Renewable Schools Energy Act of 2006 - Amends the Internal Revenue Code to allow a tax credit for investment in qualified renewable school energy bonds. Defines "qualified renewable school energy bond" as a bond with a 20-year term, 95% of the proceeds of which are used for the purchase and installation of renewable energy products for public school and school district administrative buildings in states with a specified percentage of population growth.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3719 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 3719
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.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 24, 2006
Mr. Reid (for himself, Mr. Ensign, Mr. Salazar, Mr. Allard, and Mr.
Craig) 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 public school
districts to receive no interest loans for the purchase of renewable
energy systems, and for other purposes.
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.
``(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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S8131-8132)
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