[Senate Report 104-153]
[From the U.S. Government Publishing Office]



   104th Congress 1st            SENATE                 Report
         Session
                                                       104-153
_______________________________________________________________________



                                     

                                                       Calendar No. 199

          TECHNOLOGY ADMINISTRATION AUTHORIZATION ACT OF 1995

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 1141




  September 29 (legislative day, September 25), 1995.--Ordered to be 
                                printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred fourth congress
                             first session

  LARRY PRESSLER, South Dakota, 
             Chairman
ERNEST F. HOLLINGS, South Carolina   BOB PACKWOOD, Oregon
DANIEL K. INOUYE, Hawaii             TED STEVENS, Alaska
WENDELL H. FORD, Kentucky            JOHN McCAIN, Arizona
J. JAMES EXON, Nebraska              CONRAD BURNS, Montana
JOHN D. ROCKEFELLER IV, West VirginiaSLADE GORTON, Washington
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
RICHARD H. BRYAN, Nevada             OLYMPIA SNOWE, Maine
BYRON L. DORGAN, North Dakota        JOHN ASHCROFT, Missouri
  Patric G. Link, Chief of Staff
Kevin G. Curtin, Democratic Chief 
    Counsel and Staff Director
                                                       Calendar No. 199
104th Congress                                                   Report
                                 SENATE

 1st Session                                                    104-153
_______________________________________________________________________


 
          TECHNOLOGY ADMINISTRATION AUTHORIZATION ACT OF 1995

                                _______


  September 29 (legislative day, September 25), 1995.--Ordered to be 
                                printed

_______________________________________________________________________


      Mr. Pressler, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 1141]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1141) to authorize 
appropriations for the activities of the Under Secretary of 
Commerce for Technology, and for Scientific and Technical 
Research Services and Construction of Research Facilities 
activities of the National Institute of Standards and 
Technology, for fiscal years 1996, 1997, and 1998, and for 
other purposes, having considered the same, reports favorably 
thereon and recommends that the bill do pass.

                          Purpose of the Bill

    The purpose of the bill is to authorize appropriations to 
the Technology Administration (TA) of the Department of 
Commerce (DOC) for each of the fiscal years 1996, 1997, and 
1998 as follows:

          SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION TECHNOLOGY ADMINISTRATION BUDGET SPREADSHEET FOR FISCAL YEARS 1996 TO 1998          
                                                                [In millions of dollars]                                                                
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Fiscal year                           Proposed fiscal year              
                                                                    ------------------------------------------------------------------------------------
                                                                           1995                          1996 Senate      1997 Senate      1998 Senate  
                                                                      appropriation     1996 request    authorization    authorization    authorization 
--------------------------------------------------------------------------------------------------------------------------------------------------------
       National Institute of Standards and Technology (NIST)                                                                                            
Scientific and Technical Research and Services (STRS)..............            247.0            310.0            263.0            263.0            263.0
    Industrial Technology Services (ITS)...........................            439.7            643.0            427.0            427.0            427.0
        Advanced Technology Program (ATP)..........................            361.0            491.0                                                   
        Manufacturing Extension Program (MEP)......................             74.7            147.0                                                   
        Baldridge Quality Award Program............................              4.0              5.0                                                   
Construction of Facilities.........................................             35.0             70.0             60.0             60.0             60.0
                                                                    ------------------------------------------------------------------------------------
      Total, NIST..................................................            700.7          1,023.0            750.0            750.0            750.0
                                                                    ====================================================================================
DoC/TA.............................................................             8.25             14.0              5.0              0.0              0.0
                                                                    ------------------------------------------------------------------------------------
      Total, Technology Administration.............................           708.95          1,037.0            755.0            750.0            750.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

                          Background and Needs

    Technology Administration. Under the leadership of the 
Under Secretary of Commerce for Technology, the Technology 
Administration (TA) provides advice on technology policy, 
supports technology development programs, and disseminates 
technology information. The Undersecretary oversees the three 
major components of the TA: (1) the Office of Technology 
Policy, (2) the National Institute of Standards and Technology 
(NIST), and (3) the National Technical Information Service 
(NTIS). The mission of the Office of Technology Policy is to 
evaluate, develop, and promote policies and programs that 
facilitate private sector innovation and U.S. industrial 
competitiveness. With its FY 1995 budget of $701 million, NIST 
(formerly the Bureau of Standards) is, by far, the largest of 
the three TA activities. NIST conducts in-house research and 
development and standards activities in support of U.S. 
industry. In addition, through its Industrial Technology 
Services account, NIST funds two external technology grant and 
assistance programs: the Advanced Technology Program (ATP), 
which provides grants to high-tech ventures to develop 
technologies with commercial potential, and the Manufacturing 
Extension Partnership (MEP), which provides manufacturing 
assistance to small- and medium-sized businesses through 
regional centers. NIST also manages the Malcolm Baldridge 
National Quality Award, which is given to U.S. companies that 
excel in quality achievement and total quality management. NTIS 
is a self-financed agency that collects and sells to the public 
technical information generated by U.S. government and foreign 
sources.
    In recent years, of all the TA activities, the greatest 
controversy has involved NIST's grant programs--the ATP and the 
MEP. Supporters of the ATP argue it strengthens the U.S. 
economy by providing U.S. companies with a critical helping 
hand by funding commercially relevant research and development 
ventures that private capital sources would be unlikely to 
finance. However, critics of the ATP view it as ``corporate 
welfare'' and believe that the goal of increased U.S. 
competitiveness is better achieved through a combination of 
deregulation, tax reform, tort reform, and more vigorous 
enforcement of trade agreements.
    The MEP has been viewed by critics of NIST in a more 
favorable light. Through its 42 centers (7 funded by NIST and 
35 funded by the Department of Defense's Technology 
Reinvestment Project) and smaller local activities, the MEP 
provides assistance to small-and medium-sized firms seeking to 
modernize their plants. Supporters assert that this is 
precisely the kind of assistance that these firms need, because 
it is difficult for owners and managers of small companies to 
find high-quality, unbiased information, advice, and 
assistance. However, some believe that the MEP concept of using 
extension agents to visit industries to identify and address 
their needs is not a cost-effective model and is particularly 
inefficient in rural states where the agents must travel great 
distances. Its critics also argue that the MEP makes 
insufficient use of advanced computer networking to deliver 
needed technical assistance to U.S. companies.
    Fasterner Quality Act (P.L. 101-592). The Fasterner Quality 
Act requires that fasteners used in critical industrial 
applications (e.g., airplanes, bridges, etc.) be tested in 
accredited labs to insure they meet specifications. To 
facilitate the traceability of substandard fasteners, the Act 
also prohibits manufacturers and distributors from commingling 
fasteners from more than two different lots in the same 
container. In 1992, after five two-day hearings, the Fastener 
Advisory Committee created under the Act determined that the 
legislation was unworkable because it would impose prohibitive 
costs and administrative costs on the industry. The Fastener 
Advisory Committee recommended changes in the Act that would 
(a) allow a manufacturer to establish the chemistry of a 
finished lot of fasteners through a certification provided by 
the provider of the raw material, (b) allow the sale of 
fasteners having minor nonconformances which do not affect 
performance if the purchaser agrees to accept them, and (c) 
permit commingling of fasteners from difficult lots under some 
circumstances.
    In August 1992, NIST published proposed regulations for 
notice and comment to implement the Act. However, NIST has yet 
to promulgate final rules because of the pending deliberations 
in Congress. During the 103rd Congress, the Science 
Subcommittee held a hearing on the proposed changes in the 
Fastener Quality Act. The Senate subsequently approved those 
changes as part of a larger bill, S. 4/H.R. 820 (the National 
Competitiveness Act); however, the 103rd Congress adjourned 
without the Senate-House conference on S. 4/H.R. 820 resolving 
the difference between the House and Senate versions of the 
bill.

                          Legislative History

    On February 6, 1995, the Administration submitted its FY 
1996 budget request for the TA to the Congress. On January 31, 
the Subcommittee on Science, Technology, and Space held an 
over-sight hearings on the TA and other science and technology 
programs at the Department of Commerce (DOC). The Subcommittee 
heard testimony about the TA from three witnesses: The 
Honorable Ronald H. Brown, Secretary of Commerce; Dr. Mary Lowe 
Good, Under Secretary of Commerce for Technology; and Dr. Arati 
Prabhakar, Director, National Institute of Standards and 
Technology. On August 1, the Full Committee held a hearing on 
the future of the DOC, which included an examination of the 
programs and activities of the TA and NIST. At the hearing, 
testimony about TA and NIST was heard from Secretary Brown, as 
well as a panel of outside witnesses consisting of: Mr. Sergio 
Mazza, President, American National Standards Institute; Dr. 
Edward Hudgins, Director of Regulatory Studies, CATO Institute; 
Dr. Richard Gowen, President, South Dakota School of Mines and 
Technology; Mr. Robert W., Goss, President and Chief Executive 
Officer, Nanophase Technologies Corporation; and Mr. Gary W. 
Jones, President and Chief Executive Officer, FED Corporation.
    On August 9, Senator Pressler, chairman of the Committee, 
introduced S. 1141, a bill to authorize appropriations for the 
TA for FY 1996, 1997, and 1998. The bill was cosponsored by 
Senator Burns. On August 10, the Committee met in open 
executive session and, without objection, ordered the bill 
reported without amendment.

                      Summary of Major Provisions

    1. Technology Administration. As reported, S. 1141 
authorizes a total of $755 million for the TA for FY 1996 and 
$750 million for each of fiscal years 1997 and 1998. The 
authorized funding for the TA is allocated among its activities 
as follows:
    a. Office of Technology Policy. The bill allocates $5 
million in FY 1996 for the Office of Technology Policy, but no 
funding is authorized for FY 1997 AND 1998. The bill also 
requires the Secretary of Commerce to submit with the DOC's FY 
1997 budget submission a strategic plan for phasing out the 
Office of Technology Policy during FY 1996.
    b. NIST. For NIST, the bill authorizes a total of $750 
million for each of fiscal years 1996, 1997, and 1998. For each 
of those fiscal years, the bill allocates $263 million to its 
internal research and standards work; $427 million to its 
Industrial Technical Services (ITS) account (which funds ATP, 
MEP, and the quality programs); and $60 million to its 
Construction of Facilities account. Out of the moneys 
authorized for the ITS account, the bill authorizes $10 million 
in each of fiscal years 1996, 1997, and 1998 for an 
Experimental Program to Stimulate Competitive Technology 
(EPSCOT) that would fund research and outreach activities in 
rural and sparsely populated states.
    2. Fastener Quality Act Amendments. The bill would make 
changes in the Fastener Quality Act that would allow minor 
nonconformance in fastener specifications consistent with 
consensus standards organizations' policies, exempt 
distributors from the Act's commingling prohibition, and allow 
the fastener manufacturers to use a certification from the 
metal supplier to establish the chemistry of the finished 
fasteners.

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and Section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC August 31, 1995.
Hon. Larry Pressler,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1141, the Technology 
Administration Authorization Act of 1995.
    Enacting S. 1141 would not affect direct spending or 
receipts. Therefore, pay-as-you-go procedures would not apply 
to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                           Rosemary Marcuss
                                             (For June E. O'Neill).
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: S. 1141.
    2. Bill title: Technology Administration Authorization Act 
of 1995.
    3. Bill status: As ordered reported by the Senate Committee 
on Commerce, Science, and Transportation on August 10, 1995.
    4. Bill purpose: S. 1141 would authorize appropriations for 
the fiscal years 1996 through 1998 for the Under Secretary for 
Technology of the Department of Commerce and for various 
programs within the National Institute of Standards and 
Technology (NIST). The bill also would amend provisions of the 
Fasteners Quality Act regarding laboratory accreditation, 
commingling of fasteners, and enforcement of the act.
    5. Estimated cost to the Federal Government: Assuming 
appropriations of the authorized amounts, CBO estimates that 
enacting S. 1141 would result in costs to the federal 
government of about $2.1 billion over the 1996-2000 period, 
primarily for NIST expenditures. Other provisions of the bill 
would have no additional budgetary impact. The following table 
summarizes the estimated budgetary effects of S. 1141.

----------------------------------------------------------------------------------------------------------------
                                                              1995     1996     1997     1998     1999     2000 
----------------------------------------------------------------------------------------------------------------
Projected Spending Under Current Law:                                                                           
    Budget Authority \1\..................................      857        0        0        0        0        0
    Estimated Outlays.....................................      468      392      312      133       18        0
Proposed Changes:                                                                                               
    Authorization Level...................................        0      755      750      750        0        0
    Estimated Outlays.....................................        0      285      472      650      457      278
Projected Spending Under S. 1141:                                                                               
    Authorization Level \1\...............................      857      755      750      750        0        0
    Estimated Outlays.....................................      468      677      784      783      475      278
----------------------------------------------------------------------------------------------------------------
\1\ The 1995 level is the amount appropriated for that year.                                                    

    6. Pay-as-you-go considerations: None.
    7. Estimated cost to State and local governments: None.
    8. Estimate comparison: None.
    9. Previous CBO estimate: On July 19, 1995, CBO provided a 
cost estimate for H.R. 1870, the American Technology 
Advancement Act of 1995, as ordered reported by the House 
Committee on Science on June 28, 1995. Both bills would 
authorize appropriations for the Under Secretary of Technology 
and for programs within NIST, and amend the provisions of the 
Fasteners Quality Act. S. 1141, however, also includes an 
authorization for the Industrial Technology Services of NIST, 
while H.R. 1870 does not include any authorization for this 
program. In addition, S. 1141 includes authorization amounts 
for the NIST programs for 1996 through 1998, while H.R. 1870 
only applies to 1996. CBO estimated that enacting H.R. 1870 
would result in costs to the Federal Government of about $343 
million over the 1996-2000 period.
    10. Estimate prepared by: Rachel Forward.
    11. Estimate approved by: Carl R. Cullhan, for Paul N. Van 
de Water, Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported.
    S. 1141, as reported, reauthorizes the DOC's TA for fiscal 
years 1996 through 1998. The TA conducts measurements and 
standards activities in support of U.S. industry and manages 
technology rant and assistance programs to increase U.S. 
competitiveness. The bill also makes changes in the Fastener 
Quality Act, which is implemented by NIST, in order to correct 
or clarify certain provisions in the current law. The Committee 
believes that the bill will not subject any individuals or 
businesses affected by the bill to additional regulation, will 
not increase the paperwork requirement for such individuals or 
businesses, and will not have an adverse impact on individual 
privacy.

                      Section-by-Section Analysis

                         section 1--short title

    This section permits the Act to be cited as ``the 
Technology Administration Authorization Act of 1995.''

               section 2--authorization of appropriations

    Subsection (a) authorizes $5,000,000 in FY 1996 for the 
activities of the Under Secretary for Technology and the Office 
of Technology Policy, a $9 million decrease from the 
President's budget request for FY 1996. This subsection also 
requires that, with the FY 1997 budget submission for the DOC, 
the Secretary of Commerce submit to Congress a strategic plan 
for phasing out the Office of Technology Policy during FY 1996.
    The Committee believes that, in the current budget 
environment, we must eliminate TA programs that are not 
essential to the agency's goals and missions. The provisions of 
subsection (a) reflect the Committee's view that, regardless of 
the merit of the Office of Technology Policy, it is not an 
indispensable activity within the DOC and, to the extent any 
essential functions can be identified, such functions can be 
satisfactorily performed by NIST. The Committee intends that 
the $5 million authorized in FY 1996 for the Under Secretary of 
Technology/Office of Technology Policy account be used 
primarily to execute the phase out plan mandated under the 
subsection and secondarily to carry out the normal operational 
functions funded by that account. The bill does not authorize 
funds for FY 1997 and 1998 for that account based on the 
assumption that the activities traditionally funded thereunder 
will have been either eliminated or transferred to NIST by the 
end of FY 1996.
    Subsection (b) authorizes, for each of fiscal years 1996, 
1997, and 1998, $263 million for Scientific and Technical 
Research Services, $427 million for Industrial Technology 
Services and $60 million for Construction of Facilities. 
However, within the Industrial Technology Services account, the 
bill does not authorize any appropriations for Advanced 
Technology Program grants awarded after October 1, 1995.
    The bill's three-year authorization for NIST recognizes the 
agency's important and legitimate role in promoting U.S. 
industrial competitiveness by working with industry to develop 
and apply measurements, standards, and technology. The bill 
provides $263 million for the NIST internal research programs 
and standards activities in such areas as chemical science ad 
technology, physics, materials science and engineering, 
electronics, manufacturing, computer technology, building and 
fire research, and mathematics. This basic research and 
standards work at NIST may be its most important function. 
Increasingly, standards are being used by foreign markets to 
close their markets to U.S. industries. There is little 
question that standards will become an increasingly potent 
trade weapon to hinder market entry by U.S. firms or retaliate 
against the U.S. In recognition of this, the bill fully funds 
NIST's lab and standards programs from FY 1996 through FY 1998 
at their FY 1995 funding level.
    The bill also provides strong support for NIST's Industrial 
Technology Services (ITS) account, which funds the agency's 
Advanced Technology Program and the Manufacturing Extension 
Partnership. The bill authorizes $427 million a year from FY 
1996 through FY 1998 for the ITS account, $216 million decrease 
from the President's FY 1996 budget request.
    The bill provides the agency with the discretion to 
allocate funding among the ATP, MEP, and the quality programs 
within the ITS account. The bill does not authorize any ATP 
grants awarded after October 1, 1995. By restricting 
authorization for the ATP to current year awards, Congress will 
have more time to evaluate the value of ATP in our 
competitiveness strategy. Some critics believe that, since it 
was first funded in FY 1990, the ATP has grown too big, too 
fast, without demonstrating clear benefits to U.S. industry. 
These critics point out that ATP grants have often gone to 
Fortune 500 companies like IBM, Dupont, and Texas Instruments 
instead of the small high-tech ventures intended as the primary 
focus for the ATP. Supporters of ATP point out that 55 percent 
of the ATP grants have gone to small firms and 70 percent of 
ATP-supported joint ventures involve small companies. The ATP 
cannot boost U.S. competitiveness alone, but must be a part of 
a larger national strategy to achieve that objective.
    The bill also provides $60 million for each of the three 
fiscal years for the Construction of Facilities in order to 
fund needed new construction and renovation at NIST. This 
funding level is sufficient to support basic safety and 
maintenance activities at NIST's facilities, many of which were 
constructed in the 1950s. Any remaining funding may be 
allocated at the discretion of the agency. It is the 
Committee's understanding that the agency is considering three 
new construction projects whose total cost could well, exceed 
$300 million, specifically a Chemistry Science Lab in 
Gaithersburg, Maryland; an Advanced Technology Lab in 
Gaithersburg, Maryland; and an Advanced Technology Lab in 
Boulder, Colorado. Given prevailing budget constraints, the 
Committee would strongly encourage NIST to address the 
renovation needs of its current facilities before undertaking 
any new construction projects.

  section 3--experimental program to stimulate competitive technology

    This section authorizes $10 million in the Industrial 
Technology Services account to be allocated to a new program 
called the Experimental Program to Stimulate Competitive 
Technology (EPSCOT). EPSCOT would provide grants on a 
competitive and peer-reviewed basis to qualified applicants in 
rural and sparsely populated states whose institutions have 
historically not been included in the mainstream of federal 
research funding. The grants awarded under EPSCOT may be for 
any purpose consistent with the mission of NIST, including, but 
not limited to, research, technology transfer, outreach 
activities, economic development, and education.
    The Committee is concerned that institutions in rural and 
sparsely populated states have had difficulty getting any help 
from NIST in the area of manufacturing assistance. In fact, it 
is aware of several instances in which NIST was unresponsive to 
specific requests from such states for technical help. If 
NIST's external programs are to be continued in any form, they 
must benefit the entire country and not just high-tech 
corridors or revitalized rust-belt areas in the East and West. 
Based on the highly successful EPSCOT programs at the National 
Science Foundation and other science agencies, EPSCOT will 
provide grants for research and outreach work that will enable 
a broader community of businesses, universities, state and 
local governments, and individuals to contribute to today's 
technological revolution. At the Committee's August 1st hearing 
on the future of the DOC, Secretary of Commerce Ronald Brown 
endorsed the idea of starting an EPSCOT program at NIST.

         section 4--elimination of the national quality council

    This section repeals Section 507 of the American Technology 
Preeminence Act of 1991 (15 U.S.C. 3717) which established the 
National Quality Council. The Council, which was authorized to 
consider quality issues in business, education, and government, 
has never been activated by the DOC.

               section 5--fastener quality act amendments

    This section would make changes in the current law that 
would allow minor nonconformance in specifications if such 
nonconformance is consistent with consensus standards 
organizations' policies; exempt distributors from the 
commingling prohibition; and allow the fastener manufacturers 
to use a certification from the metal supplier to establish the 
chemistry of the finished fasteners. These provisions were 
developed by NIST in consultation with the fastener industry.
    The bill would also repeal Section 4 of the Act, which 
allows the Secretary of Commerce to waive the requirements of 
the Act with regard to categories of fasteners not used in 
critical applications and to include within the Act's coverage 
categories of fasteners not specifically described in the Act. 
The bill also would authorize the DOC to conduct investigations 
into matters arising under the Fastener Quality Act and reduce 
from 10 years to 5 years the time for retention of records 
required under the Fastener Quality Act. Further, the bill 
would strike the phrase ``within 180 days after the date of 
enactment of this Act'' in Section 13 of the Fastener Quality 
Act. Section 13 requires the Secretary of Commerce to issue 
rules implementing the Act within 180 days of enactment of the 
Act. Since that deadline expired four years ago without 
regulations having been issued, the 180-day deadline in the 
current law no longer has meaning. Finally, the bill repeals 
Section 14 of the Act, which requires the Secretary of Commerce 
to appoint a fasteners advisory committee. The advisory 
committee required under Section 14 was in fact appointed after 
enactment of the Fastener Quality Act and, after completing its 
work, was disbanded in 1994.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, 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 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

[Note: Changes in existing law are shown as that law is carried 
in the United States Code, whether or not a particular title 
has been enacted into positive law. Changes to tables of 
sections are not shown.]

                      TITLE 15--COMMERCE AND TRADE

           National Institute of Standards and Technology Act


                     competitive technology program


    Sec. 31. (a) Findings.--Congress finds that--
          (1) it is in the National interest for the federal 
        government to take appropriate steps in order to 
        strengthen the competitiveness of research institutions 
        and industry in our rural and less populous states that 
        historically have not been included as full partners in 
        the federal research and development enterprise;
          (2) the research institutions in our rural and less 
        populous states represent a valuable and productive 
        research and technological base that has generated 
        important breakthrough advances in science and 
        technology and helped boost the Nation's economy;
          (3) as part of its mission to help increase U.S. 
        competitiveness, the National Institute of Standards 
        and Technology (NIST) of the Department of Commerce, 
        has an important role in strengthening and broadening 
        the research and technology base in our rural and less 
        populous states;
          (4) the Experimental Program to Stimulate Competitive 
        Research (EPSCOR) at the National Science Foundation 
        and similar programs at the National Aeronautics and 
        Space Administration and other federal science agencies 
        have been extremely successful in strengthening the 
        research base of our rural and less populous states by 
        funding, on a competitive, peer-reviewed basis, 
        research grant proposals from those states; and
          (5) the establishment at NIST of a program based on 
        the EPSCOR concept would both build on the progress of 
        the other federal agencies' EPSCOR activities and 
        further broaden the Nation's scientific and technology 
        base to embrace the quality research institutions in 
        rural and less populous states.
      (b) Policy.--It is the policy of the United States that--
          (1) NIST should conduct appropriate programs and 
        activities to strengthen and broaden the Nation's 
        scientific and technology capabilities and 
        infrastructure;
          (2) NIST should develop programs and activities to 
        support research efforts in our rural and less populous 
        states to enhance U.S. industrial competitiveness; and
          (3) such programs and activities should be 
        coordinated and made consistent with the Experimental 
        Program to Stimulate Competitive Research at the 
        National Science Foundation and similar programs at 
        other federal science agencies.
    (c) Requirements.--
          (1) Competition.--Through the National Institute of 
        Standards and Technology, the Secretary of Commerce 
        shall establish an Experimental Program to Stimulate 
        Competitive Technology (EPSCOT). EPSCOT shall provide 
        grants on a competitive and peer-reviewed basis to 
        qualified institutions in eligible States. Such grants 
        shall be awarded for any purpose consistent with and in 
        furtherance of the mission of the Institute including, 
        but not limited to, research, technology transfer, 
        outreach activities, economic development, and 
        education. In evaluating a grant application under 
        EPSCOT, the Secretary of Commerce shall consider--
                  (A) the application's merit and relevance to 
                mission of the Institute;
                  (B) the potential for the grant to serve as a 
                catalyst to enhance the ability of researchers 
                in the State to become more competitive for 
                regular civilian research funding;
                  (C) the potential for the grant to improve 
                the environment for science, mathematics, and 
                engineering education in the State; and
                  (D) the need to assure the maximum, 
                distribution of grants among eligible States, 
                consistent with merit.
          (2) Supplemental Grants.--The Secretary of Commerce 
        shall endeavor, where appropriate, to supplement grants 
        made under subsection (a) with such grants for 
        fellowships, traineeships, equipment, or 
        instrumentation as practicable.
          (3) Definitions.--For the purposes of this section--
                  (A) the term ``qualified institutions'' means 
                small and medium-sized companies, colleges, 
                universities, not-for-profit institutions, 
                local and state governments, individuals with a 
                record of achievement in science and 
                technology, and any other persons or entities 
                deemed qualified by the Secretary of Commerce, 
                but not large companies and
                  (B) the term ``eligible states'' means State 
                designated as eligible to compete in the 
                National Science Foundation's Experimental 
                Program to Stimulate Competitive Research.
    (e) Authorization of Appropriations.--To implement EPSCOT 
and any related activities, the Secretary of Commerce shall 
ensure that up to $10,000,000 from the appropriations 
authorized for the Industrial Technology Services account at 
the National Institute of Standards and Technology are used for 
purposes of establishing and developing an Experimental Program 
to Stimulate Competitive Technology Research at the agency.
    Sec. [31.] 32. This Act may be cited as the National 
Institute of Standards and Technology Act.

                   chapter 63--technology innovation

[Sec. 3717. National Quality Council

    [(a) Establishment and Functions.--There is established a 
National Quality Council (hereafter in this section referred to 
as the ``Council''). The functions of the Council shall be--
          [(1) to establish national goals and priorities for 
        Quality performance in business, education, government, 
        and all other sectors of the Nation;
          [(2) to encourage and support the voluntary adoption 
        of these goals and priorities by companies, unions, 
        professional and business associations, coalition 
        groups, and units of government, as well as private and 
        nonprofit organizations;
          [(3) to arouse and maintain the interest of the 
        people of the United States in Quality performance, and 
        to encourage the adoption and institution of Quality 
        performance methods by all corporations, government 
        agencies, and other organizations; and
          [(4) to conduct a White House Conference on Quality 
        Performance in the American Workplace that would bring 
        together in a single forum national leaders in 
        business, labor, education, professional societies, the 
        media, government, and politics to address Quality 
        performance as a means of improving United States 
        competitiveness.
    [(b) Membership.--The Council shall consist of not less 
than 17 or more than 20 members, appointed by the Secretary. 
Members shall include--
          [(1) at least 2 but not more than 3 representatives 
        from manufacturing industry
          [(2) at least 2 but not more than 3 representatives 
        from service industry;
          [(3) at least 2 but not more than 3 representatives 
        from national Quality not-for-profit organizations;
          [(4) two representatives from education, one with 
        expertise in elementary and secondary education, and 
        one with expertise in post-secondary education;
          [(5) one representative from labor;
          [(6) one representative from professional societies;
          [(7) one representative each from local and State 
        government;
          [(8) one representative from the Federal Quality 
        Institute;
          [(9) one representative from the National Institute 
        of Standards and Technology;
          [(10) one representative from the Department of 
        Defense;
          [(11) one representative from a civilian Federal 
        agency not otherwise represented on the Council, to be 
        rotated among such agencies every 2 years; and
          [(12) one representative from the Foundation for the 
        Malcolm Baldridge National Quality Award.
    [(c) Terms--The term of office of each member of the 
Council appointed under paragraphs (2) through (7) of 
subsection (b) shall be 2 years, except that when making the 
initial appointments under such paragraphs; the Secretary shall 
appoint not more than 50 percent of the members to 1 year 
terms. No member appointed under such paragraphs shall serve on 
the Council for more than 2 consecutive terms.
    [(d) Chairman and Vice Chairman.--The Secretary shall 
designate one of the members initially appointed to the Council 
as Chairman. Thereafter, the members of the Council shall 
annually elect one of their number as Chairman. The members of 
the Council shall also annually elect one of their members as 
Vice Chairman. No individual shall serve as Chairman or Vice 
Chairman for more than 2 consecutive years.
    [(e) Executive Director and Employees.--The Council shall 
appoint and fix the compensation of an Executive Director, who 
shall hire and fix the compensation of such additional 
employees as may be necessary to assist the Council in carrying 
out its functions. In hiring such additional employees, the 
Executive Director shall ensure that no individual hired has a 
conflict of interest with the responsibilities of the Council.
    [(f) Funding.--There is established in the Treasury of the 
United States a National Quality Performance Trust Fund, into 
which all funds received by the Council, through private 
donations or otherwise, shall be deposited. Amounts in such 
Trust Fund shall be available to the Council, to the extent 
provided in advance in appropriations Acts, for the purpose of 
carrying out the functions of the Council under this Act.
    [(g) Contributions.--The Council may not accept private 
donations from a single source in excess of $25,000 per year. 
Private donations from a single source in excess of $10,000 per 
year may be accepted by the Council only on approval of two-
thirds of the Council.
    [(h) Annual Report.--The Council shall annually submit to 
the President and the Congress a comprehensive and detailed 
report on--
        [(1) the progress in meeting the goals and priorities 
        established by the Council;
        [(2) the Council's operations, activities, and 
        financial condition;
        [(3) contributions to the Council from non-Federal 
        sources;
        [(4) plans for the Council's operations and activities 
        for the future; and
        [(5) any other information or recommendations the 
        Council considers appropriate.]

                         chapter 80--fasteners

                          fastener quality act

Sec. 5401. Findings and purpose

    (a) Findings.--The Congress finds that--
          (1) the American economy uses billions of fasteners 
        each year;
          (2) millions of mismarked, substandard, counterfeit, 
        and other nonconforming fasteners have been sold in 
        commerce to end-users in the United States, and their 
        use has dramatically increased the risk of equipment 
        and infrastructure failures;
          (3) both the military and civilian sectors of the 
        economy have encountered unnecessary, unwarranted, and 
        dangerous equipment and construction failures, as well 
        as extraordinary expenses, as a result of the use of 
        nonconforming fasteners;
          [(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. 5402. 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, 
        International Organization for Standardization, or any 
        other consensus standardsetting 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;
          (3) ``container'' means any package of fasteners 
        traded in commerce;
          (4) ``Director'' means the Director of the National 
        Institute of Standards and Technology;
          (5) ``fastener'' means--
                  (A) a--
                          (i) screw, nut, bolt, or stud having 
                        internal or external threads, or
                          (ii) a load-indicating washer,
                with a nominal diameter of 5 millimeters or 
                greater, in the case of such items described in 
                metric terms, or 1/4 inch or greater, in the 
                case of such items described in terms of the 
                English system of measurement, which contains 
                any quantity of metal and is held out as 
                meeting a standard or specification which 
                requires through-hardening,
                  (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 STM 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;
          (7) ``importer'' means a person located within the 
        United States who contracts for the initial purchase of 
        fasteners manufactured outside the United States for 
        resale or such person's use within the United States;
          (8) ``Institute'' means the National Institute of 
        [Standard] Standards and Technology;
          (9) ``lot'' means a quantity of fasteners of one part 
        number fabricated by the same production process from 
        the same coil or heat number of metal as provided by 
        the metal manufacturer and submitted for inspection and 
        testing at one time;
          (10) ``manufacturer'' means a person who fabricates 
        fasteners, or who alters any item so that it becomes a 
        fastener;
        [(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) ``standard 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. 5403. 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. 5404. 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
                  (ii) written notice detailing the results of 
                such inspection, testing, and certification is 
                sent (I) to all purchasers of such fasteners, 
                except retail sellers and retail consumers, and 
                (II) to any retail seller or retail consumer 
                who, prior to delivery, requests such written 
                notice.
          (B) If a fastener is sold under this paragraph, each 
        purchaser of such fastener, except for retail sellers 
        and retail consumers unless such retail sellers and 
        retail consumers request such notice in advance, shall 
        be provided, contemporaneously with each sale and 
        delivery, written notice stating that such fastener has 
        not yet been inspected, tested, and certified as 
        required by this Act.
    (b) Inspection and Testing.--
          (1) The manufacturer of a lot of fasteners shall 
        cause to be inspected and tested a representative 
        sample, as provided in paragraph (2) of this 
        subsection, of the fasteners in such lot to determine 
        whether the lot conforms to the standards and 
        specifications to which the manufacturer represents it 
        has been manufactured. Such inspection and testing 
        shall be performed by a laboratory accredited in 
        accordance with the procedures and conditions specified 
        by the Secretary under section 6. The standards and 
        specifications to which the manufacturer represents 
        such lot has been manufactured shall be disclosed by 
        the manufacturer to the laboratory at the time the lot 
        is submitted for inspection and testing under this 
        paragraph . The manufacturer of a lot may perform the 
        inspection and testing required by this paragraph in a 
        laboratory which it owns or with which it is otherwise 
        affiliated, if such laboratory is accredited in 
        accordance with the procedures and conditions specified 
        by the Secretary under section 6; unless the Secretary 
        finds that, as to a specific type of fastener and as to 
        a specific type of inspection or testing, a ban on 
        manufacturer ownership or affiliation with the 
        accredited laboratory would increase the protection of 
        health and safety of the public or industrial workers.
          (2) The size, selection, and integrity of the sample 
        to be inspected and tested under paragraph (1) shall be 
        governed--
                  (A) by the standards and specifications to 
                which the manufacturer represents the fasteners 
                in the sample have been manufactured; or
                  (B) if such standards and specifications do 
                not provide for the size, selection, or 
                integrity of the sample, by sampling procedures 
                prescribed by the Secretary, who shall to the 
                extent practicable use consensus testing 
                standards and related materials.
        Nothing in this paragraph shall prohibit a purchaser 
        from requiring the inspection and testing of a greater 
        number of fasteners from a lot than is specified in the 
        applicable standards and specifications or in the 
        applicable sampling procedures prescribed by the 
        Secretary.
    (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 suc 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. 5405. 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) procedures and conditions, including 
                sampling procedures referred to in section 5, 
                for the accreditation by the Institute of 
                laboratories engaged in the inspection and 
                testing of fasteners under section 5.
                  (B) procedures and conditions (which shall be 
                consistent with the procedures and conditions 
                established under subparagraph (A)), using to 
                the extent practicable the requirements of 
                national or international consensus documents 
                intended to govern the operation of 
                accreditation bodies, under which private 
                entities may apply for approval by the 
                Secretary to engage directly in the 
                accreditation of laboratories in accordance 
                with the requirements of this Act; and
                  (C) conditions (which shall be consistent 
                with the procedures and conditions established 
                under subparagraph (A)), under which the 
                accreditation of foreign laboratories by their 
                governments or organizations recognized by the 
                Director shall be deemed to satisfy the 
                laboratory accreditation requirements of this 
                section.
          (2) Upon establishing a laboratory accreditation 
        program under paragraph (1), the Secretary shall 
        publish a notice in the Federal Register stating that 
        the Secretary is prepared to accept applications for 
        accreditation of such laboratories.
          (3) No accreditation provided under the terms of this 
        subsection shall be effective for a period of greater 
        than 3 years.
    (b) Laboratory Accreditation Procedures.--Existing 
Institute accreditation procedures stated in part 7 of title 
15, Code of Federal Regulations, as in effect on the date of 
enactment of this Act, supplemental as the Secretary considers 
necessary, shall be used to accredit laboratories under the 
accreditation program established under subsection (a).
    (c) Ensuring Compliance.--
          (1) The Secretary shall ensure that--
                  (A) private entities accrediting laboratories 
                under procedures and conditions established 
                under subsection (a)(1)(B) comply with such 
                procedures and conditions, and
                  (B) laboratories accredited by such private 
                entities, or by foreign governments pursuant to 
                subsection (a)(1)(C), comply with the 
                requirements for such accreditation.
          (2) The Secretary may require any such private entity 
        or laboratory to provide all records and materials that 
        may be necessary to allow the Secretary to carry out 
        this subsection.
    (d) Operation of Laboratory Accreditation Program.--
          (1) The Director may hire such contractors as are 
        necessary to carry out the accreditation program 
        established under subsection (a).
          (2) Costs to the Institute and to the Secretary for 
        the establishment and operation of the accreditation 
        program under this section shall be fully reimbursable 
        to the Institute or to the Secretary, as appropriate, 
        through fees or other charges for accreditation 
        services under such program.
    (e) Recommendations to Consensus Standards Organizations.--
The Director shall periodically transmit to appropriate 
consensus standards organizations any information or 
recommendations that may be useful in the establishment or 
application by such organizations of standards and 
specifications for fasteners.

Sec. 5406. 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.
    (b) Fasteners of Foreign Origin.--
          (1) Except as provided in paragraph (2) of this 
        subsection, it shall be unlawful--
                  (A) for any person to sell to any importer, 
                and
                  (B) for any importer to purchase,
                any shipment of fasteners which are 
                manufactured outside the United States unless 
                delivery of such shipment to such importer is 
                accompanied by a manufacturer's certificate as 
                described in subsection (a) an original 
                laboratory testing report described in section 
                5(c), with respect to each lot from which such 
                fasteners were taken, and any other relevant 
                lot identification information.
          (2) The requirement under paragraph (1) of this 
        subsection that the delivery of such a shipment to such 
        importer be accompanied by an original laboratory 
        testing report shall not apply in the case of fasteners 
        imported into the United States--
                  (A) as products manufactured within a nation 
                which is party to a congressionally-approved 
                free trade agreement with the United States 
                that is in effect, so long as the Secretary 
                certifies that satisfactory arrangements have 
                been reached by which purchasers within the 
                United States can readily gain access to an 
                original laboratory testing report for such 
                fasteners; or
                  (B) as Canadian-origin products under the 
                United States-Canada Automobile Pact for use as 
                original equipment in the manufacture of motor 
                vehicles.
    (c) Option for Importers and Private Label Distributors.--
          (1) Notwithstanding section 5(a) and subsections (a) 
        and (b) of this section, delivery of a lot, or portion 
        of a lot, of fasteners may be made to an importer or 
        private label distributor without the required original 
        copy of the laboratory testing report if--
                  (A) the manufacturer provides to the importer 
                or private label distributor a manufacturer's 
                certificate certifying that the fasteners have 
                been manufactured according to the requirements 
                of the applicable standards and specifications; 
                and
                  (B) the importer or private label distributor 
                assumes responsibility in writing for the 
                inspection and testing of such lot or portion 
                by a laboratory accredited in accordance with 
                the procedures and conditions specified by the 
                Secretary under section 6.
          (2) If the imported or private label 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.]
    (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: Provided, that any container which contains 
the fasteners from two lots shall be conspicuously marked with 
the lot identification numbers of both lots.
    [(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 conspicuously 
        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]
    (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) Regulations.--The Secretary may issue such regulations 
as may be necessary to ensure compliance with the provisions of 
this section.

Sec. 5408. Remedies and penalties

    (a) Civil Remedies.--
          (1) The Attorney General may bring an action in an 
        appropriate United States district court for 
        appropriate declaratory and injunctive relief against 
        any person who violates this Act or any regulation 
        under this Act.
          (2) An action under paragraph (1) may not be brought 
        more than 10 years after the date on which the cause of 
        action accrues.
    (b) Civil Penalties.--
          (1) Any person who is determined by the Secretary, 
        after notice and an opportunity for a hearing, to have 
        violated this Act or any regulation under this Act 
        shall be liable to the United States for a civil 
        penalty of not more than $25,000 for each violation.
          (2) The amount of the penalty shall be assessed by 
        the Secretary by written notice. In determining the 
        amount of the penalty, the Secretary shall consider the 
        nature, circumstances, and gravity of the violation 
        and, with respect to the person found to have committed 
        the violation, the degree of culpability, and history 
        of prior violations, the effect on ability to continue 
        to be business, any good faith attempt to achieve 
        compliance, ability to pay the penalty, and such other 
        matters as justice may require.
          (3) Any person against whom a civil penalty is 
        assessed under paragraph (2) of this section may obtain 
        review thereof in the appropriate court of the United 
        States by filing a notice of appeal in such court 
        within 30 days from the date of such order and by 
        simultaneously sending a copy of such notice by 
        certified mail to the Secretary. The findings and order 
        of the Secretary shall be set aside by such court if 
        they are found to be unsupported by substantial 
        evidence, as provided in section 706(2) of title 5, 
        United States Code.
          (4) The Secretary may compromise, modify, or remit, 
        with or without conditions, any civil penalty which is 
        subject to imposition or which has been imposed under 
        this section prior to referral to the Attorney General 
        under paragraph (5).
          (5) A civil penalty assessed under this subsection 
        may be recovered in an action brought by the Attorney 
        General on behalf of the United States in the 
        appropriate district court of the United States. In 
        such action, the validity and appropriateness of the 
        final order imposing the civil penalty shall not be 
        subject to review.
          (6) For the purpose of conducting any hearing under 
        this section, the Secretary may issue subpoenas for the 
        attendance and testimony of witnesses and the 
        production of relevant papers, books, and documents, 
        and may administer oaths. Witnesses summoned shall be 
        paid the same fees and mileage that are paid to 
        witnesses in the courts of the United States. In case 
        of contempt or refusal to obey a subpoena served upon 
        any person pursuant to this paragraph, the district 
        court of the United States for any district in which 
        such person is found, resides, or transacts business, 
        upon application by the United States and after notice 
        to such person, shall have jurisdiction to issue an 
        order requiring such person to appear and give 
        testimony before the Secretary or to appear and produce 
        documents before the Secretary, or both, and any 
        failure to obey such order of the court may be punished 
        by such court as a contempt thereof.
    (c) Criminal Penalties.
          (1) Whoever knowingly certifies, marks, offers for 
        sale, or sells a fastener in violation of this Act or a 
        regulation under this Act shall be fined under title 
        18, United States Code, or imprisoned not more than 5 
        years, or both.
          (2) Whoever intentionally fails to maintain records 
        relating to a fastener in violation of this Act or a 
        regulation under this Act shall be fined under title 
        18, United States Code, or imprisoned not more than 5 
        years, or both.
          (3) Whoever negligently fails to maintain records 
        relating to a fastener in violation of this Act or a 
        regulation under this Act shall be fined under title 
        18, United States Code, or imprisoned not more than 2 
        years or both.
    (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. 5409. Recordkeeping requirements

    (a) Laboratories.--Laboratiories 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 Alternations.--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. 5412. Regulations

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

[Sec. 5413. Advisory committee

    [Within 90 days after the date of enactment of this Act, 
the Secretary shall appoint and 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.]

                                
