IN THE SENATE OF THE UNITED STATES
January 31, 2011
Ms. Klobuchar (for herself and Mr. Brown of Massachusetts) introduced the following bill; which was read twice and referred to the Committee on Finance
To support innovation, and for other purposes.
Short title; table of contents
This Act may be cited
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I—Research and Development
Sec. 101. Simplification of tax credit for contributions to universities for research and development purposes.
Sec. 102. Credit for charitable contributions of equipment to secondary schools and technical and community colleges.
TITLE II—Lending to small- and medium-sized high growth technology companies
Sec. 201. Innovative Technology Development Loan Guarantee Program.
Sec. 301. Definitions.
Sec. 302. Increasing funding for STEM secondary schools.
Sec. 303. Grants to institutions of higher education for retaining STEM students.
Sec. 304. Expanding undergraduate research opportunities.
Sec. 305. Internet website promoting commercialization of technology ideas invented by federally funded researchers.
Sec. 306. Technology Commercialization Awards Pilot Program.
TITLE IV—Manufacturing and export promotions
Sec. 401. Manufacturing assistance program for small- and medium-sized manufacturers in the United States.
Sec. 402. Removing barriers for exporting industries in the United States.
Sec. 403. Improving access to international markets.
Sec. 501. Limitation on Government printing costs.
Sec. 502. Eliminating bonuses for poor performance by Government contractors.
Congress finds the following:
Innovation has historically been a catalyzing force in the American economy, driving the production of game-changing technologies, the creation of millions of jobs and the opening of countless new avenues for growth. In an increasingly competitive global economy, our Nation’s continued leadership and prosperity will hinge on progress in key innovative areas, most notably exporting, entrepreneurship, research and development, and education in science, technology, engineering, and mathematics (STEM);
Start-up companies create the lion’s share of new technologies. Increasing the flow of capital to these firms would bridge the gap that often exists between their initial startup costs and their long-term capital needs, giving the firms the resources necessary to research, develop and commercialize new products.
Simplifying, expanding and stabilizing the tax credits that businesses and institutions of higher education rely on to offset the cost of research and would promote greater clarity in the Internal Revenue Code of 1986 and deliver a powerful incentive for private sector innovation.
Increasing the emphasis on STEM education in high schools and institutions of higher education would ensure that more students have the skills and training to not only compete for jobs in a 21st century economy, but also to create the startup companies and revolutionary technologies that will sustain American prosperity for centuries to come.
An effective regulatory climate should protect consumers and promote transparency without overburdening the businesses that create jobs. Federal agencies with rulemaking authority should be vigilant in assessing the impact of new regulations on innovation and job creation, particularly in anchor industries like manufacturing.
The economic impact of a new product or technology is often dependent on its commercial success. To ensure American products can be bought and sold in markets around the world, the government should identify and remove over burdensome regulations that create barriers for United States exporting companies.
Comprehensive and fair trade agreements are vital to the United States’ ability to export. The Federal Government should ardently work towards ratifying trade agreements with foreign countries that benefit the citizens and industries of the United States.
Research and Development
Simplification of tax credit for contributions to universities for research and development purposes
Subparagraph (A) of section 41(e)(7) of the Internal
Revenue Code of 1986 (defining basic research) is amended by striking
not having a specific commercial objective.
The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Credit for charitable contributions of equipment to secondary schools and technical and community colleges
Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
Credit for charitable contributions of equipment to secondary schools and technical and community colleges
For purposes of section 38, the charitable equipment contribution credit determined under this section for any taxable year is an amount equal to 30 percent of the fair market value (determined at the time of the contribution) of any qualified equipment which is contributed by the taxpayer to a secondary school, technical college, or community college.
For purposes of this section, the term qualified equipment means any tangible personal property described in paragraph (1) of section 1221(a), but only if—
the property is purchased, constructed, or assembled by the taxpayer,
the property is equipment or apparatus substantially all of the use of which by the donee is for research or experimentation, research training, or education in science or technology,
the property is suitable for use in the donee's research or experimentation or educational programs,
the property is not transferred by the donee in exchange for money, other property, or services, and
the taxpayer receives from the donee a written statement representing that its use and disposition of the property will be in accordance with the provisions of paragraphs (2), (3), and (4).
Gain not taken into account
The amount of any contribution of qualified equipment otherwise taken into account under subsection (a) shall be reduced, but not below zero, by the sum of—
1/2 of the amount of any gain which would not have been long-term capital gain (determined without regard to section 1221(b)(3)) if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of such contribution), and
the amount, if any, by which the amount of such contribution (determined by taking into account paragraph (1) but without regard to this paragraph) exceeds twice the taxpayer's basis in the qualified equipment.
For purposes of this section—
The term secondary school has the meaning given such term by section 9101 of the Elementary and Secondary Education Act of 1965.
The term technical college means a postsecondary vocational institution (as defined in section 102(c) of the Higher Education Act of 1965).
The term community college means a junior or community college (as defined in section 312 of the Higher Education Act of 1965).
Denial of double benefit
No deduction shall be allowed under section 170 for any contribution for which a credit is allowed under this section.
Credit treated as part of general business credit
Section 38(b) of the Internal Revenue Code of 1986 is amended—
plus at the end of paragraph (35),
by striking the
period at the end of paragraph (36) and inserting
by adding at the end the following new paragraph:
the charitable equipment contribution credit determined under section 45S(a).
The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Sec. 45S. Credit for charitable contributions of equipment to secondary schools and technical and community colleges.
The amendments made by this section shall apply to contributions made after December 31, 2010.
Lending to small- and medium-sized high growth technology companies
Innovative Technology Development Loan Guarantee Program
In this section:
The term clean technology means—
technology that improves energy efficiency, including—
technologies to reduce energy consumption;
energy-efficient building technologies and applications; and
efficient electricity transmission, distribution, and electrical grid-based storage;
technology relating to energy storage;
fuel cells and batteries; and
component technologies for electric vehicles.
The term renewable energy means energy generated from any of the following:
Solar, wind, geothermal, or ocean based sources.
Biomass, biofuels, or feedstock.
Municipal solid waste.
Hydropower that has been certified by the Low Impact Hydropower Institute
Small- or medium-size high growth technology company
The term small- or medium-sized high growth technology company means a small business concern that primarily engages in commerce in 1 or more of the following industries:
Renewable energy generation and manufacturing.
Such other industries as the Secretary considers appropriate.
Except as otherwise provided, the term Secretary means the Secretary of Commerce.
Small business concern
The term small business concern has the meaning given that term under section 3(a) of the Small Business Act (15 U.S.C. 632(a)).
Establishment of Innovative Product Loan Guarantee Program
The Secretary shall establish a loan guarantee program to help small- and medium-sized high growth technology companies who the Secretary determines—
are operating in a phase of the business life cycle in which technological, market, or regulatory uncertainty constrains the amount of capital available from lenders and equity investors to such companies during such phase; and
are unable to progress to the next phase of the business life cycle because of such constraints on the availability of capital.
loan guarantee program established under paragraph (1) shall be known as the
Innovative Technology Development Loan Guarantee Program.
The Secretary may, under the program established pursuant to subsection (b)(1), guarantee the full or partial repayment of a loan that meets the requirements of this section.
For a loan guaranteed under the program established pursuant to subsection (b)(1), the Secretary may guarantee such percentage of such loan as the Secretary considers appropriate, except that such percentage shall be not less than 50 percent and not more than 90 percent.
A loan referred to in subsection (c) meets the requirements of this section if each of the following requirements is met:
The loan is for—
fixed assets relating to reequipping, expanding, or establishing a facility the Secretary considers necessary for the loan recipient to enter the next phase of the business life cycle; or
providing the loan recipient with working capital the Secretary considers necessary for the loan recipient to enter the next phase of the business life cycle.
The interest rate for the loan does not exceed such maximum rate as the Secretary considers appropriate.
Terms and conditions
The loan has such terms and conditions as the Secretary considers commercially reasonable and consistent with prevailing market standards.
The loan is offered by a lender who has been pre-qualified under subsection (e).
Pre-qualification of lenders
The Secretary shall pre-qualify lenders who—
are nongovernmental entities who specialize in providing financing to high growth technology companies; and
the Secretary determines will expedite the loan process and are competent to carry out credit underwriting, loan origination, loan documentation, loan administration, and loan servicing under the program established pursuant to subsection (b)(1).
A lender offering a loan that is guaranteed under the program established pursuant to subsection (b)(1) shall agree not to syndicate or assign the loan unless—
the loan is syndicated or assigned to a third party financial institution that the Secretary considers qualified;
the lender retains a pre-specified portion of the unguaranteed credit risk; and
the lender continues to perform as the servicing and administrative agent for the loan.
Notwithstanding any other provision of law, in the case of a default on a loan guaranteed under this section, the lender shall have the right of first refusal to serve as workout and collection agent for purposes of such default and under such terms as the Secretary considers appropriate.
The Secretary may establish such fees as the Secretary considers necessary to cover the costs of administering the program established under subsection (b)(1).
Innovative Technology Development Fund
There is established in the Treasury of the United States
a revolving fund known as the
Innovative Technology Development
Fund (in this subsection referred to as the
There shall be deposited in the fund the following, which shall constitute the assets of the Fund:
Amounts paid into the Fund under any provision of law or regulation established by the Secretary imposing fees under subsection (h).
All other amounts received by the Secretary incident to operations relating to the loan guarantee program established under subsection (b)(1).
Use of funds
The Fund shall be available to the Secretary, without fiscal year limitation, to carry out the provisions of this section.
Authorization of appropriations
There is authorized to be appropriated to the Secretary to carry out this section $200,000,000 for fiscal year 2011.
In this title:
The term Director means the Director of the National Science Foundation.
Institution of higher education
The term institution of higher education means an institution of higher education, as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)).
Science, technology, engineering, and mathematics secondary school
The term science, technology, engineering, and mathematics secondary school means a secondary school—
with a strategic focus on the subjects of science, technology, engineering, and mathematics;
that limits curriculum requirements; and
allows students greater selective choice within the science, technology, engineering, and mathematics subject areas while providing the resources to ensure adequate student choice and curricular rigor.
State educational agency
The term State educational agency has the meaning given the term in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).
Increasing funding for STEM secondary schools
The purpose of this section is to increase the number of science, technology, engineering, and mathematics secondary schools in the United States from 100 to 200.
From amounts appropriated under subsection (f), the Secretary of Education shall award grants, on a competitive basis, to State educational agencies to enable the State educational agencies to carry out the purposes of this section by establishing or expanding science, technology, engineering, and mathematics secondary schools.
The Secretary shall award grants under this section in a manner that ensure geographic diversity.
A State educational agency desiring to receive a grant under this section shall submit an application to the Secretary of Education at such time, in such manner, and containing such information as the Secretary may require.
Use of funds
A State educational agency receiving funds under this section shall use such funds to award subgrants, on a competitive basis, to local educational agencies in the State in order to enable the local educational agencies to establish and maintain new science, technology, engineering, and mathematics secondary schools, which may include repurposing an existing secondary school to become a science, technology, engineering, or mathematics school.
Authorization of appropriations
There are authorized to be appropriated to carry out this section, $50,000,000 for each of fiscal years 2012 through 2021.
Grants to institutions of higher education for retaining STEM students
The purpose of this section is to provide positive incentives for institutions of higher education to implement programs that help retain students in science, technology, engineering, and mathematics programs at the institution of higher education.
The Director shall establish a program of providing awards, from funds available through the STEM Awards Trust Fund described in subsection (c), to 4-year degree-granting institutions of higher education. In order to receive an award under this subsection, a 4-year degree-granting institution of higher education shall have—
dramatically increased the percentage and number of students who enter an institution intending to major in science, technology, engineering, or mathematics and who do graduate from such institution with a degree in such a subject; and
demonstrably sustained such increase for more than 5 years.
STEM Awards Trust Fund
is established in the Treasury of the United States a trust fund, to be known
as the STEM Awards Trust Fund (referred to in this section as the
Fund), consisting of such amounts as are transferred to the Trust Fund
under paragraph (2) of this section and any interest earned on investment of
amounts in the Trust Fund under paragraph (3)(B).
Transfer of amounts
The Director may accept, use, and dispose of gifts, not including gifts of services, for the purposes of carrying out this section.
Transfer of gifts into Trust Fund
The Director shall, for each fiscal year, transfer any amounts provided to the Director under subparagraph (A) into the Trust Fund.
Transfer of appropriated funds
Any amounts appropriated to carry out this section shall be without fiscal year limitation, and the Director shall transfer such amounts into the Trust Fund. Such amounts shall be kept in a separate account or otherwise separated from any amounts transferred into the Trust Fund under subparagraph (B).
Investment of trust fund
It shall be the duty of the Secretary of the Treasury to invest such portion of the Trust Fund as is not, in the Secretary's judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose, such obligations may be acquired—
on original issue at the issue price, or
by purchase of outstanding obligations at the market price.
Sale of obligation
Any obligation acquired by the Trust Fund (except special obligations issued exclusively to the Trust Fund) may be sold by the Secretary of the Treasury at the market price, and such special obligations may be redeemed at par plus accrued interest.
Credits to trust fund
The interest on, and the proceeds from the sale or redemption of, any obligations held in the Trust Fund shall be credited to and form a part of the Trust Fund.
Obligations from trust fund
Subject to subparagraph (B), the Director is hereafter authorized to obligate such sums as are available in the Trust Fund (including any amounts not obligated in previous fiscal years) for—
providing awards under subsection (b); and
properly allocable administrative costs of the Federal Government for the activities specified above.
In making any award under this section, the Director shall, to the extent feasible, use equal amounts of funds in the Trust Fund that were given by private entities under paragraph (2)(A) and funds in the Trust Fund that were appropriated in accordance with paragraph (2)(C).
Report to congress
It shall be the duty of the Secretary of the Treasury to hold the Trust Fund, and (after consultation with the Director) to report to the Congress each year on the financial condition and the results of the operations of the Trust Fund during the preceding fiscal year and on its expected condition and operations during the next fiscal year. Such report shall be printed as both a House and Senate document of the session of the Congress to which the report is made.
Not later than 4 years after the date of enactment of this Act, the Director shall conduct an evaluation regarding the effectiveness of the program under this section.
Authorization of appropriations
There is authorized to be appropriated to carry out this section $66,000,000 for each of the fiscal years 2012 through 2016.
The provisions of this section shall cease to have effect on the date that is 5 years after the date of enactment of this Act, unless the Director—
determines, based on the evaluation described in subsection (d), that the program has proven to be effective in accomplishing the purposes of this section; and
submits, in writing, the Director's decision to the appropriate committees of Congress.
Dissolution of trust fund
Notwithstanding subsection (c)(2)(C), upon a termination of this section under paragraph (1), all amounts in the Trust Fund shall be deposited in the Treasury of the United States as miscellaneous receipts.
Expanding undergraduate research opportunities
Not later than June 1, 2013, the President shall ensure that not less than 10 percent of all Federal funds available for a fiscal year for undergraduate student research opportunities at 4-year degree-granting institutions of higher education shall be used to fund research opportunities for postsecondary students during the students' first academic year of postsecondary education or the summer following such first year.
Sense of Congress
It is the sense of the Congress that each Federal agency should restructure the agency's undergraduate student research opportunities for students attending 4-year institutions of higher education, in order to provide more research opportunities for postsecondary students during the students' first academic year of postsecondary education or the summer following such first year.
Identification of research programs
Not later than December 31, 2012, the head of each Federal agency shall submit to the President—
a list of all programs and funds available for undergraduate student research under the jurisdiction of the agency; and
recommendations regarding how the agency can best fulfill the requirements of subsection (a).
Internet website promoting commercialization of technology ideas invented by federally funded researchers
Not later than 1 year after the date of the enactment of this Act, the Secretary of Commerce shall, acting through the Director of the National Institute for Standards and Technology, establish and maintain an Internet website that connects federally funded researchers who have ideas for technologies that they believe could be commercialized with persons who express interest in working with federally funded researchers on the commercialization of their technologies.
Participation of a federally funded researcher in the Internet website required by subsection (a) shall be optional.
Not later than 2 years after the establishment of the Internet website required by subsection (a), the Secretary shall submit to Congress a report on such Internet website.
The report required by paragraph (1) shall include the following:
The status of the Internet website required by subsection (a).
An assessment of such Internet website.
Such recommendations as the Secretary may have for improvements to the Internet website and any additional funding or legislative action as the Secretary considers necessary to implement such improvements.
Authorization of appropriations
There is authorized to be appropriated to the Secretary of Commerce to carry out this section $1,000,000 for each of the fiscal years 2011 through 2015. Amounts appropriated under this subsection shall remain available until expended.
Technology Commercialization Awards Pilot Program
The Director of the National Science Foundation (referred
to in this section as the
Director), through the Partnerships
for Innovation Program, shall administer a Technology Commercialization Awards
Pilot Program through which promising technology advances derived from National
Science Foundation research grants shall be eligible for follow-on funding to
move the technology through prototype and demonstration phases, with training
available for researcher participants in business plan development, technology
transfer and commercialization, and in processes for establishing start-up
firms based on the technologies developed.
The Director shall—
seek from National Science Foundation offices and divisions recommendations on outstanding research funded by the National Science Foundation with clear promise that such research can be advanced close to commercialized in a 3- to 5-year period;
solicit applications from National Science Foundation award grantees who believe that they have qualifying technologies eligible for commercialization; and
award grants to such National Science Foundation award grantees based on a merit-based, competitive selection process.
The Director shall form an Advisory Committee of experts on technology and the technology commercialization process to advise the National Science Foundation on the Technology Commercialization Awards Pilot Program.
Not later than 3 years after the first grant is awarded under this section, the Director shall—
report to the relevant committees of Congress on the Technology Commercialization Awards Pilot Program’s results; and
make recommendations on whether and how such a technology commercialization fund could be adopted by other Federal research and development agencies.
Authorization of appropriations
There is authorized to be appropriated to carry out this section $10,000,000 for each of the fiscal years 2011 through 2015.
Manufacturing and export promotions
Manufacturing assistance program for small- and medium-sized manufacturers in the United States
In this section:
The term Secretary means the Secretary of Commerce.
Small- and medium-sized domestic manufacturers
The term small- and medium-sized domestic manufacturers means businesses—
with not more than 500 employees; and
with facilities located in the United States that mechanically, physically, or chemically transform materials, substances, or components into new products, including component parts.
Not later than 180 days after the date of the enactment of this Act, the Secretary shall establish a manufacturing assistance program for small- and medium-sized domestic manufacturers for the purposes of promoting the manufacturing of goods in the United States and enabling those manufacturers to be competitive in the global economy by—
identifying and reducing regulatory burdens on those manufacturers under subsection (c); and
providing those manufacturers with information and other assistance under subsection (d).
Reduction of regulatory burdens
The Secretary shall—
identify any regulatory requirements applicable to small- and medium-sized domestic manufacturers that—
impose an unnecessary burden on those manufacturers; and
may be eliminated or reduced in order to promote the manufacture of goods in the United States;
take appropriate action to eliminate or reduce the regulatory requirements identified under paragraph (1); and
not later than 1 year after the date on which the Secretary establishes the program required by subsection (b), submit to Congress a report that makes recommendations with respect to action by Congress that may be necessary to eliminate or reduce the regulatory requirements identified under paragraph (1).
The Secretary shall assist small- and medium-sized domestic manufacturers by providing the manufacturers with information with respect to—
how small- and medium-sized domestic manufacturers can comply efficiently with regulations applicable to those manufacturers;
recently proposed and recently prescribed regulations likely to have an effect on small- and medium-sized domestic manufacturers; and
how small- and medium-sized domestic manufacturers can express their views and provide input with respect to any policy developments relating to the manufacture of products in the United States.
Report on effectiveness of program
Not later than January 1, 2015, the Secretary shall submit to Congress a report on the program established under subsection (b) that includes—
an assessment of the extent to which the program has been effective—
in identifying and reducing regulatory burdens on small- and medium-sized domestic manufacturers under subsection (c);
in providing information and other assistance to small- and medium-sized domestic manufacturers under subsection (d); and
in promoting the manufacturing of goods in the United States and enabling small- and medium-sized domestic manufacturers to be competitive in the global economy;
detailed information with respect to the nature, location, and duration of any jobs created as a result of the program established under subsection (b) and a description of the methodology used to compile that information; and
any recommendations with respect to continuing or improving the program established under subsection (b).
Authorization of appropriations
There are authorized to be appropriated to the Secretary $15,000,000 for each of the fiscal years 2011 through 2015 to carry out the program established under subsection (b).
Removing barriers for exporting industries in the United States
Not later than 180 days after the date of the enactment of this Act, the Under Secretary for International Trade of the Department of Commerce shall submit to Congress a report—
identifying the 20 industries in the United States that export the most goods or services;
identifying regulatory and policy barriers to exportation for those industries; and
making recommendations with respect to legislative action that could by taken by Congress to reduce those barriers.
Improving access to international markets
There are authorized to be appropriated to the United States Trade Representative $2,000,000 for each of the fiscal years 2011 through 2013 to initiate any proceeding to resolve a dispute relating to barriers to market access with a country—
that is a WTO member (as that term is defined in section 2(10) of the Uruguay Round Agreements Act (19 U.S.C. 3501(10))); or
with which the United States has a trade agreement in effect.
Limitation on Government printing costs
Not later than 180 days after the date of enactment of this Act, the Director of the Office of Management and Budget shall coordinate with the heads of Federal departments and independent agencies to—
determine which Government publications could be available on Government websites and no longer printed and to devise a strategy to reduce overall Government printing costs over the 10-year period beginning with fiscal year 2011, except that the Director shall ensure that essential printed documents prepared for social security recipients, medicare beneficiaries, and other populations in areas with limited Internet access or use continue to remain available;
establish government-wide Federal guidelines on employee printing; and
issue on the Office of Management and Budget's public website the results of a cost-benefit analysis on implementing a digital signature system and on establishing employee printing identification systems, such as the use of individual employee cards or codes, to monitor the amount of printing done by Federal employees; except that the Director of the Office of Management and Budget shall ensure that Federal employee printing costs unrelated to national defense, homeland security, border security, national disasters, and other emergencies do not exceed $860,000,000 annually.
Eliminating bonuses for poor performance by Government contractors
Guidance on linking of award and incentive fees to outcomes
Not later than 180 days after the date of enactment of this Act, each Federal department or agency shall issue guidance, with detailed implementation instructions (including definitions), on the appropriate use of award and incentive fees in department or agency programs.
The guidance under subsection (a) shall—
ensure that all new contracts using award fees link such fees to outcomes (which shall be defined in terms of program cost, schedule, and performance);
establish standards for identifying the appropriate level of officials authorized to approve the use of award and incentive fees in new contracts;
provide guidance on the circumstances in which contractor performance may be judged to be excellent or superior and the percentage of the available award fee which contractors should be paid for such performance;
establish standards for determining the percentage of the available award fee, if any, which contractors should be paid for performance that is judged to be acceptable, average, expected, good, or satisfactory;
ensure that no award fee may be paid for contractor performance that is judged to be below satisfactory performance or performance that does not meet the basic requirements of the contract;
provide specific direction on the circumstances, if any, in which it may be appropriate to roll over award fees that are not earned in one award fee period to a subsequent award fee period or periods;
ensure that the Department or agency—
collects relevant data on award and incentive fees paid to contractors; and
has mechanisms in place to evaluate such data on a regular basis; and
include performance measures to evaluate the effectiveness of award and incentive fees as a tool for improving contractor performance and achieving desired program outcomes.
Return of unearned bonuses
Any funds intended to be awarded as incentive fees that are not paid due to contractors' inability to meet the criteria established by this section shall be returned to the Treasury.