Section 1 Short title
This Act may be cited as the “Energy Reliability Act of 2018”.
Energy Reliability Act of 2018
A BILL
To amend the Internal Revenue Code of 1986 to allow a credit against tax for coal-powered electric generation units.
Sec. 2 Coal-powered electric generation unit credit
Federal tax credit for coal-Powered electric generation units— Subpart D 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:
“45T. Coal-powered electric generation unit credit
“(a) In general—For purposes of section 38, in the case of a taxpayer who owns or leases a coal-powered electric generation unit, the coal-powered electric generation unit credit determined under this section for a taxable year shall be an amount equal to the lesser of 30 percent of qualified expenses paid or incurred by such taxpayer in such year or the product of—
“(1) $13, multiplied by
“(2) the nameplate capacity rating in kilowatts of such unit.
“(b) Coal-Powered electric generation unit—For purposes of this section, the term coal-powered electric generation unit means an electric generation unit (as defined in section 48A(c)(6)) that—
“(1) uses coal to produce not less than 75 percent of the electricity produced by such unit, and
“(2) has constructed and installed emissions controls pursuant to—
“(A) the final rule of the Environmental Protection Agency entitled “Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOX SIP Call” (70 Fed. Reg. 25162 (May 12, 2005)) (commonly known as the “Clean Air Interstate Rule”),
“(B) the final rule of the Environmental Protection Agency entitled “Federal Implementation Plans: Interstate Transport of Fine Particulate Matter and Ozone and Correction of SIP Approvals” (76 Fed. Reg. 48208 (August 8, 2011)) (commonly known as the “Cross State Air Pollution Rule”),
“(C) the final rule of the Environmental Protection Agency entitled “National Emission Standards for Hazardous Air Pollutants From Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units” (77 Fed. Reg. 9304 (February 16, 2012)) (commonly known as the “Mercury and Air Toxics Standards Rule”),
“(D) the final rule of the Environmental Protection Agency entitled “Regional Haze Regulations and Guidelines for Best Available Retrofit Technology (BART) Determinations” (70 Fed. Reg. 39104 (July 6, 2005)) (commonly known as the “Regional Haze regulations”), or
“(E) any other Federal emissions control requirements applicable to an electric generation plant that are equal to or more stringent than the requirements of a rule described in subparagraph (A), (B), (C), or (D).
“(c) Qualified expenses—For purposes of this section, the term qualified expenses means amounts paid or incurred for the operation or maintenance of a coal-powered electric generation unit, other than amounts paid or incurred for coal.
“(d) Transfer of credit
“(1) Transfer to eligible project partner
“(A) In general—With respect to a credit under subsection (a) for any taxable year, a taxpayer may elect to transfer all or any portion of such credit to any eligible project partner as specified in such election and such eligible project partner, not the taxpayer, shall be entitled to claim the credit (or portion thereof) for the taxable year.
“(B) Election to transfer—The taxpayer may elect to transfer all or any portion of the credit to an eligible project partner by attaching a statement to the taxpayer’s tax return for the taxable year in which the qualified expenses were paid or incurred, providing such information as is necessary for the Secretary to adequately identify the eligible project partner and the amount of the credit being transferred.
“(2) Eligible project partner—For purposes of this subsection, the term eligible project partner means, with respect to any coal-powered electric generation unit, any person who—
“(A) is responsible for operating, maintaining, or repairing such unit,
“(B) participates in the provision, including transportation, of coal or other materials and supplies to such unit,
“(C) provides financing for the construction, repair, or operation of such unit, or
“(D) leases such unit.
“(3) Special rules
“(A) Application to partnerships—In the case of a credit under subsection (a) which is determined at the partnership level, the term eligible project partner shall include any partner of the partnership.
“(B) Taxable year in which credit taken into account—In the case of any credit (or portion thereof) with respect to which an election is made under paragraph (1), such credit shall be taken into account in the first taxable year of the eligible project partner ending with, or after, the taxpayer's taxable year with respect to which the credit was determined.
“(e) Basis adjustment—For purposes of this subtitle, if a credit is allowed under this section with respect to any coal-powered electric generation unit, the basis of such property shall be reduced by the amount of the credit so allowed.
“(f) Termination—This section shall apply to taxable years beginning after December 31, 2017, and ending before January 1, 2023.”
Assessment by Federal Energy Regulatory Commission—
In general— In the case of any coal-powered electric generation unit which has claimed a credit under section 45T of the Internal Revenue Code of 1986 (as added by subsection (a)), the Federal Energy Regulatory Commission shall require the applicable reliability coordinator to conduct an assessment analyzing the reliability and resilience attributes offered by such unit to the regional grid in which it is located, with such assessment to be completed not later than April 1, 2023.
Reporting— Not later than June 1, 2023, the Federal Energy Regulatory Commission shall report to the relevant Congressional committees—
the results of the assessments described under paragraph (1); and
a recommendation as to whether the credit under section 45T of the Internal Revenue Code of 1986 should be amended so as to apply to taxable years beginning after December 31, 2022.
Definitions— In this subsection:
Applicable Reliability Coordinator— The term applicable reliability coordinator means the Reliability Coordinator of the Electric Reliability Organization (as defined in section 215(a) of the Federal Power Act (16 U.S.C. 2824o(a))) for the region in which a coal-powered electric generation unit which has claimed a credit under section 45T of the Internal Revenue Code of 1986 is located.
Relevant Congressional Committees— The term relevant Congressional committees means—
the Committee on Finance of the Senate;
the Committee on Ways and Means of the House of Representatives;
the Committee on Energy and Natural Resources of the Senate; and
the Committee on Energy and Commerce of the House of Representatives.
Conforming amendment— Section 501(c)(12)(I) is amended by inserting “or 45T(d)(1)” after “section 45J(e)(I)”.
Credit To Be part of general business credit—
In general— Section 38(b) of the Internal Revenue Code of 1986 is amended by striking “plus” at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting “, plus”, and by adding at the end the following new paragraph:
“(38) the coal-powered electric generation unit credit determined under section 45T(a).”
Credit allowed against alternative minimum tax— Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended—
by redesignating clauses (x), (xi), and (xii) as clauses (xi), (xii), and (xiii), respectively; and
by inserting after clause (ix) the following new clause:
“(x) the credit determined under section 45T,”
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: