II 119th CONGRESS 1st Session S. 596 IN THE SENATE OF THE UNITED STATES February 13, 2025 Mr. Hickenlooper (for himself, Mr. Graham , Mr. Coons , and Mr. Young ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To establish a pilot program to support domestic critical material processing, and for other purposes.

1. Short title This Act may be cited as the Critical Materials Future Act of 2025 . 2. Definitions In this Act: (1) Country of risk The term country of risk has the meaning given the term in section 10114(a) of the Research and Development, Competition, and Innovation Act ( 42 U.S.C. 18912(a) ). (2) Critical material The term critical material has the meaning given the term in section 7002(a) of the Energy Act of 2020 ( 30 U.S.C. 1606(a) ). (3) Domestic The term domestic means facilities operating within the United States or within any territory or possession of the United States. (4) Eligible project The term eligible project means a project that refines and processes or recycles raw critical materials into purified forms suitable for first-use applications. (5) Entity of concern (A) In general The term entity of concern has the meaning given the term in section 10114(a) of the Research and Development, Competition, and Innovation Act ( 42 U.S.C. 18912(a) ); and (B) Inclusion The term entity of concern includes an entity that the Secretary has determined, using a risk-based approach, is subject to the control or influence of a foreign nation whose strategic interests concerning critical materials does not align with the strategic interests of the United States. (6) Innovative financial tools The term innovative financial tools means financial instruments to support demand-side economic mechanisms, including— (A) pricing support mechanisms, such as contracts for difference and price floors, advanced market commitments, and forward contracts; and (B) other transactions that the Secretary may enter into under section 646 of the Department of Energy Organization Act ( 42 U.S.C. 7256 ). (7) Pilot program The term Pilot Program means the Domestic Critical Material Processing Pilot Program established under section 4(a). (8) Reliable sources (A) In general The term reliable source has the meaning given the term in section 12 of the Strategic and Critical Materials Stock Piling Act ( 50 U.S.C. 98h–3 ). (B) Inclusions The term reliable source includes facilities owned by, controlled by, or subject to the jurisdiction of any country— (i) with which the United States has a free trade agreement in effect; and (ii) designated a major non-NATO ally under section 517 of the Foreign Assistance Act of 1961 ( 22 U.S.C. 2321k ). (9) Secretary The term Secretary means the Secretary of Energy. 3. Purposes The purposes of this Act are— (1) to support domestic critical material processing with innovative financial tools to reduce supply chain vulnerabilities and enhance energy and national security; and (2) to evaluate the effectiveness of innovative financial tools in supporting investment in and expanding domestic critical materials processing, including the impact of different support mechanisms on project development for various critical materials and fostering more liquid, transparent, and predictable markets for critical materials. 4. Domestic critical material processing pilot program (a) Establishment Not later than 180 days after the date of enactment of this Act, the Secretary shall establish a pilot program, to be known as the Domestic Critical Material Processing Pilot Program , to support not fewer than 3 domestic critical material processing projects. (b) Objectives The objectives of the Pilot Program are— (1) to provide financial stability and attract private investment in eligible domestic critical material processing projects; (2) to analyze how different financial tools influence critical material market dynamics and projects and the estimated level of financial support needed to secure reliable United States supply chains for various critical materials and support a sufficient domestic critical materials processing industry; and (3) to reduce supply chain vulnerabilities and enhance energy security and national security. (c) Requirements (1) Implementation (A) Regulations Not later than 180 days after the date of enactment of this Act, the Secretary shall issue regulations to implement the Pilot Program. (B) Other transaction authority In carrying out the Pilot Program, the Secretary shall have the authority to enter into other transactions in the same manner and subject to the same terms and conditions as transactions that the Secretary may enter into under section 646 of the Department of Energy Organization Act ( 42 U.S.C. 7256 ). (C) Flexible hiring authority The Secretary may appoint and fix the compensation of such temporary personnel as may be necessary to carry out and implement the Pilot Program, without regard to the provisions of subchapter I of chapter 33 of title 5, United States Code, governing appointments in competitive service and compensation of personnel. (D) Consultation The Secretary shall consult outside stakeholders and experts, including mining and critical material processing industry representatives, financial experts, and academic researchers, during development of the Pilot Program for purposes of improving the effectiveness and efficiency of the Pilot Program. (2) Diversity (A) In general Subject to subparagraph (B), the Pilot Program shall provide support for the processing of not fewer than 3 different critical materials in order to gain insight into the impact of innovative financial tools on different critical material markets. (B) Limitation Support provided under subparagraph (A) to a single critical material shall not exceed 50 percent of any funding provided to the Pilot Program under subsection (h). (3) Sunset The Pilot Program shall terminate on the date that is not later than 5 years after the date the Pilot Program is established under subsection (a). (d) Applications (1) In general Applications under the Pilot Program for eligible projects shall be submitted to the Secretary at such time, in such manner, and containing such information as the Secretary may require. (2) Eligibility criteria (A) In general The Secretary shall review and select applications under the Pilot Program for eligible projects based on— (i) the potential of the eligible project to enhance the economic, energy, and national security of the United States; (ii) the economic competitiveness of the eligible project; (iii) the economic and financial sustainability of the eligible project, using information such as— (I) the potential for the applicant of the eligible project to secure an offtake agreement if the eligible project is selected; and (II) an analysis of the estimated production costs of the eligible project and prevailing or anticipated market prices; (iv) the potential of the eligible project to mitigate risks associated with importing critical materials from entities of concern; (v) the prioritization requirements described in subparagraph (B); and (vi) other factors, as determined by the Secretary, in coordination with the agencies described in subsection (e). (B) Priority In selecting applications under the Pilot Program for eligible projects, the Secretary shall prioritize eligible projects— (i) that use feedstock from domestic or reliable sources, with higher priority given to eligible projects that have greater use of feedstock from domestic sources; (ii) the selection of which would support the ability of the applicant to secure an offtake agreement with domestic or reliable sources; and (iii) that are the most economically competitive, as determined by the Secretary, based on factors including— (I) the potential for the applicant of the eligible project to secure an offtake agreement if selected; and (II) the difference between the estimated production costs of the eligible project and prevailing or anticipated market prices. (3) Timeline The Secretary shall select applications under the Pilot Program for eligible projects not later than 1 year after the date of enactment of this Act. (e) Coordination (1) In general To ensure the efficient implementation and operation of the Pilot Program, the Secretary shall coordinate with— (A) the Secretary of Commerce; (B) the Secretary of Defense; (C) the Secretary of the Interior; (D) the Secretary of State; (E) the Director of the United States Geological Survey; (F) the United States Trade Representative; and (G) the heads of other Federal departments and agencies, as determined by the Secretary. (2) Security research and development When selecting applications and determining the level of financial support for each project under the Pilot Program, the Secretary shall coordinate with the Secretary of Defense to incorporate insights from the Open Price Exploration for National Security research and development program of the Defense Advanced Research Projects Agency. (f) Study (1) In general Not later than 2 years after the date on which the Pilot Program terminates under subsection (c)(3), the Secretary shall conduct and publish a study on— (A) the impact of innovative financial tools on the critical materials sector and the relative cost-effectiveness of those tools in supporting domestic critical materials processing projects and developing more liquid, transparent, and predictable markets for critical materials; (B) the estimated level of financial support needed to secure reliable United States supply chains for various critical materials and support a sufficient domestic critical materials processing industry; (C) the potential of critical material recycling to support the domestic critical materials market; (D) the effectiveness of the Pilot Program, including an evaluation of each eligible project supported by the Pilot Program; and (E) whether the models of the Open Price Exploration for National Security research and development program of the Defense Advanced Research Projects Agency allowed the Pilot Program to better anticipate market trends, optimize resource allocation, and provide the appropriate level of support based on current and future critical material market needs. (2) Insights The study under paragraph (1) shall include insights into concerns of private investors in different critical material markets and the impact of innovative financial tools on catalyzing final investment decisions. (3) Stakeholder engagement The study under paragraph (1) shall be carried out in consultation with relevant stakeholders, as determined by the Secretary, including mining and critical material processing industry representatives, financial experts, local governments hosting critical material processing projects, and academic researchers. (4) DARPA OPEN program The Secretary shall share the results of the study under paragraph (1) with the Open Price Exploration for National Security research and development program of the Defense Advanced Research Projects Agency to inform ongoing research and development of tools to support transparency in domestic critical materials markets. (g) Report (1) In general The Secretary shall submit to the Committees on Energy and Natural Resources, Foreign Relations, and Armed Services of the Senate, and the Committees on Natural Resources, Energy and Commerce, and Armed Services of the House of Representatives, an annual report for each year that the Pilot Program is carried out. (2) Contents The report under paragraph (1) shall include— (A) activities, expenditures, and outcomes of the Pilot Program; (B) recommendations to Congress on the continuation or expansion of the Pilot Program; and (C) recommendations for how the Federal Government should use innovative financial tools— (i) to increase domestic critical materials processing capacity; (ii) to strengthen domestic critical material supply chains by increasing United States processing capacity using domestic feedstock; (iii) to mitigate market volatility; (iv) to boost price transparency in critical materials markets; (v) to leverage market indices in countries other than those designated as countries of risk; (vi) to ensure long-term adequate supplies of critical materials for the economy of the United States; and (vii) to increase the domestic recycling of critical materials. (h) Funding (1) Financial mechanisms (A) In general In establishing and carrying out the Pilot Program, the Secretary shall enter into agreements, including contracts, grants, and cooperative agreements, and other transactions, as determined by the Secretary, to enable the use of innovative financial tools to support domestic critical material processing projects. (B) Authority In carrying out subparagraph (A), the Secretary may use innovative financial tools, including price support such as contracts for differences, and leverage functions to develop and drive critical materials processing to entities that are not entities of concern, under such terms and conditions as the Secretary determines to be necessary or appropriate. (2) Reinvestment of revenue (A) Establishment There is established in the Treasury of the United States a fund, to be known as the Critical Materials Revolving Fund (referred to in this paragraph as the Fund ). (B) Purposes The Fund shall be available to the Secretary as a revolving fund— (i) to reinvest amounts generated from eligible projects into new critical materials processing projects under the Pilot Program; and (ii) to further enhance the objectives of the Pilot Program. (3) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this Act $750,000,000, to remain available until expended.