[Congressional Record Volume 152, Number 100 (Wednesday, July 26, 2006)]
[House]
[Pages H5863-H5873]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     NATIONAL SECURITY FOREIGN INVESTMENT REFORM AND STRENGTHENED 
                        TRANSPARENCY ACT OF 2006

  Mr. OXLEY. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 5337) to ensure national security while promoting foreign 
investment and the creation and maintenance of jobs, to reform the 
process by which such investments are examined for any effect they may 
have on national security, to establish the Committee on Foreign 
Investment in the United States, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 5337

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``National Security Foreign 
     Investment Reform and Strengthened Transparency Act of 
     2006''.

     SEC. 2. UNITED STATES SECURITY IMPROVEMENT AMENDMENTS; 
                   CLARIFICATION OF REVIEW AND INVESTIGATION 
                   PROCESS.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170) is amended by striking subsections (a) and 
     (b) and inserting the following new subsections:

[[Page H5864]]

       ``(a) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Committee.--The term `Committee' means the Committee 
     on Foreign Investment in the United States.
       ``(2) Control.--The term `control' has the meaning given to 
     such term in regulations which the Committee shall prescribe.
       ``(3) Covered transaction.--The term `covered transaction' 
     means any merger, acquisition, or takeover by or with any 
     foreign person which could result in foreign control of any 
     person engaged in interstate commerce in the United States.
       ``(4) Foreign government-controlled transaction.--The term 
     `foreign government-controlled transaction' means any covered 
     transaction that could result in the control of any person 
     engaged in interstate commerce in the United States by a 
     foreign government or an entity controlled by or acting on 
     behalf of a foreign government.
       ``(5) Clarification.--The term `national security' shall be 
     construed so as to include those issues relating to `homeland 
     security', including its application to critical 
     infrastructure.
       ``(b) National Security Reviews and Investigations.--
       ``(1) National security reviews.--
       ``(A) In general.--Upon receiving written notification 
     under subparagraph (C) of any covered transaction, or on a 
     motion made under subparagraph (D) with respect to any 
     covered transaction, the President, acting through the 
     Committee, shall review the covered transaction to determine 
     the effects on the national security of the United States.
       ``(B) Control by foreign government.--If the Committee 
     determines that the covered transaction is a foreign 
     government-controlled transaction, the Committee shall 
     conduct an investigation of the transaction under paragraph 
     (2).
       ``(C) Written notice.--
       ``(i) In general.--Any party to any covered transaction may 
     initiate a review of the transaction under this paragraph by 
     submitting a written notice of the transaction to the 
     Chairperson of the Committee.
       ``(ii) Withdrawal of notice.--No covered transaction for 
     which a notice was submitted under clause (i) may be 
     withdrawn from review unless--

       ``(I) a written request for such withdrawal is submitted by 
     any party to the transaction; and
       ``(II) the request is approved in writing by the 
     Chairperson, in consultation with the Vice Chairpersons, of 
     the Committee.

       ``(iii) Continuing discussions.--The approval of a 
     withdrawal request under clause (ii) shall not be construed 
     as precluding any party to the covered transaction from 
     continuing informal discussions with the Committee or any 
     Committee member regarding possible resubmission for review 
     pursuant to this paragraph.
       ``(D) Unilateral initiation of review.--The President, the 
     Committee, or any member of the Committee may move to 
     initiate a review under subparagraph (A) of--
       ``(i) any covered transaction;
       ``(ii) any covered transaction that has previously been 
     reviewed or investigated under this section, if any party to 
     the transaction submitted false or misleading material 
     information to the Committee in connection with the review or 
     investigation or omitted material information, including 
     material documents, from information submitted to the 
     Committee; or
       ``(iii) any covered transaction that has previously been 
     reviewed or investigated under this section, if any party to 
     the transaction or the entity resulting from consummation of 
     the transaction intentionally materially breaches a 
     mitigation agreement or condition described in subsection 
     (l)(1)(A), and--

       ``(I) such breach is certified by the lead department or 
     agency monitoring and enforcing such agreement or condition 
     as an intentional material breach; and
       ``(II) such department or agency certifies that there is no 
     other remedy or enforcement tool available to address such 
     breach.

       ``(E) Timing.--Any review under this paragraph shall be 
     completed before the end of the 30-day period beginning on 
     the date of the receipt of written notice under subparagraph 
     (C) by the Chairperson of the Committee, or the date of the 
     initiation of the review in accordance with a motion under 
     subparagraph (D).
       ``(2) National security investigations.--
       ``(A) In general.--In each case in which--
       ``(i) a review of a covered transaction under paragraph (1) 
     results in a determination that--

       ``(I) the transaction threatens to impair the national 
     security of the United States and that threat has not been 
     mitigated during or prior to the review of a covered 
     transaction under paragraph (1); or
       ``(II) the transaction is a foreign government-controlled 
     transaction;

       ``(ii) a roll call vote pursuant to paragraph (3)(A) in 
     connection with a review under paragraph (1) of any covered 
     transaction results in at least 1 vote by a Committee member 
     against approving the transaction; or
       ``(iii) the Director of National Intelligence identifies 
     particularly complex intelligence concerns that could 
     threaten to impair the national security of the United States 
     and Committee members were not able to develop and agree upon 
     measures to mitigate satisfactorily those threats during the 
     initial review period under paragraph (1),

     the President, acting through the Committee, shall 
     immediately conduct an investigation of the effects of the 
     transaction on the national security of the United States and 
     take any necessary actions in connection with the transaction 
     to protect the national security of the United States.
       ``(B) Timing.--
       ``(i) In general.--Any investigation under subparagraph (A) 
     shall be completed before the end of the 45-day period 
     beginning on the date of the investigation commenced.
       ``(ii) Extensions of time.--The period established under 
     subparagraph (B) for any investigation of a covered 
     transaction may be extended with respect to any particular 
     investigation by the President or by a rollcall vote of at 
     least 2/3 of the members of the Committee involved in the 
     investigation by the amount of time specified by the 
     President or the Committee at the time of the extension, not 
     to exceed 45 days, as necessary to collect and fully evaluate 
     information relating to--

       ``(I) the covered transaction or parties to the 
     transaction; and
       ``(II) any effect of the transaction that could threaten to 
     impair the national security of the United States.

       ``(3) Approval of chairperson and vice chairpersons 
     required.--
       ``(A) In general.--A review or investigation under this 
     subsection of a covered transaction shall not be treated as 
     final or complete until the findings and the report resulting 
     from such review or investigation are approved by a majority 
     of the members of the Committee in a roll call vote and 
     signed by the Secretary of the Treasury, the Secretary of 
     Homeland Security, and the Secretary of Commerce (and such 
     authority of each such Secretary may not be delegated to any 
     person other than the Deputy Secretary of the Treasury, the 
     Deputy Secretary of Homeland Security, or the Deputy 
     Secretary of Commerce, respectively).
       ``(B) Additional action required in certain cases.--In the 
     case of any roll call vote pursuant to subparagraph (A) in 
     connection with an investigation under paragraph (2) of any 
     foreign government-controlled transaction in which there is 
     at least 1 vote by a Committee member against approving the 
     transaction, the investigation shall not be treated as final 
     or complete until the findings and report resulting from such 
     investigation are signed by the President (in addition to the 
     Chairperson and the Vice Chairpersons of the Committee under 
     subparagraph (A)).
       ``(4) Analysis by director of national intelligence.--
       ``(A) In general.--The Director of National Intelligence 
     shall expeditiously carry out a thorough analysis of any 
     threat to the national security of the United States of any 
     covered transaction, including making requests for 
     information to the Director of the Office of Foreign Assets 
     Control within the Department of the Treasury and the 
     Director of the Financial Crimes Enforcement Network. The 
     Director of National Intelligence also shall seek and 
     incorporate the views of all affected or appropriate 
     intelligence agencies.
       ``(B) 30-day minimum.--The Director of National 
     Intelligence shall be provided no less than 30 days to 
     complete the analysis required under subparagraph (A), except 
     in any instance described in paragraph (2)(A)(iii).
       ``(C) Independent role of director.--The Director of 
     National Intelligence shall not be a member of the Committee 
     and shall serve no policy role with the Committee other than 
     to provide analysis under subparagraph (A) in connection with 
     a covered transaction.
       ``(5) Resubmittals of notice and requests for additional 
     review or investigation.--
       ``(A) In general.--No provision of this subsection shall be 
     construed as prohibiting any party to a covered transaction 
     from--
       ``(i) submitting additional information concerning the 
     transaction, including any proposed restructuring of the 
     transaction or any modifications to any agreements in 
     connection with the transaction, while any review or 
     investigation of the transaction is on-going; or
       ``(ii) requesting a review or investigation of the 
     transaction after any previous review or investigation of the 
     same or a similar transaction has become final if information 
     material to the prior review or investigation and not 
     previously submitted to the Committee becomes known or if any 
     material change in circumstances to the covered transaction 
     has occurred since the review or investigation.
       ``(B) Approval of request.--In the case of a request 
     referred to in subparagraph (A)(ii), the Committee shall 
     determine by consensus whether to grant a request.
       ``(6) Regulations.--Regulations prescribed under this 
     section shall include standard procedures for--
       ``(A) submitting any notice of a proposed or pending 
     covered transaction to the Committee;
       ``(B) submitting a request to withdraw a proposed or 
     pending covered transaction from review; and
       ``(C) resubmitting a notice of proposed or pending covered 
     transaction that was previously withdrawn from review.''.

     SEC. 3. STATUTORY ESTABLISHMENT OF THE COMMITTEE ON FOREIGN 
                   INVESTMENT IN THE UNITED STATES.

       (a) In General.--Section 721 of the Defense Production Act 
     of 1950 (50 U.S.C. App. 2170) is amended by striking 
     subsection (k) and inserting the following new subsection:
       ``(k) Committee on Foreign Investment in the United 
     States.--

[[Page H5865]]

       ``(1) Establishment.--The Committee on Foreign Investment 
     in the United States established pursuant to Executive Order 
     No. 11858 shall be a multi-agency committee to carry out this 
     section and such other assignments as the President may 
     designate.
       ``(2) Membership.--The Committee shall be comprised of the 
     following members or the designee of any such member:
       ``(A) The Secretary of the Treasury.
       ``(B) The Secretary of Homeland Security.
       ``(C) The Secretary of Commerce.
       ``(D) The Secretary of Defense.
       ``(E) The Secretary of State.
       ``(F) The Attorney General.
       ``(G) The Secretary of Energy.
       ``(H) The Chairman of the Council of Economic Advisors.
       ``(I) The United States Trade Representative.
       ``(J) The Director of the Office of Management and Budget.
       ``(K) The Director of the National Economic Council.
       ``(L) The Director of the Office of Science and Technology 
     Policy.
       ``(M) The President's Assistant for National Security 
     Affairs.
       ``(N) Any other designee of the President from the 
     Executive Office of the President.
       ``(3) Chairperson; vice chairpersons.--The Secretary of the 
     Treasury shall be the Chairperson of the Committee. The 
     Secretary of Homeland Security and the Secretary of Commerce 
     shall be the Vice Chairpersons of the Committee.
       ``(4) Other members.--Subject to subsection (b)(4)(B), the 
     Chairperson of the Committee shall involve the heads of such 
     other Federal departments, agencies, and independent 
     establishments in any review or investigation under 
     subsection (b) as the Chairperson, after consulting with the 
     Vice Chairpersons, determines to be appropriate on the basis 
     of the facts and circumstances of the transaction under 
     investigation (or the designee of any such department or 
     agency head).
       ``(5) Meetings.--The Committee shall meet upon the 
     direction of the President or upon the call of the 
     Chairperson of the Committee without regard to section 552b 
     of title 5, United States Code (if otherwise applicable).
       ``(6) Collection of evidence.--Subject to subsection (c), 
     the Committee may, for the purpose of carrying out this 
     section--
       ``(A) sit and act at such times and places, take such 
     testimony, receive such evidence, administer such oaths; and
       ``(B) require the attendance and testimony of such 
     witnesses and the production of such books, records, 
     correspondence, memoranda, papers, and documents as the 
     Chairperson of the Committee may determine advisable.
       ``(7) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary of the 
     Treasury for each of fiscal years 2007, 2008, 2009, and 2010, 
     expressly and solely for the operations of the Committee that 
     are conducted by the Secretary, the sum of $10,000,000.''.
       (b) Technical and Conforming Amendment.--The first sentence 
     of section 721(c) of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170(c)) is amended--
       (1) by striking ``material filed with'' and inserting 
     ``material, including proprietary business information, filed 
     with, or testimony presented to,''; and
       (2) by striking ``or documentary material'' the 2nd place 
     such term appears and inserting ``, documentary material, or 
     testimony''.

     SEC. 4. ADDITIONAL FACTORS REQUIRED TO BE CONSIDERED.

       Section 721(f) of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170(f)) is amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``may'' and inserting ``shall''; and
       (B) by striking ``among other factors'';
       (2) by striking ``and'' at the end of paragraph (4);
       (3) by striking the period at the end of paragraph (5) and 
     inserting a semicolon; and
       (4) by adding at the end the following new paragraphs:
       ``(6) whether the covered transaction has a security-
     related impact on critical infrastructure in the United 
     States;
       ``(7) whether the covered transaction is a foreign 
     government-controlled transaction; and
       ``(8) such other factors as the President or the 
     President's designee may determine to be appropriate, 
     generally or in connection with a specific review or 
     investigation.''.

     SEC. 5. NONWAIVER OF SOVEREIGN IMMUNITY.

       Section 721(d) of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170(d)) is amended by adding at the end the 
     following new sentence: ``The United States shall not be held 
     liable for any losses or other expenses incurred by any party 
     to a covered transaction as a result of actions taken under 
     this section after a covered transaction has been consummated 
     if the party did not submit a written notice of the 
     transaction to the Chairperson of the Committee under 
     subsection (b)(1)(C) or did not wait until the completion of 
     any review or investigation under subsection (b), or the end 
     of the 15-day period referred to in this subsection, before 
     consummating the transaction.''.

     SEC. 6. MITIGATION, TRACKING, AND POST-CONSUMMATION 
                   MONITORING AND ENFORCEMENT.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170) is amended by inserting after subsection 
     (k) (as amended by section 3 of this Act) the following new 
     subsection:
       ``(l) Mitigation, Tracking, and Postconsummation Monitoring 
     and Enforcement.--
       ``(1) Mitigation.--
       ``(A) In general.--The Committee or any agency designated 
     by the Chairperson and Vice Chairpersons may negotiate, enter 
     into or impose, and enforce any agreement or condition with 
     any party to a covered transaction in order to mitigate any 
     threat to the national security of the United States.
       ``(B) Risk-based analysis required.--Any agreement entered 
     into or condition imposed under subparagraph (A) shall be 
     based on a risk-based analysis of the threat to national 
     security of the covered transaction.
       ``(2) Tracking authority for withdrawn notices.--
       ``(A) In general.--If any written notice of a covered 
     transaction that was submitted to the Committee under this 
     section is withdrawn before any review or investigation by 
     the Committee under subsection (b) is completed, the 
     Committee shall establish, as appropriate--
       ``(i) interim protections to address specific concerns with 
     such transaction that have been raised in connection with any 
     such review or investigation pending any resubmission of any 
     written notice under this section with respect to such 
     transaction and further action by the President under this 
     section;
       ``(ii) specific timeframes for resubmitting any such 
     written notice; and
       ``(iii) a process for tracking any actions that may be 
     taken by any party to the transaction, in connection with the 
     transaction, before the notice referred to in clause (ii) is 
     resubmitted.
       ``(B) Designation of agency.--The Committee may designate 
     an appropriate Federal department or agency, other than any 
     entity of the intelligence community (as defined in the 
     National Security Act of 1947), as the lead agency to carry 
     out the requirements of subparagraph (A) with respect to any 
     covered transaction that is subject to such subparagraph.
       ``(3) Negotiation, modification, monitoring, and 
     enforcement.--
       ``(A) Designation of agency.--The Committee shall designate 
     a Federal department or agency as the lead agency to 
     negotiate, modify, monitor, and enforce any agreement entered 
     into or condition imposed under paragraph (1) with respect to 
     a covered transaction based on the expertise with and 
     knowledge of the issues related to such transaction on the 
     part of the designated department or agency.
       ``(B) Reporting by designated agency.--
       ``(i) Implementation reports.--The Federal department or 
     agency designated by the Committee as a lead agency under 
     subparagraph (A) in connection with any agreement entered 
     into or condition imposed under paragraph (1) with respect to 
     a covered transaction shall--

       ``(I) provide periodic reports to the Chairperson and Vice 
     Chairpersons of the Committee on the implementation of such 
     agreement or condition; and
       ``(II) require, as appropriate, any party to the covered 
     transaction to report to the head of such department or 
     agency (or the designee of such department or agency head) on 
     the implementation or any material change in circumstances.

       ``(ii) Modification reports.--The Federal department or 
     agency designated by the Committee as a lead agency under 
     subparagraph (A) in connection with any agreement entered 
     into or condition imposed with respect to a covered 
     transaction shall--

       ``(I) provide periodic reports to the Chairperson and Vice 
     Chairpersons of the Committee on any modification to any such 
     agreement or condition imposed with respect to the 
     transaction; and
       ``(II) ensure that any significant modification to any such 
     agreement or condition is reported to the Director of 
     National Intelligence and to any other Federal department or 
     agency that may have a material interest in such 
     modification.''.

     SEC. 7. INCREASED OVERSIGHT BY THE CONGRESS.

       (a) Report on Actions.--Section 721(g) of the Defense 
     Production Act of 1950 (50 U.S.C. App. 2170) is amended to 
     read as follows:
       ``(g) Reports to the Congress.--
       ``(1) Reports on completed committee investigations.--
       ``(A) In general.--Not later than 5 days after the 
     completion of a Committee investigation of a covered 
     transaction under subsection (b)(2), or, if the President 
     indicates an intent to take any action authorized under 
     subsection (d) with respect to the transaction, after the end 
     of 15-day period referred to in subsection (d), the 
     Chairperson or a Vice Chairperson of the Committee shall 
     submit a written report on the findings or actions of the 
     Committee with respect to such investigation, the 
     determination of whether or not to take action under 
     subsection (d), an explanation of the findings under 
     subsection (e), and the factors considered under subsection 
     (f), with respect to such transaction, to--
       ``(i) the Majority Leader and the Minority Leader of the 
     Senate;
       ``(ii) the Speaker and the Minority Leader of the House of 
     Representatives; and
       ``(iii) the chairman and ranking member of each committee 
     of the House of Representatives and the Senate with 
     jurisdiction over any aspect of the covered transaction and 
     its possible effects on national security, including the 
     Committee on International Relations, the Committee on 
     Financial Services,

[[Page H5866]]

     and the Committee on Energy and Commerce of the House of 
     Representatives.
       ``(B) Notice and briefing requirement.--If a written 
     request for a briefing on a covered transaction is submitted 
     to the Committee by any Senator or Member of Congress who 
     receives a report on the transaction under subparagraph (A), 
     the Chairperson or a Vice Chairperson (or such other person 
     as the Chairperson or a Vice Chairperson may designate) shall 
     provide 1 classified briefing to each House of the Congress 
     from which any such briefing request originates in a secure 
     facility of appropriate size and location that shall be open 
     only to the Majority Leader and the Minority Leader of the 
     Senate, the Speaker and the Minority Leader of the House of 
     Representatives, (as the case may be) the chairman and 
     ranking member of each committee of the House of 
     Representatives or the Senate (as the case may be) with 
     jurisdiction over any aspect of the covered transaction and 
     its possible effects on national security, including the 
     Committee on International Relations, the Committee on 
     Financial Services, and the Committee on Energy and Commerce 
     of the House of Representatives, and appropriate staff 
     members who have security clearance.
       ``(2) Application of other provision.--
       ``(A) In general.--The disclosure of information under this 
     subsection shall be consistent with the requirements of 
     subsection (c). Members of Congress and staff of either House 
     or any committee of the Congress shall be subject to the same 
     limitations on disclosure of information as are applicable 
     under such subsection.
       ``(B) Proprietary information.--Proprietary information 
     which can be associated with a particular party to a covered 
     transaction shall be furnished in accordance with 
     subparagraph (A) only to a committee of the Congress and only 
     when the committee provides assurances of confidentiality, 
     unless such party otherwise consents in writing to such 
     disclosure.''.
       (b) Semi-Annual Report.--Section 721 of the Defense 
     Production Act of 1950 (50 U.S.C. App. 2170) is amended by 
     inserting after subsection (l) (as added by section 6 of this 
     Act) the following new subsection:
       ``(m) Semi-Annual Report to the Congress.--
       ``(1) In general.--The Chairperson of the Committee shall 
     transmit a report to the chairman and ranking member of each 
     committee of the House of Representatives and the Senate with 
     jurisdiction over any aspect of the report, including the 
     Committee on International Relations, the Committee on 
     Financial Services, and the Committee on Energy and Commerce 
     of the House of Representatives, before January 31 and July 
     31 of each year on all the reviews and investigations of 
     covered transactions conducted under subsection (b) during 
     the 6-month period covered by the report.
       ``(2) Contents of report relating to covered 
     transactions.--The report under paragraph (1) shall contain 
     the following information with respect to each covered 
     transaction:
       ``(A) A list of all notices filed and all reviews or 
     investigations conducted during the period with basic 
     information on each party to the transaction, the nature of 
     the business activities or products of all pertinent persons, 
     along with information about the status of the review or 
     investigation, information on any withdrawal from the 
     process, any rollcall votes by the Committee under this 
     section, any extension of time for any investigation, and any 
     presidential decision or action under this section.
       ``(B) Specific, cumulative, and, as appropriate, trend 
     information on the numbers of filings, investigations, 
     withdrawals, and presidential decisions or actions under this 
     section.
       ``(C) Cumulative and, as appropriate, trend information on 
     the business sectors involved in the filings which have been 
     made, and the countries from which the investments have 
     originated.
       ``(D) Information on whether companies that withdrew 
     notices to the Committee in accordance with subsection 
     (b)(1)(C)(ii) have later re-filed such notices, or, 
     alternatively, abandoned the transaction.
       ``(E) The types of security arrangements and conditions the 
     Committee has used to mitigate national security concerns 
     about a transaction.
       ``(F) A detailed discussion of all perceived adverse 
     effects of covered transactions on the national security or 
     critical infrastructure of the United States that the 
     Committee will take into account in its deliberations during 
     the period before delivery of the next such report, to the 
     extent possible.
       ``(3) Contents of report relating to critical 
     technologies.--
       ``(A) In general.--In order to assist the Congress in its 
     oversight responsibilities with respect to this section, the 
     President and such agencies as the President shall designate 
     shall include in the semi-annual report submitted under 
     paragraph (1) the following:
       ``(i) An evaluation of whether there is credible evidence 
     of a coordinated strategy by 1 or more countries or companies 
     to acquire United States companies involved in research, 
     development, or production of critical technologies for which 
     the United States is a leading producer.
       ``(ii) An evaluation of whether there are industrial 
     espionage activities directed or directly assisted by foreign 
     governments against private United States companies aimed at 
     obtaining commercial secrets related to critical 
     technologies.
       ``(B) Critical technologies defined.--For purposes of this 
     paragraph, the term `critical technologies' means 
     technologies identified under title VI of the National 
     Science and Technology Policy, Organization, and Priorities 
     Act of 1976 or other critical technology, critical 
     components, or critical technology items essential to 
     national defense or national security identified pursuant to 
     this section.
       ``(C) Release of unclassified study.--That portion of the 
     semi-annual report under paragraph (1) that is required by 
     this paragraph may be classified. An unclassified version of 
     that portion of the report shall be made available to the 
     public.''.
       (c) Investigation by Inspector General.--
       (1) In general.--The Inspector General of the Department of 
     the Treasury shall conduct an independent investigation to 
     determine all of the facts and circumstances concerning each 
     failure of the Department of the Treasury to make any report 
     to the Congress that was required under section 721(k) of the 
     Defense Production Act of 1950 (as in effect before the date 
     of the enactment of this Act).
       (2) Report to the congress.--Before the end of the 270-day 
     period beginning on the date of the enactment of this Act, 
     the Inspector General of the Department of the Treasury shall 
     submit a report to the chairman and ranking member of each 
     committee of the House of Representatives and the Senate with 
     jurisdiction over any aspect of the report, including the 
     Committee on International Relations, the Committee on 
     Financial Services, and the Committee on Energy and Commerce 
     of the House of Representatives, on the investigation under 
     paragraph (1) containing the findings and conclusions of the 
     Inspector General.
       (d) Study and Report.--
       (1) Study required.--Before the end of the 120-day period 
     beginning on the date of the enactment of this Act, the 
     Secretary of the Treasury, in consultation with the Secretary 
     of State and the Secretary of Commerce, shall conduct a study 
     on investments in the United States, especially investments 
     in critical infrastructure and industries affecting national 
     security, by--
       (A) foreign governments, entities controlled by or acting 
     on behalf of a foreign government, or persons of foreign 
     countries which comply with any boycott of Israel; or
       (B) foreign governments, entities controlled by or acting 
     on behalf of a foreign government, or persons of foreign 
     countries which do not ban organizations designated by the 
     Secretary of State as foreign terrorist organizations.
       (2) Report.--Before the end of the 30-day period beginning 
     upon completion of the study under paragraph (1) or in the 
     next semi-annual report under section 721(m) of the Defense 
     Production Act of 1950 (as added by subsection (b)), the 
     Secretary of the Treasury shall submit a report to the 
     Congress, for transmittal to all appropriate committees of 
     the Senate and the House of Representatives, containing the 
     findings and conclusions of the Secretary with respect to the 
     study, together with an analysis of the effects of such 
     investment on the national security of the United States and 
     on any efforts to address those effects.

     SEC. 8. CERTIFICATION OF NOTICES AND ASSURANCES.

       Section 721 of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170) is amended by inserting after subsection 
     (m) (as added by section 7(b) of this Act) the following new 
     subsection:
       ``(n) Certification of Notices and Assurances.--Each notice 
     required to be submitted, by a party to a covered 
     transaction, to the President or the President's designee 
     under this section and regulations prescribed under such 
     section, and any information submitted by any such party in 
     connection with any action for which a report is required 
     pursuant to paragraph (3)(B)(ii) of subsection (l) with 
     respect to the implementation of any mitigation agreement or 
     condition described in paragraph (1)(A) of such subsection, 
     or any material change in circumstances, shall be accompanied 
     by a written statement by the chief executive officer or the 
     designee of the person required to submit such notice or 
     information certifying that, to the best of the person's 
     knowledge and belief--
       ``(1) the notice or information submitted fully complies 
     with the requirements of this section or such regulation, 
     agreement, or condition; and
       ``(2) the notice or information is accurate and complete in 
     all material respects.''.

     SEC. 9. REGULATIONS.

       Section 721(h) of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170(h)) is amended to read as follows:
       ``(h) Regulations.--The President shall direct the issuance 
     of regulations to carry out this section. Such regulations 
     shall, to the extent possible, minimize paperwork burdens and 
     shall to the extent possible coordinate reporting 
     requirements under this section with reporting requirements 
     under any other provision of Federal law.''.

     SEC. 10. EFFECT ON OTHER LAW.

       Section 721(i) of the Defense Production Act of 1950 (50 
     U.S.C. App. 2170(i)) is amended to read as follows:
       ``(i) Effect on Other Law.--No provision of this section 
     shall be construed as altering or affecting any other 
     authority, process, regulation, investigation, enforcement 
     measure, or review provided by or established

[[Page H5867]]

     under any other provision of Federal law, including the 
     International Emergency Economic Powers Act, or any other 
     authority of the President or the Congress under the 
     Constitution of the United States.''.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Oxley) and the gentlewoman from New York (Mrs. Maloney) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.


                             General Leave

  Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today to urge all Members to support H.R. 5337, 
the National Security FIRST Act, which makes important reforms to the 
process by which the Committee on Foreign Investment of the United 
States scrutinizes purchases of U.S. businesses by foreign ones, to 
ensure that there is no threat to national security.
  As we consider this legislation, we must remember that the result of 
foreign investment in the United States has been spectacular. U.S. 
subsidiaries of foreign-owned companies employ nearly 5\1/2\ million 
Americans. The average salary for those workers is a healthy $60,000 
and a third of those jobs are in manufacturing.
  At a time when we are concerned about our balance of trade, it is 
important to note that more than 20 percent of U.S. exports are 
produced by U.S. subsidiaries of foreign companies. Mr. Speaker, we all 
know why we are here today.
  Congress and the country went through a very difficult period this 
spring after we learned about the Dubai Ports sale.

                              {time}  1245

  As a response, in one of the best examples of bipartisanship I have 
seen in my tenure here, H.R. 5337 was introduced by Majority Whip 
Blunt, Chairwoman Pryce, Mrs. Maloney and Mr. Crowley and now has 
nearly 90 cosponsors. It is a very good bill that addresses what some 
see as flaws in the CFIUS process without creating new problems or 
barriers to investment.
  I would particularly like to compliment Chairwoman Pryce for her 
leadership on this complex issue. In three very thorough hearings, she 
made certain,ky018 members were well-versed in the details of the CFIUS 
process before any legislating was done. The result was a unanimous 64-
0 vote for passage in the Financial Services Committee.
  The language we are considering today is nearly identical, with a 
manager's amendment that makes only a few changes made to further 
strengthen the process. Among those changes are the addition of 
Commerce Secretary as a second Vice Chair of CFIUS; the addition of the 
Energy Secretary to CFIUS itself; clarification that CFIUS reviews are 
to be done to determine the effects of a transaction on national 
security; the requirement that the 30-day review period end with a roll 
call vote, with any single dissenting vote sending the transaction into 
the 45-day investigative period; and further clarification of the role 
of the Director of National Intelligence in the CFIUS process.
  Mr. Speaker, what we need to accomplish is to strengthen the national 
security in two ways: by increasing administration accountability and 
by improving the ability of Congress to perform necessary oversight. 
This bill does both. The result will be a process that stops what 
should be disapproved and gives a green light to what should be 
approved, including, of course, any modifications needed to protect 
against the loss of the defense industrial base or a critical 
technology.
  This is a strong and effective bill here that corrects exactly what 
was wrong with the CFIUS process without overreaching and causing 
further problems. It continues to give CFIUS the flexibility to 
exercise discretion, allowing it to focus on investments that raise 
national security concerns. I do not and will not support some of the 
other proposals that have been put forward, such as any additional time 
delays or directly involving Congress in the decisionmaking process. I 
believe we need to take great care to refrain from inserting politics 
into the consideration process, and that goal has been achieved here.
  Mr. Speaker, we must protect our national security, but national 
security includes economic security. Let's remember that it is our 
economic security and prosperity that give us the resources to provide 
adequately for our internal and external defenses. We simply must not 
drive off those who want to make the wise investment in our great 
economy.
  Our friends in the other body should understand that no bill would be 
a preferable alternative to a bad bill, and we in the House will not 
sacrifice American prosperity and job growth when there is no real 
improvement to American security.
  Mr. Speaker, this is an excellent bill; and I think the CFIUS process 
and our national security would be improved by enacting it exactly as 
written.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. MALONEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am delighted to join my colleagues, Representatives 
Oxley, Pryce, Crowley and Majority Whip Blunt in bipartisan support of 
H.R. 5337, the National Security FIRST Act.
  After the Dubai Ports World disaster, it was clear that there was a 
pressing need to reform the process by which the United States 
Government reviews foreign acquisitions of businesses in the United 
States for national security threats, the Committee for Foreign 
Investment in the United States, or CFIUS.
  This bill was unanimously approved by the Financial Services 
Committee and has received strong bipartisan support in the Homeland 
Security Committee. It also reflects the input of the Energy and 
Commerce, Armed Services and International Relations Committees.
  We have all worked hard together to achieve a strong and sensible 
bill, and I would like to thank the members and staff of these 
committees as well as my own staff for their support and hard work.
  H.R. 5337, the National Security FIRST Act, is widely recognized as a 
balanced approach which protects national security, first, while 
continuing to encourage safe and important foreign investment, to 
create American jobs and improve our economy.
  Many observers, both domestic and foreign, think our bill has struck 
this balance successfully. The National Security FIRST Act incorporates 
and builds on a bipartisan bill I introduced earlier, based on reforms 
proposed by the General Accounting Office even before Dubai Ports World 
brought this issue into the spotlight. These recommendations of the GAO 
were obviously not knee-jerk reactions to the Dubai crisis but 
addressed structural problems in the CFIUS process and so provided a 
sound and farsighted basis for long-term reform.
  This bill addresses three core issues.
  First, the bill strengthens national security protections. All 
foreign government-controlled entities must go through a 45-day 
rigorous investigation in addition to the 30-day review. This is 
necessary because government-controlled entities could have agendas 
other than profit and can pay whatever they want to accomplish them. 
Private companies would not be able to compete.
  To ensure greater accountability and better judgment, all reviews and 
investigations by CFIUS will require sign-off at the highest levels. 
The Secretary or Deputy Secretary of Treasury, Homeland Security and 
Commerce must sign the CFIUS recommendation. The Dubai Ports deal was 
approved by 12 people and agencies. No one had ever heard of these 
particular people. This bill makes Cabinet officers responsible to the 
American people for their decisions.
  Also important, all reviews and investigations will be analyzed by 
the Director of National Intelligence, whose input is required under 
the bill.
  For the first time, CFIUS will have a set of mandatory factors to 
consider in determining whether the purchase could affect national 
security, including whether it affects critical infrastructure such as 
ports, energy transmission or voting machines.

[[Page H5868]]

  Second, the bill builds in congressional oversight by requiring 
twice-annual reporting to Congress of all completed actions by CFIUS. 
In order to ensure that this administration does not evade its 
responsibility by only reporting to one or two members, the bill 
specifies that both majority and minority members of the relevant 
committees will be notified.
  Additionally, Congress would be notified promptly of any extensive 
investigation or transaction involving a foreign government purchase.
  Involving Congress can help the CFIUS agencies be more aware of 
transactions that raise a red flag. For example, recently I wrote a 
letter to Secretary Snow urging CFIUS to review a transaction in which 
a company with strong Venezuelan ties acquired a major electronic 
voting company in the United States. Treasury says it is conducting a 
pre-review of whether the company is owned by the Venezuelan Government 
and whether the deal puts our electoral system at risk. Regardless of 
the outcome, this is a good example of why this bill is needed.
  The third impact of the bill is to strengthen the CFIUS enforcement 
and monitoring systems. In many cases, the U.S. Government enters into 
a contract with a foreign purchaser to ensure U.S. Government concerns 
regarding national security are met. This bill strengthens these 
contracts and adds provisions to follow up on whether the foreign 
purchasers are complying.
  Also, the bill provides for greater oversight of withdrawals from the 
CFIUS process. The GAO, the Government Accountability Office, noted a 
pattern of applicants withdrawing if they needed or received 
indications of concern and then going ahead with the flawed transaction 
anyway without the CFIUS approval. These off-the-radar deals pose great 
risk and great incentives, and we need to adopt better monitoring of 
them.
  In sum, this bill is a sensible, balanced approach to making sure 
foreign acquisitions do not jeopardize our national security, while not 
killing foreign investment in our country. I urge my colleagues to 
support the bill. Ninety of our colleagues are cosponsors.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I am pleased now to yield 4 minutes to the 
gentleman from Missouri (Mr. Blunt), the majority whip and the lead 
sponsor of this important legislation.
  Mr. BLUNT. Mr. Speaker, I thank the chairman for yielding time and 
for the great work he has done on this bill, the work that his 
committee has done, particularly the work that Chairman Pryce and her 
subcommittee has done not only to look at this bill carefully in 
hearings but have significant input and then crafting what a bill would 
look like that protects our country in a post-9/11 world but still also 
protects our economy and American companies and American pension plans 
and others that invest in those companies. The tremendous efforts that 
Mrs. Maloney has made and is making again today on the floor, as well 
as the efforts of Mr. Crowley, have all been significant in trying to 
take a problem and create the right solution. Chairman Barton, Chairman 
King, Chairman Hoekstra, all original cosponsors of the bill and who 
have all helped this bill as it worked its way through the process. 
Chairman Hyde and Chairman Hunter had significant input. Certainly the 
ranking member of the Financial Services Committee, Mr. Frank, had 
input and was very helpful in what I think is a product that we can be 
pleased with here, as was Mr. Smith from Texas.
  A few months ago, the country and, frankly, many Members, virtually 
everybody in the legislature, and even more frankly almost everybody in 
the administration, was surprised when the announcement was made that 
this particular decision had been made regarding one of our ports. That 
called attention to the fact that the CFIUS process was a process that 
might have worked well in a previous time, but the Committee on Foreign 
Investment in the United States was not designed to meet our time. The 
attacks on September 11 changed that. That world needs to be balanced 
with a global economy, where even if you don't know that you own stock 
in an American company that may be the subject of purchase, your 
pension plan may be very dependent on the value of that company.
  So what this bill does, Mr. Speaker, is I think arrive at the right 
balance that, first and foremost, does protect our security but does 
that in a way that doesn't needlessly impact the value of American 
companies and American assets in the marketplace.
  The points that have been made by the previous speakers are certainly 
the points that need to be made. Congress reaffirmed the intent of the 
Congress to look more carefully at companies that are owned by foreign 
governments in light of particularly some of the examples that have 
been given. The example that was just given by Mrs. Maloney would be an 
example.
  We have increased the accountability of CFIUS by establishing the 
process more fully in statute, by adding the Department of Homeland 
Security and the Secretary of Homeland Security, the Secretary of 
Commerce as vice chairmen. We have also added the Department of Energy 
to the committee and formalized the importance of each of the agencies 
in reaching a conclusion. We have increased congressional oversight and 
done the right things here.
  I think the key to this legislation as it hopefully moves forward 
today is the tremendous bipartisan effort that has been made. If our 
colleagues approve this bill today, I know we all look forward to 
working with Senators Shelby and Sarbanes in conference and getting 
this problem solved in this Congress. We have a tough bill on the floor 
today. We improve our security in the right way.
  And, again, before, as I close, I would like to thank the staff that 
has worked so hard: Joe Pinder, Bob Foster, Jackie Moran, Sam Geduldig 
on my staff, and many other staffers on all of these committees whose 
chairmen have been mentioned who have worked this bill in a way that 
solves a complicated problem in the right way.
  Mrs. MALONEY. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman 
from Massachusetts (Mr. Frank), ranking member of the Financial 
Services Committee.

                              {time}  1300

  Mr. FRANK of Massachusetts. Mr. Speaker, I thank the gentlewoman. She 
and the gentleman from New York (Mr. Crowley) and others on our 
committee on both sides of the aisle worked constructively on a good 
bill. I appreciate the kind words of the majority whip.
  There was a threatening climate towards foreign direct investment a 
few months ago as a result of the reaction to the Dubai Ports. I 
thought it was a mistake to allow Dubai to be able to buy those ports, 
but I did think that the reaction against that threatened to jeopardize 
a very important source of support for the American economy, and that 
is foreign direct investment.
  There was among some of our colleagues a kind of reaction to say, 
``We don't want them bringing their money in here and investing in 
America.'' That was unwise, and I think cooler heads on both sides of 
the aisle have prevailed, and we have a bill that recognizes that 
foreign direct investment, the foreign investment in building plants 
and running enterprises in America, is a good thing.
  Many Americans complain when American corporations invest their money 
in physical facilities overseas. Well, it then does not make sense to 
complain about the reciprocal. Yes, we want to make sure that nothing 
is done that jeopardizes our security.
  I think we have a bill today that improves the situation without any 
kind of drastic change of a sort that would have endangered foreign 
direct investment, and I have to say there was a terrible mistake made 
by the Bush administration, in my judgment, in not shutting down the 
Dubai Ports thing before we got to it.
  I do think we should be very clear, though, we have to differentiate 
between laws which are badly administered and laws which are badly 
structured. We have had cases, in my view, where this administration 
has messed up on a number of occasions. I think they badly handled 
Katrina. They made a terrible mistake with Dubai, but if we were going 
to drastically wrench out of shape every law that this administration 
administers poorly, we would not be taking an August recess. That would 
keep us busier than we already are.
  What we have to do is make a separation. We have to be able to 
differentiate between the incompetence of an

[[Page H5869]]

administration and a structural failing in the law.
  Now, we have done that in this case. I understand the bipartisanship 
extends here to the restructuring, in a reasonable way, in the law and 
not to recognition in my part on the incompetency of the 
administration. I do not mean to include my colleagues in saying that, 
but I do think this is the principle we have tried to follow on our 
side.
  When this administration messes something up, we should not overreact 
and wrench the structure out of shape. We should make those structural 
changes that might be called for. That is what we are doing here, and 
we are preserving the role that foreign direct investment can play in 
the United States. We can express the hope that this administration in 
its remaining time will not misadminister this as badly as they did 
before.
  Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Ohio (Ms. Pryce), the chairman of the appropriate subcommittee who has 
shown enormous leadership on this issue.
  Ms. PRYCE of Ohio. Mr. Speaker, I want to thank the chairman for 
yielding me the time and his invaluable leadership on this piece of 
legislation. His leadership led us very thoughtfully through this 
process, and we did not have a knee-jerk reaction that so often happens 
around here. Your valued experience and insights have made this much 
better legislation. Thank you.
  Over the last few months, we have heard very much about CFIUS. Media 
reports of CFIUS transactions such as the Dubai Ports deal have given 
pause to most Americans and awakened this Congress to the need to 
reform the process of allowing foreign investment in the United States. 
Congress has taken a strong position on national security since 9/11, 
and this legislation updates CFIUS for a post-9/11 world where national 
security and homeland security need to be considered much more strongly 
than in years past. National security, however, is not mutually 
exclusive of economic security. This legislation strives to ensure 
national security while promoting the creation and maintenance of jobs.
  This legislation institutes vice chair positions in CFIUS to be 
filled by the Secretary of Homeland Security and the Secretary of 
Commerce. We believe it shows how America continues to think globally 
for investment and locally for security.
  While strengthening our security, we have also continued our work to 
strengthen our relationships and open markets with nations abroad. 
These countries have a growing appetite for foreign goods and products, 
American products and American investments.
  American companies and brand names that we all recognize have grown 
exponentially because of these market openings, and growing American 
companies mean growing American jobs.
  In Ohio, we have seen the benefits of open markets and foreign 
investment, welcoming into our communities Siemens, Sodexho, Honda, 
Lexis-Nexis, and many, many more.
  Honda Motor Corporation has become the largest auto producer in Ohio 
beginning production in 1979 with an initial investment of $35 million 
in Marysville, Ohio. To date, Honda's capital investment in Ohio tops 
$6.3 billion over 26 years. Honda's North American plants purchased 
more than $6.5 billion in parts from 150 different Ohio suppliers just 
in 2005. Honda's investment in the people of Ohio keeps approximately 
8,500 people employed.
  When a foreign company looks to invest in the U.S., they are looking 
to grow their business, and that equals growing jobs in the United 
States. The U.S. Commerce Department says that foreign firms doing 
business in the U.S. employed nearly 5.1 million employees in 2004, 
slightly less than one out of every 20 workers in the private sector.
  This process of reforming CFIUS has the potential to undercut the 
United States' long-standing support for capital market access and the 
free movement of capital. Thanks to the chairman's leadership and a 
very thoughtful approach to this reform effort, I believe this 
legislation continues to focus our efforts in securing our Nation, 
while remaining committed to free trade as one of the greatest engines 
of prosperity.
  In recent months, the Treasury Department has made strides in 
congressional notification of pending deals that could potentially 
affect national security, but that is simply not enough. This 
legislation ensures that a Dubai Ports World situation does not happen 
again in a post-9/11 world. When questions of national security or 
foreign government ownership arise, accountability is clear, and the 
transaction moved immediately to investigation.
  The American people can feel confident that this legislation 
institutes the oversight and protections needed to determine if a 
foreign investment transaction is in the best interests of the United 
States' national security.
  In a world intertwined by global companies, it is important we 
continue to protect U.S. national and economic security while promoting 
foreign investment. This issue touches every American who wants to know 
that each day they are safe.
  I want to thank the chairman and Ranking Member Frank, my good 
friend, Ranking Member Maloney, our whip, Mr. Blunt, and Representative 
Crowley and everyone who worked so hard on this, and I urge support.
  Mrs. MALONEY. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman 
from New York (Mr. Crowley) who has worked very hard on this bill.
  (Mr. CROWLEY asked and was given permission to revise and extend his 
remarks.)
  Mr. CROWLEY. Mr. Speaker, I thank the gentlewoman from New York for 
yielding me the time, and I rise in strong support of this bipartisan 
piece of legislation.
  I want to commend the work of Majority Whip Blunt, a good friend, as 
well as Representative Pryce and Representative Maloney for their 
leadership of working on this legislation. I also want to recognize the 
outgoing chairman and my good friend, Mike Oxley, for all of his work 
on this and the many pieces of legislation we have worked together on 
in a bipartisan way, and particularly Barney Frank, who saw through all 
of this, cut through the politics and right to the chase and worked 
very hard in seeing that this important bill passed today.
  H.R. 5337 works to keep the flow of direct foreign investment in the 
U.S.A. strong while putting national security first. This is a good 
jobs bill, pro-business. It is pro-labor, and this bill does all things 
to help to secure our Nation, yet not stop investment here in the 
United States. I am pleased to say this bill enjoyed unanimous support 
in the Committee on Financial Services, passing on a 64-0 vote.
  This bill enjoys the support of everyone from the Center for American 
Progress to the Chamber of Commerce.
  This bill is about keeping the flow of foreign investment coming to 
the U.S. and not driving these funds and their subsequent jobs out of 
the country.
  But H.R. 5337 includes new, tough safeguards put in place to ensure 
the security of America first. This entire legislative initiative, 
which has been pursued in a bipartisan fashion, is a result of the 
botched handling of the DPW transaction, the Dubai Ports deal. That 
transaction involved a government-owned company from Dubai buying into 
various port assets here in the United States.
  As a result, a significant and appropriate focus of the committee has 
been to toughen the scrutiny for acquisitions by government-owned 
companies since some government-owned companies will make decisions 
based on government interests and not commercial interests. No job, no 
deal, no transaction is worth threatening the safety of Americans, and 
this bill puts those conditions in place. We all know this to be true, 
but being from New York City, it is even more true.
  This bill will provide strong, new safeguards to ensure our Nation's 
security and protect critical infrastructure, but also continues to 
give CFIUS flexibility to exercise discretion, allowing CFIUS to focus 
on the deals that raise real national security issues and not get 
bogged down into those deals with no national security implications at 
all.
  For example, this bill will allow CFIUS to go straight to an 
investigation phase if CFIUS so decides that the concerns are so 
serious as to merit this.
  This is a good bill, protecting national security, guaranteeing the 
flow of direct foreign investment in the

[[Page H5870]]

U.S., and ensuring we will not have another Dubai Ports debacle, and I, 
therefore, urge its passage in the House today.
  And finally, I understand the Senate is in the process of moving 
their bill forward, and I look forward to a constructive conference 
with the Senate, but this issue is far too important to compromise our 
national security or our Nation's economic security on backroom 
wheeling and dealing.
  We, in the House, in a bipartisan manner, recognize the diligence 
that went into crafting this bill, and we will work for this to be the 
lead text in any conference.
  The Senate bill does not meet our important threshold on national or 
economic security. This bill does, and I know we in House who have 
worked as hard as we have will fight in conference for a good bill or 
we will take no bill at all.
  I urge a ``yes'' vote on this bill. It protects national security, 
enhances the ability of more foreign investment here in the U.S.A. and 
ensures the transparency of CFIUS.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Foley), a distinguished member of the Ways and Means 
Committee.
  Mr. FOLEY. Mr. Speaker, I thank the chairman for his work on this, as 
well as many, many others.
  We know how we got here on this important bill, and it was the Dubai 
Ports deal. It shocked America, and it shocked me as a member of the 
Ways and Means Committee. Not that we were thumbing our noses at 
investors who would feel comfortable investing in the United States. 
That was not the question. It was not a question about our support for 
their efforts in the war on terrorism. We support their efforts.
  But as was stated by Mr. Crowley, it was a foreign government, and 
foreign governments behave differently than foreign corporations. 
Corporations do not care about the politics. They care about the 
profits. Governments take a different view of the world and have to 
think of external and internal political calculations.
  What startled me about the deal was the fact when then-Secretary of 
the Treasury, John Snow, appeared before our panel, when the news first 
broke about this transaction, when I asked him what was involved in the 
vetting process, he looked at me as if he had no idea about the 
transaction at all. Then we came to find out mid-level managers at the 
Department decided this on their own. They had not properly vetted it 
through the necessary agencies to ensure that we had covered the gamut 
of questions that may have arose from this transaction.
  Fortunately, based on the leadership that has been displayed here in 
crafting this bill in a bipartisan fashion, we will now have a process 
by which we can analyze and investigate and give comfort to the 
American public that a transaction involving six strategic ports or any 
other facility will have the proper authorities reviewing the intricacy 
of the details.
  They always say the devil's in the details. In this transaction, we 
knew very little about the intentions of the port companies, their 
expansion capabilities, their leasehold interests, how they may be 
transferrable to other entities. We had a blank slate on which to 
review this transaction.
  This bill brings to the floor and to the process transparency, 
clarity and an ability to tell our constituents we know the 
transaction.
  Mrs. MALONEY. Mr. Speaker, may I inquire as to the time remaining.
  The SPEAKER pro tempore. The gentlewoman from New York (Mrs. Maloney) 
has 7 minutes remaining. The gentleman from Ohio (Mr. Oxley) has 7 
minutes remaining.
  Mrs. MALONEY. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Illinois (Ms. Schakowsky).
  Ms. SCHAKOWSKY. Mr. Speaker, I thank the gentlewoman for yielding, 
and I rise in support of H.R. 5337 and want to add some important 
history and context to our discussion.
  The Omnibus Trade Act of 1988 was referred to the Committee on Energy 
and Commerce on which I sit. During its consideration, our committee 
produced the Exon-Florio provision which determines what can be bought 
in the United States by foreign entities, and it was included in the 
final version of the Omnibus Trade Act.
  Exon-Florio authorized the President to suspend or prohibit the 
acquisition of a U.S. corporation by a foreign entity. Responsibility 
for executing Exon-Florio was delegated to the Committee on Foreign 
Investment in the United States, CFIUS, the interagency committee that 
was formed to protect the United States' economic well-being and 
national security.

                              {time}  1315

  In the past, the Energy and Commerce Committee has conducted numerous 
oversight hearings, aggressively evaluating how well CFIUS has complied 
with the requirements of Exon-Florio. When the Senate amended Exon-
Florio and passed the Byrd amendment in 1993, members of Energy and 
Commerce were conferees for those provisions.
  While I am pleased that the Energy and Commerce Committee conducted a 
hearing on CFIUS and considered it in open markup, and while we support 
the legislation, we are disappointed that a number of the provisions we 
added to the bill are not in the version we are considering today. 
These are matters of the utmost importance to our economic and national 
security. As we proceed, I encourage my colleagues to be vigilant and 
consider these matters carefully.
  I look forward to continuing our work in the Committee on Energy and 
Commerce, consistent with its long-standing involvement with this 
issue, and working with my other colleagues in the House who have also 
put much thought and effort into this legislation.
  Mr. OXLEY. Mr. Speaker, I am now pleased to yield 2 minutes to the 
gentleman from Florida (Mr. Stearns) of the aforementioned Energy and 
Commerce Committee.
  (Mr. STEARNS asked and was given permission to revise and extend his 
remarks.)
  Mr. STEARNS. Mr. Speaker, I rise, like my other colleagues, in 
support of H.R. 5337, the Reform of National Security Reviews of 
Foreign Direct Investments Act. Obviously, we all agree this is a bill 
that will strengthen the American economy by encouraging others to 
invest in America, while at the same time, fortifying our national 
security.
  Myself and Ranking Member Schakowsky had a hearing dealing with this 
bill, which showed the importance of it. We had a very small part. I 
think the Department of Commerce is now co-vice chair in the bill, but 
I want to commend Mr. Blunt for his leadership on this, and also for 
the continuing leadership of Chairman Oxley, who did all the vitally 
important work for this. We had a very small part in it, my 
subcommittee, which is the Subcommittee on Commerce, Consumer 
Protection, and Trade.
  We all know that open investment policy has made the United States a 
favorite destination for foreign direct investment, with over $115 
billion invested in 2004, supporting over 5 million American jobs found 
in every State of this union, from car manufacturing plants in Missouri 
to aircraft production in my home State of Florida.
  This bill will ensure that the United States is and will remain the 
world's benchmark for open, transparent investment policy. This 
openness and this transparency in our vibrant markets at home has 
basically allowed American companies to export those principles abroad, 
principles that ultimately increase prosperity and, most importantly, 
encourage better acceptance of the democratic and free markets, 
principles that form the bedrock of the American way of life.
  So, again, I support this bill, I urge my colleagues to do so, and I 
thank my colleague for the time.
  Mrs. MALONEY. Mr. Speaker, I take this opportunity to thank Chairman 
Oxley for his distinguished service to this body and to this country. 
He has been a very fine chairman of the Financial Services Committee, 
on which I serve. An example of his leadership is the bill that is 
before us today, which had very strong bipartisan input, was balanced, 
took into consideration concerns first of all for national security but 
also for the business community and all concerned.
  In sum, the bill has over 90 cosponsors. It is a balanced approach, 
making sure that foreign acquisitions do not jeopardize our national 
security while continuing to encourage appropriate foreign investment.

[[Page H5871]]

  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I am now pleased to yield 1 minute to the 
distinguished chairman of the Armed Services Committee, the gentleman 
from California (Mr. Hunter).
  Mr. HUNTER. I thank the gentleman for yielding, and I just wanted to 
say that I am going to support this legislation. We have several 
important issues that we think were decided in the right way, 
particularly the one that gives the Secretary of Defense a veto of the 
process if he finds that national security interests are impaired or 
are affected. And that is very, very important to us.
  There are several issues that we think still need to be resolved that 
are important to the Armed Services Committee, but we support the bill 
in terms of moving it forward into the conference and getting this very 
important legislation, intended to tighten up the CFIUS process, in 
place so that we can apply it to pending transactions.
  So, Mr. Speaker, I intend to vote ``yes'' on this, but to work very 
closely with the gentleman from Ohio, my good friend, and with all the 
other Members who have been putting this legislation together as we 
move through conference to try to firm up a few other important defense 
issues as we go through the conference.
  Mrs. MALONEY. Mr. Speaker, I do not have any further requests at this 
time, and I yield back the balance of my time and urge a ``yes'' vote.
  Mr. OXLEY. Mr. Speaker, I will be brief. I do not think anybody could 
have predicted, certainly not me, that a few weeks after the firestorm 
that came about with the announcement of the Dubai Ports deal that we 
would be on the floor today debating legislation that was considered by 
our committee and others and passed in our committee overwhelmingly 
with a 64-0 bipartisan vote, with cooperation on both sides of the 
aisle, to deal with a real problem.
  Even though I personally felt there was a great deal of overreaction 
about the Dubai Ports deal, the fact is that it revealed some very deep 
concerns that people like the gentleman from California had, and 
others, about how the CFIUS process works. We set about with great 
care, working with Mr. Frank, our ranking member, Mrs. Maloney and Mr. 
Crowley, to craft a bill under the guidance of Chairwoman Pryce and Mr. 
Blunt from Missouri, to craft a bill that met the balance, met the test 
of dealing with our very real concerns about national security and, at 
the same time, encouraging foreign investment into our country.
  I have to say that of all the bills I have been involved in since I 
have been chairman, and, frankly, all the bills I have been involved in 
since I have been here in 25 years, this was one that gave me a great 
deal of satisfaction because it showed the legislative process at its 
very best, with input from people who had a great deal of knowledge, 
who worked very hard on the issue, from the staff to the Members, to 
craft this legislation and stand here today, just a few weeks after 
that firestorm, with a product that is going to pass overwhelmingly in 
this House and that really says that this House, when we want to, can 
deal in a bipartisan way with some very difficult issues in a very 
professional manner.
  Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?
  Mr. OXLEY. I will be glad to yield to my friend from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Speaker, I would just like to note 
that I agree with what the chairman has just said. But this is not the 
first example of a bill coming out of the Financial Services Committee 
on a subject which could have been very contentious but, in fact, came 
to the floor in a form that reflected a very good process, a very open 
process, with hearings and subcommittee, committee markups, and full 
participation and, as a result, received overwhelming votes.
  We saw this on the GSE bill, we saw it in the bill dealing with the 
extension of credit, called the FACT Act, and we have seen it on a 
number of bills, and the chairman deserves a great deal of credit on 
this. And as his career here draws to a close, I just want to note that 
this is a very good example of the chairman's willingness to help us 
bring out the best in ourselves in this process.
  And he is correct, this could have been the source of a lot of 
demagoguery, a lot of political sniping, of frankly some 
destabilization to the economy because of the negative impact a badly 
handled bill could have had. So I just want to acknowledge that as the 
ranking member, it has been my privilege to work with the gentleman 
from Ohio, and this is only one of a series of bills where we have 
worked together, under his leadership, to take subjects that, as I 
said, could have been contentious and destabilizing, and brought the 
House a product with overwhelming support.
  I thank the gentleman for yielding.
  Mr. OXLEY. I can't match the eloquence of the gentleman from 
Massachusetts, so I yield back
  Mr. LANTOS. Mr. Speaker, I rise in support of H.R. 5337, the National 
Security Foreign Investment Reform and Strengthened Transparency Act of 
2006.
  As we have seen over the past year, greater oversight is needed 
regarding foreign investment in the United States. I have expressed 
serious concern regarding the acquisition of U.S. port operating 
companies by foreign companies. I want to commend Chairman Oxley and 
Ranking Democratic Member Frank for the work they have done to bring 
this legislation to the floor.
  Mr. Speaker, I want to call attention to one critical issue, the 
acquisition of U.S. domestic oil companies by Russian firms with close 
ties to the Russian Government. News reports suggest that Russian oil 
interests seek to acquire U.S. pipelines and liquefied gas facilities 
in order to control the entire supply chain of Russian gas exports to 
the United States, from extraction to consumer sales and distribution. 
At the same time, however, Russia is preventing American and other 
foreign oil companies from acquiring more than a 49 percent stake in 
all but the country's smallest oil and gas fields.
  This effort to gain political control of energy markets is not 
surprising, but it is totally unacceptable.
  Acquisition by Russian firms of portions of our energy distribution 
system poses an extremely serious national security threat to the 
United States. Russian energy companies such as Gazprom and Rosneft are 
state-controlled entities and are not simply foreign-owned companies 
that act as independent commercial entities. These Russian energy firms 
are run by friends and former colleagues of Russian President Vladimir 
Putin and their officers include individuals who occupy high level 
positions in the Putin administration. For example, Rosneft Chairman 
Igor Sechin is Putin's Deputy Chief of Staff.
  These state-dominated companies operate as tools of the Russian 
Government and the strategy to use Russia's vast oil and gas exports as 
an instrument of political and economic power. One needs to remember 
the problems faced earlier this year when Russian firms briefly cut off 
natural gas to Ukraine, and this irresponsible action raised serious 
concerns about political manipulation of Russian energy supplies 
throughout Western Europe.
  Mr. Speaker, Putin effectively re-nationalized the Russian energy 
industry in 2003 by expropriating the assets of Russia's largest 
privately-owned energy company, Yukos, and by failing to pay 
appropriate compensation to its owners. Yukos shares were held by 
numerous United States citizens and shareholders, and they lost some $6 
billion.
  Rosneft's acquisition of assets from Yukos, a publicly traded 
company, violated the basic norms of a free market. Public accounts of 
the transaction suggest that Rosneft's senior officers and directors, 
some of whom are senior officials of the Russian Government, personally 
profited from the theft of these assets through their involvement in a 
sham transaction. In that transaction, a front-company of unknown 
ownership acquired the assets at billions of dollars below their market 
value in a forced auction arranged by these very officials, who in turn 
secured the prompt transfer of these assets from the front-company to 
Rosneft--a sequence of events that has raised serious questions of 
corruption.
  The Council on Foreign Relations recently released a report on 
Russia's slide toward authoritarianism that called the Russian 
Government's forced breakup of Yukos and the long-term

[[Page H5872]]

imprisonment of its senior officials on charges of tax evasion as ``the 
most consequential single episode in the refashioning of the Russian 
state in this decade.''
  Mr. Speaker, I am pleased that the Financial Services Committee 
recognizes the seriousness of these issues. The Committee report on 
H.R. 5337 makes clear that the Congress expects the acquisitions of 
U.S. energy assets or companies by foreign governments or companies 
controlled by foreign governments will be reviewed closely for their 
national security impact. I fully endorse the Committee's view that 
Congress should continue its long-standing efforts to ensure that U.S. 
investors are treated fairly in foreign markets and that foreign 
governments honor their commitments in international agreements.
  Mr. Speaker, I urge careful consideration of any future acquisition 
of U.S. oil interests by Russian firms, and I urge my colleagues to 
support this legislation.
  Mr. BARTON of Texas. Mr. Speaker, I rise in support of H.R. 5337, the 
Reform of National Security Reviews of Foreign Direct Investment Act. I 
want more foreign investment in America, not less, but I do not want 
the kind that threatens our security. CFIUS exists to make the 
distinction, and we need to know that it's doing a good job.
  We don't automatically fear foreign investors here in America. The 
money provided by foreign investors creates jobs, growth, and 
opportunity here at home. I just want to ensure the investment we 
attract does not jeopardize national security.
  H.R. 5337 provides consistent criteria with appropriate discretion 
and will improve the review process without impairing our ability to 
attract significant and needed foreign investment.
  Mr. Speaker, the Energy and Commerce Committee shares jurisdiction 
over this matter and we marked up the bill in my Committee with some 
changes. While the amended bill we are considering today contains some 
differences than the version my Committee reported, I support it. 
Importantly, it provides for mandatory review of foreign government-
controlled transactions. Additionally, it provides clear and consistent 
review criteria for all other commercial investments, it adds the 
Secretary of Energy to the Committee, and it makes the Secretary of 
Commerce a co-vice chair of the Committee. Most important, it adds 
transparency in the process for Congressional oversight and establishes 
new reporting requirements many of us feel are essential to this 
process.
  I support H.R. 5337 and urge my colleagues to approve the measure.
  Mr. THOMPSON of Mississippi. Mr. Speaker, I stand here today as 
Ranking Member of the Committee on Homeland Security in support of H.R. 
5337, the Reform of National Security Reviews of Foreign Investments 
Act. This bill provides needed reform by formalizing and streamlining 
the structure and duties of the Committee on Foreign Investment in the 
United States (CFIUS). Indeed, this bill addresses many of the concerns 
raised about CFIUS during the past 6 months, especially its current 
lack of transparency and oversight. This bill rectifies these concerns 
by formally establishing CFIUS, its membership, streamlines how and 
when a CFIUS review will be conducted.
  Mr. Speaker, the bill formalizes the CFIUS membership and requires 
the following to serve: (1) Secretaries of Treasury, Homeland Security, 
Commerce, Defense, State, and Energy; (2) Attorney General; Chair of 
the Council of Economic Advisors; the U.S. Trade Representative; 
Director of Office of Management and Budget; Director of National 
Economic Council; and (3) The Director of Office of Science and 
Technology Policy; the President's assistant for national security 
affairs; and any other designee of the President from the Executive 
Office.
  Under this bill, the Treasury Department will be the Chair with the 
Secretaries of Commerce and Homeland Security as the Vice Chairs. CFIUS 
will conduct a review of any national security related business 
transaction in which the outcome could result in foreign control of any 
business engaged in interstate commerce in the U.S. After reviewing the 
proposed business transaction, CFIUS will make a determination, the 
outcome of which could require conducting a full investigation if one 
of three circumstances exists: transaction involves a foreign 
government-controlled entity; transaction threatens to impair national 
security and the review cannot mitigate concerns; or National 
Intelligence Director identifies intelligence concerns and CFIUS could 
not agree upon methods to mitigate the concerns.
  Incidents such as the Dubai Ports World (DPW) and the China National 
Offshore Oil Corporation's attempted bid for control of oil company 
Unocal raised and increased awareness around transactions that should 
receive CFIUS review. These incidents highlighted the need for 
meaningful CFIUS reform.
  The bill balances the need for continued foreign investment in the 
United States, but reviewing that investment to determine if it would 
impair or threaten national security or critical infrastructure.
  This bill establishes accountability to key Cabinet level agencies 
and, much like other corporate reform, requires personal action by the 
Secretaries of Treasury, Commerce, and Homeland Security. Congressional 
Research Service's independent report found that for all merger and 
acquisition activity in 2005, 13 percent of it was from foreign firms 
acquiring U.S. firms. This is up from 9 percent almost 10 years before. 
This statistic shows that foreign investment in the U.S. is vital to 
the economy.
  Only through this legislation will CFIUS have a formal budget, 
membership, and clear mission--protecting American security while 
maintaining a free and growing economy.
  In closing, let me thank my colleagues on the Financial Services 
Committee for their leadership on this legislation, especially my 
Democratic colleagues Representative Carolyn Maloney and Joseph Crowley 
of New York for their efforts. Congresswoman Maloney actually testified 
before the Committee on Homeland Security on this legislation, 
explaining its necessity and importance.
  Mr. BARTON of Texas. Mr. Speaker, although the legislation adds the 
Secretary of the Department of Homeland Security as a co-Vice Chair of 
CFIUS, I would like to enter into the Record a letter from Chairman 
King of the Homeland Security Committee. The letter states that this 
designation does not affect, alter, or add to that Committee's 
jurisdiction.

                                    U.S. House of Representatives,


                               Committee on Homeland Security,

                                    Washington, DC, July 19, 2006.
     Hon. Michael G. Oxley,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Oxley: I write in regard to H.R. 5337, Reform 
     of National Security Reviews of Foreign Direct Investments 
     Act.
       I understand that nothing in H.R. 5337 or the amendments to 
     H.R. 5337 affects, alters, or adds to the jurisdiction of the 
     Committee on Homeland Security. Specifically, H.R. 5337's 
     designation of the Department of Homeland Security as a vice-
     chairperson of CFIUS and the imposition of any additional 
     duties associated with the appointment of the Department of 
     Homeland Security as a vice-chairperson does not affect, 
     alter, or add to my Committee's jurisdiction.
       I'm pleased that we can continue to move this bill forward, 
     and I look forward to working with you in that process.
            Sincerely,
                                                    Peter T. King,
                                                         Chairman.
                                  ____
                                  
  Ms. WATERS. Mr. Speaker, I rise in strong support of, H.R. 5337, the 
Reform of National Security Reviews of Foreign Investments bill. First, 
I want to once again acknowledge the work of the distinguished 
gentleman, Mr. Oxley, Chairman of the Committee on Financial Services 
for supporting this bill, and Ranking Member Frank for recognizing the 
importance of this issue. Let me congratulate Chairwoman Pryce, of the 
Subcommittee on Domestic and International Monetary Policy, Trade and 
Technology, for working to move this legislation through the Committee 
and onto the Floor. The bill we consider today represents a 
comprehensive set of reforms to the Committee on Foreign Investment in 
the United States' (CFIUS) procedures. It is a testament to the 
diligence of the Subcommittee Chair and its Members that there is 
strong bi-partisan support for H.R. 5337, also sponsored by the 
Subcommittee Ranking Member Ms. Maloney, Mr. Crowley and Mr. Blunt.
  It has been more than 4 months since we were made aware of the 
Committee of Foreign Investment's (CFIUS) activities related to Dubai 
World Ports and the implications of the proposed deal for national 
security. I can genuinely say that the Members of the Committee on 
Financial Services have been deeply involved in this issue since the 
deal was analyzed by Congress. H.R. 5337 is designed to reform the 
CFIUS process based on the information gleaned from hearings on the 
subject. I am the first to say that no one is interested in cutting off 
foreign direct investment in the U.S., but we do expect such 
investments to be prudently made and that they are in the best interest 
of the country. As the leader of the world economy, it would be foolish 
to assume that we could take such steps to prohibit foreign direct 
investment. What we really need are safeguards to ensure that the CFIUS 
process is consistent with the original Congressional intent about 
national security and investments.

  This bill will guarantee that CFIUS operates within the law, and it 
makes clear who is responsible for what, since it was revealed that no 
one was sure who was responsible for the Ports decision. Another 
critical issue is how decisions are actually made and what entity is 
principally responsible for protecting the national security interests 
of the nation as they

[[Page H5873]]

pertain to foreign direct investment. The bill enables CFIUS to 
unilaterally initiate a review where an national security issue is 
raised; any foreign government backed deal would be subject to review; 
both the Secretaries of Treasury and Homeland Security must sign off on 
reviews, while the Homeland Security Secretary would be vice-chair of 
the Committee; and all reviews are subject to review by the Director of 
National intelligence.
  Most importantly, everyone knows that transparency and accountability 
were, in part, at the heart of Congress' uproar over the Dubai World 
Ports deal. H.R. 5337 requires that CFIUS report bi-annually to 
Congress on its activities, which should prevent Congress from being 
alerted to such deals after the fact. I would submit that this is 
strong legislation that will only make Congress' job less difficult on 
the issue of national security and foreign direct investment. 
Therefore, I urge my Colleagues to support this major reform bill.
  Mr. BACA. Mr. Speaker, I rise in strong support as a cosponsor of 
H.R. 5337, National Security Foreign Investment Reform and Strengthened 
Transparency Act of 2006.
  This legislation clarifies and strengthens the authority of the 
Committee on Foreign Investment in the United States to ensure that 
foreign acquisitions of U.S. companies or assets do not threaten 
national security.
  As the tragic events of September 11, 2001 demonstrate, the threats 
to the security of the United States have increased and evolved in ways 
that could not have been anticipated when Congress enacted the Exon-
Florio provision in 1988. As a result, we can no longer view national 
security only through the lens of conventional military threats. We 
must also guard against other types of threats that could seriously 
harm our Nation such as a disruption of U.S. energy supplies.
  With global energy supplies tight, and oil and gas prices 
skyrocketing, a major disruption of U.S. energy supplies would pose a 
grave danger to the Nation's economy and the safety and security of the 
American people. This bill recognizes this fact and includes strong 
measures to ensure that foreign takeovers of U.S. energy companies or 
assets do not threaten the energy security of the United States.
  The Committee's Report states: ``H.R. 5337 makes clear that national 
security encompasses threats to critical U.S. infrastructure, including 
energy-related infrastructure. The Committee expects that acquisitions 
of U.S. energy companies or assets by foreign governments or companies 
controlled by foreign governments will be reviewed closely for their 
national security impact. If such acquisitions raise legitimate 
concerns about threats to U.S. national security, appropriate 
protections as set forth in the statute should be instituted including 
potentially the prohibition of the transaction.''
  Russia is a perfect example. Russia has made it clear that it wants 
to acquire pipelines and natural gas conversion facilities in the 
United States. I strongly believe, however, the United States should 
tread very carefully before permitting such acquisitions. Here's why.
  In 2003, Russian President Vladimir Putin reasserted government 
control over Russia's energy industry through the expropriation of 
Russia's largest privately-owned energy company, Yukos, without paying 
any compensation to its owners, including U.S. shareholders who lost 
approximately $6 billion.
  As a result, Russian energy companies such as Gazprom and Rosneft are 
controlled by friends and associates of Putin, including individuals 
who occupy high level positions in the Putin Administration. Putin 
appears to be using these companies to implement his strategy of using 
Russia's oil and gas exports as an instrument of political and economic 
coercion to advance the interests of the Kremlin. If these Russian 
government-controlled companies gain control of U.S. energy assets, 
U.S. energy security could easily be put at risk just as was the case 
when Russia cut off natural gas supplies to Ukraine in January, and 
later this spring, when Gazprom not-so-subtlety warned European leaders 
that Russia would sell its natural gas to Asia instead of Europe if 
they tried to interfere in Russia's plans to control the entire sales 
and distribution of natural gas throughout Europe.
  Mr. Speaker, this would be a disaster for America. We must not let 
this happen to the United States.
  Mr. SHAYS. Mr. Speaker, I rise in strong support of H.R. 5337, the 
National Security Foreign Investment Reform and Strengthened 
Transparency Act.
  I am an original cosponsor of this legislation, which would require 
that all transactions involving state-owned companies be automatically 
subject to a full 45-day investigation. The legislation would also name 
make the Homeland Security secretary the vice chairman of the Committee 
for Foreign Investment in the United States (CFIUS), which is chaired 
by the Treasury Department.
  The recent attempt by Dubai Ports World (DP World), a port operations 
company owned by the government of the United Arab Emirates (UAE), to 
purchase operating terminals at six U.S. ports, was a clear indicator 
we must reform the CFIUS process.
  Whenever a foreign investment affects homeland security, it deserves 
greater scrutiny. This legislation strikes the proper balance between 
strengthening our economy and protecting the American people.
  Mr. Speaker, I urge my colleagues to support this legislation.
  Mr. MORAN of Virginia. Mr. Speaker, I support H.R. 5337, and I would 
like to applaud the floor managers of the bill for their efforts on the 
legislation. The CFIUS process is in need of reform, and this bill 
provides reforms that effectively balance the country's need for strong 
national security protections with its need for continued foreign 
investment.
  While our national security objectives must be paramount in this 
area, I do have some concern about the time CFIUS could take under the 
bill's provisions to review an acquisition that it ultimately 
determines presents no national security issues. The bill allows for a 
CFIUS review period of up to 30 days, followed by an investigation of 
up to 45 days when certain conditions specified in the bill are 
determined to be present. The investigation period can then be extended 
under certain circumstances. Notably, there is a mandatory 
investigation of all acquisitions by state-owned companies even in the 
absence of any showing of a possible national security concern.
  I would prefer to see the process shortened where it is apparent at 
an early stage that national security is not an issue, and I urge my 
colleagues to consider changes in this regard in conference. It would 
be unfortunate if CFIUS resources were diverted from acquisitions with 
real national security implications to those with no such implications. 
I am comforted on this point, however, by the fact that the review and 
investigation provisions would not preclude a person from petitioning 
CFIUS to dispense with the initial review period and to go directly to 
the investigative stage, thereby shortening the process in situations 
that do not present significant security risks. My understanding is 
that such a petition could be filed under the current CFIUS regime, and 
I do not read the bill as changing the law in that regard. I would 
assume that CFIUS would consider any such petition on a case-by-case 
basis and would decide whether or not to grant it depending on various 
factors affecting national security. Such factors, I assume, would 
include whether the acquirer had established its national security 
credentials in previous CFIUS proceedings or otherwise, whether in the 
case of a government-owned acquirer the government was a U.S. ally, and 
many other factors bearing one way or another on national security. I 
am also encouraged by the fact that the bill's review and investigation 
provisions prescribe a maximum, not a minimum, number of days.
  Mr. Speaker, again I want to compliment the floor managers on a bill 
that puts national security first but that also will allow our 
continued need for foreign investment to be satisfied rather than 
ignored.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Ohio (Mr. Oxley) that the House suspend the rules and 
pass the bill, H.R. 5337, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. OXLEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.

                          ____________________