Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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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 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.

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