I 118TH CONGRESS 1ST SESSION H. R. 2888 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 HOUSE OF REPRESENTATIVES APRIL 26, 2023 Mr. TONY GONZALES of Texas introduced the following bill; which was re- ferred to the Committee on Energy and Commerce, and in addition to the Committees on Foreign Affairs, Education and the Workforce, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 2888 IH facturing Act of 2023’’ or the ‘‘ONSHORE Manufac- 1 turing Act of 2023’’. 2 SEC. 2. DEFINITIONS. 3 In this Act: 4 (1) APPROPRIATE COMMITTEES OF CON- 5 GRESS.—The term ‘‘appropriate committees of Con- 6 gress’’ means— 7 (A) the Select Committee on Intelligence, 8 the Committee on Energy and Natural Re- 9 sources, the Committee on Commerce, Science, 10 and Transportation, the Committee on Foreign 11 Relations, the Committee on Armed Services, 12 the Committee on Appropriations, the Com- 13 mittee on Banking, Housing, and Urban Af- 14 fairs, the Committee on Homeland Security and 15 Governmental Affairs, and the Committee on 16 Finance of the Senate; and 17 (B) the Permanent Select Committee on 18 Intelligence, the Committee on Energy and 19 Commerce, the Committee on Foreign Affairs, 20 the Committee on Armed Services, the Com- 21 mittee on Science, Space, and Technology, the 22 Committee on Appropriations, the Committee 23 on Financial Services, the Committee on Home- 24 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 2888 IH land Security, and the Committee on Ways and 1 Means of the House of Representatives. 2 (2) COVERED ENTITY.—The term ‘‘covered en- 3 tity’’ means a private entity, a consortium of private 4 entities, or a consortium of public and private enti- 5 ties with a demonstrated ability to substantially fi- 6 nance, construct, expand, or technologically upgrade 7 a covered facility. 8 (3) COVERED FACILITY.—The term ‘‘covered 9 facility’’ means a facility located in a State that car- 10 ries out the metallurgy of rare earth elements for 11 the production of finished rare earth products. 12 (4) COVERED INCENTIVE.—The term ‘‘covered 13 incentive’’ means— 14 (A) an incentive offered by a Federal, 15 State, local, or Tribal governmental entity to a 16 covered entity for the purposes of— 17 (i) constructing within the jurisdiction 18 of the governmental entity a covered facil- 19 ity; or 20 (ii) expanding or technologically up- 21 grading an existing facility within that ju- 22 risdiction to be a covered facility; and 23 (B) a workforce-related incentive (includ- 24 ing a grant agreement relating to workforce 25 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 2888 IH training or vocational education), any conces- 1 sion with respect to real property, funding for 2 research and development with respect to rare 3 earth elements and finished rare earth prod- 4 ucts, and any other incentive determined appro- 5 priate by the Secretary, in consultation with the 6 Secretary of State. 7 (5) FINISHED RARE EARTH PRODUCT.—The 8 term ‘‘finished rare earth product’’ means a product 9 composed of significant quantities of rare earth ele- 10 ments, including— 11 (A) metals; 12 (B) alloys; and 13 (C) permanent magnets. 14 (6) FOREIGN ENTITY.— 15 (A) IN GENERAL.—The term ‘‘foreign enti- 16 ty’’ means— 17 (i) a government of a foreign country 18 and a foreign political party; 19 (ii) a natural person who is not— 20 (I) a lawful permanent resident 21 of the United States; 22 (II) a citizen or national of the 23 United States; or 24 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 2888 IH (III) any other protected indi- 1 vidual (as defined in section 2 274B(a)(3) of the Immigration and 3 Nationality Act (8 U.S.C. 4 1324b(a)(3))); and 5 (iii) a partnership, association, cor- 6 poration, organization, or other combina- 7 tion of persons organized under the laws of 8 or having its principal place of business in 9 a foreign country. 10 (B) INCLUSIONS.—The term ‘‘foreign enti- 11 ty’’ includes— 12 (i) any person owned by, controlled 13 by, or subject to the jurisdiction or direc- 14 tion of an entity described in subparagraph 15 (A); 16 (ii) any person, wherever located, who 17 acts as an agent, representative, or em- 18 ployee of an entity described in subpara- 19 graph (A); 20 (iii) any person who acts in any other 21 capacity at the order, request, or under the 22 influence, direction, or control, of— 23 (I) an entity described in sub- 24 paragraph (A); or 25 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 2888 IH (II) a person the activities of 1 which are directly or indirectly super- 2 vised, directed, controlled, financed, or 3 subsidized in whole or in majority 4 part by an entity described in sub- 5 paragraph (A); 6 (iv) any person who directly or indi- 7 rectly through any contract, arrangement, 8 understanding, relationship, or otherwise, 9 owns 25 percent or more of the equity in- 10 terests of an entity described in subpara- 11 graph (A); 12 (v) any person with significant re- 13 sponsibility to control, manage, or direct 14 an entity described in subparagraph (A); 15 (vi) any person, wherever located, who 16 is a citizen or resident of a country con- 17 trolled by an entity described in subpara- 18 graph (A); and 19 (vii) any corporation, partnership, as- 20 sociation, or other organization organized 21 under the laws of a country controlled by 22 an entity described in subparagraph (A). 23 (7) FOREIGN ENTITY OF CONCERN.— 24 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 2888 IH (A) IN GENERAL.—The term ‘‘foreign enti- 1 ty of concern’’ means any foreign entity that 2 is— 3 (i) designated as a foreign terrorist 4 organization by the Secretary of State 5 under section 219 of the Immigration and 6 Nationality Act (8 U.S.C. 1189); 7 (ii) included on the list of specially 8 designated nationals and blocked persons 9 maintained by the Office of Foreign Assets 10 Control of the Department of the Treas- 11 ury; 12 (iii) owned by, controlled by, or sub- 13 ject to the jurisdiction, direction, or other- 14 wise under the undue influence of a gov- 15 ernment of a covered nation (as defined in 16 section 4872(d) of title 10, United States 17 Code); 18 (iv) alleged by the Attorney General 19 to have been involved in activities for 20 which a conviction was obtained under— 21 (I) chapter 37 of title 18, United 22 States Code (commonly known as the 23 ‘‘Espionage Act’’); 24 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 2888 IH (II) section 951 or 1030 of title 1 18, United States Code; 2 (III) chapter 90 of title 18, 3 United States Code (commonly known 4 as the ‘‘Economic Espionage Act of 5 1996’’); 6 (IV) the Arms Export Control 7 Act (22 U.S.C. 2751 et seq.); 8 (V) section 224, 225, 226, 227, 9 or 236 of the Atomic Energy Act of 10 1954 (42 U.S.C. 2274–2278; 2284); 11 (VI) the Export Control Reform 12 Act of 2018 (50 U.S.C. 4801 et seq.); 13 or 14 (VII) the International Emer- 15 gency Economic Powers Act (50 16 U.S.C. 1701 et seq.); or 17 (v) determined by the Secretary, in 18 consultation with the Secretary of Defense 19 and the Director of National Intelligence, 20 to be engaged in unauthorized conduct 21 that is detrimental to the national security 22 or foreign policy of the United States 23 under this Act. 24 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 2888 IH (B) EXCLUSION.—The term ‘‘foreign enti- 1 ty of concern’’ does not include any entity with 2 respect to which 1 or more foreign entities de- 3 scribed in subparagraph (A) owns less than 10 4 percent of the equity interest. 5 (8) GOVERNMENTAL ENTITY.—The term ‘‘gov- 6 ernmental entity’’ means— 7 (A) a State; and 8 (B) a local government of a State. 9 (9) INTELLIGENCE COMMUNITY.—The term 10 ‘‘intelligence community’’ has the meaning given the 11 term in section 3 of the National Security Act of 12 1947 (50 U.S.C. 3003). 13 (10) METALLURGY.—The term ‘‘metallurgy’’ 14 means the process of producing finished rare earth 15 products from purified rare earth elements. 16 (11) MINERALS SECURITY PARTNERSHIP.—The 17 term ‘‘Minerals Security Partnership’’ means the 18 Minerals Security Partnership established in June 19 2022. 20 (12) PERSON.—The term ‘‘person’’ includes an 21 individual, partnership, association, corporation, or- 22 ganization, or any other combination of individuals. 23 (13) PRIVATE CAPITAL.—The term ‘‘private 24 capital’’ has the meaning given the term in section 25 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 2888 IH 103 of the Small Business Investment Act of 1958 1 (15 U.S.C. 662). 2 (14) RARE EARTH ELEMENT.—The term ‘‘rare 3 earth element’’ means a natural element associated 4 with— 5 (A) the metallic element scandium, with 6 atomic number 21; 7 (B) the metallic element yttrium, with 8 atomic number 39; or 9 (C) any of the series of 15 metallic ele- 10 ments between lanthanum, with atomic number 11 57, and lutetium, with atomic number 71, on 12 the periodic table. 13 (15) SECRETARY.—The term ‘‘Secretary’’ 14 means the Secretary of Energy. 15 (16) STATE.—The term ‘‘State’’ means— 16 (A) each of the several States of the 17 United States; 18 (B) the District of Columbia; 19 (C) the Commonwealth of Puerto Rico; 20 (D) Guam; 21 (E) American Samoa; 22 (F) the Commonwealth of the Northern 23 Mariana Islands; 24 (G) the Federated States of Micronesia; 25 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 2888 IH (H) the Republic of the Marshall Islands; 1 (I) the Republic of Palau; and 2 (J) the United States Virgin Islands. 3 SEC. 3. RARE EARTH METALLURGY FINANCING. 4 (a) FINANCIAL ASSISTANCE PROGRAM.— 5 (1) IN GENERAL.—The Secretary shall establish 6 in the Department of Energy a program to provide 7 Federal financial assistance to covered entities to 8 incentivize investment in covered facilities, subject to 9 the availability of appropriations for that purpose. 10 (2) PROCEDURE.— 11 (A) IN GENERAL.—A covered entity seek- 12 ing financial assistance under this subsection 13 shall submit to the Secretary an application 14 that describes the project for which the covered 15 entity is seeking financial assistance. 16 (B) ELIGIBILITY.—In order for a covered 17 entity to qualify for financial assistance under 18 this subsection, the covered entity shall dem- 19 onstrate to the Secretary, in the application 20 submitted by the covered entity under subpara- 21 graph (A), that— 22 (i) the covered entity has a docu- 23 mented interest in— 24 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 2888 IH (I) constructing a covered facil- 1 ity; or 2 (II) expanding or technologically 3 upgrading a facility owned by the cov- 4 ered entity to be a covered facility; 5 and 6 (ii) with respect to the project for 7 which the covered entity is seeking finan- 8 cial assistance, the covered entity has— 9 (I) been offered a covered incen- 10 tive; 11 (II) made commitments to work- 12 er and community investment, includ- 13 ing through— 14 (aa) training and education 15 benefits paid by the covered enti- 16 ty; and 17 (bb) programs to expand 18 employment opportunity for eco- 19 nomically disadvantaged individ- 20 uals; 21 (III) secured commitments from 22 regional educational and training enti- 23 ties and institutions of higher edu- 24 cation to provide workforce training, 25 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •HR 2888 IH including programming for training 1 and job placement of economically dis- 2 advantaged individuals; and 3 (IV) an executable plan to sus- 4 tain a covered facility without addi- 5 tional Federal financial assistance 6 under this subsection for facility sup- 7 port. 8 (C) APPLICATION REVIEW.— 9 (i) IN GENERAL.—The Secretary may 10 not approve an application submitted by a 11 covered entity under subparagraph (A)— 12 (I) unless the Secretary— 13 (aa) confirms that the cov- 14 ered entity has satisfied the eligi- 15 bility criteria under subpara- 16 graph (B); 17 (bb) determines that the 18 project for which the covered en- 19 tity is seeking financial assist- 20 ance is in the interest of the 21 United States; and 22 (cc) has notified the appro- 23 priate committees of Congress 24 not later than 15 days before 25 VerDate Sep 11 2014 02:41 May 05, 2023 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H2888.IH H2888 pbinns on DSKJLVW7X2PROD with $$_JOB 14 •HR 2888 IH making any commitment to pro- 1 vide an award of financial assist- 2 ance to any covered entity in an 3 amount that exceeds 4 $10,000,000; or 5 (II) if the Secretary determines, 6 in consultation with the Director of 7 National Intelligence, that the covered 8 entity is a foreign entity of concern. 9 (ii) CONSI [Text truncated for display. 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