S.Amdt. 2532

SA 2532. Mr. COTTON submitted an amendment intended to be proposed by
him to the bill S. 4638, to authorize appropriations for fiscal year
2025 for military activities of the Department of Defense, for military
construction, and for defense activities of the Department of Energy,
to prescribe military personnel strengths for such fiscal year, and for
other purposes; which was ordered to lie on the table; as follows:

At the end of subtitle C of title VIII, add the following:

SEC. 855. MATTERS RELATING TO DEFENSE MANUFACTURING.

(a) Authorities of Department of Defense to Increase
Domestic Defense Manufacturing.--
(1) In general.--Subpart I of part V of subtitle A of title
10, United States Code, is amended by adding at the end the
following new chapter:

``CHAPTER 390--DEFENSE MANUFACTURING

``Sec.
``5001. Definitions.
``5002. Incentivizing expansion of essential defense industrial base
capabilities.
``5003. Defense Industrial Base Fund.

``Sec. 5001. Definitions

``In this chapter:
``(1) Critical component.--
``(A) In general.--The term `critical component' includes
such components, subsystems, systems, and related special
tooling and test equipment essential to the production,
repair, maintenance, or operation of weapon systems or other
items of equipment identified by the Secretary as being
essential to the execution of the national security strategy
of the United States.
``(B) Inclusion of certain components.--Components
identified as critical by a National Security Assessment
conducted pursuant to section 113(i) of this title, or by a
Presidential determination as a result of a petition filed
under section 232 of the Trade Expansion Act of 1962 (19
U.S.C. 1862), shall be designated as critical components for
purposes of this chapter, unless the President determines
that the designation is unwarranted.
``(2) Critical technology.--The term `critical technology'
includes any technology designated by the Secretary to be
essential to the national defense.
``(3) Critical technology item.--The term `critical
technology item' means materials directly employing, derived
from, or utilizing a critical technology.
``(4) Domestic industrial base.--The term `domestic
industrial base' means domestic sources which are providing,
or which would be reasonably expected to provide, materials
or services to meet national defense requirements during
peacetime, national emergency, or war.
``(5) Domestic source.--The term `domestic source' means a
business concern--
``(A) that performs in the United States, Canada,
Australia, New Zealand, or the United Kingdom substantially
all of the research and development, engineering,
manufacturing, and production activities required of such
business concern under a contract with the United States
relating to a critical component or a critical technology
item; and
``(B) that procures from business concerns described in
subparagraph (A) substantially all of any components and
assemblies required under a contract with the United States
relating to a critical component or critical technology item.
``(6) Facilities.--The term `facilities' includes all types
of buildings, structures, or other improvements to real
property (but excluding farms, churches or other places of
worship, and private dwelling houses), and services relating
to the use of any such building, structure, or other
improvement.
``(7) Industrial resources.--The term `industrial
resources' means materials, services, processes, or
manufacturing equipment (including the processes,
technologies, and ancillary services for the use of such
equipment) needed to establish or maintain an efficient and
modern national defense industrial base.
``(8) Materials.--The term `materials' includes--
``(A) any raw materials (including minerals, metals, and
advanced processed materials), commodities, articles,
components (including critical components), products, and
items of supply; and
``(B) any technical information or services ancillary to
the use of any such materials,

[[Page S4862]]

commodities, articles, components, products, or items.
``(9) National defense.--The term `national defense' has
the meaning given that term in section 4818(f) of this title.
``(10) Person.--The term `person' includes an individual,
corporation, partnership, association, or any other organized
group of persons, or legal successor or representative
thereof, or any State or local government or agency thereof.
``(11) Services.--The term `services' includes any effort
that is needed for or incidental to--
``(A) the development, production, processing,
distribution, delivery, or use of an industrial resource or a
critical technology item;
``(B) the construction of facilities;
``(C) the movement of individuals and property by all modes
of civil transportation; or
``(D) other national defense programs and activities.
``(12) Secretary.--The term `Secretary' means the Secretary
of Defense.

``Sec. 5002. Incentivizing expansion of essential defense
industrial base capabilities

``(a) Incentives.--
``(1) In general.--To create, maintain, protect, expand, or
restore domestic industrial base capabilities essential for
the national defense, the Secretary may make provision--
``(A) for purchases of or commitments to purchase an
industrial resource or a critical technology item for
Department of Defense use or resale;
``(B) for the encouragement of exploration, development,
and mining of critical and strategic materials, and other
materials;
``(C) for the development of production capabilities; and
``(D) for the increased use of emerging technologies in
security program applications and the rapid transition of
emerging technologies--
``(i) from government-sponsored research and development to
commercial applications; and
``(ii) from commercial research and development to national
defense applications.
``(2) Terms of sales.--No commodity purchased under this
subsection shall be sold at less than--
``(A) the established ceiling price for such commodity,
except that minerals, metals, and materials shall not be sold
at less than the established ceiling price, or the current
domestic market price, whichever is lower; or
``(B) if no ceiling price has been established, the current
domestic market price for such commodity.
``(3) Determinations required.--The Secretary may not
execute a contract under this subsection unless the Secretary
determines, with appropriate explanatory material and in
writing, that--
``(A) the industrial resource, material, or critical
technology item is essential to the national defense; and
``(B) without action by the Secretary under this section,
United States industry cannot reasonably be expected to
provide the capability for the needed industrial resource,
material, or critical technology item in a timely manner.
``(b) Exemption for Certain Limitations.--Subject to the
limitations in subsection (a), purchases and commitments to
purchase and sales under subsection (a) may be made without
regard to the limitations of existing law for such
quantities, and on such terms and conditions, including
advance payments, and for such periods, but not extending
beyond a date that is not more than 10 years from the date on
which such purchase, purchase commitment, or sale was
initially made, as the Secretary deems necessary.
``(c) Incidental Authority.--The procurement power granted
to the Secretary by this section shall include the power to
transport and store and have processed and refined any
materials procured under this section.
``(d) Installation of Equipment in Industrial Facilities.--
``(1) Installation authorized.--If the Secretary determines
that such action will aid the national defense, the Secretary
is authorized--
``(A) to procure and install additional equipment,
facilities, processes, or improvements to plants, factories,
and other industrial facilities owned by the Department of
Defense;
``(B) to procure and install equipment owned by the
Department in plants, factories, and other industrial
facilities owned by private persons;
``(C) to provide for the modification or expansion of
privately owned facilities, including the modification or
improvement of production processes; and
``(D) to sell or otherwise transfer equipment owned by the
Department and installed under this subsection to the owners
of such plants, factories, or other industrial facilities.
``(2) Indemnification.--The owner of any plant, factory, or
other industrial facility that receives equipment owned by
the Federal Government under this section shall agree--
``(A) to waive any claim against the United States under
section 107 or 113 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.
9607 and 9613);
``(B) to indemnify the United States against any claim
described in paragraph (1) made by a third party that arises
out of the presence or use of equipment owned by the Federal
Government; and
``(C) to indemnify the contractor, if any, in accordance
with Public Law 85-804 (50 U.S.C. 1431 et seq.) and Executive
Order 10789 (50 U.S.C. 1431 note; relating to authorizing
agencies of the Government to exercise certain contracting
authority in connection with national-defense functions and
prescribing regulations governing the exercise of such
authority), as implemented by part 50 of the Federal
Acquisition Regulation.
``(e) Transfer to National Defense Stockpile of Excess
Metals, Minerals, and Materials.--
``(1) In general.--Notwithstanding any other provision of
law to the contrary, metals, minerals, and materials acquired
pursuant to this section that, in the judgment of the
Secretary, are excess to the needs of programs under this
chapter, shall be transferred to the National Defense
Stockpile established by the Strategic and Critical Materials
Stock Piling Act (50 U.S.C. 98 et seq.), when the Secretary
deems such action to be in the public interest.
``(2) Transfers at no charge.--Transfers made pursuant to
this subsection shall be made without charge against or
reimbursement from funds appropriated for the purposes of the
Strategic and Critical Materials Stock Piling Act ( 50 U.S.C.
98 et seq.), except that costs incident to such transfer,
other than acquisition costs, shall be paid or reimbursed
from such funds.
``(f) Development of Substitutes.--When, in the judgment of
the Secretary it will aid the national defense, the Secretary
may make provision for the development of substitutes for
strategic and critical materials, critical components,
critical technology items, and other industrial resources.

``Sec. 5003. Defense Industrial Base Fund

``(a) Establishment of Fund.--There is established in the
Treasury of the United States a separate fund to be known as
the `Defense Industrial Base Fund' (in this section referred
to as the `Fund').
``(b) Moneys in Fund.--There shall consist of amounts
appropriated or otherwise made available to the Fund.
``(c) Use of Funds.--The Fund shall be available to carry
out the provisions and purposes of this chapter, subject to
the limitations set forth in this chapter and in
appropriations Acts.
``(d) Duration of Fund.--Amounts in the Fund shall remain
available until expended.
``(e) Fund Manager.--The Secretary shall be the manager of
the Fund. The duties of the Fund manager shall include--
``(1) determining the liability of the Fund;
``(2) ensuring the visibility and accountability of
transactions engaged in through the Fund; and
``(3) reporting to the Congress each year regarding
activities of the Fund during the previous fiscal year.''.
(2) Modifications to industrial base fund and defense
production act fund.--
(A) Transfer of funds.--All amounts in the Defense
Production Act Fund under section 304 of the Defense
Production Act of 1950 (50 U.S.C. 4534) on the day before the
date of the enactment of this Act, other than amounts
appropriated to the Fund by division B of the CARES Act
(Public Law 116-136; 134 Stat. 505) or section 30001 of
Public Law 117-169 (commonly known as the ``Inflation
Reduction Act of 2022'') (136 Stat. 2027), shall be
transferred to and deposited in the Defense Industrial Base
Fund under section 5003 of title 10, United States Code, as
added by [subparagraph (B)].
(B) Availability of amounts in industrial base fund.--
Section 4817(d) of title 10, United States Code, is amended--
(i) in paragraph (3), by striking ``; and'' and inserting a
semicolon;
(ii) in paragraph (4), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following new paragraph:
``(5) to carry out chapter 390.''.
(C) Amendments to defense production act fund.--
(i) Renaming of fund.--Section 304 of the Defense
Production Act of 1950 (50 U.S.C. 4534) is amended--

(I) in the section heading, by striking ``defense
production act fund'' and inserting ``non-defense national
crisis production fund''; and
(II) in subsection (a), by striking ``Defense Production
Act Fund'' and inserting ``Non-Defense National Crisis
Production Fund''.

(ii) References.--On and after the date of the enactment of
this Act, any reference in any law or regulation to the
Defense Production Act Fund shall be deemed to be a reference
to the Non-Defense National Crisis Production Fund.
(3) Clerical amendments.--The table of chapters as the
beginning of subtitle A of title 10, United States Code, and
at the beginning of part V of such subtitle, are each amended
by inserting after the item relating to chapter 389 the
following new item:

``390. Defense Manufacturing.''.

(b) Direct Hire Authority for Office of the Assistant
Secretary of Defense for Industrial Base Policy.--The
Secretary of Defense may appoint, without regard to the
provisions of subchapter I of chapter 33 (other than sections
3303, 3307, and 3328 of such chapter) of title 5, United
States Code, qualified candidates in the competitive service
(as defined in section 2102 of that title) of the Department
of Defense to any position in the Office of the Assistant
Secretary of Defense for Industrial Base Policy.

[[Page S4863]]

(c) National Defense Executive Reserve.--The Secretary of
Defense shall establish a pilot program under which the
Secretary enters into voluntary agreements with senior
executives of traditional and nontraditional defense
contractors, including executives from the supplier base, to
advise the Secretary on the following:
(1) Assessing the health of the defense industrial base.
(2) Identifying critical shortages and impediments to
production of critical munitions and other war materials.
(3) Identifying limiting factors for required production
rates for critical munitions.
(4) Analyzing workforce issues across the defense
industrial base.
(5) Assisting in deconflicting efforts of the Department of
Defense and the Armed Forces to improve defense industrial
base capacity.
(6) Assisting the Secretary in carrying out chapter 390 of
title 10, as added by subsection (a).
(d) GAO Review of Staffing Levels of MCEIP.--Not later than
July 1, 2025, the Comptroller General of the United States
shall submit to the congressional defense committees a report
assessing staffing levels at the Office of Manufacturing
Capability Expansion and Investment Prioritization.
______