By Jay Landers
Capping more than a year of congressional efforts to increase federal funding for U.S. science and technology research, innovation, and manufacturing, President Joe Biden signed into law the Creating Helpful Incentives to Produce Semiconductors and Science Act on Aug. 9. Commonly known as the CHIPS and Science Act, the five-year, nearly $250 billion legislation dramatically boosts authorized funding levels for the National Science Foundation, the National Institute of Standards and Technology, and the Department of Energy’s Office of Science.
Along with authorizing a funding hike for science programs within the Department of Commerce, the new law (P.L. 117-167) provides billions of dollars to incentivize the domestic manufacturing of semiconductors.
For its part, the Senate passed its initial version of the legislation in June 2021. Known as the United States Innovation and Competition Act (S. 1260), the $250 billion bill addressed a wide range of topics, including technology and communications, foreign relations and national security, domestic manufacturing, education, and trade. Among its provisions, S. 1260 called for federal funding for U.S. semiconductor manufacturing and research and the establishment of a new directorate for technology and innovation within the NSF.
The House approved its own, larger version of the legislation in February (see “Passed by the House, the America COMPETES Act would boost research funding,” Civil Engineering Online, Feb. 28, 2022). Titled the America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act, the $350 billion legislation (H.R. 4521) also sought to provide federal support for the U.S. semiconductor industry as well as increased funding for the NSF and NIST.
A House-Senate conference committee began its work to resolve differences between the bills in May. Ultimately, Sen. Chuck Schumer, D-N.Y., the Senate majority leader, opted to pursue a narrowly tailored legislative approach focusing mainly on the provisions in support of the semiconductor industry. However, supporters of the innovation and research funding prevailed in their efforts to include these provisions in the bill, which was substituted for separate, unrelated legislation (H.R. 4346) that the House previously had passed and sent to the Senate.
Amid an unusual display of relative bipartisanship, the Senate handily approved the revised version of H.R. 4346 on July 27 by a vote of 64-33. The next day the House passed it by a vote of 243-187, with one member voting present.
From ASCE’s perspective, passage of the CHIPS and Science Act is a “huge win,” says Caroline Sevier, the director of government relations for the Society. With its increased levels of authorized funding for research and development activities at such entities as the NSF and NIST, the new law is a “perfect complement” to last year’s $1.2 trillion bipartisan infrastructure law, also known as the Infrastructure Investment and Jobs Act, Sevier says. “We didn’t see a lot of those R&D investments in” the IIJA, she notes.
Boon for semiconductor sector
By any standard, the CHIPS and Science Act represents a boon for the U.S. semiconductor manufacturing industry. All told, the legislation provides $76 billion for the sector, according to a July 29 news release from the Senate Committee on Commerce, Science, and Transportation. Of this amount, $39 billion was appropriated to the Commerce Department “to competitively award grants, loans, and loan guarantees to incentivize domestic semiconductor manufacturing,” the release states.
The legislation also creates a “25% investment tax credit, valued at $24 billion, for capital expenditures to expand U.S. semiconductor manufacturing,” according to the release. Finally, an additional $11 billion to the Commerce Department and $2 billion to the Department of Defense will fund efforts “to develop and prototype the next generation of semiconductors in the United States.”
A boost for the NSF
Under the CHIPS and Science Act, the NSF is authorized to receive $81 billion during fiscal years 2023 through 2027, an eye-popping increase of $36 billion, or 80%, over the agency’s existing baseline.
Of this amount, $20 billion is to be dedicated to a new directorate for technology, innovation, and partnerships at the NSF. The directorate “will accelerate domestic development of national and economic-security critical technologies such as artificial intelligence, quantum computing, advanced manufacturing, 6G communications, energy, and material science,” according to a summary of the legislation prepared by the House leadership.
Another $13 billion of the funding authorized for the NSF is to be directed toward educational efforts involving science, technology, engineering, and mathematics. This figure represents a “tripling of the NSF’s annual STEM education budget,” according to the Senate Commerce Committee’s release. “This funding can be used for scholarships, fellowships and traineeships, and for competitive awards to universities to expand STEM education capacity.”
ASCE strongly supported the additional STEM education funding for the NSF, Sevier says. “It’s a really important issue for ASCE,” she notes.
As for NIST, the law authorizes a total of approximately $10 billion over five years for the agency, which is part of the Commerce Department. The total amounts to a jump of $5 billion, or 50%, over NIST’s current baseline.
Although most of the funding is to go to NIST’s scientific and technical research activities, $1 billion is authorized for the construction and maintenance of its facilities. Another $2.3 billion is authorized for NIST’s Manufacturing Extension Partnership, a program through which NIST serves small- and medium-sized businesses.
The new law also authorizes $10 billion to the Commerce Department to be used to create 20 regional technology and innovation hubs that are to be geographically distributed. “These hubs will focus on technology development, job creation, and expanding U.S. innovation capacity,” according to a summary of the law provided by the Senate Commerce Committee.
R&D at Department of Energy
The DOE’s Office of Science also emerged as a big winner in the CHIPS and Science Act. The office is authorized to receive $50.3 billion over five years, an increase of $12.9 billion, or about 35%.
On top of this funding, an additional authorization of $17.6 billion is included for science and innovation purposes, including a new R&D program focusing on developing low carbon dioxide emission production of steel. The program is to focus on such key technology areas as “heat generation, carbon capture, resource efficiency, and high-performance computing,” according to the House leadership’s summary.
The law also directs the DOE to implement a new R&D program “in basic energy sciences, including materials sciences and engineering, chemical sciences, physical biosciences, geosciences, and other disciplines,” the law states. The purpose of the program is “to understand, model, and control matter and energy at the electronic, atomic, and molecular levels in order to provide the foundations for new energy technologies, address scientific grand challenges, and support the energy, environment, and national security missions of the Department.”
Eyes on appropriations
Funding from the new law is expected to go a long way toward sparking scientific and technological innovation that ultimately will result in improved infrastructure, according to a July 27 letter to the leaders of the House Committee on Science, Space, and Technology from Emily Feenstra, ASCE’s chief policy and external affairs officer.
“ASCE believes that a continued strong commitment to our science and research needs will facilitate durable, secure, sustainable, and resilient infrastructure systems that will meet the needs of the 21st century and protect the public health, safety, welfare, and the environment,” Feenstra wrote.
Of course, much of the law’s funding levels, including those for the NSF, NIST, and the Office of Science, consist of authorizations. Simply put, authorized funding levels indicate how much money Congress may appropriate a given program annually. However, it remains up to the current Congress and future Congresses to decide how much funding to devote to each program.
With this fact in mind, the Society will work to ensure that annual appropriations match the “full authorized levels for these programs going forward,” Sevier says. Although it is impossible to predict the extent to which Congress will fund the programs in the future, “we’re seeing a really strong commitment coming from Congress about the need to increase investments in research and development,” she says.