II 

109TH CONGRESS 

2D SESSION S. 2335 

To clarify the role of the Director of National Intelligence, amend the Defense 

Production Act of 1950 to clarify the notification and investigation 

requirements, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 28, 2006 

Mr. BAYH introduced the following bill; which was read twice and referred to 

the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To clarify the role of the Director of National Intelligence, 

amend the Defense Production Act of 1950 to clarify 

the notification and investigation requirements, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Smart and Secure For5 eign Investment Act’’. 


rfake on PROD1PC77 with BILLS
2 

•S 2335 IS

1 SEC. 2. DIRECTOR OF NATIONAL INTELLIGENCE. 

2 Section 102A(a) of the National Security Act of 1947 

3 (50 U.S.C 403–1(a)) is amended by adding at the end 

4 the following: 

5 ‘‘(3) The Director of National Intelligence shall— 

6 ‘‘(A) assist the President in conducting inves7 tigations under section 721(b) of the Defense Pro8 duction Act of 1950 (50 U.S.C. App. 2170(b); 

9 ‘‘(B) serve as a member of the Committee on 

10 Foreign Investment in the United States (or any 

11 successor committee); and 

12 ‘‘(C) certify to the President and the Com13 mittee that there are no national security implica14 tions in connection with a proposed merger, acquisi15 tion, or takeover described in section 721(b) of the 

16 Defense Production Act of 1950 before the proposed 

17 merger, acquisition, or takeover is reviewed by the 

18 Committee.’’. 

19 SEC. 3. DEFENSE PRODUCTION ACT. 

20 (a) IN GENERAL.—Section 721 of the Defense Pro21 duction Act of 1950 (50 U.S.C. App. 2170) is amended— 

22 (1) by redesignating subsections (g) through (k) 

23 as subsections (i) and (m), respectively; and 

24 (2) by inserting after subsection (f) the fol25 lowing: 

26 ‘‘(g) NOTIFICATION AND INVESTIGATION.— 


rfake on PROD1PC77 with BILLS
3 

•S 2335 IS

1 ‘‘(1) NOTIFICATION.— 

2 ‘‘(A) IN GENERAL.—Any entity described 

3 in subparagraph (B) shall notify the President 

4 at least 60 days before a proposed merger, ac5 quisition, or takeover described in subparagraph 

6 (B)(ii). 

7 ‘‘(B) ENTITY DESCRIBED.—An entity de8 scribed in this subparagraph is an entity that— 

9 ‘‘(i) is controlled by, or acting on be10 half of, a foreign government; and 

11 ‘‘(ii) seeks to engage in a merger, ac12 quisition, or takeover of a United States 

13 entity or any other entity that has energy 

14 assets valued at $1,000,000,000 or more 

15 or that operates a critical infrastructure, if 

16 that merger, acquisition, or takeover could 

17 result in control of a person engaged in 

18 interstate commerce in the United States 

19 that could affect the national security of 

20 the United States. 

21 ‘‘(2) INVESTIGATION.—A mandatory investiga22 tion under subsection (b) shall be required in the 

23 case of a merger, acquisition, or takeover described 

24 in paragraph (1)(B)(ii) by an entity described in 

25 paragraph (1)(B). 


rfake on PROD1PC77 with BILLS
4 

•S 2335 IS

1 ‘‘(h) PRESIDENT’S DESIGNEE DEFINED.—In this 

2 section, the term ‘President’s designee’ means the Sec3 retary of Commerce, the Secretary of Defense, the Sec4 retary of Homeland Security, the Secretary of State, the 

5 Secretary of the Treasury, the Attorney General, the Di6 rector of National Intelligence, and appropriate employees 

7 of the Executive Office of the President.’’. 

8 (b) NOTIFICATION.—Section 721(i) of the Defense 

9 Production Act of 1950 (50 U.S. C. App. 2170(i)), as re10 designated by subsection (a)(1), is amended— 

11 (1) by striking ‘‘The President’’ and inserting 

12 the following: ‘‘(1) REPORT ON ACTION.—The Presi13 dent’’; and 

14 (2) by adding at the end the following: 

15 ‘‘(2) REPORT ON NOTIFICATION.—The Presi16 dent shall immediately transmit to the Secretary of 

17 the Senate and the Clerk of the House of Represent18 atives and to appropriate State officials written noti19 fication as soon as the President receives a notifica20 tion under subsection (b) or (g). 

21 ‘‘(3) PUBLIC HEARINGS.—The President shall 

22 hold public hearings on any proposed merger, acqui23 sition, or takeover described in subsection (b) or 

24 (g)(1).’’. 


rfake on PROD1PC77 with BILLS
5 

•S 2335 IS

1 (c) FACTORS TO BE CONSIDERED.—Section 721(f) 

2 of the Defense Production Act of 1950 (50 U.S.C. App. 

3 2170(f)) is amended— 

4 (1) by striking ‘‘and’’ at end of paragraph (4); 

5 (2) by striking the period at the end of para6 graph (5) and inserting ‘‘;’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(6) the robust and expanding defense capabili9 ties of the country in which the acquiring entity is 

10 located; and 

11 ‘‘(7) the nature of the bilateral relationship of 

12 the United states with the country in which the ac13 quiring entity is located.’’. 

Æ 


rfake on PROD1PC77 with BILLS