S.Amdt. 5181

SA 5181. Mr. COTTON submitted an amendment intended to be proposed to
amendment SA 5135 proposed by Mr. Schumer to the bill H.R. 4346, making
appropriations for Legislative Branch for the fiscal year ending
September 30, 2022, and for other purposes; which was ordered to lie on
the table; as follows:

Beginning on page 41, strike line 17 and all that follows
through line 5 on page 84, and insert the following:
``(ii) includes semiconductor fabrication, assembly,
testing, packaging, research and development, and any
additional process identified by the Secretary.
``(C) Required agreement.--
``(i) In general.--On or before the date on which the
Secretary awards Federal financial assistance to a covered
entity under this section, the covered entity shall enter
into an agreement with the Secretary specifying that, during
the 10-year period beginning on the date of the award, the
covered entity may not engage in any transaction, as defined
in the agreement, involving the expansion of semiconductor
manufacturing capacity in the People's Republic of China or
any other foreign country of concern.
``(ii) Affiliated group.--For the purpose of applying the
requirements in an agreement required under clause (i), a
covered entity shall include the covered entity receiving
financial assistance under this section, as well as any
member of the covered entity's affiliated group under section
1504(a) of the Internal Revenue Code of 1986, without regard
to section 1504(b)(3) of such Code.
``(D) Notification requirements.--During the applicable
term of the agreement of a covered entity required under
subparagraph (C)(i), the covered entity shall notify the
Secretary of any planned transactions of the covered entity
involving the expansion of semiconductor manufacturing
capacity in the People's Republic of China or any other
foreign country of concern.
``(E) Violation of agreement.--
``(i) Notification to covered entities.--Not later than 90
days after the date of receipt of a notification described in
subparagraph (D) from a covered entity, the Secretary, in
consultation with the Secretary of Defense and the Director
of National Intelligence, shall--

``(I) determine whether the transaction described in the
notification would be a violation of the agreement of the
covered entity required under subparagraph (C)(i); and
``(II) notify the covered entity of the Secretary's
decision under subclause (I).

``(ii) Opportunity to remedy.--Upon a notification under
clause (i)(II) that a planned transaction of a covered entity
is a violation of the agreement of the covered entity
required under subparagraph (C)(i), the Secretary shall--

``(I) immediately request from the covered entity tangible
proof that the planned transaction has ceased or been
abandoned; and
``(II) provide the covered entity 45 days to produce and
provide to the Secretary the tangible proof described in
subclause (I).

``(iii) Failure by the covered entity to cease or remedy
the activity.--If a covered entity fails to remedy a
violation as set forth under clause (ii), the Secretary shall
recover the full amount of the Federal financial assistance
provided to the covered entity under this section.
``(F) Submission of records.--
``(i) In general.--The Secretary may request from a covered
entity records and other necessary information to review the
compliance of the covered entity with the agreement required
under subparagraph (C)(i).
``(ii) Eligibility.--In order to be eligible for Federal
financial assistance under this section, a covered entity
shall agree to provide records and other necessary
information requested by the Secretary under clause (i).
``(G) Confidentiality of records.--
``(i) In general.--Subject to clause (ii), any information
derived from records or necessary information disclosed by a
covered entity to the Secretary under this section--

``(I) shall be exempt from disclosure under section
552(b)(3) of title 5, United States Code; and
``(II) shall not be made public.

``(ii) Exceptions.--Clause (i) shall not prevent the
disclosure of any of the following by the Secretary:

``(I) Information relevant to any administrative or
judicial action or proceeding.
``(II) Information that a covered entity has consented to
be disclosed to third parties.
``(III) Information necessary to fulfill the requirement of
the congressional notification under subparagraph (H).

``(H) Congressional notification.--Not later than 60 days
after the date on which the Secretary finds a violation by a
covered entity of an agreement required under subparagraph
(C)(i), and after providing the covered entity with an
opportunity to provide information in response to that
finding, the Secretary shall provide to the appropriate
Committees of Congress--
``(i) a notification of the violation;
``(ii) a brief description of how the Secretary determined
the covered entity to be in violation; and
``(iii) a summary of any actions or planned actions by the
Secretary in response to the violation.
``(I) Regulations.--The Secretary may issue regulations
implementing this paragraph.''; and
(6) by adding at the end the following:
``(d) Sense of Congress.--It is the sense of Congress that,
in carrying out subsection (a), the Secretary should allocate
funds in a manner that--
``(1) strengthens the security and resilience of the
semiconductor supply chain, including by mitigating gaps and
vulnerabilities;
``(2) provides a supply of secure semiconductors relevant
for national security;
``(3) strengthens the leadership of the United States in
semiconductor technology;
``(4) grows the economy of the United States and supports
job creation in the United States;
``(5) bolsters the semiconductor and skilled technical
workforces in the United States;
``(6) promotes the inclusion of economically disadvantaged
individuals and small businesses; and
``(7) improves the resiliency of the semiconductor supply
chains of critical manufacturing industries.
``(e) Additional Assistance for Mature Technology Nodes.--
``(1) In general.--The Secretary shall establish within the
program established under subsection (a) an additional
program that provides Federal financial assistance to covered
entities to incentivize investment in facilities and
equipment in the United States for the fabrication, assembly,
testing, or packaging of semiconductors at mature technology
nodes.
``(2) Eligibility and requirements.--In order for an entity
to qualify to receive Federal financial assistance under this
subsection, the covered entity shall agree to--
``(A) submit an application under subsection (a)(2)(A);
``(B) meet the eligibility requirements under subsection
(a)(2)(B);
``(C)(i) provide equipment or materials for the
fabrication, assembly, testing, or packaging of
semiconductors at mature technology nodes in the United
States; or
``(ii) fabricate, assemble using packaging, or test
semiconductors at mature technology nodes in the United
States;
``(D) commit to using any Federal financial assistance
received under this section to increase the production of
semiconductors at mature technology nodes; and
``(E) be subject to the considerations described in
subsection (a)(2)(C).
``(3) Procedures.--In granting Federal financial assistance
to covered entities under this subsection, the Secretary may
use the procedures established under subsection (a).
``(4) Considerations.--In addition to the considerations
described in subsection (a)(2)(C), in granting Federal
financial assistance under this subsection, the Secretary may
consider whether a covered entity produces or supplies
equipment or materials used in the fabrication, assembly,
testing, or packaging of semiconductors at mature technology
nodes that are necessary to support a critical manufacturing
industry.
``(5) Priority.--In awarding Federal financial assistance
to covered entities under this subsection, the Secretary
shall give priority to covered entities that support the
resiliency of semiconductor supply chains for critical
manufacturing industries in the United States.
``(6) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary to carry out
this subsection $2,000,000,000, which shall remain available
until expended.
``(f) Construction Projects.--Section 602 of the Public
Works and Economic Development Act of 1965 (42 U.S.C. 3212)
shall apply to a construction project that receives financial
assistance from the Secretary under this section.
``(g) Loans and Loan Guarantees.--
``(1) In general.--Subject to the requirements of
subsection (a) and this subsection, the Secretary may make or
guarantee loans to covered entities as financial assistance
under this section.
``(2) Conditions.--The Secretary may select eligible
projects to receive loans or loan guarantees under this
subsection if the Secretary determines that--
``(A) the covered entity--
``(i) has a reasonable prospect of repaying the principal
and interest on the loan; and
``(ii) has met such other criteria as may be established
and published by the Secretary; and
``(B) the amount of the loan (when combined with amounts
available to the loan recipient from other sources) will be
sufficient to carry out the project.
``(3) Reasonable prospect of repayment.--The Secretary
shall base a determination of whether there is a reasonable
prospect of repayment of the principal and interest on a loan
under paragraph (2)(A)(i) on a comprehensive evaluation of
whether the covered entity has a reasonable prospect of
repaying the principal and interest, including, as
applicable, an evaluation of--
``(A) the strength of the contractual terms of the project
the covered entity plans to perform (if commercially
reasonably available);
``(B) the forecast of noncontractual cash flows supported
by market projections from

[[Page S3656]]

reputable sources, as determined by the Secretary;
``(C) cash sweeps and other structure enhancements;
``(D) the projected financial strength of the covered
entity--
``(i) at the time of loan close; and
``(ii) throughout the loan term after the project is
completed;
``(E) the financial strength of the investors and strategic
partners of the covered entity, if applicable;
``(F) other financial metrics and analyses that the private
lending community and nationally recognized credit rating
agencies rely on, as determined appropriate by the Secretary;
and
``(G) such other criteria the Secretary may determine
relevant.
``(4) Rates, terms, and repayments of loans.--A loan
provided under this subsection--
``(A) shall have an interest rate that does not exceed a
level that the Secretary determines appropriate, taking into
account, as of the date on which the loan is made, the cost
of funds to the Department of the Treasury for obligations of
comparable maturity; and
``(B) shall have a term of not more than 25 years.
``(5) Additional terms.--A loan or guarantee provided under
this subsection may include any other terms and conditions
that the Secretary determines to be appropriate.
``(6) Responsible lender.--No loan may be guaranteed under
this subsection, unless the Secretary determines that--
``(A) the lender is responsible; and
``(B) adequate provision is made for servicing the loan on
reasonable terms and protecting the financial interest of the
United States.
``(7) Advanced budget authority.--New loans may not be
obligated and new loan guarantees may not be committed to
under this subsection, unless appropriations of budget
authority to cover the costs of such loans and loan
guarantees are made in advance in accordance with section
504(b) of the Federal Credit Reform Act of 1990 (2 U.S.C.
661c(b)).
``(8) Continued oversight.--The loan agreement for a loan
guaranteed under this subsection shall provide that no
provision of the loan agreement may be amended of waived
without the consent of the Secretary.
``(h) Oversight.--Not later than 4 years after disbursement
of the first financial award under subsection (a), the
Inspector General of the Department of Commerce shall audit
the program under this section to assess--
``(1) whether the eligibility requirements for covered
entities receiving financial assistance under the program are
met;
``(2) whether eligible entities use the financial
assistance received under the program in accordance with the
requirements of this section;
``(3) whether the covered entities receiving financial
assistance under this program have carried out the
commitments made to worker and community investment under
subsection (a)(2)(B)(ii)(II) by the target date for
completion set by the Secretary under subsection (a)(5)(A);
``(4) whether the required agreement entered into by
covered entities and the Secretary under subsection
(a)(6)(C)(i), including the notification process, has been
carried out to provide covered entities sufficient guidance
about a violation of the required agreement; and
``(5) whether the Secretary has provided timely
Congressional notification about violations of the required
agreement under subsection (a)(6)(C)(i), including the
required information on how the Secretary reached a
determination of whether a covered entity was in violation
under subsection (a)(6)(E).
``(i) Prohibition on Use of Funds.--No funds made available
under this section may be used to construct, modify, or
improve a facility outside of the United States.''.
(c) Advanced Microelectronics Research and Development.--
Section 9906 of the William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal Year 2021 (15 U.S.C.
4656) is amended--
(1) in subsection (a)(3)(A)(ii)--
(A) in subclause (II), by inserting ``, including for
technologies based on organic and inorganic materials'' after
``components''; and
(B) in subclause (V), by striking ``and supply chain
integrity'' and inserting ``supply chain integrity, and
workforce development'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) by inserting ``and grow the domestic semiconductor
workforce'' after ``prototyping of advanced semiconductor
technology''; and
(ii) by adding at the end the following: ``The Secretary
may make financial assistance awards, including construction
awards, in support of the national semiconductor technology
center.''; and
(B) in paragraph (2)--
(i) in subparagraph (B), by inserting ``and capitalize''
before ``an investment fund''; and
(ii) by striking subparagraph (C) and inserting the
following:
``(C) To work with the Secretary of Labor, the Director of
the National Science Foundation, the Secretary of Energy, the
private sector, institutions of higher education, and
workforce training entities to incentivize and expand
geographically diverse participation in graduate,
undergraduate, and community college programs relevant to
microelectronics, including through--
``(i) the development and dissemination of curricula and
research training experiences; and
``(ii) the development of workforce training programs and
apprenticeships in advanced microelectronic design, research,
fabrication, and packaging capabilities.'';
(3) in subsection (d)--
(A) by striking ``the Manufacturing USA institute'' and
inserting ``a Manufacturing USA institute''; and
(B) by adding at the end the following: ``The Director may
make financial assistance awards, including construction
awards, in support of the National Advanced Packaging
Manufacturing Program.'';
(4) in subsection (f)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``a Manufacturing USA Institute'' and
inserting ``not more than 3 Manufacturing USA Institutes'';
(ii) by striking ``is focused on semiconductor
manufacturing.'' and inserting ``are focused on semiconductor
manufacturing. The Secretary of Commerce may award financial
assistance to any Manufacturing USA Institute for work
relating to semiconductor manufacturing.''; and
(iii) by striking ``Such institute may emphasize'' and
inserting ``Such institutes may emphasize''; and
(5) by adding at the end the following:
``(h) Construction Projects.--Section 602 of the Public
Works and Economic Development Act of 1965 (42 U.S.C. 3212)
shall apply to a construction project that receives financial
assistance under this section.''.
(d) Additional Authorities.--Division H of title XCIX of
the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (15 U.S.C. 4651 et
seq.) is amended by adding at the end the following:

``SEC. 9909. ADDITIONAL AUTHORITIES.

``(a) In General.--In carrying out the responsibilities of
the Department of Commerce under this division, the Secretary
may--
``(1) enter into agreements, including contracts, grants
and cooperative agreements, and other transactions as may be
necessary and on such terms as the Secretary considers
appropriate;
``(2) make advance payments under agreements and other
transactions authorized under paragraph (1) without regard to
section 3324 of title 31, United States Code;
``(3) require a person or other entity to make payments to
the Department of Commerce upon application and as a
condition for receiving support through an award of
assistance or other transaction;
``(4) procure temporary and intermittent services of
experts and consultants in accordance with section 3109 of
title 5, United States Code;
``(5) notwithstanding section 3104 of title 5, United
States Code, or the provisions of any other law relating to
the appointment, number, classification, or compensation of
employees, make appointments of scientific, engineering, and
professional personnel, and fix the basic pay of such
personnel at a rate to be determined by the Secretary at
rates not in excess of the highest total annual compensation
payable at the rate determined under section 104 of title 3,
United States Code, except that the Secretary shall appoint
not more than 25 personnel under this paragraph;
``(6) with the consent of another Federal agency, enter
into an agreement with that Federal agency to use, with or
without reimbursement, any service, equipment, personnel, or
facility of that Federal agency; and
``(7) establish such rules, regulations, and procedures as
the Secretary considers appropriate.
``(b) Requirement.--Any funds received from a payment made
by a person or entity pursuant to subsection (a)(3) shall be
credited to and merged with the account from which support to
the person or entity was made''.
(e) Conforming Amendment.--The table of contents for
division H of title XCIX of the William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021
(Public Law 116-283) is amended by adding after the item
relating to section 9908 the following:

``9909. Additional authorities.''.

SEC. 104. OPPORTUNITY AND INCLUSION.

(a) Establishment.--Not later than 180 days after the date
of enactment of this Act, the Secretary of Commerce shall
establish activities in the Department of Commerce, within
the program established under section 9902 of the William M.
(Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (15 U.S.C. 4652), to carry out this section
using funds appropriated under this Act.
(b) In General.--The Secretary of Commerce shall assign
personnel to lead and support the activities carried out
under this section, including coordination with other
workforce development activities of the Department of
Commerce or of Federal agencies, as defined in section 551 of
title 5, United States Code, as appropriate.
(c) Activities.--Personnel assigned by the Secretary to
carry out the activities under this section shall--
(1) assess the eligibility of a covered entity, as defined
in section 9901 of the William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal Year 2021 (15 U.S.C.
4651), for financial assistance for a

[[Page S3657]]

project with respect to the requirements under subclauses
(II) and (III) of section 9902(a)(2)(B)(ii) of the William M.
(Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (15 U.S.C. 4652(a)(2)(B)(ii)(II) and (III));
(2) ensure that each covered entity, as defined in section
9901 of the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (15 U.S.C. 4651),that
is awarded financial assistance under section 9902 of that
Act (15 U.S.C. 4652) is carrying out the commitments of the
covered entity to economically disadvantaged individuals as
described in the application of the covered entity under that
section by the target dates for completion established by the
Secretary of Commerce under subsection(a)(5)(A) of that
section; and
(3) increase participation of and outreach to economically
disadvantaged individuals, minority-owned businesses,
veteran-owned businesses, and women-owned businesses, as
defined by the Secretary of Commerce, respectively, in the
geographic area of a project under section 9902 of the
William M. (Mac) Thornberry National Defense Authorization
Act for Fiscal Year 2021 (15 U.S.C. 4652) and serve as a
resource for those individuals, businesses, and covered
entities.
(d) Staff.--The activities under this section shall be
staffed at the appropriate levels to carry out the functions
and responsibilities under this section until 95 percent of
the amounts of funds made available for the program
established under section 9902 of the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (15 U.S.C. 4652) have been expended.
(e) Report.--Beginning on the date that is 1 year after the
date on which the Secretary of Commerce establishes the
activities described in subsection (c), the Secretary of
Commerce shall submit to the appropriate committees of
Congress, as defined in section 9901(1) of the William M.
(Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (15 U.S.C. 4651), and make publicly
available on the website of the Department of Commerce an
annual report regarding the actions taken by the Department
of Commerce under this section.

SEC. 105. ADDITIONAL GAO REPORTING REQUIREMENTS.

(a) NDAA.--Section 9902(c) of William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021 (15
U.S.C. 4652(c)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B)--
(i) in clause (i), by striking ``; and'' and inserting a
semicolon; and
(ii) by adding at the end the following:
``(iii) the Federal Government could take specific actions
to address shortages in the semiconductor supply chain,
including--

``(I) demand-side incentives, including incentives related
to the information and communications technology supply
chain; and
``(II) additional incentives, at national and global
scales, to accelerate utilization of leading-edge
semiconductor nodes to address shortages in mature
semiconductor nodes; and''; and

(B) in subparagraph (C)--
(i) in clause (iii), by striking ``; and'' and inserting a
semicolon; and
(ii) by inserting after clause (iv) the following:
``(v) how projects are supporting the semiconductor needs
of critical infrastructure industries in the United States,
including those industries designated by the Cybersecurity
and Infrastructure Security Agency as essential
infrastructure industries; and''; and
(2) by inserting after paragraph (1)(C)(iv) the following:
``(D) drawing on data made available by the Department of
Labor or other sources, to the extent practicable, an
analysis of--
``(i) semiconductor industry data regarding businesses that
are--

``(I) majority owned and controlled by minority
individuals;
``(II) majority owned and controlled by women; or
``(III) majority owned and controlled by both women and
minority individuals;

``(ii) the number and amount of contracts and subcontracts
awarded by each covered entity using funds made available
under subsection (a) disaggregated by recipients of each such
contract or subcontracts that are majority owned and
controlled by minority individuals and majority owned and
controlled by women; and
``(iii) aggregated workforce data, including data by race
or ethnicity, sex, and job categories.''.
(b) Department of Defense.--Section 9202(a)(1)(G)(ii)(I) of
the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (47 U.S.C.
906(a)(1)(G)(ii)(I)) is amended by inserting ``(including
whether recipients are majority owned and controlled by
minority individuals and majority owned and controlled by
women)'' after ``to whom''.

SEC. 106. APPROPRIATIONS FOR WIRELESS SUPPLY CHAIN
INNOVATION.

(a) Direct Appropriations.--In addition to amounts
otherwise available for such purposes, there is appropriated
to the Public Wireless Supply Chain Innovation Fund
established under section 9202(a)(1) of the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (15 U.S.C. 4652(a)(1)), out of amounts in the Treasury
not otherwise appropriated--
(1) $150,000,000 for fiscal year 2022, to remain available
until September 30, 2031; and
(2) $1,350,000,000 for fiscal year 2023, to remain
available until September 30, 2032.
(b) Use of Funds, Administration, and Oversight.--Of the
amounts made available under subsection (a)--
(1) not more than 5 percent of the amounts allocated
pursuant to subsection (c) in a given fiscal year may be used
by the Assistant Secretary of Commerce for Communications and
Information to administer the programs funded from the Public
Wireless Supply Chain Innovation Fund; and
(2) not less than $2,000,000 per fiscal year shall be
transferred to the Office of Inspector General of the
Department of Commerce for oversight related to activities
conducted using amounts provided under this section.
(c) Allocation Authority.--
(1) Submission of cost estimates.--The President shall
submit to Congress detailed account, program, and project
allocations of the amount recommended for allocation in a
fiscal year from amounts made available under subsection
(a)--
(A) for fiscal years 2022 and 2023, not later than 60 days
after the date of enactment of this Act; and
(B) for each subsequent fiscal year through 2032, as part
of the annual budget submission of the President under
section 1105(a) of title 31, United States Code.
(2) Alternate allocation.--
(A) In general.--The Committees on Appropriations of the
House of Representatives and the Senate may provide for
alternate allocation of amounts recommended for allocation in
a given fiscal year from amounts made available under
subsection (a), including by account, program, and project.
(B) Allocation by president.--
(i) No alternate allocations.--If Congress has not enacted
legislation establishing alternate allocations, including by
account, program, and project, by the date on which the Act
making full-year appropriations for the Departments of
Commerce and Justice, Science, and Related Agencies for the
applicable fiscal year is enacted into law, only then shall
amounts recommended for allocation for that fiscal year from
amounts made available under subsection (a) be allocated by
the President or apportioned or allotted by account, program,
and project pursuant to title 31, United States Code.
(ii) Insufficient alternate allocation.--If Congress enacts
legislation establishing alternate allocations, including by
account, program, and project, for amounts recommended for
allocation in a given fiscal year from amounts made available
under subsection (a) that are less than the full amount
recommended for allocation for that fiscal year, the
difference between the amount recommended for allocation and
the alternate allocation shall be allocated by the President
and apportioned and allotted by account, program, and project
pursuant to title 31, United States Code.
(d) Sequestration.--Section 255(g)(1)(A) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
905(g)(1)(A)) is amended by inserting after ``Postal Service
Fund (18-4020-0-3-372).'' the following:
``Public Wireless Supply Chain Innovation Fund.''.
(e) Budgetary Effects.--
(1) Statutory paygo scorecards.--The budgetary effects of
this section shall not be entered on either PAYGO scorecard
maintained pursuant to section 4(d) of the Statutory Pay-As-
You-Go Act of 2010.
(2) Senate paygo scorecards.--The budgetary effects of this
section shall not be entered on any PAYGO scorecard
maintained for purposes of section 4106 of H. Con. Res. 71
(115th Congress).
(3) Classification of budgetary effects.--Notwithstanding
Rule 3 of the Budget Scorekeeping Guidelines set forth in the
joint explanatory statement of the committee of conference
accompanying Conference Report 105-217 and section 250(c)(8)
of the Balanced Budget and Emergency Deficit Control Act of
1985, the budgetary effects of this section shall not be
estimated--
(A) for purposes of section 251 of such Act;
(B) for purposes of an allocation to the Committee on
Appropriations pursuant to section 302(a) of the
Congressional Budget Act of 1974; and
(C) for purposes of paragraph (4)(C) of section 3 of the
Statutory Pay-As-You-Go Act of 2010 as being included in an
appropriation Act.

SEC. 107. ADVANCED MANUFACTURING INVESTMENT CREDIT.

(a) In General.--Subpart E of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after section 48C the following new section:

``SEC. 48D. ADVANCED MANUFACTURING INVESTMENT CREDIT.

``(a) Establishment of Credit.--For purposes of section 46,
the advanced manufacturing investment credit for any taxable
year is an amount equal to 25 percent of the qualified
investment for such taxable year with respect to any advanced
manufacturing facility of an eligible taxpayer.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment with respect to any advanced
manufacturing facility for any taxable year is the basis of
any qualified property placed in service by the taxpayer
during such taxable year which is part of an advanced
manufacturing facility.
``(2) Qualified property.--
``(A) In general.--For purposes of this subsection, the
term `qualified property' means property--

[[Page S3658]]

``(i) which is tangible property,
``(ii) with respect to which depreciation (or amortization
in lieu of depreciation) is allowable,
``(iii) which is--

``(I) constructed, reconstructed, or erected by the
taxpayer, or
``(II) acquired by the taxpayer if the original use of such
property commences with the taxpayer, and

``(iv) which is integral to the operation of the advanced
manufacturing facility.
``(B) Buildings and structural components.--
``(i) In general.--The term `qualified property' includes
any building or its structural components which otherwise
satisfy the requirements under subparagraph (A).
``(ii) Exception.--Clause (i) shall not apply with respect
to a building or portion of a building used for offices,
administrative services, or other functions unrelated to
manufacturing.
``(3) Advanced manufacturing facility.--For purposes of
this section, the term `advanced manufacturing facility'
means a facility for which the primary purpose is the
manufacturing of semiconductors or semiconductor
manufacturing equipment.
``(4) Coordination with rehabilitation credit.--The
qualified investment with respect to any advanced
manufacturing facility for any taxable year shall not include
that portion of the basis of any property which is
attributable to qualified rehabilitation expenditures (as
defined in section 47(c)(2)).
``(5) Certain progress expenditure rules made applicable.--
Rules similar to the rules of subsections (c)(4) and (d) of
section 46 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of subsection (a).
``(c) Eligible Taxpayer.--For purposes of this section, the
term `eligible taxpayer' means any taxpayer which--
``(1) is not a foreign entity of concern (as defined in
section 9901(6) of the William M. (Mac) Thornberry National
Defense Authorization Act for Fiscal Year 2021), and
``(2) has not made an applicable transaction (as defined in
section 50(a)) during the taxable year.
``(d) Elective Payment.--
``(1) In general.--Except as otherwise provided in
paragraph (2)(A), in the case of a taxpayer making an
election (at such time and in such manner as the Secretary
may provide) under this subsection with respect to the credit
determined under subsection (a) with respect to such
taxpayer, such taxpayer shall be treated as making a payment
against the tax imposed by subtitle A (for the taxable year
with respect to which such credit was determined) equal to
the amount of such credit.
``(2) Special rules.--For purposes of this subsection--
``(A) Application to partnerships and s corporations.--
``(i) In general.--In the case of the credit determined
under subsection (a) with respect to any property held
directly by a partnership or S corporation, any election
under paragraph (1) shall be made by such partnership or S
corporation. If such partnership or S corporation makes an
election under such paragraph (in such manner as the
Secretary may provide) with respect to such credit--

``(I) the Secretary shall make a payment to such
partnership or S corporation equal to the amount of such
credit,
``(II) paragraph (3) shall be applied with respect to such
credit before determining any partner's distributive share,
or shareholder's pro rata share, of such credit,
``(III) any amount with respect to which the election in
paragraph (1) is made shall be treated as tax exempt income
for purposes of sections 705 and 1366, and
``(IV) a partner's distributive share of such tax exempt
income shall be based on such partner's distributive share of
the otherwise applicable credit for each taxable year.

``(ii) Coordination with application at partner or
shareholder level.--In the case of any property held directly
by a partnership or S corporation, no election by any partner
or shareholder shall be allowed under paragraph (1) with
respect to any credit determined under subsection (a) with
respect to such property.
``(B) Elections.--Any election under paragraph (1) shall be
made not later than the due date (including extensions of
time) for the return of tax for the taxable year for which
the election is made, but in no event earlier than 270 days
after the date of the enactment of this section. Any such
election, once made, shall be irrevocable. Except as
otherwise provided in this subparagraph, any election under
paragraph (1) shall apply with respect to any credit for the
taxable year for which the election is made.
``(C) Timing.--The payment described in paragraph (1) shall
be treated as made on the later of the due date (determined
without regard to extensions) of the return of tax for the
taxable year or the date on which such return is filed.
``(D) Treatment of payments to partnerships and s
corporations.--For purposes of section 1324 of title 31,
United States Code, the payments under subparagraph (A)(i)(I)
shall be treated in the same manner as a refund due from a
credit provision referred to in subsection (b)(2) of such
section.
``(E) Additional information.--As a condition of, and prior
to, any amount being treated as a payment which is made by
the taxpayer under paragraph (1) or any payment being made
pursuant to subparagraph (A), the Secretary may require such
information or registration as the Secretary deems necessary
or appropriate for purposes of preventing duplication, fraud,
improper payments, or excessive payments under this section.
``(F) Excessive payment.--
``(i) In general.--In the case of any amount treated as a
payment which is made by the taxpayer under paragraph (1), or
any payment made pursuant to subparagraph (A), which the
Secretary determines constitutes an excessive payment, the
tax imposed on such taxpayer by chapter 1 for the taxable
year in which such determination is made shall be increased
by an amount equal to the sum of--

``(I) the amount of such excessive payment, plus
``(II) an amount equal to 20 percent of such excessive
payment.

``(ii) Reasonable cause.--Clause (i)(II) shall not apply if
the taxpayer demonstrates to the satisfaction of the
Secretary that the excessive payment resulted from reasonable
cause.
``(iii) Excessive payment defined.--For purposes of this
subparagraph, the term `excessive payment' means, with
respect to property for which an election is made under this
subsection for any taxable year, an amount equal to the
excess of--

``(I) the amount treated as a payment which is made by the
taxpayer under paragraph (1), or the amount of the payment
made pursuant to subparagraph (A), with respect to such
property for such taxable year, over
``(II) the amount of the credit which, without application
of this subsection, would be otherwise allowable (determined
without regard to section 38(c)) under subsection (a) with
respect to such property for such taxable year.

``(3) Denial of double benefit.--In the case of a taxpayer
making an election under this subsection with respect to the
credit determined under subsection (a), such credit shall be
reduced to zero and shall, for any other purposes under this
title, be deemed to have been allowed to the taxpayer for
such taxable year.
``(4) Mirror code possessions.--In the case of any
possession of the United States with a mirror code tax system
(as defined in section 24(k)), this subsection shall not be
treated as part of the income tax laws of the United States
for purposes of determining the income tax law of such
possession unless such possession elects to have this
subsection be so treated.
``(5) Basis reduction and recapture.--Rules similar to the
rules of subsections (a) and (c) of section 50 shall apply
with respect to--
``(A) any amount treated as a payment which is made by the
taxpayer under paragraph (1), and
``(B) any payment made pursuant to paragraph (2)(A).
``(6) Regulations.--The Secretary shall issue such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this subsection,
including--
``(A) regulations or other guidance providing rules for
determining a partner's distributive share of the tax exempt
income described in paragraph (2)(A)(i)(III), and
``(B) guidance to ensure that the amount of the payment or
deemed payment made under this subsection is commensurate
with the amount of the credit that would be otherwise
allowable (determined without regard to section 38(c)).
``(e) Termination of Credit.--The credit allowed under this
section shall not apply to property the construction of which
begins after December 31, 2026.''.
(b) Recapture in Connection With Certain Expansions.--
(1) In general.--Section 50(a) of the Internal Revenue Code
of 1986 is amended redesignating paragraphs (3) through (5)
as paragraphs (4) through (6), respectively, and by inserting
after paragraph (2) the following new paragraph:
``(3) Certain expansions in connection with advanced
manufacturing facilities.--
``(A) In general.--If there is a an applicable transaction
by an applicable taxpayer before the close of the 10-year
period beginning on the date such taxpayer placed in service
investment credit property which is eligible for the advanced
manufacturing investment credit under section 48D(a), then
the tax under this chapter for the taxable year in which such
transaction occurs shall be increased by 100 percent of the
aggregate decrease in the credits allowed under section 38
for all prior taxable years which would have resulted solely
from reducing to zero any credit determined under section 46
which is attributable to the advanced manufacturing
investment credit under section 48D(a) with respect to such
property.
``(B) Exception.--Subparagraph (A) shall not apply if the
applicable taxpayer demonstrates to the satisfaction of the
Secretary that the applicable transaction has been ceased or
abandoned within 45 days of a determination and notice by the
Secretary.
``(C) Regulations and guidance.--The Secretary shall issue
such regulations or other guidance as the Secretary
determines necessary or appropriate to carry out the purposes
of this paragraph, including regulations or other guidance
which provide for requirements for recordkeeping or
information reporting for purposes of administering the
requirements of this paragraph.''.

[[Page S3659]]

(2) Applicable transaction; applicable taxpayer.--Section
50(a)(6) of the Internal Revenue Code of 1986, as
redesignated by paragraph (1), is amended adding at the end
the following new subparagraphs:
``(D) Applicable transaction.--For purposes of this
subsection, the term `applicable transaction' means, with
respect to any applicable taxpayer, any transaction (as
determined by the Secretary, in coordination with the
Secretary of Commerce and the Secretary of Defense) involving
the expansion of semiconductor manufacturing capacity of such
applicable taxpayer in the People's Republic of China or a
foreign country of concern (as defined in section 9901(7) of
the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021).
______