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CHIPS and Science Act heads to Biden’s desk

29 July 2022

The historic legislation provides more than $50 billion to the semiconductor sector and lays out ambitious expansion plans for some federal science agencies.

Biden watches Senate passage of the CHIPS and Science Act.
President Biden (left) applauds the 27 July Senate vote on the CHIPS and Science Act. Credit: The White House

Editor’s note: This article is adapted from 22 July and 29 July posts on FYI, which reports on federal science policy. Both FYI and Physics Today are published by the American Institute of Physics (AIP).

Landmark innovation legislation has passed Congress and is headed to President Biden for his signature. The CHIPS and Science Act provides $52 billion for semiconductor production subsidies and R&D. It also outlines an ambitious vision for US science policy more broadly, with expansion plans for NSF, NIST, and the Department of Energy.

The bipartisan legislation passed in the Senate by a 64–33 vote on 27 July and in the House by a 243–187 margin the next day. The bill blends core science provisions of the America COMPETES Act of 2022, which the House passed earlier this year, with the Senate’s 2021 US Innovation and Competition Act (USICA). A bicameral conference committee had been working to reconcile the two bills since May.

After those talks stalled early this month, the Senate considered advancing a narrower bill focused on subsidizing the semiconductor industry, facing warnings from chipmaking companies that if Congress did not act soon they might instead invest in countries with already established subsidy programs. However, a group of senators successfully advocated to attach science provisions that the conference committee reached agreement on earlier this summer.

Compromise on NSF

The legislation finds middle ground on many competing proposals from the House and Senate, such as their debate over the appropriate mission and size of NSF’s new Directorate for Technology, Innovation, and Partnerships (TIP).

The Senate favored creating a huge directorate focused on 10 key technology areas, whereas the House advocated for a significantly smaller directorate focused on both technology-oriented research and a variety of “societal challenges” such as climate change. The compromise bill merges those frameworks, requiring the TIP directorate to focus on not more than five “societal, national, and geostrategic challenges” and not more than 10 “key technology focus areas,” with each list subject to periodic revision.

The bill offers an initial list of challenges: “US national security, US manufacturing and industrial productivity, US workforce development and skills gaps, climate change and environmental sustainability, and inequitable access to education, opportunity, or other services.” The key technology areas are identical to those proposed in USICA, spanning artificial intelligence, robotics, materials science and manufacturing, high performance computing, telecommunications, data management, quantum science and technology, biotechnology, energy technology, and “natural and anthropogenic disaster prevention or mitigation.”

The bill recommends Congress ramp up the directorate’s annual budget to about $4 billion over five years, close to the House’s original proposal, amounting to an extra $16 billion for NSF. By contrast, the initial concept for the directorate floated by Senate Majority Leader Chuck Schumer (D-NY) and Sen. Todd Young (R-IN) envisioned spending $100 billion over five years, though the Senate later downsized that proposal to $29 billion.

Schumer and Young also proposed creating a “regional technology hub” program at the Commerce Department to spur cross-sector partnerships across the US, with a recommended budget of $10 billion over five years. The compromise bill retains that provision and further prescribes the program’s scope, for instance by requiring it to support at least 20 hubs, contingent on the availability of sufficient funds to establish them.

The push to broaden the geographic distribution of R&D activity was also reflected in a USICA provision that would require NSF to allocate at least 20% of its total budget to the Estab­lished Program to Stim­u­late Com­pet­i­tive Research (EPSCoR), which funds projects in states and territories that have historically received a small fraction of NSF funds.

The compromise bill scales back that approach, instead starting the set-aside at 15.5% and increasing it to 20% over seven years, allowing funds allocated to EPSCoR jurisdictions from other NSF programs to count toward the total, and limiting the requirement to a subset of NSF’s budget. The bill establishes an analogous set-aside for the DOE Office of Science, mandating at least 10% of the R&D funds it distributes to universities each year go to institutions in EPSCoR jurisdictions, a narrower requirement than proposed in USICA.

In both cases, the agencies are directed to comply “to the maximum extent practicable” while upholding their commitment to merit-based allocation of funds. That gives the agencies leeway to undershoot the targets if they prove too difficult to reach. As of 2021, EPSCoR jurisdictions received about 12% of NSF’s budget and 12% of the DOE Office of Science’s budget for university research.

NSF, NIST, and DOE singled out for support

A core purpose of the bill is to set aggressive growth targets for the top-line budgets of NSF, NIST, and the DOE Office of Science, as well as for certain major programs within each agency.

It recommends that over the next five years Congress should roughly double the annual budgets of NSF and NIST, to $18.9 billion and $2.3 billion, respectively, and increase funding for the DOE Office of Science by nearly 50%, to $10.8 billion. It also proposes that parts of DOE beyond the Office of Science receive $4 billion to upgrade infrastructure at national labs and $11.2 billion for work on the same key technology areas supported by the TIP directorate.

Those figures mostly represent a blend of proposals offered in the House and Senate bills. One exception is that the bill entirely drops a USICA provision that recommended an immediate doubling of the budget of the Defense Advanced Research Projects Agency. It also omits budget targets for NASA but still provides policy direction for the agency.

In contrast to the semiconductor funds in the bill, the agency figures are only authorizations, meaning Congress is not obligated to provide the money and will decide whether to meet the targets on a year-by-year basis. Congressional appropriations often fall well short of authorized levels, as occurred with those set by the America COMPETES Acts of 2007 and 2010, which also proposed ramping up the budgets of NSF, DOE, and NIST.

With that history in mind, a group of science organizations unsuccessfully advocated for Congress to include a mandatory “down payment” of $10 billion for those agencies as part of the final legislation. (Several AIP Member Societies are among that group.)

NSF added to semiconductor appropriation

The $52 billion top-line appropriation for semiconductor manufacturing and R&D programs is identical to the amounts in the original House and Senate bills, except that $200 million has been redirected to NSF to fund new microelectronics workforce initiatives. The money will support activities such as curriculum development, traineeships, faculty hiring, and a National Network for Microelectronics Education.

A worker at an Intel chip production facility in 2017.
A worker at an Intel chip production facility in 2017. Credit: Intel Corporation

The bill also authorizes new DOE initiatives to support microelectronics R&D, including up to four Microelectronics Science Research Centers with a maximum annual budget of up to $25 million each. However, it does not include a corresponding appropriation.

Almost all the semiconductor money is allocated to the Commerce Department, specifically $39 billion to incentivize companies to build semiconductor fabrication facilities in the US and $11 billion for a collection of R&D programs, including a National Semiconductor Technology Center. Of the remainder, $2 billion is for the Department of Defense to create a National Network for Microelectronics R&D. The legislation also creates a semiconductor investment tax credit that is estimated to cost about $22 billion over five years.

New Democratic spending bill includes science funds

With the bipartisan CHIPS and Science Act set to become law, attention has shifted to the climate and energy spending package that is under consideration by Senate Democrats following an agreement by Schumer and Joe Manchin (D-WV). The reconciliation bill, which would not require Republican support to pass, appropriates funding that would become available immediately to science agencies.

The climate and energy provisions mostly involve incentives to adopt clean energy technologies and to support measures to enhance resilience against environmental hazards. They include a $5.8 billion appropriation for DOE’s Office of Clean Energy Demonstrations to back emissions-reducing projects at industrial facilities.

In addition, the bill includes a portion of the science funding that Manchin proposed last December for the Build Back Better Act, a more expansive spending package he ultimately withdrew his support for. For DOE Office of Science construction and equipment projects, the new bill includes the following:

  • $133 million for general laboratory infrastructure
  • $304 million for high-energy physics
  • $280 million for fusion energy
  • $217 million for nuclear physics
  • $164 million for advanced scientific computing
  • $295 million for basic energy sciences, and
  • $158 million for isotope R&D

Although not transformative amounts, the office could use the funding to accelerate efforts currently facing funding crunches, such as the LBNF/DUNE neutrino experiment, Brookhaven National Laboratory’s Electron-Ion Collider, and the Second Target Station at Oak Ridge National Laboratory’s Spallation Neutron Source. It could also be used to patch holes in the US contribution to the international ITER fusion facility.

The bill further includes $450 million split evenly between the DOE Offices of Nuclear Energy, Fossil Energy and Carbon Management, and Energy Efficiency and Renewable Energy for infrastructure and general plant projects.

Within funds for NOAA, the bill allocates almost $500 million for climate and weather research and forecasting activities, comprising the following:

  • $190 million for high-performance computing and data management
  • $150 million for research, observations, modeling, forecasting, and information dissemination
  • $100 million for hurricane hunter aircraft, and
  • $50 million for climate research grants

For the US Geological Survey, the bill contains $23.5 million for three-dimensional elevation mapping.

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