What This Bill Does
This bill requires the Secretary of Energy to create a federal funding program that gives money to private companies and groups to build or improve factories that process rare earth elements (special metals used in defense and technology) into finished products. The bill also establishes an international partnership fund to help secure rare earth supplies from countries that are allies of the United States.
##
Who It Affects
- Private companies and business partnerships that want to build or upgrade rare earth processing facilities
- The Department of Energy and other federal agencies involved in national security
- States and local governments offering business incentives
- Educational institutions providing workforce training
- International partner countries participating in the rare earth supply chain effort
- American workers in mining, manufacturing and technical fields
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Key Provisions
- The Secretary of Energy must establish a program to provide federal money to companies building or expanding rare earth processing facilities in the United States (Sec. 3(a)(1))
- Companies seeking federal funding must show they have received state or local business incentives, made commitments to worker training, secured partnerships with educational institutions, and have a plan to operate without additional federal money (Sec. 3(a)(2)(B))
- Federal funding for any single project must be at least $100,000,000 but cannot exceed $500,000,000, unless the Secretary and President certify a larger amount is necessary for national security (Sec. 3(a)(3)(C) and (D))
- Companies that receive federal money cannot enter into partnerships with foreign entities that raise national security concerns without Secretary approval, or the government can recover the full funding amount (Sec. 3(a)(5)(B))
- The Secretary of State must work with partner countries to establish a shared funding mechanism to develop secure rare earth supply chains, including research efforts and agreements to prevent foreign entities of concern from gaining control of facilities built with this funding (Sec. 4(b)(1) and (3))
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What Changes
If enacted, the bill creates a new federal funding opportunity for companies to build or expand domestic rare earth processing facilities. Companies that receive this funding must meet strict requirements including worker training commitments and restrictions on foreign business partnerships. The bill authorizes approximately $1.5 billion in 2024 and $200 million annually through 2028 for these programs. The government can recover funding if companies fail to meet project deadlines without acceptable reasons or if they engage in prohibited foreign partnerships. A new international partnership fund is also created to coordinate with allied countries on rare earth supply chain security.
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Important Definitions
- **Rare earth elements**: Natural metals including scandium, yttrium, and 15 other specific metallic elements used in advanced technology
- **Metallurgy**: The process of producing finished rare earth products from purified rare earth elements
- **Covered facility**: A factory located in a U.S. state that processes rare earth elements into finished products
- **Finished rare earth products**: Products made from significant quantities of rare earth elements, including metals, alloys and permanent magnets
- **Foreign entity of concern**: A foreign government, organization or person that poses a national security risk, including entities involved in espionage, terrorism, or controlled by hostile governments
- **Covered entity**: A private company, group of companies, or mixed public-private partnership able to build or upgrade a rare earth processing facility
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Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 44
To require the Secretary of Energy to establish a program to incentivize
investment in facilities that carry out the metallurgy of rare earth ele-
ments and the production of finished rare earth products, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
JANUARY 24 (legislative day, JANUARY 3), 2023
Mr. RUBIO introduced the following bill; which was read twice and referred
to the Committee on Energy and Natural Resources
A BILL
To require the Secretary of Energy to establish a program
to incentivize investment in facilities that carry out the
metallurgy of rare earth elements and the production
of finished rare earth products, 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 ‘‘Obtaining National
4
and Secure Homeland Operations for Rare Earth Manu-
5
facturing Act of 2023’’ or the ‘‘ONSHORE Manufac-
6
turing Act of 2023’’.
7
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SEC. 2. DEFINITIONS.
1
In this Act:
2
(1)
APPROPRIATE
COMMITTEES
OF
CON-
3
GRESS.—The term ‘‘appropriate committees of Con-
4
gress’’ means—
5
(A) the Select Committee on Intelligence,
6
the Committee on Energy and Natural Re-
7
sources, the Committee on Commerce, Science,
8
and Transportation, the Committee on Foreign
9
Relations, the Committee on Armed Services,
10
the Committee on Appropriations, the Com-
11
mittee on Banking, Housing, and Urban Af-
12
fairs, the Committee on Homeland Security and
13
Governmental Affairs, and the Committee on
14
Finance of the Senate; and
15
(B) the Permanent Select Committee on
16
Intelligence, the Committee on Energy and
17
Commerce, the Committee on Foreign Affairs,
18
the Committee on Armed Services, the Com-
19
mittee on Science, Space, and Technology, the
20
Committee on Appropriations, the Committee
21
on Financial Services, the Committee on Home-
22
land Security, and the Committee on Ways and
23
Means of the House of Representatives.
24
(2) COVERED ENTITY.—The term ‘‘covered en-
25
tity’’ means a private entity, a consortium of private
26
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•S 44 IS
entities, or a consortium of public and private enti-
1
ties with a demonstrated ability to substantially fi-
2
nance, construct, expand, or technologically upgrade
3
a covered facility.
4
(3) COVERED
FACILITY.—The term ‘‘covered
5
facility’’ means a facility located in a State that car-
6
ries out the metallurgy of rare earth elements for
7
the production of finished rare earth products.
8
(4) COVERED INCENTIVE.—The term ‘‘covered
9
incentive’’ means—
10
(A) an incentive offered by a Federal,
11
State, local, or Tribal governmental entity to a
12
covered entity for the purposes of—
13
(i) constructing within the jurisdiction
14
of the governmental entity a covered facil-
15
ity; or
16
(ii) expanding or technologically up-
17
grading an existing facility within that ju-
18
risdiction to be a covered facility; and
19
(B) a workforce-related incentive (includ-
20
ing a grant agreement relating to workforce
21
training or vocational education), any conces-
22
sion with respect to real property, funding for
23
research and development with respect to rare
24
earth elements and finished rare earth prod-
25
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ucts, and any other incentive determined appro-
1
priate by the Secretary, in consultation with the
2
Secretary of State.
3
(5) FINISHED
RARE
EARTH
PRODUCT.—The
4
term ‘‘finished rare earth product’’ means a product
5
composed of significant quantities of rare earth ele-
6
ments, including—
7
(A) metals;
8
(B) alloys; and
9
(C) permanent magnets.
10
(6) FOREIGN ENTITY.—
11
(A) IN GENERAL.—The term ‘‘foreign enti-
12
ty’’ means—
13
(i) a government of a foreign country
14
and a foreign political party;
15
(ii) a natural person who is not—
16
(I) a lawful permanent resident
17
of the United States;
18
(II) a citizen or national of the
19
United States; or
20
(III) any other protected indi-
21
vidual
(as
defined
in
section
22
274B(a)(3) of the Immigration and
23
Nationality
Act
(8
U.S.C.
24
1324b(a)(3))); and
25
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•S 44 IS
(iii) a partnership, association, cor-
1
poration, organization, or other combina-
2
tion of persons organized under the laws of
3
or having its principal place of business in
4
a foreign country.
5
(B) INCLUSIONS.—The term ‘‘foreign enti-
6
ty’’ includes—
7
(i) any person owned by, controlled
8
by, or subject to the jurisdiction or direc-
9
tion of an entity described in subparagraph
10
(A);
11
(ii) any person, wherever located, who
12
acts as an agent, representative, or em-
13
ployee of an entity described in subpara-
14
graph (A);
15
(iii) any person who acts in any other
16
capacity at the order, request, or under the
17
influence, direction, or control, of—
18
(I) an entity described in sub-
19
paragraph (A); or
20
(II) a person the activities of
21
which are directly or indirectly super-
22
vised, directed, controlled, financed, or
23
subsidized in whole or in majority
24
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•S 44 IS
part by an entity described in sub-
1
paragraph (A);
2
(iv) any person who directly or indi-
3
rectly through any contract, arrangement,
4
understanding, relationship, or otherwise,
5
owns 25 percent or more of the equity in-
6
terests of an entity described in subpara-
7
graph (A);
8
(v) any person with significant re-
9
sponsibility to control, manage, or direct
10
an entity described in subparagraph (A);
11
(vi) any person, wherever located, who
12
is a citizen or resident of a country con-
13
trolled by an entity described in subpara-
14
graph (A); and
15
(vii) any corporation, partnership, as-
16
sociation, or other organization organized
17
under the laws of a country controlled by
18
an entity described in subparagraph (A).
19
(7) FOREIGN ENTITY OF CONCERN.—
20
(A) IN GENERAL.—The term ‘‘foreign enti-
21
ty of concern’’ means any foreign entity that
22
is—
23
(i) designated as a foreign terrorist
24
organization by the Secretary of State
25
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•S 44 IS
under section 219 of the Immigration and
1
Nationality Act (8 U.S.C. 1189);
2
(ii) included on the list of specially
3
designated nationals and blocked persons
4
maintained by the Office of Foreign Assets
5
Control of the Department of the Treas-
6
ury;
7
(iii) owned by, controlled by, or sub-
8
ject to the jurisdiction, direction, or other-
9
wise under the undue influence of a gov-
10
ernment of a covered nation (as defined in
11
section 4872(d) of title 10, United States
12
Code);
13
(iv) alleged by the Attorney General
14
to have been involved in activities for
15
which a conviction was obtained under—
16
(I) chapter 37 of title 18, United
17
States Code (commonly known as the
18
‘‘Espionage Act’’);
19
(II) section 951 or 1030 of title
20
18, United States Code;
21
(III) chapter 90 of title 18,
22
United States Code (commonly known
23
as the ‘‘Economic Espionage Act of
24
1996’’);
25
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•S 44 IS
(IV) the Arms Export Control
1
Act (22 U.S.C. 2751 et seq.);
2
(V) section 224, 225, 226, 227,
3
or 236 of the Atomic Energy Act of
4
1954 (42 U.S.C. 2274–2278; 2284);
5
(VI) the Export Control Reform
6
Act of 2018 (50 U.S.C. 4801 et seq.);
7
or
8
(VII) the International Emer-
9
gency Economic Powers Act (50
10
U.S.C. 1701 et seq.); or
11
(v) determined by the Secretary, in
12
consultation with the Secretary of Defense
13
and the Director of National Intelligence,
14
to be engaged in unauthorized conduct
15
that is detrimental to the national security
16
or foreign policy of the United States
17
under this Act.
18
(B) EXCLUSION.—The term ‘‘foreign enti-
19
ty of concern’’ does not include any entity with
20
respect to which 1 or more foreign entities de-
21
scribed in subparagraph (A) owns less than 10
22
percent of the equity interest.
23
(8) GOVERNMENTAL ENTITY.—The term ‘‘gov-
24
ernmental entity’’ means—
25
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•S 44 IS
(A) a State; and
1
(B) a local government of a State.
2
(9) INTELLIGENCE
COMMUNITY.—The term
3
‘‘intelligence community’’ has the meaning given the
4
term in section 3 of the National Security Act of
5
1947 (50 U.S.C. 3003).
6
(10) METALLURGY.—The term ‘‘metallurgy’’
7
means the process of producing finished rare earth
8
products from purified rare earth elements.
9
(11) MINERALS SECURITY PARTNERSHIP.—The
10
term ‘‘Minerals Security Partnership’’ means the
11
Minerals Security Partnership established in June
12
2022.
13
(12) PERSON.—The term ‘‘person’’ includes an
14
individual, partnership, association, corporation, or-
15
ganization, or any other combination of individuals.
16
(13) PRIVATE
CAPITAL.—The term ‘‘private
17
capital’’ has the meaning given the term in section
18
103 of the Small Business Investment Act of 1958
19
(15 U.S.C. 662).
20
(14) RARE EARTH ELEMENT.—The term ‘‘rare
21
earth element’’ means a natural element associated
22
with—
23
(A) the metallic element scandium, with
24
atomic number 21;
25
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•S 44 IS
(B) the metallic element yttrium, with
1
atomic number 39; or
2
(C) any of the series of 15 metallic ele-
3
ments between lanthanum, with atomic number
4
57, and lutetium, with atomic number 71, on
5
the periodic table.
6
(15)
SECRETARY.—The
term
‘‘Secretary’’
7
means the Secretary of Energy.
8
(16) STATE.—The term ‘‘State’’ means—
9
(A) each of the several States of the
10
United States;
11
(B) the District of Columbia;
12
(C) the Commonwealth of Puerto Rico;
13
(D) Guam;
14
(E) American Samoa;
15
(F) the Commonwealth of the Northern
16
Mariana Islands;
17
(G) the Federated States of Micronesia;
18
(H) the Republic of the Marshall Islands;
19
(I) the Republic of Palau; and
20
(J) the United States Virgin Islands.
21
SEC. 3. RARE EARTH METALLURGY FINANCING.
22
(a) FINANCIAL ASSISTANCE PROGRAM.—
23
(1) IN GENERAL.—The Secretary shall establish
24
in the Department of Energy a program to provide
25
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•S 44 IS
Federal financial assistance to covered entities to
1
incentivize investment in covered facilities, subject to
2
the availability of appropriations for that purpose.
3
(2) PROCEDURE.—
4
(A) IN GENERAL.—A covered entity seek-
5
ing financial assistance under this subsection
6
shall submit to the Secretary an application
7
that describes the project for which the covered
8
entity is seeking financial assistance.
9
(B) ELIGIBILITY.—In order for a covered
10
entity to qualify for financial assistance under
11
this subsection, the covered entity shall dem-
12
onstrate to the Secretary, in the application
13
submitted by the covered entity under subpara-
14
graph (A), that—
15
(i) the covered entity has a docu-
16
mented interest in—
17
(I) constructing a covered facil-
18
ity; or
19
(II) expanding or technologically
20
upgrading a facility owned by the cov-
21
ered entity to be a covered facility;
22
and
23
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•S 44 IS
(ii) with respect to the project for
1
which the covered entity is seeking finan-
2
cial assistance, the covered entity has—
3
(I) been offered a covered incen-
4
tive;
5
(II) made commitments to work-
6
er and community investment, includ-
7
ing through—
8
(aa) training and education
9
benefits paid by the covered enti-
10
ty; and
11
(bb) programs to expand
12
employment opportunity for eco-
13
nomically disadvantaged individ-
14
uals;
15
(III) secured commitments from
16
regional educational and training enti-
17
ties and institutions of higher edu-
18
cation to provide workforce training,
19
including programming for training
20
and job placement of economically dis-
21
advantaged individuals; and
22
(IV) an executable plan to sus-
23
tain a covered facility without addi-
24
tional Federal financial assistance
25
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•S 44 IS
under this subsection for facility sup-
1
port.
2
(C) APPLICATION REVIEW.—
3
(i) IN GENERAL.—The Secretary may
4
not approve an application submitted by a
5
covered entity under subparagraph (A)—
6
(I) unless the Secretary—
7
(aa) confirms that the cov-
8
ered entity has satisfied the eligi-
9
bility criteria under subpara-
10
graph (B);
11
(bb) determines that the
12
project for which the covered en-
13
tity is seeking financial assist-
14
ance is in the interest of the
15
United States; and
16
(cc) has notified the appro-
17
priate committees of Congress
18
not later than 15 days before
19
making any commitment to pro-
20
vide an award of financial assist-
21
ance to any covered entity in an
22
amount
that
exceeds
23
$10,000,000; or
24
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•S 44 IS
(II) if the Secretary determines,
1
in consultation with the Director of
2
National Intelligence, that the covered
3
entity is a foreign entity of concern.
4
(ii) CONSIDERATION.—In reviewing
5
an application submitted by a covered enti-
6
ty under subparagraph (A), the Secretary
7
may consider whether—
8
(I) the covered entity has pre-
9
viously received financial assistance
10
under this subsection;
11
(II) the governmental entity of-
12
fering the applicable covered incentive
13
has ben
[Text truncated for display. Full text available on Congress.gov.]