H.R. 4959 – Reading Mode

109th CONGRESS

2d Session

H. R. 4959

IN THE HOUSE OF REPRESENTATIVES

March 14, 2006

Mr. Turner (for himself, Mr. King of Iowa, Mr. McCotter, Mr. LaTourette, Mr. Ney, Mr. Weldon of Pennsylvania, Mr. Hayworth, Mr. McHugh, Mr. Wamp, Mr. Rogers of Michigan, Mr. Hobson, Mr. Hunter, and Mr. Garrett of New Jersey) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committees on International Relations and Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To impose limitations on investment and certain operations by foreign entities in the United States.

Short title

This Act may be cited as the Reciprocity and Fairness in Foreign Investment Act.

Limitations on investment and certain operations by foreign entities

(a)

Limitations

(1)

On government-owned enterprises

A foreign person that is owned or controlled by the government of a foreign country may—

(A)

acquire or hold an equity interest, or other evidence of ownership, in a corporation, partnership, or other business entity, that is organized under the laws of the United States, or

(B)

acquire or hold any interest in real property in the United States,

only to the same extent as that foreign country allows United States persons to acquire or hold (as the case may be) equity interests or other evidences of ownership in comparable business concerns organized under the laws of that foreign country and to acquire or hold interests in comparable real property in that foreign country.

(2)

Investment in and operation of critical infrastructure

A foreign person may acquire or hold a property interest in, or control operations, management, or security operations of, critical infrastructure in the United States only to the same extent as the foreign country of which that foreign person is a national allows United States persons to acquire or hold equivalent property interests or other evidences of ownership in, or to control operations, management, or security operations of, comparable critical infrastructure in that country.

(b)

Definitions

In this section:

(1)

Critical infrastructure

(A)

The term critical infrastructure means systems and assets, whether physical or virtual, so vital to a country that the incapacity or destruction of such systems and assets would have a debilitating impact on the security, economic security, or public health or safety, of that country. Such term includes—

(i)

any airport, air navigation facility, or facility that is part of an air traffic control system;

(ii)

any bridge, any highway, and any railroad tracks or facilities;

(iii)

any port facilities;

(iv)

any pipeline that transports oil, natural gas, or gasoline or other petroleum products; and

(v)

any electricity generation, transmission, or distribution facilities.

(B)

The terms airport, air navigation facility, and air traffic control system have the meanings given those terms in section 40102 of title 49, United States Code.

(2)

Foreign person

The term foreign person means a national of a foreign country.

(3)

Government

The term government of a foreign country includes any agency or instrumentality of the government of a foreign country.

(4)

National of a foreign country

A person is a national of a foreign country if that person is—

(A)

a citizen of that country;

(B)

an entity organized under the laws of that country (whether the entity is controlled by private persons or government entities);

(C)

a unit of government of that country; or

(D)

an entity that is organized under the laws of the United States and is owned or controlled by individuals, entities, or units of government described in subparagraphs (A), (B), and (C), or any combination thereof.

(5)

United States

The term United States means the several States, the District of Columbia, and any commonwealth, territory, or possession of the United States.

(6)

United states person

The term United States person means—

(A)

any United States citizen;

(B)

any entity that is organized under the laws of the United States and is owned or controlled by United States citizens, by State or local governments, by the United States, or by any combination thereof.

Enforcement

(a)

Secretary of the Treasury

The Secretary of the Treasury, in consultation with the Secretary of Commerce, the Attorney General, and the heads of such other departments and agencies as the Secretary of the Treasury considers appropriate, shall issue such regulations as are necessary to carry out section 2.

(b)

Penalties

(1)

Civil penalties

(A)

Penalty

A civil penalty of not more than $500,000 shall be imposed on any foreign person who violates section 2 or any regulation issued under subsection (a) of this section.

(B)

Authority of the Secretary of the Treasury

The Secretary of the Treasury has the authority to impose civil penalties under subparagraph (A).

(2)

Other relief

The Secretary of the Treasury may bring an action in the appropriate United States district court to enjoin any violation of section 2 or any regulation issued under subsection (a) of this section. In addition, the Attorney General, upon the request of the Secretary of the Treasury, shall seek appropriate relief, including divestment relief, in the district courts in order to enforce this Act.

Annual report

The Secretary of the Treasury shall, not later than 120 days after the date of the enactment of this Act and annually thereafter, issue and make public a report on the laws of each foreign country regarding permissible investment by foreign persons in enterprises organized under the laws of the country and in real property in that country, and permissible control by foreign persons of operations and management of critical infrastructure in that country.

Effective date

(a)

In general

Subject to subsection (b), this Act shall take effect 180 days after the date of the enactment of this Act.

(b)

Existing investments

In order to allow foreign countries the flexibility to make the necessary changes to their laws so as to allow foreign investment and control affected by this Act, this Act and the regulations issued under this Act shall not apply to any equity interest, other property interest, or control of operations or management of infrastructure, acquired before the effective date of this Act until the date that is 1 year after such effective date.