II 

116TH CONGRESS 

2D SESSION S. 4130 

To require the Secretary of Commerce to award grants to States for the 

construction of microelectronics manufacturing and advanced research 

and development facilities, to authorize the Secretary of Defense and 

the Director of National Intelligence to fund the construction of microelectronics manufacturing facilities for national security needs, and to 

authorize additional amounts for microelectronics research and development, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 1, 2020 

Mr. COTTON (for himself, Mr. SCHUMER, Mr. REED, Mr. RISCH, Ms. COLLINS, Mr. KING, Mr. HAWLEY, Mr. JONES, Mrs. GILLIBRAND, Mr. 

RUBIO, and Ms. HASSAN) introduced the following bill; which was read 

twice and referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To require the Secretary of Commerce to award grants to 

States for the construction of microelectronics manufacturing and advanced research and development facilities, 

to authorize the Secretary of Defense and the Director 

of National Intelligence to fund the construction of 

microelectronics manufacturing facilities for national security needs, and to authorize additional amounts for 

microelectronics research and development, and for other 

purposes. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Foundries 

5 Act of 2020’’. 

6 SEC. 2. GRANTS FOR CONSTRUCTION OF MICROELEC7 TRONICS MANUFACTURING AND RESEARCH 

8 AND DEVELOPMENT FACILITIES, AND WORK9 FORCE DEVELOPMENT. 

10 (a) GRANTS FOR STATES WITH DEMONSTRATED IN11 TEREST IN CONSTRUCTING MICROELECTRONICS MANU12 FACTURING AND ADVANCED RESEARCH AND DEVELOP13 MENT FACILITIES.— 

14 (1) IN GENERAL.—Not later than 180 days 

15 after the date of the enactment of this Act, the Sec16 retary of Commerce, in consultation with the Sec17 retary of Defense, shall commence carrying out a 

18 program on the award of grants to States described 

19 in paragraph (2) to assist in financing the construc20 tion, expansion, or modernization (including acquisi21 tion of equipment and intellectual property) of 

22 microelectronics fabrication, assembly, test, ad23 vanced packaging, or advanced research and develop24 ment facilities. 


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1 (2) STATES DESCRIBED.—A State described in 

2 this paragraph is a State that demonstrates to the 

3 Secretary of Commerce the following: 

4 (A) Documented interest from a microelec5 tronics company, that has a demonstrated abil6 ity to build and operate microelectronics fab7 rication, assembly, test, advanced packaging, or 

8 advanced research and development facilities, in 

9 constructing, expanding, or modernizing a com10 mercial microelectronics fabrication, assembly, 

11 test, advanced packaging, or advanced research 

12 and develop facility, or documented interest 

13 from a public-private consortium that has a 

14 demonstrated ability to build and operate an 

15 advanced research and development facility in 

16 the State. 

17 (B) Documented interest from a private 

18 entity to provide funding to support the con19 struction, expansion, or modernization of the 

20 facility that is the subject of the interest docu21 mented under subparagraph (A). 

22 (C) Commitments from such microelec23 tronics company or consortia to worker and 

24 community investment, including— 


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1 (i) training and education benefits 

2 paid for by the company; and 

3 (ii) programs to expand employment 

4 opportunity for economically disadvantaged 

5 individuals. 

6 (D) Commitments from regional edu7 cational and training entities and institutions of 

8 higher education to develop curriculum or en9 gage in workforce training, including program10 ming for training and job placement of eco11 nomically disadvantaged individuals. 

12 (E) Guaranteed State-level economic incen13 tives for the construction, expansion, or mod14 ernization of the facility described in subpara15 graph (B), such as site development, tax incen16 tives, job-training programs and State-level 

17 funding for microelectronics research and devel18 opment. 

19 (3) LIMITATION ON GRANT AMOUNT.—A State 

20 may not be awarded more than $3,000,000,000 

21 under paragraph (1). 

22 (4) USE OF FUNDS.— 

23 (A) IN GENERAL.—A State receiving a 

24 grant under paragraph (1) may only use the 

25 amount of the grant to finance— 


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1 (i) the construction, expansion, or 

2 modernization of a state-of-the-art micro3 electronics fabrication, assembly, test, ad4 vanced packaging, or advanced research 

5 and development facility with respect to 

6 which the State demonstrated to the Sec7 retary documented interest under para8 graph (2), or for similar uses in state of 

9 practice and legacy facilities as deemed 

10 necessary by the Secretary for national se11 curity and economic competitiveness; 

12 (ii) to support workforce development 

13 for such facility; or 

14 (iii) to support site development for 

15 such facility. 

16 (B) RETURN OF FUNDS.—A State awarded 

17 a grant under paragraph (1) shall return any 

18 unused funds to the Treasury of the United 

19 States on an agreed-upon timeframe determined 

20 by the Secretary prior to issuing the funds. 

21 (C) RECOVERY OF CERTAIN FUNDS.—If a 

22 microelectronics entity receiving grant funds 

23 under this subsection engages in increased lev24 els of joint research and development, tech25 nology licensing or transfer, or investment inVerDate Sep 11 2014 17:26 Jul 14, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4130.IS S4130

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1 volving sensitive technologies with entities 

2 under the foreign ownership, control, or influ3 ence (FOCI) of the Government of the People’s 

4 Republic of China or other foreign adversary 

5 during the period of the grant, as determined 

6 by the Secretary as part of a periodic review of 

7 whether a microelectronics entity participating 

8 in the program specified in this subsection is 

9 under foreign ownership, control, or influence, 

10 the Secretary shall recover the amounts pro11 vided by the Secretary under this subsection. 

12 (5) PROHIBITION.—If pursuant to the periodic 

13 review of foreign ownership, control, or influence 

14 specified in paragraph (4)(C), the Secretary deter15 mines that a microelectronics entity is under the for16 eign ownership, control, or influence of the Govern17 ment of the People’s Republic of China or other for18 eign adversary during the period of the grant, such 

19 entity shall be prohibited from participating in the 

20 program specified in this subsection. 

21 (6) NONRELOCATION BETWEEN STATES.— 

22 (A) PROHIBITION.—A State may not use 

23 any amount of a grant awarded under this sub24 section to induce the relocation or the moveVerDate Sep 11 2014 21:28 Jul 14, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4130.IS S4130

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1 ment of existing jobs from one State to another 

2 State in competition for those jobs. 

3 (B) REMEDIES.—In the event that the 

4 Secretary determines an amount of a grant 

5 awarded to a State under this subsection was 

6 used in violation of subparagraph (A), the Sec7 retary may pursue appropriate enforcement ac8 tions, including— 

9 (i) suspension of disbursements of the 

10 grant awarded; and 

11 (ii) termination of the grant awarded, 

12 which may include the establishment of a 

13 debt requiring the recipient of the grant to 

14 reimburse the amount of the grant. 

15 (7) IMPLEMENTATION.—The Secretary shall 

16 carry out this section acting through the Director of 

17 the National Institute of Standards and Technology. 

18 (8) REPORTS AND NOTICES.— 

19 (A) SECRETARY OF COMMERCE.— 

20 (i) REPORT ON IMPLEMENTATION

21 PLAN.—Not later than 90 days after the 

22 date of the enactment of this Act, the Sec23 retary shall submit to Congress a report on 

24 the plans of the Secretary to carry out the 

25 program required by paragraph (1). 


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1 (ii) NOTICE OF PENDING AWARD.— 

2 (I) IN GENERAL.—Not later than 

3 30 days before awarding a grant to a 

4 State under this subsection, the Sec5 retary shall submit to Congress a no6 tice of the intended award. 

7 (II) CONTENTS.—Each notice 

8 submitted under subclause (I) shall 

9 include a description of the State to 

10 which the Secretary intends to award 

11 a grant under this subsection, the 

12 project or projects for which the 

13 amount of the grant is intended to be 

14 used, specifics on the planned use of 

15 the amounts of the grant for that 

16 project, and the rationale of the Sec17 retary for awarding the grant. 

18 (B) COMPTROLLER GENERAL OF THE

19 UNITED STATES.— 

20 (i) BIENNIAL REPORT.—Not later 

21 than 1 year after the date on which the 

22 Secretary of Commerce submits the report 

23 under subparagraph (A)(i) and not less 

24 frequently than once every 2 years there25 after, the Comptroller General of the 


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1 United States shall submit to Congress a 

2 report on the activities carried out under 

3 this subsection during the previous year. 

4 (ii) CONTENTS.—Each report sub5 mitted under clause (i) shall include, at a 

6 minimum, assessments of the following: 

7 (I) How the program is being 

8 carried out and how recipients of 

9 grants are being selected under the 

10 program. 

11 (II) How other Federal programs 

12 are leveraged for manufacturing, re13 search, and training to complement 

14 the grants awarded to States under 

15 this subsection. 

16 (III) Outcomes of projects sup17 ported by grants under this sub18 section, including the construction, ex19 pansion, or modernization of a micro20 electronics fabrication, assembly, test, 

21 advanced packaging, or advanced re22 search and development facilities, re23 search and development, workforce 

24 training, employment, wages, and hirVerDate Sep 11 2014 17:26 Jul 14, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4130.IS S4130

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1 ing of economically disadvantaged 

2 populations. 

3 (9) AUTHORIZATION OF APPROPRIATIONS.— 

4 There is authorized to be appropriated to carry out 

5 this subsection $15,000,000,000 for fiscal year 

6 2021, with such amount to remain available for such 

7 purpose until September 30, 2031. 

8 (b) CREATION, EXPANSION, OR MODERNIZATION OF

9 MICROELECTRONICS MANUFACTURING FACILITIES AND

10 CAPABILITIES FOR NATIONAL SECURITY NEEDS.— 

11 (1) INCENTIVES AUTHORIZED.—The Secretary 

12 of Defense and the Director of National Intelligence, 

13 in consultation with the Secretary of Commerce, 

14 may jointly enter into arrangements with private 

15 sector entities or consortia thereof to provide incen16 tives for the creation, expansion, or modernization of 

17 one or more commercially competitive and sustain18 able microelectronics manufacturing or advanced re19 search and development facilities capable of pro20 ducing measurably secure and specialized microelec21 tronics for use by the Department of Defense, the 

22 intelligence community, critical infrastructure sec23 tors of the United States economy, and other na24 tional security applications. 


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1 (2) COMMERCIAL MANUFACTURING.—A facility 

2 constructed, expanded, or modernized with an incen3 tive provided under paragraph (1) may— 

4 (A) be principally oriented toward commer5 cial manufacturing; or 

6 (B) devote surplus manufacturing capacity 

7 to the production of commercial microelec8 tronics. 

9 (3) RISK MITIGATION REQUIREMENTS.—A facil10 ity constructed, expanded, or modernized with an in11 centive provided under paragraph (1), or the compo12 nents thereof, shall— 

13 (A) have the potential to perform fabrica14 tion, assembly, package, test, or advanced re15 search and development functions for classified 

16 and export-controlled microelectronics; 

17 (B) include management processes to iden18 tify and mitigate supply chain security risks; 

19 and 

20 (C) be able to produce microelectronics 

21 consistent with applicable trusted supply chain 

22 and operational security standards established 

23 under section 224 of the National Defense Au24 thorization Act for Fiscal Year 2020 (Public 

25 Law 116–92). 


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1 (4) NATIONAL SECURITY REQUIREMENTS.—In 

2 the provision of incentives under paragraph (1), the 

3 Secretary of Defense and the Director of National 

4 Intelligence shall jointly give preference to private 

5 sector entities and consortia that— 

6 (A) have participated in previous programs 

7 and projects of the Department of Defense or 

8 the Office of the Director of National Intel9 ligence, including— 

10 (i) the Trusted Integrated Circuit pro11 gram of the Intelligence Advanced Re12 search Projects Activity; 

13 (ii) trusted and assured microelec14 tronics projects, as administered by the 

15 Department of Defense; or 

16 (iii) the Electronics Resurgence Initia17 tive (ERI) program of the Defense Ad18 vanced Research Projects Agency; 

19 (B) have demonstrated an ongoing com20 mitment to performing contracts for the De21 partment of Defense and the intelligence com22 munity; 

23 (C) are approved by the Defense Counter24 intelligence and Security Agency or the Office 

25 of the Director of National Intelligence as preVerDate Sep 11 2014 17:26 Jul 14, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4130.IS S4130

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1 senting an acceptable security risk, taking into 

2 account supply chain assurance vulnerabilities, 

3 counterintelligence risks, and any risks pre4 sented by companies whose owners are located 

5 outside the United States; and 

6 (D) are evaluated periodically for foreign 

7 ownership, control, or influence, consistent with 

8 the determinations in paragraphs (4)(C) and 

9 (5) of subsection (a). 

10 (5) USE OF INCENTIVES.—Incentives may be 

11 provided under paragraph (1) for the construction, 

12 expansion, or modernization of a facility that was 

13 constructed, expanded, or modernized with funds 

14 from a grant awarded under subsection (a). 

15 (6) NONTRADITIONAL DEFENSE CONTRACTORS

16 AND COMMERCIAL ENTITIES.—The arrangements 

17 entered into under paragraph (1) shall be in the 

18 form the Secretary of Defense and the Director of 

19 National Intelligence determine to be appropriate to 

20 encourage industry participation of nontraditional 

21 defense contractors or commercial entities and may 

22 include a contract, a grant, a cooperative agreement, 

23 a commercial agreement, the use of other trans24 action authority under section 2371 of title 10, 

25 United States Code, or another such arrangement. 


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1 (7) REPORTS.— 

2 (A) REPORT BY SECRETARY OF DEFENSE

3 AND DIRECTOR OF NATIONAL INTELLIGENCE.— 

4 Not later than 90 days after the date of the en5 actment of this Act, the Secretary of Defense 

6 and the Director of National Intelligence shall 

7 jointly submit to Congress a report on the plans 

8 of the Secretary and the Director to provide in9 centives under paragraph (1). 

10 (B) BIENNIAL REPORTS BY COMPTROLLER

11 GENERAL OF THE UNITED STATES.—Not later 

12 than 1 year after the date on which the Sec13 retary submits the report required by subpara14 graph (A) and not less frequently than once 

15 every 2 years thereafter, the Comptroller Gen16 eral of the United States shall submit to Con17 gress a report on the activities carried out 

18 under this subsection. 

19 (8) AUTHORIZATION OF APPROPRIATIONS.— 

20 There is authorized to be appropriated to carry out 

21 this subsection $5,000,000,000 for fiscal year 2021, 

22 with such amount to remain available for such pur23 pose until September 30, 2031. 


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1 (c) ADDITIONAL AMOUNTS FOR ENSURING THE FU2 TURE OF UNITED STATES LEADERSHIP IN MICROELEC3 TRONICS.— 

4 (1) AUTHORIZATION OF APPROPRIATIONS.— 

5 There is authorized to be appropriated 

6 $2,000,000,000 for fiscal year 2021, with such 

7 amount to remain available until September 30, 

8 2031, to expand the Electronics Resurgence Initia9 tive of the Defense Advanced Research Projects 

10 Agency to develop advanced disruptive microelec11 tronics technology, including research and develop12 ment to enable production at a volume required to 

13 sustain a robust domestic microelectronics industry 

14 and mitigate parts obsolescence. 

15 (2) AUTHORIZATION OF APPROPRIATIONS.— 

16 There is authorized to be appropriated to carry out 

17 microelectronics research at the National Science 

18 Foundation $1,500,000,000 for fiscal year 2021, 

19 with such amount to remain available for such pur20 pose until September 30, 2031. 

21 (3) AUTHORIZATION OF APPROPRIATIONS.— 

22 There is authorized to be appropriated to carry out 

23 microelectronics research at the Department of En24 ergy $1,250,000,000 for fiscal year 2021, with such 


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1 amount to remain available for such purpose until 

2 September 30, 2031. 

3 (4) AUTHORIZATION OF APPROPRIATIONS.— 

4 There is authorized to be appropriated to carry out 

5 microelectronics research at the National Institute of 

6 Standards and Technology $250,000,000 for fiscal 

7 year 2021, with such amount to remain available for 

8 such purpose until September 30, 2031. 

9 (5) SUPPLEMENT, NOT SUPPLANT.—The 

10 amounts authorized to be appropriated under para11 graphs (1) through (4) shall supplement and not 

12 supplant amounts already appropriated to carry out 

13 the purposes described in such paragraphs. 

14 (6) DOMESTIC PRODUCTION REQUIREMENTS.— 

15 The heads of executive agencies receiving funding 

16 under this section shall develop policies to require 

17 domestic production, to the extent possible, for any 

18 intellectual property resulting from microelectronics 

19 research and development conducted as a result of 

20 these funds and domestic control requirements to 

21 protect any such intellectual property from foreign 

22 adversaries. 

23 (7) SENSE OF CONGRESS.—Congress supports 

24 and encourages efforts by the heads of executive 

25 agencies receiving funding under this subsection to 


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1 co-invest in industry-led microelectronics investment 

2 consortiums to increase private capital investment in 

3 the domestic microelectronics industry. 

4 (d) NATIONAL MICROELECTRONICS RESEARCH AND

5 DEVELOPMENT PLAN.— 

6 (1) IN GENERAL.—The President shall establish 

7 a standing subcommittee of the President’s Office of 

8 Science and Technology’s National Science and 

9 Technology Council for interagency efforts relating 

10 to microelectronics policy. 

11 (2) NATIONAL MICROELECTRONICS RESEARCH

12 PLAN.— 

13 (A) IN GENERAL.—The subcommittee es14 tablished under paragraph (1) shall develop a 

15 national microelectronics research and develop16 ment plan to guide and coordinate funding for 

17 breakthroughs in next-generation microelec18 tronics research and technology, strengthen the 

19 domestic microelectronics workforce, and en20 courage collaboration between government, in21 dustry, and academia. 

22 (B) UPDATES.—Not less frequently than 

23 once each year, the subcommittee established 

24 under paragraph (1) shall update the plan deVerDate Sep 11 2014 17:26 Jul 14, 2020 Jkt 099200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S4130.IS S4130

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1 veloped under subparagraph (A) of this para2 graph. 

3 (e) INDUSTRY ADVISORY COMMITTEE.—The Presi4 dent shall establish a standing subcommittee of the Presi5 dent’s Council of Advisors on Science and Technology to 

6 advise the United States Government on matters relating 

7 to microelectronics policy. 

8 (f) MULTILATERAL EXPORT CONTROL PLAN.—Not 

9 later than 180 days after the date of the enactment of 

10 this Act, the Secretary of State, the Secretary of the 

11 Treasury, and the Secretary of Commerce, in consultation 

12 with the Director of National Intelligence, the Secretary 

13 of Homeland Security, the Secretary of Defense, and the 

14 Secretary of Energy, shall jointly develop and submit to 

15 Congress a plan to coordinate with foreign government 

16 partners on establishing common microelectronics export 

17 control and foreign direct investment screening measures 

18 to align with national and multilateral security priorities. 

19 (g) PROHIBITION RELATING TO FOREIGN ADVER20 SARIES.—None of the funds appropriated pursuant to an 

21 authorization in this section may be provided to an enti22 ty— 

23 (1) under the foreign ownership, control, or in24 fluence of the Government of the People’s Republic 


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1 of China or the Chinese Communist Party, or other 

2 foreign adversary; or 

3 (2) determined to have beneficial ownership 

4 from foreign individuals subject to the jurisdiction, 

5 direction, or influence of foreign adversaries. 

6 (h) REQUIREMENTS FOR SOURCING FROM DOMESTIC

7 MICROELECTRONICS DESIGN AND FOUNDRY SERVICES.— 

8 (1) REQUIREMENTS REQUIRED.—Not later 

9 than 1 year after the date of the enactment of this 

10 Act, the Secretary of Defense shall establish require11 ments, and a timeline for enforcement of such re12 quirements, to the extent possible, for domestic 

13 sourcing for microelectronics design and foundry 

14 services by programs, contractors, subcontractors, 

15 and other recipients of funding from the Department 

16 of Defense. 

17 (2) PROCESSES FOR WAIVERS.—The require18 ments established under paragraph (1) shall include 

19 processes to permit waivers for specific contracts or 

20 transactions for domestic sourcing requirements 

21 based on cost, availability, severity of technical and 

22 mission requirements, emergency requirements and 

23 operational needs, other legal or international treaty 

24 obligations, or other factors. 


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1 (3) UPDATES.—Not less frequently than once 

2 each year, the Secretary shall— 

3 (A) update the requirements and timelines 

4 established under paragraph (1) and the proc5 esses under paragraph (2); and 

6 (B) submit to Congress a report on the up7 dates made under subparagraph (A). 

8 (i) DEFINITIONS.—In this section: 

9 (1) BENEFICIAL OWNER; BENEFICIAL OWNER10 SHIP.—The terms ‘‘beneficial owner’’ and ‘‘beneficial 

11 ownership’’ have the meanings given such terms in 

12 section 847 of the National Defense Authorization 

13 Act for Fiscal Year 2020 (Public Law 116–92). 

14 (2) ENTITY; COMPANY.—The terms ‘‘entity’’ 

15 and ‘‘company’’ mean any corporation, company, 

16 limited liability company, limited partnership, busi17 ness trust, business association, or other similar en18 tity. 

19 (3) FOREIGN OWNERSHIP, CONTROL, OR INFLU20 ENCE.—The term ‘‘foreign ownership, control, or in21 fluence’’ has the meaning given such term in section 

22 847 of the National Defense Authorization Act for 

23 Fiscal Year 2020 (Public Law 116–92). 

24 (4) INTELLIGENCE COMMUNITY.—In this sec25 tion, the term ‘‘intelligence community’’ has the 


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1 meaning given such term in section 3 of the Na2 tional Security Act of 1947 (50 U.S.C. 3003). 

Æ 


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