Text: H.R.1388 — 112th Congress (2011-2012)All Bill Information (Except Text)

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Introduced in House (04/06/2011)


112th CONGRESS
1st Session
H. R. 1388

To reestablish a competitive domestic rare earths minerals production industry; a domestic rare earth processing, refining, purification, and metals production industry; a domestic rare earth metals alloying industry; and a domestic rare-earth-based magnet production industry and supply chain in the Defense Logistics Agency of the Department of Defense.


IN THE HOUSE OF REPRESENTATIVES
April 6, 2011

Mr. Coffman of Colorado (for himself, Mr. Peters, Mr. Latta, Mrs. Lummis, and Mrs. McMorris Rodgers) introduced the following bill; which was referred to the Committee on Science, Space, and Technology, and in addition to the Committees on Natural Resources and Armed 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 reestablish a competitive domestic rare earths minerals production industry; a domestic rare earth processing, refining, purification, and metals production industry; a domestic rare earth metals alloying industry; and a domestic rare-earth-based magnet production industry and supply chain in the Defense Logistics Agency of the Department of Defense.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title; table of contents.

(a) Short title.—This Act may be cited as the “Rare Earths Supply Chain Technology and Resources Transformation Act of 2011” or the “RESTART Act”.

(b) Table of contents.—The table of contents for this Act is as follows:


Sec. 1. Short title; table of contents.

Sec. 2. Findings.

Sec. 3. Actions to promote rare earth development.

Sec. 4. Requirement to establish executive agents for rare earth related matters.

Sec. 5. Rare earth materials loan guarantee program.

Sec. 6. Establishment of a rare earth alloy and magnet program.

Sec. 7. Rare earth materials program.

Sec. 8. Amendments to National Materials and Minerals Policy, Research and Development Act of 1980.

Sec. 9. Definitions.

SEC. 2. Findings.

Congress makes the following findings:

(1) Significant quantities of rare earths are used in the production of clean energy technologies, including advanced automotive propulsion batteries, electric motors, high-efficiency light bulbs, solar panels, and wind turbines. These technologies are used to advance the United States energy policy of reducing dependence on foreign oil and decreasing greenhouse gas emissions through expansion of cleaner sources of energy.

(2) Many modern defense technologies such as radar and sonar systems, precision-guided weapons, cruise missiles, and lasers cannot be built, as designed and specified, without the use of rare earths and materials produced from them.

(3) Rare earths also provide core functionality to a variety of high technology applications in computing, pollution abatement, power generation, water treatment, oil refining, metal alloying, communications, health care, agriculture, and other sectors.

(4) Though at least 40 percent of the world’s rare earth reserves are located within the United States and its ally nations, our country now depends upon imports for nearly 100 percent of its rare earth needs.

(5) Furthermore, the United States has limited rare earth production, remains nearly entirely dependent on overseas refineries for further elemental and alloy processing, and does not currently maintain a “strategic reserve” of rare earth compounds, metals, or alloys.

(6) By way of contrast, more than 97 percent of all rare earths for world consumption is produced in China. The ability—and willingness—of China to export these rare earths is eroding due to its growing domestic demand, its enforcement of environmental law on current producers, and its mandate to consolidate the industry by decreasing its number of mining permits. In fact, China has taken several steps recently that have caused significant market perturbations.

(7) For example, the Chinese Ministry of Industry and Information Technology draft rare earths plan for 2009 to 2015 proposed an immediate ban on the export of dysprosium, terbium, thulium, lutetium, and yttrium, the so-called “heavy” rare earths, and a restriction on the exports of all other, light, rare earth metals to a level well below that sufficient to satisfy the 2008 demand of Japan alone for such metals.

(8) More recently, in July 2010, China decreased their export quota allocations on rare earth oxides and metals by over 70 percent, causing price increases of threefold to eightfold and causing supply shortages of some materials.

(9) In September 2010, the Chinese Government reportedly restricted export of all rare earth oxide and metal to Japan over a diplomatic incident.

(10) Most recently, in October 2010, the Chinese Government reportedly restricted export of all rare earth oxide and metal to the United States and Europe, essentially cutting off the global community from supplies of rare earth material.

(11) Given that Chinese dominance of the rare earths market has adversely impacted the supply stability and endangers the United States and its allies’ assured access to key materials, rare earths should qualify as materials either strategic or critical to national security. As such, there is an urgent need to identify the current global market situation regarding rare earth materials, the strategic value placed on them by foreign nations including China, and the Department of Defense’s and domestic manufacturing industry’s supply-chain vulnerability related to rare earths and end items containing rare earths such as neodymium iron boron and other specialty magnets, and rare earth “doped” lasers.

(12) The United States Government should facilitate the reintroduction of a globally competitive non-Chinese rare earth industry with multiple sources of mining, processing, alloying, and manufacturing.

(13) This self-sufficiency requires an uninterrupted supply of strategic materials critical to national security and innovative commercial product development, including rare earths, to support the clean energy and defense supply chains.

(14) The United States currently cannot reclaim valuable rare earths and permanent magnets and such capability should be explored using appropriate research and development projects.

SEC. 3. Actions to promote rare earth development.

(a) Sense of Congress.—It is the sense of Congress that the United States should take any and all actions necessary to ensure the reintroduction of a competitive domestic and ally nation rare earth supply chain, to include the reintroduction of the capacity to conduct mining, refining/processing, alloying and manufacturing operations using domestic and ally nation suppliers to provide a secure source of rare earth materials as a vital component of national security and economic policy.

(b) Policy.—Each Federal agency shall take appropriate actions, to the extent consistent with applicable law, to expedite permitting and projects that will increase exploration for, and development of, domestic rare earths.

(c) Rare Earth Policy Task Force.—

(1) ESTABLISHMENT.—There is established within the Department of the Interior a task force to be known as the “Rare Earth Policy Task Force” (referred to in this section as the “Task Force”), which shall report to the President through the Secretary of the Interior.

(2) COMPOSITION.—The Task Force shall be composed of the following:

(A) The Secretary of the Interior (or a designee of such Secretary), who shall serve as chair of the Task Force.

(B) The Secretary of Energy (or a designee of such Secretary).

(C) The Secretary of Agriculture (or a designee of such Secretary).

(D) The Secretary of Defense (or a designee of such Secretary).

(E) The Secretary of Commerce (or a designee of such Secretary).

(F) The Secretary of State (or a designee of such Secretary).

(G) The Director of the Office of Management and Budget (or a designee of the Director).

(H) The Chairman of the Council on Environmental Quality (or a designee of the Chairman).

(I) Such other members as the Secretary of the Interior considers appropriate.

(d) Duties.—The Task Force shall—

(1) monitor and assist Federal agencies in expediting the review and approval of permits or other actions, as necessary, to accelerate the completion of projects that will increase investment in, exploration for, and development of domestic rare earths pursuant to the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701 et seq.), the Act of June 4, 1897 (commonly known as the “Organic Act of 1897” (16 U.S.C. 473–482, 551), the National Forest Management Act of 1976 (16 U.S.C. 1600 et seq.), and any other applicable statutory authorities related to domestic mining operations;

(2) assist Federal agencies in reviewing laws (including regulations) and policies that discourage investment in, exploration for, and development of domestic rare earths pursuant to Federal Land Policy and Management Act of 1976, the Act of June 4, 1897, the National Forest Management Act of 1976, and any other applicable statutory authorities related to domestic mining operations; and

(3) take such other actions to otherwise increase investment in, exploration for, and development of domestic rare earths as the Task Force considers appropriate.

(e) Annual reports.—At least once each year, the Task Force shall submit to the President, the Committee on Energy and Natural Resources of the Senate, the Committee on Energy and Commerce of the House of Representatives, and the Committee on Natural Resources of the House of Representatives a report setting forth the following:

(1) A description of the results of the coordinated and expedited review of permits or other actions to promote investment in, exploration for, and development of domestic rare earths, and an identification of the procedures and actions that have proven to be the most useful and appropriate in coordinating and expediting the review of projects that will increase investment in, exploration for, and development of domestic rare earths.

(2) An identification of the substantive and procedural requirements of Federal, State, tribal, and local laws (including regulations) and Executive orders that are inconsistent with, duplicative of, or structured so as to restrict effective implementation of the projects described in paragraph (1).

(3) Such recommendations as the Task Force considers appropriate to advance the policy set forth in subsection (b).

(f) Termination.—The Task Force shall terminate 10 years after the date of the enactment of this Act.

(g) Judicial review.—

(1) IN GENERAL.—Nothing in this section shall be construed to affect any judicial review of an agency action under any other provision of law.

(2) CONSTRUCTION.—This section—

(A) is intended to improve the internal management of the Federal Government; and

(B) does not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States (including an agency, instrumentality, officer, or employee of the United States) or any other person.

SEC. 4. Requirement to establish executive agents for rare earth related matters.

No later than 30 days after the enactment of this Act the Secretaries of Commerce, Defense, Energy, the Interior, and State shall each appoint an Executive Agent, at the Assistant Secretary level of each affected agency, to serve as a representative on an interagency working group for the purposes of reestablishing a competitive domestic rare earth supply chain.

SEC. 5. Rare earth materials loan guarantee program.

(a) Amendment.—Title XVII of the Energy Policy Act of 2005 (42 U.S.C. 16511 et seq.) is amended by adding at the end the following new section:

“SEC. 1706. Temporary program for rare earth materials revitalization.

“(a) In general.—The Secretary is authorized, only to the extent provided in advance in a subsequent appropriations act, to make guarantees under this title for the commercial application of new or significantly improved technologies (compared to technologies currently in use in the United States at the time the guarantee is issued) for the following categories of projects:

“(1) The separation and recovery of rare earth materials from ores or other sources.

“(2) The preparation of rare earth materials in oxide, metal, alloy, or other forms needed for national security, economic well-being, or industrial production purposes.

“(3) The application of rare earth materials in the production of improved—

“(A) magnets;

“(B) batteries;

“(C) refrigeration systems;

“(D) optical systems;

“(E) electronics; and

“(F) catalysis.

“(4) The application of rare earth materials in other uses, as determined by the Secretary.

“(b) Timeliness.—The Secretary shall seek to minimize delay in approving loan guarantee applications, consistent with appropriate protection of taxpayer interests.

“(c) Cooperation.—To the maximum extent practicable, the Secretary shall cooperate with appropriate private sector participants to achieve a complete rare earth materials production capability in the United States or ally nations within 5 years after the date of enactment of the Rare Earths Supply Chain Technology and Resources Transformation Act of 2011.

“(d) Limitation.—The Secretary is authorized to make a guarantee for a project under this section only if the project, due to technical or financial uncertainly, is not—

“(1) currently being undertaken by the private sector; or

“(2) likely to be undertaken by the private sector.

“(e) Sunset.—The authority to enter into guarantees under this section shall expire on September 30, 2015.”.

(b) Table of contents amendment.—The table of contents of the Energy Policy Act of 2005 is amended by inserting after the item relating to section 1705 the following new item:


“Sec. 1706. Temporary program for rare earth materials revitalization.”.

SEC. 6. Establishment of a rare earth alloy and magnet program.

(a) Findings.—Congress finds the following:

(1) While the capability to produce rare earth materials, including neodymium iron boron magnets (in this subsection referred to as “neo magnets”), is the backbone of the defense supply chain, the United States lacks sufficient capability to produce such materials.

(2) Sintered neo magnets are irreplaceable components of critical military equipment, ranging from precision guided munitions to stealth technology to electric drive ship programs, and they allow systems within aircraft, tanks and other vehicles, missile systems, and command and control centers to withstand vibration, impact, and G-forces.

(3) Yet despite the essential nature of these magnets to United States national security, the United States is completely reliant on unreliable foreign sources that are subject to interruption and disruption, based on actions or events outside the control of the Federal Government.

(4) In addition, industry officials have noted that it will take 3 to 5 years to develop a domestic neo magnet manufacturing capability for the commercial market.

(5) In light of these facts, there is a clear national security imperative to lay the groundwork immediately for developing a supply chain in the United States that allows for ready access to neodymium iron boron magnet alloys, dysprosium iron alloys, and sintered neodymium iron boron magnets.

(b) Requirement To establish an inventory.—

(1) ESTABLISHMENT.—In accordance with section 15 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–6), using funds from the sale of excess materials in the National Defense Stockpile, the President, acting through the Secretary of Defense, shall establish a neodymium iron boron magnet alloy and dysprosium iron alloy inventory to be managed by the Administrator of the Defense Logistics Agency Strategic Materials.

(2) SUSTAINING THE INVENTORY.—In carrying out paragraph (1), not later than one year after the date of the enactment of this Act, the Secretary of Defense shall—

(A) commence creating an inventory of domestic or ally nation neodymium iron boron magnet alloys and dysprosium iron alloys; and

(B) make such inventory accessible, including by purchase, to producers of domestic neodymium iron boron magnets, the Defense Logistics Agency of the Department of Defense, or other entities requiring such material to support national defense requirements.

(3) AMOUNT OF MATERIALS.—

(A) Not later than 180 days after the date of the enactment of this Act, the Secretary of Defense shall determine the amount of neodymium iron boron magnet alloys and dysprosium iron alloys required for the inventory established under paragraph (1).

(B) In making the determination regarding neodymium iron boron magnet alloys and dysprosium iron alloys under subparagraph (A), the Secretary of Defense shall determine—

(i) the aggregate demand for such magnets for national defense purposes; and

(ii) domestic and ally nation sources considered by the Secretary to be reliable, including an analysis of the viability of such sources for the near-term production of military-specific sintered neodymium iron boron magnet alloys and magnets.

(C) If the Secretary of Defense cannot determine the aggregate demand for neodymium iron boron magnet alloys and dysprosium iron alloys under subparagraph (B)(i), the Secretary shall establish an inventory of not less than 200 metric tons of neodymium iron boron magnet alloy and 50 metric tons of dysprosium iron alloy.

(c) Requirement To encourage a domestic manufacturing capability.—

(1) ENCOURAGEMENT.—In accordance with section 15 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–6), not later than one year after the date of the enactment of this Act, the President, acting through the Secretary of Defense, shall encourage the development of a domestic neodymium iron boron magnet manufacturing capability by seeking to enter into long-term supply contracts for the delivery of necessary grades of domestic neodymium iron boron magnets to meet the demand of the Department of Defense.

(2) REQUIREMENTS.—In carrying out paragraph (1), the Secretary of Defense shall—

(A) identify one or more reliable producers, potential producers, or past producers of sintered neodymium iron boron magnets and seek to enter into a long-term supply contract with such producer of such magnets to support the national defense needs of the United States;

(B) ensure that a sintered neodymium iron boron magnet producer who is awarded any such long-term contract establishes manufacturing capability for only military-use magnets for sale to the National Defense Stockpile;

(C) include all appropriate language in any such contract to indemnify the producers regarding intellectual property issues; and

(D) require the Administrator of the Defense Logistics Agency Strategic Materials to make available such magnets for purchase by Federal Government contractors until the date on which the Secretary determines that an alternate qualified domestic supplier of sintered neodymium iron boron magnets exists.

(d) Termination.—The authority under subsection (b) and the authority to enter into a long-term supply contract under subsection (c) shall terminate on the earlier of the following dates:

(1) The date on which the Secretary of Defense determines that an alternate qualified domestic supplier of neodymium iron boron magnet alloy and dysprosium iron alloy exists.

(2) October 1, 2018.

SEC. 7. Rare earth materials program.

(a) In general.—There is established in the United States Geological Survey a program of research, development, demonstration, and commercial application to ensure the long-term, secure, and sustainable supply of rare earth materials sufficient to satisfy the national security, economic well-being, and industrial production needs of the United States.

(b) Program activities.—The program described in subsection (a) shall support activities to—

(1) better characterize and quantify virgin stocks of rare earth materials using theoretical geochemical research;

(2) explore, discover, and recover rare earth materials using advanced science and technology;

(3) improve methods for the extraction, processing, use, recovery, and recycling of rare earth materials;

(4) improve the understanding of the performance, processing, and adaptability in engineering designs of rare earth materials;

(5) identify and test alternative materials that can be substituted for rare earth materials in particular applications;

(6) engineer and test applications that—

(A) use recycled rare earth materials;

(B) use alternative materials; or

(C) seek to minimize rare earth materials content;

(7) collect, catalogue, archive, and disseminate information on rare earth materials, including scientific and technical data generated by the research and development activities supported under this section, and assist scientists and engineers in making the fullest possible use of the data holdings; and

(8) facilitate information sharing and collaboration among program participants and stakeholders.

(c) Improved processes and technologies.—To the maximum extent practicable, the Secretary of the Interior shall support new or significantly improved processes and technologies as compared to those currently in use in the rare earth materials industry.

(d) Expanding participation.—The Secretary of the Interior shall encourage—

(1) multidisciplinary collaborations among program participants; and

(2) extensive opportunities for students at institutions of higher education, including institutions listed under section 371(a) of the Higher Education Act of 1965 (20 U.S.C. 1067q(a)).

(e) Consistency.—The program shall be consistent with the policies and programs in the National Materials and Minerals Policy, Research and Development Act of 1980 (30 U.S.C. 1601 et seq.).

(f) International collaboration.—In carrying out the program, the Secretary of the Interior may collaborate, to the extent practicable, on activities of mutual interest with the relevant agencies of foreign countries with interests relating to rare earth materials.

(g) Plan.—

(1) IN GENERAL.—Within 180 days after the date of enactment of this Act and biennially thereafter, the Secretary of the Interior shall prepare and submit to the appropriate congressional committees a plan to carry out the program established under subsection (a).

(2) SPECIFIC REQUIREMENTS.—The plan shall include a description of—

(A) the research and development activities to be carried out by the program during the subsequent 2 years;

(B) the expected contributions of the program to the creation of innovative methods and technologies for the efficient and sustainable provision of rare earth materials to the domestic economy;

(C) how the program is promoting the broadest possible participation by academic, industrial, and other contributors; and

(D) actions taken or proposed that reflect recommendations from the assessment conducted under subsection (h) or the Secretary’s rationale for not taking action pursuant to any recommendation from such assessment for plans submitted following the completion of the assessment under such subsection.

(3) CONSULTATION.—In preparing each plan under paragraph (1), the Secretary of the Interior shall consult with appropriate representatives of industry, institutions of higher education, Department of Energy national laboratories, professional and technical societies, and other entities, as determined by the Secretary.

SEC. 8. Amendments to National Materials and Minerals Policy, Research and Development Act of 1980.

(a) Program plan.—Section 5 of the National Materials and Minerals Policy, Research and Development Act of 1980 (30 U.S.C. 1604) is amended—

(1) by striking “date of enactment of this Act” each place it appears and inserting “date of enactment of the Rare Earths Supply Chain Technology and Resources Transformation Act of 2011”;

(2) in subsection (b), by striking “Federal Coordinating Council for Science, Engineering, and Technology” and inserting “National Science and Technology Council,”;

(3) in subsection (c)—

(A) by striking “the Federal Emergency” and all that follows through “Agency, and”;

(B) by striking “appropriate shall” and inserting “appropriate, shall”;

(C) by striking paragraph (1);

(D) in paragraph (2), by striking “in the case” and all that follows through “subsection,”;

(E) by redesignating paragraph (2) as paragraph (1); and

(F) by striking paragraph (3) and inserting the following:

“(2) assess the adequacy, accessibility, and stability of the supply of materials necessary to maintain national security, economic well-being, and industrial production.”;

(4) by striking subsections (d) and (e); and

(5) by redesignating subsection (f) as subsection (d).

(b) Policy.—Section 3 of such Act (30 U.S.C. 1602) is amended—

(1) by striking “The Congress declares that it” and inserting “It”; and

(2) by striking “The Congress further declares that implementation” and inserting “Implementation”.

(c) Implementation.—Section 4 of such Act (30 U.S.C. 1603) is amended—

(1) by striking “For the purpose” and all that follows through “declares that the” and inserting “The”; and

(2) by striking “departments and agencies,” and inserting “departments and agencies to implement the policies set forth in section 3”.

SEC. 9. Definitions.

In this Act:

(1) ALLOY.—The terms “alloy” means a partial or complete solid solution of one or more elements in a metallic matrix.

(2) ALLOYING.—The term “alloying” means the melting of metal to create a metallic matrix.

(3) APPROPRIATE CONGRESSIONAL COMMITTEES.—The term “appropriate congressional committees” means the Committee on Natural Resources of the House of Representatives and the Committee Energy and Natural Resources of the Senate.

(4) PROCESS.—The term “process”, in the case of a rare earth oxide, means the conversion of the oxide into usable rare earth metals and specialty alloys and powders for domestic magnet and other manufacturing.

(5) RARE EARTH.—The term “rare earth” means any of the following chemical elements in any of their physical forms or chemical combinations:

(A) Scandium.

(B) Yttrium.

(C) Lanthanum.

(D) Cerium.

(E) Praseodymium.

(F) Neodymium.

(G) Promethium.

(H) Samarium.

(I) Europium.

(J) Gadolinium.

(K) Terbium.

(L) Dysprosium.

(M) Holmium.

(N) Erbium.

(O) Thulium.

(P) Ytterbium.

(Q) Lutetium.