CHIPS-Plus Passes SenateJuly 27, 2022
On July 27, the Senate passed a $280 billion CHIPS Plus package, sending it to the House for final action as soon as this week. The vote was 64-33, with 17 Republicans backing the measure. The House is scheduled to take the package up on Thursday.
Today’s vote was a personal victory for Senate Majority Leader Chuck Schumer (D-N.Y.), who has been pushing a version of this legislation with Sen. Todd Young (R-Ind.) since 2019.
Known as the “CHIPS-plus” bill, the text provides for mandatory appropriations over five years that would designate and establish the “CHIPS for America Fund.” Specifically, the legislation would designate: $39 billion in “financial assistance to build, expand or modernize” domestic semiconductor facilities; up to $6 billion of that can be used in direct loans or loan guarantees; another $11 billion will go toward advanced research and development programs under the Commerce Department; and $2 billion will be used for national defense tech applications or workforce training. There are “guardrails” included in the legislation, and none of these funds can be used to underwrite stock buybacks or on facilities in China or “any other foreign country of concern.”
Meanwhile, the science provisions include funding authorizations for the National Science Foundation, Energy Department Office of Science, as well as provisions impacting NASA. The proposal authorizes more than $80 billion for the National Science Foundation – nearly doubling the agency’s current budget – as well as $10 billion for “regional technology hubs.”
Unfortunately, much-needed legislation to reauthorize the highly-successful Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs was scrapped from the larger package initially considered by the House. Absent Congressional action, both programs will expire on Sept. 30, 2022.
There is also funding for more advanced research and high-tech manufacturing programs under NIST, the Energy Department would be authorized to use billions for advanced research programs in a variety of areas, including fusion and lasers, and Congress wants to provide funding for STEM programs and research grants.
According to supporters, the CHIPS-plus package is vital for U.S. economic and national security interests in a world increasingly dependent on technological advancement. Aimed at putting the U.S. on a more competitive footing with China, which has invested heavily in its own chip-making capabilities, the bipartisan bill will bolster domestic semiconductor manufacturing and boost U.S. competitiveness with countries around the world.
Following several weeks of negotiation, Senators ultimately agreed to include tax incentives that were not part of broader, previously considered versions of the legislation, including a multi-year, 25 percent investment tax credit for semiconductor plants estimated to cost $24 billion.
Check back here and keep up with NSBA for all of the latest updates on this important initiative.