SECTION 11. PAPERWORK

REDUCTION ACT

The collection of information contained in this notice has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545–2003.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number.

The collections of information in this notice are in sections 4, 5, 6, 7, 8, and Appendix B of this notice. This information is required to obtain an allocation of qualifying advanced coal project credits. This information will be used by the Service to verify that the taxpayer is eligible for the qualifying advanced coal project credits. The collection of information is required to obtain a benefit. The likely respondents are business or other for-profit institutions.

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APPENDIX A

CLOSING AGREEMENT

Under § 7121 of the Internal Revenue Code, [insert taxpayer’s name, address, and identifying number] (“Taxpayer”) and the Commissioner of Internal Revenue (“Commissioner”) make the following closing agreement:

WHEREAS:

1. On or before October [insert date and year], Taxpayer submitted to the Internal Revenue Service (“IRS”), an application for certification under the qualifying advanced coal project program described in Notice 2006–24 (“Application for § 48A Certification”);

2. Taxpayer’s Application for § 48A Certification is for the qualifying advanced coal project (the “Project”) described below—

(1) The Project will use [insert either “an integrated gasification combined cycle (as defined in § 48A(c)(7))” or “an advanced coal-based technology (as defined in § 48A(c)(2) and (f)) other than an integrated gasification combined cycle”];

(2) The Project will be located at [insert address or other identifying designation];

(3) The Project is [insert either: “a new electric generation unit (as defined in § 48A(c)(6))”; “a retrofit of an existing electric generation unit (as defined in § 48A(c)(6))”; or “a repower of an existing electric generation unit (as defined in § 48a(c)(6)”);

(4) The Project will have a total nameplate generating capacity of [insert number] megawatts;

[If the Project is an integrated gasification combined cycle project, insert:

(5) At all times more than 50 percent of the cumulative total fuel input (coal and any other fuel input) for the Project will be

[insert either: “bituminous coal”; “subbituminous coal”; or “lignite”];

(6) The Project is entitled to priority under § 48A(e)(3)(B) for [insert either: “greenhouse gas capture capability (as defined in § 48A(c)(5))”; “increased by-product utilization”; or “both greenhouse gas capture capability (as defined in § 48A(c)(5)) and increased by-product utilization”]; ] and

3. On or before November 30, [insert year], the IRS accepted Taxpayer’s Application for § 48A Certification for the Project and allocated a qualifying advanced coal project credit under § 48A in the amount of $[insert number] to the Project.

NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL INCOME TAX PURPOSES THAT:

1. The total amount of the qualifying advanced coal project credit to be claimed for the Project under § 48A(a) must not exceed $[insert the number in WHEREAS clause #3].

2. If Taxpayer fails to satisfy any of the certification requirements in § 48A(e)(2) within 2 years of [insert date of acceptance letter issued under section 4.02(10) of Notice 2006–24], or if the IRS does not issue a certification for the Project under Notice 2006–24, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited.

3. If the Project is not placed in service by Taxpayer within 5 years of the date of issuance of the certification as determined under section 6.03 of Notice 2006–24, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited.

4. If the Project does not have a total nameplate generating capacity of [insert the number in WHEREAS clause #2(4)] megawatts on the date the Project is placed in service, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is reduced proportionately.

[If the Project is not an integrated gasification combined cycle project, insert:

5. If the Project fails to satisfy any of the requirements in § 48A(e)(1) for a qualifying advanced coal project—

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(1) at the time the Project is placed in service, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited; and

(2) after the Project is placed in service (and after satisfying all such requirements at the time the Project is placed in service), the Project ceases to be investment credit property and the recapture rules of § 50(a) apply. ]

[If the Project is an integrated gasification combined cycle project, insert:

5. (1) If the Project fails to satisfy any of the requirements in § 48A(e)(1) for a qualifying advanced coal project—

(a) at the time the Project is placed in service, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited; and

(b) after the Project is placed in service (and after satisfying all such requirements at the time the Project is placed in service), the Project ceases to be investment credit property and the recapture rules of § 50(a) apply.

(2) If at any time more than 50 percent of the cumulative total fuel input (coal and any other fuel input) for the Project is not

[insert the primary feedstock in WHEREAS clause #2(5)], the Project ceases to be investment credit property and the recapture rules of § 50(a) apply.

(3) If the Project fails to provide [insert priority benefits in WHEREAS clause #2(6)] at the time the Project is placed in service, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited. ]

6. Taxpayer will not claim the qualifying gasification project credit under § 48B for any qualified investment for which the qualifying advanced coal project credit is allowed under § 48A.

7. If Taxpayer elects to claim the qualifying advanced coal project credit on the qualified progress expenditures paid or incurred by Taxpayer during the taxable year for construction of a qualifying advanced coal project, rules similar to the recapture rules in § 50(a)(2)(A) through (D) apply.

8. This agreement applies only to Taxpayer. Any successor in interest must execute a new closing agreement with the IRS. If the interest is acquired at or before the time the Project is placed in service and the successor in interest fails to execute a new closing agreement, the qualifying advanced coal project credit in the amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited. If the interest is acquired after the time the Project is placed in service and the successor in interest fails to execute a new closing agreement, the Project ceases to be investment credit property and the recapture rules of § 50(a) apply.

THIS AGREEMENT IS FINAL AND CONCLUSIVE EXCEPT:

1. The matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of a material fact;

2. It is subject to the Internal Revenue Code sections that expressly provide that effect be given to their provisions (including any stated exception for § 7122) notwithstanding any law or rule of law; and

3. If it relates to a tax period ending after the date of this Closing Agreement, it is subject to any law enacted after such date, which applies to the tax period.

By signing, the parties certify that they have read and agreed to the terms of this Closing Agreement.

Taxpayer: [insert name and identifying number]

By: Date Signed:

[insert name]

Title: [insert title]

[insert taxpayer’s name]

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Commissioner of Internal Revenue

By: Date Signed:

[insert name]

Title: Associate Chief Counsel, Passthroughs and Special Industries, CC:PSI

I have examined the specific matters involved and recommend the acceptance of the proposed agreement.

(Receiving Officer) (Title) Date Signed

I have reviewed the specific matters involved and recommend the acceptance of the proposed agreement.

(Reviewing Officer) (Title) Date Signed

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APPENDIX B

APPLICATION FOR DOE CERTIFICATION

REQUEST FOR SUPPLEMENTAL APPLICATION INFORMATION FOR DOE

Pursuant to Notice 2006–24 establishing the Qualifying Advanced Coal Project Program, the Internal Revenue Service (“IRS”) will allocate a credit under § 48A of the Internal Revenue Code to a project only if, among other things, the IRS receives from the Department of Energy (“DOE”) a certification of feasibility and consistency with energy policy goals (“DOE certification”) for the project. This DOE certification shall assure that the applications selected meet the requirements of § 48A and the intent of § 48A to provide credits to projects that are both technically and economically feasible.

The IRS and DOE seek to certify applications that demonstrate a high likelihood of being successfully implemented by the applicants. To qualify, projects must be economically feasible and use the appropriate clean coal technology.

This request for submission of supplemental application information:

1. Describes the information to be provided by the applicant seeking a DOE certification, and

2. Lists the evaluation criteria, and Program Policy Factors to be used by DOE in the evaluation of applications.

In conducting this evaluation, the DOE may utilize assistance and advice from qualified personnel from other Federal agencies and/or non-conflicted contractors. DOE will obtain assurances in advance from all evaluators that application information shall be kept confidential and used only for evaluation purposes. DOE reserves the right to request clarifications and/or supplemental information from some or all applicants through written submissions and/or oral presentations.

Notice is given that DOE may determine whether or not to provide a DOE certification to the IRS at any time after the application has been received, without further exchanges or discussions. Therefore, all applicants are advised to submit their most complete and responsive application.

Applications will not be returned.

SUBMISSION INFORMATION FOR DOE CERTIFICATION APPLICATION

A. General

This request, together with the information in sections 5.02, 7.01, and 7.02 of Notice 2006–24 includes all the information needed to complete an application for DOE certification. All applications shall be prepared in accordance with this request in order to provide a standard basis for evaluation and to ensure that each application will be uniform as to format and sequence.

Each application should clearly demonstrate the applicant’s capability, knowledge, and experience in regard to the requirements described herein.

Applicants should fully address the requirements of Notice 2006–24 and this request and not rely on the presumed background knowledge of reviewers. DOE may reject an application that does not follow the instructions regarding the organization and content of the application when the nature of the deviation and/or omission precludes meaningful review of the application.

B. Unnecessarily Elaborate Applications

Unnecessarily elaborate brochures or other presentations beyond those sufficient to present a complete and effective application are not desired. Elaborate art work, graphics and pictures are neither required nor encouraged.

C. Application Submission for DOE Certification

The application submission to DOE must include the information and documentation required by sections 5.02, 7.01, and 7.02 of Notice 2006–24.

A project will not be considered in the allocation round conducted in a calendar year unless the application for DOE certification of the project is postmarked by June 30 of that calendar year. Two paper copies and one electronic version on a floppy disc or a CD of the Application must be submitted to:

Melissa Robe National Energy Technology Laboratory 3610 Collins Ferry Road Morgantown, WV 26507

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Note that under section 5 of Notice 2006–24, one paper copy must be sent to the IRS as part of the application for IRS certification. The project will not be considered in the allocation round conducted in a calendar year unless the application is submitted to the IRS by the date specified for that calendar year in section 4.02(8) of Notice 2006–24.

THE INFORMATION REQUIRED BY THIS REQUEST MUST BE SUBMITTED USING THE FORMAT AND THE HEADINGS OF THE “PROJECT INFORMATION MEMORANDUM” AS DESCRIBED BELOW.

To aid in evaluation, applications shall be clearly and concisely written and logically assembled. All pages of each part shall be appropriately numbered and identified with the name of the applicant and the date.

The application, including the Project Information Memorandum, MUST be formatted in one of the following software applications:

Microsoft Word ^tm 2002 or later edition

Microsoft Excel ^tm 2002 or later edition

Adobe Acrobat ^tm PDF 6.0 or later edition

Financial models should be submitted using the Excel ^tm spreadsheet and must include calculation formulas and assumptions.

The applicant is responsible for the integrity and structure of the electronic files. The DOE will not be responsible for reformatting, restructuring or converting any files submitted under this announcement.

The Project Information Memorandum, excluding Appendices, shall not exceed seventy-five (75) pages. Pages in excess of the page limitation will not be considered for evaluation. All text shall be typed, single spaced, using 12 point font, 1 inch margins, and unreduced 8-1/2-inch by 11-inch pages. Illustrations and charts shall be legible with all text in legible font. Pages shall be sequentially numbered. Except as otherwise noted herein the page guidelines previously set forth constitute a limitation on the total amount of material that may be submitted for evaluation. No material may be incorporated in any application by reference as a means to circumvent the page limitation.

D. Form of Project Information Memorandum

PROJECT INFORMATION MEMORANDUM

I. SUMMARY AND INTRODUCTION

II. TECHNOLOGY AND TECHNICAL INFORMATION

Provide a description of the proposed technology, including sufficient supporting information (such as process flow diagrams, equipment descriptions, information on each major process unit and the total plant, compositions of major streams, and the technical plan for achieving the goals proposed for the project) as would be needed to allow DOE to confirm that the technical requirements of § 48A could, in principle, be met. Specifically the applicant should:

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Generation Technology,” either as integrated gasification combined cycle (IGCC) technology, or other advanced coalbased electric generation technology meeting the heat rate requirement of 8530 Btu/kWh

technology meets heat rate requirements specified in § 48A(f)(3)

as specified under § 48A(e)(1) including:

50% of the useful output of the project is electrical power.

suppliers of major subsystems or equipment which support the capabilities of the applicant to construct and operate the facility.

engineering report or reports used by the applicant to develop the project and to estimate costs and operating performance.

III. PRIORITY FOR INTEGRATED GASIFICATION COMBINED CYCLE PROJECTS

For IGCC Projects, the applicant must submit information sufficient for categorization and prioritization of projects for certification, including:

and permanently sequester greenhouse gases.

project to be constructed and operated on a long-term basis.

ply, water supply, transmission interconnect, and public policy requirements.

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V. UTILIZATION OF PROJECT OUTPUT

Energy Sales Agreement, and summaries of their key terms and conditions.

or if no independent market study has been completed, provide a copy of the applicant-prepared market study.

the project produces a product in addition to power, include as an appendix any related market study of price and volume of sales expected for that product.

VI. PROJECT ECONOMICS

Describe the project economics and provide satisfactory evidence of economic feasibility as demonstrated through the financial forecast and the underlying project assumptions.

Discuss the market potential for the proposed technology beyond the project proposed by the applicant.

Show calculation of the amount of tax credit applied for based on allowable cost.

VII. PROJECT DEVELOPMENT AND FINANCIAL PLAN

Provide the total project budget and major plant costs, e.g., development, operating, capital, construction, and financing costs. Describe the overall approach to project development and financing sufficient to demonstrate project viability. Provide a complete explanation of the source and amount of project equity. Provide a complete explanation of the source and amount of project debt. Provide the audited financial statements for the applicant for the most recently ended three fiscal years, and the unaudited quarterly interim financial statements for the current fiscal year.

For internally financed projects, provide evidence that the applicant has sufficient assets to fund the project with its own resources. Identify any internal approvals required to commit such assets. Include in an appendix copies of any board resolution or other approval authorizing the applicant to commit funds and proceed with the project.

For projects financed through debt instruments either unsecured or secured by assets other than the project, provide evidence that the applicant has sufficient creditworthiness to obtain such financing along with a discussion of the status of such instruments. Identify any internal approvals required to commit the applicant to pursue such financing. Include in an appendix, copies of any board resolution or other approval authorizing the applicant to commit to such financing.

For projects financed through investor equity contributions, discuss the source and status of each contribution. Discuss each investor’s financial capability to meet its commitments. Include in an appendix, copies of any executed investment agreements.

If financing through a public offering or private placement of either debt or equity is planned for the project, provide the expected debt rating for the issue and an explanation of applicant’s justification for the rating. Describe the status of any discussions with prospective investment bankers or other financial advisors.

For projects employing nonrecourse debt financing, provide a complete discussion of the approach to, and status of, such financing.

In an appendix, provide (1) an Excel based financial model of the project, with formulas, so that review of the model calculations and assumptions may be facilitated; provide pro-forma project financial, economic, capital cost, and operating assumptions, including detail of all project capital costs, development costs, interest during construction, transmission interconnection costs, other operating expenses, and all other costs and expenses, and (2) a report of an independent financial analyst in accordance with the instructions in Section G of this Appendix B.

VIII. PROJECT CONTRACT STRUCTURE

Describe the current status of each of the agreements set forth below. Include as an appendix copies of the contracts or summaries of the key provisions of each of the following agreements:

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supply price and amount that have been prepared. Include a summary of the coal supply contract and a copy of the contract.

arrangement, including firm price, liquidated damages, hold-backs, performance guarantees, etc.

negotiations in this respect.

IX. PERMITS INCLUDING EVIRONMENTAL AUTHORIZATIONS

sary to commence construction of the project.

tions and reviews.

X. STEAM TURBINE PURCHASE

and explain the current status of purchase negotiations, and provide a timeline for negotiation and purchase with expected purchase date.

XI. PROJECT SCHEDULE

tiate that the project will meet the 2 year project certification and 5 year placed-in-service requirement.

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APPENDICES

deed, or an executed contract to purchase or lease the site.

ment, coal supply, water supply, transmission interconnect, and public policy reasons.

interim financial statements for the current fiscal year.

E. Evaluation Criteria:

Advanced coal projects: will be evaluated on whether they meet all the requirements of § 48A.

Technical: will be evaluated on whether the applicant has demonstrated the capability to accomplish the technical objectives.

Site: will be evaluated on the basis that the site requirement for ownership or control has been met, and that the site is suitable for the proposed project.

Economic: will be evaluated on whether the project has demonstrated economic feasibility, taking into consideration the submitted financial and project development and structural information and financial plan.

Schedule: will be evaluated on the applicant’s ability to meet the 2 year project certification and the 5 year placed-in-service requirement.

F. Program Policy Factors to be used by DOE in the evaluation of applications and a description of how they will be applied.

These factors, while not indicators of the applicant’s merit, e.g., technical excellence, cost, applicant’s ability, etc., may be essential to the process of selecting the application(s) that, individually or collectively, will best achieve the objectives of the authorizing legislation. Such factors are often beyond the control of the applicant. Applicants should recognize that some very good applications may not receive selection for certification because they do not fit within a mix of projects and technologies that maximize the probability of achieving the overall objective of deployment of advanced coal-based generation technology. Therefore, the following Program Policy Factors may be used individually or collectively by DOE following application of evaluation criteria to determine which of the applications shall receive certification by DOE.

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G. Instructions for independent financial reports

The applicant shall provide an independent report by a qualified Independent Financial Analyst (such as a bank, investment bank, or other independent financial advisory firm). In the report, the Independent Financial Analyst shall describe qualifications and experience that establish the Analyst’s competence to evaluate project financing for projects similar in scope and size to the Applicant’s project. The Independent Financial Analyst shall provide a thorough, independent review of the Applicant’s approach to project financing. The report shall include the opinion of the Independent Financial Analyst as to the Applicant’s likelihood to achieve financial closure in accordance with the Applicant’s financing plan.

Required Certification by Independent Financial Analyst:

The report shall be certified by the Independent Financial Analyst, who shall (a) acknowledge that the report has been prepared for submission to the Department of Energy as a part of an application by applicant for an investment credit, and (b) certify that the Independent Financial Analyst has no obligation to the applicant and has acted to the best of its ability as an independent expert.

At a minimum, the Independent Financial Analyst shall:

• Review the financial calculations, including rates of return and coverage ratios. • Confirm the calculation of the amount of the tax credit applied for. • Review the project development cost budget. • Review and comment on the source of funding and evidence of funding. • Review and comment on project debt and equity sources. • Confirm that the application includes the required financial reports and debt ratings. • Describe and comment on the capabilities of the applicant to provide the required financing for the project, and the

likelihood of obtaining financing from a source other than the applicant, if such financing is required by the project.

in § 48B(c)(7)), and (C) includes a qualified investment of which an amount not to exceed $650 million is certified under the qualifying gasification program as eligible for credit under § 48B. Pursuant to § 48B(c)(2), gasification technology is any process that converts a solid or liquid product from coal (as defined in § 48B(c)(6)), petroleum residue (as defined in § 48B(c)(8)), biomass (as defined in § 48B(c)(4)), or other materials that 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.

.04 The qualifying gasification project credit generally is allowed in the taxable year in which the eligible property (as defined in § 48B(c)(3)) is placed in service by the taxpayer. Further, the at-risk rules in § 49 and the recapture and other special

Qualifying Gasification Project Program

Notice 2006–25