To amend the Internal Revenue Code of 1986 to allow for an energy efficient appliance credit.

March 18, 2003

Mr. NUSSLE (for himself, Mr. TANNER, Mr. LEACH, Mr. KING of Iowa, Mr. LATHAM, Mr. BOSWELL, Mr. GILLMOR, Mr. OXLEY, Mr. ROGERS of Michigan, Mr. SULLIVAN, Mr. LEVIN, and Mr. MARIO DIAZ-BALART of Florida) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow for an energy efficient appliance credit.

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

SECTION 1. 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.

`(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.

END