§48B — Title 26 Internal Revenue Code | U.S. Code

Summary

Businesses that invested in gasification projects — plants that convert coal, petroleum residue, biomass, or similar materials into synthesis gas — could claim a tax credit equal to 20 percent of their qualified investment, or 30 percent for credits allocated in the carbon-sequestration round. Projects had to be certified under a program run by the IRS with the Department of Energy, capped at $350 million in total credits plus $250 million more for projects that separate and sequester at least 75 percent of their carbon dioxide emissions. No single project could have more than $650,000,000 of investment certified. Applicants had to show the project was financially viable on its own, had customers lined up, and would get at least 90 percent of its fuel from the sources identified for the project. Highest priority went to projects capturing the most carbon dioxide. Certificates could be issued only during the 10-fiscal-year period that began October 1, 2005, so that window has closed and no new projects can be certified. A credit can be recaptured if a project fails to keep its required carbon separation and sequestration levels, and no credit is allowed for investment already claimed under the section 48A coal project credit.

Title 26, §48B

Internal Revenue Code — Source: USLM XML via OLRC

(a)For purposes of section 46, the qualifying gasification project credit for any taxable year is an amount equal to 20 percent (30 percent in the case of credits allocated under subsection (d)(1)(B)) of the qualified investment for such taxable year.

(b)(1)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)Rules similar to section 48(a)(4) (without regard to subparagraph (D) thereof) shall apply for purposes of this section.

(3)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)For purposes of this section—

(1)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)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)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)(A)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)The term “biomass” does not include paper which is commonly recycled.

(5)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)The term “coal” means anthracite, bituminous coal, subbituminous coal, lignite, and peat.

(7)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,

(G)agriculture, including feedlots and dairy operations, and

(H)transportation grade liquid fuels.

(8)The term “petroleum residue” means the carbonized product of high-boiling hydrocarbon fractions obtained in petroleum processing.

(d)(1)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—

(A)$350,000,000, plus

(B)$250,000,000 for qualifying gasification projects that include equipment which separates and sequesters at least 75 percent of such project’s total carbon dioxide emissions.

(2)A certificate of eligibility under paragraph (1) may be issued only during the 10-fiscal year period beginning on October 1, 2005.

(3)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.

(4)In determining which qualifying gasification projects to certify under this section, the Secretary shall—

(A)give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions, and

(B)give high priority to applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)).

(e)A credit shall not be allowed under this section for any qualified investment for which a credit is allowed under section 48A.

(f)The Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain the separation and sequestration requirements for such project under subsection (d)(1).

Notes & Related Subsidiaries

Editorial Notes

References in Text

The enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (b)(3), is the date of enactment of title XI of Pub. L. 101–508, which was approved Nov. 5, 1990. The date of the enactment of this section, referred to in subsec. (d)(1), is the date of enactment of Pub. L. 109–58, which was approved Aug. 8, 2005.

Amendments

2009—Subsec. (b)(2). Pub. L. 111–5 inserted “(without regard to subparagraph (D) thereof)” after “section 48(a)(4)”. 2008—Subsec. (a). Pub. L. 110–343, § 112(a), inserted “(30 percent in the case of credits allocated under subsection (d)(1)(B))” after “20 percent”. Subsec. (c)(7)(H). Pub. L. 110–343, § 112(e), added subpar. (H). Subsec. (d)(1). Pub. L. 110–343, § 112(b), substituted “shall not exceed—” for “shall not exceed $350,000,000 under rules similar to the rules of section 48A(d)(4).” and added subpars. (A) and (B). Subsec. (d)(4). Pub. L. 110–343, § 112(d), added par. (4). Subsec. (f). Pub. L. 110–343, § 112(c), added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date

of 2009 AmendmentAmendment by Pub. L. 111–5 applicable to periods after Dec. 31, 2008, under rules similar to the rules of section 48(m) of this title as in effect on the day before Nov. 5, 1990, see section 1103(c)(1) of Pub. L. 111–5, set out as a note under section 25C of this title.

Effective Date

of 2008 Amendment Pub. L. 110–343, div. B, title I, § 112(f), Oct. 3, 2008, 122 Stat. 3824, provided that: “The

Amendments

made by this section [amending this section] shall apply to credits described in section 48B(d)(1)(B) of the Internal Revenue Code of 1986 which are allocated or reallocated after the date of the enactment of this Act [Oct. 3, 2008].”

Effective Date

Section applicable to periods after Aug. 8, 2005, under rules similar to the rules of section 48(m) of this title, as in effect on the day before Nov. 5, 1990, see section 1307(d) of Pub. L. 109–58, set out as an

Effective Date

of 2005 Amendment note under section 46 of this title.

§48B Qualifying Gasification Project Credit

Summary

Title 26, §48B

Notes & Related Subsidiaries

Editorial Notes

References in Text

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Amendments

Effective Date

Effective Date

Citations & Metadata