Foreign Investment and Economic Security Act of 2017

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Foreign Investment and Economic 
Security Act of 2017''.

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 and economic 
                policies;
                    ``(E) the effect on the public health, safety, the 
                environment, 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) The Secretary of Energy.
                    ``(G) The Secretary of Transportation.
                    ``(H) If the President determines that the covered 
                transaction may affect the agricultural sector, 
                including food safety, the Secretary of Agriculture.
                    ``(I) 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).

SEC. 4. ADDITIONAL REVISIONS TO DEFINITIONS.

    Section 721(a) of the Defense Production Act of 1950 (50 U.S.C. 
App. 2170(a)) is amended--
            (1) in paragraph (4)--
                    (A) by striking ``by a foreign government'' and 
                inserting the following: ``by--
                    ``(A) a foreign government'';
                    (B) by striking the period and inserting ``; or''; 
                and
                    (C) by adding at the end the following:
                    ``(B) a person with access, directly or indirectly, 
                to below-market loans or other financing from a foreign 
                government.''; and
            (2) in paragraph (6)--
                    (A) by striking ``virtual, so vital'' and inserting 
                the following: ``virtual--
                    ``(A) so vital'';
                    (B) by striking the period and inserting ``; or''; 
                and
                    (C) by adding at the end the following:
                    ``(B) in a critical infrastructure sector, as 
                determined by the Secretary of Homeland Security 
                pursuant to the Presidential Policy Director titled 
                `Presidential Policy Directive--Critical Infrastructure 
                Security and Resilience' (Feb. 12, 2013).''.

Summary: Foreign Investment and Economic Security Act of 2017 This bill amends the Defense Production Act of 1950 to provide for: (1) national security reviews of transactions involving the construction of a new facility in the United States by any foreign person. And (2) net US benefit reviews of new construction, mergers, acquisitions, or takeovers by or with a foreign person. The bill makes net benefit reviews mandatory for transactions that meet specified Clayton Act requirements. The Committee on Foreign Investment in the United States (CFIUS) shall consider a transaction's effect on: (1) employment, resource processing, utilization of parts and services produced in or imported into the United States, and exports, (2) industrial efficiency, technological development, technology transfers, and product innovation, (3) domestic or foreign competition, (4) compatibility with national industrial and economic policies. And (5) public health, safety, and the environment. In the case of a net benefit determination concerning a foreign government-influenced transaction, the CFIUS must consider: the governance and commercial orientation of the foreign person engaging in such transaction. The extent to which the foreign person is owned, controlled, or influenced by the foreign government. And adherence to US law and corporate governance standards, engagement of the foreign country with the Securities and Exchange Commission and the Public Company Accounting Oversight Board, and the likelihood of commercial operation. The bill prohibits transactions that the President determines are not of net US benefit and bars judicial review of such determinations. The bill also revises the composition of the CFIUS for the purpose of carrying out net benefit determinations. The term quot, foreign government-controlled transactionquot. Is revised to include a person with access to below-market loans or other financing from a foreign government.