I
105TH CONGRESS
2D SESSION
H. R. 3941
To amend the United States Enrichment Corporation Privatization Act.
IN THE HOUSE OF REPRESENTATIVES
MAY 21, 1998
Mr. STRICKLAND (for himself and Mr. WHITFIELD) introduced the following
bill; which was referred to the Committee on Commerce
A BILL
To amend the United States Enrichment Corporation
Privatization Act.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Assisting Acquisition
of Russian Material Act (AARM Act)’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds the following:
(1) The maintenance of the Russian HEU
Agreement and the timely and satisfactory acquisi-
tion of Russian highly enriched uranium (referred to
as ‘‘HEU’’) under that Agreement by the Depart-
ment of Energy and the United States Executive
Agent is essential to the national security and for-
eign policy interests of the United States.
(2) Implementation of the Russian HEU Agree-
ment will result in the import of a total of 500 met-
ric tons of weapons-grade enriched uranium into the
United States, and commencing in 1999, the Rus-
sian HEU under the agreement will be imported at
a rate of 30 metric tons per year. When converted
into low enriched uranium (referred to as ‘‘LEU’’)
for use in nuclear reactors to generate electricity, it
will equal a substantial portion of United States util-
ity demand for nuclear fuel.
(3) The United States Enrichment Corporation
is required at the time of privatization to meet the
statutory requirements set out in subsection (b)(2)
of this section and, except for subparagraphs (A)
and (H), following privatization. The execution of
the Russian HEU Agreement will significantly in-
crease the supply of LEU fuel available in the
United States marketplace; and, as a result and in
order to balance supply with demand, the privatized
United States Enrichment Corporation may have to
take actions contrary to or inconsistent with main-
taining long-term viability, continued operation of
the gaseous diffusion plants, and a reliable and eco-
nomical domestic source of uranium mining, enrich-
ment, and conversion services, and other statutory
requirements referred to in subsection (b)(2).
(4) The principal responsibility for ensuring the
faithful implementation of the United States obliga-
tions under the Russian HEU Agreement, which is
a government-to-government agreement, lies with the
Department of Energy; and the execution of those
obligations is an inherently governmental function
under the foreign policy of the United States.
(5) Therefore, the Department of Energy shall,
subject to appropriations, acquire directly or from
the United States Executive Agent such amounts of
the Russian HEU converted to LEU under the Rus-
sian HEU Agreement, and withhold such amounts
from resale into the private market for such period
of time, as may be necessary to fully achieve the na-
tional security goals of the United States under the
Russian HEU Agreement and to allow a privatized
United States Enrichment Corporation to meet the
statutory requirements of the privatization.
(b) PURPOSES.—The purposes of this Act are—
(1) To achieve the national security objectives
of the Russian HEU Agreement.
(2) To achieve the requirements for privatiza-
tion of the United States Enrichment Corporation
set out in the Energy Policy Act of 1992 and the
United States Enrichment Corporation Privatization
Act, as follows:
(A) Assure that privatization will result in
a return to the United States at least equal to
the net present value of the Corporation.
(B) Assure that privatization will not re-
sult in the Corporation being owned, controlled,
or dominated by an alien, a foreign corporation,
or a foreign government.
(C) Assure that the privatization will not
be inimical to the health and safety of the pub-
lic or the common defense and security.
(D) Provide reasonable assurance that ade-
quate enrichment capacity will remain available
to meet the demands of the domestic electric
utility industry.
(E) Assure that privatization will provide
for the long-term viability of the Corporation.
(F) Assure that privatization will provide
for the continuation by the Corporation of the
operation of the Department of Energy’s gase-
ous diffusion plants.
(G) Assure that privatization will provide
for the protection of the public interest in main-
taining a reliable and economical domestic
source of uranium mining, enrichment, and con-
version services.
(H) To the extent not inconsistent with re-
quirements of subparagraphs (E), (F), and (G),
assure that privatization will secure the maxi-
mum proceeds to the United States.
(3) To monitor and determine the effect the
LEU delivered under the Russian HEU Agreement
is having on the domestic uranium mining, conver-
sion, and enrichment industries and the operation of
the gaseous diffusion plants, and to prevent or miti-
gate any material adverse impact on such industries
or any loss of employment at the gaseous diffusion
plants as a result of the Russian HEU Agreement.
SEC. 4. STANDBY AUTHORIZATION.
Section 3112(b) of the United States Enrichment
Corporation Privatization Act (42 U.S.C. 2297h–10) is
amended by adding at the end the following:
‘‘(11) The Secretary is authorized to purchase and
hold any amount of any contract obligation of the United
States Executive Agent to acquire Russian HEU con-
verted to LEU under the Russian HEU Agreement during
any year in which the Russian HEU Agreement is in
force, and resell such material, upon the following terms
and conditions:
‘‘(A) At the end of any month, the United
States Enrichment Corporation shall certify to the
Secretary when enrichment of uranium at the gase-
ous diffusion plants, measured in SWU, for the pre-
vious 12 months, is determined to be 25 percent
below the average annual enrichment in SWU for
the years 1992 through 1997.
‘‘(B) In its certification under subparagraph
(A), the United States Enrichment Corporation shall
indicate the effects that the purchase and resale of
the converted Russian HEU by the United States
Executive Agent under the Russian HEU Agreement
are having on its long-term viability, including its
operations, costs, sales and profitability, and in par-
ticular any reduction in the levels of enrichment
services and employment at the gaseous diffusion
plants or threat thereof. The United States Enrich-
ment Corporation shall also certify what actions it
has taken or may be required to take to mitigate
such effects of the purchases and resales of the con-
verted Russian HEU under the Russian HEU
Agreement when combined with other effects and
causes in the marketplace.
‘‘(C) Within 30 days of the certification by the
United States Enrichment Corporation under sub-
paragraphs (A) and (B), the Secretary shall review
that certification and make a report to the President
which shall include any recommendation for the Sec-
retary to purchase directly, or from the United
States Executive Agent, and hold a sufficient
amount of converted Russian HEU under the Rus-
sian HEU Agreement to assure that the national se-
curity objectives of the Russian HEU Agreement are
met and that the United States Enrichment Cor-
poration is able to meet its obligations under this
Act to provide for the long-term viability of the Cor-
poration, the continuation by the Corporation of the
operation of the Department of Energy’s gaseous
diffusion plants, and for the protection of the public
interest in maintaining a reliable and economical do-
mestic source of uranium mining, conversion, and
enrichment services. The Secretary shall deliver a
copy of the report to the Senate Committee on En-
ergy and Natural Resources and the House of Rep-
resentatives Committee on Commerce and shall pub-
lish it in the Federal Register. The Secretary shall
not publicly disclose essential proprietary informa-
tion of the United States Enrichment Corporation or
the United States Executive Agent, as determined
by regulations promulgated by the Secretary, con-
sistent with providing the greatest amount of infor-
mation to the public, particularly in the communities
directly affected, and to all parties in interest in the
enrichment of uranium at the gaseous diffusion
plants and shareholders or stakeholders in the
United States Enrichment Corporation and the
United States Executive Agent.
‘‘(D) The President shall thereafter direct the
Secretary to acquire such amounts of converted Rus-
sian HEU under the Russian HEU Agreement as
the President determines necessary for these pur-
poses from funds available for such purposes. The
President shall also request appropriations from the
Congress for current and future acquisitions of such
amount of such converted Russian HEU as the
President determines necessary for these purposes.
Within 10 days of receipt of the report by the Sec-
retary, the President shall request an investigation
under section 332 of the Tariff Act of 1930 (19
U.S.C. 1332) of the impact of the Russian HEU
Agreement on the operations and employment at the
gaseous diffusion plants and the uranium mining,
enrichment, and conversion industries in the United
States. Such investigation shall be completed within
3 months of such request and the Commission shall
report the results to the President and the Congress.
‘‘(E) As directed by the President, the Sec-
retary shall acquire such amounts of converted Rus-
sian HEU under the Russian HEU Agreement in
such manner and at such prices as authorized under
the Russian HEU Agreement and shall withhold
such amounts from resale into the private markets
of the United States or elsewhere until such time as
it is determined, pursuant to regulations promul-
gated by the Secretary, that the United States En-
richment Corporation is producing enrichment serv-
ices measured in SWU at the gaseous diffusion
plants for a consecutive 12-month period that equals
or exceeds 110 percent of the average annual enrich-
ment in SWU for the period 1992 through 1997.
‘‘(F) Upon the determination referred to in
subparagraph (E), the Secretary may then, pursuant
to regulations promulgated by the Secretary, auction
for resale an amount of converted Russian HEU ac-
quired under this Act which is not more than the
amount in excess of 100 percent of the average an-
nual enrichment in SWU for the period 1992
through 1997. Such amounts of converted Russian
HEU shall not be sold in any manner that would
have a material adverse impact on the domestic ura-
nium mining, conversion, or enrichment industry
and shall not be sold directly to end-users in direct
competition with the United States Enrichment Cor-
poration. Such amounts of converted Russian HEU
shall not be sold at prices less than current market
prices for comparable sales, but in no event may
such sale prices by the Secretary be less than the
amount paid for any such lot or lots, plus the ex-
penses of holding and sale by the Secretary. Pur-
chasers at such auction may not sell to end-users at
any price that is less than the price, including ex-
penses of the Secretary, paid to the Secretary at
such auction. The term ‘material adverse impact’, as
used in this Act, shall have the same meaning as
‘material injury’ under section 771(7) of the Tariff
Act of 1930 (19 U.S.C. 1677(7)) and the Secretary
shall consider the impacts and relevant factors af-
fecting the domestic industry as enumerated in sub-
paragraphs (B) and (C) of such section.
‘‘(G) The regulations required to be promul-
gated by the Secretary under subparagraphs (E)
and (F) shall be subject to the administrative proce-
dures required by chapter 5 of title 5, United States
Code, shall be proposed within 90 days of the date
of the enactment of the Assisting Acquisition of
Russian Material Act, allow not less than a 90-day
comment period, and shall become final no less than
one year from the date of the enactment of such
Act. Such regulations shall—
‘‘(i) establish the procedures for the deter-
mination of maximum allowable amount of con-
verted Russian HEU eligible for sale under sub-
paragraph (F);
‘‘(ii) establish the criteria for determining
the current market price at the time of sale,
and the minimum price which is the sum of the
Secretary’s acquisition, holding, and sales costs
of each lot acquired, except that the Secretary
may provide for the separate payment of the
costs of sale by successful bidders by a percent-
age commission of the sale price or otherwise;
‘‘(iii) provide for the qualifications of buy-
ers to assure they are authorized to handle the
nuclear materials and are not end-users;
‘‘(iv) provide for not less than 45 days no-
tice of a sale, which notice shall set out the
maximum allowable amounts of converted Rus-
sian HEU eligible for sale and the minimum
price calculated for each lot offered for sale and
the basis for such determinations;
‘‘(v) shall allow for comment on such no-
tice, the purpose of which is to avoid any mate-
rial adverse impact on the domestic uranium
mining, conversion, or enrichment industries
from such sale;
‘‘(vi) provide for a determination that less
than the maximum allowable amount of mate-
rial may be offered for sale in order to avoid
any material adverse impact and that a sale
may be made in installments to avoid such im-
pact; and
‘‘(vii) provide procedures for determining
that the resales by buyers from the Secretary
were made to eligible end-users at prices in ac-
cord with subparagraph (F) and the require-
ments of this Act.
‘‘(H) Any action alleging a violation of any pro-
vision of this Act may be brought in any district
court of the United States having jurisdiction over
the parties (except in those instances where another
law specifically requires a different venue) without
regard to the amount in controversy or the citizen-
ship of the parties.’’.
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