(a) Centers authorized The Secretary is authorized to make grants to and enter into contracts with any American overseas research center that is a consortium of institutions of higher education (hereafter in this section referred to as a "center") to enable such center to promote postgraduate research, exchanges and area studies. (b) Use of grants Grants made and contracts entered into pursuant to this section may be used to pay all or a portion of the cost of establishing or operating a center or program, including - (1) the cost of faculty and staff stipends and salaries; (2) the cost of faculty, staff, and student travel; (3) the cost of the operation and maintenance of overseas facilities; (4) the cost of teaching and research materials; (5) the cost of acquisition, maintenance, and preservation of library collections; (6) the cost of bringing visiting scholars and faculty to a center to teach or to conduct research; (7) the cost of organizing and managing conferences; and (8) the cost of publication and dissemination of material for the scholarly and general public. (c) Limitation The Secretary shall only award grants to and enter into contracts with centers under this section that - (1) receive more than 50 percent of their funding from public or private United States sources; (2) have a permanent presence in the country in which the center is located; and (3) are organizations described in section 501(c)(3) of title 26 which are exempt from taxation under section 501(a) of such title. (d) Development grants The Secretary is authorized to make grants for the establishment of new centers.

The grants may be used to fund activities that, within 1 year, will result in the creation of a center described in subsection (c) of this section.