Title: MICROCHIPS Act of 2019
Policy area: Armed Forces and National Security

Summary:
Manufacturing, Investment, and Controls Review for Computer Hardware, Intellectual Property, and Supply Act of 2019 or the MICROCHIPS Act of 2019
This bill establishes the National Supply Chain Intelligence Center within the Office of the Director of National Intelligence (ODNI) and contains other provisions related to supply chain intelligence and security.
The center shall (1) aggregate all-source intelligence relating to supply chains; (2) share supply chain-related warnings with the intelligence community, other parts of the federal government, at-risk industry partners, and U.S. allies; and (3) serve as the central resource for supply chain threats and related information.
The President may make funds available to eligible U.S. entities that produce components, products, or technology that will increase supply chain security.
The ODNI shall report to Congress a plan for strengthening supply chain intelligence functions.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2316 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 2316

   To require a plan for strengthening the supply chain intelligence 
function, to establish a National Supply Chain Intelligence Center, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 30, 2019

 Mr. Crapo (for himself and Mr. Warner) introduced the following bill; 
     which was read twice and referred to the Select Committee on 
                              Intelligence

_______________________________________________________________________

                                 A BILL


 
   To require a plan for strengthening the supply chain intelligence 
function, to establish a National Supply Chain Intelligence Center, 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 ``Manufacturing, Investment, and 
Controls Review for Computer Hardware, Intellectual Property, and 
Supply Act of 2019'' or the ``MICROCHIPS Act of 2019''.

SEC. 2. FINDINGS AND SENSE OF CONGRESS.

    (a) Findings.--Congress makes the following findings:
            (1) Fifth generation telecommunications technology 
        (commonly referred to as ``5G''), as well as other emerging 
        technologies, will revolutionize the technology industry, 
        becoming a vital part of day-to-day business and life, and 
        requires secure supply chains for the national security of the 
        United States.
            (2) An insecure supply chain for products supplied to the 
        United States Government can lead to a degradation of critical 
        infrastructure and technology items that are essential to the 
        defense of the United States.
            (3) The United States Government confronts adversaries who 
        seek to offset the military strength of the United States 
        through asymmetric, nonkinetic actions that compromise and 
        neutralize the decision-making systems, processes, and 
        warfighting capabilities of the United States.
            (4) These adversaries take advantage of the open and 
        democratic system of the United States that prioritizes 
        governmental transparency to connect citizens with the actions 
        of the Government.
            (5) The National Defense Strategy identified Russia and 
        China as primary strategic competitors of the United States.
            (6) Russia and China seek to steal sensitive defense 
        information from the United States through the use of blended 
        espionage operations in the supply chain, supply chain 
        activities, and cyberspace, and through insider threat human 
        actors.
            (7) The actions of Russia and China go well beyond theft of 
        critical military technology, threatening the integrity and 
        readiness of information and weapons systems and potentially 
        enabling key elements of the strategies of an adversary to 
        defeat the Armed Forces of the United States across the 
        spectrum of conflict.
            (8) According to some estimates, cybersecurity spending in 
        the United States from 2017 to 2021 will exceed 
        $1,000,000,000,000 among the public and private sectors.
            (9) Even with these large investments in cybersecurity, the 
        United States remains vulnerable to advanced cyber actors like 
        Russia and China.
            (10) Since 2013, more than 6,000,000 individual data 
        records have been compromised every day through data breaches, 
        with nearly half of these losses occurring in the Government 
        sector.
            (11) Large expenditures of resources and a protective 
        strategy that relies on firewalls and boundaries that can be 
        breached by a persistent actor are clearly insufficient and 
        completely ignore the supply chain vector.
            (12) Military weapons systems are not immune to cyber 
        vulnerabilities.
            (13) An October 2018 Government Accountability Office 
        report found that nearly all weapons systems of the United 
        States have cyber vulnerabilities the scale of which the 
        Department of Defense is ``just beginning to grapple with''.
            (14) Furthermore, the report stated that despite multiple 
        warnings since the early 1990s, ``cybersecurity has not been a 
        focus of weapon systems acquisitions''.
            (15) There have been numerous press stories about data 
        breaches and theft of United States sensitive technology that 
        prove that cyber vulnerabilities are real and not theoretical.
            (16) The Department of Defense will spend more than 
        $1,600,000,000,000 to develop and field its current portfolio 
        of weapons systems.
            (17) Conducting acquisitions without making security 
        resiliency a key discriminator in capability development and 
        contract award decisions could potentially lead to additional 
        losses of technological advantages of the Armed Forces and 
        negate efforts to improve the capabilities of the Armed Forces 
        to meet the National Defense Strategy.
            (18) Software, hardware, and services supply chains have 
        proven to be major means through which adversaries seek to gain 
        access to weapons systems and information and communications 
        technology platforms and systems of the United States.
            (19) Vulnerabilities in these critical areas introduce 
        unacceptable risks to human life and the ability of the Armed 
        Forces to execute the missions the public of the United States 
        expects of them.
            (20) The establishment of the Protecting Critical 
        Technology Task Force of the Department of Defense and the 
        Information and Communication Technology Supply Chain Risk 
        Management Task Force of the Department of Homeland Security is 
        a welcome first step, but the United States Government requires 
        a fundamental security culture change.
            (21) The innovative technologies that will help the Armed 
        Forces, economy, and industry of the United States maintain 
        competitive advantages over the competitors of the United 
        States are developed in private industry and in academia.
            (22) Engagement to find solutions with industry 
        stakeholders and allied countries to mitigate the clear, 
        present, and rapidly evolving threats to the national security 
        of the United States is necessary.
            (23) A national center to unify efforts across the whole of 
        government to strategically warn of and support the mitigation 
        of threats to supply chains and supply chain activities is 
        vital to the cybersecurity, critical infrastructure, and 
        national security of the United States.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) the United States Government should endeavor to deliver 
        warfighting capabilities to operational forces without having 
        critical information or technology wittingly or unwittingly 
        lost, stolen, or modified;
            (2) the Department of Defense and the whole of the United 
        States Government should adapt to the challenges presented by 
        adversaries while maintaining as much transparency with the 
        people of the United States as possible;
            (3) stronger effort should be placed on securing the vast 
        supply chains of the contractors responsible for developing and 
        producing the defense related capabilities of the United 
        States;
            (4) the efforts of the Department of Defense, the 
        Department of Homeland Security, and the Federal Acquisition 
        Security Council to protect critical technologies should be 
        action oriented with clear outcome expectations and chains of 
        accountability;
            (5) technology protection should begin long before a 
        contract is signed between a contractor and the United States 
        Government;
            (6) the United States Government should improve its ability 
        to collaborate to protect both the open research environment 
        and emerging military technologies; and
            (7) the United States Government should focus on supply 
        chain security to ensure that military systems and systems 
        required for sensitive activities are not acquired or operated 
        in a compromised state.

SEC. 3. PLAN FOR STRENGTHENING THE SUPPLY CHAIN INTELLIGENCE FUNCTION.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act, the Director of the National Counterintelligence 
and Security Center, in coordination with the Director of the Defense 
Counterintelligence and Security Agency and other interagency partners, 
shall submit to Congress a plan for strengthening the supply chain 
intelligence function.
    (b) Elements.--The plan submitted under subsection (a) shall 
address the following:
            (1) Such recommendations as the Director of the National 
        Counterintelligence and Security Center may have with respect 
        to--
                    (A) the appropriate workforce model, including 
                size, mix, and seniority, from the elements of the 
                intelligence community and other interagency partners; 
                and
                    (B) the appropriate governance structure within the 
                intelligence community and with interagency partners.
            (2) The budgetary resources necessary to implement the 
        plan.
            (3) The authorities necessary to implement the plan.
    (c) Definition of Intelligence Community.--In this section, the 
term ``intelligence community'' has the meaning given such term in 
section 3 of the National Security Act of 1947 (50 U.S.C. 3003).

SEC. 4. ESTABLISHMENT OF NATIONAL SUPPLY CHAIN INTELLIGENCE CENTER.

    (a) Establishment of Center.--Title IX of the Intelligence 
Authorization Act for Fiscal Year 2003 (50 U.S.C. 3382 et seq.) is 
amended by adding at the end the following:

``SEC. 905. NATIONAL SUPPLY CHAIN INTELLIGENCE CENTER.

    ``(a) Establishment of Center.--There is within the National 
Counterintelligence and Security Center in the Office of the Director 
of National Intelligence a National Supply Chain Intelligence Center.
    ``(b) Director of National Supply Chain Intelligence Center.--There 
is a Director of the National Supply Chain Intelligence Center, who 
shall be appointed by the President, in consultation with the Director 
of National Intelligence and other interagency partners as the 
President considers appropriate.
    ``(c) Center Personnel.--
            ``(1) Senior management.--The Director of the National 
        Supply Chain Intelligence Center shall ensure that the senior 
        management of the Center includes one or more detailees from 
        each of the following:
                    ``(A) The Department of Defense.
                    ``(B) The Department of Justice.
                    ``(C) The Department of Homeland Security.
                    ``(D) The Department of Commerce.
            ``(2) Detail or assignment of personnel.--
                    ``(A) In general.--With the approval of the 
                Director of the Office of Management and Budget, and in 
                consultation with the congressional committees of 
                jurisdiction, the Director of the National Supply Chain 
                Intelligence Center may request of the head of any 
                department, agency, or element of the Federal 
                Government the detail or assignment of personnel from 
                such department, agency, or element to the National 
                Supply Chain Intelligence Center.
                    ``(B) Duties.--Personnel detailed or assigned under 
                subparagraph (A) shall assist the National Supply Chain 
                Intelligence Center in carrying out the primary 
                missions of the Center.
                    ``(C) Terms.--Personnel detailed or assigned under 
                subparagraph (A) shall be assigned or detailed to the 
                National Supply Chain Intelligence Center for a period 
                of not more than 2 years.
                    ``(D) Regular employment.--Any Federal Government 
                employee detailed or assigned under subparagraph (A) 
                shall retain the rights, status, and privileges of his 
                or her regular employment without interruption.
    ``(d) Primary Missions.--The primary missions of the National 
Supply Chain Intelligence Center shall be as follows:
            ``(1) To aggregate all-source intelligence relating to 
        supply chains, including--
                    ``(A) classified and unclassified information;
                    ``(B) threat information; and
                    ``(C) proprietary and sensitive information, 
                including risk and vulnerability information, 
                voluntarily provided by private entities.
            ``(2) To share strategic warnings relating to supply chains 
        or supply chain activities, as the Director of the National 
        Supply Chain Intelligence Center considers appropriate and 
        consistent with security standards for classified information 
        and sensitive proprietary information, among--
                    ``(A) the elements of the intelligence community 
                (as defined in section 3 of the National Security Act 
                of 1947 (50 U.S.C. 3003)), components of the Department 
                of Justice and the Department of Defense, the Federal 
                Acquisition Security Council, and other Federal 
                agencies;
                    ``(B) at-risk industry partners; and
                    ``(C) governments of countries that are allies of 
                the United States.
            ``(3) To serve as the central and shared knowledge resource 
        for--
                    ``(A) known and suspected threats to supply chain 
                activities or supply chain integrity from international 
                groups, companies, countries, or other entities; and
                    ``(B) the goals, strategies, capabilities, and 
                networks of contacts and support of such groups, 
                companies, countries, and other entities.
            ``(4) To perform tasks assigned to the National Supply 
        Chain Intelligence Center by relevant Government supply chain 
        task forces, councils, including the Federal Acquisition 
        Security Council, and other entities.
    ``(e) Annual Reports Required.--The Director of the National Supply 
Chain Intelligence Center shall annually submit to Congress a report, 
with classified annexes as appropriate, on the state of threats to the 
security of supply chains and supply chain activities for United States 
Government acquisitions and replenishment as of the date of the 
submittal of the report.
    ``(f) Funding.--Amounts used to carry out this section shall be 
derived from amounts appropriated or otherwise made available for the 
National Intelligence Program (as defined in section 3 of the National 
Security Act of 1947 (50 U.S.C. 3003)).''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended by inserting after the item relating to section 904 
the following new item:

``Sec. 905. National Supply Chain Intelligence Center.''.
    (c) Sense of Congress.--It is the sense of Congress that the 
Director of the National Supply Chain Intelligence Center should 
implement the recommendations submitted under section 3(b)(1).

SEC. 5. INVESTMENT IN SUPPLY CHAIN SECURITY UNDER DEFENSE PRODUCTION 
              ACT OF 1950.

    (a) In General.--Section 303 of the Defense Production Act of 1950 
(50 U.S.C. 4533) is amended by adding at the end the following:
    ``(h) Investment in Supply Chain Security.--
            ``(1) In general.--The President may make available to an 
        eligible entity described in paragraph (2) payments to increase 
        the security of supply chains and supply chain activities, if 
        the President certifies to Congress not less than 30 days 
        before making such a payment that the payment is in the 
        national security interests of the United States.
            ``(2) Eligible entity.--An eligible entity described in 
        this paragraph is an entity that--
                    ``(A) is organized under the laws of the United 
                States or any jurisdiction within the United States; 
                and
                    ``(B) produces--
                            ``(i) one or more critical components;
                            ``(ii) critical technology; or
                            ``(iii) one or more products for the 
                        increased security of supply chains or supply 
                        chain activities.
            ``(3) Regulations.--
                    ``(A) In general.--Not later than 90 days after the 
                date of the enactment of the Manufacturing, Investment, 
                and Controls Review for Computer Hardware, Intellectual 
                Property, and Supply Act of 2019, the President shall 
                prescribe regulations setting forth definitions for the 
                terms `supply chain' and `supply chain activities' for 
                the purposes of this subsection.
                    ``(B) Scope of definitions.--The definitions 
                required by subparagraph (A)--
                            ``(i) shall encompass--
                                    ``(I) the organization, people, 
                                activities, information, and resources 
                                involved in the delivery and operation 
                                of a product or service used by the 
                                Government; or
                                    ``(II) critical infrastructure as 
                                defined in Presidential Policy 
                                Directive 21 (February 12, 2013; 
                                relating to critical infrastructure 
                                security and resilience); and
                            ``(ii) may include variations for specific 
                        sectors or Government functions.''.
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