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Calendar No. 437
112th Congress Report
SENATE
2d Session 112-179
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UNITED STATES-ISRAEL ENHANCED SECURITY COOPERATION ACT OF 2012
_______
June 27, 2012.--Ordered to be printed
Mr. Kerry, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 2165]
The Committee on Foreign Relations, having had under
consideration the bill, S. 2165, to enhance strategic
cooperation between the United States and Israel, and for other
purposes, reports favorably thereon, with an amendment in the
nature of a substitute, and recommends that the bill, as
amended, do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Section-by-Section Analysis......................................1
IV. Cost Estimate....................................................3
V. Evaluation of Regulatory Impact..................................3
VI. Changes in Existing Law..........................................3
I. Purpose
The purposed of this bill is to enhance strategic
cooperation between the United States and Israel.
II. Committee Action
S. 2165 was introduced by Senators Boxer, Isakson, and
Collins on March 6, 2012. At a committee business meeting on
June 19, 2012, the committee considered S. 2165 with an
amendment in the nature of a substitute. By voice vote, the
committee ordered the legislation, with an amendment in the
nature of a substitute, to be reported favorably.
III. Section-by-Section Analysis
SECTION 1. SHORT TITLE
This Act may be cited as the ``United States-Israel
Enhanced Security Cooperation Act of 2012.''
SECTION 2. FINDINGS.
This section provides several findings, including: that
there is a special bond between the United States and Israel;
that the Middle East is undergoing rapid change; that the
Government of the Islamic Republic of Iran continues to foment
instability in the region; that the Government of the Islamic
Republic of Iran continues to enrich uranium in defiance of
United Nations Security Council resolutions; that a nuclear-
weapons capable Iran would threaten vital United States
interests; and that the authority to make available loan
guarantees to Israel is currently set to expire on September
30, 2012.
SECTION 3. STATEMENT OF UNITED STATES POLICY.
This section states that it is U.S. policy, among other
things, to: continue to reaffirm the commitment to Israel's
security as a Jewish state; help Israel preserve its
qualitative military edge; pursue avenues to expand military
and civilian cooperation; assist in efforts to forge a
negotiated settlement of the Israeli-Palestinian conflict that
results in two states living side by side in peace and
security; and encourage Israel's neighbors to recognize
Israel's right to exist as a Jewish state.
SECTION 4. SENSE OF CONGRESS
This section expresses the sense of Congress that the
United States should take specified actions to assist in
Israel's defense, among which are: providing the Government of
Israel support necessary to enhance development and increase
production of joint missile defense systems; providing the
Government of Israel appropriate defense articles and defense
services through appropriate mechanisms; examining ways to
strengthen existing security initiatives and bilateral training
exercises; and encouraging an expanded role for Israel with the
North Atlantic Treaty Organization.
SECTION 5. ADDITIONAL STEPS TO DEFEND ISRAEL AND PROTECT AMERICAN
INTERESTS.
This section would amend the Department of Defense
Appropriations Act, 2005, to extend authority to transfer
certain obsolete or surplus Department of Defense items to
Israel. The section would also amend the Foreign Assistance Act
of 1961 to provide extended authority to make additions to
foreign-based defense stockpiles through 2014, and the
Emergency Wartime Supplemental Appropriations Act, 2003, to
extend specified loan guarantee authority to Israel. As noted
in section 2 of the bill, the authority provided by the
Emergency Wartime Supplemental Appropriations Act, 2003, as
amended, would otherwise expire on September 30, 2012.
SECTION 6. REPORTS REQUIRED.
This section requires several reports on previously enacted
provisions of law, and otherwise. The first is a report on the
status of Israel's qualitative military edge. The second is a
report on actions that could improve the process related to
Israel's purchase of F-35 aircraft. The third is a report on
efforts to expand cooperation between the United States and
Israel in homeland security, counter-terrorism, maritime
security, energy, cyber-security, and other related areas. The
fourth is a report on actions to integrate Israel into the
defense of the Eastern Mediterranean.
Section 201 of the Naval Vessel Transfer Act of 2008
(Public Law 110-429) requires a quadrennial report on an
empirical and qualitative assessment, and on an ongoing basis,
of the extent to which Israel possesses a qualitative military
edge over military threats to Israel. The initial required
report was submitted on October 6, 2009. Pursuant to 201(c)(2)
of that act, the President is required to submit an updated
report no later than October 6, 2013. If the report required by
section 6 of S. 2165 is submitted within one year of that date,
then the committee intends that such report would also satisfy
the requirement of section 201(c)(2) of the Naval Vessel
Transfer Act of 2008. The committee notes that the
determination required by section 36(h) of the Arms Export
Control Act (22 U.S.C. 2776(h)) in connection with individual
sales or licenses to the region provides a valuable assurance,
but the committee expects that the report required by section
6(a) of the bill will consider the overall implications for
Israel's qualitative military edge of the total of all
equipment acquisitions in recent years by countries in its
region.
SECTION 7. DEFINITIONS.
This section defines (1) ``appropriate congressional
committees'' and (2) ``qualitative military edge.''
IV. Cost Estimate
Rule XXVI, paragraph 11(a) of the Standing Rules of the
Senate requires that committee reports on bills or joint
resolutions contain a cost estimate for such legislation. To
date, the committee has not received the Congressional Budget
Office cost estimate for S. 2165.
V. Evaluation of Regulatory Impact
Pursuant to Rule XXVI, paragraph 11(b) of the Standing
Rules of the Senate, the committee has determined that there is
no regulatory impact as a result of this legislation.
VI. Changes in Existing Law
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, 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).
FOREIGN ASSISTANCE ACT OF 1961
* * * * * * *
Chapter 2--Military Assistance
* * * * * * *
Sec. 514. Stockpiling of Defense Articles for Foreign
Countries.--(a) No defense article in the inventory of the
Department of Defense which is set aside, reserved, or in any
way earmarked or intended for future use by any foreign country
may be made available to or for use by any foreign country
unless such transfer is authorized under this Act or the Arms
Export Control Act, or any subsequent corresponding
legislation, and the value of such transfer is charged against
funds authorized under such legislation or against the
limitations specified in such legislation, as appropriate, for
the fiscal period in which such defense article is transferred.
For purposes of this subsection, ``value'' means the
acquisition cost plus crating, packing, handling, and
transportation costs incurred in carrying out this section.
(b)(1) The value of defense articles to be set aside,
earmarked, reserved, or intended for use as war reserve stocks
for allied or other foreign countries (other than for purposes
of the North Atlantic Treaty Organization or in the
implementation of agreements with Israel) in stockpiles located
in foreign countries may not exceed in any fiscal year an
amount that is specified in security assistance authorizing
legislation for that fiscal year.
(2)(A) The value of such additions to stockpiles of defense
articles in foreign countries shall not exceed $200,000,000 for
each of [fiscal years 2011 and 2012] fiscal years 2013 and
2014.
* * * * * * *
DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2005
* * * * * * *
Chapter 2--Bilateral Economic Assistance
FUNDS APPROPRIATED TO THE PRESIDENT
* * * * * * *
GENERAL PROVISIONS, THIS CHAPTER
Sec. 12001. (a)(1) Notwithstanding section 514 of the
Foreign Assistance Act of 1961 (22 U.S.C. 2321h), the President
may transfer to Israel, in exchange for concessions to be
negotiated by the Secretary of Defense, with the concurrence of
the Secretary of State, any or all of the items described in
paragraph (2).
* * * * * * *
(d) No transfer may be made under the authority of this
section [more than 8 years after] more than 10 years after the
date of the enactment of this Act.
* * * * * * *
EMERGENCY WARTIME SUPPLEMENTAL APPROPRIATIONS ACT, 2003
* * * * * * *
Chapter 5--Other Bilateral Economic Assistance
* * * * * * *
LOAN GUARANTEES TO ISRAEL
During the period beginning March 1, 2003, and ending
September 30, 2007, loan guarantees may be made available to
Israel, guaranteeing 100 percent of the principal and interest
on such loans, the principal amount, any part of which is to be
guaranteed, not to exceed $9,000,000,000, of which up to
$3,000,000,000 may be issued prior to October 1, 2003, or
thereafter and of which $3,000,000,000 may be issued subsequent
to [September 30, 2011:] September 30, 2015: Provided, That
such guarantees shall constitute obligations, in accordance
with the terms of such guarantees, of the United States and the
full faith and credit of the United States is hereby pledged
for the full payment and performance of such obligations:
Provided further, That if less than the full amount of
guarantees authorized to be made available is issued prior to
[September 30, 2011,] September 30, 2015, the authority to
issue the balance of such guarantees shall extend to the
subsequent fiscal year: Provided further, That guarantees may
be issued under this section only to support activities in the
geographic areas which were subject to the administration of
the Government of Israel before June 5, 1967: Provided further,
That the amount of guarantees that may be issued shall be
reduced by an amount equal to the amount extended or estimated
to have been extended by the Government of Israel during the
period from March 1, 2003, to the date of issue of the
guarantee, for activities which the President determines are
inconsistent with the objectives and understandings reached
between the United States and the Government of Israel
regarding the implementation of the loan guarantee program:
Provided further, That the President shall submit a report to
Congress no later than September 30 of each fiscal year during
the pendency of the program specifying the amount calculated
under the preceding proviso and that will be deducted from the
amount of guarantees authorized to be issued in the next fiscal
year: Provided further, That the interest rate for loans
guaranteed under this heading may include a reasonable fee to
cover the costs and fees incurred by the borrower in connection
with this program or financing under this heading in the event
the borrower elects not to finance such costs or fees out of
loan principal: Provided further, That no appropriations under
this heading are available for the subsidy costs for these loan
guarantees: Provided further, That the Government of Israel
will pay the cost, as defined in section 502 of the Federal
Credit Reform Act of 1990, as amended, including any non-
payment exposure risk, associated with the loan guarantees
issued in any fiscal year, on a pro rata basis as each
guarantee is issued during that year: Provided further, That
all fees (as defined in section 601(e) of Public Law 102-391)
associated with the loan guarantees shall be paid by the
Government of Israel to the Government of the United States:
Provided further, That funds made available for assistance to
Israel under chapter 4 of part II of the Foreign Assistance Act
of 1961, as amended, may be utilized by the Government of
Israel to pay such fees to the United States Government:
Provided further, That the President shall determine the terms
and conditions for issuing guarantees, taking into
consideration the budgetary and economic reforms undertaken by
Israel: Provided further, That if the President determines that
these terms and conditions have been breached, the President
may suspend or terminate the provision of all or part of the
loan guarantees not yet issued under this heading.
* * * * * * *
