Congress passes modified competitiveness legislation

This week, Congress approved a new version of legislation to incentivize semiconductor manufacturing facilities, create a Regional Technology Hubs program, and reauthorize many science-related agencies. The Senate passed the bill on the 27th, and the House passed the legislation a day later.

The bill’s latest nickname is “Chips and Science,” a reference to the presence of appropriations for semiconductor manufacturing incentives and R&D (previously authorized when the “CHIPS” act was added to the FY 2021 defense authorization bill), as well as many authorization provisions for other innovation and research activities that have previously been included in USICA and COMPETES. 

CHIPS funding

The CHIPS portion of the bill is the only part that would be funded at the time of its passage. These provisions include the following:

• $39 billion in grants and loans to encourage the construction or expansion of semiconductor fabrication, packaging or R&D facilities, plus the creation of a related manufacturing investment tax credit
• $11 billion for semiconductor-related R&D through the Department of Commerce (Commerce), including:
  • National Semiconductor Technology Center
  • National Advanced Packaging Manufacturing Program
  • Manufacturing USA Semiconductor Institute
  • Microelectronics Metrology R&D within NIST
• $2 billion for the Department of Defense to develop a Microelectronics Commons
• $1.5 billion for a Public Wireless Supply Chain Innovation Fund at NTIA
• $200 million for a semiconductor workforce and education initiative

Regional Technology Hubs

The bill would authorize Regional Technology Hubs at Commerce to help more regions become leaders in key technology sectors through substantial investments into regional consortia. There are three components to this initiative – the designation of hubs, a program to fund strategy development, and a program to fund implementation grants.

The bill would direct Commerce to designate at least 20 hubs. This includes 18 hubs designated evenly across the six EDA regions and: at least one third of which must include a state participating in NSF’s Established Program to Stimulate Competitive Research (EPSCoR); at least one third must “significantly benefit” a small and rural community; and, at least one hub must be in a low population State. The additional two hubs may be selected by the extent to which the technology or region will benefit underserved communities.

The program is authorized but not funded at $10 billion, $50 million for the strategy program and $9.95 billion for implementation awards, both over five years.

NSF Directorate for Technology, Innovation and Partnerships

The bill formally authorizes the new TIP Directorate and Regional Innovation Engines programs, which NSF already launched earlier this year. 

• The authorization level for TIP would grow from $1.5 billion in FY 2023 to $4.1 billion in FY 2027.
• TIP’s activities would be guided by five national challenges and 10 key technology focus areas, with the list for year one provided in the bill. 
• The text does not appear to define the size of the Regional Innovation Engines awards.
• Other notable initiatives authorized to TIP are – Translation Accelerator awards to tech commercialization consortia; Test Bed funding; and, Entrepreneurial Fellowships.

NSF EPSCoR

The legislation sets accelerated targets for the share of NSF funding for research, education and human resources activities that will be awarded to institutions in EPSCoR states. The rates begin at 15.5 percent in FY 2023 and increase to 20.0 percent in FY 2029.

NIST manufacturing programs

The bill increases the annual authorization level for the Manufacturing Extension Partnership (MEP) to $550 million by FY 2025 and to $250 million by FY 2027 for Manufacturing USA.

Clean energy innovation programs

The bill contains multiple authorizations for new programs and initiatives related to innovation within the clean energy and energy efficiency sectors, including:

• Regional Clean Energy Innovation Program – Would provide up to $10 million to consortia focused on developing and implementing new clean energy technologies in their regions or up to $2 million for planning activities; authorized at $50 million per year.
• National Clean Energy Incubator Program – Funds up to $4 million per year for one or more clean energy incubators per state over as long as eight years, yet only authorized at $15 million per year in total.
• Clean Energy Technology University Prize Competition – Creates a prize competition with $1 million authorized per year and a preference for competitions supporting students of minority-serving institutions.
• Small Business Voucher Program – Would restore a program that enabled small businesses to access expertise and facilities at Energy National Labs to support the company’s technology development or workforce needs; authorized at $25 million per year.
• New innovation-related authorities for National Labs – Other provisions would fund entrepreneurship fellows at National Labs; allow National Lab staff to go out on entrepreneurial leave; and, fund a lab partnership pilot program.

Other provisions of interest to TBED

The total bill is more than 1,000 pages and almost entirely focused on research, technology, innovation and entrepreneurship. Needless to say, there are many sections that will be of interest to tech-based economic development organizations across the country. A few additional authorizations, in brief, are:

• Recompete program at Commerce to support economic development in regions with persistent poverty and has an emphasis on workforce development initiatives ($1 billion authorization)
• Reauthorization of NSF, NIST, NASA and DOE’s Office of Science
• NSF Office of Research Security and Policy
• New programs and requirements to expand research capacity of minority- and rural-serving institutions of higher education
• Advisory committee on engineering biology R&D

Note regarding SBIR/STTR

The House’s COMPETES version of this legislation included reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which are set to expire on September 30. Those provisions are not included in CHIPS and Science.