; or (B) a venture development organization. (3) Extramural budget (A) In general Except as provided in subparagraph (B), the term extramural budget means the sum of the total obligations minus amounts obligated for such activities by employees of the agency in or through Government-owned, Government-operated facilities. (B) Exceptions The term extramural budget shall not include— (i) with respect to the Department of Energy, amounts obligated for— (I) atomic energy defense programs solely for weapons activities; or (II) naval reactor programs; and (ii) with respect to United States Agency for International Development, amounts obligated solely for— (I) general institutional support of international research centers; or (II) grants to foreign countries. (4) Institution of higher education The term institution of higher education has the meaning given the term in section 101(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1001(a) ). (5) Nonprofit organization The term nonprofit organization means an entity or organization— (A) (i) described in section 501(c)(3) of the Internal Revenue Code of 1986; and (ii) exempt from taxation under 501(a) of such Act; or (B) described in paragraph (1) or (2) of section 170(c) of such Act. (6) Research or research and development The terms research and research and development mean any activity that is— (A) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (B) a systematic study directed specifically toward applying new knowledge to meet a recognized need; or (C) a systematic application of knowledge toward the production of useful materials, devices, and systems or methods, including design, development, and improvement of prototypes and new processes to meet specific requirements. (7) Secretary The term Secretary means the Secretary of Commerce. (8) State organization The term State organization means an entity that has been created by— (A) a State; (B) the Commonwealth of Puerto Rico