[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''.
                                 <all>