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110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-196

======================================================================



 
 INTERNATIONAL NUCLEAR FUEL FOR PEACE AND NONPROLIFERATION ACT OF 2007

                                _______
                                

 June 18, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Lantos, from the Committee on Foreign Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 885]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Foreign Affairs, to whom was referred the 
bill (H.R. 885) to support the establishment of an 
international regime for the assured supply of nuclear fuel for 
peaceful means and to authorize voluntary contributions to the 
International Atomic Energy Agency to support the establishment 
of an international nuclear fuel bank, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     2
Summary..........................................................     5
Background and Purpose...........................................     6
Hearings.........................................................     8
Committee Consideration..........................................     8
Votes of the Committee...........................................     8
Committee Oversight Findings.....................................     8
New Budget Authority and Tax Expenditures........................     9
Congressional Budget Office Cost Estimate........................     9
Performance Goals and Objectives.................................    10
Constitutional Authority Statement...............................    10
New Advisory Committees..........................................    10
Congressional Accountability Act.................................    10
Earmark Identification...........................................    10
Section-by-Section Analysis......................................    10

                             The Amendment

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``International 
Nuclear Fuel for Peace and Nonproliferation Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.

 TITLE I--INTERNATIONAL REGIME FOR THE ASSURED SUPPLY OF NUCLEAR FUEL 
                           FOR PEACEFUL MEANS

Sec. 101. Findings.
Sec. 102. Sense of Congress.
Sec. 103. Statements of policy.
Sec. 104. Report.

               TITLE II--INTERNATIONAL NUCLEAR FUEL BANK

Sec. 201. Voluntary contributions to the International Atomic Energy 
Agency.
Sec. 202. Authorization of appropriations.

 TITLE I--INTERNATIONAL REGIME FOR THE ASSURED SUPPLY OF NUCLEAR FUEL 
                           FOR PEACEFUL MEANS

SEC. 101. FINDINGS.

     Congress makes the following findings:
            (1) Since the United States Baruch Plan of 1946, the United 
        States has believed that an increase in the number of countries 
        that possess nuclear weapons and the means to create such 
        weapons makes the world less secure and stable by increasing 
        the chances that nuclear weapons would be used. A world in 
        which nuclear weapons are used again is less secure for all 
        concerned, and could well trigger a global arms race, as more 
        countries will be tempted to arm themselves with nuclear 
        weapons to prevent attacks by countries that possess nuclear 
        weapons.
            (2) It is therefore in the general security interest of all 
        countries, and in the vital national security interest of the 
        United States, that the number of countries that possess a 
        nuclear weapons capability necessarily be kept to a minimum and 
        ultimately reduced.
            (3) Uranium enrichment and spent-fuel reprocessing 
        facilities produce nuclear material that can either be used for 
        peaceful purposes in electricity-generating reactors, or can be 
        used to produce uranium and plutonium for nuclear weapons. As 
        such, these facilities are inherently a proliferation risk, 
        allowing their possessor to be just months away from the 
        production of a nuclear explosive device.
            (4) It is also therefore in the general security interest 
        of all countries that the number of countries that operate 
        uranium enrichment and spent-fuel reprocessing facilities also 
        be kept to a minimum, consistent with the global demand for 
        nuclear power reactor fuel.
            (5) The financing and construction of additional uranium 
        enrichment and spent-fuel reprocessing facilities in additional 
        states around the world is indefensible on economic grounds 
        alone, given current and future supplies of uranium and 
        existing providers of uranium enrichment and spent-fuel 
        reprocessing services to the world market.
            (6) The desire to construct uranium enrichment and spent-
        fuel reprocessing facilities by additional countries, 
        therefore, is often based upon considerations other than 
        economic calculations. The possession of such facilities is 
        often elevated to a matter of national pride--a demonstration 
        to the world that the country that possesses this technology 
        has arrived at a level of technological development comparable 
        to that of the United States and other countries with advanced 
        civil nuclear power programs.
            (7) Furthermore, the acquisition of uranium enrichment and 
        spent-fuel reprocessing facilities can be perceived as a 
        demonstration of the developing world's independence from 
        technological domination by the more developed states. Article 
        IV of the Treaty on the Nonproliferation of Nuclear Weapons 
        (NPT) recognizes that State Parties have an ``inalienable right 
        . . . to develop research, production and use of nuclear energy 
        for peaceful purposes without discrimination.''. However, this 
        is a qualified right conditioned by a State Party's acting in 
        conformity with the NPT's obligation for such countries not to 
        acquire, possess, or develop nuclear weapons or nuclear 
        explosive devices.
            (8) It has been long recognized that the proliferation of 
        national uranium enrichment and spent-fuel reprocessing 
        facilities would increase the likelihood of the emergence of 
        new nuclear weapon states. Concerned governments, 
        nongovernmental organizations, and individual experts have for 
        decades recognized the need to address this problem through 
        multilateral assurances of the uninterrupted supply of nuclear 
        fuel, the sharing of peaceful application of nuclear energy, an 
        international fuel bank to provide fuel if the fuel supply to a 
        country is disrupted, and even multilateral participation in 
        international uranium enrichment and spent-fuel reprocessing 
        facilities, as a means of reducing incentives of countries to 
        develop and construct such facilities themselves.
            (9) Until recently, such efforts have produced little more 
        than reports. However, the revelations of a nuclear black-
        market in uranium enrichment technology and equipment, combined 
        with the attempt by North Korea and Iran to possess such 
        technology and equipment to provide the basis for nuclear 
        weapons programs, have rekindled this debate with a new 
        urgency.
            (10) Iran has used the specter of a potentially unreliable 
        international supply of nuclear reactor fuel as a pretext for 
        developing its own uranium enrichment and spent-fuel 
        reprocessing capability, which would enable Iran to also 
        produce weapons-grade uranium and plutonium for nuclear 
        weapons.
            (11) Several initiatives have been proposed over the last 
        year to address these concerns. The United States has proposed 
        the Global Nuclear Energy Partnership (GNEP), which envisions a 
        consortium of countries with advanced nuclear capabilities 
        providing nuclear fuel services--fresh fuel and recovery of 
        used fuel--to other countries that agree to employ nuclear 
        energy only for power generation purposes, without possessing 
        national uranium enrichment and spent-fuel reprocessing 
        facilities.
            (12) The United States also joined France, the Russian 
        Federation, Germany, the United Kingdom, and the Netherlands on 
        May 31, 2006, in proposing a ``Concept for a Multilateral 
        Mechanism for Reliable Access to Nuclear Fuel'' that would 
        facilitate or create new arrangements between suppliers and 
        recipients to provide fuel to countries with good 
        nonproliferation credentials in case of market failure.
            (13) Any assurance of the supply of nuclear fuel should 
        meet the condition outlined by President George W. Bush on 
        February 11, 2004, that ``The world's leading nuclear exporters 
        should ensure that states have reliable access at reasonable 
        cost to fuel for civilian reactors, so long as those states 
        renounce enrichment and reprocessing.''.
            (14) The Russian Federation has proposed that one of its 
        uranium enrichment facilities be placed under international 
        management and oversight, as part of a ``Global Nuclear Power 
        Infrastructure'' proposal to create international nuclear fuel 
        cycle centers.
            (15) In conclusion, the creation of a multi-tiered system 
        to assure the supply of nuclear reactor fuel at current market 
        prices, under appropriate safeguards and conditions, could 
        reassure countries that are dependent upon or will construct 
        nuclear power reactors that they will have an assured supply of 
        nuclear fuel at current market prices, so long as such 
        countries forgo national uranium enrichment and spent-fuel 
        reprocessing facilities and are committed to the 
        nonproliferation of nuclear weapons.

SEC. 102. SENSE OF CONGRESS.

     It is the sense of Congress that--
            (1) the ``Concept for a Multilateral Mechanism for Reliable 
        Access to Nuclear Fuel'', proposed by the United States, 
        France, the Russian Federation, Germany, the United Kingdom, 
        and the Netherlands on May 31, 2006, is welcomed and should be 
        expanded upon at the earliest possible opportunity;
            (2) the proposal by the Government of the Russian 
        Federation to bring one of its uranium enrichment facilities 
        under international management and oversight is also a welcome 
        development and should be encouraged by the United States;
            (3) the offer by the Nuclear Threat Institute (NTI) of 
        $50,000,000 in funds to support the creation of an 
        international nuclear fuel bank by the International Atomic 
        Energy Agency (IAEA) is also welcomed, and the United States 
        and other member states of the IAEA should pledge collectively 
        at least an additional $100,000,000 in matching funds to 
        fulfill the NTI proposal; and
            (4) the governments, organizations, and experts currently 
        engaged in developing the initiatives described in paragraphs 
        (1) through (3) and other initiatives should seek to identify 
        additional incentives to be included in an international regime 
        for the assured supply of nuclear fuel for peaceful means at 
        current market prices, including participation in non-weapons-
        relevant technology development and fuel leasing to further 
        persuade countries that participation in such a multilateral 
        arrangement far outweighs the temptation and expense of 
        developing national uranium enrichment and plutonium 
        reprocessing facilities.

SEC. 103. STATEMENTS OF POLICY.

    (a) General Statement of Policy.--It is the policy of the United 
States to support the establishment of an international regime for the 
assured supply of nuclear fuel for peaceful means under multilateral 
authority, such as the International Atomic Energy Agency.
    (b) Additional Statement of Policy.--It is further the policy of 
the United States to--
            (1) oppose the development of a capability to produce 
        nuclear weapons by any non-nuclear weapon state, within or 
        outside of the Treaty on the Non-Proliferation of Nuclear 
        Weapons (21 UST 483; commonly referred to as the ``Nuclear Non-
        Proliferation Treaty'' or the ``NPT'');
            (2) encourage states party to the NPT to interpret the 
        right to ``develop research, production and use of nuclear 
        energy for peaceful purposes,'' as described in Article IV of 
        the NPT, as being a qualified right that is conditioned by the 
        overall purpose of the NPT to prevent the spread of nuclear 
        weapons and nuclear weapons capability, including by refraining 
        from all nuclear cooperation with any state party that has not 
        demonstrated that it is in full compliance with its NPT 
        obligations, as determined by the International Atomic Energy 
        Agency; and
            (3) strengthen the Nuclear Suppliers Group guidelines 
        concerning consultation by members regarding violations of 
        supplier and recipient understandings by instituting the 
        practice of a timely and coordinated response by Nuclear 
        Suppliers Group members to all such violations, including 
        termination of nuclear transfers to an involved recipient, that 
        discourages individual Nuclear Suppliers Group members from 
        continuing cooperation with such recipient until such time as a 
        consensus regarding a coordinated response has been achieved.

SEC. 104. REPORT.

    Not later than 180 days after the date of the enactment of this 
Act, the President shall transmit to the Committee on Foreign Affairs 
of the House of Representatives and the Committee on Foreign Relations 
of the Senate a report on the activities of the United States to 
support the establishment of an international regime for the assured 
supply of nuclear fuel for peaceful means at current market prices 
under multilateral authority, such as the International Atomic Energy 
Agency. The report shall include an assessment of the feasibility of 
establishing an international fuel services center within the United 
States.

               TITLE II--INTERNATIONAL NUCLEAR FUEL BANK

SEC. 201. VOLUNTARY CONTRIBUTIONS TO THE INTERNATIONAL ATOMIC ENERGY 
                    AGENCY.

    (a) Voluntary Contributions Authorized.--The President is 
authorized to make voluntary contributions on a grant basis to the 
International Atomic Energy Agency (hereinafter in this section 
referred to as the ``IAEA'') for the purpose of supporting the 
establishment of an international nuclear fuel bank to maintain a 
reserve of low-enriched uranium for reactor fuel to provide to eligible 
countries in the case of a disruption in the supply of reactor fuel by 
normal market mechanisms.
    (b) Requirements.--Voluntary contributions under subsection (a) may 
be provided only if the President certifies to the Committee on Foreign 
Affairs of the House of Representatives and the Committee on Foreign 
Relations of the Senate that--
            (1) the IAEA has received pledges in a total amount of not 
        less than $100,000,000 and is in receipt of not less than 
        $75,000,000 of such pledges for the purpose of supporting the 
        establishment of the international nuclear fuel bank referred 
        to in subsection (a);
            (2) the international nuclear fuel bank referred to in 
        subsection (a) will be established within the territory of a 
        non-nuclear weapon state, and will be under the oversight of 
        the IAEA, only if--
                    (A) the non-nuclear weapon state, among other 
                things--
                            (i) has a full scope safeguards agreement 
                        with the IAEA and an additional protocol for 
                        safeguards in force;
                            (ii) has never been determined by the IAEA 
                        Board of Governors to be in noncompliance with 
                        its IAEA full scope safeguards agreement and 
                        its additional protocol for safeguards; and
                            (iii) has effective enforceable export 
                        controls regarding nuclear and dual-use nuclear 
                        technology and other sensitive materials 
                        comparable to those maintained by the United 
                        States; and
                    (B) the Secretary of State has never determined, 
                for purposes of section 6(j) of the Export 
                Administration Act of 1979, section 620A of the Foreign 
                Assistance Act of 1961, section 40 of the Arms Export 
                Control Act, or any other provision of law, that the 
                government of the non-nuclear weapon state has 
                repeatedly provided support for acts of international 
                terrorism;
            (3) the international nuclear fuel bank referred to in 
        subsection (a) will provide nuclear reactor fuel to a country 
        only if, at the time of the request for nuclear reactor fuel--
                    (A) the country is in full compliance with its IAEA 
                safeguards agreement and has an additional protocol for 
                safeguards in force;
                    (B) in the case of a country that at any time prior 
                to the request for nuclear reactor fuel has been 
                determined to be in noncompliance with its IAEA 
                safeguards agreement, the IAEA Board of Governors 
                determines that the country has taken all necessary 
                actions to satisfy any concerns of the IAEA Director 
                General regarding the activities that led to the prior 
                determination of noncompliance;
                    (C) the country agrees to use the nuclear reactor 
                fuel in accordance with its IAEA safeguards agreement;
                    (D) the country has effective and enforceable 
                export controls regarding nuclear and dual-use nuclear 
                technology and other sensitive materials comparable to 
                those maintained by the United States;
                    (E) the country does not possess uranium enrichment 
                or spent-fuel reprocessing facilities of any scale; and
                    (F) the government of the country is not a state 
                sponsor of terrorism for purposes of section 6(j) of 
                the Export Administration Act of 1979, section 620A of 
                the Foreign Assistance Act of 1961, section 40 of the 
                Arms Export Control Act, or any other provision of law;
            (4) the international nuclear fuel bank referred to in 
        subsection (a) will not contain uranium enrichment or spent-
        fuel reprocessing facilities; and
            (5) the nuclear reactor fuel referred to in paragraph (3) 
        will be provided to a country referred to in such paragraph 
        only at current market prices.
    (c) Waiver.--The President may waive the requirement of 
subparagraph (F) of subsection (b)(3) if the President--
            (1) determines that it is important to the national 
        security interests of the United States to do so; and
            (2) transmits to the Committee on Foreign Affairs of the 
        House of Representatives and the Committee on Foreign Relations 
        of the Senate a report that contains the basis of the 
        determination under paragraph (1).
    (d) Rule of Construction.--Nothing in this section shall be 
construed to authorize voluntary contributions under subsection (a) to 
support subsidization of the price of nuclear reactor fuel whose supply 
would be assured by the United States, the IAEA, or any other state or 
international entity covered by this section.

SEC. 202. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--To carry out section 201, there is authorized to 
be appropriated to the President $50,000,000 for fiscal year 2008.
    (b) Availability of Appropriations.--Amounts appropriated pursuant 
to the authorization of appropriations under subsection (a) are 
authorized to remain available until September 30, 2010.

                                Summary

    The Lantos ``International Nuclear Fuel for Peace and 
Nonproliferation Act of 2007'' seeks to close a major gap in 
the global nuclear nonproliferation regime by supporting the 
establishment of an independent international nuclear fuel 
bank. The bank would guarantee reactor fuel to countries that 
forgo their own enrichment plants and are in good standing with 
existing international nuclear safeguards commitments, should 
there be a disruption in the world's supply of nuclear fuel.
    The bill authorizes $50 million to support the 
establishment of an International Atomic Energy Agency (IAEA) 
international nuclear fuel bank. Prerequisites include pledges 
to the IAEA of an additional $100 million from other sources, 
of which at least $75 million must have been received. The 
Nuclear Threat Initiative (NTI) has a standing pledge of $50 
million. The U.S. funds would be authorized only through FY 08. 
These could be used only for the creation of a fuel bank that 
would supply fuel as a last resort to countries that are in 
full compliance with their international nuclear safeguards 
agreements and do not possess uranium enrichment or spent-fuel 
reprocessing facilities.
    By ensuring that nuclear fuel is available to cover all 
contingencies of an interruption of supply, a fuel bank would 
undermine the national security argument employed by other 
countries that an independent capacity to produce nuclear fuel 
is needed as insurance against a potential cutoff by external 
suppliers. By removing this pretext, Iran's assertion that it 
requires a capacity for this reason would be greatly weakened, 
if not eliminated altogether.
    An additional contribution to the global nuclear 
nonproliferation regime from a fuel bank derives from the 
condition that recipients cannot possess a nuclear fuel 
production capability. This will reinforce efforts to stop the 
further proliferation of this dual-use capacity, and with it 
the spread of a capacity to produce nuclear weapons.

                         Background and Purpose

    Since the United States Baruch Plan of 1946, the United 
States has believed that an increase in the number of countries 
that possess nuclear weapons and the means to create such 
weapons makes the world less secure and stable by increasing 
the chances that nuclear weapons would be used. A world in 
which nuclear weapons are used again is less secure for all 
concerned, and could well trigger a global arms race, as more 
countries will be tempted to arm themselves with nuclear 
weapons to prevent attacks by countries that possess nuclear 
weapons.
    It is therefore in the general security interest of all 
countries, and in the vital national security interest of the 
United States, that the number of countries that possess a 
nuclear weapons capability be kept to a minimum and ultimately 
be reduced.
    Uranium enrichment and spent-fuel reprocessing facilities 
produce nuclear material that can be used either for peaceful 
purposes in electricity-generating reactors, or to produce 
uranium and plutonium for nuclear weapons. As such, these 
facilities are inherently a proliferation risk, allowing their 
possessor to be just months away from the production of a 
nuclear explosive device.
    It is therefore in the general security interest of all 
countries that the number of countries that operate uranium 
enrichment and spent-fuel reprocessing facilities also be kept 
to a minimum, consistent with the global demand for nuclear 
power reactor fuel.
    The financing and construction of additional uranium 
enrichment and spent-fuel reprocessing facilities in additional 
states around the world is indefensible on economic grounds 
alone, given current and future supplies of uranium and 
existing providers of uranium enrichment and spent-fuel 
reprocessing services to the world market.
    The desire to construct uranium enrichment and spent-fuel 
reprocessing facilities by additional countries, therefore, is 
often based upon considerations other than economic 
calculations. The possession of such facilities is often 
elevated to a matter of national pride--a demonstration to the 
world that the country that possesses this technology has 
arrived at a level of technological development comparable to 
that of the United States and other countries with advanced 
civil nuclear power programs.
    Furthermore, the acquisition of uranium enrichment and 
spent-fuel reprocessing facilities can be perceived as a 
demonstration of the developing world's independence from 
technological domination by the more developed states. Article 
IV of the Treaty on the Nonproliferation of Nuclear Weapons 
(NPT) recognizes that State Parties have an ``inalienable right 
. . . to develop research, production and use of nuclear energy 
for peaceful purposes without discrimination.'' However, this 
is a qualified right conditioned by a State Party's acting in 
conformity with the NPT's obligation for such countries not to 
acquire, possess, or develop nuclear weapons or nuclear 
explosive devices.
    It has been long recognized that the proliferation of 
national uranium enrichment and spent-fuel reprocessing 
facilities would increase the likelihood of the emergence of 
new nuclear weapon states.
    Concerned governments, nongovernmental organizations, and 
individual experts have for decades recognized the need to 
address this problem through multilateral assurances of the 
uninterrupted supply of nuclear fuel, the sharing of peaceful 
application of nuclear energy, an international fuel bank to 
provide fuel if the fuel supply to a country is disrupted, and 
even multilateral participation in international uranium 
enrichment and spent-fuel reprocessing facilities, as a means 
of reducing incentives of countries to develop and construct 
such facilities themselves.
    Until recently, such efforts have produced little more than 
reports. However, the revelations of a nuclear black-market in 
uranium enrichment technology and equipment, combined with the 
attempt by North Korea and Iran to possess such technology and 
equipment to provide the basis for nuclear weapons programs, 
have rekindled this debate with a new urgency.
    Iran has used the specter of a potentially unreliable 
international supply of nuclear reactor fuel as a pretext for 
developing its own uranium enrichment and spent-fuel 
reprocessing capability, which would enable Iran to also 
produce weapons grade uranium and plutonium for nuclear 
weapons.
    Several initiatives have been proposed over the last year 
to address these concerns. The United States has proposed the 
Global Nuclear Energy Partnership (GNEP), which envisions a 
consortium of countries with advanced nuclear capabilities 
providing nuclear fuel services--fresh fuel and recovery of 
used fuel--to other countries that agree to employ nuclear 
energy only for power generation purposes, without possessing 
national uranium enrichment and spent-fuel reprocessing 
facilities.
    The United States also joined France, the Russian 
Federation, Germany, the United Kingdom, and the Netherlands on 
May 31, 2006, in proposing a ``Concept for a Multilateral 
Mechanism for Reliable Access to Nuclear Fuel'' that would 
facilitate or create new arrangements between suppliers and 
recipients to provide fuel to countries with good 
nonproliferation credentials in case of market failure.
    Any assurance of the supply of nuclear fuel should meet the 
condition outlined by President George W. Bush on February 11, 
2004, that ``The world's leading nuclear exporters should 
ensure that states have reliable access at reasonable cost to 
fuel for civilian reactors, so long as those states renounce 
enrichment and reprocessing.''.
    The Russian Federation has proposed that one of its uranium 
enrichment facilities be placed under international management 
and oversight, as part of a ``Global Nuclear Power 
Infrastructure'' proposal to create international nuclear fuel 
cycle centers.
    In conclusion, the creation of a multi-tiered system to 
assure the supply of nuclear reactor fuel at current market 
prices, under appropriate safeguards and conditions, could 
reassure countries that are dependent upon or will construct 
nuclear power reactors that they will have an assured supply of 
nuclear fuel at current market prices, so long as such 
countries forgo national uranium enrichment and spent-fuel 
reprocessing facilities and are committed to the 
nonproliferation of nuclear weapons. Secretary of State Rice 
and other senior Administration officials have expressed their 
approval for the concepts of this bill, as it directly supports 
U.S. efforts to create an international regime for assured 
nuclear fuel supply for peaceful purposes.

                                Hearings

    On May 10, 2007, the Committee held a hearing on nuclear 
nonproliferation policy, with a focus on H.R. 885. Witnesses 
were: former Sen. Sam Nunn of the Nuclear Threat Initiative; 
Joe Cirincione of the Center for American Progress; and Henry 
Sokolsky of the Nonproliferation Policy Education Center. On 
January 11, 2007, the Committee held a briefing entitled, 
``Next Steps in the Iran Crisis,'' with the Honorable Thomas R. 
Pickering, former Under Secretary of State for Political 
Affairs, and the Honorable R. James Woolsey, Jr., former 
Director of the Central Intelligence Agency, during which the 
issue of an international fuel assurance regime, in the context 
of possible responses to Iran's development of an uranium 
enrichment facility, were considered.

                        Committee Consideration

    On May 23, 2007, the Committee marked up H.R. 885, and 
reported it favorably to the House, as amended, by voice vote, 
a quorum being present.

                         Votes of the Committee

    There were no recorded votes on the bill.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    The legislation authorizes $50,000,000 to establish an 
international nuclear fuel bank.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, June 1, 2007.
Hon. Tom Lantos, Chairman,
Committee on Foreign Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 885, the 
International Nuclear Fuel for Peace and Nonproliferation Act 
of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sam 
Papenfuss, who can be reached at 226-2840.
            Sincerely,
                                           Peter R. Orszag.
Enclosure

cc:
        Honorable Ileana Ros-Lehtinen
        Ranking Member
H.R. 885--International Nuclear Fuel for Peace and Nonproliferation Act 
        of 2007.
    H.R. 885 would authorize the appropriation of $50 million 
in 2008 for a voluntary contribution to the International 
Atomic Energy Agency (IAEA). This contribution would allow the 
IAEA to establish an international nuclear fuel bank that could 
be used to provide eligible countries with nuclear fuel in the 
event of disruptions that affect the market for nuclear fuel. 
Before making the contribution, the bill would require the 
President to certify that:

         LOther countries have pledged at least $100 
        million to the IAEA for the nuclear fuel bank and the 
        IAEA has received at least $75 million of the pledged 
        amounts;

         LThe international nuclear fuel bank would be 
        established in a country without nuclear weapons under 
        the oversight of the IAEA;

         LThe host country for the nuclear fuel bank 
        has an agreement with the IAEA regarding safeguards, 
        has always been compliant with that agreement, has 
        effective export controls over nuclear technology, and 
        does not support international terrorism; and

         LThe international fuel bank will not provide 
        nuclear reactor fuel to any country that does not meet 
        certain guidelines specified in the bill.

    If the President is able to make the certifications 
required in the bill, and based on historical spending patterns 
for voluntary contributions to international organizations, CBO 
estimates that implementing H.R. 885 would cost $45 million in 
2008 and $50 million over the 2008-2009 period, assuming 
appropriation of the authorized amount.
    H.R. 885 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Sam Papenfuss, 
who can be reached at 226-2840. This estimate was approved by 
Peter H. Fontaine, Deputy Assistant Director for Budget 
Analysis.

                    Performance Goals and Objectives

    The Act seeks to close a major gap in the global nuclear 
nonproliferation regime by supporting the establishment of an 
independent international nuclear fuel bank.

                   Constitutional Authority Statement

    Pursuant to clause 3(d) (1) of rule XIII of the Rules of 
the House of Representatives, the Committee finds the authority 
for this legislation in article I, section 8 of the 
Constitution.

                        New Advisory Committees

    H.R. 885 does not establish or authorize any new advisory 
committees.

                    Congressional Accountability Act

    H.R. 885 does not apply to the Legislative Branch.

                         Earmark Identification

    H.R. 885 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

               Section-by-Section Analysis and Discussion

 TITLE I--INTERNATIONAL REGIME FOR THE ASSURED SUPPLY OF NUCLEAR FUEL 
                           FOR PEACEFUL MEANS

Section 1. Short Title.
    Section 1 states that this Act may be cited as the 
``International Nuclear Fuel for Peace and Nonproliferation Act 
of 2007''
Section 101. Findings.
    Section 101 includes several findings in support of the 
establishment of an international nuclear fuel bank.
Section 102. Sense of Congress.
    Section 102 declares the sense of Congress that:
    (1) the ``Concept for a Multilateral Mechanism for Reliable 
Access to Nuclear Fuel,'' proposed by the United States, 
France, the Russian Federation, Germany, the United Kingdom, 
and the Netherlands on May 31, 2006, is welcomed and should be 
expanded upon at the earliest possible opportunity;
    (2) the proposal by the Government of the Russian 
Federation to bring one of its uranium enrichment facilities 
under international management and oversight is also a welcome 
development and should be encouraged by the United States;
    (3) the offer by the Nuclear Threat Institute (NTI) of 
$50,000,000 in funds to support the creation of an 
international nuclear fuel bank by the International Atomic 
Energy Agency (IAEA) is also welcomed, and the United States 
and other member states of the IAEA should pledge collectively 
at least an additional $100,000,000 in matching funds to 
fulfill the NTI proposal; and
    (4) the governments, organizations, and experts currently 
engaged in developing the initiatives described in paragraphs 
(1) through (3) and other initiatives should seek to identify 
additional incentives to be included in an international regime 
for the assured supply of nuclear fuel for peaceful means at 
current market prices, including participation in non-weapons-
relevant technology development and fuel leasing to further 
persuade countries that participation in such a multilateral 
arrangement far outweighs the temptation and expense of 
developing national uranium enrichment and plutonium 
reprocessing facilities.
Section 103. Statements of Policy.
    Section 103 declares that, as a general statement of 
policy, the United States supports the establishment of an 
international regime for the assured supply of nuclear fuel for 
peaceful means under multilateral authority, such as the IAEA.
    Additionally, Section 103 declares U.S. policy to: (1) 
oppose the development of a capability to produce nuclear 
weapons by any non-nuclear weapon state, within or outside of 
the NPT; (2) encourage states party to the NPT to interpret the 
right to ``develop research, production and use of nuclear 
energy for peaceful purposes,'' as described in Article IV of 
the NPT, as being a qualified right that is conditioned by the 
overall purpose of the NPT to prevent the spread of nuclear 
weapons and nuclear weapons capability, including by refraining 
from all nuclear cooperation with any state party that has not 
demonstrated that it is in full compliance with its NPT 
obligations, as determined by the IAEA; and (3) strengthen the 
Nuclear Suppliers Group guidelines concerning consultation by 
members regarding violations of supplier and recipient 
understandings by instituting the practice of a timely and 
coordinated response by Nuclear Suppliers Group members to all 
such violations, including termination of nuclear transfers to 
an involved recipient, that discourages individual Nuclear 
Suppliers Group members from continuing cooperation with such 
recipient until such time as a consensus regarding a 
coordinated response has been achieved.
Section 104. Report.
    Section 104 requires the President to report to the 
Congress not later than six months after the date of enactment 
of the Act, on the activities of the United States to support 
the establishment of an international regime for the assured 
supply of nuclear fuel for peaceful means at current market 
prices under multilateral authority, such as the IAEA. The 
report shall also include an assessment of the feasibility of 
establishing an international fuel services center within the 
United States.

               TITLE II--INTERNATIONAL NUCLEAR FUEL BANK

Section 201. Voluntary Contributions to the International Atomic Energy 
        Agency.
    Section 201 authorizes the President to contribute funds 
(authorized to be appropriated in Section 202, below) to the 
IAEA to help establish an international nuclear fuel bank of 
low-enriched uranium to provide to eligible countries in the 
case of a disruption in the supply of reactor fuel by normal 
market mechanisms. Such funds can only be contributed if the 
President certifies to the Committee on Foreign Affairs of the 
House of Representatives, and the Committee on Foreign 
Relations of the Senate, that the IAEA has received pledges of 
not less than $100,000,000 and is in receipt of not less than 
$75,000,000 of such pledges for a fuel bank. The President must 
also certify that the international nuclear fuel bank will be 
established within the territory of a non-nuclear weapon state, 
under the oversight of the IAEA, which has a comprehensive IAEA 
safeguards agreement and additional protocol for safeguards in 
force, has never been determined by the IAEA to be in 
noncompliance with such safeguards agreements, has effective 
enforceable nuclear export controls comparable to those of the 
U.S., and is not a state sponsor of terrorism under U.S. law.
    Section 201 also requires that, in order to contribute 
funds authorized by this Act, the President must further 
certify that the international nuclear fuel bank will only 
provide nuclear reactor fuel to a country if the country is in 
full compliance with its IAEA safeguards agreement and has an 
additional protocol for safeguards in force; in the case of a 
country that was previously determined to be in noncompliance 
with its safeguards agreement, the IAEA determines that the 
country has taken all necessary actions to satisfy any concerns 
of the IAEA Director General regarding their activities; the 
country agrees to use the nuclear reactor fuel in accordance 
with its IAEA safeguards agreement; the country has effective 
and enforceable export controls regarding nuclear and dual-use 
nuclear technology and other sensitive materials comparable to 
those maintained by the United States; the country does not 
possess uranium enrichment or spent-fuel reprocessing 
facilities of any scale; the international nuclear fuel bank 
will not contain uranium enrichment or spent-fuel reprocessing 
facilities; and fuel bank fuel will be provided at current 
market prices.
    In addition, the fuel bank cannot provide fuel to the 
government of any country that has been designated a state 
sponsor of terrorism under U.S. law. However, the President may 
waive this requirement if he determines that it is important to 
the national security interests of the United States to do so 
and reports to the foreign affairs committees the reasons for 
his determination.
    Finally, Section 201 states that nothing in this section 
shall be construed to authorize voluntary contributions to 
support subsidization of the price of nuclear reactor fuel 
whose supply would be assured by the United States, the IAEA, 
or any other state or international entity covered by this 
section.
Section 202. Authorization of Appropriations.
    Section 202 authorizes $50,000,000 for fiscal year 2008 for 
contributions to an international nuclear fuel bank.