‘‘(II) only direct costs, and not indi-
rect costs, profits, or management fees, for
up to 5 years’’; and
(2) by adding at the end the following new sub-
section:
‘‘(k) Notwithstanding subsections (b)(1)(B)(ii) and
(d)(3), the Director may grant an extension of not to ex-
ceed 6 months beyond the deadlines established under
those subsections for joint venture and single applicant
awardees to expend Federal funds to complete their
projects, if such extension may be granted with no addi-
tional cost to the Federal Government.’’.
Subtitle C—Civilian Technology
Loan Program
SEC. 331. LOAN AND LOAN GUARANTEE AUTHORITY.
To the extent provided in appropriation Acts, the
Secretary, acting through the Under Secretary, may make,
or enter into agreements to make, loans and loan guaran-
tees, either directly or in cooperation with other lenders,
to small- and medium-sized qualified business concerns in
accordance with this subtitle.
SEC. 332. 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, dem-
onstration, or utilization of critical technologies or
advanced technologies.
(2) Loans shall only be awarded or guaranteed
if the Under Secretary finds that—
(A) sufficient collateral 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
purposes 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 sen-
ior to any other debt obligations of the borrower, ex-
cept to the extent that the Under Secretary consid-
ers necessary 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 rea-
sonable administrative costs of carrying out this sub-
title. For purposes of this section, the term ‘‘de-
fault’’ 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,
equipment, or other assets, as determined by
the Secretary 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 bor-
rower has established 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 servicing costs that are reasonable and nec-
essary.
SEC. 333. 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
available under title III of the Stevenson-Wydler Tech-
nology Innovation Act of 1980, or under any other Act,
in order to aid such lenders and borrowers in achieving
the purposes described in section 332(1). The Secretary
may charge fees for technical assistance and services pro-
vided under this section in amounts sufficient to cover the
reasonable cost of such assistance and services. The Sec-
retary may waive such fees on a case-by-case basis. Fees
paid to the United States under this section shall be de-
posited 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. 334. DEFINITIONS.
For purposes of this subtitle, the terms ‘‘advanced
technologies’’, ‘‘critical technologies’’, and ‘‘qualified busi-
ness concern’’ have the meaning given such terms in sec-
tion 342 of this Act.
Subtitle D—Civilian Technology
Development Program
SEC. 341. SHORT TITLE.
This subtitle may be cited as the ‘‘Civilian Tech-
nology Development Act of 1993’’.
SEC. 342. DEFINITIONS.
For purposes of this subtitle—
(1) the term ‘‘advanced technologies’’ means
technologies eligible for assistance under the Ad-
vanced Technology Program established under sec-
tion 28 of the National Institute of Standards and
Technology Act (15 U.S.C. 278n);
(2) the term ‘‘articles’’ means articles of incor-
poration for an incorporated body, and the func-
tional equivalent, or other similar documents speci-
fied by the Under Secretary, for other business enti-
ties;
(3) the term ‘‘critical technologies’’ means tech-
nologies identified as critical technologies pursuant
to section 603(d) of the National Science and Tech-
nology 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 mean-
ing 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 se-
curities; or
(C) derived directly or indirectly from any
Federal source;
as the Under Secretary determines to be substan-
tially similar to equity financing, issued by a quali-
fied business concern.
SEC. 343. ESTABLISHMENT AND PURPOSE.
(a) ESTABLISHMENT.—There is established within
the Technology Administration of the Department of Com-
merce a national program to stimulate and supplement the
availability of long-term investment capital for the forma-
tion, development, and growth of United States business
concerns that are engaged primarily in the development
or application of critical or other advanced technologies.
The Secretary, through the Under Secretary, shall,
through such program, provide for the selection, licensing,
monitoring, and financial and technical support of profes-
sionally managed technology investment 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
competitiveness, 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 in-
vestment companies that will give preference to sat-
isfying the capital needs of qualified business con-
cerns in the early stages of their 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 ef-
fective implementation of this subtitle;
(B) explore, with other executive agencies, ways
to avoid duplication of effort by consolidating the
administration of the program established by this
subtitle with any other similar Federal program, and
as part of such consolidation may delegate adminis-
trative functions, as necessary and appropriate, to
another 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 assist the Under Secretary in carrying out
this subtitle.
(d) OFFICE OF TECHNOLOGY FINANCING.—There is
established an Office of Technology Financing in the
Technology Administration of the Department of Com-
merce to administer the program established under this
subtitle and the Civilian Technology Loan Program estab-
lished under subtitle C of this title and to conduct related
activities the Secretary may assign to such office.
SEC. 344. ADVISORY COMMITTEE.
(a) ESTABLISHMENT.—There is established a Civil-
ian Technology Development Advisory Committee (in this
section 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 Advi-
sory 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 Advi-
sory Committee Act shall not apply to the CTD Advisory
Committee.
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 pow-
ers, 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
articles 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 adopt-
ed from time to time shall be subject to the approval of
the Under Secretary.
(c) BUSINESS PLAN.—The business plan of any ap-
plicant shall specify in general terms—
(1) how the applicant proposes to achieve the
objects for which it is formed, to operate and govern
its business, and to fulfill the purposes and satisfy
the requirements 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 and convey-
ances associated with such investment, and appro-
priate background information on each private inves-
tor; 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;
LICENSING.—The articles and business plan of an appli-
cant for a license shall be forwarded to the Under Sec-
retary 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 busi-
ness 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 fi-
nancial soundness. After consideration of all relevant fac-
tors, if the Under Secretary approves the company’s arti-
cles and business plan and determines that the applicant
satisfies or will satisfy the requirements of this subtitle,
the Under Secretary may approve the company to operate
under the provisions of this subtitle and issue the company
a license for such operation.
SEC. 346. CAPITAL AND MANAGEMENT REQUIREMENTS.
(a) CAPITAL.—(1) The private equity capital of a li-
censee shall be adequate to ensure a reasonable prospect
that the licensee will be operated soundly and profitably,
and managed actively and prudently in accordance with
its articles and business plan. Such private equity capital
shall not be less than $5,000,000, except that, in the case
of a State sponsored licensee or a university sponsored li-
censee, such private equity capital shall not be less than
$2,500,000. At the time of issuance of a license, not less
than 75 percent of the private equity capital of the licensee
shall be available or committed to be available for new in-
vestment in accordance with this subtitle.
(2) Private and public pension funds may contribute
to the private equity capital of a licensee without restric-
tion as to the amount of such contribution.
(3) State and local government entities may contrib-
ute not more than 40 percent of the total private equity
capital of a licensee.
(4) The aggregate amount of shares in any such li-
censee or licensees which may be owned or controlled by
any stockholder, or by any group or class of stockholders,
may be limited by the Under Secretary.
(b) MANAGEMENT.—The management and oper-
ational control of a licensee shall be carried out by suitable
private individuals who possess the professional training,
experience, and capabilities reasonably necessary to
achieve the purposes of this subtitle.
SEC. 347. FINANCING FOR LICENSEES.
(a) AUTHORITY TO PURCHASE
AND GUARANTEE
PREFERRED SECURITIES.—To encourage and facilitate
the formation and growth of licensees and qualified busi-
ness concerns, the Under Secretary may purchase or com-
mit to purchase nonvoting, nonparticipating preferred se-
curities with mandatory redemption 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 appropria-
tions Acts, if the licensee has demonstrated to the satisfac-
tion of the Under Secretary that it is financially sound
and that it has complied with or will comply with the re-
quirements 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 para-
graphs (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 subsection.
(b) TERMS AND CONDITIONS OF PREFERRED SECU-
RITIES.—(1) Guarantees and purchases of preferred secu-
rities, 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 regu-
lation 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
purposes of this paragraph, the Under Secretary shall by
regulation 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 inter-
ests in a licensee unless the Under Secretary, in the exer-
cise of reasonable investment prudence and in considering
the financial soundness of the licensee, determines other-
wise.
(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 pru-
dence 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 dividends. In order to facilitate the orderly liquida-
tion of a licensee’s investments, redemption of such pre-
ferred 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 obligations of the United States with remaining peri-
ods to maturity comparable to the time to required re-
demption of such preferred securities, plus such additional
charge, if any, toward covering expected defaults and rea-
sonable administrative 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 avail-
able for distribution, as defined by the Under Secretary
by regulation.
(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 real-
izes earnings and returns of capital available for distribu-
tion. Accumulated and unpaid dividends on such preferred
securities shall be paid by the issuer before or at the time
of redemption 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 securities 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 as-
signs, or the appropriate central registration agent, if any.
The authority to make dividend payments provided in this
paragraph shall be limited to the extent of amounts pro-
vided in advance in appropriations 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
securities, as defined by the Under Secretary by regula-
tion.
(c) LIMITATIONS AND RESTRICTIONS.—(1) The total
principal amount of debt, as evidenced by notes, bonds,
debentures, or certificates of indebtedness, plus the total
face amount of preferred securities purchased or guaran-
teed by the Under Secretary under subsection (a), issued
and outstanding from a licensee shall not exceed 200 per-
cent 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 sec-
tion 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 cus-
tomary.
(iii) The aggregate amount of obligations and
securities acquired and for which commitments may
be issued by a licensee for any single qualified busi-
ness concern shall not exceed $2,000,000 or 20 per-
cent of the private equity capital of such licensee,
whichever is greater, unless the Under Secretary ap-
proves a greater amount.
(B) For purposes of this paragraph, the term ‘‘man-
agement expenses’’ includes expenses incurred in the nor-
mal 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 normal practice in making and monitoring investments
consistent 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 reg-
ulation. 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 invest-
ment diversification.
(3) Proceeds to a licensee derived from preferred se-
curities issued under this section may be used by the is-
suer 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 se-
curities issued under this section that have not been in-
vested pursuant to paragraphs (1) and (2) or used for re-
demptions pursuant to paragraph (3) and are not reason-
ably needed for the operations of the licensee shall be in-
vested 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
United 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
accumulated and unpaid dividends owed on outstanding
preferred securities issued under this section and to satisfy
the redemption requirements of subsection (b)(3).
(B) For purposes of subparagraph (A), the redemp-
tion requirements of subsection (b)(3) shall be considered
to be satisfied if necessary and appropriate actions, as de-
termined by the Under Secretary, have been undertaken
by the licensee to ensure that such requirements will be
satisfied.
(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
distribute to the partners or shareholders an amount equal
to the estimated amount of Federal, State, and local in-
come taxes due from such partners and shareholders on
their share of undistributed taxable income for the current
taxable 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
pursuant to this section, and fees paid to the United
States by a licensee pursuant to this subtitle, shall be de-
posited 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. 348. ISSUANCE AND GUARANTEE OF TRUST CERTIFI-
CATES.
(a) AUTHORITY TO ISSUE TRUST CERTIFICATES.—
The Under Secretary is authorized to issue trust certifi-
cates representing ownership of all or a fractional part of
preferred securities issued by licensees and guaranteed by
the Under Secretary under this subtitle. Such trust certifi-
cates shall be based on and backed by a trust or pool ap-
proved by the Under Secretary and composed of preferred
securities and such other contractual obligations as the
Under Secretary may undertake to facilitate the sale of
such trust certificates.
(b) GUARANTEE
OF TRUST CERTIFICATES.—The
Under Secretary is authorized, upon such terms and con-
ditions 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
preferred securities, plus any related contractual obliga-
tions, 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. Dur-
ing the term of the trust certificate, it may be called for
redemption, whether voluntary or involuntary, of all pre-
ferred 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 in-
terest rate or dividend rate paid by the licensee, commis-
sions, fees, or discounts paid to brokers and dealers in
trust certificates, identification of each purchaser of the
trust certificate, the price paid by the purchaser for the
trust certificate, the interest rate paid on the trust certifi-
cate, 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 issuance 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 Government.
(3) Prior to any sale, the Under Secretary shall re-
quire the seller to disclose to a purchaser of a trust certifi-
cate issued pursuant to this section, information on the
terms, conditions, and yield of such instrument.
SEC. 349. CAPITAL FOR QUALIFIED BUSINESS CONCERNS.
(a) VENTURE CAPITAL.—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.
Venture capital provided to incorporated qualified busi-
ness concerns under this section may be provided directly
or in cooperation with other investors, incorporated or un-
incorporated, through agreements to participate on an im-
mediate basis.
(b) LIMITATION ON LOAN AUTHORITY.—A licensee
may not make a direct loan to a qualified business concern
under this section which provides for repayment of such
loan more than 1 year after the loan is made, unless the
Under Secretary determines that to do so is necessary to
facilitate the orderly liquidation of the licensee’s invest-
ment.
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 ren-
dered 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
advisory services on a fee basis and have on its staff per-
sons 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
licensees, and to carry out the provisions of this subtitle,
in accordance with the purposes of this subtitle. Regula-
tions to implement this subtitle shall be issued not later
than 180 days after the date of enactment of this Act.
(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 sub-
title.
SEC. 352. TECHNICAL ASSISTANCE FOR LICENSEES AND
QUALIFIED BUSINESS CONCERNS.
(a) TECHNICAL ASSISTANCE.—The Secretary shall,
upon request, provide technical assistance and services, as
appropriate and needed, to licensees and to qualified busi-
ness concerns receiving financial assistance under this
subtitle, and shall ensure that such qualified business con-
cerns have ready access to appropriate assistance available
under title III of the Stevenson-Wydler Technology Inno-
vation Act of 1980, or under any other Act, in order to
aid such qualified business concerns in their development
or utilization of critical or other advanced technologies.
Technical assistance and services under this subsection
shall include providing licensees and qualified business
concerns with—
(1) an assessment of the technological and sci-
entific feasibility of a project, or an analysis of a
specific field of technical or scientific endeavor;
(2) improved access to technology developed by
the Institute and assistance in obtaining access to
technology developed by other Federal agencies and
laboratories;
(3) expert analysis of the economics of tech-
nology development undertaken by a qualified busi-
ness concern; and
(4) any other assistance or service that the
Under Secretary determines, after consultation with
licensees and qualified business concerns, is nec-
essary and appropriate to enhance prospects for suc-
cess and to reduce technical risk for licensees and
qualifed business concerns.
(b) FEES.—The Secretary may charge fees for serv-
ices and technical assistance provided under subsection (a)
in amounts sufficient to cover the reasonable cost of such
services and assistance. The Secretary may waive fees es-
tablished under this subsection.
SEC. 353. ANNUAL AUDIT AND REPORT.
(a) REQUIREMENT.—The Under Secretary shall pre-
pare, in consultation with the advisory committee estab-
lished under section 344, and submit annually a report
to the Congress containing a full and detailed account of
operations under this subtitle. Such report shall include
an audit setting forth the amount, type, recipient, and
source of disbursements, receipts, and losses sustained by
the Federal Government as a result of such operations
during the preceding fiscal year and since inception of the
program, together with an assessment of progress made
in achieving the purposes of this subtitle, including signifi-
cant accomplishments.
(b) CONTENTS.—In the annual report submitted
under subsection (a), the Under Secretary shall also in-
clude full and detailed accounts relative to the following
matters:
(1) The Under Secretary’s plans to ensure the
provision of licensee financing to all areas of the
country and to all qualified business concerns, in-
cluding steps taken to accomplish that goal.
(2) Steps taken by the Under Secretary to
maximize recoupment of Federal Government funds
incident to the inauguration and administration of
the licensee program, and to ensure compliance with
statutory and regulatory standards relating thereto.
(3) An accounting by the Treasury Department
with respect to tax revenues accruing to the Federal
Government from licensees, private investors in li-
censees, and business concerns receiving assistance
under this subtitle.
(4) Recommendations with respect to program
changes, statutory changes, and other matters, in-
cluding tax incentives to improve and facilitate the
operations of licensees and to encourage the use of
their financing facilities by qualified business con-
cerns.
SEC. 354. REPORTS, INVESTIGATIONS, AND EXAMINATIONS.
(a) REPORTING REQUIREMENTS.—Each license is-
sued under this subtitle shall require a licensee with out-
standing preferred securities to provide the Under Sec-
retary such information, including companies financed,
disbursements made along with associated terms and con-
ditions, receipts, portfolio valuation at cost and at esti-
mated fair market value, and other financial statements,
that the Under Secretary may require to determine, in a
timely manner, compliance with this subtitle and regula-
tions promulgated under this subtitle. Such reporting shall
be—
(1) except as otherwise provided in this sub-
section, consistent with the reporting practices and
standards of the venture capital industry;
(2) uniform for all licensees; and
(3) independently audited, at the expense of a
licensee, in accordance with generally accepted audit-
ing standards and submitted to the Under Secretary
no later than 60 days after the end of a licensee’s
fiscal year, with interim unaudited financial state-
ments provided to the Under Secretary no later than
45 days after the end of each 3-month period during
a licensee’s fiscal year.
The Under Secretary may exempt from making such re-
ports any licensee which is registered under the Invest-
ment Company Act of 1940 only to the extent necessary
to avoid duplication in reporting requirements.
(b) VALUATIONS.—The Under Secretary shall, by
regulation, establish guidelines for estimating the fair
market value of investments held by a licensee as required
under subsection (a). The board of directors of a corporate
licensee and the general partners of a partnership licensee
shall have the sole responsibility for making a good faith
determination of the fair market value of investments held
by such licensee, based on guidelines established under
this subsection.
(c) INVESTIGATIONS.—The Secretary may undertake
investigations to determine whether a licensee or any other
person has engaged or is about to engage in any acts or
practices which constitute or will constitute a violation of
any provision of this subtitle, or of any rule, regulation,
or order issued under this subtitle. The Secretary shall
permit any person to file a statement in writing, under
oath or otherwise as the Secretary shall determine, as to
all the facts and circumstances concerning the matter to
be investigated. For the purpose of any investigation, the
Secretary is empowered to administer oaths and affirma-
tions, subpoena witnesses, compel their attendance, take
evidence, and require the production of any books, papers,
and documents which are relevant to the inquiry.
(d) EXAMINATIONS.—(1) Each licensee shall be sub-
ject to examinations made at the direction of the Under
Secretary by examiners selected or approved by, and under
the supervision of, the Under Secretary. The Under Sec-
retary may enter into contracts with private parties to per-
form such examinations. The cost of such examinations,
including the compensation of the examiners, may in the
discretion of the Under Secretary be assessed against the
licensee examined and when so assessed shall be paid by
such licensee.
(2) Each licensee shall be examined at least every 2
years in such detail so as to determine whether or not it
has engaged in any violations of this subtitle.
(3) The Under Secretary may waive the examina-
tion—
(A) for up to one additional year if such a delay
would be appropriate, based upon the amount of de-
bentures and preferred securities being issued by the
licensee and its repayment record, the prior operat-
ing experience of the licensee, the contents and re-
sults of the last examination and the management
expertise of the licensee; or
(B) if it is a licensee whose operations have
been suspended while the licensee is involved in liti-
gation or is in receivership.
SEC. 355. REVOCATION AND SUSPENSION OF LICENSES;
CEASE AND DESIST ORDERS.
(a) GROUNDS FOR REVOCATION OR SUSPENSION.—
A license may be revoked or suspended by the Secretary—
(1) for willful or repeated violation of any provi-
sion of this subtitle or any rule, regulation, or order
issued thereunder; or
(2) if the licensee no longer serves the purposes
for which it was granted a license.
(b) CEASE AND DESIST ORDERS.—Where a licensee
or any other person has not complied with any provision
of this subtitle, or of any rule, regulation, or order issued
thereunder, or is engaging or is about to engage in any
acts or practices which constitute or will constitute a viola-
tion of such provision, rule, regulation, or order, the Sec-
retary may order such licensee or other person to cease
and desist from such action or failure to act. The Sec-
retary may further order such licensee or other person to
take such action or to refrain from such action as the Sec-
retary considers necessary to ensure compliance with such
provisions, rules, regulations, or orders. The Secretary
may also suspend the license of a licensee, against whom
an order has been issued, until such licensee complies with
such order.
(c) PROCEDURES.—Before revoking or suspending a
license pursuant to subsection (a) or issuing a cease and
desist order pursuant to subsection (b), the Secretary shall
serve upon the licensee and any other person involved an
order to show cause why an order revoking or suspending
the license or a cease and desist order should not be is-
sued. If the Secretary, after an opportunity for agency
hearing, determines on the record that an order revoking
or suspending the license or a cease and desist order
should issue, the Secretary shall promptly issue such
order.
(d) SUBPOENAS.—The Secretary may require by sub-
poenas the attendance and testimony of witnesses and the
production of all books, papers, and documents relating
to the hearing from any place in the United States.
(e) ENFORCEMENT.—If any licensee or other person
against which or against whom an order is issued under
this section fails to obey the order, the Secretary may
apply to the United States court of appeals, within the
circuit where the licensee has its principal place of busi-
ness, for the enforcement of the order.
SEC. 356. INJUNCTIONS AND OTHER ORDERS.
(a) IN GENERAL.—Whenever, in the judgment of the
Secretary, a licensee or any other person has engaged or
is about to engage in any acts or practices which con-
stitute or will constitute a violation of any provision of
this subtitle, or of any rule, regulation, or order issued
under this subtitle, the Secretary may make application
to the proper district court of the United States or a
United States court of any place subject to the jurisdiction
of the United States for an order enjoining such acts or
practices, or for an order enforcing compliance with such
provision, rule, regulation, or order, and such courts shall
have jurisdiction of such actions and, upon a showing by
the Secretary that such licensee or other person has en-
gaged or is about to engage in any such acts or practices,
a permanent or temporary injunction shall be granted
without bond.
(b) TRUSTEESHIP OR RECEIVERSHIP.—Whenever it
is necessary in order to achieve the purposes of an injunc-
tion or other order under subsection (a), the court may
seize the assets of a licensee and appoint a trustee or re-
ceiver to hold or administer under the direction of the
court such assets. The Under Secretary shall have author-
ity to act as trustee or receiver of the licensee. Upon re-
quest by the Secretary, the court may appoint the Under
Secretary to act in such capacity unless the court deems
such appointment inequitable or otherwise inappropriate
by reason of the special circumstances involved.
SEC. 357. CONFLICTS OF INTEREST.
For the purpose of controlling conflicts of interest
which may be detrimental to qualified business concerns,
to licensees, to the shareholders or partners of either, or
to the purposes of this subtitle, the Under Secretary shall
adopt regulations to govern transactions with any officer,
director, shareholder, or partner of any licensee, or with
any person or concern, in which any interest, direct or in-
direct, financial or otherwise, is held by any officer, direc-
tor, shareholder, or partner of (1) any licensee, or (2) any
person or concern with an interest, direct or indirect, fi-
nancial or otherwise, in any licensee. Such regulations
shall include appropriate requirements for public disclo-
sure (including disclosure in the locality most directly af-
fected by the transaction) necessary to the purposes of this
section.
SEC. 358. REMOVAL OR SUSPENSION OF DIRECTORS AND
OFFICERS.
(a) GROUNDS.—The Secretary, after an opportunity
for agency hearing, may serve upon any director or officer
of a licensee a written notice of its intention to remove
such director or officer from office, temporarily or perma-
nently, whenever in the opinion of the Secretary such di-
rector or officer—
(1) has willfully and knowingly—
(A) committed any substantial violation of
this subtitle or any rule, regulation, or order is-
sued under this subtitle; or
(B) committed or engaged in any act,
omission, or practice which constitutes a sub-
stantial breach of his fiduciary duty as such di-
rector or officer,
and that such violation or such breach of fiduciary
duty is one involving personal dishonesty on the part
of such director or officer; or
(2) has been charged in any information, indict-
ment, or complaint, authorized by a United States
attorney but not yet having reached final disposition,
with the commission of or participation in a felony
involving dishonesty or breach of trust.
(b) HEARING.—A hearing under this section shall be
on the record and shall be held in the Federal judicial dis-
trict or in the territory in which the principal office of
the licensee is located unless the party afforded the hear-
ing consents to another place. A hearing under this section
shall be fixed for a date not earlier than 30 days nor later
than 60 days after the date of service of such notice, un-
less an earlier or a later date is set by the Secretary at
the request of (1) such director or officer and for good
cause shown, or (2) the Attorney General of the United
States. Unless such director or officer shall appear at the
hearing in person or by a duly authorized representative,
he shall be deemed to have consented to the issuance of
an order of such removal.
SEC. 359. VIOLATIONS.
(a) PARTICIPATION.—Whenever a licensee commits a
violation of this subtitle, or any rule, regulation, or order
issued under this subtitle, such violation shall be deemed
to be also a violation on the part of any person who, di-
rectly or indirectly, authorizes, orders, participates in, or
causes, brings about, counsels, aids, or abets in the com-
mission of such violation.
(b) BREACH OF FIDUCIARY DUTY.—It shall be a vio-
lation of this subtitle for any officer, director, employee,
agent, or other participant in the management or conduct
of the affairs of a licensee to engage in any act or practice,
or to omit any act, in breach of his fiduciary duty as such
officer, director, employee, agent, or participant, if, as a
result thereof, the licensee has suffered or is in imminent
danger of suffering financial loss or other damage.
(c) DISQUALIFICATION.—Except with the written
consent of the Secretary, it shall be a violation of this sub-
title for any person to take office, or to continue to serve,
as an officer, director, or employee of a licensee, or to be-
come or continue to serve as an agent or participant in
the conduct of the affairs or management of a licensee,
if such person—
(1) has been convicted of a felony, or any other
criminal offense involving dishonesty or breach of
trust; or
(2) has been found civilly liable in damages, or
has been permanently or temporarily enjoined by an
order, judgment, or decree of a court of competent
jurisdiction, by reason of any act or practice involv-
ing fraud or breach of trust.
SEC. 360. CIVIL PENALTIES.
Any person who is found by the Secretary, after no-
tice and opportunity to be heard on the record in accord-
ance with section 554 of title 5, United States Code, to
have committed a violation of this subtitle or any rule,
regulation, or order issued under this subtitle shall be lia-
ble to the United States for a civil penalty of not more
than $1,000 for each violation. Each day of a continuing
violation shall constitute a separate violation. The amount
of such civil penalty shall be assessed by the Secretary
by written notice. The Secretary may compromise, modify,
or remit, with or without conditions, any civil penalty
which is subject to imposition or which has been imposed
under this section.
SEC. 361. ANTITRUST SAVINGS CLAUSE.
This subtitle shall not be construed to modify, impair,
or supersede the operation of the antitrust laws. For pur-
poses of this section, the term ‘‘antitrust laws’’ has the
meaning given it in subsection (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 Pat-
man Act, and section 5 of the Federal Trade Commission
Act (15 U.S.C. 45) to the extent that such section 5 ap-
plies to unfair methods of competition.
TITLE IV—MISCELLANEOUS
SEC. 401. DEPARTMENT OF COMMERCE TECHNOLOGY AD-
VISORY BOARD.
(a) ESTABLISHMENT.—There is established a De-
partment of Commerce Technology Advisory Board (in
this section referred to as the ‘‘Advisory Board’’) to assist
the Technology Administration in the performance of its
functions.
(b) COMPOSITION.—The Advisory Board shall be
composed of at least 17 members, appointed by the Under
Secretary from among individuals who, because of their
experience and accomplishments are exceptionally quali-
fied to provide advice to the Under Secretary on the plans,
programs, and policy of the Technology Administration.
The Under Secretary shall designate 1 member to chair
the Advisory Board. Membership of the Advisory Board
shall include representatives of—
(1) United States small businesses;
(2) other United States manufacturers;
(3) research universities and independent re-
search institutes;
(4) State and local government agencies in-
volved in technology extension;
(5) national laboratories;
(6) industrial, worker, and professional organi-
zations;
(7) financial organizations; and
(8) computing and communications equipment
and services providers.
(c) DUTIES.—The duties of the Advisory Board shall
include advising the Secretary, the Under Secretary, and
the Director regarding—
(1) the development of policies and options for
implementation that the Advisory Board considers
essential to technology creation, development, and
adoption, including policies that would benefit small
businesses;
(2) the development and rapid application of
critical and other advanced technologies, including
advanced manufacturing technologies;
(3) the development of computer and commu-
nications support services for advanced manufactur-
ing; and
(4) the planning, execution, and evaluation of
programs under the authority of the Technology Ad-
ministration.
(d) MEETINGS.—(1) The chairman shall call the first
meeting of the Advisory Board not later than 90 days
after the date of enactment of this Act.
(2) The Advisory Board shall meet at least once every
6 months, and at the call of the Under Secretary.
(e) TRAVEL EXPENSES.—Members of the Advisory
Board, other than full-time employees of the United
States, shall be allowed travel expenses in accordance with
subchapter I of chapter 57 of title 5, United States Code,
while engaged in the business of the Advisory Board.
(f) CONSULTATION.—In carrying out this section, the
Under Secretary shall consult with other agencies, as ap-
propriate.
(g) TERMINATION.—Section 14 of the Federal Advi-
sory Committee Act shall not apply to the Advisory Board.
SEC. 402. INTERNATIONAL STANDARDIZATION.
(a) FINDINGS.—The Congress finds that—
(1) private sector consensus standards are es-
sential to the timely development of competitive
products;
(2) Federal Government contribution of re-
sources, more active participation in the voluntary
standards process in the United States, and assist-
ance, where appropriate, through government to gov-
ernment negotiations, can increase the quality of
100
United States standards, increase their compatibility
with the standards of other countries, and ease ac-
cess of United States-made products to foreign mar-
kets; and
(3) the Federal Government, working in co-
operation with private sector organizations including
trade associations, engineering societies, and tech-
nical bodies, can effectively promote United States
Government use of United States consensus stand-
ards and, where appropriate, the adoption and
United States Government use of international
standards.
(b) STANDARD PILOT PROGRAM.—Section 104(e) of
the American Technology Preeminence Act of 1991 is
amended—
(1) by inserting ‘‘(1)’’ before ‘‘Pursuant to
the’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) As necessary and appropriate, the Institute shall
expand the program established under section 112 of the
National Institute of Standards and Technology Author-
ization Act for Fiscal Year 1989 (15 U.S.C. 272 note)
by extending the existing program and by entering into
additional contracts with non-Federal organizations rep-
101
resenting United States companies, as such term is de-
fined in section 28(d)(9)(B) of the National Institute of
Standards 
and 
Technology 
Act 
(15 
U.S.C.
278n(d)(9)(B)). Such contracts shall require cost sharing
between Federal and non-Federal sources for such pur-
poses. In awarding such contracts, the Institute shall seek
to promote and support the dissemination of United
States technical standards to additional foreign countries,
in cooperation with governmental bodies, private organiza-
tions including standards setting organizations and indus-
try, and multinational institutions that promote economic
development. The organizations receiving such contracts
may establish training programs to bring to the United
States foreign standards experts for the purpose of receiv-
ing in-depth training in the United States standards sys-
tem.’’.
(c) REPORT
ON GLOBAL STANDARDS.—The Sec-
retary, in consultation with the Institute and the Depart-
ment of Commerce Technology Advisory Board established
under section 401 of this Act, shall submit to the Congress
a report describing the appropriate roles of the Depart-
ment of Commerce in aid to United States companies in
achieving conformity assessment and accreditation and
otherwise qualifying their products in foreign markets,
and in the development and promulgation of domestic and
102
global product and quality standards, including a discus-
sion of the extent to which each of the policy options pro-
vided in such Office of Technology Assessment report con-
tributes to meeting the goals of—
(1) increasing the international adoption of
standards beneficial to United States industries; and
(2) improving the coordination of United States
representation to international standards setting
bodies.
(d) FEDERAL GOVERNMENT ROLE.—Section 508(a)
of the American Technology Preeminence Act of 1991 is
amended by adding at the end the following new para-
graph:
‘‘(6) The appropriate role of the Federal Gov-
ernment in aid to United States companies in
achieving conformity assessment and accreditation
and otherwise qualifying their products in foreign
markets, and in the development and promulgation
of domestic and global product and quality stand-
ards, including a discussion of the extent to which
each of the policy options provided in the Office of
Technology Assessment report on global standards
contributes to meeting the goal of improving the co-
ordination of United States representation to inter-
national standards-setting bodies.
103
SEC. 403. MALCOLM BALDRIGE AWARD AMENDMENTS.
(a) Section 108(c)(3) of the Stevenson-Wydler Tech-
nology Innovation Act of 1980, as so redesignated by sec-
tion 206(b)(4) of this Act, is amended to read as follows:
‘‘(3) No award shall be made within any category or
subcategory if there are no qualifying enterprises in that
category or subcategory.’’.
(b)(1) Section 108(c)(1) of the Stevenson-Wydler
Technology Innovation Act of 1980, as so redesignated by
section 206(b)(4) of this Act, is amended by adding at
the end the following new subparagraph:
‘‘(D) Educational institutions.’’.
(2)(A) Within 1 year after the date of enactment of
this Act, the Secretary shall submit to the Congress a re-
port containing—
(i) criteria for qualification for a Malcolm
Baldrige National Quality Award by various classes
of educational institutions;
(ii) criteria for the evaluation of applications for
such awards under section 108(d)(1) of the Steven-
son-Wydler Technology Innovation Act of 1980, as
so redesignated by section 206(b)(4) of this Act; and
(iii) a plan for funding awards described in
clause (i).
(B) In preparing the report required under subpara-
graph (A), the Secretary shall consult with the National
104
Science Foundation and other public and private entities
with appropriate expertise, and shall provide for public no-
tice and comment.
(C) The Secretary shall not accept applications for
awards described in subparagraph (A)(i) until after the
report required under subparagraph (A) is submitted to
the Congress.
SEC. 404. COOPERATIVE RESEARCH AND DEVELOPMENT
AGREEMENTS.
Section 202(d)(1) of the Stevenson-Wydler Tech-
nology Innovation Act of 1980 (15 U.S.C. 3710a(d)(1)),
as redesignated by section 206(b)(6) of this Act, is amend-
ed by inserting ‘‘(including both real and personal prop-
erty)’’ after ‘‘or other resources’’ both places it appears.
SEC. 405. CLEARINGHOUSE ON STATE AND LOCAL INITIA-
TIVES.
Section 102(a) of the Stevenson-Wydler Technology
Innovation Act of 1980, as so redesignated by section
206(b)(2) of this Act, is amended by striking ‘‘Office of
Productivity, Technology, and Innovation’’ and inserting
in lieu thereof ‘‘Institute’’.
105
SEC. 406. COMPETITIVENESS ASSESSMENTS AND EVALUA-
TIONS.
Section 101(e) of the Stevenson-Wydler Technology
Innovation Act of 1980, as so redesignated by section
206(b)(2) of this Act, is amended to read as follows:
‘‘(e) COMPETITIVENESS ASSESSMENTS AND EVALUA-
TIONS.—(1) The Secretary, through the Under Secretary,
shall—
‘‘(A) provide for the conduct of research and
analyses to advance knowledge of the ways in which
the economic competitiveness of United States in-
dustry can be enhanced through Federal programs
established under the National Competitiveness Act
of 1993 or the amendments made by that Act; and
‘‘(B) as appropriate, provide for evaluations of
Federal technology programs established or ex-
panded under the National Competitiveness Act of
1993 or the amendments made by that Act in order
to judge their effectiveness and make recommenda-
tions to improve their contribution to United States
competitiveness.
‘‘(2) All executive departments and agencies shall as-
sist the Secretary in carrying out this section as appro-
priate.
‘‘(3) Nothing in this section shall authorize the re-
lease of information to, or the use of information by, the
106
Secretary or Under Secretary in a manner inconsistent
with law or any procedure established pursuant thereto.
‘‘(4) The head of any Federal agency may detail such
personnel and may provide such services, with or without
reimbursement, as the Secretary may request to assist in
carrying out the activities required under this section.’’.
SEC. 407. STUDY OF SEMICONDUCTOR LITHOGRAPHY
TECHNOLOGIES.
Within 9 months after the date of enactment of this
Act, the Critical Technologies Institute (in this section re-
ferred to as the ‘‘Institute’’) established under section 822
of the National Defense Authorization Act for Fiscal Year
1991 shall, after consultation with the private sector and
appropriate officials from other Federal agencies, submit
to Congress a report on advanced lithography technologies
for the production of semiconductor devices. The report
shall include the Institute’s evaluation of the likely tech-
nical and economic advantages and disadvantages of each
such technology, an analysis of current private and Gov-
ernment research to develop each such technology, and
any recommendations the Institute may have regarding
future Federal support for research and development in
advanced lithography.
107
SEC. 408. AMERICAN WORKFORCE QUALITY PARTNER-
SHIPS.
Title III of the Stevenson-Wydler Technology Innova-
tion Act of 1980, as added by title II of this Act, is further
amended by adding at the end the following new section:
‘‘SEC. 305. AMERICAN WORKFORCE QUALITY PARTNER-
SHIPS.
‘‘(a) PROGRAM AUTHORIZED.—The Secretary may
make grants to eligible applicants having applications ap-
proved under this section to establish and operate Amer-
ican workforce quality partnership programs in accord-
ance with the provisions of this section. The Secretary
shall award grants on a competitive basis to pay the Fed-
eral share for American workforce quality partnership pro-
grams to establish workforce training consortia between
industry and institutions of higher education.
‘‘(b) GRANT PERIOD.—Grants awarded under this
section may be for a period of 5 years.
‘‘(c) GENERAL AUTHORITY.—Each grant recipient
shall use amounts provided under the grant to develop and
operate an American workforce quality partnership pro-
gram.
‘‘(d) 
CONTENTS
OF
PROGRAM.—An 
American
workforce quality partnership program shall establish
partnerships between—
108
‘‘(1) one or more technology-based or manufac-
turing sector firms, in conjunction with a labor orga-
nization where available or worker representative
group or employee representatives; and
‘‘(2) a local community or technical college or
other appropriate institutions of higher education, or
a vocational training institution or consortium of
such education institutions,
to train the employees of the industrial partners through
both workplace-based and classroom-based programs of
training.
‘‘(e) FEDERAL SHARE.—The Federal share of the
cost of an American workforce quality partnership pro-
gram may not exceed 50 percent of the total cost of the
program. The non-Federal share of such costs may be pro-
vided in-cash or in-kind, fairly valued. The total contribu-
tion of the proposed partnership should reflect a substan-
tial contribution on the part of the industrial partners and
appropriate contributions of the education partners, local
or State governments, and other appropriate entities.
‘‘(f) APPLICATIONS.—
‘‘(1) IN GENERAL.—Each eligible applicant that
desires to receive a grant under this section shall
submit an application to the Secretary at such time
and in such manner as the Secretary shall prescribe.
109
‘‘(2) PLAN.—Each application submitted under
this subsection shall contain a plan for the develop-
ment and implementation of an American workforce
quality partnership program under this section.
Such plan shall—
‘‘(A) show a demonstrated commitment, on
the part of the industrial partners, to adopt
total quality management strategies or other
plausible strategies to renew its competitive
edge;
‘‘(B) demonstrate the need for Federal re-
sources because of the long-term nature and
risk of such an investment, the inability to fi-
nance such ventures because of the high cost of
capitalization, intense competition from foreign
industries, or such other appropriate reasons as
may limit the industrial partners’ ability to
launch programs where worker training and de-
velopment is a substantial component;
‘‘(C) demonstrate long-term benefit for all
partners and the local economy, through an en-
hanced competitive position of the industrial
partners, substantial benefits for regional em-
ployment, and the ability of the education part-
ners to further their capabilities to educate and
110
train other nonpartnership-affiliated individuals
wishing to obtain or upgrade technical, techno-
logical, industrial management and leadership,
or other industrial skills;
‘‘(D) make full, appropriate, and innova-
tive use of industrial and higher education re-
sources and other local resources such as facili-
ties, equipment, personnel exchanges, experts,
or consultants;
‘‘(E) provide for the establishment of an
advisory board in accordance with subsection
(h);
‘‘(F) include an explanation of the indus-
trial partners’ plans to adopt new competitive
strategies and how the training partnership aids
that effort; and
‘‘(G) include assurances that the eligible
entity will maintain its aggregate expenditures
from all other sources for employee training at
or above the average level of such expenditures
in the 2 fiscal years preceding the date of en-
actment of this section.
‘‘(3) APPROVAL.—
‘‘(A) IN
GENERAL.—The Secretary shall
approve applications based on their potential to
111
create an effective American workforce quality
partnership program in accordance with this
section.
‘‘(B) CRITERIA.—In reviewing grant appli-
cations, the Secretary shall give significant con-
sideration to the following criteria:
‘‘(i) Saliency of argument for requir-
ing a Federal investment.
‘‘(ii) Commitment of partnership to
continue operation after the termination of
Federal funding.
‘‘(iii) The likelihood that the training
will lead to long-term competitiveness of
the industrial partners and contribute sig-
nificantly to economic growth.
‘‘(iv) The likelihood that the partner-
ship will benefit the education mission of
the education partners in ways outside of
the scope of the partnership, such as devel-
oping 
the 
capability 
to 
train 
other
nonpartnership-affiliated 
individuals 
in
similar skills.
‘‘(C) 
PRIORITY
CONSIDERATION.—The
Secretary shall give priority consideration to in-
dustries which are threatened by intense foreign
112
competition important to the long-term national
economic or military security of the United
States and industries which are critical in ena-
bling other United States industries to maintain
a healthy competitive position. In addition, the
Secretary shall give priority to applicants in
areas of high poverty and unemployment.
‘‘(g) USE OF FUNDS.—
‘‘(1) APPROVED USES.—Federal funds may be
used for—
‘‘(A) the direct costs of workplace-based
and classroom-based training in advanced tech-
nical, technological, and industrial management,
skills, and training for the implementation of
total quality management strategies, or other
competitiveness strategies, contained in the ap-
plicant’s plan submitted under subsection
(f)(2)(F);
‘‘(B) the purchase or lease of equipment or
other materials for the purpose of instruction to
aid in training;
‘‘(C) the development of in-house curricula
or coursework or other training-related pro-
grams, including the training of teachers and
113
other eligible participants to utilize such curric-
ula or coursework; and
‘‘(D) reasonable administrative expenses
and other indirect costs of operating the part-
nership which may not exceed 10 percent of the
total cost of the program.
‘‘(2) LIMITATIONS.—Federal funds may not be
used for nontraining related costs of adopting new
competitive strategies including the replacement of
manufacturing equipment, product redesign and
manufacturing facility construction costs, or salary
compensation of the partners’ employees. Grants
shall not be made under this section for programs
that will impair any existing program, contract, or
agreement without the written concurrence of the
parties to such program, contract, or agreement.
‘‘(h) ADVISORY BOARD.—
‘‘(1) Each partnership shall establish an advi-
sory board which shall include equal representation
from each of the following categories:
‘‘(A) Multiple organizational levels of the
industrial partners.
‘‘(B) The education partners.