[Congressional Record Volume 168, Number 157 (Wednesday, September 28, 2022)]
[Senate]
[Pages S5322-S5324]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 5842. Mr. BLUNT submitted an amendment intended to be proposed to 
amendment SA 5499 submitted by Mr. Reed (for himself and Mr. Inhofe) 
and intended to be proposed to the bill H.R. 7900, to authorize 
appropriations for fiscal year 2023 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 A of title IX, add the following:

     SEC. 906. ESTABLISHMENT OF OFFICE OF STRATEGIC CAPITAL.

       (a) In General.--Chapter 4 of title 10, United States Code, 
     is amended by adding at the end the following new section:

     ``Sec. 148. Office of Strategic Capital

       ``(a) Establishment.--There is in the Office of the 
     Secretary of Defense an office to be known as the Office of 
     Strategic Capital (in this section referred to as the 
     `Office').
       ``(b) Director.--The Office shall be headed by a Director 
     (in this section referred to as the `Director'), who shall be 
     appointed by the Secretary of Defense from among employees of 
     the Department of Defense in Senior Executive Service 
     positions (as defined in section 3132 of title 5).
       ``(c) Duties.--The Office shall--
       ``(1) identify, accelerate, and sustain the establishment, 
     research, development, construction, procurement, leasing, 
     consolidation, alteration, improvement, or repair of tangible 
     and intangible assets vital to national security;
       ``(2) protect vital tangible and intangible assets from 
     theft, acquisition, and transfer by the People's Republic of 
     China, the Russian Federation, and other countries that are 
     adversaries of the United States; and
       ``(3) provide capital assistance to eligible entities 
     engaged in eligible investments.
       ``(d) Applications.--
       ``(1) In general.--An eligible entity seeking capital 
     assistance for an eligible investment shall submit to the 
     Director an application at such time, in such manner, and 
     containing such information as the Director may require.
       ``(2) Preliminary rating opinion letter.--
       ``(A) In general.--Except as provided by subparagraph (B), 
     an application submitted under paragraph (1) seeking capital 
     assistance for an eligible investment shall include a 
     preliminary rating opinion letter from at least one rating 
     agency indicating that the senior obligations of the 
     investment have the potential to achieve an investment-grade 
     rating.
       ``(B) Exceptions.--The Director may waive the requirement 
     under subparagraph (A) with respect to an investment if it is 
     not possible to obtain a preliminary rating opinion letter 
     with respect to the investment.
       ``(e) Selection of Investments.--The Director shall 
     establish criteria for selecting among eligible investments 
     for which applications are submitted under subsection (d). 
     Such criteria shall include--
       ``(1) the extent to which an investment is significant to 
     the national security of the United States;
       ``(2) the creditworthiness of an investment; and
       ``(3) the likelihood that capital assistance provided for 
     an investment would enable the investment to proceed sooner 
     than the investment would otherwise be able to proceed.
       ``(f) Capital Assistance.--
       ``(1) Loans and loan guarantees.--
       ``(A) In general.--The Office may provide loans or loan 
     guarantees to finance or refinance the costs of an eligible 
     investment selected pursuant to subsection (e).
       ``(B) Investment-grade rating required.--
       ``(i) In general.--Except as provided by clause (ii), a 
     loan or loan guarantee may be provided under subparagraph (A) 
     only with respect to an investment that receives an 
     investment-grade rating from a rating agency.
       ``(ii) Exception.--The Director may waive the requirement 
     under clause (i) with respect to an investment if--

       ``(I) it is not possible to obtain a preliminary rating 
     opinion letter with respect to the investment; and
       ``(II) the investment is determined by the Secretary of 
     Defense to be vital to the national security of the United 
     States.

       ``(C) Security.--A loan provided under subparagraph (A) is 
     required--
       ``(i) to be payable, in whole or in part, from tolls, user 
     fees, or other dedicated revenue sources; and
       ``(ii) to include a rate covenant, coverage requirement, or 
     similar security feature supporting investment obligations.
       ``(D) Administration of loans.--
       ``(i) Interest rate.--

       ``(I) In general.--Except as provided by subclause (II), 
     the interest rate on a loan provided under subparagraph (A) 
     shall be not less than the yield on marketable United States 
     Treasury securities of a similar maturity to the maturity of 
     the loan on the date of execution of the loan agreement.
       ``(II) Exception.--The Director may waive the requirement 
     under subclause (I) with respect to an investment if the 
     investment is determined by the Secretary of Defense to be 
     vital to the national security of the United States.

       ``(ii) Final maturity date.--The final maturity date of a 
     loan provided under subparagraph (A) shall be not later than 
     35 years after the date of substantial completion of the 
     investment for which the loan was provided.
       ``(iii) Prepayment.--A loan provided under subparagraph (A) 
     may be paid earlier than is provided for under the loan 
     agreement without a penalty.
       ``(iv) Capital reserve subsidy amount.--The Director of the 
     Office of Management and Budget and the rating agencies shall 
     determine the appropriate capital reserve subsidy amount for 
     each loan provided under subparagraph (A).
       ``(v) Nonsubordination.--A loan provided under subparagraph 
     (A) shall not be subordinated to the claims of any holder of 
     investment obligations in the event of bankruptcy, 
     insolvency, or liquidation of the obligor.
       ``(vi) Sale of loans.--After substantial completion of an 
     investment for which a loan is provided under subparagraph 
     (A) and after notifying the obligor, the Director may sell to 
     another entity or reoffer into the capital markets a loan for 
     the investment if the Director determines that the sale or 
     reoffering can be made on favorable terms.

[[Page S5323]]

       ``(vii) Loan guarantees.--If the Director determines that 
     the holder of a loan guaranteed by the Office defaults on the 
     loan, the Director shall pay the holder as specified in the 
     loan guarantee agreement.
       ``(viii) Terms and conditions.--Loans and loan guarantees 
     provided under subparagraph (A) shall be subject to such 
     other terms and conditions and contain such other covenants, 
     representations, warranties, and requirements (including 
     requirements for audits) as the Director determines 
     appropriate.
       ``(ix) Applicability of federal credit reform act of 
     1990.--Loans and loan guarantees provided under subparagraph 
     (A) shall be subject to the requirements of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
       ``(2) Equity investments.--
       ``(A) In general.--The Director may, as a minority 
     investor, support an eligible investment selected pursuant to 
     subsection (e) with funds or use other mechanisms for the 
     purpose of purchasing, and may make and fund commitments to 
     purchase, invest in, make pledges in respect of, or otherwise 
     acquire, equity or quasi-equity securities or shares or 
     financial interests of the eligible entity receiving support 
     for the eligible investment, including as a limited partner 
     or other investor in investment funds, upon such terms and 
     conditions as the Director may determine.
       ``(B) Sales and liquidation of position.--The Office shall 
     seek to sell and liquidate any support for an investment 
     provided under subparagraph (A) as soon as commercially 
     feasible, commensurate with other similar investors in the 
     investment and taking into consideration the national 
     security interests of the United States.
       ``(3) Insurance and reinsurance.--The Director may issue 
     insurance or reinsurance, upon such terms and conditions as 
     the Director may determine, to an eligible entity for an 
     eligible investment selected pursuant to subsection (e) 
     assuring protection of the investments of the entity in whole 
     or in part against any or all political risks such as 
     currency inconvertibility and transfer restrictions, 
     expropriation, war, terrorism, civil disturbance, breach of 
     contract, or nonhonoring of financial obligations.
       ``(4) Technical assistance.--The Director shall provide 
     technical assistance with respect to developing and financing 
     investments to eligible entities seeking capital assistance 
     for eligible investments and eligible entities receiving 
     capital assistance under this subsection.
       ``(5) Terms and conditions.--
       ``(A) Fees.--The Director may charge fees for the provision 
     of capital assistance under this subsection to cover the 
     costs to the Office of providing such assistance.
       ``(B) Amount of capital assistance.--The Director shall 
     provide to an eligible investment selected pursuant to 
     subsection (e) the minimum amount of assistance necessary to 
     carry out the investment.
       ``(C) Use of united states dollar.--All financial 
     transactions conducted under this subsection shall be 
     conducted in United States dollars, unless the Director 
     approves of the use of another currency.
       ``(g) Corporate Funds.--
       ``(1) Corporate capital account.--There is established in 
     the Treasury of the United States a fund to be known as the 
     `Office of Strategic Capital Capital Account' (in this 
     subsection referred to as the `Capital Account') to carry out 
     the purposes of the Office.
       ``(2) Funding.--The Capital Account shall consist of--
       ``(A) fees charged and collected pursuant to paragraph (3);
       ``(B) any amounts received pursuant to paragraph (6);
       ``(C) investments and returns on such investments pursuant 
     to paragraph (7);
       ``(D) amounts appropriated pursuant to the authorization of 
     appropriations under paragraph (8);
       ``(E) payments received in connection with settlements of 
     all insurance and reinsurance claims of the Office; and
       ``(F) all other collections transferred to or earned by the 
     Office, excluding the cost, as defined in section 502 of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a), of loans 
     and loan guaranties.
       ``(3) Fee authority.--Fees may be charged and collected for 
     providing capital assistance in amounts to be determined by 
     the Director. The Director shall establish the amount of such 
     fees at an amount sufficient to cover all or a portion of the 
     costs to the Office of providing capital assistance.
       ``(4) Use of funds.--
       ``(A) In general.--Subject to appropriations Acts, the 
     Director is authorized to pay, from amounts in the Capital 
     Account--
       ``(i) the cost, as defined in section 502 of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a), of loans and loan 
     guarantees and other capital assistance; and
       ``(ii) administrative expenses of the Office.
       ``(B) Income and revenue.--In order to carry out the 
     purposes of the Office, all collections transferred to or 
     earned by the Office (excluding the cost, as defined in 
     section 502 of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661a), of loans and loan guaranties) shall be 
     deposited into the Capital Account and shall be available to 
     carry out its purpose, including--
       ``(i) payment of all insurance and reinsurance claims of 
     the Office;
       ``(ii) repayments to the Treasury of amounts borrowed under 
     paragraph (5); and
       ``(iii) dividend payments to the Treasury under paragraph 
     (6).
       ``(5) Full faith and credit.--
       ``(A) In general.--All capital assistance provided by the 
     Office shall constitute obligations of the United States, and 
     the full faith and credit of the United States is hereby 
     pledged for the full payment and performance of such 
     obligations.
       ``(B) Authority to borrow.--The Director is authorized to 
     borrow from the Treasury such sums as may be necessary to 
     fulfill such obligations of the United States and any such 
     borrowing shall be at a rate determined by the Secretary of 
     the Treasury, taking into consideration the current average 
     market yields on outstanding marketable obligations of the 
     United States of comparable maturities, for a period jointly 
     determined by the Director and the Secretary of Defense, and 
     subject to such terms and conditions as the Secretary may 
     require.
       ``(6) Dividends.--The Director, in consultation with the 
     Director of the Office of Management and Budget, shall 
     annually assess a dividend payment to the Treasury if the 
     Office's insurance portfolio is more than 100 percent 
     reserved.
       ``(7) Investment authority.--
       ``(A) In general.--The Director may request the Secretary 
     of the Treasury to invest such portion of the Capital Account 
     as is not, in the Director's judgment, required to meet the 
     current needs of the Capital Account.
       ``(B) Form of investments.--Investments described in 
     subparagraph (A) shall be made by the Secretary of the 
     Treasury in public debt obligations, with maturities suitable 
     to the needs of the Capital Account, as determined by the 
     Director, and bearing interest at rates determined by the 
     Secretary, taking into consideration current market yields on 
     outstanding marketable obligations of the United States of 
     comparable maturities.
       ``(8) Authorization of appropriations.--
       ``(A) In general.--There are authorized to be appropriated 
     to the Capital Account--
       ``(i) for fiscal year 2023, $20,000,000;
       ``(ii) for fiscal year 2024, $30,000,000;
       ``(iii) for fiscal year 2025, $40,000,000; and
       ``(iv) for fiscal year 2026 and each fiscal year 
     thereafter, $50,000,000.
       ``(B) Availability of amounts.--Amounts appropriated 
     pursuant to the authorization of appropriations under 
     subparagraph (A) shall remain available until expended.
       ``(9) Collections subject to appropriations acts.--Interest 
     earnings made pursuant to paragraph (6), earnings collected 
     related to equity investments, and other amounts (excluding 
     fees related to insurance or reinsurance) collected, may not 
     be collected for any fiscal year except to the extent 
     provided in advance in appropriations Acts.
       ``(h) Regulations.--The Secretary of Defense shall 
     prescribe such regulations as are necessary to carry out this 
     section.
       ``(i) Annual Report.--Not later than December 31 of each 
     year, the Secretary of Defense shall submit to the 
     congressional defense committees an annual report describing 
     the activities of the Office in the preceding fiscal year and 
     the goals of the Office for the next fiscal year.
       ``(j) Definitions.--In this section:
       ``(1) Capital assistance.--The term `capital assistance' 
     means loans, loan guarantees, equity investments, insurance 
     and reinsurance, or technical assistance provided under 
     subsection (f).
       ``(2) Eligible entity.--The term `eligible entity' means--
       ``(A) an individual;
       ``(B) a corporation;
       ``(C) a partnership, including a public-private 
     partnership;
       ``(D) a joint venture;
       ``(E) a trust;
       ``(F) a State, including a political subdivision or any 
     other instrumentality of a State;
       ``(G) a Tribal government or consortium of Tribal 
     governments;
       ``(H) any other governmental entity or public agency in the 
     United States, including a special purpose district or public 
     authority, including a port authority; or
       ``(I) a multi-State or multi-jurisdictional group of public 
     entities.
       ``(3) Eligible investment.--The term `eligible investment' 
     means an investment that facilitates the efforts of the 
     Office--
       ``(A) to identify, accelerate, and sustain the 
     establishment, research, development, construction, 
     procurement, leasing, consolidation, alteration, improvement, 
     or repair of tangible and intangible assets vital to national 
     security; or
       ``(B) to protect vital tangible and intangible assets from 
     theft, acquisition, and transfer by the People's Republic of 
     China, the Russian Federation, and other countries that are 
     adversaries of the United States.
       ``(4) Investment-grade rating.--The term `investment-grade 
     rating' means a rating of BBB minus, Baa3, bbb minus, BBB 
     (low), or higher assigned by a rating agency to investment 
     obligations.
       ``(5) Obligor.--The term `obligor' means a party that is 
     primarily liable for payment of the principal of or interest 
     on a loan.
       ``(6) Rating agency.--The term `rating agency' means a 
     credit rating agency registered with the Securities and 
     Exchange Commission as a nationally recognized statistical 
     rating organization (as that term is defined in section 3(a) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))).

[[Page S5324]]

       ``(7) Subsidy amount.--The term `subsidy amount' means the 
     amount of budget authority sufficient to cover the estimated 
     long-term cost to the Federal Government of a loan--
       ``(A) calculated on a net present value basis; and
       ``(B) excluding administrative costs and any incidental 
     effects on governmental receipts or outlays in accordance 
     with the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et 
     seq.).''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 4 of such title is amended by adding at 
     the end the following new item:

``148. Office of Strategic Capital.''.
                                 ______