HR 1388
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. 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. 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.
(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--
`(C) refrigeration systems;
`(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.
(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.
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.
(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,';
(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.
(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:
END
