Money for Sematech could come from state

Lawmakers authorize fund pitched by Perry as way to keep consortium in Texas

By Kirk Ladendorf
AMERICAN-STATESMAN STAFF
Tuesday, June 3, 2003

Plenty of Texas legislation died on its way to the governor's desk — from property tax reform to a redrawing of the congressional map — but at least one issue important to the Austin business community survived.

On Sunday, the Legislature authorized the creation of a 5 million Texas Enterprise Fund for economic development, using money from the state's so-called rainy day fund. When he proposed the fund in February, Perry originally sought 0 million. Of that, million was earmarked for Austin's International Sematech research consortium to keep it from moving to upstate New York, and million was to go toward building a rail extension to the planned Toyota truck factory in San Antonio. Another million was to be used to attract various technology and biotechnology companies to the state.

In a letter to Sematech's board of directors last fall, the governor pledged to provide them 0 million in state and local assistance over five years.

The money is expected to go for an advanced-materials research center that would be administered by Sematech, which is the best-known semiconductor collaborative research organization. Sematech's focus is to speed the development of manufacturing technology for future generations of chips.

Perry won't have sole discretion over how the Texas Enterprise Fund is spent. The legislation states that distributions from the fund made by the governor must be approved by both the lieutenant governor and the speaker of the House.

Austin lawyer Pike Powers, who is coordinating the Texas Technology Initiative to back Sematech, said the passage of the bills is an important step in a nine-month effort to keep the consortium in Texas.

"I don't want to jump up and down. There is a lot of work to be done yet," Powers said. "But this is a tremendously important accomplishment by Governor Perry, his working group and the leadership of the Legislature."

Powers has said that Texas must provide new incentives for Sematech to keep it from moving to Albany, N.Y., where Gov. George Pataki has promised a heavy package of incentives.

Sematech, which employs 500 people in Austin, is under pressure to stretch its research dollars further to support research for the semiconductor industry.

The consortium expects its research budget this year will be 0 million. That includes money from New York, where Sematech has already located one of its research programs. Sematech's board is expected to meet in August to decide the consortium's long-term strategy, including where it will make its home. New York will support Sematech's program in Albany with 0 million over five years.

Winning state support for Sematech is only part of the work being done to keep the consortium here. Powers and his group also have asked members of the Texas congressional delegation to support legislation that would pay for a new research center in Austin to supplement Sematech's cramped 60,000-square-foot research "clean room" on Montopolis Drive.

kladendorf@statesman.com; 445-3622