Title: REPAY Act
Policy area: International Affairs

Summary:
Return Expenses Paid and Yielded Act or REPAY Act
This bill modifies certification and reporting requirements related to certain defense equipment sales to foreign countries or international organizations, and limits the President's authority to waive various research, development, and production costs charged to the buyer in such sales.
The President shall, in the certification submitted to Congress for a sale of major defense equipment of $14 million or more, provide information about any waived or reduced charges for the proportionate amount of nonrecurring research, development, and production costs in the sale. The certification shall include additional information such as the type of waiver provided to the buyer, the justification for the waiver, and in certain instances the manner in which the sale would help standardization between the buyer's forces and the U.S. Armed Forces.
The President may not waive such nonrecurring charges if the buyer has received (1) $16 million worth of such waivers in the past two years, (2) 15 waivers in the past five years, or (3) $425 million worth of waivers in the past five years.
The bill also allows Armed Forces salaries and civilian benefits costs to be included as chargeable administrative expenses related to such defense equipment sales.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1033 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 1033

To amend the Arms Export Control Act to modify certification and report 
requirements relating to sales of major defense equipment with respect 
 to which nonrecurring costs of research, development, and production 
are waived or reduced under the Arms Export Control Act, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 7, 2019

 Ms. Speier (for herself, Mr. Jones, Mr. Raskin, Mr. Meadows, Mr. Ted 
Lieu of California, Mr. Khanna, and Mr. Pocan) introduced the following 
      bill; which was referred to the Committee on Foreign Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Arms Export Control Act to modify certification and report 
requirements relating to sales of major defense equipment with respect 
 to which nonrecurring costs of research, development, and production 
are waived or reduced under the Arms Export Control Act, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Return Expenses Paid And Yielded 
Act'' or ``REPAY Act''.

SEC. 2. MODIFICATION OF CERTIFICATION AND REPORT REQUIREMENTS RELATING 
              TO SALES OF MAJOR DEFENSE EQUIPMENT WITH RESPECT TO WHICH 
              NONRECURRING COSTS OF RESEARCH, DEVELOPMENT, AND 
              PRODUCTION ARE WAIVED OR REDUCED UNDER THE ARMS EXPORT 
              CONTROL ACT.

    (a) Certification.--Section 36(b) of the Arms Export Control Act 
(22 U.S.C. 2776(b)) is amended by adding at the end the following:
    ``(7)(A) In the case of any letter of offer to sell any major 
defense equipment for $14,000,000 or more, in addition to the other 
information required to be contained in a certification submitted to 
the Congress under this subsection, or a similar certification prior to 
finalization of a letter of offer to sell, each such certification 
shall include the value of any charge or charges for the proportionate 
amount of any nonrecurring costs of research, development, and 
production of the major defense equipment that was waived or reduced 
under section 21(e).
    ``(B) Each such certification shall also include information on--
            ``(i) the type of waiver or reduction;
            ``(ii) the percentage of otherwise obligated nonrecurring 
        costs with respect to which the waiver or reduction comprises;
            ``(iii) a justification for issuance of the waiver or 
        reduction;
            ``(iv) in the case of a waiver or reduction made under 
        paragraph (2)(A) of section 21(e)--
                    ``(I) the manner in which a sale would 
                significantly advance standardization with the foreign 
                countries or international organization described in 
                such section; and
                    ``(II) the extent to which the sale's significance 
                should be considered relative to the existing 
                capabilities of the foreign country or international 
                organization and the manner in which the major defense 
                equipment would enhance the capacity of the country or 
                organization in joint operations; and
            ``(v) in the case of a waiver or reduction made under 
        paragraph (2)(B) of section 21(e)--
                    ``(I) the military needs and ability to pay of the 
                foreign country or international organization;
                    ``(II) the price and capability of other relevant 
                options that are or likely would be considered by the 
                foreign country or international organization for 
                purchase in lieu of the major defense equipment 
                described in the letter of offer; and
                    ``(III) the previous buying history and existing 
                capabilities of the foreign country or international 
                organization.''.
    (b) Report.--Section 36(a) of the Arms Export Control Act (22 
U.S.C. 2776(a)) is amended--
            (1) in paragraph (11), by striking ``and'' at the end;
            (2) in paragraph (12), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(13) with respect to requests to waive or reduce 
        nonrecurring costs with respect to the sale of major defense 
        equipment for $14,000,000 or more under this Act, a report on--
                    ``(A) the total number of such requests that have 
                been approved or denied during the quarter, including 
                the total number of such requests that are currently 
                under review and pending a decision;
                    ``(B) for each such request--
                            ``(i) an identification of the foreign 
                        country or international organization 
                        requesting the waiver or reduction;
                            ``(ii) the total amount of nonrecurring 
                        costs to be waived or reduced;
                            ``(iii) a description of the major defense 
                        equipment to be purchased; and
                            ``(iv) the justification for the waiver or 
                        reduction; and
                    ``(C) for each such request that is approved, the 
                actual amount of nonrecurring costs that are waived or 
                reduced that are attributable to quantities of major 
                defense equipment sold under such request.''.
    (c) Repeal of Waiver Authority in Case of Sales of Major Defense 
Equipment Also Being Procured for Use by United States Armed Forces.--
Section 21(e)(2) of the Arms Export Control Act (22 U.S.C. 2761(e)(2)) 
is amended--
            (1) in subparagraph (B)--
                    (A) in the matter preceding clause (i)--
                            (i) by striking ``The President'' and 
                        inserting ``Except as provided subparagraphs 
                        (D) and (E), the President''; and
                            (ii) by striking ``that--'' and all that 
                        follows through ``(i) imposition'' and 
                        inserting ``that imposition'';
                    (B) by striking ``sale; or'' and inserting 
                ``sale.''; and
                    (C) by striking clause (ii); and
            (2) by inserting at the end the following new 
        subparagraphs:
            ``(D) The President may not waive the charge or charges for 
        a proportionate amount of any nonrecurring costs that would 
        otherwise be considered appropriate under paragraph (1)(B) for 
        a particular sale to a country or international organization 
        for a two-year period that begins on any of the following 
        dates:
                    ``(i) The date of approval of a waiver under 
                paragraph (1)(B) of a charge or charges that are valued 
                at $16,000,000 or more under this Act with respect to a 
                sale to the country or organization.
                    ``(ii) The date that is the last day of any five-
                year period in which the country or organization 
                receives 15 or more waivers of a charge or charges 
                under paragraph (1)(B) with respect to sales to the 
                country or organization.
                    ``(iii) The date that is the last day of any five-
                year period in which the country or organization 
                receives waivers of a charge or charges under paragraph 
                (1)(B) that are valued at $425,000,000 or more under 
                this Act with respect to sales to the country or 
                organization.
            ``(E)(i) In the case of any proposed waiver of the charge 
        or charges which would otherwise be considered appropriate 
        under paragraph (1)(B) for a particular sale to a country or 
        international organization of major defense equipment for 
        $10,000,000 or more under this Act, the President shall submit 
        to the Speaker of the House of Representatives, the Committee 
        on Foreign Affairs of the House of Representatives, and to the 
        chairman of the Committee on Foreign Relations of the Senate a 
        notification with respect to such proposed waiver.
            ``(ii) The President may not waive such charge or charges 
        if Congress, not later than 60 calendar days after receiving 
        such notification, enacts a joint resolution prohibiting the 
        proposed waiver.''.
    (d) Maximum Aggregate Amount of Charges for Administrative 
Services.--Section 21(e) of the Arms Export Control Act (22 U.S.C. 
2761(e)) is amended--
            (1) in paragraph (1), by inserting ``subject to paragraph 
        (4),'' before ``administrative services''; and
            (2) by adding at the end the following new paragraph:
            ``(4)(A) For each fiscal year beginning on or after the 
        date of the enactment of the Return Expenses Paid and Yielded 
        Act, the President shall--
                    ``(i) determine a maximum aggregate amount of 
                charges for administrative services that would be 
                required by paragraph (1)(A) based on the ability of 
                the Department of Defense to issue and administer 
                letters of offer for sale of defense articles or the 
                sale of defense services pursuant to this section or 
                pursuant to section 22 of this Act; and
                    ``(ii) submit to Congress a report that contains 
                the determination and specifies the maximum aggregate 
                amount of charges for administrative services.
            ``(B)(i) Except as provided in clause (ii), charges for 
        administrative services that are required by paragraph (1)(A) 
        may not exceed the maximum aggregate amount of charges for 
        administrative services determined under subparagraph (A) for 
        the fiscal year involved.
            ``(ii) The President may waive the requirement of clause 
        (i) on a case-by-case basis if the amount of charges for 
        administrative services that are required by paragraph (1)(A) 
        with respect to a sale of defense articles or a sale of defense 
        services would exceed the maximum aggregate amount of charges 
        for administrative services determined under subparagraph (A) 
        for the fiscal year.''.
    (e) Modification of Administrative Expenses.--
            (1) In general.--Section 43(b) of the Arms Export Control 
        Act (22 U.S.C. 2792(b)) is amended--
                    (A) in paragraph (1), by adding ``and'' at the end;
                    (B) in paragraph (2), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking paragraph (3).
            (2) Conforming amendment.--Section 21(e)(1)(A) of the Arms 
        Export Control Act (22 U.S.C. 2761(e)(1)(A)) is amended by 
        striking ``and section 43(c)''.
    (f) Biennial Review and Modification of User Charges.--
            (1) In general.--Notwithstanding any other provision of 
        law, the Secretary of Defense, acting through the Director of 
        the Defense Security Cooperation Agency, shall, not less than 
        once every two years--
                    (A) carry out a review of user charges under the 
                foreign military sales program and, based on the 
                results of the review, modify the user charges as 
                appropriate; and
                    (B) submit to the appropriate congressional 
                committees a report that contains the results of the 
                review carried out under subparagraph (A) and a 
                description of any user charges that, based on the 
                results of the review, were modified under subparagraph 
                (A).
            (2) Appropriate congressional committees defined.--In this 
        subsection, the term ``appropriate congressional committees'' 
        means--
                    (A) the Committee on Armed Services and the 
                Committee on Foreign Affairs of the House of 
                Representatives; and
                    (B) the Committee on Armed Services and the 
                Committee on Foreign Relations of the Senate.

SEC. 3. REVIEW AND REPORT ON USE AND MANAGEMENT OF ADMINISTRATIVE 
              SURCHARGES UNDER THE FOREIGN MILITARY SALES PROGRAM.

    (a) Review.--
            (1) In general.--The Secretary of Defense, acting through 
        the Director of the Defense Security Cooperation Agency, shall 
        review options for expanding the use of administrative 
        surcharges under the foreign military sales program, including 
        practices for managing administrative surcharges and contract 
        administrative services surcharges.
            (2) Matters to be included.--The review conducted under 
        paragraph (1) shall include the following:
                    (A) A determination of which specific expenses are 
                incurred by the United States Government in operation 
                of the foreign military sales program that the 
                administrative surcharge does not currently pay for.
                    (B) The estimated annual cost of each of such 
                specific expenses.
                    (C) An assessment of the costs and benefits of 
                funding such specific expenses through the 
                administrative surcharge, including any data to support 
                such an assessment.
                    (D) An assessment of how the Department of Defense 
                could calculate an upper bound of a target range for 
                the administrative surcharge account and the contract 
                administration services surcharge account, including an 
                assessment of the costs and benefits of setting such a 
                bound.
                    (E) An assessment of how the Department of Defense 
                calculates the lower bound, or safety level, for the 
                administrative surcharge account and the contract 
                administration services surcharge account, including 
                what specific factors inform the calculation and 
                whether such a method for calculating the safety level 
                is still valid or should be revisited.
                    (F) An assessment of the process used by the 
                Department of Defense to review and set rates for the 
                administrative surcharge and the contract 
                administration services surcharge, including the extent 
                to which outside parties are consulted and any 
                proposals of the Department of Defense may have for 
                better ensuring that the fee rates are set 
                appropriately.
                    (G) Such other matters as the Secretary of Defense 
                determines to be appropriate.
    (b) Report.--Not later than 120 days after the date of the 
enactment of this Act, the Secretary of Defense, acting through the 
Director of the Defense Security Cooperation Agency, shall submit to 
the congressional defense committees a report on--
            (1) the findings of the review conducted under paragraph 
        (1); and
            (2) any legislative changes needed to allow the surcharge 
        under the foreign military sales program to pay for any 
        expenses currently not covered by administrative surcharge 
        under the foreign military sales program.
    (c) Foreign Military Sales Program Defined.--In this subsection, 
the term ``foreign military sales program'' means the program 
authorized under chapter 2 of the Arms Export Control Act (22 U.S.C. 
2761 et seq.).

SEC. 4. PERFORMANCE MEASURES TO MONITOR FOREIGN MILITARY SALES PROGRAM.

    (a) In General.--The Secretary of Defense, acting through the 
Director of the Defense Security Cooperation Agency and in consultation 
with the heads of other relevant components of the Department of 
Defense, shall enhance the ability of the Department of Defense to 
monitor the performance of the foreign military sales program by taking 
the following actions:
            (1) Develop performance measures to monitor the timeliness 
        of deliveries of defense articles and defense services to 
        purchasers in accordance with the delivery schedule for each 
        sale under the foreign military sales program.
            (2) Identify key choke points, processes, and tasks that 
        contribute most significantly to delays, shortcomings, and 
        issues in the foreign military sales program.
            (3) Review existing performance measures for the foreign 
        military sales program to determine whether such measures need 
        to be updated, replaced, or supplemented to ensure that all key 
        aspects of the foreign military sales program's efficiency and 
        service of United States national interests are able to be 
        monitored and informed by reliable data.
    (b) Report on Performance Measures.--
            (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, the Secretary of Defense, acting 
        through the Director of the Defense Security Cooperation 
        Agency, shall submit to the congressional defense committees a 
        report that lists the performance measures developed and 
        identified under subsection (a).
            (2) Matters to be included.--The report required by 
        paragraph (1) shall--
                    (A) define the performance measures, including 
                targets set for the performance measures;
                    (B) identify the data systems used to monitor the 
                performance measures;
                    (C) identify any concerns related to the 
                reliability of the data used to monitor the performance 
                measures; and
                    (D) report the results for the performance measures 
                for the most recent fiscal year.
            (3) Plan.--If the performance measures developed and 
        identified under subsection (a) cannot be included in the 
        report required by paragraph (1) for the most recent fiscal 
        year based on reliable and accessible data, the report shall 
        include a plan for ensuring that such data will be monitored 
        within a defined period of time.
            (4) Update.--
                    (A) In general.--For each fiscal year after the 
                fiscal year in which the report required by subsection 
                (b) is submitted to the congressional defense 
                committees, the Secretary of Defense shall submit to 
                the congressional defense committees an update of the 
                report required by paragraph (1).
                    (B) Matters to be included.--Each update of the 
                report required by paragraph (1) shall also include the 
                following:
                            (i) For any performance measures that 
                        indicate a decreased level of performance from 
                        the prior year--
                                    (I) a description of the factors 
                                that led to such decreased level of 
                                performance; and
                                    (II) plans to improve such level of 
                                performance.
                            (ii) For any performance measures that 
                        remain unable to be monitored due to lack of 
                        reliable and accessible data, an update on 
                        plans to improve the monitoring of data.
    (c) Briefing.--Not later than 180 days after the date on which the 
Secretary of Defense, acting through the Director of the Defense 
Security Cooperation Agency, submits to the congressional defense 
committees the report required by subsection (b), the Comptroller 
General of the United States shall provide a briefing to the 
congressional defense committees on the report, including an evaluation 
of the performance measures developed and identified under subsection 
(a).

SEC. 5. REPORT AND BRIEFING ON ADMINISTRATIVE BUDGETING OF FOREIGN 
              MILITARY SALES PROGRAM.

    (a) In General.--Not later than one year after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall provide a briefing to the congressional defense committees and 
submit to the congressional defense committees a report on the 
methodology used by the Department of Defense to determine future-year 
needs for administrative surcharges under the foreign military sales 
program.
    (b) Matters To Be Included.--The briefing and report required by 
subsection (a) shall include the following:
            (1) A description of the methodology the Department of 
        Defense used to develop the overall administrative budget of 
        the foreign military sales program and the administrative 
        budgets for each other relevant component of the Department of 
        Defense that receives funds from the foreign military sales 
        program.
            (2) An assessment of the extent to which the methodology 
        described in paragraph (1) reflects relevant best practices.
            (3) Any other related matters the Comptroller General 
        determines to be appropriate.

SEC. 6. DEFINITIONS.

    In this Act:
            (1) Congressional defense committees.--The term 
        ``congressional defense committees'' has the meaning given such 
        term in section 101 of title 10, United States Code.
            (2) Foreign military sales program.--The term ``foreign 
        military sales program'' means the program authorized under 
        chapter 2 of the Arms Export Control Act (22 U.S.C. 2761 et 
        seq.).
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