[Congressional Record Volume 149, Number 25 (Tuesday, February 11, 2003)]
[Senate]
[Pages S2213-S2219]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. LINCOLN (for herself, Mr. Allard, Mr. Grassley, Mr. 
        Harkin, Ms. Stabenow, Mr. Hagel, Mr. Levin, and Mr. DeWine):
  S. 361. A bill to amend the Internal Revenue Code of 1986 to allow 
for an energy efficient appliance credit; to the Committee on Finance.
  Mrs. LINCOLN. Mr. President, I rise today to introduce my package of 
alternative energy and energy efficiency bills. These bills all work in 
concert toward a single goal--promoting the use of cleaner, renewable 
energy for this nation.
  For several decades, the U.S. has relied on foreign sources of energy 
supply. Worldwide demand for energy has continued to increase, while 
our domestic resource base has decreased, leaving the country 
vulnerable in the event of foreign supply disruptions. This year, the 
U.S. will import 60 percent of its crude oil needs this year. The 
events of September 11th have focused attention on the need to develop 
a new energy policy that focuses on creating new domestic sources. Our 
Nation needs to explore and develop all possible domestic options as 
resources for our energy supply. To reduce our dependence on foreign 
imports, it is imperative that policy makers create incentives to 
promote technologies that can produce quality alternative products. Our 
national security demands that the government undertake programs which 
assure the implementation of real alternative fuel technologies.
  It is in the best security interests of our Nation to reduce our 
reliance on foreign energy suppliers. We can no longer afford to be 
subject to the whims and manipulations of foreign cartels like OPEC. 
Added to these threats posed by OPEC and the instability of the Middle 
East are the even more sinister possibilities that we face in other 
parts of the world. Developments in many regions of the world where 
much of today's energy supplies are obtained--West Africa, the Caspian 
Sea, Indonesia, Venezuela, and so forth--clearly serve notice that our 
Nation cannot continue to depend on these areas for our future energy 
needs. These events make it more pressing than ever that we proceed 
forward with the development of our own domestic alternative energy 
resources.
  In the last Congress, both the House and the Senate passed 
comprehensive energy bills that would have brought us closer to these 
goals. In the Senate bill, we were able to strike a delicate balance 
between using our resources for energy and preserving our environment 
for future generations. I was pleased with the Senate version of the 
Energy Policy Act of 2002, and was disappointed that conferees were 
unable to iron out differences with the House of Representatives before 
adjournment. We must make energy independence a national priority 
because it is now essential to our homeland security.
  Looking ahead, I will continue my work to build a cohesive national 
energy policy that ultimately reduces our dependence on foreign oil. To 
accomplish this goal, we must provide access to more resources, 
transmit these resources to the consumer, and encourage industrial and 
individual consumers to use more renewable energy sources. These 
important steps will lead to greater reliability and lower energy costs 
for consumers.
  We should all work again in the 108th Congress to adopt a 
comprehensive energy plan that sets America on the road to energy 
independence and assures consumers of a reliable and affordable energy 
supply.
  The legislation I am introducing today will encourage production of 
biodiesel and its use in this country; to promote the manufacture of 
energy efficient home appliances; to encourage the use of fuels 
produced from animal and agricultural wastes; to encourage the use of 
our waste sources such as landfill gas and municipal solid waste to 
produce energy; and to spur the investment in delivering fuels to rural 
America. These incentives for production and use of clean and renewable 
fuels can help bridge the investment cost gap between production of 
petroleum and renewable energy.
  Each of these bills were either included or debated in the Senate 
during last year's Senate consideration and passage of the energy bill. 
I look forward to their inclusion in the debate and inclusion in any 
energy bill to be passed by the Senate during the 108th Congress.
  The first bill I am introducing today is the Biodiesel Promotion Act 
of 2003. I am pleased to be joined in introducing this bill by Senators 
Grassley, Hagel, Dayton, Harkin, Durbin, Coleman, and Johnson. This 
legislation will provide tax incentives for the production of biodiesel 
from agricultural oils, recycled oils, and animal fats and will ensure 
that biodiesel becomes a central component of this nation's automobile 
fuel market.
  This legislation is identical to language authored by myself and 
Senator Grassley included in the last Congress's Energy Bill. It is 
intended to be a starting point for our debate and discussion as we 
draft an energy bill for consideration in this Congress.
  This legislation will provide a partial exemption from the diesel 
excise tax for diesel blended with biodiesel. Specifically, the bill 
provides a one-cent reduction for every percent of biodiesel from 
virgin agricultural oils blended

[[Page S2214]]

with diesel up to 20 percent. The legislation will also provide a half-
cent reduction for every percent of biodiesel from recycled 
agricultural oils or animal fats.
  Also importantly, in the year that we are to reauthorize the 
Transportation Enhancement Act of 1996, the bill provides for 
reimbursing the Highway Trust Fund from the USDA Commodity Credit 
Corporation, CCC. This procedure will protect the Trust Fund from lost 
revenues due to the biodiesel incentive while providing a much-needed 
boost to our nation's biodiesel industry. The cost to the CCC would be 
offset at least initially by the savings under the marketing loan 
program.
  Biodiesel, which can be made from just about any agricultural oil 
including oils from soybeans, cottonseed, or rice, is completely 
renewable, contains no petroleum, and can be easily blended with 
petroleum diesel. A biodiesel-diesel blend typically contains up to 20 
percent renewable content. It can be added directly into the gas tank 
of a compression-ignition, diesel engine vehicle with no major 
modifications. Biodiesel is completely biodegradable and non-toxic, 
contains no sulfur, and it is the first and only alternative fuel to 
meet EPA's Tier I and II health effects testing standards. Biodiesel 
also stands ready to help us reach the EPA's new rule to reduce the 
sulfur content of highway diesel fuel by over 95 percent.
  Even after years of research and market development, biodiesel is not 
yet cost-competitive with petroleum diesel. In order to be so, market 
support and tax incentives are needed. I believe the provisions 
provided in this bill will help in leveling the field for biodiesel 
blends and help jumpstart this new industry.
  The time is right for this investment. It is right for our rural 
economy, for our environment, and for our national energy security and 
I encourage my colleagues to join us in supporting the Biodiesel 
Promotion Act of 2003.
  The second component of my package is the EPACT Alternative Fuel 
Flexibility Act of 2003. I am pleased to be joined today by Senators 
Bond and Talent in introducing this legislation.
  The purpose of this legislation is to place biodiesel fuel on equal 
footing with every other alternative motor fuel used in this nation.
  The Energy Policy Act of 1992, EPACT, set a national objective to 
shift the focus of national energy demand away from imported oil toward 
renewable and domestically produced energy sources. When EPACT was 
passed in 1992, it recognized ethanol, natural gas, propane, 
electricity, and methanol as alternative fuels. The original list of 
alternative fuels did not include biodiesel because the technology had 
not been fully developed.
  EPACT set a goal to replace 10 percent of petroleum-based fuels by 
2000 and 30 percent by the year 2010. However, a GAO report issued in 
July of 2001 noted that ``limited progress has been made in increasing 
the numbers of alternative fuel vehicles, AFV, in the national vehicle 
fleet and the use of alternative fuels'' as compared to conventional 
vehicles and fuels.
  We did not meet the original EPACT goals of replacing 10 percent of 
petroleum-based fuels by 2000. Today we are not on track to meet the 
goal of 30 percent by the year 2010. In fact, we haven't even come 
close, and that's partly a result of not allowing all alternative fuels 
to be used to meet the EPACT alternative fuel mandates.
  This legislation will significantly increase the use of alternative 
fuels by allowing EPACT covered fleets to meet up to 100 percent of the 
EPACT purchase requirements through the use of biodiesel. Currently, 
covered fleets can only meet up to 50 percent of purchase requirements 
with biodiesel.
  By offering an additional option for the use of alternative fuels, we 
will widen the possibilities for these fuels to be made more widely 
available. Fleets will continue to have the option to choose the 
complying vehicles and fuels that best meet their needs. This 
legislation is not expected to affect fleets that are currently using 
ethanol or natural gas. But this legislation does provide a further 
option for alternative fuel vehicles. Furthermore, it does not directly 
displace natural gas or ethanol sales, since biodiesel is used in 
medium- and heavy-duty trucks rather than light-duty vehicles.
  By allowing fleets to meet 100 percent of their AFV requirement by 
using biodiesel, we'll take a positive step toward moving this country 
away from dependence on petroleum-based motor fuels and toward 
alternative motor fuels. I urge all of my colleagues to support this 
legislation.
  The third bill I introduce today as part of my energy independence 
package is the Animal and Agricultural Waste Renewable Energy 
Production Act of 2003. I am pleased to be joined today by Senators 
Hagel, Bond, and Kerry in introducing this legislation.
  This legislation would provide a credit under Section 29 of the tax 
code for the production of fuels from animal and agricultural wastes.
  Thanks to new technological developments, we can now produce 
significant quantities of alternative fuels from agricultural and 
animal wastes in an environmentally friendly manner. Production 
incentives are needed to assure implementation and commercialization of 
this new generation of technology.
  Section 29 was originally enacted to provide an incentive to produce 
alternative and hard-to-reach fuels that could compete with fossil 
fuels and hopefully reduce the nation's dependence on foreign oil. As 
originally enacted, a number of ``non-conventional fuels'' were 
eligible for the credit, including the following: oil from shale; oil 
from tar sands; natural gas from geo-pressured brine, coal seams, 
Devonian shale, or tight sands; liquid, gaseous or solid synthetic fuel 
from coal, including coke and coke by-products; gas from biomass, 
including wood; steam from solid agricultural by-products; and 
processed solid wood fuels.
  Other biomass by-products, such as agricultural and animal oils and 
solids, also should qualify the same as liquid or gaseous synthetic 
fuels derived from coal.
  New technological advances have been developed which will convert 
these biomass wastes efficiently to alternative fuels. The most readily 
available of these wastes are agricultural and animal wastes, municipal 
wastes, plastics, used tires, and forest product wastes. This 
production incentive opportunity would provide significant new annual 
quantities of alternative fuel to replace foreign imported oil and 
should be considered a government investment in the nation's future.
  If these incentives are implemented, large marketable quantities of 
quality alternative fuel products can be produced as a replacement for 
foreign imported oil. These processes can achieve the desired results 
in an environmentally positive way that essentially converts all wastes 
to products and provides an answer for waste disposal problems. To 
achieve these results, financial incentives need be provided from the 
government. Section 29 should be extended to include alternative fuels 
produced from all biomass wastes and I encourage all of my colleagues 
to join us in supporting this legislation.
  The fourth bill I am introducing today is the Capturing Landfill Gas 
for Energy Act of 2003. This legislation will provide a credit under 
either Section 29 or Section 45 of the tax code for the production of 
energy from landfill gas, LFG. It is designed to encourage additional 
collection and productive use of methane gas generated by garbage 
decomposing in America's landfills. LFG is a renewable fuel that can be 
used directly as an energy source for heating, as a clean burning 
vehicle fuel, as a hydrogen source for fuel cells. Furthermore, it can 
power generators to produce electricity.
  Congress recognized the importance of LFG for energy diversity and 
national security by providing such a credit in 1980 and extending it 
for nearly two decades. With today's critical energy needs and emphasis 
on distributed generation, this incentive makes more sense than ever. 
Most of the 360 LFG projects that currently are operating were made 
economically feasible by the ``non-conventional-source fuel'' 
production tax credit under Section 29 of the tax code.
  But since June 30, 1998, that credit to encourage construction of new 
LFG projects has been unavailable, and few have been constructed since 
that date. The U.S. Environmental Protection Agency estimates that 600-
700 more LFG projects could be constructed nationwide if there were 
sufficient economic incentives in place to foster

[[Page S2215]]

their development. With such incentives, it is likely that about 55 new 
projects would be brought on line each year. Just one medium-sized 
project could provide three megawatts of electrical power capacity--
enough to meet the electricity needs of 3,000 homes each year.
  In addition to the value of LFG as an important contribution to our 
overall energy strategy, there are compelling environmental reasons to 
encourage these projects. Uncontrolled landfill gas can create fire 
hazards and odors and can impair air quality. The methane in landfill 
gas is 21 times more potent than carbon dioxide as a greenhouse gas. 
Even the large landfills that are required under the Clean Air Act to 
collect their gas and control non-methane organic compounds often find 
it more economic to simply flare or otherwise waste the gas rather than 
use the methane. Some smaller landfills are not required to collect the 
gas, and may continue to emit it for decades under the Clean Air Act. 
Thus, LFG projects not only reduce local and regional air pollution 
while yielding a renewable source of energy, they can also reduce the 
country's yearly emissions of greenhouse gases by a very substantial 
amount at a relatively small cost.
  Unfortunately, the potential energy and environmental benefits of 
future LFG projects are substantial, but they will be lost without 
adequate LFG tax provisions to support project development. On average, 
the total capital cost of constructing an LFG-fueled electricity 
generating project is about $1 million per megawatt, and the annual 
operating and maintenance costs average another $150,000 per megawatt. 
The average capital cost of a new direct use fuel production and 
delivery project is about $2.5 million, with annual operation and 
maintenance costs of about $350,000.
  My bill proposes sufficient, yet sensible, tax incentives to 
encourage these large investments, and I urge my colleagues to join me 
and support LFG tax credits.
  Today I am also pleased to be joined by Senator Akaka in introducing 
the fifth component of my energy package--the Waste to Energy 
Utilization Act of 2003. This legislation will provide a credit under 
Section 45 of the tax code for new waste-to-energy facilities or new 
generating units at existing facilities. Such a tax credit encourages 
clean renewable electricity and promotes energy diversity, while 
helping cities meet the challenge of trash disposal.
  Nearly 2000 communities nationwide rely on waste-to-energy facilities 
to safely dispose of trash and generate clean, renewable energy that 
meets the power need of more than two and a half million homes. The 
U.S. Conference of Mayors has repeatedly urged Congress to include 
provisions that promote waste-to-energy in tax legislation and they are 
joined by the National Association of Regulatory Utility Commissioners, 
the Business Council for Sustainable Energy, the U.S. Chamber of 
Commerce, and the International Brotherhood of Boilermakers.
  Arkansas stands with other environmentally conscious States in 
understanding that waste-to-energy technology saves valuable land and 
significantly reduces the amount of greenhouse gases that would have 
been released into our atmosphere without its operation. The volume of 
waste is reduced by greater than 90 percent in a waste-to-energy 
facility, and EPA has confirmed that more than 33 million tons of 
greenhouse gases are avoided annually by the combustion of municipal 
solid waste. Municipal solid waste is a sustainable source of clean, 
renewable energy.
  Local governments spent about $1 billion over the past five years on 
air pollution control equipment to comply with EPA's Maximum Achievable 
Control Technology, MACT, standards required under the Clean Air Act. 
These retrofits have made waste-to-energy one of the cleanest power 
generators in the country. In June, EPA announced that these facilities 
have shown ``outstanding performance'' resulting in ``dramatic 
decreases'' in emissions, resulting in reductions of mercury emissions 
of more than 95 percent from a decade ago. Communities with waste-to-
energy facilities recycle 33 percent of their trash, on average, and 
historically have more successful recycling programs than cities 
without waste-to-energy plants.
  We must sustain a level marketplace to achieve energy diversity and 
economic growth. I believe this Senate should pass tax legislation that 
includes production tax credits to spur energy generation, and I 
encourage all of my colleagues to join us and support this legislation.
  The sixth bill I introduce today is the Resource Efficient Appliance 
Incentives Act of 2003. I am pleased to be joined in introducing this 
bill by Senators Allard, Grassley, Harkin, Stabenow, Hagel, Levin, and 
DeWine. 
  This legislation will provide a tax credit for the production of 
super energy-efficient clothes washers and refrigerators if those 
appliances exceed new Federal energy efficiency standards. The tax 
credit would only be available for five years and would be capped for 
each manufacturer.
  In 2001, the Department of Energy issued new energy efficiency 
standards for clothes washers. This agreement accompanies rules for 
higher efficiency refrigerators issued by the department two years ago. 
The new rules are significant because clothes washers, clothes dryers, 
and refrigerators account for approximately 15 percent of all household 
energy consumed in the U.S. annually. The tax incentives contained in 
this legislation are constructed to encourage manufacturers not only to 
exceed these new efficiency requirements, but to exceed them by up to 
35 percent.
  Tax incentives are essential to accelerate the production and market 
penetration of leading-edge appliance technologies that create 
significant environmental benefits. The need for super energy-efficient 
appliances is greater this year than at any time in the past 20 years. 
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 making available for other uses the energy of six 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 a city the size of Phoenix, Arizona for 
two years. The water savings attributable to these new technology 
machines is not based on some computer generated model but an actual 
case study that gathered data in the small community of Bern, KS by the 
Dept. of Energy's esteemed Oak Ridge National Laboratory in 1998.
  The Association of Home Appliance Manufacturers estimates these super 
energy-efficient appliances could save the average family $100 per 
year--or $1,400 per family over the lifetime of the appliance. This 
legislation will create the incentives necessary to increase the 
production and sale of these super energy-efficient appliances in the 
short term while passing along energy savings to the American consumer.
  As a DOE analysis indicates, high efficiency washers and 
refrigerators are significantly more expensive to manufacture than 
those that simply meet existing federal standards. Further, market 
surveys of consumers indicate that they are generally not willing to 
pay more for high efficiency appliances, even when it can be 
demonstrated that high efficiency appliances will generate greater 
savings in utility costs over time. The tax credit will provide an 
incentive for manufacturers to develop a greater selection of super 
efficient models that will appeal to consumers at all price points. In 
addition, to assure increased sales of these appliances, manufacturers 
will be encouraged to redirect their marketing and advertising 
resources toward the high efficiency models. Enactment of this 
legislation will bring immediate, significant, and lasting 
environmental benefits to the nation, and I encourage all of my 
colleagues to join us in supporting in this effort.
  The final bill I am introducing today is the Gas Distribution 
Infrastructure Investment Act of 2003. This legislation will amend the 
Internal Revenue Code to modify the depreciation of natural gas 
pipelines, equipment, and infrastructure assets from 20 to 10 years.
  America's demand for energy is expected to grow by 32 percent during 
the next 20 years. Consumer demand for natural gas will grow at almost 
twice that rate, due to its economic, environmental, and operational 
benefits. That level of natural gas use is almost 60

[[Page S2216]]

percent greater than the highest recorded level. To satisfy this 
projected demand, we must substantially expand our existing gas 
infrastructure. This is especially true with respect to the delivery 
sector. Higher capacity utilization of existing infrastructure will 
meet some of this increased demand, but the delivery sector still will 
require capital investments of at least $123 billion for infrastructure 
enhancement and additions.
  Shrinking the lifetime over which an asset is depreciated does not 
change the amount of expense a company is allowed to claim over the 
asset's useful life, but simply shortens the expensing period for tax 
purposes. This shortened tax life generates higher cash flows in terms 
of reduced tax liability during the asset's early useful lifetime. 
Conversely, the cash flows are decreased, relative to the longer 
depreciation life, during the later part of the asset's useful life. 
The overall impact is zero on a gross basis.
  I urge my colleagues to support this important legislation. 
Infrastructure development and expansion is crucial if America's homes 
are to continue to rely on clean-burning natural gas to heat their 
homes and fuel their appliances.
  I ask unanimous consent that each of the seven bills I am introducing 
today be printed in the Record.
  There being no objection, the bills were ordered to be printed in the 
Record, as follows:

                                 S. 355

       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 ``Biodiesel Promotion Act of 
     2003''.

     SEC. 2. INCENTIVES FOR BIODIESEL.

       (a) Credit for Biodiesel Used as a Fuel.--
       (1) 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 inserting after 
     section 40 the following new section:

     ``SEC. 40A. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the biodiesel mixture 
     credit.
       ``(b) Definition of Biodiesel Mixture Credit.--For purposes 
     of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is the sum of the products of 
     the biodiesel mixture rate for each qualified biodiesel 
     mixture and the number of gallons of such mixture of the 
     taxpayer for the taxable year.
       ``(B) Biodiesel mixture rate.--For purposes of subparagraph 
     (A), the biodiesel mixture rate for each qualified biodiesel 
     mixture shall be--
       ``(i) in the case of a mixture with only biodiesel V, 1 
     cent for each whole percentage point (not exceeding 20 
     percentage points) of biodiesel V in such mixture, and
       ``(ii) in the case of a mixture with biodiesel NV, or a 
     combination of biodiesel V and biodiesel NV, 0.5 cent for 
     each whole percentage point (not exceeding 20 percentage 
     points) of such biodiesel in such mixture.
       ``(2) Qualified biodiesel mixture.--
       ``(A) In general.--The term `qualified biodiesel mixture' 
     means a mixture of diesel and biodiesel V or biodiesel NV 
     which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(B) Sale or use must be in trade or business, etc.--
       ``(i) In general.--Biodiesel V or biodiesel NV used in the 
     production of a qualified biodiesel mixture shall be taken 
     into account--

       ``(I) only if the sale or use described in subparagraph (A) 
     is in a trade or business of the taxpayer, and
       ``(II) for the taxable year in which such sale or use 
     occurs.

       ``(ii) Certification for biodiesel v.--Biodiesel V used in 
     the production of a qualified biodiesel mixture shall be 
     taken into account only if the taxpayer described in 
     subparagraph (A) obtains a certification from the producer of 
     the biodiesel V which identifies the product produced.
       ``(C) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(c) Coordination With Exemption From Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any biodiesel V shall, under regulations 
     prescribed by the Secretary, be properly reduced to take into 
     account any benefit provided with respect to such biodiesel V 
     solely by reason of the application of section 4041(n) or 
     section 4081(f).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel v defined.--The term `biodiesel V' means 
     the monoalkyl esters of long chain fatty acids derived solely 
     from virgin vegetable oils for use in compressional-ignition 
     (diesel) engines. Such term shall include esters derived from 
     vegetable oils from corn, soybeans, sunflower seeds, 
     cottonseeds, canola, crambe, rapeseeds, safflowers, 
     flaxseeds, rice bran, and mustard seeds.
       ``(2) Biodiesel nv defined.--The term `biodiesel NV' means 
     the monoalkyl esters of long chain fatty acids derived from 
     nonvirgin vegetable oils or animal fats for use in 
     compressional-ignition (diesel) engines.
       ``(3) Registration requirements.--The terms `biodiesel V' 
     and `biodiesel NV' shall only include a biodiesel which 
     meets--
       ``(i) the registration requirements for fuels and fuel 
     additives established by the Environmental Protection Agency 
     under section 211 of the Clean Air Act (42 U.S.C. 7545), and
       ``(ii) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(4) Biodiesel mixture not used as a fuel, etc.--
       ``(A) Imposition of tax.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel V or biodiesel NV used in the production 
     of any qualified biodiesel mixture, and
       ``(ii) any person--

       ``(I) separates such biodiesel from the mixture, or
       ``(II) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the biodiesel mixture rate applicable under 
     subsection (b)(1)(B) and the number of gallons of the 
     mixture.
       ``(B) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) as if such tax were imposed by section 4081 
     and not by this chapter.
       ``(5) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Election To Have Biodiesel Fuels Credit Not Apply.--
       ``(1) In general.--A taxpayer may elect to have this 
     section not apply for any taxable year.
       ``(2) Time for making election.--An election under 
     paragraph (1) for any taxable year may be made (or revoked) 
     at any time before the expiration of the 3-year period 
     beginning on the last date prescribed by law for filing the 
     return for such taxable year (determined without regard to 
     extensions).
       ``(3) Manner of making election.--An election under 
     paragraph (1) (or revocation thereof) shall be made in such 
     manner as the Secretary may by regulations prescribe.
       ``(f) Termination.--This section shall not apply to any 
     fuel sold after December 31, 2005.''.
       (2) Credit treated as part of general business credit.--
     Section 38(b) of the Internal Revenue Code of 1986 is amended 
     by striking ``plus'' at the end of paragraph (14), by 
     striking the period at the end of paragraph (15) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(16) the biodiesel fuels credit determined under section 
     40A(a).''.
       (3) Conforming amendments.--
       (A) Section 39(d) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new paragraph:
       ``(11) No carryback of biodiesel fuels credit before 
     january 1, 2003.--No portion of the unused business credit 
     for any taxable year which is attributable to the biodiesel 
     fuels credit determined under section 40A may be carried back 
     to a taxable year beginning before January 1, 2003.''.
       (B) Section 196(c) of such Code is amended by striking 
     ``and'' at the end of paragraph (9), by striking the period 
     at the end of paragraph (10), and by adding at the end the 
     following new paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40A(a).''.
       (C) Section 6501(m) of such Code is amended by inserting 
     ``40A(e),'' after ``40(f),''.
       (D) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     after the item relating to section 40 the following new item:

``Sec. 40A. Biodiesel used as fuel.''.

       (4) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2002.
       (b) Reduction of Motor Fuel Excise Taxes on Biodiesel V 
     Mixtures.--
       (1) In general.--Section 4081 of the Internal Revenue Code 
     of 1986 (relating to manufacturers tax on petroleum products) 
     is amended by adding at the end the following new subsection:
       ``(f) Biodiesel V Mixtures.--Under regulations prescribed 
     by the Secretary--
       ``(1) In general.--In the case of the removal or entry of a 
     qualified biodiesel mixture with biodiesel V, the rate of tax 
     under subsection (a) shall be the otherwise applicable rate 
     reduced by the biodiesel mixture rate (if any) applicable to 
     the mixture.
       ``(2) Tax prior to mixing.--
       ``(A) In general.--In the case of the removal or entry of 
     diesel fuel for use in producing at the time of such removal 
     or entry a qualified biodiesel mixture with biodiesel V, the 
     rate of tax under subsection (a) shall be the rate determined 
     under subparagraph (B).
       ``(B) Determination of rate.--For purposes of subparagraph 
     (A), the rate determined under this subparagraph is the rate 
     determined under paragraph (1), divided by a

[[Page S2217]]

     percentage equal to 100 percent minus the percentage of 
     biodiesel V which will be in the mixture.
       ``(3) Definitions.--For purposes of this subsection, any 
     term used in this subsection which is also used in section 
     40A shall have the meaning given such term by section 40A.
       ``(4) Certain rules to apply.--Rules similar to the rules 
     of paragraphs (6) and (7) of subsection (c) shall apply for 
     purposes of this subsection.''.
       (2) Conforming amendments.--
       (A) Section 4041 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new subsection:
       ``(n) Biodiesel V Mixtures.--Under regulations prescribed 
     by the Secretary, in the case of the sale or use of a 
     qualified biodiesel mixture (as defined in section 40A(b)(2)) 
     with biodiesel V, the rates under paragraphs (1) and (2) of 
     subsection (a) shall be the otherwise applicable rates, 
     reduced by any applicable biodiesel mixture rate (as defined 
     in section 40A(b)(1)(B)).''.
       (B) Section 6427 of such Code is amended by redesignating 
     subsection (p) as subsection (q) and by inserting after 
     subsection (o) the following new subsection:
       ``(p) Biodiesel V Mixtures.--Except as provided in 
     subsection (k), if any diesel fuel on which tax was imposed 
     by section 4081 at a rate not determined under section 
     4081(f) is used by any person in producing a qualified 
     biodiesel mixture (as defined in section 40A(b)(2)) with 
     biodiesel V which is sold or used in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the per gallon applicable biodiesel 
     mixture rate (as defined in section 40A(b)(1)(B)) with 
     respect to such fuel.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to any fuel sold after December 31, 2002, and 
     before January 1, 2006.
       (c) Highway Trust Fund Held Harmless.--There are hereby 
     transferred (from time to time) from the funds of the 
     Commodity Credit Corporation amounts determined by the 
     Secretary of the Treasury to be equivalent to the reductions 
     that would occur (but for this subsection) in the receipts of 
     the Highway Trust Fund by reason of the amendments made by 
     this section.

                                 S. 356

       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 ``EPACT Alternative Fuel 
     Flexibility Act of 2003''.

     SEC. 2. BIODIESEL FUEL USE CREDITS.

       Section 312(b) of the Energy Policy Act of 1992 (42 U.S.C. 
     13220(b)) is amended--
       (1) by striking ``(b) Use of Credits.--'' and all that 
     follows through ``At the request'' and inserting the 
     following:
       ``(b) Use of Credits.--At the request''; and
       (2) by striking paragraph (2).

                                 S. 357

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. MODIFICATION OF CREDIT FOR PRODUCTION OF FUEL FROM 
                   NONCONVENTIONAL SOURCES TO INCLUDE PRODUCTION 
                   OF FUEL FROM AGRICULTURAL AND ANIMAL WASTE.

       (a) In General.--Section 29(c)(1) of the Internal Revenue 
     Code of 1986 (relating to definition of qualified fuels) is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (B)(ii),
       (2) by striking the period at the end of subparagraph (C) 
     and inserting ``, and'', and
       (3) by adding at the end the following new subparagraph:
       ``(D) liquid, gaseous, or solid fuels from qualified 
     agricultural and animal waste, including such fuels when used 
     as feedstocks.''.
       (b) Qualified Agricultural and Animal Waste.--
       (1) In general.--Section 29(c) of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     paragraph:
       ``(4) Qualified agricultural and animal waste.--The term 
     `qualified agricultural and animal waste' means agriculture 
     and animal waste, including by-products, packaging, and any 
     materials associated with the processing, feeding, selling, 
     transporting, or disposal of agricultural or animal products 
     or wastes, including wood shavings, straw, rice hulls, and 
     other bedding for the disposition of manure.''.
       (2) Conforming amendment.--Section 29(c)(3) of such Code is 
     amended--
       (A) by striking ``and'' at the end of subparagraph (A),
       (B) by striking the period at the end of subparagraph (B) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(C) qualified agricultural and animal waste.''.
       (c) Extension of Credit.--Section 29(g) of the Internal 
     Revenue Code of 1986 (relating to extension for certain 
     facilities) is amended by adding at the end the following new 
     paragraph:
       ``(3) Facilities producing fuels from agricultural and 
     animal waste.--In the case of facility for producing 
     qualified fuels described in subsection (c)(1)(D)--
       ``(A) for purposes of subsection (f)(1)(B), such facility 
     shall be treated as being placed in service before January 1, 
     1993, if such facility is placed in service after January 1, 
     2003, and before January 1, 2008, and
       ``(B) if such facility is originally placed in service 
     after December 31, 1992, paragraph (2) of subsection (f) 
     shall be applied with respect to such facility by 
     substituting `January 1, 2018' for `January 1, 2003'.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuels sold after the date of the enactment of 
     this Act.

                                 S. 358

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. CREDIT FOR PRODUCING FUEL FROM LANDFILL GAS.

       (a) In General.--Section 29 of the Internal Revenue Code of 
     1986 (relating to credit for producing fuel from a 
     nonconventional source) is amended by adding at the end the 
     following new subsection:
       ``(h) Extension and Modification for Facilities Producing 
     Qualified Fuels From Landfill Gas.--
       ``(1) In general.--In the case of a facility for producing 
     qualified fuel from landfill gas which is placed in service 
     after June 30, 1998, and before January 1, 2008, this section 
     shall apply to fuel produced at such facility during the 5-
     year period beginning on the later of--
       ``(A) the date such facility was placed in service, or
       ``(B) the date of the enactment of this subsection.
       ``(2) Reduction of credit for production from certain 
     landfill gas facilities.--In the case of a facility to which 
     paragraph (1) applies which is located at a landfill which is 
     required pursuant to 40 CFR 60.752(b)(2) or 40 CFR 60.33c to 
     install and operate a collection and control system which 
     captures gas generated within the landfill, subsection (a)(1) 
     shall be applied to gas so captured by substituting `$2' for 
     `$3' for the taxable year during which such system is 
     required to be installed and operated.
       ``(3) Special rules.--In determining the amount of credit 
     allowable under this section solely by reason of this 
     subsection--
       ``(A) Daily limit.--The amount of qualified fuels sold 
     during any taxable year which may be taken into account by 
     reason of this subsection with respect to any facility shall 
     not exceed an average barrel-of-oil equivalent of 200,000 
     cubic feet of natural gas per day. Days before the date the 
     facility is placed in service shall not be taken into account 
     in determining such average.
       ``(B) Extension period to commence with unadjusted credit 
     amount.--In the case of fuels sold after 2003, subparagraph 
     (B) of subsection (d)(2) shall be applied by substituting 
     `2003' for `1979'.''.
       (b) Additional Definition.--Section 29(d) of the Internal 
     Revenue Code of 1986 (relating to other definitions and 
     special rules) is amended by adding at the end the following 
     new paragraph:
       ``(9) Landfill gas facility.--
       ``(A) In general.--A facility for producing qualified fuel 
     from landfill gas, placed in service before, on, or after the 
     date of the enactment of this paragraph, includes all wells, 
     pipes, and other gas collection equipment installed as part 
     of the facility over the life of the landfill, including any 
     modifications or expansions thereof, after the facility is 
     first placed in service.
       ``(B) Landfill gas.--The term `landfill gas' means gas 
     derived from the biodegradation of municipal solid waste.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to fuel sold after the date of the enactment of 
     this Act.

     SEC. 2. EXTENSION AND EXPANSION OF CREDIT FOR PRODUCTION OF 
                   ELECTRICITY TO PRODUCTION FROM LANDFILL GAS.

       (a) In General.--Section 45(c)(1) of the Internal Revenue 
     Code of 1986 (defining qualified energy resources) is amended 
     by striking ``and'' at the end of subparagraph (B), by 
     striking the period at the end of subparagraph (C) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(D) landfill gas.''.
       (b) Qualified Facility.--Section 45(c)(3) of the Internal 
     Revenue Code of 1986 (relating to qualified facility) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Landfill gas facility.--In the case of a facility 
     using landfill gas to produce electricity, the term 
     `qualified facility' means any such facility owned by the 
     taxpayer which is originally placed in service before January 
     1, 2008.''.
       (c) Special Rules and Definitions.--
       (1) Reduced credit for certain preefective date 
     facilities.--Section 45(d) of the Internal Revenue Code of 
     1986 (relating to definitions and special rules) is amended 
     by adding at the end the following new paragraph:
       ``(8) Reduced credit for certain preeffective date 
     facilities.--In the case of any facility described in 
     subparagraph (D) of paragraph (3) which is placed in service 
     before the date of the enactment of this subparagraph--
       ``(A) subsection (a)(1) shall be applied by substituting 
     `1.0 cents' for `1.5 cents', and
       ``(B) the 5-year period beginning on the date of the 
     enactment of this paragraph shall be substituted in lieu of 
     the 10-year period in subsection (a)(2)(A)(ii).''.
       (2) Coordination with section 29.--Section 45(c)(3) of such 
     Code (relating to qualified facility), as amended by 
     subsection (b), is amended by adding at the end the following 
     new subparagraph:
       ``(E) Coordination with section 29.--The term `qualified 
     facility' shall not include any facility the production from 
     which is taken

[[Page S2218]]

     into account in determining any credit under section 29 for 
     the taxable year or any prior taxable year.''.
       (3) Landfill gas.--Section 45(c) of such Code is amended by 
     adding at the end the following new paragraph:
       ``(5) Landfill gas.--The term `landfill gas' means gas 
     derived from the biodegradation of municipal solid waste.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act.

                                 S. 359

       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 ``Waste to Energy Utilization 
     Act of 2003''.

     SEC. 2. CREDIT FOR ELECTRICITY PRODUCED FROM MUNICIPAL SOLID 
                   WASTE.

       (a) In General.--Section 45(c)(1) of the Internal Revenue 
     Code of 1986 (defining qualified energy resources) is amended 
     by striking ``and'' at the end of subparagraph (B), by 
     striking the period at the end of subparagraph (C) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(D) municipal solid waste.''.
       (b) Qualified Facility.--Section 45(c)(3) of the Internal 
     Revenue Code of 1986 (relating to qualified facility) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Municipal solid waste facility.--
       ``(i) In general.--In the case of a facility or unit using 
     municipal solid waste to produce electricity, the term 
     `qualified facility' means--

       ``(I) any facility owned by the taxpayer which is 
     originally placed in service on or after date of the 
     enactment of this subparagraph and before January 1, 2008, or
       ``(II) any unit owned by the taxpayer which is originally 
     placed in service and added to another facility on or after 
     such date of enactment and before January 1, 2008.

       ``(ii) Special rule.--In the case of a qualified facility 
     described in clause (i)(II), the 10-year period referred to 
     in subsection (a) shall be treated as beginning no earlier 
     than the date of the enactment of this subparagraph.
       ``(iii) Credit eligibility.--In the case of any qualified 
     facility described in clause (i), if the owner of such 
     facility is not the producer of the electricity, the person 
     eligible for the credit allowable under subsection (a) is the 
     lessee or the operator of such facility.''.
       (c) Definition.--Section 45(c) of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     paragraph:
       ``(5) Municipal solid waste.--The term `municipal solid 
     waste' has the meaning given the term `solid waste' under 
     section 2(27) of the Solid Waste Disposal Act (42 U.S.C. 
     6903).''.
       (d) No Credit for Certain Production.--Section 45(d) of the 
     Internal Revenue Code of 1986 (relating to definitions and 
     special rules) is amended by adding at the end the following 
     new paragraph:
       ``(8) Operations inconsistent with solid waste disposal 
     act.--In the case of a qualified facility described in 
     subsection (c)(3)(D), subsection (a) shall not apply to 
     electricity produced at such facility during any taxable year 
     if, during a portion of such year, there is a certification 
     in effect by the Administrator of the Environmental 
     Protection Agency that such facility was permitted in a 
     manner inconsistent with section 4003(d) of the Solid Waste 
     Disposal Act (42 U.S.C. 6943(d)).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

                                 S. 360

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. NATURAL GAS DISTRIBUTION LINES TREATED AS 10-YEAR 
                   PROPERTY.

       (a) In General.--Subparagraph (D) of section 168(e)(3) of 
     the Internal Revenue Code of 1986 (relating to classification 
     of certain property) is amended by striking ``and'' at the 
     end of clause (i), by striking the period at the end of 
     clause (ii) and by inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iii) any natural gas distribution line.''.
       (b) Alternative System.--The table contained in section 
     168(g)(3)(B) of the Internal Revenue Code of 1986 is amended 
     by inserting after the item relating to subparagraph (D)(ii) 
     the following:

``(D)(iii)........................................................20''.

       (c) Alternative Minimum Tax Exception.--Subparagraph (B) of 
     section 56(a)(1) of the Internal Revenue Code of 1986 is 
     amended by inserting before the period the following: ``or in 
     clause (iii) of section 168(e)(3)(D)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

                                 S. 361

       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 2003''.

     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. 45G. ENERGY EFFICIENT APPLIANCE CREDIT.

       ``(a) General Rule.--For purposes of section 38, the energy 
     efficient appliance credit determined under this section for 
     the taxable year is an amount equal to the applicable amount 
     determined under subsection (b) with respect to the eligible 
     production of qualified energy efficient appliances produced 
     by the taxpayer during the calendar year ending with or 
     within the taxable year.
       ``(b) Applicable Amount; Eligible Production.--For purposes 
     of subsection (a)--
       ``(1) Applicable amount.--The applicable amount is--
       ``(A) $50, in the case of--
       ``(i) a clothes washer which is produced in 2003 with at 
     least a 1.26 MEF (at least 1.42 MEF for washers produced 
     after 2003 but not after 2006), or
       ``(ii) a refrigerator produced in 2003 which consumes at 
     least 10 percent less kWh per year than the energy 
     conservation standards for refrigerators promulgated by the 
     Department of Energy effective July 1, 2001,
       ``(B) $100, in the case of--
       ``(i) a clothes washer which is produced in 2003 with at 
     least a 1.42 MEF (at least 1.5 MEF for washers produced after 
     2003 and before 2008), or
       ``(ii) a refrigerator produced after 2002 and before 2007 
     which consumes at least 15 percent less kWh per year (at 
     least 20 percent less kWh per year for refrigerators produced 
     in 2007) than such energy conservation standards, and
       ``(C) $150, in the case of a refrigerator which consumes at 
     least 20 percent less kWh per year than such energy 
     conservation standards and is produced after 2002 and before 
     2007.
       ``(2) Eligible production.--
       ``(A) In general.--The eligible production of each category 
     of qualified energy efficient appliances is the excess of--
       ``(i) the number of appliances in such category which are 
     produced by the taxpayer during such calendar year, over
       ``(ii) the average number of appliances in such category 
     which were produced by the taxpayer during calendar years 
     2000, 2001, and 2002.
       ``(B) Categories.--For purposes of subparagraph (A), the 
     categories are--
       ``(i) clothes washers described in paragraph (1)(A)(i),
       ``(ii) clothes washers described in paragraph (1)(B)(i),
       ``(iii) refrigerators described in paragraph (1)(A)(ii),
       ``(iv) refrigerators described in paragraph (1)(B)(ii), and
       ``(v) refrigerators described in paragraph (1)(C).
       ``(C) Special rule for 2003 production.--For purposes of 
     determining eligible production for calendar year 2003--
       ``(i) only production after the date of enactment of this 
     section shall be taken into account under subparagraph 
     (A)(i), and
       ``(ii) the amount taken into account under subparagraph 
     (A)(ii) shall be an amount which bears the same ratio to the 
     amount which would (but for this subparagraph) be taken into 
     account under subparagraph (A)(ii) as--

       ``(I) the number of days in calendar year 2003 after the 
     date of enactment of this section, bears to
       ``(II) 365.

       ``(c) Limitation on Maximum Credit.--
       ``(1) In general.--The maximum amount of credit allowed 
     under subsection (a) with respect to a taxpayer for all 
     taxable years shall be $60,000,000 except that not more than 
     $30,000,000 shall be allowed for production of any 
     combination of clothes washers produced with a 1.26 MEF 
     (described in subsection (b)(1)(A)(i)) and refrigerators 
     described in subsection (b)(1)(A)(ii).
       ``(2) 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.
       ``(3) Gross receipts.--For purposes of this subsection, the 
     rules of paragraphs (2) and (3) of section 448(c) shall 
     apply.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) a clothes washer described in subparagraph (A)(i) or 
     (B)(i) of subsection (b)(1), or
       ``(B) a refrigerator described in subparagraph (A)(ii), 
     (B)(ii) or (C) of subsection (b)(1).
       ``(2) Clothes washer.--The term `clothes washer' means a 
     residential clothes washer, including a residential style 
     coin operated washer.
       ``(3) Refrigerator.--The term `refrigerator' means an 
     automatic defrost refrigerator-freezer which has an internal 
     volume of at least 16.5 cubic feet.
       ``(4) MEF.--The term `MEF' means Modified Energy Factor (as 
     determined by the Secretary of Energy).
       ``(e) Special Rules.--
       ``(1) In general.--Rules similar to the rules of 
     subsections (c), (d), and (e) of section 52 shall apply for 
     purposes of this section.

[[Page S2219]]

       ``(2) Aggregation rules.--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 1 
     person for purposes of subsection (a).
       ``(f) Verification.--The taxpayer shall submit such 
     information or certification as the Secretary, in 
     consultation with the Secretary of Energy, determines 
     necessary to claim the credit amount under subsection (a).''.
       (b) Limitation on Carryback.--Section 39(d) of the Internal 
     Revenue Code of 1986 (relating to transition rules) is 
     amended by adding at the end the following new paragraph:
       ``(11) No carryback of energy efficient appliance credit 
     before effective date.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     energy efficient appliance credit determined under section 
     45G may be carried to a taxable year ending before January 1, 
     2003.''.
       (c) 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 (14), by 
     striking the period at the end of paragraph (15) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(16) the energy efficient appliance credit determined 
     under section 45G(a).''.
       (d) 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. 45G. Energy efficient appliance credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2002, 
     in taxable years ending after such date.

  Mr. GRASSLEY. Mr. President, I rise to voice my strong support for 
legislation introduced today by Senators Lincoln and Allard, entitled 
``The Resource Efficient Appliance Incentive Act of 2003.'' I'm proud 
to be an original cosponsor.
  This legislation will provide a valuable incentive to accelerate and 
expand the production and market penetration of ultra energy-efficient 
appliances. By providing a tax credit for the development of super 
energy-efficient washing machines and refrigerators, this legislation 
creates the incentives necessary to increase the production and sale of 
these appliances in the short term and ultimately lead to a dramatic 
change in consumer purchasing decisions.
  Under this proposal, 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 2003 and 2007. 
Likewise, manufacturers would be eligible to claim a credit of $50, 
$100, or $150, depending on efficiency level, for each super energy-
efficient refrigerator produced between 2003 and 2007. 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 a city the size of 
Phoenix, Arizona for two years. And, 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 1.5 million super energy-efficient washers and 
refrigerators during the next five years. 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.
  As Chairman of the Senate Finance Committee, I look forward to 
working with Senators Lincoln and Allard as we continue to promote 
energy conservation and efficiency.
                                 ______