SECTION 2. BACKGROUND

.01 Section 46 of the Code provides that the amount of the investment credit for any taxable year is the sum of the

credits listed in § 46. That list includes the Qualifying Advanced Coal Project credit under § 48A.

.02 Section 48A(d)(1) provides that the Secretary of the Treasury or his delegate, 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 the § 48A Phase I Program in Notice 2006-24, 2006-1 C.B. 595, as modified and updated by Notice 2007-52, 2007-1 C.B. 1456.

.03 Pursuant to § 48A(d)(3)(B)(i) and (ii), the § 48A Phase I Program provided for (i) $800 million of credits to be allocated to integrated gasification combined cycle (IGCC) projects and (ii) $500 million of credits to other advanced coal projects. The Service allocated § 48A Phase I Program credits through annual allocation rounds in 2006, 2007-2008, and 2008-2009, with a special allocation round in 2008.

.04 Pursuant to § 48A(d)(3)(B)(iii), the Treasury Department and the Service established the § 48A Phase II Program by issuing Notice 2009-24, 2009-1 C.B. 817, to allocate an additional $1.25 billion of credits for advanced coal-based generation technology projects. The Service allocated § 48A Phase II Program credits through two allocation rounds in 20092010 and 2011-2012. .05 Pursuant to § 48A(d)(4), the Treasury Department and the Service issued Notice 2012-51 to establish the § 48A Phase III Program to reallocate $658.5 million of available § 48A Phase I Program credits. In Announcement 2013-43, 2013-2 C.B. 524, the Service announced that the total amount of $658.5 million of credits had been allocated, and, accordingly, the 2012-2013 allocation round would be the only allocation round in Phase III.

.06 The Treasury Department and the Service later determined that $1,104,000,000 of § 48A credits were available for reallocation due to forfeitures of previously allocated § 48A Phase I and Phase II Program credits and unallocated § 48A Phase II Program credits. Accordingly, the Treasury Department and the Service issued Notice 2015-14, 2015-10 I.R.B. 722, to establish Round 2 of the § 48A Phase III Program.

.07 After the completion of Round 2 of the § 48A Phase III Program, the Treasury Department and the Service completed another review and determined that $2,041,500,000 of § 48A credits are available for reallocation due to forfeitures of previously allocated § 48A credits. Accordingly, the Treasury Department and the Service have determined that an additional allocation round is appropriate, and this notice announces the beginning of Round 3 of the § 48A Phase III Program.