Sec. 4. Thorium-Bearing Rare-Earth Refinery Cooperative
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/bill/113/hr/4883/ih/section-4·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
There is established a Cooperative, to be known as the Thorium-Bearing Rare-Earth Refinery Cooperative , to provide for the domestic processing of thorium-bearing rare-earth concentrates as residual unprocessed and unrefined ores, in accordance with 10 CFR 40.12 and 13b as it relates to the Cooperative. The Cooperative shall operate under a Federal charter. The Cooperative shall comprise— supplier members; and consumer members. As a condition of entering into a contract to supply the Cooperative with rare-earth ores, supplier members provide rare-earth concentrates to the Cooperative at market price.
Any supplier member that makes significant capital contributions to the Cooperative, as determined by the Cooperative Board, may become a consumer member for purposes of the distribution of profits of the Cooperative under subparagraph (D). A consumer member— shall make capital contributions to the Cooperative in exchange for entering into negotiated supply agreements; and in accordance with the agreements entered into under clause (i), may acquire finished rare-earth products from the Cooperative at market price.
Any profits of the Cooperative shall be distributed between supplier members and consumer members in accordance with a formula established by the Cooperative Board. As soon as practicable after the date of the enactment of this Act, the Secretary shall appoint the Initial Board of Directors for the Cooperative, comprised of five members, of whom— one member shall represent the Defense Logistics Agency Strategic Materials program of the Department of Defense; one member shall represent the Assistant Secretary of Defense for Research and Engineering; one member shall represent United States advocacy groups for rare-earth producers and original equipment manufacturing interests; one member shall represent the United States Geological Survey; and one member who shall— not be affiliated with a Federal agency; and be recommended for appointment by a majority vote of the other members of the Initial Board of Directors appointed under clauses
(i)through (iv). The Initial Board of Directors shall— establish the charter, bylaws, and rules of governance for the Cooperative; make formative business decisions on behalf of the Cooperative; and assist in the formation of, and the provision of tasks and assignments to, the Corporation. The member appointed under subparagraph (A)(v) shall remain on the Cooperative Board and Corporation Board, until such time as— the member voluntarily resigns; or a majority of the members of the Cooperative Board and a majority of the members of the Corporation Board vote to remove the member from the Cooperative Board and the Corporation Board. The Initial Board of Directors shall terminate on the date on which the initial members of the Cooperative Board are appointed under paragraph (2). The Board of Directors of the Cooperative shall comprise nine members, to be selected in accordance with the bylaws of the Cooperative established under paragraph (1)(B)(i), of whom— five members shall be consumer members; two members shall be supplier members; one member shall represent an advocacy group for defense contractors, other rare-earth consumers, and suppliers who are not represented by the Board or through direct ownership in the Cooperative; and one member shall be the member of the Initial Board of Directors appointed under paragraph (1)(A)(v). The Cooperative Board may— prescribe the manner in which business shall be conducted by the Cooperative; determine pay-out ratio formulas for consumer members and supplier members, based on— the capital stock ratios of consumer members; and the value of supply member contracts, as determined based on the volume, term, and distributions of rare-earth concentrates relative to processing costs; and evaluate technologies and processes for the efficient extraction and refining of rare-earth materials from various thorium-bearing ores. The Cooperative Board shall establish the refinery and offices for the Cooperative at any locations determined to be appropriate by the Cooperative Board. The Cooperative shall seek to enter into domestic and international investment partnerships for the development of the refinery. The Cooperative may— enter into equity, financial, and supply-based agreements or arrangements with value-added intermediaries, equipment manufacturers, or consumers of rare-earth products, and Federal, State, or local agencies to provide economic incentives, leases, or public financing; and engage in direct market sales of rare-earth products. The Cooperative may— directly purchase rare-earth materials obtained from any byproduct producers of rare-earths; transport those materials as unprocessed and unrefined ores, in accordance with part 40 of title 10, Code of Federal Regulations (parts 12–13b, or any corresponding similar regulation or ruling); offer non-member supplier short-term or direct purchase contracts; and allow primary rare-earth producers to be tolling customers of the Cooperative. A tolling customer under subparagraph (A)(iii) shall— retain control of the rare-earth products during the processing, refining, or value adding of the rare-earth products by the Cooperative; and take possession of the rare-earth products after— tolling services are rendered by the Cooperative; and the Cooperative has received payment in full for the tolling services rendered. The Cooperative may charge tolling customers under subparagraph (A)(iii) a tolling fee not to exceed the sum of— the amount equal to 110 percent of the total cost for tolling services rendered by the Cooperative on behalf of the tolling customer; and the amount equal to five percent of the market value of the finished product provided to the tolling customer by the Cooperative. Any contract among consumer members, supplier members, tolling customers, and direct purchase suppliers entered into under subparagraph (A)(iii) shall be protected as provided in sub section 552(b)(4) of title 5, United States Code. A direct purchase non-member supplier under subparagraph (A)(ii) or a tolling customer under subparagraph (A)(iii)— shall not be considered to be a supplier member or otherwise be considered a member of the Cooperative for purposes of this Act; and shall not participate in Cooperative profits or have voting rights with respect to the Cooperative. The Cooperative shall retain an independent auditor to evaluate the extent to which Federal funds, if any, made available to the Cooperative for research and development activities have been expended in a manner that is consistent with the purposes of this Act and the charter, bylaws, and rules of governance of the Cooperative. The auditor retained under paragraph
(1)shall submit to the Secretary of Defense, the Cooperative, and the Comptroller General of the United States an annual report containing the findings and determinations of the auditor. The Comptroller General of the United States shall— review each annual report submitted to the Comptroller General by the auditor under paragraph (2); and submit to the Committee on Armed Services of the Senate and the Committee on Armed Services of the House of Representatives a report containing the comments of the Comptroller General on the accuracy and completeness of the report and any other matters relating to the report that the Comptroller General considers appropriate. Not later than seven years following the date of the enactment of this Act, the Cooperative shall reimburse the Federal Government for administrative costs associated with the establishment of its charter.
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Sec. 4
Thorium-Bearing Rare-Earth Refinery Cooperative
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