SECTION 4. SECTION 48B PHASE III

PROGRAM

.01 In General . To be considered in the § 48B Phase III allocation round, applications must be submitted separately to DOE and to the Service on or before March 2, 2015 pursuant to section 5 of this notice. The Service will consider a project under the § 48B Phase III program only if DOE provides a certification (“DOE certification”) and ranking (if any) for the project. Accordingly, a taxpayer must submit, for each § 48B Phase III gasification project: (i) an application for certification by DOE that the project is technically and economically feasible (“application for DOE certification”), and (ii) an application for certification by the Service under § 48B(d) (“application for § 48B certification”).

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(ii) Second and lower-ranked projects will be entitled to similar priority in the allocation of credit and allocations to such projects will similarly reduce the remainder of the amount available for allocation until the amount available for allocation is exhausted.

(6) See section 5.02 of this notice and Appendix B to this notice for the information to be submitted to the DOE in an application for DOE certification. Appendix B to this notice also provides the instructions and address for filing the application for DOE certification. If an application for DOE certification is postmarked on or before March 2, 2015, DOE will determine the feasibility of the project and (for projects determined to be feasible) provide DOE certification and DOE ranking (if any) to the Service by July 1, 2015. (7) For the § 48B Phase III allocation round, the application period for § 48B certification begins on December 29, 2014, and ends on March 2, 2015, and any completed application for § 48B certification received by the Service after December 28, 2014, and on or before March 2, 2015, will be deemed to be submitted by the taxpayer on March 2, 2015.

(8) For purposes of determining the timeliness of submission of applications the rules of § 7502 shall apply.

(9) By September 1, 2015, the Service will accept or reject the taxpayer’s application for § 48B certification and will notify the taxpayer, by letter, of its decision. This acceptance letter constitutes a certificate of eligibility provided by the Service pursuant to § 48B(d)(2).

(10) If the taxpayer’s application for § 48B certification is accepted, the acceptance letter will state the amount of the credit allocated to the project. If a credit is allocated to a taxpayer’s project, the taxpayer will be required to execute an agreement in the form set forth in Appendix A to this notice. By November 2, 2015, the taxpayer must execute and return the agreement to the Service at the appropriate address listed in section 5.04 of this notice. The Service will execute and return the agreement to the taxpayer by February 1, 2016. The executed agreement applies only to the accepted taxpayer. The taxpayer must notify the Service within 90

.02 Program Specifications .

(1) The Service determines the amount of the § 48B Phase III credits allocated to a project at the time the Service accepts the application for § 48B certification for that project in accordance with section 4.02(9) of this notice (see section 5 of this notice for the requirements applicable to the application for DOE certification and the application for § 48B certification).

(2) The § 48B Phase III credit for a taxable year is an amount equal to 20 percent of the qualified investment (as defined in § 48B(b)) for that taxable year in qualifying gasification projects (as defined in § 48B(c)(1)).

(3) Section 48B Phase III credits in the amount of $ 309,337,000 are available for the § 48B Phase III allocation round. Under § 48B(c)(1)(C), the certification for a § 48B Phase III project cannot apply to more than $650 million of the qualified investment in the project. Thus, the maximum amount of the § 48B Phase III credit that will be allocated to a project is $130 million. This limitation applies to a qualifying project rather than to the taxpayer holding interests in the project. Therefore, the number or type of entities holding ownership interests in a project does not change the maximum amount of the § 48B Phase III credit that may be allocated to that project. However, a taxpayer holding interests in multiple projects may be allocated more than the maximum § 48B Phase III credit that may be allocated to a single project.

(4) A taxpayer that was allocated § 48B Phase I credits or § 48B Phase II credits for a project may submit an application for § 48B Phase III credits for the same project if the project meets the requirements for a qualifying project under the § 48B Phase III gasification program.

(a) Section 48B Phase III credits will be allocated to the taxpayer’s qualified investment in the project only to the extent such investment exceeds the qualified investment with respect to which § 48B Phase I credits or § 48B Phase II credits was awarded but does not exceed $650 million. Thus, if the qualified investment in a project is $700 million and § 48B Phase I credits were allocated with respect to $500 million of the qualified investment, § 48B Phase III credits may be

allocated with respect to only $150 million ($650 million � $500 million) of the qualified investment. Any § 48B Phase I or Phase II credits allocated to a project are not taken into account for purposes of determining the $650 million qualified investment limitation to the extent the right to claim such credit has been irrevocably waived in such manner as the Commissioner may require.

(b) Section 48B Phase III credits allocated to a project will be forfeited if the taxpayer fails to place the project in service within 7 years of the date of acceptance of the application for § 48B certification under section 4.02(9) of this notice. The allocation of § 48B Phase III credits does not delay the taxpayer’s placed in service obligations with respect to any § 48B Phase I credits or § 48B Phase II credits previously allocated to the project. Accordingly, any § 48B Phase I credits or § 48B Phase II credits allocated to the project will be forfeited if the taxpayer fails to place the project in service within 7 years of the date of acceptance of the application for § 48B certification under the applicable program.

(5) For § 48B Phase III credits, DOE will determine the technical and economic feasibility of the project and, if the project is determined to be feasible, will provide a DOE certification for the project to the Service. DOE will rank the certified projects based on the Program Policy Factors specified in Appendix B, and the Service will allocate the credits as follows:

(a) If the requested allocation of credit for projects that DOE has certified does not exceed the amount available for allocation, each certified project will be allocated the full amount of credit requested.

(b) If the requested allocation of credit for projects that DOE has certified exceeds the amount available for allocation, the amount available for allocation will be allocated as follows:

(i) The project receiving the highest ranking (that is, first) will be allocated the full amount of credit requested (but not exceeding the amount available for allocation) before any credit is allocated to a lower-ranked project. The amount available for allocation is reduced by the amount of credit so allocated and only the remainder is available for allocation to a lower-ranked project.

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(9) A statement specifying whether the project is entitled to high priority for having a research partnership with an eligible educational institution (as defined in § 529(e)(5)) and, if entitled to priority, a statement identifying the eligible educational institution, stating the name(s) of the eligible institution.

(10) The following declaration: “Under penalties of perjury, I declare that I have examined this submission, including accompanying documents, and, to the best of my knowledge and belief, all of the facts contained herein are true, correct, and complete.”

(11) The taxpayer’s signature. The taxpayer must sign and date the application, including the perjury declaration. A stamped, faxed, or electronic signature will not be accepted. The person signing for the taxpayer must have personal knowledge of the facts. Further, the application, including the perjury declaration, must be signed by a person authorized under state law to bind the taxpayer, such as an officer on behalf of a corporation, a general partner on behalf of a state-law partnership, a member-manager on behalf of a limited liability company, a trustee on behalf of a trust, or the proprietor in the case of a sole proprietorship. If the taxpayer is a member of an affiliated group filing consolidated returns, the application, including the perjury declaration, must be signed by a duly authorized officer of the common parent of the group.

.03 Information to be Included in the Application for § 48B Certification . An application for § 48B certification must include all of the following:

(1) The name, address, and taxpayer identification number of the taxpayer. If the taxpayer is a member of an affiliated group filing consolidated returns, also provide the name, address, and taxpayer identification number of the common parent of the group.

(2) The name and/or number of the IRS form that the taxpayer uses to file its Federal income tax return ( e.g., Forms 1120, 1065) and the ending month of the taxpayer’s tax year.

(3) The name, telephone number, and fax number of a contact person. For such person, attach a properly executed power of attorney, preferably on Form 2848,

days of the acquisition of the project by any other person (a successor in interest).

(11) A successor in interest that plans to claim the § 48B credit allocated to the project must request permission to execute a new agreement with the Service. If the request is granted, the new agreement must be executed no later than the due date (including extensions) of the successor in interest’s Federal income tax return for the taxable year in which the transfer occurs. If the successor in interest does not execute a new agreement, the following rules apply:

(a) In the case of an interest acquired at or before the time the qualifying gasification project is placed in service, any credit allocated to the project will be fully forfeited (and rules similar to the recapture rules of § 50(a) apply with respect to qualified progress expenditures); and

(b) In the case of an interest acquired after the qualifying gasification project is placed in service, the project ceases to be investment credit property and the recapture rules of § 50(a) (and similar rules with respect to qualified progress expenditures) apply.

(12) The site of the qualifying gasification project relating to a credit allocation may be changed only if the change is consistent with the objectives of the qualifying gasification project program, is requested by the taxpayer that received the credit allocation, and involves moving the project site to improve the potential to capture and sequester CO2 emissions, reduce costs of transporting feedstock, and serve a broader customer base. The Service will not agree to a project site change if the dollar amount of tax credits allocated to the taxpayer under § 48B would increase as a result of the site change or if the project would not have been originally certified had such modification been included in the taxpayer’s application. In considering such modification, the Service will consult with DOE and any other relevant Federal agency.

(13) The § 48B Phase III credit allocated to the project will be forfeited if the taxpayer fails to place the project in service within 7 years from the date of the acceptance letter under section 4.02(9) of this notice.

(14) The taxpayer must notify the Service by letter of the date the project is

placed in service within 90 days of that date.