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FYI Number 50: May 17, 2007

House Passes Bill Putting NIST Research Budget on Doubling Track

The House Science and Technology Committee has been very active this year. In addition to a full slate of weekly hearings, it has been successful in writing and then winning bipartisan passage on the House floor of several education and authorization bills. The latest committee bill approved by the House was H.R. 1868, the Technology Innovation and Manufacturing Stimulation Act.

H.R. 1868 could also be called the National Institute of Standards and Technology authorization act. Considered by the House the day after the NSF authorization bill (see http://www.aip.org/fyi/2007/048.html), H.R. 1868 was passed by a vote of 385-23 (see http://clerk.house.gov/evs/2007/roll301.xml) on May 3. NIST was last fully reauthorized in 1992.

The bill authorizes $2.5 billion for NIST programs in 2008, 2009, and 2010. Under the bill, Scientific and Technical Research and Services (STRS) would be authorized to increase from this year's budget of $434.37 million to $470.88 million. The Administration's request for FY 2008 is $500.5 million. The STRS authorization would increase to $537.6 million in FY 2010. At the full committee markup of the bill, Rep. David Wu (D-OR) commented that "these numbers put the lab programs on a path to doubling in ten years, consistent with the President's American Competitiveness Initiative." Both Wu and Rep. Phil Gingrey (R-GA), the senior Democratic and Republican members of the Technology and Innovation Subcommittee agreed at the markup that, as Wu said, "we wish we could do better, but the numbers are the numbers."

A notable achievement of this bill is mitigating the deadlock surrounding the Advanced Technology Program. The Bush Administration has recommended that ATP be terminated for the last five years, but has never succeeded in doing so. Last year was a near-death experience for ATP when both the House and Senate were poised to shut the program down (see http://www.aip.org/fyi/2006/094.html .) Congress' inability to pass an appropriations bill for the Commerce Department led to the eventual enactment of an all-encompassing resolution which continued funding for ATP for FY 2007.

H.R. 1868 repeals the law authorizing ATP and replaces it with a new Technology Innovation Program (TIP). The bill language states: "There is established in the Institute a Technology Innovation Program for the purpose of assisting United States businesses and institutions of higher education or other organizations, such as national laboratories and nonprofit research institutes, to accelerate the development and application of challenging, high-risk technologies that promise widespread economic benefits for the Nation." TIP single company grants for small and medium-sized business are limited to $3 million over three years for direct costs and are not to exceed 50 percent of total project costs (and can be extended at no additional cost if Congress is notified.) Provision is made for joint venture grants limited to $9 million over five years, with the federal contribution capped at 50 percent. Ongoing ATP grants would continue. A committee report explains: "In 1988, the Science and Technology Committee created the Advanced Technology Program (ATP) (P.L. 104-418). Although the ATP has been a highly successful program, the global innovation environment has changed. Therefore, H.R. 1868 replaces the ATP with the Technology Innovation Program (TIP). Building upon lessons learned from the ATP, TIP responds to global innovation competition by funding high-risk, high-reward, pre-competitive technology development with high potential for public benefit, focusing on small- and medium-sized firms. TIP also acknowledges the important role universities play in the innovation cycle by allowing universities to fully participate in the program."

During House consideration of this bill, Wu and Gingrey offered a TIP amendment that was accepted by voice vote. He told his House colleagues: "This amendment was developed as a result of recommendations of the Director of the National Institute of Standards and Technology. The amendment ensures that the Technology Innovation Program, TIP, will focus on high-reward technologies in areas of critical national need. In addition, it provides additional guidance that the program must coordinate with similar State organizations and programs. Many States have developed innovation agendas to stimulate job growth, and it makes sense that we should ensure that this program coordinates with these existing programs. Finally, the amendment includes a definition of high-risk, high-reward research." Speaking on behalf of Gingrey (who was attending a funeral), Rep. Vern Ehlers (R-MI) said the amendment was offered in response to concerns that had been expressed by the Bush Administration. Ehlers was referring to a May 1 one-page Statement of Administration Policy, a section of which explained that "the Administration does not support the level of funding or the focus and structure of the programs as currently reflected in the bill." It later added, "The House bill would divert NIST resources from core basic research activities toward less meritorious industrial policy." The statement did not threaten a presidential veto, and can be read at: http://www.whitehouse.gov/omb/legislative/sap/110-1/hr1868sap-r.pdf Rep. Rush Holt (D-NJ) spoke of favor of the new program, telling his colleagues: "TIP gives businesses and universities grants that encourage high-risk investments in technology, in cases where such investments have potential widespread economic benefits. This is a sound use of taxpayer money, as projected economic payoff to society is a necessary precondition for issuance of a grant. This program helps to solve the failure of market forces to encourage full investment in research and development. This failure of market forces is rooted in the fact that only one third of the financial reward of research and development investment is felt by investors, with the rest being felt by society as a whole."

The House later passed by voice vote an amendment offered by Rep. Albert Wynn (D-MD) that expands the type of eligible firm for TIP grants to those involved in biotechnology. The bill authorizes $110.0 million for TIP in 2008, $141.5 million in FY 2009, and $150.5 million in FY 2010. The current budget for the Advanced Technology Program is $79.1 million.

Another section of H.R. 1868 authorizes the public-private Manufacturing Extension Partnership Program, for which the Bush Administration requested $46.3 million in FY 2008. Current funding is $104.7 million. MEP is authorized at $113.0 million in FY 2008, $122.0 million in FY 2009, and $131.8 million in FY 2010.

Other sections of the bill require NIST to develop a three-year plan for its programs and activities, authorize spending for the Baldrige National Quality Award Program, authorize construction spending, establish cost-shared collaborative manufacturing research pilot grants, and authorize a manufacturing research database (as a result of an amendment offered by Rep. Donald Manzullo (R-IL)). The House rejected a motion offered by Rep. Philip English (R-PA) to tie increases for the new Technology Innovation Program to the federal budget deficit and the Social Security Trust Fund. This amendment was rejected by a vote of 190-216 after Wu warned his colleagues that the motion "would fundamentally gut this legislation" (see the roll call vote at http://clerk.house.gov/evs/2007/roll300.xml.)

Looking ahead, this NIST reauthorization bill, the recent House-passed NSF reauthorization bill, and two math-science education bills that have also passed the House will be likely merged into a single bill. The House and Senate would then appoint members to a conference where differences between the House legislation and the Senate's America COMPETES bill (see http://www.aip.org/fyi/2007/044.html ) would then be resolved.

Richard M. Jones
Media and Government Relations Division
American Institute of Physics
fyi@aip.org
301-209-3095

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