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Stimulus 'flaw' could wind up hurting AGC

Post Time:Mar 17,2009Classify:Company NewsView:473

A few words included in one paragraph of the federal government’s massive stimulus package could spell lost business for AGC Flat Glass — unless Northeast Tennessee’s congressman is successful in his bid to amend the law.

U.S. Rep. Phil Roe, R-1st District, plans to introduce a bill that would strike a paragraph from the tax credit section of the stimulus plan.

The stimulus legislation gives homeowners making energy-efficient improvements a tax credit of 30 percent of the cost of the project, up to a total of $1,500.

During the legislative debate over the stimulus issue, AGC Flat Glass — which operates manufacturing plants in Kingsport and Church Hill — was in favor of the tax credit, thinking the measure would help boost its business by encouraging homeowners to purchase replacement windows and doors for energy efficiency.

Late last year, AGC started construction on a new coating operation at its Greenland Plant in Church Hill. Scheduled for completion this summer, the operation is designed to coat glass coming out of the furnace with an energy-efficient seal. The result is a low-emittance or “Low E” window with excellent solar heat gain, which helps retain heat within a building. Such products are often used in the colder Northern climates.

Chris Correnti, AGC vice president, general counsel and secretary, said the company currently makes the Low-E glass at its Kansas plant and wanted to expand those operations to Church Hill.

But to the company’s surprise, the stimulus legislation passed by Congress included criteria that would exclude AGC’s products from being eligible for the tax credit.

“When this criteria was published in the bill, it gave us and others in the industry a lot of concern. The type of products that we were planning to make at Greenland would not qualify for the tax credit,” Correnti said.

“This is a very serious concern — it puts into question, what are we going to do now with the investment (in Church Hill)? What’s that going to mean for the future of selling those products in the U.S.?”

Correnti said AGC officials had tracked the House and Senate versions of the stimulus plan. The criteria regarding windows and doors was not included in the House version, while the Senate version didn’t include the language until “the last minute.”

“This happened literally at the last minute when the Senate approved it,” Correnti said. “We didn’t find out until after the Senate had already approved the last version of the bill. It literally was a complete shock.”

According to the final version of the legislation, to qualify for the tax credit, windows, doors and skylights placed in service after Feb. 17, 2009, must have a U-factor and Solar Heat Gain Coefficient (SHGC) of less than or equal to 0.30. Not all Energy Star labeled windows and skylights qualify for the tax credit.

The U factor and SHGC represent ranges that homeowners can use to determine the best type of windows to install in their homes, based on the climate in which they live.

Correnti said windows with higher solar heat gains are more energy efficient in the North. He said the stimulus plan’s .30 maximum requirement for windows would be OK in Southern climates, but it’s not sufficient for Northern areas.

“Those are criteria that will not achieve the greatest energy savings. As a matter of fact, in Northern climates, we believe it would cost a lot of energy because you’re not really allowing the most energy-efficient products to be sold (under the tax credit),” Correnti said.

“We’ve had a serious objection to that provision in the bill. We are pretty confident it was not put into the bill in an effort to save energy, nor was it put into the bill based on any studies or modeling or anything. It appears it was put in as a way to minimize the total windows that might qualify for the tax credit in order to save money.

“That’s certainly not the way you would hope legislation would be enacted, but this whole bill was rushed through. There’s a lot of issues that people have had with the bill,” Correnti said.

Sen. Olympia Snowe, one of three Republicans who voted for the measure, included several amendments to the plan prior to the Senate vote. It is AGC’s understanding, Correnti said, that the criteria for windows and doors was included in one of Snowe’s amendments.

Neither Snowe nor anyone in her office could be reached for comment.

Roe, who voted against the stimulus bill, commented on the issue in an e-mail from his office in Washington, D.C.

“It’s ridiculous that a provision in the so-called stimulus bill excludes certified energy-efficient products made by AGC Flat Glass and other companies,” said Roe. “AGC provides a lot of jobs in Tennessee, and this provision poses a threat to our workers. That’s why we are dropping a bill to get the process moving to try and correct this glaring flaw.”

Roe said he knows the language was inserted in the legislation by the Senate, “but we are still not sure why.”

“This legislation was supposed to spur the economy and create jobs. It’s ironic that by placing a provision in there that arbitrarily rewards some companies and punishes others — this bill has the potential to do just the opposite of what the proponents of the economic stimulus claimed it would do,” Roe said.

Asked what will happen to AGC’s new coating operation in Church Hill if Roe’s amendment is not approved, Correnti said he can’t say.

“The best answer I can give you right now — we’ll figure out where that leaves us as far as what we do and can produce at Greenland and what that means for the opportunity to produce some value-added products there,” Correnti said.

“The best thing we can say is we hope that folks will get behind and support the amendment, and we won’t have to be in a situation of evaluating this,” he said.

Source: timesnews.netAuthor: shangyi

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