I 

118TH CONGRESS 

1ST SESSION H. R. 4952 

To amend title 10, United States Code, to establish the Office of Strategic 

Capital in the Office of the Secretary of Defense, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 26, 2023 

Mr. WITTMAN (for himself, Mr. KHANNA, and Mr. MILLS) introduced the 

following bill; which was referred to the Committee on Armed Services 

A BILL 

To amend title 10, United States Code, to establish the 

Office of Strategic Capital in the Office of the Secretary 

of Defense, 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. ESTABLISHMENT OF OFFICE OF STRATEGIC 

4 CAPITAL. 

5 (a) IN GENERAL.—Chapter 4 of title 10, United 

6 States Code, is amended by adding at the end the fol7 lowing new section: 

8 ‘‘§ 148. Office of Strategic Capital 

9 ‘‘(a) ESTABLISHMENT.—There is in the Office of the 

10 Secretary of Defense an office to be known as the Office 


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1 of Strategic Capital (in this section referred to as the ‘Of2 fice’). 

3 ‘‘(b) DIRECTOR.—The Office shall be headed by an 

4 Executive Director (in this section referred to as the ‘Di5 rector’), who shall be appointed by the Secretary of De6 fense from among employees of the Department of De7 fense in Senior Executive Service or equivalent positions 

8 (as defined in section 3132 of title 5). 

9 ‘‘(c) DUTIES.—The Office shall— 

10 ‘‘(1) identify, accelerate, and sustain the estab11 lishment, research, development, construction, pro12 curement, leasing, consolidation, alteration, improve13 ment, or repair of tangible and intangible assets 

14 vital to national security; 

15 ‘‘(2) protect vital tangible and intangible assets 

16 from theft, acquisition, and transfer by countries 

17 that are adversaries of the United States; and 

18 ‘‘(3) provide capital assistance to eligible enti19 ties engaged in eligible investments. 

20 ‘‘(d) APPLICATIONS.—An eligible entity seeking cap21 ital assistance for an eligible investment shall submit to 

22 the Director an application at such time, in such manner, 

23 and containing such information as the Director may re24 quire. 


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1 ‘‘(e) SELECTION OF INVESTMENTS.—The Director 

2 shall establish criteria for selecting among eligible invest3 ments for which applications are submitted under sub4 section (d). Such criteria shall include— 

5 ‘‘(1) the extent to which an investment is sig6 nificant to the national security of the United 

7 States; 

8 ‘‘(2) the creditworthiness of an investment; and 

9 ‘‘(3) the likelihood that capital assistance pro10 vided for an investment would enable the investment 

11 to proceed sooner than the investment would other12 wise be able to proceed. 

13 ‘‘(f) CAPITAL ASSISTANCE.—The Secretary of De14 fense is authorized to provide capital assistance within this 

15 section. 

16 ‘‘(1) LOANS AND LOAN GUARANTEES.— 

17 ‘‘(A) IN GENERAL.—The Office may pro18 vide loans or loan guarantees to finance or refi19 nance the costs of an eligible investment se20 lected pursuant to subsection (e). 

21 ‘‘(B) ADMINISTRATION OF LOANS.— 

22 ‘‘(i) INTEREST RATE.— 

23 ‘‘(I) IN GENERAL.—Except as 

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1 paragraph (A) shall be not less than 

2 the yield on marketable United States 

3 Treasury securities of a similar matu4 rity to the maturity of the loan on the 

5 date of execution of the loan agree6 ment. 

7 ‘‘(II) EXCEPTION.—The Director 

8 may waive the requirement under sub9 clause (I) with respect to an invest10 ment if the investment is determined 

11 by the Secretary of Defense to be vital 

12 to the national security of the United 

13 States. 

14 ‘‘(III) CRITERIA.—The Director 

15 shall establish separate and distinct 

16 criteria for the interest rates for loan 

17 guarantees with private sector lending 

18 institutions. 

19 ‘‘(ii) FINAL MATURITY DATE.—The 

20 final maturity date of a loan provided 

21 under subparagraph (A) shall be not later 

22 than 50 years after the date of substantial 

23 completion of the investment for which the 

24 loan was provided. 


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1 ‘‘(iii) PREPAYMENT.—A loan provided 

2 under subparagraph (A) may be paid ear3 lier than is provided for under the loan 

4 agreement without a penalty. 

5 ‘‘(iv) NONSUBORDINATION.— 

6 ‘‘(I) IN GENERAL.—A loan pro7 vided under subparagraph (A) shall 

8 not be subordinated to the claims of 

9 any holder of investment obligations 

10 in the event of bankruptcy, insolvency, 

11 or liquidation of the obligor. 

12 ‘‘(II) WAIVER.—The Director 

13 may waive the requirement under sub14 clause (I) with respect to the invest15 ment in order to mitigate risks to loan 

16 repayment. 

17 ‘‘(v) SALE OF LOANS.—For which a 

18 loan is provided under subparagraph (A) 

19 and after notifying the obligor, the Direc20 tor may sell to another entity or reoffer 

21 into the capital markets a loan for the in22 vestment if the Director determines that 

23 the sale or reoffering can be made on fa24 vorable terms. 

25 ‘‘(vi) LOAN GUARANTEES.— 


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1 ‘‘(I) IN GENERAL.—If the Direc2 tor determines that the holder of a 

3 loan guaranteed by the Office de4 faulted on the loan, the Director shall 

5 pay the holder as specified in the loan 

6 guarantee agreement. 

7 ‘‘(II) LOAN GUARANTEE PER8 CENTAGE.—A loan guarantee agree9 ment entered into by the Office under 

10 this paragraph shall specify the per11 centage of the principal amount of the 

12 loan guaranteed by the Office under 

13 such agreement. 

14 ‘‘(vii) TERMS AND CONDITIONS.— 

15 Loans and loan guarantees provided under 

16 subparagraph (A) shall be subject to such 

17 other terms and conditions and contain 

18 such other covenants, representations, war19 ranties, and requirements (including re20 quirements for audits) as the Director de21 termines appropriate. 

22 ‘‘(viii) INVESTMENT-GRADE RATING.— 

23 The Director shall establish a credit rating 

24 system to ensure a reasonable likelihood of 

25 repayment of loans made or guaranteed 


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1 under this subsection. The credit rating 

2 system may include the use of existing 

3 credit rating agencies as the Director de4 termines appropriate. 

5 ‘‘(ix) APPLICABILITY OF FEDERAL

6 CREDIT REFORM ACT OF 1990.—Loans and 

7 loan guarantees provided under subpara8 graph (A) shall be subject to the require9 ments of the Federal Credit Reform Act of 

10 1990 (2 U.S.C. 661 et seq.). 

11 ‘‘(2) EQUITY INVESTMENTS.— 

12 ‘‘(A) IN GENERAL.—The Director may, as 

13 a minority investor and subject to the avail14 ability of appropriations this purpose, support 

15 an eligible investment selected pursuant to sub16 section (e) with funds or use other mechanisms 

17 for the purpose of purchasing, and may make 

18 and fund commitments to purchase, invest in, 

19 make pledges in respect of, or otherwise ac20 quire, equity, warrants, or quasi-equity securi21 ties or shares or financial interests of the eligi22 ble entity receiving support for the eligible in23 vestment, including as a limited partner or 

24 other investor in investment funds, upon such 


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1 terms and conditions as the Director may deter2 mine. 

3 ‘‘(B) SALES AND LIQUIDATION OF POSI4 TION.—The Office shall seek to sell and liq5 uidate any support for an investment provided 

6 under subparagraph (A) as soon as commer7 cially feasible, commensurate with other similar 

8 investors in the investment and taking into con9 sideration the national security interests of the 

10 United States. 

11 ‘‘(3) TECHNICAL ASSISTANCE.—Subject to the 

12 availability of appropriations, the Director may pro13 vide technical assistance with respect to developing 

14 and financing investments to eligible entities seeking 

15 capital assistance for eligible investments and eligi16 ble entities receiving capital assistance under this 

17 subsection. 

18 ‘‘(4) TERMS AND CONDITIONS.— 

19 ‘‘(A) FEES.—The Director may charge 

20 fees for the provision of capital assistance 

21 under this subsection to cover the administra22 tive costs to the Office of providing such assist23 ance. 

24 ‘‘(B) USE OF FEES.—Fees collected pursu25 ant to subparagraph (A) may only be used to 


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1 pay for the cost of administering the activities 

2 authorized by this section. 

3 ‘‘(C) AMOUNT OF CAPITAL ASSISTANCE.— 

4 The Director shall provide to an eligible invest5 ment selected pursuant to subsection (e) the 

6 minimum amount of assistance necessary to 

7 carry out the investment. 

8 ‘‘(D) USE OF UNITED STATES DOLLAR.— 

9 All financial transactions conducted under this 

10 subsection shall be conducted in United States 

11 dollars. 

12 ‘‘(g) ESTABLISHMENT OF ACCOUNTS.— 

13 ‘‘(1) CREDIT PROGRAM ACCOUNT.— 

14 ‘‘(A) ESTABLISHMENT.—There is estab15 lished in the Treasury of the United States an 

16 account to be known as the ‘Department of De17 fense Credit Program Account’ (in this sub18 section referred to as the ‘Credit Program Ac19 count’) to make loans and loan guarantees 

20 under this section in accordance with the Fed21 eral Credit Reform Act of 1990 (2 U.S.C. 661 

22 et seq.). 

23 ‘‘(B) FUNDING.—The Credit Program Ac24 count shall consist of amounts appropriated to 

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1 thorization of appropriations and all fees as de2 scribed in subparagraph (C). 

3 ‘‘(C) FEE AUTHORITY.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 may charge and collect fees for providing 

6 capital assistance in an amount to be de7 termined by the Secretary to cover the 

8 costs to the Office of providing such cap9 ital assistance. 

10 ‘‘(ii) AMOUNT.—The amount of the 

11 fees under clause (i) shall equal, but not 

12 exceed, the costs to the Office of providing 

13 capital assistance. 

14 ‘‘(iii) USE OF FEES.—Fees collected 

15 pursuant to clause (i) may only be used to 

16 pay for the cost of administering the ac17 tivities authorized by this section. 

18 ‘‘(2) EQUITY ACCOUNT.— 

19 ‘‘(A) ESTABLISHMENT.—There is estab20 lished in the Treasury of the United States an 

21 account to be known as the ‘Department of De22 fense Strategic Capital Equity Account’ (in this 

23 subsection referred to as the ‘Strategic Capital 

24 Equity Account’). 


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1 ‘‘(B) FUNDING.—The Strategic Capital 

2 Equity Account shall consist of all amounts ap3 propriated to the Strategic Capital Equity Ac4 count pursuant to an authorization of appro5 priations. 

6 ‘‘(3) USE OF FUNDS.—Subject to appropria7 tions Acts, the Secretary is authorized to pay, from 

8 the Credit Program Account or the Strategic Capital 

9 Equity Account— 

10 ‘‘(A) the cost, as defined in section 502 of 

11 the Federal Credit Reform Act of 1990 (2 

12 U.S.C. 661a), of loans and loan guarantees and 

13 other capital assistance; 

14 ‘‘(B) administrative expenses of the Office 

15 associated with activities under this section; 

16 ‘‘(C) project-specific transaction costs 

17 under this section; 

18 ‘‘(D) the cost of providing support author19 ized by this section; and 

20 ‘‘(E) the costs of equity investments under 

21 this section. 

22 ‘‘(h) REGULATIONS.— 

23 ‘‘(1) IN GENERAL.—The Secretary of Defense 

24 shall prescribe such regulations as are necessary to 

25 carry out this section. 


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1 ‘‘(2) LIMITATION ON AUTHORITIES.—The Sec2 retary of Defense may not exercise the authorities 

3 under this section prior to promulgating the regula4 tions required by paragraph (1). 

5 ‘‘(i) ANNUAL REPORT.—Not later than the first Mon6 day in February of each year, the Secretary of Defense 

7 shall submit to the congressional defense committees an 

8 annual report describing the activities of the Office in the 

9 preceding fiscal year and the goals of the Office for the 

10 next fiscal year. 

11 ‘‘(j) CONGRESSIONAL NOTIFICATION.—Not later 

12 than 30 days after the Director exercises the authority 

13 under subsection (f) to make a loan or equity investment 

14 or to provide a loan guarantee, insurance, or reinsurance, 

15 the Secretary of Defense shall notify the congressional de16 fense committees of such exercise of authority. 

17 ‘‘(k) SUNSET.—The authorities provided under this 

18 section shall expire on October 1, 2028. 

19 ‘‘(l) DEFINITIONS.—In this section: 

20 ‘‘(1) CAPITAL ASSISTANCE.—The term ‘capital 

21 assistance’ means loans, loan guarantees, equity in22 vestments, or technical assistance provided under 

23 subsection (f). 

24 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en25 tity’ means— 


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1 ‘‘(A) an individual; 

2 ‘‘(B) a corporation, including a limited li3 ability corporation; 

4 ‘‘(C) a partnership, including a public-pri5 vate, limited, and general partnership; 

6 ‘‘(D) a joint venture, including a strategic 

7 alliance; 

8 ‘‘(E) a trust; 

9 ‘‘(F) a State, including a political subdivi10 sion or any other instrumentality of a State; 

11 ‘‘(G) a Tribal government or consortium of 

12 Tribal governments; 

13 ‘‘(H) any other governmental entity or 

14 public agency in the United States, including a 

15 special purpose district or public authority, in16 cluding a port authority; or 

17 ‘‘(I) a multi-State or multi-jurisdictional 

18 group of public entities. 

19 ‘‘(3) ELIGIBLE INVESTMENT.—The term ‘eligi20 ble investment’ means an investment that facilitates 

21 the efforts of the Office— 

22 ‘‘(A) to identify, accelerate, and sustain 

23 the establishment, research, development, con24 struction, procurement, leasing, consolidation, 

25 alteration, improvement, or repair of tangible 


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1 and intangible assets vital to national security; 

2 or 

3 ‘‘(B) to protect vital tangible and intan4 gible assets from theft, acquisition, and transfer 

5 by countries that are adversaries of the United 

6 States. 

7 ‘‘(4) INVESTMENT-GRADE RATING.—The Direc8 tor shall establish a credit rating system to ensure 

9 a reasonable reassurance of repayment. This may in10 clude use of existing credit rating agencies where ap11 propriate. 

12 ‘‘(5) OBLIGOR.—The term ‘obligor’ means a 

13 party that is primarily liable for payment of the 

14 principal of or interest on a loan. 

15 ‘‘(6) RATING AGENCY.—The term ‘rating agen16 cy’ means a credit rating agency registered with the 

17 Securities and Exchange Commission as a nationally 

18 recognized statistical rating organization (as that 

19 term is defined in section 3(a) of the Securities Ex20 change Act of 1934 (15 U.S.C. 78c(a))). 

21 ‘‘(7) SUBSIDY AMOUNT.—The term ‘subsidy 

22 amount’ means the amount of budget authority suf23 ficient to cover the estimated long-term cost to the 

24 Federal Government of a loan— 


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1 ‘‘(A) calculated on a net present value 

2 basis; and 

3 ‘‘(B) excluding administrative costs and 

4 any incidental effects on governmental receipts 

5 or outlays in accordance with the Federal Cred6 it Reform Act of 1990 (2 U.S.C. 661 et seq.).’’. 

7 (b) CLERICAL AMENDMENT.—The table of sections 

8 at the beginning of chapter 4 of such title is amended by 

9 adding at the end the following new item: 

‘‘148. Office of Strategic Capital.’’. 

Æ 


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