[Congressional Record Volume 163, Number 182 (Wednesday, November 8, 2017)]
[Senate]
[Pages S7111-S7119]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. CORNYN (for himself, Mrs. Feinstein, Mr. Burr, Mr. Peters,
Mr. Rubio, Ms. Klobuchar, Mr. Scott, Mr. Barrasso, Mr. Manchin,
and Mr. Lankford):
S. 2098. A bill to modernize and strengthen the Committee on Foreign
Investment in the United States to more effectively guard against the
risk to the national security of the United States posed by certain
types of foreign investment, and for other purposes; to the Committee
on Banking, Housing, and Urban Affairs.
Mr. CORNYN. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 2098
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Foreign
Investment Risk Review Modernization Act of 2017''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Sense of Congress.
Sec. 3. Definitions.
Sec. 4. Inclusion of partnership and side agreements in notice.
Sec. 5. Declarations relating to certain covered transactions.
Sec. 6. Stipulations regarding transactions.
Sec. 7. Authority for unilateral initiation of reviews.
Sec. 8. Timing for reviews and investigations.
Sec. 9. Monitoring of non-notified and non-declared transactions.
Sec. 10. Submission of certifications to Congress.
Sec. 11. Analysis by Director of National Intelligence.
Sec. 12. Information sharing.
Sec. 13. Action by the President.
Sec. 14. Judicial review procedures.
Sec. 15. Factors to be considered.
Sec. 16. Actions by the Committee to address national security risks.
Sec. 17. Modification of annual report.
Sec. 18. Certification of notices and information.
Sec. 19. Funding.
Sec. 20. Centralization of certain Committee functions.
Sec. 21. Unified budget request.
Sec. 22. Special hiring authority.
Sec. 23. Conforming amendments.
Sec. 24. Assessment of need for additional resources for Committee.
Sec. 25. Authorization for Defense Advanced Research Projects Agency to
limit foreign access to technology through contracts and
grant agreements.
Sec. 26. Effective date.
Sec. 27. Severability.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) foreign investment provides substantial economic
benefits to the United States, including the promotion of
economic growth, productivity, competitiveness, and job
creation, and the majority of foreign investment transactions
pose little or no risk to the national security of the United
States, especially when those investments are truly passive
in nature;
(2) maintaining the commitment of the United States to open
and fair investment policy also encourages other countries to
reciprocate and helps open new foreign markets for United
States businesses and their products;
(3) it should continue to be the policy of the United
States to enthusiastically welcome and support foreign
investment, consistent with the protection of national
security;
(4) at the same time, the national security landscape has
shifted in recent years, and so have the nature of the
investments that pose the greatest potential risk to national
security, which warrants a modernization of the processes and
authorities of the Committee on Foreign Investment in the
United States;
(5) the Committee on Foreign Investment in the United
States plays a critical role in protecting the national
security of the United States, and, therefore, it is
essential that the member agencies of the Committee are
adequately resourced and able to hire appropriately qualified
individuals in a timely manner, and that those individuals'
security clearances are processed as a high priority;
(6) the President should conduct a more robust
international outreach effort to urge and help allies and
partners of the United States to establish processes that
parallel the Committee on Foreign Investment in the United
States to screen foreign investments for national security
risks and to facilitate coordination; and
(7) the President should lead a collaborative effort with
allies and partners of the United States to develop a new,
stronger multilateral export control regime, aimed to address
the unprecedented industrial policies of certain countries of
special concern, including aggressive efforts to acquire
United States technology, and the blending of civil and
military programs.
SEC. 3. DEFINITIONS.
Section 721(a) of the Defense Production Act of 1950 (50
U.S.C. 4565(a)) is amended to read as follows:
``(a) Definitions.--In this section:
``(1) Access.--The term `access' means the ability and
opportunity to obtain information, subject to regulations
prescribed by the Committee.
``(2) Committee; chairperson.--The terms `Committee' and
`chairperson' mean the Committee on Foreign Investment in the
United States and the chairperson thereof, respectively.
``(3) Control.--The term `control' means the power to
determine, direct, or decide important matters affecting an
entity, subject to regulations prescribed by the Committee.
``(4) Country of special concern.--
``(A) In general.--The term `country of special concern'
means a country that poses a significant threat to the
national security interests of the United States.
``(B) Rule of construction.--This paragraph shall not be
construed to require the Committee to maintain a list of
countries of special concern.
``(5) Covered transaction.--
``(A) In general.--Except as otherwise provided, the term
`covered transaction' means any transaction described in
subparagraph (B) that is proposed, pending, or completed on
or after the date of the enactment of the Foreign Investment
Risk Review Modernization Act of 2017.
``(B) Transactions described.--A transaction described in
this subparagraph is any of the following:
``(i) Any merger, acquisition, or takeover that is proposed
or pending after August 23, 1988, by or with any foreign
person that could result in foreign control of any United
States business.
``(ii) The purchase or lease by a foreign person of private
or public real estate that--
``(I) is located in the United States and is in close
proximity to a United States military installation or to
another facility or property of the United States Government
that is sensitive for reasons relating to national security;
and
``(II) meets such other criteria as the Committee
prescribes by regulation.
``(iii) Any other investment (other than passive
investment) by a foreign person in any United States critical
technology company or United States critical infrastructure
company, subject to regulations prescribed under subparagraph
(C).
``(iv) Any change in the rights that a foreign person has
with respect to a United States business in which the foreign
person has an investment, if that change could result in--
``(I) foreign control of the United States business; or
``(II) an investment described in clause (iii).
``(v) The contribution (other than through an ordinary
customer relationship) by a United States critical technology
company of both intellectual property and associated support
to a foreign person through any type of arrangement, such as
a joint venture, subject to regulations prescribed under
subparagraph (C).
``(vi) Any other transaction, transfer, agreement, or
arrangement the structure of which is designed or intended to
evade or circumvent the application of this section, subject
to regulations prescribed by the Committee.
``(C) Further definition through regulations.--
``(i) Certain investments and contributions.--The Committee
shall prescribe regulations further defining covered
transactions described in clauses (iii) and (v) of
subparagraph (B) by reference to the technology, sector,
subsector, transaction type, or other characteristics of such
transactions.
``(ii) Exemption for transactions from identified
countries.--The Committee may, by regulation, define
circumstances in which a transaction otherwise described in
clause (ii), (iii), or (v) of subparagraph (B) is excluded
from the definition of `covered transaction' if each foreign
person that is a party to the transaction is organized under
the laws of, or otherwise subject to the jurisdiction of, a
country identified by the Committee for purposes of this
clause based on criteria such as--
``(I) whether the United States has in effect with that
country a mutual defense treaty;
[[Page S7112]]
``(II) whether the United States has in effect with that
country a mutual arrangement to safeguard national security
as it pertains to foreign investment;
``(III) the national security review process for foreign
investment of that country; and
``(IV) any other criteria that the Committee determines to
be appropriate.
``(iii) Exemption of certain contributions.--The Committee
may, by regulation, define circumstances in which
contributions otherwise described in subparagraph (B)(v) are
excluded from the term `covered transaction' on the basis of
a determination that other provisions of law are adequate to
identify and address any potential national security risks
posed by such contributions.
``(iv) Transfers of certain assets pursuant to bankruptcy
proceedings or other defaults.--The Committee shall prescribe
regulations to clarify that the term `covered transaction'
includes any transaction described in subparagraph (B) that
arises pursuant to a bankruptcy proceeding or other form of
default on debt.
``(D) Passive investment defined.--
``(i) In general.--For purposes of subparagraph (B)(iii),
the term `passive investment' means an investment by a
foreign person in a United States business--
``(I) that is not described in subparagraph (B)(i);
``(II) that does not afford the foreign person--
``(aa) access to any nonpublic technical information in the
possession of the United States business;
``(bb) access to any nontechnical information in the
possession of the United States business that is not
available to all investors;
``(cc) membership or observer rights on the board of
directors or equivalent governing body of the United States
business or the right to nominate an individual to such a
position; or
``(dd) any involvement, other than through voting of
shares, in substantive decisionmaking pertaining to any
matter involving the United States business;
``(III) under which the foreign person and the United
States business do not have a parallel strategic partnership
or other material financial relationship, as described in
regulations prescribed by the Committee; and
``(IV) that meets such other criteria as the Committee may
prescribe by regulation.
``(ii) Nonpublic technical information defined.--For
purposes of clause (i)(II)(aa), the term `nonpublic technical
information'--
``(I) has the meaning given that term in regulations
prescribed by the Committee; and
``(II) includes information (either by itself or in
conjunction with other information to which a foreign person
may have access)--
``(aa) without which critical technologies cannot be
designed, developed, tested, produced, or manufactured; and
``(bb) in a quantity sufficient to permit the design,
development, testing, production, or manufacturing of such
technologies.
``(iii) Nontechnical information defined.--For purposes of
clause (i)(II)(bb), the term `nontechnical information' has
the meaning given that term in regulations prescribed by the
Committee.
``(iv) Effect of level of ownership interest.--A
determination of whether an investment is a passive
investment under clause (i) shall be made without regard to
how low the level of ownership interest a foreign person
would hold or acquire in a United States business would be as
a result of the investment. The Committee may prescribe
regulations specifying that any investment greater than a
certain level or amount would not be considered a passive
investment.
``(v) Regulations.--The Committee shall prescribe
regulations providing guidance on the types of transactions
that the Committee considers to be passive investment.
``(E) Associated support defined.--For purposes of
subparagraph (B)(v), the term `associated support' has the
meaning given that term in regulations prescribed by the
Committee.
``(F) United states critical infrastructure company
defined.--For purposes of subparagraph (B), the term `United
States critical infrastructure company' means a United States
business that is, owns, operates, or primarily provides
services to, an entity or entities that operate within a
critical infrastructure sector or subsector, as defined by
regulations prescribed by the Committee.
``(G) United states critical technology company.--For
purposes of subparagraph (B), the term `United States
critical technology company' means a United States business
that produces, trades in, designs, tests, manufactures,
services, or develops one or more critical technologies, or a
subset of such technologies, as defined by regulations
prescribed by the Committee.
``(6) Critical infrastructure.--The term `critical
infrastructure' means, subject to regulations prescribed by
the Committee, systems and assets, whether physical or
virtual, so vital to the United States that the incapacity or
destruction of such systems or assets would have a
debilitating impact on national security.
``(7) Critical materials.--The term `critical materials'
means physical materials essential to national security,
subject to regulations prescribed by the Committee.
``(8) Critical technologies.--
``(A) In general.--The term `critical technologies' means
technology, components, or technology items that are
essential or could be essential to national security,
identified for purposes of this section pursuant to
regulations prescribed by the Committee.
``(B) Inclusion of certain items.--The term `critical
technologies' includes the following:
``(i) Defense articles or defense services included on the
United States Munitions List set forth in the International
Traffic in Arms Regulations under subchapter M of chapter I
of title 22, Code of Federal Regulations.
``(ii) Items included on the Commerce Control List set
forth in Supplement No. 1 to part 774 of the Export
Administration Regulations under subchapter C of chapter VII
of title 15, Code of Federal Regulations, and controlled--
``(I) pursuant to multilateral regimes, including for
reasons relating to national security, chemical and
biological weapons proliferation, nuclear nonproliferation,
or missile technology; or
``(II) for reasons relating to regional stability or
surreptitious listening.
``(iii) Specially designed and prepared nuclear equipment,
parts and components, materials, software, and technology
covered by part 810 of title 10, Code of Federal Regulations
(relating to assistance to foreign atomic energy activities).
``(iv) Nuclear facilities, equipment, and material covered
by part 110 of title 10, Code of Federal Regulations
(relating to export and import of nuclear equipment and
material).
``(v) Select agents and toxins covered by part 331 of title
7, Code of Federal Regulations, part 121 of title 9 of such
Code, or part 73 of title 42 of such Code.
``(vi) Other emerging technologies that could be essential
for maintaining or increasing the technological advantage of
the United States over countries of special concern with
respect to national defense, intelligence, or other areas of
national security, or gaining such an advantage over such
countries in areas where such an advantage may not currently
exist.
``(9) Foreign government-controlled transaction.--The term
`foreign government-controlled transaction' means any covered
transaction that could result in the control of any United
States business by a foreign government or an entity
controlled by or acting on behalf of a foreign government.
``(10) Intellectual property.--The term `intellectual
property' has the meaning given that term in regulations
prescribed by the Committee.
``(11) Intelligence community.--The term `intelligence
community' has the meaning given that term in section 3(4) of
the National Security Act of 1947 (50 U.S.C. 3003(4)).
``(12) Investment.--The term `investment' means the
acquisition of equity interest, including contingent equity
interest, as further defined in regulations prescribed by the
Committee.
``(13) Lead agency.--The term `lead agency' means the
agency or agencies designated as the lead agency or agencies
pursuant to subsection (k)(5).
``(14) Malicious cyber-enabled activities.--The term
`malicious cyber-enabled activities' means any acts--
``(A) primarily accomplished through or facilitated by
computers or other electronic devices;
``(B) that are reasonably likely to result in, or
materially contribute to, a significant threat to the
national security of the United States; and
``(C) that have the purpose or effect of--
``(i) significantly compromising the provision of services
by one or more entities in a critical infrastructure sector;
``(ii) harming, or otherwise significantly compromising the
provision of services by, a computer or network of computers
that support one or more such entities;
``(iii) causing a significant disruption to the
availability of a computer or network of computers; or
``(iv) causing a significant misappropriation of funds or
economic resources, trade secrets, personally identifiable
information, or financial information.
``(15) National security.--The term `national security'
shall be construed so as to include those issues relating to
`homeland security', including its application to critical
infrastructure.
``(16) Party.--The term `party' has the meaning given that
term in regulations prescribed by the Committee.
``(17) United states.--The term `United States' means the
several States, the District of Columbia, and any territory
or possession of the United States.
``(18) United states business.--The term `United States
business' means a person engaged in interstate commerce in
the United States.''.
SEC. 4. INCLUSION OF PARTNERSHIP AND SIDE AGREEMENTS IN
NOTICE.
Section 721(b)(1)(C) of the Defense Production Act of 1950
(50 U.S.C. 4565(b)(1)(C)) is amended by adding at the end the
following:
``(iv) Inclusion of partnership and side agreements.--A
written notice submitted under clause (i) by a party to a
covered transaction shall include a copy of any partnership
agreements, integration agreements, or other side agreements
relating to the transaction, including any such agreements
relating to the transfer of intellectual property, as
specified in regulations prescribed by the Committee.''.
SEC. 5. DECLARATIONS RELATING TO CERTAIN COVERED
TRANSACTIONS.
Section 721(b)(1)(C) of the Defense Production Act of 1950
(50 U.S.C. 4565(b)(1)(C)), as
[[Page S7113]]
amended by section 4, is further amended by adding at the end
the following:
``(v) Declarations relating to certain covered
transactions.--
``(I) Voluntary declarations.--Except as provided in this
clause, a party to any covered transaction may submit to the
Committee a declaration with basic information regarding the
transaction instead of a written notice under clause (i).
``(II) Mandatory declarations.--
``(aa) Certain covered transactions with foreign government
interests.--The parties to a covered transaction shall submit
a declaration described in subclause (I) with respect to the
transaction if the transaction involves the acquisition of a
voting interest of at least 25 percent in a United States
business by a foreign person in which a foreign government
owns, directly or indirectly, at least a 25 percent voting
interest.
``(bb) Other declarations required by committee.--The
Committee shall require the submission of a declaration
described in subclause (I) with respect to any covered
transaction identified under regulations prescribed by the
Committee for purposes of this item, at the discretion of the
Committee and based on appropriate factors, such as--
``(AA) the technology, industry, economic sector, or
economic subsector in which the United States business that
is a party to the transaction trades or of which it is a
part;
``(BB) the difficulty of remedying the harm to national
security that may result from completion of the transaction;
and
``(CC) the difficulty of obtaining information on the type
of covered transaction through other means.
``(cc) Submission of written notice as an alternative.--
Parties to a covered transaction for which a declaration is
required under this subclause may instead elect to submit a
written notice under clause (i).
``(dd) Timing of submission.--
``(AA) In general.--A declaration required to be submitted
with respect to a covered transaction by item (aa) or (bb)
shall be submitted not later than 45 days before the
completion of the transaction.
``(BB) Written notice.--If, pursuant to item (cc), the
parties to a covered transaction elect to submit a written
notice under clause (i) instead of a declaration under this
subclause, the written notice shall be filed not later than
90 days before the completion of the transaction.
``(III) Penalties.--The Committee may impose a penalty
pursuant to subsection (h)(3) with respect to a party that
fails to comply with this clause.
``(IV) Committee response to declaration.--
``(aa) In general.--Upon receiving a declaration under this
clause with respect to a transaction, the Committee may, at
its discretion--
``(AA) request that the parties to the transaction file a
written notice under clause (i);
``(BB) inform the parties to the transaction that the
Committee is not able to complete action under this section
with respect to the transaction on the basis of the
declaration and that the parties may file a written notice
under clause (i) to seek written notification from the
Committee that the Committee has completed all action under
this section with respect to the transaction;
``(CC) initiate a unilateral review of the transaction
under subparagraph (D); or
``(DD) notify the parties in writing that the Committee has
completed all action under this section with respect to the
transaction.
``(bb) Timing.--The Committee shall endeavor to take action
under item (aa) within 30 days of receiving a declaration
under this clause.
``(cc) Rule of construction.--Nothing in this subclause
(other than item (aa)(CC)) shall be construed to affect the
authority of the President or the Committee to take any
action authorized by this section with respect to a covered
transaction.
``(V) Regulations.--The Committee shall prescribe
regulations establishing requirements for declarations
submitted under this clause. In prescribing such regulations,
the Committee shall ensure that such declarations are
submitted as abbreviated notifications that would not
generally exceed 5 pages in length.''.
SEC. 6. STIPULATIONS REGARDING TRANSACTIONS.
Section 721(b)(1)(C) of the Defense Production Act of 1950
(50 U.S.C. 4565(b)(1)(C)), as amended by section 5, is
further amended by adding at the end the following:
``(vi) Stipulations regarding transactions.--
``(I) In general.--In a written notice submitted under
clause (i) or a declaration submitted under clause (v) with
respect to a transaction, a party to the transaction may--
``(aa) stipulate that the transaction is a covered
transaction; and
``(bb) if the party stipulates that the transaction is a
covered transaction under item (aa), stipulate that the
transaction is a foreign government-controlled transaction.
``(II) Basis for stipulation.--A written notice submitted
under clause (i) or a declaration submitted under clause (v)
that includes a stipulation under subclause (I) shall include
a description of the basis for the stipulation.''.
SEC. 7. AUTHORITY FOR UNILATERAL INITIATION OF REVIEWS.
Section 721(b)(1) of the Defense Production Act of 1950 (50
U.S.C. 4565(b)(1)) is amended--
(1) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively;
(2) in subparagraph (D)--
(A) in clause (i), by inserting ``(other than a covered
transaction described in subparagraph (E))'' after ``any
covered transaction'';
(B) by striking clause (ii) and inserting the following:
``(ii) any covered transaction described in subparagraph
(E), if any party to the transaction submitted false or
misleading material information to the Committee in
connection with the Committee's consideration of the
transaction or omitted material information, including
material documents, from information submitted to the
Committee; or''; and
(C) in clause (iii)--
(i) in the matter preceding subclause (I), by striking
``any covered transaction that has previously been reviewed
or investigated under this section,'' and inserting ``any
covered transaction described in subparagraph (E),'';
(ii) in subclause (I), by striking ``intentionally'';
(iii) in subclause (II), by striking ``an intentional'' and
inserting ``a''; and
(iv) in subclause (III), by inserting ``adequate and
appropriate'' before ``remedies or enforcement tools''; and
(3) by inserting after subparagraph (D) the following:
``(E) Covered transactions described.--A covered
transaction is described in this subparagraph if--
``(i) the Committee has informed the parties to the
transaction in writing that the Committee has completed all
action under this section with respect to the transaction; or
``(ii) the President has announced a decision not to
exercise the President's authority under subsection (d) with
respect to the transaction.''.
SEC. 8. TIMING FOR REVIEWS AND INVESTIGATIONS.
Section 721(b) of the Defense Production Act of 1950 (50
U.S.C. 4565(b)), as amended by section 7, is further
amended--
(1) in paragraph (1)(F), by striking ``30'' and inserting
``45'';
(2) in paragraph (2), by striking subparagraph (C) and
inserting the following:
``(C) Timing.--
``(i) In general.--Except as provided in clause (ii), any
investigation under subparagraph (A) shall be completed
before the end of the 45-day period beginning on the date on
which the investigation commenced.
``(ii) Extension for extraordinary circumstances.--
``(I) In general.--In extraordinary circumstances (as
defined by the Committee in regulations), the chairperson
may, at the request of the head of the lead agency, extend an
investigation under subparagraph (A) for one 30-day period.
``(II) Nondelegation.--The authority of the chairperson and
the head of the lead agency referred to in subclause (I) may
not be delegated to any person other than the Deputy
Secretary of the Treasury or the deputy head (or equivalent
thereof) of the lead agency, as the case may be.
``(III) Notification to parties.--If the Committee extends
the deadline under subclause (I) with respect to a covered
transaction, the Committee shall notify the parties to the
transaction of the extension.''; and
(3) by adding at the end the following:
``(8) Tolling of deadlines during lapse in
appropriations.--Any deadline or time limitation under this
subsection shall be tolled during a lapse in
appropriations.''.
SEC. 9. MONITORING OF NON-NOTIFIED AND NON-DECLARED
TRANSACTIONS.
Section 721(b)(1) of the Defense Production Act of 1950 (50
U.S.C. 4565(b)(1)), as amended by section 7, is further
amended by adding at the end the following:
``(H) Monitoring of non-notified and non-declared
transactions.--The Committee shall establish a mechanism to
identify covered transactions for which--
``(i) a notice under clause (i) of subparagraph (C) or a
declaration under clause (v) of that subparagraph is not
submitted to the Committee; and
``(ii) information is reasonably available.''.
SEC. 10. SUBMISSION OF CERTIFICATIONS TO CONGRESS.
Section 721(b)(3)(C) of the Defense Production Act of 1950
(50 U.S.C. 4565(b)(3)(C)) is amended--
(1) in clause (iii)--
(A) in subclause (II), by inserting ``and the Select
Committee on Intelligence'' after ``Urban Affairs''; and
(B) in subclause (IV), by inserting ``and the Permanent
Select Committee on Intelligence'' after ``Financial
Services'';
(2) in clause (iv), by striking subclause (II) and
inserting the following:
``(II) Delegation of certifications.--
``(aa) In general.--Subject to item (bb), the chairperson,
in consultation with the Committee, may determine the level
of official to whom the signature requirement under subclause
(I) for the chairperson and the head of the lead agency may
be delegated. The level of official to whom the signature
requirement may be delegated may differ based on any factor
relating to a transaction that the chairperson, in
consultation with the Committee, deems appropriate, including
the type or value of the transaction.
[[Page S7114]]
``(bb) Limitations.--The signature requirement under
subclause (I) may be delegated--
``(AA) in the case of a covered transaction assessed by the
Director of National Intelligence under paragraph (4) as more
likely than not to threaten the national security of the
United States, not below the level of the Assistant Secretary
of the Treasury or an equivalent official of another agency
or department represented on the Committee; and
``(BB) in the case of any other covered transaction, not
below the level of a Deputy Assistant Secretary of the
Treasury or an equivalent official of another agency or
department represented on the Committee.''; and
(3) by adding at the following:
``(v) Authority to consolidate documents.--Instead of
transmitting a separate certified notice or certified report
under subparagraph (A) or (B) with respect to each covered
transaction, the Committee may, on a monthly basis, transmit
such notices and reports in a consolidated document to the
Members of Congress specified in clause (iii).''.
SEC. 11. ANALYSIS BY DIRECTOR OF NATIONAL INTELLIGENCE.
Section 721(b)(4) of the Defense Production Act of 1950 (50
U.S.C. 4565(b)(4)) is amended--
(1) by striking subparagraph (A) and inserting the
following:
``(A) Analysis required.--
``(i) 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 posed by
any covered transaction, which shall include the
identification of any recognized gaps in the collection of
intelligence relevant to the analysis.
``(ii) Views of intelligence agencies.--The Director shall
seek and incorporate into the analysis required by clause (i)
the views of all affected or appropriate intelligence
agencies with respect to the transaction.
``(iii) Updates.--At the request of the lead agency, the
Director shall update the analysis conducted under clause (i)
with respect to a covered transaction with respect to which
an agreement was entered into under subsection (l)(3)(A).
``(iv) Independence and objectivity.--The Committee shall
ensure that its processes under this section preserve the
ability of the Director to conduct analysis under clause (i)
that is independent, objective, and consistent with all
applicable directives, policies, and analytic tradecraft
standards of the intelligence community.'';
(2) by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (D), and (E), respectively;
(3) by inserting after subparagraph (A) the following:
``(B) Basic threat information.--
``(i) In general.--The Director of National Intelligence
may provide the Committee with basic information regarding
any threat to the national security of the United States
posed by a covered transaction described in clause (ii)
instead of conducting the analysis required by subparagraph
(A).
``(ii) Covered transaction described.--A covered
transaction is described in this clause if--
``(I) the transaction is described in subsection
(a)(5)(B)(ii);
``(II) the Director of National Intelligence has completed
an analysis pursuant to subparagraph (A) involving each
foreign person that is a party to the transaction during the
12 months preceding the review or investigation of the
transaction under this section; or
``(III) the transaction otherwise meets criteria agreed
upon by the Committee and the Director of National
Intelligence for purposes of this subparagraph.'';
(4) in subparagraph (C), as redesignated by paragraph (2),
by striking ``20'' and inserting ``30''; and
(5) by adding at the end the following:
``(F) Assessment of operational impact.--The Director may
provide to the Committee an assessment, separate from the
analyses under subparagraphs (A) and (B), of any operational
impact of a covered transaction on the intelligence community
and a description of any actions that have been or will be
taken to mitigate any such impact.
``(G) Submission to congress.--The Committee shall submit
the analysis required by subparagraph (A) with respect to a
covered transaction to the Select Committee on Intelligence
of the Senate and the Permanent Select Committee on
Intelligence of the House of Representatives upon the
conclusion of action under this section (other than
compliance reviews under subsection (l)(6)) with respect to
the transaction.''.
SEC. 12. INFORMATION SHARING.
Section 721(c) of the Defense Production Act of 1950 (50
U.S.C. 4565(c)) is amended--
(1) by striking ``Any information'' and inserting the
following:
``(1) In general.--Except as provided in paragraph (2), any
information'';
(2) by striking ``, except as may be relevant'' and all
that follows and inserting a period; and
(3) by adding at the end the following:
``(2) Exceptions.--Paragraph (1) shall not prohibit the
disclosure of the following:
``(A) Information relevant to any administrative or
judicial action or proceeding.
``(B) Information to either House of Congress or to any
duly authorized committee or subcommittee of Congress.
``(C) Information to any domestic or foreign governmental
entity, under the direction of the chairperson, to the extent
necessary for national security purposes and pursuant to
appropriate confidentiality and classification arrangements.
``(D) Information that the parties have consented to be
disclosed to third parties.''.
SEC. 13. ACTION BY THE PRESIDENT.
(a) In General.--Section 721(d) of the Defense Production
Act of 1950 (50 U.S.C. 4565(d)) is amended--
(1) by striking paragraph (1) and inserting the following:
``(1) In general.--Subject to paragraph (4), the President
may, with respect to a covered transaction that threatens to
impair the national security of the United States--
``(A) take such action for such time as the President
considers appropriate to suspend or prohibit the transaction
or to require divestment; and
``(B) in conjunction with taking any such action, take any
additional action the President considers appropriate to
address the risk to the national security of the United
States identified during the review and investigation of the
transaction under this section.''; and
(2) in paragraph (2), by striking ``not later than 15
days'' and all that follows and inserting the following:
``with respect to a covered transaction not later than 15
days after the earlier of--
``(A) the date on which the investigation of the
transaction under subsection (b) is completed; or
``(B) the date on which the Committee otherwise refers the
transaction to the President under subsection (l)(2).''.
(b) Civil Penalties.--Section 721(h)(3)(A) of the Defense
Production Act of 1950 (50 U.S.C. 4565(h)(3)(A)) is amended
by striking ``including any mitigation'' and all that follows
through ``subsection (l)'' and inserting ``including any
mitigation agreement entered into, conditions imposed, or
order issued pursuant to this section''.
SEC. 14. JUDICIAL REVIEW PROCEDURES.
Section 721(e) of the Defense Production Act of 1950 (50
U.S.C. 4565) is amended to read as follows:
``(e) Actions and Findings Nonreviewable.--
``(1) Actions and findings of the president.--The actions
and findings of the President or the President's designee
under this section shall not be subject to judicial review,
including claims under chapter 7 of title 5, United States
Code.
``(2) Actions and findings of the committee.--
``(A) In general.--Except as provided in subparagraph (B),
the actions and findings of the Committee under subsection
(b) or (l), and any assessment of penalties or use of
enforcement authorities under this section, shall not be
subject to judicial review, including claims under chapter 7
of title 5, United States Code.
``(B) Petitions.--
``(i) Definition.--In this subparagraph, the term
`classified information' means any information or material
that has been determined by the United States Government
pursuant to an Executive order, statute, or regulation to
require protection against unauthorized disclosure for
reasons of national security and any restricted data, as
defined in section 11 of the Atomic Energy Act of 1954 (42
U.S.C. 2014).
``(ii) Petition.--
``(I) In general.--Except as provided in subclause (II),
not later than 60 days after the date on which the President
or the Committee takes an action with respect to the covered
transaction, any party to the covered transaction may file a
petition under this subparagraph alleging that the action of
the Committee is a violation of a constitutional right,
power, privilege, or immunity.
``(II) Notification.--No party to a covered transaction
shall be permitted to file a petition or any claim related to
a petition under subclause (I) unless--
``(aa) the party initiated the review of the transaction
pursuant to a written notice filed under clause (i) of
subsection (b)(1)(C) or a declaration filed under clause (v)
of that subsection or the Committee determines that such a
notice or declaration was not required; and
``(bb) the Committee has completed all action under this
section with respect to the transaction.
``(III) Related claims.--Any claims related to a petition
filed under this clause shall be filed before the date
described in subclause (I).
``(iii) Exclusive jurisdiction.--
``(I) In general.--The United States Court of Appeals for
the District of Columbia Circuit shall have exclusive
jurisdiction over claims arising under this subparagraph,
subject to review by the Supreme Court of the United States
under section 1254 of title 28, United States Code, only--
``(aa) to affirm the action of the Committee; or
``(bb) to remand the case to the Committee for further
consideration.
``(II) Standard of review.--The court shall uphold an
action challenged under this subparagraph unless the court
finds that the action was contrary to a constitutional right,
power, privilege, or immunity.
``(iv) Scope of review.--In a claim under this
subparagraph, the court shall decide all relevant questions
based solely on any administrative record submitted by the
United States under clause (v).
``(v) Administrative record and procedures.--
[[Page S7115]]
``(I) In general.--Notwithstanding any other provision of
law, the procedures described in this clause shall apply to
the review of a petition under this subparagraph.
``(II) Administrative record.--
``(aa) Filing of record.--The United States shall file with
the court an administrative record, which shall consist of
the information that the parties submitted to the Committee
and that the Committee relied upon in support of the action
of the Committee under review.
``(bb) Unclassified, nonprivileged information.--All
unclassified information contained in the administrative
record that is not otherwise privileged or subject to
statutory protections shall be provided to the petitioner
with appropriate protections for any privileged or
confidential trade secrets and commercial or financial
information.
``(cc) Discovery bar.--Other than the provision of
information in the administrative record described in
subparagraph (II)(bb), no discovery shall be permitted.
``(dd) In camera and ex parte.--The following information
may be included in the administrative record and shall be
submitted only to the court ex parte and in camera:
``(AA) Unclassified information subject to privilege or
statutory protections.
``(BB) Classified information.
``(CC) Sensitive security information.
``(DD) Sensitive law enforcement information.
``(EE) Information obtained or derived from any activity
authorized under the Foreign Intelligence Surveillance Act of
1978 (50 U.S.C. 1801 et seq.), except that, with respect to
such information, subsections (c), (e), (f), (g), and (h) of
section 106 (50 U.S.C. 1806), subsections (d), (f), (g), (h),
and (i) of section 305 (50 U.S.C. 1825), subsections (c),
(e), (f), (g), and (h) of section 405 (50 U.S.C. 1845), and
section 706 (50 U.S.C. 1881e) of that Act shall not apply.
``(ee) Under seal.--Any classified information, sensitive
security information, law enforcement sensitive information,
or information that is otherwise privileged or subject to
statutory protections, that is part of the administrative
record filed ex parte and in camera, or cited by the court in
any decision, shall be treated by the court consistent with
the provisions of this subparagraph, and shall remain under
seal and preserved in the records of the court to be made
available in the event of further proceedings. In no event
shall such information be released to the claimant or as part
of the public record.
``(ff) Return.--After the expiration of the time to seek
further review, or the conclusion of further proceedings, the
court shall return the administrative record, including any
and all copies, to the United States.
``(gg) Consideration of claim without information in
administrative record.--If, on motion or sua sponte, the
court determines that the claim may be considered without any
of the information in the administrative record, the court
shall require that only the necessary information, if any,
from the record be provided to the parties.
``(vi) Exclusive remedy.--A determination by the court
under this subparagraph shall be the exclusive judicial
remedy for any claim described in this subparagraph against
the United States, any United States department or agency, or
any component or official of any such department or agency.
``(vii) Rule of construction.--Nothing in this subparagraph
shall be construed as limiting, superseding, or preventing
the invocation of, any privileges or defenses that are
otherwise available at law or in equity to protect against
the disclosure of information.''.
SEC. 15. FACTORS TO BE CONSIDERED.
Section 721(f) of the Defense Production Act of 1950 (50
U.S.C. 4565(f)) is amended--
(1) in paragraph (1), by inserting ``including whether the
covered transaction is likely to result in the increased
reliance by the United States on foreign suppliers to meet
national defense requirements;'' after ``defense
requirements,'';
(2) in paragraph (4), by striking ``proposed or pending'';
(3) by striking paragraph (5) and insert the following:
``(5) the potential effects of the covered transaction on
United States international technological and industrial
leadership in areas affecting United States national
security, including whether the transaction is likely to
reduce the technological and industrial advantage of the
United States relative to any country of special concern;'';
(4) in paragraph (6), by inserting ``and transportation
assets, as defined in Presidential Policy Directive 21
(February 12, 2013; relating to critical infrastructure
security and resilience) or any successor directive'' after
``energy assets'';
(5) in paragraph (7), by inserting ``, including whether
the covered transaction is likely to contribute to the loss
of or other adverse effects on technologies that provide a
strategic national security advantage to the United States''
after ``critical technologies'';
(6) in paragraph (10), by striking ``; and'' and inserting
a semicolon;
(7) by redesignating paragraph (11) as paragraph (20); and
(8) by inserting after paragraph (10) the following:
``(11) the degree to which the covered transaction is
likely to increase the cost to the United States Government
of acquiring or maintaining the equipment and systems that
are necessary for defense, intelligence, or other national
security functions;
``(12) the potential national security-related effects of
the cumulative market share of any one type of
infrastructure, energy asset, critical material, or critical
technology by foreign persons;
``(13) whether any foreign person that would acquire an
interest in a United States business or its assets as a
result of the covered transaction has a history of--
``(A) complying with United States laws and regulations,
including laws and regulations pertaining to exports, the
protection of intellectual property, and immigration; and
``(B) adhering to contracts or other agreements with
entities of the United States Government;
``(14) the extent to which the covered transaction is
likely to expose, either directly or indirectly, personally
identifiable information, genetic information, or other
sensitive data of United States citizens to access by a
foreign government or foreign person that may exploit that
information in a manner that threatens national security;
``(15) whether the covered transaction is likely to have
the effect of creating any new cybersecurity vulnerabilities
in the United States or exacerbating existing cybersecurity
vulnerabilities;
``(16) whether the covered transaction is likely to result
in a foreign government gaining a significant new capability
to engage in malicious cyber-enabled activities against the
United States, including such activities designed to affect
the outcome of any election for Federal office;
``(17) whether the covered transaction involves a country
of special concern that has a demonstrated or declared
strategic goal of acquiring a type of critical technology
that a United States business that is a party to the
transaction possesses;
``(18) whether the covered transaction is likely to
facilitate criminal or fraudulent activity affecting the
national security of the United States;
``(19) whether the covered transaction is likely to expose
any information regarding sensitive national security matters
or sensitive procedures or operations of a Federal law
enforcement agency with national security responsibilities to
a foreign person not authorized to receive that information;
and''.
SEC. 16. ACTIONS BY THE COMMITTEE TO ADDRESS NATIONAL
SECURITY RISKS.
Section 721(l) of the Defense Production Act of 1950 (50
U.S.C. 4565(l)) is amended--
(1) in the subsection heading, by striking ``Mitigation,
Tracking, and Postconsummation Monitoring and Enforcement''
and inserting ``Actions by the Committee to Address National
Security Risks'';
(2) by redesignating paragraphs (1), (2), and (3) as
paragraphs (3), (5), and (6), respectively;
(3) by inserting before paragraph (3), as redesignated by
paragraph (2), the following:
``(1) Suspension of transactions.--The Committee, acting
through the chairperson, may suspend a proposed or pending
covered transaction that may pose a risk to the national
security of the United States for such time as the covered
transaction is under review or investigation under subsection
(b).
``(2) Referral to president.--The Committee may, at any
time during the review or investigation of a covered
transaction under subsection (b), complete the action of the
Committee with respect to the transaction and refer the
transaction to the President for action pursuant to
subsection (d).'';
(4) in paragraph (3), as redesignated by paragraph (2)--
(A) in subparagraph (A)--
(i) in the subparagraph heading, by striking ``In general''
and inserting ``Agreements and conditions'';
(ii) by striking ``The Committee'' and inserting the
following:
``(i) In general.--The Committee'';
(iii) by striking ``threat'' and inserting ``risk''; and
(iv) by adding at the end the following:
``(ii) Abandonment of transactions.--If a party to a
covered transaction has voluntarily chosen to abandon the
transaction, the Committee or lead agency, as the case may
be, may negotiate, enter into or impose, and enforce any
agreement or condition with any party to the covered
transaction for purposes of effectuating such abandonment and
mitigating any risk to the national security of the United
States that arises as a result of the covered transaction.
``(iii) Agreements and conditions relating to completed
transactions.--The Committee or lead agency, as the case may
be, may negotiate, enter into or impose, and enforce any
agreement or condition with any party to a completed covered
transaction in order to mitigate any interim risk to the
national security of the United States that may arise as a
result of the covered transaction until such time that the
Committee has completed action pursuant to subsection (b) or
the President has taken action pursuant to subsection (d)
with respect to the transaction.''; and
(B) by striking subparagraph (B) and inserting the
following:
``(B) Limitations.--An agreement may not be entered into or
condition imposed under subparagraph (A) with respect to a
covered transaction unless the Committee determines that the
agreement or condition resolves the national security
concerns posed
[[Page S7116]]
by the transaction, taking into consideration whether the
agreement or condition is reasonably calculated to--
``(i) be effective;
``(ii) allow for compliance with the terms of the agreement
or condition in an appropriately verifiable way; and
``(iii) enable effective monitoring of compliance with and
enforcement of the terms of the agreement or condition.
``(C) Jurisdiction.--The provisions of section 706(b) shall
apply to any mitigation agreement entered into or condition
imposed under subparagraph (A).'';
(5) by inserting after paragraph (3), as redesignated by
paragraph (2), the following:
``(4) Risk-based analysis required.--
``(A) In general.--Any determination of the Committee to
suspend a covered transaction under paragraph (1), to refer a
covered transaction to the President under paragraph (2), or
to negotiate, enter into or impose, or enforce any agreement
or condition under paragraph (3)(A) with respect to a covered
transaction, shall be based on a risk-based analysis,
conducted by the Committee, of the effects on the national
security of the United States of the covered transaction,
which shall include--
``(i) an assessment of--
``(I) the national security threat posed by the
transaction, taking into account the analysis conducted by
the Director of National Intelligence under subsection
(b)(4);
``(II) any national security vulnerabilities related to the
transaction; and
``(III) the potential national security consequences of the
transaction; and
``(ii) an identification of any of the factors described in
subsection (f) that the transaction may substantially
implicate.
``(B) Actions of members of the committee.--
``(i) In general.--Any member of the Committee who
concludes that a covered transaction poses an unresolved
national security concern shall recommend to the Committee
that the Committee suspend the transaction under paragraph
(1), refer the transaction to the President under paragraph
(2), or negotiate, enter into or impose, or enforce any
agreement or condition under paragraph (3)(A) with respect to
the transaction. In making that recommendation, the member
shall propose the risk-based analysis required by
subparagraph (A).
``(ii) Failure to reach consensus.--If the Committee fails
to reach consensus with respect to a recommendation under
clause (i) regarding a covered transaction, the members of
the Committee who support an alternative recommendation shall
produce--
``(I) a written statement justifying the alternative
recommendation; and
``(II) as appropriate, a risk-based analysis that supports
the alternative recommendation.'';
(6) in paragraph (5), as redesignated by paragraph (2), by
striking ``(as defined in the National Security Act of
1947)''; and
(7) in paragraph (6), as redesignated by paragraph (2)--
(A) in subparagraph (A)--
(i) by striking ``paragraph (1)'' and inserting ``paragraph
(3)''; and
(ii) by striking the second sentence and inserting the
following: ``The lead agency may, at its discretion, seek and
receive the assistance of other departments or agencies in
carrying out the purposes of this paragraph.'';
(B) in subparagraph (B)--
(i) by striking ``designated agency'' and all that follows
through ``The lead agency in connection'' and inserting
``designated agency.--The lead agency in connection'';
(ii) by striking clause (ii); and
(iii) by redesignating subclauses (I) and (II) as clauses
(i) and (ii), respectively, and by moving such clauses, as so
redesignated, 2 ems to the left; and
(C) by adding at the end the following:
``(C) Compliance plans.--
``(i) In general.--In the case of a covered transaction
with respect to which an agreement is entered into under
paragraph (3)(A), the Committee or lead agency, as the case
may be, shall formulate, adhere to, and keep updated a plan
for monitoring compliance with the agreement.
``(ii) Elements.--Each plan required by clause (i) with
respect to an agreement entered into under paragraph (3)(A)
shall include an explanation of--
``(I) which member of the Committee will have primary
responsibility for monitoring compliance with the agreement;
``(II) how compliance with the agreement will be monitored;
``(III) how frequently compliance reviews will be
conducted;
``(IV) whether an independent entity will be utilized under
subparagraph (E) to conduct compliance reviews; and
``(V) what actions will be taken if the parties fail to
cooperate regarding monitoring compliance with the agreement.
``(D) Effect of lack of compliance.--If, at any time after
a mitigation agreement or condition is entered into or
imposed under paragraph (3)(A), the Committee or lead agency,
as the case may be, determines that a party or parties to the
agreement or condition are not in compliance with the terms
of the agreement or condition, the Committee or lead agency
may, in addition to the authority of the Committee to impose
penalties pursuant to subsection (h)(3) and to unilaterally
initiate a review of any covered transaction under subsection
(b)(1)(D)(iii)(I)--
``(i) negotiate a plan of action for the party or parties
to remediate the lack of compliance, with failure to abide by
the plan or otherwise remediate the lack of compliance
serving as the basis for the Committee to find a material
breach of the agreement or condition;
``(ii) require that the party or parties submit any covered
transaction initiated after the date of the determination of
noncompliance and before the date that is 5 years after the
date of the determination to the Committee for review under
subsection (b); or
``(iii) seek injunctive relief.
``(E) Use of independent entities to monitor compliance.--
If the parties to an agreement entered into under paragraph
(3)(A) enter into a contract with an independent entity from
outside the United States Government for the purpose of
monitoring compliance with the agreement, the Committee shall
take such action as is necessary to prevent a conflict of
interest from arising by ensuring that the independent entity
owes no fiduciary duty to the parties.
``(F) Additional compliance measures.--Subject to
subparagraphs (A) through (E), the Committee shall develop
and agree upon methods for evaluating compliance with any
agreement entered into or condition imposed with respect to a
covered transaction that will allow the Committee to
adequately ensure compliance without unnecessarily diverting
Committee resources from assessing any new covered
transaction for which a written notice under clause (i) of
subsection (b)(1)(C) or declaration under clause (v) of that
subsection has been filed, and if necessary, reaching a
mitigation agreement with or imposing a condition on a party
to such covered transaction or any covered transaction for
which a review has been reopened for any reason.''.
SEC. 17. MODIFICATION OF ANNUAL REPORT.
Section 721(m) of the Defense Production Act of 1950 (50
U.S.C. 4565(m)) is amended--
(1) in paragraph (1), by striking ``committee'' and all
that follows through ``Representatives,'' and inserting
``appropriate congressional committees'';
(2) in paragraph (2)--
(A) by amending subparagraph (A) to read as follows:
``(A) A list of all notices filed and all reviews or
investigations of covered transactions completed during the
period, with--
``(i) a description of the outcome of each review or
investigation, including whether an agreement was entered
into or condition was imposed under subsection (l)(3)(A) with
respect to the transaction being reviewed or investigated,
and whether the President took any action under this section
with respect to that transaction;
``(ii) basic information on each party to each such
transaction;
``(iii) the nature of the business activities or products
of the United States business with which the transaction was
entered into or intended to be entered into; and
``(iv) information about any withdrawal from the
process.'';
(B) by adding at the end the following:
``(G) Statistics on compliance reviews conducted and
actions taken by the Committee under subsection (l)(6),
including subparagraph (D) of that subsection, during that
period and a description of any actions taken by the
Committee to impose penalties or initiate a unilateral review
pursuant to subsection (b)(1)(D)(iii)(I).'';
(3) in paragraph (3)--
(A) by striking ``critical technologies'' and all that
follows through ``In order to assist'' and inserting
``critical technologies.--In order to assist'';
(B) by striking subparagraph (B); and
(C) by redesignating clauses (i) and (ii) as subparagraphs
(A) and (B), respectively, and by moving such subparagraphs,
as so redesignated, 2 ems to the left; and
(4) by adding at the end the following:
``(4) Biennial intelligence community report.--
``(A) In general.--The Director of National Intelligence
shall transmit to the chairperson, for inclusion in a
classified portion of each report required to be submitted
under paragraph (1) during calendar year 2018 and every even-
numbered year thereafter, the report of the interagency group
established under subparagraph (C).
``(B) Elements.--The report referred to in subparagraph (A)
shall include an identification, analysis, and explanation of
the following:
``(i) Any current or projected major threats to the
national security of the United States with respect to
foreign investment.
``(ii) Any strategies used by countries of special concern
to utilize foreign investment to target the acquisition of
critical technologies, critical materials, or critical
infrastructure.
``(iii) Any economic espionage efforts directed at the
United States by a foreign country, particularly a country of
special concern.
``(C) Intelligence community interagency working group.--
The Director of National Intelligence--
``(i) shall establish an interagency working group,
composed of representatives of elements of the intelligence
community, to prepare the report required under this
paragraph;
``(ii) shall serve as the chairperson of the interagency
working group; and
``(iii) may consult with and seek input from any member of
the Committee, as the Director considers necessary.
``(5) Classification; availability of report.--
[[Page S7117]]
``(A) Classification.--All appropriate portions of the
annual report required by paragraph (1) may be classified.
``(B) Public availability of unclassified version.--An
unclassified version of the report required by paragraph (1),
as appropriate and consistent with safeguarding national
security and privacy, shall be made available to the public.
Information regarding trade secrets or business confidential
information may be included in the classified version and may
not be made available to the public in the unclassified
version.
``(C) Exceptions to freedom of information act.--The
exceptions to subsection (a) of section 552 of title 5,
United States Code, provided for under subsection (b) of that
section shall apply with respect to the report required by
paragraph (1).
``(6) Appropriate congressional committees defined.--In
this subsection, the term `appropriate congressional
committees' means--
``(A) the Committee on Banking, Housing, and Urban Affairs,
the Select Committee on Intelligence, the Committee on Armed
Services, the Committee on the Judiciary, and the Committee
on Homeland Security and Governmental Affairs of the Senate;
and
``(B) the Committee on Financial Services, the Permanent
Select Committee on Intelligence, the Committee on Armed
Services, the Committee on the Judiciary, and the Committee
on Homeland Security of the House of Representatives.''.
SEC. 18. CERTIFICATION OF NOTICES AND INFORMATION.
Section 721(n) of the Defense Production Act of 1950 (50
U.S.C. 4565(n)) is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and by moving such
subparagraphs, as so redesignated, 2 ems to the right;
(2) by striking ``Each notice'' and inserting the
following:
``(1) In general.--Each notice''; and
(3) by adding at the end the following:
``(2) Effect of failure to submit.--The Committee may not
complete a review under this section of a covered transaction
and may recommend to the President that the President suspend
or prohibit the transaction or require divestment under
subsection (d) if the Committee determines that a party to
the transaction has--
``(A) failed to submit a statement required by paragraph
(1); or
``(B) included false or misleading information in a notice
or information described in paragraph (1) or omitted material
information from such notice or information.
``(3) Applicability of law on fraud and false statements.--
The Committee shall prescribe regulations expressly providing
for the application of section 1001 of title 18, United
States Code, to all information provided to the Committee
under this section by any party to a covered transaction.''.
SEC. 19. FUNDING.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. 4565) is amended by adding at the end the following:
``(o) Funding.--
``(1) Establishment of fund.--There is established in the
Treasury of the United States a fund, to be known as the
`Committee on Foreign Investment in the United States Fund'
(in this subsection referred to as the `Fund').
``(2) Appropriation of funds for the committee.--There are
authorized to be appropriated to the Fund such sums as may be
necessary to perform the functions of the Committee.
``(3) Filing fees.--
``(A) In general.--The Committee may assess and collect a
fee in an amount determined by the Committee in regulations,
to the extent provided in advance in appropriations Acts,
without regard to section 9701 of title 31, United States
Code, and subject to subparagraph (B), with respect to each
covered transaction for which a written notice is submitted
to the Committee under subsection (b)(1)(C)(i).
``(B) Limitation on amount of fee.--The amount of the fee
determined under subparagraph (A) with respect to a covered
transaction described in that subparagraph may not exceed an
amount equal to the lesser of--
``(i) 1 percent of the value of the transaction; or
``(ii) $300,000, adjusted annually for inflation pursuant
to regulations prescribed by the Committee.
``(C) Deposit and availability of fees.--Notwithstanding
section 3302 of title 31, United States Code, fees collected
under subparagraph (A) shall--
``(i) be deposited as offsetting collections into the Fund
for use in carrying out activities under this section;
``(ii) to the extent and in the amounts provided in advance
in appropriations Acts, be available to the chairperson;
``(iii) remain available until expended; and
``(iv) be in addition to any appropriations made available
to the members of the Committee.
``(4) Transfer of funds.--The chairperson may transfer any
amounts in the Fund to any other department or agency
represented on the Committee for the purpose of addressing
emerging needs in carrying out activities under this section.
Amounts so transferred shall be in addition to any other
amounts available to that department or agency for that
purpose.''.
SEC. 20. CENTRALIZATION OF CERTAIN COMMITTEE FUNCTIONS.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. 4565), as amended by section 19, is further amended by
adding at the end the following:
``(p) Centralization of Certain Committee Functions.--
``(1) In general.--The chairperson, in consultation with
the Committee, may centralize certain functions of the
Committee within the Department of the Treasury for the
purpose of enhancing interagency coordination and
collaboration in carrying out the functions of the Committee
under this section.
``(2) Functions.--Functions that may be centralized under
paragraph (1) include monitoring non-notified and non-
declared transactions pursuant to subsection (b)(1)(H), and
other functions as determined by the chairperson and the
Committee.
``(3) Rule of construction.--Nothing in this section shall
be construed as limiting the authority of any department or
agency represented on the Committee to represent its own
interests before the Committee.''.
SEC. 21. UNIFIED BUDGET REQUEST.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. 4565), as amended by sections 19 and 20, is further
amended by adding at the end the following:
``(q) Unified Budget Request.--
``(1) In general.--The President may include, in the budget
of the Department of the Treasury for a fiscal year (as
submitted to Congress with the budget of the President under
section 1105(a) of title 31, United States Code), a unified
request for funding of all operations under this section
conducted by some or all of the departments and agencies
represented on the Committee.
``(2) Form of budget request.--A unified request under
paragraph (1) should be detailed and include the amounts
requested for each department or agency represented on the
Committee to carry out the functions of that department or
agency under this section.''.
SEC. 22. SPECIAL HIRING AUTHORITY.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. 4565), as amended by sections 19, 20, and 21, is
further amended by adding at the end the following:
``(r) Special Hiring Authority.--The heads of the
departments and agencies represented on the Committee may
appoint, without regard to the provisions of sections 3309
through 3318 of title 5, United States Code, candidates
directly to positions in the competitive service (as defined
in section 2102 of that title) in their respective
departments and agencies to administer this section.''.
SEC. 23. CONFORMING AMENDMENTS.
Section 721 of the Defense Production Act of 1950 (50
U.S.C. 4565), as amended by this Act, is further amended--
(1) in subsection (b)(2)(B)(i)(I), by striking ``that
threat'' and inserting ``the risk''; and
(2) in subsection (d)(4)(A), by striking ``the foreign
interest exercising control'' and inserting ``a foreign
person that would acquire an interest in a United States
business or its assets as a result of the covered
transaction''.
SEC. 24. ASSESSMENT OF NEED FOR ADDITIONAL RESOURCES FOR
COMMITTEE.
The President shall--
(1) determine whether and to what extent the expansion of
the responsibilities of the Committee on Foreign Investment
in the United States pursuant to the amendments made by this
Act necessitates additional resources for the Committee and
members of the Committee to perform their functions under
section 721 of the Defense Production Act of 1950, as amended
by this Act; and
(2) if the President determines that additional resources
are necessary, include in the budget of the President for
fiscal year 2019 submitted to Congress under section 1105(a)
of title 31, United States Code, a request for such
additional resources.
SEC. 25. AUTHORIZATION FOR DEFENSE ADVANCED RESEARCH PROJECTS
AGENCY TO LIMIT FOREIGN ACCESS TO TECHNOLOGY
THROUGH CONTRACTS AND GRANT AGREEMENTS.
(a) In General.--The Director of the Defense Advanced
Research Projects Agency, or a designee of the Director, may
include in any contract or grant agreement that the Director
enters into with a person, and that is funded by that Agency,
a provision that--
(1) limits access by any foreign person to technology that
is the subject of the contract or grant agreement under terms
defined by the Director, including by limiting such access to
specific periods of time; and
(2) in a case in which the person violates the prohibition
described in paragraph (1), requires the person to return all
amounts that the person received from the Agency under the
contract or grant agreement.
(b) Treatment of Returned Funds.--Any amounts returned to
the Defense Advanced Research Projects Agency under
subsection (a)(2) shall be credited to the same
appropriations account from which payment of such amounts was
originally made under the contract or grant agreement
described in subsection (a).
(c) Exercise of Authority.--The Director, or the designee
of the Director, may exercise the authority provided by this
section without the need for further approval by, or
regulatory implementation within, the Department of Defense.
SEC. 26. EFFECTIVE DATE.
(a) Immediate Applicability of Certain Provisions.--The
following shall take effect on the date of the enactment of
this Act and
[[Page S7118]]
apply with respect to any covered transaction the review or
investigation of which is initiated under section 721 of the
Defense Production Act of 1950 on or after such date of
enactment:
(1) Sections 4, 6, 8, 12, 13, 14, 15, 18, 20, 21, 22, 24,
and 25 and the amendments made by those sections.
(2) Section 11 and the amendments made by that section
(except for clause (iii) of section 721(b)(4)(A) of the
Defense Production Act of 1950, as added by section 11).
(3) Paragraphs (5)(C)(iv), (7), and (14) of subsection (a)
of section 721 of the Defense Production Act of 1950, as
amended by section 3.
(4) Section 721(m)(4) of the Defense Production Act of
1950, as amended by section 17.
(b) Delayed Applicability of Certain Provisions.--
(1) In general.--Any provision of or amendment made by this
Act not specified in subsection (a) shall--
(A) take effect on the date that is 30 days after
publication in the Federal Register of a determination by the
chairperson of the Committee on Foreign Investment in the
United States that the regulations, organizational structure,
personnel, and other resources necessary to administer the
new provisions are in place; and
(B) apply with respect to any covered transaction the
review or investigation of which is initiated under section
721 of the Defense Production Act of 1950 on or after the
date described in subparagraph (A).
(2) Nondelegation of determination.--The determination of
the chairperson of the Committee on Foreign Investment in the
United States under paragraph (1)(A) may not be delegated.
(c) Authorization for Pilot Programs.--
(1) In general.--Beginning on the date of the enactment of
this Act and ending on the date described in subsection
(b)(1)(A), the Committee on Foreign Investment in the United
States may, at its discretion, conduct one or more pilot
programs to implement any authority provided pursuant to any
provision of or amendment made by this Act not specified in
subsection (a).
(2) Publication in federal register.--A pilot program may
not commence until the date that is 30 days after publication
in the Federal Register of a determination by the chairperson
of the Committee of the scope of and procedures for the pilot
program. That determination may not be delegated.
SEC. 27. SEVERABILITY.
If any provision of this Act or an amendment made by this
Act, or the application of such a provision or amendment to
any person or circumstance, is held to be invalid, the
application of that provision or amendment to other persons
or circumstances and the remainder of the provisions of this
Act and the amendments made by this Act, shall not be
affected thereby.
______
By Mrs. FEINSTEIN (for herself, Mr. Blumenthal, Mr. Murphy, Mr.
Schumer, Mr. Durbin, Mrs. Murray, Mr. Reed, Mr. Carper, Mr.
Menendez, Mr. Cardin, Ms. Klobuchar, Mr. Whitehouse, Mrs.
Gillibrand, Mr. Franken, Mr. Schatz, Ms. Hirono, Ms. Warren,
Mr. Markey, Mr. Booker, Mr. Van Hollen, Ms. Duckworth, Ms.
Harris, Mr. Casey, and Mr. Sanders):
S. 2095. A bill to regulate assault weapons, to ensure that the right
to keep and bear arms is not unlimited, and for other purposes; to the
Committee on the Judiciary.
Mrs. FEINSTEIN. Mr. President, for the last month, in the wake of the
tragedy in Las Vegas, I have been asking my colleagues to show some
courage, stand up to the gun lobby, and take weapons of war off of our
streets.
Now, we have all had to bear witness to another tragedy. Three days
ago, in Sutherland Springs, Texas, a single person armed with an
assault rifle murdered 26 people and left another 20 injured. This
gunman walked into a church and opened fire on peaceful churchgoers,
including children as young as 18-months old. A helpless toddler who
barely learned to walk. Eight members of a single family were also
lost. Eight.
The shooter had 15 magazine clips of ammunition--almost 450 rounds--
and used all of them. Ask yourself: how would you feel in those
moments, with hundreds of bullets flying around and not knowing whether
you will live or die, or whether you will be able to protect your
child? Think about those children--terrified, witnessing their families
being shot while in a place of worship. It is time that we ask what
this says about us as a country. And what does this say about us to the
rest of the world.
In 1996, after a mass shooting where a gunman opened fire on tourists
at the sea side in Port Arthur, killing 35 people, Australia acted
swiftly. Twelve days later, Australia's government enacted sweeping gun
control measures. Since then, there has not been a single mass shooting
in that country since. Mass shootings in America, however, have become
common place. It is no longer a matter of if, but when, another one
will happen.
If there are now mass shootings in churches, where are we safe
anymore? Not concerts, not schools, not holiday parties. Just a month
ago, we experienced the worst mass shooting in our nation's history in
Las Vegas. A gunman opened fire with multiple semi-automatic assault
rifles that he had legally transformed into automatic weapons, killing
more than fifty people and leaving more than 500 wounded. Among the
victims were mothers, fathers, brothers, and sisters.
There was Kelsey Meadows, 28 years old, who after graduating from the
University of California, Fresno, returned to her hometown of Taft,
California to be a substitute teacher at her alma mater, Taft Union
High School. She was described by the high school principal as ``smart,
compassionate, and kind'' with a ``sweet spirit and a love for
children.'' Her entire family and community was completely devastated.
Kelsey could have been any of us attending that concert. My own
daughter told me after the Las Vegas shooting that she was supposed to
be in the city that evening, but her plans had to change. It was only a
little more than a year before the Las Vegas shooting that we
experienced what had then been the worst mass shooting in our nation's
history.
That was when 49 people who were enjoying an evening of dancing with
friends and loved ones were massacred in Orlando. Victims in Orlando
included 22-year old Luis Velma who was working at Universal Studios on
a Harry Potter ride. There was also Eddie Justice, a 30-year old
accountant who texted his mother from the shooting, telling her:
``Mommy I love you.'' ``In club they shooting.'' ``He has us.''
I encourage every member of this chamber to imagine receiving those
text messages from their son or daughter.
And just six months before that, 14 people were killed and more than
20 injured in San Bernardino, California at a work holiday party.
Among the victims was a father of six. A mother of three. A woman who
was eight when she and her mother left Vietnam for a better life in
America. The youngest victim was 26, and the oldest was 60.
The list goes on and on. Eight murdered at the Umpqua Community
College in Roseburg, Oregon. A police officer and two innocent citizens
brutally murdered by a man with an AK-47 style weapon in Colorado
Springs. In 2013, 12 people fatally shot at the Navy Yard, less than
two miles from where I stand today. And on December 14, 2012, 20
children had their lives taken at Sandy Hook Elementary School.
Children.
Once again, I encourage every member of this body to imagine dropping
their young child off at elementary school this morning, only to learn
a few hours later that a gunman walked into that school and tried to
kill as many people as possible. That is something we could have
prevented. But we did not. Instead, we have made it easier for those
with mental health issues to get guns. I often remember Sandy Hook and
think about how we let these families down. We failed them. And sadly,
the mass shootings have continued to get worse in terms of frequency
and lives lost. And I will not sit by while these killings continue.
That is why today I am joining with my colleagues to reintroduce
legislation to prohibit the sale, transfer, manufacture, and
importation of assault weapons and large capacity ammunition feeding
devices that can accept more than ten rounds. I will keep doing this.
This legislation must constantly be before this body until it is
enacted. Every member must make a decision whether to stand up or let
the National Rifle Association win again.
This legislation is not perfect. But it is part of the solution. We
must start with reducing the supply of the weapons of war that are used
to take the lives of our loved ones.
The deadly assault weapons used by the attackers in each of the
devastating shootings I have mentioned would have been banned under the
Assault Weapons Ban bill that I am introducing today. The new
legislation is based off of legislation we previously introduced
following the horrific attack committed against young school
[[Page S7119]]
children in Newtown, Connecticut. It will provide much needed fixes to
the law to keep our communities safer, while also protecting the rights
of lawful gun owners.
Back when we enacted the 1994 legislation, that law prohibited
semiautomatic weapons with a detachable magazine and at least two
military characteristics. The bill we are introducing today tightens
this test to prohibit semiautomatic rifles, handguns, and shotguns that
can accept a detachable magazine and have one military characteristic.
This is the standard employed in my home state of California--and it
works.
Based on the 10 years of experience from the 1994 law, we learned
that the ``two-characteristic'' test was too easy to ``work around'': a
manufacturer could simply remove one of the characteristics, and the
firearm was legal. The bill we are introducing today will close that
loophole. The bill also prohibits ``bullet buttons'', a feature that
certain manufacturers developed to evade restrictions on detachable
ammunition magazines. In San Bernardino, the assault rifles originally
contained ``bullet buttons'' for their magazine clips--which enabled
them to avoid California's assault weapons ban. Our bill contains
language to close this loophole.
This bill also prohibits ``bump-fire stocks'', which, as we saw in
Las Vegas, allows individuals to convert semi-automatic rifles to
function like a machine gun.
Other changes to the 1994 bill include updating the list of
specifically-named military-style firearms that are prohibited, to
account for new models developed since 1994; prohibiting semiautomatic
rifles and handguns with a fixed magazine that can accept more than 10
rounds; adding a ban on the importation of assault weapons and large-
capacity magazines; and eliminating the 10-year sunset that allowed the
original law to expire. Importantly, our legislation also prohibits
large-capacity ammunition feeding devices capable of accepting more
than 10 rounds.
Now, let me tell you what the bill will not do.
It will not affect hunting or sporting firearms. Instead, the bill
protects hunters and sportsmen by exempting 2,258 firearms used for
hunting or sporting purposes and exempting antique, manually-operated,
and permanently disabled weapons. The bill protects the rights of
existing gun owners by grandfathering weapons legally possessed on the
date of enactment. The bill also imposes a safe storage requirement for
grandfathered firearms to ensure they don't get into the hands of
people who would be prohibited from possessing them.
While the bill permits the continued possession of high-capacity
ammunition magazines that are legally possessed on the date of
enactment, it would ban the future transfer of these magazines.
Finally, the bill allows local jurisdictions to use existing federal
Byrne JAG grant money to support voluntary buy-back programs for
grandfathered assault weapons and large-capacity ammunition feeding
devices.
Opponents charge that this legislation impinges upon rights protected
by the Second Amendment. I disagree.
The Supreme Court expressly held in District of Columbia v. Heller
that ``the right secured by the Second Amendment is not unlimited.''
The Court made it clear that reasonable regulations are allowable under
the Constitution.
This bill is simply establishing reasonable regulations for what
types of weapons may be sold and used--individuals should not own a
nuclear weapon, they should not own a rocket launcher, and they should
not own a military-style assault weapon.
In fact, a number of courts have considered challenges to assault
weapons bans. To date, every court that has considered a ban on assault
weapons or large capacity magazines has upheld the law as reasonable.
In fact, the D.C. Circuit, the Second Circuit, the Fourth Circuit,
the Seventh Circuit, the Ninth Circuit, as well as a number of federal
district courts have all upheld laws like the one we are proposing.
Importantly, the Supreme Court let stand the ruling out of the
Seventh Circuit upholding a local ban on assault weapons and high
capacity magazines from the City of Highland Park, Illinois.
Mr. President, I believe very strongly that the most important duty
that government has to its citizens is to protect the nation and the
safety of its people.
When 26 churchgoers are killed in cold blood with their loved ones in
a Baptist Church on a Sunday morning, we fail them by not making sure
that they can worship in peace.
When 58 people attending a concert in Las Vegas lose their lives
because a madman was able to use laws on the books to make his semi-
automatic rifle into a machinegun, all of those who sit in this chamber
have failed them.
When 14 people are gunned down during a holiday party by those with
assault rifles that let off 65-75 rounds within minutes, our government
has failed them.
When 20 elementary school children are slaughtered by an assault
weapon, America has failed them.
The firearms used in these massacres are weapons of war. Let me say
it as plainly as I can: weapons of war do not belong on our streets, in
our churches, in our schools, in our malls, in our theaters, or in our
workplaces.
Now, I am under no illusions--I know that the gun lobby has a
stranglehold on this building. I know we got 40 votes in 2013, and I
know Republicans control the Senate today. But I also know this was
hard-fought in 1994, and we prevailed--with Republican support--and it
was a bipartisan vote. I still believe that, at some point, Americans
will come together and realize that we can be a nation that protects
its people from the savagery of these weapons.
I urge my colleagues to support this bill. I thank the chair, and I
yield the floor.
____________________