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110th Congress                                             Rept. 110-24
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
     NATIONAL SECURITY FOREIGN INVESTMENT REFORM AND STRENGTHENED 
                        TRANSPARENCY ACT OF 2007

                                _______
                                

               February 23, 2007.--Ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 556]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 556) to ensure national security while promoting 
foreign investment and the creation and maintenance of jobs, to 
reform the process by which such investments are examined for 
any effect they may have on national security, to establish the 
Committee on Foreign Investment in the United States, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     9
Background and Need for Legislation..............................    10
Hearings.........................................................    17
Committee Consideration..........................................    17
Committee Votes..................................................    17
Committee Oversight Findings.....................................    18
Performance Goals and Objectives.................................    18
New Budget Authority, Entitlement Authority, and Tax Expenditures    19
Committee Cost Estimate..........................................    19
Congressional Budget Office Estimate.............................    19
Federal Mandates Statement.......................................    21
Advisory Committee Statement.....................................    21
Constitutional Authority Statement...............................    21
Applicability to Legislative Branch..............................    21
Earmark Identification...........................................    21
Exchange of Committee Correspondence.............................    22
Section-by-Section Analysis of the Legislation...................    23
Changes in Existing Law Made by the Bill, as Reported............    25

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``National Security Foreign Investment 
Reform and Strengthened Transparency Act of 2007''.

SEC. 2. UNITED STATES SECURITY IMPROVEMENT AMENDMENTS; CLARIFICATION OF 
                    REVIEW AND INVESTIGATION PROCESS.

  Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 
2170) is amended by striking subsections (a) and (b) and inserting the 
following new subsections:
  ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
          ``(1) Committee.--The term `Committee' means the Committee on 
        Foreign Investment in the United States.
          ``(2) Control.--The term `control' has the meaning given to 
        such term in regulations which the Committee shall prescribe.
          ``(3) Covered transaction.--The term `covered transaction' 
        means any merger, acquisition, 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.
          ``(4) Foreign government-controlled transaction.--The term 
        `foreign government-controlled transaction' means any covered 
        transaction that could result in the control of any person 
        engaged in interstate commerce in the United States by a 
        foreign government or an entity controlled by or acting on 
        behalf of a foreign government.
          ``(5) Clarification.--The term `national security' shall be 
        construed so as to include those issues relating to `homeland 
        security', including its application to critical 
        infrastructure.
  ``(b) National Security Reviews and Investigations.--
          ``(1) National security reviews.--
                  ``(A) In general.--Upon receiving written 
                notification under subparagraph (C) of any covered 
                transaction, or on a motion made under subparagraph (D) 
                with respect to any covered transaction, the President, 
                acting through the Committee, shall review the covered 
                transaction to determine the effects of the transaction 
                on the national security of the United States.
                  ``(B) Control by foreign government.--If the 
                Committee determines that the covered transaction is a 
                foreign government-controlled transaction, the 
                Committee shall conduct an investigation of the 
                transaction under paragraph (2).
                  ``(C) Written notice.--
                          ``(i) In general.--Any party to any covered 
                        transaction may initiate a review of the 
                        transaction under this paragraph by submitting 
                        a written notice of the transaction to the 
                        Chairperson of the Committee.
                          ``(ii) Withdrawal of notice.--No covered 
                        transaction for which a notice was submitted 
                        under clause (i) may be withdrawn from review 
                        unless--
                                  ``(I) a written request for such 
                                withdrawal is submitted by any party to 
                                the transaction; and
                                  ``(II) the request is approved in 
                                writing by the Chairperson, in 
                                consultation with the Vice 
                                Chairpersons, of the Committee.
                          ``(iii) Continuing discussions.--The approval 
                        of a withdrawal request under clause (ii) shall 
                        not be construed as precluding any party to the 
                        covered transaction from continuing informal 
                        discussions with the Committee or any Committee 
                        member regarding possible resubmission for 
                        review pursuant to this paragraph.
                  ``(D) Unilateral initiation of review.--Subject to 
                subparagraph (F), the President, the Committee, or any 
                member acting on behalf of the Committee may move to 
                initiate a review under subparagraph (A) of--
                          ``(i) any covered transaction;
                          ``(ii) any covered transaction that has 
                        previously been reviewed or investigated under 
                        this section, if any party to the transaction 
                        submitted false or misleading material 
                        information to the Committee in connection with 
                        the review or investigation or omitted material 
                        information, including material documents, from 
                        information submitted to the Committee; or
                          ``(iii) any covered transaction that has 
                        previously been reviewed or investigated under 
                        this section, if any party to the transaction 
                        or the entity resulting from consummation of 
                        the transaction intentionally materially 
                        breaches a mitigation agreement or condition 
                        described in subsection (l)(1)(A), and--
                                  ``(I) such breach is certified by the 
                                lead department or agency monitoring 
                                and enforcing such agreement or 
                                condition as an intentional material 
                                breach; and
                                  ``(II) such department or agency 
                                certifies that there is no other remedy 
                                or enforcement tool available to 
                                address such breach.
                  ``(E) Timing.--Any review under this paragraph shall 
                be completed before the end of the 30-day period 
                beginning on the date of the receipt of written notice 
                under subparagraph (C) by the Chairperson of the 
                Committee, or the date of the initiation of the review 
                in accordance with a motion under subparagraph (D).
                  ``(F) Limit on delegation of certain authority.--The 
                authority of the Committee or any member of the 
                Committee to initiate a review under subparagraph (D) 
                may not be delegated to any person other than the 
                Deputy Secretary or an appropriate Under Secretary of 
                the department or agency represented on the committee 
                or by such member (or by a person holding an equivalent 
                position to a Deputy Secretary or Under Secretary).
          ``(2) National security investigations.--
                  ``(A) In general.--In each case in which--
                          ``(i) a review of a covered transaction under 
                        paragraph (1) results in a determination that--
                                  ``(I) the transaction threatens to 
                                impair the national security of the 
                                United States and that threat has not 
                                been mitigated during or prior to the 
                                review of a covered transaction under 
                                paragraph (1); or
                                  ``(II) the transaction is a foreign 
                                government-controlled transaction;
                          ``(ii) a roll call vote pursuant to paragraph 
                        (3)(A) in connection with a review under 
                        paragraph (1) of any covered transaction 
                        results in at least 1 vote by a Committee 
                        member against approving the transaction; or
                          ``(iii) the Director of National Intelligence 
                        identifies particularly complex intelligence 
                        concerns that could threaten to impair the 
                        national security of the United States and 
                        Committee members were not able to develop and 
                        agree upon measures to mitigate satisfactorily 
                        those threats during the initial review period 
                        under paragraph (1),
                the President, acting through the Committee, shall 
                immediately conduct an investigation of the effects of 
                the transaction on the national security of the United 
                States and take any necessary actions in connection 
                with the transaction to protect the national security 
                of the United States.
                  ``(B) Timing.--
                          ``(i) In general.--Any investigation under 
                        subparagraph (A) shall be completed before the 
                        end of the 45-day period beginning on the date 
                        of the investigation commenced.
                          ``(ii) Extensions of time.--The period 
                        established under subparagraph (B) for any 
                        investigation of a covered transaction may be 
                        extended with respect to any particular 
                        investigation by the President or by a rollcall 
                        vote of at least 2/3 of the members of the 
                        Committee involved in the investigation by the 
                        amount of time specified by the President or 
                        the Committee at the time of the extension, not 
                        to exceed 45 days, as necessary to collect and 
                        fully evaluate information relating to--
                                  ``(I) the covered transaction or 
                                parties to the transaction; and
                                  ``(II) any effect of the transaction 
                                that could threaten to impair the 
                                national security of the United States.
                  ``(C) Exception.--Notwithstanding subparagraph 
                (A)(i)(II), an investigation of a foreign government-
                controlled transaction shall not be required under this 
                paragraph if the Secretary of the Treasury, the 
                Secretary of Homeland Security, and the Secretary of 
                Commerce determine, on the basis of the review of the 
                transaction under paragraph (1), that the transaction 
                will not affect the national security of the United 
                States and no agreement or condition is required, with 
                respect to the transaction, to mitigate any threat to 
                the national security (and such authority of each such 
                Secretary may not be delegated to any person other than 
                the Deputy Secretary of the Treasury, of Homeland 
                Security, or of Commerce, respectively).
          ``(3) Approval of chairperson and vice chairpersons 
        required.--
                  ``(A) In general.--A review or investigation under 
                this subsection of a covered transaction shall not be 
                treated as final or complete until the results of such 
                review or investigation are approved by a majority of 
                the members of the Committee in a roll call vote and 
                signed by the Secretary of the Treasury, the Secretary 
                of Homeland Security, and the Secretary of Commerce 
                (and such authority of each such Secretary may not be 
                delegated to any person other than the Deputy Secretary 
                or an appropriate Under Secretary of the Treasury, of 
                Homeland Security, or of Commerce, respectively).
                  ``(B) Additional action required in certain cases.--
                In the case of any roll call vote pursuant to 
                subparagraph (A) in connection with an investigation 
                under paragraph (2) of any foreign government-
                controlled transaction in which there is at least 1 
                vote by a Committee member against approving the 
                transaction, the investigation shall not be treated as 
                final or complete until the findings and report 
                resulting from such investigation are signed by the 
                President (in addition to the Chairperson and the Vice 
                Chairpersons of the Committee under subparagraph (A)).
                  ``(C) Presidential action required in certain 
                cases.--In the case of any covered transaction in which 
                any party to the transaction is--
                          ``(i) a person of a country the government of 
                        which the Secretary of State has determined, 
                        for purposes of section 6(j) of the Export 
                        Administration Act of 1979 (as continued in 
                        effect pursuant to the International Emergency 
                        Economic Powers Act), section 40 of the Arms 
                        Export Control Act, section 620A of the Foreign 
                        Assistance Act of 1961, or other provision of 
                        law, is a government that has repeatedly 
                        provided support for acts of international 
                        terrorism;
                          ``(ii) a government described in clause (i); 
                        or
                          ``(iii) person controlled, directly or 
                        indirectly, by any such government,
                a review or investigation under this subsection of such 
                covered transaction shall not be treated as final or 
                complete until the results of such review or 
                investigation are approved and signed by the President.
          ``(4) Analysis by director of national intelligence.--
                  ``(A) In general.--The Director of National 
                Intelligence shall expeditiously carry out a thorough 
                analysis of any threat to the national security of the 
                United States of any covered transaction, including 
                making requests for information to the Director of the 
                Office of Foreign Assets Control within the Department 
                of the Treasury and the Director of the Financial 
                Crimes Enforcement Network. The Director of National 
                Intelligence also shall seek and incorporate the views 
                of all affected or appropriate intelligence agencies.
                  ``(B) Timing.--The Director of National Intelligence 
                shall be provided adequate time to complete the 
                analysis required under subparagraph (A), including any 
                instance described in paragraph (2)(A)(iii).
                  ``(C) Independent role of director.--The Director of 
                National Intelligence shall not be a member of the 
                Committee and shall serve no policy role with the 
                Committee other than to provide analysis under 
                subparagraph (A) in connection with a covered 
                transaction.
          ``(5) Submission of additional information.--No provision of 
        this subsection shall be construed as prohibiting any party to 
        a covered transaction from submitting additional information 
        concerning the transaction, including any proposed 
        restructuring of the transaction or any modifications to any 
        agreements in connection with the transaction, while any review 
        or investigation of the transaction is on-going.
          ``(6) Regulations.--Regulations prescribed under this section 
        shall include standard procedures for--
                  ``(A) submitting any notice of a proposed or pending 
                covered transaction to the Committee;
                  ``(B) submitting a request to withdraw a proposed or 
                pending covered transaction from review; and
                  ``(C) resubmitting a notice of proposed or pending 
                covered transaction that was previously withdrawn from 
                review.''.

SEC. 3. STATUTORY ESTABLISHMENT OF THE COMMITTEE ON FOREIGN INVESTMENT 
                    IN THE UNITED STATES.

  (a) In General.--Section 721 of the Defense Production Act of 1950 
(50 U.S.C. App. 2170) is amended by striking subsection (k) and 
inserting the following new subsection:
  ``(k) 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 shall be a multi-agency committee to carry out this 
        section and such other assignments as the President may 
        designate.
          ``(2) Membership.--The Committee shall be comprised of the 
        following members or the designee of any such member:
                  ``(A) The Secretary of the Treasury.
                  ``(B) The Secretary of Homeland Security.
                  ``(C) The Secretary of Commerce.
                  ``(D) The Secretary of Defense.
                  ``(E) The Secretary of State.
                  ``(F) The Attorney General.
                  ``(G) The Secretary of Energy.
                  ``(H) The Chairman of the Council of Economic 
                Advisors.
                  ``(I) The United States Trade Representative.
                  ``(J) The Director of the Office of Management and 
                Budget.
                  ``(K) The Director of the National Economic Council.
                  ``(L) The Director of the Office of Science and 
                Technology Policy.
                  ``(M) The President's Assistant for National Security 
                Affairs.
                  ``(N) Any other designee of the President from the 
                Executive Office of the President.
          ``(3) Chairperson; vice chairpersons.--The Secretary of the 
        Treasury shall be the Chairperson of the Committee. The 
        Secretary of Homeland Security and the Secretary of Commerce 
        shall be the Vice Chairpersons of the Committee.
          ``(4) Other members.--Subject to subsection (b)(4)(B), the 
        Chairperson of the Committee shall involve the heads of such 
        other Federal departments, agencies, and independent 
        establishments in any review or investigation under subsection 
        (b) as the Chairperson, after consulting with the Vice 
        Chairpersons, determines to be appropriate on the basis of the 
        facts and circumstances of the transaction under investigation 
        (or the designee of any such department or agency head).
          ``(5) Meetings.--The Committee shall meet upon the direction 
        of the President or upon the call of the Chairperson of the 
        Committee without regard to section 552b of title 5, United 
        States Code (if otherwise applicable).
          ``(6) Collection of evidence.--Subject to subsection (c), the 
        Committee may, for the purpose of carrying out this section--
                  ``(A) sit and act at such times and places, take such 
                testimony, receive such evidence, administer such 
                oaths; and
                  ``(B) require the attendance and testimony of such 
                witnesses and the production of such books, records, 
                correspondence, memoranda, papers, and documents as the 
                Chairperson of the Committee may determine advisable.
          ``(7) Authorization of appropriations.--There are authorized 
        to be appropriated to the Secretary of the Treasury for each of 
        fiscal years 2008, 2009, 2010, and 2011 expressly and solely 
        for the operations of the Committee that are conducted by the 
        Secretary, the sum of $10,000,000.''.
  (b) Technical and Conforming Amendment.--The first sentence of 
section 721(c) of the Defense Production Act of 1950 (50 U.S.C. App. 
2170(c)) is amended--
          (1) by striking ``material filed with'' and inserting 
        ``material, including proprietary business information, filed 
        with, or testimony presented to,''; and
          (2) by striking ``or documentary material'' the second place 
        such term appears and inserting ``, documentary material, or 
        testimony''.

SEC. 4. ADDITIONAL FACTORS REQUIRED TO BE CONSIDERED.

  Section 721(f) of the Defense Production Act of 1950 (50 U.S.C. App. 
2170(f)) is amended--
          (1) in the matter preceding paragraph (1)--
                  (A) by striking ``may'' and inserting ``shall''; and
                  (B) by striking ``among other factors'';
          (2) by striking ``and'' at the end of paragraph (4);
          (3) by striking the period at the end of paragraph (5) and 
        inserting a semicolon; and
          (4) by adding at the end the following new paragraphs:
          ``(6) whether the covered transaction has a security-related 
        impact on critical infrastructure in the United States;
          ``(7) whether the covered transaction is a foreign 
        government-controlled transaction; and
          ``(8) such other factors as the President or the President's 
        designee may determine to be appropriate, generally or in 
        connection with a specific review or investigation.''.

SEC. 5. NONWAIVER OF SOVEREIGN IMMUNITY.

  Section 721(d) of the Defense Production Act of 1950 (50 U.S.C. App. 
2170(d)) is amended by adding at the end the following new sentence: 
``The United States shall not be held liable for any losses or other 
expenses incurred by any party to a covered transaction as a result of 
actions taken under this section after a covered transaction has been 
consummated if the party did not submit a written notice of the 
transaction to the Chairperson of the Committee under subsection 
(b)(1)(C) or did not wait until the completion of any review or 
investigation under subsection (b), or the end of the 15-day period 
referred to in this subsection, before consummating the transaction.''.

SEC. 6. MITIGATION, TRACKING, AND POST-CONSUMMATION MONITORING AND 
                    ENFORCEMENT.

  Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 
2170) is amended by inserting after subsection (k) (as amended by 
section 3 of this Act) the following new subsection:
  ``(l) Mitigation, Tracking, and Postconsummation Monitoring and 
Enforcement.--
          ``(1) Mitigation.--
                  ``(A) In general.--The Committee or any agency 
                designated by the Chairperson and Vice Chairpersons 
                may, on behalf of the Committee, negotiate, enter into 
                or impose, and enforce any agreement or condition with 
                any party to a covered transaction in order to mitigate 
                any threat to the national security of the United 
                States that arises as a result of the transaction.
                  ``(B) Risk-based analysis required.--Any agreement 
                entered into or condition imposed under subparagraph 
                (A) shall be based on a risk-based analysis of the 
                threat to national security of the covered transaction.
          ``(2) Tracking authority for withdrawn notices.--
                  ``(A) In general.--If any written notice of a covered 
                transaction that was submitted to the Committee under 
                this section is withdrawn before any review or 
                investigation by the Committee under subsection (b) is 
                completed, the Committee shall establish, as 
                appropriate--
                          ``(i) interim protections to address specific 
                        concerns with such transaction that have been 
                        raised in connection with any such review or 
                        investigation pending any resubmission of any 
                        written notice under this section with respect 
                        to such transaction and further action by the 
                        President under this section;
                          ``(ii) specific timeframes for resubmitting 
                        any such written notice; and
                          ``(iii) a process for tracking any actions 
                        that may be taken by any party to the 
                        transaction, in connection with the 
                        transaction, before the notice referred to in 
                        clause (ii) is resubmitted.
                  ``(B) Designation of agency.--The Committee may 
                designate 1 or more appropriate Federal departments or 
                agencies, other than any entity of the intelligence 
                community (as defined in the National Security Act of 
                1947), as a lead agency to carry out, on behalf of the 
                Committee, the requirements of subparagraph (A) with 
                respect to any covered transaction that is subject to 
                such subparagraph.
          ``(3) Negotiation, modification, monitoring, and 
        enforcement.--
                  ``(A) Designation of agency.--The Committee shall 
                designate 1 or more Federal departments or agencies as 
                the lead agency to negotiate, modify, monitor, and 
                enforce, on behalf of the Committee, any agreement 
                entered into or condition imposed under paragraph (1) 
                with respect to a covered transaction based on the 
                expertise with and knowledge of the issues related to 
                such transaction on the part of the designated 
                department or agency.
                  ``(B) Reporting by designated agency.--
                          ``(i) Implementation reports.--Each Federal 
                        department or agency designated by the 
                        Committee as a lead agency under subparagraph 
                        (A) in connection with any agreement entered 
                        into or condition imposed under paragraph (1) 
                        with respect to a covered transaction shall--
                                  ``(I) provide periodic reports to the 
                                Chairperson and Vice Chairpersons of 
                                the Committee on the implementation of 
                                such agreement or condition; and
                                  ``(II) require, as appropriate, any 
                                party to the covered transaction to 
                                report to the head of such department 
                                or agency (or the designee of such 
                                department or agency head) on the 
                                implementation or any material change 
                                in circumstances.
                          ``(ii) Modification reports.--Any Federal 
                        department or agency designated by the 
                        Committee as a lead agency under subparagraph 
                        (A) in connection with any agreement entered 
                        into or condition imposed with respect to a 
                        covered transaction shall--
                                  ``(I) provide periodic reports to the 
                                Chairperson and Vice Chairpersons of 
                                the Committee on any modification to 
                                any such agreement or condition imposed 
                                with respect to the transaction; and
                                  ``(II) ensure that any significant 
                                modification to any such agreement or 
                                condition is reported to the Director 
                                of National Intelligence and to any 
                                other Federal department or agency that 
                                may have a material interest in such 
                                modification.''.

SEC. 7. INCREASED OVERSIGHT BY THE CONGRESS.

  (a) Report on Actions.--Section 721(g) of the Defense Production Act 
of 1950 (50 U.S.C. App. 2170) is amended to read as follows:
  ``(g) Reports to the Congress.--
          ``(1) Reports on completed committee investigations.--
                  ``(A) In general.--Not later than 5 days after the 
                completion of a Committee investigation of a covered 
                transaction under subsection (b)(2), or, if the 
                President indicates an intent to take any action 
                authorized under subsection (d) with respect to the 
                transaction, after the end of 15-day period referred to 
                in subsection (d), the Chairperson or a Vice 
                Chairperson of the Committee shall submit a written 
                report on the findings or actions of the Committee with 
                respect to such investigation, the determination of 
                whether or not to take action under subsection (d), an 
                explanation of the findings under subsection (e), and 
                the factors considered under subsection (f), with 
                respect to such transaction, to--
                          ``(i) the Majority Leader and the Minority 
                        Leader of the Senate;
                          ``(ii) the Speaker and the Minority Leader of 
                        the House of Representatives; and
                          ``(iii) the chairman and ranking member of 
                        each committee of the House of Representatives 
                        and the Senate with jurisdiction over any 
                        aspect of the covered transaction and its 
                        possible effects on national security, 
                        including the Committee on Foreign Affairs, the 
                        Committee on Financial Services, and the 
                        Committee on Energy and Commerce of the House 
                        of Representatives.
                  ``(B) Notice and briefing requirement.--If a written 
                request for a briefing on a covered transaction is 
                submitted to the Committee by any Senator or Member of 
                Congress who receives a report on the transaction under 
                subparagraph (A), the Chairperson or a Vice Chairperson 
                (or such other person as the Chairperson or a Vice 
                Chairperson may designate) shall provide 1 classified 
                briefing to each House of the Congress from which any 
                such briefing request originates in a secure facility 
                of appropriate size and location that shall be open 
                only to the Majority Leader and the Minority Leader of 
                the Senate, the Speaker and the Minority Leader of the 
                House of Representatives, (as the case may be) the 
                chairman and ranking member of each committee of the 
                House of Representatives or the Senate (as the case may 
                be) with jurisdiction over any aspect of the covered 
                transaction and its possible effects on national 
                security, including the Committee on International 
                Relations, the Committee on Financial Services, and the 
                Committee on Energy and Commerce of the House of 
                Representatives, and appropriate staff members who have 
                security clearance.
          ``(2) Application of other provision.--
                  ``(A) In general.--The disclosure of information 
                under this subsection shall be consistent with the 
                requirements of subsection (c). Members of Congress and 
                staff of either House or any committee of the Congress 
                shall be subject to the same limitations on disclosure 
                of information as are applicable under such subsection.
                  ``(B) Proprietary information.--Proprietary 
                information which can be associated with a particular 
                party to a covered transaction shall be furnished in 
                accordance with subparagraph (A) only to a committee of 
                the Congress and only when the committee provides 
                assurances of confidentiality, unless such party 
                otherwise consents in writing to such disclosure.''.
  (b) Annual Report.--Section 721 of the Defense Production Act of 1950 
(50 U.S.C. App. 2170) is amended by inserting after subsection (l) (as 
added by section 6 of this Act) the following new subsection:
  ``(m) Annual Report to the Congress.--
          ``(1) In general.--The Chairperson of the Committee shall 
        transmit a report to the chairman and ranking member of each 
        committee of the House of Representatives and the Senate with 
        jurisdiction over any aspect of the report, including the 
        Committee on International Relations, the Committee on 
        Financial Services, and the Committee on Energy and Commerce of 
        the House of Representatives, before July 31 of each year on 
        all the reviews and investigations of covered transactions 
        completed under subsection (b) during the 12-month period 
        covered by the report.
          ``(2) Contents of report relating to covered transactions.--
        The report under paragraph (1) shall contain the following 
        information with respect to each covered transaction:
                  ``(A) A list of all notices filed and all reviews or 
                investigations completed during the period with basic 
                information on each party to the transaction, the 
                nature of the business activities or products of all 
                pertinent persons, along with information about the 
                status of the review or investigation, information on 
                any withdrawal from the process, any rollcall votes by 
                the Committee under this section, any extension of time 
                for any investigation, and any presidential decision or 
                action under this section.
                  ``(B) Specific, cumulative, and, as appropriate, 
                trend information on the numbers of filings, 
                investigations, withdrawals, and presidential decisions 
                or actions under this section.
                  ``(C) Cumulative and, as appropriate, trend 
                information on the business sectors involved in the 
                filings which have been made, and the countries from 
                which the investments have originated.
                  ``(D) Information on whether companies that withdrew 
                notices to the Committee in accordance with subsection 
                (b)(1)(C)(ii) have later re-filed such notices, or, 
                alternatively, abandoned the transaction.
                  ``(E) The types of security arrangements and 
                conditions the Committee has used to mitigate national 
                security concerns about a transaction.
                  ``(F) A detailed discussion of all perceived adverse 
                effects of covered transactions on the national 
                security or critical infrastructure of the United 
                States that the Committee will take into account in its 
                deliberations during the period before delivery of the 
                next such report, to the extent possible.
          ``(3) Contents of report relating to critical technologies.--
                  ``(A) In general.--In order to assist the Congress in 
                its oversight responsibilities with respect to this 
                section, the President and such agencies as the 
                President shall designate shall include in the annual 
                report submitted under paragraph (1) the following:
                          ``(i) An evaluation of 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.
                          ``(ii) An evaluation of whether there are 
                        industrial espionage activities directed or 
                        directly assisted by foreign governments 
                        against private United States companies aimed 
                        at obtaining commercial secrets related to 
                        critical technologies.
                  ``(B) Critical technologies defined.--For purposes of 
                this paragraph, 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 
                essential to national defense or national security 
                identified pursuant to this section.
                  ``(C) Release of unclassified study.--That portion of 
                the annual report under paragraph (1) that is required 
                by this paragraph may be classified. An unclassified 
                version of that portion of the report shall be made 
                available to the public.''.
  (c) Study and Report.--
          (1) Study required.--Before the end of the 120-day period 
        beginning on the date of the enactment of this Act, the 
        Secretary of the Treasury, in consultation with the Secretary 
        of State and the Secretary of Commerce, shall conduct a study 
        on investments in the United States, especially investments in 
        critical infrastructure and industries affecting national 
        security, by--
                  (A) foreign governments, entities controlled by or 
                acting on behalf of a foreign government, or persons of 
                foreign countries which comply with any boycott of 
                Israel; or
                  (B) foreign governments, entities controlled by or 
                acting on behalf of a foreign government, or persons of 
                foreign countries which do not ban organizations 
                designated by the Secretary of State as foreign 
                terrorist organizations.
          (2) Report.--Before the end of the 30-day period beginning 
        upon completion of the study under paragraph (1) or in the next 
        annual report under section 721(m) of the Defense Production 
        Act of 1950 (as added by subsection (b)), the Secretary of the 
        Treasury shall submit a report to the Congress, for transmittal 
        to all appropriate committees of the Senate and the House of 
        Representatives, containing the findings and conclusions of the 
        Secretary with respect to the study, together with an analysis 
        of the effects of such investment on the national security of 
        the United States and on any efforts to address those effects.

SEC. 8. CERTIFICATION OF NOTICES AND ASSURANCES.

  Section 721 of the Defense Production Act of 1950 (50 U.S.C. App. 
2170) is amended by inserting after subsection (m) (as added by section 
7(b) of this Act) the following new subsection:
  ``(n) Certification of Notices and Assurances.--Each notice required 
to be submitted, by a party to a covered transaction, to the President 
or the President's designee under this section and regulations 
prescribed under such section, and any information submitted by any 
such party in connection with any action for which a report is required 
pursuant to paragraph (3)(B)(ii) of subsection (l) with respect to the 
implementation of any mitigation agreement or condition described in 
paragraph (1)(A) of such subsection, or any material change in 
circumstances, shall be accompanied by a written statement by the chief 
executive officer or the designee of the person required to submit such 
notice or information certifying that, to the best of the person's 
knowledge and belief--
          ``(1) the notice or information submitted fully complies with 
        the requirements of this section or such regulation, agreement, 
        or condition; and
          ``(2) the notice or information is accurate and complete in 
        all material respects.''.

SEC. 9. REGULATIONS.

  Section 721(h) of the Defense Production Act of 1950 (50 U.S.C. App. 
2170(h)) is amended to read as follows:
  ``(h) Regulations.--The President shall direct the issuance of 
regulations to carry out this section. Such regulations shall, to the 
extent possible, minimize paperwork burdens and shall to the extent 
possible coordinate reporting requirements under this section with 
reporting requirements under any other provision of Federal law.''.

SEC. 10. EFFECT ON OTHER LAW.

  Section 721(i) of the Defense Production Act of 1950 (50 U.S.C. App. 
2170(i)) is amended to read as follows:
  ``(i) Effect on Other Law.--No provision of this section shall be 
construed as altering or affecting any other authority, process, 
regulation, investigation, enforcement measure, or review provided by 
or established under any other provision of Federal law, including the 
International Emergency Economic Powers Act, or any other authority of 
the President or the Congress under the Constitution of the United 
States.''.

SEC. 11. EFFECTIVE DATE.

  The amendments made by this Act shall apply after the end of the 90-
day period beginning on the date of the enactment of this Act.

                          Purpose and Summary

    H.R. 556, the ``National Security Foreign Investment Reform 
and Strengthening Transparency Act of 2007'' (``National 
Security FIRST'') strengthens national security and promotes a 
policy of openness toward foreign investment. The bill 
clarifies and provides a statutory basis for the process by 
which the Federal government reviews foreign investments in the 
United States for their national security implications. The 
bill, introduced January 18, 2007, makes a number of reforms to 
Section 721 of the Defense Production Act of 1950 (DPA)--the 
so-called Exon-Florio amendment to the DPA--improving a review 
process that has existed in various iterations since 1975.
    The legislation improves accountability for the process 
within the Administration and to Congress, and codifies the 
existence of the Committee on Foreign Investment in the United 
States (CFIUS), adding the Secretaries of Commerce and Homeland 
Security as vice chairmen of the interagency review panel.
    It establishes clear and transparent processes for 
examining proposed investment, designing and monitoring 
arrangements to mitigate any threat to national security short 
of refusing the transaction, and reporting to Congress 
regularly and clearly on CFIUS actions so that Congress can 
perform its necessary oversight.
    The bill addresses apparent voids in the current 
examination process--for example, establishing monitoring and 
interim security measures if a transaction is withdrawn from 
the examination process, even temporarily--and ensures that 
transactions may only be considered approved after the chairman 
and vice chairmen of CFIUS sign off.
    Additionally, addressing what many in Congress view as a 
potential misreading of Congressional intent in the so-called 
``Byrd amendment'' to Exon-Florio, the bill ensures that 
transactions involving companies controlled by foreign 
governments will receive heightened scrutiny by CFIUS.
    The bill changes current practice, ensuring that a list of 
factors that currently ``may'' be considered while examining a 
proposal, in the future ``shall'' be considered, and adds 
security threats to critical infrastructure as a factor to be 
considered.
    Finally, the bill adds a formal analysis of every proposed 
transaction, to be performed by the Director of National 
Intelligence, but makes clear that the director has no policy 
role in the examination process, and makes appropriate 
provision for protection of classified and proprietary business 
information related to a transaction.

                  Background and Need for Legislation

    CFIUS History and Procedures. Formed under a 1975 executive 
order to monitor U.S. policy on foreign direct investments, the 
Committee on Foreign Investment in the United States is an 
interagency committee chaired by the Department of the 
Treasury. Other participating agencies are the Department of 
Commerce; Department of State; Department of Homeland Security; 
Department of Defense; Department of Justice; National Security 
Council; Council of Economic Advisors; Office of Management & 
Budget; Office of Science and Technology Policy; U.S. Trade 
Representative; National Economic Council; and Council of 
Economic Advisors. In 1988, as part of the Omnibus Trade Act, 
Congress passed the Exon-Florio amendment to the Defense 
Production Act of 1950. Under Exon-Florio, the President is 
authorized to suspend or prohibit foreign acquisitions of U.S. 
companies if the foreign controlling interest might threaten 
national security. The President delegated the Exon-Florio 
investigative authority to CFIUS.
    Exon-Florio established a four-step process for examining a 
foreign acquisition: (1) voluntary notice by the companies; (2) 
a 30-day review to identify any national security concerns; (3) 
an optional 45-day investigation to determine whether 
identified concerns require more extensive mitigation efforts 
or a recommendation to the President for possible action; and 
(4) a Presidential decision to permit, suspend, or prohibit an 
acquisition in those instances where potential national 
security concerns are identified.
    During the standard review period, the CFIUS responds to 
the requesting company within 30 days after each CFIUS 
component agency has reviewed the proposed transaction. In 
practice, companies often ``pre-file'' with CFIUS, providing 
information about the transaction in order to ensure that CFIUS 
has all necessary information during the formal review period. 
Further, companies may withdraw from the formal review in order 
to address concerns on the condition that they re-file promptly 
with CFIUS. Therefore, while the vast majority of CFIUS 
transactions are approved by the end of the 30-day review, the 
total time devoted to a transaction is often much longer.
    The 30-day review period is equal to the antitrust review 
period under the Hart-Scott-Rodino Anti-Trust Improvements Act 
procedures. This equivalence is important in ensuring that 
foreign investors are not subjected to disparate treatment 
relative to their domestic competitors in the vast majority of 
cases where the foreign investment does not pose significant 
national security concerns and any concerns are addressed 
through mitigation agreements within the 30-day period.
    If national security concerns have not been resolved during 
the 30-day review, the transaction is subject to a second stage 
45-day investigation. At the end of a 45-day investigation, the 
transaction is sent to the President for a decision, 
accompanied by a CFIUS report and recommendation. Any 
transaction that goes to the President must be reported to 
Congress. Transactions that enter investigation may also be 
terminated before reaching the President, with the companies 
voluntarily withdrawing and abandoning the investment. 
Presidential decisions are also avoided in cases where a 
mitigation agreement has been reached and the companies 
withdraw from investigation and immediately re-file.
    Mitigation agreements, which are contracts with CFIUS 
entered into by the parties to the transaction, are an 
important element of the CFIUS review and investigation 
process. These agreements are intended to mitigate possible 
national security threats posed by a transaction short of 
requiring that the parties abandon the transaction altogether. 
The Department of Defense has for many years used various types 
of mitigation agreements to address the impact of foreign 
ownership and control over companies that have classified 
contracts with the Pentagon. In recent years, the Departments 
of Justice and Homeland Security have also increasingly relied 
on mitigation agreements.
    Of necessity, the reviews and investigations, which contain 
classified evaluations of national security vulnerabilities as 
well as extensive proprietary business information, are 
conducted in secret. Given this lack of transparency, there 
have been concerns over the years about CFIUS's accountability 
to Congress and to the public, particularly with regard to 
fundamental questions of whether CFIUS policies are consistent 
with the statute, executive orders, and regulations that govern 
its operations and whether CFIUS policies are applied 
consistently from transaction to transaction.
    CFIUS has explicit authority in the regulations (31 CFR 
800.601(e) to reopen a case in the event that CFIUS discovers 
there has been a material misstatement or omission in the 
information provided by the parties to the transaction. CFIUS 
agencies also have all of the remedies that are normally 
available under a contract in order to enforce the terms of the 
mitigation agreement. In addition, in a large number of CFIUS 
cases, and particularly those involving the Defense Department, 
CFIUS approvals can be effectively nullified simply by ending 
the federal agency's contracting relationship with the company. 
Defense-related contracts are often a central element of CFIUS 
transactions, so the threat of being denied a contract going 
forward is a powerful tool that the government has at its 
disposal.
    Finally, and exclusive of any powers derived from the Exon- 
Florio amendment or related regulations or executive orders, 
the President ultimately reserves the right in any transaction 
and at any time to reverse a transaction for national security 
purposes. This authority derives both from the International 
Emergency Economic Powers Act and his inherent powers in the 
conduct of foreign affairs. Although interventions by the 
President would be extraordinary, they do provide an ultimate 
backstop against national security threats that might arise 
despite a CFIUS review and approval.
    Concerns about CFIUS. In January of 2006, CFIUS approved 
Dubai Ports World's (DPW) purchase of management operations at 
major U.S. ports. In the face of strong congressional 
opposition, the Dubai government-owned company agreed to sell 
its U.S. port interests, but the episode brought to light a 
number of shortcomings in the CFIUS process. The Financial 
Services Committee examined these issues during hearings on 
March 1, April 27, and May 17, 2006, and February 7, 2007.
    The Committee has relied on expert testimony from public 
and private officials to assess concerns about CFIUS policies 
and procedures. Some of those concerns were examined in a 
report by the Government Accountability Office (GAO) released 
in September 2005 and subsequent reporting contained in the 
January 2007 ``High Risk Series'' update. The GAO expressed 
concern about a lack of coordination in assessing security 
threats, an overly narrow working definition of national 
security, the lack of clear and consistent procedures for 
monitoring transactions that have been withdrawn from CFIUS, 
and the lack of adequate reporting to Congress on CFIUS 
activities.
    A concern raised by the ports transaction was that the 
CFIUS approval at the end of a 30-day review did not appear to 
give the transaction, involving Dubai Ports World, a company 
controlled by a foreign government, the heightened scrutiny 
that such transactions are supposed to receive according to the 
provisions of the so-called ``Byrd Amendment''. Critics 
suggested that appropriate scrutiny would necessitate a second 
stage investigation.
    The ports case also raised concerns about the level of 
seniority at which key CFIUS decisions were being made, 
particularly for cases involving companies controlled by 
foreign governments. The Committee determined in its hearings 
that senior level agency officials participating in the CFIUS 
process only learned of the transaction and the CFIUS approval 
of it after the fact through media reports.
    Finally, the ports case revealed a serious deficiency in 
CFIUS reporting to Congress. Because the formal CFIUS 
procedures only require reporting to Congress when a case has 
gone to the President at the end of an investigation, the lack 
of virtually any such cases has meant almost no communications 
to Congress from CFIUS. The problem was compounded by the 
failure of the Treasury Department to produce a 
congressionally-mandated quadrennial report on changes in the 
nature of foreign investment in the United States.
    In response to Congressional and public criticism related 
to the DPW case in 2006, CFIUS agencies pledged to address 
flaws in the CFIUS process identified by Congress. Overall 
statistics and public disclosures of the terms attached to the 
approval of particular transactions suggest that CFIUS 
operations have changed since the DPW case. There were 113 
transactions filed with CFIUS in 2006, up 74 percent from the 
previous year--because companies seek CFIUS consideration 
voluntarily, this increase reflects greater sensitivity among 
foreign investors, which in turn may reflect a more aggressive 
stance from CFIUS. CFIUS conducted seven second-stage 
investigations, which equaled the number of such investigations 
in the prior five years combined. There was also an increase in 
the number of companies withdrawing from CFIUS reviews and 
investigations, which suggests a higher degree of scrutiny: 
either companies withdrew for the purpose of terminating the 
underlying transaction or in order to restructure the 
transaction to address CFIUS concerns.
    The number of cases in which CFIUS approved transactions 
with conditions attached through mitigation agreements also 
increased. It is unclear whether the overall level of 
conditions imposed in these agreements has increased, but 
foreign investment advocates have expressed concern about what 
they've described as an unprecedented level of restrictiveness 
in a number of cases involving private companies from European 
countries.
    Finally, CFIUS has increased its communications with 
Congress. CFIUS agencies now notify Congressional leadership 
and committees of jurisdiction upon completion of CFIUS action 
on each transaction, and CFIUS agencies provide quarterly 
briefings to the committees of jurisdiction. Treasury also 
delivered the long-overdue quadrennial report on CFIUS-related 
issues to Congress as required under the Defense Production Act 
of 1950.
    Despite these changes after the DPW case, CFIUS has not 
fully addressed key problems identified by Congress. Key 
concerns raised by the DPW case included a lack of senior-level 
involvement in CFIUS decision-making, failures in 
communications to Congress, and ambiguity in the standards by 
which CFIUS determines the need for second-stage investigations 
as well as in the procedures for seeking, monitoring, and 
enforcing mitigation agreements. The Committee believes that 
passage of H.R. 556 will not only implement needed reforms that 
will strengthen national security, but will also return the 
certainty and predictability to the CFIUS process that 
legitimate foreign investors are seeking. The Committee also 
believes that passage of the legislation will help to address 
concerns regarding retaliatory actions on the part of other 
countries with regard to the treatment of investments from the 
United States.
    The Legislation. The problems identified by the Financial 
Services Committee in 2006 were first addressed in a bipartisan 
reform bill, H.R. 5337, which was approved by the Committee and 
passed by a unanimous vote (424-0) in the House of 
Representatives in 2006. The Senate approved its own CFIUS 
reform bill, but the two bills were not reconciled before the 
end of the 109th Congress.
    In the 110th Congress, on January 18, 2007, Rep. Carolyn 
Maloney reintroduced the legislation that passed the House in 
2006. The text of H.R. 556 as introduced was identical to H.R. 
5337 as it was passed in 2006. The Committee held a hearing on 
H.R. 556 on February 7, 2007, and received input on the bill 
from the Administration, national security experts, and 
representatives from the foreign investment community. These 
witnesses suggested a number of changes to the bill, some of 
which were addressed in a manager's amendmentto the bill, which 
was agreed to when the Committee marked up H.R. 556 on February 13, 
2007.
    H.R. 556, the National Security FIRST Act of 2007, seeks to 
address legitimate concerns about CFIUS procedures and 
policies, while also providing statutory clarity so that any 
uncertainty that might adversely affect the U.S. investment 
climate is addressed. It creates a ``regular order'' process by 
which all transactions that have been temporarily withdrawn 
from CFIUS are closely monitored and establishes a clear 
process by which any potential security issues could be 
addressed along with a clear and permanent process of post-
transaction monitoring. The bill seeks to increase 
Administration accountability, make it far easier for Congress 
to perform its necessary oversight of the CFIUS process, better 
protect classified and proprietary business information 
involved in the examination process--all without creating any 
unnecessary new barriers to normal investment in the United 
States. The bill envisions a process in which a threat analysis 
would be conducted by the Director of National Intelligence 
(DNI)--who would not be a member of CFIUS and who would play no 
policy role--and decisions made in such a way that no 
individual CFIUS member's concerns might be masked or ignored. 
Additionally, the CFIUS chairman and vice-chairmen (or their 
deputies or appropriate under secretaries) are required to sign 
all CFIUS decisions, ensuring that while the review or 
investigation process remains objective, there is a clear and 
direct senior-level responsibility for CFIUS decisions. The 
Committee specifically requires that the DNI make requests for 
information from the Office of Foreign Assets control and the 
Financial Crimes Enforcement Network, to determine any 
terrorism, sanction or financial crime nexus with funding 
sources or principals in a transaction, and requires the DNI to 
affirmatively check with all national intelligence sources, 
particularly the Defense Intelligence Agency, and incorporate 
any pertinent information from them in his report to CFIUS.
    Regarding the provision outlining the process for the 
development of the Director of National Intelligence's 
intelligence analysis, the bill approved by the Committee 
requires that the DNI be provided ``adequate time'' in order to 
complete the intelligence assessment. The Committee expects 
that the DNI shall do a thorough job of providing CFIUS with 
intelligence analysis and that, particularly for complex cases, 
the DNI shall be given adequate time to conduct its analysis. 
The Committee also expects that CFIUS will consider if all of 
those concerns have been adequately addressed in a 30-day 
review, or if a second-stage investigation is necessary. The 
Committee recognizes that there are a number of transactions 
every year involving acquisitions by privately-owned companies 
from the United States' closest allies for which the DNI will 
be able to complete its analysis in short order relative to 
more complex cases, particularly if CFIUS frequently has 
previously reviewed and approved transactions from those 
acquirers.
    The legislation reinforces CFIUS's capacity to refuse, 
suspend, modify or reverse any transaction if a written notice 
of such transaction is not filed with CFIUS or if there is an 
intentional material omission or falsehood in any filing with 
the CFIUS or an intentional material breach in any post-
transaction mitigation agreement, and establishes a formal 
requirement that all filings with CFIUS must be complete and 
accurate to the best of the filing party's ability. Thus, the 
Committee establishes a clear signal that all violations of 
such notice certification should be considered in the context 
of Title 18, Section 1001, and all intentional breaches or 
misstatements could also lead to severe modification or 
unwinding of any transaction at any time.
    The bill establishes a mechanism by which CFIUS can 
unilaterally reopen a transaction that had previously been 
approved. The Committee believes this is an appropriate and 
important tool for CFIUS, which will only be used in 
exceptional circumstances. The bill requires important 
procedural safeguards to ensure that this tool is not abused--
among other safeguards, it requires, for example, that the 
decision to reopen a case is made at the same level of 
seniority as is required in the bill for the approval of 
transactions.
    H.R. 556 makes clear that national security encompasses 
national security threats to critical U.S. infrastructure, 
including energy-related infrastructure. The Committee expects 
that acquisitions of U.S. energy companies or assets by foreign 
governments or companies controlled by foreign governments--
including any instance in which such foreign government has 
used energy assets to interfere with or influence policies or 
economic conditions in other countries in ways that threaten 
the national security of those countries--will be reviewed 
closely for their national security impact. If such 
acquisitions raise legitimate concerns about threats to U.S. 
national security, appropriate protections as set forth in the 
statute should be instituted including potentially the 
prohibition of the transaction.
    The Committee expects, however, that such determinations 
will be objective, based upon criteria that are reasonably 
related to protecting the security of the United States while 
encouraging and respecting a general policy of openness toward 
foreign investment, a policy that is reflected in various 
international agreements to which the United States and other 
countries are parties. The Committee notes that the carefully 
prescribed and focused CFIUS procedures enshrined in this 
legislation stand in stark contrast to actions taken by some 
foreign governments, where expropriations of assets, often in 
the energy sector, have occurred arbitrarily, without 
justification, and without recompense for U.S. investors. The 
Committee rejects in the strongest possible terms any 
suggestion that CFIUS reforms contained in H.R. 556 represent a 
mistreatment of foreign investors and that there is equivalence 
between CFIUS reform efforts and the actions of foreign 
governments that violate international agreements on the 
treatment of foreign investors or otherwise seek to close broad 
sectors of their economies to foreign investment for purposes 
unrelated to national security. The Committee will continue in 
its long-standing efforts to seek to ensure that U.S. investors 
are treated fairly in foreign markets and that foreign 
governments honor their commitments in international 
agreements.
    The Committee expects that CFIUS will consider all aspects 
of a covered transaction to determine if the investment 
threatens to impair national security. The participation by 
foreign governments or companies in an embargo, boycott, or 
blockade of vital allies of the United States, such as Israel, 
or the failure of foreign governments to ban groups the 
Department of State designates as foreign terrorist 
organizations, may have an impact on U.S. national security, 
and the Committee believes these factors should be considered 
as evidence that the transaction may threaten U.S. national 
security.
    In this regard, the Committee believes that CFIUS will need 
to assess whether a party to a transaction before CFIUS is 
directly implicated by the actions of its government in these 
areas--if, for example, a party to a transaction participates 
directly in the boycott of a U.S. ally, or if a party is 
controlled to some degree by a government that has failed to 
ban groups designated as terrorist organizations. The Committee 
believes that affirmative requests by the Director of National 
Intelligence for information from the Treasury Department's 
Office of Foreign Assets Control, as required by this Act for 
every covered transaction, will make clear in the future such 
connections in any investment proposals. However, the Committee 
is concerned about a general lack of knowledge about the 
investments in the United States by state-owned or state-
controlled companies that are from governments that participate 
in the boycott of Israel or that decline to ban terrorist 
organizations. The Committee therefore requires in this Act 
that CFIUS report within six months of enactment on all such 
investments, with such report also to include any 
recommendations from CFIUS members on how the government should 
consider andtreat any future proposed investment in the United 
States by such governments or persons.
    The legislation establishes a system of briefings and 
annual reporting to Congress. Both in briefings and reporting, 
the Committee recognizes that, in addition to the committees of 
jurisdiction named in the legislation, CFIUS will be obligated 
to brief, and report to, other committees that have 
``jurisdiction over any aspect of'' the covered transactions 
which are the subject of the briefing and/or reporting.
    H.R. 556 establishes procedures for the creation, 
implementation, and monitoring of mitigation agreements. The 
Committee believes that mitigation agreements play a critical 
role in the CFIUS process, allowing CFIUS to fully address 
security concerns without resorting to an outright rejection of 
the transaction when concerns arise. The Committee believes 
that mitigation agreements should address national security 
threats that arise as a result of the covered transaction, when 
those threats can not be adequately addressed by other areas of 
law or regulation. The Committee believes that an important 
principle in the original Exon-Florio Amendment with respect to 
Presidential action should also apply to mitigation agreements. 
Specifically, mitigation agreements should not be considered 
the first line of defense in addressing general national 
security concerns and should be focused on threats that arise 
directly from the transaction when other areas of law or 
regulation can not adequately mitigate those threats.
    The legislation addresses a key area of concern arising in 
the Dubai Ports World case--the apparent lack of heightened 
scrutiny applied to a case involving foreign government 
control. H.R. 556 requires heightened scrutiny in two ways. It 
requires either a second stage investigation for such 
transactions, or a Deputy Secretary level certification that 
the transaction poses no threat to national security. The 
Committee believes that acquisitions by certain government-
owned companies do create heightened national security 
concerns, particularly where government-owned companies make 
decisions for inherently governmental--as opposed to 
commercial--reasons. For example, government ownership may 
create greater concern over espionage risks, the protection of 
critical U.S. resources, and access to sensitive data. But not 
all government acquisitions create the same degree of national 
security risk. Many foreign governments have pension funds that 
operate in many respects like CalPERS and other public pension 
funds in various states in the United States, and the Committee 
is not aware of any national security concerns associated with 
such entities making investments in the United States.
    This bill recognizes these differences by providing 
flexibility for the Executive branch to distinguish between 
foreign government investments. If a transaction by a state-
owned entity both presents no threat to national security and 
no new mitigation agreement is required for the transaction, 
CFIUS has the flexibility to approve the transaction within the 
initial 30 days, subject to the procedural restrictions 
mentioned above. The Committee believes this flexibility is 
important in allowing CFIUS to focus its resources and efforts 
on the cases involving foreign governments that truly raise 
national security concerns.

                                Hearings

    In addition to multiple hearings in 2006, the Committee on 
Financial Services held a hearing on February 7, 2007, entitled 
``The Committee on Foreign Investment in the United States 
(CFIUS), One Year After Dubai Ports World.'' Witnesses at the 
hearing were Clay Lowery, Assistant Secretary, U.S. Department 
of the Treasury; The Honorable Steve Bartlett, CEO, Financial 
Services Roundtable; Todd Malan, CEO, Organization for 
International Investment; Michael O'Hanlon, The Brookings 
Institution; David Marchick, Covington & Burling LLP; Robert 
Nichols, President, Financial Services Forum; and David Heyman, 
Director, Homeland Security Program, Center for Strategic & 
International Studies.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
February 13, 2007, and ordered H.R. 556, as amended, favorably 
reported to the House by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Frank of Massachusetts to report the bill, as 
amended, to the House with a favorable recommendation was 
agreed to by a voice vote. The following amendment was disposed 
of by a record vote. The names of Members voting for and 
against follow:
    An amendment by Mr. Price of Georgia, No. 1a, to the 
amendment in the nature of a substitute, requiring Presidential 
action in certain cases was agreed to by a record vote of 40 
yeas and 29 nays (Record vote FC-4):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Mr. Baker........  ........  ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................        X   ........  .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....  ........        X   .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Sires......................        X   ........  .........  Mr. Price (GA)...        X   ........  .........
Mr. Hodes......................        X   ........  .........  Mr. Davis (KY)...        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Mahoney (FL)...............        X   ........  .........  Dr. Putnam.......        X   ........  .........
Mr. Wilson.....................        X   ........  .........  Mrs. Blackburn...        X   ........  .........
Mr. Perlmutter.................        X   ........  .........  Mrs. Bachmann....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Donnelly...................        X   ........  .........
Mr. Wexler.....................  ........        X   .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........  .................
----------------------------------------------------------------------------------------------------------------

    The following other amendment was also considered by the 
Committee:
    An amendment in the nature of a substitute by Mr. Frank of 
Massachusetts, No. 1, making various substantive and technical 
changes to the bill, as amended, was agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held hearings and made 
findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The Committee on Foreign Investment in the United States 
shall adopt the procedures set forth in this Act, and begin 
filing such notices and reports to Congress and doing such 
post-transaction monitoring as called for in this Act, in a 
timely fashion. The Committee intends that the procedures set 
forth in this Act apply to all covered transactions henceforth, 
except that those covered transactions under review or 
investigation by the CFIUS on the day before the effective date 
shall be considered using the practices and procedures in place 
the day before enactment. Such transactions as are under review 
or investigation on the effective date, however, are subject to 
all post-transaction monitoring and other procedures as set 
forth in this Act, and all other portions of this Act shall 
apply to such transactions except the procedures for initial 
review or investigation.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, tax expenditures or revenues contained in the cost 
estimate prepared by the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:
                                                 February 16, 2007.
Hon. Barney Frank, Chairman,
Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 556, the National 
Security Foreign Investment Reform and Strengthened 
Transparency Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure.

H.R. 556--National Security Foreign Investment Reform and Strengthened 
        Transparency Act of 2007

    Summary: H.R. 556 would amend the Defense Production Act of 
1950 to establish in law the Committee on Foreign Investment in 
the United States (CFIUS). The committee would consist of at 
least 13 members (including seven cabinet secretaries). In 
addition, the legislation would authorize the appropriation of 
$10 million annually over the 2008-2011 period for the 
Secretary of the Treasury to pay for activities of the 
committee that are conducted by the Department of the Treasury.
    Assuming appropriation of the authorized amounts, CBO 
estimates that implementing H.R. 556 would cost $40 million 
over the 2008-2012 period. In addition, beginning in fiscal 
year 2007, CBO expects that complying with the bill's 
provisions would increase the administrative expenses of some 
federal agencies, but because of the confidential nature of the 
CFIUS review process, the number of agencies involved, and the 
confidential information needed to prepare an estimate for some 
provisions of the legislation, CBO cannot determine a precise 
estimate of the likely total costs of this bill. Enacting the 
bill would not affect direct spending or revenues.
    H.R. 556 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 556 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2007    2008    2009    2010    2011    2012
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level1............................................       0      10      10      10      10       0
Estimated Outlays...............................................       0       9      10      10      10       1
----------------------------------------------------------------------------------------------------------------
1In addition, beginning in fiscal year 2007, CBO expects that complying with the bill's provisions would
  increase the administrative expenses of some federal agencies, but because of the confidential nature of the
  CFIUS review process, the number of agencies involved, and the confidential information needed to prepare an
  estimate for some provisions of the legislation, CBO cannot determine a precise estimate of the likely total
  costs of this bill.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
556 will be enacted this fiscal year, that the necessary 
amounts will be appropriated for each year, and that outlays 
will occur at historical rates for similar programs.
    H.R. 556 would establish in law the CFIUS. Under the bill, 
the committee would consist of at least 13 permanent members 
including the Secretaries of the Departments of the Treasury, 
State, Defense, Energy, Commerce, and Homeland Security; as 
well as the Attorney General, Director of the Office of 
Management and Budget, the United States Trade Representative, 
the Chairman of the Council of Economic Advisers, the Director 
of the National Economic Council, the Director of the Office of 
Science and Technology Policy, and the President's Assistant 
for National Security Affairs. The committee would coordinate 
reviews of foreign investment in the United States that involve 
national security or critical infrastructure in the United 
States. The legislation would formalize and expand this review 
and investigation process.
    The legislation would authorize the appropriation of $10 
million annually over the 2008-2011 period for the operations 
of the committee. Assuming the appropriation of the authorized 
amounts, CBO estimates that implementing the bill would cost 
$40 million over the 2008-2012 period.
    In addition, beginning in fiscal year 2007, CBO expects 
that complying with the bill's provisions would increase the 
administrative expenses of federal agencies that are 
represented on the committee, but because of the confidential 
nature of the CFIUS review process, the number of agencies 
involved, and the confidential information needed to prepare an 
estimate for some provisions of the legislation, CBO cannot 
determine a precise estimate of the likely total costs of this 
bill. Additional costs over the 2007-2012 period, however, 
would generally come from agencies' salary and expense budgets, 
which are subject to annual appropriation. Such costs would 
probably total at least a few million dollars per year.
    Intergovernmental and private-sector impact: H.R. 556 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Matthew Pickford; 
Impact on State, Local, and Tribal Governments: Sarah Puro; 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 556 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                  Exchange of Committee Correspondence

                          House of Representatives,
                              Committee on Foreign Affairs,
                                 Washington, DC, February 23, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Chairman Frank: I am writing to you concerning the 
bill, H.R. 556, the National Security Foreign Investment Reform 
and Strengthened Transparency Act of 2007. There are certain 
provisions in the legislation which fall within the Rule X 
jurisdiction of the Committee on Foreign Affairs, including 
provisions relating to the Defense Production Act of 1950, as 
it pertains to the Committee on Foreign Investment in the 
United States.
    In the interest of permitting your Committee to proceed 
expeditiously to Floor consideration of this important bill, I 
am willing to waive this Committee's right to sequential 
referral. I do so with the understanding that by waiving 
consideration of the bill, the Committee on Foreign Affairs 
does not waive any future jurisdictional claim over the subject 
matters contained in the bill, which fall within its Rule X 
jurisdiction. I request that you to urge the Speaker to appoint 
Members of this Committee to any conference committee which is 
named to consider any such provisions.
    Please place this letter into the Committee report on H.R. 
556 and into the Congressional Record during consideration of 
the measure on the House Floor. Thank you for the cooperative 
spirit in which you have worked regarding this matter and 
others between our respective committees.
            Cordially,
                                                Tom Lantos,
                                                          Chairman.
                          House of Representatives,
                           Committee on Financial Services,
                                 Washington, DC, February 23, 2007.
Hon. Tom Lantos, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: Thank you for your letter concerning 
H.R. 556, the National Security Foreign Investment Reform and 
Strengthened Transparency Act of 2007. This bill was introduced 
on January 18, 2007, and was referred to the Committee on 
Financial Services, and in addition to the Committees on 
Foreign Affairs and Energy and Commerce, The bill was ordered 
reported by the Committee on Financial Services on February 13, 
2007. It is my expectation that this bill will be scheduled for 
floor consideration in the near future.
    I recognize that certain provisions in the bill fall within 
the jurisdiction of the Committee on Foreign Affairs under rule 
X of the Rules of the House of Representatives. However, I 
appreciate your willingness to forego action on H.R. 556 in 
order to allow the bill to come to the floor expeditiously. I 
agree that your decision will not prejudice the Committee on 
Foreign Affairs with respect to its jurisdictional prerogatives 
on this or similar legislation. I would support your request 
for conferees on those provisions within your jurisdiction 
should this bill be the subject of a House-Senate conference.
    I will include this exchange of correspondence in the 
Committee report and in Congressional Record when this bill is 
considered by the House. Thank you again for your cooperation 
in this important matter.
            Yours truly,
                                              Barney Frank,
                                                          Chairman.

             Section-by-Section Analysis of the Legislation

    Section 1--This section establishes the short title of the 
bill as the ``National Security Foreign Investment Reform and 
Strengthened Transparency Act of 2007.''
    Section 2--This section amends Section 721 of the Defense 
Production Act of 1950 to reform and clarify the way 
acquisitions by foreign companies of companies with operations 
in the United States are analyzed for their effect on national 
security.
    Subsection (a) defines a number of terms used often in the 
bill: Committee, control, covered transaction, foreign 
government-controlled transaction. It also clarifies that for 
the purposes of Section 721, ``national security'' will be 
construed to include ``homeland security'' including its 
application to critical infrastructure.
    Subsection (b) establishes the method by which covered 
transactions are reviewed and investigated by the Committee on 
Foreign Investment in the United States to determine if they 
threaten to impair United States national security; establishes 
that any transaction involving a foreign government-controlled 
company must undergo an ``investigation'' by CFIUS if that 
transaction is not certified by the Chairman and Vice Chairmen 
as posing no national security threat and requiring no 
mitigation agreement; establishes the process for notifying 
CFIUS of a proposed transaction and a procedure for treating 
transactions that are withdrawn from the CFIUS process and 
later re-submits notice; establishes a procedure for the 
President and CFIUS to unilaterally initiate a review of a 
transaction, and to initiate a review of a previously reviewed 
transaction in certain cases; makes clear that national 
security reviews of transactions take no longer than 30 days 
and, if necessary, investigations that follow reviews take no 
longer than 45 days unless \2/3\ of the members of CFIUS vote 
to extend, and then by no longer than 45 days; describes 
reasons for a transaction to undergo an investigation; 
establishes that no review or investigation is complete until 
the chairman and vice chairmen of CFIUS sign the resulting 
reports; requires that any investigation must be approved by a 
majority of CFIUS members in a roll call vote; specifies that 
in the case of a dissenting vote by any CFIUS member, the 
decision on a foreign government-controlled transaction must be 
made by the President; requires a Presidential decision in 
cases involving transactions related to countries that have 
been designated by the State Department as having provided 
support for acts of international terrorism; and specifies that 
the Director of National Intelligence must conduct an analysis 
of each transaction.
    Section 3--This section formally establishes the Committee 
on Foreign Investment in the United States; establishes its 
membership; specifies that the Secretary of the Treasury shall 
be the chairman and the Secretary of Homeland Security and 
Secretary of Commerce the vice chairs; allows the temporary 
addition of non-member Executive Branch agencies; establishes 
guidelines for meeting and gathering information; and 
authorizes the appropriation of $10 million annually for the 
operation of the Committee.
    Section 4--This section establishes that the list of 
factors in Section 721 that currently ``may'' be considered 
when reviewing or investigating any transaction, instead 
``must'' all be considered, and adds as new factors whether a 
transaction is a foreign government-controlled transaction and 
whether a transaction has a security-related impact on critical 
infrastructure in the United States.
    Section 5--This section makes clear that while submitting 
notice to CFIUS remains voluntary, if the United States must 
take action to dissolve, suspend or modify a transaction, the 
U.S. is not liable for any losses or other expenses by any 
party to a completed transaction if a notice of such 
transaction was not filed with the CFIUS prior to completion of 
the transaction.
    Section 6--This section establishes that the CFIUS may 
enter into agreements with parties to a transaction to mitigate 
any threats to national security; establishes that the CFIUS 
shall name appropriate lead Federal agencies to monitor 
compliance with such agreements, negotiate any changes in such 
agreements and report back to the CFIUS on compliance and 
modifications; and establishes a method of tracking 
transactions that are withdrawn from the review or 
investigation process as well as a process for setting interim 
protections on such transactions to address specific national 
security concerns.
    Section 7--This section establishes a broad new system for 
reporting information on CFIUS activities to Congress so that 
it may conduct appropriate oversight of the CFIUS. This 
includes reports to Congress within 5 days after the final 
action in an investigation; a mechanism for Congress to request 
a detailed, classified briefing on a transaction; and 
affirmative protections for proprietary business information. 
The CFIUS is required to file annual reports with Congress that 
contain information on transactions handled by the CFIUS, 
cumulative and trend analysis of transactions by business 
sector and country of origin, information on security and 
mitigation agreements, incorporates into the annual reporting 
the contents of the previously required quadrennial reporting 
on foreign industrial espionage in the U.S. and on foreign 
attempts to control a particular U.S. business or industrial 
sector, and requires a report on investments in the U.S. by 
countries that do not ban foreign terrorist organizations and 
by countries that support the boycott of Israel. The 
quadrennial report is repealed as redundant.
    Section 8--This section makes clear that parties to a 
transaction must certify that the information they file with 
CFIUS is complete and correct.
    Section 9--This section directs the President to cause 
regulations to be issued to carry out the requirements of 
Section 721, and specifies that to the extent possible they 
minimize paperwork burden and coordinate new reporting 
requirements with existing ones.
    Section 10--This section clarifies that no portion of the 
bill should be construed as affecting or altering other 
existing law or regulation.
    Section 11--This section establishes an effective date 90 
days after enactment.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     DEFENSE PRODUCTION ACT OF 1950




           *       *       *       *       *       *       *
TITLE VII--GENERAL PROVISIONS

           *       *       *       *       *       *       *



    AUTHORITY TO REVIEW CERTAIN MERGERS, ACQUISITIONS, AND TAKEOVERS

  Sec. 721. [(a) Investigations.--The President or the 
President's designee may make an investigation to determine the 
effects on national security of mergers, acquisitons, and 
takeovers proposed or pending on or after the date of enactment 
of this section by or with foreign persons which could result 
in foreign control of persons engaged in interstate commerce in 
the United States. If it is determined that an investigation 
should be undertaken, it shall commence no later than 30 days 
after receipt by the President or the President's designee of 
written notification of the proposed or pending merger, 
acquisition, or takeover as prescribed by regulations 
promulgated pursuant to this section. Such investigation shall 
be completed no later than 45 days after such determination.
  [(b) Mandatory Investigations.--The President or the 
President's designee shall make an investigation, as described 
in subsection (a), in any instance in which an entity 
controlled by or acting on behalf of a foreign government seeks 
to engage in any merger, acquisition, or takeover which could 
result in control of a person engaged in interstate commerce in 
the United States that could affect the national security of 
the United States. Such investigation shall--
          [(1) commence not later than 30 days after receipt by 
        the President or the President's designee of written 
        notification of the proposed or pending merger, 
        acquisition, or takeover, as prescribed by regulations 
        promulgated pursuant to this section; and
          [(2) shall be completed not later than 45 days after 
        its commencement.]
  (a) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Committee.--The term ``Committee'' means the 
        Committee on Foreign Investment in the United States.
          (2) Control.--The term ``control'' has the meaning 
        given to such term in regulations which the Committee 
        shall prescribe.
          (3) Covered transaction.--The term ``covered 
        transaction'' means any merger, acquisition, 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.
          (4) Foreign government-controlled transaction.--The 
        term ``foreign government-controlled transaction'' 
        means any covered transaction that could result in the 
        control of any person engaged in interstate commerce in 
        the United States by a foreign government or an entity 
        controlled by or acting on behalf of a foreign 
        government.
          (5) Clarification.--The term ``national security'' 
        shall be construed so as to include those issues 
        relating to ``homeland security'', including its 
        application to critical infrastructure.
  (b) National Security Reviews and Investigations.--
          (1) National security reviews.--
                  (A) In general.--Upon receiving written 
                notification under subparagraph (C) of any 
                covered transaction, or on a motion made under 
                subparagraph (D) with respect to any covered 
                transaction, the President, acting through the 
                Committee, shall review the covered transaction 
                to determine the effects of the transaction on 
                the national security of the United States.
                  (B) Control by foreign government.--If the 
                Committee determines that the covered 
                transaction is a foreign government-controlled 
                transaction, the Committee shall conduct an 
                investigation of the transaction under 
                paragraph (2).
                  (C) Written notice.--
                          (i) In general.--Any party to any 
                        covered transaction may initiate a 
                        review of the transaction under this 
                        paragraph by submitting a written 
                        notice of the transaction to the 
                        Chairperson of the Committee.
                          (ii) Withdrawal of notice.--No 
                        covered transaction for which a notice 
                        was submitted under clause (i) may be 
                        withdrawn from review unless--
                                  (I) a written request for 
                                such withdrawal is submitted by 
                                any party to the transaction; 
                                and
                                  (II) the request is approved 
                                in writing by the Chairperson, 
                                in consultation with the Vice 
                                Chairpersons, of the Committee.
                          (iii) Continuing discussions.--The 
                        approval of a withdrawal request under 
                        clause (ii) shall not be construed as 
                        precluding any party to the covered 
                        transaction from continuing informal 
                        discussions with the Committee or any 
                        Committee member regarding possible 
                        resubmission for review pursuant to 
                        this paragraph.
                  (D) Unilateral initiation of review.--Subject 
                to subparagraph (F), the President, the 
                Committee, or any member acting on behalf of 
                the Committee may move to initiate a review 
                under subparagraph (A) of--
                          (i) any covered transaction;
                          (ii) any covered transaction that has 
                        previously been reviewed or 
                        investigated under this section, if any 
                        party to the transaction submitted 
                        false or misleading material 
                        information to the Committee in 
                        connection with the review or 
                        investigation or omitted material 
                        information, including material 
                        documents, from information submitted 
                        to the Committee; or
                          (iii) any covered transaction that 
                        has previously been reviewed or 
                        investigated under this section, if any 
                        party to the transaction or the entity 
                        resulting from consummation of the 
                        transaction intentionally materially 
                        breaches a mitigation agreement or 
                        condition described in subsection 
                        (l)(1)(A), and--
                                  (I) such breach is certified 
                                by the lead department or 
                                agency monitoring and enforcing 
                                such agreement or condition as 
                                an intentional material breach; 
                                and
                                  (II) such department or 
                                agency certifies that there is 
                                no other remedy or enforcement 
                                tool available to address such 
                                breach.
                  (E) Timing.--Any review under this paragraph 
                shall be completed before the end of the 30-day 
                period beginning on the date of the receipt of 
                written notice under subparagraph (C) by the 
                Chairperson of the Committee, or the date of 
                the initiation of the review in accordance with 
                a motion under subparagraph (D).
                  (F) Limit on delegation of certain 
                authority.--The authority of the Committee or 
                any member of the Committee to initiate a 
                review under subparagraph (D) may not be 
                delegated to any person other than the Deputy 
                Secretary or an appropriate Under Secretary of 
                the department or agency represented on the 
                committee or by such member (or by a person 
                holding an equivalent position to a Deputy 
                Secretary or Under Secretary).
          (2) National security investigations.--
                  (A) In general.--In each case in which--
                          (i) a review of a covered transaction 
                        under paragraph (1) results in a 
                        determination that--
                                  (I) the transaction threatens 
                                to impair the national security 
                                of the United States and that 
                                threat has not been mitigated 
                                during or prior to the review 
                                of a covered transaction under 
                                paragraph (1); or
                                  (II) the transaction is a 
                                foreign government-controlled 
                                transaction;
                          (ii) a roll call vote pursuant to 
                        paragraph (3)(A) in connection with a 
                        review under paragraph (1) of any 
                        covered transaction results in at least 
                        1 vote by a Committee member against 
                        approving the transaction; or
                          (iii) the Director of National 
                        Intelligence identifies particularly 
                        complex intelligence concerns that 
                        could threaten to impair the national 
                        security of the United States and 
                        Committee members were not able to 
                        develop and agree upon measures to 
                        mitigate satisfactorily those threats 
                        during the initial review period under 
                        paragraph (1),
                the President, acting through the Committee, 
                shall immediately conduct an investigation of 
                the effects of the transaction on the national 
                security of the United States and take any 
                necessary actions in connection with the 
                transaction to protect the national security of 
                the United States.
                  (B) Timing.--
                          (i) In general.--Any investigation 
                        under subparagraph (A) shall be 
                        completed before the end of the 45-day 
                        period beginning on the date of the 
                        investigation commenced.
                          (ii) Extensions of time.--The period 
                        established under subparagraph (B) for 
                        any investigation of a covered 
                        transaction may be extended with 
                        respect to any particular investigation 
                        by the President or by a rollcall vote 
                        of at least 2/3 of the members of the 
                        Committee involved in the investigation 
                        by the amount of time specified by the 
                        President or the Committee at the time 
                        of the extension, not to exceed 45 
                        days, as necessary to collect and fully 
                        evaluate information relating to--
                                  (I) the covered transaction 
                                or parties to the transaction; 
                                and
                                  (II) any effect of the 
                                transaction that could threaten 
                                to impair the national security 
                                of the United States.
                  (C) Exception.--Notwithstanding subparagraph 
                (A)(i)(II), an investigation of a foreign 
                government-controlled transaction shall not be 
                required under this paragraph if the Secretary 
                of the Treasury, the Secretary of Homeland 
                Security, and the Secretary of Commerce 
                determine, on the basis of the review of the 
                transaction under paragraph (1), that the 
                transaction will not affect the national 
                security of the United States and no agreement 
                or condition is required, with respect to the 
                transaction, to mitigate any threat to the 
                national security (and such authority of each 
                such Secretary may not be delegated to any 
                person other than the Deputy Secretary of the 
                Treasury, of Homeland Security, or of Commerce, 
                respectively).
          (3) Approval of chairperson and vice chairpersons 
        required.--
                  (A) In general.--A review or investigation 
                under this subsection of a covered transaction 
                shall not be treated as final or complete until 
                the results of such review or investigation are 
                approved by a majority of the members of the 
                Committee in a roll call vote and signed by the 
                Secretary of the Treasury, the Secretary of 
                Homeland Security, and the Secretary of 
                Commerce (and such authority of each such 
                Secretary may not be delegated to any person 
                other than the Deputy Secretary or an 
                appropriate Under Secretary of the Treasury, of 
                Homeland Security, or of Commerce, 
                respectively).
                  (B) Additional action required in certain 
                cases.--In the case of any roll call vote 
                pursuant to subparagraph (A) in connection with 
                an investigation under paragraph (2) of any 
                foreign government-controlled transaction in 
                which there is at least 1 vote by a Committee 
                member against approving the transaction, the 
                investigation shall not be treated as final or 
                complete until the findings and report 
                resulting from such investigation are signed by 
                the President (in addition to the Chairperson 
                and the Vice Chairpersons of the Committee 
                under subparagraph (A)).
                  (C) Presidential action required in certain 
                cases.--In the case of any covered transaction 
                in which any party to the transaction is--
                          (i) a person of a country the 
                        government of which the Secretary of 
                        State has determined, for purposes of 
                        section 6(j) of the Export 
                        Administration Act of 1979 (as 
                        continued in effect pursuant to the 
                        International Emergency Economic Powers 
                        Act), section 40 of the Arms Export 
                        Control Act, section 620A of the 
                        Foreign Assistance Act of 1961, or 
                        other provision of law, is a government 
                        that has repeatedly provided support 
                        for acts of international terrorism;
                          (ii) a government described in clause 
                        (i); or
                          (iii) person controlled, directly or 
                        indirectly, by any such government,
                a review or investigation under this subsection 
                of such covered transaction shall not be 
                treated as final or complete until the results 
                of such review or investigation are approved 
                and signed by the President.
          (4) Analysis by Director of National Intelligence.--
                  (A) In general.--The Director of National 
                Intelligence shall expeditiously carry out a 
                thorough analysis of any threat to the national 
                security of the United States of any covered 
                transaction, including making requests for 
                information to the Director of the Office of 
                Foreign Assets Control within the Department of 
                the Treasury and the Director of the Financial 
                Crimes Enforcement Network. The Director of 
                National Intelligence also shall seek and 
                incorporate the views of all affected or 
                appropriate intelligence agencies.
                  (B) Timing.--The Director of National 
                Intelligence shall be provided adequate time to 
                complete the analysis required under 
                subparagraph (A), including any instance 
                described in paragraph (2)(A)(iii).
                  (C) Independent role of director.--The 
                Director of National Intelligence shall not be 
                a member of the Committee and shall serve no 
                policy role with the Committee other than to 
                provide analysis under subparagraph (A) in 
                connection with a covered transaction.
          (5) Submission of additional information.--No 
        provision of this subsection shall be construed as 
        prohibiting any party to a covered transaction from 
        submitting additional information concerning the 
        transaction, including any proposed restructuring of 
        the transaction or any modifications to any agreements 
        in connection with the transaction, while any review or 
        investigation of the transaction is on-going.
          (6) Regulations.--Regulations prescribed under this 
        section shall include standard procedures for--
                  (A) submitting any notice of a proposed or 
                pending covered transaction to the Committee;
                  (B) submitting a request to withdraw a 
                proposed or pending covered transaction from 
                review; and
                  (C) resubmitting a notice of proposed or 
                pending covered transaction that was previously 
                withdrawn from review.
  (c) Confidentiality of Information.--Any information or 
documentary [material filed with] material, including 
proprietary business information, filed with, or testimony 
presented to, 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 documentary material], documentary material, or 
testimony may be made public, except as may be relevant to any 
administrative or judicial action or proceeding. Nothing in 
this subsection shall be construed to prevent disclosure to 
either House of Congress or to any duly authorized committee or 
subcommittee of the Congress.
  (d) Action by the President.--Subject to subsection (d), the 
President may take such action for such time as the President 
considers appropriate to suspend or prohibit any acquisition, 
merger, or takeover, of a person engaged in interstate commerce 
in the United States proposed or pending on or after the date 
of enactment of this section by or with foreign persons so that 
such control will not threaten to impair the national security. 
The President shall announce the decision to take action 
pursuant to this subsection not later than 15 days after the 
investigation described in subsection (a) is completed. The 
President may direct the Attorney General to seek appropriate 
relief, including divestment relief, in the district courts of 
the United States in order to implement and enforce this 
section. The United States shall not be held liable for any 
losses or other expenses incurred by any party to a covered 
transaction as a result of actions taken under this section 
after a covered transaction has been consummated if the party 
did not submit a written notice of the transaction to the 
Chairperson of the Committee under subsection (b)(1)(C) or did 
not wait until the completion of any review or investigation 
under subsection (b), or the end of the 15-day period referred 
to in this subsection, before consummating the transaction.

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  (f) Factors To Be Considered.--For purposes of this section, 
the President or the President's designee [may] shall, taking 
into account the requirements of national security, consider 
[among other factors]--
          (1) * * *

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          (4) the potential effects of the proposed or pending 
        transaction on sales of military goods, equipment, or 
        technology to any country--
                  (A) * * *
                  (B) 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, Supplement No. 4) 
                or any successor list; [and]
          (5) the potential effects of the proposed or pending 
        transaction on United States international 
        technological leadership in areas affecting United 
        States national security[.];
          (6) whether the covered transaction has a security-
        related impact on critical infrastructure in the United 
        States;
          (7) whether the covered transaction is a foreign 
        government-controlled transaction; and
          (8) such other factors as the President or the 
        President's designee may determine to be appropriate, 
        generally or in connection with a specific review or 
        investigation.
  [(g) Report to the Congress.--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 of whether or not to take action under subsection 
(d), including a detailed explanation of the findings made 
under subsection (e) and the factors considered under 
subsection (f). Such report shall be consistent with the 
requirements of subsection (c) of this Act.
  [(h) Regulations.--The President direct the issuance of 
regulations to carry out this section. Such regulations shall, 
to the extent possible, minimize paperwork burdens and shall to 
the extent possible coordinate reporting requirements under 
this section with reporting requirements under any other 
provision of Federal law.
  [(i) Effect on Other Law.--Nothing in this section shall be 
construed to alter or affect any existing power, process, 
regulation, investigation, enforcement measure, or review 
provided by any other provision of law.]
  (g) Reports to the Congress.--
          (1) Reports on completed committee investigations.--
                  (A) In general.--Not later than 5 days after 
                the completion of a Committee investigation of 
                a covered transaction under subsection (b)(2), 
                or, if the President indicates an intent to 
                take any action authorized under subsection (d) 
                with respect to the transaction, after the end 
                of 15-day period referred to in subsection (d), 
                the Chairperson or a Vice Chairperson of the 
                Committee shall submit a written report on the 
                findings or actions of the Committee with 
                respect to such investigation, the 
                determination of whether or not to take action 
                under subsection (d), an explanation of the 
                findings under subsection (e), and the factors 
                considered under subsection (f), with respect 
                to such transaction, to--
                          (i) the Majority Leader and the 
                        Minority Leader of the Senate;
                          (ii) the Speaker and the Minority 
                        Leader of the House of Representatives; 
                        and
                          (iii) the chairman and ranking member 
                        of each committee of the House of 
                        Representatives and the Senate with 
                        jurisdiction over any aspect of the 
                        covered transaction and its possible 
                        effects on national security, including 
                        the Committee on Foreign Affairs, the 
                        Committee on Financial Services, and 
                        the Committee on Energy and Commerce of 
                        the House of Representatives.
                  (B) Notice and briefing requirement.--If a 
                written request for a briefing on a covered 
                transaction is submitted to the Committee by 
                any Senator or Member of Congress who receives 
                a report on the transaction under subparagraph 
                (A), the Chairperson or a Vice Chairperson (or 
                such other person as the Chairperson or a Vice 
                Chairperson may designate) shall provide 1 
                classified briefing to each House of the 
                Congress from which any such briefing request 
                originates in a secure facility of appropriate 
                size and location that shall be open only to 
                the Majority Leader and the Minority Leader of 
                the Senate, the Speaker and the Minority Leader 
                of the House of Representatives, (as the case 
                may be) the chairman and ranking member of each 
                committee of the House of Representatives or 
                the Senate (as the case may be) with 
                jurisdiction over any aspect of the covered 
                transaction and its possible effects on 
                national security, including the Committee on 
                International Relations, the Committee on 
                Financial Services, and the Committee on Energy 
                and Commerce of the House of Representatives, 
                and appropriate staff members who have security 
                clearance.
          (2) Application of other provision.--
                  (A) In general.--The disclosure of 
                information under this subsection shall be 
                consistent with the requirements of subsection 
                (c). Members of Congress and staff of either 
                House or any committee of the Congress shall be 
                subject to the same limitations on disclosure 
                of information as are applicable under such 
                subsection.
                  (B) Proprietary information.--Proprietary 
                information which can be associated with a 
                particular party to a covered transaction shall 
                be furnished in accordance with subparagraph 
                (A) only to a committee of the Congress and 
                only when the committee provides assurances of 
                confidentiality, unless such party otherwise 
                consents in writing to such disclosure.
  (h) Regulations.--The President shall direct the issuance of 
regulations to carry out this section. Such regulations shall, 
to the extent possible, minimize paperwork burdens and shall to 
the extent possible coordinate reporting requirements under 
this section with reporting requirements 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 other authority, 
process, regulation, investigation, enforcement measure, or 
review provided by or established under any other provision of 
Federal law, including the International Emergency Economic 
Powers Act, or any other authority of the President or the 
Congress under the Constitution of the United States.

           *       *       *       *       *       *       *

  [(k) Quadrennial Report.--
          [(1) In general.--In order to assist the Congress 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 1 year after the date of 
        enactment of this section and upon the expiration of 
        every 4 years thereafter, a report 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 
                commercial secrets related to critical 
                technologies.
          [(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 
        essential to national defense identified pursuant to 
        this section.
          [(3) Release of unclassified study.--The report 
        required by this subsection may be classified. An 
        unclassified version of the report shall be made 
        available to the public.]
  (k) 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 shall be a multi-agency 
        committee to carry out this section and such other 
        assignments as the President may designate.
          (2) Membership.--The Committee shall be comprised of 
        the following members or the designee of any such 
        member:
                  (A) The Secretary of the Treasury.
                  (B) The Secretary of Homeland Security.
                  (C) The Secretary of Commerce.
                  (D) The Secretary of Defense.
                  (E) The Secretary of State.
                  (F) The Attorney General.
                  (G) The Secretary of Energy.
                  (H) The Chairman of the Council of Economic 
                Advisors.
                  (I) The United States Trade Representative.
                  (J) The Director of the Office of Management 
                and Budget.
                  (K) The Director of the National Economic 
                Council.
                  (L) The Director of the Office of Science and 
                Technology Policy.
                  (M) The President's Assistant for National 
                Security Affairs.
                  (N) Any other designee of the President from 
                the Executive Office of the President.
          (3) Chairperson; vice chairpersons.--The Secretary of 
        the Treasury shall be the Chairperson of the Committee. 
        The Secretary of Homeland Security and the Secretary of 
        Commerce shall be the Vice Chairpersons of the 
        Committee.
          (4) Other members.--Subject to subsection (b)(4)(B), 
        the Chairperson of the Committee shall involve the 
        heads of such other Federal departments, agencies, and 
        independent establishments in any review or 
        investigation under subsection (b) as the Chairperson, 
        after consulting with the Vice Chairpersons, determines 
        to be appropriate on the basis of the facts and 
        circumstances of the transaction under investigation 
        (or the designee of any such department or agency 
        head).
          (5) Meetings.--The Committee shall meet upon the 
        direction of the President or upon the call of the 
        Chairperson of the Committee without regard to section 
        552b of title 5, United States Code (if otherwise 
        applicable).
          (6) Collection of evidence.--Subject to subsection 
        (c), the Committee may, for the purpose of carrying out 
        this section--
                  (A) sit and act at such times and places, 
                take such testimony, receive such evidence, 
                administer such oaths; and
                  (B) require the attendance and testimony of 
                such witnesses and the production of such 
                books, records, correspondence, memoranda, 
                papers, and documents as the Chairperson of the 
                Committee may determine advisable.
          (7) Authorization of appropriations.--There are 
        authorized to be appropriated to the Secretary of the 
        Treasury for each of fiscal years 2008, 2009, 2010, and 
        2011 expressly and solely for the operations of the 
        Committee that are conducted by the Secretary, the sum 
        of $10,000,000.
  (l) Mitigation, Tracking, and Postconsummation Monitoring and 
Enforcement.--
          (1) Mitigation.--
                  (A) In general.--The Committee or any agency 
                designated by the Chairperson and Vice 
                Chairpersons may, on behalf of the Committee, 
                negotiate, enter into or impose, and enforce 
                any agreement or condition with any party to a 
                covered transaction in order to mitigate any 
                threat to the national security of the United 
                States that arises as a result of the 
                transaction.
                  (B) Risk-based analysis required.--Any 
                agreement entered into or condition imposed 
                under subparagraph (A) shall be based on a 
                risk-based analysis of the threat to national 
                security of the covered transaction.
          (2) Tracking authority for withdrawn notices.--
                  (A) In general.--If any written notice of a 
                covered transaction that was submitted to the 
                Committee under this section is withdrawn 
                before any review or investigation by the 
                Committee under subsection (b) is completed, 
                the Committee shall establish, as appropriate--
                          (i) interim protections to address 
                        specific concerns with such transaction 
                        that have been raised in connection 
                        with any such review or investigation 
                        pending any resubmission of any written 
                        notice under this section with respect 
                        to such transaction and further action 
                        by the President under this section;
                          (ii) specific timeframes for 
                        resubmitting any such written notice; 
                        and
                          (iii) a process for tracking any 
                        actions that may be taken by any party 
                        to the transaction, in connection with 
                        the transaction, before the notice 
                        referred to in clause (ii) is 
                        resubmitted.
                  (B) Designation of agency.--The Committee may 
                designate 1 or more appropriate Federal 
                departments or agencies, other than any entity 
                of the intelligence community (as defined in 
                the National Security Act of 1947), as a lead 
                agency to carry out, on behalf of the 
                Committee, the requirements of subparagraph (A) 
                with respect to any covered transaction that is 
                subject to such subparagraph.
          (3) Negotiation, modification, monitoring, and 
        enforcement.--
                  (A) Designation of agency.--The Committee 
                shall designate 1 or more Federal departments 
                or agencies as the lead agency to negotiate, 
                modify, monitor, and enforce, on behalf of the 
                Committee, any agreement entered into or 
                condition imposed under paragraph (1) with 
                respect to a covered transaction based on the 
                expertise with and knowledge of the issues 
                related to such transaction on the part of the 
                designated department or agency.
                  (B) Reporting by designated agency.--
                          (i) Implementation reports.--Each 
                        Federal department or agency designated 
                        by the Committee as a lead agency under 
                        subparagraph (A) in connection with any 
                        agreement entered into or condition 
                        imposed under paragraph (1) with 
                        respect to a covered transaction 
                        shall--
                                  (I) provide periodic reports 
                                to the Chairperson and Vice 
                                Chairpersons of the Committee 
                                on the implementation of such 
                                agreement or condition; and
                                  (II) require, as appropriate, 
                                any party to the covered 
                                transaction to report to the 
                                head of such department or 
                                agency (or the designee of such 
                                department or agency head) on 
                                the implementation or any 
                                material change in 
                                circumstances.
                          (ii) Modification reports.--Any 
                        Federal department or agency designated 
                        by the Committee as a lead agency under 
                        subparagraph (A) in connection with any 
                        agreement entered into or condition 
                        imposed with respect to a covered 
                        transaction shall--
                                  (I) provide periodic reports 
                                to the Chairperson and Vice 
                                Chairpersons of the Committee 
                                on any modification to any such 
                                agreement or condition imposed 
                                with respect to the 
                                transaction; and
                                  (II) ensure that any 
                                significant modification to any 
                                such agreement or condition is 
                                reported to the Director of 
                                National Intelligence and to 
                                any other Federal department or 
                                agency that may have a material 
                                interest in such modification.
  (m) Annual Report to the Congress.--
          (1) In general.--The Chairperson of the Committee 
        shall transmit a report to the chairman and ranking 
        member of each committee of the House of 
        Representatives and the Senate with jurisdiction over 
        any aspect of the report, including the Committee on 
        International Relations, the Committee on Financial 
        Services, and the Committee on Energy and Commerce of 
        the House of Representatives, before July 31 of each 
        year on all the reviews and investigations of covered 
        transactions completed under subsection (b) during the 
        12-month period covered by the report.
          (2) Contents of report relating to covered 
        transactions.--The report under paragraph (1) shall 
        contain the following information with respect to each 
        covered transaction:
                  (A) A list of all notices filed and all 
                reviews or investigations completed during the 
                period with basic information on each party to 
                the transaction, the nature of the business 
                activities or products of all pertinent 
                persons, along with information about the 
                status of the review or investigation, 
                information on any withdrawal from the process, 
                any rollcall votes by the Committee under this 
                section, any extension of time for any 
                investigation, and any presidential decision or 
                action under this section.
                  (B) Specific, cumulative, and, as 
                appropriate, trend information on the numbers 
                of filings, investigations, withdrawals, and 
                presidential decisions or actions under this 
                section.
                  (C) Cumulative and, as appropriate, trend 
                information on the business sectors involved in 
                the filings which have been made, and the 
                countries from which the investments have 
                originated.
                  (D) Information on whether companies that 
                withdrew notices to the Committee in accordance 
                with subsection (b)(1)(C)(ii) have later re-
                filed such notices, or, alternatively, 
                abandoned the transaction.
                  (E) The types of security arrangements and 
                conditions the Committee has used to mitigate 
                national security concerns about a transaction.
                  (F) A detailed discussion of all perceived 
                adverse effects of covered transactions on the 
                national security or critical infrastructure of 
                the United States that the Committee will take 
                into account in its deliberations during the 
                period before delivery of the next such report, 
                to the extent possible.
          (3) Contents of report relating to critical 
        technologies.--
                  (A) In general.--In order to assist the 
                Congress in its oversight responsibilities with 
                respect to this section, the President and such 
                agencies as the President shall designate shall 
                include in the annual report submitted under 
                paragraph (1) the following:
                          (i) An evaluation of 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.
                          (ii) An evaluation of whether there 
                        are industrial espionage activities 
                        directed or directly assisted by 
                        foreign governments against private 
                        United States companies aimed at 
                        obtaining commercial secrets related to 
                        critical technologies.
                  (B) Critical technologies defined.--For 
                purposes of this paragraph, 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 essential to national defense or national 
                security identified pursuant to this section.
                  (C) Release of unclassified study.--That 
                portion of the annual report under paragraph 
                (1) that is required by this paragraph may be 
                classified. An unclassified version of that 
                portion of the report shall be made available 
                to the public.
  (n) Certification of Notices and Assurances.--Each notice 
required to be submitted, by a party to a covered transaction, 
to the President or the President's designee under this section 
and regulations prescribed under such section, and any 
information submitted by any such party in connection with any 
action for which a report is required pursuant to paragraph 
(3)(B)(ii) of subsection (l) with respect to the implementation 
of any mitigation agreement or condition described in paragraph 
(1)(A) of such subsection, or any material change in 
circumstances, shall be accompanied by a written statement by 
the chief executive officer or the designee of the person 
required to submit such notice or information certifying that, 
to the best of the person's knowledge and belief--
          (1) the notice or information submitted fully 
        complies with the requirements of this section or such 
        regulation, agreement, or condition; and
          (2) the notice or information is accurate and 
        complete in all material respects.

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