[Congressional Record Volume 147, Number 28 (Tuesday, March 6, 2001)]
[Senate]
[Pages S1905-S1906]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD:
  S. 465. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit for residential solar energy property; to the Committee on 
Finance.
  Mr. ALLARD. Mr. President. I am honored today to introduce the 
Residential Solar Energy Tax Credit Act of 2001 which provides a 15 
percent residential tax credit for consumers who purchase solar 
electric, photovoltaics, and solar thermal products. This bill is 
similar to one I introduced in the last Congress. I believe we have a 
wonderful opportunity to address this important energy issue and pass 
this bill.
  The legislation is an important step in preserving U.S. global 
leadership in the solar industry where we now export over 70 percent of 
our products. In recent years, over ten U.S. solar manufacturing 
facilities have been built or expanded making the U.S. the world's 
largest manufacturer of solar products. The expansion of the U.S. 
domestic market is essential to sustain U.S. global market dominance.
  Other countries, notably Japan and Germany, have instituted very 
large-scale market incentives for the use of solar energy on buildings, 
spending far more by their governments to build their respective 
domestic solar industries. Passage of this bill will insure the U.S. 
stays the global solar market leader into the next millennium.
  Recent tax legislation passed by this body, has included necessary 
support of the independent domestic oil producers, overseas oil 
refiners, nuclear industry decommissioning, and wind energy, all 
worthy. This small proposal not only adds to these but provides an 
incentive to the individual homeowner to generate their own energy. In 
fact, 28 states have passed laws in the last two years to provide a 
technical standard for interconnecting solar systems to the electric 
grid, provide consumer friendly contracts, and provide rates for the 
excess power generated. These efforts at regulatory reform at the state 
level combined with a limited incentive as proposed in this bill, will 
drive the use of solar energy.
  Contrary to popular belief, solar energy is manufactured and used 
evenly throughout the United States. Solar manufacturers are in 
Arizona, California, Colorado, Delaware, Florida, Illinois, Iowa, 
Maryland, Massachusetts, Michigan, New Jersey, New Mexico, New York, 
North Carolina, Ohio, Texas, Virginia, Washington and Wisconsin. In 
addition, solar assembly and distribution companies are in: Alaska, 
Connecticut, Georgia, Hawaii, Idaho, Indiana, Kansas, Maine, Minnesota, 
Missouri, Montana, Nevada, New Hampshire, Oregon, Pennsylvania, Rhode 
Island, Tennessee, Vermont, as well as Puerto Rico, U.S. Virgin 
Islands, and Guam. In addition to these states, solar component and 
research companies are in Alabama, Arkansas, Kentucky, Mississippi, 
Nebraska, North Dakota, Oklahoma, South Carolina, and West Virginia.
  More than 90 U.S. electric utilities including municipals, 
cooperatives and independents--which represent more than half of U.S. 
power generation--are active in solar energy. Aside from new, automated 
solar manufacturing facilities, a wide range of new uses of solar has 
occurred in the last two years, such as: an array of facilities 
installed in June at the Pentagon power block to provide mid-day peak 
power; installation of solar on the first U.S. skyscraper in Times 
Square in New York City; and development of a solar mini-manufacturing 
facility at a brown field in Chicago which will provide solar products 
for roadway lighting and for area schools.
  This small sampling of American ingenuity is just the beginning of 
the U.S. solar industry's maturity. Adoption of solar power by 
individual American consumers will create economies-of-scale of 
production that will, over time, dramatically lower costs and increase 
availability of solar power.
  The bill I have introduced costs much less than previous proposals 
and provides consumer safeguards. This bill represents a pragmatic 
approach in utilizing the marketplace as a driver of technology. The 
benefits to our country are profound. The U.S. solar industry believes 
the incentives will create 20,000 new high technology manufacturing 
jobs, offset pollution of more than 2 million vehicles, cut U.S. solar 
energy unit imports which are already over 50 percent, and leverage 
U.S. industry even further into the global export markets.
  The Residential Solar Energy Tax Credit Act of 2001 is sound energy 
policy, sound environmental policy, promotes our national security, and 
enhances our economic strength at home and abroad. I ask my colleagues 
to include this initiative in any upcoming tax and/or energy 
deliberations. American consumers will thank us, and our children will 
thank us for the future benefits we have preserved for them.
  Mr. President, I ask unanimous consent the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 465

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Residential Solar Energy Tax 
     Credit Act''.

     SEC. 2. CREDIT FOR RESIDENTIAL SOLAR ENERGY PROPERTY.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25A the following new section:

     ``SEC. 25B. RESIDENTIAL SOLAR ENERGY PROPERTY.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the sum 
     of--
       ``(1) 15 percent of the qualified photovoltaic property 
     expenditures made by the taxpayer during such year, and
       ``(2) 15 percent of the qualified solar water heating 
     property expenditures made by the taxpayer during the taxable 
     year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed under subsection 
     (a)(2) shall not exceed $2,000 for each system of solar 
     energy property.
       ``(2) Type of property.--No expenditure may be taken into 
     account under this section unless such expenditure is made by 
     the taxpayer for property installed on or in connection with 
     a dwelling unit which is located

[[Page S1906]]

     in the United States and which is used as a residence.
       ``(3) Safety certifications.--No credit shall be allowed 
     under this section for an item of property unless--
       ``(A) in the case of solar water heating equipment, such 
     equipment is certified for performance and safety by the non-
     profit Solar Rating Certification Corporation or a comparable 
     entity endorsed by the government of the State in which such 
     property is installed, and
       ``(B) in the case of a photovoltaic system, such system 
     meets appropriate fire and electric code requirements.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified solar water heating property expenditure.--
     The term `qualified solar water heating property expenditure' 
     means an expenditure for property that uses solar energy to 
     heat water for use in a dwelling unit with respect to which a 
     majority of the energy is derived from the sun.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means an 
     expenditure for property that uses solar energy to generate 
     electricity for use in a dwelling unit.
       ``(3) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as property described in 
     paragraph (1) or (2) solely because it constitutes a 
     structural component of the structure on which it is 
     installed.
       ``(4) Labor costs.--Expenditures for labor costs properly 
     allocable to the onsite preparation, assembly, or original 
     installation of the property described in paragraph (1) or 
     (2) and for piping or wiring to interconnect such property to 
     the dwelling unit shall be taken into account for purposes of 
     this section.
       ``(5) Swimming pools, etc., used as storage medium.--
     Expenditures which are properly allocable to a swimming pool, 
     hot tub, or any other energy storage medium which has a 
     function other than the function of such storage shall not be 
     taken into account for purposes of this section.
       ``(d) Special Rules.--For purposes of this section--
       ``(1) Dollar amounts in case of joint occupancy.--In the 
     case of any dwelling unit which is jointly occupied and used 
     during any calendar year as a residence by 2 or more 
     individuals the following shall apply:
       ``(A) The amount of the credit allowable under subsection 
     (a) by reason of expenditures (as the case may be) made 
     during such calendar year by any of such individuals with 
     respect to such dwelling unit shall be determined by treating 
     all of such individuals as 1 taxpayer whose taxable year is 
     such calendar year.
       ``(B) There shall be allowable with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in such section), such 
     individual shall be treated as having made his tenant-
     stockholder's proportionate share (as defined in section 
     216(b)(3)) of any expenditures of such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which he owns, such individual shall be 
     treated as having made his proportionate share of any 
     expenditures of such association.
       ``(B) Condominium management association.--For purposes of 
     this paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Joint ownership of items of solar energy property.--
       ``(A) In general.--Any expenditure otherwise qualifying as 
     an expenditure described in paragraph (1) or (2) of 
     subsection (c) shall not be treated as failing to so qualify 
     merely because such expenditure was made with respect to 2 or 
     more dwelling units.
       ``(B) Limits applied separately.--In the case of any 
     expenditure described in subparagraph (A), the amount of the 
     credit allowable under subsection (a) shall (subject to 
     paragraph (1)) be computed separately with respect to the 
     amount of the expenditure made for each dwelling unit.
       ``(5) Allocation in certain cases.--If less than 80 percent 
     of the use of an item is for nonbusiness residential 
     purposes, only that portion of the expenditures for such item 
     which is properly allocable to use for nonbusiness 
     residential purposes shall be taken into account. For 
     purposes of this paragraph, use for a swimming pool shall be 
     treated as use which is not for residential purposes.
       ``(6) When expenditure made; amount of expenditure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an expenditure with respect to an item shall be treated as 
     made when the original installation of the item is completed.
       ``(B) Expenditures part of building construction.--In the 
     case of an expenditure in connection with the construction or 
     reconstruction of a structure, such expenditure shall be 
     treated as made when the original use of the constructed or 
     reconstructed structure by the taxpayer begins.
       ``(C) Amount.--The amount of any expenditure shall be the 
     cost thereof.
       ``(e) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(f) Termination.--The credit allowed under this section 
     shall not apply to taxable years beginning after December 31, 
     2006.''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 1016 of such Code is amended 
     by striking ``and'' at the end of paragraph (26), by striking 
     the period at the end of paragraph (27) and inserting ``; 
     and'', and by adding at the end the following new paragraph:
       ``(28) to the extent provided in section 25B(e), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25B.''.
       (2) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 25A the 
     following new item:

``Sec. 25B. Residential solar energy property.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2001.
                                 ______