Critical Defense Ownership Review Act

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9283 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 9283

 To require a review of acquisitions by investment companies involving
acquisition of controlling interest of major defense suppliers, and for
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 11, 2026

  Mr. Khanna introduced the following bill; which was referred to the
                      Committee on Armed Services

_______________________________________________________________________

                                 A BILL

 To require a review of acquisitions by investment companies involving
acquisition of controlling interest of major defense suppliers, and for
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Critical Defense Ownership Review
Act''.

SEC. 2. REVIEW OF ACQUISITIONS BY INVESTMENT COMPANIES INVOLVING
              ACQUISITION OF CONTROLLING INTEREST OF MAJOR DEFENSE
              SUPPLIERS.

    (a) In General.--Except with the prior review of the Department of
Defense, no investment company shall engage in a covered transaction
with a major defense supplier that results in an investment company
having a direct or indirect equity interest of at least 25 percent or
direct or indirect control of a major defense supplier.
    (b) Premerger Notification Requirement.--Parties to a covered
transaction as described in subsection (a) shall submit a premerger
notification to the Department of Defense consistent with the
requirements of section 857 of the National Defense Authorization Act
for Fiscal Year 2024 (Public Law 118-31; 15 U.S.C. 18a note).
    (c) Department of Defense Review.--The Department of Defense shall
conduct a review of each premerger notification submitted pursuant to
subsection (b) that assesses, at a minimum--
            (1) any impact of the covered transaction on national
        security and the industrial and technological base, and whether
        the covered transaction is within the public interest;
            (2) the potential effect on competition for Department of
        Defense contracts and subcontracts, including future programs
        and technologies of interest to the Department of Defense;
            (3) the potential restriction of a supplier, good, or
        service that is critical to the defense industrial base,
        critical technologies, or national security;
            (4) the potential risks associated with the covered
        transaction on the financial stability of the major defense
        supplier and the continued stewardship of critical military
        capabilities, including any anticipated increased costs to the
        Department of Defense;
            (5) any other factor resulting from the covered transaction
        that may adversely affect the satisfactory completion of
        current or future Department of Defense programs or operations;
        and
            (6) the financial stability of the investment management
        company involved in the covered transaction and an analysis of
        whether its projected financial plan for the major defense
        supplier impairs the ability of the major defense supplier to
        maintain its supply or services to the Department of Defense.
    (d) Report to Antitrust Authorities.--Not later than 30 days after
the date on which the Department of Defense receives a premerger
notification under subsection (b), the Secretary of Defense shall
submit to the Federal Trade Commission or the Assistant Attorney
General in charge of the Antitrust Division of the Department of
Justice, as applicable, a written report on the review conducted under
subsection (c).
    (e) Definitions.--In this section:
            (1) Control.--The term ``control'' means the power, direct
        or indirect, whether exercised or not exercised, to determine,
        direct, or decide important matters affecting an entity.
            (2) Covered transaction.--The term ``covered transaction''
        means any proposed merger, acquisition, joint venture,
        strategic alliance, or investment pending on or occurring after
        the date of the enactment of this Act.
            (3) Investment company.--The term ``investment company''
        means an entity that would be an investment company under
        section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a-
        3) but for the application of paragraph (1) or (7) of
        subsection (c) of such section; and
            (4) Major defense supplier.--The term ``major defense
        supplier''--
                    (A) means any prime contractor or subcontractor
                that supplies or could supply goods or services
                directly or indirectly to the Department of Defense or
                any company with technology potentially significant to
                defense capabilities; and
                    (B) includes--
                            (i) any current prime contractor of a major
                        system (as that term is defined in section 3041
                        of title 10, United States Code); and
                            (ii) any current prime contractor, under a
                        contract awarded pursuant to section 3204(a)(1)
                        of title 10, United States Code.

SEC. 3. TRIENNIAL REVIEW OF MERGER AND ACQUISITION ACTIVITY ASSOCIATED
              WITH MAJOR DEFENSE SUPPLIERS.

    (a) Triennial Review.--The Assistant Secretary of Defense for
Industrial Base Policy shall triennially review merger and acquisition
activity associated with major defense suppliers, including assessing
the resulting financial health of these firms and whether resulting
mergers and acquisitions have affected the supply of an essential good
or service needed to support the Department of Defense's mission to
provide national security and defense.
    (b) Triennial Report.--Not later than December 31, 2027, and
triennially thereafter, the Secretary of Defense for Industrial Base
Policy shall submit to the congressional defense committees a report
with the findings of the review conducted for the previous three fiscal
years, including a description of the effects of completed mergers and
acquisitions on the health of the defense industrial base and actions
taken to mitigate any risks identified.
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