Section 1 Short title
This Act may be cited as the “Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022” or the “REEShore Act of 2022”.
Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022
A BILL
To encourage the extraction and processing of rare earth elements and critical minerals in the United States, and for other purposes.
Sec. 2 Definitions
In this Act:
Appropriate congressional committees— The term appropriate congressional committees means—
the Committee on Armed Services and the Committee on Energy and Natural Resources of the Senate; and
the Committee on Armed Services and the Committee on Energy and Commerce of the House of Representatives.
Covered critical mineral— The term covered critical mineral means—
antimony;
beryllium;
cobalt;
graphite;
lithium;
manganese;
nickel;
tantalum;
tungsten; or
vanadium.
Rare earth element— The term rare earth element means—
cerium;
dysprosium;
erbium;
europium;
gadolinium;
holmium;
lanthanum;
lutetium;
neodymium;
praseodymium;
promethium;
samarium;
scandium;
terbium;
thulium;
ytterbium; or
yttrium.
Rare earth or covered critical mineral product— The term rare earth or covered critical mineral product means a finished, semi-finished, or other intermediate good or component, including a battery or permanent magnet, that contains a rare earth element or covered critical mineral.
Sec. 3 Expansion of National Defense Stockpile requirements and capacity relating to rare earth elements and covered critical minerals
Findings— Congress finds that increasing the storage of substantial quantities of rare earth elements, covered critical minerals, and rare earth or covered critical mineral products in the National Defense Stockpile will—
diminish the vulnerability of the United States to the effects of severe disruptions to the supply chains for such elements, minerals, and products; and
provide limited protection from the consequences of an interruption in supplies of such elements, minerals, and products, particularly such elements, minerals, and products required to meet the needs of the Armed Forces and the defense industrial and technology sectors.
Statement of policy— It is the policy of the United States to expand and maintain a strategic reserve of rare earth elements, covered critical minerals, and rare earth or covered critical mineral products.
Declaration of purposes— Section 2 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98a) is amended by adding at the end the following:
“(d) The quantities of rare earth elements, covered critical minerals, and rare earth or covered critical mineral products stockpiled under this Act should be sufficient to sustain the United States Armed Forces and the defense industrial and technology sectors of the United States for a period of not less than 3 years during a national emergency situation that would necessitate total mobilization of the economy of the United States for a sustained conventional global war of indefinite duration.”
National emergency planning assumptions for rare earth elements and covered critical minerals— Section 14 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–5) is amended—
in subsection (b), in the second sentence, by striking “The Secretary shall base” and inserting “Except as provided in subsection (c), the Secretary shall base”;
by redesignating subsections (c), (d), and (e) as subsections (d), (e), and (f), respectively; and
by inserting after subsection (b) the following:
“(c) The Secretary shall base the Secretary's recommendations under subsection (a)(1) with respect to stockpile requirements for rare earth elements, covered critical minerals, and rare earth or covered critical mineral products on a national emergency situation that would last for a period of not less than 3 years and necessitate total mobilization of the economy of the United States for a sustained conventional global war of indefinite duration.”
Limited acquisition authority— The Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.) is amended—
in section 3(c)(2) (50 U.S.C. 98b(c)(2)), by striking “The President” and inserting “In the case of acquisitions of materials the cost of which exceeds the amount specified in section 5(a)(3), the President”;
in section 5(a) (50 U.S.C. 98d(a))—
in paragraph (1), in the first sentence, by inserting “under the authority of paragraph (3) or” after “Except for acquisitions made”; and
by adding at the end the following:
“(3) The Secretary of Defense may acquire materials determined to be strategic and critical under section 3(a), including rare earth elements, covered critical minerals, and rare earth or covered critical mineral products, without regard to the requirement of the first sentence of subsection (a) if the cost of the materials does not exceed $10,000,000.”
in section 10(c) (50 U.S.C. 98h–1(c))—
in paragraph (2), by striking “all acquisitions and disposals” inserting “acquisitions of materials the cost of which exceeds the amount specified in section 5(a)(3) and all disposals”; and
in paragraph (3)(A), by striking “all acquisitions and disposals” and inserting “acquisitions described in paragraph (2) and all disposals”; and
in section 11(b)(3) (50 U.S.C. 98h–2(b)(3))—
by inserting “(A)” before “Any proposed expenditure”; and
by adding at the end the following:
“(B) Subparagraph (A) does not apply with respect to acquisitions of materials the cost of which does not exceed the amount specified in section 5(a)(3).”
Definitions— Section 12 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h–3) is amended by adding at the end the following:
“(4) The term covered critical mineral means—
“(A) antimony;
“(B) beryllium;
“(C) cobalt;
“(D) graphite;
“(E) lithium;
“(F) manganese;
“(G) nickel;
“(H) tantalum;
“(I) tungsten; or
“(J) vanadium.
“(5) The term rare earth element means—
“(A) cerium;
“(B) dysprosium;
“(C) erbium;
“(D) europium;
“(E) gadolinium;
“(F) holmium;
“(G) lanthanum;
“(H) lutetium;
“(I) neodymium;
“(J) praseodymium;
“(K) promethium;
“(L) samarium;
“(M) scandium;
“(N) terbium;
“(O) thulium;
“(P) ytterbium; or
“(Q) yttrium.
“(6) The term rare earth or covered critical mineral product means a finished, semi-finished, or other intermediate good or component, including a battery or permanent magnet, that contains a rare earth element or covered critical mineral.”
Authorization of appropriations—
In general— There are authorized to be appropriated for the National Defense Stockpile Transaction Fund under section 9 of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98h)—
for fiscal year 2023, $253,500,000;
for fiscal year 2024, $266,175,000;
for fiscal year 2025, $279,484,000;
for fiscal year 2026, $293,458,000; and
for fiscal year 2027, $308,131,000.
Supplement not supplant— The amounts authorized to be appropriated by paragraph (1) shall supplement and not supplant other amounts authorized to be appropriated for the National Defense Stockpile Transaction Fund.
Sec. 4 Disclosures concerning rare earth elements and covered critical minerals by contractors of Department of Defense
Requirement— Beginning on the date that is 30 months after the date of the enactment of this Act, the Secretary of Defense shall require that any contractor that provides to the Department of Defense a system with a permanent magnet that contains rare earth elements or covered critical minerals disclose, along with delivery of the system, the provenance of the magnet.
Elements— A disclosure under subsection (a) shall include an identification of the country or countries in which—
any rare earth elements and covered critical minerals used in the magnet were mined;
such elements and minerals were refined into oxides;
such elements and minerals were made into metals and alloys; and
the magnet was sintered or bonded and magnetized.
Implementation of supply chain tracking system— If a contractor cannot make the disclosure required by subsection (a) with respect to a system described in that subsection, the Secretary shall require the contractor to establish and implement a supply chain tracking system in order to make the disclosure not later than 180 days after providing the system to the Department of Defense.
Waivers—
In general— The Secretary may waive a requirement under subsection (a) or (c) with respect to a system described in subsection (a) for a period of not more than 180 days if the Secretary certifies to the appropriate congressional committees that—
the continued procurement of the system is necessary to meet the demands of a national emergency declared under section 201 of the National Emergencies Act (50 U.S.C. 1621); or
the contractor cannot currently make the disclosure required by subsection (a) but is making significant efforts to comply with the requirements of that subsection.
Waiver renewals— The Secretary—
may renew a waiver under paragraph (1)(A) as many times as the Secretary considers appropriate; and
may not renew a waiver under paragraph (1)(B) more than twice.
Briefing required— Not later than 30 days after the submission of each report required by section 6(c), the Secretary of Defense shall provide to the appropriate congressional committees a briefing that includes—
a summary of the disclosures made under this section;
an assessment of the extent of reliance by the United States on foreign countries, and especially countries that are not allies of the United States, for rare earth elements and covered critical minerals;
a determination with respect to which systems described in subsection (a) are of the greatest concern for interruptions of supply chains with respect to rare earth elements and covered critical minerals; and
any suggestions for legislation or funding that would mitigate security gaps in such supply chains.
Sec. 5 Expansion of restrictions on procurement of military and dual-use technologies by Chinese military companies
Section 1211 of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163; 119 Stat. 3461), as most recently amended by section 1296 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114–328; 130 Stat. 2562), is further amended—
in the section heading, by striking “Communist Chinese military companies” and inserting “Chinese military companies”;
in subsection (a), by inserting after “military company” the following: “, any Chinese military company, or any Non-SDN Chinese military-industrial complex company”;
by amending subsection (b) to read as follows:
“(b) Goods and services covered
“(1) In general—For purposes of subsection (a), and except as provided in paragraph (2), the goods and services described in this subsection are goods and services—
“(A) on the munitions list of the International Traffic in Arms Regulations; or
“(B) on the Commerce Control List that—
“(i) are classified in the 600 series; or
“(ii) contain rare earth elements or covered critical minerals.
“(2) Exceptions—Goods and services described in this subsection do not include goods or services procured—
“(A) in connection with a visit by a vessel or an aircraft of the United States Armed Forces to the People's Republic of China;
“(B) for testing purposes; or
“(C) for purposes of gathering intelligence.”
in subsection (e)—
by striking paragraph (3);
by redesignating paragraphs (1) and (2) as paragraphs (3) and (6), respectively;
by inserting before paragraph (3), as redesignated by subparagraph (B), the following:
“(1) The term Chinese military company has the meaning given that term by section 1260H(d)(1) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (Public Law 116–283; 10 U.S.C. 113 note).
“(2) The term Commerce Control List means the list maintained by the Bureau of Industry and Security and set forth in Supplement No. 1 to part 774 of the Export Administration Regulations.”
by inserting after paragraph (3), as so redesignated, the following:
“(4) The term covered critical mineral means—
“(A) antimony;
“(B) beryllium;
“(C) cobalt;
“(D) graphite;
“(E) lithium;
“(F) manganese;
“(G) nickel;
“(H) tantalum;
“(I) tungsten; or
“(J) vanadium.
“(5) The term Export Administration Regulations has the meaning given that term in section 1742 of the Export Control Reform Act of 2018 (50 U.S.C. 4801).”
by adding at the end the following:
“(7) The term Non-SDN Chinese military-industrial complex company means any entity on the Non-SDN Chinese Military-Industrial Complex Companies List—
“(A) established pursuant to Executive Order 13959 (50 U.S.C. 1701 note; relating to addressing the threat from securities investments that finance Communist Chinese military companies), as amended before, on, or after the date of the enactment of the Restoring Essential Energy and Security Holdings Onshore for Rare Earths Act of 2022; and
“(B) maintained by the Office of Foreign Assets Control of the Department of the Treasury.
“(8) The term rare earth element means—
“(A) cerium;
“(B) dysprosium;
“(C) erbium;
“(D) europium;
“(E) gadolinium;
“(F) holmium;
“(G) lanthanum;
“(H) lutetium;
“(I) neodymium;
“(J) praseodymium;
“(K) promethium;
“(L) samarium;
“(M) scandium;
“(N) terbium;
“(O) thulium;
“(P) ytterbium; or
“(Q) yttrium.”
Sec. 6 Review of compliance with contracting requirements
In general— Not later than one year after the date of the enactment of this Act, and periodically thereafter until the termination date specified in subsection (e), the Comptroller General of the United States shall assess the extent of the efforts of the Department of Defense to comply with the requirements of—
section 4;
section 1211 of the National Defense Authorization Act for Fiscal Year 2006, as amended by section 5 of this Act; and
section 4872 of title 10, United States Code.
Briefing required— The Comptroller General shall periodically, until the termination date specified in subsection (e), provide to the appropriate congressional committees a briefing on the results of the assessments conducted under subsection (a) that includes an assessment of—
the inclusion by the Department of Defense of necessary contracting clauses in relevant contracts to meet the requirements described in paragraphs (1), (2), and (3) of subsection (a); and
the efforts of the Department of Defense to assess the compliance of contractors with such clauses.
Report required— The Comptroller General shall, not less frequently than every 2 years until the termination date specified in subsection (e), submit to the appropriate congressional committees a report on the results of the assessments conducted under subsection (a) that includes an assessment of—
the inclusion by the Department of Defense of necessary contracting clauses in relevant contracts to meet the requirements described in paragraphs (1), (2), and (3) of subsection (a); and
the efforts of the Department of Defense to assess the compliance of contractors with such clauses.
Referral— If, in conducting an assessment under subsection (a), the Comptroller General determines that a contractor has failed to comply with any of the requirements described in paragraphs (1), (2), and (3) of subsection (a), the Comptroller General shall refer the matter to the Department of Justice, relevant Inspectors General, or other enforcement agencies, as appropriate, for further examination and possible enforcement actions.
Termination— The requirements of this section shall terminate on the date that is 10 years after the date of the enactment of this Act.
Sec. 7 Support for domestic rare earth element and covered critical mineral producers and processors
Authorization of appropriations—
In general— There are authorized to be appropriated to the Defense Production Act Fund under section 304 of the Defense Production Act of 1950 (50 U.S.C. 4534) for each of fiscal years 2023 through 2027, $750,000,000 for activities of the Department of Defense pursuant to section 108 and title III of the Defense Production Act of 1950 (50 U.S.C. 4518 and 4531 et seq.).
Rare earth elements and covered critical minerals— Of the amount authorized to be appropriated by paragraph (1) for a fiscal year, not less than $250,000,000 shall be available to meet the requirements of the Department of Defense for rare earth elements and covered critical minerals.
Increase in limitation on cost of Defense Production Act projects for rare earth elements and covered critical minerals— Section 303(a)(6) of the Defense Production Act is amended—
in subparagraph (B)—
by striking “If the taking” and inserting the following:
“(i) In general—If the taking”
by inserting “(except as provided in clause (ii))” after “$50,000,000”; and
by adding at the end the following:
“(ii) Exception for rare earth elements and covered critical minerals—If the taking of any action under this subsection to correct a domestic industrial base shortfall in rare earth elements, covered critical minerals, or rare earth or covered critical mineral products (as those terms are defined in section 2 of the REEShore Act of 2022) would cause the aggregate outstanding amount of all such actions for such shortfall to exceed $100,000,000, the action or actions may be taken only after the 30-day period following the date on which the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives have been notified in writing of the proposed action.”
in subparagraph (C)—
by striking “If the taking” and inserting the following:
“(i) In general—If the taking”
by inserting “(except as provided in clause (ii))” after “$50,000,000”; and
by adding at the end the following:
“(ii) Exception for rare earth elements and covered critical minerals—If the taking of any action or actions under this section to correct an industrial resource shortfall in rare earth elements, covered critical minerals, or rare earth or covered critical mineral products (as those terms are defined in section 2 of the REEShore Act of 2022) would cause the aggregate outstanding amount of all such actions for such industrial resource shortfall to exceed $100,000,000, no such action or actions may be taken, unless such action or actions are authorized to exceed such amount by an Act of Congress.”