26 U.S.C. § 45K: Credit for producing fuel from a nonconventional source

$3, multiplied by sold by the taxpayer to an unrelated person during the taxable year, and the production of which is attributable to the taxpayer. the amount by which the reference price for the calendar year in which the sale occurs exceeds $23.50, bears to $6. The $3 amount in subsection (a) and the $23.50 and $6 amounts in paragraph (1) shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. In the case of gas from a tight formation, the $3 amount in subsection (a) shall not be adjusted. grants provided by the United States, a State, or a political subdivision of a State for use in connection with the project, proceeds of any issue of State or local government obligations used to provide financing for the project the interest on which is exempt from tax under section 103, and the aggregate amount of subsidized energy financing (within the meaning of section 48(a)(4)(C)) provided in connection with the project, and the denominator of which is the aggregate amount of additions to the capital account for the project for the taxable year and all prior taxable years. The amounts under subparagraph (A) for any taxable year shall be determined as of the close of the taxable year. the aggregate amount allowed under section 38 for the taxable year or any prior taxable year by reason of the energy percentage with respect to property used in the project, over under section 49(b) or 50(a) for the taxable year or any prior taxable year, or under this paragraph for any prior taxable year. the aggregate amount allowed under section 38 for the taxable year and any prior taxable year by reason of any enhanced oil recovery credit determined under section 43 with respect to such project, over the aggregate amount recaptured with respect to the amount described in subparagraph (A) under this paragraph for any prior taxable year. oil produced from shale and tar sands, geopressured brine, Devonian shale, coal seams, or a tight formation, or biomass, and liquid, gaseous, or solid synthetic fuels produced from coal (including lignite), including such fuels when used as feedstocks. Except as provided in subparagraph (B), the determination of whether any gas is produced from geopressured brine, Devonian shale, coal seams, or a tight formation shall be made in accordance with section 503 of the Natural Gas Policy Act of 1978 (as in effect before the repeal of such section). which, as of April 20, 1977 , was committed or dedicated to interstate commerce (as defined in section 2(18) of the Natural Gas Policy Act of 1978, as in effect on the date of the enactment of this clause), or which is produced from a well drilled after such date of enactment. oil and natural gas (or any product thereof), and coal (including lignite) or any product thereof. the United States (within the meaning of section 638(1)), or a possession of the United States (within the meaning of section 638(2)). The Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor and the reference price for the preceding calendar year in accordance with this paragraph. The term “inflation adjustment factor” means, with respect to a calendar year, a fraction the numerator of which is the GNP implicit price deflator for the calendar year and the denominator of which is the GNP implicit price deflator for calendar year 1979. The term “GNP implicit price deflator” means the first revision of the implicit price deflator for the gross national product as computed and published by the Department of Commerce. The term “reference price” means with respect to a calendar year the Secretary’s estimate of the annual average wellhead price per barrel for all domestic crude oil the price of which is not subject to regulation by the United States. In the case of a property or facility in which more than 1 person has an interest, except to the extent provided in regulations prescribed by the Secretary, production from the property or facility (as the case may be) shall be allocated among such persons in proportion to their respective interests in the gross sales from such property or facility. The amount of the credit allowable under subsection (a) shall be determined without regard to any production attributable to a property from which gas from Devonian shale, coal seams, geopressured brine, or a tight formation was produced in marketable quantities before January 1, 1980 . The term “barrel-of-oil equivalent” with respect to any fuel means that amount of such fuel which has a Btu content of 5.8 million; except that in the case of qualified fuels described in subparagraph (C) of subsection (c)(1), the Btu content shall be determined without regard to any material from a source not described in such subparagraph. The term “barrel” means 42 United States gallons. Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling qualified fuels to an unrelated person if such fuels are sold to such a person by another member of such group. Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. produced from a well drilled after December 31, 1979 , and before January 1, 1993 , or produced in a facility placed in service after December 31, 1979 , and before January 1, 1993 , and which are sold before January 1, 2003 . for purposes of subsection (e)(1)(B), such facility shall be treated as being placed in service before January 1, 1993 , if such facility is placed in service before July 1, 1998 , pursuant to a binding written contract in effect before January 1, 1997 , and if such facility is originally placed in service after December 31, 1992 , paragraph (2) of subsection (e) shall be applied with respect to such facility by substituting “ January 1, 2008 ” for “ January 1, 2003 ”. Paragraph (1) shall not apply to any facility which produces coke or coke gas unless the original use of the facility commences with the taxpayer. beginning on the later of January 1, 2006 , or the date that such facility is placed in service, and ending on the date which is 4 years after the date such period began. The amount of qualified fuels sold during any taxable year which may be taken into account by reason of this subsection with respect to any facility shall not exceed an average barrel-of-oil equivalent of 4,000 barrels per day. Days before the date the facility is placed in service shall not be taken into account in determining such average. For purposes of applying subsection (b)(2) to the $3 amount in subsection (a), in the case of fuels sold after 2005, subsection (d)(2)(B) shall be applied by substituting “2004” for “1979”. This subsection shall not apply to any facility producing qualified fuels for which a credit was allowed under this section for the taxable year or any preceding taxable year by reason of subsection (f). Subsection (b)(1) shall not apply. No credit shall be allowed with respect to any coke or coke gas which is produced using steel industry fuel (as defined in section 45(c)(7)) as feedstock if a credit is allowed to any taxpayer under section 45 with respect to the production of such steel industry fuel. Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 30, 38, 43, 45, 45I, 53, 55, 613A, and 772 of this title and renumbering section 29 of this title as this section] shall apply to credits determined under the Internal Revenue Code of 1986 for taxable years ending after December 31, 2005 . The amendments made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [ Aug. 8, 2005 ].” Except as provided in paragraph (2), the amendments made by this section [enacting section 50 of this title and amending this section and sections 38, 42, 46 to 49, 52, 55, 108, 145, 147, 168, 170, 179, 196, 280F, 312, 465, 469, 861, 865, 1016, 1033, 1245, 1274A, 1371, 1388 and 1503 of this title] shall apply to property placed in service after December 31, 1990 . any transition property (as defined in section 49(e) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act [ Nov. 5, 1990 ]), any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of such Code (as so in effect), and any property described in section 46(b)(2)(C) of such Code (as so in effect).” any transaction occurring before the date of the enactment of this Act [ Nov. 5, 1990 ], any property acquired before such date of enactment, or any item of income, loss, deduction, or credit taken into account before such date of enactment, and the treatment of such transaction, property, or item under such provision would (without regard to the amendments made by this part) affect liability for tax for periods ending after such date of enactment,