II 109th CONGRESS 2d Session S. 2335 IN THE SENATE OF THE UNITED STATES February 28, 2006 Mr. Bayh introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To clarify the role of the Director of National Intelligence, amend the Defense Production Act of 1950 to clarify the notification and investigation requirements, and for other purposes.

1.

Short title

This Act may be cited as the Smart and Secure Foreign Investment Act.

2.

Director of National Intelligence

Section 102A(a) of the National Security Act of 1947 (50 U.S.C 403–1(a)) is amended by adding at the end the following: (3)The Director of National Intelligence shall— (A)assist the President in conducting investigations under section 721(b) of the Defense Production Act of 1950 (50 U.S.C. App. 2170(b); (B)serve as a member of the Committee on Foreign Investment in the United States (or any successor committee); and (C)certify to the President and the Committee that there are no national security implications in connection with a proposed merger, acquisition, or takeover described in section 721(b) of the Defense Production Act of 1950 before the proposed merger, acquisition, or takeover is reviewed by the Committee. .

3.

Defense production act

(a)

In general

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 (i) and (m), respectively; and (2)by inserting after subsection (f) the following: (g)

Notification and investigation

(1)

Notification

(A)

In general

Any entity described in subparagraph (B) shall notify the President at least 60 days before a proposed merger, acquisition, or takeover described in subparagraph (B)(ii). (B)

Entity described

An entity described in this subparagraph is an entity that— (i)is controlled by, or acting on behalf of, a foreign government; and (ii)seeks to engage in a merger, acquisition, or takeover of a United States entity or any other entity that has energy assets valued at $1,000,000,000 or more or that operates a critical infrastructure, if that merger, acquisition, or takeover could result in control of a person engaged in interstate commerce in the United States that could affect the national security of the United States. (2)

Investigation

A mandatory investigation under subsection (b) shall be required in the case of a merger, acquisition, or takeover described in paragraph (1)(B)(ii) by an entity described in paragraph (1)(B). (h)

President's designee defined

In this section, the term President's designee means the Secretary of Commerce, the Secretary of Defense, the Secretary of Homeland Security, the Secretary of State, the Secretary of the Treasury, the Attorney General, the Director of National Intelligence, and appropriate employees of the Executive Office of the President. . (b)

Notification

Section 721(i) of the Defense Production Act of 1950 (50 U.S. C. App. 2170(i)), as redesignated by subsection (a)(1), is amended— (1)by striking The President and inserting the following: (1) Report on action.—The President; and (2)by adding at the end the following: (2)

Report on notification

The President shall immediately transmit to the Secretary of the Senate and the Clerk of the House of Representatives and to appropriate State officials written notification as soon as the President receives a notification under subsection (b) or (g). (3)

Public hearings

The President shall hold public hearings on any proposed merger, acquisition, or takeover described in subsection (b) or (g)(1). . (c)

Factors To Be considered

Section 721(f) of the Defense Production Act of 1950 (50 U.S.C. App. 2170(f)) is amended— (1)by striking and at end of paragraph (4); (2)by striking the period at the end of paragraph (5) and inserting ;; and (3)by adding at the end the following: (6)the robust and expanding defense capabilities of the country in which the acquiring entity is located; and (7)the nature of the bilateral relationship of the United states with the country in which the acquiring entity is located. .