Public Policy Priorities

Open trade policies | Export controls | Innovation | Tax issues | Environment, safety and health | Energy | Human resources | Digital rights management | Patent reform

TI's global public policy priorities are aligned carefully with the company's strategic business priorities and our ethical values. This alignment not only ensures our continued growth and profitability – and our customers' success – but also supports our commitment to corporate citizenship.

Open trade policies

TI derives approximately 85 percent of our revenues from sales in overseas markets. 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 continues to benefit from U.S. leadership in removing tariffs on information technology through agreements such as the Information Technology Agreement and the agreement on multichip packages.

TI supports advancing bilateral and multilateral trade agreements currently under negotiation or awaiting Congressional approval, such as the expansion of World Trade Organization commitments through the Doha Round of negotiations.

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. U.S. regulations can become outdated or may need to be streamlined. TI has been very active in advising the Department of Commerce on the deemed export rule, encryption and other proceedings impacting our products.

Innovation

Maintaining the U.S. position as the world's innovation leader is a top public policy priority for TI and the semiconductor industry in general (www.choosetocompete.org). Critical components to the future competitiveness of the U.S. semiconductor industry and our nation are increased investments in basic research, improvements in math/science education, and access to and retention of the world's brightest minds.

Basic research funding
Basic research at U.S. universities is key to addressing national challenges such as energy, security and medical advances. TI supports regular, sustained increases in federal funding for basic research, especially in the physical sciences and engineering. Universities need sufficient funding to attract the best and brightest professors and students in the fields of engineering, physics, chemistry and other technology areas.

The American Recovery and Reinvestment Act provided a much-needed boost in research infrastructure at universities and national labs. Research professors and graduate students depend on predictable funding to support breakthrough research.

TI advocates for increased appropriations for the National Science Foundation, the National Institute of Standards and Technology, and the Department of Energy Office of Science to achieve the goal of doubling basic research as outlined by the U.S. Administration. TI supports full funding of the university-based Focus Center Research Program, a partnership between the semiconductor industry and the Department of Defense that investigates the key technical challenges identified in extending complementary metal-oxide semiconductor (CMOS) technology.

We also support the National Nanotechnology Initiative Amendments Act, with a specific focus on areas of national importance, such as nanoelectronics. 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.

Educated work force
Science and engineering professionals are essential to TI's growth and success. We engage actively with federal, state and local governments to promote educational excellence at all grade levels. For example, at the K-12 level, TI supports policy initiatives to increase focus on math and science proficiency. This support is consistent with our support of federal, state and local programs designed to improve math and science teaching and student performance.

At the university level, TI actively supports numerous programs designed to increase the pipeline of scientists and engineers. It is a priority to ensure adequate funding for the Texas Engineering and Technical Consortium, an industry/university consortium that directs state and private dollars to programs to increase the enrollment and retention of science and engineering majors from Texas colleges and universities.

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 our use of H-1B visa programs, the primary mechanism for employing these graduate students. These students often face multiyear waits for permanent resident visas.

Tax issues

R&D Tax Credit
TI supports federal and state tax policies that support and encourage research and development (R&D). Securing a permanent extension of the federal R&D tax credit is 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 so that the perennial effort to renew it can be shelved.

Deferral
TI supports international tax policies that reflect the reality of companies operating in international markets. TI has semiconductor design, manufacturing or sales operations in more than 30 countries. While TI locates more than half of our wafer fabrication and the vast majority of our R&D in the U.S., about 85 percent of our 2008 revenues came from overseas sales.

TI is concerned by suggestions to modify the principle of deferral, which enables U.S. multinational companies to defer payment of U.S. taxes on the active earnings of their overseas subsidiaries until earnings are paid to the U.S. parent company.

TI has formidable competitors from other countries with similar international operations. In many cases, they locate operations in the same countries we do. A modification of deferral could impose a cost on our operations that would not be imposed on our international competitors. No other developed country in the world imposes a tax on the active earnings of foreign subsidiaries. If there are changes to deferral, they should be addressed in the context of broader tax reform.

Tax reform
Tax reform was last addressed in major legislation in 1986. Since then, many proposals have been made, but overall reform of corporate taxes has not occurred. TI closely monitors the issue and participates in public policy debates where appropriate. Our nation's 39 percent combined federal and state corporate tax rate is the second 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 tax credits are higher.

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 level that are well-informed and responsible, discouraging those that place undue burdens on the company's operations.

With the increasingly assertive regulatory approach of the European Union and some Asian countries, TI must also monitor and seek to influence environmental regulations around the world.

Energy

TI supports initiatives to promote the deployment of energy efficiency and clean energy technologies. Incentives to advance renewable energy, such as wind and solar; programs such as Energy Star and the upgrading of Department of Energy appliance standards; and efforts to advance the adoption of other smart technologies are all areas of interest to TI.

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.

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.

Digital rights management

TI is a key technology provider for consumer products that allow users to view or listen to protected content. We support the principle of fair use for consumers and have opposed efforts to curtail fair use or to impose mandates on technology providers.

Patent reform

TI has a strong patent portfolio resulting from significant investments in R&D. We are concerned about the negative effects of patent reform legislation, which would dramatically alter the procedure for calculating damages, thereby minimizing awards and encouraging infringement. A number of stakeholders – including renewable energy, biotechnology, nanotechnology, venture capital, manufacturing, pharmaceutical and universities – have raised concerns with the proposed legislation. TI believes that these concerns must be resolved before legislation can proceed.

Government Relations