The Resource Efficient Appliance Incentives Act would provide a tax credit to manufacturers of super energy-efficient appliances produced between 2002 and 2007.
"Our initiative stems from an important agreement on new energy standards reached last year by the Department of Energy, environmentalists and the appliance industry," said Grassley, who is chairman of the tax-writing Senate Finance Committee. "This tax credit would help manufacturers exceed those standards by encouraging increased production and sale of appliances that use less energy. If enacted, the initiative will lead to a cleaner environment and lower utility bills for consumers."
Under the bill, manufacturers would be eligible to claim a credit of either $50 or $100, depending on the efficiency level, for each super-efficient washing machine or refrigerator made between 2002 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.
"The increased production and sale of ultra energy-efficient appliances is good news for Iowa," Grassley said. "It is estimated that the legislation would result in the production of more than one million super energy-efficient washers and refrigerators by appliance manufacturers in Iowa over the next five years. I also expect Iowa families to save $11 million in utility bills, and 9 billion gallons of water over the life of the appliances. That's enough to supply drinking water for the entire state for 30 years."
Iowa is one of the largest concentration areas of appliance manufacturing in the country. Appliance manufacturers Amana, Maytag and Frigidaire all have operations in Iowa and the state's appliance industry employs approximately 10,000 people.
Grassley has been a strong advocate for encouraging the production of energy-efficient appliances. He is an original co-sponsor of the bill introduced this week, and he sponsored the same measure in the Senate last year. The Association of Home Appliance Manufacturers will honor Grassley this week with their "Legislator of the Year" award for his work on issues important to the industry.