What a Year in Washington D.C.

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Capitol Commentary

SEMI Global Update
December 2009

What a Year in Washington D.C.

By Maggie Hershey, Sr. Director, NA Public Policy

The year began with a new President taking office and a new Congress getting sworn in. The flurry of political activity this year has kept the SEMI Washington office on its toes and we don’t expect things to let up any time soon. The first major policy initiative this year was the massive stimulus bill followed by House passage of a climate change and energy bill. Congress continues the debates about health care reform and changes to financial regulations and is working to finalize the spending plans for fiscal year 2010. Before we know it, the 2010 mid-term campaigns will be well underway.

SEMI has been actively engaged in several of the key policy initiatives this year. We mounted a major lobby effort starting last fall when it became clear that Congress would enact stimulus legislation. Over twenty industry executives participated in the annual Washington Forum and met with two dozen Members of Congress and Administration officials. We presented the annual Government Leadership Award to Senator Kirsten Gillibrand (D-NY) for her work in support of the industry. We also organized a SEMI PV Group Lobby Day in the fall with several member companies coming to Washington to push for renewable energy standards and the creation of a Green Bank. The SEMI Political Alliance, our political action committee, contributed to the campaigns of ten Members of Congress.

Stimulus Bill Lobbying

Intense SEMI lobbying efforts paid off with great outcomes for key provisions of the American Recovery and Reinvestment Act. As a result of numerous meetings on Capitol Hill, letters to Congressional leadership, and "Calls to Action," the final bill included several provisions for solar energy and R&D funding for basic research that are beneficial to our membership. These provisions include: a 30 percent manufacturing tax credit for facilities that manufacture renewable energy products, a new DOE grant program for companies that do not qualify for the renewable energy investment tax credit, a major boost in funding for basic research at key agencies like NSF and NIST, and other items.

The federal agencies are working hard to implement these provisions and this work will continue through 2010. The following links provide additional details:

SEMI on Energy Policy

A major debate in Washington this year is focused on climate change with proposals for a cap-and-trade system that would create an emissions trading system. As a part of the mix, Congress is looking at increased use of renewable energy as way to reduce carbon emissions. The House passed the Waxman-Markey bill in June that includes a cap-and-trade system, a renewable electricity standard (RES), creation of a Green Bank and other measures. In the Senate, the Energy Committee passed a bill this summer that also includes an RES, a Green Bank and other energy provisions. Senate leaders plan to merge this energy bill with pending climate change legislation. Prospects for the Senate climate change bill are challenging and consideration has slipped to next spring.

  • Renewable Electricity Standard (RES): There is a strong movement in the United States to adopt renewable electricity standards. Twenty-nine states and the District of Columbia already have taken this approach. Many of these efforts are more vigorous than what it being proposed at the federal level. Adopting a federal RES is critical to increase adoption of renewable energies such as solar.

    The House bill provides for an RES of 20 percent by 2020. The Senate bill provides for an RES of 15 percent by 2021. Both bills would allow energy efficiency improvements to count towards about a quarter of the RES requirement. If one adds up the existing RES goals of the states and then takes out the 25 percent carve-out for energy efficiency improvements, the levels in the Senate bill would only meet the cumulative level of what states already are seeking to achieve.

    SEMI urges the Congress to approve final legislation with the higher numbers of the House bill. We also urge the Congress to change the structure of the RES in the final bill so that energy efficiency improvements are treated separately and are not counted as an RES carve-out.
  • Green Bank: Both the House and Senate bills include a range of provisions to create a Green Bank. This would be formally called the Clean Energy Deployment Administration (CEDA). It is critical that the Congress finalize the creation of the Green Bank to address many of the funding challenges that are stumbling blocks to investors seeking to start solar projects in the United States.

    The House bill would create CEDA as an independent corporation of the United States. This is similar to the Ex-Im Bank, the Overseas Private Investment Corporation and other agencies. There would be a Board of Directors with high-level government officials to oversee the Bank. The Senate would create CEDA as a corporation within DOE. SEMI urges the Congress to create a Green Bank as an independent corporation.

    The House bill provides an initial capitalization of $7.5 billion. The Senate bill provides an initial capitalization of $10 billion. SEMI urges the Congress to provide initial capitalization for a Green Bank of $10 billion.
  • Other Solar Initiatives. Several other things happening in public policy related to PV. Rep. Gabrielle Giffords (D-AZ) is the chief sponsor of the Solar Technology Roadmap Act which would authorize $2.5 billion in R&D funding and create a government-industry committee to prepare recommendations on how this funding should be spent. This bill passed the House in the fall and we expect it will be considered soon in the Senate. The DOE is preparing a Request for Proposal (RFP) for a PV Manufacturing Initiative. The DOE is seeking proposals for R&D consortia that would bring together partners from universities, industry and the national labs to increase PV technology development in the United States. This RFP is expected in January. On Capitol Hill, legislators are considering additional changes to the tax code as a way to promote increased development and deployment of the solar industry in the United States.

Export Control Reform

Another busy area this year is export control reform. The Obama Administration has announced a sweeping review of U.S. export control policies with the intention of modernizing the system. This review includes Cabinet-level involvement from key agencies such as the Departments of Defense, Commerce and State. The National Security Council (NSC) is coordinating the effort and SEMI has begun meeting with NSC officials to weigh in. We have also begun discussions with key staff on Capitol Hill since it looks likely that 2010 will see proposed legislation to update the government’s export control authority.

Every year, the U.S. government and key trading partners in the multilateral Wassenaar Arrangement review the content of the control list. This review will soon come to a close and SEMI is expecting excellent results this year. We anticipate approval for two industry proposals: one that scales back the control on etch equipment from 180nm to 65nm and one that reduces the scope of the control on cluster tools. We also anticipate that a SEMI-opposed control related to scanning electron microscopes and focused ion beam equipment will not be approved.

To help China-based member companies and customers learn more about the global reach of U.S. export control regulations, SEMI organized two seminars this year in China. The events were held in Beijing and Shanghai with event partners Tech America and the United States Information Technology Office. The government and industry speakers discussed current requirements and shared perspectives on how to ensure compliance. Each event attracted over 40 participants from throughout the electronics supply chain.

SEMI Supports Innovation Policies

SEMI actively supports a range of pro-innovation policies, such as federal R&D funding, the R&D tax credit and an improved immigration system for highly skilled foreign professionals.

  • R&D Funding. This year SEMI helped secure a major infusion of cash to the federal sciences agencies to use for basic research R&D as part of the stimulus bill. In addition, agencies such as the National Science Foundation and the National Institute for Standards and Technology expect to see large increases in their annual budget through the FY10 appropriations process.
  • R&D Tax Credit. Many SEMI companies take advantage of the R&D tax credit which provides a financial incentive for companies to conduct R&D in the United States. Since the credit is slated to expire on December 31, 2009, we support efforts to extend it as soon as possible.
  • Immigration Reform. There has been a lot of debate about comprehensive immigration reform with some policymakers hoping to consider legislation in the spring. This could include improvements to the greencard processing system that could benefit SEMI members employing highly skilled foreign professionals.

All in all, it has been a busy and successful year for the SEMI U.S. public policy program. We continue to promote policies that benefit SEMI member companies and encourage interested companies to get involved in our lobbying efforts. Next year promises to be a busy one and we urge companies to contact the Washington office at semidc@semi.org for ways to get involved.

December 1, 2009