Credit for coal refuse used to produce electricity at certain facilities

(a)

In general

Section 45(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(12)

Coal refuse facilities

(A)

Determination of credit amount

(i)

In general

The credit determined under this section (without regard to this subparagraph) for any taxable year shall be an amount equal to the product of— (I)$12.50, multiplied by (II)the tons of coal refuse used at a coal refuse facility to produce electricity at such facility during the 10-year period beginning on January 1, 2019. (ii)

Exclusion

Other than coal refuse removed from sites that are subject to the current remediation and reclamation activities of a coal refuse facility, coal refuse generated from sites where coal is mined after the effective date of this legislation is excluded from the determination of the credit amount in this section. (B)

Eligible recipient

For purposes of this subsection, the term eligible recipient means, with respect to a coal refuse facility for a taxable year, a taxpayer who, for each ton of eligible coal refuse described in subparagraph (A) for such taxpayer for the previous taxable year, contributed $0.50 to the State in which such facility is located for restoring riparian buffers within the communities where the coal refuse is being removed or consumed, or in communities located downstream of that activity, for the purpose of improving water quality downstream of the communities affected by such coal refuse and reducing carbon emissions in such communities. (C)

Credit eligibility

In the case of a facility described in subparagraph (A), if the owner of such facility is not the producer of the electricity, the person eligible for the credit determined under subparagraph (A) shall be the lessee or the operator of such facility. (D)

Application of rules

Rules similar to the rules of paragraphs (1), (3), and (5) of this subsection shall apply for purposes of determining the amount of any increase under this paragraph.

(b)

Coal refuse facility defined

Section 45(d) of such Code is amended by adding at the end the following new paragraph:

(12)

Coal refuse facility

In the case of a facility using coal refuse to produce electricity, the term coal refuse facility means any facility— (A)which was originally placed in service prior to January 1, 2019, and combusts coal refuse or fuel composed of at least 75 percent coal refuse by BTU energy value, and (B)uses— (i)at a minimum, a circulating fluidized bed combustion unit or a pressurized fluidized bed combustion unit, equipped with a limestone injection system for control of acid gases, and (ii)a fabric filter particulate emission control system.

(c)

Coal refuse

Section 45(c) of such Code is amended by adding at the end the following new paragraph:

(11)

Coal refuse

The term coal refuse means any waste coal, rock, shale, slurry, culm, gob, boney, slate, clay, and related materials associated with or near a coal seam that are either brought aboveground or otherwise removed from a coal mine in the process of mining coal or that are separated from coal during the cleaning or preparation operations. Such term includes underground development wastes, coal processing wastes and excess spoil, but does not include overburden from surface mining activities.

(d)

Allowance of credit against alternative minimum tax

Section 38(c)(4)(B)(v) of such Code is amended by inserting or section 45(e)(12) (relating to coal refuse facilities) before the comma at the end. (e)

Credit refundable

For purposes of this title, the credit allowed by reason of this section shall be treated as a credit allowed under subpart C (and not this subpart). (f)

Passive activity losses

Section 469(d) of the Internal Revenue Code of 1986 is amended by adding to section 469(d)(2)(A)(ii) (other than section 27 and section 45(e)(12)). (g)

Credit made part of general business credit

Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by— (1)striking plus at the end of paragraph (31); (2)striking the period at the end of paragraph (32) and inserting , plus; and (3)adding at the end the following new paragraph:

(33)the coal refuse facility credit determined under section 45(e)(12).

(h)

Advance payment of credit

Subchapter B of chapter 65 of such Code is amended by adding at the end the following new section:

6433.

Elective payment for coal refuse facilities

(a)

In general

Any person electing the application of this section with respect to any eligible coal refuse facility shall be treated as making a payment against the tax imposed by subtitle A for the taxable year equal to the amount of the credit that would be determined under section 45(e)(12) for such facility for such year. Except as provided in subsection (b), such payment shall be treated as made on the later of the due date of the return of such tax or the date on which such return is filed. (b)

Quarterly election

(1)

In general

At the close of any quarter of the taxable year of any taxpayer entitled to a credit with respect to an eligible coal refuse facility, if a claim is filed under this section, the Secretary shall pay (without interest) an amount equal to the credit determined under section 45 for such quarter, calculated as if such credit were determined on a quarterly basis. (2)

Time for filing claim

No claim filed under this subsection (b) shall be allowed unless filed during the first quarter following the last quarter included in the claim. (3)

Payment of claim

Notwithstanding paragraph (1) of this subsection, if the Secretary has not paid pursuant to a claim filed under this section within 45 days of the date of the filing of such claim (20 days in the case of an electronic claim), the claim shall be paid with interest from such date determined by using the overpayment rate and method under section 6621. (c)

Special rules for partnerships and s corporations

In the case of an eligible coal refuse facility owned or used by a partnership or an S corporation— (1)the elections under subsection (a) or (b) may be made only by such partnership or S corporation, (2)such partnership or S corporation shall be treated as making the payment referred to in subsection (a) only to the extent of the proportionate share of such partnership or S corporation as is owned by persons who would be treated as making such payment if the property were owned or used by such persons, and (3)the return required to be made by such partnership or S corporation under section 6031 or 6037 (as the case may be) shall be treated as a return of tax for purposes of subsection (a). (d)

Coordination with production credits

In the case of any eligible coal refuse facility with respect to which an election is made under subsection (a) or (b), no credit shall be determined under section 45 with respect to such facility for the taxable year in which such election is made. (e)

Eligible coal refuse facility

The term eligible coal refuse facility means a facility eligible for a credit during the taxable year pursuant to section 45(d)(12). (f)

Exclusion from gross income

Any credit or refund allowed or made by reason of this section shall not be includible in gross income or alternative minimum taxable income. (g)

Regulations

The Secretary may by regulations prescribe the conditions, not inconsistent with the provisions of this section, under which payments may be made under this section.

(i)

Effective date

The amendments made by this section shall apply to coal refuse used to produce electricity after December 31, 2018, in taxable years beginning after such date.