I 118th CONGRESS 2d Session H. R. 8826 IN THE HOUSE OF REPRESENTATIVES June 25, 2024 Ms. Lofgren (for herself and Mr. Lucas ) introduced the following bill; which was referred to the Committee on Energy and Commerce , and in addition to the Committee on Science, Space, and Technology , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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.

1. Short title This Act may be cited as the Chip Equipment Quality, Usefulness, and Integrity Protection Act of 2024 or the Chip EQUIP Act . 2. Definitions (a) In general 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 new paragraph: (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 such redesignated paragraph (4) the following new paragraph: (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 an 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 new subsection: (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 under paragraph (1) if— (A) the ineligible equipment to be purchased by the applicable covered entity is not produced in the United States or allied or partner countries 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 such term is 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 such waiver is in the national security interest of the United States. (3) Foreign entities of concern Nothing in this subsection may be construed to waive the application of section 9907. . (c) Conforming amendments (1) Internal Revenue Code of 1986 The Internal Revenue Code of 1986 is amended— (A) in paragraph (1) of section 48D(c), 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 ) ; and (B) in clause (i) of section 50(a)(6)(D), 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 ) . (2) NDAA Paragraph (5) of section 5949(j) of 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 ) .