[Congressional Record Volume 168, Number 158 (Thursday, September 29, 2022)]
[Senate]
[Pages S5908-S5910]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 6384. Mr. TOOMEY 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 D of title XII, add the following:

     SEC. 1254. TRANSPARENCY IN OUTBOUND INVESTMENT IN NATIONAL 
                   CRITICAL TECHNOLOGIES.

       The Defense Production Act of 1950 (50 U.S.C. 4501 et seq.) 
     is amended by adding at the end the following:

  ``TITLE VIII--OUTBOUND INVESTMENT IN NATIONAL CRITICAL TECHNOLOGIES

     ``SEC. 801. DEFINITIONS.

       ``In this title:
       ``(1) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means--
       ``(A) the Committee on Banking, Housing, and Urban Affairs 
     of the Senate; and
       ``(B) the Committee on Financial Services of the House of 
     Representatives.
       ``(2) Country of concern.--The term `country of concern' 
     means the People's Republic of China.
       ``(3) Covered foreign entity.--
       ``(A) In general.--Subject to regulations prescribed by the 
     President in accordance with section 806, and except as 
     provided in subparagraph (B), the term `covered foreign 
     entity' means--
       ``(i) any entity that is incorporated in, has a principal 
     place of business in, or is organized under the laws of, a 
     country of concern;
       ``(ii) any entity the equity securities of which are 
     primarily traded on one or more exchanges in a country of 
     concern; or
       ``(iii) any entity in which any entity described in clause 
     (i) or (ii), or a group of such

[[Page S5909]]

     entities, holds, individually or in aggregate, directly or 
     indirectly, an ownership interest of greater than 50 percent.
       ``(B) Exception.--The term `covered foreign entity' shall 
     not include any entity described in subparagraph (A)(ii) that 
     can demonstrate that a majority of the equity interest in 
     such entity is ultimately owned by nationals of the United 
     States or individuals who are not nationals of a country of 
     concern, as defined in regulations prescribed by the 
     President.
       ``(4) Covered investment.--
       ``(A) In general.--Subject to such regulations as may be 
     prescribed by the President in accordance with section 806, 
     and except as provided in subparagraph (C), the term `covered 
     investment' means any investment engaged in by a United 
     States person on or after the effective date of such 
     regulations--
       ``(i) that involves--

       ``(I) a direct acquisition of an equity interest or 
     contingent equity interest in, or monetary capital 
     contribution in, a covered foreign entity;
       ``(II) an arrangement for an interest in the short- or 
     long-term debt obligations of a covered foreign entity that 
     include government rights characteristic of an equity 
     investment, management, or other important rights;
       ``(III) the establishment of a wholly owned subsidiary in a 
     country of concern;
       ``(IV) the establishment of a joint venture in a country of 
     concern or with a covered foreign entity; or
       ``(V) any deceptive or structured arrangement attempting to 
     evade falling into a category described in any of subclauses 
     (I) through (IV); and

       ``(ii) if--

       ``(I) the covered foreign entity the investment is in, or 
     that is formed as a result of the investment, produces, 
     designs, tests, manufactures, fabricates, or develops a 
     national critical technology; and
       ``(II) as a result of the investment, the United States 
     person imparts management or procedural know-how to the 
     entity described in subclause (I) that would result in 
     product improvement or technology development advances in 
     such technology.

       ``(B) Exceptions.--The term `covered investment' does not 
     include--
       ``(i) any transaction for which the President determines 
     the value is de minimis;
       ``(ii) any category of transactions that the President 
     determines is in the national interest of the United States, 
     as may be defined by the President through regulations;
       ``(iii) the acquisition by a United States person of a 
     multinational corporation that is not headquartered in a 
     country of concern but has subsidiaries or other assets 
     located in a country of concern;
       ``(iv) basic research collaboration, including open source 
     research;
       ``(v) sharing of publicly available know-how, including in 
     standards organizations related to a country of concern; or
       ``(vi) any transaction that occurred before the effective 
     date of regulations prescribed in accordance with section 
     806.
       ``(5) Export administration regulations.--The term `Export 
     Administration Regulations' has the meaning given that term 
     in section 1742 of the Export Control Reform Act of 2018 (50 
     U.S.C. 4801).
       ``(6) National critical technology.--The term `national 
     critical technology' means a technology that--
       ``(A) relates to semiconductors, artificial intelligence, 
     or quantum computing; and
       ``(B) if the technology were produced in the United States, 
     would be--
       ``(i)(I) included on the Commerce Control List maintained 
     by the Bureau of Industry and Security and set forth in 
     Supplement No. 1 to part 774 of the Export Administration 
     Regulations; or
       ``(II) identified as an emerging and foundational 
     technology pursuant to section 1758 of the Export Control 
     Reform Act of 2018 (50 U.S.C. 4817); and
       ``(ii) subject to the requirement for a license under the 
     Export Administration Regulations for a United States person 
     to export the technology to a country of concern.
       ``(7) United states.--The term `United States' means the 
     several States, the District of Columbia, and any territory 
     or possession of the United States.
       ``(8) United states person.--The term `United States 
     person' means--
       ``(A) an individual who is a citizen or national of the 
     United States or alien admitted for permanent residence in 
     the United States; and
       ``(B) any corporation, partnership, or entity organized 
     under the laws of the United States or the laws of any 
     jurisdiction within the United States.

     ``SEC. 802. ADMINISTRATION OF INVESTMENT NOTIFICATION 
                   AUTHORITY.

       ``The President shall delegate the authorities and 
     functions under this title to the Assistant Secretary of the 
     Treasury for Investment Security.

     ``SEC. 803. MANDATORY NOTIFICATION OF COVERED INVESTMENTS.

       ``(a) Mandatory Notification.--
       ``(1) In general.--Subject to regulations prescribed by the 
     President in accordance with section 806, on and after the 
     effective date of such regulations, a United States person 
     that plans to engage in a covered investment shall submit to 
     the President a complete written notification of the 
     investment not later than 15 days after the date of the start 
     of the covered investment.
       ``(2) Inspection of notification.--The President shall--
       ``(A) upon receipt of a notification under paragraph (1), 
     promptly inspect the notification for completeness; and
       ``(B) if the notification is incomplete, promptly inform 
     the United States person that submits the notification that 
     the notification is not complete and provide an explanation 
     of relevant material respects in which the notification is 
     not complete.
       ``(b) Confidentiality of Information.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     information or documentary material and any information or 
     materials derived from such information or documentary 
     materials filed with the President pursuant to this section 
     shall be exempt from disclosure under section 552 of title 5, 
     United States Code, and no such information or documentary 
     material may be made public.
       ``(2) Exceptions.--The exemption from disclosure provided 
     by paragraph (1) shall not prevent the disclosure of the 
     following:
       ``(A) Information relevant to any administrative or 
     judicial action or proceeding.
       ``(B) Information to the chairman and ranking member of the 
     appropriate congressional committees.
       ``(C) Information important to the national security 
     analysis or actions of the President to any domestic 
     governmental entity, or to any foreign governmental entity of 
     a United States ally or partner, under the exclusive 
     direction and authorization of the President, only to the 
     extent necessary for national security purposes, and subject 
     to appropriate confidentiality and classification 
     requirements.
       ``(D) Information that the parties have consented to be 
     disclosed to third parties.

     ``SEC. 804. ANNUAL REPORT.

       ``(a) In General.--Not later than one year after the date 
     on which the regulations required by section 806 take effect, 
     and annually thereafter, the President shall submit to the 
     appropriate congressional committees a report describing, for 
     the year preceding submission of the report, the 
     notifications received under section 803(a).
       ``(b) Form of Report.--The report required by subsection 
     (a) shall be submitted in unclassified form, but may include 
     a classified annex.

     ``SEC. 805. PENALTIES AND ENFORCEMENT.

       ``(a) Unlawful Acts.--Subject to regulations prescribed by 
     the President in accordance with section 806, the following 
     shall be unlawful:
       ``(1) Failing to submit a notification under section 803(a) 
     with respect to a covered investment.
       ``(2) Making a material misstatement or to omit a material 
     fact in any information submitted to the President under this 
     title.
       ``(b) Civil Penalties.--A civil penalty may be imposed on 
     any person that commits an unlawful act described in 
     subsection (a) in an amount not to exceed the greater of--
       ``(1) $250,000; or
       ``(2) an amount that is twice the amount of the covered 
     investment that is the basis of the violation with respect to 
     which the penalty is imposed.

     ``SEC. 806. REQUIREMENT FOR REGULATIONS.

       ``(a) In General.--Not later than 12 months after the date 
     of the enactment of this title, the President shall finalize 
     regulations to carry out this title.
       ``(b) Elements.--Regulations prescribed to carry out this 
     title--
       ``(1) shall include specific examples of the types of 
     investments that will be considered to be covered 
     investments;
       ``(2) shall establish a de minimis value for transactions 
     that will not be considered to be covered investments under 
     section 801(3)(B)(i); and
       ``(3) may include exceptions to the definition of `national 
     critical technology' for technologies the President 
     determines do not pose a risk to the national security of the 
     United States.
       ``(c) Requirements for Certain Regulations.--The President 
     shall prescribe regulations further defining the terms used 
     in this title, including `covered investment' and `covered 
     foreign entity'.

     ``SEC. 807. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--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.
       ``(b) Hiring Authority.--The Assistant Secretary of the 
     Treasury for Investment Security 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). The primary responsibility of positions authorized 
     under the preceding sentence shall be to administer this 
     title.

     ``SEC. 808. EFFECTIVE DATE.

       ``The notification requirements and associated penalties 
     provided for under this title shall take effect on the date 
     on which all regulations have been prescribed to carry out 
     this title in accordance with section 806.

     ``SEC. 809. EFFECT ON INVESTMENT, TRADE, AND OTHER LAWS.

       ``(a) Rules of Construction.--Nothing in this title may be 
     construed--
       ``(1) to restrain or deter foreign investment in the United 
     States, United States investment abroad, or trade in goods or 
     services, if such investment and trade do not pose a risk to 
     the national security of the United States; or
       ``(2) to alter or affect the authorities or requirements 
     under the Export Control Reform Act of 2018 (50 U.S.C. 4801 
     et seq.).

[[Page S5910]]

       ``(b) International Emergency Economic Powers Act.--The 
     President may not use authorities under the International 
     Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) to 
     establish a mechanism for reviewing, screening, or 
     prohibiting outbound investment other than the mechanism 
     established by this title.''.
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