Mandatory CFIUS filing for covered aviation transactions

(a) Findings Congress finds the following: (1) The general aviation sector of the United States represents a critical component of the national aerospace and defense industrial base. General aviation aircraft, engines, avionics systems, and related technologies support pilot training pipelines for both civilian and military aviators, serve as platforms for surveillance, logistics, and emergency response operations, and form an integral part of the supply chains supporting the United States Armed Forces and Federal agencies. (2) The People’s Republic of China (PRC) has, over the past two decades, systematically acquired United States general aviation manufacturers, engine producers, avionics firms, and flight training infrastructure, including through entities wholly owned or directed by the Aviation Industry Corporation of China (AVIC), a conglomerate designated as a Chinese military company under section 1237 of the National Defense Authorization Act for Fiscal Year 1999 (50 U.S.C. 1701 note) and listed on the Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List) maintained by the Office of Foreign Assets Control. (3) PRC entities have made more than 20 acquisitions of, investments in, or joint venture agreements with United States general aviation companies since 2005, spanning engine manufacturers, airframe producers, avionics developers, helicopter manufacturers, and flight training operators. The pattern and pace of these transactions, their concentration in strategically sensitive subsectors, and their alignment with stated PRC industrial policy objectives constitute a coordinated campaign rather than ordinary commercial investment activity. (4) These acquisitions have resulted in the transfer to PRC-controlled entities of Federal Aviation Administration (FAA) production certificates, advanced composite airframe manufacturing expertise, high-efficiency piston engine technology, and FAA-certified avionics integration knowledge, capabilities that carry direct application to unmanned aerial systems, military trainers, and dual-use aviation platforms. (5) Congress has previously recognized analogous national security risks in other sectors and taken corrective action, including through the Protecting Americans from Foreign Adversary Controlled Applications Act (Public Law 118–50), restrictions on Huawei and ZTE Corporation equipment in United States telecommunications networks under the Secure and Trusted Communications Networks Act of 2019 (47 U.S.C. 1601 et seq.), and prohibitions on AVIC-affiliated entities in United States defense procurement. The general aviation sector warrants equivalent congressional attention and protection. (b) Amendments to the defense production act of 1950 Section 721 of the Defense Production Act of 1950 (50 U.S.C. 4565) is amended— (1) in subsection (a)— (A) by redesignating paragraphs (8) through (13) as paragraphs (10) through (15), respectively; and (B) by inserting after paragraph (7) the following new paragraphs: (8) Covered aviation transaction The term covered aviation transaction means any covered transaction in which— (A) the acquirer is a foreign person from a country of concern; and (B) the United States business is a covered general aviation entity. (9) Covered general aviation entity The term covered general aviation entity means any United States business that— (A) holds an FAA production certificate issued pursuant to part 21 of title 14, Code of Federal Regulations, for the manufacture of aircraft engines, propellers, or airframes intended for use in the United States civil aviation fleet; (B) designs, manufactures, or sells avionics or flight control systems, including autopilot systems, glass cockpit displays, or air-to-ground data link systems, intended primarily for general aviation aircraft, as that term is defined in section 40102(a)(17) of title 49, United States Code; (C) is a type certificate holder or production certificate holder under part 21 of title 14, Code of Federal Regulations, for helicopters or light rotorcraft with a maximum certificated takeoff weight of 12,500 pounds or less; or (D) holds a certificate of approval as an FAA-certificated pilot school under part 141 of title 14, Code of Federal Regulations, or an aviation training center under part 142 of title 14, Code of Federal Regulations, and is located within 50 nautical miles of a military installation (as such term is defined in section 802.227 of title 31, Code of Federal Regulations).; (2) in subsection (b)(1)(C)(v)(IV), by adding at the end the following: (hh) Covered aviation transaction The Committee shall require a declaration under this subclause for a covered aviation transaction.; and (3) in subsection (f)— (A) in paragraph (10), by striking and at the end; (B) by redesignating paragraph (11) as paragraph (13); and (C) by inserting after paragraph (10) the following: (11) with respect to a covered aviation transaction— (A) the applicability of the acquirer’s home country’s military-civil fusion policies, or analogous policies, to the acquired United States business; (B) the dual-use potential of the products, technologies, or manufacturing processes of the acquired business for unmanned aerial systems or military aviation platforms; and (C) the acquired business’s participation in FAA certification programs, supply chains supporting Federal agencies, or flight training programs that train foreign nationals; (12) if a business has an ultimate foreign parent entity on the NS-CMIC List, the Entity List maintained under part 744 of title 15, Code of Federal Regulations, or the Specially Designated Nationals and Blocked Persons List; and. (c) Implementing regulations Not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury, in coordination with the Secretary of Defense, the Secretary of Transportation, and the Secretary of Commerce, shall promulgate regulations implementing the amendments made by subsection (b).