I 

109TH CONGRESS 

2D SESSION H. R. 4915 

To amend section 721 of the Defense Production Act of 1950 to implement 

certain recommendations relating to the review of certain mergers, acquisitions, or takeovers by or with any foreign person, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 9, 2006 

Mrs. MALONEY (for herself, Mr. SHAYS, Mr. FRANK of Massachusetts, and 

Mr. GUTIERREZ) introduced the following bill; which was referred to the 

Committee on Financial Services, and in addition to the Committees on 

Energy and Commerce and International Relations, 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 section 721 of the Defense Production Act of 

1950 to implement certain recommendations relating to 

the review of certain mergers, acquisitions, or takeovers 

by or with any foreign person, 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 ‘‘Committee on Foreign 

5 Investment in the United States Reform Act’’. 


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1 SEC. 2. CLARIFICATION OF REVIEW AND INVESTIGATION 

2 PROCESS. 

3 Section 721 of the Defense Production Act of 1950 

4 (50 U.S.C. App. 2170) is amended by striking subsections 

5 (a) and (b) and inserting the following new subsections: 

6 ‘‘(a) NATIONAL SECURITY REVIEW.— 

7 ‘‘(1) IN GENERAL.—Upon receiving written no8 tification, as prescribed by regulations under this 

9 section, of any proposed or pending merger, acquisi10 tion, or takeover by or with any foreign person 

11 which could result in foreign control of any person 

12 engaged in interstate commerce in the United 

13 States, the President or the President’s designee 

14 shall review the proposed or pending merger, acqui15 sition, or takeover to determine whether the pro16 posed or pending merger, acquisition, or takeover 

17 may possibly have an effect on the national security 

18 of the United States. 

19 ‘‘(2) PROCEDURE.—The President or the Presi20 dent’s designee shall establish, by regulation, proce21 dures that— 

22 ‘‘(A) require each of the factors listed in 

23 subsection (f) to be considered in the course of 

24 a review under paragraph (1); and 

25 ‘‘(B) require a specific response to be pre26 pared with respect to the applicability of each 


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1 such factor to the proposed or pending merger, 

2 acquisition, or takeover under review. 

3 ‘‘(3) INVOLVEMENT OF FOREIGN GOVERN4 MENT.—If the review under paragraph (1) deter5 mines that the merger, acquisition, or takeover could 

6 result in the control, directly or indirectly, of any 

7 person engaged in interstate commerce in the United 

8 States by a foreign government or an entity con9 trolled by or acting on behalf of a foreign govern10 ment, the merger, acquisition, or takeover shall be 

11 treated as possibly having an effect on the national 

12 security of the United States for purposes of requir13 ing an investigation under subsection (b). 

14 ‘‘(4) APPROVAL OF SECRETARY.—In the case of 

15 any review of a merger, acquisition, or takeover 

16 under paragraph (1) that involves or has resulted in 

17 any agreement that establishes any conditions on the 

18 transaction, or any requirements for any person in19 volved in the transaction, in order to mitigate 

20 against any possible effect of the transaction on the 

21 national security of the United States, any deter22 mination resulting from the review shall not be 

23 treated as final until the determination is approved 

24 by the President, the Secretary of the Treasury, or 

25 the Deputy Secretary of the Treasury. 


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1 ‘‘(5) TIMING.—Any review required under para2 graph (1) shall be completed before the end of the 

3 30-day period beginning on the date of the receipt 

4 by the President or the President’s designee of writ5 ten notification of the proposed or pending merger, 

6 acquisition, or takeover. 

7 ‘‘(b) NATIONAL SECURITY INVESTIGATION.— 

8 ‘‘(1) IN GENERAL.—If any review of any pro9 posed or pending merger, acquisition, or takeover 

10 under subsection (a) results in a determination that 

11 the merger, acquisition, or takeover may possibly 

12 have an effect on the national security of the United 

13 States, the President or the President’s designee 

14 shall conduct an investigation of— 

15 ‘‘(A) the possible effects of the merger, ac16 quisition, or takeover on the national security of 

17 the United States; and 

18 ‘‘(B) possible actions to protect the na19 tional security of the United States in connec20 tion with the merger, acquisition, or takeover. 

21 ‘‘(2) PROCEDURE.—The President or the Presi22 dent’s designee shall establish, by regulation, proce23 dures that— 

24 ‘‘(A) require any investigation under para25 graph (1) to analyze the proposed or pending 


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1 merger, acquisition, or takeover on the basis of 

2 each of the factors listed in subsection (f); 

3 ‘‘(B) require a specific response to be pre4 pared with respect to the applicability of each 

5 such factor to the proposed or pending merger, 

6 acquisition, or takeover under review, the con7 cerns that any such applicability raises with re8 gard to the transaction, and any possible ac9 tions to address such concerns; 

10 ‘‘(C) subject to paragraph (3), establish 

11 appropriate time frames for an investigation 

12 that ensures sufficient time to address relevant 

13 issues concerning any proposed or pending 

14 merger, acquisition, or takeover; 

15 ‘‘(D) take into account the impact of inves16 tigations on the open investment policy of the 

17 United States; and 

18 ‘‘(E) in any case in which the investigation 

19 under paragraph (1) is conducted by a designee 

20 of the President, provide guidance to the des21 ignee for determining the manner and under 

22 what circumstances the designee shall report 

23 the results of the investigation and the rec24 ommendations of the designee to the President 

25 for the President’s consideration. 


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1 ‘‘(3) TIMING.—Any investigation required 

2 under paragraph (1) shall be completed before the 

3 end of the 45-day period beginning on the date of 

4 the determination under subsection (a) that the 

5 merger, acquisition, or takeover may possibly have 

6 an effect on the national security of the United 

7 States.’’. 

8 SEC. 3. AUTHORITY TO TAKE CERTAIN ACTIONS AFTER 

9 WITHDRAWAL OF NOTICE. 

10 Section 721 of the Defense Production Act of 1950 

11 (50 U.S.C. App. 2170) is amended— 

12 (1) by redesignating subsection (k) as sub13 section (o); and 

14 (2) by inserting after subsection (j) the fol15 lowing new subsection: 

16 ‘‘(k) AUTHORITY IN CASE OF WITHDRAWAL OF NO17 TICE.—In the case of any withdrawal of written notice 

18 submitted by a person or entity under subsection (a)(1) 

19 of any proposed or pending merger, acquisition, or take20 over before any review or investigation under subsection 

21 (a) or (b), as the case may be, is completed, the President 

22 or the President’s designee shall establish— 

23 ‘‘(1) interim protections to address specific con24 cerns with such merger, acquisition, or takeover that 

25 have been raised in connection with any such review 


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1 or investigation pending any resubmission of such 

2 written notice by such person or entity and further 

3 action by the President under this section; 

4 ‘‘(2) specific timeframes for resubmitting any 

5 such written notice; and 

6 ‘‘(3) a process for tracking any actions that 

7 may be taken by such person or entity in connection 

8 with such merger, acquisition, or takeover prior to 

9 resubmitting any such written notice.’’. 

10 SEC. 4. ADDITIONAL FACTORS REQUIRED TO BE CONSID11 ERED. 

12 Section 721(f) of the Defense Production Act of 1950 

13 (50 U.S.C. App. 2170(f)) is amended— 

14 (1) in the matter preceding paragraph (1)— 

15 (A) by striking ‘‘may’’ and inserting 

16 ‘‘shall’’; and 

17 (B) by striking ‘‘among other factors’’; 

18 (2) by striking ‘‘and’’ at the end of paragraph 

19 (4); 

20 (3) by striking the period at the end of para21 graph (5) and inserting a semicolon; and 

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

23 paragraphs: 

24 ‘‘(6) whether the acquisition affects the critical 

25 infrastructure of the United States; 


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1 ‘‘(7) whether an entity controlled by or acting 

2 on behalf of a foreign government is involved in the 

3 transaction; and 

4 ‘‘(8) such other factors as the President or the 

5 President’s designee may determine to be appro6 priate, generally or in connection with a specific in7 vestigation.’’. 

8 SEC. 5. INCREASED OVERSIGHT BY THE CONGRESS. 

9 Section 721 of the Defense Production Act of 1950 

10 (50 U.S.C. App. 2170) is amended by inserting after sub11 section (k) (as added by section 3 of this Act) the following 

12 new subsections: 

13 ‘‘(l) ANNUAL REPORT TO THE CONGRESS.— 

14 ‘‘(1) IN GENERAL.—The President or the Presi15 dent’s designee shall transmit a report to the Con16 gress before January 31 of each year on all the re17 views under subsection (a) and the investigations 

18 under subsection (b) conducted during the preceding 

19 year. 

20 ‘‘(2) CONTENTS OF REPORT.—The report under 

21 paragraph (1) shall contain the following informa22 tion with respect to each proposed or pending merg23 er, acquisition, or takeover covered by the report 

24 which was reviewed under subsection (a) or inves25 tigated under subsection (b): 


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1 ‘‘(A) The national security concerns, if 

2 any, raised by any agency contacted in connec3 tion with or involved in any aspect of such re4 view and investigation. 

5 ‘‘(B) The manner in which any such con6 cerns were mitigated either by action of the 

7 President or the President’s designee or by the 

8 action of any party to the merger, acquisition, 

9 or takeover. 

10 ‘‘(C) Whether the merger, acquisition, or 

11 takeover was consummated, abandoned, or re12 mained pending at the end of the year covered 

13 by the report. 

14 ‘‘(m) QUARTERLY REPORT ON TRANSACTIONS

15 UNDER CONSIDERATION.— 

16 ‘‘(1) IN GENERAL.—Before the end of the 10- 

17 day period beginning on the 1st day of each calendar 

18 quarter, the President or the President’s designee 

19 shall transmit a report to the Congress on all trans20 actions which, as of the last day of the preceding 

21 calendar quarter, were under review under sub22 section (a) or under investigation under subsection 

23 (b). 

24 ‘‘(2) CONTENTS.—The report under paragraph 

25 (1) shall contain such information as may be necVerDate Aug 31 2005 04:38 Mar 10, 2006 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4915.IH H4915

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1 essary to inform the Congress of the nature and 

2 scope of each transaction, the national security im3 plications of each transaction, the parties to each 

4 transaction, the possible terms of any contemplated, 

5 pending, or completed mitigation agreement or other 

6 limitations or requirements that may be imposed as 

7 a condition for approval of the transaction, and such 

8 other information that may be useful to the Con9 gress or requested by the Congress in reviewing such 

10 transaction.’’. 

11 SEC. 6. STATUTORY ESTABLISHMENT OF THE COMMITTEE 

12 ON FOREIGN INVESTMENT IN THE UNITED 

13 STATES. 

14 Section 721 of the Defense Production Act of 1950 

15 (50 U.S.C. App. 2170) is amended by inserting after sub16 section (m) (as added by section 5 of this Act) the fol17 lowing new subsection: 

18 ‘‘(n) COMMITTEE ON FOREIGN INVESTMENT IN THE

19 UNITED STATES.— 

20 ‘‘(1) ESTABLISHMENT.—The Committee on 

21 Foreign Investment in the United States established 

22 pursuant to Executive Order No. 11858 (hereafter 

23 in this section referred to as the ‘Committee’ shall 

24 be a multi-agency committee to carry out this secVerDate Aug 31 2005 04:38 Mar 10, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4915.IH H4915

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1 tion as the designee of the President and such other 

2 assignments as the President may designate. 

3 ‘‘(2) MEMBERSHIP.—The Committee shall be 

4 comprised of the following members or their des5 ignee: 

6 ‘‘(A) The Secretary of the Treasury. 

7 ‘‘(B) The Secretary of Commerce. 

8 ‘‘(C) The Secretary of Defense. 

9 ‘‘(D) The Secretary of State. 

10 ‘‘(E) The Attorney General. 

11 ‘‘(F) The Secretary of Homeland Security. 

12 ‘‘(G) The Chairman of the Council of Eco13 nomic Advisors. 

14 ‘‘(H) The United States Trade Represent15 ative. 

16 ‘‘(I) The Director of the Office of Manage17 ment and Budget. 

18 ‘‘(J) The Director of the National Eco19 nomic Council. 

20 ‘‘(K) The Director of the Office of Science 

21 and Technology Policy. 

22 ‘‘(L) Any other designee of the President 

23 from the Executive Office of the President. 

24 ‘‘(M) The Director of National Intel25 ligence. 


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1 ‘‘(3) CHAIRPERSON.—The Secretary of the 

2 Treasury shall be the Chairperson of the Committee. 

3 ‘‘(4) OTHER MEMBERS.—The Chairperson of 

4 the Committee shall involve the heads of such other 

5 Federal agencies in any investigation under sub6 section (a) as the Chairperson determines to be ap7 propriate on the basis of the facts and circumstances 

8 of the transaction under investigation or the des9 ignee of any such agency head. 

10 ‘‘(5) MEETINGS.—The Committee shall meet 

11 upon the direction of the President or upon the call 

12 of the Chairperson of the Committee. 

13 ‘‘(6) HEARINGS AND EVIDENCE.—The Com14 mittee may, for the purpose of carrying out this sec15 tion— 

16 ‘‘(A) hold such hearings and sit and act at 

17 such times and places, take such testimony, re18 ceive such evidence, administer such oaths; and 

19 ‘‘(B) subject to paragraph (7)(A), require, 

20 by subpoena or otherwise, the attendance and 

21 testimony of such witnesses and the production 

22 of such books, records, correspondence, memo23 randa, papers, and documents as the Chair24 person of the Committee may determine advis25 able. 


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1 ‘‘(7) SUBPOENAS.— 

2 ‘‘(A) ISSUANCE.— 

3 ‘‘(i) IN GENERAL.—A subpoena may 

4 be issued under this subsection only by di5 rection of the President or the Chair6 person. 

7 ‘‘(ii) SIGNATURE.—Subject to clause 

8 (i), subpoenas issued under this subsection 

9 may be issued under the signature of the 

10 Chairperson and may be served by any 

11 person designated by the Chairperson or 

12 by a member designated by a majority of 

13 the Committee. 

14 ‘‘(B) ENFORCEMENT.—In the case of con15 tumacy or failure to obey a subpoena issued 

16 under subparagraph (A), the United States dis17 trict court for the judicial district in which the 

18 subpoenaed person resides, is served, or may be 

19 found, or where the subpoena is returnable, 

20 may issue an order requiring such person to ap21 pear at any designated place to testify or to 

22 produce documentary or other evidence. Any 

23 failure to obey the order of the court may be 


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1 punished by the court as a contempt of that 

2 court.’’. 

Æ 


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