[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 582 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 582
To authorize the Department of Energy 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
March 10, 2003
Mr. Bunning introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To authorize the Department of Energy 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.
(a) Short Title.--This Act may be cited as the ``Coal Energy
Research Development and Demonstration Act of 2003''.
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--ACCELERATED TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM FOR
ADVANCED CLEAN COAL TECHNOLOGY
Sec. 101. Definitions.
Sec. 102. Cost and performance goals.
Sec. 103. Study.
Sec. 104. Technology research and development program.
Sec. 105. Authorization of appropriations.
TITLE II--CLEAN COAL POWER INITIATIVE
Sec. 201. Authorization of appropriations.
Sec. 202. Clean coal power initiative criteria.
Sec. 203. Report.
Sec. 204. Clean coal centers of excellence.
TITLE III--CLEAN COAL INCENTIVES
Subtitle A--Credit for Emission Reductions and Efficiency Improvements
in Existing Coal-Based Electricity Generation Facilities
Sec. 301. Credit for production from a qualifying clean coal technology
unit.
Subtitle B--Incentives for Early Commercial Applications of Advanced
Clean Coal Technologies
Sec. 302. Credit for investment in qualifying advanced clean coal
technology.
Sec. 303. Credit for production from a qualifying advanced clean coal
technology unit.
Subtitle C--Treatment of persons Not Able To Use Entire Credit
Sec. 304. Treatment of persons not able to use entire credit.
TITLE I--ACCELERATED TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM FOR
ADVANCED CLEAN COAL TECHNOLOGY
SEC. 101. DEFINITIONS.
In this title:
(a) Cost and Performance Goals.--The term ``cost and performance
goals'' means the cost and performance goals established under section
102.
(b) Secretary.--The term ``Secretary'' means the Secretary of
Energy.
SEC. 102. COST AND PERFORMANCE GOALS.
(a) In General.--The Secretary shall perform an assessment that
identifies cost and performance goals 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--
(1) consider activities and studies undertaken to date by
industry in cooperation with the Department of Energy in
support of such assessment; and
(2) consult with interested entities, including coal
producers, industries using coal, organizations to promote coal
and advanced coal technologies, environmental organizations and
organizations representing workers.
(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. 103. STUDY.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, and once every 2 years thereafter through 2016, the
Secretary, in cooperation with other appropriate federal agencies,
shall conduct a study to--
(1) identify technologies that, by themselves 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 technologies that, by themselves or in
combination with other technologies, contribute to the
achievement of the cost and performance goals;
(3) develop recommendations for technology development
programs, which the Department of Energy could carry out in
cooperation with industry, to develop and demonstrate
technologies that, by themselves or in combination with other
technologies, achieves the cost and performance goals; and
(4) develop recommendations for additional authorities
required to achieve the cost and performance goals, and review
and recommend changes, if any, to those cost and performance
goals if the Secretary determines that such changes are
necessary as a result of ongoing research, development and
demonstration 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 102(b)(2).
SEC. 104. TECHNOLOGY RESEARCH, DEVELOPMENT AND DEMONSTRATION PROGRAM.
(a) In General.--The Secretary shall carry out a technology
research, development and demonstration program to facilitate
production and generation of coal-based power through methods and
equipment under--
(1) this title;
(2) the Federal Nonnuclear Energy Research and Development
Act of 1974 (42 U.S.C. 5901 et seq.);
(3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801
et seq.); and
(4) title XVI of the Energy Policy Act of 1992 (42 U.S.C.
13381 et seq.).
(b) Conditions.--The program described in subsection (a) shall be
designed to achieve the cost and performance goals required by Section
102.
SEC. 105. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to the
Secretary $200,000,000 for fiscal year 2004, $210,000,000 for fiscal
year 2005, and $220,500,000 for fiscal year 2006, to remain available
until expended, for coal and related technologies research and
development programs, which shall include--
(1) innovations for existing plants;
(2) integrated gasification combined cycle;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
(5) carbon capture and sequestration research and
development;
(6) coal-derived transportation fuels and chemicals;
(7) solid fuels and feedstocks; and
(8) advanced coal-related research.
(b) Limit on Use of Funds.--
(1) Prior to the use of funds authorized by this section,
the Secretary shall transmit to the Congress a report
describing the proposed use of funds and containing a plan that
includes--
(A) a detailed description of how proposals, if
any, will be solicited and evaluated, including a list
of all activities expected to be undertaken;
(B) a detailed list of technical milestones for
each coal and related technology that will be pursued;
and
(C) a description of how the programs authorized in
this section will be carried out so as to complement
and not duplicate activities authorized under the Clean
Coal Power Initiative authorized under title II.
(2) Thirty days shall elapse from receipt of the report
required by this subsection after which the Secretary may then
use the authorization of appropriations provided by this
section.
TITLE II--CLEAN COAL POWER INITIATIVE
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
(a) Clean Coal Power Initiative.--Except as provided in subsection
(b), there are authorized to be appropriated to the Secretary to carry
out the activities authorized by this title $200,000,000 for each of
the fiscal years 2003 through 2011, to remain available until expended.
(b) Limit on Use of Funds.--
(1) Notwithstanding subsection (a), the Secretary is
authorized to obligate the use of funds prior to the date
authorized herein, subject to appropriations.
(2) The Secretary shall transmit to the Committee on Energy
and Commerce and the Committee on Science of the House of
Representatives, and to the Senate, a report, with respect to
subsection (a), containing--
(A) a detailed assessment of whether the aggregate
funding levels provided under subsection (a) are the
appropriate funding levels for that program;
(B) a detailed description of how proposals will be
solicited and evaluated, including a list of all
activities expected to be undertaken;
(C) a detailed list of technical milestones for
each coal and related technology that will be pursued;
and
(D) a detailed description of how the program will
avoid problems enumerated in General Accounting Office
reports on the Clean Coal Technology Program, including
problems that have resulted in unspent funds and
projects that failed either financially or
scientifically.
(3) Thirty days elapse from receipt of the report required
by this subsection after which the Secretary may then use the
authorization of appropriations provided by this section.
(c) Applicability.--Subsection (b) shall not apply to any project
begun before September 30, 2003.
SEC. 202. CLEAN COAL POWER INITIATIVE CRITERIA.
(a) In General.--The Secretary shall not provide funding under this
title for any project that does not advance efficiency, environmental
performance, and cost competitiveness well beyond the level of
technologies that are in operation or have been demonstrated as of the
date of the enactment of this Act.
(b) Technical Criteria for Clean Coal Power Initiative.--
(1) Gasification.--
(A) In allocating the funds made available under
section 201(a), the Secretary shall ensure that not
less than 55 percent, but not more than 80 percent, of
the funds are used for coal-based gasification
technologies, coal based projects that includes the
separation and capture of carbon dioxide, or coal based
projects that include gasification combined cycle,
gasification fuel cells, gasification coproduction, or
hybrid gasification/combustion.
(B) The Secretary shall set technical milestones
specifying emissions levels that coal gasification
projects must be designed to and reasonably expected to
achieve. The milestones shall get more restrictive
through the life of the program. The milestones shall
be designed to achieve by 2020 coal gasification
projects able--
(i) to remove 99 percent of sulfur dioxide;
(ii) to emit no more than .05 lbs of
NO<INF>X</INF> per million BTU;
(iii) to achieve substantial reductions in
mercury emissions; and
(iv) to achieve a thermal efficiency of--
(I) 60 percent for coal of more
than 9,000 Btu;
(II) 59 percent for coal of 7,000
to 9,000 Btu; and
(III) 57 percent for coal of less
than 7,000 Btu.
(2) Other projects.--For projects not described in
paragraph (1), the Secretary shall set technical milestones
specifying emissions levels that the projects must be designed
to and reasonably expected to achieve. The milestones shall get
more restrictive through the life of the program. The
milestones hall be designed to achieve by 2010 projects able--
(A) to remove 97 percent of sulfur dioxide;
(B) to emit no more than .08 lbs of NO<INF>x</INF>
per million BTU;
(C) to achieve substantial reductions in mercury
emissions; and
(D) to achieve a thermal efficiency of--
(i) 45 percent for coal of more than 9,000
Btu;
(ii) 44 percent for coal 7,000 to 9,000
Btu; and
(iii) 42 percent for coal of less than
7,000 Btu.
(3) Consultation.--Before setting the technical milestones
under paragraphs (1)(B) and (2), the Secretary shall consult
with the Administrator of the Environmental Protection Agency
and interested entities, including coal producers, industries
using coal, organizations to promote coal or advanced coal
technologies, environmental organizations, and organizations
representing workers.
(4) Existing units.--In the case of projects at existing
units, in lieu of the thermal efficiency requirements set forth
in paragraph (1)(B)(iv) and (2)(D), the projects shall be
designed to achieve an overall thermal design efficiency
improvement compared to the efficiency of the unit as operated,
of not less than--
(A) 7 percent for coal of more than 9,000 Btu;
(B) 6 percent for coal of 7,000 to 9,000 Btu; or
(C) 4 percent for coal of less than 7,000 Btu.
(c) Financial Criteria.--The Secretary shall not provide a funding
award under this title 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;
(2) the recipient will provide sufficient information to
the Secretary for the Secretary to ensure that the award funds
are 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.
(d) Financial Assistance.--The Secretary shall provide financial
assistance to projects that meet the requirements of subsections (a),
(b), and (c) and are likely to--
(1) achieve 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;
and
(3) demonstrate methods and equipment that are applicable
to 25 percent of the electricity generating facilities that use
coal as the primary feedstock as of the date of the enactment
of this Act.
(e) Federal Share.--The Federal share of the cost of a coal or
related technology project funded by the Secretary shall not exceed 50
percent. The Federal share may repaid over a reasonable period of time
as agreed upon with the Secretary.
(f) Applicability.--No technology, or level of emission reduction,
shall be treated as adequately demonstrated for purposes of section 111
of the Clean Air Act, achievable for purposes of section 169 of that
Act, or achievable in practice for purposes of section 171 of that Act
solely by reason of the use of such technology, or the achievement of
such emission reduction, by one or more facilities receiving assistance
under this title.
SEC. 203. REPORT.
(a) Not later than 1 year after the date of the enactment of this
Act, and once every 2 years thereafter through 2011, the Secretary, in
consultation with other appropriate Federal agencies, shall transmit to
the Committee on Energy and Commerce and the Committee on Science of
the House of Representatives, and to the Senate, a report describing--
(1) the technical milestones set forth in section 202 and
how those milestones ensure progress toward meeting the
requirements of subsections (b)(1)(B) and (b)(2) of section
202; and
(2) the status of projects funded under this title.
SEC. 204. CLEAN COAL CENTERS OF EXCELLENCE.
As part of the program authorized in section 201, the Secretary
shall award competitive, merit-based grants to universities for the
establishment of Centers of Excellence for Energy Systems of the
Future. The Secretary shall provide grants to universities that can
show the greatest potential for advancing new clean coal technologies.
TITLE III--CLEAN COAL INCENTIVES
Subtitle A--Credit for Emission Reductions and Efficiency Improvements
in Existing Coal-Based Electricity Generation Facilities
SEC. 301. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY
UNIT.
(a) Credit for Production From a Qualifying Clean Coal Technology
Unit.--Subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to business related credits) is
amended by adding at the end the following new section:
``SEC. 451. 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 technology production
credit, multiplied by
``(2) the applicable percentage of the kilowatt hours of
electricity produced and the equivalent heat value of other
fuels or chemicals produced by the taxpayer during such taxable
year at a qualifying clean coal technology unit, but only if
such production occurs during the 10-year period beginning on
the date the unit was returned to service after becoming a
qualifying clean coal technology unit.
``(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 per kilowatt-hour of electricity produced and
the equivalent heat value of other fuels or chemicals produced
from not more than 300,000 kilowatts of nameplate capacity at
the same qualifying clean coal technology unit.
``(2) Inflation adjustment.--For calendar years after 2003,
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) Applicable Percentage.--For purposes of this section, with
respect to any qualifying clean coal technology unit, the applicable
percentage is the percentage equal to the ratio which the portion of
the national megawatt capacity limitation allocated to the taxpayer
with respect to such unit under subsection (e) bears to the total
megawatt capacity of such unit.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualifying clean coal technology unit.--The term
`qualifying clean coal technology unit' means a clean coal
technology unit of the taxpayer which--
``(A) on the date of the enactment of this section
was a coal-based electricity generating steam
generator-turbine unit which was not a clean coal
technology unit;
``(B) has a nameplate capacity rating of not more
than 300,000 kilowatts as of the date of enactment of
this section;
``(C) becomes a clean coal technology unit as the
result of the retrofitting, repowering, or replacement
of the unit with clean coal technology, which nameplate
capacity may then be greater than 300,000 kilowatts,
during the 10-year period beginning on the date of the
enactment of this section;
``(D) is not receiving nor is scheduled to receive
funding under the Clean Coal Technology Program, the
Power Plant Improvement Initiative, or the Clean Coal
Power Initiative administered by the Secretary of
Energy; and
``(E) receives an allocation of a portion of the
national megawatt capacity limitation under subsection
(e), which shall not exceed 300,000 kilowatts.
``(2) Clean coal technology unit.--The term `clean coal
technology unit' means a unit which--
``(A) uses clean coal technology, including
advanced pulverized coal or atmosphere fluidized bed
combustion, pressurized fluidized bed combustion,
integrated gasification combined cycle, or any other
technology for the production of electricity;
``(B) uses at least 75 percent coal to produce 50
percent or more of its thermal output as electricity;
``(C) has a design net heat rate of at least 500
less than that of such unit as described in paragraph
(1)(A);
``(D) has a maximum design net heat rate of not
more than 9,500; and
``(E) meets the pollution control requirements of
paragraph (3).
``(3) Pollution control requirements.--
``(A) In general.--A unit meets the requirements of
this paragraph if--
``(i) its emissions of sulfur dioxide,
nitrogen oxide, or particulates meet the lower
of the emission levels for each such emission
specified in--
``(I) subparagraph (B), or
``(II) the new source performance
standards of the Clean Air Act (42
U.S.C. 7411) which are in effect for
the category of source at the time of
the retrofitting, repowering, or
replacement of the unit, and
``(ii) its emissions do not exceed any
relevant emission level specified by regulation
pursuant to the hazardous air pollutant
requirements of the Clean Air Act (42 U.S.C.
7412) is effect at the time of the
retrofitting, repowering, or replacement.
``(B) Specific levels.--The levels specified in
this subparagraph are--
``(i) in the case of sulfur dioxide
emissions, 50 percent of the sulfur dioxide
emission levels specified in the new source
performance standards of the Clean Air Act (42
U.S.C. 7411) in effect on the date of the
enactment of this section for the category of
source,
``(ii) in the case of nitrogen oxide
emissions--
``(I) 0.1 pound per million Btu of
heat input if the unit is not a
cyclone-fired boiler, and
``(II) if the unit is a cyclone-
fired boiler, 15 percent of the
uncontrolled nitrogen oxide emissions
from such boilers, and
``(iii) in the case of particulate
emissions, 0.02 pound per million Btu of heat
input.
``(4) Design net heat rate.--The design net heat rate with
respect to any unit, measured in Btu per kilowatt hour (HHV)--
``(A) shall be based on the design annual heat
input to and the design annual net electrical power,
fuels and chemicals output from such unit (determined
without regard to such unit's co-generation of steam),
``(B) shall be adjusted for the heat content of the
design coal to be used by the unit if it is less than
12,000 Btu per pound according to the following
formula:
Design net heat rate = Unit net heat rate x [1-{((12,000-design coal
heat content, Btu per pound)/1,000) x 0.013}],
``(C) shall be corrected for the site reference
conditions of--
``(i) elevation above sea level of 500
feet,
``(ii) air pressure of 14.4 pounds per
square inch absolute (psia),
``(iii) temperature, dry bulb of 63 deg.F,
``(iv) temperature, wet bulb of 54 deg.F,
and
``(v) relative humidity of 55 percent, and
``(D) shall be adjusted (or credit given) for any
qualifying unit that installs carbon capture controls
that remove not less than 50 percent of the unit's
carbon dioxide emissions up to the design heat rate
level that would have resulted without installation of
carbon capture controls.
``(5) HHV.--The term `HHV' means higher heating value.
``(6) Application of certain rules.--The rules of
paragraphs (3), (4), and (5) of section 45(d) shall apply.
``(7) Inflation adjustment factor.--
``(A) In general.-- The term `inflation adjustment
factor' means, with respect to a 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 2003.
``(B) GDP Implicit price deflator.--The term `GDP
implicit price deflator' means the most recent revision
of the implicit price deflator for the gross domestic
product as computed by the Department of Commerce
before March 15 of the calendar year.
``(8) Noncompliance with pollution laws.--For purposes of
this section, a unit which is not in compliance with the
applicable State and Federal pollution prevention, control, and
permit requirements for any period of time shall not be
considered to be a qualifying clean coal technology unit during
such period.
``(e) National Limitation on the Aggregate Capacity of Qualifying
Clean Coal Technology Units.--
``(1) In general.--For purposes of subsection (d)(1)(E),
the national megawatt capacity limitation for qualifying clean
coal technology units is 4,000 megawatts.
``(2) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitation for
qualifying clean coal technology units in such manner as the
Secretary may prescribe under the regulations under paragraph
(3) provided, however, that such allocation shall not exceed
300,000 kilowatts per qualifying clean coal technology unit.
``(3) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall prescribe
such regulations as may be necessary or appropriate--
``(A) to carry out the purposes of this subsection,
``(B) to limit the capacity of any qualifying clean
coal technology unit to which this section applies so
that the combined megawatt capacity allocated to all
such units under this subsection when all such units
are placed in service during the 10-year period
described in subsection (d)(1)(C), does not exceed
4,000 megawatts,
``(C) to provide a certification process under
which the Secretary, in consultation with the Secretary
of Energy, shall approve and allocate the national
megawatt capacity limitation--
``(i) to encourage the units with the
highest thermal efficiencies, when adjusted for
the heat content of the design coal and site
reference conditions described in subsection
(d)(4)(C), and superior environmental
performance compared to other proposals, be
placed in service as soon as possible,
``(ii) to allocate capacity to taxpayers
that have a definite and credible plan for
placing into commercial operation a qualifying
clean coal technology unit, including--
``(I) a site,
``(II) contractual commitments for
procurement and construction or, in the
case of regulated utilities, the
agreement of the State utility
commission,
``(III) filings for all necessary
preconstruction approvals,
``(IV) a demonstrated record of
having successfully completed
comparable projects on a timely basis,
and
``(V) such other factors that the
Secretary determines are appropriate,
``(D) to allocate the national megawatt capacity
limitation to a portion of the capacity of a qualifying
clean coal technology unit if the Secretary determines
that such an allocation would maximize the amount of
efficient production encouraged with the available tax
credits,
``(E) to set progress requirements and conditional
approvals so that capacity allocations for clean coal
technology units that become unlikely to meet the
necessary conditions for qualifying can be reallocated
by the Secretary to other clean coal technology units,
and
``(F) to provide taxpayers with opportunities to
correct administrative errors and omissions with
respect to allocations and record keeping within a
reasonable period after discovery, taking into account
the availability of regulations and other
administrative guidance from the Secretary.''.
(b) Credit Treated as Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986, as amended by this Act, 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 qualifying clean coal technology production
credit determined under section 45I(a).''.
(c) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(16) No carryback of section 45i 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 45I may
be carried back to a taxable year ending on or before the date
of the enactment of section 45I.''.
(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 this Act, is amended by adding at the end the
following new item:
``Sec. 45I. Credit for production from a qualifying clean coal
technology unit.''.
(e) Effective Date.--The amendments made by this section shall
apply to production after the date of the enactment of this act, in
taxable years ending after such date.
Subtitle B--Incentives for Early Commercial Applications of Advanced
Clean Coal Technologies
SEC. 302. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN COAL
TECHNOLOGY.
(a) Allowance of Qualifying Advanced 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 new
paragraph:
``(4) the qualifying advanced clean coal technology unit
credit.''.
(b) Amount of Qualifying Advanced 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 new section:
``SEC. 48A. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY UNIT CREDIT.
``(a) In General.--For purposes of section 46, the qualifying
advanced clean coal technology unit credit for any taxable year is an
amount equal to 10 percent of the applicable percentage of the
qualified investment in a qualifying advanced clean coal technology
unit for such taxable year.
``(b) Qualifying Advanced Clean Coal Technology Unit.--
``(1) In general.--For purposes of subsection (a), the term
``q1ualifying advanced clean coal technology unit'' means an
advanced clean coal technology unit of the taxpayer--
``(A)(i)(I) in the case of a unit first placed in
service after the date of the enactment of this
section, the original use of which commences with the
taxpayer, or
``(II) in the case of the retrofitting or
repowering of a unit first placed in service before
such date of enactment, the retrofitting or repowering
of which is completed by the taxpayer after such date,
or
``(ii) which is acquired through purchase (as
defined by section 179(d)(2)),
``(B) which is depreciable under section 167,
``(C) which has a useful life of not less than 4
years,
``(D) which is located in the United States,
``(E) which is not receiving nor is scheduled to
receive funding under the Clean Coal Technology
Program, the Power Plant Improvement Initiative, or the
Clean Coal Power Initiative administered by the
Secretary of Energy,
``(F) which is not a qualifying clean coal
technology unit, and
``(G) which receives an allocation of a portion of
the national megawatt capacity limitation under
subsection (f).
``(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 unit 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 as election, once
made, may be revoked only with the consent of the Secretary.
``(3) Noncompliance with pollution laws.--For purposes of
this subsection, a unit which is not in compliance with the
applicable State and Federal pollution prevention, control, and
permit requirements for any period of time shall not be
considered to be a qualifying advanced clean coal technology
unit during such period.
``(c) Applicable Percentage.--For purposes of this section, with
respect to any qualifying advanced clean coal technology unit, the
applicable percentage is the percentage equal to the ratio which the
portion of the national megawatt capacity limitation allocated to the
taxpayer with respect to such unit under subsection (f) bears to the
total megawatt capacity of such unit.
``(d) Advanced Clean Coal Technology Unit.--For purposes of this
section--
``(1) In general.--The term `advanced clean coal technology
unit' means a new, retrofit, or repowering unit of the taxpayer
which--
``(A) is--
``(i) an eligible advanced pulverized coal
or atmospheric fluidized bed combustion
technology unit,
``(ii) an eligible pressurized fluidized
bed combustion technology unit,
``(iii) an eligible integrated gasification
combined cycle technology unit, or
``(iv) an eligible other technology unit,
and
``(B) meets the carbon emission rate requirements
of paragraph (6).
``(2) Eligible advanced pulverized coal or atmospheric
fluidized bed combustion technology unit.--The term `eligible
advanced pulverized coal or atmospheric fluidized bed
combustion technology unit' means a clean coal technology unit
using advanced pulverized coal or atmospheric fluidized bed
combustion technology which--
``(A) is placed in service after the date of the
enactment of this section and before January 1, 2015,
and
``(B) has a design net heat of not more than 8,500
(8,900 in the case of units placed in service before
2011).
``(3) Eligible pressurized fluidized bed combustion
technology unit.--The term `eligible pressurized fluidized bed
combustion technology unit' means a clean coal technology unit
using pressurized fluidized bed combustion technology which--
``(A) is placed in service after the date of the
enactment of this section and before January 1, 2019,
and
``(B) has a design net heat of not more than 7,720
(8,900 in the case of units placed in service before
2011, and 8,500 in the case of units placed in service
after 2010 and before 2015).
``(4) Eligible integrated gasification combined cycle
technology unit.--The term `eligible integrated gasification
combined cycle technology unit' means a clean coal technology
unit using integrated gasification combined cycle technology,
with or without fuel or chemical co-production, which--
``(A) is placed in service after the date of the
enactment of this section and before January 1, 2019,
``(B) has a design net heat rate of not more than
7,720 (8,900 in the case of units placed in service
before 2011, and 8,500 in the case of units placed in
service after 2010 and before 2015), and
``(C) has a net thermal efficiency (HHV) using coal
with fuel or chemical co-production of not less than
44.2 percent (38.4 percent in the case of units placed
in service before 2011, and 40.2 percent in the case of
units placed in service after 2010 and before 2015).
``(5) Eligible other technology unit.--The term `eligible
other technology unit' means a clean coal technology unit using
any other technology for the production of electricity which is
placed in service after the date of the enactment of this
section and before January 1, 2019.
``(6) Carbon emission rate requirements.--
``A) In general.--Except as provided in
subparagraph (B), a unit meets the requirements of this
paragraph if--
``(i) in the case of a unit design coal
with a heat content of not more than 9,000 Btu
per pound, the carbon emission rate is less
than 0.60 pound of carbon per kilowatt hour,
and
``(ii) in the case of a unit design coal
with a heat content of more than 9,000 Btu per
pound, the carbon emission rate is less than
0.54 pound of carbon per kilowatt hour.
``(B) Eligible other technology unit.--In the case
of an eligible other technology unit, subparagraph (A)
shall be applied by substituting `0.51' and `0.459' for
`0.60' and `0.54', respectively.
``(e) General Definitions.--Any term used in this section which is
also used in section 45I shall have the meaning given such term in
section 45I.
``(f) National Limitation on the Aggregate Capacity of Advanced
Clean Coal Technology Units.--
``(1) In general.--For purposes of subsection (b)(1)(G),
the national megawatt capacity limitation is--
``(A) for qualifying advanced clean coal technology
units using advanced pulverized coal or atmospheric
fluidized bed combustion technology, not more than
1,000 megawatts (not more than 500 megawatts in the
case of units placed in service before 2011),
``(B) for such units using pressurized fluidized
bed combustion technology, not more than 500 megawatts
(not more than 250 megawatts in the case of units
placed in service before 2011),
``(C) for such units using integrated gasification
combined cycle technology, with or without fuel or
chemical co-production, not more than 2,000 megawatts
(not more than 750 megawatts, or not more than one
project with a design net heat rate greater than 8900
Btu per kilowatt hour, whichever is less, in the case
of units placed in service before 2011), and
``(D) for such units using other technology for the
production of electricity, not more than 500 megawatts
(not more than 250 megawatts in the case of units
placed in service before 2011).
``(2) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitation for
qualifying advanced clean coal technology units in such manner
as the Secretary may prescribe under the regulations under
paragraph (3).
``(3) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall prescribe
such regulations as may be necessary or appropriate--
``(A) to carry out the purposes of this subsection
and section 45J,
``(B) to limit the capacity of any qualifying
advanced clean coal technology unit to which this
section applies so that the combined megawatt capacity
of all such units to which this section applies does
not exceed 4,000 megawatts,
``(C) to provide a certification process described
in section 45I(e)(3)(C)(i)-(ii),
``(D) to carry out the purposes described in
subparagraphs (D), (E), and (F) of section 45I(e)(3),
and
``(E) to reallocate capacity which is not allocated
to any technology described in subparagraphs (A)
through (D) of paragraph (1) because an insufficient
number of qualifying units request an allocation for
such technology, to another technology described in such subparagraphs
in order to maximize the amount of energy efficient production
encouraged with the available tax credits.
``(4) Selection criteria.--For purposes of paragraph
(3)(C), the selection criteria for allocating the national
megawatt capacity limitation to qualifying advanced clean coal
technology units--
``(A) shall be established by the Secretary of
Energy as part of a competitive solicitation,
``(B) shall include primary criteria of minimum
design net heat rate, maximum design thermal
efficiency, environmental performance, and lowest cost
to the Government,
``(C) shall include criteria for the selection of a
unit(s) that achieves a thermal efficiency of lower
than 8,900 Btu per kilowatt hour in that instance where
two or more projects are otherwise eligible for the
credit provided by this section, and have applied to
the Secretary for selection at or near the same period
in time, and
``(D) shall include supplemental criteria as
determined appropriate by the Secretary of Energy.
``(g) 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 unit placed in
service by the taxpayer during such taxable year (in the case of a unit
described in subsection (b)(1)(A)(i)(II), only that portion of the
basis of such unit which is properly attributable to the retrofitting
or repowering of such unit).
``(h) 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 (g) 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
advanced clean coal technology unit 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 unit 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.
``(i) 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.''.
(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 new paragraph:
``(6) Special rules relating to qualifying advanced clean
coal technology unit.--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 advanced clean coal
technology unit (as defined by section 48A(b)(1))
multiplied by a fraction whose numerator is the number
of years remaining to fully depreciate under this title
the qualifying advanced clean coal technology unit
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
advanced clean coal technology unit 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 unit under section 48A, except that the
amount of the increase in tax under subparagraph (A) of
this paragraph shall be substituted for 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 unit.''.
(d) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(17) 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 advanced clean
coal technology unit credit determined under section 48A may be
carried back to a taxable year ending on or before the date of
the 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 new clause:
``(iv) the portion of the basis of any
qualifying advanced clean coal technology unit
attributable to any qualified investment (as
defined by section 48A(g)).''.
(2) Section 50(a)(4) of the Internal Revenue Code of 1986
is amended by striking ``and (2)'' and inserting ``(2), and
(6)''.
(3) Section 50(c) of the Internal Revenue Code of 1986 is
amended by adding at the end the following new paragraph:
``(6) Nonapplication.--Paragraphs (1) and (2) shall not
apply to any qualifying advanced 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 the Internal Revenue Code of 1986
is amended by inserting after the item relating to section 48
the following new item:
``Sec. 48A. Qualifying advanced clean coal technology unit credit.''.
(f) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, under
rules similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990).
SEC. 2212. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED CLEAN COAL
TECHNOLOGY UNIT.
(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), as amended by this Act, is amended by adding at the end the
following new section:
``SEC. 45J. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED CLEAN COAL
TECHNOLOGY UNIT.
``(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 applicable percentage (as determined under
section 48A(c)) of 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 unit during the 10-year period beginning
on the date the unit was originally placed in service (or returned to
service after becoming a qualifying advanced clean coal technology
unit).
``(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 unit shall be determined as follows:
``(1) Where the qualifying advanced clean coal technology
unit is producing electricity only:
``(A) In the case of a unit originally placed in
service before 2011, if--
------------------------------------------------------------------------
The applicable amount
is:
-------------------------
``The design net heat rate is: For 1st 5 For 2d 5
years of years of
such such
service service
------------------------------------------------------------------------
Not more than 8,500........................... $.0060 $.0038
More than 8,500 but not more than 8,750....... $.0025 $.0010
More than 8,750 but less than 8,900........... $.0010 $.0010.
------------------------------------------------------------------------
``(B) In the case of a unit originally placed in
service after 2010 and before 2015, if--
------------------------------------------------------------------------
The applicable amount
is:
-------------------------
``The design net heat rate is: For 1st 5 For 2d 5
years of years of
such such
service service
------------------------------------------------------------------------
Not more than 7,770........................... $.0105 $.0090
More than 7,770 but not more than 8,125....... $.0085 $.0068
More than 8,125 but less than 8,350........... $.0075 $.0055.
------------------------------------------------------------------------
``(C) In the case of a unit originally placed in
service after 2014 and before 2019, if--
------------------------------------------------------------------------
The applicable amount
is:
-------------------------
``The design net heat rate is: For 1st 5 For 2d 5
years of years of
such such
service service
------------------------------------------------------------------------
Not more than 7,380........................... $.0140 $.0115
More than 7,380 but not more than 7,720....... $.0120 $.0090.
------------------------------------------------------------------------
``(2) Where the qualifying advanced clean coal technology
unit is producing fuel or chemicals:
``(A) In the case of a unit originally placed in
service before 2011, if--
------------------------------------------------------------------------
The applicable amount
is:
-------------------------
``The unit design net thermal efficiency (HHV) For 1st 5 For 2d 5
is: years of years of
such such
service service
------------------------------------------------------------------------
Not less than 40.6 percent.................... $.0060 $.0038
Less than 40.6 but not less than 40 percent... $.0025 $.0010
Less than 40 but not less than 38.4 percent... $.0010 $.0010.
------------------------------------------------------------------------
``(B) In the case of a unit originally placed in
service after 2010 and before 2015, if--
------------------------------------------------------------------------
The applicable amount
is:
-------------------------
``The unit design net thermal efficiency (HHV) For the 1st For 2d 5
is: 5 years of years of
such such
service service
------------------------------------------------------------------------
Not less than 43.6 percent.................... $.0105 $.0090
Less than 43.6 but not less than 42 percent... $.0085 $.0068
Less than 42 but not less than 40.2 percent... $.0075 $.0055.
------------------------------------------------------------------------
``(C) In the case of a unit originally placed in
service after 2014 and before 2019, if--
------------------------------------------------------------------------
The applicable amount
is:
-------------------------
``The unit design net thermal efficiency (HHV) For 1st 5 For 2d 5
is: years of years of
such such
service service
------------------------------------------------------------------------
Not less than 44.2 percent.................... $.0140 $.0115
Less than 44.2 but not less than 43.9 percent. $.0120 $.0090.
------------------------------------------------------------------------
``(c) A qualifying clean coal technology facility originally placed
in service before 2009 that has a design heat rate that meets a lower
heat rate test in paragraphs (1)(A)(B) and (C) and (2) (A)(B) and (C)
above or a qualifying clean coal technology facility originally placed
in service before 2013 that has a design heat rate that meets a lower
heat rate test in paragraphs (1)(C), or (2)(C) above shall receive the
highest applicable amount with respect to a production tax credit for
which it qualifies.
``(d) Inflation Adjustment.--For calendar years after 2003, each
amount in paragraphs (1) and (2) of subsection (b) 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.
``(e) Definitions and Special Rules.--For purposes of this
section--
``(1) In general.--Any term used in this section which is
also used in section 451 or 48A of the Internal Revenue Code of
1986 shall have the meaning given such term in such section.
``(2) Applicable rules.--The rules of paragraphs (3), (4),
and (5) of section 45(d) of the Internal Revenue Code of 1986
shall apply.''.
(b) Credit Treated as Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986, as amended by this Act, is amended by
striking ``plus'' at the end of paragraph (19), by striking the period
at the end of paragraph (20) and inserting ``, plus'', and by adding at
the end the following new paragraph:
``(21) the qualifying advanced clean coal technology
production credit determined under section 45J(a).''.
(c) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(18) No carryback of section 45j 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 45J
may be carried back to a taxable year ending on or before the
date of the enactment of section 45J.''.
(d) 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 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.''.
(e) 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 this Act, is amended by adding at the end the
following new item:
``Sec. 45J. Credit for production from a qualifying advanced clean coal
technology unit.''.
(f) 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.
Subtitle C--Treatment of Persons Not Able To Use Entire Credit
SEC. 2221. TREATMENT OF PERSONS NOT ABLE TO USE ENTIRE CREDIT.
(a) In General.--Section 45I of the Internal Revenue Code of 1986,
as added by this Act, is amended by adding at the end the following new
subsection:
``(f) Treatment of Persons Not Able To Use Entire Credit.--
``(1) Allowance of credits.--
``(A) In general.--Any credit allowable under this
section, section 45J, or section 48A 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 insure 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.
``(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 in
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.
``(5) Credit not income.--Any transfer under paragraph (2)
or use under paragraph (3) of any credit to which paragraph
(1)(A) applies shall not be treated as income for purposes of
section 501(c)(12).
``(6) Treatment of unrelated persons.--For purposes of this
subsection, sales among and between persons described in
clauses (i), (ii), (iii), and (v) of paragraph (1)(A) shall be
treated as sales between unrelated parties.''.
(b) Effective Date.--The amendment made by this section shall apply
to production after the date of the enactment of this Act, in taxable
years ending after such date.
<all>