[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5348-5351]
[From the U.S. Government Publishing Office, www.gpo.gov]




  NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001--Continued


                Amendment No. 3286 To Amendment No. 2917

              (Purpose: To provide energy tax incentives)

  The PRESIDING OFFICER. Under the previous order, the pending 
amendments are set aside.
  The clerk will report the Baucus amendment.
  The legislative clerk read as follows:

       The Senator from Montana [Mr. Baucus], for himself, Mr. 
     Grassley, Mr. Rockefeller, Mr. Hatch, Mr. Thomas, Mr. Hagel, 
     and Mrs. Carnahan, proposes an amendment numbered 3286.

  (The text of the amendment is printed in the Record of Monday, April 
22, under ``Text of Amendments.'')

[[Page 5349]]


  Mr. BAUCUS. Madam President, this amendment consists of the energy 
tax incentives reported by the Finance Committee.
  Let me explain why this amendment is necessary.
  The short term energy crisis has ended. But the long term problem has 
not.
  Earlier this year, at a House hearing, Energy Secretary Abraham 
summed up the energy situation. He said that ``Over the last 12 months 
we have seen energy supply shortages, natural gas and gasoline price 
spikes in the Midwest and California, and terrorist attacks within our 
borders.''
  He was right on target. His words emphasize that energy independence 
matters. It matters to our economy, to our national security, and to 
the well-being of average American families.
  Take one example. Gas prices.
  Remember last summer. The price was $1.70 per gallon. A record high.
  Just 6 weeks ago, the national average retail price for gasoline was 
$1.14 per gallon.
  Since then, gas prices have climbed again. Today, the national 
average price is back up to $1.42 per gallon.
  Over the past several years, prices have been extremely volatile.
  This volatility has had a sharp economic effect, disrupting 
businesses and lives.
  Here is why. The difference between $1.14 per gallon and $1.70 per 
gallon is 56 cents per gallon.
  The average household uses about 1,100 gallons of automobile gasoline 
a year. All else being equal, that amounts to a swing in household fuel 
expenditures of more than $600, just for transportation.
  That is like a $600 tax increase, on every American family.
  For a small business, the economic impact of these price swings can 
be even worse.
  And the situation is not likely to improve anytime soon.
  Between now and 2020, worldwide demand for oil is projected to 
increase from 76 million barrels a day to nearly 120 million barrels 
per day. That's an increase of almost 60 percent.
  Clearly, the more we depend on only one source of energy, the more we 
are subject to price fluctuations.
  With that background, let's turn to the legislation.
  The chairman of the Energy Committee, Senator Bingaman, has designed 
the underlying energy legislation that is the basis for our energy 
policy.
  Now why should tax incentives be part of the bill?
  The use of tax incentives to promote energy development is not some 
radical new idea. From the time of the enactment of the income tax in 
1916, we have had tax incentives for the production of oil and gas.
  In 1978, we went further. We created the first tax incentives for 
renewable fuels and for conservation.
  These incentives were effective. Last July, at a Finance Committee 
hearing, economist Kevin Hassett told the committee that the tax 
credits ``were fairly successful at stimulating conservation 
activity.'' More specifically, he found that ``a 10 percentage point 
credit would likely increase the probability of investing [in 
conservation] by about 24 percent.''
  The Finance Committee amendment takes this experience to heart. We 
use targeted tax incentives to promote investments that are critical to 
energy independence.
  We do this in three important ways. First, we create incentives for 
new production, especially production from important renewable sources.
  Second, we create incentives for the development of new technology.
  Third, we create incentives for energy conservation.
  Let me explain each in turn.
  First, new production. Regardless of the source, total U.S. energy 
production directly affects our dependence on foreign sources of 
energy.
  If U.S. production rises, while consumption remains constant or 
falls, we become less reliant on foreign energy. Unfortunately, the 
opposite is expected to occur.
  Through 2020, energy consumption is projected to increase more 
rapidly than domestic production. If that happens, our reliance on 
foreign energy--shown on the chart as ``net imports'' of energy--will 
increase accordingly.
  Here is how we address the problem.
  We extend the wind and biomass credit for an additional 5 years. We 
also qualify many more sources as renewable fuel sources, including 
geothermal, solar, plant life, and other sources.
  We create incentives for clean coal. If you retrofit to use currently 
available clean coal technology, you are eligible for a production tax 
credit. If you use advanced technology, you're eligible for both an 
investment credit and a production credit.
  We create a new credit for oil and gas production from marginal 
wells, and a limited tax break for geological and geophysical 
expenditures.
  Each of these tax incentives will encourage more energy production, 
from a variety of renewable and traditional sources.
  Let me turn to the second key element of the bill. New technology.
  Think big. Thing new. Think way into the future.
  New technology can bring both energy independence and a cleaner 
environment.
  Before long, our cars and trucks will run on electricity, new and 
alternative fuels, and fuel cells. And maybe someday, when we get home 
from work, we'll plug our fuel cell automobiles in to generate the 
electricity for our homes.
  But, we need to make investments in these technologies today. History 
tells us it can take a very long time to deploy new technology. The 
first commercial telephone service was offered in 1876, but it took 
more than 90 years to make the service available to 90 percent of 
residences in the United States.
  It would be a shame if it takes half that time to bring these 
promising new technology vehicles to market.
  So, here is what we do.
  We create tax credits for the purchase of new technology vehicles. 
These vehicles of the future. They'll be powered by alternative fuels, 
by fuel cells, and by electricity.
  In the near term, we provide tax credits for the purchase of hybrid 
vehicles, which run partly on electricity and partly on gasoline.
  What is so great about these vehicles?
  For starters, fuel cell and electric vehicles are zero-emissions 
vehicles. In the meantime, hybrid and alternative fuel vehicles can 
speed us toward the development of these zero emissions vehicles.
  On top of that, when it comes to emissions and fuel economy, these 
vehicles have significant advantages compared to traditional fuel 
vehicles.
  To make sure of this, we provide tax credits only to vehicles that 
meet very stringent emissions standards.
  There's a related point. New vehicles require new fuels. And it takes 
new infrastructure to deliver these fuels. Therefore, we provide tax 
incentives for the installation of new refueling station technology and 
for the purchase of alternative fuels.
  All told, these investments in new technology will transform 
automotive transportation in the United States, so that it is cleaner, 
more fuel efficient, and less reliant on imported oil.
  The third key element of the bill is conservation.
  Conservation is the only way to solve the problem of excessive 
dependence on foreign imports. When we increase conservation, it has 
the same effect as if we reduce consumption. We see that this will 
lessen our reliance on foreign sources of energy.
  Conservation also will have positive environmental effects. Namely, 
cleaner aid.
  Perhaps most important, tax investments in energy conservation will 
reduce monthly energy bills.
  How do we accomplish this?
  We create incentives for people to get more complete energy 
consumption information with devices like the smart meter, which allows 
people to track energy use in their homes.
  We create incentives for people to buy energy efficient 
refrigerators, air conditioners, and other appliances.

[[Page 5350]]

  And we encourage energy efficient construction, to make homes and 
commercial buildings more energy efficient.
  Those are the three key elements of the bill. New production, new 
technology, and conservation.
  We also address several other issues. Perhaps the most important is 
electric utility restructuring. This is important for investor owned 
utilities, municipal utilities, and cooperatives. And, of course, for 
consumers.
  But, there is a lot of uncertainty. We all remember the rolling 
blackouts in California. Many other States also have been affected. In 
Montana, the legislature has had to delay the implementation of a law 
calling for retail choice, because the State does not yet have a 
competitive market in place.
  There is similar uncertainty in other states and nationwide.
  To my mind, we don't yet know what a restructured electric industry 
will look like.
  In light of this, the amendment tells the Treasury Department to 
report back to us by the end of the year on restructuring and the tax 
issues it raises. The study will help us make the right decisions to 
address future issues raised by restructuring.
  Senators Bingaman and Murkowski may wish to go further, as part of 
this bill, and Senator Grassley and I are discussing options with them 
now.
  At the same time, there are some current problems, that we do know 
how to address.
  The amendment does so with respect to nuclear decommissioning funds 
and the treatment of cooperatives.
  Before closing, I'd like to acknowledge all of those who helped write 
the Finance Committee bill.
  The President's budget called for tax incentives for renewable 
resources, residential solar systems, alternative fuel vehicles, and 
combined head and power systems.
  Those are included.
  Our committee members have also made very important contributions.
  Our ranking member, Senator Grassley, has worked hard to make this a 
balanced, bipartisan bill.
  Senator Hatch and others were the principal authors of the 
alternative fuels provisions.
  Senator Rockefeller was the principal author of the clean coal 
provisions. Other Members were responsible for other important 
provisions.
  I also appreciate the help of the leaders of the Energy Committee, 
Senators Bingaman and Murkowski. We are lucky that they also are 
members of the Finance Committee, and we benefited from their expertise 
and dedication.
  In other words, this has been a cooperative effort, all around.
  Pulling this together, we have a package of tax incentives that are 
important in their own right and that will complement the broader 
energy bill.
  In short, this amendment is good environmental policy and good energy 
policy.
  Don't get me wrong. This bill is not a panacea. It is a work in 
progress. It is just a step. But it is a good step. A step in the right 
direction.
  I thank members and urge adoption of the amendment.
  The PRESIDING OFFICER. Under the previous order, the amendment is 
agreed to and the motion to reconsider is laid upon the table.
  The amendment (No. 3286) was agreed to.
  The PRESIDING OFFICER. The Senator from Alaska is recognized.
  Mr. MURKOWSKI. Madam President, may I ask the Senator from Montana, 
my understanding is that there is going to be a managers' amendment out 
of the Finance Committee on the energy tax aspect.
  Mr. BAUCUS. The Senator is correct. Given the posture we are in, I 
assume procedurally that is available at this time. But that is an 
assumption. I am not positive. That is an assumption. If procedurally 
that is available, the Senator is correct.
  Mr. MURKOWSKI. Well, I would like to have some assurance that we will 
have an opportunity for input in the managers' amendment before I would 
agree to a unanimous consent which I assume will be forthcoming. The 
Senator from Montana has not proposed a unanimous consent, he has just 
proposed this; is that correct?
  Mr. BAUCUS. In answer to the Senator, the Finance Committee tax 
incentives are now part of the energy bill. The Senate has adopted 
them. They are in the bill now. I am not at this point attempting to 
seek a UC request.
  Mr. MURKOWSKI. Well, it would be my hope we could work to----
  Mr. BAUCUS. I understand. I have been working with the Senator and 
with the distinguished chairman of the committee to try to figure out 
what appropriately could be put in that package.
  Mr. MURKOWSKI. It would appear, Madam President, it would be a 
combination of either specifically identified amendments that could be 
agreed upon or we would have to address the issue of germaneness. If I 
have the assurance of the chairman of the Finance Committee that he is 
willing to work with us on that aspect, I would be satisfied.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Madam President, might I inquire of the Senator from 
Montana, it is the Senator's intention that the Finance Committee 
version--not a modified version of that--be offered for inclusion in 
the underlying bill; is that correct?
  Mr. BAUCUS. I say to my good friend, the Senate has already adopted 
the measure that passed the Finance Committee. That is now an adopted 
amendment and now part of the energy bill.
  Mr. KYL. The reason I ask is, there was some confusion at the desk as 
to which version the Senator was offering.
  Mr. BAUCUS. That is correct.
  Mr. KYL. Since there was not an amendment pending at the desk.
  Mr. BAUCUS. The two versions at the desk were identical.
  Mr. KYL. I thank the Senator.
  Mr. MURKOWSKI. I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  The majority leader.
  Mr. DASCHLE. Madam President, I want to just announce that we will be 
offering a unanimous consent request shortly that would propose that we 
limit the number of amendments to be taken post cloture to a certain 
number. I believe we are going to suggest seven on a side. But let me 
say, with or without that unanimous consent request, post cloture, 
Senators would still be eligible to offer amendments having to do with 
certain tax provisions or any other provisions of the bill.
  What we are simply trying to do is to find a way, at long last, to 
bring this bill to closure. I remind my colleagues that I laid this 
bill down on February 15. It is now April 23, and the only way we are 
going to bring this to conclusion so that we can move to other 
legislation is to either get this unanimous consent request that 
Senator Lott and I are about to propound or cloture.
  So I ask my colleagues for their cooperation in this regard. And 
failing the unanimous consent, as my colleagues may note, I have moved 
the cloture vote to 2:30 this afternoon. So one or the other will 
occur. Either we will get a UC or we will have a vote on cloture at 
2:30 this afternoon.
  I yield the floor.
  The PRESIDING OFFICER. The Republican leader.
  Mr. LOTT. Madam President, I appreciate the work we have been able to 
do to try to get a reasonable agreement as to how to proceed on the 
death tax matter. I think the agreement just entered is fair to all 
sides.
  Also, I think it is very important that we have the tax section as a 
part of our energy package, when it is completed, because many of the 
important incentives to get more production and to find alternative 
fuels and develop new technologies--whether it is hybrid cells or 
whatever it may be--are in that section. We have almost $15 billion 
that came out of the Finance Committee unanimously, as I recall. So 
that needed to be included. The fact that it is included is a very 
important recognition that work has been done by Senator Grassley, 
Senator Baucus, and others.

[[Page 5351]]

  With regard to the unanimous consent request we are going to propound 
to limit the number of amendments and get to passage by a time certain, 
I also think that is the right thing to do. There may be many 
amendments that are out there, but we could not get an agreed-to 
number. I know we can accept a limited number of five or seven, 
whatever that number may be. Also, we are prepared to make a commitment 
to get final passage on this legislation no later than Thursday at 6 
o'clock. I think that is the responsible thing to do. I support that. 
And Senator Daschle and I have been working for the last 24 hours to 
try to come to that agreement.
  It is time we bring consideration of this bill to a conclusion. We 
have had a full debate, lots of amendments. I am sure nobody is 
perfectly happy with it, but to have expended over 5 weeks and then not 
be able to bring this to conclusion, would be disastrous for our 
country, and the Senate would look very bad.
  So I hope we come to an agreement on how to get a vote on this 
legislation, complete action, and send it to conference for final 
activity.
  With that, I yield the floor, Madam President, and suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The absence of a quorum has been suggested. 
The clerk will call the roll.
  The senior assistant bill clerk proceeded to call the roll.
  Mr. DASCHLE. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mrs. Clinton). Without objection, it is so 
ordered.
  Mr. DASCHLE. Madam President, yesterday was the 1:30 p.m. filing 
deadline. The Baucus-Grassley amendment was not part of the substitute 
then so people couldn't draft amendments to that section. To be fair, I 
ask unanimous consent that Members have until 1 p.m. tomorrow to file 
first-degree amendments to the Baucus-Grassley title and that Members 
have until 10 a.m. Thursday to file possible second-degree amendments 
to those amendments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. I thank the Chair and yield the floor. I suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Madam President, I have noted on a couple of occasions 
this morning that it was our intention, in close consultation with the 
distinguished Republican leader, to see if we might find a way to bring 
closure to the bill, either with or without cloture. But I ask 
unanimous consent that immediately following cloture, notwithstanding 
the cloture vote, and notwithstanding the provisions of rule XXII, the 
Senate resume consideration of the energy bill with the opportunity of 
each leader or his designee to offer seven amendments which are either 
energy or tax related.
  The PRESIDING OFFICER. Is there objection?
  The Republican leader.
  Mr. LOTT. Reserving the right to object, and I will not object, I 
want to say again, this is the right way to proceed. We have been on 
this legislation for 5 weeks. We have had a full debate. Senators on 
both sides of the aisle have had opportunities to offer their 
amendments. This will give us seven more opportunities on each side. We 
will have to get a limit. We will have to have a process, which will 
not be easy for either one of us. But we have discussed this in our 
caucus. We are prepared to accept the limitation. This would also be 
the process that would get us to a conclusion by, I believe, Thursday 
or Friday, at the latest, of this week.
  I support this initiative, and it is a bipartisan effort. I thank 
Senator Daschle for making the request. I withdraw my reservation.
  The PRESIDING OFFICER. Is there objection?
  The Senator from California.
  Mrs. FEINSTEIN. Madam President, reserving the right to object, I 
would like to ask the majority leader if three amendments would be 
considered among his amendments. The first would be Senator Schumer's 
amendment to remove the ethanol mandate, the renewable fuels mandate 
from the bill; second would be Senator Boxer's amendment to remove the 
safe harbor provisions relating to liability; and the third would be my 
amendment to remove PADDs I and PADDs V from the renewable fuels 
requirement.
  Mr. DASCHLE. Madam President, I certainly want to work with the 
distinguished Senator from California to accommodate her and other 
Senators who wish to be heard on the ethanol question. I know this is a 
very important matter for them. At this point, I would not be able to 
confirm that three of those seven amendments would be related to 
ethanol, although I would not want to assume that they would not be 
part of it.
  I think we would want to negotiate with all of our colleagues to 
accommodate as many Senators with an interest in offering amendments as 
possible. Keep in mind, as I said earlier, this is in addition to, 
cloture notwithstanding. Those amendments that are eligible to be 
offered postcloture, we anticipate they would still be offered. It 
could be, and I would guess most likely would be, the case that one or 
more of those amendments would be able to be offered without the 
inclusion in this unanimous consent request.
  Mrs. FEINSTEIN. In response to the majority leader, if I may, Madam 
President, we do not know at this time whether they would all be 
germane under the bill. Based on the fact that the majority leader is 
only reserving seven spaces and will not permit three spaces for this, 
I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. DASCHLE. I yield the floor. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. STEVENS. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Alaska.
  Mr. STEVENS. Madam President, I had a commitment to offer an 
amendment to the energy bill dealing with the right of the Eskimo 
people of Alaska to proceed with oil and gas development on their 
lands. This weekend I conferred with them and their representatives, 
and they would prefer not to raise that issue at this time and to allow 
the process to go forward in terms of the energy bill and in terms of 
their rights which they may wish to raise at another time but do not 
wish to have me raise at this time.
  Under the circumstances, I want the manager of the bill to know we 
will not offer the amendment that would permit drilling on the lands in 
the Kaktovik area that are owned by the Kaktovik Eskimos, and the 
subsurface rights owned by the North Slope Borough. I believe the 
decision is a right one, and I am going to honor their request not to 
introduce the amendment at this time.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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