[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5581 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5581
To amend the Defense Production Act of 1950 to provide for a net
benefit review of certain covered transactions, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 18, 2014
Ms. DeLauro introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Defense Production Act of 1950 to provide for a net
benefit review of certain covered transactions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Foreign Investment and Economic
Security Act of 2014''.
SEC. 2. REVIEW OF GREENFIELD INVESTMENTS.
Section 721(a)(3) of the Defense Production Act of 1950 (50 U.S.C.
App. 2170(a)(3)) is amended--
(1) by striking ``means any merger'' and inserting the
following: ``means--
``(A) any merger'';
(2) by striking the period and inserting ``; and''; and
(3) by adding at the end the following:
``(B) any construction of a new facility in the
United States by any foreign person.''.
SEC. 3. NET BENEFIT REVIEW.
(a) In General.--Section 721 of the Defense Production Act of 1950
(50 U.S.C. App. 2170) is amended--
(1) in subsection (b)--
(A) in the heading for such subsection, by
inserting ``and Net Benefit'' after ``National
Security'';
(B) in paragraph (1)--
(i) in the heading for such paragraph, by
inserting ``and net benefit'' after ``National
security'';
(ii) in subparagraph (A), by striking
clauses (i) and (ii) and inserting the
following:
``(i) shall--
``(I) review the covered
transaction to determine the effects of
the transaction on the national
security of the United States; and
``(II) consider the factors
specified in subsection (f) for such
purpose, as appropriate; and
``(ii) shall review the covered transaction
to determine whether such transaction is of net
benefit to the United States, as provided under
subsection (o).''; and
(iii) by adding at the end the following:
``(G) Mandatory net benefit review for certain
covered transactions.--The President and the Committee
shall initiate a net benefit review of a covered
transaction under subparagraph (A)(ii) if such
transaction meets the requirements of paragraphs (1)
and (2) of section 7A(a) of the Clayton Act (15 U.S.C.
18a(a)).''; and
(C) in paragraph (3)(A), by inserting ``national
security'' before ``review'' each place it appears in
the heading and text of such subparagraph; and
(2) by adding at the end the following:
``(o) Performance of Net Benefit Determination.--
``(1) Factors to be considered.--For purposes of carrying
out the net benefit determination under subsection
(b)(1)(A)(ii), the President, acting through the Committee,
shall consider--
``(A) the effect on the level of economic activity
in the United States on--
``(i) the level and quality of employment;
``(ii) resource processing;
``(iii) the utilization of parts and
services produced in the United States;
``(iv) the utilization of products, parts,
and services imported into the United States;
and
``(v) exports from the United States;
``(B) the effect of the proposed or pending
transaction on productivity, industrial efficiency,
technological development, technology transfers, and
product innovation in the United States;
``(C) the effect of the proposed or pending
transaction on competition within any industry in the
United States or between the United States and other
countries;
``(D) the compatibility of the proposed or pending
transaction with national industrial, economic, and
cultural policies;
``(E) the effect on the public health, safety, and
well-being of United States consumers;
``(F) in the case of a covered transaction that is
a foreign government-influenced transaction--
``(i) the governance and commercial
orientation of the foreign person engaging in
such transaction;
``(ii) how and the extent to which the
foreign person engaging in such transaction is
owned or controlled by a foreign government or
its conduct and operations are influenced by a
foreign government, including considering the
stated government policies of the country of
origin of the foreign person regarding
government support or policies relating to the
economic sector involved in such transaction;
``(iii) whether the foreign person engaging
in such transaction--
``(I) adheres to United States
standards of corporate governance
(including commitments to transparency
and disclosure, independent members of
the board of directors, independent
audit committees, and equitable
treatment of shareholders);
``(II) adheres to United States
laws and practices; and
``(III) is a foreign person of a
country whose government has adequately
engaged with the Securities and
Exchange Commission and the Public
Company Accounting Oversight Board in
order to promote and ensure adequate
transparency; and
``(iv) whether the foreign person engaging
in such transaction will likely operate on a
commercial basis if such transaction is
completed, including with regard to--
``(I) where to export;
``(II) where to process;
``(III) the participation of United
States citizens in its operations in
the United States and elsewhere;
``(IV) the impact of the investment
on productivity and industrial
efficiency in the United States;
``(V) support of on-going
innovation, research, and development
in the United States;
``(VI) sourcing patterns; and
``(VII) the appropriate level of
capital expenditures to maintain the
United States business in a globally
competitive position; and
``(G) such other factors as the Committee
determines appropriate.
``(2) Determining net benefit.--In making a net benefit
determination under subsection (b)(1)(A)(ii)--
``(A) judgments will be made both in measuring the
effects of a proposed or pending transaction in
relation to the relevant individual factors under
paragraph (1) and in measuring the aggregate net effect
after offsetting the negative effects, if any, against
the positive ones; and
``(B) a proposed or pending transaction will be
determined to be of net benefit to the United States
when the aggregate net effect is positive, regardless
of its extent over the short- and long-term.
``(3) Right to appeal; final determination.--
``(A) Appeal of determination.--If the Committee
makes a determination that the covered transaction will
not be of net benefit to the United States, the parties
to the covered transaction may, within the 30-day
period following such determination, submit additional
information to the Committee to demonstrate that the
transaction will be of net benefit to the United
States.
``(B) Final determination.--The Committee shall--
``(i) make a final determination of whether
the covered transaction will be of net benefit
to the United States before the end of the 30-
day period beginning on the date that
additional information is submitted pursuant to
subparagraph (A); and
``(ii) if such determination is that the
covered transaction will not be of net benefit
to the United States, refer such determination
to the President.
``(4) Certifications to congress.--Notwithstanding
subsection (b)(3), upon a final determination by the Committee
under this subsection, the chairperson and the head of the lead
agency shall make certifications to the Congress on the net
benefit determination that are as close as practicable to the
certifications required under subsection (b)(3) for the
national security review.
``(5) Action by president after net benefit review.--
``(A) In general.--If the Committee refers a
determination to the President pursuant to paragraph
(3)(ii), the President shall, within the 15-day period
beginning on the date of such referral, review such
determination and announce whether the President
determines the covered transaction is of net benefit to
the United States.
``(B) Factors to be considered.--For purposes of
making a determination under subparagraph (A), the
President shall consider, among other factors each of
the factors described in paragraph (1), as appropriate.
``(C) Prohibition of certain transactions.--If the
President, pursuant to subparagraph (A), determines
that a covered transaction is not of net benefit to the
United States, such covered transaction is prohibited.
``(D) Enforcement.--The President shall 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 paragraph.
``(E) Determinations nonreviewable.--A
determination of the President under this paragraph
shall not be subject to judicial review.
``(6) Committee membership for purposes of a net benefit
determination.--For purposes of carrying out the net benefit
determination under subsection (b)(1)(A)(ii) and this
subsection, the Committee shall be composed of the following
members or the designee of any such member:
``(A) The Attorney General of the United States.
``(B) The Secretary of Commerce.
``(C) The Secretary of Labor.
``(D) The Secretary of the Treasury.
``(E) The United States Trade Representative.
``(F) If the President determines that the covered
transaction may affect the agricultural sector,
including food safety, the Secretary of Agriculture.
``(G) If the President determines that the covered
transaction may affect the public health, including
food safety, the Secretary of Health and Human
Services.
``(7) Foreign government-influenced transaction defined.--
For purposes of this subsection, the term `foreign government-
influenced transaction' means any covered transaction where the
foreign person engaging in such transaction is owned,
controlled, or influenced, directly or indirectly, by a foreign
government.''.
(b) Rulemaking.--Not later than the end of the 180-day period
beginning on the date of the enactment of this Act, the President shall
issue regulations to carry out section 721(o) of the Defense Production
Act of 1950, as added by subsection (a).
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