A bill to amend the Internal Revenue Code of 1986 to extend the credit period for the production of refined coal, and for other purposes.
- Bill Number
- S. 4112
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-03-17: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-03-31T21:35:48Z
AI-Generated Summary
Purpose
This bill (S. 4112) aims to extend the time period during which producers of refined coal—a type of treated coal designed to reduce emissions when burned—can claim a federal tax credit under the Internal Revenue Code. The goal is to support ongoing production of refined coal beyond the current expiration date.
Key Provisions
- Extension of Credit Period: Amends Section 45(e)(8)(A) of the Internal Revenue Code of 1986 to allow the tax credit for refined coal production to apply to coal produced and sold before January 1, 2033, replacing the previous limit of a 10-year window starting from when the production facility was first placed in service.
- Adjustments for Steel Industry Fuel: Updates rules for facilities producing "steel industry fuel" (a specific type of refined coal used in steelmaking) to ensure eligibility under the extended period.
- Conforming Changes: Removes or redesignates outdated clauses in related sections (e.g., Sections 45(e)(8)(D) and 45(d)(8)(A)) to align with the new deadline and clarify modifications to facilities.
- Effective Date: The changes apply to refined coal produced and sold after December 31, 2025.
Significant Changes to Existing Law
- Shifts from a facility-specific 10-year credit window (tied to the original service date) to a fixed calendar deadline of December 31, 2032, providing more predictability for producers whose facilities were placed in service before 2023.
- Eliminates certain restrictive subclauses and redesignates others to streamline eligibility, while adding language to explicitly include steel industry fuel production in modification rules.
- These amendments extend the availability of the Section 45 tax credit, which provides dollar-per-ton incentives for producing refined coal that meets emissions-reduction standards.
Potential Impacts
- On Government Agencies: The Internal Revenue Service (IRS) will administer extended tax credits, potentially increasing short-term federal revenue outlays (as credits reduce tax liabilities) but supporting energy sector stability; no direct impact on other agencies.
- On Citizens: May benefit workers and communities in coal-producing regions by incentivizing continued operations, potentially preserving jobs; indirect effects on energy costs if refined coal use influences electricity or steel prices.
- On International Relations: Minimal direct impact, though it could indirectly support U.S. steel exports by aiding domestic production, without altering trade policies.
Main Stakeholders Affected
- Refined Coal Producers: Primary beneficiaries, as they gain several additional years to claim credits, encouraging investment in treatment facilities.
- Steel Industry: Gains from specific provisions for steel industry fuel, potentially lowering production costs and improving competitiveness.
- Taxpayers and Government: The U.S. Treasury and IRS face fiscal costs from extended credits, estimated in billions over time (based on historical credit usage), offset by economic activity in energy sectors.
- Environmental Groups: Indirectly affected, as extended incentives may prolong reliance on coal-based energy, though refined coal is designed to emit fewer pollutants than untreated coal.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens tax incentives under Section 45 of the Internal Revenue Code, a clean coal provision from the Energy Policy Act of 2005; no challenges to constitutionality anticipated, as it aligns with Congress's taxing and spending powers.
- Constitutional: Falls within federal authority to regulate interstate commerce and taxation; no apparent conflicts with state laws or individual rights.
- Political: Represents a targeted extension of fossil fuel subsidies amid debates on energy transition, potentially drawing support from energy-state lawmakers while facing criticism from advocates for renewable energy; as an amendment to existing tax law, it avoids broad new spending but could influence future climate legislation.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-03-17: Read twice and referred to the Committee on Finance.
- 2026-03-17: Introduced in Senate
Bill Versions
- To amend the Internal Revenue Code of 1986 to extend the credit period for the production of refined coal, and for other purposes. — issued 2026-03-17 — PDF (2 pages)