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FYI Number 96: July 26, 2001

Senate Appropriators Fund Advanced Technology Program

The difference between the positions taken by House and Senate appropriators about the future of the Advanced Technology Program could not be clearer. Earlier this month, the House accepted the recommendation of its appropriators in the FY 2002 Commerce, Justice, and State appropriations bill to discontinue new ATP funding (see FYI #92). As expected, the Senate appropriations subcommittee, under the new leadership of chairman Ernest Hollings (D-SC), one of the founders of the program, drafted a bill continuing the current level of funding for ATP for next year.

The House action followed the request of the Bush Administration that FY 2002 funding be suspended for new grants while ATP was reevaluated (see FYI #48). Some of this money would be used to increase the NIST Scientific and Technical Research and Services (STRS) budget. The Hollings bill fully funds ATP while reducing the STRS budget request of $347 million by less than $4 million, or 1.2%. Numbers for several STRS programs follow:

The Physics Laboratory budget is now $32,695,000. The Administration request was $37,154,000. The House bill provided $37,193,000. The Senate bill provides $37,054,000.

The Materials Science and Engineering Laboratory budget is now $56,397,000. The Administration request was $62,696,000. The House bill provided $62,766,000. The Senate bill provides $62,532,000.

The Electronics and Electrical Engineering Laboratory budget is now $40,797,000. The Administration request was $41,214,000. The House bill provided $41,286,000. The Senate bill provides $41,132,000.

The Senate report language provides an increase of $4.0 million within the amount provided for the Physics Program for "measurements, standards, and test methods for the development of advanced nanotechnologies."

The most extensive language of Senate Report 107-42 concerns the Advanced Technology Program, and seems written to respond to the House report language that contended,

"After many years in existence, the program has not produced a body of evidence to overcome those fundamental questions about whether the program should exist in the first place."

The Senate report states:

"The Committee recommends an appropriation of $204,200,000. The recommendation is $191,208,000 above the budget request. This amount, when combined with approximately $11,000,000 in carryover, will fully fund ATP awards at current levels. Within the amounts made available, $45,200,000 shall be used for administrative costs, internal laboratory support, and for Small Business Innovation Research Program [SBIR] requirements.

"The Committee notes that the Advanced Technology Program has been extensively reviewed. Since the inception of the ATP, there have been 52 studies conducted on the efficacy and merits of the program. The General Accounting Office has conducted 14 studies; 10 studies have been completed by the Department of Commerce, Office of the Inspector General; former Secretary of Commerce William Daley sponsored a 60-day study, and the National Research Council published, `ATP: Challenges and Opportunities' in 1999, and, `ATP: Assessing Outcomes' in 2001. In addition, 25 studies have been done by ATP's economic assessment office. These assessments reveal that the ATP does not fund projects that otherwise could have been financed in the private sector. Rather, the ATP facilitates so called `valley of death' projects that private capital markets are unable to fund.

"ATP has put a number of safeguards in place to ensure program funding does not replace private, venture capital funding. Since the 1998 competition, the ATP application form has included asking applicants to describe what efforts were made, prior to applying for ATP funding, to secure private capital for the project. In addition, this issue is addressed in oral reviews of project semifinalists.

"The Committee maintains that the government should play a role in choosing promising technologies to fund. From the telegraph to the Internet to biomedical research, government investment has spurred the development of new technologies and new fields which have had great impact on and held enormous benefit for the American people. According to the National Academy of Sciences' National Research Council, ATP's approach is funding new technologies that can contribute to important societal goals. For example, ATP supported GE Medical Systems in the development of a new method of producing large-area, flat-panel amorphous silicon detectors for X-rays. The research significantly reduced the number of processing steps required to manufacture the panels and increased the yield. The panels are the heart of a new digital mammography system which was one of the biggest breakthroughs in mammography in 20 years. In the sense that it was possible to manufacture these panels before, the broad research goal was not unique. However, the innovative technology was unique, and its development is making digital mammography more affordable and more widely available to women.

"The Committee concurs with the June 2001 National Academy of Sciences assessment [see FYI #79]; the many well-documented individual case studies; the Secretary's 1997 review; the February 1998 Development, Commercialization, and Diffusion Study; and the March 1999 review of the Performance of Completed Projects, all of which find that the ATP is a valuable and well-managed innovation program.

"In the budget request, the administration proposed a gradual phasing out of the Advanced Technology Program. The Committee does not recommend this approach and is concerned that the ATP awarding process could be purposely hindered as a result of this difference of opinion. Therefore, the Committee directs the Department of Commerce to submit a written plan on how it intends on making timely ATP awards in fiscal year 2002. This plan should be submitted to the Appropriations Subcommittees on Commerce, Justice, State and the Judiciary before any funds are obligated for Department of Commerce, Departmental Management."

Regarding the Manufacturing Extension Partnership Program, the Senate appropriators stated:

"The Committee recommends an appropriation of $105,137,000 to fully fund all of the MEP centers. The Committee recommends bill language to authorize the Secretary of Commerce to enter into agreements with nonprofit organizations to carry out collective research and development initiatives through the MEP. In addition, this language authorizes the Secretary to seek and accept contributions from public and private sources to support these efforts."

The House bill provides $106,522,000.

The two bills also differ regarding the FY 2002 construction budget. The House bill provides the Bush request of $20.9 million, down from the current budget of $34.8 million. The Senate report states:

"The Committee recommends an appropriation of $43,893,000. The recommendation is $23,000,000 above the budget request and fully funds the highest priority safety, capacity, maintenance, and repair projects at NIST. Of the amounts provided, $5,000,000 is provided for wiring improvements at the NIST research facility in Boulder, CO."

The next step for this bill, S. 1215, is the Senate floor. The provisions of the bill concerning the Advanced Technology Program are unlikely to be changed during Senate consideration of this bill. Following passage in the House, the bill will go to conference. Although the Bush Administration and House appropriators are likely to press their positions, it would be surprising if Senator Hollings would agree to any suspension of the Advanced Technology Program that he helped to establish.

Richard M. Jones
Public Information Division
American Institute of Physics
(301) 209-3095

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