II 110th CONGRESS 1st Session S. 590 IN THE SENATE OF THE UNITED STATES February 14, 2007 Mr. Smith (for himself, Mr. Salazar, Ms. Snowe, Mr. Menendez, Mr. Lugar, Mr. Kerry, Mr. Kennedy, Mr. Allard, Mr. Wyden, Mr. Lieberman, Mr. Lautenberg, Ms. Cantwell, and Ms. Landrieu) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to extend the investment tax credit with respect to solar energy property and qualified fuel cell property, and for other purposes.

1.

Short title

This Act may be cited as the Securing America’s Energy Independence Act of 2007.

2.

Provisions relating to the investment tax credit with respect to solar energy property and qualified fuel cell property

(a)

Extension of credit for solar energy property

Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) of the Internal Revenue Code of 1986 are each amended by striking January 1, 2009 and inserting January 1, 2017. (b)

Extension of credit for eligible fuel cell property

Paragraph (1)(E) of section 48(c) of the Internal Revenue Code of 1986 is amended by striking December 31, 2008 and inserting December 31, 2016. (c)

Energy property to include excess energy storage device

Clause (i) of section 48(a)(3)(A) of the Internal Revenue Code of 1986 is amended to read as follows: (i)equipment which uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat, or advanced energy storage systems installed as an integrated component of the foregoing, excepting property used to generate energy for purposes of heating a swimming pool, . (d)

Modifications

(1)

Solar photovoltaic energy property credit determined solely by kilowatt capacity

(A)

In general

Subsection (a) of section 48 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: (4)

Special rule for energy credit for solar photovoltaic energy property

(A)

In general

For purposes of section 46, the energy credit for any taxable year for solar photovoltaic energy property described in paragraph (3)(A)(i) which is used to generate electricity and which is placed in service during the taxable year is $1,500 with respect to each half kilowatt of direct current of installed capacity of such property. Paragraph (2)(A)(ii) shall not apply to property to which the preceding sentence applies. (B)

Application of special rules for rehabilitated or subsidized property

Rules similar to the rules of paragraphs (2)(B) and (5) shall apply to property to which this paragraph applies. . (B)

Conforming amendment

Subclause (II) of section 48(a)(2)(A)(i) of such Code is amended by striking described in paragraph (3)(A)(i) and inserting which is described in paragraph (3)(A)(i) and to which paragraph (4) does not apply. (e)

Credits allowed against the alternative minimum tax

Section 38(c)(4)(B) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (i), by striking the period at the end of clause (ii)(II) and inserting , and, and by adding at the end the following new clause: (iii)the portion of the investment credit under section 46(2) which is determined under clauses (i) and (ii) of section 48(a)(2)(A). . (f)

Effective dates

(1)Except as provided in paragraph (2), the amendments made by this section shall take effect on January 1, 2007. (2)The amendments made by subsection (c) shall apply to property placed in service after December 31, 2006.

3.

Extension and modification of credit for residential energy efficient property

(a)

Extension

Subsection (g) of section 25D of the Internal Revenue Code of 1986 is amended by striking December 31, 2008 and inserting December 31, 2016. (b)

Solar electric property

Paragraph (1) of section 25D(a) of the Internal Revenue Code of 1986 is amended by striking 30 percent of. (c)

Modification of maximum credit

Paragraph (1) of section 25D(b) of the Internal Revenue Code of 1986 is amended to read as follows: (1)

Maximum credit

The credit allowed under subsection (a) for any taxable year shall not exceed— (A)$1,500 with respect to each half kilowatt of direct current of installed capacity of qualified solar electric property for which qualified solar electric property expenditures are made, (B)$2,000 with respect to any qualified solar heating and cooling property expenditures, and (C)$500 with respect to each half kilowatt of capacity of qualified fuel cell property (as defined in section 48(c)(1)) for which qualified fuel cell property expenditures are made. . (d)

Definition of qualified solar heating and cooling property expenditure

(1)

In general

Paragraph (1) of section 25D(d) of the Internal Revenue Code of 1986 is amended to read as follows: (2)

Qualified solar heating and cooling property expenditure

The term qualified solar heating and cooling property expenditure means an expenditure for property to heat or cool (or provide hot water for use in) a dwelling unit located in the United States and used as a residence by the taxpayer if at least half of the energy used by such property for such purpose is derived from the sun. Such term shall not include an expenditure which is a qualified solar electric property expenditure. . (2)

Conforming amendments

Subsections (a)(2) and (e)(4)(A)(ii) of section 25D of such Code are each amended by striking qualified solar water heating and inserting qualified solar heating and cooling (e)

Definition of qualified photovoltaic property expenditure

Paragraph (2) of section 25D(d) of the Internal Revenue Code of 1986 is amended by inserting , including advanced energy storage systems installed as an integrated component of the foregoing after taxpayer. (f)

Credit allowed against alternative minimum tax

(1)

In general

Section 25D(b) of the Internal Revenue Code of 1986, as amended by subsection (c), is amended by adding at the end the following new paragraph: (3)

Credit allowed against alternative minimum tax

The credit allowed under subsection (a) for the taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under subpart A of part IV of subchapter A (other than this section) and section 27 for the taxable year. . (2)

Conforming amendments

(A)Subsection (c) of section 25D of such Code is amended to read as follows: (c)

Carryforward of unused credit

If the credit allowable under subsection (a) for any taxable year exceeds the limitation imposed by subsection (b)(3) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year. . (B)Section 23(b)(4)(B) of such Code is amended by inserting and section 25D after this section. (C)Section 24(b)(3)(B) of such Code is amended by striking sections 23 and 25B and inserting sections 23, 25B, and 25D. (D)Section 26(a)(1) of such Code is amended by striking and 25B and inserting 25B, and 25D. (g)

Effective date

The amendments made by this section shall apply to expenditures made in taxable years beginning after December 31, 2006.

4.

3-year accelerated depreciation period for solar energy property and fuel cell property

(a)

In general

Subparagraph (A) of section 168(e)(3) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting a comma, and by inserting after clause (iii) the following new clauses: (iv)any property which is described in clause (i) or (ii) of section 48(a)(3)(A) (or would be so described if the last sentence of such section did not apply to such clause), and (v)any property which is described in clause (iv) of section 48(a)(3)(A). . (b)

Conforming amendment

Subclause (I) of section 168(e)(3)(B)(vi) of the Internal Revenue Code of 1986 is amended to read as follows: (I)would be described in subparagraph (A) of section 48(a)(3) if wind energy were substituted for solar energy in clause (i) thereof and the last sentence of such section did not apply to such subparagraph, . (c)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2006.