Short title

This Act may be cited as the

Committee on Foreign Investment in the United States Reform Act

Clarification of review and investigation process

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is amended by striking subsections (a) and (b) and inserting the following new subsections:

(a)

National security review

(1)

In general

Upon receiving written notification, as prescribed by regulations under this section, of any proposed or pending merger, acquisition, or takeover by or with any foreign person which could result in foreign control of any person engaged in interstate commerce in the United States, the President or the President's designee shall review the proposed or pending merger, acquisition, or takeover to determine whether the proposed or pending merger, acquisition, or takeover may possibly have an effect on the national security of the United States. (2)

Procedure

The President or the President's designee shall establish, by regulation, procedures that— (A)require each of the factors listed in subsection (f) to be considered in the course of a review under paragraph (1); and (B)require a specific response to be prepared with respect to the applicability of each such factor to the proposed or pending merger, acquisition, or takeover under review. (3)

Involvement of foreign government

If the review under paragraph (1) determines that the merger, acquisition, or takeover could result in the control, directly or indirectly, of any person engaged in interstate commerce in the United States by a foreign government or an entity controlled by or acting on behalf of a foreign government, the merger, acquisition, or takeover shall be treated as possibly having an effect on the national security of the United States for purposes of requiring an investigation under subsection (b). (4)

Approval of secretary

In the case of any review of a merger, acquisition, or takeover under paragraph (1) that involves or has resulted in any agreement that establishes any conditions on the transaction, or any requirements for any person involved in the transaction, in order to mitigate against any possible effect of the transaction on the national security of the United States, any determination resulting from the review shall not be treated as final until the determination is approved by the President, the Secretary of the Treasury, or the Deputy Secretary of the Treasury. (5)

Timing

Any review required under paragraph (1) shall be completed before the end of the 30-day period beginning on the date of the receipt by the President or the President's designee of written notification of the proposed or pending merger, acquisition, or takeover. (b)

National security investigation

(1)

In general

If any review of any proposed or pending merger, acquisition, or takeover under subsection (a) results in a determination that the merger, acquisition, or takeover may possibly have an effect on the national security of the United States, the President or the President’s designee shall conduct an investigation of— (A)the possible effects of the merger, acquisition, or takeover on the national security of the United States; and (B)possible actions to protect the national security of the United States in connection with the merger, acquisition, or takeover. (2)

Procedure

The President or the President's designee shall establish, by regulation, procedures that— (A)require any investigation under paragraph (1) to analyze the proposed or pending merger, acquisition, or takeover on the basis of each of the factors listed in subsection (f); (B)require a specific response to be prepared with respect to the applicability of each such factor to the proposed or pending merger, acquisition, or takeover under review, the concerns that any such applicability raises with regard to the transaction, and any possible actions to address such concerns; (C)subject to paragraph (3), establish appropriate time frames for an investigation that ensures sufficient time to address relevant issues concerning any proposed or pending merger, acquisition, or takeover; (D)take into account the impact of investigations on the open investment policy of the United States; and (E)in any case in which the investigation under paragraph (1) is conducted by a designee of the President, provide guidance to the designee for determining the manner and under what circumstances the designee shall report the results of the investigation and the recommendations of the designee to the President for the President’s consideration. (3)

Timing

Any investigation required under paragraph (1) shall be completed before the end of the 45-day period beginning on the date of the determination under subsection (a) that the merger, acquisition, or takeover may possibly have an effect on the national security of the United States.

Authority to take certain actions after withdrawal of notice

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is amended— (1)by redesignating subsection (k) as subsection (o); and (2)by inserting after subsection (j) the following new subsection:

(k)

Authority in case of withdrawal of notice

In the case of any withdrawal of written notice submitted by a person or entity under subsection (a)(1) of any proposed or pending merger, acquisition, or takeover before any review or investigation under subsection (a) or (b), as the case may be, is completed, the President or the President's designee shall establish— (1)interim protections to address specific concerns with such merger, acquisition, or takeover that have been raised in connection with any such review or investigation pending any resubmission of such written notice by such person or entity and further action by the President under this section; (2)specific timeframes for resubmitting any such written notice; and (3)a process for tracking any actions that may be taken by such person or entity in connection with such merger, acquisition, or takeover prior to resubmitting any such written notice.

Additional factors required to be considered

Section 721(f) of the Defense Production Act of 1950 (50 U.S.C. App. 2170(f)) is amended— (1)in the matter preceding paragraph (1)— (A)by striking may and inserting shall; and (B)by striking among other factors; (2)by striking and at the end of paragraph (4); (3)by striking the period at the end of paragraph (5) and inserting a semicolon; and (4)by adding at the end the following new paragraphs:

(6)whether the acquisition affects the critical infrastructure of the United States; (7)whether an entity controlled by or acting on behalf of a foreign government is involved in the transaction; and (8)such other factors as the President or the President’s designee may determine to be appropriate, generally or in connection with a specific investigation.

Increased oversight by the congress

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is amended by inserting after subsection (k) (as added by section 3 of this Act) the following new subsections:

(l)

Annual report to the congress

(1)

In general

The President or the President's designee shall transmit a report to the Congress before January 31 of each year on all the reviews under subsection (a) and the investigations under subsection (b) conducted during the preceding year. (2)

Contents of report

The report under paragraph (1) shall contain the following information with respect to each proposed or pending merger, acquisition, or takeover covered by the report which was reviewed under subsection (a) or investigated under subsection (b): (A)The national security concerns, if any, raised by any agency contacted in connection with or involved in any aspect of such review and investigation. (B)The manner in which any such concerns were mitigated either by action of the President or the President's designee or by the action of any party to the merger, acquisition, or takeover. (C)Whether the merger, acquisition, or takeover was consummated, abandoned, or remained pending at the end of the year covered by the report. (m)

Quarterly report on transactions under consideration

(1)

In general

Before the end of the 10-day period beginning on the 1st day of each calendar quarter, the President or the President's designee shall transmit a report to the Congress on all transactions which, as of the last day of the preceding calendar quarter, were under review under subsection (a) or under investigation under subsection (b). (2)

Contents

The report under paragraph (1) shall contain such information as may be necessary to inform the Congress of the nature and scope of each transaction, the national security implications of each transaction, the parties to each transaction, the possible terms of any contemplated, pending, or completed mitigation agreement or other limitations or requirements that may be imposed as a condition for approval of the transaction, and such other information that may be useful to the Congress or requested by the Congress in reviewing such transaction.

Statutory establishment of the Committee on Foreign Investment in the United States

Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 2170) is amended by inserting after subsection (m) (as added by section 5 of this Act) the following new subsection:

(n)

Committee on foreign investment in the United States

(1)

Establishment

The Committee on Foreign Investment in the United States established pursuant to Executive Order No. 11858 (hereafter in this section referred to as the Committee shall be a multi-agency committee to carry out this section as the designee of the President and such other assignments as the President may designate. (2)

Membership

The Committee shall be comprised of the following members or their designee: (A)The Secretary of the Treasury. (B)The Secretary of Commerce. (C)The Secretary of Defense. (D)The Secretary of State. (E)The Attorney General. (F)The Secretary of Homeland Security. (G)The Chairman of the Council of Economic Advisors. (H)The United States Trade Representative. (I)The Director of the Office of Management and Budget. (J)The Director of the National Economic Council. (K)The Director of the Office of Science and Technology Policy. (L)Any other designee of the President from the Executive Office of the President. (M)The Director of National Intelligence. (3)

Chairperson

The Secretary of the Treasury shall be the Chairperson of the Committee. (4)

Other members

The Chairperson of the Committee shall involve the heads of such other Federal agencies in any investigation under subsection (a) as the Chairperson determines to be appropriate on the basis of the facts and circumstances of the transaction under investigation or the designee of any such agency head. (5)

Meetings

The Committee shall meet upon the direction of the President or upon the call of the Chairperson of the Committee. (6)

Hearings and evidence

The Committee may, for the purpose of carrying out this section— (A)hold such hearings and sit and act at such times and places, take such testimony, receive such evidence, administer such oaths; and (B)subject to paragraph (7)(A), require, by subpoena or otherwise, the attendance and testimony of such witnesses and the production of such books, records, correspondence, memoranda, papers, and documents as the Chairperson of the Committee may determine advisable. (7)

Subpoenas

(A)

Issuance

(i)

In general

A subpoena may be issued under this subsection only by direction of the President or the Chairperson. (ii)

Signature

Subject to clause (i), subpoenas issued under this subsection may be issued under the signature of the Chairperson and may be served by any person designated by the Chairperson or by a member designated by a majority of the Committee. (B)

Enforcement

In the case of contumacy or failure to obey a subpoena issued under subparagraph (A), the United States district court for the judicial district in which the subpoenaed person resides, is served, or may be found, or where the subpoena is returnable, may issue an order requiring such person to appear at any designated place to testify or to produce documentary or other evidence. Any failure to obey the order of the court may be punished by the court as a contempt of that court.