Prince George’s CHIPS Act aims to spur semiconductor industry, attract federal subsidy recipients – The Business Journals
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“We want to be more than a warehouse county,” said one bill sponsor.
Property tax rebate legislation recently introduced in the Prince George’s County Council aims to attract investments in semiconductor R&D and manufacturing spurred by the gargantuan federal stimulus of those sectors that passed last year.
Last August, President Joe Biden signed the CHIPS — Creating Helpful Incentives to Produce Semiconductors — and Science Act into law. It’ll shower the microchip and certain related industries with billions of dollars in direct subsidies, tax credits and other assistance, and also boost research funding for government agencies, with the goal of repatriating chip production that’s largely been offshored to Asia.
To incentivize more of that federal rain to fall on Prince George’s, three county council members have introduced local legislation — with the same acronym as the federal version — that would offer certain property tax breaks, further allaying costs for companies to set up shop or expand their semiconductor-related operation in the county.
“Let’s steer some of that investment to Prince George’s” and “not wait until we’re at the tail end of this opportunity, while all of our neighbors who have stronger IT sectors benefit first,” Council member Mel Franklin, D-At large, one of the bill’s sponsors, said in an interview. Council members Sydney Harrison and Calvin Hawkins, D-District 9 and D-At large, respectively, also sponsored the bill.
The bill got its first reading at the council’s meeting Tuesday. Next it’ll go into committee, probably in the fall.
Franklin said Prince George’s is home to industrial land that too often goes for warehousing, but could go for chip-related operations. “We want to be more than a warehouse county,” he opined, saying he’d rather see local industrial properties become “the focal point for the semiconductor industry.”
Specifically, Prince George’s CHIPS Act, if passed, would reimburse companies for the net increase in their real estate and personal property tax bill, owing to their building or expanding qualifying semiconductor R&D and/or manufacturing facilities in the county, for 10 years — minus any other county tax incentives the same projects might’ve received. A fiscal impact for the legislation was not yet available.
That benefit would in turn, it’s hoped, attract beneficiaries of the federal CHIPS legislation. The latter represents a major piece of industrial policy and a ton of money — $280 billion all told, including $39 billion in financial assistance to companies to build, expand or upgrade R&D and manufacturing facilities, $11 billion to establish the National Semiconductor Technology Center, and private investment tax credits worth another $24 billion.
In general, Prince George’s has “a great opportunity” to secure R&D dollars from the feds’ CHIPS spending, David Iannucci, president and CEO of Prince George’s County Economic Development Corp., said in an emailed statement.
The region’s localities are keen to get the edge in the budding quantum computing sector. Prince George’s sees itself as an emerging leader, with the University of Maryland already among the largest recipients of federal funding in the field, Iannucci said, and College Park already home to IonQ Inc. (NYSE: IONQ), “the most advanced and well-capitalized public pure play quantum computing company in the world,” CEO Peter Chapman said in a March press release.
Vennard Wright, founder of Wave Welcome LLC, an Oxon Hill-based IT consultancy, and co-chair of the Prince George’s County Tech Council, an industry group, is less optimistic about quantum’s local growth potential, saying in an interview the county lacks the niche workforce to support it. He’s more focused on growing the county’s broader semiconductor manufacturing base, which has the “scale and potential to really become an industry that Prince George’s County can double down on,” and for which the county produces sufficient engineering graduates, he said.
“When it comes to head-to-head competing in terms of R&D, Prince George’s County is probably not going to be on the leading edge of that,” he said, referring to Northern Virginia and other competitor regions with “a more specialized workforce.” Whereas a stronger manufacturing sector in Prince George’s would “offer jobs for a lot of different people who are at different points on the continuum,” he said.
Alexander Austin, who heads the Prince George’s Chamber of Commerce, expressed his support for the local CHIPS bill in an interview, reiterating the availability in the county of warehouses that might be converted into lab space. He also noted the local capture of microchip investments would positively impact the local economy more broadly, rippling out to businesses and organizations like suppliers, service providers and community colleges.
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