I 
108TH CONGRESS 
1ST SESSION 
H. R. 694
To amend the Internal Revenue Code of 1986 to provide an interest-free 
source of capital to cover the costs of installing residential solar energy 
equipment. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 11, 2003
Mr. MCDERMOTT (for himself, Ms. NORTON, Mr. BROWN of Ohio, Mr. 
GEORGE MILLER of California, Ms. CARSON of Indiana, Mr. FROST, Mr. 
OWENS, Ms. JACKSON-LEE of Texas, Mr. SANDERS, Mr. INSLEE, Mr. 
MATSUI, and Mr. LANTOS) introduced the following bill; which was re-
ferred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
an interest-free source of capital to cover the costs of 
installing residential solar energy equipment.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Residential Solar En-
ergy Act of 2003’’.
SEC. 2. CREDIT TO HOLDERS OF RESIDENTIAL SOLAR EN-
ERGY BONDS. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 30B. CREDIT TO HOLDERS OF RESIDENTIAL SOLAR 
ENERGY BONDS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax-
payer who holds a Residential Solar Energy Bond on a 
credit allowance date of such bond which occurs during 
the taxable year, there shall be allowed as a credit against 
the tax imposed by this chapter for such taxable year an 
amount equal to the sum of the credits determined under 
subsection (b) with respect to credit allowance dates dur-
ing such year on which the taxpayer holds such bond. 
‘‘(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 Residential Solar Energy 
Bond is 25 percent of the annual credit determined 
with respect to such bond. 
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any Residential Solar En-
ergy Bond is the product of—
‘‘(A) the applicable credit rate, multiplied 
by 
‘‘(B) the outstanding face amount of the 
bond. 
‘‘(3) APPLICABLE CREDIT RATE.—For purposes 
of paragraph (1), the applicable credit rate with re-
spect to an issue is the rate equal to an average 
market yield (as of the day before the date of 
issuance of the issue) on outstanding long-term cor-
porate debt obligations (determined under regula-
tions prescribed by the Secretary). 
‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued 
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined 
under this subsection with respect to such credit al-
lowance 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 re-
deemed. 
‘‘(c) RESIDENTIAL SOLAR ENERGY BOND.—For pur-
poses of this section—
‘‘(1) IN
GENERAL.—The term ‘Residential 
Solar 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 to make qualified 
solar energy loans, 
‘‘(B) the bond is issued by a qualified util-
ity, 
‘‘(C) the issuer designates such bond for 
purposes of this section, and 
‘‘(D) the term of each bond which is part 
of such issue does not exceed 15 years. 
‘‘(2) QUALIFIED SOLAR ENERGY LOAN.—
‘‘(A) IN
GENERAL.—The term ‘qualified 
solar energy loan’ means any loan without in-
terest to the owner of any qualified residential 
property for the purchase and installation of 
photovoltaic cells on such property but only if—
‘‘(i) the excess of the electricity pro-
duced by such cells over the electricity con-
sumed at the residential property is trans-
mitted from such property for use by oth-
ers,
‘‘(ii) the net electricity produced or 
consumed at the residential property is me-
tered, 
‘‘(iii) the owner receives a credit 
against future electricity consumption for 
the excess described in clause (i), 
‘‘(iv) the principal amount of the loan 
is payable in equal installments over 15 
years (or, if shorter, the period specified by 
the utility), and 
‘‘(v) the loan is made under a pro-
gram of the utility that—
‘‘(I) specifies an approved list of 
photovoltaic cell equipment and in-
stallers, and 
‘‘(II) contains other safeguards 
to ensure that the loan is used for its 
intended purpose. 
‘‘(B) 
QUALIFIED
UTILITY.—The 
term 
‘qualified utility’ means any entity (including a 
governmental unit) engaged in the sale of elec-
trical energy at retail in the United States 
‘‘(C) 
QUALIFIED
RESIDENTIAL
PROP-
ERTY.—The term ‘qualified residential prop-