S.Amdt. 4362

SA 4362. Mr. BROWN submitted an amendment intended to be proposed by
him to the bill S. 2943, to authorize appropriations for fiscal year
2017 for military activities of the Department of Defense, for military
construction, and for defense activities of the Department of Energy,
to prescribe military personnel strengths for such fiscal year, and for
other purposes; which was ordered to lie on the table; as follows:

At the end of title VIII, add the following:

Subtitle I--Technology Innovation and Acquisition Provisions

SEC. 899G. PILOT PROGRAM ON DISTRIBUTION OF ROYALTIES
RECEIVED BY DEPT OF DEFENSE LABORATORIES.

(a) In General.--Except as provided in subsections (b) and
(d), any royalties or other payments received by a Federal
agency from the licensing and assignment of inventions under
agreements entered into by Department of Defense
laboratories, and from the licensing of inventions of
Department of Defense laboratories, shall be retained by the
laboratory which produced the invention and shall be disposed
of as follows:
(1)(A) The laboratory director shall pay each year the
first $2,000, and thereafter at least 20 percent, of the
royalties or other payments, other than payments of patent
costs as delineated by a license or assignment agreement, to
the inventor or coinventors, if the inventor's or
coinventor's rights are assigned to the United States.
(B) A laboratory director may provide appropriate
incentives, from royalties or other payments, to laboratory
employees who are not an inventor of such inventions but who
substantially increased the technical value of the
inventions.
(C) The laboratory shall retain the royalties and other
payments received from an invention until the laboratory
makes payments to employees of a laboratory under
subparagraph (A) or (B).
(2) The balance of the royalties or other payments shall be
transferred by the agency to its laboratories, with the
majority share of the royalties or other payments from any
invention going to the laboratory where the invention
occurred. The royalties or other payments so transferred to
any laboratory may be used or obligated by that laboratory
during the fiscal year in which they are received or during
the 2 succeeding fiscal years--
(A) to reward scientific, engineering, and technical
employees of the laboratory, including developers of
sensitive or classified technology, regardless of whether the
technology has commercial applications;
(B) to further scientific exchange among the laboratories
of the agency;
(C) for education and training of employees consistent with
the research and development missions and objectives of the
agency or laboratory, and for other activities that increase
the potential for transfer of the technology of the
laboratories of the agency;
(D) for payment of expenses incidental to the
administration and licensing of intellectual property by the
agency or laboratory with respect to inventions made at that
laboratory, including the fees or other costs for the
services of other agencies, persons, or organizations for
intellectual property management and licensing services; or
(E) for scientific research and development consistent with
the research and development missions and objectives of the
laboratory.
(3) All royalties or other payments retained by the
laboratory after payments have been made pursuant to
paragraphs (1) and (2) that are unobligated and unexpended at
the end of the second fiscal year succeeding the fiscal year
in which the royalties and other payments were received shall
be paid into the Treasury of the United States.
(b) Disposition of Excess Royalties and Other Payments.--
If, after payments to inventors under subsection (a), the
royalties or other payments received by an agency in any
fiscal year exceed 5 percent of the budget of the agency for
that year, 75 percent of such excess shall be paid to the
Treasury of the United States and the remaining 25 percent
may be used or obligated under subsection (a)(2). Any funds
not so used or obligated shall be paid into the Treasury of
the United States.
(c) Treatment of Payments to Employees.--Any payment made
to an employee under this section shall be in addition to the
regular pay of the employee and to any other awards made to
the employee, and shall not affect the entitlement of the
employee to any regular pay, annuity, or award to which the
employee is otherwise entitled or for which the employee is
otherwise eligible or limit the amount thereof. Any payment
made to an inventor as such shall continue after the inventor
leaves the laboratory. Payments made under this section while
the inventor is still employed at the laboratory shall not
exceed $500,000 per year and after the inventor leaves the
laboratory shall not exceed $150,000 per year to any one
person, unless the President approves a larger award (with
the excess over $500,000 being treated as a Presidential
award under section 4504 of title 5, United States Code).
(d) Invention Management Services.--A laboratory receiving
royalties or other payments as a result of invention
management services performed for another Federal agency or
laboratory under section 207 of title 35, United States Code,
may retain such royalties or payments to the extent required
to offset payments to inventors under subparagraph (A) of
subsection (a)(1), costs and expenses incurred under
subparagraph (D) of subsection (a)(2), and the cost of
foreign patenting and maintenance for any invention of the
other agency. All royalties and other payments remaining
after offsetting the payments to inventors, costs, and
expenses described in the preceding sentence shall be
transferred to the agency for which the services were
performed, for distribution in accordance with subsection
(a)(2).
(e) Certain Assignments.--If the invention involved was one
assigned to the laboratory--
(1) by a contractor, grantee, or participant, or an
employee of a contractor, grantee, or participant, in an
agreement or other arrangement with the agency; or
(2) by an employee of the agency who was not working in the
laboratory at the time the invention was made,
the agency unit that was involved in such assignment shall be
considered to be a laboratory for purposes of this section.
(f) Sunset.--The pilot program under this section shall
terminate 5 years after the date of the enactment of this
Act.

SEC. 899H. METHODS FOR ENTERING INTO RESEARCH AGREEMENTS.

Section 2358(b) of title 10, United States Code, is
amended--
(1) in paragraph (3), by striking ``or'';
(2) in paragraph (4), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following new paragraphs:
``(5) by transactions other than contracts, cooperative
agreements, and grants entered into pursuant to sections 2371
and 2371b of this title; or
``(6) by procurement for experimental purposes pursuant to
section 2373 of this title.''.

SEC. 899I. PREFERENCE FOR USE OF OTHER TRANSACTIONS AND
EXPERIMENTAL AUTHORITY.

In the execution of science and technology programs, the
Secretary of Defense shall establish a preference for using
transactions other than contracts, cooperative agreements,
and grants entered into pursuant to sections 2371 and 2371b
of title 10, United States Code, and authority for
procurement for experimental purposes pursuant to section
2373 of title 10, United States Code.

SEC. 899J. MODIFICATION OF COST SHARING REQUIREMENT FOR USE
OF OTHER TRANSACTION AUTHORITY.

Section 2371b(d)(1) of title 10, United States Code, is
amended by striking subparagraph (C) and inserting the
following new subparagraph:
``(C) At least one third of the total cost of the prototype
project is to be paid out of funds provided by parties to the
transaction other than the Federal Government, including
funds from third party financial investment.''.

[[Page S3355]]

SEC. 899K. ENHANCED AUTHORITY OF CONTRACT AUTHORITY FOR
ADVANCED COMPONENT DEVELOPMENT AND PROTOTYPE
UNITS.

Section 819(b)(3) of the National Defense Authorization Act
for Fiscal Year 2010 (Public Law 111-84; 10 U.S.C. 2302 note)
is amended by striking ``the lesser of'' and all that follows
through ``$20,000,000'' and inserting ``the amount of
expenditure consistent with a major system, as defined in
section 2302d of title 10, United States Code''.

SEC. 899L. PERMANENCY AND ENHANCEMENT OF AUTHORITY FOR PRIZES
FOR ADVANCED TECHNOLOGY ACHIEVEMENTS.

Subsection (f) of section 2374a of title 10, United States
Code, is amended to read as follows:
``(f) Use of Prize Authority.--Use of prize authority under
this section shall be considered the use of competitive
procedures for purposes of chapter 137 of this title.''.
______