Title: American Foundries Act of 2020
Policy area: Commerce

Summary:
American Foundries Act of 2020
This bill provides support for commercial microelectronics projects, secure microelectronics projects, and microelectronics research and development. It also requires the establishment of a national microelectronics research and development plan and implements certain safeguards.
Specifically, the Department of Commerce shall award grants to certain states to assist in financing the construction, expansion, or modernization of microelectronics fabrication, assembly, test, advanced packaging, or advanced research and development facilities.
Additionally, the Department of Defense (DOD) and the Director of National Intelligence may jointly enter into arrangements with private sector entities to provide incentives for the creation, expansion, or modernization of microelectronics manufacturing or advanced research and development facilities capable of producing secure and specialized microelectronics for use by DOD, the intelligence community, critical infrastructure sectors of the U.S. economy, and other national security applications.
The President must establish standing subcommittees to develop a national microelectronics research and development plan and to advise the U.S. government on matters relating to microelectronics policy.
Further, the Department of State, the Department of the Treasury, and Commerce shall jointly develop a plan to coordinate with foreign government partners on establishing common microelectronics export control and foreign direct investment screening measures to align with national and multilateral security priorities.
Lastly, the bill prohibits firms that are owned, controlled, or influenced by the Chinese government or other foreign adversary from accessing funds appropriated by this bill.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4130 Introduced in Senate (IS)]

<DOC>






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.

    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 ``American Foundries Act of 2020''.

SEC. 2. GRANTS FOR CONSTRUCTION OF MICROELECTRONICS MANUFACTURING AND 
              RESEARCH AND DEVELOPMENT FACILITIES, AND WORKFORCE 
              DEVELOPMENT.

    (a) Grants for States With Demonstrated Interest in Constructing 
Microelectronics Manufacturing and Advanced Research and Development 
Facilities.--
            (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, the Secretary of Commerce, in 
        consultation with the Secretary of Defense, shall commence 
        carrying out a program on the award of grants to States 
        described in paragraph (2) to assist in financing the 
        construction, expansion, or modernization (including 
        acquisition of equipment and intellectual property) of 
        microelectronics fabrication, assembly, test, advanced 
        packaging, or advanced research and development facilities.
            (2) States described.--A State described in this paragraph 
        is a State that demonstrates to the Secretary of Commerce the 
        following:
                    (A) Documented interest from a microelectronics 
                company, that has a demonstrated ability to build and 
                operate microelectronics fabrication, assembly, test, 
                advanced packaging, or advanced research and 
                development facilities, in constructing, expanding, or 
                modernizing a commercial microelectronics fabrication, 
                assembly, test, advanced packaging, or advanced 
                research and develop facility, or documented interest 
                from a public-private consortium that has a 
                demonstrated ability to build and operate an advanced 
                research and development facility in the State.
                    (B) Documented interest from a private entity to 
                provide funding to support the construction, expansion, 
                or modernization of the facility that is the subject of 
                the interest documented under subparagraph (A).
                    (C) Commitments from such microelectronics company 
                or consortia to worker and community investment, 
                including--
                            (i) training and education benefits paid 
                        for by the company; and
                            (ii) programs to expand employment 
                        opportunity for economically disadvantaged 
                        individuals.
                    (D) Commitments from regional educational and 
                training entities and institutions of higher education 
                to develop curriculum or engage in workforce training, 
                including programming for training and job placement of 
                economically disadvantaged individuals.
                    (E) Guaranteed State-level economic incentives for 
                the construction, expansion, or modernization of the 
                facility described in subparagraph (B), such as site 
                development, tax incentives, job-training programs and 
                State-level funding for microelectronics research and 
                development.
            (3) Limitation on grant amount.--A State may not be awarded 
        more than $3,000,000,000 under paragraph (1).
            (4) Use of funds.--
                    (A) In general.--A State receiving a grant under 
                paragraph (1) may only use the amount of the grant to 
                finance--
                            (i) the construction, expansion, or 
                        modernization of a state-of-the-art 
                        microelectronics fabrication, assembly, test, 
                        advanced packaging, or advanced research and 
                        development facility with respect to which the 
                        State demonstrated to the Secretary documented 
                        interest under paragraph (2), or for similar 
                        uses in state of practice and legacy facilities 
                        as deemed necessary by the Secretary for 
                        national security and economic competitiveness;
                            (ii) to support workforce development for 
                        such facility; or
                            (iii) to support site development for such 
                        facility.
                    (B) Return of funds.--A State awarded a grant under 
                paragraph (1) shall return any unused funds to the 
                Treasury of the United States on an agreed-upon 
                timeframe determined by the Secretary prior to issuing 
                the funds.
                    (C) Recovery of certain funds.--If a 
                microelectronics entity receiving grant funds under 
                this subsection engages in increased levels of joint 
                research and development, technology licensing or 
                transfer, or investment involving sensitive 
                technologies with entities under the foreign ownership, 
                control, or influence (FOCI) of the Government of the 
                People's Republic of China or other foreign adversary 
                during the period of the grant, as determined by the 
                Secretary as part of a periodic review of whether a 
                microelectronics entity participating in the program 
                specified in this subsection is under foreign 
                ownership, control, or influence, the Secretary shall 
                recover the amounts provided by the Secretary under 
                this subsection.
            (5) Prohibition.--If pursuant to the periodic review of 
        foreign ownership, control, or influence specified in paragraph 
        (4)(C), the Secretary determines that a microelectronics entity 
        is under the foreign ownership, control, or influence of the 
        Government of the People's Republic of China or other foreign 
        adversary during the period of the grant, such entity shall be 
        prohibited from participating in the program specified in this 
        subsection.
            (6) Nonrelocation between states.--
                    (A) Prohibition.--A State may not use any amount of 
                a grant awarded under this subsection to induce the 
                relocation or the movement of existing jobs from one 
                State to another State in competition for those jobs.
                    (B) Remedies.--In the event that the Secretary 
                determines an amount of a grant awarded to a State 
                under this subsection was used in violation of 
                subparagraph (A), the Secretary may pursue appropriate 
                enforcement actions, including--
                            (i) suspension of disbursements of the 
                        grant awarded; and
                            (ii) termination of the grant awarded, 
                        which may include the establishment of a debt 
                        requiring the recipient of the grant to 
                        reimburse the amount of the grant.
            (7) Implementation.--The Secretary shall carry out this 
        section acting through the Director of the National Institute 
        of Standards and Technology.
            (8) Reports and notices.--
                    (A) Secretary of commerce.--
                            (i) Report on implementation plan.--Not 
                        later than 90 days after the date of the 
                        enactment of this Act, the Secretary shall 
                        submit to Congress a report on the plans of the 
                        Secretary to carry out the program required by 
                        paragraph (1).
                            (ii) Notice of pending award.--
                                    (I) In general.--Not later than 30 
                                days before awarding a grant to a State 
                                under this subsection, the Secretary 
                                shall submit to Congress a notice of 
                                the intended award.
                                    (II) Contents.--Each notice 
                                submitted under subclause (I) shall 
                                include a description of the State to 
                                which the Secretary intends to award a 
                                grant under this subsection, the 
                                project or projects for which the 
                                amount of the grant is intended to be 
                                used, specifics on the planned use of 
                                the amounts of the grant for that 
                                project, and the rationale of the 
                                Secretary for awarding the grant.
                    (B) Comptroller general of the united states.--
                            (i) Biennial report.--Not later than 1 year 
                        after the date on which the Secretary of 
                        Commerce submits the report under subparagraph 
                        (A)(i) and not less frequently than once every 
                        2 years thereafter, the Comptroller General of 
                        the United States shall submit to Congress a 
                        report on the activities carried out under this 
                        subsection during the previous year.
                            (ii) Contents.--Each report submitted under 
                        clause (i) shall include, at a minimum, 
                        assessments of the following:
                                    (I) How the program is being 
                                carried out and how recipients of 
                                grants are being selected under the 
                                program.
                                    (II) How other Federal programs are 
                                leveraged for manufacturing, research, 
                                and training to complement the grants 
                                awarded to States under this 
                                subsection.
                                    (III) Outcomes of projects 
                                supported by grants under this 
                                subsection, including the construction, 
                                expansion, or modernization of a 
                                microelectronics fabrication, assembly, 
                                test, advanced packaging, or advanced 
                                research and development facilities, 
                                research and development, workforce 
                                training, employment, wages, and hiring 
                                of economically disadvantaged 
                                populations.
            (9) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $15,000,000,000 
        for fiscal year 2021, with such amount to remain available for 
        such purpose until September 30, 2031.
    (b) Creation, Expansion, or Modernization of Microelectronics 
Manufacturing Facilities and Capabilities for National Security 
Needs.--
            (1) Incentives authorized.--The Secretary of Defense and 
        the Director of National Intelligence, in consultation with the 
        Secretary of Commerce, may jointly enter into arrangements with 
        private sector entities or consortia thereof to provide 
        incentives for the creation, expansion, or modernization of one 
        or more commercially competitive and sustainable 
        microelectronics manufacturing or advanced research and 
        development facilities capable of producing measurably secure 
        and specialized microelectronics for use by the Department of 
        Defense, the intelligence community, critical infrastructure 
        sectors of the United States economy, and other national 
        security applications.
            (2) Commercial manufacturing.--A facility constructed, 
        expanded, or modernized with an incentive provided under 
        paragraph (1) may--
                    (A) be principally oriented toward commercial 
                manufacturing; or
                    (B) devote surplus manufacturing capacity to the 
                production of commercial microelectronics.
            (3) Risk mitigation requirements.--A facility constructed, 
        expanded, or modernized with an incentive provided under 
        paragraph (1), or the components thereof, shall--
                    (A) have the potential to perform fabrication, 
                assembly, package, test, or advanced research and 
                development functions for classified and export-
                controlled microelectronics;
                    (B) include management processes to identify and 
                mitigate supply chain security risks; and
                    (C) be able to produce microelectronics consistent 
                with applicable trusted supply chain and operational 
                security standards established under section 224 of the 
                National Defense Authorization Act for Fiscal Year 2020 
                (Public Law 116-92).
            (4) National security requirements.--In the provision of 
        incentives under paragraph (1), the Secretary of Defense and 
        the Director of National Intelligence shall jointly give 
        preference to private sector entities and consortia that--
                    (A) have participated in previous programs and 
                projects of the Department of Defense or the Office of 
                the Director of National Intelligence, including--
                            (i) the Trusted Integrated Circuit program 
                        of the Intelligence Advanced Research Projects 
                        Activity;
                            (ii) trusted and assured microelectronics 
                        projects, as administered by the Department of 
                        Defense; or
                            (iii) the Electronics Resurgence Initiative 
                        (ERI) program of the Defense Advanced Research 
                        Projects Agency;
                    (B) have demonstrated an ongoing commitment to 
                performing contracts for the Department of Defense and 
                the intelligence community;
                    (C) are approved by the Defense Counterintelligence 
                and Security Agency or the Office of the Director of 
                National Intelligence as presenting an acceptable 
                security risk, taking into account supply chain 
                assurance vulnerabilities, counterintelligence risks, 
                and any risks presented by companies whose owners are 
                located outside the United States; and
                    (D) are evaluated periodically for foreign 
                ownership, control, or influence, consistent with the 
                determinations in paragraphs (4)(C) and (5) of 
                subsection (a).
            (5) Use of incentives.--Incentives may be provided under 
        paragraph (1) for the construction, expansion, or modernization 
        of a facility that was constructed, expanded, or modernized 
        with funds from a grant awarded under subsection (a).
            (6) Nontraditional defense contractors and commercial 
        entities.--The arrangements entered into under paragraph (1) 
        shall be in the form the Secretary of Defense and the Director 
        of National Intelligence determine to be appropriate to 
        encourage industry participation of nontraditional defense 
        contractors or commercial entities and may include a contract, 
        a grant, a cooperative agreement, a commercial agreement, the 
        use of other transaction authority under section 2371 of title 
        10, United States Code, or another such arrangement.
            (7) Reports.--
                    (A) Report by secretary of defense and director of 
                national intelligence.--Not later than 90 days after 
                the date of the enactment of this Act, the Secretary of 
                Defense and the Director of National Intelligence shall 
                jointly submit to Congress a report on the plans of the 
                Secretary and the Director to provide incentives under 
                paragraph (1).
                    (B) Biennial reports by comptroller general of the 
                united states.--Not later than 1 year after the date on 
                which the Secretary submits the report required by 
                subparagraph (A) and not less frequently than once 
                every 2 years thereafter, the Comptroller General of 
                the United States shall submit to Congress a report on 
                the activities carried out under this subsection.
            (8) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $5,000,000,000 
        for fiscal year 2021, with such amount to remain available for 
        such purpose until September 30, 2031.
    (c) Additional Amounts for Ensuring the Future of United States 
Leadership in Microelectronics.--
            (1) Authorization of appropriations.--There is authorized 
        to be appropriated $2,000,000,000 for fiscal year 2021, with 
        such amount to remain available until September 30, 2031, to 
        expand the Electronics Resurgence Initiative of the Defense 
        Advanced Research Projects Agency to develop advanced 
        disruptive microelectronics technology, including research and 
        development to enable production at a volume required to 
        sustain a robust domestic microelectronics industry and 
        mitigate parts obsolescence.
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out microelectronics research at 
        the National Science Foundation $1,500,000,000 for fiscal year 
        2021, with such amount to remain available for such purpose 
        until September 30, 2031.
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out microelectronics research at 
        the Department of Energy $1,250,000,000 for fiscal year 2021, 
        with such amount to remain available for such purpose until 
        September 30, 2031.
            (4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out microelectronics research at 
        the National Institute of Standards and Technology $250,000,000 
        for fiscal year 2021, with such amount to remain available for 
        such purpose until September 30, 2031.
            (5) Supplement, not supplant.--The amounts authorized to be 
        appropriated under paragraphs (1) through (4) shall supplement 
        and not supplant amounts already appropriated to carry out the 
        purposes described in such paragraphs.
            (6) Domestic production requirements.--The heads of 
        executive agencies receiving funding under this section shall 
        develop policies to require domestic production, to the extent 
        possible, for any intellectual property resulting from 
        microelectronics research and development conducted as a result 
        of these funds and domestic control requirements to protect any 
        such intellectual property from foreign adversaries.
            (7) Sense of congress.--Congress supports and encourages 
        efforts by the heads of executive agencies receiving funding 
        under this subsection to co-invest in industry-led 
        microelectronics investment consortiums to increase private 
        capital investment in the domestic microelectronics industry.
    (d) National Microelectronics Research and Development Plan.--
            (1) In general.--The President shall establish a standing 
        subcommittee of the President's Office of Science and 
        Technology's National Science and Technology Council for 
        interagency efforts relating to microelectronics policy.
            (2) National microelectronics research plan.--
                    (A) In general.--The subcommittee established under 
                paragraph (1) shall develop a national microelectronics 
                research and development plan to guide and coordinate 
                funding for breakthroughs in next-generation 
                microelectronics research and technology, strengthen 
                the domestic microelectronics workforce, and encourage 
                collaboration between government, industry, and 
                academia.
                    (B) Updates.--Not less frequently than once each 
                year, the subcommittee established under paragraph (1) 
                shall update the plan developed under subparagraph (A) 
                of this paragraph.
    (e) Industry Advisory Committee.--The President shall establish a 
standing subcommittee of the President's Council of Advisors on Science 
and Technology to advise the United States Government on matters 
relating to microelectronics policy.
    (f) Multilateral Export Control Plan.--Not later than 180 days 
after the date of the enactment of this Act, the Secretary of State, 
the Secretary of the Treasury, and the Secretary of Commerce, in 
consultation with the Director of National Intelligence, the Secretary 
of Homeland Security, the Secretary of Defense, and the Secretary of 
Energy, shall jointly develop and submit to Congress a plan to 
coordinate with foreign government partners on establishing common 
microelectronics export control and foreign direct investment screening 
measures to align with national and multilateral security priorities.
    (g) Prohibition Relating to Foreign Adversaries.--None of the funds 
appropriated pursuant to an authorization in this section may be 
provided to an entity--
            (1) under the foreign ownership, control, or influence of 
        the Government of the People's Republic of China or the Chinese 
        Communist Party, or other foreign adversary; or
            (2) determined to have beneficial ownership from foreign 
        individuals subject to the jurisdiction, direction, or 
        influence of foreign adversaries.
    (h) Requirements for Sourcing From Domestic Microelectronics Design 
and Foundry Services.--
            (1) Requirements required.--Not later than 1 year after the 
        date of the enactment of this Act, the Secretary of Defense 
        shall establish requirements, and a timeline for enforcement of 
        such requirements, to the extent possible, for domestic 
        sourcing for microelectronics design and foundry services by 
        programs, contractors, subcontractors, and other recipients of 
        funding from the Department of Defense.
            (2) Processes for waivers.--The requirements established 
        under paragraph (1) shall include processes to permit waivers 
        for specific contracts or transactions for domestic sourcing 
        requirements based on cost, availability, severity of technical 
        and mission requirements, emergency requirements and 
        operational needs, other legal or international treaty 
        obligations, or other factors.
            (3) Updates.--Not less frequently than once each year, the 
        Secretary shall--
                    (A) update the requirements and timelines 
                established under paragraph (1) and the processes under 
                paragraph (2); and
                    (B) submit to Congress a report on the updates made 
                under subparagraph (A).
    (i) Definitions.--In this section:
            (1) Beneficial owner; beneficial ownership.--The terms 
        ``beneficial owner'' and ``beneficial ownership'' have the 
        meanings given such terms in section 847 of the National 
        Defense Authorization Act for Fiscal Year 2020 (Public Law 116-
        92).
            (2) Entity; company.--The terms ``entity'' and ``company'' 
        mean any corporation, company, limited liability company, 
        limited partnership, business trust, business association, or 
        other similar entity.
            (3) Foreign ownership, control, or influence.--The term 
        ``foreign ownership, control, or influence'' has the meaning 
        given such term in section 847 of the National Defense 
        Authorization Act for Fiscal Year 2020 (Public Law 116-92).
            (4) Intelligence community.--In this section, the term 
        ``intelligence community'' has the meaning given such term in 
        section 3 of the National Security Act of 1947 (50 U.S.C. 
        3003).
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