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Title II — Federal incentives for private investment in clean coal technologies

S. 2152 · 113th Congress · Mar 25, 2014 · Lineage

II Federal incentives for private investment in clean coal technologies

201. Seven-year amortization for certain systems installed on coal-fired electric generation units

(a)
In general— Subsection (d) of section 169 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(6) Special rule for systems installed on coal-fired electric generation units

“(A) In general—Any mechanical or electronic system—

“(i) which is installed on a coal-fired electric generation unit after the date of the enactment of this paragraph, and

“(ii) which reduces carbon dioxide emissions per net megawatt hour of electricity generation by 1 or more of the means described in subparagraph (B) or any other means,

“(B) Means for reducing emissions—The means described in this subparagraph are—

“(i) optimizing combustion,

“(ii) optimizing sootblowing and heat transfer,

“(iii) upgrading steam temperature control capabilities,

“(iv) reducing exit gas temperatures (air heater modifications),

“(v) predrying low rank coals using power plant waste heat,

“(vi) modifying steam turbines or change the steam path/blading,

“(vii) replacing single speed motors with variable speed drives for fans and pumps, and

“(viii) improving operational controls, including neural networks.

“(C) Special rule for minimum tax—Section 56(a)(5) shall not apply to property to which this paragraph applies.”

(b)
Effective date— The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.

202. Credit for carbon sequestration from coal facilities

(a)
In general— 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:

“48E. Qualifying carbon dioxide capture, transport, and storage equipment credit

“(a) General rule—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.

“(b) Qualified investment

“(1) In general—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—

“(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) Coal—The term coal means bituminous coal, subbituminous coal, and lignite.

“(2) Eligible carbon dioxide capture, transport, and storage property—The term eligible carbon dioxide capture, transport, and storage property means any property—

“(A) 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),

“(B)

“(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

“(C) with respect to which depreciation (or amortization in lieu of depreciation) is allowable.

“(3) Qualified polygeneration plant—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.

“(4) Qualifying clean coal project

“(A) In general—The term qualifying clean coal project means any project if such project—

“(i) uses—

“(I) gasification technology (as defined in section 48B(c)(2)), or

“(II) coal as not less than 75 percent of the project fuel source,

“(ii)

“(I) is a new project which is designed to meet the requirements of subparagraph (B), or

“(II) consists of retrofits to existing equipment such that the project meets the requirements of subparagraph (B).

“(B) Requirements

“(i) In general—A project shall meet the emission requirement of clause (ii) and the carbon capture requirement of clause (iii).

“(ii) Emission requirement—The requirement of this clause is met if the project is designed—

“(I) to emit carbon dioxide at an average annual rate of less than 1,100 pounds per net megawatt hour of electrical generation, or

“(II) 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.

“(iii) Carbon capture requirement—The requirement of this clause is met—

“(I) 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,

“(II) 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

“(III) for any other unit, to capture and sequester not less than 2,000,000 metric tons per year of carbon dioxide.

“(d) Aggregate credits

“(1) In general—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).

“(2) Limitation on projects certified—The Secretary may certify under subsection (e) no more than—

“(A) 20 projects described in subsection (c)(4)(A)(ii)(I), and

“(B) 20 projects described in subsection (c)(4)(A)(ii)(II).

“(e) Certification

“(1) Certification process—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.

“(2) Feedstock requirements—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—

“(A) projects using bituminous coal as a primary feedstock,

“(B) projects using subbituminous coal as a primary feedstock, and

“(C) projects using lignite as a primary feedstock.

“(3) Redistribution—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.

“(4) Requirements for 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.

“(f) Denial of double benefit—No credit shall be allowed under this section for any property for which credit is allowed under sections 48A, 48B, or 48C.”

(b)
Conforming amendments—
(1)
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:

“(7) the qualifying carbon dioxide capture, transport, and storage equipment credit.”

(2)
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:

“(vii) the basis of any qualifying carbon dioxide capture, transport, and storage equipment under section 48E.”

(3)
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:
(c)
Effective date— 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).

203. Variable price support for carbon dioxide sequestration

(a)
Definitions— In this section:
(1)
Carbon dioxide price difference— The term carbon dioxide price difference means the amount calculated in accordance with subsection (f)(1).
(2)
Design capacity— The term design capacity means a project that has the capacity to capture—
(A)
not fewer than 3,000,000 tons of carbon dioxide annually; or
(B)
fewer than 3,000,000 tons of carbon dioxide annually if agreed to by the Secretary and project owner.
(3)
Eligible project— The term eligible project means a project that—
(A)
captures and sells carbon dioxide that is used for enhanced recovery and generates electricity or gaseous or liquid fuels, or is a qualified polygeneration plant (as defined in section 48E(c) of the Internal Revenue Code of 1986);
(B)
is located in the United States;
(C)
uses coal as not less than 75 percent of the project fuel source;
(D)
captures not less than 50 percent of carbon dioxide produced by coal conversion;
(E)
has reached design capacity; and
(F)
has a contract with an enhanced recovery company that is for a period that is equal to or greater than the subsidy period.
(4)
Enhanced recovery— The term enhanced recovery means enhanced oil recovery and enhanced gas recovery.
(5)
Lowest bid— The term lowest bid means a bid made by an applicant to the program that has the least cost to the Federal Government, as compared to competing bids.
(6)
Market price of oil— The term market price of oil means the price of oil as reported in a public oil market index such as the New York Mercantile Exchange.
(7)
Program— The term program means the Enhanced Recovery Program established under subsection (b).
(8)
Qualifying carbon dioxide— The term qualifying carbon dioxide means carbon dioxide that is captured from an eligible project and is eligible for variable price support.
(9)
Rate— The term rate means the ratio bid by the project owner of the price of carbon dioxide to the market price of oil, and that is used to calculate the synthetic price of carbon dioxide.
(10)
Secretary— The term Secretary means the Secretary of Energy.
(11)
Strike price of carbon dioxide— The term strike price of carbon dioxide means the price of carbon dioxide bid by the project owner—
(A)
below which a project will receive a subsidy; and
(B)
above which the project owner will make payments to the Federal Government.
(12)
Subsidy period— The term subsidy period means the period of time, not to exceed 10 years, bid by the project owner during which the eligible project will be eligible to receive a subsidy under this section.
(13)
Synthetic price of carbon dioxide— The term synthetic price of carbon dioxide means the price of carbon dioxide calculated by multiplying the market price of oil by the rate.
(14)
Variable price support— The term variable price support means financial support provided by the Federal Government in an amount equal to the carbon dioxide price difference for each ton of qualifying carbon dioxide provided directly to the owner of an eligible project selected to receive assistance under this section.
(b)
Establishment; purpose—
(1)
In general— There is established in the Department of Energy a variable price support program, to be known as the “Enhanced Recovery Program”, to accelerate the construction and operation of eligible advanced coal-fueled projects that capture carbon dioxide emissions and sell or use the carbon dioxide for enhanced recovery.
(2)
Purpose— The purpose of the program shall be—
(A)
to reduce the cost of carbon capture by providing variable price support to carbon capture and sequestration project owners to enable the owner to finance eligible projects;
(B)
to advance the development and widespread use of carbon capture technology; and
(C)
to increase the domestic production of oil and natural gas in the United States.
(c)
Variable price support—
(1)
In general— In carrying out the program, the Secretary, in consultation with the Secretary of the Treasury, is authorized to provide variable price support for eligible projects—
(A)
for which an application is submitted to the Secretary under subsection (d);
(B)
that are selected under the competitive bidding process under subsection (e); and
(C)
for which a variable price support agreement to implement the payment terms described in subsections (f) and (g) is executed.
(2)
Period— The Secretary shall provide variable price support to an eligible project under this section for a period of not more than 10 years beginning on the date on which the eligible project reaches design capacity.
(3)
Profit sharing agreements—
(A)
In general— To be eligible to receive variable price support under paragraph (1), a project owner shall enter into a profit-sharing agreement with the Secretary at the time that the variable price support agreement is executed.
(B)
Payments— Once every calendar quarter, for each project owner subject to a profit-sharing agreement executed under subparagraph (A), the Secretary shall calculate whether the synthetic price of carbon dioxide is greater than the strike price of carbon dioxide, and, if so, request from the project owner a profit-sharing payment for that quarter, in an amount equal to—
(i)
the difference between the synthetic price of carbon dioxide and the strike price of carbon dioxide; less
(ii)
any repayments made under subsection (g) during that calendar quarter.
(d)
Applications— An owner of an eligible project desiring variable price support under this section shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require.
(e)
Selection; competitive bidding process—
(1)
In general— Once every year, the Secretary shall solicit bids from applicants for an allocation of the funding made available under subsection (h) to provide variable price support to eligible projects.
(2)
Bid submission— Applicants participating in the competitive bidding process shall submit a bid for an eligible project that includes—
(A)
the strike price of carbon dioxide for a ton of qualifying carbon dioxide;
(B)
a rate;
(C)
a plan for the project for a period of not more than 10 years; and
(D)
the projected tonnage of qualifying carbon dioxide that the eligible project will capture and sell for enhanced recovery over the project period.
(3)
Selection— For each fiscal year, the Secretary shall—
(A)
determine the cost to the Federal Government of each bid submitted under paragraph (2); and
(B)
(i)
select 1 or more of the lowest bids until all of the available funding authorized by subsection (h) is obligated; or
(ii)
if the Secretary determines that no bids submitted under paragraph (2) are acceptable to the Secretary, reject the bids.
(f)
Administration—
(1)
In general— In carrying out a variable price support agreement entered into under subsection (c), the Secretary shall calculate the carbon dioxide price difference as a dollar amount equal to—
(A)
the strike price of carbon dioxide; less
(B)
the synthetic price of carbon dioxide in a qualifying ton.
(2)
Payments— Payments between the Secretary and the project owner shall be made as follows:
(A)
If the amount calculated in paragraph (1) is a positive number, the Secretary shall pay to the project owner an amount equal to the product obtained by multiplying—
(i)
the carbon dioxide price difference calculated under paragraph (1); and
(ii)
the quantity in tons of qualifying carbon dioxide sold for enhanced recovery.
(B)
If the amount calculated in paragraph (1) is a negative number, the project owner shall pay to the Secretary an amount equal to the product obtained by multiplying—
(i)
the absolute value of the carbon dioxide price difference calculated under paragraph (1); and
(ii)
the quantity in tons of qualifying carbon dioxide sold for enhanced recovery.
(C)
Payments between the Secretary and the project owner made under subparagraphs (A) and (B) shall be reconciled on an annual basis based on—
(i)
daily carbon dioxide sales records reported by the project owner; and
(ii)
the daily price of West Texas intermediate crude oil listed in the New York Mercantile Exchange.
(g)
Payments to the Federal Government—
(1)
In general— The Secretary shall establish terms and conditions for a variable price support agreement entered into under subsection (c)(1)(C).
(2)
Repayments— The repayment terms of any variable price support agreement shall commence if, during the subsidy period of the agreement, and subject to the limitations described in paragraph (3), the amount calculated under subsection (f)(1) is a positive number.
(3)
Limitations—
(A)
In general— The repayment terms described in paragraph (2) shall be subject to the following limitations:
(i)
If, during any calendar quarter during the subsidy period of the variable price support agreement, the synthetic price of carbon dioxide is less than the strike price of carbon dioxide, the project owner may elect to defer all or part of the repayment obligations of the project owner due in that quarter and any unpaid obligations will continue to accrue interest.
(ii)
If, during any calendar quarter during the subsidy period of the variable price support agreement, the synthetic price of carbon dioxide is greater than the strike price of carbon dioxide, the project owner—
(I)
shall meet the scheduled repayment obligations plus any deferred repayment obligations; but
(II)
shall not be required to pay in that quarter an amount that is greater than the amount equal to the product obtained by multiplying—
(aa)
the excess of the synthetic price of carbon dioxide over the strike price of carbon dioxide; and
(bb)
the output of the project.
(B)
Repayments beyond subsidy term— At the end of the subsidy period of the agreement, the cumulative amount of any deferred repayment obligations, together with accrued interest, shall be amortized (with interest) over the remainder of the full term of the agreement.
(h)
Funding—
(1)
In general— Prior to selecting bids under subsection (e)(3) for a fiscal year, the Secretary shall make available to carry out the program the following amounts, to be allocated from unobligated funds of the Department of Energy.
(2)
Extension— If the amounts made available under paragraph (1) for a fiscal year are not used during the applicable fiscal year—
(A)
the program shall be extended for an additional fiscal year; and
(B)
the amounts authorized under paragraph (1) that were not used during the applicable fiscal year shall be carried over to carry out the program during the additional fiscal year.

204. Clean energy coal bonds

(a)
In general—
(1)
Treatment as tax credit bonds— Subpart I 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 new section:

“54G. Clean energy coal bonds

“(a) Clean energy coal bond—For purposes of this subchapter—

“(1) In general—The term clean energy coal bond means any bond issued as part of an issue if—

“(A) the bond is issued by a qualified issuer pursuant to an allocation by the Secretary to such issuer of a portion of the national clean energy coal bond limitation under subsection (b)(2),

“(B) so much of the available project proceeds from the sale of such issue as is equal to 95 percent of the excess of—

“(i) the total available project proceeds from the sale of such issue, over

“(ii) the amounts in a reasonably required reserve (within the meaning of section 150(a)(3)) with respect to such issue,

“(C) the qualified issuer makes an irrevocable election to have this section apply,

“(D) the qualified issuer designates such bond for purposes of this section and the bond is in registered form, and

“(E) in lieu of the requirements of section 54A(d)(2), the issue meets the requirements of subsection (c).

“(2) Qualified project; special use rules

“(A) In general—The term qualified project means a qualified clean coal project (as defined in subsection (h)(1)) placed in service by a qualified borrower.

“(B) Refinancing rules—For purposes of paragraph (1)(B), a qualified project may be refinanced with proceeds of a clean energy coal bond only if the indebtedness being refinanced (including any obligation directly or indirectly refinanced by such indebtedness) was originally incurred by a qualified borrower after the date of the enactment of this section.

“(C) Reimbursement—For purposes of paragraph (1)(B), a clean energy coal bond may be issued to reimburse a qualified borrower for amounts paid after the date of the enactment of this section with respect to a qualified project, but only if—

“(i) prior to the payment of the original expenditure, the qualified borrower declared its intent to reimburse such expenditure with the proceeds of a clean energy coal bond,

“(ii) not later than 60 days after payment of the original expenditure, the qualified issuer adopts an official intent to reimburse the original expenditure with such proceeds, and

“(iii) reimbursement is not made later than 18 months after the date the original expenditure is paid or the date the project is placed in service or abandoned, but in no event more than 3 years after the original expenditure is paid.

“(D) Treatment of changes in use—For purposes of paragraph (1)(B), the proceeds of an issue shall not be treated as used for a qualified project to the extent that a qualified borrower takes any action within its control which causes such proceeds not to be used for a qualified project. The Secretary shall prescribe regulations specifying remedial actions that may be taken (including conditions to taking such remedial actions) to prevent an action described in the preceding sentence from causing a bond to fail to be a clean energy coal bond.

“(b) Limitation on amount of bonds designated

“(1) National limitation—There is a national clean energy coal bond limitation of $5,000,000,000.

“(2) Allocation by Secretary—The Secretary shall allocate the amount described in paragraph (1) among qualified projects in such manner as the Secretary determines appropriate.

“(c) Special rules relating to expenditures

“(1) In general—An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the qualified issuer reasonably expects—

“(A) 100 percent or more of the available project proceeds from the sale of the issue are to be spent for 1 or more qualified projects within the 5-year period beginning on the date of issuance of the clean energy bond,

“(B) a binding commitment with a third party to spend at least 10 percent of such available project proceeds from the sale of the issue will be incurred within the 6-month period beginning on the date of issuance of the clean energy bond or, in the case of a clean energy bond the available project proceeds of which are to be loaned to 2 or more qualified borrowers, such binding commitment will be incurred within the 6-month period beginning on the date of the loan of such proceeds to a qualified borrower, and

“(C) such projects will be completed with due diligence and the available project proceeds from the sale of the issue will be spent with due diligence.

“(2) Extension of period—Upon submission of a request prior to the expiration of the period described in paragraph (1)(A), the Secretary may extend such period if the qualified issuer establishes that the failure to satisfy the 5-year requirement is due to reasonable cause and the related projects will continue to proceed with due diligence.

“(3) Failure to spend required amount of bond proceeds within 5 years—To the extent that less than 100 percent of the available project proceeds of such issue are expended by the close of the 5-year period beginning on the date of issuance (or if an extension has been obtained under paragraph (2), by the close of the extended period), the qualified issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.

“(d) Reduced credit amount—The annual credit determined under section 54A(b) with respect to any clean coal energy bond shall be 70 percent of the amount so determined without regard to this subsection.

“(e) Cooperative electric company; qualified energy tax credit bond lender; governmental body; qualified borrower—For purposes of this section—

“(1) Cooperative electric company—The term cooperative electric company means a mutual or cooperative electric company described in section 501(c)(12) or section 1381(a)(2)(C), or a not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act.

“(2) Clean energy bond lender—The term clean energy bond lender means a lender which is a cooperative which is owned by, or has outstanding loans to, 100 or more cooperative electric companies and is in existence on February 1, 2002, and shall include any affiliated entity which is controlled by such lender.

“(3) Public power entity—The term public power entity means a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of enactment of this paragraph).

“(4) Qualified issuer—The term qualified issuer means—

“(A) a clean energy bond lender,

“(B) a cooperative electric company, or

“(C) a public power entity.

“(5) Qualified borrower—The term qualified borrower means—

“(A) a mutual or cooperative electric company described in section 501(c)(12) or 1381(a)(2)(C), or

“(B) a public power entity.

“(f) Special rules relating to pool bonds—No portion of a pooled financing bond may be allocable to any loan unless the borrower has entered into a written loan commitment for such portion prior to the issue date of such issue.

“(g) Gross-Up of payment to issuers in case of sequestration—In the case of any payment due under section 6431(b) by reason of section 6431(f)(3)(A)(v) which is subject to reduction in accordance with a sequestration report prepared by the Director of the Office of Management and Budget pursuant to the Balanced Budget and Emergency Deficit Control Act of 1985 or the Statutory Pay-As-You-Go Act of 2010—

“(1) the amount of such payment shall be increased to an amount equal to the product of—

“(A) the amount of such payment as determined before the reduction in accordance with the sequestration report, and

“(B) a fraction the numerator of which is 1 and the denominator of which is the excess of—

“(i) 100, over

“(ii) the percentage by which such payment is reduced (without regard to this subsection) in accordance with the sequestration report, and

“(2) such increase shall be treated as not subject to the sequestration report.

“(h) Other definitions and special rules—For purposes of this section—

“(1) Qualified clean coal project—The term qualified clean coal project means—

“(A) an atmospheric pollution control facility (within the meaning of section 169(d)(1)),

“(B) a qualifying clean coal project (within the meaning of section 48E(c)(1)),

“(C) a qualified facility (within the meaning of section 45Q(c)), or

“(D) an integrated gasification combined cycle unit, supercritical coal-fired power plant, or ultrasupercritical coal-fired power plant, with an energy efficiency percentage (as defined in section 48(c)(3)(C)(i)) that is not less than 5 percentage points greater than the average energy efficiency percentage for coal electrical production facilities in the United States and corrected for the impact of carbon capture (as determined by the Secretary of Energy).

“(2) Definitions

“(A) Integrated gasification combined cycle unit—The term integrated gasification combined cycle unit means an electric generation unit that produces electricity by converting coal to synthesis gas that is used to fuel a combined-cycle plant that produces electricity from both a combustion turbine (including a combustion turbine/fuel cell hybrid) and a steam turbine.

“(B) Pooled financing bond—The term pooled financing bond shall have the meaning given such term by section 149(f)(6)(A).

“(C) Supercritical coal-fired power plant—The term supercritical coal-fired power plant means a coal-fired power plant operating at pressures such that water boils first and then is converted to superheated steam.

“(D) Ultrasupercritical coal-fired power plant—The term ultrasupercritical coal-fired power plant means a power plant described in subparagraph (C) operating above supercritical pressure and at steam temperatures above 1,100 degrees Fahrenheit.”

(2)
Bonds not subject to maturity limitation— Paragraph (5) of section 54A(d) of such Code is amended by adding at the end the following new subparagraph:

“(C) Special rule for clean energy coal bonds—The requirements of this paragraph shall not apply to a clean energy coal bond under section 54G.”

(3)
Conforming amendments—
(A)
Paragraph (1) of section 54A(d) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of subparagraph (D), by inserting “or” at the end of subparagraph (E), and by inserting after subparagraph (E) the following new subparagraph:

“(F) a clean energy coal bond,”

(B)
The table of sections for subpart I 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 new item:
(b)
Bonds treated as specified tax credit bonds—
(1)
In general— Section 6431(f)(3)(A) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of clause (iii), by striking “and” at the end of clause (iv) and inserting “or”, and by adding at the end the following new clause:

“(v) a clean energy coal bond (as defined in section 54G), and”

(2)
Special rule— Paragraph (2) of section 6431(f) of such Code is amended—
(A)
by striking “clause (i) or (ii)” and inserting “clause (i), (ii), or (v)”; and
(B)
by striking the heading and inserting “Special rule for certain bonds”.
(c)
Effective date— The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.