,i #aacth ,,congress #b;d ,session ,h4 ,r4 #dhhc ,,in ,,the ,,house ,,of ,,representatives ,june #ag1 #bjad ,mr4 ,stockman introduced the following bill2 which was referred to the ,committee on ,armed ,services ,a ,,bill ,to provide for the establishment of a ,national ,rare-,earth ,refinery ,cooperative1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,national ,rare-,earth ,cooperative ,act of #bjad4 #b4 ,findings2 statement of policy 7a7 ,findings ,congress makes the following finding3 7#a7 ,heavy rare-earth elements are critical for the national defense of the ,united ,states1 advanced energy technologies1 and other desirable commercial and industrial applications4 7#b7 ,the ,government ,accountability ,office has confirmed that the monopoly control of the ,people's ,republic of ,china over the rare-earth value chain has resulted in vulnerabilities in the procurement process of multiple ,united ,states weapons systems4 7#c7 ,china has leveraged its monopoly control over the rare-earth value chain to force ,american1 ,european1 ,japanese1 and ,korean corporations to transfer manufacturing facilities1 technology1 and jobs to ,china in exchange for secure supply contracts4 7#d7 ,china's increasingly aggressive mercantilist behavior has resulted in involuntary transfers of technology1 manufacturing facilities1 and jobs as well as onerous trade imbalances with the ,united ,states and trading partners of the ,united ,states4 7#e7 ,direct links exist between heavy rare-earth mineralogy and thorium4 7#f7 ,thorium is a mildly radioactive element commonly associated with the lanthanide elements in the most heavy rare-earth deposits that are located in the ,united ,states and elsewhere4 7#g7 ,regulations regarding thorium represent a barrier to the development of the heavy rare-earth industry that is based in the ,united ,states4 7#h7 ,balancing the strategic national interest objectives of the ,united ,states against economic and environmental risks is best met through the creation of a rare-earth cooperative4 7#i7 ,a rare-earth cooperative could-- 7,a7 greatly increase rare-earth production2 7,b7 ensure environmental safety2 and 7,c7 lower the cost of production and financial risks faced by rare-earth producers in the ,united ,states4 7#aj7 ,historically1 agricultural and electric cooperatives have stood as some of the greatest success stories of the ,united ,states4 7b7 ,statement of policy ,it is the policy of the ,united ,states to advance domestic refining of heavy rare-earth materials and the safe storage of thorium in anticipation of the potential future industrial uses of thorium1 including energy1 as-- 7#a7 thorium has a mineralogical association with valuable heavy rare-earth elements2 7#b7 there is a great need to develop domestic refining capacity to process domestic heavy rare-earth deposits2 and 7#c7 the economy of the ,united ,states would benefit from the rapid development and control of intellectual property relating to the commercial development of thorium-utilizing technology4 #c4 ,definitions ,in this ,act3 7#a7 ,actinide ,the term actinide means all elements with atomic numbers of #hi or greater on the periodic table4 7#b7 ,consumer member 7,a7 ,in general ,the term consumer member means a member of the ,cooperative that is-- 7i7 an entity that is part of1 or has a role in1 the value chain for rare-earth materials or rare-earth products1 including from the refined oxide state to the stage in which the rare-earth elements are finished in any physical or chemical form 7including oxides1 metals1 alloys1 catalysts1 or component72 or 7ii7 a consumer of rare-earth products4 7,b7 ,inclusions ,the term consumer member includes-- 7i7 a producer of or other entity that is part of the value chain for rare-earth materials1 including original equipment manufacturer producers1 whose place of business is located in or outside the ,united ,states2 7ii7 a defense contractor or contractors in the ,united ,states2 and 7iii7 any government agency in the ,united ,states or outside the ,united ,states that invests in the ,cooperative4 7#c7 ,cooperative ,the term ,cooperative means the ,thorium-,bearing ,rare-,earth ,refinery ,cooperative established by section #d7;a77#a74 7#d7 ,cooperative board ,the term ,cooperative ,board means the ,board of ,directors of the ,cooperative established under section #d7;b77#b74 7#e7 ,corporation ,the term ,corporation means the ,thorium ,storage1 ,energy1 and ,industrial ,products ,corporation established under section #e7;a77#a74 7#f7 ,corporation board ,the term ,corporation ,board means the ,board of ,directors of the ,corporation established under section #e7;b77#a74 7#g7 ,executive committee ,the term ,executive ,committee means the executive committee established under section #e7;b77#b74 7#h7 ,initial board of directors ,the term ,initial ,board of ,directors means the initial ,board of ,directors for the ,cooperative established under section #d7;b77#a77;,a74 7#i7 ,institution of higher education ,the term institution of higher education has the meaning given that term in section #aja7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja7;a774 7#aj7 ,national laboratory ,the term national laboratory has the meaning given that term in section #b of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #aehja74 7#aa7 ,secretary ,the term ,secretary means the ,secretary of ,defense4 7#ab7 ,supplier member ,the term supplier member means a rare-earth producer that enters into a contract to supply the ,cooperative with rare-earth ores4 7#ac7 ,tolling ,the term ,tolling means a fee-for-services contract between the ,cooperative and a primary rare-earth producer under which-- 7,a7 the producer retains ownership and control of the finished product2 and 7,b7 pays to the ,cooperative a fee for services rendered by the ,cooperative4 7#ad7 ,unprocessed and unrefined ore ,the term unprocessed and refined ore includes any ores or residual ores resulting from the mining1 extraction1 beneficiation1 and processing of other natural resources4 #d4 ,thorium-,bearing ,rare-,earth ,refinery ,cooperative 7a7 ,establishment 7#a7 ,in general ,there is established a ,cooperative1 to be known as the ,thorium-,bearing ,rare-,earth ,refinery ,cooperative1 to provide for the domestic processing of thorium-bearing rare-earth concentrates as residual unprocessed and unrefined ores1 in accordance with #aj ,,cfr #dj4ab and #ac;b as it relates to the ,cooperative4 7#b7 ,federal charter2 ownership ,the ,cooperative shall operate under a ,federal charter4 7#c7 ,membership 7,a7 ,composition ,the ,cooperative shall comprise-- 7i7 supplier members2 and 7ii7 consumer members4 7,b7 ,supplier members 7i7 ,in general ,as a condition of entering into a contract to supply the ,cooperative with rare-earth ores1 supplier members provide rare-earth concentrates to the ,cooperative at market price4 7ii7 ,capital contributions ,any supplier member that makes significant capital contributions to the ,cooperative1 as determined by the ,cooperative ,board1 may become a consumer member for purposes of the distribution of profits of the ,cooperative under subparagraph 7,d74 7,c7 ,consumer member ,a consumer member-- 7i7 shall make capital contributions to the ,cooperative in exchange for entering into negotiated supply agreements2 and 7ii7 in accordance with the agreements entered into under clause 7i71 may acquire finished rare-earth products from the ,cooperative at market price4 7,d7 ,distribution of profits ,any profits of the ,cooperative shall be distributed between supplier members and consumer members in accordance with a formula established by the ,cooperative ,board4 7b7 ,management 7#a7 ,initial board of directors 7,a7 ,in general ,as soon as practicable after the date of the enactment of this ,act1 the ,secretary shall appoint the ,initial ,board of ,directors for the ,cooperative1 comprised of five members1 of whom-- 7i7 one member shall represent the ,defense ,logistics ,agency ,strategic ,materials program of the ,department of ,defense2 7ii7 one member shall represent the ,assistant ,secretary of ,defense for ,research and ,engineering2 7iii7 one member shall represent ,united ,states advocacy groups for rare-earth producers and original equipment manufacturing interests2 7iv7 one member shall represent the ,united ,states ,geological ,survey2 and 7v7 one member who shall-- 7,i7 not be affiliated with a ,federal agency2 and 7,,ii7 be recommended for appointment by a majority vote of the other members of the ,initial ,board of ,directors appointed under clauses 7i7 through 7iv74 7,b7 ,duties ,the ,initial ,board of ,directors shall-- 7i7 establish the charter1 bylaws1 and rules of governance for the ,cooperative2 7ii7 make formative business decisions on behalf of the ,cooperative2 and 7iii7 assist in the formation of1 and the provision of tasks and assignments to1 the ,corporation4 7,c7 ,standing member ,the member appointed under subparagraph 7,a77v7 shall remain on the ,cooperative ,board and ,corporation ,board1 until such time as-- 7i7 the member voluntarily resigns2 or 7ii7 a majority of the members of the ,cooperative ,board and a majority of the members of the ,corporation ,board vote to remove the member from the ,cooperative ,board and the ,corporation ,board4 7,d7 ,termination ,the ,initial ,board of ,directors shall terminate on the date on which the initial members of the ,cooperative ,board are appointed under paragraph 7#b74 7#b7 ,board of directors 7,a7 ,in general ,the ,board of ,directors of the ,cooperative shall comprise nine members1 to be selected in accordance with the bylaws of the ,cooperative established under paragraph 7#a77;,b77i71 of whom-- 7i7 five members shall be consumer members2 7ii7 two members shall be supplier members2 7iii7 one member shall represent an advocacy group for defense contractors1 other rare-earth consumers1 and suppliers who are not represented by the ,board or through direct ownership in the ,cooperative2 and 7iv7 one member shall be the member of the ,initial ,board of ,directors appointed under paragraph 7#a77;,a77v74 7,b7 ,powers ,the ,cooperative ,board may-- 7i7 prescribe the manner in which business shall be conducted by the ,cooperative2 7ii7 determine pay-out ratio formulas for consumer members and supplier members1 based on-- 7,i7 the capital stock ratios of consumer members2 and 7,,ii7 the value of supply member contracts1 as determined based on the volume1 term1 and distributions of rare-earth concentrates relative to processing costs2 and 7iii7 evaluate technologies and processes for the efficient extraction and refining of rare-earth materials from various thorium-bearing ores4 7,c7 ,refinery and office locations ,the ,cooperative ,board shall establish the refinery and offices for the ,cooperative at any locations determined to be appropriate by the ,cooperative ,board4 7c7 ,powers2 duties 7#a7 ,investment partnerships ,the ,cooperative shall seek to enter into domestic and international investment partnerships for the development of the refinery4 7#b7 ,agreements2 direct sales ,the ,cooperative may-- 7,a7 enter into equity1 financial1 and supply-based agreements or arrangements with value-added intermediaries1 equipment manufacturers1 or consumers of rare-earth products1 and ,federal1 ,state1 or local agencies to provide economic incentives1 leases1 or public financing2 and 7,b7 engage in direct market sales of rare-earth products4 7#c7 ,supply contracts and tolling services 7,a7 ,in general ,the ,cooperative may-- 7i7 directly purchase rare-earth materials obtained from any byproduct producers of rare-earths2 7ii7 transport those materials as unprocessed and unrefined ores1 in accordance with part #dj of title #aj1 ,code of ,federal ,regulations 7parts #ab-ac;b1 or any corresponding similar regulation or ruling72 7iii7 offer non-member supplier short-term or direct purchase contracts2 and 7iv7 allow primary rare-earth producers to be tolling customers of the ,cooperative4 7,b7 ,requirements ,a tolling customer under subparagraph 7,a77iii7 shall-- 7i7 retain control of the rare-earth products during the processing1 refining1 or value adding of the rare-earth products by the ,cooperative2 and 7ii7 take possession of the rare-earth products after-- 7,i7 tolling services are rendered by the ,cooperative2 and 7,,ii7 the ,cooperative has received payment in full for the tolling services rendered4 7,c7 ,fee ,the ,cooperative may charge tolling customers under subparagraph 7,a77iii7 a tolling fee not to exceed the sum of-- 7i7 the amount equal to #aaj percent of the total cost for tolling services rendered by the ,cooperative on behalf of the tolling customer2 and 7ii7 the amount equal to five percent of the market value of the finished product provided to the tolling customer by the ,cooperative4 7,d7 ,applicable law ,any contract among consumer members1 supplier members1 tolling customers1 and direct purchase suppliers entered into under subparagraph 7,a77iii7 shall be protected as provided in subsection #eeb7;b77#d7 of title #e1 ,united ,states ,code4 7,e7 ,limitations ,a direct purchase non-member supplier under subparagraph 7,a77ii7 or a tolling customer under subparagraph 7,a77iii7-- 7i7 shall not be considered to be a supplier member or otherwise be considered a member of the ,cooperative for purposes of this ,act2 and 7ii7 shall not participate in ,cooperative profits or have voting rights with respect to the ,cooperative4 7d7 ,audits 7#a7 ,in general ,the ,cooperative shall retain an independent auditor to evaluate the extent to which ,federal funds1 if any1 made available to the ,cooperative for research and development activities have been expended in a manner that is consistent with the purposes of this ,act and the charter1 bylaws1 and rules of governance of the ,cooperative4 7#b7 ,reports ,the auditor retained under paragraph 7#a7 shall submit to the ,secretary of ,defense1 the ,cooperative1 and the ,comptroller ,general of the ,united ,states an annual report containing the findings and determinations of the auditor4 7#c7 ,review by comptroller general ,the ,comptroller ,general of the ,united ,states shall-- 7,a7 review each annual report submitted to the ,comptroller ,general by the auditor under paragraph 7#b72 and 7,b7 submit to the ,committee on ,armed ,services of the ,senate and the ,committee on ,armed ,services of the ,house of ,representatives a report containing the comments of the ,comptroller ,general on the accuracy and completeness of the report and any other matters relating to the report that the ,comptroller ,general considers appropriate4 7e7 ,reimbursement of ,federal ,government ,not later than seven years following the date of the enactment of this ,act1 the ,cooperative shall reimburse the ,federal ,government for administrative costs associated with the establishment of its charter4 #e4 ,thorium ,storage1 ,energy1 and ,industrial ,products ,corporation 7a7 ,establishment 7#a7 ,in general ,as soon as practicable after the date of the enactment of this ,act1 the ,cooperative ,board1 in consultation with the ,secretary of ,defense1 shall establish the ,thorium ,storage1 ,energy1 and ,industrial ,products ,corporation to develop uses and markets for thorium1 including energy4 7#b7 ,federal charter ,the ,corporation shall operate under a ,federal charter4 7b7 ,management 7#a7 ,board of directors 7,a7 ,in general ,the ,board of ,directors of the ,corporation shall comprise five members4 7,b7 ,initial members ,the initial members of the ,corporation ,board shall consist of the following members1 to be appointed by the ,secretary of ,defense3 7i7 one member1 who shall represent the ,assistant ,secretary of ,defense for ,research and ,engineering2 7ii7 a ,j-#g who will represent the ,director of the ,joint ,chiefs of ,staff2 7iii7 one member1 who shall represent ,united ,states advocacy groups for commercial development of thorium in nuclear energy systems2 7iv7 one member1 who shall represent a national laboratory2 and 7v7 one member1 who is the member of the ,initial ,board of ,directors appointed under section #d7;b77#a77;,a77v74 7,c7 ,subsequent members ,subject to subparagraphs 7,a7 and 7,d71 subsequent members of the ,corporation ,board and ,executive ,committee shall be appointed in accordance with bylaws of the ,corporation established under paragraph 7#b77;,b77i74 7,d7 ,standing members ,the initial members appointed under clauses 7iv7 and 7v7 of subparagraph 7,b7 shall remain on the ,corporation ,board and the ,executive ,committee1 until such time as-- 7i7 the members voluntarily resign2 7ii7 in the case of a member appointed under subparagraph 7,b77iv71 a majority of the members of the ,corporation ,board votes to remove the member from the ,corporation ,board2 or 7iii7 in the case of a member appointed under subparagraph 7,b77v71 a majority of the members of the ,corporation ,board votes to remove the member from the ,corporation ,board and the ,cooperative ,board4 7#b7 ,executive committee 7,a7 ,in general ,the ,executive ,committee for the ,corporation shall comprise the initial members of the ,corporation ,board appointed under clauses 7iv7 and 7v7 of paragraph 7#a77;,b74 7,b7 ,duties ,the ,executive ,committee shall-- 7i7 establish the charter1 bylaws1 rules of governance1 and corporate structure for the ,corporation2 and 7ii7 make formative business decisions with respect to the ,corporation4 7c7 ,powers 7#a7 ,establishment of subsequent entities 7,a7 ,in general ,the ,corporation may establish one or more entities1 to be known as an ,industrial ,products ,corporation for the certification1 licensing1 insuring1 and commercial development of all non-energy uses for thorium 7including thorium isotopes and thorium daughter elements71 including-- 7i7 alloys2 7ii7 catalysts2 7iii7 medical isotopes2 and 7iv7 other products4 7,b7 ,authority of entities ,the entities described in subparagraph 7,a7 may-- 7i7 develop standards1 procedures1 and protocols for the approval of commercial and industrial applications for thorium2 7ii7 carry out directly the production and sale of thorium-related non-energy products2 and 7iii7 sell or license any production or sales rights to third parties4 7,c7 ,sale or distribution of industrial products corporation2 creation of businesses and partnerships ,to develop and commercialize non-energy uses for thorium1 the corporation ,board may-- 7i7 create1 sell1 or distribute the equity of an entity described in subparagraph 7,a72 and 7ii7 establish partnerships with ,federal agencies1 foreign governments1 and private entities relating to businesses and activities of the entity4 7#b7 ,sale or distribution of corporation equity2 creation of partnerships ,to develop and commercialize thorium energy1 the ,corporation may sell or distribute equity and establish partnerships with the ,united ,states1 foreign governments1 and private entities-- 7,a7 to create capital2 7,b7 to develop intellectual property2 7,c7 to acquire technology2 7,d7 to establish business partnerships and raw material supply chains2 7,e7 to develop commercial thorium energy systems2 7,f7 to develop commercial systems for the reduction of spent fuel2 7,g7 to develop hardened energy systems for the ,united ,states military2 and 7,h7 to develop process heat technologies systems for coal-to-liquid fuel separation1 desalinization1 chemical synthesis1 and other applications4 7d7 ,duties 7#a7 ,ownership of thorium and related actinides ,the ,corporation shall-- 7,a7 on a preprocessing basis1 assume liability for and ownership of all thorium and mineralogically associated or related actinides and decay products contained within the monazite and other rare-earth mineralizations in the possession of the cooperative2 7,b7 separate the thorium from the rare-earth concentrates1 take physical possession and safely store all thorium-containing actinide byproducts1 with the costs of the storage to be paid by the ,corporation from fees charged or revenue from sales of other valuable actinides and decay products1 and thus after-- 7i7 develop new markets and uses for thorium2 7ii7 develop energy systems that utilize thorium2 and 7iii7 develop1 manage1 and control national and international energy leasing and distribution platforms related to thorium energy systems4 7#b7 ,safe1 long-term storage2 development of uses and markets ,the ,corporation shall-- 7,a7 in consultation with the ,administrator of the ,environmental ,protection ,agency and the ,secretary of ,energy1 be responsible for the safe1 long-term storage of all thorium and thorium decay products generated through the ,cooperative1 consistent with part #aib of title #dj1 ,code of ,federal ,regulations 7as in effect on the date of the enactment of this ,act71 while taking into account the low relative risks relating to thorium2 and 7,b7 develop uses and markets for thorium1 including energy1 by coordinating and structuring domestic and international investment partnerships for the development of commercial and industrial uses for thorium4 7e7 ,audits 7#a7 ,in general ,the ,corporation shall retain an independent auditor to evaluate the extent to which ,federal funds1 if any1 made available to the ,corporation for research and development activities have been expended in a manner that is consistent with the purposes of this ,act and the charter1 bylaws1 and rules of governance of the ,corporation4 7#b7 ,reports ,the auditor retained under paragraph 7#a7 shall submit to the ,secretary of ,defense1 the ,corporation1 and the ,comptroller ,general of the ,united ,states an annual report containing the findings and determinations of the auditor4 7#c7 ,review by comptroller general ,the ,comptroller ,general of the ,united ,states shall-- 7,a7 review each annual report submitted to the ,comptroller ,general by the auditor under paragraph 7#b72 and 7,b7 submit to the ,committee on ,armed ,services of the ,senate and the ,committee on ,armed ,services of the ,house of ,representatives a report containing the comments of the ,comptroller ,general on the accuracy and completeness of the report and any other matters relating to the report that the ,comptroller ,general considers appropriate4 7f7 ,reimbursement of ,federal ,government ,not later than seven years after the date of the enactment of this ,act1 the ,corporation shall reimburse the ,federal ,government for the administrative costs associated with the establishment of its charter4 #f4 ,duties of ,secretary of ,defense 7a7 ,advancement of rare-,earth initiatives ,the ,secretary shall coordinate with other ,federal agencies to advance and protect-- 7#a7 domestic rare-earth mining2 7#b7 the refining of rare-earth elements2 7#c7 basic rare-earth metals production2 and 7#d7 the development and commercialization of thorium1 including-- 7,a7 energy technologies and products2 and 7,b7 products containing thorium4 7b7 ,annual reports ,not later than one year after the date of the enactment of this ,act1 and annually thereafter1 the ,secretary shall submit to ,congress a report that1 for the period covered by the report-- 7#a7 contains a description of the progress in the development of-- 7,a7 a domestic rare-earth refining capacity2 and 7,b7 commercial uses and energy-related uses for thorium2 and 7#b7 takes into account each report submitted to the ,secretary by the ,cooperative and the ,corporation4 7c7 ,federal agencies2 national laboratories ,each ,federal agency 7including the ,nuclear ,regulatory ,commission and the ,defense ,advanced ,research ,projects ,agency71 each national laboratory1 and each facility funded by the ,federal ,government shall provide assistance to the ,cooperative and the ,corporation under this ,act4 7d7 ,institutions of higher education ,each institution of higher education is encouraged-- 7#a7 to develop training and national expertise in the field of thorium development2 and 7#b7 to promote-- 7,a7 the marketing of thorium2 7,b7 the advancement of the strategic uses of thorium2 and 7,c7 salt chemistry science and radio chemists4 #g4 ,amendment to #aj ,u4,s4,c4 #becc;b1 requiring only ,u4,s4 or ,,nato member nation rare earth materials in ,u4,s4 weapon systems 7a7 #aj ,u4,s4,c4 #becc;b7a7 ,requirement ,shall be amended to add the following provision3 7#c7 ,beginning ,january #a1 #bjbj1 all purchased or procured weapon systems must contain only ,u4,s4 or ,,nato member nation produced and sourced rare earth materials1 metals1 magnets1 parts1 and_/or components4 ,the inclusion of any rare earth materials that originate or pass through a non-,,nato member nation is prohibited4 ,no waivers shall be granted unless the lead contractor seeking a waiver can demonstrate that it has pursued all possible corrective actions1 including direct investment into the supply chain44