achievable. Such evaluations and recommendations shall
be included in the plan submitted under this subsection.
(e) OUTREACH
TO
ECONOMICALLY
DEPRESSED
AREAS.—The Secretary, acting through the Under Sec-
retary, shall seek to ensure that qualified business con-
cerns located in areas determined by the Secretary to have
a depressed economy, or a significant concentration of de-
fense-related industries, or chronically high unemploy-
ment, are notified of the availability of financial assistance
through the program established under this subtitle and,
to the extent practicable, to encourage and facilitate the
participation 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 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, terms, con-
ditions, 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;
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) To the extent permitted by other law, including
the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1001 et seq.), private and public pension funds
may contribute to the private equity capital of a licensee
without restriction 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 preferred securities, with or
without equity warrants, issued by a licensee, or guaran-
tee, 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, regu-
lation, or order issued under this subtitle. Such purchases
and guarantees shall constitute direct loans and loan guar-
antees 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 guar-
anteed 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 appro-
priate.
(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. 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 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.
(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.
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
qualified 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. PERFORMANCE MEASURES; ANNUAL REPORT.
(a) PERFORMANCE MEASURES.—The performance of
the program established under this subtitle shall be evalu-
ated relative to progress made in achieving its purposes
and shall be measured in relevant and meaningful terms
such as significant accomplishments in advancing tech-
nology, businesses formed and financed, jobs created,
taxes generated, licenses granted and maintained, capital
invested, and other criteria the Under Secretary may deem
appropriate.
(b) ANNUAL REPORT.—The Under Secretary shall
prepare, in consultation with the advisory committee es-
tablished 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—
(1) an assessment of progress made in achiev-
ing the purposes of this subtitle;
(2) performance measures established under
subsection (a);
(3) a list of licensees along with their location,
area of operations, investment objectives, capitaliza-
tion, and net asset value, both at cost and at current
fair market value;
(4) an audit setting forth the amount, type, re-
cipient, and source of disbursements, receipts, and
losses sustained by the Federal Government as a re-
sult of operations under this subtitle during the pre-
ceding fiscal year and since inception of the pro-
gram;
(5) the Under Secretary’s plans to ensure the
provision of licensee financing to all areas of the
country and to all qualified business concerns, and
plans to notify and to encourage and facilitate the
participation of qualified business concerns as re-
quired by section 343(e), including steps taken to
accomplish those goals;
(6) steps taken by the Under Secretary to carry
out this subtitle and to ensure compliance with stat-
utory and regulatory standards relating thereto; and
(7) 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 and net asset value
at cost and at estimated fair market value, and other fi-
nancial statements, that the Under Secretary may require
to satisfy the requirements of section 353(b) and to deter-
mine, in a timely manner, compliance with this subtitle
and regulations promulgated under this subtitle. Such re-
porting 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;
(3) submitted annually to the Under Secretary,
with valuation and other information provided more
frequently as the Under Secretary may require; and
(4) certified by the Board of Directors or the
General Partners of the licensee.
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.
100
(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.—Each licensee shall be subject
to examinations made at the discretion and direction of
the Under Secretary by examiners selected or approved
by, and under the supervision of, the Under Secretary.
The Under Secretary may enter into contracts with pri-
vate parties to perform such examinations. The cost of
such examinations, including the compensation of the ex-
aminers, may in the discretion of the Under Secretary be
assessed against the licensee examined and when so as-
sessed shall be paid by such licensee.
101
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) SUBPOENAS.—The Secretary may require by sub-
poenas the attendance and testimony of witnesses and the
102
production of all books, papers, and documents relating
to the hearing from any place in the United States.
(d) 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 district court of the United States for the
district where the licensee has its principal place of busi-
ness, for the enforcement of the order.
SEC. 356. INJUNCTIVE RELIEF.
(a) IN GENERAL.—If the Secretary determines that
a licensee or any other person has engaged, or is about
to engage, in any acts or practices which constitute a vio-
lation of any provision of this subtitle, or of any rule, regu-
lation, or order issued under this subtitle, the Secretary
may apply to the appropriate district court of the United
States for injunctive relief.
(b) RECEIVERSHIP.—Whenever it is necessary in
order to achieve the purposes of injunctive relief granted
under subsection (a), and upon proper application by the
Secretary, the court may order the attachment of assets
of a licensee and may appoint a receiver to administer
such assets under the direction of the court.
SEC. 357. CONFLICTS OF INTEREST.
For the purpose of controlling conflicts of interest
which may be detrimental to qualified business concerns,
103
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
104
(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 convicted of a felony involving dis-
honesty 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.
105
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
106
(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
107
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 make an effort to ensure the
appointment of socially and economically disadvantaged
individuals (within the meaning of section 8(a) (5) and
(6) of the Small Business Act, and including women) to
the Advisory Board. The Under Secretary shall designate
108
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;
109
(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.
(h) SECRETARIAL
DISCRETION.—Notwithstanding
any other provision of this section, the Secretary shall
have the discretion to decide whether to establish the Advi-
sory Board or create a more cost-effective way to achieve
110
the goal of closer cooperation with industry. If the Sec-
retary exercises such discretion and establishes an alter-
native mechanism, the Under Secretary shall make an ef-
fort to ensure the participation of socially and economi-
cally disadvantaged individuals (within the meaning of sec-
tion 8(a)(5) and (6) of the Small Business Act, and in-
cluding women) in the alternative mechanism.
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 and more active participation in the vol-
untary standards process in the United States can
increase the quality of United States standards, in-
crease their compatibility with the standards of
other countries, and ease access of products manu-
factured by United States manufacturers to foreign
markets; 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-
111
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’’;
(2) by striking ‘‘matching funds’’ and inserting
in lieu thereof ‘‘financial contributions deemed ap-
propriate by the Secretary’’; and
(3) 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 to include other coun-
tries that request assistance with standards-related activi-
ties from official representatives of the United States Gov-
ernment. The Institute may enter into additional contracts
with non-Federal organizations representing United
States companies, as such term is defined in section
28(d)(9)(B) of the National Institute of Standards and
Technology Act (15 U.S.C. 278n(d)(9)(B)) or with United
112
States-based professional societies who participate in the
development of standards. Such contracts shall require
cost sharing between Federal and non-Federal sources for
such purposes. In awarding such contracts, the Institute
shall seek to promote and support the dissemination of
United States technical standards to additional foreign
countries and shall seek, as the Director deems appro-
priate, to promote the adoption of international standards
supported by United States industry, and shall seek to as-
sist private sector professional societies which participate
in the development of standards in expediting the develop-
ment of domestic standards which enable the introduction
of technologies, products, or technology-based services
which are being delayed due to the lack of available stand-
ards. The Institute and such contractors shall, in carrying
out the preceding sentence, cooperate with governmental
bodies, private organizations including standards setting
organizations and industry, and multinational institutions
that promote economic development. The organizations re-
ceiving such contracts may establish training programs to
bring to the United States foreign standards experts for
the purpose of receiving in-depth training in the United
States standards system.’’.
113
(c) REPORT ON STANDARDS.—(1) Section 508(a) of
the American Technology Preeminence Act of 1991 (15
U.S.C. 3701 note) is amended—
(A) by inserting ‘‘standards development and
international’’ after ‘‘a thorough review of inter-
national’’;
(B) by redesignating paragraphs (1) through
(5) as paragraphs (2) through (6), respectively; and
(C) by inserting before paragraph (2), as so re-
designated by subparagraph (B) of this paragraph,
the following new paragraph:
‘‘(1) Current and potential future roles of the
Federal Government in the development and promul-
gation of domestic and global product and process
standards.’’.
(2) The Secretary, in consultation with the Institute
and the Department of Commerce Technology Advisory
Board established under section 401 of this Act and with,
as appropriate, the active participation of the private sec-
tor, shall submit to the Congress a report describing the
appropriate roles of the Department of Commerce in aid
to United States companies in achieving conformity as-
sessment and accreditation and otherwise qualifying their
products in foreign markets, through the development and
promulgation of domestic and global product and quality
114
standards, and through the implementation of conformity
assessment and accreditation procedures based upon such
standards, including a discussion of the extent to which
each of the policy options provided in the March 1992 Of-
fice of Technology Assessment report, entitled ‘‘Global
Standards’’, contributes to meeting the goals of—
(A) increasing the international adoption of
standards beneficial to United States industries; and
(B) improving the coordination of United States
representation to international standards setting
bodies.
(3) The report shall also describe emerging product
and market areas which can be assisted by shortening the
time required for the development of standards and make
recommendations on contributions the Department of
Commerce can make to improving the timeliness of stand-
ards development.
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)(3) 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.’’.
116
report required under subparagraph (A) is submitted to
the Congress.
SEC. 404. COOPERATIVE RESEARCH AND DEVELOPMENT
AGREEMENTS.
Section 202 of the Stevenson-Wydler Technology In-
novation Act of 1980 (15 U.S.C. 3710a), as redesignated
by section 206(b)(5) of this Act, is amended—
(1) in subsection (d)(1), by inserting ‘‘(includ-
ing both real and personal property)’’ after ‘‘or
other resources’’ both places it appears; and
(2) in subsection (d)(2)(A), by inserting ‘‘in-
cluding Federal test and evaluation facilities,’’ after
‘‘by a Federal agency,’’.
SEC. 405. 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 com-
panies can be enhanced through Federal programs
117
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
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. 406. 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
118
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.
SEC. 407. AMERICAN WORKFORCE QUALITY PARTNER-
SHIPS.
(a) AMENDMENT.—Title III of the Stevenson-Wydler
Technology Innovation 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 establish and operate American workforce
quality partnership programs in accordance with the pro-
visions of this section. The Secretary shall award grants
on a competitive basis to pay the Federal share for Amer-
119
ican workforce quality partnership programs to establish
workforce training consortia between industry and institu-
tions 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 among—
‘‘(1) one or more United States manufacturers;
‘‘(2) an organization or organizations represent-
ing the nonmanagerial employees of the manufactur-
ers described in paragraph (1); and
‘‘(3) a local community technical college or
other appropriate institutions of higher education, a
vocational training institution, a Regional Center for
the Transfer of Manufacturing Technology, a Manu-
facturing Outreach Center, or any similar entity or
consortium of such institutions,
to train the employees of the industrial partners through
both workplace-based and classroom-based programs of
training.
120
‘‘(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) ELIGIBILITY.—Any consortium described
in subsection (d) may apply for a grant under this
section at such time and in such manner as the Sec-
retary shall prescribe.
‘‘(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;
121
‘‘(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 and
labor participants to further their capabilities to
educate and train other nonpartnership-affili-
ated individuals wishing to obtain or upgrade
technical, technological, 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;
122
‘‘(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 sources for employee training, other
than those provided under this section, at or
above the average level of such expenditures in
the 2 fiscal years preceding submission of an
application for assistance under this section.
‘‘(3) APPROVAL.—
‘‘(A) IN
GENERAL.—The Secretary shall
approve applications based on their potential to
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.
123
‘‘(ii) Commitment of partnership to
continue operation after the termination of
Federal funding.
‘‘(iii) The likelihood that the training
will improve the long-term competitiveness
of the industrial partners and contribute
significantly 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
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.—
124
‘‘(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 and technology man-
agement strategies, or other competitiveness
strategies, contained in the applicant’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
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
125
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 representation from
each of the following categories:
‘‘(A) Multiple organizational levels of the
industrial partners, that shall include manage-
rial employees.
‘‘(B) The education partners.
‘‘(C) 
Organizations 
representing
nonmanagerial employees.
‘‘(2) The advisory board shall—
‘‘(A) advise the partnership on the general
direction and policy of the partnership including
training, instruction, and other related issues;
‘‘(B) report to the Secretary after the sec-
ond and fourth year of the program, on the
progress and status of the partnership, includ-
ing its strengths, weaknesses, and new direc-
126
tions, the number of individuals served, types of
services provided, and an outline of how the
program can be integrated into the existing
training infrastructure in place in other Federal
agencies and departments; and
‘‘(C) assist in the revision of the plans
(submitted with the application under sub-
section (f)(2)(F)) and include revised plans as
necessary in the reports required under sub-
paragraph (B).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on October 1, 1994.
SEC. 408. SEVERABILITY.
If any provision of this Act or the amendments made
by this Act, or the application thereof to any person or
circumstance, is held invalid, the remainder of this Act
and the amendments made by this Act, and the applica-
tion thereof to other persons or circumstances, shall not
be affected thereby.
SEC. 409. SUNSET.
(a) REPORT TO CONGRESS.—Before April 1, 1995,
the Secretary shall submit to the Congress a report that
evaluates the success of the programs established by this
Act, and the amendments made by this Act, in achieving
the purposes of this Act.
127
(b) LIMITATION
ON
APPROPRIATIONS.—Notwith-
standing any other provision of this Act, no funds are au-
thorized to be appropriated for any fiscal year after fiscal
year 1995 for carrying out the programs for which funds
are authorized by this Act, or the amendments made by
this Act.
SEC. 410. USE OF DOMESTIC PRODUCTS.
(a) PROHIBITION AGAINST FRAUDULENT USE OF
‘‘MADE IN AMERICA’’ LABELS.—(1) A person shall not
intentionally affix a label bearing the inscription of ‘‘Made
in America’’, or any inscription with that meaning, to any
product sold in or shipped to the United States, if that
product is not a domestic product.
(2) A person who violates paragraph (1) shall not be
eligible for any contract for a procurement carried out
with amounts authorized under this Act, or under any
amendment made by this Act, including any subcontract
under such a contract pursuant to the debarment, suspen-
sion, and ineligibility procedures in subpart 9.4 of chapter
1 of title 48, Code of Federal Regulations, or any succes-
sor procedures thereto.
(b) COMPLIANCE WITH BUY AMERICAN ACT.—(1)
Except as provided in paragraph (2), the head of each
agency which conducts procurements shall ensure that
such procurements are conducted in compliance with sec-
128
tions 2 through 4 of the Act of March 3, 1933 (41 U.S.C.
10a through 10c, popularly known as the ‘‘Buy American
Act’’).
(2) This subsection shall apply only to procurements
made for which—
(A) amounts are authorized by this Act, or by
any amendment made by this Act, to be made avail-
able; and
(B) solicitations for bids are issued after the
date of enactment of this Act.
(3) The Secretary, before January 1, 1995, shall re-
port to the Congress on procurements covered under this
subsection of products that are not domestic products.
(c) PURCHASE OF AMERICAN MADE EQUIPMENT AND
PRODUCTS.—
(1) SENSE OF CONGRESS.—It is the sense of
Congress that any recipient of a grant under this
Act, or under any amendment made by this Act,
should purchase only American made equipment and
products when expending grant monies.
(2) NOTICE TO RECIPIENTS OF ASSISTANCE.—
In allocating grants under this Act, or under any
amendment made by this Act, the Secretary shall
provide to each recipient a notice describing the
statement made in paragraph (1) by the Congress.
129
(d) DEFINITIONS.—For the purposes of this section,
the term ‘‘domestic product’’ means a product—
(1) that is manufactured or produced in the
United States; and
(2) at least 50 percent of the cost of the arti-
cles, materials, or supplies of which are mined, pro-
duced, or manufactured in the United States.
SEC. 411. NATIONAL QUALITY PROGRAM.
(a) ESTABLISHMENT.—There is established, under
the supervision of the Director, a National Quality Pro-
gram (in this section referred to as the ‘‘Program’’). The
purpose of the Program shall be to enhance the Malcolm
Baldrige National Quality Award, to disseminate informa-
tion, and to promote and take part in educational and re-
search activities regarding ways in which United States
companies and organizations can improve their quality
management practices and productivity.
(b) ACTIVITIES.—As part of the Program, the Direc-
tor is authorized—
(1) to develop industry-led workshops, semi-
nars, and other mechanisms to disseminate broadly
to United States companies and organizations the
best practices available in total quality management,
including the practices and quality improvement
strategies successfully employed by those firms that
130
have won the Malcolm Baldrige National Quality
Award, as well as best practices in lean production
methods, market-driven product improvement, and
customer-supplier relations;
(2) to work with industry leaders and others to
develop both measures of quality and recommenda-
tions concerning what skills employees should have
in order to participate effectively in company quality
programs; and
(3) to explore, with private industry, other Fed-
eral agencies, and State and local government, inno-
vative ways in which 2-year colleges and other edu-
cational institutions can teach quality assurance
techniques and related background skills to indus-
trial workers in both manufacturing and services.
SEC. 412. DEFINITIONS.
Title III of the Stevenson-Wydler Technology Innova-
tion Act of 1980, as added by title II and section 407
of this Act, is further amended by adding at the end the
following new section:
‘‘SEC. 306. DEFINITIONS.
‘‘For purposes of this title and title IV—
‘‘(1) the term ‘State’ means each of the several
States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, American
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Samoa, the Commonwealth of the Northern Mariana
Islands, and any other territory or possession of the
United States; and
‘‘(2) the term ‘United States’ means the several
States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, American
Samoa, the Commonwealth of the Northern Mariana
Islands, and any other territory or possession of the
United States.’’.
SEC. 413. FASTENER QUALITY ACT AMENDMENTS.
(a) REFERENCES.—Whenever in this section an
amendment is expressed in terms of an amendment to a
section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Fas-
tener Quality Act (15 U.S.C. 5401 et seq.).
(b) TECHNICAL AMENDMENTS.—
(1) DEFINITIONS.—Section 3 (15 U.S.C. 5402)
is amended—
(A) in paragraph (8), by striking ‘‘Stand-
ard’’ and inserting in lieu thereof ‘‘Standards’’;
and
(B) in paragraph (14), by striking ‘‘which
defines or describes’’ and all that follows
through ‘‘of any fastener’’.
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(2) 
INSPECTION
AND
TESTING.—Section
5(b)(1) (15 U.S.C. 5404(b)(1)) is amended by strik-
ing ‘‘section 6; unless’’ and inserting in lieu thereof
‘‘section 6, unless’’.
(3) IMPORTERS AND PRIVATE LABEL DISTRIBU-
TORS.—Section 7(c)(2) (15 U.S.C. 5406(c)(2)) is
amended by inserting ‘‘to the same’’ before ‘‘extent’’.
(c) CLARIFYING AMENDMENTS.—
(1) CHEMICAL TESTS.—(A) Section 5(a)(1)(B)
(15 U.S.C. 5404(a)(1)(B)) is amended by striking
‘‘subsections (b) and (c)’’ and inserting in lieu there-
of ‘‘subsections (b), (c), and (d)’’.
(B) 
Section 
5(a)(2)(A)(i) 
(15 
U.S.C.
5404(a)(2)(A)(i)) is amended by striking ‘‘sub-
sections (b) and (c)’’ and inserting in lieu thereof
‘‘subsections (b), (c), and (d)’’.
(C) Section 5(c)(4) (15 U.S.C. 5404(c)(4)) is
amended by inserting ‘‘except as provided in sub-
section (d),’’ before ‘‘state’’.
(D) Section 5 (15 U.S.C. 5404) is amended by
inserting at the end the following new subsection:
‘‘(d) ALTERNATIVE
PROCEDURE
FOR
CHEMICAL
CHARACTERISTICS.—Notwithstanding the requirements of
subsections (b) and (c), a manufacturer shall be deemed
to have demonstrated, for purposes of subsection (a)(1),