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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4585 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 4585

To prohibit covered entities that receive financial assistance relating 
 to semiconductors from purchasing certain semiconductor manufacturing 
 equipment from foreign entities of concern or subsidiaries of foreign 
              entities of concern, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 18, 2024

  Mr. Kelly (for himself and Mrs. Blackburn) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To prohibit covered entities that receive financial assistance relating 
 to semiconductors from purchasing certain semiconductor manufacturing 
 equipment from foreign entities of concern or subsidiaries of foreign 
              entities of concern, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``The Chip Equipment Quality, 
Usefulness, and Integrity Protection Act of 2024'' or the ``Chip EQUIP 
Act of 2024''.

SEC. 2. PURCHASES OF SEMICONDUCTOR MANUFACTURING EQUIPMENT.

    (a) Definitions.--Section 9901 of the William M. (Mac) Thornberry 
National Defense Authorization Act for Fiscal Year 2021 (15 U.S.C. 
4651) is amended--
            (1) by redesignating paragraphs (2), (3), (4), (5), (6), 
        (7), (8), (9), (10), (11), (12), and (13) as paragraphs (3), 
        (4), (6), (7), (8), (9), (10), (11), (12), (13), (14), and 
        (15), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) The term `completed, fully assembled' means the state 
        in which all (or substantially all) necessary parts, chambers, 
        subsystems, and subcomponents have been put together, resulting 
        in a ready-to-use or ready-to-install item to be directly 
        purchased from an entity.'';
            (3) in subparagraph (A) of paragraph (4), as so 
        redesignated, by striking ``paragraph (2)'' and inserting 
        ``paragraph (3)''; and
            (4) by inserting after paragraph (4), as so redesignated, 
        the following:
            ``(5) The term `ineligible equipment'--
                    ``(A) means completed, fully assembled 
                semiconductor manufacturing equipment that is 
                manufactured or assembled by a foreign entity of 
                concern or subsidiary of a foreign entity of concern 
                and used in the fabrication, assembly, testing, 
                advanced packaging, production, or research and 
                development of semiconductors;
                    ``(B) includes--
                            ``(i) deposition equipment;
                            ``(ii) etching equipment;
                            ``(iii) lithography equipment;
                            ``(iv) inspection and measuring equipment;
                            ``(v) wafer slicing equipment;
                            ``(vi) wafer dicing equipment;
                            ``(vii) wire bonders;
                            ``(viii) ion implantation equipment;
                            ``(ix) chemical mechanical polishing; and
                            ``(x) diffusion or oxidation furnaces; and
                    ``(C) does not include any part, chamber, 
                subsystem, or subcomponent that enables or is 
                incorporated into such equipment.''.
    (b) Ineligible Use of Funds.--Section 9902 of the William M. (Mac) 
Thornberry National Defense Authorization Act for Fiscal Year 2021 (15 
U.S.C. 4652) is amended by adding at the end the following:
    ``(j) Ineligible Use of Funds.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall include in the terms of each agreement with a covered 
        entity for the award of Federal financial assistance under this 
        section prohibitions with respect to a project relating to the 
        procurement, installation, or use of ineligible equipment.
            ``(2) Waiver.--The Secretary may waive the prohibitions 
        described in paragraph (1) if--
                    ``(A) the ineligible equipment to be purchased by 
                the applicable covered entity is not produced in the 
                United States or an allied or partner country in 
                sufficient and reasonably available quantities or of a 
                satisfactory quality to support established or expected 
                production capabilities; or
                    ``(B)(i) the use of the ineligible equipment 
                complies with the requirements set forth in the Export 
                Administration Regulations, as defined in section 1742 
                of the Export Control Reform Act of 2018 (50 U.S.C. 
                4801); and
                    ``(ii) the Secretary, in consultation with the 
                Director of National Intelligence or the Secretary of 
                Defense, determines the waiver is in the national 
                security interest of the United States.
            ``(3) Foreign entities of concern.--Nothing in this 
        subsection shall be construed to waive the application of 
        section 9907.''.
    (c) Conforming Amendments.--
            (1) Section 48D(c)(1) of the Internal Revenue Code of 1986 
        is amended by striking ``section 9901(6) of the William M. 
        (Mac) Thornberry National Defense Authorization Act for Fiscal 
        Year 2021'' and inserting ``section 9901 of the William M. 
        (Mac) Thornberry National Defense Authorization Act for Fiscal 
        Year 2021 (15 U.S.C. 4651)''.
            (2) Section 50(a)(6)(D)(i) of the Internal Revenue Code of 
        1986 is amended by striking ``section 9901(7) of the William M. 
        (Mac) Thornberry National Defense Authorization Act for Fiscal 
        Year 2021'' and inserting ``section 9901 of the William M. 
        (Mac) Thornberry National Defense Authorization Act for Fiscal 
        Year 2021 (15 U.S.C. 4651)''.
            (3) Section 5949(j)(5) division E of James M. Inhofe 
        National Defense Authorization Act for Fiscal Year 2023 (41 
        U.S.C. 4713 note; Public Law 117-263) is amended by striking 
        ``paragraph (7) of section 9901 of the William M. (Mac) 
        Thornberry National Defense Authorization Act for Fiscal Year 
        2021 (15 U.S.C. 4651), as added by section 103(a)(4) of the 
        CHIPS Act of 2022 (division A of Public Law 117-167)'' and 
        inserting ``section 9901 of the William M. (Mac) Thornberry 
        National Defense Authorization Act for Fiscal Year 2021 (15 
        U.S.C. 4651)''.
                                 <all>
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