Ring in the New Year— and New Legislation

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From the President of SEMI Americas

Ring in the New Year— and New Legislation

To ring in the New Year, I’d like to give you a brief update on some recent progress on critical public policy issues for SEMI— the R&D tax credit, the alternative energy ITC, Conflict Minerals, and Rare Earth Minerals.

In December, Congress approved and President Obama signed off on the $859 billion Obama Tax Compromise Bill. SEMI worked diligently to extend the R&D tax credit so we are thrilled that the tax compromise bill contains a two year extension of the R&D tax credit, one of our top policy priorities. The credit will now be retroactive to January 1, 2010 and will run through December 31, 2011. This bill represents the 14th time the credit has been renewed since originally enacted into law in 1981. U.S. SEMI members serving all market segments (including semiconductor, flat panel display, photovoltaic and HB-LED) support the bill.

Another big win for SEMI policy priorities is the bill’s extension of the Section 1603 Treasury grant program that allows alternative energy projects, such as Solar PV, to claim the 30 percent investment tax credit (ITC) as a grant.  This was one of our top Solar PV priorities.  This was part of a comprehensive bill with many parts addressing a variety of policy areas. Here’s a summary of the bill for your review: http://www.semi.org/cms/groups/public/documents/web_content/ctr_042842.pdf

The move to ban Conflict Minerals definitely impacts the electronics industry. Tin, tantalum, gold, tungsten are affected. Final text is contained in Section 1502 of the The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173). SEMI submitted comments to the Securities and Exchange Commission (SEC) to let them know about our specific industry concerns. While SEMI clearly supports the goals of Section 1502 of preventing human suffering in the Democratic Republic of Congo and related areas, SEMI recommended that companies be required to perform due diligence and report only for tin, tantalum, tungsten, and gold which is directly incorporated or specified for inclusion in their products. For more information, see the letter I sent to the SEC at: www.sec.gov/comments/df-title-xv/specialized-disclosures/specializeddisclosures-46.pdf

As we think about the Rare Earth minerals issue, I want to point out the Energy Department's Critical Materials Strategy report released in December. The report examines the issues of rare earth and other critical minerals as they relate to clean energy and energy efficiency. The report looks at risks due to location (concentration in China), vulnerabilities to supply chain disruptions, and challenges regarding substitutes. It also looks at recycling and reuse to boost efficiency. The DOE is working with several other agencies on this issue and expects to release an updated strategy at the end of 2011. The report contains lots of good information, including an overview of what other countries are doing in this area and a summary of legislative proposals. The report is available online at: www.energy.gov/news/documents/criticalmaterialsstrategy.pdf

One area of DOE focus is government R&D to develop substitutes. SEMI supports this goal and continued appropriations for it. Government spending issues are going to be an especially tough issue this next budget cycle and programs important to the industry will need our support. We also will continue to monitor legislation and weigh in as appropriate.

SEMI is pleased to see our industry's advocacy efforts pay off with this recent flurry of policy activity. We are gearing up for a busy 2011 with a Solar PV Lobby Day on February 8-9, upcoming comments to the Obama Administration on their export control reform effort, and other projects. For more information on SEMI's public policy priorities and activities, I encourage you to contact the SEMI Washington office at semidc@semi.org.

Karen Savala

January 6, 2011