,i #aaeth ,,congress #ast ,session ,h4 ,r4 #adjg ,,in ,,the ,,house ,,of ,,representatives ,march #g1 #bjag,mr4 ,hunter introduced the following bill2 which was referred to the ,committee on ,armed ,services1 and in addition to the ,committees on ,financial ,services1 ,foreign ,affairs1 and ,energy and ,commerce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to establish a strategic materials investment fund1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,materials ,essential ,to ,american ,leadership and ,security ,act or the ,,metals ,act4 #b4 ,sense of ,congress on domestic production of rare earth elements 7a7 ,findings ,congress finds the following3 7#a7 ,in the wake of increased tension between the ,people's ,republic of ,china and the nation of ,japan in #bjaj1 the ,people's ,republic of ,china enacted a de facto embargo of all rare earth elements which placed the ,department of ,defense at risk of losing access to materials used in the manufacture of key components of numerous major weapons systems4 ,the potential for the ,people's ,republic of ,china to suspend exports of rare earth elements to the ,united ,states still exists today4 7#b7 ,in #bjae1 a major ,united ,states corporation1 the only major domestic producer of certain rare earth products1 filed for bankruptcy after compiling #a4d billion in debt4 ,assets from the company were sold to operators in the ,people's ,republic of ,china to pay off creditors while the domestic mine and processing plant were shuttered and disassembled4 7#c7 ,the ,people's ,republic of ,china currently dominates the supply chain for the production of rare earth elements controlling more than #ij percent of the world's production4 7#d7 ,rare earth elements are used in a host of advanced defense applications and technologies which would largely be rendered ineffective without these materials4 7b7 ,sense of congress ,it is the sense of ,congress that-- 7#a7 in the interest of national security the ,united ,states must develop a domestic industrial base for the production of strategic and critical materials2 7#b7 considering the host of defense-related applications that would be rendered ineffective if ,united ,states access to foreign strategic and critical materials was restricted1 the ,united ,states must ensure a safe and secure supply chain for strategic and critical materials for defense purposes2 7#c7 given the current supply chain for strategic and critical materials the ,united ,states1 and specifically the ,department of ,defense1 is at considerable risk for a supply interruption2 7#d7 if it is to divest itself from a dependence on foreign-produced strategic and critical materials1 the ,united ,states must be willing to accept some risk in the form of aiding domestic investment opportunities2 7#e7 the ,united ,states must support the domestic production of strategic and critical materials by creating a fund which uses a small percentage1 #a percent1 of the internal programmatic administration costs of major aircraft and missile weapons systems to promote investment in domestic production of strategic and critical materials2 7#f7 the fund should only leverage those funds used by the ,department of ,defense for internal programmatic administration costs and should not decrease quantities to be procured by the ,department of ,defense2 7#g7 the fund should be managed by the ,defense ,logistics ,agency ,strategic ,materials2 7#h7 the purpose of the fund should be to provide #e-year1 interest-free loans to domestic producers of strategic and critical materials in an attempt to reduce ,american dependence on foreign sources of these materials and the loans should be paid back to the fund at the termination of the loan period2 and 7#i7 in those cases where domestic materials are more expensive than materials available from international sources1 often owing to unfair trade and labor practices in foreign countries1 the fund should reimburse weapons systems programs for cost increases as a result of procuring strategic and critical materials from domestic sources4 #c4 ,strategic materials investment fund 7a7 ,establishment ,there is established in the ,treasury of the ,united ,states a separate fund to be known as the ,strategic ,materials ,investment ,fund 7in this section referred to as the ,fund74 ,the ,fund shall consist of amounts deposited to it under subsection 7e74 7b7 ,fund operations ,the ,secretary of ,defense1 acting through the ,administrator of the ,defense ,logistics ,agency ,strategic ,materials1 may make expenditures from the ,fund to develop the domestic strategic and critical materials industrial base1 including by-- 7#a7 making loans to domestic producers of strategic and critical materials in accordance with subsection 7c7 for the purposes of-- 7,a7 constructing1 upgrading1 and operating facilities inside the ,united ,states for the smelting1 sintering1 leaching1 processing1 separation1 beneficiation1 or production of strategic and critical materials2 and 7,b7 developing new technologies for the more efficient smelting1 sintering1 leaching1 processing1 separation1 beneficiation1 or production of strategic and critical materials2 and 7#b7 reimbursing original equipment manufacturers in accordance with subsection 7d74 7c7 ,loans to domestic producers 7#a7 ,in general ,amounts from the ,fund may be used to make loans to domestic producers of strategic and critical materials for the purposes described in subparagraphs 7,a7 and 7,b7 of subsection 7b77#a74 7#b7 ,eligibility ,a domestic producer of strategic and critical materials shall not be eligible to receive a loan from the ,fund if such producer-- 7,a7 is carrying out an activity described in subsection 7f72 7,b7 has a history of financial insolvency or bankruptcy2 or 7,c7 is controlled by or acting on behalf of the ,people's ,republic of ,china or the ,russian ,federation4 7#c7 ,loan terms 7,a7 ,interest ,interest shall not accrue on any loan made under paragraph 7#a74 7,b7 ,repayment 7i7 ,repayment required ,not later than #e years after receiving a loan under paragraph 7#a71 the recipient of the loan shall repay the full amount of the loan-- 7,i7 to the ,fund2 or 7,,ii7 if the ,fund has terminated under subsection 7h71 to the ,treasury of the ,united ,states 7ii7 ,penalty ,if a recipient does not repay the full amount of the loan in the time period described in clause 7i71 the recipient-- 7,i7 shall not be eligible to receive additional disbursements from the ,fund2 and 7,,ii7 shall be liable to the ,united ,states for the full amount of the loan plus a penalty in an amount equal to #ej percent of the amount of the loan4 7,c7 ,prohibition on transfer to foreign entity 7i7 ,prohibition on transfer ,a recipient of a loan from the ,fund shall not transfer to a foreign government or an entity controlled by or acting on behalf of a foreign government1 any interest in-- 7,i7 any facilities constructed1 upgraded1 or operated by the recipient2 or 7,,ii7 any new technologies developed by the recipient for the more efficient smelting1 sintering1 leaching1 processing1 separation1 benefaction1 or production of strategic and critical materials4 7ii7 ,penalty ,if the recipient of a loan from the ,fund makes a transfer prohibited under clause 7i71 the recipient shall be liable to the ,united ,states for the full amount of the loan plus a penalty in an amount equal to #ejj percent of the amount of the loan4 7d7 ,reimbursement of original equipment manufacturers 7#a7 ,in general ,subject to paragraph 7#b71 amounts from the ,fund may be used to reimburse original equipment manufacturers for the increased costs that result from such manufacturers purchasing strategic and critical materials produced in the ,united ,states from producers that have received disbursements from the ,fund4 7#b7 ,limitations 7,a7 ,limitation on amounts available for reimbursement ,not more than #ej percent of the amounts deposited in the ,fund for a fiscal year shall be available for reimbursing original equipment manufacturers under paragraph 7#a7 in such fiscal year4 7,b7 ,limitation on reimbursement of excessive costs ,excessive costs1 as determined by the senior acquisition executive for the program concerned1 shall not be reimbursed under paragraph 7#a74 7e7 ,deposits to ,fund 7#a7 ,in general ,except as provided in paragraph 7#b71 for each of fiscal years #bjah through #bjbc1 one tenth of one percent of the amounts appropriated for covered programs shall be deposited to the ,fund4 ,such deposits shall be taken from amounts allocated for the internal administration of the covered programs and shall not reduce the quantities of items procured under the programs4 7#b7 ,exception 7,a7 ,certification ,the requirement under paragraph 7#a7 shall not apply to a covered program if the prime contractor for such program certifies to the senior acquisition executive concerned that no strategic or critical materials from the ,people's ,republic of ,china or the ,russian ,federation are included in the final item delivered to the ,government or in any component thereof4 7,b7 ,supporting documents ,not later than #cj days after a prime contractor makes a certification under subparagraph 7,a71 the senior acquisition executive concerned may require the prime contractor to provide supporting documents verifying that the final item delivered to the ,government meets the requirements of such subparagraph4 7,c7 ,civil penalty ,a prime contractor who makes a false certification under this paragraph shall be subject to a civil fine of not more than #a percent of the value of the contract concerned4 7f7 ,prohibited uses of funds ,no amount may be expended from the ,fund-- 7#a7 to develop technologies that would decrease the capacity of the domestic industrial base for strategic and critical materials2 or 7#b7 to redesign technologies to reduce the use of strategic and critical materials in such technologies4 7g7 ,definitions ,in this section3 7#a7 ,covered programs ,the term covered programs means all major defense acquisition programs 7as that term is defined in section #bdcj of title #aj1 ,united ,states ,code7 for the development or procurement of aircraft or missiles4 7#b7 ,original equipment manufacturer ,the term original equipment manufacturer means a contractor or subcontractor in the supply chain that integrates strategic and critical materials into a component used in a product that is sold to the ,federal ,government4 7#c7 ,strategic and critical materials ,the term strategic and critical materials means-- 7,a7 the lanthanide elements1 yttrium1 and scandium2 7,b7 titanium and titanium alloys2 7,c7 magnesium2 7,d7 antimony2 7,e7 tungsten2 7,f7 uranium2 7,g7 tantalum2 7,h7 fluorspar2 7,i7 lithium2 7,j7 strontium2 7,k7 vanadium2 7,l7 steel-- 7i7 with a maximum alloy content exceeding one or more of the following limits3 7,i7 manganese1 #a4fe percent2 7,,ii7 silicon1 #j4fj percent2 or 7,,iii7 copper1 #j4fj percent2 or 7ii7 containing more than #j4be percent of any of the following elements3 aluminum1 chromium1 cobalt1 columbium1 molybdenum1 nickel1 titanium1 tungsten1 or vanadium2 7,m7 zirconium and zirconium base alloys2 7,n7 metal alloys consisting of nickel1 iron-nickel1 and cobalt base alloys containing a total of other alloying metals 7except iron7 in excess of #aj percent2 7,o7 thorium2 and 7,p7 any other materials determined to be materials critical to national security by the ,strategic ,materials ,protection ,board established under section #ahg of title #aj1 ,united ,states ,code4 7h7 ,sunset ,the ,fund shall terminate on ,september #cj1 #bjbc1 and any amounts remaining in the ,fund on such date shall be deposited in the ,treasury of the ,united ,states4 #d4 ,nuclear reactors assessment 7a7 ,finding ,congress finds that section #ajab of the ,national ,defense ,authorization ,act for #bjjh 7,public ,law #aaj-aha2 #abb ,stat4 #cjc7 required that the ,united ,states construct all major combatant vessels of the strike forces of the ,navy with integrated nuclear power systems4 7b7 ,assessment ,the ,secretary of ,defense1 in consultation with the ,secretary of ,energy1 shall assess the ability of thorium-fueled nuclear reactors to meet the power generation needs of the ,navy4 7c7 ,elements ,the assessment under subsection 7b7 shall include-- 7#a7 an identification of the benefits to naval operations of incorporating thorium-liquid-fueled nuclear reactors or uranium reactors into a range of naval vessels 7including major surface combatants and conventionally fueled ships71 including identification of any such benefits with respect to-- 7,a7 fuel cycle1 from mining of fuel to disposal of fuel waste2 7,b7 security of the fuel supply2 7,c7 power needs for advanced weapons and sensors2 7,d7 safety and operations1 waste handling and disposal1 and proliferation issues compared to uranium reactors2 7,e7 refueling and logistics2 7,f7 ship upgrades and retrofitting2 7,g7 manning levels2 7,h7 global range at flank speed1 greater forward presence1 and extended combat operations2 7,i7 power for advanced sensors and weapons1 including electromagnetic guns and lasers2 7,j7 survivability due to increased performance and reduced signatures2 7,k7 high-power density propulsion2 7,l7 operational tempo2 7,m7 operational effectiveness2 and 7,n7 estimated cost effectiveness2 and 7#b7 an analysis of the domestic supply chain of thorium1 including a description of-- 7,a7 domestic reserves2 7,b7 operational mines2 7,c7 separation and refinement capabilities2 and 7,d7 the ability for the domestic supply chain to meet the requirements of the ,department of ,defense for thorium4 7d7 ,submission to ,congress ,not later than ,december #ca1 #bjbj1 the ,secretary of ,defense shall submit to the congressional defense committees a report on the results of the assessment under subsection 7b74 7e7 ,congressional defense committees defined ,in this ,act1 the term congressional defense committees has the meaning given that term in section #aja7;a77#af7 of title #aj1 ,united ,states ,code4 #e4 ,limitation on ammonium perchlorate from foreign sources 7a7 ,limitation ,beginning not later than #ahj days after the date of the enactment of this ,act1 the ,secretary of ,defense shall ensure that any covered ammonium perchlorate is obtained from sources inside the ,united ,states4 7b7 ,covered ammonium perchlorate 7#a7 ,except as provided in paragraph 7#b71 the term covered ammonium perchlorate means any ammonium perchlorate 7or any sodium perchlorate used as a precursor to ammonium perchlorate7 that-- 7,a7 is incorporated into any item procured by the ,department of ,defense2 or 7,b7 is used to launch a national security payload into space4 7#b7 ,the term does not include ammonium perchlorate obtained from sources outside the ,united ,states for use in an air-to-air missile program and qualified for such use as of the date of the enactment of this ,act4 7c7 ,waiver ,the ,secretary of ,defense may waive the limitation in subsection 7a7 if the ,secretary makes a determination in writing that obtaining covered ammonium perchlorate from sources outside the ,united ,states is in the national security interests of the ,united ,states4 #f4 ,prohibition on sale of domestic rare earth mines 7a7 ,prohibition ,the ,committee on ,foreign ,investment in the ,united ,states shall not approve any foreign government-controlled transaction relating to a domestic rare earth facility if a party to such transaction is controlled by or acting on behalf of-- 7#a7 the ,people's ,republic of ,china2 or 7#b7 the ,russian ,federation4 7b7 ,certification ,before approving a foreign government-controlled transaction relating to a domestic rare earth facility1 the ,committee shall submit to ,congress a written certification that the transaction-- 7#a7 does not violate the prohibition under subsection 7a72 and 7#b7 will not compromise the national security of the ,united ,states4 7c7 ,definitions ,in this section3 7#a7 ,the term ,committee on ,foreign ,investment in the ,united ,states means the committee established under section #gba7k7 of the ,defense ,production ,act of #aiej 7#ej ,u4,s4,c4 #defe7k774 7#b7 ,the term domestic rare earth facility means any facility inside the ,united ,states at which rare earth elements are mined1 produced1 or processed1 regardless of whether such facility is operational4 7#c7 ,the term foreign government-controlled transaction has the meaning given the term in section #gba7;a7 of the ,defense ,production ,act of #aiej 7#ej ,u4,s4,c4 #defe7;a774