[Senate Report 114-393]
[From the U.S. Government Publishing Office]


						Calendar No. 703


114th Congress }					{ Report
 2d Session    }                  SENATE                { 114-393
_______________________________________________________________________
                                    
                                                     


                  SELECTUSA AUTHORIZATION ACT OF 2016

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 3097

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                December 6, 2016.--Ordered to be printed
                
                
                               ___________
                               
                               
                   U.S. GOVERNMENT PUBLISHING OFFICE
                          WASHINGTON : 2016
                
                
              
                
                
                
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                    one hundred fourteenth congress
                             second session

                   JOHN THUNE, South Dakota, Chairman
 ROGER F. WICKER, Mississippi         BILL NELSON, Florida
 ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
 MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
 KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
 TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
 DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
 JERRY MORAN, Kansas                  ED MARKEY, Massachusetts
 DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
 RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
 DEAN HELLER, Nevada                  JOE MANCHIN, West Virginia
 CORY GARDNER, Colorado               GARY PETERS, Michigan
 STEVE DAINES, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
           Christopher Day, Democratic Deputy Staff Director
                 Clint Odom, Democratic General Counsel











                                                       Calendar No. 703
114th Congress }                                            { Report
                                 SENATE
 2d Session    }                                            { 114-393

======================================================================
 
                  SELECTUSA AUTHORIZATION ACT OF 2016

                                _______
                                

                December 6, 2016.--Ordered to be printed

                                _______
                                

Mr. Thune, from the Committee on Commerce, Science, and Transportation, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 3097]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 3097) to establish the 
SelectUSA program, and for other purposes, having considered 
the same, reports favorably thereon with an amendment (in the 
nature of a substitute) and recommends that the bill (as 
amended) do pass.

                          Purpose of the Bill

    The purpose of S. 3097 is to authorize an existing program 
within the International Trade Administration (ITA) at the 
Department of Commerce known as the SelectUSA program. And in 
response to an investigation by the Office of Inspector General 
of the Department of Commerce that revealed travel and other 
improprieties by the former Under Secretary for International 
Trade, Stefan Selig, the purpose also is to require newly 
appointed political appointees of the Department of Commerce to 
undergo training on official travel and office renovation 
policies. The SelectUSA program would continue to coordinate 
investment-related resources across more than 20 Federal 
agencies and operate as a partner to State and local economic 
development efforts to promote the United States as the best 
market for investment in the world. S. 3097 would codify the 
structure, missions, and functions of the SelectUSA program, 
among other things.

                          Background and Needs

    On June 15, 2011, President Obama issued Executive Order 
13577, which established SelectUSA, an initiative to attract 
more foreign direct investment (FDI) in the United States.\1\ 
According to the Obama Administration, the Federal Government 
lacked the centralized investment promotion infrastructure and 
resources to attract business investment that is often found in 
other industrialized countries.
---------------------------------------------------------------------------
    \1\Exec. Order No. 13577, at https://www.whitehouse.gov/the-press-
office/2011/06/15/executive-order-13577-selectusa-initiative.
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    SelectUSA is housed within ITA at the Department of 
Commerce. The aim of SelectUSA is to make attracting FDI as 
important a component of U.S. foreign policy as promoting 
exports.\2\ SelectUSA has designated global teams led by U.S. 
ambassadors in 32 key countries to encourage foreign investment 
into the United States and has established a ``coordinated 
process'' to connect prospective investors with senior U.S. 
officials.\3\ SelectUSA offers a number of tools for foreign 
investors looking to invest in the United States, including a 
list of various State and Federal programs that may be 
available to foreign investors.\4\
---------------------------------------------------------------------------
    \2\Congressional Research Service Report RS21857, Foreign Direct 
Investment in the United States: An Economic Analysis, by James K. 
Jackson.
    \3\Ibid.
    \4\Ibid.
---------------------------------------------------------------------------
    Although the United States is the leading single 
destination of FDI, it faces competition from other 
industrialized economies, as well as developing economies. In 
2014, the share of worldwide investment in the United States 
dropped to 21 percent, down from 39 percent in 2000.\5\ Today, 
virtually every economy in the world has a national institution 
dedicated to investment promotion. S. 3097 would respond to the 
need for a sustained and concerted effort to bring the United 
States closer to the level of investment promotion agencies of 
other nations that are competing for job-creating business 
investment in the global economy.
---------------------------------------------------------------------------
    \5\Organization for International Investment, Foreign Direct 
Investment in the United States, 2016, at http://ofii. org/sites/ 
default/ files/Foreign %20 Direct% 20Investment %20in% 20the% 20United% 
20States% 202016%20Report.pdf.
---------------------------------------------------------------------------
    SelectUSA's mission is to facilitate job-creating business 
investment into the United States and raise awareness of the 
critical role that FDI plays in the U.S. economy.\6\ The 
initiative helps companies of all sizes: find the information 
they need to make decisions; connect to the right people at the 
local level; and navigate the Federal regulatory system.\7\ 
According to its website, since its inception, SelectUSA has 
facilitated over $23 billion in investment for the United 
States and will provide services to nearly 1,000 investors and 
economic development organizations.\8\
---------------------------------------------------------------------------
    \6\About SelectUSA, last visited Oct. 7, 2016, https://www. 
selectusa. gov/about-selectusa.
    \7\Ibid.
    \8\Ibid.
---------------------------------------------------------------------------
    SelectUSA's current executive director is Vinai 
Thummalapally, a former U.S. ambassador to Belize, who 
coordinates activities both within the Department of Commerce 
and with other Executive departments and agencies that have 
activities relating to business investment decisions.
    The Executive Order establishing SelectUSA requires the 
Department of Commerce to provide funding and administrative 
support through resources and staff to the extent permitted by 
law and within existing appropriations. The Executive Order 
also established the Federal Interagency Investment Working 
Group (Working Group), which is convened and chaired by the 
executive director of SelectUSA, in coordination with the 
Director of the National Economic Council. The Working Group 
consists of senior officials from the Treasury, Department of 
State, Department of Defense, Department of Justice, Department 
of the Interior, Department of Agriculture, Department of 
Commerce, Department of Labor, Department of Veterans Affairs, 
Department of Health and Human Services, Department of Housing 
and Urban Development, Department of Transportation, Department 
of Energy, Department of Education, Department of Homeland 
Security, Environmental Protection Agency, Small Business 
Administration, Export-Import Bank of the United States, Office 
of the U.S. Trade Representative, Domestic Policy Council, 
National Economic Council, National Security Staff, Office of 
Management and Budget, and Council of Economic Advisers. The 
Working Group coordinates activities to promote business 
investment and respond to specific issues that affect business 
decisions. The Department of Commerce provides funding and 
administrative support for the Working Group to the extent 
permitted by law and within existing appropriations.

                         Summary of Provisions

    S. 3097 would authorize an existing program within the ITA 
at the Department of Commerce known as the SelectUSA program. 
Launched by the Obama Administration on June 15, 2011,\9\ the 
SelectUSA program currently coordinates investment-related 
resources across more than 20 Federal agencies and operates as 
a partner to State and local economic development efforts to 
promote the United States as the best market for investment in 
the world. S. 3097 would, among other things: establish the 
position of Executive Director for the SelectUSA program; set 
forth the mission and functions of SelectUSA; and establish a 
Federal Interagency Investment Working Group comprised of 
senior officials from relevant agencies that would coordinate 
activities to promote business investment.
---------------------------------------------------------------------------
    \9\Exec. Order No. 13577, 2011.
---------------------------------------------------------------------------
    In fiscal year (FY) 2016, SelectUSA received funding of $10 
million within the amount appropriated for ITA. For FY 2017, 
ITA requested $20 million for SelectUSA, a $10 million 
increase.\10\ S. 3097 would authorize $15 million for SelectUSA 
for each of FYs 2017 through 2021.
---------------------------------------------------------------------------
    \10\Department of Commerce,  International Trade Administration 
Budget Estimates, Fiscal Year 2017, Congressional Submission, 2016, at 
http://www. osec. doc.gov/bmi/ budget/FY17CBJ/ ITA% 20FY% 202017% 
20CBJ%20 Final% 20not 508.pdf.
---------------------------------------------------------------------------

                          Legislative History

    S. 3907 was introduced on June 23, 2016, by Senator Schatz 
and was referred to the Committee on Commerce, Science, and 
Transportation of the Senate. The bill is cosponsored by 
Senators Nelson, Heller, and Coons. On September 21, 2016, the 
Committee met in open Executive Session and, by voice vote, 
ordered S. 3097 to be reported with an amendment (in the nature 
of a substitute).
    Senators Rubio, Cruz, and Fischer requested to be recorded 
in opposition to S. 3097. The Committee approved an amendment 
by Senator Thune, which was cosponsored by Senators Heller, 
Johnson, and Ayotte, that sets forth training requirements for 
political appointees of the Department of Commerce, which were 
originally recommended by the Inspector General of the 
Department of Commerce after an investigation revealed travel 
and other improprieties by the former Under Secretary of 
Commerce for International Trade, Stefan Selig.\11\
---------------------------------------------------------------------------
    \11\Investigation into Travel & Other Improprieties in the Office 
of a Politically Appointed Official, Inv. No. 15-044, Dep't of 
Commerce, September 2016, (Final), at https://www. oig. doc.gov/ 
OIGPublications/ 15-0444.pdf.
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                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 3097--SelectUSA Authorization Act of 2016

    Summary: S. 3097 would establish the SelectUSA program 
within the Department of Commerce (DOC) to facilitate business 
investment in the United States. The bill would authorize the 
appropriation of $15 million a year over the 2017-2021 period 
for the operation of that program. S. 3097 would direct DOC to 
annually certify that its employees who are political 
appointees have received training on various government 
policies. The bill also would require DOC to issue reports on 
certain government office renovations and steps the department 
has taken to empower whistleblowing. Lastly, the bill would 
require the Government Accountability Office (GAO) to submit a 
report to the Congress with recommendations on the 
effectiveness of the SelectUSA program.
    CBO estimates that implementing this bill would cost $67 
million over the 2017-2021 period, assuming appropriation of 
the authorized amounts. Enacting S. 3097 would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    CBO estimates that enacting S. 3097 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    S. 3097 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 3097 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                              --------------------------------------------------
                                                                2017    2018    2019    2020    2021   2017-2021
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level................................      15      15      15      15      15        75
Estimated Outlays............................................       8      14      15      15      15        67
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted by the end of calendar year 2016, that the 
authorized amounts will be appropriated each year, and that 
outlays will follow the historical rate of spending for this 
program.
    S. 3097 would authorize the appropriation of $15 million 
annually over the 2017-2021 period for DOC to implement the 
SelectUSA program. The SelectUSA program was established in 
2011 and is currently operated by the International Trade 
Administration within DOC. The program's budget was $10 million 
in 2016. Based on an analysis of information from DOC, CBO 
estimates that implementing S. 3097 would cost $67 million over 
the 2017-2021 period for the operations of the SelectUSA 
program, assuming appropriations of the specified amounts. The 
reporting and certification requirements would cost less than 
$500,000 each year. Based on the costs of similar reports 
conducted by GAO, CBO estimates that the increased costs to GAO 
to conduct a study and issue a report on the SelectUSA program 
would be insignificant.
    Pay-As-You-Go considerations: None.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting S. 3097 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    Intergovernmental and private-sector impact: S. 3097 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Stephen Rabent; Impact 
on state, local, and tribal governments: Rachel Austin; Impact 
on the private sector: Logan Smith.
    Estimated approved by: H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                           Regulatory Impact

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       number of persons covered

    A key measure of the number of persons covered by 
authorizing a program that encourages FDI is the number of 
people in the United States who are directly employed by U.S. 
affiliates of international companies.\12\ As of 2014, the most 
recent data available, nearly 6.4 million people in the United 
States were directly employed by U.S. affiliates of 
international companies. These U.S. affiliates account for more 
than one-quarter of U.S. goods exported and spent $57 billion 
on U.S. research and development that year.\13\
---------------------------------------------------------------------------
    \12\Letter from Department of Commerce General Counsel, Kelly R. 
Welsh, to Chairman John Thune, U.S. Senate Commerce, Science & 
Transportation Committee, 2016, at https://ogc.commerce.gov/sites/
ogc.commerce.gov/files/media/files/2016/
selectusa_authorization_act_of_2016.pdf.
    \13\Ibid.
---------------------------------------------------------------------------

                            economic impact

    Section 2 of the bill would provide that the mission of 
SelectUSA is to facilitate business investment in the United 
States in order to create jobs, spur economic growth, and 
promote U.S. competitiveness. FDI helps drive economic growth, 
job creation, innovation, and exports. The activities of the 
SelectUSA program would contribute to the stock of FDI in the 
United States, which was $2.9 trillion on a historical-cost 
basis in 2014.\14\
---------------------------------------------------------------------------
    \14\Department of Commerce, Economics & Statistics Administration, 
Foreign Direct Investment in the United States: Update to 2013 Report, 
June 20, 2016, at http://esa.gov/reports/foreign-direct-investment-
united-states-update-2013-report.
---------------------------------------------------------------------------

                                privacy

    S. 3907 would not have any adverse impact on the personal 
privacy of individuals.

                               paperwork

    The bill would not increase paperwork requirements for 
private individuals or businesses. The bill would require 
several reports and notifications from the Federal Government. 
Section 4 of the bill would require annual reports and 
notifications to Congress on SelectUSA's activities during the 
preceding FY. Section 5 of the bill would require an assessment 
by the Government Accountability Office of the effectiveness of 
SelectUSA in increasing, encouraging, and supporting FDI in the 
United States.
    Section 6 of the bill would require the Secretary of 
Commerce, at the beginning of each FY, to certify to Congress 
that each newly appointed political official of the Department 
of Commerce has received training on key regulations and 
policies governing official travel, among other things, as well 
as a report on renovations to the office suite of the Under 
Secretary for International Trade not later than 30 days after 
the date of enactment of the Act. S. 3097 also would require 
the Secretary of Commerce to submit a report to Congress on the 
steps the Secretary has taken to encourage whistleblowing by 
subordinates who observe instances of potential regulatory, 
policy, or rule violations.

                   Congressionally Directed Spending

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
provisions contained in the bill, as reported, meet the 
definition of congressionally directed spending items under the 
rule.

                      Section-by-Section Analysis


Section 1. Short title.

    This section would provide that the Act may be cited as the 
``SelectUSA Authorization Act of 2016''.

Section 2. Establishment of SelectUSA.

    This section would establish in the Department of Commerce 
the SelectUSA program as a ``Government-wide program to attract 
and retain investment in the United States economy.'' It also 
would direct the Secretary of Commerce to designate a senior 
staff member to be the executive director of SelectUSA, who 
shall coordinate activities relating to business investment 
decisions within the Department of Commerce and with other 
Federal agencies with responsibility for such activities.
    This section would set forth the mission of SelectUSA as 
facilitating business investment in the United States in order 
to create jobs, spur economic growth, and promote U.S. 
competitiveness, among other things. It also would set forth 
the functions of SelectUSA, which would be to coordinate 
outreach and engagement by the Federal Government to promote 
the United States as the premiere location to operate a 
business, and to endeavor to coordinate and avoid duplication 
with other Federal agencies, among other things. This section 
also would require SelectUSA to report periodically to the 
President, through the National Economic Council, the Domestic 
Policy Council, and the National Security Staff, on outreach 
activities of SelectUSA.
    This section also would emphasize increased opportunities 
for rural areas and smaller States, requiring SelectUSA to 
endeavor to increase FDI opportunities in such areas. Among 
other things, it would require SelectUSA to endeavor to hold 
conferences and events in rural areas and smaller States, when 
practicable.
    Lastly, this section would require all Federal agencies 
with responsibility for activities relating to business 
investment decisions to cooperate with SelectUSA, as requested 
by the executive director, to support the objectives of 
SelectUSA.

Section 3. Federal Interagency Investment Working Group.

    This section would establish the Federal Interagency 
Investment Working Group, referred to as the ``Working Group,'' 
which would be convened and chaired by the executive director 
of SelectUSA, in coordination with the Director of the National 
Economic Council. The Working Group would consist of senior 
officials from agencies represented on the Trade Promotion 
Coordinating Committee, an interagency committee established 
under the Export Enhancement Act of 1992 (Public Law 102-429; 
106 Stat. 2186) to provide a unifying framework to coordinate 
the export promotion and export financing activities of the 
U.S. Government.\15\ The functions of the Working Group would 
be to coordinate activities to promote business investment and 
respond to specific issues that affect business investment 
decisions.
---------------------------------------------------------------------------
    \15\The Trade Promotion Coordinating Committee, Helping U.S. 
Companies Export, last visited Oct. 7, 2016, at http://2016.export.gov/
advocacy/eg.
---------------------------------------------------------------------------

Section 4. Reports and notifications to Congress.

    This section would require that, not later than December 31 
of each year, the Secretary of Commerce submit to Congress a 
report on the activities of SelectUSA during the preceding FY. 
The report would be required to include a description of the 
outreach activities of SelectUSA, a statement of the funds used 
by SelectUSA, and an assessment of the number of foreign firms 
that located in the United States using the services provided 
by SelectUSA, among other things.

Section 5. Government Accountability Office assessment of effectiveness 
        of SelectUSA.

    This section would require the Comptroller General to 
submit to Congress, not later than 1 year after the date of 
enactment, a report assessing the effectiveness of SelectUSA in 
increasing, encouraging, and supporting FDI in the United 
States. The report would be required to include recommendations 
for ways SelectUSA may increase FDI in the United States and 
better serve rural areas and smaller States, among other 
things.

Section 6. Requirements for political appointees of Department of 
        Commerce.

    This section would require the Secretary of Commerce, at 
the beginning of each FY, to certify to Congress that each 
newly appointed political official of the Department of 
Commerce has received training on: regulations and policies 
governing the use of subordinates for non-official business; 
restrictions against the use of the political appointee's title 
or position for personal gain or creating the appearance of 
such use; key regulations and policies governing official 
travel; and the advisability of monitoring renovation work done 
to their office suites to ensure the cost of such work does not 
contravene congressional budget restrictions.
    This section also would require the Secretary of Commerce 
to submit to Congress, not later than 30 days after the date of 
enactment, a written report regarding the renovations to the 
office suite of the Under Secretary for International Trade 
regarding whether expenditures associated with those 
renovations exceeded the $5,000 limit imposed by Congress and 
whether the expenditures contravened the Anti-Deficiency Act.
    This section also would require the Secretary of Commerce 
to certify to Congress, not later than 30 days after the date 
of enactment, that the Secretary has implemented procedures 
requiring thorough documentation to support the categorization 
of any work performed on an office suite of a politically 
appointed official as general or routine maintenance, or 
renovation work that is subject to congressional budget 
restrictions.
    This section also would require the Secretary of Commerce 
to submit to Congress, not later than 30 days after the date of 
enactment, a report on the steps the Secretary has taken to 
make subordinates working for politically appointed officials 
feel empowered to report instances of potential regulatory, 
policy, or rule violations to their superiors or to the 
Inspector General of the Department of Commerce.

Section 7. Authorization of appropriations for SelectUSA.

    This section would authorize to be appropriated $15 million 
for each of FYs 2017 through 2021 to carry out the SelectUSA 
program.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.

                                  [all]