[House Report 104-390]
[From the U.S. Government Publishing Office]



                                                                       
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-390
_______________________________________________________________________


 
        NATIONAL TECHNOLOGY TRANSFER AND ADVANCEMENT ACT OF 1995

_______________________________________________________________________


December 7, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______


               Mr. Walker, from the Committee on Science,

                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2196]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Science, to whom was referred the bill 
(H.R. 2196) to amend the Stevenson-Wydler Technology Innovation 
Act of 1980 with respect to inventions made under cooperative 
research and development agreements, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.


                                CONTENTS

                                                                   Page
   I. Amendment.......................................................2
  II. Purpose of the Bill.............................................8
 III. Background and Need for the Legislation.........................8
  IV. Legislative History............................................10
   V. Outline Summary of Major Provisions of the Bill................11
  VI. Section-by-Section Analysis....................................13
        Section 1. Short Title...................................    13
        Section 2. Findings......................................    13
        Section 3. Use of Federal Technology.....................    13
        Section 4. Title to Intellectual Property Arising from 
          Cooperative Research and Development Agreements........    13
        Section 5. Distribution of Income from Intellectual 
          Property Received by Federal Laboratories..............    14
        Section 6. Employee Activities...........................    14
        Section 7. Amendment to Bayh-Dole Act....................    14
        Section 8. National Institute of Standards and Technology 
          Act Amendments.........................................    14
        Section 9. Research Equipment............................    14
        Section 10. Personnel....................................    14
        Section 11. Fastener Quality Act Amendments..............    15
        Section 12. Standards Conformity.........................    15
        Section 13. Sense of Congress............................    15
 VII. Committee Views................................................15
VIII. Summary of Hearings............................................26
        a. 103rd Congress........................................    26
        b. 104th Congress........................................    28
  IX. Summary of Committee Actions...................................32
        a. Subcommittee Markup...................................    32
        b. Committee Markup......................................    32
   X. Congressional Budget Office Analysis and Cost Estimates........33
  XI. Effect of Legislation on Inflation.............................35
 XII. Oversight Findings and Recommendations.........................35
XIII. Oversight Findings and Recommendations by the Committee on 
      Government Reform and Oversight................................35
 XIV. Changes in Existing Law Made by the Bill, As Reported..........36
  XV. Committee Recommendations......................................52
 XVI. Reports to Congress............................................52
XVII. Exchange of Committee Correspondence...........................53
XVIII.Additional Views...............................................55

 XIX. Proceedings from Subcommittee Markup of H.R. 2196..............57
  XX. Proceedings from Full Committee Markup of H.R. 2196...........105

                              I. Amendment

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Technology Transfer and 
Advancement Act of 1995''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Bringing technology and industrial innovation to the 
        marketplace is central to the economic, environmental, and 
        social well-being of the people of the United States.
            (2) The Federal Government can help United States business 
        to speed the development of new products and processes by 
        entering into cooperative research and development agreements 
        which make available the assistance of Federal laboratories to 
        the private sector, but the commercialization of technology and 
        industrial innovation in the United States depends upon actions 
        by business.
            (3) The commercialization of technology and industrial 
        innovation in the United States will be enhanced if companies, 
        in return for reasonable compensation to the Federal 
        Government, can more easily obtain exclusive licenses to 
        inventions which develop as a result of cooperative research 
        with scientists employed by Federal laboratories.

SEC. 3. USE OF FEDERAL TECHNOLOGY.

    Subparagraph (B) of section 11(e)(7) of the Stevenson-Wydler 
Technology Innovation Act of 1980 (15 U.S.C. 3710(e)(7)(B)) is amended 
to read as follows:
    ``(B) A transfer shall be made by any Federal agency under 
subparagraph (A), for any fiscal year, only if the amount so 
transferred by that agency (as determined under such subparagraph) 
would exceed $10,000.''.

SEC. 4. TITLE TO INTELLECTUAL PROPERTY ARISING FROM COOPERATIVE 
                    RESEARCH AND DEVELOPMENT AGREEMENTS.

    Subsection (b) of section 12 of the Stevenson-Wydler Technology 
Innovation Act of 1980 (15 U.S.C. 3710a(b)) is amended to read as 
follows:
    ``(b) Enumerated Authority.--(1) Under an agreement entered into 
pursuant to subsection (a)(1), the laboratory may grant, or agree to 
grant in advance, to a collaborating party patent licenses or 
assignments, or options thereto, in any invention made in whole or in 
part by a laboratory employee under the agreement, for reasonable 
compensation when appropriate. The laboratory shall ensure, through 
such agreement, that the collaborating party has the option to choose 
an exclusive license for a field of use for any such invention under 
the agreement or, if there is more than one collaborating party, that 
the collaborating parties are offered the option to hold licensing 
rights that collectively encompass the rights that would be held under 
such an exclusive license by one party. In consideration for the 
Government's contribution under the agreement, grants under this 
paragraph shall be subject to the following explicit conditions:
            ``(A) A nonexclusive, nontransferable, irrevocable, paid-up 
        license from the collaborating party to the laboratory to 
        practice the invention or have the invention practiced 
        throughout the world by or on behalf of the Government. In the 
        exercise of such license, the Government shall not publicly 
        disclose trade secrets or commercial or financial information 
        that is privileged or confidential within the meaning of 
        section 552(b)(4) of title 5, United States Code, or which 
        would be considered as such if it had been obtained from a non-
        Federal party.
            ``(B) If a laboratory assigns title or grants an exclusive 
        license to such an invention, the Government shall retain the 
        right--
                    ``(i) to require the collaborating party to grant 
                to a responsible applicant a nonexclusive, partially 
                exclusive, or exclusive license to use the invention in 
                the applicant's licensed field of use, on terms that 
                are reasonable under the circumstances; or
                    ``(ii) if the collaborating party fails to grant 
                such a license, to grant the license itself.
            ``(C) The Government may exercise its right retained under 
        subparagraphs (B) (ii) and (iii) only if the Government finds 
        that--
                    ``(i) the action is necessary to meet health or 
                safety needs that are not reasonably satisfied by the 
                collaborating party;
                    ``(ii) the action is necessary to meet requirements 
                for public use specified by Federal regulations, and 
                such requirements are not reasonably satisfied by the 
                collaborating party; or
                    ``(iii) the collaborating party has failed to 
                comply with an agreement containing provisions 
                described in subsection (c)(4)(B).
    ``(2) Under agreements entered into pursuant to subsection (a)(1), 
the laboratory shall ensure that a collaborating party may retain title 
to any invention made solely by its employee in exchange for normally 
granting the Government a nonexclusive, nontransferable, irrevocable, 
paid-up license to practice the invention or have the invention 
practiced throughout the world by or on behalf of the Government for 
research or other Government purposes.
    ``(3) Under an agreement entered into pursuant to subsection 
(a)(1), a laboratory may--
            ``(A) accept, retain, and use funds, personnel, services, 
        and property from a collaborating party and provide personnel, 
        services, and property to a collaborating party;
            ``(B) use funds received from a collaborating party in 
        accordance with subparagraph (A) to hire personnel to carry out 
        the agreement who will not be subject to full-time-equivalent 
        restrictions of the agency;
            ``(C) to the extent consistent with any applicable agency 
        requirements or standards of conduct, permit an employee or 
        former employee of the laboratory to participate in an effort 
        to commercialize an invention made by the employee or former 
        employee while in the employment or service of the Government; 
        and
            ``(D) waive, subject to reservation by the Government of a 
        nonexclusive, irrevocable, paid-up license to practice the 
        invention or have the invention practiced throughout the world 
        by or on behalf of the Government, in advance, in whole or in 
        part, any right of ownership which the Federal Government may 
        have to any subject invention made under the agreement by a 
        collaborating party or employee of a collaborating party.
    ``(4) A collaborating party in an exclusive license in any 
invention made under an agreement entered into pursuant to subsection 
(a)(1) shall have the right of enforcement under chapter 29 of title 
35, United States Code.
    ``(5) A Government-owned, contractor-operated laboratory that 
enters into a cooperative research and development agreement pursuant 
to subsection (a)(1) may use or obligate royalties or other income 
accruing to the laboratory under such agreement with respect to any 
invention only--
            ``(A) for payments to inventors;
            ``(B) for a purposes described in clauses (i), (ii), (iii), 
        and (iv) of section 14(a)(1)(B); and
            ``(C) for scientific research and development consistent 
        with the research and development missions and objectives of 
        the laboratory.''.

SEC. 5. DISTRIBUTION OF INCOME FROM INTELLECTUAL PROPERTY RECEIVED BY 
                    FEDERAL LABORATORIES.

    Section 14 of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710c) is amended--
            (1) by amending subsection (a)(1) to read as follows:
``(1) Except as provided in paragraphs (2) and (4), any royalties or 
other payments received by a Federal agency from the licensing and 
assignment of inventions under agreements entered into by Federal 
laboratories under section 12, and from the licensing of inventions of 
Federal laboratories under section 207 of title 35, United States Code, 
or under any other provision of law, shall be retained by the 
laboratory which produced the invention and shall be disposed of as 
follows:
            ``(A)(i) The head of the agency or laboratory, or such 
        individual's designee, shall pay each year the first $2,000, 
        and thereafter at least 15 percent, of the royalties or other 
        payments to the inventor or coinventors.
            ``(ii) An agency or laboratory may provide appropriate 
        incentives, from royalties, or other payments, to laboratory 
        employees who are not an inventor of such inventions but who 
        substantially increased the technical value of such inventions.
            ``(iii) The agency or laboratory shall retain the royalties 
        and other payments received from an invention until the agency 
        or laboratory makes payments to employees of a laboratory under 
        clause (i) or (ii).
            ``(B) The balance of the royalties or other payments shall 
        be transferred by the agency to its laboratories, with the 
        majority share of the royalties or other payments from any 
        invention going to the laboratory where the invention occurred. 
        The royalties or other payments so transferred to any 
        laboratory may be used or obligated by that laboratory during 
        the fiscal year in which they are received or during the 
        succeeding fiscal year--
                    ``(i) to reward scientific, engineering, and 
                technical employees of the laboratory, including 
                developers of sensitive or classified technology, 
                regardless of whether the technology has commercial 
                applications;
                    ``(ii) to further scientific exchange among the 
                laboratories of the agency;
                    ``(iii) for education and training of employees 
                consistent with the research and development missions 
                and objectives of the agency or laboratory, and for 
                other activities that increase the potential for 
                transfer of the technology of the laboratories of the 
                agency;
                    ``(iv) for payment of expenses incidental to the 
                administration and licensing of intellectual property 
                by the agency or laboratory with respect to inventions 
                made at that laboratory, including the fees or other 
                costs for the services of other agencies, persons, or 
                organizations for intellectual property management and 
                licensing services; or
                    ``(v) for scientific research and development 
                consistent with the research and development missions 
                and objectives of the laboratory.
            ``(C) All royalties or other payments retained by the 
        agency or laboratory after payments have been made pursuant to 
        subparagraphs (A) and (B) that is unobligated and unexpended at 
        the end of the second fiscal year succeeding the fiscal year in 
        which the royalties and other payments were received shall be 
        paid into the Treasury.'';
            (2) in subsection (a)(2)--
                    (A) by inserting ``or other payments'' after 
                ``royalties''; and
                    (B) by striking ``for the purposes described in 
                clauses (i) through (iv) of paragraph (1)(B) during 
                that fiscal year or the succeeding fiscal year'' and 
                inserting in lieu thereof ``under paragraph (1)(B)'';
            (3) in subsection (a)(3), by striking ``$100,000'' both 
        places it appears and inserting ``$150,000'';
            (4) in subsection (a)(4)--
                    (A) by striking ``income'' each place it appears 
                and inserting in lieu thereof ``payments'';
                    (B) by striking ``the payment of royalties to 
                inventors'' in the first sentence thereof and inserting 
                in lieu thereof ``payments to inventors'';
                    (C) by striking ``clause (i) of paragraph (1)(B)'' 
                and inserting in lieu thereof ``clause (iv) of 
                paragraph (1)(B)'';
                    (D) by striking ``payment of the royalties,'' in 
                the second sentence thereof and inserting in lieu 
                thereof ``offsetting the payments to inventors,''; and
                    (E) by striking ``clauses (i) through (iv) of''; 
                and
            (5) by amending paragraph (1) of subsection (b) to read as 
        follows:
            ``(1) by a contractor, grantee, or participant, or an 
        employee of a contractor, grantee, or participant, in an 
        agreement or other arrangement with the agency, or''.

SEC. 6. EMPLOYEE ACTIVITIES.

    Section 15(a) of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710d(a)) is amended--
            (1) by striking ``the right of ownership to an invention 
        under this Act'' and inserting in lieu thereof ``ownership of 
        or the right of ownership to an invention made by a Federal 
        employee''; and
            (2) by inserting ``obtain or'' after ``the Government, 
        to''.

SEC. 7. AMENDMENT TO BAYH-DOLE ACT.

    Section 210(e) of title 35, United States Code, is amended by 
striking ``, as amended by the Federal Technology Transfer Act of 
1986,''.

SEC. 8. NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY ACT AMENDMENTS.

    The National Institute of Standards and Technology Act (15 U.S.C. 
271 et seq.) is amended--
            (1) in section 10(a)--
                    (A) by striking ``nine'' and inserting in lieu 
                thereof ``15''; and
                    (B) by striking ``five'' and inserting in lieu 
                thereof ``10'';
            (2) in section 15--
                    (A) by striking ``Pay Act of 1945; and'' and 
                inserting in lieu thereof ``Pay Act of 1945;''; and
                    (B) by inserting ``; and (h) the provision of 
                transportation services for employees of the Institute 
                between the facilities of the Institute and nearby 
                public transportation, notwithstanding section 1344 of 
                title 31, United States Code'' after ``interests of the 
                Government''; and
            (3) in section 19, by striking ``nor more than forty'' and 
        inserting in lieu thereof ``nor more than 60''.

SEC. 9. RESEARCH EQUIPMENT.

    Section 11(i) of the Stevenson-Wydler Technology Innovation Act of 
1980 (15 U.S.C. 3710(i)) is amended--
            (1) by inserting ``loan, lease,'' after ``department, 
        may''; and
            (2) by inserting ``Actions taken under this subsection 
        shall not be subject to Federal requirements on the disposal of 
        property.'' after ``education and research activities.''.

SEC. 10. PERSONNEL.

    The personnel management demonstration project established under 
section 10 of the National Bureau of Standards Authorization Act for 
Fiscal Year 1987 (15 U.S.C. 275 note) is extended indefinitely.

SEC. 11. FASTENER QUALITY ACT AMENDMENTS.

    (a) Section 2 Amendments.--Section 2 of the Fastener Quality Act 
(15 U.S.C. 5401) is amended--
            (1) by striking subsection (a)(4), and redesignating 
        paragraphs (5) through (9) as paragraphs (4) through (8), 
        respectively;
            (2) in subsection (a)(7), as so redesignated by paragraph 
        (1) of this subsection, by striking ``by lot number''; and
            (3) in subsection (b), by striking ``used in critical 
        applications'' and inserting in lieu thereof ``in commerce''.
    (b) Section 3 Amendments.--Section 3 of the Fastener Quality Act 
(15 U.S.C. 5402) is amended--
            (1) in paragraph (1)(B) by striking ``having a minimum 
        tensile strength of 150,000 pounds per square inch'' and 
        inserting in lieu thereof ``having a minimum Rockwell C 
        hardness of 40 or above'';
            (2) in paragraph (2), by inserting ``consensus'' after ``or 
        any other'';
            (3) in paragraph (5)--
                    (A) by inserting ``or'' after ``standard or 
                specification,'' in subparagraph (B);
                    (B) by striking ``or'' at the end of subparagraph 
                (C);
                    (C) by striking subparagraph (D); and
                    (D) by inserting ``or produced in accordance with 
                ASTM F 432'' after ``307 Grade A'';
            (4) in paragraph (6) by striking ``other person'' and 
        inserting in lieu thereof ``government agency'';
            (5) in paragraph (8) by striking ``Standard'' and inserting 
        in lieu thereof ``Standards'';
            (6) by striking paragraph (11) and redesignating paragraphs 
        (12) through (15) as paragraphs (11) through (14), 
        respectively;
            (7) in paragraph (13), as so redesignated by paragraph (6) 
        of this subsection, by striking ``, a government agency'' and 
        all that follows through ``markings of any fastener'' and 
        inserting in lieu thereof ``or a government agency''; and
            (8) in paragraph (14), as so redesignated by paragraph (6) 
        of this subsection, by inserting ``for the purpose of achieving 
        a uniform hardness'' after ``quenching and tempering''.
    (c) Section 4 Repeal.--Section 4 of the Fastener Quality Act (15 
U.S.C. 5403) is repealed.
    (d) Section 5 Amendments.--Section 5 of the Fastener Quality Act 
(15 U.S.C. 5404) is amended--
            (1) in subsection (a)(1)(B) and (2)(A)(i) by striking 
        ``subsections (b) and (c)'' and inserting in lieu thereof 
        ``subsections (b), (c), and (d)'';
            (2) in subsection (c)(2) by striking ``or, where 
        applicable'' and all that follows through ``section 7(c)(1)'';
            (3) in subsection (c)(3) by striking ``, such as the 
        chemical, dimensional, physical, mechanical, and any other'';
            (4) in subsection (c)(4) by inserting ``except as provided 
        in subsection (d),'' before ``state whether''; and
            (5) by adding 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), that the chemical characteristics of a lot conform 
to the standards and specifications to which the manufacturer 
represents such lot has been manufactured if the following requirements 
are met:
            ``(1) The coil or heat number of metal from which such lot 
        was fabricated has been inspected and tested with respect to 
        its chemical characteristics by a laboratory accredited in 
        accordance with the procedures and conditions specified by the 
        Secretary under section 6.
            ``(2) Such laboratory has provided to the manufacturer, 
        either directly or through the metal manufacturer, a written 
        inspection and testing report, which shall be in a form 
        prescribed by the Secretary by regulation, listing the chemical 
        characteristics of such coil or heat number.
            ``(3) The report described in paragraph (2) indicates that 
        the chemical characteristics of such coil or heat number 
        conform to those required by the standards and specifications 
        to which the manufacturer represents such lot has been 
        manufactured.
            ``(4) The manufacturer demonstrates that such lot has been 
        fabricated from the coil or heat number of metal to which the 
        report described in paragraphs (2) and (3) relates.
In prescribing the form of report required by subsection (c), the 
Secretary shall provide for an alternative to the statement required by 
subsection (c)(4), insofar as such statement pertains to chemical 
characteristics, for cases in which a manufacturer elects to use the 
procedure permitted by this subsection.''.
    (e) Section 6 Amendment.--Section 6(a)(1) of the Fastener Quality 
Act (15 U.S.C. 5405(a)(1)) is amended by striking ``Within 180 days 
after the date of enactment of this Act, the'' and inserting in lieu 
thereof ``The''.
    (f) Section 7 Amendments.--Section 7 of the Fastener Quality Act 
(15 U.S.C. 5406) is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a) Domestically Produced Fasteners.--It shall be unlawful for a 
manufacturer to sell any shipment of fasteners covered by this Act 
which are manufactured in the United States unless the fasteners--
            ``(1) have been manufactured according to the requirements 
        of the applicable standards and specifications and have been 
        inspected and tested by a laboratory accredited in accordance 
        with the procedures and conditions specified by the Secretary 
        under section 6; and
            ``(2) an original laboratory testing report described in 
        section 5(c) and a manufacturer's certificate of conformance 
        are on file with the manufacturer, or under such custody as may 
        be prescribed by the Secretary, and available for 
        inspection.'';
            (2) in subsection (c)(2) by inserting ``to the same'' after 
        ``in the same manner and'';
            (3) in subsection (d)(1) by striking ``certificate'' and 
        inserting in lieu thereof ``test report''; and
            (4) by striking subsections (e), (f), and (g) and inserting 
        in lieu thereof the following:
    ``(e) Commingling.--It shall be unlawful for any manufacturer, 
importer, or private label distributor to commingle like fasteners from 
different lots in the same container, except that such manufacturer, 
importer, or private label distributor may commingle like fasteners of 
the same type, grade, and dimension from not more than two tested and 
certified lots in the same container during repackaging and plating 
operations. Any container which contains fasteners from two lots shall 
be conspicuously marked with the lot identification numbers of both 
lots.
    ``(f) Subsequent Purchaser.--If a person who purchases fasteners 
for any purpose so requests either prior to the sale or at the time of 
sale, the seller shall conspicuously mark the container of the 
fasteners with the lot number from which such fasteners were taken.''.
    (g) Section 9 Amendment.--Section 9 of the Fastener Quality Act (15 
U.S.C. 5408) is amended by adding at the end the following new 
subsection:
    ``(d) Enforcement.--The Secretary may designate officers or 
employees of the Department of Commerce to conduct investigations 
pursuant to this Act. In conducting such investigations, those officers 
or employees may, to the extent necessary or appropriate to the 
enforcement of this Act, exercise such authorities as are conferred 
upon them by other laws of the United States, subject to policies and 
procedures approved by the Attorney General.''.
    (h) Section 10 Amendments.--Section 10 of the Fastener Quality Act 
(15 U.S.C. 5409) is amended--
            (1) in subsections (a) and (b), by striking ``10 years'' 
        and inserting in lieu thereof ``5 years''; and
            (2) in subsection (b), by striking ``any subsequent'' and 
        inserting in lieu thereof ``the subsequent''.
    (i) Section 13 Amendment.--Section 13 of the Fastener Quality Act 
(15 U.S.C. 5412) is amended by striking ``within 180 days after the 
date of enactment of this Act''.
    (j) Section 14 Repeal.--Section 14 of the Fastener Quality Act (15 
U.S.C. 5413) is repealed.

SEC. 12. STANDARDS CONFORMITY.

    (a) Use of Standards.--Section 2(b) of the National Institute of 
Standards and Technology Act (15 U.S.C. 272(b)) is amended--
            (1) in paragraph (2), by striking ``, including comparing 
        standards'' and all that follows through ``Federal 
        Government'';
            (2) by redesignating paragraphs (3) through (11) as 
        paragraphs (4) through (12), respectively; and
            (3) by inserting after paragraph (2) the following new 
        paragraph:
            ``(3) to compare standards used in scientific 
        investigations, engineering, manufacturing, commerce, industry, 
        and educational institutions with the standards adopted or 
        recognized by the Federal Government and to coordinate the use 
        by Federal agencies of private sector standards, emphasizing 
        where possible the use of standards developed by private, 
        consensus organizations;''.
    (b) Conformity Assessment Activities.--Section 2(b) of the National 
Institute of Standards and Technology Act (15 U.S.C. 272(b)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (11), as so 
        redesignated by subsection (a)(2) of this section;
            (2) by striking the period at the end of paragraph (12), as 
        so redesignated by subsection (a)(2) of this section, and 
        inserting in lieu thereof ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(13) to coordinate Federal, State, local, and private 
        sector standards conformity assessment activities, with the 
        goal of eliminating unnecessary duplication and complexity in 
        the development and promulgation of conformity assessment 
        requirements and measures.''.
    (c) Transmittal of Plan to Congress.--The National Institute of 
Standards and Technology shall, by January 1, 1996, transmit to the 
Congress a plan for implementing the amendments made by this section.
    (d) Utilization of Consensus Standards by Federal Agencies; 
Reports.--(1) To the extent practicable, all Federal agencies and 
departments shall use, for procurement and regulatory applications, 
standards that are developed or adopted by voluntary consensus 
standards bodies.
    (2) Federal agencies and departments shall consult with voluntary, 
private sector, consensus standards bodies, and shall participate with 
such bodies in the development of standards, as appropriate in carrying 
out paragraph (1).
    (3) If a Federal agency or department elects to use, for 
procurement or regulatory applications, standards that are not 
developed or adopted by voluntary consensus standards bodies, the head 
of such agency or department shall transmit to the Office of Management 
and Budget an explanation of the reasons for adopting such standards. 
The Office of Management and Budget shall annually transmit to the 
Congress all explanations received by it under this subsection.

SEC. 13. SENSE OF CONGRESS.

    It is the sense of the Congress that the Malcolm Baldrige National 
Quality Award program offers substantial benefits to United States 
industry, and that all funds appropriated for such program should be 
spent in support of the goals of the program.

                        II. Purpose of the Bill

    H.R. 2196, as reported, amends the Stevenson-Wydler 
Technology Innovation Act of 1980 (P.L. 96-480) and the Federal 
Technology Transfer Act of 1986 (P.L. 99-502), among other 
provisions. The bill seeks to provide the following objectives:
    (1) To promote prompt deployment by United States industry 
of discoveries created in a collaborative agreement with 
federal laboratories by guaranteeing the industry partner 
sufficient intellectual property rights to the invention;
    (2) To provide important incentives and rewards to federal 
laboratory personnel who create new inventions;
    (3) To provide several clarifying and strengthening 
amendments to current technology transfer laws; and
    (4) To make changes affecting the Fastener Quality Act 
(P.L. 101-592), the federal use of standards, and the 
management and administration of scientific research and 
standards measurement at the National Institute of Standards 
and Technology (NIST).

              III. Background and Need for the Legislation

    Many of the United States economic advances of the new 
millennium are rooted in the research and development performed 
in our laboratories today. Our nation's future well-being, 
therefore, becomes dependent on the continuous transfer of 
basic science and technology from our laboratories in the 
United States, including our federal laboratories, to the 
private sector to create commercial goods and services. 
Successful technology transfer results in the creation of 
innovative products or processes becoming available to meet or 
induce market demand.
    Congress has long tried to encourage transfer to the 
private sector of unclassified technology created in our 
federal laboratories. This is eminently logical since federal 
laboratories are considered one of our nation's greatest 
assets; yet, they are also a largely untapped resource of 
technical expertise. The United States has over 700 federal 
laboratories, employing one of six scientists in the nation and 
occupying one-fifth of the country's lab and equipment 
capabilities. It is, therefore, important to our future 
economic well-being to make the ideas and resources of our 
federal laboratory scientists available to United States 
companies for commercialization opportunities.
    By permitting effective collaboration between our federal 
laboratories and private industry, new technologies and 
industrial innovation can be effectively commercialized and 
brought into the broader economy, thus enhancing our nation's 
ability to compete in the global marketplace. To help further 
this goal, Congress first enacted the Stevenson-Wydler 
Technology Innovation Act of 1980 (P.L. 96-480). The Stevenson-
Wydler Act required federal laboratories to take an active role 
in technical cooperation and established technology transfer 
offices at all major federal laboratories. That landmark 
legislation expanded considerably with the Federal Technology 
Transfer Act of 1986 (P.L. 99-502) and the National 
Competitiveness Technology Transfer Act of 1989 (P.L. 101-189).
    The Federal Technology Transfer Act of 1986 allowed a 
government-owned, government-operated (GOGO) laboratory staffed 
by federal employees to enter into a Cooperative Research and 
Development Agreement (CRADA) with industry, universities, and 
others. The CRADA mechanism allows a laboratory and an 
industrial company to negotiate patent rights and royalties 
before they conduct joint research, giving the company patent 
protection for any inventions and products that result from the 
collaboration. This patent protection provides an incentive for 
the companies to invest in turning laboratory ideas into 
commercial products. Furthermore, if a federal laboratory 
negotiates the payment of royalties as part of a CRADA 
arrangement, the Federal Technology Transfer Act of 1986 
provides that part of those royalties are shared with the 
federal inventor as a reward for his or her work and as an 
incentive to them and others to report and assist in the 
transfer of potentially valuable inventions. A CRADA also 
provides a federal laboratory with valuable insights into the 
needs and priorities of industry, and with the expertise 
available only in industry, that enhances a laboratory's 
ability to accomplish its mission.
    The National Competitiveness Technology Transfer Act of 
1989, included as Section 3131 et seq. of the Department of 
Defense Authorization Act for Fiscal Year 1990 (P.L. 101-189), 
extended the CRADA authority to a government-owned, contractor-
operated (GOCO) laboratory such as the ones at the Department 
of Energy. It also protected information and innovations, 
brought into and created through a CRADA, from disclosure for a 
limited period of time.
    Since the inception in 1986 of the CRADA legislation, over 
2,000 have been signed, resulting in the transfer of 
technology, knowledge, and expertise back and forth between our 
federal laboratories and the private sector. Under current law, 
the work done under a CRADA must not detract from the mission 
responsibilities of a federal laboratory. The federal 
laboratory may accept funds, personnel, services, and property 
from the private sector partner and may provide personnel, 
services, and property in return, but the labs are expressly 
prohibited from providing direct funding to their collaborating 
partners.
    Despite the success of the CRADA legislation, there are 
existing impediments to private companies entering into CRADAs. 
The law was originally designed to provide a great deal of 
flexibility in the negotiation of intellectual property rights 
to both the private sector partner and the federal laboratory; 
however, it provides, little guidance to either party on the 
adequacy of those rights a private sector partner should 
receive in a CRADA.
    Agencies are given broad discretion in the determination of 
intellectual property rights under CRADA legislation. This has 
often resulted in laborious negotiations of patent rights for 
certain laboratories and their partners each time they discuss 
a new CRADA. With options ranging from assigning the company 
full patent title to providing the company with only a 
nonexclusive license for a narrow field of use, both sides must 
undergo this negotiation on the range of intellectual property 
rights for each CRADA.
    This uncertainty of intellectual property rights, coupled 
with the time and effort required in negotiation, may now be 
hindering collaboration by the private sector with federal 
laboratories. This, in essence, has become a barrier to 
technology transfer. Companies are reluctant to enter into 
CRADAs, or equally important, to commit substantial investments 
to commercialize CRADA inventions, unless they have some 
assurance they will control important intellectual property 
rights.
    H.R. 2196, the National Technology Transfer and Advancement 
Act of 1995, seeks to enhance the possibility of 
commercialization of technology and industrial innovation in 
the United States by providing assurances that sufficient 
rights to intellectual property will be granted to the private 
sector partner with a federal laboratory. The Act guarantees to 
the private sector partner the option, at minimum, of selecting 
an exclusive license in a field of use for a new invention 
created jointly or solely by the government laboratory in a 
CRADA. The company would then have the right to use the new 
invention in exchange for reasonable compensation to the 
laboratory. The Act also assures the collaborator that it may 
take title to an invention it makes under the CRADA.
    In addition, H.R. 2196 addresses concerns about government 
rights to an invention created in a CRADA. It provides that the 
federal government will retain minimum statutory rights to use 
the technology for its own purposes. It provides limited 
government ``march-in-rights'' if there is a public necessity 
that requires compulsory licensing of the technology. H.R. 2196 
also provides enhanced financial incentives and rewards to 
federal laboratory scientists for new technology that results 
in marketable products, to be paid for from the income the 
laboratories receive for the commercialized technology.

                        IV. Legislative History

    Congresswoman Constance A. Morella of Maryland introduced 
H.R. 2196 on August 4, 1995. The bill was originally 
cosponsored by Congressmen Robert S. Walker of Pennsylvania, 
George E. Brown, Jr. of California, and John S. Tanner of 
Tennessee. Senator John D. Rockefeller, IV of West Virginia 
introduced the Senate companion bill, S. 1164, on August 10, 
1995.
    On June 27, 1995, the House Science Committee's Technology 
and Basic Research Subcommittees held a joint hearing on 
technology transfer and our federal laboratories, with a focus 
on the draft text of H.R. 2196. The testimony from the June 
hearing supplemented the hearing record already established in 
the previous Congress on the bill text. On September 20, 1994, 
in the 103rd Congress, the House Science, Space, and Technology 
Committee's Technology, Environment, and Aviation Subcommittee 
held a hearing on H.R. 3590, the Technology Transfer 
Improvements Act of 1993, which led to further refinements in 
the bill.
    On October 18, 1995, the Technology Subcommittee 
unanimously reported H.R. 2196 favorably to the full Committee, 
with an amendment in the nature of a substitute. The amendment 
incorporated certain provisions affecting the National 
Institute of Standards and Technology (NIST), among others, 
which were approved by the House Science Committee, on June 28, 
1995, as part of H.R. 1870, the American Technology Advancement 
Act of 1995. The amendment provisions were passed by the House, 
on October 12, 1995, in Title VI of H.R. 2405, the Omnibus 
Civilian Science Authorization Act of 1995.
    On October 25, 1995, the Science Committee considered H.R. 
2196, as amended by the subcommittee. The Committee accepted 
certain additional amendments to the bill and ordered H.R. 2196 
reported to the House without objection by voice vote.

           V. Outline Summary of Major Provisions of the Bill

Statutory Authority:

 Amends the Stevenson-Wydler Technology Innovation Act 
        of 1980 (P.L. 96-480) and the Federal Technology 
        Transfer Act of 1986 (P.L. 99-502), among other 
        provisions, by creating incentives and eliminating 
        impediments to encourage technology commercialization, 
        and for other purposes.
 Impacts upon technology transfer policies in both a 
        government-owned, government-operated (GOGO) laboratory 
        and a government-owned, contractor-operated (GOCO) 
        laboratory.

Effect upon Technology Transfer in a CRADA:

 Provides assurances to United States companies that it 
        will be granted sufficient intellectual property rights 
        to justify prompt commercialization of inventions 
        arising from a CRADA with a federal laboratory
 Provides important incentives and rewards to federal 
        laboratory personnel who create new inventions

Effect upon CRADA Private Sector Partner under the Act:--

 Guarantees right to option, at minimum, of exclusive 
        license in a field of use for inventions jointly or 
        solely developed by a federal laboratory resulting from 
        a CRADA
 Assures that privileged and confidential information 
        will be protected when CRADA invention is used by the 
        government
 Assures private sector partner the right to possess 
        its own inventions developed in a CRADA

Effect upon Federal Government under the Act:

 Provides right to use invention for legitimate 
        government needs
 Clarifies contributions laboratories can make in a 
        CRADA and continues current prohibition of direct 
        federal funds to a private sector partner in a CRADA
 Clarifies that agencies may use royalty revenue to 
        hire temporary personnel to assist in the CRADA or in 
        related projects
 Permits agencies to use royalty revenue for related 
        research in the laboratory, and for related 
        administrative and legal costs
 Allows federal government to require licensing of its 
        own inventions to others only for compelling public 
        health, safety, or regulatory needs
 Returns all unused royalty revenue to the Treasury 
        after the completion of the second fiscal year
 Clarifies authority of laboratories, agencies, or 
        departments to transfer excess scientific equipment by 
        gift, loan, or lease to public and private schools and 
        nonprofit institutions

Effect upon Federal Scientist/Inventor under the Act:

 Provides the inventor with the first $2,000, and 
        thereafter, at least 15% of the royalties, in each 
        year, accrued for inventions made by the inventor
 Increases individual maximum royalty award to $150,000 
        per year
 Allows rewards for other lab personnel who 
        substantially assist in the invention
 Restates current law permitting a federal employee to 
        work on the commercialization of his or her invention
 Clarifies that a federal inventor can obtain or retain 
        title to his or her invention in the event the 
        government chooses not to pursue it

Administrative and Management Provisions Affecting the National 
Institute of Standards and Technology (NIST):

 Provides authority for a shuttle bus service between 
        the NIST Gaithersburg, Maryland campus and the Shady 
        Grove Metro subway station for employees to use in 
        their commute to work
 Expands the NIST Visiting Committee to 15 members, 
        with the requirement that 10 members shall be from 
        United States industry
 Increases the cap on postdoctoral fellowships to 60 
        positions from 40 positions
 Makes permanent the NIST Personnel Demonstration 
        Project

Fastener Quality Act Amendments:

 Amends the Fastener Quality Act (P.L. 101-592), as 
        recommended by the Fastener Advisory Committee, 
        focusing on heat mill certification, mixing of like-
        certified fasteners, and sale of fasteners with minor 
        nonconformances

Federal Use of Standards:

 Restates and clarifies existing authority for the 
        National Institute of Standards and Technology (NIST) 
        to coordinate standards and conformity assessment 
        activities in all levels of government
 Codifies Office of Management and Budget (OMB) 
        Circular A-119, requiring federal agencies to adopt and 
        use standards developed by voluntary consensus 
        standards bodies and to work closely with those 
        organizations to ensure that the developed standards 
        are consistent with agency needs

                    VI. Section-by-Section Analysis

                        section 1. short title.

    The Act may be cited as the ``National Technology Transfer 
and Advancement Act of 1995.''

                          section 2. findings.

    Bringing technology and industrial innovation to the 
marketplace is central to the economic, environmental, and 
social well-being of the country. The federal government can 
help United States businesses speed the development of new 
products and processes by entering into a Cooperative Research 
and Development Agreement (CRADA) with private sector 
businesses. A CRADA arrangement makes available the assistance 
of federal laboratories to the private sector. However, the 
successful commercialization of technology and industrial 
innovation is predominantly dependent on actions taken by the 
private sector. This commercialization will be enhanced if 
companies, in return for reasonable compensation to the federal 
government, can more easily obtain exclusive licenses to 
inventions made jointly or solely by a federal laboratory which 
develop as a result of this cooperative research with federal 
laboratory scientists. Private sector partners are also assured 
that they will own inventions they develop in a CRADA.

                 section 3. use of federal technology.

    Amends the Stevenson-Wydler Technology Innovation Act of 
1980 to continue participation in the Federal Laboratory 
Consortium for Technology Transfer by all federal agencies with 
major federal laboratories.

  section 4. title to intellectual property arising from cooperative 
                  research and development agreements.

    Guarantees an industrial partner to a joint Cooperative 
Research and Development Agreement (CRADA) the option to 
choose, at minimum, an exclusive license for a field of use to 
the resulting invention. Reiterates government's right to use 
the invention for its legitimate needs, but stresses the 
obligation to protect from public disclosure any information 
classified as privileged or confidential under Exemption 4 of 
the Freedom of Information Act (FOIA).
    Provides that, when the laboratory assigns ownership or an 
exclusive license to the industry partner, licensing to others 
may be required if needed to satisfy compelling public health, 
safety or regulatory concerns. Clarifies current law defining 
the contributions laboratories can make in the CRADA. Clarifies 
that agencies may use royalties to hire temporary personnel to 
assist in the CRADA or related projects. Enumerates how a 
government-owned, government-operated (GOGO) laboratory and a 
government-owned, contractor-operated (GOCO) laboratory may use 
resulting royalties. Guarantees industrial partner the right to 
take title to its invention under a CRADA in exchange for 
granting the government a license for research or governmental 
purpose.

 section 5. distribution of income from intellectual property received 
                        by federal laboratories.

    Requires that agencies must pay federal inventors each year 
the first $2,000 and thereafter at least 15% of the royalties 
received by the agency for the inventions made by the employee. 
Increases an inventor's maximum royalty award to $150,000 per 
year. Allows for rewarding other laboratory personnel involved 
in the project, permits agencies to pay for related 
administrative and legal costs, and provides a significant new 
incentive by allowing the laboratory to use royalties for 
related research in the laboratory. Provides for federal 
laboratories to return all unobligated and unexpended royalty 
revenue to the Treasury after the end of the second fiscal year 
after the year which the royalties were earned.

                    section 6. employee activities.

    Clarifies the original congressional intent that rights to 
inventions should be offered to employees when the agency is 
not pursuing them. Permits a federal scientist, or a former 
laboratory employee, in the event that the federal government 
chooses not to pursue the right of ownership to his or her 
invention or otherwise promote its commercialization, to obtain 
or retain title to the invention for the purposes of 
commercialization.

                 section 7. amendment to bayh-dole act.

    Reflects technical changes made by this Act as it affects 
the Bayh-Dole Act (P.L. 96-517).

     section 8. national institute of standards and technology act 
                              amendments.

    Provides authority for the National Institute of Standards 
and Technology (NIST) to have a shuttle bus service between its 
Gaithersburg, Maryland campus and the Shady Grove Metro subway 
station for employees to use in their commute to work. Expands 
the NIST Visiting Committee from 9 members to 15, with the 
requirement that 10 members, increased from 5, shall be from 
United States industry. Increases the cap of postdoctoral 
fellowships from a maximum of 40 to 60 positions per fiscal 
year.

                     section 9. research equipment.

    Clarifies that a laboratory, agency, or department can 
give, loan, or lease excess scientific equipment to public and 
private schools and nonprofit institutions, without regard to 
federal property disposal laws.

                         section 10. personnel.

    Makes permanent the National Institute of Standards and 
Technology (NIST) Personnel Demonstration Project. The project 
has helped NIST recruit and retain the ``best and the 
brightest'' scientists to meet its scientific research and 
measurement standards mission.

              section 11. fastener quality act amendments.

    Amends the Fastener Quality Act (P.L. 101-592), as 
recommended by the Fastener Advisory Committee, focusing on 
mill heat certification, mixing of like-certified fasteners, 
and sale of fasteners with minor non-conformances. The Fastener 
Advisory Committee reported that, without these recommended 
changes, the cumulative burden of compliance costs would be 
close to $1 billion on the fastener industry.

                   section 12. standards conformity.

    Restates existing authorities for National Institute of 
Standards and Technology (NIST) activities in standards and 
conformity assessment. Requires NIST to coordinate among 
federal agencies, survey existing state and federal practices, 
and report back to Congress on recommendations for improvements 
in these activities. Codifies OMB Circular A-119 requiring 
federal agencies to adopt and use standards developed by 
voluntary consensus standards bodies and to work closely with 
those organizations to ensure that the developed standards are 
consistent with agency needs.

                     section 13. sense of congress.

    Provides that it is the sense of Congress that the Malcolm 
Baldrige National Quality Award program offers substantial 
benefits to United States industry, and that all funds 
appropriated for the program should be spent in support of its 
goals.

                          VII. Committee Views

                        section 1. short title.

    H.R. 2196 was originally introduced as the ``Technology 
Transfer Improvements Act of 1995.'' The title of the bill was 
changed to the ``National Technology Transfer and Advancement 
Act of 1995'' to reflect the addition of certain provisions in 
H.R. 1870, the American Technology Advancement Act of 1995, 
among others. The added provisions passed the House in Title VI 
of H.R. 2405, the Omnibus Civilian Science Authorization Act of 
1995.

                          section 2. findings.

    The Committee understands that promoting technology and 
bringing industrial innovation to the marketplace is vital to 
our nation's future. To further this objective and to help 
speed the development of new technologies, the Committee has 
long promoted the concept of Cooperative Research and 
Development Agreements (CRADA) between federal laboratories and 
United States industry.
    The Committee, however, believes commercialization of 
technology and its corollary impact upon our nation's ability 
to compete in the global marketplace ultimately depends on 
actions by industry. United States industry, therefore, must be 
provided assurances that they will be granted sufficient 
rights--such as an exclusive license for a field of use--to 
justify prompt commercialization of resulting inventions 
arising from a CRADA.

                 section 3. use of federal technology.

    The Committee supports continued participation in the 
Federal Laboratory Consortium for Technology Transfer (FLC) to 
develop and facilitate further technology transfer from our 
federal laboratories.

  section 4. title to intellectual property arising from cooperative 
                  research and development agreements.

    The section provides clear guidelines that simplify the 
negotiation of a Cooperative Research and Development Agreement 
(CRADA)--addressing a major concern of private sector 
companies--and, in the process, gives companies greater 
assurance they will share in the benefits of the research they 
fund. The Committee believes the Act will result in a reduction 
of negotiation time and effort required to implement a CRADA 
and an alleviation of the uncertainty that can deter companies 
from working with the government. This will lead to quicker 
transfer and commercialization of laboratory technology.
    Each private sector partner entering into a CRADA with a 
federal laboratory has the ability to require that the CRADA 
provides exclusive intellectual property rights for a pre-
negotiated field of use for any invention occurring under the 
agreement, regardless of whether the invention is made by a 
laboratory employee, a company employee, or a combination 
thereof. Thus, the industrial partner receives, at minimum, the 
option of an exclusive license in a field of use selected by 
the company. The important factor is that industry selects 
which option makes the most sense under the CRADA.
    A company will now have the knowledge that they are assured 
of having no less than an exclusive license in an application 
area of its choosing. The Committee believes these statutory 
guidelines give companies real assurance that they will receive 
important intellectual property out of any CRADA they fund. 
Knowing they have an exclusive claim to the invention will, 
consequently, give a company both an extra incentive to enter 
into a CRADA and the knowledge that they can safely invest 
further in the commercialization of that invention.
    Although a collaborating party is given a statutory option 
to choose an exclusive license for a field of use, agencies may 
still assign full patent title to the company. Agencies 
consulted by the Committee felt they needed to retain that 
flexibility for inventions made by government employees and the 
Act allows them to do so.
    The Committee fully expects that the private sector partner 
enters into a CRADA in order to advance a specific research 
agenda and that the company intends to aggressively pursue, 
whenever appropriate, full commercial opportunities for any new 
discoveries resulting from the CRADA. Should a prviate sector 
partner, for their own reasons, choose not to commercialize a 
resulting invention while another company is interested in 
pursuing its commercial opportunities, the Committee expects 
that the CRADA partner would license the invention rights to 
the other company.
    It is generally contemplated that companies and agencies 
will work together to convert that company's specific research 
agenda into a document stating a particular field of use, for 
which the company is entitled to exclusive intellectual 
property rights. If more than one company is involved, the 
Committee expects each of their research interests be taken 
into consideration in defining the field of use, and that in no 
event will the total rights given to the private sector 
participants under a CRADA be less than they would be if just 
one company was participating in the CRADA.
    In return for the intellectual property rights, the 
government may negotiate for royalties as reasonable 
compensation. The government is always entitled to a non-
exclusive, nontransferable, paid-up license to use the 
invention for its own purposes, since it should not be expected 
both to pay for the research and then to pay for the use of 
that research.
    In addition, the government retains minimal rights to 
require licensing to another company under unusual but 
important circumstances, such as when the invention is needed 
to meet health and safety needs not reasonably satisfied by the 
collaborating party or if the collaborating partner fails to 
comply with the agreement requirements, which the Committee 
believes includes the failure of the private sector partner to 
pursue the invention's commercial opportunities. In compelling 
circumstances of public necessity, the government can invoke 
these limited ``march-in'' rights. The language parallels 
similar provisions in the Bayh-Dole Act covering universities 
and non-profit organizations. These rights assure the public 
that their interests in the new technologies are being 
considered. Also, it should be noted that for purposes of this 
section, any party holding property rights, in inventions 
arising under this section originally assigned to a non-
governmental, non-laboratory party to the CRADA shall be 
considered collaborating parties.
    The government may have rights to use the invention, for 
its legitimate needs, but must protect from public disclosure 
any information classified as privileged or confidential under 
Exemption 4 of the Freedom of Information Act. CRADA 
participants are given the same Freedom of Information Act 
(FOIA) protection they would have as government contractors. 
The Committee believes this is not an unreasonable burden on 
the government and is an important safeguard to industry that 
its investment in the CRADA will be protected.
    The section modifies current law to make sure that 
personnel hired with funds received from the private sector 
partner in a CRADA shall not be subject to full time equivalent 
personnel ceilings and restrictions. It clarifies that agencies 
may use royalties to hire temporary personnel to assist in the 
CRADA or related projects. Currently, many agencies face a cap 
on bringing in additional personnel because of federal 
downsizing. The current language will not affect downsizing, 
but allows those laboratories with sufficient royalty funds, to 
bring in needed temporary staff to make partnerships under the 
Act successful. This is accomplished without requiring 
additional federal funds.
    The Committee is sensitive to the differences between a 
government-owned, government-operated (GOGO) laboratory and a 
government-owned, contractor-operated (GOCO) laboratory, and 
has worked to make sure that private sector partners can 
receive the same benefits from entering a CRADA with either 
type of laboratory. The Committee expects the statute to treat 
both types of laboratories similarly. To this end, it expects 
agencies to modify their prime contracts with contractor-
operated laboratories within 90 days of enactment of this 
legislation to reflect the intent of this Act.
    These modifications are to include delegating to the 
laboratory director the authority to negotiate intellectual 
property provisions for the government, including the right to 
waive rights of ownership in an invention made by a 
collaborating party, giving GOCO employees authority to 
commercialize inventions under the same conditions as employees 
of other government laboratories, and allowing a GOCO to keep 
royalty income for distribution. The section allows the 
managers of a GOCO to use royalty streams to make payments to 
inventors, for the various uses available to a GOGO, or for 
scientific research and development consistent with laboratory 
missions and objectives. The Act does not change the current 
prohibition on providing federal funds to a private sector 
partner in a CRADA.
    It is also the Committee's intent under this Act, as it is 
in the public laws this Act amends, that an agency should 
determine which of its management levels should be considered a 
laboratory for purposes of this Act. It is not the intent of 
the Committee to count as laboratories under this Act, 
individual research laboratories which are part of a larger 
management structure which is also a laboratory. However, the 
Committee approves of decisions of agencies, such as the 
Department of Defense and the National Institutes of Health, to 
treat certain research institutes, centers, and divisions as 
separate laboratories even if they are co-located with other 
institutes, centers, or divisions.
    The Committee believes the clear intellectual property 
guidelines enumerated in this section will simplify the 
negotiation of a CRADA and, in the process, give companies 
greater assurance they will share in the benefits of the 
research they fund. The Committee expects that this change will 
increase the number of collaborative efforts between government 
and industry, reduce the time and effort required to negotiate 
such agreements, and thus speed the transfer of laboratory 
technology and know-how to the American public and the broader 
economy.

 section 5. distribution of income from intellectual property received 
                        by federal laboratories.

    When royalties or other payments are received from the 
licensing and assignment of inventions under a CRADA, the 
section requires that agencies must pay the federal inventor 
each year the first $2,000 and thereafter at least 15% of the 
royalties. In addition, it raises the maximum royalty award per 
year to $150,000 to any one person. The section responds to 
criticism made before the Committee that agencies are not 
sufficiently rewarding laboratory personnel for their 
inventions.
    Royalty sharing was established by the Federal Technology 
Transfer Act of 1986 and was intended to provide an incentive 
for scientists and government-employee inventors at federal 
laboratories to report, develop, and help license inventions 
with commercial potential. The General Accounting Office, in 
its December 1992 report to Congress entitled ``Technology 
Transfer: Barriers Limit Royalty Sharing's Effectiveness'' 
(GAO/RCED-93-6) outlined the scope of the existing limitations. 
The Committee addressed in this section certain royalty sharing 
recommendations made by GAO, affecting distribution of income 
from intellectual property received in a CRADA.
    Currently, the law states only that the federal inventor 
should receive a minimum of 15% of the royalties, with a 
maximum annual award of $100,000. Since few CRADA inventions, 
in practice, generate large annual royalties, only a few 
inventors under current law, consequently, would receive a 
substantial bonus. The Committee believes that providing 
inventors with the first $2,000 earned each year from an 
invention, and then 15% of the remainder, is a better reward 
and incentive.
    The section also provides for the distribution of the 
balance of royalties or other payments received by a 
laboratory. A laboratory may reward personnel, other than the 
inventor, who substantially contribute to the invention. A 
laboratory may pay for related administrative and legal costs, 
such as education, training, intellectual property management, 
and licensing services. In addition, the Act provides a 
significant new incentive by allowing the laboratory to use 
royalties for related scientific research and development, 
consistent with the objectives and mission of the laboratory. A 
laboratory may have until the end of the second fiscal year, 
succeeding the fiscal year in which the royalties and other 
payments were received, to obligate and expend the funds before 
all unused monies are returned to the federal treasury. In 
these times of limited federal fiscal resources, the Committee 
supports these important incentives and administrative 
provisions in this section.

                    section 6. employee activities.

    The section clarifies the original Congressional intent 
that rights to inventions should be given to employees or 
former employees, in certain instances, when the agency does 
not intend to file for a patent or maintain an existing patent. 
The Committee believes this language will correct any confusion 
that has arisen in some agencies regarding whether the 
government can subsequently waive ownership to inventions it 
does not intend to pursue. In the event the federal government 
chooses not to pursue the invention, a federal scientist may 
obtain or retain title to his or her invention for the purposes 
of commercialization.

                 section 7. amendment to bayh-dole act.

    The section restates the current law that the provisions of 
the Stevenson-Wydler Technology Innovation Act of 1980, as 
amended, shall take precedence over the provisions of the Bayh-
Dole Act (P.L. 96-517) to the extent that they permit or 
require disposition of rights in subject inventions which are 
inconsistent with the Act.

     section 8. national institute of standards and technology act 
                              amendments.

Authority for Metro Shuttle

    Currently, the National Institute of Standards and 
Technology (NIST) provides a limited shuttle service between 
its Gaithersburg, Maryland campus and the Shady Grove Metro 
subway station for use only by visitors, official guests, and 
employees traveling on official business to Washington D. C. 
This requested authority would allow all NIST employees to use 
the shuttle to get to, and from, the Shady Grove station for 
their daily commute between work and home.
    The Committee supports NIST's request for this authority. 
Providing authority for a Metro shuttle would not require any 
additional funding and would provide cost savings for the 
federal government since NIST would use the shuttle in lieu of 
individual employee transit subsidies.
    Agencies are currently authorized to provide cash subsidies 
to employees to encourage them to use mass transit. This 
subsidy costs approximately $65 per employee per month. NIST 
does not currently provide these subsidies and will not provide 
them if given this requested authority. NIST proposes to 
encourage the use of mass transit by allowing employees to use 
the existing shuttle service.
    The Committee understands that most NIST employees do not 
currently take advantage of mass transit since NIST is several 
miles from the Shady Grove Metro station and because the 
available commercial bus transportation route from Shady Grove 
to NIST is circuitous and extremely time consuming. The 
Committee further understands, however, that NIST employees 
have indicated they would be willing to take mass transit if 
convenient direct bus transportation from the Metro station 
were made available.
    In addition, the Committee is aware that the National 
Capital Planning Commission and the Maryland National Park and 
Planning Commission are also strongly urging NIST to develop a 
Transportation Management Plan which would encourage the use of 
mass transportation, as well as a plan to encourage car pooling 
and bicycling.

Expansion of the Visiting Committee Membership

    The Committee supports NIST's request to expand its 
Visiting Committee on Advanced Technology (VCAT) from nine 
members to fifteen members. This expansion will ensure the 
VCAT's expertise can match the breadth and diversity of NIST 
programs. Assessments of NIST laboratory programs require a 
panel with broad technical expertise since the labs have eight 
major operating units specializing in different fields of 
science and technology, which focus on different industry 
sectors.
    In addition to this expertise, an ideal panel would include 
a diverse membership representing industry and government 
laboratories. At its present size of nine members, the 
Committee understands that the VCAT is challenged to provide 
the broad oversight and advice needed to best inform NIST's 
programs.

Post-Doctoral Fellows Program

    The Postdoctoral Fellowship Program provides NIST with an 
opportunity to keep abreast of the latest developments in 
academic research. Additionally, the program provides a 
continuing infusion of the nation's outstanding scientists, 
mathematicians, and engineers into the NIST staff, both on a 
temporary basis and by selective recruiting for career 
appointments.
    For recent doctoral graduates, the program provides an 
opportunity for concentrated research in association with NIST 
staff, often as a climax to formal career preparation. In 
return, NIST laboratories receive a stimulus to their industry-
oriented programs from the presence of bright, highly 
motivated, recent doctoral graduates with records of research 
productivity. New ideas, techniques, and approaches to problems 
contribute to the overall research climate of the laboratories.
    The number of postdoctoral fellowships at NIST was last 
increased in the National Bureau of Standards Authorization Act 
of 1987 (P.L. 99-574). An increase in the program to 60 
possible positions, from its current cap of 40 fellowships, 
would permit NIST to enhance some of its programs. The NIST 
Postdoctoral Fellowships Program provides two-year fellowship 
appointments for outstanding scientists and engineers chosen 
through a national competition administered by the National 
Research Council and the National Academy of Sciences. Fellows 
are not to be included in agency personnel ceilings.

                     section 9. research equipment.

    The Committee intends to clarify a laboratory, agency, or 
department's authority to give, loan, or lease excess 
scientific equipment to public and private schools and 
nonprofit institutions, without regard to federal property 
disposal laws. The section clarifies the American Technology 
Preeminence Act of 1991 (P.L. 102-245) that allowed federal 
laboratories to donate their excess scientific equipment 
directly to these institutions, but which was interpreted by 
some agencies as being subject to federal property disposal 
laws, thereby negating its impact.
    The original intention was to eliminate much of the 
paperwork burden which seems to hinder federal laboratories 
from donating such equipment. The cumbersome paperwork 
requirements also discouraged the public and private schools 
from attempting to obtain excess equipment. The section makes 
clear the intent of the original amendment as an alternative, 
free-standing method of distribution of surplus laboratory 
property. The Committee believes this should eliminate further 
problems with its implementation.

                         section 10. personnel.

    The Committee recognizes the success of the National 
Institute of Standards and Technology (NIST) Personnel 
Demonstration Project and its dramatic effect on personnel 
management and administration.
    The NIST Authorization Act for Fiscal Year 1987 (P.L. 99-
574), which originated in this Committee, established the NIST 
Personnel Demonstration Project to create an innovative new 
personnel management system with hiring, classification, 
compensation, and performance methods more like those of the 
private sector. The legislation required NIST to work with OPM 
under the provisions of 5 U.S.C. 4703, which authorized 
demonstration projects for a duration of five years, but 
provided OPM authority to extend a project.
    The success of the five-year pilot effort led OPM to extend 
the NIST Personnel Demonstration Project beyond its original 
five year period to September 30, 1995. The pilot project is 
once again up for renewal, but the Committee feels that the 
concept is now proven and that there is nothing further to be 
gained by treating it as an experiment. Therefore, this section 
makes permanent the current NIST personnel system.
    Feedback from managers and employees, as well as evaluation 
reports from OPM contractors, showed the project had met its 
objectives to recruit and retain quality staff, make 
compensation more competitive, link pay to performance, 
simplify position classification, streamline processing, 
improve the staffing process, get new hires aboard faster, and 
increase the manager's role and accountability in personnel 
management. As a result, NIST is now competing more effectively 
in the labor market. New hires have been made under the system 
that could not have been made previously because NIST could not 
make or match offers for highly-recruited scientists in a 
timely manner. This pay-for-performance system has also 
improved NIST's ability to keep its best personnel.

              section 11. fastener quality act amendments.

    The Committee has adopted recommendations made by the 
Fastener Advisory Committee, amending the Fastener Quality Act 
(P.L. 101-592). The Fastener Advisory Committee, created by 
Congress, determined that the Fastener Quality Act will have an 
unintended, detrimental impact on business. The Fastener 
Advisory Committee reported that without these recommended 
changes, the cumulative burden of costs on the fastener 
industry could be close to $1 billion for absolute compliance 
to the Fastener Quality Act.
    In the 101st Congress, the writers of the original Fastener 
Quality Act set out to answer real threats that counterfeit and 
substandard fasteners posed to our defense readiness and our 
public safety. At the time, the perception in the media was 
that counterfeit and substandard fasteners were mainly imported 
from overseas. In reality, there were many cases where these 
counterfeit and substandard fasteners were manufactured 
domestically.
    Counterfeit and substandard fasteners in most cases are two 
different problems. Counterfeit fasteners penetrated the 
industry by not having correct, and in some cases, no 
manufacturer's identification marks and specification marks. 
These marks are necessary to indicate grade of material and to 
trace the manufacturer of the product. Substandard fasteners 
are products that fail in application either through improper 
manufacturing or misapplication of a product by the function of 
the fastener in its intended use. To address both of these 
problems, fasteners covered by this Act are required to be 
tested, inspected, and certified by accredited laboratories 
prior to distribution into market.
    The Fastener Quality Act requires registration of 
manufacturer's headmarks with the Patent and Trademark Office. 
In addition, conformance letters, which tie the products to its 
manufacturing specifications, are mandatory on all material 
manufactured by foreign sources. Domestic manufacturers are 
required to keep the certification of performance and a copy of 
the test report on file.
    The Committee has adopted recommendations in this section 
for amending the Fastener Quality Act that were submitted in 
March 1992 and again in February 1995 to Congress by the 
Fastener Advisory Committee. Such recommendations were the 
result of nine public meetings by the Fastener Advisory 
Committee involving more than 2,000 pages of transcript 
documenting the need for the amendments. Subsequent to the 
recommendations to Congress, the National Institute of 
Standards and Technology (NIST) published proposed implementing 
regulations for public comment in August 1992. More than 300 
letters were received from the public. Over 70% of the letters 
supported the recommendations of the Fastener Advisory 
Committee for amending the Act.
    The Committee has listened to the Fastener Advisory 
Committee, its Fastener Public Law Task Force, and other 
representatives from the manufacturing, importing, and 
distribution sectors of the United States fastener industry. 
The task force represents 85 percent of all United States 
companies and their suppliers involved in the manufacture, 
distribution, and importation of fasteners and over 100,000 
employees in all 50 states. The Committee, along with NIST, has 
worked to improve the law, while preserving safety and quality.
    The section focuses mainly on mill heat certification, 
mixing of like-certified fasteners, and sale of fasteners, in 
most cases, with minor non-conformances. The Committee believes 
that the section maintains safety, reduces the unnecessary 
burdens on industry, and ensures proper enforcement of the 
Fastener Quality Act.
    In addition, the Committee understands concerns voiced by 
the fastener industry regarding the methods in which fasteners 
may be altered under the Fastener Quality Act. As originally 
passed, the Fastener Quality Act states that fasteners may be 
altered in three ways: by through hardening; by electroplating 
fasteners having tensile strengths of 150,000 psi or higher; or 
by machining. Further in the Fastener Quality Act, it is stated 
that if such an alteration changes the performance of the 
fastener so it no longer conforms to the original standards and 
manufacturer's certification. It is considered a significant 
alteration, and the person who sells such fasteners shall be 
treated as the manufacturer, causing the altered fastener to be 
inspected and tested. The Committee expects these concerns can 
be adequately addressed by removing the specific statutory 
threshold value of altered fasteners from this Act. This will 
permit NIST to establish a threshold value in its implementing 
regulations, based on extensive technical review, following 
NIST's consideration of public comment by members of the 
fastener industry and other interested parties.

                   section 12. standards conformity.

    The Committee understands the crucial role standards play 
in all facets of daily life and in the ability of the nation to 
compete in the global marketplace. The United States, unlike 
the federalized standards system of most other countries, 
relies heavily on a decentralized, private sector-based, 
voluntary consensus standards system. Past federal government 
efforts have concentrated primarily in metrology research, 
maintenance of national measurement standards, including 
calibration services and standard reference materials, 
participation in voluntary standards activities, government-to-
government negotiations, and development of standards for 
governmental purposes. This unique consensus-based voluntary 
system has served us well for over a century and has 
contributed significantly to United States competitiveness, 
health, public welfare, and safety.
    Playing an important role in maintaining a future 
competitiveness edge is the ability to develop standards which 
match the speed of the rapidly changing technology of the 
marketplace. While the Committee is aware that the standards 
role of the federal government is different from that of our 
trading partners, federal agencies are, nevertheless, major 
participants in the United States standards system.
    The key challenge is to update domestic standards 
activities, in light of increased internationalization of 
commerce, and to reduce duplication and waste by effectively 
integrating the federal government and private sector resources 
in the voluntary consensus standards system, while protecting 
its industry-driven nature and the public good. Better 
coordination of federal standards activities is clearly crucial 
to this effort.
    These issues were raised by the National Research Council 
(NRC) in its March, 1995 report entitled, ``Standards, 
Conformity Assessment, and Trade in the 21st Century.'' The NRC 
report recommended that Congress amend NIST's organic act (15 
U.S.C. 271, et seq.) to clarify NIST's lead role in the 
implementation of a government-wide policy of phasing out the 
use of federally-developed standards wherever possible, in 
favor of standards developed by private sector, consensus 
standards organizations, with input from affected agencies. 
This policy is already eliminating duplication of effort and 
conflict between government standards and specifications, and 
widely-accepted industry practices in the same technical areas. 
The Committee, after conducting a June 29, 1995 hearing on the 
issue, adopted the NRC recommendation in this section, making 
it clear NIST has lead agency responsibility for standards and 
conformity assessment activities that are interagency in 
nature.
    The section requires NIST to develop a strategic plan to 
evaluate state and local criteria for accrediting testing 
laboratories and product certifiers, and to take the lead in 
efforts to build a network of mutual recognition agreements 
regarding conformity assessment among federal, state, and local 
authorities, in the interest of eliminating unnecessary 
duplication and burden on industry. The collective impact of 
these changes is to grant NIST a clear statutory mandate to act 
as the lead agency for ensuring federal use of standards 
developed by private consensus standards organizations to meet 
regulatory and procurement needs, and to guide the states 
toward a national, rationalized system of conformity assessment 
and certification.
    NIST is required to report to Congress on its progress and 
the feasibility of such actions by January 1, 1996.
    In addition, the section codifies the present requirements 
of Office of Management and Budget (OMB) Circular A-119 and 
requires agencies, through OMB, to report annually to Congress 
on the reasons for deviating from voluntary consensus standards 
when the head of the agency deems that prospective consensus 
standards are not appropriate to the agency needs. OMB Circular 
A-119 was originally promulgated in 1982 and revised in 1993. 
It requires federal agencies to adopt and use standards, 
developed by voluntary consensus standards bodies, and to work 
closely with these organizations to ensure that developed 
standards are consistent with agency needs. Adherence to OMB 
Circular A-119 is a matter of great concern to industry and the 
Committee since the federal record with regard to the use of 
voluntary consensus standards is mixed, at best.
    It is not the Committee's intent to create a bureaucratic 
reporting requirement, or to slow down standards procurement 
activities within agencies. It is, however, the intent of the 
Committee to make private sector-developed consensus standards 
the rule, rather than the exception. Voluntary, private sector, 
consensus standards can be developed by standards bodies which 
include active government participation with industry. In the 
exceptional situation where federally-developed standards are 
deemed necessary, the Committee requires the agencies to report 
any standards development activities to OMB, via NIST.
    The Committee does recognize the hard work and extensive 
conversion now actively underway in certain agencies, such as 
the Department of Defense, to implement OMB Circular A-119 and 
understands that this codification of the Circular complements 
rather than supplants these activities. The Committee 
understands that these agencies have already implemented 
procedures for high-level internal review of decisions to write 
federal standards. The Committee believes codifying OMB 
Circular A-119, however, should not result in significant 
changes, if any, in these standards development procedures.
    An agency report to OMB required under this section is to 
be clear and informative, but may be summary in nature. The 
Committee is not requiring agencies to fully catalog every 
standards exception in their reporting, but does require that 
those records be accessible to Congress.
    The section will have the effect of assisting agencies in 
focusing their attention on the need to work with these 
voluntary consensus standards bodies, whenever and wherever 
appropriate. It will also assist Congress in monitoring federal 
agency efforts to implement the OMB Circular A-119. 
Additionally, the section is consistent with recommendations 
made to the Committee as part of the NRC testimony regarding 
its March, 1995 report.

                     section 13. sense of congress.

    The Committee supports the goals of the Malcolm Baldrige 
National Quality Award program. With the United States facing 
increased competition in the global marketplace, the 
development of effective quality methods have helped the 
nation's industries to maintain their market share. These 
quality methods have led to greater process control, more 
efficient quality cost measurements and controls, better 
quality management, and fewer manufacturing defects.
    One such method of generating awareness and interest in 
total quality principles and encouraging United States 
businesses to produce globally competitive quality products and 
services is the Malcolm Baldrige National Quality Award. The 
Award was established under the Malcolm Baldrige National 
Quality Improvement Act of 1987 (P.L. 100-107) and was named 
after the late Secretary of Commerce.
    As a result of adherence to the Baldrige Award principles, 
participating companies have created frameworks by which to 
measure their business success, set clear directions, and share 
accountability. Past award recipients have used the Award's 
major tenets and selection criteria to develop a commitment to 
quality and increased competitiveness. The Baldrige Award is 
managed by the National Institute of Standards and Technology 
(NIST).

                       VIII. Summary of Hearings

a. 103rd Congress
The Technology Transfer Improvements Act of 1993

    On September 20, 1993, the House Science, Space, and 
Technology Committee's Subcommittee on Technology, Environment, 
and Aviation held a hearing on H.R. 3590, the Technology 
Transfer Improvements Act of 1993, the legislation upon which 
H.R. 2196 is based. The bill, which had been revised since its 
original introduction, received strong support from the 
Administration and a series of federal agency officials, as 
well as a broad spectrum of industry association 
representatives.
    The following witnesses testified before the subcommittee: 
The Honorable Mary L. Good, Under Secretary for Technology, 
Department of Commerce; Agnes Dover, Deputy General Counsel for 
Technology Transfer and Procurement, presenting testimony for 
the Honorable Charles B. Curtis, Under Secretary of the 
Department of Energy; David M. Ostfeld, Vice President, Career 
Activities Council, Institute of Electrical and Electronics 
Engineers (IEEE); Dr. William Martin, Vice President, 
Technology Transfer, Martin Marietta Energy Systems, Oak Ridge, 
Tennessee; Margaret McNamara, Vice Chairman, Federal Laboratory 
Consortium (FLC); Dr. Roger Werne, Member of the Council on 
Governmental Relations (COGR) and Associate Director of 
Engineering and Technology Transfer, Lawrence Livermore 
National Laboratory, Livermore, California; and Joseph P. 
Allen, Director, Training and Economic Development, National 
Technology Transfer Center, Wheeling, West Virginia.
    Panel 1: Dr. Mary Lowe Good, Undersecretary of Commerce for 
Technology, testified to the Administration's support for the 
bill. She stated that the management of intellectual property 
arising from federally-supported research and development is 
essential to the successful promotion of early 
commercialization of new technology. She also noted that a 
CRADA remains an important avenue for government-industry-
academic interaction and said that under the Clinton 
Administration the focus is moving away from ``technology 
transfer'' and mission spin-off toward development of 
technologies with commercial potential. She stated that in the 
situation of jointly developed technology arising under a 
CRADA, the Administration supports ensuring the collaborating 
party the right to an exclusive license for the government's 
right of ownership in the invention. She also said that such an 
approach means that the private sector is able to effectively 
use the technology and, that in consideration for the 
government's contribution under the CRADA, the government 
retains certain rights and can ensure that the technology can 
be used appropriately in other industrial settings.
    Agnes Dover, Deputy General Counsel for Technology Transfer 
and Procurement of the Department of Energy (DOE), testified to 
DOE's support of the bill. She noted that the average CRADA 
approval process time has been reduced by 50%, and the 
percentage of small business participation in a CRADA has 
increased from 25% to 35% in 1993. She said that DOE believes 
it is important that the exclusive license be for a defined 
field of use. She stated that utilization of a defined field of 
use would enhance other commercialization opportunities by 
enabling the laboratories to commercialize inventions arising 
under a CRADA in a field of use for which the collaborating 
party has no interest, while providing to the collaborating 
party necessary rights in the invention.
    Panel 2: David M. Ostfeld, Vice-President for the Institute 
of Electrical and Electronics Engineers, testified that 
commercialization of technology and industrial innovation by 
business is enhanced by ownership of any invention or 
intellectual property developed in a CRADA and offered his 
support for the bill. Mr. Ostfeld stated that the incentives 
provided by the bill will encourage the commercialization of 
technology and will enhance United States competitiveness, as 
well as provide rewards to federal laboratory inventors.
    Dr. William Martin, Vice President of Technology Transfer 
for Martin Marietta Energy Systems, testified that significant 
improvements can be made to enhance the interaction between the 
federal laboratories and industry by: (1) improving the 
awareness of industry with regard to federal laboratory 
capabilities; (2) striving to increase industry input for 
market-driven projects when appropriate to the funding agency's 
mission; and (3) reducing the barriers that inhibit the process 
of collaboration. He stated that Martin Marietta has 
implemented a number of process improvements that are beginning 
to streamline procedures and reduce the cycle time associated 
with processing a CRADA. He also noted other barriers to the 
CRADA process include the time required for discussion, 
refinement, and development of the technical aspects of the 
work to be performed in a CRADA. Mr. Martin indicated his 
support for the bill.
    Ms. Margaret McNamara, Vice Chairman for the Federal 
Laboratory Consortium, testified that exclusive licenses for 
fields of use are becoming the "best practice" evolving among 
government laboratories because they promote the widest 
possible commercialization of technology by protecting the 
commercial positions of private companies while also preventing 
unproductive monopolization of rights to technology. She stated 
that assigning all intellectual property developed jointly by 
laboratory and private sector employees under a CRADA to the 
private sector partner could substantially reduce the 
commercial exploitation of the technology. Ms. McNamara stated 
that the bill would help promote CRADA development.
    Dr. Roger Werne of the Lawrence Livermore National 
Laboratory testified that licensing laboratory technologies to 
companies in appropriate fields of use becomes essential to 
success. He stated that when intellectual property is jointly 
developed in a CRADA and is exclusively licensed to the 
company, the laboratory retains the right to use that 
intellectual property for government purposes. He also stated 
that this retention is important since many technologies are 
dual-use and may be needed for future national security needs. 
Dr. Werne noted that exclusivity in licensing requires the 
ability to protect proprietary information for the duration of 
the licenses and all legislation should protect the right of 
the company-laboratory partnerships to protect that 
information. He said that a failure to do so may render the 
exclusivity useless. Dr. Werne indicated his support for the 
bill.
    Joseph P. Allen, Director of the National Technology 
Transfer Center, stated the belief by some companies that 
concluding agreements under the law takes too long and that 
agencies are not applying the same standards of exclusivity for 
intellectual property rights. Mr. Allen stated his reluctance 
to see a legislative formula mandating that agencies can not 
spend more than 15% of their royalties for administrative and 
licensing costs, noting that these expenses are a real barrier 
to effective technology transfer. He stated that the bill would 
serve to enhance technology transfer.

b. 104th Congress
Federal Technology Transfer Policies and our Federal 
Laboratories: Methods for Improving Incentives for Technology 
Transfer at Federal Laboratories

    On June 27, 1995, the Subcommittee on Technology and the 
Subcommittee on Basic Research held a joint hearing to receive 
testimony regarding the transfer of technology from federal 
laboratories, with a focus on the draft text of H.R. 2196.
    Witnesses from federal laboratories and from industry 
provided commentary on a circulated draft of H.R. 2196. The 
hearing supplemented the record on the bill already established 
in the previous Congress. Witnesses expressed support for the 
text, as an effective mechanism for stimulating greater 
commercialization of the research being performed by the 
federal laboratories.
    Presenting testimony at the hearing were: Joseph P. Allen, 
Director of Training, Marketing, and Economic Development, 
National Technology Transfer Center, Wheeling, West Virginia; 
Tina McKinley, Chair, Federal Laboratory Consortium, Oak Ridge 
Institute for Science and Education, Oak Ridge, Tennessee; Dr. 
Robert Templin, Jr., President, Virginia's Center for 
Innovative Technology, Herndon, Virginia; John T. Preston, 
Director, Technology Development Association of University 
Technology Managers, Cambridge, Massachusetts; Ambassador C. 
Paul Robinson, Vice President, Laboratory Development, Sandia 
National Laboratory; Richard Marczewski, Manager, Technology 
Transfer Office, National Renewable Energy Laboratory; Dr. 
Peter B. Lyons, Director, Industrial Partnership Office, Los 
Alamos National Laboratory; William Martin, Vice President, 
Office of Technology Transfer, Lockheed-Martin Energy Systems, 
Oak Ridge National Laboratory; Thomas F. Fortin, Vice-
President, Rio Grande Medical Technologies, Inc., Albuquerque, 
New Mexico; William Elkins, Chairman and Director of Product 
Development, Life Enhancement Technologies, Mountain View, 
California; and Michael G. Ury, Vice President, Research & 
Development, Fusion Lighting, Rockville, Maryland.
    Panel 1: Mr. Joseph Allen, Director of Training, Marketing 
and Economic Development at the National Technology Transfer 
Center, commended Mrs. Morella on her legislation. He 
identified three key components of the legislation: (1) it is 
market-driven; (2) there are incentives for laboratories and 
scientists; and (3) intellectual property is given to companies 
that commercialize the technology. He stated the ultimate goal 
should be linking federal laboratories, universities, and state 
and local business assistance programs strategically with 
United States industry in locally led initiatives.
    Dr. Robert Templin, President of Virginia's Center for 
Innovative Technology, stated that assessing the return on 
investment from technology transfer is difficult, but crucial. 
He also commented on the need to get authority to the local 
laboratories so the labs can enter into agreements, allowing 
them to be more responsive to market-driven needs. Dr. Templin 
stated the bill would forge effective partnerships by making 
them more responsive and timely.
    Ms. Tina McKinley, Chair of the Federal Laboratory 
Consortium at the Oak Ridge Institute for Science and 
Education, testified to her support for the legislation, and 
indicated it will contribute to the speed and effectiveness of 
federal technology transfer. She explained that all technology 
is different and volatile, and flexibility is necessary: 
laboratories have to be able to select from a range of 
mechanisms depending on the local situation. Mr. John Preston, 
Director of Technology Development at MIT, representing the 
Association of University Technology Managers, stated that we 
must use technology transfer to remain competitive 
internationally. The net effect of the delay in commercializing 
technology, he added, is that American ideas and inventions are 
adopted by foreign competitors rather than United States 
companies. He said we should, ``even the playing field by 
creating industrial research competitiveness that rivals what 
our foreign competitors are doing.'' He stated that there is a 
critical need for new approaches to technology 
commercialization, and that we need to have the courage to 
lower the bureaucracy that stifles entrepreneurship. Mr. 
Preston indicated his support for the bill.
    Panel 2: Ambassador C. Paul Robinson, Vice President, 
Laboratory Development, Sandia National Laboratory, testified 
on the uniqueness of the Nation's DOE laboratories as ``multi-
problem solvers'' for U.S. industry, which is what industry 
seeks and what the labs can best deliver. Ambassador Robinson 
believes the process by which technology partnerships are 
developed should be streamlined to improve efficiency. In 
response to criticism that technology partnerships were 
giveaways to individual companies, he stated that Sandia is 
increasingly working with a consortium of U.S. companies. He 
stated that the federal laboratories benefit by seeking ways 
their long-term goals can be leveraged by industry's aims. 
Ambassador Robinson stated his support for the principles of 
H.R. 2196.
    Mr. Ronald W. Cochran of Lawrence Livermore National 
Laboratory, testified that industrial partnering is vital to 
the future success of Livermore's programs. He stressed that 
continued congressional leadership is essential to further 
refine the technology transfer system and keep it viable. Mr. 
Cochran also expressed support for the bill as a way to build 
on past experience with industrial partnering. He also stated 
the laboratories must have many options available when seeking 
out technology partnerships and to listen to industry as the 
best way to gauge the effectiveness of partnerships.
    Mr. Richard Marczewski of the National Renewable Energy 
Laboratory (NREL), testified that a CRADA is only one mechanism 
used by his laboratory to transfer technology and that the 
laboratories should have a variety of mechanisms at their 
disposal to bring technology to the market. He further stated 
that NREL plans to increase its use of licensing in the future 
and will actively seek access to foreign markets by acquiring 
foreign patents. He testified that he shares the bill's general 
goals on improving technology transfer.
    Dr. Peter Lyons of Los Alamos National Laboratory, 
testified that reducing the global nuclear danger is Los 
Alamos' central mission and the labs must use the best sources 
of domestic science and technology to meet such a multi-faceted 
goal. Therefore, Dr. Lyons feels alliances with industry are 
very important to sustain and to expand that base of domestic 
science and technology. He feels partnerships with industry 
help Los Alamos' core competencies and agrees with the need for 
flexibility in finding ways to work with industry. He voiced 
support for provisions within the bill which strengthen the 
CRADA mechanism.
    Mr. William Martin of Oak Ridge National Laboratory, 
testified that the bill is a ``win-win'' situation for 
government and the private sector. Mr. Martin stated that 
federal agencies must fulfill their missions as assigned by 
Congress and what should be addressed at this time is how to 
improve the process of technology transfer. One improvement 
which should be made, according to Mr. Martin, is to make 
industry better aware of the applicability of government-
developed technology. Further, he expressed a need to get 
industry involved earlier in the R&D process and reduce 
bureaucratic barriers to technology transfer.
    Panel 3: Mr. Michael Ury, Mr. Tom Fortin, and Mr. William 
Elkins gave the industry perspective in working with federal 
laboratories and the success of technology transfer programs. 
All three supported the CRADA mechanism and the concepts of 
H.R. 2196.

Maintaining Our International Competitiveness: The Importance 
of Standards and Conformity Assessment on Industry

    On June 29, 1995, the Subcommittee on Technology held a 
hearing to receive testimony regarding the importance of 
standards and conformity assessment on industry. Witnesses 
discussed recommendations made in the National Research 
Council's report, released March 1995, entitled ``Standards, 
Conformity Assessment, and Trade in the 21st Century.''
    Panel 1: Dr. Gary Hufbauer, Senior Fellow at the Institute 
for International Economics, testified as Chairman of the 
National Research Council's International Standards, Conformity 
Assessment, and U.S. Trade Policy Project Committee. This 
Committee was responsible for the research and development of 
the NRC report. He stated that the Committee looked at two 
areas: (1) the voluntary consensus standard setting system; and 
(2) conformity assessment, the system for measuring and 
certifying conformance to standards. While the report found 
that the standards development process works well, the NRC 
recommended several changes in the conformity assessment 
system. Dr. Hufbauer said the conformity assessment system has 
unnecessary duplication among federal and local governments. 
The Committee's recommendations, he explained, give the 
National Institute of Standards and Technology (NIST) the lead 
role by assigning them the responsibility of phasing out 
federally-operated conformity assessment activities and asking 
them to work with state and local governments to eliminate 
duplicative accreditation systems.
    Ms. Amy Marasco, Vice President and General Counsel of the 
American National Standards Institute (ANSI), stated that the 
OMB Circular A-119 needs Congressional backing to be effective. 
She said it is in the best interests of the nation to require 
federal employees to participate in the voluntary consensus 
standards process and to require federal agencies to adopt 
voluntary consensus standards whenever it is practical and 
feasible.Dr. Belinda Collins, Director of Standards at NIST, 
testified that the federal government's role in the standards 
process is to be both a partner and a participant with the 
private sector. She stressed that NIST is looking forward to 
coordinating activities in the standards process, but that NIST 
should not be ``policing'' activities. She also stated that 
recognizing NIST as the lead agency for coordinating conformity 
assessment activities is a positive step since there has not 
previously been any federal agency assigned to that task, and 
conformity assessment is much more of a decentralized, 
omplicated activity than standards development.
    Panel 2: Dr. Louis Dixon, Automotive Safety and Engineering 
Standards of Ford Motor Company, testified about the importance 
of efficient conformity assessment. He said manufacturers and 
consumers are significantly affected by the cost of redundant 
conformity assessment activities. He added, ``where 
certifications are required, certifications should be based on 
one assessment, from one location, and should be acceptable 
anywhere in the world.''
    Mr. Gerald Ritterbusch, Manager of Product Safety and 
Environmental Control at Caterpillar, Inc., testified regarding 
changes needed in the conformity assessment process. He stated 
the public sector should handle assessment and accreditation, 
and the federal government can step in at the recognition 
level. Government support, he said, is absolutely essential.Mr. 
Walter Poggi, President of Retlif Testing Laboratories and 
representing American Council of Independent Laboratories 
(ACIL), stated he was testifying as a small businessman and 
that he disagreed with some of the NRC's recommendations. He 
said he does not think it is practical for every federal agency 
to stop performing conformity assessment activities and 
indicated it is counter to the international trend. He also 
felt the standards development process is slow, costly and 
discriminates against small business. Mr. Stephen Oksala, 
Director of Corporate Standards at Unisys Corporation, said he 
agreed with most of the NRC's recommendations and stressed the 
importance of industry leadership in the standards development 
partnership. He said, ``move the standards and conformity 
assessment infrastructures from the public to the private 
sector, and let the federal government concentrate on 
supporting that process through participation, recognition, and 
harmonization.''
    Mr. Rod Lee, Senior Vice President of Lithonia Lighting, 
and representing the National Electrical Manufacturers 
Association (NEMA), provided testimony regarding the lighting 
fixture industry as an example of a government agency mandating 
a standards policy and not using the voluntary consensus 
standard system. He stated that the government is mandating 
that lighting equipment be provided in modular, hard metric 
increments. He explained that the manufacturer's current 
standardized machine tool can not produce the hard metric 
fixture, required by government regulation, and it would be 
extremely expensive to adhere strictly to the federal 
guidelines. In addition, he added, the lighting industry does 
not believe there is any value added to the industry in 
adopting nonstandard equipment only for the government, while 
the private sector has not indicated any demand for the hard 
metric fixtures.

                    IX. Summary of Committee Actions

a. Subcommittee Markup

    On October 18, 1995, the Technology Subcommittee of the 
House Science Committee held a subcommittee markup of H.R. 
2196. One amendment, in the nature of a substitute, was offered 
by Chairwoman Morella.
    The amendment in the nature of a substitute, renamed H.R. 
2196 as ``the National Technology Transfer and Advancement Act 
of 1995.'' The amendment also incorporated the original base 
text of H.R. 2196 and added certain provisions, affecting the 
National Institute of Standards and Technology (NIST), among 
others, which were passed by the House in H.R. 2405, the 
Omnibus Civilian Science Authorization Act of 1995.
    These added provisions included administrative management 
amendments affecting the National Institute of Standards and 
Technology (NIST). The provisions permit NIST to continue 
hiring the ``best and the brightest'' scientists by permanently 
extending the NIST Personnel Demonstration Program and increase 
the cap on its Postdoctoral Fellows Program. Other changes 
included: providing authority for federal laboratories to give 
excess scientific equipment to public and private schools; 
expansion of membership of the NIST Visiting Committee; and 
creating authority for a Metro Shuttle for NIST employees. 
Additional provisions in the amendment related to the Fastener 
Quality Act and the federal use of standards.
    The amendment in the nature of a substitute was adopted by 
voice vote. The Technology Subcommittee then reported, by voice 
vote with a quorum present, H.R. 2196, as amended, to the full 
Committee for consideration.

b. Committee Markup

    On October 25, 1995, the Science Committee convened to 
consider H.R 2196. Four amendments were offered in the 
following order:
    (1) En Bloc amendment offered by Mrs. Morella. The en bloc 
amendment made technical changes suggested by witnesses at the 
June 27, 1995 joint hearing before the Technology and Basic 
Research Subcommittees on H.R. 2196 and federal technology 
transfer. Adopted by voice vote.
    (2) Amendment regarding use of private voluntary standards 
offered by Mrs. Morella. This amendment accomplishes two 
objectives: (1) codifies the present requirements of OMB 
Circular A-119 that requires federal agencies to adopt and use 
standards developed by voluntary consensus standards bodies and 
to work closely with those organizations to ensure that the 
developed standards are consistent with agency needs; and (2) 
requires federal agencies, through the Office of Management and 
Budget, to annually report to Congress on the reasons for 
deviating from voluntary consensus standards when the head of 
the agency deems that those consensus standards are not 
appropriate to the agency's needs. Adopted by voice vote.
    (3) Amendment to strike Section 11 of the Act offered by 
Mr. Brown. The amendment sought to strike Section 11, the 
Fastener Quality Act Amendments. Defeated by voice vote.
    (4) Sense of Congress Amendment offered by Mr. Brown. Sense 
of Congress amendment that the Malcolm Baldrige National 
Quality Award program offers substantial benefits to United 
States industry, and that all funds appropriated for such 
programs should be spent in support of the goals of the 
program. Adopted by voice vote.
    With a quorum present, the Committee adopted and ordered 
reported H.R. 2196, as amended, to the House of Representatives 
by voice vote.

       X. Congressional Budget Office Analysis and Cost Estimates

    Clause 2(l)(3)(c) of rule XI requires each Committee Report 
to include a cost estimate prepared by the Director of the 
Congressional Budget Office, pursuant to section 403 of the 
Congressional Budget Act of 1974, if the cost estimate is 
timely submitted. The following is the Congressional Budget 
Office estimate:
                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, November 8, 1995.
Hon. Robert S. Walker,
Chairman, Committee on Science,
House of Representatives, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 2196, the National Technology Transfer and 
Advancement Act of 1995, as ordered reported by the House 
Committee on Science on October 25, 1995. We estimate that 
implementing this bill would cost a total of $10 million over 
the next five years, assuming appropriation of the necessary 
funds. In addition, provisions regarding the expenditure of 
license-related income would increase direct spending during 
this period but the impacts would not be significant.
    Because H.R. 2196 would affect direct spending, the bill 
would be subject to pay-as-you-go procedures. The bill would 
not affect the budgets of state or local governments.
    Bill Purpose. H.R. 2196 would revise statutory guidelines 
for various Federal activities promoting technology transfer. 
The bill would clarify government policies for cooperative 
research and development agreements (CRADA's), especially with 
regard to rights to intellectual property and allowable 
contributions and expenditures. Policies for the distribution 
of royalties collected by the government under technology 
licensing agreements also would be modified. The bill would 
earmark a higher portion of the annual income from licenses for 
payments to inventors or coinventors, raise the ceiling on the 
amounts that can be paid to inventors, allow government 
laboratories to reinvest any remaining proceeds in related 
research initiatives, and extend the time allowed for agencies 
to obligate the proceeds by one year.
    In addition, H.R. 2196 would provide new directives for the 
National Institute of Standards and Technology (NIST). It would 
authorize an increase in the number of postdoctorate positions 
from 40 to 60, and would authorize the agency to provide 
regular shuttle service connecting the Gaithersburg campus to 
the Washington subway system. The bill also would expand the 
membership of NIST's visiting committee from 9 to 15 members. 
Finally, the bill would amend the provisions of the Fasteners 
Quality Act regarding laboratory accreditation, commingling of 
fasteners, and enforcement of the Act.
    Federal Budgetary Impact. If enacted, H.R. 2196 would 
affect both discretionary spending and direct spending. CBO 
estimates that increasing the number of postdoctorate positions 
at NIST would result in costs to the Federal Government of 
about $2 million in fiscal year 1996 and $10 million over the 
1996-2000 period, assuming appropriation of the necessary 
amounts.
    Giving agencies an additional year to obligate income from 
royalties would increase direct spending because funds that 
currently lapse would now be spent instead of being returned to 
the Treasury. CBO estimates that the impact of this change in 
direct spending would not be significant because the amounts 
that lapse under existing law are small (less than $100,000 a 
year). Changing the guidelines for CRADA's would have no net 
budgetary impact because any additional collections from 
royalties resulting from the new policies would be matched by 
an increase in spending for either payments to inventors or 
related agency programs. Other provisions of the bill would 
have no significant budgetary impact.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp and Rachel Forward, who can be reached at 226-2860.
            Sincerely,
                                            June O'Neill, Director.

cc: Hon. George E. Brown, Jr.,
Ranking Minority Member
                                ------                                


                            December 1, 1995

                               memorandum

TO: Ben Wu
FROM: Kathy Gramp
SUBJECT: Pay-as-you-go effects of H.R. 2196

    On November 8, 1995, CBO provided a cost estimate for H.R. 
2196, the National Technology Transfer and Advancement Act of 
1995, as ordered reported by the House Committee on Science on 
October 25, 1995. As explained in that letter, this bill would 
affect direct spending because of provisions involving income 
and expenditures related to licenses and CRADA's, but we 
estimate that the impact on direct spending would not be 
significant (less than $100,000).
    Section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 sets up pay-as-you-go procedures for 
legislation affecting direct spending or receipts through 1998. 
Because H.R. 2196 would affect direct spending, the bill would 
be subject to pay-as-you-go procedures. At your request, I have 
prepared a table that shows the estimated pay-as-you-go impacts 
described in the November 8 estimate.

------------------------------------------------------------------------
                                        (by fiscal year, in millions of 
                                                   dollars)             
                                     -----------------------------------
                                         1996        1997        1998   
------------------------------------------------------------------------
Change in outlays                             0           0           0 
Change in receipts                          n/a         n/a         n/a 
------------------------------------------------------------------------


    Please give me a call if you have any questions.

                 XI. Effect of Legislation on Inflation

    In accordance with rule XI, clause 2(1)(4) of the Rules of 
the House of Representatives, this legislation is assumed to 
have no inflationary effect on prices and costs in the 
operation of the national economy.

              XII. Oversight Findings and Recommendations

    Clause 2(1)(3)(A) of rule XI requires each Committee Report 
to contain oversight findings and recommendations required 
pursuant to clause 2(b)(1) of rule X. The Committee has no 
oversight findings.

   XIII. Oversight Findings and Recommendations by the Committee on 
                    Government Reform and Oversight

    Clause 2(1)(3)(D) of rule XI requires each Committee Report 
to contain a summary of the oversight findings and 
recommendations made by the House Government Reform and 
Oversight Committee pursuant to clause 4(c)(2) of rule X, 
whenever such findings have been timely submitted. The 
Committee on Science has received no such findings or 
recommendations from the Committee on Government Reform and 
Oversight.

       XIV. Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

           STEVENSON-WYDLER TECHNOLOGY INNOVATION ACT OF 1980

          * * * * * * *

SEC. 11. UTILIZATION OF FEDERAL TECHNOLOGY.

    (a) * * *
          * * * * * * *
    (e) Establishment of Federal Laboratory consortium for 
Technology Transfer.--(1) * * *
          * * * * * * *
    (7)(A) Subject to subparagraph (B), an amount equal to 
0.008 percent of the budget of each Federal agency from any 
Federal source, including related overhead, that is to be 
utilized by or on behalf of the laboratories of such agency for 
a fiscal year referred to in subparagraph (B)(ii) shall be 
transferred by such agency to the National Institute of 
Standards at the beginning of the fiscal year involved. Amounts 
so transferred shall be provided by the Institute to the 
Consortium for the purpose of carrying out activities of the 
Consortium under this subsection.
    [(B) A transfer shall be made by any Federal agency under 
subparagraph (A), for any fiscal year, only if--
            [(i) the amount so transferred by that agency (as 
        determined under such subparagraph) would exceed 
        $10,000; and
            [(ii) such transfer is made with respect to the 
        fiscal year 1987, 1988, 1989, 1990, 1991, 1992, 1993, 
        1994, 1995, or 1996.]
    (B) A transfer shall be made by any Federal agency under 
subparagraph (A), for any fiscal year, only if the amount so 
transferred by that agency (as determined under such 
subparagraph) would exceed $10,000.
          * * * * * * *
    (i) Research Equipment.--The Director of a laboratory, or 
the head of any Federal agency or department, may loan, lease, 
give research equipment that is excess to the needs of the 
laboratory, agency, or department to an educational institution 
or nonprofit organization for the conduct of technical and 
scientific education and research activities. Actions taken 
under this subsection shall not be subject to Federal 
requirements on the disposal of property. Title of ownership 
shall transfer with a gift under the section.

SEC. 12. COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS.

    (a) * * *
    [(b) Enumerated Authority.--Under agreements entered into 
pursuant to subsection (a)(1), a Government-operated Federal 
laboratory, and, to the extent provided in an agency-approved 
joint work statement, a Government-owned, contractor-operated 
laboratory, may (subject to subsection (c) of this section)--
            [(1) accept, retain, and use funds, personnel, 
        services, and property from collaborating parties and 
        provide personnel, services, and property to 
        collaborating parties;
            [(2) grant or agree to grant in advance, to a 
        collaborating party, patent licenses or assignments, or 
        options thereto, in any invention made in whole or in 
        part by a laboratory employee under the agreement, 
        retaining a nonexclusive, nontransferrable, 
        irrevocable, paid-up license to practice the invention 
        or have the invention practiced throughout the world by 
        or on behalf of the Government and such other rights as 
        the Federal laboratory deems appropriate;
            [(3) waive, subject to reservation by the 
        Government of a nonexclusive, irrevocable, paid-up 
        license to practice the invention or have the invention 
        practiced throughout the world by or on behalf of the 
        Government, in advance, in whole or in part, any right 
        of ownership which the Federal Government may have to 
        any subject invention made under the agreement by a 
        collaborating party or employee of a collaborating 
        party;
            [(4) determine rights in other intellectual 
        property developed under an agreement entered into 
        under subsection (a)(1); and
            [(5) to the extent consistent with any applicable 
        agency requirements and standards of conduct, permit 
        employees or former employees of the laboratory to 
        participate in efforts to commercialize inventions they 
        made while in the service of the United States.
A Government-owned, contractor-operated laboratory that enters 
into a cooperative research and development agreement under 
subsection (a)(1) may use or obligate royalties or other income 
accruing to such laboratory under such agreement with respect 
to any invention only (i) for payments to inventors; (ii) for 
the purposes described in section 14(a)(1)(B) (i), (ii), and 
(iv); and (iii) for scientific research and development 
consistent with the research and development mission and 
objectives of the laboratory.]
    (b) Enumerated Authority.--(1) Under an agreement entered 
into pursuant to subsection (a)(1), the laboratory may grant, 
or agree to grant in advance, to a collaborating party patent 
licenses or assignments, or options thereto, in any invention 
made in whole or in part by a laboratory employee under the 
agreement, for reasonable compensation when appropriate. The 
laboratory shall ensure, through such agreement, that the 
collaborating party has the option to choose an exclusive 
license for a field of use for any such invention under the 
agreement or, if there is more than one collaborating party, 
that the collaborating parties are offered the option to hold 
licensing rights that collectively encompass the rights that 
would be held under such an exclusive license by one party. In 
consideration for the Government's contribution under the 
agreement, grants under this paragraph shall be subject to the 
following explicit conditions:
            (A) A nonexclusive, nontransferable, irrevocable, 
        paid-up license from the collaborating party to the 
        laboratory to practice the invention or have the 
        invention practiced throughout the world by or on 
        behalf of the Government. In the exercise of such 
        license, the Government shall not publicly disclose 
        trade secrets or commercial or financial information 
        that is privileged or confidential within the meaning 
        of section 552(b)(4) of title 5, United States Code, or 
        which would be considered as such if it had been 
        obtained from a non-Federal party.
            (B) If a laboratory assigns title or grants an 
        exclusive license to such an invention, the Government 
        shall retain the right--
                    (i) to require the collaborating party to 
                grant to a responsible applicant a 
                nonexclusive, partially exclusive, or exclusive 
                license to use the invention in the applicant's 
                licensed field of use, on terms that are 
                reasonable under the circumstances; or
                    (ii) if the collaborating party fails to 
                grant such a license, to grant the license 
                itself.
            (C) The Government may exercise its right retained 
        under subparagraphs (B) (ii) and (iii) only if the 
        Government finds that--
                    (i) the action is necessary to meet health 
                or safety needs that are not reasonably 
                satisfied by the collaborating party;
                    (ii) the action is necessary to meet 
                requirements for public use specified by 
                Federal regulations, and such requirements are 
                not reasonably satisfied by the collaborating 
                party; or
                    (iii) the collaborating party has failed to 
                comply with an agreement containing provisions 
                described in subsection (c)(4)(B).
    (2) Under agreements entered into pursuant to subsection 
(a)(1), the laboratory shall ensure that a collaborating party 
may retain title to any invention made solely by its employee 
in exchange for normally granting the Government a 
nonexclusive, nontransferable, irrevocable, paid-up license to 
practice the invention or have the invention practiced 
throughout the world by or on behalf of the Government for 
research or other Government purposes.
    (3) Under an agreement entered into pursuant to subsection 
(a)(1), a laboratory may--
            (A) accept, retain, and use funds, personnel, 
        services, and property from a collaborating party and 
        provide personnel, services, and property to a 
        collaborating party;
            (B) use funds received from a collaborating party 
        in accordance with subparagraph (A) to hire personnel 
        to carry out the agreement who will not be subject to 
        full-time-equivalent restrictions of the agency;
            (C) to the extent consistent with any applicable 
        agency requirements or standards of conduct, permit an 
        employee or former employee of the laboratory to 
        participate in an effort to commercialize an invention 
        made by the employee or former employee while in the 
        employment or service of the Government; and
            (D) waive, subject to reservation by the Government 
        of a nonexclusive, irrevocable, paid-up license to 
        practice the invention or have the invention practiced 
        throughout the world by or on behalf of the Government, 
        in advance, in whole or in part, any right of ownership 
        which the Federal Government may have to any subject 
        invention made under the agreement by a collaborating 
        party or employee of a collaborating party.
    (4) A collaborating party in an exclusive license in any 
invention made under an agreement entered into pursuant to 
subsection (a)(1) shall have the right of enforcement under 
chapter 29 of title 35, United States Code.
    (5) A Government-owned, contractor-operated laboratory that 
enters into a cooperative research and development agreement 
pursuant to subsection (a)(1) may use or obligate royalties or 
other income accruing to the laboratory under such agreement 
with respect to any invention only--
            (A) for payments to inventors;
            (B) for a purposes described in clauses (i), (ii), 
        (iii), and (iv) of section 14(a)(1)(B); and
            (C) for scientific research and development 
        consistent with the research and development missions 
        and objectives of the laboratory.
          * * * * * * *

SEC. 14. DISTRIBUTION OF ROYALTIES RECEIVED BY FEDERAL AGENCIES.

    (a) In General.--[(1) Except as provided in paragraphs (2) 
and (4), any royalties or other income received by a Federal 
agency from the licensing or assignment of inventions under 
agreements entered into by Government-operated Federal 
laboratories under section 12, and inventions of Government-
operated Federal laboratories licensed under section 207 of 
title 35, United States Code, or under any other provision of 
law, shall be retained by the agency whose laboratory produced 
the invention and shall be disposed of as follows:
    [(A)(i) The head of the agency or his designee shall pay at 
least 15 percent of the royalties or other income the agency 
receives on account of any invention to the inventor (or co-
inventors) if the inventor (or each such co-inventor) has 
assigned his or her rights in the invention to the United 
States. This clause shall take effect on the date of the 
enactment of this section unless the agency publishes a notice 
in the Federal Register within 90 days of such date indicating 
its election to file a Notice of Proposed Rulemaking pursuant 
to clause (ii).
    [(ii) An agency may promulgate, in accordance with section 
553 of title 5, United States Code, regulations providing for 
an alternative program for sharing royalties with inventors 
under clause (i). Such regulations must--
            [(I) guarantee a fixed minimum payment to each such 
        inventor, each year that the agency receives royalties 
        from that inventor's invention;
            [(II) provide a percentage royalty share to each 
        such inventor, each year that the agency receives 
        royalties from that inventor's invention in excess of a 
        threshold amount;
            [(III) provide that total payments to all such 
        inventors shall exceed 15 percent of total agency 
        royalties in any given fiscal year; and
            [(IV) provide appropriate incentives from royalties 
        for those laboratory employees who contribute 
        substantially to the technical development of a 
        licensed invention between the time of the filing of 
        the patent application and the licensing of the 
        invention.
    [(iii) An agency that has published its intention to 
promulgate regulations under clause (ii) may elect not to pay 
inventors under clause (i) until the expiration of two years 
after the date of the enactment of this Act or until the date 
of the promulgation of such regulations, whichever is earlier. 
If an agency makes such an election and after two years the 
regulations have not been promulgated, the agency shall make 
payments (in accordance with clause (i)) of at least 15 percent 
of the royalties involved, retroactive to the date of the 
enactment of this Act. If promulgation of the regulations 
occurs within two years after the date of the enactment of this 
Act, payments shall be made in accordance with such 
regulations, retroactive to the date of the enactment of this 
Act. The agency shall retain its royalties until the inventor's 
portion is paid under either clause (i) or (ii). Such royalties 
shall not be transferred to the agency's Government-operated 
laboratories under subparagraph (B) and shall not revert to the 
Treasury pursuant to paragraph (2) as a result of any delay 
caused by rulemaking under this subparagraph.
    [(B) The balance of the royalties or other income shall be 
transferred by the agency to its Government-operated 
laboratories, with the majority share of the royalties or other 
income from any invention going to the laboratory where the 
invention occurred; and the funds so transferred to any such 
laboratory may be used or obligated by that laboratory during 
the fiscal year in which they are received or during the 
succeeding fiscal year--
            [(i) for payment of expenses incidental to the 
        administration and licensing of inventions by that 
        laboratory or by the agency with respect to inventions 
        which occurred at that laboratory, including the fees 
        or other costs for the services of other agencies, 
        persons, or organizations for invention management and 
        licensing services;
            [(ii) to reward scientific, engineering, and 
        technical employees of that laboratory, including 
        payments to inventors and developers of sensitive or 
        classified technology, regardless of whether the 
        technology has commercial applications;
            [(iii) to further scientific exchange among the 
        Government-operated laboratories of the agency; or
            [(iv) for education and training of employees 
        consistent with the research and development mission 
        and objectives of the agency, and for other activities 
        that increase the licensing potential for transfer of 
        the technology of the laboratories of the agency.
Any of such funds not so used or obligated by the end of the 
fiscal year succeeding the fiscal year in which they are 
received shall be paid into the Treasury of the United States.]
(1) Except as provided in paragraphs (2) and (4), any royalties 
or other payments received by a Federal agency from the 
licensing and assignment of inventions under agreements entered 
into by Federal laboratories under section 12, and from the 
licensing of inventions of Federal laboratories under section 
207 of title 35, United States Code, or under any other 
provision of law, shall be retained by the laboratory which 
produced the invention and shall be disposed of as follows:
            (A)(i) The head of the agency or laboratory, or 
        such individual's designee, shall pay each year the 
        first $2,000, and thereafter at least 15 percent, of 
        the royalties or other payments to the inventor or 
        coinventors.
            (ii) An agency or laboratory may provide 
        appropriate incentives, from royalties, or other 
        payments, to laboratory employees who are not an 
        inventor of such inventions but who substantially 
        increased the technical value of such inventions.
            (iii) The agency or laboratory shall retain the 
        royalties and other payments received from an invention 
        until the agency or laboratory makes payments to 
        employees of a laboratory under clause (i) or (ii).
            (B) The balance of the royalties or other payments 
        shall be transferred by the agency to its laboratories, 
        with the majority share of the royalties or other 
        payments from any invention going to the laboratory 
        where the invention occurred. The royalties or other 
        payments so transferred to any laboratory may be used 
        or obligated by that laboratory during the fiscal year 
        in which they are received or during the succeeding 
        fiscal year--
                    (i) to reward scientific, engineering, and 
                technical employees of the laboratory, 
                including developers of sensitive or classified 
                technology, regardless of whether the 
                technology has commercial applications;
                    (ii) to further scientific exchange among 
                the laboratories of the agency;
                    (iii) for education and training of 
                employees consistent with the research and 
                development missions and objectives of the 
                agency or laboratory, and for other activities 
                that increase the potential for transfer of the 
                technology of the laboratories of the agency;
                    (iv) for payment of expenses incidental to 
                the administration and licensing of 
                intellectual property by the agency or 
                laboratory with respect to inventions made at 
                that laboratory, including the fees or other 
                costs for the services of other agencies, 
                persons, or organizations for intellectual 
                property management and licensing services; or
                    (v) for scientific research and development 
                consistent with the research and development 
                missions and objectives of the laboratory.
            (C) All royalties or other payments retained by the 
        agency or laboratory after payments have been made 
        pursuant to subparagraphs (A) and (B) that is 
        unobligated and unexpended at the end of the second 
        fiscal year succeeding the fiscal year in which the 
        royalties and other payments were received shall be 
        paid into the Treasury.
    (2) If, after payments to inventors under paragraph (1), 
the royalties or other payments received by an agency in any 
fiscal year exceed 5 percent of the budget of the Government-
operated laboratories of the agency for that year, 75 percent 
of such excess shall be paid to the Treasury of the United 
States and the remaining 25 percent may be used or obligated 
[for the purposes described in clauses (i) through (iv) of 
paragraph (1)(B) during that fiscal year or the succeeding 
fiscal year] under paragraph (1)(B). Any funds not so used or 
obligated shall be paid into the Treasury of the United States.
    (3) Any payment made to an employee under this section 
shall be in addition to the regular pay of the employee and to 
any other awards made to the employee, and shall not affect the 
entitlement of the employee to any regular pay, annuity, or 
award to which he is otherwise entitled or for which he is 
otherwise eligible or limit the amount thereof. Any payment 
made to an inventor as such shall continue after the inventor 
leaves the laboratory or agency. Payments made under this 
section shall not exceed [$100,000] $150,000 per year to any 
one person, unless the President approves a larger award (with 
the excess over [$100,000] $150,000 being treated as a 
Presidential award under section 4504 of title 5, United States 
Code).
    (4) A Federal agency receiving royalties or other [income] 
payments as a result of invention management services performed 
for another Federal agency or laboratory under section 207 of 
title 35, United States Code, may retain such royalties or 
[income] payments to the extent required to offset [the payment 
of royalties to inventors] payments to inventors under clause 
(i) of paragraph (1)(A), costs and expenses incurred under 
clause [(i)] (iv) of paragraph (1)(B), and the cost of foreign 
patenting and maintenance for any invention of the other 
agency. All royalties and other [income] payments remaining 
after [payment of the royalties,] offsetting the payments to 
inventors, costs, and expenses described in the preceding 
sentence shall be transferred to the agency for which the 
services were performed, for distribution in accordance with 
[clauses (i) through (iv) of] paragraph (1)(B).
    (b) Certain Assignments.--If the invention involved was one 
assigned to the Federal agency--
            [(1) by a contractor, grantee, or participant in a 
        cooperative agreement with the agency, or]
            (1) by a contractor, grantee, or participant, or an 
        employee of a contractor, grantee, or participant, in 
        an agreement or other arrangement with the agency, or
          * * * * * * *

SEC. 15. EMPLOYEE ACTIVITIES.

    (a) In General.--If a Federal agency which has [the right 
of ownership to an invention under this Act] ownership of or 
the right of ownership to an invention made by a Federal 
employee does not intend to file for a patent application or 
otherwise to promote commercialization of such invention, the 
agency shall allow the inventor, if the inventor is a 
Government employee or former employee who made the invention 
during the course of employment with the Government, to obtain 
or retain title to the invention (subject to reservation by the 
Government of a nonexclusive, nontransferrable, irrevocable, 
paid-up license to practice the invention or have the invention 
practiced throughout the world by or on behalf of the 
Government). In addition, the agency may condition the 
inventor's right to title on the timely filing of a patent 
application in cases when the Government determines that it has 
or may have a need to practice the invention.
          * * * * * * *
                              ----------                              


              SECTION 210 OF TITLE 35, UNITED STATES CODE

Sec. 210. Precedence of chapter

    (a) * * *
          * * * * * * *
    (e) The provisions of the Stevenson-Wydler Technology 
Innovation Act of 1980[, as amended by the Federal Technology 
Transfer Act of 1986,] shall take precedence over the 
provisions of this chapter to the extent that they permit or 
require a disposition of rights in subject inventions which is 
inconsistent with this chapter.

                              ----------                              


           NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY ACT

          * * * * * * *

                establishment, functions, and activities

    Sec. 2. (a) There is established within the Department of 
Commerce a science, engineering, technology, and measurement 
laboratory to be known as the National Institute of Standards 
and Technology (hereafter in this Act referred to as the 
``Institute'').
    (b) The Secretary of Commerce (hereafter in this Act 
referred to as the ``Secretary'') acting through the Director 
of the Institute (hereafter in this Act referred to as the 
``Director'') and, if appropriate, through other officials, is 
authorized to take all actions necessary and appropriate to 
accomplish the purposes of this Act, including the following 
functions of the Institute--
            (1) to assist industry in the development of 
        technology and procedures needed to improve quality, to 
        modernize manufacturing processes, to ensure product 
        reliability, manufacturability, functionality, and 
        cost-effectiveness, and to facilitate the more rapid 
        commercialization, especially by small- and medium-
        sized companies throughout the United States, of 
        products based on new scientific discoveries in fields 
        such as automation, electronics, advanced materials, 
        biotechnology, and optical technologies;
            (2) to develop, maintain, and retain custody of the 
        national standards of measurement, and provide the 
        means and methods for making measurements consistent 
        with those standards[, including comparing standards 
        used in scientific investigations, engineering, 
        manufacturing, commerce, industry, and educational 
        institutions with the standards adopted or recognized 
        by the Federal Government];
            (3) to compare standards used in scientific 
        investigations, engineering, manufacturing, commerce, 
        industry, and educational institutions with the 
        standards adopted or recognized by the Federal 
        Government and to coordinate the use by Federal 
        agencies of private sector standards, emphasizing where 
        possible the use of standards developed by private, 
        consensus organizations;
            [(3)] (4) to enter into contracts, including 
        cooperative research and development arrangements, in 
        furtherance of the purposes of this Act;
            [(4)] (5) to provide United States industry, 
        Government, and educational institutions with a 
        national clearinghouse of current information, 
        techniques, and advice for the achievement of higher 
        quality and productivity based on current domestic and 
        international scientific and technical development;
            [(5)] (6) to assist industry in the development of 
        measurements, measurement methods, and basic 
        measurement technology;
            [(6)] (7) to determine, compile, evaluate, and 
        disseminate physical constants and the properties and 
        performance of conventional and advanced materials when 
        they are important to science, engineering, 
        manufacturing, education, commerce, and industry and 
        are not available with sufficient accuracy elsewhere;
            [(7)] (8) to develop a fundamental basis and 
        methods for testing materials, mechanisms, structures, 
        equipment, and systems, including those used by the 
        Federal Government;
            [(8)] (9) to assure the compatibility of United 
        States national measurement standards with those of 
        other nations;
            [(9)] (10) to cooperate with other departments and 
        agencies of the Federal Government, with industry, with 
        State and local governments, with the governments of 
        other nations and international organizations, and with 
        private organizations in establishing standard 
        practices, codes, specifications, and voluntary 
        consensus standards;
            [(10)] (11) to advise government and industry on 
        scientific and technical problems; [and]
            [(11)] (12) to invent, develop, and (when 
        appropriate) promote transfer to the private sector of 
        measurement devices to serve special national needs[.]; 
        and
            (13) to coordinate Federal, State, local, and 
        private sector standards conformity assessment 
        activities, with the goal of eliminating unnecessary 
        duplication and complexity in the development and 
        promulgation of conformity assessment requirements and 
        measures.
          * * * * * * *

               visiting committee on advanced technology

    Sec. 10. (a) There is established within the Institute a 
Visiting Committee on Advanced Technology (hereafter in this 
Act referred to as the ``Committee''). The Committee shall 
consist of [nine] 15 members appointed by the Director, at 
least [five] 10 of whom shall be from United States industry. 
The Director shall appoint as original members of the Committee 
any final members of the National Bureau of Standards Visiting 
Committee who wish to serve in such capacity. In addition to 
any powers and functions otherwise granted to it by this Act, 
the Committee shall review and make recommendations regarding 
general policy for the Institute, its organization, its budget, 
and its programs within the framework of applicable national 
policies as set forth by the President and the Congress.
          * * * * * * *
    Sec. 15. In the performance of the functions of the 
Institute the Secretary of Commerce is authorized to undertake 
the following activities: (a) The purchase, repair, and 
cleaning of uniforms for guards; (b) the care, maintenance, 
protection, repair, and alteration of Institute buildings and 
other plant facilities, equipment, and property. (c) the rental 
of field sites and laboratory, office, and warehouse space; (d) 
the purchase of reprints from technical journals or other 
periodicals and the payment of page charges for the publication 
of research papers and reports in such journals; (e) the 
furnishing of food and shelter without repayment therefor to 
employees of the Government at Arctic and Antarctic stations; 
(f) for the conduct of observations on radio propagation 
phenomena in the Arctic or Antarctic regions, the appointment 
of employees at base rates established by the Secretary of 
Commerce which shall not exceed such maximum rates as may be 
specified from time to time in the appropriation concerned, and 
without regard to the civil service and classification laws and 
titles II and III of the Federal Employees Pay Act of 1945; 
[and] (g) the erection on leased property of specialized 
facilities and working and living quarters when the Secretary 
of Commerce determines that this will best serve the interests 
of the Government; and (h) the provision of transportation 
services for employees of the Institute between the facilities 
of the Institute and nearby public transportation, 
notwithstanding section 1344 of title 31, United States Code.
          * * * * * * *
    Sec. 19. The Institute in conjunction with the National 
Academy of Sciences, shall establish and conduct a post-
doctoral fellowship program which shall be organized and 
carried out in substantially the same manner as the National 
Academy of Sciences/National Research Council Post-Doctoral 
Research Associate Program that was in effect prior to 1986, 
and which shall include not less than twenty nor more than 
[forty] 60 new fellows per fiscal year.
          * * * * * * *
                              ----------                              


                          FASTENER QUALITY ACT

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fastener Quality Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1)  * * *
          * * * * * * *
            [(4) the sale in commerce of nonconforming 
        fasteners and the use of nonconforming fasteners in 
        numerous critical applications have reduced the combat 
        readiness of the Nation's military forces, endangered 
        the safety of other Federal projects and activities, 
        and cost both the public and private sectors large sums 
        in connection with the retesting and purging of 
        fastener inventories;]
            [(5)] (4) the purchase and use of nonconforming 
        fasteners stem from material misrepresentations about 
        such fasteners made by certain manufacturers, 
        importers, and distributors engaged in commerce;
            [(6)] (5) current fastener standards of measurement 
        evaluate bolts and other fasteners according to 
        multiple criteria, including strength, hardness, and 
        composition, and provide grade identification markings 
        on fasteners to make the characteristics of individual 
        fasteners clear to purchasers and users;
            [(7)[ (6) current tests required by consensus 
        standards, designed to ensure that fasteners are of 
        standard measure, are adequate and appropriate for use 
        as standards in a program of high-strength fastener 
        testing;
            [(8)] (7) the lack of traceability [by lot number] 
        of fasteners sold in commerce is a serious impediment 
        to effective quality control efforts; and
            [(9)] (8) the health and safety of Americans is 
        threatened by the widespread sale in commerce of 
        mismarked, substandard, and counterfeit fasteners, a 
        practice which also harms American manufacturers, 
        importers, and distributors of safe and conforming 
        fasteners, and workers in the American fastener 
        industry.
    (b) Purpose.--In order to protect public safety, to deter 
the introduction of nonconforming fasteners into commerce, to 
improve the traceability of fasteners [used in critical 
applications] in commerce, and generally to provide commercial 
and governmental customers with greater assurance that 
fasteners meet stated specifications, it is the purpose of this 
Act to create procedures for the testing, certification, and 
distribution of certain fasteners used in commerce within the 
United States.

SEC. 3. DEFINITIONS.

    As used in this Act, the term--
            (1) ``alter'' means to alter--
                    (A) by through-hardening,
                    (B) by electroplating of fasteners [having 
                a minimum tensile strength of 150,000 pounds 
                per square inch] having a minimum Rockwell C 
                hardness of 40 or above, or
                    (C) by machining;
            (2) ``consensus standards organization'' means the 
        American Society for Testing and Materials, American 
        National Standards Institute, American Society of 
        Mechanical Engineers, Society of Automotive Engineers, 
        or any other consensus standard-setting organization 
        determined by the Secretary to have comparable 
        knowledge, expertise, and concern for health and safety 
        in the field for which such organization purports to 
        set standards;
          * * * * * * *
            (5) ``fastener'' means--
                    (A) a--
                            (i) screw, nut, bolt, or stud 
                        having internal or external threads, or
          * * * * * * *
                    (B) a screw, nut, bolt, or stud having 
                internal or external threads which bears a 
                grade identification marking required by a 
                standard or specification, or
                    (C) a washer to the extent that it is 
                subject to a standard or specification 
                applicable to a screw, nut, bolt, or stud 
                described in subparagraph (B), [or
                    [(D) any item within a category added by 
                the Secretary in accordance with section 4(b),]
        except that such term does not include any screw, nut, 
        bolt, or stud that is produced and marked as ASTM A 307 
        Grade A or produced in accordance with ASTM F 432;
            (6) ``grade identification marking'' means any 
        symbol appearing on a fastener purporting to indicate 
        that the fastener's base material, strength properties, 
        or performance capabilities conform to a specific 
        standard of a consensus standards organization or 
        [other person] government agency;
          * * * * * * *
            (8) ``Institute'' means the National Institute of 
        [Standard] Standards and Technology;
          * * * * * * *
            [(11) ``original equipment manufacturer'' means a 
        person who uses fasteners in the manufacture or 
        assembly of its products and sells fasteners to 
        authorized dealers as replacement or service parts for 
        its products;]
            [(12)] (11) ``private label distributor'' means a 
        person who contracts with a manufacturer for the 
        fabrication of fasteners bearing the distributor's 
        distinguishing insignia;
            [(13)] (12) ``Secretary'' means the Secretary of 
        Commerce;
            [(14)] (13) ``standards and specifications'' means 
        the provisions of a document published by a consensus 
        standards organization[, a government agency, or a 
        major end-user of fasteners which defines or describes 
        dimensional characteristics, limits of size, acceptable 
        materials, processing, functional behavior, plating, 
        baking, inspecting, testing, packaging, and required 
        markings of any fastener] or a government agency; and
            [(15)] (14) ``through-harden'' means heating above 
        the transformation temperature followed by quenching 
        and tempering for the purpose of achieving a uniform 
        hardness.

[SEC. 4. SPECIAL RULES FOR FASTENERS.

    [(a) Waiver Requirement.--If the Secretary determines that 
any category of fastener is not used in critical applications, 
the Secretary shall waive the requirements of this Act with 
respect to such category.
    [(b) Additional Items.--If the Secretary determines that--
            [(1) a category of screw, nut, bolt, or stud which 
        is not described in section 3(5)(A)(i) or (B),
            [(2) a category of item which is associated with a 
        fastener described in section 3(5)(A), (B), or (C), or
            [(3) a category of item which serves a function 
        comparable to that served by a fastener so described
is used in critical applications, the Secretary may include 
such category under section 3(5)(D) and therefore within the 
definition of fasteners under this Act.
    [(c) Notice and Opportunity for Comments.--The Secretary 
shall provide advance notice and the opportunity for public 
comments prior to making any determination under subsections 
(a) and (b) and shall act through the Director in making any 
such determination.]

SEC. 5. TESTING AND CERTIFICATION OF FASTENERS.

    (a) Requirement.--(1) No fastener shall be offered for sale 
or sold in commerce unless it is part of a lot which--
            (A) conforms to the standards and specifications to 
        which the manufacturer represents it has been 
        manufactured; and
            (B) has been inspected, tested, and certified as 
        provided in [subsections (b) and (c)] subsections (b), 
        (c), and (d) of this section.
    (2)(A) Paragraph (1)(B) of this subsection shall not apply 
to fasteners which are part of a lot of 50 fasteners or less 
if, within 10 working days after the delivery of such 
fasteners, or as soon as practicable thereafter--
            (i) inspection, testing, and certification as 
        provided in [subsections (b) and (c)] subsections (b), 
        (c), and (d) is carried out; and
          * * * * * * *
    (c) Laboratory Report of Testing.--If a laboratory 
performing the inspection and testing under subsection (b)(1) 
determines, as to the characteristics selected under the 
sampling procedures prescribed by the Secretary and based on 
the sample examined, that a lot conforms to the standards and 
specifications to which the manufacturer represents it has been 
manufactured, the laboratory shall provide to the manufacturer 
a written inspection and testing report with respect to such 
lot. The report, which shall be in a form prescribed by the 
Secretary by regulation, shall--
            (1) state the manufacturer's name, the part 
        description, and the lot number and note the grade 
        identification mark and insignia found on the fastener;
            (2) reference the standards and specifications 
        disclosed by the manufacturer with respect to such lot 
        under subsection (b)(1) [or, where applicable, 
        certified by the manufacturer under section 7(c)(1)];
            (3) list the markings and characteristics selected 
        under the Secretary's procedures for testing[, such as 
        the chemical, dimensional, physical, mechanical, and 
        any other] significant characteristics required by the 
        standards and specifications described in paragraph (2) 
        and specify the results of the inspection and testing 
        under subsection (b)(1);
            (4) except as provided in subsection (d), state 
        whether, based on the samples provided as 
        representative of the lot, such lot has been found 
        after such inspection and testing to conform to such 
        standards and specifications; and
            (5) bear the original signature of a laboratory 
        employee or officer determined by the Secretary to be 
        responsible for the accuracy of the report and of the 
        inspection and testing to which it relates.
    (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), that the chemical characteristics of a 
lot conform to the standards and specifications to which the 
manufacturer represents such lot has been manufactured if the 
following requirements are met:
            (1) The coil or heat number of metal from which 
        such lot was fabricated has been inspected and tested 
        with respect to its chemical characteristics by a 
        laboratory accredited in accordance with the procedures 
        and conditions specified by the Secretary under section 
        6.
            (2) Such laboratory has provided to the 
        manufacturer, either directly or through the metal 
        manufacturer, a written inspection and testing report, 
        which shall be in a form prescribed by the Secretary by 
        regulation, listing the chemical characteristics of 
        such coil or heat number.
            (3) The report described in paragraph (2) indicates 
        that the chemical characteristics of such coil or heat 
        number conform to those required by the standards and 
        specifications to which the manufacturer represents 
        such lot has been manufactured.
            (4) The manufacturer demonstrates that such lot has 
        been fabricated from the coil or heat number of metal 
        to which the report described in paragraphs (2) and (3) 
        relates.
In prescribing the form of report required by subsection (c), 
the Secretary shall provide for an alternative to the statement 
required by subsection (c)(4), insofar as such statement 
pertains to chemical characteristics, for cases in which a 
manufacturer elects to use the procedure permitted by this 
subsection.

SEC. 6. LABORATORY ACCREDITATION.

    (a) Establishment of Accreditation Program.--(1) [Within 
180 days after the date of enactment of this Act, the] The 
Secretary, acting through the Director, shall issue regulations 
which shall include--
            (A)  * * *
          * * * * * * *

SEC. 7. SALE OF FASTENERS SUBSEQUENT TO MANUFACTURE.

    [(a) Domestically Produced Fasteners.--It shall be unlawful 
for a manufacturer to sell any shipment of fasteners (except 
fasteners for which the Secretary has waived the requirements 
of this Act pursuant to section 4) which are manufactured in 
the United States unless the fasteners are accompanied, at the 
time of delivery, by a written certificate by the manufacturer 
certifying that--
            [(1) the fasteners have been manufactured according 
        to the requirements of the applicable standards and 
        specifications and have been inspected and tested by a 
        laboratory accredited in accordance with the procedures 
        and conditions specified by the Secretary under section 
        6; and
            [(2) an original laboratory testing report 
        described in section 5(c) is on file with the 
        manufacturer, or under such custody as may  be  
        prescribed  by  the  Secretary,  and  available  for 
        inspection.]
    (a) Domestically Produced Fasteners.--It shall be unlawful 
for a manufacturer to sell any shipment of fasteners covered by 
this Act which are manufactured in the United States unless the 
fasteners--
            (1) have been manufactured according to the 
        requirements of the applicable standards and 
        specifications and have been inspected and tested by a 
        laboratory accredited in accordance with the procedures 
        and conditions specified by the Secretary under section 
        6; and
            (2) an original laboratory testing report described 
        in section 5(c) and a manufacturer's certificate of 
        conformance are on file with the manufacturer, or under 
        such custody as may be prescribed by the Secretary, and 
        available for inspection.
          * * * * * * *
    (c) Option For Importers and Private Label Distributors.--
(1)  * * *
    (2) If the importer or private distributor assumes the 
responsibility in writing for the inspection and testing of 
such lot or portion, the provisions of section 5(a) and 
subsections (a) and (b) of this section shall apply to the 
importer or private label distributor in the same manner and to 
the same extent as to a manufacturer; except that the importer 
or private label distributor shall provide to the testing 
laboratory the manufacturer's certificate described under 
paragraph (1) of this subsection.
    (d) Alterations Subsequent to Manufacture.--(1) Any person 
who significantly alters a fastener so that such fastener no 
longer conforms to the description in the relevant 
[certificate] test report issued under section 5(c), and who 
thereafter offers for sale or sells such altered fastener, 
shall be treated as a manufacturer for purposes of this Act and 
shall cause such altered fastener to be inspected and tested 
under section 5 or this section as though it were newly 
manufactured, unless delivery of such fastener to the purchaser 
is accompanied by a written statement noting the original lot 
number, disclosing the subsequent alteration, and warning that 
such alteration may affect the dimensional or physical 
characteristics of the fastener.
    (2) Any person who knowingly sells an altered fastener and 
who did not alter such fastener shall provide to the purchaser 
a copy of the statement required by paragraph (1).
    [(e) Commingling.--(1) Subject to paragraph (2), it shall 
be unlawful for any manufacturer or any person who purchases 
any quantity of fasteners for resale at wholesale to commingle 
like fasteners from different lots in the same container; 
except that such manufacturer or such person may commingle like 
fasteners of the same type, grade, and dimension from not more 
than two tested and certified lots in the same container during 
repackaging and plating operations: Provided, That any 
container which contains like fasteners from two lots shall be 
conspicuously marked with the lot identification numbers of 
both lots.
    [(2) Paragraph (1) does not apply to sales by original 
equipment manufacturers to their authorized dealers for use in 
assembling or servicing  products  produced  by  the  original  
equipment  manufacturers.
    [(f) Subsequent Purchaser.--(1) It shall be unlawful for 
any person to sell fasteners, of any quantity, to any person 
who purchases such fasteners--
            [(A) for sale at wholesale, or
            [(B) for assembling components of a product or 
        structure for sale,
unless the container of fasteners sold is conspicously marked 
with the number of the lot from which such fasteners were 
taken, except that this requirement shall not apply to sales by 
original equipment manufacturers  to  their  authorized  
dealers  for  use  in  assembling or servicing products 
produced by the original equipment manufacturer.
    [(2) If a person who purchases fasteners for purposes other 
than those described in paragraph (1) (A) and (B) so requests 
either prior to the sale or at the time of sale, the seller 
shall conspicuously mark the container of fasteners with the 
lot number from which such fasteners were taken.
    [(g) Regulations.--The Secretary may issue such regulations 
as may be necessary to ensure compliance with the provisions of 
this section.]
    (e) Commingling.--It shall be unlawful for any 
manufacturer, importer, or private label distributor to 
commingle like fasteners from different lots in the same 
container, except that such manufacturer, importer, or private 
label distributor may commingle like fasteners of the same 
type, grade, and dimension from not more than two tested and 
certified lots in the same container during repackaging and 
plating operations. Any container which contains fasteners from 
two lots shall be conspicuously marked with the lot 
identification numbers of both lots.
    (f) Subsequent Purchaser.--If a person who purchases 
fasteners for any purpose so requests either prior to the sale 
or at the time of sale, the seller shall conspicuously mark the 
container of the fasteners with the lot number from which such 
fasteners were taken.
          * * * * * * *

SEC. 9. REMEDIES AND PENALTIES.

    (a)  * * *
          * * * * * * *
    (d) Enforcement.--The Secretary may designate officers or 
employees of the Department of Commerce to conduct 
investigations pursuant to this Act. In conducting such 
investigations, those officers or employees may, to the extent 
necessary or appropriate to the enforcement of this Act, 
exercise such authorities as are conferred upon them by other 
laws of the United States, subject to policies and procedures 
approved by the Attorney General.

SEC. 10. RECORDKEEPING REQUIREMENTS.

    (a) Laboratories.--Laboratories which perform inspections 
and testing under section 5(b) shall retain for [10 years] 5 
years all records concerning the inspection and testing, and 
certification, of fasteners under section 5.
    (b) Manufacturers, Importers, Private Label Distributors, 
and Persons who Make Significant Alterations.--Manufacturers, 
importers, private label distributors, and persons who make 
significant alterations shall retain for [10 years] 5 years all 
records concerning the inspection and testing, and 
certification, of fasteners under section 5, and shall provide 
copies of any applicable laboratory testing report or 
manufacturer's certificate upon request to [any subsequent] the 
subsequent purchaser of fasteners taken from the lot to which 
such testing report or manufacturer's certificate relates.
          * * * * * * *

SEC. 13. REGULATIONS.

    The Secretary shall [within 180 days after the date of 
enactment of this Act] issue such regulations as may be 
necessary to implement this Act.

[SEC. 14. ADVISORY COMMITTEE.

    [Within 90 days after the date of enactment of this Act, 
the Secretary shall appoint an advisory committee consisting of 
representatives of fastener manufacturers, importers, 
distributors, end-users, independent laboratories, and 
standards organizations. The Secretary and Director shall 
consult with the advisory committee--
            [(1) prior to promulgating any regulations under 
        this Act; and
            [(2) in such other matters related to fasteners as 
        the Secretary may determine.]
          * * * * * * *

                     XV. Committee Recommendations

    On October 25, 1995, a quorum being present, the Committee 
on Science favorably reported by voice vote H.R. 2196, the 
National Technology Transfer and Advancement Act of 1995, as 
amended, to the House of Representatives and recommends its 
enactment.

                        XVI. Reports to Congress

    Upon the enactment of this Act, the National Institute of 
Standards and Technology (NIST) shall, by January 1, 1996, 
transmit to the Congress a plan for implementing Section 12 of 
the amendment regarding standards and conformity assessment.

              XVII. Exchanges of Committee Correspondence

                          House of Representatives,
                                     Committee on Commerce,
                                 Washington, DC, November 30, 1995.
Hon. Robert S. Walker,
Chairman, Committee on Science,
House of Representatives, Washington, DC.

    Dear Mr. Chairman:
    On October 25, 1995, the Committee on Science ordered 
reported H.R. 2196, the National Technology Transfer and 
Advancement Act of 1995. As ordered reported by the Science 
Committee, H.R. 2196 contains several provisions that implicate 
the jurisdiction of the Commerce Committee, namely, amendments 
to the Fastener Quality Act.
    As you know, the Commerce Committee has had a longstanding 
jurisdictional interest in the issue of fastener quality and 
the Fastener Quality Act. In the 100th Congress, the Committee 
undertook an investigation of counterfeit and substandard 
fasteners. This investigation resulted in the issuance of a 
unanimously approved Subcommittee report entitled ``The Threat 
from Substandard Fasteners: Is America Losing Its Grip.''
    In the 101st Congress, Congressman Dingell and Congressman 
Roe each introduced separate bills on fastener quality. 
Congressman Dingell and Congressman Roe drafted a composite 
bill, H.R. 3000, which was reported by both the Commerce 
Committee and the Science Committee and ultimately became the 
Fastener Quality Act of 1990.
    It is my understanding that the amendments to the Fastener 
Quality Act proposed in H.R. 2196 are based on the 
recommendations of the industry-government Fastener Public Law 
Task Force. These amendments primarily address three issues: 
heat mill certification; commingling; and minor nonconformance. 
The provisions of H.R. 2196 that amend the Fastener Quality Act 
clearly fall within the jurisdiction of the Commerce Committee.
    Additionally, I acknowledge the jurisdiction of the 
Committee on Science over the provisions in H.R. 2196 that seek 
to promote corporate cooperation in research and development at 
Federal laboratories. A related but distinct issue, the 
commercialization of technologies developed by federally funded 
laboratories, has been the subject of longstanding discourse 
between the Committee on Commerce and the Committee on Science. 
I look forward to obtaining a better understanding of the 
history of this discourse and reserve my right to revisit the 
issue following consideration of this legislation by the full 
House.
    I recognize your desire to bring this legislation before 
the House in an expeditious manner. Therefore, I will not seek 
a sequential referral of the bill. By agreeing not to seek a 
sequential referral, the Commerce Committee does not waive its 
jurisdictional claims. In addition, the Commerce Committee 
reserves its authority to seek equal conferees on these and any 
other provisions of the bill that are within the Commerce 
Committee's jurisdiction during any House-Senate conference 
that may be convened on this legislation. I would seek your 
commitment to support any such request.
    I would appreciate your including this letter as a part of 
the Committee's report on H.R. 2196 and as part of the record 
during consideration of this bill by the House.
    Thank you for your cooperation on this matter.
            Sincerely,
                                   Thomas J. Bliley, Jr., Chairman.

cc:

    Hon. George E. Brown, Jr.,
        Ranking Minority Member,
            Committee on Science

    Hon. John D. Dingell,
        Ranking Minority Member,
            Committee on Commerce

    Mr. Charles W. Johnson, III,
        Parliamentarian
                                ------                                

                          House of Representatives,
                                      Committee on Science,
                                  Washington, DC, December 1, 1995.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.

    Dear Tom:
    I am in receipt of your letter dated November 30, 1995, 
regarding amendments to H.R. 2196, the National Technology 
Transfer and Advancement Act of 1995, which was ordered 
reported by the Committee on Science on October 25, 1995.
    I agree that the provisions to the Fastener Quality Act, 
which have been incorporated into H.R. 2196, fall within the 
jurisdiction of the Commerce Committee, and I thank you for 
your agreement not to seek sequential referral of this bill. 
You have my commitment that I will support any request by your 
Committee for equal conferees on amendments to the Fastener 
Quality Act or other provisions of the legislation which fall 
within the Commerce Committee's jurisdiction should a House-
Senate conference be convened on this legislation.
    Your letter, and this response, will be included as part of 
the Committee's report on H.R. 2196 and will be part of the 
record during consideration of this bill by the full House.
    Thank you for your assistance in expediting consideration 
of this important legislation.
            Cordially,
                                        Robert S. Walker, Chairman.

cc:

    Hon. George E. Brown, Jr.
    Hon. John D. Dingell
    Mr. Charles W. Johnson, III, Parliamentarian

                        XVIII. ADDITIONAL VIEWS

    This Committee has tended to speak with one voice on 
technology transfer matters for two decades, and I hope that 
this tradition can continue. H.R. 2196, the National Technology 
Transfer and Advancement Act, as introduced, clearly follows in 
the tradition of the Bayh-Dole and Stevenson-Wydler Acts, and 
Committee Democrats view positively many of the changes made 
since introduction. These amendments were carefully refined 
over a period of two Congresses in a fully open manner, 
soliciting and considering the views of all concerned. This 
part of the bill is a work product of which every member can be 
proud.
    Unfortunately, the Fastener Quality Act Amendments which 
have been added to this bill have not been handled in the same 
manner. This is unfortunate particularly because these 
amendments are critical to protecting public safety. Three 
Congresses ago, this Committee and the Committee on Energy and 
Commerce wrote the original Fastener Quality Act to answer the 
very real threats that counterfeit imported fasteners were 
posing to our defense preparedness, NASA programs, industrial 
worker safety, and transportation safety. Counterfeit 
fasteners, largely from Taiwan and other East Asian countries, 
were being passed off as high strength bolts, nuts, and wheel 
studs. When these substandard fasteners inevitably failed, 
accidents occurred. Investigations and indictments followed, as 
did extensive Congressional legislative hearings. These led to 
passage of a relatively tough and bipartisanly-supported 
Fastener Quality Act.
    Since then, experience in implementing the new law has led 
to a general recognition that certain parts of the legislation 
impose unnecessary burdens on industry. I would have hoped that 
these needed amendments to the Fastener Quality Act would have 
been developed with the same degree of care as the original 
act. However, this year's consideration of Fastener Quality Act 
amendments has been marked by shortcuts for which we have paid 
the price. There have been no public hearings on the bill and 
no opportunity for Members of the committee to become informed 
about the issues involved in these amendments. Instead, when 
Department of Commerce authorization legislation was considered 
in late Spring, the majority proposed a version of these 
amendments which was portrayed to be substantially the same as 
a series of fastener amendments which had been considered last 
Congress. There turned out to be substantial differences 
between the two versions. Later, on just 24 hours notice, we 
were asked to amend the Committee-passed version of these 
amendments on the floor because, as drafted, the bill's 
enforcement provisions had been omitted. When the provisions 
came back before the Committee on Science as part of this 
legislation, our committee agreed to change one of the 
amendment's key definitions after receiving panic calls from 
various standards and engineering groups. Then, just before 
full committee consideration, we learned of a 17 page position 
paper from a domestic fastener industry group that questioned 
many of the other changes which were added this year. After the 
bill was reported, the top fastener official in the National 
Institute of Standards and Technology admitted that one of this 
paper's criticisms was true; the amendments had inadvertently 
omitted many altered fasteners from coverage.
    The history of this bill amply illustrates the perils of 
rushing through complicated legislation without the benefit of 
hearings and public comment. While I do not disagree with the 
bill's intent, I cannot help but remain concerned that there 
may be additional problems lurking in this bill which we have 
not been able to catch in this truncated process. I can only 
hope that we have not inadvertently reopened the floodgates for 
phony fasteners and a renewed threat to public safety.
                                               George E. Brown, Jr.
               XIX. Proceedings from Subcommittee Markup


SUBCOMMITTEE MARKUP ON H.R. 2196--THE TECHNOLOGY TRANSFER IMPROVEMENTS 
                              ACT OF 1995

                              ----------                           


                      WEDNESDAY, OCTOBER 18, 1995

             U.S. House of Representatives,
                              Committee on Science,
                                Subcommittee on Technology,
                                                  Washington, D. C.
    The Subcommittee met at 1:10 p.m. in Room 2318 of the 
Rayburn House Office Building, the Honorable Constance A. 
Morella, Chairwoman of the Subcommittee, presiding.
    Mrs. Morella. This afternoon the Technology Subcommittee 
will be marking up H.R. 2196, the Technology Transfer 
Improvements Act of 1995, a bill which I have introduced, co-
sponsored by Chairman Walker, Committee Ranking Minority Member 
Congressman Brown, and our Subcommittee Ranking Member 
Congressman Tanner.
    [The bill follows:]
    
    
    Mrs. Morella. As we proceed with debate on this measure, I 
am going to be offering an amendment in the nature of a 
substitute renaming H.R. 2196 as the ``National Technology 
Transfer and Advancement Act of 1995.''
    My amendment incorporates the original base text of the 
Technology Transfer Improvements Act, adds certain provisions 
affecting the National Institute of Standards and Technology, 
which was passed by the House in H.R. 2405, the House-passed 
Omnibus Civilian Science Authorization Act of 1995.
    These added provisions are very important to NIST for its 
administration and management of scientific research and 
standards measurement, as we have heard in testimony before 
this subcommittee.
    These provisions include language for NIST expanding its 
ability to continue hiring the ``best and brightest'' 
scientists by permanently extending the NIST Personnel 
Demonstration Program and increasing the cap on the NIST 
Postdoctoral Fellows Program. Other changes include:
    Providing authority to give excess scientific equipment to 
secondary schools; Expansion of membership of the NIST Visiting 
Committee; and Creating authority for a NIST Metro Shuttle for 
employees, among others.
    H.R. 2196 is the product of an effort of many years to 
improve and enhance development of Cooperative Research and 
Development Agreements, CRADAs, undertaken by myself and 
Senator Rockefeller from West Virginia.
    This legislation will help facilitate and speed technology 
cooperation between companies and our Nation's Federal 
laboratories, and thus will benefit our economy and our 
citizens.
    It does so by giving companies and Federal laboratories 
clear guidelines regarding intellectual property rights to 
technology that is developed under cooperative research 
projects--guidelines that will reduce negotiating time and 
alleviate the uncertainty that can deter companies from working 
with the Government.
    Currently the law provides little guidance on intellectual 
property rights that a collaborating partner should receive 
from a CRADA.
    The current law gives agencies very broad discretion on 
this matter, which provides flexibility, but also means that 
both companies and laboratory executives must laboriously 
negotiate patent rights each time they discuss a new CRADA.
    Neither side has much guidance as to what constitutes an 
appropriate agreement regarding intellectual property developed 
under a CRADA.
    Options range from assigning full patent title to the 
company to providing the firm with only a non-exclusive license 
for a narrow field of use.
    We certainly have learned from industry executives that 
this uncertainty, as well as the time and the effort involved 
in negotiating intellectual property in each CRADA was often a 
barrier to working with the Federal laboratories.
    We also learned that companies reluctant to enter into a 
CRADA are equally important to commit additional resources to 
commercialize a CRADA invention unless they have some assurance 
they will control important intellectual property rights.
    So the purpose of the Technology Transfer Improvements Act 
is to provide those assurances to United States Industry that 
they will be granted sufficient rights to justify prompt 
commercialization of resulting inventions arising from CRADAs 
with Federal laboratories.
    The bill would also provide important new incentives to 
Federal laboratory personnel who create new inventions. In this 
way, a CRADA would be made more attractive to both American 
industry and Federal laboratories.
    The bill is important because it comes at a time when both 
Federal labs and industry need to work closer together for 
their mutual benefit and for our national competitiveness.
    So the bill enhances commercialization of technology and 
industrial innovation in the United States by guaranteeing to a 
collaborating partner from industry, in a CRADA, the option to 
choose an exclusive license for a field of use.
    The collaborating party would have the right to use the 
technology in exchange for reasonable compensation to the 
laboratory.
    In addition, the bill provides that the Federal Government 
will retain minimum statutory rights to use the technology for 
its own purposes. If the title holder does not commercialize 
the technology in any field of use, or it is not manufactured 
in the United States, or if there is a public necessity to the 
technology, the Government may exercise its ``march-in rights'' 
provided in the bill.
    The bill would also seek to encourage greater cooperation 
between Federal labs and U.S. industry by enhancing the 
financial incentives and the awards given to Federal laboratory 
scientists for technology that results in marketable products.
    These incentives are paid from the income the laboratories 
receive for commercialized technology and not from tax dollars.
    The hearing record is clear on the need for this bill. On 
June 27th, this Subcommittee and the Basic Research 
Subcommittee held a joint hearing on technology transfer and 
our Federal laboratories with a focus on this Technology 
Transfer Improvements Act.
    The witnesses at the hearing testified very favorably in 
support of the bill. The testimony from the hearing 
supplemented the hearing record on the bill that already had 
been established in the 103rd Congress.
    In the previous Congress, hearings in the House and Senate 
were held on the previous version of the bill, H.R. 3590 and S. 
1537. The bills received strong support from the Administration 
and a series of Federal agency officials, as well as a broad 
spectrum of academicians and industry association 
representatives.
    These hearings have helped to spark a very beneficial 
debate on the current role of our Federal laboratories in our 
Nation's global competitiveness, a topic which we will continue 
to explore in this Congress.
    H.R. 2196 is an important step in the right direction, and 
I welcome the input of all those who have an interest in the 
bill as this Subcommittee examines additional measures to 
enhance our international competitiveness.
    I want to thank all my distinguished colleagues for their 
co-sponsorship of H.R. 2196 and I look forward to working with 
them to expedite enactment of this necessary legislation. I 
urge my colleagues to support it.
    My lengthy opening statement was so that you would get a 
feeling of what the bill does and its background.
    I would now like to yield to the Ranking Minority Member of 
the Subcommittee, Mr. Tanner.
    Mr. Tanner. Thank you, Madam Chairman. I want to thank Ms. 
Johnson and Mr. McHale and others who were here this morning. I 
was in another committee with regard to the Bosnian situation 
and I am sorry I couldn't be here, but I appreciate their 
efforts.
    Mrs. Morella. Did you solve the situation?
    Mr. Tanner. No. I wish it was that simple. Thank you, very 
much. I also am a strong advocate of public-private 
partnerships to promote American competitiveness. I want to 
thank Chairwoman Morella for asking me to be an original co-
sponsor of H.R. 2196, the Technology Transfer Improvements Act 
of 1995.
    It is a step in the right direction, and we ought to do our 
best to assure that government investment in our Federal labs 
provides the maximum return on the taxpayers' investment.
    This bill reaffirms the Chairlady's and my support for 
promoting these government-industry partnerships, although 
unfortunately I think we have our work cut out for us in 
convincing some of our colleagues on this committee of the 
benefits of these partnerships. The Full Committee has sent 
very mixed signals about its position on this issue.
    Today we are marking up a bill to promote technology 
transfer in cooperation between the Federal labs and industry. 
Yet, only last week the House-passed Omnibus Science Bill 
eliminated funding for Cooperative Research and Development 
Agreements, CRADAs, at the Department of Energy saying that 
CRADAs were nothing more than another form of corporate 
welfare. It is obvious that this is an unresolved issue in the 
104th Congress.
    Again I want to thank the Chairwoman of this Subcommittee 
for her efforts in this regard, and only hope that we can work 
together to convince others, who have something to do with the 
work of this Full Committee, of the merit of our position.
    There is a conflict on some of our members. Ms. Lofgren is 
in another markup in another committee now. Therefore, I would 
like to suggest that we dispense with this matter quickly.
    I reserve the right, if I may, for Subcommittee members to 
offer amendments at the Full Committee markup next week. I 
understand that the Chairwoman is amenable to that and may have 
an amendment or two of her own.
    Mrs. Morella. Yes.
    Mr. Tanner. Thank you.
    Mrs. Morella. Hearing no objection, I so move that that can 
be the case, they can be offered.
    [No response.]
    Mrs. Morella. I would like to ask, unless anyone has any 
opening statements they would like to make?
    [No response.]
    Mrs. Morella. I know everybody has got many meetings that 
they are currently in the middle of or going to attend. Then I 
would like to ask unanimous consent that the amendment in the 
nature of a substitute entitled ``The National Technology 
Transfer and Advancement Act of 1995'', which was prepared by 
legislative counsel and previously distributed to the Members, 
be considered as read and open for amendment at any point.
    [The amendment follows:]
    
    
    Mrs. Morella. At the present time, I don't hear any 
amendments at the Subcommittee level. Are there any amendments 
that are to be considered?
    [No response.]
    Mrs. Morella. Hearing none, the question is on the 
amendment in the nature of a substitute. All those in favor 
will say aye.
    [Chorus of ayes.]
    Mrs. Morella. Opposed, say no.
    [No response.]
    Mrs. Morella. In the opinion of the Chair, the ayes have 
it. The question is on the bill H.R. 2196, the Technology 
Transfer Improvements Act of 1995, as amended. All those in 
favor will say aye.
    [Chorus of ayes.]
    Mrs. Morella. Those opposed will say no.
    [No response.]
    Mrs. Morella. In the opinion of the Chair the ayes have it.
    Mr. Tanner. Madam Chairwoman, I move that a clean bill be 
prepared by the Chair for further consideration by the 
Committee.
    Mrs. Morella. The Subcommittee has heard the motion. Those 
in favor will say aye.
    [Chorus of ayes.]
    Mrs. Morella. Those opposed will say no.
    [No response.]
    Mrs. Morella. The motion is agreed to. The bill is reported 
to the Full Committee. Without objection, the Motion to 
Reconsider is laid upon the table.
    This concludes our Subcommittee markup on the measure H.R. 
2196, Technology Transfer Improvements Act of 1995. I thank you 
all for coming.
    [Whereupon, at 1:20 p.m., the markup was concluded and the 
Committee proceeded to further business.]
               XX. Proceedings from Full Committee Markup


 FULL COMMITTEE MARKUP ON H.R. 2196--THE NATIONAL TECHNOLOGY TRANSFER 
                      AND ADVANCEMENT ACT OF 1995

                              ----------                              


                      WEDNESDAY, OCTOBER 25, 1995

             U.S. House of Representatives,
                                      Committee on Science,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:35 a.m. in 
room 2318, Rayburn House Office Building, Hon. Robert S. Walker 
[Chairman of the Committee] presiding.
    The Chairman. Good morning. Pursuant to notice, the 
Committee on Science is meeting today to consider the 
following, H.R. 2196, the National Technology Transfer and 
Advancement Act of 1995, and amendments to the rules governing 
procedure for the Committee on Science for the 104th Congress. 
I ask unanimous consent for the authority to recess. Without 
objection.
    We will now proceed to the consideration of H.R. 2196, the 
National Technology Transfer and Advancement Act of 1995. Let 
me begin by commending Chairwoman Morella and the Members of 
her Technology Subcommittee for favorably reporting H.R. 2196, 
the National Technology Transfer and Advancement Act of 1995, 
to the full Committee.
    This Committee has a rich tradition of promoting technology 
transfer from our national laboratories. Beginning with the 
landmark Stevenson-Wydler Technology Innovation Act of 1980, 
through the Federal Technology Transfer Act of 1986, among 
other bills, the Science Committee has originated legislation 
which has stimulated and increased the quality of technology in 
the United States.
    These acts have permitted the private sector to develop 
cooperative research and development agreements, CRADAs, with 
our Federal laboratories, thereby providing them with access to 
the expertise of the engineers, scientists and facility 
resources of our national labs. In a CRADA, the laboratories 
can contribute people, facilities, equipment and ideas, but not 
funding, while the private sector companies contribute people 
and funding.
    H.R. 2196 provides guidelines that simplify the negotiation 
of CRADAs, addressing a major concern of private sector 
companies, and in the process, give companies greater assurance 
that they will share in the benefits of the research they fund. 
As a result, this bill will reduce the time and effort required 
to develop a CRADA, reduce the uncertainty that can deter 
companies from working with Government, and thus speed the 
transfer and commercialization of laboratory technology to the 
American people.
    The bill is an important step toward making our 
Government's huge investment in science and technology, made 
primarily to carry out important Government missions, more 
useful to interested commercial companies and our economy.
    I especially wish to applaud Chairwoman Morella for her 
leadership on this bill and her efforts to promote technology 
transfer. H.R. 2196 represents the type of legislation which 
this new Congress must undertake. By rethinking and improving 
the method our Government conducts its business, without the 
need to invoke new spending authority, H.R. 2196 signals a new 
approach to Government technology policy legislation.
    I am pleased to join my distinguished colleague, Mr. Brown, 
the Committee's ranking minority member, in co-sponsoring H.R. 
2196. There's been a strong bipartisan support for this bill 
and I look forward to continuing to work with him and the 
members of the minority as we bring the bill to the House 
floor.
    I'm also pleased that 2196 includes amendments of the 
Fastener Quality Act. These amendments are very important to 
the fastener industry, and we need to include these changes to 
the current Act. And the reason for it I think is quite clear. 
This Committee marked up the Fastener Quality Act in 1991. I 
attached an amendment to form the Fastener Advisory Committee.
    This Committee was to determine if the Act would have a 
detrimental impact on business. The Fastener Advisory Committee 
reported that without their recommended changes, the burden of 
cost would be close to $1 billion on the fastener industry. We 
attempted in the last Congress to amend the law, but 
unfortunately we were not successful.
    We had language to pass, we had language pass the House and 
Senate, however, the language did die in conference. This 
Committee addresses the concerns of the Fastener Advisory 
Committee, heat mill certification, mixing of like certified 
fasteners and the sale of minor non-conformance.
    Working with this Congress and NIST, the Fastener Public 
Law Task Force, comprised of members from manufacturing, 
importing and distributing, has worked to improve the law while 
maintaining safety and quality. Public Law Task Force 
represents 85 percent of all the companies involved in the 
manufacture or distribution and importation of fasteners and 
their suppliers in the United States. Combined, the Task Force 
represents over 100,000 employees in all 50 states.
    We have worked with both sides of the aisle, the 
Administration, manufacturers, distributors and importers to 
reach a solution. I ask all my colleagues to approve these 
changes as we take them up today.
    [A copy of H.R. 2196 follows:]
    
    
    The Chairman. The Chair would now recognize Mr. Brown for 
any opening statement he might have.
    Mr. Brown. Thank you, Mr. Chairman. I do have a brief 
statement. As you have already mentioned, I did join with you 
and Mrs. Morella and Mr. Tanner as original co-sponsors of this 
legislation. And as you've also commented, this Committee has 
tended to speak with one voice on technology transfer matters 
for the last two decades, and I hope that tradition can 
continue.
    The Technology Transfer and Advancement Act, as introduced, 
clearly follows in the tradition of the Bayh-Dole and 
Stevenson-Wydler Act, and I view positively many of the changes 
made since it was introduced. Therefore, I congratulate you and 
other members on both sides who have contributed to these 
revisions.
    I am, I do have some concerns about the Fastener Quality 
Act amendments. You and I have been through the development of 
this legislation over a period of several years. We recognize 
the importance of it. You commented already about the very real 
threat that defective fasteners frequently, counterfeit and 
pirated into this country, have caused over the years, and they 
can be the cause of very serious accidents and difficulties of 
many kinds, and that we do need to have an industry supported, 
effective program to preclude getting fake fasteners or 
defective fasteners into the stream of commerce.
    It was my hope that the amendments that we adopted on the 
floor a couple of weeks ago to the Science Authorization Bill, 
which I believe you were the author of, would correct the 
defects. And I'm still not clear whether they do or not. I 
supported them at the time with the understanding that I did 
need further time to study and review the problem.
    Now, I understand we're attaching amendments which are 
similar but not identical to the ones we adopted on the floor, 
that you will propose these amendments as a part of this Act, 
or you will support them. And I'm still not clear what 
additional changes have been made. And I have been given, 
although I have not had a chance to study, substantial amount 
of correspondence indicating that there's still some problems 
in the fastener industry with regard to all the details here.
    Now, I'm not indicating that this is necessarily a fatal 
flaw in the language. And I might be willing to accept any 
number of compromises that would allow us to move an agreed-
upon bill expeditiously. I'm not objecting to that process. But 
I'm still not fully confident that I understand all of the 
changes and the reaction within the fastener community; that 
is, those who are involved with fasteners, to the changes that 
are being proposed. And I'm expressing those reservations to 
you. And when we come to the actual amendment, I might make 
some other suggestions.
    Thank you very much, Mr. Chairman.
    The Chairman. Thank you, Mr. Brown. Mrs. Morella, do you 
wish to be recognized for an opening statement?
    Mrs. Morella. Yes, thank you. I'll try to make it brief. 
I'd ask unanimous consent that an opening statement be included 
in the record, Mr. Chairman, and simply point out that this 
Committee does have a history of encouraging in a strong 
bipartisan manner the transfer of technology and collaboration 
between our Federal laboratories and industry. And this 
particular bill before us that we're going to consider in this 
full Committee, H.R. 2196, follows in that tradition.
    And I do very much commend and indicate my pleasure at 
having the Chairman of the full Committee as a co-sponsor, and 
having the distinguished ranking member, Congressman Brown, 
subcommittee ranking member Congressman Tanner, also as co-
sponsors of the bill before us. And I would certainly welcome 
any other co-sponsors as we prepare the bill for floor 
consideration.
    H.R. 2196 will help facilitate and speed technology 
cooperation between industry and our Federal laboratories, thus 
benefitting our economy and our citizens. In so doing, it gives 
both companies and Federal laboratories clear guidelines 
regarding intellectual property rights to technology developed 
under cooperative research and development agreement, a CRADA, 
guidelines that will reduce negotiating time, and enhance the 
likelihood of prompt commercialization of new inventions. In 
this way, a CRADA is made more attractive to both American 
industry and Federal laboratories.
    The bill is important because it comes at a time when both 
Federal labs and industry need to work closer together for 
their mutual benefit and our national competitiveness. 
Specifically, the bill enhances commercialization of technology 
and industrial innovation in the United States by guaranteeing 
to a collaborating partner from industry in a CRADA the option 
to choose an exclusive license for a field of use. The 
collaborating party would have the right to use the technology 
in exchange for reasonable compensation to the laboratory.
    The bill also provides for adequate minimum statutory 
rights for the Federal Government and the technology. And in 
addition, H.R. 2196 provides important incentives in royalty 
sharing to Federal laboratory personnel who create new 
technologies by enhancing the financial incentives and rewards 
given to Federal laboratory scientists for technology that 
results in marketable products. It's important to note that 
these incentives are paid for from the income the laboratories 
receive for commercialized technology, and not from tax 
dollars.
    So I'm pleased that this bill has a strong support in this 
Congress and in past Congresses from the Administration, a 
series of Federal agency officials, Federal laboratory 
directors, as well as a broad spectrum of academicians, 
industry association representatives, and private sector 
offices. So I urge all my colleagues to support this important 
bill and to report out favorably 2196. I thank you, Mr. 
Chairman, and the members of my subcommittee.
    [The prepared statement of Mrs. Morella and a memorandum 
from Mrs. Morella to Mr. Walker, dated October 19, 1995, 
follow:]


    The Chairman. Mr. Tanner, opening statement?
    Mr. Tanner. Thank you very much, Mr. Chairman. I want to 
thank Mrs. Morella for working with me and asking me to be a 
co-sponsor of H.R. 2196. I think it reaffirms this Committee's 
traditional support for promoting Government-industry 
partnerships. And we also in this bill ensure the Government 
investment in our Federal laboratories provides the maximum 
return on the taxpayers' investment. This bill is a step in 
that direction, and I commend it to the Committee, and I 
appreciate this opportunity.
    Thank you.
    The Chairman. Thank you, Mr. Tanner. Are there any other 
members seeking recognition for an opening statement?
    [No response.]
    The Chairman. If not, then we will open the bill for 
discussion. I ask unanimous consent the bill be considered as 
read and open to amendment at any point. Without objection. I 
ask members to proceed with the amendments in the order of the 
roster. Without objection.
    Mr. Brown. Mr. Chairman?
    The Chairman. Mr.--
    Mr. Brown. I'm unaware of any amendments having been 
noticed. But I do have a couple of amendments.
    The Chairman. Mrs. Morella, I think, has some.
    Mr. Brown. By all means.
    The Chairman. Mrs. Morella?
    Mrs. Morella. Yes, Mr. Chairman. I do have an amendment 
that I ask be accepted as read. It's an en bloc amendment to 
make just technical changes.
    The Clerk. En bloc amendment to H.R. 2196 offered by Mrs. 
Morella--
    Mrs. Morella. Mr. Chairman, I ask that the Committee 
dispense with the further reading of the amendment.
    The Chairman. Without objection. The gentlelady is 
recognized for five minutes to offer your amendment.
    Mrs. Morella. Thank you. It will take much less time than 
that, Mr. Chairman. Because on June 27th, my Technology 
Subcommittee and the Basic Research Subcommittee chaired by my 
distinguished colleague from New Mexico, Mr. Schiff, held a 
joint hearing on technology transfer and on Federal 
laboratories, with a focus on this bill, H.R. 2196. And the 
witnesses at the hearing testified very favorably in support of 
the bill and offered some suggestions to the bill.
    So I've taken some of these suggestions offered at the June 
hearing, incorporated them into the en bloc amendment before 
you. And there's a detailed analysis and description of the 
amendment that has been distributed to all members of the 
Committee.
    Mr. Chairman, the record of the need for this legislation 
is large. I've received input from a great number of 
organizations and individuals regarding H.R. 2196, and to the 
extent practicable, I've attempted to accommodate the concerns 
of all interested parties. And this en bloc amendment follows 
that approach. And I urge my colleagues to support the 
amendment.
    [The en bloc amendment offered by Mrs. Morella follows:]
    
    
    The Chairman. Is there further discussion of the amendment?
    Mr. Brown. Mr. Chairman?
    The Chairman. Mr. Brown.
    Mr. Brown. Just by way of further explanation, I'm looking 
at the last amendment offered by Mrs. Morella, on page 13, line 
24, amend paragraph (2) to read as follows. That has the effect 
of striking paragraph (A), which inserts ``International 
Organization for Standardization'' after ``Society of 
Automotive Engineers.''
    Why did you originally have the IOS in, and now with your 
technical amendment, you're striking it? Could you just give us 
a little background on that subject?
    The Chairman. I would say to the gentleman, this is all 
things that we have been trying to work with the industry on. 
And it's my understanding that IOS is not a consensus standards 
organization. It's not obligated to resolve negative balance 
and use as a majority by country rule, even when a major 
producing country has voted negative.
    And so therefore, it's thought that this could have a 
detrimental impact. If IOS is given legal blessing as a 
consensus standard organization, it would be in the current 
draft language contained in the Fastener Act Amendments that 
were previously approved by the Committee. And it would 
undermine the consensus standards that were worked out by the 
American Society of Mechanical Engineers, the American Society 
for Testing Materials, the Society of Automotive Engineers, and 
the American Standards, National Standards Institute and 
similar bodies, by employing equal recognition of standards 
adopted by an organization that does not operate by consensus.
    The Standards Advisory Committee did not recommend IOS as a 
consensus standard organization. Inclusion of this draft in the 
original drafts of the Fastener Quality Act amendments was an 
error. And we're trying to correct that at this time.
    Mr. Brown. Thank you very much for that explanation, Mr. 
Chairman.
    The Chairman. Is there further discussion? Mr. Ehlers?
    Mr. Ehlers. Thank you, Mr. Chairman. I would just like to 
add something which applies not just to the amendment, but to 
the bill itself, and I certainly support both the amendment and 
the bill.
    Last Friday I spoke at the University of Chicago at a 50th 
anniversary of two of their major scientific institutes. And 
also on the program was the associate director of Argonne 
Laboratory, who in the course of his speech, talked about 
technology transfer, spoke about all the various programs that 
have been tried through the years for technology transfer, the 
applied technology programs, things of this sort.
    And concluded by saying that in his 20-odd years of 
experience in dealing with this, no other program began to 
approach the effectiveness of the Cooperative Research and 
Development Agreements. And I'm pleased to see this bill 
reinforce those agreements, and in fact, improve them.
    But he made the point by specific numbers in terms of the 
companies they had helped, the jobs that were created. He said 
it was a tremendously successful program for the amount of 
Federal money involved. The industry provided much more of the 
money.
    And furthermore, he said, it was not only beneficial to the 
companies that engaged in CRADAs, but also beneficial to the 
scientists of the laboratory. Because it gave them a focus for 
some of their research.
    So Mr. Chairman, I just wanted to pass those comments on to 
you. And I think they are appropriate to this bill and I think 
indicate the importance of CRADAs.
    Thank you.
    The Chairman. Thank you, Mr. Ehlers. Is there additional 
discussion on the amendment of the gentlelady from Maryland?
    [No response.]
    The Chairman. If not, the Chair would put the question. 
Those in favor will say aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [No response.]
    The Chairman. The ayes have it. The amendment is adopted.
    Mrs. Morella, you have an additional amendment?
    Mrs. Morella. Yes, thank you, Mr. Chairman. This amendment 
accomplishes two objectives. First, it codifies the present 
requirements of OMB Circular A119. It was originally 
promulgated in 1982 and revised in 1993, which requires Federal 
agencies to adopt and use standards developed by voluntary 
standards bodies and work closely with consensual standards 
bodies to ensure that the standards developed by those bodies 
are consistent with agency needs.
    And secondly, it requires agencies to annually report to 
Congress on the reasons for deviating from voluntary consensual 
standards when the head of the agency deems that consensual 
standards aren't appropriate to the agency needs.
    So adherence to OMB Circular A119 is a matter of great 
concern to industry as the Federal record with regard to the 
utilization of voluntary consensual standards is mixed, at 
best. The amendment will have the effect of assisting agencies 
in focusing their attention on the need to work with these 
consensual standards bodies wherever and whenever appropriate. 
And it would assist Congress in monitoring the agencies' 
efforts to implement the OMB Circular A119.
    The amendment is consistent with recommendations that were 
made to our Committee as part of the testimony of the National 
Research Council and quite frankly, it essentially came out of 
their report that was issued in June of this year, on standards 
and conformity assessment in the 21st century.
    Thank you, Mr. Chairman. I urge adoption.
    [The amendment offered by Mrs. Morella follows:]
    
    
    The Chairman. I thank the gentlelady. Is there additional 
discussion of the gentlelady's amendment?
    [No response.]
    The Chairman. If not, the Chair will put the question. 
Those in favor of the amendment will say aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [No response.]
    The Chairman. The ayes have it. The amendment is agreed to.
    Are there additional amendments?
    Mr. Brown. Mr. Chairman?
    The Chairman. Mr. Brown.
    Mr. Brown. Mr. Chairman, I have two additional amendments. 
The first would strike the fastener provisions. And I ask that 
that be distributed at this time.
    The Chairman. The Clerk will distribute the amendment. The 
gentleman will explain his amendment.
    Mr. Brown. Mr. Chairman, as I mentioned in my opening 
remarks, I am seriously concerned about section 11, which 
amends the Fastener Quality Act. While it's universally 
accepted that the Act has some technical problems and a few 
changes are necessary, these changes go much further than what 
was agreed to last year.
    Earlier this month on the floor of the House, when 
confronted with last minute changes in the Fastener amendments, 
I pointed out that there's very little understanding in the 
Congress of what we are being asked to do, and indicated my 
desire that the Committee thoroughly investigate the 
consequences of our action before we agree to a final version.
    Today, after receiving calls from the president of a trade 
association, the general counsel of a standards organization 
and the director of standards for a major engineering society, 
we are correcting our corrections. I wonder how many other 
changes we would want to make if we had given this bill a 
thorough airing.
    And as I think is the case, we have not had a full hearing 
on this in recent months. And I think that a matter of this 
complexity deserves at least some public hearing.
    I have learned in the past couple of days that some of 
these changes are quite controversial among fastener 
distributors. And I ask unanimous consent at this point to 
insert in the record a position paper of the Fastener Quality 
Association which details their concern with this section and 
some miscellaneous material from others who have expressed 
concern.
    The Chairman. Without objection.
    [The position paper of the Fastener Quality Association 
follows:]


    Mr. Brown. Some distributors are also concerned about the 
extent to which the campaign to change the Fastener Quality Act 
has been financed by foreign companies with a vested interest 
in lowering the quality standards they have to meet to export 
their wares to the United States.
    Mr. Chairman, I have trouble understanding why we are 
risking making serious mistakes by rushing through changes in 
the Fastener Quality Act before hearing from all sides. I am 
certainly willing to do what I can to reform the statute after 
we know what direction we should be heading.
    Most of our Committee membership were not in Congress the 
last time we held fastener hearings. I hope they share my 
desire to understand the problem before we have to act. And I 
urge support for my amendment.
    [The amendment offered by Mr. Brown follows:]
    
    
    The Chairman. Thank you, Mr. Brown. The Chair wishes to 
state that this particular language is somewhat different from 
the language that we had on the floor. We have been attempting 
to work with the industry and with the Advisory Council on 
these matters. And I must admit that it is a somewhat moving 
target, as they attempt to deal with some of the issues.
    But I am, I am told National Institutes of Standards and 
Technology does support the amendments that we have in the 
bill, that these are broadly agreed to by the industry, and 
that this is something where, if we do not do the appropriate 
kinds of reforms in this area, that we are going to have a 
tremendous cost to U.S. business. The estimate is about a 
billion dollars of cost to U.S. business if in fact we do not 
approve some of these standards.
    I think that where the Federal Government is involved--in 
regulations that are harmful to the overall profitability of an 
industry within the world economy, and we have the opportunity 
to do something here that changes the standards, so that we can 
be assured of increased competitiveness--I think that's exactly 
the role of this Committee and exactly what we should be doing.
    Now, the gentleman makes the point that there have not been 
hearings in recent months. As the gentleman well knows, this 
has been a longstanding question before this Committee that 
goes back several years, and it has been an evolving kind of 
issue. What we are doing here is essentially using the 
processes that the Committee set forward some years ago for 
understanding the complexities of this problem, namely the 
Advisory Committee, and trying to bring those issues in front 
of us with a, with specific language that has been agreed to.
    I think it would be a mistake for this Committee today to 
pull this language out of the bill and thereby consign this 
language to further investigation, which may in fact result in 
hundreds of millions of dollars of expense to a very vital 
industry. And so I would hope that the Committee would reject 
the gentleman from California's amendment and move ahead with 
something where industry is very much of a mind that these 
reforms are needed.
    Mrs. Morella. Mr. Chairman?
    The Chairman. Mrs. Morella?
    Mrs. Morella. I just want to echo what you said and point 
out the fact that NIST, the National Institute of Standards and 
Technology, has been having many meetings, been in close 
consultation with the Advisory Board, and feel that this is 
appropriate in this bill and would certainly favorably assess 
it.
    The Chairman. Thank you, Mrs. Morella.
    Mr. Brown. Mr. Chairman, may I--
    The Chairman. Mr. Brown?
    Mr. Brown. I just wanted a brief response, but not to 
preclude other members who may want to talk.
    The Chairman. I yield to the gentleman.
    Mr. Brown. Mr. Chairman, I would be happy if I knew that 
NIST was supporting this current language. I do not have 
documentation to that effect, and of course, that may be merely 
because there hasn't been time enough to get it up here or some 
other reason of that sort, which is perfectly innocuous.
    The last communication I have in connection with this Act 
was last year's letter from NIST to Chairman, then-Chairman 
Dingle, expressing opposition to the commingling amendment to 
the Fastener Quality Act. And I don't know whether that's the 
same language as we have here, or is different language.
    I'm merely pointing out that we really do need to be clear, 
since our efforts two weeks ago to amend the Act on the floor 
are now being superseded by another effort to change the Act 
here in Committee on a separate bill, which hopefully would 
correct any mistakes we made in then bill that we took up on 
the floor.
    Now, I would like to expedite this process. I'm not trying 
to delay it. My effort to strike the language at this point 
would merely allow us a reasonable opportunity to see in 
writing everything that we have, and who supports it, and who 
has questions about it. And if we resolve these, we could 
easily add this as an amendment on the floor.
    If you choose to bring this up on suspension, and I think 
it's worthy of suspension, you could unilaterally add the 
agreed language before you take the bill up on the floor. And 
we could deal with it in that fashion. I would not object to 
that kind of a process.
    The Chairman. Well, I would simply say to the gentleman 
that NIST has literally been involved in all the drafting 
sessions on this language. The most recent session they were 
involved in, it was their hope to be able to get a letter up 
here today. They weren't certain how they were going to be able 
to internally take care of that. And therefore, we do not have 
that letter.
    But I want to assure the gentleman that our reason for 
saying that NIST is in fact in favor of this is because they 
literally have been sitting with this as the language has been 
drafted, and have worked with us on coming up with the language 
that's before the Committee today.
    Mr. Brown. If the gentleman would yield further.
    The Chairman. I'd be happy to yield.
    Mr. Brown. I commend the gentleman for following that 
course. And normally, having followed that course, I would 
fully support it. But as you have indicated, I have no personal 
knowledge of what's taken place here. And I have seen the 
efforts to remedy this bill fall afoul of circumstances before.
    Now, if you choose to oppose my amendment and it's 
defeated, which is a logical anticipation, I hope that the 
gentleman would continue to provide, would provide assurance 
that he will continue to give us the information indicating 
that NIST has approved this language, and that the major 
objections from the fastener industry have been addressed in 
some reasonable fashion.
    The Chairman. Obviously, as soon as we receive any kind of 
communication of that type, we would share that with the 
gentleman. The gentleman from Minnesota?
    Mr. Gutknecht. Thank you, Mr. Chairman. I would like to 
speak in opposition to the amendment. This is going to sound a 
bit parochial. I represent in my district one of the largest 
fastener companies in the United States. And this was brought 
to my attention last year. And frankly, they told me from a 
personal business perspective, this law actually works to their 
advantage. It tends to fence out certain people, particularly 
as it relates to some contracts.
    But they said, this is another classic example of a $50 
solution to a $5 problem. I hope that we can proceed at least 
with some amendments. As a matter of fact, I think this 
particular firm would like to see this entire fastener language 
eliminated altogether. Because they said it really doesn't 
achieve the goals it was intended to, creates an awful lot of 
paperwork. And so I hope that we can proceed with the language 
that is in the bill now, and will vote against the Brown 
amendment.
    The Chairman. Thank you, Mr. Gutknecht. Are there 
additional members that wish to be heard on the amendment of 
the gentleman from California?
    Mr. Brown?
    Mr. Brown. Was the gentleman supporting my amendment?
    Mr. Gutknecht. No, the gentleman was opposing your 
amendment. I'd like to see the law repealed altogether. And 
this is only an amendment, apparently that has been agreed to 
by most of the people who are involved.
    Mr. Brown. I see. Thank you very much for that 
clarification.
    The Chairman. The Chair will put the question if there is 
no further discussion. Those in favor of the amendment will say 
aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [Chorus of noes.]
    The Chairman. In the opinion of the Chair, the nos have it. 
The nos have it. The amendment is not agreed to. Does the 
gentleman have an additional amendment?
    Mr. Brown. Mr. Chairman, I have an additional amendment.
    The Chairman. The Clerk will distribute the amendment.
    Mr. Brown. This is an amendment which I trust will be 
accepted by everyone. If I can find it.
    Mr. Chairman, this amendment clearly expresses the sense of 
the Congress that the Malcolm Baldridge National Quality Award 
program offers substantial benefits to U.S. industry and that 
all funds appropriated for such programs should be sent in 
support of the goals of the program.
    The Chairman. Would the gentleman yield?
    Mr. Brown. Yes, certainly.
    The Chairman. The Chair is prepared to accept the amendment 
and know of no opposition to it.
    Mr. Brown. The Chair is very kind. I certainly accept the 
support.
    [The amendment offered by Mr. Brown follows:]
    
    
    The Chairman. I don't want to preclude other people. Is 
there additional discussion on the amendment?
    [No response.]
    The Chairman. If not, the Chair will put the question. 
Those in favor of the amendment will say aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [No response.]
    The Chairman. The ayes have it. The amendment is agreed to. 
Are there any further amendments?
    [No response.]
    The Chairman. Hearing none, the question is on the bill, 
H.R. 2196, the National Technology Transfer and Advancement Act 
of 1995, as amended. Those in favor will say aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [No response.]
    The Chairman. In the opinion of the Chair, the ayes have 
it.
    Mr. Brown. Mr. Chairman, I move that the Committee report 
the bill, H.R. 2196, the National Technology Transfer and 
Advancement Act of 1995, as amended. And furthermore, I move to 
instruct the staff to prepare the legislative report and make 
technical and conforming amendments and the Chairman take all 
necessary steps to bring the bill before the House for 
consideration.
    The Chairman. The Committee has heard the motion. Those in 
favor will say aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [No response.]
    The Chairman. The ayes have it, the motion is agreed to. 
Without objection, the motion to reconsider is laid upon the 
table.
    Mr. Sensenbrenner. Mr. Chairman?
    The Chairman. Mr. Sensenbrenner?
    Mr. Sensenbrenner. Mr. Chairman, I move pursuant to Clause 
1 of Rule 20 of the Rules of the House of Representatives that 
the Committee authorize the Chairman to offer such motions as 
may be necessary in the House to go to conference with the 
Senate on the bill.
    The Chairman. You've heard the motion. Those in favor will 
say aye.
    [Chorus of ayes.]
    The Chairman. Those opposed will say no.
    [No response.]
    The Chairman. The ayes have it. This concludes the markup 
of H.R. 2196.

    [The Amendment Roster follows:]

    
    
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