Protecting Circuit Boards and Substrates Act

Bill Number

H.R. 3597

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Commerce

Status

Introduced

Latest Action

2025-05-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-07-01T08:08:47Z

AI-Generated Summary

Purpose

The Protecting Circuit Boards and Substrates Act aims to encourage the domestic production of printed circuit boards (PCBs) and integrated circuit substrates—key components in electronics like computers and military equipment—by offering tax credits and financial incentives. This is intended to strengthen U.S. national security, reduce dependence on foreign suppliers (especially those posing security risks), and boost economic competitiveness through increased manufacturing, research, and workforce development in the United States.

Key Provisions

• Tax Credit (Section 2):
• Introduces a new 25% tax credit for businesses that purchase or acquire PCBs or integrated circuit substrates made in the U.S.
• Applies to costs incurred after December 31, 2025.
• Defines key terms: A PCB is a layered structure connecting electronic components; an integrated circuit substrate links chips to a base like a PCB; "fabricated" means manufacturing from raw materials using techniques like etching or adding layers.
• The credit becomes part of the general business tax credit system under the Internal Revenue Code.

• Financial Assistance Program (Section 3):
• Establishes a program run by the Secretary of Commerce to provide federal funding (up to $3 billion authorized from fiscal year 2026 through 2065) to eligible entities for building, expanding, or modernizing U.S.-based facilities for PCB and substrate manufacturing or research and development.
• Eligibility and Application: Entities (private companies, consortia, or public-private partnerships) must submit plans showing sustainable projects, commitments to worker training and community investment (e.g., hiring economically disadvantaged people), and partnerships with educational institutions. Small businesses get simplified requirements.
• Preferences: Prioritizes small, minority-owned, women-owned, or veteran-owned businesses; projects relocating from foreign-controlled areas; and those involving training at historically Black colleges, minority-serving institutions, Tribal colleges, or rural schools.
• Exclusions and Limits: Bars funding to "foreign entities of concern" (e.g., certain Chinese firms linked to security risks, as defined in existing law). Awards capped at $300 million per project unless higher amounts are approved for national security needs.
• Use of Funds: Supports construction, equipment, workforce training, research, and operational costs like specialized materials or maintenance.
• Clawback Mechanisms: Requires repayment if projects are delayed (with waivers possible for uncontrollable reasons) or if recipients collaborate on sensitive tech with foreign entities of concern.
• Oversight: Mandates coordination with agencies like Defense, Energy, State, and Intelligence; Government Accountability Office (GAO) biennial reviews for 10 years; and record-keeping to ensure proper use.

Significant Changes to Existing Law

• Adds a new Section 45AA to the Internal Revenue Code, creating the first targeted tax credit specifically for U.S.-made PCBs and substrates, building on general business credits but focusing on this sector.
• Introduces a dedicated federal program under the Department of Commerce for incentives in PCB manufacturing, which did not previously exist at this scale. It references and builds on definitions from laws like the National Defense Authorization Act and Higher Education Act, but creates novel preferences for underrepresented businesses and clawback rules tied to national security.
• Authorizes long-term funding (through 2065), a departure from typical short-term appropriations, to sustain industry growth.

Potential Impacts

• On Government Agencies: Increases workload for the Department of Commerce (program administration), IRS (tax credit processing), and coordinating agencies like Defense and Intelligence (national security reviews). GAO oversight ensures accountability but adds reporting burdens. Could enhance inter-agency collaboration on supply chain security.
• On Citizens: May create jobs in manufacturing and training, especially for economically disadvantaged, minority, or rural communities through prioritized workforce programs. Tax credits could lower costs for U.S. electronics buyers, indirectly benefiting consumers via more reliable domestic supply chains.
• On International Relations: Reduces U.S. reliance on foreign (e.g., Asian) PCB production, potentially straining ties with countries hosting "entities of concern" like China. Promotes "reshoring" of manufacturing, which could improve U.S. leverage in trade negotiations but risk retaliatory tariffs or supply disruptions.

Main Stakeholders Affected

• Manufacturers and Businesses: U.S.-based PCB producers, tech firms, and small/minority/women/veteran-owned enterprises benefit from funding and credits; foreign-linked firms face exclusion.
• Educational and Training Institutions: Historically Black colleges, minority-serving schools, Tribal colleges, and vocational programs gain from workforce partnerships and funding preferences.
• Workers and Communities: Economically disadvantaged individuals, veterans, and rural populations could see expanded job opportunities in high-tech manufacturing.
• Government and Security Entities: Departments of Commerce, Defense, Energy, and State; Intelligence Community; and Small Business Administration handle implementation and reviews.
• Taxpayers: Fund the $3 billion authorization through federal budgets, with returns via economic growth and security.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens national security by restricting funds to foreign adversaries, aligning with existing export controls and defense laws, but requires careful implementation to avoid challenges under trade agreements (e.g., WTO rules on subsidies). Clawback provisions enforce accountability but could lead to disputes over "unforeseeable" delays.
• Constitutional: Supports Congress's powers to tax, spend for general welfare, and regulate commerce/interstate economy. Preferences for minority-owned businesses echo affirmative action precedents, promoting equity without mandating quotas.
• Political: Advances bipartisan goals of supply chain resilience (e.g., post-COVID vulnerabilities), but funding scale and long duration may spark debates on industrial policy vs. free markets. Exclusions for foreign entities could heighten U.S.-China tensions, positioning the bill as a tool for economic nationalism.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Moore, Blake D. [R-UT-1]

Cosponsors (23)

Rep. Krishnamoorthi, Raja [D-IL-8], Rep. Davis, Donald G. [D-NC-1], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Magaziner, Seth [D-RI-2], Rep. LaLota, Nick [R-NY-1], Rep. Subramanyam, Suhas [D-VA-10], Rep. Moore, Tim [R-NC-14], Rep. Harrigan, Pat [R-NC-10], Rep. Neguse, Joe [D-CO-2], Rep. Bergman, Jack [R-MI-1], Del. Moylan, James C. [R-GU-At Large], Rep. Carbajal, Salud O. [D-CA-24], Rep. Gooden, Lance [R-TX-5], Rep. Conaway, Herbert C. [D-NJ-3], Rep. Sorensen, Eric [D-IL-17], Rep. Finstad, Brad [R-MN-1], Rep. McGuire, John J. [R-VA-5], Rep. Rogers, Mike D. [R-AL-3], Rep. Ryan, Patrick [D-NY-18], Rep. Strickland, Marilyn [D-WA-10], Rep. McBride, Sarah [D-DE-At Large], Rep. Wittman, Robert J. [R-VA-1], Rep. Fallon, Pat [R-TX-4]

Recent Actions

• 2025-05-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-23: Referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-05-23: Introduced in House
• 2025-05-23: Introduced in House

Bill Versions

• Protecting Circuit Boards and Substrates Act — issued 2025-05-23 — PDF (23 pages)