I 
114TH CONGRESS 
2D SESSION 
H. R. 5665 
To amend the Defense Production Act of 1950 to provide for a net benefit 
review of certain covered transactions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 7, 2016 
Ms. DELAURO (for herself, Mr. ELLISON, Ms. SLAUGHTER, and Mr. POCAN) 
introduced the following bill; which was referred to the Committee on Fi-
nancial Services 
A BILL 
To amend the Defense Production Act of 1950 to provide 
for a net benefit review of certain covered transactions, 
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 
and Economic Security Act of 2016’’. 
SEC. 2. REVIEW OF GREENFIELD INVESTMENTS. 
Section 721(a)(3) of the Defense Production Act of 
1950 (50 U.S.C. App. 2170(a)(3)) is amended— 
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(1) by striking ‘‘means any merger’’ and insert-
ing the following: ‘‘means— 
‘‘(A) any merger’’; 
(2) by striking the period and inserting ‘‘; 
and’’; and 
(3) by adding at the end the following: 
‘‘(B) any construction of a new facility in 
the United States by any foreign person.’’. 
SEC. 3. NET BENEFIT REVIEW. 
(a) IN GENERAL.—Section 721 of the Defense Pro-
duction Act of 1950 (50 U.S.C. App. 2170) is amended— 
(1) in subsection (b)— 
(A) in the heading for such subsection, by 
inserting ‘‘AND NET BENEFIT’’ after ‘‘NA-
TIONAL SECURITY’’; 
(B) in paragraph (1)— 
(i) in the heading for such paragraph, 
by inserting ‘‘AND
NET
BENEFIT’’ after 
‘‘NATIONAL SECURITY’’; 
(ii) in subparagraph (A), by striking 
clauses (i) and (ii) and inserting the fol-
lowing: 
‘‘(i) shall— 
‘‘(I) review the covered trans-
action to determine the effects of the 
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transaction on the national security of 
the United States; and 
‘‘(II) consider the factors speci-
fied in subsection (f) for such pur-
pose, as appropriate; and 
‘‘(ii) shall review the covered trans-
action to determine whether such trans-
action is of net benefit to the United 
States, as provided under subsection (o).’’; 
and 
(iii) by adding at the end the fol-
lowing: 
‘‘(G) MANDATORY NET BENEFIT REVIEW 
FOR
CERTAIN
COVERED
TRANSACTIONS.—The 
President and the Committee shall initiate a 
net benefit review of a covered transaction 
under subparagraph (A)(ii) if such transaction 
meets the requirements of paragraphs (1) and 
(2) of section 7A(a) of the Clayton Act (15 
U.S.C. 18a(a)).’’; and 
(C) in paragraph (3)(A), by inserting ‘‘na-
tional security’’ before ‘‘review’’ each place it 
appears in the heading and text of such sub-
paragraph; and 
(2) by adding at the end the following: 
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‘‘(o) PERFORMANCE OF NET BENEFIT DETERMINA-
TION.— 
‘‘(1) FACTORS TO BE CONSIDERED.—For pur-
poses of carrying out the net benefit determination 
under subsection (b)(1)(A)(ii), the President, acting 
through the Committee, shall consider— 
‘‘(A) the effect on the level of economic ac-
tivity in the United States on— 
‘‘(i) the level and quality of employ-
ment; 
‘‘(ii) resource processing; 
‘‘(iii) the utilization of parts and serv-
ices produced in the United States; 
‘‘(iv) the utilization of products, parts, 
and services imported into the United 
States; and 
‘‘(v) exports from the United States; 
‘‘(B) the effect of the proposed or pending 
transaction on productivity, industrial effi-
ciency, technological development, technology 
transfers, and product innovation in the United 
States; 
‘‘(C) the effect of the proposed or pending 
transaction on competition within any industry 
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‘‘(I) adheres to United States 
standards of corporate governance (in-
cluding commitments to transparency 
and disclosure, independent members 
of the board of directors, independent 
audit committees, and equitable treat-
ment of shareholders); 
‘‘(II) adheres to United States 
laws and practices; and 
‘‘(III) is a foreign person of a 
country whose government has ade-
quately engaged with the Securities 
and Exchange Commission and the 
Public Company Accounting Oversight 
Board in order to promote and ensure 
adequate transparency; and 
‘‘(iv) whether the foreign person en-
gaging in such transaction will likely oper-
ate on a commercial basis if such trans-
action is completed, including with regard 
to— 
‘‘(I) where to export; 
‘‘(II) where to process; 
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‘‘(III) the participation of United 
States citizens in its operations in the 
United States and elsewhere; 
‘‘(IV) the impact of the invest-
ment on productivity and industrial 
efficiency in the United States; 
‘‘(V) support of on-going innova-
tion, research, and development in the 
United States; 
‘‘(VI) sourcing patterns; and 
‘‘(VII) the appropriate level of 
capital expenditures to maintain the 
United States business in a globally 
competitive position; and 
‘‘(G) such other factors as the Committee 
determines appropriate. 
‘‘(2) DETERMINING NET BENEFIT.—In making 
a net benefit determination under subsection 
(b)(1)(A)(ii)— 
‘‘(A) judgments will be made both in meas-
uring the effects of a proposed or pending 
transaction in relation to the relevant individual 
factors under paragraph (1) and in measuring 
the aggregate net effect after offsetting the 
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negative effects, if any, against the positive 
ones; and 
‘‘(B) a proposed or pending transaction 
will be determined to be of net benefit to the 
United States when the aggregate net effect is 
positive, regardless of its extent over the short 
and long term. 
‘‘(3) RIGHT
TO
APPEAL; FINAL
DETERMINA-
TION.— 
‘‘(A) APPEAL OF DETERMINATION.—If the 
Committee makes a determination that the cov-
ered transaction will not be of net benefit to the 
United States, the parties to the covered trans-
action may, within the 30-day period following 
such determination, submit additional informa-
tion to the Committee to demonstrate that the 
transaction will be of net benefit to the United 
States. 
‘‘(B) FINAL DETERMINATION.—The Com-
mittee shall— 
‘‘(i) make a final determination of 
whether the covered transaction will be of 
net benefit to the United States before the 
end of the 30-day period beginning on the 
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date that additional information is sub-
mitted pursuant to subparagraph (A); and 
‘‘(ii) if such determination is that the 
covered transaction will not be of net ben-
efit to the United States, refer such deter-
mination to the President. 
‘‘(4) CERTIFICATIONS TO CONGRESS.—Notwith-
standing subsection (b)(3), upon a final determina-
tion by the Committee under this subsection, the 
chairperson and the head of the lead agency shall 
make certifications to the Congress on the net ben-
efit determination that are as close as practicable to 
the certifications required under subsection (b)(3) 
for the national security review. 
‘‘(5) ACTION BY PRESIDENT AFTER NET BEN-
EFIT REVIEW.— 
‘‘(A) IN GENERAL.—If the Committee re-
fers a determination to the President pursuant 
to paragraph (3)(ii), the President shall, within 
the 15-day period beginning on the date of such 
referral, review such determination and an-
nounce whether the President determines the 
covered transaction is of net benefit to the 
United States. 
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‘‘(B) FACTORS TO BE CONSIDERED.—For 
purposes of making a determination under sub-
paragraph (A), the President shall consider, 
among other factors each of the factors de-
scribed in paragraph (1), as appropriate. 
‘‘(C) PROHIBITION
OF
CERTAIN
TRANS-
ACTIONS.—If the President, pursuant to sub-
paragraph (A), determines that a covered trans-
action is not of net benefit to the United States, 
such covered transaction is prohibited. 
‘‘(D) 
ENFORCEMENT.—The 
President 
shall direct the Attorney General of the United 
States to seek appropriate relief, including di-
vestment relief, in the district courts of the 
United States, in order to implement and en-
force this paragraph. 
‘‘(E) 
DETERMINATIONS
NONREVIEW-
ABLE.—A determination of the President under 
this paragraph shall not be subject to judicial 
review. 
‘‘(6) COMMITTEE MEMBERSHIP FOR PURPOSES 
OF A NET BENEFIT DETERMINATION.—For purposes 
of carrying out the net benefit determination under 
subsection (b)(1)(A)(ii) and this subsection, the 
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Committee shall be composed of the following mem-
bers or the designee of any such member: 
‘‘(A) The Attorney General of the United 
States. 
‘‘(B) The Secretary of Commerce. 
‘‘(C) The Secretary of Labor. 
‘‘(D) The Secretary of the Treasury. 
‘‘(E) The United States Trade Representa-
tive. 
‘‘(F) If the President determines that the 
covered transaction may affect the agricultural 
sector, including food safety, the Secretary of 
Agriculture. 
‘‘(G) If the President determines that the 
covered transaction may affect the public 
health, including food safety, the Secretary of 
Health and Human Services. 
‘‘(7) 
FOREIGN
GOVERNMENT-INFLUENCED 
TRANSACTION DEFINED.—For purposes of this sub-
section, the term ‘foreign government-influenced 
transaction’ means any covered transaction where 
the foreign person engaging in such transaction is 
owned, controlled, or influenced, directly or indi-
rectly, by a foreign government.’’. 
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