The Prince George's County Council recently discussed CB-072-2023, also known as the Prince George's County Creating Helpful Incentives to Produce Semiconductors ("CHIPS") Act of 2023. This bill aims to boost the economy and create job opportunities in the high-tech semiconductor industry within the county.
Semiconductors, also called "chips," are primarily composed of silicon and possess the unique ability to adjust their conductivity levels. This characteristic makes them essential in many electronic devices, such as computers, smartphones, appliances, and medical devices. The semiconductor industry fuels investment in specific manufacturing companies and various investment vehicles. As such, the semiconductor industry is an important gauge for the overall economy's health, influencing both U.S. and global markets.
The CHIPS Act of Prince George's County aligns with the Biden Administration's CHIPS and Science Act of 2022, which emphasizes the significance of the semiconductor industry for the U.S. economy, national security, and future technological advancements. However, while the national CHIPS Act has broader objectives of strengthening semiconductor production in the U.S. and reducing reliance on foreign producers, the Prince George's County CHIPS Act is specifically focused on the county level.
Definitions in bill
The CHIPS Act provides clear definitions for important terms such as "semiconductor," "manufacturing," "research and development," and "site." For example, in the bill, a semiconductor is defined as an electronic device that performs various functions like processing information and converting energy. Manufacturing refers to the processes involved in producing and finishing items, including those in the supply chain. Research and development refers to the creation of new or improved technology. And a site refers to a specific physical location described in an application for incentives related to semiconductor production.
Ten-year incentive program
The CHIPS Act offers a ten-year incentive program for entities engaged in county semiconductor research, development, and manufacturing. For one to be eligible for the incentive, an applicant's site must utilize over 70% of its buildings and facilities for semiconductor production (excluding packaging and storage). After considering other tax credits, incentives, discounts, and taxes from the previous year, the maximum annual incentive will cover the cost of county taxes on real and personal property related to the site and activities.
The incentive program also covers constructing or renovating buildings and facilities for semiconductor production. The program will last ten years after the initial award year, and only semiconductor production activities that start after the program's effective date will be eligible. Recipients of the incentive are required to participate in the county's mentor-protégé program.
The Prince George's County Office of Finance will oversee the incentive program, including the application and approval procedures. The County Executive has the authority to involve other county agencies in supporting the Office of Finance. This collaborative approach ensures effective and efficient program management, with clear oversight and accountability measures in place.
Bill sponsors and Next Steps
CB-072-2023, the Prince George's County CHIPS Act of 2023, was presented during the Council's July 11th session and referred to the Government Operations and Fiscal Policy Committee. Council Members Franklin, Harrison, and Hawkins sponsored the bill.
Below you can find the full text of the bill