American Materials Bond Series
American Materials Bond Series · Document 3 of 3
Internal Revenue Code · §§ 408 & 7805 · Notice of Final Rulemaking

The Rulemaking

What Document 3 looks like when Treasury publishes it. Authority: Internal Revenue Code §§ 408(a), 408A, and 7805. No new legislation required.

The stack, complete
Document 1 established the government as a committed buyer at a price floor. Document 2 converted that commitment into bankable construction debt. This document — the Treasury rulemaking — creates the American Materials Fund account category, a tax-advantaged retirement instrument through which private American capital fills the equity requirement the DOE guarantee demands. With all three in place, the facility is financed. The government's cash outlay may be zero. The American retirement system builds the American graphite industry. Three signatures. No Congress. The battery America needs.
Why Treasury can do this without Congress
Congress created the IRA in 1974. It has not meaningfully touched the core statutory architecture since. Treasury administers the program under broad regulatory authority granted by IRC § 7805, which authorizes the Secretary to prescribe all needful rules and regulations for the enforcement of the tax code. Within that authority, Treasury has repeatedly defined what constitutes a qualifying IRA investment, what accounts qualify as IRAs, and what restrictions apply to self-directed accounts. The American Materials Fund account category does not require new statutory authority. It requires Treasury to exercise existing authority to define a new designated account type — as it has done before for SEP-IRAs, SIMPLE IRAs, and the myRA program. The novel element here is the investment restriction: AMF accounts may only hold certified domestic critical materials facility equity or debt. That restriction is within Treasury's regulatory authority to impose. The precedent is the myRA program, which restricted investment to a single government bond. Treasury created it by regulation. It was wound down by regulation. The authority to create it was never in question.
Illustrative
Department of the Treasury
Internal Revenue Service
26 CFR Parts 1 and 54
[TD 9XXX]
RIN 1545-XX00
American Materials Fund Account; Establishment of Designated Individual Retirement Account Category for Qualified Domestic Critical Materials Facility Investments
Action: Final Rule
Summary:
This document contains final regulations establishing the American Materials Fund (AMF) account as a designated individual retirement account category under section 408 of the Internal Revenue Code. AMF accounts are self-directed individual retirement accounts that may hold only qualifying investments in certified domestic critical materials facilities. Contributions to AMF accounts are deductible under the same rules applicable to traditional individual retirement accounts. Earnings accumulate on a tax-deferred basis. This rulemaking is authorized under the Secretary's general regulatory authority under section 7805 of the Internal Revenue Code and the existing individual retirement account framework of section 408. These regulations are intended to mobilize private retirement capital for investment in domestic critical materials production infrastructure, advancing national energy security and domestic industrial capacity without new appropriations or legislation.
Effective Date: These regulations are effective 30 days after publication in the Federal Register.
For Further Information Contact: Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes), Internal Revenue Service, 1111 Constitution Ave. NW, Washington, DC 20224.

Supplementary Information

Background

The United States currently imports substantially all of its battery-grade graphite, a critical input for lithium-ion battery anodes, from the People's Republic of China. The Department of Defense has determined that this supply concentration constitutes a critical risk to defense industrial base readiness. The Department of Energy has identified domestic feedstock sources — including acid mine drainage treatment streams, coal mine tailings, and naturally occurring deposits — capable of supporting commercial-scale domestic processing. The principal barrier to development of domestic graphite processing capacity is not technical feasibility but capital formation. Specifically, the first-of-kind nature of domestic commercial-scale battery graphite processing creates a private capital market gap: the risk-adjusted return available from early-stage domestic facility investment is insufficient to attract institutional capital without a government anchor.

The American retirement system holds approximately $38 trillion in assets. A fraction of one percent of that capital — directed toward qualifying domestic critical materials facility investments — is sufficient to capitalize the equity portion of every battery-grade graphite facility the United States requires. The American Materials Fund account is the regulatory instrument that makes that direction possible.

Existing Authority

Section 408(a) of the Internal Revenue Code establishes the individual retirement account framework and authorizes the Secretary to prescribe regulations governing IRA administration. Section 7805(a) grants the Secretary broad authority to prescribe all needful rules and regulations for the enforcement of the Internal Revenue Code. Treasury has previously exercised this authority to create the Savings Incentive Match Plan for Employees (SIMPLE IRA) account category, the Simplified Employee Pension (SEP-IRA) account category, and the myRA program, each of which established distinct account structures within the section 408 framework without new legislation.

The AMF account category is established within this existing framework. It does not require new statutory authority. It exercises existing authority to define a new designated account type with a specific investment mandate, consistent with the Secretary's longstanding regulatory practice.

Summary of Comments

Treasury published a Notice of Proposed Rulemaking on _____________, 2026, and received comments from financial institutions, retirement plan administrators, domestic mining and processing companies, and individual members of the public. The principal issues raised in comments are addressed below.

Investment Restriction

Several commenters raised concerns that restricting AMF account investments to a single asset class creates concentration risk for account holders. Treasury acknowledges this concern and has structured the final rule to address it in two ways. First, the AMF account is a supplemental account type: nothing in this rulemaking prevents an individual from maintaining a traditional IRA, Roth IRA, or employer-sponsored plan alongside an AMF account. The AMF account is an additional option, not a replacement for existing retirement savings vehicles. Second, qualifying investments include both equity and debt instruments issued by certified facilities, providing some variation in risk profile within the account.

Certification Process

Multiple commenters requested clarity on the joint Treasury-DOE certification process for qualifying facilities. The final rule specifies that certification requires: domestic processing location, domestic feedstock sourcing meeting the standards established in applicable DOD procurement agreements, and satisfaction of the beneficial ownership requirements set forth in § 1.408(p)-3. Treasury and DOE will publish a joint certification guidance document within 90 days of this rule's effective date.

Liquidity

Financial institution commenters raised concerns about investor liquidity, noting that investments in early-stage industrial facilities may be illiquid for extended periods. The final rule addresses this by establishing a defined liquidity event: AMF account investments become fully transferable upon the earlier of (a) the certified facility's achievement of commercial production, as determined by DOE, or (b) the account holder's attainment of age 59½. Prior to a liquidity event, transfers are restricted to other AMF accounts. Early withdrawal is permitted subject to the same 10% penalty applicable to traditional IRAs, plus recapture of the deduction benefit.

Explanation of Provisions

The final regulations add § 1.408(p) to 26 CFR Part 1, establishing the American Materials Fund account framework. The key provisions are summarized below and set forth in full in the regulatory text.

Regulatory Text

Accordingly, 26 CFR Part 1 is amended as follows:

§ 1.408(p)-1 — American Materials Fund Account; Definitions

For purposes of §§ 1.408(p)-1 through 1.408(p)-7:

American Materials Fund account or AMF account means an individual retirement account described in section 408(a) that is established pursuant to these regulations and that holds only qualifying AMF investments as defined in § 1.408(p)-2.
Certified facility means a domestic critical materials processing facility that has received joint certification from the Department of the Treasury and the Department of Energy pursuant to § 1.408(p)-3.
Domestic critical material means any material identified by the Secretary of Defense as essential to national defense under the Defense Production Act of 1950, as amended, that is produced at a certified facility from domestically sourced feedstock.
Qualifying AMF investment means any equity interest or debt instrument issued by or on behalf of a certified facility, provided that the instrument meets the requirements of § 1.408(p)-2.
Domestic feedstock has the meaning set forth in applicable Department of Defense procurement agreements for domestic critical materials, requiring that all source material be extracted, recovered, or processed within the United States by entities in which no foreign adversary holds ten percent or more beneficial ownership.
§ 1.408(p)-2 — Qualifying AMF Investments

(a) General rule. An AMF account may hold only qualifying AMF investments. An investment qualifies under this section if it satisfies each of the following requirements:

  1. The investment is an equity interest (including common stock, preferred stock, limited partnership interest, or membership interest) or a debt instrument (including notes, bonds, or debentures) issued by or on behalf of a certified facility;
  2. The issuing facility has received and maintains certification under § 1.408(p)-3 as of the date of investment;
  3. The issuing facility is located within the United States and conducts all processing operations within the United States;
  4. No foreign adversary, as defined in 10 U.S.C. § 4872(d), holds ten percent or more beneficial ownership interest in the issuing facility or any entity that supplies feedstock to the facility; and
  5. The investment is acquired at arm's length for fair market value.

(b) Prohibited investments. An AMF account may not hold cash, publicly traded securities, real property, collectibles, or any other investment not described in paragraph (a). An AMF account trustee that receives cash contributions shall invest such cash in qualifying AMF investments within 90 days of receipt or return the cash to the account holder.

§ 1.408(p)-3 — Certification of Qualifying Facilities

(a) Joint certification. A facility seeking certification as a certified facility shall submit a joint application to the Department of the Treasury and the Department of Energy. Treasury and DOE shall act on complete applications within 120 days of receipt.

(b) Certification requirements. A facility shall be certified if it satisfies all of the following:

  1. The facility is located within the United States and all processing operations are conducted within the United States;
  2. The facility produces a domestic critical material as defined in § 1.408(p)-1;
  3. The facility sources all feedstock from domestic sources meeting the domestic feedstock definition in § 1.408(p)-1;
  4. The facility has provided beneficial ownership certifications demonstrating that no foreign adversary entity holds ten percent or more ownership interest in the facility or any feedstock supplier; and
  5. The facility has executed, or is a qualified applicant under, a federal offtake agreement, loan guarantee commitment, or other federal support instrument issued pursuant to the Defense Production Act, the Energy Policy Act, or other applicable authority.

(c) Certification maintenance. Certification shall be maintained on an annual basis. A certified facility shall submit an annual certification update to Treasury and DOE within 90 days of each calendar year end confirming continued satisfaction of the certification requirements. Treasury and DOE may revoke certification upon 30 days notice if the facility fails to maintain certification requirements.

(d) Effect of revocation. If a facility's certification is revoked, investments in that facility held in AMF accounts shall not automatically become disqualifying. Account holders shall have 180 days from notice of revocation to transfer affected investments to another certified facility or to take a distribution subject to applicable tax and penalty.

§ 1.408(p)-4 — Contribution Limits and Deductibility

(a) Annual contribution limit. The maximum annual contribution to an AMF account is $15,000 per individual, indexed for inflation in the same manner as the limits under section 219(b)(5). Individuals aged 50 or older may contribute an additional $3,000 per year as a catch-up contribution.

(b) Deductibility. Contributions to an AMF account are deductible under section 219 subject to the same rules applicable to traditional IRA contributions, including the earned income requirement and the phase-out for active participants in employer-sponsored plans. For purposes of the active participant phase-out, the phase-out range for AMF account contributions is set at 150% of the applicable traditional IRA phase-out range, reflecting the national security objective of the AMF account program.

(c) Coordination with other IRA contributions. AMF account contributions are not aggregated with traditional IRA or Roth IRA contributions for purposes of the section 219 dollar limit. An individual may contribute the maximum amount to each account type in the same year.

(d) Employer contributions. An employer may contribute to an AMF account established by an employee, subject to the same limits applicable to SEP-IRA employer contributions under section 408(k), provided the employer's contributions are invested exclusively in qualifying AMF investments.

§ 1.408(p)-5 — Distributions and Liquidity Events

(a) Qualified distributions. A distribution from an AMF account is a qualified distribution not subject to the 10% early withdrawal tax under section 72(t) if it occurs on or after the earlier of:

  1. The date the account holder attains age 59½; or
  2. The date the certified facility in which the account holds an investment achieves commercial production, as certified by the Department of Energy.

(b) Non-qualified distributions. A distribution taken before a liquidity event described in paragraph (a) is subject to income tax plus the 10% early withdrawal tax under section 72(t), plus recapture of the deduction taken under § 1.408(p)-4(b) in the year of contribution. The recapture amount is equal to the marginal tax benefit of the deduction, calculated using the account holder's marginal rate in the year of contribution.

(c) Required minimum distributions. AMF accounts are subject to the required minimum distribution rules of section 401(a)(9) in the same manner as traditional IRAs. For purposes of calculating required minimum distributions from an AMF account holding illiquid investments, fair market value shall be determined by independent appraisal conducted not less than annually.

(d) In-kind distributions. An AMF account may make in-kind distributions of qualifying investments. An in-kind distribution is treated as a distribution of the fair market value of the distributed investment on the date of distribution.

§ 1.408(p)-6 — Trustee Requirements

(a) Eligible trustees. An AMF account must be established with and administered by a trustee that is a bank, an insured credit union, or another person approved by the Secretary to act as an IRA trustee or custodian. AMF account trustees must demonstrate to the Secretary's satisfaction that they have the operational capacity to: (i) hold and administer illiquid alternative investments; (ii) conduct or commission annual fair market value appraisals of account holdings; and (iii) monitor and report on certified facility certification status.

(b) Reporting. AMF account trustees shall file annual reports with the Internal Revenue Service on Form 5498 (or successor form) reporting AMF account fair market values, contributions, and distributions, including identification of each certified facility in which the account holds an investment and the certification status of each such facility as of the reporting date.

§ 1.408(p)-7 — Effective Date and Transition Rules

(a) Effective date. These regulations apply to AMF accounts established on or after the effective date set forth in the Federal Register publication of this final rule.

(b) Transition period. During the 90-day period following the effective date, Treasury and DOE will accept and process facility certification applications on an expedited basis. Facilities that have executed a federal offtake agreement or received a conditional loan guarantee commitment prior to the effective date are eligible for expedited certification review within 60 days of application.

(c) Guidance. Treasury will publish a revenue procedure within 90 days of the effective date providing model AMF account trust agreements, sample certification application forms, and guidance on valuation methodologies for illiquid AMF account investments.

Secretary of the Treasury
United States Department of the Treasury
Date: _______________________
[FR Doc. 2026-XXXXX Filed ___-__-26; 8:45 am] · BILLING CODE 4830-01-P
The contribution limit — why $15,000
The traditional IRA limit in 2026 is $7,000, with a $1,000 catch-up. The AMF limit is set at $15,000 with a $3,000 catch-up — roughly double — for two reasons. First, qualifying facility investments are illiquid for a meaningful period, and illiquidity should be compensated with a larger contribution ceiling. Second, the capital formation math requires it. A domestic battery graphite facility costs $150–200 million to build. At $15,000 per investor per year, you need roughly 3,600 investors contributing for three years to fill the equity tranche of a single facility. That is achievable. At $7,000, the math gets harder and the instrument becomes less useful as a capital formation tool. The phase-out range set at 150% of the traditional IRA phase-out is the mechanism that keeps the instrument accessible to working professionals — the engineers, tradespeople, and manufacturing workers who are the natural constituency for this investment — rather than restricting it to high-income investors.
The liquidity event — Section 5(a)(2)
This is the provision that changes the retirement calculus. Under a traditional IRA, an investor in an illiquid alternative asset is locked in until age 59½ regardless of what happens to the underlying investment. Under the AMF account, commercial production at the certified facility is itself a liquidity event. The investor who contributed to a graphite facility's equity round in 2026 can take a penalty-free distribution when the facility hits commercial production — which the DOD offtake agreement and DOE loan guarantee are designed to accelerate. The facility succeeds, the investor gets liquid. The facility fails, the investor takes the same treatment as any other failed IRA investment. The asymmetry favors the investor when the government's instruments do their job. That asymmetry is what makes the equity raise possible.
Section 4(c) — the coordination rule that changes everything
The most important line in the regulatory text is the one that says AMF contributions are not aggregated with traditional IRA or Roth IRA contributions. A person who maxes out a traditional IRA and a Roth IRA can still contribute the full $15,000 to an AMF account in the same year. That is $29,000 in total annual tax-advantaged retirement savings, compared to $14,000 available today. The government is not giving anything away — it is deferring tax on contributions that fund domestic industrial infrastructure rather than foreign equities. The Treasury cost is the present value of the deferred tax. The Treasury benefit is a domestic graphite industry that did not exist before and a defense supply chain that is no longer hostage to a single foreign supplier.
The American Materials Bond Series — Complete

Three documents. Three signatures. No legislation required.

Document 1: The Under Secretary of Defense for Acquisition and Sustainment signs a ten-year offtake agreement for 5,000 metric tonnes per year of domestic battery-grade graphite at a price floor of $14,500 per metric tonne. Authority: Defense Production Act Title III, 50 U.S.C. § 4531. Precedent: MP Materials, July 2025.

Document 2: The Executive Director of the DOE Loan Programs Office issues a conditional commitment for a $126 million loan guarantee covering 70% of facility construction cost. Authority: Energy Policy Act Title XVII, 42 U.S.C. § 16511. Precedent: Sabine Pass LNG, Vogtle Units 3 and 4.

Document 3: The Secretary of the Treasury publishes a final rule in the Federal Register establishing the American Materials Fund account category, a tax-advantaged retirement instrument through which private American capital fills the 30% equity requirement. Authority: Internal Revenue Code §§ 408 and 7805. Precedent: myRA, SEP-IRA, SIMPLE IRA.

The facility is financed. The government's cash outlay may be zero. If the facility operates as projected — and the offtake agreement makes that projection conservative — the loan guarantee is repaid from cash flow, the guarantee fee generates revenue for Treasury, and the DOD offtake functions as a floor that commercial demand never reaches. The American retirement system built the American graphite industry. The government supplied its word, deployed three times, and paid nothing else. The battery America needs is already here. Someone just had to decide to build it.

Authority & Precedent

  1. Internal Revenue Code § 408(a) — Establishes the individual retirement account framework. Authorizes the Secretary to prescribe regulations governing IRA administration, including the types of accounts that qualify and the investments they may hold.
  2. Internal Revenue Code § 7805(a) — Grants the Secretary of the Treasury broad authority to prescribe all needful rules and regulations for the enforcement of the Internal Revenue Code. This is the primary authority for this rulemaking. Treasury has exercised this authority repeatedly to create new retirement account categories without Congressional action.
  3. myRA program — Established by Treasury Department guidance in 2014, wound down in 2017. The myRA restricted account investments to a single government bond — a more restrictive investment mandate than the AMF account. Treasury created and dissolved it entirely by regulation, establishing that the authority to define qualifying IRA investment types rests with the Secretary. No legislation was required to create it. No legislation was required to end it.
  4. SEP-IRA and SIMPLE IRA — Both created within the section 408 framework by regulatory action implementing legislative amendments, demonstrating the longstanding practice of Treasury using regulatory authority to define distinct account categories with different contribution limits, employer contribution rules, and investment parameters.
  5. Internal Revenue Code § 219(b)(5) — Establishes the annual IRA contribution limit and the inflation indexing mechanism. The AMF account limit of $15,000 is set above the traditional IRA limit by regulatory design to compensate for illiquidity and to achieve capital formation objectives. Treasury's authority to set contribution limits for new account categories within the section 408 framework is derived from §§ 408(a) and 7805(a).
  6. Internal Revenue Code § 72(t) — Establishes the 10% early withdrawal tax and the exceptions thereto. The AMF account's commercial production liquidity event is structured as an additional exception to the 10% tax, consistent with Treasury's authority to define qualifying distributions by regulation.
  7. Note on illustrative nature: The RIN, TD number, Federal Register citation, and execution date are illustrative. All statutory authority citations and regulatory provisions are designed to reflect current Treasury regulatory practice and Internal Revenue Code requirements. The $15,000 contribution limit, phase-out ranges, and certification timelines are policy choices that would be subject to negotiation and comment in an actual rulemaking. The legal architecture — that this can be done by regulation under existing authority — is the argument, and that argument is sound.