I 
109TH CONGRESS 
2D SESSION 
H. R. 4929 
To amend section 721 of the Defense Production Act of 1950 to enhance 
the effectiveness of the investigations of certain mergers, acquisitions, 
and takeovers for national security implications, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 9, 2006 
Mr. SABO 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 Select Intelligence (Permanent 
Select), for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend section 721 of the Defense Production Act of 
1950 to enhance the effectiveness of the investigations 
of certain mergers, acquisitions, and takeovers for na-
tional security implications, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Foreign Investment 
National Security Review Act of 2006’’. 
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SEC. 2. INVESTIGATION OF CERTAIN TRANSACTIONS FOR 
NATIONAL SECURITY IMPLICATIONS. 
(a) IN GENERAL.—Section 721 of the Defense Pro-
duction Act of 1950 (50 U.S.C. App. 2170) is amended 
to read as follows: 
‘‘SEC. 721. INVESTIGATION OF CERTAIN TRANSACTIONS 
FOR NATIONAL SECURITY IMPLICATIONS. 
‘‘(a) INVESTIGATIONS.— 
‘‘(1) IN GENERAL.—Upon receiving written no-
tification, as prescribed by regulations under this 
section, of any merger, acquisition, or takeover pro-
posed or pending on or after the date of the enact-
ment of this section by or with any foreign person 
which could result in foreign control of any person 
engaged in interstate commerce in the United 
States, the President, acting through the President’s 
designee and the Committee on Foreign Investment 
in the United States shall conduct an investigation 
to determine the effects, if any, of the proposed or 
pending merger, acquisition, or takeover on the na-
tional security of the United States. 
‘‘(2) 
TIMING.—Any 
investigation 
required 
under paragraph (1) shall be completed before the 
end of the 75-day period beginning on the date of 
the receipt by the President or the President’s des-
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ignee of written notification of the proposed or pend-
ing merger, acquisition, or takeover. 
‘‘(b) CONFIDENTIALITY OF INFORMATION.— 
‘‘(1) IN GENERAL.—Any information or docu-
mentary material filed with the President or the 
President’s designee pursuant to this section shall be 
exempt from disclosure under section 552 of title 5, 
United States Code, and no such information or doc-
umentary material may be made public, except as 
may be relevant to any administrative or judicial ac-
tion or proceeding. 
‘‘(2) AVAILABILITY
TO
THE
CONGRESS.—No 
provision of paragraph (1) shall be construed as pre-
venting the disclosure of any information or docu-
mentary material to either House of Congress or to 
any duly authorized committee or subcommittee of 
the Congress. 
‘‘(c) COMMITTEE ON FOREIGN INVESTMENT IN THE 
UNITED STATES.— 
‘‘(1) ESTABLISHMENT.—The Committee on 
Foreign Investment in the United States established 
pursuant to Executive Order No. 11858 (hereafter 
in this section referred to as the ‘Committee’) shall 
be a multi-agency committee to carry out this sec-
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tion and such other assignments as the President 
may designate. 
‘‘(2) MEMBERSHIP.—The Committee shall be 
comprised of the following members: 
‘‘(A) The Secretary of the Treasury. 
‘‘(B) The Secretary of State. 
‘‘(C) The Secretary of Defense. 
‘‘(D) The Secretary of Homeland Security. 
‘‘(E) The Attorney General. 
‘‘(F) The Secretary of Commerce. 
‘‘(G) The Director of the Office of Man-
agement and Budget. 
‘‘(H) The United States Trade Represent-
ative. 
‘‘(I) The Chairman of the Council of Eco-
nomic Advisors. 
‘‘(J) The Director of the Office of Science 
and Technology Policy. 
‘‘(3) CHAIRPERSON.—The Secretary of the 
Treasury shall be the Chairperson of the Committee. 
‘‘(4) OTHER
MEMBERS.—The Chairperson of 
the Committee shall involve the heads of such other 
Federal agencies, the Assistant to the President for 
National Security Affairs, and the Assistant to the 
President for Domestic Policy in any investigation 
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under subsection (a) as the Chairperson determines 
to be appropriate on the basis of the facts and cir-
cumstances of the transaction under investigation. 
‘‘(5) ROLE OF THE DIRECTOR OF NATIONAL IN-
TELLIGENCE.—The Director of National Intelligence 
shall provide appropriate intelligence analysis and 
intelligence briefings to the Committee. 
‘‘(d) ACTION BY THE PRESIDENT.— 
‘‘(1) IN GENERAL.—No proposed or pending ac-
quisition, merger, or takeover, of a person engaged 
in interstate commerce in the United States by or 
with foreign persons may occur unless the President, 
on the basis of an investigation and report by the 
Committee, finds that such acquisition, merger or 
takeover, will not threaten to impair the national se-
curity of the United States, as defined by regula-
tions prescribed pursuant to this section, and ap-
proves the transaction. 
‘‘(2) ENFORCEMENT.—The President shall di-
rect the Attorney General to seek appropriate relief, 
including divestment relief, in the district courts of 
the United States in order to implement and en-
force— 
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‘‘(A) any finding, action, or determination 
under this section of disapproval of an acquisi-
tion, merger, or takeover; or 
‘‘(B) any conditions imposed on any ap-
proval of any acquisition, merger, or takeover. 
‘‘(3) FINALITY OF DETERMINATIONS.—All ac-
tions and determinations under this section shall be 
final and not subject to judicial review. 
‘‘(e) FINDINGS BY THE PRESIDENT.— 
‘‘(1) IN GENERAL.—A finding under this sec-
tion of impairment or threatened impairment to na-
tional security shall be based on credible evidence 
that leads the President to believe that— 
‘‘(A) the foreign interest exercising control 
might take action that threatens to impair the 
national security; and 
‘‘(B) other provisions of law do not provide 
adequate and appropriate authority for the 
President to protect the national security. 
‘‘(2) FACTORS TO BE CONSIDERED.—Any inves-
tigation under this section shall take into account 
the following factors: 
‘‘(A) Domestic production needed for pro-
jected national defense requirements. 
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‘‘(B) The capability and capacity of domes-
tic industries to meet national defense require-
ments, including the availability of human re-
sources, products, technology, materials, and 
other supplies and services. 
‘‘(C) The control of domestic industries 
and commercial activity by foreign citizens as it 
affect the capability and capacity of the United 
States to meet the requirements of national se-
curity. 
‘‘(D) The potential effects of the proposed 
or pending transaction on sales of military 
goods, equipment, or technology to any coun-
try— 
‘‘(i) identified by the Secretary of 
State— 
‘‘(I) under section 6(j) of the Ex-
port Administration Act of 1979, as a 
country that supports terrorism; 
‘‘(II) under section 6(l) of the 
Export Administration Act of 1979, 
as a country of concern regarding 
missile proliferation; or 
‘‘(III) under section 6(m) of the 
Export Administration Act of 1979, 
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as a country of concern regarding the 
proliferation of chemical and biologi-
cal weapons; or 
‘‘(ii) listed under section 309(c) of the 
Nuclear Non-Proliferation Act of 1978 on 
the 
‘Nuclear 
Non-Proliferation-Special 
Country List’ (15 C.F.R. Part 778, Sup-
plement No. 4) or any successor list. 
‘‘(E) The potential effects on the proposed 
or pending transaction on United States inter-
national technological leadership in areas affect-
ing United States national security. 
‘‘(f) REPORT TO THE CONGRESS.—Upon making any 
determination to approve or disapprove any merger, acqui-
sition, or takeover by or with any foreign person which 
could result in foreign control of any person engaged in 
interstate commerce in the United States, the President 
shall immediately transmit to the Secretary of the Senate 
and the Clerk of the House of Representatives a written 
report of the President’s determination under this section 
to approve or disapprove such merger, acquisition, or take-
over, including a detailed explanation of the finding made 
and factors considered. 
‘‘(g) CONGRESSIONAL ACTION.— 
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‘‘(1) IN GENERAL.—If the determination of the 
President contained in the report transmitted to the 
Congress under subsection (f) is that the President 
will approve any merger, acquisition, or takeover 
under subsection (d) and not later than 30 days 
after the date on which Congress receives the report, 
a joint resolution described in paragraph (2) is en-
acted into law, then the President shall take such 
action under subsection (d) as is necessary to pro-
hibit the merger, acquisition, or takeover, including, 
if such acquisition has been completed, directing the 
Attorney General to seek divestment or other appro-
priate relief in the district courts of the United 
States. 
‘‘(2) JOINT
RESOLUTION
DESCRIBED.—For 
purposes of paragraph (1), the term ‘joint resolu-
tion’ means a joint resolution of the Congress, the 
sole matter after the resolving clause of which is as 
follows: ‘That the Congress disapproves the deter-
mination of approval of the President contained in 
the report submitted to Congress pursuant to section 
721(f) of the Defense Production Act of 1950 on 
lllll.’, with the blank space being filled with 
the appropriate date. 
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‘‘(3) COMPUTATION
OF
REVIEW
PERIOD.—In 
computing the 30-day period referred to in para-
graph (1), there shall be excluded any day described 
in section 154(b) of the Trade Act of 1974. 
‘‘(h) REGULATIONS.—The President shall direct the 
issuance of regulations to carry out this section. Such reg-
ulations shall, to the extent possible, minimize paperwork 
burdens and shall to the extent possible coordinate report-
ing requirements under this section with reporting re-
quirements under any other provision of Federal law. 
‘‘(i) EFFECT ON OTHER LAW.—No provision of this 
section shall be construed as altering or affecting any ex-
isting authority, power, process, regulation, investigation, 
enforcement measure, or review provided by any other pro-
vision of law. 
‘‘(j) TECHNOLOGY RISK ASSESSMENTS.—In any case 
in which an assessment of the risk of diversion of defense 
critical technology is performed by the Committee or any 
other designee of the President, a copy of such assessment 
shall be provided to any other designee of the President 
responsible for reviewing or investigating a merger, acqui-
sition, or takeover under this section. 
‘‘(k) BIENNIAL
REPORT
ON
CRITICAL
TECH-
NOLOGIES.— 
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‘‘(1) IN GENERAL.—In order to assist the Con-
gress in its oversight responsibilities with respect to 
this section, the President and such agencies as the 
President shall designate shall complete and furnish 
to the Congress, not later than May 1, 2007, and 
upon the expiration of every 2 years thereafter, a re-
port, both in classified and unclassified form, 
which— 
‘‘(A) evaluates whether there is credible 
evidence of a coordinated strategy by 1 or more 
countries or companies to acquire United States 
companies involved in research, development, or 
production of critical technologies for which the 
United States is a leading producer; and 
‘‘(B) evaluates whether there are industrial 
espionage activities directed or directly assisted 
by foreign governments against private United 
States companies aimed at obtaining commer-
cial secrets related to critical technology. 
‘‘(2) DEFINITION.—For the purposes of this 
subsection, the term ‘critical technologies’ means 
technologies identified under title VI of the National 
Science and Technology Policy, Organization, and 
Priorities Act of 1976 or other critical technology, 
critical components, or critical technology items es-
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