SECTION 3. DEFINITIONS

The following definitions apply for purposes of § 48A and this notice:

.01 Coal . Section 48A(c)(4) defines the term “coal” as meaning anthracite, bituminous coal, subbituminous coal, lignite, and peat. Coal includes waste coal (that is, usable material that is a byproduct of the previous processing of anthracite, bituminous coal, subbituminous coal, lignite, or peat). Examples of waste coal include fine coal of any of the listed ranks, coal of any of the listed ranks obtained from a refuse bank or slurry dam, anthracite culm, bituminous gob, and lignite waste.

.02 Total Nameplate Generating Ca- pacity .

(1) Except as provided in section 3.02(2) of this notice, the total nameplate generating capacity of a project is the aggregate of the numbers (in megawatts) stamped on the nameplate of each generator to be used in the project.

(2) If the number stamped on the nameplate of a generator is not determined at the International Standard Organization (ISO) optimal conditions of 59 degrees Fahrenheit, 60% relative humidity, and 14.7 psia at sea level, the number stamped on the nameplate is disregarded and the generator’s capacity (in megawatts) determined at such optimal conditions is used in its place.

.03 Fuel Input .

ent, and (iii) involves moving the project site to improve the potential to capture and sequester CO emissions, reduce costs of 2 transporting feedstock, and serve a broader customer base. This directive does not apply if the Secretary determines that the dollar amount of tax credits available to the taxpayer under § 48A would increase as a result of the modification or such modification would result in such project not being originally certified. In addition, the Secretary is required to consult with other relevant Federal agencies, including the Department of Energy, in considering any modification under § 48A(h).

.11 Section 48A(i) provides that the Secretary shall provide for recapturing the benefit of any credit allowable under § 48A(a) with respect to any project that fails to attain or maintain the separation and sequestration requirements of § 48A(e)(1)(G).

.12 The at-risk rules in § 49 and the recapture and other special rules in § 50 apply to the qualifying advanced coal project credit. Further, the qualifying advanced coal project credit generally is allowed in the taxable year in which the eligible property (as defined in § 48A(c)(3)) is placed in service (as defined in section 3.04 of this notice) by the taxpayer. Pursuant to § 48A(d)(2)(E), a taxpayer that receives a certification under § 48A(d)(2)(D) has 5 years from the date of issuance of the certification to place the qualifying advanced coal project in service.

.13 Section 48A(d)(1) provides that the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying advanced coal project program for the deployment of advanced coal-based generation technologies. The Treasury Department and the Service established this program in Notice 2006–24, 2006–1 C.B. 595, as modified and updated by Notice 2007–52, 2007–26 I.R.B. 1456. .14 Notice 2007–52 provides that the Service will consider a project under the qualifying advanced coal project program only if the DOE provides a certification of feasibility (“DOE certification”) and ranking (if any) for the project. Under the qualifying advanced coal project program, a taxpayer must submit, for each qualifying advanced coal project: (1) an application for certification by DOE (“application for DOE certification”), and (2) an application for certification under § 48A(d)(2) by the

Service (“application for § 48A certification”). Certifications will be issued and credits will be allocated by the Service to projects in annual allocation rounds.

.15 The Phase I advanced coal program under Notice 2006–24 and Notice 2007–52 provided for three annual allocation rounds. An initial allocation round was conducted in 2006. A second allocation round was conducted in 2007–08, and a special allocation round was conducted in 2008. A third allocation round was conducted in 2008–09.

.16 This notice provides procedures for the Phase II advanced coal program. The guidance in this notice differs from the guidance provided in Notices 2006–24 and 2007–52 for the Phase I advanced coal program in a number of respects. The significant differences include the following:

(1) Section 3.05 provides a definition of the term “separation and sequestration” for purposes of § 48A.

(2) Section 4.02(2) provides that the qualifying advanced coal project credits of $1.25 billion and the applications for certification are separated into three pools based on the feedstock coal used. There are no separate pools for IGCC projects and projects that use other advanced coalbased generation technologies.

(3) Section 4.02(7) provides that the period for submitting the application for § 48A certification under Phase II advanced coal program for the 2009–10 allocation round begins on March 13, 2009, and ends on March 1, 2010. (4) Section 4.02(3) provides that a taxpayer who was allocated a credit under the Phase I advanced coal program may re-submit an application for the same project if the project is enhanced to meet the additional requirements for a qualifying project under the Phase II advanced coal program.

(5) Section 4.02(10) provides that the deadline for taxpayers to submit applications for DOE certification for the 2009–10 allocation round is November 2, 2009, that the DOE will rank certified projects, and that the due date for the DOE to provide the Service with the certification and ranking of these projects is March 1, 2010. (6) Section 10.01 provides that the Service will announce the results of each allocation round as required by § 48A(d)(5). Accordingly, the notice does not include a

April 20, 2009 818 2009–16 I.R.B.

the 2009–10 allocation round, the aggregate amount of the Phase II advanced coal credit for this pool is $416 million.

(3) A taxpayer who was allocated a Phase I advanced coal credit for a project may submit an application for a Phase II advanced coal credit for the same project if the project meets the additional requirements for a qualifying project under the Phase II advanced coal program. Thus, the project must separate and sequester at least 65 percent of the project’s total CO 2 emissions.

(a) The Phase II advanced coal credit will be allowed with respect to the taxpayer’s qualified investment in the project only to the extent such investment exceeds the qualified investment with respect to which the Phase I advanced coal credit is allowable. Thus, if a Phase I advanced coal credit of $133.5 billion has been allocated to an IGCC project, the Phase II advanced coal credit will be allowed only to the extent the taxpayer’s qualified investment in the project exceeds $667.5 billion (the amount that results in a $133.5 billion credit when multiplied by the 20-percent credit rate applicable to IGCC projects under Phase I). The Phase I advanced coal credit allocated to a project is not allowable for purposes of this section 4.02(3) to the extent the right to claim such credit has been irrevocably waived in such manner as the Commissioner may require.

(b) The Phase II advanced coal credit allocated to a project will be forfeited if the taxpayer fails to satisfy the certification requirements in § 48A(e)(2) within two years from the date of acceptance of the application under section 4.02(11) of this notice, or fails to place the project in service within 5 years of the date of issuance of the certification (as determined under section 6.03 of this notice). The allocation of a Phase II advanced coal credit to a project does not delay the taxpayer’s certification and placed-in-service obligations with respect to any Phase I advanced coal credit previously allocated to the project. Accordingly, the Phase I advanced coal credit allocated to the project will be forfeited if the taxpayer fails to satisfy the certification requirements within two years from the date of acceptance under the Phase I advanced coal program, or fails to place the project in service within 5 years of the date of issuance of the certification under the Phase I advanced coal program.

(1) In general . The term “fuel input” means, with respect to any type of fuel, the amount of such fuel used during normal plant operations. The amounts of the fuel used are measured (i) in British thermal units (Btus) on an energy input basis and (ii) pursuant to applicable standards prescribed by the American Society for Testing and Materials (ASTM). For example, § 48A(e)(1)(B) provides that the fuel input for the project, when completed, must be at least 75 percent coal. This requirement is satisfied if, after completion and during normal plant operations, coal provides 75 percent of the project’s fuel measured in Btus on an energy input basis and pursuant to applicable ASTM standards.

(2) Only normal plant operations taken into account . Only fuel used during normal plant operations is taken into account for purposes of § 48A and sections 5.02(5) and 5.02(13) of this notice. Normal plant operations are operations other than during periods of initial plant certification, plant startup, plant shutdown, integrated gasifier shutdown for gasification system maintenance, or interruption of the coal supply to the project resulting from an event of force majeure (including an act of God, war, strike, or other similar event beyond the control of the taxpayer). For example, the fuel input during the initial plant certification may consist entirely of natural gas or other non-coal fuels because fuel used during initial plant certification is disregarded in determining whether the 75-percent coal usage requirement of § 48A(e)(1)(B) is satisfied.

.04 Placed In Service . For purposes of § 48A, property is placed in service in the taxable year in which the property is placed in a condition or state of readiness and availability for a specifically assigned function. See § 1.46–3(d)(1)(ii) of the Income Tax Regulations. Thus, a qualifying advanced coal project or eligible property (as defined in § 48A(c)(3)) that is a part of the project is placed in service in the taxable year in which the project is placed in a condition or state of readiness and availability for producing electricity from coal.

.05 Separation and Sequestration The term “separation and sequestration” refers to the separation and capture of a project’s CO emissions and the placement of the 2 captured CO into a repository in which 2 the CO will remain permanently se2 questered.