Capitol Commentary

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Capitol Commentary

By Victoria Hadfield, president, SEMI North America

Our industry priorities are beginning to be addressed in Washington. Earlier this month, President Bush signed the America Competes Act (HR 2272), and some progress has been made on energy tax and policy measures that could have an impact on U.S. demand for solar energy.

On August 9, President Bush signed into law the America Competes Act (HR 2272), long supported by SEMI and other high technology associations. This Act lays the foundation for funding increases for basic research at the National Science Foundation (NSF), the National Institute of Standards and Technology (NIST), and the Office of Science in the Department of Energy. These funding increases must now be carried forward in the FY 2008 appropriations process, but support appears to be strong in both Houses. For the first time, Congress seems to understand that we must take significant steps to nurture science and engineering innovation and education. The America Competes Act is truly a victory for the bipartisan-endorsed innovation agenda, supported by the high technology community!

Unfortunately, other innovation agenda priorities remain unresolved. SEMI and our allies are pressing for Congress to stay focused and complete their work in this area. The need for increased visa quotas under the H-1B program remains paramount so that U.S. high technology companies can hire the highly specialized global talent necessary to compete in a global industry. Similarly, unless Congress acts quickly, the federal R&D tax credit will expire at the end of 2007. All these measures are part of SEMI’s “Secure the Future” campaign (, and we ask you to join with us to pressure Congress to act with urgency to resolve these issues.

Of course, America’s ability to compete and thrive in the new global economy is complex, and goes beyond issues of R&D research, tax credits and visa programs. This fall, Congress must also resolve the fate of several energy tax and policy measures that could have a fundamental impact on U.S. demand for solar energy. The latest innovations in photovoltaic (PV) materials and manufacturing are now driven by many companies from our industry, so we are pushing for passage of measures that will help the U.S. catch up with the growth of PV in Europe and Japan.

On August 4, the House passed an energy bill (HR 3221) that would create the first federal mandate requiring utilities to generate 15 percent of the nation’s electricity from renewable resources by 2020. The same day, the House passed an Energy Tax package (HR 2776) that would provide an eight-year extension of the 30 percent Investment Tax Credit (ITC) for solar installations for businesses under Section 48 of the tax code. It does not extend the existing 30 percent ITC for homeowners under Section 25.

The Senate also passed its own energy policy measure but it differs in significant ways from the House version. Also, the Senate has not been successful in passing any of the energy tax provisions so far. If final energy legislation does finally emerge from a House/Senate conference, it will face strong opposition from the oil and gas lobby—and the Bush Administration—unless significant compromises are made to minimize tax increases on oil and gas companies. We hope that the Administration and Congress can see their way to final passage of these important measures despite these obstacles.

If you would like to learn more about the solar energy (PV) market, please read “Renewable Energy and Politics: A Tale of Two Technologies” in this newsletter.

Please remember that this newsletter is for you—SEMI members. Let me know what issues you would like addressed by emailing your interests and/or concerns to