SECTION 1. PURPOSE

This notice updates the procedures for the allocation of credits under the qualifying advanced coal project program of § 48A of the Internal Revenue Code

and defines certain terms for purposes of § 48A. The purpose of the qualifying advanced coal project program is the deployment of advanced coal-based generation technologies. To further this purpose, the method of allocation is being modified for allocation rounds after 2006. Under the modified method of allocation, the U.S. Department of Energy (“DOE”) will rank a certified project relative to other certified projects in each pool and credits will be allocated to projects based on the DOE ranking. The modified allocation method will substantially favor projects that capture and sequester carbon dioxide emissions and will favor to a lesser extent projects optimized for future carbon dioxide capture.