Countries seeking to purchase from the reserve would have to meet IAEA safeguards and refrain from operating uranium enrichment or spent-fuel reprocessing facilities.
"This bill is a dramatic step forward in the epic struggle to contain the spread of nuclear arms around the globe," said House Foreign Affairs Committee Chairman Tom Lantos, D-Calif., adding that it would "expose the subterfuge that we know Iran is perpetrating in order to further its nuclear weapons pursuit."
Iran has cited the potentially unreliable international supply of nuclear reactor fuel in justifying its development of uranium enrichment and spent-fuel reprocessing capability. Iran's program would also allow it to produce weapons-grade uranium and plutonium for nuclear weapons.
While aimed at Iran, the bill would also bar the Tehran government from participating in the fuel bank as long as it is designated as a state sponsor of terrorism.
The bill also welcomes a proposal by Russia to place one of its uranium enrichment facilities under international management as part of a global nuclear power infrastructure initiative.
The $50 million approved for 2008 matches the amount pledged last year by the Nuclear Threat Initiative, a group headed by CNN founder Ted Turner and former Sen. Sam Nunn, D-Ga., to help create a low-enriched uranium stockpile for those nations that decide not to build their own nuclear fuel cycle capabilities. Billionaire investor Warren Buffett is financially backing the program.