U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

89–006 

" ! SENATE 

111TH CONGRESS

2d Session 

REPORT

2010

111–289 

Calendar No. 560 

EXPORT PROMOTION ACT OF 2010 

R E P O R T 

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION 

ON

S. 3084 

SEPTEMBER 13, 2010.—Ordered to be printed 


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(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED ELEVENTH CONGRESS

SECOND SESSION

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

CLAIRE McCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

TOM UDALL, New Mexico 

MARK WARNER, Virginia 

MARK BEGICH, Alaska 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

JOHN ENSIGN, Nevada 

JIM DeMINT, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

GEORGE S. LeMIEUX, Florida 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

SAM BROWNBACK, Kansas 

MIKE JOHANNS, Nebraska 

ELLEN DONESKI, Staff Director 

JAMES REID, Deputy Staff Director 

BRUCE ANDREWS, General Counsel 

ANN BEGEMAN, Republican Staff Director 

BRIAN HENDRICKS, Republican General Counsel 

TODD BERTOSON, Republican Senior Counsel 


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Calendar No. 560 

111TH CONGRESS REPORT " ! SENATE 2d Session 111–289 

EXPORT PROMOTION ACT OF 2010 

SEPTEMBER 13, 2010.—Ordered to be printed 

Mr. ROCKEFELLER, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 3084] 

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 3084) to increase the competitiveness of United States businesses, particularly small- and mediumsized manufacturing firms, in interstate and global commerce, foster job creation in the United States, and for other purposes, having considered the same, reports favorably thereon with an amendment (in the nature of a substitute) and recommends that the bill 

(as amended) do pass. 

PURPOSE OF THE BILL

The purpose of S. 3084, as amended, is to assist U.S. businesses 

that are interested in exporting their products but do not otherwise 

have the resources or know-how to pursue international opportunities on their own. The bill would, first, increase the activities and 

personnel resources of the Department of Commerce (Department) 

to enhance its ability to carry out its mission to promote U.S. exports and allow the Department to increase coordination with 

States working on similar efforts. Second, the bill would increase 

funding for export grants available to industry associations and 

other non-profit institutions. Third, the bill would require the Department to consider export potential as a factor when reviewing 

applications for manufacturing grants and innovation grants. Finally, the bill would require the Secretary of Commerce to report 

to Congress within 90 days of the date of enactment on the tariff 

and nontariff barriers to trade imposed by Columbia, South Korea, 

and Panama. 


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1See, for example, the testimony of Liz J. Reilly, U.S. Chamber of Commerce, before the Senate Committee on Commerce, Science and Transportation, October 6, 2009. 

BACKGROUND AND NEEDS

In 2008, the share of gross domestic product (GDP) resulting 

from U.S. exports reached 12.7 percent—its highest level since 

1916. In 2008, the country exported approximately $1.7 trillion in 

goods and services and the Department estimates that these exports supported 10.3 million jobs. Based on these figures, a new job 

was created for every $165,000 increase in export sales. 

Despite America’s strong export sector, the U.S. has not come 

close to realizing its full export potential according to international 

trade experts.1 Less than one percent of U.S. businesses engage in 

exporting, and nearly 60 percent of these companies only trade in 

one foreign country. Moreover, exports account for a smaller proportion of American GDP than other leading exporting nations. 

DEPARTMENT OF COMMERCE’S INTERNATIONAL TRADE

ADMINISTRATION

Export promotion in the U.S. involves an array of efforts by businesses, trade associations, and Federal, State, and local government offices. Within the Federal government, 20 different agencies 

are responsible for trade promotion activities, which are connected 

through a Trade Promotion Coordinating Committee (TPCC) 

chaired by the Department. The main export promotion efforts at 

the Department are conducted by the International Trade Administration (ITA). 

The ITA’s trade promotion efforts are spearheaded by the United 

States and Foreign Commercial Service (USFCS or Commercial 

Service), a subdivision of ITA that has trade specialists in 109 U.S. 

cities and in 77 countries. Trade specialists in these offices assist 

U.S. exporters at every step of the export process, including market 

research, overseas advertising, and in locating foreign buyers, distributors, and business partners. The three priorities of the Commercial Service are: 1) increasing the number of U.S. companies 

that export overseas; 2) helping smaller companies expand to new 

export markets; and 3) assisting exporters to overcome hurdles in 

foreign markets. 

Export assistance often takes the following forms: 

• Matchmaking and Counseling. The Commercial Service’s trade specialists often recommend that U.S. companies develop a partnership with an overseas agent or distributor and 

facilitate the creation of such relationships. For example, trade 

specialists will contact a group of pre-screened overseas businesses and then narrow that list based on the specific needs 

of the U.S. company. This work is done before a company 

makes a trip overseas, saving it time and money. 

• Trade Missions. In 2008, the Commercial Service supported trade missions to 27 overseas markets, with 420 U.S. 

companies participating. Such missions introduce U.S. exporters to potential foreign buyers, locate agents and distributors, 

identify joint venture partners, and facilitate introductions 

with foreign government officials. 


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• Commercial Diplomacy and Advocacy. In certain 

cases, the U.S. government will weigh in on behalf of a U.S. 

company with a foreign government to assist in resolving a 

trade issue. These services can be particularly useful for firms 

exporting to emerging markets. 

In 2008, the Commercial Service assisted 426 U.S. companies 

that had previously never exported goods, and assisted in more 

than 3,000 transactions for firms that were exporting products to 

new markets. More than 80 percent of the 12,000 export transactions facilitated by the Department in 2008 were reported by 

small- and medium-sized businesses. The Department reports that 

these efforts support more than $67 billion in exports. Despite this 

success, the Commercial Service has lost approximately 200 employees since 2004 due to attrition and budgetary constraints. S. 

3084 would direct the Department to replace those lost workers 

over the next five years, subject to appropriations. 

THE DEPARTMENT OF COMMERCE’S EXPORTECH PROGRAM

Developed in 2006 as a pilot program by the Manufacturing Extension Partnership (MEP) and various other Federal and State 

agencies, ExporTech assists U.S. companies in developing a customized export plan. The companies meet for three one-day sessions over a three-month period, and, in between sessions, participants work with ExporTech counselors on developing their export 

plans. Throughout the program, experts are brought in to provide 

information and guidance to enable companies to accelerate their 

export plans and speed their products to market. In the final work 

session, a panel of experienced business professionals reviews each 

participating company’s export growth plan and provides feedback. 

One of the keys to ExporTech’s success is that it customizes each 

program to the participant’s export needs. Each workshop includes 

a maximum of eight participating companies, allowing it to provide 

sufficient time and attention to each company’s specific challenges. 

Since 2006, ExporTech has conducted 23 workshops with 180 

companies. The average return on investment for these companies 

is approximately 100:1. S. 3084 would provide $11 million to allow 

ExporTech to expand its service offerings nationwide. 

THE DEPARMENT OF COMMERCE’S MARKET DEVELOPMENT

COOPERATOR PROGRAM (MDCP)

Under MDCP, the ITA awards grants to support projects that enhance the competitiveness of U.S. manufacturing and service industries. MDCP grants establish partnerships between the Department and non-profit industry groups to fund long-term export promotion activities. Past award recipients have included trade associations, State departments of trade, regional associations of trade 

and economic development, chambers of commerce, and non-profit 

industry organizations. These groups are particularly effective in 

reaching small- and medium-sized U.S. businesses that the Department would likely not otherwise encounter. To qualify for a grant, 

an applicant must pledge to pay a minimum of two-thirds of the 

project cost and to sustain the project after the MDCP award period ends. 


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The ITA has awarded MDCP grants since 1993. On average the 

program has generated $134 of exports for every Federal dollar invested. Since 1997, the MDCP has helped U.S. industry generate 

over $2.9 billion in exports. S. 3084 would authorize $15 million for 

new MDCP export promotion grants. 

SUMMARY OF PROVISIONS

S. 3084, as reported, would direct the Department, subject to appropriations, to increase by approximately 200 the number of its 

employees whose primary responsibilities involve export promotion. 

The bill would further authorize $25 million over five years to the 

Department to be spent on improving export promotion for rural 

businesses. Additionally, the bill contains a Sense of the Senate 

section urging the Department to work closely with the States and 

enter into agreements with State trade agencies on export promotion to extend the reach of the Department’s export promotion 

efforts. The bill would also require the Secretary to report to Congress on the tariff and nontariff trade barriers imposed by Columbia, South Korea, and Panama within 90 days of the date of enactment. 

In order to increase exports in the short term, the bill would authorize $30 million to be used by the Department to expand efforts 

by current U.S. exporters and $11 million to be used by the MEP 

to expand the ExporTech program. The bill would also authorize 

$15 million to be used by the MDCP for export promotion grants. 

In total, the bill would authorize $81 million to the Department to 

improve its export promotion programs and direct it to increase 

staff levels by 200 personnel over five years. 

Finally, the bill would allow for additional criteria to be used in 

determining MEP and the Technology Innovation Program (TIP) 

awards. Such expanded criteria would include whether an application has significant potential for enhancing the competitiveness of 

small- and medium-sized U.S. manufacturers in the global marketplace. 

LEGISLATIVE HISTORY

On October 6, 2009, Senator Klobuchar held a hearing in the 

Subcommittee on Competitiveness, Innovation, and Export Promotion that examined the Federal government’s role in promoting 

exports. On March 5, 2010, Senator Klobuchar introduced S. 3084 

with Senator LeMieux. The bill was referred to the Committee on 

Commerce, Science, and Transportation. On June 9, 2010, the 

Committee met in open executive session and, by a voice vote, ordered a substitute amendment to S. 3084 reported with an amendment by Senator Johanns. 

The substitute amendment sponsored by Senators Klobuchar, 

LeMieux and Kerry added four provisions to the introduced bill. It 

authorized an additional $56 million to be used within 18 months 

by the Department for export promotion efforts. Of the total funding, $30 million is expected to be used to target and assist known 

U.S. exporters that have an immediate capacity to grow their international sales; $11 million is to be used to expand the ExporTech 

program; and $15 million is to be provided to the MDCP. The substitute amendment also incorporated a Sense of the Senate that the 


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Department should work closely with the States to extend the 

reach of its export promotion efforts. 

In addition to the changes made to S. 3084 by the substitute, the 

Committee adopted an amendment by Senator Johanns that would 

require the Secretary of Commerce, within 90 days of the date of 

enactment, to report to Congress on the tariff and nontariff trade 

barriers imposed by Columbia, South Korea, and Panama on U.S. 

exports. 

ESTIMATED COSTS

In accordance with paragraph 11(a) of rule XXVI of the Standing 

Rules of the Senate and section 403 of the Congressional Budget 

Act of 1974, the Committee provides the following cost estimate, 

prepared by the Congressional Budget Office: 

JUNE 28, 2010. 

Hon. JOHN D. ROCKEFELLER IV, 

Chairman, Committee on Commerce, Science, and Transportation, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 3084, the Export Promotion 

Act of 2010. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

S. 3084—Export Promotion Act of 2010 

Summary: S. 3084 would authorize the International Trade Administration (ITA) to increase the number of employees that promote the participation of United States companies in international 

markets. The bill also would authorize appropriations for various 

programs in the Department of Commerce that improve the 

competiveness of domestic companies in foreign markets. 

Based on information from the ITA, CBO estimates that implementing S. 3084 would cost $248 million over the 2011–2015 period, assuming the appropriation of the necessary amounts. Enacting S. 3084 would not affect direct spending or revenues; therefore, 

pay-as-you-go procedures would not apply. 

S. 3084 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 3084 is shown in the following table. The costs 

of this legislation fall within budget function 370 (commerce and 

housing credit). 

By fiscal year in millions of dollars— 

2011 2012 2013 2014 2015 2011–2015 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Global Business Development: 

Estimated Authorization Level ................................................... 12 24 36 48 59 179 

Estimated Outlays ..................................................................... 10 22 34 45 57 168 


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By fiscal year in millions of dollars— 

2011 2012 2013 2014 2015 2011–2015 

Rural Export Initiative: 

Authorization Level .................................................................... 5 5 5 5 5 25 

Estimated Outlays ..................................................................... 4 5 5 5 5 24 

Global Business Development: 

Authorization Level .................................................................... 30 0 0 0 0 30 

Estimated Outlays ..................................................................... 26 4 0 0 0 30 

ExporTech Program: 

Authorization Level .................................................................... 11 0 0 0 0 11 

Estimated Outlays ..................................................................... 9 2 0 0 0 11 

Market Development Cooperator: 

Authorization Level .................................................................... 15 0 0 0 0 15 

Estimated Outlays ..................................................................... 13 2 0 0 0 15 

Total Changes:.

Estimated Authorization Level .......................................... 73 29 41 53 64 260 

Estimated Outlays ............................................................ 62 35 39 50 62 248 

Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted before the end of fiscal year 2010, that the necessary amounts will be appropriated for each year, and that spending will follow historical patterns for similar programs. CBO estimates that implementing S. 3084 would cost $248 million over the 

2011–2015 period, assuming appropriation of the necessary 

amounts. 

Global Business Development 

S. 3084 would require the ITA to increase the number of employees whose primary responsibilities involve promoting the participation of U.S. firms in foreign markets. Within five years of enactment, the agency would be required to increase the number of staff 

performing those activities to the same number that performed this 

work in fiscal year 2004. Based on information from the ITA, CBO 

expects that the agency would need to hire about 210 additional 

employees over five years to reach that staffing level. We estimate 

that implementing those requirements would cost $168 million over 

the 2011–2015 period. 

Other Export Initiatives 

The bill would authorize the appropriation of $81 million for a 

number of programs designed to improve the competitiveness of 

U.S. businesses in international markets. CBO estimates that implementing those provisions would cost $80 million over the 2011– 

2015 period. Those costs would include: 

• $24 million for a program to improve the access of rural 

businesses to the global marketplace; 

• $30 million to promote the expansion of small- and mediumsized businesses in foreign markets; 

• $11 million to expand ExporTech, a program jointly sponsored by the ITA, the National Institute of Standards and 

Technology, and educational, state, and private institutions 

that provides technical assistance to small- and medium-sized 

businesses that want to expand into international markets; 

and 

• $15 million to establish partnerships between public institutions and private enterprises through the ITA’s Market Development Cooperator Program (MDCP). The MDCP provides 


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technical and financial assistance to nonprofit groups representing manufacturing and service industries to support 

projects that improve their industries’ competitiveness in foreign markets. 

Pay-as-you-go considerations: None. 

Intergovernmental and private-sector impact: S. 3084 contains no 

intergovernmental or private-sector mandates as defined in UMRA 

and would not affect the budgets of state, local, or tribal governments. 

Estimate prepared by: Federal Costs: Susan Willie; Impact on 

State, Local, and Tribal Governments: Elizabeth Cove Delisle; Impact on the Private Sector: Sam Wice. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

REGULATORY IMPACT STATEMENT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported: 

NUMBER OF PERSONS COVERED

The bill does not impose any new rules or otherwise modify the 

jurisdictional reach of the Department. Consequently, the Committee does not expect that it will subject any additional individuals or businesses to regulations. 

ECONOMIC IMPACT

The bill would authorize an increase of approximately 200 employees and $81 million to the Department for specific export promotion programs. Based on the historical return on investment of 

these programs, S. 3084 should support the creation of exportbased American jobs. 

PRIVACY

The Committee does not anticipate that the bill would have any 

adverse impact on the personal privacy of individuals. 

PAPERWORK

While the Committee does not anticipate a major increase in paperwork burdens resulting from the passage of this legislation, the 

legislation would require one report from the Department to be 

issued within 90 days of the date of enactment. The Secretary of 

Commerce, in consultation with the United States Trade Representative (USTR), must report to Congress on the tariff and nontariff trade barriers imposed by Columbia, South Korea, and Panama on U.S. exports. USTR currently produces a similar report— 

the National Trade Estimate Report—which will significantly assist in the creation of the Department of Commerce report. 

CONGRESSIONALLY DIRECTED SPENDING

In compliance with paragraph 4(b) of rule XLIV of the Standing 

Rules of the Senate, the Committee provides that no items conVerDate Mar 15 2010 06:41 Sep 14, 2010 Jkt 089006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\SR289.XXX SR289

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tained in the bill, as reported, meet the definition of congressionally directed spending items under the rule. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title. 

Section 1 would provide that the bill may be cited as the Export 

Promotion Act of 2010. 

Section 2. Commerce Department global business development and 

promotion activities. 

Section 2 would direct the Department to increase the number of 

full-time employees whose primary responsibilities involve promoting or facilitating participation by U.S. businesses in the global 

marketplace. The number of employees would be equal to the number at the Department in 2004. In carrying out the section, the Department would take such action as necessary to ensure that its 

global marketplace promotional activities include efforts focused on 

small and medium-sized businesses. The section would authorize 

appropriations of such sums as necessary for fiscal years 2011 

through 2015. 

Section 3. Improved access to global markets for rural businesses. 

Section 3 would authorize $25 million over 5 years to the Department to focus its activities on improving access to the global marketplace for rural businesses. 

Section 4. Additional funding for interstate commerce and global 

business development activities of the Department of Commerce. 

Section 4 would authorize $30 million in additional funds to be 

used within 18 months by the Department to promote or facilitate 

participation by U.S. businesses in the global marketplace. In obligating and expending the funds, the Secretary would give preference to activities that assist small and medium-sized businesses, 

create or sustain the greatest number of jobs in the United States, 

and obtain the maximum return on investment. 

Section 5. Additional funding for the ExporTech program. 

Section 5 would authorize $11 million to be used within 18 

months by the MEP to expand the ExporTech program. 

Section 6. Additional funding for the market development cooperator program of the Department of Commerce. 

Section 6 would authorize $15 million for the ITA to award 

MDCP grants in order to establish public-private partnerships to 

underwrite a portion of the start-up costs for new export projects. 

These funds must be used within 18 months. The underwriting for 

each project would not exceed one-third of the total start-up costs 

or $500,000, whichever is less. In obligating and expending the 

funds, the Secretary would give preference to small and mediumsized businesses and to activities that create or sustain the greatest number of jobs in the United States and obtain the maximum 

return on investment. 


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Section 7. Hollings manufacturing extension partnerships; technology innovation program. 

Section 7 would allow for additional criteria to be used in determining MEP and TIP awards. Such expanded criteria would include whether an application has significant potential for enhancing the competitiveness of small and medium-sized U.S. manufacturers in the global marketplace. 

Section 8. Sense of the Senate concerning Federal collaboration with 

States on export promotion issues. 

Section 8 would provide the Sense of the Senate that the Secretary of Commerce should enhance Federal collaboration with the 

States on export promotion by: (1) providing the necessary training 

to the staff at State international trade agencies; and (2) entering 

into agreements with State international trade agencies to deliver 

USFCS offerings in their local communities in order to extend the 

outreach of USFCS programs. 

Section 9. Report on tariff and nontariff barriers. 

Section 9 would require the Secretary of Commerce within 90 

days to report to Congress on the tariff and nontariff barriers imposed by Columbia, South Korea, and Panama on U.S. exports. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new material is printed in italic, existing law in which no change is proposed is shown in roman): 

NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY 

ACT 

SEC. 25. REGIONAL CENTERS FOR THE TRANSFER OF MANUFACTURING TECHNOLOGY. 

[15 U.S.C. 278k] 

(a) CREATION AND SUPPORT OF CENTERS; AFFILIATIONS; MERIT REVIEW IN DETERMINING AWARDS; OBJECTIVES.—The Secretary, 

through the Director and, if appropriate, through other officials, 

shall provide assistance for the creation and support of Regional 

Centers for the Transfer of Manufacturing Technology (hereafter in 

this Act referred to as the ‘‘Centers’’). Such centers shall be affiliated with any United States-based nonprofit institution or organization, or group thereof, that applies for and is awarded financial 

assistance under this section in accordance with the description 

published by the Secretary in the Federal Register under subsection (c)(2). Individual awards shall be decided on the basis of 

merit review. The objective of the Centers is to enhance productivity and technological performance in United States manufacturing through— 

(1) the transfer of manufacturing technology and techniques 

developed at the Institute to Centers and, through them, to 

manufacturing companies throughout the United States; 

(2) the participation of individuals from industry, universities, State governments, other Federal agencies, and, when 


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appropriate, the Institute in cooperative technology transfer activities; 

(3) efforts to make new manufacturing technology and processes usable by United States-based small- and medium-sized 

companies; 

(4) the active dissemination of scientific, engineering, technical, and management information about manufacturing to industrial firms, including small- and medium-sized manufacturing companies; and 

(5) the utilization, when appropriate, of the expertise and capability that exists in Federal laboratories other than the Institute. 

(b) ACTIVITIES OF CENTERS.—The activities of the Centers shall 

include— 

(1) the establishment of automated manufacturing systems 

and other advanced production technologies, based on research 

by the Institute, for the purpose of demonstrations and technology transfer; 

(2) the active transfer and dissemination of research findings 

and Center expertise to a wide range of companies and enterprises, particularly small- and medium-sized manufacturers; 

and 

(3) loans, on a selective, short-term basis, of items of advanced manufacturing equipment to small manufacturing 

firms with less than 100 employees. 

(c) DURATION AND AMOUNT OF SUPPORT; PROGRAM DESCRIPTIONS; 

APPLICATIONS; MERIT REVIEW; EVALUATIONS OF ASSISTANCE; APPLICABILITY OF PATENT LAW.— 

(1) The Secretary may provide financial support to any Center created under subsection (a) for a period not to exceed six 

years. The Secretary may not provide to a Center more than 

50 percent of the capital and annual operating and maintenance funds required to create and maintain such Center. 

(2) The Secretary shall publish in the Federal Register, within 90 days after the date of the enactment of this section, a 

draft description of a program for establishing Centers, including— 

(A) a description of the program; 

(B) procedures to be followed by applicants; 

(C) criteria for determining qualified applicants; 

(D) criteria, including those listed under paragraph (4), 

for choosing recipients of financial assistance under this 

section from among the qualified applicants; and 

(E) maximum support levels expected to be available to 

Centers under the program in the fourth through sixth 

years of assistance under this section. 

The Secretary shall publish a final description under this paragraph after the expiration of a 30-day comment period. 

(3)(A) Any nonprofit institution, or group thereof, or consortia of nonprofit institutions, including entities existing on 

August 23, 1988, may submit to the Secretary an application 

for financial support under this subsection, in accordance with 

the procedures established by the Secretary and published in 

the Federal Register under paragraph (2). 


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(B) In order to receive assistance under this section, an applicant for financial assistance under subparagraph (A) shall 

provide adequate assurances that non-Federal assets obtained 

from the applicant and the applicant’s partnering organizations will be used as a funding source to meet not less than 

50 percent of the costs incurred for the first 3 years and an increasing share for each of the last 3 years. For purposes of the 

preceding sentence, the costs incurred means the costs incurred in connection with the activities undertaken to improve 

the management, productivity, and technological performance 

of small- and medium-sized manufacturing companies. 

(C) In meeting the 50 percent requirement, it is anticipated 

that a Center will enter into agreements with other entities 

such as private industry, universities, and State governments 

to accomplish programmatic objectives and access new and existing resources that will further the impact of the Federal investment made on behalf of small- and medium-sized manufacturing companies. All non-Federal costs[,] contributed by such 

entities and determined by a Center as programmatically reasonable and allocable under MEP program procedures are includable as a portion of the Center’s contribution. 

(D) Each applicant under subparagraph (A) shall also submit 

a proposal for the allocation of the legal rights associated with 

any invention which may result from the proposed Center’s activities. 

(4) The Secretary shall subject each such application to merit 

review. In making a decision whether to approve such application and provide financial support under this subsection, the 

Secretary shall consider at a minimum (A) the merits of the 

application, particularly those portions of the application regarding technology transfer, training and education, and adaptation of manufacturing technologies to the needs of particular 

industrial sectors, (B) the quality of service to be provided, (C) 

geographical diversity and extent of service area, and (D) the 

percentage of funding and amount of in-kind commitment from 

other sources. 

(5) Each Center which receives financial assistance under 

this section shall be evaluated during its third year of operation by an evaluation panel appointed by the Secretary. Each 

such evaluation panel shall be composed of private experts, 

none of whom shall be connected with the involved Center, and 

Federal officials. An official of the Institute shall chair the 

panel. Each evaluation panel shall measure the involved Center’s performance against the objectives specified in this section. The Secretary shall not provide funding for the fourth 

through the sixth years of such Center’s operation unless the 

evaluation is positive. If the evaluation is positive, the Secretary may provide continued funding through the sixth year 

at declining levels. A Center that has not received a positive 

evaluation by the evaluation panel shall be notified by the 

panel of the deficiencies in its performance and shall be placed 

on probation for one year, after which time the panel shall reevaluate the Center. If the Center has not addressed the deficiencies identified by the panel, or shown a significant improvement in its performance, the Director shall conduct a new 


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competition to select an operator for the Center or may close 

the Center. After the sixth year, a Center may receive additional financial support under this section if it has received a 

positive evaluation through an independent review, under procedures established by the Institute. Such an independent review shall be required at least every two years after the sixth 

year of operation. Funding received for a fiscal year under this 

section after the sixth year of operation shall not exceed one 

third of the capital and annual operating and maintenance 

costs of the Center under the program. 

(6) The provisions of chapter 18 of title 35, United States 

Code, shall (to the extent not inconsistent with this section) 

apply to the promotion of technology from research by Centers 

under this section except for contracts for such specific technology extension or transfer services as may be specified by 

statute or by the Director. 

(d) ACCEPTANCE OF FUNDS.— (1) IN GENERAL.—In addition to such sums as may be appropriated to the Secretary and Director to operate the Centers 

program, the Secretary and Director also may accept funds 

from other Federal departments and agencies and under section 2(c)(7) from the private sector for the purpose of strengthening United States manufacturing. 

(2) ALLOCATION OF FUNDS.— (A) FUNDS ACCEPTED FROM OTHER FEDERAL DEPART- MENTS OR AGENCIES.—The Director shall determine whether funds accepted from other Federal departments or agencies shall be counted in the calculation of the Federal 

share of capital and annual operating and maintenance 

costs under subsection (c). 

(B) FUNDS ACCEPTED FROM THE PRIVATE SECTOR.—Funds 

accepted from the private sector under section 2(c)(7), if allocated to a Center, shall not be considered in the calculation of the Federal share under subsection (c) of this section. 

(e) MEP ADVISORY BOARD.— (1) ESTABLISHMENT.—There is established within the Institute a Manufacturing Extension Partnership Advisory Board 

(in this subsection referred to as the ‘‘MEP Advisory Board’’). 

(2) MEMBERSHIP.— 

(A) IN GENERAL.—The MEP Advisory Board shall consist 

of 10 members broadly representative of stakeholders, to 

be appointed by the Director. At least 2 members shall be 

employed by or on an advisory board for the Centers, and 

at least 5 other members shall be from United States 

small businesses in the manufacturing sector. No member 

shall be an employee of the Federal Government. 

(B) TERM.—Except as provided in subparagraph (C) or 

(D), the term of office of each member of the MEP Advisory Board shall be 3 years. 

(C) CLASSES.—The original members of the MEP Advisory Board shall be appointed to 3 classes. One class of 3 

members shall have an initial term of 1 year, one class of 

3 members shall have an initial term of 2 years, and one 

class of 4 members shall have an initial term of 3 years. 


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(D) VACANCIES.—Any member appointed to fill a vacancy 

occurring prior to the expiration of the term for which his 

predecessor was appointed shall be appointed for the remainder of such term. 

(E) SERVING CONSECUTIVE TERMS.—Any person who has 

completed two consecutive full terms of service on the 

MEP Advisory Board shall thereafter be ineligible for appointment during the one-year period following the expiration of the second such term. 

(3) MEETINGS.—The MEP Advisory Board shall meet not less 

than 2 times annually, and provide to the Director— 

(A) advice on Manufacturing Extension Partnership programs, plans, and policies; 

(B) assessments of the soundness of Manufacturing Extension Partnership plans and strategies; and 

(C) assessments of current performance against Manufacturing Extension Partnership program plans. 

(4) FEDERAL ADVISORY COMMITTEE ACT.—In discharging its 

duties under this subsection, the MEP Advisory Board shall 

function solely in an advisory capacity, in accordance with the 

Federal Advisory Committee Act. 

(5) REPORT.—The MEP Advisory Board shall transmit an annual report to the Secretary for transmittal to Congress within 

30 days after the submission to Congress of the President’s annual budget request in each year. Such report shall address 

the status of the program established pursuant to this section 

and comment on the relevant sections of the programmatic 

planning document and updates thereto transmitted to Congress by the Director under subsections (c) and (d) of section 

23. 

(f) COMPETITIVE GRANT PROGRAM.— (1) ESTABLISHMENT.—The Director shall establish, within the 

Centers program under this section and section 26 of this Act, 

a program of competitive awards among participants described 

in paragraph (2) for the purposes described in paragraph (3). 

(2) PARTICIPANTS.—Participants receiving awards under this 

subsection shall be the Centers, or a consortium of such Centers. 

(3) PURPOSE.—The purpose of the program under this subsection is to develop projects to solve new or emerging manufacturing problems as determined by the Director, in consultation with the Director of the Centers program, the Manufacturing Extension Partnership Advisory Board, and small and 

medium-sized manufacturers. One or more themes for the competition may be identified, which may vary from year to year, 

depending on the needs of manufacturers and the success of 

previous competitions. These themes shall be related to 

projects associated with manufacturing extension activities, including supply chain integration and quality management, and 

including the transfer of technology based on the technological 

needs of manufacturers and available technologies from institutions of higher education, laboratories, and other technology 

producing entities, or extend beyond these traditional areas. 

(4) APPLICATIONS.—Applications for awards under this subsection shall be submitted in such manner, at such time, and 


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containing such information as the Director shall require, in 

consultation with the Manufacturing Extension Partnership 

Advisory Board. 

(5) SELECTION.—Awards under this subsection shall be peer 

reviewed and competitively awarded. The Director shall select 

proposals to receive awards— 

(A) that utilize innovative or collaborative approaches to 

solving the problem described in the competition; 

(B) that will improve the competitiveness of industries in 

the region in which the Center or Centers are located; and 

(C) that will contribute to the long-term economic stability of that region. 

(6) PROGRAM CONTRIBUTION.—Recipients of awards under 

this subsection shall not be required to provide a matching 

contribution. 

(7) GLOBAL MARKETPLACE PROJECTS.—In making awards 

under this subsection, the Director, in consultation with the 

Manufacturing Extension Partnership Advisory Board and the 

Secretary of Commerce, may take into consideration whether an 

application has significant potential for enhancing the competitiveness of small and medium-sized United States manufacturers in the global marketplace and may give a preference to applications for such projects to the extent the Director deems appropriate, taking into account the broader purposes of this subsection. 

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