[Senate Report 116-80]
[From the U.S. Government Publishing Office]


                                                     Calendar No. 183
116th Congress  }                                            { Report
                                 SENATE
 1st Session    }                                            { 116-80

======================================================================

 
                   SMART MANUFACTURING LEADERSHIP ACT

                                _______
                                

               September 10, 2019.--Ordered to be printed

                                _______
                                

  Ms. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 715]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 715) to improve the productivity and 
energy efficiency of the manufacturing sector by directing the 
Secretary of Energy, in coordination with the National 
Academies and other appropriate Federal agencies, to develop a 
national smart manufacturing plan and to provide assistance to 
small- and medium-sized manufacturers in implementing smart 
manufacturing programs, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                PURPOSE

    The purpose of S. 715 is to improve the productivity and 
energy efficiency of the manufacturing sector by directing the 
Secretary of Energy, in coordination with the National 
Academies and other appropriate Federal agencies, to develop a 
national smart manufacturing plan and to provide assistance to 
small- and medium-sized manufacturers in implementing smart 
manufacturing programs.

                          BACKGROUND AND NEED

    Smart manufacturing uses technology to integrate all 
aspects of manufacturing, allowing for real-time management of 
energy, productivity and costs across factories and companies. 
The industrial sector represents roughly 20 percent of the U.S. 
economy and accounts for one-third of domestic energy 
consumption. In a 2012 report by General Electric, improvements 
in automation and control through smart manufacturing are 
estimated to add $10 to $15 trillion to global gross domestic 
product over the next 20 years. According to a 2013 analysis 
from the American Council for an Energy-Efficient Economy, this 
includes $5 to $25 billion annually in energy savings for 
electricity alone.
    An effective strategy for smart manufacturing is necessary 
in order for the U.S. to retain global economic 
competitiveness. The adoption of smart manufacturing 
technologies is currently limited to a small fraction of the 
manufacturing sector due to the high cost and complexity of 
technologies. Lack of staff resources, capital constraints, and 
a dearth of expert information on energy efficiency 
opportunities makes adoption particularly challenging to small- 
and medium-sized manufacturers.
    The legislation aims to remove barriers to smart 
manufacturing for small- and medium-sized manufacturers, 
thereby improving energy efficiency, creating jobs, and 
securing a more competitive position in the market place for 
American manufacturers.

                          LEGISLATIVE HISTORY

    S. 715 was introduced by Senators Shaheen and Alexander on 
March 7, 2019. Senator Hassan was added as a cosponsor on April 
11, 2019.
    Companion legislation, H.R. 1633, was introduced in the 
House of Representatives by Representatives Welch and Reed on 
March 7, 2019, and referred to the Energy and Commerce 
Committee and the Science, Space, and Technology Committee.
    In the 115th Congress, a similar bill, S. 768, was 
introduced by Senator Shaheen on March 29, 2017. Parts of the 
measure were included as sections 1302 and 1303 in S. 1460, the 
Energy and Natural Resources Act of 2017 (Cal. 162).
    Companion legislation, H.R. 3240, was introduced in the 
House of Representatives by Representatives Welch and Reed on 
July 13, 2017, and referred to the Energy and Commerce 
Committee and the Science, Space, and Technology Committee.
    In the 114th Congress, a similar bill, S. 1054, was 
introduced by Senator Shaheen on April 22, 2015. Senator 
Alexander was added as a cosponsor on June 10, 2015. The 
Committee on Energy and Natural Resources held a hearing on S. 
1054 on June 9, 2015 (S. Hrg. 114-344). The measure was also 
included in Amendment No. 2968, which the Senate agreed to on 
January 27, 2016, as an amendment to S. 2012, the Energy Policy 
Modernization Act of 2016, which the Senate passed, as amended, 
on April 20, 2016.
    Companion legislation, H.R. 3266, was introduced in the 
House of Representatives by Representatives Welch and Reed on 
July 28, 2015, and referred to the Energy and Commerce 
Committee and the Science, Space, and Technology Committee.
    The Senate Committee on Energy and Natural Resources met in 
open business session on July 16, 2019, and ordered S. 715 
favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on July 16, 2019, by a majority voice 
vote of a quorum present, recommends that the Senate pass S. 
715. Senator Lee asked to be recorded as voting no.

                      SECTION-BY-SECTION ANALYSIS

Section. 1. Short title

    Section 1 provides a short title for the bill.

Sec. 2. Findings

    Section 2 sets forth Congressional findings.

Sec. 3. Definitions

    Section 3 defines relevant terms.

Sec. 4. Development of national smart manufacturing plan

    Subsection (a) requires the Secretary, in consultation with 
the National Academies, to develop and complete a national plan 
for the development and deployment of smart manufacturing to 
improve efficiency within three years of enactment.
    Subsection (b) describes the content to be included in the 
national plan.
    Subsection (c) directs the Secretary of Energy (Secretary) 
to revise the national plan biennially to account for 
advancements in information and communication technology and 
manufacturing needs.
    Subsection (d) requires the Secretary to submit an annual 
report to Congress on the progress of plan development until 
its completion.
    Subsection (e) directs the Secretary to use unobligated 
Department of Energy (DOE) funds to carry out this section.

Sec. 5. Leveraging existing agency programs to assist small and medium 
        manufacturers

    Subsection (a) sets forth Congressional findings.
    Subsection (b) directs the Secretary to expand the scope of 
these technical assistance programs to help advance smart 
manufacturing technologies.
    Subsection (c) directs the Secretary to use unobligated DOE 
funds to carry out this section.

Sec. 6. Leveraging smart manufacturing infrastructure at national 
        laboratories

    Subsection (a) directs the Secretary to conduct a study on 
how DOE can increase access to high-performance computing 
resources for small and medium manufacturers within 180 days of 
enactment. This subsection further requires the Secretary to 
submit a report to Congress within one year of the measure's 
enactment describing the results of the study.
    Subsection (b) directs the Secretary to facilitate access 
to the national laboratories studied under subsection (a) for 
small and medium manufacturers.

Sec. 7. State leadership grants

    Subsection (a) sets forth Congressional findings.
    Subsection (b) authorizes the Secretary to make competitive 
grants to states to establish programs to be used as models for 
supporting the implementation of smart manufacturing 
technologies.
    Subsection (c) describes the eligibility criteria for 
receiving a grant, and directs the Secretary to evaluate grant 
applications on the basis of merit using said criteria.
    Subsection (d) limits a grant's term to not more than three 
years; caps a grant to not more than $3 million; and requires a 
30 percent matching requirement from each state receiving a 
grant.
    Subsection (e) specifies the permissible uses of awarded 
grant funds by a state.
    Subsection (f) directs the Secretary to conduct biannual 
evaluations of each awarded grant.
    Subsection (g) authorizes $10 million for each of fiscal 
years 2020 through 2023 to carry out this legislation.

Sec. 8. Report

    Section 8 requires the Secretary to submit to Congress and 
make publicly available an annual report on the progress made 
in advancing smart manufacturing technologies in the United 
States.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Bill summary: S. 715 would authorize the appropriation of 
$10 million annually over the 2020-2023 period for the 
Department of Energy to provide grants to states to develop 
programs for the implementation of smart manufacturing 
technologies. The bill also would direct the department to use 
unobligated funds to complete a national plan for smart 
manufacturing technology development and deployment, and to 
expand the scope of an existing DOE technical assistance 
program to include smart manufacturing practices.
    Estimated Federal cost: The estimated budgetary effect of 
S. 715 is shown in Table 1. The costs of the legislation fall 
primarily within budget function 270 (energy).

                                 TABLE 1.--ESTIMATED BUDGETARY EFFECTS Of S. 715
----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, millions of dollars--
                                                ----------------------------------------------------------------
                                                   2019     2020     2021     2022     2023     2024   2019-2024
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATIONa
 
Authorization..................................        0       10       10       10       10        0        40
Estimated Outlays..............................        0        2        5        8       10        8        33
----------------------------------------------------------------------------------------------------------------
aEnacting S. 715 also would increase direct spending by $1 million over the 2020-2024 period.

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted in late 2019 and that the 
authorized and necessary amounts will be provided in each year.
    Spending subject to appropriation: Section 7 would 
authorize the appropriation of $10 million annually over the 
2020-2023 period for the Department of Energy to provide grants 
to states to develop programs to implement smart manufacturing 
technologies. Based on historical spending patterns for similar 
activities, CBO estimates that implementing section 7 would 
cost $33 million over the 2020-2024 period.
    Section 6 would require DOE to facilitate access by small 
and midsize manufacturers to high-performance computing 
resources at the National Laboratories. Because DOE already 
carries out several programs to facilitate use of such 
resources by industry, CBO estimates that implementing section 
6 would have no significant effect on the federal budget.
    Finally, Section 8 would direct DOE to develop and make 
publicly available annual reports on the progress made in 
advancing smart manufacturing. Based on the costs ofsimilar 
tasks, CBO estimates that any costs to implement the reporting 
requirement would be insignificant; such spending would be subject to 
the availability of appropriated funds.
    Direct spending: Section 4 would direct DOE to develop, in 
consultation with the National Academies, a national plan to 
develop and implement smart manufacturing technology to improve 
the productivity and energy efficiency of the manufacturing 
sector. Section 5 would direct DOE to expand the scope of an 
existing DOE technical assistance program to include smart 
manufacturing practices. S. 715 would authorize DOE to use 
unobligated funds to implement those activities. CBO considers 
such spending to be direct spending because it would occur 
without further appropriation. In addition, we expect that DOE 
would use unobligated funds that otherwise would not be spent. 
Based on the costs of similar tasks, CBO estimates enacting 
sections 4 and 5 would increase direct spending by $1 million 
over the 2020-2024 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in Table 2.

                                               TABLE 2.--CBO'S ESTIMATE OF PAY-AS-YOU-GO EFFECTS OF S. 715
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     By fiscal year, millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2019   2020   2021   2022   2023   2024   2025   2026   2027   2028   2029  2019-2024  2019-2029
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go
    Effect...........................................      0      0      0      0      0      0      0      0      0      0      0         1          1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in Long-Term deficits: None.
    Mandates: None.
    Estimate prepared by: Federal costs: Janani Shankaran, 
Mandates: Brandon Lever.
    Estimate reviewed by: Kim P. Cawley, Chief, Natural and 
Physical Resources Cost Estimates Unit; H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 715. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 715, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 715, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The Committee did not request executive views for S. 715.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by S. 715 as ordered reported.