Material supply chain public-private partnership

(a) Public-Private partnership (1) In general Not later than 1 year after the date of enactment of this section, the Secretary, acting through the head of the Center, in consultation with the Secretary of State, and through the collaboration required under section 104, shall establish a public-private partnership to— (A) support the development of a resilient supply chain; (B) bolster the national, energy, and economic security of the United States; and (C) support the development of supply chain characteristics in the interests of the United States, including— (i) transparency and traceability; (ii) environmental sustainability; (iii) workforce security and safety; and (iv) innovation. (2) Duties The public-private partnership shall— (A) engage with stakeholders from across the critical material supply chain, prioritizing domestic stakeholders, including through— (i) convening such stakeholders for regular meetings to inform the activities of the public-private partnership; and (ii) accepting membership from industry, nonprofit organizations, trade associations, academia, labor organizations, and equivalent international partners; (B) advise the Center on creating a robust understanding of a critical material supply chain, including through advancing the understanding of, with respect to such supply chain— (i) market dynamics including market manipulation by foreign countries of concern; (ii) pricing and availability dynamics; (iii) transparency and traceability; (iv) environmental sustainability; (v) education and workforce development; (vi) labor law compliance; and (vii) barriers to adopting innovative technologies, materials, and techniques; (C) establish partnerships with international partners, excluding foreign entities of concern or a foreign entity in a foreign country of concern, to advance the national, energy, and economic security of the United States; (D) operate the Investment Fund established under subsection (b); and (E) not later than one year after the public-private partnership is established, and annually thereafter, publish at least one report on the internet website of the Department of Commerce summarizing the activities undertaken by the public-private partnership during the most recent fiscal year prior to publication of such report, and such report shall include— (i) a summary of the advice provided to the Center established in section 102(a); (ii) a summary of the membership of the public-private partnership; (iii) a summary of the activities carried out by the Investment Fund established in subsection (b); and (iv) a summary of any international collaborations carried out by the public-private partnership. (3) Funding Subject to the availability of appropriations, out of the funds authorized to be appropriated pursuant to section 106(a), the Secretary shall allocate up to the following amounts to carry out this subsection: (A) $15,000,000 for fiscal year 2026. (B) $30,000,000 for fiscal year 2027. (C) $45,000,000 for fiscal year 2028. (D) $60,000,000 for fiscal year 2029. (E) $75,000,000 for the period of fiscal year 2030 and each fiscal year thereafter prior to the expiration of the program. (b) Investment fund (1) In general Not later than one year after the establishment of the public-private partnership under subsection (a), the public-private partnership shall establish an investment fund (in this section referred to as the Investment Fund) to support existing Federal and private investments to acquire, establish, or enhance facilities related to developing domestic and foreign critical material manufacturing capabilities for the national, energy, and economic security of the United States. (2) Duties The Investment Fund shall— (A) accept and solicit funds from entities described in subsection (a)(2)(A)(ii) to invest and support facilities to expand domestic and foreign capabilities to manufacture critical materials for the national, energy, and economic security of the United States, in accordance with the eligibility requirements described in section 103(b); (B) buy and sell critical materials from the global marketplace, prioritizing domestic producers, to support the transition to resilient supply chains with stable market prices and store such purchased critical materials within the United States; (C) invest in innovative partnerships with critical material supply chain stakeholders with a prioritization for starts-ups, small and medium-sized enterprises, and other entities supporting innovative technologies, materials, or techniques; (D) provide innovative financial tools and other risk mitigation mechanisms, such as insurance products, that follow existing procurement policies as implemented pursuant to section 2(a)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 625(a)(1)), directly or in partnership with entities currently providing such tools and mechanisms, to stabilize market prices and support domestic capabilities; (E) support demonstration, deployment, and adoption activities related to innovative technologies, materials, including qualified substitutes, or techniques to promote sustainability and increased resiliency, with sufficient research collaboration safeguards to protect domestic proprietary information; (F) invest acquired profit from activities in subparagraphs (A) and (B) to further the mission of the Investment Fund; and (G) consult regularly with Federal agencies and departments identified in section 104, including the Export-Import Bank of the United States and the United States International Development Finance Corporation, to ensure alignment with existing Federal efforts designed to promote, fund, resource critical material manufacturing domestically or in a foreign country of interest. (3) Loan program eligibility (A) In general The Investment Fund shall— (i) be eligible to receive a loan under the loan program established in section 103(a) after submission of the application under subparagraph (B) of this paragraph; and (ii) not be eligible to apply for or receive a loan guarantee under the loan program in section 103(a). (B) Application To receive a Federal loan under the loan program established in section 103(a), the Investment Fund shall submit to the Secretary an application that includes— (i) a list of projects, in accordance with the eligibility requirements described in section 103(b)(2), that the fund will support through the receipt of a Federal loan under such program; and (ii) any other information the Secretary determines appropriate to evaluate the eligibility of the projects submitted under clause (i) for such loan program. (C) Award amount Each award made to the Investment Fund under the loan program established in section 103(a) shall— (i) be in an amount the Secretary determines appropriate; and (ii) not exceed 25 percent of the available loan authority of such loan program for a given fiscal year. (D) Eligible forgiveness Subject to the agreement requirements under subparagraph (G) and to the extent the Investment Fund maintains good standing, as determined by the Secretary, such Secretary may forgive all or part of a loan awarded to the Investment Fund under this paragraph in an eligible fiscal year, in accordance with the authorities of the agency. (E) Tax treatment For purposes of the Internal Revenue Code of 1986— (i) no amount shall be included in the gross income of the Investment Fund by reason of forgiveness of indebtedness described in subparagraph (D); (ii) no deduction shall be denied, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by clause (i); and (iii) in the case that the Investment Fund is a partnership or S corporation— (I) any amount excluded from income by reason of clause (i) shall be treated as tax exempt income for purposes of sections 705 and 1366 of the Internal Revenue Code of 1986; and (II) except as provided by the Secretary of the Treasury, or a delegate of such Secretary, any increase in the adjusted basis of an interest of a partner in a partnership under section 705 of the Internal Revenue Code of 1986, with respect to any amount described in subclause (I), shall equal the distributive share of deductions of such partner resulting from costs giving rise to forgiveness described in subclause (I). (F) Effective date for tax treatment The provisions made by subparagraph (E) shall apply to taxable years beginning after December 31, 2025. (G) Required agreement Pursuant to section 103(i)— (i) the Secretary shall enter into the required agreement with the Investment Fund; and (ii) the Investment Fund shall take on full responsibility for the required agreement and the actions of the projects that use funds awarded by the loan program established in section 103(a) to the Investment Fund. (H) Disclosure Not later than one year after date on which the Investment Fund is established under paragraph (1), and annually thereafter, the Investment Fund shall provide an annual report to the Secretary which shall— (i) include all actions taken by the Investment Fund upon receipt of each award; (ii) include any additional information the Secretary determines appropriate to ensure robust oversight of the use of each loan awarded to the Investment Fund; and (iii) be published on the internet website of the Department of Commerce. (I) Clawback Pursuant to section 103(j), the Secretary shall have the authority to recover, or dispense of, up to the full amount of each loan awarded by the loan program established in section 103(a) for a given fiscal year if— (i) the Investment Fund fails to comply with the required agreement in subparagraph (G); or (ii) the Secretary is notified of the inability of the Investment Fund to use such an award in accordance with section 103(h). (J) Failure to comply If the Secretary is not satisfied with the actions taken by the Investment Fund, including failure by the Investment Fund to comply with the eligibility requirements for the loan program established under section 103(a) or the improper use of funds awarded by such loan program to the Investment Fund, the Investment Fund shall— (i) be ineligible for future awards by such loan program; and (ii) remain ineligible until— (I) the Investment Fund presents an executable plan that the Secretary determines appropriate to satisfy the requirements of section 103(b) or section 103(h); (II) the Secretary shall submit to Congress a report outlining the corrective actions the Investment Fund has taken to be eligible to apply for such loan program again; and (III) the Secretary determines that the Investment Fund is eligible to apply for such loan program again. (K) Labor-management cooperation Notwithstanding any other provision of law, including the National Labor Relations Act (29 U.S.C. 151 et seq.), any recipient of a loan under this section who is an employer, and any labor organization who represents or seeks to represent any employees or only those employees who perform or will perform work funded by a loan provided under this section, shall be subject to the provisions of section 103(k) of this title. (L) Wage rate requirements (i) Davis-bacon All laborers and mechanics employed by the covered entity receiving funding under this section or employed by contractors or subcontractors related to a covered project, shall be paid wages at rates not less than those prevailing on similar projects in the locality, as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act). (ii) Authority The Secretary of Labor shall have, with respect to the labor standards specified in this subparagraph, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (5 U.S.C. App.; relating to coordination of administration and consistency of enforcement of certain labor standards for Federal employees) and section 3145 of title 40, United States Code. (4) Oversight Not later than 2 years after the first loan is awarded to the Investment Fund under the loan program established in section 103(a), the Inspector General of the Department of Commerce shall audit the Investment Fund and submit to Congress a report— (A) that assesses whether the Investment Fund has complied with the requirements of this title, including— (i) the requirements under section 103(b) for maintaining eligibility for the joint loan program; (ii) the requirements under section 103(h) regarding the proper use of awarded or guaranteed funds; (iii) the exclusion of foreign entities of concern or foreign countries of concern; and (iv) any additional requirements that the Investment Fund must meet as determined appropriate by the Secretary; and (B) that proposes a course of action for the Secretary to— (i) remedy each violation by the Investment Fund found, if any; and (ii) monitor the progress of the Investment Fund towards remedying each violation found by the Secretary. (c) Exclusion of certain funds The Investment Fund under subsection (b) may not accept funds from, allow membership to, create research collaborations with, or partner with a foreign entity of concern or a foreign entity within a foreign country of concern or a nonmarket economy country.