S. 1677 

One Hundred Eleventh Congress 

of the 

United States of America 

AT THE FIRST SESSION 

Begun and held at the City of Washington on Tuesday, 

the sixth day of January, two thousand and nine 

An Act 

To reauthorize the Defense Production Act of 1950, 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; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Defense 

Production Act Reauthorization of 2009’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act 

is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Reauthorization of Defense Production Act of 1950. 

Sec. 3. Declaration of policy. 

Sec. 4. Priority in contracts and orders. 

Sec. 5. Designation of energy as a strategic and critical material. 

Sec. 6. Strengthening domestic capability. 

Sec. 7. Expansion of productive capacity and supply. 

Sec. 8. Definitions. 

Sec. 9. Voluntary agreements and plans of action for national defense. 

Sec. 10. Employment of personnel; appointment policies; nucleus executive reserve; 

use of confidential information by employees; printing and distribution 

of reports. 

Sec. 11. Defense Production Act Committee. 

Sec. 12. Annual report on impact of offsets. 

SEC. 2. REAUTHORIZATION OF DEFENSE PRODUCTION ACT OF 1950. 

(a) TERMINATION OF ACT.— 

(1) TERMINATION.—Section 717 of the Defense Production 

Act of 1950 (50 U.S.C. App. 2166) is amended— 

(A) by striking subsections (a) and (b) and inserting 

the following: 

‘‘(a) Title I (except section 104), title III, and title VII (except 

sections 707, 708, and 721) shall terminate on September 30, 2014, 

except that all authority extended under title III on or after the 

date of enactment of the Defense Production Act Reauthorization 

of 2009 shall be effective for any fiscal year only to such extent 

or in such amounts as are provided in advance in appropriations 

Acts. 

‘‘(b) Notwithstanding subsection (a), any agency created under 

a provision of law that is terminated under subsection (a) may 

continue in existence, for purposes of liquidation, for a period not 

to exceed 6 months, beginning on the date of termination of the 

provision authorizing the creation of such agency under subsection 

(a).’’; and 

(B) in subsection (c), by striking the second undesignated paragraph. 
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(2) REPEALS.—Titles II, IV, V, and VI of the Defense 

Production Act of 1950 (50 U.S.C. App. 2151 et seq., 2101 

et seq., 2121 et seq., and 2131 et seq.) are repealed. 

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 711 of the 

Defense Production Act of 1950 (50 U.S.C. App. 2161) is amended— 

(1) in subsection (a)— 

(A) in the first sentence, by striking ‘‘(including’’ and 

all that follows through ‘‘) by’’ and inserting ‘‘by’’; and 

(B) by striking ‘‘(a) AUTHORIZATION.—Except as provided in subsection (b), there’’ and inserting ‘‘There’’; and 

(2) by striking subsection (b). 

SEC. 3. DECLARATION OF POLICY. 

(a) FINDINGS.—Section 2 of the Defense Production Act of 1950 

(50 U.S.C. App. 2062) is amended to read as follows: 

‘‘SEC. 2. DECLARATION OF POLICY. 

‘‘(a) FINDINGS.—Congress finds that— 

‘‘(1) the security of the United States is dependent on 

the ability of the domestic industrial base to supply materials 

and services for the national defense and to prepare for and 

respond to military conflicts, natural or man-caused disasters, 

or acts of terrorism within the United States; 

‘‘(2) to ensure the vitality of the domestic industrial base, 

actions are needed— 

‘‘(A) to promote industrial resources preparedness in 

the event of domestic or foreign threats to the security 

of the United States; 

‘‘(B) to support continuing improvements in industrial 

efficiency and responsiveness; 

‘‘(C) to provide for the protection and restoration of 

domestic critical infrastructure operations under emergency 

conditions; and 

‘‘(D) to respond to actions taken outside of the United 

States that could result in reduced supplies of strategic 

and critical materials, including energy, necessary for 

national defense and the general economic well-being of 

the United States; 

‘‘(3) in order to provide for the national security, the 

national defense preparedness effort of the United States 

Government requires— 

‘‘(A) preparedness programs to respond to both 

domestic emergencies and international threats to national 

defense; 

‘‘(B) measures to improve the domestic industrial base 

for national defense; 

‘‘(C) the development of domestic productive capacity 

to meet— 

‘‘(i) essential national defense needs that can result 

from emergency conditions; and 

‘‘(ii) unique technological requirements; and 

‘‘(D) the diversion of certain materials and facilities 

from ordinary use to national defense purposes, when 

national defense needs cannot otherwise be satisfied in 

a timely fashion; 

‘‘(4) to meet the requirements referred to in this subsection, 

this Act provides the President with an array of authorities 

to shape national defense preparedness programs and to take 
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appropriate steps to maintain and enhance the domestic industrial base; 

‘‘(5) in order to ensure national defense preparedness, it 

is necessary and appropriate to assure the availability of 

domestic energy supplies for national defense needs; 

‘‘(6) to further assure the adequate maintenance of the 

domestic industrial base, to the maximum extent possible, 

domestic energy supplies should be augmented through reliance 

on renewable energy sources (including solar, geothermal, wind, 

and biomass sources), more efficient energy storage and distribution technologies, and energy conservation measures; 

‘‘(7) much of the industrial capacity that is relied upon 

by the United States Government for military production and 

other national defense purposes is deeply and directly influenced by— 

‘‘(A) the overall competitiveness of the industrial 

economy of the United States; and 

‘‘(B) the ability of industries in the United States, 

in general, to produce internationally competitive products 

and operate profitably while maintaining adequate research 

and development to preserve competitiveness with respect 

to military and civilian production; and 

‘‘(8) the inability of industries in the United States, especially smaller subcontractors and suppliers, to provide vital 

parts and components and other materials would impair the 

ability to sustain the Armed Forces of the United States in 

combat for longer than a short period. 

‘‘(b) STATEMENT OF POLICY.—It is the policy of the United 

States that— 

‘‘(1) to ensure the adequacy of productive capacity and 

supply, Federal departments and agencies that are responsible 

for national defense acquisition should continuously assess the 

capability of the domestic industrial base to satisfy production 

requirements under both peacetime and emergency conditions, 

specifically evaluating the availability of adequate production 

sources, including subcontractors and suppliers, materials, 

skilled labor, and professional and technical personnel; 

‘‘(2) every effort should be made to foster cooperation 

between the defense and commercial sectors for research and 

development and for acquisition of materials, components, and 

equipment; 

‘‘(3) plans and programs to carry out the purposes of this 

Act should be undertaken with due consideration for promoting 

efficiency and competition; 

‘‘(4) in providing United States Government financial 

assistance under this Act to correct a domestic industrial base 

shortfall, the President should give consideration to the creation 

or maintenance of production sources that will remain economically viable after such assistance has ended; 

‘‘(5) authorities under this Act should be used to reduce 

the vulnerability of the United States to terrorist attacks, and 

to minimize the damage and assist in the recovery from terrorist attacks that occur in the United States; 

‘‘(6) in order to ensure productive capacity in the event 

of an attack on the United States, the United States Government should encourage the geographic dispersal of industrial 

facilities in the United States to discourage the concentration 
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of such productive facilities within limited geographic areas 

that are vulnerable to attack by an enemy of the United States; 

‘‘(7) to ensure that essential national defense requirements 

are met, consideration should be given to stockpiling strategic 

materials, to the extent that such stockpiling is economical 

and feasible; and 

‘‘(8) in the construction of any industrial facility owned 

by the United States Government, in the rendition of any 

financial assistance by the United States Government for the 

construction, expansion, or improvement of any industrial 

facility, and in the production of goods and services, under 

this Act or any other provision of law, each department and 

agency of the United States Government should apply, under 

the coordination of the Federal Emergency Management 

Agency, when practicable and consistent with existing law and 

the desirability for maintaining a sound economy, the principle 

of geographic dispersal of such facilities in the interest of 

national defense.’’. 

SEC. 4. PRIORITY IN CONTRACTS AND ORDERS. 

Section 101 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2071) is amended by adding at the end the following: 

‘‘(d) The head of each Federal agency to which the President 

delegates authority under this section shall— 

‘‘(1) not later than 270 days after the date of enactment 

of the Defense Production Act Reauthorization of 2009, issue 

final rules, in accordance with section 553 of title 5, United 

States Code, that establish standards and procedures by which 

the priorities and allocations authority under this section is 

used to promote the national defense, under both emergency 

and nonemergency conditions; and 

‘‘(2) as appropriate and to the extent practicable, consult 

with the heads of other Federal agencies to develop a consistent 

and unified Federal priorities and allocations system.’’. 

SEC. 5. DESIGNATION OF ENERGY AS A STRATEGIC AND CRITICAL 

MATERIAL. 

Section 106 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2076) is amended— 

(1) by striking ‘‘such designation’’ and all that follows 

through ‘‘(1)’’ and inserting ‘‘such designation’’; 

(2) by striking ‘‘; or’’ and inserting a period; and 

(3) by striking paragraph (2). 

SEC. 6. STRENGTHENING DOMESTIC CAPABILITY. 

Section 107 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2077) is amended— 

(1) in subsection (a)— 

(A) by inserting ‘‘restore,’’ after ‘‘modernize,’’; and 

(B) by inserting ‘‘materials,’’ after ‘‘items,’’; and 

(2) in subsection (b)— 

(A) by striking paragraph (1); 

(B) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and 

(C) in paragraph (1), as so redesignated, by striking 

‘‘or critical technology items’’ and inserting ‘‘, critical technology items, essential materials, and industrial resources’’. 
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SEC. 7. EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY. 

Title III of the Defense Production Act of 1950 (50 U.S.C. 

App. 2091 et seq.) is amended to read as follows: 

‘‘TITLE III—EXPANSION OF 

PRODUCTIVE CAPACITY AND SUPPLY 

‘‘SEC. 301. PRESIDENTIAL AUTHORIZATION FOR THE NATIONAL 

DEFENSE. 

‘‘(a) EXPEDITING PRODUCTION AND DELIVERIES OR SERVICES.— 

‘‘(1) AUTHORIZED ACTIVITIES.—To reduce current or projected shortfalls of industrial resources, critical technology 

items, or essential materials needed for national defense purposes, subject to such regulations as the President may prescribe, the President may authorize a guaranteeing agency 

to provide guarantees of loans by private institutions for the 

purpose of financing any contractor, subcontractor, provider 

of critical infrastructure, or other person in support of production capabilities or supplies that are deemed by the guaranteeing agency to be necessary to create, maintain, expedite, 

expand, protect, or restore production and deliveries or services 

essential to the national defense. 

‘‘(2) PRESIDENTIAL DETERMINATIONS REQUIRED.—Except 

during a period of national emergency declared by Congress 

or the President, a loan guarantee may be entered into under 

this section only if the President determines that— 

‘‘(A) the loan guarantee is for an activity that supports 

the production or supply of an industrial resource, critical 

technology item, or material that is essential for national 

defense purposes; 

‘‘(B) without a loan guarantee, credit is not available 

to the loan applicant under reasonable terms or conditions 

sufficient to finance the activity; 

‘‘(C) the loan guarantee is the most cost effective, expedient, and practical alternative for meeting the needs of 

the Federal Government; 

‘‘(D) the prospective earning power of the loan 

applicant and the character and value of the security 

pledged provide a reasonable assurance of repayment of 

the loan to be guaranteed; 

‘‘(E) the loan to be guaranteed bears interest at a 

rate determined by the Secretary of the Treasury to be 

reasonable, taking into account the then-current average 

yield on outstanding obligations of the United States with 

remaining periods of maturity comparable to the maturity 

of the loan; 

‘‘(F) the loan agreement for the loan to be guaranteed 

provides that no provision of the loan agreement may be 

amended or waived without the consent of the fiscal agent 

of the United States for the guarantee; and 

‘‘(G) the loan applicant has provided or will provide— 

‘‘(i) an assurance of repayment, as determined by 

the President; and 

‘‘(ii) security— 
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‘‘(I) in the form of a performance bond, insurance, collateral, or other means acceptable to the 

fiscal agent of the United States; and 

‘‘(II) in an amount equal to not less than 20 

percent of the amount of the loan. 

‘‘(3) LIMITATIONS ON LOANS.—Loans under this section may 

be— 

‘‘(A) made or guaranteed under the authority of this 

section only to the extent that an appropriations Act— 

‘‘(i) provides, in advance, budget authority for the 

cost of such guarantees, as defined in section 502 of 

the Federal Credit Reform Act of 1990 (2 U.S.C. 661a); 

and 

‘‘(ii) establishes a limitation on the total loan principal that may be guaranteed; and 

‘‘(B) made without regard to the limitations of existing 

law, other than section 1341 of title 31, United States 

Code. 

‘‘(b) FISCAL AGENTS OF THE UNITED STATES.— 

‘‘(1) IN GENERAL.—Any Federal agency or any Federal 

reserve bank, when designated by the President, is hereby 

authorized to act, on behalf of any guaranteeing agency, as 

fiscal agent of the United States in the making of such contracts 

of guarantee and in otherwise carrying out the purposes of 

this section. 

‘‘(2) FUNDS.—All such funds as may be necessary to enable 

any fiscal agent described in paragraph (1) to carry out any 

guarantee made by it on behalf of any guaranteeing agency 

shall be supplied and disbursed by or under authority from 

such guaranteeing agency. 

‘‘(3) LIMIT ON LIABILITY.—No fiscal agent described in paragraph (1) shall have any responsibility or accountability, except 

as agent in taking any action pursuant to or under authority 

of this section. 

‘‘(4) REIMBURSEMENTS.—Each fiscal agent described in 

paragraph (1) shall be reimbursed by each guaranteeing agency 

for all expenses and losses incurred by such fiscal agent in 

acting as agent on behalf of such guaranteeing agency, 

including, notwithstanding any other provision of law, attorneys’ fees and expenses of litigation. 

‘‘(c) OVERSIGHT.— ‘‘(1) IN GENERAL.—All actions and operations of fiscal 

agents under authority of or pursuant to this section shall 

be subject to the supervision of the President, and to such 

regulations as the President may prescribe. 

‘‘(2) OTHER AUTHORITY.—The President is authorized to 

prescribe— 

‘‘(A) either specifically or by maximum limits or otherwise, rates of interest, guarantee and commitment fees, 

and other charges which may be made in connection with 

loans, discounts, advances, or commitments guaranteed by 

the guaranteeing agencies through fiscal agents under this 

section; and 

‘‘(B) regulations governing the forms and procedures 

(which shall be uniform to the extent practicable) to be 

utilized in connection with such guarantees. 

‘‘(d) AGGREGATE GUARANTEE AMOUNTS.— 
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‘‘(1) INDUSTRIAL RESOURCE AND CRITICAL TECHNOLOGY

SHORTFALLS.— 

‘‘(A) IN GENERAL.—If the making of any guarantee 

or obligation of the Federal Government under this title 

relating to a domestic industrial base shortfall would cause 

the aggregate outstanding amount of all guarantees for 

such shortfall to exceed $50,000,000, any such guarantee 

may be made only— 

‘‘(i) if the President has notified the Committee 

on Banking, Housing, and Urban Affairs of the Senate 

and the Committee on Financial Services of the House 

of Representatives in writing of the proposed guarantee; and 

‘‘(ii) after the 30-day period following the date on 

which notice under clause (i) is provided. 

‘‘(B) WAIVERS AUTHORIZED.—The requirements of 

subparagraph (A) may be waived— 

‘‘(i) during a period of national emergency declared 

by Congress or the President; or 

‘‘(ii) upon a determination by the President, on 

a nondelegable basis, that a specific guarantee is necessary to avert an industrial resource or critical technology item shortfall that would severely impair 

national defense capability. 

‘‘(2) OTHER LIMITATIONS.—The authority conferred by this 

section shall not be used primarily to prevent the financial 

insolvency or bankruptcy of any person, unless— 

‘‘(A) the President certifies that the insolvency or bankruptcy would have a direct and substantially adverse effect 

upon national defense production; and 

‘‘(B) a copy of the certification under subparagraph 

(A), together with a detailed justification thereof, is transmitted to the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on Financial Services of the House of Representatives not later than 10 

days prior to the exercise of that authority for such use. 

‘‘SEC. 302. LOANS TO PRIVATE BUSINESS ENTERPRISES. 

‘‘(a) LOAN AUTHORITY.—To reduce current or projected shortfalls 

of industrial resources, critical technology items, or materials essential for the national defense, the President may make provision 

for loans to private business enterprises (including nonprofit 

research corporations and providers of critical infrastructure) for 

the creation, maintenance, expansion, protection, or restoration of 

capacity, the development of technological processes, or the production of essential materials, including the exploration, development, 

and mining of strategic and critical metals and minerals. 

‘‘(b) CONDITIONS OF LOANS.—Loans may be made under this 

section on such terms and conditions as the President deems necessary, except that— 

‘‘(1) financial assistance may be extended only to the extent 

that it is not otherwise available from private sources on reasonable terms; and 

‘‘(2) during periods of national emergency declared by the 

Congress or the President, no such loan may be made unless 

the President determines that— 
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‘‘(A) the loan is for an activity that supports the production or supply of an industrial resource, critical technology 

item, or material that is essential to the national defense; 

‘‘(B) without the loan, United States industry cannot 

reasonably be expected to provide the needed capacity, 

technological processes, or materials in a timely manner; 

‘‘(C) the loan is the most cost-effective, expedient, and 

practical alternative method for meeting the need; 

‘‘(D) the prospective earning power of the loan 

applicant and the character and value of the security 

pledged provide a reasonable assurance of repayment of 

the loan in accordance with the terms of the loan, as 

determined by the President; and 

‘‘(E) the loan bears interest at a rate determined by 

the Secretary of the Treasury to be reasonable, taking 

into account the then-current average yield on outstanding 

obligations of the United States with remaining periods 

of maturity comparable to the maturity of the loan. 

‘‘(c) LIMITATIONS ON LOANS.—Loans under this section may 

be— 

‘‘(1) made or guaranteed under the authority of this section 

only to the extent that an appropriations Act— 

‘‘(A) provides, in advance, budget authority for the 

cost of such guarantees, as defined in section 502 of the 

Federal Credit Reform Act of 1990 (2 U.S.C. 661a); and 

‘‘(B) establishes a limitation on the total loan principal 

that may be guaranteed; and 

‘‘(2) made without regard to the limitations of existing 

law, other than section 1341 of title 31, United States Code. 

‘‘(d) AGGREGATE LOAN AMOUNTS.— 

‘‘(1) IN GENERAL.—If the making of any loan under this 

section to correct a shortfall would cause the aggregate outstanding amount of all obligations of the Federal Government 

under this title relating to such shortfall to exceed $50,000,000, 

such loan may be made only— 

‘‘(A) if the President has notified the Committee on 

Banking, Housing, and Urban Affairs of the Senate and 

the Committee on Financial Services of the House of Representatives, in writing, of the proposed loan; and 

‘‘(B) after the 30-day period following the date on which 

notice under subparagraph (A) is provided. 

‘‘(2) WAIVERS AUTHORIZED.—The requirements of paragraph 

(1) may be waived— 

‘‘(A) during a period of national emergency declared 

by the Congress or the President; and 

‘‘(B) upon a determination by the President, on a nondelegable basis, that a specific loan is necessary to avert 

an industrial resource or critical technology shortfall that 

would severely impair national defense capability. 

‘‘SEC. 303. OTHER PRESIDENTIAL ACTION AUTHORIZED. 

‘‘(a) IN GENERAL.— 

‘‘(1) IN GENERAL.—To create, maintain, protect, expand, 

or restore domestic industrial base capabilities essential for 

the national defense, the President may make provision— 
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‘‘(A) for purchases of or commitments to purchase an 

industrial resource or a critical technology item, for Government use or resale; 

‘‘(B) for the encouragement of exploration, development, and mining of critical and strategic materials, and 

other materials; 

‘‘(C) for the development of production capabilities; and 

‘‘(D) for the increased use of emerging technologies 

in security program applications and the rapid transition 

of emerging technologies— 

‘‘(i) from Government-sponsored research and 

development to commercial applications; and 

‘‘(ii) from commercial research and development 

to national defense applications. 

‘‘(2) TREATMENT OF CERTAIN AGRICULTURAL COMMODITIES.— 

A purchase for resale under this subsection shall not include 

that part of the supply of an agricultural commodity which 

is domestically produced, except to the extent that such domestically produced supply may be purchased for resale for industrial use or stockpiling. 

‘‘(3) TERMS OF SALES.—No commodity purchased under this 

subsection shall be sold at less than— 

‘‘(A) the established ceiling price for such commodity, 

except that minerals, metals, and materials shall not be 

sold at less than the established ceiling price, or the current 

domestic market price, whichever is lower; or 

‘‘(B) if no ceiling price has been established, the higher 

of— 

‘‘(i) the current domestic market price for such 

commodity; or 

‘‘(ii) the minimum sale price established for agricultural commodities owned or controlled by the Commodity Credit Corporation, as provided in section 407 

of the Agricultural Act of 1949 (7 U.S.C. 1427). 

‘‘(4) DELIVERY DATES.—No purchase or commitment to purchase any imported agricultural commodity shall specify a 

delivery date which is more than 1 year after the date of 

termination of this section. 

‘‘(5) PRESIDENTIAL DETERMINATIONS.—Except as provided 

in paragraph (7), the President may not execute a contract 

under this subsection unless the President determines that— 

‘‘(A) the industrial resource, material, or critical technology item is essential to the national defense; and 

‘‘(B) without Presidential action under this section, 

United States industry cannot reasonably be expected to 

provide the capability for the needed industrial resource, 

material, or critical technology item in a timely manner. 

‘‘(6) NOTIFICATION TO CONGRESS OF SHORTFALL.— 

‘‘(A) IN GENERAL.—Except as provided in paragraph 

(7), the President shall provide written notice to the Committee on Banking, Housing, and Urban Affairs of the 

Senate and the Committee on Financial Services of the 

House of Representatives of a domestic industrial base 

shortfall prior to taking action under this subsection to 

remedy the shortfall. The notice shall include the determinations made by the President under paragraph (5). 
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‘‘(B) AGGREGATE AMOUNTS.—If the taking of any action 

under this subsection to correct a domestic industrial base 

shortfall would cause the aggregate outstanding amount 

of all such actions for such shortfall to exceed $50,000,000, 

the action or actions may be taken only after the 30- 

day period following the date on which the Committee 

on Banking, Housing, and Urban Affairs of the Senate 

and the Committee on Financial Services of the House 

of Representatives have been notified in writing of the 

proposed action. 

‘‘(7) WAIVERS AUTHORIZED.—The requirements of paragraphs (1) through (6) may be waived— 

‘‘(A) during a period of national emergency declared 

by the Congress or the President; or 

‘‘(B) upon a determination by the President, on a nondelegable basis, that action is necessary to avert an industrial resource or critical technology item shortfall that 

would severely impair national defense capability. 

‘‘(b) EXEMPTION FOR CERTAIN LIMITATIONS.—Subject to the 

limitations in subsection (a), purchases and commitments to purchase and sales under subsection (a) may be made without regard 

to the limitations of existing law (other than section 1341 of title 

31, United States Code), for such quantities, and on such terms 

and conditions, including advance payments, and for such periods, 

but not extending beyond a date that is not more than 10 years 

from the date on which such purchase, purchase commitment, or 

sale was initially made, as the President deems necessary, except 

that purchases or commitments to purchase involving higher than 

established ceiling prices (or if no such established ceiling prices 

exist, currently prevailing market prices) or anticipated loss on 

resale shall not be made, unless it is determined that supply of 

the materials could not be effectively increased at lower prices 

or on terms more favorable to the Government, or that such purchases are necessary to assure the availability to the United States 

of overseas supplies. 

‘‘(c) PRESIDENTIAL FINDINGS.— 

‘‘(1) IN GENERAL.—The President may take the actions 

described in paragraph (2), if the President finds that— 

‘‘(A) under generally fair and equitable ceiling prices, 

for any raw or nonprocessed material, there will result 

a decrease in supplies from high-cost sources of such material, and that the continuation of such supplies is necessary 

to carry out the objectives of this title; or 

‘‘(B) an increase in cost of transportation is temporary 

in character and threatens to impair maximum production 

or supply in any area at stable prices of any materials. 

‘‘(2) SUBSIDY PAYMENTS AUTHORIZED.—Upon a finding 

under paragraph (1), the President may make provision for 

subsidy payments on any such domestically produced material, 

other than an agricultural commodity, in such amounts and 

in such manner (including purchases of such material and 

its resale at a loss), and on such terms and conditions, as 

the President determines to be necessary to ensure that supplies from such high-cost sources are continued, or that maximum production or supply in such area at stable prices of 

such materials is maintained, as the case may be. 
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‘‘(d) INCIDENTAL AUTHORITY.—The procurement power granted 

to the President by this section shall include the power to transport 

and store and have processed and refined any materials procured 

under this section. 

‘‘(e) INSTALLATION OF EQUIPMENT IN INDUSTRIAL FACILITIES.— 

‘‘(1) INSTALLATION AUTHORIZED.—If the President determines that such action will aid the national defense, the President is authorized— 

‘‘(A) to procure and install additional equipment, facilities, processes or improvements to plants, factories, and 

other industrial facilities owned by the Federal Government; 

‘‘(B) to procure and install equipment owned by the 

Federal Government in plants, factories, and other industrial facilities owned by private persons; 

‘‘(C) to provide for the modification or expansion of 

privately owned facilities, including the modification or 

improvement of production processes, when taking actions 

under section 301, 302, or this section; and 

‘‘(D) to sell or otherwise transfer equipment owned 

by the Federal Government and installed under this subsection to the owners of such plants, factories, or other 

industrial facilities. 

‘‘(2) INDEMNIFICATION.—The owner of any plant, factory, 

or other industrial facility that receives equipment owned by 

the Federal Government under this section shall agree— 

‘‘(A) to waive any claim against the United States 

under section 107 or 113 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 

(42 U.S.C. 9607 and 9613); and 

‘‘(B) to indemnify the United States against any claim 

described in paragraph (1) made by a third party that 

arises out of the presence or use of equipment owned 

by the Federal Government. 

‘‘(f) EXCESS METALS, MINERALS, AND MATERIALS.— 

‘‘(1) IN GENERAL.—Notwithstanding any other provision of 

law to the contrary, metals, minerals, and materials acquired 

pursuant to this section which, in the judgment of the President, are excess to the needs of programs under this Act, 

shall be transferred to the National Defense Stockpile established by the Strategic and Critical Materials Stock Piling 

Act (50 U.S.C. 98 et seq.), when the President deems such 

action to be in the public interest. 

‘‘(2) TRANSFERS AT NO CHARGE.—Transfers made pursuant 

to this subsection shall be made without charge against or 

reimbursement from funds appropriated for the purposes of 

the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 

98 et seq.), except that costs incident to such transfer, other 

than acquisition costs, shall be paid or reimbursed from such 

funds. 

‘‘(g) SUBSTITUTES.—When, in the judgement of the President, 

it will aid the national defense, the President may make provision 

for the development of substitutes for strategic and critical materials, critical components, critical technology items, and other industrial resources. 
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‘‘SEC. 304. DEFENSE PRODUCTION ACT FUND. 

‘‘(a) ESTABLISHMENT OF FUND.—There is established in the 

Treasury of the United States a separate fund to be known as 

the ‘Defense Production Act Fund’ (in this section referred to as 

the ‘Fund’). 

‘‘(b) MONEYS IN FUND.—There shall be credited to the Fund— 

‘‘(1) all moneys appropriated for the Fund, as authorized 

by section 711; and 

‘‘(2) all moneys received by the Fund on transactions 

entered into pursuant to section 303. 

‘‘(c) USE OF FUND.—The Fund shall be available to carry out 

the provisions and purposes of this title, subject to the limitations 

set forth in this Act and in appropriations Acts. 

‘‘(d) DURATION OF FUND.—Moneys in the Fund shall remain 

available until expended. 

‘‘(e) FUND BALANCE.—The Fund balance at the close of each 

fiscal year shall not exceed $750,000,000, excluding any moneys 

appropriated to the Fund during that fiscal year or obligated funds. 

If, at the close of any fiscal year, the Fund balance exceeds 

$750,000,000, the amount in excess of $750,000,000 shall be paid 

into the general fund of the Treasury. 

‘‘(f) FUND MANAGER.—The President shall designate a Fund 

manager. The duties of the Fund manager shall include— 

‘‘(1) determining the liability of the Fund in accordance 

with subsection (g); 

‘‘(2) ensuring the visibility and accountability of transactions engaged in through the Fund; and 

‘‘(3) reporting to the Congress each year regarding activities 

of the Fund during the previous fiscal year. 

‘‘(g) LIABILITIES AGAINST FUND.—When any agreement entered 

into pursuant to this title after December 31, 1991, imposes any 

contingent liability upon the United States, such liability shall 

be considered an obligation against the Fund.’’. 

SEC. 8. DEFINITIONS. 

Section 702 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2152) is amended— 

(1) in paragraph (1), by striking ‘‘military equipment identified by the Secretary of Defense’’ and inserting ‘‘equipment 

identified by the President’’; 

(2) by striking paragraphs (2), (4), (9), and (18); 

(3) by redesignating paragraph (3) as paragraph (2); 

(4) by inserting after paragraph (2), as so redesignated, 

the following: 

‘‘(3) CRITICAL TECHNOLOGY.—The term ‘critical technology’ 

includes any technology designated by the President to be 

essential to the national defense.’’; 

(5) by redesignating paragraphs (5) through (8) as paragraphs (4) through (7), respectively; 

(6) in paragraph (6), as so redesignated— 

(A) in the paragraph heading, by striking ‘‘DEFENSE’’; 

(B) by striking ‘‘domestic defense’’ and inserting 

‘‘domestic’’; and 

(C) by striking ‘‘graduated mobilization,’’; 

(7) by redesignating paragraphs (10) and (11) as paragraphs 

(8) and (9), respectively; 
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(8) by inserting after paragraph (9), as so redesignated, 

the following: 

‘‘(10) GUARANTEEING AGENCY.—The term ‘guaranteeing 

agency’ means a department or agency of the United States 

engaged in procurement for the national defense. 

‘‘(11) HOMELAND SECURITY.—The term ‘homeland security’ 

includes efforts— 

‘‘(A) to prevent terrorist attacks within the United 

States; 

‘‘(B) to reduce the vulnerability of the United States 

to terrorism; 

‘‘(C) to minimize damage from a terrorist attack in 

the United States; and 

‘‘(D) to recover from a terrorist attack in the United 

States.’’; 

(9) in paragraph (12), by striking ‘‘capacity’’ and inserting 

‘‘base’’; 

(10) in paragraph (14), by striking ‘‘military assistance 

to any foreign nation’’ and inserting ‘‘military or critical infrastructure assistance to any foreign nation, homeland security’’; 

and 

(11) in paragraph (16)— 

(A) in subparagraph (A), by striking ‘‘or’’ at the end; 

(B) in subparagraph (B), by striking the period and 

inserting a semicolon; and 

(C) by adding at the end the following: 

‘‘(C) the movement of individuals and property by all 

modes of civil transportation; or 

‘‘(D) other national defense programs and activities.’’. 

SEC. 9. VOLUNTARY AGREEMENTS AND PLANS OF ACTION FOR 

NATIONAL DEFENSE. 

Section 708 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2158) is amended— 

(1) in subsection (c)— 

(A) in paragraph (1), by striking ‘‘defense of the United 

States’’ and all that follows through the period and 

inserting ‘‘national defense.’’; and 

(B) by adding at the end the following: 

‘‘(3) Upon a determination by the President, on a nondelegable 

basis, that a specific voluntary agreement or plan of action is 

necessary to meet national defense requirements resulting from 

an event that degrades or destroys critical infrastructure— 

‘‘(A) an individual that has been delegated authority under 

paragraph (1) with respect to such agreement or plan shall 

not be required to consult with the Attorney General or the 

Federal Trade Commission under paragraph (2)(B); and 

‘‘(B) the President shall publish a rule in accordance with 

subsection (e)(2)(B) and publish notice in accordance with subsection (e)(3)(B) with respect to such agreement or plan as 

soon as is practicable under the circumstances.’’; 

(2) in subsection (f)(2)— 

(A) by striking ‘‘two years’’ each place that term 

appears and inserting ‘‘5 years’’; and 

(B) by striking ‘‘two-year’’ and inserting ‘‘5-year’’; and 

(3) by striking subsection (n) and inserting the following: 
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‘‘(n) EXEMPTION FROM ADVISORY COMMITTEE ACT PROVISIONS.— 

Notwithstanding any other provision of law, the Federal Advisory 

Committee Act (5 U.S.C. App.) and any other provision of Federal 

law relating to advisory committees shall not apply to— 

‘‘(1) the consultations referred to in subsection (c)(1); or 

‘‘(2) any activity conducted under a voluntary agreement 

or plan of action approved pursuant to this section that complies 

with the requirements of this section.’’. 

SEC. 10. EMPLOYMENT OF PERSONNEL; APPOINTMENT POLICIES; 

NUCLEUS EXECUTIVE RESERVE; USE OF CONFIDENTIAL 

INFORMATION BY EMPLOYEES; PRINTING AND DISTRIBUTION OF REPORTS. 

Section 710 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2160) is amended— 

(1) in subsection (b)— 

(A) in paragraph (2), by striking clause (iii); 

(B) by striking paragraph (4); 

(C) by redesignating paragraphs (5) through (8) as 

paragraphs (4) through (7), respectively; and 

(D) in paragraph (6), as so redesignated, by striking 

‘‘At least’’ and all that follows through ‘‘survey’’ and 

inserting ‘‘The Director of the Office of Personnel Management shall carry out a biennial survey of’’; 

(2) in subsection (c), by striking the third sentence; 

(3) in subsection (d), by striking ‘‘needed;’’ and all that 

follows through the period and inserting ‘‘needed.’’; and 

(4) in subsection (e)— 

(A) in the first sentence, by striking ‘‘emergency’’ and 

inserting ‘‘national defense emergency, as determined by 

the President’’; and 

(B) by striking the third sentence. 

SEC. 11. DEFENSE PRODUCTION ACT COMMITTEE. 

Section 722 of the Defense Production Act of 1950 (50 U.S.C. 

App. 2171) is amended to read as follows: 

‘‘SEC. 722. DEFENSE PRODUCTION ACT COMMITTEE. 

‘‘(a) COMMITTEE ESTABLISHED.—There is established the 

Defense Production Act Committee (in this section referred to as 

the ‘Committee’), which shall advise the President on the effective 

use of the authority under this Act by the departments, agencies, 

and independent establishments of the Federal Government to 

which the President has delegated authority under this Act. 

‘‘(b) MEMBERSHIP.— 

‘‘(1) IN GENERAL.—The members of the Committee shall 

be— 

‘‘(A) the head of each Federal agency to which the 

President has delegated authority under this Act; and 

‘‘(B) the Chairperson of the Council of Economic 

Advisors. 

‘‘(2) CHAIRPERSON.—The President shall designate 1 

member of the Committee as the Chairperson of the Committee. 

‘‘(c) EXECUTIVE DIRECTOR.— 

‘‘(1) IN GENERAL.—The President shall appoint an Executive 

Director of the Defense Production Act Committee (in this 

section referred to as the ‘Executive Director’), who shall— 
S. 1677—15 

‘‘(A) be responsible to the Chairperson of the Committee; and 

‘‘(B) carry out such activities relating to the Committee 

as the Chairperson may determine. 

‘‘(2) APPOINTMENT.—The appointment by the President 

shall not be subject to the advice and consent of the Senate. 

‘‘(3) COMPENSATION.—For pay periods beginning on or after 

the date on which each Chairperson is appointed, funds for 

the pay of the Executive Director shall be paid from appropriations to the salaries and expenses account of the department 

or agency of the Chairperson of the Committee. The Executive 

Director shall be compensated at a rate of pay equivalent 

to that of a Deputy Assistant Secretary (or a comparable position) of the Federal agency of the Chairperson of the Committee. 

‘‘(d) REPORT.—Not later than the end of the first quarter of 

each calendar year, the Committee shall submit to the Committee 

on Banking, Housing, and Urban Affairs of the Senate and the 

Committee on Financial Services of the House of Representatives 

a report signed by each member of the Committee that contains— 

‘‘(1) a review of the authority under this Act of each department, agency, or independent establishment of the Federal 

Government to which the President has delegated authority 

under this Act; 

‘‘(2) recommendations for the effective use of the authority 

described in paragraph (1) in a manner consistent with the 

statement of policy under section 2(b); 

‘‘(3) recommendations for legislation, regulations, executive 

orders, or other action by the Federal Government necessary 

to improve the use of the authority described in paragraph 

(1); and 

‘‘(4) recommendations for improving information sharing 

between departments, agencies, and independent establishments of the Federal Government relating to all aspects of 

the authority described in paragraph (1). 

‘‘(e) FEDERAL ADVISORY COMMITTEE ACT.—The provisions of 

the Federal Advisory Committee Act (5 U.S.C. App.) shall not 

apply to the Committee.’’. 

SEC. 12. ANNUAL REPORT ON IMPACT OF OFFSETS. 

(a) ANNUAL REPORT.—Title VII of the Defense Production Act 

of 1950 (50 U.S.C. App. 2151 et seq.) is amended by adding at 

the end the following: 

‘‘SEC. 723. ANNUAL REPORT ON IMPACT OF OFFSETS. 

‘‘(a) REPORT REQUIRED.— ‘‘(1) IN GENERAL.—The President shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate 

and the Committee on Financial Services of the House of Representatives, a detailed annual report on the impact of offsets 

on the defense preparedness, industrial competitiveness, 

employment, and trade of the United States. 

‘‘(2) DUTIES OF THE SECRETARY OF COMMERCE.—The Secretary of Commerce (hereafter in this subsection referred to 

as the ‘Secretary’) shall— 

‘‘(A) prepare the report required by paragraph (1); 

‘‘(B) consult with the Secretary of Defense, the Secretary of the Treasury, the Secretary of State, and the 
S. 1677—16 

United States Trade Representative in connection with the 

preparation of such report; and 

‘‘(C) function as the President’s Executive Agent for 

carrying out this section. 

‘‘(b) INTERAGENCY STUDIES AND RELATED DATA.— 

‘‘(1) PURPOSE OF REPORT.—Each report required under subsection (a) shall identify the cumulative effects of offset agreements on— 

‘‘(A) the full range of domestic defense productive capability (with special attention paid to the firms serving 

as lower-tier subcontractors or suppliers); and 

‘‘(B) the domestic defense technology base as a consequence of the technology transfers associated with such 

offset agreements. 

‘‘(2) USE OF DATA.—Data developed or compiled by any 

agency while conducting any interagency study or other independent study or analysis shall be made available to the Secretary to facilitate the execution of the Secretary’s responsibilities with respect to trade offset and countertrade policy 

development. 

‘‘(c) NOTICE OF OFFSET AGREEMENTS.— 

‘‘(1) IN GENERAL.—If a United States firm enters into a 

contract for the sale of a weapon system or defense-related 

item to a foreign country or foreign firm and such contract 

is subject to an offset agreement exceeding $5,000,000 in value, 

such firm shall furnish to the official designated in the regulations promulgated pursuant to paragraph (2) information concerning such sale. 

‘‘(2) REGULATIONS.—The information to be furnished under 

paragraph (1) shall be prescribed in regulations promulgated 

by the Secretary. Such regulations shall provide protection 

from public disclosure for such information, unless public disclosure is subsequently specifically authorized by the firm furnishing the information. 

‘‘(d) CONTENTS OF REPORT.— ‘‘(1) IN GENERAL.—Each report under subsection (a) shall 

include— 

‘‘(A) a net assessment of the elements of the industrial 

base and technology base covered by the report; 

‘‘(B) recommendations for appropriate remedial action 

under the authority of this Act, or other law or regulations; 

‘‘(C) a summary of the findings and recommendations 

of any interagency studies conducted during the reporting 

period under subsection (b); 

‘‘(D) a summary of offset arrangements concluded 

during the reporting period for which information has been 

furnished pursuant to subsection (c); and 

‘‘(E) a summary and analysis of any bilateral and 

multilateral negotiations relating to the use of offsets completed during the reporting period. 

‘‘(2) ALTERNATIVE FINDINGS OR RECOMMENDATIONS.—Each 

report required under this section shall include any alternative 

findings or recommendations offered by any departmental Secretary, agency head, or the United States Trade Representative 

to the Secretary. 

‘‘(e) UTILIZATION OF ANNUAL REPORT IN NEGOTIATIONS.—The 

findings and recommendations of the reports required by subsection 
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(a), and any interagency reports and analyses shall be considered 

by representatives of the United States during bilateral and multilateral negotiations to minimize the adverse effects of offsets.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.— 

(1) DEFENSE PRODUCTION ACT AMENDMENTS OF 1992.—Section 123(c)(1)(C) of the Defense Production Act Amendments 

of 1992 (50 U.S.C. App. 2099 note) is amended by striking 

‘‘section 309(a) of the Defense Production Act of 1950 (50 U.S.C. 

App. 2099(a))’’ and inserting ‘‘section 723(a) of the Defense 

Production Act of 1950’’. 

(2) AMERICAN HOMEOWNERSHIP AND ECONOMIC OPPORTUNITY ACT OF 2000.—Section 1102(2) of the American Homeownership and Economic Opportunity Act of 2000 (31 U.S.C. 

1113 note) is amended by striking ‘‘309 of the Defense Production Act of 1950 (50 U.S.C. App. 2099)’’ and inserting ‘‘723 

of the Defense Production Act of 1950’’. 

(3) DEFENSE PRODUCTION ACT AMENDMENTS OF 2003.—Section 7(a) of the Defense Production Act Amendments of 2003 

(50 U.S.C. App. 2099 note) is amended by striking ‘‘section 

309(a) of the Defense Production Act of 1950 (50 U.S.C. App. 

2099(a))’’ and inserting ‘‘section 723(a) of the Defense Production Act of 1950’’. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.