To authorize the National Science Foundation to carry out a pilot program to award innovation inducement cash prizes in areas of research funded by the National Science Foundation.

SECTION 1. PRIZE AWARDS.

    (a) In General.--The Director of the National Science Foundation 
shall carry out a pilot program to award innovation inducement cash 
prizes in any area of research supported by the Foundation. The 
Director may carry out a program of cash prizes only in conformity with 
this section.
    (b) Topics.--In identifying topics for prize competitions under 
this section, the Director shall--
            (1) consult widely both within and outside the Federal 
        Government;
            (2) give priority to high-risk, high-reward research 
        challenges and to problems whose solution could improve the 
        economic competitiveness of the United States; and
            (3) give consideration to the extent to which the topics 
        have the potential to raise public awareness about federally 
        sponsored research.
    (c) Types of Contests.--The Director shall consider all categories 
of innovation inducement prizes, including--
            (1) contests in which the award is to the first team or 
        individual who accomplishes a stated objective; and
            (2) contests in which the winner is the team or individual 
        who comes closest to achieving an objective within a specified 
        time.
    (d) Advertising and Announcement.--
            (1) Advertising and solicitation of competitors.--The 
        Director shall widely advertise prize competitions to encourage 
        broad participation, including by individuals, institutions of 
        higher education, nonprofit organizations, and businesses.
            (2) Announcement through federal register notice.--The 
        Director shall announce each prize competition by publishing a 
        notice in the Federal Register. This notice shall include the 
        subject of the competition, the duration of the competition, 
        the eligibility requirements for participation in the 
        competition, the process for participants to register for the 
        competition, the amount of the prize, and the criteria for 
        awarding the prize, including the method by which the prize 
        winner or winners will be selected.
            (3) Time to announcement.--The Director shall announce a 
        prize competition within 18 months after receipt of 
        appropriated funds.
    (e) Funding.--
            (1) Funding sources.--Prizes under this Act shall consist 
        of Federal appropriated funds and any funds raised pursuant to 
        donations authorized under section 11(f) of the National 
        Science Foundation Act of 1950 (42 U.S.C. 1870(f)) for specific 
        prize competitions.
            (2) Announcement of prizes.--The Director may not issue a 
        notice as required by subsection (d)(2) until all of the funds 
        needed to pay out the announced amount of the prize have been 
        appropriated or committed in writing by another entity pursuant 
        to paragraph (1).
    (f) Eligibility.--To be eligible to win a prize under this section, 
an individual or entity--
            (1) shall have complied with all of the requirements under 
        this section;
            (2) in the case of a private entity, shall be incorporated 
        in and maintain a primary place of business in the United 
        States, and in the case of an individual, whether participating 
        singly or in a group, shall be a United States citizen or 
        national, or an alien lawfully admitted to the United States 
        for permanent residence; and
            (3) shall not be a Federal entity, a Federal employee 
        acting within the scope of his or her employment, or a person 
        employed at a Federal laboratory acting within the scope of his 
        or her employment.
    (g) Awards.--
            (1) Number of competitions.--The Director may announce up 
        to 5 prize competitions through the end of fiscal year 2013.
            (2) Size of award.--The Director may determine the amount 
        of each prize award based on the prize topic, but no award 
        shall be less than $1,000,000 or greater than $3,000,000.
            (3) Selecting winners.--The Director may convene an expert 
        panel to select a winner of a prize competition. If the panel 
        is unable to select a winner, the Director shall determine the 
        winner of the prize.
            (4) Public outreach.--The Director shall publicly award 
        prizes utilizing the Foundation's existing public affairs and 
        public outreach resources.
    (h) Administering the Competition.--The Director may enter into an 
agreement with a private, nonprofit entity to administer the prize 
competition, subject to the provisions of this section.
    (i) Intellectual Property.--The Federal Government shall not, by 
virtue of offering or awarding a prize under this section, be entitled 
to any intellectual property rights derived as a consequence of, or in 
direct relation to, the participation by a registered participant in a 
competition authorized by this section. This subsection shall not be 
construed to prevent the Federal Government from negotiating a license 
for the use of intellectual property developed for a prize competition 
under this section.
    (j) Liability.--The Director may require a registered participant 
in a prize competition under this section to waive liability against 
the Federal Government for injuries and damages that result from 
participation in such competition.
    (k) Nonsubstitution.--Any programs created under this section shall 
not be considered a substitute for Federal research and development 
programs.
    (l) Reporting Requirement.--Not later than 5 years after the date 
of enactment of this Act, the National Science Board shall transmit to 
Congress a report containing the results of a review and assessment of 
the pilot program under this section, including--
            (1) a description of the nature and status of all completed 
        or ongoing prize competitions carried out under this section, 
        including any scientific achievements, publications, 
        intellectual property, or commercialized technology that 
        resulted from such competitions;
            (2) any recommendations regarding changes to, the 
        termination of, or continuation of the pilot program;
            (3) an analysis of whether the program is attracting 
        contestants more diverse than the Foundation's traditional 
        academic constituency;
            (4) an analysis of whether public awareness of innovation 
        or of the goal of the particular prize or prizes is enhanced;
            (5) an analysis of whether the Foundation's public image or 
        ability to increase public scientific literacy is enhanced 
        through the use of innovation inducement prizes; and
            (6) an analysis of the extent to which private funds are 
        being used to support registered participants.
    (m) Early Termination of Contests.--The Director shall terminate a 
prize contest before any registered participant wins if the Director 
determines that an unregistered entity has produced an innovation that 
would otherwise have qualified for the prize award.
    (n) Authorization of Appropriations.--
            (1) In general.--
                    (A) Awards.--There are authorized to be 
                appropriated to the Director for the period 
                encompassing fiscal years 2011 through 2013 $12,000,000 
                for carrying out this section.
                    (B) Administration.--Of the amounts authorized in 
                subparagraph (A), not more than 15 percent for each 
                fiscal year shall be available for the administrative 
                costs of carrying out this section.
            (2) Carryover of funds.--Funds appropriated for prize 
        awards under this section shall remain available until 
        expended, and may be transferred, reprogrammed, or expended for 
        other purposes as authorized by law only after the expiration 
        of 7 fiscal years after the fiscal year for which the funds 
        were originally appropriated. No provision in this section 
        permits obligation or payment of funds in violation of section 
        1341 of title 31 of the United States Code (commonly referred 
        to as the Anti-Deficiency Act).

Summary: Requires the Director of the National Science Foundation (NSF) to carry out a pilot program for awarding innovation inducement cash prizes in any area of research supported by NSF.

Instructs the Director, in identifying topics for prize competitions to be held under such program, to: (1) consult widely within and outside of the federal government; (2) give priority to high-risk, high-reward research challenges and to problems whose solution could improve the economic competitiveness of the United States; and (3) give consideration to the extent to which the topics have the potential to raise public awareness about federally sponsored research.

Sets forth provisions with regard to the types of contests, advertising and announcements, funding, and eligibility for prizes competitions under this Act.

Authorizes the Director to: (1) announce up to five prize competitions through FY2013; (2) set the amount of each prize award based on the prize topic; and (3) convene an expert panel to select the winners of prize competitions.

Allows the Director to enter into an agreement with a private, nonprofit entity to administer a prize competition.