erty’ means any single-family or multi-family 
residence. 
‘‘(d) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.—
‘‘(1) IN
GENERAL.—The maximum aggregate 
face amount of bonds which may be designated 
under subsection (c)(1) by any qualified utility shall 
not exceed the limitation amount allocated to such 
utility under paragraph (3). 
‘‘(2) NATIONAL
LIMITATION
ON
AMOUNT
OF 
BONDS DESIGNATED.—There is a national Residen-
tial 
Solar 
Energy 
Bond 
limitation 
of 
$24,000,000,000. 
‘‘(3) ALLOCATION OF LIMITATION AMONG UTIL-
ITIES.—
‘‘(A) IN GENERAL.—The national Residen-
tial Solar Energy Bond limitation shall be allo-
cated by the Secretary of Energy during 2004, 
2005, 2006, and 2007 to qualified utilities. In 
making such allocations, such Secretary shall 
give priorities to qualified utilities which provide 
subsidies (other than through the use of such 
Bonds) for the purchase and installation by res-
idential customers of photovoltaic cells on their 
residences.
‘‘(B) UNUSED ALLOCATIONS.—Any alloca-
tion made to a qualified utility which is not 
used within 6 months after the date of the allo-
cation may be reallocated by the Secretary of 
Energy. 
‘‘(e) LIMITATION BASED ON AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of—
‘‘(A) the sum of the regular tax liability 
(as defined in section 26(b)) plus the tax im-
posed by section 55, over 
‘‘(B) the sum of the credits allowable 
under part IV of subchapter A (other than sub-
part C thereof, relating to refundable credits). 
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 
credit allowable under subsection (a) exceeds the 
limitation imposed by paragraph (1) for such taxable 
year, such excess shall be carried to the succeeding 
taxable year and added to the credit allowable under 
subsection (a) for such taxable year. 
‘‘(f) OTHER DEFINITIONS.—For purposes of this sec-
tion— 
‘‘(1) CREDIT
ALLOWANCE
DATE.—The term 
‘credit allowance date’ means—
‘‘(A) March 15, 
‘‘(B) June 15, 
‘‘(C) September 15, and 
‘‘(D) December 15. 
Such term includes the last day on which the bond 
is outstanding. 
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation. 
‘‘(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 (e)) and the amount so included shall be treat-
ed as interest income. 
‘‘(h) SPECIAL RULES RELATING TO ARBITRAGE.—
‘‘(1) IN GENERAL.—A bond shall not be treated 
as failing to meet the requirements of subsection 
(c)(1) solely by reason of the fact that the proceeds 
of the issue of which such bond is a part are in-
vested for a reasonable temporary period until such 
proceeds are used in making qualified solar energy 
loans. 
‘‘(2) EARNINGS ON PROCEEDS.—Any earnings 
on proceeds during the temporary period shall be 
treated as proceeds of the issue for purposes of ap-
plying subsection (c)(1) and paragraph (1) of this 
subsection. 
‘‘(3) TREATMENT
OF
LOAN
REPAYMENTS.—
Principal repayments received during any calendar 
quarter shall not be treated as failing to meet the 
requirements of subsection (c)(1) if, before the end 
of the following calendar quarter, the amount of 
such repayments is used to make qualified solar en-
ergy loans, to redeem residential solar energy bonds, 
or to acquire zero interest State and local govern-
ment series bonds. The term of a loan made from 
such repayments may extend beyond the last day 
that any bond issued as part of the issue financing 
the loan being repaid is outstanding; and, if so, the 
requirement that a loan be without interest shall not 
apply to the period after such last day. 
‘‘(i) OTHER SPECIAL RULES.—
‘‘(1) BONDS
HELD
BY
REGULATED
INVEST-
MENT COMPANIES.—If any Residential Solar Energy 
Bond is held by a regulated investment company, 
the credit determined under subsection (a) shall be 
allowed to shareholders of such company under pro-
cedures prescribed by the Secretary. 
‘‘(2) CREDITS MAY BE STRIPPED.—Under regu-
lations prescribed by the Secretary—
‘‘(A) IN GENERAL.—There may be a sepa-
ration (including at issuance) of the ownership 
of a Residential Solar Energy Bond and the en-
titlement to the credit under this section with 
respect to such bond. In case of any such sepa-
ration, the credit under this section shall be al-
lowed to the person who on the credit allowance 
date holds the instrument evidencing the enti-
tlement to the credit and not to the holder of 
the bond. 
‘‘(B) CERTAIN RULES TO APPLY.—In the 
case of a separation described in subparagraph 
(A), the rules of section 1286 shall apply to the 
Residential Solar Energy Bond as if it were a 
stripped bond and to the credit under this sec-
tion as if it were a stripped coupon. 
‘‘(3) TREATMENT FOR ESTIMATED TAX PUR-
POSES.—Solely for purposes of sections 6654 and 
6655, the credit allowed by this section to a tax-
payer by reason of holding a Residential Solar En-
ergy Bond on a credit allowance date shall be treat-
ed as if it were a payment of estimated tax made by 
the taxpayer on such date. 
‘‘(4) CREDIT MAY BE TRANSFERRED.—Nothing 
in any law or rule of law shall be construed to limit
the transferability of the credit allowed by this sec-
tion through sale and repurchase agreements. 
‘‘(5) REPORTING.—Issuers of Residential Solar 
Energy Bonds shall submit reports similar to the re-
ports required under section 149(e). 
‘‘(j) RECAPTURE OF PORTION OF CREDIT WHERE 
CESSATION OF QUALIFIED USE.—
‘‘(1) IN GENERAL.—If any bond which when 
issued purported to be a Residential Solar Energy 
Bond ceases to meet the requirements of subsection 
(c), the issuer shall pay to the United States (at the 
time required by the Secretary) an amount equal to 
the aggregate of the credits allowable under this sec-
tion (determined without regard to subsection (e)) 
for taxable years ending during the calendar year in 
which such cessation occurs and the 2 preceding cal-
endar years. 
‘‘(2) FAILURE TO PAY.—If the issuer fails to 
timely pay the amount required by paragraph (1) 
with respect to any issue, the tax imposed by this 
chapter on each holder of any bond which is part of 
such issue shall be increased (for the taxable year of 
the holder in which such cessation occurs) by the ag-
gregate decrease in the credits allowed under this 
section to such holder for taxable years beginning in
such 3 calendar years which would have resulted 
solely from denying any credit under this section 
with respect to such issue for such taxable years. 
‘‘(3) SPECIAL RULES.—
‘‘(A) TAX
BENEFIT
RULE.—The tax for 
the taxable year shall be increased under para-
graph (2) only with respect to credits allowed 
by reason of this section which were used to re-
duce tax liability. In the case of credits not so 
used to reduce tax liability, the carryforwards 
and carrybacks under section 39 shall be appro-
priately adjusted. 
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under paragraph (2) shall not be 
treated as a tax imposed by this chapter for 
purposes of determining—
‘‘(i) the amount of any credit allow-
able under this part, or 
‘‘(ii) the amount of the tax imposed 
by section 55.’’
(b) REPORTING.—Subsection (d) of section 6049 of 
such Code (relating to returns regarding payments of in-
terest) is amended by adding at the end the following new 
paragraph:
‘‘(8) REPORTING OF CREDIT ON RESIDENTIAL 
SOLAR ENERGY BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts 
includible in gross income under section 30B(g) 
and such amounts shall be treated as paid on 
the credit allowance date (as defined in section 
30B(f)(1)). 
‘‘(B) 
REPORTING
TO
CORPORATIONS, 
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in 
subparagraph (A) of this paragraph, subsection 
(b)(4) of this section shall be applied without 
regard to subparagraphs (A), (H), (I), (J), (K), 
and (L)(i). 
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are 
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations 
which require more frequent or more detailed 
reporting.’’
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subpart B of part IV of subchapter A of chapter 
1 of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 30B. Credit to holders of Residential Solar Energy Bonds.’’
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after Decem-
ber 31, 2003. 
(e) GUIDELINES FOR APPLICATIONS.—Not later than 
January 1, 2004, guidelines specifying the criteria to be 
used in approving applications under section 30B(d)(3) of 
the Internal Revenue Code of 1986 (as added by this Act) 
shall be developed and published by the Secretary of En-
ergy in the Federal Register.
Æ