I 

109TH CONGRESS 

2D SESSION H. R. 4820 

To amend the Defense Production Act of 1950 to strengthen the requirements 

relating to investigations under such Act, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 2006 

Mr. MARKEY introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on Energy and Commerce, International Relations, and Homeland Security, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Defense Production Act of 1950 to strengthen 

the requirements relating to investigations under such 

Act, 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 ‘‘Port Operations Re5 quire Tough Scrutiny (PORTS) Act of 2006’’. 


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1 SEC. 2. COMMENCEMENT OF INVESTIGATIONS. 

2 (a) DISCRETIONARY INVESTIGATIONS.—Section 

3 721(a) of the Defense Production Act of 1950 (50 U.S.C. 

4 App. 2170(a)) is amended— 

5 (1) in the second sentence, by striking ‘‘30 

6 days’’ and inserting ‘‘60 days’’; 

7 (2) by inserting after the second sentence the 

8 following new sentence: ‘‘The 60-day period specified 

9 in the preceding sentence may be extended by an ad10 ditional 10 days if the President or the President’s 

11 designee determines that it is appropriate to do so.’’; 

12 and 

13 (3) in the fourth sentence (as so redesignated), 

14 by striking ‘‘such determination’’ and inserting ‘‘a 

15 determination is made under this subsection that an 

16 investigation should be undertaken’’. 

17 (b) MANDATORY INVESTIGATIONS.—Section 721(b) 

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

19 2170(b)) is amended— 

20 (1) in paragraph (1), by striking ‘‘30 days’’ and 

21 inserting ‘‘60 days’’; and 

22 (2) by adding at the end the following new sen23 tence: 

24 ‘‘The 60-day period specified in paragraph (1) may be ex25 tended by an additional 10 days if the President or the 


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1 President’s designee determines that it is appropriate to 

2 do so.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 subsections (a) and (b) apply with respect to written noti5 fications of proposed or pending mergers, acquisitions, or 

6 takeovers received pursuant to section 721 of the Defense 

7 Production Act of 1950 (50 U.S.C. App. 2170) on or after 

8 the date of the enactment of this Act. 

9 SEC. 3. ADDITIONAL MANDATORY INVESTIGATIONS. 

10 (a) AMENDMENTS.—Section 721(b) of the Defense 

11 Production Act of 1950 (50 U.S.C. App. 2170(b)), as 

12 amended by section 2(b) of this Act, is further amended— 

13 (1) in the first sentence— 

14 (A) by striking ‘‘The President or the 

15 President’s designee’’ and inserting the fol16 lowing new paragraph: 

17 ‘‘(1) IN GENERAL.—The President or the Presi18 dent’s designee’’; 

19 (B) by striking ‘‘in which an entity’’ and 

20 inserting ‘‘in which— 

21 ‘‘(A) an entity’’; 

22 (C) by striking ‘‘which could result in con23 trol’’ and inserting ‘‘which could result in— 

24 ‘‘(i) control’’; 


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1 (D) by striking the period at the end and 

2 inserting ‘‘; or 

3 ‘‘(ii) control of a person engaged 

4 in interstate commerce in the United 

5 States that could affect the critical in6 frastructure of the United States; or’’; 

7 and 

8 (E) by adding at the end the following new 

9 subparagraph: 

10 ‘‘(B) a foreign person seeks to engage in 

11 any merger, acquisition, or takeover which 

12 could result in foreign control of persons en13 gaged in interstate commerce in the United 

14 States that could affect the critical infrastruc15 ture of the United States.’’; 

16 (2) in the second sentence— 

17 (A) by striking ‘‘Such investigation’’ and 

18 inserting the following new paragraph: 

19 ‘‘(2) REQUIREMENTS RELATING TO COMMENCE20 MENT AND COMPLETION.— 

21 ‘‘(A) IN GENERAL.—An investigation de22 scribed in paragraph (1)’’; and 

23 (B) by redesignating paragraphs (1) and 

24 (2) as clauses (i) and (ii), respectively, and 


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1 moving the margins of clauses (i) and (ii) (as 

2 so redesignated) 4 ems to the right; 

3 (3) in the third sentence (as added by section 

4 2(b)(2) of this Act), by striking ‘‘The 60-day period 

5 specified in paragraph (1)’’ and inserting the fol6 lowing new subparagraph: 

7 ‘‘(B) EXTENSION OF COMMENCEMENT.— 

8 The 60-day period specified in clause (i)’’; and 

9 (4) by adding at the end the following new 

10 paragraph: 

11 ‘‘(3) DEFINITION.—In this subsection, the term 

12 ‘critical infrastructure’— 

13 ‘‘(A) has the meaning given the term in 

14 section 2(4) of the Homeland Security Act of 

15 2002 (6 U.S.C. 101(4)); and 

16 ‘‘(B) includes seaports in the United 

17 States.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 subsection (a) apply with respect to written notifications 

20 of proposed or pending mergers, acquisitions, or takeovers 

21 received pursuant to section 721 of the Defense Produc22 tion Act of 1950 (50 U.S.C. App. 2170) on or after the 

23 date of the enactment of this Act. 


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1 SEC. 4. REPORT; ACTION WITH RESPECT TO CERTAIN MAN2 DATORY INVESTIGATIONS. 

3 (a) AMENDMENTS.—Section 721 of the Defense Pro4 duction Act of 1950 (50 U.S.C. App. 2170) is amended— 

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

6 as subsections (h) through (l), respectively; and 

7 (2) by inserting after subsection (f) the fol8 lowing new subsection: 

9 ‘‘(g) REPORT; ACTION WITH RESPECT TO CERTAIN

10 MANDATORY INVESTIGATIONS.— 

11 ‘‘(1) REPORT.—If the determination of the 

12 President or the President’s designee pursuant to an 

13 investigation described in subsection (b)(1)(A)(ii) of 

14 this section is that the President or the President’s 

15 designee, as the case may be, approves or does not 

16 otherwise object to the merger, acquisition, or take17 over which is the subject of the investigation and the 

18 President decides not to take action pursuant to 

19 subsection (d) of this section with respect to the 

20 merger, acquisition, or takeover, as the case may be, 

21 then the President shall, not later than 30 days 

22 after the date on which the investigation is com23 pleted, transmit to the Congress a report that con24 tains the decision of the President not to take action 

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1 spect to the merger, acquisition, or takeover, as the 

2 case may be. 

3 ‘‘(2) ACTION PURSUANT TO JOINT RESOLU4 TION.—If, not later than 45 days after the date on 

5 which the Congress receives the report referred to in 

6 paragraph (1), a joint resolution described in para7 graph (3) is enacted into law, then the President 

8 shall take such action under subsection (d) of this 

9 section as is necessary to prohibit the merger, acqui10 sition, or takeover which is the subject of the inves11 tigation, including, if the merger, acquisition, or 

12 takeover, as the case may be, has been completed, 

13 directing the Attorney General to seek divestment or 

14 other appropriate relief in the district courts of the 

15 United States. 

16 ‘‘(3) JOINT RESOLUTION DESCRIBED.—For 

17 purposes of paragraph (2), the term ‘joint resolu18 tion’ means a joint resolution of the Congress, the 

19 sole matter after the resolving clause of which is as 

20 follows: ‘That the Congress disapproves the decision 

21 of the President contained in the report transmitted 

22 to the Congress pursuant to section 721(g)(1) of the 

23 Defense Production Act of 1950 on 

24 lllllllll.’, with the blank space being 

25 filled with the appropriate date. 


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1 ‘‘(4) COMPUTATION OF REVIEW PERIOD.—In 

2 computing the 45-day period referred to in para3 graph (2), there shall be excluded any day described 

4 in section 154(b) of the Trade Act of 1974 (19 

5 U.S.C. 2194(b)).’’. 

6 (b) EFFECTIVE DATE.—The amendments made by 

7 subsection (a) apply with respect to investigations com8 menced under section 721(b)(1)(A)(ii) of the Defense Pro9 duction Act of 1950 (as added by section 3(a)(1)(D) of 

10 this Act) on or after the date of the enactment of this 

11 Act. 

12 SEC. 5. ANNUAL REPORT. 

13 (a) AMENDMENTS.—Subsection (h) of section 721 of 

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

15 2170(g)), as redesignated by section 2(a)(1) of this Act, 

16 is amended— 

17 (1) in the heading, by striking ‘‘REPORT’’ and 

18 inserting ‘‘REPORTS’’; 

19 (2) by striking ‘‘The President’’ and inserting 

20 the following: 

21 ‘‘(1) REPORT ON PRESIDENTIAL ACTION.—The 

22 President’’; and 

23 (3) by adding at the end the following new 

24 paragraph: 

25 ‘‘(2) ANNUAL REPORT.— 


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1 ‘‘(A) IN GENERAL.—The President or the 

2 President’s designee shall transmit to the ap3 propriate congressional committees an annual 

4 report that contains— 

5 ‘‘(i) a description of each written noti6 fication of a proposed or pending merger, 

7 acquisition, or takeover received pursuant 

8 to this section during the preceding year, 

9 including, with respect to each such writ10 ten notification involving a merger, acquisi11 tion, or takeover described in subsection 

12 (b)(1)(A)(ii), an analysis of the corporate 

13 structure of the entity controlled by or act14 ing on behalf of a foreign government, in15 cluding whether or not the entity is a pub16 licly-traded corporation, and an identifica17 tion of the majority shareholder or share18 holders; and 

19 ‘‘(ii) a description of the determina20 tion to undertake or not undertake an in21 vestigation of the merger, acquisition, or 

22 takeover referred to in clause (i) and the 

23 reasons therefor. 


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1 ‘‘(B) DEFINITION.—In this paragraph, the 

2 term ‘appropriate congressional committees’ 

3 means— 

4 ‘‘(i) the Committee on Homeland Se5 curity and the Permanent Select Com6 mittee on Intelligence of the House of Rep7 resentatives; and 

8 ‘‘(ii) the Committee on Homeland Se9 curity and Governmental Affairs and the 

10 Select Committee on Intelligence of the 

11 Senate.’’. 

12 (b) EFFECTIVE DATE.—The report required to be 

13 transmitted to Congress under section 721(h)(2) of the 

14 Defense Production Act of 1950 (as added by subsection 

15 (a) of this section) shall be transmitted beginning in 2007 

16 and each subsequent calendar year. 

17 SEC. 6. TECHNICAL AMENDMENTS. 

18 Section 721 of the Defense Production Act of 1950 

19 (50 U.S.C. App. 2170), as amended by this Act, is further 

20 amended— 

21 (1) in subsection (d), by striking ‘‘Subject to 

22 subsection (d)’’ and inserting ‘‘Subject to subsection 

23 (e)’’; 


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1 (2) in subsection (e), by striking ‘‘the authority 

2 conferred by subsection (c)’’ and inserting ‘‘the au3 thority conferred by subsection (d)’’; and 

4 (3) in subsection (h)(1) (as redesignated by sec5 tion 2(a)(1) and further amended by section 3(a)(2) 

6 of this Act), by striking ‘‘subsection (c) of this Act’’ 

7 and inserting ‘‘subsection (c) of this section’’. 

8 SEC. 7. VERIFICATION OF SECURITY MEASURES UNDER 

9 THE CUSTOMS-TRADE PARTNERSHIP 

10 AGAINST TERRORISM (C–TPAT) PROGRAM 

11 AND THE FREE AND SECURE TRADE (FAST) 

12 PROGRAM. 

13 (a) GENERAL VERIFICATION.—Not later than one 

14 year after the date of the enactment of this Act, and on 

15 a biannual basis thereafter, the Commissioner of the Bu16 reau of Customs and Border Protection of the Department 

17 of Homeland Security shall verify on-site the security 

18 measures of each individual and entity that is partici19 pating in the Customs-Trade Partnership Against Ter20 rorism (C–TPAT) program and the Free And Secure 

21 Trade (FAST) program. 

22 (b) POLICIES FOR NONCOMPLIANCE WITH C–TPAT 

23 PROGRAM REQUIREMENTS.—The Commissioner shall es24 tablish policies for non-compliance with the requirements 

25 of the C–TPAT program by individuals and entities parVerDate Aug 31 2005 02:47 Mar 02, 2006 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4820.IH H4820

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1 ticipating in the program, including probation or expulsion 

2 from the program, as appropriate. 

Æ 


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