II

106TH CONGRESS

2D SESSION S. 3275

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

DECEMBER 7 (legislative day, SEPTEMBER 22), 2000

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 2000’’.

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 of nuclear nonproliferation programs and activi13 ties of the Government of the Russian Federation.

14 (b) LIMITATIONS ON GUARANTEES.—(1) The aggre15 gate amount of loan principal covered by guarantees under

16 this section at any one time may not exceed

17 $1,000,000,000.

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

19 to principal and to interest on principal only up to 3 per20 cent of principal.

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

22 eligible for guarantee under this section is any loan made

23 by a private lender to the Government of the Russian Fed24 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 both of the

2 following purposes:

3 (A) Support of nuclear nonproliferation pro4 grams and activities of the Government of the Rus5 sian Federation.

6 (B) Development of the energy infrastructure of

7 the Russian Federation, including peaceful uses of

8 nuclear energy in a manner that complies with the

9 Nuclear Nonproliferation Treaty.

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

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

12 purpose or activity under the Plutonium Disposition

13 Agreement, including to cover the costs of the manufac14 ture and use of mixed oxide (MOX) fuel in Russia under

15 the Plutonium Disposition Agreement.

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

17 section shall have the following terms:

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

19 $20,000,000.

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

21 principal increment of the loan shall be not less than

22 15 years.

23 (3) Payments of principal and interest on the

24 loan shall be based on an amortization schedule pro25 viding that—
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1 (A) interest on a principal increment of the

2 loan will commence on the date of the dispersal

3 of the principal increment of the loan;

4 (B) no payment of principal or interest on

5 a principal increment of the loan will be re6 quired for at least 5 years after the date of the

7 dispersal of the principal increment of the loan;

8 (C) once payments of principal and inter9 est commence pursuant to subparagraph (B),

10 such payments will be made on a semi-annual

11 basis; and

12 (D) all interest and principal on each prin13 cipal increment of the loan will be paid not

14 later than the completion of the term of the

15 loan with respect to such principal increment of

16 the loan.

17 (4) The proceeds of the loan shall be dispersed

18 only to the Ministry of Atomic Energy of the Rus19 sian Federation.

20 (5) The lender may, upon default of the Gov21 ernment of the Russian Federation on the loan, ex22 ercise the option described in subsection (e)(3).

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

24 guaranteed under this section, the Government of the Rus25 sian Federation shall, for each loan principal increment
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1 of $20,000,000, place 1.00 metric tons of weapons-usable

2 plutonium and 1.00 metric tons of weapons-usable highly

3 enriched uranium under International Atomic Energy

4 Agency (IAEA) safeguards at a facility in Russia. The

5 placement of materials under such safeguards as security

6 for a principal increment of a loan shall be completed be7 fore the dispersal of the principal increment of the loan.

8 (2) As security for a loan guaranteed under this sec9 tion, the Government of the Russian Federation shall cer10 tify to the Secretary that any materials placed under

11 International Atomic Energy Agency safeguards pursuant

12 to paragraph (1) shall remain under such safeguards in13 definitely, including after the loan is paid off by the Gov14 ernment of the Russian Federation.

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

16 under this section by the Government of the Russian Fed17 eration, the lender may, with the approval of the Sec18 retary, provide for the disposition or utilization of mate19 rials placed under safeguards pursuant to paragraph (1)

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

21 (B) The disposition or utilization of materials under

22 this paragraph shall be in accordance with applicable

23 International Atomic Energy Agency safeguards regarding

24 such materials, and such materials may not, during the
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1 course of such disposition or utilization, be removed from

2 such safeguards.

3 (4) Materials placed under International Atomic En4 ergy Agency safeguards pursuant to paragraph (1) shall

5 not be treated as part of the 34.00 metric tons of weapons6 grade plutonium to be used by the Government of the Rus7 sian Federation largely as mixed oxide (MOX) fuel under

8 the Plutonium Disposition Agreement.

9 (f) TREATMENT OF GUARANTEES UNDER PLUTO10 NIUM DISPOSITION AGREEMENT.—The guarantee of any

11 loan under this section shall not be treated as a contribu12 tion to the Government of the Russian Federation under

13 the Plutonium Disposition Agreement.

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

15 Secretary may not impose or collect any fee in connection

16 with the guarantee of a loan under this section.

17 SEC. 4. SUPPORT OF INTERNATIONAL ATOMIC ENERGY

18 AGENCY MATERIALS SAFEGUARDS.

19 Of the amounts authorized to be appropriated or oth20 erwise made available to the Secretary of Energy each fis21 cal year for Materials Protection Control and Accounting,

22 not more than $15,000,000 shall be available to the Sec23 retary for purposes of covering the expenses of the Inter24 national Atomic Energy Agency (IAEA) in implementing

25 and maintaining safeguards under section 3(e) on mate-
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1 rials providing security for loans guaranteed under section

2 3.

3 SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

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

5 the loans guaranteed under this Act as defined in section

6 502 of the Congressional Budget Act of 1974 (2 U.S.C.

7 661(a)), there is authorized to be appropriated for fiscal

8 years 2001 through 2004, such amounts as may be nec9 essary.

10 (b) COST OF ADMINISTRATION.—There is hereby au11 thorized to be appropriated to the Secretary of Energy for

12 fiscal year 2001, $10,000,000 for purposes of activities

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

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

15 (c) AVAILABILITY.—Amounts appropriated pursuant

16 to the authorizations of appropriations in subsections (a)

17 and (b) shall remain available until expended.

18 SEC. 6. DEFINITIONS

19 In this Act:

20 (1) HIGHLY ENRICHED URANIUM AGREE21 MENT.—The term ‘‘Highly Enriched Uranium

22 Agreement’’ means the Agreement Between the

23 United States of America and the Government of

24 the Russian Federation Concerning the Disposition
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1 of Highly Enriched Uranium Extracted from Nu2 clear Weapons, dated February 18, 1993.

3 (2) NUCLEAR NONPROLIFERATION TREATY.—

4 The term ‘‘Nuclear Nonproliferation Treaty’’ means

5 the Treaty on the Nonproliferation of Nuclear

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

7 (3) PLUTONIUM DISPOSITION AGREEMENT.—

8 The term ‘‘Plutonium Disposition Agreement’’

9 means the Agreement Between the Government of

10 the United States of America and the Government

11 of the Russian Federation Concerning the Manage12 ment and Disposition of Plutonium Designated As

13 No Longer Required for Defense Purposes and Re14 lated Cooperation, signed by the United States on

15 September 1, 2000.

16 SEC. 7. TERMINATION OF AUTHORITY.

17 The authority of the Secretary of Energy to guar18 antee loans under this Act shall terminate on December

19 31, 2003. The termination of authority to guarantee loans

20 under this section shall not affect the validity of any guar21 antee made under this Act before that date.

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