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

Summary: Resource Efficient Appliance Incentives Act of 2005 - Amends the Internal Revenue Code to allow a business tax credit for the production of certain household appliances (clothes washers, dishwashers, and refrigerators) with a specified energy efficiency rating. Imposes an aggregate limitation of $75 million on such credit for all taxable years ($35 million for certain other appliances), and an annual limitation based on taxpayer gross receipts (two percent of taxpayer average annual gross receipts for the three previous taxable years).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Resource Efficient Appliance 
Incentives Act of 2005.''.

SEC. 2. 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. 45J. ENERGY EFFICIENT APPLIANCE CREDIT.

    ``(a) General Rule.--
            ``(1) In general.--For purposes of section 38, the energy 
        efficient appliance credit determined under this section for 
        the taxable year is an amount equal to the sum of the credit 
        amounts determined for each type of qualified energy efficient 
        appliance.
            ``(2) Credit amounts.--The credit amount determined for a 
        type of qualified energy efficient appliance is the sum of--
                    ``(A) the applicable amount determined under 
                subsection (b) with respect to a qualified energy 
                efficient appliance, multiplied by
                    ``(B) the number of such appliances produced by the 
                taxpayer in the United States during the calendar year 
                ending with or within the taxable year.
    ``(b) Applicable Amount; Eligible Production.--For purposes of 
subsection (a)--
            ``(1) Applicable amount.--
                    ``(A) In general.--The applicable amount determined 
                under this subsection is the amount determined under 
                the following table:


 
``Qualified Energy Efficient  Produced in calendar year--   Applicable
          Appliance                                         amount is--
------------------------------------------------------------------------
Clothes washer with at least  2005                                   $50
 1.42 MEF.
Clothes washer with MEF at    2005, 2006, or 2007                   $100
 least Energy Star level in
 effect in 2007.
Clothes washer with MEF at    2008, 2009, or 2010                   $150
 least Energy Star level in
 effect in 2010.
Dishwasher with EF at least   2006, 2007, 2008, or 2009              $75
 Energy Star level in effect
 in 2007.
Refrigerator consuming at     2005 or 2006                          $100
 least 15 percent less
 kilowatt hours per year
 than 2001 energy
 conservation standard.
Refrigerator consuming at     2005, 2006, 2007, 2008, or            $150
 least 20 percent less         2009
 kilowatt hours per year
 than 2001 energy
 conservation standard.
Refrigerator consuming at     2010                                  $150
 least 25 percent less
 kilowatt hours per year
 than 2001 energy
 conservation standard.
------------------------------------------------------------------------

                    ``(B) Other appliances.--In the case of any 
                appliance not described in the table in subparagraph 
                (A), the applicable amount shall be zero.
            ``(2) Eligible production.--
                    ``(A) In general.--The eligible production in a 
                calendar year with respect to each type of energy 
                efficient appliance described in the table in paragraph 
                (1) is the excess of--
                            ``(i) the number of appliances of such type 
                        which meet the energy efficiency described for 
                        such type in the table in paragraph (1) and 
                        which are produced by the taxpayer during such 
                        calendar year, over
                            ``(ii) the average number of appliances of 
                        such type which meet the energy efficiency 
                        described for such type in the table in 
                        paragraph (1) and which were produced by the 
                        taxpayer (or any predecessor) during the 
                        preceding 3-calendar year period.
                    ``(B) Special rule for 2005 production.--For 
                purposes of determining eligible production for 
                calendar year 2005--
                            ``(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 2005 after the date of 
                                enactment of this section, bears to
                                    ``(II) 365.
    ``(c) Limitations.--
            ``(1) Aggregate credit amount allowed.--The aggregate 
        amount of credit allowed under subsection (a) with respect to a 
        taxpayer for all taxable years shall not exceed $75,000,000, 
        reduced by the amount of the credit allowed under subsection 
        (a) to the taxpayer (or any predecessor) for any prior taxable 
        year.
            ``(2) Amount allowed for certain appliances.--
                    ``(A) In general.--In the case of appliances 
                described in subparagraph (B), the aggregate amount of 
                the credit allowed under subsection (a) with respect to 
                a taxpayer for all taxable years shall not exceed 
                $35,000,000, reduced by the amount of the credit 
                allowed under subsection (a) to the taxpayer (or any 
                predecessor) for any prior taxable year with respect to 
                such appliances.
                    ``(B) Appliances described.--The appliances 
                described in this subparagraph are--
                            ``(i) clothes washers with at least a 1.42 
                        MEF, as described in the table in subsection 
                        (b)(1),
                            ``(ii) refrigerators which consume at least 
                        15 percent less kilowatt hours per year than 
                        applicable energy conservation standards, as 
                        described in such table, and
                            ``(iii) dishwashers described in such 
                        table.
            ``(3) 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.
            ``(4) 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 an appliance 
        described in the table in subsection (b)(1).
            ``(2) Clothes washer.--The term `clothes washer' means a 
        residential model clothes washer, including a residential style 
        coin operated washer.
            ``(3) Refrigerator.--The term `refrigerator' means a 
        residential model automatic defrost refrigerator-freezer which 
        has an internal volume of at least 16.5 cubic feet.
            ``(4) Dishwasher.--The term `dishwasher' means a 
        residential dishwasher subject to the energy conservation 
        standards established by the Department of Energy.
            ``(5) MEF.--The term `MEF' means the modified energy 
        factor, as determined by the Secretary of Energy.
            ``(6) Energy factor.--The term `EF' means the energy factor 
        established by the Department of Energy for compliance with the 
        Federal energy conservation standards.
            ``(7) Produced.--The term `produced' includes manufactured.
            ``(8) 2001 energy conservation standard.--The term `2001 
        energy conservation standard' means the energy conservation 
        standards promulgated by the Department of Energy and effective 
        July 1, 2001.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) In general.--Rules similar to the rules of 
        subsections (c), (d), and (e) of section 52 shall apply.
            ``(2) Controlled group.--
                    ``(A) In general.--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 a single producer.
                    ``(B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
                (a) and (b) of section 52 to this section, section 1563 
                shall be applied without regard to subsection (b)(2)(C) 
                thereof.
            ``(3) Verification.--No amount shall be allowed as a credit 
        under subsection (a) with respect to which the the taxpayer has 
        not submitted such information or certification as the 
        Secretary, in consultation with the Secretary of Energy, 
        determines necessary.''.
    (b) 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 (18), by striking the period 
at the end of paragraph (19) and inserting ``, plus'', and by adding at 
the end the following new paragraph:
            ``(20) the energy efficient appliance credit determined 
        under section 45J(a).''.
    (c) 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. 45J. Energy efficient appliance credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to appliances produced after December 31, 2004, in taxable years 
ending after such date.