Congress Passes CHIPS and Science Act

July 29, 2022

The U.S. House of Representatives recently passed the Senate’s version of a bill known as the CHIPS and Science Act. The bill will now be sent to President Joe Biden, who has indicated he will sign it.

The House vote occurred a day after the Senate passed its substitute amendment to the House bill, titled the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act of 2022 (Senate Amendment 5135 to H.R. 4346). In agreeing to the Senate amendment, the House voted along bipartisan lines, as the Senate did in its vote.

As part of $280 billion in spending, the CHIPS and Science Act authorizes $52 billion for domestic semiconductor chip manufacturing, including $39 billion toward construction of chip plants.

The bill, which has been debated by Congress since 2019, also includes an advanced manufacturing investment credit of 25% of qualified investment in a tax year with respect to any advanced semiconductor manufacturing facility of an eligible taxpayer. Among other requirements, property qualifies for the credit if it is integral to the operation of an advanced manufacturing facility, which is defined as having a primary purpose of manufacturing semiconductors or semiconductor manufacturing equipment.