[Congressional Record Volume 157, Number 10 (Tuesday, January 25, 2011)]
[Senate]
[Pages S227-S228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL:
  S. 155. A bill to amend the Internal Revenue Code of 1986 to provide 
an enhanced credit for research and development by companies that 
manufacture products in the United States; to the Committee on Finance.
  Mr. KOHL. Mr. President, I rise today to introduce three bills that I 
believe will be important for our small businesses, especially our 
smaller manufacturers. In each of these bills, there is an emphasis on 
keeping our research and development and manufacturing here in the 
United States, rewarding our innovative American businesses with 
predictable credits and equitable treatment, and creating good paying 
jobs.
  The first bill, S. 155, is designed to incentivize keeping jobs in 
the United States by increasing the existing Research & Development tax 
credit for companies that produce most of their goods domestically. The 
Domestic Jobs Innovation Bonus Act would create a bonus R&D Credit that 
increases incrementally to reward a higher percentage of domestic 
production. To earn the bonus credit, a company would need to make at 
least half of their products domestically--and for doing so would 
receive an additional 2 percentage points on top of the existing R&D 
credit. The credit would max out at a 10 percentage point increase for 
companies with 90 percent to 100 percent of their receipts from 
domestic production. For example, a company with 100 percent domestic 
production that would normally receive a 20 percent R&D tax credit 
would receive a 30 percent credit under this proposal.
  To be clear, this isn't a tax credit that will benefit every company 
that has a presence in the United States. It

[[Page S228]]

may not benefit many large, multi-national corporations, but those 
companies will still have access to the existing R&D Credit, which I 
support as well.
  It is my hope that a credit like this could convince a company that 
is deciding whether to manufacture and research here or abroad, to 
choose America.
  I am introducing a second bill, S. 156, with Senators Corker and 
Alexander that would establish a uniform energy efficiency descriptor 
for all water heaters and improve the testing methods by which that 
descriptor is determined. Currently, water heaters are lumped into two 
categories under two federal statutes, based on arbitrary gallon 
capacity and energy input ratings. ``Smaller'' water heaters are 
covered by the National Appliance Energy Conservation Act, NAECA, and 
must be rated using an energy factor or EF rating. ``Larger'' water 
heaters are within the scope of the Energy Policy Act, EPACT, and must 
be rated using a thermal efficiency or TE rating. Not only do the 
testing methods differ, but a manufacturer is forbidden to place an EF 
rating on a TE-sized unit, and vice-versa.
  This legislation would direct the Department of Energy to work with 
industry stakeholders to develop a uniform energy efficiency descriptor 
that applies to all sizes of water heaters. It also would develop a 
test method to accurately determine that descriptor for all types of 
water heaters. It is my hope that the water heating manufacturing 
community can develop and implement the new test method and descriptor 
that will eliminate confusion and enable consumers and business owners 
to make informed purchasing decisions on water heaters. In today's 
tough economy, energy bills continue to stretch family budgets. 
Families can save money and conserve energy if they have accurate 
information about how much energy home appliances consume.
  The difference between EF and TE ratings was based on the assumption 
that smaller units were exclusively for residential uses while larger 
units were exclusively for commercial purposes. Due to advances in 
manufacturing technology, the assumptions underlying the earlier 
dividing line are no longer accurate. In fact, both larger and smaller 
units made by leading U.S. manufacturers are used in residences without 
regard to which Federal law applies. Yet, Federal legislation continues 
to be written by taking this distinction into account.
  In particular, these American companies are affected by the current 
disparate energy standards because it can disadvantage some of their 
products. Establishing one standard will help breakdown a patchwork of 
incentives and efficiency designations at both the state and federal 
level. For example, water heaters rated with a TE rating are not 
eligible for the ENERGY STAR label, and accordingly, not eligible for 
many state appliance rebate programs that link their incentives to an 
ENERGY STAR designation. This bill will make it so all products are 
competing on a level playing field for all incentives.
  In addition to the energy savings that this bill will provide, it is 
also about the jobs potential for companies making these cutting-edge 
products. A globally-recognized cluster of water technology companies 
is emerging in the City of Milwaukee and surrounding counties. An 
important part of this effort is innovative water heater technologies. 
Incentivizing these products through predictable and equitable 
standards is vital to these companies.
  The third bill, S. 157, would extend the Section 48 investment tax 
credit to solar light pipe technology. This is a promising new 
technology that could save our businesses money on their electricity 
bills, and reduce our overall energy usage--two goals on which we can 
all agree. Light pipes collect natural light, and then through the use 
of sensor technology, automatically dim the other lights in a 
building--thereby using less electricity for the same amount of light.
  Despite the clear benefits of the technology, high cost has kept many 
businesses from using light pipes. Adding this technology to Section 48 
will provide that boost that these businesses need to justify the 
expense.
  I became aware of this technology because one of the companies that 
makes it is based in Manitowoc, Wisconsin. This company, Orion Energy 
Systems, employs about 250 people, and has been growing even during 
this tough economic time. In addition to light pipes, Orion makes 
energy efficient lighting systems, and partners with wind and solar 
power companies to significantly reduce the energy costs for many of 
our largest and most distinguished companies. Orion technology has been 
deployed at more than 6,000 facilities, and has worked with 126 of the 
Fortune 500 companies. Since 2001, Orion customers have saved more than 
$1 billion in electricity costs by displacing nearly 600 megawatts.
  This credit will help Orion and companies like it create thousands of 
jobs through the production of the technology as well as installing it.
  I urge my colleagues to support all of these bills, and I hope that 
they are enacted as part of an agenda that focuses on innovation, job 
creation, and shoring up our vital manufacturing sector.
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