• House Transportation and Infrastructure Committee Holds DOT Oversight Hearing with Secretary Buttigieg 
• New Federal Aviation Administrator Confirmed
• House and Senate Hold Hearings to Review CHIPS One Year Later
• Congress Considers Legislation Related to Commercial Space
• House Appropriations Committee Releases FY 2024 CJS Report

• EDA Announces Tech Hubs Phase 1 Designees and Strategy Grant Recipients
• DOT Advisory Committee on Transportation Equity Holds First Meetings

• Webinar Invitation Good Jobs and the Role of Universities in Federal Workforce and Economic Development Initiatives 
• CHIPS and Science Act of 2022 Funding Update 
• FTA Releases Advanced Digital Construction Management Systems Program Solicitation
• Lewis-Burke Analysis of the Federal Economic Development and Commercialization Landscape
• Lewis-Burke Memorandum on Federal Opportunities for Large Scale Development

• Brookings Institution: What the New Tech Hubs Designations Mean for Boosting Innovation Across the US
• White House OSTP Releases Fact Sheet: Vice President Harris Launches Women in the Sustainable Economy Initiative

Under the new CR, funding for four government agencies, including the U.S. Department of Transportation (DOT), is provided through January 19 while the rest, including the National Science Foundation (NSF) and the U.S. Department of Commerce (DOC), are funded through February 2, 2024.  While a government shutdown has been avoided for the time being, hard decisions regarding funding for FY 2024 still need to be made and there has been little progress on negotiations surrounding issues causing the most separation between Republicans and Democrats, including poison pill policy riders and disagreements over spending cuts.    

Still, Congress is continuing to consider, and in some cases, pass individual appropriations bills.  The Senate recently passed its FY 2024 funding bill for DOT by a vote of 82-15.  Meanwhile, the House of Representatives attempted to consider its Commerce, Justice, Science, and Related Agencies appropriations bill on the floor in November but had to pull the measure when it was clear it did not have the votes to pass.  The bill would have proposed drastic cuts to economic development and innovation programs, among other items.  Economic development and transportation programs reliant on annual appropriations to function will be harmed if Congress fails to finalize FY 2024 funding because a full year CR could trigger a 1 percent across the board cut to all defense and non-defense programs compared to FY 2023 funding levels.  Under both CRs and during government shutdowns, most federal agencies are prohibited from funding new programs, which severely limits the resources that will be accessible for research, innovation, and economic development programs.  

While not expected to move forward in the legislative process before the end of the year, there continues to be discussions in the relevant Senate committees on efforts to reauthorize the Small Business Administration (SBA), the Economic Development Administration (EDA), and the Federal Aviation Administration (FAA).  The FAA will likely need to be extended at least one more time to avoid complications with air traffic control across the United States before a reauthorization is able to be passed.  It has been over twenty years since either the SBA and the EDA were reauthorized and the current interest in pursuing reauthorization provides an important opportunity to modernize operations of both agencies.  

Finally, federal agencies continue to roll out funding announcements for marquee programs created by competitiveness and infrastructure legislation, including the Bipartisan Infrastructure Law and the CHIPS and Science Act.  The U.S. Department of Energy recently announced the selection of seven awardees of its first Regional Clean Hydrogen Hubs solicitation.  These aim to accelerate the development of affordable clean hydrogen across the United States.  Additionally, EDA has made its first selection of Designees and strategy development grant recipients for its Regional Technology and Innovation Hubs (Tech Hubs) program and released its Phase 2 solicitation for Designees.  NSF is expected to announce the winners of the Type 2 award through its Regional Innovation Engines program soon.  A map of finalists for both programs can be found here.  These programs and the momentum behind them demonstrate the enduring commitment on behalf of the Biden Administration and Congress to invest in economic development and innovation across the United States. 

CONGRESSIONAL UPDATES
House Transportation and Infrastructure Committee Holds DOT Oversight Hearing with Secretary Buttigieg 
The House Transportation and Infrastructure Committee (T&I) recently held a hearing on oversight of policies and programs at the U.S. Department of Transportation (DOT).  Chairman Sam Graves (R-MO) started the hearing criticizing the Biden Administration’s approach to DOT policies, stating that he believes the Department has been marred by inefficiencies and plays favorites by preferring urban-centric transportation and infrastructure projects.  Chairman Graves also raised concerns about supply chain disruptions and the impact on inflation.  Conversely, Ranking Member Rick Larsen (R-WA) highlighted the work of House and Senate Democrats and the Biden Administration in passing the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law.  Secretary Buttigieg’s remarks centered on the IIJA and ongoing DOT efforts to modernize and improve transportation and infrastructure systems across the country.  Secretary Buttigieg emphasized the importance of enhancing transportation safety, ensuring equitable access to transportation services, and addressing environmental sustainability, especially in the context of electric vehicle infrastructure.  Other areas discussed during the hearing included ethical sourcing of cobalt in the use of electric vehicles, diversity, equity, and inclusion initiatives across DOT, rail safety and the East Palestine, Ohio derailment, air traffic control safety and the reliability of air traffic control systems, the role of the federal government in building out electric vehicle charging stations, and the use of reclaimed asphalt in road construction.  

New Federal Aviation Administrator Confirmed  
In October, the U.S. Senate voted 98-0 to confirm Michael Whitaker, President Biden’s nominee to serve as Administrator of the Federal Aviation Administration (FAA).  This fills a gap at the top of the FAA that has been open for over 18 months.  Administrator Whitaker brings more than 30 years of aviation experience from a variety of roles in industry and government, including serving as Deputy FAA Administrator from 2013-2016.  This is a vital moment for FAA leadership, as the agency is under scrutiny due to a series of close calls on runways at major airports across the country.  During the confirmation hearing, Administrator Whitaker highlighted that safety would be the FAA’s highest priority under his leadership.

House and Senate Hold Hearings to Review CHIPS One Year Later  
In mid-September, the House Science, Space, and Technology Committee (HSST) held a hearing to discuss the implementation of the CHIPS and Science Act of 2022 (CHIPS and Science).  As previously reported by Lewis-Burke, CHIPS and Science seeks to strengthen U.S. competitiveness in the semiconductor research and development ecosystems, as well as in the broader science and technology innovation landscape through various large-scale initiatives and programs.  Since many of these initiatives are being overseen by the U.S. Department of Commerce (DOC), Secretary of Commerce Gina Raimondo served as the only witness, overviewing the agency’s success in implementing key innovation programs like the Regional Innovation and Technology Hubs (Tech Hubs), as well as key semiconductor R&D initiatives like the National Semiconductor Technology Center (NSTC).  While many of the questions posed to Secretary Raimondo focused on how industry may utilize CHIPS funding, some questions centered around how key CHIPS and Science R&D programs will leverage existing agency expertise and remain coordinated on efforts, as well as how programs at research institutions should be leveraged to support widespread innovation.  There were targeted questions on workforce development plans for CHIPS programs, how Tech Hubs will work with and complement the NSTC and other CHIPS and Science programs, and what long-term benchmarks for success DOC is considering for these programs.   Since this hearing was held, the DOC announced the Phase 1 Tech Hub Designees and Strategy Development Grant recipients and the NSTC implementation process has begun with the announcement of the center’s operator.  It is likely that as these programs continue to progress, Congress will continue to exercise oversight over agency leadership on program implementation.  

A few weeks later, Commerce Secretary Gina Raimondo and National Science Foundation (NSF) Director Sethuraman “Panch” Panchanathan appeared before the Senate Commerce, Science, and Transportation Committee for a complementary hearing on the implementation of CHIPS and Science.  In the hearing Secretary Raimondo noted that DOC will only be able to fund a limited number of Tech Hubs (the NOFO estimated 5-10 would receive Phase 2 Implementation funding) from the nearly 400 applications they received, demonstrating how the interest in the program vastly outweighs DOC’s ability to fund high quality proposals.   Meanwhile, Director Panchanathan spoke to the importance of NSF Regional Innovation Engines and confirmed that final awards will be made before the end of the year.  He also highlighted how NSF exceeded benchmarks outlined in CHIPS and Science to increase investment in EPSCoR states.  Several Committee members noted that CHIPS and Science programs were underfunded in recent appropriations bills, comments which could be pertinent should Congress consider additional supplemental funding for these initiatives as they did in FY 2023. 

Congress Considers Legislation Related to Commercial Space  
The House and Senate have been busy working on establishing a new policy framework to authorize and regulate commercial space activities.  The House and the Senate both held hearings which sought industry input on how to best oversee and regulate commercial activities in space.  On November 2nd the House released their draft commercial space reauthorization bill the Commercial Space Act of 2023.  The bill would elevate the Office of Space Commerce (OSC) out of the National Oceanic and Atmospheric Administration, establishing it as its own entity within the Department of Commerce (DOC).  Also, it would further clarify OSC’s regulatory authority for the commercial space certification process.  This bill will also work to promote more innovation and would create a Private Space Activity Advisory Committee that would be responsible for reviewing the effectiveness and efficiency of the industry and areas for improvement.   The House Science, Space, and Technology Committee voted 21-17 along party lines to advance the Commercial Space Act of 2023 to the floor of the House of Representatives.  Given the litany of must-pass legislative items that need to be addressed by the end of calendar year 2023 or early in 2024, it is unclear at this time when the Commercial Space Act of 2023 will be voted on by the full House.  The Senate is also expected to release their version of the bill early next year.  

In November, the White House also unveiled their own legislative proposal for commercial space regulation.  Different from the House bill, the White House proposal would split responsibility for overseeing space activities between the Department of Transportation (DOT) and DOC.  Currently, DOT regulates space launches, however, industry has expressed concerns that the agency is not equipped to expand beyond their current role to oversee additional commercial space activities that would be enabled by a commercial space reauthorization.  These differences will need to be reconciled before a final bill is signed into law, and continued disagreement could limit any progress being made.  

House Appropriations Committee Releases FY 2024 CJS Report   
The House Appropriations Committee released the explanatory statement for its fiscal year (FY) 2024 Commerce, Justice, Science, and Related Agencies (CJS) appropriations bill, which was approved by the CJS Subcommittee in July.  It looks unlikely that the bill will be considered by the full Appropriations Committee and will instead go straight to floor consideration by the full House.  The bill would provide a total of $58.7 billion in FY 2024 funding for the National Science Foundation (NSF), National Institute of Standards and Technology (NIST), and Economic Development Administration (EDA), among other agencies.  This reflects a nearly 30 percent decrease compared to the FY 2023 enacted level although please note that agencies and programs fair vastly differently across the bill, with some such as NSF proposed for small increases while others such as EDA would face deep cuts.  Notably and in line with other House appropriations priorities, the explanatory statement includes language to prohibit funding for workforce diversity programs within science agencies.  This controversial provision is not likely to be approved by the Senate and House Democrats have voiced opposition to the bill. 

Below are additional details on the House CJS FY 2024 bill and explanatory statement.  Specific funding information is available in the charts following the narrative.  

National Science Foundation (NSF)  
The House CJS bill would provide NSF with $9.63 billion, which is $91 million above the FY 2023 enacted level excluding supplemental funding for CHIPS and Science Act implementation.  Including all supplemental funding, the proposed funding in the House bill would be $246.45 million or 2.5 percent below the FY 2023 total NSF funding level.  While the House proposal is $130 million above the Senate proposal, it falls $1.72 billion short of the president’s budget request.  It is also far less than the $15.6 billion authorized for NSF in FY 2024 under the CHIPS and Science Act.  It is important to note that the House explanatory statement language compares its FY 2024 numbers with NSF funding levels for FY 2023, excluding the CHIPS and Science Act supplemental and the base supplemental that NSF received in FY 2023, essentially comparing FY2024 appropriations with FY 2022 funding levels for NSF.  

The Subcommittee also included language stating that the committee recognizes the role of NSF in “maintaining America’s competitive research advantage over China” through increased support for science and technology.  It also notes that the Subcommittee supports translational research, including the efforts of the Directorate for Technology, Innovation, and Partnerships (TIP) and encourages the use of public-private partnerships to advance emerging technology areas.  Furthermore, unlike the Senate report, the House explanatory statement does not specify funding for the Regional Innovation Engines program.  

National Institute of Standards and Technology (NIST) 
NIST would receive $1.48 billion in the House bill, a decrease of $150 million or 9.2 percent below the FY 2023 level; $155 million or 9.5 percent below the president’s budget request; and $29.1 million or 2 percent above the Senate’s proposed level.  The statement would continue to support most of NIST’s long-standing priorities including quantum information science (QIS), artificial intelligence (AI), and cybersecurity.  However, the House would explicitly not provide funding for NIST’s Center of Excellence in Climate Change, Greenhouse Gas Measurements program or its Diversity, Equity, Inclusion and Accessibility Initiative.  The statement also emphasizes the importance of Creating Helpful Incentives to Produce Semiconductors (CHIPS) awards and reporting requirements, including the implementation of China guardrails for CHIPS awards, bolstering a secure domestic semiconductor supply chain, and requiring NIST congressional briefings for specific awards and funding milestones. 

Economic Development Administration (EDA)  
EDA would be funded at $254.5 million, $243.5 million or 49 percent below the FY 2023 enacted level, $211.5 million below the Senate’s proposed FY 2024 funding level, and $549.5 million below the discretionary amount included in the FY 2024 budget request.  The Subcommittee indicates that some of the cuts proposed by the FY 2024 bill are indicative of their perception of “dwindling congressional and public interest in many legacy EDA programs” and “in response to growing calls to reduce or eliminate the EDA.”  It is unclear where calls to reduce funding or to eliminate EDA are coming from as the agency has recently rolled out some of its most popular programming to date.  It should be noted that the Trump Administration also proposed eliminating EDA in every budget request they provided.  At the time, funding was continuously restored by Congress, and it is expected that overly drastic cuts to the EDA’s budget in FY 2024 will not be allowed by the Senate or Biden Administration.  

The Regional Technology and Innovation Hubs Program (Tech Hubs) would receive $41 million dollars in FY 2024. This is equivalent to flat funding when compared to the Senate funding proposed and the base discretionary funding provided by the FY 2023 omnibus appropriations bill but would be significantly lower than the full funding received by the program in FY 2023, which included $459 million in supplemental funding.  The amount proposed in the House statement would be $7.5 million less than the discretionary funding level proposed by the FY 2024 president’s budget request, though it is important to note the budget request also called for an additional $1.5 billion in mandatory spending for the Tech Hubs program in FY 2024.  

EDA released the first round of competition for Strategy Development Grants and Tech Hub Designations in the Spring, designated 31 Tech Hubs in the Fall, and is now inviting designated regions to apply for full Implementation awards.  Despite EDA already launching the program, the Subcommittee statement provides a range of recommendations for designated geographies, agencies to collaborate with in the implementation of the program, and funding.  Some of these recommendations were addressed in the final solicitation, such as encouraging EDA to allow multiple Metropolitan Statistical Areas (MSAs) to apply as consortia, presumably indicating the original language was drafted early in the competition process.  Of note, the Subcommittee expresses support for coordination between EDA, the Department of Defense, and NSF in the development of both the Tech Hubs and NSF Regional Innovation Engines programs and would require a report on the coordination between these agencies on the two programs within 180 days if enacted.  The language would also recommend including more EPSCoR states in “early award tranches” to ensure they have enough time to reach maturation, and of the rural-facing Tech Hubs required by law, prioritizing proposals that include proven regional strategies that utilize innovative solutions to bridge urban and rural economies.  

The explanatory statement would fund the Regional Innovation Program (RIP, now known within EDA as Build to Scale) at $50 million, which would be flat funding compared to the FY 2023 enacted level and the FY 2024 funding level proposed by the Senate.  This funding would be a $5 million increase above the FY 2024 president’s budget request.  If enacted, this would be the second year that the RIP program has received its authorized level of funding.  The statement would also urge EDA to use funds from the RIP program to invest in high-tech business incubators based at institutions of higher education to diversify distressed manufacturing and legacy communities in both rural and urban areas.  Additionally, the House Subcommittee would recommend that EDA allocate up to $2 million to “support a regional innovation cluster to drive innovation, job creation, and market demand in the advanced wood products sector,” which the explanatory statement asserts would advance rural economic development.  

The Economic Adjustment Assistance program would receive $39.5 million, which is flat funding when compared to the FY 2023 enacted level and the Senate’s proposed FY 2024 funding and would be a $6.5 million increase over the FY 2024 budget request.  The Public Works program would not receive funding under the FY 2024 House bill, which is a $121.5 million cut to FY 2023 enacted funding and $111.5 million less than the proposed funding level by the Senate.  The Subcommittee notes its funding recommendations stem from reduced congressional support for the programs.  In addition to the Public Works Program, the Recompete Pilot Program, the STEM Apprenticeship Program, the Good Jobs Challenge, and the Research and Evaluation Program would not receive funding.  This represents a $41 million dollar cut from the FY 2023 enacted level for the Recompete Pilot Program, or a $200 million cut when considering additional supplemental funding, and a $2.5 million dollar cut from the FY 2023 enacted level for the STEM Apprenticeship Program.  The Good Jobs Challenge, which was created and funded by the American Rescue Plan, did not receive annual appropriations in FY 2023 but had $97 million in funding proposed by the FY 2024 president’s budget request and $25 million proposed by the Senate.  The Senate did not propose funding for the Recompete Pilot Program in their FY 2024 bill but would provide $2.5 million for the STEM Apprenticeship Program.  

Similar to last year’s House explanatory statement, the Subcommittee would recommend that EDA allow funding from other federal sources to be considered for the matching requirement for EDA projects and would direct EDA to ensure that its grant programs avoid duplication with other federal funding sources. The statement also provides $80.5 million to support assistance to coal communities and encourages EDA to prioritize comprehensive and well-orchestrated economic growth strategies for these areas.  The Subcommittee encourages EDA to support communities looking to expand the presence of the aeronautics industry, prioritize broadband infrastructure projects for underserved areas, and prioritize projects that address challenges facing rural America. 

FEDERAL AGENCY AND ADMINISTRATION UPDATES 
EDA Announces Tech Hubs Phase 1 Designees and Strategy Grant Recipients
The U.S. Department of Commerce’s Economic Development Administration (EDA) recently designated 31 regions as inaugural Regional Technology and Innovation Hubs (Tech Hubs) after applicants demonstrated to EDA that they have the assets, team, and vision to be globally competitive in key technology areas within the next decade.  EDA also made 29 strategy development awards for regions to continue to grow their ecosystems.  In addition, EDA released a Notice of Funding Opportunity (NOFO) for Phase 2 of the Tech Hubs program.  Through this NOFO, which is only open to Designated Tech Hubs, EDA intends to select 5-10 initial consortia to receive implementation funding to support a series of interconnected projects that address inhibitors to global success.  In their responses to this NOFO, applicants will need to justify investments in projects as integral to the region’s growth and leadership in their identified technology areas through increased innovation, technology maturation, business creation, investment, industry engagement, and more.  

Applicants for Phase 2 are strongly encouraged to carefully review the NOFO, which provides extensive detail on project expectations; reporting, equity, risk mitigation, workforce, environmental, and security requirements; and more.  In general, the NOFO allows regions to be relatively creative in defining their needs, structure, and Component Projects.  The program will follow an overall structure that is similar to past EDA programs like the Build Back Better Regional Challenge (BBBRC) in which consortia members will apply for funding for 3-8 closely aligned Component Projects that align with a broader Overarching Narrative provided by the lead member. 

The 3-8 Component Projects could support a number of construction and non-construction activities across four broad categories: workforce development, business and entrepreneur development, technology maturation, and infrastructure.  While potentially driven by individual entities, there needs to be a clear cohesion between all projects in a Hub as part of an articulated narrative that the sum of the Tech Hub’s parts and projects are needed to catalyze private sector investment and achieve tangible outcomes for the region’s growth and sustainability as described in the Overarching Narrative.  Applications for Phase 2 are due February 29, 2024.  Lewis-Burke’s full write-up of the Tech Hubs Phase 2 funding opportunity is available here.  

In addition to Phase 2 funding, designated Tech Hubs will have access to additional federal support and technical assistance to continue to expand.  EDA is expecting to run another Tech Hubs competition in fiscal year (FY) 2024, contingent upon appropriations.

• “Expanding Access – increasing social and economic opportunity for historically overburdened and underserved communities by providing affordable, multi-modal transportation options and the development of a transportation cost burden measure; 
• Power of Community – ensuring that individuals and communities have a greater voice in transportation decisions that affect them;    
• Interventions – committing to ensure that historically overburdened and underserved communities benefit from access to a generational investment in the nation’s infrastructure through direct, hands-on technical support for transportation projects with local impact; and  
• Wealth Creation – building capital, expanding business networks, and attaining new skills and experience for small and disadvantaged businesses through increased USDOT contracting opportunities.”