n-09-23.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Qualifying Gasification Project Program

Notice 2009-23

SECTION 1. PURPOSE
This notice provides additional procedures for the allocation of credits under the
qualifying gasification project program of § 48B of the Internal Revenue Code. The
procedures in this notice apply only to the credits authorized under the amendments
made to § 48B by section 112 of the Energy Improvement and Extension Act of 2008,
Pub. L. 110-343, 122 Stat. 3765 (October 3, 2008) (“the Act”). Section 112 of the Act
amended § 48B to provide for a second phase of the qualifying gasification project
program in which $250 million of additional credits are authorized (“the Phase II
gasification program” and “the Phase II gasification credit”). To be considered in the
first allocation round under the Phase II gasification program, applications must be
submitted to the Department of Energy (“DOE”) on or before November 2, 2009, and to
the Internal Revenue Service (“Service”) before March 2, 2010. See section 5 of this
notice for additional rules regarding these applications.
Section 48B, as originally enacted, provided for the first phase of the qualifying

2
gasification project program and authorized $350 million of credits (“the Phase I
gasification program” and “the Phase I gasification credit”). The Service intends to
issue guidance in the future regarding any Phase I gasification credits that are
subsequently forfeited.
SECTION 2. BACKGROUND AND CHANGES
.01 Section 46 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 gasification
project credit.
.02 The qualifying gasification project credit is provided under § 48B, which was
expanded and modified by section 112 of the Act.
.03 Section 48B(a) provides that the qualifying gasification project credit for a
taxable year is an amount equal to (1) 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)) for which the credit is allocated under § 48B(d)(1)(A), and (2) 30 percent of
the qualified investment for that taxable year in qualifying gasification projects for which
the credit is allocated under § 48B(d)(1)(B).
.04 The term “qualifying gasification project” is defined in § 48B(c)(1) as meaning
any project that (A) employs gasification technology, (B) will be carried out by an eligible
entity (as defined in section 3.02 of this notice), and (C) includes a qualified investment
of which an amount not to exceed $650 million is certified under the qualifying
gasification program as eligible for credit under § 48B. Pursuant to § 48B(c)(2),
gasification technology is any process that converts a solid or liquid product from coal

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(as defined in section 3.01 of this notice), petroleum residue (as defined in § 48B(c)(8)),
biomass (as defined in § 48B(c)(4)), or other materials that are recovered for their
energy or feedstock value into a synthesis gas composed primarily of carbon monoxide
and hydrogen for direct use or subsequent chemical or physical conversion.
.05 Section 48B(d)(1) provides that (1) $350 million of credits are to be allocated to
qualifying projects (“Phase I gasification projects”), and (2) an additional $250 million of
credits are to be allocated to qualifying projects that include equipment that separates
and sequesters at least 75 percent of such project’s total CO
2
emissions (“Phase II
gasification projects”).
.06 Section 48B(d)(4) provides that (i) highest priority is given to projects with the
greatest separation and sequestration percentage of total CO
2
emissions, and (ii) high
priority is given to applicant participants who have a research partnership with an
eligible educational institution (as defined in § 529(e)(5)). The effective date of section
112 of the Act provides that this rule applies only to Phase II gasification projects.
.07 The at-risk rules in § 49 and the recapture and other special rules in § 50 apply
to the qualifying gasification project credit. Further, the qualifying gasification project
credit generally is allowed in the taxable year in which the eligible property (as defined
in § 48B(c)(3)) is placed in service (as defined in section 3.05 of this notice) by the
taxpayer.
.08 Section 48B(f) provides that the Secretary shall provide for recapturing the
benefit of any credit allowable under § 48B(a) with respect to any project that fails to
attain or maintain the separation and sequestration requirements of § 48B(d)(1).

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.09 Section 48A(h) directs the Secretary to modify the terms of any competitive
certification award and any associated closing agreement where such modification (i) is
consistent with the objectives of § 48B, (ii) is requested by the recipient, and (iii)
involves moving the project site to improve the potential to capture and sequester CO
2

emissions, reduce costs of 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 § 48B 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).
.10 Section 48A(d)(5) provides that the Secretary shall, upon making a certification
under § 48B(d), publicly disclose the identity of the applicant and the amount of the
credit certified with respect to such applicant.
.11 Section 48B(d)(1) provides that the Secretary, in consultation with the Secretary
of Energy, shall establish a qualifying gasification project program to consider and
award certifications for qualified investment eligible for credit under § 48B to qualifying
gasification project sponsors. The Treasury Department and the Service established
this program in Notice 2006-25, 2006-1 C.B. 609, as modified and updated by Notice
2007-53, 2007-26 I.R.B. 1474. Pursuant to § 48B(d)(2), certificates of eligibility may be
issued under the program only during the 10-year period beginning on October 1, 2005.
.12 Notice 2007-53 provides that the Service will consider a project under the

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qualifying gasification project program only if the DOE provides a certification of
feasibility (“DOE certification”) and ranking (if any) for the project. Under the qualifying
gasification project program, a taxpayer must submit, for each qualifying gasification
project: (1) an application for certification by DOE (“application for DOE certification”),
and (2) an application for certification under § 48B(d)(1) by the Service (“application for
§ 48B certification”). Certifications will be issued and the credit will be allocated by the
Service to projects in annual allocation rounds.
.13 The Phase I gasification program under Notice 2006-25 and Notice 2007-53
provided for annual allocation rounds. The initial allocation round was conducted in
2006. An additional allocation round was conducted in 2007-08. The entire Phase I
gasification credit amount of $350 million was allocated in these two allocation rounds.
.14 This notice provides procedures for the Phase II gasification program. The
guidance in this notice differs from the guidance provided in Notices 2006-25 and
2007-53 for the Phase I gasification program in a number of respects. The significant
differences include the following:
(1) Section 3.02 of this notice provides that the definition of the term “eligible entity”
under § 48B(c)(7) includes any person whose application for certification is principally
intended for use in a domestic project that employs domestic gasification applications
related to transportation grade liquid fuels.
(2) Section 3.06 provides a definition of the term “separation and sequestration” for
purposes of § 48B.
(3) Section 4.02(3) provides that a taxpayer who was allocated a credit under the

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Phase I gasification 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 gasification program.
(4) Section 4.02(8) provides that the period for submitting the application for § 48B
certification under Phase II gasification program for the 2009-10 allocation round begins
on March 13, 2009, and ends on March 1, 2010.
(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) The information required to be included in the application for DOE certification is
modified. Section 5.02 requires submission of additional information regarding CO
2

separation and sequestration. In addition, the program policy factors listed in Appendix
B have been modified.
(7) Section 5.03 modifies the information required to be included in the application
for § 48B certification.
(8) Section 6.04 provides for recapturing the benefit of any credit allowable under
the Phase II gasification program with respect to any project that fails to attain or
maintain the separation and sequestration requirements of § 48B(d)(1)(B).
(9) Section 9.01 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
request that taxpayers submit with the application for § 48B certification a declaration

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consenting to the disclosure by the Service of certain return information if the taxpayer
is awarded an allocation of qualifying gasification project credit or provide the form of
the declaration, as set forth in Appendix C of Notice 2007-53.
SECTION 3. DEFINITIONS
The following definitions apply for purposes of § 48B and this notice:
.01 Coal
. Section 48B(c)(6) 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 Eligible entity
. Section 48B(c)(7) defines "eligible entity" as meaning any person
whose application for certification is principally intended for use in a domestic project
that employs domestic gasification applications related to chemicals, fertilizers, glass,
steel, petroleum residues, forest products, agriculture (including feedlots and dairy
operations), and transportation grade liquid fuels. For purposes of § 48B, a qualifying
gasification project is carried out by an eligible entity if the project supplies more than
50 percent of the thermal output in British thermal units (“Btu”) from the gasification
process in the form of synthesis gas for direct use or subsequent chemical or physical
conversion in an application related to one or more of the industries listed in § 48B(c)(7)
or if more than 50 percent of the fuel input in Btu to the gasification process is supplied
from one or more of the industries listed in § 48B(c)(7).

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.03 Total synthesis gas capacity. The total synthesis gas capacity of a project is the
total MMBtu (one million Btu) per hour of the synthesis gas (higher heating value (HHV))
at the gasifier outlet of the project. The synthesis gas must be composed primarily of
carbon monoxide and hydrogen for direct use or subsequent chemical or physical
conversion.
.04 Fuel Input
.
(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 Btu on an energy input basis and (ii) pursuant to applicable
standards prescribed by the American Society for Testing and Materials (“ASTM”). For
example, § 48B(d)(3)(D) provides that the fuels identified in § 48B(c)(2) will at all times
cumulatively comprise at least 90 percent of the total fuels (fuels identified in
§ 48B(c)(2) and any other fuel input) required by the project. This requirement is
satisfied if, after completion and during normal plant operations, the fuels identified in
§ 48B(c)(2) will cumulatively comprise at least 90 percent of the project’s total fuels
measured in Btu 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 § 48B. Normal plant operations
are operations other than during periods of initial plant certification, plant startup, plant
shutdown, interconnected gasifier(s) shutdown for gasification system maintenance, or
interruptions of the supply of fuels identified in § 48B(c)(2) to the project resulting from
an event of force majeure (including an act of God, war, strike, or other similar event

9
beyond the control of the taxpayer). For example, the fuel input during the initial plant
certification may consist entirely of natural gas or other fuels not identified in § 48B(c)(2)
because fuel used during initial plant certification is disregarded in determining whether
the requirement of § 48B(d)(3)(D) to use 90 percent of the fuels identified in § 48B(c)(2)
is satisfied.
.05 Placed In Service
. For purposes of § 48B, 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 gasification project or eligible property (as defined in
§ 48B(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
synthesis gas from the feedstocks identified in § 48B(c)(2).
.06 Separation and Sequestration
. The term “separation and sequestration” refers
to the separation and capture of a project’s CO
2
emissions, and the placement of the
captured CO
2
into a repository in which the CO
2
will remain permanently sequestered.
SECTION 4. QUALIFYING GASIFICATION PROJECT PROGRAM
.01 In General
. The Service will consider a project under the Phase II gasification
program only if the DOE provides a certification (“DOE certification”) and ranking (if any)
for the project. Accordingly, a taxpayer must submit, for each Phase II gasification
project: (1) an application for certification by DOE that the project is technically and
economically feasible (“application for DOE certification”), and (2) an application for
certification under § 48B(d)(1) by the Service (“application for § 48B certification”). Both

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applications may be submitted only during the Phase II application period beginning on
March 13, 2009 and ending on March 12, 2012. The Service will issue certifications
and allocate credits to projects in annual allocation rounds. The first allocation round for
Phase II gasification program will be conducted in 2009-10. If necessary, additional
allocation rounds will be conducted in 2010-11, and 2011-12.
.02 Program Specifications
.
(1) The Service determines the amount of the Phase II gasification credits allocated
to a qualifying gasification project at the time the Service accepts the application for
§ 48B certification for that project in accordance with section 4.02(12) 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 aggregate amount of the Phase II gasification credit is $250 million, and the
certification for a Phase II gasification project cannot apply to more than $650 million of
the qualified investment in the project. Thus, the maximum amount of the Phase II
gasification credit that will be allocated to a project is $195 million. This limitation
applies to a qualifying project, and 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 Phase II gasification credit that
may be allocated to that project. Conversely, a taxpayer holding interests in multiple
projects may be allocated more than the maximum Phase II gasification credit that may
be allocated to a single project.
(3) A taxpayer who was allocated a Phase I gasification credit for a project may

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submit an application for a Phase II gasification credit for the same project if the project
meets the additional requirements for a qualifying project under the Phase II gasification
program. Thus, the project must separate and sequester at least 75 percent of the
project’s total CO
2
emissions.
(a) The Phase II gasification 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 gasification credit is allowable but
does not exceed $650 million. Thus, if the qualified investment in a project is $700
million and the Phase I gasification credit was allowable with respect to $500 million of
the qualified investment, the Phase II gasification credit will be allowed with respect to
only $150 million ($650 million - $500 million) of the qualified investment. The Phase I
gasification 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 gasification credit allocated to a project will be forfeited if the
taxpayer fails to place the project in service by the taxpayer within 7 years of the date of
acceptance of application under section 4.02(11) of this notice. The allocation of a
Phase II gasification credit does not delay the taxpayer’s placed-in-service obligations
with respect to any Phase I gasification credit previously allocated to the project.
Accordingly, the Phase I gasification credit allocate to the project will be forfeited if the
taxpayer fails to place the project in service by the taxpayer within 7 years of the date of
acceptance of application under the Phase I gasification program.

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(4) DOE will rank the certified projects in descending order (that is, first, second,
third, etc.) and the amount available for allocation will be allocated as follows in the
2009-2010 allocation round:
(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.
(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.
(5) If the amount available for allocation is not fully allocated in the 2009-10
allocation round, similar allocation rounds will be conducted in 2010-11 and 2011-12
until the available amount is fully allocated. The results of each allocation round will be
announced. See section 9.01 of this notice for further information about this
announcement.

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(6) If the same project would otherwise be allocated credit under both the qualifying
gasification project program of § 48B and the qualifying advanced coal project program
of § 48A, the following rules apply:
(a) The qualifying gasification project credit may not be allocated to the project with
respect to any qualified investment under § 48B for which a qualifying advanced coal
project credit is allowed under § 48A; and
(b) The qualifying gasification project credit may be allocated to the project with
respect to the qualified investment under § 48B for which a qualifying advanced coal
project credit is not allowed under § 48A.
(7) For each allocation round, there will be an annual application period during
which a taxpayer may file its application for § 48B certification. The Service will
consider a project in an allocation round only if the application for § 48B certification for
the project is submitted during the application period for that round and the DOE
provides the DOE certification and the DOE ranking (if any) for the project before the
end of that application period.
(8) For the 2009-10 allocation round, the application period for § 48B certification
begins on March 13, 2009, and ends on March 1, 2010, and any completed application
for § 48B certification received by the Service after March 12, 2009, and before
March 2, 2010, will be deemed to be submitted by the taxpayer on March 1, 2010. For
the 2010-11 allocation round (if necessary), the application period for § 48B certification
begins on March 2, 2010, and ends on March 1, 2011, and any completed application
for § 48A certification received by the Service after March 1, 2010, and before

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March 2, 2011, will be deemed to be submitted by the taxpayer on March 1, 2011. For
the 2011-12 allocation round (if necessary), the application period for § 48A certification
begins on March 2, 2011, and ends on March 1, 2012, and any completed application
for § 48A certification received by the Service after March 1, 2011, and before
March 2, 2012, will be deemed to be submitted by the taxpayer on March 1, 2012.
(9) For purposes of this notice, an application that is submitted by U.S. mail will be
treated as received by the Service on the date of the postmark and an application
submitted by a private delivery service will be treated as received by the Service on the
date recorded or the date marked in accordance with § 7502(f)(2)(C).
(10) 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. The 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. If the DOE certifies two or more projects, the DOE will
rank each of the projects it certifies (for example, first, second, third, etc.) relative to
other certified projects. If an application for DOE certification is postmarked on or
before October 31 of a calendar year, the DOE will determine the feasibility of the
project and (for projects determined to be feasible) provide the DOE certification and the
DOE ranking (if any) to the Service by March 1 of the following calendar year. Thus,
after application of § 7503, relating to the time for performance of acts when the last day
falls on a Saturday, Sunday, or legal holiday, applications for DOE certification must be

15
postmarked on or before November 2, 2009, to be considered in the 2009-10 allocation
round, on or before November 1, 2010, to be considered in the 2010-11 allocation
round, and on or before November 1, 2011, to be considered in the 2011-12 allocation
round.
(11) By April 30 of the calendar year in which an application for § 48B certification is
deemed to be submitted (as determined under section 4.02(9) of this notice), the
Service will accept or reject the taxpayer’s application for § 48B certification and will
notify the taxpayer, by letter, of its decision.
(12) A taxpayer that receives an acceptance letter under section 4.02(11) of this
notice has 7 years from the date of the acceptance letter to place the project in service
and if the project is not placed in service by the end of that period then the acceptance
letter is void.
(13) If the taxpayer’s application for § 48B certification is accepted, the acceptance
letter will state the amount of credit allocated to the project and the amount of qualified
investment that is certified as eligible for the credit. If a credit is allocated to a
taxpayer’s project, the taxpayer will be required to execute a closing agreement in the
form set forth in Appendix A to this notice. By June 30 of the calendar year in which an
application for § 48B certification is accepted (July 2 after application of § 7503 for
applications accepted in 2012), the taxpayer must execute and return the closing
agreement to the Service at the appropriate address listed in section 5.04 of this notice
or listed in later guidance published in the Internal Revenue Bulletin. The Service will
execute and return the closing agreement to the taxpayer by August 31 of such

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calendar year. The executed closing agreement applies only to the accepted taxpayer.
Accordingly, any successor in interest must execute a new closing agreement with the
Service 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 closing 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 (including any
credit allocated under the Phase I gasification program) 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.
(14) The closing agreement relating to a credit allocation may be modified only if the
modification is consistent with the objectives of the qualifying gasification program, is
requested by the taxpayer that received the credit allocation, involves moving the
project site to improve the potential to capture and sequester CO
2
emissions, reduce
costs of transporting feedstock, and serve a broader customer base. The Service will
not modify a closing agreement if the dollar amount of tax credit available to the
taxpayer under § 48B would increase as a result of the modification or if the project
would not have been originally certified had such modification been included in the

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taxpayer’s application. In considering such modification, the Service will consult with
the DOE.
SECTION 5. APPLICATIONS FOR CERTIFICATIONS
.01 In General
. An application for § 48B certification and a separate application for
DOE certification must be submitted for each qualifying gasification project. If an
application for DOE certification does not include all of the information required by
section 5.02 of this notice and meet the requirements in sections 6.01 and 6.02 of this
notice, the DOE may decline to accept the application. If an application for § 48B
certification does not include all of the information listed in section 5.03 of this notice
and meet the requirements in sections 6.01 and 6.02 of this notice, the application will
not be accepted by the Service.
.02 Information Required in the Application for DOE Certification
. An application for
DOE certification must include all of the information requested in Appendix B to this
notice and 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 telephone number of a contact person.
(3) The name and address (or other unique identifying designation) of the qualifying
gasification project.
(4) A statement specifying the projected placed-in-service date of the qualifying
gasification project.

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(5) The estimated total cost of the project and the estimated total qualified
investment in the eligible property that will be part of the project.
(6) The amount of the qualifying gasification project credit requested for the project.
The amount requested must not exceed $195 million (the amount permitted under
§ 48B(a) and (c)(1)(C)).
(7) If the taxpayer is or will be requesting an amount of the qualifying gasification
project credit under § 48A for the same project, a statement specifying the amount of
credit the taxpayer is or will be requesting under § 48A.
(8) The exact total synthesis gas capacity (as defined in section 3.03 of this notice)
of the project.
(9) A statement specifying whether the project is entitled to priority for separation
and sequestration of more than 75% of such project’s total CO
2
emissions or having a
research partnership with an eligible educational institution (as defined in § 529(e)(5))
and, if entitled to priority, a statement identifying which of these priorities apply to the
project.
(10) Documentation or other evidence establishing that the taxpayer is financially
viable without the receipt of additional federal funding associated with the qualifying
gasification project.
.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

19
name, address, and taxpayer identification number of the common parent of the group.
(2) 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, Power
of Attorney and Declaration of Representative.
(3) One paper copy and one electronic version on a floppy disc or a CD of the
completed application for DOE certification submitted with respect to the project in
accordance with section 5.02 of this notice.
(4) If the Phase I gasification credit was allocated to the project, the estimated total
cost of the Phase I project and the estimated total qualifying investment in the eligible
property (as represented in the application for the Phase I gasification credit), and the
amount of the allocated Phase I gasification credit.
.04 Instructions and Address for Filing § 48B Application
. One paper copy and one
electronic version on a floppy disc or a CD of the application for § 48B certification must
be submitted. Applications for § 48B certification should be marked: SECTION 48B
APPLICATION FOR CERTIFICATION. There is no user fee for these applications.
(1) Applications submitted by U. S. mail must be sent to:
Internal Revenue Service
Industry Director, Natural Resources and Construction
Attn: Executive Assistant
1919 Smith Street
Stop HOU 1000
Houston, TX 77002

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Applications submitted by a private delivery service must be sent to:
Internal Revenue Service
Industry Director, Natural Resources and Construction
Attn: Executive Assistant
1919 Smith Street, Floor P2
Stop HOU 1000
Houston, TX 77002

(2) Applications may also be hand delivered Monday through Friday between the
hours of 8 a.m. and 4 p.m. Central time to:

Internal Revenue Service
Industry Director, Natural Resources and Construction
Attn: Executive Assistant
1919 Smith Street, Floor P2
Stop HOU 1000
Houston, TX 77002

SECTION 6. OTHER REQUIREMENTS
.01 Signature
. Each submission under section 5 of this notice must be signed and
dated by the taxpayer. A stamped signature or faxed signature is not permitted.
.02 Penalties of Perjury Statement
.
(1) Each submission under section 5 of this notice must be accompanied by 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.”
(2) The declaration must be signed and dated by the taxpayer. The person signing
for the taxpayer must have personal knowledge of the facts. Further, the declaration
must be signed by an officer on behalf of a corporation, a general partner on behalf of a

21
state-law partnership, a member-manager on behalf of a limited liability company, a
trustee on behalf of a trust, and the proprietor in the case a sole proprietorship. If the
taxpayer is a member of an affiliated group filing consolidated returns, the declaration
also must be signed by a duly authorized officer of the common parent of the group. A
stamped signature or faxed signature is not permitted.
.03 Significant Change in Plans
. The Service must be informed if the plans for the
project change in any significant respect from the plans set forth in the applications for
§ 48B or DOE certification. Except as otherwise provided under § 48A(h), any
significant change to the plans set forth in the applications will have the following
effects:
(1) If the Service is informed of the change after the date on which the applications
for DOE certification were due for the allocation round under section 4.02(10) of this
notice and before the Service accepts or rejects the taxpayer’s application for § 48B
certification under section 4.02(11) of this notice, the Service will not consider the
project during the allocation round; and
(2) Any acceptance provided by the Service and any allocation or certification based
on that acceptance will be void unless the Service is informed of the change before the
date on which the acceptance is provided under section 4.02(11) of this notice.
.04 Failure to Capture and Sequester CO
2
Emissions. The Phase II gasification
credit allocated to a project will be recaptured if, at any time during the applicable
recovery period (as defined in § 168(c)) for such project, the project fails to attain or
maintain the separation and sequestration requirements for such project under

22
§48B(d)(1)(B).
.05 Effect of an Acceptance or Allocation. An acceptance or allocation by the
Service under this notice is not a determination that a project qualifies for the qualifying
gasification project credit under § 48B. The Service may, upon examination (and after
any appropriate consultation with DOE), determine that the project does not qualify for
this credit.
.06 No Right to a Conference or Appeal
. A taxpayer does not have a right to a
conference relating to any matters under this notice. Further, a taxpayer does not have
a right to appeal the decisions made under this notice (including the acceptance or
rejection of the application for DOE or § 48B certification or the amount of credit
allocated to the project) to an Associate Chief Counsel or any other official of the
Service.
.07 DOE Debriefings
. Although a taxpayer does not have a right to a conference
relating to any matters under this notice, the DOE will offer debriefings to all applicants
that submitted an application for DOE certification. The debriefing will be held by the
DOE after the Service has accepted the applications for § 48B certification (as
determined under section 4.02(11) of this notice). The sole purpose of the debriefing is
to enable applicants to develop better proposals in future allocation rounds by providing
DOE’s review of the strengths and weaknesses of their application for DOE certification.
All requests for debriefings must be submitted to the DOE within 30 days of receipt of
the Service’s decision to accept or reject the application.
SECTION 7. REDUCTION OR FORFEITURE OF ALLOCATED CREDITS

23
.01 Under the closing agreement set forth in Appendix A to this notice, the qualifying
gasification project credit allocated under section 4 of this notice will be reduced or
forfeited in certain situations. A taxpayer must notify the Service of the amount of any
reduction or forfeiture required under the closing agreement. This notification must be
sent to the appropriate address listed in section 5.04 of this notice or listed in later
guidance published in the Internal Revenue Bulletin.
.02 The amount of any reduction or forfeiture of the allocated credit will be returned
and included in the aggregate credit remaining to be allocated in the allocation round
following the reduction or forfeiture. If the reduction or forfeiture occurs after the
2011-12 allocation round, future guidance will prescribe procedures applicable to
applications for certification with respect to the amount of returned credit.
SECTION 8. QUALIFIED PROGRESS EXPENDITURES
.01 Section 48B(b)(3) provides that rules similar to the rules of § 46(c)(4) and (d) (as
in effect on the day before the enactment of the Revenue Reconciliation Act of 1990)
shall apply for purposes of § 48B. Former §§ 46(c)(4) and 46(d) provided the rules for
claiming the investment credit on qualified progress expenditures (as defined in former
§ 46(d)(3)) made by a taxpayer during the taxable year for the construction of progress
expenditure property (as defined in former § 46(d)(2)).
.02 In the case of self-constructed property (as defined in former § 46(d)(5)(A)),
former § 46(d)(3)(A) defined qualified progress expenditures to mean the amount that is
properly chargeable (during the taxable year) to capital account with respect to that
property. With respect to a qualifying gasification project that is self-constructed

24
property, amounts paid or incurred are chargeable to capital account at the time and to
the extent they are properly includible in computing basis under the taxpayer’s method
of accounting (for example, after applying the requirements of § 461, including the
economic performance requirement of § 461(h)).
.03 To claim the qualifying gasification project credit on the qualified progress
expenditures paid or incurred by a taxpayer during the taxable year for construction of a
qualifying gasification project, the taxpayer must make an election under the rules set
forth in § 1.46-5(o) of the Income Tax Regulations. The taxpayer may not make the
qualified progress expenditures election for a qualifying gasification project until the
taxpayer has received an acceptance letter for the project under section 4.02(11) of this
notice.
.04 If a taxpayer makes the qualified progress expenditures election pursuant to
section 8.03 of this notice, rules similar to the recapture rules in § 50(a)(2)(A)-(D) apply.
In addition to the cessation events listed in § 50(a)(2)(A), examples of other events that
will cause the project to cease being a qualifying gasification project are:
(1) Failure to place the project in service within 7 years from the date of the
acceptance letter under section 4.02(11) of this notice;
(2) A significant change to the plans for the project as set forth in the applications
for § 48B and DOE certification if, under section 6.03 of this notice, the Service’s
acceptance of the project is void as a result of the change; or
(3) Failure of the project, at any time during the applicable recovery period (as
defined in § 168(c)) for such project, to attain or maintain the separation and

25
sequestration of CO
2
emissions required by § 48B(d)(1)(B).
SECTION 9. DISCLOSURE OF INFORMATION
.01 Announcement
. Section 48A(d)(5) provides that the Secretary shall, upon
making a certification under § 48A(d) and § 48B(d), publicly disclose the identity of the
applicant and the amount of the credit certified with respect to such applicant.
Accordingly, the Service intends to publish the results of the allocation process, and
disclose the following return information in the event a qualifying gasification project
credit is allocated to the taxpayer’s project: (a) the name of the taxpayer and (b) the
amount of the qualifying gasification project credit allocated to the project.
.02 In general
. An application for DOE certification, an application for § 48B
certification, any other documentation submitted by the taxpayer pursuant to section
5.02 of this notice, and any documentation generated by the Service or the DOE as part
of this process are return information subject to § 6103. Except for the items of
information that § 48A(d)(5) authorizes the Service to make available to the public, the
other material remains the applicant’s confidential return information, which is exempt
from disclosure under the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552(b)(3), in
conjunction with § 6103. Other FOIA exemptions may also apply. For example, FOIA
includes exemptions for trade secrets and commercial or financial information
(5 U.S.C. 552(b)(4)), as well as personal information (5 U.S.C. 552(b)(6)).
.03 FOIA requests
. Anyone interested in submitting a request for records under the
FOIA with respect to the qualifying gasification project program under § 48B should

26
direct a request that conforms to the Service’s FOIA regulations, found at
26 C.F.R. § 601.702, to the following address:
IRS FOIA Request
Baltimore Disclosure Office
Room 940
31 Hopkins Plaza
Baltimore, MD 21201
SECTION 10. EFFECT ON OTHER DOCUMENTS
Notice 2007-53 is clarified, modified, and amplified.
SECTION 11. EFFECTIVE DATE
This notice is effective March 13, 2009.
SECTION 12. PAPERWORK REDUCTION ACT
The collection of information contained in this notice has been reviewed and
approved by the Office of Management and Budget in accordance with the Paperwork
Reduction Act (44 U.S.C. § 3507) under control number 1545-2002.
An agency may not conduct or sponsor, and a person is not required to respond to,
a collection of information unless the collection of information displays a valid OMB
control number.
The collections of information in this notice are in sections 5, 6, 8, and Appendix B of this
notice. This information is required to obtain an allocation of qualifying gasification project
credit. This information will be used by the Service to verify that the taxpayer is eligible for the
qualifying gasification project credit. The collection of information is required to obtain a
benefit. The likely respondents are business or other for-profit institutions.
The estimated total annual reporting burden is 1,700 hours.

27
The estimated annual burden per respondent varies from 50 to 125 hours,
depending on individual circumstances, with an estimated average of 85 hours. The
estimated number of respondents is 20.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection of information must be retained as long as
their contents may become material in the administration of any internal revenue law.
Generally, tax returns and tax return information are confidential, as required by
26 U.S.C. § 6103.
SECTION 13. DRAFTING INFORMATION
The principal author of this notice is Jennifer C. Bernardini of the Office of
Associate Chief Counsel (Passthroughs & Special Industries). For further information
regarding this notice contact Jennifer C. Bernardini on (202) 622-3110 (not a toll-free
call). For further information regarding the application for § 48B certification, contact
Tina Meaux, Executive Assistant, Office of the Industry Director, Natural Resources and
Construction, at (713) 209-4074 (not a toll-free number).

28
APPENDIX A
CLOSING AGREEMENT
Under § 7121 of the Internal Revenue Code, [insert taxpayer’s name, address, and
identifying number] (“Taxpayer”) and the Commissioner of Internal Revenue
(“Commissioner”) make the following closing agreement:
WHEREAS:
1. On or before March [insert date and year], Taxpayer submitted to the Internal
Revenue Service (“Service”), an application for certification under the Phase II
gasification program described in Notice 2009-23 (“Application for § 48B Certification”);
2. Taxpayer’s Application for § 48B Certification is for the qualifying gasification
project (the “Project”) described below--
(1) The Project will be located at [insert address or other identifying designation];
(2) The Project will have a total synthesis gas capacity (as defined in section 3.03 of
Notice 2009-23) of at least [insert number] total MMBtu per hour of synthesis gas. The
synthesis gas is composed primarily of carbon monoxide and hydrogen for direct use or
subsequent chemical or physical conversion;
(3) The fuels identified in § 48B(c)(2) will at all times cumulatively comprise at least
90 percent of the total fuel input (as defined in section 3.04(1) of Notice 2009-23 and
including fuels identified in § 48B(c)(2) and any other fuel input) required by the Project
for normal plant operations (as defined in section 3.04(2) of Notice 2009-23) for the
production of chemical feedstocks, liquid transportation fuels, or co-production of
electricity; and

29
3. On [insert date of acceptance letter issued under section 4.02(11) of
Notice 2009-23], the Service accepted Taxpayer’s Application for § 48B Certification for
the Project and allocated a qualifying gasification project credit under § 48B in the
amount of $[insert number] to the Project.
NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL INCOME TAX
PURPOSES THAT:
1. The total amount of the qualifying gasification project credit to be claimed for the
Project under § 48B(a) must not exceed $[insert the number in WHEREAS clause #3].
2. If the Project is not placed in service by Taxpayer within 7 years of [insert the
date in WHEREAS clause #3], the qualifying gasification project credit in the amount of
$[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited.
3. If the Project fails, at any time during the applicable recovery period (as defined in
§ 168(c)) for such project, to attain or maintain the separation and sequestration of CO
2

emissions required by § 48B(d)(1)(B), the qualifying gasification project credit in the
amount of $[insert the number in WHEREAS clause #3] allocated to the Project is fully
forfeited.
4. If the plans for the Project change in any significant respect from the plans set
forth in the application for DOE certification (as defined in section 5.02 of
Notice 2009-23) and the Application for § 48B Certification (as defined in section 5.03 of
Notice 2009-23) and, under section 6.03 of Notice 2009-23, the acceptance of
Taxpayer’s Application for § 48B Certification on [insert the date in WHEREAS clause
#3] is void, the qualifying gasification project credit in the amount of $[insert the number

30
in WHEREAS clause #3] allocated to the Project is fully forfeited.
5. (1) If the Project fails to use gasification technology as defined in § 48B(c)(2) or is
not carried out by an eligible entity (as defined in section 3.02 of Notice 2009-23), the
qualifying gasification project credit in the amount of $[insert the number in WHEREAS
clause #3] allocated to the Project is fully forfeited.
(2) If, at any time, the fuels identified in § 48B(c)(2) with respect to the gasification
technology for the Project do not cumulatively comprise at least 90 percent of the total
fuel input (as defined in section 3.04(1) of Notice 2009-23 and including fuels identified
in § 48B(c)(2) and any other fuel input) required by the Project for normal plant
operations (as defined in section 3.04(2) of Notice 2009-23) for the production of
chemical feedstocks, liquid transportation fuels, or co-production of electricity, the
Project ceases to be investment credit property and the recapture rules of § 50(a) apply.
6. Taxpayer will not claim the qualifying advanced coal project credit under § 48A
for any qualified investment for which the qualifying gasification project credit is allowed
under § 48B.
7. If Taxpayer elects to claim the qualifying gasification project credit on the
qualified progress expenditures paid or incurred by Taxpayer during the taxable year(s)
during which the Project is under construction and the Project ceases to be a qualifying
gasification project (whether before, at the time, or after the Project is placed in service),
rules similar to the recapture rules in § 50(a)(2)(A) through (D) apply.
8. This agreement applies only to Taxpayer. Any successor in interest must
execute a new closing agreement with the Service. If the interest is acquired at or

31
before the time the Project is placed in service and the successor in interest fails to
execute a new closing agreement, the qualifying gasification project credit in the amount
of $[insert the number in WHEREAS clause #3] allocated to the Project is fully forfeited.
If the interest is acquired after the time the Project is placed in service and the
successor in interest fails to execute a new closing agreement, the Project ceases to be
investment credit property and the recapture rules of § 50(a) apply.
THIS AGREEMENT IS FINAL AND CONCLUSIVE EXCEPT:
1. The matter it relates to may be reopened in the event of fraud, malfeasance, or
misrepresentation of a material fact;
2. It is subject to the Internal Revenue Code sections that expressly provide that
effect be given to their provisions (including any stated exception for § 7122)
notwithstanding any law or rule of law; and
3. If it relates to a tax period ending after the date of this Closing Agreement, it is
subject to any law enacted after such date, which applies to the tax period.

32
By signing, the parties certify that they have read and agreed to the terms of this
Closing Agreement.

Taxpayer: [insert name and identifying number]

By: __________________________________ Date Signed: ___________
[insert name]

Title: [insert title]
[insert taxpayer’s name]

Commissioner of Internal Revenue

By: __________________________________ Date Signed: ____________
[insert name]

Title: [insert title]

33

I have examined the specific matters involved and recommend the
acceptance of the proposed agreement.
(Receiving Officer) ......................................................................
(Title) .................................................
Date Signed ....................................................

I have reviewed the specific matters involved and recommend the
acceptance of the proposed agreement.

(Reviewing Officer) ....................................................................
(Title) ...............................................
Date Signed ....................................................

34
APPENDIX B

APPLICATION FOR DOE CERTIFICATION

REQUEST FOR SUPPLEMENTAL APPLICATION INFORMATION FOR DOE

The Internal Revenue Service (“Service”) and the Department of Energy (“DOE”)
seek to certify applications that demonstrate a high likelihood of being successfully
implemented by the applicants. To qualify, projects must be technically and
economically feasible and use the appropriate gasification technology.

This request for submission of supplemental application information:

• Describes the information to be provided by the applicant seeking a certification
of feasibility from DOE, and
• Lists the evaluation criteria and Program Policy Factors to be used by DOE in the
evaluation of applications.

If, after review by the DOE a project is determined to be feasible, DOE will provide a
DOE certificate of feasibility to the Service. The Service will then accept or reject the
taxpayer’s application for certification of the tax credits.

In conducting this evaluation, the DOE may utilize assistance and advice from
qualified personnel from other Federal agencies and/or non-conflicted contractors.
DOE will obtain assurances in advance from all evaluators that application information
shall be kept confidential and used only for evaluation purposes. DOE reserves the
right to request clarifications and/or supplemental information from some or all
applicants through written submissions and/or oral presentations.

Notice is given that DOE may determine whether or not to provide a certification to
the Service at any time after the application has been received, without further
exchanges or discussions. Therefore, all applicants are advised to submit their most
complete and responsive application.

Applications will not be returned.

INFORMATION TO BE SUBMITTED FOR DOE CERTIFICATION APPLICATION

A. General

This request, together with the information in sections 5.02, 6.01, and 6.02 of Notice
2009-23 includes all the information needed to complete an application for DOE
certification. All applications shall be prepared in accordance with this request in order

35
to provide a standard basis for evaluation and to ensure that each application will be
uniform as to format and sequence.

Each application should clearly demonstrate the applicant’s capability, knowledge,
and experience in regard to the requirements described herein.

Applicants should fully address the requirements of Notice 2009-23 and this request
and not rely on the presumed background knowledge of reviewers. DOE may reject an
application that does not follow the instructions regarding the organization and content
of the application when the nature of the deviation and/or omission precludes
meaningful review of the application.

B. Unnecessarily Elaborate Applications

Unnecessarily elaborate brochures or other presentations beyond those sufficient to
present a complete and effective application are not desired. Elaborate art work,
graphics and pictures are neither required nor encouraged.

C. Application Submission for DOE Certification

The application submission to DOE must include the information and documentation
required by sections 5.02, 6.01, and 6.02 of Notice 2009-23.

An application will not be considered in the allocation round conducted in 2009-10
unless it is postmarked by November 2, 2009. (If allocation rounds are conducted in
2010-11 and 2011-12, applications must be postmarked by November 1 of the year in
which the allocation round begins.) One paper copy and one electronic version on a
floppy disc or a CD of the Application must be submitted to:

Melissa Robe
National Energy Technology Laboratory
3610 Collins Ferry Road
Morgantown, WV 26507

Note that under section 5.03(3) of Notice 2009-23, one paper copy and one
electronic version must be sent to the Service as part of the application for § 48B
certification. The application for § 48B certification will not be considered in the
allocation round conducted in 2009-10 unless it is submitted to the Service by
March 1, 2010. (If allocation rounds are conducted in 2010-11 and 2011-12,
applications must be postmarked by March 1 of the year in which the allocation round
ends.)

36
THE INFORMATION REQUIRED BY THIS REQUEST MUST BE SUBMITTED USING
THE FORMAT AND THE HEADINGS OF THE PROJECT INFORMATION
MEMORANDUM AS DESCRIBED BELOW.

To aid in evaluation, applications shall be clearly and concisely written and logically
assembled. All pages of each part shall be appropriately numbered and identified with
the name of the applicant and the date.

The application, including the Project Information Memorandum, MUST be formatted
in one of the following software applications:

• Microsoft Word
tm
2002 or later edition
• Microsoft Excel
tm
2002 or later edition
• Adobe Acrobat
tm
PDF 6.0 or later edition

Financial models should be submitted using the Excel
tm
spreadsheet and must
include calculation formulas and assumptions.

The applicant is responsible for the integrity and structure of the electronic files. The
DOE will not be responsible for reformatting, restructuring or converting any files
submitted under this announcement.

The Project Information Memorandum, excluding Appendices
, shall not exceed
seventy-five (75) pages. Pages in excess of the page limitation will not be considered
for evaluation. All text shall be typed, single spaced, using 12 point font, 1 inch
margins, and unreduced 8-1/2-inch by 11-inch pages. Illustrations and charts shall be
legible with all text in legible font. Pages shall be sequentially numbered. Except as
otherwise noted herein the page guidelines previously set forth constitute a limitation on
the total amount of material that may be submitted for evaluation. No material may be
incorporated in any application by reference as a means to circumvent the page
limitation.

D. Project Information Memorandum

1. Summary and Introduction

a. Description of the Project
b. Financing and Ownership Structure
c. Description of the main parties to the project, including background,
ownership and related experience
d. Current Project Status and Schedule to Beginning of Construction

37
2. Technology and Technical Information

Provide a description of the proposed technology, including sufficient supporting
information (such as vendor guarantees, process flow diagrams, equipment
descriptions, information on each major process unit and the total plant, compositions of
major streams, and the technical plan for achieving the goals proposed for the project)
as would be needed to allow DOE to confirm that the technical requirements of § 48B
are met. Specifically, the applicant should:

• Provide evidence sufficient to demonstrate that the proposed technology will
employ gasification technology as defined in § 48B(c)(2).
• Present information sufficient to justify the total amount of synthesis gas (as
defined in § 48B(c)(2)) to be produced by the project (synthesis gas capacity).
• Provide the total MMBtu/hr of the synthesis gas (HHV) at the gasifier outlet.
• Provide evidence sufficient to ensure that fuels identified in § 48B(c)(2) will
comprise 90 percent of the total fuel input (fuels identified in § 48B(c)(2) and any
other fuel input) for the project. Provide the total quantities of CO, H2, CH4, CO
2
,
and water in the synthesis gas.
• Identify the domestic industry for which the proposed project is intended to be
used.
• Identify the specific products and quantities produced by the proposed project,
providing sufficient evidence to support claims.
• Provide evidence that indicates, for projects using nonrenewable fuels, the
gasification technology design reflects reasonable consideration for, and is
capable of, accommodating equipment necessary to capture CO
2
for later use or
sequestration. Include the project status and relevant information from ongoing
engineering activities. Also include in an appendix any engineering report or
reports used by the applicant to develop the project and to estimate costs and
operating performance.
• Provide evidence sufficient to demonstrate that the project includes equipment
which separates and sequesters at least 75 percent of such project’s total carbon
dioxide (CO
2
) emissions. The CO
2
separation, capture, sequestration, and
emission values shall be reported on metric tons per hour and metric tons per
year basis under normal plant operating conditions. The CO
2
separation and
sequestration percentages shall be calculated based on the total CO
2
which
would otherwise be released into the atmosphere as industrial emission of
greenhouse gas.

3. Applicant’s Capability to Accomplish the Technical Objectives

Provide a narrative supporting the applicant’s capability to accomplish the technical
objectives of the proposed project, including supporting documentation demonstrating

38
that the applicant has assembled a team that is formally committed to participate in the
proposed project.

Provide information to support that the applicant has assembled a team with the
skills and resources needed to implement the project as proposed.

Provide signed agreements or letters from team members demonstrating that the
proposed team members are fully committed to the project.

Provide information, including examples of prior similar projects completed by
applicant, engineering-procurement-construction (EPC) contractor, and suppliers of
major subsystems or equipment, which support the capabilities of the applicant and its
team members to design, construct, permit, and operate the facility. The applicant
should demonstrate that the team members have a corporate history of successful
completion of similar projects.

Provide information to support that key personnel of the applicant and its team
members have knowledge, experience, and adequate degree of involvement to
successfully implement the project.

Include the project status and relevant information from ongoing engineering
activities. Also include in an appendix any engineering report or reports used by the
applicant to develop the project and to estimate costs and operating performance.
Include copies of any signed agreements to support project status claims regarding
preliminary design studies, front-end engineering design (FEED), and EPC-type
agreements.

4. Site Control and Ownership

Provide evidence that the applicant owns or controls a site in the United States of
sufficient size to allow the proposed project to be constructed and operated on a long-
term basis. Documentation such as a deed demonstrating the applicant owns the
project site, a signed option to purchase the site from the site owner, or a letter of intent
signed by the site owner and stating the site owner’s intent to sell the site to the
applicant should be provided.

Describe the current infrastructure at the site available to meet the needs of the
project.

Provide documentation supporting applicant's conclusion that the proposed site can
fully meet all environmental, feedstock supply, water supply, transportation and public
policy requirements. Such documentation may include signed agreements, letters of

39
intent, or term sheets relating to feedstock supply, water supply, and product (e.g. CO
2
)
transportation etc., and regulatory approvals supporting the key claims.

Provide detailed plans, schedules and status updates, particularly for sites with pre-
existing conditions that could impact the proposed project. Pre-existing conditions may
include, but are not limited to, sites with mandated environmental remediation efforts;
brown-field sites that will require building demolition; or sites requiring substantial
rerouting of existing roads, railroads, or pipelines prior to the start of the project.

Applicants must select one “proposed site.” However, projects with key physical or
logistical elements that require close integration with another system for the project to
succeed should provide information on all integrated systems regardless of where they
are located. Example 1: a gasification plant designed to operate exclusively on coal
from a to-be-opened mine should provide supporting documentation for the new mine.
Example 2: an oxygen-blown gasification plant planning to purchase oxygen from a third
party who will construct a plant exclusively for this project should provide documentation
for the oxygen supplier. Example 3: an industrial gasification plant planning to sell CO
2

for enhanced oil recovery (EOR) should provide an agreement for such a transaction
indicating the annual CO
2
purchase quantity, expected project lifetime sales, CO
2

capacity of the site for EOR, and EOR site ownership.

5. Utilization of Project Output

Provide evidence that a market exists for the products of the proposed project as
evidenced by contracts or written statements of intent from potential customers. Such
documentation should be signed by authorizing officials of both the buyer and seller,
and may include: Sales Agreements, Letters of Intent, Memoranda of Understanding,
and Option Agreements.

Describe any sales arrangements that exist or that may be contemplated and
summaries of their key terms and conditions.

Include as an appendix any independent Market Study that has been done in
connection with this project, or if no independent market study has been completed,
provide a copy of the applicant-prepared market study.

6. Project Economics

Describe the project economics and provide satisfactory evidence of economic
feasibility as demonstrated through the financial forecast and the underlying project
assumptions. The project economic and financial assumptions should be clearly stated
and explained.

40
Discuss the market potential for the proposed technology beyond the project
proposed by the applicant.

Show calculation for the amount of tax credits applied for based on allowable cost.

7. Project Development and Financial Plan

Provide the total project budget and major plant costs (e.g., development, operating,
capital, construction, and financing costs). Provide the estimated annual budget for and
source of project development costs from the time of the application until the beginning
of construction, including legal, engineering, financial, environmental, overhead, and
other development costs. Describe the overall approach to project development and
financing sufficient to demonstrate project viability. Provide a complete explanation of
the source and amount of project equity. Provide a complete explanation of the source
and amount of project debt. Provide the audited financial statements for the applicant
for the most recently ended three fiscal years, and the unaudited quarterly interim
financial statements for the current fiscal year for (a) the applicant, (b) for any of the
project parties providing funding, and (c) for any third party funding source. If the
applicant or another party does not have audited financial statements, the applicant or
the party should provide equivalent financial statements prepared by the applicant or
the party, in accordance with Generally Accepted Accounting Principles, and certified as
to accuracy and completeness by the Chief Financial Officer of the party providing the
statements. Applicant should demonstrate that the award recipient is financially viable
without the receipt of additional federal funding associated with the proposed project.

For internally financed projects, provide evidence that the applicant has sufficient
assets to fund the project with its own resources. Identify any internal approvals
required to commit such assets. Include in an appendix copies of any board resolution
or other approval authorizing the applicant to commit funds and proceed with the
project.

For projects financed through debt instruments either unsecured or secured by
assets other than the project, provide evidence that the applicant has sufficient
creditworthiness to obtain such financing along with a discussion of the status of such
instruments. Identify any internal approvals required to commit the applicant to pursue
such financing. Include in an appendix, copies of any board resolution or other approval
authorizing the applicant to commit to such financing.

For projects financed through investor equity contributions, discuss the source and
status of each contribution. Discuss each investor’s financial capability to meet its
commitments. Include in an appendix, copies of any executed investment agreements.

41
If financing through a public offering or private placement of either debt or equity is
planned for the project, provide the expected debt rating for the issue and an
explanation of applicant's justification for the rating. Describe the status of any
discussions with prospective investment bankers or other financial advisors.

For projects employing nonrecourse debt financing, provide a complete discussion
of the approach to, and status of, such financing. In an appendix: (1) provide an Excel
based financial model of the project, with formulas, so that review of the model
calculations and assumptions may be facilitated; (2) provide pro-forma project financial,
economic, capital cost, and operating assumptions, including detail of all project capital
costs, development costs, interest during construction, other operating expenses, and
all other costs and expenses.

8. Project Contract Structure

Describe the current status of each of the agreements set forth below. Include as an
appendix copies of the contracts or summaries of the key provisions of each of the
following agreements:

• Raw Material Input Supply: describe the source and price of raw material inputs
for the project. Include as an appendix any studies of price and amount of raw
materials that have been prepared. Include a summary of any supply contracts
and a signed copy of the contracts.
• Transportation: explain the arrangements for transporting project inputs and
outputs, including costs.
• Operations & Maintenance Agreement: include a summary of the terms and
conditions of the contract and a copy of the contract.
• Shareholders Agreement: summarize key terms and include the agreement as
an appendix.
• Engineering, Procurement and Construction Agreement: describe the key terms
of the existing or expected EPC contract arrangement, including firm price,
liquidated damages, hold-backs, performance guarantees, etc.
• Water Supply Agreement: confirm the amount, source, and cost of water supply.
• If CO
2
is to be sold a third party for sequestration, provide a Sales Agreement
and provide specifics, such as CO
2
sales (metric tons per year), expected project
lifetime sales (metric tons), potential CO
2
capacity of the site for sequestration
(metric tons), technology and site suitability for sequestration, and sequestration
site ownership and operation.

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9. Permits Including Environmental Authorizations

Provide a complete list of all federal, state, and local permits, including
environmental authorizations or reviews, necessary to commence construction of the
project.

Explain what actions have been taken to date to satisfy the required authorizations
and reviews, and the status of each.

Provide a description of the applicant’s plan to obtain and complete all necessary
permits, and environmental authorizations and reviews.

Existing permits and permit applications must be specific to the project proposed. If
existing permits are not specific for the proposed project (i.e. permits for oil-fired or
natural gas based systems), specific plans, procedures and schedules for reapplying,
modifying and/or renegotiating permits should be provided.

10. Project Schedule

Provide an overall project schedule which includes technical, business, financial,
permitting and other factors to substantiate that the project will meet the 7 year placed-
in-service requirement.

The project schedule should be comprehensive and provide sufficient detail to
demonstrate how applicant will meet the placed-in-service requirement. The schedule
should demonstrate that the applicant understands the required tasks, and has allowed
realistic times for accomplishing the technical and financial tasks. The schedule should
include the milestone accomplishments needed to obtain the financing for the project.

11. Appendices

a. Copy of internal or external engineering reports.

b. Copy of site plan, together with evidence that applicant owns or controls a
site. Examples of evidence would include a deed, or an executed contract to purchase
or lease the site.

c. Information supporting applicant's conclusion that the site is fully acceptable
as the project site with respect to environment, raw material supply, water supply, and
public policy reasons.

d. Project Market Study.

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e. Financial Model of project.

f. Financial statements for the applicant and other project funding sources for the
most recently ended three fiscal years, and the unaudited quarterly interim financial
statements for the current fiscal year.

g. Expressions of interest or commitment letters from funding sources.

h. For each project contract, if no contract currently exists, provide a summary of
the expected terms and conditions.

i. List of all federal, state, and local permits, including environmental
authorizations or reviews, necessary to commence construction.

j. Copies of any contract or written statements from customers of intent to
purchase project products.

E. Evaluation Criteria

Gasification projects will be evaluated on whether they meet all the requirements of
§ 48B.

Technical: will be evaluated on whether the applicant has demonstrated the
capability to accomplish the technical objectives.

Site: will be evaluated on the basis that the site requirement for ownership or control
has been met, and that the site is suitable for the proposed project.

Economic: will be evaluated on whether the project has demonstrated economic
feasibility, taking into consideration the submitted financial and project development and
structural information and financial plan.

Schedule: will be evaluated on the applicant’s ability to meet the 7 year placed-in-
service requirement.

F. Program Policy Factors To Be Used by DOE in the Evaluation of Applications

Section 48B identifies minimum requirements for consideration for the qualifying
gasification project credit, including the project’s technical feasibility, cost, and
applicant’s ability. In the event that there are more qualified (certifiable) applications
than the available tax credits, the DOE will apply additional factors to rank eligible
projects based on their ability to advance the deployment of industrial gasification
technology beyond its current state.

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If there are more certified applications than available credits, DOE will rank the
certified projects based on evaluation of the following Program Policy Factors. In
ranking certified projects, highest priority will be given to the Primary Ranking Factor.
Secondary and Tertiary Ranking Factors will be taken into account to rank projects that
are not clearly differentiated on the basis of the Primary Ranking Factor, with higher
priority given to the Secondary Ranking Factor than to Tertiary Ranking Factors.

Primary Ranking Factor:

• Capture and sequestration of more than 75 percent CO
2
emissions. Only
projects that capture and sequester 75 percent or more of the plant’s CO
2
emissions will be considered for DOE certification. Among the certified
projects, highest rankings will be given to projects with the greatest
separation and sequestration percentages of total CO
2
emissions.

Secondary Ranking Factor:

• Research partnership with an eligible educational institution as defined in
§48B(d)(4)(B).

Tertiary Ranking Factors:

• Presentation of other environmental, economic, or performance benefits
• Higher plant efficiency.
• Geographic distribution of potential markets.
• The ratio of total synthesis gas capacity (as defined in section 3.03 of Notice
2009-23) to requested tax credit.
• Diversity of technology approaches and methods.

G. Supplemental Technical and Financial Guidance for Project Information
Memorandum

Technology and Technical Information

It is important that the applicant select a specific gasification system for the project.
Without that decision, it is difficult to provide the necessary specific design information
needed for DOE to evaluate the project feasibility with respect to performance,
emissions, outputs of major streams as well as capital and operating costs.

Project Economics

Applicants should demonstrate the project’s economic feasibility and financial
viability by providing a clear statement and explanation of the economic and financial

45
assumptions made by the applicant, and a financial forecast for the project. The
financial forecast should flow logically from the applicant’s assumptions and be
consistent with them. Applicants should include assumptions regarding financial and
economic issues that may not be included in the project costs but have a direct impact
on the project. The examples given in the “Site Control and Ownership” section are
relevant here and their impact on the project economics should be discussed here.

Project Development and Financial Plan

The information provided by the applicant in this section should demonstrate that the
applicant’s financial plan for developing the project is feasible and that the applicant will
have access to necessary financing. The applicant should explain the source and
timing for obtaining all financing, including the project development costs. It is important
that the applicant explain and provide evidence that it has the capacity to fund the pre-
construction project development costs, together with a budget for and description of
those costs. Note that financial information is required for the applicant and for any
other funding source.

Project Contract Structure

This section requires that the applicant demonstrate an understanding of the
commercial contracting process and show progress in establishing the framework of
contracts and agreements that a project typically requires. Applicants should show that
their intended contract structure is reasonable and that their assumptions relative to
price, terms, and conditions are consistent with current market conditions. Evidence of
final agreements, agreements in principle, or summaries of terms and conditions
between the applicant and contract counterparties should be provided, if available.