---
kind: "section"
citation: "42 U.S.C. § 16491"
title: "42"
title_heading: "The Public Health and Welfare"
number: "16491"
heading: "Energy production incentives"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/16491"
units:
  - "Chapter 149 — National Energy Policy and Programs"
  - "Subchapter XIII — Miscellaneous"
---

# §16491. Energy production incentives

- (a) **In general—** A [State](/usc/42/15951.md?p=b-2) may provide to any entity—
  - (1) a credit against any tax or fee owed to the [State](/usc/42/15951.md?p=b-2) under a [State](/usc/42/15951.md?p=b-2) law, or
  - (2) any other tax incentive,

  determined by the [State](/usc/42/15951.md?p=b-2) to be appropriate, in the amount calculated under and in accordance with a formula determined by the [State](/usc/42/15951.md?p=b-2), for production described in [subsection (b)](#b) in the [State](/usc/42/15951.md?p=b-2) by the entity that receives such credit or such incentive.

- (b) **Eligible entities—** [Subsection (a)](#a) shall apply with respect to the production in the [State](/usc/42/15951.md?p=b-2) of electricity from coal mined in the [State](/usc/42/15951.md?p=b-2) and used in a facility, if such production meets all applicable Federal and [State](/usc/42/15951.md?p=b-2) laws and if such facility uses scrubbers or other forms of clean coal technology.
- (c) **Effect on interstate commerce—** Any action taken by a [State](/usc/42/15951.md?p=b-2) in accordance with this section with respect to a tax or fee payable, or incentive applicable, for any period beginning after August 8, 2005, shall—
  - (1) be considered to be a reasonable regulation of commerce; and
  - (2) not be considered to impose an undue burden on interstate commerce or to otherwise impair, restrain, or discriminate, against interstate commerce.

## Source credit

(Pub. L. 109–58, title XIV, § 1402, Aug. 8, 2005, 119 Stat. 1061.)