MANUFACTURING EXTENSION PROGRAMS.

SEC. 824. MANUFACTURING EXTENSION PROGRAMS. (a) Revision of Authority.—Section 2517 of title 10, United States Code, is amended— (1) by inserting “(a)” before “The Secretary of Defense,”; (2) in the first sentence, by striking out “ana other existing organizations” and all that follows through “manufactured parts”; (3) in the second sentence— (A) by inserting “and section 26” after “section 25”; and (B) by inserting “and 2781” after “278k”; and (4) by adding at the end the following new subsection: 105 STAT. 1437 “(b)(1) The Secretary of Defense, in consultation with the Secretary of Commerce, shall establish a program— “(A) to support existing manufacturing extension programs of regions, States, local governments, and private, nonprofit organizations; “(B) to promote the development of a broad range of such programs that will benefit both the national security and the economic prosperity of the United States; and “(C) to increase the involvement of appropriate segments of the private sector in activities that improve the manufacturing quality, productivity, and performance of United States-based small manufacturing firms. “(2) In awarding financial assistance under the program, the Secretary, on the basis of merit pursuant to a competitive selection process, shall select manufacturing extension programs that demonstrate evidence of the following: “(A) Comprehensive and high quality services, including staff with significant experience in industrial manufacturing. “(B) Significant involvement by, and support from, private industry. “(C) The potential for assisting a significant number of United States-based small manufacturing firms with a limited expenditure of Federal funds. “(3)(A) The amount of financial assistance furnished to a manufacturing extension program under this subsection may not exceed the total amount provided by non-Federal Government participants in the program for the period for which the assistance is to be provided. Financial assistance shall be provided to a recipient program for a period of five years unless such financial assistance is earlier terminated for good cause. Recipients of such financial assistance shall be required to report to the Secretary annually beginning one year after the date that such financial assistance is initiated. Such report shall include a description of the progress of the recipient program in meeting the objectives set out in paragraph (1). “(B) The Secretary of Defense shall require a major evaluation of each manufacturing extension program receiving financial assistance under this subsection. The evaluation shall be conducted during the third year that such program receives such financial assistance. If, on the basis of such evaluation, the Secretary finds that the financial assistance to the extension program should be terminated for good cause, the Secretary shall provide sufficient financial assistance to terminate that program. The amount of that assistance may not exceed the amount that would otherwise have been provided for continuing the financial assistance to the recipient program through the end of the fourth year. “(C) Subparagraphs (A) and (B) do not prohibit a recipient program from reapplying for financial assistance under this subsection upon the expiration or termination of the furnishing of financial assistance under this subsection. The application for additional financial assistance shall be subject to the requirements and procedures set out in this subsection in the same manner and to the same extent as initial applications for financial assistance under this subsection. “(4) The Secretary of Defense and the Secretary of Commerce shall enter into an agreement for carrying out the program established pursuant to this subsection. The agreement shall include 105 STAT. 1438procedures to ensure that the program is fully coordinated with related manufacturing programs of the Department of Commerce.”. (b) Definitions.—Section 2511 of title 10, United States Code, is amended by striking out paragraph (2) and inserting in lieu thereof the following new paragraphs: “(2) The term ‘manufacturing extension program’ means a public or private, nonprofit program for the improvement of the quality, productivity, and performance of United States-based small manufacturing firms in the United States. “(3) The term ‘United States-based small manufacturing firm’ means a company or other business entity that, as determined by the Secretary of Commerce— “(A) engages in manufacturing; “(B) has less than 500 employees; “(C) conducts a significant level of its research, development, engineering, and manufacturing activities in the United States; and “(D) is a company or other business entity the majority ownership or control of which is by United States citizens or is a company or other business entity of a parent company that is incorporated in a country the government of which— “(i) encourages the participation of firms so owned or controlled in research and development consortia to which the government of that country provides funding directly or provides funding indirectly through international organizations; and “(ii) affords adequate and effective protection for the intellectual property rights of companies incorporated in the United States.”. (c) Funding.—Of the amounts authorized to be appropriated pursuant to section 201, $50,000,000 shall be available to carry out section 2517(b) of title 10, United States Code (as added by subsection (a)(4)).