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114th Congress    }                                      {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                      {     114-826

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

 
 UNITED STATES-ISRAEL CYBERSECURITY COOPERATION ENHANCEMENT ACT OF 2016

                                _______
                                

 November 15, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. McCaul, from the Committee on Homeland Security, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5843]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security, to whom was referred 
the bill (H.R. 5843) to establish a grant program at the 
Department of Homeland Security to promote cooperative research 
and development between the United States and Israel on 
cybersecurity, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Congressional Budget Office Estimate.............................     5
Statement of General Performance Goals and Objectives............     6
Duplicative Federal Programs.....................................     6
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................     6
Federal Mandates Statement.......................................     6
Preemption Clarification.........................................     6
Disclosure of Directed Rule Makings..............................     6
Advisory Committee Statement.....................................     6
Applicability to Legislative Branch..............................     6
Section-by-Section Analysis of the Legislation...................     7
Changes in Existing Law Made by the Bill, as Reported............     7

    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 ``United States-Israel Cybersecurity 
Cooperation Enhancement Act of 2016''.

SEC. 2. UNITED STATES-ISRAEL CYBERSECURITY COOPERATION.

  (a) Grant Program.--
          (1) Establishment.--The Secretary, in accordance with the 
        agreement entitled the ``Agreement between the Government of 
        the United States of America and the Government of the State of 
        Israel on Cooperation in Science and Technology for Homeland 
        Security Matters'', dated May 29, 2008 (or successor 
        agreement), and the requirements specified in paragraph (2), 
        shall establish a grant program at the Department to support--
                  (A) cybersecurity research and development; and
                  (B) demonstration and commercialization of 
                cybersecurity technology.
          (2) Requirements.--
                  (A) Applicability.--Notwithstanding any other 
                provision of law, in carrying out a research, 
                development, demonstration, or commercial application 
                program or activity that is authorized under this 
                section, the Secretary shall require cost sharing in 
                accordance with this paragraph.
                  (B) Research and development.--
                          (i) In general.--Except as provided in clause 
                        (ii), the Secretary shall require not less than 
                        50 percent of the cost of a research, 
                        development, demonstration, or commercial 
                        application program or activity described in 
                        subparagraph (A) to be provided by a non-
                        Federal source.
                          (ii) Reduction.--The Secretary may reduce or 
                        eliminate, on a case-by-case basis, the 
                        percentage requirement specified in clause (i) 
                        if the Secretary determines that such reduction 
                        or elimination is necessary and appropriate.
                  (C) Merit review.--In carrying out a research, 
                development, demonstration, or commercial application 
                program or activity that is authorized under this 
                section, awards shall be made only after an impartial 
                review of the scientific and technical merit of the 
                proposals for such awards has been carried out by or 
                for the Department.
                  (D) Review processes.--In carrying out a review under 
                subparagraph (C), the Secretary may use merit review 
                processes developed under section 302(14) of the 
                Homeland Security Act of 2002 (6 U.S.C. 182(14)).
          (3) Eligible applicants.--An applicant shall be eligible to 
        receive a grant under this subsection if the project of such 
        applicant--
                  (A) addresses a requirement in the area of 
                cybersecurity research or cybersecurity technology, as 
                determined by the Secretary; and
                  (B) is a joint venture between--
                          (i)(I) a for-profit business entity, academic 
                        institution, National Laboratory (as defined in 
                        section 2 of the Energy Policy Act of 2005 (42 
                        U.S.C. 15801)), or nonprofit entity in the 
                        United States; and
                          (II) a for-profit business entity, academic 
                        institution, or nonprofit entity in Israel; or
                          (ii)(I) the Federal Government; and
                          (II) the Government of Israel.
          (4) Applications.--To be eligible to receive a grant under 
        this subsection, an applicant shall submit to the Secretary an 
        application for such grant in accordance with procedures 
        established by the Secretary, in consultation with the advisory 
        board established under paragraph (5).
          (5) Advisory board.--
                  (A) Establishment.--The Secretary shall establish an 
                advisory board to--
                          (i) monitor the method by which grants are 
                        awarded under this subsection; and
                          (ii) provide to the Secretary periodic 
                        performance reviews of actions taken to carry 
                        out this subsection.
                  (B) Composition.--The advisory board established 
                under subparagraph (A) shall be composed of three 
                members, to be appointed by the Secretary, of whom--
                          (i) one shall be a representative of the 
                        Federal Government;
                          (ii) one shall be selected from a list of 
                        nominees provided by the United States-Israel 
                        Binational Science Foundation; and
                          (iii) one shall be selected from a list of 
                        nominees provided by the United States-Israel 
                        Binational Industrial Research and Development 
                        Foundation.
          (6) Contributed funds.--Notwithstanding any other provision 
        of law, the Secretary may accept, retain, and use funds 
        contributed by any person, government entity, or organization 
        for purposes of carrying out this subsection--
                  (A) without further appropriation; and
                  (B) without fiscal year limitation.
          (7) Report.--Not later than 180 days after the date of 
        completion of a project for which a grant is provided under 
        this subsection, the grant recipient shall submit to the 
        Secretary a report that contains--
                  (A) a description of how the grant funds were used by 
                the recipient; and
                  (B) an evaluation of the level of success of each 
                project funded by the grant.
          (8) Classification.--Grants shall be awarded under this 
        subsection only for projects that are considered to be 
        unclassified by both the United States and Israel.
  (b) Termination.--The grant program and the advisory committee 
established under this section terminate on the date that is seven 
years after the date of the enactment of this Act.
  (c) Prohibition on Additional Funding.--No additional funds are 
authorized to be appropriated to carry out this Act.
  (d) Definitions.--In this section--
          (1) the term ``cybersecurity research'' means research, 
        including social science research, into ways to identify, 
        protect against, detect, respond to, and recover from 
        cybersecurity threats;
          (2) the term ``cybersecurity technology'' means technology 
        intended to identify, protect against, detect, respond to, and 
        recover from cybersecurity threats;
          (3) the term ``cybersecurity threat'' has the meaning given 
        such term in section 102 of the Cybersecurity Information 
        Sharing Act of 2015 (enacted as title I of the Cybersecurity 
        Act of 2015 (division N of the Consolidated Appropriations Act, 
        2016 (Public Law 114-113)));
          (4) the term ``Department'' means the Department of Homeland 
        Security; and
          (5) the term ``Secretary'' means the Secretary of Homeland 
        Security.

                          PURPOSE AND SUMMARY

    H.R. 5843 the United States-Israel Cybersecurity 
Cooperation Enhancement Act of 2016 authorizes the Secretary of 
Homeland Security to carry out a grant program at the U.S. 
Department of Homeland Security (DHS) to support cybersecurity 
research and development and the demonstration and 
commercialization of cybersecurity technologies with the State 
of Israel.
    Additionally, H.R. 5843 requires cost sharing (with at 
least 50 percent of program costs provided by a non-Federal 
source) but the requirement may be reduced or waived by the 
Secretary of DHS on a case-by-case basis. Funds may be 
contributed to the grant program by any person, government 
entity or organization. The Secretary must utilize an advisory 
board to oversee and monitor the grants that are awarded and 
report to Congress on the use of grant funds.

                  BACKGROUND AND NEED FOR LEGISLATION

    Currently, the United States and Israel are parties to an 
``Agreement on Cooperation in Science and Technology for 
Homeland Security Matters.'' The Agreement, which covers mutual 
interest in research, development, testing and evaluation 
relating to homeland security, authorizes the Under Secretary 
of Science and Technology to initiate, encourage, develop and 
facilitate bilateral Cooperative Activities with the State of 
Israel in a myriad of homeland security-related science and 
technology capabilities.\1\ H.R. 5843 builds on this 
established relationship between the U.S. and Israel.
---------------------------------------------------------------------------
    \1\Agreement between the Government of the United States of America 
and the Government of the State of Israel on Cooperation in Science and 
Technology for Homeland Security Matters. May 29, 2008. Accessed at: 
https://www.dhs.gov/xlibrary/assets/
agreement_us_israel_sciencetech_cooperation_2008-05-29.pdf.
---------------------------------------------------------------------------
    In particular, H.R. 5843 encourages innovation responsive 
to homeland security needs. The pace of change in the 
cybersecurity landscape--from increasing use of vulnerable 
technologies to more sophisticated threat actors--requires 
enhanced cybersecurity research and development. Protecting 
critical networks will require commercialization of products 
for the national security market as well as a better 
understanding of the human element of cybersecurity through 
social science research. As two leading destinations for 
private cybersecurity investment\2\, both the United States and 
Israel have the capacity to address national cybersecurity 
challenges. Collaborative activities leverage the existing 
infrastructure in both countries to drive original solutions to 
shared security concerns in this new domain.
---------------------------------------------------------------------------
    \2\Reed, J. (2016, January 12). Israel cyber-security expertise 
lures growing share of investment. The Financial Times. Retrieved from 
https://www.ft.com/content/dfa5c916-b90e-11e5-b151-8e15c9a029fb.
---------------------------------------------------------------------------

                                HEARINGS

    No hearings were held on H.R. 5843 in the 114th Congress.

                        COMMITTEE CONSIDERATION

    The Committee met on September 13, 2016, to consider H.R. 
5843, and ordered the measure to be reported to the House with 
a favorable recommendation, as amended, by voice vote. The 
Committee took the following actions:
    The following amendment was offered:

 An Amendment in the Nature of a Substitute offered by Mr. 
Langevin (#1); was AGREED TO by voice vote.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto.
    No recorded votes were requested during consideration of 
H.R. 5843.

                      COMMITTEE OVERSIGHT FINDINGS

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

   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 finds that H.R. 
5843, the United States-Israel Cybersecurity Cooperation 
Enhancement Act of 2016, would result in no new or increased 
budget authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE 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.

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 23, 2016.
Hon. Michael McCaul,
Chairman, Committee on Homeland Security,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5843, the United 
States-Israel Cybersecurity Cooperation Enhancement Act of 
2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                             Mark P. Hadley
                                                  (for Keith Hall).
    Enclosure.

H.R. 5843--United States-Israel Cybersecurity Cooperation Enhancement 
        Act of 2016

    H.R. 5843 would direct the Department of Homeland Security 
(DHS) to establish a grant program to support cybersecurity 
research and development and the commercialization of 
cybersecurity technology over a seven-year period. Grant 
recipients would have to initiate joint ventures that would 
include both U.S. and Israeli participants (such as academic 
institutions). Based on information from DHS about the 
potential scope of the program and its relationship with other 
cybersecurity research being done at DHS, CBO estimates that 
the new grant program would cost about $1 million annually; 
such spending would be subject to the availability of 
appropriated funds.
    Enacting H.R. 5843 could affect direct spending if non-
federal partners contribute funds for DHS to provide 
cybersecurity grants; therefore, pay-as-you-go procedures do 
apply. However, the net effect of collecting and spending those 
contributions would be negligible. Enacting H.R. 5843 would not 
affect revenues.
    CBO estimates that enacting H.R. 5843 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 5843 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. 
Academic institutions would benefit from grants established in 
the bill for cybersecurity research and technology 
commercialization. Any costs incurred, including matching 
contributions, would result from complying with conditions of 
federal assistance.
    The CBO staff contact for this estimate is Mark Grabowicz. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, H.R. 5843 contains the following 
general performance goals and objectives, including outcome 
related goals and objectives authorized.
    This legislation authorizes the Secretary of Homeland 
Security to carry out a grant program at the Department of 
Homeland Security to support cybersecurity research and 
development and the demonstration and commercialization of 
cybersecurity technologies with the State of Israel.

                      DUPLICATIVE FEDERAL PROGRAMS

    Pursuant to clause 3(c) of rule XIII, the Committee finds 
that H.R. 5843 does not contain any provision that establishes 
or reauthorizes a program known to be duplicative of another 
Federal program.

   CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED TARIFF 
                                BENEFITS

    In compliance with rule XXI of the Rules of the House of 
Representatives, this bill, as reported, contains no 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of the rule 
XXI.

                       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.

                        PREEMPTION CLARIFICATION

    In compliance with section 423 of the Congressional Budget 
Act of 1974, requiring the report of any Committee on a bill or 
joint resolution to include a statement on the extent to which 
the bill or joint resolution is intended to preempt State, 
local, or Tribal law, the Committee finds that H.R. 5843 does 
not preempt any State, local, or Tribal law.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    The Committee estimates that H.R. 5843 would require no 
directed rule makings.

                      ADVISORY COMMITTEE STATEMENT

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

                  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.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1.  Short title

    This section provides that this bill may be cited as the 
``United States-Israel Cybersecurity Cooperation Enhancement 
Act of 2016''.

Sec. 2.  United States-Israel cybersecurity cooperation

    This section establishes a grant program at the U.S. 
Department of Homeland Security (DHS) to support cybersecurity 
research and development and demonstration and 
commercialization of cybersecurity technologies. This grant 
program is in accordance with the ``Agreement between the 
Government of the United States and the Government of the State 
of Israel on Cooperation in Science and Technology for Homeland 
Security Matters'' signed on May 29, 2008 or any successor 
agreement.
    This section defines cost sharing as one of the 
requirements of the grant program. Under those requirements the 
Secretary shall require cost sharing at not less than 50 
percent to be provided by a non-Federal source. The Secretary 
may reduce or waive the percentage requirement on a case-by-
case basis. This section also requires grant awards to be made 
only after an impartial review of the scientific and technical 
merit of the proposals, but allows the Secretary to utilize the 
merit review processes developed under section 302(14) of the 
Homeland Security Act of 2002.\3\
---------------------------------------------------------------------------
    \3\Codified at 6 U.S.C. 182(14) (requiring the Under Secretary for 
Science and Technology to develop and oversee the administration of 
guidelines for merit review of research and development throughout 
DHS).
---------------------------------------------------------------------------
    This section also defines an eligible applicant as one 
which addresses a requirement in the arena of ``cybersecurity 
research'' or ``cybersecurity technology'' (as defined in the 
proposed legislation) and is comprised of either: 1) a U.S. 
non-governmental and an Israeli non-governmental entity; or 2) 
the Governments of the United States and Israel.
    In order to be eligible for a grant the applicant must 
submit an application to the Secretary, who will consult with 
an advisory board charged with monitoring the method by which 
grants are awarded. The advisory board shall be comprised of a 
member of the Federal Government, a selectee from the United 
States-Israel Binational Science Foundation and a selectee from 
the United States-Israel Binational Industrial Research and 
Development Foundation.
    This section further outlines the reporting requirements 
grant recipients must meet within 180 days of completing a 
grant-funded project and requires all projects to be 
unclassified.
    Lastly, this section specifies that the grant program and 
advisory committee established herein shall terminate seven 
years from the date of enactment and authorizes no additional 
funds to carry out this program.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    As reported, H.R. 5843 makes no changes to existing law.

                                  [all]