S.Amdt. 2366

SA 2366. Mr. KELLY (for himself and Mrs. Blackburn) submitted an
amendment intended to be proposed by him to the bill S. 4638, to
authorize appropriations for fiscal year 2025 for military activities
of the Department of Defense, for military construction, and for
defense activities of the Department of Energy, to prescribe military
personnel strengths for such fiscal year, and for other purposes; which
was ordered to lie on the table; as follows:

At the end of subtitle H of title X, add the following:

SEC. 1095. CHIP EQUIP ACT.

(a) Short Title.--This section may be cited as the ``The
Chip Equipment Quality, Usefulness, and Integrity Protection
Act of 2024'' or the ``Chip EQUIP Act''.
(b) Purchases of Semiconductor Manufacturing Equipment.--
(1) Definitions.--Section 9901 of the William M. (Mac)
Thornberry National Defense Authorization Act for Fiscal Year
2021 (15 U.S.C. 4651) is amended by inserting after paragraph
(13) the following:
``(14) The term `completed, fully assembled' means the
state in which all (or substantially all) necessary parts,
chambers, subsystems, and subcomponents have been put
together, resulting in a ready-to-use or ready-to-install
item to be directly purchased from an entity.
``(15) The term `ineligible equipment'--
``(A) means completed, fully assembled semiconductor
manufacturing equipment that is manufactured or assembled by
a foreign entity of concern or subsidiary of a foreign entity
of concern and used in the fabrication, assembly, testing,
advanced packaging, production, or research and development
of semiconductors;
``(B) includes--
``(i) deposition equipment;
``(ii) etching equipment;
``(iii) lithography equipment;
``(iv) inspection and measuring equipment;
``(v) wafer slicing equipment;
``(vi) wafer dicing equipment;
``(vii) wire bonders;
``(viii) ion implantation equipment;
``(ix) chemical mechanical polishing; and
``(x) diffusion or oxidation furnaces; and
``(C) does not include any part, chamber, subsystem, or
subcomponent that enables or is incorporated into such
equipment.''.
(2) Ineligible use of funds.--Section 9902 of the William
M. (Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (15 U.S.C. 4652) is amended by adding at the
end the following:
``(j) Ineligible Use of Funds.--
``(1) In general.--Subject to paragraph (2), the Secretary
shall include in the terms of each agreement with a covered
entity for the award of Federal financial assistance under
this section prohibitions with respect to a project relating
to the procurement, installation, or use of ineligible
equipment, to be effective for the duration of the agreement.
``(2) Waiver.--The Secretary may waive the prohibitions
described in paragraph (1) if--
``(A) the ineligible equipment to be purchased by the
applicable covered entity is not produced in the United
States or an allied or partner country in sufficient and
reasonably available quantities or of a satisfactory quality
to support established or expected production capabilities;
or

[[Page S4708]]

``(B)(i) the use of the ineligible equipment complies with
the requirements set forth in the Export Administration
Regulations, as defined in section 1742 of the Export Control
Reform Act of 2018 (50 U.S.C. 4801); and
``(ii) the Secretary, in consultation with the Director of
National Intelligence or the Secretary of Defense, determines
the waiver is in the national security interest of the United
States.
``(3) Foreign entities of concern.--Nothing in this
subsection shall be construed to waive the application of
section 9907.''.
______