Internal Revenue Code:Sec. 48B. Qualifying gasification project credit

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter A - Determination of Tax Liability
         PART IV - CREDITS AGAINST TAX
          Subpart E - Rules for Computing Investment Credit
        

Statute

        Sec. 48B. Qualifying gasification project credit

    (a) In General- For purposes of section 46, the qualifying gasification 
      project credit for any taxable year is an amount equal to 20 percent of 
      the qualified investment for such taxable year.
    (b) Qualified Investment-
      (1) IN GENERAL- For purposes of subsection (a), the qualified 
        investment for any taxable year is the basis of eligible property 
        placed in service by the taxpayer during such taxable year which is 
        part of a qualifying gasification project--
        (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, and
        (B) with respect to which depreciation (or amortization in lieu of 
          depreciation) is allowable.
      (2) SPECIAL RULE FOR CERTAIN SUBSIDIZED PROPERTY- Rules similar to 
        section 48(a)(4) shall apply for purposes of this section.
      (3) CERTAIN QUALIFIED PROGRESS EXPENDITURES RULES MADE APPLICABLE- 
        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.
    (c) Definitions- For purposes of this section--
      (1) QUALIFYING GASIFICATION PROJECT- The term `qualifying gasification 
        project' means any project which--
        (A) employs gasification technology,
        (B) will be carried out by an eligible entity, and
        (C) any portion of the qualified investment of which is certified 
          under the qualifying gasification program as eligible for credit 
          under this section in an amount (not to exceed $650,000,000) 
          determined by the Secretary.
      (2) GASIFICATION TECHNOLOGY- The term `gasification technology' means 
        any process which converts a solid or liquid product from coal, 
        petroleum residue, biomass, or other materials which are recovered 
        for their energy or feedstock value into a synthesis gas composed 
        primarily of carbon monoxide and hydrogen for direct use or 
        subsequent chemical or physical conversion.
      (3) ELIGIBLE PROPERTY- The term `eligible property' means any property 
        which is a part of a qualifying gasification project and is necessary 
        for the gasification technology of such project.
      (4) BIOMASS-
        (A) IN GENERAL- The term `biomass' means any--
          (i) agricultural or plant waste,
          (ii) byproduct of wood or paper mill operations, including lignin 
            in spent pulping liquors, and
          (iii) other products of forestry maintenance.
        (B) EXCLUSION- The term `biomass' does not include paper which is 
          commonly recycled.
      (5) CARBON CAPTURE CAPABILITY- The term `carbon capture capability' 
        means a gasification plant design which is determined by the 
        Secretary to reflect reasonable consideration for, and be capable of, 
        accommodating the equipment likely to be necessary to capture carbon 
        dioxide from the gaseous stream, for later use or sequestration, 
        which would otherwise be emitted in the flue gas from a project which 
        uses a nonrenewable fuel.
      (6) COAL- The term `coal' means anthracite, bituminous coal, 
        subbituminous coal, lignite, and peat.
      (7) ELIGIBLE ENTITY- The term `eligible entity' means any person whose 
        application for certification is principally intended for use in a 
        domestic project which employs domestic gasification applications 
        related to--
        (A) chemicals,
        (B) fertilizers,
        (C) glass,
        (D) steel,
        (E) petroleum residues,
        (F) forest products, and
        (G) agriculture, including feedlots and dairy operations.
      (8) PETROLEUM RESIDUE- The term `petroleum residue' means the 
        carbonized product of high-boiling hydrocarbon fractions obtained in 
        petroleum processing.
    (d) Qualifying Gasification Project Program-
      (1) IN GENERAL- Not later than 180 days after the date of the enactment 
        of this section, the Secretary, in consultation with the Secretary of 
        Energy, shall establish a qualifying gasification project program to 
        consider and award certifications for qualified investment eligible 
        for credits under this section to qualifying gasification project 
        sponsors under this section. The total amounts of credit that may be 
        allocated under the program shall not exceed $350,000,000 under rules 
        similar to the rules of section 48A(d)(4).
      (2) PERIOD OF ISSUANCE- A certificate of eligibility under 
        paragraph (1) may be issued only during the 10-fiscal year period 
        beginning on October 1, 2005.
      (3) SELECTION CRITERIA- The Secretary shall not make a competitive  
        certification award for qualified investment for credit eligibility 
        under this section unless the recipient has documented to the 
        satisfaction of the Secretary that--
        (A) the award recipient is financially viable without the receipt of 
          additional Federal funding associated with the proposed project,
        (B) the recipient will provide sufficient information to the 
          Secretary for the Secretary to ensure that the qualified investment 
          is spent efficiently and effectively,
        (C) a market exists for the products of the proposed project as 
          evidenced by contracts or written statements of intent from 
          potential customers,
        (D) the fuels identified with respect to the gasification technology 
          for such project will comprise at least 90 percent of the fuels 
          required by the project for the production of chemical feedstocks, 
          liquid transportation fuels, or coproduction of electricity,
        (E) the award recipient's project team is competent in the 
          construction and operation of the gasification technology proposed, 
          with preference given to those recipients with experience which 
          demonstrates successful and reliable operations of the technology  
          on domestic fuels so identified, and
        (F) the award recipient has met other criteria established and 
          published by the Secretary.
      (e) Denial of Double Benefit- A credit shall not be allowed under 
       this section for any qualified investment for which a credit is 
       allowed under section 48A.

 

Sources

    
    This section was created by the Energy Policy Act of 2005, PL109-058,
    Sec. 1307(b).
    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).
 

Miscellaneous

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References

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