[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3530 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 3530

To encourage the extraction and processing of rare earth metals in the 
                 United States, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 20, 2022

 Mr. Cotton (for himself and Mr. Kelly) introduced the following bill; 
   which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL


 
To encourage the extraction and processing of rare earth metals in the 
                 United States, and for other purposes.

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

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''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Armed Services, the Committee 
                on Foreign Relations, the Committee on Finance, and the 
                Select Committee on Intelligence of the Senate; and
                    (B) the Committee on Armed Services, the Committee 
                on Foreign Affairs, the Committee on Ways and Means, 
                and the Permanent Select Committee on Intelligence of 
                the House of Representatives.
            (2) Processed or refined.--The term ``processed or 
        refined'' means any process by which raw rare earth metals are 
        changed, mixed, or otherwise manipulated to render the metal 
        usable for manufacturing everyday items, including computer 
        chips or circuit boards.
            (3) Rare earth metals.--The term ``rare earth metals'' 
        means beryllium, cerium, cobalt, dysprosium, erbium, europium, 
        gadolinium, graphite, holmium, lanthanum, lithium, lutetium, 
        manganese, neodymium, praseodymium, promethium, samarium, 
        scandium, tantalum, terbium, thulium, tungsten, ytterbium, and 
        yttrium.

SEC. 3. ESTABLISHMENT OF STRATEGIC RARE EARTH METAL AND RARE EARTH 
              METAL PRODUCTS RESERVE.

    (a) Findings.--Congress finds that the storage of substantial 
quantities of rare earth metals and rare earth metal products will--
            (1) diminish the vulnerability of the United States to the 
        effects of a severe supply chain interruption; and
            (2) provide limited protection from the short-term 
        consequences of an interruption in supplies of rare earth metal 
        products, particularly such products required for defense 
        manufacturing and use.
    (b) Statement of Policy.--It is the policy of the United States to 
provide for the establishment of a strategic rare earth metals and rare 
earth metal products reserve.
    (c) Report Required.--
            (1) In general.--Not later than 270 days after the date of 
        the enactment of this Act, the Secretary of the Interior and 
        the Secretary of Defense shall jointly submit the appropriate 
        congressional committees a report describing--
                    (A) the strategic requirements of the United States 
                regarding stockpiles of rare earth metals and processed 
                and refined rare earth metal products; and
                    (B) the requirements for such metals and products 
                to support the United States for one year in the event 
                of a supply disruption.
            (2) Considerations.--In developing the report required by 
        paragraph (1), the Secretary of the Interior and the Secretary 
        of Defense shall take into consideration the needs of the Armed 
        Forces of the United States, the defense industrial and 
        technology sectors, and any places, organizations, physical 
        infrastructure, or digital infrastructure designated as 
        critical to the national security of the United States.
    (d) Implementation.--Not later than 3 years after submission of the 
report required by subsection (c), the Secretary of the Interior shall 
take such actions as are necessary to procure all types of rare earth 
metals and processed and refined rare earth metal products in 
appropriate quantities to support the strategic requirements described 
in the report.
    (e) Reassessment of Requirements.--The Secretary of the Interior 
and the Secretary of Defense shall--
            (1) jointly reassess the strategic requirements described 
        in paragraph (1) of subsection (c) and the considerations 
        described in paragraph (2) of that subsection; and
            (2) not less frequently than annually, submit to the 
        appropriate congressional committees a report on--
                    (A) that reassessment; and
                    (B) describing any activities relating to the 
                establishment or use of a strategic rare earth metals 
                and rare earth metal products reserve during the 
                preceding year.

SEC. 4. DISCLOSURES CONCERNING RARE EARTH METALS BY CONTRACTORS OF 
              DEPARTMENT OF DEFENSE.

    (a) Requirement.--The Secretary of Defense shall require that any 
contractor that provides to the Department of Defense a system with a 
rare earth metal permanent magnet disclose, along with delivery of the 
system, the provenance of the magnet.
    (b) Elements.--A disclosure under subsection (a) shall include an 
identification of the country or countries in which--
            (1) the rare earth metals used in the magnet were mined;
            (2) the rare earth metals were refined into oxides;
            (3) the rare earth metals were made into metals and alloys; 
        and
            (4) the magnet was sintered or bonded and magnetized.
    (c) Implementation of Supply Chain Tracking System.--If a 
contractor cannot make the disclosure required by subsection (a) with 
respect to a magnet, 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 magnet to 
the Department of Defense.
    (d) Report Required.--Not later than December 31, 2022, and 
annually thereafter, the Secretary of Defense, after consultation with 
the Secretary of Commerce and the Secretary of the Interior, shall 
submit to the appropriate congressional committees a report that 
includes--
            (1) a summary of the disclosures made under this section;
            (2) 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 metals;
            (3) a determination with respect to which systems are of 
        the greatest concern for interruptions of rare earth metal 
        supply chains; and
            (4) any suggestions for legislation or funding that would 
        mitigate supply chain security gaps.

SEC. 5. RESTRICTION ON USE OF CHINESE-MADE RARE EARTH METALS IN 
              MILITARY TECHNOLOGIES.

    (a) In General.--The Secretary of Defense shall require that, for 
any contract entered into or renewed on or after December 31, 2026, for 
the procurement of a system the export of which is restricted or 
controlled under the Arms Export Control Act (22 U.S.C. 2751 et seq.), 
no rare earth metals processed or refined in the People's Republic of 
China may be included in the system.
    (b) Waiver.--The Secretary may waive the restriction under 
subsection (a) upon a determination that--
            (1) rare earth metals of sufficient quantity and quality 
        are not available at reasonable prices from sources outside of 
        the People's Republic of China; and
            (2) such a waiver is in the interests of national security.

SEC. 6. COMPLIANCE WITH CONTRACTING REQUIREMENTS.

    (a) In General.--Not later than September 30, 2022, and every 2 
years thereafter, the Comptroller General of the United States shall 
audit the extent of compliance or noncompliance with the requirements 
of sections 4 and 5 of this Act, and section 2533c of title 10, United 
States Code, through a random sampling of contracts entered into by the 
Department of Defense during the 2-year period preceding the audit.
    (b) Report Required.--Not later than 30 days after the completion 
of an audit under subsection (a), the Comptroller General shall submit 
to the appropriate congressional committees an assessment of--
            (1) the inclusion by the Department of Defense of necessary 
        contracting clauses in relevant contracts; and
            (2) compliance by contractors of the Department with 
        sections 4 and 5 of this Act and section 2533c of title 10, 
        United States Code.
    (c) Referral.--The Comptroller General shall provide the Department 
of Justice with the resources and authorities needed for any 
enforcement actions against entities that have failed to comply with 
the requirements of section 4 or 5 of this Act or section 2533c of 
title 10, United States Code.

SEC. 7. INVESTIGATION OF UNFAIR TRADE PRACTICES.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the United States Trade Representative, in 
coordination with the Secretary of Commerce, shall initiate an 
investigation under title III of the Trade Act of 1974 (19 U.S.C. 2411 
et seq.) to determine whether acts, policies, and practices of the 
Government of the People's Republic of China related to technology 
transfer, intellectual property, or innovation with respect to rare 
earth metal mining, separation, metallization, alloying, or magnet 
manufacturing, or related processes, are acts, policies, and practices 
described in subsection (a) or (b) of section 301 of that Act (19 
U.S.C. 2411).
    (b) Report Required.--
            (1) In general.--Not later than 180 days after initiating 
        the investigation required by subsection (a), the Trade 
        Representative shall submit to the appropriate congressional 
        committees a report assessing the necessity of trade 
        enforcement actions to deter the Government of the People's 
        Republic of China from further interference in the rare earth 
        metals market.
            (2) Elements.--The report required by paragraph (1) shall 
        include--
                    (A) a summary of actions taken by the Government of 
                the People's Republic of China to disrupt supply chains 
                for rare earth metals;
                    (B) a summary of the world market for rare earth 
                metals at each stage of the supply chain, including the 
                ability of producers in the United States and countries 
                that are allies of the United States to meet the 
                national security and commercial needs of the United 
                States;
                    (C) determinations with respect to whether further 
                action under title III of the Trade Act of 1974 (19 
                U.S.C. 2411 et seq.), section 232 of the Trade 
                Expansion Act of 1962 (19 U.S.C. 1862), or any other 
                provision of law is necessary to deter the Government 
                of the People's Republic of China from further 
                interference in the rare earth metals market; and
                    (D) recommendations for such other authorities as 
                the Secretary considers necessary to deter the 
                Government of the People's Republic of China from 
                further interference in the rare earth metals market.

SEC. 8. PRODUCTION IN AND USES OF RARE EARTH METALS BY UNITED STATES 
              ALLIES.

    (a) Policy.--It shall be the policy of the United States to 
encourage countries that are allies of the United States to eliminate 
their dependence on non-allied countries for rare earth metals to the 
maximum extent practicable.
    (b) Report Required.--Not later than December 31, 2022, and 
annually thereafter, the Secretary of Defense, in coordination with the 
Secretary of State, shall submit to the appropriate congressional 
committees a report--
            (1) describing in detail the discussions of such 
        Secretaries with countries that are allies of the United States 
        concerning supply chain security for rare earth metals;
            (2) assessing the likelihood of those countries 
        discontinuing the use of rare earth metals from the People's 
        Republic of China or other countries that such Secretaries deem 
        to be of concern; and
            (3) assessing initiatives in other countries to increase 
        rare earth metals production capabilities.

SEC. 9. EFFECTIVE DATE.

    This Act takes effect on the date that is one day after the date of 
the enactment of this Act.
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