[House Report 117-50]
[From the U.S. Government Publishing Office]


117th Congress  }                                              {   Report
                        HOUSE OF REPRESENTATIVES
 1st Session    }                                              {   117-50

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



 
               DOMAINS CRITICAL TO HOMELAND SECURITY ACT

                                _______
                                

  June 1, 2021.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Thompson of Mississippi, from the Committee on Homeland Security, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3264]

    The Committee on Homeland Security, to whom was referred 
the bill (H.R. 3264) to amend the Homeland Security Act of 2002 
to require research and development to identify and evaluate 
the extent to which critical domain risks within the United 
States supply chain pose a substantial threat to homeland 
security, and for other purposes, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
C.B.O. Estimate, New Budget Authority, Entitlement Authority, and 
  Tax Expenditures...............................................     4
Federal Mandates Statement.......................................     4
Duplicative Federal Programs.....................................     4
Statement of General Performance Goals and Objectives............     4
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits Advisory Committee Statement..........................     4
Applicability to Legislative Branch..............................     4
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     5

                          Purpose and Summary

    H.R. 3264, the ``Domains Critical to Homeland Security 
Act'' authorizes the Department of Homeland Security (DHS) to 
conduct research and development into supply chain risks for 
critical domains of the United States economy. The research 
shall include a risk analysis for each critical domain to 
determine potential homeland security threats caused by 
disruption, corruption, exploitation, or dysfunction of the 
domain. Based on the results of the risk analysis, DHS is 
authorized to do further research into those critical domains 
considered highest risk to analyze the industries within the 
domains, examine performance under varying conditions, and 
identify ways to establish supply chain resiliency, among other 
things. The Secretary of Homeland Security is required to 
report annually to Congress through fiscal year 2026 on the 
results of the Department's research, along with actions the 
Secretary has taken or plans to take in response to the 
results.

                  Background and Need for Legislation

    America's economic and homeland security depends on diverse 
and resilient supply chains that facilitate an uninterrupted 
flow of goods, services, information, and technology across the 
Nation's physical and virtual borders. Disruptions caused by 
natural or manmade phenomena, such as extreme weather events, 
cyber attacks, geopolitical and economic competition, and other 
conditions can reduce critical manufacturing capacity and the 
availability and integrity of critical goods, products, and 
services.
    For example, the COVID-19 pandemic revealed vulnerabilities 
in the Nation's medical supply chain. Persistent shortages of 
personal protective equipment and testing supplies due to 
limited domestic production and high global demand hampered 
America's ability to combat and contain the virus.\1\ The May 
2021 ransomware attack on the Colonial Pipeline Company 
demonstrated the fragility of the Nation's energy supply chain 
when a brief shutdown of the company's 5,550-mile pipeline--the 
largest conduit of gasoline in the country--drove up gas prices 
and spurred gas shortages in the southeastern and mid-Atlantic 
States.\2\ An increasing global shortage of microchips has also 
impacted a variety of industries, from car manufacturing to 
household appliances, resulting in production delays and 
reduced innovation.\3\
---------------------------------------------------------------------------
    \1\U.S. Government Accountability Office, COVID-19: Key Insights 
from GAO's Oversight of the Federal Public Health Response, (Feb. 24, 
2021), available at https://www.gao.gov/products/GAO-21-396T.
    \2\Will Englund and Ellen Nakashima, ``Panic buying strikes 
Southeastern United States as shuttered pipeline resumes operations,'' 
The Washington Post, (May 12, 2021), available at https://
www.washingtonpost.com/business/2021/05/12/gas-shortage-colonial-
pipeline-live-updates.
    \3\Sam Shead, ``The global chip shortage is starting to have major 
real-world consequences,'' CNBC, (May 7, 2021), available at https://
www.cnbc.com/2021/05/07/chip-shortage-is-starting-to-have-major-real-
world-consequences.html.
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    Identifying and mitigating vulnerabilities in critical U.S. 
supply chain domains is paramount to ensuring America's 
economic security. In 2020, DHS conducted an assessment of the 
current state of the global economy and identified trends that, 
if unaddressed, could endanger the future prosperity of the 
U.S. economy.\4\ The Committee notes that the Office of Trade 
and Economic Security within the DHS Office of Strategy, 
Policy, and Plans has been responsible for leading this effort 
and would expect the Secretary to engage with the Committee 
should the Secretary choose to direct this effort to be carried 
out elsewhere in the Department. H.R. 3264 authorizes DHS to 
expand upon the 2020 assessment by further researching and 
analyzing the risks to critical U.S. supply chain domains. The 
annual report required by this bill will identify and 
prioritize those supply chains most critical to our homeland. 
This will enable the public and private sectors to take 
meaningful action to mitigate risks and ensure the long-term 
economic security of the United States.
---------------------------------------------------------------------------
    \4\U.S. Department of Homeland Security, Office of Strategy, 
Policy, and Plans, and Office of Trade and Economic Security, ``2020 
Economic Security Assessment,'' available at https://www.dhs.gov/sites/
default/files/publications/21_0111_economic-security-assessment-annual-
report.pdf.
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                                Hearings

    For the purposes of clause 3(c)(6) of rule XIII, the 
following hearings were used to develop H.R. 3264:
    On February 10, 2021, the Committee held a hearing entitled 
``Homeland Cybersecurity: Assessing Cyber Threats and Building 
Resilience.'' The Committee received testimony from Mr. 
Christopher Krebs, Former Director of the Cybersecurity and 
Infrastructure Security Agency, DHS; Ms. Sue Gordon, Former 
Principal Deputy of National Intelligence, Office of the 
Director of National Intelligence; Mr. Michael Daniel, 
President and Chief Executive Officer, Cyber Threat Alliance; 
and Mr. Dmitri Alperovitch, Executive Chairman, Silverado 
Policy Accelerator.
    On February 24, 2021, the Committee held a hearing entitled 
``Confronting the Coronavirus: Perspectives on the COVID-19 
Pandemic One Year Later.'' The Committee received testimony 
from Ms. A. Nicole Clowers, Managing Director, Health Care 
Team, U.S. Government Accountability Office; Ms. Crystal 
Watson, DrPH, Senior Scholar, Johns Hopkins Center for Health 
Security, Assistant Professor in the Department of 
Environmental Health and Engineering, Johns Hopkins Bloomberg 
School of Public Health; Dr. Ngozi O. Ezike, MD, Director, 
Illinois Department of Public Health; and Mr. J. Ryan McMahon 
II, County Executive, Onondaga County, New York.

                        Committee Consideration

    The Committee met on May 18, 2021, with a quorum being 
present, to consider H.R. 3264 and ordered the measure to be 
reported to the House with a favorable recommendation, without 
amendment, by unanimous consent.
    No amendments were offered during consideration of H.R. 
3264.

                            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. 3264.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

Congressional Budget Office Estimate, New Budget Authority, Entitlement 
                    Authority, and Tax Expenditures

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974, and with 
respect to the requirements of clause 3(c)(3) of rule XIII of 
the Rules of the House of Representatives and section 402 of 
the Congressional Budget Act of 1974, the Committee has 
requested but not received from the Director of the 
Congressional Budget Office a statement as to whether this bill 
contains any new budget authority, spending authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures.

                       Federal Mandates Statement

    An estimate of Federal mandates prepared by the Director of 
the Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act was not made available to the 
Committee in time for the filing of this report. The Chairman 
of the Committee shall cause such estimate to be printed in the 
Congressional Record upon its receipt by the Committee.

                      Duplicative Federal Programs

    Pursuant to clause 3(c) of rule XIII, the Committee finds 
that H.R. 3264 does not contain any provision that establishes 
or reauthorizes a program known to be duplicative of another 
Federal program.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the objective of H.R. 3264 is to 
authorize DHS to conduct research and development into supply 
chain risks for critical domains of the United States economy 
and to annually report on the results of the research and 
actions to address any identified risks.

   Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                 Benefits Advisory Committee Statement

    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(d), 9(e), or 9(f) of rule XXI.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 3264 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 states that the Act may be cited as the 
``Domains Critical to Homeland Security Act.''

Sec 2. Critical Domain Research and Development.

    This section amends subtitle H of title VIII of the 
Homeland Security Act of 2002 to authorize the Secretary of 
Homeland Security to conduct research and development to 
identify United States critical domains for economic security 
and evaluate the extent to which disruption, corruption, 
exploitation, or dysfunction of any such domain poses a 
substantial threat to homeland security.
    This section requires that the research conducted by the 
Secretary of Homeland Security include a risk analysis of each 
identified United States critical domain for economic security 
to determine the degree to which there exists a present or 
future threat to homeland security in the event of disruption, 
corruption, exploitation, or dysfunction to such domain. Such 
analysis shall consider, to the extent possible, the 
vulnerability and resilience of relevant supply chains, 
influence of malign economic actors, and asset ownership, among 
other things.
    Based on the identification and risk analysis of United 
States critical domains for economic security, this section 
authorizes the Secretary to conduct additional research into 
those critical domains where there exists the highest degree of 
a present or future threat to homeland security. For each such 
high-risk domain, the additional research shall analyze the 
industries within the domain, examine performance under varying 
conditions, and identify ways to establish supply chain 
resiliency, among other things.
    This section allows the Secretary to consult with 
appropriate Federal agencies, State agencies, and private 
sector stakeholders when conducting the authorized research. It 
also directs the Secretary to publish a report annually through 
fiscal year 2026 containing information relating to the 
Department's research, including findings, evidence, analysis, 
and recommendations. The section also directs the Secretary to 
transmit the required annual reports to Congress along with a 
description of the actions the Secretary will take or has taken 
in response to the research results.
    Lastly, this section defines the terms ``United States 
critical domains for economic security'' and ``economic 
security,'' and authorizes $1 million to be appropriated for 
each of fiscal years 2022 through 2026 for the purpose of 
conducting the research and producing the required reports.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                     HOMELAND SECURITY ACT OF 2002


SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Homeland 
Security Act of 2002''.
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

Sec. 1. Short title; table of contents.
     * * * * * * *

 TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
      UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

     * * * * * * *

                  Subtitle H--Miscellaneous Provisions

     * * * * * * *
Sec. 890B. Homeland security critical domain research and development.

           *       *       *       *       *       *       *


TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

           *       *       *       *       *       *       *


Subtitle H--Miscellaneous Provisions

           *       *       *       *       *       *       *


SEC. 890B. HOMELAND SECURITY CRITICAL DOMAIN RESEARCH AND DEVELOPMENT.

  (a) In General.--
          (1) Research and development.--The Secretary is 
        authorized to conduct research and development to--
                  (A) identify United States critical domains 
                for economic security and homeland security; 
                and
                  (B) evaluate the extent to which disruption, 
                corruption, exploitation, or dysfunction of any 
                of such domain poses a substantial threat to 
                homeland security.
          (2) Requirements.--
                  (A) Risk analysis of critical domains.--The 
                research under paragraph (1) shall include a 
                risk analysis of each identified United States 
                critical domain for economic security to 
                determine the degree to which there exists a 
                present or future threat to homeland security 
                in the event of disruption, corruption, 
                exploitation, or dysfunction to such domain. 
                Such research shall consider, to the extent 
                possible, the following:
                          (i) The vulnerability and resilience 
                        of relevant supply chains.
                          (ii) Foreign production, processing, 
                        and manufacturing methods.
                          (iii) Influence of malign economic 
                        actors.
                          (iv) Asset ownership.
                          (v) Relationships within the supply 
                        chains of such domains.
                          (vi) The degree to which the 
                        conditions referred to in clauses (i) 
                        through (v) would place such a domain 
                        at risk of disruption, corruption, 
                        exploitation, or dysfunction.
                  (B) Additional research into high-risk 
                critical domains.--Based on the identification 
                and risk analysis of United States critical 
                domains for economic security pursuant to 
                paragraph (1) and subparagraph (A) of this 
                paragraph, respectively, the Secretary may 
                conduct additional research into those critical 
                domains, or specific elements thereof, with 
                respect to which there exists the highest 
                degree of a present or future threat to 
                homeland security in the event of disruption, 
                corruption, exploitation, or dysfunction to 
                such a domain. For each such high-risk domain, 
                or element thereof, such research shall--
                          (i) describe the underlying 
                        infrastructure and processes;
                          (ii) analyze present and projected 
                        performance of industries that comprise 
                        or support such domain;
                          (iii) examine the extent to which the 
                        supply chain of a product or service 
                        necessary to such domain is 
                        concentrated, either through a small 
                        number of sources, or if multiple 
                        sources are concentrated in one 
                        geographic area;
                          (iv) examine the extent to which the 
                        demand for supplies of goods and 
                        services of such industries can be 
                        fulfilled by present and projected 
                        performance of other industries, 
                        identify strategies, plans, and 
                        potential barriers to expand the 
                        supplier industrial base, and identify 
                        the barriers to the participation of 
                        such other industries;
                          (v) consider each such domain's 
                        performance capacities in stable 
                        economic environments, adversarial 
                        supply conditions, and under crisis 
                        economic constraints;
                          (vi) identify and define needs and 
                        requirements to establish supply 
                        resiliency within each such domain; and
                          (vii) consider the effects of sector 
                        consolidation, including foreign 
                        consolidation, either through mergers 
                        or acquisitions, or due to recent 
                        geographic realignment, on such 
                        industries' performances.
          (3) Consultation.--In conducting the research under 
        paragraph (1) and subparagraph (B) of paragraph (2), 
        the Secretary may consult with appropriate Federal 
        agencies, State agencies, and private sector 
        stakeholders.
          (4) Publication.--Beginning one year after the date 
        of the enactment of this section, the Secretary shall 
        publish a report containing information relating to the 
        research under paragraph (1) and subparagraph (B) of 
        paragraph (2), including findings, evidence, analysis, 
        and recommendations. Such report shall be updated 
        annually through 2026.
  (b) Submission to Congress.--Not later than 90 days after the 
publication of each report required under paragraph (4) of 
subsection (a), the Secretary shall transmit to the Committee 
on Homeland Security of the House of Representatives and the 
Committee on Homeland Security and Governmental Affairs of the 
Senate each such report, together with a description of actions 
the Secretary, in consultation with appropriate Federal 
agencies, will undertake or has undertaken in response to each 
such report.
  (c) Definitions.--In this section:
          (1) United states critical domains for economic 
        security.--The term ``United States critical domains 
        for economic security'' means the critical 
        infrastructure and other associated industries, 
        technologies, and intellectual property, or any 
        combination thereof, that are essential to the economic 
        security of the United States.
          (2) Economic security.--The term ``economic 
        security'' means the condition of having secure and 
        resilient domestic production capacity, combined with 
        reliable access to the global resources necessary to 
        maintain an acceptable standard of living and to 
        protect core national values.
  (d) Authorization of Appropriations.--There is authorized to 
be appropriated $1,000,000 for each of fiscal years 2022 
through 2026 to carry out this section.

           *       *       *       *       *       *       *