Millennium Challenge Corporation Strategic Modernization Act

This Act may be cited as the Millennium Challenge Corporation Strategic Modernization Act.

Congress finds the following:

(1) The Millennium Challenge Corporation is an independent United States Government agency that delivers results-driven foreign assistance, using a transparent, data-driven model rooted in good governance, economic freedom, and investment in people to advance America’s economic and strategic interests.

(2) Strategic competitors of the United States, including the People’s Republic of China, the Russian Federation, and the Islamic Republic of Iran, increasingly deploy state-directed finance, infrastructure development, and resource investments to gain long-term political and economic leverage in developing countries.

(3) The global supply of critical minerals is increasingly concentrated, opaque, and vulnerable to coercion by strategic competitors of the United States, creating risks to United States national security, energy security, and advanced manufacturing.

(4) The Millennium Challenge Corporation’s tools, including grant-based financing, policy reform conditionality, and high governance standards, are well-suited to addressing constraints in critical mineral supply chains, such as infrastructure gaps, regulatory weaknesses, and workforce development limitations.

(5) Earlier and more systematic engagement by the Millennium Challenge Corporation with the United States private sector can improve project design, crowd in private capital, and strengthen economic ties between partner countries and the United States.

(6) The modernization of the Millennium Challenge Corporation should strengthen, not dilute, its core development mission and independence.

It is the sense of Congress that—

(1) strategic competition considerations should inform but not replace the Millennium Challenge Corporation’s existing eligibility standards;

(2) reforms should increase transparency, accountability, and value to United States taxpayers; and

(3) the Millennium Challenge Corporation should be modernized as a strategic asset in an era of global competition.

Section 602 of the Millennium Challenge Act of 2003 (22 U.S.C. 7701) is amended—

(1) in paragraph (1), by striking and at the end;

(2) in paragraph (2), by striking the period at the end and inserting; and; and

(3) by adding at the end the following:

(3) to advance United States economic security and strategic competitiveness by supporting eligible country reforms and investments that strengthen critical mineral supply chains, strategic infrastructure, and market-based economic integration, while also supporting poverty reduction and sustainable economic growth.

(3) .

Section 604 of the Millennium Challenge Act of 2003 (22 U.S.C. 7703) is amended by adding at the end the following:

The Board of Directors shall establish in the Corporation a Critical Minerals Task Force (in this subsection referred to as the Task Force).

The Task Force shall—

(A) assess global and regional critical mineral supply chain vulnerabilities to United States economic and national security;

(B) identify candidate countries in which Corporation engagement could enhance transparent, diversified, and sustainable mineral supply chains;

(C) evaluate infrastructure, regulatory, environmental, labor, and governance constraints affecting mineral development and downstream processing;

(D) recommend priority policy reforms and investment areas appropriate for Corporation assistance; and

(E) coordinate, as appropriate, with relevant United States Government agencies, multilateral institutions, and private sector stakeholders.

Nothing in this subsection may be construed to authorize the Corporation to engage in extractive activities or to subsidize mineral production.

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Section 607 of the Millennium Challenge Corporation Act of 2003 (22 U.S.C. 7706) is amended by adding at the end the following:

In determining eligible countries under this section, the Board shall assess strategic exposure and resilience of candidate countries to the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, and other strategic competitors of the United States using the factors described in paragraph (2). The assessment carried out under this paragraph may be referred to as the Great Power Competition Factsheet (in this subsection referred to as the GPC Factsheet).

The GPC Factsheet shall include, where data are available—

(A) trade volumes, export dependencies, and import reliance involving the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, and other strategic competitors of the United States;

(B) foreign direct investment, sovereign lending, and state-owned enterprise activity from such countries;

(C) foreign assistance, concessional finance, and debt exposure linked to such countries;

(D) ownership, control, financing, or operation of strategic infrastructure, including ports, rail, power generation, transmission, digital networks, and data systems such countries;

(E) critical mineral endowments, processing capacity, export controls, and governance frameworks; and

(F) alignment with international transparency, labor, environmental, and anti-corruption standards.

The GPC Factsheet shall inform Board deliberations but shall not replace other eligibility criteria under other provisions of law.

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Section 609 of the Millennium Challenge Act of 2003 (22 U.S.C. 7708) is amended—

(1) by amending subsection (j) to read as follows:

The implementation of a Compact shall not exceed 5 years.

The Corporation shall—

(A) obligate the entire funding for a Compact upon the execution of the Compact; and

(B) consult with the appropriate congressional committees at the commencement of the implementation period of a Compact.

(1) ; and

(2) by adding at the end the following:

In developing a Compact under this section or under other programs developed under section 616, the Corporation shall, to the extent practicable, engage United States private sector entities, investors, and technical experts during the early stages of project identification and design. Such engagement shall seek to—

(1) improve the feasibility and effectiveness of Compact projects;

(2) mobilize private capital to supplement assistance provided under this title; and

(3) enhance the long-term sustainability and impact of assistance provided under this title.

The Corporation shall use best efforts to commence implementation of the program by ensuring that all required constraint analyses, feasibility studies, environmental assessments, economic analyses, and other forms of due diligence necessary for project commencement are conducted in an expeditious and efficient manner, consistent with the Corporation’s policies.

Nothing in this subsection may be construed to authorize the circumvention of any requirements for a Compact described in subsection (b)(1).

During the period beginning on which a Compact or an agreement under section 616 is entered into and ending on the date on which the Compact or agreement has commenced implementation, the Corporation shall periodically provide a written update to the Board and consult with the appropriate congressional committees to describe—

(A) the status of the program, including the anticipated date of implementation the program will commence;

(B) issues that may negatively impact the anticipated date implementation will commence and steps taken to resolve such issues; and

(C) any measures adopted with the intent to mitigate the issues identified in subparagraph (B) for future Compacts or agreements under section 616.

(2) .

Section 610(a) of the Millennium Challenge Corporation Act of 2003 (22 U.S.C. 7709(a)) is amended—

(1) by redesignating paragraph (4) as paragraph (5); and

(2) by inserting after paragraph (3) the following:

In addition to a report describing the economic rate of return of the Compact as required under paragraph (3)(A), the Corporation shall develop and include in the report a complementary framework to assess benefits accruing to the United States under the Compact.

Such complementary framework may include—

(i) diversification and resilience of critical supply chains and inputs to United States productive activities;

(ii) increased participation of United States companies and investors;

(iii) actions to reduce recipient country exposure to strategic competitors;

(iv) export of goods and services from the United States; and

(v) strengthened diplomatic and economic partnerships.

(2) .