S429-119

1. Short title This Act may be cited as the Securing Trade and Resources for Advanced Technology, Economic Growth, and International Commerce in Minerals Act or STRATEGIC Minerals Act.

2. Definitions In this Act: The term appropriate congressional committees means— the Committee on Finance of the Senate; and the Committee on Ways and Means of the House of Representatives. The term country means— any foreign country or territory, including any overseas dependent territory or possession of a foreign country; and the Trust Territory of the Pacific Islands. The term covered free trade agreement means an agreement with one or more countries that— exclusively focuses on the critical minerals and rare earth elements sector; reduces barriers to trade among the parties to the agreement; includes enforceable provisions to prevent any foreign entity of concern from gaining any benefit from the agreement; and is approved by Congress. The term critical mineral has the meaning given that term in section 7002(a) of the Energy Act of 2020 (30 U.S.C. 1606(a)). The term foreign entity of concern has the meaning given that term in section 40207 of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741). The term rare earth element means cerium, dysprosium, erbium, europium, gadolinium, holmium, lanthanum, lutetium, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, ytterbium, or yttrium. The term Trade Representative means the United States Trade Representative.

3. Briefing on covered free trade agreements Not later than 120 days after the date of the enactment of this Act, the Trade Representative, in consultation with the Secretary of State, the Secretary of Defense, the Secretary of Energy, and the Secretary of the Interior, as appropriate, shall provide to the appropriate congressional committees a classified briefing on the feasibility and advisability of pursuing and adopting covered free trade agreements. The briefing required by subsection (a) shall include— an analysis of the most appropriate types of agreements (bilateral, plurilateral, or multilateral) for achieving the negotiating objectives set forth in section 4(d), including considerations of economic impact, strategic partnerships, negotiation feasibility, and national security implications; recommendations for which type or types of agreements are most needed to effectively secure critical minerals and rare earth elements supply chains in alignment with the national security and economic interests of the United States; and an assessment of potential challenges and proposed solutions in pursuing the recommended type or types of agreement, including legal, regulatory, and geopolitical considerations.

4. Negotiating and trade agreements authority for covered free trade agreements In order to enhance the economic well-being, national security, and economic competitiveness of the United States, the President, acting through the Trade Representative, may negotiate, enter into, and enforce a covered free trade agreement when the President determines that it is in the national interest to do so. The President may not initiate negotiations for a covered free trade agreement under paragraph (1) until the date on which the Trade Representative provides the briefing required by section 3(a) to the appropriate congressional committees. The President may proclaim such modification or continuance of any existing duty, or such continuance of existing duty-free or excise treatment, as the President determines to be required or appropriate to carry out a covered free trade agreement entered into under subsection (a)(1). The negotiating objectives of the United States for a covered free trade agreement are— to strengthen supply chains of critical minerals and rare earth elements; to reduce or eliminate barriers and distortions that inhibit to trade and investment in critical minerals and rare earth elements; to strengthen international trade and investment disciplines and procedures specific to critical minerals and rare earth elements, including effective dispute settlement mechanisms; to foster economic growth, raise living standards, enhance the competitiveness of the United States, promote full employment, and contribute to the global economy through the development and trade of critical minerals and rare earth elements; to promote policies that advance sustainable practices and circularity in the production and processing of critical minerals and rare earth elements; to encourage the development and adoption of innovative technologies and practices that optimize the use of critical resources; to promote respect for worker rights and the rights of children consistent with core labor standards only as stated in the International Labour Organization Declaration on Fundamental Principles and Rights at Work and its Follow-Up (1998) and an understanding of the relationship between trade and worker rights; to seek provisions in the agreement under which parties ensure they do not weaken or reduce the protections afforded in domestic environmental and labor laws as an encouragement for trade; to afford small businesses equitable trade benefits and to reduce or eliminate trade and investment barriers that disproportionately impact small businesses; to promote universal ratification and full compliance with the International Labour Organization Convention (ILO No. 182) concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labor, adopted at Geneva, June 17, 1999; to promote universal ratification and full compliance with the International Labour Organization Convention (ILO No. 176) concerning Safety and Health in Mines, adopted at Geneva, June 22, 1995; to encourage ownership transparency throughout the critical minerals and rare earth elements supply chain to prevent undue influence from foreign entities of concern; to protect legitimate health, safety, essential security, and consumer interests, ensuring that the agreement does not require changes to United States laws relating to those interests unless expressly agreed upon; and to ensure that the agreement does not require changes to United States statutes or regulations. In conducting negotiations under this section, the President shall take into account the principal trade negotiating objectives set forth in paragraphs (5), (7), and (10) of section 102(b) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C. 4201(b)), to the extent that those objectives are pertinent to the objectives described in paragraph (1). Before initiating negotiations under subsection (a)(1), or issuing a proclamation under subsection (b), the President shall— consult with the appropriate congressional committees regarding the intention to enter into the negotiations or issue the proclamation, as the case may be; and notify the appropriate congressional committees in writing at least 30 days before the initiation of the negotiations or the issuance of the proclamation, as the case may be, that includes— a statement of the intention to initiate the negotiations or issue the proclamation; in the case of negotiations— an identification of the country or countries with which the President intends to initiate negotiations; and a description of the specific objectives for the negotiations; and an assessment of the potential impact of the negotiations or proclamation, as the case may be, on the economic and strategic interests of the United States. Subject to paragraph (2), the President may— determine which countries to negotiate with toward a covered free trade agreement; and after the implementation of any such agreement and as conditions warrant, identify and engage in negotiations with additional countries that wish to accede to the agreement. Any covered free trade agreement entered into under subsection (a)(1) shall provide trade benefits, including tariff reductions, preferential treatment, or other trade advantages related to critical minerals and rare earth elements, exclusively to countries that are parties to the agreement. Countries that are not parties to a covered free trade agreement may not receive the trade benefits provided under the agreement, but nothing in this Act shall be construed to impose additional restrictions or penalties on such countries. The President may not negotiate a covered free trade agreement with a country determined to be a nonmarket economy country pursuant to section 771(18) of the Tariff Act of 1930 (19 U.S.C. 1677(18)). A country described in subparagraph (A) that is not designated as a foreign country of concern (as defined in section 231.102 of title 15, Code of Federal Regulations) may accede to a covered free trade agreement after entry into force of the agreement if a joint resolution is enacted into law approving the accession of that country to the agreement. The provisions of section 151 of the Trade Act of 1974 (19 U.S.C. 2191) (in this section referred to as trade authorities procedures) apply to a bill of either House of Congress which contains provisions described in paragraph (2) to the same extent as such section 151 applies to implementing bills under that section. A bill to which this subsection applies shall hereafter in this section be referred to as an implementing bill. The provisions described in this paragraph are— a provision approving a covered free trade agreement and approving the statement of administrative action, if any, proposed to implement that agreement; and if changes in existing laws or new statutory authority are required to implement that agreement, only such provisions as are strictly necessary or appropriate to implement the agreement, either repealing or amending existing laws or providing new statutory authority. A covered free trade agreement, including such an agreement that does not require changes to United States law, shall not enter into force with respect to the United States and an implementing bill that relates to such an agreement shall not qualify for trade authorities procedures unless the following requirements of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C. 4201 et seq.) are carried out with respect to that agreement, to the same extent as would be required with respect to an agreement entered into under section 103(b) of that Act (19 U.S.C. 4202(b)), notwithstanding the expiration of authority to enter into an agreement under such section 103(b): The congressional oversight and consultation requirements under section 104 of that Act (19 U.S.C. 4203). The notification, consultation, and reporting requirements under section 105 of that Act (19 U.S.C. 4204). The implementation procedures under section 106 of that Act (19 U.S.C. 4205). The authority of the President under subsection (a)(1) to negotiate and enter into covered free trade agreements terminates on July 1, 2035. Substantial modifications to, or substantial additional provisions of, a covered free trade agreement that are entered into after July 1, 2035, are not covered by the authority under subsection (a)(1). The trade authorities procedures apply to an implementing bill with respect to a covered free trade agreement entered into under subsection (a)(1) if— the agreement is entered into on or before July 1, 2035; and the implementing bill is submitted to Congress not later than one year after the agreement is entered into. The authority under subsection (a)(1) to enforce a covered free trade agreement remains in effect after July 1, 2035, notwithstanding the termination under paragraph (1) of the authority to negotiate and enter into such agreements.

5. Inclusion of businesses of parties to covered free trade agreements in definition of domestic source for title III of Defense Production Act of 1950 Section 702(7)(B) of the Defense Production Act of 1950 (50 U.S.C. 4552(7)(B)) is amended— in clause (i)(I)— in item (aa), by striking ; or and inserting a semicolon; in item (bb), by striking ; and and inserting ; or; and by adding at the end the following: subject to clause (iii), the territory of a party to a covered free trade agreement (as defined in section 2 of the Securing Trade and Resources for Advanced Technology, Economic Growth, and International Commerce in Minerals Act); and by adding at the end the following: A business concern described in clause (i)(I)(cc) may be treated as a domestic source— only for purposes of the exercise of authorities under section 303(a)(1) relating to minerals activities related to minerals the supply of which in the United States and Canada is deficient; and only if, for minerals activities carried out pursuant to such exercise of authorities— the minerals are processed, beneficiated, or recycled only by entities owned by entities organized under the laws of the United States and not more than 10 percent or more of the equity interests of which are owned or controlled, directly or indirectly, by any foreign entity of concern, through any contract, arrangement, understanding, relationship, or otherwise; the business concern does not sell or transfer any of the minerals extracted, processed, beneficiated, refined, recycled, or otherwise transformed, or any revenues derived from those minerals, to entities located in the People’s Republic of China or to entities owned, directly or indirectly, held, or controlled by any foreign entity of concern; and no mine used for the mining of such minerals is owned, directly or indirectly, held, or controlled by any foreign entity of concern. For purposes of subclause (I)(aa), in determining if the supply in the United States and Canada of a critical mineral or rare earth element is deficient, the Secretary of Defense, in consultation with the Secretary of the Interior and the Secretary of Energy, shall consider factors including— current domestic production levels; projected demand for national defense and critical infrastructure; dependence on foreign sources, especially from foreign entities of concern; and potential for supply chain disruptions. The Secretary of Defense shall provide guidance to business concerns on compliance with this clause. If a business concern is found to be in violation of this clause— the Secretary of Defense shall provide written notice to the business concern detailing the nature of the violation and the penalties to be imposed; the business concern may be required to repay any funds received under section 303(a)(1); the business concern may be disqualified from future contracts or financial assistance under this Act; the business concern may be subject to civil penalties under section 705; and the matter may be referred to the Attorney General for criminal prosecution under applicable laws. In this clause: The terms beneficiate and beneficiation mean the crushing and grinding of hardrock mineral ore and such processes as are employed to free the mineral from other constituents, including physical and chemical separation techniques. The term control means having the ability, directly or indirectly, to determine (without regard to whether exercised through 1 or more corporate structures) the manner in which an entity conducts mineral activities, through any means, including— ownership interest; authority to commit the real or financial assets of the entity; position as a director, officer, or partner of the entity; or contractual arrangement. The term critical mineral has the meaning given that term in section 7002(a) of the Energy Act of 2020 (30 U.S.C. 1606(a)). The term deficient, with respect to the supply in the United States and Canada of a critical mineral or rare earth element, means that supply is insufficient to meet national defense and essential civilian industrial requirements, as determined by the Secretary of Defense, in consultation with the Secretary of the Interior and the Secretary of Energy. The term foreign entity of concern has the meaning given that term in section 40207 of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741). The term mineral activities means any activity carried out on a mining claim, millsite, or tunnel site, for, related to, or incidental to, mining, beneficiation, processing, refining, alloying, or recycling activities for any critical mineral or rare earth element. The term processing has the meaning given that term in Treasury Regulation section 1.30D–2(b)(37) (or a successor regulation). The term rare earth element has the meaning given that term in section 2 of the Securing Trade and Resources for Advanced Technology, Economic Growth, and International Commerce in Minerals Act. The term recycling has the meaning given that term in Treasury Regulation section 1.30D–2(b)(43) (or a successor regulation). The term revenues includes any income, profits, dividends, royalties, or other financial benefits obtained from the sale, transfer, or other disposition of the minerals produced. The term sell or transfer includes any transaction that conveys ownership, possession, or control of minerals produced, or any interest therein, including sales, leases, exchanges, or gifts. (cc)subject to clause (iii), the territory of a party to a covered free trade agreement (as defined in section 2 of the Securing Trade and Resources for Advanced Technology, Economic Growth, and International Commerce in Minerals Act); and; and (iii)Additional requirements for parties to covered free trade agreements(I)In generalA business concern described in clause (i)(I)(cc) may be treated as a domestic source—(aa)only for purposes of the exercise of authorities under section 303(a)(1) relating to minerals activities related to minerals the supply of which in the United States and Canada is deficient; and(bb)only if, for minerals activities carried out pursuant to such exercise of authorities—(AA)the minerals are processed, beneficiated, or recycled only by entities owned by entities organized under the laws of the United States and not more than 10 percent or more of the equity interests of which are owned or controlled, directly or indirectly, by any foreign entity of concern, through any contract, arrangement, understanding, relationship, or otherwise; (BB)the business concern does not sell or transfer any of the minerals extracted, processed, beneficiated, refined, recycled, or otherwise transformed, or any revenues derived from those minerals, to entities located in the People’s Republic of China or to entities owned, directly or indirectly, held, or controlled by any foreign entity of concern; and (CC)no mine used for the mining of such minerals is owned, directly or indirectly, held, or controlled by any foreign entity of concern.(II)Determination of deficiencyFor purposes of subclause (I)(aa), in determining if the supply in the United States and Canada of a critical mineral or rare earth element is deficient, the Secretary of Defense, in consultation with the Secretary of the Interior and the Secretary of Energy, shall consider factors including—(aa)current domestic production levels;(bb)projected demand for national defense and critical infrastructure;(cc)dependence on foreign sources, especially from foreign entities of concern; and(dd)potential for supply chain disruptions. (III)Compliance and verification(aa)GuidanceThe Secretary of Defense shall provide guidance to business concerns on compliance with this clause.(bb)Notice of and penalties for noncomplianceIf a business concern is found to be in violation of this clause—(AA)the Secretary of Defense shall provide written notice to the business concern detailing the nature of the violation and the penalties to be imposed;(BB)the business concern may be required to repay any funds received under section 303(a)(1);(CC)the business concern may be disqualified from future contracts or financial assistance under this Act;(DD)the business concern may be subject to civil penalties under section 705; and(EE)the matter may be referred to the Attorney General for criminal prosecution under applicable laws.(IV)DefinitionsIn this clause:(aa)Beneficiate; beneficiationThe terms beneficiate and beneficiation mean the crushing and grinding of hardrock mineral ore and such processes as are employed to free the mineral from other constituents, including physical and chemical separation techniques. (bb)ControlThe term control means having the ability, directly or indirectly, to determine (without regard to whether exercised through 1 or more corporate structures) the manner in which an entity conducts mineral activities, through any means, including—(AA)ownership interest;(BB)authority to commit the real or financial assets of the entity;(CC)position as a director, officer, or partner of the entity; or(DD)contractual arrangement. (cc)Critical mineralThe term critical mineral has the meaning given that term in section 7002(a) of the Energy Act of 2020 (30 U.S.C. 1606(a)).(dd)DeficientThe term deficient, with respect to the supply in the United States and Canada of a critical mineral or rare earth element, means that supply is insufficient to meet national defense and essential civilian industrial requirements, as determined by the Secretary of Defense, in consultation with the Secretary of the Interior and the Secretary of Energy. (ee)Foreign entity of concernThe term foreign entity of concern has the meaning given that term in section 40207 of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741).(ff)Mineral activitiesThe term mineral activities means any activity carried out on a mining claim, millsite, or tunnel site, for, related to, or incidental to, mining, beneficiation, processing, refining, alloying, or recycling activities for any critical mineral or rare earth element.(gg)ProcessingThe term processing has the meaning given that term in Treasury Regulation section 1.30D–2(b)(37) (or a successor regulation). (hh)Rare earth elementThe term rare earth element has the meaning given that term in section 2 of the Securing Trade and Resources for Advanced Technology, Economic Growth, and International Commerce in Minerals Act.(ii)RecyclingThe term recycling has the meaning given that term in Treasury Regulation section 1.30D–2(b)(43) (or a successor regulation).(jj)RevenuesThe term revenues includes any income, profits, dividends, royalties, or other financial benefits obtained from the sale, transfer, or other disposition of the minerals produced. (kk)Sell or transferThe term sell or transfer includes any transaction that conveys ownership, possession, or control of minerals produced, or any interest therein, including sales, leases, exchanges, or gifts..