The CHIPS and Science Act of 2022 (P.L. 117-167), a bipartisan law, focuses on federal aid to encourage the construction of microprocessor manufacturing facilities in the United States. The objective is to reduce U.S. reliance on overseas chip supply chains, and increased authorizations to boost the nation’s science and technology base. Additionally, the law provides subsidies to manufacture semiconductors in the U.S., boost science and technology research and address China’s anti-competitive trade practices.
Advocacy efforts for semiconductor and supply chain legislation started at the National Governors Association’s 2022 Winter Meeting. The Economic Recovery and Revitalization Task Force held a discussion on the intersection of private industry and public policy to further Electric Vehicle adoption including an overview of some of the resources recently made available to states and territories from the bipartisan Infrastructure Investment and Jobs Act.
On March 30th, the National Governors Association released a statement of support as Congress deliberated on supply chain legislation. Former Chairman Governor Asa Hutchinson of Arkansas and Vice Chairman Governor Phil Murphy of New Jersey released a follow up statement on July 15th calling on the Senate to take up and pass the CHIPS legislation as soon as possible, followed by a speedy vote in the House.
The Senate passed the CHIPS and Science Act 64-33 on July 27th, followed with House passage by a vote of 243-187 on July 28th. On August 9th, President Biden signed the measure into law. NGA Chair Governor Phil Murphy of New Jersey and Vice Chair Governor Spencer Cox of Utah applauded Congress, in a July 28th statement, for supporting American innovation and global competitiveness by passing bipartisan legislation accelerating research and development in semiconductor production.
The bill appropriates $54.2 billion for subsidies to build chip plants in the U.S. and support U.S. chip research and development. It provides a 25% tax credit for building and equipping U.S. chip plants which is estimated to provide another $24.3 billion in support. It significantly increases authorizations for federal science and technology research and development programs, specifically authorizing about $174 billion through FY 2027 to support the nation’s science and technology base — including for interagency programs to boost technological innovation and help translate federally funded research to commercial applications. NGA looks forward to assisting states and territories as they move towards implementation.