[Congressional Record Volume 146, Number 99 (Wednesday, July 26, 2000)]
[Senate]
[Pages S7687-S7688]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Rockefeller, Mr. Jeffords, and 
        Mrs. Lincoln):
  S. 2939. A bill to amend the Internal Revenue Code of 1986 to provide 
a credit against tax for energy efficient appliances; to the Committee 
on Finance.


             the resource efficient appliance incentive act

  Mr. GRASSLEY. Mr. President I rise today to introduce an extremely 
timely piece of legislation in light of the current energy crisis 
facing our nation. This legislation, entitled ``The Resource Efficient 
Appliance Incentive Act,'' will provide a valuable incentive to 
accelerate and expand the production and market penetration of ultra 
energy-efficient appliances. Senator Rockefeller is joining me in this 
bipartisan effort, along with Senators Jeffords and Lincoln.
  Earlier this year, the appliance industry, the Department of Energy, 
and the nation's leading energy-efficiency and environmental 
organizations came together and agreed upon significantly higher energy 
efficiency standards for clothes washers to accompany the new energy 
efficiency standards for refrigerators that go into effect in July 
2001, as well as the new criteria for achieving the voluntary ``Energy 
Star'' designation. This agreement is significant considering the fact 
that clothes washers and dryers, together with refrigerators, account 
for approximately 15 percent of all household energy consumed in the 
United States.
  This legislation will provide a tax credit to assist in the 
development of super energy-efficient washing machines and 
refrigerators, and creates the incentives necessary to increase the 
production and sale of these appliances in the short term. 
Manufacturers would be eligible to claim a credit of either $50 or 
$100, depending on efficiency level, for each super energy-efficient 
washing machine produced between 2001 and 2006. Likewise, manufacturers 
would be eligible to claim a credit of $50 or $100, depending on 
efficiency level, for each super energy-efficient refrigerator produced 
between 2001 and 2006. It is estimated that this tax credit will 
increase the production and purchase of super energy-efficient washers 
by almost 200 percent, and the purchase of super energy-efficient 
refrigerators by over 285 percent.
  Equally important is the long-term environmental benefits of the 
expanded use of these appliances. Over the life of the appliances, over 
200 trillion Btus of energy will be saved. This is the equivalent of 
taking 2.3 million cars off the road or closing 6 coal-fired power 
plants for a year. In addition, the clothes washers will reduce the 
amount of water necessary to wash clothes by 870 billion gallons, an 
amount equal to the needs of every household in the city the size of 
Phoenix, Arizona for two years. Most importantly, the benefits to 
consumers over the life of the washers and refrigerators from 
operational savings is estimated at nearly $1 billion.
  In my home state of Iowa, this legislation would result in the 
production of

[[Page S7688]]

1.5 million supper energy-efficient washers and refrigerators over the 
next six years, requiring over 100 new production jobs. I also expect 
Iowans to save $11 million in operational costs over the life span of 
the appliances, and 9 billion gallons of water--enough to supply 
drinking water for the entire state for 30 years.
  Lastly, I believe the total revenue loss of this credit compares 
extremely favorably to the estimated benefits of almost $1 billion to 
consumers over the life of the super energy-efficient clothes washers 
and refrigerators from operational savings.
  Mr. ROCKEFELLER. Mr. President, I am pleased to join my colleagues, 
Senators Grassley, Jeffords, and Lincoln, in the introduction of 
legislation to establish a tax credit incentive program for the 
production of super energy-efficient appliances. This creative proposal 
will result in substantial environmental benefits for the nation at a 
very small cost to the government.
  Our bill would provide for either a $50 or $100 tax credit for the 
production and sale of energy efficient washing machines and 
refrigerators. Today, these two appliances account for approximately 15 
percent of the energy consumed in a typical home, which amounts to 
about $21 billion in energy expenditures annually. Although most 
Americans may not realize it, home appliances offer the potential for 
major energy savings across the nation.
  Recently, several energy efficiency and environmental organizations 
joined with the appliance industry in endorsing considerably tougher 
energy-efficiency standards for washing machines. These proposed 
standards are now under active consideration by the Department of 
Energy for incorporation in new regulations. The new standards will 
result in tremendous energy-efficiency improvements that will have very 
positive environmental consequences over time. But there is a cost to 
these new minimum standards and, as we often find, reluctance on the 
part of industry and the public to incur the additional costs necessary 
to achieve higher energy efficiencies. Home appliances can be made more 
efficient but it would mean greater costs to consumers. I believe there 
is a necessary balance between the objective of obtaining higher energy 
efficiencies that reduce air emissions and the higher product costs 
that result. This is as true with respect to the purchase of appliances 
as it is with respect to the automobile, electric power, and other 
markets. I also recognize that there are understandable limits to the 
costs that society is willing to bear through regulation to obtain 
higher energy savings that result in environmental benefits.
  However, that is not necessarily the limit at which point energy 
savings can be achieved. While many consumers may not be willing to pay 
extra for more energy-efficient appliances, I believe they can be 
encouraged to do so through incentive programs. The legislation we are 
proposing today would do just that by giving manufacturers either a $50 
or $100 tax credit for every super energy-efficient appliance produced 
prior to 2007. The idea is to give manufacturers the means by which to 
create the most appropriate incentives to get consumers to purchase 
washing machines and refrigerators that are the most energy-efficient. 
Through these tax credits we will accelerate the production and market 
penetration of leading-edge appliance technologies that create 
significant environmental benefits.
  The expanded use of super energy-efficient appliances will have 
significant long-term environmental benefits. It is estimated that as a 
result of this legislation over 200 trillion Btus of energy will be 
saved over the life of the appliances manufactured with these credits. 
This is the equivalent of taking 2.3 million cars off the road or 
closing down six coal-fired power plants for a year. Energy savings of 
this magnitude pay significant environmental dividends. For example, it 
is projected that with these energy savings carbon emissions, the 
critical element in greenhouse gas emissions, will be reduced by over 
3.1 million metric tons. In addition, the super energy-efficient 
washing machines will reduce the amount of water necessary to wash 
clothes by 870 billion gallons, or approximately the amount of water 
necessary to meet the needs of every household in a state the size of 
West Virginia for nearly 2 years.

  Vice President Gore recently recommended a similar program of tax 
incentives for the purchase of home appliances as part of his energy 
savings initiatives--and I congratulate him for his leadership in this 
regard. I am very glad the Vice President is considering ways to 
balance how we produce energy savings and believe it is important that 
we discuss this balance of interests as part of our national dialogue 
to improve our energy efficiency. I am also extremely pleased this 
legislation is strongly supported by leading environmental 
organizations including the Natural Resources Defense Council, the 
Alliance to Save Energy, and the American Council for an Energy 
Efficient Economy.
  The use of energy-efficient appliances is an important milestone on 
the road to a cleaner, lower-cost energy future. This common-sense 
initiative follows on the heels of other important bipartisan 
legislation that I am proud to have sponsored or cosponsored during 
this Congress to improve our nation's energy independence and the 
environment. During the first session of the 106th Congress, I was 
joined by Senators Hatch, Crapo, and Bryan in introducing the 
Alternative Fuel Promotion Act in an effort to reduce greenhouse gas 
emissions and lower our consumption of imported oil. Earlier this year 
I joined Senators Jeffords and Hatch on the Alternative Fuels Tax 
Incentives Act, which would accomplish many of the same goals.
  I am especially proud to have joined with Senator Bingaman and six of 
my Democratic colleagues on the Energy Security Tax and Policy Act, a 
comprehensive energy policy bill that looks to improve our nation's 
energy independence while protecting the environment. Finally, it was 
my pleasure last week to join with Environment and Public Works 
Chairman Bob Smith and the Ranking Democratic Member Senator Baucus on 
the Energy Efficient Building Incentives Act, which promotes the 
construction of buildings 30-50 percent more efficient than today's 
standard. As building energy use accounts for 35 percent of the air 
pollution emissions nationwide and $250 billion per year in energy 
bills, this legislation could produce a dramatic benefit for our 
environment, and this country's long-term energy needs.
                                 ______