President Biden plans to sign a recently passed bill that exempts some semiconductor projects from federal environmental reviews, despite an outcry from a trickle of Democrats saying the legislation undercuts protection in a decades-old law.

The decision is a break with key members of Mr. Biden’s party who said the bill is unnecessary and flies in the face of efforts to balance industry needs with the environment.

“President Biden plans to sign this bipartisan legislation which will allow us to continue our efforts to ensure Americans across the country can benefit from the promise of the Investing in America agenda while protecting communities and the environment,” a White House official said. “We look forward to working with communities, workers, other local stakeholders and members [of Congress] to make sure we are advancing those priorities.”

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The 2022 CHIPS and Science Act was a major legislative win for Mr. Biden that offered billions in subsidies to spur domestic semiconductor manufacturing, a bid to compete with China.

Yet it subjected the projects to federal environmental reviews under the National Environmental Policy Act.

The newer bill, the Building Chips in America Act, streamlines the process and exempts some projects from a review. It also limits the timeline for court challenges to projects.

The Senate passed it unanimously in December, and House GOP leadership whisked it to passage Monday under a suspension of the rules, a fast-track process requiring two-thirds support from the chamber to pass.

While dozens of Democrats linked arms with majority House Republicans to pass the bill, over 100 Democrats voted against it.

New Jersey Rep. Frank Pallone, the top Democrat on the House Energy and Commerce Committee, said chip projects seem to be on track, so the bill would needlessly undermine NEPA’s reviews.

“The CHIPS and Science Act is a success, but we cannot deflect from that success by once again attacking one of the most important environmental laws that protects all of our communities from corporate malfeasance,” Mr. Pallone said.  “This bill is a solution in search of a problem that doesn’t exist.”

The Sierra Club and other environmental groups urged Mr. Biden, unsuccessfully, to veto the bill.

However, some Democrats hailed the bill as essential to the U.S. economy and national security.

“By preventing unnecessary delays in the construction of microchip manufacturing facilities, this bill will help maximize our efforts to bring this industry back to America, creating thousands of good-paying jobs and strengthening our supply chains,” Sen. Mark Kelly, Arizona Democrat, said after the House passage.

Rep. Colin Allred, a Texas Democrat campaigning to unseat Republican Sen. Ted Cruz, also praised the measure.

“The CHIPS Act allows us to supercharge our chip manufacturing and compete with China. But we also need commonsense permitting reform,” Mr. Allred wrote on X. “Our bipartisan bill the Building Chips in America Act will do just that.”