II 116TH CONGRESS 2D SESSION S. 4982 To provide incentives for the production of semiconductors for the United States, and for other purposes. IN THE SENATE OF THE UNITED STATES DECEMBER 8, 2020 Mr. CORNYN (for himself, Mr. WARNER, Mr. SCHUMER, and Mr. COTTON) in- troduced the following bill; which was read twice and referred to the Com- mittee on Commerce, Science, and Transportation A BILL To provide incentives for the production of semiconductors for the United States, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Creating Helpful In- 4 centives for Producing Semiconductors for America and 5 Foundries Act’’. 6 SEC. 2. DEFINITIONS. 7 In this Act: 8 (1) The term ‘‘appropriate committees of Con- 9 gress’’ means— 10 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4982 IS (A) the Select Committee on Intelligence, 1 the Committee on Energy and Natural Re- 2 sources, the Committee on Commerce, Science, 3 and Transportation, the Committee on Foreign 4 Relations, the Committee on Armed Services, 5 the Committee on Appropriations, the Com- 6 mittee on Banking, Housing, and Urban Af- 7 fairs, the Committee on Homeland Security and 8 Governmental Affairs, and the Committee on 9 Finance of the Senate; and 10 (B) the Permanent Select Committee on 11 Intelligence, the Committee on Energy and 12 Commerce, the Committee on Foreign Affairs, 13 the Committee on Armed Services, the Com- 14 mittee on Science, Space, and Technology, the 15 Committee on Appropriations, the Committee 16 on Financial Services, the Committee on Home- 17 land Security, and the Committee on Ways and 18 Means of the House of Representatives. 19 (2) The term ‘‘covered entity’’ means a private 20 entity, a consortium of private entities, or a consor- 21 tium of public and private entities with a dem- 22 onstrated ability to substantially finance, construct, 23 expand, or modernize a facility relating to fabrica- 24 VerDate Sep 11 2014 23:56 Dec 13, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4982 IS tion, assembly, testing, advanced packaging, or re- 1 search and development of semiconductors. 2 (3) The term ‘‘covered incentive’’— 3 (A) means an incentive offered by a gov- 4 ernmental entity to a covered entity for the pur- 5 poses of constructing within the jurisdiction of 6 the governmental entity, or expanding or mod- 7 ernizing an existing facility within that jurisdic- 8 tion, a facility described in paragraph (2); and 9 (B) a workforce-related incentive (includ- 10 ing a grant agreement relating to workforce 11 training or vocational education), any conces- 12 sion with respect to real property, funding for 13 research and development with respect to semi- 14 conductors, and any other incentive determined 15 appropriate by the Secretary, in consultation 16 with the Secretary of State. 17 (4) The term ‘‘person’’ includes an individual, 18 partnership, association, corporation, organization, 19 or any other combination of individuals. 20 (5) The term ‘‘foreign entity’’— 21 (A) means— 22 (i) a government of a foreign country 23 and a foreign political party; 24 VerDate Sep 11 2014 23:56 Dec 13, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4982 IS (ii) a natural person who is not a law- 1 ful permanent resident of the United 2 States, citizen of the United States, or any 3 other protected individual (as such term is 4 defined in section 274B(a)(3) of the Immi- 5 gration and Nationality Act (8 U.S.C. 6 1324b(a)(3))); or 7 (iii) a partnership, association, cor- 8 poration, organization, or other combina- 9 tion of persons organized under the laws of 10 or having its principal place of business in 11 a foreign country; and 12 (B) includes— 13 (i) any person owned by, controlled 14 by, or subject to the jurisdiction or direc- 15 tion of an entity listed in subparagraph 16 (A); 17 (ii) any person, wherever located, who 18 acts as an agent, representative, or em- 19 ployee of an entity listed in subparagraph 20 (A); 21 (iii) any person who acts in any other 22 capacity at the order, request, or under the 23 direction or control, of an entity listed in 24 subparagraph (A), or of a person whose 25 VerDate Sep 11 2014 23:56 Dec 13, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 4982 IS activities are directly or indirectly super- 1 vised, directed, controlled, financed, or 2 subsidized in whole or in majority part by 3 an entity listed in subparagraph (A); 4 (iv) any person who directly or indi- 5 rectly through any contract, arrangement, 6 understanding, relationship, or otherwise, 7 owns 25 percent or more of the equity in- 8 terests of an entity listed in subparagraph 9 (A); 10 (v) any person with significant re- 11 sponsibility to control, manage, or direct 12 an entity listed in subparagraph (A); 13 (vi) any person, wherever located, who 14 is a citizen or resident of a country con- 15 trolled by an entity listed in subparagraph 16 (A); or 17 (vii) any corporation, partnership, as- 18 sociation, or other organization organized 19 under the laws of a country controlled by 20 an entity listed in subparagraph (A). 21 (6) The term ‘‘foreign entity of concern’’ means 22 any foreign entity that is— 23 (A) designated as a foreign terrorist orga- 24 nization by the Secretary of State under section 25 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 4982 IS 219 of the Immigration and Nationality Act (8 1 U.S.C. 1189); 2 (B) included on the list of specially des- 3 ignated nationals and blocked persons main- 4 tained by the Office of Foreign Assets Control 5 of the Department of the Treasury; 6 (C) owned by, controlled by, or subject to 7 the jurisdiction or direction of a government of 8 a foreign country that is listed in section 2533c 9 of title 10, United States Code; or 10 (D) alleged by the Attorney General to 11 have been involved in activities for which a con- 12 viction was obtained under— 13 (i) chapter 37 of title 18, United 14 States Code (commonly known as the ‘‘Es- 15 pionage Act’’) (18 U.S.C. 792 et seq.); 16 (ii) section 951 or 1030 of title 18, 17 United States Code; 18 (iii) chapter 90 of title 18, United 19 States Code (commonly known as the 20 ‘‘Economic Espionage Act of 1996’’); 21 (iv) the Arms Export Control Act (22 22 U.S.C. 2751 et seq.); 23 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 4982 IS (v) section 224, 225, 226, 227, or 236 1 of the Atomic Energy Act of 1954 (42 2 U.S.C. 2274–2278; 2284); 3 (vi) the Export Control Reform Act of 4 2018 (50 U.S.C. 4801 et seq.); or 5 (vii) the International Economic 6 Emergency Powers Act (50 U.S.C. 1701 et 7 seq.); or 8 (E) determined by the Secretary, in con- 9 sultation with the Secretary of Defense and the 10 Director of National Intelligence, to be engaged 11 in unauthorized conduct that is detrimental to 12 the national security or foreign policy of the 13 United States under this Act. 14 (7) The term ‘‘governmental entity’’ means a 15 State or local government. 16 (8) The term ‘‘Secretary’’ means the Secretary 17 of Commerce. 18 (9) The term ‘‘semiconductor’’ has the meaning 19 given that term by the Secretary. 20 SEC. 3. SEMICONDUCTOR INCENTIVES. 21 (a) FINANCIAL ASSISTANCE PROGRAM.— 22 (1) IN GENERAL.—The Secretary shall establish 23 in the Department of Commerce a program that, in 24 accordance with the requirements of this section and 25 VerDate Sep 11 2014 23:56 Dec 13, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 4982 IS subject to the availability of appropriations for such 1 purposes, provides Federal financial assistance to 2 covered entities to incentivize investment in facilities 3 and equipment in the United States for semicon- 4 ductor fabrication, assembly, testing, advanced pack- 5 aging, or research and development. 6 (2) PROCEDURE.— 7 (A) IN GENERAL.—A covered entity shall 8 submit to the Secretary an application that de- 9 scribes the project for which the covered entity 10 is seeking financial assistance under this sec- 11 tion. 12 (B) ELIGIBILITY.—In order for a covered 13 entity to qualify for financial assistance under 14 this section, the covered entity shall dem- 15 onstrate to the Secretary, in the application 16 submitted by the covered entity under subpara- 17 graph (A), that— 18 (i) the covered entity has a docu- 19 mented interest in constructing, expanding, 20 or modernizing a facility described in para- 21 graph (1); and 22 (ii) with respect to the project de- 23 scribed in clause (i), the covered entity 24 has— 25 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 4982 IS (I) been offered a covered incen- 1 tive; 2 (II) made commitments to work- 3 er and community investment, includ- 4 ing through— 5 (aa) training and education 6 benefits paid by the covered enti- 7 ty; and 8 (bb) programs to expand 9 employment opportunity for eco- 10 nomically disadvantaged individ- 11 uals; 12 (III) secured commitments from 13 regional educational and training enti- 14 ties and institutions of higher edu- 15 cation to provide workforce training, 16 including programming for training 17 and job placement of economically dis- 18 advantaged individuals; and 19 (IV) an executable plan to sus- 20 tain the facility described in clause (i) 21 without additional Federal financial 22 assistance under this subsection for 23 facility support. 24 VerDate Sep 11 2014 23:56 Dec 13, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 4982 IS (C) CONSIDERATIONS FOR REVIEW.—With 1 respect to the review by the Secretary of an ap- 2 plication submitted by a covered entity under 3 subparagraph (A)— 4 (i) the Secretary may not approve the 5 application unless the Secretary— 6 (I) confirms that the covered en- 7 tity has satisfied the eligibility criteria 8 under subparagraph (B); 9 (II) determines that the project 10 to which the application relates is in 11 the interest of the United States; and 12 (III) has notified the appropriate 13 committees of Congress not later than 14 15 days before making any commit- 15 ment to provide a grant to any cov- 16 ered entity that exceeds $10,000,000; 17 and 18 (ii) the Secretary may consider wheth- 19 er— 20 (I) the covered entity has pre- 21 viously received financial assistance 22 made under this subsection; 23 (II) the governmental entity of- 24 fering the applicable covered incentive 25 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 4982 IS has benefitted from financial assist- 1 ance previously provided under this 2 subsection; 3 (III) the covered entity has dem- 4 onstrated that they are responsive to 5 the national security needs or require- 6 ments established by the Intelligence 7 Community (or an agency thereof), 8 the National Nuclear Security Admin- 9 istration, or the Department of De- 10 fense; and 11 (IV) when practicable, a consor- 12 tium that is considered a covered enti- 13 ty includes a small business concern, 14 as defined under section 3 of the 15 Small Business Act (15 U.S.C. 632), 16 notwithstanding section 121.103 of 17 title 13, Code of Federal Regulations; 18 and 19 (iii) the Secretary may not approve an 20 application if the Secretary determines 21 that the covered entity is a foreign entity 22 of concern. 23 (D) RECORDS.—The Secretary may re- 24 quest records and information from the appli- 25 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 4982 IS cant to review the status of a covered entity. 1 The applicant shall provide the records and in- 2 formation requested by the Secretary. 3 (3) AMOUNT.— 4 (A) IN GENERAL.—The Secretary shall de- 5 termine the appropriate amount and funding 6 type for each financial assistance award made 7 to a covered entity under this subsection. 8 (B) LARGER INVESTMENT.—Federal in- 9 vestment in any individual project shall not ex- 10 ceed $3,000,000,000 unless the Secretary, in 11 consultation with the Secretary of Defense and 12 the Director of National Intelligence, rec- 13 ommends to the President, and the President 14 certifies and reports to the appropriate commit- 15 tees of Congress, that a larger investment is 16 necessary to— 17 (i) significantly increase the propor- 18 tion of reliable domestic supply of semi- 19 conductors relevant for national security 20 and economic competitiveness that can be 21 met through domestic production; and 22 (ii) meet the needs of national secu- 23 rity. 24 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 4982 IS (4) USE OF FUNDS.—A covered entity that re- 1 ceives a financial assistance award under this sub- 2 section may only use the financial assistance award 3 amounts to— 4 (A) finance the construction, expansion, or 5 modernization of a facility or equipment to be 6 used for semiconductors described in paragraph 7 (1), as documented in the application submitted 8 by the covered entity under paragraph (2)(B), 9 as determined necessary by the Secretary for 10 purposes relating to the national security and 11 economic competitiveness of the United States; 12 (B) support workforce development for a 13 facility described in subparagraph (A); 14 (C) support site development and mod- 15 ernization for a facility described in subpara- 16 graph (A); and 17 (D) pay reasonable costs related to the op- 18 erating expenses for a facility described in sub- 19 paragraph (A), including specialized workforce, 20 essential materials, and complex equipment 21 maintenance, as determined by the Secretary. 22 (5) CLAWBACK.— 23 VerDate Sep 11 2014 05:16 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S4982.IS S4982 pbinns on DSKJLVW7X2PROD with BILLS 14 •S 4982 IS (A) TARGET D [Text truncated for display. 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