[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1677 Considered and Passed Senate (CPS)]
111th CONGRESS
1st Session
S. 1677
To reauthorize the Defense Production Act of 1950, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 16, 2009
Mr. Dodd (for himself and Mr. Shelby) introduced the following bill;
which was read twice, considered, read the third time, and passed
_______________________________________________________________________
A BILL
To reauthorize the Defense Production Act of 1950, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Defense Production
Act Reauthorization of 2009''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Reauthorization of Defense Production Act of 1950.
Sec. 3. Declaration of policy.
Sec. 4. Priority in contracts and orders.
Sec. 5. Designation of energy as a strategic and critical material.
Sec. 6. Strengthening domestic capability.
Sec. 7. Expansion of productive capacity and supply.
Sec. 8. Definitions.
Sec. 9. Voluntary agreements and plans of action for national defense.
Sec. 10. Employment of personnel; appointment policies; nucleus
executive reserve; use of confidential
information by employees; printing and
distribution of reports.
Sec. 11. Defense Production Act Committee.
Sec. 12. Annual report on impact of offsets.
SEC. 2. REAUTHORIZATION OF DEFENSE PRODUCTION ACT OF 1950.
(a) Termination of Act.--
(1) Termination.--Section 717 of the Defense Production Act
of 1950 (50 U.S.C. App. 2166) is amended--
(A) by striking subsections (a) and (b) and
inserting the following:
``(a) Title I (except section 104), title III, and title VII
(except sections 707, 708, and 721 ) shall terminate on September 30,
2014, except that all authority extended under title III on or after
the date of enactment of the Defense Production Act Reauthorization of
2009 shall be effective for any fiscal year only to such extent or in
such amounts as are provided in advance in appropriations Acts.
``(b) Notwithstanding subsection (a), any agency created under a
provision of law that is terminated under subsection (a) may continue
in existence, for purposes of liquidation, for a period not to exceed 6
months, beginning on the date of termination of the provision
authorizing the creation of such agency under subsection (a).''; and
(B) in subsection (c), by striking the second
undesignated paragraph.
(2) Repeals.--Titles II, IV, V, and VI of the Defense
Production Act of 1950 (50 U.S.C. App. 2151 et seq., 2101 et
seq., 2121 et seq., and 2131 et seq.) are repealed.
(b) Authorization of Appropriations.--Section 711 of the Defense
Production Act of 1950 (50 U.S.C. App. 2161) is amended--
(1) in subsection (a)--
(A) in the first sentence, by striking
``(including'' and all that follows through ``) by''
and inserting ``by''; and
(B) by striking ``(a) Authorization.--Except as
provided in subsection (b), there'' and inserting
``There''; and
(2) by striking subsection (b).
SEC. 3. DECLARATION OF POLICY.
(a) Findings.--Section 2 of the Defense Production Act of 1950 (50
U.S.C. App. 2062) is amended to read as follows:
``SEC. 2. DECLARATION OF POLICY.
``(a) Findings.--Congress finds that--
``(1) the security of the United States is dependent on the
ability of the domestic industrial base to supply materials and
services for the national defense and to prepare for and
respond to military conflicts, natural or man-caused disasters,
or acts of terrorism within the United States;
``(2) to ensure the vitality of the domestic industrial
base, actions are needed--
``(A) to promote industrial resources preparedness
in the event of domestic or foreign threats to the
security of the United States;
``(B) to support continuing improvements in
industrial efficiency and responsiveness;
``(C) to provide for the protection and restoration
of domestic critical infrastructure operations under
emergency conditions; and
``(D) to respond to actions taken outside of the
United States that could result in reduced supplies of
strategic and critical materials, including energy,
necessary for national defense and the general economic
well-being of the United States;
``(3) in order to provide for the national security, the
national defense preparedness effort of the United States
Government requires--
``(A) preparedness programs to respond to both
domestic emergencies and international threats to
national defense;
``(B) measures to improve the domestic industrial
base for national defense;
``(C) the development of domestic productive
capacity to meet--
``(i) essential national defense needs that
can result from emergency conditions; and
``(ii) unique technological requirements;
and
``(D) the diversion of certain materials and
facilities from ordinary use to national defense
purposes, when national defense needs cannot otherwise
be satisfied in a timely fashion;
``(4) to meet the requirements referred to in this
subsection, this Act provides the President with an array of
authorities to shape national defense preparedness programs and
to take appropriate steps to maintain and enhance the domestic
industrial base;
``(5) in order to ensure national defense preparedness, it
is necessary and appropriate to assure the availability of
domestic energy supplies for national defense needs;
``(6) to further assure the adequate maintenance of the
domestic industrial base, to the maximum extent possible,
domestic energy supplies should be augmented through reliance
on renewable energy sources (including solar, geothermal, wind,
and biomass sources), more efficient energy storage and
distribution technologies, and energy conservation measures;
``(7) much of the industrial capacity that is relied upon
by the United States Government for military production and
other national defense purposes is deeply and directly
influenced by--
``(A) the overall competitiveness of the industrial
economy of the United States; and
``(B) the ability of industries in the United
States, in general, to produce internationally
competitive products and operate profitably while
maintaining adequate research and development to
preserve competitiveness with respect to military and
civilian production; and
``(8) the inability of industries in the United States,
especially smaller subcontractors and suppliers, to provide
vital parts and components and other materials would impair the
ability to sustain the Armed Forces of the United States in
combat for longer than a short period.
``(b) Statement of Policy.--It is the policy of the United States
that--
``(1) to ensure the adequacy of productive capacity and
supply, Federal departments and agencies that are responsible
for national defense acquisition should continuously assess the
capability of the domestic industrial base to satisfy
production requirements under both peacetime and emergency
conditions, specifically evaluating the availability of
adequate production sources, including subcontractors and
suppliers, materials, skilled labor, and professional and
technical personnel;
``(2) every effort should be made to foster cooperation
between the defense and commercial sectors for research and
development and for acquisition of materials, components, and
equipment;
``(3) plans and programs to carry out the purposes of this
Act should be undertaken with due consideration for promoting
efficiency and competition;
``(4) in providing United States Government financial
assistance under this Act to correct a domestic industrial base
shortfall, the President should give consideration to the
creation or maintenance of production sources that will remain
economically viable after such assistance has ended;
``(5) authorities under this Act should be used to reduce
the vulnerability of the United States to terrorist attacks,
and to minimize the damage and assist in the recovery from
terrorist attacks that occur in the United States;
``(6) in order to ensure productive capacity in the event
of an attack on the United States, the United States Government
should encourage the geographic dispersal of industrial
facilities in the United States to discourage the concentration
of such productive facilities within limited geographic areas
that are vulnerable to attack by an enemy of the United States;
``(7) to ensure that essential national defense
requirements are met, consideration should be given to
stockpiling strategic materials, to the extent that such
stockpiling is economical and feasible; and
``(8) in the construction of any industrial facility owned
by the United States Government, in the rendition of any
financial assistance by the United States Government for the
construction, expansion, or improvement of any industrial
facility, and in the production of goods and services, under
this Act or any other provision of law, each department and
agency of the United States Government should apply, under the
coordination of the Federal Emergency Management Agency, when
practicable and consistent with existing law and the
desirability for maintaining a sound economy, the principle of
geographic dispersal of such facilities in the interest of
national defense.''.
SEC. 4. PRIORITY IN CONTRACTS AND ORDERS.
Section 101 of the Defense Production Act of 1950 (50 U.S.C. App.
2071) is amended by adding at the end the following:
``(d) The head of each Federal agency to which the President
delegates authority under this section shall--
``(1) not later than 270 days after the date of enactment
of the Defense Production Act Reauthorization of 2009, issue
final rules, in accordance with section 553 of title 5, United
States Code, that establish standards and procedures by which
the priorities and allocations authority under this section is
used to promote the national defense, under both emergency and
nonemergency conditions; and
``(2) as appropriate and to the extent practicable, consult
with the heads of other Federal agencies to develop a
consistent and unified Federal priorities and allocations
system.''.
SEC. 5. DESIGNATION OF ENERGY AS A STRATEGIC AND CRITICAL MATERIAL.
Section 106 of the Defense Production Act of 1950 (50 U.S.C. App.
2076) is amended--
(1) by striking ``such designation'' and all that follows
through ``(1)'' and inserting ``such designation'';
(2) by striking ``; or'' and inserting a period; and
(3) by striking paragraph (2).
SEC. 6. STRENGTHENING DOMESTIC CAPABILITY.
Section 107 of the Defense Production Act of 1950 (50 U.S.C. App.
2077) is amended--
(1) in subsection (a)--
(A) by inserting ``restore,'' after ``modernize,'';
and
(B) by inserting ``materials,'' after ``items,'';
and
(2) in subsection (b)--
(A) by striking paragraph (1);
(B) by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2), respectively; and
(C) in paragraph (1), as so redesignated, by
striking ``or critical technology items'' and inserting
``, critical technology items, essential materials, and
industrial resources''.
SEC. 7. EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY.
Title III of the Defense Production Act of 1950 (50 U.S.C. App.
2091 et seq.) is amended to read as follows:
``TITLE III--EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY
``SEC. 301. PRESIDENTIAL AUTHORIZATION FOR THE NATIONAL DEFENSE.
``(a) Expediting Production and Deliveries or Services.--
``(1) Authorized activities.--To reduce current or
projected shortfalls of industrial resources, critical
technology items, or essential materials needed for national
defense purposes, subject to such regulations as the President
may prescribe, the President may authorize a guaranteeing
agency to provide guarantees of loans by private institutions
for the purpose of financing any contractor, subcontractor,
provider of critical infrastructure, or other person in support
of production capabilities or supplies that are deemed by the
guaranteeing agency to be necessary to create, maintain,
expedite, expand, protect, or restore production and deliveries
or services essential to the national defense.
``(2) Presidential determinations required.--Except during
a period of national emergency declared by Congress or the
President, a loan guarantee may be entered into under this
section only if the President determines that--
``(A) the loan guarantee is for an activity that
supports the production or supply of an industrial
resource, critical technology item, or material that is
essential for national defense purposes;
``(B) without a loan guarantee, credit is not
available to the loan applicant under reasonable terms
or conditions sufficient to finance the activity;
``(C) the loan guarantee is the most cost
effective, expedient, and practical alternative for
meeting the needs of the Federal Government;
``(D) the prospective earning power of the loan
applicant and the character and value of the security
pledged provide a reasonable assurance of repayment of
the loan to be guaranteed;
``(E) the loan to be guaranteed bears interest at a
rate determined by the Secretary of the Treasury to be
reasonable, taking into account the then-current
average yield on outstanding obligations of the United
States with remaining periods of maturity comparable to
the maturity of the loan;
``(F) the loan agreement for the loan to be
guaranteed provides that no provision of the loan
agreement may be amended or waived without the consent
of the fiscal agent of the United States for the
guarantee; and
``(G) the loan applicant has provided or will
provide--
``(i) an assurance of repayment, as
determined by the President; and
``(ii) security--
``(I) in the form of a performance
bond, insurance, collateral, or other
means acceptable to the fiscal agent of
the United States; and
``(II) in an amount equal to not
less than 20 percent of the amount of
the loan.
``(3) Limitations on loans.--Loans under this section may
be--
``(A) made or guaranteed under the authority of
this section only to the extent that an appropriations
Act--
``(i) provides, in advance, budget
authority for the cost of such guarantees, as
defined in section 502 of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661a); and
``(ii) establishes a limitation on the
total loan principal that may be guaranteed;
and
``(B) made without regard to the limitations of
existing law, other than section 1341 of title 31,
United States Code.
``(b) Fiscal Agents of the United States.--
``(1) In general.--Any Federal agency or any Federal
reserve bank, when designated by the President, is hereby
authorized to act, on behalf of any guaranteeing agency, as
fiscal agent of the United States in the making of such
contracts of guarantee and in otherwise carrying out the
purposes of this section.
``(2) Funds.--All such funds as may be necessary to enable
any fiscal agent described in paragraph (1) to carry out any
guarantee made by it on behalf of any guaranteeing agency shall
be supplied and disbursed by or under authority from such
guaranteeing agency.
``(3) Limit on liability.--No fiscal agent described in
paragraph (1) shall have any responsibility or accountability,
except as agent in taking any action pursuant to or under
authority of this section.
``(4) Reimbursements.--Each fiscal agent described in
paragraph (1) shall be reimbursed by each guaranteeing agency
for all expenses and losses incurred by such fiscal agent in
acting as agent on behalf of such guaranteeing agency,
including, notwithstanding any other provision of law,
attorneys' fees and expenses of litigation.
``(c) Oversight.--
``(1) In general.--All actions and operations of fiscal
agents under authority of or pursuant to this section shall be
subject to the supervision of the President, and to such
regulations as the President may prescribe.
``(2) Other authority.--The President is authorized to
prescribe--
``(A) either specifically or by maximum limits or
otherwise, rates of interest, guarantee and commitment
fees, and other charges which may be made in connection
with loans, discounts, advances, or commitments
guaranteed by the guaranteeing agencies through fiscal
agents under this section; and
``(B) regulations governing the forms and
procedures (which shall be uniform to the extent
practicable) to be utilized in connection with such
guarantees.
``(d) Aggregate Guarantee Amounts.--
``(1) Industrial resource and critical technology
shortfalls.--
``(A) In general.--If the making of any guarantee
or obligation of the Federal Government under this
title relating to a domestic industrial base shortfall
would cause the aggregate outstanding amount of all
guarantees for such shortfall to exceed $50,000,000,
any such guarantee may be made only--
``(i) if the President has notified the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives in writing of the proposed
guarantee; and
``(ii) after the 30-day period following
the date on which notice under clause (i) is
provided.
``(B) Waivers authorized.--The requirements of
subparagraph (A) may be waived--
``(i) during a period of national emergency
declared by Congress or the President; or
``(ii) upon a determination by the
President, on a nondelegable basis, that a
specific guarantee is necessary to avert an
industrial resource or critical technology item
shortfall that would severely impair national
defense capability.
``(2) Other limitations.--The authority conferred by this
section shall not be used primarily to prevent the financial
insolvency or bankruptcy of any person, unless--
``(A) the President certifies that the insolvency
or bankruptcy would have a direct and substantially
adverse effect upon national defense production; and
``(B) a copy of the certification under
subparagraph (A), together with a detailed
justification thereof, is transmitted to the Committee
on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives not later than 10 days prior to the
exercise of that authority for such use.
``SEC. 302. LOANS TO PRIVATE BUSINESS ENTERPRISES.
``(a) Loan Authority.--To reduce current or projected shortfalls of
industrial resources, critical technology items, or materials essential
for the national defense, the President may make provision for loans to
private business enterprises (including nonprofit research corporations
and providers of critical infrastructure) for the creation,
maintenance, expansion, protection, or restoration of capacity, the
development of technological processes, or the production of essential
materials, including the exploration, development, and mining of
strategic and critical metals and minerals.
``(b) Conditions of Loans.--Loans may be made under this section on
such terms and conditions as the President deems necessary, except
that--
``(1) financial assistance may be extended only to the
extent that it is not otherwise available from private sources
on reasonable terms; and
``(2) during periods of national emergency declared by the
Congress or the President, no such loan may be made unless the
President determines that--
``(A) the loan is for an activity that supports the
production or supply of an industrial resource,
critical technology item, or material that is essential
to the national defense;
``(B) without the loan, United States industry
cannot reasonably be expected to provide the needed
capacity, technological processes, or materials in a
timely manner;
``(C) the loan is the most cost-effective,
expedient, and practical alternative method for meeting
the need;
``(D) the prospective earning power of the loan
applicant and the character and value of the security
pledged provide a reasonable assurance of repayment of
the loan in accordance with the terms of the loan, as
determined by the President; and
``(E) the loan bears interest at a rate determined
by the Secretary of the Treasury to be reasonable,
taking into account the then-current average yield on
outstanding obligations of the United States with
remaining periods of maturity comparable to the
maturity of the loan.
``(c) Limitations on Loans.--Loans under this section may be--
``(1) made or guaranteed under the authority of this
section only to the extent that an appropriations Act--
``(A) provides, in advance, budget authority for
the cost of such guarantees, as defined in section 502
of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a); and
``(B) establishes a limitation on the total loan
principal that may be guaranteed; and
``(2) made without regard to the limitations of existing
law, other than section 1341 of title 31, United States Code.
``(d) Aggregate Loan Amounts.--
``(1) In general.--If the making of any loan under this
section to correct a shortfall would cause the aggregate
outstanding amount of all obligations of the Federal Government
under this title relating to such shortfall to exceed
$50,000,000, such loan may be made only--
``(A) if the President has notified the Committee
on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives, in writing, of the proposed loan; and
``(B) after the 30-day period following the date on
which notice under subparagraph (A) is provided.
``(2) Waivers authorized.--The requirements of paragraph
(1) may be waived--
``(A) during a period of national emergency
declared by the Congress or the President; and
``(B) upon a determination by the President, on a
nondelegable basis, that a specific loan is necessary
to avert an industrial resource or critical technology
shortfall that would severely impair national defense
capability.
``SEC. 303. OTHER PRESIDENTIAL ACTION AUTHORIZED.
``(a) In General.--
``(1) In general.--To create, maintain, protect, expand, or
restore domestic industrial base capabilities essential for the
national defense, the President may make provision--
``(A) for purchases of or commitments to purchase
an industrial resource or a critical technology item,
for Government use or resale;
``(B) for the encouragement of exploration,
development, and mining of critical and strategic
materials, and other materials;
``(C) for the development of production
capabilities; and
``(D) for the increased use of emerging
technologies in security program applications and the
rapid transition of emerging technologies--
``(i) from Government-sponsored research
and development to commercial applications; and
``(ii) from commercial research and
development to national defense applications.
``(2) Treatment of certain agricultural commodities.--A
purchase for resale under this subsection shall not include
that part of the supply of an agricultural commodity which is
domestically produced, except to the extent that such
domestically produced supply may be purchased for resale for
industrial use or stockpiling.
``(3) Terms of sales.--No commodity purchased under this
subsection shall be sold at less than--
``(A) the established ceiling price for such
commodity, except that minerals, metals, and materials
shall not be sold at less than the established ceiling
price, or the current domestic market price, whichever
is lower; or
``(B) if no ceiling price has been established, the
higher of--
``(i) the current domestic market price for
such commodity; or
``(ii) the minimum sale price established
for agricultural commodities owned or
controlled by the Commodity Credit Corporation,
as provided in section 407 of the Agricultural
Act of 1949 (7 U.S.C. 1427).
``(4) Delivery dates.--No purchase or commitment to
purchase any imported agricultural commodity shall specify a
delivery date which is more than 1 year after the date of
termination of this section.
``(5) Presidential determinations.--Except as provided in
paragraph (7), the President may not execute a contract under
this subsection unless the President determines that--
``(A) the industrial resource, material, or
critical technology item is essential to the national
defense; and
``(B) without Presidential action under this
section, United States industry cannot reasonably be
expected to provide the capability for the needed
industrial resource, material, or critical technology
item in a timely manner.
``(6) Notification to congress of shortfall.--
``(A) In general.--Except as provided in paragraph
(7), the President shall provide written notice to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives of a domestic industrial base
shortfall prior to taking action under this subsection
to remedy the shortfall. The notice shall include the
determinations made by the President under paragraph
(5).
``(B) Aggregate amounts.--If the taking of any
action under this subsection to correct a domestic
industrial base shortfall would cause the aggregate
outstanding amount of all such actions for such
shortfall to exceed $50,000,000, the action or actions
may be taken only after the 30-day period following the
date on which the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives have
been notified in writing of the proposed action.
``(7) Waivers authorized.--The requirements of paragraphs
(1) through (6) may be waived--
``(A) during a period of national emergency
declared by the Congress or the President; or
``(B) upon a determination by the President, on a
nondelegable basis, that action is necessary to avert
an industrial resource or critical technology item
shortfall that would severely impair national defense
capability.
``(b) Exemption for Certain Limitations.--Subject to the
limitations in subsection (a), purchases and commitments to purchase
and sales under subsection (a) may be made without regard to the
limitations of existing law (other than section 1341 of title 31,
United States Code), for such quantities, and on such terms and
conditions, including advance payments, and for such periods, but not
extending beyond a date that is not more than 10 years from the date on
which such purchase, purchase commitment, or sale was initially made,
as the President deems necessary, except that purchases or commitments
to purchase involving higher than established ceiling prices (or if no
such established ceiling prices exist, currently prevailing market
prices) or anticipated loss on resale shall not be made, unless it is
determined that supply of the materials could not be effectively
increased at lower prices or on terms more favorable to the Government,
or that such purchases are necessary to assure the availability to the
United States of overseas supplies.
``(c) Presidential Findings.--
``(1) In general.--The President may take the actions
described in paragraph (2), if the President finds that--
``(A) under generally fair and equitable ceiling
prices, for any raw or nonprocessed material, there
will result a decrease in supplies from high-cost
sources of such material, and that the continuation of
such supplies is necessary to carry out the objectives
of this title; or
``(B) an increase in cost of transportation is
temporary in character and threatens to impair maximum
production or supply in any area at stable prices of
any materials.
``(2) Subsidy payments authorized.--Upon a finding under
paragraph (1), the President may make provision for subsidy
payments on any such domestically produced material, other than
an agricultural commodity, in such amounts and in such manner
(including purchases of such material and its resale at a
loss), and on such terms and conditions, as the President
determines to be necessary to ensure that supplies from such
high-cost sources are continued, or that maximum production or
supply in such area at stable prices of such materials is
maintained, as the case may be.
``(d) Incidental Authority.--The procurement power granted to the
President by this section shall include the power to transport and
store and have processed and refined any materials procured under this
section.
``(e) Installation of Equipment in Industrial Facilities.--
``(1) Installation authorized.--If the President determines
that such action will aid the national defense, the President
is authorized--
``(A) to procure and install additional equipment,
facilities, processes or improvements to plants,
factories, and other industrial facilities owned by the
Federal Government;
``(B) to procure and install equipment owned by the
Federal Government in plants, factories, and other
industrial facilities owned by private persons;
``(C) to provide for the modification or expansion
of privately owned facilities, including the
modification or improvement of production processes,
when taking actions under section 301, 302, or this
section; and
``(D) to sell or otherwise transfer equipment owned
by the Federal Government and installed under this
subsection to the owners of such plants, factories, or
other industrial facilities.
``(2) Indemnification.--The owner of any plant, factory, or
other industrial facility that receives equipment owned by the
Federal Government under this section shall agree--
``(A) to waive any claim against the United States
under section 107 or 113 of the Comprehensive
Environmental Response, Compensation, and Liability Act
of 1980 (42 U.S.C. 9607 and 9613); and
``(B) to indemnify the United States against any
claim described in paragraph (1) made by a third party
that arises out of the presence or use of equipment
owned by the Federal Government.
``(f) Excess Metals, Minerals, and Materials.--
``(1) In general.--Notwithstanding any other provision of
law to the contrary, metals, minerals, and materials acquired
pursuant to this section which, in the judgment of the
President, are excess to the needs of programs under this Act,
shall be transferred to the National Defense Stockpile
established by the Strategic and Critical Materials Stock
Piling Act (50 U.S.C. 98 et seq.), when the President deems
such action to be in the public interest.
``(2) Transfers at no charge.--Transfers made pursuant to
this subsection shall be made without charge against or
reimbursement from funds appropriated for the purposes of the
Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98
et seq.), except that costs incident to such transfer, other
than acquisition costs, shall be paid or reimbursed from such
funds.
``(g) Substitutes.--When, in the judgement of the President, it
will aid the national defense, the President may make provision for the
development of substitutes for strategic and critical materials,
critical components, critical technology items, and other industrial
resources.
``SEC. 304. DEFENSE PRODUCTION ACT FUND.
``(a) Establishment of Fund.--There is established in the Treasury
of the United States a separate fund to be known as the `Defense
Production Act Fund' (in this section referred to as the `Fund').
``(b) Moneys in Fund.--There shall be credited to the Fund--
``(1) all moneys appropriated for the Fund, as authorized
by section 711; and
``(2) all moneys received by the Fund on transactions
entered into pursuant to section 303.
``(c) Use of Fund.--The Fund shall be available to carry out the
provisions and purposes of this title, subject to the limitations set
forth in this Act and in appropriations Acts.
``(d) Duration of Fund.--Moneys in the Fund shall remain available
until expended.
``(e) Fund Balance.--The Fund balance at the close of each fiscal
year shall not exceed $750,000,000, excluding any moneys appropriated
to the Fund during that fiscal year or obligated funds. If, at the
close of any fiscal year, the Fund balance exceeds $750,000,000, the
amount in excess of $750,000,000 shall be paid into the general fund of
the Treasury.
``(f) Fund Manager.--The President shall designate a Fund manager.
The duties of the Fund manager shall include--
``(1) determining the liability of the Fund in accordance
with subsection (g);
``(2) ensuring the visibility and accountability of
transactions engaged in through the Fund; and
``(3) reporting to the Congress each year regarding
activities of the Fund during the previous fiscal year.
``(g) Liabilities Against Fund.--When any agreement entered into
pursuant to this title after December 31, 1991, imposes any contingent
liability upon the United States, such liability shall be considered an
obligation against the Fund.''.
SEC. 8. DEFINITIONS.
Section 702 of the Defense Production Act of 1950 (50 U.S.C. App.
2152) is amended--
(1) in paragraph (1), by striking ``military equipment
identified by the Secretary of Defense'' and inserting
``equipment identified by the President'';
(2) by striking paragraphs (2), (4), (9), and (18);
(3) by redesignating paragraph (3) as paragraph (2);
(4) by inserting after paragraph (2), as so redesignated,
the following:
``(3) Critical technology.--The term `critical technology'
includes any technology designated by the President to be
essential to the national defense.'';
(5) by redesignating paragraphs (5) through (8) as
paragraphs (4) through (7), respectively;
(6) in paragraph (6), as so redesignated--
(A) in the paragraph heading, by striking
``defense'';
(B) by striking ``domestic defense'' and inserting
``domestic''; and
(C) by striking ``graduated mobilization,'';
(7) by redesignating paragraphs (10) and (11) as paragraphs
(8) and (9), respectively;
(8) by inserting after paragraph (9), as so redesignated,
the following:
``(10) Guaranteeing agency.--The term `guaranteeing agency'
means a department or agency of the United States engaged in
procurement for the national defense.
``(11) Homeland security.--The term `homeland security'
includes efforts--
``(A) to prevent terrorist attacks within the
United States;
``(B) to reduce the vulnerability of the United
States to terrorism;
``(C) to minimize damage from a terrorist attack in
the United States; and
``(D) to recover from a terrorist attack in the
United States.'';
(9) in paragraph (12), by striking ``capacity'' and
inserting ``base'';
(10) in paragraph (14), by striking ``military assistance
to any foreign nation'' and inserting ``military or critical
infrastructure assistance to any foreign nation, homeland
security''; and
(11) in paragraph (16)--
(A) in subparagraph (A), by striking ``or'' at the
end;
(B) in subparagraph (B), by striking the period and
inserting a semicolon; and
(C) by adding at the end the following:
``(C) the movement of individuals and property by
all modes of civil transportation; or
``(D) other national defense programs and
activities.''.
SEC. 9. VOLUNTARY AGREEMENTS AND PLANS OF ACTION FOR NATIONAL DEFENSE.
Section 708 of the Defense Production Act of 1950 (50 U.S.C. App.
2158) is amended--
(1) in subsection (c)--
(A) in paragraph (1), by striking ``defense of the
United States'' and all that follows through the period
and inserting ``national defense.''; and
(B) by adding at the end the following:
``(3) Upon a determination by the President, on a nondelegable
basis, that a specific voluntary agreement or plan of action is
necessary to meet national defense requirements resulting from an event
that degrades or destroys critical infrastructure--
``(A) an individual that has been delegated authority under
paragraph (1) with respect to such agreement or plan shall not
be required to consult with the Attorney General or the Federal
Trade Commission under paragraph (2)(B); and
``(B) the President shall publish a rule in accordance with
subsection (e)(2)(B) and publish notice in accordance with
subsection (e)(3)(B) with respect to such agreement or plan as
soon as is practicable under the circumstances.'';
(2) in subsection (f)(2)--
(A) by striking ``two years'' each place that term
appears and inserting ``5 years''; and
(B) by striking ``two-year'' and inserting ``5-
year''; and
(3) by striking subsection (n) and inserting the following:
``(n) Exemption From Advisory Committee Act Provisions.--
Notwithstanding any other provision of law, the Federal Advisory
Committee Act (5 U.S.C. App.) and any other provision of Federal law
relating to advisory committees shall not apply to--
``(1) the consultations referred to in subsection (c)(1);
or
``(2) any activity conducted under a voluntary agreement or
plan of action approved pursuant to this section that complies
with the requirements of this section.''.
SEC. 10. EMPLOYMENT OF PERSONNEL; APPOINTMENT POLICIES; NUCLEUS
EXECUTIVE RESERVE; USE OF CONFIDENTIAL INFORMATION BY
EMPLOYEES; PRINTING AND DISTRIBUTION OF REPORTS.
Section 710 of the Defense Production Act of 1950 (50 U.S.C. App.
2160) is amended--
(1) in subsection (b)--
(A) in paragraph (2), by striking clause (iii);
(B) by striking paragraph (4);
(C) by redesignating paragraphs (5) through (8) as
paragraphs (4) through (7), respectively; and
(D) in paragraph (6), as so redesignated, by
striking ``At least'' and all that follows through
``survey'' and inserting ``The Director of the Office
of Personnel Management shall carry out a biennial
survey of'';
(2) in subsection (c), by striking the third sentence;
(3) in subsection (d), by striking ``needed;'' and all that
follows through the period and inserting ``needed.''; and
(4) in subsection (e)--
(A) in the first sentence, by striking
``emergency'' and inserting ``national defense
emergency, as determined by the President''; and
(B) by striking the third sentence.
SEC. 11. DEFENSE PRODUCTION ACT COMMITTEE.
Section 722 of the Defense Production Act of 1950 (50 U.S.C. App.
2171) is amended to read as follows:
``SEC. 722. DEFENSE PRODUCTION ACT COMMITTEE.
``(a) Committee Established.--There is established the Defense
Production Act Committee (in this section referred to as the
`Committee'), which shall advise the President on the effective use of
the authority under this Act by the departments, agencies, and
independent establishments of the Federal Government to which the
President has delegated authority under this Act.
``(b) Membership.--
``(1) In general.--The members of the Committee shall be--
``(A) the head of each Federal agency to which the
President has delegated authority under this Act; and
``(B) the Chairperson of the Council of Economic
Advisors.
``(2) Chairperson.--The President shall designate 1 member
of the Committee as the Chairperson of the Committee.
``(c) Executive Director.--
``(1) In general.--The President shall appoint an Executive
Director of the Defense Production Act Committee (in this
section referred to as the `Executive Director'), who shall--
``(A) be responsible to the Chairperson of the
Committee; and
``(B) carry out such activities relating to the
Committee as the Chairperson may determine.
``(2) Appointment.--The appointment by the President shall
not be subject to the advice and consent of the Senate.
``(3) Compensation.--For pay periods beginning on or after
the date on which each Chairperson is appointed, funds for the
pay of the Executive Director shall be paid from appropriations
to the salaries and expenses account of the department or
agency of the Chairperson of the Committee. The Executive
Director shall be compensated at a rate of pay equivalent to
that of a Deputy Assistant Secretary (or a comparable position)
of the Federal agency of the Chairperson of the Committee.
``(d) Report.--Not later than the end of the first quarter of each
calendar year, the Committee shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a report signed by each member
of the Committee that contains--
``(1) a review of the authority under this Act of each
department, agency, or independent establishment of the Federal
Government to which the President has delegated authority under
this Act;
``(2) recommendations for the effective use of the
authority described in paragraph (1) in a manner consistent
with the statement of policy under section 2(b);
``(3) recommendations for legislation, regulations,
executive orders, or other action by the Federal Government
necessary to improve the use of the authority described in
paragraph (1); and
``(4) recommendations for improving information sharing
between departments, agencies, and independent establishments
of the Federal Government relating to all aspects of the
authority described in paragraph (1).
``(e) Federal Advisory Committee Act.--The provisions of the
Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to the
Committee.''.
SEC. 12. ANNUAL REPORT ON IMPACT OF OFFSETS.
(a) Annual Report.--Title VII of the Defense Production Act of 1950
(50 U.S.C. App. 2151 et seq.) is amended by adding at the end the
following:
``SEC. 723. ANNUAL REPORT ON IMPACT OF OFFSETS.
``(a) Report Required.--
``(1) In general.--The President shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives, a detailed annual report on the impact of
offsets on the defense preparedness, industrial
competitiveness, employment, and trade of the United States.
``(2) Duties of the secretary of commerce.--The Secretary
of Commerce (hereafter in this subsection referred to as the
`Secretary') shall--
``(A) prepare the report required by paragraph (1);
``(B) consult with the Secretary of Defense, the
Secretary of the Treasury, the Secretary of State, and
the United States Trade Representative in connection
with the preparation of such report; and
``(C) function as the President's Executive Agent
for carrying out this section.
``(b) Interagency Studies and Related Data.--
``(1) Purpose of report.--Each report required under
subsection (a) shall identify the cumulative effects of offset
agreements on--
``(A) the full range of domestic defense productive
capability (with special attention paid to the firms
serving as lower-tier subcontractors or suppliers); and
``(B) the domestic defense technology base as a
consequence of the technology transfers associated with
such offset agreements.
``(2) Use of data.--Data developed or compiled by any
agency while conducting any interagency study or other
independent study or analysis shall be made available to the
Secretary to facilitate the execution of the Secretary's
responsibilities with respect to trade offset and countertrade
policy development.
``(c) Notice of Offset Agreements.--
``(1) In general.--If a United States firm enters into a
contract for the sale of a weapon system or defense-related
item to a foreign country or foreign firm and such contract is
subject to an offset agreement exceeding $5,000,000 in value,
such firm shall furnish to the official designated in the
regulations promulgated pursuant to paragraph (2) information
concerning such sale.
``(2) Regulations.--The information to be furnished under
paragraph (1) shall be prescribed in regulations promulgated by
the Secretary. Such regulations shall provide protection from
public disclosure for such information, unless public
disclosure is subsequently specifically authorized by the firm
furnishing the information.
``(d) Contents of Report.--
``(1) In general.--Each report under subsection (a) shall
include--
``(A) a net assessment of the elements of the
industrial base and technology base covered by the
report;
``(B) recommendations for appropriate remedial
action under the authority of this Act, or other law or
regulations;
``(C) a summary of the findings and recommendations
of any interagency studies conducted during the
reporting period under subsection (b);
``(D) a summary of offset arrangements concluded
during the reporting period for which information has
been furnished pursuant to subsection (c); and
``(E) a summary and analysis of any bilateral and
multilateral negotiations relating to the use of
offsets completed during the reporting period.
``(2) Alternative findings or recommendations.--Each report
required under this section shall include any alternative
findings or recommendations offered by any departmental
Secretary, agency head, or the United States Trade
Representative to the Secretary.
``(e) Utilization of Annual Report in Negotiations.--The findings
and recommendations of the reports required by subsection (a), and any
interagency reports and analyses shall be considered by representatives
of the United States during bilateral and multilateral negotiations to
minimize the adverse effects of offsets.''.
(b) Technical and Conforming Amendments.--
(1) Defense production act amendments of 1992.--Section
123(c)(1)(C) of the Defense Production Act Amendments of 1992
(50 U.S.C. App. 2099 note) is amended by striking ``section
309(a) of the Defense Production Act of 1950 (50 U.S.C. App.
2099(a))'' and inserting ``section 723(a) of the Defense
Production Act of 1950''.
(2) American homeownership and economic opportunity act of
2000.--Section 1102(2) of the American Homeownership and
Economic Opportunity Act of 2000 (31 U.S.C. 1113 note) is
amended by striking ``309 of the Defense Production Act of 1950
(50 U.S.C. App. 2099)'' and inserting ``723 of the Defense
Production Act of 1950''.
(3) Defense production act amendments of 2003.--Section
7(a) of the Defense Production Act Amendments of 2003 (50
U.S.C. App. 2099 note) is amended by striking ``section 309(a)
of the Defense Production Act of 1950 (50 U.S.C. App.
2099(a))'' and inserting ``section 723(a) of the Defense
Production Act of 1950''.
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