Sec. 202. Credit for carbon sequestration from coal facilities
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Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48D the following new section: For purposes of section 46, the qualifying carbon dioxide capture, transport, and storage equipment credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year. For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible carbon dioxide capture, transport, and storage property placed in service by the taxpayer during such taxable year which is part of a qualifying clean coal project— the construction, reconstruction, or erection of which is completed by the taxpayer, or which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and with respect to which depreciation (or amortization in lieu of depreciation) is allowable.
Rules similar to section 48(a)(4) shall apply for purposes of this section. Rules 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. For purposes of this section— The term coal means bituminous coal, subbituminous coal, and lignite. The term eligible carbon dioxide capture, transport, and storage property means any property— which is used to capture, transport, or store carbon dioxide emitted at a qualifying clean coal project, including equipment used to separate and pressurize carbon dioxide for transport (including equipment to operate such equipment), the construction, reconstruction, or erection of which is completed by the taxpayer, or which is acquired by the taxpayer if the original use of such property commences with the taxpayer, and with respect to which depreciation (or amortization in lieu of depreciation) is allowable. The term qualified polygeneration plant means a plant that produces 2 or more marketable products, including electricity, chemicals, liquid or gaseous fuels, and carbon dioxide for beneficial use or sale. The term qualifying clean coal project means any project if such project— uses— gasification technology (as defined in section 48B(c)(2)), or coal as not less than 75 percent of the project fuel source, to produce electricity or is a polygeneration plant, and is a new project which is designed to meet the requirements of subparagraph (B), or consists of retrofits to existing equipment such that the project meets the requirements of subparagraph (B). A project shall meet the emission requirement of clause
(ii)and the carbon capture requirement of clause (iii). The requirement of this clause is met if the project is designed— to emit carbon dioxide at an average annual rate of less than 1,100 pounds per net megawatt hour of electrical generation, or such that the carbon dioxide emissions of such project are no greater than half of the average carbon dioxide emissions for facilities producing electricity during 2005 from the same coal rank as such project, as determined under regulations prescribed by the Secretary in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency. The requirement of this clause is met— if such unit is among the first 1,000 megawatts of electric generation units certified by the Secretary under subsection (e), to capture and sequester not less than 500,000 metric tons per year of carbon dioxide, if such unit is among the next 3,000 megawatts of electric generation units certified by the Secretary under subsection (e), to capture and sequester not less than 1,000,000 metric tons per year of carbon dioxide, and for any other unit, to capture and sequester not less than 2,000,000 metric tons per year of carbon dioxide. No credit shall be allowed under this section with respect to any qualifying clean coal project unless such project is certified by the Secretary under subsection (e). The Secretary may certify under subsection
(e)no more than— 20 projects described in subsection (c)(4)(A)(ii)(I), and 20 projects described in subsection (c)(4)(A)(ii)(II). The Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, shall establish a certification process to determine if a project meets all criteria and other requirements to be recognized as a qualifying clean coal project. After the date of publication by the Secretary of the final certification process referred to in paragraph (1), the Secretary shall allocate the limitation in subsection (d)(2) in equal amounts among— projects using bituminous coal as a primary feedstock, projects using subbituminous coal as a primary feedstock, and projects using lignite as a primary feedstock. The Secretary may reallocate credits if the Secretary determines that there is an insufficient quantity of qualifying applications for certification, pending at the time of review, to comply with the feedstock requirements of paragraph (2). The Secretary may conduct an additional program for applications for certification and reallocate available credits without regard to the feedstock requirement which was not satisfied as a result of insufficient applications for certification. An application for certification shall contain such information as the Secretary may require in order to make a determination to accept or reject the application and establish applicable credit entitlement. Any information contained in the application shall be protected as provided in section 552(b)(4) of title 5, United States Code. No credit shall be allowed under this section for any property for which credit is allowed under sections 48A, 48B, or 48C. . Section 46 of such Code (relating to amount of credit) 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 adding at the end the following new paragraph: the qualifying carbon dioxide capture, transport, and storage equipment credit. . Subparagraph
(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 after clause
(vi)the following new clause: the basis of any qualifying carbon dioxide capture, transport, and storage equipment under section 48E. . 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. Qualifying carbon dioxide capture, transport, and storage equipment credit. . 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).