Union Calendar No. 35
103D CONGRESS
1ST SESSION
H. R. 820
[Report No. 103–77]
A BILL
To amend the Stevenson-Wydler Technology Inno-
vation Act of 1980 to enhance manufacturing
technology development and transfer, to author-
ize appropriations for the Technology Adminis-
tration of the Department of Commerce, includ-
ing the National Institute of Standards and
Technology, and for other purposes.
MAY 3, 1993
Reported with an amendment, committed to the Commit-
tee of the Whole House on the State of the Union, and
ordered to be printed
IB
Union Calendar No. 35
103D CONGRESS
1ST SESSION
H. R. 820
[Report No. 103–77]
To amend the Stevenson-Wydler Technology Innovation Act of 1980 to en-
hance manufacturing technology development and transfer, to authorize
appropriations for the Technology Administration of the Department
of Commerce, including the National Institute of Standards and Tech-
nology, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 4, 1993
Mr. VALENTINE (for himself, Mr. BROWN, Mr. MINETA, Mrs. LLOYD, Mr.
GLICKMAN, Mr. VOLKMER, Mr. BOEHLERT, Mr. HALL of Texas, Mr.
MCCURDY, Mr. HENRY, Mr. TORRICELLI, Mr. BOUCHER, Mr. TRAFI-
CANT, Mr. HAYES, Mr. BACCHUS of Florida, Mr. ROEMER, Mr. CRAMER,
Mr. SWETT, Mr. BARCIA, Mr. KLEIN, Mr. FINGERHUT, Mr. MCHALE,
Mr. BECERRA, Ms. HARMAN, Mr. JOHNSON of Georgia, Mr. COPPER-
SMITH, Ms. ESHOO, Mr. INSLEE, Ms. E.B. JOHNSON of Texas, Mr.
MINGE, Mr. SCOTT, Ms. WOOLSEY, Mr. MOORHEAD, Mr. REGULA, Mr.
RIDGE, Mr. THORNTON, Mr. ENGEL, and Mr. OLVER) introduced the fol-
lowing bill; which was referred to the Committee on Science, Space, and
Technology
MAY 3, 1993
Additional sponsors: Mr. HINCHEY, Mr. DICKS, Mr. EVANS, Mr. HUGHES, Mr.
LANCASTER, Mr. LAFALCE, Mr. MACHTLEY, Mr. KLINK, Mr. MOLLO-
HAN, Ms. KAPTUR, Ms. SHEPARD, Mr. MEEHAN.
MAY 3, 1993
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on February 4, 1993]
A BILL
To amend the Stevenson-Wydler Technology Innovation Act
of 1980 to enhance manufacturing technology develop-
ment and transfer, to authorize appropriations for the
Technology Administration of the Department of Com-
merce, including the National Institute of Standards and
Technology, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE I—GENERAL PROVISIONS
SEC. 101. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Na-
tional Competitiveness Act of 1993’’.
(b) TABLE OF CONTENTS.—
TITLE I—GENERAL PROVISIONS
Sec. 101. Short title; table of contents.
Sec. 102. Findings.
Sec. 103. Purposes.
Sec. 104. Definitions.
TITLE II—MANUFACTURING
Subtitle A—Manufacturing Technology and Extension
Sec. 201. Short title.
Sec. 202. Findings, purpose, and statement of policy.
Sec. 203. Role of the Department of Commerce.
Sec. 204. National Technology Outreach Program.
Sec. 205. Advanced Manufacturing Technology Development Program.
Sec. 206. Miscellaneous and conforming amendments.
Sec. 207. Manufacturing Technology Centers.
Sec. 208. State Technology Extension Program.
Subtitle B—National Science Foundation Manufacturing Programs
Sec. 211. Role of the National Science Foundation in manufacturing.
Sec. 212. Engineering and Cooperative Research Centers.
Sec. 213. Manufacturing traineeships and fellowships.
Sec. 214. Total quality management.
TITLE III—CRITICAL TECHNOLOGIES
Subtitle A—Benchmarking Science and Technology
Sec. 301. Benchmarking United States science and technology against foreign ca-
pabilities.
Subtitle B—Advanced Technology Program
Sec. 321. Development of program plan.
Sec. 322. Large scale research and development consortia.
Sec. 323. Technical amendments.
Subtitle C—Civilian Technology Loan Program
Sec. 331. Loan and loan guarantee authority.
Sec. 332. Operating plan and effective date.
Sec. 333. Terms and conditions.
Sec. 334. Technical assistance for lenders and borrowers.
Sec. 335. Outreach to economically depressed areas.
Sec. 336. Socially and economically disadvantaged individuals.
Sec. 337. Definitions.
Subtitle D—Civilian Technology Development Program
Sec. 341. Short title.
Sec. 342. Definitions.
Sec. 343. Establishment and purpose.
Sec. 344. Advisory Committee.
Sec. 345. Organization and licensing.
Sec. 346. Capital and management requirements.
Sec. 347. Financing for licensees.
Sec. 348. Issuance and guarantee of trust certificates.
Sec. 349. Venture capital for qualified business concerns.
Sec. 350. Operation.
Sec. 351. Regulations; liability.
Sec. 352. Technical assistance for licensees and qualified business concerns.
Sec. 353. Performance measures; Annual report.
Sec. 354. Reports, investigations, and examinations.
Sec. 355. Revocation and suspension of licenses; cease and desist orders.
Sec. 356. Injunctive relief.
Sec. 357. Conflicts of interest.
Sec. 358. Removal or suspension of directors and officers.
Sec. 359. Violations.
Sec. 360. Civil penalties.
Sec. 361. Antitrust savings clause.
TITLE IV—MISCELLANEOUS
Sec. 401. Department of Commerce Technology Advisory Board.
Sec. 402. International standardization.
Sec. 403. Malcolm Baldrige Award amendments.
Sec. 404. Cooperative research and development agreements.
Sec. 405. Competitiveness assessments and evaluations.
Sec. 406. Study of semiconductor lithography technologies.
Sec. 407. American workforce quality partnerships.
Sec. 408. Severability.
Sec. 409. Sunset.
Sec. 410. Use of domestic products.
Sec. 411. National Quality Program.
TITLE V—AUTHORIZATIONS OF APPROPRIATIONS
Sec. 501. Technology Administration.
Sec. 502. National Institute of Standards and Technology.
Sec. 503. Additional activities of the Technology Administration.
Sec. 504. National Science Foundation.
Sec. 505. Availability of appropriations.
Sec. 506. Sense of the Congress.
SEC. 102. FINDINGS.
The Congress finds that—
(1) the creation, development, and adoption of
advanced technologies are significant determinants of
sustainable economic growth, productivity improve-
ment, and competitive standing;
(2) over the last decade, the rate of advanced
technology adoption in the United States has been
about half that of some prominent foreign nations
and has contributed to a relative decline in United
States industrial competitiveness;
(3) maintaining a highly competitive manufac-
turing base in the United States is essential for eco-
nomic prosperity and national welfare and requires
continuous development and adoption of advanced
manufacturing technologies that will enable United
States manufacturers to develop innovative products
rapidly and manufacture goods of the highest quality
at competitive prices;
(4) there is general agreement on which fields of
technology are critical for economic competitiveness
through the first decade of the next century, but the
United States Government must pursue a comprehen-
sive strategy to ensure that the appropriate research,
development, and applications activities and other re-
forms occur so these technologies are readily available
to United States manufacturers for incorporation into
products made in the United States;
(5) technology-based products of the twenty-first
century must be developed incorporating the values of
sustainable development, including low energy and
material use, safety, recyclability, and minimal pol-
lution;
(6) the cost of and difficulty in obtaining invest-
ment capital for small high technology companies are
significant deterrents to their formation, development,
and growth;
(7) standardization of weights and measures, in-
cluding development and promotion of product and
quality standards, has a significant role to play in
competitiveness;
(8) strategic technology planning for sustainable
economic growth, the support of critical civilian tech-
nology research, development, and application, and
advancement of manufacturing technology research,
development, and adoption are appropriate Govern-
ment roles; and
(9) programs established under this Act, and the
amendments made by this Act, shall be funded as a
result of shifting the total Federal investment in re-
search and development to achieve a balance between
support for defense and civilian activities, and shall
not be financed through additional deficit spending.
SEC. 103. PURPOSES.
The purposes of this Act are to—
(1) promote and facilitate the creation, develop-
ment, and adoption of technologies by United States
companies throughout the Nation that will contribute
significantly to United States competitiveness, em-
ployment, and sustainable economic growth;
(2) improve the competitiveness of United States
manufacturers, particularly small businesses, by de-
veloping a nationwide technology outreach program
to improve access to information, expertise, tech-
nology, and management practices required to com-
pete throughout the world;
(3) promote the development and rapid applica-
tion of advanced manufacturing technologies and
processes by United States manufacturers, with em-
phasis on environmentally sound practices and sus-
tainable economic growth;
(4) stimulate long-term investment in United
States companies engaged in development or utiliza-
tion of critical or other advanced technologies;
(5) establish mechanisms to ensure synergistic
linkages between Federal, State, and local initiatives
aimed at enhancing the competitiveness of United
States companies;
(6) enhance and expand the core programs of the
National Institute of Standards and Technology, in-
cluding the Advanced Technology Program; and
(7) monitor and assess foreign technology capa-
bilities relative to those of the United States in order
to assist United States companies and policymakers
in identifying and responding to competitive opportu-
nities and challenges.
SEC. 104. DEFINITIONS.
For purposes of this Act—
(1) the term ‘‘advanced manufacturing tech-
nology’’ has the meaning given such term in section
4 of the Stevenson-Wydler Technology Innovation Act
of 1980, as amended by section 206(a) of this Act;
(2) the term ‘‘critical technologies’’ means tech-
nologies identified as critical technologies pursuant to
section 603(d) of the National Science and Technology
Policy, Organization, and Priorities Act of 1976 (42
U.S.C. 6683(d));
(3) the term ‘‘Director’’ means the Director of the
Institute;
(4) the term ‘‘Institute’’ means the National In-
stitute of Standards and Technology;
(5) the term ‘‘modern technology’’ has the mean-
ing given such term in section 4 of the Stevenson-
Wydler Technology Innovation Act of 1980, as
amended by section 206(a) of this Act;
(6) the term ‘‘Secretary’’ means the Secretary of
Commerce;
(7) the term ‘‘small business’’ means a United
States company that is a small business within the
meaning given such term in the Small Business Act;
(8) the term ‘‘sustainable economic growth’’ has
the meaning given such term in section 4 of the Ste-
venson-Wydler Technology Innovation Act of 1980, as
amended by section 206(a) of this Act;
(9) the term ‘‘United States company’’ has the
meaning given such term in section (4) of the Steven-
son-Wydler Technology Innovation Act of 1980, as
amended by section 206(a) of this Act;
(10) the term ‘‘United States manufacturer’’ has
the meaning given such term in section 4 of the Ste-
venson-Wydler Technology Innovation Act of 1980, as
amended by section 206(a) of this Act; and
(11) the term ‘‘Under Secretary’’ means the
Under Secretary of Commerce for Technology.
TITLE II—MANUFACTURING
Subtitle A—Manufacturing
Technology and Extension
SEC. 201. SHORT TITLE.
This subtitle may be cited as the ‘‘Manufacturing
Technology and Extension Act of 1993’’.
SEC. 202. FINDINGS, PURPOSE, AND STATEMENT OF POL-
ICY.
The Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3701 et seq.) is amended by adding at the
end the following new title:
‘‘TITLE III—MANUFACTURING
TECHNOLOGY
‘‘SEC. 301. FINDINGS, PURPOSE, AND STATEMENT OF POL-
ICY.
‘‘(a) FINDINGS.—Congress finds and declares the fol-
lowing:
‘‘(1) United States manufacturers, especially
small businesses, require the adoption and implemen-
tation of both modern and advanced manufacturing
and process technologies to meet the challenge of for-
eign competition.
‘‘(2) The development and application of modern
and advanced manufacturing technologies are vital to
the sustainable economic growth, standard of living,
competitiveness in world markets, and national secu-
rity and welfare of the United States.
‘‘(3) New developments in flexible, computer-inte-
grated manufacturing, electronic manufacturing com-
munications networks, and other new technologies
make possible dramatic improvements across all in-
dustrial sectors in productivity, quality, and the
speed with which United States manufacturers can
respond to changing market opportunities.
‘‘(4) The application of advances in computer
science and technology to manufacturing is also vital
to the Nation’s prosperity, national and economic se-
curity, industrial production, engineering, and sci-
entific advancement.
‘‘(5) The Department of Commerce’s Technology
Administration can continue to play an important
role in assisting United States companies to develop,
test, and adopt modern and advanced manufacturing
technologies and in establishing high-performance
computing technology testbeds to develop, refine, test,
and 
transfer 
advanced 
manufacturing 
and
networking technologies and associated applications.
‘‘(b) PURPOSE.—It is the purpose of this title to con-
tribute to the competitiveness of the United States by en-
hancing the Department of Commerce’s technology pro-
grams to—
‘‘(1) provide United States manufacturers, espe-
cially small businesses, with ready access to high
quality advice and assistance in the development,
adoption, and improvement of modern manufacturing
processes and technology, and in solving their specific
technology-based problems; and
‘‘(2) encourage, facilitate, and support the devel-
opment and adoption of advanced manufacturing
principles and technologies by United States manu-
facturers.
‘‘(c) STATEMENT OF POLICY.—Congress declares that
it is the policy of the United States that—
‘‘(1) Federal agencies, particularly the Depart-
ment of Commerce, shall work with United States
manufacturers, labor, and the States to ensure that
the United States is second to no other nation in the
development, adoption, and use of modern and ad-
vanced manufacturing technology;
‘‘(2) the Department of Commerce shall work
with all the major Federal research and development
agencies to encourage the development and adoption,
by United States manufacturers, of advanced manu-
facturing technologies, and shall work closely with
United States manufacturers and labor, and with the
Nation’s universities, to develop and test those tech-
nologies; and
‘‘(3) the Department of Commerce shall place a
high priority on the establishment and growth of a
National Technology Outreach Program to promote
and facilitate the development and use by United
States manufacturers of modern and advanced manu-
facturing systems and applications for manufactur-
ing.
‘‘(d) CONSTRUCTION.—Nothing in this title shall be
construed as modifying the duties and responsibilities of the
Department of Energy with regard to its technology re-
sources and expertise in matters under its jurisdiction.’’.
SEC. 203. ROLE OF THE DEPARTMENT OF COMMERCE.
Title III of the Stevenson-Wydler Technology Innova-
tion Act of 1980, as added by section 202 of this Act, is
further amended by adding at the end the following new
section:
‘‘SEC. 302. ROLE OF THE DEPARTMENT OF COMMERCE.
‘‘(a) DEPARTMENT OF COMMERCE.—Consistent with
the purposes and policies of section 301, the Department
of Commerce shall be the lead agency of the Federal Govern-
ment in working with United States manufacturers and
labor and the States to develop advanced manufacturing
technologies and to promote and assist the adoption and
use of modern and advanced manufacturing technologies,
practices, and management techniques throughout the Unit-
ed States. In carrying out this title, the Secretary, acting,
as appropriate, through the Under Secretary and the Direc-
tor, shall—
‘‘(1) consult and cooperate with other Federal
agencies, including the Department of Defense, the
Department of Energy, and the National Aeronautics
and Space Administration to ensure consistent and,
where possible, coordinated efforts to promote the de-
velopment and adoption of modern and advanced
manufacturing technologies;
‘‘(2) assist the Office of Science and Technology
Policy in its efforts to coordinate the manufacturing
technology activities of the various Federal agencies;
and
‘‘(3) work with representatives of Federal, State,
and local agencies, manufacturing extension pro-
grams, private industry, industry groups, worker or-
ganizations, and academia to encourage and facilitate
the use of both advanced manufacturing technologies,
including those developed by the Advanced Manufac-
turing Technology Development Program established
under section 304 of this Act, and modern manufac-
turing technologies and practices to United States
manufacturers.
The Secretary shall annually report to Congress on actions
taken under this subsection.
‘‘(b) OTHER FEDERAL AGENCIES.—To the extent per-
mitted by other law, other Federal agencies shall cooperate
with the Secretary in carrying out this title.’’.
SEC. 204. NATIONAL TECHNOLOGY OUTREACH PROGRAM.
Title III of the Stevenson-Wydler Technology Innova-
tion Act of 1980, as added by sections 202 and 203 of this
Act, is further amended by adding at the end the following
new section:
‘‘SEC. 303. NATIONAL TECHNOLOGY OUTREACH PROGRAM.
‘‘(a) ESTABLISHMENT AND PURPOSE.—There is hereby
established a National Technology Outreach Program (in
this section referred to as the ‘Outreach Program’), the pur-
pose of which shall be to—
‘‘(1) interconnect, programatically and electroni-
cally, the Nation’s technology and manufacturing ex-
tension centers, programs, and activities;
‘‘(2) improve the competitiveness of United
States manufacturers and create jobs located in the
United States; and
‘‘(3) assist United States manufacturers, espe-
cially small businesses, to expand and accelerate the
use of cost-effective modern manufacturing tech-
nologies and practices and to develop and adopt ad-
vanced manufacturing technologies. The Secretary,
acting through the Under Secretary and the Director,
shall implement and coordinate the Outreach Pro-
gram in accordance with an initial plan and a 5-
year plan for the Outreach Program, to be submitted
to the Congress under subsection (g).
‘‘(b) PROGRAM COMPONENTS.—The Outreach Program
shall constitute a partnership between the Department of
Commerce, the States, the private sector, and, as appro-
priate, shall include other Federal agencies to provide a na-
tional system of manufacturing and technology extension
centers and technical services to United States manufactur-
ers, particularly small businesses. The Outreach Program
shall include—
‘‘(1) Manufacturing Outreach Centers established
under subsection (c);
‘‘(2) Regional Centers for the Transfer of Manu-
facturing Technology established under section 25 of
the National Institute of Standards and Technology
Act (15 U.S.C. 278k);
‘‘(3) the State Technology Extension Program es-
tablished under section 26 of the National Institute of
Standards and Technology Act (15 U.S.C. 278l);
‘‘(4) the Outreach Program Information Network
and the Clearinghouse established under subsections
(d) and (e) of this section, respectively; and
‘‘(5) other technology and manufacturing exten-
sion centers that the Secretary considers appropriate
for inclusion in the Outreach Program.
‘‘(c) MANUFACTURING OUTREACH CENTERS.—(1) Eli-
gible government and private sector organizations that are
engaged in technology or manufacturing extension activities
may apply to the Secretary for designation as Manufactur-
ing Outreach Centers, in such form and manner as the Sec-
retary may prescribe. Eligible organizations include Fed-
eral, State, and local government agencies, extension pro-
grams, universities, and laboratories; small business devel-
opment centers; and professional societies, worker organiza-
tions, industrial organizations, nonprofit organizations,
community development organizations, community colleges,
and technical schools and colleges.
‘‘(2) The Secretary shall establish standards, consistent
with the requirements of subsection (f), for designation of
existing technology or manufacturing extension programs
and for qualification of start-up programs as Manufactur-
ing Outreach Centers.
‘‘(3) The Secretary may, through a competitive proc-
ess, make grants, subject to the availability of appropria-
tions, to Manufacturing Outreach Centers designated in ac-
cordance with the standards established under paragraph
(2), to enable them to fulfill the purposes and perform the
activities of the Outreach Program. If a State plan for tech-
nology extension exists in a State where an applicant for
a grant under this paragraph is operating or plans to oper-
ate, the proposer shall demonstrate in its application that
its proposal is compatible with such State plan. The pur-
pose of such grants is to upgrade the overall quality of the
Outreach Program and to contribute to the goal of ready
availability of the services and information provided
through the Outreach Program, including information on
modern and advanced manufacturing technology, to all in-
terested United States manufacturers. Such grants shall be
awarded to increase the capabilities and capacity of Manu-
facturing Outreach Centers. Manufacturing Outreach Cen-
ters may not concurrently receive financial assistance
under section 25 of the National Institute of Standards and
Technology Act and grants under this paragraph. Grants
may be awarded under this paragraph for an initial period
not to exceed 3 years and may be renewed for one additional
period, not to exceed 2 years. Such grants may not at any
time exceed 50 percent of the operating costs and in-kind
contributions of the grant recipient.
‘‘(4) In selecting applicants to participate in the Out-
reach Program and in making grants under paragraph (3),
the Secretary shall solicit and consider evaluations of the
applicant’s performance record and current capabilities,
and the potential usefulness of the applicant’s proposal,
from United States manufacturers that the Secretary con-
siders qualified to make such evaluations.
‘‘(d) OUTREACH PROGRAM INFORMATION NETWORK.—
(1) The Department of Commerce shall provide for an in-
stantaneous, interactive electronic communications network
(in this section referred to as the ‘outreach network’) to serve
the Outreach Program, to facilitate effective and efficient
interaction within it, and to permit the collection and dis-
semination in electronic form, in a timely and accurate
manner, of information described in subsection (e). The out-
reach network shall, wherever practicable, make use of exist-
ing public and private computer networks, data bases, and
electronic bulletin boards. The design, configuration, acqui-
sition plan, and operating policies, including user fees and
appropriate electronic access for public and private infor-
mation suppliers and users, of the outreach network shall
be included in the 5-year plan prepared under subsection
(g)(2) and shall address—
‘‘(A) effective mechanisms for providing operat-
ing funds for the maintenance and use of the outreach
network established under this paragraph, including
user fees, industry support, and continued Federal in-
vestment;
‘‘(B) the future operation and evolution of the
outreach network, including its relationship with
other public or private information services;
‘‘(C) how to protect the copyrights of material
distributed over the outreach network; and
‘‘(D) appropriate policies—
‘‘(i) to ensure the security of proprietary in-
formation that might be available on the out-
reach network and to protect the privacy of users
of the outreach network; and
‘‘(ii) to facilitate and limit access to the
outreach network and its information to member
organizations of the Outreach Program and to
United States companies, State and local govern-
ments, United States universities and colleges,
and United States nonprofit organizations that
the Secretary deems appropriate.
‘‘(2) Except as provided in this section, the outreach
network established under paragraph (1) shall be designed
and configured in a manner that will enable interoper-
ability with networks and technologies developed under the
National High-Performance Computing Program described
in section 101 of the High-Performance Computing Act of
1991 (15 U.S.C. 5511).
‘‘(e) CLEARINGHOUSE.—(1) The Secretary shall de-
velop a clearinghouse system, using existing public and pri-
vate sector information providers and carriers where appro-
priate, to—
‘‘(A) identify expertise and acquire information,
appropriate to the purpose of the Outreach Program
stated in subsection (a), from all appropriate Federal
sources, and where appropriate from other sources,
providing assistance where necessary in making such
information electronically available through and com-
patible with the outreach network;
‘‘(B) ensure ready access, through the outreach
network, by United States companies, Federal agen-
cies, State and local governments, United States uni-
versities and colleges, United States nonprofit organi-
zations that the Secretary deems appropriate, and
member organizations of the Outreach Program, to
the most recent relevant available information and ex-
pertise;
‘‘(C) ensure that common standards of inter-
connection are utilized by the outreach network and
the clearinghouse to allow maximum interoperability
and usership; and
‘‘(D) to the extent practicable, inform United
States manufacturers of the availability of such infor-
mation.
‘‘(2) The clearinghouse shall include information
available electronically on—
‘‘(A) activities of Manufacturing Outreach Cen-
ters, Regional Centers for the Transfer of Manufactur-
ing Technology, the State Technology Extension Pro-
gram, and the users of the outreach network;
‘‘(B) domestic and international standards and
other export promotion information, including con-
formity assessment requirements and procedures;
‘‘(C) the Malcolm Baldrige Quality program,
and quality principles and standards;
‘‘(D) manufacturing processes minimizing waste
and negative environmental impact;
‘‘(E) federally funded technology development
and transfer programs;
‘‘(F) how to access data bases and services; and
‘‘(G) skills training, particularly the implemen-
tation and use of modern and advanced manufactur-
ing techniques.
‘‘(3) The Secretary, acting through the Under Sec-
retary, may convene a national conference to develop rec-
ommendations for common standards for interconnection
and for improved dissemination to users of the clearing-
house of information on domestic and international tech-
nical regulations and standards, and on conformity assess-
ment procedures, including draft standards and regula-
tions. Invited participants are to include a broad cross sec-
tion of the standards, accreditation, and user communities.
‘‘(f) ADDITIONAL REQUIREMENTS.—In carrying out
this section, the Secretary shall satisfy the following re-
quirements:
‘‘(1) The Outreach Program and the outreach
network shall be established and operated through co-
operation and cofunding among Federal, State, and
local governments, other public and private contribu-
tors, and end users that the Secretary determines are
appropriate for providing maximum benefit to Unit-
ed States manufacturers.
‘‘(2) The Outreach Program and the outreach
network shall utilize and leverage, to the extent prac-
ticable, existing organizations, data bases, electronic
networks, facilities, capabilities, and existing stand-
ards for interconnection, and shall be designed to
complement rather than supplant State and local pro-
grams.
‘‘(3) The Outreach Program and the outreach
network shall be subject to all applicable provisions of
law for the protection of trade secrets and business
confidential information.
‘‘(4) Access to the services available through the
Outreach Program and information available through
the outreach network servicing the Outreach Program
shall be limited, as appropriate, to United States
companies, State and local governments, United
States universities and colleges, and United States
nonprofit organizations that the Secretary deems ap-
propriate.
‘‘(5) Local or regional needs should determine
the management structure and staffing of the Manu-
facturing Outreach Centers. The Outreach Program
shall strive for geographical balance with the ultimate
goal of access for all United States manufacturers.
‘‘(6) Manufacturing Outreach Centers should
have the capability to deliver outreach services di-
rectly to United States manufacturers, actively work
with, rather than supplant, the private sector, and to
the extent practicable, maximize the exposure of Unit-
ed States manufacturers to demonstrations of modern
technologies in use, including flexible manufacturing
practices.
‘‘(7) The Department of Commerce shall develop
mechanisms for—
‘‘(A) soliciting the perspectives of United
States manufacturers using the services of the
Manufacturing Outreach Centers and Regional
Centers for the Transfer of Manufacturing Tech-
nology; and
‘‘(B) evaluating the effectiveness of the Man-
ufacturing Outreach Centers and Regional Cen-
ters for the Transfer of Manufacturing Tech-
nology.
‘‘(g) PLAN AND REPORTS.—(1) Within 6 months after
the date of enactment of this title, the Secretary, after con-
sultation with the Under Secretary, the Director, the De-
partment of Commerce Technology Advisory Board, and a
cross-section of potential participants in the Outreach Pro-
gram, shall submit an initial plan for the implementation
of this title to Congress—
‘‘(A) describing how the Secretary will carry out
the responsibility to create, operate, and support the
Outreach Program and the outreach network, includ-
ing the interactive electronic linkage of Manufactur-
ing Outreach Centers to the programs of the Tech-
nology Administration and other appropriate Fed-
eral, State, and local agencies;
‘‘(B) establishing criteria and procedures, con-
sistent with the requirements of this title, for—
‘‘(i) the selection of organizations to receive
Department of Commerce services or financial
assistance as part of the Outreach Program, in-
cluding qualifications and training of technology
extension agents;
‘‘(ii) access to services provided by partici-
pants in the Outreach Program and to informa-
tion available through the outreach network serv-
icing the Outreach Program; and
‘‘(iii) the annual evaluation of the Outreach
Program in achieving the purposes of this title;
and
‘‘(C) evaluating the need for and the benefits of
a National Conference of States on Technology Exten-
sion, similar in structure to the National Conference
on Weights and Measures, and, if the Secretary deter-
mines that such a Conference is advisable, developing,
in consultation with the States and other interested
parties, a plan for the establishment, operation, fund-
ing, and evaluation of such a Conference.
‘‘(2) Within 1 year after the date of enactment of this
title, the Secretary, in consultation with the Under Sec-
retary, the Director, and the Department of Commerce
Technology Advisory Board, shall prepare and submit to
the Congress a 5-year plan for implementing the Outreach
Program and the outreach network and clearinghouse estab-
lished under subsections (d) and (e), respectively. Such 5-
year plan shall identify appropriate methods for expanding
the Outreach Program in a geographically balanced man-
ner. Such 5-year plan shall include a detailed implementa-
tion plan and cost estimates and shall take into consider-
ation and build on the report submitted under paragraph
(1).
‘‘(3) Beginning with first year after submission of the
5-year plan under paragraph (2), the Secretary shall annu-
ally report to the Congress, at the time of the President’s
annual budget request to Congress, on—
‘‘(A) progress made in achieving the purposes of
the Outreach Program described in subsection (a)
using criteria and procedures established under sub-
section (g)(1)(B)(iii);
‘‘(B) changes proposed to the 5-year plan;
‘‘(C) performance in adhering to schedules; and
‘‘(D) 
any 
recommendations 
for 
legislative
changes necessary to enhance the Outreach Program.
The report under this paragraph submitted at the end of
the fourth year of operation of the Outreach Program shall
include recommendations on whether to terminate the Out-
reach Program or extend it for an additional period not
to exceed 5 years.’’.
SEC. 205. ADVANCED MANUFACTURING TECHNOLOGY DE-
VELOPMENT PROGRAM.
Title III of the Stevenson-Wydler Technology Innova-
tion Act of 1980, as added by sections 202, 203, and 204
of this Act, is further amended by adding at the end the
following new section:
‘‘SEC. 304. ADVANCED MANUFACTURING TECHNOLOGY DE-
VELOPMENT PROGRAM.
‘‘(a) ESTABLISHMENT.—The Secretary, through the
Under Secretary and the Director, shall establish an Ad-
vanced Manufacturing Technology Development Program
which shall include projects to develop advanced manufac-
turing systems, networks, and electronic data exchange.
‘‘(b) PURPOSE.—The purpose of the Advanced Manu-
facturing Technology Development Program is to create col-
laborative multiyear technology development programs in-
volving United States companies and, as appropriate, co-
operating with other Federal agencies and laboratories, the
States, worker organizations, universities and colleges,
independent research organizations, and other interested
persons, in order to develop, refine, test, and transfer design
and manufacturing technologies and associated applica-
tions, including advanced computer integration and elec-
tronic networks for manufacturing information exchange.
‘‘(c) PROGRAM COMPONENTS.—The Advanced Manu-
facturing Technology Development Program shall include—
‘‘(1) the advanced manufacturing research and
development activities at the Institute; and
‘‘(2) one or more technology development testbeds
within the United States, selected in accordance with
procedures, including cost sharing, established for the
Advanced Technology Program established under sec-
tion 28 of the National Institute of Standards and
Technology Act (15 U.S.C. 278n), whose purpose shall
be to develop, refine, and test advanced manufactur-
ing, data exchange, and networking technologies and
associated applications and to facilitate the transfer
of such technologies and applications to United States
manufacturers.
‘‘(d) FUNCTIONS
AND ACTIVITIES.—The Advanced
Manufacturing Technology Development Program, under
the coordination of the Secretary, through the Director,
shall—
‘‘(1) test and, as appropriate, facilitate and sup-
port the development of the equipment, computer soft-
ware, and systems integration necessary for the suc-
cessful operation within the United States of ad-
vanced design and manufacturing systems and associ-
ated electronic networks;
‘‘(2) establish at the Institute and the technology
development testbed or testbeds—
‘‘(A) prototype advanced computer-inte-
grated manufacturing systems;
‘‘(B) prototype electronic networks linking
manufacturing systems; and
‘‘(C) prototype clean manufacturing sys-
tems;
‘‘(3) assist United States companies to develop
voluntary consensus standards relevant to advanced
computer-integrated manufacturing operations, in-
cluding standards for networks, electronic data inter-
change, and digital product data specifications;
‘‘(4) help to make high-performance computing
and networking technologies an integral part of de-
sign and production processes where appropriate;
‘‘(5) conduct research to identify and overcome
technical barriers to the successful and cost-effective
operation of advanced manufacturing systems and
networks and to promote and facilitate electronic data
exchange;
‘‘(6) facilitate the efforts of United States compa-
nies to develop and test new applications for manu-
facturing systems, networks, and information ex-
change;
‘‘(7) involve in the Advanced Manufacturing
Technology Development Program, to the maximum
extent practicable, both those United States manufac-
turers which make manufacturing technology and re-
lated computer equipment and software, and United
States companies which buy such technology, equip-
ment and software;
‘‘(8) identify training needs, as appropriate, for
managers, engineers, and employees of United States
manufacturers in the operation and applications of
advanced manufacturing technologies and networks,
with particular emphasis on training for production
workers in the effective use of advanced manufactur-
ing technology;
‘‘(9) work with United States companies, univer-
sities, independent research organizations, and other
interested parties to develop standards, tools, and
techniques for the use of advanced computer-based
training systems, including multi-media and inter-
active learning technologies;
‘‘(10) involve small businesses in its activities;
‘‘(11) exchange information and personnel, as
appropriate, between the technology development
testbeds and the outreach network created under sec-
tion 303(d); and
‘‘(12) coordinate its activities with the National
High-Performance Computing Program described in
section 101 of the High-Performance Computing Act
of 1991 (15 U.S.C. 5511) to ensure that both pro-
grams are complementary and compatible.
‘‘(e) TESTBED AWARDS.—(1) In selecting applicants
to receive awards under subsection (c)(2) of this section, the
Secretary shall give preferential consideration to applicants
that have existing computer expertise in manufacturing ap-
plications and the ability to diffuse such expertise to United
States companies, and that, in the case of joint research
and development ventures, include both suppliers and users
of advanced manufacturing technology. In the case of sys-
tems described in subsection (d)(2)(C), the Secretary shall
also give preferential consideration to applicants that have
existing program expertise in clean manufacturing, includ-
ing the areas of concurrent engineering, materials research,
and environmental science, and which have a technology
transfer mechanism in place to transfer testbed results of
a clean manufacturing program to industry participants.
‘‘(2) An industry-led joint research and development
venture applying for an award under subsection (c)(2) of
this section may include one or more State research organi-
zations, universities, Federal laboratories, independent re-
search organizations, or Regional Centers for the Transfer
of Manufacturing Technology (as created under section 25
of the National Institute of Standards and Technology Act)
and other organizations as the Secretary considers appro-
priate.
‘‘(f) ADVICE AND ASSISTANCE.—(1) Within 6 months
after the date of enactment of this title, and before any re-
quest for proposals is issued, the Secretary shall hold one
or more workshops to solicit advice from United States com-
panies and from other Federal agencies, particularly the
Department of Defense, regarding the specific missions and
activities of the testbeds.
‘‘(2) The Secretary shall, to the greatest extent possible,
coordinate activities under this section with activities of
other Federal agencies and initiatives relating to computer-
aided acquisition and logistics support, electronic data
interchange, flexible computer-integrated manufacturing,
and enterprise integration.
‘‘(3) The Secretary may request and accept funds, fa-
cilities, equipment, or personnel from other Federal agencies
in order to carry out this section.
‘‘(g) ANTITRUST SAVINGS CLAUSE.—This section shall
not be construed to modify, impair, or supersede the oper-
ation of the antitrust laws. For purposes of this subsection,
the term ‘antitrust laws’ has the meaning given it in sub-
section (a) of the first section of the Clayton Act (15 U.S.C.
12(a)), except that such term includes the Act of June 19,
1936 (49 Stat. 1526; 15 U.S.C. 13 et seq.), commonly
known as the Robinson Patman Act, and section 5 of the
Federal Trade Commission Act (15 U.S.C. 45) to the extent
that such section 5 applies to unfair methods of competi-
tion.’’.
SEC. 206. MISCELLANEOUS AND CONFORMING AMEND-
MENTS.
(a) DEFINITIONS.—Section 4 of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.C. 3703) is
amended by adding at the end the following new para-
graphs:
‘‘(14) ‘Director’ means the Director of the Na-
tional Institute of Standards and Technology.
‘‘(15) ‘Institute’ means the National Institute of
Standards and Technology.
‘‘(16) ‘Assistant Secretary’ means the Assistant
Secretary of Commerce for Technology Policy.
‘‘(17) 
‘Advanced 
manufacturing 
technology’
means—
‘‘(A) numerically-controlled machine tools,
robots, automated process control equipment,
computerized flexible manufacturing systems, as-
sociated computer software, and other technology
for improving manufacturing and industrial
production of goods, including biotechnology
products, which advance the state-of-the-art; or
‘‘(B) novel manufacturing techniques and
processes not previously generally available that
improve manufacturing quality, productivity,
and practices, including engineering design,
quality assurance, concurrent engineering, con-
tinuous process production technology, inventory
management, upgraded worker skills, commu-
nications with customers and suppliers, and pro-
motion of sustainable economic growth.
‘‘(18) ‘Modern technology’ means the best avail-
able proven technology, techniques, and processes ap-
propriate to enhancing the productivity of manufac-
turers or to promoting sustainable economic growth.
‘‘(19) ‘Sustainable economic growth’ means eco-
nomic growth that enhances the national quality of
life and preserves environmental integrity.
‘‘(20) ‘United States company’ means a com-
pany described in section 28(d)(9)(B) of the National
Institute of Standards and Technology Act (15 U.S.C.
278n(d)(9)(B)).
‘‘(21) ‘United States manufacturer’ means a
company described in section 28(d)(9) of the National
Institute of Standards and Technology Act (15 U.S.C.
278n(d)(9)) that is engaged in manufacturing activi-
ties. The Secretary, in applying subparagraph (A) of
such section 28(d)(9) for purposes of this Act, may
make a finding under that subparagraph based on
certification by the company.
‘‘(22) ‘Benchmarking’ means the assessment of
foreign science and technology capabilities relative to
comparable United States capabilities.
‘‘(23) 
‘Independent 
research 
organizations’
means nonprofit organizations organized primarily
for the purpose of conducting or managing research
activities.’’.
(b) REDESIGNATIONS.—The Stevenson-Wydler Tech-
nology Innovation Act of 1980 (15 U.S.C. 3701 et seq.) is
amended—
(1) by inserting immediately after section 4 the
following new title heading:
‘‘TITLE I—DEPARTMENT OF COM-
MERCE AND RELATED PRO-
GRAMS’’;
(2) by redesignating sections 5 through 10 as sec-
tions 101 through 106, respectively;
(3) by redesignating sections 16 through 22, as
sections 107 through 113, respectively;
(4) by inserting immediately after section 113
(as redesignated by paragraph (3) of this subsection)
the following new title heading:
‘‘TITLE II—FEDERAL
TECHNOLOGY TRANSFER’’;
(5) by redesignating sections 11 through 15 as
sections 201 through 205, respectively;
(6) by redesignating section 23 as section 206;
(7) in section 4—
(A) by striking ‘‘section 5’’ each place it ap-
pears and inserting in lieu thereof ‘‘section 101’’;
(B) in paragraphs (4) and (6), by striking
‘‘section 6’’ and ‘‘section 8’’ each place they ap-
pear and inserting in lieu thereof ‘‘section 102’’
and ‘‘section 104’’, respectively; and
(C) in paragraph (13), by striking ‘‘section
6’’ and inserting in lieu thereof ‘‘section 102’’;
(8) in section 105 (as redesignated by paragraph
(2) of this subsection) by striking ‘‘section 6’’ each
place it appears and inserting in lieu thereof ‘‘section
102’’;
(9) in section 106(d) (as redesignated by para-
graph (2) of this subsection) by striking ‘‘7, 9, 11, 15,
17, or 20’’ and inserting in lieu thereof ‘‘103, 105,
108, 111, 201, or 205’’;
(10) in section 201(i) (as redesignated by para-
graph (5) of this subsection) by inserting ‘‘loan, lease,
or’’ after ‘‘may’’; and by inserting ‘‘Actions taken
under this subsection shall not be subject to Federal
requirements on the disposal of property.’’ after
‘‘activities.’’;
(11) in section 202(b) (as redesignated by para-
graph (5) of this subsection) by striking ‘‘section 14’’
and inserting in lieu thereof ‘‘section 204’’;
(12) in section 204(a)(1) (as redesignated by
paragraph (5) of this subsection) by striking ‘‘section
12’’ and inserting in lieu thereof ‘‘section 202’’;
(13) in section 113 (as redesignated by para-
graph (3) of this subsection) by striking ‘‘sections 11,
12, and 13’’ and inserting in lieu thereof ‘‘sections
201, 202, and 203’’;
(14) in section 206 (as redesignated by para-
graph (6) of this subsection)—
(A) by striking ‘‘section 11(b)’’ in sub-
section (a)(2) and inserting in lieu thereof ‘‘sec-
tion 201(b)’’; and
(B) by striking ‘‘section 6(d)’’ in subsection
(b) and inserting in lieu thereof ‘‘section
102(d)’’; and
(15) by adding at the end of section 201 (as re-
designated by paragraph (5) of this subsection) the
following new subsection:
‘‘(j) ADDITIONAL TECHNOLOGY TRANSFER MECHA-
NISMS.—In addition to the technology transfer mechanisms
set forth in this section and section 202 of this Act, the
heads of Federal departments and agencies also may trans-
fer technologies through the technology transfer and exten-
sion programs of the Department of Commerce and the
Department of Defense.’’.
SEC. 207. MANUFACTURING TECHNOLOGY CENTERS.
Section 25 of the National Institute of Standards and
Technology Act (15 U.S.C. 278k), is amended—
(1) by amending the section heading to read as
follows: ‘‘MANUFACTURING TECHNOLOGY CENTERS’’;
(2) in subsection (c)(5), by striking ‘‘which are
designed’’ and all that follows through ‘‘operation of
a Center’’ and inserting in lieu thereof ‘‘to a maxi-
mum of one-third Federal funding. Each Center
which receives financial assistance under this section
shall be evaluated during its sixth year of operation,
and at such subsequent times as the Secretary consid-
ers appropriate, by an evaluation panel appointed by
the Secretary in the same manner as was the evalua-
tion panel previously appointed. The Secretary shall
not provide funding for additional years of the Cen-
ter’s operation unless the evaluation is positive and
the Secretary finds that continuation of funding fur-
thers the goals of the Department. Such additional
Federal funding shall not exceed one-third of the cost
of the Center’s operations’’;
(3) by striking subsection (d); and
(4) by adding at the end the following new sub-
sections:
‘‘(d) If a Center receives a positive evaluation during
its third year of operation, the Director may, any time after
that evaluation, contract with the Center to provide addi-
tional technology extension or transfer services above and
beyond the baseline activities of the Center. Such additional
services may include, but are not limited to, the develop-
ment and operation of the following:
‘‘(1) Programs to assist United States companies
that are engaged in manufacturing and their employ-
ees, including front-line production workers, in the
Center’s region to learn and apply the technologies,
techniques, and processes associated with systems
management technology, electronic data exchange, or
improving manufacturing productivity.
‘‘(2) Services focused on the testing, development,
and application of manufacturing and process tech-
nologies within specific technical fields such as ad-
vanced materials or electronics fabrication for the
purpose of assisting United States companies that are
engaged in manufacturing, both within the Center’s
original service region and in other regions, to im-
prove 
manufacturing 
quality, 
product 
design,
workforce training, and production efficiency in those
specific technical fields.
‘‘(3) Industry-led demonstration programs that
involve United States manufacturing technology con-
sortia to provide ongoing research, technology trans-
fer, and worker training assistance to their members.
An award under this paragraph shall be for no more
than $500,000 per year, and shall be subject to re-
newal after a 1-year demonstration period.
‘‘(e) In addition to any assistance provided or con-
tracts entered into with a Center under this section, the Di-
rector is authorized to make separate and smaller awards,
through a competitive process, to nonprofit organizations
which wish to work with a Center. Such awards shall be
for the purpose of enabling those organizations to provide
outreach services, in collaboration with the Center, to Unit-
ed States manufacturers located in parts of the region
served by the Center which are not easily accessible to the
Center and which are not served by any other manufactur-
ing outreach center. Organizations which receive such
awards shall be known as Local Manufacturing Offices. In
reviewing applications, the Director shall consider the needs
of rural as well as urban manufacturers. No single award
for a Local Manufacturing Office shall be for more than
three years, awards shall be renewable through the competi-
tive awards process, and no award shall be made unless
the applicant provides matching funds at least equal to the
amount received under this section.
‘‘(f) In carrying out this section, the Director shall co-
ordinate his efforts with the plans for the National Tech-
nology Outreach Program established under section 303 of
the Stevenson-Wydler Technology Innovation Act of 1980.’’.
SEC. 208. STATE TECHNOLOGY EXTENSION PROGRAM.
(a) ESTABLISHMENT.—Section 26(a) of the National
Institute of Standards and Technology Act (15 U.S.C.
278l(a)), is amended—
(1) by inserting immediately after ‘‘(a)’’ the fol-
lowing new sentence: ‘‘There is established within the
Institute a State Technology Extension Program.’’;
and
(2) by inserting ‘‘through that Program’’ imme-
diately after ‘‘technical assistance’’.
(b) ADDITIONAL AUTHORITIES.—Section 26 of the Na-
tional Institute of Standards and Technology Act (15
U.S.C. 278l) is amended by adding at the end the following
new subsection:
‘‘(c) In addition to the general authorities listed in
subsection (b) of this section, the State Technology Exten-
sion Program also may, through merit-based competitive re-
view processes—
‘‘(1) make awards to States and conduct work-
shops, pursuant to section 5121(b) of the Omnibus
Trade and Competitiveness Act of 1988, in order to
help States improve their planning and coordination
of technology extension activities;
‘‘(2) support technology demonstration projects
to help States provide technical assistance and serv-
ices to United States manufacturers that will improve
their productivity and competitiveness;
‘‘(3) support State efforts to develop and test in-
novative ways to help United States manufacturers
improve their technical capabilities;
‘‘(4) support State efforts designed to help Unit-
ed States manufacturers in rural as well as urban
areas adopt modern manufacturing technologies;
‘‘(5) support State efforts to assist interested
United States manufacturers in the defense industry
to adapt to modern or advanced manufacturing tech-
nologies as they convert to nondefense or dual-use
purposes;
‘‘(6) support worker technology education pro-
grams in the States at institutions such as research
universities, community colleges, labor education cen-
ters, labor-management committees, and worker orga-
nizations in production technologies critical to the
Nation’s future, with an emphasis on high-perform-
ance work systems, the skills necessary to use modern
or advanced manufacturing systems well;
‘‘(7) help States develop programs to train per-
sonnel who in turn can provide technical skills to
managers and workers of United States manufactur-
ers; and
‘‘(8) support State efforts to assist United States
manufacturers to develop on-the-job training in mod-
ern and advanced manufacturing technologies, tech-
niques, and processes and to promote the development
and adoption of modern and advanced manufacturing
technologies.’’.
Subtitle B—National Science Foun-
dation Manufacturing Programs
SEC. 211. ROLE OF THE NATIONAL SCIENCE FOUNDATION
IN MANUFACTURING.
The Director of the National Science Foundation, after
appropriate consultation with the Secretary, the Under Sec-
retary, and the Director, shall—
(1) work with United States companies to iden-
tify areas of research in advanced manufacturing
technologies and practices that offer the potential to
improve United States productivity, competitiveness,
employment, and sustainable economic growth;
(2) support research at United States univer-
sities to improve advanced manufacturing tech-
nologies and practices; and
(3) work with the Technology Administration
and the Institute and, as appropriate, other Federal
agencies to accelerate the transfer to United States
companies of manufacturing research and innova-
tions developed at universities.
SEC. 212. ENGINEERING AND COOPERATIVE RESEARCH
CENTERS.
The Director of the National Science Foundation shall
strengthen and expand the number of Engineering Research
Centers and strengthen and expand the Industry/University
Cooperative Research Centers Program with the goal of in-
creasing the engineering talent base versed in critical tech-
nologies, with emphasis on advanced manufacturing tech-
nology and practices, and of advancing fundamental engi-
neering knowledge in these technologies, including bio-
technology. At least one Engineering Research Center shall
have a research and education focus on the concerns of
United States manufacturers, including small businesses
that are trying to modernize their operations. Awards
under this section shall be made on a competitive, merit
review basis and on terms and conditions the Director may
prescribe to ensure that the purposes for which the award
is made are satisfied. Such awards may include support
for acquisition of instrumentation, equipment, and facili-
ties related to the research and education activities of the
Centers and support for undergraduate students to partici-
pate in the activities of the Centers.
SEC. 213. MANUFACTURING TRAINEESHIPS AND FELLOW-
SHIPS.
(a) GRADUATE TRAINEESHIPS.—The Director of the
National Science Foundation, in consultation with the Sec-
retary, may establish a program to provide traineeships to
graduate students at institutions of higher education within
the United States who are citizens of the United States and
who choose to pursue masters or doctoral degrees in manu-
facturing engineering. The Director of the National Science
Foundation shall make an effort to ensure the provision of
traineeships under this subsection to socially and economi-
cally disadvantaged individuals (within the meaning of sec-
tion 8(a) (5) and (6) of the Small Business Act, and includ-
ing women).
(b) MANUFACTURING MANAGERS IN THE CLASSROOM
PROGRAM.—The Director of the National Science Founda-
tion, in consultation with the Secretary, may establish a
program to provide fellowships, on a cost-shared basis, to
employees of United States companies with experience in
manufacturing to serve for 1 or 2 years as instructors in
manufacturing at 2-year community and technical colleges
in the United States.
SEC. 214. TOTAL QUALITY MANAGEMENT.
The Director of the National Science Foundation, in
consultation with the Secretary, the Under Secretary, and
the Director, may establish a program to develop innovative
curricula, courses, and materials for use by institutions of
higher education for instruction in total quality manage-
ment and related management practices, in order to help
improve the productivity of United States companies.
TITLE III—CRITICAL
TECHNOLOGIES
Subtitle A—Benchmarking Science
and Technology
SEC. 301. BENCHMARKING UNITED STATES SCIENCE AND
TECHNOLOGY AGAINST FOREIGN CAPABILI-
TIES.
The Stevenson-Wydler Technology Innovation Act of
1980, as amended by this Act, is further amended by adding
at the end the following new title:
‘‘TITLE IV—BENCHMARKING
SCIENCE AND TECHNOLOGY
‘‘SEC. 401. FINDINGS AND PURPOSES.
‘‘(a) FINDINGS.—As other countries have gained
strength in new technologies and as centers of technical ex-
cellence have developed around the world, it has become in-
creasingly important for United States companies and re-
search organizations to understand their scientific and tech-
nological capabilities relative to those of other global com-
petitors.
‘‘(b) PURPOSES.—The purposes of this title are to con-
duct and coordinate the collection, evaluation, and dissemi-
nation, to United States companies, State and local govern-
ments, and nonprofit organizations, of information on for-
eign science and technology, specifically information assess-
ing foreign capabilities relative to comparable United
States capabilities.
‘‘SEC. 402. PROGRAM RESPONSIBILITIES.
‘‘(a) DEPARTMENT OF COMMERCE.—The Department
of Commerce shall be the lead agency of the Federal Govern-
ment in making available information for assessing the
comparative strength of United States scientific and techno-
logical capabilities. The Secretary, acting through the
Under Secretary, shall—
‘‘(1) collect within the Federal Government and
disseminate to United States companies, State and
local governments, and nonprofit organizations infor-
mation regarding foreign process and product re-
search and technologies of importance to United
States companies and the Federal Government, and
regarding related technology assessment activities al-
ready underway in the Federal Government;
‘‘(2) provide such information and analyses in
electronic form, and ensure, consistent with confiden-
tiality and security considerations, that they will be
available through the clearinghouse to the outreach
network created under section 303 of this Act;
‘‘(3) work, in coordination with the Federal Co-
ordinating Council for Science, Engineering, and
Technology, as appropriate, to streamline Federal
Government procedures for collecting, evaluating, and
disseminating information analyzing foreign sci-
entific and technological information; and
‘‘(4) conduct appropriate planning for more
comprehensive collection, evaluation, dissemination,
and application of foreign science and technology in-
formation.
‘‘(b) OTHER AGENCIES.—All executive departments
and agencies shall assist the Secretary in carrying out this
title.
‘‘(c) ADDITIONAL AUTHORITIES.—The Secretary, act-
ing through the Under Secretary, is authorized to—
‘‘(1) arrange for access to information collected
and developed under this title, in electronic form or
otherwise, by authorized and interested parties, in-
cluding charging and retaining fees;
‘‘(2) provide for the collection of additional in-
formation to fulfill the purposes of this title;
‘‘(3) provide for analysis of foreign research and
development activities and technological capabilities,
particularly in those areas where the United States is
considered to be at par or lagging foreign capabilities
or where foreign capabilities are projected to overtake
those of the United States;
‘‘(4) enter into joint ventures authorized under
section 212(a)(1)(A) of Public Law 100–519 (15
U.S.C. 3704b(a)(1)(a)) in carrying out this title;
‘‘(5) consult with users of such information, as
appropriate, on the usefulness of available foreign sci-
entific and technological information and on the need
for additional information and assessment activities
and consult with other affected agencies of the Federal
Government to promote consistent and useful collec-
tion, assessment, and analysis of foreign technological
information; and
‘‘(6) establish and administer the fellowship pro-
gram described in subsection (d).
‘‘(d) FELLOWSHIP PROGRAM.—(1) The Secretary, act-
ing through the Under Secretary, shall establish and ad-
minister a fellowship program to support Technology Fel-
lows to assist the Under Secretary in carrying out activities
under this title relating to those countries that are major
competitors of the United States in critical technologies,
and to identify opportunities for technology transfer to the
United States or technological collaboration for United
States industries.
‘‘(2) Technology Fellows shall—
‘‘(A) regularly report to the Department of Com-
merce on work planned, in progress, and accom-
plished; and
‘‘(B) provide support to the Department of Com-
merce as requested by that Department.
‘‘(3) Fellowships awarded under the program estab-
lished under this subsection shall—
‘‘(A) be awarded for a period of 2 years;
‘‘(B) be reasonable and appropriate; and
‘‘(C) include provisions for living and office ar-
rangements in the host country.
‘‘(4) Only individuals who—
‘‘(A) have at least a bachelors degree in engineer-
ing or science; and
‘‘(B) have at least 5 years of work experience in
manufacturing or technology development,
shall be eligible for a fellowship under this program.’’.
Subtitle B—Advanced Technology
Program
SEC. 321. DEVELOPMENT OF PROGRAM PLAN.
The Secretary, acting through the Under Secretary
and the Director, shall, within 6 months after the date of
enactment of this Act, submit to the Congress a plan for
the expansion of the Advanced Technology Program estab-
lished under section 28 of the National Institute of Stand-
ards and Technology Act (15 U.S.C. 278n), with specific
consideration given to—
(1) closer coordination and cooperation with the
Advanced Research Projects Agency and other Federal
research and development agencies, including joint
funding of large scale consortia, as appropriate;
(2) broadening of the scope of the program to in-
clude and focus on as many critical technologies iden-
tified pursuant to section 603(d) of the National
Science and Technology Policy, Organization, and
Priorities Act of 1976 (42 U.S.C. 6683(d)) as is ap-
propriate; and
(3) changes that may be needed when annual
funds available for awards and cooperative agree-
ments under the Program reach levels of $200,000,000
and $500,000,000.
SEC. 322. LARGE SCALE RESEARCH AND DEVELOPMENT
CONSORTIA.
(a) ESTABLISHMENT OF PROGRAM.—The Secretary,
acting through the Director, shall establish a program for
the support of large-scale research and development
consortia.
(b) SELECTION PROCEDURES AND REQUIREMENTS.—
(1) GENERAL
RULE.—Except as provided in
paragraph (2), the selection and making of awards to
large-scale research and development consortia under
this section shall be carried out in accordance with
procedures and requirements applicable to joint ven-
tures described in section 28(b)(1) of the National In-
stitute of Standards and Technology Act (15 U.S.C.
278n(b)(1)).
(2) 
EXCEPTION.—Notwithstanding 
section
28(b)(1)(B)(ii) of the National Institute of Standards
and Technology Act (15 U.S.C. 278n(b)(1)(B)(ii)), for
purposes of awards made under this section, a minor-
ity share of the cost of large-scale research and devel-
opment consortia may be provided by the Federal
Government for up to 7 years.
(c) PROJECT SELECTION.—Preference shall be given
for selection under this section to large-scale research and
development consortia that would not be undertaken by the
private sector without a Federal investment of $50,000,000
or more per year.
(d) SELECTION CRITERIA.—In selecting large-scale re-
search and development consortia under this section, the
Secretary, acting through the Director, shall give priority
to consortia that best achieve the following goals:
(1) Significant contribution to broad economic
growth.
(2) Significant contribution to the national
quality of life.
(3) Significant contribution to environmental
sustainability.
(4) Promotion of private sector partnership with
Federal research and development activities.
(5) Substantial improvement of the international
competitiveness of United States companies.
(6) Involvement of several competitor firms in
the development of the key consortia technologies.
(7) Strengthening of the linkages between domes-
tic suppliers, systems developers, and end-users.
(8) Participation by domestic end-users from
several industrial sectors.
(9) Promotion of the diffusion of nonproprietary
information to United States companies through
strong links with organizations such as trade and
professional groups.
(e) INDEPENDENT TECHNICAL REVIEW.—The Sec-
retary, through the Director, shall provide for technical re-
view at least once every three years of large-scale research
and development consortia receiving support under this sec-
tion, by the National Institute of Standards and Tech-
nology, other national laboratories, the Department of Com-
merce Technology Advisory Board established under section
401 of this Act, or independent research organizations that
are not a participant in the large-scale research and devel-
opment consortium being reviewed. Such review shall be for
the purpose of determining progress toward the objectives
for which such large-scale research and development consor-
tium was formed, with recommendations for improvement,
funding adjustments, or termination of Federal support.
The Secretary, through the Director, shall transmit to the
Committee on Science, Space, and Technology of the House
of Representatives and the Committee on Commerce,
Science, and Transportation of the Senate an annual status
report summarizing significant accomplishments in achiev-
ing those objectives.
(f) DEFINITION.—For purposes of this section, the term
‘‘large-scale research and development consortia’’ means a
joint venture described in section 28(b)(1) of the National
Institute of Standards and Technology Act (15 U.S.C.
278n(b)(1)).
SEC. 323. TECHNICAL AMENDMENTS.
Section 28 of the National Institute of Standards and
Technology Act (15 U.S.C. 278n) is amended—
(1) by adding at the end the following new subsection:
‘‘(k) Notwithstanding subsections (b)(1)(B)(ii) and
(d)(3), the Director may grant an extension of not to exceed
6 months beyond the deadlines established under those sub-
sections for joint venture and single applicant awardees to
expend Federal funds to complete their projects, if such ex-
tension may be granted with no additional cost to the
Federal Government.’’;
(2) in subsection (b)(2), by inserting ‘‘, and with
independent research organizations’’ after ‘‘especially
small businesses’’; and
(3) in subsection (j)—
(A) by redesignating paragraphs (1) and
(2) as paragraphs (2) and (3), respectively; and
(B) by inserting before paragraph (2), as so
redesignated, the following new paragraph:
‘‘(1) the term ‘independent research organiza-
tions’ means nonprofit organizations organized pri-
marily for the purpose of conducting or managing re-
search activities;’’.
Subtitle C—Civilian Technology
Loan Program
SEC. 331. LOAN AND LOAN GUARANTEE AUTHORITY.
To the extent provided in appropriation Acts, the Sec-
retary, acting through the Under Secretary, may make, or
enter into agreements to make, loans and loan guarantees,
either directly or in cooperation with other lenders, to small
and medium-sized qualified business concerns in accord-
ance with this subtitle.
SEC. 332. OPERATING PLAN AND EFFECTIVE DATE.
(a) OPERATING PLAN.—The Secretary, acting through
the Under Secretary, shall prepare (in consultation with
the Advisory Committee established under section 344, other
appropriate executive agencies, the States, United States
companies, the financial community, and other appropriate
parties) and submit to the Congress on or before November
1, 1993, an operating plan to carry out this subtitle. In
preparing such plan, the Secretary shall consider and
evaluate alternative approaches to achieving the purposes
of this subtitle and shall develop recommendations, as ap-
propriate, to fulfill the purposes of this subtitle in the most
effective and efficient manner achievable. Such evaluations
and recommendations shall be included in the plan submit-
ted under this subsection.
(b) EFFECTIVE DATE.—Except as provided in sub-
section (a), the provisions of this subtitle shall take effect
on October 1, 1994.
SEC. 333. TERMS AND CONDITIONS.
Loans and loan guarantees made under section 331
shall be in such form and manner and under such terms
and conditions as the Under Secretary may prescribe by
regulation, and shall be subject to the following terms and
conditions:
(1) Loans awarded or guaranteed shall be for
sound financing of research, development, demonstra-
tion, or utilization of critical technologies or ad-
vanced technologies.
(2) Loans shall only be awarded or guaranteed
if the Under Secretary finds that—
(A) sufficient collateral, which may include
both tangible and intangible assets, is pledged; or
(B) the borrower is sufficiently financially
sound,
to reasonably ensure repayment.
(3) Loans awarded or guaranteed may not ex-
ceed 50 percent of total eligible project costs. For pur-
poses of this section, the term ‘‘eligible project costs’’
shall be defined by the Under Secretary by regulation.
(4) The total principal amount of outstanding
loans awarded or guaranteed to a single borrower
may not exceed $2,000,000 at any time.
(5) Loans awarded or guaranteed shall be senior
to any other debt obligations of the borrower, except
to the extent that the Under Secretary considers nec-
essary to accommodate the borrower’s ability to raise
sufficient debt or equity capital from non-Federal
sources to pay the balance of eligible project costs that
are not covered by such loans.
(6) Interest on a loan, or portion of a loan,
awarded or guaranteed by the Federal Government
under this subtitle shall be at a rate determined by
the Secretary of the Treasury, at the time such loan
is made, to equal the then current average market
yield on outstanding debt obligations of the United
States with remaining periods to maturity com-
parable to the maturity of such loan, plus an addi-
tional charge of up to 1 percent applied by the Under
Secretary to cover expected defaults and reasonable
administrative costs of carrying out this subtitle. For
purposes of this section, the term ‘‘default’’ shall be
defined by the Under Secretary by regulation.
(7) Except as provided in paragraph (8), the
maturity of loans awarded or guaranteed under this
subtitle may not be less than 2 years or greater
than—
(A) 10 years; or
(B) the useful life of property, plant, equip-
ment, or other assets, as determined by the Sec-
retary of the Treasury, which have been pledged
as collateral for such loan,
whichever is greater.
(8) The Under Secretary may extend the matu-
rity of or renew a loan or extend the guarantee of a
loan for additional periods, not to exceed 5 years,
only if such extension or renewal will aid in the or-
derly liquidation of such loan.
(9) Payment of interest on direct loans made by
the Federal Government under this subtitle may be
deferred by the borrower, upon approval by the Under
Secretary, only to the extent that the borrower has es-
tablished to the satisfaction of the Under Secretary
that the borrower has not realized sufficient earnings
and returns of capital to make such payment without
incurring undue financial hardship, and that there is
a reasonable prospect that such loan and interest
thereon will be repaid.
(10) The Under Secretary may guarantee pay-
ment of 100 percent of principal and interest on a
loan made under section 331.
(11) The Under Secretary may establish, charge,
and regulate fees to cover loan origination and servic-
ing costs that are reasonable and necessary.
SEC. 334. TECHNICAL ASSISTANCE FOR LENDERS AND BOR-
ROWERS.
The Secretary, acting through the Under Secretary,
shall, upon request, provide technical assistance and serv-
ices, as appropriate and needed, to lenders and borrowers
under this subtitle, and shall ensure that such lenders and
borrowers have ready access to appropriate assistance avail-
able under title III of the Stevenson-Wydler Technology In-
novation Act of 1980, or under any other Act, in order to
aid such lenders and borrowers in achieving the purposes
described in section 333(1). The Secretary may charge fees
for technical assistance and services provided under this
section in amounts sufficient to cover the reasonable cost
of such assistance and services. The Secretary may waive
such fees on a case-by-case basis. Fees paid to the United
States under this section shall be deposited in an account
established by the Under Secretary and shall be available
solely for carrying out this subtitle, to the extent provided
in advance in appropriations Acts.
SEC. 
335. 
OUTREACH 
TO 
ECONOMICALLY 
DEPRESSED
AREAS.
The Secretary, acting through the Under Secretary,
shall seek to ensure that qualified business concerns located
in areas determined by the Secretary to have a depressed
economy, or a significant concentration of defense-related
industries, or chronically high unemployment, are notified
of the availability of financial assistance through the pro-
gram established under this subtitle and, to the extent prac-
ticable, to encourage and facilitate the participation of such
qualified business concerns in such program.
SEC. 336. SOCIALLY AND ECONOMICALLY DISADVANTAGED
INDIVIDUALS.
The Secretary shall, to the fullest extent possible, en-
sure that at least 10 percent of amounts loaned under this
subtitle shall be made available to qualified business con-
cerns owned or controlled by socially and economically dis-
advantaged individuals (within the meaning of section 8(a)
(5) and (6) of the Small Business Act, and including
women).
SEC. 337. DEFINITIONS.
For purposes of this subtitle, the terms ‘‘advanced tech-
nologies’’, ‘‘critical technologies’’, and ‘‘qualified business
concern’’ have the meaning given such terms in section 342
of this Act.
Subtitle D—Civilian Technology
Development Program
SEC. 341. SHORT TITLE.
This subtitle may be cited as the ‘‘Civilian Technology
Development Act of 1993’’.
SEC. 342. DEFINITIONS.
For purposes of this subtitle—
(1) the term ‘‘advanced technologies’’ means tech-
nologies eligible for assistance under the Advanced
Technology Program established under section 28 of
the National Institute of Standards and Technology
Act (15 U.S.C. 278n);
(2) the term ‘‘articles’’ means articles of incorpo-
ration for an incorporated body, and the functional
equivalent, or other similar documents specified by
the Under Secretary, for other business entities;
(3) the term ‘‘critical technologies’’ means tech-
nologies identified as critical technologies pursuant to
section 603(d) of the National Science and Technology
Policy, Organization, and Priorities Act of 1976 (42
U.S.C. 6683(d));
(4) the term ‘‘Department’’ means the Depart-
ment of Commerce;
(5) the term ‘‘executive agency’’ has the meaning
given such term in section 105 of title 5, United
States Code;
(6) the term ‘‘license’’ means a license issued by
the Under Secretary under section 345;
(7) the term ‘‘licensee’’ means a company li-
censed under section 345;
(8) the term ‘‘preferred securities’’ means pre-
ferred stock or a preferred limited partnership inter-
est or other similar security, as defined by the Under
Secretary by regulation;
(9) the term ‘‘private equity capital’’ means the
paid-in capital and paid-in surplus, on hand or le-
gally committed to be provided, of a licensee orga-
nized as a corporation, or the partnership capital, on
hand or legally committed to be provided, of a li-
censee organized as an unincorporated partnership,
but does not include any funds—
(A) borrowed by the licensee from any
source;
(B) obtained from the sale of preferred secu-
rities; or
(C) derived directly or indirectly from any
Federal source;
(10) the term ‘‘qualified business concern’’ means
a United States company described in section
28(d)(9)(B) of the National Institute Standards and
Technology Act (15 U.S.C. 278n(d)(9)(B)), if—
(A) the business of such company includes
the pursuit, under the Small Business Innova-
tion Research (SBIR) program, of applications
described in section 9(e)(4)(C) of the Small Busi-
ness Act (15 U.S.C. 638(e)(4)(C));
(B) the principal business of such company
is the development or application of a critical
technology;
(C) such company is eligible for assistance
under the Advanced Technology Program (ATP)
established under section 28 of the National In-
stitute of Standards and Technology Act (15
U.S.C. 278n); or
(D) such company is principally engaged in
the development or exploitation of inventions,
technological improvements, new processes, or
products not previously generally available
(within the meaning of section 851(e)(1) of the
Internal Revenue Code of 1986);
(11) the term ‘‘State’’ means several States, the
District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa,
and the Commonwealth of the Northern Mariana Is-
lands, and any other territory or possession of the
United States;
(12) the term ‘‘State sponsored licensee’’ means
a company licensed under section 345 in which a
State or instrumentality of a State has at least a 25
percent investment interest in the private equity cap-
ital of such licensee;
(13) the term ‘‘university sponsored licensee’’
means a company licensed under section 345 in
which a single university or consortium of univer-
sities has at least a 25 percent investment interest in
the private equity capital of such licensee; and
(14) the term ‘‘venture capital’’ means consider-
ation for such—
(A) common stock;
(B) preferred stock;
(C) debt with equity features which may in-
clude equity warrants or rights to convert into
common stock and which provides for interest
payments contingent upon and limited to the ex-
tent of earnings; or
(D) other financing,
as the Under Secretary determines to be substantially
similar to equity financing, issued by a qualified
business concern.
SEC. 343. ESTABLISHMENT AND PURPOSE.
(a) ESTABLISHMENT.—There is established within the
Technology Administration of the Department of Commerce
a national program to stimulate and supplement the avail-
ability of long-term investment capital for the formation,
development, and growth of qualified business concerns
throughout the United States. The Secretary, through the
Under Secretary, shall, through such program, provide for
the selection, licensing, monitoring, and financial and tech-
nical support of professionally managed technology invest-
ment companies which in turn shall provide financial,
management, and technical assistance to qualified business
concerns, with preference given to satisfying the seed and
early-stage financing needs of such concerns that are not
being met by other sources on reasonable terms.
(b) PURPOSES.—The purposes of this subtitle are—
(1) to contribute to United States economic com-
petitiveness, employment, and prosperity;
(2) to promote the advancement, maturation,
and application of critical and other advanced tech-
nologies;
(3) to supplement and stimulate long-term in-
vestment in qualified business concerns; and
(4) to encourage and facilitate the formation and
growth of professionally managed technology invest-
ment companies throughout the United States that
will give preference to satisfying the capital needs of
qualified business concerns, especially during their
early stages of development.
(c) RESPONSIBILITIES.—(1) In carrying out this sub-
title, the Secretary, acting through the Under Secretary,
and subject to the availability of appropriations, shall—
(A) consult with and, to the extent permitted by
law, utilize the capabilities of other executive agen-
cies, as appropriate, to ensure the efficient and effec-
tive implementation of this subtitle;
(B) explore, with other executive agencies, ways
to avoid duplication of effort by consolidating the ad-
ministration of the program established by this sub-
title with any other similar Federal program, and as
part of such consolidation may delegate administra-
tive functions, as necessary and appropriate, to an-
other executive agency; and
(C) consult with the Secretary of Energy on all
policy matters related to the Civilian Technology De-
velopment Program that deal with development or
utilization of energy technologies.
(2) To the extent permitted by law, other executive
agencies shall cooperate with the Under Secretary in carry-
ing out this subtitle.
(d) OPERATING PLAN.—The Secretary, acting through
the Under Secretary, shall prepare (in consultation with
the Advisory Committee established under section 344, other
appropriate executive agencies, the States, United States
companies, the financial community, and other appropriate
parties) and submit to the Congress on or about November
1, 1993, an operating plan to carry out this subtitle. In
preparing such plan, the Secretary shall consider and
evaluate alternative approaches to achieving the purposes
of this subtitle and shall develop recommendations, as ap-
propriate, to fulfill the purposes of this subtitle in the most
effective and efficient manner achievable. Such evaluations
and recommendations shall be included in the plan submit-
ted under this subsection.
(e) 
OUTREACH
TO
ECONOMICALLY
DEPRESSED
AREAS.—The Secretary, acting through the Under Sec-
retary, shall seek to ensure that qualified business concerns
located in areas determined by the Secretary to have a de-
pressed economy, or a significant concentration of defense-
related industries, or chronically high unemployment, are
notified of the availability of financial assistance through
the program established under this subtitle and, to the ex-
tent practicable, to encourage and facilitate the participa-
tion of such qualified business concerns in such program.
(f) EFFECTIVE DATE.—Except as provided in sub-
section (d) and in sections 344 and 351(a), the provisions
of this subtitle shall take effect on October 1, 1994.
SEC. 344. ADVISORY COMMITTEE.
(a) ESTABLISHMENT.—There is established a Civilian
Technology Development Advisory Committee (in this sec-
tion referred to as the ‘‘CTD Advisory Committee’’).
(b) COMPOSITION.—The CTD Advisory Committee
shall be composed of 7 members, appointed by the Under
Secretary from among private individuals who, because of
their experience and accomplishments in technology devel-
opment, maturation, and adoption, business development,
venture capital, finance, or other relevant areas, are excep-
tionally qualified to perform the duties of the CTD Advisory
Committee. The Under Secretary shall designate 1 member
to serve as chairman.
(c) DUTIES.—The duties of the CTD Advisory Com-
mittee shall include advising the Under Secretary on all
matters related to policy, planning, execution, and evalua-
tion of the program established under this subtitle.
(d) TERMINATION.—Section 14 of the Federal Advisory
Committee Act shall not apply to the CTD Advisory Com-
mittee.
SEC. 345. ORGANIZATION AND LICENSING.
(a) IN GENERAL.—Any incorporated body, limited
partnership, or State instrumentality organized and char-
tered or otherwise existing under State law for the purpose
of performing the functions and conducting the activities
contemplated under this subtitle, that possesses the powers,
capabilities, and expertise reasonably necessary to perform
such functions and conduct such activities, may apply for
a license under this subtitle in such form and manner as
the Under Secretary may prescribe.
(b) ARTICLES.—The articles of any applicant shall
specify in general terms the objects for which the applicant
is formed, the name assumed by such applicant, the area
or areas in which its operations are to be carried on, the
place where its principal office is to be located, and the
amount and classes of its shares of capital stock. Such arti-
cles may contain any other provisions not inconsistent with
this subtitle that the applicant may see fit to adopt for the
regulation of its business and the conduct of its affairs.
Such articles and any amendments thereto adopted from
time to time shall be subject to the approval of the Under
Secretary.
(c) BUSINESS PLAN.—The business plan of any appli-
cant shall specify in general terms—
(1) how the applicant proposes to achieve the ob-
jects for which it is formed, to operate and govern its
business, and to fulfill the purposes and satisfy the re-
quirements of this subtitle;
(2) the board members or general partners and
the management and professional staff of the appli-
cant, and the professional training, experience, rep-
utation, and investment performance record, if any,
of each such individual, along with a description of
the applicant’s current and proposed management
structure;
(3) all current or committed private investors in
the applicant, together with the amount, terms, condi-
tions, and conveyances associated with such invest-
ment, and appropriate background information on
each private investor; and
(4) such other information as the Under Sec-
retary may require.
Such business plan and any material amendments thereto
adopted from time to time shall be subject to the approval
of the Under Secretary.
(d) APPROVAL OF ARTICLES AND BUSINESS PLAN; LI-
CENSING.—The articles and business plan of an applicant
for a license shall be forwarded to the Under Secretary for
consideration and approval or disapproval. In determining
whether to approve a prospective licensee’s articles and
business plan and permit it to operate under the provisions
of this subtitle, the Under Secretary shall give due regard,
among other things, to the general business reputation,
character, suitability, and demonstrated ability, experience,
and performance in the development, growth, and financing
of qualified business concerns, of the proposed owners and
management of the prospective licensee, and the likelihood
of successful operations of the prospective licensee including
adequate profitability and financial soundness. After con-
sideration of all relevant factors, if the Under Secretary ap-
proves the company’s articles and business plan and deter-
mines that the applicant satisfies or will satisfy the require-
stockholder, or by any group or class of stockholders, may
be limited by the Under Secretary.
(b) MANAGEMENT.—The management and operational
control of a licensee shall be carried out by suitable private
individuals who possess the professional training, experi-
ence, and capabilities reasonably necessary to achieve the
purposes of this subtitle.
SEC. 347. FINANCING FOR LICENSEES.
(a) AUTHORITY TO PURCHASE AND GUARANTEE PRE-
FERRED SECURITIES.—To encourage and facilitate the for-
mation and growth of licensees and qualified business con-
cerns, the Under Secretary may purchase or commit to pur-
chase nonvoting preferred securities, with or without equity
warrants, issued by a licensee, or guarantee, or commit to
guarantee, the payment of 100 percent of the redemption
price of and dividends on such preferred securities, to the
extent provided in appropriations Acts, if the licensee has
demonstrated to the satisfaction of the Under Secretary that
it is financially sound and that it has complied with or
will comply with the requirements of this subtitle, the terms
of its license, and any rule, regulation, or order issued
under this subtitle. Such purchases and guarantees shall
constitute direct loans and loan guarantees within the
meaning of paragraphs (1) and (3) of section 502 of the
Federal Credit Reform Act of 1990, respectively. A trust or
pool acting on behalf of the Under Secretary may purchase
preferred securities that are guaranteed under this sub-
section.
(b) TERMS AND CONDITIONS OF PREFERRED SECURI-
TIES.—(1) Guarantees and purchases of preferred securi-
ties, or commitments to make such guarantees and pur-
chases, under this section may be made on such terms and
conditions as the Under Secretary shall establish by regula-
tion or set forth in contract to ensure compliance with this
subtitle and to protect the interests of taxpayers and the
United States in the event of default or otherwise. For pur-
poses of this paragraph, the Under Secretary shall by regu-
lation define the term ‘‘default’’.
(2)(A) Except as provided in subparagraph (B), pre-
ferred securities issued under this section shall be senior in
priority for all purposes to all non-Federal equity interests
in a licensee unless the Under Secretary, in the exercise of
reasonable investment prudence and in considering the fi-
nancial soundness of the licensee, determines otherwise.
(B) The equity interests of a university or consortium
of universities, or of a State or instrumentality of a State,
in a licensee shall be equal in priority to Federal equity
interests in such licensee for all purposes unless the Under
Secretary, in the exercise of reasonable investment prudence
and in considering the financial soundness of the licensee,
determines otherwise.
(3) Preferred securities issued under this section shall
be redeemed by the issuer not later than 10 years after their
date of issuance for an amount equal to 100 percent of the
original issue price plus any accrued and unpaid divi-
dends. In order to facilitate the orderly liquidation of a li-
censee’s investments, redemption of such preferred securities
may be extended by mutual consent for no more than 5
years beyond such expiration date.
(4) Preferred securities issued under this section shall
pay dividends at a rate determined by the Secretary of the
Treasury at the time of issuance to equal the then current
average market yield on outstanding marketable debt obli-
gations of the United States with remaining periods to ma-
turity comparable to the time to required redemption of
such preferred securities, plus such additional charge, if
any, toward covering expected defaults and reasonable ad-
ministrative costs of carrying out this subtitle as the Under
Secretary may determine to be reasonable and appropriate.
Such additional charge shall not exceed 2 percent.
(5) Dividends on preferred securities issued under this
section shall be cumulative and preferred and paid out of
net realized earnings and returns of capital available for
distribution, as defined by the Under Secretary by regula-
tion.
(6) The payment of dividends on preferred securities
issued under this section may be deferred by the issuer until
such time as, and to the extent that, the issuer realizes earn-
ings and returns of capital available for distribution. Accu-
mulated and unpaid dividends on such preferred securities
shall be paid by the issuer before or at the time of redemp-
tion of the preferred securities and before any distribution
of net realized earnings and returns of capital of the issuer
to its non-Federal equity investors, except as provided in
subsection (e)(2) (B) and (C). With respect to preferred se-
curities issued under this section to a party other than the
Under Secretary, during the time of any deferral under this
paragraph, the Under Secretary shall make, on behalf of
the issuer, required dividend payments to the holder of the
preferred securities, its agents or assigns, or the appropriate
central registration agent, if any. The authority to make
dividend payments provided in this paragraph shall be lim-
ited to the extent of amounts provided in advance in appro-
priations Acts for such purposes.
(7) For purposes of this subsection, the term ‘‘divi-
dends’’ means dividends on preferred stock and returns on
preferred limited partnership interests or other similar se-
curities, as defined by the Under Secretary by regulation.
(c) LIMITATIONS AND RESTRICTIONS.—(1) The total
principal amount of debt, as evidenced by notes, bonds, de-
bentures, or certificates of indebtedness, plus the total face
amount of preferred securities purchased or guaranteed by
the Under Secretary under subsection (a), issued and out-
standing from a licensee shall not exceed 200 percent of the
private equity capital of the licensee.
(2) The total face amount of preferred securities pur-
chased or guaranteed by the Under Secretary under sub-
section (a) and outstanding from a licensee or a combina-
tion of licensees which are commonly controlled, as defined
and determined by the Under Secretary, shall not exceed
$50,000,000.
(3)(A) If preferred securities issued under this section
are outstanding, then the issuing licensee shall be subject
to the following restrictions:
(i) The total principal amount of debt, as evi-
denced by notes, bonds, debentures, or certificates of
indebtedness, of a licensee issued and outstanding
may not exceed 50 percent of the private equity cap-
ital of the licensee.
(ii) The annual management expenses of a li-
censee shall not exceed an amount which the Under
Secretary determines to be reasonable and appro-
priate.
(iii) The aggregate amount of obligations and se-
curities acquired and for which commitments may be
issued by a licensee for any single qualified business
concern shall not exceed $2,000,000 or 20 percent of
the private equity capital of such licensee, whichever
is greater, unless the Under Secretary approves a
greater amount.
(B) For purposes of this paragraph, the term ‘‘man-
agement expenses’’ includes expenses incurred in the normal
course of operations, but shall not include the cost of legal,
accounting, and consulting services provided by outside
parties and by affiliates of the licensee which are not nor-
mal practice in making and monitoring investments con-
sistent with the purposes of this subtitle.
(d) USE OF CAPITAL BY LICENSEES.—(1) A licensee
issuing preferred securities under this section shall invest
or commit to invest—
(A) an amount equal to the face value of such
preferred securities that are outstanding; plus
(B) an amount of its private equity capital
equal to 50 percent of the amount described in sub-
paragraph (A),
in the venture capital of qualified business concerns in ac-
cordance with section 349.
(2) At least 50 percent of the amount of investments
required under paragraph (1) shall be for seed and early
stage financing, as defined by the Under Secretary by regu-
lation. The Under Secretary may alter the percentage re-
quirement under this paragraph to the extent necessary, in
the determination of the Under Secretary, to achieve the
purposes of this subtitle and maintain prudent investment
diversification.
(3) Proceeds to a licensee derived from preferred securi-
ties issued under this section may be used by the issuer to
redeem any preferred securities issued under this section
that have been outstanding at least 5 years, as provided
in subsection (b)(3).
(4) Proceeds to a licensee derived from preferred securi-
ties issued under this section that have not been invested
pursuant to paragraphs (1) and (2) or used for redemptions
pursuant to paragraph (3) and are not reasonably needed
for the operations of the licensee shall be invested in direct
obligations of, or obligations guaranteed as to principal and
interest by, the United States, or in certificates of deposit
maturing within one year or less, issued by any institution
the accounts of which are insured by the Federal Deposit
Insurance Corporation.
(e) PROFIT DISTRIBUTION BY LICENSEES.—(1) Any
distribution of net realized earnings and returns of capital
made by a licensee that exceeds amounts required for the
purposes stated in paragraph (2) shall be distributed pro
rata to all investors entitled to such distributions. The Unit-
ed States shall receive no funds under this paragraph.
(2)(A) Except as provided in subparagraphs (B) and
(C), any distribution of net realized earnings and returns
of capital made by a licensee shall first be used to pay accu-
mulated and unpaid dividends owed on outstanding pre-
ferred securities issued under this section and to satisfy the
redemption requirements of subsection (b)(3).
(B) For purposes of subparagraph (A), the redemption
requirements of subsection (b)(3) shall be considered to be
satisfied if necessary and appropriate actions, as deter-
mined by the Under Secretary, have been undertaken by
the licensee to ensure that such requirements will be satis-
fied.
(C) If a licensee is operating as a limited partnership
or as a corporation described in subchapter S of chapter
1 of subtitle A of the Internal Revenue Code of 1986 or an
equivalent pass-through entity for tax purposes, it may dis-
tribute to the partners or shareholders an amount equal to
the estimated amount of Federal, State, and local income
taxes due from such partners and shareholders on their
share of undistributed taxable income for the current tax-
able year before payments described in subparagraph (A)
are made.
(f) USE OF PAYMENTS TO THE UNITED STATES.—
Amounts received by the United States from the payment
of dividends and the redemption of preferred securities pur-
suant to this section, and fees paid to the United States
by a licensee pursuant to this subtitle, shall be deposited
in an account established by the Under Secretary and shall
be available solely for carrying out this subtitle, to the ex-
tent provided in advance in appropriations Acts.
SEC. 348. ISSUANCE AND GUARANTEE OF TRUST CERTIFI-
CATES.
(a) AUTHORITY TO ISSUE TRUST CERTIFICATES.—
The Under Secretary is authorized to issue trust certificates
representing ownership of all or a fractional part of pre-
ferred securities issued by licensees and guaranteed by the
Under Secretary under this subtitle. Such trust certificates
shall be based on and backed by a trust or pool approved
by the Under Secretary and composed of preferred securities
and such other contractual obligations as the Under Sec-
retary may undertake to facilitate the sale of such trust
certificates.
(b) GUARANTEE
OF
TRUST
CERTIFICATES.—The
Under Secretary is authorized, upon such terms and condi-
tions as are deemed appropriate, to guarantee the timely
payment of the principal of and interest on trust certifi-
cates issued by the Under Secretary or his agent for pur-
poses of this section. Such guarantee shall be limited to the
extent of the redemption price of and dividends on the pre-
ferred securities, plus any related contractual obligations,
which compose the trust or pool.
(c) PREPAYMENTS AND REDEMPTIONS.—In the event
that preferred securities or contractual obligations in such
trust or pool are redeemed or extinguished, either volun-
tarily or involuntarily, the guarantee of timely payment
of principal and interest on the trust certificates shall be
reduced in proportion to the amount of redemption price
and dividends such redeemed preferred security or extin-
guished contractual obligation represents in the trust or
pool. Dividends or partnership profit distributions on such
preferred securities and related contractual obligations,
shall accrue and be guaranteed by the Under Secretary only
through the date of payment on the guarantee. During the
term of the trust certificate, it may be called for redemption,
whether voluntary or involuntary, of all preferred securities
residing in the pool.
(d) FEES.—The Under Secretary may collect fees for
a guarantee under this section that are reasonable and
customary.
(e) PAYMENT OF CLAIMS.—(1) In the event the Under
Secretary pays a claim under a guarantee issued under this
section, it shall be subrogated fully to the rights satisfied
by such payment.
(2) No State or local law, and no Federal law, shall
preclude or limit the exercise by the Under Secretary of
ownership rights in the preferred securities residing in a
trust or pool against which trust certificates are issued.
(f) 
REGISTRATION
AND
INTERMEDIARY
OPER-
ATIONS.—(1) The Under Secretary shall provide for a
central registration of all trust certificates sold pursuant
to this section. Such central registration shall include with
respect to each sale, identification of each licensee, the inter-
est rate or dividend rate paid by the licensee, commissions,
fees, or discounts paid to brokers and dealers in trust cer-
tificates, identification of each purchaser of the trust certifi-
cate, the price paid by the purchaser for the trust certificate,
the interest rate paid on the trust certificate, the fees of any
agent for carrying out the functions described in paragraph
(2), and such other information as the Under Secretary
deems appropriate.
(2) The Under Secretary shall contract with an agent
or agents to carry out on behalf of the Under Secretary the
pooling and the central registration functions of this section
including, notwithstanding any other provision of law,
maintenance on behalf of and under the direction of the
Under Secretary, such commercial bank accounts as may
be necessary to facilitate trusts or pools backed by securities
guaranteed or purchased under this subtitle, and the issu-
ance of trust certificates to facilitate such poolings. Such
agent or agents shall provide a fidelity bond or insurance
in such amounts as the Under Secretary determines to be
necessary to fully protect the interests of the Federal Gov-
ernment.
(3) Prior to any sale, the Under Secretary shall require
the seller to disclose to a purchaser of a trust certificate
issued pursuant to this section, information on the terms,
conditions, and yield of such instrument.
SEC. 349. VENTURE CAPITAL FOR QUALIFIED BUSINESS
CONCERNS.
Each licensee may provide venture capital to qualified
business concerns, in such manner and under such terms
as the licensee may fix in accordance with the regulations
of the Under Secretary.
SEC. 350. OPERATION.
(a) COOPERATION.—Wherever practicable the oper-
ations of a licensee, including the generation of business,
may be undertaken in cooperation with banks or other li-
censees, investors, or lenders, incorporated or unincor-
porated, and any servicing or initial investigation required
for loans or acquisitions of securities by the licensee under
the provisions of this subtitle may be handled through such
banks or other licensees, investors, or lenders on a fee basis.
Any licensee may receive fees for services rendered to such
banks and other licensees, investors, and lenders.
(b) ADVISORY SERVICES.—Each licensee may make
use, wherever practicable, of the advisory services of the
Federal Reserve System and of the Department of Com-
merce which are available for and useful to industrial and
commercial businesses, and may provide consulting and ad-
visory services on a fee basis and have on its staff persons
competent to provide such services. A licensee may not
charge fees for such services that are provided to a qualified
business concern in which it has an investment.
SEC. 351. REGULATIONS; LIABILITY.
(a) REGULATIONS.—The Under Secretary is author-
ized to prescribe regulations governing the operations of li-
censees, and to carry out the provisions of this subtitle, in
accordance with the purposes of this subtitle.
(b) LIABILITY OF THE UNITED STATES.—Nothing in
this subtitle or in any other provision of law imposes any
liability on the United States with respect to any obliga-
tions entered into, or stocks issued, or commitments made,
by any licensee operating under the provisions of this
subtitle.