Schumer Announces Senate Passage Of U.S. Innovation And Competition Act

WASHINGTON, D.C. – After a year of staunch advocacy to secure the domestic semiconductor and microelectronic supply line and make historic investments in federal R&D and innovation, U.S. Senate Majority Leader Charles E. Schumer announced senate passage of the U.S. Competition and Innovation Act.

The act combines Schumer’s Endless Frontier Act, other bipartisan competitiveness bills, and includes $52 billion in emergency supplemental appropriations to implement the semiconductor-related manufacturing and R&D programs Schumer authorized in last year’s National Defense Authorization Act and a program to support legacy chip production that is essential to the auto industry, the military, and other critical industries.

An additional $1.5 billion was included for implementation of implement the USA Telecommunications Act that was also passed as part of last year’s NDAA to foster U.S. innovation in the race for 5G.

Senator Schumer said, “Senate passage of the bipartisan U.S. Innovation and Competition Act moves forward historic legislation to invest in science, technology, and U.S. manufacturing that will shore up critical industries like semiconductors, artificial intelligence, advanced communications like 5G, quantum computing, biotechnology, and advanced energy, and create opportunity to reshape the Upstate New York economy with investment in new regional tech hubs and support for New York entrepreneurs and research at universities and laboratories.”

 “With its rare combination of a world-class workforce, advanced manufacturers, and renowned higher education institutions, I wrote and championed this legislation with Upstate New York always at the forefront of my mind,” Schumer added. “In the midst of one of the most consequential battles in our nation’s history, the U.S. Innovation and Competition Act lays the foundation for the next century of American economic leadership and preserves our competitive edge for generations to come, and I’ll continue to fight to put Upstate New York on the frontlines of that battle.”

Details on the supplemental appropriations appear below:

·        $49.5 billion allocated over 5 years for a CHIPS for America Fund. Funding must be used to implement the Commerce Department semiconductor incentive and R&D programs authorized by the FY21 NDAA (Sec. 9902 & 9906). Within the fund, the following appropriations are available:

·        Incentive Program: $39 billion appropriated upfront and allocated over 5 years to implement the programs authorized in Sec. 9902. $2 billion is provided to solely focus on legacy chip production to advance the economic and national security interests of the United States.

o   $19 billion in FY22, including the $2 billion legacy chip production funding

o   $5 billion each year, FY23 through FY26

·        Commerce R&D programs: $10.5 billion appropriated upfront and allocated over 5 years to implement programs authorized in Sec. 9906, including the National Semiconductor Technology Center (NSTC), National Advanced Packaging Manufacturing Program, and other R&D programs authorized in Sec. 9906.

o   $5 billion in FY22

o   $2.5 billion for advanced packaging

o   $2 billion for NSTC

o   $500 million for other related R&D programs

For use across the advanced packaging, NSTC, and other related R&D programs, the following would be provided:

·        $2 billion in FY23

·        $1.3 billion in FY24

·        $1.1 for FY25 and FY26

·        $2 billion for a CHIPS for America Defense Fund: Funding is appropriated up front and $400 million is allocated each year, over 5 years for the purposes of implementing programs authorized in Sec. 9903(b), providing support for R&D, testing and evaluation, workforce development, and other related activities, in coordination with the private sector, universities, and other Federal agencies to support the needs of the Department of Defense and the intelligence community.

·        $500 million for a CHIPS for America International Technology Security and Innovation Fund: Funding is appropriated upfront and $100 million each year, allocated over 5 years to the Department of State, in coordination with the U.S. Agency for International Development, the Export-Import Bank, and the U.S. International Development Finance Corporation, for the purposes of coordinating with foreign government partners to support international information and communications technology security and semiconductor supply chain activities, including supporting the development and adoption of secure and trusted telecommunications technologies, semiconductors, and other emerging technologies.

An additional $1.5 billion is provided for implementation of implement the USA Telecommunications Act that was also passed as part of last year’s NDAA to foster U.S. innovation in the race for 5G.

Details on the Endless Frontier Act:

The Endless Frontier Act, as reported by the Senate Commerce Committee, seeks to maintain and build on U.S. science and technology leadership through investments in research and 5 development and strengthening regional economic development, manufacturing, and supply chains. The legislation would authorize roughly $120 billion over 5 years for activities at the National Science Foundation (“NSF”), Department of Commerce (“DOC”), the Department of Energy (“DOE”), and the National Aeronautics and Space Administration (“NASA”). The Endless Frontier Act advances priorities including to reduce undue geographic concentration of R&D funding, encourage broader participation of populations underrepresented in STEM, and increase collaboration across federal agencies and with non-governmental partners on innovation.

Notable Provisions:

·       Technology Directorate: The Endless Frontier Act would create a new Directorate of Technology and Innovation at the NSF to support research and technology development in key technology focus areas, such as artificial intelligence and quantum science, in order to strengthen the global leadership of the United States in innovation. Major activities would include funding research and development at collaborative institutes, supporting academic technology transfer and intellectual property protection, establishing technology testbeds, and awarding scholarships and fellowships to build the relevant workforce. The Directorate would be authorized at $29 billion over fiscal years 2022 to 2026, including a transfer of $2.9B to existing NSF divisions to support basic research collaboration.

·       NSF Research and Development Programs: The Endless Frontier Act would authorize $52 billion over fiscal years 2022 to 2026 for existing NSF activities, representing a seven percent increase each year. The legislation would also create a Chief Diversity Officer at NSF and increase STEM education to enhance the domestic STEM workforce. The legislation also incorporates a series of new programs, including programs for precision agriculture, rural STEM education, quantum information science, skilled technical education, critical minerals, and bioeconomy R&D.

·       Regional Technology Hubs: The Endless Frontier Act creates a regional technology hub program at DOC to support regional economic development in innovation. Technology hubs would carry out workforce development activities, business and entrepreneur development activities, technology maturation activities, and infrastructure activities related to the technology development. The technology hubs program would be authorized at $10 billion over fiscal years 2022 to 2026.

·       Manufacturing: The Endless Frontier Act would authorize close to a quadrupling of the DOC Manufacturing Extension Partnership and create a new track within the program for public benefit activities like workforce development and cybersecurity services. The Manufacturing Extension Partnership would be funded at $2.4B over fiscal years 2022 to 2026. The substitute would also authorize the Manufacturing USA program, at $1.2B over fiscal years 2022 to 2026, and add workforce and coordination provisions.

·       Supply Chain Resiliency: The Endless Frontier Act would establish a supply chain resiliency program at the Department of Commerce to work with the private sector, for the purpose of identifying and recommending opportunities to mitigate or address supply chain vulnerabilities in the United States and in allied and partner countries. It would also amend the recently-enacted CHIPS Act to provide $2 billion in incentives for domestic production of mature semiconductor technologies, such as for the automotive industry.

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