This bill establishes a 25% tax credit for purchasing U.S.-made circuit boards and substrates while also creating a $3 billion federal incentive program to boost domestic manufacturing and research in these critical electronic components.
Blake Moore
Representative
UT-1
The Protecting Circuit Boards and Substrates Act establishes a 25% tax credit for purchasing U.S.-made printed circuit boards and integrated circuit substrates starting in 2026. It also creates a federal incentive program, managed by the Commerce Department, to provide up to $3 billion in funding to boost domestic manufacturing and research and development in these critical electronic components. The program prioritizes national security needs, workforce development, and supports for small and diverse-owned businesses.
New Act Offers 25% Tax Credit for U.S.-Made Circuit Boards, Authorizes $3 Billion for Domestic Chip Supply
The newly proposed Protecting Circuit Boards and Substrates Act is a big deal for anyone who uses electronics—which is, well, everyone. This bill targets the very foundation of modern technology: the printed circuit boards (PCBs) and integrated circuit substrates that power everything from your phone to your car. The goal is simple: stop relying on offshore manufacturing for these critical components and bring production back home.
The 25% Discount on Domestic Components
Starting in 2026, the bill introduces a significant incentive via the tax code. If a business buys or pays for U.S.-fabricated printed circuit boards or integrated circuit substrates, they can claim a tax credit equal to 25% of the cost. This credit is added to the general business credit, meaning it directly lowers the tax bill for companies that choose to source these components domestically (Sec. 2).
Think about what this means for a small tech startup or a mid-sized medical device manufacturer. If they spend $1 million on circuit boards, they get $250,000 back on their taxes, essentially making the U.S.-made product much more competitive on price. This is a clear signal to businesses to adjust their supply chains and prioritize American factories.
Building the Factories of Tomorrow
The second, and perhaps bigger, part of this bill is the creation of a massive federal financial assistance program run by the Secretary of Commerce (Sec. 3). This program is designed to hand out federal money—up to $300 million per project—to "covered entities" that want to build, expand, or upgrade facilities in the U.S. for manufacturing or researching PCBs and substrates.
If you’re a construction worker, an engineer, or someone looking for a career change, this program means new, high-tech factories are coming to American soil, bringing with them specialized jobs. The bill authorizes $3 billion to fund this program through 2065, showing a long-term commitment to shoring up this part of the supply chain.
Carrots, Sticks, and Community Buy-In
To get this federal money, applicants must commit to a few things. Large companies need to show a solid sustainability plan (proving they won't need endless federal handouts) and commit to worker and community benefits. This includes providing or paying for job training and education, and partnering with local schools or vocational programs to hire economically disadvantaged individuals (Sec. 3). This requirement is designed to ensure that federal investment not only creates jobs but also builds a skilled, local workforce.
However, there’s an important exception: Small businesses are completely exempt from these requirements. They don’t need a complex sustainability plan or the specific community benefit commitments. This is meant to make it easier for smaller players to jump in, but it does mean the federal government might be subsidizing the operational costs of some small firms without the same long-term community guarantees required of the big players.
National Security and the Clawback
Security is a core driver of this bill. The Secretary of Commerce is specifically told to prioritize applicants who are small businesses, or those that will increase U.S. production capacity, or—most notably—those moving manufacturing out of a location controlled by a “foreign entity of concern.” Furthermore, no funds can go to any entity determined to be a “foreign entity of concern” (Sec. 3).
To make sure the money is spent correctly and on time, the bill includes strict “clawback” provisions. If a project is significantly delayed past its target dates, the Secretary must recover the award money, potentially up to the full amount. There’s also a technology clawback: if the recipient knowingly works with a “foreign entity of concern” on joint research that raises national security concerns, they have to pay back the entire award. While the Secretary can waive the delay clawback in cases of unforeseen circumstances, they must formally notify Congress, which provides an important layer of oversight.