Short title

This Act may be cited as the

Port Operations Require Tough Scrutiny (PORTS) Act of 2006

Commencement of investigations

(a)

Discretionary investigations

Section 721(a) of the Defense Production Act of 1950 (50 U.S.C. App. 2170(a)) is amended— (1)in the second sentence, by striking 30 days and inserting 60 days; (2)by inserting after the second sentence the following new sentence: The 60-day period specified in the preceding sentence may be extended by an additional 10 days if the President or the President’s designee determines that it is appropriate to do so.; and (3)in the fourth sentence (as so redesignated), by striking such determination and inserting a determination is made under this subsection that an investigation should be undertaken. (b)

Mandatory investigations

Section 721(b) of the Defense Production Act of 1950 (50 U.S.C. App. 2170(b)) is amended— (1)in paragraph (1), by striking 30 days and inserting 60 days; and (2)by adding at the end the following new sentence:

The 60-day period specified in paragraph (1) may be extended by an additional 10 days if the President or the President’s designee determines that it is appropriate to do so.

(c)

Effective date

The amendments made by subsections (a) and (b) apply with respect to written notifications of proposed or pending mergers, acquisitions, or takeovers received pursuant to section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) on or after the date of the enactment of this Act.

Additional mandatory investigations

(a)

Amendments

Section 721(b) of the Defense Production Act of 1950 (50 U.S.C. App. 2170(b)), as amended by section 2(b) of this Act, is further amended— (1)in the first sentence— (A)by striking The President or the President’s designee and inserting the following new paragraph:

(1)

In general

The President or the President’s designee

;

(B)by striking in which an entity and inserting

in which— (A)an entity

;

(C)by striking which could result in control and inserting

which could result in— (i)control

;

(D)by striking the period at the end and inserting

; or (ii)control of a person engaged in interstate commerce in the United States that could affect the critical infrastructure of the United States; or

; and

(E)by adding at the end the following new subparagraph:

(B)a foreign person seeks to engage in any merger, acquisition, or takeover which could result in foreign control of persons engaged in interstate commerce in the United States that could affect the critical infrastructure of the United States.

;

(2)in the second sentence— (A)by striking Such investigation and inserting the following new paragraph:

(2)

Requirements relating to commencement and completion

(A)

In general

An investigation described in paragraph (1)

; and

(B)by redesignating paragraphs (1) and (2) as clauses (i) and (ii), respectively, and moving the margins of clauses (i) and (ii) (as so redesignated) 4 ems to the right; (3)in the third sentence (as added by section 2(b)(2) of this Act), by striking The 60-day period specified in paragraph (1) and inserting the following new subparagraph:

(B)

Extension of commencement

The 60-day period specified in clause (i)

; and

(4)by adding at the end the following new paragraph:

(3)

Definition

In this subsection, the term critical infrastructure— (A)has the meaning given the term in section 2(4) of the Homeland Security Act of 2002 (6 U.S.C. 101(4)); and (B)includes seaports in the United States.

(b)

Effective date

The amendments made by subsection (a) apply with respect to written notifications of proposed or pending mergers, acquisitions, or takeovers received pursuant to section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) on or after the date of the enactment of this Act.

Report; action with respect to certain mandatory investigations

(a)

Amendments

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is amended— (1)by redesignating subsections (g) through (k) as subsections (h) through (l), respectively; and (2)by inserting after subsection (f) the following new subsection:

(g)

Report; action with respect to certain mandatory investigations

(1)

Report

If the determination of the President or the President’s designee pursuant to an investigation described in subsection (b)(1)(A)(ii) of this section is that the President or the President’s designee, as the case may be, approves or does not otherwise object to the merger, acquisition, or takeover which is the subject of the investigation and the President decides not to take action pursuant to subsection (d) of this section with respect to the merger, acquisition, or takeover, as the case may be, then the President shall, not later than 30 days after the date on which the investigation is completed, transmit to the Congress a report that contains the decision of the President not to take action pursuant to subsection (d) of this section with respect to the merger, acquisition, or takeover, as the case may be. (2)

Action pursuant to joint resolution

If, not later than 45 days after the date on which the Congress receives the report referred to in paragraph (1), a joint resolution described in paragraph (3) is enacted into law, then the President shall take such action under subsection (d) of this section as is necessary to prohibit the merger, acquisition, or takeover which is the subject of the investigation, including, if the merger, acquisition, or takeover, as the case may be, has been completed, directing the Attorney General to seek divestment or other appropriate relief in the district courts of the United States. (3)

Joint resolution described

For purposes of paragraph (2), the term joint resolution means a joint resolution of the Congress, the sole matter after the resolving clause of which is as follows: That the Congress disapproves the decision of the President contained in the report transmitted to the Congress pursuant to section 721(g)(1) of the Defense Production Act of 1950 on _________., with the blank space being filled with the appropriate date. (4)

Computation of review period

In computing the 45-day period referred to in paragraph (2), there shall be excluded any day described in section 154(b) of the Trade Act of 1974 (19 U.S.C. 2194(b)).

(b)

Effective date

The amendments made by subsection (a) apply with respect to investigations commenced under section 721(b)(1)(A)(ii) of the Defense Production Act of 1950 (as added by section 3(a)(1)(D) of this Act) on or after the date of the enactment of this Act.

Annual report

(a)

Amendments

Subsection (h) of section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170(g)), as redesignated by section 2(a)(1) of this Act, is amended— (1)in the heading, by striking

Report

and inserting

Reports

; (2)by striking The President and inserting the following:

(1)

Report on presidential action

The President

; and

(3)by adding at the end the following new paragraph:

(2)

Annual report

(A)

In general

The President or the President’s designee shall transmit to the appropriate congressional committees an annual report that contains— (i)a description of each written notification of a proposed or pending merger, acquisition, or takeover received pursuant to this section during the preceding year, including, with respect to each such written notification involving a merger, acquisition, or takeover described in subsection (b)(1)(A)(ii), an analysis of the corporate structure of the entity controlled by or acting on behalf of a foreign government, including whether or not the entity is a publicly-traded corporation, and an identification of the majority shareholder or shareholders; and (ii)a description of the determination to undertake or not undertake an investigation of the merger, acquisition, or takeover referred to in clause (i) and the reasons therefor. (B)

Definition

In this paragraph, the term appropriate congressional committees means— (i)the Committee on Homeland Security and the Permanent Select Committee on Intelligence of the House of Representatives; and (ii)the Committee on Homeland Security and Governmental Affairs and the Select Committee on Intelligence of the Senate.

(b)

Effective date

The report required to be transmitted to Congress under section 721(h)(2) of the Defense Production Act of 1950 (as added by subsection (a) of this section) shall be transmitted beginning in 2007 and each subsequent calendar year.

Technical amendments

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170), as amended by this Act, is further amended— (1)in subsection (d), by striking Subject to subsection (d) and inserting Subject to subsection (e); (2)in subsection (e), by striking the authority conferred by subsection (c) and inserting the authority conferred by subsection (d); and (3)in subsection (h)(1) (as redesignated by section 2(a)(1) and further amended by section 3(a)(2) of this Act), by striking subsection (c) of this Act and inserting subsection (c) of this section.

Verification of security measures under the Customs-Trade Partnership Against Terrorism (C–TPAT) program and the Free and Secure Trade (FAST) program

(a)

General verification

Not later than one year after the date of the enactment of this Act, and on a biannual basis thereafter, the Commissioner of the Bureau of Customs and Border Protection of the Department of Homeland Security shall verify on-site the security measures of each individual and entity that is participating in the Customs-Trade Partnership Against Terrorism (C–TPAT) program and the Free And Secure Trade (FAST) program. (b)

Policies for noncompliance with C–TPAT program requirements

The Commissioner shall establish policies for non-compliance with the requirements of the C–TPAT program by individuals and entities participating in the program, including probation or expulsion from the program, as appropriate.