[Congressional Record Volume 167, Number 188 (Tuesday, October 26, 2021)]
[Senate]
[Pages S7389-S7391]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 3913. Mr. CASEY submitted an amendment intended to be proposed to 
amendment SA 3867 submitted by Mr. Reed and intended to be proposed to 
the bill H.R. 4350, to authorize appropriations for fiscal year 2022 
for military activities of the Department of Defense, for military 
construction, and for defense activities of the Department of Energy, 
to prescribe military personnel strengths for such fiscal year, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of subtitle G of title X, add the following:

     SEC. 1064. NATIONAL CRITICAL CAPABILITIES REVIEWS.

       (a) In General.--The Trade Act of 1974 (19 U.S.C. 2101 et 
     seq.) is amended by adding at the end the following:

           ``TITLE X--NATIONAL CRITICAL CAPABILITIES REVIEWS

     ``SEC. 1001. DEFINITIONS.

       ``In this title:
       ``(1) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means--
       ``(A) the Committee on Finance, the Committee on Armed 
     Services, the Committee on Banking, Housing, and Urban 
     Affairs, the Committee on Commerce, Science, and 
     Transportation, the Committee on Health, Education, Labor, 
     and Pensions, and the Committee on Homeland Security and 
     Governmental Affairs of the Senate; and
       ``(B) the Committee on Ways and Means, the Committee on 
     Armed Services, the Committee on Education and Labor, the 
     Committee on Financial Services, the Committee on Homeland 
     Security, and the Committee on Transportation and 
     Infrastructure of the House of Representatives.
       ``(2) Committee.--The term `Committee' means the Committee 
     on National Critical Capabilities established under section 
     1002.
       ``(3) Control.--The term `control' means the power, direct 
     or indirect, whether exercised or not exercised, to 
     determine, direct, or decide important matters affecting an 
     entity, subject to regulations prescribed by the Committee.
       ``(4) Country of concern.--The term `country of concern'--
       ``(A) has the meaning given the term `foreign adversary' in 
     section 8(c)(2) of the Secure and Trusted Communications 
     Networks Act of 2019 (47 U.S.C. 1607(c)(2)); and
       ``(B) may include a nonmarket economy country (as defined 
     in section 771(18) of the Tariff Act of 1930 (19 U.S.C. 
     1677(18))) identified by the Committee for purposes of this 
     paragraph by regulation.
       ``(5) Covered transaction.--
       ``(A) In general.--Except as otherwise provided, the term 
     `covered transaction' means any of the following 
     transactions, proposed or pending on or after the date of the 
     enactment of this title:
       ``(i) Any transaction by a United States business that--

       ``(I) shifts or relocates to a country of concern, or 
     transfers to an entity of concern, the design, development, 
     production, manufacture, fabrication, supply, servicing, 
     testing, management, operation, investment, ownership, or any 
     other essential elements involving one or more national 
     critical capabilities identified under subparagraph (B)(ii); 
     or
       ``(II) could result in an unacceptable risk to a national 
     critical capability.

       ``(ii) Any other transaction, transfer, agreement, or 
     arrangement, the structure of which is designed or intended 
     to evade or circumvent the application of this title, subject 
     to regulations prescribed by the Committee.
       ``(B) Regulations.--
       ``(i) In general.--The Committee shall prescribe 
     regulations further defining the term `covered transaction' 
     in accordance with subchapter II of chapter 5, and chapter 7, 
     of title 5, United States Code (commonly known as the 
     `Administrative Procedure Act').
       ``(ii) Identification of national critical capabilities.--
     For purposes of subparagraph (A)(I), the regulations 
     prescribed by the Committee under clause (i) shall--

       ``(I) identify the national critical capabilities subject 
     to that subparagraph based on criteria intended to limit 
     application of that subparagraph to the subset of national 
     critical capabilities that is likely to pose an unacceptable 
     risk to the national security and crisis preparedness of the 
     United States; and
       ``(II) enumerate, quantify, prioritize, and set forth 
     sufficient allowances of, specific types and examples of such 
     capabilities.

       ``(6) Crisis preparedness.--The term `crisis preparedness' 
     means preparedness for--
       ``(A) a public health emergency declared under section 319 
     of the Public Health Service Act (42 U.S.C. 247d); or
       ``(B) a major disaster declared under section 401 of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5170).
       ``(7) Critical infrastructure.--The term `critical 
     infrastructure' means systems and assets, whether physical or 
     virtual, so vital to the United States that the incapacity or 
     destruction of such systems and assets would have a 
     debilitating impact on national security, national economic 
     security, national public health or safety, or any 
     combination of those matters.
       ``(8) Entity of concern.--The term `entity of concern' 
     means an entity--
       ``(A) the ultimate parent entity of which is domiciled in a 
     country of concern; or
       ``(B) that is directly or indirectly controlled by, owned 
     by, or subject to the influence of a foreign person that has 
     a substantial nexus with a country of concern.
       ``(9) Foreign entity.--
       ``(A) In general.--Except as provided by subparagraph (B), 
     the term `foreign entity' means any branch, partnership, 
     group or sub-group, association, estate, trust, corporation 
     or division of a corporation, or organization organized under 
     the laws of a foreign country if--
       ``(i) its principal place of business is outside the United 
     States; or
       ``(ii) its equity securities are primarily traded on one or 
     more foreign exchanges.
       ``(B) Exception.--The term `foreign entity' does not 
     include any entity described in subparagraph (A) that can 
     demonstrate that a majority of the equity interest in such 
     entity is ultimately owned by nationals of the United States.
       ``(10) Foreign person.--The term `foreign person' means--
       ``(A) any foreign national, foreign government, or foreign 
     entity;
       ``(B) any entity over which control is exercised or 
     exercisable by a foreign national, foreign government, or 
     foreign entity; or
       ``(C) any entity over which control is exercised or 
     exercisable by a person described in subparagraph (A) or (B).
       ``(11) National critical capabilities.--The term `national 
     critical capabilities', subject to regulations prescribed by 
     the Committee--
       ``(A) means systems and assets, whether physical or 
     virtual, so vital to the United States that the inability to 
     develop such systems and assets or the incapacity or 
     destruction of such systems or assets would have a 
     debilitating impact on national security or crisis 
     preparedness; and
       ``(B) includes the following:
       ``(i) The production, in sufficient quantities, of any of 
     the following articles:

       ``(I) Medical supplies, medicines, and personal protective 
     equipment.
       ``(II) Articles essential to the operation, manufacture, 
     supply, service, or maintenance of critical infrastructure.
       ``(III) Articles critical to infrastructure construction 
     after a natural or manmade disaster.
       ``(IV) Articles that are components of systems critical to 
     the operation of weapons systems, intelligence collection 
     systems, or items critical to the conduct of military or 
     intelligence operations.
       ``(V) Any other articles identified in regulations 
     prescribed under section 1007.

       ``(ii) Supply chains for the production of articles 
     described in clause (i).
       ``(iii) Essential supply chains for the Department of 
     Defense.
       ``(iv) Any other supply chains identified in regulations 
     prescribed under section 1007.
       ``(v) Services critical to the production of articles 
     described in clause (i) or a supply chain described in clause 
     (ii), (iii), or (iv).
       ``(vi) Medical services.
       ``(vii) Services critical to the maintenance of critical 
     infrastructure.
       ``(viii) Services critical to infrastructure construction 
     after a natural or manmade disaster.
       ``(ix) Any other services identified in regulations 
     prescribed under section 1007.
       ``(12) National security.--The term `national security' 
     includes--
       ``(A) national security, as defined in section 721(a) of 
     the Defense Production Act of 1950 (50 U.S.C. 4565(a));
       ``(B) national defense, as defined in section 702 of that 
     Act (50 U.S.C. 4552); and
       ``(C) agricultural security and natural resources security.
       ``(13) Party.--The term `party', with respect to a 
     transaction, has the meaning given that term in regulations 
     prescribed by the Committee.
       ``(14) United states.--The term `United States' means the 
     several States, the District of Columbia, and any territory 
     or possession of the United States.
       ``(15) United states business.--The term `United States 
     business' means a person engaged in interstate commerce in 
     the United States.

     ``SEC. 1002. COMMITTEE ON NATIONAL CRITICAL CAPABILITIES.

       ``(a) In General.--There is established a committee, to be 
     known as the `Committee on National Critical Capabilities', 
     which shall carry out this title and such other assignments 
     as the President may designate.
       ``(b) Membership.--
       ``(1) In general.--The Committee shall be comprised of the 
     head, or a designee of the head, of each of the following:
       ``(A) The Office of the United States Trade Representative.
       ``(B) The Department of Commerce.
       ``(C) The Office of Science and Technology Policy.
       ``(D) The Department of the Treasury.
       ``(E) The Department of Homeland Security.
       ``(F) The Department of Defense.
       ``(G) The Department of State.
       ``(H) The Department of Justice.
       ``(I) The Department of Energy.

[[Page S7390]]

       ``(J) The Department of Health and Human Services.
       ``(K) The Department of Agriculture.
       ``(L) The Department of Labor.
       ``(M) Any other Federal agency the President determines 
     appropriate, generally or on a case-by-case basis.
       ``(2) Ex officio members.--
       ``(A) In general.--In addition to the members of the 
     Committee specified in paragraph (1), the following shall, 
     except as provided in subparagraph (B), be nonvoting, ex 
     officio members of the Committee:
       ``(i) The Director of National Intelligence.
       ``(ii) The Administrator of the Federal Emergency 
     Management Agency.
       ``(iii) The Director of the National Institute of Standards 
     and Technology.
       ``(iv) The Director of the Centers for Disease Control and 
     Prevention.
       ``(v) The Director of the National Institute of Allergy and 
     Infectious Diseases.
       ``(vi) The Chairperson of the Federal Communications 
     Commission.
       ``(vii) The Chairperson of the Securities and Exchange 
     Commission.
       ``(viii) The Chairperson of the Commodity Futures Trading 
     Commission.
       ``(ix) The Administrator of the Federal Aviation 
     Administration.
       ``(B) Designation as voting members.--The chairperson of 
     the Committee may designate any of the officials specified in 
     clauses (ii) through (ix) of subparagraph (A) as voting 
     members of the Committee.
       ``(c) Chairperson.--
       ``(1) In general.--The United States Trade Representative 
     shall serve as the chairperson of the Committee.
       ``(2) Consultations with secretaries of defense and 
     commerce.--In carrying out the duties of the chairperson of 
     the Committee, the United States Trade Representative shall 
     consult with the Secretary of Defense and the Secretary of 
     Commerce.
       ``(d) Designation of Officials to Carry Out Duties Related 
     to Committee.--The head of each agency represented on the 
     Committee shall designate an official, at or equivalent to 
     the level of Assistant Secretary in the Department of the 
     Treasury, who is appointed by the President, by and with the 
     advice and consent of the Senate, to carry out such duties 
     related to the Committee as the head of the agency may 
     assign.

     ``SEC. 1003. REVIEW OF COVERED TRANSACTIONS.

       ``(a) Mandatory Notification.--A United States business 
     that engages in a covered transaction shall submit a written 
     notification of the transaction to the Committee.
       ``(b) Review.--
       ``(1) In general.--Not later than 60 days after receiving 
     written notification under subsection (a) of a covered 
     transaction, the Committee may--
       ``(A) review the transaction to determine if the 
     transaction is likely to result in an unacceptable risk to 
     one or more national critical capabilities, including by 
     considering factors specified in section 1005; and
       ``(B) if the Committee determines under subparagraph (A) 
     that the transaction poses a risk described in that 
     subparagraph, make recommendations--
       ``(i) to the President for appropriate action that may be 
     taken under this title or under other existing authorities to 
     address or mitigate that risk; and
       ``(ii) to Congress for the establishment or expansion of 
     Federal programs to support the production or supply of 
     articles and services described in section 1001(a)(11)(B) in 
     the United States.
       ``(2) Unilateral initiation of review.--The Committee may 
     initiate a review under paragraph (1) of a covered 
     transaction for which written notification is not submitted 
     under subsection (a).
       ``(3) Initiation of review by request from congress.--The 
     Committee shall initiate a review under paragraph (1) of a 
     covered transaction if the chairperson and the ranking member 
     of one of the appropriate congressional committees jointly 
     request the Committee to review the transaction.
       ``(c) Treatment of Business Confidential Information.--A 
     United States business shall submit each notification 
     required by subsection (a) to the Committee--
       ``(1) in a form that includes business confidential 
     information; and
       ``(2) in a form that omits business confidential 
     information and is appropriate for disclosure to the public.

     ``SEC. 1004. ACTION BY THE PRESIDENT.

       ``(a) In General.--Subject to subsection (d), the President 
     may take such action for such time as the President considers 
     appropriate to address or mitigate any unacceptable risk 
     posed by a covered transaction to one or more national 
     critical capabilities, including suspending or prohibiting 
     the covered transaction.
       ``(b) Announcement by the President.--The President shall 
     announce the decision on whether or not to take action 
     pursuant to subsection (a) with respect to a covered 
     transaction not later than 15 days after the date on which 
     the review of the transaction under section 1003 is 
     completed.
       ``(c) Enforcement.--The President may direct the Attorney 
     General of the United States to seek appropriate relief, 
     including divestment relief, in the district courts of the 
     United States, in order to implement and enforce this 
     section.
       ``(d) Findings of the President.--The President may 
     exercise the authority conferred by subsection (a) to suspend 
     or prohibit a covered transaction only if the President finds 
     that--
       ``(1) there is credible evidence that leads the President 
     to believe that the transaction poses an unacceptable risk to 
     one or more national critical capabilities; and
       ``(2) provisions of law (other than this section) do not, 
     in the judgment of the President, provide adequate and 
     appropriate authority for the President to protect such 
     capabilities.
       ``(e) Factors To Be Considered.--For purposes of 
     determining whether to take action under subsection (a), the 
     President shall consider, among other factors, each of the 
     factors described in section 1005, as appropriate.

     ``SEC. 1005. FACTORS TO BE CONSIDERED.

       ``The Committee, in reviewing and making a determination 
     with respect to a covered transaction under section 1003, and 
     the President, in determining whether to take action under 
     section 1004 with respect to a covered transaction, shall 
     consider any factors relating to national critical 
     capabilities that the Committee or the President considers 
     relevant, including--
       ``(1) the long-term strategic economic, national security, 
     and crisis preparedness interests of the United States;
       ``(2) the history of distortive or predatory trade 
     practices in each country in which a foreign person that is a 
     party to the transaction is domiciled;
       ``(3) control and beneficial ownership (as determined in 
     accordance with section 847 of the National Defense 
     Authorization Act for Fiscal Year 2020 (Public Law 116-92; 10 
     U.S.C. 2509 note)) of each foreign person that is a party to 
     the transaction; and
       ``(4) impact on the domestic industry and resulting 
     resiliency, including the domestic skills base, taking into 
     consideration any pattern of foreign investment in the 
     domestic industry.

     ``SEC. 1006. SUPPLY CHAIN SENSITIVITIES.

       ``The Committee shall determine the sensitivities and risks 
     for sourcing of articles described in section 
     1001(a)(11)(B)(i), in accordance with the following:
       ``(1) The sourcing of least concern shall be articles the 
     supply chains for which are housed in whole within countries 
     that are allies of the United States.
       ``(2) The sourcing of greater concern shall be articles the 
     supply chains for which are housed in part within countries 
     of concern or from an entity of concern but for which 
     substitute production is available from elsewhere at required 
     scale.
       ``(3) The sourcing of greatest concern shall be articles 
     the supply chains for which are housed wholly or in part in 
     countries of concern or from an entity of concern and for 
     which substitute production is unavailable elsewhere at 
     required scale.

     ``SEC. 1007. IDENTIFICATION OF ADDITIONAL NATIONAL CRITICAL 
                   CAPABILITIES.

       ``(a) In General.--The Committee should prescribe 
     regulations to identify additional articles, supply chains, 
     and services to recommend for inclusion in the definition of 
     `national critical capabilities' under section 1001(a)(11).
       ``(b) Review of Industries.--
       ``(1) In general.--In identifying under subsection (a) 
     additional articles, supply chains, and services to recommend 
     for inclusion in the definition of `national critical 
     capabilities' under section 1001(a)(11), the Committee should 
     conduct a review of industries identified by Federal 
     Emergency Management Agency as carrying out emergency support 
     functions, including the following industries:
       ``(A) Energy.
       ``(B) Medical.
       ``(C) Communications, including electronic and 
     communications components.
       ``(D) Defense.
       ``(E) Transportation.
       ``(F) Aerospace, including space launch.
       ``(G) Robotics.
       ``(H) Artificial intelligence.
       ``(I) Semiconductors.
       ``(J) Shipbuilding.
       ``(K) Water, including water purification.
       ``(2) Quantification.--In conducting a review of industries 
     under paragraph (1), the Committee should specify the 
     quantity of articles, supply chains, and services, and 
     specific types and examples of transactions, from each 
     industry sufficient to maintain national critical 
     capabilities.

     ``SEC. 1008. REPORTING REQUIREMENTS.

       ``(a) Annual Report to Congress.--
       ``(1) In general.--Not later than 90 days after the date of 
     the enactment of the National Defense Authorization Act for 
     Fiscal Year 2022, and annually thereafter, the Committee 
     shall submit to the appropriate congressional committees a 
     report--
       ``(A) on the determination under section 1006 with respect 
     to sensitivities and risks for sourcing of articles described 
     in section 1001(a)(11)(B)(i);
       ``(B) assessing whether identification of additional 
     national critical capabilities under section 1007 is 
     necessary; and
       ``(C) describing, for the year preceding submission of the 
     report--
       ``(i) the notifications received under subsection (a) of 
     section 1003 and reviews conducted pursuant to such 
     notifications;
       ``(ii) reviews initiated under paragraph (2) or (3) of 
     subsection (b) of that section;
       ``(iii) actions recommended by the Committee under 
     subsection (b)(1)(B) of that section as a result of such 
     reviews; and
       ``(iv) reviews during which the Committee determined no 
     action was required; and
       ``(D) assessing the overall impact of such reviews on 
     national critical capabilities.
       ``(2) Form of report.--The report required by paragraph (1) 
     shall be submitted in unclassified form but may include a 
     classified annex.

[[Page S7391]]

       ``(b) Use of Defense Production Act of 1950 Authorities.--
     Not later than 180 days after the date of the enactment of 
     the National Defense Authorization Act for Fiscal Year 2022, 
     the Committee shall submit to Congress a report that includes 
     recommendations relating to use the authorities under title 
     III of the Defense Production Act of 1950 (50 U.S.C. 4531 et 
     seq.) to make investments to enhance national critical 
     capabilities and reduce dependency on materials and services 
     imported from foreign countries.

     ``SEC. 1009. REQUIREMENT FOR REGULATIONS.

       ``(a) In General.--The Committee shall prescribe 
     regulations to carry out this title.
       ``(b) Elements.--Regulations prescribed to carry out this 
     title shall--
       ``(1) provide for the imposition of civil penalties for any 
     violation of this title, including any mitigation agreement 
     entered into, conditions imposed, or order issued pursuant to 
     this title; and
       ``(2) include specific examples of the types of--
       ``(A) the transactions that will be considered to be 
     covered transactions; and
       ``(B) the articles, supply chains, and services that will 
     be considered to be national critical capabilities.
       ``(c) Coordination.--In prescribing regulations to carry 
     out this title, the Committee shall coordinate with the 
     United States Trade Representative, the Under Secretary of 
     Commerce for Industry and Security, and the Committee on 
     Foreign Investment in the United States to avoid duplication 
     of effort.

     ``SEC. 1010. REQUIREMENTS RELATED TO GOVERNMENT PROCUREMENT.

       ``(a) In General.--Not later than 90 days after the date of 
     the enactment of the National Defense Authorization Act for 
     Fiscal Year 2022, the Federal Acquisition Regulation shall be 
     revised to require each person that is a prospective 
     contractor for an executive agency to disclose the supply 
     chains the person would use to carry out the contract and the 
     extent to which the person would depend on articles and 
     services imported from foreign countries, including the 
     percentage of such materials and services imported from 
     countries of concern.
       ``(b) Materiality.--The head of an executive agency shall 
     consider the failure of a person to make the disclosures 
     required by subsection (a) to be material determinants in 
     awarding a contract to that person.
       ``(c) Applicability.--The revisions to the Federal 
     Acquisition Regulation required under subsection (a) shall 
     apply with respect to contracts for which solicitations are 
     issued on or after the date that is 90 days after the date of 
     the enactment of the National Defense Authorization Act for 
     Fiscal Year 2022.
       ``(d) Definitions.--In this section:
       ``(1) Executive agency.--The term `executive agency' has 
     the meaning given that term in section 133 of title 41, 
     United States Code.
       ``(2) Federal acquisition regulation.--The term `Federal 
     Acquisition Regulation' means the regulation issued pursuant 
     to section 1303(a)(1) of title 41, United States Code.

     ``SEC. 1011. MULTILATERAL ENGAGEMENT AND COORDINATION.

       ``The United States Trade Representative--
       ``(1) should, in coordination and consultation with 
     relevant Federal agencies, conduct multilateral engagement 
     with the governments of countries that are allies of the 
     United States to secure coordination of protocols and 
     procedures with respect to covered transactions with 
     countries of concern; and
       ``(2) upon adoption of protocols and procedures described 
     in paragraph (1), shall work with those governments to 
     establish information sharing regimes.

     ``SEC. 1012. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated such sums as may 
     be necessary to carry out this title, including to provide 
     outreach to industry and persons affected by this title.

     ``SEC. 1013. RULE OF CONSTRUCTION WITH RESPECT TO FREE AND 
                   FAIR COMMERCE.

       ``Nothing in this title may be construed as prohibiting or 
     limiting the free and fair flow of commerce outside of the 
     United States that does not pose an unacceptable risk to a 
     national critical capability.''.
       (b) Clerical Amendment.--The table of contents for the 
     Trade Act of 1974 is amended by adding at the end the 
     following:

           ``TITLE X--NATIONAL CRITICAL CAPABILITIES REVIEWS

``Sec. 1001. Definitions.
``Sec. 1002. Committee on National Critical Capabilities.
``Sec. 1003. Review of covered transactions.
``Sec. 1004. Action by the President.
``Sec. 1005. Factors to be considered.
``Sec. 1006. Supply chain sensitivities.
``Sec. 1007. Identification of additional national critical 
              capabilities.
``Sec. 1008. Reporting requirements.
``Sec. 1009. Requirement for regulations.
``Sec. 1010. Requirements related to government procurement.
``Sec. 1011. Multilateral engagement and coordination.
``Sec. 1012. Authorization of appropriations.
``Sec. 1013. Rule of construction with respect to free and fair 
              commerce.''.

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