Notice 2009-23

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					Part III. Administrative, Procedural, and Miscellaneous
Qualifying Gasification Project                  percent of the qualified investment (as de-    taxable year in which the eligible property
Program                                          fined in § 48B(b)) for that taxable year       (as defined in § 48B(c)(3)) is placed in
                                                 in qualifying gasification projects (as de-    service (as defined in section 3.05 of this
Notice 2009–23                                   fined in § 48B(c)(1)) for which the credit     notice) by the taxpayer.
                                                 is allocated under § 48B(d)(1)(A), and (2)         .08 Section 48B(f) provides that the
SECTION 1. PURPOSE                               30 percent of the qualified investment for     Secretary shall provide for recapturing
                                                 that taxable year in qualifying gasification   the benefit of any credit allowable un-
    This notice provides additional proce-       projects for which the credit is allocated     der § 48B(a) with respect to any project
dures for the allocation of credits under the    under § 48B(d)(1)(B).                          that fails to attain or maintain the sepa-
qualifying gasification project program of           .04 The term “qualifying gasification      ration and sequestration requirements of
§ 48B of the Internal Revenue Code. The          project” is defined in § 48B(c)(1) as mean-    § 48B(d)(1).
procedures in this notice apply only to the      ing any project that (A) employs gasifi-           .09 Section 48A(h) directs the Secre-
credits authorized under the amendments          cation technology, (B) will be carried out     tary to modify the terms of any compet-
made to § 48B by section 112 of the Energy       by an eligible entity (as defined in sec-      itive certification award and any associ-
Improvement and Extension Act of 2008,           tion 3.02 of this notice), and (C) includes    ated closing agreement where such modi-
Pub. L. 110–343, 122 Stat. 3765 (October         a qualified investment of which an amount      fication (i) is consistent with the objectives
3, 2008) (“the Act”). Section 112 of the         not to exceed $650 million is certified un-    of § 48B, (ii) is requested by the recipi-
Act amended § 48B to provide for a second        der the qualifying gasification program as     ent, and (iii) involves moving the project
phase of the qualifying gasification project     eligible for credit under § 48B. Pursuant      site to improve the potential to capture and
program in which $250 million of addi-           to § 48B(c)(2), gasification technology is     sequester CO2 emissions, reduce costs of
tional credits are authorized (“the Phase        any process that converts a solid or liq-      transporting feedstock, and serve a broader
II gasification program” and “the Phase II       uid product from coal (as defined in sec-      customer base. This directive does not ap-
gasification credit”). To be considered in       tion 3.01 of this notice), petroleum residue   ply if the Secretary determines that the dol-
the first allocation round under the Phase       (as defined in § 48B(c)(8)), biomass (as       lar amount of tax credits available to the
II gasification program, applications must       defined in § 48B(c)(4)), or other materials    taxpayer under § 48B would increase as
be submitted to the Department of Energy         that are recovered for their energy or feed-   a result of the modification or such mod-
(“DOE”) on or before November 2, 2009,           stock value into a synthesis gas composed      ification would result in such project not
and to the Internal Revenue Service (“Ser-       primarily of carbon monoxide and hydro-        being originally certified. In addition, the
vice”) before March 2, 2010. See section         gen for direct use or subsequent chemical      Secretary is required to consult with other
5 of this notice for additional rules regard-    or physical conversion.                        relevant Federal agencies, including the
ing these applications.                              .05 Section 48B(d)(1) provides that (1)    Department of Energy, in considering any
    Section 48B, as originally enacted, pro-     $350 million of credits are to be allocated    modification under § 48A(h).
vided for the first phase of the qualifying      to qualifying projects (“Phase I gasifica-         .10 Section 48A(d)(5) provides that the
gasification project program and autho-          tion projects”), and (2) an additional $250    Secretary shall, upon making a certifica-
rized $350 million of credits (“the Phase        million of credits are to be allocated to      tion under § 48B(d), publicly disclose the
I gasification program” and “the Phase I         qualifying projects that include equipment     identity of the applicant and the amount of
gasification credit”). The Service intends       that separates and sequesters at least 75      the credit certified with respect to such ap-
to issue guidance in the future regarding        percent of such project’s total CO2 emis-      plicant.
any Phase I gasification credits that are        sions (“Phase II gasification projects”).          .11 Section 48B(d)(1) provides that the
subsequently forfeited.                              .06 Section 48B(d)(4) provides that (i)    Secretary, in consultation with the Secre-
SECTION 2. BACKGROUND AND                        highest priority is given to projects with     tary of Energy, shall establish a qualifying
CHANGES                                          the greatest separation and sequestration      gasification project program to consider
                                                 percentage of total CO2 emissions, and (ii)    and award certifications for qualified in-
Description: Notice 2009-23 updates the procedures for the allocation of credits under the qualifying gasification project program of Section 48B and announces a beginning of an allocation round of credits for qualifying gasification projects.
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