[Congressional Record Volume 152, Number 98 (Monday, July 24, 2006)]
[Senate]
[Pages S8131-S8132]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID (for himself, Mr. Ensign, Mr. Salazar, Mr. Allard, 
        and Mr. Craig):
  S. 3719. A bill to amend the Internal Revenue Code of 1986 to allow 
public school districts to receive no interest loans for the purchase 
of renewable energy systems, and for other purposes; to the Committee 
on Finance.
  Mr. REID. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3719

       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 ``Renewable Schools Energy Act 
     of 2006''.

     SEC. 2. QUALIFIED RENEWABLE SCHOOL ENERGY BONDS.

       (a) In General.--Subchapter U of chapter 1 of the Internal 
     Revenue Code of 1986 (relating to incentives for education 
     zones) is amended by redesignating section 1397F as section 
     1397G and by adding at the end of part IV of such subchapter 
     the following new section:

     ``SEC. 1397F. QUALIFIED RENEWABLE SCHOOL ENERGY BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a qualified 
     renewable school energy bond on 1 or more credit allowance 
     dates of the bond occurring during any taxable year, 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 
     the credits determined under subsection (b) with respect to 
     such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified renewable school energy bond is 25 
     percent of the annual credit determined with respect to such 
     bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified renewable school energy bond is the 
     product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any qualified renewable school energy bond, the 
     Secretary shall determine daily or cause to be determined 
     daily a credit rate which shall apply to the first day on 
     which there is a binding, written contract for the sale or 
     exchange of the bond. The credit rate for any day is the 
     credit rate which the Secretary or the Secretary's designee 
     estimates will permit the issuance of qualified renewable 
     school energy bonds with a specified maturity or redemption 
     date without discount and without interest cost to the 
     qualified issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term also includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C thereof, relating to 
     refundable credits, subpart H thereof, section 1400N(l), and 
     this section).
       ``(d) Qualified Renewable School Energy Bond.--For purposes 
     of this section--
       ``(1) In general.--The term `renewable school energy bond' 
     means any bond issued as part of an issue if--
       ``(A) 95 percent or more of the proceeds of such issue are 
     to be used for a qualified purpose with respect to a 
     qualified school operated by an eligible local education 
     agency,
       ``(B) the bond is issued by a State or local government of 
     an eligible State within the jurisdiction of which such 
     school is located,
       ``(C) the issuer--
       ``(i) designates such bond for purposes of this section, 
     and
       ``(ii) certifies that it has the written approval of the 
     eligible local education agency for such bond issuance, and
       ``(D) the term of each bond which is part of such issue is 
     20 years.
       ``(2) Qualified school.--The term `qualified school' means 
     any public school or public school system administrative 
     building which is owned by or operated by an eligible local 
     education agency.

[[Page S8132]]

       ``(3) Eligible local education agency.--The term `eligible 
     local education agency' means any local educational agency as 
     defined in section 9101 of the Elementary and Secondary 
     Education Act of 1965.
       ``(4) Eligible state.--The term `eligible State' means, 
     with respect to any calendar year)--
       ``(A) one of the five States with the greatest percentage 
     population growth for the most recent preceding year for 
     which data is available as determined by the Bureau of the 
     Census, and
       ``(B) the State with a total percentage population growth 
     greater than 9 percent but less than 13.9 percent and a total 
     population under the age of 19 of less than 300,000 as 
     determined under the 2000 Census.
       ``(5) Qualified purpose.--The term `qualified purpose' 
     means, with respect to any qualified school, the purchase and 
     installation of renewable energy products.
       ``(e) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a national renewable 
     school energy bond limitation for each calendar year. Such 
     limitation is $50,000,000 for 2007, $100,000,000 for 2008, 
     $150,000,000 for 2009, and, except as provided in paragraph 
     (4), zero thereafter.
       ``(2) Allocation of limitation.--The national renewable 
     school energy bond limitation for a calendar year shall be 
     allocated by the Secretary--
       ``(A) among the eligible States described in subsection 
     (d)(4)(A), 30 percent to the State with the greatest 
     percentage population growth, 20 percent to each of second 
     and third ranked States, and 10 percent to each of the fourth 
     and fifth ranked States, and
       ``(B) to the State described in subsection (d)(4)(B), 10 
     percent.

     The limitation amount allocated to an eligible State under 
     the preceding sentence shall be allocated by the State 
     education agency to qualified schools within such State.
       ``(3) Designation subject to limitation amount.--The 
     maximum aggregate face amount of bonds issued during any 
     calendar year which may be designated under subsection (d)(1) 
     with respect to any qualified school shall not exceed the 
     limitation amount allocated to such school under paragraph 
     (2) for such calendar year.
       ``(4) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the limitation amount for any eligible State, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (d)(1) with respect to qualified 
     schools within such State,

     the limitation amount for such State for the following 
     calendar year shall be increased by the amount of such 
     excess. Any carryforward of a limitation amount may be 
     carried only to the first 2 years following the unused 
     limitation year. For purposes of the preceding sentence, a 
     limitation amount shall be treated as used on a first-in 
     first-out basis.
       ``(f) Other Definitions.--For purposes of this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) State.--The term `State' includes the District of 
     Columbia and any possession of the United States.
       ``(g) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)).
       ``(h) Credits May Be Stripped.--Under regulations 
     prescribed by the Secretary--
       ``(1) In general.--There may be a separation (including at 
     issuance) of the ownership of a qualified renewable school 
     energy bond and the entitlement to the credit under this 
     section with respect to such bond. In case of any such 
     separation, the credit under this section shall be allowed to 
     the person which, on the credit allowance date, holds the 
     instrument evidencing the entitlement to the credit and not 
     to the holder of the bond.
       ``(2) Certain rules to apply.--In the case of a separation 
     described in paragraph (1), the rules of section 1286 shall 
     apply to the qualified renewable school energy bond as if it 
     were a stripped bond and to the credit under this section as 
     if it were a stripped coupon.
       ``(i) Credit Treated as Nonrefundable Bondholder Credit.--
     For purposes of this title, the credit allowed by this 
     section shall be treated as a credit allowable under subpart 
     H of part IV of subchapter A of this chapter.
       ``(j) Special Rules.--For purposes of this section, rules 
     similar to the rules under paragraphs (3) and (4) of section 
     54(l) shall apply.''.
       (b) Conforming Amendments.--The table of sections for part 
     V of such subchapter is amended by redesignating section 
     1397F as section 1397G and by adding at the end of the table 
     of sections for part IV of such subchapter the following new 
     item:

``Sec. 1397F. Credit for holders of qualified renewable school energy 
              bonds.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 2006.

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