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.
Like with USICA and America COMPETES Act, the National Science Foundation is at the helm of the new authorizations. The bill authorizes $81 billion over five years to the agency to implement more than a dozen initiatives. Of those funds, $20 billion are allotted for the agency to stand up a new Directorate for Technology, Innovation, and Partnerships to support the research, development, and commercialization of critical technologies. Many of the Directorate’s new programs are focused on partnerships between public, private, and nonprofit entities. The bill also authorizes $13 billion to support STEM efforts, including research and engagement of students at all levels of education; STEM learning opportunities including before-school, after-school, and out-of-school programs and summer activities; and workforce development awards.
The bill also includes significant funding authorizations for the Department of Commerce ($11 billion), the National Institute of Standards and Technology ($10 billion), and the Department of Energy ($50 billion). The primary charge for the Department of Commerce is to designate at least 20 “regional and innovation technology hubs” and award 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. The bulk of authorized funds for the National Institute of Standards and Technology is directed at scientific and technical research and services. The bulk for the Department of Energy is directed at administering R&D programs in many areas, including basic energy sciences, advanced scientific computing, clean energy, and microelectronics.
These new programs all appear to be part of a larger and in many ways unprecedented effort to create the conditions for the United States to compete globally. Indeed, the Director of the Office of Science and Technology Policy is charged with developing and submitting to Congress a comprehensive national science and technology strategy to maintain and advance U.S. leadership in science and technology, including in key technology focus areas. The Director must also coordinate with other agencies to review each national security strategy with regard to U.S. research, innovation, and technology transfer activities, including patenting and licensing, that support the national strategy. The bill contemplates consultation with nongovernmental partners as part of that review. These efforts could be groundbreaking in enabling U.S. enterprises to compete effectively with foreign competitors, some of which are financed heavily by their governments.
The Senate will continue to debate the bill through the end of the week, and a vote is expected next week. Speaker of the House Nancy Pelosi (D-CA) has indicated her support of the bill and optimism that the House could take up the bill as early as next week. A favorable vote in the House without any further amendments would put the bill on the path to the President’s desk and ultimate enactment in the coming weeks.