[Congressional Record Volume 151, Number 78 (Tuesday, June 14, 2005)]
[Senate]
[Pages S6488-S6489]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH (for himself and Mrs. Lincoln):
  S. 1240. A bill to amend the Internal Revenue Code of 1986 to allow 
an investment tax credit for the purchase of trucks with new diesel 
engine technologies, and for other purposes; to the Committee on 
Finance.
  Mr. SMITH. Mr. President, today I introduce legislation critically 
important to our Nation's continued economic growth and future 
environmental progress. I am joined by my friend and colleague from 
Arkansas, Senator Lincoln.
  Nearly everything sold in the United States moves by truck at some 
stage of delivery. In fact, America's trucking industry is responsible 
for moving nearly 70 percent of the tonnage of all products sold in the 
U.S.--a total of more than 9.8 billion tons of freight shipped in 2004.
  If trucking serves as the circulatory system for the U.S. economy, 
then diesel engines provide America's economic heartbeat. Because of 
their superior fuel efficiency, durability and reliability, diesel 
engines power 100 percent of the long-haul trucks responsible for the 
bulk of freight deliveries in the U.S. Engineers have revolutionized 
this technology over the past decade by dramatically reducing emissions 
while maintaining diesel's inherent fuel efficiency. For example, a new 
truck sold today produces 78 percent fewer smog-forming and particulate 
emissions than a similar truck built in 1987.
  Even more advanced, cleaner technology is scheduled to begin rolling 
on America's highways in 2007. Beginning that year, a new Environmental 
Protection Agency, EPA, regulation for diesel trucks will require 
further reductions in smog-forming and particulate emissions--
reductions of over 90 percent compared to current levels. When fully 
implemented in 2010, EPA's clean diesel rule is estimated to reduce 
smog-forming emissions of nitrogen oxides by 2.6 million tons each 
year, along with 110,000 tons of fine particulate matter annually.
  These clean diesel trucks are expected to play a leading role in 
helping cities and states meet strict new federal standards for ozone 
and fine particulates. And the technology is real; truck manufacturers 
and suppliers have demonstrated their commitment to delivering clean 
diesel by 2007.
  However, we must recognize that clean air comes at a price. Trucks 
containing clean diesel engines that meet the EPA regulation in 2007 
will include innovative emissions control technology that will increase 
purchase and

[[Page S6489]]

maintenance costs. Additionally, the 2007 trucks will run on low-sulfur 
diesel fuel that will be more expensive because of the added cost of 
sulfur removal. These additional financial burdens will fall upon 
America's trucking industry--where 96 percent of companies are 
designated as small businesses.
  Equally important for those of us concerned about clean air, we must 
recognize that EPA's projected environmental benefits will materialize 
only if trucking companies can afford to purchase the cleaner but more 
expensive trucks equipped with the clean diesel engines. Federal 
regulation can require manufacturers to produce emissions compliant 
products, but the government cannot mandate the purchase of these clean 
diesel trucks. Customers always have the option of holding on to older 
trucks longer, rebuilding older engines, leasing older trucks, or 
turning to the used truck market. They can also simply buy more trucks 
today, with older design components and without the cleanest 
technology, and defer the purchase of cleaner trucks.
  The bottom line is that the actual trucks in service on America's 
highways in 2007 and beyond will not yield the emissions reductions 
currently projected by EPA's own air quality models unless trucking 
companies can afford to buy the new clean diesels. Absent a short-term 
incentive for the purchase of these new trucks in 2007, simple 
economics will drive most trucking companies to either pre-purchase 
trucks that do not meet the new EPA regulation or extend the lives of 
their current fleets. This ``pre-buy/low-buy'' scenario played out most 
recently with the introduction of lower emission diesel trucks in 
October 2002.
  Avoiding this problem, Mr. President, is the reason I am introducing 
this legislation today. Truck manufacturers and suppliers have 
responded to our clean air challenge and will be ready for the on-time 
delivery of remarkably clean trucks in 2007. The Federal Government 
needs to take the next step by helping to ensure the widest possible 
distribution of this clean diesel technology into the U.S. trucking 
fleet.
  Under the proposal I am introducing today with Senator Lincoln, 
taxpayers would be allowed an investment tax credit equal to 5 percent 
of the cost of EPA-compliant diesel equipment for acquisitions after 
December 31, 2006 but before January 1, 2008. The credits could be used 
against the taxpayer's regular tax or AMT liability. The credit would 
be part of the general business credit and thus credits unutilized in a 
taxable year would be carried over to another taxable year.
  In addition, taxpayers would be allowed to expense the acquisition 
cost of qualifying equipment acquired and placed in service after 
December 31, 2006 and before January 1, 2008, for purposes of both the 
regular tax and the AMT.
  Enacting the short-term tax incentive that Senator Lincoln and I 
propose would put the cost of new clean diesel technology on at least a 
level playing field with the cost of today's trucks. It would ensure 
that trucking companies have the financial ability to purchase these 
modern clean diesels. Consequently, our legislation would ensure that 
Americans can breathe easier because the full air quality benefits 
intended by EPA's clean diesel rule will be realized.
  I look forward to working with Senator Lincoln and the rest of my 
colleagues to see this important clean air legislation enacted.
                                 ______