15 USC 4653 - Department of Defense

Collapse to view only § 4653. Department of Defense

§ 4651. Definitions
§ 4652. Semiconductor incentives
§ 4653. Department of Defense
§ 4654. Department of Commerce study on status of microelectronics technologies in the United States industrial base
§ 4655. Funding for development and adoption of measurably secure semiconductors and measurably secure semiconductors supply chains
§ 4656. Advanced microelectronics research and development
§ 4657. Prohibition relating to foreign entities of concern
§ 4658. Defense Production Act of 1950 efforts
§ 4659. Additional authorities

§ 4651. DefinitionsIn this chapter:

(1) The term “appropriate committees of Congress” means—

(A) the Select Committee on Intelligence, the Committee on Energy and Natural Resources, the Committee on Commerce, Science, and Transportation, the Committee on Foreign Relations, the Committee on Armed Services, the Committee on Appropriations, the Committee on Banking, Housing, and Urban Affairs, the Committee on Homeland Security and Governmental Affairs, and the Committee on Finance of the Senate; and

(B) the Permanent Select committee 1

1 So in original. Probably should be “Committee”.

on Intelligence, the Committee on Energy and Commerce, the Committee on Foreign Affairs, the Committee on Armed Services, the Committee on Science, Space, and Technology, the Committee on Appropriations, the Committee on Financial Services, the Committee on Homeland Security, and the Committee on Ways and Means of the House of Representatives..2

2 So in original.

(2) The term “covered entity” means a nonprofit entity, a private entity, a consortium of private entities, or a consortium of nonprofit, public, and private entities with a demonstrated ability to substantially finance, construct, expand, or modernize a facility relating to fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment.

(3) The term “covered incentive”:

(A) means an incentive offered by a governmental entity to a covered entity for the purposes of constructing within the jurisdiction of the governmental entity, or expanding or modernizing an existing facility within that jurisdiction, a facility described in paragraph (2); and

(B) a workforce-related incentive (including a grant agreement relating to workforce training or vocational education), any concession with respect to real property, funding for research and development with respect to semiconductors, and any other incentive determined appropriate by the Secretary, in consultation with the Secretary of State.

(4) The term “person” includes an individual, partnership, association, corporation, organization, or any other combination of individuals.

(5) The term “critical manufacturing industry”—

(A) means an industry, industry group, or a set of related industries or related industry groups—

(i) assigned a North American Industry Classification System code beginning with 31, 32, or 33; and

(ii) for which the applicable industry group or groups in the North American Industry Classification System code cumulatively—(I) manufacture primary products and parts, the sum of which account for not less than 5 percent of the manufacturing value added by industry gross domestic product of the United States; and(II) employ individuals for primary products and parts manufacturing activities that, combined, account for not less than 5 percent of manufacturing employment in the United States; and

(B) may include any other manufacturing industry designated by the Secretary based on the relevance of the manufacturing industry to the national and economic security of the United States, including the impacts of job losses.

(6) The term “foreign entity”—

(A) means—

(i) a government of a foreign country and a foreign political party;

(ii) a natural person who is not a lawful permanent resident of the United States, citizen of the United States, or any other protected individual (as such term is defined in section 1324b(a)(3) of title 8; or

(iii) a partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country; and

(B) includes—

(i) any person owned by, controlled by, or subject to the jurisdiction or direction of a an entity listed in subparagraph (A);

(ii) any person, wherever located, who acts as an agent, representative, or employee of an entity listed in subparagraph (A);

(iii) any person who acts in any other capacity at the order, request, or under the direction or control, of an entity listed in subparagraph (A), or of a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in majority part by an entity listed in subparagraph (A);

(iv) any person who directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, owns 25 percent or more of the equity interests of an entity listed in subparagraph (A);

(v) any person with significant responsibility to control, manage, or direct an entity listed in subparagraph (A);

(vi) any person, wherever located, who is a citizen or resident of a country controlled by an entity listed in subparagraph (A); or

(vii) any corporation, partnership, association, or other organization organized under the laws of a country controlled by an entity listed in subparagraph (A).

(7) The term “foreign country of concern” means—

(A) a country that is a covered nation (as defined in section 4872(d) of title 10); and

(B) any country that the Secretary, in consultation with the Secretary of Defense, the Secretary of State, and the Director of National Intelligence, determines to be engaged in conduct that is detrimental to the national security or foreign policy of the United States.

(8) The term “foreign entity of concern” means any foreign entity that is—

(A) designated as a foreign terrorist organization by the Secretary of State under section 1189 of title 8;

(B) included on the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury;

(C) owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is listed in section 2533c 3

3 See References in Text note below.

of title 10; or

(D) alleged by the Attorney General to have been involved in activities for which a conviction was obtained under—

(i) chapter 37 of title 18 (commonly known as the “Espionage Act”) (18 U.S.C. 792 [791] et seq.);

(ii) section 951 or 1030 of title 18;

(iii) chapter 90 of title 18 (commonly known as the “Economic Espionage Act of 1996”);

(iv) the Arms Export Control Act (22 U.S.C. 2751 et seq.);

(v) sections 2274, 2275, 2276, 2277, or 2284 of title 42;

(vi) the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.); or

(vii) the International Economic Emergency Powers Act 3 (50 U.S.C. 1701 et seq.); or

(E) determined by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence, to be engaged in unauthorized conduct that is detrimental to the national security or foreign policy of the United States under this chapter.

(9) The term “governmental entity” means a State or local government.

(10) The term “mature technology node” has the meaning given the term by the Secretary.

(11) The term “nonprofit entity” means an entity described in section 501(c)(3) of title 26 and exempt from taxation under section 501(a) of title 26.

(12) The term “Secretary” means the Secretary of Commerce.

(13) The term “semiconductor” has the meaning given that term by the Secretary.

(Pub. L. 116–283, div. H, title XCIX, § 9901, Jan. 1, 2021, 134 Stat. 4843; Pub. L. 117–167, div. A, § 103(a), Aug. 9, 2022, 136 Stat. 1379.)

§ 4652. Semiconductor incentives

(a) Financial assistance program

(1) In general

(2) Procedure

(A) In general

(B) EligibilityIn order for a covered entity to qualify for financial assistance under this section, the covered entity shall demonstrate to the Secretary, in the application submitted by the covered entity under subparagraph (A), that—

(i) the covered entity has a documented interest in constructing, expanding, or modernizing a facility described in paragraph (1) 1

1 So in original. Probably should be followed by a semicolon.

(ii) with respect to the project described in clause (i), the covered entity has—(I) been offered a covered incentive;(II) made commitments to worker and community investment, including through—(aa) training and education benefits paid by the covered entity; and(bb) programs to expand employment opportunity for economically disadvantaged individuals; and(III) secured commitments from regional educational and training entities and institutions of higher education to provide workforce training, including programming for training and job placement of economically disadvantaged individuals;(IV) an executable plan to sustain the facility described in clause (i) without additional Federal financial assistance under this subsection for facility support;(V) determined—(aa) the type of semiconductor technology, equipment, materials, or research and development the covered entity will produce at the facility described in clause (i); and(bb) the customers, or categories of customers, to which the covered entity plans to sell the semiconductor technology, equipment, materials, or research and development described in item (aa); and(VI) documented, to the extent practicable, workforce needs and developed a strategy to meet such workforce needs consistent with the commitments described in subclauses (II) and (III);

(iii) with respect to the project described in clause (i), the covered entity has an executable plan to identify and mitigate relevant semiconductor supply chain security risks, such as risks associated with access, availability, confidentiality, integrity, and a lack of geographic diversification in the covered entity’s supply chain; and

(iv) with respect to any project for the production, assembly, or packaging of semiconductors, the covered entity has implemented policies and procedures to combat cloning, counterfeiting, and relabeling of semiconductors, as applicable.

(C) Considerations for reviewWith respect to the review by the Secretary of an application submitted by a covered entity under subparagraph (A)—

(i) the Secretary may not approve the application unless the Secretary—(I) confirms that the covered entity has satisfied the eligibility criteria under subparagraph (B);(II) determines that the project to which the application relates is in the economic and national security interests of the United States; and(III) has notified the appropriate committees of Congress not later than 15 days before making any commitment to provide a grant to any covered entity that exceeds $10,000,000;

(ii) the Secretary may consider whether—(I) the covered entity has previously received financial assistance made under this subsection;(II) the governmental entity offering the applicable covered incentive has benefitted from financial assistance previously provided under this subsection;(III) the covered entity has demonstrated that they are responsive to the national security needs or requirements established by the Intelligence Community (or an agency thereof), the National Nuclear Security Administration, or the Department of Defense; and(IV) when practicable, a consortium that is considered a covered entity includes a small business concern, as defined under section 632 of this title, notwithstanding section 121.103 of title 13, Code of Federal Regulations;

(iii) the Secretary shall consider the type of semiconductor technology produced by the covered entity and whether that semiconductor technology advances the economic and national security interests of the United States;

(iv) the Secretary may not approve an application, unless the covered entity provides a plan that does not use Federal financial assistance to assist efforts to physically relocate existing facility infrastructure to another jurisdiction within the United States, unless the project is in the interest of the United States; and

(v) the Secretary may not approve an application if the Secretary determines that the covered entity is a foreign entity of concern.

(D) PriorityIn awarding Federal financial assistance to covered entities under this subsection, the Secretary shall—

(i) give priority to ensuring that a covered entity receiving financial assistance will—(I) manufacture semiconductors necessary to address gaps and vulnerabilities in the domestic supply chain across a diverse range of technology and process nodes; and(II) provide a secure supply of semiconductors necessary for the national security, manufacturing, critical infrastructure, and technology leadership of the United States and other essential elements of the economy of the United States; and

(ii) ensure that the assistance is awarded to covered entities for both advanced and mature technology nodes to meet the priorities described in clause (i).

(E) Records

(3) Amount

(A) In general

(B) Larger investmentFederal investment in any individual project shall not exceed $3,000,000,000 unless the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence, recommends to the President, and the President certifies and reports to the appropriate committees of Congress, that a larger investment is necessary to—

(i) significantly increase the proportion of reliable domestic supply of semiconductors relevant for national security and economic competitiveness that can be met through domestic production; and

(ii) meet the needs of national security.

(4) Use of fundsA covered entity that receives a financial assistance award under this subsection may only use the financial assistance award amounts to—

(A) finance the construction, expansion, or modernization of a facility or equipment to be used for the purposes described in paragraph (1), as documented in the application submitted by the covered entity under paragraph (2)(B), as determined necessary by the Secretary for purposes relating to the national security and economic competitiveness of the United States;

(B) support workforce development for a facility described in subparagraph (A);

(D) pay reasonable costs related to the operating expenses for a facility described in subparagraph (A), including specialized workforce, essential materials, and complex equipment maintenance, as determined by the Secretary.

(5) Clawback

(A) Target datesFor all awards to covered entities, the Secretary shall—

(i) determine target dates by which a project shall commence and complete; and

(ii) set these dates by the time of award.

(B) Progressive recovery for delays

(C) Technology clawbackThe Secretary shall recover the full amount of an award provided to a covered entity under this subsection if, during the applicable term with respect to the award, the covered entity knowingly engages in any joint research or technology licensing effort—

(i) with a foreign entity of concern; and

(ii) that relates to a technology or product that raises national security concerns, as determined by the Secretary and communicated to the covered entity before engaging in such joint research or technology licensing.

(D) WaiverIn the case of delayed projects, the Secretary may waive elements of the clawback provisions incorporated in each award after—

(i) making a formal determination that circumstances beyond the ability of the covered entity to foresee or control are responsible for delays; and

(ii) submitting congressional notification.

(E) Congressional notificationThe Secretary shall notify appropriate committees of Congress—

(i) of the clawback provisions attending each such award; and

(ii) of any waivers provided, not later than 15 days after the date on which such a waiver was provided.

(6) Expansion clawback

(A) Definition of legacy semiconductor

(i) In generalIn this paragraph, the term “legacy semiconductor”—(I) includes—(aa) a semiconductor technology that is of the 28 nanometer generation or older for logic;(bb) with respect to memory technology, analog technology, packaging technology, and any other relevant technology, any legacy generation of semiconductor technology relative to the generation described in item (aa), as determined by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence; and(cc) any additional semiconductor technology identified by the Secretary in a public notice issued under clause (ii); and(II) does not include a semiconductor that is critical to national security, as determined by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence.

(ii) Updates

(iii) Functions of the Secretary

(iv) Consultation

(v) ConsiderationsIn carrying out clause (ii), the Secretary shall consider—(I) state-of-the-art semiconductor technologies in the United States and internationally, including in foreign countries of concern; and(II) consistency with export controls relating to semiconductors.

(B) Definition of semiconductor manufacturingIn this paragraph, the term “semiconductor manufacturing”—

(i) has the meaning given the term by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence; and

(ii) includes front-end semiconductor fabrication.

(i) In general

(ii) ExceptionsThe prohibition in the agreement required under clause (i) shall not apply to—(I) existing facilities or equipment of a covered entity for manufacturing legacy semiconductors; or(II) significant transactions involving the material expansion of semiconductor manufacturing capacity that—(aa) produces legacy semiconductors; and(bb) predominately serves the market of a foreign country of concern.

(iii) Affiliated group

(D) Notification requirements

(E) Violation of agreement

(i) Notification to covered entitiesNot later than 90 days after the date of receipt of a notification described in subparagraph (D) from a covered entity, the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence, shall—(I) determine whether the significant transaction described in the notification would be a violation of the agreement of the covered entity required under subparagraph (C)(i); and(II) notify the covered entity of the Secretary’s decision under subclause (I).

(ii) Opportunity to remedyUpon a notification under clause (i)(II) that a planned significant transaction of a covered entity is a violation of the agreement of the covered entity required under subparagraph (C)(i), the Secretary shall—(I) immediately request from the covered entity tangible proof that the planned significant transaction has ceased or been abandoned; and(II) provide the covered entity 45 days to produce and provide to the Secretary the tangible proof described in subclause (I).

(iii) Failure by the covered entity to cease or remedy the activity

(iv) MitigationIf the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence, determines that a covered entity planning a significant transaction that would violate the agreement required under subparagraph (C)(i) could take measures in connection with the transaction to mitigate any risk to national security, the Secretary—(I) may negotiate, enter into, and enforce any agreement or condition for the mitigation; and,(II) waive the recovery requirement under clause (iii).

(F) Submission of records

(i) In general

(ii) Eligibility

(G) Confidentiality of records

(i) In generalSubject to clause (ii), any information derived from records or necessary information disclosed by a covered entity to the Secretary under this section—(I) shall be exempt from disclosure under section 552(b)(3) of title 5; and(II) shall not be made public.

(ii) ExceptionsClause (i) shall not prevent the disclosure of any of the following by the Secretary:(I) Information relevant to any administrative or judicial action or proceeding.(II) Information that a covered entity has consented to be disclosed to third parties.(III) Information necessary to fulfill the requirement of the congressional notification under subparagraph (H).

(H) Congressional notificationNot later than 60 days after the date on which the Secretary finds a violation by a covered entity of an agreement required under subparagraph (C)(i), and after providing the covered entity with an opportunity to provide information in response to that finding, the Secretary shall provide to the appropriate Committees of Congress—

(i) a notification of the violation;

(ii) a brief description of how the Secretary determined the covered entity to be in violation; and

(iii) a summary of any actions or planned actions by the Secretary in response to the violation.

(I) Regulations

(b) Coordination required

(1) not later than 2 years after the date of disbursement of the first financial award under subsection (a), and biennially thereafter for 10 years, conduct a review of the program established under subsection (a), which shall include, at a minimum—

(A) a determination of the number of instances in which financial assistance awards were provided under that subsection during the period covered by the review;

(B) an evaluation of how—

(i) the program is being carried out, including how recipients of financial assistance awards are being selected under the program;

(ii) other Federal programs are leveraged for manufacturing, research, and training to complement the financial assistance awards awarded under the program; and

(iii) the Federal Government could take specific actions to address shortages in the semiconductor supply chain, including—(I) demand-side incentives, including incentives related to the information and communications technology supply chain; and(II) additional incentives, at national and global scales, to accelerate utilization of leading-edge semiconductor nodes to address shortages in mature semiconductor nodes; and

(i) facilities described in subsection (a)(1) that were constructed, expanded, or modernized as a result of awards made under the program;

(ii) research and development carried out with awards made under the program;

(iii) workforce training programs carried out with awards made under the program, including efforts to hire individuals from disadvantaged populations; and

(iv) the impact of projects on the United States share of global microelectronics production;

(v) how projects are supporting the semiconductor needs of critical infrastructure industries in the United States, including those industries designated by the Cybersecurity and Infrastructure Security Agency as essential infrastructure industries; and

(D) drawing on data made available by the Department of Labor or other sources, to the extent practicable, an analysis of—

(i) semiconductor industry data regarding businesses that are—(I) majority owned and controlled by minority individuals;(II) majority owned and controlled by women; or(III) majority owned and controlled by both women and minority individuals;

(ii) the number and amount of contracts and subcontracts awarded by each covered entity using funds made available under subsection (a) disaggregated by recipients of each such contract or subcontracts that are majority owned and controlled by minority individuals and majority owned and controlled by women; and

(iii) aggregated workforce data, including data by race or ethnicity, sex, and job categories.2

2 So in original. The period probably should be “; and”.

(2) submit to the appropriate committees of Congress the results of each review conducted under paragraph (1).

(d) Sense of CongressIt is the sense of Congress that, in carrying out subsection (a), the Secretary should allocate funds in a manner that—

(1) strengthens the security and resilience of the semiconductor supply chain, including by mitigating gaps and vulnerabilities;

(2) provides a supply of secure semiconductors relevant for national security;

(3) strengthens the leadership of the United States in semiconductor technology;

(4) grows the economy of the United States and supports job creation in the United States;

(5) bolsters the semiconductor and skilled technical workforces in the United States;

(6) promotes the inclusion of economically disadvantaged individuals and small businesses; and

(7) improves the resiliency of the semiconductor supply chains of critical manufacturing industries.

(e) Additional assistance for mature technology nodes

(1) In general

(2) Eligibility and requirementsIn order for an entity to qualify to receive Federal financial assistance under this subsection, the covered entity shall agree to—

(A) submit an application under subsection (a)(2)(A);

(B) meet the eligibility requirements under subsection (a)(2)(B);

(C)

(i) provide equipment or materials for the fabrication, assembly, testing, or packaging of semiconductors at mature technology nodes in the United States; or

(ii) fabricate, assemble using packaging, or test semiconductors at mature technology nodes in the United States;

(D) commit to using any Federal financial assistance received under this section to increase the production of semiconductors at mature technology nodes; and

(E) be subject to the considerations described in subsection (a)(2)(C).

(3) Procedures

(4) Considerations

(5) Priority

(6) Authorization of appropriations

(f) Construction projects

(g) Loans and loan guarantees

(1) In general

(2) ConditionsThe Secretary may select eligible projects to receive loans or loan guarantees under this subsection if the Secretary determines that—

(A) the covered entity—

(i) has a reasonable prospect of repaying the principal and interest on the loan; and

(ii) has met such other criteria as may be established and published by the Secretary; and

(B) the amount of the loan (when combined with amounts available to the loan recipient from other sources) will be sufficient to carry out the project.

(3) Reasonable prospect of repaymentThe Secretary shall base a determination of whether there is a reasonable prospect of repayment of the principal and interest on a loan under paragraph (2)(A)(i) on a comprehensive evaluation of whether the covered entity has a reasonable prospect of repaying the principal and interest, including, as applicable, an evaluation of—

(A) the strength of the contractual terms of the project the covered entity plans to perform (if commercially reasonably available);

(B) the forecast of noncontractual cash flows supported by market projections from reputable sources, as determined by the Secretary;

(D) the projected financial strength of the covered entity—

(i) at the time of loan close; and

(ii) throughout the loan term after the project is completed;

(E) the financial strength of the investors and strategic partners of the covered entity, if applicable;

(F) other financial metrics and analyses that the private lending community and nationally recognized credit rating agencies rely on, as determined appropriate by the Secretary; and

(G) such other criteria the Secretary may determine relevant.

(4) Rates, terms, and repayments of loansA loan provided under this subsection—

(A) shall have an interest rate that does not exceed a level that the Secretary determines appropriate, taking into account, as of the date on which the loan is made, the cost of funds to the Department of the Treasury for obligations of comparable maturity; and

(B) shall have a term of not more than 25 years.

(5) Additional terms

(6) Responsible lenderNo loan may be guaranteed under this subsection, unless the Secretary determines that—

(A) the lender is responsible; and

(B) adequate provision is made for servicing the loan on reasonable terms and protecting the financial interest of the United States.

(7) Advanced budget authority

(8) Continued oversight

(h) Authority relating to environmental review

(1) In generalNotwithstanding any other provision of law, the provision by the Secretary of Federal financial assistance for a project described in this section that satisfies the requirements under subsection (a)(2)(C)(i) of this section shall not be considered to be a major Federal action under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) (referred to in this subsection as “NEPA”) or an undertaking for the purposes of division A of subtitle III of title 54 if—

(A) the activity described in the application for that project has commenced not later than December 31, 2024;

(B) the Federal financial assistance provided is in the form of a loan or loan guarantee; or

(C) the Federal financial assistance provided, excluding any loan or loan guarantee, comprises not more than 10 percent of the total estimated cost of the project.

(2) Savings clause

(i) OversightNot later than 4 years after disbursement of the first financial award under subsection (a), the Inspector General of the Department of Commerce shall audit the program under this section to assess—

(1) whether the eligibility requirements for covered entities receiving financial assistance under the program are met;

(2) whether eligible entities use the financial assistance received under the program in accordance with the requirements of this section;

(3) whether the covered entities receiving financial assistance under this program have carried out the commitments made to worker and community investment under subsection (a)(2)(B)(ii)(II) by the target date for completion set by the Secretary under subsection (a)(5)(A);

(4) whether the required agreement entered into by covered entities and the Secretary under subsection (a)(6)(C)(i), including the notification process, has been carried out to provide covered entities sufficient guidance about a violation of the required agreement;

(5) whether the Secretary has provided timely Congressional notification about violations of the required agreement under subsection (a)(6)(C)(i), including the required information on how the Secretary reached a determination of whether a covered entity was in violation under subsection (a)(6)(E); and

(6) whether the Secretary has sufficiently reviewed any covered entity engaging in a listed exception under subsection (a)(6)(C)(ii).

(j) Prohibition on use of funds

(Pub. L. 116–283, div. H, title XCIX, § 9902, Jan. 1, 2021, 134 Stat. 4846; Pub. L. 117–167, div. A, §§ 103(b), 105(a), Aug. 9, 2022, 136 Stat. 1380, 1391; Pub. L. 118–105, § 2(1), Oct. 2, 2024, 138 Stat. 1587.)

§ 4653. Department of Defense

(a) Department of Defense efforts

(1) In general

(2) Risk mitigation requirementsA participant in a consortium formed with incentives under paragraph (1)—

(A) shall have the potential to enable design, perform fabrication, assembly, package, or test functions for microelectronics deemed critical to national security as defined by the National Security Advisor and the Secretary of Defense;

(B) may be a fabless company migrating its designs to the facility envisioned in paragraph (1) or migrating to an existing facility onshore;

(C) may be companies, including fabless companies and companies that procure large quantities of microelectronics, willing to co-invest to achieve the objectives set forth in paragraph (1);

(D) shall include management processes to identify and mitigate supply chain security risks; and

(E) shall be capable of providing microelectronic components that are consistent with applicable measurably secure supply chain and operational security standards established under section 224(b) of the National Defense Authorization Act for Fiscal Year 2020 (Public Law 116–92).

(3) National security considerationsThe Secretary of Defense and the Director of National Intelligence shall select participants for each consortium and or 1

1 So in original.

partnership formed with incentives under paragraph (1). In selecting such participants, the Secretary and the Director may jointly consider whether the companies—

(A) have participated in previous programs and projects of the Department of Defense, Department of Energy, or the intelligence community, including—

(i) the Trusted Integrated Circuit program of the Intelligence Advanced Research Projects Activity;

(ii) trusted and assured microelectronics projects, as administered by the Department of Defense;

(iii) the Electronics Resurgence Initiative program of the Defense Advanced Research Projects Agency; or

(iv) relevant semiconductor research programs of the Advanced Research Projects Agency–Energy;

(B) have demonstrated an ongoing commitment to performing contracts for the Department of Defense and the intelligence community;

(C) are approved by the Defense Counterintelligence and Security Agency or the Office of the Director of National Intelligence as presenting an acceptable security risk, taking into account supply chain assurance vulnerabilities, counterintelligence risks, and any risks presented by companies whose beneficial owners are located outside the United States; and

(D) are evaluated periodically for foreign ownership, control, or influence by a foreign entity of concern.

(4) Nontraditional defense contractors and commercial entities

(5) ImplementationSubject to the availability of appropriations for such purposes, the Secretary of Defense—

(A) shall carry out paragraph (1) jointly through the Office of the Under Secretary of Defense for Research and Engineering and the Office of the Under Secretary of Defense for Acquisition and Sustainment; and

(B) may carry out paragraph (1) in collaboration with any such other component of the Department of Defense as the Secretary of Defense considers appropriate.

(6) Other initiatives

(A) Required initiatives

(B) Support plan required

(7) Reports

(A) Report by Secretary of Defense

(B) Biennial reports by Comptroller General of the United States

(b) National network for microelectronics research and development

(1) In generalSubject to the availability of appropriations for such purposes, the Secretary of Defense shall establish a national network for microelectronics research and development—

(A) to enable the laboratory to fabrication transition of microelectronics innovations in the United States; and

(B) to expand the global leadership in microelectronics of the United States.

(2) ActivitiesThe national network for microelectronics research and development shall—

(A) enable cost effective exploration of new materials, devices, and architectures, and prototyping in domestic facilities to safeguard domestic intellectual property;

(B) accelerate the transition of new technologies to domestic microelectronics manufacturers; and

(C) conduct other relevant activities deemed necessary by the Secretary of Defense for accomplishing the purposes of the national network for microelectronics research and development.

(3) Selection of entities

(A) In general

(B) Geographic diversity

(Pub. L. 116–283, div. H, title XCIX, § 9903, Jan. 1, 2021, 134 Stat. 4849; Pub. L. 117–81, div. A, title II, § 217, Dec. 27, 2021, 135 Stat. 1596.)

§ 4654. Department of Commerce study on status of microelectronics technologies in the United States industrial base

(a) In general

(b) Response to survey

To the extent authorized by section 4555 of title 50 and section 1

1 So in original. Probably should be “part”.

702 of title 15, Code of Federal Regulations, the Secretary shall ensure all relevant potential respondents reply to the survey, including the following:

(1) Corporations, partnerships, associations, or any other organized groups domiciled and with substantial operations in the United States.

(2) Corporations, partnerships, associations, or any other organized groups with a physical presence of any kind in the United States.

(3) Foreign domiciled corporations, partnerships, associations, or any other organized groups with a physical presence of any kind in the United States.

To the extent authorized by section 4555 of title 50 and section 1 702 of title 15, Code of Federal Regulations, the information sought from a responding entity specified in subsection (b) shall include, at minimum, information on the following with respect to the manufacture, design, or end use of microelectronics by such entity:

(1) An identification of the geographic scope of operations.

(2) Information on relevant cost structures.

(3) An identification of types of microelectronics development, manufacture, assembly, test, and packaging equipment in operation at such an entity.

(4) An identification of all relevant intellectual property, raw materials, and semi-finished goods and components sourced domestically and abroad by such an entity.

(5) Specifications of the microelectronics manufactured or designed by such an entity, descriptions of the end-uses of such microelectronics, and a description of any technical support provided to end-users of such microelectronics by such an entity.

(6) Information on domestic and export market sales by such an entity.

(7) Information on the financial performance, including income and expenditures, of such an entity.

(8) A list of all foreign and domestic subsidies, and any other financial incentives, received by such an entity in each market in which such entity operates.

(9) A list of regulatory or other informational requests about the respondents’ operations, sales, or other proprietary information by the People’s Republic of China entities under its direction or officials of the Chinese Communist Party, a description of the nature of each request, and the type of information provided.

(10) Information on any joint ventures, technology licensing agreements, and cooperative research or production arrangements of such an entity.

(11) A description of efforts by such an entity to evaluate and control supply chain risks.

(12) A list and description of any sales, licensing agreements, or partnerships between such an entity and the People’s Liberation Army or People’s Armed Police, including any business relationships with entities through which such sales, licensing agreements, or partnerships may occur.

(d) Report

(1) In general

The Secretary shall, in consultation with the heads of other appropriate Federal departments and agencies, as appropriate, including the Secretary of Defense, Secretary of Homeland Security, and Secretary of Energy, submit to Congress a report on the results of the review required by subsection (a). The report shall include the following:

(A) An assessment of the results of the review.

(B) A list of critical technology areas impacted by potential disruptions in production of microelectronics, and a detailed description and assessment of the impact of such potential disruptions on such areas.

(C) A description and assessment of gaps and vulnerabilities in the microelectronics supply chain and the national industrial supply base.

(2) Form

(Pub. L. 116–283, div. H, title XCIX, § 9904, Jan. 1, 2021, 134 Stat. 4852.)

§ 4655. Funding for development and adoption of measurably secure semiconductors and measurably secure semiconductors supply chains

(a) Multilateral Semiconductors Security Fund

(1) Establishment of fund

(2) Reporting requirement

(3) Investment of amounts

(A) Investment of amounts

(B) Interest and proceeds

(4) Use of Fund

(A) In generalSubject to subparagraph (B), amounts in the Fund shall be available, as provided in advance in an appropriations Act, to the Secretary of State—

(i) to provide funding through the common funding mechanism described in subsection (b)(1) to support the development and adoption of measurably secure semiconductors and measurably secure semiconductors supply chains; and

(ii) to otherwise carry out this section.

(B) Availability contingent on international arrangement or agreement

(i) In general

(ii) Consultation

(b) Common funding mechanism for development and adoption of measurably secure semiconductors and measurably secure semiconductors supply chains

(1) In general

(2) CommitmentsIn creating and sustaining a common funding mechanism described in paragraph (1), the Secretary of State should promote efforts among foreign partners to—

(A) establish transparency requirements for any subsidies or other financial benefits (including revenue foregone) provided to semiconductors firms located in or outside such countries;

(B) establish consistent policies with respect to countries that—

(i) are not participating in the common funding mechanism; and

(ii) do not meet transparency requirements established under subparagraph (A);

(C) promote harmonized treatment of semiconductors and verification processes for items being exported to a country considered a national security risk by a country participating in the common funding mechanism;

(D) establish consistent policies and common external policies to address nonmarket economies as the behavior of such countries pertains to semiconductors;

(E) align policies on supply chain integrity and semiconductors security, including with respect to protection and enforcement of intellectual property rights; and

(F) promote harmonized foreign direct investment screening measures and export control policies with respect to semiconductors to align with national, multilateral, and plurilateral security priorities.

(1) In general

(2) Information requiredThe information required by this subsection includes—

(A) the amount of each such expenditure;

(B) an identification of the recipient or beneficiary; and

(3) Arrangements or agreements

(Pub. L. 116–283, div. H, title XCIX, § 9905, Jan. 1, 2021, 134 Stat. 4854; Pub. L. 118–31, div. F, title LXVII, § 6707(b)(1)(B), Dec. 22, 2023, 137 Stat. 1018.)

§ 4656. Advanced microelectronics research and development

(a) Subcommittee on microelectronics leadership

(1) Establishment required

(2) MembershipThe Subcommittee shall be composed of the following members:

(A) The Secretary of Defense.

(B) The Secretary of Energy.

(D) The Secretary of Commerce.

(E) The Secretary of State.

(F) The Secretary of Homeland Security.

(G) The United States Trade Representative.

(H) The Director of National Intelligence.

(I) The heads of such other departments and agencies of the Federal Government as the President determines appropriate.

(3) DutiesThe duties of the Subcommittee are as follows:

(A) National strategy on microelectronics research

(i) In generalIn consultation with the advisory committee established in (b), and other appropriate stakeholders in the microelectronics industry and academia, the Subcommittee shall develop a national strategy on microelectronics research, development, manufacturing, and supply chain security to—(I) accelerate the domestic development and production of microelectronics and strengthen the domestic microelectronics workforce; and(II) ensure that the United States is a global leader in the field of microelectronics research and development.

(ii) ElementsThe strategy developed under this subparagraph shall address—(I) activities that may be carried out to strengthen engagement and outreach between the Department of Defense and industry, academia, international partners of the United States, and other departments and agencies of the Federal Government on issues relating to microelectronics;(II) priorities for research and development to accelerate the advancement and adoption of innovative microelectronics and new uses of microelectronics and components, including for technologies based on organic and inorganic materials;(III) the role of diplomacy and trade in maintaining the position of the United States as a global leader in the field of microelectronics;(IV) the potential role of a Federal laboratory, center, or incubator exclusively focused on the research and development of microelectronics, as described in section 231(b)(15) of the National Defense Authorization Act for Fiscal Year 2017 (as added by section 276 of this Act) in carrying out the strategy and plan required under this subparagraph; and(V) such other activities as the Subcommittee determines may be appropriate to overcome future challenges to the innovation, competitiveness, supply chain integrity, and workforce development of the United States in the field of microelectronics.

(B) Fostering coordination of research and development

(i) Progress briefing

(ii) Strategy update

(4) Sunset

(b) Industrial advisory committee

(1) Establishment

(2) DutiesThe advisory committee shall assess and provide guidance to the United States Government on—

(A) science and technology needs of the nation’s domestic microelectronics industry;

(B) the extent to which the strategy developed under subsection (a)(3) is helping maintain United States leadership in microelectronics manufacturing;

(D) opportunities for new public-private partnerships to advance microelectronics research, development, and domestic manufacturing.

(3) FACA exemption

(1) Establishment

(2) FunctionsThe functions of the center established under paragraph (1) shall be as follows:

(A) To conduct advanced semiconductor manufacturing, design and packaging research, and prototyping that strengthens the entire domestic ecosystem and is aligned with the strategy required under subsection (a)(3)(A) with emphasis on the following:

(i) Semiconductor advanced test, assembly, and packaging capability in the domestic ecosystem.

(ii) Materials characterization, instrumentation and testing for next generation microelectronics.

(iii) Virtualization and automation of maintenance of semiconductor machinery.

(iv) Metrology for security and supply chain verification.

(B) To establish and capitalize an investment fund, in partnership with the private sector, to support startups and collaborations between startups, academia, established companies, and new ventures, with the goal of commercializing innovations that contribute to the domestic semiconductor ecosystem, including—

(i) advanced metrology and characterization for manufacturing of microchips using 3 nanometer transistor processes or more advanced processes; and

(ii) metrology for security and supply chain verification.

(C) To work with the Secretary of Labor, the Director of the National Science Foundation, the Secretary of Energy, the private sector, institutions of higher education, and workforce training entities to incentivize and expand geographically diverse participation in graduate, undergraduate, and community college programs relevant to microelectronics, including through—

(i) the development and dissemination of curricula and research training experiences; and

(ii) the development of workforce training programs and apprenticeships in advanced microelectronic design, research, fabrication, and packaging capabilities.

(d) National Advanced Packaging Manufacturing Program

(e) Microelectronics research at the National Institute of Standards and Technology

(f) Creation of a Manufacturing USA instituteSubject to the availability of appropriations for such purpose, the Director of the National Institute of Standards and Technology may establish not more than 3 Manufacturing USA Institutes described in section 278s(d) of this title that are focused on semiconductor manufacturing. The Secretary of Commerce may award financial assistance to any Manufacturing USA Institute for work relating to semiconductor manufacturing. Such institutes may emphasize the following:

(1) Research to support the virtualization and automation of maintenance of semiconductor machinery.

(2) Development of new advanced test, assembly and packaging capabilities.

(3) Developing and deploying educational and skills training curricula needed to support the industry sector and ensure the United States can build and maintain a trusted and predictable talent pipeline.

(g) Domestic production requirements

(h) Construction projects

(Pub. L. 116–283, div. H, title XCIX, § 9906, Jan. 1, 2021, 134 Stat. 4856; Pub. L. 117–167, div. A, § 103(c), Aug. 9, 2022, 136 Stat. 1388.)

§ 4657. Prohibition relating to foreign entities of concern

None of the funds authorized to be appropriated to carry out this chapter may be provided to a foreign entity of concern.

(Pub. L. 116–283, div. H, title XCIX, § 9907, Jan. 1, 2021, 134 Stat. 4860.)

§ 4658. Defense Production Act of 1950 efforts

(a) In general

Not later than 180 days after January 1, 2021, the President shall submit to Congress a report on a plan of action for any use of authorities available in title III of the Defense Production Act of 1950 (50 U.S.C. 4531 et seq.) to establish or enhance a domestic production capability for microelectronics technologies and related technologies, subject to—

(1) the availability of appropriations for that purpose; and

(2) a determination made under the plan pursuant to such title III that such technologies are essential to the national defense and that domestic industrial capabilities are insufficient to meet these needs.

(b) Coordination

(Pub. L. 116–283, div. H, title XCIX, § 9908, Jan. 1, 2021, 134 Stat. 4860.)

§ 4659. Additional authorities

(a) In generalIn carrying out the responsibilities of the Department of Commerce under this chapter, the Secretary may—

(1) enter into agreements, including contracts, grants and cooperative agreements, and other transactions as may be necessary and on such terms as the Secretary considers appropriate;

(2) make advance payments under agreements and other transactions authorized under paragraph (1) without regard to section 3324 of title 31;

(3) require a person or other entity to make payments to the Department of Commerce upon application and as a condition for receiving support through an award of assistance or other transaction;

(4) procure temporary and intermittent services of experts and consultants in accordance with section 3109 of title 5;

(5) notwithstanding section 3104 of title 5 or the provisions of any other law relating to the appointment, number, classification, or compensation of employees, make appointments of scientific, engineering, and professional personnel, and fix the basic pay of such personnel at a rate to be determined by the Secretary at rates not in excess of the highest total annual compensation payable at the rate determined under section 104 of title 3, except that the Secretary shall appoint not more than 25 personnel under this paragraph;

(6) with the consent of another Federal agency, enter into an agreement with that Federal agency to use, with or without reimbursement, any service, equipment, personnel, or facility of that Federal agency; and

(7) establish such rules, regulations, and procedures as the Secretary considers appropriate.

(b) Requirement

(1) Definition

(2) Option to serve as lead agency

(d) Categorical exclusions

(1) Establishment of categorical exclusionsEach of the following categorical exclusions is established for the National Institute of Standards and Technology with respect to a covered activity and, beginning on October 2, 2024, is available for use by the Secretary with respect to a covered activity:

(A) Categorical exclusion 17.04.d (relating to the acquisition of machinery and equipment) in the document entitled “EDA Program to Implement the National Environmental Policy Act of 1969 and Other Federal Environmental Mandates As Required” (Directive No. 17.02–2; effective date October 14, 1992).

(B) Categorical exclusion A9 in Appendix A to subpart D of part 1021 of title 10, Code of Federal Regulations, or any successor regulation.

(C) Categorical exclusions B1.24, B1.31, B2.5, and B5.1 in Appendix B to subpart D of part 1021 of title 10, Code of Federal Regulations, or any successor regulation.

(D) The categorical exclusions described in paragraphs (4) and (13) of section 50.19(b) of title 24, Code of Federal Regulations, or any successor regulation.

(E) Categorical exclusion (c)(1) in Appendix B to part 651 of title 32, Code of Federal Regulations, or any successor regulation.

(F) Categorical exclusions A2.3.8 and A2.3.14 in Appendix B to part 989 of title 32, Code of Federal Regulations, or any successor regulation.

(2) Additional categorical exclusionsNotwithstanding any other provision of law, each of the following shall be treated as a category of action categorically excluded from the requirements relating to environmental assessments and environmental impact statements under section 1501.4 of title 40, Code of Federal Regulations, or any successor regulation:

(A) The provision by the Secretary of any Federal financial assistance for a project described in section 4652 of this title, if the facility that is the subject of the project is on or adjacent to a site—

(i) that is owned or leased by the covered entity to which Federal financial assistance is provided for that project; and

(ii) on which, as of the date on which the Secretary provides that Federal financial assistance, substantially similar construction, expansion, or modernization is being or has been carried out, such that the facility would not more than double existing developed acreage or on-site supporting infrastructure.

(B) The provision by the Secretary of Defense of any Federal financial assistance relating to—

(i) the creation, expansion, or modernization of one or more facilities described in the second sentence of section 4653(a)(1) of this title; or

(ii) carrying out section 4653(b) of this title, as in effect on October 2, 2024.

(C) Any activity undertaken by the Secretary relating to carrying out section 4656 of this title, as in effect on October 2, 2024.

(e) Incorporation of prior planning decisions

(1) Definition

(2) Reliance on prior studies and decisionsIn completing an environmental review under NEPA for a covered activity, the Secretary may consider and, as appropriate, rely on or adopt prior studies and decisions, if the Secretary determines that—

(A) those prior studies and decisions meet the standards for an adequate statement, assessment, or determination under applicable procedures of the Department of Commerce implementing the requirements of NEPA;

(B) in the case of prior studies and decisions completed under the laws and procedures of a State or Indian Tribe, those laws and procedures are of equal or greater rigor than those of each applicable Federal law, including NEPA, implementing procedures of the Department of Commerce; or

(C) if applicable, the prior studies and decisions are informed by other analysis or documentation that would have been prepared if the prior studies and decisions were prepared by the Secretary under NEPA.

(f) DefinitionsIn this section:

(1) Covered activity

(2) NEPA

(Pub. L. 116–283, div. H, title XCIX, § 9909, as added Pub. L. 117–167, div. A, § 103(d), Aug. 9, 2022, 136 Stat. 1389; amended Pub. L. 118–105, § 2(2), Oct. 2, 2024, 138 Stat. 1588.)