Labor Provisions Removed from Compromise Version of China Competition Bill

The “Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act” is a compromise bill which includes provisions from the House-passed America COMPETES Act (H.R. 4521) and the Senate’s U.S. Innovation and Competition Act (USICA) (S. 1260), which have been under negotiation by a bicameral conference committee since May. The bill passed the Senate on July 27 by a bipartisan vote of 64–33 and the House on July 28 by a vote of 243–187 (24 Republicans joined Democrats in supporting the bill) and President Biden is expected to sign it.

Pro-labor provisions removed. The pro-labor provisions that the Association previously reported on that were included in the House-passed America COMPETES Act, were removed from the finally passed CHIPS Act. The Association joined the larger employer community to successfully advocate against the inclusion of the labor provisions in a final bill.

Worker training funds include prevailing wage requirements. The CHIPS Act includes $400 million allocated annually over five years, starting in 2023, to the Defense Department for microelectronic research and development. Some of these funds would be dedicated to workforce training. Another $200 million would go to a separate workforce and education fund. In addition, the bill includes some requirements for employers to pay local prevailing wages on construction projects receiving grants to aid semiconductor development.