(a) Definitions

In this section:

(1) Appropriate committees of congress

The term “appropriate committees of Congress” means—

(A) the Committee on Commerce, Science, and Transportation of the Senate; and

(B) the Committee on Science, Space, and Technology of the House of Representatives.

(2) Area career and technical education school

The term “area career and technical education school” has the meaning given the term in section 2302 of title 20.

(3) Center

The term “Center” means a manufacturing extension center that—

(A) is created under subsection (b); and

(B) is affiliated with an eligible entity that applies for and is awarded financial support under subsection (e).

(4) Community college

The term “community college” means an institution of higher education (as defined under section 1001(a) of title 20) at which the highest degree that is predominately awarded to students is an associate’s degree.

(5) Eligible entity

The term “eligible entity” means a United States-based nonprofit institution, an institution of higher education, or a State, United States territory, local, or tribal government or a consortium thereof.

(6) Historically Black college and university

The term “historically Black college and university” has the meaning given the term “part B institution” in section 1061 of title 20.

(7) ¹ Institution of higher education

The term “institution of higher education” has the meaning given such term in section 1001 of title 20.

(7) ¹ Hollings Manufacturing Extension Partnership or Program

The term “Hollings Manufacturing Extension Partnership” or “Program” means the program established under subsection (b).

(8) MEP Advisory Board

The term “MEP Advisory Board” means the Manufacturing Extension Partnership Advisory Board established under subsection (n).²

(9) Minority-serving institution

The term “minority-serving institution” means a Hispanic-serving institution as defined in section 1101a(a) of title 20; an Alaska Native-serving institution or Native Hawaiian-serving institution as defined in section 1059d(b) of title 20; or a Predominantly Black institution, Asian American and Native American Pacific Islander-serving institution, or Native American-serving nontribal institution as defined in section 1067q(c) of title 20.

(10) Secondary school

The term “secondary school” has the meaning given such term in section 7801 of title 20.

(11) Tribal College or University

The term “Tribal College or University” has the meaning given the term “Tribal College or University” in section 1059c of title 20.

(b) Establishment and purpose

The Secretary, acting through the Director and, if appropriate, through other Federal officials, shall establish a program to provide assistance for the creation and support of manufacturing extension centers for the transfer of manufacturing technology and best business practices.

(c) Objective

The objective of the Program shall be to enhance competitiveness, productivity, and technological performance in United States manufacturing through—

(1) the transfer of manufacturing technology and techniques developed at the Institute to Centers and, through them, to manufacturing companies throughout the United States;

(2) the participation of individuals from industry, institutions of higher education, State governments, other Federal agencies, and, when appropriate, the Institute in cooperative technology transfer activities;

(3) efforts to make new manufacturing technology and processes usable by United States-based small and medium-sized companies;

(4) the active dissemination of scientific, engineering, technical, and management information about manufacturing to United States-based industrial firms, including small and medium-sized manufacturing companies;

(5) the utilization, when appropriate, of the expertise and capability that exists in Federal agencies, other than the Institute, and federally-sponsored laboratories;

(6) the provision to secondary schools, community colleges, and area career and technical education schools, including those in underserved and rural communities, of information about the job skills needed in manufacturing companies, including small and medium-sized manufacturing businesses in the regions they serve;

(7) the promotion and expansion of certification systems offered through industry, associations, local secondary schools and local colleges, including historically Black colleges and universities, Tribal Colleges or Universities, minority-serving institutions, community colleges, and secondary schools and colleges in underserved and rural communities, when appropriate, including efforts such as facilitating training, supporting new or existing apprenticeships or other applied learning opportunities, and providing access to information and experts, to address workforce needs and skills gaps in order to assist small- and medium-sized manufacturing businesses; and

(8) the growth in employment and wages at United States-based small and medium-sized companies.

(d) Activities

The activities of a Center shall include—

(1) the establishment of automated manufacturing systems and other advanced production technologies, at United States-based industrial facilities, including small and medium manufacturing companies based on Institute-supported research, for the purpose of demonstrations and technology transfer;

(2) the active transfer and dissemination of research findings and Center expertise to a wide range of United States-based companies and enterprises, particularly small and medium-sized manufacturers; and

(3) the facilitation of collaborations and partnerships between United States-based small and medium-sized manufacturing companies and local high schools, community colleges, and area career and technical education schools, including those in underserved and rural communities, to help those entities better understand the specific needs of manufacturers and to help manufacturers better understand the skill sets that students learn in the programs offered by such colleges and schools.

(e) Financial assistance

(1) Authorization

Except as provided in paragraph (2), the Secretary may provide financial assistance for the creation and support of a Center through a cooperative agreement with an eligible entity.

(2) Cost sharing

The Secretary may not provide more than 50 percent of the capital and annual operating and maintenance funds required to establish and support a Center.

(3) Rule of construction

For purposes of paragraph (2), any amount received by an eligible entity for a Center under a provision of law other than paragraph (1) shall not be considered an amount provided under paragraph (1).

(4) Regulations

The Secretary may revise or promulgate such regulations as necessary to carry out this subsection.

(f) Applications

(1) In general

An eligible entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

(2) Program description

The Secretary shall establish and update, as necessary—

(A) a description of the Program;

(B) the application procedures;

(C) performance metrics;

(D) criteria for determining qualified applicants; and ³

(E) criteria for choosing recipients of financial assistance from among the qualified applicants.³

(F) procedures for determining allowable cost share contributions; and

(G) such other program policy objectives and operational procedures as the Secretary considers necessary.

(3) Cost sharing

(A) In general

To be considered for financial assistance under this section, an applicant shall provide adequate assurances that the applicant and if applicable, the applicant’s partnering organizations, will obtain funding for not less than 50 percent of the capital and annual operating and maintenance funds required to establish and support the Center from sources other than the financial assistance provided under subsection (e).

(B) Agreements with other entities

In meeting the cost-sharing requirement under subparagraph (A), an eligible entity may enter into an agreement with 1 or more other entities, such as a private industry, institutions of higher education, or a State, United States territory, local, or tribal government for the contribution by that other entity of funding if the Secretary determines the agreement—

(i) is programmatically reasonable;

(ii) will help accomplish programmatic objectives; and

(iii) is allocable under Program procedures under subsection (f)(2).

(4) Legal rights

Each applicant shall include in the application a proposal for the allocation of the legal rights associated with any intellectual property which may result from the activities of the Center.

(5) Merit review of applications

(A) In general

The Secretary shall subject each application to merit review.

(B) Considerations

In making a decision whether to approve an application and provide financial assistance under subsection (e), the Secretary shall consider, at a minimum—

(i) the merits of the application, particularly those portions of the application regarding technology transfer, training and education, and adaptation of manufacturing technologies to the needs of particular industrial sectors in the United States;

(ii) the quality of service to be provided;

(iii) the geographical diversity and extent of the service area; and

(iv) the type and percentage of funding and in-kind commitment from other sources under paragraph (3).

(g) Evaluations

(1) Third and eighth year evaluations by panel

(A) In general

The Secretary shall ensure that each Center is evaluated during its third and eighth years of operation by an evaluation panel appointed by the Secretary.

(B) Composition

The Secretary shall ensure that each evaluation panel appointed under subparagraph (A) is composed of—

(i) private experts, none of whom are connected with the Center evaluated by the panel; and

(ii) Federal officials.

(C) Chairperson

For each evaluation panel appointed under subparagraph (B), the Secretary shall appoint a chairperson who is an official of the Institute.

(2) Fifth year evaluations by Secretary

In the fifth year of operation of a Center, the Secretary shall conduct a review of the Center.

(3) Performance measurement

In evaluating a Center an evaluation panel or the Secretary, as applicable, shall measure the performance of the Center against—

(A) the objective specified in subsection (c);

(B) the performance metrics under subsection (f)(2)(C); and

(C) such other criterion as considered appropriate by the Secretary.

(4) Positive evaluations

If an evaluation of a Center is positive, the Secretary may continue to provide financial assistance for the Center—

(A) in the case of an evaluation occurring in the third year of a Center, through the fifth year of the Center;

(B) in the case of an evaluation occurring in the fifth year of a Center, through the eighth year of the Center; and

(C) in the case of an evaluation occurring in the eighth year of a Center, through the tenth year of the Center.

(5) Other than positive evaluations

(A) Probation

If an evaluation of a Center is other than positive, the Secretary shall put the Center on probation during the period beginning on the date that the Center receives notice under subparagraph (B)(i) and ending on the date that the reevaluation is complete under subparagraph (B)(iii).

(B) Notice and reevaluation

If a Center receives an evaluation that is other than positive, the evaluation panel or Secretary, as applicable, shall—

(i) notify the Center of the reason, including any deficiencies in the performance of the Center identified during the evaluation;

(ii) assist the Center in remedying the deficiencies by providing the Center, not less frequently than once every 3 months, an analysis of the Center, if considered appropriate by the panel or Secretary, as applicable; and

(iii) reevaluate the Center not later than 1 year after the date of the notice under clause (i).

(C) Continued support during period of probation

(i) In general

The Secretary may continue to provide financial assistance under subsection (e) for a Center during the probation period.

(ii) Post probation

After the period of probation, the Secretary shall not provide any financial assistance unless the Center has received a positive evaluation under subparagraph (B)(iii).

(6) Failure to remedy

(A) In general

If a Center fails to remedy a deficiency or to show significant improvement in performance before the end of the probation period under paragraph (5), the Secretary shall conduct a competition to select an operator for the Center under subsection (h).

(B) Treatment of Centers subject to new competition

Upon the selection of an operator for a Center under subsection (h), the Center shall be considered a new Center and the calculation of the years of operation of that Center for purposes of paragraphs (1) through (5) of this subsection and subsection (h)(1) shall start anew.

(h) Reapplication competition for financial assistance after 10 years

(1) In general

If an eligible entity has operated a Center under this section for a period of 10 consecutive years, the Secretary shall conduct a competition to select an eligible entity to operate the Center in accordance with the process plan under subsection (i).

(2) Incumbent eligible entities

An eligible entity that has received financial assistance under this section for a period of 10 consecutive years and that the Secretary determines is in good standing shall be eligible to compete in the competition under paragraph (1).

(3) Treatment of Centers subject to reapplication competition

Upon the selection of an operator for a Center under paragraph (1), the Center shall be considered a new Center and the calculation of the years of operation of that Center for purposes of paragraphs (1) through (5) of subsection (g) shall start anew.

(i) Process plan

Not later than 180 days after January 6, 2017, the Secretary shall implement and submit to Congress a plan for how the Institute will conduct an evaluation, competition, and reapplication competition under this section.

(j) Operational requirements

(1) Protection of confidential information of Center clients

The following information, if obtained by the Federal Government in connection with an activity of a Center or the Program, shall be exempt from public disclosure under section 552 of title 5:

(A) Information on the business operation of any participant in the Program or of a client of a Center.

(B) Trade secrets of any client of a Center.

(k) Oversight boards

(1) In general

As a condition on receipt of financial assistance for a Center under subsection (e), an eligible entity shall establish a board to oversee the operations of the Center.

(2) Standards

(A) In general

The Director shall establish appropriate standards for each board described under paragraph (1).

(B) Considerations

In establishing the standards, the Director shall take into account the type and organizational structure of an eligible entity.

(C) Requirements

The standards shall address—

(i) membership;

(ii) composition;

(iii) term limits;

(iv) conflicts of interest; and

(v) such other requirements as the Director considers necessary.

(3) Membership

(A) In general

Each board established under paragraph (1) shall be composed of members as follows:

(i) The membership of each board shall be representative of stakeholders in the region in which the Center is located.

(ii) A majority of the members of the board shall be selected from among individuals who own or are employed by small or medium-sized manufacturers.

(B) Limitation

A member of a board established under paragraph (1) may not serve on more than 1 board established under that paragraph.

(4) Bylaws

(A) In general

Each board established under paragraph (1) shall adopt and submit to the Director bylaws to govern the operation of the board.

(B) Conflicts of interest

Bylaws adopted under subparagraph (A) shall include policies to minimize conflicts of interest, including such policies relating to disclosure of relationships and recusal as may be necessary to minimize conflicts of interest.

(l) Acceptance of funds

(1) In general

To the extent provided in advance in appropriations Acts, other Federal departments and agencies may transfer amounts to the Institute, and the Secretary and Director may accept and make available cash donations from the private sector pursuant to section 272(c)(7) of this title, to be used for strengthening United States manufacturing under this section.

(2) Competitive awards

Funds accepted from other Federal departments and agencies and from the private sector under paragraph (1) shall be awarded competitively by the Secretary and Director to Centers, provided that the Secretary and Director may make noncompetitive ³ awards, pursuant to this section or section 278k-1 of this title, or as a non-competitive ³ contract, as appropriate, if the Secretary and Director determine that—

(A) the manufacturing market or sector targeted is limited geographically or in scope;

(B) the number of States (or territory, in the case of Puerto Rico) with Centers serving manufacturers of such market or sector is five or fewer; and

(C) such Center has or Centers have received a positive evaluation in the most recent evaluation conducted pursuant to subsection (g).

(m) MEP Advisory Board

(1) Establishment

There is established within the Institute a Manufacturing Extension Partnership Advisory Board.

(2) Membership

(A) Composition

(i) In general

The MEP Advisory Board shall consist of not fewer than 10 members appointed by the Director and broadly representative of stakeholders.

(ii) Requirements

Of the members appointed under clause (i)—

(I) at least 2 members shall be employed by or on an advisory board for a Center;

(II) at least 5 members shall be from United States small businesses in the manufacturing sector; and

(III) at least 1 member shall represent a community college.

(iii) Limitation

No member of the MEP Advisory Board shall be an employee of the Federal Government.

(B) Term

Except as provided in subparagraph (C), the term of office of each member of the MEP Advisory Board shall be 3 years.

(C) Vacancies

Any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term.

(D) Serving consecutive terms

Any person who has completed 2 consecutive full terms of service on the MEP Advisory Board shall thereafter be ineligible for appointment during the 1-year period following the expiration of the second such term.

(3) Meetings

The MEP Advisory Board shall—

(A) meet not less than biannually; and

(B) provide to the Director—

(i) advice on the activities, plans, and policies of the Program;

(ii) assessments of the soundness of the plans and strategies of the Program; and

(iii) assessments of current performance against the plans of the Program.

(4) Applicability of chapter 10 of title 5

(A) In general

In discharging its duties under this subsection, the MEP Advisory Board shall function solely in an advisory capacity, in accordance with chapter 10 of title 5.

(B) Exception

Section 1013 of title 5 shall not apply to the MEP Advisory Board.

(5) Annual report

(A) In general

At a minimum, the MEP Advisory Board shall transmit an annual report to the Secretary for transmittal to Congress not later than 30 days after the submission to Congress of the President’s annual budget under section 1105 of title 31.

(B) Contents

The report shall address the status of the Program and describe the relevant sections of the programmatic planning document and updates thereto transmitted to Congress by the Director under subsections (c) and (d) of section 278i ⁴ of this title.

(n) Small manufacturers

(1) Evaluation of obstacles

As part of the Program, the Director shall—

(A) identify obstacles that prevent United States-based small manufacturers from effectively competing in the global market;

(B) implement a comprehensive plan to train the Centers to address the obstacles identified in paragraph (2); and

(C) facilitate improved communication between the Centers to assist such manufacturers in implementing appropriate, targeted solutions to the obstacles identified in paragraph (2).

(2) Development of open access resources

As part of the Program, the Secretary shall develop open access resources that address best practices related to inventory sourcing, supply chain management, manufacturing techniques, available Federal resources, and other topics to further the competitiveness and profitability of small manufacturers.