Subtitle B—Health and Education 
SEC. 
311. 
STUDY 
AND 
REPORT 
ON 
CATASTROPHIC 
HEALTHCARE. 
(a) STUDY.—The Secretary of Health and Human 
Services and the Secretary of Labor (in this subsection 
referred to as the ‘‘Secretaries’’) jointly shall conduct a 
study to explore methods for managing costs associated 
with catastrophic healthcare events and costs associated 
with chronic disease. The Secretaries shall work with 
healthcare providers, pharmaceutical manufacturers, large 
and small employers, health plans, and other interested 
private and public sector entities to develop a consensus 
regarding potential innovative approaches for reducing the 
financial risks presented by such health problems and im-
proving such outcomes. The study shall consider, among 
other factors, the role that best practices, health informa-
tion technology, evidence-based medicine, quality incen-
tives, and comparative clinical effectiveness research can 
play in improving quality, value, and efficiency throughout 
the United States healthcare system. 
(b) REPORT.—Not later than 1 year after the date 
of enactment of this Act, the Secretaries shall submit a 
report to Congress on the results of the study conducted 
under subsection (a), together with such recommendations
for administrative and legislative action as the Secretaries 
determine to be appropriate. 
SEC. 312. LIFELONG LEARNING ACCOUNTS. 
(a) STUDY.—The Secretary of the Treasury, in col-
laboration with the Secretary of Labor and the Secretary 
of Education, shall conduct a study with recommendations 
for establishing lifelong learning accounts which would be 
exempt from taxation under the Internal Revenue Code 
of 1986 and from which funds could only be used for edu-
cational or training purposes. Such study shall consider 
whether individuals should be allowed to transfer to such 
an account, without incurring tax liability or penalties, 
funds which are— 
(1) held in accounts established under a plan 
described in section 401(k), 403(b), or 457 of the 
Internal Revenue Code of 1986; and 
(2) held in a qualified tuition program under 
section 529 of such Code. 
(b) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Secretary of the Treasury 
shall submit to Congress a report on the study conducted 
under subsection (a).
Subtitle C—Savings and 
Investments 
SEC. 321. REGULATIONS RELATING TO PRIVATE FOUNDA-
TION SUPPORT OF INNOVATIONS IN ECO-
NOMIC DEVELOPMENT. 
The Secretary of the Treasury or the Secretary’s del-
egate shall as soon as practicable issue regulations under 
subchapter A of chapter 42 of the Internal Revenue Code 
of 1986 (relating to excise taxes on private foundations) 
which— 
(1) clearly identify when distributions by pri-
vate foundations for purposes of stimulating eco-
nomic development will be treated as made for an 
exempt purpose described in section 170(c)(2)(B) of 
such Code; and 
(2) clarify the circumstances under which pri-
vate foundations may make program-related invest-
ments described in section 4944(c) of such Code in 
start-up ventures. 
SEC. 322. ADVISORY GROUP REGARDING VALUATION OF IN-
TANGIBLES. 
(a) ESTABLISHMENT.—The Secretary of the Treas-
ury shall establish an advisory group consisting of rep-
resentatives of the public and private investment sector. 
The advisory group shall include representatives from the
Department of Commerce, the Securities and Exchange 
Commission, the Commodity Futures Trading Commis-
sion, the Board of Governors of the Federal Reserve Sys-
tem, the New York Stock Exchange, the National Associa-
tion of Securities Dealers Automatic Quotation System, 
and significant industry sectors. 
(b) DUTIES.—The advisory group established under 
subsection (a) shall— 
(1) examine and make recommendations of best 
practices for valuation of intangibles in order to— 
(A) provide investors with an improved 
method for assessing the impact intangibles 
have on the accuracy of a company’s financial 
picture; and 
(B) support industry trade associations in 
efforts to adopt guidelines for intangibles ap-
propriate to particular industry sections; and 
(2) submit to the Secretary of the Treasury a 
recommendation regarding whether a litigation safe 
harbor should be established for those companies 
that make good faith estimates regarding the value 
of intangibles under the best practice standards de-
veloped under paragraph (1). 
(c) RESEARCH NETWORK.—The Secretary of Com-
merce shall establish a research network of industry and
academic expertise to study metrics and solutions for in-
tangible disclosure, and provide such research results to 
the advisory group. 
(d) ACCOUNTING STANDARDS.—The Secretary of the 
Treasury and the advisory group shall encourage the Fi-
nancial Accounting Standards Board to reinstate its 
project on disclosure of information about intangible as-
sets not recognized in financial statements and to move 
expeditiously toward issuance of a statement of financial 
accounting standards concerning valuation and disclosure 
of key intangible assets. 
(e) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the advisory group shall sub-
mit to the Secretary of the Treasury the results of the 
examination under subsection (b)(1) and the recommenda-
tion under subsection (b)(2). 
TITLE IV—DEPARTMENT OF 
DEFENSE MATTERS 
Subtitle A—Defense Research and 
Education 
SEC. 401. REVITALIZATION OF FRONTIER AND MULTIDISCI-
PLINARY RESEARCH. 
It shall be the goal of the Department of Defense to 
allocate at least 3 percent of the total Department of De-
fense budget to science and technology. Of this amount,
it shall be the goal of the Department of Defense to allo-
cate at least 20 percent to basic research. 
SEC. 402. ENHANCEMENT OF EDUCATION. 
(a) SCIENCE, MATHEMATICS, AND RESEARCH FOR 
TRANSFORMATION (SMART) SCHOLARSHIPS.— 
(1) 
EXTENSION
OF
PROGRAM.—Section 
1105(a)(2) of the Ronald W. Reagan National De-
fense Authorization Act for Fiscal Year 2005 (Pub-
lic Law 108–375; 118 Stat. 2074; 10 U.S.C. 2192 
note) is amended by striking ‘‘for three years begin-
ning on the date of the enactment of this Act’’ and 
inserting ‘‘through September 30, 2011’’. 
(2) EXPANSION OF PROGRAM.—The Secretary 
of Defense shall, utilizing amounts authorized to be 
appropriated by paragraph (3), increase the number 
of participants in the Science, Mathematics, and Re-
search for Transformation (SMART) Defense Schol-
arship Pilot Program under section 1105 of the 
Ronald W. Reagan National Defense Authorization 
Act for Fiscal Year 2005 in each of fiscal years 
2007 through 2011— 
(A) by an additional 160 participants pur-
suing doctoral degrees in each such fiscal year; 
and
(B) by an additional 60 participants pur-
suing masters degrees in each such fiscal year. 
(3) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is hereby authorized to be appropriated to the 
Department of Defense for each of fiscal years 2007 
through 2011 the amount of $41,300,000 for pur-
poses of carrying out this subsection, of which— 
(A) $36,000,000 shall be available in each 
such fiscal year for additional participants in 
the Science, Mathematics, and Research for 
Transformation (SMART) Defense Scholarship 
Pilot Program who are pursuing doctoral de-
grees under paragraph (2)(A); and 
(B) $5,300,000 shall be available in each 
such fiscal year for additional participants in 
the Science, Mathematics, and Research for 
Transformation (SMART) Defense Scholarship 
Pilot Program who are pursuing masters de-
grees under paragraph (2)(B). 
(b) NATIONAL DEFENSE SCIENCE AND ENGINEER-
ING GRADUATE FELLOWSHIPS.— 
(1) EXPANSION OF PROGRAM.—The Secretary 
of Defense shall, utilizing amounts authorized to be 
appropriated by paragraph (2), increase the number 
of participants in the National Defense Science and
Engineering Graduate (NDSEG) fellowship program 
in each of fiscal years 2007 through 2011 by an ad-
ditional 200 participants in each such fiscal year. 
(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is hereby authorized to be appropriated to the 
Department of Defense for each of fiscal years 2007 
through 2011 the amount of $45,000,000 for pur-
poses of carrying out this subsection. 
(c) INSTITUTION-BASED TRAINEESHIPS.— 
(1) PROGRAM
REQUIRED.—The Secretary of 
Defense shall, utilizing amounts authorized to be ap-
propriated by paragraph (4), carry out a program to 
award, on a competitive basis, traineeships to under-
graduate and graduate students at institutions of 
higher education in order to permit such students to 
pursue studies in areas of importance to the Depart-
ment of Defense in mathematics, science, or engi-
neering in settings or programs that provide such 
students exposure to multidisciplinary studies, inno-
vation-oriented studies, and academic, private-sector, 
or government laboratories and research. It shall be 
the goal of the traineeship program for a trainee to 
work for the Department of Defense for 10 years 
after completing his or her degree.
(2) PARTICIPANTS.—In each of fiscal years 
2007 through 2011, the number of participants in 
the program required by paragraph (1) shall be as 
follows: 
(A) Not more than 30 participants pur-
suing doctoral degrees. 
(B) Not more than 30 participants pur-
suing masters degrees. 
(C) Not more than 20 participants pur-
suing undergraduate degrees. 
(3) ANNUAL REPORTS.—Not later than Novem-
ber 30 each year, the Secretary of Defense shall sub-
mit to the Committees on Armed Services of the 
Senate and the House of Representatives a report on 
the carrying out of the program required by para-
graph (1) during the preceding fiscal year. The re-
port shall describe the participants, and the studies 
pursued by such participants, in the program during 
the fiscal year covered by the report, and shall in-
clude an assessment of the benefits of the program 
to the Department of Defense. 
(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is hereby authorized to be appropriated to the 
Department of Defense for each of fiscal years 2007 
through 2011 the amount of $11,100,000 for pur-
poses of carrying out the program required by this 
subsection, of which— 
(A) $7,000,000 shall be available in each 
such fiscal year for participants in the program 
who are pursuing doctoral degrees under para-
graph (2)(A); 
(B) $2,600,000 shall be available in each 
such fiscal year for participants in the program 
who are pursuing masters degrees under para-
graph (2)(B); and 
(C) $1,500,000 shall be available in each 
such fiscal year for participants in the program 
who are pursuing undergraduate degrees under 
paragraph (2)(C). 
Subtitle B—Defense Advanced 
Manufacturing 
SEC. 411. MANUFACTURING RESEARCH AND DEVELOP-
MENT. 
(a) IDENTIFICATION OF ENHANCED PROCESSES AND 
TECHNOLOGIES.—The Under Secretary of Defense for 
Acquisition, Technology, and Logistics, acting through the 
Director of Defense Research and Engineering, shall iden-
tify advanced manufacturing processes and technologies 
whose utilization will achieve significant productivity and 
efficiency gains in the defense manufacturing base.
(b) RESEARCH
AND DEVELOPMENT.—The Under 
Secretary shall undertake research and development on 
processes and technologies identified under subsection (a) 
that addresses, in particular— 
(1) innovative manufacturing processes and ad-
vanced technologies; and 
(2) the creation of extended production enter-
prises using information technology and new busi-
ness models. 
(c) DEFENSE PRIORITIES.—In undertaking research 
and development under subsection (b), the Under Sec-
retary shall consider defense priorities established in the 
most current Joint Warfighting Science and Technology 
Plan. 
SEC. 412. TRANSITION OF TRANSFORMATIONAL MANUFAC-
TURING PROCESSES AND TECHNOLOGIES TO 
THE DEFENSE MANUFACTURING BASE. 
(a) ACCELERATION OF TRANSITION FROM SCIENCE 
AND TECHNOLOGY.— 
(1) IN GENERAL.—The Under Secretary of De-
fense for Acquisition, Technology, and Logistics 
shall undertake appropriate actions to accelerate the 
transition of transformational manufacturing tech-
nologies and processes (including processes and tech-
nologies identified under section 411) from the re-
search stage to utilization by manufacturers in the 
defense manufacturing base. 
(2) 
EXECUTION.—The 
actions 
undertaken 
under paragraph (1) shall include a memorandum of 
understanding among the Director of Defense Re-
search and Engineering, other appropriate elements 
of the Department of Defense, and the Joint De-
fense Manufacturing Technology Panel to accelerate 
the transition of technologies and processes as de-
scribed in that paragraph. 
(b) PROTOTYPES AND TEST BEDS.— 
(1) IN GENERAL.—The Under Secretary shall, 
utilizing the Manufacturing Technology Program, 
undertake the development of prototypes and test 
beds to promote the purposes of this section. 
(2) COORDINATION OF ACTIVITIES.—The Under 
Secretary shall coordinate activities under this sub-
section with activities under the Small Business In-
novation Research Program and the Small Business 
Technology Transfer Program. 
(c) DEVELOPMENT OF IMPROVEMENT PROCESS.— 
The Under Secretary shall, in consultation with persons 
and organizations in the defense manufacturing base, de-
velop and implement a program to continuously identify 
and utilize improvements and innovative processes in ap-
propriate defense acquisition programs and by manufac-
turers in the defense manufacturing base. 
(d) DIFFUSION OF ENHANCEMENTS INTO DEFENSE 
MANUFACTURING BASE.—The Under Secretary shall en-
sure the utilization in industry of enhancements in produc-
tivity and efficiency identified by reason of activities under 
this subtitle through the following: 
(1) Research and development activities under 
the Manufacturing Technology Program, including 
the establishment of public-private partnerships. 
(2) Outreach through the Manufacturing Ex-
tension Partnership Program under memoranda of 
agreement, cooperative programs, and other appro-
priate arrangements. 
(3) Coordination with activities under such 
other current programs for the dissemination of 
manufacturing technology as the Under Secretary 
considers appropriate. 
(4) Identification of incentives for contractors 
in the defense manufacturing base to incorporate 
and utilize manufacturing enhancements in manu-
facturing activities. 
SEC. 413. MANUFACTURING TECHNOLOGY STRATEGIES. 
(a) IN GENERAL.—The Under Secretary of Defense 
for Acquisition, Technology, and Logistics may—
(1) identify an area of technology where the de-
velopment of industry-prepared roadmaps for new 
manufacturing and technology processes applicable 
to defense manufacturing requirements would be 
beneficial to the Department of Defense; and 
(2) establish a task force, and act in coopera-
tion with the private sector, to map the strategy for 
the development of manufacturing processes and 
technologies needed to support technology develop-
ment in the area identified under paragraph (1). 
(b) COMMENCEMENT OF ROADMAPPING.—The Under 
Secretary shall commence any roadmapping identified 
pursuant to subsection (a)(1) not later than January 
2007. 
SEC. 414. PLANNING FOR ADOPTION OF STRATEGIC INNO-
VATION. 
(a) IN GENERAL.—The Secretary of Defense, acting 
through the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, shall ensure that each contract 
of a value of $50,000,000 or more under a technology or 
logistics program of the Department of Defense includes 
requirements for planning by the contractor under such 
contract for the adoption of innovative technologies under 
such contract.
(b) PARTICULAR
REQUIREMENTS.—The require-
ments included in a contract under subsection (a) shall 
include— 
(1) requirements for plans for the identifica-
tion, monitoring, and transition to the utilization 
under such contract of applicable emerging tech-
nologies from the private sector; 
(2) requirements for plans for the identifica-
tion, monitoring, and development under such con-
tract of emerging research initiatives in academia; 
and 
(3) a requirement to submit to the Under Sec-
retary on an annual basis a report on the implemen-
tation of the planning carried out pursuant to the 
requirements included in such contract. 
SEC. 415. REPORT. 
(a) IN GENERAL.—Not later than December 31, 
2008, the Under Secretary of Defense for Acquisition, 
Technology, and Logistics shall submit to the congres-
sional defense committees a report on the actions under-
taken by the Under Secretary under this subtitle during 
fiscal year 2007. 
(b) ELEMENTS.—The report under subsection (a) 
shall include—
(1) a comprehensive description of the actions 
undertaken under this subtitle during fiscal year 
2007; 
(2) an assessment of effectiveness of such ac-
tions in enhancing research and development on 
manufacturing technologies and processes, and the 
implementation of such technologies and processes 
within the defense manufacturing base; and 
(3) such recommendations as the Under Sec-
retary considers appropriate for additional actions to 
be undertaken in order to increase the effectiveness 
of the actions undertaken under this subtitle in en-
hancing manufacturing activities within the defense 
manufacturing base. 
SEC. 416. AUTHORIZATION OF APPROPRIATIONS. 
Funds are hereby authorized to be appropriated for 
the Department of Defense for purposes of carrying out 
this subtitle for fiscal years as follows: 
(1) For fiscal year 2007, $20,000,000. 
(2) For fiscal year 2008, $40,000,000. 
(3) For fiscal year 2009, $60,000,000. 
(4) For fiscal year 2010, $80,000,000. 
(5) For fiscal year 2011, $100,000,000.