Transcripts For CSPAN Commerce 20240703

Live coverage here on cspan. Needless to say, our committee has been working very diligently on a lot of transformational policy. While were waiting for our colleague here, i think ill thank senator wicker again for his work on the chips and p science act. I think people may not remember but this committee i dont know how many amendments we processed. Sen. Cantwell ity know it was in the hundreds. It might have been in the 300s. But i definitely believe that that kind of regular order process was good for the institutioned good for institution, good for the debate about science, and hopefully people will continue in todays hearing to understand that and understand much of the debate that maybe wasnt 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, well go ahead and get started and when my colleague gets here, hopefully hell be here soon, we will let him make his opening statement. But welcome, secretary raimondo. And director panchanathan. Thank you for being here with us today. I also want to mention that apparently there is a fema Emergency Alert test thats going to happen today so if everybody in the room gets a big alert message, thats what thats about. Not to be concerned about it. But Everybody Knows that its 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 americas competitiveness that we need to innovate in the United States. 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. Weve 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 governments 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 well have a chance to ask the secretary about those proposals, building resiliency and longlasting Semiconductor Ecosystem in the United States. Since we have the chance to discuss this earlier, im pretty sure were going to hear today about how were 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 doacht for that development for that, that our d. O. D. Stature is going to continue to be on the cutting edge of chips and i think youre going to tell us that the diversity of applications, the robustness of it, means that that ecosystem that we are trying to restore and grow is alive and well. Weve also seen n. S. Fmpt begin to roll n. S. F. Begin to roll out innovation engine with money 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 both in the spreading of the amount of funding and in diversifying a work force opportunity across the United States. For example, in the state of washington, a spokane company won an award to advance energy 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 committees two previous attempts at competitive bills fell short because the funding was not realized. One, because we faced an economic down turn and the other just in our first, very first effort on competitiveness, also didnt 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 derisks the supply chain and makes 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. Thats why the advancement in hearing where we are with the applications is so important. Second, we need a resilient supply chain that with stand disruptions like we saw in the past, either geopolitical tension, natural disasters, global panchanathans, whatever pandemic, whatever. We need a more dependent supply chain. And a work force that is well skilled and technical to the tides 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 Train and Work Force Training and work force advancement and some on the science side through n. S. Fmpt. But a lot n. S. F. But a lot more needs to happen. The United States, the jobs of tomorrow are here today, but the skill level of the work force to do them is not. And so the more that we can take advantage of the job creation thats 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 affecting the u. S. Economy. Today u. S. Manufacturers, only 12 of the worlds semiconductors, compared to where we were in the 1990s at 30 . 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 were going to hear both from the private Sector Investment thats already been made and the robust response to the programs. Were going to hear that the investment wants to be in the United States. So, i think we cant emphasize enough how important it was to bring this manufacturing back, consumers saw car prices raise as much as 30 . Manufacturers werent able to get semiconductors, werent 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. Ill have some questions about that in the question and answer period. But the Semiconductor Industry today is facing a gap of 67,000 people by 2030. Thats just semiconductors. So i know we in my state, as it relates to just 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 Program and in the stem apprentices and work force for tomorrow to realize all this investment that is now being made in the United States of america. So welcome to our witnesses. Ill turn it over to my colleague, senator cruz, for his opening statement. Sen. 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 couldnt get enough of them, most of us probably didnt 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 theyre also in just about every [fema alarms blaring] it works. Sen. Cantwell yep. I think your time is up, senator. [laughter] sen. Cruz we have an emergency in semiconductors. [laughter] thats a first. I believe i think our first witness is a semiconductor. You done . [laughter] no. [laughter] [fema alarming blaring] you have to shut it off. Yeah, you have to shut it off. [fema alarm blaring] [laughter] sen. Cruz as i was saying. [fema alarm blaring] [laughter] sen. Cruz with great trepidation, i observe that just about every advanced weapons system in our military rely on semiconductors and most of them are not made in the United States. Recognizing this, there was a fleury of legislative activity to onshore and nearshore Semiconductor Manufacturing last congress. Culminating in the chips and science act. Parts of this law, like the fabs act, which i cosponsored 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 rief with political interference and waste and even at best it is often done poorly and inefficiently. Thats why i ultimately voted against the by, despite it bill, despite it containing a number of things i strongly support. Were 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 isnt just asking if youve 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. You have 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 theyve nonetheless been attached by the Biden Administration to try to enact by regulation things that they dont 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 teamed 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 mange concern has been major concern has been the onerous environmental requirements under nepa and the potential for this environmental process law to drive up Compliance Costs for manufactures and significantly slow new construction. Thats why senator mark kelly and i led a bipartisan amendment to the National Defense authorization act to exclude from nepa the overwhelming majority of chipsfunded semiconductor projects. Secretary ray moppedo, i want to 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 americas 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 boasted 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 were proud to help lead Americas Semiconductor renaissance and i would encourage the Commerce Department to look to the model in texas and to see how to make this broader effort more successful. Finally, its worth noting that the other half of the chips and science act, director panchanathan, the n. S. F. Does substantial work advancing basic science that helps expand our scientific knowledge. And thats important work. But im deeply concerned over what appears to be the increasing politicization of n. S. F. Funded science and the feedback loop and the scientific stagnation that is creating. Im especially disturbed by recent reports that n. S. F. Has to the tunes of tens of millions of dollars, been funding projects on how to counter, quote, populous narratives and socalled, quote, mis and disinformation, which seements like little more than fund seems like little more than fundk the pseudo science of censorship. I look forward to hearing from both of our Witnesses Today on how theyre implementing this very important law. The taxpayers put a lot of skin in this game and we all owe it to them to get it right. Sen. Cantwell thank you. Well start now with secretary raimondo. Welcome. I cant imagine what a busy time it is for you and the organization thats implementing this act. We appreciate your time being here today. Sec. 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 were implementing this historic legislation and of course im so pleased to be here with panch, a fantastic n. S. F. Director. I do want to begin by taking just a second to share my condolences with senator feinsteins 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 and 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, all of the 500 statements of interest, weve received over 100 applications or preapplications. In the last two weeks, we finalized and put out the guardrails to protect u. S. Government investments and bolster our National Security. Were also developing our chips r. N. D. Program to meet the unique r d program to meet the unique challenges to build a sustained r d pipeline, the standard of this is the Semiconductor Technology center or the nstc which we expect to launch this fall. So a great deal of activity since about a year ago that the bill was passed. And of course all of that research and Development Work were doing in collaboration with the n. S. F. The chips and science act also authorized two new programs, the Tech Hub Initiative and recompete, which we are administering through the e. D. D. A. E. D. Ampt. Weve received e. D. A. Weve received 400 applications for the tech hub grants. Its unbelievable. Ive never seen anything more oversubscribed. Later this fall, e. D. L. Will make e. D. A. Will make the announcements of the tech hub designations and then also invite an opportunity for additional funding for implementation. Similarly, were vifnting 2 investing 200 million in the recompete pilot program, to spur Economic Activity in geographically diverse and economicly disdressed communities complik less Distressed Community economicly disdressed communities across the country. We are making historically economically distressed communities across the country. If were successful, when were 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 welltrained, wellpaid American Workers, and packaged in the United States. So its a tremendous piece of work that we have, great progress since the bill has passed. Of course well 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 that did not happen. It goes without saying, china, russia, iran arent shutting down. The work were 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 were on in implementing this very important work. So with that, i will open for questions or turn it over to panch. Sen. Cantwell thank you. Director panchanathan, thank you for being here. Mr. Panchanathan thank you so much. Thank you, members of the Commerce Committee. Its great to be with all of you today. Particularly with a colleague, 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 dianne feinstein. Not only was senator feinstein an incredible leader and trailblazer, she was also a champion for science. Ins is grateful for her service to the nation. Thank you for the opportunity to discuss the National Science foundations implementation of the chips and science act and how the agencys 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, n. S. F. Has been critical to powering our economy, transforming our quality of life and securing our National Defense. Many of the technological advances benefiting the nation today such as Artificial Intelligence, quantum information science, and biotechnology, are rooted in sustained n. S. F. Investments over many decades. However, we currently face intense global competition in the race to double up these Technology Develop these tech nothings and to train technologies and to train the work force of the future. N. S. F. s ability to enable scientific breaklose it and accelerate Technology 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 road map for meeting this challenge, while spurring innovation in communities across our country. Over the past year and with the increased appropriations in f. Y. 2023, n. S. F. 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 and inspire the stem leaders of tomorrow. The n. S. F. Regional innovation engines will catalyze new businesses and Economic Growth in diverse regions of america. When the n. S. F. Engines program relieved its first funding opportunity last year, we received nearly 700 concept paipers from every state papers from every state and u. S. Territory of our nation. In may, n. S. F. Announced the first ever n. S. F. Engine Development Awards, consisting of 44 unique teams, spanning 46 states and u. S. Territories. Then in august, n. S. F. Announced its finists for the first finalists for the first fullscale n. S. F. Engines. For these two tracks, n. S. F. 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. N. S. F. 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 n. S. F. Grow its investment over time and im very pleased to report that n. S. F. Has met and even exceeded the target in the chips and science act of f. Y. 2023. It is also critical that we safeguard these investments and take steps to address Research Security while also cultivating vibrant international partnerships. N. S. F. Plays a leading role in federal efforts and we are expanding the agencys capabilities and competencies to protect taxpayer investments. The chips and science act includes valuable provisions that will help n. S. F. Build the capacity of the Research Community to make riskinformed decisions and strengthen the security of our National Research enterprise. Equally important to the nations competitiveness is n. S. F. s commitment to funding exploratorybased research that creates new knowledge and feeds the industries of tomorrow. For example, many of the a. I. Advancements making news today, we celebrate them, both the Innovative Products and the talent that is developing them were catalyzed by n. S. F. s continued investment over many decades, even through a. I. Winters. Likewise, the Technological Advancements of tomorrow will be borne out of todays investments. In just the past three years, n. S. F. Has established 25 national a. I. Research institutes in partnership with federal industry. The investment reaches into almost every state, supporting cuttingedge research that is applying a. I. To key economic sectors like agriculture, weather and public health. N. S. F. 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, n. S. F. Is strengthening our national and Economic Security and enabling innovation anywhere and opportunities everywhere. Across our nation. Thank you for the opportunity to testify before you today. Sen. Cantwell thank you, director. Colleagues know that a vote has started. Were going to have a couple of votes this afternoon. So i just ask you to use your discretion where you are in the queue to go back and forth and try to maximize time. Im going to turn it over to my colleague, and then go vote and come back and hell chair the meeting and go to senator cruz after that. Thank you. 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 30meter telescope. What are your planser to continuing plans for continuing the funding and the work to design it in fiscal 2024 . Mr. Panchanathan thank you. I very much enjoy talking to you and visiting the great state of hawaii recently. We lawrnged the worlds launched the worlds tallest telescope. To your specific question, im happy to tell you, as you said, just last week, n. S. F. Made a 6. 5 million award to the giant telescope for g. M. T. And a 30meter Telescope International organization 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 recommendations that came, consultations from the Scientific Community and mathematical and physical sciences directorate, making sure that we are prioritizing these investments, working with our National Science bowl. Now were investing in the design and Development Phase and thats this investment. So we have plans in term of how do we move from here to the final Design Review and then the investment. Sen. Schatz so thats youre mostly talking about 2023. Whats your plans for 2024 . Mr. Panchanathan 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 the review processes happen. At the same time i would like to place this in front of congress. You know in the chips and science act, the science publishes were authorizations, not proposeses here. We need appropriations here. We need that also in place so we might be in the vanguard of innovation and scientific discovery for which instrumentation are very important. As we think about the future. Sen. Schatz thank you. Talk to me about Construction Funds for 2025. Obviously youre talking about design. Where are we on construction and can we Work Together on the pathway . I understand there are a lot of it is con tin jefnlt you have astro 2020. We obviously dont have it squared away on the hawaii side of this. So but we have to move in parallel paths in case everything comes together. So where are you with 2025 and construction money for e. L. T. . Mr. Panchanathan again, thank you for that and youre right. We are going through the process that we typically go through in the major research. So we are looking at the 2024, 2025, and beyond. In terms of right positioning for the request to be made for the construction project. Right now we have to go through the final resign design reveuvment were working with the state of hawaii to make sure that were positioning the appropriate investments in a way that they can be sequenced at the right type. So it is our we are working on the budgets to think through when the appropriate time is for putting in the construction request. But the final designs we go through as we think about how were moving forward in this progress and well be working closely with the National Science board on well keep on this. Well keep your staff closely informed and closely engaged to make sure youre getting all the answers you need. Sen. Schatz thank you very much. Senator cruz. Sen. 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 a project timelines by two years or more from the date the department decides to start an Environmental Impact statement. Some nepa reports arent completed for seven years or longer. When you were asked about hurdles posed by nepa to chips projects in a house hearing last month, you pointed out theres quote, theres currently a bipartisan amendment to the Defense Authorization act which would help a lot. So were 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 its the cruzkelly 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 . Sec. 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 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 dont 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 d. C. Take your lead and pass something in the house. My view is its essential. Were going to do everything we can. We have a team, week working on it, but without legislation, its very difficult. Sen. Cruz thats very helpful. Thank you. Let me turn to the topic of spectrum. We all know that the United States needs more commercial access to midband spectrum. Recent studies project that u. S. Mobile traffic to increase more than 2 1 2 times over the next five years and almost sixfold in the next 10 years. We need a real midman spectrum pipeline so that the u. S. Can dominate in 5g and not fall behind our adversaries. Unfortunately access to mid spectrum has been almost impossible to come by because so much of it is under control of federal agencies who are resistant to sharing. The Defense Department recently completed its report on opening access to spectrum in the lower three giga hurts bands 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 in the bappeds. Secretary bands. Secretary raimondo, we had a very productive call yesterday and during that call you committed to sharing the report with me and briefing me on it. I appreciate that. Do you agree that we need more midman 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 . Sec. Raimondo i do. Let me say this. As we said yesterday, i think id be very happy to have my staff at n. T. A. A. And flrvetion taa and the d. O. D. , i think we should do it together, to come and go through the report. And yes, i do. I spoke with secretary austin last week and i said, the d. O. D. 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. My point to him and my point to you and anyone who wants to hear from me is that this shouldnt be a zerosum game. Right . We shouldnt think every time the d. O. D. Shares or gives something up theyre losing capacity. We have to find creative ways where we can have more spectrum be made available in the midrange band, as you say, and also the d. O. D. Has what they need to do their mission. And im committed to working with you and with them to do that. Sen. Cruz thank you, madam secretary. Director panchanathan, during fiscal year 2001 and if is cal year 2021 and if is cal year and fiscal 2022, there were grants focused on both the quoteunquote science of countering social media misand disinformation, as well as the developments of Digital Tools to track and censor socalled mis or disinformation. One of the projects was called expert voices together and it is to, quote the n. S. F. , quote, creating a comprehensive system of care that addresses the harms journalists experience due to online harassment. Its mission, incredibly enough, is to, quote, support journalists in moments of crisis, while helping the Media Industry build resilience longterm. In other words, taxpayerfunded therapy for leftwing journalists who find actual facts traumatizing. Im sure people like taylor will be excited about that. But where on earth in the n. S. F. 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 n. S. F. . Mr. Panchanathan first of all, let me tell you that i hope through the hearing today youll get to see n. S. F. s broad impact all across our nation through stem Talent Development to economic vibrancy that n. S. F. Makes possible and, yes, National Security objectives also being fostered. I hope that the example that i will give you and the answer im not trying to package all of that. But i hope that that will come through very clearly. Were doing a lot of work about how to make sure the talent everywhere and innovation everywhere is energized. Sen. Cruz could you answer the question i asked . Mr. Panchanathan im going to come to that. I just want to make sure the n. S. F. Mission is clearly understood also. I want to say one thing very categorically. We do not, n. S. F. 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 guard rails and guardrails and for the users, so that they have the tools so that they can safely navigate content. That is what n. S. F. Is engaged. In. Were not in the business of censorship, were not in the business of controlling content. I can tell you, for example, even in this conversation that were having right now, in the deepfake crowd, 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 were having right now is being transformed into something thats even unrecognizable . These kinds of things have happened. Were 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 thats all were doing. Were not censoring. I want to repeat that. Were not altering content. Sen. Cruz whether youre funding others that are engaged in censorship, youre undermining support for your very important agency. Mr. Panchanathan im happy to work with any of you to go through this with you in more of a oneonone setting and explain what these projects are doing so they can be helpful. Happy to take your suggestions, happy to take your inputs. I always say n. S. F. Is a learning agency. We learn constantly because we cannot be an agency that says, this is how we do it. Were a learning agency. Happy to take the input and see if you find n. S. F. Appearing to be we are not, but im happy to have the discussion with you. Sen. Cruz thank you. Sen. Tester thank you. I appreciate the flexibility. Gina and panch, thank you for being here. I appreciate the work youve done. I appreciate everything youre doing to bring jobs back to this country and i appreciate everything youre doing on a National Security front. Look, for decades we have outsourced jobs in this country and it hasnt 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 weve outsourced our jobs to a time when 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 two 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. Division for this tech hub would be to establish montanas wellestablished photonics industry and build it into a World Class Center that can outcompete everyone in technology thats 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, our brightest have worked together, joosts, labor group university, labor groups, financial groups, State Government have all worked to craft a tech hub plan that work force 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, we have watched them Work Together. I come from a state that was built over 100 years ago by people who moved in, where there was no grass, and built farms. Where there was just grass and built communities and 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 nations or the worlds 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 dont care which one goes first. Go ahead. Sec. Raimondo thank you. Ill go first. And ill 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 to 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. Sen. Tester i was hoping for a different answer. Sec. Raimondo i know but im trying to be honest here. I promise well look at yours and all of yours and there will be rural representation. We are determined to do it. Statute requires it. Were doing a huge amount of outreach. I tell my team, theres no substitute for showing up. Show up in rural community, let them know were there and help them to put forward a good application. So were highly conscious of it and were 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, 100 million grant to really move the needle and create a hub. Thats 2 billion. We have 500 million. And youve altogether riesessed 10 rawght rise altogether rides 10 billion authorized 10 billion. I guarantee you were focused on rural and youll be pleased with the results and i guarantee you this program is worthy of more funding. Sen. Tester thank you. Mr. Panchanathan thank you very much, senator. It was nice meeting with you and when i spoke to you, n. S. F. 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 your question about two projects that even just got funded very recently in terms of unleashing innovation in the state of montana. Montana State University in boozman, theyre leading an bozeman. These awards are meant to bring capacity in every region to see how we can lift them up through partnerships as well as n. S. F. Investments that can then be further be built with the higher level of n. S. F. Type two awards and partnering with commerce and e. D. A. , we have original Technology Hubs, we can Work Together. We are like this, we are not like this anymore. Because of the secretarys leadership and a commitment to working in partnership, the two of us are working closely together, our departments are working closely together and we dont want anything to fall in between. This project, for example, is focused on advancing quantum and supporting technologies in the northern intermountain states. Montana, wyoming and idaho. The university of montana in missoula is leading the n. S. F. Engine development focused on advancing precision forestry, which is, you would agree, there is much more in place innovation, and rangelands technologies. So these are just the awards 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 energization. Mr. Wicker thank you very much. Thanks to our two witnesses. I believe neither one of you is surprised that weve had questions already about Rural America. Since you were specific to montana which is a state i really admire, could you tell us the epscore part of the legislation, how thats already perhaps benefiting researchers in other rural states . Mr. Panchanathan thank you very much, senator, for posing the question. Thank you first of all for hosting me. Sen. Wicker yes. I believe mississippi was the first state simultaneous mr. Panchanathan it was a great launch effort. It was one 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 research institutes. Now to the state of mississippi. In the state of mississippi, we have now invested and im going to go through a few projects in the state of mississippi, again, very recent ones, again, the n. S. F. Engines development award. The first of those to jackson State University. Focused on advancing Food Security and client resilience. Sen. Wicker we have a new senator who is an alum of jackson state. Mr. Panchanathan and then the next one is to mississippi State University in starksville where we were together. This is an advancing autonomous technologies for advanced manufacturing. The research is there. In addition to that, we have invested almost 1 million in mississippi Golf Course Community college on two projects, to broaden participation in emerging technology programs, as well as increasing the supply and diversity of the i. T. Work force 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 if you recall, in your office we said, you asked me the question, do you think that you will meet those targets for f. Y. 2023 and then going on to f. Y. 2029 . Im happy to report to you today in f. Y. 2023 we met and exceeded the target and these are mutually beneficial. Sen. Wicker you may want to supplement your answer further. But let me just say, i really dont think this legislation would have passed so easily had we not been able to include the fscore provision. I do want to thing thank the char foyer her help thank the chair for her bipartisan help on that basis. In that regard. You may want to answer on the record about Rural America, madam he can is. Let me see if madam secretary. Let me see if i can follow up on something that senator cruz mentioned. Do i understand that you have you and your office have seen a completed report concerning the lower three giga herts study . Sec. Raimondo we got it at the end of last week, yes. Sen. Wicker so do i understand you to say that there are areas of the report that you disagree with . Sec. Raimondo i have not gone through it all myself. So you could not understand me saying that. Sen. Wicker what did you say that with that regard . Sec. 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 midband spectrum available for commercial use to power innovation. In ways that do not interfere with or in any way degrade the d. O. D. s mission. Sen. Wicker let me just say, i agree with that statement that you just made, as you said it, and to the extent that the report coming from the department of defense is more restrictive in that regard, i wouldnt have a problem with that. When are members of the committee and members of the senate going to be able to see this report . Sec. Raimondo we just received it i think on friday of last week. Were going through it now and id be happy to follow up and well have a Briefing Schedule where the d. O. D. And ntaa can come over whenever you want. Sen. Wicker i like the idea of a briefing. I really think its less formal and theres more of an opportunity forgive and take for give and take. I think to the extent you say there is room for both sides to benefit and for neither side to have a loss, im reluctant to say side, either department or area of endeavor, to have a loss, thats not necessary. In splitting the blanket in this regard. Sec. Raimondo that is my point. I think historically the debate has been approached, any time d. O. D. Gives up anything, it is a loss. And i think we have to modernize our thinking. There are ways that, if were creative, they can have everything they need and also we must make more available for private innovation. Private innovation. Cspan cspan cspan senator klobuchar . Sen. Klobuchar thank you for your visit to bloomington, minnesota, youre a big hit there at normandale Community College and we are just one of a few states with a full Semi Conductor chain and integrators, tool producers, deathing, packaging, you name it. Can you talk about how the Commerce Department is looking to support smaller Companies Looking to get involved in that supply chain. Sec. Raimondo of the 35 billion 10 will be mature legacy and supply chain and there will be a great amount of money for Small Companies and supply Companies Like the ones we met with. So i can assure you that will happen. And i said earlier weve received 500 statements of interest from i think 42 states and over a hundred applications or preapplications, many are smaller companies, supply chain company, so rest assured were looking at those opportunities, not just the very Big Companies we all know about. Sen. Klobuchar thank you. Considering you visited the Community College there, normandale Community College, can you talk about given that we need 100,000 Semi Conductor technicians and another 140,000 people in the trades to build Semi Conductor manufacturing facilities and we think we have a shortfall of 300,000 engineers and 90,000 skilled technicians in the u. S. , can you talk about the importance of Community Colleges and one and two year degrees and all this . Sec. Raimondo in the time 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 Semi Conductor industry. I think thats amazing. Just the fact the passage of the bill, Community Colleges are mobilizing to say how do we fill the gap of 100,000 technicians were currently short . We will establish the national Semi Conductor Technology Center and a huge component of that will be work force an well do that in collaboration with the n. S. F. Everyone has a role to play, high school with career and Technical Education and Community Colleges have a role to play and fouryear colleges and t. H. C. Programs up and down the ladder. Community colleges in training technicians, cybertechnicians, analyst, etc. , have a particular role to play and were already working with them. Sen. Klobuchar what a great transition and i know youll be eceviting the university of minnesota and met the interim president when you were visiting secretary. Can you talk about, i know theyre one of the finalists in the n. S. F. Innovative regions program, in your view how can publicprivate partnerships help with education . Mr. Panchanathan our program was created with the purpose to learn how to bring the parts together to make sure its energized and catalyzed. So our regional program, 44 awards have been made and 46 states and territories are involved in this. Every one of those awards have a number of Industry Partners and governments partnering and even technicians and other partners and we have Community Colleges, technical colleges, technical institutions as well as universities. So its exceedingly important. Let me give you a couple examples to illustrate the point. We earlier talked about 6g, the next g, we should say, the next Generation Program has 35 Companies Participating in the rinks program and the total amount of resources they bring to the table is 50 million in kind and actual investments and then match with another 50 million and we have rebust program how do we build the next Generation Networks including broadband being accessible so talents and ideas can have access to all the content were generating through our nation. The Community College, i cannot help but tell you about this Community College and the technical college. Is leading an n. S. F. Advanced Technical Education and this program has been there a long time. Essentially Community Colleges which are invested in new curriculum as well as the students. Sen. Klobuchar i look forward to your visit, wearing a gopher hat and brother professor fisher from her nebraska team. I want to thank her for her leadership on this bill and we wouldnt be where we are today if it wasnt for senator cantwell. Sen. Cantwell thanks for your witnesses being here today. Between your two agencies you 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 Departments Inspector General described the novel challenges facing the implementation of chips. The i. D. Highlighted the need for new controls and appropriate oversight for this unprecedented influx of funding stating it may require additional upon toring and reporting to ensure project recipients comply with statutes achieved intended outcomes and used funds efficiently. Ms. Fisher close quote. The Inspector General noted contract and grant fraud now account for 65 of the o. I. G. s department of commerce cases. Mrs. Fisher before fiscal 2021 they represented roughly 35 . Secretary raimondo, have you planned to implement any specific oversight measures to respond to this concerning development were seeing . Secretary raimondo thank you, senator and thank for you the question. Youre right, this is unprecedented and the Commerce Department never implemented anything of this size and i take that responsibility incredibly seriously. I have a job to achieve goals and stewards of taxpayer money. We are building a team since the time the bill passed, we built a team, about 150 professionals, i would invite you to meet them any time. Theyre incredibly talented people, and were building a risk team, specifically devoted to the issues that you highlight. The risk team is a risk professionals to make sure were evaluating all the risks and also after we put the money out to make sure the companies are doing what they said they would do. Also, we dont plan to put the money out to these companies in one lump sum but plan to put it out on milestone based achievement, so some money to see what they do. So we are going to be massively transparent, provide notice as were required to do for congress for investments of 10 million or more and have were doing an incredible amount of due diligence, all of which will be documented. 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. In this report were there any patterns that you see when you see the 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 . Serves ec. Raimondo something were obsessed with and trying to get better, no, not particularly. As was said earlier, putting a few billion dollars of taxpayer money out in partnership with other companies is a challenge. Theres not one answer but can simply tell you the team we have is built with professionals that have 10, 20, 30 Years Experience in track record and 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, open their books to us, share their finances with us and well use all that information to hold them accountable. Mrs. Fischer you mentioned youre putting payment out, first payment, second payment to keep track of it easier, if you were to see something, would you cancel grants . Sec. raimondo we would not fund them if they didnt reach the conditions required. I would put a mrs. Fisher i want to plug in nebraska and the good things that we see. I do have a question on how do you define what a region is and also, dr. Panch, if you could say nice things about my state. Look it up. Mr. Panch i have it ready to go. Sec. Raimondo we have to have several is awardees within the region. We have to have some of them in each region. Mr. Panchanathan the investment of chips in science, theyve gotten 200 million over five years. The science portion of n. S. F. Is still an authorization, not an appropriation. Were hoping we will have the investments planned in the organization for appropriations but were not waiting for that to energize the innovation across the nation that you heard that i mentioned that. The 200 million is being used in order to be able to generate 100,000 Semi Conductor technicians and researchers our nation needs rapidly. The secretary talked about 2030 but its even beyond 2030 and n. S. F. Is working towards that and in partnership again to the earlier question with publicprivate partnerships, were working with micron and intel and others in the state of nebraska as you asked. N. S. F. Investment spans all parts of our nation, energizing Community Colleges and universities and so on. Let me give you a couple examples from neaps, the epscor is to track 21 million for 2212026, part of the bidding is in the second quantum revolution and launching a enter departmental and ultimatey Campus Research and education structure focused on Quantum Materials and technologied called equate, to increase the competitiveness in the area of quantum science and technologies as one example and under the project again we have an award to nebraska, lincoln which is part of the project and were supporting a c. M. S. Detector and supporting software being developed at the university of nebraska and i want to reemphasize this point, balance and i. D. S. Are everywhere and it is our responsibility to find them, nurture them, motivate them and bring them to life. Thats the only way well outcompete other nations. Mrs. Fischer there is no place like nebraska. Thank you, madam chair. I need to run and vote and following you is senator moran. Mr. Moran only after i put in a plug for colorado. Thank you, madam chair. Its great to see such a crowd here. I feel like were sunday night football with taylor swift and travis kelce, i havent seen as many people in this room in quite a while. But dr. Panchanathan, i know you attract a crowd and have devoted yourself to these issues. Mr. Chicken blooper and i know mr. Hickenlooper i know you didnt have more of a bipartisan support in looking for the best outcome and we stole her ideas and she stole our ideas and how it works. Mr. Panchanathan, as a former governer, i see how ideas thrive when you have an active seat at the table and weve been listening to our need and colorado is a leader in startup creation and supporting entrepreneurs and generating a work force in a range of Technology Fields with manufacturing, clean energy, quantum. So i dont have to go on, i think the other senator has done a good job of pitching their states and dont have to go on in either of these questions, regional hubs or regional engines why colorado is well suited. But id like to ask both of you to describe how the department and n. S. F. , how will you coordinate regional tech hubs and Regional Innovation engines . Mr. Panchanathan let me start before the chips and science act, secretary is raimondo and i before she took office spoke the very next week and said were going to hyper partner, if there is a term like that, because bahama we believe its in those that invest in both our departments and we have a chip Steering Committee in the office of the director that works almost on a daily basis and weekly basis in organization with the secretarys office and their Steering Committee. Every program the secretary talked about, the national Technology Center, the Work Force Development activities, the regional Technology Hubs, every one of those activities are highly coordinated. In fact when the regional Technology Hub announcement was made, even the verbiage of the announcement was coordinated between n. S. F. And commerce and vice versa. Thats the level of coordination we have because it means we dont want to lose any of these innovation, innovators by having any of these values of debt as we call them. Were making sure theyre tightening those gaps that can carry the innovation from research to the foundational work and then to the innovation outcomes. One quick addition to that. Sec. Raimondo i agree and everyone well knows, if you talk to industry and academia, n. S. F. Job Training Programs are world class, the curriculum and the approach. So we want to learn from that and then of course expand it because we have all this additional money. But in the s. E. C. , for example, which is going to establish this fall, n. S. F. Is a Founding Member of that. So were really trying to bake in the n. S. F. To everything we do and frankly leverage their great work especially around Work Force Training. Youre way ahead of us and thats very encouraging. Secretary raimondo, the shapes and science directs the office of science and Technology Policy to develop the technical science strategy to establish National Research goals and especially in terms of emerging technologies, and weve been looking at how research standards, new commercial applications in the field of a. I. Are going to transform not just our chicago but our Global Competitiveness. I thought it useful to get what priorities does the department see are important in this kind of forthcoming strategy to reflect in the field of a. I. Sec. Raimondo we should visit on this when we have more than 19 seconds to talk about it, but nist is a standard setting body, theyre kind of the lead agency in the administrations work on a. I. And have put out their Risk Management framework which is voluntary risk guides for Developers Developing a. I. And the special sauce of nist because theyre a neutral third party, everyone trusts them so industry will collaborate with them, universities will collaborate with them and thats the entity that will be forming the new standards and candidly, i know im out of time, i think there will be a u. S. Led ecosystem and we need of a. I. We lead the world. We need to make sure the standards that fuel that are consistent with our Democratic Values so we can have a further discussion. Mr. Hickenlooper to our large audience, nist is one of the most effective organizations we have in the government and do a remarkable job, almost impossible job, with remarkable success. Ill yield and get to ask questions later and im chairing so now get to come back. Senator thune . Sen. thune i would yield to senator moran who is waiting patiently to ask questions. Sen. Moran i would not take up my time, much of my time anyway to reiterate whats been said time and time again in regard to rural and small business, thank you, director, we might have a conversation in the future aboue epscor, that you met the standard, the goal and would be interested in knowing if there are challenges you would face in continuing to meet that or exceed that goal in the future. Secretary raimondo, could you assure the committee on your efforts to ensure rural states benefit from the chips and science act, via the tech hub and Chips Program . Sec. Raimondo thank you, senator. As i said, we will be putting up the tech hub designations this fall and we will ensure there will be geographic representation including rural representation. Much of that is because weve been doing outreach to Rural Communities to let them know the money exists, we want them to apply and help them apply. As i said before, its so oversubscribed that i have no doubt there will be rural places, we would have liked to have invested in that we wont 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 pliers, small Chip Companies eligible for the money. Sen. Moran youve assured me at least 16 times and im sure its available today. Would you assure your process in evaluating tech hub applications and what role does the e. D. A. Play in that process . Sec. Raimondo its a merit based process and we have National Security goals we need to achieve and those are primary and the other thing we evaluate is likelihood of success and how strong is the partnership, is there full buyin from the community . The decisions will be made by a committee in d. C. With advice in consultation from the local offices. Sen. Moran regional offices . Sec. Raimondo regional, yes. Sen. Moran is there evaluation for a tech hub that originates by state, the tech hub application originates by state as compared to a entity, different entity . Sec. Raimondo theres no preference either way, were open. Sen. Moran the time line for tech hub announcements and designee and Development Grant awards . Sec. Raimondo this fall, if possible. Im moving as fast as i can. The critical thing and we should visit when we have more time. Let me just say the reports about because way are incredibly disturbing and i cant count on the investigations but we take every threat seriously and investigate to the fullest wherever we think theres some incredible allegation that a company has done an end run around your export controls. We need different tools, im supportive of the guard act which would and the restrict act which would codify our itcs 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 youre talking about. Candidly we need the threat is different today. The threat from china in 2023 is different than the cold war threats of decades ago. It is technology and a. I. And it is moving fast so i would welcome a broader discussion with you around how we modernize what we do and how we properly fund what we do. Theres been several walkup calls and huwaei stands out and i would welcome your suggestion on how we either as appropriators or authorizers would be helpful in closing this opportunity for China Technology theft. Sec. Raimondo we will do it. Im proud of the fact under my watch we imposed the largest fine ever in history, 200 million fine for a Company Called cgate for violating controls, selling to hauwei. Were tough as we need to be but resources are helpful. Andersen moran was the fine collected . Sec. Raimondo yes. Thank for you this important hearing. Secretary, thanks for being here, director, thanks for being here. Secretary raimondo, one thing i wanted to share with you and also chair cantwell is to show support for Ranking Member cruzs 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. Senator lujan i wanted to show support from senator cruz and i want to assure the information about the study. Im proud of new mexicos long history of connecting scientific innovation, National Security and Global Competitiveness and over 75 years the department of Energy National labs has served the nation with their International Leadership in scientific disclosure. N. S. F. Engines are to create regional skill and ecosystems 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 motivation needed to maintain International Leadership. Director, i was pleased your testimony acknowledged the fact we all know too well the Economic Prosperity of innovation has not been shared equally across our nation. My question, director, yes or no, do you expect the choice of Regional Innovation engines will provide Economic Opportunities to those communities that are too often overlooked . Mr. Panchanathan yes. I can give you many examples. Sen. Lujan i thank you very much and will submit something to get those specific responses as well. I was happy to see one of the 16 innovation engine finalist is the new Mexico Space Valley Coalition which is dedicated to growing the nations commercial space industry. The new Mexico Space Valley Coalition includes the city of albuquerque, leaders from the private industry, universities across the state of new mexico including navajo technical university. Director, as you 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 the Valley Coalition appears to be a perfect fit for the innovation 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 no Single Department or agency can do it alone. The scientific challenges we face are too big and the time line to meet these challenges is too short and the International Competition is too strong. I was pleased to see the n. S. F. And the department of energy signed a m. O. U. To partner to find 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 . Mr. Panchanathan yes, and we do it in large measure with m. O. U. And i have many examples that, too. Sen. Lujan can you share some of the examples you shared and others that show that connection and partnership with the department of energy . Mr. Panchanathan i would be happy to do that, yes. Sen. Lujan secretary raimondo, thanks for your leadership and leading the department of commerce, especially in this space where so many challenges we face as a country will fall under your leadership will fall under the department of commerce and your team. We just heard from the director how n. S. F. Is partnering with the department of energy and can you share with the department how the department of commerce is engaging and the department of energy and the national lab in implementing chips and science . Sec. Raimondo we have cooperation with the international Technology Center which will stand up this fall and they along with n. S. F. Will be one of the founding entities and they will have a real role to play in establishing the center, defining the priorities, and we plan to rely on their expertise very heavily. Sen. Lujan madam chair, as i yield back, i just want to know for the record the concern that i have, which is looking at the aggressive posture from the administration solely for the interNational Science Foundation Top line. I have a concern when im looking at the top lines for n. S. F. Compared to the department of Energy Office and science and i think they need to expand funding for the office of n. S. F. And the department of science at a similar rate to make sure chips truly succeed as well and i yield back. Chair cantwell senator thune. Sen. Thune ive been working one both sides of the aisles to obtain a. I. And it will help us be the Global Leader for us in technologies and you referenced the new Semi Conductor Technology Center. Im focused on assuring the senate puts the necessary guardrails in place while also assuring any legislation encourages and thought stifles innovation in a. I. Can you explain in more detail how the national Semi Conductor center and the chips and science act more broadly is encouraging innovation in Artificial Intelligence . Sec. Raimondo thank you. I agree strongly. The United States has a Competitive Edge in the world and were leading in a. I. And need to preserve that lead and extend that lead. So we have to preserve our Competitive Edge. Having said that, we have to balance the opportunity with guardrails to protect ourselves from the downside and nist has put out a risk manager game work which is voluntary to developers for safeguards they should use as they develop new a. I. Algorithms, similar to the voluntary commitments that the president and the administration has extracted from the biggest a. I. Developers. With respect to the netc, that will be research and development. So whether its new materials, new ways to develop new Semi Conductor chips, all a. I. Will be powered by a. I. Chips where again we lead the world. The nect will lead the next wave of development and startups as we continue to maintain our a. I. Lead. Sen. Thune this Administration Pushes for public style regulations on the internet and usda tried to insert Net Neutrality rules in the reconnect program and ntia has thrown requirements in the bead program and last week the s. E. C. Aannounced it will reinstate the obama regulations on the internet. Dont ask me why youd want to integrate the internet as a monopoly but they seem to be headed down that road. With respect to the bead program, i find it troubling the administration would put over 40 billion in broadband funding at risk just to accomplish a campaign talking point. I would argue 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 . Sec. Raimondo i want to be clear were not regulating or price setting and not requiring states to do that. Furthermore, we want all providers, large and small to participate in the program. The way were doing, every state, your governor would create a plan that they think could meet the needs of the state and our job would be to evaluate that until we fund the plan. Sen. Thune you agree the nita will give recommendations for requirements . Sec. Raimondo yes. Sen. Thune i introduced the Work Force Development act with senator hassen which was part of the chips and science act and among other things the bill asked to build on the expertise of nist to improve Quantum Network and encryption. These applications can enhance se technologies. Can you describe how the kept has worked to promote u. S. Competitiveness and innovation and the development and standardization of Quantum Technologies through the implementation of this bill . Sec. Raimondo i will follow up with the dr. Anasio who runs nist but chips and a. I. Is where were exceedingly focused to develop standards and focus our investments. Sen. Thune thank you. Sen. Peters thank you all that youre here and the great work you do. Secretary raimondo, i believe in order to be a great country 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 Semi Conductors. The crisis that was preventing consumers to purchase vehicles resulted in furloughs of autoworkers due to the shortage of mature chips. We had parking lots full of automobiles and pickup trucks and other automobiles that needed a chip or two before they could head off to the dealer. Your department pledged to spend 10 billion in the chips funding to fix that and certainly well have an update on that but hopefully 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 mobilized to meet that challenge and one example is the Star Initiative to establish a Semi Conductor center of excellence in michigan led by the internationally Renowned Research center imake manufactured manufacturer k. L. A. , the university of michigan and wacinaw Community College. The Star Initiative will focus on advanced Electronic Research for Innovative Solutions to help cement the United States leadership not only in the future of Semi Conductors but also in the future of the Automotive Industry. My question for you, secretary raimondo, you said chips are in the funding in the coming months, would i commit to the crossover impacts that r d can have in other Industries Like the Automotive Industry as a way to maximize the impact of these funds . Sec. Raimondo i will but let me say this the statute, as you well know the statute requires a 2 billion set aside for the mature node chip and we have said that we believe well invest close to 10 billion in supply chains mature and current node chips. And that is still our plan. We think thats whats necessary to get the job done. With respect to your other question, early in the new year, well be getting the nofo out, the funding opportunity 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 said this all along, the point of the Chips Program isnt just to incentivize a few new fabs and call it a day it. Thats not enough. Thats not success. Thats not efficient. We need to do what you say, stimulate research and development and 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. We are in violent agreement on this, and, you know, i look forward to working with you. Mr. Peters i look forward to that as well. I raise another issue to Semi Conductors and thats advanced packaging which is a significant part of the chips supply chain as you well know needs significant focus as part of our onshoring efforts to bring those 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 hoten is doing incredible work on advanced packaging particularly by making very advanced Circuit Boards for defense applications, and theyre expanding their capacity. My question for you is, as we try to assure the supply chain is supported, can you speak to how advanced packaging will be prioritized in funding Going Forward . Sec. Raimondo yes, this fall well put out a strategy paper on our packaging strategy, our plan and youll see that soon. Right now we dont do advanced packaging in the United States and is a huge problem that doesnt get much attention. Even if we make the chips in the United States and chip them to ship them to asia to be packaged doesnt hit our National Security goal. Were deeply committed at the end of this implementation to have advanced packaging on our shores, and as i say, later this year well put out more details on the strategy. Senator blackburn. Sen. Blackburn thank you. 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 man tampa bays as we want ant and how to move forward with this on the supply chain. 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 this 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 . Sec. Raimondo ill leave it to congress to decide if and how you want to amend the legislation. The legislation is currently drafted crafted, has a tax credit being more restrictive than the grant. So its intended by statute that the tax credit is more restrictive than the grant program. Sen. Blackburn my question is should we harmonize that . Sec. Raimondo i have to think about that to be very honest. Sen. Blackburn i think your insight on this is something important. If youd get back to me on this. Sec. Raimondo ok. Sen. Blackburn we almost got you in a u. T. Jersey when you were in tennessee and well get you back. Lets talk about microelectronics and ultraviolet research and the work being done there. What are you doing to make sure we dont have several agencies working on this but were not harmonizing the work . Mr. Panchanathan senator, its great to be with you. And the university of tennessee in knoxville when we announced the regional engine, we keep talking about this was focused on transportation electrification and digitization and specifically a question, we have very tight partnerships with all the agencies that bring us together. For example, we have a m. O. U. Sen. Blackburn youre watching the couply education. Mr. Panchanathan absolutely. Sen. Blackburn i want to talk about your trip to china, did you think it was a success . Sec. Raimondo it was a productive trip. Sen. Blackburn did you hold them to account . Sec. Raimondo i made it be clear we dont talk about export controls. Sen. Blackburn did you call them out about committing genocide on weaker muslims . Sec raimondo i did. I didnt get much of a response. Sen. Blackburn have you visited taiwan . Sec raimondo ive had no reason to visit taiwan. Sen. Blackburn do you consider taiwan a country and they ship a lot of chips. Sec. Raimondo the administration is clear on that. Sen. Blackburn and youre not deviating from that . Sec. Raimondo absolutely not. Sen. Blackburn way want to bolster our leadership whether it has to do with a. I. , quantum, the microelectronics we were discussing and we cannot afford to fall behind the c. C. P. We just cant. And its going to take calling them out on this and holding them to account. In my opinion its going to take supporting taiwan and the work that they are doing and of course weve got to make certain that the c. C. P. Controlled entities dont benefit as we move forward implementing chips, and i think also, madam chairman, one of the reasons weve got to get busy with the nqia and make sure we get that reauthorized this year. I read the article on the hill where they mentioned quantum capabilities is something the chinese are going to use to bolster their communication and satellite movements. And as you look at this, it is imperative that we not give them one inch. And sending that message, taiwan is someone we can work with and they want to have our business is something thats important. Thank you. Chair cantwell mr. Welch, keep to your time if you can, please, we have several witnesses. Sen. Welch secretary raimondo, youre doing a great job and were excited in vermont about the chips act and i think my college ty young, who played a instrumental role in getting that passed, we had a real production of nitrate chips printed on silicone chips which is a new technology providing greater power, global foundries 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 manufacture of a mature legacy node Semi Conductor technology. Sec. Raimondo thank you, senator. Nice to see you. We must invest 2 billion in legacy nodes and well invest more than that because these chips are essential. We executed a m. O. U. With the department of defense whereby they can share information with us around their needs for the Defense Industrial base. Most if not most of the Defense Industrial base need these existing node and mature node legacy chips and why its another reason were focused on making sure we have enough of a supply in the United States. Sen. Welch also what is important are the regional hub programs which are parts of chips and science and we have applicants and is there a commitment from the e. D. A. , the department of commerce to follow the requirements in that program around rural epscor states and vermont would be among them. Sec. Raimondo yes, of course. Sen. Welch the deadline for phase 1 was august 15th and theres a lot of interest when were going to hear and i dont know if you can comment on that but it would be good to have some visibility when we can expect an answer. S, c. Raimondo yes, senator. We are working as fast as we can and we received over 400 applications from nearly every state. I hope to be able to have news in the next month or so. Sen. Welch i want to doctor drw questions. We really appreciate all youre 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 lost commercialization to china. I want to give you an opportunity to express what youre doing to ensure that the director of technology is bringing Clean Energy Technology from the Research Phase to the commercialization phase in the u. S. Mr. Panchanathan thank you for the opportunity to weigh in on this. In may of this year, we announced the first ever n. S. F. Engine Development Awards which i talked about. Seven of those awards include Sustainable Energy as a topic. In august we announced 16n. S. F. Engine finalist proposals, two of those into the top areas of Sustainable Energy. In addition to that, many of what existing programs that is in the translation phase in terms of what you say in startups, Small Companies being invested in, the programs also have significant Clean Energy Portfolios as well. As an example, the vermont startup rich earth, l. L. C. Is aiming to leverage Clean Energy Technologies while in the process of optimizing Wastewater Treatment for water recovery. So theyve also launched many programs with the activities focused on clean energy and Sustainable Energy. Sen. Welch i want to make a comment about working with us on the letter of credit thats going to hammer us if it stays at its current level in the bead program. Madam chair, i yield back. Chair cantwell thank you, senator vance. Sen. Vance thank you, madam chair and secretary raimondo and the witness for being here. I want to say or at least echo some of the comments league colleagues from across the aisles have made of my the clerk will designate the amendment senator young and what was done on the chips act. I of course wasnt here when the chips act was passed and i would have supported it because its important to bring American Manufacturing and technologies back to our country. There have been many stories and questions raised since the chips act was passed about its implementation and also how companies are benefiting or not from some of its resources and want to focus on one particular barrier with secretary raimondo about the labor shortage. We hear from folks working in the chip industry we have a labor shortage and you hear it from taiwan Semi Conductor which tried to build a 40 billion facility in arizona and effectively trying to import skilled engineers from taiwan because they say they cant get the labor from here. Is that an accurate assessment of the situation that we have the need to produce chips in america but also have a shortage of Skilled Labor and recruiting the people to actually make those chips . Sec. Raimondo yes, it is. As i have said, we will be using some of the chips act to devote to labor and training and work force and in fact since the passage of the bill, over 50 Community Colleges have started new initiatives to train people but theres no question, we think well create about half a million jobs, at least, through the implementation and we need to do more to train people for that. Sen. Vance being mindful of time, i want to point to the criteria that in light of the labor shortage gives me some concerns. 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 work force pathways for disadvantaged individuals and their region. Additionally applicants must divert from sources of talent and set goals for workplace diversity. I know of course creating these diversity mandates within a Company Actually requires additional costs and you have to hire diversity consultants and additional Human Resource people. I guess im struggling to make sense of the fact 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 doesnt make a ton of sense and seems to be counterproductive to the goal of bringing this industry back to the United States in the first place. Sec. Raimondo first of all, theres no mandates and second of all its completely consistent. Sen. Vance what would you call it when the secretary of commerce said you must do this to receive funding, if its not a mandate, what is it . Sec. Raimondo what it is they have to show us a work force plan and we have to evaluate the plan. Sen. Vance they must show a plan in order to receive money from the government and thats a definition of a mandate, you must do x in order to receive y dollars. Let me make this point, secretary raimondo. Think of this from a perspective of a company thinking of locating a chip manufacturing facility in this country or 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 22yearold gender studies graduate of harvard or yale and to be honest it was probably written by a 22yearold gender studies graduate of harvard or yale and why would you locate your business in the u. S. And in china you get more access and is it the economy that makes it harder to do business or easier to do business . Im curious, where would you locate the facility given those two separate sets of criteria . Sec. Raimondo before i went to china i talked to 120c. E. O. s of businesses and they told me china is becoming increasingly uninvestable and i would locate my business in the United States. Sen. Vance i agree the companies should locate their businesses in the United States but we have to be careful the reason china has become uninvestable is its hard to get our money out but if we make it harder to do business and pass Bipartisan Legislation that puts money in American Manufacturing and make it harder to access it unless you check the diversity box well be counterproductive. Im mindful im at the end of my time and the last point id make is the United States thank god does not have a chief diversity officer and would appreciate it the Biden Administration doesnt pretend to be one. Sec. Raimondo i have to protect taxpayer money and the companies have to meet their mission and in order to do that they have to have a Trained Work Force and ill work with them to make sure it happens. Sen. Vance i dont think diversity is a part of it. Thank you, madam chair. Thanks for holding this important hearing. And secretary raimondo and mr. Panchanathan, thanks for your testimony today, its appreciated. I want to take a moment to recognize the work secretary raimondo and director panchanathan have done to implement the chips and sciences act. You have built a team thats gone above and beyond to quickly and efficiently roll out these programs so we can strengthen our stem work force and bring in good paying jobs right here at home to everyones point is what we want. We talked a lot about advanced manufacturing and of course we passed the chips and science weve been talking about this, we want to bring manufacturing back to america and want to bring those good paying jobs here and as we do this, again, everybody is talking about creating the work force with the training and skills necessary. Senator rosen im proud to support that bill and proud to include the language i drafted with senator blackburn to provide funding, work force this mission is a bipartisan, manufacturing jobs in america act. So director can you please provide an update on the implementation on the of the work force provision . And secretary raimondo can you talk a little bit after that how we include our smaller communities and Rural Communities being sure they can grow out advanced manufacturing. Thank you very much, senator. I want to thank you for the pleasure of being in reno, nevada. As you know this is the same Work Force Development agency for the country in all aspects of science, technology and engineering in terms of broad based mandate which focuses on k12 as well as university, Community Colleges and beyond. So this 25 Million Investment is focused on bringing up as i said earlier, bringing upwards of 100,000 new Semiconductors Manufacturers and educators fulfilling a key neefd Semiconductor Industry through f. Y. 2027 and beyond. These have been used primarily in the partnership we have had as well as the future of semiconductor programs as well as Computer Science for u. S. Programs and specifically focused on microelectronic development. Im happy to talk more about this in the interest of time i want to make sure that im respectful of the overall time constraints the chair talked about but im main to say that in reno, nevada, we are involving the Community College move twargd lithium mining processing as well as recycling, thank you. Thats great. We love our Community Colleges in nevada. Sec. Raimondo just to briefly add to what the director said, last friday we put out an additional funding application for small suppliers, additionally as i said earlier today we are committed to investing in or providing grants to small, medium and large semiconductor companies. In fact as we talked about, the United States lost about 25 of its small manufacturers in the past 25 years. Many of them are specialty chemical companies, Material Companies and so we are very much interested to partner with these companies, the Chips Program, to build out the entire supply chain all over the United States. Sen. Rosen i want to build on this in the rural arias and mining areas that director talked about too. Im a member of the Senate Armed Services committee, were thinking a lot about the National Security implications on the supply chain. Those big minerals are in the game in rural nevada. It is really important, were the nations lead for the hard rock mining and battery recycling. So talk about our work force, talking about all the things we can do, what more can congress do to bolster our Critical Minerals work force, strengthen our supply chain, thats naturally going to help our small and Rural Communities in nevada. Sec. Raimondo i think we need to continue to focus on it. We need a comprehensive National Plan as it relates to minerals. We at the Commerce Department are trying to set up a supply chain office in the Commerce Department so we can be proactiv, not just reactive in identifying all of our holes. Sen. Rosen thank you. Madam chair, i yield back my time. Thank you so much. Senator schmidt. Sen. Schmidt thank you, madam chair, good to see you. I want to get to two or three topics. As you know the d. O. D. Is in the process of this use, they talked about they issued a report, shared it with you, and theres a lot of hesitancy, i think, for a variety of reasons for other agencies. For a lot of reasons. Making additional spectrum available for commercial use. 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 nations spectrum strategy ought to be and what additional federal spectrum available for commercial use whether its licensed, shared, licensed or unlicensed. I think its critical, i serve on the Armed Services committee too in addition to this committee. Theres a balancing act, not just National Security but Economic Security. What are you doing specifically to have or evaluate the strategy here and what would you do tomorrow if d. O. D. Said the lower three are off limits entirely . Sec. Raimondo i think that would be deeply problematic. As we said earlier, we received a report at the end of last week and should arrange a briefing for d. O. D. And ndaa to provide that breefng what the report says tasms 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 shouldnt be a zero sum game. We can make more spectrum available and also not take anything away from the d. O. D. That they need to fulfill their mission. Sen. Schmitt in august you visited china. Shortly thereafter it was restleeld p. R. C. Hacked your email account and were privy to all your emails. In an interview with cnns state of the union, you said you were firm and direct. Do you think they viewed this as a sign of your weakness . Sec. Raimondo i do not. Sen. Schmit trveg are you aware of other senators you were emailing with they hacked . Sec. Raimondo the investigation is ongoing. It is concerning. It is more than concerning. Sen. Schmitt i want to switch things up. Senator vance asked a couple of questions in this regard. What does Climate Change have to do with broadband . Sec. Raimondo Climate Change has to do with everything. Tell me your exact question . Sen. Schmitt ill be happy to. You have Climate Change requirements. Eligible entities must account not only for current climaterelated risks but also how the frequency, severity and nature of the events may evolve as our climate continues to change. Can you tell me anywhere, anywhere, madam speaker, anywhere where congress has put into plaw lau that you would require them to mitigate Climate Change . Can you point to that section . Sec. Raimondo congress requires us to be good stewards of taxpayer dollars. To be accountable. Therefore we have to Fund Projects that will be successful. Otherwise well waste money. Sen. Schmitt you may think its important, President Biden thinks its important but congress hasnt set that requirement. Sec. Raimondo but you want us to fund things that are successful, if Climate Changes prevent success sen. Schmitt how does broadband in missouri have anything to do with your climate agenda . Sec. Raimondo i talk to people all the time in rural places that due to climate event theirs Current Technology doesnt work. Like they dont have the internet when theres a storm. So climate very definitely affects the effectiveness of certain. Sen. Schmitt i can tell you having been elected by rural states, theyre interested in their kids being able to Access Internet for homework. Theyre not interested in social experiments. Respectfully how are we how about we just deploy broadband. Sec. Raimondo your state will receive 1. 7 billion. Your governor will be providing us with a plan for how he feels it should be invested. So senator markey. Sen. Markey thank you. You have two of my alltime favorite witnesses here. Good to see you, madam speaker, and panch. You know when somebody has just one name, like bee beston say or cher or bono. So with the explosive growth over the past two decades, the Semiconductor Industry is a large contributeor to the climate crisis. Releasing the equivalent of annual emigs of 1. 4 million dheerns roads of the United States. Carbon emissions and water consumption are particularly intense in the production of the most advanced chips. As the Commerce Department prepares to issue 50 billion for chip manufacturing in we cannot ignore the Environmental Impact of this investment. Secretary ramon doe raimondo, i was pleased to see you are requiring people to submit climate and environment plans for their chips acts funds so madam speaker, i understand that youre committing to making sure Companies Make good on their environmental commitments . Sec. Raimondo yes. Its Good Business. Every c. E. O. Of every American Company will tell you, they have to manage risk. And theres risk associated with climate events. And if we dont plan for those climate events, then they can insert risk into these prompts, whether its broadband or chip. 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 a social agenda sen. Markey so major Manufacturing Activities including chip manufacturing can 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. To can you tell us how youre prioritizing that research so that truly green and clean in the Semiconductor Fabrication technologies . Sec. Raimondo 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 we want to see a sustainability plan that we can evaluate to make sure that theyre serious about these commitments. Sen. Markey so were going to open the federal taxpayers wallets to private sector company, if were going to do so we cant close our eyes to environmental harm where companies are located. We can do both at the same time. Now i want to move to the Environmental Impact of chip manufacture to the impact of chip use so big data, machine learn, a. I. 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 a. I. Algorithm out of millions of potential molds of algorithms would admit as much co2 as five cars over the algorithms lifetime. That could be millions of algorithms that are out there. So these data centers are using scarce Water Supplies across our country for cooling these chips. And while a. I. Proponents argue that a. I. Will solve most of our pressing problems, the Energy Required to pow they are technology is contributing to the biggest problem of them all. Climate change. So can you talk about how youre integrating your thinking at commerce on these issues as one solution to a set of problems could exacerbate a larger set of problems . Sec. Raimondo its such an excellent question. If you think about a. I. And the compute power required for training these large models, its much greater than any of us thought. One area of innovation in chips is making chips that consume less energy. So i the research and Development Money we will spend, the nftc, 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 others this wont 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. Sen. Markey i wish my mother could hear a Rhodes Scholar tell me i asked a good question. Finally on the labor front, good jobs that were 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 nonunion companies to provide workers a free and fair chance to gin a union and bargain in good faith. Thank you, madam chair. Madam secretary, good to have you here. Panc ferg h. Its good for my colleagues to have the chance to ask these questions about the chips and science act to make sure its implemented in accordance with congressional will. Madam secretary you highlight the importance of being a good steward of taxpayer dollars. Can you tell the committee, in summary fashion, how you worked hard to be a good steward of taxpayer dollars as it pertains to implementation of chips and science and then advice members who may be listening, because they asked me, how they can track on an ongoing basis implementation of chips and science dollars, these investments. Sec. Raimondo ok. We built a team of over 100 people toonlize each of these applications. Every company in order to receive money has to show us a financial plan, has to show us their books, their company, their research and development plarntion their National Security plans, their work force plans. And as i said earlier, this has nothing to do with social policy, this is ensuring that these company kans get the jop job done. You dont want, i dont want, my taxpayer money given to a company that wasnt dunt have a work force plan and therefore condition get the job done. So all those requirements are designed to do that. Furthermore, once we give the grant, or structure the grant, therell be like an agreement, a compliance agreement, theyre going to receive the money, contingent upon them doing certain things, and we will trawnch the money out on the basis of those milestones. Thank you. Ive had visibility into this process from the beginning and worked with you and members of your team who are implementing. I know you have hired on incredible talent, people with wall street experience, people who understand how much is needed for each of the stake holders and therefore much of your work is focused on making sure we dont overspend. So that we have more resources to spend more effectively and can advance national and Economic Security. With respect to the techa program, the regional tech and innovation program. Youve spoken to this already, madam secretary. The state of indiana, we submitted an application. It is dezic if designated it would help cement indianas position as a very important locus of biotech, medtech, genomics, and synthetic innovation. Congress has only appropriated a noafertion Tech Hubs Program funding what opportunities are we missing especially in regards to leveraging private Sector Investments but not prioritizing full funding of the program . Sec. Raimondo i want to thank you, youre a warrior to make sure the 500 million is in there. Its authorized at 10 billion. So were missing massive opportunities. We have 400 applications from over 40 states. And well only be able to make maybe five or six sizable grants. As i said earlier, well designate say 20 tech hub, plus or minus. Every one of them is probably worthy of maybe 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 missing out. Dr. Panch, relatedly, we introduced the creative a. I. Act to enhance the international Artificial Intelligence force to help us harness the techs amazing potential. Are you supportive of this create a. I. Act . Yes or no . Yes. Thank you. I have limited time but if you could expand on the importance of federally funded research including the National Science foundations national Artificial Intelligence research institutes, id appreciate that. And then the importance of appropriating the chips and science acts research authorization. I would note were discussing Artificial Intelligence and critical importance of this to our National Security. The National Security commission on a. I. Has recommended funding at 32 billion per year. Beginning in fiscal year 2026, Artificial Intelligence. That lays a predicate for your response. A. I. Is made possible because of investment to a. I. Over several decades. Here we are right now. And we have a competitor thats outinvesting in some of these areas. This is not the time to enter discussions, this is the time to invest, outinvest, outcompete never aspect of what we need to do with a. I. What we cannot have, and i want to make this clear. What we cannot have is a situation like in semiconductors today. Trying to put the bandaid, trying to get it back into work we cannot use that advantage in a. I. Or quantum or advanced wireless or wired technology, you name it. Im extremely concerned we are not moving fast enough because our competitors are outpacing us. We have a strategic advantage and we must not lose it. Senator baldwin. Sen. Baldwin thank you madam chair. Welcome to both of our Witnesses Today. Secretary raimondo, i want to thank you for your leadership in execute thinking 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 laudly 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 biohealth 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 work forest and work ethic. Wisconsin is poised to become a growth sector in this cutting edge and valuable industry. I do not envy your teams 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 products elsewhere. Thats 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, 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 department 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. 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 twhaild invent here, make here act. Great minds think alike. Thats what ill say. Our legislation goes a little bit further than the executive order. It actually forebids licenses from being granted to countries of concern as defined in chips and science to include the p. R. C. , 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, im interested to know your thoughts on the issue and the need for legislative action in this arena. Sec. Raimondo thank you. First of all, i fully agree with you that that did happen with semiconductors we used to make them in america. In search of cheap labor it all fled our shores and look where we are now. I strongly support what youre 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. Thats a perfect example of, because we in the Commerce Department have been holding their feet to the fire of those companies, we said were not going to give you a waiver. We dont believe we need to they found a way to manufacture in your state. Sen. Baldwin i want to make the distinction between buy american poll circumstances as you announced in kenosha, we cant necessarily source from nokia if theyre not going to make it here. But you work the buy america language, persuaded them to bring those job and that technology to the u. S. But here were talking about new inventions, funded by taxpayer dollars. And that, i feel, we have a special obligation as stewards of our tax dollars to keep the manufacturing here. Sec. Raimondo absolutely. I agree. Senator capito. Sen. Cap toa thank you both for being here with us today. A long afternoon. Secretary raimondo and dr. Panch, i guess, if i can call you that, i did vote for this bill. I think its very critical. Secretary, thank you for all of what youve done in broadband. Were looking forward to rolling this out, you and i have talked about this more than a few times. You know how important it is not just to me but the rest of the country. Im interested to hear that your agency, the department of commerce, has run into an unexpected hurdle in implementing chips, that being the nepa process. Im on the epw committee, im the Ranking Member. This is an issue, doesnt matter if its chip manufacture, broadband development, transmission, energy exemployee airks everything is being held up by the nepa process, the permitting process, and the ensuing little gaition delays that come forward. So then i heard that theres i mean senator cruz has an amendment with senator kelly to exempt the nepa process for the particular bill. You spoke in favor of that. Sec. Raimondo yes. Sen. Capito how does this administration with you as your representative actually square exempting one industry over another when its holding up progress, National Security, Energy Security, communication, everything. Why would that be a good idea . And how can this administration think thats a good idea . Sec. Raimondo i can uh only speak to chip and what i said earlier was, sometimes these processes could take, you know, 10 years. For chips its a National Security imperative. 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. Sec. Raimondo we agree on that. Im not into eliminating environmental protections. Sen. Capito but the lent of the prompts, Energy Security is as important as chip security. I would say transmission in this country is just as important as something that does manufacturing chips. Then if youre going to manufacture the chips youve got to mine them. And recover them. And that means you have to permit the mines. If you look at arsenic which is used in chips, 97 of it is from china. Cobalt, 70 of that is from cobalt. Rare earth elements, 60 from china. 10 if the United States. Titanium, 86 from japan. Noble gases from russia and ukraine. But we have these resources in this country. But we can be the get these mined these mines the permit. How are you going to go from permitting to fab when you cant get the materials permitted . Theres a disconnect here . I would be fine to try work this disconnect out because as i said in the beginning, i think this is exceedingly important for our future. Sec. Raimondo 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 chip. Im in no way saying the other issues arent also important and they you know they merit further discussion. Sen. Cap toa i think its rather ironic that an administration would actually make an exception for something they consider a marquee plan for them, in the best interest of the country, when theres other things that i think politically are more difficult to touch, that they wouldnt look for the streamlining of permitting which should be fair and even across the board. Without giving up any environmental control. I sit on the committee that does this. Ive been very strong on air and water all the way through. Theres a better way to do it. Let me just ask one quick question then you can respond. I think youve been asked this before. I do obviously have my West Virginia tech hub application in. Were all putting our foot on the scale for our own projects. I understand the Program Requires one third of tech hub grant designations must significantly benefit a small rural community. That means one out of the three hub designations under phase two would be rewarded to Rural Communities. Is that a safe statement . Sec. Raimondo one yes. Statutory requirement is one third in rural or small communities. Sen. Capito so thats still the plan . Sec. Raimondo yes. Senator sinema. Sen. Sinema if we could just hurry, if we can. Sen. Syman thank you for being here today. Im proud of played a role in getting chips and science signed into law. A year later, the impact on the economy is clear, nowhere more evident than my state, arizona. Weve led on chips since the 1940s and will continue to lead with the help of the chips and science act. The department of defense to allow Central Arizona to continue its great work. Since 2020, Central Arizona has led in semiconductor go these investments are essential but arizonas leading Semiconductor Manufacturing ecosystem is built on the hundreds of chip related Companies Working at all phases of the manufacturing life cycle wells as well as the academic institutions, Work Force Training program and Small Businesses that make it possible. Thats why it was so important to address Semiconductor Manufacturing. There was a time when it looked like the development portions of the law would follow this trend to less than fighting. Thankfully, senator young, myself and other members worked across the aisle to make sewer that didnt happen. So turning to our witnesses, i want to first start by welcoming and recognizing my friend and fellow arizonan, panch tharyngsd amazing work youre doing. I got to see your work in education, science and innovation firsthand at a. S. U. And in the senior advisory roles you have played in our State Government. Now i see that same dedicated insight implementing this legislation at the federal level so thank you. Thank you. Sen. Sinema my first question for you, the Work Force Education fund is essential to building an economy and rewarding careers. Can you comment on how the n. S. F. Funding along with publicprivate partnerships have helped get resources where theyre needed especially in arizona. Thank you. Senator sinema, truly a pleasure to hear from you. You are taking back to my years in arizona by what you said. Always a pleasure. The Work Force Investment that they are making to the chips and science act is 400 million over five years this year it is 25 million. We are focusing on ensuring that that investment for intel and micron as our partners who are coinvesting with us are being deployed in ensuring that we are training the work force not only in terms of what we do with Community Colleges and universities but also training the trainers, namely the teachers, in institutions so we have the pipeline of talent ensured for times to come. So were working on all of those Component Parts as we are thinking about deploying these resources. We are also talking on a project focused on internships with industry as well as making sure the efforts are also informed in. So its a comprehensive investment of what theyre doing with chips and science as well as the main investment of democrat which is is also prioritized key technologies. So i feel very happy. They are looking forward to the outcome which is very important in this time when theres so much need for a trained, skilled work force in semiconductors as was pointed out yesterday. Thank you so much for your support and championship of the chips and science act. Sen. Syman thank you. Secretary, i see what you outlined for the economic and National Security priorities at the heart of the chips and science act. To keep pace with these goals, and a robust American Work force the chips projects must be funded to be workable. Unfortunately the nepa reviews currently required for chips grans could slow down the Fund Disbursal and prevent actual construction by two years. This is a huge barrier to bringing these online as soon as possible. I worked on a bipartisan provision to streamline reviews. You testified previously before the House Science Committee you support this language. I want to check with you, do you still support it . Sec. Raimondo yes. Sen. Syman great. I have further questions i will send over but i will yield back for another member. Senator budd. Sen. Budd thank you, madam chair. Thank you both for being here. The Commerce Department has a lot of rollout responsibilities with the chips and science act and the broadband equity access and deployment bead program. So i need to hear youre going to adhere to Congress Intent in both of those laws. Serious concerns are coming to light in this administrations handling of 65 billion going to broadband. The secretary general said commerce is failing to do basing checks resulting in potential unlawful duplication. Recently the wall street journal reported that commercefunded broadband will cost more to bring broadband to a home than the assessed value of that home. Thats the wall street journal. Two 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 administrations extreme bias against nonfiber technologies. Technologies like 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 ton uncover, the department of commerce allocated washington, d. C. More than 547,000 per unserved location. 33 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 an alternative or Innovative Technology at an exponentially lower cost to taxpayers. So question. Would it be better for tax payers to spend 200,000 on a fiber connection to a single home thats worth 50,000, thats 200,000 to connection it, connection fee and cost, to a home worth 50,000 . Or would it be better to spend 500 connecting them oa high speed satellite . Sec. Raimondo thank you, senator, for your question. First, i want to say the statute provides thank you for the elaboration, if you could just answer is it better to spend 200,000 on a 50,000 or better to spend 500 connecting it to satellite . Sec. Raimondo it fends on the quality. It might be worth spending 200,000 of taxpayer money when you could do it for 500 . Did i hear that correctly . Sec. Raimondo this isnt my decision. Your governor and 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. Low quality satellite doesnt help anybody. Heres whats happening. Let me get to the point. Would it be worthwhile, heres whats actually happening. Would it be worthwhile for taxpayers to spend 200,000 on a fiber connection to a mansion thats worth 5 million . Sec. Raimondo nobody says fiber has to be used. There seems to be a bias toward fiber. Thats whats happening. Sts its happening right now because the Biden Administration, he has it has shunned wireless and sat rite alternatives. Further bidens bead rules allows for building finer to mansions and vacation homes. These rules prohibit states from funding nonfiber projects except in extreme situations. These are extreme situations you may have begun to elaborate on but unless they get a waiver from the federal government to do the alternative. So i urge you to eliminate tech bias in your rules. And put in sensible limits that would stop subsidizing millionaires. In the matter of time, id like to mention this report put out by the Ranking Member, the red light report, to stop waste, fraud and abuse in federal broadband funding and id like to submit it for the record. Without objection. Thank you, i yield back. I dont see senator sullivan. I know he wanted to ask questions but i dont see him on the screen. Im going to ask a few and then wrap it up here so you can get on to the meetings you both have. Secretary, supply chain resiliency depends on security. Theres a lot of discussion over the last several months about how to get that, particularly when it could be back door attempts to information and communication technology. Data that can be used illegally for surveillance or espionage or various things. We have looked at this issue and its been suggested to us that Something Like the guard act which would give congress, when we think about the Information Age and 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 back door of information, or information thats used in a way for purposes not friendly to our country. Like illegal foreign surveillance. So were concerned about targeting of military members. Their families. Immigrants. What do you think we should do about this . What do you think about the guard act . Sec. Raimondo im very supportive of the guard act proposal. Im often asked should we outlaw tiktok, this is bigger than tiktok. 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 a statutory set of tools, to have a comprehensive approach to these apps that pose National Security risks. Tiktok and others and so im supportive of attack it in a comprehensive, statutory way. Appreciate that. Director, were oversubscribed on the n. S. F. Side. Were oversubscribed. I suggest we have more conversation about this. How do we, from a scientific side tell our colleagues on the appropriations side that we have shortfalls that could i loved 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 distributed, pretty competitive, way better than a topdown model of other countries. But i also say two guys named bill created our economies, bill boeing and bill gates. Never know where the next bill will come from. Thats why we want a more distributed generation of r d. But what do we do about the shortfall with our appropriators that theres so much in the pipeline that could be effective . On so many levels. Im so glad you have been a supporter of the chips and science act. I know how hard you worked. Thank you very much. On behalf of the science and Technology Community we owe you a debt of gratitude. I just want to say that, let me take the basic research paradigm. 50,000 proposals. We fund 11,000 of them. 20,000 were told we should fund them. But theyre on the chopping floor, its a huge loss, our competitors are taking advantage of that. The secretary talked about they have proposals, we are not going to be able to fund all the top quality proposals that need to be invested in. These are things that are being left behind. I suggest 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 where we should be investing. But we dont have the resources. Thats what i think we need. Not that we want some people to have failing grades on these proposal bus so that were prioritizing and people can see that this is really what we need this hearing will remain open for the record the record will remain open for four 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 had a double feature today in the committee. Very good attendance which i think shows the interest of members, particularly to this afternoon in this very important legislation. Thank you both for your tremendous leadership on americas competitiveness. Were adjourned. [captions Copyright National cable satellite corp. 2023] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org]