Texans in Congress take bipartisan path to boost semiconductors, a crucial industry to the state

U.S. Sen. Ted Cruz, R-Texas, speaks at the Texas Blockchain Summit in Austin on Nov. 18, 2022. (Azul Sordo/The Texas Tribune, Azul Sordo/The Texas Tribune)

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WASHINGTON — Texas officials want their state to be the center of the global semiconductor revolution, and members of Congress from across the political spectrum are pushing to make it happen.

A new measure led by a diverse group of Texans — including Republican U.S. Sen. Ted Cruz and one of his 2024 challengers, Democratic U.S. Rep. Colin Allred — are seeking to streamline environmental review requirements for new investments in the state’s semiconductor industry, a move that industry backers say would drastically increase competitiveness. Cruz and his Senate partners recently added the measure into the upper chamber’s annual defense bill.

“This language will help Texas, already the nation’s leading chip producer, continue to grow this burgeoning industry and bring more jobs to the Lone Star State while boosting America’s economic and national security,” Cruz said in a statement.

The move follows the CHIPS and Science Act signed into law last year, also shepherded by a coterie of Texans eager to boost the industry in the state. U.S. Sen. John Cornyn, R-Texas, was a key leader on the legislation, which created federal grants to promote domestic semiconductor manufacturing.

As competition between the United States and China escalates, Congress has been working since last year to shore up technological competitiveness to allow the U.S. to become the center of the global semiconductor industry. Semiconductors are vital for a vast array of technology, from cellphones to electric vehicles, but the industry is dominated by Taiwanese, South Korean and Chinese producers.

Although he supported efforts to boost the state’s semiconductor industry, Cruz voted against the CHIPS and Science Act in 2022, expressing concern that sending grants directly to companies could invite “cronyism and corruption.” All Texas Republicans in the House also voted against the bill except for U.S. Reps. Michael McCaul of Austin and Kay Granger of Fort Worth. Both are defense hawks who have repeatedly warned about growing technological competition with China.

The latest measure, introduced as the Building Chips in America Act, would exempt some projects receiving CHIPS Act funding from having to undergo certain environmental reviews under the National Environmental Policy Act. It also would put the Commerce Department in charge of environmental reviews for other projects and streamline reviews by avoiding the need for duplicate studies from other federal agencies.

Environmental reviews under the National Environmental Policy Act, commonly called NEPA, require thorough documentation of government projects for potential environmental impacts — including a study of alternate projects that could have less impact on the environment. The reviews include public comment periods and may require an analysis by other agencies affected by the projects.

Members of both parties have criticized NEPA’s environmental reviews, which can take months or years, for holding up critical infrastructure, with many Republicans criticizing the hurdles as stifling bureaucracy that chokes off new oil and gas projects.

Many Democrats say the reviews can delay the robust development of renewable energy that is needed to reach the Biden administration’s climate and infrastructure goals.

“This bipartisan bill is a common-sense change that will ensure that the CHIPS Act delivers on its promise and these critical projects can get approved,” Allred said in a statement.

But environmentalists are uncomfortable watering down NEPA reviews. Nearly 80 Democrats in the U.S. House wrote to party leaders and President Joe Biden in May to oppose permitting reform that would have shortened NEPA review periods.

Allred and McCaul joined several other members of both parties to introduce the Building Chips in America Act in the House. Allred is making bipartisanship and moderation a focus of his campaign to unseat Cruz in the 2024 Senate race, in contrast to Cruz’s frequently aggressive partisan style.

But on this issue, Cruz and Allred have set aside almost polar-opposite politics, illustrating the importance of the semiconductor industry to Texas.

Already, firms including Texas Instruments, Samsung, X-FAB and NXP Semiconductors have announced billions of dollars in projects in the state. Texas Instruments announced a new $30 billion fabrication plant in Sherman, and Samsung plans to build a $17 billion plant in Taylor.

Of the $200 billion in investments announced since the CHIPS and Science Act was passed, more than $61 billion is bound for Texas, potentially creating more than 8,000 jobs, according to CNBC and the Semiconductor Industry Association.

Cruz joined Sen. Mark Kelly, D-Arizona, to push for the Building Chips in America Act to be tacked on to the National Defense Authorization Act as part of a large package of amendments. The $886 billion defense bill passed the Senate just before Congress broke for its monthlong August recess. Kelly introduced the bill in the Senate.

The U.S. House also passed its version of the defense act in July but added a number of right-wing priorities, including limiting gender-affirming care and banning service members from being reimbursed for abortion-related travel. House and Senate negotiators will work to resolve differences in the two bills in September.

The defense policy bill has traditionally been among the most bipartisan pieces of legislation Congress addresses every year. The Senate’s version of the bill passed smoothly on a widely bipartisan basis, but the House version received only four Democratic votes.

Disclosure: Texas Instruments has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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