H.R. 6412 — Independence Investment Fund Act

This section defines nine terms for purposes of the Act: (1) "adversarial investment" as capital or intellectual property acquisition from one or more foreign entities of concern; (2) "appropriate congressional committees" as the Senate Committee on Finance and the House Committee on Financial Services; (3) "critical and emerging technology" as a technology identified in the most recent critical and emerging technologies list published by the National Science and Technology Council; (4) "foreign entity of concern" as defined in 42 U.S.C. 19221(a); (5) "Fund" as the Independence Investment Fund established by section 3(a); (6) "managing entity" as the independent entity that enters into a partner agreement with the Secretary under section 4(a); (7) "other transactions" as transactions other than procurement contracts, grants, and cooperative agreements; (8) "portfolio company" as a company in which the Fund invests; and (9) "Secretary" as the Secretary of the Treasury.

This section establishes in the Department of the Treasury the Independence Investment Fund to invest in U.S.-headquartered companies developing critical and emerging technologies that enhance national and economic security. The Fund must pursue five objectives: (1) investing in such companies for measurable security improvements; (2) signaling technology priorities to attract private capital; (3) generating financial returns for self-sustainment; (4) providing alternative funding to companies vulnerable to adversarial investment; and (5) offering the federal government awareness of technology market trends. The Secretary of the Treasury must oversee the Fund's strategy in consultation with the Secretaries of Defense and Commerce to identify security needs and technology priorities, with biotechnology as a priority area. The Fund must make seed- to mid-stage equity investments averaging $1 million to $10 million per investment (any amount permitted) and, as appropriate, may invest in or partner with non-U.S. entities excluding foreign entities of concern. This section further establishes an advisory board to recommend a roadmap, operating procedures (including investment criteria and portfolio company reporting), and implementation details (e.g., non-financial assistance to portfolio companies, intellectual property handling, board seats, and restrictions on foreign investments) for the Fund. The board, comprising individuals with expertise in technology financing, public-private partnerships, and security applications (including one biotechnology and national security official from the Executive Office of the President), must submit its recommendations in a report to the Secretary and appropriate congressional committees within 180 days of enactment. The board is supported by three professional staff and is exempt from the Federal Advisory Committee Act.

This section requires the Secretary to select, through open competition, an independent nonprofit or for-profit entity to serve as the managing entity of the Fund and enter into an agreement with the selected entity not later than 180 days after beginning the competition. The managing entity must have a demonstrated record of managing investment funds, making equity investments, creating company-investor linkages, and promoting novel technology innovation. The managing entity must (1) manage the Fund using strategic venture capital practices; (2) develop an investment strategy for critical and emerging technologies addressing national and economic security needs identified by the Secretary; and (3) provide expert consultation to foster such technology innovation. The Secretary must provide direction to the managing entity, in coordination with the supervisory board, including communicating security needs, developing a description of work, providing oversight and technical feedback, ensuring fair consideration of products to maintain competition, and requiring the entity to implement policies on transparency, conflicts of interest, monthly fund accounting, and quarterly progress reports. The section authorizes other transactions with the managing entity using competitive procedures to the maximum extent practicable and specifies that the Fund is not a federal agency, department, or instrumentality.

This section authorizes the Secretary to (1) appoint up to 25 personnel without regard to competitive service appointment requirements under title 5, U.S. Code; and (2) set their basic pay without regard to title 5, U.S. Code, pay and classification rules, capped at $400,000 annually (i.e., the President's compensation under 3 U.S.C. 102, excluding any expense allowance).

This section directs the Secretary to submit to the appropriate congressional committees, not later than October 1 of each year, a report on the operations of the Fund during the preceding fiscal year. The report must assess (1) the impacts of investments on meeting the objectives of the Fund described in section 3(b); (2) performance measurements of investments; (3) the progress of the Fund in meeting the goals and milestones developed by the advisory board under section 3(g)(3)(A)(i), including timelines for those goals and milestones; and (4) the extent to which the investments complement other Federal financing mechanisms for critical and emerging technologies.

This section exempts any action taken or decision made by the Secretary under this Act from the requirements of 44 U.S.C. § 3506 (i.e., agency heads' responsibilities under the Paperwork Reduction Act for information resources management, including designation of a Chief Information Officer, reduction of public information collection burdens, and program efficiency) and 5 U.S.C. chapters 5 and 7 (i.e., Administrative Procedure Act requirements for rulemaking and agency adjudications).

This section authorizes appropriations to carry out the Act as follows: (1) $975.5 million for FY2025, of which $300 million is for biotechnology investments (to remain available until expended); (2) for administrative and operating costs, $2 million for FY2025 and $22 million for each of FY2026 through 2040; and (3) conditionally, if the cash balance available for biotechnology investments is less than $80 million on September 30 of any fiscal year during FY2035 through 2040, $500 million for the following fiscal year, of which $150 million is for biotechnology investments, with a limitation of not more than $500 million total authorized under this conditional provision.