II 111th CONGRESS 1st Session S. 284 IN THE SENATE OF THE UNITED STATES January 21, 2009 Mr. Menendez 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 allow a new refundable credit for equipment used to manufacture solar energy property, to waive the application of the subsidized financing rules to such property, and for other purposes.

1.

Short title

This Act may be cited as the Solar Stimulus for Job Creation and Energy Independence Act of 2009.

2.

Refundable investment credit for property used to manufacture solar energy property

(a)

In general

Subparagraph (A) of section 48(a)(3) of the Internal Revenue Code of 1986 (defining energy property) is amended by striking or at the end of clause (vi), by adding or at the end of clause (vii), and by inserting after clause (vii) the following new clause: (viii)property used to manufacture equipment described in clause (i) or (ii), . (b)

Credit To be refundable

(1)

In general

Subsection (c) of section 38 of the Internal Revenue Code of 1986 (relating to limitation based on amount of tax) is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph: (5)

Special rules for solar energy investment credit

(A)

In general

In the case of the solar energy investment credit— (i)this section and section 39 shall be applied separately with respect to such credit, (ii)in applying paragraph (1) to such credit— (I)the tentative minimum tax shall be treated as being zero, and (II)the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the solar energy investment credit), and (iii)the amount of the solar energy investment credit in excess of the limitation under paragraph (1) (as modified by subclause (II)) shall be treated as a credit under subpart C. (B)

Solar energy investment credit

For purposes of this subsection, the term solar energy investment credit means so much of the energy credit as is attributable to property described in clause (viii) of section 48(a)(3)(A). (C)

Termination

This paragraph shall not apply to any taxable year ending after December 31, 2010. . (2)

Conforming amendments

(A)Subclause (II) of section 38(c)(2)(A)(ii) of such Code is amended by striking and the specified credits and inserting the specified credits, and the solar energy investment credit. (B)Subclause (II) of section 38(c)(3)(A)(ii) of such Code is amended by striking and the specified credits and inserting , the specified credits, and the solar energy investment credit. (C)Subclause (II) of section 38(c)(4)(A)(ii) of such Code is amended by inserting and the solar energy investment credit after specified credits. (D)Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 38(c)(5), after 36, . (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

3.

Exception from subsidized energy financing rules for solar energy property

(a)

In general

Subparagraph (C) of section 48(a)(4) of the Internal Revenue Code of 1986 (defining subsidized energy financing) is amended by adding at the end the following new sentence: Such term shall not include any loan described in section 141(c)(2)(D). (b)

Effective date

The amendment made by subsection (a) shall apply to property placed in service after such date in taxable years ending after such date.

4.

Exception from private activity bond tests for financing of solar energy property

(a)

Exception from private business use test

Paragraph (6) of section 141(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C)

Solar energy property

For purposes of subparagraph (A), property described in clause (i) or (ii) of section 48(a)(3)(A) shall not be treated as used in a trade or business. . (b)

Exception from private loan financing test

Paragraph (2) of section 141(c) of the Internal Revenue Code of 1986 (relating to exception for tax assessment, etc., loans) is amended by striking or at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting , or, and by adding at the end the following new subparagraph: (D)enables the borrower to finance the acquisition, construction, and installation of property described in clause (i) or (ii) of section 48(a)(3)(A). . (c)

Effective date

The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.

5.

Government procurement of solar energy

Section 203 of the Energy Policy Act of 2005 (42 U.S.C. 15852) is amended— (1)by redesignating subsection (d) as subsection (e); and (2)by inserting after subsection (c) the following new subsection (d): (d)

Contracts for renewable energy

Notwithstanding section 501(b)(1)(B) of title 40, United States Code, a contract for renewable energy may be made for a period of not more than 25 years. .