Congressional scrutiny of the U.S. relationship with China marched forward this week as Representatives Rosa DeLauro (D-CT), Bill Pascrell (D-NJ), and Brian Fitzpatrick (R-PA) reintroduced a new and expanded version of the National Critical Capabilities Defense Act (NCCDA)—legislation to create a national security review process for “outbound” transactions by U.S. companies investing overseas.
The bill
On April 25, 2023, four federal agencies — the Department of Justice (“DOJ”), Federal Trade Commission (“FTC”), Consumer Financial Protection Bureau (“CFPB”), and Equal Employment Opportunity Commission (“EEOC”) — released a joint statement on the agencies’ efforts to address discrimination and bias in automated systems.
The statement applies to “automated systems,” which are broadly defined “to mean software and algorithmic processes” beyond AI. Although the statement notes the significant benefits that can flow from the use of automated systems, it also cautions against unlawful discrimination that may result from that use.
The statement starts by summarizing the existing legal authorities that apply to automated systems and each agency’s guidance and statements related to AI. Helpfully, the statement serves to aggregate links to key AI-related guidance documents from each agency, providing a one-stop-shop for important AI-related publications for all four entities. For example, the statement summarizes the EEOC’s remit in enforcing federal laws that make it unlawful to discriminate against an applicant or employee and the EEOC’s enforcement activities related to AI, and includes a link to a technical assistance document. Similarly, the report outlines the FTC’s reports and guidance on AI, and includes multiple links to FTC AI-related documents.
After providing an overview of each agency’s position and links to key documents, the statement then summarizes the following sources of potential discrimination and bias, which could indicate the regulatory and enforcement priorities of these agencies.
We will continue to monitor these and related developments across our blogs.
Continue Reading DOJ, FTC, CFPB, and EEOC Statement on Discrimination and AI
Today the National Telecommunications and Information Administration (NTIA) released its first notice of funding opportunity for development of next-generation wireless infrastructure under the new Public Wireless Supply Chain Innovation Fund (“Innovation Fund”). According to NTIA’s announcement, this first tranche of funding will include up to $140.5 million in grants, ranging from $250,000 to $50 million
In August 2022, the Chips and Science Act—a massive, $280 billion bill to boost public and private sector investments in critical and emerging technologies—became law. We followed the bill from the beginning and anticipated significant opportunities for industry to inform and influence the direction of the new law’s programs.
One such opportunity is available now. The U.S. Department of Commerce recently published a request for information (RFI) “to inform the planning and design of the Regional Technology and Innovation Hub (Tech Hubs) program.” The public comment period ends March 16, 2023.
Background
The Chips and Science Act authorized $10 billion for the U.S. Department of Commerce to establish a Regional Technology and Innovation Hub (Tech Hubs) program. Specifically, Commerce was charged with designating at least 20 Tech Hubs and awarding grants to consortia composed of one or more institutions of higher education, political subdivisions, state governments, and “industry or firms in relevant technology, innovation, or manufacturing sectors” to develop and deploy critical technologies in those hubs. $500 million has already been made available for the program, and Commerce will administer the program through the Economic Development Administration (EDA).
Continue Reading Commerce Seeks Comments on Regional Tech Hubs Program
The tech sector was both the beneficiary of immense public investments and the target of significant regulation from public policy makers in the past year. This dynamic is expected to continue with the new Congress and the Administration.
In August, Congress enacted the bipartisan $280B CHIPS and Science Act to boost public and private sector investments in critical and emerging technologies. The law included $50 billion for the CHIPS for America Fund, as well as a 25% tax credit for U.S. chip manufacturing. The Commerce Department is expected to begin considering grant applications as soon as February and awarding funds next year. The law also authorized, but did not fund, a host of new programs to spur research and development across the tech sector and to create a new technology directorate at the National Science Foundation.
Despite this major bipartisan law to support the tech industry, policymakers also supported significant new bills and regulations to rein in the sector. Most prominently, Democrats and Republicans teamed up to sponsor a host of antitrust bills and hauled in top tech executives to testify and defend their practices.
We expect a similar “hot-and-cold” dynamic in the new Congress with a mix of public support and scrutiny. In line with its public support under the CHIPS and Science Act this year, Congress is expected to increase funding for the National Science Foundation to jumpstart a new era of invention and global technology leadership. At the same time, the Republican majority in the House is likely to pursue an array of bills that challenge tech companies. The focus is expected to shift from antitrust law toward content moderation and economic decoupling from China that are of particular interest to Republicans.
Public Policy
With Senate Democrats having secured the 50th vote needed to maintain control of the Senate, both parties are eagerly awaiting the results of the Georgia runoff on December 6 between Democratic Senator Raphael Warnock (D-GA) and Republican candidate Herschel Walker. If Walker wins, the Senate will be split 50-50. The implications of a 51–49 Democratic majority versus a 50–50 Democratic majority are significant.
An Equally Divided Senate
Since February 3, 2021, the Senate has operated under an organizing resolution negotiated by Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY). The organizing resolution formalized a power-sharing agreement for the 117th Congress and was largely modeled on the 2001 power-sharing agreement reached by then-Democratic leader Tom Daschle (D-SD) and then-Republican leader Trent Lott (R-MS) following the November 2000 elections that resulted in a 50–50 Senate split for the 107th Congress. The 2021 power-sharing agreement laid out internal rules of the Senate, apportioned the makeup and control of committees, and prescribed procedures for the control of Senate business. Specifically, the 2021 power-sharing agreement provides that:
On August 25, 2022, President Biden announced a new Executive Order (“EO”) addressing the Implementation of the CHIPS Act of 2022 (“CHIPS Act”). The CHIPS Act was signed by President Biden on August 9, 2022, and, among other things, authorizes $39 billion in funding for new projects to establish semiconductor production facilities within the United
President Biden recently signed the $280 billion CHIPS and Science Act into law. It was the culmination of more than a year of bipartisan, bicameral negotiations to craft comprehensive innovation and competition legislation. As we previously reported, the new law includes a historic investment in domestic semiconductor manufacturing and the nation’s pursuit of science and technology leadership. But there’s another aspect of the bill that hasn’t garnered much media attention: it is permeated with provisions to expand opportunities to Americans who have been underrepresented in science and technology.
The CHIPS and Science Act is the most comprehensive effort in history to create opportunities in science and technology for women, people of color, and other underrepresented groups. The new law will advance diversity, equity, and inclusion in science and technology by:
On August 9, 2022, President Biden signed into law the CHIPS and Science Act—a massive, $280 billion bill to boost public and private sector investments in critical and emerging technologies.
We anticipate significant opportunities and an evolving regulatory landscape for companies, associations, universities, and others who work in various technology sectors, including:
Below is an overview of the legislation and the funding and tax credit opportunities it provides for entities that participate in the research, development, production, education, or transfer of critical and emerging technologies, especially semiconductor manufacturing and research and open-RAN technology.
Headlining the bill are $54 billion in appropriations to fund the Creating Helpful Incentives to Produce Semiconductors (“CHIPS”) for America Act, which was authorized in 2021. The bill also includes $1.5 billion in appropriations for a wireless supply chain innovation fund under the Utilizing Strategic Allied Telecommunications Act, which was similarly authorized in 2021. Across these two sets of appropriations, over $40 billion are allocated for direct financial assistance in the form of competitive grants for which private companies will be able to apply. The law also authorizes over $200 billion in new programs across the federal government, paving the way for additional grants, public-private partnerships, and technology transfer opportunities.
Continue Reading Significant Funding and Tax Credit Opportunities in the CHIPS and Science Act
Two months after Congress launched the Conference Committee on Bipartisan Innovation and Competition Legislation in May 2022, the Senate is nearing passage of a compromise “CHIPS Plus” bill. Majority Leader Chuck Schumer (D-NY) initiated a test vote for the bill on Tuesday and received the assurance—a strong bipartisan vote of 64 to 53—that he sought to proceed.
The CHIPS Plus bill, at just over 1000 pages, is much shorter than either the Senate’s United States Innovation and Competition Act (“USICA”) or the House’s America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act (“America COMPETES Act”), but significantly more ambitious than an earlier approximately 80-page bill that was limited only to semiconductor and wireless supply chain incentives.
The 80-page bill now forms the base — the CHIPS component — of the CHIPS Plus bill. That bill included $54 billion in emergency appropriations for semiconductor and wireless supply chain incentives, “guardrails” that potentially constrain the companies that receive the incentives from undertaking certain business activities in China and other foreign countries of concern, and a 25% advanced manufacturing investment tax credit for the construction or acquisition of property integral to a facility whose primary use is to manufacture semiconductors or semiconductor manufacturing equipment. The CHIPS Plus bill contains all of these provisions, as well as a similar set of guardrails for the tax credits.
The Plus component, added only the day before the test vote, authorizes over $100 billion dollars in government programs to support research and development (“R&D”), technology transfer, innovation, and science, technology, education, and mathematics (“STEM”) education. These programs draw from Senate Commerce, Science, and Transportation Committee provisions in the USICA and from House Science, Space, and Technology Committee provisions in the America COMPETES Act. They contain important policy changes and are likely to present massive opportunities for businesses, nonprofits, and education institutions to bolster their R&D efforts and to partner with the Federal government. Funds will need to be appropriated for many of these programs for them to be effective.
Continue Reading Senate Reaches Compromise on Innovation and Competition Legislation