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Sept 5 -- The National Defense Stockpile Market Impact Committee, co-chaired by the Departments of Commerce and State, is seeking public comments on the potential market impact of proposed changes of the Fiscal Year (FY) 2025 Annual Materials Plan (AMP). Potential changes to the AMP are decided by the National Defense Stockpile Market Impact Committee, who advise the Defense Logistics Agency in its role as the National Defense Stockpile Manager on the projected domestic and foreign economic effects of all acquisitions, conversions, and disposals involving the National Defense Stockpile. To be considered, written comments must be received by October 5, 2023.

The federal government operates several different stockpiles that are managed by different federal agencies depending on the stockpile's purpose. For example, the Department of Health and Human Services (HHS) manages the Strategic National Stockpile, which contains medicines and medical equipment. HHS' stockpile can supplement medical countermeasures needed by states, tribal nations, territories, and the largest metropolitan areas during public health emergencies. Another example is the Department of Energy's operation of the Strategic Petroleum Reserve for use when the international oil market is severely disrupted.

The Department of Defense (DOD) maintains a stockpile of critical and strategic materials known as the National Defense Stockpile (NDS). During a war or national emergency, this stockpile is meant to provide strategic and critical materials to support national defense and essential civilian requirements in a time of national emergency. The stockpile currently contains 57 materials (i.e., primarily minerals) that are deemed strategic and critical to national security.

Under the authority of the Strategic and Critical Materials Stock Piling Revision Act of 1979, as amended (the Stock Piling Act) (50 U.S.C. 98 et seq.), the Department of Defense's Defense Logistics Agency (DLA) is the National Defense Stockpile Manager. The NDS is a strategic stockpile, not an economic stockpile. It is not intended to influence prices in the market or insulate private industry from supply shocks. Rather, its purpose is to ensure the defense and essential civilian industrial base has consistent access to the materiel it needs—and the private industries making products have the raw materials they need—during a war or national emergency.

Congress authorizes the sale of excess materials in the stockpile and proceeds of the sales are transferred to the National Defense Stockpile Transaction Fund. The NDS does not receive annual appropriations in the defense budget for operations expenses. Instead, the stockpile has a revolving fund in what the U.S. Treasury termed the National Defense Stockpile Transaction Fund. Whenever materials in the stockpile are sold, the proceeds of that sale are added to that fund. The DLA then uses that money to pay for the operational expenses accompanying the maintenance of the stockpile and to purchase new materials. Information about stockpile disposals—what was sold and at what value it was sold—is publicly available in monthly announcements published by DLA.

Section 3314 of the National Defense Authorization Act for Fiscal Year 1993 (FY 1993 NDAA) (50 U.S.C. 98h–1) formally established a Market Impact Committee (the Committee) to “advise the National Defense Stockpile Manager on the projected domestic and foreign economic effects of all acquisitions and disposals of materials from the stockpile . . .” The Committee must also balance market impact concerns with the statutory requirement to protect the U.S. Government against avoidable loss.

The Committee is comprised of representatives from the Departments of Commerce, State, Agriculture, Defense, Energy, Interior, the Treasury, and Homeland Security. The FY 1993 NDAA directs the Committee to consult with industry representatives that produce, process, or consume the types of materials stored in the Stockpile as the National Defense Stockpile Manager. The DLA must produce an Annual Materials Plan (AMP) proposing the maximum quantity of each listed material that may be acquired, disposed of, upgraded, converted, recovered, or sold by the DLA in a particular fiscal year. With this notice, Commerce, on behalf of DLA, lists the quantities and types of activity—potential disposals, potential acquisitions, potential conversions (upgrade, rotation, reprocessing, etc.) or potential recovery (from government sources)—associated with each material in its proposed FY 2025 AMP.

The quantities listed in Attachment 1 are not acquisition, disposal, upgrade, conversion, recovery, reprocessing, or sales target quantities, but rather a statement of the proposed maximum quantity of each listed material that may be acquired, disposed of, upgraded, converted, recovered, or sold in a particular fiscal year by the DLA. The quantity of each material that will actually be acquired or offered for sale will depend on the market for the material at the time of the acquisition or offering, as well as on the quantity of each material approved by Congress for acquisition, disposal, conversion, or recovery.

The Committee is interested in any supporting data and documentation on the potential market impact of the quantities associated with the proposed FY 2025 AMP.

National Defense Stockpile Market Impact Committee: https://www.bis.doc.gov/index.php/other-areas/strategic-industries-and-economic-security-sies/national-defense-stockpile-market-impact-committee
FRN: https://www.federalregister.gov/d/2023-19057

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