semiconductor manufacturing
(6) Expansion clawback (A) Definition of legacy semiconductor (i) In general In this paragraph, the term “legacy semiconductor”— (I) includes— (aa) a semiconductor technology that is of the 28 nanometer generation or older for logic; (bb) with respect to memory technology, analog technology, packaging technology, and any other relevant technology, any legacy generation of semiconductor technology relative to the generation described in item (aa), as determined by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence; and (cc) any additional semiconductor technology identified by the Secretary in a public notice issued under clause (ii); and (II) does not include a semiconductor that is critical to national security, as determined by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence. (ii) Updates Not later than 2 years after August 9, 2022 , and not less frequently than once every 2 years thereafter for the 8-year period after the last award under this section is made, the Secretary, after public notice and an opportunity for comment and if applicable and necessary, shall issue a public notice identifying any additional semiconductor technology included in the meaning of the term “legacy semiconductor” under clause (i). (iii) Functions of the Secretary The functions of the Secretary under this paragraph shall not be subject to sections 551, 553 through 559, and 701 through 706 of title 5. (iv) Consultation In carrying out clause (ii), the Secretary shall consult with the Director of National Intelligence and the Secretary of Defense. (v) Considerations In carrying out clause (ii), the Secretary shall consider— (I) state-of-the-art semiconductor technologies in the United States and internationally, including in foreign countries of concern; and (II) consistency with export controls relating to semiconductors. (B) Definition of semiconductor manufacturing In this paragraph, the term “semiconductor manufacturing”— (i) has the meaning given the term by the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence; and (ii) includes front-end semiconductor fabrication. (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, subject to clause (ii), the covered entity may not engage in any significant transaction, as defined in the agreement, involving the material expansion of semiconductor manufacturing capacity in the People’s Republic of China or any other foreign country of concern. (ii) Exceptions The prohibition in the agreement required under clause (i) shall not apply to— (I) existing facilities or equipment of a covered entity for manufacturing legacy semiconductors; or (II) significant transactions involving the material expansion of semiconductor manufacturing capacity that— (aa) produces legacy semiconductors; and (bb) predominately serves the market of a foreign country of concern. (iii) 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 title 26 , without regard to section 1504(b)(3) of title 26 . (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 significant transactions of the covered entity involving the material 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 significant 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 significant 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 significant 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 Subject to clause (iv), 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. (iv) Mitigation If the Secretary, in consultation with the Secretary of Defense and the Director of National Intelligence, determines that a covered entity planning a significant transaction that would violate the agreement required under subparagraph (C)(i) could take measures in connection with the transaction to mitigate any risk to national security, the Secretary— (I) may negotiate, enter into, and enforce any agreement or condition for the mitigation; and, (II) waive the recovery requirement under clause (iii). (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 ; 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.