RE-Coop 21st Century Manufacturing Act

I 116TH CONGRESS 1ST SESSION H. R. 4410 To provide for the establishment of the Thorium-Bearing Rare Earth Refinery Cooperative, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 19, 2019 Mr. TIPTON (for himself, Mr. GOSAR, Mr. SMITH of Missouri, Mr. STEWART, Mr. MCKINLEY, and Mr. YOHO) introduced the following bill; which was referred to the Committee on Armed Services, and in addition to the Committee on Energy and Commerce, for a period to be subsequently de- termined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To provide for the establishment of the Thorium-Bearing Rare Earth Refinery Cooperative, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Rare Earth Coopera- 4 tive 21st Century Manufacturing Act’’ or the ‘‘RE-Coop 5 21st Century Manufacturing Act’’. 6 SEC. 2. FINDINGS; STATEMENT OF POLICY. 7 (a) FINDINGS.—Congress finds the following: 8 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 2 •HR 4410 IH (1) Rare earth elements are critical for ad- 1 vanced energy technologies, national defense, and 2 other commercial and industrial applications. 3 (2) The People’s Republic of China (referred to 4 in this subsection as ‘‘China’’) has leveraged its mo- 5 nopoly control over the rare earth value chain to 6 force corporations from the United States, Europe, 7 Japan, and South Korea to transfer manufacturing 8 facilities, technology, and jobs to China in exchange 9 for secure supply contracts. 10 (3) The increasingly aggressive mercantile be- 11 havior of China has led to involuntary transfers of 12 technology, manufacturing, and jobs, which has re- 13 sulted in onerous trade imbalances with the United 14 States and trading partners of the United States. 15 (4) The Comptroller General of the United 16 States has confirmed that the monopoly control of 17 China over the rare earth value chain has resulted 18 in vulnerabilities in the procurement of multiple 19 United States weapons systems. 20 (5) Direct links exist between rare earth min- 21 eralogy and thorium. 22 (6) Thorium is a radioactive element commonly 23 associated with the lanthanide elements in most rare 24 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 3 •HR 4410 IH earth deposits located in the United States and else- 1 where. 2 (7) Regulations regarding thorium represent a 3 barrier to the development of a rare earth industry 4 that is based in the United States. 5 (8) Meeting the strategic national interest ob- 6 jectives of the United States and economic and envi- 7 ronmental goals are best achieved through the cre- 8 ation of a rare earth cooperative. 9 (9) A rare earth cooperative could— 10 (A) greatly increase the production of rare 11 earth elements; 12 (B) ensure environmental safety; and 13 (C) lower the cost of the production and fi- 14 nancial risks faced by rare earth producers in 15 the United States. 16 (10) Historically, agricultural and electric co- 17 operatives have stood as one of the greatest success 18 stories of the United States. 19 (b) STATEMENT OF POLICY.—It is the policy of the 20 United States to advance domestic refining of rare earth 21 elements and the safe storage of thorium in anticipation 22 of the potential future industrial uses of thorium, includ- 23 ing energy, because— 24 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 4 •HR 4410 IH (1) thorium has a mineralogical association 1 with valuable rare earth elements; 2 (2) there is a great need to develop domestic re- 3 fining capacity to process domestic rare earth ele- 4 ment deposits; and 5 (3) the economy of the United States would 6 benefit from the rapid development and control of 7 intellectual property relating to the commercial de- 8 velopment of technology utilizing thorium. 9 SEC. 3. DEFINITIONS. 10 In this Act: 11 (1) ACTINIDE.—The term ‘‘actinide’’ means a 12 natural element associated with any of the series of 13 15 metallic elements between actinium, with atomic 14 number 89, and lawrencium, with atomic number 15 103, on the periodic table. 16 (2) COOPERATIVE.—The term ‘‘Cooperative’’ 17 means the Thorium-Bearing Rare Earth Refinery 18 Cooperative established under section 4(a). 19 (3) CORPORATION.—The term ‘‘Corporation’’ 20 means the Thorium Storage, Energy, and Industrial 21 Products Corporation established under section 5(a). 22 (4) NATIONAL LABORATORY.—The term ‘‘Na- 23 tional Laboratory’’ has the meaning given the term 24 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 5 •HR 4410 IH in section 2 of the Energy Policy Act of 2005 (42 1 U.S.C. 15801). 2 (5) RARE EARTH ELEMENT.—The term ‘‘rare 3 earth element’’ means a natural element associated 4 with— 5 (A) the metallic element scandium, with 6 atomic number 21, or yttrium, with atomic 7 number 39; 8 (B) any of the series of 15 metallic ele- 9 ments between lanthanum, with atomic number 10 57, and lutetium, with atomic number 71, on 11 the periodic table; or 12 (C) any of the series of 15 metallic ele- 13 ments between actinium, with atomic number 14 89, and lawrencium, with atomic number 103, 15 on the periodic table. 16 SEC. 4. RARE EARTH REFINERY COOPERATIVE. 17 (a) ESTABLISHMENT.—Not later than 60 days after 18 the date of enactment of this Act, the Secretary of Com- 19 merce shall coordinate with any relevant Federal agencies 20 to procure the issuance of a Federal charter for a privately 21 funded, privately operated, and privately managed cooper- 22 ative with respect to rare earth elements, which— 23 (1) shall— 24 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 6 •HR 4410 IH (A) be known as the Thorium-Bearing 1 Rare Earth Refinery Cooperative; 2 (B) coordinate the establishment of a fully 3 integrated United States value chain with re- 4 spect to rare earth elements to serve the na- 5 tional security needs of the United States and 6 the needs of industry in the United States; and 7 (C) produce products that use rare earth 8 elements, including metal powders (such as rare 9 earth oxides and rare earth salts, including 10 chlorides and nitrates), metals containing rare 11 earth elements, alloys, magnets, and other 12 value-added products using rare earth elements, 13 as required by— 14 (i) the owners of, and investors in, the 15 Cooperative; and 16 (ii) the defense industry of the United 17 States; and 18 (2) may— 19 (A) accept domestic and international in- 20 vestment from— 21 (i) commercial or industrial users of 22 products containing rare earth elements, 23 including trade groups or associations 24 formed to act on behalf of the defense in- 25 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 7 •HR 4410 IH dustry or other end-users of those prod- 1 ucts; or 2 (ii) any of the resource suppliers of 3 the Cooperative; 4 (B) accept investment or funding from for- 5 eign governments, State agencies, or State- 6 sponsored entities, including universities or re- 7 search institutions, subject to the approval of 8 the Committee on Foreign Investment in the 9 United States established under section 721(k) 10 of the Defense Production Act of 1950 (50 11 U.S.C. 4565(k)); 12 (C) distribute finished goods and profits in 13 proportion to investment; 14 (D) on behalf of the owners of the Cooper- 15 ative, sell surplus finished goods on the open 16 market; and 17 (E) accept and process rare earth re- 18 sources, or other critical minerals, with elevated 19 levels of thorium or uranium that are— 20 (i) mined in the United States; 21 (ii) from any domestic waste product, 22 co-product, or byproduct of some other 23 mined commodity; or 24 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 8 •HR 4410 IH (iii) produced by any foreign supplier 1 that has invested in the Cooperative. 2 (b) SECURING RARE EARTHS.—The following mate- 3 rials shall be considered to be an unrefined and unproc- 4 essed ore, as defined in section 40.4 of title 10, Code of 5 Federal Regulations, or any successor regulation: 6 (1) Any material accepted by the Cooperative 7 under subsection (a)(2)(E). 8 (2) A thorium bearing rare earth ore that is— 9 (A) a byproduct or coproduct of another 10 mined commodity; and 11 (B) sold and shipped under a supply agree- 12 ment with the Cooperative. 13 (c) PRODUCERS OF RARE EARTHS.—A producer that 14 acts under a supply contract with the Cooperative may, 15 under the rules for unrefined and unprocessed ore under 16 part 40 of title 10, Code of Federal Regulations, process, 17 manage, and transport any material with respect to which 18 the contract applies. 19 (d) LIABILITY.—Notwithstanding any other provision 20 of law or regulation— 21 (1) the Federal Government shall not be liable 22 for any activities of the Cooperative under this sec- 23 tion; and 24 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 9 •HR 4410 IH (2) the Cooperative shall establish and secure 1 sufficient financial surety bonding and other insur- 2 ance, consistent with private industry standards. 3 SEC. 5. THORIUM STORAGE, ENERGY, AND INDUSTRIAL 4 PRODUCTS CORPORATION. 5 (a) ESTABLISHMENT.—Not later than 60 days after 6 the date of enactment of this Act, the Secretary of Energy 7 shall coordinate with relevant Federal agencies to procure 8 the issuance of a Federal charter for a privately funded 9 and privately operated corporation, which— 10 (1) shall be known as the Thorium Storage, 11 Energy, and Industrial Products Corporation; and 12 (2) in accordance with all applicable laws, regu- 13 lations, and rules, shall— 14 (A) on a preprocessing basis, assume liabil- 15 ity for and ownership of all thorium and 16 mineralogically associated or related actinides 17 and decay products contained within the rare 18 earth element ores utilized by the Cooperative; 19 (B) take physical possession and safely 20 store all thorium-containing actinide byprod- 21 ucts, with the costs of the storage to be paid by 22 the Cooperative; and 23 (C) manage the sale of all valuable actinide 24 and decay products, utilizing the proceeds for 25 VerDate Sep 11 2014 04:19 Sep 26, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 10 •HR 4410 IH the development of commercial uses and market 1 for thorium, including energy. 2 (b) THORIUM STORAGE.—The Corporation shall es- 3 tablish not less than 1 facility, each of which shall— 4 (1) be known as a ‘‘Thorium Bank’’; 5 (2) provide safe and long-term storage for all 6 thorium produced as a byproduct in the production 7 of rare earth elements for the Cooperative; and 8 (3) hold and maintain financial surety bonding 9 and insurance consistent with private industry 10 standards. 11 (c) INDUSTRIAL PRODUCTS.—The Corporation may 12 establish not less than 1 division, each of which shall be 13 known as an ‘‘Industrial Products Corporation’’, for the 14 certification, licensing, insuring, and commercial develop- 15 ment of all nonenergy uses for thorium (including thorium 16 isotopes and thorium daughter elements), including alloys, 17 catalysts, medical isotopes, and other products. 18 (d) ENERGY APPLICATIONS.—The Corporation may 19 establish not less than 1 energy products, energy systems, 20 or energy applications division for the certification, licens- 21 ing, insuring, commercial development, deployment, lease, 22 and licensing of such products and services, including— 23 (1) developing intellectual property; 24 (2) acquiring technology; 25 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 11 •HR 4410 IH (3) developing, manufacturing, operating, or 1 leasing commercial thorium energy systems; and 2 (4) developing, manufacturing, operating, or 3 leasing related thermal processing systems. 4 (e) INTERNATIONAL PARTNERSHIPS.— 5 (1) IN GENERAL.—The Corporation may sell or 6 distribute equity and establish partnerships with the 7 United States. 8 (2) FOREIGN INVESTORS.—Any foreign investor 9 in the Corporation shall make a voluntary filing with 10 the Committee on Foreign Investment in the United 11 States established under section 721(k) of the De- 12 fense Production Act of 1950 (50 U.S.C. 4565(k)). 13 (f) LIABILITY.—Notwithstanding any other provision 14 of law or regulation— 15 (1) the Federal Government shall not be liable 16 for any activities of the Corporation under this sec- 17 tion; and 18 (2) the Corporation shall establish and secure 19 sufficient financial surety bonding and other insur- 20 ance, consistent with private industry standards, for 21 the management and storage of radioactive materials 22 and other waste and hazards. 23 VerDate Sep 11 2014 02:00 Sep 21, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4410.IH H4410 kjohnson on DSK79L0C42 with BILLS 12 •HR 4410 IH SEC. 6. FEDERAL SUPPORT. 1 (a) MEETINGS WITH RELEVANT PARTIES.—The Sec- 2 retary of Commerce and the Secretary of Defense shall 3 provide initial assistance to the Cooperative, and the Sec- 4 retary of Energy and the Secretary of Defense shall pro- 5 vide initial assistance to the Corporation, by establishing 6 peer-to-peer meetings with allies of the United States in 7 the North Atlantic Treaty Organization, other allied for- 8 eign governments, Federal and State agencies, science and 9 technology research institutions, and commercial users 10 and consumers of rare earth elements and energy. 11 (b) ELIGIBILITY FOR CERTAIN SUPPORT.— 12 (1) GRANT AND LOAN PROGRAMS.—The Coop- 13 erative and the Corporation may apply for funding 14 assistance provided by any relevant grant or loan 15 program carried out by the Department of Energy, 16 the Department of Defense, or the Department of 17 Commerce, including, with respect to the Corpora- 18 tion— 19 (A) the Small Modular Reactor Licensing 20 Technical Support [Text truncated for display. 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