[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2606 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2606
To provide project assistance, loan guarantees, and tax credits for a
coal gasification demonstration project, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 24, 2001
Mrs. Capito introduced the following bill; which was referred to the
Committee on Science, and in addition to the Committees on Energy and
Commerce, and Ways and Means, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide project assistance, loan guarantees, and tax credits for a
coal gasification demonstration project, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Coal Gasification Commercial
Demonstration Project Act of 2001''.
SEC. 2. DEMONSTRATION.
(a) Project Grant.--
(1) Authority.--The Secretary of Energy shall make a grant
for a project to demonstrate the commercial viability of a new
coal gasification combined cycle technology plant.
(2) Amount.--A grant made under this subsection may be in
an amount of--
(A) $5,000,000 for design, engineering, and other
necessary preconstruction project development
activities; and
(B) $10,000,000 for construction costs (including
engineering, procurement, and associated project
development activities).
(3) Location.--The demonstration project for which a grant
is made under this subsection shall be located in Kanawha
County, West Virginia, or any adjacent county.
(4) Timing.--Not later than 30 days after the date of the
enactment of this Act, any interested party may submit to the
Secretary of Energy a proposal to construct and operate a coal
gasification plant in West Virginia consistent with this
subsection, and not later than 60 days after the date of the
enactment of this Act, the Secretary of Energy shall select the
entity to be awarded the grant.
(b) Additional Demonstration Assistance.--There are authorized to
be appropriated to the Secretary of Energy for each of fiscal years
2003 and 2004 $20,000,000 for providing assistance to additional
projects that demonstrate the commercial viability of coal gasification
technology.
SEC. 3. LOAN GUARANTEES.
(a) Authority.--The Secretary of Energy shall provide loan
guarantees for the project receiving a grant under section 2(a).
(b) Amount.--The total amount of loans guaranteed under this
section shall be 80 percent of the total project costs of the project
receiving a grant under section 2(a). For purposes of this subsection,
total project costs include the cost of a generally available
commercial loan to finance the project.
(c) Terms and Conditions.--The terms and conditions of a loan
guarantee under this section shall be established by negotiation
between the Secretary of Energy and representatives of the recipient of
the grant under section 2(a). The Secretary--
(1) shall commence such negotiations not later than 30 days
after the selection under section 2(a)(5) of an entity to be
awarded the grant;
(2) shall review the terms and conditions for loan
guarantees in section 201(d) of the Geothermal Energy Research,
Development, and Demonstration Act of 1974 (30 U.S.C. 1141(d))
in order to facilitate the funding and long-term success of the
project;
(3) shall negotiate in good faith and make best efforts to
conclude those negotiations within 120 days; and
(4) if the negotiations are not concluded within 120 days,
shall agree to referral of the dispute regarding terms and
conditions to binding arbitration (as allowed by Executive
Order 12988, February 5, 1996) for a period not to exceed 90
days, so that the objectives of this section are fulfilled.
(d) Definition.--In this section, the term ``loan guarantee'' has
the meaning given that term in section 502(3) of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a(3)).
SEC. 4. PROJECT APPROVAL UNDER CLEAN AIR ACT.
All new source review approvals and related permits required under
the Clean Air Act and under applicable implementation plans under that
Act shall be issued for the project receiving a grant under section
2(a) by the permitting State agency upon--
(1) certification by the permit applicant that emissions of
each pollutant regulated under the Clean Air Act will be no
greater than the average emission rate identified by the
Administrator of the Environmental Protection Agency in the 3
most recently permitted new source review permits for coal
gasification plants as of June 1, 2001; and
(2) certification by the permit applicant, based on
modeling using a model approved for such purposes by the
Administrator and incorporating the most relevant
meteorological and air quality data available to the applicant
as of June 1, 2001, that the plant will not violate any
National Ambient Air Quality Standard nor any Prevention of
Deterioration air quality increment.
SEC. 5. INVESTMENT TAX CREDIT.
(a) Allowance of Qualifying Coal Gasification Technology Facility
Credit.--Section 46 of the Internal Revenue Code of 1986 (relating to
amount of credit) is amended by striking ``and'' at the end of
paragraph (2), by striking the period at the end of paragraph (3) and
inserting ``, and'', and by adding at the end the following:
``(4) the qualifying coal gasification technology facility
credit.''
(b) Amount of Qualifying Coal Gasification Technology Facility
Credit.--Subpart E of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to rules for computing
investment credit) is amended by inserting after section 48 the
following:
``SEC. 48A. QUALIFYING COAL GASIFICATION TECHNOLOGY FACILITY CREDIT.
``(a) In General.--For purposes of section 46, the qualifying coal
gasification technology facility credit for any taxable year is an
amount equal to 10 percent of the qualified investment in a qualifying
coal gasification technology facility for such taxable year.
``(b) Qualifying Coal Gasification Technology Facility.--
``(1) In general.--For purposes of subsection (a), the term
`qualifying coal gasification technology facility' means the
coal gasification project described in section 2 of the Coal
Gasification Commercial Demonstration Project Act of 2001.
``(2) Special rule for sale-leasebacks.--For purposes of
paragraph (1), in the case of a facility which--
``(A) is originally placed in service by a person,
and
``(B) is sold and leased back by such person, or is
leased to such person, within 3 months after the date
such facility was originally placed in service, for a
period of not less than 12 years, such facility shall
be treated as originally placed in service not earlier
than the date on which such property is used under the
leaseback (or lease).
The preceding sentence shall not apply to any property if the
lessee and lessor of such property make an election under this
sentence. Such an election, once made, may be revoked only with
the consent of the Secretary.
``(c) Qualified Investment.--For purposes of subsection (a), the
term `qualified investment' means, with respect to any taxable year,
the basis of a qualifying coal gasification technology facility placed
in service by the taxpayer during such taxable year.
``(d) Qualified Progress Expenditures.--
``(1) Increase in qualified investment.--In the case of a
taxpayer who has made an election under paragraph (5), the
amount of the qualified investment of such taxpayer for the
taxable year (determined under subsection (c) without regard to
this section) shall be increased by an amount equal to the
aggregate of each qualified progress expenditure for the
taxable year with respect to progress expenditure property.
``(2) Progress expenditure property defined.--For purposes
of this subsection, the term `progress expenditure property'
means any property being constructed by or for the taxpayer and
which it is reasonable to believe will qualify as a qualifying
coal gasification technology facility which is being
constructed by or for the taxpayer when it is placed in
service.
``(3) Qualified progress expenditures defined.--For
purposes of this subsection--
``(A) Self-constructed property.--In the case of
any self-constructed property, the term `qualified
progress expenditures' means the amount which, for
purposes of this subpart, is properly chargeable
(during such taxable year) to capital account with
respect to such property.
``(B) Nonself-constructed property.--In the case of
nonself-constructed property, the term `qualified
progress expenditures' means the amount paid during the
taxable year to another person for the construction of
such property.
``(4) Other definitions.--For purposes of this subsection--
``(A) Self-constructed property.--The term `self-
constructed property' means property for which it is
reasonable to believe that more than half of the
construction expenditures will be made directly by the
taxpayer.
``(B) Nonself-constructed property.--The term
`nonself-constructed property' means property which is
not self-constructed property.
``(C) Construction, etc.--The term `construction'
includes reconstruction and erection, and the term
`constructed' includes reconstructed and erected.
``(D) Only construction of qualifying coal
gasification technology facility to be taken into
account.--Construction shall be taken into account only
if, for purposes of this subpart, expenditures therefor
are properly chargeable to capital account with respect
to the property.
``(5) Election.--Except as otherwise provided by
regulations, an election under this subsection may be made only
on or before the due date prescribed by law (including
extensions) for filing the taxpayer's return of the tax imposed
by this chapter for the first taxable year in which the
taxpayer makes a qualified investment. Such an election shall
apply to the taxable year for which made and to all subsequent
taxable years. Such an election, once made, may not be revoked
except with the consent of the Secretary.
``(e) Coordination With Other Credits.--This section shall not
apply to any property with respect to which the rehabilitation credit
under section 47 or the energy credit under section 48 is allowed
unless the taxpayer elects to waive the application of such credit to
such property.
``(f) Termination.--This section shall not apply with respect to
any qualified investment made more than 10 years after the effective
date of this section.''
(c) Recapture.--Section 50(a) of the Internal Revenue Code of 1986
(relating to other special rules) is amended by adding at the end the
following:
``(6) Special rules relating to qualifying coal
gasification technology facility.--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 coal gasification
technology facility (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 coal gasification technology facility
disposed of, and whose denominator is the total number
of years over which such facility would otherwise have
been subject to depreciation. For purposes of the
preceding sentence, the year of disposition of the
qualifying coal gasification technology facility
property shall be treated as a year of remaining
depreciation.
``(B) Property ceases to qualify for progress
expenditures.--Rules similar to the rules of paragraph
(2) shall apply in the case of qualified progress
expenditures for a qualifying coal gasification
technology facility under section 48A, except that the
amount of the increase in tax under subparagraph (A) of
this paragraph shall be substituted in lieu of the
amount described in such paragraph (2).
``(C) Application of paragraph.--This paragraph
shall be applied separately with respect to the credit
allowed under section 38 regarding a qualifying coal
gasification technology facility.''
(d) Special Rule Relating to Basis Adjustment.--Section 50(c) of
the Internal Revenue Code of 1986 (relating to basis adjustment for
investment credit property) is amended by adding at the end the
following:
``(6) Nonapplication.--Paragraphs (1) and (2) shall not
apply to any qualifying coal gasification technology facility
credit under section 48A.''
(e) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules) is amended by adding at the
end the following:
``(10) 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 coal gasification
technology facility credit determined under section 48A may be
carried back to a taxable year ending before the date of
enactment of section 48A.''
(f) Technical Amendments.--
(1) Section 49(a)(1)(C) of the Internal Revenue Code of
1986 is amended by striking ``and'' at the end of clause (ii),
by striking the period at the end of clause (iii) and inserting
``, and'', and by adding at the end the following:
``(iv) the portion of the basis of any
qualifying coal gasification technology
facility attributable to any qualified
investment (as defined by section 48A(c)).''
(2) Section 50(a)(4) of such Code is amended by striking
``and (2)'' and inserting ``(2), and (6)''.
(3) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by adding
after the item relating to section 48 the following:
``Sec. 48A. Qualifying coal gasification
technology facility credit.''
(g) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2001, under rules similar to the
rules of section 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of enactment of the Revenue
Reconciliation Act of 1990).
SEC. 6. PRODUCTION TAX CREDIT.
(a) Credit for Production From Qualifying Coal Gasification
Technology Facility.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business related
credits), is amended by adding at the end the following:
``SEC. 45E. CREDIT FOR PRODUCTION FROM QUALIFYING COAL GASIFICATION
TECHNOLOGY FACILITY.
``(a) General Rule.--For purposes of section 38, the qualifying
coal gasification technology facility production credit of any taxpayer
for any taxable year is equal to--
``(1) the applicable amount of coal gasification technology
production credit, multiplied by
``(2) the kilowatt hours of electricity produced by the
taxpayer during such taxable year at a qualifying coal
gasification facility.
``(b) Applicable Amount.--For purposes of this section, the
applicable amount of coal gasification technology facility production
credit with respect to production from a qualifying coal gasification
technology facility shall be $0.0125.
``(c) Inflation Adjustment Factor.--For calendar years after 2002,
the amount in 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 0.0001 cent, such amount shall
be rounded to the nearest multiple of 0.0001 cent.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) In general.--Any term used in this section which is
also used in section 48A shall have the meaning given such term
in section 48A.
``(2) Inflation adjustment factor.--The term `inflation
adjustment factor' means, with respect to a calendar year, a
fraction the numerator of which is the GDP implicit price
deflator for the preceding calendar year and the denominator of
which is the GDP implicit price deflator for the calendar year
2001.
``(3) GDP implicit price deflator.--The term `GDP implicit
price deflator' means the most recent revision of the implicit
price deflator for the gross domestic product as computed by
the Department of Commerce before March 15 of the calendar
year.''
(b) Credit Treated as Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986 is amended by striking ``plus'' at the
end of paragraph (12), by striking the period at the end of paragraph
(13) and inserting ``, plus'', and by adding at the end the following:
``(14) the qualifying coal gasification technology facility
production credit determined under section 45E(a).''
(c) Transitional Rule.--Section 39(d) of the Internal Revenue Code
of 1986 (relating to transitional rules), as amended by section 5, is
amended by adding at the end the following:
``(11) No carryback of section 45c credit before effective
date.--No portion of the unused business credit for any taxable
year which is attributable to the qualifying coal gasification
technology facility production credit determined under section
45E may be carried back to a taxable year ending before the
date of enactment of section 45E.''
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``Sec. 45E. Credit for production from
qualifying coal gasification
technology facility.''
(e) Effective Date.--The amendments made by this section shall
apply to production on or after the date of enactment of this Act.
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