S.Amdt. 3545

SA 3545. Ms. HIRONO submitted an amendment intended to be proposed by
her to the bill S. 2296, to authorize appropriations for fiscal year
2026 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:

Strike section 849A and insert the following:

SEC. 849A. MODIFICATIONS TO DEFENSE INDUSTRIAL BASE FUND.

Section 4817 of title 10, United States Code, is amended by
adding at the end the following new subsections:
``(g) Eligible Uses of Authorities.--
``(1) In general.--The Secretary may use the authorities
provided by this section with respect to upstream, mid-
stream, and downstream supply chains, including material,
material production, components, subassemblies, and finished
products, testing and qualification, infrastructure, facility
construction and improvement, and equipment needed directly
for the following:
``(A) Castings and forgings.
``(B) Kinetic capabilities, including sensors, targeting
systems, and delivery platforms.
``(C) Microelectronics.
``(D) Machine tools, including but not limited to
subtractive, additive, convergent, stamping, forging,
abrasives, metrology, and other production equipment.
``(E) Critical minerals, materials, and chemicals.
``(F) Workforce for the defense industrial base.
``(G) Advanced manufacturing capacity, including echelon
manufacturing forward in the Indo-Pacific Command theater.
``(H) Unmanned vehicles, including subsurface, surface,
land, air one-way, attritables, and launch and recovery
platforms.
``(I) Manned aircraft.
``(J) Ground systems.
``(K) Power sources.
``(L) Ship and submarine, including assembly and automation
technologies and capabilities, new or modernized
infrastructure for new construction or maintenance and
sustainment and battle damage repair.
``(M) Other materiel solutions required to support Indo-
Pacific Command operational plans as required.
``(N) Defense space systems.
``(O) Sourcing strategic and critical materials through
recycling of or reclamation from end-of-life equipment.
``(2) Prohibition on use in covered countries.--The
Secretary may not use the authorities provided by this
section for any activity in a covered country.
``(3) Use of authorities for other purposes.--The Secretary
may not use the authorities provided by this section for a
purpose not described in paragraph (1) unless, not less than
30 days before doing so, the Secretary--
``(A) determines that--
``(i) the use of the authority for that purpose is
essential to the national security interests of the United
States; and
``(ii) without the use of the authority for that purpose,
United States industry cannot reasonably be expected to
provide the capability needed in a timely manner; and
``(B) submits to the congressional defense committees a
report on the determination that includes appropriate
explanatory material.
``(h) Grants and Other Incentives for Domestic Industrial
Base Capabilities.--To create, maintain, protect, expand, or
restore domestic industrial base capabilities essential for
the national security interests of the United States, the
Secretary may make provision for--
``(1) use of contracts, grants, or other transaction
authorities, including cooperative agreements;
``(2) incentives for the private sector to develop
capabilities in areas of national security interest;
``(3) making awards to third party entities to support
investments in small- and medium-sized entities working in
areas of national security interest, including debt and
equity investments, that would benefit missions of the
Department of Defense; and
``(4) subsidies to offset market manipulation or ensure
allied and domestic viability of grants made from other
market uncertainties.
``(i) Defense Industrial Base Purchase Commitment
Program.--
``(1) In general.--To create, maintain, protect, expand, or
restore industrial base capabilities essential for the
national security interests of the United States, the
Secretary may make provision for purchase commitments for--
``(A) Federal Government use or resale of an industrial
resource or a critical technology item;
``(B) the encouragement of exploration, development, and
mining of strategic and critical materials;
``(C) development of other materials and components;
``(D) the development of production capabilities; and
``(E) the increased use of emerging technologies in defense
program applications and the rapid transition of emerging
technologies--
``(i) from Federal Government-sponsored research and
development to commercial applications; and
``(ii) from commercial research and development to national
defense applications.
``(2) Exemption for certain limitations.--
``(A) Purchases.--Except as provided by subparagraph (B),
purchase commitments under paragraph (1) may be made without
regard to the limitations of existing law (other than section
1341 of title 31), 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 was initially
made, as the Secretary deems necessary.
``(B) Limitation.--Purchases commitments under paragraph
(1) involving higher than established ceiling prices (or if
no such established ceiling prices exist, currently
prevailing market prices) or that result in an anticipated
loss on resale shall not be made, unless it is determined
that supply of the materials could not be effectively
increased or provisioned at lower prices or on terms more
favorable to the Federal Government, or that such purchases
are necessary to assure the availability to the United States
of overseas supplies.
``(3) Findings of secretary.--
``(A) In general.--The Secretary may take the actions
described in subparagraph (B), if the Secretary finds that--
``(i) under generally fair and equitable ceiling prices,
for any raw or nonprocessed material or component, there will
result a decrease in supplies from high-cost sources of such
material and that the continuation of such supplies is
necessary to carry out the objectives of this section; or
``(ii) an increase in cost of transportation is temporary
in character and threatens to impair maximum production or
supply in any area at stable prices of any materials.
``(B) Subsidy payments authorized.--Upon a finding under
subparagraph (A), the Secretary may make provision for
subsidy payments on any such produced material from other
than covered countries, in such amounts and in such manner
(including purchase commitments of such material or component
and its resale at a loss, and on such terms and conditions,
as the Secretary determines to be necessary to ensure that
supplies from such high-cost sources are continued, or that
maximum production or supply in such area at stable prices of
such materials is maintained, as the case may be.
``(4) Installation of equipment in industrial facilities.--
If the Secretary determines that such action will aid the
national security interests of the United States, the
Secretary is authorized--

[[Page S5312]]

``(A) to procure and install additional equipment,
facilities, processes or improvements to plants, factories,
and other industrial facilities owned by the Federal
Government;
``(B) to procure and install equipment including owned by
the Federal Government in plants, factories, and other
industrial facilities owned by private persons;
``(C) to provide for constructing new facilities, the
modification, or expansion of privately owned facilities,
including the modification or improvement of production
processes, when taking actions under this subsection or
subsection (h);
``(D) to sell or otherwise transfer equipment owned by the
Federal Government and installed under this subsection to the
owners of such plants, factories, or other industrial
facilities;
``(E) to construct facilities for the purposes described in
section subsection (g)(1); and
``(F) to apply contracts, grants, or other transactions
authorities.
``(5) Excess metals, minerals, materials, and components.--
``(A) In general.--Metals, minerals, materials, and
components acquired pursuant to this subsection which, in the
judgment of the Secretary, are excess to the needs of
programs under this section, 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.),
or other national reserves if available, when the Secretary
deems such action to be in the public interest.
``(B) Transfers at no charge.--Transfers made pursuant to
this paragraph 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.), or other national reserves if available, except
that costs incident to such transfer, other than acquisition
costs, shall be paid or reimbursed from such funds.
``(6) Substitutes.--When, in the judgment of the Secretary,
it will aid the national security interests of the United
States, the Secretary may make provision for the development
and qualification a of substitutes for strategic and critical
materials, components, critical technology items, and other
industrial resources.
``(7) Sourcing of strategic and critical materials from
end-of-life equipment.--The Secretary shall, to the maximum
extent practicable, use the authority of this subsection to
source strategic and critical materials through recycling of
or reclamation from end-of-life equipment.
``(j) Strengthening Domestic Productive Capacity.--
``(1) In general.--The Secretary may provide appropriate
incentives to develop, maintain, modernize, restore, and
expand the productive capacities of sources for strategic and
critical materials, components, critical technology items,
and industrial resources essential for the execution of the
national security strategy of the United States.
``(2) Strategic and critical materials, components, and
critical technology items.--
``(A) Maintenance of reliable sources of supply.--
``(i) In general.--The Secretary shall take appropriate
actions to ensure that strategic and critical materials,
components, critical technology items, and industrial
resources are available from reliable sources when needed to
meet defense requirements during peacetime, graduated
mobilization, and national emergency.
``(ii) Recycling and reclamation of end-of-life
equipment.--The Secretary shall take appropriate actions to
prioritize, to the maximum extent practicable, the sourcing
of strategic and critical materials through recycling of or
reclamation from end-of-life equipment.
``(B) Appropriate action.--For purposes of this paragraph,
appropriate action may include--
``(i) restricting contract solicitations to reliable
sources;
``(ii) stockpiling or placing into reserve strategic and
critical materials, components, and critical technology
items;
``(iii) planning for necessary long-lead times for
acquiring such materials, components, and items;
``(iv) developing innovative methods of recovering
strategic and critical materials through recycling of or
reclamation from end-of-life equipment; or
``(v) developing and qualifying substitutes for such
materials, components, and items.
``(k) Annual Report.--
``(1) In general.--Not later than one year after the date
of the enactment of the National Defense Authorization Act
for Fiscal Year 2026, and annually thereafter, the Secretary
shall submit to the congressional defense committee a report
evaluating investments made and any other activities carried
out using amounts in the Fund during the year preceding
submission of the report.
``(2) Elements.--Each report required by paragraph (1)
shall include--
``(A) measures of effectiveness of the investments and
activities described in that paragraph in meeting the needs
of the Department of Defense and the defense industrial base;
``(B) an evaluation of the return on investment of all
ongoing investments from the Fund;
``(C) measures of effectiveness of the investments and
activities relating to the development of innovative methods
of sourcing strategic and critical materials through
recycling of or reclamation from end-of-life equipment; and
``(D) a description of efforts to coordinate activities
carried out using amounts in the Fund with activities to
support the defense industrial base carried out under other
authorities.
``(3) Advice.--In preparing a report required by paragraph
(1), the Secretary shall take into account the advice of the
defense industry and such other individuals as the Secretary
considers relevant.
``(l) Coordination With Other Defense Industrial Base
Activities.--Not later than 90 days after the date of the
enactment of the National Defense Authorization Act for
Fiscal Year 2026, the Secretary shall submit to the
congressional defense committees a report detailing how
activities carried out under this section will be coordinated
with--
``(1) activities carried out using amounts in the Defense
Production Act Fund under section 304 of the Defense
Production Act of 1950 (50 U.S.C. 4534);
``(2) activities of the Office of Strategic Capital; and
``(3) any other efforts designed to enhance the defense
industrial base.
``(m) Definitions.--In this section:
``(1) Chokepoint.--The term `chokepoint' means a situation
in which--
``(A) components of the munitions supply chains, including
all elements of the munitions supply chain such as chemicals,
casings, or other materials, are produced by only one
reliable source; or
``(B) the increased production of a component would
significantly increase total output of munitions.
``(2) Covered country.--The term `covered country' means--
``(A) the Russian Federation;
``(B) the Democratic People's Republic of Korea;
``(C) the Islamic Republic of Iran; and
``(D) the People's Republic of China.
``(3) Reliable source.--The term `reliable source' means a
citizen or business entity organized under the laws of--
``(A) the United States or any territory or possession of
the United States;
``(B) a country of the national technology and industrial
base, as defined in section 4801; or
``(C) a qualifying country, as defined in section 225.003
of the Defense Federal Acquisition Regulation Supplement or
any successor document.
``(4) Secretary.--The term `Secretary' means the Secretary
of Defense.
``(5) Strategic and critical materials.--The term
`strategic and critical materials' has the meaning given that
term in section 12(1) of the Strategic and Critical Materials
Stock Piling Act (50 U.S.C. 98h-3(1)).''.
______