One Hundred Eleventh Congress of the United States of America 1st SessionBegun and held at the City of Washington on Tuesday, the sixth day of January, two thousand and nine S. 1677 IN THE SENATE OF THE UNITED STATES AN ACT To reauthorize the Defense Production Act of 1950, and for other purposes.

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.

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 are repealed.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).

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:

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.

.

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. .

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).

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.

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: .

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. .

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. .

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.

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:

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.

.

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:

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