Farewell 21st National Assembly... K-Chips and AI Bills Also Disappear

The extension bill for the K-Chips Act (Amendment to the Restriction of Special Taxation Act), the Artificial Intelligence (AI) Basic Act, the Industrial Technology Protection Act, and other major industrial promotion bills of the 21st National Assembly are set to be collectively discarded. Since the plenary session was not held on the last day of the 21st National Assembly on the 29th, all pending bills have disappeared. As the 22nd National Assembly, starting on the 30th, will have to restart from the proposal stage, the speed of processing industrial bills is expected to slow down.

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According to political circles on the 29th, the ruling and opposition parties held the last plenary session of the 21st National Assembly the previous afternoon. However, major standing committee meetings, including the Legislation and Judiciary Committee which holds the key to passing the Industrial Technology Protection Act, were not held, resulting in the failure to submit major bills such as the K-Chips Act and the AI Basic Act.

The extension bill for the K-Chips Act was proposed by Kim Hak-yong, a member of the People Power Party, in January but remained pending in the Planning and Finance Committee. This bill provides a tax refund of 15-25% on facility investments in national strategic technologies such as semiconductors, displays, secondary batteries, electric vehicles, biopharmaceuticals, and hydrogen. It was planned to extend the sunset clause, which expires this year, until 2030 for six more years. The Ministry of Economy and Finance is considering including semiconductor industry support measures in the tax law revision to be announced in July, but considering the regular National Assembly schedule, the decision on passage is expected around the end of this year.

The AI Basic Act includes provisions to establish and implement a basic AI plan every three years and to create related organizations such as an AI committee. It was highlighted as a law leading the AI industry, similar to the 'Carbon Neutrality and Green Growth Basic Act (Carbon Neutrality Basic Act)' passed during the Moon Jae-in administration and the 'Hydrogen Economy Promotion and Hydrogen Safety Management Act (Hydrogen Act)' that passed the plenary session early in the Yoon Seok-yeol administration. However, it ultimately faced the fate of being discarded in the 21st National Assembly.

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Even the Industrial Technology Protection Act, which had fewer disputes between the ruling and opposition parties, disappeared. It could have been virtually passed if it had been submitted as an agenda item at the full meeting of the Legislation and Judiciary Committee, but the committee was not convened, so it failed. The bill included measures such as increasing fines for technology leakage from the current maximum of 1.5 billion KRW to up to 6.5 billion KRW and imposing aggravated punishment on criminals who intentionally leak technology overseas.

In addition, the 'Special Act on Expansion of National Power Grid,' which shortens the construction and permit process of power grids, and the amendment to reduce individual consumption tax when replacing vehicles older than 10 years, were also not processed.

Kim Jeong-hoe, Vice Chairman of the Korea Semiconductor Industry Association, said, "The Industrial Technology Protection Act is likely to pass smoothly through the relevant standing committee in the 22nd session, and the amendment to the K-Chips Act does not seem to have significant disagreements between the ruling and opposition parties," adding, "It is necessary for related bills to be passed as soon as possible in the 22nd National Assembly to enhance domestic industrial competitiveness and reduce uncertainties regarding technology leakage."

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