The Industry Heads to Washington


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Capitol Commentary

The Industry Heads to Washington

By Maggie Hershey, senior director, SEMI North America Public Policy

Almost two dozen senior industry executives are preparing to go to Washington next week to press decision makers to support policies promoting a strong industry in the United States. SEMI has an active presence in the nation’s capitol and the annual Washington Forum is a critical tool to present our member companies’ policy interests directly with Members of Congress and Administration officials. There is no substitute for this face-to-face interaction to advance our policy agenda and to raise the industry’s visibility among policymakers.

The Washington Forum will feature almost 20 meetings with Members of Congress, their senior staff and relevant officials within the federal agencies. Priority issues include building support for solar/PV, innovation policies and export control reform.

A central feature of the annual advocacy day is the presentation of the SEMI North America Government Leadership Award. We are pleased to announce that this year’s recipient is Senator Jeff Bingaman (D-NM), a long-time supporter of pro-innovation policies and alternative energy. Senator Bingaman has represented New Mexico in the U.S. Senate since 1982 and currently serves as the Chairman of the Senate Energy and Natural Resources Committee. In this role, he spearheaded committee approval last summer for energy legislation that includes a renewable energy standard and creation of a Green Bank among other policies that would benefit solar and other forms of renewable energy. He is working hard to see these provisions finalized. Bingaman also has a long record of support for other key policies such as the America Competes Act, free trade, and common sense changes to high skills immigration policies.

The following highlights the policy issues that SEMI members will be advocating.

Solar Energy

The executives will press for legislation this year to deepen the government’s support to increase demand for alternative energy in the United States and to promote a strong domestic manufacturing base including PV equipment and materials. The alternative energy provisions of the American Recovery and Reinvestment Act were an important step, but the industry faces stiff foreign competition backed by the strong support of other governments and much more needs to be done here.

  • Two key policies the SEMI group will advocate for are central elements of energy legislation being considered this year. These are the adoption of a federal renewable energy standard to promote greater adoption of solar energy and the creation of a Green Bank to address the challenging issues companies face in financing solar ventures. We urge Congress to finalize action on both of these priorities this year.
  • SEMI also will push for changes to tax measures affecting the industry. The new advanced energy manufacturing tax credit quickly reached its statutory cap of $2.3 billion when it was made available earlier in the year. While several member companies received this new credit which SEMI helped get included in the stimulus bill, several others were not selected. With over $8 billion in applications, this excess need represents thousands of jobs that could be produced, and many more billions of dollars in private investment left out of the economy. SEMI urges Congress to eliminate the cap on the manufacturing tax credit.
  • In addition to solar PV, SEMI members are increasingly ramping up efforts to bring lower cost, high efficiency solid state lighting (SSL) to the American consumer. The real challenge in making this happen, however, is being able to increase our domestic manufacturing capacity for SSL technologies, such as light emitting diodes (LED’s). Again, by removing the cap on the MTC, our members would be able to leverage this tax credit to pour billions of dollars of private investment into increased production of LED’s, lowering the price, and greatly helping to reduce the amount of electricity we use for lighting. SEMI also supports continued funding of the DOE SSL manufacturing initiative and has sent letters to both the House and Senate appropriations committees to urge them to allocate $20 million in dedicated funding for the SSL Manufacturing Improvements Program.
  • In addition to building up our manufacturing base, solar PV also needs to be price competitive in order to reach a sustainable level of deployment in the United States. While the existing investment tax credit program has been a good driver, under current economic circumstances SEMI believes that it is vital to continue the Section 1603 Treasury Department grants in lieu of credit program to provide the necessary up front capital for installation of renewable energy technologies. With this program set to expire at the end of this year, we are quickly approaching a cliff that will severely hamper the growth in solar PV installations. The Section 1603 program should be extended to 2012, which will allow continued growth, while providing sorely needed upfront capital for solar installation projects. By extending this program for an additional two years, more large scale renewable energy projects will be ready to begin construction and take full advantage of the program.

Innovation Policies

The SEMI company executives will press Congress on a range of pro-innovation policies of benefit to the industry. The America Competes Act is a major piece of legislation that outlines Congress’ views on science agency funding, certain energy programs such as the Advanced Research Programs Agency – Energy (ARPA-E), educational activities in STEM (science, technology, engineering and math) fields and nanotechnology. This year’s effort is focused on strengthening and reauthorizing the landmark legislation for the first time since it was enacted in 2007. SEMI urges Congress to pass a strong America Competes Act this year.

Specific innovation policies we will promote at the Washington Forum are:

  • Federal R&D Investment: For many years, SEMI has endorsed critical R&D investments at U.S. universities, labs and federal agencies for engineering and science programs that are vital to competitive leadership in electronics and materials sciences. The federal government should fund basic science programs at the National Science Foundation, the National Institute of Standards and Technology and other agencies in line with the America Competes Act’s goal to double these agencies’ R&D budgets over seven years to ensure that the United States has the necessary infrastructure to fuel continuous advances in microelectronics technologies. This should include full funding for the Focus Center Research Program that expands long-range microelectronics research at over thirty U.S. universities.
  • R&D Tax Credit: SEMI urges Congress to improve and permanently extend the federal R&D tax credit. This is an important incentive for companies to locate high value R&D jobs and activities in the United States. SEMI members on average invest 10–15 percent of revenues in R&D and many member companies take advantage of this credit. This credit most recently expired on December 31, 2009. At a minimum, it should be extended for at least two years with retroactive application to when it expired and ideally it should be made permanent.
  • High Skills Immigration Reform: SEMI is proud to organize the Workforce Development Institute which provides math/science instruction and career guidance to U.S. high school students. These and other efforts to promote a domestic high-tech workforce are valuable, but it remains necessary for the government to enact improvements to the H-1B visa and greencard programs. The system needs major improvement to ensure that foreign nationals with advanced degrees in engineering and science from U.S. universities are able to pursue their careers in the United States. An efficient immigration system that welcomes highly-educated foreign nationals to the U.S. workforce is critical to the U.S. economy.

    Given recent indications that Congress may consider a comprehensive immigration reform bill this year, SEMI urges legislators to include improvements to the H-1B and greencard programs in such a bill. This should include the automatic provision of a greencard to foreign nationals graduating from U.S. universities with a graduate degree or higher in one of the science, technology, engineering or math fields.

Export Control Reform

SEMI is a long-time believer in the need to conduct a fundamental review of the outdated U.S. export control system. The dual-use control list that governs semiconductor equipment and materials has not been comprehensively reviewed for well over 10 years and the justification for continued control for many items remains unclear. Disparities in licensing practices among countries remain a concern and put U.S. companies at a competitive disadvantage.

On April 20, Defense Secretary Robert Gates presented the Administration’s sweeping proposal for reforming U.S. export controls. The proposal is an ambitious plan that holds the potential for significant improvements to the U.S. export control system and enhanced protection of national security. The Administration’s proposals hold promise for addressing SEMI’s concerns, but the details will be critical and the timeline may be challenging.

The plan has four key elements. These elements are the creation of a single control list, a single licensing agency, a single enforcement coordination agency, and a single IT infrastructure. Please see the companion Global Update article [http://www.semi.org/en/Issues/PublicPolicy/ctr_036534] for more details.

At the Washington Forum, SEMI members will meet with Administration officials to exchange views on the proposal and discuss other current projects relevant to the industry. SEMI will also meet with key congressional offices about moving forward in this area and on the potential for a rewrite of the Export Administration Act.

Looking Ahead

All in all, we can expect a busy and productive session while SEMI company executives are in Washington. Many of our issues are currently in the spotlight – appropriations, tax policy, energy legislation, potential comprehensive immigration reform, etc. The timing is perfect to bring these issues directly to policymakers and present our industry’s views. SEMI will continue to push ahead on these goals and urges any interested members to get involved in our efforts. For more information, please contact Maggie Hershey in the SEMI Washington office at mhershey@semi.org.

May 4, 2010