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
More than Semiconductors and Science: New Law Recognizes Role of Diversity, Equity, and Inclusion in America’s Global Competitiveness
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:
- Creating new research, invention, and entrepreneurial opportunities;
- Authorizing $13 billion for STEM and invention education and providing teachers with the necessary resources to expand STEM;
- Expanding access to the skills and training needed to join the scientific workforce;
- Ensuring that people of color and other underrepresented groups have information about these opportunities;
- Funding research on diversity and inclusion in the tech sector and sexual harassment in STEM fields;
- Making federal agency policy and personnel changes related to diversity, equity, and inclusion, including developing caregiver policies for all science agencies and creating a position for a Chief Diversity Officer at the National Science Foundation (NSF)—the nation’s chief science agency; and
- Recognizing the importance of diversity and inclusion in national science and technology strategies.
Significant Funding and Tax Credit Opportunities in the CHIPS and Science Act
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:
- High performance computing, semiconductors, and advanced computer hardware/software
- Advanced communications technology and immersive technology
- Advanced energy and industrial efficiency technology (including batteries, nuclear)
- Advanced materials science (including composites 2D and next-generation materials)
- Artificial intelligence, machine learning, autonomy, and related advances
- Quantum information science and technology
- Biotechnology, medical technology, genomics, and synthetic biology
- Data storage/management, distributed ledgers, and cybersecurity (including biometrics)
- Natural and anthropogenic disaster prevention or mitigation
- Robotics, automation, and advanced manufacturing
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.
Overview
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
Senate Reaches Compromise on Innovation and Competition Legislation
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
Congress Kick Offs Conference Committee on Bipartisan Innovation and Competition Legislation
Congress launched the Conference Committee on Bipartisan Innovation and Competition Legislation last week with a four-hour meeting featuring remarks by nearly one-hundred committee chairs and members from both chambers of Congress. Chaired by Senator Maria Cantwell (D-WA), the Conference Committee’s objective is to reconcile differences between the United States Innovation and Competition Act (“USICA”), which passed the Senate by a bipartisan vote of 68–32 in June 2021, and the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act (“America COMPETES Act”), which passed the House by a partisan vote of 222–210 in February 2022.
The kick-off meeting suggested that this objective is attainable, but by no means guaranteed.
On display was broad consensus that the United States is not doing enough to spur innovation and remain competitive around the world, and that legislation is needed in support of those goals. Chair Cantwell opened the conference by recognizing that this is a “historic day” with a supply chain crisis and that this is a “Sputnik moment.” A bicameral and bipartisan chorus, including Senate Commerce Committee Ranking Member Roger Wicker (R-MS), House Science Committee Chair Eddie Bernie Johnson (D-TX), and House Science Committee Ranking Member Frank Lucas (R-OK) echoed her optimism and urgency.
Members also generally agreed on several key components in the bills. Members of both chambers and both sides of the aisle recognized the importance of anchoring supply chains of critical products including semiconductors and pharmaceutical drugs in the United States. A bipartisan group expressed support for the $52 billion in funding for semiconductor incentives that is included in both the USICA and America COMPETES Act. Several Democrats and Republicans also noted that they are working together on an additional tax provision, which is currently not in either bill, to encourage semiconductor design and manufacturing in the United States. Members also agreed on the need to push back against anti-competitive conduct by China such as cyberattacks and intellectual property theft, and to invest in science, technology, education, and mathematics (STEM) education to expand and improve the U.S. workforce.
US-EU Trade and Tech Council: Takeaways and Next Steps
Last month, the US-EU Trade and Technology Council (TTC) held its inaugural ministerial in Pittsburgh: US Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo, and Trade Representative Katherine Tai met with European Commissioners Margrethe Vestager and Valdis Dombrovskis. Only three months after the TTC process was launched at the US-EU summit, the two sides
Transatlantic Summits: Main Takeaways for Tech and Defense
Three summits last week—G-7, NATO, and U.S.-EU—launched a wide range of transatlantic initiatives to coordinate policy, particularly on trade, technology, and defense. These new formats and dialogues can ensure a much deeper level of regulatory cooperation between the United States and Europe by exchanging perspectives, briefing materials, and in some cases, staff. For companies on both sides of the Atlantic, these emerging policy trends also open up new opportunities to engage decision-makers both in Washington and European capitals.
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Senate Passes Landmark Legislation on Innovation and Competition
The Senate voted 68 to 32 to pass one of the most expansive bills on U.S. economic competitiveness in decades. The United States Innovation and Competition Act (“USICA”) is the culmination of three months of bipartisan negotiations after Majority Leader Chuck Schumer (D-NY) invited six Senate committees to propose bills to bolster U.S. leadership in research and development (“R&D”), technological advancement, and economic growth. Before the vote, Leader Schumer remarked that “the ambitions of this legislation are large, but the premise is simple. If we want American workers and American companies to keep leading the world, the federal government must invest in science, basic research, and innovation just as we did decades after the Second World War.” He applauded the bill for “paving the way for the largest investment in science and technology in generations.”
The convincing bipartisan vote to authorize over $200 billion in federal funding reflects broad support for investing in U.S. innovation and competition. The heart of the bill is the Endless Frontier Act authorizing $81 billion to the National Science Foundation (“NSF”) and $17 billion to the Department of Energy (“DOE”) to support R&D across ten key technologies, including artificial intelligence, advanced communications technology, biotechnology, and semiconductors. The bill also includes institutional support, including establishing a new technology and innovation arm at the NSF and hundreds of provisions recognizing the Federal Government’s role in innovation and competition, including support for science, technology, engineering, and mathematics (“STEM”) education; protecting research security and intellectual property rights; and competing globally, including against China. Against the backdrop of a global chips shortage, the bill appropriates $52 billion in emergency funding to support semiconductor manufacturing and R&D and $1.5 billion to support open and interoperable interface radio access networks (“open-RAN”) enabling more secure deployment of 5G.
The bill’s provisions are organized across six divisions:
Division A funds two programs that were enacted as part of the National Defense Authorization Act last year. First, the division appropriates $52 billion to fund programs authorized by the Creating Helpful Incentives to Produce Semiconductors for America Act (“CHIPS Act”), including financial assistance for companies to invest in facilities and equipment for semiconductor manufacturing and R&D, a Department of Defense public-private partnership to ensure a robust semiconductor supply chain, and a Department of Commerce (“DOC”) study on the capabilities of the U.S. industrial base to support semiconductor needs. Second, the division appropriates $1.5 billion to a Public Wireless Supply Chain Innovation Fund, authorized by the Utilizing Strategic Allied Telecommunications Act (“USA Telecommunications Act”), to award grants for companies to research, develop, and deploy 5G and next-generation technology that uses open-RAN.
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House Competition Bill Advances as Alternative to Senate Legislation
As the newly renamed United States Innovation and Competition Act (USICA) (formerly known as the Endless Frontier Act) is considered on the Senate floor, an alternative competition bill is making its way through the House. The bipartisan National Science Foundation (NSF) for the Future Act (H.R. 2225) is aimed at strengthening American
Landmark Legislation Advances in the Senate Commerce Committee with Strong Bipartisan Agreement on Need to Invest in Critical Technologies
On Wednesday, the Senate Commerce, Science, and Transportation Committee marked up and passed what Committee Chair Maria Cantwell (D-WA) called a “tremendous breakthrough” and the most significant research and development (“R&D”) legislation in over a decade. The bill, the Endless Frontier Act, originally introduced by Majority Leader Chuck Schumer (D-NY) and Senator Todd Young (R-IN),