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107TH CONGRESS

1ST SESSION S. 1277

To authorize the Secretary of Energy to guarantee loans to facilitate nuclear

nonproliferation programs and activities of the Government of the Russian Federation, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 31, 2001

Mr. DOMENICI (for himself and Mr. LUGAR) introduced the following bill;

which was read twice and referred to the Committee on Foreign Relations

A BILL

To authorize the Secretary of Energy to guarantee loans

to facilitate nuclear nonproliferation programs and activities of the Government of the Russian Federation, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Russian Fissile Mate5 rials Disposition Loan Guarantee Act of 2001’’.

6 SEC. 2. FINDINGS.

7 Congress makes the following findings:
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1 (1) The proliferation of nuclear weapons rep2 resents a risk to the national security of the United

3 States.

4 (2) Countries seeking new nuclear weapons ca5 pabilities require both technical expertise and nu6 clear weapons materials.

7 (3) The nuclear weapons complex of the former

8 Soviet Union contains large amounts of such tech9 nical expertise and materials and could present risks

10 for nuclear proliferation.

11 (4) Several current programs address the po12 tential for loss of such technical expertise and mate13 rials.

14 (5) Progress on the Highly Enriched Uranium

15 Agreement and on the Plutonium Disposition Agree16 ment will enhance United States security against nu17 clear proliferation, but United States security would

18 be further enhanced were additional progress

19 achieved in securing and disposing of the nuclear

20 weapons materials of the former Soviet Union.

21 (6) In addition to the programs referred to in

22 paragraphs (4) and (5), a program providing for the

23 placement of nuclear weapons materials of the Rus24 sian Federation under permanent safeguards in ex25 change for the guarantee of loans for nonprolifera-
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1 tion programs and activities of the Russian Federa2 tion could enhance the economy of the Russian Fed3 eration and achieve the interest of nations worldwide

4 in providing for the security of nuclear weapons ma5 terials that are not currently under international

6 safeguards.

7 SEC. 3. LOAN GUARANTEES.

8 (a) AUTHORITY TO GUARANTEE LOAN.—Subject to

9 the provisions of this section, the Secretary of Energy

10 may, with the approval of the President, guarantee loans

11 made to the Government of the Russian Federation for

12 purposes described in subsection (c)(1).

13 (b) LIMITATIONS ON GUARANTEES.—(1) The aggre14 gate amount of loan principal covered by guarantees under

15 this section at any one time may not exceed

16 $1,000,000,000.

17 (2) The guarantee of a loan under this section applies

18 to principal and to interest specified in the loan, except

19 that the guarantee on interest shall not apply to amounts

20 allocable to interest at a rate in excess of 3 percent per

21 year.

22 (c) LOANS ELIGIBLE FOR GUARANTEE.—(1) A loan

23 eligible for guarantee under this section is any loan made

24 by a private lender to the Government of the Russian Fed25 eration the proceeds of which are to be utilized by the Gov-
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1 ernment of the Russian Federation for one or more of the

2 following purposes:

3 (A) Retirement of the sovereign debt of the

4 Russian Federation.

5 (B) Support of nuclear nonproliferation pro6 grams and activities of the Government of the Rus7 sian Federation.

8 (C) Development of the energy infrastructure of

9 the Russian Federation, including peaceful uses of

10 nuclear energy in a manner that complies with the

11 Nuclear Nonproliferation Treaty.

12 (2) A loan is not eligible for guarantee under this

13 section if the proceeds of the loan are to be used for any

14 purpose or activity under the Plutonium Disposition

15 Agreement, including to cover the costs of the manufac16 ture and use of mixed oxide (MOX) fuel in Russia under

17 the Plutonium Disposition Agreement.

18 (d) LOAN TERMS.—A loan guaranteed under this

19 section shall have the following terms:

20 (1) The loan principal shall be in increments of

21 $20,000,000.

22 (2) The term of the loan with respect to any

23 principal increment of the loan shall be not less than

24 15 years.
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1 (3) Payments of principal and interest on the

2 loan shall be based on an amortization schedule pro3 viding that—

4 (A) interest on a principal increment of the

5 loan will commence on the date of the disburse6 ment of the principal increment of the loan;

7 (B) no payment of principal or interest on

8 a principal increment of the loan will be re9 quired for at least 5 years after the date of the

10 disbursement of the principal increment of the

11 loan;

12 (C) once payments of principal and inter13 est commence pursuant to subparagraph (B),

14 such payments will be made on a semi-annual

15 basis; and

16 (D) all interest and principal on each prin17 cipal increment of the loan will be due and pay18 able not later than the completion of the term

19 of the loan with respect to such principal incre20 ment of the loan.

21 (4) The proceeds of the loan shall be disbursed

22 to the Russian Federation or a department or min23 istry of the Russian Federation.
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1 (5) The lender may, upon default of the Gov2 ernment of the Russian Federation on the loan, ex3 ercise the option described in subsection (e)(3).

4 (e) LOAN SECURITY.—(1) As security for a loan

5 guaranteed under this section, the Government of the Rus6 sian Federation shall, for each loan principal increment

7 of $20,000,000, place 1.00 metric tons of weapons-usable

8 plutonium and 1.00 metric tons of weapons-usable highly

9 enriched uranium under International Atomic Energy

10 Agency (IAEA) safeguards at a facility in Russia that is

11 mutually acceptable to Russia and the IAEA. The place12 ment of materials under such safeguards as security for

13 a principal increment of a loan shall be completed before

14 the disbursement of the principal increment of the loan.

15 (2) As security for a loan guaranteed under this sec16 tion, the Government of the Russian Federation shall cer17 tify to the Secretary that any materials placed under

18 International Atomic Energy Agency safeguards pursuant

19 to paragraph (1) shall remain under such safeguards in20 definitely, including after the loan is paid off by the Gov21 ernment of the Russian Federation.

22 (3)(A) In the event of a default on a loan guaranteed

23 under this section by the Government of the Russian Fed24 eration, the lender may, with the approval of the Sec25 retary, provide for the disposition or utilization of mate-
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1 rials placed under safeguards pursuant to paragraph (1)

2 as security for the loan to repay all or part of the loan.

3 (B) The disposition or utilization of materials under

4 this paragraph shall be in accordance with applicable

5 International Atomic Energy Agency safeguards regarding

6 such materials, and such materials may not, during the

7 course of such disposition or utilization, be removed from

8 such safeguards.

9 (4) Materials placed under International Atomic En10 ergy Agency safeguards pursuant to paragraph (1) shall

11 not be treated as part of the 34.00 metric tons of weapons12 grade plutonium to be used by the Government of the Rus13 sian Federation largely as mixed oxide (MOX) fuel under

14 the Plutonium Disposition Agreement.

15 (f) TREATMENT OF GUARANTEES UNDER PLUTO16 NIUM DISPOSITION AGREEMENT.—The guarantee of any

17 loan under this section shall not be treated as a contribu18 tion to the Government of the Russian Federation under

19 the Plutonium Disposition Agreement.

20 (g) PROHIBITION ON COLLECTION OF FEES.—The

21 Secretary may not impose or collect any fee in connection

22 with the guarantee of a loan under this section.
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1 SEC. 4. SUPPORT OF INTERNATIONAL ATOMIC ENERGY

2 AGENCY MATERIALS SAFEGUARDS.

3 Of the amounts authorized to be appropriated or oth4 erwise made available to the Secretary of Energy each fis5 cal year for Materials Protection Control and Accounting,

6 not more than $15,000,000 shall be available to the Sec7 retary for purposes of covering the expenses of the Inter8 national Atomic Energy Agency (IAEA) in implementing

9 and maintaining safeguards under section 3(e) on mate10 rials providing security for loans guaranteed under section

11 3.

12 SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

13 (a) COST OF LOAN GUARANTEES.—For the cost of

14 the loans guaranteed under this Act as defined in section

15 502 of the Congressional Budget Act of 1974 (2 U.S.C.

16 661(a)), there is authorized to be appropriated for fiscal

17 years 2002 through 2005, such amounts as may be nec18 essary.

19 (b) COST OF ADMINISTRATION.—There is hereby au20 thorized to be appropriated to the Secretary of Energy for

21 fiscal year 2002, $10,000,000 for purposes of activities

22 under this Act, other than to cover costs under subsection

23 (a) and to cover expenses under section 4.

24 (c) AVAILABILITY.—Amounts appropriated pursuant

25 to the authorizations of appropriations in subsections (a)

26 and (b) shall remain available until expended.
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1 SEC. 6. DEFINITIONS.

2 In this Act:

3 (1) HIGHLY ENRICHED URANIUM AGREE4 MENT.—The term ‘‘Highly Enriched Uranium

5 Agreement’’ means the Agreement Between the

6 United States of America and the Government of

7 the Russian Federation Concerning the Disposition

8 of Highly Enriched Uranium Extracted from Nu9 clear Weapons, dated February 18, 1993.

10 (2) NUCLEAR NONPROLIFERATION TREATY.—

11 The term ‘‘Nuclear Nonproliferation Treaty’’ means

12 the Treaty on the Nonproliferation of Nuclear

13 Weapons, as opened for signature July 1, 1968.

14 (3) PLUTONIUM DISPOSITION AGREEMENT.—

15 The term ‘‘Plutonium Disposition Agreement’’

16 means the Agreement Between the Government of

17 the United States of America and the Government

18 of the Russian Federation Concerning the Manage19 ment and Disposition of Plutonium Designated As

20 No Longer Required for Defense Purposes and Re21 lated Cooperation, signed by the United States on

22 September 1, 2000.

23 SEC. 7. TERMINATION OF AUTHORITY.

24 The authority of the Secretary of Energy to guar25 antee loans under this Act shall terminate on December

26 31, 2004. The termination of authority to guarantee loans
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1 under this section shall not affect the validity of any guar2 antee made under this Act before that date.

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