EXPANSION AND MODIFICATION OF COAL GASIFICATION INVESTMENT CREDIT.

SEC. 112. EXPANSION AND MODIFICATION OF COAL GASIFICATION INVESTMENT CREDIT.(a) Modification of Credit Amount.—Section 48B(a) is amended by inserting “(30 percent in the case of credits allocated under subsection (d)(1)(B))” after “20 percent”.(b) Expansion of Aggregate Credits.—Section 48B(d)(1) is amended by striking “shall not exceed $350,000,000” and all that follows and inserting “shall not exceed—“(A) $350,000,000, plus“(B) $250,000,000 for qualifying gasification projects that include equipment which separates and sequesters at least 75 percent of such project’s total carbon dioxide emissions.”.(c) Recapture of Credit for Failure to Sequester.—Section 48B is amended by adding at the end the following new subsection:“(f) Recapture of Credit for Failure to Sequester.—The Secretary shall provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any project which fails to attain or maintain the separation and sequestration requirements for such project under subsection (d)(1).”.(d) Selection Priorities.—Section 48B(d) is amended by adding at the end the following new paragraph:“(4) Selection priorities.—In determining which qualifying gasification projects to certify under this section, the Secretary shall—“(A) give highest priority to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions, and“(B) give high priority to applicant participants who have a research partnership with an eligible educational institution (as defined in section 529(e)(5)).”.(e) Eligible Projects Include Transportation Grade Liquid Fuels.—Section 48B(c)(7) (defining eligible entity) is amended by striking “and” at the end of subparagraph (F), by striking the period at the end of subparagraph (G) and inserting “, and”, and by adding at the end the following new subparagraph:“(H) transportation grade liquid fuels.”.(f) Effective Date.—The amendments made by this section shall apply to credits described in section 48B(d)(1)(B) of the Internal Revenue Code of 1986 which are allocated or reallocated after the date of the enactment of this Act.