I
117th CONGRESS
1st Session
H. R. 5492
IN THE HOUSE OF REPRESENTATIVES
October 5, 2021
Mr. Kinzinger (for himself, Mr. Malinowski, and Ms. Blunt Rochester) introduced the following bill; which was referred to the Committee on Energy and Commerce
A BILL
To establish an Office of Manufacturing Security and Resilience in the Department of Commerce, and for other purposes.
Short title
This Act may be cited as the Manufacturing Economy And National Security Act
or the MEANS Act
.
Findings
Congress finds the following:
Resilient supply chains are paramount to our national security and economic security.
A coordinated and whole-of-Government approach to safeguarding supply chains will benefit all Americans and ensure disruptions are avoided or mitigated.
Establishing an Office of Manufacturing Security and Resilience in the Department of Commerce will serve as the cornerstone of the Federal Government’s supply chain mission.
United States strategy to counter threats to supply chains for critical goods
In general
In accordance with Executive Order 14017 (86 Fed. Reg. 11849; relating to America’s supply chains), the Under Secretary shall, not later than 180 days after enactment of this Act, develop and implement a strategy taking a whole-of-Government approach to support the resilience, diversity, security, and strength of supply chains.
Elements
The strategy required under subsection (a) shall include the following elements:
A plan to execute a unified national effort to reduce reliance on concentrated supply chains for critical goods and protect against threats from countries of concern relating to supply chains for critical goods.
A plan provide sufficient access to critical goods by ensuring that supply chains are not vulnerable to disruption, strain, compromise, or elimination, including by being concentrated in a country of concern.
A plan collaborate with other relevant Federal Government agencies to assist allies or key international partners to build capacity for manufacturing critical goods.
A plan to incentivize, through loans and loan guarantees, and equity investment, and identify tax incentives, trade preferences, or other means, as appropriate—
for domestic manufacturers that manufacture critical goods to—
relocate manufacturing facilities, industrial equipment, or operations related to the production of critical goods from countries of concern to the United States or to other allies or key international partners; and
to support manufacturing facilities, industrial equipment, or operations to increase the production of critical goods and meet demand for such articles; and
for domestic manufacturers that do not manufacture critical goods to make necessary or appropriate modifications to existing manufacturing facilities, industrial equipment, manufacturing technology, or operations in order to manufacture 1 or more critical good.
A plan describing the manner and processes through which the Under Secretary will implement the program under section 4, including through consultation with, or requests for information from, the heads of any relevant Federal agencies, including those with jurisdiction over supply chains, for the purposes of ensuring—
the awards serve the greatest needs for the most diverse array of critical industries; and
the awards, on the whole, serve the greatest national security and economic security needs.
A plan to protect against supply chain shocks from countries of concern relating to supply chains.
A plan to strengthen and increase trade and other forms of engagement between the United States and allies or key international partners in order to mitigate—
supply chain vulnerabilities; and
the effects of supply chain shocks.
Identify, in coordination with other relevant Federal agencies, actions relating to supply chains with which the United States might—
raise living standards;
increase employment opportunities; and
address the underlying causes of irregular migration.
Recommendations to effectuate the strategy under this section.
Submission of strategy
In general
Not later than 270 days after the date of the enactment of this Act, the President shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate, and publish on the website of the Office of the Under Secretary, a report containing the strategy developed under this section.
Update
Not less than once every 4 years after the date on which the strategy is submitted under paragraph (1), the Under Secretary shall submit to Congress an update to such strategy.
Form
The report submitted under paragraph (1), and any update submitted under paragraph (2), shall be submitted in unclassified form and may include a classified annex.
Critical supply chain resilience program
Establishment
There is established in the Office of the Secretary of Commerce an Office of Manufacturing Security and Resilience to carry out the Manufacturing Security and Resilience Program described in subsection (d).
Mission
The mission of the Office shall be the following:
Help to promote the leadership of the United States with respect to critical industries and supply chains that—
strengthen the national security of the United States; and
have a significant effect on the economic security of the United States.
Support the availability of critical goods by supporting domestic manufacturers, domestic enterprises, and manufacturing operations in countries that are allies or key international partners of the United States.
Assist the Federal Government in preparing for, and responding to, covered emergencies and supply chain shocks, including by improving the flexible manufacturing capacities and capabilities in the United States in the case of a supply chain shock.
Reduce the reliance of domestic entities and domestic manufacturers on critical goods with concentrated supply chains from countries of concern.
Encourage partnerships and collaboration with the Federal Government and the private sector, labor organizations, the governments of countries that are allies or key international partners of the United States, State governments and other political subdivisions of a State, and Tribal governments in order to—
promote the resilience of supply chains; and
respond to supply chain shocks to—
critical industries; and
supply chains.
In order to safeguard against supply chain disruptions, encourage the relocation of facilities that manufacture critical goods from countries of concern to allies or key international partners.
Support the development, maintenance, improvement, competitiveness, restoration, and expansion of the productive capacities, efficiency, and workforce of critical industries and domestic manufacturers of critical goods, industrial equipment, and manufacturing technology.
Prepare for and take appropriate steps to minimize the effects of supply chain shocks on critical industries and supply chains.
Support the creation of jobs with competitive wages in the manufacturing sector.
Encourage manufacturing growth and opportunities in economically distressed areas and communities of color.
Promoting the health of the economy of the United States and the competitiveness of manufacturing in the United States.
Coordinate executive branch actions necessary to carry out the functions described in paragraphs (1) through (11).
Under Secretary of the Office
Appointment and term
The head of the Office shall be the Under Secretary of the Office of Supply Chain Resiliency and Crisis Response, appointed by the President, by and with the advice and consent of the Senate, for a term of not more than 5 years.
Pay
The Under Secretary shall be compensated at the rate in effect for level II of the Executive Schedule under section 5313 of title 5, United States Code.
Administrative authorities
The Under Secretary may appoint officers and employees in accordance with chapter 51 and subchapter III of chapter 53 of title 5, United States Code.
Manufacturing Security and Resilience Program
In general
The Under Secretary shall support the resilience, diversity, security, and strength of supply chains by providing loans and loan guarantees for eligible activities described under subsection (e) to eligible entities described under subsection (f).
Application
To be eligible for a loan or loan guarantee under this section, an eligible entity described in subsection (e) shall submit to the Under Secretary an application at such time, in such form, and containing such information as the Under Secretary may require, including—
a description of the proposed activity to be carried out with such a loan or loan guarantee;
a description of the supply chain supported by the proposed activity; and
an estimate of the total costs for such activity.
Eligible activities
The following activities may be carried out with amounts made available under this section:
The development, diversification, preservation, improvement, support, restoration, or expansion of supply chains and the domestic or proximal manufacturing of critical goods, industrial equipment, and manufacturing technology, including activities that support any of the following:
The domestic manufacturing of a critical good or industrial equipment.
The commercialization, adoption, deployment, or use of manufacturing technology by domestic manufacturers.
The design, engineering, construction, expansion, improvement, repair, or maintenance of critical infrastructure or a manufacturing facility in the United States.
The purchase, lease, enhancement, or retooling of industrial equipment for use in the United States.
The purchase, lease, or acquisition of critical goods, industrial equipment, or manufacturing technology from reliable sources.
The relocation of manufacturing facilities, or operations related to the production of critical goods out of a country of concern and into the United States or to an ally or key international partner of the United States, with a priority for those eligible countries listed in subsection (w)(1)(B).
The modification of manufacturing facilities, industrial equipment, or operations related to the manufacture of critical goods to—
create new capabilities for an eligible entity to manufacture critical goods;
expand existing operations to increase the manufacture of critical goods; or
accommodate any manufacturing operations related to critical goods that are being relocated to the United States or to an ally or key international partner.
The development of tools or processes that relate to procuring, transporting, or storing critical goods.
The manufacture or acquisition of a substitute for a critical good, industrial equipment, or manufacturing technology.
The establishment, improvement, development, expansion, or preservation of surge capacity or stockpiling of a critical good or industrial equipment, as appropriate and necessary.
The establishment, improvement, or preservation of diverse, secure, reliable, and strong sources and locations of a critical good in the United States.
Eligible entities
The following entities are eligible to receive loans and loan guarantees under this section:
A domestic manufacturer.
A domestic enterprise.
A State, county, city, or other political subdivision of a State.
A Tribal government.
A manufacturing extension center established as part of the Hollings Manufacturing Extension Partnership.
A manufacturing USA institute as described in section 34(d) of the National Institute of Standards and Technology Act (15 U.S.C. 278s(d)).
An institution of higher education acting as part of a consortium, partnership, or joint venture with another eligible entity described in paragraphs (1) through (6).
A public or private nonprofit organization or association acting as part of a consortium, partnership, or joint venture with another eligible entity described in paragraphs (1) through (6).
A consortium, partnership, or joint venture of two or more eligible entities described under paragraphs (1) through (8).
Requirements
The Under Secretary may only make a loan or loan guarantee available to an eligible entity if the Under Secretary makes a determination of the following:
The loan or loan guarantee is for an activity described under subsection (e).
Without a loan or loan guarantee the eligible entity would not be able to fund or finance the activity under reasonable terms and conditions.
A loan or loan guarantee is a cost effective, expedient, and practical financial assistance for the activity.
There is a reasonable assurance that—
the eligible entity will implement the activity in accordance with the application submitted pursuant to paragraph (2) of subsection (d); and
the activity will support—
the resilience, diversity, security, or strength of a supply chain; and
the national security or economic security of the United States.
The eligible entity agrees to provide the information required under paragraph (3) of subsection (n).
Criteria
The Under Secretary shall establish criteria for the awarding of loan or loan guarantee that meet the requirements under subsection (g), including the following:
The extent to which the activity supports the resilience, diversity, security, and strength of supply chains.
The extent to which the activity is funded by non-Federal sources.
The extent to which the loan or loan guarantee will assist small and medium-sized domestic manufacturers.
The amount of appropriations that are required to fund or finance the loan or loan guarantee made available under this section.
Loans and loan guarantees
Maximum amount
The amount of a loan under this section shall not exceed 80 percent of the reasonably anticipated costs of an activity.
Waiver
Upon providing written justification for a determination made pursuant to subparagraph (B), which may be submitted in a classified annex to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate, the Under Secretary may waive the requirement under paragraph (2)—
during a period of national emergency declared by an Act of Congress or the President; or
upon making a determination that a loan or loan guarantee is necessary to avert the disruption, strain, compromise, or elimination of a supply chain that would severely affect the economic security of the United States.
Maximum Federal involvement
The proceeds of a loan under this section may be used to pay any non-Federal share of activity costs required if the loan is repayable from non-Federal funds.
Loan guarantee terms
The terms of a loan guarantee provided under this subsection shall be consistent with the terms established in this subsection for a loan.
Manufacturing investment companies
In general
The Under Secretary may provide a loan or loan guarantee to a manufacturing investment company.
Equity capital
A manufacturing investment company shall use the proceeds of a loan or loan guarantee provided under paragraph (1) to provide a source of equity capital for eligible entities described under subsection (f) to carry out eligible activities.
Application
To be eligible to receive a loan or loan guarantee under this section, a manufacturing investment company shall submit to the Under Secretary an application, in a form and including such documentation as may be prescribed by the Under Secretary, which shall include:
A plan describing how the manufacturing investment company intends to provide equity capital to eligible entities described under subsection (f) to support the resilience, diversity, security, and strength of supply chains.
Information regarding the relevant qualifications and general reputation of the management of the manufacturing investment company.
A description of how the manufacturing investment company intends to address the unmet capital needs of eligible entities described under subsection (f).
A description of whether and to what extent the manufacturing investment company meets the criteria under paragraph (4) and the objectives of the program established under this Act.
Criteria
The Secretary shall establish criteria for the awarding of a loan or loan guarantee to a manufacturing investment company, including the following:
The extent to which the equity capital to be provided pursuant to paragraph (2) supports the resilience, diversity, security, and strength of supply chains.
The extent to which the plan described under subparagraph (A) of paragraph (3) will be funded or financed by non-Federal sources.
The extent to which the manufacturing investment company will assist small and medium-sized domestic manufacturers.
The amount of appropriations that are required to fund or finance the loan or loan guarantee made available under this subsection.
Requirements
As a condition for providing a loan or loan guarantee under paragraph (1), the Under Secretary shall require that a manufacturing investment company certifies that—
the equity capital is for an activity described under subsection (e);
an eligible entity meets the requirements under subsection (g);
without equity capital, the eligible entity would not be able to fund or finance the activity under reasonable terms and conditions;
equity capital is a cost effective, expedient, and practical financial assistance for the activity;
there is a reasonable assurance that—
the eligible entity will implement the activity; and
the activity will support—
the resilience, diversity, security, or strength of a supply chain; and
the national security or economic security of the United States; and
it will provide the information required under paragraph (6).
Performance measures
For loans and loan guarantees awarded under this subsection, the Under Secretary shall—
develop metrics to assess the extent to which the manufacturing investment company meets the criteria under paragraph (4);
evaluate the extent to which each manufacturing investment company awarded a loan or loan guarantee is meeting the criteria under paragraph (4); and
require that any loan information the Under Secretary determines to be necessary for the evaluation described under subparagraph (B) be provided by manufacturing investment companies.
Creditworthiness
In general
For a loan or loan guarantee issued under subsections (d) and (j), the manufacturing investment company or eligible activity and eligible entity receiving such loan or loan guarantee shall be creditworthy, which shall be determined by the Under Secretary.
Considerations
In determining the creditworthiness of a manufacturing investment company or an eligible activity and eligible entity, the Under Secretary shall take into consideration relevant factors, including the following:
The terms, conditions, financial structure, and security features of the proposed financing.
The revenue sources that will secure or fund any note, bond, debenture, or other debt obligation issued in connection with the Federal financing.
The financial assumptions upon which the loan or loan guarantee is based.
The ability of—
the manufacturing investment company to provide a source of equity capital for eligible entities; or
the eligible entity to successfully achieve the goal of the activity.
The financial soundness and credit history of the manufacturing investment company or eligible entity.
Conditions
The Under Secretary is authorized to prescribe—
either specifically or by maximum limits or otherwise, rates of interest, guarantee and commitment fees, and other charges which may be made in connection with a loan or loan guarantee made under this section;
regulations governing the forms and procedures (which shall be uniform to the extent practicable) to be used in connection with such loans and loan guarantees; and
language in any contract or agreement governing financial assistance that the eligible entity agrees to coordinate with the Under Secretary to, without yielding operational control, assist the United States in preparing for and responding to a covered emergency, including through the manufacture of critical goods, as necessary.
Selection of recipient
Diversity in recipients
To the extent practicable, the Under Secretary shall ensure that loans and loan guarantees are awarded in a manner that will serve the greatest needs for the most diverse array of critical industries.
Priority
In awarding loans and loan guarantees under this subsection, the Under Secretary shall prioritize proposed activities that—
will operate within the United States and employ citizens of the United States; and
will result in the production of critical goods that relate to the strategic needs of the Federal Government in preparing for and responding to covered emergencies and supply chain shocks.
Performance measures
For loans and loan guarantees awarded under this section, the Under Secretary shall—
develop metrics to assess the extent to which the activities meet the criteria under subsection (h);
evaluate the extent to which each eligible entity awarded a loan or loan guarantee is meeting the criteria under subsection (h); and
require that any information the Under Secretary determines to be necessary for the evaluation described under paragraph (2) be provided by eligible entities receiving a loan or loan guarantee.
Revocation
The Under Secretary may revoke a loan or loan guarantee if the eligible entity fails to meet any requirement under this section.
Construction projects
Section 602 of the Public Works and Economic Development Act of 1965 (42 U.S.C. 3212) shall apply to a construction project that receives financial assistance from the Secretary under this section.
Critical supply chain resilience fund
Establishment
There is established in the Treasury of the United States a fund to be known as the Supply Chains for Critical Manufacturing Industries Fund
(referred to in this section as the Fund
) which shall solely be used by the Under Secretary to carry out this section.
Revolving loan fund
The proceeds of any conditions prescribed under subsection (l)(1) shall be deposited into the Fund.
Program evaluation
Not later than 4 years after the date of enactment of this Act, and every 4 years thereafter, the Inspector General of the Department of Commerce shall conduct an audit of the Office of Supply Chain Resiliency and Crisis Response to—
evaluate the performance of the activities supported by a loan or loan guarantee under this section;
evaluate the extent to which the requirements and criteria under this section are met; and
provide recommendations on any proposed changes to improve the effectiveness of the Office on meeting the mission under subsection (b).
Regulations
The Under Secretary may promulgate such regulations as the Under Secretary determines to be appropriate to carry out this section.
Authorization of appropriations
There is authorized to be appropriated—
to the Fund $35,000,000,000 for fiscal years 2022 through 2027, to remain available until expended, of which not more than—
$31,000,000,000 may be used for loans and loan guarantees to eligible entities;
$4,000,000,000 may be used for loans and loan guarantees to manufacturing investment companies and eligible entities; and
not more than 2 percent per fiscal year may be used for administrative costs; and
to the Inspector General of the Department of Commerce $5,000,000 for fiscal years 2022 through 2027, to remain available until expended, to carry out subsection (r).
Consistency with international agreements
This Act shall be applied in a manner consistent with United States obligations under international agreements.
Limitation
None of the funds made available to carry out this Act may be used to support manufacturing in a country of concern.
Definitions
In this section:
Ally or key international partner
In general
The term ally or key international partner means a country designated by the Under Secretary, after consultation with other relevant Federal agencies, and—
is—
a member state of North Atlantic Treaty Organization (NATO);
a country designated as major non-NATO ally pursuant to section 517(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321k(a)); or
a country that is located in the Western Hemisphere and included on the list of countries described in subparagraph (B); and
is not a country of concern.
List of countries described
The list of countries described in subparagraph (A) are the following: Anguilla, Antigua and Barbuda, Argentina, Aruba, The Bahamas, Barbados, Belize, Bermuda, Bolivia, Brazil, The British Virgin Islands, Canada, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Montserrat, Netherlands Antilles, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turks and Caicos Islands, Uruguay, and the sovereign government recognized by the United States in Venezuela.
Concentrated
With respect to a supply chain, the term concentrated means—
a supply chain—
that is under a level of control or influence by the government of a country of concern that presents an unreasonable risk to national security or economic security;
that is subject to undue manipulation by the government of a country of concern; or
for which 30 percent of the production of such critical good occurs in a single foreign country; or
a supply chain for a critical good for which more than 50 percent of the supply of such good in the United States is imported.
Country of concern
The term country of concern means a country—
in which a concentrated supply chain for a critical good is located;
that poses a significant national security or economic security threat to the United States; and
whose government, or elements of such government, has proven, or has been credibly alleged to have, committed crimes against humanity or genocide.
Covered emergency
The term covered emergency means any of the following:
A public health emergency declared by the Secretary of Health and Human Services pursuant to section 319 of the Public Health Service Act (42 U.S.C. 247d).
An event for which the President declares a major disaster or an emergency under section 401 or 501, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170 and 5191).
A national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.).
Critical good
The term critical good means any raw, in process, or manufactured material (including any mineral, metal, or advanced processed material), article, commodity, supply, product, or item of supply that the absence of which would have a significant effect on—
the national security or economic security of the United States; and
critical infrastructure.
Critical industry
The term critical industry means an industry that is critical for the national security or economic security of the United States, considering key technology focus areas under this Act and critical infrastructure.
Critical infrastructure
The term critical infrastructure has the meaning given to that term in the Critical Infrastructures Protection Act of 2001 (42 U.S.C. 5195c(e)).
Domestic enterprise
The term domestic enterprise means an enterprise that conducts business in the United States and procures a critical good.
Domestic manufacturer
The term domestic manufacturer means a business that—
conducts in the United States the research and development, engineering, or production activities necessary or incidental to manufacturing; or
if provided a loan, loan guarantee, or equity investment pursuant to this section, will conduct in the United States the research and development, engineering, or production activities necessary or incidental to manufacturing.
Industrial equipment
The term industrial equipment means any component, subsystem, system, equipment, tooling, accessory, part, or assembly necessary for the manufacturing of a critical good.
Institution of higher education
The term institution of higher education has the meaning given that term under section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).
Key technology focus areas
The term key technology focus areas means—
artificial intelligence, machine learning, autonomy, and related advances;
high-performance computing, semiconductors, and advanced computer hardware and software;
quantum information science and technology;
robotics, automation, and advanced manufacturing;
natural and anthropogenic disaster prevention or mitigation;
advanced communications technology, including optical transmission components;
biotechnology, medical technology, genomics, and synthetic biology;
data storage, data management, distributed ledger technologies, and cybersecurity, including biometrics;
advanced energy and industrial efficacy technologies, such as batteries, advanced nuclear technologies, and polysilicon for use in solar photovoltaics, including but not limited to for the purposes of electric generation (consistent with section 15 of the National Sciences Foundation Act of 1950 (42 U.S.C. 1874)); and
advanced materials science, including composites and 2D materials and equipment, aerospace grade metals, and aerospace specific manufacturing enabling chemicals.
Lender
The term lender means any non-Federal qualified institutional buyer (as defined in section 230.144A(a) of title 17, Code of Federal Regulations or a successor regulation).
Loan
The term loan means a direct loan or other debt obligation issued by an eligible entity and funded by the Under Secretary in connection with the financing of an activity under this section.
Loan guarantee
The term loan guarantee means any guarantee or other pledge by the Under Secretary to pay all or part of the principal of, and interest on, a loan or other debt obligation entered into by an eligible entity and funded by a lender.
Manufacture
The term manufacture means any activity that is necessary for or incidental to the development, production, processing, distribution, or delivery of any raw, in process, or manufactured material (including minerals, metals, and advanced processed materials), article, commodity, supply, product, critical good, or item of supply.
Manufacturing facility
The term manufacturing facility means any type of building, structure, or real property necessary or incidental to the manufacturing of a critical good.
Manufacturing investment company
The term manufacturing investment company means an incorporated body, a limited liability company, or a limited partnership, including a consortium of public and private entities, organized and chartered or otherwise existing under State law.
Manufacturing technology
The term manufacturing technology means technologies that are necessary or incidental to the manufacturing of a critical good.
Nonprofit organization
The term nonprofit organization means an organization that is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code.
Office
The term Office means the Supply Chain Resiliency and Crisis Response Office established under subsection (a).
State
The term State means each State of the United States, the District of Columbia, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, and any other territory or possession of the United States.
Supply chain
The term supply chain means a supply chain for a critical good.
Supply chain shock
The term supply chain shock includes the following:
A natural disaster or extreme weather event.
An accidental or human-caused event.
An economic disruption.
A pandemic.
A biological threat.
A cyberattack.
A great power conflict.
A terrorist or geopolitical attack.
Any other supply chain disruption or threat that affects the national security or economic security of the United States.
Tribal government
The term tribal government means Indian Tribes, Alaska Native Tribal entities, and Native Hawaiian communities.
Under Secretary
The term Under Secretary means the Under Secretary of the Office of Supply Chain Resiliency and Crisis Response appointed pursuant to subsection (c).
