Sec. 501. HOLLINGS MANUFACTURING EXTENSION PARTNERSHIP IMPROVEMENTS

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## SEC. 501 HOLLINGS MANUFACTURING EXTENSION PARTNERSHIP IMPROVEMENTS **[**[15 U.S.C. 271 note](/us/usc/t15/s271)**]** ###

(a)Short Title This section may be cited as the “Manufacturing Extension Partnership Improvement Act”. ###

(b)In general Section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k) is amended to read as follows: > > ## “SEC. 25 HOLLINGS MANUFACTURING EXTENSION PARTNERSHIP > > > ### “(a) Definitions > > In this section: > > > #### “(1) Appropriate committees of congress > > The term ‘**appropriate committees of Congress**’ means— > > > ##### “(A) > > the Committee on Commerce, Science, and Transportation of the Senate; and > > > ##### “(B) > > the Committee on Science, Space, and Technology of the House of Representatives. > > > #### “(2) Area career and technical education school > > The term ‘**area career and technical education school**’ has the meaning given the term in section 3 of the Vocational Education Act of 1963 (20 U.S.C. 2302). > > > #### “(3) Center > > The term ‘**Center**’ means a manufacturing extension center that— > > > ##### “(A) > > is created under subsection (b); and > > > ##### “(B) > > is affiliated with an eligible entity that applies for and is awarded financial support under subsection (e). > > > #### “(4) Community college > > The term ‘**community college**’ means an institution of higher education (as defined under section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))) at which the highest degree that is predominately awarded to students is an associate’s degree. > > > #### “(5) Eligible entity > > The term ‘**eligible entity**’ means a United States-based nonprofit institution, or consortium thereof, an institution of higher education, or a State, United States territory, local, or tribal government. > > > #### “(6) Hollings manufacturing extension partnership or program > > The term ‘**Hollings Manufacturing Extension Partnership**’ or ‘**Program**’ means the program established under subsection (b). > > > #### “(7) MEP Advisory Board > > The term ‘**MEP Advisory Board**’ means the Manufacturing Extension Partnership Advisory Board established under subsection (n). > > > ### “(b) Establishment and Purpose > > The Secretary, acting through the Director and, if appropriate, through other Federal officials, shall establish a program to provide assistance for the creation and support of manufacturing extension centers for the transfer of manufacturing technology and best business practices. > > > ### “(c) Objective > > The objective of the Program shall be to enhance competitiveness, productivity, and technological performance in United States manufacturing through— > > > #### “(1) > > the transfer of manufacturing technology and techniques developed at the Institute to Centers and, through them, to manufacturing companies throughout the United States; > > > #### “(2) > > the participation of individuals from industry, institutions of higher education, State governments, other Federal agencies, and, when appropriate, the Institute in cooperative technology transfer activities; > > > #### “(3) > > efforts to make new manufacturing technology and processes usable by United States-based small and medium-sized companies; > > > #### “(4) > > the active dissemination of scientific, engineering, technical, and management information about manufacturing to industrial firms, including small and medium-sized manufacturing companies; > > > #### “(5) > > the utilization, when appropriate, of the expertise and capability that exists in Federal agencies, other than the Institute, and federally-sponsored laboratories; > > > #### “(6) > > the provision to community colleges and area career and technical education schools of information about the job skills needed in manufacturing companies, including small and medium-sized manufacturing businesses in the regions they serve; > > > #### “(7) > > the promotion and expansion of certification systems offered through industry, associations, and local colleges when appropriate, including efforts such as facilitating training, supporting new or existing apprenticeships, and providing access to information and experts, to address workforce needs and skills gaps in order to assist small- and medium-sized manufacturing businesses; and > > > #### “(8) > > the growth in employment and wages at United States-based small and medium-sized companies. > > > ### “(d) Activities > > The activities of a Center shall include— > > > #### “(1) > > the establishment of automated manufacturing systems and other advanced production technologies, based on Institute-supported research, for the purpose of demonstrations and technology transfer; > > > #### “(2) > > the active transfer and dissemination of research findings and Center expertise to a wide range of companies and enterprises, particularly small and medium-sized manufacturers; and > > > #### “(3) > > the facilitation of collaborations and partnerships between small and medium-sized manufacturing companies, community colleges, and area career and technical education schools, to help those entities better understand the specific needs of manufacturers and to help manufacturers better understand the skill sets that students learn in the programs offered by such colleges and schools. > > > ### “(e) Financial Assistance > > > #### “(1) Authorization > > Except as provided in paragraph (2), the Secretary may provide financial assistance for the creation and support of a Center through a cooperative agreement with an eligible entity. > > > #### “(2) Cost sharing > > The Secretary may not provide more than 50 percent of the capital and annual operating and maintenance funds required to establish and support a Center. > > > #### “(3) Rule of construction > > For purposes of paragraph (2), any amount received by an eligible entity for a Center under a provision of law other than paragraph

(1)shall not be considered an amount provided under paragraph (1). > > > #### “(4) Regulations > > The Secretary may revise or promulgate such regulations as necessary to carry out this subsection. > > > ### “(f) Applications > > > #### “(1) In general > > An eligible entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require. > > > #### “(2) Program description > > The Secretary shall establish and update, as necessary— > > > ##### “(A) > > a description of the Program; > > > ##### “(B) > > the application procedures; > > > ##### “(C) > > performance metrics; > > > ##### “(D) > > criteria for determining qualified applicants; and > > > ##### “(E) > > criteria for choosing recipients of financial assistance from among the qualified applicants. > > > ##### “(F) > > procedures for determining allowable cost share contributions; and > > > ##### “(G) > > such other program policy objectives and operational procedures as the Secretary considers necessary. > > > #### “(3) Cost sharing > > > ##### “(A) In general > > To be considered for financial assistance under this section, an applicant shall provide adequate assurances that the applicant and if applicable, the applicant’s partnering organizations, will obtain funding for not less than 50 percent of the capital and annual operating and maintenance funds required to establish and support the Center from sources other than the financial assistance provided under subsection (e). > > > ##### “(B) Agreements with other entities > > In meeting the cost-sharing requirement under subparagraph (A), an eligible entity may enter into an agreement with 1 or more other entities, such as a private industry, institutions of higher education, or a State, United States territory, local, or tribal government for the contribution by that other entity of funding if the Secretary determines the agreement— > > > ###### “(i) > > is programmatically reasonable; > > > ###### “(ii) > > will help accomplish programmatic objectives; and > > > ###### “(iii) > > is allocable under Program procedures under subsection (f)(2). > > > #### “(4) Legal rights > > Each applicant shall include in the application a proposal for the allocation of the legal rights associated with any intellectual property which may result from the activities of the Center. > > > #### “(5) Merit review of applications > > > ##### “(A) In general > > The Secretary shall subject each application to merit review. > > > ##### “(B) Considerations > > In making a decision whether to approve an application and provide financial assistance under subsection (e), the Secretary shall consider, at a minimum— > > > ###### “(i) > > the merits of the application, particularly those portions of the application regarding technology transfer, training and education, and adaptation of manufacturing technologies to the needs of particular industrial sectors; > > > ###### “(ii) > > the quality of service to be provided; > > > ###### “(iii) > > the geographical diversity and extent of the service area; and > > > ###### “(iv) > > the type and percentage of funding and in-kind commitment from other sources under paragraph (3). > > > ### “(g) Evaluations > > > #### “(1) Third and eighth year evaluations by panel > > > ##### “(A) In general > > The Secretary shall ensure that each Center is evaluated during its third and eighth years of operation by an evaluation panel appointed by the Secretary. > > > ##### “(B) Composition > > The Secretary shall ensure that each evaluation panel appointed under subparagraph

(A)is composed of— > > > ###### “(i) > > private experts, none of whom are connected with the Center evaluated by the panel; and > > > ###### “(ii) > > Federal officials. > > > ##### “(C) Chairperson > > For each evaluation panel appointed under subparagraph (B), the Secretary shall appoint a chairperson who is an official of the Institute. > > > #### “(2) Fifth year evaluations by secretary > > In the fifth year of operation of a Center, the Secretary shall conduct a review of the Center. > > > #### “(3) Performance measurement > > In evaluating a Center an evaluation panel or the Secretary, as applicable, shall measure the performance of the Center against— > > > ##### “(A) > > the objective specified in subsection (c); > > > ##### “(B) > > the performance metrics under subsection (f)(2)(C); and > > > ##### “(C) > > such other criterion as considered appropriate by the Secretary. > > > #### “(4) Positive evaluations > > If an evaluation of a Center is positive, the Secretary may continue to provide financial assistance for the Center— > > > ##### “(A) > > in the case of an evaluation occurring in the third year of a Center, through the fifth year of the Center; > > > ##### “(B) > > in the case of an evaluation occurring in the fifth year of a Center, through the eighth year of the Center; and > > > ##### “(C) > > in the case of an evaluation occurring in the eighth year of a Center, through the tenth year of the Center. > > > #### “(5) Other than positive evaluations > > > ##### “(A) Probation > > If an evaluation of a Center is other than positive, the Secretary shall put the Center on probation during the period beginning on the date that the Center receives notice under subparagraph (B)(i) and ending on the date that the reevaluation is complete under subparagraph (B)(iii). > > > ##### “(B) Notice and reevaluation > > If a Center receives an evaluation that is other than positive, the evaluation panel or Secretary, as applicable, shall— > > > ###### “(i) > > notify the Center of the reason, including any deficiencies in the performance of the Center identified during the evaluation; > > > ###### “(ii) > > assist the Center in remedying the deficiencies by providing the Center, not less frequently than once every 3 months, an analysis of the Center, if considered appropriate by the panel or Secretary, as applicable; and > > > ###### “(iii) > > reevaluate the Center not later than 1 year after the date of the notice under clause (i). > > > ##### “(C) Continued support during period of probation > > > ###### “(i) In general > > The Secretary may continue to provide financial assistance under subsection

(e)for a Center during the probation period. > > > ###### “(ii) Post probation > > After the period of probation, the Secretary shall not provide any financial assistance unless the Center has received a positive evaluation under subparagraph (B)(iii). > > > #### “(6) Failure to remedy > > > ##### “(A) In general > > If a Center fails to remedy a deficiency or to show significant improvement in performance before the end of the probation period under paragraph (5), the Secretary shall conduct a competition to select an operator for the Center under subsection (h). > > > ##### “(B) Treatment of centers subject to new competition > > Upon the selection of an operator for a Center under subsection (h), the Center shall be considered a new Center and the calculation of the years of operation of that Center for purposes of paragraphs

(1)through

(5)of this subsection and subsection (h)(1) shall start anew. > > > ### “(h) Reapplication Competition for Financial Assistance After 10 Years > > > #### “(1) In general > > If an eligible entity has operated a Center under this section for a period of 10 consecutive years, the Secretary shall conduct a competition to select an eligible entity to operate the Center in accordance with the process plan under subsection (i). > > > #### “(2) Incumbent eligible entities > > An eligible entity that has received financial assistance under this section for a period of 10 consecutive years and that the Secretary determines is in good standing shall be eligible to compete in the competition under paragraph (1). > > > #### “(3) Treatment of centers subject to reapplication competition > > Upon the selection of an operator for a Center under paragraph (1), the Center shall be considered a new Center and the calculation of the years of operation of that Center for purposes of paragraphs

(1)through

(5)of subsection

(g)shall start anew. > > > ### “(i) Process Plan > > Not later than 180 days after the date of the enactment of the American Innovation and Competitiveness Act, the Secretary shall implement and submit to Congress a plan for how the Institute will conduct an evaluation, competition, and reapplication competition under this section. > > > ### “(j) Operational Requirements > > > #### “(1) Protection of confidential information of center clients > > The following information, if obtained by the Federal Government in connection with an activity of a Center or the Program, shall be exempt from public disclosure under section 552 of title 5, United States Code: > > > ##### “(A) > > Information on the business operation of any participant in the Program or of a client of a Center. > > > ##### “(B) > > Trade secrets of any client of a Center. > > > ### “(k) Oversight Boards > > > #### “(1) In general > > As a condition on receipt of financial assistance for a Center under subsection (e), an eligible entity shall establish a board to oversee the operations of the Center. > > > #### “(2) Standards > > > ##### “(A) In general > > The Director shall establish appropriate standards for each board described under paragraph (1). > > > ##### “(B) Considerations > > In establishing the standards, the Director shall take into account the type and organizational structure of an eligible entity. > > > ##### “(C) Requirements > > The standards shall address— > > > ###### “(i) > > membership; > > > ###### “(ii) > > composition; > > > ###### “(iii) > > term limits; > > > ###### “(iv) > > conflicts of interest; and > > > ###### “(v) > > such other requirements as the Director considers necessary. > > > #### “(3) Membership > > > ##### “(A) In general > > Each board established under paragraph

(1)shall be composed of members as follows: > > > ###### “(i) > > The membership of each board shall be representative of stakeholders in the region in which the Center is located. > > > ###### “(ii) > > A majority of the members of the board shall be selected from among individuals who own or are employed by small or medium-sized manufacturers. > > > ##### “(B) Limitation > > A member of a board established under paragraph

(1)may not serve on more than 1 board established under that paragraph. > > > #### “(4) Bylaws > > > ##### “(A) In general > > Each board established under paragraph

(1)shall adopt and submit to the Director bylaws to govern the operation of the board. > > > ##### “(B) Conflicts of Interest > > Bylaws adopted under subparagraph

(A)shall include policies to minimize conflicts of interest, including such policies relating to disclosure of relationships and recusal as may be necessary to minimize conflicts of interest. > > > ### “(l) Acceptance of Funds > > In addition to such sums as may be appropriated to the Secretary and Director to operate the Program, the Secretary and Director may also accept funds from other Federal departments and agencies and from the private sector under section 2(c)(7) of this Act (15 U.S.C. 272(c)(7)), to be available to the extent provided by appropriations Acts, for the purpose of strengthening United States manufacturing. > > > ### “(m) MEP advisory board > > > #### “(1) Establishment > > There is established within the Institute a Manufacturing Extension Partnership Advisory Board. > > > #### “(2) Membership > > > ##### “(A) Composition > > > ###### “(i) In general > > The MEP Advisory Board shall consist of not fewer than 10 members appointed by the Director and broadly representative of stakeholders. > > > ###### “(ii) Requirements > > Of the members appointed under clause (i)— > > > ###### “(I) > > at least 2 members shall be employed by or on an advisory board for a Center; > > > ###### “(II) > > at least 5 members shall be from United States small businesses in the manufacturing sector; and > > > ###### “(III) > > at least 1 member shall represent a community college. > > > ###### “(iii) Limitation > > No member of the MEP Advisory Board shall be an employee of the Federal Government. > > > ##### “(B) Term > > Except as provided in subparagraph (C), the term of office of each member of the MEP Advisory Board shall be 3 years. > > > ##### “(C) Vacancies > > Any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term. > > > ##### “(D) Serving consecutive terms > > Any person who has completed 2 consecutive full terms of service on the MEP Advisory Board shall thereafter be ineligible for appointment during the 1-year period following the expiration of the second such term. > > > #### “(3) Meetings > > The MEP Advisory Board shall— > > > ##### “(A) > > meet not less than biannually; and > > > ##### “(B) > > provide to the Director— > > > ###### “(i) > > advice on the activities, plans, and policies of the Program; > > > ###### “(ii) > > assessments of the soundness of the plans and strategies of the Program; and > > > ###### “(iii) > > assessments of current performance against the plans of the Program. > > > #### “(4) FACA applicability > > > ##### “(A) In general > > In discharging its duties under this subsection, the MEP Advisory Board shall function solely in an advisory capacity, in accordance with the Federal Advisory Committee Act (5 U.S.C. App.). > > > ##### “(B) Exception > > Section 14 of the Federal Advisory Committee Act shall not apply to the MEP Advisory Board. > > > #### “(5) Annual report > > > ##### “(A) In general > > At a minimum, the MEP Advisory Board shall transmit an annual report to the Secretary for transmittal to Congress not later than 30 days after the submission to Congress of the President’s annual budget under section 1105 of title 31, United States Code. > > > ##### “(B) Contents > > The report shall address the status of the Program and describe the relevant sections of the programmatic planning document and updates thereto transmitted to Congress by the Director under subsections

(c)and

(d)of section 23 (15 U.S.C. 278i). > > > ### “(n) Small Manufacturers > > > #### “(1) Evaluation of obstacles > > As part of the Program, the Director shall— > > > ##### “(A) > > identify obstacles that prevent small manufacturers from effectively competing in the global market; > > > ##### “(B) > > implement a comprehensive plan to train the Centers to address the obstacles identified in paragraph (2); and > > > ##### “(C) > > facilitate improved communication between the Centers to assist such manufacturers in implementing appropriate, targeted solutions to the obstacles identified in paragraph (2). > > > #### “(2) Development of open access resources > > As part of the Program, the Secretary shall develop open access resources that address best practices related to inventory sourcing, supply chain management, manufacturing techniques, available Federal resources, and other topics to further the competitiveness and profitability of small manufacturers.” > . ###

(c)Competitive Awards Program The National Institute of Standards and Technology Act (15 U.S.C. 271 et seq.) is amended by inserting after section 25 the following: > > ## “SEC. 25A COMPETITIVE AWARDS PROGRAM > > **[**[15 U.S.C. 278k-1](/us/usc/t15/s278k-1)**]** > > > ### “(a) Establishment > > The Director shall establish within the Hollings Manufacturing Extension Partnership under section 25 (15 U.S.C. 278k) and section 26 (15 U.S.C. 278l) a program of competitive awards among participants described in subsection

(b)of this section for the purposes described in subsection (c). > > > ### “(b) Participants > > Participants receiving awards under this section shall be Centers, or a consortium of Centers. > > > ### “(c) Purpose, Themes, and Reimbursement > > > #### “(1) Purpose > > The purpose of the program established under subsection

(a)is to add capabilities to the Hollings Manufacturing Extension Partnership, including the development of projects to solve new or emerging manufacturing problems as determined by the Director, in consultation with the Director of the Hollings Manufacturing Extension Partnership, the MEP Advisory Board, other Federal agencies, and small and medium-sized manufacturers. > > > #### “(2) Themes > > The Director may identify 1 or more themes for a competition carried out under this section, which may vary from year to year, as the Director considers appropriate after assessing the needs of manufacturers and the success of previous competitions. > > > #### “(3) Reimbursement > > Centers may be reimbursed for costs incurred by the Centers under this section. > > > ### “(d) Applications > > Applications for awards under this section shall be submitted in such manner, at such time, and containing such information as the Director shall require in consultation with the MEP Advisory Board. > > > ### “(e) Selection > > > #### “(1) Peer review and competitively awarded > > The Director shall ensure that awards under this section are peer reviewed and competitively awarded. > > > #### “(2) Geographic diversity > > The Director shall endeavor to have broad geographic diversity among selected proposals. > > > #### “(3) Criteria > > The Director shall select applications to receive awards that the Director determines will achieve 1 or more of the following: > > > ##### “(A) > > Improve the competitiveness of industries in the region in which the Center or Centers are located. > > > ##### “(B) > > Create jobs or train newly hired employees. > > > ##### “(C) > > Promote the transfer and commercialization of research and technology from institutions of higher education, national laboratories or other federally funded research programs, and nonprofit research institutes. > > > ##### “(D) > > Recruit a diverse manufacturing workforce, including through outreach to underrepresented populations, including individuals identified in section 33 or section 34 of the Science and Engineering Equal Opportunities Act (42 U.S.C. 1885a, 1885b). > > > ##### “(E) > > Such other result as the Director determines will advance the objective set forth in section 25(c) (15 U.S.C. 278k) or in section 26 (15 U.S.C. 278l). > > > ### “(f) Program Contribution > > Recipients of awards under this section shall not be required to provide a matching contribution. > > > ### “(g) Global Marketplace Projects > > In making an award under this section, the Director, in consultation with the MEP Advisory Board and the Secretary, may take into consideration whether an application has significant potential for enhancing the competitiveness of small and medium-sized United States manufacturers in the global marketplace. > > > ### “(h) Duration > > The duration of an award under this section shall be for not more than 3 years. > > > ### “(i) Definitions > > The terms used in this section have the meanings given the terms in section 25 (15 U.S.C. 278k).” > . ###

(d)Reports ####

(1)In general Not later than 2 years after the date of enactment of this Act, the Comptroller General of the United States, in consultation with the MEP Advisory Board (as defined in section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k)), shall submit to the appropriate committees of Congress a report analyzing— #####

(A)the effectiveness of the changes in the cost share to Centers under section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k); #####

(B)the engagement in services and the characteristics of services provided by 2 types of Centers, including volume and type of service; and #####

(C)whether the cost-sharing ratio has any effect on the services provided by either type of Center. ####

(2)Independent assessment #####

(A)In general Not later than 3 years after the date of submission of the report under paragraph (1), the Director of NIST shall contract with an independent organization to perform an assessment of the implementation of the reapplication competition process. #####

(B)Consultation The independent organization performing the assessment under subparagraph

(A)may consult with the MEP Advisory Board (as defined in section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k)). ####

(3)Comparison of centers #####

(A)In general Not later than 2 years after the date of enactment of this Act, the Director shall submit to the appropriate committees of Congress a report providing information on the first and second years of operations for Centers (as defined in section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k)) operating from new competitions or recompetition as compared to longstanding Centers. #####

(B)Contents The report shall provide detail on the engagement in services provided by Centers and the characteristics of services provided, including volume and type of services, so that the appropriate committees of Congress can evaluate whether the cost-sharing ratio has an effect on the services provided at Centers. ###

(e)Conforming amendments ####

(1)Definitions Section 2199(3) of title 10, United States Code, is amended— #####

(A)by striking “regional center” and inserting “manufacturing extension center”; #####

(B)by inserting “and best business practices” before “referred”; and #####

(C)by striking “25(a)” and inserting “25(b)”. ####

(2)Enterprise integration initiative Section 3(a) of the Enterprise Integration Act of 2002 (15 U.S.C. 278g-5(a)) is amended by inserting “Hollings” before “Manufacturing Extension Partnership”. ####

(3)Assistance to state technology programs Section 26(a) of the National Institute of Standards and Technology Act (15 U.S.C. 278l(a)) is amended by striking “Centers program created” and inserting “Hollings Manufacturing Extension Partnership”. ###

(f)Savings Provisions **[**[15 U.S.C. 278k note](/us/usc/t15/s278k)**]** Notwithstanding the amendments made by subsections

(a)and

(b)of this section, the Secretary of Commerce may carry out section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k) as that section was in effect on the day before the date of enactment of this Act, with respect to existing grants, agreements, cooperative agreements, or contracts, and with respect to applications for such items that are received by the Secretary prior to the date of enactment of this Act. ###

(g)Patent Rights **[**[15 U.S.C. 278k note](/us/usc/t15/s278k)**]** The provisions of chapter 18 of title 35, United States Code, shall apply, to the extent not inconsistent with section 25 of the National Institute of Standards and Technology Act (15 U.S.C. 278k) and section 25 of that Act, to the promotion of technology from research by Centers under those sections, except for contracts for such specific technology extension or transfer services as may be specified by the Director of NIST or under other law. # TITLE VI INNOVATION AND TECHNOLOGY TRANSFER

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