[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1677 Enrolled Bill (ENR)]
S.1677
One Hundred Eleventh Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the sixth day of January, two thousand and nine
An Act
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''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.