[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1022 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1022

   To amend the Internal Revenue Code of 1986 to allow for an energy 
                      efficient appliance credit.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 12, 2005

Mr. Smith (for himself, Mrs. Lincoln, and Mr. Grassley) 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 for an energy 
                      efficient appliance credit.

    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 ``Resource Efficient Appliance 
Incentives Act of 2005.''.

SEC. 2. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by adding at the end the following new section:

``SEC. 45J. ENERGY EFFICIENT APPLIANCE CREDIT.

    ``(a) General Rule.--
            ``(1) In general.--For purposes of section 38, the energy 
        efficient appliance credit determined under this section for 
        any taxable year is an amount equal to the sum of the credit 
        amounts determined under paragraph (2) for each type of 
        qualified energy efficient appliance produced by the taxpayer 
        during the calendar year ending with or within the taxable 
        year.
            ``(2) Credit amounts.--The credit amount determined for any 
        type of qualified energy efficient appliance is--
                    ``(A) the applicable amount determined under 
                subsection (b) with respect to such type, multiplied by
                    ``(B) the eligible production for such type.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a)--
                    ``(A) Dishwashers.--The applicable amount is the 
                energy savings amount in the case of a dishwasher 
                which--
                            ``(i) is manufactured in calendar year 2006 
                        or 2007, and
                            ``(ii) meets the requirements of the Energy 
                        Star program which are in effect for 
                        dishwashers in 2007.
                    ``(B) Clothes washers.--The applicable amount is--
                            ``(i) $50, in the case of a clothes washer 
                        which--
                                    ``(I) is manufactured in calendar 
                                year 2005, and
                                    ``(II) has an MEF of at least 1.42,
                            ``(ii) $100, in the case of a clothes 
                        washer which--
                                    ``(I) is manufactured in calendar 
                                year 2005, 2006, or 2007, and
                                    ``(II) meets the requirements of 
                                the Energy Star program which are in 
                                effect for clothes washers in 2007, and
                            ``(iii) the energy and water savings 
                        amount, in the case of a clothes washer which--
                                    ``(I) is manufactured in calendar 
                                year 2008, 2009, or 2010, and
                                    ``(II) meets the requirements of 
                                the Energy Star program which are in 
                                effect for clothes washers in 2010.
                    ``(C) Refrigerators.--
                            ``(i) 15 percent savings.--The applicable 
                        amount is $75 in the case of a refrigerator 
                        which--
                                    ``(I) is manufactured in calendar 
                                year 2005 or 2006, and
                                    ``(II) consumes at least 15 percent 
                                less kilowatt hours per year than the 
                                2001 energy conservation standard.
                            ``(ii) 20 percent savings.--In the case of 
                        a refrigerator which consumes at least 20 
                        percent less kilowatt hours per year than the 
                        2001 energy conservation standards, the 
                        applicable amount is--
                                    ``(I) $125 for a refrigerator which 
                                is manufactured in calendar year 2005, 
                                2006, or 2007, and
                                    ``(II) $100 for a refrigerator 
                                which is manufactured in calendar year 
                                2008.
                            ``(iii) 25 percent savings.--In the case of 
                        a refrigerator which consumes at least 25 
                        percent less kilowatt hours per year than the 
                        2001 energy conservation standards, the 
                        applicable amount is--
                                    ``(I) $175 for a refrigerator which 
                                is manufactured in calendar year 2005, 
                                2006, or 2007, and
                                    ``(II) $150 for a refrigerator 
                                which is manufactured in calendar year 
                                2008, 2009, or 2010.
            ``(2) Energy savings amount.--For purposes of paragraph 
        (1)(A)--
                    ``(A) In general.--The energy savings amount is the 
                lesser of--
                            ``(i) the product of--
                                    ``(I) $3, and
                                    ``(II) 100 multiplied by the energy 
                                savings percentage, or
                            ``(ii) $100.
                    ``(B) Energy savings percentage.--For purposes of 
                subparagraph (A), the energy savings percentage is the 
                ratio of--
                            ``(i) the EF required by the Energy Star 
                        program for dishwashers in 2007 minus the EF 
                        required by the Energy Star program for 
                        dishwashers in 2005, to
                            ``(ii) the EF required by the Energy Star 
                        program for dishwashers in 2007.
            ``(3) Energy and water savings amount.--For purposes of 
        paragraph (1)(B)(iii)--
                    ``(A) In general.--The energy and water savings 
                amount is the lesser of--
                            ``(i) the product of--
                                    ``(I) $10, and
                                    ``(II) 100 multiplied by the energy 
                                and water savings percentage, or
                            ``(ii) $200.
                    ``(B) Energy and water savings percentage.--For 
                purposes of subparagraph (A), the energy and water 
                savings percentage is the average of the MEF savings 
                percentage and the WF savings percentage.
                    ``(C) MEF savings percentage.--For purposes of this 
                subparagraph, the MEF savings percentage is the ratio 
                of--
                            ``(i) the MEF required by the Energy Star 
                        program for clothes washers in 2010 minus the 
                        MEF required by the Energy Star program for 
                        clothes washers in 2007, to
                            ``(ii) the MEF required by the Energy Star 
                        program for clothes washers in 2010.
                    ``(D) WF savings percentage.--For purposes of this 
                subparagraph, the WF savings percentage is the ratio 
                of--
                            ``(i) the WF required by the Energy Star 
                        program for clothes washers in 2010 minus the 
                        WF required by the Energy Star program for 
                        clothes washers in 2007, to
                            ``(ii) the WF required by the Energy Star 
                        program for clothes washers in 2010.
    ``(c) Eligible Production.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), the eligible production in a calendar year with respect to 
        each type of energy efficient appliance is the excess of--
                    ``(A) the number of appliances of such type which 
                are produced by the taxpayer in the United States 
                during such calendar year, over
                    ``(B) the average number of appliances of such type 
                which were produced by the taxpayer (or any 
                predecessor) in the United States during the preceding 
                3-calendar year period.
            ``(2) Special rule for refrigerators.--The eligible 
        production in a calendar year with respect to each type of 
        refrigerator described in subsection (b)(1)(C) is the excess 
        of--
                    ``(A) the number of appliances of such type which 
                are produced by the taxpayer in the United States 
                during such calendar year, over
                    ``(B) 110 percent of the average number of 
                appliances of such type which were produced by the 
                taxpayer (or any predecessor) in the United States 
                during the preceding 3-calendar year period.
            ``(3) Special rule for 2005 production.--For purposes of 
        determining eligible production for calendar year 2005--
                    ``(A) only production after the date of enactment 
                of this section shall be taken into account under 
                paragraphs (1)(A) and (2)(A), and
                    ``(B) the amount taken into account under 
                paragraphs (1)(B) and (2)(B) shall be an amount which 
                bears the same ratio to the amount which would (but for 
                this paragraph) be taken into account under such 
                paragraph as--
                            ``(i) the number of days in calendar year 
                        2005 after the date of enactment of this 
                        section, bears to
                            ``(ii) 365.
    ``(d) Types of Energy Efficient Appliance.--For purposes of this 
section, the types of energy efficient appliances are--
            ``(1) dishwashers described in subsection (b)(1)(A),
            ``(2) clothes washers described in subsection (b)(1)(B)(i),
            ``(3) clothes washers described in subsection 
        (b)(1)(B)(ii),
            ``(4) clothes washers described in subsection 
        (b)(1)(B)(iii),
            ``(5) refrigerators described in subsection (b)(1)(C)(i),
            ``(6) refrigerators described in subsection 
        (b)(1)(C)(ii)(I),
            ``(7) refrigerators described in subsection 
        (b)(1)(C)(ii)(II),
            ``(8) refrigerators described in subsection 
        (b)(1)(C)(iii)(I), and
            ``(9) refrigerators described in subsection 
        (b)(1)(C)(iii)(II).
    ``(e) Limitations.--
            ``(1) Aggregate credit amount allowed.--The aggregate 
        amount of credit allowed under subsection (a) with respect to a 
        taxpayer for any taxable year shall not exceed $75,000,000 
        reduced by the amount of the credit allowed under subsection 
        (a) to the taxpayer (or any predecessor) for all prior taxable 
        years.
            ``(2) Amount allowed for certain appliances.--
                    ``(A) In general.--In the case of appliances 
                described in subparagraph (C), the aggregate amount of 
                the credit allowed under subsection (a) with respect to 
                a taxpayer for any taxable year shall not exceed 
                $20,000,000 reduced by the amount of the credit allowed 
                under subsection (a) to the taxpayer (or any 
                predecessor) for all prior taxable years with respect 
                to such appliances.
                    ``(B) Election to increase allowable credit.--In 
                the case of any taxpayer who makes an election under 
                this subparagraph--
                            ``(i) subparagraph (A) shall be applied by 
                        substituting `$25,000,000' for `$20,000,000', 
                        and
                            ``(ii) the aggregate amount of the credit 
                        allowed under subsection (a) with respect to 
                        such taxpayer for any taxable year for 
                        appliances described in subparagraph (C) and 
                        the additional appliances described in 
                        subparagraph (D) shall not exceed $50,000,000 
                        reduced by the amount of the credit allowed 
                        under subsection (a) to the taxpayer (or any 
                        predecessor) for all prior taxable years with 
                        respect to such appliances.
                    ``(C) Appliances described.--The appliances 
                described in this subparagraph are--
                            ``(i) clothes washers described in 
                        subsection (b)(1)(B)(i), and
                            ``(ii) refrigerators described in 
                        subsection (b)(1)(C)(i).
                    ``(D) Additional appliances.--The additional 
                appliances described in this subparagraph are--
                            ``(i) refrigerators described in subsection 
                        (b)(1)(C)(ii)(I), and
                            ``(ii) refrigerators described in 
                        subsection (b)(1)(C)(ii)(II).
            ``(3) Limitation based on gross receipts.--The credit 
        allowed under subsection (a) with respect to a taxpayer for the 
        taxable year shall not exceed an amount equal to 2 percent of 
        the average annual gross receipts of the taxpayer for the 3 
        taxable years preceding the taxable year in which the credit is 
        determined.
            ``(4) Gross receipts.--For purposes of this subsection, the 
        rules of paragraphs (2) and (3) of section 448(c) shall apply.
    ``(f) Definitions.--For purposes of this section--
            ``(1) Qualified energy efficient appliance.--The term 
        `qualified energy efficient appliance' means--
                    ``(A) any dishwasher described in subsection 
                (b)(1)(A),
                    ``(B) any clothes washer described in subsection 
                (b)(1)(B), and
                    ``(C) any refrigerator described in subsection 
                (b)(1)(C).
            ``(2) Dishwasher.--The term `dishwasher' means a 
        residential dishwasher subject to the energy conservation 
        standards established by the Department of Energy.
            ``(3) Clothes washer.--The term `clothes washer' means a 
        residential model clothes washer, including a residential style 
        coin operated washer.
            ``(4) Refrigerator.--The term `refrigerator' means a 
        residential model automatic defrost refrigerator-freezer which 
        has an internal volume of at least 16.5 cubic feet.
            ``(5) MEF.--The term `MEF' means the modified energy factor 
        established by the Department of Energy for compliance with the 
        Federal energy conservation standards.
            ``(6) EF.--The term `EF' means the energy factor 
        established by the Department of Energy for compliance with the 
        Federal energy conservation standards.
            ``(7) WF.--The term `WF' means Water Factor (as determined 
        by the Secretary of Energy).
            ``(8) Produced.--The term `produced' includes manufactured.
            ``(9) 2001 energy conservation standard.--The term `2001 
        energy conservation standard' means the energy conservation 
        standards promulgated by the Department of Energy and effective 
        July 1, 2001.
    ``(g) Special Rules.--For purposes of this section--
            ``(1) In general.--Rules similar to the rules of 
        subsections (c), (d), and (e) of section 52 shall apply.
            ``(2) Controlled group.--
                    ``(A) In general.--All persons treated as a single 
                employer under subsection (a) or (b) of section 52 or 
                subsection (m) or (o) of section 414 shall be treated 
                as a single producer.
                    ``(B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 to this section, section 1563 
                shall be applied without regard to subsection (b)(2)(C) 
                thereof.
            ``(3) Verification.--No amount shall be allowed as a credit 
        under subsection (a) with respect to which the taxpayer has not 
        submitted such information or certification as the Secretary, 
        in consultation with the Secretary of Energy, determines 
        necessary.''.
    (b) Conforming Amendment.--Section 38(b) of the Internal Revenue 
Code of 1986 (relating to general business credit) is amended by 
striking ``plus'' at the end of paragraph (18), by striking the period 
at the end of paragraph (19) and inserting ``, plus'', and by adding at 
the end the following new paragraph:
            ``(20) the energy efficient appliance credit determined 
        under section 45J(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

        ``Sec. 45J. Energy efficient appliance credit''.
    (d) Effective Date.--The amendments made by this section shall 
apply to appliances produced after the date of the enactment of this 
Act, in taxable years ending after such date.
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