1.This Act may be cited as the
Foreign Oil Displacement Act of
2010
.
2.Congress finds that—
(1)the strategic interests of the United
States would be served by a reduction in the Nation's dependence upon imported
oil to produce transportation fuels and other products vital to both the
domestic economy and national security;
(2)this goal would be
served by the development of a viable, commercially competitive synthetic fuels
industry reliant upon domestic coals and other plentiful, nontraditional
carbonaceous feedstocks; and
(3)temporary
financial incentives are required to foster private investment in the
technology, design, construction, and operation of strategic facilities capable
of producing synthetic fuels or synthetic gas on a commercial scale.
3.Carbonaceous
fuels facility credit
(a)Allowance of
carbonaceous fuels facility creditSection 46 of the Internal Revenue Code of
1986 is amended by striking and
at the end of paragraph (5), by
striking the period at the end of paragraph (6) and inserting ,
and
and by inserting after paragraph (6) the following new
paragraph:
(7)the carbonaceous fuels facility
credit.
.
(b)Amount of
carbonaceous fuels facility creditSubpart E of part IV of subchapter A of
chapter 1 of such Code is amended by inserting after section 48D the following
new section:
48E.Carbonaceous
fuels facility credit
(a)For purposes of
section 46, the carbonaceous fuels facility credit for any taxable year is an
amount equal to 30 percent of the qualified investment in a carbonaceous fuels
conversion facility for such taxable year.
(b)For purposes of this section—
(1)The term qualified investment means, with
respect to any taxable year, the basis of property placed in service by the
taxpayer during the taxable year as part of a carbonaceous fuels conversion
facility—
(A)(i)the construction, reconstruction, or
erection of which is completed by the taxpayer, or
(ii)which is acquired by the taxpayer if the
original use of such property commences with the taxpayer,
(B)with respect to which depreciation (or
amortization in lieu of depreciation) is allowable, and
(C)which has a useful life of not less than 3
years.
(2)Special rule for
sale-leasebacksFor purposes of paragraph (1)(A), in the case of
a facility that—
(A)is originally
placed in service by a person, and
(B)is sold and leased
back by such person, or is leased to such person, within 3 months after the
date such facility was originally placed in service, for a period of not less
than 12 years,
such
facility shall be treated as originally placed in service not earlier than the
date on which such property is used under the leaseback (or lease) referred to
in subparagraph (B). The preceding sentence shall not apply to any property if
the lessee and lessor of such property make an election under this sentence.
Such an election, once made, may be revoked only with the consent of the
Secretary.(3)Certain
qualified progress expenditures rules made applicableRules similar to the rules of subsections
(c)(4) and (d) of section 46 (as in effect on the day before the enactment of
the Revenue Reconciliation Act of 1990) shall apply for purposes of this
section.
(c)Carbonaceous
fuels conversion facility
(1)For purposes of this section, the term carbonaceous
fuels conversion facility means a facility of the taxpayer used to
produce a qualified fuel.
(2)For purposes of
paragraph (1), the term qualified fuel—
(A)has the meaning
given such term by section 45K(c), except that
(B)in applying
section 45K(c)(1)(C), the term coal includes—
(i)peat, and
(ii)any byproduct
(including synthetic gas) or chemical—
(I)that is from a
coal, culm, or silt preparation facility, and
(II)that contains
fixed carbon derived from coal.
(d)Coordination
with other creditsThis section shall not apply to any property
with respect to which any other credit is allowed unless the taxpayer elects to
waive the application of such other credits to such property.
(e)
(1)If any taxpayer elects the application of this subsection
for any taxable year, the amount of credit determined under this section for
such year which would (but for this subsection) be allowable to the taxpayer
shall be allowable to the person designated by the taxpayer. Such amount shall
be determined by applying this section separately from section 38 for such
year. The person so designated shall be treated as the taxpayer with respect to
this section (other than this subsection) for purposes of this title (other
than this paragraph).
(2)Treatment of
amounts paid for assignmentIf any amount is paid to the person
who assigns the credit determined under this section, no portion of such amount
shall be includible in such person's gross income.
(f)This section shall
apply to periods after the date of the enactment of this section and before
January 1, 2024, under rules similar to the rules of section 48(m) (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of
1990).
.
(c)
(1)Subsection (a) of section 50 of such Code is amended by
adding at the end the following new paragraph:
(6)Special rules
relating to carbonaceous fuels conversion facilityFor
purposes of applying this subsection in the case of any credit allowable by
reason of section 48E, the following shall apply:
(A)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 carbonaceous fuels conversion facility (as defined by section 48E(c))
multiplied by a fraction whose numerator is the number of years remaining to
fully depreciate under this chapter the carbonaceous fuels conversion 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 carbonaceous fuels
conversion facility property shall be treated as a year of remaining
depreciation.
(B)Property ceases
to qualify for progress expendituresRules similar to the rules
of paragraph (2) shall apply in the case of qualified progress expenditures for
a carbonaceous fuels conversion facility under section 48E, 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).
.
(2)Paragraph (4) of
section 50(a) of such Code is amended by striking and (2)
and
inserting , (2), and (6)
.
(d)Application of
at-Risk rulesSubparagraph (C) of section 49(a)(1) of such Code
is amended by striking and
at the end of clause (v), by striking
the period at the end of clause (vi) and inserting , and
, and by
adding at the end thereof the following new clause:
(vii)the portion of the basis of any
carbonaceous fuels conversion facility attributable to any qualified investment
(as defined by section
48E(b)).
.
(e)The table of
sections for subpart E of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 48D the following new
item:
Sec. 48E. Carbonaceous fuels
facility credit.
(f)The amendments made by
this section shall apply taxable years ending after the date of the enactment
of this Act.
4.Exemption from
manufacturers excise tax on fuels
(a)Subsection (a) of
section 4083 of the Internal Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
(4)Qualified
carbonaceous fuel
(A)The terms taxable fuel,
gasoline, diesel fuel and kerosene do
not include qualified carbonaceous fuel or that portion of a blend that is
qualified carbonaceous fuel.
(B)Qualified
carbonaceous fuel definedFor
purposes of subparagraph (A), the term qualified carbonaceous fuel
means qualified fuel produced by a carbonaceous fuels conversion
facility.
(C)For purposes of
subparagraph (B), the terms qualified fuel and carbonaceous
fuels conversion facility have the meaning given such terms by section
48E.
(D)This paragraph
shall apply during the period beginning on the 91st day after the date of the
enactment of this paragraph and ending on December 31,
2023.
.
(b)The amendment made by
this section shall take effect on the date of the enactment of this Act.