph
(1)(A) applies may be applied as a credit against the
payments required to be made in any fiscal year under
section 15d(e) of the Tennessee Valley Authority Act of
1933 (16 U.S.C. 831n-4(e)) as an annual return on the
appropriations investment and an annual repayment sum.
``(B) Treatment of credits.--The aggregate amount
of credits described in paragraph (1)(A) with respect
to such person shall be treated in the same manner and
to the same extent as if such credits were a payment in
cash and shall be applied first against the annual
return on the appropriations investment.
``(C) Credit carryover.--With respect to any fiscal
year, if the aggregate amount of credits described
paragraph (1)(A) with respect to such person exceeds
the aggregate amount of payment obligations described
in subparagraph (A), the excess amount shall remain
available for application as credits against the
amounts of such payment obligations in succeeding
fiscal years in the same manner as described in this
paragraph.
``(4) Treatment of unrelated persons.--For purposes of this
subsection, transfers among and between persons described in
clauses (i), (ii), (iii), (iv), and (v) of paragraph (1)(B)
shall be treated as transfers between unrelated parties.
``(e) Applicable Rules.--For purposes of this section, the rules of
paragraphs (3), (4), and (5) of section 45(e) shall apply.''.
(b) Credit Treated as Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986 (relating to current year business
credit) is amended by striking ``plus'' at the end of paragraph (18),
by striking the period at the end of paragraph (19) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(20) the synthesis gas production tax credit determined
under section 45J(a).''.
(c) Denial of Double Benefit.--Section 29(d) of the Internal
Revenue Code of 1986 (relating to other definitions and special rules)
is amended by adding at the end the following new paragraph:
``(9) Denial of double benefit.--This section shall not
apply with respect to any qualified fuel the production of
which may be taken into account for purposes of determining the
credit under section 45J.''.
(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 new item:
``Sec. 45J. Credit for production from certified industrial
gasification projects.''.
(e) Effective Date.--The amendments made by this section shall
apply to production after the date of the enactment of this Act, in
taxable years ending after such date.
SEC. 223. INVESTMENT TAX CREDIT FOR CERTIFIED INDUSTRIAL GASIFICATION
PROJECTS.
(a) In General.--Section 48 (a)(3)(A) of the Internal Revenue Code
of 1986 (relating to energy property), as amended by this Act, is
amended--
(1) by striking ``or'' at the end of clause (ii),
(2) by inserting ``or'' at the end of clause (iii), and
(3) by adding at the end the following new clause:
``(iv) certified industrial gasification
property,''.
(b) Credit Rate.--Section 48(a)(2)(A) of the Internal Revenue Code
of 1986 (relating to energy percentage), as amended by this Act, is
amended by inserting ``or a certified industrial gasification
property'' after ``certified coal property'' both places it appears.
(c) Definitions.--Section 48 of the Internal Revenue Code of 1986
(relating to energy credit), as amended by this Act, is amended by
adding the following new subsection:
``(d) Certified Industrial Gasification Property.--For purposes of
this section--
``(1) In general.--The term `certified industrial
gasification property' means any property that is part of an
industrial gasification project as defined in section 202(7) of
the Clean Coal Research, Development, Demonstration, and
Deployment Act of 2005 and that has been certified by the
Secretary of Energy under section 221 of that Act.
``(2) Limit on use of credits.--Any credit claimed by a
taxpayer under section 46(2) by reason of subsection
(a)(3)(A)(iv) shall be limited to the project total credit
limit associated with the project's year of certification or
deemed year of certification as determined under section 221 of
the Clean Coal Research, Development, Demonstration, and
Deployment Act of 2005.''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S6029-6030)
Read twice and referred to the Committee on Energy and Natural Resources.
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