[Senate Hearing 118-601]
[From the U.S. Government Publishing Office]
S. Hrg. 118-601
CHIPS AND SCIENCE IMPLEMENTATION
AND OVERSIGHT
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 4, 2023
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
_______
U.S. GOVERNMENT PUBLISHING OFFICE
59-705 PDF WASHINGTON : 2025
Available online: http://www.govinfo.gov
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota TED CRUZ, Texas, Ranking
BRIAN SCHATZ, Hawaii JOHN THUNE, South Dakota
EDWARD MARKEY, Massachusetts ROGER WICKER, Mississippi
GARY PETERS, Michigan DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois DAN SULLIVAN, Alaska
JON TESTER, Montana MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona TODD YOUNG, Indiana
JACKY ROSEN, Nevada TED BUDD, North Carolina
BEN RAY LUJAN, New Mexico ERIC SCHMITT, Missouri
JOHN HICKENLOOPER, Colorado J. D. VANCE, Ohio
RAPHAEL WARNOCK, Georgia SHELLEY MOORE CAPITO, West
PETER WELCH, Vermont Virginia
CYNTHIA LUMMIS, Wyoming
Lila Harper Helms, Staff Director
Melissa Porter, Deputy Staff Director
Jonathan Hale, General Counsel
Brad Grantz, Republican Staff Director
Nicole Christus, Republican Deputy Staff Director
Liam McKenna, General Counsel
C O N T E N T S
----------
Page
Hearing held on October 4, 2023.................................. 1
Statement of Senator Cantwell.................................... 1
Statement of Senator Cruz........................................ 4
Statement of Senator Schatz...................................... 20
Statement of Senator Tester...................................... 24
Statement of Senator Wicker...................................... 26
Statement of Senator Klobuchar................................... 28
Statement of Senator Fischer..................................... 30
Statement of Senator Hickenlooper................................ 32
Statement of Senator Moran....................................... 34
Statement of Senator Lujan....................................... 36
Statement of Senator Thune....................................... 38
Statement of Senator Peters...................................... 40
Statement of Senator Blackburn................................... 41
Statement of Senator Welch....................................... 43
Statement of Senator Vance....................................... 44
Statement of Senator Rosen....................................... 46
Statement of Senator Schmitt..................................... 48
Statement of Senator Markey...................................... 50
Statement of Senator Young....................................... 52
Statement of Senator Baldwin..................................... 54
Statement of Senator Capito...................................... 55
Statement of Senator Sinema...................................... 57
Statement of Senator Budd........................................ 59
Red Light Report by Senator Ted Cruz......................... 61
Witnesses
Hon. Gina M. Raimondo, Secretary, U.S. Department of Commerce.... 6
Prepared statement........................................... 7
Dr. Sethuraman Panchanathan, Director, National Science
Foundation..................................................... 12
Prepared statement........................................... 14
Appendix
Letter dated February 1, 2023 to Hon. Dr. Sethuraman
Panchanathan, Director, National Science Foundation from United
States Senators: Dan Sullivan, Roger F. Wicker, John Cornyn,
and Todd Young................................................. 83
Letter dated March 30, 2023 to Hon. Dan Sullivan from Sethuraman
Panchanathan, Director, National Science Foundation............ 85
Letter dated October 4, 2023 to Hon. Maria Cantwell and Hon. Ted
Cruz from Kristen Swearingen, Vice President, Legislative &
Political Affairs, Associated Builders and Contractors......... 86
Response to written questions submitted to Hon. Gina M. Raimondo
by:
Hon. Maria Cantwell.......................................... 88
Hon. Tammy Baldwin........................................... 93
Hon. Tammy Duckworth......................................... 93
Hon. Kyrsten Sinema.......................................... 98
Hon. Jacky Rosen............................................. 99
Hon. Ben Ray Lujan........................................... 101
Hon. Raphael Warnock......................................... 103
Hon. Peter Welch............................................. 111
Hon. Ted Cruz................................................ 111
Hon. Roger Wicker............................................ 128
Hon. Deb Fischer............................................. 130
Hon. Jerry Moran............................................. 130
Hon. Dan Sullivan............................................ 134
Hon. Marsha Blackburn........................................ 138
Hon. Todd Young.............................................. 143
Hon. Shelley Moore Capito.................................... 146
Hon. Cynthia Lummis.......................................... 149
Response to written questions submitted to Dr. Sethuraman
Panchanathan by:
Hon. Maria Cantwell.......................................... 152
Hon. Tammy Baldwin........................................... 154
Hon. Tammy Duckworth......................................... 155
Hon. Kyrsten Sinema.......................................... 158
Hon. Jacky Rosen............................................. 158
Hon. Ben Ray Lujan........................................... 159
Hon. Raphael Warnock......................................... 160
Hon. Peter Welch............................................. 167
Hon. Ted Cruz................................................ 168
Hon. Jerry Moran............................................. 174
Hon. Dan Sullivan............................................ 177
Hon. Marsha Blackburn........................................ 178
Hon. Todd Young.............................................. 181
CHIPS AND SCIENCE IMPLEMENTATION
AND OVERSIGHT
----------
WEDNESDAY, OCTOBER 4, 2023
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:08 p.m., in
room SR-253, Russell Senate Office Building, Hon. Maria
Cantwell, Chairwoman of the Committee, presiding.
Present: Senators Cantwell [presiding], Klobuchar, Schatz,
Markey, Peters, Baldwin, Tester, Sinema, Rosen, Lujan,
Hickenlooper, Welch, Cruz, Thune, Wicker, Fischer, Moran,
Blackburn, Young, Budd, Schmitt, Vance, and Capito.
OPENING STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
The Chair. Good afternoon. The Senate Commerce Committee,
Commerce, Science, and Transportation Committee will come to
order.
I thank my colleagues, who, many have been in this room for
many hours already today, doing double duty today on both an
Aviation Hearing, and now a very important conversation about
the Implementation of the CHIPS and Science Act, which our
committee played a very big role in. So needless to say, our
committee has been working very diligently on a lot of
transformational policy.
While we are waiting for our colleague here, I think I will
thank Senator Wicker, again, for his work on the CHIPS and
Science Act. I think people may not remember, but this
committee, I don't know how many amendments we processed, I
know it was in the hundreds, it might have been in the three-
hundreds. But I definitely believe that that kind of regular
order process was good for the institution, good for the debate
about science.
And hopefully, people will continue, in today's hearing, to
understand that, and understand much of the debate that maybe
wasn't as clear, in a big public perspective, as it was to all
of us who were working behind the scenes, daily, to try to
figure this policy out.
OK, we will go ahead and get started, and then when my
colleague gets here, hopefully, he will be here soon, we will
let him make his opening statement.
But welcome, Secretary Raimondo; and Director ``Panch'', is
it OK, ``Panch'', Panchanathan, thank you for being here with
us today.
I also want to mention that apparently, there is a FEMA
Emergency Alert Test that is going to happen today. So if
everybody in the room gets a big alert message, that is what
that is about, and not to be concerned about it, but that
everybody knows that it is going to go off.
So a little more than a year ago, Congress passed the
landmark CHIPS and Science Act, and it was a clear commitment
to America's competitiveness and the idea that we need to
innovate in the United States. And clearly, we were doing a lot
in innovation. We were publishing a lot. But we needed to
translate more, patent more, and really help our manufacturing
base be competitive for the future.
The two witnesses before us today led on the delivery of
those commitments and are here to tell us today about the
substantial progress their agencies are making during the first
year of the implementation of this Act.
We have already seen the CHIPS and Science Act spur more
than $200 billion in private sector investment, from
semiconductors across the country to other investments. And the
Federal Government's role in this is so important because the
commitment to the CHIPS Program Office within the Department of
Congress is generating more than 500 statements of interest
from companies looking at new projects and innovation.
So today, we will have a chance to ask the Secretary about
those proposals, building resiliency and a long-lasting
semiconductor ecosystem in the United States. Since we had a
chance to discuss this earlier, I am pretty sure we are going
to hear today about how we are never going to be in this
problem again as it relates to Legacy chips, that we are going
to have a good plan to help on a supply chain development for
that, that our DoD stature is going to continue to be on the
cutting edge of chips.
And I think you are going to tell us that the diversity of
applications, the robustness of it means that the ecosystem
that we are trying to restore and grow is alive and well.
We have also seen NSF begin to roll out innovation engines
with more than 43 million going to planning grants to tap
innovation across the country. I love that the Director, during
our efforts, basically coined the phrase ``Innovation Anywhere,
Opportunity Everywhere,'' and I definitely think that is what
we were looking for in this legislation, both in the spreading
of the amount of EPSCoR funding, and in diversifying a
workforce opportunity across the United States.
For example, in the State of Washington, a Spokane company
won a Regional Innovation Engine Award to advance energy and
decarbonization. We all know that innovation and expertise
helps us generate jobs and tackle some of our most pressing
problems. And we know that what we have to do on this
committee, besides hearing from these witnesses today, is push
our colleagues to fully fund the aspects of CHIPS and Science
that were funded.
In fact, the Committee's two previous attempts at
competitive bills fell short because the funding was not
realized, one, because we faced an economic downturn, and then
the other just in our first, very first effort on
competitiveness also didn't make the mark from an
appropriations perspective.
So we know that our foreign adversaries are not waiting. We
know that our strategic competitors are also moving ahead, and
we need to make this investment to what we would say, ``derisk
the supply chain'', and make sure that we are innovating and
translating our science faster.
As we look to the future we need to work together to ensure
that the U.S. remains competitive in the global marketplace on
other issues like artificial intelligence, 5G wireless systems,
and quantum computing. And that will require the United States
to do a couple of things: The ability of the U.S. to produce
and produce chips to support this innovation. That is why the
advancement and hearing where we are with the applications is
so important.
Second, we need a resilient supply chain that can withstand
disruptions like we saw in the past, either geopolitical
tensions, natural disasters, global pandemics, whatever, we
need a more dependent supply chain, and a workforce that is
well skilled and technical to the types of technology that are
being produced today.
I personally believe this is one of the biggest gaps left
to be addressed in the CHIPS and Science Act. We have some
money, both for semiconductor training and workforce
advancements, and some on the science side through NSF, but a
lot more needs to happen.
In the United States, the jobs of tomorrow are here today,
but the skill level of the workforce to do them is not. And so
the more that we can take advantage of the job creation that is
happening by marrying that up, something the Secretary knows
from her days as Governor, the more we can streamline that and
marry that up together, the more this engine is going to rev
and keep effecting the U.S. economy.
Today, U.S. manufacturers only 12 percent of the world's
semiconductors compared to where we were in the 1990s at 30
percent. So the question really today is, are we seeing the
right level of investment to make a return to the market share
that we think is important? My guess is we are going to hear
both from the private sector investment that has already been
made and the robust response to the programs. We are going to
hear that the investment wants to be in the United States.
So, I think we can't emphasize enough how important it was
to bring this manufacturing back. Consumers saw car prices
raise as much as 40 percent. Truck manufacturers, like PACCAR
in my state, weren't able to get semiconductors, weren't,
literally, able to ship product. Supply chain resiliency also
created deadlocks for other industries, and impacted national
security. So, I hope that we will all work together on better
tools for the future. I will have some questions about that in
the question-and-answer period.
But the semiconductor industry today is facing a gap of
67--I am sorry--67,000 people by 2030. That is just
semiconductors. So I know we, in my state, as it relates just
to STEM, have a gap of 60,000 workers across various sectors,
not just semiconductors. So clearly, we need to make the
investments in the scholarship programs and in the STEM
Apprentices and Workforce for Tomorrow to realize all this
investment that is now being made in the United States of
America.
So welcome to our witnesses. I will turn it over to my
colleague, Senator Cruz, for his opening statement.
STATEMENT OF HON. TED CRUZ,
U.S. SENATOR FROM TEXAS
Senator Cruz. Thank you, Madam Chair, for calling this
important hearing. And welcome Secretary Raimondo, Director
Panchanathan, for both being here today.
Semiconductors drive our modern economy, from cell phones,
and cars, to supercomputers, and medical devices. These
integrated circuits have been integrated into our daily lives.
Before 2020, however, when we suddenly couldn't get enough
of them, most of us probably didn't realize just how big a role
these chips play. It became very quickly apparent that, in
terms of economic and national security, just how dependent and
vulnerable we are on semiconductors. Yes, we rely on these
chips for consumer electronics and cars, but they are also in
just about every----
[Interruption by emergency alert test.]
Senator Wicker. I think your time is up, Senator.
[Laughter.]
Senator Cruz. We have an emergency in semiconductors.
[Laughter.]
Senator Cruz. That is a first. I believe----
The Chair. We announced it before you got here. So sorry,
we should have given you some indication about that.
Senator Cruz. I think our first witness is a semiconductor.
You are done?
[Interruption by emergency alert test resumes.]
Senator Cruz. No.
[Laughter.]
Senator Cruz. As I was saying, with great trepidation, I
observed that just about every advanced weapon system in our
Military relies on semiconductors, and most of them are not
made in the United States. Recognizing this, there was a flurry
of legislative activity to onshore and near-shore semiconductor
manufacturing last Congress, culminating in the CHIPS and
Science Act.
Parts of this law, like the FABS Act, which I co-sponsored
and enthusiastically supported, provided tax credits to
incentivize chip investments in the United States. The final
bill, however, also included a whopping $52 billion in direct
subsidies from taxpayers that, in my view, would predictably
lead to government bureaucrats picking winners and losers. At
worst, this kind of industrial policy can be rife with
political interference and waste, and even at best, it is often
done poorly and inefficiently.
That is why I ultimately voted against the bill, despite it
containing a number of things I strongly support. We are
already seeing a number of these concerns realized. When I
speak to companies in Texas, many of them bemoan how the Biden
Administration has imposed extraneous nonstatutory conditions
on receipt of taxpayer support.
Commerce isn't just asking if you have got the best
technology or the cheapest manufacturing process; instead, the
bureaucrats want to know if you have proper plans to subsidize
child care or to support affordable housing. Have you
adequately engaged with labor unions? Are your suppliers
sufficiently diverse? None of these topics are critical to the
fundamental question of whether you can build the best chip at
the lowest price.
Maybe these issues are relevant, but does anyone think that
officials in Washington know better than the engineers and the
investors behind these projects? Moreover, none of these
strings were included in the law, but they have, nonetheless
been attached, by the Biden Administration, to try to enact by
regulations things that they don't have the votes to pass
through Congress.
As many Commerce Committee Republicans noted in the letter
that we sent to Secretary Raimondo in March, this attempt at
backdoor progressive social policy will only serve to make
domestic chip production more expensive, less competitive, and
more reliant on taxpayer subsidies over private investment.
More recently, an area of major concern has been the
onerous environmental requirements under NEPA, and the
potential for this environmental process law to drive up
compliance costs for manufacturers and significantly slow new
construction. That is why Senator Mark Kelly and I led a
bipartisan amendment to the National Defense Authorization Act
to exclude from NEPA the overwhelming majority of chips-funded
semiconductor projects.
Secretary Raimondo, I want to thank you for your support on
that effort, and for explicitly endorsing our amendment during
your House testimony last month. Secretary Raimondo, we have
also had good conversations about the importance of a strong
U.S. chip industry. We both want to see America's innovative
capacity soar, and we agree that using these taxpayer funds,
appropriately, is immensely challenging.
Fortunately, states like Texas are showing us a path
forward here. Texas boasts an established ecosystem of
innovators, world-class universities, low taxes, and a
permissive regulatory environment that enables companies to
grow and to thrive. As a result, we have already attracted $61
billion in private, new semiconductor investments, and created
over 8,000 new jobs, making Texas the center of U.S.
semiconductor manufacturing.
Texas has a storied history in the invention and production
of semiconductors, and we are proud to help lead America's
semiconductor renaissance. And I would encourage the Commerce
Department to look to the model in Texas and see how to make
this broader effort more successful.
Finally, it is worth noting that the other half of the
CHIPS and Science's Act, Director Panchanathan, the NSF, does
substantial work advancing basic science that helps expand our
scientific knowledge, and that is important work, but I am
deeply concerned over what appears to be the increasing
politicization of NSF-funded science, and the feedback loop,
and the scientific stagnation this is creating.
I am especially disturbed by recent reports that NSF has,
to the tune of tens of millions of dollars, been funding
projects on how to counter, ``populist narratives'' and so-
called ``mis- and disinformation'', which seems like little
more than funding the pseudoscience of censorship.
So I look forward to hearing from both our witnesses today
on how they are implementing this very important law. The
taxpayers have put a lot of skin in this game, and we all owe
it to them to get it right.
The Chair. Thank you. We will start now with Secretary
Raimondo. Welcome. I can't imagine what a busy time it is for
you and the organization that is implementing this Act. We
appreciate your time being here today.
STATEMENT OF HON. GINA M. RAIMONDO, SECRETARY,
U.S. DEPARTMENT OF COMMERCE
Secretary Raimondo. It is my pleasure to be here today.
Thank you, Chairwoman, and thank you, Ranking Member Cruz, and
Members of the Committee; thank you for the opportunity to come
talk to you about how we are implementing this historic
legislation. And of course, I am so pleased to be here with
``Panch'', a fantastic NSF Director.
I do want to begin by taking just a second to share my
condolences with Senator Feinstein's family. She was a pioneer
and a role model for so many women like me. So I wanted to just
take a second to say that.
Because of your hard work, in large part due to you,
Chairwoman Cantwell, and bipartisan support of the Committee,
the Commerce Department now has the honor, responsibility to
invest $50 billion in our domestic semiconductor manufacturing
and research and development. And I concur; this is an enormous
responsibility and a massive amount of taxpayer dollars.
We opened the application process in February, just a few
months after you passed the bill. We have since received more
than 500 statements of interest from 42 states, from
manufacturers large and small. They outline proposals to
manufacture chips and the relevant equipment and materials here
in the United States. Very importantly, of the 500 statements
of interest, we have received over 100 applications, or pre-
applications.
In the last two weeks, we finalized and put out the
guardrails to protect U.S. Government investments and bolster
our national security. We are also developing our CHIPS R&D
Program to meet the unique challenges of building a sustained
R&D to manufacturing pipeline. The centerpiece of these efforts
is the National Semiconductor Technology Center, or the NSTC,
which we expect to launch this fall. So a great deal of
activity since about a year ago when the bill was passed. And
of course, all of that research and development work we are
doing in collaboration with the NSF.
The CHIPS and Science Act also authorized two new programs,
the Tech Hub Initiative and Recompete, which we are
administering through the EDA. We have received 400
applications for the Tech Hub grants. It is unbelievable; I
have never seen anything more oversubscribed. Later this fall,
EDA will launch--will make the announcements of the Tech Hub
designations, and then also invite an opportunity for
additional funding for implementation.
Similarly, we are investing $200 million in the Recompete
Pilot Program to spur economic activity in geographically
diverse and economically distressed communities across the
country.
Thanks to your work in the CHIPS and Science Act, we are
making historically bold and strategic investments that will
strengthen our national and economic security. If we are
successful, when we are successful, the United States will
become the premier destination in the world where new chip
architectures can be invented in our research labs, designed
for applications, manufactured at scale by well-trained, well-
paid American workers, and packaged in the United States. So it
is a tremendous piece of work that we have, great progress on
since the bill was passed; of course, we will answer any
questions related to that.
Before I close, just to mention how stressed we were about
the possibility of a Government shutdown, and how troubling it
was to come within hours of that shutdown. So thank you for
working hard to make sure that did not happen. It goes without
saying, China, Russia, Iran aren't shutting down. The work we
are doing in the CHIPS Act is essential to our national
security, and any shutdown would be massively disruptive to our
ability to stay on the pace that we are on in implementing this
very important work.
So with that, I will be open for questions, or turn it over
to Panch.
[The prepared statement of Secretary Raimondo follows:]
Prepared Statement of Hon. Gina M. Raimondo, Secretary,
U.S. Department of Commerce
Chair Cantwell, Ranking Member Cruz, and members of the Committee,
thank you for this opportunity to update you on the Commerce
Department's (Commerce, or the Department) efforts to unleash the next
generation of American innovation, protect our national security, and
preserve our global economic competitiveness through implementation of
the ``CHIPS and Science Act'', which Congress passed and President
Biden signed into law over one year ago.
Thanks to the bipartisan support for the CHIPS and Science Act from
members of this Committee and across the Congress, the Department is
making substantial progress on some of our Nation's most pressing
economic and national security priorities, including those related to
our supply chains, manufacturing, innovation, and workforce.
The research, innovation, and manufacturing sparked by this law can
solidify America's position as the world's technological superpower,
securing our economic and national security future for the coming
decades. As global competition becomes increasingly about technology
and semiconductors (chips), rather than just tanks and missiles, the
countries that invest in research, innovation, and their workforces
will lead in the 21st century. The CHIPS and Science Act will help
enable us to seize that leadership with its strong support for the
National Institute of Standards and Technology (NIST) and its important
mission focused on developing the measurement science and standards
critical to U.S. leadership in emerging technologies like
biotechnology, quantum science, cybersecurity, and artificial
intelligence. Over the past year, NIST has made significant advances in
each of the areas highlighted by the Act, including the release of the
NIST Artificial Intelligence Risk Management Framework, the update of
NIST's Cybersecurity Framework, funding for additional regional
cybersecurity workforce partnerships, and enhanced leadership in
international standards development through the launch and
implementation of the United States Government National Standards
Strategy for Critical and Emerging Technologies. Furthermore, I
appreciate this Committee's support for strengthening and updating the
research infrastructure at NIST and it continues to be a priority of
the Department.
CHIPS Incentives and Research and Development (R&D) Implementation
Within the CHIPS and Science Act, the CHIPS program's success will
be judged on at least two key criteria: one, whether this program
enabled us to build a reliable and resilient semiconductor industry
including a robust workforce and strong innovation ecosystem that
protects America's technological leadership for the coming decades; and
two, whether the Department was a good steward of taxpayer dollars. The
United States government is making a public investment in private
industry without recent precedent, and taxpayers deserve transparency
and accountability.
Today, I would like to provide the Committee with an update on the
Commerce Department's efforts toward implementing this historic
legislation. The National Institute of Standards and Technology at the
Department of Commerce is overseeing $50 billion to revitalize the U.S.
semiconductor industry, including $39 billion in semiconductor
incentives and $11 billion in research and development. Since August
2022, when the CHIPS and Science Act became law, the Department has
created and staffed two new offices, the CHIPS Program Office (CPO) and
the CHIPS R&D office, hiring over 150 employees to develop, implement,
and oversee the programs. Both offices have attracted top-notch talent
across sectors, including from private industry, national security,
finance, and the Federal government.
In February, the Department launched the first funding opportunity,
seeking applications for projects to construct, expand, or modernize
commercial facilities for the production of leading-edge, current-
generation, and mature-node semiconductors. This includes both front-
end wafer fabrication and back-end packaging. In June, the Department
opened this funding opportunity to semiconductor materials and
manufacturing equipment facilities for which the capital investment
equals or exceeds $300 million. Last week, the Department released a
second funding opportunity which seeks applications for smaller-scale
projects involving the construction, expansion, or modernization of
semiconductor materials and manufacturing equipment facilities for
which the capital investment falls below $300 million. In the coming
months, the Department intends to announce an additional funding
opportunity for R&D facilities.
Across all of the funding opportunities, applicants will be
evaluated based primarily on the extent to which the application
addresses the program's economic and national security objectives, but
they will be based on commercial viability, financial strength, project
technical feasibility and readiness, workforce development, and broader
impacts, like the ability of the new facilities to support the R&D
programs like the National Semiconductor Technology Center (NSTC).
To guide its investments, the Department has released two ``Vision
for Success'' papers outlining its strategic objectives. The first
vision statement focused on the Department's investments in commercial
fabrication facilities. If those investments are successful, then by
the end of the decade the United States will have at least two new
large-scale clusters of leading-edge logic fabs; be home to multiple
high-volume advanced packaging facilities; produce high-volume leading-
edge dynamic random-access memory (DRAM) chips on economically
competitive terms; and have increased production capacity for the
current-generation and mature-node chips most vital to U.S. economic
and national security.
The Department has also released a vision statement for its
investments in facilities for semiconductor materials and manufacturing
equipment. In investing in the upstream supply chain, the Department
aims to strengthen supply chain resilience, including by addressing
chokepoint risks flowing from geographic concentration; advancing U.S.
technology leadership; and supporting vibrant U.S. fab clusters.
Since the launch of the first funding opportunity, the response has
been overwhelmingly positive--the Department has received more than 500
statements of interest (SOIs) from companies in 42 states. These SOIs
represent potential applicants seeking CHIPS incentives for commercial
fabrication facilities, packaging facilities, material suppliers and
equipment manufacturers, and R&D facilities. Additionally, the
Department has received over 100 pre-applications and full
applications, demonstrating that as applicants become eligible to file
a pre-application or full application, they are moving through the
process and directly engaging with the CHIPS Incentives Program. It is
clear that the private sector is eager to continue investing in America
and is ambitious about scaling up semiconductor production across the
country.
In addition, recognizing the national security imperative of
investments in the domestic semiconductor industry, the Departments of
Commerce and Defense in July announced a Memorandum of Agreement (MOA)
to expand collaboration to strengthen the U.S. semiconductor defense
industrial base. The agreement will increase information-sharing
between the Departments to facilitate close coordination on the CHIPS
for America's incentives programs, including collaboration on potential
investment applications to ensure that our departments are making
complementary decisions that maximize Federal investments under the
CHIPS Incentive Program and the Department of Defense's (DoD) Defense
Production Act and Industrial Base Analysis and Sustainment funds. This
alignment of priorities and decision-making will help ensure that our
respective investments position the U.S. to produce semiconductor chips
essential to national security and defense programs.
The Department's commitment to national security in the CHIPS
program is also reflected in our effort to implement strict guardrails
to ensure that the investments made in research and innovation are not
used to benefit foreign countries of concern, which includes China.
Last month, the Department issued a final rule that meets the national
security goals of the CHIPS and Science Act. The rule, ``Preventing the
Improper Use of CHIPS Act Funding,'' seeks to impose two main
categories of guardrails: 1) limiting the expansion of semiconductor
manufacturing in foreign countries of concern, and 2) limiting joint
research or technology licensing efforts with foreign entities of
concern that relate to technology or products that raise national
security concerns. The rule will help ensure CHIPS investments enhance
global supply chain resilience and promote U.S. leadership in designing
and building important semiconductor technologies.
Our CHIPS projects cannot succeed without investing in the workers
who will build, operate, and maintain fabs. Last February, I called for
America to double the semiconductor workforce overall including by
tripling the number of graduates in semiconductor related fields and
training 100,000 new technicians. Since then, the Department has worked
closely with the semiconductor industry, labor unions, education
providers, and other community partners to develop a strong vision for
workforce development. This includes carefully assessing the workforce
development plans in applications, working with recipients and
education and training partners once awards are made, and supporting
investments that expand the workforce pipeline including women and
people of color.
Finally, the CHIPS and Science Act also created a 25 percent
investment tax credit for companies making qualified investments in
facilities with a primary purpose of producing semiconductors or
semiconductor manufacturing equipment. We welcome the Department of the
Treasury's work to implement this tax credit, including the release of
a proposed rule in March 2023. This tax credit will be an important
complement to Commerce's incentive funds.
Our success will be short-lived if we focus only on manufacturing.
The $39 billion in incentives will bring semiconductor manufacturing
back to the United States, but a robust R&D ecosystem will keep it
here. That is why, with the support of Congress, the Department is
investing $11 billion to build a strong semiconductor R&D ecosystem to
generate the ideas and the talent necessary to support these efforts.
The heart of these investments is the National Semiconductor
Technology Center, which is an ambitious public-private partnership
where government, industry, customers, suppliers, educational
institutions, entrepreneurs, and investors converge to innovate,
connect, and solve problems. The Department envisions a network of
several centers around the country, solving the most impactful,
relevant, and universal R&D challenges in the industry. Their work--
fueled by industry support--will generate new devices, processes,
tools, and materials for our manufacturing ecosystem. Most importantly,
the NSTC will ensure that the United States leads the way in the next
generation of semiconductor technologies--everything from quantum
computing, materials science, and Artificial Intelligence (AI) to
future applications not even contemplated yet.
Recently, the Department announced leaders to serve on a selection
committee that, acting independently of the Department, will select the
board of trustees that will form a non-profit, which the Department
anticipates will serve as the operator for the NSTC. I am pleased to
inform the Committee that, together with our partners at DoD, the
Department of Energy, and the National Science Foundation, the
Department of Commerce is in the process of establishing the NSTC
consortium. The Department anticipates that the NSTC consortium will be
operated by the new, purpose-built, non-profit entity.
In addition to the NSTC, the Department received funding for three
programs that are also focused on research and development--the
National Advanced Packaging Manufacturing Program, the CHIPS R&D
Metrology Program, and the Manufacturing USA institute(s). We
anticipate that the four R&D programs will share infrastructure,
participants, and projects and operate in coordination with each other.
The CHIPS R&D programs will be informed by the needs of the entire
American semiconductor ecosystem including the recipients of CHIPS
manufacturing incentives. In turn, the technological and workforce
advancements made by CHIPS R&D programs will benefit the U.S.
semiconductor sector and supply chain--and help incentivize recipients
and others to overcome manufacturing hurdles, compete in global
markets, and meet the goals of the CHIPS and Science Act. We will
continue to work with partners across the interagency including the
National Science Foundation, which oversees $200 million for CHIPS
workforce, the DoD, Department of Energy, and others to achieve these
goals.
Instead of aiming for self-sufficiency or looking to close the
United States off from global markets or competition, the Department is
working to strengthen our position as a global leader in a fiercely
competitive and global industry. As CHIPS for America invests across
the supply chain, the Department is prioritizing robust international
engagement. Through bilateral and multilateral dialogues, and business-
to-business and government-to-business forums, the Department is
working with like-minded partners to strengthen and diversify the
global semiconductor supply chain. The Department's CHIPS-related
international engagement to date has included engagements with the
Republic of Korea, Japan, India, and the United Kingdom, and through
the Indo-Pacific Economic Framework (IPEF), the U.S.-European Union
Trade and Technology Council (TTC), and North American Leaders' Summit
(NALS). The Department will continue coordinating closely with U.S.
partners and allies to advance these shared goals, advance our
collective security, and strengthen global supply chains.
We also welcome the work of the Department of State in implementing
the International Technology Security and Innovation Fund (``ITSI
Fund''), which was created under the CHIPS and Science Act and provides
the Department of State with $500 million overall--to deepen U.S.
cooperation with like-minded countries, on both semiconductor and
secure Information and Communications Technology lines of effort, to
ensure that the technologies of the future will reinforce our shared
economic and national security. The Department applauds the State
Department's announcement in June that it is directing funds from the
ITSI Fund to support projects this year and next year at the
Organisation for Economic Co-operation and Development (OECD) to create
an information exchange network of officials involved in semiconductor
industry policymaking, a government-to-government repository of
information on active and planned semiconductor production facilities,
and other efforts to work collaboratively to develop strategies that
increase the resilience of global semiconductor supply chains.
Regional Technology and Innovation Hubs (Tech Hubs) Implementation
In addition to revitalizing America's domestic semiconductor
manufacturing sector and research and development ecosystem, the CHIPS
and Science Act enabled the development of centers of innovation and
job creation through the Regional Technology and Innovation Hub Program
(Tech Hubs), administered by the Economic Development Administration
(EDA). The Tech Hubs program aims to strengthen economic and national
security by enabling the industries of the future to start, grow, and
remain in regions throughout the United States. In these Hubs,
institutions of higher education, state and local governments, economic
development organizations, labor and workforce partners, and others in
the region will come together to supercharge ecosystems of innovation
for technologies that are essential to our economic and national
security.
In May, the Department launched the first Notice of Funding
Opportunity (NOFO) to open applications for strategy development
funding and Tech Hubs Designations. Later this year, the Department
will launch a second NOFO for applicants designated as a Tech Hub to
apply for implementation funding. Through these two phases, EDA will
award $500 million appropriated through the Consolidated Appropriations
Act, 2023. Successful proposals will demonstrate a region's commitment
to its primary technological strength and the potential for Tech Hubs
investments to enable the region's primary innovative industry to
become a global leader in that critical technology area within a
decade. EDA received 378 applications in response to the first NOFO by
the August 15 deadline. Each applicant selected their region's core
technology industry that fits among 10 Key Focus Areas (e.g., AI, high-
performance computing, quantum information science and technology,
robotics, etc.) identified in the CHIPS and Science Act.
Through the Tech Hubs program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to manufacture, commercialize, and deploy these
technologies, guided by the following priorities: 1) making more U.S.
regions strong competitors in the global innovation economy; 2)
building strong communities that share in the prosperity technological
innovations bring; 3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and 4) strengthening and
making more resilient the supply chains that our innovative technology-
centric industries rely on to stay secure and competitive.
Distressed Area Recompete Pilot Program (Recompete) Implementation
As part of the Department's commitment to creating good-paying jobs
and ensuring that no community is left behind, another key element of
the CHIPS and Science Act is the Distressed Area Recompete Pilot
Program (Recompete). In June of this year, Commerce announced that
Recompete will invest $200 million in projects that spur economic
activity in geographically diverse and persistently distressed
communities across the country. Specifically, this program targets
areas where prime-age (25-54 years) employment significantly trails the
national average. The program aims to close this gap through EDA's
place-based approach and delivering large, highly flexible grants based
on community-driven strategies to address unique workforce and economic
development needs of individual communities or regions.
The Department is running Recompete through two phases. As part of
our June announcement, the Department launched the first phase, a
Notice of Funding Opportunity (NOFO), which invites applicants to apply
for (1) Strategy Development Grants, (2) approval of a Recompete Plan,
or (3) both. In Phase 2, regions with approved Recompete Plans will be
invited to apply for implementation funding. EDA anticipates making 4-8
implementation awards between $20 million and $50 million, each.
Eligible applicants include local and state governments, Tribal
governments, political subdivisions of a State or other entity, non-
profits, Economic Development Districts, and coalitions of any of these
entities that serve or are contained within an eligible geographic
area. To support applicants in determining if they are in an Eligible
Area, EDA, in partnership with Argonne National Laboratory, has
released the Recompete Eligibility Mapping Tool. Announcement of Phase
1 winners and the release of the Phase 2 NOFO is expected later this
year, and applicants with approved Recompete Plans will be invited to
submit a Phase 2 application. Working with our state and local
partners, Recompete will target areas of our country most in need of
economic resources, assets, and options to ensure that they get the
investments they deserve.
NIST for the Future Implementation
The Department appreciates the reauthorization of NIST through the
inclusion of Title II of Division B, commonly known as the ``NIST for
the Future Act'', in the CHIPS and Science Act of 2022. NIST is
essential in the development, manufacture, and adoption of technologies
critical today and those yet to be imagined, enabling both economic and
national security for the Nation. NIST's mission focuses on driving
U.S. innovation and supporting U.S. businesses and U.S. economic
security in Critical and Emerging Technologies (CETs), including
artificial intelligence, quantum information technologies,
biotechnology, communication, and networking technologies. In addition
to NIST's ongoing research role with CETs, NIST is leading the
execution of the U.S. Government's National Standards Strategy for
Critical and Emerging Technology and the development of Federal
standards policy to ensure continued U.S. global economic
competitiveness and technology leadership. I would also like to
highlight that NIST's laboratory and extramural programs, such as the
Manufacturing Extension Partnership (MEP) and Manufacturing USA, help
U.S. industry develop and implement new technologies, develop robust
supply chains, refine their systems for efficiency and effectiveness,
and increase engagement of underserved communities in workforce
development programs.
The CHIPS and Science Act authorized a pilot program of awards that
will allow MEP centers to provide services focused on resiliency of
domestic supply chains, workforce development, and adoption of advanced
technology upgrades at small and medium-sized manufacturers. In June,
we awarded roughly $400,000 to MEP Centers in every state and Puerto
Rico. The more than $20 million in funding is being used to develop
programs to make domestic supply chains more resilient and efficient.
The new awards will focus on providing supplier scouting services,
establishing new service offerings to improve existing supply chain
networks, filling gaps in the supply chain by connecting original
equipment manufacturers with small and medium-sized manufacturers, and
creating a complete map of U.S. supplier capability and capacity.
Manufacturing USA will announce a funding opportunity in the fall
for a new Commerce-sponsored Manufacturing USA institute. Manufacturing
USA was appropriated $14 million in one-time supplemental funds in
support of CHIPS and Science Act responsibilities. The Workforce,
Education and Vibrant Ecosystems (WEAVE) funding opportunity was
announced in August and will be open to existing Manufacturing USA
institutes. These will be public service awards to engage with HBCUs
and minority-serving Institutions and to assist in transitioning
Institute-developed technologies into the public, such as through
testbeds and other types of technologies that can address scale up.
NOAA Ocean Acidification Activities
The CHIPS and Science Act strengthens the National Oceanic and
Atmospheric Administration's (NOAA) mission of science, service, and
stewardship. NOAA is building a climate resilient nation by expanding
NOAA's authoritative climate products and services in coordination with
its Federal partners; fostering environmental stewardship and
optimizing advances in science and technology to create value-added,
data-driven economic development; and improving capabilities and
knowledge sharing, expanding opportunities, and honing service
delivery.
Reauthorized and expanded by the CHIPS and Science Act, NOAA's
Ocean Acidification Program coordinates research, monitoring, and
activities to understand where and how fast the ocean's chemistry is
changing, as well as the impacts these changes have on marine life,
people, and economies. NOAA is working with other agencies and partners
on these efforts, including in the stewardship of data necessary to
make decisions to mitigate and adapt to the impacts of ocean
acidification.
Public Wireless Supply Chain Innovation Fund Implementation
The CHIPS and Science Act also funded the Public Wireless Supply
Chain Innovation Fund. The $1.5 billion Innovation Fund supports the
development of open and interoperable wireless networks. This grant
program will help drive wireless innovation, foster competition, and
strengthen supply chain resilience. It will also help unlock
opportunities for innovation and competition in a market historically
dominated by a few suppliers, including high-risk suppliers that raise
security concerns.
In April, the Department announced its first funding opportunity
under the Innovation Fund, making $140.5 million available to
demonstrate the viability of new approaches to wireless, such as open
radio access networks (Open RAN). The Department received more than 120
applications for the first round of funding. And in early August, the
Department announced nearly $5.5 million in awards from the first round
of grants, which will support R&D and testing activities related to
energy efficiency, the performance of interoperable equipment, and
spectrum sharing testing. These are just the first steps the Department
will take to promote the development and adoption of open,
interoperable, and standards-based networks, and the Department will
continue to make awards under the first funding opportunity through the
fall.
A Strong Position to Lead Globally
The CHIPS and Science Act is central to the Biden Administration's
efforts to revitalize American manufacturing and innovation and to lead
globally. To effectively lead globally, the United States needs bold
domestic investments and innovation ecosystems that bring manufacturing
in critical technologies and industries back home. Moreover, without
manufacturing strength in the United States and the innovation that
flows from it, we risk again experiencing the devastating impact of
supply chain shortages that we did during the height of the COVID-19
pandemic.
Over one year removed from the enactment of the CHIPS and Science
Act, the Commerce Department's bold, strategic, and targeted
investments are bolstering our economic and national security, making
our semiconductor supply chain more resilient, promoting American
manufacturing and innovation, and helping more workers and businesses
compete and win in the 21st century global economy. The investments in
critical technologies and regions unleashed by this law are essential
to maintaining American technological leadership in the world in the
21st century global economy.
This testimony captures only some of the Department's activities to
date under the CHIPS and Science Act. While the Department has made
significant progress in implementation, more work remains to realize
the promise of this historic law, and Congress is an important partner
in these efforts. Thank you for the opportunity to testify, and I
welcome your questions.
The Chair. Thank you.
Director Panchanathan, thank you for being here.
STATEMENT OF DR. SETHURAMAN PANCHANATHAN, DIRECTOR, NATIONAL
SCIENCE FOUNDATION
Dr. Panchanathan. Thank you so much. Thanks Chair Cantwell,
Ranking Member Cruz, and Members of the Commerce Committee. It
is great to be with all of you today, particularly with a
colleague and a friend, Secretary Raimondo.
Before I begin, I would like to extend my deepest
condolences to all of you for the loss of your colleague,
Senator Diane Feinstein. Not only was Senator Feinstein an
incredible leader and trailblazer, she was also a champion for
science, and NSF is grateful for her service to the Nation.
Thank you for the opportunity to discuss the National
Science Foundation's implementation of the CHIPS and Science
Act, and how the agency is building upon decades of successful
investments in science, engineering, and technology to ensure
that the United States remains the global leader in innovation.
For more than seven decades, NSF has been critical to
powering our economy, transforming our quality of life, and
securing our national defense, and yes, the Nobel Prizes
yesterday, and today, and more to come. Many of the
technological advances benefiting the Nation today, such as
artificial intelligence, quantum information science, and
biotechnology, are rooted in sustained NSF investments over
many decades.
However, we currently face intense global competition in
the race to develop these technologies and to train the
workforce of the future. NSF's ability to enable scientific
breakthroughs and accelerate technological developments is
central to our economic and national security and our continued
global leadership.
With the passage of the CHIPS and Science Act of 2022,
Congress put in place a roadmap for meeting this challenge
while spurring innovation in communities across our country.
Over the past year and with the increased appropriations in
Fiscal Year 2023, NSF has been able to make significant
progress in implementing the CHIPS and Science Act. The agency
has moved quickly to launch new opportunities for innovation,
implement research security measures for safeguarding
taxpayers' investments, and engage talent to inspire the STEM
leaders of tomorrow.
The NSF Regional Innovation Engines will catalyze new
businesses and economic growth in diverse regions of America.
When the NSF Engines' Program released its first funding
opportunity last year, we received nearly 700 concept papers
from every state and U.S. territory of our Nation.
In May, NSF announced the first-ever NSF Engine Development
Awards, consisting of 44 unique teams spanning 46 states and
U.S. territories. Then, in August, NSF announced 16 finalists
for the first full-scale NSF Engines. Through these two tracks,
NSF plans to have invested nearly $200 million in regional
innovation throughout our country by the end of this calendar
year.
I cannot understate how critical it is that we engage every
part of our Nation in these efforts. NSF has been intentional
in implementing new opportunities and expanding existing
initiatives to engage everyone who wants to participate in
STEM, in every state, across every geographic boundary, drawing
the full diversity of our Nation. The CHIPS and Science Act
included a requirement that NSF grow its investment in EPSCoR
jurisdictions over time.
I am very pleased to report that NSF has met and even
exceeded the EPSCoR targets in the CHIPS and Science Act of
Fiscal Year 2023.
It is also critical that we safeguard these investments and
take steps to address research security while also cultivating
vibrant international partnerships. NSF plays a leading role in
Federal efforts to address research security, and we are
expanding the agency's capabilities and competencies to protect
taxpayer investments.
The CHIPS and Science Act includes valuable provisions that
will help NSF build the capacity of the research community to
make risk-informed decisions and strengthen the security of our
national research enterprise.
Equally important to the Nation's competitiveness, is NSF's
commitment to funding exploratory-based research that creates
new knowledge, and seeds the industries of tomorrow.
For example, many of the AI advancements making news today,
we celebrate them, both the innovative products and the talent
that is developing them were catalyzed by NSF's continued
investments over many decades, even through AI winters.
Likewise, the technological advancements of tomorrow will
be borne out of today's investments. In just the past 3 years,
NSF has established 25 National AI Research Institutes in
partnership with Federal agencies and industry. The half-a-
billion-dollar investment reaches almost into every state,
supporting cutting-edge research that is applying AI to key
economic sectors like agriculture, weather, and public health.
NSF's ability to generate more breakthroughs and foster
more innovations, and to do so faster than ever before, is
critical to keeping our country as a global leader in STEM.
With the support of this Committee, and Congress, and through
continued successful implementation of the CHIPS and Science
Act, NSF is strengthening our national and economic security
and enabling, to quote again Chair Cantwell, ``Innovation
anywhere and opportunities everywhere across our nation''.
Thank you for the opportunity to testify before you today.
[The prepared statement of Dr. Panchanathan follows:]
Prepared Statement of Dr. Sethuraman Panchanathan, Director,
National Science Foundation
Introduction
Chair Cantwell, Ranking Member Cruz, and Members of the Committee,
it is a privilege to appear before you today to discuss the National
Science Foundation's implementation of the CHIPS and Science Act of
2022, and how the agency is building upon decades of successful
investments in science, engineering, and technology to ensure that the
United States remains the global leader in innovation into the future.
Established by the National Science Foundation Act of 1950 (P.L.
81-507), the National Science Foundation (NSF) is an independent
Federal agency charged with the mission ``to promote the progress of
science; to advance the national health, prosperity, and welfare; to
secure the national defense; and for other purposes.'' NSF is unique in
carrying out its mission by supporting research across all fields of
science, technology, engineering, and mathematics (STEM), and at all
levels and settings of STEM education. NSF investments contribute
significantly to the economic and national security interests of the
Nation, and the development of a future-focused science and engineering
workforce that draws on the talents of all Americans.
For more than seven decades, NSF has been a critical component in
powering the United States economy, transforming American lives, and
securing the national defense. Many of the technological advances from
which the Nation is benefiting from today, such as Artificial
Intelligence (AI), Quantum Information Science, and Biotechnology, are
rooted in sustained NSF investments. However, we currently face intense
global competition in the race to develop the next breakthroughs in
these key technology areas and to grow the workforce needed to unlock
these innovations. Our success in enabling scientific breakthroughs and
accelerating these and other technological developments is central to
our economic and national security and our continued global leadership.
With the passage of the CHIPS and Science Act of 2022, Congress put
in place a roadmap for meeting this challenge while also spurring
innovation in all communities throughout the country. The law codifies
NSF's new Directorate for Technology, Innovation, and Partnerships
(TIP), and positions the agency to capitalize on the uniquely American
research and innovation ecosystem that includes academia, private
industry, the government, civil society, and other partners to shape
future research directions and quickly translate research outputs into
impacts that benefit the Nation. The law also reaffirms our commitment
to exploratory-based, discovery-driven research that is foundational to
advancing progress. NSF is unique in how the agency invests in research
across every STEM discipline, and the CHIPS and Science Act challenges
us to invest even more intentionally across all geographic boundaries
and socioeconomic groups. Through such investments, NSF plays a major
role in inspiring and training the next-generation STEM workforce--
through K-12 informal STEM education, technical training, support for
master's and Ph.D. students, and adult and continuing education,
including experiential learning, enabling reskilling and upskilling of
the current workforce. NSF's role in workforce training has become
increasingly important with the significant investments in
semiconductor manufacturing, which will require strong partnerships
between the Federal government, academia, and private industry to train
the needed workforce. The CHIPS and Science Act provided $200 million
for the CHIPS for America Workforce and Education Fund, and NSF is
using the $50 million provided over Fiscal Years 2023 and 2024 to
leverage additional resources, including more than $145 million in
partnerships with the private sector, to address the needs of the
semiconductor industry.
Over the past year, with the increased funding the agency received
in the FY 2023 Omnibus Appropriations Act, NSF has been able to make
significant progress in implementing the CHIPS and Science Act. The
agency has moved quickly to expand the TIP Directorate by launching new
opportunities for innovation while engaging industry, academia,
philanthropies, and others to ensure the broadest possible impact of
these critical investments. The agency has also moved swiftly to
implement research security measures to safeguard taxpayer investments
and has conducted outreach, education, and training throughout the
research enterprise while strengthening agency oversight measures. In
addition, NSF continues to prioritize engaging talent and inspiring the
STEM leaders of the future throughout the Nation--from all geographic
and demographic backgrounds--to ensure we are training the domestic
workforce needed for our future competitiveness.
Ensuring U.S. Leadership in Innovation
With the support of the Administration and Congress, NSF launched
its first new directorate in more than thirty years. The new
Directorate for Technology, Innovation, and Partnerships (TIP), which
was codified in the CHIPS and Science Act, sits at the crossroads of
exploratory, curiosity-driven research, use-inspired, solutions-
oriented research, and translational research across all disciplines of
science and engineering. The TIP Directorate, in close collaboration
with all of NSF's directorates and offices, is focused on advancing the
key technology areas and addressing the national, societal, and
geostrategic challenges identified in Section 10387 of the CHIPS and
Science Act. TIP is fostering new innovation ecosystems throughout the
Nation, transforming regions into national and global anchors in key
technologies; accelerating the translation of research results from the
lab to the market and society; and cultivating new education pathways
for a diverse and skilled future technical workforce comprising
researchers, practitioners, technicians, entrepreneurs, and educators.
Further, TIP opens new possibilities for research, innovation, and
education by catalyzing strategic partnerships linking academia;
industry, startups and small businesses; federal, state, local, and
tribal governments; nonprofits and philanthropic organizations; civil
society; and communities of practice to cultivate 21st-century
innovation ecosystems that give rise to future, high-wage, good-quality
jobs and enhance the Nation's long-term competitiveness. Over the past
year we have seen immense interest from a wide range of institutions,
industries, and state and local governments in the new opportunities
NSF has unveiled through TIP. For example, nearly 700 teams from every
state and U.S. territory responded to the NSF Regional Innovation
Engines call for concept papers.
Since the enactment of the CHIPS and Science Act just over a year
ago, NSF has moved expeditiously to realize the law's vision for TIP.
In that time, NSF has made more than 760 new awards and partnered with
10 different Federal agencies and more than 10 industry groups or
nonprofits through the TIP Directorate. These efforts span a wide range
of activities, ranging from regional innovation to supporting the next
generation of entrepreneurs.
As authorized by the CHIPS and Science Act, the NSF Regional
Innovation Engines (NSF Engines) program is a major new undertaking
that will catalyze new businesses and economic growth in diverse
regions of America that have not fully participated in the technology
boom of the past several decades. Understanding that not all
communities and proposed collaborations will be immediately ready to
launch full-scale NSF Engines, the program comprises two tracks: Type-1
NSF Engines Developmental Awards and Type-2 NSF Engines. The Type-1
awards invest up to $1 million to help organizations create connections
and develop their local innovation ecosystems over a two-year period to
prepare strong proposals for becoming future NSF Engines. The Type-2
NSF Engines could receive up to $160 million over 10 years. When
successful, an NSF Engine will lead to its region becoming a nationally
and potentially globally renowned, self-sustaining, technology and
innovation-driven hub of economic activity for the topic in which it
specializes. Each NSF Engine's status and overall progress will be
assessed annually, with metrics and milestones that will determine
whether NSF will continue to support the NSF Engine year over year.
Through these two tracks, NSF is seeding the future for communities to
grow their regional economies by fostering partnerships that will
unleash ideas, talent, pathways, and resources to create vibrant
innovation ecosystems across the United States.
When the NSF Engines program released its first funding
opportunity, NSF received nearly 700 concept papers from every state
and U.S. territory. In May of this year, NSF announced the first-ever
Type-1 NSF Engines Developmental Awards consisting of 44 unique teams
spanning 46 states and U.S. territories. Then, in August, NSF announced
16 finalists for the first full-scale Type-2 NSF Engines. NSF
anticipates announcing the NSF Engines awards this winter, with each
awardee initially receiving approximately $15 million for the first two
years. Through these two tracks, NSF will have invested nearly $200
million in regional innovation throughout the country by the end of
this calendar year.
While NSF is excited by the broad geographic distribution and
extensive engagement across academia, industry, and other sectors, we
also know that more must be done to fully engage the talent that exists
throughout the Nation. That is why NSF launched the Enabling
Partnerships to Increase Innovation Capacity (EPIIC) program. EPIIC
will build capacity among minority-serving institutions, two-year
institutions, undergraduate institutions, and other emerging research
institutions in regional innovation ecosystems, with the hope that they
will go on to participate in an NSF Engine or similar regional
innovation activity. NSF recently announced its first-ever EPIIC
investment of $19.6 million to 49 institutions (via 47 awards) at U.S.
institutions of higher education (IHEs), including teams from
historically Black colleges and universities (HBCUs), Tribal colleges
and universities (TCUs), and minority-serving institutions, including
Hispanic-serving institutions (HSIs), and community colleges.
Importantly, in this inaugural cohort of NSF Engine Development Awards,
NSF Engines finalists, and EPIIC awards, NSF is touching 48 states plus
multiple U.S. territories.
NSF and the Department of Commerce are collaborating closely
together on regional innovation efforts. NSF and the Economic
Development Administration (EDA) share a mutual commitment to regional
innovation and economic development in communities across the Nation.
The CHIPS and Science Act authorizes both agencies to implement
programs to enable regional technology development and economic and job
growth through the NSF Engines and the EDA Regional Technology and
Innovation Hubs programs. In July, NSF and EDA signed a memorandum of
understanding to officially enable cross-agency coordination on these
critical programs to ensure they contribute to regional economic growth
and U.S. competitiveness in key technology areas.
In addition to incubating regional innovation, NSF has also
prioritized investing in the workforce the Nation needs to be
successful today and into the future. NSF invests in the entire
spectrum of STEM education and training, from K-12 students and
teachers; to technical and vocational training; to undergraduate,
graduate, and postgraduate researchers across all fields of science,
engineering, and technology. For example, NSF's Experiential Learning
in Emerging and Novel Technologies (ExLENT) program will support
inclusive experiential learning opportunities designed to provide
cohorts of diverse learners with the crucial skills and support
services needed to succeed in the key technology focus areas and
prepare them to enter the workforce ready to solve the Nation's most
pressing societal,, national, and geostrategic challenges. NSF just
recently announced the first-ever ExLENT awards to 27 teams at U.S.
institutions of higher education and nonprofits, including teams led by
historically Black colleges and universities and minority-serving
institutions, representing a total investment of $18.8 million.
Equally important to the Nation's competitiveness is NSF's
commitment to funding exploratory-based research that creates new
knowledge and seeds the industries of tomorrow. For example, many of
the AI advancements making news today--both the innovative products and
the talent that is developing them--are made possible by NSF's long
history of investments dating back decades. From reinforcement
learning, which supports more effective chatbots, inventory managers,
and self-adjusting thermostats, to the deep learning techniques that
have led to generative AI, NSF's investments built the foundation for
the AI tools and applications of today. This technical foundation has
also been critical for our defense and intelligence communities,
translating into capabilities that underpin national security. Over the
past three years, NSF has established 25 National AI Research
Institutes, or AI Institutes, in partnership with other federal
agencies and industry. This $500 million investment touches almost
every state, supporting cutting-edge research that is applying AI to
key economic sectors like agriculture, weather, and public health.
Another example of NSF's commitment to investing in foundational
breakthroughs is the recent announcement of a $162 million investment
in nine new Materials Research Science and Engineering Centers (MRSECs)
that will each receive $18 million over six years. The centers aim to
transform fundamental scientific breakthroughs into tangible benefits
for multiple sectors of the U.S. economy and innovations that can be
produced on tomorrow's factory floors--from being tough enough to
withstand the heat of a fusion reactor to processing information at the
quantum level. Since the 1970s, NSF's MRSECs have yielded countless
breakthroughs, from shape-morphing materials to plastics that conduct
electricity. NSF now supports 20 MRSECs and these most recent
investments expand the centers' portfolios to pursue a broad range of
research projects to unlock new capabilities in several areas:
semiconductors, artificial intelligence, biotechnology, sustainable
energy sources and storage, advanced manufacturing, quantum computing
and sensing, and other areas critical for U.S. leadership in materials
research.
Early last month, NSF announced four new Science and Technology
Centers (STCs) that will enable advances in fields ranging from cell
biology and complex materials to new applications of sound waves and
environmental change. Since it was established in 1987, the STC program
has supported exceptionally innovative, complex research and education
projects that have opened new areas of science and engineering and
developed breakthrough technologies. STCs conduct world-class research
through partnerships among institutions of higher education, national
laboratories, industrial organizations and other public or private
entities, and via international collaborations. They provide a means to
undertake groundbreaking investigations across disciplines and highly
innovative approaches within disciplines. They also play a fundamental
role in engaging, recruiting, retaining, and mentoring the next
generation of scientists and engineers from groups underrepresented in
STEM.
The CHIPS and Science Act reiterated the importance of NSF's
mission to invest in exploratory, curiosity-driven research. NSF will
continue to make significant investments in center-scale research such
as the MRSECs and STCs, as well as in the individuals all across the
Nation to ensure we are exploring the frontiers of science and
engineering and leading the world in innovation.
Safeguarding Taxpayer Investments
The future of U.S. competitiveness requires that we safeguard these
critical investments and take steps to address research security while
also cultivating vibrant international partnerships that are critical
to success. NSF plays a leading role in Federal efforts to address
research security and is expanding capabilities and competencies to
protect the U.S. science and engineering enterprise. In January 2022,
the National Science and Technology Council's Research Security
Subcommittee, which is co-chaired by NSF, issued implementation
guidance for National Security Presidential Memorandum 33 (NSPM-33) on
National Security Strategy for United States Government-Supported
Research and Development. In addition, the CHIPS and Science Act
contains several research security provisions that NSF is in the
process of implementing. NSF has engaged in robust discussions with the
U.S. research community and with like-minded international colleagues
through groups like the G7 and bilaterally to develop common frameworks
for understanding and addressing research security.
NSF has prohibited our staff from participating in any foreign
talent recruitment programs and updated and clarified our guidelines
and requirements for institutions and individuals requesting funding
from NSF so that senior/key persons identified on proposals cannot
participate in malign foreign talent recruitment programs. NSF has also
established new analytic capabilities to proactively identify conflicts
of commitment, vulnerabilities of pre-publication research, and risks
to the merit review system. NSF will scale up the use of these
analytics to analyze all NSF awards and contribute to NSF's Small
Business Innovation Research (SBIR) due diligence process in FY 2024.
As required by the CHIPS and Science Act, NSF is in the process of
establishing a Research Security and Integrity Information Sharing and
Analysis Organization (RSI-ISAO), called SECURE, to provide needed
information and tools to the research community. Full proposals for
SECURE are due at the end of October. NSF is confident that we will be
able to establish an innovative entity that will build the capacity of
the research community to make risk-informed decisions and create a
trusted partnership between research-awarding agencies and the research
communities, which strengthens the security of our national research
enterprise.
NSF is also leading efforts through a partnership with the Federal
government interagency community to develop research security training
modules for the research community. These modules will be available in
the coming months, and NSF plans to fund the delivery of these modules
and their evaluation to help researchers understand and avoid research
security risks. In addition, NSF has also put in place research
security training for all of our staff, which is required to be
completed on an annual basis.
NSF is developing the system for reporting by institutions of
higher education of foreign financial transactions with countries of
concern above $50,000 as mandated in CHIPS and Science and will be
coordinating closely with our Office of Inspector General on these
reports. NSF will do appropriate due diligence to assess these reports.
NSF takes very seriously the need to safeguard the investments the
agency makes on behalf of the American taxpayer while also contributing
to a vibrant global research community based on shared values with
like-minded partners. We will continue to partner with other agencies,
the intelligence and law enforcement communities, and the research
community to take all necessary steps to do so.
CHIPS for America Workforce and Education Fund
The CHIPS and Science Act included $200 million for the CHIPS for
America Workforce and Education Fund. NSF is investing those resources
in an effort to train upwards of 100,000 new semiconductor researchers,
practitioners, technicians, and educators over the next five years,
fulfilling a key need of the semiconductor industry and further
building a skilled U.S. semiconductor workforce. The CHIPS and Science
Act provided $25 million in each of FY 2023 and 2024, and $50 million
in each of FY 2025, 2026, and 2027.
NSF has focused the FY 2023 funding to leverage existing
investments to address the immediate needs of the semiconductor
industry. For example, $10 million was provided to the TIP Directorate
to fund scalable partnerships with the private sector, including Intel,
Micron, Ericsson, IBM, and Samsung to enhance research traineeships and
skilled semiconductor manufacturing workforce programs. This NSF
investment will be matched by the companies. For example, in the case
of Intel, the investment is part of an already-announced 10-year NSF-
Intel partnership to invest $100 million to address semiconductor
design and manufacturing research and workforce development throughout
the country.
NSF also invested more than $6 million of the FY 2023 funds in the
new Future of Semiconductors (FuSe) program. The objective of this
investment is to cultivate a broad coalition of researchers from across
science and engineering communities to utilize a holistic, co-design
approach to fundamental research and education and training, to enable
rapid progress in new semiconductor technologies. Last month, NSF
announced 24 research and education projects with a total investment of
$45.6 million through a public-private partnership spanning NSF and
four of the companies named above: Ericsson, IBM, Intel, and Samsung.
These awards support novel, transdisciplinary research that will enable
breakthroughs in semiconductors and microelectronics and address the
national need for a reliable, secure supply of innovative semiconductor
technologies, systems, and professionals.
In FY 2024, NSF will focus on supporting a national-level
clearinghouse that brings together academia, industry, and government
to grow capacity and reduce barriers to grow a diverse workforce
capable of ensuring U.S. competitiveness across all facets of
microelectronics. Such a microelectronics workforce development
clearinghouse will offer a proving ground for reliable, practicable,
evidence-based, industry-aware curricula leading to new educational
programs spanning secondary schools, two-year community and technical
colleges, and minority-serving institutions across all 50 states, the
District of Columbia, and U.S. territories. In doing so, NSF will
enhance industry and career awareness among a diverse array of
potential entrants to the industry, develop professional and technical
skills, and provide work-based, experiential learning opportunities
(e.g., internships, apprenticeships) that inspire prospective students
to enroll in industry-related programs at community colleges and four-
year universities. This approach has been recommended by coalitions of
academia and industry as they have imagined how best to address the
needs of the future semiconductor workforce.
Put simply, this clearinghouse will foster high-quality and
affordable training pathways aligned with the Administration's
workforce approach, benefiting workers as much as they benefit
employers, by setting workers on pathways to success in higher-quality
careers in the long run.
As the Federal Government's leader in STEM education, with a strong
track record in fostering public and private partnerships, NSF is
uniquely positioned to design, implement, scale, and sustain this
clearinghouse. Moreover, success in the semiconductor and
microelectronics sector will provide an evidence base for extending
other key technology areas authorized in the CHIPS and Science Act. NSF
is committed to investing the $200 million provided for the CHIPS for
America Workforce and Education Fund and leveraging public-private
partnerships to have the most impactful outcomes for the Nation.
Innovation Anywhere, Opportunities Everywhere
NSF is fully committed to the development of a future-focused
science and engineering workforce that draws on the talents of all
Americans, in every region of the country. The CHIPS and Science Act
authorizes NSF to support broadening participation at the individual,
institutional, and jurisdictional levels. At the individual level,
CHIPS and Science authorizes programs that empower individuals through
scholarships, fellows, traineeships, and project activities that enrich
STEM education at all levels. At the institutional level, awards to
minority-serving institutions, including community and technical
colleges, will lead to greater opportunities for all students and
faculty. Finally, at the jurisdictional level, NSF is working toward
more geographical diversity across the entire NSF portfolio, especially
to rural and urban institutions that serve diverse students.
An important component of these efforts is NSF's Established
Program to Stimulate Competitive Research (EPSCoR). EPSCoR enhances the
research competitiveness of targeted jurisdictions by strengthening
science, technology, engineering, and mathematics (STEM) capacity and
capability through a diverse portfolio of investments from talent
development to local infrastructure. The CHIPS and Science Act requires
NSF to increase the percentage of the agency's investments in EPSCoR
jurisdictions over a seven-year period, reaching 20 percent in FY 2029.
For FY 2023, the EPSCoR target was 15.5 percent. We are pleased to
report that NSF has met and slightly exceeded that target in FY 2023.
In addition, as required by the CHIPS and Science Act, NSF is
prioritizing activities that enable sustainable growth in the research
competitiveness of EPSCoR jurisdictions. For example, in May, NSF
released two new programs to further support EPSCoR jurisdictions in
building sustainable research capacity. The EPSCoR Research Incubators
for STEM Excellence (E-RISE) program supports incubation of research
teams and products in scientific topical areas linked to a
jurisdiction's scientific priorities. The EPSCoR Collaborations for
Optimizing Research Ecosystems (E-CORE) program provides funding to
support targeted research infrastructure cores that underlie the
jurisdiction's research ecosystem, including development, enhancement,
and/or sustainability of research facilities, higher education
pathways, workforce development, economic development, and use-inspired
research.
NSF recognizes that building sustained research capacity in all
states and territories is critical to our long-term competitiveness.
NSF's Growing Research Access for Nationally Transformative Equity and
Diversity (GRANTED) program will improve the Nation's research support
and service capacity at emerging and underserved research institutions.
Last week, NSF announced an investment of $9.2 million in funding for a
collaborative project between Emory University and the National
Organization of Research Development Professionals (NORDP), a
professional nonprofit association dedicated to advancing the research
capacity and impact of colleges and universities. Together they will
expand support to 16 minority-serving institutions by providing
extensive consulting time from experienced NORDP consultants over the
next two years and access to an array of tools and services to improve
research development. This investment will provide direct research
development services to participating institutions, including grant
writing assistance, team building, strategic research planning,
outreach activities, and student training. The program is specifically
designed to provide a significant investment to intentionally small
cohorts of institutions to ensure a lasting impact.
Conclusion
At a time of intense international competition, NSF's ability to
generate more breakthroughs and foster more innovations that strengthen
our economy and national security is critical to keeping the United
States a global leader in science, engineering, and technology. As NSF
continues to implement the CHIPS and Science Act, we are doing so with
a focus on expanding opportunities for all types of institutions, in
every geographic region, in every key technology area, and for everyone
who wants to engage in STEM -while through leveraging partnerships with
industry and philanthropies.
Thank you for the opportunity to testify before you today. With the
continued support of this Committee and Congress, and through
successful implementation of the CHIPS and Science Act, NSF stands
ready to strengthen our national and economic security and create
innovation anywhere and opportunities everywhere.
The Chair. Thank you, Director.
Colleagues, note that a vote has started. We are going to
have a couple of votes this afternoon, so I will just ask you
to use your discretion where you are in the queue to go back
and forth and try to maximize time.
I am going to turn it over to my colleague, Senator Schatz.
And go vote, and then come back. And he will chair the meeting
and go to Senator Cruz after that.
STATEMENT OF HON. BRIAN SCHATZ,
U.S. SENATOR FROM HAWAII
Senator Schatz. Thank you, Chair, Ranking Member.
Director Panchanathan, thank you for being here. I want to
follow up on a conversation we had earlier this year. I know
that you made $6.5 million available in Fiscal Year 2023 for
the continued development of the Thirty Meter Telescope. What
are your plans for continuing the funding and the work to
design TMT in fiscal 2024?
Dr. Panchanathan. Thank you very much, Senator Schatz, and
I really enjoyed talking to you and visiting the great State of
Hawaii recently. We launched the telescope, as you know, the
solar telescope in Maui, which is the world's largest solar
telescope, and I am very proud that we have it located in Maui,
we are doing great science.
To your specific question, I am happy to tell you, as you
said, just last week, NSF made a $6.5 million award to the
Giant Magellan Telescope, for GMT, and a $6.5 million award to
the Thirty Meter Telescope International Organization, (TMT),
to continue development and reduce risk on crucial optical and
mechanical components.
I want to tell you that there is a process that we take as
we embark on large awards, and this includes, not only the
Astro2020 Decadal Survey recommendations that came,
consultations with our scientific community, and advisory
committees, as well as our Mathematical Physical Sciences
Directorate, making sure that we are prioritizing these
investments, working with our National Science Board, and so
now we are investing in the design and development phase, and
that was this investment; so we have plans in terms of how do
we move from here to the final design review and then the
investment.
Senator Schatz. So that is 2023?
Dr. Panchanathan. Yes.
Senator Schatz. You are mostly talking about 2023. So what
are your plans for 2024?
Dr. Panchanathan. In 2024, we have budgeted again to
continue with this process, and we have asked for $30 million
of investment so that we will be able to move these projects
forward as these review processes happen. And at the same time,
I would like to place this in front of Congress. You know that
in the CHIPS and Science Act, the science provisions were
authorizations, not appropriations yet. We need that also in
place so that we might be in the vanguard of innovation and
scientific discovery, for which instrumentation like TMT and
GMT are very important as we think about the future.
Senator Schatz. Thank you. Now, talk to me about
construction funds for 2025. Obviously, you are talking about
design. Where are we on construction, and can we work together
on the Pathway? I understand there a lot of it is contingent.
You have Astro2020; you have the Scientific Review process.
Dr. Panchanathan. Yes.
Senator Schatz. We obviously don't have it squared away on
the Hawaii side of this, but we have to move in parallel paths
in case everything comes together. So where are you with 2025
and construction money for ELT?
Dr. Panchanathan. Again, thank you for that. And yes, you
are right. We are going through the process that we typically
go through in the Major Research Facilities Instrumentation. So
we are looking at the 2024, 2025, and beyond in terms of what
is the right positioning for the request to be made for the
construction project.
Right now, we have to go through the final design review.
And as you said, rightly, we are working with the State of
Hawaii to make sure that we are positioning the appropriate
investments in a way that they can, you know, be sequenced at
the right time. So it is our--we are still working through the
2025, and we will be working through 2026 budgets to think
through when the appropriate time is for putting in the
construction request.
But the final design review we have to also go through as
we are thinking about how we are moving forward in this
process. And we will be working closely with the National
Science Board on this.
And Senator, as we have always done, we will keep your
staff closely informed and closely engaged to ensure that you
are getting all the answers that you need.
Senator Schatz. Thank you very much.
Senator Cruz.
Senator Cruz. Thank you, Mr. Chair.
Secretary Raimondo, the National Environmental Policy Act,
or NEPA, the NEPA reviews are currently required for CHIPS
grants, and that could lengthen project timelines by two years
or more from the date the Department decides to start an
environmental impact statement. Some NEPA reports aren't
completed for 7 years or longer.
When you were asked about hurdles posed by NEPA to CHIPS
projects in a House hearing last month, you pointed out, quote,
``There is currently a bipartisan amendment to the Defense
Authorization Act which would help a lot. So we are going to do
everything we can with our team to help streamline NEPA and
move it as quickly as is prudent, but if Congress could pass
the amendment, I think it is the Cruz-Kelly Amendment in the
Authorization Act, it would help us a lot to move faster.''
As you know, that bipartisan amendment passed the Senate
with overwhelming bipartisan support, but it is not yet law. It
still has to pass the House, and ultimately be signed into law
by the President. Could you briefly describe the benefits the
amendment would provide as a word of encouragement to the House
and the White House to make it law?
Secretary Raimondo. Yes, thank you. And thank you for your
leadership on that, as you say, each of these projects, if they
receive Federal money, would be subject to NEPA, which could
take up to years. We do not have years. These are national
security imperative projects, which is why I, again, thank you
for your leadership. What we are doing, we have built a team on
the CHIPS Team in the Commerce Department just to focus on
permitting, to help companies, help states streamline the
process, accelerate the process within the existing statute.
Let me be clear; we don't want to--you know, environmental
concerns matter. We are not in any way suggesting that we
should do anything that hurts the environment or is
unsustainable. That being said, we do need to, which your
amendment would do, streamline the process, speed the process,
make the process more efficient and user-friendly.
Interestingly, earlier today, I was on the phone with
members of the House on this exact issue, encouraging them to
do their own--you know, take your lead and pass something in
the House. My view is it is essential. We are going to do
everything we can. We have a team, we are working on it, but
without the legislation, it is very difficult.
Senator Cruz. Well, that is very helpful. Thank you. Let me
turn to the topic of spectrum, something both you and I care a
lot about. We all know that the United States needs more
commercial access to mid-band spectrum. Recent studies project
that U.S. mobile traffic to increase more than two-and-a-half
times over the next 5 years, and almost sixfold in the next 10
years. We need a real mid-band spectrum pipeline so that the
U.S. can dominate in 5G and not fall behind our adversaries.
Unfortunately, access to mid-band spectrum has become
almost impossible to come by because so much of the Nation's
spectrum is under the control of Federal agencies who are
resistant to sharing. The Defense Department recently completed
its report on opening access to spectrum in the lower 3
gigahertz band and gave it to your Department at the end of
last week. The report has not been made public, but according
to leaks, the report does not support sharing, let alone
allowing full power 5G use of the band.
Secretary Raimondo, you and I had a very productive call
yesterday, and during that call, you committed to sharing the
report with me, briefing me on it. I appreciate that. Do you
agree that we need more mid-band spectrum to be made available
for 5G, including for full-power use, and that it is not only
imperative for our economy but also for our national security?
Secretary Raimondo. I do. Let me say this. As I said
yesterday, I think--I would be very happy to have my staff, the
NTIA, and the DoD, I think we should do it together, to come
and go through the report. So we will set that up.
Senator Cruz. I appreciate that.
Secretary Raimondo. And yes, I do. I spoke with Secretary
Austin last week, and I said the DoD needs the spectrum; they
need to execute their mission, period. Having said that, we
also need to be more creative and innovative about how we share
spectrum and how we use spectrum, because the truth of the
matter is our national defense depends on, as you say,
continued private sector innovation, and continued innovation
in 5G.
And my point to him, my point to you, and anyone who wants
to hear from me is that this shouldn't be a zero-sum game,
right. We shouldn't think every time the DoD shares or gives
something up, they are losing capacity. We have to find
creative ways where we can have more spectrum made available in
the mid-range band, as you say, and also, the DoD has what they
need to do their mission. I am committed to working with you
and with them to do that.
Senator Cruz. Thank you, Madam Secretary.
Director Panchanathan, during Fiscal Year 2021 and Fiscal
Year 2022, the NSF funded some 70 grants and two contracts
totaling over $45 million focused on both the quote/unquote
``Science of countering social media mis- and disinformation,
as well as the development of digital tools to track and censor
so-called mis- or disinformation.''
One of the projects was called ``Expert Voices Together'',
and it is, to quote the NSF, ``Creating a comprehensive system
of care that addresses the harms journalists experienced due to
online harassment.'' Its mission, incredibly enough, is to,
``Support journalists in moments of crisis while helping the
media industry build resilience long-term''; in other words,
taxpayer-funded therapy for left-wing journalists who find
actual facts traumatizing. I am sure people like Taylor Lorenz
will be excited about that.
But where on earth in the NSF's mandate is there a
justification for these sorts of projects? And do you believe
that venturing into such politicized topics undermines broader
support for the NSF?
Dr. Panchanathan. Senator, first of all, let me tell you
that the reach--I hope that through the hearing today, you will
get to see NSF's broad impact all across our Nation through
STEM talent development, through economic vibrancy that NSF
makes possible, and yes, national security objectives also
being fostered. I hope that the examples that I will give you
in the answer, I am not trying to package all of that, but I
hope that, you know, that will come through very clearly. We
are doing a lot of work about how to make sure the talent
everywhere and innovation everywhere is energized.
Senator Cruz. Could you answer the question, though, that I
asked.
Dr. Panchanathan. Yes, I am just going to come to that,
Senator. Because I just want to make sure that the NSF mission
is--you know, I just want to make sure that that is clearly
understood also. You know, I want to say one thing very
categorically: We do not--NSF does not engage in censorship, we
do not regulate any content, and engage with anybody who also
does so.
But what we do is, how do the technologies operate and how
are they being used? And provide the public and policymakers
the information that they need so that you can make the
informed decisions about needed regulations and guardrails. And
for the users, that they have the tool that they can safely
navigate content. That is what NSF is engaged in, that is the
kind of projects that we fund. We are not in the business of
censorship. We are not in the business of controlling content.
I can tell you, for example, even in this conversation that
we are having right now, in the deep-fake realm, this
conversation can be completely altered and presented in a form
that you and I will say: How did it even happen that this
conversation that we are having right now has been transformed
into something that is even unrecognizable? These kinds of
things that happen, we are trying to find how can we build, how
can we invest in those projects, and how can we invest in tools
and techniques that can help safeguard. And that is all we are
doing. We are not censoring. And I want to repeat that we are
not altering content.
Senator Cruz. When you are funding others who are engaged
in censorship, you are undermining support for your very
important agency.
Dr. Panchanathan. Senator, maybe I can close with this
comment. I am happy to work with any of you to go through this
with you in more of a one-on-one setting, and explain what
these projects are doing so it can be helpful. Happy to take
your suggestions, happy to take your inputs, NSF, I always say,
NSF is a learning agency. We learn constantly because we cannot
be an agency that says, this is how we do it. We are a learning
agency. So happy to take the input and see where, if any, you
find that there is, you know, NSF appearing to be, as I have
said, we are not, but I am happy to have the discussion with
you.
Senator Cruz. Thank you.
The Chair. Senator Tester.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Thank you, Madam Chair, and I appreciate
the flexibility. Gina and Panch, thank you both for being here.
I appreciate the work you have done, I appreciate everything
you are doing to bring jobs back to this country, and I
appreciate everything you are doing on the national security
front. Look, for decades we have outsourced jobs in this
country, and it hasn't been a good idea.
The Chinese Communist Party is our facing threat, and you
both know this, both economically, and militarily, and they
want to take our place on the world stage. But I have faith in
this country, and I have faith in our ability to be able to
emerge from a time when we have outsourced our jobs to time,
and we can bring the jobs back here again and create what we
need in this country to meet the needs of this country.
A little over 2 years ago, Congress started debating the
CHIPS and Science Act. I started talking to a group of
Montanans about building a technology hub in Montana using the
Regional Technology Innovation Hubs Initiative that this
committee created. The vision for this tech hub would be to
establish Montana's well-established photonics industry and
grow it into a world-class center that can out-compete everyone
in technology, and it is critical to our economic growth and
national security.
Madam Chair, I am blown away by the effort that Montanans
have put forth on this opportunity. Our best and our brightest
have worked together, universities, labor groups, financial
groups, state government, have all have worked to craft a Tech
Hub Plan that works for our state, but most importantly, works
for this country.
Like any state, funding for universities is not what it
should be. And so these universities are used to fighting and
beating the hell out of one another to get the money they
needed, and the truth is, is we have watched them work
together.
I come from a state that was built over a hundred years ago
by people who moved in where there was no grass, and built
farms, where there was just grass, and built communities, and
built churches, and built hospitals. And now, the people in
this state of Montana are working together to make sure that
Montana can reclaim what we need to have, from a technology
standpoint, to be the Nation's or the world's leader.
So my question is this, to both of you: When it comes to
rural America, Congress has addressed it in a certain--in
several different ways, but you both lead implementation of
programs at your respective agencies, how do you address the
issue of rural America and making sure that your initiatives
will work for rural America and do not leave them behind? I
don't care which one goes first. Go ahead.
Secretary Raimondo. Thank you. I will go first, and I will
be brief. We, as I said earlier, we have been overwhelmed by
the quality and quantity of the tech hub applications. As you
recall, it was authorized for $10 billion. We received $500
million, and we have over 400 applications. So if you come away
with nothing else, clearly this is worthy of more funding.
We will do a minimum of 20 Tech Hubs, possibly more, and I
promise you some will be rural. I cannot promise you it will be
Montana, but I promise you some will be rural.
Senator Tester. I was hoping for a different answer. But
keep going.
Secretary Raimondo. I know that. I know, but I am trying to
be honest here. I promise we will look at yours and all of
yours, and there will be rural representation. We are
determined to do it; the statute requires it. We are doing a
huge amount of outreach. I tell my team there is no substitute
for showing up. Show up in rural communities, let them know we
are there, and help them to put forward a good application. So
we are highly conscious of it, and we are doing a lot of
outreach.
Look, the only thing I would say is if we pick, say, 20,
hypothetically, 20, every one of those would be worthy of, say,
a $100 million grant to really move the needle and create a
hub, that is $2 billion. We have $500 million, and you have
authorized $10 billion (ph.). So I guarantee you we are focused
on rural. I guarantee you, you will be pleased with the
results, and I guarantee you this program is worthy of more
funding.
Senator Tester. Thank you. Panch?
Dr. Panchanathan. Thank you very much, Senator. It was
great meeting with you. And when I spoke to you, and I want to
reinforce that NSF's commitment of energizing talent and ideas
everywhere across our Nation is in full force and is actioned
everywhere now, even as we speak.
But let me address specific things related to your question
about two projects that even just got funded very recently, in
terms of unleashing innovation in the State of Montana. This is
to Montana State University in Bozeman; they are leading an NSF
Engines Development Award. These awards are meant to bring all
of the innovative capacity in every region to see how we can
lift them up through partnerships, as well as NSF seeding
investments. That then can then further be built with the
higher level of NSF Type 2 Awards. And partnering with Commerce
and EDA, we have signed an MOU of regional technology hubs, how
we can work together. We are like this, we are not like this
anymore.
[Interlocking fingers of both hands.]
Dr. Panchanathan. You know, Secretary Raimondo will agree
with, you know, the fact that because of her leadership and her
commitment to working in partnership, the two of us are working
closely together, our Departments are working closely together,
and we don't want anything to fall in between. So this project,
for example, is focused on advancing quantum and supporting
technologies in the northern intermountain States of Montana,
Wyoming, and Idaho.
There is another one, which is University of Montana in
Missoula, is leading the NSF Engines Development focused on
advancing Precision Forestry, which is, you would agree, there
is much more in place innovation and range land technologies.
So these are just--the awards that were made just a few weeks
ago, so you can see that we are constantly exploring options,
working with the communities to see what we can do in terms of
talent development, as well as innovation, and energization.
Senator Tester. Thank you. Thank you, Madam Chair.
The Chair. Senator Wicker.
STATEMENT OF HON. ROGER WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. Thank you very much, Madam Chairman, and
thanks to our two witnesses. I bet neither one of you is
surprised that we have had questions already about rural
America. And so Dr. Panch, let me just ask you, since you were
specific to Montana, which is a state I really admire, could
you tell us the EPSCoR part of the legislation, how that is
already, perhaps, benefiting researchers in other rural states?
And that won't be the last----
Dr. Panchanathan. Thank you very much, Senator, for posing
that question. First of all, thank you for hosting me in the
great State of Mississippi.
Senator Wicker. Yes. Thank you. And I believe Mississippi
was the first state where we were able----
Dr. Panchanathan. That is the first state we had the NSF
Day Celebration, right?
Senator Wicker. Yes.
Dr. Panchanathan. So it was a great launch effort, and it
was wonderful to meet all the different institutions in the
State of Mississippi, community colleges, all the higher
education institutions coming together, and that we were able
to interact with the researchers and students.
Now, to the State of Mississippi, I saw firsthand, and this
confirmed my belief that talent and ideas are democratized, and
they are everywhere. Now, in the State of Mississippi, we have
now invested, and I am going to go through a few projects in
the State of Mississippi, again, very recent ones. Again, the
NSF Engines Development Award, the first of those to Jackson
State University, focused on advancing food security and
climate resilience.
Senator Wicker. We have a new Senator who is alum of
Jackson State.
Dr. Panchanathan. That is right. And then the next one is
to Mississippi State University in Starkville, where we were
together. This is advancing autonomous technologies for
advanced manufacturing. We talked about this when we were
together with the researchers there. In addition to that, we
have invested almost a million dollars in the Mississippi Gulf
Coast Community College on two projects, to broaden
participation in emerging technology programs, as well as
increasing the supply and diversity of the IT workforce in the
Mississippi Gulf Coast region.
These are real projects making a real difference in terms
of unearthing the talent and ideas in Mississippi and to the
EPSCoR targets that you and I had a discussion. If you recall,
in your office, we said--you asked me the question: Do you
think that you will meet those targets for Fiscal Year 2023 and
then going on to Fiscal Year 2029? I am happy to report to you
today, in Fiscal Year 2023, we not only met, but we exceeded
the target. And that these are mutually beneficial.
Senator Wicker. Well, thank you very much, and you may want
to supplement your answer further. Let me just say, I really
don't think this legislation would have passed so easily had we
not been able to include the EPSCoR provision. And I do want to
thank the Chair for her help, on a bipartisan basis, in that
regard.
And Madam Secretary, you may want to answer, on the record,
about Rural America. But let me go ahead and see if I can
follow up on something that Senator Cruz mentioned. Do I
understand that you have, you and your office, have seen the
completed report concerning the Lower 3 Gigahertz Study?
Secretary Raimondo. We got it at the end of last week, yes.
Yes, we got it at the end of last week.
Senator Wicker. OK. And so do I understand you to say that
there are areas of the report that you disagree with?
Secretary Raimondo. I have not gone through it all myself,
so you could not understand me saying that. We received it, I
think, on Friday.
Senator Wicker. OK. Well, what did you say with that
regard?
Secretary Raimondo. What I said is this, we need to do a
better job of being more creative in figuring out ways to have
more of that mid-band spectrum available for commercial use to
power innovation in ways that do not interfere with, or in any
way degrade the DoD's mission.
Senator Wicker. OK. Well, let me just say I agree with that
statement that you just made as you had--as you said it. And to
the extent that the report coming from the Department of
Defense is more restrictive in that regard, I would have a
problem with that; when are Members of the Committee and
Members of the Senate going to be able to see this report?
Secretary Raimondo. As I said, we just received it, I
think, on Friday of last week. We are going through it now, and
I would be happy to follow up, and we will have a briefing
schedule where the DoD, and NTIA can come over whenever you
want.
Senator Wicker. Madam Chair. I do like the idea of a
briefing. I really think it is less formal, and there is more
of an opportunity for give and take.
Secretary Raimondo. Yes.
Senator Wicker. But I think to the extent you say there is
room for both sides to benefit and for neither side to have a
loss, and I even--I am reluctant to say ``side'', either
Department or area of endeavor to have a loss, that is not
necessary in splitting the blanket in this regard.
Secretary Raimondo. That is my point. I think historically
the debate has been approached. Anytime DoD gives up anything,
it is a loss, and I think we have to modernize our thinking.
There are ways that, if we are creative, they can have
everything they need, and also we must make more available for
private innovation because that advances national security as
well.
Senator Wicker. National security benefits from both. Thank
you. And thank you, Madam Chair.
The Chair. Thank you, Senator. We will take you up on the
briefing.
Secretary Raimondo. Sounds excellent.
The Chair. Thank you. Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Chair Cantwell. It
is good to see both of you. Secretary, thank you so much for
your visit to Bloomington, Minnesota.
Secretary Raimondo. It was great.
Senator Klobuchar. You are a big hit there, and at
Normandale Community College, and I think you saw there that we
are one of just a few states that have a full existing
semiconductor supply chain: design, fab foundries, toolmakers,
integrators, gas chemical producers, testing, packaging, you
name it. Could you talk about how the Commerce Department is
working to support smaller companies looking to get involved in
that supply chain?
Secretary Raimondo. Yes, I loved the visit. So thank you
for having me. Of the $39 billion, we have said about $10
billion will be used for mature legacy and supply chain. So
there will be a great deal of money available for smaller
companies and supply chain companies, like some of the ones
that we met with. You know, I can assure you that that will
happen. And just as I said earlier, we have received 500
statements of interest from, I think, 42 states, and over 100
applications or pre-applications. Many of those are smaller
companies, supply chain companies, so rest assured that we are
looking at those opportunities, not just the very biggest
companies that we all know about.
Senator Klobuchar. All right, thank you. And then, given
that you visited our community college there, Normandale
Community College, can you talk about, given that we need
100,000 new semiconductor technicians, and another 140,000
people in the trades to build semiconductor manufacturing
facilities, and I think we have a shortfall of about 300,000
engineers, 90,000 skilled technicians in the U.S., could you
talk about the importance of community colleges, and one-and 2-
year degrees, and all of this?
Secretary Raimondo. So one of the most exciting facts, I
think, in the time that the bill was signed between then and
now, we know of at least 50 community colleges in 19 states
that have announced new programs to help American workers find
jobs in the semiconductor industry. I mean, I think that is
amazing, just the fact that the passage of the bill, community
colleges are mobilizing to say: How do we fill the gap of
100,000 technicians that we are currently short?
We, of course, will be establishing the National
Semiconductor Technology Center, and a huge component of that
will be workforce, and we will do that in collaboration with
the NSF. And community--I should say, everyone has a role to
play; high schools with careers in technical education,
community colleges have a huge role to play, 4-year colleges,
Ph.D. programs, up and down the ladder. I think community
colleges, though, in training technicians, cyber technicians,
processing analysts, et cetera, have a particular role to play,
and we are already working with them.
Senator Klobuchar. Well, thank you, and what a great
transition.
Quickly to Director Panch, you mentioned all degrees, and I
know that you are going to be visiting the University of
Minnesota. You met the interim president when you were
visiting, Secretary. Could you talk about, I know they are one
of the finalists in the NSF Regional Innovation Engines
Program. In your view, how can public-private partnerships, Dr.
Panch, help to accelerate innovation?
Dr. Panchanathan. Very, very important to have public-
private partnerships. In fact, our Regional Innovation Engine
Program was created with the explicit purpose of how we might
bring all of the component parts together to ensure that the
innovation is completely, you know, energized and catalyzed.
So our Regional Innovation Engines Program, 44 awards have
been made, where 46 states and territories are involved in
this. Every one of those awards has a number of industry
partners, state governments being--partnering in that, and
sometimes even non-governmental organizations, NGOs being
partners in that. And we have, of course, community colleges,
technical colleges, K-12 institutions, as well as universities,
research universities. So this is exceedingly important.
Let me give you a couple of examples if this will
illustrate the point very clearly. We earlier talked about, you
know, 6G and 5G. We call it the NextG, let us say. So the
Resilience Intelligent Next Generation System, or the RINGS
Program has 35 companies participating in the RINGS Program,
and the total amount of resources that they bring to the table
is $50 million in-kind and actual investments. NSF matched that
with another $50 million to now have a very robust program of
looking at: How do we build the next-generation networks,
including rural broadband being made accessible so that talent
and ideas can have access to all the content that we are
generating all across our nation?
So to the community college, because you asked that
question, I cannot but help tell you about this community
college, Hennepin Technical College.
Senator Klobuchar. Yes, that is in my state.
Dr. Panchanathan. It is leading an NSF Advanced Technical
Education, ATE, this program has been invoked for a long time,
essentially community colleges, which are invested in for new
curriculum, model curriculum, as well as in terms of students.
Senator Klobuchar. OK. Very good. Thank you. And we look
forward to your visit.
Dr. Panchanathan. I look forward to being with you.
Senator Klobuchar. We expect you to be wearing a Gophers'
hat when you are there, just to bother Senator Fischer with her
Nebraska Team.
Dr. Panchanathan. Thank you.
Senator Klobuchar. But I also want to thank the Chairwoman
for her incredible leadership on this bill. We wouldn't be
where we are today if it wasn't for Senator Cantwell. Thanks.
The Chair. Senator Fischer. Thank you, Amy.
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Madam Chairwoman; and thank you
to both of our witnesses for being here today. Between your two
agencies, you have received more than $54 billion in
appropriations under the CHIPS and Science Act so far. This is
an enormous amount of taxpayer money.
Earlier this year, the Commerce Department's Inspector
General described the novel challenges facing the
implementation of CHIPS. The IG highlighted the need for new
controls and appropriate oversight for this unprecedented
influx of funding, stating that it, quote, ``May require
additional monitoring and reporting to ensure project
recipients comply with statutes, achieve intended outcomes, and
use funds efficiently.''
The Inspector General has also noted that contract and
grant fraud now account for 65 percent of the OIG's Department
of Commerce cases. Before fiscal 2021, they represented roughly
35 percent.
Secretary Raimondo, have you planned to implement any
specific oversight measures to respond to this concerning
development that we are seeing?
Secretary Raimondo. Yes. Thank you, Senator, and thank you
for the question. You are absolutely right. This is
unprecedented. The Commerce Department has never implemented
anything of this size, and I take that responsibility
incredibly seriously. I have a job to achieve national security
goals and to protect taxpayer money, and we aim to do both, to
be a steward of taxpayer money. We are building a team. Since
the time the bill passed, we have built a team of about 150
professionals. I would invite you to meet them anytime. They
are incredibly talented people, and we are building a risk team
specifically devoted to the issues that you highlight.
The Risk Team is of risk professionals to make sure we are
evaluating all the risk, and also after we put the money out,
to make sure that the companies are doing what they said they
would do. Also, we don't plan to put the money out to these
companies in one lump sum, we plan to put it out on milestone-
based achievement. So some money, see what they do.
So we are going to be massively transparent, provide
notice, as we are required to do to Congress, for investments
of $10 million or more, and have--we are doing an incredible
amount of due diligence, all of which will be documented. And
as I said, have a whole team devoted to management of risk and
compliance of the companies to the promises that they make us
in exchange for the money.
Senator Fischer. In this report, were there any patterns
that emerged? You know, when you see that increase in fraud,
were there any patterns, anything specific that companies may
be doing that would be red flags to be able to help this risk
team to be able to identify them at an earlier time?
Secretary Raimondo. Yes. It is a great question. And of
course, something that we are obsessed with, always trying to
get better? No, not particularly. As was said earlier, look,
putting $50 billion of taxpayer money out in partnership with
private sector companies is a challenge. And so I don't think
there is any one answer. I can simply tell you the team we have
is built with professionals that have 10, 20, 30 years of
experience in track record. We are building new systems, whole
new systems of due diligence, compliance.
Every company, for example, will have to give us a security
plan, an R&D plan, a financial plan, open their books to us,
share their finances with us, and we will use all of that
information to hold them accountable.
Senator Fischer. You mentioned that you are putting money
out, like first payments, second payments to be able to----
Secretary Raimondo. Exactly.
Senator Fischer.--to be able to keep track of it easier. If
you would see anything that was questionable there, can you
cancel grants?
Secretary Raimondo. Yes. Yes. We could claw back money,
depending on the situation. Like, for example, if they violated
the China Guardrails, or we could--we would not fund the next
tranche if they didn't meet the conditions that were required.
Senator Fischer. Right. I would be negligent if I didn't
put in a plug for Nebraska as well, since we are going down the
dais here to be able to get a plug in for Nebraska, and the
good things that we see. I do have a question, though, on how
do you define what a region is?
And then also, Dr. Panch, if you could say nice things
about my state.
[Laughing].
Senator Fischer. Look it up.
Dr. Panchanathan. Yes, we have it. Ready to go whenever you
are.
Senator Fischer. So how do you define a region?
Secretary Raimondo. Well, for the tech hubs, we have to
have several awardees within each of the EDA's regions. So the
Economic Development Agency has, statutorily, several regions
around the country, and we have to have some tech hubs in each
region.
Dr. Panchanathan. So Senator, first of all, NSF had, of
this investment that was made of CHIPS and Science, NSF got
$200 million over 5 years. The science portion of NSF's is
still an authorization, not an appropriation. We are hoping
that we will have the investment that is planned, and the
authorizations to become appropriations, but we are not waiting
for that to energize the innovation all across the nation, as
you heard, that I mentioned that.
The $200 million is being used in order to be able to
generate the 100,000 semiconductor technicians, workers,
researchers that our Nation needs very rapidly. The Secretary
talked about what we need by 2030, but it is about the fact
that it is even beyond 2030. So NSF is working toward that. And
for partnership, again, to your earlier question, public-
private partnerships, we are working with the consortium of
companies, Micron, Intel, Samsung, Ericsson, and others.
To the state of Nebraska, since you asked. So we are very
thrilled, again, NSF's investments span all parts of our
nation, energizing community colleges, universities, and so on.
Let me give you a couple of examples from Nebraska. So the
University of Nebraska, EPSCoR, or to track one award, which is
$20 million for the period of 2021-2026, is participating in
the second quantum revolution by launching an
interdisciplinary, interdepartmental, and multi-campus research
and education cluster focused on Emergent Quantum Materials and
Technologies, called EQUATE, this essentially to increase the
jurisdiction's competitiveness in the area of quantum science
and technologies, as one example.
There is another project, again, which we have an award to
the University of Nebraska-Lincoln, which is a companion to the
Large Hadron Collider work that is happening. So here we are
essentially supporting a CMS detector and supporting software
being developed at the University of Nebraska.
So clearly, again, I want to reemphasize this point, you
are going to tire of me saying this: Talent and ideas are
everywhere, and it is our responsibility to find them, nurture
them, motivate them, and bring them to life. That is the only
way we are going to outcompete other nations.
Senator Fischer. Thank you. There is no place like
Nebraska. Thank you. Thank you, Madam Chair.
The Chair. Senator Hickenlooper, I am going to ask you to
chair while I run and vote. And then, following you will be
Senator Moran.
STATEMENT OF HON. JOHN HICKENLOOPER,
U.S. SENATOR FROM COLORADO
Senator Hickenlooper. And Senator Fischer, I will put in a
plug for Nebraska as well, but only after I put in a plug for
Colorado.
Thank you, Madam Chair. And it is great to see such a crowd
here. I feel a little bit like we are at Sunday Night Football
with Taylor Swift and Travis Kelce. I haven't seen this many
people in this room in quite a while. But Dr. Panchanathan, I
know that you attract a crowd, and that you have really devoted
yourself to these issues.
And Secretary Raimondo, just for you, other Senators should
know that we were--we overlapped as Governors, and I don't
think there is another Governor that had as strong bipartisan
support, because she made decisions not from a political
perspective, but what is the best outcome. And she stole our
best ideas. We stole her best ideas. That is sort of the way
the Governor's world works.
So we will start with you, Secretary Raimondo. As a former
Governor, I appreciate the recognition in your Department that
innovation and workforce development thrive when local
communities have an active seat, not just a seat, but an active
seat at the table. And we have been listening to the needs of
our communities, and I think Colorado has positioned itself as
a leader in startup creation, and supporting entrepreneurs,
generating a diverse workforce in a range of technology fields,
advanced manufacturing, cybersecurity, clean energy, quantum.
So I don't have to go on. I think the other Senators have
done a good job of pitching their states. I don't have to go on
in either of these questions, regional hubs, or the regional
innovation engines, why Colorado is so well-suited. But I do
think, I would like to ask both of you to describe how the
Department and NSF, how will you coordinate complementary
regional tech hubs and regional innovation engines?
Dr. Panchanathan. Senator, let me start. Even before the
CHIPS and Science Act, Secretary Raimondo and I, as soon as she
took office, we spoke the very next week and said that we are
going to hyper-partner, if there is a term like that, because
we believe that this is in the interest of our nation, of the
taxpayers who invest in both our agencies and departments. So
we have been--at NSF, in fact, we have a CHIPS Steering
Committee, which is the Office of the Director, that works
almost on a daily basis, and a weekly basis of synchronization
with the Secretary's Office and their Steering Committee.
So every program that the Secretary talked about, you know,
the National Science and Technology Centers, the workforce
development activities, the EDA activities, the Regional
Technology Hubs, every one of those activities are highly
coordinated. In fact, when the Regional Technology Hubs'
announcement was being made, even the verbiage of the
announcement was coordinated between NSF and Commerce, and vice
versa.
So that is the level of coordination we have because we
believe that we don't want to lose any of these innovations and
innovators by having any of these valleys of death, as we call
them. So we are making sure that we are tightening those gaps
so that we can carry the innovation all the way from
fundamental research to applied translational work, to then
into the innovation outcomes that we seek.
Secretary Raimondo. Just one quick addition to that, and I
agree, and it was very, very well said. Everyone knows, if you
talk to industry and academia, everyone will tell you, NSF's
job training programs are, you know, world-class, the
curriculum, the approach. So we want to learn from that and
then, of course, expand it because we now have all of this
additional money.
But in the NSTC, for example, which we are going to
establish this fall, NSF is a founding member of that. So we
are really trying to bake in the NSF to everything we do and,
frankly, leverage all of their great work, especially around
workforce training.
Senator Hickenlooper. You are way ahead of us, and that is
very, very encouraging.
Gina, Secretary Raimondo, the CHIPS and for Science directs
the Office of Science and Technology Policy to develop the
Interagency National Science and Technology Strategy to
establish national research goals, especially in terms of
emerging technologies. And we have been looking at how
research, and standards, new commercial applications in the
field of AI, are going to transform, not just our economy, but
our global competitiveness. So I thought it would be useful
just to get what priorities does the Department see are
important in this kind of forthcoming strategy to reflect in
the field of AI?
Secretary Raimondo. So we should visit on this when we have
more than 19 seconds to talk about it. But NIST, as you well
know, NIST is the standard-setting body. They are kind of the
lead agency now in the Administration's work on AI. They have
already put out their Risk Management Framework, which is
voluntary risk guides for developers developing AI. And the
special sauce of NIST is that, because they are a neutral third
party, everyone trusts them. So industry will collaborate with
them, universities will collaborate with them. And that is the
entity that will be forming the new standards.
And you know, candidly, I know I am out of time. I think,
you know, there will be a U.S.-led ecosystem, and we need--of
AI, we lead the world, and we need to make sure that the
standards that fuel that are consistent with our democratic
values. So we can have a further discussion.
Senator Hickenlooper. No, absolutely. And I agree
completely. And I think NIST, just to our large audience, I
think NIST is one of the most effective organizations we have
in the Government. I think they do a remarkable job at an
almost impossible job. I mean, the remarkable success at an
almost impossible job. All right, I will yield. But I get to
ask questions later because now I am chairing, so I will get to
come back.
Senator Thune.
Senator Thune. Mr. Chair, I would yield to my colleague
that is down, just to my right, Senator Moran, who has been
waiting patiently.
Senator Hickenlooper. Senator Moran.
Senator Thune. Very patiently, to ask questions.
STATEMENT OF HON. JERRY MORAN,
U.S. SENATOR FROM KANSAS
Senator Moran. Thank you, Senator Thune, for yielding. And
thank you to the Director and to the Secretary for your
presence with us today and the work that you are doing to
implement the Science and CHIPS Act.
I would not take up my time, very much of my time, anyway,
to reiterate what has been said time and time again in regard
to rural and small business. Thank you, Director. We might have
a conversation in the future about, I am pleased with the
EPSCoR, that you met the standard goal. I would be interested
in knowing if there are challenges that you will face in
continuing to meet that or exceed that goal in the future?
Secretary Raimondo, could you update the Committee on your
efforts to ensure rural states and small businesses benefit
from the CHIPS and Science Act, particularly via the Tech Hubs
and CHIPS Program?
Secretary Raimondo. Yes, thank you, Senator. So as I said,
we will be putting up the Tech Hub designations this fall, and
we will ensure that there will be geographic representation,
including rural representation. Much of that is because we have
been doing outreach to rural communities to let them know the
money exists. We want them to apply, and to help them apply. As
I said before, it is so oversubscribed that I have no doubt
there will be rural places we would have liked to have invested
in that we won't be able to.
With the CHIPS part of it, just last week, we put out a
funding opportunity for small and medium-sized supply chain
companies. And I promise you, we are going to work overtime to
have small suppliers, small chip companies eligible for the
money.
Senator Moran. You have reassured me of that at least 16
times, and I am thankful that it is still true today. Would you
describe, Secretary, the process for evaluating tech hub
applications and, in particular: What roles do the EDA regional
offices play in that process?
Secretary Raimondo. So the EDA, it is, as I said before, it
is a merit-based process. We have national security goals that
we need to achieve, and those are primary. Another thing we
evaluate is likelihood of success, how strong is the
partnership, is there full buy-in from the community. The
decisions are going to be made by a committee in D.C., with
advice and consultation from the local offices.
Senator Moran. Thank you. Regional offices?
Secretary Raimondo. Regional offices, yes.
Senator Moran. Could you tell me, Secretary, if there is
value in an application for a tech hub that originates by a
state, the tech hub application originates by a state, as
compared to an entity, a different entity?
Secretary Raimondo. I don't think that. There is no
preference either way.
Senator Moran. OK.
Secretary Raimondo. We are open.
Senator Moran. The timeline for tech hub announcements,
tech hub designees, and development grant awards.
Secretary Raimondo. This fall, as soon as possible.
Senator Moran. Then, expect to see CHIPS Program Awards at
what point in time?
Secretary Raimondo. Also this fall. Let me say this, I am
moving as fast as I can, but it is more important to get it
right than move fast. And it depends on companies applying and
having good applications. Having said that, I hope tech hubs
will be in the coming weeks, and I hope we will have some CHIPS
funding announcements this fall.
Senator Moran. Thank you for the explanation. And it is one
with which I agree. Finally, I want to talk about Huawei,
export controls on AI technology. Details about what they seem
to have accomplished, what Huawei chips have--what Huawei has
seemed to accomplish, the details of that remain unclear.
Secretary Raimondo. Mm-hmm.
Senator Moran. We have a particular interest in our
appropriations process in the Bureau of Industry and Security
within your Department. There was a significant funding boost
in Fiscal Year 2022--I am sorry--2023, I want to get to my
question in the next few seconds that I have. What gaps remain
in U.S. technology export restrictions that may have allowed a
targeted company to manufacture an advanced semiconductor?
Secretary Raimondo. OK. This is a critical thing, and we
should visit when we have more time. Let me just say, the
reports about Huawei are incredibly disturbing. And although I
can't comment on any investigations, I promise you we take
every credible threat seriously and investigate to the fullest,
wherever we think there is a credible allegation that a company
has done an end run around our export controls.
We need different tools. I am supportive of the GUARD Act,
which would--and RESTRICT Act, which would codify our ICTS
authorities. We need that to have a comprehensive approach to
go after connected apps. We would need resources, additionally,
to do that. I think we need additional resources around
enforcement to do exactly what you are talking about.
And, candidly, we need to--the threat is different today.
The threat from China in 2023 is different than the Cold War
threats of decades ago. It is technology, it is AI, it is
moving fast. And so I would be--I would welcome a broader
discussion with you around how we modernize what we do, and how
we properly fund what we do.
Senator Moran. There have been lots of wake-up calls.
Huawei is a particular one that stands out, received
significant attention. And I would welcome the chance for your
direction, suggestion on how we, either as appropriators or
authorizers, could be helpful in closing this opportunity for
China's technology theft.
Secretary Raimondo. We will do it. I mean, I have to say I
am proud of the fact that under my watch, we imposed the
largest fine ever in history, a $300 million fine against a
company called Seagate for violating export controls, selling
to Huawei. So we are as tough as we need to be, but more
resources would be helpful.
Senator Moran. Was the fine collected?
Secretary Raimondo. Yes.
Senator Moran. OK. Good. Thank you.
The Chair. Senator Lujan.
STATEMENT OF HON. BEN RAY LUJAN,
U.S. SENATOR FROM NEW MEXICO
Senator Lujan. Thank you, Chair Cantwell. Thank you to the
Ranking Member for this important hearing. Secretary, thank you
for being here. Director, thank you for being here.
Secretary Raimondo, one thing I wanted to share with you,
and also Chair Cantwell, is to show support for Ranking Member
Cruz's question to the Secretary on mid-band spectrum and
coordination between the Department of Commerce and Defense to
ensure more mid-band spectrum is available for 5G Wireless.
So I don't have a question at this time. I only wanted to
show support for the request from Senator Cruz and the
commitment from the Secretary to brief Congress on the study
that the Department of Defense submitted last week. So thank
you very much for that.
As you know, I am proud of New Mexico's long history of
connecting scientific innovation, national security, and global
competitiveness, and for over 75 years, our Department of
Energy National Labs have served the Nation with their
international leadership in scientific discovery and
innovation. Created through CHIPS and science, the NSF
Innovation Engines are designed to create regional-scale
innovation ecosystems across the Nation to accelerate the
development of critical technologies. These Innovation Engines
will provide another opportunity for states like New Mexico to
support the Nation by driving the scientific innovation needed
to maintain international leadership.
Director, I was pleased that your testimony acknowledged
the fact that we all know too well. The economic prosperity
produced through scientific innovation has not been shared
equally across our Nation. My question, Director, yes or no, do
you expect that the choice of Regional Innovation Engines will
provide economic opportunities to those communities that are
too often overlooked?
Dr. Panchanathan. Yes. And I can give you many examples.
Senator Lujan. I appreciate that very much, and I will
submit something to get those specific responses as well. I was
happy to see that one of the 16 Innovation Engine finalists is
the New Mexico Space Valley Coalition, which is dedicated to
grow in the Nation's commercial space industry. But the New
Mexico Space Valley Coalition includes the City of Albuquerque,
leadership from the private industry, universities across the
State of New Mexico, including Navajo Technical University.
Director, as you already know the coalition in New Mexico
is an incredibly talented group that represents the diversity
of my state, and the United States of America, by all measures,
and the New Mexico Space Valley Coalition appears to be a
perfect fit, for the innovation engine decision. The CHIPS and
Science Act, established the technology innovation, and
partnership directed at the National Science Foundation.
Of those three words, technology, innovation, and
partnerships, partnership is very important, by expanding
authorities for not just the National Science Foundation, but
also the Departments of Energy and Commerce, the CHIPS and
Science Act makes clear that no single department or agency can
do it alone. The scientific challenges we face are too big, the
time line to meet these challenges is too short, and the
international competition is too strong. I was pleased to see
that NSF, and the Department of Energy signed an MOU to partner
on finding solutions to many of these challenges.
Director, yes or no. For the National Science Foundation to
successfully implement the new authorities provided by CHIPS
and Science, will the agency need partners like the Department
of Energy?
Dr. Panchanathan. Yes. And we do that in large measure with
the MOU, and there are many examples again, of that too.
Senator Lujan. Can you share some of those examples that
you just shared, through that MOU as well, but others that show
that connection and the partnership with the Department of
Energy?
Dr. Panchanathan. We will be happy to do that, yes.
Senator Lujan. Now, Secretary Raimondo, thank you for your
leadership and for leading the Department of Commerce,
especially in this space where so many of the challenges that
we face as a country will fall under your leadership and the
jurisdiction of the Department of Commerce and your team. We
just heard from the Director how NSF is partnering with the
Department of Energy. Can you share with the Committee how the
Department of Commerce is engaging the Department of Energy and
the National Labs in implementing CHIPS and Science?
Secretary Raimondo. Yes, thank you. We also have an
excellent cooperation with the Department of Energy, and in
particular in the National Science and Technology Center, which
will stand up this fall. They, along with NSF, will be one of
the founding entities, and so they will have a real role to
play in establishing the center, defining the priorities, and
you know, we plan to rely on their expertise very heavily.
Senator Lujan. I appreciate that very much. And, Madam
Chair, as I yield back, I just want to note for the record a
concern that I have, which is looking at the aggressive posture
from the administration, solely for the National Science
Foundation top line. I have a concern when I am looking at the
top lines for NSF compared to the Department of Energy Office
of Science. And I think that Congress and the administration
need to expand funding for both NSF and the Office of Science
at similar rates if we are going to work to make sure CHIPS
truly succeeds as well. So with that, thank you, and I yield
back.
The Chair. Thank you, Senator Thune.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Thank you, Madam Chair. Secretary Raimondo,
I thank you for being here today. I have been working with
members of this committee on both sides of the aisle to develop
a Light-Touch Framework for oversight of artificial
intelligence. And as I am sure you are aware, AI is a major
focus for the Senate.
In your written testimony, you indicated that the CHIPS and
Science Act will help enable us to be the global leader in
emerging technologies, and you specifically referenced the new
National Semiconductor Technology Center. I am focused on
ensuring that the Senate puts the necessary guardrails in place
while also ensuring that any legislation encourages and not
stifles innovation in AI.
So could you explain in more detail how the National
Semiconductor Technology Center, and the CHIPS and Science Act,
more broadly, is encouraging innovation in artificial
intelligence?
Secretary Raimondo. Thank you. I agree with you strongly.
The United States has a competitive edge in the world right
now. We are leading the world in AI, and we need to preserve
that lead and extend that lead, and so we have to preserve our
competitive edge; having said that, we have to balance the
opportunity with guardrails that make sure that we protect
ourselves from the downsides.
So NIST, part of the Department of Commerce, has put out a
Risk Management Framework, which is voluntary, to developers
for safeguards they should use as they develop new AI
algorithms, similar to the voluntary commitments that the
President and the administration have extracted from the
biggest AI developers.
With respect to the NSTC, that will be research and
development. So whether it is new materials, new ways to
develop new semiconductor chips, right, all AI is going to be
powered by AI chips, where, again, we lead the world. I think
the NSTC will have collaborations with universities and
companies to lead the next wave of research and development and
startups, so we continue to maintain our AI lead.
Senator Thune. Thanks. This Administration continues to
push for public utility-style regulations on the internet. USDA
has tried to insert so-called ``net neutrality rules'' in its
reconnect program, NTIA, has thrown in a number of extraneous
requirements in the BEAD Program. And just last week, the FCC
announced that it will be reinstating the Obama-era Title II
Regulations on the internet. Don't ask me why you would want to
regulate the Internet as a depression-era monopoly, but they
seem to be headed back down that road.
With respect to the BEAD Program, I find it troubling that
the administration would put over $40 billion in broadband
funding at risk just to accomplish a campaign talking point.
And what I would argue is that instead, we should be
establishing efficient BEAD rules that incentivize the
participation of companies that have spent years building out
reliable networks to some of the most remote parts of the
country.
Will you commit to not require states to include specific
price points for broadband offerings in their BEAD plans; yes
or no?
Secretary Raimondo. Yes. We do not require that. I want to
be clear. We are not rate-regulating. We are not price-setting.
And we are not requiring states to do that. Furthermore, we
want all providers, large and small, to participate in the
program. The way we are doing it is every state, you know, your
state, your Governor, would create a plan that they think could
meet the needs of your state. And then our job would be to
evaluate that before we fund the plan.
Senator Thune. All right, so you would commit that NTIA
will give states discretion on how to implement----
Secretary Raimondo. Yes.
Senator Thune.--their low-cost and middle-class
affordability requirements? In 2022 I introduced the Quantum
Network Infrastructure and Workforce Development Act with
Senator Hassan, which was ultimately enacted as part of the
CHIPS and Science Act. And among other things, the bill asks to
build on the expertise of NIST to improve existing research on
quantum networking and encryption. These applications have the
potential to greatly enhance network security and protect
privacy while bolstering U.S. leadership and competitiveness in
the development of these technologies.
Could you describe how the Department has worked to promote
U.S. competitiveness and innovation in the development and
standardization of quantum technologies, including through the
implementation of this bill?
Secretary Raimondo. I would be happy to, and I will follow
up with Dr. Locascio, who runs NIST. But I can tell you that
quantum as--quantum, AI, and chips are areas where we are
exceedingly focused to develop standards, and to focus our
investments.
Senator Thune. All right. Thank you. Thank you, Madam
Chair.
The Chair. Thank you. Senator Peters.
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you, Madam Chair. And to our
witnesses, welcome, it is good to see both of you here. And
thank you for all the great work that you do.
Secretary Raimondo, I believe, in order to be a great
country that you actually have to make things. And it has to be
our focus. You and I have talked about that before. And one of
the primary goals of the CHIPS and Science Act was to increase
domestic production of mature semiconductor chips to address
the crisis that we saw in the automotive supply chain. A crisis
that was preventing consumers from being able to purchase
vehicles and resulted in furloughs of auto workers due to the
shortage of mature chips; like we had parking lots full of
automobiles, and pickup trucks, and other vehicles that just
needed a chip or two before they could head off to the dealer.
Your Department has pledged to spend $10 billion in the
CHIPS funding to fix that, and certainly, I would love to have
an update on that, but hope that your commitment will stand
through the full expenditure of that necessary investment in
that industry. But in addition to making more mature chips here
in America, we must also use the CHIPS and Science Act to
invest in the future of the automotive industry, and that means
research and development.
Michigan stakeholders have already mobilized to meet that
challenge, and one example is the STAR Initiative to establish
a Semiconductor Center of Excellence in Michigan, led by the
internationally renowned research center, IMEC, semiconductor
equipment manufacturer KLA, the University of Michigan, and
Washington Community College.
The STAR Initiative will focus on advanced microelectronic
research for vehicle electrification, and autonomous automotive
solutions. These innovative solutions will help cement the
United States' leadership, not only in the future of
semiconductors, but also in the future of the automotive
industry.
So my question for you, Secretary Raimondo, as you
disseminate CHIPS R&D funding in the coming months, will you
commit to considering the crossover impacts that semiconductor
R&D projects can have on other industries, like the automotive
industry, as a way to maximize the impact of these funds?
Secretary Raimondo. I will. But let me say this. As you
know, the statute--as you well know, the statute requires a $2
billion set aside for the mature node chips, and we have said
that we believe we will invest closer to $10 billion in supply
chains, mature and current node chips, and that is still our
plan. So we think that is what is necessary to get the job
done.
With respect to your other question, early in the new year,
we will be getting the NOFO out, the Funding Opportunity out
for the R&D portion, and I will commit, certainly, to work with
you between now and then as we design that application before
putting it out early in the new year. But I do want to be
clear, and I have said this all along, the point of the CHIPS
Program isn't just to incentivize a few new fabs and call it a
day, right. That is not enough. That is not success. That is
necessary but insufficient.
The point is to do exactly as you say. It is to stimulate
research and development, it is to stimulate job training, and
to have a whole ecosystem that no longer--that we need to
deepen in the United States, including applications like in the
auto industry. So we are in violent agreement on this, and you
know I look forward to working with you.
Senator Peters. Very good. Well, I will look forward to
that as well. I will raise another issue related to
semiconductors, and that is advanced packaging, which is a
significant part of the chip supply chain, as you well know,
that I believe needs significant focus as part of our onshoring
efforts, to bring this back to the United States, because of
its importance both from a national security perspective and
for American workers and consumers.
Calumet Electronics in Calumet, Michigan, with the help of
incredible engineers from the Michigan Technological University
up in Houghton, is doing incredible work on advanced packaging,
particularly by making very advanced printed circuit boards for
defense applications, and they are expanding their capacity.
My question for you is, as we try to ensure the supply
chain is supported, can you speak to how advanced packaging
will be prioritized in funding going forward?
Secretary Raimondo. Yes. This fall we will be putting out a
strategy paper on our packaging strategy, our plan, so you will
be able to see that soon. But let me tell you this, right now,
we don't really do advanced packaging in the United States. It
is a huge problem that doesn't get much attention. Even if we
make the chips in the United States and then ship them to Asia
to be packaged, that doesn't secure, you know, doesn't align
with our national security goals.
So we are deeply committed, at the end of this
implementation, to have advanced packaging on our shores. And,
as I say, later this year, we will put out more details on the
strategy.
The Chair. Senator Blackburn.
STATEMENT OF HON. MARSHA BLACKBURN,
U.S. SENATOR FROM TENNESSEE
Senator Blackburn. Thank you, Madame Chairman. Let me stay
with this issue on the fabs, and I had looked at your Notice of
Funding Opportunity when you were talking about we could have
as many fabs as we want, and how we have to move forward on
this with the supply chain. So my question for you is, looking
at the Investment Tax Credit, and should Congress look at
harmonizing the Investment Tax Credit in 48D to align with the
program that you are running to ensure that the law allows for
manufacturing for the facilities that you claim are going to be
necessary, and for being able to reshore much of that activity?
And then how are you working with Secretary Yellen on this?
Secretary Raimondo. So you know, I will leave it to
Congress to decide if and how you might want to amend the
legislation. The legislation, as currently crafted, has the tax
credit being more restrictive than the CHIPS Act--excuse me--
than the grant, so it is intended by statute, that the tax
credit is more restrictive than the grant program.
Senator Blackburn. Yes, my question is, should we harmonize
that?
Secretary Raimondo. I would have to think about that, to be
very honest.
Senator Blackburn. OK. If you want to get back to me on
that, I think your insight on this is something that is
important.
Secretary Raimondo. OK.
Senator Blackburn. Dr. Panch, again, we almost got you into
a UT jersey when you were there in Tennessee, and we will get
you back. Let us talk a little bit about microelectronics and
ultraviolet lithography, and the work that is being done there.
What are you doing to make certain that we don't have several
different agencies that are working on this, but we are not
harmonizing that work?
Dr. Panchanathan. Senator, it was great to be with you at
the University of Tennessee in Knoxville, where we announced
the Regional Innovation Engine, which I keep talking about.
This was focused on transportation electrification and
digitization. And specifically to your question, we have very
tight partnerships with all of the agencies in topical areas
that bring us together. For example, we have an MOU with the
Department of----
Senator Blackburn. So you are watching the duplication?
Dr. Panchanathan. Absolutely. Absolutely.
Senator Blackburn. Perfect. That is what I wanted to hear.
And I know people in Tennessee wanted to know that.
Secretary, I want to talk a little bit about your trip to
China. Did you think it was a success?
Secretary Raimondo. It was a productive trip, certainly.
Senator Blackburn. Were you able to hold them to account?
Secretary Raimondo. I was clear that there will be no
negotiation on anything related to national security or export
controls.
Senator Blackburn. And did you call them out about
committing genocide against the Uyghur Muslims?
Secretary Raimondo. I did.
Senator Blackburn. And their response?
Secretary Raimondo. I didn't get much of a response.
Senator Blackburn. OK. And have you visited Taiwan?
Secretary Raimondo. I have not.
Senator Blackburn. Any reason for that?
Secretary Raimondo. I have had no reason to visit Taiwan.
Senator Blackburn. No reason to visit Taiwan? And even
though they are a primary supplier of a lot of chips? Do you
consider Taiwan a country?
Secretary Raimondo. The administration's policy is clear on
Taiwan, and----
Senator Blackburn. So you are not going to deviate from
that?
Secretary Raimondo. Absolutely not.
Senator Blackburn. OK. All right. I think that we are all
very concerned about continuing to bolster our leadership,
whether it is going to deal with semiconductors, broadband, AI,
quantum, the microelectronics that we were just discussing. And
we cannot afford to fall behind the CCP. We just can't. And it
is going to take calling them out on this and holding them to
account.
And, in my opinion, it is going to take supporting Taiwan
and the work that they are doing. And, of course, you know, we
have got to make certain that the CCP-controlled entities don't
benefit as we move forward implementing CHIPS. And I think it
is also Madam Chairman, one of the reasons that we have got to
get busy with the NQIA and make certain that we get that
reauthorized this year.
And I had read the article in The Hill where they mentioned
that quantum computing capabilities are things that the Chinese
Communist Party is going to use to bolster their surveillance
and their satellite movements. And as you look at this, it is
imperative that we not give them one inch. And I think that
sending that message that, yes, indeed, Taiwan is someone we
can work with, and they want to have our business is something
that is important.
Thank you, Madam Chair.
The Chair. Thank you. Senator Welch. And I will just ask
members we----
STATEMENT OF HON. PETER WELCH,
U.S. SENATOR FROM VERMONT
Senator Welch. First of all----
The Chair.--we are on a tight time frame with some--with
our witnesses, and we want to get through everybody, so just
keep to your time if you can.
Senator Welch. And I will. Secretary Raimondo, first of
all, I think you are doing a great job, and we are excited in
Vermont about the CHIPS Act, and I thank my colleague, Todd
Young, who played such an instrumental role in getting that
passed. We have real production of gallium nitride chips,
printed on silicon chips, and that is a new technology that is
providing greater power.
GlobalFoundries, which is a very large company in Vermont
is a leader in this. And I want to give you an opportunity to
explain what the Department is doing to continue to incentivize
the development and the manufacture of mature legacy node
semiconductor technology?
Secretary Raimondo. Yes, thank you, Senator; nice to see
you. As I said, we--the statute requires that we invest at
least $2 billion in grants in legacy nodes. We believe that we
will invest significantly more than that because these are the
CHIPS that are essential. I will say we have also executed an
MOU with the Department of Defense, whereby they can share
information with us around their needs for the defense
industrial base. Much, if not most of the defense industrial
base needs these existing node, mature node, and legacy chips.
So that is another reason why we are so focused on making sure
we have enough supply in the United States.
Senator Welch. Thank you. Another question of real interest
to us in Vermont, the Regional Tech Hubs Program that, of
course, as you know was part of CHIPS and Science. We have got
applicants. And is there a commitment from the EDA and the
Department of Commerce to follow the requirements in that
program around rural and EPSCoR states, and that Vermont would
be among them?
Secretary Raimondo. Yes, of course.
Senator Welch. And the deadline for Phase I solicitations
was August 15, and there is a lot of interest in knowing when
we are going to hear. And I don't know if you can comment on
that, but it would be good to have some visibility on when we
can expect an answer.
Secretary Raimondo. Yes, Senator. As I said earlier, we are
working as fast as we can. We have received over 400
applications from nearly every state. I hope to be able to have
news in the next month, or so.
Senator Welch. OK. Thank you very much.
And I wanted to ask Dr. Panchanathan a few questions. We
really appreciate all that the Act is doing, and you are doing
to help clean energy innovators from the development stage all
the way through commercialization. And all of us are a little
bit blue about how we developed solar but then we lost
commercialization to China. So I want to give you an
opportunity to express what you are doing to ensure that the
Directorate of Technology is bringing clean energy technologies
from the research phase to the commercialization phase in the
U.S.?
Dr. Panchanathan. Thank you very much, Senator Welch, for
the opportunity to weigh in on this. In May of this year, we
announced the first-ever NSF Engines Development Awards, which
I talked about, seven of those awards include sustainable
energy as a topic area. In August, we announced 16 NSF Engine
finalist proposals. Two of those include the topic areas of
sustainable energy.
In addition, to that, many of our existing programs that in
the translation phase, in terms of what you refer to as
starting--resulting in startups or small companies being
invested in, SBIR and STTR programs have also got significant
clean energy portfolios as well.
So as an example, the Vermont startup, Rich Earth, LLC, is
aiming to leverage clean energy technologies while in the
process of optimizing wastewater treatment for nutrient and
water recovery, so TIP has also launched the Accelerating
Research Translation Program, so there is a number of those
activities that is focused on clean energy and sustainable
energy. So I hope that answers your question.
Senator Welch. OK. Thank you. I want to stay within the
Chair's concern. And I just want to make a comment about
working with us on the letter of credit that is going to hammer
us if it stays at its current level in the BEAD Program.
Madam Chair, I yield back.
The Chair. Thank you. Senator Vance.
STATEMENT OF HON. J. D. VANCE,
U.S. SENATOR FROM OHIO
Senator Vance. Thanks, Madam Chair. Thanks, Secretary
Raimondo, and the witness for being here. I appreciate it. I
want to say or at least echo some of the comments that
colleagues from across the aisle have made of my colleague
Senator Young, and some of the great works done on the CHIPS
Act. I, of course, wasn't here when the CHIPS Act was passed,
but I certainly would have supported it because I think it is
important to bring American manufacturing, especially in high-
technology industries, back to our country.
There have been many stories and many questions raised
since the CHIPS Act was passed, about its implementation and
also how companies are benefiting or not from some of its
resources. I want to focus on one particular barrier, just to
start out with, Secretary Raimondo, which is the labor
shortage. You hear a lot from folks who are working in the chip
industry that we have a labor shortage. You hear this, of
course, from Taiwan Semiconductor, which has tried to build a
$40 billion facility in Arizona and is effectively trying to
import skilled engineers from Taiwan because they say they
can't get the labor from here.
Is that an accurate assessment of the situation, that we
have, of course, the need to produce chips in America, but we
also have a shortage of skilled labor, and recruiting the
people to actually make those chips?
Secretary Raimondo. Yes, it is. Listen, I think, and as we
have said, we will be using some of the CHIPS Act to devote to
labor and training and workforce. And in fact, since the
passage of the bill, over 50 community colleges have started
new initiatives to train people. But there is no question, we
think we will create about a half a million jobs, at least,
through the implementation, and we need to do more to train
people for that.
Senator Vance. So being mindful of time, Secretary
Raimondo.
Secretary Raimondo. Yes, sorry.
Senator Vance. I want to point to a particular set of
implementation criteria that, in light of the admitted labor
shortage, gives me some concern. So one of the administrative
directives says that applicants to CHIPS funding must, quote,
``Develop an equity strategy in concert with their partners to
create equitable workforce pathways for economically
disadvantaged individuals in their region''; additionally,
applicants must recruit from diverse sources of talent and,
quote, ``Set and publicly communicate goals for workplace
diversity.''
Now, I note, of course, that creating these diversity
mandates within a company actually requires additional costs.
You have to hire diversity consultants. You have to hire
additional human resources people. And so I guess I am
struggling to make sense of the fact that we apparently have a
shortage of skilled labor to manufacture chips on the one hand,
and yet the Secretary of Commerce is telling people that they
can only hire the people who check the right diversity boxes.
That doesn't make a ton of sense, and it seems to be
counterproductive to the goal of bringing this industry back to
the United States in the first place.
Secretary Raimondo. So first of all, there are no mandates.
Second of all, is it completely consistent----
Senator Vance. What would you call it, Secretary with--
Secretary Raimondo, when the Secretary of Commerce says: You
must do this in order to receive funding; if it is not a
mandate, what is it?
Secretary Raimondo. What is it that we are telling them
they have to show us a workforce plan, and we need to evaluate
that plan.
Senator Vance. They have to show us a workforce plan in
order to receive money from the Federal Government----
Secretary Raimondo. Absolutely.
Senator Vance.--and that is the definition of a mandate.
You must do X in order to receive Y dollars.
Secretary Raimondo. The mandate is----
Senator Vance. Let me make this point, Secretary Raimondo;
look, think about this from the perspective of a company that
is thinking about locating a chip fabrication facility in this
country or in China. From China, they get cheap labor, massive
subsidies, and a government that seems to want to work with
them. From the United States, they get a little bit of money
and a human resources statement that looks like it was written
by a 22-year-old gender studies graduate of Harvard or Yale,
which, let us be honest, it probably was written by a 22-year-
old gender studies graduate of Harvard or Yale.
Why would you locate your facility in the United States of
America when you get a human resources lecture from us, but
from China, you get a whole lot of money and a whole lot of
facilitation for your business? What is the market economy
here? Is it the economy that makes it hard to do business or
easier to do business? I am curious. Where would you locate the
facility given those two separate sets of criteria?
Secretary Raimondo. Sir, before I went to China, I talked
to about 120 CEOs of U.S. businesses, and they all told me that
China is becoming increasingly uninvestable. I think there is
no doubt that I would locate my business in the United States.
Senator Vance. I agree with you, and I agree these
companies should locate their business in the United States.
But we have to be careful. The reason that China has become
uninvestable is because it is very, very hard to get our money
out. But if we make it harder to do business, and if we pass
bipartisan legislation that puts money into American
manufacturing and then we make it harder to access it unless
you check the diversity box, we are going to be extremely
counterproductive.
I am mindful that I am at the end of my time. The last
point that I would make, Secretary Raimondo, the United States,
thank God, does not have a Chief Diversity Officer. I would
appreciate it if the Biden Administration didn't pretend to be
one. Thank you.
Secretary Raimondo. My job is to protect taxpayer money,
and in order to do that, these companies have to be able to
meet their mission, and in order to do that, they need to have
a trained workforce, and I am going to work with them to make
sure that happens.
Senator Vance. I don't think diversity mandates are part of
that.
The Chair. Senator Rosen.
Senator Vance. Thank you, Madam Secretary.
The Chair. Senator Rosen.
STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. Thank you, Madam Chair. I appreciate it. And
thank you for holding this important hearing. And Secretary
Raimondo, Director Panchanathan, thank you for your testimony
today. I really appreciate it.
I want to take a moment to recognize the work that
Secretary Raimondo, and Director Panchanathan have done to
implement the CHIPS and Science Act. You have half built a team
that has gone above and beyond, to quickly and efficiently roll
out these programs so that we can strengthen our STEM workforce
and bring good-paying jobs right here at home. To everyone's
point, that is what we want.
And so we have talked a lot about advanced manufacturing,
of course, we passed the CHIPS and Science Act, we have all
been talking about this. We want to bring manufacturing back to
America. We want to create those good-paying jobs here. And as
we do this, again, everyone is talking about creating the
workforce with the training and skills that are necessary. I am
proud to support that bill, and I am proud that it included
language that I drafted with Senator Blackburn to provide
funding, workforce education, training, and development in
advanced manufacturing. And this provision was based on my
bipartisan Advanced Manufacturing Jobs in America Act.
So Director, can you please provide us an update on the
implementation of the workforce provision?
And then, Secretary Raimondo, can you talk a little bit
after that about how we include our smaller communities and our
rural communities in being sure that they can grow in advanced
manufacturing?
Dr. Panchanathan. Thank you very much, Senator. Again, I
want to say it was a pleasure being in Reno, Nevada, announcing
the Regional Innovation Engine there. And I will come to that
in a moment. To answer your question, NSF received $200 million
over 5 years to establish workforce development plans focused
on microelectronics. But as you know, NSF is the STEM workforce
development agency for the country in all aspects of science,
technology, engineering, and mathematics, in terms of the
broad-based mandate which focuses on K-12, as well as
university, community colleges, and beyond.
So this $25 million investment in Fiscal Year 2023 and
Fiscal Year 2024 is focused on bringing up, as I said earlier,
training upwards of 100,000 new semiconductor researchers,
practitioners, technicians, and educators, fulfilling a key
need of the semiconductor industry through Fiscal Year 2027 and
beyond. So our funds have been used, primarily, in the
partnerships that we have had with Intel and Micron to scale
it, as well as the future of semiconductors program, as well as
computer science for U.S. program, and specifically focused on
microelectronic and semiconductor workforce development.
I am happy to talk more about this. In the interest of
time, I just want to make sure that I am respectful of the
overall time constraints that the Chair talked about. But I am
happy to say that in Reno, Nevada, we are involving the Truckee
Meadows Community College in training the talent toward lithium
mining, processing, as well as recycling. Thank you.
Senator Rosen. That is great. I have a lot to talk about
there, and we love our community colleges in Nevada.
Secretary Raimondo. Nice to see you, Senator. Just to
briefly add on to what Panch said. Last Friday, we put out an
additional funding application for small suppliers.
Additionally, as I have said earlier today, we are committed to
investing in or providing grants to small, medium, and large
semiconductor companies. In fact, as we have talked about, the
United States lost about 25 percent of its small manufacturers
in the past 25 years. Many of them are specialty chemical
companies or material companies. And so, we are very much
interested to partner with these companies in the CHIPS program
to build out the entire supply chain all over the United
States.
Senator Rosen. Well, Secretary Raimondo, I am going to
just--I know I have a minute left, so I am going to be very
quick. I want to build on this, in the rural areas and in the
mining areas that Director talked about too. I am a member of
the Senate Armed Services Committee. We are thinking a lot
about the national security implications of our critical
mineral supply chains. This state's minerals are in the ground
in rural Nevada. It is really important, we are the Nation's
leader in hard rock mining and battery recycling, and so,
talking about our workforce, talking about all the things we
can do, what more can Congress do to bolster our critical
minerals workforce, strengthen our supply chain, and of course,
for us, that is really going to help our small and rural
communities in Nevada?
Secretary Raimondo. I think we need to continue to focus on
it. We need a comprehensive national plan as it relates to
critical minerals, which is essential for electric vehicles and
semiconductors. We, at the Commerce Department, are trying to
build and have asked for, I think, $20 million to set up a
supply chain office in the Commerce Department so we can be
proactive, not just reactive, in identifying all of our holes.
Senator Rosen. Well, thank you. I look forward to working
on that.
Madam Chair, I made it with just right about on time. Thank
you so much.
The Chair. Thank you. Senator Schmitt.
STATEMENT OF HON. ERIC SCHMITT,
U.S. SENATOR FROM MISSOURI
Senator Schmitt. Thank you, Madam Chair. Welcome. Good to
see you. I want to get to just two or three topics, so I will
go kind of quickly. But as you know, the DoD is in the process
of evaluating commercial 5G use, and Madam Secretary, in use in
the lower 3. It is my understanding they have issued a report,
they have talked to you about it, they have shared it with you,
and also the NTIA, and there is a lot of hesitancy, I think,
for a variety of reasons from other agencies--for a variety of
reasons, of making additional spectrum available for commercial
use.
It is finite. So I think the collaboration is really
important, and you play an important role in advising the
President on this, as you know, and understanding what our
Nation's Spectrum Strategy ought to be, and what additional
Federal spectrum available for commercial use, whether it is
licensed shared, licensed, or unlicensed, what that ought to
be. So it is critical, I think, that you know, I serve on the
Armed Services Committee, too, in addition to this committee,
so there is a balancing act here, right? Not just national
security, but obviously economic security. What are you doing,
specifically, to have or evaluate a strategy here, and what
would you do tomorrow if DoD says the lower 3 are off limits
entirely?
Secretary Raimondo. I think that would be deeply
problematic. As we said earlier, we received the report at the
end of last week, and we should arrange a briefing for the DoD
and NTIA to come to provide that briefing on what their report
said. It is a balance, but economic competitiveness is national
security, and making sure we have enough spectrum available for
private sector innovation and 5G expansion is national
security.
And there are ways, if we are innovative, this shouldn't be
a zero-sum game. We can make more spectrum available, and also
not take anything away from the DoD that they need to fulfill
their mission.
Senator Schmitt. Madam Secretary, in August, you visited
China, shortly after it was revealed that the PRC had hacked
your e-mail account. And they were privy to all of your e-
mails. In an interview with CNN State of the Union, you argued
that you were firm and direct about the hack with the Chinese
counterparts. Do you think they viewed your visit as a sign of
weakness?
Secretary Raimondo. I do not.
Senator Schmitt. OK. Are you aware of additional Cabinet
members that you were e-mailing with that they were able to
access your e-mails from?
Secretary Raimondo. As you know, Senator, this is an active
investigation, so I don't want to go into that in this public
forum.
Senator Schmitt. Obviously, this is concerning, right?
Secretary Raimondo. No doubt. The hack was concerning, it
was unacceptable. I brought it up when I was there. It is more
than concerning.
Senator Schmitt. OK. I just want to switch things up a
little bit with the remaining time that I have. As it relates
to the BEAD Program, Senator Vance asked a couple of questions
in this regard. What does climate change have to do with
broadband?
Secretary Raimondo. Climate change has to do with
everything. Tell me your exact question.
Senator Schmitt. Well, I will be happy to. You ask, you
have climate change requirements, and that the NOFO states:
Eligible entities must account not only for current climate-
related risks but also for how the frequency, severity, and
nature of these extreme events may plausibly evolve as our
climate continues to change over the coming decades.
Secretary Raimondo. Yes.
Senator Schmitt. Can you tell me anywhere, anywhere though,
Madam Secretary, anywhere, where Congress has put into law that
you would require them to mitigate climate change? Can you
point to that section?
Secretary Raimondo. Congress requires us to be good
stewards of the taxpayer money and to be accountable----
Senator Schmitt. That is not my question. Where are you
drawing the authority from?
Secretary Raimondo [continuing]. And therefore we have to
fund projects that will be successful; otherwise, we will waste
money.
Senator Schmitt. So I understand you might think it is
important. I understand Joe Biden might think it is important.
But Congress hasn't actually said that is a requirement.
Secretary Raimondo. But you want us to fund projects that
will be successful, and if climate events prevent success for--
--
Senator Schmitt. How does deploying broadband in Branson,
Missouri, have anything to do with your climate agenda?
Secretary Raimondo. I will give you a great--well, no, but
for example, Senator, I talk to people all the time, including
in rural places, who tell me that due to climate events, their
current technology doesn't work, like they don't have the
Internet when there is a storm. So climate very definitely
affects the effectiveness of certain technologies that provide
the Internet to people.
Senator Schmitt. OK. I can tell you--yes, I can tell you,
having just been elected by a state with a large rural
population; they are interested in their kids being able to
access the Internet for homework. OK.
Secretary Raimondo. And that is the point that----
Senator Schmitt. They are not interested in your social
experiments, OK? So just in the line of Senator Vance's
question about, you know; injecting identity politics into your
applications, respectfully, how about we just deploy the
broadband so people can access the internet?
Secretary Raimondo. Well, your state will receive $1.7
billion, and your Governor will be providing us with a plan for
how he feels it should be invested.
The Chair. Senator Markey.
Senator Schmitt. Thank you.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you. And you have two of my all-time
favorite witnesses is here, so good to see you, Madam
Secretary, and Panch. You know, you know you are somebody when
you are a one-name wonder, like Beyonce, or Cher, or Bono.
[Laughter.]
Senator Markey. So with the explosive growth over the past
two decades, the semiconductor industry is a large contributor
to the climate crisis, releasing the equivalent annual
emissions of 1.4 million cars on the roads of the United
States. Carbon emissions and water consumption are particularly
intense for the production of the most advanced CHIPS. As the
Commerce Department prepares to issue $50 billion for chip
manufacturing in R&D, we cannot ignore the environmental impact
of this investment.
Secretary Raimondo, I was pleased to see that the
Department of Commerce is requiring chip companies to submit
climate and environmental responsibility plans in their
applications for the CHIPS Act funds. So Madam Secretary, I
understand that you are committing to ensuring that companies
make good on their environmental commitments. Is that right?
Secretary Raimondo. Yes, and it isn't social policy. It is
good business. Every CEO of every American company will tell
you they have to manage risk, and there is risk associated with
climate events, and if we don't plan for those climate events,
then they can insert risk into these projects, whether it is
broadband or chips. So this is--companies ought to design
projects to minimize adverse impacts to the project from
climate and the environment. This is just good business and
good taxpayer protection. It has nothing to do with the social
agenda.
Senator Markey. Oh. Great. So major manufacturing
activities, including chips manufacturing can also lead to
significant environmental justice concerns for communities
surrounding the manufacturing plants. Developing chips is an
incredibly water, energy, and chemically intensive process. The
chemicals currently used in semiconductor fabrication are
extremely dangerous to workers, community members, and their
families.
New technologies and processes are needed to manufacture
semiconductors without these risks. So can you tell us how you
are prioritizing that research so that it is truly green and
clean in the semiconductor fabrication technologies?
Secretary Raimondo. Yes. So in addition to companies who
are applying for taxpayer money, they have to show us a
financial plan, an R&D plan, a security plan, and we want to
see a sustainability plan that we can evaluate to make sure
that they are serious about these commitments.
Senator Markey. Yes. So we are going to open the Federal
taxpayers' wallets to private sector companies, but we can't do
so and close our eyes to the potential environmental harm to
the communities where they are going to be located. We can do
both at the same time.
Now, I want to move to the environmental impact of chip
manufacturer to the impact of chip use. So big data, machine
learning, and AI all require huge numbers of chip cutting-edge
semiconductors and create a significant environmental impact. A
study from the University of Massachusetts Amherst estimated
that the energy for developing one advanced AI algorithm out of
millions of potential models of algorithms would emit as much
CO2 as five cars over the algorithm's lifetime, and
that could be millions of algorithms that are out there.
Secretary Raimondo. Yes.
Senator Markey. So these data centers are using scarce
water supplies across our country for cooling these chips. And
while AI proponents argue that AI will solve most of our
pressing problems, the energy required to power this technology
is contributing to the biggest problem of them all, climate
change. So can you talk about how you are integrating your
thinking at Commerce on these issues as one solution to a set
of problems could actually exacerbate another even larger set
of problems?
Secretary Raimondo. It is such an excellent question, and
as you think about AI, and the compute power that is going to
be required for training these large models, it is much greater
than any of us thought. One area of innovation in chips is
making chips that consume less energy. And so the research and
development money that we will spend, the NSTC, I suspect much
of it will go to exactly this innovation, which is to say high-
compute chips that are much more energy efficient because
that--otherwise this won't be sustainable. If you think what we
need to do--match up what we need to do for sustainability with
the amount of compute power, we need to have new innovations.
Senator Markey. And I wish my mother could hear a Rhodes
Scholar tell me that I asked a good question. I wish you could
hear that, Ma.
And just finally on the labor front, the good jobs that we
are trying to create so that these families can thrive, have
good wages, health care benefits, and the Commerce Department
is going to be providing billions to these companies. And my
feeling is they should be required to maintain strong labor
standards for their workers, and non-union companies must
provide workers a free and fair chance to join a union, and
then bargain a good rate. Is that going to be the goal?
Secretary Raimondo. We agree.
The Chair. Senator Young.
Senator Markey. Thank you.
STATEMENT OF HON. TODD YOUNG,
U.S. SENATOR FROM INDIANA
Senator Young. Thank you, Madam Chair. Madam Secretary,
good to have you here. Dr. Panch, thank you. It is really
important that my colleagues have an opportunity to ask these
probing questions as it pertains to Implementation of CHIPS and
Science to make sure it is implemented consistent with
Congressional will and that we have effective administration.
So thank you for being here.
In your testimony, Madam Secretary, you highlight the
importance of being a good steward of taxpayer dollars. Can you
tell the Committee, in summary fashion, how you have worked
hard to be a good steward of taxpayer dollars as it pertains to
implementation of CHIPS and Science? And then advise members
who may be listening, because they ask me, how they can track,
on an ongoing basis, implementation of CHIPS and Science
dollars, in these investments?
Secretary Raimondo. OK. So as I said earlier, we have built
a team of over 100 people to analyze each of these
applications. Every company, in order to receive money, has to
show us a financial plan, has to show us their books of their
company, their research and development plan, their national
security plan, their workforce plan. And as you said earlier,
this has nothing to do with social policy.
This is ensuring that these companies can get the job done.
You don't want--I don't want my taxpayer money given to a
company that doesn't have a workforce plan and therefore can't
get the job done, so all of those requirements are designed to
do that. Furthermore, once we give the grant or structure the
grant, there will be like an agreement, a contract, a
compliance agreement. They are going to receive the money
contingent upon them doing certain things, and we will tranche
the money out on the basis of those milestones.
Senator Young. Thank you. I have had some visibility into
this process from the beginning, and worked with you and
members of your team who are implementing, and I know that you
have hired on incredible talent, people with Wall Street
experience, people who understand how much is needed for each
of the stakeholders, and therefore much of your work is focused
on making sure we don't overspend so that we have more
resources to spend more effectively, and can advance national
and economic security.
With respect to the Tech Hub Program, part of CHIPS and
Science, the Regional Tech and Innovation Hub Program, you have
spoken to this already, Madam Secretary. State of Indiana, we
have submitted an application called Heartland BioWorks, and if
designated, this would help cement Indiana's position as a very
important locus of biotech, medtech, genomics, and synthetic
biology innovation.
Secretary, Congress has only appropriated a portion of the
Tech Hubs Program funding. What opportunities are we missing,
especially in regards to leveraging private sector investment,
by not prioritizing full funding of this program?
Secretary Raimondo. Yes. First, I want to thank you because
you were a warrior to make sure this, the $500 million was in
there. It is authorized at $10 billion, so we are missing
massive opportunities. We have 400 applications from over 40
states, and we will only be able to make maybe five or six
sizable grants. As I said earlier, we will designate say 20
tech hubs, plus or minus, and every one of them is probably
worthy of maybe a $100 million. That right there is $2 billion.
So I think every bit of the $10 billion we could put to
work to stimulate high-quality tech hubs. Your application is
amazing, but then again, so are many of the others, and we will
be really missing out.
Senator Young. Sure. Dr. Panch, relatively, Senator
Heinrich and I recently introduced the CREATE AI Act to
establish the National Artificial Intelligence Research
Resource to serve as a testbed for the development of
artificial intelligence, and to help us harness the tech's
amazing potential. Are you supportive of this CREATE AI Act;
yes or no, sir?
Dr. Panchanathan. Strongly supportive, yes, yes.
Senator Young. Thank you. I have limited time, but if you
could expand on the importance of federally funded research,
including the National Science Foundation's National Artificial
Intelligence Research Institutes, I would appreciate that. And
then the importance of appropriating the CHIPS and Science
Act's research authorization, I would note, at a time we are
discussing artificial intelligence, and the critical importance
of this to our national security, the National Security
Commission on AI has recommended funding at $32 billion per
year beginning in Fiscal Year 2026, artificial intelligence. So
that lays a predicate for your response.
Dr. Panchanathan. So as you know, AI of today has been made
possible because of sustained investments, as I said earlier,
through AI winters, even, over several decades. Here we are
right now, and we have an adversarial competitor that is out-
investing in some of these areas. This is not the time to hold
back; this is not the time to discuss and debate; this is the
time to actually invest, out-invest, out-compete in every
aspect of what we need to do at AI.
And what we cannot have, and I just want to make this very
clear, what we cannot have is a situation like what we have in
semiconductors today, where we are trying to put the Band-Aids
and trying to get it back into what it needs to work. We cannot
lose that advantage in AI, or quantum, or advanced wireless, or
biotechnology, you name it. And I am extremely concerned that
we are not moving fast enough, because our competitors are
outpacing us. And yes, we have a strategic advantage; we will
not, and we should not, and must not lose it.
The Chair. Thank you.
Dr. Panchanathan. So thank you for all your support.
The Chair. Senator Baldwin.
STATEMENT OF HON. TAMMY BALDWIN,
U.S. SENATOR FROM WISCONSIN
Senator Baldwin. Thank you, Madam Chair. And welcome to
both of our witnesses today. Secretary Raimondo, I want to
thank you for your leadership in executing the Regional
Technology and Innovation Hub Program. This committee worked
very hard to craft that program, and the Appropriations
Committee, on which I also sit, provided the initial funding to
get this program up and running. And I have heard you loudly
and clearly that we need to follow through with significant
additional funding in the years to come.
As you know, Wisconsin worked hard to submit one sole
application focused on bio-health and personalized medicine
technology with a significant private-sector partnership and
investment. As you also know, we have a rich history of
innovation, world-class research institutions, and robust
manufacturing, as well as a very strong workforce and work
ethic. Wisconsin is poised to become a growth sector in this
cutting-edge and valuable industry. I do not envy your team's
task as you look through multiple applications, but I would
have been remiss if I had not also highlighted our application,
as many of my colleagues have today.
Now, shifting a bit, but not much, one of the fundamental
issues that the CHIPS and Science Act aims to address is the
too common occurrence of our American companies doing cutting-
edge research and development in the United States and then
manufacturing their product elsewhere. That is the story of the
semiconductor in a nutshell, and part of why the CHIPS Act was
necessary in the first place.
Now, current law requires inventions that stem from
federally funded research to be manufactured in the United
States, but that requirement is often waived and literally
approved with just a rubber stamp. For example, a 2022
investigative report found that breakthrough battery
technology, invented in a Federal lab and paid for with
taxpayer dollars, was licensed by the Department of Energy to a
Chinese company and manufactured in China.
Now, I know you are not here from the Department of Energy,
but the Department of Commerce has an incredibly important role
to play in the solution. Now, earlier this summer, President
Biden signed the Invent It Here, Make It Here Executive Order.
It bears a striking resemblance to legislation I introduced
earlier this year with Senator Vance, which we called the
Invent Here, Make Here Act. Great minds think alike, that is
what I will say.
Our legislation goes a little bit further than the
executive order; it actually forbids licenses from being
granted to countries of concern, as defined in CHIPS and
Science, to include the PRC, among others. So given your role
in carrying out the executive order and the duties Congress
granted you in the CHIPS and Science Act over
commercialization, I am interested to know your thoughts on the
issue and the need for legislative action in this arena?
Secretary Raimondo. Thank you. So first of all, I fully
agree with you that that is what happened with semiconductors,
right. We used to make them in America, and in search of cheap
labor, it all fled our shores, and look at where we are now. So
I strongly support what you are trying to do. I also assure you
there is no rubber stamping in these waivers.
We have to be practical; not everything is made in America;
not everything can be made in America. However, we had a
fantastic visit in Kenosha; that is a perfect example of
because we, at the Commerce Department, have been holding their
feet to the fire of those companies, we said we are not going
to give you a waiver; we don't believe we need to, and they
found a way to manufacture in your state.
Senator Baldwin. And I just want to make the distinction
between Buy America policies that say when we build out
broadband, as you announced in Kenosha, Wisconsin, that we
can't necessarily source, you know, from Nokia if they are not
going to make it here. But you and, with the Buy America
language, persuaded them to bring those jobs and that
technology to the U.S. But here we are talking about new
inventions funded by taxpayer dollars, and I feel we have a
special obligation as stewards of our tax dollars to keep the
manufacturing here.
Secretary Raimondo. Absolutely. No, no, I agree.
The Chair. Senator Capito.
STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM WEST VIRGINIA
Senator Capito. Thank you, Madam Chair. And thank you both
for being here with us today, kind of a long afternoon.
Secretary Raimondo and Dr. Panch, I guess I can call you that.
I did vote for this bill because I think it is very critical.
Secretary Raimondo, thank you for all of what you have done in
broadband. We are looking forward to rolling this out. You and
I have talked about this more than a few times, and you know
how very important it is, not just to me, but to the rest of
the country.
So I have been really interested to hear that your agency,
the Department of Commerce, has run into an unexpected hurdle
in implementing CHIPS, and that being the NEPA process. Well, I
am on the EPW Committee; I am the Ranking Member, and this is
an issue; it doesn't matter if it is chip manufacturing,
broadband development, transmission, energy exploration,
everything is being held up by the NEPA process, the permitting
process, and often the ensuing litigation delays that come
forward.
So then I heard that there is an--I mean, Senator Cruz has
an amendment with Senator Kelly to exempt the NEPA process for
the fabs for this particular bill, that would exempt the NEPA
process; is that correct? And you spoke in favor of that?
Secretary Raimondo. Yes.
Senator Capito. How does this administration, with you as
their representative, actually square exempting one industry
over another when it is holding up progress in all of National
Security, energy security, communication, everything? Why would
that be a good idea, and how can this Administration think that
is a good idea?
Secretary Raimondo. I can only speak to chips, and what I
said earlier was sometimes these processes could take 10 years
or 8 years.
Senator Capito. Right. Right.
Secretary Raimondo. And each of these would be for chips,
it is a national security imperative. So what we are doing--but
of course, I want to be crystal clear, we have to maintain
basic environmental protections, and we will as we build out
these manufacturing facilities. We are not looking to get rid
of environmental protections; we are just looking to have a
more streamlined process so we can----
Senator Capito. OK. We agree on that. I am not getting--I
am not into eliminating environmental protections, but the
length of all these projects, I would say to you, energy
security is just as important as chip security. I would say
transmission in this country is just as important as something
that does with manufacturing chips. And then if you are going
to manufacture the chips, you have got to mine them, and
recover them. And that means you have to permit the mine.
If you look at arsenic, which is used in chips, 97 percent
of that is from China. If you look at cobalt 70 percent of that
is from China, rare earth elements, 60 percent of that is from
China, 10 percent from the United States, titanium, 86 percent
from Japan, noble gases are from Russia and Ukraine, but we
have these resources in this country, but we can't get these
mines to permit.
So how are you going to go from permitting the fab when you
can't get the material materials permitted? There is a
disconnect here. And you know I would be fine to try to work
this disconnect out because, as I said in the beginning, I
think this is exceedingly important for our future.
Secretary Raimondo. Yes, as you say, this is complicated,
and there is a balance. I know that the Chair, in a bipartisan
way, has worked on an amendment in the NDAA as it relates to
chips. I am no way saying that these other issues aren't also
so important and they, you know, merit further discussion.
Senator Capito. Well, I mean, I just think it is rather
ironic the administration would actually make an exception for
something they consider a marquee plan for them, albeit, in the
best interest of the country when there is these other things
that I think, politically, are more difficult to touch that
they wouldn't look for the streamlining of permitting, which
should be fair and even across the board without giving up any
environmental controls. I sit on the Committee that does this.
I have been very strong on air and water all the way through,
but there is a better way to do it.
Let me just ask you one quick question, and then you can
respond. I think you have been asked this before, but I do
obviously have my West Virginia Tech Hub application in, and we
are all putting our foot on the scale for our own projects. I
understand the program requires one-third of Tech Hub Grants
and designations must significantly benefit a small and rural
community, so that means one out of the three hub designations
under phase two would be awarded to rural communities; is that
a safe statement?
Secretary Raimondo. One--yes.
Senator Capito. OK, yes, one-third?
Secretary Raimondo. Rural, right, one third--the statutory
requirement is one-third in rural or small communities, yes.
Senator Capito. OK. So that is still the plan?
Secretary Raimondo. Yes. Yes.
Senator Capito. OK. Thank you.
The Chair. Thank you. Senator Sinema.
Senator Capito. All right. Sorry.
STATEMENT OF HON. KYRSTEN SINEMA,
U.S. SENATOR FROM ARIZONA
Senator Sinema. Thank you, Chair Cantwell.
The Chair. Two people left, just hurry, if we can. Thank
you so much.
Senator Sinema. Well, thank you for our witnesses joining
us today, and I am proud to play the central role, in ensuring
that the historic CHIPS and Science Act was signed into law. A
year later, the positive impact on our economy and national
security is clear, and nowhere is this more evident than in my
state, Arizona. You know, we have led on CHIPS since the 1940s,
and we will continue to lead with the help of the CHIPS and
Science Act.
I was delighted to see the Department of Defense select
Arizona State University's Southwest Advanced Prototyping Hub
as the first and largest allocation from the law to continue
its great work accelerating micro-electronic research and
development. In fact, since 2020, Arizona has led the Nation in
semiconductor investment. This includes major projects from
Intel and TSMC.
These investments are essential, but Arizona's leading
semiconductor manufacturing ecosystem is built on the hundreds
of chip-related companies working at all phases of the
manufacturing lifecycle, as well as the academic institutions,
workforce training programs, and small businesses that make it
possible.
And that is why it was so important to address
semiconductor manufacturing holistically. You know, there was a
time when it looked like the scientific development portions of
the law would fall victim to partisan fighting, and thankfully,
Senator Young, myself, and other members worked across the
aisle to make sure that didn't happen.
So turning to our witnesses, I want to first start by
welcoming and recognizing my friend and fellow Arizonan, Panch,
and the amazing work that you are doing at NSF.
Dr. Panchanathan. Thank you.
Senator Sinema. You know, I got to see your work advancing
education, science, and innovation firsthand at ASU, and in the
senior advisory roles you played in our state government, and
now I see that same dedicated insight implementing this
legislation at the Federal level. So thank you, Panch.
Dr. Panchanathan. Thank you.
Senator Sinema. My first question for you is that the
workforce provisions of the law, including the CHIPS for
America Workforce Education Fund, are essential to building a
healthy economy and fueling rewarding careers. Can you just
briefly comment on how the NSF funding, along with public-
private partnerships have helped to get resources where they
are needed, specifically in Arizona?
Dr. Panchanathan. Thank you very much, Senator Sinema. It
is truly a pleasure to hear from you, and you are just taking
me back to the years in Arizona by what you said. So it is
always a pleasure. The workforce investments that we are making
through the CHIPS and Science Act, is a total of $200 million
over 5 years, this year it is $25 million, we are focusing on
ensuring that pairing up with the investments by Intel and
Micron as our partners who are co-investing with us, are being
deployed in ensuring that we are training the workforce.
Not only in terms of what we do with community colleges and
universities, but also training the trainers, namely the
teachers in K-12 institutions, so that we have this pipeline of
talent ensured for times to come. So we are working on all of
those component parts as we are thinking about deploying these
resources. We are also working on some projects which are
focused on internships with industry, as well as making sure
that upskilling, reskilling efforts are also invested in. So it
is a comprehensive investment of what we are doing with CHIPS
and Science, as well as the main investments of NSF, which has
always prioritized key technologies like semiconductor
technologies.
So we are very happy, and we are looking forward to the
outcomes, which is very important at this time when there is so
much of a need for a trained, skilled technical workforce in
semiconductors, as was pointed out by many of the senators
today. So thank you so much for your support and championship
of this CHIPS and Science Act.
Senator Sinema. Well, thanks so much, Panch.
Secretary Raimondo, I appreciate the vision you outlined
today for the Department's economic and national security
priorities, at the heart of the CHIPS and Science Act. To keep
pace with these goals, like establishing large-scale clusters
of leading-edge logic fabs, while ensuring supply chain
resilience and a robust American workforce, the chip projects
must actually be funded to be workable.
Unfortunately, the NEPA reviews currently required for
CHIPS grants could slow down the fund dispersal to grantees and
prevent actual construction by 2 years or more from the date
the Department decides to start an environmental impact. This
is a huge barrier to bringing new capacity online with the
urgency required. Thankfully, I worked this summer to include
our bipartisan provisions in the NDAA that would streamline
Federal reviews while keeping environmental protections in
place.
You testified previously before the House Science Committee
that you support this language, and I just want to check with
you: Do you still support it?
Secretary Raimondo. Yes.
Senator Sinema. Great. Madam Chair, I have follow up
questions that I will send over to the Secretary and to Panch.
But in the interest of time, I will yield back for another
member.
The Chair. Thank you so much. Senator Budd.
STATEMENT OF HON. TED BUDD,
U.S. SENATOR FROM NORTH CAROLINA
Senator Budd. Thank you, Madam Chair. Secretary Raimondo,
thank you for being here. Thank you both for being here.
The Commerce Department has a lot of important rollout
responsibilities with the CHIPS and Science Act and the
Broadband, Equity, Access and Deployment, or the BEAD Program,
we have talked a lot about that here today. So I hope that you
would agree that your Department needs to carefully adhere to
Congress' intent in both of those laws.
Unfortunately, serious concerns are coming to light about
this administration's handling of $65 billion going to
broadband. Over the summer, the Commerce Department's Inspector
General issued an alert stating that Commerce is failing to do
basic checks, resulting in potential unlawful duplication.
Recently, The Wall Street Journal reported that Commerce-funded
broadband will cost more to bring broadband to a home than the
assessed value of that home. That is The Wall Street Journal.
And 2 weeks ago, after months of letters from my colleagues
and I, with concerns that have been ignored, we released a
report that found this administration is unlikely to reach all
connected Americans with broadband. Now, this is due in large
part to this administration's extreme bias against non-fiber
technologies, technologies like fixed wireless, and satellite
broadband, and then also its allocation of funding to parts of
the country that already have high-speed broadband, like right
here in Washington, D.C., unfortunately.
And as the report went on to uncover, the Department of
Commerce allocated Washington, D.C. more than $547,000 per
unserved location. 33 percent of those locations are at the
national zoo. This is a waste of taxpayer money. I think that
most taxpayers would be horrified by the prospect of spending
upwards of $100,000 or $200,000 to connect a single location,
especially when many of these homes could be connected by
alternative or innovative technologies at an exponentially
lower cost to taxpayers.
So the question: Would it be better for taxpayers to spend
$200,000 on a fiber connection to a single home that is worth
$50,000? That is $200,000 to connect it; that is a connection
fee and cost to a home worth $50,000? Or would it be better to
spend $500 connecting that house to high-speed satellite?
Secretary Raimondo. Thank you, Senator, for your question.
First, I want to say the statute provides for 100----
Senator Budd. Yes. Let us just go back. Thank you. Thank
you for the elaboration. I know it is into the day, but if you
could just answer: Is it better to spend $200,000 on a $50,000
house, or is it better to spend $500 connecting it to
satellite?
Secretary Raimondo. It depends on the quality. The five-
year----
Senator Budd. So you are saying it might be worth spending
$200,000 of everyone's taxpayer money to connect to a $50,000
house when you could do it for $500. Did I hear that correctly,
madam?
Secretary Raimondo. First of all, this isn't my decision.
Your Governor in your state will provide a plan. Our job is to
make sure that at the end of that plan, every single North
Carolinian, regardless of where they live, has high-quality,
affordable internet.
Senator Budd. Look, I appreciate that, but I don't need to
be spending $200,000----
Secretary Raimondo. Low-quality satellite doesn't help
anyone.
Senator Budd. Here is what is happening. Let me get to the
point. Thank you, madam. Would it be worthwhile, because here
is what is actually happening: Would it be worthwhile for
taxpayers to spend $200,000 on a fiber connection to a mansion
that is worth $5 million?
Secretary Raimondo. Nobody says fiber has to be used, and I
doubt the mansion is unconnected.
Senator Budd. Well, there seems to be a bias toward fiber.
That is what is happening. It is happening right now because
the Biden Administration, it has shunned wireless and satellite
alternatives. Further, Biden's BEAD rules allow taxpayers'
subsidies to go toward building fiber to mansions and vacation
homes. These rules prohibit states from funding nonfiber
projects, except in extreme situations.
Now, these are extreme situations, which you may have begun
to elaborate on, but unless they get a waiver, a waiver from
the Federal Government to do the alternative. So I urge you to
eliminate tech bias from your rules, and put in sensible limits
that would stop subsidizing millionaires.
And in my remaining time, Madam Chair, I would like to
mention this report put out by the Ranking Member, the Red
Light Report, which is to stop waste, fraud, and abuse in
Federal broadband funding. And I would like to submit it for
the record.
The Chair. Without objection.
[The information referred to follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
Senator Budd. Thank you. And I yield back, Madam Chair.
The Chair. Thank you. I don't see Senator Sullivan. I know
he wanted to ask questions, but I don't see them on the screen.
So I am just going to ask a few and then wrap it up here so
that you can get on to these meetings that you both have.
Secretary Raimondo, supply chain resiliency depends on
security. So there is a lot of discussion around here in the
last several months about how to best get that, particularly
when you are--it could be backdoor attempts to information and
communication technology, and data that can be used illegally
for surveillance, or espionage, or various things.
We have looked at this issue and suggested--well, and had
been suggested to us from the Administration that something
like the GUARD Act, which would give Commerce--when we think
about this information age in technology and export and import
controls, one thing is clear: We need a little better tool on
the control of flow of what could be a backdoor of information,
or information that is just used in a way for purposes not
friendly to our country, like illegal foreign surveillance.
So we are concerned about targeting of military members,
their families, immigrants. What do you think we should do
about this? And what do you think about the GUARD Act proposal?
Secretary Raimondo. I am very supportive of the GUARD Act
proposal, I am often asked, should we outlaw TikTok? This is
bigger than TikTok. Certainly, TikTok poses national security
risks, to be clear. But we need a comprehensive plan to update.
As you say, the threats are different today than they were 10
years ago. And so the right way to do this is to have--to
empower us with a statutory set of tools to have a
comprehensive approach to these connected apps that pose the
national security risks, to say, TikTok, and others. And so I
am supportive of attacking it in a comprehensive, statutory
way.
The Chair. And so, appreciate that.
Director Panch, we are oversubscribed on the NSF side. We
are oversubscribed. How do we from a--I suggest that we have
more conversation about this, but how do we, from a scientific
side, tell our colleagues on the Appropriations side that there
is so much in the pipeline that could--I love all these
questions about both where we go, because obviously the bill is
about creating a distributed generation of R&D. And we already
are pretty distributive, pretty competitive way better than a
top-down model of say, other countries.
But I always say that two guys named Bill created our
economies: Bill Boeing and Bill Gates, right? So you never know
where the next Bill is going to come from.
Dr. Panchanathan. Exactly.
The Chair. And so that is why we want a more distributed
generation of R&D. But what are we going to do about the
shortfall with our appropriators that there is so much in the
pipeline that could be effective?
Dr. Panchanathan. At so many levels. I am so glad, Chair
Cantwell, you have been a strong supporter and a champion of
the CHIPS and Science Act. And I know how hard you worked, so
thank you very much. On behalf of the Science and Technology
Community, we owe you a debt of gratitude, and all the folks
that supported this.
So I just want to say that, let me take the basic research
paradigm: 50,000 proposals, we fund 11,000 of them, 20,000 of
them are being told that we should fund them. They are highly
meritorious. We are leaving them on the chopping floor, which
means a huge loss. And our competitors are taking advantage of
that.
On the Regional Innovation Engines and Regional Technology
Hubs that the Secretary talked about, they have 400 proposals.
We had 700 proposals. And then we had another 130 proposals in
type 2. We are not going to be able to fund all the top-quality
proposals that need to be invested in. These are ideas that are
being left behind.
The Chair. Here is what I suggest, that we get an answer
from the scientific community about the science necessary on
these proposals. Like, yes, you get an A on your paper. It is
definitely where we should be investing. But we don't have the
resources.
Dr. Panchanathan. Yes. Yes.
The Chair. That is what I think we need, not that we want
some people to have failing grades on these proposals, but so
that we are prioritizing and people can see that this is really
needed.
OK. This hearing will remain open for--the record will
remain open for 4 weeks, until November 1, 2023. Any senators
liking to submit questions for the record can do so two weeks
from now, by October 18. And we ask that responses to this be
done by November 1.
So thank you to the witnesses, thank you to all our
colleagues. We kind of had a double feature today in the
Committee, but we had very good attendance at both, which I
think it shows the interest of members, particularly this
afternoon in this very important legislation. Thank you both
for your tremendous leadership on America's competitiveness. We
are adjourned.
[Whereupon, at 4:46 p.m., the hearing was adjourned.]
A P P E N D I X
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
______
National Science Foundation
March 30, 2023
Hon. Dan Sullivan,
United States Senate,
Washington, DC.
Dear Senator Sullivan:
Thank you for your letter of February 1, 2023, regarding the U.S.
National Science Foundation's (NSF's) funding for research in advanced
energy and industrial efficiency in support of our national security
and global economic competitiveness.
With the passage of the CHIPS and Science Act of 2022, Congress put
in place a roadmap for accelerating and expanding the Nation's research
enterprise and creating opportunities for innovation in communities
throughout the country. The law positions NSF to capitalize on the
American research ecosystem comprised of academia, private industry,
the Federal government, and other partners to quickly translate
research in key technology areas into impacts that benefit the Nation.
One of those key technologies is advanced energy, and NSF recognizes
that our Nation's future depends on winning the research, innovation,
translation and education race to transform the energy sector. NSF
advances our energy future through investments in fundamental research
that transforms energy systems and enables new energy industries;
innovation to move discoveries to the market and society quickly; and
education and workforce development, with a focus on preparing for the
energy jobs of the future. NSF's energy investments complement and
align with our investments in infrastructure resilience and
sustainability.
NSF's investments in energy technology support high-risk, high-
reward research ideas across the science and engineering spectrum that
create broad new understanding and enable future innovations. For
example, starting in the 1970s and 1980s, NSF provided support to Dr.
John B. Goodenough and Dr. Stanley Whittingham for research that led to
the development of the lithium-ion battery and was honored with a Nobel
Prize in 2019.
Current investment in advanced energy research continues to expand
scientific foundations to change paradigms and spawn innovations for
our Nation's future energy supply, distribution, storage and use. They
span a wide range of research that will lead to improvements in
generation, conversion, storage, and distribution of electricity and
fuels. NSF-funded researchers are pursuing breakthroughs in advanced
energy sources, such as plasma-assisted ignition of hydrocarbon
mixtures at the University of Texas at Austin; development of new
energy materials; more efficient energy usage, including industrial
efficiency; understanding social, behavioral, and economic aspects such
as barriers and opportunities for technology adoption; as well as
research related to infrastructure and systems, such as sustainable
transit/vehicle technologies, building efficiency, sustainable
computing, decarbonized manufacturing, and interconnected natural,
human-built, and social systems.
NSF supports transformative, large-scale research on foundational
and use-inspired challenges through programs for Centers for Chemical
Innovation, Expeditions in Computing, Engineering Research Centers,
Industry-University Cooperative Research Centers, and others. NSF-
funded research centers play a key role in bringing researchers
together to tackle challenges across the innovation landscape,
including in advanced energy. For example, researchers at NSF's
Engineering Research Center (ERC) led by Utah State University with
Purdue University, the University of Colorado, and the University of
Texas at El Paso are developing technologies for roadway
electrification, and an ERC led by Purdue University is working on
conversion of light hydrocarbons to chemicals and transportation fuels.
With our investments in unique funding opportunities and
partnerships that foster co-design, co-creation, piloting, and
prototyping, NSF also accelerates the translation of research results
to the market and society, catalyzing a broad spectrum of advanced
energy technologies and systems. NSF speeds translation of fundamental
discoveries in advanced energy into technologies and systems through
center programs with industry partners and through the NSF Lab-to-
Market Platform comprising Partnerships for Innovation, NSF Innovation
Corps (NSF I-CorpsTM), and the Small Business Innovation
Research and Small Business Technology Transfer (SBIR/STTR) programs.
NSF-funded small businesses are developing technologies and materials
for new batteries, lithium battery recycling, carbon dioxide
conversion, advanced solar, fusion and electromagnetics, and
technologies that reduce energy intensity and resources. For example,
Syzygy Plasmonics, an NSF-funded small business, is developing a
photocatalytic reactor designed to electrify chemical manufacturing.
The Houston-based company's reactor is powered by light instead of heat
and operates at a lower temperature than conventional chemical reactor
technology.
NSF will continue to attract, inspire, educate, train and reskill/
upskill individuals, from K-12 to college and industry, to grow a
diverse and engaged advanced energy across the Nation. For example, the
Advanced Technological Education Network for Utilities and Energy
Technical Education project at Northeast Wisconsin Technical College
seeks to address current and anticipated utility and energy industry
workforce and training needs. This project is supported by the NSF
Advanced Technological Education (ATE) program, which supports the
education of technicians for the high-technology fields that drive our
Nation's economy, with a focus on two-year institutions of higher
education.
We greatly appreciate your interest in the work of the National
Science Foundation. Please feel free to contact Amanda Hallberg
Greenwell, Head of the Office of Legislative and Public Affairs, at
(703) 292-8070 if you have any additional questions.
Sincerely,
Sethuraman Panchanathan,
Director.
Identical letter to:
The Honorable Roger F. Wicker
The Honorable John Cornyn
The Honorable Todd Young
______
Associated Builders and Contractors
October 4, 2023
Hon. Maria Cantwell,
Chair,
U.S. Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Hon. Ted Cruz,
Ranking Member,
U.S. Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Chairman Cantwell, Ranking Member Cruz and Members of the U.S. Senate
Committee on Commerce, Science, and Transportation:
On behalf of Associated Builders and Contractors, a national
construction industry trade association with 68 chapters representing
more than 22,000 member companies, we thank you for holding the
hearing, ``CHIPS and Science Implementation and Oversight.''
As the committee continues to lead Congress' oversight of the
implementation and oversight of the CHIPS and Science Act by the U.S.
Department of Commerce and the National Science Foundation, ABC will
comment on specific policies that the department is pursuing outside of
congressional authorization/intent.
Implementation of the CHIPS and Science Act and Project Labor
Agreements
The CHIPS and Science Act provides $39 billion in Federal grants,
loans and loan guarantees to rebuild America's semiconductor
manufacturing capacities and allows companies a 25 percent advanced
manufacturing investment tax credit.
We are concerned with the Department of Commerce National Institute
of Standards and Technology's promotion of policy \1\ that seems to
give priority consideration to private-sector stakeholder applications
for the CHIPS Incentives Program's Commercial Fabrication Facilities
Notice of Funding Opportunity,\2\ which pledges to require its
construction contractors to execute a project labor agreement with
various construction trade unions while building a semiconductor
manufacturing facility.
---------------------------------------------------------------------------
\1\ See page 21 of the Commerce Department's National Institute of
Standards and Technology's CHIPS Incentives Program--Commercial
Fabrication Facilities--Notice of Funding Opportunity 2023-NIST-CHIPS-
CFF-01, released Feb. 28, 2023: https://www.nist.gov/system/files/
documents/2023/02/28/CHIPS-
Commercial_Fabrication_Facilities_NOFO_0.pdf.
\2\ See https://www.nist.gov/chips/notice-funding-opportunity-
commercial-fabrication-facilities.
---------------------------------------------------------------------------
A PLA preference policy in the Department of Commerce's grant
program could undermine congressional authority, as the bipartisan
CHIPS and Science Act contained no such language and jeopardizes public
investment in semiconductor manufacturing facilities. Its inclusion
will further exacerbate a shortage of construction industry skilled
labor; discourage competition from quality large, small and
disadvantaged construction businesses; and needlessly increase
construction costs for applicants at the expense of taxpayers and
national trade and security objectives.
A PLA is a jobsite-specific collective bargaining agreement unique
to the construction industry that typically requires companies to agree
to recognize unions as the representatives of their employees on that
project, use the union hiring hall to obtain most or all construction
labor, exclusively hire apprentices from union programs, follow union
work rules and pay into union benefit and multiemployer pension plans
that nonunion employees could not access. This forces employers to pay
``double benefits'' into their existing plans and union plans, puts
them at a significant competitive disadvantage and exposes them to
unfunded multiemployer pension plan liabilities. In addition, PLAs
typically require construction workers to pay union dues and/or join a
union if they want to receive union benefits and work on a PLA project.
If they do not satisfy these stipulations, nonunion workers lose an
estimated 34 percent of their wages and benefits to union coffers and
benefits plans--making them the victims of wage theft.\3\
---------------------------------------------------------------------------
\3\ McGowan, John R., Ph.D., CPA, Government-Mandated Project Labor
Agreements Result in Lost and Stolen Wages for Employees and Excessive
Costs and Liability Exposure for Employers, October 2021.
---------------------------------------------------------------------------
When mandated as a result of government policy, PLAs exacerbate the
construction industry's estimated skilled labor shortage of more than
half a million workers in 2023 \4\ by unfairly discouraging competition
from quality nonunion contractors and their employees, who comprise
88.3 percent of the private U.S. construction industry.\5\
---------------------------------------------------------------------------
\4\ See www.abc.org/wfshortage.
\5\ See bls.gov Union Members Summary, Jan. 19, 2023, https://
www.bls.gov/news.release/union2.t03.htm.
---------------------------------------------------------------------------
In addition, PLAs can interfere with existing union collective
bargaining agreements. This may prevent some unionized firms from
competing for a project, because they are prohibited from using labor
from signatory unions not included in the jobsite's PLA, which is why
some union organizations and contracting groups oppose government-
mandated PLAs.
Multiple studies of hundreds of taxpayer-funded affordable housing
\6\ and school construction \7\ projects found that government PLA
mandates increase the cost of construction by 12 percent to 20 percent
compared to similar non-PLA projects already subjected to prevailing
wage regulations.
---------------------------------------------------------------------------
\6\ Ward, Jason M., The Effects of Project Labor Agreements on the
Production of Affordable Housing: Evidence from Proposition HHH. Santa
Monica, California. RAND Corp., 2021. https://www.rand.org/pubs/
research_reports/RRA1362-1.html.
\7\ See five studies, available at https://buildamericalocal.com/
learn-more/#gmpla-studies, measuring the impact of PLA mandates on
public school construction already subject to state prevailing wage
laws in Connecticut (2020), Massachusetts (2006), New Jersey (2019),
New York (2006) and Ohio (2017) by the Beacon Hill Institute (http://
beaconhill.org/labor-economics/); an October 2010 report by the New
Jersey Department of Labor and Workforce Development, Annual Report to
the Governor and Legislature: Use of Project Labor Agreements in Public
Works Building Projects in Fiscal Year 2008 (https://www.nj.gov/labor/
forms_pdfs/legal/2010/PLAReportOct2010.pdf); and a 2011 study by the
National University System Institute for Policy Research, Measuring the
Cost of Project Labor Agreements on School Construction in California
(http://www.nusinstitute.org/assets/resources/pageResources/Measuring-
the-Cost-of-Project-Labor-Agreements-on-School-Construction-in-
California.pdf).
---------------------------------------------------------------------------
Simply put, hardworking taxpayers could get less and pay more as a
result of pro-PLA policies. In contrast, taxpayer dollars are spent
responsibly by letting the market determine if a PLA is appropriate and
fostering fair and open competition among the best contractors and
skilled workers in America.
While ABC outright opposes the NOFO's PLA preference policy, we
appreciate the NOFO's inclusion of an alternative in the form of
workforce continuity plans.\8\ We urge the Department of Commerce to
clarify whether developers who utilize this PLA requirement alternative
would be penalized in their application process and if preference would
be given to those applications with PLAs included. As outlined above,
the department must consider the negative impacts on competition and
industry labor challenges that discouraging more than 88 percent of the
construction workforce from competing on CHIPS Act projects would
cause.
---------------------------------------------------------------------------
\8\ See page 53 and 54 of the NOFO under part b. Construction
Workforce Plan: https://www.
nist.gov/system/files/documents/2023/06/23/CHIPS-
Commercial%20Fabrication%20Facilities
%20NOFO%20Amendment%201.pdf
---------------------------------------------------------------------------
Effects of the CHIPS Act's Restrictive Labor Requirements
On Aug. 8, 2023, the U.S. Department of Labor released a final
rule, Updating the Davis-Bacon and Related Act Regulations, which makes
drastic revisions to the Davis-Bacon Act and Related Acts regulations
that apply to Federal and federally assisted construction projects
funded by taxpayers.
The DOL's final rule, effective Oct. 23, 2023, mostly disregards
the feedback of ABC contractors, construction industry stakeholders and
thousands of small businesses urging the withdrawal of this
unnecessary, costly and burdensome regulation. Instead, the DOL is
moving forward with dramatic changes to prevailing wage regulations,
reversing much-needed reforms and unlawfully increasing the regulatory
burden on small businesses, new industries and public works projects.
Included in the legislative language of the CHIPS and Science Act--
unlike the PLA issue noted above--Davis-Bacon Act requirements will
have inflationary and anti-competitive effects on projects. Less
competition from small businesses and nonunion firms caused by the
misguided inclusion of Davis-Bacon requirements--coupled with the
recent controversial Davis-Bacon Act rulemaking--will result in less
return on investment in taxpayer dollars and could lead to project
delays.
The Department of Commerce must consider the unnecessary cost
increases that will be imposed by existing Davis-Bacon Act
requirements. Additionally, ABC urges the department to consider the
impacts the numerous, drastic changes imposed by the August 2023 Davis-
Bacon rule on the costs of the projects funded by the CHIPS and Science
Act and how the new regulation may restrict the ability of small
businesses' opportunities to compete on those projects.
Thank you for your consideration of ABC's concerns.
Sincerely,
Kristen Swearingen,
Vice President, Legislative & Political Affairs.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Hon. Gina M. Raimondo
CHIPS Supply Chain
One of the most critical reasons we passed CHIPS was because of the
semiconductor shortages spurred by the 2020 pandemic. Lifesaving
medical devices like pacemakers couldn't get chips. Consumers saw car
prices rise as much as 40 percent. In the State of Washington State,
truck manufacturer PACCAR was forced to leave unfinished trucks in the
lots because they didn't have access to semiconductors. That's why
Congress acted to invest in reshoring production of semiconductors.
Question 1. How is the Department using CHIPS funds to ensure a
future pandemic, natural disaster, or other crisis won't cripple our
supply chains?
Answer. While COVID-19 was unprecedented, it revealed structural
problems with semiconductor supply-chain management that will endure
unless actively addressed. Firms both upstream and downstream of
chipmakers typically have limited visibility into their supply chains,
often having knowledge of only their immediate customers and suppliers.
Purchasing often involves the use of third-party distributors and
short-term purchase contracts. These features make it difficult for
companies to assess supply chain risks and to diagnose and address
shortages as they arise. In addition, current generation and mature-
node production is geographically concentrated, with East Asia
accounting for the majority of global capacity in the legacy space and
the Chinese government actively subsidizing additional investment in
legacy production.
As outlined in the Commerce Department's ``Vision for Success:
Commercial Fabrication Facilities'' paper, the Department's four
strategic objectives include:
First, for leading-edge logic, our goal is to both design
and produce the most advanced chips here, in the United States,
by the end of the decade. Right now, we manufacture zero of the
world's most advanced chips on our shores. Specifically, by the
end of the decade, the United States will have at least two new
large-scale clusters of leading-edge logic fabs, with each
cluster including multiple commercial-scale fabs, a large and
skilled workforce, nearby suppliers, R&D facilities, and
specialized infrastructure.
Second, the United States will be home to multiple high-
volume advanced packaging facilities. Packaging-the process of
putting fabricated chips into containers that will ultimately
be embedded in products-is an essential part of the
manufacturing process, and one that will be core to new
innovations in functionality and efficiency.
Third, U.S.-based fabs will produce high-volume Dynamic
Random-Access Memory (DRAM) memory chips on economically
competitive terms.
And fourth, the United States will have increased its
production capacity for the current-generation and mature chips
that are vital to U.S. economic and national security.
CHIPS Underfunded
The CHIPS and Science Act authorized nearly $250 billion in
investments for manufacturing, research, and development which is
critical for the U.S. to continue to be the world leader in innovation
and competition. But we've seen in just the last year that these
authorization levels haven't been matched by appropriations.
A report from the Federation of American Scientists shows that the
Fiscal Year 2023 omnibus appropriations bill fell short of CHIPS levels
by $3 billion, and the Fiscal Year 2024 appropriations are expected to
fall short by nearly $7.5 billion. The authorization levels in this Act
are critical to ensuring our future success. That's why I led a letter
to the Appropriators asking them to fully fund CHIPS and Science
programs.
Question 1. What will the consequences be for U.S. leadership in
science, technology, and innovation if appropriations don't match the
levels authorized in CHIPS and Science?
Answer. The Department's ability to use the already-authorized
funding to implement research and development provisions of the CHIPS
and Science Act is dependent on the enactment of an annual
appropriations act, which makes available a new tranche of funding for
obligation in each Fiscal Year. The research, innovation, and
manufacturing sparked by this historic law can enable the United States
to be the world's technological superpower, securing our economic and
national security future for the coming decades.
To fulfill the promise of the CHIPS and Science Act and ensure that
the United States leads the world in critical and emerging
technologies, we need robust, sustained investments. For example, the
CHIPS and Science Act reauthorized the National Institute of Standards
and Technology (NIST) through 2027, codifying existing programs and
establishing new programs and activities. The authorization levels in
the CHIPS and Science Act for NIST include a total of $1.55 billion in
Fiscal Year (FY) 2023. The FY 2023 Omnibus spending bill provided NIST
$1.23 billion (not including earmarks) leaving approximately $320
million in unfunded research promotes U.S. competitiveness as other
countries are ramping up their investments in critical and emerging
technologies. Funding requested in the Commerce Department's FY 2025
budget for implementation of certain CHIPS and Science Act provisions
that were authorized but not appropriated include:
Artificial Intelligence (+$47.7 million) to invest in the
United States AI Safety Institute and expand upon Executive
Order 14110 to conduct AI research, establish testing
infrastructure and advance methods to create benchmarks and
measurements for AI system evaluation, develop technical
guidance and facilitate the development of standards and
implement best practices and frameworks.
Quantum Information Science (+$13.9 million) to identify
post-quantum cryptography, develop measurements for large-scale
quantum systems, identify and mitigate limiting factors for
high-performance quantum computers, train a quantum-ready
workforce, and ensure a leadership role in global quantum
standards development.
As part of the Department's commitment to creating good-paying jobs
and ensuring that no community is left behind, another key element of
the CHIPS and Science Act is the Distressed Area Recompete Pilot
Program (Recompete), housed in the Economic Development Administration
(EDA). Recompete targets the hardest-hit and most economically
distressed communities where prime-age (25-54 years) employment is
significantly lower than the national average, with the goal to close
this gap through flexible, locally-driven investments. The Recompete
program aims to catalyze long-term economic opportunity through these
investments that target the unique underlying conditions of a
particular place. Through its bottom-up, community-driven approach,
Recompete will provide employment opportunities in concentrated areas.
Through a two-phase competition, Recompete will provide
transformational investments of approximately $20-$50 million to 4-8
communities across the country.
In December of last year, EDA announced 22 Recompete Finalists
located across 20 states and Territories that represent a cross-section
of urban and rural regions. Phase 2 investments will range from $20-$50
million and can be used to support a wide range of implementation
activities across workforce development, business and entrepreneur
development, infrastructure, and additional planning, predevelopment,
or technical assistance. EDA also awarded 24 Strategy Development
Grants (SDG) to help communities significantly increase local
coordination and planning activities. Such development could make
selected grantees more competitive for any future Recompete funding.
The FY 2024 President's Budget requests another $200 million of
Recompete's authorized funding level. This would allow EDA to make more
grant awards to communities that have been for too long been forgotten
through future rounds of the program in areas like workforce training,
small business supports, infrastructure investments, and other critical
investments to move the needle.
The Economic Development Administration's Regional Technology and
Innovation Hubs (Tech Hubs) program is working to create regional
innovation centers across the country by bringing together industry,
higher education institutions, state and local governments, economic
development organizations, and labor and workforce partners to
supercharge ecosystems of innovation for technologies that are
essential to our national security and economic competitiveness. The
Tech Hubs program is a key part of President Biden's Investing in
America agenda, stimulating private sector investment, creating good-
paying jobs, revitalizing American manufacturing, and ensuring no
community is left behind by America's economic progress.
Through the Tech Hubs program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to manufacture, commercialize, and deploy these
technologies, guided by the following priorities: 1) making more U.S.
regions strong competitors in the global innovation economy; 2)
building strong communities that share in the prosperity technological
innovations bring; 3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and 4) strengthening and
increasing the resilience of the supply chains that our innovative
technology-centric industries rely on to stay secure and competitive.
On October 23, 2023, EDA announced the winners of Phase 1 of the
Tech Hubs program, and posted the Notice of Funding Opportunity for
Phase 2. This announcement included 31 designated Tech Hubs across 32
states and Puerto Rico, as well as the 29 consortia that will receive
Strategy Development Grants. The 31 designated Tech Hubs focus on
developing and growing innovative industries in regions across the
country, including semiconductors, clean energy, critical minerals,
biotechnology, precision medicine, artificial intelligence, quantum
computing, and more. The Department is grateful to Congress for the
$500 million in appropriations that we received in FY 2023 to catalyze
investment in technologies critical to economic growth, national
security, and job creation, and help communities across the country
become centers of innovation critical to American competitiveness.
This amount, however, represents only five percent of the $10
billion that was authorized through the CHIPS and Science Act. At this
funding level, EDA is only able to invest approximately $40-70 million
in each of approximately 5-10 Hubs, while the authorization envisions
investments of hundreds of millions and up to $1 billion in 20 or more
Hubs across the country. Based on the level of interest EDA saw in
Phase 1--nearly 400 applications, including nearly 200 seeking to
compete for these large investments--demand exceeds our currently
available funds by 100x when considering both applications received and
maximum possible investment levels.
At current funding levels, not every deserving, high-potential
applicant will be designated a Tech Hub or receive funding. The
President's budget requests the next $4 billion of the authorized
level, putting EDA on track to invest more funding in more Hubs through
future rounds of the program so regions can create and implement
innovation-based growth strategies and access the concentrated
investments that will unlock solutions to grand challenges, equitably
increase individual prosperity, and strengthen U.S. global
competitiveness.
Manufacturing USA Institutes
The CHIPS and Science Act and Fiscal Year 2023 Omnibus
Appropriations bill authorized and funded new Manufacturing USA
(``MUSA'') Institutes through the Department of Commerce and the
National Institute of Standards and Technology (``NIST'').
The legislation also directs the Department to pursue geographic
diversity--there are currently no MUSA institutes in the Pacific
Northwest, and only 3 west of the Mississippi.
In August, I wrote to the Department and NIST about ensuring a
successful selection of a new MUSA Institute. And in January, I wrote a
letter calling for a Manufacturing USA Institute to help research,
develop, and rapidly translate new aerospace materials technologies to
market and to train the domestic manufacturing workforce necessary to
make this possible. In my state alone, we are looking at a 60,000 STEM
worker shortfall by 2026, with significant shortages in the aviation
and space sector, particularly in machinists.
Question 1. I believe that collaboration between NIST, Labor, and
industry is needed to keep the U.S. competitive in advanced
manufacturing and to train the modern aerospace workforce. Will you
commit to working on this issue and pushing for new facilities for
advanced aerospace materials, manufacturing, and workforce development?
Question 2. The CHIPS and Science Act and the Fiscal Year 2023
omnibus appropriations bill provide funding for up to 3 new
semiconductor-focused MUSA institutes, as well as an additional NIST-
funded MUSA institute. More than a year later, the Department has not
yet announced funding opportunities for new Institutes that are greatly
needed for our Nation's competitiveness and leadership in advanced
manufacturing. Can you share with us when the Department of Commerce is
expected to announce the funding opportunities for both the
semiconductor and additional MUSA institutes? What are the expected
timelines for evaluation and award selection as well?
Answer. The Department of Commerce is committed to helping more
American workers compete and win in the 21st century global economy.
NIST intends to announce a funding opportunity in Spring 2024 for a new
Commerce Department-sponsored Manufacturing USA institute focused on
the use of AI to improve resilience of U.S. manufacturing. The
institute will be funded using the FY 2023 omnibus appropriations.
In addition, in January, the Department of Commerce issued a Notice
of Intent to announce a competition for a new CHIPS Manufacturing USA
Institute. CHIPS for America is investing at least $200 million in this
CHIPS Manufacturing USA Institute to create the first-of-its-kind
digital twin institute to lead the world in revolutionizing
semiconductor and advanced packaging manufacturing. The CHIPS
Manufacturing USA Institute will foster a collaborative environment to
significantly expand innovation, bring tangible benefits to both large
and small-to-medium-sized manufacturers, strengthen diverse research
institutions, and ensure a national reach in workforce development. The
new institute will have both regionally focused programs and meaningful
cross-region participation. This nationwide model will best meet the
CHIPS R&D program goals of strengthening U.S. technology leadership,
accelerating ideas to market, and realizing a robust semiconductor
workforce.
CHIPS for America expects to announce the competition for the new
Manufacturing USA Institute via a Notice of Funding Opportunity (NOFO)
in the second quarter of calendar year 2024.
Finally, NIST has issued a NOFO for Manufacturing USA Workforce,
Education and Vibrant Ecosystems (WEAVE) public service awards to the
17 Manufacturing USA institutes designed to engage Historically Black
Colleges and Universities, other Minority Serving Institutions, and
rural serving institutions of higher education. NIST has reviewed
applications and anticipates awards will be announced in early 2024.
Germanium and Gallium/Impacts on Semiconductors
China restricted exports of germanium and gallium citing national
security. China put the restrictions in place after the U.S. put new
export controls on advanced semiconductors and semiconductor tools
destined for China.
Germanium is used as a transistor in thousands of electronic
applications and in optical coatings the solar industry needs. Gallium
is used in manufacturing semiconductors.
China produces around 60 percent of germanium over 90 percent of
the world's gallium. Germanium is also produced in Canada, Finland, and
the United States. Europe, Japan, and Canada produce some gallium.
Question 1. How is the Department of Commerce working with the
Biden administration to ensure the private sector has access to
supplies of germanium and gallium needed for semiconductor production?
How are you working with like-minded allies and foreign partners to de-
risk and strengthen supply chain resilience?
Question 2. Could you speak more about the Department of Commerce's
strategy to ensure a stable and resilient supply of critical materials
for the semiconductor industry? How are you coordinating with the U.S.
Department of State and other agencies and departments to ensure
successful implementation of the CHIPS Act?
Question 3. What do you need from Congress to support these
efforts?
Answer. The Department is working on multiple fronts to advance the
Biden administration's priorities to support resilient and secure
supply chains of critical minerals and metals like gallium and
germanium. We must ensure that international trade in minerals is fair
and that domestic mineral processing is expanded, and we should develop
a circular economy where key minerals are extracted from end-of-life
electronics and manufacturing scrap. Toward these ends, Commerce has
already launched a new Industry Trade Advisory Committee on Critical
Minerals and Non-Ferrous Metals and is working with allies through
working groups with Australia, Brazil, Canada, the European Union, and
Japan to engage industry. We also participate in certain United Nations
International Metals Study Groups. Commerce is also engaging industry
across the gallium and germanium value chain to identify key needs and
concerns and assess impacts of foreign trade actions, as well as
determine how gallium and germanium end-users can diversify their
supply chains away from single sources and regions of high geopolitical
concern.
Recognizing the national security imperative of investments in the
domestic semiconductor industry, the Departments of Commerce and
Defense in July announced a Memorandum of Agreement (MOA) to expand
collaboration to strengthen the U.S. semiconductor defense industrial
base. The agreement increases information-sharing between the
Departments to facilitate close coordination on the CHIPS for America's
incentives programs, including collaboration on potential investment
applications to ensure that our departments are making complementary
decisions that maximize Federal investments under the CHIPS Incentive
Program and the Department of Defense's (DoD) Defense Production Act
and Industrial Base Analysis and Sustainment funds. This alignment of
priorities and decision-making will help ensure that our respective
investments position the United States to produce semiconductor chips
essential to national security and defense programs.
Gallium and germanium are important examples among the critical
minerals that the CHIPS program is focused on in partnership with the
critical minerals team in International Trade Administration (ITA) and
other agencies. Direct support is available to semiconductor materials
facilities via the first and second notices of funding opportunities.
The CHIPS office is also partnering with the leading semiconductor
manufacturing firms to better understand and support their world class
supply chains and business continuity programs.
Analyzing critical supply chains to identify potential chokepoints
before they become crises--going from reactive to proactive--is being
prioritized. After receiving an initial $10.8 million appropriation in
Fiscal Year 2023, the Commerce Department's Industry and Analysis (I&A)
unit in ITA launched the U.S. Government's first Supply Chain Center to
serve as the analytic engine for supply chain resilience policy action
within the U.S. Government. The FY 2024 Budget Request seeks $21
million to scale these efforts and institutionalize this important work
within Commerce. The Supply Chain Center builds on I&A's mission to
enhance the competitiveness of U.S. companies and protect U.S. national
security by being: (1) proactive in getting ahead of supply chain
challenges with analytic frameworks, deep dives, policy playbooks, and
persistent scanning for vulnerabilities; (2) strategic in setting
priorities for policy focus and action based on data-driven risk
analysis; (3) a force multiplier in improving the targeting and
effectiveness of U.S. Government investments; and (4) a partner to
industry in building resilient supply chains and ensuring U.S.
businesses lead the industries of the future.
ITA is also seeking to expand SelectUSA services to coordinate
supply chain priorities with state Foreign Direct Investment (FDI)
attraction efforts and recruit high-value investment targets in
alignment with supply chain strategies. The FY 2024 Budget seeks $4.75
million for ITA to expand its investment promotion tool kit to target
high-value investments in coordination with U.S. states, which would
dramatically improve SelectUSA's ability to attract investment into the
United States. In addition, ITA will conduct the analysis required to
use the specialized expertise and firm-level data needed to develop
better strategies for attracting specific individual firms to the
United States. Lastly, the requested funds will bolster the Advocacy
Center, which works the U.S. businesses to win foreign government
public tenders, reflecting the importance of global markets to
maintaining the viability of key domestic suppliers.
This request is the Global Markets component of an ITA joint
proposal with the Industry and Analysis business unit. Global Markets
will leverage the analysis, strategies, and recommendations produced by
Industry and Analysis under its complementary request to better target
FDI toward reducing critical, national supply chain risks.
The NIST Manufacturing Extension Partnership (MEP) helps businesses
narrow gaps in our supply chains and make manufacturing more resilient.
NIST's Manufacturing USA program intends to make available competitive
awards to enable existing Manufacturing USA institutes to transition
technologies developed at the institutes into domestic production.
Altogether, these investments in critical technologies and regions
are essential to maintaining American technological leadership in the
world and outcompeting the People's Republic of China (PRC) in a 21st
century global economy.
______
Response to Written Questions Submitted by Hon. Tammy Baldwin to
Hon. Gina M. Raimondo
The Department of Commerce's March 22, 2023 preliminary
determination in its self-initiated circumvention inquiry into imports
of aluminum foil from South Korea and Thailand imposes substantial
duties on thin-gauge or ``converting'' aluminum foil that is essential
for food, pharmaceutical, and medical device packaging. I am concerned
that these duties not meet the intent of anti-dumping measures, harming
American manufacturers instead of protecting them.
Question 1. Will you consider exempting thin-gauge aluminum foil in
DOC's final determination on this issue? If not, will you consider
providing an end-use certification exemption for flexible packaging
manufacturers and other U.S. importers of thin-gauge aluminum foil?
Answer. Commerce's enforcement and compliance proceedings are bound
by statute and regulation to protect American businesses and workers
from unfair trade. Commerce currently administers antidumping and
countervailing duties (AD/CVD) orders on imports of aluminum foil from
China pursuant to longstanding U.S. law designed to negate the unfair
advantage of injurious foreign government subsidies and unfair pricing
(i.e., dumping) of goods in the U.S. market. As part of that underlying
investigation, the International Trade Commission determined that
unfairly subsidized and priced imports of aluminum foil from China harm
the U.S. domestic industry. Circumvention inquiries are a critical
component to a robust trade enforcement regime because they ensure that
AD/CVDs are not undermined and continue to support U.S. workers and
businesses in the face of unfair trade. Lastly, it is important to
clarify that Commerce is directed by law to consider only the statutory
and regulatory factors as part of its circumvention analysis and cannot
consider additional factors, such as other domestic industries that may
require the product as an input. On November 20, 2023, Commerce
announced its final determinations that imports of Chinese-sourced
aluminum foil that are assembled or completed in Korea or Thailand are
circumventing the AD/CVD orders on aluminum foil from China. Be assured
that all parties' comments were fully taken into consideration for the
final determinations, including arguments regarding the inclusion of
thin gauge converter aluminum foil within the scope of the orders and
certification requirements for flexible packaging manufacturers.
______
Response to Written Questions Submitted by Hon. Tammy Duckworth to
Hon. Gina M. Raimondo
Ally Engagement on Export Controls
One early success in the Biden administration's efforts to protect
national and economic interests was our agreement with Japan and the
Netherlands to ensure those two countries adopt policies that mirror
U.S. policies in restricting the export of chip manufacturing
technologies to the People's Republic of China (PRC).
Recently, however, Huawei unveiled the Mate 60 Pro smartphone,
which uses 7 nanometer chips. This development highlights the
importance of continuous work to improve export controls and affirms
the importance of expanding cooperation with close allies and partners.
Question 1. Please provide the U.S. Department of Commerce's
assessment of the effectiveness of our Nation's current export controls
on chip manufacturing technologies.
Question 2. Please provide the Department's recommendations for
actions that Congress could take to enhance the Department's ability to
ensure the United States cooperates with partners to better counter the
PRC's efficiency and speed in developing and adopting cutting-edge
technologies.
Answer. The October 7, 2022 advanced computing and semiconductor
manufacturing equipment rule issued by the Commerce Department's Bureau
of Industry and Security (BIS) imposed restrictions on the PRC's access
to certain advanced semiconductor manufacturing equipment, chips and
other items needed to develop A.I. and prohibited U.S. persons from
supporting chip development and production that power A.I. systems at
certain semiconductor fabrication facilities located in the PRC or
Macau without a license.
The rule was released as an interim final rule and is in effect.
According to public reporting, the regulation has restricted the PRC's
ability to indigenously produce advanced semiconductors that threaten
U.S. national security and foreign policy interests. However, we know
that the PRC is looking for ways to continue accessing these high-end
chips and the equipment needed to manufacture them, and we are aware of
public reporting regarding purported advances by a PRC company in
certain chips. In this evolving technological landscape and threat
environment, BIS continues to review different sources of information,
including classified, business proprietary, and open source
information, to understand the character and composition of any
purported advances in PRC companies' production of certain chips,
address circumvention attempts, and track the impact of U.S. controls
and be proactive and nimble when new information surfaces.
On October 17, 2023, the BIS released rules designed to update
export controls on advanced computing semiconductors and semiconductor
manufacturing equipment, as well as on items that support
supercomputing applications and end-uses, to arms embargoed countries,
including the PRC. BIS also placed additional Chinese entities on the
Entity List for their involvement in the development of advanced
computing integrated circuits. These rules reinforce the objective of
the October 7, 2022, controls to restrict the PRC's ability to both
purchase and manufacture certain high-end chips critical for military
advantage.
The Advanced Computing Chips Interim Final Rule retains the
stringent PRC-wide licensing requirements imposed in the October 7,
2022, rule and makes two categories of updates by: (1) adjusting the
parameters that determine whether an advanced computing chip is
restricted; and (2) imposing new measures to address risks of
circumvention of the controls.
The Expansion of Export Controls on Semiconductor Manufacturing
Items Interim Final Rule: (1) imposes controls on additional types of
semiconductor manufacturing equipment; (2) refines and better focuses
the U.S. persons restrictions while codifying previously existing
agency guidance, to ensure U.S. companies cannot provide support to
advanced PRC semiconductor manufacturing, while avoiding unintended
impacts; and (3) expands license requirements for semiconductor
manufacturing equipment to apply to additional countries beyond the PRC
and Macau, to 21 other countries for which the U.S. maintains an arms
embargo.
The third rule issued on October 17, 2023 adds to the Entity List
two PRC entities and their subsidiaries (a total of 13 entities)
involved in the development of advanced computing chips that have been
found to be engaged in activities contrary to U.S. national security
and foreign policy interests. These entities will also be subject to
restrictions on foreign-produced items made with U.S. technology. In
addition, foundries producing chips for these listed parties will need
a BIS license before the foundries may send such chips to these
entities or parties acting on behalf of these entities as a result of
applying the ``footnote 4'' Entity List foreign direct product rule
designation.
In addition, as you point out, it is imperative that the United
States and our allies safeguard our core technologies by continuously
and proactively reviewing and updating our export control policies in
order to protect foundational technologies. The U.S. government will
continue to assess the national security environment and is in constant
communication with like-minded international partners and allies
regarding issues of mutual security concern.
The President's FY2024 proposed budget provides BIS's Export
Administration (EA) with the resources necessary to sustain its
effective work across its areas of responsibility, including the
evaluation of the families of technologies outlined by the National
Security Advisor, as well as others.
BIS is working to implement a reorganization of EA that will help
to address its substantially growing responsibilities and ensure that
the national security and economic policy priorities identified under
Export Control Reform Act of 2018 are met effectively and
expeditiously.
Export Controls--Taiwan and South Korea
South Korean and Taiwanese chipmakers are understandably reluctant
to curb investments in China, which on purchasing power alone, is an
important marketplace for manufacturers based in those two respective
countries.
Question 1. What is the U.S. Department of Commerce's long-term
strategy to implement smart export controls that incentivize allies and
partners, such as South Korea and Taiwan, to work with the United
States in effectively engaging in a new era of strategic trade?
Question 2. What specific legislative actions could Congress
consider to strengthen the Department's ability to implement such a
smart export control strategy?
Answer. The Commerce Department and its interagency partners
continue to assess the security environment and are in regular
communication with like-minded international partners and allies
regarding issues of mutual security concern. On October 13, 2023, BIS
issued a rule updating the general authorizations for Samsung and SK
hynix--companies headquartered in the Republic of Korea (ROK)--for
their semiconductor fabrication facilities in the Peoples Republic of
China (PRC). Samsung's and SK hynix's PRC facilities are Validated End-
Users (VEUs), which means they can apply for, and after national
security review and approval by the U.S. government, obtain a general
authorization to acquire certain items rather than seeking multiple
individual licenses.
The rule issued on October 13, 2023, allows these companies to
continue their operations in the PRC. The VEU authorizations reflect
close consultations between the United States and ROK through various
channels, including the Korea-U.S. Supply Chain and Commercial Dialogue
(SCCD) and the SCCD Working Group on Export Controls announced in
November 2022.
The United States and ROK and our companies play a critical role in
the global semiconductor supply chain and the October 13, 2023,
announcement demonstrates the strength of our partnership and
commitment to a secure and transparent supply chain, particularly for
memory chips.
These updated authorizations build on the case-by-case review
process established in the October 7, 2022, rule imposing restrictions
on China's access to advanced semiconductors and semiconductor
manufacturing equipment, and related items, and reflect our ongoing
communication on matters of mutual security interest.
Coordination among allies is among the most critical elements to
any successful export control regime, and we are constantly reviewing
and refining our export controls in response to the evolving national
security context. To that end, BIS is in constant communication with
international allies and partners that share our democratic values,
security, and other interests to help them understand our views on the
current threat environment, explain our approach to export controls,
and to enlist their assistance in aligning controls. Our national
security interests, and the impact of our export control policies, are
best served when we foster collaboration with our international
partners.
Benefits to Illinois
The Recompete program holds the potential to help communities
grappling with persistent economic challenges by providing critical
resources that will enable them to become leaders in high-growth, high-
wage sectors, such as advanced manufacturing.
In Illinois, we're witnessing a manufacturing resurgence in Central
Illinois, but much work remains to ensure this growth brings shared
prosperity that reduces racial inequality and lifts all communities.
Illinois is home to large numbers of skilled workers who are ready,
willing, and able to adapt to work in emerging industries, but also
struggling to address persistent inequality, especially regarding Black
wealth and employment, make our State well-suited for the Recompete
pilot program.
Question 1. Please discuss the real world economic benefits that
will result from Congress fully funding the Recompete pilot program.
Question 2. Please describe the Economic Development
Administration's composite of an ideal Recompete Pilot Program
applicant.
Answer. As part of the Department's commitment to creating good-
paying jobs and ensuring that no community is left behind, another key
element of the CHIPS and Science Act is the Distressed Area Recompete
Pilot Program (Recompete), housed in the Economic Development
Administration (EDA). Recompete targets the hardest-hit and most
economically distressed communities where prime-age (25-54 years)
employment is significantly lower than the national average, with the
goal to close this gap through flexible, locally-driven investments.
The Recompete program aims to catalyze long-term economic opportunity
through these investments that target the unique underlying conditions
of a particular place. Through its bottom-up, community-driven
approach, Recompete will provide employment opportunities in
concentrated areas. Through a two-phase competition, Recompete will
provide transformational investments of approximately $20-$50 million
to 4-8 communities across the country.
The Department is grateful to Congress for the $200 million dollars
that it received in FY23 to make transformational investments in
distressed communities across the Nation and catalyze renewed
competitiveness and economic opportunity for workers and families.
However, this funding represents a fraction of the $1 billion the
program was authorized through the CHIPS and Science Act, and it is
dwarfed that much more by the demand for these kinds of crucial
investments. At the closing of the Phase 1 application window in
October 2023, the program received 565 applications, marking the
largest number of applications of any national EDA competition to date.
Applications represented all parts of the country--coming from 49
states and 4 territories--and identified more than $6.6 billion in
investment needs to tackle persistent economic distress in their
communities. In Phase 2, Recompete will make concentrated awards in
just 4-8 regions, meaning that many applicants that submit quality,
thorough applications will not receive the much-needed Recompete
investments in their persistently distressed communities.
In December of last year, EDA announced 22 Recompete Finalists
located across 20 states and Territories that represent a cross-section
of urban and rural regions. Phase 2 investments will range from $20-$50
million and can be used to support a wide range of implementation
activities across workforce development, business and entrepreneur
development, infrastructure, and additional planning, predevelopment,
or technical assistance. EDA also awarded 24 Strategy Development
Grants (SDG) to help communities significantly increase local
coordination and planning activities. Such development could make
selected grantees more competitive for any future Recompete funding.
The 22 Recompete Finalists represent the top 10 percent of
applicants from across the nation--they are working in places that on
average, have prime-age (25-54 years) employment rates that trail the
national average by more than 10 percentage points and an average
median household income one-third below the national average. To combat
long-term distress, each Finalist built a Recompete Plan that
articulated a tailored investment thesis based on root causes, ranging
from shifting global markets, to addiction, to economic isolation.
These plans brought together strong public, private, and civic
partnerships -together, Finalists submitted more than 530 letters of
support, many of which represent specific and targeted partnerships and
local commitments from local elected officials (116), the private
sector (125), higher education and workforce training organizations
(104), and community based and labor organizations (103).
The President's FY 2025 Budget requests an additional $41 million
for the Recompete Pilot Program. This would allow EDA to make more
grant awards to communities that have been for too long been forgotten
through future rounds of the program in areas like workforce training,
small business supports, infrastructure investments, and other critical
investments to move the needle.
Critical Materials
Question 1. Please share the most troubling risks that the
Department of Commerce has identified in the critical mineral supply
chain.
Question 2. Please describe what steps the United States must take
to better partner with allied countries to secure critical minerals,
while lessening our Nation's dependence on sourcing critical minerals
mined by firms our countries with strong ties to competitor and
adversarial regimes, such as the PRC and the Russian Federation, since
such sourcing often results in adverse humanitarian and national
security costs.
Answer. To decrease our dependence on the People's Republic of
China (PRC) for the critical minerals we need to drive our innovative
economy, we need bold domestic investments and to work with allied
countries. Without access to these materials, we risk falling behind
the PRC in the race to invent and commercialize future generations of
technology. Diverse, resilient, and sustainable supply chains are
critical for national security and economic competitiveness, and a key
element of this effort is revitalizing domestic manufacturing, reducing
our reliance on the PRC, and positioning ourselves to be proactive
instead of reactive.
Last year, the Commerce Department's International Trade
Administration (ITA) established a Supply Chain Center. Housed in ITA's
Industry and Analysis unit, the Center aims to be the analytic engine
for supply chain resilience policy action within the U.S. Government.
The Supply Chain Center integrates industry expertise and data
analytics to develop innovative supply chain risk assessment tools and
coordinate deep-dive analyses on select critical supply chains to drive
targeted actions. The Center is proactive in getting ahead of supply
chain challenges, strategic in setting priorities for policy focus and
action based on data-driven risk analysis, a force multiplier in
improving the targeting and effectiveness of U.S. Government
investments, and a partner to industry in building resilient supply
chains and supporting U.S. businesses to lead the industries of the
future.
In addition, the Department is making a wide range of contributions
to U.S. supply chain resiliency, which include, but are not necessarily
limited to, the following: 1) Supply Chain Data Summit: The Department,
led by the Supply Chain Center and the Industry and Analysis unit, will
convene a diverse array of public and private stakeholders at a Supply
Chain Data and Analytics Summit in 2024. The event will gather expert
input to inform supply chain risk assessment models and tools and
facilitate expanded sharing of data and analytic capabilities; 2) CHIPS
Notice of Funding Opportunity: Commerce, along with CHIPS for America,
has driven action on semiconductor supply chains. On September 29,
Commerce released a second funding opportunity to strengthen the
resilience of the semiconductor supply chain, advance U.S. technology
leadership, and support vibrant domestic semiconductor clusters. The
funding opportunity seeks applications for commercial semiconductor
materials and manufacturing equipment facilities with capital
investments less than $300 million. It builds upon the Department's
announcement in June 2023 expanding funding to larger supply chain
projects. Supply chain applicants are vital to producing semiconductors
in the United States, supporting the domestic manufacturing ecosystem,
and creating jobs and opportunities in communities across the country;
3) Manufacturing Extension Partnerships (MEP): Small and medium-sized
manufacturers are vital to U.S. supply chains, and Commerce has been
expanding its work to support them. Administered by DOC's National
Institute of Standards and Technology, the network of MEPs works to
drive innovation and sustainability in manufacturing and build U.S.
manufacturing capacity at all tiers in the supply chain ecosystem. In
June 2023, MEP awarded more than $20 million across the MEP National
network to create the Supply Chain Optimization and Innovation Network,
or S-COIN, which will focus on providing supplier scouting services,
establishing new service offerings to improve existing supply chain
networks, filling gaps in the supply chain by connecting original
equipment manufacturers with small and medium-sized manufacturers, and
creating a complete map of U.S. supplier capability and capacity; 4)
Indo-Pacific Economic Framework for Prosperity (IPEF): The United
States, with Commerce playing a leading role, and 13 regional partner
nations have substantially concluded negotiations on agreements under
IPEF related to supply chains, climate and sustainability, preventing
and combatting corruption, and improving tax transparency and tax
administration. In particular, the IPEF Supply Chain Agreement is a
first-of-its-kind, innovative accord that will help build resilience
and competitiveness into critical supply chains, and Commerce is
kickstarting this effort through pilot projects to enhance the
resilience of key supply chains, including those related to
semiconductors, critical minerals, and cold chain services; and 5)
Census Data Collection: Through the Census Open Innovations Lab (COIL),
the Census Bureau is currently in phase 2 of the StatVentures Supply
Chain Challenge, which seeks innovative data ideas from the public,
industry, and academia to improve measurement of supply chains. Census
is also developing new data and visualization tools to expand U.S.
Government insights into manufacturing, imports/exports, movement of
goods, sale of goods, labor supply, and more.
We are also working with our allies and partners such as Canada and
Australia. In October, the United States and Australia held the first
meeting of the U.S.-Australia Critical Minerals Taskforce and convened
a government-to-business Critical Minerals Industry Roundtable.
Leveraging the growing economic connections between both countries, the
Taskforce identified areas in which the U.S. and Australian governments
can take joint action to increase investment in critical minerals
mining and processing projects in our respective countries and enhance
market transparency in this sector. The Taskforce also discussed how to
support innovative research and development into efficient technologies
and practices related to sustainable mining, enhanced mineral recovery
from unconventional sources, and new processing methods. Through the
Taskforce, we will deepen cooperation to deliver sustainable,
resilient, and secure critical minerals and clean energy to the world
and reduce global emissions, including by: (1) collaborating to map
complementary production capacities across our respective critical
minerals supply chain; (2) working towards mutual recognition of common
and aligned Environmental, Social, and Governance (ESG) standards for
the sector, including on labor and environmental protection; (3)
increasing information sharing to help each country shape local
priorities and support industry investment; and (4) enhancing
collaboration on traceability practices for verifying provenance of
critical minerals and commodities.
Developing options to improve market dynamics and address non-
market practices for critical minerals is necessary to the growth of
our respective economies and energy sectors including through
considering actions to increase transparency on mineral market
transactions. Earlier this year, the United States and Canada updated
our Joint Action Plan on Critical Minerals Cooperation. Under the Plan,
the Departments of State, Commerce, Defense, and Energy and the U.S.
Geological Survey will work with Canadian counterparts on increased
information and data sharing, joint efforts to promote private sector
engagement, coordination on research and development, and cooperation
at multilateral fora.
Additionally, Commerce is engaged in working groups on critical
minerals with allies such as Brazil, the European Union, and Japan, and
also participates in certain United Nations International Metals Study
Groups.
______
Response to Written Questions Submitted by Hon. Kyrsten Sinema to
Hon. Gina M. Raimondo
Environmental Reviews and Categorical Exclusions
I am grateful that you reiterated your support at the hearing for a
bipartisan NDAA amendment I worked on with Senate colleagues that would
streamline environment reviews under the CHIPS and Science Act.
Relatedly, the Commerce Department through the National Institute
of Standards and Technology (NIST) announced in September the adoption
of 11 Department of Energy (DOE) categorical exclusions under the
National Environmental Policy Act (NEPA) to help expedite review for
semiconductor manufacturing projects that receive funding through the
CHIPS and Science Act.
Question 1. Can you guarantee that NIST's recently adopted DOE
categorical exclusions will apply to all CHIPS grant applications?
Question 2. If not, can you please provide details on how the
applicability of NEPA categorical exclusions will work?
Answer. The CHIPS Program Office (CPO) is taking every reasonable
step to meet the Department's responsibilities under the National
Environmental Policy Act (NEPA) in a timely manner.
The Department is doing everything within its power to stand up a
fast process for issuing CHIPS incentives. As we build out American
semiconductor manufacturing capabilities, we must also maintain basic
environmental protections.
Regarding categorical exclusions (CEs), CPO will determine if a CE
can be applied to a project after a review of each individual
application. If a proposed action falls into an available CE--that is,
a category of action that CPO has determined normally does not
significantly affect the quality of the human environment--CPO will
determine if extraordinary circumstances are present. If not, or if
significant effects can be avoided despite the presence of
extraordinary circumstances, CPO will apply the CE. A description of
the 11 CEs that currently are available to all Department of Commerce
(DOC) components can be found within the notice issued by DOC at 74
Fed. Reg. 33,204 (July 10, 2009). A description of the 11 DOE CEs that
were recently adopted by NIST can be found within the notice issued by
DOC at 88 Fed. Reg. 64,884 (September 20, 2023). As noted in the
question, the Department is working to adopt relevant CEs from other
agencies.
Finally, on December 27, 2023, CHIPS for America published a draft
Programmatic Environmental Assessment (PEA) on the Federal Register
(``Notice of Availability of Draft Programmatic Environmental
Assessment for Modernization and Internal Expansion of Existing
Semiconductor Fabrication Facilities Under the CHIPS Incentives
Program''). The purpose of the PEA is to evaluate the environmental
impacts of modernization and internal expansion projects that are
eligible for the February 2023 CHIPS Incentives Program Commercial
Fabrication Facilities Notice of Funding Opportunity (NOFO). The
finalization of the PEA will allow CPO to complete a more streamlined
NEPA review of these types of modernization projects. Comments must be
received by January 25, 2024. The CHIPS Environment team is dedicated
to creating an efficient and robust NEPA process. As detailed in the
February 2023 NOFO, the CHIPS Program seeks to support current-
generation and mature-node semiconductors facilities vital to our
country's national and economic security. A streamlined environmental
review will allow these upgrade and modernization projects to proceed
expeditiously.
Environmental Protection Agency (EPA) Coordination
Building on permitting reform, it is also essential that the
Commerce Department works in tandem with other Federal agencies to
balance environmental concerns with effective implementation. For
example, the Maricopa Association of Governments, whose municipalities
cover a rapidly growing region of over five million people, has raised
concerns with the Phoenix-Mesa area's attainment status under the ozone
National Ambient Air Quality Standards. The potential impact of the
more onerous Federal requirements or sanctions under current attainment
status could be disastrous for continued semiconductor investment.
Question 1. Have you spoken with EPA Administrator Regan about EPA
standards, and proposed revisions to standards, and their potential
effect on semiconductor investment?
Answer. CPO spoke with EPA Administrator Regan in July, following
the White House Environmental Justice Advisory Council's letter urging
stronger action on ozone. That letter raised questions about whether
the EPA would lower the national ozone standards below 70 parts per
billion (ppb). Such an action would have impacted the attainment status
of most major metropolitan areas in the United States. Additionally,
CPO has met with EPA staff in the New Source Review Group (NSRG) on
several occasions. The discussion with NSRG included the application of
General Conformity and the EPA's awareness of the semiconductor
industry.
Question 2. How are you working to ensure that the administration
effectively balances the economic and national security imperatives of
the CHIPS and Science Act with other prerogatives?
Answer. CPO conducts a rigorous and methodical review of all
aspects of potential recipients' applications that evaluates all the
criteria identified in the statute as well as the evaluation criteria
identified in the notices of funding opportunity announcements. CPO
weighs these factors both on the merits of an individual company
proposal as well as in the context of the broader portfolio of
applications received by CPO. A balanced portfolio is a key objective
of the grant program.
National Semiconductor Technology Center (NSTC) Facilities
In May 2023 NIST Director Locascio testified before the House
Science Committee that NIST would not be involved in NSTC Technical
Center site selection and will leave that up to the Board of Trustees.
Question 1. Given that, what do you expect the process to look like
for selecting technical centers and how will the Commerce Department
and NIST ensure that the most advanced industry facilities and regional
semiconductor ecosystems are considered and included in the expected
network of NSTC Technical Centers?
Question 2. Will the NSTC issue Requests for Proposals for each
center, and what role will the CHIPS R&D Office have in that process?
Question 3. How many facilities do you expect will be selected, and
to what degree will the NSTC support them via grant awards or other
funding mechanisms?
Answer. As stated in the March NSTC Vision and Strategy Paper, the
Department of Commerce intends for the NSTC to (1) support world-class
research across the domestic ecosystem, (2) provide access to physical
assets, and (3) include a headquarters facility and additional
locations that leverage existing facilities.
CHIPS Research and Development has made significant progress
towards the objectives of the NSTC over the past year. In October 2023,
CHIPS announced the initial Board of Trustees for the independent, non-
profit NSTC operator once the NSTC is formally established. In
November, CHIPS announced both the incorporation of the non-profit
operator and the first funding agreement between the Department and
operator, which will enable operator activities such as hiring its
executive leadership and developing a framework and sequence for
further operations.
Future funding agreements to further define and fund the activities
of the operator remain under development. The Department expects that
the specific number, specifications, organization, and selection of
facilities will be determined with consideration given to the research
needs of the domestic scientific and industry community, an
understanding of currently available infrastructure, and the desire to
rapidly provide access to capabilities.
______
Response to Written Questions Submitted by Hon. Jacky Rosen to
Hon. Gina M. Raimondo
Economic Development Programs
The CHIPS and Science Act enacted the Regional Technology and
Innovation Hub Program or the Tech Hubs Program and the Recompete Pilot
Program--both of which are critical for growing and strengthening our
workforce, innovation, and regional economies. I know in Nevada, we
have applications pending for these grant opportunities from across our
state. Some states will lead the way in chip manufacturing, but states
like mine will play an important role in other parts of the
manufacturing process like advancing innovative research and training a
skilled workforce. EDA grants like these will ensure all states can
help bring advanced manufacturing home.
Question 1. As Nevada waits for the award announcements, what is
the timeline for the first round of awards and how are you ensuring
that economic development investments reach ALL states?
Question 2. What outreach have you been doing to make sure
communities know about these funding opportunities including in tribal,
rural, and underserved communities?
Answer. The Economic Development Administration's Regional
Technology and Innovation Hubs (Tech Hubs) program is working to create
regional innovation centers across the country by bringing together
industry, higher education institutions, state and local governments,
economic development organizations, and labor and workforce partners to
supercharge ecosystems of innovation for technologies that are
essential to our national security and economic competitiveness. The
Tech Hubs program is a key part of President Biden's Investing in
America agenda, stimulating private sector investment, creating good-
paying jobs, revitalizing American manufacturing, and ensuring no
community is left behind by America's economic progress.
Through the Tech Hubs program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to commercialize, manufacture, and deploy these
technologies, guided by the following priorities: 1) making more U.S.
regions strong competitors in the global innovation economy; 2)
building strong communities that share in the prosperity technological
innovations bring; 3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and 4) strengthening and
increasing the resilience of the supply chains that our innovative,
technology-centric industries rely on to stay secure and competitive.
The Tech Hubs Program is charged with increasing American
competitiveness in technologies that contribute to national and
economic security. The program is also designed to identify
geographically diverse regions with the concentration of assets,
talent, technology innovation ecosystems, and other resources that form
a foundation on which a region can become globally competitive in its
selected technology area. By leveraging regional resources, ranging
from local talent pools to physical geography, Tech Hubs is investing
in the people, places, and technologies that will power the future of
the American economy.
On October 23, 2023, the President announced the winners of Phase 1
of the Tech Hubs program, and EDA posted the Notice of Funding
Opportunity for Phase 2. This announcement included 31 designated Tech
Hubs across 32 states and Puerto Rico, as well as the 29 consortia that
will receive Strategy Development Grants. The 31 designated Tech Hubs
focus on developing and growing innovative industries in regions across
the country, including semiconductors, clean energy, critical minerals,
biotechnology, precision medicine, autonomy, quantum computing, and
more. The Department is grateful to Congress for the $500 million in
appropriations that we received in FY 2023 to catalyze investment in
technologies critical to economic growth, national security, and job
creation, and help communities across the country become centers of
innovation critical to American competitiveness.
This amount, however, represents only five percent of the $10
billion that was authorized through the CHIPS and Science Act. At this
funding level, EDA is only able to invest approximately $40-70 million
in each of approximately 5-10 Hubs, while the authorization envisions
investments of hundreds of millions and up to $1 billion in 20 or more
Hubs across the country. Based on the level of interest EDA saw in
Phase 1--nearly 400 applications, including nearly 200 seeking to
compete for these large investments--demand exceeds our currently
available funds by 100x when considering both applications received and
maximum possible investment levels.
While EDA implemented the program and selected the Phase 1 winners
with geographic diversity as a core principle, including by meeting or
exceeding statutory requirements for small and rural communities, low-
population states, and Established Program to Stimulate Competitive
Research (EPSCoR) states, not every deserving, high-potential applicant
will be designated a Tech Hub or receive funding at current funding
levels. The President's budget highlights the importance of the Tech
Hubs program by requesting the next $4 billion of the authorized level,
putting EDA on track to invest more funding in more Hubs through future
rounds of the program so regions can create and implement innovation-
based growth strategies and access the concentrated investments that
will unlock solutions to grand challenges, equitably increase
individual prosperity, and strengthen U.S. global competitiveness.
Recompete. As part of the Department's commitment to creating good-
paying jobs and ensuring that no community is left behind, another key
element of the CHIPS and Science Act is the Distressed Area Recompete
Pilot Program (Recompete), housed in the Economic Development
Administration (EDA). Recompete targets the hardest-hit and most
economically distressed communities where prime-age (25-54 years)
employment is significantly lower than the national average, with the
goal to close this gap through flexible, locally-driven investments.
The Recompete program aims to catalyze long-term economic opportunity
through these investments that target the unique underlying conditions
of a particular place. Through its bottom-up, community-driven
approach, Recompete will provide employment opportunities in
concentrated areas. Through a two-phase competition, Recompete will
provide transformational investments of approximately $20-$50 million
to 4-8 communities across the country. The final awards will be
announced by late summer 2024.
The Department is grateful to Congress for the $200 million that it
received in FY23 to make transformational investments in distressed
communities across the Nation and catalyze renewed competitiveness and
economic opportunity for workers and families. However, this funding
represents a fraction of the $1 billion the program was authorized
through the CHIPS and Science Act, and it is dwarfed that much more by
the demand for these kinds of crucial investments. At the closing of
the Phase 1 application window in October 2023, the program received
565 applications, marking the largest number of applications of any
national EDA competition to date. Applications represented all parts of
the country--coming from 49 states and 4 territories--and identified
more than $6.6 billion in investment needs to tackle persistent
economic distress in their communities. In Phase 2, Recompete will make
concentrated awards in just 4-8 regions, meaning that many applicants
that submit quality, thorough applications will not receive the much-
needed Recompete investments in their persistently distressed
communities.
In December of last year, EDA announced 22 Recompete Finalists
located across 20 states and Territories that represent a cross-section
of urban and rural regions. Phase 2 investments will range from $20-$50
million and can be used to support a wide range of implementation
activities across workforce development, business and entrepreneur
development, infrastructure, and additional planning, predevelopment,
or technical assistance. EDA also awarded 24 Strategy Development
Grants (SDG) to help communities significantly increase local
coordination and planning activities. Such development could make
selected grantees more competitive for any future Recompete funding.
The FY 2025 President's Budget requests an additional $41 million
for the Recompete Pilot Program. This would allow EDA to make more
grant awards to communities that have been for too long been forgotten
through future rounds of the program in areas like workforce training,
small business supports, infrastructure investments, and other critical
investments to move the needle.
Equity is EDA's top investment priority and embedded in the design
of the Recompete Pilot Program, and the program intends to invest in
economic activity in geographically diverse and persistently distressed
communities across the country. Funding will be provided exclusively to
distressed communities, and within these areas applicants were asked to
demonstrate how benefits from the program would be shared equitably
across all affected populations. Applicants were also asked to
demonstrate how they engaged underserved communities in the upcoming
application and planning process. EDA conducted multiple outreach
sessions for communities across the country during the Phase 1
application period, including stakeholders from tribal and rural
communities, as well as community-based organizations. Finally, in the
early stages of program design the Phase I NOFO was informed by a
request for information (RFI) issued February 23, 2023, and Tribal
Consultation held on March 9, 2023, both of which shaped key features
of the competition.
______
Response to Written Questions Submitted by Hon. Ben Ray Lujan to
Hon. Gina M. Raimondo
The formal CHIPS solicitation for the Commercial Facilities NOFO
reads, ``It is generally expected that most CHIPS Direct Funding awards
will range between 5-15 percent of project capital expenditures.''
While this is certainly laudable for large semiconductor manufacturers
who will have no problem securing equity or debt financing for
projects, for many smaller applicants, this 15 percent investment by
the CPO will not enable their business cases to close on critical
projects. For smaller dual-use, defense-critical projects, they require
large sums of capital to be committed early in projects, and investment
tax credits could take several years to recoup.
Question 1. In order to maintain the diversity of projects intended
in the CHIPS and Science Act, do you agree that the Department of
Commerce should consider increasing the percentage of direct funding
investment in smaller projects if they meet all other CHIPS
requirements?
Answer. A diversity of project and technology types will be
necessary to achieve the Department's program goal as laid out in the
``Vision for Success: Commercial Fabrication Facilities.'' As stated in
our Commercial Fabrication Facilities Notice of Funding Opportunity
(NOFO), the Direct Funding amount will take into account a variety of
criteria, including the project's financial model and expected cash
flows, the project's estimated internal rate of return, the strategic
importance of the project to U.S. economic and national security, and
other criteria. Ultimately, the specifics of each project--and how a
project advances the program's strategic goals--will determine award
size amount.
Secretary Raimondo, thank you for your commitment to brief Congress
on the recent Partnering to Advance Trusted and Holistic Spectrum
Solutions (PATHSS) report submitted by the Department of Defense (DoD)
to the Department of Commerce, as required by the Infrastructure
Investment and Jobs Act. There's been much attention on the 3.1GHz--
3.45 GHz electromagnetic spectrum band, particularly the sharing
feasibility analysis your Department co-chaired with DoD.
Question 2. Will you commit--in addition to briefing Congress--that
the Department of Commerce will make a public summary available?
Question 3. Commerce has the unique dual role of both to promote
commerce in the United States, including support for non-Federal
spectrum users, and to serve as the spectrum manager for Federal
agencies. How does the Department intend to promote non-Federal uses of
spectrum while ensuring that Federal systems are afforded the
continued, reliable access to spectrum they need to perform critical
national security missions?
Question 4. How does the Department intend to leverage the PATHSS
report's findings in decisions regarding the 3.1 GHz-3.45 GHz spectrum
band, and further, the PATHSS process into future spectrum allocation
decisions?
Answer. The National Telecommunications and Information
Administration (NTIA) has a dual imperative built into its statutory
role. NTIA is both the manager of Federal spectrum resources, and the
President's primary advisor on these issues. Given these dual roles,
NTIA's obligation is to work with the agencies to ensure that we have
the spectrum needed for our economic security and growth while
protecting national security and critical Federal missions and
capabilities. To meet this obligation, it is absolutely essential that
bands be studied before decisions are made about repurposing.
On September 28, 2023, the Department of Defense submitted its
Emerging Mid-Band Radar Spectrum Sharing (EMBRSS) Feasibility
Assessment to the Department of Commerce. The Department appreciated
the opportunity to have provided a briefing on November 16, 2023, to
the Committee, in conjunction with the DoD, on the contents of the
report after it was submitted by the DoD to the Department. In
conjunction with this briefing, DoD provided a Controlled Unclassified
Information (CUI) version of the report to interested Committee members
and their staff. The Department and its DoD colleagues are committed to
working with the Committee to ensure it can perform its oversight
functions related to the report and next steps regarding the 3.1-3.45
GHz band.
On November 13, 2023, Biden-Harris Administration released a
National Spectrum Strategy identifying more than 2,700 megahertz of
airwaves to study for innovative new uses by both the private sector
and Federal agencies. The Strategy identifies 2,786 megahertz of
spectrum across five spectrum bands for in-depth study to determine
suitability for potential new uses. That is nearly double NTIA's
initial target of 1,500 megahertz. The spectrum target includes more
than 1,600 megahertz of midband spectrum--a frequency range in high
demand by the wireless industry for next-generation services. The
Biden-Harris Administration published an Implementation Plan on March
12, 2024, to carry out the Strategy, which is envisioned as a living
document, intended to be assessed and updated in the future as spectrum
requirements and opportunities evolve. The Implementation Plan sets out
the requirements for a follow-on study to the EMBRSS report. President
Biden also released the Presidential Memorandum on Modernizing United
States Spectrum Policy and Establishing a National Spectrum Strategy,
which will promote a trustworthy, predictable and evidenced-based
process for ensuring spectrum serves its highest and best use.
The CHIPS and Science Act is going to bring critical advanced
manufacturing and jobs to the United States. Advanced manufacturers
have a demonstrated need for private wireless networks to improve
savings and efficiency. In some cases, under these systems, each
individual widget within a factory is tracked and monitored. Private
networks also have unique benefits for reliability and security, and
security is essential for advanced manufacturers in critical sectors
supported by the CHIPS and Science Act. Currently, advanced
manufacturers already utilize the Citizens Broadband Radio Service
(CBRS) spectrum band for this type of private network. According to
reports, TSMC is planning to deploy this type of network at the
announced semiconductor fabrication plant in Arizona.
Question 5. Can you discuss how private wireless technologies
currently deployed in the CBRS band can help support new advanced
manufacturing in the United States and why security and reliability are
so critical for those networks?
Answer. Citizens Broadband Radio Service (CBRS) allows for dynamic
spectrum sharing between the Department of Defense (DoD) and commercial
spectrum users. The DoD users have protected, prioritized use of the
spectrum. When the government is not using the airwaves, companies and
the public can gain access through a tiered access arrangement. This
means the DoD can use the same spectrum for its critical missions while
companies can use it for 5G and high-speed Internet deployment.
According to a May 2023 report from NTIA's Institute for
Telecommunication Sciences (ITS), CBRS is working. Researchers reviewed
aggregated data on CBRS devices-such as cell towers- between April 1,
2021 and January 1, 2023. They found the number of devices nationwide
grew by 121 percent over the 21-month analysis period-an indication
that access to the spectrum is growing. There are several commercial
use cases, like for private networks used in modern manufacturing and
that could also be used by industrial IoT, 5G wireless and utilities.
The BCRS offers different tiers of spectrum access, allowing non-
federal users varying degrees of spectrum reliability and also the
flexibility to implement their own security within the networks.
The CHIPS and Science Act makes a historic commitment to research
and development in the United States. The benefits of this advanced
technology will only extend as far as families in America have access
to those technologies, particularly access to resilient and secure
high-speed broadband. The Affordable Connectivity Program (ACP) is the
only permanently authorized pubic benefit program established in the
last Congress. The Administration has rightly celebrated increasing
participation in the Program, which along with commitments by many
Internet Service Providers has made broadband effectively free for many
Americans. Now, eligible households do not have to choose between
putting food on the table, paying rent, and ensuring access to school,
work, and loved ones. Unfortunately, the President did not request any
additional funding for ACP in his budget even though BEAD grantees
plans are explicitly required to participate on ACP to help connect
low-income citizens.
Question 6. How does the Department of Commerce expect BEAD
grantees to meet the ACP participation requirements if the ACP runs out
of funding, as expected in March 2024?
Answer. The Biden-Harris Administration is committed to connecting
everyone across America to affordable, reliable, high-speed Internet
service, and the Affordable Connectivity Program (ACP) is at the heart
of the Biden-Harris Administration's efforts to make the goal of
Internet for All a reality. ACP is critical for the success of NTIA's
broadband infrastructure programs because users need to be able to
afford to get online and providers need the certainty that they will
have customers, especially in rural and low-income communities, before
they deploy their networks.
Pursuant to Infrastructure Investment and Job Act (IIJA), NTIA's
BEAD program requires that participating Internet Service Providers
offer a low-cost option. ACP helps ensure that providers can deliver on
this requirement in all corners of the country, and ultimately meet the
broader goal of connecting everyone in America to affordable, reliable,
high-speed Internet service. It is imperative that ACP is put on firm
financial footing going forward, and the Biden-Harris Administration
has called on Congress to provide $6 billion to extend this program.
______
Response to Written Questions Submitted by Hon. Raphael Warnock to
Hon. Gina M. Raimondo
Regional Technology Hubs and Geographic Diversity
The CHIPS and Science Act (P.L. 117-167) authorizes regional
technology hub programs within various agencies, including at the
Economic Development Administration (EDA) and National Science
Foundation (NSF). This legislation also requires geographic diversity
within each program.\1\
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\1\ See, e.g., https://www.eda.gov/funding/programs/regional-
technology-and-innovation-hubs/faq; https://www.nsf.gov/pubs/2022/
nsf22082/nsf22082.jsp.
Question 1. How does geographic diversity in these programs
contribute to our national security and our ability to compete on the
---------------------------------------------------------------------------
global stage?
Question 2. How will you coordinate across agencies to ensure
geographic diversity across all programs created under the CHIPS and
Science Act?
Answer. The Economic Development Administration's Regional
Technology and Innovation Hubs (Tech Hubs) program is working to create
regional innovation centers across the country by bringing together
industry, higher education institutions, state and local governments,
economic development organizations, and labor and workforce partners to
supercharge ecosystems of innovation for technologies that are
essential to our national security and economic competitiveness. The
Tech Hubs program is a key part of President Biden's Investing in
America agenda, stimulating private sector investment, creating good-
paying jobs, revitalizing American manufacturing, and ensuring no
community is left behind by America's economic progress.
Through the Tech Hubs program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to commercialize, manufacture, and deploy these
technologies, guided by the following priorities: 1) making more U.S.
regions strong competitors in the global innovation economy; 2)
building strong communities that share in the prosperity technological
innovations bring; 3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and 4) strengthening and
increasing the resilience of the supply chains that our innovative,
technology-centric industries rely on to stay secure and competitive.
The Tech Hubs Program is charged with increasing American
competitiveness in technologies that contribute to national and
economic security. The program is also designed to identify
geographically diverse regions with the concentration of assets,
talent, technology innovation ecosystems, and other resources that form
a foundation on which a region can become globally competitive in its
selected technology area. By leveraging regional resources, ranging
from local talent pools to physical geography, Tech Hubs is investing
in the people, places, and technologies that will power the future of
the American economy.
On October 23, 2023, the President announced the winners of Phase 1
of the Tech Hubs program, and EDA posted the Notice of Funding
Opportunity for Phase 2. This announcement included 31 designated Tech
Hubs across 32 states and Puerto Rico, as well as the 29 consortia that
will receive Strategy Development Grants. The 31 designated Tech Hubs
focus on developing and growing innovative industries in regions across
the country, including semiconductors, clean energy, critical minerals,
biotechnology, precision medicine, autonomy, quantum computing, and
more. The Department is grateful to Congress for the $500 million in
appropriations that we received in FY 2023 to catalyze investment in
technologies critical to economic growth, national security, and job
creation, and help communities across the country become centers of
innovation critical to American competitiveness.
This amount, however, represents only five percent of the $10
billion that was authorized through the CHIPS and Science Act. At this
funding level, EDA is only able to invest approximately $40-70 million
in each of approximately 5-10 Hubs, while the authorization envisions
investments of hundreds of millions and up to $1 billion in 20 or more
Hubs across the country. Based on the level of interest EDA saw in
Phase 1--nearly 400 applications, including nearly 200 seeking to
compete for these large investments--demand exceeds our currently
available funds by 100x when considering both applications received and
maximum possible investment levels.
While EDA implemented the program and selected the Phase 1 winners
with geographic diversity as a core principle, including by meeting or
exceeding statutory requirements for small and rural communities, low-
population states, and EPSCoR states, not every deserving, high-
potential applicant will be designated a Tech Hub or receive funding at
current funding levels. The President's budget highlights the
importance of the Tech Hubs program by requesting the next $4 billion
of the authorized level, putting EDA on track to invest more funding in
more Hubs through future rounds of the program so regions can create
and implement innovation-based growth strategies and access the
concentrated investments that will unlock solutions to grand
challenges, equitably increase individual prosperity, and strengthen
U.S. global competitiveness.
The Department of Commerce is committed to working with relevant
Federal agencies to implement programs authorized under the CHIPS and
Science Act that in a way that is merit-based and represents the full
diversity of America. The Tech Hubs Program takes a whole-of-government
approach to supporting the tech economy and national security that
includes identifying and providing support, guidance, and additional
funding opportunities across the Department of Commerce and from other
Federal agencies. EDA is also working with other Federal agencies to
identify how their programs and place-based investments complement the
Tech Hubs Program.
EDA has established a Memorandum of Understanding with National
Science Foundation and has coordinated with multiple Commerce bureaus
and other Federal departments and agencies in its implementation of the
Tech Hubs program and in supporting Hubs achieve growth.
Rulemaking
A skilled domestic workforce is critical to the success of
investments in the CHIPS and Science Act (P.L. 117-167), including
those in semiconductor development, information technologies,
manufacturing, and biotechnology. Community and technical colleges are
well positioned to respond to the relevant emerging technologies
workforce needs by providing shorter-term, experiential or work-based
learning for a broad population of students, including rural Americans
and those from underrepresented backgrounds.
Question 1. What roles do community and technical colleges play in
addressing workplace shortages?
Question 2. What can Congress do to help Community and Technical
colleges strengthen their capacity to train workers in the skills
required to succeed in high-growth, high-demand industries?
Answer. In the one year since the CHIPS and Science Act was signed
into law, companies have announced over $166 billion in manufacturing
in semiconductors and electronics, and at least 50 community colleges
in 19 states have announced new or expanded programming to help
American workers access good-paying jobs in the semiconductor industry.
As part of the Biden Administration's long-term vision for CHIPS for
America, Secretary Raimondo has called on the United States to double
the semiconductor workforce overall, for U.S. colleges and universities
to triple the number of graduates in semiconductor-related fields, and
for semiconductor companies to work with high schools, community
colleges, and unions to train 100,000 new technicians. CHIPS for
America will embrace a whole-of-society approach across government,
education, labor unions, industry, and community organizations to
achieve these ambitious goals.
The Department of Commerce is committed to helping more American
workers compete and win in the 21st century global economy. The
National Institute of Standards and Technology (NIST) Manufacturing
Extension Partnership (MEP) helps businesses narrow gaps in our supply
chains and make manufacturing more resilient.
NIST has issued a Notice of Funding Opportunity for Manufacturing
USA Workforce, Education and Vibrant Ecosystems (WEAVE) public service
awards to the 17 Manufacturing USA institutes. NIST is currently
reviewing applications and anticipates awards will be announced early
this year.
In Spring 2024, NIST intends to announce a funding opportunity for
a new Commerce Department-sponsored Manufacturing USA institute. As
with all Manufacturing USA institutes, there will be a program to
educate and train skilled workers, working with community and technical
colleges.
Additionally, in January 2024, the Department of Commerce issued a
Notice of Intent to announce a competition for a new Manufacturing USA
Institute. CHIPS for America is investing at least $200 million in a
CHIPS Manufacturing USA Institute to create the first-of-its-kind
institute focused on digital twins to lead the world in revolutionizing
semiconductor and advanced packaging manufacturing. The CHIPS
Manufacturing USA Institute will foster a collaborative environment to
significantly expand innovation, bring tangible benefits to both large
and small-to-medium-sized manufacturers, strengthen diverse research
institutions, and ensure a national reach in workforce development. The
new institute will have both regionally focused programs and meaningful
cross-region participation. This nationwide model will best meet the
CHIPS R&D program goals of strengthening U.S. technology leadership,
accelerating ideas to market, and realizing a robust semiconductor
workforce.
The Economic Development Administration (EDA)'s Regional Technology
and Innovation Hubs (Tech Hubs) Program is working to create regional
innovation centers across the country by bringing together industry,
higher education institutions, state and local governments, economic
development organizations, and labor and workforce partners to
supercharge ecosystems of innovation for technologies that are
essential to our national security and economic competitiveness. The
Tech Hubs Program is a key part of President Biden's Investing in
America agenda, stimulating private sector investment, creating good-
paying jobs, revitalizing American manufacturing, and ensuring no
community is left behind by America's economic progress.
Through the Tech Hubs Program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to commercialize, manufacture, and deploy these
technologies, guided by the following priorities: 1) making more U.S.
regions strong competitors in the global innovation economy; 2)
building strong communities that share in the prosperity technological
innovations bring; 3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and 4) strengthening and
increasing the resilience of the supply chains that our innovative,
technology-centric industries rely on to stay secure and competitive.
The Tech Hubs Program is charged with increasing American
competitiveness in technologies that contribute to national and
economic security. The program is also designed to identify
geographically diverse regions with the concentration of assets,
talent, technology innovation ecosystems, and other resources that form
a foundation on which a region can become globally competitive in its
selected technology area. By leveraging regional resources, ranging
from local talent pools to physical geography, Tech Hubs is investing
in the people, places, and technologies that will power the future of
the American economy.
On October 23, 2023, the President announced the winners of Phase 1
of the Tech Hubs program, and EDA posted the Notice of Funding
Opportunity for Phase 2. This announcement included 31 designated Tech
Hubs across 32 states and Puerto Rico, as well as the 29 consortia that
will receive Strategy Development Grants. The 31 designated Tech Hubs
focus on developing and growing innovative industries in regions across
the country, including semiconductors, clean energy, critical minerals,
biotechnology, precision medicine, autonomy, quantum computing, and
more. The Department is grateful to Congress for the $500 million in
appropriations that we received in FY 2023 to catalyze investment in
technologies critical to economic growth, national security, and job
creation, and help communities across the country become centers of
innovation critical to American competitiveness.
This amount, however, represents only five percent of the $10
billion that was authorized through the CHIPS and Science Act. At this
funding level, EDA is only able to invest approximately $40-70 million
in each of approximately 5-10 Hubs, while the authorization envisions
investments of hundreds of millions and up to $1 billion in 20 or more
Hubs across the country. Based on the level of interest EDA saw in
Phase 1--nearly 400 applications, including nearly 200 seeking to
compete for these large investments--demand exceeds our currently
available funds by 100x when considering both applications received and
maximum possible investment levels.
The President's budget highlights the importance of the Tech Hubs
Program by requesting the next $4 billion of the authorized level,
putting EDA on track to invest more funding in more Hubs through future
rounds of the program so regions can create and implement innovation-
based growth strategies and access the concentrated investments that
will unlock solutions to grand challenges, equitably increase
individual prosperity, and strengthen U.S. global competitiveness. Tech
Hubs funding will be deployed across four categories of activities,
including both workforce development projects and related
infrastructure. Community and technical colleges are members of Tech
Hubs consortia, and EDA expects that they will play a role in the
workforce development projects of many Hubs. EDA plans to announce all
Phase 2 awards in summer 2024.
Spectrum Interagency Coordination
The National Telecommunications and Information Administration
(NTIA) is responsible for managing federally allocated spectrum and
promoting its most efficient use.\2\ This year, the Federal
Communications Commission (FCC)'s authority to auction spectrum
lapsed.\3\
---------------------------------------------------------------------------
\2\ https://www.ntia.gov/category/spectrum-management
\3\ https://www.fcc.gov/document/chairwoman-rosenworcel-expiration-
spectrum-auction-authority
Question 1. How should Federal agencies collaborate to maximize the
efficient use of spectrum?
Answer. In August 2022, the National Telecommunications and
Information Administration (NTIA) and the Federal Communications
Commission (FCC) announced an updated Memorandum of Understanding (MOU)
between our agencies on spectrum coordination. This was the first
update to the MOU in nearly 20 years, and it is already paying
dividends as the two agencies navigate complex issues together.
A wide array of Federal agencies use spectrum effectively to
perform critical missions in service to all Americans--from national
defense, to weather forecasting, to scientific observation, and more.
The NTIA has a dual imperative built into its statutory role. NTIA is
both the manager of Federal spectrum resources and the President's
primary advisor on spectrum-related issues. In its statutory Federal
spectrum management role, NTIA helps ensure the efficient use of
spectrum by tailoring frequency assignments to demonstrated agency
spectrum requirements. Significantly, most spectrum bands with Federal
operations are shared, accommodating access by multiple--often many--
agencies.
Spectrum used for Federal missions is also often shared with the
private sector uses, and NTIA recognizes the need to make additional
spectrum available for increased requirements. Given NTIA's dual roles,
NTIA is focused both on ensuring that Federal agencies have the
spectrum necessary to carry out their missions and ensuring that there
is sufficient spectrum for private sector use to maintain U.S. global
leadership in wireless technology and services. NTIA partners with
Federal agencies to determine the most efficient use of spectrum, while
also ensuring agencies have sufficient access to spectrum to support
mission requirements. The National Spectrum Strategy, released in
November 2023 and discussed in the response below, emphasizes a number
of efforts related to agency collaboration and maximizing the efficient
use of spectrum.
Question 2. What can Congress do to facilitate better agency
coordination around spectrum?
Answer. On November 13, 2023, the Biden-Harris Administration
released the National Spectrum Strategy, which 1) identifies over 2,700
MHz of spectrum across five spectrum bands for in-depth study for
potential new uses by both the private sector and Federal agencies, 2)
improves the spectrum decision-making process both within the
government and between the private sector and the public sector, 3)
calls for research and development of new spectrum management
technology, and 4) calls for development of a National Spectrum
Workforce Plan. The Presidential Memorandum on Modernizing United
States Spectrum Policy and Establishing a National Spectrum Strategy,
also released on November 13, 2023, establishes a clear and consistent
spectrum policy and a process for resolving spectrum-related conflicts
effectively. Congressional support for the Administration's modernized
spectrum policy and efforts included in the National Spectrum Strategy
will help facilitate better agency coordination around spectrum.
Solar Imports and Domestic Manufacturing
Last year, Congress passed the Inflation Reduction Act, which makes
substantial investments in solar energy and manufacturing. In August
2023, the Department of Commerce determined that solar panel
manufacturers in four Southeast Asian countries attempted to evade U.S.
trade rules by using Chinese-sourced materials subject to tariffs
without paying applicable duties.\4\ These countries account for nearly
three-quarters of the solar modules imported to the United States.\5\
It is critical to support domestic solar manufacturing capacity while
keeping our trading partners accountable.
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\4\ https://www.commerce.gov/news/press-releases/2023/08/
department-commerce-issues-final-determination-circumvention-inquiries
\5\ https://www.wusf.org/2023-08-18/the-u-s-imports-most-of-its-
solar-panels-a-new-ruling-may-make-that-more-expensive
Question 1. What can the Commerce Department do to support U.S.
solar manufacturers while maintaining the supply of solar panels needed
---------------------------------------------------------------------------
to satisfy current project demands?
Answer. The Department believes it is critical to build up the
domestic manufacturing base required to deploy clean energy across the
United States. The Biden-Harris Administration has prioritized
investments that will create good-paying jobs and build secure solar
supply chains in the U.S., including through tax credits in the
Inflation Reduction Act (IRA) such as increased tax benefits for
taxpayers who meet the prevailing wage and apprenticeship requirements.
Thanks to the President's Investing in America agenda, more than 90
Gigawatts (GW) of private-sector investments in U.S. solar
manufacturing have been announced since the President took office, with
about half of that coming in just the seven months since the passage of
the IRA. America is now on track to increase domestic solar panel
manufacturing capacity eight-fold by the end of the President's first
term.
Additionally, through SelectUSA, the U.S. government program housed
within the Commerce Department which focuses on facilitating and
promoting foreign investment into the United States, solar energy has
been a key focus. Since the passage of the IRA, SelectUSA has
facilitated clean tech investments into the United States worth over
$10.2 billion.
In May 2023, SelectUSA assisted Enel North America to choose Inola,
Oklahoma as the location to build its new industrial-scale
manufacturing facility for innovative, sustainable and American-made
photovoltaic (PV) cells and modules. The factory, which is expected to
have an annual production capacity of 3 GW, represents an initial
investment in excess of $1 billion and is anticipated to create 1,000
new direct permanent jobs by 2025. The project includes the potential
for a second phase that would scale the factory to reach 6 GW of annual
production, creating an additional 900 new direct jobs. SelectUSA also
assisted Philadelphia Solar, a Jordanian based solar panel company that
announced investment plans in November 2022 after passage of the IRA.
Initial investment plans include $100 million to install a 1.2GW
manufacturing line for U.S.-made mono-Passivated Emitter and Rear Cell
(PERC) modules by 2024, with plans to invest in state-of-the-art cells
production line by 2025 to support over 400 anticipated jobs. And in
October 2022, Japanese automotive manufacturer Honda and South Korean
Electric Vehicle (EV) battery manufacturer LG Energy Solutions
announced a $4.2 billion investment to open a new EV battery plant and
expand existing plants in Ohio, which is expected to create 2,527 jobs.
The United States is also committed to building a coalition of
allies and partners to invest in the creation of strong, independent,
and reliable clean energy supply chains that puts the free world in
charge of its own clean energy future. For example:
Through the Clean Economy pillar (Pillar 3) of the Indo-
Pacific Economic Framework for Prosperity (IPEF), we are
negotiating high-standard provisions with 13 other partners
that will help grow U.S. exports for clean energy tech and help
ensure that partners in the region work together, rather than
turn to the PRC for their financing and technologies.
On May 20, 2023, the Quad (consisting of the U.S.,
Australia, India, and Japan) announced that it will work
together to identify and address gaps in our manufacturing
capacity for critical clean energy materials and technologies.
In particular, the program will focus on the supply chains for
solar PVs, hydrogen electrolyzer, and EV battery technologies.
Quad partners are contributing funding, technical expertise,
and in-kind support to the supply chain assessment efforts and
subsequent investment decisions. The Quad also established
joint principles for clean energy supply chains.
Also on May 20, 2023, the United States and Australia signed
a statement of intent to advance our climate cooperation
through the Australia-United States Climate, Critical Minerals,
and Clean Energy Transformation Compact, including coordination
to spur the diversification and expansion of clean energy
supply chains.
At the Clean Energy Ministerial, the United States co-leads
a new initiative to foster the adoption of policies that
transform the global solar supply chain to be more diverse,
transparent, and environmentally and socially responsible.
As you noted, Commerce is also entrusted with the responsibility to
investigate allegations of unfair trade to protect American businesses
and workers from such harmful practices. On August 18, 2023, the
Commerce Department announced the final determinations in the
circumvention inquiries of solar cells and modules from the People's
Republic of China (PRC). Commerce found that certain Chinese producers
are shipping their solar products through Cambodia, Malaysia, Thailand,
and/or Vietnam for minor processing in an attempt to avoid paying
antidumping and countervailing duties (AD/CVD). The final determination
affirms the preliminary findings in most respects and underscores the
importance of rigorously enforcing trade law. Specifically, Commerce
found that five companies were attempting to avoid the payment of U.S.
duties by completing minor processing in third countries, and that
three companies were not circumventing. Commerce also found that
certain unexamined companies were circumventing.
Pursuant to the Presidential Proclamation issued on June 6, 2022,
and Commerce's Final Rule ``Procedures Covering Suspension of
Liquidation, Duties and Estimated Duties in Accord With Presidential
Proclamation 10414'', duties will not be collected on any solar module
and cell imports from these four countries until June 2024, as long as
the imports are consumed in the U.S. market within six months of the
termination of the President's Proclamation. Importantly, importers
must certify that these modules and cells are installed within that
time frame, lest they risk possible enforcement action by Customs and
Border Protection. This provides U.S. solar importers with sufficient
time to adjust supply chains and ensure that sourcing is not occurring
from companies found to be violating U.S. law. Solar cells made in one
of the four Southeast Asian countries, even if made from wafers from
China, that are then exported to a non-inquiry country and further
assembled into modules or other products there, before exportation to
the United States, are not subject to Commerce's final circumvention
findings.
Under U.S. law, Commerce may conduct a circumvention inquiry when
evidence suggests that merchandise subject to an existing AD/CVD order
is completed or assembled in third countries from parts and components
imported from the country subject to the order. AD/CVD orders are
designed to provide relief to the U.S. domestic industries when they
are facing unfair competition. The Department's final determinations
underscore Commerce's commitment to holding China accountable for its
trade distorting actions, which undermine American industries, workers,
and businesses.
Long Term Effects of Semiconductor Investments
The CHIPS and Science Act (P.L. 117-167) is making substantial
investments in American manufacturing and research and development.
Question 1. When do you expect funding awards to be finalized?
Question 2. How will a project's economic and social impact (such
as workforce development and diverse supplier commitments) affect the
award amount?
Question 3. How is the Commerce Department factoring the effects of
climate change into how semiconductor manufacturing funding is
allocated, given announced projects in the Southwest?
Question 4. In making funding decisions, how will the Commerce
Department consider the extent to which a company prioritizes
investments refresh technology and re-invest in facilities?
Question 5. The United States currently produces less than five
percent of the world's memory chips, with many of the remaining chips
coming from countries in Asia.\6\ How is the CHIPS Program Office
planning to ensure that there is domestic production of memory chips so
that the United States does not have to rely solely on overseas
production for memory chips?
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\6\ https://www.nytimes.com/2023/01/01/technology/us-chip-making-
china-invest.html
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Answer. The Department seeks to move as fast as possible with all
funding opportunities to ensure that CHIPS funding can meet the
pressing economic and national security needs. The Commerce
Department's CHIPS for America program will evaluate each project
holistically using the criteria articulated in our Notice of Funding
Opportunities for CHIPS funds under the section 9902 Incentives
Program, focused on commercial manufacturing facilities. Above all, the
Department is seeking projects that advance economic and national
security.
On January 4, 2024, the Department announced that it has reached a
non-binding preliminary memorandum of terms (PMT) with Microchip
Technology Inc. to provide approximately $162 million in Federal CHIPS
incentives to support the onshoring of the company's semiconductor
supply chain. This investment would enable Microchip to significantly
increase its U.S. production of microcontroller units (MCUs) and other
specialty semiconductors built on mature-nodes critical to America's
automotive, commercial, industrial, defense, and aerospace industries
and create over 700 direct construction and manufacturing jobs.
This announcement is the second PMT announcement by the Department
under the CHIPS and Science Act. The first was announced in December
2023--a PMT with BAE Systems Electronic Systems, a business unit of BAE
Systems, Inc., that will provide approximately $35 million in Federal
incentives under the CHIPS and Science Act to modernize the company's
Microelectronics Center in Nashua, New Hampshire, which is designated
as a Trusted Foundry by the Department of Defense. Recently, the
Department announced that it has signed a PMT with GlobalFoundries (GF)
to provide approximately $1.5 billion to strengthen U.S.
competitiveness in current-generation and mature-node semiconductor
production, and support economic and national security capabilities.
The proposed funding would support a new state-of-the-art facility,
significant capacity expansion, and the modernization of GF's U.S.
manufacturing sites in New York and Vermont, which produce essential
automotive, communications, and defense semiconductor technologies. The
Department also announced having reached a PMT with Intel Corporation
to provide up to $8.5 billion to support strengthening all major
technical processes for leading-edge chips in the United States,
including proposed investments in Arizona, New Mexico, Ohio, and
Oregon. Additional projects are anticipated to be announced in the
coming months.
In the application review process, CHIPS Program Office (CPO)
examines the risk of climate change, and a project's climate resiliency
in two places: (1) under the Technical Feasibility section of the
application, companies are asked to provide information on resource use
to include water sources, project water consumption, as well as its air
emissions and water effluent; and (2) in the Broader Impacts section of
the application, the companies are asked to provide information
regarding their climate resiliency plans. These responses are factored
into the merit review scoring for these sections.
As part of the due diligence process, CPO expands on the answers
provided in the application to better answer the question ``How is the
facility designed or how will the facility operate to address weather-
and climate-related risks that may occur over the lifetime of the
facility.'' During the due diligence process, CPO requests and examines
any climate resiliency plans or climate risk mitigation strategies
provided by the company.
In addition to reviewing specific applications, CPO has also worked
to identify potential cumulative impacts to resources vulnerable to
climate change to ensure the overall success of semiconductor projects
and managing their effect on the environment. As such, CPO has
undertaken additional analysis of resource allocations in areas most
vulnerable to climate change by engaging with state and local
regulators and officials to better understand the impacts of the
semiconductor projects to natural resources.
On December 27, 2023, CHIPS for America program published a draft
Programmatic Environmental Assessment (PEA) on the Federal Register
(``Notice of Availability of Draft Programmatic Environmental
Assessment for Modernization and Internal Expansion of Existing
Semiconductor Fabrication Facilities Under the CHIPS Incentives
Program''). The purpose of the PEA is to evaluate the environmental
impacts of modernization and internal expansion projects that are
eligible for the February 2023 CHIPS Incentives Program Commercial
Fabrication Facilities Notice of Funding Opportunity (NOFO). The
finalization of the PEA will allow CPO to complete a more streamlined
NEPA review of these types of modernization projects. Comments must be
received by January 25, 2024. The CHIPS Environment team is dedicated
to creating an efficient and robust NEPA process. As detailed in the
February 2023 NOFO, the CHIPS Program seeks to support current-
generation and mature-node semiconductors facilities vital to our
country's national and economic security. A streamlined environmental
review will allow these upgrade and modernization projects to proceed
expeditiously.
As stated in our NOFO, Direct Funding amount will take into account
a variety of criteria, including the project's financial model and
expected cash flows, the project's estimated internal rate of return
(IRR), the strategic importance of the project to U.S. economic and
national security, the extent of private investment, the risks
associated with the project, and other criteria.
The Department expects applicants to design their projects so that
they avoid, minimize, and mitigate the potential for significant
effects on the environment, and we are assisting applicants with the
process for adhering to applicable environmental regulations.
As outlined in the NOFO, one of the program's six Evaluation
Criteria is ``Broader Impacts'' that includes a company's commitment to
building domestic R&D facilities (and in participating in other major
R&D efforts in the United States) to ensure process technology
innovation is occurring in the United States and a sustainable
ecosystem is being built, as well as the strength of the applicant's
commitment to support CHIPS R&D programs such as the National
Semiconductor Technology Center (NSTC) and National Advanced Packaging
Manufacturing Program (NAPMP).
As outlined in the Commerce Department's ``Vision for Success:
Commercial Fabrication Facilities'' paper, the Department's four
strategic objectives include:
First, for leading edge logic, our goal is to both design
and produce the most advanced chips here, in the United States,
by the end of the decade. Right now, we manufacture zero of the
world's most advanced chips on our shores. Specifically, by the
end of the decade, the U.S. will have at least two new large-
scale clusters of leading-edge logic fabs, with each cluster
including multiple commercial-scale fabs, a large and skilled
workforce, nearby suppliers, R&D facilities, and specialized
infrastructure.
Second, the U.S. will be home to multiple high-volume
advanced packaging facilities. Packaging--the process of
putting fabricated chips into containers that will ultimately
be embedded in products--is an essential part of the
manufacturing process, and one that will be core to new
innovations in functionality and efficiency.
Third, U.S.-based fabs will produce high-volume DRAM memory
chips on economically competitive terms.
And fourth, the U.S. will have increased its production
capacity for the current-generation and mature chips that are
vital to U.S. economic and national security.
______
Response to Written Questions Submitted by Hon. Peter Welch to
Hon. Gina M. Raimondo
Secretary Raimondo, as you may know, Vermont is a leader in the
development of Radio Frequency (RF) technologies and is leading the way
in the production of Gallium Nitrate (GaN) printed on Silicon chips, a
new technology that provides greater power capacity for older chips. In
fact, Vermont's largest employer is a semiconductor company called
GlobalFoundries. GaN chips fabricated from legacy nodes play a critical
role in our transition to 5G technologies and beyond, particularly for
cars and smart appliances, which would burn out smaller chips or
silicon-only chips. Unlike in the past, the production of smaller chips
is no longer the only route to cutting-edge technology. The CHIPS and
Science Act included $2 billion in incentives to produce mature, legacy
node semiconductors. However, the United States is not the only country
that is investing in onshoring semiconductor manufacturing. Many
foreign companies and countries also dominate this space.
Question 1. How is the Department incentivizing demand for fabless
companies to use U.S.-made chips?
Question 2. What is the Department doing to ensure that foreign
competitors are not undercutting U.S. semiconductor companies?
Answer. U.S. fabless companies are well-positioned to benefit from
the growth in U.S. semiconductor manufacturing. The Commerce
Department's CHIPS Program Office (CPO) is in a regular dialogue with
customers, whose message is clear: they want supply chain resilience.
Diversifying risk means buying chips made in the United States, and
companies understand that this is in their best interest.
Advancing U.S. national security is the primary objective of the
CHIPS program. It is imperative that our investments and innovation
benefit the American people, not our adversaries. In September 2023,
the Commerce Department's CHIPS for America program released the final
rule implementing the national security guardrails of the bipartisan
CHIPS and Science Act. The rule elaborates on two core provisions of
the statute: the first, prohibiting CHIPS funds recipients from
expanding material semiconductor manufacturing capacity in foreign
countries of concern for ten years; and the second, restricting
recipients from certain joint research or technology licensing efforts
with foreign entities of concern.
In December 2023, the Department announced that it reached a non-
binding preliminary memorandum of terms (PMT) with BAE Systems
Electronic Systems, a business unit of BAE Systems, Inc., that will
provide approximately $35 million in Federal incentives under the CHIPS
and Science Act to modernize the company's Microelectronics Center in
Nashua, New Hampshire, which is designated as a Trusted Foundry by the
Department of Defense.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Hon. Gina M. Raimondo
CHIPS Application Requirements
The Notice of Funding Opportunity (NOFO) issued by your Department
in March 2023 provided guidance for CHIPS Act commercial fabrication
facility applicants that went far beyond the text of the statutory law,
such as requiring a plan for access to child care for facility and
construction workers; discriminating against non-union labor by
strongly encouraging the use of project labor agreements (PLAs); and
signaling strong support for providing paid leave, housing assistance,
and transportation assistance to employees.
Question 1. Of the 100+ firms that have applied for CHIPS funding,
how many already provide on-or near-site childcare to their employees
that, in the view of your agency, meets the recommendations articulated
in the March NOFO? Please list the firms.
Answer. The Department is currently evaluating applications and
treats information submitted by applicants as confidential. To avoid
any inadvertent disclosures and premature decisions, the Department is
currently not disclosing how many applicants already provide on or
near-site childcare to their employees or meet the recommendations
articulated in the March NOFO. More information about CHIPS for
America's commitment to protecting Confidential Business Information
(CBI) can be found here: https://www.nist.gov/chips/handling-
confidential-information.
Question 2. How many firms applying for CHIPS funding already
provide transportation assistance that, in the view of your agency,
meets the recommendations articulated in the NOFO? Please list the
firms.
Answer. The Department is currently evaluating applications and
treats information submitted by applicants as confidential. To avoid
any inadvertent disclosures and premature decisions, the Department is
currently not disclosing how many applicants already provide
transportation assistance or meet the recommendations articulated in
the March NOFO. More information about CHIPS for America's commitment
to protecting confidential business information (CBI) can be found
here: https://www.nist.gov/chips/handling-confidential-information.
Question 3. How many firms applying for CHIPS funding already
provide housing assistance that, in the view of your agency, meets the
recommendations articulated in the NOFO? Please list the firms.
Answer. The Department is currently evaluating applications and
treats information submitted by applicants as confidential. To avoid
any inadvertent disclosures and premature decisions, the Department is
currently not disclosing how many applicants already provide housing
assistance or meet the recommendations articulated in the March NOFO.
More information about CHIPS for America's commitment to protecting
confidential business information (CBI) can be found here: https://
www.nist.gov/chips/handling-confidential-information.
Question 4. How many firms applying for CHIPS funding already
provide paid leave that, in the view of your agency, meets the
recommendations articulated in the NOFO? Please list the firms.
Answer. The Department is currently evaluating applications and
treats information submitted by applicants as confidential. To avoid
any inadvertent disclosures and premature decisions, the Department is
currently not disclosing how many applicants already provide paid leave
or meet the recommendations articulated in the March NOFO. More
information about CHIPS for America's commitment to protecting
confidential business information (CBI) can be found here: https://
www.nist.gov/chips/handling-confidential-information.
Question 5. Yes or no: Did the Commerce Department conduct any type
of fiscal or economic analysis when it decided to add the provisions
described above?
a. If yes, did such analysis include how much it would cost
chipmakers to provide these benefits to their employees?
Answer. Recruiting, training, and retaining a large, skilled, and
diverse workforce will be critical to strengthening the U.S.
semiconductor ecosystem. Delivering on the program's national and
economic security objectives demands major investments in the
semiconductor workforce that will support good-paying jobs across the
industry.
Recognizing this, Congress in the CHIPS and Science Act directed
the Department to include workforce development requirements in
awarding semiconductor incentives. The statute requires that the
Department issue awards only to applicants who have ``made commitments
to worker and community investment'' including ``training and education
benefits paid by the'' applicant and ``programs to expand employment
opportunity for economically disadvantaged individuals.'' 15 U.S.C.
Sec. 4652(a)(2)(B). The statute also requires funding recipients to
``secure[] commitments from regional educational and training entities
and institutions of higher education to provide workforce training,''
as well as to document and develop a strategy to meet workforce
needs.'' 15 U.S.C. Sec. 4652(a)(2)(B). Finally, the statute explicitly
states that CHIPS funding may be used to support workforce development.
See 15 U.S.C. Sec. 4652(a)(4)(B).
Consistent with this statutory mandate, the first funding
opportunity requires applicants to submit workforce development plans
for the workers who will operate their facilities and the construction
workers who will build them.
The CHIPS Program Office has released a workforce development
planning guide that offers more details on these requirements as well
as other workforce-related provisions in the first funding opportunity,
including the requirement for applicants requesting direct funding over
$150 million to submit a plan to provide their facility and
construction workers with access to child care. A summary of key
workforce provisions is available on the CHIPS website.
Question 6. Yes or no: Did the Commerce Department analyze the cost
to applicants to use 100 percent renewable energy for facility
operations and whether this recommendation could be achieved in
practice?
Answer. As stated in the Notice of Funding Opportunity: CHIPS
Incentives Program--Commercial Fabrication Facilities, all applicants
are encouraged to make use of renewable energy to the maximum extent
possible for operation of their projects, and applicants constructing a
new facility for fabricating semiconductors are strongly encouraged to
use 100 percent renewable energy for facility operations. This is a
recommendation, not a requirement, and is only one factor among many
considered by CPO when reviewing applications. Without knowing, for
example, which companies will apply for financial assistance, their
locations, or anticipated demand for energy, it would not have been
possible for CPO to conduct a cost analysis at the time the NOFO was
issued. CPO will work closely with each applicant to determine what is
technologically and economically feasible in terms of implementing this
recommendation.
Applicant Selection Methodology
The first tranche of CHIPS grants are expected to be announced this
fall. Although the CHIPS Program Office (CPO) has held briefings and
released materials about how to navigate the NOFO application process,
it has not published its methodology for selecting applicants,
including how heavily specific application components will be weighed.
Question 1. Please provide a blank pre-application and full
application for commercial fabrication facility applicants for the
record.
Question 2. What is your agency's methodology for selecting
successful applicants? Please provide the metrics or points system that
informs the CPO's selection process, and describe how the CPO developed
this methodology.
Question 3. How are you weighting March NOFO application components
that were not included in the CHIPS and Science Act (e.g., plans for
workforce development and childcare services, and NEPA review) against
other application components, such as finances and feasibility? Please
describe.
Answer. Applicants can find information on how to complete the pre-
application and application--as well as several resources, including
webinars and template financial models--on the website. The pre-
application and application consist of structured data in the
application web portal and the questions that can be found in the CHIPS
Incentives Program--Commercial Fabrication Facilities, Notice of
Funding Opportunity (NOFO) issued on February 28, 2023. There is
accordingly no ``blank pre-application and full application.''
CPO undertakes a rigorous application review process to select
successful applicants. CPO conducts a merit review process assessing
whether projects are eligible for the CHIPS Incentives Program and the
strengths and weaknesses of projects against the six criteria listed
below. The evaluation will be qualitative, not numerical. The first
criterion--the extent to which the application addresses the program's
economic and national security objectives is of primary importance and
receives the greatest weight. The remaining five criteria will receive
approximately equal weight. Applications will only be recommended for
award if each criterion is adequately addressed in the application
materials. If an application is deficient in one or more areas, the
applicant may be requested to make certain revisions in order to
continue in the review and selection process.
(1) Economic security objectives will assess how an application
advances security by building sustainable domestic capacity
that reduces U.S. reliance on vulnerable or overly concentrated
production.
(2) National security objectives will assess whether applicants
address national security considerations, including by securing
supply chains for technologies used by government organizations
and their contractors. In addition, it will assess a project's
operational vulnerabilities and resilience to threats from
foreign entities of concern.
(3) Commercial viability addresses the project's long-term
commercial viability to ensure there is a reasonable market
environment and demand for the project's output.
(4) Financial strength addresses the project's financial strength
and its ability to withstand stress in market downturn
conditions.
(5) Technical Feasibility and Readiness addresses the feasibility of
execution of the project from construction to ongoing
operational execution and maintenance.
(6) Broader Impacts addresses the degree to which the proposed
project will provide broader public impacts.
The prioritization and selection factors for selecting applications
for funding are below and all citations refer to the Notice of Funding
Opportunity. The Department will give significant primary weight to the
first factor in prioritizing applications in the review and selection
process.
(a) Contribution to economic and national security, consistent with
strategic goals described in Section I.C.1 and the evaluation
criteria described in Section V.A.1
(b) Efficient use of taxpayer dollars, as described in Section I.C.3
and the evaluation criteria in Section V.A.3
(c) Creation of broader impacts, consistent with the description in
Section I.C.6 and the evaluation criteria in Section V.A.6
(d) Extent to which the applicant is prepared to proceed to
execution
(e) Whether the project will produce chips for critical
infrastructure
(f) Whether the applicant, or a corporate affiliate of the
applicant, has previously received financial assistance in this
program
(g) Whether the project duplicates other projects funded by the
Department or other Federal agencies
(h) Diversity of awards in the program, including based on
geographic location of facilities receiving support and the
size of awards.
Small-Scale NOFO
In September, the CPO released a long-awaited NOFO tailored for
small businesses and small-scale projects. During a briefing to
Congressional staff, a member of CPO indicated that the team is not
prepared to provide thousands of grants to smaller companies, and
``strongly encouraged'' applicants to apply as a consortium. These
consortia may include groups that would not normally qualify for CHIPS
funding, such as ``workforce training providers, labor unions, economic
development corporations, institutions of higher education,
philanthropic foundations, industry organizations, Tech Hubs, or other
relevant entities.'' \1\ Requiring smaller companies to develop
consortia to be competitive in the application process places an undue
burden on parts of the semiconductor supply chain that the CHIPS Act
was intended to strengthen.
---------------------------------------------------------------------------
\1\ See ``Notice of Funding Opportunity (NOFO): CHIPS Incentives
Program--Facilities for Semiconductor Materials and Manufacturing
Equipment,'' https://www.nist.gov/system/files/
documents/2023/09/29/
CHIPS%20$20Facilities%20for$20Semiconductor%20Materials%20and
%20Manufacturing%20 Equipment%20NOFO.pdf
Question 1. Please describe how the CPO decided which organizations
should be represented in a consortium.
Answer. The Commerce Department's CHIPS Program Office's second
Notice of Funding Opportunity (NOFO), released September 29, 2023,
seeks applications for smaller-scale projects involving the
construction, expansion, or modernization of semiconductor materials
and manufacturing equipment facilities for which the capital investment
falls below $300 million. These applicants play a vital role in
producing the inputs necessary for producing semiconductors in the
United States, support our domestic manufacturing ecosystem, and create
jobs and opportunities in communities across the country. These
projects will produce the equipment, chemicals, gases, and other
materials that are critical to manufacturing semiconductors in America.
The Department will seek applications that advance any of the three
goals outlined in the Vision for Success. For projects advancing the
third goal--supporting vibrant U.S. fab clusters--the Department
encourages suppliers to consider applying as part of a consortium that
promotes the development and sustainability of semiconductor clusters.
The Department has defined a cluster as a geographically compact
area with multiple commercial-scale fabs owned and operated by one or
more companies; a large, diverse, and skilled workforce; nearby
suppliers to the semiconductor industry; R&D facilities; utilities; and
specialized infrastructure, such as chemical processing and water
treatment facilities. This is the kind of regional semiconductor
ecosystem the Department aims to create in support of long-term U.S.
competitiveness.
For the purposes of the second notice of funding opportunity,
applicants that claim to support clusters are strongly encouraged to
consider applying as part of a consortium. Although consortia are
strongly encouraged for cluster-focused applications, the Department
welcomes applications for standalone projects that meaningfully advance
any of the three strategic objectives outlined above.
Applying as a consortium can be beneficial in several ways. For
instance, by applying as a consortium, entities can work together to
meet some of the eligibility requirements of the statute (including,
for example, workforce strategy and community investments).
Given the applicants for the supply chain NOFO are smaller entities
with smaller projects, the application process is designed to be much
simpler and more streamlined. Applicants will fill in a Concept Plan--a
very streamlined version of the pre-application--and then be asked by
invitation only to participate in the full application phase. The
information CPO will request will be much less intensive than in the
first NOFO, including more streamlined financial information.
CHIPS for America Partner Teaming List
In June 2023, the CPO announced the CHIPS for America Partner
Teaming List. This list is geared toward the ``many entities interested
in supporting the CHIPS Act that may not be eligible to apply on their
own,'' \2\ including childcare providers and labor unions. In addition
to providing CHIPS funding to entities the Act did not intend to fund,
the Teaming List does not appear to be properly managed. Available on
CHIPS's website, the List is an Excel spreadsheet; the CPO further
states it is not ``endorsing, sponsoring, or otherwise evaluating the
qualifications of the entities and organizations that have self-
identified for placement on the list.'' \3\
---------------------------------------------------------------------------
\2\ See ``CHIPS for America Teaming Partner List,'' NIST, https://
www.nist.gov/chips/chips-america-teaming-partner-list
\3\ Ibid.
Question 1. How is the CPO vetting the companies and entities that
---------------------------------------------------------------------------
appear on the Teaming List?
Question 2. Have any companies or entities been removed from, or
denied listing on, the Teaming List? If so, please list which ones and
why.
Question 3. Please describe the CPO's decision-making process to
create a teaming list for entities that do not qualify for CHIPS
funding versus those that do.
Question 4. Did you perform a cyber risk assessment regarding the
use of an unvetted Excel sheet? For example, what happens if a listed
company is not transparent about its funding sources or offerings, and
a smaller company unknowingly partners with them on a small-scale NOFO
application, per the recommendation of the CHIPS Program Office?
Question 5. How is the CPO vetting the companies and entities that
appear on the Teaming List?
Question 6. Is the CPO regularly checking the excel spreadsheet for
cybersecurity vulnerabilities, such as malware?
Question 7. Please describe the CPO's decision-making process to
create a teaming list for entities that do not qualify for CHIPS
funding versus those that do.
Answer. CHIPS for America made available a teaming partner list
that will enable entities to share information, foster collaboration,
and advance shared goals. This list allows entities to share their
contact information and capabilities so that potential applicants can
reach out and consider utilizing their expertise to advance the CHIPS
Act's objectives. Teaming partner lists are common across the
government and used at the Department of Energy, as an example. As
stated on the website, CPO ``does not evaluate the qualifications of
the entities and organizations that have self-identified for placement
on the list.'' CPO encourages ``entities seeing to utilize the list []
to conduct their own due diligence of any entity they contact.''
Since there are many entities interested in supporting the
objectives of the CHIPS Act that may not be eligible to apply on their
own, the Department of Commerce is making it easier to facilitate
potential partnerships and collaboration that can advance economic and
national security interests.
This list includes businesses that may not qualify as covered
entities under the CHIPS funding opportunities, as well as
organizations that provide support services relevant to the execution
of the CHIPS incentives program. These entities can include educational
and workforce training providers; childcare providers; organizations
that engage or support minority-owned, women-owned, and veteran-owned
businesses; community-based organizations; labor unions; and others.
This list does not directly connect entities to potential applicants,
but enables external entities to explore potential strategic
partnerships.
CHIPS Program Accountability
In your September 19 testimony before the House Committee on
Science, Space, and Technology, you said, ``I think that the five-year
mark is [a] really important mark, because it's the time that you know,
these fabs should be coming online. And we should be making these chips
at scale.'' \4\ Although the United States cannot build manufacturing
capacity overnight, five years is a long time to see results,
especially when China is heavily investing in its semiconductor
industry.
---------------------------------------------------------------------------
\4\ See ``Full Committee Hearing--CHIPS on the Table: A one year
review of the CHIPS and Science Act,'' House Committee on Science,
Space, and Technology, https://science.house.gov/2023/9/chips-on-the-
table-a-one-year-review-of-the-chips-and-science-act
Question 1. What measures of success or milestones have you
developed that demonstrate we are strengthening supply chain resiliency
---------------------------------------------------------------------------
before the five-year mark?
Question 2. What benchmarks are in place to ensure that the
Commerce Department will not request additional funds to meet the CHIPS
program's objectives? If none exist, please describe which projects the
United States should prioritize first to meet economic and national
security objectives.
Answer. So many of our defense capabilities--like hypersonic
weapons, drones, and satellites--depend on a supply of chips that are
not currently produced in America. In 2021, car prices increased nearly
30 percent and were responsible for a third of core inflation--all
because we did not have enough chips. In 2022, because Ford did not
have access to enough chips--even for simple parts like windshield
wipers--their workers in places like Michigan and Indiana only worked a
full week three times. The chip shortage meant medical device makers
did not have enough chips to produce life-saving products like
pacemakers and insulin pumps. Without manufacturing strength in the
United States, and the innovation that flows from it, we are at a clear
disadvantage in the race to invent and commercialize future generations
of technology. The CHIPS and Science Act allocated $39 billion for
manufacturing incentives to encourage companies to build and expand.
As outlined in the Commerce Department's ``Vision for Success:
Commercial Fabrication Facilities'' paper, the Department's four
strategic objectives include:
First, for leading edge logic, our goal is to both design
and produce the most advanced chips here, in the United States,
by the end of the decade. Right now, we manufacture zero of the
world's most advanced chips on our shores. Specifically, by the
end of the decade, the United States will have at least two new
large-scale clusters of leading-edge logic fabs, with each
cluster including multiple commercial-scale fabs, a large and
skilled workforce, nearby suppliers, R&D facilities, and
specialized infrastructure.
Second, the United States will be home to multiple high-
volume advanced packaging facilities. Packaging-the process of
putting fabricated chips into containers that will ultimately
be embedded in products-is an essential part of the
manufacturing process, and one that will be core to new
innovations in functionality and efficiency.
Third, U.S.-based fabs will produce high-volume DRAM memory
chips on economically competitive terms.
And fourth, the United States will have increased its
production capacity for the current-generation and mature chips
that are vital to U.S. economic and national security.
The Department currently assesses that it has sufficient
appropriations to meet the economic and national security objectives of
the CHIPS program.
DOD Tech Hub Coordination
Last month, the Defense Department (DOD) announced $240 million in
funding for eight new semiconductor ``Tech Hubs.'' The Commerce
Department is in the process of designating at least 20 of its own Tech
Hubs. While all DOD Tech Hubs are funded, it is not a guarantee that
all DOC Tech Hubs will receive funding.
Question 1. Please describe the coordination process between DOD
and the Commerce Department to select these initial hubs.
Question 2. How will DOC ensure there is not program duplication?
Question 3. Since DOD's hubs will also serve commercial aims, how
is your agency coordinating with DOD to ensure national security goals
are met and taxpayer dollars are spent judiciously?
Question 4. As the Commerce Department selects its Tech Hubs, is
the location of DOD-funded Hubs under consideration?
Answer. On October 23, 2023, the Department of Commerce's Economic
Development Administration, announced the designation of 31 Tech Hubs
in regions across the country. This economic development initiative is
designed to drive regional innovation and create jobs by strengthening
a region's capacity to manufacture, commercialize, and deploy
technology.
The Tech Hubs program will help develop and grow innovative
industries in diverse regions across the country in a broad array of
industries that include not only semiconductors but also clean energy,
critical minerals, biotechnology, and others. Tech Hubs will bring the
benefits and opportunities of scientific and technological innovation
to communities across the country, with nearly three-quarters
benefiting small or rural areas and more than three-fourths benefiting
historically underserved communities. They bring together private
industry, state and local governments, institutions of higher
education, labor unions, Tribal communities, nonprofits, and more to
compete for implementation grants of approximately $40-70 million to
further develop these fields and make transformative investments in
innovative industries.
EDA has and will continue to coordinate across the Department of
Defense, including with its Office of Strategic Capital and its Defense
Innovation Unit, in its implementation of the Tech Hubs program. The
Tech Hubs program takes a whole-of-government approach to growing
economies and strengthening national security through technology and
innovation. EDA has designed its Tech Hubs funding to consider and
evaluate other Federal investments, including DOD's Microelectronics
Commons Hubs, in its application review to identify complementary,
aligned co-investments and avoid any duplication.
Export Controls and CHIPS Program National Security Guardrails
The recently updated October 7th semiconductor export controls and
CHIPS program national security guardrails share the same goal: Slowing
down China's technological development.
Question 1. What steps are the Departments of Commerce and Treasury
taking to ensure that these two tools are aligned and that each are
fully enforced?
Question 2. Did you take the CHIPS program national security
guardrails into account when developing the final export control rule?
If so, how?
Answer. The Department of Commerce has designed the national
security guardrails on CHIPS investments to complement export controls
on advanced computing semiconductors, semiconductor manufacturing
equipment, and supercomputing items to countries of concern. Both
export controls and the guardrails are designed to protect national
security. The guardrails apply to the expansion of certain
manufacturing capacity in the People's Republic of China (PRC) by CHIPS
recipients. Export controls are focused on limiting access to specific
technologies and specific end-users rather than on manufacturing
capacity.
BIS and the CHIPS Program Office coordinated on the development of
the guardrails, which were designed to prevent most future investment
in countries of concern by CHIPS recipients, and to allow existing
facilities to continue viably operating to avoid disrupting existing
supply chains, consistent with any applicable U.S. export control
regulations.
Specifically, the final rule implementing the CHIPS guardrails
refer to restrictions outlined in BIS's rules, and also take into
account the technology thresholds set forth in BIS's restrictions on
advanced semiconductors and semiconductor manufacturing equipment
released in October 2022, and subsequently updated in October 2023.
Together, export controls and the proposed national security guardrails
help protect U.S. investments in technology, which will advance the
national security of the United States and our allies.
CHIPS Act Section 48D Rule
The CHIPS Act added Section 48D to the Internal Revenue Code to
incentivize the manufacture of semiconductors and semiconductor
manufacturing equipment. Though the Treasury Department has not
released its final rule, it has signaled it intends to restrict these
tax incentives in a way that would make companies, such as materials
manufacturers, that are eligible for Commerce Department CHIPS grants
ineligible for Treasury incentives.
Question 1. Did the Commerce Department coordinate with the
Treasury Department on its proposed definitions on entities eligible
for Treasury Department tax incentives? Why are the definitions used by
these agencies so different?
Answer. Commerce and Treasury are coordinating closely on the
investment tax credit (ITC) to ensure that incentives are complementary
and advance our shared economic and national security goals. The
Treasury Department is in the lead of implementing the CHIPS investment
tax credit (ITC) and continues working to publish its final rule.
Government Transparency
The Executive Branch is required to provide data and regularly
report to Congress to facilitate the legislative branch's oversight
responsibilities.
Question 1. What data from CHIPS grants applications does the CPO
intend to provide to Congress?
Question 2. What information will the CPO make available to the
general public?
a. What data will be provided for USASpending.gov?
Answer. The Department considers the submission of Statements of
Interest (SOIs), pre-applications, or applications and the identities
of applicants as confidential business information (CBI). More
information about CHIPS for America's commitment to protecting CBI can
be found here: https://www.nist.gov/chips/handling-confidential-
information.
CHIPS National Security Guardrails
In September, the Commerce Department released the final CHIPS
guardrails rule, which is intended to limit the use of CHIPS funding
for investments in countries of concern like China (88 FR 17439). The
announcement accompanying the final rule states that it ``prohibits
recipients of CHIPS incentives funds from using the funds to construct,
modify, or improve a semiconductor facility outside of the United
States.'' \5\ However, it appears that the final rule does not
explicitly prohibit CHIPS Act funding recipients from investing in new
facilities, meaning that the Clawbacks would only apply to the
``material expansion'' of existing facilities.
---------------------------------------------------------------------------
\5\ See ``Biden-Harris Administration Announces Final National
Security Guardrails for CHIPS for America Incentives Program,'' U.S.
Department of Commerce, https://www.commerce.gov/news/press-releases/
2023/09/biden-harris-administration-announces-final-national-security
Question 1. Yes or no: Will new facilities be subject to the
Clawbacks in the final rule?
Answer. The national security guardrails on CHIPS investments apply
to significant transactions that involve the material expansion of
semiconductor manufacturing in foreign countries of concern. The intent
of the rule is to capture both existing and new construction of
semiconductor manufacturing facilities.
Rice's Whales Rule Impact on Safety, Security, and the Economy
In August, NOAA entered into a stipulated settlement with
environmental groups to remove millions of acres from future oil and
gas leasing offshore of Texas, Louisiana, and the Gulf Coast to
allegedly protect the Rice's whales. While the courts have temporarily
paused these actions, NOAA is currently taking comments on the creation
of a critical habitat area encompassing 28,000 square miles of Gulf of
Mexico--an area larger than the entire state of West Virginia.
NOAA used a study that has not gone through peer-review as the
rationale for much of the area being considered, and in large portions
of the proposed area, no whale has ever been detected. NOAA estimates
the total cost to the oil and gas industry, recreational and commercial
fishing sectors, and the military, for consultations under the
Endangered Species Act for this enormous area, will come to $24,000 per
year--which is a ludicrous conclusion. Worse, the closed area overlaps
with military testing grounds, and the impacts to these are barely
mentioned, much less analyzed.
Question 1. Can you commit that you will review this proposed rule
and, if (1) the science it is based on is not peer reviewed, (2) no
whale has ever been detected in large portions of the designated area,
and (3) the economic data is flawed, that you will consider withdrawing
this rule to better account for science and reality?
Answer. NOAA's National Marine Fisheries Service (NMFS) is
reviewing more than 41,000 public comments received on the proposed
rule during the extended 74-day comment period, which closed on October
6, 2023. It would be premature to commit to withdrawing the proposed
rule prior to giving full consideration to the large number of comments
received from all parties. However, NMFS is committed to ensuring that
any designation of Rice's whale critical habitat is based on the best
scientific and commercial data available, after taking into
consideration economic, national security, and any other relevant
impacts. Peer review comments on the Critical Habitat Report informing
the designation are available on NMFS's website at https://
www.noaa.gov/information-technology/endangered-species-act-critical-
habitat-report-rices-whale-id452. And the studies referenced in the
Critical Habitat Report, and relied on in support of the proposed
designation, have undergone separate peer reviews. While the Garrison
et al., (in review) study has not yet been published, the habitat
model, the underlying data and the associated model documentation were
published in two technical reports (Rappucci et al 2023, Garrison et al
2023), both of which underwent internal peer-review and are publicly
available. The model results are also available for download from the
National Centers for Environmental Information (NCEI GoMMAPPS) and on
the Cetacean Density Mapper.
Sightings of Rice's whales are uncommon because the animal is among
the rarest on the planet; however, Rice's whales have been documented
visually and acoustically throughout the proposed critical habitat
area, offshore of Texas, Louisiana, and Florida. The majority of
sightings and acoustic detections have occurred along the Gulf of
Mexico shelf break in waters 100-400 meters deep where their prey is
most abundant, which corresponds with the proposed critical habitat
boundaries. This past summer, there were two sightings of Rice's whales
in the western Gulf within approximately 100 miles off of Galveston
Texas. Rice's whales in the western Gulf have distinctive calls and
passive acoustic monitoring has confirmed year round presence of Rice's
whales in the western Gulf (heard every month of the year), with them
being heard an average of one day per week.
The economic analysis supporting the proposed critical habitat
designation is contained in the Endangered Species Act (ESA) Critical
Habitat Report. Economic impacts of critical habitat designations
primarily occur through implementation of section 7 of the ESA during
consultations with Federal agencies to ensure their proposed actions
are not likely to destroy or adversely modify critical habitat. The
analysis concludes that the proposed designation is not anticipated to
result in incremental project modifications beyond those that would
already occur absent designation. As a result, the economic impacts are
limited to the incremental administrative costs of considering effects
to Rice's whale critical habitat in section 7 consultations that would
occur absent the designation. Any activities occurring within the area
of the proposed designation that may affect the habitat for the Rice's
whale are already required to undergo Section 7 consultation. We
estimate the costs associated with the incremental administrative
effort required for section 7 consultations to consider effects to
Rice's whale critical habitat are approximately $240,000 over the next
10 years (discounted at 7 percent), or $37,000 in annualized costs (in
2022 dollars). NMFS's assessment of economic impacts of critical
habitat designation followed a well-established process, which is
summarized in the Critical Habitat Report, as informed by NMFS's ESA
4(b)(2) Policy (81 FR 7226).
Hurricane Hunter Preparedness
In late August all three of NOAA's hurricane hunters were grounded
for repairs as Hurricane Idalia made landfall in Florida. Not only were
all three planes grounded, but one crew had been flying back-to-back
missions for 11 out of 12 days leading up to the hurricane. Flying
through a hurricane is hard on both the plane and the crew. Flying this
schedule is a recipe for failure, either of the plane or the crew
members due to exhaustion. In an interview on Meet the Press, you said
that that the cause of the planes going down ``was routine
maintenance.'' However, it was four days after the hurricane before any
of the planes were ready to fly again--four days in which another
hurricane could have very well been approaching Texas.
Question 1. Was this in fact routine maintenance, and if so, why
was routine maintenance done during the height of hurricane season?
Answer. On August 16th, NOAA 42 WP-3D (NOAA 42) aircraft
experienced a fuel leak in one of its wings, which resulted in
necessary maintenance and prevented the aircraft from completing its
final hurricane mission. Due to the urgency of the maintenance, the
aircraft was flown to Waco, Texas where required outside vendors
completed the repair. This maintenance was completed and accepted on
September 6, 2023.
Because of the maintenance on NOAA 42, NOAA 43 WP-3D (NOAA 43)
aircraft began flying twice per day using both flight crews to fully
support the Idalia hurricane tasking during the latter half of August.
After completing five flights out of Fort Lauderdale into Idalia, NOAA
43's generator malfunctioned causing the crew to complete onsite
maintenance and cancel their final planned flight.
NOAA 49 Gulfstream-IV aircraft continued two flights per day
throughout the storm series until August 28th when it experienced a
failure to the pitch trim system, which is critical to keeping the
plane level during flight especially at high speeds and altitudes.
Fortunately, this was their final planned flight as the storm was close
to making landfall and additional surveillance data was not requested.
This maintenance issue did not result in any missed data collection and
did not impact the forecast.
Question 2. If it wasn't routine, and was because the planes flew
for two weeks through the most extreme weather imaginable, what is the
Department of Commerce's plan to provide sufficient back-up to allow
for these emergency repairs?
Answer. Based on the 2022 NOAA Aircraft Plan, Building and
Sustaining NOAA's 21st Century Fleet, NOAA is modifying one G-550
aircraft and negotiating the option for a second G-550. NOAA also
procured pre-production spots for two C-130Js, and expects to award the
production contract for two green C-130Js later this year. The
Administration also requested $600 million in the domestic disaster
supplemental, which would complete the two green aircraft and fund
another fully equipped C-130J, and avoid a gap in coverage. With this
modernized and expanded fleet, NOAA will have critical backup
capabilities to ensure continuous observations of storms. These
aircraft are critical to tracking ever more challenging storm
forecasts, as we just saw with Hurricane Otis's rapid intensification
from a Tropical Storm to a Category 5 hurricane in 24 hours prior to
its landfall in Mexico.
Question 3. Additionally, it's been learned that NOAA pilots have
had to get waivers to allow them to fly after maxing out their allotted
flight hours. Is there a plan in place to ensure that there are enough
pilots to fly these missions without the need for waivers?
Answer. NOAA has made great strides in growing its NOAA Corps pilot
workforce, and the FY 2025 President's Budget is a critical step to
addressing that. The FY 2025 President's Budget request includes an
increase of $22.9M to allow NOAA Corps to grow from an average annual
strength of approximately 330in FY 2024 to approximately 374 in FY
2025. This includes growing the pilot workforce from 70 NOAA Corps
aviator billets at the end of FY 2023 to 87 NOAA Corps aviator billets
by the end of FY 2025. In FY 2024, NOAA's Office of Marine and Aviation
Operations has six planned interservice transfers and six of the 22
officer candidates in the January 2024 Basic Officer Training Course
are being assigned to aircraft. Hiring pre-qualified aviators allows
NOAA to deploy these pilots in a few months instead of years, providing
necessary staffing and reducing the use of high-time waivers. Fully
staffing all of NOAA's aircraft will require a multi-year investment
and recruitment effort to attract and retain the best pilots for vital
missions like hurricane forecasting.
Question 4. During the same interview, it was reported, ``we do
need more resources. . .and we will continue to ask for more
resources.'' However, the Biden budget request included $0 for
hurricane hunter aircraft, but millions of dollars for woke
initiatives. What is the justification for prioritizing ``diverse
fisheries'' over the millions of lives that are at risk if hurricane
forecasting is not done right?
Answer. NOAA recently awarded a pre-production contract, with funds
provided in FY 2023, to secure two spots in the production line and
purchase long lead materials for two C-130J aircraft. NOAA expects to
award the production contract for these two green C-130Js later this
year. The Administration also requested $600 million in the domestic
disaster supplemental, which would complete the two green aircraft and
fund another fully equipped C-130J, and avoid a gap in coverage.
Question 5. Can the Commerce Department commit to ensure NOAA is
able to meet its core mission of protecting human lives and property in
the future?
Answer. The Department believes that it would be unacceptable to
allow lapses in coverage of the NOAA hurricane hunters mission to
protect life and property, and the Department is committed to the
acquisition of new aircraft with the support of Congress, which
provided $327 million in supplemental Fiscal Year (FY) 2023
appropriations as requested by the Administration. Consistent with the
Administration's request for $600 million in the domestic supplemental,
the Department intends to have new aircraft online in 2030 when the
current generation will go out of service. In addition to improvements
in hurricane forecasts, the Department has continued to invest in
improving forecasts of other high impact events: atmospheric rivers,
wildfires, and tornadoes.
The Department also intends to continue to work closely with the
U.S. Air Force (USAF) with whom NOAA shares the hurricane hunter
mission; NOAA and the USAF have a combined fleet of 13 hurricane
hunters to carry out critical flights that protect life and property.
The Department welcomes the opportunity to continue working with
Congress to ensure resources are available to meet this essential
mission to protect life and property.
Port Everglades
Regarding the project to deepen and widen Port Everglades, Florida,
on which NOAA-Fisheries (NMFS) is consulting under Section 7 of the
Endangered Species Act, the Committee is told that NMFS may reach a
Determination of Destruction or Adverse Modification (DAM) to Critical
Habitat (CH) for threatened hard corals from deepening and widening
project, even though the project only has the potential to impact
approximately 0.09 percent of the 850,560-acre Florida Unit of
Acroporid coral designated CH. To date, NMFS has not yet shared its
analysis or best available scientific information that would support
this potential DAM determination.
Question 1. When will NMFS share its analysis or best available
scientific information to support the potential DAM determination?
Answer. During the Section 7 consultation process, NMFS works with
Federal action agencies to avoid outcomes that are likely to result in
either jeopardy for Endangered Species Act (ESA)-listed species or
destruction or adverse modification (DAM) for designated or proposed
critical habitat, or both. A determination as to whether the Port
Everglades project is likely to result in DAM can only be made after
conducting a thorough evaluation, including evaluating the relative
importance of the area to be affected to the overall recovery of the
species. The Port Everglades current impact area is estimated to
contain over 700 acres of coral reefs, more than 200 acres of which are
designated critical habitat for seven species of threatened coral. And
the northerly portion of the Florida reef tract is especially important
for coral recovery under expected climate scenarios.
Question 2. Will this allow for a final biological opinion by
October 2024, which is from the most recent project implementation
schedule?
Answer. NMFS understands the U.S. Army Corps of Engineers' project
implementation schedule anticipates completing the ESA consultation
process in November 2024. Our ability to meet that deadline will depend
on when we receive the remaining information we requested, including
the mitigation and monitoring implementation plan and the adaptive
management plan.
Question 3. The U.S. Army Corps of Engineers hosted an Industry Day
on January 28, 2023 in Ft. Lauderdale to gain information on mitigation
and coral nursery options for the project. It was apparent that the
coral industry could support the Corps' initial estimate for mitigation
presented at Industry Day (more than 700,000 coral relocations or
plantings), but even that amount of mitigation would require extensive
collaboration among the coral industry. Please provide the Committee
with information from NMFS on how additional outplantings realistically
could be accomplished in line with NMFS suggestions of somewhere
between 1.5 and 6.2 million corals, given that the industry does not
exist to meet these higher suggested outplantings.
Answer. NMFS shares the Committee's concern that mitigating
extremely large impacts to corals and coral reefs with coral
outplanting would be costly and complicated. NMFS has suggested that
the Corps re-evaluate potential engineering solutions that could be
more cost-effective and risk-averse, such as pumping dredged sediment
directly to the Ocean Dredged Material Disposal Site, to reduce the
scale of impact of the project and avoid and minimize impacts to coral
reefs. USACE is in the process of developing a Supplemental
Environmental Impact Statement, and NMFS intends to continue to work
collaboratively with the USACE and the State of Florida to refine
impact estimates and plan for mitigation that is both feasible and
effective.
Broadband Programs
Recent reports, including the September 2023 Red Light Report,
raise concerns that rather than fulfilling its mission to connect the
unserved to the internet, the Department may be focusing its efforts on
discriminatory technology mandates, funding wasteful duplication in
areas that already have broadband service, and adopting extralegal
requirements to achieve a left-wing social agenda.
Question 1. The Infrastructure Investment and Jobs Act (IIJA)
expressly prohibits the regulation of broadband prices. Do you agree
that requiring broadband providers to offer specific prices or pricing
tiers to participate in government funded programs is a form of rate
regulation?
Answer. IIJA expressly provides that nothing in the statute should
be construed to authorize NTIA to regulate the rates charged for
broadband service and, consistent with that statutory provision, NTIA
is not engaged in rate regulation. IIJA also states that ``[t]he
persistent `digital divide' in the United States is a barrier to'' the
Nation's ``economic competitiveness [and the] equitable distribution of
essential public services, including health care and education.''
Accordingly, IIJA itself requires BEAD Program subgrantees to offer at
least one ``low-cost broadband service option for eligible
subscribers.'' Under the statute, Eligible Entities must consult with
NTIA and propose a definition of ``low-cost broadband service option''
to NTIA for approval. Satisfying this definition is a condition for
subgrantees' receipt of BEAD funding. Requiring, as the statute does,
that providers receiving a BEAD grant offer a low-cost service offering
is not rate regulation; it is a grant condition and a requirement of
Federal law.
Question 2. NTIA staff have reportedly pressured states to include
certain rate requirements in their state BEAD plans as a condition of
the Department's approval. Have NTIA or Department of Commerce
officials, including regional representatives such as state-based
Federal program officers, told or encouraged state broadband offices to
include any of the following types of price controls in order to gain
Commerce approval of the state's BEAD plan? Please indicate yes or no
for each of the following types of price controls:
a. Price caps corresponding to speed tiers;
b. Rate freezes;
c. Specified prices for ``low-cost'' plan, ``middle-class
affordability'' plan, or another broadband plan.
Answer. Consistent with IIJA's prohibition on rate regulation, NTIA
is not engaged in rate regulation. NTIA is working with Eligible
Entities to implement the IIJA requirement that BEAD Program
subgrantees offer at least one ``low-cost broadband service option for
eligible subscribers.'' Under the statute, Eligible Entities must
consult with NTIA and propose a definition of ``low-cost broadband
service option'' to NTIA for approval. In connection with that, I
understand that NTIA and Department of Commerce officials have told
state broadband offices that they will need to comply with the low-cost
option statutory requirement consistent with IIJA and the BEAD NOFO,
neither of which impose any kind of price control.
Question 3. Please provide the guidance that NTIA and/or Department
officials have provided to state broadband offices concerning the types
of price controls listed below. If NTIA and/or Department officials'
guidance varies, please provide direct quotes from a representative
sample of the guidance for each type of price control listed below,
including public and private communications (including e-mails) to
state broadband offices.
a. Price caps corresponding to speed tiers;
b. Rate freezes;
c. Specified prices for ``low-cost'' plan, ``middle-class
affordability'' plan, or another broadband plan.
Answer. NTIA is working with Eligible Entities to implement the
IIJA requirement that BEAD Program subgrantees offer at least one
``low-cost broadband service option for eligible subscribers.'' Under
the statute, Eligible Entities must consult with NTIA and propose a
definition of ``low-cost broadband service option'' to NTIA for
approval. With respect to that statutory requirement, I understand that
communications from NTIA and Department of Commerce officials to state
broadband offices regarding the low-cost broadband service option
requirement have been consistent with IIJA, the BEAD NOFO, the BEAD
Program Frequently Asked Questions and Answers, and the BEAD Program
Initial Proposal Guidance documents.
Question 4. Please provide all studies, papers, and other economic
literature, if any, supporting the NTIA and/or Commerce officials'
guidance on prices indicated in your response to question 14(c).
Answer. IIJA expressly provides that nothing in the statute should
be construed to authorize NTIA to regulate the rates charged for
broadband service and, consistent with that statutory provision,
nothing in the NOFO or NTIA's guidance regulates rates.
NTIA is working with Eligible Entities to implement the IIJA
requirement that BEAD Program subgrantees offer at least one ``low-cost
broadband service option for eligible subscribers.'' With respect to
that statutory requirement, NTIA's NOFO and guidance have explained
that states have considerable discretion in how they address it. The
guidance cited in response to the above question includes, as one
example, a low-cost option that draws from the Affordable Connectivity
Program levels established by Congress in IIJA.
The Department recognizes the importance of congressional oversight
of our broadband connectivity activities. The Department is willing to
brief the Committee on its efforts to ensure networks constructed using
the BEAD funds are accessible and affordable.
Question 5. Broadband availability is only lacking in extremely
remote areas, where there are fewer potential customers to fund
maintenance of grant-funded projects. Does the Department expect grant
recipients to be able to maintain broadband service without further
subsidies from the government?
a. If not, can you please provide the Department's estimates of the
total amount of funding needed in the future to continue to subsidize
BEAD areas?
b. If yes, can you please provide the estimated returns based on a
mix of price cap plans by Commerce officials and the expected revenues
for companies that build BEAD projects?
Answer. The National Broadband Map shows that there are unserved
and underserved locations in every state, territory, and the District
of Columbia in urban, suburban, and rural communities. We expect that a
diverse array of subgrantees will seek to provide service to those
unserved and underserved locations through participation in the BEAD
Program. Those subgrantees will deploy service using an array of
technologies pursuant to business plans that are unique to their
situations and underlying cost structures. We fully expect subgrantees
to seek BEAD funding sufficient to support their long term business
interests, and, consistent with the BEAD NOFO, NTIA will continue to
encourage Eligible Entities to minimize BEAD funding outlay, extend the
reach of the BEAD program funding and help to ensure that every
unserved location and underserved location in the United States has
access to reliable, affordable, high-speed Internet service.\6\
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\6\ National Telecommunications and Information Administration;
Notice of Funding Opportunity; Broadband Equity, Access, and Deployment
Program at 20, 22, available https://broadbandusa.ntia.doc.gov/sites/
default/files/2022-05/BEAD%20NOFO.pdf (herein ``BEAD NOFO'').
Question 6. What is the Department's estimated percentage of
customers who will subscribe to BEAD-funded broadband service, and is
this estimate the same in areas where BEAD projects will overbuild
available fixed wireless and satellite connectivity?
Answer. NTIA expects strong adoption and subscription across BEAD-
funded broadband networks, as those networks will bring affordable,
reliable high-speed Internet service to locations that currently lack
access. Rates of adoption and subscription will vary based on, among
other things, the affordability of the service and customer
demographics.
Question 7. In response to Senator Budd's concern about the
Department's demonstrated bias for fiber technology in its Notice of
Funding Opportunity and his question about whether it is better to
spend $500 for satellite or $200,000 for fiber, you said, ``It depends
on the quality.'' If satellite broadband service can meet the speed and
latency requirements for the BEAD program as established in the IIJA--
not less than 100 megabits per second for downloads and 20 megabits per
second for uploads with latency sufficiently low to allow for
reasonably foreseeable, real-time, interactive applications, what are
the quality difference(s) between satellite and fiber that justifies
paying 400 times more for the latter?
Answer. There is no ``one-size-fits-all'' approach to broadband
deployment given each Eligible Entity's unique challenges, and NTIA
will ensure that the Eligible Entities have flexibility in identifying
the technical solutions that meet the needs of their communities.
The BEAD NOFO recognizes the unique characteristics of fiber to
``ensure that the network built by the project can easily scale speeds
over time to. . .meet the evolving connectivity needs of households and
businesses'' and ``support the deployment of 5G, successor wireless
technologies, and other advanced services.'' \7\ The BEAD NOFO,
however, creates room for all strategies and we expect Eligible
Entities will use a mix of technologies to connect their unserved and
underserved locations. The NOFO allows applicants to propose to provide
service over any form of reliable broadband service, including
terrestrial fixed wireless over licensed spectrum in certain
circumstances, so long as the service can fulfill the statutory speed
and latency requirements. Further, each Eligible Entity will set an
``Extremely High Cost Per Location Threshold'' and may decline to
select a Priority Broadband Project proposal ``that requires a BEAD
subsidy that exceeds the Extremely High Cost Per Location Threshold for
any location to be served in the proposal if use of an alternative
Reliable Broadband Service technology meeting the BEAD Program's
technical requirements would be less expensive.'' \8\ It also permits
funding of satellite and unlicensed wireless service for those
locations if there is no other proposal from a provider of Reliable
Broadband Service.\9\
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\7\ Id. at Sec. 60102(a)(2)(I).
\8\ NOFO at 38.
\9\ Id.
Question 8. You and Assistant Secretary Davidson claimed that
states will have flexibility to deploy a variety of technologies. Your
claims, however, are at odds with your agency's actions. For example,
Commerce's rules prohibit states from funding non-fiber projects
without a waiver from NTIA while allowing BEAD dollars to overbuild
certain technologies on a blanket basis. Will you revise BEAD guidance
and eliminate those rules and others that are biased towards certain
technology?
Answer. It is not correct that Commerce's rules prohibit states
from funding non-fiber projects without a waiver from NTIA. Applicants
can propose to provide service over any form of reliable broadband
service. Eligible Entities each have the authority to decline to select
a Priority Broadband Project proposal ``that requires a BEAD subsidy
that exceeds the Extremely High Cost Per Location Threshold for any
location to be served in the proposal if use of an alternative Reliable
Broadband Service technology meeting the BEAD Program's technical
requirements would be less expensive.'' Further, NTIA expects that
there will be a significant number of locations where the only
proposals are not Priority Broadband Projects (i.e., not end-to-end
fiber) and Eligible Entities are not required to seek a waiver to fund
such projects.
The BEAD NOFO takes this approach because there is no ``one-size-
fits-all'' approach to broadband deployment given each Eligible
Entity's unique challenges, and NTIA will ensure that the Eligible
Entities have flexibility in identifying the technical solutions that
meet the needs of their communities.
Question 9. In the BEAD NOFO, NTIA instructed states ``to set the
Extremely High Cost Per Location Threshold as high as possible to help
ensure that end-to-end fiber projects are deployed wherever feasible.''
Please provide the guidance that NTIA and/or Department officials
provided to state broadband offices regarding how high to set the
Extremely High Cost Threshold. If NTIA and/or Department officials'
guidance varies, please provide direct quotes from a representative
sample of the guidance provided, including public guidance and private
communications (including e-mails) to state broadband offices. \10\
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\10\ ``Notice of Funding Opportunity: Broadband Equity, Access, and
Deployment Program.'' National Telecommunications and Information
Administration (NTIA). https://broadbandusa.ntia
.doc.gov/sites/default/files/2022-05/BEAD%20NOFO.pdf
---------------------------------------------------------------------------
Answer. I understand that communications from NTIA and Department
of Commerce officials to state broadband offices regarding the
extremely high cost per location threshold have been consistent with
IIJA, the BEAD NOFO, the BEAD Program Frequently Asked Questions and
Answers,\11\ and the BEAD Program Initial Proposal Guidance
documents.\12\
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\11\ Broadband, Equity, Access, and Deployment (BEAD) Program
Frequently Asked Questions and Answers Version 4.0 at 8 (item 1.18,)
available at https://broadbandusa.ntia.doc.gov/
sites/default/files/2023-11/
Broadband_Equity_Access_Deployment_Program_Frequently_Asked_
Questions_Version_4.0.pdf.
\12\ Broadband Equity, Access, and Deployment (BEAD) Program
Initial Proposal Guidance at 49-51, available at https://
broadbandusa.ntia.doc.gov/sites/default/files/2023-10/BEAD_
Initial_Proposal_Guidance_Volumes_I_II_10-2023.pdf.
Question 10. Will you clarify to states that if satellite and other
broadband technologies can meet the requirements established in BEAD,
that they should weigh the costs appropriately rather than
automatically preference fiber to better ensure that all Americans can
receive broadband service through this funding?
Answer. Consistent with the underlying statute, the BEAD NOFO
recognizes the unique characteristics of fiber to ``ensure that the
network built by the project can easily scale speeds over time to . . .
meet the evolving connectivity needs of households and businesses'' and
``support the deployment of 5G, successor wireless technologies, and
other advanced services.'' \13\
---------------------------------------------------------------------------
\13\ IIJA at Sec. 60102(a)(2)(I).
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There is no ``one-size-fits-all'' approach to broadband deployment
given each Eligible Entity's unique challenges, and NTIA will ensure
that the Eligible Entities have flexibility in identifying the
technical solutions that meet the needs of their communities. The NOFO
recognizes the unique characteristics of fiber to ``ensure that the
network built by the project can easily scale speeds over time to . . .
meet the evolving connectivity needs of households and businesses'' and
``support the deployment of 5G, successor wireless technologies, and
other advanced services.'' The BEAD NOFO, however, creates room for all
strategies and we expect Eligible Entities will use a mix of
technologies to connect their unserved and underserved locations. The
NOFO allows applicants to propose to provide service over any form of
reliable broadband service, including terrestrial fixed wireless over
licensed spectrum in certain circumstances. It also permits funding of
satellite and unlicensed wireless service for the locations that each
state identifies as the most expensive to serve.
Question 11. Please provide the specific methodology that the
Department used to determine the high-cost portion of BEAD funding
allocations.
Answer. IIJA tasked NTIA with defining ``high-cost areas'' as part
of the BEAD allocation formula. To qualify as a high-cost area, IIJA
requires the area to contain at least 80 percent unserved locations. As
a result, census block groups that both met the ``high-cost''
definition and contained at least 80 percent unserved locations are
eligible to be designated as a high-cost area. In accordance with
IIJA's mandate, NTIA defined ``high cost'' using a cost model that
incorporates an area's remoteness, population density, topography, and
poverty levels, and that measures costs over the life of the network.
For example, NTIA's model accounts for the fact that remote areas will
face additional costs for broadband deployment and that unique
topography can often make broadband deployment more difficult and
costly. In addition, the model relies on the average cost of building
out broadband service in unserved areas, utilizing the net present
value over the lifetime of the network, not just the cost of
construction. NTIA defined ``area'' to mean census block groups.
Question 12. Please list the total amount of high-cost BEAD funding
that was allocated to states or other eligible entities.
Answer. NTIA, as directed by statute, allocated ten percent of the
BEAD Program budget--$4.245 billion--in high-cost BEAD funding based on
the number of unserved locations in high-cost areas.\14\
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\14\ IIJA Sec. 60102(c)(1)(A).
Question 13. What specific actions has Commerce taken in response
to the Department of Commerce Office of Inspector General Management
Alert concerning increased fraud risk in the Tribal Broadband
Connectivity Program (TBCP) published on July 10, 2023?
Answer. Across all broadband programs, NTIA has been actively
working with the Department's Office of Inspector General (OIG) team to
bolster controls against waste, fraud, and abuse. In the TBCP program,
Congress directed NTIA to address the urgent needs of Tribal
communities to access broadband for basic needs, like learning,
telework, and healthcare. NTIA is working to faithfully implement this
urgent, bipartisan priority, so that Tribal communities can have
affordable, high-speed broadband and taxpayer dollars are used
responsibly.
NTIA has taken several steps to ensure taxpayer funds remain
directed to Tribal areas where the need is greatest, consistent with
Congress's intent. NTIA has begun using the new FCC mapping data,
rather than Form 477, which is more granular data than ever before on
service availability. NTIA has also standardized its mapping analysis
and protocol for verifying service for each applicant. And it has also
standardized the de-duplication process its partner agencies by
instituting protocols for coordinating with the FCC, USDA, and Treasury
to identify and address potential duplication for each potential
awardee.
NTIA also consulted with the OIG on the next round of TBCP funding
and the second TBCP NOFO (NOFO II), which NTIA released in July
2023.\15\ NTIA incorporated improvements from the NOFO I process and
other enhancements, including more robust broadband service
verification and deduplication processes. NOFO II also incorporates
feedback from the OIG concerning disclosures, reporting, whistleblower
protections, and enforcement provisions. These improvements also
respond to OIG recommendations to formalize NTIA policies and
procedures for verifying Tribal government certifications.\16\
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\15\ NOFO II, available at https://ntia.gov/sites/default/files/
2023-07/ntia-tbcp-round2-nofo
.pdf. This NOFO also incorporates the definition of affordability found
in the BEAD NOFO and includes a definition of reliability.
\16\ Tribal Government Certifications allow applicants to attest to
the ``unserved'' status of proposed service areas within Tribal Lands,
and lands providing services to Tribal members, with a description of
how the Tribe determined that the area is ``unserved.'' Id. at page 6-
7. The second NOFO details accompanying requirements when applicants
choose to submit a Tribal Government Certification.
---------------------------------------------------------------------------
In addition to these examples, NTIA continues to develop and
enhance protocols to protect against waste, fraud, and abuse.
Question 14. Have Commerce officials reviewed all previously
awarded grants in the TBCP to check for potential overlap with other
Federal programs?
a. If so, how many awards have been identified as overlapping with
another Federal award?
b. How many awards have been revoked because they overlapped with
another Federal award?
c. What the is total amount of funding revoked?
Answer. NTIA administers the Tribal Broadband Connectivity Program
(TBCP). NTIA recognizes the importance of ensuring that TBCP funds are
directed where they are most needed. NTIA is working with other
agencies to take steps to address concerns about potential overlap.
Those actions could include measures like applying special award
conditions or amending the scope of awards.
Question 15. What contractor(s) has NTIA hired to assist with
broadband programs?
a. Please list contractors separately by program.
b. Please indicate the specific task each contractor is responsible
for.
c. Please indicate the office that oversees the contractor(s).
Answer. NTIA has several contractors that provide professional and
technological support services for NTIA's broadband grant programs.
These contracts are managed and overseen in NTIA's Office of Internet
Connectivity and Growth (OICG), the office that manages NTIA's
broadband grant programs.
NTIA's professional services contracts for grants programs--
including the Broadband Infrastructure Program (BIP), the Tribal
Broadband Connectivity Program (TBCP), the Connecting Minority
Communities (CMC) Program, the Broadband Equity, Access, and Deployment
(BEAD) Program, the Digital Equity Act Programs, and the Enabling
Middle Mile Broadband Infrastructure Program (Middle Mile)--partner
with Deloitte Consulting and Corner Alliance. These contracts include
program administration, communications and outreach, grants
administration, technical assistance, environmental and historic
preservation support, pre-and post-award grants administration and
monitoring support, program management support, and data analytics and
management tools support.
In addition, NTIA has contract with Software Information Resource
Corp (SIRC) for the development and implementation of a Salesforce
solution for both customer relationship management (CRM) and a
programmatic grants management platform for application intake and
review as well as post award report intake, review, and monitoring
activities. This contract primarily supports the BEAD, Digital Equity,
and Middle Mile programs, but facets of this solution also support
NTIA's broader CRM and stakeholder engagement activities across all of
its broadband grant programs, including BIP, CMC, and TBCP.
NTIA has a contract with CostQuest Associates to obtain statutorily
required datasets, specifically the Broadband Fabric, which is also
used by the Federal Communication Commission's new broadband maps, as
well as broadband cost data and analytics professional services, to
support analytics efforts for NTIA and for States. (NTIA has built a
BEAD Eligible Entity Toolkit with access to these datasets and
analytical tools as a part of its Technical Assistance efforts).
Although BEAD is the primary grant program using this data set and
analytics tool, it is also used for NTIA's infrastructure grant
programs, including BIP, Middle Mile, and TBCP. Additionally, the
Broadband Fabric and broadband cost data is available to other Federal
agencies and the Eligible Entities through NTIA's contract. To support
the use of this data set and analytics tools, NTIA also has a contract
with ArcGIS, a web-based mapping platform, leveraged by NTIA's National
Broadband Availability Map (NBAM), but also used to support all of its
broadband grant programs, to provide data analytics insights on
broadband availability, adoption, and use--as well as other socio-
economic layers that have been integrated in to the NBAM platform. NTIA
also has a contract with INSPIRE to support its stakeholder outreach
and engagement events and activities (e.g., webinars, conferences) as
well as its grant program Technical Assistance events.
NTIA Organization
The Commerce Department has reserved $849 million from the BEAD
program for administration costs.
Question 1. Please explain in detail what costs the Commerce
Department is incurring for BEAD, including all expense categories over
$1 million. For funding that does not yet have a plan for expenditure,
please note as such.
Answer. NTIA operates the BEAD Program within its relevant
budgetary cap and will continue to do so moving forward. NTIA's current
projections have active BEAD sub-grant projects through FY32. In FY23,
NTIA secured the contract resources noted above and hired professional
staff to serve as Federal program officers working directly with the
states and territories to support the long-term needs of the program.
Question 2. If the Commerce Department determines that it does not
need the full $849 million for BEAD's administration, will it send this
funding to states that cannot meet their 100 percent connectivity goal
with their current allocations?
Answer. Given the complexity, length, and size of the NTIA's
broadband programs and the needs for implementation Technical
Assistance and strong oversight and monitoring, NTIA does not
anticipate having remaining funds (at least sufficient for potentially
allocating to States to compensate any States falling short of their
100 percent connectivity goal) at the closeout of the program. Further,
NTIA will not know if there will be availability of funds until at
least 2030, when NTIA anticipates State subgrantees will start closing
out on their projects. It is important to note that NTIA expects States
will be able to leverage other broadband infrastructure Federal
funding, including those programs administered through the Federal
Communications Commission, U.S. Department of Agriculture, and
Department of the Treasury, State-funded grant programs, as well as
private sector investment, to meet the 100 percent connectivity goal,
along with the Federal investments from BEAD.
Question 3. Please provide the organization chart for NTIA,
including all offices and every position within each office, even if a
position is currently vacant (note such positions as such).
Answer. See attachment #1
Question 4. For each position identified in the chart provided in
response to question 14(c), please provide the position's full
description, including goals and expectations for the Senior Advisor
for Algorithmic Justice in the Office of the Assistant Secretary of
NTIA.
Answer. The position description for the Senior Advisor for
Algorithmic Justice is below:
Works with Administrator and staff on:
Thought leadership on Internet of things, algorithmic
transparency and justice, and smart cities.
Thought leadership with respect to data analytics in energy,
transportation, resilience planning, broadband, and other areas
covered by the IIJA. In particular, projects concerning how
government and private parties can work together on digital
infrastructure in the public interest, with a view to
increasing trust, and best practices around ethical AI and
algorithmic innovation.
Thought leadership with respect to information structures
supportive of democratic practice, including decentralized
authentication, civic information and engagement, online harm
reduction, and journalism support.
Spectrum
Expanding commercial access to midband spectrum is critical to our
Nation's economic growth and security. Unfortunately, large swaths of
our Nation's midband spectrum is controlled by Federal agencies that do
not want to share.
Question 1. The Infrastructure Investment and Jobs Act (IIJA)
provided $50 million for DOD to study the feasibility of allowing
commercial wireless services to operate in the 3.1-3.45 GHz band. While
the study has not been publicly released, initial reports suggest that
DOD has found that little or no spectrum in the band could be
repurposed for commercial wireless services. Is that correct?
Question 2. If DOD needs more money to free up spectrum in the
lower 3 GHz band, how much more does it need?
Question 3. Did the study calculate the gap in funding that would
need to be filled in order to make repurposing feasible, or did it
simply conclude that it isn't feasible?
Question 4. Beyond the lower 3 GHz band, what other mid-band
spectrum frequencies currently occupied by DOD or other Federal
agencies could be repurposed for commercial wireless services?
Answer. The National Telecommunications and Information
Administration (NTIA) has a dual imperative built into its statutory
role. NTIA is both the manager of Federal spectrum resources, and the
President's primary advisor on these issues. Given these dual roles,
NTIA's obligation is to work with the agencies to ensure that we have
the spectrum needed for our economic security and growth while
protecting national security and critical Federal missions and
capabilities. To meet this obligation, it is absolutely essential that
bands be studied before decisions are made about repurposing.
On September 28, 2023, the Department of Defense submitted its
Emerging Mid-Band Radar Spectrum Sharing (EMBRSS) Feasibility
Assessment to the Department of Commerce. Consistent with the statutory
requirement, the Department of Commerce has been reviewing the 1200-
page report--which includes numerous classified annexes--and is
coordinating with the DoD and other Federal stakeholders to determine
the next steps beyond the EMBRSS study with the complementary goals of
furthering U.S. economic competitiveness while ensuring a strong
national security. The White House is actively coordinating interagency
discussions on spectrum policy to ensure all options are considered to
achieve the Nation's economic and national security needs.
Additionally, the National Spectrum Strategy, released on November
13, 2023, identifies over 2,700 MHz--nearly double NTIA's initial 1,500
MHz target and more than 1600 MHz of mid-band spectrum, including the
lower 3 GHz and 7-8 GHz bands--of spectrum across five spectrum bands
for in-depth study for potential new uses by both the private sector
and federal agencies. The Biden-Harris Administration published an
Implementation Plan on March 12, 2024, to carry out the Strategy, which
is envisioned as a living document, intended to be assessed and updated
in the future as spectrum requirements and opportunities evolve. The
Implementation Plan sets out requirements for a follow-on study to the
EMBRSS report.
______
Response to Written Questions Submitted by Hon. Roger Wicker to
Hon. Gina M. Raimondo
Question 1. Do you agree that it is important to enhance and
balance security and assurance across all of the phases of the
lifecycle of semiconductor design, manufacture, packaging, test, and
use?
Answer. The Department agrees with this statement and the CHIPS
program is being executed to increase domestic capacity across
manufacturing, packaging, supply chain, and R&D.
Question 2. I am aware of a proposal to award CHIPS Incentive
Program funding for a ``secure enclave'' to one company that is focused
on that company's semiconductor fabrication and packaging facilities.
a. Is it the Commerce Department's view that such an award--
potentially for billions of dollars--is consistent with the underlying
CHIPS statute and congressional intent?
b If so, can you please cite an instance where the secure enclave
concept and the possibility of such an award was discussed with Members
of Congress on the relevant committees of jurisdiction prior to the
enactment of the Chips and Science Act?
c. Do you believe that Members of Congress and staff on relevant
committees, including the Senate Commerce, Science, and Transportation
Committee and Senate Armed Services Committee, should have access to
the analysis being used to support the secure enclave proposal?
Answer. Every CHIPS Act award will satisfy the requirements of the
CHIPS Act. There is not a detailed communications record concerning any
such discussions and deliberations on Secure Enclave that the
Department is able to share. The Department recognizes the important
oversight role that Congress plays here, and will continue to provide
information consistent with application confidentiality considerations
and legal restrictions.
Question 3. Should the Department make an award for the secure
enclave proposal or any such similar proposal, do you commit to
providing expeditiously to Congress the full list of otherwise
meritorious applications that the Department was forced to reject for
lack of available funding?
Answer. The CHIPS program is oversubscribed, and not all eligible
applicants will receive CHIPS funds. The Department carefully evaluates
how to allocate CHIPS funds to maximize the national security and
economic security impacts of the program.
Question 4. Are you aware of the recent Department of Defense
Microelectronics Quantifiable Assurance (MQA) independent review of
microelectronics security, which represents a consensus view amongst 27
senior experts across government, the defense industrial base, and the
semiconductor industry?
a. Are you aware that following completion of this report, the
Undersecretary of Defense for Acquisition and Sustainment, Dr. William
LaPlante, and the Undersecretary of Defense for Research and
Engineering, Heidi Shyu, issued a press release lauding the report's
conclusions and recommendations?
Answer. Yes.
b. Do you agree with the MQA independent review's finding regarding
the need to further develop affordable security overlays and MQA
standards and implement independent checks throughout the semiconductor
lifecycle which are tailored to the type and use of the chip?
Answer. Yes.
c. Are you aware that in 2014, the Department of Defense certified
a major U.S.-based manufacturer of advanced semiconductors as a
``Trusted Foundry'' qualified to produce classified and export-
controlled chips for national security at a small fraction of the cost
of the proposed secure enclave? Are you also aware that this company's
most advanced fab received accreditation in May of this year as a
Trusted Supplier using a flexible and affordable ``security overlay''
approach?
Answer. Yes, based on publicly available information.
d. Are you aware that the MQA independent review based its
recommendations regarding affordable and sufficient security overlays
on the methodology reflected in this recent Department of Defense
security accreditation?
Answer. MQA is one among multiple approaches to secure chip
production.
Question 5. I am concerned that NTIA's guidance for the BEAD
program facilitated and effectively required states to propose price
controls and scoring that do not align with the marketplace or reality.
Will you reject state plans that propose any rate caps which would
starve BEAD-funded networks and either require ongoing government
subsidies just to remain viable or to fail because they have no ability
to cover operating costs?
Answer. IIJA expressly provides that nothing in the statute should
be construed to authorize NTIA to regulate the rates charged for
broadband service and, consistent with that statutory provision,
nothing in the National Telecommunications and Information
Administration's (NTIA) BEAD Notice of Funding Opportunity (NOFO) or
guidance regulates rates or imposes any price controls.\17\ IIJA also
states that ``[t]he persistent `digital divide' in the United States is
a barrier to'' the Nation's ``economic competitiveness [and the]
equitable distribution of essential public services, including health
care and education.'' \18\ Accordingly, IIJA itself requires BEAD
Program subgrantees to offer at least one ``low-cost broadband service
option for eligible subscribers.'' \19\ Under the statute, Eligible
Entities must consult with NTIA and propose a definition of ``low-cost
broadband service option'' to NTIA for approval.\20\ Satisfying this
definition is a condition for subgrantees' receipt of BEAD funding.
Requiring, as the statute does, that providers receiving a BEAD grant
offer a low-cost service offering is not rate regulation; it is a grant
condition and a requirement of Federal law.
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\17\ IIJA. at Sec. 60102(h)(5)(D).
\18\ Id at Sec. 60101(2) (2021).
\19\ Id. at Sec. 60102(h)(4)(B).
\20\ Id. at Sec. 60102(h)(4)(B), (5)(B)(ii).
Question 6. NTIA's BEAD program requires a 25 percent Letter of
Credit on top of the 25 percent match. This requirement will make
deployments more expensive for all providers and lead to less capital
going toward broadband deployment. While I recognize the need for the
government to protect the public investment, there are alternative ways
NTIA can protect the public and not increase costs unreasonably for
providers seeking to participate in BEAD. Is NTIA looking at
alternatives to the Letter of Credit requirement? If so, will NTIA
engage stakeholders to ensure the feasible of alternatives?
Answer. As NTIA administers the BEAD Program, we are committed to
being good stewards of taxpayer dollars. That means making sure BEAD
Program subgrantees can see their deployment projects through--not just
to the end of construction, but on an ongoing basis as service
providers deliver affordable, reliable high-speed Internet service. To
that end, the NOFO required prospective subgrantees to provide an
irrevocable standby letter of credit to the Eligible Entity (i.e., the
50 states, five territories, and the District of Columbia) before
entering into a subgrantee agreement. The amount of the letter of
credit must be no less than 25 percent of the subaward amount.\21\ The
NOFO also invited Eligible Entities to propose alternatives ``if they
are necessary and sufficient to ensure that the Program's objectives
are met.'' \22\
---------------------------------------------------------------------------
\21\ BEAD NOFO at 72, 73.
\22\ Id. at 71.
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On November 1, 2023, NTIA published a conditional programmatic
waiver that modifies the letter of credit requirement for subgrantees
of all Eligible Entities in the following ways:
Allow Credit Unions to Issue letters of credit. The NOFO
requires subgrantees to obtain a letter of credit from a U.S.
bank with a safety rating issued by Weiss of B- or better. The
waiver permits subgrantees to fulfill the letter of credit
Requirement (or any alternative permitted under the waiver)
utilizing any United States credit union that is insured by the
National Credit Union Administration and that has a credit
union safety rating issued by Weiss of B- or better.
Allow Use of Performance Bonds. The waiver permits a
subgrantee to provide a performance bond equal to 100 percent
of the BEAD subaward amount in lieu of a letter of credit,
provided that the bond is issued by a company holding a
certificate of authority as an acceptable surety on Federal
bonds as identified in the Department of Treasury Circular 570.
Allow Eligible Entities to Reduce the Obligation Upon
Completion of Milestones. The waiver allows an Eligible Entity
to reduce the amount of the letter of credit obligation below
25 percent over time, or reduce the amount of the performance
bond below 100 percent over time, upon a subgrantee meeting
deployment milestones specified by the Eligible Entity.
Allow for an Alternative Initial letter of credit or
Performance Bond Percentage. The NOFO requires that the initial
amount of the letter of credit be 25 percent of the subaward
(or the initial amount of the performance bond be 100 percent
of the subaward under the option described above). The waiver
allows the initial amount of the letter of credit or
performance bond to be 10 percent of the subaward amount during
the entire period of performance when an Eligible Entity issues
funding on a reimbursable basis consistent with Section
IV.C.1.b of the NOFO and reimbursement is for periods of no
more than six months each.
By providing an expanded universe of potential issuers of letters
of credit and specific, permissible alternatives to the letter of
credit requirement, NTIA remains faithful to our objectives of
encouraging robust participation from a broad range of service
providers while giving states and territories more ways to ensure that
grant recipients can build a high-quality network and operate it for
years to come.
______
Response to Written Questions Submitted by Deb Fischer to
Hon. Gina M. Raimondo
As you know, the bipartisan infrastructure law directed a study to
examine ways to open new spectrum frequencies without imperiling vital
national security operations in the 3.1-3.45 gigahertz band. The
Department of Commerce's National Telecommunications and Information
Administration (NTIA) and the Department of Defense (DOD) co-chaired
the study that produced a final report -submitted to the Department of
Commerce (DOC) three weeks ago--including input and discussion from
industry and Federal stakeholders.
During the hearing, you verbally affirmed your support of a joint
briefing with the DOD to disseminate the contents of the report with
members of both the Senate Commerce Committee and Senate Armed Services
Committee. However, it is my understanding that the DOC and NTIA
suddenly withdrew from participating in the upcoming briefing scheduled
for this exact purpose. I am concerned by this development, which
appears to conflict with your remarks during the hearing.
Question 1. Going forward, will you commit that the appropriate
representatives from the DOC and NTIA will fully participate in
scheduled briefings related to implementation of this report?
Answer. On September 28, 2023, the Department of Defense (DoD)
submitted its Emerging Mid-Band Radar Spectrum Sharing (EMBRSS)
Feasibility Assessment to the Department of Commerce. The Department
appreciated the opportunity to have provided a briefing on November 16,
2023, to the Committee, in conjunction with the DoD, on the contents of
the report after it was submitted by the DoD to the Department. The
Department and its DoD colleagues are committed to working with the
Committee to ensure it can perform its oversight functions related to
the report.
______
Response to Written Questions Submitted by Hon. Jerry Moran to
Hon. Gina M. Raimondo
AI NIST Risk Management Framework
Artificial intelligence is one of the key technology areas in the
CHIPS and Science Act, and both the Department of Commerce and the
Foundation have significant interest in the development of AI. Among
these efforts is NIST's Artificial Intelligence Risk Management
Framework, which was authorized by Congress to help establish a
baseline of good practices for organizations who develop and employ AI
to follow.
Question 1. How will organizations employing NIST's Artificial
Intelligence Risk Management Framework be better prepared to mitigate
potential risks associated with AI use, compared to organizations not
using the RMF?
Answer. The NIST AI Risk Management Framework (AI RMF 1.0) offers a
voluntary resource to the organizations designing, developing,
deploying, or using AI systems to help manage the potential risks of AI
and promote trustworthy and responsible development and use of AI
systems. Released in January 2023, the AI RMF is a framework that
provides a flexible, structured, and measurable process to address AI
risks purposefully and continually throughout the AI lifecycle. The
NIST AI RMF provides a set of outcomes that enable dialogue,
understanding, and actions to manage AI risks. The Framework is
intended to be voluntary, rights-preserving, non-sector-specific, and
use-case agnostic, providing flexibility to organizations of all sizes
and in all sectors and throughout society to implement the approaches
in the Framework. The AI RMF is designed to be practical, to adapt to
the AI landscape as AI technologies continue to develop, and to be
operationalized by organizations in varying degrees and capacities so
society can benefit from AI while also being protected from its
potential harms. The NIST AI RMF has been exceptionally well-received
nationally and internationally, where public and private entities in
the United States and abroad are adopting or incorporating it in their
responsible AI practices. We are following up with additional resources
for the implementation of the Framework, such as a companion resource
for generative AI.
Workforce Challenges for High-Demand Fields
Question 1. How is the Department working to ensure that our Nation
can recruit, educate, and retain the world's brightest minds that will
move our technology-driven economy forward through advancement in AI,
quantum computing, and other key technologies?
Answer. In the one year since the CHIPS and Science Act was signed
into law, companies have announced over $166 billion in manufacturing
in semiconductors and electronics, and at least 50 community colleges
in 19 states have announced new or expanded programming to help
American workers access good-paying jobs in the semiconductor industry.
As part of the Biden Administration's long-term vision for CHIPS for
America,
Secretary Raimondo has called on the United States to double the
semiconductor workforce overall, for U.S. colleges and universities to
triple the number of graduates in semiconductor-related fields, and for
semiconductor companies to work with high schools, community colleges,
and unions to train 100,000 new technicians. CHIPS for America will
embrace a whole-of-society approach across government, education, labor
unions, industry, and community organizations to achieve these
ambitious goals.
The Department of Commerce is committed to helping more American
workers compete and win in the 21st century global economy. The
National Institute of Standards and Technology (NIST) Manufacturing
Extension Partnership (MEP) helps businesses narrow gaps in our supply
chains and make manufacturing more resilient. NIST has issued a Notice
of Funding Opportunity for Manufacturing USA Workforce, Education and
Vibrant Ecosystems (WEAVE) public service awards to the 17
Manufacturing USA institutes designed to engage Historically Black
Colleges and Universities and other Minority Serving Institutions and
rural serving institutions of higher education. NIST is currently
reviewing applications and anticipates awards will be announced by the
end of the calendar year.
In Spring 2024, NIST will announce a funding opportunity for a new
Commerce Department-sponsored Manufacturing USA institute focused on an
advanced manufacturing topic using FY23 appropriated funds. As with all
Manufacturing USA institutes, there will be a program to educate and
train skilled workers, working with national resources ranging from
community and technical colleges to Tier 1 research universities.
NIST is also proactively supporting the Nation's workforce needs in
critical and emerging technology areas. For example:
NIST's joint institutes, JILA, the Joint Quantum Institute
(JQI), and the Joint Center for Quantum Information and
Computer Science (QuICS) play a critical role in educating the
quantum workforce of tomorrow.
NIST co-funds with the National Science Foundation the
Institute for Trustworthy AI in Law and Society (TRAILS).
TRAILS provides opportunities for training the next generation
of diverse and multidisciplinary talent to tackle the
opportunities and challenge that AI systems may bring.
NIST's NICE (formerly the National Initiative for
Cybersecurity Education) Program also seeks to energize,
promote, and coordinate a robust community working together to
advance an integrated ecosystem of cybersecurity education,
training, and workforce development. In addition to engaging
with stakeholders through workshops and events, the Program
also published and updates the NICE Framework, a common lexicon
for describing and sharing information about cybersecurity
work.
The Economic Development Administration's Regional Technology and
Innovation Hubs (Tech Hubs) program is working to create regional
innovation centers across the country by bringing together industry,
higher education institutions, state and local governments, economic
development organizations, and labor and workforce partners to
supercharge ecosystems of innovation for technologies that are
essential to our national security and economic competitiveness. The
Tech Hubs program is a key part of President Biden's Investing in
America agenda, stimulating private sector investment, creating good-
paying jobs, revitalizing American manufacturing, and ensuring no
community is left behind by America's economic progress.
Through the Tech Hubs program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to manufacture, commercialize, and deploy these
technologies, guided by the following priorities: (1) making more U.S.
regions strong competitors in the global innovation economy; (2)
building strong communities that share in the prosperity technological
innovations bring; (3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and (4) strengthening
and increasing the resilience of the supply chains that our innovative
technology-centric industries rely on to stay secure and competitive.
On October 23, 2023, EDA announced the 31 Phase 1 Tech Hubs
designees and 29 Strategy Development Grant awardees and posted the
Notice of Funding Opportunity for Phase 2. The 31 Tech Hubs focus on
developing and growing innovative industries in regions across the
country, including semiconductors, clean energy, critical minerals,
biotechnology, precision medicine, artificial intelligence, quantum
computing, and more. The Tech Hubs program required regions to bring
together consortia aligned on a technology-based economic development
strategy. These consortia were required to include workforce
organizations such as labor unions, to ensure both the growth of a
local, skilled workforce to meet the employment needs of regional
technology-centric industries and the creation of quality jobs in the
communities where workers live.
The Department is grateful to Congress for the $500 million in
appropriations that we received in FY 2023 to catalyze investment in
technologies critical to economic growth, national security, and job
creation, and help communities across the country become centers of
innovation. The appropriated $500 million represents only five percent
of the $10 billion that was authorized through the CHIPS and Science
Act. The level of interest exceeds our currently available funds, which
means not every deserving applicant will be able to receive Tech Hubs
designation or funding to build economic development plans to compete
for future rounds of the Tech Hub program.
BEAD
Access to quality broadband is a prerequisite to rural Kansans (and
rural Americans in general) participating in the type of research and
development we have discussed today.
However, I am concerned that some of the recommendations that NTIA
has pushed for the program in the NOFO and will be weighing in on in
its coming review and approval of state broadband plans could have an
adverse effect on that goal of connecting all Americans. These
concerning provisions include items like labor force and pricing
requirements that go far beyond what the IIJA directed.
Question 1. Can you assure us that the NTIA won't push states to
include such provisions that could, in the end, limit participation in
the program or hinder the ability of those who do participate to deploy
broadband in the most efficient and effective manner?
Answer. NTIA is committed to the success of the Broadband Equity,
Access, and Deployment (BEAD) program, and we believe the Notice of
Funding Opportunity (NOFO) strikes an appropriate balance between the
deployment, access, and affordability objectives established by
Congress in the Bipartisan Infrastructure Law. NTIA is committed to
ensuring BEAD Program participation by Internet Service Providers of
all types, and continually takes steps to ensure program rules do not
hinder the ability of Providers to participate, as evidenced by the
changes NTIA recently undertook to the BEAD Program Letter of Credit
requirements.
We will not achieve the goals of the BEAD Program without a high-
skilled workforce prepared to deploy BEAD-funded networks. That is why
NTIA asked states to consider workforce development strategies as part
of their Initial and Final Proposals. This is not a list of
requirements, but a list of considerations we urge states to think
through as they consider how their state's workforce will build out
high-speed Internet infrastructure.
Additionally, IIJA expressly provides that nothing in the statute
should be construed to authorize NTIA to regulate the rates charged for
broadband service,\23\ and, consistent with that statutory provision,
nothing in the NOFO regulates rates. IIJA also requires BEAD Program
subgrantees to offer at least one ``low-cost broadband service option
for eligible subscribers.'' \24\ Requiring, as the statute does, that
providers receiving a BEAD grant offer a low-cost service offering is
not rate regulation; it's a grant condition and a requirement of
Federal law.
---------------------------------------------------------------------------
\23\ Id. at Sec. 60102(h)(5)(D).
\24\ Id. at Sec. 60102(h)(4)(B).
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Program Flexibilities
To help make the Tech Hubs program successful across a variety of
regions and technology sectors, the program's authorization in the
CHIPS and Science Act is more flexible than that of many programs at
EDA. For example, the statute defines Tech Hubs matching funds in
relation to the hub's total operating costs, unlike the Public Works
and Economic Development Act's definition of cost share, which only
considers the specific project expenses.
Similarly, the CHIPS and Science Act defines a range of permissible
technology maturation, business assistance, and workforce development
activities that are unusual under other EDA awards.
Question 1. How is the agency ensuring that its rules, reviewers,
and staff are positioned so that Tech Hubs consortia will be able to
make use of this flexibility to fit their regional needs and succeed?
Answer. On October 23, 2023, the Department of Commerce's Economic
Development Administration (EDA) designated 31 Tech Hubs that are
strengthening the country's economic and national security, and global
competitiveness by enabling the industries of the future to start,
grow, and remain in regions across the United States. The 31 Designated
Tech Hubs are eligible to apply to Phase 2 of the program, through
which EDA expects to award five to 10 Hubs Implementation awards each
amounting to approximately $40 to $70 million. Each Tech Hub applied as
a consortium of higher education, government, industry, economic
development, labor or workforce, and other organizations focused on
improving technology and innovation across the country. Of the 31 Tech
Hubs, 11 received Strategy Development Grants to strengthen their
consortia and mature their approach to becoming more globally
competitive. EDA awarded an additional 18 Strategy Development Grants
to consortia to further develop their technology-based economic
development plans and achieve Tech Hubs designation in the future.
EDA has designed the Tech Hubs Phase 2 NOFO to implement its
authorizing statute's flexibilities and to enable Hubs to propose and
compete for funding for projects that align with each region's unique
strategy and to address their unique needs. EDA has also established a
new team to implement and manage the Tech Hubs program, and that team
combines EDA experience with new skillsets and expertise to effectively
manage the program and enable applicants, designees, and recipients.
Quantum Computing
Question 1. Are we at the point with Quantum computing that NSF or
NIST or another Federal agency should be developing metrics to
determine efficacy and efficiency of quantum computations?
Answer. Research and development of metrics to determine the
efficacy and efficiency of quantum computations is critical to enabling
hardware developers to make performance improvements to their
technology. NIST staff, researchers from across the government,
academia, and industry, have already begun partnering with U.S.
standards organizations to explore metrics and performance benchmarking
for quantum computing. For example, last year, with technical support
from NIST, the industry-led, Quantum Economic Development Consortium
released a report titled ``Application-oriented performance benchmarks
for quantum computing''.
Quantum computing hardware is very different than classical
computers and is advancing rapidly, so evaluating it is different and
presents new challenges--meaning the performance metrics are going to
be different and are still at an early stage of development. Activities
are being tempered by the fact that, despite substantial advancements,
the timing for the arrival of high-impact practical applications of
quantum computing remains unclear. It will be important that industry,
academia, and Federal agencies play a role in this research and
development to ensure that developed metrics accelerate and not hinder
further innovation.
Workforce Challenges for Domestic Superconducting Ecosystem
Question 1. What are the workforce shortfalls in establishing a
viable domestic superconducting ecosystem and how is DOC working to
address this need?
Answer. Superconductors and related technologies are important to a
number of sectors, from healthcare to energy, from quantum computing to
space. The need to accelerate the translation from concept to
manufacturing is recognized in the 2022 National Strategy for Advanced
Manufacturing. Workforce challenges in superconducting fabrication are
similar to those in advanced manufacturing more broadly, including
attracting, retaining, and training talent. Unique challenges include
competition with the semiconductor industry for a limited talent pool
and a limited availability of dedicated tools, as superconducting
materials typically are not allowed in semiconductor facilities to
preserve semiconductor processing quality, and dedicated space and
equipment warrant additional costs.
The Department is dedicated to supporting domestic education and
workforce development to enhance the Nation's competitiveness. The
Department's NIST is home to the program office for the Manufacturing
USA network, which helps prepare workers for high-quality technical
jobs in advanced manufacturing, including the superconducting industry.
In advanced manufacturing workforce development, Manufacturing USA
focuses on three priorities: equip the workforce with evolving skills,
broaden access to career pathways, and spark interest in careers to
secure a steady workforce talent pool.
NIST has been a leader in superconducting research for more than 50
years, playing a key role in the superconducting ecosystem talent pool
for research and development and commercialization. Many graduate
students, postdocs, and guest researchers are being trained in NIST
laboratories, with access to cutting-edge technologies and
infrastructure, as well as world-leading scientists who have made
breakthrough discoveries in superconductivity and its practical
applications. Many of these researchers become leaders in industry,
academia, and at other national laboratories.
DOC and NSF Coordination
Question 1. In light of the MOU announced on July 26 to improve
coordination between EDA and NSF on the Tech Hubs and NSF Engines
programs, what specific steps are NSF and DOC taking to avoid
duplication between these two programs?
Answer. The Department of Commerce's Economic Development
Administration (EDA) and the National Science Foundation (NSF) are
working closely on the implementation of relevant provisions of the
CHIPS and Science Act. Regarding Tech Hubs and NSF's Regional
Innovation Engines, EDA and NSF signed a Memorandum of Understanding
(MOU) to facilitate data sharing and collaboration these two programs.
Tech Hubs program is complementary to NSF's Regional Innovation
Engines. Tech Hubs focuses on scaling up and commercializing products
and services in key technology areas, where NSF is focusing on use-
inspired research and development.
Additionally, NSF is one of the founding Federal agencies for the
National Semiconductor Technology Center (NSTC) along with the
Departments of Commerce, Defense, and Energy. These Federal founding
members will also be a part of a Steering Committee to shape the
strategy of the NSTC, including semiconductor R&D and workforce
initiatives.
CHIPS Clawbacks
The CHIPS Act has strong language that allows the Commerce
Department to audit grant recipients and claw back monies from firms
that have been found to violate the foreign entity of concern
requirements. The IRA also provided foreign entity of concern language
for the 30D electric vehicle tax credit. While Treasury is still
working on guidance for that portion of the bill, it is unclear whether
or not there is sufficient audit and clawback authority to make sure
that foreign entity of concern requirements are enforced.
Question 1. Can you comment on your Department's experience in
finalizing the foreign entity of concern rules and how you expect the
audit and clawback authorities to enable better stewardship of taxpayer
dollars?
Answer. The Commerce Department is committed to being good stewards
of taxpayer dollars. The Department fully expects all recipients of
CHIPS Incentives funding to comply with the guardrails. CHIPS for
America is a national security initiative, and we will enforce these
guardrails to uphold our national security. We expect funding
recipients to create robust programs to ensure compliance. With respect
to the expansion guardrail, the funding recipient has an affirmative
obligation to notify Commerce in advance of any significant
transactions that could result in a material expansion of semiconductor
capacity in a country of concern. If the Department learns of a
potential violation of any of the guardrails, including from
information provided by another Government agency, we will review to
determine whether the allegation has merit, whether there is a
possibility to take action that would mitigate any risk to national
security, or whether we will claw back funding or take other action as
appropriate.
______
Response to Written Questions Submitted by Hon. Dan Sullivan to
Hon. Gina M. Raimondo
In July, Ranking Member Cruz (R-TX) and Senator Mark Kelly (D-AZ)
successfully amended this year's National Defense Authorization Act
(NDAA) to expedite NEPA approvals for semiconductor fabs utilizing
CHIPS funding opportunities. Last month, in testimony before the House
Science, Space, and Technology Committee, you noted that expediting
NEPA approvals for projects utilizing CHIPS funding would ``help us a
lot to move faster.''
Question 1. Can you identify other relevant areas in need of
regulatory streamlining?
Question 2. In the spirit of the CHIPS Act, does the Department
support regulatory and permitting streamlining for other semiconductor-
relevant supply chain inputs like critical mineral development and
processing, and energy development and pipelines?
Answer. The Department, in coordination with other Federal
agencies, welcomes the opportunity to have a dialogue with Congress
about sectors that could benefit from thoughtful regulatory efficiency
while protecting the environment.
The Department is doing everything within its power to stand up a
fast process for issuing CHIPS incentives. As we build out American
semiconductor manufacturing capabilities, we must also maintain basic
environmental protections.
On December 27, 2023, CHIPS for America program published a draft
Programmatic Environmental Assessment (PEA) on the Federal Register
(``Notice of Availability of Draft Programmatic Environmental
Assessment for Modernization and Internal Expansion of Existing
Semiconductor Fabrication Facilities Under the CHIPS Incentives
Program''). The purpose of the PEA is to evaluate the environmental
impacts of modernization and internal expansion projects that are
eligible for the February 2023 CHIPS Incentives Program Commercial
Fabrication Facilities Notice of Funding Opportunity (NOFO). The
finalization of the PEA will allow CPO to complete a more streamlined
NEPA review of these types of modernization projects. Comments must be
received by January 25, 2024. The CHIPS Environment team is dedicated
to creating an efficient and robust NEPA process. As detailed in the
February 2023 NOFO, the CHIPS Program seeks to support current-
generation and mature-node semiconductors facilities vital to our
country's national and economic security. A streamlined environmental
review will allow these upgrade and modernization projects to proceed
expeditiously.
The United States is currently the world-leader in AI development,
deployment, and innovation, but during a committee hearing last month
on transparency in Artificial Intelligence, witnesses explained that
other nations are ``working harder than ever to develop the next major
technological developments in AI. . .''
The thought of losing our lead in AI development raises a number of
alarm bells for my colleagues and I, particularly if our lead is lost
to an adversarial power like China. In briefings and roundtables that
Congress has had on this topic, it has been estimated that China is
somewhere between one-and-a-half to two years behind us in AI
capabilities, however the recent explosion in popularity of generative
AI has renewed their focus on this race. In fact, this summer the
Chinese began working on the development of their own lithography
machines for printing the high-tech chips needed for AI computing.
Question 1. What role does the CHIPS Act, and the Department of
Commerce more broadly, have in maintaining U.S. superiority in AI
development?
Question 2. Do you see any logical supply chain or computing power
chokepoints relevant to the Department of Commerce that could be used
to slow down China's development of AI technology?
Answer. The Department of Commerce is playing a fundamental role in
the U.S. Government's policy development that shapes the design,
development, deployment, and use of artificial intelligence (AI)
technologies. The Department of Commerce is committed to working across
the Federal government to develop AI policy that is premised on the
responsible use of AI technology that mitigates negative risks and
harnesses potential benefits while promoting safety and innovation. The
Department engages with a variety of stakeholders, including but not
limited to academia, civil society, and industry, to better understand
the current AI landscape and where government can be helpful. The
Department is undertaking multiple lines of effort related to A.I.
policies and practices.
The National Institute of Standards and Technology (NIST) works to
realize the full promise of AI as a tool that will enable American
innovation, enhance economic security, and improve our quality of life.
NIST has several ongoing efforts including conducting fundamental
research, establishing benchmarks and metrics to evaluate AI
technologies, leading and participating in the development of technical
AI standards, and leading discussions both nationally and
internationally on the development of AI policies. Key efforts include:
NIST released an AI Risk Management Framework (AI RMF),
which is a voluntary tool to help individuals and organizations
manage risks associated with AI. NIST also hosts the NIST
Trustworthy & Responsible AI Resource Center, providing access
to a wide range of relevant AI resources.
In July 2023, NIST launched the NIST Generative AI Public
Working Group to spearhead the development of a cross-sectoral
AI RMF profile for managing the risks of generative AI models
or systems. The four program areas include: governance, content
provenance, pre-deployment testing, and incident disclosure.
The National AI Advisory Committee (NAIAC), whose members
are appointed by the Secretary of Commerce, advises the
President and the National AI Initiative Office on matters
related to the National AI Initiative. The Committee's first-
year report, required under the National AI Initiative Act of
2020, contains recommendations that include adequately funding
programs under the National Artificial Intelligence Initiative
Act and the NIST Trustworthy and Responsible AI Program. The
Committee has also published several non-decisional documents,
including one on foundational models and generative AI.
In November 2023, NIST announced the establishment of the
Artificial Intelligence Safety Institute and its Consortium
(Consortium) and invited organizations to provide letters of
interest describing technical expertise and products, data,
and/or models to enable the development and deployment of safe
and trustworthy AI systems through the AI RMF. The Federal
Register notice (88 FR 75276) is the initial step for NIST to
enable collaborations with non-profit organizations,
universities, other government agencies, and technology
companies to address challenges associated with the development
and deployment of AI. The Consortium equips and empowers
organizations by the establishment of a new measurement science
that will enable the identification of proven, scalable, and
interoperable techniques and metrics to promote development and
responsible use of safe and trustworthy AI, particularly for
the most advanced AI systems, such as the most capable
foundation models.
As part of President Biden's Executive Order (EO) on Safe, Secure,
and Trustworthy Development and Use of Artificial Intelligence, NIST
will lead in the development of guidelines and best practices to
promote consensus industry standards that help ensure the development
and deployment of safe, secure, and trustworthy AI systems. NIST will
work in consultation with several other agencies for actions under the
EO, and NIST will also continue to work with private sector, academia,
and civil society stakeholders as it produces guidance called for by
the EO.
On April 11, 2023, the National Telecommunications and Information
Administration (NTIA) released a Request for Comment (RFC) inviting
academic, industry, civil society, government stakeholders, and the
public to comment on what the Federal government should be doing to
promote a robust accountability ecosystem for AI and ensure that AI
systems are implemented fairly and safely. The RFC sought feedback on
policies that can support the development of AI audits, assessments,
certifications, and other mechanisms to create responsible and trusted
AI systems. It further asked whether different approaches are warranted
for different industries and what other policy responses might be
appropriate.
U.S. Patent and Trademark Office (USPTO) is currently studying how
AI affects the patent system and intellectual property (IP). To this
end, the agency created an AI and Emerging Technology (ET) Partnership,
an ongoing cooperative effort between the USPTO and the AI/ET
community, including academia, independent inventors, small businesses,
industry, other government agencies, nonprofits, and civil society.
Additionally, the agency has issued two reports on the intersection of
IP and AI, including Public Views on AI and IP Policy, and Inventing
AI--Tracing the diffusion of AI within U.S. Patents.
In October 2022, the Commerce Department's Bureau of Industry and
Security (BIS) imposed restrictions on the PRC's access to advanced
semiconductor manufacturing equipment, chips and other items needed to
develop AI and prohibited U.S. persons from supporting chip development
and production that power AI systems at certain semiconductor
fabrication facilities located in the PRC or Macau without a license.
BIS continues to assess technologies within the AI ecosystem to
identify technologies necessary for control to ensure the national
security of the United States. On October 17, 2023, the BIS released a
package of rules designed to update export controls on advanced
computing semiconductors and semiconductor manufacturing equipment, as
well as items that support supercomputing applications and end-uses, to
arms embargoed countries, including the PRC, and to place additional
Chinese entities on the Entity List. These controls were strategically
crafted to address, among other concerns, the PRC's efforts to obtain
semiconductor manufacturing equipment essential to producing advanced
integrated circuits needed for the next generation of advanced weapon
systems, as well as high-end advanced computing semiconductors
necessary to enable the development and production of technologies such
as artificial intelligence (AI) used in military applications. These
rules reinforce the October 7, 2022, controls to restrict the PRC's
ability to both purchase and manufacture certain high-end chips
critical for military advantage.
In August 2022, the International Trade Administration (ITA) issued
a RFC on Artificial Intelligence Export Competitiveness, exploring
foreign regulations and potential trade barriers.
As we work with other Federal agencies to promote the safe and
responsible development of A.I. here at home, we are also supporting
Biden Administration efforts with likeminded allies and partners who
share our values, such as anti-discrimination, privacy, and human
rights.
The CHIPS and Science Act passed Congress to boost U.S.
semiconductor and advanced technology manufacturing and
competitiveness--specifically as it relates to China. In your
testimony, you explain that the CHIPS and Science Act's success will be
judged on two key criteria:
1) Whether the program enabled us to build a more resilient
semiconductor industry.
2) Whether the Department of Commerce was a good steward of taxpayer
dollars.
Those are two fair metrics, both of which align with Congress's
intent in passing CHIPS. However, there have been ancillary policies
included during implementation that do not align with congressional
intent. For example:
Requirements that applicants requesting more than $150
million provide on-or near-site child care.
Requirements that applicants requesting more than $150
million describe their plans to provide ``adult care,''
transportation assistance, housing assistance, and ``emergency
cash assistance.''
Requiring applicants to detail how they will hire
``individuals whose ability or opportunity to compete in the
economy has been impaired due to . . . racial or ethnic
prejudice or cultural bias within American society.''
Favoring applicants who commit to pursuing ``environmental
justice'' and use 100 percent renewable energy for facility
operations.
Each of these requirements come straight from your Department's
Notice of Funding Opportunity (``NOFO''). None appear anywhere in the
text of the legislation as passed by Congress, and ultimately each is
likely to make the U.S. less competitive in manufacturing
semiconductors and other advanced technologies--not to mention
potentially freezing out applicants from rural areas that are less
developed.
This has become a pattern with this Administration: Congress comes
together to pass carefully negotiated bipartisan legislation like the
Bipartisan Infrastructure Bill, the Safer Communities Act, and the
CHIPS Act, and then during implementation, executive agencies add on
any number of partisan wish list items that stood no chance of making
it through the legislative process.
Question 1. Can you cite to where in the statute gives the Dept. of
Commerce the authority to require each of the bulleted examples above?
Question 2. Do you think that this sort of bait-and-switch,
legislating from the agencies, is dis-incentivizing bipartisanship?
Question 3. How can you assure Congress that any authority given to
the Dept. of Commerce will not be utilized as a partisan policy vehicle
during implementation?
Answer. The Department is committed to successfully implementing
the CHIPS for America Program and doing so in accordance with the
authorities provided by Congress in the CHIPS and Science Act. To that
end, the Department issued its first notice of funding opportunity
(NOFO), CHIPS Incentives Program--Commercial Fabrication Facilities, on
February 28, 2023. Each of the Program requirements outlined in the
NOFO, including those provided in your question, is supported by the
CHIPS Act and is necessary to ensure the long-term success of the CHIPS
for America Program. The CHIPS Act requires that the Secretary only
approve an application if the Secretary ``determines that the project
to which the application relates is in the economic and national
security interests of the United States.'' It is not only appropriate
but necessary for the Secretary to establish requirements to properly
make that required determination. Additionally, among other provisions,
the CHIPS Act provides that applicants must demonstrate that they have
``made commitments to worker and community investment'' including
``programs to expand employment opportunity for economically
disadvantaged individuals'' and documented ``workforce needs and
developed a strategy to meet such workforce needs consistent with the
commitments.'' The CHIPS Act also provides that applicants must
demonstrate ``an executable plan to sustain the facility'' without
additional Federal financial assistance and ``to identify and mitigate
relevant semiconductor supply chain security risks, such as risks
associated with access, availability, confidentiality, integrity, and a
lack of geographic diversification in the covered entity's supply
chain.'' The Department is also required to ``increase participation of
and outreach to economically disadvantaged individuals, minority-owned
businesses, veteran-owned businesses, and women-owned businesses.''
Ultimately, our application process is rigorous and not driven by
any one requirement. Advancing our economic and national security is
the primary lens through which we are evaluating applications. First
and foremost, we are looking for projects that advance U.S. economic
and national security. Among other things, we are looking at whether
projects build sustainable domestic capacity that reduces U.S. reliance
on vulnerable or overly concentrated production. If an applicant cannot
make a case for how its project promotes economic and national
security, it will not receive funding. The Department also laid out
five additional criteria that it will use to evaluate projects,
including a project's commercial viability, an applicant's financial
strength, and an applicant's commitment to workforce development. It is
vitally important that our funding contributes to the creation of good-
paying jobs and long-term, inclusive economic growth. Other criteria we
weigh include project technical feasibility and readiness, as well as
broader community impacts. This includes assessments of environmental
risk and the effects of climate change.
We also want to clarify the characterization of some of the
requirements you listed. With respect to the statement that the
Department requires that applicants requesting more than $150 million
describe their plans to provide ``adult care, transportation
assistance, housing assistance, and emergency cash assistance,'' all
applicants are asked to note the wraparound services they and their
partners will provide to help retain and attract workers. There is not
a requirement that companies provide the services described, but rather
that the applicant notes what services they plan to provide to increase
access to training and employment opportunities. With respect to the
statement that the Department is ``Requiring applicants to detail how
they will hire `individuals whose ability or opportunity to compete in
the economy has been impaired due to. . .racial or ethnic prejudice or
cultural bias within American society','' the Department notes that
this is one category of ``economically disadvantaged individuals.'' The
CHIPS Act text states that ``It is the sense of Congress that, in
carrying out subsection (a), the Secretary should allocate funds in a
manner that--. . . (6) promotes the inclusion of economically
disadvantaged individuals and small businesses.'' To satisfy this
element of the legislation, the Department has asked applicants to
``develop an equity strategy, in concert with their partners, to create
equitable workforce pathways for economically disadvantaged individuals
in their region.'' (NOFO, page 21)
______
Response to Written Questions Submitted by Hon. Marsha Blackburn to
Hon. Gina M. Raimondo
Question 1. Will you commit to working with Secretary Yellen to
develop a final rule to implement the section 48D credit with a
definition of semiconductor that includes semiconductor-grade
polysilicon?
Answer. Commerce and Treasury are coordinating closely on the
investment tax credit (ITC) to ensure that incentives are complementary
and advance our shared economic and national security goals. The
Treasury Department is in the lead of implementing the CHIPS ITC and
continues working to publish its final rule.
Question 2. I'm concerned that potential CHIPS Act R&D dollars will
go towards projects who associated intellectual property is mainly
based overseas. I believe it is essential that companies utilizing U.S.
taxpayer dollars should conduct most of their R&D in the U.S.
a. How are you working with applicants to ensure valued R&D and
intellectual property is housed and based in the U.S.?
b. What more can Congress do to incentivize U.S.-based R&D?
Answer. The Department takes seriously its obligation to promote
U.S. manufacturing, economic competitiveness, and national security
goals, including in the execution of its research and development
programs. Recent publications have reiterated this commitment to
potential applicants for R&D funds. For instance, the November 2023
vision paper for the National Advanced Packaging Manufacturing Program
articulated our goal of establishing a ``a vibrant, self-sustaining,
profitable, high-volume, onshore packaging industry where advanced node
chips manufactured in the United States are packaged in the United
States.'' The paper also articulated that accelerating critical
innovations in advanced packaging to U.S. manufacturing entities is a
program mission.
CHIPS for America, in concert with relevant groups throughout the
Department, is reviewing best practices and developing protocols to
both protect intellectual property and to encourage domestic production
and commercialization.
Within the CHIPS Program Office, which intends to fund R&D
facilities, the national security guardrails will help ensure CHIPS
investments enhance global supply chain resilience in coordination with
allies and partners and will promote U.S. leadership in designing and
building important semiconductor technologies. In the final rule, the
Department is implementing two national security guardrails: 1) an
expansion clawback that limits the expansion of semiconductor
manufacturing in foreign countries of concern; and 2) a technology
clawback that limits joint research or technology licensing efforts
with foreign entities of concern.
The final rule strikes a balance between limiting activities that
are inconsistent with the national security goals of the CHIPS Act and
the desire not to unduly disrupt the existing semiconductor ecosystem.
To prevent circumvention of the Technology Clawback while allowing for
greater flexibility in enforcement, the final rule limits direct
application of the Technology Clawback to just the covered entity but
allows the Department to impose additional conditions on ``related
entities'' of the covered entity with respect to joint research and
technology licensing. A related entity is any entity that directly, or
indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the covered entity. We
will document these relationships and joint research and technology
activities in the agreement with the covered entity. In contrast to the
mandatory clawback of the Technology Clawback, Commerce will have
flexibility to take appropriate remedial measures, including imposing a
mitigation agreement, if the additional conditions are violated.
Question 3. How are you coordinating your activities with the
national laboratories? What are the potential areas for collaboration
with the national laboratories?
Answer. There are potential areas for collaboration with national
laboratories in critical and emerging technologies, such as with AI,
biotechnology, quantum information science, and energy technologies.
For example, in quantum, activities with national laboratories are
overseen by the Department of Energy (DOE), and coordination happens
through the National Science and Technology Council Subcommittee on
Quantum Information Science (SCQIS) with support by the National
Quantum Coordination Office (NQCO). The NQCO carries out the daily
activities needed for supporting the National Quantum Initiative; NIST
details a researcher to that office. As an example of this
coordination, Commerce hosted the SCQIS's annual Quantum Information
Science Program Day at the Hoover Building in September 2023. The event
is an annual government-only meeting that brings together program
managers, researchers, and stakeholders from across the U.S. Government
to coordinate and discuss programs, projects, and directions for
Quantum Information Science research and development (R&D) across the
Federal government.
As a consequence of these coordination activities in quantum, NIST
has a number of collaborative projects with researchers at national
laboratories, on topics such as advancing quantum computing and its
applications, the use of quantum-enhanced sensing for applications in
high-energy physics, new approaches to quantum networking, and
development of integrated photonics for quantum (a key enabling
technology). NIST will also closely coordinate with the Department of
Energy on actions in response to President Biden's Executive Order on
Safe, Secure, and Trustworthy Development and Use of Artificial
Intelligence. This will include developing and ensuring availability of
testing environments such as AI model evaluation tools and AI testbeds
to support the development of safe, secure, and trustworthy AI
technologies. NIST is working with DOE to utilize their advanced
compute architecture for testing and evaluating computationally
intensive AI algorithms such as large language models (LLMs).
Question 4. I'm concerned that much of the advanced packaging of
semiconductors is done in China.
a. How much of this is being done in China?
b. What are you doing to reduce the costs and regulatory barriers
of this innovation in the U.S.?
Answer. While China accounts for a notable share of overall
packaging of semiconductors--representing approximately 20 percent of
chips sold by U.S.-based companies--a small share of this is advanced
packaging. Much of the world's advanced packaging is carried out by the
three major providers of cutting-edge semiconductor fabrication: Taiwan
Semiconductor Manufacturing Company (TSMC), Samsung, and Intel. Most
packaging for these companies is carried out outside China, with
Intel's advanced packaging facilities located in Malaysia and in the
United States, where it is investing an additional $3.5 billion to
expand its Rio Rancho, New Mexico advanced packaging facility.
On November 20, 2023, CHIPS for America released ``The Vision for
the National Advanced Packaging Manufacturing Program'', which outlined
its intent to ``establish a vibrant, self-sustaining, profitable, high-
volume, onshore packaging industry where advanced node chips
manufactured in the United States are packaged in the United States.''
The Vision paper further recognized the need to establish domestic
advanced packaging manufacturing capabilities that are cost-effective
and efficient. To achieve these goals, CHIPS for America envisions
investing in four technology areas--materials and substrates;
equipment, tools, and processes; power delivery and thermal management;
and photonics and connectors--as well as two ecosystem areas--chiplets
and co-design--as well as in a physical piloting facility.
Question 5. Most of the funding for the Public Wireless Supply
Chain Innovation Fund has gone to academic institutions. What steps is
Commerce specifically taking to support commercial wireless deployment?
Answer. The CHIPS and Science Act funded the Public Wireless Supply
Chain Innovation Fund, administered by the National Telecommunications
and Information Administration (NTIA). The $1.5 billion Innovation Fund
supports the development of open and interoperable wireless networks.
This grant program will help drive wireless innovation, foster
competition, and strengthen supply chain resilience. It will also help
unlock opportunities for innovation and competition in a market
historically dominated by a few suppliers, including high-risk
suppliers that raise security concerns.
In April 2023, the Department announced its first Notice of Funding
Opportunity under the Innovation Fund, making $140.5 million available
to demonstrate the viability of new approaches to wireless, such as
open radio access networks (Open RAN). The Department received more
than 120 applications for the first round of funding. On February 12,
2024, the Department announced the fourth and final round of funding
from this first Notice of Funding Opportunity, with an award of $42.3
million. This grant will fund a project by a consortium of U.S.
carriers, foreign carriers, universities and equipment suppliers to
establish a testing, evaluation, and research and development (R&D)
center along with a satellite facility. Previous rounds of funding
supported R&D as well as testing and evaluation activities, including
grants to U.S. carriers and equipment suppliers that establish new
testbeds. These investments will make industry-standard testing more
accessible to new market players and encourage greater collaboration
within the wireless industry.
NTIA is committed to working with for-profit companies, trade
groups, civil society, non-profit corporations, and academia to
facilitate the development and deployment of open and interoperable,
standards-based telecommunications networks in communities across
America, including in rural areas.
We anticipate a second Notice of Funding Opportunity to be issued
in Spring 2024.
Question 6. What is the Department of Commerce doing to incentivize
research to commercialization of Quantum technologies?
Answer. The Department of Commerce incentivizes research to
commercialization of Quantum technologies by supporting research that
continues to advance both the technologies and fundamental science
needed to expand quantum applications; by supporting the quantum
ecosystem through engagement with quantum institutes such as the
Quantum Economic Development Consortium (QED-C) and its 170+ corporate
participants; through Cooperative Research and Development Agreements
(CRADAs) with individual companies to help them with particular
technical challenges; and by supporting workforce development
activities, such as those at NIST joint institutes: Joint Quantum
Institute, Joint Center for Quantum Information and Computer Science,
and JILA. NIST also partners with several National Science Foundation
(NSF) and DOE national quantum centers, such as NSF's Quantum Systems
through Entangled Science and Engineering (Q-SEnSE) and DOE's Quantum
Systems Accelerator (QSA). These Centers include activities for
transitioning research to industry, such as engineering partnerships to
enable field deployment of technologies. As an indicator of Department
of Commerce success in incentivizing quantum research to
commercialization, a wide range of NIST quantum technologies is now
being commercialized. For example, in quantum computing, NIST
superconducting circuits, microfabricated ion traps, optical tweezer
arrays, and single-photon technologies are now being used in state-of-
the-art quantum information processor chips. This tech transfer is the
result of decades of world-leading basic quantum information science at
NIST and is being sustained by a robust flow of NIST research
associates (students and postdocs) to quantum companies.
On October 23, 2023, the Economic Development Administration (EDA)
announced the winners of Tech Hubs Phase 1 and posted the Notice of
Funding Opportunity for Phase 2. This announcement included 31
designated Tech Hubs across 32 states and Puerto Rico, as well as the
29 consortia that will receive Strategy Development Grants. The 31 Tech
Hubs focus on developing and growing innovative industries in regions
across the country, including semiconductors, clean energy, critical
minerals, biotechnology, precision medicine, artificial intelligence,
quantum computing, and more. Two designated Tech Hubs, Elevate Quantum
Colorado and Chicago's The Bloch Tech Hub, will primarily focus their
regional technology-centric development strategies on the advancement
of quantum technologies.
Question 7. How are you evaluating potential applicants'
contribution to keep the U.S. in a leadership position in semiconductor
technology? For instance, how are you weighing a company who performs
and keeps its R&D and intellectual property here in the U.S. versus
others?
Answer. The evaluation criteria for each funding opportunity will
reflect relevant policies and best practices--including those already
in effect at agencies with a similar mandate--to improve U.S. economic
and national security, as well as relevant policies used to award CHIPS
Incentives. The evaluation criteria will also incorporate relevant
policies and best practices from previous NIST funding opportunities,
such as technical merit and innovativeness of the proposed work.
Question 8. Can you tell me how you will prioritize the importance
of actual commercialization and time-to-market at the new Manufacturing
USA Institutes?
Answer. Manufacturing USA institutes bridge the gap from discovery
to production and help ensure that U.S. inventions get out of the labs
and are translated into products that are manufactured in the United
States. Seventeen institutes make up the Manufacturing USA National
Network, on technologies such as additive manufacturing (America Makes)
and biomanufacturing (NIIMBL). In 2022, the Institutes worked with more
than 2,500 member organizations, collaborated on over 650 R&D projects,
and engaged over 100,000 people in workforce development. All
Manufacturing USA institutes accelerate time to market for innovation
needed for industrial competitiveness, including through a focus on
Education and Workforce Development to ensure that there are skilled
workers to deploy the technology and benefit from well-compensated
advanced manufacturing jobs.
CHIPS Manufacturing USA Institute Objectives--CHIPS R&D expects
that the NOFO soliciting proposals will seek to achieve the following
objectives:
1. Significantly reduce U.S. chip development and manufacturing
costs, such as by improving capacity planning, optimizing
production, and enabling real-time process adjustments.
2. Improve development cycle time and accelerate adoption of
innovative semiconductor manufacturing technologies, including
breakthrough tools, manufacturing equipment, materials, and
manufacturing processes validated at the shared facility.
3. Advance digital twin-enabled curricula and best practices for
training the semiconductor workforce nationwide.
4. Create a digital twin marketplace for industry, including
entrepreneurs, to access digital models and manufacturing
process flows and to de-risk digital twin development and
implementation.
CHIPS R&D expects to solicit proposals demonstrating strong
industry leadership capable of catalyzing collaboration in software
development relevant to digital twins (including but not limited to
electronic design automation tools), semiconductor manufacturing,
advanced packaging, and assembly. Expected activities include
establishing a shared physical facility where companies can experiment
while protecting proprietary information; enabling industry-relevant
research projects; leveraging a shared marketplace that enables data
aggregation across companies, while protecting proprietary data, to
make powerful digital twins available at low cost; and operating an
education and workforce development program, which may include
partnerships with educational institutions.
Question 9. Please give me an update on the National Manufacturing
Extension Partnership (MEP) Supply Chain Database Act.
Answer. The CHIPS and Science Act directs NIST to establish a
voluntary National Supply Chain Database. This directive did not
include any appropriations. The Manufacturing Extension Partnership
(MEP) Network has Centers in all 50 states and in Puerto Rico. Each
Center is a partnership between the Federal government and a variety of
public or private entities, including state, university, and nonprofit
organizations. Over the last several years, the MEP National Network
has actively engaged with the manufacturing industry, resulting in over
54,000 completed projects with more than 23,000 different manufacturing
clients, leading to $47.6 billion in sales (new and retained), $7.2B
billion in cost savings, $16.8 billion in new client investments, and
in turn, helped create or retain more than 346,000 jobs.
With the enacted funding in Fiscal Year (FY) 2023, MEP invested
$20.4 million in its Centers across the country to initiate the Supply
Chain Optimization and Intelligence Network (SCOIN) and identify
vulnerabilities and gaps in the current manufacturing ecosystem as part
of the MEP Expansion Awards Pilot Program (MEAPP). The SCOIN has
enabled the MEP National Network to employ over 60 supply chain experts
across the country, to focus on mapping and assessing manufacturers in
aerospace; defense; biomanufacturing; and clean energy sectors. The MEP
National Network Supplier Scouting service has received 130 requests to
find an American supplier of a product or technology needed in a
domestic supply chain. To date, 40 unique manufacturing companies have
been identified as exact matches for the requestors.
Question 10. What can we do to expedite regulatory approval and
reviews for businesses engaged in the semiconductors supply chain? Its
my understanding South Korea does this well.
Answer. The Commerce Department's CHIPS Program Office's second
Notice of Funding Opportunity (NOFO), released September 29, 2023,
seeks applications for smaller-scale projects involving the
construction, expansion, or modernization of semiconductor materials
and manufacturing equipment facilities for which the capital investment
falls below $300 million. These applicants play a vital role in
producing the inputs necessary for producing semiconductors in the
United States, support our domestic manufacturing ecosystem, and create
jobs and opportunities in communities across the country. These
projects will produce the equipment, chemicals, gases, and other
materials that are critical to manufacturing semiconductors in America.
The Department seeks to move as fast as possible, is asking for concept
plans by February 1, 2024, and then will move quickly to select
applicants for the full application phase. The timeline of funds going
out the door will ultimately depend on the strength of applications and
projects, but we need to get this done right because it is a national
security imperative to the United States. We understand we are asking
for a lot of information, and the information we are requesting is
essential to our ability to get these applications processed
efficiently.
Question 11. In 2022, OSTP published a Draft National Strategy on
Microelectronics Research. The national laboratories responded to the
draft strategy to address potential gaps, but haven't seen a final
version of the strategy. Do you know the status of the final version of
this plan and whether the strategy is informing execution of the CHIPS
act?
Answer. The OSTP Subcommittee for Microelectronics Leadership
(SML), which released the draft National Strategy on Microelectronics
Research along with a Request for Information (RFI), consists of
representatives from all departments and agencies with responsibilities
under the CHIPS Act.
The SML has made further progress since publication of the draft.
For instance, SML carefully reviewed the extensive RFI feedback and
presented the draft strategy to the Industrial Advisory Committee
(IAC). SML then incorporated feedback from the RFI and the IAC. The
interagency is currently finalizing the document based on these inputs
and on a formal interagency review and clearance process. The active
participation and engagement by representatives from multiple
departments and agencies in strategy development and their continued
collaboration in strategy review and implementation will inform
execution of the individual CHIPS Act provisions, helping ensure the
full leveraging of individual agency efforts.
Question 12. Please tell me how you will prioritize EDA Tech Hub
partnerships to produce faster routes from research to actual
commercialization?
Answer. On October 23, 2023, the Department of Commerce's Economic
Development Administration announced the designation of 31 Tech Hubs in
regions across the country. This economic development initiative is
designed to drive regional innovation and create jobs by strengthening
a region's capacity to manufacture, commercialize, and deploy
technology.
The Tech Hubs program will help develop and grow innovative
industries in diverse regions of the country in industries ranging from
semiconductors to clean energy, critical minerals, biotechnology,
artificial intelligence, and more. Tech Hubs will bring the benefits
and opportunities of scientific and technological innovation to
communities across the country, with nearly one-quarter located in
small or rural areas and more than three-fourths directly supporting
historically underserved communities. Tech Hubs consortia bring
together private industry, state and local governments, institutions of
higher education, labor unions, Tribal communities, nonprofits, and
more to compete for approximately $40-70 million in Phase 2
implementation grants to further develop these fields and make
transformative investments in innovative industries.
The 31 designated Tech Hubs, located across 32 states and Puerto
Rico, will leverage existing talent, resources, and assets to mature
critical and emerging technology sectors, while advancing equitable
growth. Of the Designated Tech Hubs, 14 include states that have
historically received lower levels of Federal research dollars.
In Phase 1, a critical application evaluation criterion was the
potential for a region to achieve global competitiveness in its
selected technology focus area over the next decade. EDA evaluated
innovation assets, market opportunity, and the region's capacity to
commercialize emerging technologies. In Phase 2, EDA will evaluate
proposed projects' ability to deliver on that technology-based
potential to achieve global competitiveness. Additionally, EDA has and
will continue to work across the Department of Commerce and Federal
agencies, such as the U.S. Patent and Trademark Office, to identify
Federal resources to support Tech Hubs' regional and technology
development and commercialization.
______
Response to Written Questions Submitted by Hon. Todd Young to
Hon. Gina M. Raimondo
The CHIPS Program Office has indicated that it will outline funding
opportunities for ``commercial'' R&D facilities later this year. The
statute defines covered entities eligible for 9902 funds to include
nonprofit entities but there is no statutory limitation on 9902 funds
to commercial research facilities. In Indiana, Purdue University is
pursuing an expansion of its research facilities and bringing world-
leading semiconductor research institutions such as IMEC to the area,
and I want to ensure 9902 funds are available to them, consistent with
the statute.
Question 1. Can you confirm that the Department will open an
opportunity for nonprofit and non-commercial research facilities to
apply for 9902 incentive funds, in addition to 9906 funds, consistent
with the statute?
Question 2. When is such an opportunity expected to open?
Answer. As with past funding opportunities, the CHIPS Program
Office is developing its funding opportunity for R&D facilities
consistent with the statute and the program's economic and national
security objectives. We expect to release this funding opportunity in
the months ahead.
Huawei recently unveiled a new smartphone with a chip that some
have said is unlikely to have been possible to be produced without U.S.
technology.
Question 1. Are you concerned about the possibility that Huawei
used U.S. technology to produce a chip for their new smartphone?
Question 2. I've heard you say before that it's the Biden
Administration's policy that no further licenses for chip sales were to
be granted to Huawei, but do older licenses still exist?
Question 3. If so, are you concerned about existing licenses?
Answer. Placing foreign companies on the Entity List allows the
U.S. government to control their access to U.S. technology, including
commercial products. The Entity List is not an embargo--it is a
regulatory tool to assess export transactions involving parties that
have been added to the Entity List for various reasons. The policy for
reviewing license applications for each party is public and determined
by the Departments of Commerce, Defense, State, and Energy based on
national security and foreign policy considerations.
Since 2019, Huawei Technologies Co., Ltd. (Huawei) and many of its
affiliates have been on the Commerce Department's Entity List and are
subject to the Foreign-Produced Direct Product Rule (Foreign Direct
Product, or FDP, Rule), which imposes a license requirement on the
export to Huawei of any foreign-produced items that are the direct
product of certain U.S. technology or software or produced by any plant
or major component of a plant that is located outside the United
States. The licensing policy outlined in Huawei's Entity Listing
provides for case-by-case review of applications for the export of
items that support technologies below the 5G-level, and a presumption
of denial for all other items subject to the EAR. Any license
applications approved for exports to Huawei since 2019 were approved
according to these guidelines based on the national security
assessments, and concurrence, of Commerce as well as our interagency
partners. As Under Secretary Estevez has testified before Congress,
Bureau of Industry and Security (BIS) is engaging in an ongoing
assessment of BIS's export control policies related to the PRC and
calibrating them based on the evolving dynamics of the threat
environment. BIS has made a number of changes in the past year to
respond to national security concerns presented by the PRC, including
the imposition of new controls on advanced semiconductor manufacturing
equipment and related items, controls on software and components for
the production of advanced semiconductors, and others.
Huawei remains on the Entity List and no changes to its licensing
policy have been made at this time. However, we continue to assess, as
noted above, all policies related to exports to the PRC, and Huawei
licensing is included in that review.
With respect to reports regarding the new Huawei phone, the
Department cannot comment on any law enforcement matters, but
allegations of violations of our export licensing rules are
investigated diligently and enforced appropriately. The Department of
Commerce is working to obtain more information on the character and
composition of the purported 7 nanometer chip in the Huawei smartphone.
The restrictions in place since 2019 knocked Huawei down and forced it
to reinvent itself--at a substantial cost to the company and Chinese
government. The Department is continually working to assess and, when
appropriate, update our controls based on the dynamic threat
environment and we will not hesitate to take appropriate action to
protect U.S. national security--as we did with the rules issued on
October 7, 2022, which applied China-wide restrictions on high-end
chips, semiconductor manufacturing equipment, and other items, and
updated and strengthened on October 17, 2023. These controls apply PRC-
wide, and apply to Huawei.
More specifically, the October 7, 2022 advanced computing and
semiconductor equipment rule issued by BIS imposed restrictions on the
PRC's access to certain advanced semiconductor manufacturing equipment,
chips and other items needed to develop AI and prohibited U.S. persons
from supporting chip development and production that power AI systems
at certain semiconductor fabrication facilities located in the PRC or
Macau without a license.
On October 17, 2023, BIS released a package of rules designed to
update export controls on advanced computing semiconductors and
semiconductor manufacturing equipment, as well as items that support
supercomputing applications and end-uses, to arms embargoed countries,
including the PRC, and to place additional Chinese entities on the
Entity List. These rules reinforce the October 7, 2022, controls to
restrict the PRC's ability to both purchase and manufacture certain
high-end chips critical for military advantage.
The Advanced Computing Chips Interim Final Rule retains the
stringent PRC-wide licensing requirements imposed in the October 7,
2022, rule and makes two categories of updates by: 1) adjusting the
parameters that determine whether an advanced computing chip is
restricted; and 2) imposing new measures to address risks of
circumvention of the controls.
The Expansion of Export Controls on Semiconductor Manufacturing
Items Interim Final Rule: 1) imposes controls on additional types of
semiconductor manufacturing equipment; 2) refines and better focuses
the U.S. persons restrictions while codifying previously existing
agency guidance, to ensure U.S. companies cannot provide support to
advanced PRC semiconductor manufacturing while avoiding unintended
impacts; and 3) expands license requirements for semiconductor
manufacturing equipment to apply to additional countries beyond the PRC
and Macau, to 21 other countries for which the U.S. maintains an arms
embargo.
Restrictions on the highest end semiconductors and manufacturing
equipment on a China-wide basis, and restrictions on a host of PRC
supercomputing, AI chip development, tool manufacturers and others have
further restricted not just Huawei's ability to obtain these items, but
firms throughout the PRC semiconductor ecosystem. The Department of
Commerce is working to obtain more information on the character and
composition of the purported 7 nanometer chip in the Huawei smartphone.
Export controls are just one tool in the U.S. government's toolbox
to address the national security threats presented by the People's
Republic of China (PRC). The restrictions on Huawei in place since 2019
have impaired Huawei and forced it to reinvent itself--at a substantial
cost to the PRC government.
On September 26 and 27, the NIST R&D Office held its first summit
to further semiconductor industry standards development.
Question 1. How is the Department of Commerce getting small
businesses involved in standards development and alleviating any
concerns about IP and data sharing?
Question 2. Will CHIPS R&D dollars go to improve data transparency
and trackability?
Answer. The Standards Summit was the first step in the CHIPS R&D
strategy to enable industry leadership in standards development. More
than 330 companies participated in the Summit, including a broad
spectrum of small businesses and startups.
The next step is a standards workshop series focused on standards
priorities identified in the Standards Summit. These hybrid workshops
are open to all and provide opportunities for experts from academia and
industry, including small businesses, to provide direct input into
technical foundations for standards needed by industry. The first two
workshops took place the week of December 11, 2023, and focused on
chiplets interfaces and digital twin for semiconductor manufacturing
and supply chain assurance. More than 500 people registered for these
workshops, including representatives from a broad range of small and
medium enterprises. This continuing workshop series provides an easily
accessible venue for small businesses nationwide to introduce their
ideas and interests and guide CHIPS R&D standards development
processes. Within this workshop series, we expect to cover approaches
to managing IP while enabling appropriate data sharing.
Participants in the CHIPS R&D Standards Summit identified
establishing data-sharing standards--which can foster collaboration,
enhance product consistency, protect equipment, and ensure high-quality
manufacturing outputs--as a top priority area. They further recommended
that CHIPS for America help define standardized data sharing taxonomies
and explore data types that can be shared without compromising company
equities. CHIPS for America will explore the potential for establishing
this as a topic of one of its upcoming technical standards workshops.
One of the key provisions of the CHIPS and Science Act is the
Regional Technology and Innovation Hubs program.
Question 1. Can you assure me that, given limited resources
currently, existing implementation dollars available for Phase Two of
the Tech Hubs application process will be spread equitably across EDA
regions?
Answer. On October 23, 2023, the Department of Commerce's Economic
Development Administration (EDA), announced the designation of 31 Tech
Hubs in regions across the country. This economic development
initiative is designed to drive regional innovation and create jobs by
strengthening a region's capacity to manufacture, commercialize, and
deploy technologies that support economic and national security.
The Tech Hubs program will help develop and grow innovative
industries in all regions of the country in industries ranging from
semiconductors to clean energy, critical minerals, biotechnology,
artificial intelligence, and more. Tech Hubs will bring the benefits
and opportunities of scientific and technological innovation to
communities across the country, with nearly one-quarter located in
small or rural areas and more than three-fourths directly supporting
historically underserved communities. They bring together private
industry, state and local governments, institutions of higher
education, labor unions, Tribal communities, nonprofits, and more to
compete for approximately $40-70 million in implementation grants to
further develop these fields and make transformative investments in
innovative industries. The 31 designated Tech Hubs, located across 32
states and Puerto Rico, will leverage existing talent, resources, and
assets to mature critical and emerging technology sectors, while
advancing equitable growth.
Geographic diversity is an explicit objective of the Tech Hubs
Program. By statute, there are certain geographic requirements for
Phase 1 awards, including the requirements that at least three
designated Tech Hubs in each EDA region, at least one third of
designated Tech Hubs significantly benefit small and rural communities,
along with required geographic distribution of Strategy Development
Grants. Tech Hubs considered and met these requirements and the
explicit geographic diversity intent of the program in its merit review
of Phase 1 applications.
While there are no statutory requirements for the geographic
distribution of Phase 2 Implementation Grants, geographic diversity
will be among our priorities in the execution of Phase 2.
Ensuring U.S. artificial intelligence leadership depends on our
ability to bring advanced packaging onshore and advanced packaging has
been identified as a critical area of need for a healthy semiconductor
ecosystem.
Question 1. What types of applicants best meet our advanced
packaging needs?
Question 2. Since there is virtually no packaging done in the U.S.,
do you feel confident in our ability to onshore these technologies?
Answer. The National Advanced Packaging Manufacturing Program
(NAPMP) will establish programs that ensure the U.S. is a global leader
in advanced packaging, assembly, and testing. The program will provide
strategic support to grow key technology areas such as chiplets and
heterogeneous integration through industry partnerships, advanced pilot
facilities, and workforce training and development, to realize U.S.
based manufacturing.
On November 20, 2023, CHIPS for America released ``The Vision for
the National Advanced Packaging Manufacturing Program,'' which outlined
its intent to ``establish a vibrant, self-sustaining, profitable, high-
volume, onshore packaging industry where advanced node chips
manufactured in the United States are packaged in the United States.''
To achieve this goal, CHIPS for America envisions investing in four
technology areas--materials and substrates; equipment, tools, and
processes; power delivery and thermal management; and photonics and
connectors--as well as two ecosystem areas--chiplets and co-design--as
well as in a physical piloting facility. As explained in the paper,
NAPMP aims to leverage existing areas of U.S. strength, including in
semiconductor design, manufacturing equipment, and R&D expertise.
CHIPS for America will publish evaluation criteria in individual
NAPMP funding opportunities.
______
Response to Written Questions Submitted by Hon. Shelley Moore Capito to
Hon. Gina M. Raimondo
Supply Chain
America can never be replaced as the global economic and innovation
leader which is why I was proud to support the CHIPS and Science Act
because winning the future means making the necessary investments to
address issues like the microchip shortage, prepare the next generation
of workers in science and technology fields, and keep up with our
competitors.
Question 1. While implementing regulations, will you make sure the
full supply chain is supported? More specifically, can you commit to
saying that taxpayer-funded semiconductor plants won't use Chinese
materials or packaging, and can't be shut down by Chinese coercion?
Answer. The national security guardrails will help ensure CHIPS
investments enhance global supply chain resilience in coordination with
allies and partners and will promote U.S. leadership in designing and
building important semiconductor technologies. In the final rule, the
Department is implementing two national security guardrails: 1) an
expansion clawback that limits the expansion of semiconductor
manufacturing in foreign countries of concern; and 2) a technology
clawback that limits joint research or technology licensing efforts
with foreign entities of concern. The guardrails cover investments in
wafer fabrication, front-end semiconductor fabrication and packaging
facilities, but do not apply to toolmaking facilities or facilities
producing materials for semiconductor production. The guardrails
prohibit most expansion of existing facilities in foreign countries of
concern. In recognition that some potential applicants for CHIPS
Incentives may have existing facilities in foreign countries of
concern, and to minimize potential supply chain disruptions, the CHIPS
Act allows for certain transactions involving mature (legacy)
semiconductor manufacturing in a foreign country of concern. The
guardrails set limits on any expansion of legacy or advanced
facilities. The guardrails limit the expansion of legacy facilities to
ten percent. Advanced facilities can expand by no more than five
percent. The final rule ties expanded semiconductor manufacturing to
the addition of cleanroom or other physical space or production lines
that result in expanding the facility's production capacity by the
applicable percentage. These thresholds are intended to capture most
transactions attempting to expand manufacturing capacity, yet still
allow for ordinary course-of-business tool replacements and upgrades.
The final rule strikes a balance between limiting activities that are
inconsistent with the national security goals of the CHIPS Act and the
desire not to unduly disrupt the existing semiconductor ecosystem.
Further the CHIPS Incentives program released a second NOFO on
September 29th focused squarely on the upstream semiconductor
manufacturing supply chain for equipment and materials. This designates
$500 million to support projects with capital expenditures under $300
million, that onshore and produce the critical inputs to U.S.
semiconductor fabs. That program was open for concept plan submissions
from December 1, 2023, through February 1, 2024 and received over 160
small supplier concept plans. Our strategy is to align the projects we
see to global commodity risks in order to close as many gaps as
possible in the domestic supply chain.
West Virginia Tech Hub
The Phase 1 applications I have seen submitted for a West Virginia
Tech Hub are extremely well aligned with the intent of the program. A
West Virginia Tech Hub would facilitate investment in a diverse
geographic locality, to unlock industrial technological development in
new places, as was intended by law. The program requires that at least
one-third of Tech Hub grants and designations must ``significantly
benefit a small and rural community''.
Question 1. Does this mean that every one of three Hub designations
under Phase 2 will be awarded to rural communities?
Question 2. Can the Department specify in the Phase 2 NOFO that
another portion of Phase 2 designations be awarded to a rural state?
Answer. On October 23, 2023, the Department of Commerce's Economic
Development Administration (EDA), announced the designation of 31 Tech
Hubs in regions across the country. This economic development
initiative is designed to drive regional innovation and create jobs by
strengthening a region's capacity to manufacture, commercialize, and
deploy technology.
The Tech Hubs program will help develop and grow innovative
industries in all regions of the country in industries ranging from
semiconductors to clean energy, critical minerals, biotechnology,
artificial intelligence, and more. Tech Hubs will bring the benefits
and opportunities of scientific and technological innovation to
communities across the country, with nearly one-quarter located in
small or rural areas and more than three-fourths directly supporting
historically underserved communities. They bring together private
industry, state and local governments, institutions of higher
education, labor unions, Tribal communities, nonprofits, and more to
compete for approximately $40-70 million in implementation grants to
further develop these fields and make transformative investments in
innovative industries. The 31 designated Tech Hubs, located across 32
states and Puerto Rico, will leverage existing talent, resources, and
assets to mature critical and emerging technology sectors, while
advancing equitable growth.
Geographic diversity is an explicit objective of the Tech Hubs
Program. By statute, there are certain geographic requirements that EDA
adhered to in their Phase 1 awards, including requirements that at
least three designated Tech Hubs are in each EDA region, at least one
third of designated Tech Hubs significantly benefit small and rural
communities, along with required geographic distribution of Strategy
Development Grants. Tech Hubs considered these requirements and the
explicit geographic diversity intent of the program in its merit review
of Phase 1 applications. In fact, EDA also awarded six Strategy
Development Grants (SDG) to Appalachian entities, including two from
West Virginia, to help communities significantly increase local
coordination and planning activities. Such development could make
selected grantees more competitive for future Tech Hubs funding
opportunities.
While there are no statutory requirements for the geographic
distribution of Phase 2 Implementation Grants, fostering inclusive
technology-based economic development across diverse U.S. geographies
diversity is among EDA's priorities in its implementation of Phase 2.
BEAD
I believe my state has been doing a great job so far working on its
initial proposal for the BEAD program, but one sticking point has been
related to the financial requirements for providers such as a line of
credit. I share the concern of having untested providers be part of
BEAD since I saw how much the BTOP money was wasted back in 2010, but I
have heard that these financial constraints are difficult even for
larger proven providers to meet.
I know that at least one other state is requesting some
flexibilities as it relates to the financial requirements.
Question 1. Are you and NTIA open to considering some financial
requirement flexibilities for providers such as performance bonds or
less capital-intensive means?
Answer. As the National Telecommunications and Information
Administration (NTIA) administers the BEAD Program, we are committed to
being good stewards of taxpayer dollars. That means making sure BEAD
Program subgrantees can see their deployment projects through--not just
to the end of construction, but on an ongoing basis as service
providers deliver affordable, reliable high-speed Internet service. To
that end, the NOFO required prospective subgrantees to provide an
irrevocable standby letter of credit to the Eligible Entity (i.e., the
50 states, five territories, and the District of Columbia) before
entering into a subgrantee agreement. The amount of the letter of
credit must be no less than 25 percent of the subaward amount.\25\ The
NOFO also invited Eligible Entities to propose alternatives ``if they
are necessary and sufficient to ensure that the Program's objectives
are met.'' \26\
---------------------------------------------------------------------------
\25\ BEAD NOFO at 72, 73.
\26\ Id. at 71.
---------------------------------------------------------------------------
On November 1, 2023, NTIA published a conditional programmatic
waiver that modifies the letter of credit requirement for subgrantees
of all Eligible Entities in the following ways:
Allow Credit Unions to Issue letters of credit. The NOFO
requires subgrantees to obtain a letter of credit from a U.S.
bank with a safety rating issued by Weiss of B- or better. The
waiver permits subgrantees to fulfill the letter of credit
Requirement (or any alternative permitted under the waiver)
utilizing any United States credit union that is insured by the
National Credit Union Administration and that has a credit
union safety rating issued by Weiss of B- or better.
Allow Use of Performance Bonds. The waiver permits a
subgrantee to provide a performance bond equal to 100 percent
of the BEAD subaward amount in lieu of a letter of credit,
provided that the bond is issued by a company holding a
certificate of authority as an acceptable surety on Federal
bonds as identified in the Department of Treasury Circular 570.
Allow Eligible Entities to Reduce the Obligation Upon
Completion of Milestones. The waiver allows an Eligible Entity
to reduce the amount of the letter of credit obligation below
25 percent over time, or reduce the amount of the performance
bond below 100 percent over time, upon a subgrantee meeting
deployment milestones specified by the Eligible Entity.
Allow for an Alternative Initial letter of credit or
Performance Bond Percentage. The NOFO requires that the initial
amount of the letter of credit be 25 percent of the subaward
(or the initial amount of the performance bond be 100 percent
of the subaward under the option described above). The waiver
allows the initial amount of the letter of credit or
performance bond to be 10 percent of the subaward amount during
the entire period of performance when an Eligible Entity issues
funding on a reimbursable basis consistent with Section
IV.C.1.b of the NOFO and reimbursement is for periods of no
more than six months each.
By providing an expanded universe of potential issuers of letters
of credit and specific, permissible alternatives to the letter of
credit requirement, NTIA remains faithful to our objectives of
encouraging robust participation from a broad range of service
providers while giving states and territories more ways to ensure that
grant recipients can build a high-quality network and operate it for
years to come.
BEAD High-Cost Threshold
One concern I have with the BEAD program's NOFO deals with the
difficulty to get fiber-optic cable to every place in my state. I know
that is the best and most reliable broadband connection, but it is not
always practical and I wonder about the standards that will be decided
between states and NTIA to determine the ``extremely high-cost
threshold'' for when other technologies can be used.
Question 1. How do you view this threshold and do you expect to
accommodate extremely different thresholds among neighboring and
similar states?
Answer. There is no ``one-size-fits-all'' approach to broadband
deployment given each Eligible Entity's unique challenges, and NTIA
will ensure that the Eligible Entities have flexibility in identifying
the technical solutions that meet the needs of their communities. In
many cases, the best solution will be building out high-speed Internet
using fiber networks.
The NOFO recognizes the unique characteristics of fiber to ``ensure
that the network built by the project can easily scale speeds over time
to . . . meet the evolving connectivity needs of households and
businesses'' and ``support the deployment of 5G, successor wireless
technologies, and other advanced services.'' \27\
---------------------------------------------------------------------------
\27\ IIJA at Sec. 60102(a)(2)(I).
---------------------------------------------------------------------------
The NOFO creates room for all strategies and we expect Eligible
Entities will use a mix of technologies to connect their unserved and
underserved locations. The NOFO allows applicants to propose to provide
service over any form of reliable broadband service, including
terrestrial fixed wireless over licensed spectrum in certain
circumstances. Further, Eligible Entities each have the authority to
decline to select a Priority Broadband Project proposal ``that requires
a BEAD subsidy that exceeds the Extremely High Cost Per Location
Threshold for any location to be served in the proposal if use of an
alternative Reliable Broadband Service technology meeting the BEAD
Program's technical requirements would be less expensive.'' \28\ It
also permits funding of satellite and unlicensed wireless service for
those locations if there is no other proposal from a provider of
Reliable Broadband Service.
---------------------------------------------------------------------------
\28\ BEAD NOFO at 38.
---------------------------------------------------------------------------
With respect to the Extremely High Cost Per Location Threshold, the
NOFO states, and NTIA will require, that each Eligible Entity must
establish its Extremely High Cost Per Location Threshold in a manner
that maximizes use of the best available technology while ensuring that
the program can meet the prioritization and scoring requirements set
forth in Section IV.B.6 of the NOFO. We look forward to working with
each Eligible Entity to help develop an appropriate Extremely High Cost
Per Location Threshold.
BEAD Initial Proposals
BEAD Initial Proposals are due by the end of this year. Just like
with mapping some states have done better than others. I know my state
Office of Broadband has done a fantastic job so far, but I wonder what
will happen if some states submit incomplete proposals.
Question 1. Are you concerned about some states leaving certain
requirements in the initial proposal blank or requesting flexibilities
with some of the requirements that could slow the process down?
Answer. NTIA will not approve an Eligible Entities' plan if it does
not meet all requirements of the NOFO and the underlying statute. To
ensure the success of the program, NTIA conducted thorough and
individualized technical assistance to all Eligible Entities ahead of
the December 27, 2023 deadline for Initial Proposal submission. NTIA
technical assistance staff have worked intensively with every state and
territory government to ensure its plan is both strong and complaint.
______
Response to Written Questions Submitted by Hon. Cynthia Lummis to
Hon. Gina M. Raimondo
Question 1. In July 2023, the Department of Commerce and Department
of Defense signed a Memorandum of Agreement to strengthen U.S. defense
industrial base. In addition to this, what is the Department of
Commerce doing to coordinate with activities at the Department of
Energy and throughout the Federal government to ensure a robust
domestic supply of semiconductor minerals and materials, such as
copper, germanium, tellurium, gallium, nickel, cobalt, and others?
Answer. Recognizing the national security imperative of investments
in the domestic semiconductor industry, the Departments of Commerce and
Defense in July 2023 announced a Memorandum of Agreement (MOA) to
expand collaboration to strengthen the U.S. semiconductor defense
industrial base. The agreement will increase information-sharing
between the Departments to facilitate close coordination on the CHIPS
for America's incentives programs, including collaboration on potential
investment applications to ensure that our departments are making
complementary decisions that maximize Federal investments under the
CHIPS Incentive Program and the Department of Defense's (DoD) Defense
Production Act and Industrial Base Analysis and Sustainment funds. This
alignment of priorities and decision-making will help ensure that our
respective investments position the U.S. to produce semiconductor chips
essential to national security and defense programs.
The Department is in regular communication with Department of
Energy officials about how best to promote more resilient supply
chains, especially regarding how the various funding programs can be
complementary and not duplicative.
Question 2. In June 2023, the Department of Commerce announced
funding opportunities for commercial facilities in the United States
for materials used to manufacture semiconductors and semiconductor
manufacturing equipment, provided that the capital investment equals or
exceeds $300 million to reduce chokepoint risks flowing from the
geographic concentration of critical semiconductor inputs, among other
objectives.
a. Would domestic mine projects that produce, smelt, and refine
minerals and materials for semiconductors be eligible for this funding
opportunity?
Answer. Supply chain resilience for raw minerals in the
semiconductor supply chain is a long-term challenge that will require
partnership with other agencies as well as industry. CHIPS for America
is also implementing partnerships for supply chain transparency, risk
sharing, and resiliency initiatives with the companies, clusters, and
industry groups across the semi supply chain. Projects such as the ones
mentioned above may be eligible.
In February 2023, CHIPS for America launched our first Notice of
Funding Opportunity (NOFO) for CHIPS funds under the section 9902
Incentives Program, focused on commercial manufacturing facilities. In
June 2023, the Department opened our existing funding opportunity and
application process for large semiconductor supply projects that
include material and equipment facility projects with capital
investments equal to or exceeding $300 million.
Question 3. What actions is the Department of Commerce undertaking
to ensure the production of domestic minerals and materials essential
for semiconductor manufacturing? The U.S. currently depends on foreign
sources for most of our supply of these minerals, including those from
non-allied nations, including copper, germanium, tellurium, gallium,
nickel, and cobalt.
Answer. The Department is in regular communication with Department
of Energy officials about how best to promote more resilient supply
chains, especially regarding how the various funding programs can be
complementary and not duplicative.
The raw mineral sourcing challenges will have to be addressed in
concert across agencies as well as with allied countries. U.S. supplies
of critical minerals and refining capacity should be strengthened to
meet the demands of the semiconductor, battery, and broader electronics
industries going forward. Currently CHIPS for America is working with
other agencies to voice the demand signal for mineral and chemical
capacity as well as enlisting private enterprises further downstream to
illustrate and map the entire value chain.
To advance the strategic priorities of CHIPS for America, in June
2023, the Department added bigger supply chain projects to the initial
Notice of Funding Opportunity (NOFO) issued in February of that year.
This will help position large chipmaking facilities to access the
materials, supplies, and equipment they need to make the United States
home to manufacturing clusters.
Recognizing the national security imperative of investments in the
domestic semiconductor industry, the Departments of Commerce and
Defense in July 2023 announced a Memorandum of Agreement (MOA) to
expand collaboration to strengthen the U.S. semiconductor defense
industrial base. The agreement will increase information-sharing
between the Departments to facilitate close coordination on the CHIPS
for America's incentives programs, including collaboration on potential
investment applications to ensure that our departments are making
complementary decisions that maximize Federal investments under the
CHIPS Incentive Program and the Department of Defense's (DoD) Defense
Production Act and Industrial Base Analysis and Sustainment funds. This
alignment of priorities and decision-making will help ensure that our
respective investments position the United States to produce
semiconductor chips essential to national security and defense
programs.
To outcompete the People's Republic of China (PRC), we need bold
domestic investments and innovation ecosystems that bring manufacturing
in critical technologies and industries back to the United States.
Without manufacturing strength in the United States and the innovation
that flows from it, we risk falling behind China in the race to invent
and commercialize future generations of technology. Diverse, resilient,
and sustainable supply chains are critical for national security and
economic competitiveness, and a key element of this effort is
revitalizing domestic manufacturing, reducing our reliance on the PRC,
and positioning ourselves to be proactive instead of reactive.
The Inflation Reduction Act (IRA) is a major achievement for clean
energy, energy security, and climate ambition, representing the largest
investment in climate and clean energy solutions in U.S. history. This
law makes a historic investment in climate and clean energy solutions,
delivered through a combination of innovative tax incentives, grant
programs, and loan guarantees. The clean energy investment and
production provisions in the IRA will incentivize investments across
the clean energy supply chain including solar, wind, geothermal,
hydrogen, critical minerals and battery technologies, tidal and wave
energy, carbon capture and sequestration, and civil nuclear, among many
others. In particular, the IRA's section 45X Advanced Manufacturing
Production credit incentivizes domestic production of battery
components and critical minerals.
The Economic Development Administration's Regional Technology and
Innovation Hubs (Tech Hubs) program is working to create regional
innovation centers across the country by bringing together industry,
higher education institutions, state and local governments, economic
development organizations, and labor and workforce partners to
supercharge ecosystems of innovation for technologies that are
essential to our national security and economic competitiveness. The
Tech Hubs program is a key part of President Biden's Investing in
America agenda, stimulating private sector investment, creating good-
paying jobs, revitalizing American manufacturing, and ensuring no
community is left behind by America's economic progress.
Through the Tech Hubs program, the Department is committed to
strengthening economic and national security by advancing the
capacities of regions to manufacture, commercialize, and deploy these
technologies, guided by the following priorities: 1) making more U.S.
regions strong competitors in the global innovation economy; 2)
building strong communities that share in the prosperity technological
innovations bring; 3) spurring the creation of new good jobs and other
opportunities for workers at all skill levels; and 4) strengthening and
increasing the resilience of the supply chains that our innovative
technology-centric industries rely on to stay secure and competitive.
On October 23, 2023, EDA announced the winners of Phase 1 and
posted the Notice of Funding Opportunity for Phase 2. This announcement
included 31 designated Tech Hubs, as well as the applications that will
receive strategy development grants. The 31 Tech Hubs focus on
developing and growing innovative industries in regions across the
country, including semiconductors, clean energy, critical minerals,
biotechnology, precision medicine, artificial intelligence, quantum
computing, and more.
Analyzing critical supply chains to identify potential
vulnerabilities before they become crises--going from reactive to
proactive--should be prioritized. After receiving an initial $10.8
million appropriation in FY 2023, the Commerce Department's Industry
and Analysis (I&A) unit in the International Trade Administration
launched the U.S. Government's first Supply Chain Center to serve as
the analytic engine for supply chain resilience policy action within
the U.S. Government. The FY 2024 Budget Request seeks $21 million to
scale these efforts within I&A and further institutionalize this
important work within Commerce. The Supply Chain Center builds on I&A's
mission to enhance the competitiveness of U.S. companies and protect
U.S. national security by being: (1) proactive in getting ahead of
supply chain challenges with analytic frameworks, deep dives, policy
playbooks, and persistent scanning for vulnerabilities; (2) strategic
in setting priorities for policy focus and action based on data-driven
risk analysis; (3) a force multiplier in improving the targeting and
effectiveness of U.S. Government investments; and (4) a partner to
industry in building resilient supply chains and ensuring U.S.
businesses lead the industries of the future.
ITA is also seeking to expand SelectUSA services to coordinate
supply chain priorities with state Foreign Direct Investment (FDI)
attraction efforts and recruit high-value investment targets in
alignment with supply chain strategies. The FY 2024 Budget seeks $4.75
million for ITA to expand its investment promotion tool kit to target
high-value investments in coordination with U.S. states, which would
dramatically improve SelectUSA's ability to attract investment into the
United States. In addition, ITA will conduct the analysis required to
use the specialized expertise and firm-level data needed to develop
better strategies for attracting specific individual firms to the
United States. Lastly, the requested funds will bolster the Advocacy
Center, which works with U.S. businesses to win foreign government
public tenders, reflecting the importance of global market access to
maintaining the viability of key domestic suppliers.
This request is the Global Markets component of an ITA joint
proposal with the Industry and Analysis business unit. Global Markets
will leverage the analysis, strategies, and recommendations produced by
Industry and Analysis under its complementary request to better target
FDI toward reducing critical, national supply chain risks.
The National Institute of Standards and Technology (NIST)
Manufacturing Extension Partnership (MEP) helps businesses narrow gaps
in our supply chains and make manufacturing more resilient. NIST's
Manufacturing USA program intends to make available competitive awards
to enable existing Manufacturing USA institutes to transition
technologies developed at the institutes into domestic production.
Altogether, these investments in critical technologies and regions
are essential to maintaining American technological leadership in the
world and outcompeting the PRC in a 21st century global economy.
Attachment 1:
NTIA Organizational Chart:
S&E FY 2023 Q3:
------------------------------------------------------------------------
Funded Filled Vacant
FTE Positions Positions Positions
------------------------------------------------------------------------
Comparison by
activity/
subactivity
Domestic and 40 49 42 7
International
Policies
Spectrum Management 29 31 26 5
Advanced 31 43 34 9
Communications
Research
Broadband Programs 38 54 48 6
Public Safety 7 7 6 1
Communications
------------------------------------------------------------------------
Total 145 184 156 28
------------------------------------------------------------------------
Innovation Fund FY 2023 Q3:
------------------------------------------------------------------------
Funded Filled Vacant
FTE Positions Positions Positions
------------------------------------------------------------------------
Comparison by
activity/
subactivity
Public Wireless 7 10 7 3
Supply Chain
Innovation Fund
Admin
------------------------------------------------------------------------
Total 7 10 7 3
------------------------------------------------------------------------
IIJA FY 2023 Q3:
------------------------------------------------------------------------
Funded Filled Vacant
FTE Positions Positions Positions
------------------------------------------------------------------------
Comparison by
activity/
subactivity
Broadband Equity, 106 115 101 14
Access and
Deployment
Tribal Broadband 21 22 18 4
Connectivity
Digital Equity 13 13 10 3
Middle Mile 15 16 13 3
Deployment
7
------------------------------------------------------------------------
Total 155 166 142 24
------------------------------------------------------------------------
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Dr. Sethuraman Panchanathan
CHIPS Underfunded
The CHIPS and Science Act authorized nearly $250 billion in
investments for manufacturing, research, and development which is
critical for the U.S. to continue to be the world leader in innovation
and competition. But we've seen in just the last year that these
authorization levels haven't been matched by appropriations.
A report from the Federation of American Scientists shows that the
Fiscal Year 2023 omnibus appropriations bill fell short of CHIPS levels
by $3 billion, and the Fiscal Year 2024 appropriations are expected to
fall short by nearly $7.5 billion. The authorization levels in this Act
are critical to ensuring our future success. That's why I led a letter
to the Appropriators asking them to fully fund CHIPS and Science
programs.
Question 1. What will the consequences be for U.S. leadership in
science, technology, and innovation if appropriations don't match the
levels authorized in CHIPS and Science?
Answer. We currently face intense global competition in the race to
develop key technology areas such as Artificial Intelligence, Quantum
Information Science, and Biotechnology which are rooted in sustained
investment over many decades, and to develop the workforce needed to
secure the future of innovation. Our success in unlocking the promise
of these and other technological developments and scientific
breakthroughs will affect our continued global leadership and our
economic and national security.
With the passage of the CHIPS and Science Act of 2022, Congress put
in place a roadmap for meeting this challenge while also spurring
innovation in communities throughout the country. The President's
Fiscal Year 2024 Budget Request is an investment in NSF's and the
entire Federal STEM enterprise's ability to generate more
breakthroughs, foster more innovations that strengthen our economy and
national security, and support the individuals who keep the United
States a global leader in science, engineering, and technology.
Appropriations below this level will run the risk of ceding U.S.
leadership in key technologies to our competitors and leaving U.S.-
based talent behind.
NSF Regional Innovation Engines
Question 1. In looking at the Regional Innovation Engine
applications, what sort of investments in the innovation workforce are
you seeing states and companies prioritizing?
Answer. The NSF Engines program is part and parcel in alignment
with NSF's emphasis on harnessing the geography and demography of
innovation that exists across the country. There is talent everywhere--
and it is incumbent upon us to create opportunities for that diverse
talent, regardless of background or location.
When we launched the program last year, the response from the
community exceeded even our own expectations: TIP received nearly 700
concept outlines for NSF Engines spanning more than 500 organizations
(including 40 percent that had not previously received funding from
NSF) from every state and territory.
The NSF Engines program allows the proposers to prioritize key
technology focus areas and societal, geostrategic, and national
challenges of interest to their local economies. NSF Engines finalists
have proposed everything from breakthrough agricultural technologies
for food system adaptation to quantum technology development to
additive manufacturing.
Each NSF Engine must bring together partners across diverse
sectors--institutions of higher education, state, local, and tribal
governments, nonprofits, and vocational/workforce development groups.
As an example, recent NSF Engines Development Awardee winners include
up to 80 partners on each award. (To see the myriad partners involved
with each NSF Engines Development Award or each NSF Engines Finalist,
visit the map. You can also download these data.)
Across this portfolio of funded projects and finalists, we are
seeing extensive focus on workforce development--spanning all levels
from K-12 to adult and continuing education, and training for all job
types including technicians, practitioners, researchers, entrepreneurs,
and educators. Indeed, the NSF Engines program has catalyzed novel
partnerships between academia, industry, government, and civil society
in an incredibly powerful way. As an example of the potential exhibited
by the NSF Engines program, at least one private foundation/
philanthropy has reached out about partnering with NSF to provide an
infusion of funding to several NSF Engines Development Awards focused
on K-12 education innovation.
Ultimately, to remain globally competitive, the U.S. requires a
robust workforce, one that is intentionally trained, recognized and
valued for their contribution to the research enterprise. These will be
fundamental drivers of national transformation that promotes equity
among institutions and organizations seeking external funding and
serves to facilitate diversity of thought, experience, and
perspectives.
Question 2. Engaging with community colleges and Minority Serving
Intuitions are vital to developing a more diverse workforce. Of the 16
finalists announced for the NSF Engines Type-2 awards, what is the
makeup of community colleges and MSIs? When does NSF expect to announce
the final awards?
Answer. At least 12 of the 16 NSF Engines finalists include at
least one community college and/or MSI, and in many cases, an NSF
Engine finalist comprises multiple diverse institutions as part of its
composition. NSF anticipates announcing the NSF Engines awards this
winter.
Increasing and Accelerating Industry Partnerships
Under your leadership, NSF has been increasing its jointly funded
research partnerships with industry, such as the Future of
Semiconductors (FuSe) program and the Resilient & Intelligent NextG
Systems (RINGS) program.
Through the FuSe program, The University of Washington in Seattle
is partnering with other universities, including Howard University, to
develop new materials for energy efficient and enhanced-performance
semiconductor-based systems.
Question 1. Can you describe how you plan to continue increasing
these partnerships, such as by scaling and expanding successful
industry-led programs, as well as bringing in new industry sponsors to
increase the total potential award funding?
Answer. NSF cultivates partnerships to accelerate transformative
research, solve societal problems, fuel economic progress and build a
future-ready workforce. The Foundation stimulates partnerships
indirectly through programs that require or encourage grantees to work
in collaboration with non-academic entities. NSF also engages in direct
external partnerships with other U.S. Federal agencies, with industry,
private foundations, non-governmental organizations (NGOs), and with
international organizations. FuSe and RINGS are examples of NSF's
direct partnerships. We recognize that direct partnerships with
industry can provide resources that accelerate basic research, speed
the transition of basic research to the market, and support workforce
development. At the same time, NSF is cognizant of certain risks, such
as intellectual property considerations and perceptions of competitive
advantage. NSF has developed guiding principles to understand risks,
costs, and benefits of potential partnerships, as well as
implementation factors to consider. Using our strategic and careful
approach to partnerships, and with the establishment of the Directorate
for Technology, Innovation, and Partnerships (TIP), we anticipate that
NSF's direct partnerships with industry will continue to grow.
______
Response to Written Questions Submitted by Hon. Tammy Baldwin to
Dr. Sethuraman Panchanathan
The CHIPS and Science Act calls on the National Science Foundation
to broaden participation of underrepresented groups in science,
technology, engineering, and mathematics (STEM) to enable the
scientific potential of all Americans. Studies suggest that LGBTQ
people are underrepresented in the STEM workforce. CHIPS & Science
created a new Chief Diversity and Inclusion Officer role that can help
address this problem.
Earlier this year, Senator Feinstein and I led our colleagues in
calling on the National Science Foundation to better assess
representation in STEM by adding voluntary sexual orientation and
gender identity questions to its national workforce surveys.
Question 1. Can you please provide an update on these efforts and
when we should expect a final decision and the inclusion of this data
in the National Science Foundation's biennial reports to Congress?
Answer. NSF and the National Center for Science and Engineering
Statistics (NCSES) are committed to producing data that reflects the
population engaged in STEM activities in the United States--including
the LGBTQI+ population, while protecting privacy. This is why NCSES has
undertaken a robust research effort to identify the best ways to
collect information on sexual orientation and gender identity (SOGI).
As you know, in order to ensure that resulting data accurately reflect
the population, it is essential that we continue to assess the
complexity, sensitivity, and performance of these questions within the
unique context of NCSES's education and workforce surveys (which differ
from the settings in which similar questions may be asked on other
surveys), while maintaining the privacy of respondents.
We have already added a question on gender identity to the 2023
National Survey of College Graduates (NSCG); we expect these data to be
released in approximately late 2024.
NCSES is also conducting testing of questions related to sexual
orientation and gender identity as part of the 2023 NSCG, as well as
the 2023 Survey of Doctorate Recipients, and the 2024 Survey of Earned
Doctorates. NCSES is also in the process of seeking OMB clearance to
conduct similar testing on the 2024 National Training, Education, and
Workforce Survey, which will provide data on the skilled technical
workforce.
NCSES is committed to releasing the results of this research in a
timely and transparent manner and communicating to stakeholders how
these results inform future data collection decisions. These efforts
are coordinated by the Office of Management and Budget's Office of the
Chief Statistician of the United States, to ensure the maximum utility
of the research questions under examination across the Federal
statistical system and prevent duplication of effort.
We are extremely excited about the planned release of gender
identity data in late 2024 and the current testing occurring on our
other workforce surveys that will inform future data releases. NSF and
NCSES are committed to providing Congress with policy-relevant
information based on the best available data in its biennial reports.
As part of the process of producing the Diversity and STEM and Science
and Engineering Indicators reports, we assess the availability of data
that may shed light on salient policy issues and whether such data are
appropriate for inclusion given available resources and constraints
such as scope, length, timeliness, and representativeness. We expect to
undertake similar assessments of SOGI data--if available--for future
cycles of these publications.
______
Response to Written Questions Submitted by Hon. Tammy Duckworth to
Dr. Sethuraman Panchanathan
CMB-S4
As you know, the cosmic microwave background (CMB) carries
information about the very early universe. Astronomers use the patterns
in CMB light to determine the total contents of the universe,
understand the origins of galaxies and look for signs of the very first
moments after the Big Bang. The ``Stage-4'' of this ground-based CMB
experiment, CMB-S4, consists of dedicated telescopes equipped with
highly sensitive superconducting cameras and DOE and NSF have partnered
with the University of Chicago, Argonne National Lab and Fermilab to be
a part of this critical research.
Using advanced telescopes to be located at the South Pole and in
the Chilean Atacama plateau, CMB-S4 will provide the leap in technology
and size needed to answer these important questions, not just
incrementally move towards it. The technology advancements include
pushing the frontier of cryogenic superconducting electronics and
sensing elements, such as those at the core of quantum technology. The
project provides a real-world opportunity to field advanced renewable
energy research at the South Pole and provides opportunities for STEM
engagement with broad outreach for student engagement in primary
education as well as post-secondary education.
Over the last decade the CMB-S4 has repeatedly received high
profile support from the broad Physics and Astronomical communities,
including a strong recommendation from the 2020 Decadal Survey of
Astronomy and Astrophysics. This recommendation follows enthusiastic
endorsements from the Astronomy and Astrophysics Advisory Committee, as
well as from the 2015 NAS/NRC report on NSF Investments in Antarctic
and Southern Ocean Research and the 2014 Particle Physics Projects
Prioritization Panel (P5), which recommended pursuing CMB-S4 under all
budget scenarios.
Question 1. Given the importance of CMB-S4 to science, technology
and our Nation's global leadership, when will the National Science
Foundation (NSF) advance CMB-S4 as a candidate major facility project
into the Major Facility Design Stage and what are NSF's plans to
maintain the U.S. leadership in scientific research at the South Pole?
Answer. NSF's established processes for advancing a project into
the Major Facility Design Stage are documented in the Research
Infrastructure Guide. NSF is currently considering the cost, schedule,
and availability of sites for the CMB-S4 project. The timing for
advancement of CMB-S4 into the Major Facility Design Stage is not yet
determined. If constructed, CMB-S4 is envisioned as a partnership
between NSF and the Department of Energy; the two agencies meet
frequently through a Joint Oversight Group to coordinate planning
activities.
NSF is currently developing a South Pole Station Master Plan to
enable the long-term support of forefront science such as CMB-S4 at the
South Pole.
Critical Materials
Question 1. Please identify the most troubling risks NSF has
identified in the critical mineral supply chain.
Answer. Critical minerals are typically sourced directly from
primary resources (extracted from the Earth's crust) through well-
established conventional mining operations. The timelines to
reestablish domestic supply chains, especially mining operations, are
long; establishing new mines can take decades due, in part, to
environmental issues, regulatory requirements, and local community
concerns. While significant reserves of critical minerals exist on the
seafloor at sites around the globe, seafloor extraction processes may
cause major impacts on biological ecosystems, both locally at the
extraction site and farther afield. Such impacts remain poorly
characterized. Current minerals and materials sourcing also can involve
significant geopolitical risks given the weak governmental and
regulatory structures in many countries.
The challenge extends beyond extraction to processing, and in this
respect there is a need for new, scientifically-driven approaches to
the sustainable processing and recycling of critical minerals. There
are also workforce needs. We lack a sufficient roster of scientifically
and technically trained personnel at all levels in the critical
minerals ecosystem: across exploration, extraction, processing, and
manufacturing. Also, university scientists and engineers working in
this sector have limited options to obtain funding for fundamental and
translational research; Federal support for innovation in the critical
minerals ecosystem is not matched with national needs.
Question 2. Please describe what steps the United States must take
to better partner with allied countries to secure critical minerals,
while lessening our Nation's dependence on sourcing critical minerals
mined by firms our countries with strong ties to competitor and
adversarial regimes, such as the PRC and the Russian Federation, since
such sourcing often results in adverse humanitarian and national
security costs.
Answer. To reduce dependence on adversarial foreign critical
mineral supplies, the United States must survey and characterize
domestic resources/reserves for the most domestically essential
minerals/metals; developmental timelines that are mapped to national
needs must be established for the exploitation of these reserves. The
United States must stimulate fundamental research in alternate
materials, material reuse and recycling, and improved extraction
processes, leveraging international expertise as appropriate. The
United States must leverage existing capabilities and build
partnerships with friendly nations having significant resources and
capabilities complementary to and/or more advanced than that which we
have domestically. The United States must develop a robust, competent
workforce across the critical minerals ecosystem, for example by
building out research and student exchange partnerships with allied
nations. The future security of international critical minerals supply
chains must be reinforced by preventing them from becoming compromised
by severe adverse environmental and human health impacts.
Quantum Technology
Question 1. How does quantum technology factor into the future of
microelectronics beyond silicon CMOS, as envisioned in the CHIPS +
Science Act, and in what ways will CHIPS support these and other next
generation microelectronics and semiconductor technologies?
Answer. NSF has several programs that are deeply involved in
researching ways for new quantum discoveries and materials to impact
the future of micro-electronics beyond silicon including developing
whole new classes of semiconductors and their uses. This is exemplified
by the NSF initiative of Future of Semiconductors (FuSe) and two
Material Innovation Platforms: the Platform for the Accelerated
Realization, Analysis, and Discovery of Interface Materials (PARADIM)
and the 2D Crystal Consortium (2DCC).
For decades, NSF investments have been informed by a combination of
top-down priorities (from Administrations and Congress), bottom-up
inputs (from the research community that NSF serves, including through
NSF-funded conferences/workshops), and data-driven analytics that serve
to identify emerging areas as well as gaps in NSF's proposal and award
portfolios. As outlined in the FY 2024 President's Budget Request for
NSF, building upon more than three decades of exploratory discovery,
NSF investment in quantum information science (QIS) will help propel
the Nation forward as a leading developer of quantum technology. This
investment is a key component of the National Quantum Initiative and
addresses Administration and Congressional interest in advancing key
technology focus areas.
Importantly, NSF's QIS investments build upon the agency's
longstanding and continuing foundational investments in QIS as well as
more recent, interdisciplinary investments in centers and small teams
and targeted workforce development efforts. Moreover, increasingly, a
systematic approach to maturing foundational quantum discoveries into
use-inspired technological innovation is critical to transform the
field of QIS and rapidly accelerate broader impacts to society.
Pursuant to the CHIPS and Science Act of 2022, NSF established the
Directorate for Technology, Innovation and Partnerships (TIP) to
specifically accelerate the development of key technology focus areas,
including semiconductors/microelectronics and QIS, as well as their
impact on the Nation's long-term economic competitiveness. In alignment
with this vision, TIP is closely collaborating with other NSF
directorates to accelerate technology development and translation
across the full complement of 10 key technology focus areas identified
in Sec. 10387 of the legislation. A key focus is on maturing technology
by integrating end-users and potential customers from a full complement
of science and engineering fields and economic sectors into cycles of
research, development, and demonstration, resulting in co-design and
co-creation of novel solutions that can be accelerated to the market
and society.
As an example, in response to the National Quantum Initiative and
in coordination with the National Quantum Coordination Office (NQCO),
TIP is collaborating with the NSF Directorate for Mathematical and
Physical Sciences (MPS), which leads the agency's QIS investments, as
well as with the Directorates for Biological Sciences, Computer and
Information Science and Engineering (CISE), STEM Education (EDU), and
Engineering (ENG) on the development of a new initiative called the
National Quantum Virtual Laboratory (NQVL). The NQVL will support a
highly accessible shared research infrastructure framework that draws
on the full spectrum of expertise throughout the Nation to rapidly
translate QISE ideas formulated in the laboratory through prototyping,
validation, at-scale testing, and eventual full-scale deployment.
Beyond fostering use-inspired and translational QIS research, the NQVL
will democratize access to the varied resources and environments
necessary to conduct such cutting-edge research, lower barriers to
entry throughout the QIS research enterprise and promote broadened
participation of talent anywhere and everywhere.
Additionally, TIP is collaborating with CISE, EDU, ENG, and MPS on
a new Future of Semiconductors (FuSe) program, which invested $45.6
million--including funding from the CHIPS and Science Act--in 24
research and education projects to enable rapid progress in new
semiconductor technologies and manufacturing as well as workforce
development. The FuSe program, a public-private partnership between NSF
and Ericsson, IBM, Intel, and Samsung, takes a unique and intentional
holistic, ``co-design'' approach that advances materials, devices, and
systems integration, while simultaneously considering the performance,
manufacturability, recyclability and environmental sustainability of
these materials, devices, and systems. The FuSe program is also
accelerating the development of the U.S.-based workforce and knowledge
that enable innovative semiconductor and microelectronics.
We believe there is strong synergy between our work in
semiconductors and QIS.
Emerging Research Institutions
The CHIPS and Science Act takes important steps to support research
at emerging research institutions (ERIs)--higher-education institutions
with less than $50 million in annual Federal research expenditures--
through a number of provisions, including section 10325, which created
a five-year ERI partnership pilot program.
Question 1. Please provide an update on the implementation of
Section 10325 and the concrete timeline for establishing the ERI
partnership pilot program.
Answer. Appropriated funding levels well below the President's
Request left NSF unable to undertake all of the activities outlined in
the Act, including Sec. 10325(c).
While we cannot yet carry out a formal program at this time, NSF
encourages partnerships and funded awards to include ERIs throughout
the country. For example, all recently awarded NSF Artificial
Intelligence Research Institutes include at least one ERI as a funded
partner. In FY 2023, the Major Research Infrastructure program made
instrumentation awards to over 40 primarily undergraduate institutions
(PUIs), which are typically ERIs. Additionally, in FY 2023, the
Established Program to Stimulate Competitive Research (EPSCoR)
statewide awards in its Track 1 Research Infrastructure Improvement
Program included collaborations with a total of 74 PUIs.
Large collaborative center awards also often demonstrate
partnerships between ERIs and more research-active institutions. For
example, three-quarters of the FY 2023 Science and Technology Center
awards included partners who are ERIs. The Gen-4 Engineering Research
Centers call specifies that the lead or at least one of the core
partner universities must be a university that serves populations of
traditionally underrepresented students, which is expected to result in
many new ERCs in FY 2024 including partners who are ERIs.
______
Response to Written Questions Submitted by Hon. Kyrsten Sinema to
Dr. Sethuraman Panchanathan
Giant Magellan Telescope
The Giant Magellan Telescope (GMT) now being built in Chile is a
leading example of what can be accomplished by a consortium of U.S.
academic institutions and international partners. I am proud that both
the University of Arizona and Arizona State University are involved in
this historic effort. This is another example of the unique work that
the University of Arizona has done in astronomy and the unmatched
quality of the mirrors it produces in Tucson. There is tremendous
support in the Senate to advance GMT to obtain the generational
scientific benefits it promises.
But GMT cannot succeed without continued significant investment.
Such investment will accelerate development activities of the top
priority of the National Academies' Decadal Survey; namely the US-
Extremely Large Telescope Program (US-ELTP) consisting of the GMT, the
Thirty Meter Telescope (TMT) and the NSF's National Optical-Infrared
Astronomy Research Laboratory (NOIRLab). I appreciate the NSF's $6.5
million award for GMT earlier this month under the US-ELTP program.
With the GMT, the NSF will continue leverage the significant
philanthropic, state, and non-US investments already made by existing
GMT partners.
GMT and TMT would together provide American astronomers with
newfound access to observe 100 percent of the sky in the Southern and
Northern hemispheres, respectively. However, as you know these two
telescopes have significant differences in their sites, technical
challenges, and timelines. In fact, GMT is already deeply into its
development phases: GMT has cast and polished mirrors for several
years, with its seventh and final primary mirror fabrication underway.
Ultimately, GMT has not faced the same site issues as TMT.
Question 1. Has the NSF considered decoupling funding or other
forms of continued investment, prioritization, or considerations for
GMT from the TMT given GMT does not face some of the same challenges
that TMT does?
Answer. NSF is currently managing the U.S. Extremely Large
Telescope Program (US-ELTP) as a three-element system to deliver
optimal access to 30m-class telescopes for the U.S. astronomical
community, including the two ELTs: the Thirty Meter Telescope (TMT) in
the northern hemisphere, and the 25-meter Giant Magellan Telescope
(GMT) in the southern hemisphere. The third element of US-ELTP is the
critical community science interface and support, which includes data
management and software tools and services to be provided by NSF's
National Optical-Infrared Astronomy Research Laboratory (NSF's
NOIRLab). Each of these elements is being considered separately in the
Major Facility Design Stage process, with separate reviews of technical
and programmatic readiness.
Question 2. If so, could you please provide clarification on what
NSF is considering as far as separating the potential progress and
continued support for GMT from TMT as it works to realize the goals of
the US-ELTP?
Answer. Although presented under the umbrella of the US-ELTP, NSF
recognized early on that each element faced significantly different
challenges and may need separate risk mitigation strategies and
advancement milestones. As such, NSF admitted GMT and TMT into the
Major Facility Design Stage as separate projects and held separate
Preliminary Design Reviews for them to provide independent external
reviews of their technical readiness. NSF also held separate internal
Facilities Readiness Panel reviews to evaluate the readiness of each
project to advance to the Final Design Phase. Going forward, the two
telescope projects will continue to be evaluated separately, while NSF
continues to optimize the overall US-ELT program to provide the U.S.
astronomical community the access to 30m-class telescopes that will
allow them to continue to lead the world in the exploration and
understanding of our universe.
______
Response to Written Questions Submitted by Hon. Jacky Rosen to
Dr. Sethuraman Panchanathan
Initiatives in STEM Funding
I'm proud to have secured a bipartisan provision based on my Rural
STEM Education Act in the CHIPS and Science Act. This historic
bipartisan law would break down barriers to rural STEM education
through grants from the National Science Foundation. Nevada is home to
nearly 7,500 students who attend rural schools and this law gives them
opportunities in STEM education and careers. Yet, there is still more
work to be done to address the challenges standing in the way of
students of all ages, genders, and backgrounds from pursuing STEM
education and careers.
Question 1. What are the benefits of rural STEM education and how
NSF is working to break down barriers for students in rural and
underserved communities?
Answer. NSF is fully committed to the development of a future-
focused science and engineering workforce that draws on the talents of
all Americans, in every region of the country. Maintaining our position
at the vanguard of discovery and innovation requires that we enable
innovation anywhere and opportunities everywhere--this of course
includes the STEM talent that we know exists in rural communities.
Individuals living in rural areas face roadblocks to high-quality
STEM education and accessible pathways into the STEM workforce.
Overcoming these disparities in STEM achievement is possible by
addressing a variety of long-standing issues. For example, creating and
supporting networks of mentors, increasing opportunities for
experiential learning, improving preparation for K-12 teaching and
provision of more teacher resources, and making college more
affordable.
Everyone deserves a high-quality STEM education, but access to such
an education is not equally distributed across the country. NSF
investments aim to disrupt this condition by reaching countless
underserved students and under-resourced teachers in rural areas around
the country.
Expert knowledge and diverse perspectives are key to maintaining
our Nation's preeminence in science and engineering. And by investing
in learners from all geographic areas, EDU is working to grow a vibrant
and diverse U.S. STEM workforce, through funding opportunities such as
the Advanced Technological Education (ATE) program. Creating
opportunities everywhere -including in rural areas--advances the
frontier of innovative STEM research and development. This effort helps
broaden pathways for domestic learners to join the future STEM
workforce. And reaching rural communities presents a great opportunity
to demonstrate the value of Federal investments in science and
engineering.
A recent look at our portfolio revealed that EDU has nearly 500
active awards that are investigating aspects of rural STEM education.
Clearly, this is an important area in which NSF/EDU is investing.
NSF sponsored a recent convening on ``K-12 Rural STEM Education and
Workforce Development'' at the National Academies (in fulfillment of
the ``CHIPS and Science Act''). This was an open session/conversation
to learn more about the development of the legislation from
congressional staffers and hear about high-level overview of the issues
in rural STEM education and rural broadband and connectivity issues.
______
Response to Written Questions Submitted by Hon. Ben Ray Lujan to
Dr. Sethuraman Panchanathan
By expanding authorities for not just the National Science
Foundation, but also the Departments of Energy and Commerce, the CHIPS
and Science Act makes clear that no single department or agency can do
it alone. The scientific challenges we face are too big, the timeline
to meet these challenges is too short, and the international
competition is too strong. I was pleased to see that NSF and Department
of Energy signed an MOU to partner on finding solutions to the
scientific challenges of the 21st century.
Question 1. Can you share with the committee some concrete examples
of how NSF will leverage the vast and deep capabilities of the DOE
national lab system to meet the challenges of the 21st century?
Answer. In January of this year, NSF and DOE's Office of Science
signed a memorandum of understanding that will enable increased
partnerships to address some of our most important challenges. This MOU
builds upon previous partnerships and provides opportunities for
collaboration on biotechnology, quantum information science and
engineering, advanced manufacturing,, artificial intelligence and
machine learning.
NSF and DOE's robust partnership includes access to various NSF-and
DOE-managed multi-user facilities around the globe. One recent success
from that partnership is the NSF-supported work of researchers at the
University of South Carolina who collaborated with the DOE's Sandia
National Laboratories. The researchers have created a new type of
porous material with unique nanoscale properties that can potentially
enable superior hydrogen storage solutions--an innovation that would be
useful for fuel cells used in vehicles, backup power supplies and other
applications.
The NSF and DOE work together on many important projects, including
the National High Magnetic Field Laboratory (NHMFL). The NHMFL is the
largest and most powerful magnet facility in the world, and it is used
by scientists from all over the globe to conduct research in a wide
range of fields. The NSF supported NHMFL is located at three different
sites: Florida State University, the University of Florida, and the DOE
Los Alamos National Laboratory (LANL). Each site has its own unique
capabilities, and together they work to advance our understanding of
high magnetic fields and their applications, which may lead to the
technologies and scientific solutions of tomorrow.
An additional success from this partnership is an NSF-DOE-supported
award for Accelerating Innovations in Biomanufacturing Approaches
through Collaboration Between NSF and the DOE BETO funded Agile
BioFoundry, a consortium of national laboratories dedicated to
accelerating biomanufacturing and decarbonizing the economy.
University of Georgia researchers and DOE's Agile BioFoundry will
work to increase understanding of the metabolic pathways that allow a
novel microorganism to produce hexanoic acid, that can be engineered to
create sustainable aviation fuel among a host of other carbon neutral
products.
Another example of the NSF-DOE partnership is the newly awarded
Synchrotron for Earth and Environmental Science (SEES) facility to the
University of Chicago. SEES provides researchers access to a suite of
analytical instrument capabilities at synchrotron beam sources across
the country, including Argonne National Laboratory, Lawrence Berkeley
National Laboratory, Brookhaven National Laboratory and SLAC National
Accelerator Laboratory. The facility enables a range of research from
critical mineral formation to natural hazards mediation to future
technological advancements and human health.
______
Response to Written Questions Submitted by Hon. Raphael Warnock to
Dr. Sethuraman Panchanathan
Regional Technology Hubs and Geographic Diversity
The CHIPS and Science Act (P.L. 117-167) authorizes regional
technology hub programs within various agencies, including at the
Economic Development Administration (EDA) and National Science
Foundation (NSF). This legislation also requires geographic diversity
within each program.\1\
---------------------------------------------------------------------------
\1\ See, e.g., https://www.eda.gov/funding/programs/regional-
technology-and-innovation-hubs/faq; https://www.nsf.gov/pubs/2022/
nsf22082/nsf22082.jsp.
Question 1. How does geographic diversity in these programs
contribute to our national security and our ability to compete on the
global stage?
Answer. The NSF Engines program aims to catalyze regional-scale
innovation ecosystems across the country, particularly in parts of the
Nation that have not benefited from the technology booms of the last
few decades. NSF Engines represent regional coalitions that cross
county and state borders and focus on advancing technologies to address
pressing national and societal challenges and create economic
opportunities across the U.S.
Investment in NSF Engines is predicated on the fact that the U.S.
has ceded leadership in too many areas such as semiconductors,
manufacturing, and the bioeconomy--technologies that were built on
American ingenuity and Federal funding. When we cede such leadership,
we see the aftereffects--consider the semiconductor shortage and supply
chain crisis last year, the effects of which we are still feeling
today. We cannot let that be our future in AI, quantum, wireless, and
more; we cannot wake up one morning with this realization. If we don't
address these areas immediately, our economic and national security
will pay the price.
If the United States wants to continue to lead in research and
innovation, we need to invest in both fundamental research and
translation. We need to create the technologies and jobs of the future
through such investments. We also need to ensure that we have a
workforce--a broad and diverse workforce--who are prepared for the jobs
of today and tomorrow.
It has been said that America's diversity is our unique competitive
advantage. We need more people and more ideas from every part of the
U.S. By ensuring that more people and states have access to Federal
funding as the NSF Engines program strives to do, American innovation
can keep the U.S. competitive across all technology areas.
Question 2. How will you coordinate across agencies to ensure
geographic diversity across all programs created under the CHIPS and
Science Act?
Answer. In July 2023, NSF announced a Memorandum of Understanding
(MOU) with the U.S. Economic Development Administration (EDA) to
officially enable cross-agency coordination on regional innovation
programs (https://new.nsf.gov/news/nsf-eda-announce-official-
coordination-regional). Indeed, NSF and EDA share a mutual commitment
to regional innovation and economic development in communities across
the Nation. The CHIPS and Science Act authorizes both agencies to
implement programs to enable regional technology development and
economic and job growth through the NSF Engines and the EDA Regional
Technology and Innovation Hubs (Tech Hubs) programs, but at different
stages of technological development. The NSF Engines program will
catalyze and foster innovation ecosystems across the U.S. by advancing
use-inspired research in key technology focus areas, while also
addressing regional, national, societal, economic, and geostrategic
challenges. Under the Tech Hubs program EDA is authorized to designate
and invest in the planning and implementation of geographically
distributed regional technology hubs that will focus on technology
advancement and commercialization, job creation, and strengthening U.S.
competitiveness. Geographic diversity is a fundamental tenet of both
programs, which seek to identify and invest in areas of the country,
including small and rural communities, that have the potential to
become global leaders but have been overlooked as technology
investments have been concentrated in a handful of established regions.
Collectively, these programs--along with many of the agencies'
other investments, like EDA's Build Back Better Regional Challenge
awards--will accelerate technology advancement and commercialization,
innovation and entrepreneurship, job creation and workforce training,
and more. Ultimately, NSF Engines and EDA Tech Hubs speed and scale
research and development outputs and enable economic opportunities
nationwide; in turn, they contribute to regional economic growth and
U.S. competitiveness in key technology areas. Visit the map of various
NSF and EDA initiatives.
Beyond the NSF Engines and EDA Tech Hubs programs, the CHIPS and
Science Act authorized many other initiatives across the U.S.
Government with a focus on harnessing the geography and demography of
innovation. In addition, several preexisting programs also have this
focus. For example, the CHIPS-mandated Subcommittee on Microelectronics
Leadership (SML), with representation across microelectronics-active
agencies including NSF and the Department of Commerce, convenes
frequently to ensure open interagency communication and coordination on
this focus across a range of investments.
Question 3. Among the 16 finalists for the NSF Regional Engines
award, how many can expect to be funded by the program?
Answer. NSF received $200 million in FY 2023 Appropriations for the
NSF Engines program, of which we invested $43 million on 44 NSF Engine
Development Awards and $20 million on nearly 50 capacity-building
awards at HBCUs, MSIs, and other emerging research institutions. The
remaining funding will go toward supporting the first two years of NSF
Engines awards. The actual number of awards will be dependent upon the
quality of the proposals received.
Question 4. Does NSF expect to conduct a second solicitation round
for NSF Type 2 Engines?
Answer. The President's FY 2024 Request includes funding for a
second round for the NSF Engines program. A final decision will be
subject to appropriations. NSF intends to be ready to issue a new NSF
Engines funding opportunity in Spring 2024.
Question 5. Is cybersecurity a focus area for the NSF Regional
Engines program?
Answer. The NSF Engines program supports projects across all key
technology and challenge areas as outlined in the CHIPS and Science Act
of 2022, including cybersecurity. Of the NSF Engines Development
Awardees, 19 are working on cybersecurity challenges with a total
investment of $18.8 million across 27 states and territories.
Question 6. Will you commit to coming to Georgia to see the
developments in technology, manufacturing, and research happening in
our state?
Answer. The Director would be delighted to visit!
HBCU Research Capacity Building
Institutions of higher education conduct crucial research that
helps drive American innovation and build a talented workforce pipeline
that strengthens American competitiveness; however, Minority-Serving
Institutions and Historically Black Colleges and Universities (HBCUs)
may lack the capacity or institutional knowledge to access Federal
research funding opportunities.\2\ In light of this concern, the CHIPS
and Science Act directs NSF to provide grants to build institutional
research capacity at HBCUs.\3\
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\2\ See https://tcf.org/content/commentary/testimony-the-value-of-
hbcus-should-be-recognized-through-greater-public-investment.
\3\ See, e.g., Pub. L. No. 117-167, tit. 5 Sec. 10524.
Question 1. Why is it important to build research capacity at
HBCUs?
Answer. HBCUs play an important role in our research and education
ecosystem, conferring approximately 18 percent of all STEM-related
Bachelor's degrees that go to Black/African American students in the
U.S. and approximately 1/3 of STEM doctoral degrees. At NSF, we believe
that talent and opportunities are everywhere, and it is in our
collective interest to ensure that everyone can participate in driving
innovation. Georgia is home to many of our Nation's HBCUs and NSF is
committed to research capacity building efforts at these institutions
so that they can contribute to fundamental discovery and basic research
in the United States. Despite significant contributions that HBCUs make
in education, training, and STEM workforce development, these
institutions are systemically and historically underfunded and under-
resourced, which limit their research competitiveness.
Question 2. What is NSF doing to build institutional research
capacity at HBCUs?
Answer. Initiatives such as our new GRANTED program are aimed
directly at building research capacity at institutions such as MSIs and
Emerging Research Institutions. In fact, NSF recently announced a
GRANTED award to Emory University to support the expansion of the
National Organization of Research Development Professionals (NORDP)
Consultants Program. This $9.2M NSF awards aims to increase the
capacity at 16 MSIs and HBCUs to develop research projects, secure
funding and engage students in research.
The NSF Historically Black Colleges and Universities--Excellence in
Research (HBCU-EiR) program strengthens research capacity at HBCUs by
providing opportunities for both public and private HBCUs, particularly
for those who have not been successful in larger NSF Research & Related
Activities competitions. HBCU-EiR aims to stimulate sustainable
improvement in HBCUs' research and development capacity. Clark Atlanta
University, Morehouse College, Morehouse School of Medicine, Savannah
State University, and Spelman College have all been recipients of HBCU-
EiR awards. In FY 2023, the HBCU-EiR program also supported planning
grant awards to HBCUs for initial conceptualization, planning, and
collaboration activities in formulating plans for a future submission
to the HBCU-EiR program. Additionally, in September 2023, the HBCU-EiR
program released a new funding opportunity (Advancing Research Capacity
at HBCUs through Exploration and Innovation, ARC-HBCU) to support
collaboration among HBCU faculty, research administrators, and academic
leadership to explore innovative approaches for addressing the HBCUs'
research capacity needs. Project outcomes have potential to lead to new
models and practices that will sustainably increase research capacity
at HBCUs. The first ARC-HBCU awards will be made in FY24.
The Louis Stokes Alliances for Minority Participation Program
(LSAMP) emphasizes the development of broad-based regional and national
alliances of academic institutions, school districts, state and local
governments, and the private sector. All work together to increase the
number of STEM degrees awarded to underserved and underresourced
students in STEM disciplines. And to broaden pathways to advance STEM
degrees, LSAMP launched the Bridge-to-the Doctorate (BD) program, which
provides financial support and the necessary academic and research
skills that enable students to thrive in STEM graduate degrees. So far,
more than 2500 students are recipients of BD fellowships.
For 25 years, NSF's Historically Black Colleges and Universities--
Undergraduate Program (HBCU-UP) enhances the quality of undergraduate
STEM education and the research capacities of HBCUs and other minority-
serving institutions across the country. Through this program, NSF has
invested in countless research projects that are driving the fields of
machine learning, cognitive psychology, renewable energy, and much
more.
At Spelman College, researchers seek to understand how assessment
practices in post-secondary mathematics courses can impact Black female
students' academic achievement on tests, retention in other courses,
and mathematical identity and agency. Results from this project will
add important insights to the body of knowledge about grading in higher
education.
HBCU-UP funding is aiding Albany State College in Georgia to
strengthen faculty research capability and improve research and
teaching at the institution.
And at Savannah State University, researchers are developing
machine learning models that will be used as an aggregate quality
classification tool by highway agencies. The project will also develop
an undergraduate research program that will prepare undergraduate
students for careers in transportation geotechnics.
The Centers of Research Excellence in Science and Technology
(CREST) program provides support to enhance the research capabilities
of minority-serving institutions by establishing centers that
effectively integrate education and research. CREST promotes the
development of new knowledge, enhancements of the research productivity
of individual faculty, and an expanded presence of students who are
members of groups underrepresented in STEM disciplines.
Most recently, a new project to launch a CREST center at Morgan
State University (an HBCU in Maryland) will focus on advanced magnets,
semiconductors and developing the workforce in these areas. These
fields are of great importance to modern technologies and the Nation's
economy. The project is partially funded by the ``CHIPS and Science
Act,'' and it fits well with the current Administration's priorities.
CREST plays a role nationwide in expanding the presence of students
historically underrepresented in STEM disciplines:
North Carolina A&T became the first HBCU to receive an NSF ERC
award. This started out as a CREST Center, which then evolved into an
Engineering Research Center that supports convergent research,
education, and technology translation at universities that will lead to
strong societal impacts.
Prairie View A&M University is addressing important questions about
reducing carbon dioxide emissions, increasing the sustainability of
fossil fuel energy sources, and improving the technological efficiency
of bioenergy and offshore wind energy. The Environmental Sustainability
subproject focus is on process engineering and stochastic methods to
enhance the sustainability of fossil fuel energy sources, and life
cycle assessment. (PRAIRIE VIEW A&M UNIVERSITY--NSF CREST Center for
Energy & Environmental Sustainability--Phase II).
And at UDC, the CREST Center for Nanotechnology Research and
Education is advancing engineering curriculum. It is integrating
multidisciplinary nanotechnology education and hands-on laboratory
experience in graduate, undergraduate, and high school courses. It is
working to attract, train, and retain students, focusing on
underrepresented groups, for STEM workforce.
Question 3. How is NSF measuring the success of these efforts to
build institutional research capacity?
Answer. At this time NSF relies primarily on annual reports from
individual projects to glean information about i) undergraduate and
graduate students whose research is supported by the project and ii)
the matriculation status of those students. Professional development
opportunities taken by members of the PI team and their students are
also reported. Each new annual cohort of awardees generally represents
an increase in the number of new PIs. For example, both Clark Atlanta
University and Spelman College have each received four HBCU-EIR awards
since FY 2018. Each annual report generally also reports the engagement
of new undergraduate students from year to year. Each project also
engages a different cohort of students as the research area of each
project is different and led by a different PI.
Question 4. What are the best practices for non-HBCUs to strengthen
research partnerships with HBCUs, or vice versa?
Answer. Non-HBCU and HBCU collaborations can serve as critical
partnerships that further enhance the research competitiveness of HBCUs
through leveraging and complementing one another's strengths,
benefiting both non-HBCUs and HBCUs. Specifically, while HBCUs can
offer non-HBCUs best practices on recruiting and retaining students of
color for STEM undergraduate and graduate studies and the STEM
workforce, non-HBCUs may offer opportunities for HBCU faculty to
develop sustainable expertise and long-term plans for their research
program and career trajectories through shared infrastructure, human
resources, and teaching support. An additional critical best practice
is maximizing opportunities for the intersection of all entities that
make up the research ecosystem, including federal, nonfederal, state,
local, and industry engagement.
Workforce and Community Colleges
A skilled domestic workforce is critical to the success of
investments in the CHIPS and Science Act (P.L. 117-167), including
those in semiconductor development, information technologies,
manufacturing, and biotechnology. Community and technical colleges are
well positioned to respond to the relevant emerging technologies
workforce needs by providing shorter-term, experiential or work-based
learning for a broad population of students, including rural Americans
and those from underrepresented backgrounds.
Question 1. What roles do community and technical colleges play in
addressing workplace shortages?
Answer. Community colleges play a critical role in addressing STEM
workplace shortages. They offer educational opportunities for
individuals who are historically underrepresented in STEM, and they can
act as a pathway into four-year institutions of higher education and
into workforce opportunities in emerging technologies of national
importance, including semiconductor design, advanced manufacturing,
cybersecurity, and more.
The Advanced Technological Education (ATE) program is NSF's key
effort that helps to boost the skilled technical workforce--the sector
of jobs that requires more than a high school diploma but less than a
bachelor's degree. ATE provides grants to improve technician education
at community colleges and in the Career and Technical Education
programs in high schools. And the program funds projects that improve
technical education in all the high-tech fields that drive the
economy--biotech, cybersecurity, advanced manufacturing,
microelectronics, semiconductor manufacturing, electric vehicle
manufacturing, artificial intelligence, nanotechnology, etc. ATE
reaches nearly 40,000 students and 9,000 teachers annually.
The country is currently experiencing a major shortage in workers
in the microelectronics and semiconductor field. Last year, EDU
partnered with Intel Corporation to help educate and train the Nation's
semiconductor manufacturing (and semiconductor manufacturing design)
workforce and advance opportunities for equitable STEM education. And
as part of this effort, a Dear Colleague Letter announced award
opportunities in the ATE program and the Scholarships in Science,
Technology, Engineering, and Mathematics (S-STEM) program, programs
that build on or leverage strong industry-academic partnerships to
strengthen the semiconductor manufacturing workforce.
The ATE program also supports five large ATE Centers with a
manufacturing focus:
National Center for Next Generation Manufacturing (NCNGM), based at
Tunxis Community-Technical College (CT), which coordinates partnerships
involving community colleges, universities, business, industry, and
government around the Nation to develop a pipeline of students with the
skills to pursue careers in advanced manufacturing during the Fourth
Industrial Revolution, known as ``Industry 4.0.''
National Center for Welding Education and Training (Weld-Ed), based
at Lorain County Community College (OH), which has developed curricula
and provided professional development for faculty to address the demand
for skilled welding technicians, especially technicians who know
``lightweighting'' welding processes, which are critical in advanced
manufacturing and tertiary industries.
Center for Aviation and Automotive Technological Education Using
Virtual E-Schools (CA2VES), based at Clemson University (SC), which has
developed cutting-edge manufacturing curricula using virtual reality
and artificial intelligence e-learning platforms.
Florida Advanced Technological Education (FLATE) Center, hosted by
FloridaMakes in Orlando, which offers resources for students, faculty,
and industry to support the more than 20,000 companies and 380,000
people who work in manufacturing in the state of Florida.
Minnesota State Advanced Manufacturing Center of Excellence
(MSAMCOE), based at Bemidji State University (MN), which has promoted
manufacturing careers to K-12 students, developed ``digital badges''
that recognize students' participation in manufacturing-related
experiences, and offered professional development opportunities for
educators.
And because U.S. global competitiveness depends on the readiness of
the Nation's STEM workforce, this year, NSF published a new Dear
Colleague Letter (DCL) that highlights investments in programs that
directly support the preparation of this workforce. As part of this
effort, this Skills Training in Advanced Research & Technology (START)
DCL announces an updated supplemental funding opportunity for the ATE
Program and others.
In addition to ATE, this year the agency announced a new program
that will accelerate the effect of inclusive and evidence-based
practices in undergraduate STEM education at two-year colleges across
the country. The IUSE: Innovation in Two-Year College STEM Education
program (ITYC) is open to two-year colleges that offer degrees in STEM.
A great aspect of this program is that four-year institutions and
professional organizations may partner with two-year college that
submit proposals.
Moreover, projects funded through ITYC may be in any discipline
that is currently supported by NSF funding (and that is a wide range).
ITYC differs from ATE a bit as it looks more at the student experience
at community colleges and the institutional strengths of the
institutions.
Increasing retention and graduation rates at two-year colleges is
an ongoing challenge--some of the grand challenges follow students from
the schools they came from to the community colleges they go to. The
Community College Research Center has found that public community
colleges receive less funding than four-year institutions, and the
community colleges that serve the most disadvantaged students receive
the fewest dollars per student. Additionally, Federal data on
completion and graduation rates show that community college students
have much lower graduation rates than students at four-year
institutions, and data from the National Student Clearinghouse and the
Community College Research Center indicate that four out of five
students who begin at a community college say they plan to go on to get
a bachelor's degree, but only about one in six actually do. That's down
by nearly 15 percent since 2020. By adding ITYC to our portfolio, NSF
will make greater investments in community colleges. This will open
opportunities to graduate from two-year colleges and contribute to the
workforce.
Many of NSF's long-standing programs also often partner with and/or
support community colleges/students/teachers.
HBCU-UP, for example, is funding a project at Hinds Community
College-Utica Community in Mississippi to strengthen the math
performance of students who aspire to earn STEM degrees. The
overarching goals are to recruit, prepare, develop, and retain African
American students who have expressed interest in STEM fields and are at
risk for failure in math courses. [Targeted Infusion Project:
STEMulating the M in STEM]
And in South Carolina, NSF's Scholarships in Science, Technology,
Engineering, and Mathematics Program (S-STEM) is supporting high-
achieving, low-income students with demonstrated financial need at
Spartanburg Community College, Trident Community College, and Clemson
University. The goal is to get students who begin their academic path
at community colleges to transfer into engineering and computing degree
programs at four-year institutions. [Collaborative Research: Student
Pathways in Engineering and Computing for Transfer Success]
Moreover, this summer, NSF partnered with the White House and other
Federal agencies to unveil the National Cyber Workforce and Education
Strategy, a first-of-its-kind comprehensive approach aimed at
addressing both immediate and long-term cyber workforce needs. As part
of this initiative, NSF renewed funding for institutions including
community colleges, including Sinclair Community College in Ohio, to
engage underrepresented student in cybersecurity education. These
institutions represent the diversity of NSF investments across
geographic and racial demographics, including HBCUs, HSIs, and
universities in EPSCoR jurisdictions.
These investments were made through NSF's CyberCorps Scholarships
for Service program which, for decades, has worked to build a strong
Federal cybersecurity workforce. In fact, since the first cohort of 31
students in 2001, the CyberCorps program has supported more than 5,000
students who play critical roles defending our Nation's cyberspace by
working at federal, state, tribal, and local government organizations.
CyberCorps SFS also supports many community colleges through its
pathways program. Currently, there are 28 community colleges
participating in the CyberCorps Pathways:
Like at Towson University in Maryland, where CyberCorps SFS is
preparing highly qualified cybersecurity professionals with skills such
as forensics capabilities in the Federal workforce. CyberCorps
established a pathway between Towson and the Community College of
Baltimore County to support students through early mentoring and
advising in cybersecurity education. This collaboration provides an
opportunity for recruiting students from populations traditionally
underrepresented in computing. [CyberCorps: Scholarship for Service at
Towson University]
And because transferring community college courses to four-year
institutions can often prove difficult, researchers at Old Dominion
University in Virginia saw an opportunity through NSF's Secure and
Trustworthy Cyberspace (SaTC) program to tackle this problem. This was
done by connecting three community colleges within the area with Old
Dominion University, creating a formal academic pathway for students to
a four-year institution. This prepared students to enter the
cybersecurity workforce, and it also increased the diversity of both
the cybersecurity student population and potential new employees.
[SaTC: EDU: Creating Cybersecurity Pathways Between Community Colleges
and Universities] (The three community colleges included: Tidewater
Community College, Northern Virginia Community College, and Thomas
Nelson Community College)
Question 2. What can Congress do to help Community and Technical
colleges strengthen their capacity to train workers in the skills
required to succeed in high-growth, high-demand industries?
Answer. Congress can provide continued investment in NSF's
programs, like ATE, ITYC, HBCU-UP, CyberCorps, etc.; support career
pathway programs from two-year colleges to four-year institutions;
stand up for programs at technical colleges that provide education in
emerging technologies, like AI, advanced manufacturing. . .; support
opportunities for community college teachers (mentorship, professional
development, continued education, resource availability, etc.); and
understand that NSF alone cannot solve the grand challenges in STEM. It
is through collaborations, with industry, other Federal partners, non-
profits, community organizations, etc. that we will be able to make the
biggest impact. (Working with the field to help itself.)
Question 3. How will a project's economic and social impact, such
as workforce development, impact the award amount each project will
receive?
Answer. Proposals are submitted in response to program
announcements, Dear Colleague Letters, and solicitations, which
generally provide the total amounts available and the estimated number
of awards for those available funds.
Reviewers evaluate all proposals against two criteria: Intellectual
Merit: the potential to advance knowledge; and Broader Impacts: the
potential to benefit society and contribute to the achievement of
specific, desired societal outcomes.
Administrative Burden on Universities
Question 2. What steps is NSF taking to reduce and minimize the
administrative burden on universities of the implementation of the
CHIPS and Science Act?
Answer. NSF has historically considered the imposition of
administrative burden prior to implementation of new requirements on
universities, especially our proposer and awardee community. The
following provides illustrative examples of steps NSF is taking or has
taken to reduce and minimize the administrative burden associated with
universities' implementation of applicable CHIPS and Science Act
research security provisions:
SEC. 10634. RESEARCH SECURITY TRAINING REQUIREMENT FOR
FEDERAL RESEARCH AWARD PERSONNEL. NSF has co-funded (along with
the Department of Energy, the National Institutes of Health,
and the Department of Defense) the development of research
security training modules. These resources will be made readily
available to the U.S. research community, including research
universities by the end of January 2024. These four modules
will provide fundamental training to the research community and
will eliminate the need for individual organizations to develop
their own training programs. The four training modules address
why research security is important, guidance on disclosure
requirements, information on assessing risk, and distinguishing
research security concerns from legitimate international
cooperation. These modules also will ensure compliance with
requirements imposed by the Federal research funding agencies
necessary to implement NSPM-33. Note that these training
modules also will assist the recipient community in meeting the
requirements established in CHIPS and Science Act Section
10337, Responsible conduct in research training.
SEC. 10339B. FOREIGN FINANCIAL SUPPORT. Prior to
implementation of Section 10339B in the ``NSF Proposal &
Policies & Procedures Guide'', NSF has been working with
professional societies \4\ to consider ways to help mitigate
the administrative burden associated with this new reporting
requirement for foreign financial gifts and contracts received
beginning on July 1, 2023, through June 30, 2024. NSF has
worked with all stakeholders, including universities, to
minimize duplication and respond to questions. The
conversations to date have been very productive and will help
ensure compliance when the system to collect the relevant
required data from Institutions of Higher Education (IHEs) goes
into effect in July 2024.
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\4\ Represented professional societies include: the Council on
Governmental Relations, the Association of American Universities, the
American Council on Education, the National Association of Independent
Colleges and Universities, and the Association of Public & Land-Grant
Universities.
SEC. 10632. MALIGN FOREIGN TALENT RECRUITMENT PROGRAM
PROHIBITION. Section 4(b) of National Security Presidential
Memorandum-33 (NSPM-33) directs that ``research funding
agencies shall require the disclosure of information related to
potential conflicts of interest and commitment from
participants in the Federally funded R&D enterprise . . . The
appropriate disclosure requirement varies depending on the
individual's role in the United States R&D enterprise.''
Section 4(b)(vi) directs that ``agencies should standardize
forms for initial disclosures as well as annual updates, . . .
and should provide clear instructions to accompany these forms
and to minimize any associated administrative burden.'' NSF led
the development of the Biographical Sketch and Current and
Pending (Other) Support Common Disclosure Forms and serves as
steward of these forms on behalf of OSTP. These common
disclosure forms are intended to clarify what is expected of
senior/key persons when applying for R&D funding from Federal
research funding agencies. As part of the development process,
the Section 10632 certification requirement was implemented in
each of the Common Forms and ensures that consistent language
is used by each Federal research funding agency in
implementation of this statutory requirement. This will greatly
assist researchers in understanding the requirements associated
with this provision in CHIPS and Science. These Common Forms
were cleared by the Office of Management and Budget on October
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31, 2023.
SEC 10338. RESEARCH SECURITY AND INTEGRITY INFORMATION
SHARING ANALYSIS ORGANIZATION (RSI-ISAO). The RSI-ISAO, renamed
the Safeguarding the Entire Community in the U.S. Research
Ecosystem (SECURE) Center, would empower the U.S. research
community (including Institutes of higher education, non-profit
research institutions, and small and medium-sized for-profit
organizations) to address foreign government interference, and
support security-informed decision-making through a variety of
information and services.
SEC. 10331. OFFICE OF RESEARCH SECURITY AND POLICY. NSF is
working collaboratively with stakeholders to develop a Dear
Colleague Letter (DCL) that will focus on supporting research
security-related functions and resources within emerging and
developing research IHEs. The DCL is exploring specific areas
to support, including but not limited to developing a hub
concept that would provide shared services to emerging and
developing research institutions, which could be replicated
nationally.
______
Response to Written Questions Submitted by Hon. Peter Welch to
Dr. Sethuraman Panchanathan
To reverse course on climate change, we need to invest in the clean
energy technologies of tomorrow. This means the U.S. needs to provide
meaningful support to our efficiency and clean energy innovators so
they can build strong domestic supply chains for their products. The
CHIPS & Science Act established the Directorate of Technology within
the National Science Foundation to build a U.S. technology development
to commercialization pipeline.
Question 1. Can you describe a success the Directorate has had in
the clean energy space thus far?
Answer. The NSF Engines program is already a great example of
success. NSF had over 700 concept outlines submitted from all across
the country at the start of this process. We were very intentional in
how we engaged with the community to encourage teaming and partnerships
among potential proposers. We fully expect that this type of engagement
and teaming will have a lasting positive impact.
In May of this year, we awarded 44 NSF Engines Development Awards
spanning 46 U.S. states and territories. Of those awards, 23 are
working on energy technologies--a $23 million investment across 30
states and territories.
NSF Engines will spur use-inspired research that will lead to new
technologies or startup companies. We envision this research will drive
innovators to engage in the NSF's Lab-to-Market Platform, including
applying to programs like the NSF Small Business Innovation Research/
Small Business Technology Transfer (SBIR/STTR) programs.
As one example of success, the NSF SBIR/STTR programs funded
Dimensional Energy (NSF-1831166)--a company that uses sunlight to
convert carbon dioxide into energy. Its high-light reactor turns carbon
dioxide and water into raw materials that could be used to create fuel.
Question 2. What can Congress do to further support the Directorate
of Technology's work?
Answer. NSF is grateful for the bipartisan support Congress has
shown for our mission in both the CHIPS and Science Act and the FY 2023
appropriations. This support comes at a pivotal time for the United
States in terms of international competitiveness and NSF is proud to be
a leader in support of our STEM talent and the innovation that will
keep us at the vanguard of discovery into the future.
Sustained investments will be necessary for us to fully realize the
bold vision outlined in the CHIPS and Science Act.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Dr. Sethuraman Panchanathan
Research Security Guardrails for Fundamental Research
Since 1985, our collaborations in fundamental research with other
countries have been completely open, unregulated, and unprotected. For
this kind of research, we have put no restrictions on data-sharing or
with whom research is done. Of concern, China has been able to leverage
the openness of the U.S. research system and acquire technologies and
know-how critical to U.S. national security and competitiveness. U.S.
researchers on Federal research grants for R&D in cutting edge
technologies are concurrently collaborating with China on fundamental
research projects.
Question 1. Do you support putting security guardrails around
fundamental research, including restrictions on data-sharing?
Answer. NSF is open to a discussion on both guardrails for
providing NSF-funding to any entity of concern as well as guardrails
and risk mitigations regarding potential collaboration with entities of
concern, including data-sharing. In fact, we have several guardrails in
place already as described below. It is of utmost importance to make
sure that American innovation is safeguarded.
NSF is in the process of implementing a new policy (in the 2024
PAPPG) that will allow NSF to return without review or decline
proposals that have the potential to negatively impact research
security and integrity due to credible information of a national
security concern. This decision-making process will be informed by a
risk rubric comprised of risk-based indicators, which is currently
under development.
NSF also commissioned a JASON study to help inform NSF's thinking
on specific steps that it might take to identify sensitive areas of
research, and processes that NSF might use to address security in those
research areas of concern. NSF expects the final JASON report by the
end of January 2024.
National Science Foundation (NSF) Grant for Journalist Therapy
In September 2022, the NSF began dispersing a $5 million award to
the George Washington University to create a therapy toolkit for
journalists targeted by ``misinformation-driven harassment campaigns.''
\1\
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\1\ See USA Spending, NSF, https://www.usaspending.gov/award/
ASST_NON_2230683_4900
Question 1. Please explain in detail how this award advances the
NSF's statutory mission ``to promote the progress of science.''
Answer. This project fulfills Section 4(4) of the IOGAN Act. The
purpose of the project is to create a system to support journalists and
experts who inform the public about topics that are subject to
manipulated media. This research also aligns with the guidance Congress
gave NSF in the FY 2022 Appropriations, to work across disciplines to
counter online influence operations by foreign adversaries by helping
individuals who can help counter these operations when they are
subsequently attacked for doing so.
NSF Engagement in Censorship Projects
During your testimony, you made the following statement: ``I want
to say one thing very categorically, we do not--NSF does not engage in
censorship. We do not regulate any content and engage with anybody who
also does so.'' You then stated: ``We are not in the business of
censorship. We are not in the business of controlling content.''
However, a cursory examination of NSF grants directly contradicts your
claim that NSF does not engage with anybody who regulates content. For
example, since Fiscal Year 2021, NSF has funded over 100 academic
projects that are aimed at supposedly reducing ``mis-, dis-, and mal-
information,'' much of which is simply content that the progressive
left does not agree with.
1. Define ``censorship.''
2. Define ``regulate [. . .] content.''
3. Define ``controlling content.''
4. Define ``engage'' in the context of your statement above.
5. Define ``in the business of'' in the context of your statement
above.
Answer. As part of the agency's mission and, as requested by
Congress as described in the response below, the National Science
Foundation enables the Nation's scientists to study the flow of
information. That may happen by studying how computer networks affect
the spread of information, or it may be by studying how users of those
networks interact with the network or with each other. NSF's interests
lie in the underlying technological and foundational computer science
and sociological questions that can inform users, industries,
regulators, and Congress in this space.
NSF Grants with First Amendment Implications
Answer. These awards are made pursuant to sections 3 and 11 of the
National Science Foundation (NSF) Act of 1950. Under those authorities,
``The Foundation is authorized and directed--(1) to initiate and
support basic scientific research and programs to strengthen scientific
research potential and science education programs at all levels in the
mathematical, physical, medical, biological, social, and other
sciences, and to initiate and support research fundamental to the
engineering process and programs to strengthen engineering research
potential and engineering education programs at all levels in the
various fields of engineering, by making contracts or other
arrangements (including grants, loans, and other forms of assistance)
to support such scientific, engineering, and educational activities and
to appraise the impact of research upon industrial development and upon
the general welfare;'' and ``(8) to take a leading role in fostering
and supporting research and education activities to improve the
security of networked information systems.'' (42 USC 1862(a)). To carry
out those activities the Foundation is authorized ``to enter into
contracts or other arrangements, or modifications thereof, for the
carrying on, by organizations or individuals in the United States. .
.of such scientific or engineering activities as the Foundation deems
necessary to carry out the purposes of'' the NSF Act of 1950. (42 USC
1870(c)).
The awards described below are representative of the ways that the
National Science Foundation enables the Nation's scientists to study
the flow of information. That may happen by studying how computer
networks affect the spread of information, or it may be by studying how
users of those networks interact with the network or with each other.
Given how prevalent the use of social media is in American society it
is important that NSF enable our Nation's scientists to add to our
common understanding of how and why those networks work. This includes
studying how false or misleading information is spread among those
networks.
These awards are also consistent with Congressional explanatory
text accompanying the final appropriations for Fiscal Years 2021 and
2022 which stated that ``NSF is encouraged to consider additional
research efforts that will help counter influence from foreign
adversaries on the Internet and social media platforms designed to
influence U.S. perspectives, sow discord during times of pandemic and
other emergencies, and undermine confidence in U.S. elections and
institutions'' (166 Cong. Rec. H7947 (2020) (Explanatory Statement
accompanying the Consolidated Appropriations Act, 2021); H. Comm Print
47-047, Legislative Text and Explanatory Statement, Book 1, at 303
(2022) (Explanatory Statement accompanying the Consolidated
Appropriations Act, 2022)).
NSF does not endorse any outcomes from funded research, and in fact
explicitly disclaims the final Project Outcome Reports for the General
Public as written and presented by the researcher(s), using the
following text from NSF's Proposal & Award Policies & Procedures Guide
(PAPPG):
``This Project Outcomes Report for the General Public is displayed
verbatim as submitted by the Principal Investigator (PI) for this
award. Any opinions, findings, and conclusions or recommendations
expressed in this Report are those of the PI and do not necessarily
reflect the views of the National Science Foundation; NSF has not
approved or endorsed its content.''
(PAPPG at VII.D.3.) As such, funding these projects does not
abridge the First Amendment's guarantee of freedom of speech.
The above referenced statute and explanation pertain to each award
listed below. In addition, an explanation of the purpose of each award
is provided.
For each of the following awards, please provide the section of
NSF's statutory mandate that the award fulfills and a ``yes'' or ``no''
answer as to whether NSF believes the awarding of government funds for
the project is consistent with the First Amendment. For awards to which
you answered ``yes,'' please provide any documentation or analysis NSF
conducted to verify that the project would not infringe on lawful
speech. For awards to which you answered ``no,'' indicate whether you
will reevaluate and possibly rescind the award.
For responses:
1. $5 million ongoing award to the University of Washington.
a. ``[S]olutions must not only provide the public with skills for
determining the truthfulness of claims, but must also provide
resources for addressing the social and emotional impacts of
misinformation. [This project] will also design and implement a
socio-technical platform that supports digital literacy
interventionists.'' \2\
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\2\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2230616_4900
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Answer. This project fulfills Section 4(4) of the IOGAN Act. The
purpose of the project is to educate the public to understand and
process online information. The project focuses on co-designing
culturally relevant digital literacy training with black and rural
communities, as well as community colleges. This research also aligns
with the guidance Congress gave NSF in the FY 2022 Appropriations,
i.e., to work across disciplines to counter online influence operations
by foreign adversaries by helping to create a more informed public with
better skills to understand these operations.
2. $5 million ongoing award to the University of Wisconsin.
a. ``[T]his project is a dynamic and flexible digital dashboard that
will help end users . . . (1) identify trending misinformation
networks on social media platforms . . . (2) strategically
correct misinformation.'' ``[B]y the end of phase II, Course
Correct intends to have further developed the digital dashboard
in ways that could ultimately be adopted by other end users
such as public health organizations, election administration
officials (emphasis added), and commercial outlets.'' \3\
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\3\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2230692_4900
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Answer. This project fulfills Section 4(4) of the IOGAN Act. The
purpose of the project is to create a system to identify emerging
narratives based on unverified information and surface them to
journalists, who can then decide whether or not to write stories about
those narratives. This research also aligns with the guidance Congress
gave NSF in the FY 2022 Appropriations, to work across disciplines to
counter online influence operations by foreign adversaries, by
identifying them and surfacing them to journalists who can inform the
public about them.
3. $5 million ongoing award to the George Washington University.
a. ``[T]his project addresses the links between two significant
problems impacting trust in contemporary communication systems:
(1) the broad and rapid spread of misinformation and (2) abuse
and harassment directed at members of expert communities'' and
``create[s] a rapid-response socio-technical system that
supports journalists and other experts facing online abuse and
harassment.'' \4\
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\4\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2230683_4900
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Answer. This project fulfills Section 4(4) of the IOGAN Act. The
purpose of the project is to create a system to support journalists and
experts who inform the public about topics that are subject to
manipulated media. This research also aligns with the guidance Congress
gave NSF in the FY 2022 Appropriations, to work across disciplines to
counter online influence operations by foreign adversaries by helping
individuals who can help counter these operations when they are
subsequently attacked for doing so.
4. $505,017 ongoing award to the State University of New York.
a. ``[T]his project aims to address these challenges by
transitioning a set of algorithms, software frameworks, and
system designs out of the research lab into the hands of active
practitioners to help identify and mitigate information
manipulation (misinformation and dis-information).'' \5\
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\5\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2247867_4900
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Answer. The purpose of this award is to ensure the stability of the
information ecosystem and educate future practitioners about
fundamental software development skills in the areas of systems,
machine learning, and data science. The project aims to design and
develop a production capable, open-source software suite to enable the
rapid collection, management, and analysis of social media data.
5. $441,200 ongoing award to the University of Utah.
a. ``[T]o address these challenges, this project combines the
complementary information processing strengths of humans and
computation to transform the efficiency, effectiveness, and
scale of fact-checking. The project can enable fact-checkers to
spot misinformation early, prioritize effort, and unify the
various tools and techniques used for fact-checking.'' \6\
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\6\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2154123_4900
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Answer. The purpose of this award is to scale the work of human
fact-checkers and boost information literacy in society. The project
aims to use elements of security incident response (i.e., preparation,
detection, containment, and post-incident activity) to transform the
ad-hoc, time-consuming, and small-scale nature of current fact-checking
practices.
6. $396,000 ongoing award to New York University.
a. ``[T]o address these challenges, this project combines the
complementary information processing strengths of humans and
computation to transform the efficiency, effectiveness, and
scale of fact-checking. The project can enable fact-checkers to
spot misinformation early, prioritize effort, and unify the
various tools and techniques used for fact-checking.'' \7\
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\7\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2154119_4900
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Answer. The purpose of this award is to scale the work of human
fact-checkers and boost information literacy in society. The project
aims to use elements of security incident response (i.e., preparation,
detection, containment, and post-incident activity) to transform the
ad-hoc, time-consuming, and small-scale nature of current fact-checking
practices.
7. $336,664 ongoing award to Rensselaer Polytechnic Institute.
a. ``[U]nderstanding how information flows and its impact on human
behavior is important for determining how to protect society
from the effects of misinformation, propaganda, and ``fake
news''. This project traces how information spreads on social
media channels and how ideas, opinions, and beliefs change as
they spread.'' \8\
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\8\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2214216_4900
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Answer. The purpose of this award is to study how information flows
on social media, to better understand how online social networks, with
a high degree of public participation, shape public opinion. The
project aims to develop a computational model of the information flow
in social media that contrast with traditional news sources.
8. $330,555 ongoing award to the University of Florida.
a. ``[D]espite decades of research, misinformation remains a serious
threat as most technical mitigation methods focus on improving
detection accuracy and fail to consider social and emotional
perspectives. This project assists in enhancing information
integrity by identifying influencing communities, agents, and
culturally resonant information to identify tipping points in
public dialogue on controversial issues and offering venues of
user-centric interventions at scale.'' \9\
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\9\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2323794_4900
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Answer. The purpose of this award is to move away from source-
centric accuracy detection and debunking to focus on user-centric
interventions. The project aims to develop novel deep learning models
based on topology ML, which effectively predict heterogeneous social
norm emergence for timely intervention, identify top trusted features
for engagement, and temporal explainable artificial intelligence for
transparent interaction with users.
9. $225,669 ongoing award to Boston University.
a. ``[T]his project aims to address these challenges by
transitioning a set of algorithms, software frameworks, and
system designs out of the research lab into the hands of active
practitioners to help identify and mitigate information
manipulation (misinformation and dis-information).'' \10\
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\10\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2247868_4900
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Answer. The purpose of this award is to move away from source-
centric accuracy detection and debunking to focus on user-centric
interventions. The project aims to develop novel deep learning models
based on topology ML, which effectively predict heterogeneous social
norm emergence for timely intervention, identify top trusted features
for engagement, and temporal explainable artificial intelligence for
transparent interaction with users.
10. $224,033 ongoing award to the Illinois Institute of Technology.
a. ``[T]he project aims to study the scientific underpinnings of
disinformation and develop a computational framework to
attribute, detect, and explain disinformation to inform
policymaking.'' \11\
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\11\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2241068_4900
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Answer. The purpose of this award is to systematically investigate
major data, provenance and explainability challenges in disinformation
analysis. The project aims to develop new computational methods for
multi-modal disinformation detection models that include images and
social contexts, and for explainable disinformation detection models
via the guidance of well-established social theories.
11. $220,000 ongoing award to Syracuse University.
a. ``[T]he project aims to study the scientific underpinnings of
disinformation and develop a computational framework to
attribute, detect, and explain disinformation to inform
policymaking.'' \12\
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\12\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2241070_4900
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Answer. The purpose of this award is to systematically investigate
major data, provenance and explainability challenges in disinformation
analysis. The project aims to develop new computational methods for
multi-modal disinformation detection models that include images and
social contexts, and for explainable disinformation detection models
via the guidance of well-established social theories.
12. $217,000 ongoing award to the University of North Carolina at
Charlotte.
a. ``[D]espite decades of research, misinformation remains a serious
threat as most technical mitigation methods focus on improving
detection accuracy and fail to consider social and emotional
perspectives. This project assists in enhancing information
integrity by identifying influencing communities, agents, and
culturally resonant information to identify tipping points in
public dialogue on controversial issues and offering venues of
user-centric interventions at scale.'' \13\
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\13\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2323795_4900
---------------------------------------------------------------------------
Answer. The purpose of this award is to move away from source-
centric accuracy detection and debunking to focus on user-centric
interventions. The project aims to develop novel deep learning models
based on topology Machine Learning that effectively predict
heterogeneous social norm emergence for timely intervention, identify
top trusted features for engagement, and temporal explainable
artificial intelligence for transparent interaction with users.
13. $120,008 ongoing award to the Georgia Tech Research
Corporation.
a. ``[T]he general approach is to leverage the social responses that
ordinary users make on online posts, such as supporting,
questioning, disbelieving, or countering claims, to robustly
detect misinformation and suggest corrective responses.'' \14\
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\14\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2239879_4900
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Answer. The purpose of this award is to help everyday users
effectively assess and respond to non-credible information. The project
aims to build robust detection models that leverage graph neural
networks, adversarial learning, and social network analysis.
14. $155,967 ongoing award to the University of California, Santa
Barbara.
a. ``[T]he project aims to study the scientific underpinnings of
disinformation and develop a computational framework to
attribute, detect, and explain disinformation to inform
policymaking.'' \15\
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\15\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2241069_4900
---------------------------------------------------------------------------
Answer. The purpose of this award is to systematically investigate
major data, provenance and explainability challenges in disinformation
analysis. The project aims to develop new computational methods for
multi-modal disinformation detection models that include images and
social contexts, and for explainable disinformation detection models
via the guidance of well-established social theories.
15. $67,380 ongoing award to the Pennsylvania State University.
a. ``[T]he experience of the COVID-19 pandemic has highlighted the
need to develop strong relationships and trust between the
research community and these various constituencies before a
crisis. The workshop will be organized around 3 sessions: 1)
case studies of innovation and misinformation in focal
pathogens and ``gain of function'' research, 2) communicating
novelty and risk, 3) tailoring communication to different
audiences . . . including lay public, agency, and
policymakers.'' \16\
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\16\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2319012_4900
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Answer. The purpose of this award is to teach graduate students and
early career scientists' skills in communicating routine scientific
advancements, specifically surrounding the microbiome in relation to
health and food security. The workshop will include sessions on
communication theory and practice, addressing misinformation, and
communicating with a diverse audience.
16. $38,515 ongoing award to the University of Houston.
a. ``[T[his . . . project is the development of an online dashboard
with misinformation forecast trends and analysis to help
address the misinformation endemic in America.'' \17\
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\17\ See USASpending, NSF, https://www.usaspending.gov/award/
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Answer. This is an I-Corps Teams award, which is an award to
support participation in an NSF entrepreneurial training program called
the NSF Innovation Corps, or NSF I-CorpsTM, program. The
funding does not support technical research but provides tools and
knowledge to researchers in science and engineering fields to allow
evaluation of the commercial potential of their technology. The PI, her
students, and an industry mentor participated in the training program
in the spring of 2022.
This project fulfills Section 601 of the American Innovation and
Competitiveness Act of 2017, which authorizes the NSF I-Corps program,
and Sections 1 and 2 of the IOGAN Act. As noted above, the purpose of
the project is to provide entrepreneurial education to a team of
researchers interested in evaluating the commercial potential of their
technology. Specifically, this I-Corps project is based on prior
research on the development of automated data collection, data
analytics, and deep learning methodologies with the goal of creating an
application and associated website that centralizes up-to-date
misinformation content and metrics. This research is responsive to
Sections 1 and 2 of the IOGAN Act in that it is developing tools and
technologies for authenticating information and detection of
manipulated or synthesized content online. In addition, the prior
research aligns with guidance Congress gave to NSF in the FY 2022
Appropriations, which is to ``help counter influence from foreign
adversaries on the Internet and social media platforms designed to
influence U.S. perspectives, sow discord during times of pandemic and
other emergencies, and undermine confidence in U.S. elections and
institutions.''
17. $21,003 ongoing award to the University of Alaska, Fairbanks.
a. ``[T]hough a small body of prior research on health
misinformation exists, there is a pressing need to gain a
better understanding of how to detect, monitor and understand
misinformation and its impact on population health during
emergencies. The project takes a one health approach,
documenting perspectives of public health officials and
healthcare providers on misinformation.'' \18\
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\18\ See USASpending, NSF, https://www.usaspending.gov/award/
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Answer. This award supports a dissertation project exploring the
role of misinformation in Alaska's response to the covid pandemic. As
part of the emerging field of infodemiology, this project investigates
the impacts of misinformation on public and individual health through
interviews with health care providers and public health personnel.
18. $16,014 ongoing award to the University of Oklahoma.
a. ``[T]he development of a software platform that may be integrated
into crisis management systems such as public health (WHO,
CDC), emergency management (FEMA), and transportation (DOT)
agencies to facilitate the transmission of correct information
and provide the option to notify social media providers of
identified misinformation'' (emphasis added). ``It is becoming
increasingly important for government agencies, policy makers,
and emergency management officials to be capable of addressing
major crisis scenarios under acute time and resource
constraints. Using social media platforms more efficiently
would be a critical step towards this vision.'' \19\
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\19\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2222940_4900
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Answer. This is an I-Corps Teams award, which is an award to
support participation in an NSF entrepreneurial training program called
the NSF Innovation Corps, or NSF I-CorpsTM, program. The
funding does not support technical research but provides tools and
knowledge to researchers in science and engineering fields to allow
evaluation of the commercial potential of their technology. The PI, his
student, and an industry mentor participated in the training program in
the winter of 2021.
This project fulfills Section 601 of the American Innovation and
Competitiveness Act of 2017, which authorizes the NSF I-Corps program,
and Sections 1, 2, and 5 of the IOGAN Act. As noted above, the purpose
of the project is to provide entrepreneurial education to a team of
researchers interested in evaluating the commercial potential of their
technology. Specifically, this I-Corps project is based on prior
research on the development of a software platform that may be
integrated into crisis management systems such as public health (WHO,
CDC), emergency management (FEMA), and transportation (DOT) agencies to
facilitate the transmission of correct information and provide the
option to notify social media providers of identified misinformation.
This research is responsive to Sections 1, 2, and 5 of the IOGAN Act in
that it is developing tools and technologies for authenticating
information and detection of manipulated or synthesized content online
(Sections 1 and 2); and coordinated with other Federal agencies and
programs (Section 5). In addition, this prior research aligns with
guidance Congress gave to NSF in the FY 2022 Appropriations, which is
to ``help counter influence from foreign adversaries on the Internet
and social media platforms designed to influence U.S. perspectives, sow
discord during times of pandemic and other emergencies, and undermine
confidence in U.S. elections and institutions.''
19. $11,485 completed award to Texas State University.
a. ``[T]his . . . project is the development of an online dashboard
with misinformation forecast trends and analysis to help
address the misinformation endemic in America.'' \20\
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\20\ See USASpending, NSF, https://www.usaspending.gov/award/
ASST_NON_2223343_4900
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Answer. Please note that this I-Corps award is the same as number
16 above. The original award was made to Texas State University under
PI Zhijie (Sasha) Dong. I-Corps Award 2223343 was the original award
and 2309846 is a PI Transfer Award to the University of Houston.
______
Response to Written Questions Submitted by Hon. Jerry Moran to
Dr. Sethuraman Panchanathan
Geographic Diversity of Research and Innovation Funding
A major theme of the CHIPS and Science Act was the need to increase
Federal research and development funding. In particular, NSF was
singled out to increase the percentage of spending from key research
accounts that goes to historically underfunded states. Provisions to
ensure geographic diversity were also included in key Commerce programs
included in the CHIPS and Science Act.
Question 1. You mention in your written testimony that the
Foundation has slightly exceeded the 15.5 percent FY2023 funding
allocation goal for EPSCoR states. What challenges, if any, does the
Foundation face in meeting or exceeding these goals in future years?
Answer. NSF is dedicated to meeting and exceeding these goals in
future years. The primary challenge to doing so is receiving an
increase in meritorious proposal submissions from EPSCoR jurisdictions
to facilitate the increasing investment rates. To mitigate this
challenge, NSF's EPSCoR and GRANTED programs are designed to support
EPSCoR jurisdictions in building their research capacity, resulting in
pathways to sustainability and research funding support as well as
support with the proposal preparation and award management processes.
Workforce Challenges for High-Demand Fields
Question 1. How is the Foundation working to ensure that our Nation
can recruit, educate, and retain the world's brightest minds that will
move our technology-driven economy forward through advancement in AI,
quantum computing, and other key technologies?
Answer. The NSF Research Traineeship (NRT) Program explores model
pathways for graduate students in research-based master's and doctoral
degree programs to develop the skills, knowledge, and competencies
needed to pursue a range of STEM careers. The program is especially
focused on effective training of STEM graduate students in high
priority interdisciplinary or convergent research areas, through a
comprehensive traineeship model that is innovative, evidence-based, and
aligned with changing workforce and research needs. The program has
called out Artificial Intelligence and Quantum Information Science and
Engineering as priority areas since 2020 (see NSF 21-536). Also, a
recent NSF news item highlights recent NRT investments in ethical AI:
https://new.nsf.gov/funding/initiatives/nrt/advancing-ethical-ai-
through-convergent-research.
For example, at Kansas State University, researchers are directing
a project, ``Preparing Future Leaders: Rural Resource Resiliency,''
which trains students to become science-based leaders and advocates for
resilient rural communities by combining engineering, economics, and
sociological knowledge to meet the needs of farmers, industry, and
society. Students engage with farmers, government and industry through
interactive sessions and develop relevant skills through innovative
coursework and teamwork. This comprehensive program anticipates
training fifty (50) master's and doctoral students, including twenty-
five (25) funded trainees, from the colleges of engineering, arts and
sciences, and agriculture.
Another team of researchers at the University of New Mexico is
leading ``Quantum Photonics Interdisciplinary Training to Advance
Quantum Technologies (QPAQT),'' which is addressing the need for cross-
disciplinary graduate training in quantum photonics for students with
diverse undergraduate backgrounds. The program anticipates preparing
175 students, including 25 funded trainees, to become generalists in
quantum technologies hardware. The tools and academic training provided
will prepare trainees for a wide variety of careers in semiconductor
and quantum technologies.
Since 2019, the NRT program has funded 15 AI awards/projects. An
additional 10 awards/projects also incorporate aspects of AI in their
training. During this same period the program has funded 12 awards
related to quantum science/computing.
NSF has developed an expansive and inclusive range of workforce
development programs, broadly supporting science and engineering,
including learners in K-12 schools, community colleges, and
universities, as well as reskilling for current workers and upskilling
for those seeking to enter the workforce in new and emerging areas.
Below are some examples of these programs. Importantly, these programs
do not represent an exhaustive list of NSF-funded workforce development
programs, but instead a sampling especially well aligned with key
technology focus areas.
Advanced Technological Education (ATE)--invests in advanced
technician training supporting nearly 40,000 students and 9,000
teachers annually.
NSF Scholarships in Science, Technology, Engineering, and
Mathematics (S-STEM)--provides scholarships for low-income,
academically talented students and has supported more than 100,000
students across the Nation since 2006.
Experiential Learning for Emerging and Novel Technologies
(ExLENT)--provides practical experiences in emerging technologies and
will support hundreds of students in 2023.
Non-Academic Research Internships for Graduate Students (INTERN)--
supports more than 300 NSF-funded graduate students each year to
provide experiential opportunities to prepare students for careers in
industry and other non-academic environments.
Research Experiences for Undergraduates (REU)--supports more than
6,000 students each year to conduct intensive, semi-independent
research projects, mentored by faculty and other experienced STEM
professionals.
CSGrad4US Fellowships, eFellows, and MPS-Ascend--seek to increase
the number and diversity of students engaging in advanced degree
programs and post-doctoral experiences. CSGrad4US fellowships focus on
graduate students. MPS-Ascend and eFellows focus on post-doctoral
researchers.
Supplements for Semiconductor Fabrication and Prototyping--provides
NSF-funded researchers and educators funding to expand researcher and
student access to semiconductor fabrication experiences. These
opportunities can be viewed as a scalable crosscut across the programs
listed above, and others.
NSF Entrepreneurial Fellowships--provide up to two years of support
to Ph.D.-trained scientists and engineers from a variety of backgrounds
and regions across the U.S. with stipends plus access to specialized
research facilities and equipment to advance their prototypes, refine
their business models, build their teams, and secure follow-on money.
NSF and its current partners are investing more than $350 million
annually in the above programs.
NSF also invests in capacity-building at institutions of higher
education in key technology focus areas:
ExpandAI--This program supports capacity-development projects and
partnerships within the National AI Research Institutes ecosystem that
help broaden participation in artificial intelligence research,
education and workforce development.
ExpandQISE--This program supports research and training that will
lead to scientific and engineering breakthroughs in quantum information
science and engineering, while broadening participation and securing a
talent pipeline matched to the needs of this emerging field.
The above constitutes a sampling of our educational offerings.
Computational Power
Question 1. Given the tremendous computational capacity that has
developed in the private sector, in part thanks to Federal basic
research investments, does it make more sense to provide support for
academic and government scientists to have access to cloud compute
resources, rather than building new supercomputers and expanding
Federal hardware assets?
Answer. NSF provides the research community with access to the
computational and data systems that are best suited for their diverse
domains of research and which allow the broad research community to
maximize its scientific output. For the foreseeable future, this will
require a combination of diverse agency-supported on-site large-scale
systems and support for access to commercial cloud resources. There are
two reasons for this. First, agency-supported computing resources are
optimized and operated specifically for scientific use, leading to high
scientific productivity. Second, the present demand for GPUs, the
dominant technology used for AI computations, is immense and commercial
cloud prices are high and can be considerably more expensive than our
on-site supercomputing centers.
NSF provides tens of thousands of researchers access to advanced
computational, AI and data systems at university-based high-performance
computing centers and sites distributed across the Nation. These
resources provide not only compute cycles to researchers, but also
provide the Nation a reservoir and training ground for critical
skillsets needed for national leadership in computing including the
know-how, expertise, and ability to touch and configure hardware,
software, and networking systems for research purposes. The academic
institution-based computing centers that house the largest NSF-
supported computational systems are research and development
laboratories on their own. These centers support novel uses of
cyberinfrastructure, co-designing experiments such as the collaboration
between San Diego Supercomputing Center and the WIFIRE project that
investigates using digital sensors to detect wildfires and aid human
decision making in interventions. These high-performance computing
sites also provide a community for computational researchers nationwide
to get help with code optimization and debugging, provide trainings and
education for students and new users, and provide a clearing house for
best practices learned in different computational domains. Providing
access to computational systems is only one aspect necessary to
effectively conduct computational research. We are investigating how
these critical community capabilities would need to be adapted with a
growing use of the commercial cloud for research.
NSF recognizes the growing role of the commercial cloud in the
computing ecosystem and notes that there are new technologies, only
available in the commercial cloud, to which NSF-supported researchers
must have access. NSF supports commercial cloud usage through awarded
grants, and, more recently, NSF awarded a pilot program CloudBank,
which is a cloud access entity that helps the NSF research community
access and use public clouds for research and education by delivering a
set of managed services designed to simplify access to public clouds.
CloudBank is now supporting 250 projects using the commercial cloud and
is providing critical lessons learned and insights as NSF considers the
rapidly growing capabilities in the commercial cloud.
The high-end computing and commercial cloud market are currently
undergoing rapid disruption. Companies that historically had supported
on-site supercomputing deployments are entering the cloud computing
market and cloud companies are now deploying their cloud-based systems
on-site at customer locations. Many of the techniques to manage and run
on-site and cloud-based systems are merging. NSF is closely tracking
these developments and their implications for the research community.
Finally, as part of the National AI Research Resource (NAIRR)
Pilot, NSF will be partnering closely with both on-site supercomputing
centers as well as commercial cloud providers to demonstrate the value
and impact of the NAIRR concept. Through these partnerships we will
gain invaluable experience that will shape the direction of how the
research community accesses a variety of computational and data
resources.
Quantum Computing
Question 1 Are we at the point with Quantum computing that NSF or
NIST or another Federal agency should be developing metrics to
determine efficacy and efficiency of quantum computations?
Answer. Having an established set of benchmarks will be essential
to track progress and enable performance comparisons of quantum
computing systems. However, the field of quantum computing is currently
advancing so rapidly that it is not yet clear what measures will be
most appropriate. Because of their proximity to the latest scientific
and technology developments, the research community driving these
advances is currently in the best position to explore these common
benchmarks. That community includes researchers funded by NSF,
industry, and other government agencies. Possible avenues for initial
coordination on benchmarks could include the National Quantum
Coordination Office (NQCO), the NQI Advisory Committee, and the non-
governmental Quantum Economic Development Consortium.
Workforce Challenges for Domestic Superconducting Ecosystem
Question 1. What are the workforce shortfalls in establishing a
viable domestic superconducting ecosystem and how is NSF working to
address this need?
Answer. NSF has several programs that address both fundamental
science and workforce shortfalls to advance a vibrant domestic
superconducting ecosystem. The main programs that contribute and
support advancing fundamental science as well as workforce capacity
development across the workforce spectrum in the superconductor space
are: the Condensed Matter Physics (CMP) and Condensed Matter and
Materials Theory (CMMT) Programs, Designing Materials to Revolutionize
and Engineer our Future (DMREF) Program, Materials Research Science and
Engineering Centers (MRSEC) Program, Partnerships for Research and
Education in Materials (PREM) Program, and National High-Magnetic Field
Laboratory (NHMFL) national facility.
DOC and NSF Coordination--
Question 1. In light of the MOU announced on July 26 to improve
coordination between EDA and NSF on the Tech Hubs and NSF Engines
programs, what specific steps are NSF and DOC taking to avoid
duplication between these two programs?
Answer. NSF and EDA are closely collaborating on our investments
through the NSF Engines and EDA Tech Hubs programs. For example, NSF
program staff were engaged by EDA in the review of their Tech Hubs
proposals, and vice-versa. NSF and EDA have shared information about
proposals and prospective awards. And NSF and EDA are sharing knowledge
and best practices on evaluation and assessment at the project and
program levels.
______
Response to Written Questions Submitted by Hon. Dan Sullivan to
Dr. Sethuraman Panchanathan
The CHIPS Act provides the National Science Foundation several
prominent roles, including fostering U.S. growth and research in 10 key
technology focus areas. One of those areas is ``advanced energy and
industrial efficiency technologies''.
Helpfully this term is already defined in statute: ``advanced
energy technologies'' are defined as technologies that ``enhance the
energy independence and security of the United States by enabling
improved or expanded supply and production of domestic energy
resources, including coal, oil, and natural gas.'' (42 USC 18632, the
Dept. of Energy Research and Innovation Act (2018)).
In February 2023, I--along with Senators Wicker, Cornyn, and
Young--wrote to you and emphasized this definition. We urged you to
follow congressional intent and include fossil fuel energy technologies
in NSF's focus areas in addition to renewables. Unfortunately, your
response to our letter skirted the issue and instead reiterated that
``our Nation's future depends on winning the research, innovation,
translation, and education race to transform the energy sector.''
America's abundant energy resources are crucial to our economy and
national security, especially given the current geopolitical climate. A
speedy and faithful implementation of the CHIPS Act--including
fostering advanced energy technologies like coal, oil, and natural
gas--will go a long way toward enhancing the energy independence and
security of the United States.
Question 1. Will you clearly state whether the NSF will foster U.S.
growth and research in advanced energy technologies, including coal,
oil, and natural gas, in accordance with congressional intent?
Question 2. Will you commit to have the NSF be neutral to energy
source when fostering advanced energy technologies?
Answer to 1 & 2. NSF remains committed, via its merit review
process, to supporting energy technology investments that support high-
risk, high-reward research ideas across the science and engineering
spectrum that create broad new understanding and enable future
innovations.
The CHIPS Act requires the Director of the NSF to address five
``societal, national, and geostrategic challenges'' to ``guide [NSF's]
activities,'' including ``climate change and environmental
sustainability'' and ``inequitable access to education, opportunity, or
other services.'' This provision seemingly gives you substantial
discretion to insert these ``societal'' and ``climate'' challenges into
the NSF's work.
Question 1. Can you commit that you will not use any of these
challenges including ``climate change and environmental
sustainability'' to curtail research and innovation in oil and gas?
Answer. Through its merit review process, the National Science
Foundation (NSF) ensures that proposals submitted are reviewed in a
fair, competitive, transparent, and in-depth manner. Merit review
remains at the heart of NSF's enterprise. It identifies portfolios of
ideas for funding in accord with two merit review criteria--
Intellectual Merit (IM) and Broader Impacts (BI). NSF's merit review
process remains the gold standard in the allocation of the agency's
annual resources to support U.S. basic scientific research and programs
to strengthen scientific research potential and science education
programs at all levels throughout the United States and worldwide. Our
goal is to fund awards with integrity in a fair, competitive, and
transparent process. NSF's mechanisms for assessing merit review
includes the utilization of external advisory committees, reports from
Committees of Visitors (COVs), and biennial surveys of proposers and
reviewers.
The United States is currently the world-leader in AI development,
deployment, and innovation, but during a committee hearing last month
on transparency in Artificial Intelligence, witnesses explained that
other nations are ``working harder than ever to develop the next major
technological developments in AI. . .''
The thought of losing our lead in AI development raises a number of
alarm bells for my colleagues and I, particularly if our lead is lost
to an adversarial power like China. In briefings and roundtables that
Congress has had on this topic, it has been estimated that China is
somewhere between one-and-a-half to two years behind us in AI
capabilities, however the recent explosion in popularity of generative
AI has renewed their focus on this race. In fact, this summer the
Chinese began working on the development of their own lithography
machines for printing the high-tech chips needed for AI computing.
Question 1. What role does the CHIPS Act, and the Department of
Commerce more broadly, have in maintaining U.S. superiority in AI
development?
Answer. The CHIPS and Science Act laid out a roadmap for addressing
the intense global competition for leadership in the technologies of
today like AI and for seeding the industries of tomorrow. NSF is one of
the largest non-defense investor in AI research in the Federal
government, and the CHIPS and Science act proposed greatly increasing
NSF's ability to invest in innovative ideas through the Regional
Innovation Engines and other programs. However, without appropriations
at the President's Budget Request level, we risk allowing our
competitors to capitalize on innovations we do not invest in.
Question 2. Do you see any logical supply chain or computing power
chokepoints relevant to the Department of Commerce that could be used
to slow down China's development of AI technology?
Answer. NSF defers to the Department of Commerce.
______
Response to Written Questions Submitted by Hon. Marsha Blackburn to
Dr. Sethuraman Panchanathan
Question 1. How are you coordinating your activities with the
national laboratories? What are the potential areas for collaboration
with the national laboratories?
Answer. In January of this year, NSF and DOE's Office of Science
signed a memorandum of understanding that will enable increased
partnerships to address some of our most important challenges. This MOU
builds upon previous partnerships and provides opportunities for
collaboration on biotechnology, quantum, advanced manufacturing,
engineering, artificial intelligence and machine learning.
NSF and DOE's robust partnership includes access to various NSF-
and DOE-managed multi-user facilities around the globe. One recent
success from that partnership is the NSF-supported work of researchers
at the University of South Carolina who collaborated with the DOE's
Sandia National Laboratories. The researchers have created a new type
of porous material with unique nanoscale properties that can
potentially enable superior hydrogen storage solutions--an innovation
that would be useful for fuel cells used in vehicles, backup power
supplies and other applications.
The NSF and DOE work together on many important projects, including
the National High Magnetic Field Laboratory (NHMFL). The NHMFL is the
largest and most powerful magnet facility in the world, and it is used
by scientists from all over the globe to conduct research in a wide
range of fields. The NSF supported NHMFL is located at three different
sites: Florida State University, the University of Florida, and the DOE
Los Alamos National Laboratory (LANL). Each site has its own unique
capabilities, and together they work to advance our understanding of
high magnetic fields and their applications, which may lead to the
technologies and scientific solutions of tomorrow.
An additional success from this partnership is an NSF-DOE-supported
award for Accelerating Innovations in Biomanufacturing Approaches
through Collaboration Between NSF and the DOE BETO funded Agile
BioFoundry, a consortium of national laboratories dedicated to
accelerating biomanufacturing and decarbonizing the economy.
University of Georgia researchers and DOE's Agile BioFoundry will
work to increase understanding of the metabolic pathways that allow a
novel microorganism to produce hexanoic acid, that can be engineered to
create sustainable aviation fuel among a host of other carbon neutral
products.
Another example of the NSF-DOE partnership is the newly awarded
Synchrotron for Earth and Environmental Science (SEES) facility to the
University of Chicago. SEES provides researchers access to a suite of
analytical instrument capabilities at synchrotron beam sources across
the country, including Argonne National Laboratory, Lawrence Berkely
National Laboratory, Brookhaven National Laboratory and SLAC National
Accelerator Laboratory. The facility enables a range of research from
critical mineral formation to natural hazards mediation to future
technological advancements and human health.
Question 2. Team TN recently secured an NSF Regional Innovation
Engines Development award for Advancing Technology-Enabled Mobility
Solutions.
a. Please tell me how NSF will support open innovation platforms
and testbeds?
Answer. The CHIPS and Science Act authorized TIP to establish a
program supporting Test Beds. This program will support the
development, operation, integration, deployment, and demonstration of
new, innovative critical technologies for users from academia and
industry. A test bed could include hardware or software, or both, and
would provide broad access to a wide range of users. One key goal is to
increase participation by populations that are underrepresented in
STEM. Another key goal is to encourage participation by innovators and
entrepreneurs and the development of new businesses.
TIP has already initiated one test beds program, the National
Quantum Virtual Laboratory (NQVL), in the key technology focus area of
quantum information science. Subject to future appropriations, TIP will
expand the test beds opportunity to encompass additional key technology
areas.
b. How will the NSF help accelerate tech transfer to industry to
promote entrepreneurship?
Answer. NSF has a range of programs that serve to accelerate
technology translation from the lab to the market and society. For
example, upon its inception, TIP brought together NSF's Lab-to-Market
program, spanning:
Partnerships for Innovation (PFI), which provides NSF-funded
researchers the opportunity to increase the impact of their
discoveries by teaching researchers how to develop and
implement a technology roadmap, create a business model, and
develop their technology into a prototype or proof of concept;
NSF Innovation Corps (NSF I-CorpsTM), which
experiential entrepreneurial education to further the Nation's
innovation ecosystem; I-Corps connects the technological,
entrepreneurial and business communities--addressing skill and
knowledge gaps to reduce the time it takes to bring
technologies from the lab to the marketplace; and
NSF Small Business Innovation Research/Small Business
Technology Transfer (SBIR/STTR) programs, which invest in
hundreds of early-stage startups annually, transforming
scientific discovery into products and services with commercial
and societal impact. America's Seed Fund, powered by NSF,
supports startups and small businesses working across almost
all areas of science and technology. Each company can receive
up to $2 million to support research and development.
Additionally, NSF is expanding into other technology translation
pathways, such as open-source ecosystems.
Question 3. Please tell me how you will prioritize EDA Tech Hub
partnerships to produce faster routes from research to actual
commercialization?
Answer. Here are some of the specific ways we're working to drive
that work and how we're doing it with our partners at the Economic
Development Administration, specifically with the Regional Technology
and Innovation Hubs (Tech Hubs):
Our team has recently executed an agreement and partnership
with the Economic Development Administration focused on
regional innovation collaboration to better coordinate our
investments and leverage a whole-of-government approach to our
respective investment programs. This allows coordination on
investment decisions as well as shared data and insights. NSF
participated in the technical review process for the Tech Hubs
designations, providing technical and R&D insight as EDA sought
to identify the strongest Tech Hubs designees.
For the NSF Regional Innovation Engines program, we have
built a post-award support platform informed by technical
assistance conducted by the Economic Development Administration
as well as private-sector models. The NSF Engines Builder
Platform is a human-centered portfolio of support structures
that empowers awardees with the tools, skills, networks, and
capital needed to thrive. This is an entirely new way of
thinking about post-award support in the Federal context. It's
inspired and informed by the support systems pioneered by
venture incubators and accelerators, national philanthropy, and
lessons learned from prior place-based investment efforts. This
will be a vital tool in connecting innovation ecosystems and
place-based investments to the supports they need to facilitate
translation. These resources will support our forthcoming NSF
Engines awardees as well as our previously announced
Development Awardees. Key programmatic leadership from the
Economic Development Administration's Tech Hubs program (as
well as other programs) were included in our selection process
for this platform to ensure cross-agency alignment.
Through the Builder Platform, NSF will also work to identify
alignment, create topical communities of practice, and shared
investment opportunities where there is topical synergy between
a Tech Hub and an NSF Engine or NSF Development Awardee. For
example, identifying collaboration opportunities between the
Tennessee-based Advancing Technology-Enabled Mobility Solutions
NSF Development Awardee led by a variety of Tennessee-based
educational and research institutions--including Vanderbilt, UT
Knoxville, UT Chattanooga, Tennessee Tech University, as well
as UT-Oak Ridge Innovation Institute, and others--and the
multiple EDA Tech Hubs focused on the development of advanced
lithium and EV batteries as well as autonomous vehicles in New
York, Nevada, and Oklahoma. NSF has already identified and
onboarded a lead organization to launch the Builder Platform
and expects services and collaboration opportunities with Tech
Hubs to roll out to awardees in January 2024.
Finally, NSF is in the early phases of discussions with the
Economic Development Administration and the Small Business
Administration's Office of Investment and Innovation to explore
co-creating pathways for NSF Regional Innovation Engines and
Tech Hubs awardees to engage existing SBA translational
programs with targeted programming and supports.
These are just a few of the ways EDA and NSF are working together
and we're committed to expanding that coordination in the months and
years ahead as we make generational investments in our Nation's ability
to compete on the global stage and as we work to collectively bolster
our national defense and advance our Nation's national security goals.
Question 4. The Tennessee Department of Labor and Workforce
Development projects that Tennessee will experience significant growth
in STEM occupations over the next decade. What programs does NSF have
that could support Tennessee's efforts?
Answer. NSF helps contribute to growth in STEM occupations
throughout the United States by funding projects across the agency that
provide support for students and postdocs.
The Advanced Technological Education (ATE) program is the focal
point for NSF's investments to bolster the preparation of the skilled
technical workforce--the sector of jobs that require more than a high
school diploma but less than a bachelor's degree. ATE provides grants
to improve technician education at community colleges and in the Career
and Technical Education (CTE) programs in high schools. The program
seeks, in particular, to improve technician education in high-tech
fields that drive the economy--biotech, cybersecurity, advanced
manufacturing, microelectronics, semiconductor manufacturing, electric
vehicle manufacturing, artificial intelligence, nanotechnology, etc.
ATE reaches nearly 40,000 students and 9,000 teachers annually.
Notable projects include:
``Preparing the Workforce for Industry 4.0s Intelligent
Industrial Robotics,'' a collaboration among three
institutions: University of Tennessee--Chattanooga, Motlow
State Community College, and Chattanooga State Community
College. This project is focusing on defining the necessary
skillset for the next-generation industrial robotics technical
workforce and creating a curriculum that will allow students to
learn those skills. This project will result in one of the
first programs in the Nation for workforce training in
intelligent robotics and artificial intelligence technologies,
and it will support U.S. businesses and industries to rapidly
and effectively incorporate next-generation robotics in the
workplace.
``Integrating Electric Vehicle (EV) Technology in Legacy
Automotive Programs'' is a project at Northeast State Community
College (NSCC). As EV technology continues to advance at a
rapid pace and the number of electric vehicles on the road
continues to increase, multiple training programs are needed
including those that are integrated into legacy automotive
programs to address the growing need for EV maintenance and
repair technicians. This project is investigating the
effectiveness of and documenting the unique challenges
associated with integrating EV technology into a legacy
automotive training program. Outcomes of this effort will
include faculty professional development, a job skills
analysis, and curricular revisions, all of which will improve
outcomes for students in the high need area served by NSCC.
To better meet industry needs for a highly-skilled technical
workforce, this project at Roane State Community College,''
Improving Mechatronics Education by Pairing Mechatronics
Courses with General Education Math and Science Courses,'' is
enhancing general education courses with mechatronics-related
problems and examples, thus providing a context that is
relevant to the students' career goals. Local area employers
are integrally involved in course development and provide
examples of complex mechatronics issues that can be
incorporated into problem-based learning scenarios within the
courses. A collateral benefit of this approach is that non-
mechatronic students in these courses gain exposure to and an
appreciation of topics and applications that are useful for
their employment in STEM-adjacent fields.
______
Response to Written Questions Submitted by Hon. Todd Young to
Dr. Sethuraman Panchanathan
The Section 10339B of the CHIPS and Science Act requires that a
recipient institution of higher education, a foundation of the
institution, and related entities must submit an annual ``summary
document'' of financial support which is $50,000 or more from a foreign
source associated with a foreign country of concern. We have heard
stakeholder concerns that NSF's proposed rule would require
institutions to report each individual gift or contract over $50,000
rather than a summary.
Question 1. Do you believe that your proposed rule is in agreement
with the statutory text?
Answer. NSF believes that our proposed rule is in agreement with
the statutory text. After comprehensive agency review, NSF released the
proposed rule for public comment. In response to public comment, NSF
reduced the data reporting requirement to fewer elements and has
reviewed these data elements with several professional societies
representing the university community. NSF feels it has achieved the
appropriate balance between requiring the information necessary for
data robustness and alleviating as much administrative burden as
possible.
Question 2. If so, what are you doing to alleviate stakeholder
concerns?
Answer. NSF has been meeting with professional societies to
consider ways to help mitigate the administrative burden associated
with this new reporting requirement, provide clarity on what
``financial support'' is scoped out of the reporting requirement, and
solicit feedback on how the Foundation can develop the IT reporting
system to minimize burden for the research community.
Question 3. Furthermore, the NSF's proposed rule, if implemented,
would represent an increase in reporting requirements compared to
similar requirements such as the mandate under Section 117 of the
Higher Education Act--how will the additional reporting requirements
ensure that Federal research funding is not siphoned into foreign
countries of concern?
Answer. Through the creation of this reporting requirement, NSF
will now have a mechanism to review ``financial support'' to recipient
institutes of higher education (IHEs) in the forms of gifts and
contracts that have conditions or ``strings attached'' that could seek
to influence IHE's decision-making process as it relates to Federal
research funding. By creating more transparency in this process, the
Foundation will now have the authority to assess if/when potential
foreign influence is being exerted on recipient IHEs that could result
in Federal research funding being siphoned to foreign countries of
concern.
Question 4. Do you believe the additional reporting requirements
will create a significant administrative burden for recipient
institutions?
Answer. NSF is structuring the reporting requirements to ensure
robust data collection with as little administrative burden as
possible. The Foundation believes it may be helpful to reevaluate this
reporting requirement in two or three years to evaluate the benefit to
research security and ensure we focus on reduced administrative burden
to IHEs.