[Congressional Record Volume 152, Number 91 (Thursday, July 13, 2006)]
[Senate]
[Pages S7514-S7516]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself and Mr. Carper):
  S. 3654. A bill to amend the Internal Revenue Code to allow a credit 
against income tax, or, in the alternative, a special depreciation 
allowance, for reuse and recycling property, to provide for tax-exempt 
financing of recycling equipment, and for other purposes; to the 
Committee on Finance.
  Mr. JEFFORDS. Mr. President, today I am introducing the Recycling 
Investment Saves Energy--RISE--Act of 2006 with my colleague Senator 
Carper. The RISE tax incentives will create jobs, increase 
productivity, conserve energy and expand America's recycling 
infrastructure.
  I offer this bill to capture the significant energy savings available 
through greater recycling. For example, recycling aluminum cans saves 
95 percent of the energy required to make the same amount of aluminum 
from its virgin source. The amount of lost energy from throwing away 
aluminum and steel cans, plastic PET and glass containers, newsprint 
and corrugated packaging was equivalent to the annual output of 15 
medium sized coal powerplants. Increasing the recycling rate of these 
commodities by 10 percent would save enough energy annually to heat 
74,350 million American homes, provide the required electricity for 2.5 
million Americans, and save about $771 million in avoid costs for 
barrels of crude oil. As a result, recycling should be an integral 
component of our nation's energy efficiency strategy.
  The RISE Act would also help create quality jobs. Due to the 
diminishing quantity and quality of available recyclable materials, 
many companies currently are not able to obtain the volume of quality 
recycled feedstock needed to meet demand. This new economic challenge 
makes it even harder for recycled products to compete in the 
marketplace. In some cases, recyclers have been forced to shut down 
their operations in the United States and relocate to other countries 
due in part to insufficient or poor quality recycled feedstocks. This 
is particularly unfortunate as, on a per-ton basis, sorting and 
processing recyclables are estimated to sustain 10 times more jobs than 
landfilling or incineration.
  A national investment in our recycling infrastructure is necessary to 
reverse the stagnant or declining recycling rate of many consumer 
commodities, including aluminum, glass and plastic. For example, 55 
billion aluminum cans were wasted by not being recycled in 2004, which 
represents approximately $1 billion of aluminum lost to industry. The 
recycling rate of paper is estimated to be roughly 51 percent, glass 
containers 35 percent, and PET plastic bottles less than 20 percent.
  The RISE Act will save energy and improve the quantity and quality of 
recycled materials by allowing companies to claim either a 15-percent 
tax credit or a 50 percent accelerated depreciation deduction for the 
purchase of machinery and other equipment used exclusively to collect, 
distribute or recyclable material. Recyclable material is defined 
broadly to capture a wide variety of commodities, including plastic, 
scrap textiles, scrap rubber, scrap packaging, recovered fiber, scrap 
ferrous and nonferrous metals, or electronic waste generated by an 
individual or business. It does not include buildings, real estate or 
rolling stock used to transport reuse and recyclable materials.
  The RISE Act aims to reverse the trend in recycling rates and 
resulting energy loss by incentivizing greater collection, distribution 
and recycling of quality recyclable materials. The bill will address 
quality concerns by reducing the barriers hindering investment in 
optical sorting and other state-of-the-art equipment needed at material 
recovery and manufacturing facilities. It will make innovative 
technology more affordable, such as reversible vending machines that 
collect and process empty containers. An earlier version of RISE was 
incorporated as section 1545 of the Senate Energy Policy Act of 2005, 
but did not survive the conference committee.
  The Rise Act will amend section 142 of the Internal Revenue Code of 
1986 by redefining ``solid waste facilities'' to ensure that recycling 
facilities are eligible for tax-exempt bond financing under this 
section. This latter provision was created to resolve an ongoing glitch 
in the law that prevents these facilities from being eligible for tax-
exempt financing.
  The following organizations support the RISE Act: American Beverage 
Association, American Forest & Paper Association, Association of 
Postconsumer Plastic Recyclers, Ball Corporation, Carolina Recycling 
Association, Glass Packaging Institute, Institute of Scrap Recycling 
Industries, Inc., ISRI, National Association for PET Container 
Resources, NAPCOR, National Recycling Coalition, National Solid Wastes 
Management Association, Solid Waste Association of North America, Steel 
Recycling Institute, US Conference of Mayors/Municipal Waste Management 
Association, Waste Technology Equipment Association, WASTEC, Envision 
Plastics, EvCo Research, LLC, Florikan ESA Corporation, L B. Schmidt 
and Associates, Mid America Recycling Companies, MSS, Inc., Novelis, 
Inc., formerly Alcan, NRT, Inc., O-I, formerly Owens-Illinois, Orwak 
Group, Reynolds Recycling, Saint-Gobain Containers, Inc., Strategic 
Materials, Inc., The Coca Cola Company, TiTech Visionsort, Tomra, 
UltrePET, United Resource Recovery Corporation, Van Dyke Bailer Corp/
Lubo USA, wTe Corporation, Paper Recycling Coalition, and Yemm and 
Hart,

[[Page S7515]]

Ltd. Mr. President, most of these organizations have submitted a joint 
letter in support of the RISE Act, and I will ask to have the letter 
printed in the Record following the statement.
  Reducing the barriers to recycling also serves a number of 
environmental goals, including lessening the need for new landfills, 
preventing emissions of many air and water pollutants, reducing 
greenhouse gas emissions, and stimulating the development of green 
technology. But most importantly, recycling helps preserve resources of 
our children's future.
  For these reasons, I urge my colleagues to support this bill.
  Mr. President, I ask unanimous consent to have the letter I referred 
to be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3654

       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 ``Recycling Investment Saves 
     Energy'' or the ``RISE Act''.

     SEC. 2. FINDINGS.

       The Senate finds the following:
       (1) Recycling means business in the United States, with 
     more than 56,000 reuse and recycling establishments that 
     employ over 1.1 million people, generating an annual payroll 
     of nearly $37 billion, and grossing over $236 billion in 
     annual revenues. On a per-ton basis, sorting and processing 
     recyclables alone sustain 10 times more jobs than landfilling 
     or incineration.
       (2) By reducing the need to extract and process virgin raw 
     materials into manufacturing feedstock, reuse and recycling 
     helps achieve significant energy savings. For example:
       (A) Taken together, the amount of energy wasted from not 
     recycling aluminum and steel cans, paper, printed materials, 
     glass, and plastic equals the annual output of 15 medium 
     sized power plants.
       (B) The reuse of 500 steel drums per week yields 6 trillion 
     Btu's per year, which is enough energy savings to power a 
     city the size of Colorado Springs, Colorado, for 1 year.
       (3) Unfortunately, the United States recycling rate of many 
     consumer commodities, including aluminum, glass, and plastic, 
     are stagnant or declining, and businesses that rely on 
     recycled feedstock are finding it difficult to obtain the 
     quantity and quality of recycled materials needed. 
     Increasingly, United States manufacturing facilities that 
     rely on recycled feedstock are closing or forced to re-tool 
     to use virgin materials.
       (4) The environmental impacts from reuse and recycling are 
     significant. Increased reuse and recycling would produce 
     significant environmental benefits, such as cleaner air, 
     safer water, and reduced production costs. For example:
       (A) Between 2 and 5 percent of the waste stream is 
     reusable. Reuse prevents waste creation and adverse impacts 
     from disposal.
       (B) On a per-ton basis, recycling of: office paper prevents 
     60 pounds of air pollutants from being released, saves 7,000 
     gallons of water, and 3.3 cubic yards of landfill space; 
     aluminum saves 10 cubic yards of landfill space; plastic 
     saves 30 cubic yards of landfill space; glass prevents 7.5 
     pounds of air pollutants from being released and saves 2 
     cubic yards of landfill space; and steel saves 4 cubic yards 
     of landfill space.
       (5) A national investment in the reuse and recycling 
     industries is needed to preserve and expand America's reuse 
     and recycling infrastructure.

     SEC. 3. CREDIT FOR REUSE AND RECYCLING PROPERTY.

       (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. 45N. CREDIT FOR QUALIFIED REUSE AND RECYCLING 
                   PROPERTY.

       ``(a) Allowance of Credit.--For purposes of section 38, the 
     qualified reuse and recycling property credit determined 
     under this section for the taxable year is an amount equal to 
     15 percent of the amount paid or incurred during the taxable 
     year for the cost of qualified reuse and recycling property 
     placed in service or leased by the taxpayer.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified reuse and recycling property.--
       ``(A) In general.--The term `qualified reuse and recycling 
     property' means any machinery and equipment (not including 
     buildings or real estate), along with all appurtenances 
     thereto, including software necessary to operate such 
     equipment, which is used exclusively to collect, distribute, 
     or recycle qualified reuse and recyclable materials.
       ``(B) Exclusion.--Such term does not include rolling stock 
     or other equipment used to transport reuse and recyclable 
     materials.
       ``(2) Qualified reuse and recyclable materials.--
       ``(A) In general.--The term `qualified reuse and recyclable 
     materials' means scrap plastic, scrap textiles, scrap rubber, 
     scrap packaging, recovered fiber, scrap ferrous and 
     nonferrous metals, or electronic waste generated by an 
     individual or business.
       ``(B) Electronic waste.--For purposes of subparagraph (A), 
     the term `electronic waste' means--
       ``(i) any cathode ray tube, flat panel screen, or similar 
     video display device with a screen size greater than 4 inches 
     measured diagonally, or
       ``(ii) any central processing unit.
       ``(3) Recycling or recycle.--The term `recycling' or 
     `recycle' means that process (including sorting) by which 
     worn or superfluous materials are manufactured or processed 
     into specification grade commodities that are suitable for 
     use as a replacement or substitute for virgin materials in 
     manufacturing tangible consumer and commercial products, 
     including packaging.
       ``(c) Amount Paid or Incurred.--For purposes of this 
     section--
       ``(1) In general.--The term `amount paid or incurred' 
     includes installation costs.
       ``(2) Lease payments.--In the case of the leasing of 
     qualified reuse and recycling property by the taxpayer, the 
     term `amount paid or incurred' means the amount of the lease 
     payments due to be paid during the term of the lease 
     occurring during the taxable year other than such portion of 
     such lease payments attributable to interest, insurance, and 
     taxes.
       ``(3) Grants, etc. excluded.--The term `amount paid or 
     incurred' shall not include any amount to the extent such 
     amount is funded by any grant, contract, or otherwise by 
     another person (or any governmental entity).
       ``(d) Election to Have Section Not Apply.--A taxpayer may 
     elect for any taxable year to have this section not apply 
     with respect to any qualified recycling property specified by 
     the taxpayer.
       ``(e) Other Tax Deductions and Credits Available for 
     Portion of Cost Not Taken Into Account for Credit Under This 
     Section.--No deduction or other credit under this chapter 
     shall be allowed with respect to the amount of the credit 
     determined under this section.
       ``(f) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section for any amount paid or 
     incurred with respect to any property, the increase in the 
     basis of such property which would (but for this subsection) 
     result from such expenditure shall be reduced by the amount 
     of the credit so allowed.''.
       (b) Conforming Amendments.--
       (1) Credit made part of general business credit.--
     Subsection (b) of section 38 of the Internal Revenue Code of 
     1986 is amended by striking ``and'' at the end of paragraph 
     (29), by striking the period at the end of paragraph (30) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(31) the qualified reuse and recycling property credit 
     determined under section 45N(a).''.
       (2) Subsection (a) of section 1016 of such Code is amended 
     by striking ``and'' at the end of paragraph (36), by striking 
     the period at the end of paragraph (37) and inserting ``; 
     and'', and by adding at the end the following new paragraph:
       ``(38) to the extent provided in section 45N(f), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 45N.''.
       (3) Section 6501(m) of such Code is amended by inserting 
     ``45N(d),'' after ``45C(d)(4),''.
       (4) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 45M the 
     following new item:

``Sec. 45N. Credit for qualified reuse and recycling property.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 4. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN REUSE AND 
                   RECYCLING PROPERTY.

       (a) In General.--Section 168 of the Internal Revenue Code 
     of 1986 (relating to accelerated cost recovery system) is 
     amended by adding at the end the following new subsection:
       ``(l) Special Allowance for Certain Reuse and Recycling 
     Property.--
       ``(1) In general.--In the case of any qualified reuse and 
     recycling property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of the qualified reuse and recycling property, 
     and
       ``(B) the adjusted basis of the qualified reuse and 
     recycling property shall be reduced by the amount of such 
     deduction before computing the amount otherwise allowable as 
     a depreciation deduction under this chapter for such taxable 
     year and any subsequent taxable year.
       ``(2) Qualified reuse and recycling property.--For purposes 
     of this subsection--
       ``(A) In general.--The term `qualified reuse and recycling 
     property' means any qualified reuse and recycling property 
     (as defined in section 45N(b)(1))--
       ``(i) to which this section applies,
       ``(ii) which has a useful life of at least 5 years,
       ``(iii) the original use of which commences with the 
     taxpayer after December 31, 2005,
       ``(iv) which is--

       ``(I) acquired by purchase (as defined in section 
     179(d)(2)) by an eligible taxpayer

[[Page S7516]]

     after December 31, 2005, but only if no written binding 
     contract for the acquisition was in effect before December 
     31, 2005, or
       ``(II) acquired by the eligible taxpayer pursuant to a 
     written binding contract which was entered into after 
     December 31, 2005.

       ``(B) Exceptions.--
       ``(i) Alternative depreciation property.--The term 
     `qualified property' shall not include any property to which 
     the alternative depreciation system under subsection (g) 
     applies, determined without regard to paragraph (7) of 
     subsection (g) (relating to election to have system apply).
       ``(ii) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(C) Special rules.--
       ``(i) Self-constructed property.--In the case of an 
     eligible taxpayer manufacturing, constructing, or producing 
     property for the eligible taxpayer's own use, the 
     requirements of clause (iv) of subparagraph (A) shall be 
     treated as met if the eligible taxpayer begins manufacturing, 
     constructing, or producing the property after December 31, 
     2005.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(iii), if property--

       ``(I) is originally placed in service after December 31, 
     2005, by a person, and
       ``(II) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service,

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in subclause (II).
       ``(D) Deduction allowed in computing minimum tax.--For 
     purposes of determining alternative minimum taxable income 
     under section 55, the deduction under subsection (a) for 
     qualified reuse and recycling property shall be determined 
     under this section without regard to any adjustment under 
     section 56.
       ``(3) Eligible taxpayer.--For purposes of this subsection, 
     the term `eligible taxpayer' means, with respect to any 
     qualified reuse and recycling property, any taxpayer which 
     elects not to have section 45N apply with respect to such 
     property.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2005.

     SEC. 5. TAX-EXEMPT BOND FINANCING OF RECYCLING FACILITIES.

       (a) In General.--Section 142 of the Internal Revenue Code 
     of 1986 (defining exempt facility bond) is amended by adding 
     at the end the following new subsection:
       ``(n) Solid Waste Disposal Facilities.--
       ``(1) In general.--For purposes of subsection (a)(6) only, 
     the term `solid waste disposal facilities' means any facility 
     used to perform a solid waste disposal function.
       ``(2) Solid waste disposal function.--
       ``(A) In general.--For purposes of this subsection only, 
     the term `solid waste disposal function' means the 
     collection, separation, sorting, storage, treatment, 
     disassembly, handling, or processing of solid waste in any 
     manner designed to dispose of the solid waste, including 
     processing the solid waste into a useful energy source or 
     product.
       ``(B) Extent of function.--For purposes of this subsection 
     only, the solid waste disposal function ends at the later 
     of--
       ``(i) the point of final disposal of the solid waste,
       ``(ii) immediately after the solid waste is incinerated to 
     produce energy, or
       ``(iii) the point at which the solid waste has been 
     converted into a material or product that can be sold in the 
     same manner as comparable material or product produced from 
     virgin material.
       ``(C) Functionally related and subordinate facilities.--For 
     purposes of this subsection only, in the case of a facility 
     used to perform both a solid waste disposal function and 
     another function--
       ``(i) the costs of the facility allocable to the solid 
     waste disposal function are determined using any reasonable 
     method based upon facts and circumstances, and
       ``(ii) if during the period that bonds issued as part of an 
     issue described in subsection (a)(6) are outstanding with 
     respect to any facility at least 65 percent of the materials 
     processed in such facility are solid waste materials as 
     measured by weight or volume, then all of the costs of the 
     property used to perform such process are allocable to a 
     solid waste disposal function.
       ``(3) Solid waste.--For purposes of this subsection only--
       ``(A) In general.--The term `solid waste' means garbage, 
     refuse, or discarded solid materials, including waste 
     materials resulting from industrial, commercial, 
     agricultural, or community activities.
       ``(B) Garbage, refuse or discarded solid materials.--For 
     purposes of subparagraph (A), the term `garbage, refuse, or 
     discarded solid materials' means materials that are useless, 
     unused, unwanted, or discarded.
       ``(C) Exclusion.--The term `solid waste' does not include 
     materials in domestic sewage, pollutants in industrial or 
     other water resources, or other liquid or gaseous waste 
     materials.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued before, on, or after the date of 
     the enactment of this Act.
                                  ____

     Hon. Jim Jeffords,
     U.S. Senate,
     Washington, DC.
       Dear Senator Jeffords: On behalf of the undersigned 
     recycling industry organizations, companies and other groups 
     that support recycling efforts, we write to support the 
     ``Recycling Investment Saves Energy'' (RISE) bill. An earlier 
     version of RISE was incorporated as Section 1545 of the 
     Senate Energy Bill last year, but did not survive conference 
     committee. RISE would save energy and improve the quantity 
     and quality of recycled materials by allowing companies to 
     claim either a tax credit or accelerated depreciation for the 
     purchase of equipment used to collect, distribute or recycle 
     a variety of commodities.
       Your support will be greatly appreciated by businesses that 
     are facing serious problems trying to secure a steady stream 
     of quality recycled materials including glass, paper, 
     plastic, steel and aluminum. This provision will create jobs, 
     increase productivity and conserve energy by encouraging 
     companies to invest in state-of-the-art recycling 
     infrastructure. With recycling levels for individual 
     materials either stalled or declining, we need to act now to 
     improve usable recovered material and to enhance the quality 
     of materials that are collected through curbside and other 
     recycling programs.
       Every industry that uses recycled materials as a feedstock 
     realizes significant energy savings compared to production 
     using virgin materials. By providing tax incentives to 
     increase the quality and quantity of usable recycled 
     materials available, the RISE provision will enable these 
     industry segments to significantly reduce energy consumption.
       Recycling associations and industries support this bill.
           Sincerely,
         American Beverage Association; American Forest & Paper 
           Association; Association of Postconsumer Plastic 
           Recyclers; Carolina Recycling Association; Glass 
           Packaging Institute; National Association for PET 
           Container Resources (NAPCOR); National Recycling 
           Coalition; National Solid Wastes Management 
           Association; Paper Recycling Coalition; Solid Waste 
           Association of North America; Steel Recycling 
           Institute; U.S. Conference of Mayors/Municipal Waste 
           Management Association; Waste Technology Equipment 
           Association (WASTEC); Ball Corporation; Envision 
           Plastics; EvCo Research, LLC; Florikan ESA Corporation; 
           L B. Schmidt and Associates; Mid America Recycling 
           Companies; MSS, Inc; Novelis, Inc (formerly Alcan); 
           NRT, Inc.; O-I (formerly Owens-Illinois); Orwak Group; 
           Reynolds Recycling; Saint-Gobain Containers, Inc; 
           Strategic Materials, Inc; The Coca Cola Company; TiTech 
           Visionsort; Tomra; UltrePET; United Resource Recovery 
           Corporation; Van Dyke Bailer Corp/Lubo USA; wTe 
           Corporation; Yemm and Hart, Ltd.
                                 ______