Public Policy Priorities

Open trade | Export controls | Innovation | Enabling growth | Environment, safety and health | Tax | Human resources | Operational flexibility | Intellectual property protection

Texas Instruments' global public policy priorities are aligned carefully with the company's strategic business priorities and our ethical values. This alignment supports continued growth and profitability, customers' success, and advances our commitment to corporate citizenship.

TI has global public policy interests. While much of our advocacy is focused within the United States, there are many issues which transcend national boundaries and on which we advocate in various geographies. Among the policies TI monitors are open trade policies, sound environmental laws and regulations, fair and competitive tax policies, and policies that provide opportunities for TI businesses to grow whether in areas such as clean energy and energy efficiency, health care innovation, increased safety and security or others.

Open trade

TI derives nearly 90 percent of our revenues from sales outside the United States. Open trade policies make it possible for TI to manufacture and design in the U.S. and still have access to key markets in other countries. TI benefits from U.S. leadership in removing tariffs and non-tariff barriers on information technology through bilateral and multilateral trade agreements and sector specific agreements such as the Information Technology Agreement (ITA) and the agreement on multichip packages.

TI supports advancing bilateral and multilateral efforts to secure new trade agreements such as an expansion of the ITA and the negotiation of the Trans-Pacific Partnership. TI also supports passage of U.S. legislation to repeal Jackson-Vanik to enable the United States to realize the benefits of Russian accession to the World Trade Organization. In addition, TI advocates for liberalization through sector specific initiatives such as the multi-component agreement being developed under the auspices of the World Semiconductor Council.

Export controls

TI, like most other U.S. semiconductor companies, is subject to a set of U.S. government regulations that govern the export of semiconductors, equipment and technology to particular countries and to citizens of certain countries. TI has a strong compliance function that ensures we do our part to protect national security. In conjunction with compliance activities, TI also makes an important contribution to revising existing regulations and shaping new regulations as regulations become outdated or need to be streamlined.

The Obama Administration has proposed significant changes to the current export control regime with the goal of developing a system more attuned to the commercial realities of today's global high tech marketplace. TI is advising key governmental agencies and lawmakers about the impact of such changes that enable companies to be competitive while protecting U.S. national security. Among top priorities are encryption reform, intra-company transfer rules and the treatment of dual use products. TI is also working with others in the semiconductor industry to ensure that commercial products do not become controlled due to outdated performance criteria.

Innovation

Maintaining the competitiveness of the U.S. semiconductor industry is a top public policy priority for TI and the semiconductor industry in general. Critical components of this objective are robust investments in science research, improvements in math/science education, and access to and retention of the world's brightest minds.

Early stage science research funding
Science research at U.S. universities is key to addressing national challenges such as energy, security and medical advances. In the United States, TI supports robust federal funding for science research, especially in the physical sciences and engineering, disciplines so critical to semiconductor innovation. Universities need sufficient funding to attract the best and brightest professors and students in the fields of engineering, physics, chemistry and other technology areas.

Just as companies continue to invest in research and development, even in all economic conditions, so must the government. Research professors and graduate students depend on predictable funding to support breakthrough research. History has demonstrated that investments in R&D yield strong returns over time.

In particular, TI advocates for strong funding levels for the National Science Foundation, the National Institute of Standards and Technology, DARPA and the Department of Energy Office of Science. TI also has initiatives that focus on areas of national importance, such as nanoelectronics, and participates in public-private consortia to advance work in this area. TI believes that investments in nanoelectronics and related laboratory infrastructure are critical to maintaining U.S. technological leadership and essential to increasing the pool of highly educated individuals in U.S. technical fields.

In Texas, home to TI's Headquarters and a concentration of advanced manufacturing and R&D activity, TI advocates on behalf of funding for the state's Emerging Technology Fund (ETF) which, among other things, provides matching grants for research superiority investments at public universities. It also supports funds for the Texas Research Incentive Program (TRIP) which matches non-state dollars for Emerging Research Universities with the objective of expanding the base of nationally-ranked Tier One institutions in Texas.

Talent
Science and engineering professionals are essential to TI's growth and success everywhere we operate. In the United States, we actively engage with federal, state and local governments to promote educational excellence at all grade levels. For example, at the K-12 level, TI supports initiatives to increase focus on math and science proficiency. In the last five years TI and the TI Foundation have invested more than $150 million to support education. This support is consistent with our support of federal, state and local programs and policies designed to improve math and science teaching and student performance. TI is a corporate sponsor for Change the Equation, a nonpartisan program which advocates for the need and urgency for better STEM education programs nationwide and seeks to replicate proven STEM education programs across our nation to improve teacher effectiveness and student achievement.

In addition, in Texas and other states in which TI operates, the company advocates on behalf of continued higher standards, accountability and measurement of student, teacher and district performance in public schools, especially in science and mathematics.

At the university level, TI actively supports numerous programs designed to increase the pipeline of scientists and engineers. Most graduates from U.S. advanced degree programs in technical fields are foreign nationals. TI supports reforming immigration policy to facilitate the transition from student to permanent resident and to reduce backlogs for permanent resident visas. Individuals with advanced degrees in science, technology, engineering and mathematics are critical to U.S. competitiveness and should be given priority for permanent resident status. TI opposes legislation that would restrict use of visa programs essential to ensuring a competitive workforce.

Enabling growth

As various countries around the world seek to drive deployment of energy-efficient or clean-energy technologies to reduce energy consumption and emissions of greenhouse gases, TI works to identify opportunities and policies congruent with the company's growth opportunities in lighting, smart grid and meter technologies, electric and hybrid vehicles, solar generation and distribution, and motor controls, among others. Electronics are the key driver behind increasing energy efficiency and making smarter and greener use of energy. TI also monitors policy developments affecting the deployment of other end applications related to TI's growth opportunities such as in medical devices, education technology and safety and security technologies.

Environment, safety and health

TI has a strong record of commitment to worker safety, ensuring a safe workplace and being a responsible steward of the environment. In the legislative and regulatory area, we work to promote laws and regulations at the federal and state levels that are well-informed and responsible, discouraging those that place undue burdens on the company's operations.

Numerous new initiatives are in place or under consideration in various countries around the world. Some examples include: mandatory reporting requirements on emissions of greenhouse gasses, new regulations on greenhouse gas emissions, regulation of product content and of various chemicals involved in the manufacturing of semiconductors. TI monitors and, as appropriate, works with government agencies to ensure that such regulations do not impose undue costs, create onerous administrative and operation burdens on the company or place TI at an unfair disadvantage while TI complies with sound environmental policies.

Tax

In a global economy having a fair and consistent tax policy is critical if U.S. multinational companies like TI are going to compete effectively and not be disadvantaged vis-à-vis our foreign competitors.

Tax reform
Fundamental tax reform in the U.S. was last addressed in major legislation in 1986. Recently, bipartisan government leaders and business executives have called for a comprehensive overhaul of the U.S. tax system. Like many other multinational companies, TI advocates for a lower corporate rate, adoption of a workable territorial system and continued incentives to perform research and development in the United States. Our nation's 39 percent combined federal and state corporate tax rate is now the highest among Organization for Economic and Cooperative Development countries. This puts the U.S. at a clear disadvantage in global competition with other countries where rates are lower and incentives like research tax credits are higher.

TI also supports international tax policies that reflect the reality of companies operating in global markets. TI has semiconductor design, manufacturing or sales operations in more than 30 countries. While more than half of TI's wafer fabrication and the vast majority of our research and development (R&D) are in the U.S., almost 90 percent of our 2010 revenues came from overseas sales.

TI has formidable competitors from other countries with similar international operations. In many cases, they locate operations in the same countries we do. In recent years, proposals were made to apply U.S. tax to the earnings of foreign subsidiaries of U.S. companies. These proposals would not apply to our international competitors. No other developed country in the world imposes a tax on the active earnings of foreign subsidiaries. TI believes that comprehensive tax reform should include adoption of a territorial system of taxation to put us on an equal footing with our foreign competition. TI will closely monitor the issue and participate in public policy debates where appropriate.

R&D tax credit
TI supports federal and state tax policies that encourage research and development. Securing a permanent extension of the U.S. federal R&D tax credit has been and continues to be a top priority. We have been working through our associations and the R&D Tax Credit Coalition to improve the credit and make it permanent. Currently, U.S. R&D incentives rank 24th out of 38 countries.

State tax
TI believes the tax structure in the State of Texas, as of the end of 2011, generally provides a competitive economic climate for capital-intensive companies. The sales tax exemption for semiconductor manufacturing equipment, as well as other exemptions that reduce the cost of operations for manufacturers, are essential components of that environment. TI also supports a low margins tax that is fairly applied to a broad business base, and equal property tax treatment for business and residential payers. In other states where the company has a major presence, TI supports tax policies that help ensure that research intensive manufacturers can compete effectively in a global market.

In Texas, TI supports an expansion of the sales tax exemption for manufacturing equipment to equipment used for research and development. This would serve not only as an important economic development tool, but also improve reporting requirements for companies that often use the same tools for both manufacturing and R&D activities.

Human resources

Benefits
The overall goal is to help TI offer policies that provide us with the greatest flexibility in health and retirement benefits and offer the best, most cost-effective protection for our employees. TI's particular focus involves promoting greater consumerism in health care; managing burdensome regulations and high costs associated with retiree health care; and promoting health information technology to drive increased safety, efficiency, accountability and quality of care. TI continues to monitor the development and implementation of regulations associated with the Patient Protection and Affordable Care Act.

Work force
TI supports flexible policies in the work force to ensure effective deployment of resources, encourage diversity, and offer employees stimulating and rewarding career opportunities.

Operational flexibility

TI monitors and (as necessary) participates in policy debates that affect our operational flexibility, particularly in areas involving corporate governance, confidential business information, supply-chain integrity and access to reliable and affordable sources of energy.

Intellectual property protection

TI invests heavily in R&D and enjoys a strong brand based on years of providing our customers with quality solutions. TI works to protect the value of the company's patent portfolio, its trademarks and its trade secrets against infringement or misuse. A particular area of focus involves policies designed to prevent counterfeit chips from entering the supply chain.

2011 Corporate Citizenship Priorities
2010 Corporate Citizenship Priorities
2009 Corporate Citizenship Priorities

Government Relations