[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Pages S3432-S3433]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. UDALL of Colorado:
  S. 1093. A bill to amend the Internal Revenue Code of 1986 to provide 
that solar energy property need not be located on the property with 
respect to

[[Page S3433]]

which it is generating electricity in order to qualify for the 
residential energy efficient property credit; to the Committee on 
Finance.
  Mr. UDALL of Colorado. Mr. President, I rise to speak about a bill 
that is born from the forward-thinking ideas of my constituents, a bill 
that will help spur our Nation's new energy economy and create jobs: 
the Solar Uniting Neighborhoods Act, or SUN Act.
  Over the last three years, I have been travelling across Colorado as 
part of a work force tour to talk directly to Coloradans and hear their 
innovative policy ideas to create jobs. The SUN Act comes directly from 
visiting with Coloradans.
  This bill will help bring commonsense to our tax code, get government 
out of the way of developing solar energy, and spur job growth in every 
community across the United States.
  I installed solar panels on my own home several years ago to take 
advantage of the strong Colorado sun. However, I understand this option 
is not available for all American families who want to receive their 
home's energy needs from solar power. There can be difficulties 
attaching solar panels to your home, which is why more and more 
neighborhoods and towns are creating so called ``community solar'' 
projects.
  Instead of affixing solar panels to every roof on the block, an 
increasing number of Americans have decided to place those same solar 
panels all together in one open and unobstructed sunny area near their 
homes. By grouping solar panels together, it reduces the cost by up to 
30 percent compared to installing each panel on every roof separately. 
Whether used by neighbors living at the end of a cul-de-sac or 
developed by our rural energy cooperatives, creating these group solar 
projects to share energy is a great way to lower the cost of developing 
solar energy.
  But there is a problem: our tax code is getting in the way. It 
discourages neighborhood solar projects by requiring that solar panels 
must actually be on your property instead of allowing neighbors and 
others to partner on community solar projects. This discourages 
innovation and slows the growth of solar power as an alternate energy 
source.
  The SUN Act would make a small change to the tax code that would no 
longer constrain this innovative solar energy development. By 
eliminating the requirement that solar panels be on one individual's 
property, it allows Americans to work together on community projects 
where each individual can claim a tax credit. This simple solution 
makes it easier to adopt and use clean, renewable energy.
  What excites me about this bill is that it will create jobs for 
Americans in every neighborhood where these community solar projects 
are developed. This bill reduces barriers that currently prevent 
Americans from adopting solar energy, opens up new markets, and creates 
a simple structure to allow people to utilize clean energy for their 
home.
  Mr. Presdient, 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. 1093

       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 ``Solar Uniting Neighborhoods 
     (SUN) Act of 2011''.

     SEC. 2. CLARIFICATION WITH RESPECT TO LOCATION OF SOLAR 
                   ELECTRIC PROPERTY.

       (a) In General.--Paragraph (2) of section 25D(d) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(2) Qualified solar electric property expenditure.--
       ``(A) In general.--The term `qualified solar electric 
     property expenditure' means an expenditure for property which 
     uses solar energy to generate electricity--
       ``(i) for use in a dwelling unit located in the United 
     States and used as a residence by the taxpayer, or
       ``(ii) which enters the electrical grid at any point which 
     is not more than 50 miles from the point at which such a 
     dwelling unit used as a residence by the taxpayer is 
     connected to such grid, but only if such property is not used 
     in a trade or business of the taxpayer or in an activity with 
     respect to which a deduction is allowed to the taxpayer under 
     section 162 or paragraph (1) or (2) of section 212.
       ``(B) Recapture.--The Secretary may provide for the 
     recapture of the credit under this subsection with respect to 
     any property described in clause (ii) of subparagraph (A) 
     which ceases to satisfy the requirements of such clause.''.
       (b) Limitation With Respect to Off-site Solar Property.--
     Subsection (b) of section 25D of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     paragraph:
       ``(3) Maximum credit for off-site solar property.--In the 
     case of any qualified solar electric property expenditure 
     which is such an expenditure by reason of clause (ii) of 
     subsection (d)(2)(A), the credit allowed under subsection (a) 
     (determined without regard to subsection (c)) for any taxable 
     year with respect to all such expenditures shall not exceed 
     $50,000.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 3. CLARIFICATION WITH RESPECT TO LOCATION OF SOLAR WATER 
                   HEATING PROPERTY.

       (a) In General.--Section 25D(d)(1) of the Internal Revenue 
     Code of 1986 is amended--
       (1) by striking ``The term'' and inserting the following:
       ``(A) In general.--The term'', and
       (2) by adding at the end the following new subparagraph:
       ``(B) Off-site property.--
       ``(i) In general.--Such term shall include an expenditure 
     for property described in subparagraph (A) notwithstanding--

       ``(I) whether such property is located on the same site as 
     the dwelling unit for which the energy generated from such 
     property is used, and
       ``(II) whether the energy generated by such property 
     displaces the energy used to heat the water load or space 
     heating load for the dwelling, so long as any such 
     displacement from such property occurs not more than 50 miles 
     from such dwelling unit,

     but only if such property is not used in a trade or business 
     of the taxpayer or in an activity with respect to which a 
     deduction is allowed to the taxpayer under section 162 or 
     paragraph (1) or (2) of section 212.
       ``(ii) Recapture.--The Secretary may provide for the 
     recapture of the credit under this subsection with respect to 
     any property described in clause (i) which ceases to satisfy 
     the requirements of such clause.''.
       (b) Limitation With Respect to Off-site Solar Property.--
     Paragraph (3) of section 25D(b) of the Internal Revenue Code 
     of 1986, as added by section 2, is amended to read as 
     follows:
       ``(3) Maximum credit for off-site solar property.--In the 
     case of--
       ``(A) any qualified solar electric property expenditure 
     which is such an expenditure by reason of clause (ii) of 
     subsection (d)(2)(A), and
       ``(B) any qualified solar water heating property 
     expenditure which is such an expenditure by reason of 
     subparagraph (B) of subsection (d)(1),

     the credit allowed under subsection (a) (determined without 
     regard to subsection (c)) for any taxable year with respect 
     to all such expenditures shall not exceed $50,000.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 4. EXCLUSION OF INCOME FROM QUALIFYING SALES.

       (a) In General.--Part III of subchapter B of chapter 1 is 
     amended by inserting before section 140 the following new 
     section:

     ``SEC. 139F. INCOME FROM QUALIFYING SALES OF SOLAR 
                   ELECTRICITY.

       ``For any taxable year, gross income of any person shall 
     not include any gain from the sale or exchange to the 
     electrical grid during such taxable year of electricity which 
     is generated by property with respect to which any qualified 
     solar electric property expenditures are eligible to be taken 
     into account under section 25D, but only to the extent such 
     gain does not exceed the value of the electricity used at 
     such residence during such taxable year.''.
       (b) Technical Amendment.--The Internal Revenue Code of 1986 
     is amended by redesignating the section added to such Code by 
     section 10108(f) of the Patient Protection and Affordable 
     Care Act as section 139E, and by locating such section 
     immediately after section 139D of such Code (as added by 
     section 9021(a) of such Act) and immediately before section 
     139F of such Code (as added by this section).
       (c) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 of such Code is amended by 
     striking all that follows after the item relating to section 
     139C and inserting the following items:

``Sec. 139D. Indian health care benefits.
``Sec. 139E. Free choice vouchers.
``Sec. 139F. Income from qualifying sales of solar electricity.
``Sec. 140. Cross references to other Acts.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______