    [House Hearing, 108 Congress]
    [From the U.S. Government Publishing Office]

                       H.R. 766, NANOTECHNOLOGY RESEARCH
                          AND DEVELOPMENT ACT OF 2003

    =======================================================================

                                    HEARING

                                   BEFORE THE

                              COMMITTEE ON SCIENCE
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED EIGHTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 19, 2003

                                   __________

                                Serial No. 108-6

                                   __________

                Printed for the use of the Committee on Science

         Available via the World Wide Web: http://www.house.gov/science

                                     ______

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                              COMMITTEE ON SCIENCE

                 HON. SHERWOOD L. BOEHLERT, New York, Chairman
    LAMAR S. SMITH, Texas                RALPH M. HALL, Texas
    CURT WELDON, Pennsylvania            BART GORDON, Tennessee
    DANA ROHRABACHER, California         JERRY F. COSTELLO, Illinois
    JOE BARTON, Texas                    EDDIE BERNICE JOHNSON, Texas
    KEN CALVERT, California              LYNN C. WOOLSEY, California
    NICK SMITH, Michigan                 NICK LAMPSON, Texas
    ROSCOE G. BARTLETT, Maryland         JOHN B. LARSON, Connecticut
    VERNON J. EHLERS, Michigan           MARK UDALL, Colorado
    GIL GUTKNECHT, Minnesota             DAVID WU, Oregon
    GEORGE R. NETHERCUTT, JR.,           MICHAEL M. HONDA, California
        Washington                       CHRIS BELL, Texas
    FRANK D. LUCAS, Oklahoma             BRAD MILLER, North Carolina
    JUDY BIGGERT, Illinois               LINCOLN DAVIS, Tennessee
    WAYNE T. GILCHREST, Maryland         SHEILA JACKSON LEE, Texas
    W. TODD AKIN, Missouri               ZOE LOFGREN, California
    TIMOTHY V. JOHNSON, Illinois         BRAD SHERMAN, California
    MELISSA A. HART, Pennsylvania        BRIAN BAIRD, Washington
    JOHN SULLIVAN, Oklahoma              DENNIS MOORE, Kansas
    J. RANDY FORBES, Virginia            ANTHONY D. WEINER, New York
    PHIL GINGREY, Georgia                JIM MATHESON, Utah
    ROB BISHOP, Utah                     DENNIS A. CARDOZA, California
    MICHAEL C. BURGESS, Texas            VACANCY
    JO BONNER, Alabama
    TOM FEENEY, Florida
    VACANCY

                                C O N T E N T S

                                 March 19, 2003

                                                                       Page
    Witness List.....................................................     2

    Hearing Charter..................................................     3

                               Opening Statements

    Statement by Representative Sherwood L. Boehlert, Chairman,
      Committee on Science, U.S. House of Representatives............    11
        Written Statement............................................    11

    Statement by Representative Ralph M. Hall, Minority Ranking
      Member, Committee on Science, U.S. House of Representatives....    12
        Written Statement............................................    12

    Prepared Statement by Representative Jerry F. Costello, Member,
      Committee on Science, U.S. House of Representatives............    13

    Prepared Statement by Representative Nick Smith, Chairman,
      Subcommittee on Research, Committee on Science, U.S. House of
      Representatives................................................    13

    Prepared Statement by Representative Jim Matheson, Member,
      Committee on Science, U.S. House of Representatives............    14

                                    Panel I

    Senator Ron Wyden of Oregon
        Oral Statement...............................................    15
        Written Statement............................................    16

    Senator George Allen of Virginia
        Oral Statement...............................................    18
        Written Statement............................................    20

    Discussion.......................................................    21

                                    Panel II

    Mr. Richard M. Russell, Associate Director for Technology, Office
      of Science and Technology Policy
        Oral Statement...............................................    22
        Written Statement............................................    25
        Biography....................................................    28

    Dr. Thomas N. Theis, Director of Physical Sciences, IBM Research
      Division, Thomas J. Watson Research Center
        Oral Statement...............................................    29
        Written Statement............................................    31
        Biography....................................................    34
        Financial Disclosure.........................................    35

    Dr. James B. Roberto, Associate Laboratory Director for Physical
      Sciences, Oak Ridge National Laboratory
        Oral Statement...............................................    36
        Written Statement............................................    37
        Biography....................................................    39

    Dr. Carl A. Batt, Co-Director of the Nanobiotechnology Center,
      Cornell University
        Oral Statement...............................................    39
        Written Statement............................................    42
        Biography....................................................    48

    Mr. Alan Marty, Executive-in-Residence, JP Morgan Partners
        Oral Statement...............................................    57
        Written Statement............................................    58
        Biography....................................................    63
        Financial Disclosure.........................................    64

    Discussion.......................................................    65

                 Appendix 1: Answers to Post-Hearing Questions

    Richard M. Russell, Associate Director for Technology, Office of
      Science and Technology Policy..................................    84

    Mr. Alan Marty, Executive-in-Residence, JP Morgan Partners.......    87

                 Appendix 2: Additional Material for the Record

    President's Council of Advisors on Science and Technology,
      Nanotechnology Work Plan.......................................    90

    CRS Report for Congress, Manipulating Molecules: The National
      Nanotechnology Initiative......................................    92

    H.R. 766, Nanotechnology Research and Development Act of 2003....    98

         H.R. 766, NANOTECHNOLOGY RESEARCH AND DEVELOPMENT ACT OF 2003

                                  ----------

                           WEDNESDAY, MARCH 19, 2003

                      House of Representatives,
                                          Committee on Science,
                                                        Washington, DC.

        The Committee met, pursuant to call, at 10:04 a.m., in Room
    2318 of the Rayburn House Office Building, Hon. Sherwood L.
    Boehlert (Chairman of the Committee) presiding.

                                hearing charter

                              COMMITTEE ON SCIENCE

                         U.S. HOUSE OF REPRESENTATIVES

                       H.R. 766, Nanotechnology Research

                          and Development Act of 2003

                           wednesday, march 19, 2003
                             10:00 a.m.-12:00 p.m.
                       2318 rayburn house office building

    PURPOSE

        On Wednesday, March 19, 2003, the House Science Committee will hold
    a hearing to examine federal nanotechnology research and development
    (R&D) activities and to consider H.R. 766, the Nanotechnology Research
    and Development Act of 2003, which would authorize these programs.

    2. WITNESSES

    Panel I

    Senator George Allen (R-VA), a former Governor of the State of Virginia
    and a former Member of the House of Representatives, serves on the
    Senate Committee on Commerce, Science and Transportation. Senator Allen
    chaired the GOP High Tech Task Force in the 107th Congress and is one
    of the lead sponsors, along with Senator Wyden, of S. 189, The 21st
    Century Nanotechnology Research and Development Act, the Senate
    companion to H.R. 766.

    Senator Ron Wyden (D-OR), the senior Senator from Oregon and a former
    Member of the House of Representatives, serves on the Senate Committee
    on Commerce, Science, and Transportation. Senator Wyden chairs the
    nonpartisan Forum on Technology & Innovation and is the lead sponsor,
    along with Senator George Allen (R-VA), of S. 189, The 21st Century
    Nanotechnology Research and Development Act.

    Panel II

    Mr. Richard M. Russell is the Associate Director for Technology at the
    Office of Science and Technology Policy (OSTP), the White House science
    office. Prior to joining OSTP he worked on the Presidential Transition
    Teams for the Department of Commerce, the National Science Foundation
    and OSTP. From 1995-2001, Mr. Russell served in various positions for
    the Committee on Science of the U.S. House of Representatives,
    including as Deputy Chief of Staff for the full Committee.

    Dr. Thomas N. Theis is the Director of Physical Sciences in the IBM
    Research Division at the Thomas J. Watson Research Center in Yorktown,
    New York. He is responsible for IBM's world-wide investments in
    research in the physical sciences. Dr. Theis serves on the advisory
    board for the National Science Foundation's National Nanofabrication
    Users network and was a member of the National Academy of Sciences
    committee that reviewed the National Nanotechnology Initiative.

    Dr. James Roberto is the Associate Laboratory Director for Physical
    Sciences at the Oak Ridge National Laboratory (ORNL) in Tennessee,
    where he oversees ORNL's physics, chemistry, and materials science
    research. Dr. Roberto led the effort to develop a nanotechnology
    roadmap for the laboratory, including research plans for the Center for
    Nanophase Materials Sciences, a national nanotechnology user facility
    currently under construction. He is a past President of the Materials
    Research Society and a past Chair of the Division of Materials Physics
    of the American Physical Society.

    Dr. Carl A. Batt is co-Director of the Nanobiotechnology Center at
    Cornell University, a National Science Foundation Science and
    Technology Center designed to advance interdisciplinary programs in
    nanobiotechnology. Dr. Batt is also the Project Leader for the Alliance
    for Nanomedical Technologies, a nanotechnology center supported by the
    State of New York. He is a professor of food science at Cornell and he
    is the founder of Agave BioSystems, a technology company focused on
    developing optical biosensors for the detection of microorganisms in
    food and the environment.

    Mr. Alan Marty is Executive-in-Residence for JP Morgan Partners with
    responsibility for leading the firm's nanotechnology investments.
    Previously Mr. Marty was General Manager of Hewlett-Packard's (HP)
    worldwide integrated circuit business with responsibility for all
    aspects the enterprise. He also served as General Manager of Agilent
    Technologies' microdisplay business, one of the earliest commercial
    applications of nanotechnology.

    3. OVERARCHING QUESTIONS

        The hearing will address the following overarching questions:

            1. What is the state of nanotechnology science and
            engineering? Are major new federal investments warranted in
            this area?

            2. What are the principal findings and recommendations of the
            National Academy of Sciences review of the National
            Nanotechnology Initiative? Are the findings and recommendations
            adequately addressed in H.R. 766?

            3. Among the challenges identified by the Academy review panel
            were the need to promote interdisciplinary research and
            education, and the need to effect greater interagency
            coordination. How can these challenges best be met? Are they
            adequately addressed in H.R. 766?

            4. What is the potential for future economic growth associated
            with nanotechnology developments? To what extent is the private
            sector investing in this area?

    4. BRIEF OVERVIEW

             Nanotechnology is the science of manipulating and
            characterizing matter at the atomic and molecular level. It is
            one of the most promising and exciting fields of science today,
            involving a multitude of science and engineering disciplines,
            with widespread applications in electronics, advanced
            materials, medicine, and information technology. For example,
            nanotechnology likely represents the future of information
            processing and storage, as computer chips and magnetic disk
            drive components will increasingly depend on nanotechnology
            innovations.

             The National Nanotechnology Initiative (NNI) is an
            $849 million (FY04 request) research initiative involving 10
            federal agencies--one of the President's most significant new
            commitments to continued U.S. leadership in science and
            technology.

             The National Academy of Sciences conducted a review
            of the NNI in 2002 and spoke favorably of the quality of the
            research and the opportunities for rapid technological
            innovation.

             On February 13, Chairman Boehlert and Mr. Honda
            introduced H.R. 766, the Nanotechnology Research and
            Development Act of 2003, which authorizes a federal
            nanotechnology research and development (R&D) program in
            statute thus assuring stable, long-term support. The bill also
            authorizes appropriations for nanotechnology R&D in those
            agencies within the Science Committee's jurisdiction that
            currently participate in the NNI. A companion bill, S. 189, has
            been introduced in the Senate by Senator Wyden and Senator
            Allen.

             H.R. 766 supports the President's initiative but adds
            review and oversight mechanisms to assure that new funds are
            used in the most effective manner possible. The bill also
            addresses a number of the issues raised by the National Academy
            of Sciences and other outside experts.

    5. ISSUES RAISED BY THE NATIONAL ACADEMY OF SCIENCES REVIEW OF THE
                        NATIONAL NANOTECHNOLOGY INITIATIVE

        In 2002, the National Academy of Sciences conducted a review\1\ of
    the National Nanotechnology Initiative (NNI), a national nanotechnology
    R&D program involving 10 federal agencies. In general, the Academy
    review panel was impressed with the leadership of NNI and the
    engagement of the participating agencies. The panel indicated that the
    quality of the research and the potential return to society are both
    high. The panel did flag some issues, however, and made a number of
    recommendations, including:
    ---------------------------------------------------------------------------
        \1\ Small Wonders, Endless Frontiers: A Review of the National
    Nanotechnology Initiative, National Academy Press, Washington, DC,
    2002.
    ---------------------------------------------------------------------------
    Recommendations from the National Academy of Sciences

    Establish an Independent Advisory Board: the Academy panel recommended
    the establishment of an independent standing advisory board on
    nanotechnology composed of leaders from industry and academia with
    scientific, technical, social science, or research management
    credentials to provide advice on research investment policy, strategy,
    program goals, and management processes.

    Develop a Strategic Plan: the panel recommended the development of a
    crisp, compelling, overarching strategic plan that articulates short-
    (1 to 5 years), medium- (6 to 10 years), and long-range (beyond 10
    years) goals and objectives, emphasizing goals that move results out of
    the laboratory and into the service of society.

    Effect Greater Interagency Coordination: the panel noted that the
    current interagency coordination mechanism--the Nanoscale Science,
    Engineering and Technology (NSET) Subcommittee of the National Science
    and Technology Council--is a strong foundation upon which to build an
    NNI that adds up to more than the sum of its parts, but that more
    meaningful interagency coordination and collaboration is required.

    Promote Interdisciplinary Nanotechnology R&D: the panel noted that
    nanotechnology is leading researchers along pathways where many
    different disciplines converge--biology, physics, chemistry, materials
    science, mechanical engineering, and electrical engineering, to name
    several. The panel noted further that our educational system is not
    producing researchers who are capable of engaging in research that
    crosses disciplinary boundaries and that many of the customs of
    academic research, including the way research grants are evaluated and
    the way faculty are judged for tenure and promotion, reinforce
    disciplinary boundaries and may frustrate interdisciplinary research.
    Accordingly, the panel recommended strong support for the development
    of an interdisciplinary culture of nanotechnology research.

    Address Potential Societal and Ethical Concerns: the panel noted that
    the social and economic consequences of nanotechnology promise to be
    diverse, difficult to anticipate, and sometimes disruptive. The
    increasing rate of innovation associated with nanotechnology
    developments has the potential to compress the time from discovery to
    full deployment, thereby shortening the time society has to adjust to
    these changes. The panel recommended that research on the potential
    societal and ethical concerns associated with nanotechnology, and
    research directed toward improving our understanding of how technical
    and social systems affect each other, should be an integral part of any
    federal nanotechnology R&D program.

    6. ISSUES ADDRESSED IN H.R. 766

        H.R. 766 authorizes the President's National Nanotechnology
    Initiative in statute, providing a basis for sustained, long-term
    funding nanotechnology research. The bill adds review and oversight
    mechanisms to assure that new monies included in the President's fiscal
    year 2004 budget request are used in the most effective manner
    possible. H.R. 766 addresses a number of the issues raised by the
    National Academy of Sciences and other outside experts, through the
    following provisions:

    Provisions in H.R. 766 That Address Issues Raised in the Academy Review

    Advisory Committee: responding to the first recommendation of the
    National Academy of Sciences review panel, H.R. 766 establishes an
    advisory committee--appointed by the President and consisting of
    outside experts qualified to provide advice on nanotechnology R&D,
    education, technology transfer, commercial application, and societal
    and ethical concerns--to conduct a broad assessment of federal
    nanotechnology R&D activities and issue a biennial report. This
    provision has stirred minor controversy. Citing expense and limited
    resources, the Administration has indicated that it would prefer not to
    convene a new Presidential advisory committee devoted to
    nanotechnology. Instead, the President's Council of Advisors on Science
    and Technology (PCAST) has been tasked with conducting ongoing review
    and oversight of federal nanotechnology programs.

    Interagency Committee: responding to the Academy review panel's call
    for more meaningful interagency coordination and a strategic plan, H.R.
    766 establishes in statute an interagency committee, similar to the
    existing subcommittee on Nanoscale Science, Engineering and Technology
    (NSET), to oversee the planning, management, and coordination of all
    federal nanotechnology R&D activities. The bill designates the Director
    of the Office of Science and Technology Policy to serve as chair of the
    Interagency Committee and requires the Committee to include
    representatives of participating federal agencies, as well as
    representatives from the Office of Management and Budget. H.R. 766
    requires the Interagency Committee to establish goals and priorities,
    establish program component areas to implement those goals and
    priorities, develop a strategic plan to be updated annually, consult
    widely with stakeholders, and propose a coordinated interagency budget
    for federal nanotechnology R&D.

    Coordination Office: the bill also authorizes in statute the
    Administration's National Nanotechnology Coordination Office, with
    full-time staff, to provide technical and administrative support to the
    Interagency Committee and the Advisory Committee, to serve as a point
    of contact for outside groups, and to conduct public outreach.

    Interdisciplinary Research and Education: responding to the Academy
    review panel's recommendation, and similar recommendations offered by
    other outside experts, H.R. 766 authorizes sustained support for
    interdisciplinary nanotechnology R&D through grants to researchers and
    through the establishment of interdisciplinary research centers and
    advanced technology user facilities. The bill requires the activities
    of the National Nanotechnology R&D Program to ensure that solicitation
    and evaluation of proposals under the Program encourage
    interdisciplinary research.

    Societal and Ethical Concerns: again responding to the Academy's
    recommendation, H.R. 766 establishes a research program to identify
    societal and ethical concerns related to nanotechnology and requires
    that such research be integrated into nanotechnology R&D programs
    insofar as possible.

    Periodic External Review: H.R. 766 requires the Director of the Office
    of Science and Technology Policy to contract with the National Academy
    of Sciences to conduct a review of federal nanotechnology R&D programs
    every three years, including an assessment of technical progress,
    managerial effectiveness, and adequacy in addressing societal and
    ethical concerns.

    7. BACKGROUND

        The recent National Academy of Sciences review describes
    nanotechnology as the ``. . .relatively new ability to manipulate and
    characterize matter at the level of single atoms and small groups of
    atoms.. . . This capability has led to the astonishing discovery that
    clusters of small numbers of atoms or molecules often have properties--
    such as strength, electrical resistivity, electrical conductivity, and
    optical absorption--that are significantly different from the
    properties of the same matter at either the single-molecule scale or
    the bulk scale.'' Scientists and engineers anticipate that
    nanotechnology will lead to ``materials and systems with dramatic new
    properties relevant to virtually every sector of the economy, such as
    medicine, telecommunications, and computers, and to areas of national
    interest such as homeland security.''
        A variety of nanotechnology products are already in development or
    on the market, including stain-resistant, wrinkle-free pants and
    ultraviolet-light blocking sunscreens. Other applications involve
    Kodak's use of scratch-free, transparent coatings and Samsung's new
    high-brightness displays. Experts agree that more revolutionary
    products will emerge from nanotechnology research currently underway.
    Many small start-up companies have been founded to develop new
    technologies and new products based on breakthroughs in our
    understanding of materials at the atomic and molecular level.

    The National Nanotechnology Initiative
        The National Nanotechnology Initiative (NNI), formally established
    in 2001, is the President's most ambitious interagency,
    interdisciplinary science and technology program. Ten federal agencies
    actively participate in research and development efforts that involve
    physicists, chemists, biologists, engineers, and researchers from many
    other disciplines. The initiative has grown rapidly from an initial
    budget request of $464 million in fiscal year 2001 to the $849 million
    requested for fiscal year 2004 (although these numbers are not strictly
    comparable as some ongoing research programs have, over time, evolved
    into nanotechnology research).
        While each agency involved in the NNI focuses its research on that
    agency's unique mission, the overall effort is organized at the White
    House level through the articulation of Grand Challenges--or broad,
    mission-related, technical goals. These include nanotechnology-based
    innovations in manufacturing, energy production and storage,
    information technology, medicine, robotics, aeronautics, and defense
    and homeland security applications.
        Recognizing the inherently interdisciplinary nature of
    nanotechnology science and engineering, NNI supports research through
    nanotechnology centers and user facilities, designed to bring
    researchers from multiple disciplines together, as well as through
    grants to individual researchers and groups of researchers. The
    National Science Foundation (NSF), the Department of Energy, and the
    National Aeronautics and Space Administration (NASA) currently sponsor,
    or are in the process of establishing, a number of nanotechnology
    research centers and user facilities around the country. Among the NSF-
    supported centers, some are focused on specific industries, such as the
    Center for Nanoscale Systems in Information Technologies at Cornell
    University. Others are national user facilities, such as the
    nanofabrication facilities at Stanford University and Pennsylvania
    State University, and one, the Center on Biological and Environmental
    Nanotechnology at Rice University, conducts research on the societal
    implications nanotechnology development.
        The overall federal effort is coordinated by the National Science
    and Technology Council's (White House coordinating council composed of
    the heads of the major research agencies) Subcommittee on Nanoscale
    Science, Engineering and Technology (NSET), which has responsibility
    for interagency planning and review. While each agency consults with
    the NSET Subcommittee, the agency retains control over how resources
    are allocated against its proposed NNI plan. Each agency then uses its
    own methods for inviting and evaluating research proposals.

        *FY04 authorizations in H.R. 766 conform to the President's budget
    request except for the NSF nanotechnology authorization, which conforms
    to the National Science Foundation Act of 2002 signed into law by the
    President last December, P.L. 107-368.

    8. WITNESS QUESTIONS

    Panel I
        No questions for Senator Allen or Senator Wyden.
    Panel II
        The witnesses were asked to address the following questions in
    their testimony:

    Questions for Mr. Richard Russell

             What are the Administration's views on H.R. 766, the
            Nanotechnology Research and Development Act of 2003?

             What are the Administration's plans for the National
            Nanotechnology Initiative this year?

    Questions for Dr. Thomas Theis

             What are the principal findings and recommendations
            of the National Academy of Sciences review of the National
            Nanotechnology Initiative? Are there any improvements to H.R.
            766 you would suggest in light of these recommendations?

             Where are you targeting IBM's nanotechnology research
            efforts? Are there particular industrial sectors that will
            benefit in the near-term from anticipated nanotechnology
            developments?

             Are there potential societal and ethical concerns
            associated with the development of nanotechnology? If so, how
            should they be addressed?

             Are the views of the U.S. research community
            adequately reflected in the research plan for the federal
            interagency nanotechnology research initiative? Do you believe
            that there would be value in establishing an external advisory
            committee for the initiative?

    Questions for Dr. James Roberto

             Through a workshop and other planning exercises, Oak
            Ridge National Laboratory (ORNL) has developed a roadmap for
            its Nanoscale Science, Engineering and Technology research
            programs, establishing criteria by which staff research
            proposals are evaluated. ONRL's planning and management
            activities are analogous to the tasks assigned to the
            Interagency Committee established in section 3(c) of H.R. 766.
            In your view, would it be worthwhile to develop a national
            technology roadmap to guide federal nanotechnology research? To
            your knowledge, is such an effort underway now?

             Likewise, ORNL's Center for Nanophase Materials
            Sciences, currently under construction, could be a model for
            the interdisciplinary research centers and advanced technology
            user facilities authorized in section 3(b). How will the Center
            foster effective collaboration across academic disciplines, and
            among government, university, and industry researchers?

             Some individuals and groups have suggested that
            nanotechnology developments may raise societal and ethical
            concerns. Is any part of ORNL's activity devoted to addressing
            such concerns?

             Are the views of the research community affiliated
            with ORNL adequately reflected in the research plan for the
            federal interagency nanotechnology research initiative? Do you
            believe that there would be value in establishing an external
            advisory committee for the initiative?

    Questions for Dr. Carl Batt

             How does the Cornell Nanobiotechnology Center advance
            nanotechnology research and development compared to what the
            University could accomplish on its own? Does the center
            actively foster collaboration across academic disciplines, for
            example?

             How does your center interface with the private
            sector? Do you host any collaborative university-industry
            nanotechnology research and, if the answer is yes, does the
            existence of the center make those collaborations easier?

             Some individuals and groups have suggested that
            nanotechnology developments may raise societal and ethical
            concerns. Is any part of your center's activity devoted to
            addressing such concerns?

             Are the views of the academic research community
            adequately reflected in the research plan for the federal
            interagency nanotechnology research initiative? Do you believe
            that there would be value in establishing an external advisory
            committee for the initiative?

    Questions for Mr. Alan Marty

             How or where is JP Morgan Partners investing in
            nanotechnology? Are there particular industrial sectors that
            look more promising than others?

             Is the private sector primarily engaged in basic
            nanotechnology research or do you expect marketable products
            and services to be available in the near-term?

             How do federal nanotechnology research and
            development programs affect your investment decisions?

             Some individuals and groups have suggested that
            nanotechnology developments may raise societal and ethical
            concerns. Does this affect your investment choices? Are the
            companies you are involved with addressing these issues in any
            way?

    APPENDIX I

        Section-by-Section Analysis of the Nanotechnology Research and
                            Development Act of 2003

    Sec. 1. Short Title

        ``Nanotechnology Research and Development Act of 2003.''

    Sec. 2. Definitions

        Defines terms used in the text.

    Sec. 3. National Nanotechnology Research and Development Program

        Establishes an interagency R&D program to promote and coordinate
    federal nanotechnology research, development, demonstration, education,
    technology transfer, and commercial application activities. The program
    will provide sustained support for interdisciplinary nanotechnology R&D
    through grants to researchers and through the establishment of
    interdisciplinary research centers and advanced technology user
    facilities.
        Establishes a research program to identify societal and ethical
    concerns related to nanotechnology and requires that such research be
    integrated into nanotechnology R&D programs insofar as possible.
        Establishes an interagency committee, chaired by the Director of
    the Office of Science and Technology Policy, and composed of
    representatives of participating federal agencies, as well as
    representatives from the Office of Management and Budget, to oversee
    the planning, management, and coordination of all federal
    nanotechnology R&D activities. Requires the Interagency Committee to
    establish goals and priorities, establish program component areas to
    implement those goals and priorities, develop a strategic plan to be
    updated annually, consult widely with stakeholders, and propose a
    coordinated interagency budget for federal nanotechnology R&D.

    Sec. 4. Annual Report

        Requires the Office of Science and Technology Policy to submit an
    annual report, at the time of the President's budget request to
    Congress, describing federal nanotechnology budgets and activities for
    the current fiscal year, and what is proposed for the next fiscal year,
    by agency and by program component area. Requires that the report
    include an analysis of the progress made toward achieving the goals and
    priorities established for federal nanotechnology R&D, and the extent
    to which the program incorporates the recommendations of the Advisory
    Committee (established in sec. 5).

    Sec. 5. Advisory Committee

        Establishes a Presidentially-appointed advisory committee,
    consisting of non-federal experts, to conduct a broad assessment of
    federal nanotechnology R&D activities and issue a biennial report.

    Sec. 6. National Nanotechnology Coordination Office

        Establishes a National Nanotechnology Coordination Office with
    full-time staff to provide technical and administrative support to the
    Interagency Committee and the Advisory Committee, to serve as a point
    of contact for outside groups, and to conduct public outreach.

    Sec. 7. Authorization of Appropriations

        Authorizes appropriations for nanotechnology R&D programs at the
    National Science Foundation, the Department of Energy, the National
    Aeronautics and Space Administration, the National Institute of
    Standards and Technology, and the Environmental Protection Agency (see
    table below).

    Sec. 8. External Review of the National Nanotechnology Research and
                        Development Program

        Requires the Director of the Office of Science and Technology
    Policy to contract with the National Academy of Sciences to conduct a
    triennial review of federal nanotechnology R&D programs including
    technical progress, managerial effectiveness, and adequacy in
    addressing societal and ethical concerns.

    APPENDIX II

        See text of H.R. 766 located in Appendix 1: Additional Material for
    the Record, pp. 90-93.
        Chairman Boehlert. Good morning. The hearing will come to
    order. It is a pleasure to welcome everyone here this morning,
    and I wanted to give a special welcome to Richard Russell,
    formerly Deputy Chief of Staff for this committee, who is
    returning to his old precincts. I am sure he will be able to
    make it through his testimony despite the pangs of nostalgia.
        I am going to keep my remarks this morning brief, because
    nanotechnology is the subject on which there is already broad
    agreement: on this dais, at the witness table, and indeed in
    the Congress and country at large. We all understand that
    nanotechnology can be a key to future economic prosperity and
    might improve our lives and that the Federal Government needs
    to play a role in making that so.
        With that in mind, I introduced H.R. 766 with Mr. Honda and
    with the senior Members of this committee on both sides of the
    aisle as cosponsors. Our plan is to have another hearing on
    this subject on April 9, that hearing focusing exclusively on
    societal consequences and then report out the bill in late
    April or early May. It should be able to move to the House
    floor swiftly after that. And as the welcome presence today of
    Senators Wyden and Allen indicates, the Senate is extremely
    interested in this matter and is providing some real
    leadership. We worked successfully with Senators Allen and
    Wyden on a wide range of issues last Congress, including
    cybersecurity, and I am pleased that our partnership continues.
        The hallmarks of H.R. 766 are three-fold. It aims to
    increase interdisciplinary research, interagency coordination,
    and research, excuse me, on societal consequences. It builds on
    the excellent proposed budgets that have been put forward by
    the Administration for nanotechnology. I think it is safe to
    say that the bill is pretty non-controversial. It has been
    endorsed by leading industry groups. I know the Administration
    has some concerns about the Advisory Committee language, and I
    have no doubt that those can be worked out.
        The bill is designed to usher in a day when nanotechnology
    is so routine that none of us feel compelled to make the
    tiresome puns that now always attend discussions of nano. I
    want to see nano become so much a part of daily life that
    discussions of it are nothing more than, well, small talk. I am
    sure we all look forward to that day.
        Mr. Hall.
        [The prepared statement of Mr. Boehlert follows:]

                Prepared Statement of Chairman Sherwood Boehlert

        It's a pleasure to welcome everyone here this morning, and I want
    to give a special welcome to Richard Russell, formerly the Deputy Chief
    of Staff of this committee, who is returning to his old precincts. I'm
    sure he will be able to make it through his testimony despite the pangs
    of nostalgia.
        I'm going to keep my remarks this morning brief because
    nanotechnology is a subject on which there is already broad agreement--
    on this dais, at the witness table, and indeed in the Congress and
    country at large. We all understand that nanotechnology can be a key to
    future economic prosperity and might improve our lives and that the
    Federal Government needs to play a role in making that so.
        With that in mind, I introduced H.R. 766 with Mr. Honda, and with
    the senior Members of this committee on both sides of the aisle as
    cosponsors. Our plan is to have another hearing on the subject on April
    9--that hearing focusing exclusively on societal consequences--and then
    report out the bill in late April or early May. It should be able to
    move to the House floor swiftly after that. And as the welcome presence
    today of Senators Wyden and Allen indicates, the Senate is extremely
    interested in this matter. We worked successfully with Senators Allen
    and Wyden on a wide range of issues last Congress, including cyber
    security, and I'm pleased that our partnership continues.
        The hallmarks of H.R. 766 are three-fold. It aims to increase
    interdisciplinary research, interagency coordination and research on
    societal consequences.
        It builds on the excellent proposed budgets that have been put
    forward by the Administration for nanotechnology. I think it's safe to
    say that the bill is pretty non-controversial. It's been endorsed by
    leading industry groups. I know the Administration has some concerns
    about the advisory committee language, and I have no doubt that those
    can be worked out.
        The bill is designed to usher in a day when nanotechnology is so
    routine that none of us feel compelled to make the tiresome puns that
    now always attend discussions of nano. I want to see nano become so
    much a part of daily life, that discussions of it are nothing more
    than, well, small talk. I'm sure we all look forward to that day.
        Mr. Hall.

        Mr. Hall. Mr. Chairman, because of the importance of the
    time of the two Senators in front of us, I won't read my entire
    opening statement. I just will say that I thank you for having
    the witnesses here today. I thank you for your time, both of
    you, friends of mine, long-time colleagues, have always
    complained that he sat between Congressman Tallson and my Chair
    and that we ``immersed him in oil'' was the way he put it. But
    he was always a gentleman, always helpful, always very
    intelligent, and a good member of the Senate. I am honored to
    have both of you here.
        I think nanotechnology is going to have enormous
    consequences for the information industry, manufacturing, for
    medicine and health, and indeed the scope of this technology is
    so broad, it is to leave virtually no product untouched. So we
    will have a pretty wide open field, and I would like unanimous
    consent or ask the consent of the Chairman to put my entire
    opening statement, which is an outstanding statement, and some
    time later, I will get a chance to read all of it.
        But thank you for calling this hearing on this important
    legislative measure, and I appreciate the attendance of the
    witnesses today and look forward to our discussion and yield
    back my time. Thank you.
        [The prepared statement of Mr. Hall follows:]

               Prepared Statement of Representative Ralph M. Hall

        I am pleased to join the Chairman in welcoming our witnesses to
    today's hearing on nanotechnology.
        The advancement of civilization has been tied to human capabilities
    to manipulate and fashion materials. For example, the stone age gave
    way to the bronze age, which in turn gave way to the iron age. The
    trend has been a better understanding of material properties at a
    smaller and more detailed level.
        Now, we stand at the threshold of an age in which materials can be
    fashioned atom-by-atom. As a result, new materials can be designed with
    specified characteristics to satisfy specific purposes.
        The word ``revolutionary'' has become a cliche. But nanotechnology,
    which is the subject of today's hearing, truly is revolutionary. As
    stated in a report from the National Research Council:

            L``The ability to control and manipulate atoms, to observe and
            simulate collective phenomena, to treat complex materials
            systems, and to span length scales from atoms to our everyday
            experience, provides opportunities that were not even imagined
            a decade ago.''

        Nanotechnology will have enormous consequences for the information
    industry, for manufacturing, and for medicine and health. Indeed, the
    scope of this technology is so broad as to leave virtually no product
    untouched.
        At today's hearing we will consider bipartisan legislation that the
    Chairman and Congressman Honda, along with 10 additional colleagues,
    have introduced to authorize the National Nanotechnology Initiative.
        In addition to setting funding goals, the bill puts in place
    mechanisms for planning and coordinating the interagency research
    program. The bill also includes provision for outside, expert advice to
    help guide the research program and ensure its relevance to emerging
    technological opportunities and to industry.
        I am interested in hearing the views of our witnesses on the merits
    of the legislation and their recommendations for ways to improve it.
    Our witnesses should also feel free to provide their assessments of the
    content and management of the current federally supported
    nanotechnology research effort.
        I want to thank the Chairman for calling a hearing on this
    important legislative measure. I appreciate the attendance of our
    witnesses today, and I look forward to our discussion.

        [The prepared statement of Mr. Costello follows:]

             Prepared Statement of Representative Jerry F. Costello

        Good morning. I want to thank the witnesses for appearing before
    this committee to discuss federal nanotechnology research and
    development activities and to consider H.R. 766, the Nanotechnology
    Research and Development Act of 2003, which would authorize these
    federal programs. The President's 2004 Budget provides $847 million for
    the multi-agency National Nanotechnology Initiative (NNI), a 9.5
    percent increase over 2003. This investment will advance fundamental
    understanding of the nanoscale phenomena. This increased understanding
    promises to underlie revolutionary advances that will contribute to
    improvements in medicine, manufacturing, high-performance materials,
    information technology, and environmental technologies.
        Nanotechnology can best be considered as a ``catch-all''
    description of activities at the level of atoms and molecules that have
    applications in the real world. A variety of nanotechnology products
    are already in development or on the market, including stain-resistant,
    wrinkle free pants and ultraviolet-light blocking sunscreens.
        A unique feature of nanotechnology is that it is the one area of
    research and development that is truly multidisciplinary. Research is
    unified by the need to share knowledge on tools and techniques, as well
    as information on the physics affecting atomic and molecular
    interactions in this new realm. Materials scientists, mechanical and
    electronic engineers and medical researchers are now forming teams with
    biologists, physicists and chemists.
        Illinois is among the leaders in nanotechnology. During the last
    few years, success in the areas of nanotechnology at Southern Illinois
    University-Carbondale (SIUC) have included patented technology for
    conversion of carbon dioxide into methanol and sensors to detect
    corrosion and stress in highway bridges. SIUC has also developed
    industrial partnerships and collaborations with IBM, Proctor & Gamble,
    and Argonne National labs to further research and development at the
    atomic and molecular scale.
        To keep America dominant in nanotechnology, I believe we must
    create a coordinated interagency effort that would support long-term
    nanoscale research and development, increase America's competitiveness
    in nanoscale technology, and promote effective education and training
    for the next generation of nanotechnology researchers and
    professionals. H.R. 766 accomplishes these goals. I am interested to
    hear from our panel on any further recommendations zor improvements to
    this legislation based on the National Academy of Sciences review of
    the National Nanotechnology Initiative. Further, I am interested in
    discussing the potential societal and ethical concerns associated with
    the development of nanotechnology and how these concerns should be
    addressed.
        I thank the witnesses for appearing before our committee and look
    forward to their testimony.

        [The prepared statement of Mr. Smith follows:]

                Prepared Statement of Representative Nick Smith

        I want to thank Chairman Boehlert for holding this hearing today to
    review the status of federally funded nanotechnology research and
    development activities and to review H.R. 766, which would authorize
    the National Nanotechnology Initiative activities (NNI) into law.
        Nanotechnology is defined in H.R. 766 as ``science and engineering
    at the atomic and molecular level.'' It holds incredible promise in a
    wide range of scientific disciplines. While relatively few
    nanotechnology products are on the market today, such as my stain-
    resistant, wrinkle-free pants, the industry is very close to achieving
    several important breakthroughs that include revolutionary new
    applications in materials science, manufacturing, energy production,
    information technology, medicine, and defense and homeland security
    applications.
        Like the biotechnology and information technology sectors of 10-15
    years ago, nanotechnology has reached a critical growth stage. As these
    emerging innovations near fruition, it is important that the Congress
    works pro-actively to guide the industry through the inevitable growing
    pains that lie ahead. To accomplish this, we will need to intensify our
    support for research and experimentation in nanosciences--specifically
    the fundamental, novel research that is too risky for the private
    sector to undertake. This effort, combined with strengthened
    coordination and management of the multi-agency NNI, will help to
    bridge the necessary link to the wide reach of business and industry
    interests eager to create new products out of that research. The bill
    before us today, that many of us have co-sponsored, will help us do
    just that.
        If the information technology revolution is any guide, the
    nanotechnology revolution will not only improve our lives through the
    development of many exciting new products, its contribution to
    productivity gains could also help brighten future fiscal situations.
    As the Semiconductor Industry Association has pointed out, the
    Congressional Budget Office (CBO) estimation of the $1.3 trillion
    projected deficit that we're facing for fiscal years 2004-2013 would
    actually be $247 billion higher if it were not for improvements in
    productivity due to computers. If we succeed in our effort to harness
    the potential of nanotechnology, we will see productivity and revenue
    gains of a similar magnitude.
        As Chairman of the Research Subcommittee, which maintains oversight
    of the National Science Foundation, we have held hearings on the
    potentials of nanotechnology. I am particularly interested in hearing
    the ideas today's witnesses may have on how to maximize NSF's
    contribution to the initiative. NSF is the largest federal supporter of
    non-medical basic research conducted at universities, and at $221
    million for FY 2003, comprises almost 30 percent of the NNI budget. It
    is important that the cutting-edge fundamental research conducted at
    NSF is utilized by other agencies and the private sector and
    transformed into real-world applications in a manner that can improve
    our health, facilitate better research, and ultimately help our
    economy. I believe the goals and priorities for the NNI established in
    H.R. 766 will be an important aspect of this process.
        I want to welcome all of the witnesses here today, and in
    particular thank our colleagues from across the street, Senator George
    Allen and Senator Ron Wyden, for taking the time to present testimony
    to the Committee. I look forward to a productive discussion.

        [The prepared statement of Mr. Matheson follows:]

               Prepared Statement of Representative Jim Matheson

        Nanotechnology presents incredible opportunities, not just for pure
    science, but for a host of interdisciplinary areas. The wide range of
    potential applications of this research is one of the best reasons why
    we, as a nation, should commit to long-term support of nanotechnology.
    Many of the most exciting ideas are still years from completion and
    even the current success stories are products of long-term research,
    study, and dedication.
        It is also important to realize that, due to the expense of
    establishing top-level research infrastructure, facility sharing must
    also be a priority. We have an opportunity to promote relevant, needed
    research and every effort should be made to best utilize limited
    resources. I look to the national laboratories at Sandia National
    Laboratories, Oak Ridge National Laboratory, and at other sites to
    avail themselves of the scientific talent within this nation.
        Finally, there exists a tremendous opportunity for today's research
    commitment to become tomorrow's commercial success. We need
    partnerships between federally funded research facilities and private
    industry in order to generate the ideas that will drive business in the
    future. I thank the Committee for its interest in this area of science
    and look forward to contributing to the national discourse on
    nanotechnology.

                                    Panel I

        Chairman Boehlert. Thank you very much. And it is a
    distinct pleasure to welcome two partners and former colleagues
    on the House side, who have made a mark for themselves in the
    Senate, who are real leaders in the nano field: Senator Ron
    Wyden of Oregon, and Senator George Allen of Virginia.
    Gentlemen, the floor is yours. Start with Senator Wyden. Turn
    it on.

    STATEMENT OF SENATOR RON WYDEN, DEMOCRAT OF THE STATE OF OREGON

        Senator Wyden. There we are. Well, let me say first how
    much I appreciate being here. My old seat mate for 15 years in
    the House, Congressman Hall, and I go so far back. And the
    Chairman is absolutely right. We have teamed up on one success
    after another, most recently, the cybersecurity legislation.
    And I think I would like to put my whole statement into the
    record with your lead, Mr. Chairman, and just make----
        Chairman Boehlert. Without objection.
        Senator Wyden [continuing]. A few comments this morning.
    Senator Allen and I have teamed up on this legislation now for
    several years. And I think our message is really fairly
    straightforward, and that is that we just think it is time for
    Congress to think big about the small sciences. I mean, there
    is extraordinary potential here. I am of the view that--and I
    think it was best stated by one recent expert at a conference,
    this is going to lead to a complete reversal in the way in
    which man has produced things since the dawn of time. We
    essentially always looked big and then tried to figure out how
    to go from there.
        What we are talking about with nanotechnology is
    essentially reversing that and going from the bottoms up and
    revolving around the small structures that are atom and
    molecular size. And I think the potential in the area Ralph
    Hall and I have shared an interest in for years in issues like
    healthcare is just extraordinary. I mean, I see these
    structures and these appliances, for example, bulldozing their
    way through cancers and serious tumors and other kinds of
    health problems the American people will have. And I think we
    are going to hear more about those kinds of applications in the
    days ahead.
        I want to take just a second and talk about how Senator
    Allen and I spent the previous two years, because I think there
    is a lot of interest in what we are trying to do differently
    here with nanotechnology. We have seen over a time a variety of
    interesting ideas come along. People get excited about them
    from time to time. Government converges and spends a bunch of
    money and sets up a variety of programs, and very often at the
    end, people say, ``Well, this is--was sort of a textbook case
    of how you probably should have stepped back and been a bit
    more thoughtful.''
        What Senator Allen and I did is we essentially said when we
    heard about the promise of this new science, the first thing we
    are going to do is go out and talk to the private sector about
    their ideas and their initiatives. And what we found is to a
    person, they all thought that what the Administration was doing
    was constructive, that their initiative, the one that has been
    carried by executive branches, clearly, a step in the right
    direction and one we ought to support. But their message also
    to a person was: here is a chance to build on what the
    Administration is doing in some very key kinds of areas.
        If you look at our legislation, for example, with respect
    to the ethical concerns, that is a new development. We try to
    consolidate what government is doing right now. Some of the
    nanotechnology efforts are essentially strewn across the
    Federal Government. They are in a variety of different places.
    We think we can do a better job of coordinating those efforts.
    And I think we have tried to say, in issues particularly
    relating to PCAST, that it would be very helpful to have some
    people who are expert just on nanotechnology so that we could
    have some people who would zero in on those initiatives. But it
    is fair to say that Senator Allen and I are very supportive of
    what the Administration is doing. I note of the case in this
    committee on a bipartisan basis, we just think that we can be
    bolder and more aggressive, and we ought to pursue those kinds
    of efforts. So I think we really have set our--a path here that
    can show that we have learned from the past and we are not
    likely, in nanotechnology, to see a few years hence the people
    say, ``Well, there was something promising. The government
    threw a bunch of money at it. It really didn't work,'' and
    people have regrets.
        The last point that I would make, Mr. Chairman, is that
    given what is going on around the world, this is not a time for
    us to miss opportunities. This is a time for us to mine the
    opportunities, because clearly Europe and other parts of the
    world are blasting ahead very aggressively, and we ought to
    make similar kinds of efforts.
        Let me at this point, if I could, yield to my good friend
    and colleague, Senator Allen. I was the Chair of the
    Subcommittee last time, so I introduced the legislation. He and
    I have teamed up on this at every single step of the way, just
    as you and I have. There is absolutely nothing partisan about
    this particular issue. And my friend, Senator Allen, because of
    Virginia's interest in technology very much parallels Oregon's
    interests in technology, he and I have been partners on all of
    these issues, and I am grateful to have a chance to----
        Chairman Boehlert. Well, I just want to thank you, Senator
    Wyden, and you, Senator Allen, for the leadership you are
    providing day after day, year after year. This is a very
    important area, and I like your phrase, ``Let's think big about
    small science.'' Senator Allen.
        [The prepared statement of Senator Wyden follows:]

                    Prepared Statement of Senator Ron Wyden

        In the 107th Congress, as Chair of the Senate Commerce Subcommittee
    on Science, Technology & Space, I introduced, along with my good friend
    here, Senator Allen, the Wyden-Allen 21st Century Nanotechnology
    Research and Development Act. That bill, with its strong bipartisan
    support, was unanimously passed out of the Commerce Committee.
        This Congress, the Wyden-Allen 21st Century Nanotechnology Research
    and Development Act is back with strong bipartisan support. Senator
    McCain has assured me that we will have a hearing in the Senate on
    nanotechnology and we are determined to pass the bill out of Committee
    and this time bring the bill to the floor for a vote. I am confident
    that in this Congress, with the Senate bill and with Chairman
    Boehlert's leadership on the House bill, the President will sign into
    law a strong federal policy that will guarantee that the United States
    will not miss, but will mine the opportunities of nanotechnology.
        Right now, the National Nanotechnology Initiative (NNI) is
    organized under the White House National Science and Technology
    Council. In effect, it exists at the whim of this and future
    Administrations. Efforts in the nanotechnology field are strewn across
    a half-dozen federal agencies. With the Wyden-Allen legislation and the
    House bill, and a strong partnership between the two chambers, America
    can marshal its various nanotechnology efforts into one driving force
    to remain the world's leader in this burgeoning field.
        The global nanotechnology race has so many implications for this
    country that it's hard to know where to begin. If I had to summarize--
    and I bet you'd like me to do that instead of speaking for 90 minutes--
    I would say the global nanotechnology race matters for America on three
    distinct levels. It is rapidly becoming an economic issue and a
    geopolitical issue. Eventually, every American may have a personal
    stake in nanotechnology as well.
        If science on the molecular scale is incomprehensible to some
    folks, pretty much all of us can understand money. There is a lot of
    money coming in nanotechnology. In the next decade or so the global
    nanotechnology market should be worth about $1 trillion.
        It will be worth that because of the awesome products
    nanotechnology will yield. Imagine how a material 100 times stronger
    than steel at one-sixth the weight could revolutionize the building
    industry. Americans are already buying stain-resistant pants and
    scratch-resistant eyeglasses. The world will line up for smart drugs to
    treat cancers, cheap flat-screen TVs the size of living room walls, and
    self-repairing concrete highways.
        From a purely economic standpoint, America can't afford to miss the
    nanotechnology revolution. The potential not just for direct revenue,
    but also for jobs and the growth of related industries, is too huge.
        Nanotechnology's significance extends beyond America's bankbook,
    though. If private industry and the Federal Government fail to provide
    organized, goal-oriented support now, this nation could fall behind
    others who recognize nanotech's potential.
        Major programs are underway in the EU, China, Japan, Taiwan and
    across East Asia. Just this month Shimon Peres called on the Knesset
    for a quote, ``superhuman effort'' to put Israel at the forefront of
    nanotechnology. U.S. spending on nanotechnology is just about 25
    percent of the world's total. Worldwide spending may reach $2 billion
    this year.
        America has to keep up not only financially, and scientifically;
    America must also educate a competitive new generation of science
    experts to move this field forward. In this respect, our nation may be
    seriously unprepared.
        American school children learn considerably less math and science
    that their counterparts abroad. A significant percentage of this
    country's math and science graduate students come from other countries
    and return there after graduation. American nanotechnology and other
    disciplines are facing a terrible shortage of human resources.
        The U.S. has a deep well of untapped potential in women, who are
    terribly under-represented in the math and science fields. Last year I
    started a push to end the disenfranchisement of women in the hard
    sciences. These efforts need to bear fruit. The National Science
    Foundation estimates that over the next decade, America will need
    800,000 to 1 million nanotechnology workers. The time to start
    encouraging those folks is now.
        An investment in nanotechnology education now could beget major
    advances for every American school child. That's just the beginning of
    the personal impacts of nanotech.
        I've said before that this field has the potential to change
    America on a scale equal to, if not greater than, the computer
    revolution. Nanotechnology experts predict that research could lead to
    $20 hand-held computers. That sounds great for all of us techies here.
        But imagine the impact on America's rural and inner-city schools if
    every school could afford a computer for every child. The digital
    divide would close. Think about the enormity of that statement. All the
    kids who don't have much of a chance now could have the tools to learn
    and compete alongside the kids who've always had options.
        Nanotechnology will eventually be a matter of life and death. When
    revolutionary medicines are able to target cancers and kill them with
    little or no damage to surrounding tissue--well, I bet all of us can
    think of someone who might be alive today with that technology.
        So the personal implications range from getting a better shot in
    life to literally living longer. If that doesn't convince people that
    America needs to commit to nanotechnology, I don't know what will.
        The Wyden-Allen 21st Century Nanotechnology Research and
    Development Act provides a smart, accelerated, and organized approach
    to nanotechnology research, development, and education. In my view,
    there are three major steps America must take to ensure the highest
    success for its nanotechnology efforts. My legislation puts us on the
    path to take these steps.
        First, a National Nanotechnology Research Program should be
    established to superintend long-term fundamental nanoscience and
    engineering research. The program's goals will be to ensure America's
    leadership and economic competitiveness in nanotechnology, and to make
    sure ethical and social concerns are taken into account alongside the
    development of this discipline.
        Second, the Federal Government should support nanoscience through a
    program of research grants, and also through the establishment of
    nanotechnology research centers, including State-supported centers.
    These centers would serve as key components of a national research
    infrastructure, bringing together experts from the various disciplines
    that must intersect for nanoscale projects to succeed. As these
    research efforts take shape, educational opportunities will be the key
    to their long-term success. This bill guarantees a commitment to
    helping students who would enter the field of nanotechnology. This
    discipline requires multiple areas of expertise. Students with the
    drive and the talent to tackle physics, chemistry, and the material
    sciences simultaneously deserve all the support we can offer.
        Third, the government should create connections across its agencies
    to aid in the meshing of various nanotechnology efforts. These could
    include a national steering office, and a Presidential Nanotechnology
    Advisory Committee, modeled on the President's Information Technology
    Advisory Committee. This committee would be composed of experts with
    intimate knowledge of the nanotechnology field. The joke these days in
    the world of science is that everyone is doing nano work. Just as the
    '90s saw everyone putting ``dot com'' after titles, today, everyone is
    putting ``nano'' before their sciences. We must ensure that the
    Presidential Nanotechnology Advisory Committee is not composed of
    ``nano-come-latelys,'' but is instead composed of leaders in the field
    who will best guide us in our efforts to nurture and develop the
    strongest possible applications of nano research funding.
        I also believe that as these organizational support structures are
    put into place, rigorous evaluation must take place to ensure the
    maximum efficiency of our efforts. Personally, I would call for an
    annual review of America's nanotechnology efforts from the experts--the
    Presidential Nanotechnology Advisory Committee--and a periodic review
    from the National Academy of Sciences. In addition to monitoring our
    own progress, the U.S. should keep abreast of the world's
    nanotechnology efforts through a series of benchmarking studies.
        In my view, the U.S. is poised to maximize nanotechnology's
    economic potential, its political potential, and its personal potential
    for every American. I believe that decisive support from the government
    and a strong partnership between Senate and House proponents of this
    science are absolutely essential to grow this field. I encourage the
    passage of the House legislation as well as the Wyden-Allen Act in the
    Senate.

     STATEMENT OF SENATOR GEORGE ALLEN, REPUBLICAN OF THE STATE OF
                                VIRGINIA

        Senator Allen. Thank you, Mr. Chairman. And I thank you and
    all of the Members of this committee, this wonderful Committee
    on Science, for calling today's hearing. I was--as Senator
    Wyden, I was listening to him, and I agree with everything he
    said. And I love this quote from Proverbs you have here:
    ``Where there is no vision, the people perish.'' It reminds--
    and then you have here, ``They see the vision of the future of
    a world and all the wonders that could be.'' It reminds me of
    the view of observations of America in the early 1800's that
    the only things that haven't been done are those that have yet
    to be imagined. And that is what we are talking about here,
    that same spirit.
        And Mr. Chairman, I will have my remarks put into the
    record, if I could, as well----
        Chairman Boehlert. Without objection, so ordered.
        Senator Allen [continuing]. Hopefully as excellent as those
    of Congressman Hall's record. However, I do want to commend you
    for your leadership on this, visionary leadership, as well as
    that of Congressman Honda and Ehlers and others on these
    matters. We have worked together on cybersecurity, homeland
    security, a variety of issues. What Senator Wyden, who is my
    teammate on the Senate side on these issues, what we want to do
    is take the best of our ideas, of the ideas here on the House,
    improve the bills that we have introduced, make sure there is
    complete symmetry and synergy there so that we take the best
    ideas as we move forward in nanotechnology.
        As you said and Senator Wyden said, there is so much
    potential here. We recognize it. Sadly, I would say, no more
    than five percent of Senators and House Members understand what
    nanoscience is, nanotechnology. It is something that all
    Members need to be more conversant upon, but leadership is
    needed. We need to, as elected leaders, and the government
    ensure that the right conditions precedent are there for those
    who are researching whether in the private sector, state
    sponsored, colleges, universities, the institutes, variety of
    institutes, federal institutes, all are working together that
    there is that sort of domestic and international efforts to the
    extent we can to contribute to these results.
        Now our nation, from the very beginning, has always been on
    the forefront of technological or industrial revolutions. That
    needs to be the same in nanoscience. My friend, Senator Wyden,
    and I introduced Senate Bill 189, The 21st Century
    Nanotechnology Research and Development Act. It is very similar
    to yours. Before this is all through, they will be identical.
        It is, for example, to get with the great work that is
    going on right now with the National Institutes of Health where
    there is great promising potential for precise medical
    treatments and therapies and bioscience technologies that are
    exciting and really life-saving in many regards. And we know
    those stories about--you get the nanochip that gets to the
    exact cancer cell as opposed to right now you get these shotgun
    blasts killing all sorts of cells, weakening the body, with
    nanoscience, you can get right to the cells that need to be
    destroyed, the cancerous cells. So that is exciting. That is
    promising for a better quality of life. Ours is a strategic
    goal, as is yours, to get everyone to work together.
        Now I am one, Mr. Chairman and Members of the Committee,
    that is competitive. And the United States needs to be ready to
    compete and succeed in this area of nanoscience. I feel that we
    are falling behind. Japan, Korea, China, the European Union all
    are really, I believe, ahead of us right now as far as research
    and development in the applications of nanoscience. It is
    important for healthcare, for communications, for commerce, for
    manufacturing, for aeronautics, and indeed for our national
    security that the United States is a leader in this
    nanotechnology or nanoscience revolution.
        There are, as was said by others, great opportunities in a
    variety of areas. One other example, right now for the
    archives, the National Archives and all of the volumes in the
    Library of Congress, it takes up rooms of storage space, you
    know, for the processors. With nanoscience, all of that can be
    put into a processing chip, so to speak, the size of a sugar
    cube. That is the promise as far as technology is concerned.
        And we are proud that our states, my state of Virginia,
    Oregon, California, New York, Texas, Pennsylvania are proud of
    their efforts. We need to be at the forefront working there.
    The United States Government has an important role to play. It
    is important for our security, for our health, and for our
    future. And I really am excited and invigorated by the
    opportunity to work with you, Mr. Chairman and Members of this
    esteemed committee, to make sure that the United States is in
    the lead in improving the lives of Americans and also our
    security.
        [The prepared statement of Senator Allen follows:]

                   Prepared Statement of Senator George Allen

        Chairman Boehlert (Sherwood Boehlert, R-NY), Ranking Member Hall
    (Ralph Hall, D-TX) and Members of the Science Committee, thank you for
    calling today's hearing and for allowing me the opportunity to testify.
        Your visionary leadership on science and technology issues is a
    model for the members of this committee and the House of
    Representatives. I enjoy working with you as a teammate advocating and
    championing these initiatives in the Senate.
        Speaking of teammates, last September, Senator Wyden and I held the
    first Congressional hearing on the topic of Nanotechnology. We posed
    similar questions to those before your Committee today.
        As many of you know, Nanotechnology is still in its infancy and as
    this field matures it will undoubtedly have a substantial positive
    impact on our daily lives.
        America has historically valued and encouraged innovation and
    entrepreneurship in virtually every emerging industry and
    nanotechnology should be no different.
        Our role as elected leaders should be to create the conditions and
    precedent to position our researchers and innovators to compete,
    contribute and succeed both domestically and internationally.
        Our nation has been at the forefront of almost every important and
    transformative technology since the Industrial Revolution, and we must
    continue to lead the world in the Nanotechnology revolution. That is
    why, working with Senator Wyden, we introduced S. 189, the 21st Century
    Nanotechnology Research & Development Act.
        Similar to legislation before this committee (H.R. 766 introduced
    by Chairman Boehlert) and in response to many of the recommendations
    from the National Academy Sciences; our legislation looks to provide an
    organized and collaborative approach to nanotechnology research and
    commercial economic development.
        S. 189 capitalizes on the fantastic work already taking place at
    the National Nanotechnology Initiative (within the National Science
    Foundation), and will build on existing interagency coordination with
    the 10 federal agencies already working on nanotechnology. For example,
    within the National Institutes of Health there is the potential for
    promising and precise medical treatment therapies and bioscience
    technologies that are exciting and life saving.
        Our bill also looks to support the interdisciplinary nature of
    nanotechnology; cutting across multiple disciplines such as:
    information technology, chemistry, biology, mechanical & electrical
    engineering, physics, and manufacturing.
        Our strategic goal is logical and clear--we want to leverage the
    government, academic and corporate research capabilities and assets
    this country has available to compete and succeed worldwide. Ground-
    breaking nanotech projects today will mean substantial regional and
    national job growth in the future.
        Unlike previous advances and developments in the technology
    industry, nanotechnology is not dominated by the United States. The
    NanoBusiness estimates the U.S. is being out paced in some areas of
    nano-development by foreign competitors from Japan, China, Korea,
    Russia and the European Union.
        As production and innovation of nanotechnologies become faster,
    cheaper and more efficient, every market sector in the economy will
    begin to feel its impact creating an extraordinary opportunity to
    promote and attract more jobs and economic growth.
        From computing power where memory and processing chips the size of
    a sugar cube will have the ability to store all the information in our
    nation's National Archives and the Library of Congress combined; to
    agriculture and energy efficiencies; health care therapies, and our
    Homeland security and national defenses; nanotechnology will be the
    platform that generates many of the advances and discoveries in the
    decades to come.
        State-led and regional economic clusters are developing around the
    nanotech industry to attract nano focused companies--New York, Texas,
    Oregon, California, Massachusetts, Pennsylvania and I am particularly
    proud of the efforts by the Commonwealth of Virginia.
        The Initiative on Nanotechnology in Virginia has created a
    collaborative environment for universities like Virginia Tech and UVA
    to work with private sector companies like Luna Innovations and Nano
    Sonic, Inc.
        In summary, Mr. Chairman, I strongly believe the Federal Government
    has an important role to play to ensure the United States leads the
    world in nanotechnology. It will be a world competition to reap the
    rewards and benefits of this revolutionary industry. The potential
    economic and societal benefits are far too great to be overlooked. As
    our scientist and researchers adventure boldly into this New Frontier
    of Nanoscience and chart new paths in lands not yet discovered, good
    public policy will need to be in place to serve as a catalyst to the
    diverse, nascent nanotechnology community.
        I commend this committee's efforts and focus on this important
    issue. The work being done in the nanoscience field is invigorating;
    it's exciting, and it's important for our future economy and millions
    of jobs.

                                   Discussion

        Chairman Boehlert. Thank you very much for that eloquent
    testimony, Senator Allen. And you two are living examples of
    how we do things right more often than not in this town:
    bipartisan, seizing an opportunity, providing leadership,
    working across the Capitol. We are going to move forward with
    this legislation, thanks to your leadership, and we will try to
    contribute the maximum from this side. Thank you both very
    much.
        Senator Wyden. Mr. Chairman, if I could, one last point
    from the Senate side, Chairman McCain on the Senate Commerce
    Committee has told Senator Allen and I that he is going to put
    this bill on the fast track as well. Our plan in the Commerce
    Committee is to have a quick hearing move ahead, so Chairman
    McCain has indicated that he shares your interests and wants to
    move this quickly.
        Chairman Boehlert. He is excited about it. There are a lot
    of people, the more they know about it----
        Senator Wyden. Right.
        Chairman Boehlert [continuing]. You know, the zeal and
    commitment you demonstrate, you can excite anybody about this.
    And that is great. Keep it up. Thank you. Any questions?
        Mr. Hall. I--just one. Normally, we seek support and as
    this grows and they find out about it, you are going to have to
    make decisions of whether or not you want to share this
    support. Mr. Chairman, Congressman Honda, who along with you
    has introduced this and ten others, was not here when I had the
    opening statement, so I was going to yield 10, 20, or 30
    seconds or five minutes to him. Could I yield the balance of my
    time to him to make whatever statement he wants to make?
        Chairman Boehlert. I--by all means. Mr. Honda.
        Mr. Honda. Thank you, Mr. Chairman. I really--I am excited,
    and I share your enthusiasm. And when you say we talk about the
    scale of nanotechnology, the scope of it is so immense and it
    could be so ubiquitous and really extend what they call Moore's
    Law another 30 or 50 years, which will really not--do nothing
    but enhance our technology and enhance our economy. And I guess
    one of the concerns I would have is that we sustain this effort
    and sustain this enthusiasm by both bodies so that the
    Administration will continue to support the NNI at a level that
    it needs to so that we can move this whole movement forward.
    And I certainly am as excited as you are when I think of all of
    the potential and possibilities not only for technology, but
    also for biomedical advances. So I think that the reason why we
    need groups like advisory groups for PCAST so that we can
    anticipate a lot of the issues now so that it doesn't become a
    barrier in the future and that we can move forward in the most
    expeditious way.
        Thank you, Mr. Chair, for this opportunity.
        Chairman Boehlert. Thank you very much, Mr. Honda. And I
    want to thank both of my colleagues for coming across the
    center of this Capitol complex. It is always a pleasure to see
    you and continue your good work.
        Senator Wyden. Good point. And thank you.
        Chairman Boehlert. A second panel to our aide consists of
    an alum of this very distinguished Committee: Mr. Richard
    Russell, Associate Director for Technology, Office of Science
    and Technology Policy; Dr. Thomas Theis, Director of Physical
    Sciences, IBM Research Division, Thomas J. Watson Research
    Center; Dr. Carl Batt, and I have the privilege of representing
    Dr. Batt, Co-Director of the Nanobiotechnology Center at
    Cornell University; Mr. Alan Marty, one of the great job titles
    in America, Executive-in-Residence, JP Morgan Partners. And for
    the purpose of an introduction, the Chair recognizes Mr. Davis.
        Mr. Davis. Thank you, Mr. Chairman. It is certainly good to
    have on the panel today someone who works at Oak Ridge. Many of
    the people who live in the district I represent perform work
    and duties there as well. Dr. James Roberto is the Associate
    Laboratory Director for the Physical Sciences at Oak Ridge
    National Lab. He is responsible for ORNL's research portfolio
    and materials science, condensed matter physics, chemical and
    nuclear physics. He has been a distinguished member of the Oak
    Ridge community since 1974 and has served on three national
    research committees. He currently is a fellow of the American
    Association for the Advancement of Science. I welcome him, and
    I certainly look forward to him enlightening this committee on
    many of the activities going on there at Oak Ridge. Welcome,
    Dr. Roberto.
        Chairman Boehlert. Thank you very much. And gentlemen, your
    statements will appear in the record in their entirety. We
    would ask that you try to summarize in five minutes or so. The
    Chair will not be arbitrary, but we do want to give an
    opportunity for questions.
        Mr. Russell, you know the drill. You are up first.

                                    Panel II

      STATEMENT OF MR. RICHARD M. RUSSELL, ASSOCIATE DIRECTOR FOR
          TECHNOLOGY, OFFICE OF SCIENCE AND TECHNOLOGY POLICY

        Mr. Russell. Thank you, Mr. Chairman. And let me thank you
    for your warm welcome. And it truly is an honor and a pleasure
    to be able to come back to this committee and speak before you
    today, especially on an issue where I think we all share the
    same goals. It is one of great importance to everyone. It is an
    issue that the Administration has spent a lot of time, energy,
    and money on. It is an issue that I know this committee is
    committed to seeing move forward in an aggressive fashion, and
    we really look forward to working with you and the rest of the
    Committee in making nanotechnology and the future of
    nanotechnology as strong as possible. So I appreciate the
    opportunity and appreciate the warm welcome and look forward to
    working with you on this. This is one of the issues that really
    makes my job worthwhile.
        The Administration shares this committee's belief in the
    importance of federal support for nanotechnology R&D and the
    coordination of federal research efforts.
        Nanotechnology is more than just the study of small things.
    Nanoscale research is the study of systems that exhibit
    physical and chemical properties quite different than those
    found on larger scales.
        Carbon is an excellent example. We are familiar with carbon
    in many forms, from coal to diamonds, but when a sheet of
    elemental carbon, a single atom thick, is rolled into a tube,
    it takes on totally unique and unforeseen properties. For
    example, an incredibly small shift on the scale of a single
    atom can change the properties of the tube from conducting to
    semi-conducting. This makes carbon nanotubes ideal candidates
    for microelectronic materials.
        Pushing or pulling on the tube also changes the electrical
    properties, making carbon nanotubes ideal for sensors. Other
    materials exhibit similar unexpected properties at the
    nanoscale. And I think this is really one of the most important
    points that we have to recognize when we are looking at
    nanotechnology. We are not just talking about miniaturization.
    We are talking about entirely new effects that can be seen on
    the nanoscale that we don't see elsewhere, and I think that is
    why I think this is such a vibrant area for research.
        Nanotechnology is still in a very early stage of
    development. The role for federal R&D funding is to provide the
    fundamental research underpinning upon which future nanoscale
    technologies will be based.
        Nanotechnology research is coordinated in the Federal
    Government through the National Nanotechnology Initiative, NNI.
    The NNI is an interagency program that captures relevant
    federal nanotechnology R&D. Currently, ten agencies participate
    in the program. The NNI is a critical link between high-risk,
    novel research concepts and new technologies that can be
    developed by industry. NNI provides funding for fundamental
    research at colleges and universities and at our national
    laboratories.
        NNI is creating centers of excellence that bring together
    diverse populations of scientific domains under one academic
    umbrella. It is also building a network of central, state-of-
    the-art user facilities that can be accessed by industry as
    well as academia.
        The Administration's commitment to furthering
    nanotechnology research and development has never been
    stronger. Support for NNI is evidenced by significant funding
    increases for this interagency initiative in each of the
    President's budget proposals. That trend continues this year
    with a 10 percent increase over last year's request for
    nanotechnology, bringing the program's total to $849 million in
    the President's '04 budget request.
        Nanotechnology was also highlighted as a priority research
    area in the '04 budget guidance memo issued last year to the
    heads of research agencies by Dr. Marburger and Director
    Daniels. This year, funding for NNI will support a range of
    activities, including basic research, more focused efforts
    directed at answering specific sets of questions, so-called
    ``grand challenges,'' and building research infrastructures and
    centers and networks of excellence to support nanotechnology
    research.
        NNI funding also supports mission-oriented research within
    agencies, research at national laboratories, and research at
    academic institutions, and other research institutes. A portion
    of the funding is also dedicated to addressing non-technical
    research problems in a broader context, including societal
    implications and workforce training issues.
        The research agenda for the agencies participating in the
    NNI is coordinated by the Nanoscale Science and Engineering
    Technology Subcommittee, otherwise known as NSET, of the
    National Science and Technology Council. The NSET Subcommittee
    is made up of NNI agency representatives, OSTP [Office of
    Science and Technology Policy], and OMB [Office of Management
    and Budget]. NSET members meet on a monthly basis to measure
    progress, set priorities, organize workshops, and plan for the
    coming year.
        In order to provide higher visibility for nanotechnology
    and to elevate coordination and priority setting, OSTP has
    proposed reformulating the current NSET as an interagency
    working group and reconstituting the NSET Committee at a higher
    level of agency representation.
        The National Nanotechnology Coordination Office, NNCO,
    assists NSET in their activities and serves as the secretariat
    for the NNI program. The NNCO, which is funded by contributions
    from participating agencies, carries out objectives established
    by the NSET members, coordinates and publishes information from
    workshops, and prepares annual reports on the activities of
    NNI.
        In the past, the Director of the NNCO was a part-time
    position. Recognizing the key contributions made by the NNCO to
    the success of this multi-agency effort, OSTP is in the process
    of hiring a full-time director to run the NNCO.
        The Administration appreciates the effort of the Chairman
    and the other Members of this committee to highlight the
    importance of nanotechnology through H.R. 766. We look forward
    to continuing to work with you as the bill moves through the
    legislative process.
        Mr. Chairman, the Administration shares your strong belief
    in the value of an independent external advisory panel to look
    over NNI. As such, you will be pleased to know that the
    President's Council of Advisors on Science and Technology, or
    PCAST, recently looked--took on this responsibility.
        PCAST will review the NNI on an ongoing basis and provide
    the President with recommendations to improve the program. As
    an initial step at their March 3, 2003 meeting, PCAST agreed to
    begin this review with an effort that will assist the NSTC in
    the development of crisp, compelling, and overarching strategic
    plan and defining specific ``grand challenges'' to guide the
    program.
        Mr. Chairman, if there is no objection, I would like to ask
    that the Nanotechnology Study Work Plan, as approved by PCAST,
    be included as part of the record.
        Chairman Boehlert. Without objection, so ordered.
        [The information referred to appears in Appendix 2:
    Additional Material for the Record.]
        Mr. Russell. And let me--I see that my five minutes are up,
    so let me quickly summarize the rest. Essentially, there are a
    few small issues that I know we can work with you and the
    Committee's staff on this bill, so I look forward to getting
    started with that. And I am open to questions on this wonderful
    set of technological challenges that we face.
        [The prepared statement of Mr. Russell follows:]

                    Prepared Statement of Richard M. Russell

        Mr. Chairman and Members of the Committee, thank you for this
    opportunity to appear before you today to present the Administration's
    plans for the National Nanotechnology Initiative (NNI) and the
    Administration's views on H.R. 766, the Nanotechnology Research and
    Development Act of 2003.
        The Administration shares this committee's belief in the importance
    of federal support for nanotechnology R&D and coordination of the
    research efforts that are funded. In many ways, I am preaching to the
    choir and vice versa. Our differences are minor and are mostly
    reflected in the slightly different paths we use to reach our goals.
        Nanotechnology is the ability to engineer at atomic, molecular or
    supramolecular levels in the length scale of approximately 1 to 100
    nanometers--about a thousandth of a millionth of a meter. To provide
    some perspective, this is approximately 1/100,000 the diameter of the
    average human hair. Nanoscale science and engineering are not just
    additional steps towards miniaturization. Nanoscale systems exhibit
    physical and chemical properties quite different from those found at
    the micro- and macro-scale. Take carbon, for example. We are familiar
    with carbon in many forms-coal, diamond, etc. But when a sheet of
    elemental carbon, a single atom thick, is rolled into a tube, this form
    of carbon takes on totally unique and unforeseen properties. For
    example, an incredibly small shift--on the length scale of a single
    atom--changes the properties of the tube from conducting to
    semiconducting, making carbon nanotubes (CNTs) an ideal candidate for a
    microelectronic material. Pushing or pulling on the tube also changes
    the electrical properties, making CNTs ideal candidates for sensors.
    Other materials exhibit similarly unexpected properties at the
    nanoscale.
        Commercialization of nanotechnology is expected to lead to new
    products and applications in materials and manufacturing, electronics,
    medicine and health care, environment, energy, chemicals,
    biotechnology, agriculture, information technology, transportation,
    national security, and other areas. Nanotechnology will likely have a
    broad and fundamental impact on many sectors of the economy.
        New nanotechnology innovations are being made on a regular basis.
    Just this week it was announced that researchers at the University of
    Michigan are using nanoprobes to image chemical activity inside living
    cells. The 20 nm diameter nanoprobes are small enough to fit inside a
    cell without affecting the cell's normal functions. Sensor molecules
    inside the nanoprobes emit light when select ions bind to the sensor.
    This information will help scientists unravel the complicated metabolic
    processes in living cells.
        Scientists from Rice University have attached amino groups to
    single-walled carbon nanotubes. These amino groups can be used to bond
    the nanotubes to other polymers, or to form a `fabric' of nanotubes.
    This is a crucial step towards manufacturing a new generation of
    materials that are stronger, lighter, and potentially self-sensing.
        Nanotechnology is still at a very early stage of development. The
    role of federal R&D funding in this area is to provide the fundamental
    research underpinnings upon which future nanoscale technologies will be
    based. Numerous challenges must be addressed before the envisioned
    promise of these technologies can be reached. Overcoming these
    challenges will require fundamental research to improve our basic
    understanding in several fields of science and engineering, as well as
    novel approaches toward synthesis, analysis and manufacturing of
    nanotechnology-based products. We face a very real challenge developing
    new instruments that enable accurate, nanoscale-level measurement and
    manipulation.
        These challenges also present opportunities:

             the opportunity to engage in interdisciplinary work,
            between agencies, that bridge traditional delineations between
            disciplines;

             the opportunity to reinvigorate chemistry and
            physics, bringing these disciplines into the mechanistic length
            scales that underlie the unique properties of nanoscale objects
            and, not coincidentally, the functioning of biological systems;
            and

             opportunities to develop new engineering systems and
            instrumentation that can be used to manipulate and measure
            properties of nanoscale structures, including biological
            systems that were, just a short time ago, beyond our means.

        As such, nanotechnology is creating a natural domain of
    interdisciplinary interactions. It is igniting a review of college
    curricula and creating new educational paradigms. This administration
    is encouraging these activities through the existing structure of the
    NNI.
        Because of the complexity, cost, and high risk associated with
    nanotechnology research, the private sector is often unable to assure
    itself of short-to-medium term returns on R&D investments in this
    field. Consequently, industry is not likely to undertake the basic
    research investments necessary to overcome the technical barriers that
    currently exist. The NNI is a critical link between high-risk, novel
    research concepts and new technologies that can be developed by
    industry. This is accomplished by providing funding for fundamental
    research at colleges and universities as well as at our National
    laboratories, by creating centers of excellence that bring together
    diverse populations of scientific domains under one academic umbrella,
    and by building a network of central user facilities that enable
    access, by industry as well as academia, to state-of-the-art nanoscale
    fabrication and analysis facilities. Funding programs are structured to
    overcome barriers, in both knowledge and facilities, so that America's
    industries will prosper from our investment in nanotechnology.
        The Administration's commitment to furthering nanotechnology
    research and development has never been stronger. Support for the NNI
    is evidenced by significant funding increases for this interagency
    initiative in each of President Bush's proposed budgets. That trend
    continues this year, with a ten percent increase over last year's
    request for nanotechnology (to $849 million) in the President's FY 2004
    budget. In addition, last year the Director of the Office of Management
    and Budget and OSTP Director Marburger issued a memo to the heads of
    executive departments and agencies identifying nanoscale science and
    technology as one of six interagency research and development
    priorities.

    The National Nanotechnology Initiative

        Federal funding for Nanotechnology is coordinated through the NNI.
    The NNI is an interagency program that encompasses relevant
    nanotechnology R&D among the participating federal agencies. The
    federal agencies currently performing nanotechnology research
    coordinated through the NNI are:

             National Science Foundation

             Department of Defense;

             Department of Energy;

             National Institutes of Health;

             Department of Commerce;

             National Aeronautics and Space Administration;

             Department of Agriculture;

             Environmental Protection Agency;

             Department of Homeland Security; and

             Department of Justice.

        Funding for the NNI provides support for a range of activities,
    which include: basic research, focused efforts directed at answering
    specific sets of questions of high significance--so-called ``Grand
    Challenges,'' and building research infrastructure (instrumentation,
    equipment, facilities) and centers and networks of excellence (larger,
    centralized facilities intended to provide sites for cooperative and
    collaborative efforts among distributed networks and groups of
    researchers at multiple affiliated institutions). Depending on the
    agency, funding supports mission-oriented research within agencies,
    research at national laboratories, and research at academic
    institutions and other research institutes. A portion of the funding is
    also dedicated to addressing non-technical research problems in a
    broader context, including societal implications and workforce and
    training issues.
        The research agenda for the ten agencies currently participating in
    the NNI is coordinated by the Nanoscale Science and Engineering
    Technology (NSET) Subcommittee of the National Science and Technology
    Council (NSTC). As you know, the NSTC is a cabinet-level interagency
    body through which interagency science and technology issues are
    discussed and coordinated. The NSET subcommittee is staffed by
    representatives of the participating agencies, OSTP, and OMB. It also
    includes other federal agencies that do not fund nanotechnology R&D but
    nevertheless have an interest in these technologies--agencies such as
    the Food and Drug Administration and the Department of the Treasury.
    NSET members meet on a monthly basis to measure progress, set
    priorities, organize workshops, and plan for the coming year.
        The current membership of the NSET reflects its origins as an
    informal working group organized and populated by program officers and
    researchers within agencies performing or funding nanotechnology R&D.
    As such, the agency representatives to the NSET have extensive
    knowledge of and experience with nanoscale R&D. This expertise has been
    of critical importance to the success of the initiative, providing a
    necessary link to nanotechnology researchers in industry and academia.
    However, recognizing that the NNI will increasingly confront policy
    issues central to its continued success, OSTP has proposed a
    restructuring of the interagency nanotechnology effort within the NSTC.
    Under the proposed structure, which was approved by the NSTC's
    Committee on Technology--to which the current NSET reports--late last
    year, the current NSET would be reformulated as an interagency working
    group. In turn, the subcommittee would be reconstituted with membership
    comprising of higher level agency officials. This new management
    structure will enable enhanced coordination and priority setting.
        The National Nanotechnology Coordination Office (NNCO) assists
    NSET-participating agencies in their activities, and serves as the
    secretariat for the NNI. The NNCO, which is funded by contributions
    from the participating agencies, carries out the objectives established
    by the NSET members, coordinates and publishes information from
    workshops sponsored by the NNI, and prepares annual reports on the
    activities of the NNI. The NNCO also contracts for program reviews to
    provide feedback on the NNI. It has an annual budget of approximately
    $1 million. In the past, the Director of the NNCO was a part-time
    position. Recognizing the key contribution made by the NNCO to the
    success of a multi-agency effort of the complexity of the NNI, OSTP is
    in the process of hiring a full-time director to run the NNCO.

    The Nanotechnology Research and Development Act of 2003

        The Administration appreciates the efforts of the Chairman and
    other members of this committee and others to highlight the importance
    of nanotechnology science--and to address certain issues through H.R.
    766, the Nanotechnology Research and Development Act of 2003. We look
    forward to working with you as the bill moves through the process as
    our staffs have already begun to discuss some of the key provisions.
        In the summer of 2002, the National Research Council (NRC) released
    the results of their study of the NNI in a report entitled Small
    Wonders, Endless Frontiers: A Review of the National Nanotechnology
    Initiative. The report highlighted the strong leadership of the NNI,
    praised the degree of interagency collaboration, and lauded the early
    successes of the research programs.
        The report also provided a number of recommendations to further
    strengthen the NNI. One such recommendation was to create an
    independent Nanoscience and Nanotechnology Advisory Board to provide
    advice to the NSET on policy, strategy, management, and other issues.
    The NRC proposed that the board be composed of ``leaders from industry
    and academia with scientific, technical, social science, or research
    management credentials.'' H.R. 766, incorporates this recommendation.
        The Administration shares a strong belief in the value of
    independent external advice regarding the NNI. As such, you will be
    pleased to know that the President's Council of Advisors on Science and
    Technology (PCAST), whose members encompass the range of experience and
    backgrounds articulated by the NRC in their recommendation, recently
    took on this responsibility. PCAST will review the NNI on an ongoing
    basis and provide the President with recommendations to improve the
    program. As an initial step, at their March 3rd 2003 meeting, PCAST
    agreed to begin this review with an effort that will assist the NSTC in
    developing a crisp, compelling, overarching strategic plan, and
    defining specific ``Grand Challenges'' to guide the program.
        PCAST co-chair Floyd Kvamme will lead this effort, which will be
    undertaken at the full committee level, although separate task forces
    will form to address particular sets of issues. PCAST will accomplish
    its work in concert with the NSTC and the resident expertise within the
    agencies represented on it. In addition, in accordance with a
    suggestion from this committee, PCAST plans to tap leading researchers
    in nanotechnology to provide PCAST with technical expertise on the
    state-of-the-art in nanotechnology--forming a ``technical task force''
    that will augment PCAST's expertise.
        PCAST's role in reviewing the NNI fulfills the NRC recommendation
    to form an external advisory committee. As such, the requirement in
    Section 5 of H.R. 766, the Nanotechnology Research and Development Act
    of 2003, which mandates the creation of a presidential nanotechnology
    advisory panel, would duplicate PCAST's efforts and unnecessarily draw
    resources from the scientific goals of the program. The Administration
    believes that this provision needs to be stricken from the bill. OSTP
    will work closely with PCAST to ensure that our mutual goal is met--
    that is, ensuring that the Nation's investment in nanotechnology
    research and development realizes its full potential.
        The Administration's goals and plans for the NNI program, of which
    I have provided a brief description today, capture almost every element
    of the legislation we are discussing. The NNI is a relatively new
    program, and represents a field that is, in many ways, also quite
    young. Flexibility--to enable us to adapt the program over time and,
    for example, on the basis of recommendations from PCAST--will be key to
    the program's continued success. Of particular importance is the
    flexibility to perform studies and allocate funds as needed to address
    new research opportunities and emerging priorities. We also have some
    concerns with some of the specifics in the bill, such as the exact
    nature of the triennial review by the National Research Council, some
    of the particulars regarding the National Nanotechnology Research and
    Development program, and technical matters to ensure that the
    interagency committee required by the legislation can function
    effectively without advisory committee status. I appreciate the
    Committee's willingness to work with us to address these issues, and
    look forward to continuing to do so.
        Mr. Chairman and Members of the Committee, I hope that this
    overview has conveyed this Administration's commitment to
    nanotechnology and the NNI. OSTP is actively working with the NNCO to
    implement many of the NRC recommendations--recommendations that are
    reflected in the legislation under consideration today. We believe that
    our efforts will improve the program substantially and will enhance our
    nation's investment in nanotechnology.

                        Biography for Richard M. Russell

        Richard M. Russell, Associate Director with the Office of Science
    and Technology Policy in the Executive Office of the President, was
    confirmed by the U.S. Senate in August 2002. As Associate Director he
    serves as OSTP Director Dr. John Marburger's deputy for technology.
    Prior to being chosen by the President for his current position,
    Russell served as OSTP's Chief of Staff. Russell also worked on the
    Presidential Transition Teams for the Department of Commerce, National
    Science Foundation and OSTP.
        From 1995-2001, Russell worked for the House of Representatives
    Committee on Science and has a background in technology and
    environmental policy. The Committee has oversight responsibilities for
    all federal civilian research and development and authorizing
    responsibilities for most civilian science programs.
        During his time on the Committee, Russell helped draft a wide
    variety of legislation, including efforts to expand and improve
    coordination of federal information technology research, improve
    computer security, and authorize agencies such as the National
    Institute of Standards and Technology. He also was charged with
    overseeing the Committee's technology policy, coordinating its
    oversight agenda, and helping manage the Committee's majority staff.
        Russell began his tenure on the Committee as a professional staff
    member for the Subcommittee on Energy and Environment. He was promoted
    to Staff Director for the Subcommittee on Technology and finally to
    Deputy Chief of Staff for the full Science Committee.
        Prior to joining the Science Committee, Russell was a professional
    staff member of the Merchant Marine and Fisheries Subcommittee on
    Oceanography. The Oceanography Subcommittee had jurisdiction over ocean
    and environmental research and management.
        He also directed the Washington office of the Association of
    California Water Agencies (ACWA). ACWA is a non-profit association
    representing 400 public water agencies responsible for delivering 90
    percent of California's domestic and agricultural water.
        Russell began his career in Washington, D.C. as a research fellow
    for the Conservation Foundation. He also worked for Congressman Curt
    Weldon (R-Penn.) and Senator John Seymour (R-Calif.). In 1988 he earned
    a Bachelor's degree in biology from Yale University.

        Chairman Boehlert. Thank you very much. And you are right:
    there are just small differences, and we will work them out.
    Dr. Theis.

        STATEMENT OF DR. THOMAS N. THEIS, DIRECTOR OF PHYSICAL
      SCIENCES, IBM RESEARCH DIVISION, THOMAS J. WATSON RESEARCH
                                 CENTER

        Dr. Theis. Good morning, Chairman Boehlert, Ranking Member
    Hall, and Members of the Science Committee. I am the Director
    of Physical Sciences for the IBM Corporation that includes
    eight main [research] sites around the world. And I have
    responsibility for IBM's research in the physical sciences. I
    was also a member of the National Academy of Sciences review of
    the National Nanotechnology Initiative and participated in the
    drafting of their report, ``Small Wonders, Endless Frontiers.''
        Thank you for inviting me here today to discuss
    nanotechnology and H.R. 766. IBM supports increasing
    nanotechnology coordination and expertise within the Federal
    Government. We support the vision of adequate funding for
    nanotechnology research. In particular, we believe that there
    is a critical need for the Federal Government to support long-
    term research and to seek the kind of expertise in the
    scientific community that would guide this research strategy
    and funding decisions. We think that the Nanotechnology
    Research and Development Act of 2003 will be a great help in
    achieving those objectives.
        I am here to say that nanotechnology is a key to the future
    of information technology. It is the future of information
    technology hardware. History teaches us that each time we have
    improved our ability to structure matter, that it has resulted
    in enormous improvements for the status and condition of
    humanity.
        IBM is pursuing a research effort, a robust research effort
    in nanotechnology, because that research is resulting right now
    in better information technology products. The computer that
    you have in your office contains devices, transistors, the hard
    disk drive contains a read head--it contains devices that are
    structured at the atomic scale and devices in which many new
    dimensions are conveniently measured in nanometers. This is--
    information technology hardware already involves
    nanotechnology.
        Without further advances in nanotechnology, however, the
    improvements in speed, cost, energy efficiency of that hardware
    that we have come--that we have become accustomed to, must
    slow. And that means that the associated productivity gains and
    the further development of new applications, which come with
    cheaper and cheaper hardware, that must also slow.
        As Mr. Russell indicated, nanotechnology allows us to
    characterize and structure new materials with precision at the
    level of atoms. And you know, this--there are--this has a wide
    range of impacts across the entire society. One of the simple
    things is, and he has already alluded to it, carbon nanotubes
    and other nanostructure materials, hold the promise of being
    stronger and lighter than conventional materials. And we can
    all imagine the benefits of having lighter cars and lighter
    airplanes and maybe even baggage that would survive airport
    handling.
        But the point I want to make here is that strength is only
    one materials property, and designing materials with atomic
    precision allows control of all properties of materials,
    unprecedented control: electronic, magnetic, optical, thermal,
    any property that we want to enhance. And the reason this ties
    into information technology is that information technology is
    not, as Mr. Russell said, just about miniaturization. It is
    about new invention, new materials, new devices, new structures
    that are used to process, communicate, and store information.
    So nanotechnology is at the basis of further--is at the core of
    any further miniaturization that we will accomplish. And
    miniaturization has translated into faster, cheaper, more
    efficient.
        The relentless advance of information processing and
    storage technologies has provided consumers with a wide range
    of products that do more every year for less: computers, of
    course, but cameras, cell phones, entertainment systems, and
    your automobile, which has over 50 microprocessors in it, I
    believe you would agree, runs better and is more reliable than
    the one you might have purchased 10 or 15 years ago. The impact
    on our society has been enormous.
        It is not possible to say exactly what entirely new
    products and services would be supported by these continued
    advances in information technology hardware. Right now, I can
    buy a little memory card that goes in a camera or goes in my
    computer, and it can store many books, hundreds of pictures,
    and quite a bit of audio information. With the advances that we
    foresee in nanotechnology, I should be able to buy, and I
    expect to be able to buy, a card that would store all of the
    audio that I would ever want to record in my lifetime, all of
    the pictures I would want to take in my lifetime, and probably
    anything of interest and any text that I have ever read. I
    don't know exactly how we would take advantage of that, but I
    know my children are very, very creative at finding new uses of
    this technology. And I strongly suspect that they are going to
    figure out new things to do with it that I can't imagine.
        In 2002, the National Academy of Sciences did publish the
    review of the National Nanotechnology Initiative titled ``Small
    Wonders, Endless Frontiers: A Review of the National
    Nanotechnology Initiative.'' I helped write it, and on that
    basis, I would like to note a few concerns and recommendations
    of the panel on which I serve.
        First, the panel made a series of recommendations toward a
    shared goal to increase the existing interagency coordination
    and ensure long-term stability of the federal effort.
    Nanotechnology is inherently interdisciplinary. The scientific
    challenges and ultimate benefits cross a variety of agencies.
    It is very important that we ensure the maximum coordination.
    The Review Board recommendations on advisory committees,
    strategic plan setting, long-term funding, multi-agency
    investments, special funding for interagency collaboration,
    interdisciplinary culture, all of these recommendations were
    motivated by this desire to contribute to the coordination and
    the long-term stability necessary to return the maximum
    investments from this very considerable investment that the
    Federal Government is making.
        Second, the panel noted the need for expertise to identify
    and champion research opportunities that do not conveniently
    fit within any single agency's mission. That is also related to
    the issue of coordination. The panel recommended the
    establishment of an independent advisory board to provide
    advice to the Nanoscale Science Engineering and Technology, the
    existing NSET Committee. In my view, the exact reporting
    structure is not important. What we want to emphasize is the
    need to pull in expertise in nanotechnology to whatever
    advisory board or committee is set up.
        Third, the panel recommended that the societal implications
    of nanoscale science and technology become an integrated--an
    integral and vital component of the National Nanotechnology
    Initiative. The broad capabilities of future information
    technology are easy to forecast, but their implications for
    society are still very difficult to discern. And yet, society
    will choose how any given technology is used in the end. And in
    a democratic society, the basis of that choice should be public
    discourse about not only the advantages and value of the
    technology, but also the possible dislocations and problems
    that may be associated with it. So I urge the Committee to
    anticipate that there will be societal implications, not every
    one of them necessarily good and comfortable, for any rapidly
    advancing technology. We see this across the board. It is not a
    particular attribute of nanotechnology, so we need to accompany
    our research effort with efforts to anticipate and manage those
    implications. And papers that will be published on possible
    implications will lead to the kind of public discourse that I
    champion.
        Finally, the panel recommended that the National
    Nanotechnology Initiative support long-term funding in
    nanoscale science and technology so that that research can
    achieve its potential and promise. And it is really over--hard
    to overstate the importance of federal funding for basic
    research. The simple fact is IBM finds that it is very valuable
    to participate not just in the development of products, but
    also in the basic research enterprise. However, that basic
    research enterprise is so broad and so vast, there are so many
    opportunities to explore, that no company, not even a company
    the size of IBM, not even the entire information technology
    industry, is capable of exploring all of the possibilities.
        So in closing, I would like to thank the Committee for the
    invitation to testify here today. IBM believes nanotechnology
    has a big place in the future and in the future of society. We
    urge the Committee to pass legislation--this legislation that
    will assist in the coordination of the research.
        [The prepared statement of Dr. Theis follows:]

                     Prepared Statement of Thomas N. Theis

        Good morning, Chairman Boehlert, Ranking Member Hall, Members of
    the Science Committee. My name is Thomas Theis and I am the Director of
    Physical Sciences for the IBM Corporation. The IBM Research Division
    totals over 3000 people in 8 main sites around the world. I have
    responsibility for IBM's research in the physical sciences. I also was
    a member of the National Academy of Sciences review of the National
    Nanotechnology Initiative and participated in the drafting of their
    report, Small Wonders, Endless Frontiers: A Review of the National
    Nanotechnology Initiative.
        Thank you for inviting me here today to discuss nanotechnology and
    H.R. 766, Nanotechnology Research and Development Act of 2003.
        IBM supports increasing nanotechnology coordination and expertise
    within the Federal Government, and providing adequate funding for
    nanotechnology research. In particular, we believe that there is a
    critical need for the Federal Government to seek additional external
    nanotechnology expertise and input to guide its research strategy and
    funding decisions. The Nanotechnology Research and Development Act of
    2003 will assist in several of these areas.
        Nanotechnology is key to the future of information technology.
    History teaches us that each time man has extended his ability to
    structure matter, whether it be to shape an ax from rock or a
    microprocessor from silicon, the benefits are extraordinary and
    enduring. Nanotech is the next frontier. Research in nanotechnology is
    driving breakthroughs in materials and all the devices that can be
    built with new and better materials.
        IBM is pursuing a robust research effort in nanotechnology because
    that research is resulting in better information technology products.
    (The computer in your office already contains devices with some
    dimensions best measured in nanometers.) I encourage this committee to
    similarly support nanotechnology and to extend the benefits of
    nanotechnology across society to a range of industries and endeavors.
        Without further advances in nanotechnology, improvements in the
    speed, cost, and energy efficiency of IT hardware must slow. In turn,
    the economic growth of the IT industry must slow--along with the
    associated productivity gains, and the further development of new
    applications of information technology.
        Nanotechnology allows us to characterize and structure new
    materials with precision at the level of atoms, leading to materials as
    superior to existing materials as steel was to iron, and iron was to
    bronze in earlier eras. Nanostructured materials hold the promise of
    being stronger and lighter than conventional materials. This would have
    innumerable beneficial impacts from more fuel efficient and safer
    airplanes and cars, to luggage that can withstand baggage handling at
    airports! But strength is just one property. Designing materials with
    atomic precision allows unprecedented control of their electronic,
    magnetic, optical, and thermal properties--in fact, any property that
    we want to enhance.
        Raw materials constitute an enormous sector of our economy, but the
    popular imagination is captured by devices--machines that multiply the
    abilities of body and mind. The history of information technology can
    be read as a history of miniaturization--of continuous invention of
    ever smaller versions of the devices that process, store, and
    communicate information. The story of information processing goes back
    to mechanical systems such as those used to tabulate the U.S. census a
    century ago. These were replaced by electromechanical calculators based
    on relays. Vacuum tubes were used to build the first stored-program
    computers a half century ago. The transistor quickly replaced the
    vacuum tube, and in a historical eye-blink, the discrete transistor was
    displaced by the monolithic silicon integrated circuit. A similar story
    of new devices and ever-advancing miniaturization can be told for
    information storage. Through the history of information technology,
    smaller has consistently translated into faster, cheaper, and more
    power efficient, supporting the ongoing explosion of new applications
    of information technology and the growth of the entire industry.
        This relentless advance of information processing and storage
    technologies has provided consumers with a wide range of products that
    do more every year for less--computers of course, but also cameras,
    cell phones, entertainment systems, and automobiles that are better in
    every way than those of ten years ago. The impact on our society,
    economy and security has been enormous. However, scientists and
    engineers believe that we will soon reach the practical limit to
    miniaturization of devices that operate with today's materials and
    principles. At the same time, we see no fundamental laws preventing the
    processing and storage of information by new devices operating at the
    atomic scale. To prepare for this future, IBM's Research Division has
    been actively pursuing research on new nanostructured materials,
    nanoscale devices, and the processes to fabricate these materials and
    devices.
        The nano-devices being explored in laboratories around the world do
    indeed suggest that we still have a way to go on the road to Lilliput.
    Experimental silicon transistors with a critical dimension, the channel
    length, as small as six nanometers were fabricated last year. Molecular
    devices that do away with silicon are being explored for information
    storage and processing. These may not be ultimately much smaller that
    the smallest possible silicon transistors, but they may be amenable to
    fabrication by new chemical-synthetic processes that will dramatically
    reduce the cost of manufacture of complex IT systems.
        It is not possible to say exactly what entirely new products and
    services will be supported by these continued advances in IT hardware.
    Right now I can buy a tiny memory card that can hold the text of many
    books, or hundreds of pictures. With continued advances in
    nanotechnology, I expect to someday buy a memory card that can hold an
    audio recording of everything of interest that I have ever heard, the
    text of everything I have ever read, and all the pictures I have taken
    in a lifetime. My children will find new and surprising uses for all
    that information.
        Although the economy, particularly the information technology
    sector, is currently in the doldrums, make no mistake. The rapid pace
    of technology development is accelerating worldwide. Engineering teams,
    striving for a competitive edge, are taking greater risks and exploring
    a bolder range of options. Scientific discoveries that would have
    languished in the laboratory in years past are being pulled into the
    product development stream with unprecedented speed. Our country
    continues to lead the world in information technology, but maintaining
    this leadership requires continued research investments, particularly
    in the basic research that feeds this pipeline of innovation. If key
    scientific advances are made and first exploited outside the U.S.,
    growth will move off-shore.
        In 2002, the National Academy of Sciences published the results of
    a review of the National Nanotechnology Initiative titled, Small
    Wonders, Endless Frontiers: A review of the National Nanotechnology
    Initiative. I would like to note a few of the concerns and
    recommendations of the Panel.
        First, the Panel made a series of recommendations toward a shared
    goal--to increase the existing interagency coordination and ensure
    long-term stability of the federal nanotechnology effort.
    Nanotechnology is inherently interdisciplinary. The scientific
    challenges and ultimate benefits cross a variety of agencies, funding
    programs, and constituencies. Yet, in the absence of coordination,
    research decisions will be formed primarily from the perspective of a
    single agency or discipline. In the absence of coordination, an
    agency's nanotechnology strategy is unlikely to be broad in scope or
    bold in vision. The Review Board recommendations (on advisory
    committees, strategic plan setting, long-term funding, multi-agency
    investments, special funding for interagency collaboration,
    interdisciplinary culture, etc.) each can contribute to the
    coordination and stability necessary to return the maximum benefits
    from nanotechnology research.
        Second, the Panel noted the need for expertise to ``identify and
    champion research opportunities that do not conveniently fit within any
    single agency's mission.'' To this end, the Panel recommended that the
    Office of Science and Technology Policy establish an independent
    advisory board to provide advice to the multi-agency Nanoscale Science,
    Engineering and Technology (NSET) committee. In my view, the exact
    reporting structure and composition of this board are not important, as
    long as the advisory board seeks the advice from ``leaders from
    industry and academia with scientific, technical, social science, or
    research management credentials.'' These leaders should have
    appropriate credentials in the field of nanotechnology. It would be
    desirable to have some of this expertise reside within the standing
    membership of the advisory board.
        Third, the Panel recommended ``that the societal implications of
    nanoscale science and technology become an integral and vital component
    of the National Nanotechnology Initiative.'' To grasp some implications
    of a mature, imagine a world where information technology is truly
    ubiquitous and dirt cheap, where even trivial human artifacts contain
    extraordinary complexity and therefore extraordinary ability to store,
    process and communicate information. These broad capabilities of future
    information technology are easy to forecast, but their implications for
    society are still difficult to discern. That is why we should start to
    study these issues now. We will not be able to anticipate every
    societal implication, but the rational study of possible implications,
    and the publication of research results should enable a healthy public
    discourse. In the final analysis, society must decide on the
    appropriate applications of any technology. In a democratic society,
    such decisions should be made under the light of public discourse I
    urge the Committee to anticipate the societal implications of a rapidly
    advancing technology, and accompany our research effort with efforts to
    anticipate and manage those implications.
        Finally, the Panel recommended that the National Nanotechnology
    Initiative ``support long-term funding in nanoscale science and
    technology so that they can achieve their potential and promise.'' They
    further noted that ``Truly revolutionary ideas will need sustained
    funding to achieve results and produce important breakthroughs.'' It is
    hard to overstate the importance of federal funding for basic research.
    Each of the critical breakthroughs in nanotechnology has been based on
    years of sustained federal funding for researchers. The breakthroughs
    funded by the Federal Government are the foundation that enables
    subsequent efforts by the business sector to translate that research
    into products on the marketplace. Without the Federal Government
    underwriting the long-term funding, there will be fewer breakthroughs
    to translate into products and economic prosperity. Simply put, the
    research opportunities are enormous and there is no way that IBM or the
    even the entire IT industry can do the job on its own. Furthermore,
    federally funded university research is the training ground for the
    scientists and engineers who work in industry and translate basic
    research results into products.
        In closing, I would like to thank the Committee for the invitation
    to testify here today. IBM believes that nanotechnology has a big place
    in its future and in the future of society. We urge the Committee to
    pass legislation that will assist in the coordination of nanotechnology
    research, incorporation of additional nanotechnology expertise, and
    long-term and stable funding of nanotechnology.

                         Biography for Thomas N. Theis

        Dr. Thomas Theis received a B.S. degree in physics from Rensselaer
    Polytechnic Institute in 1972, and M.S. and Ph.D. degrees from Brown
    University in 1974 and 1978, respectively. A portion of his Ph.D.
    research was done at the Technical University of Munich, where he
    completed a postdoctoral year before joining IBM Research in 1979.
        Dr. Theis joined the Department of Semiconductor Science and
    Technology at the IBM Watson Research Center to study electronic
    properties of two-dimensional systems. He also collaborated in research
    on surface enhanced Raman scattering, light emission from tunnel
    junctions, and conduction in silicon dioxide. The latter work helped to
    lay the basis for the present understanding of conduction in wide band-
    gap materials. In 1982 he became manager of a group studying growth and
    properties of III-V semiconductors. He published extensively on the DX-
    center, a donor-related defect which limits the digital performance of
    some III-V transistors.
        In 1989 he was named Senior Manager, Semiconductor Physics and
    Devices. In 1993, he was named Senior Manager, Silicon Science and
    Technology, where he was responsible for exploratory materials and
    process integration work bridging between Research and the IBM
    Microelectronics Division. While in this position, he was the principal
    author of IBM's successful contract proposal for the DARPA Low Power
    Electronics Program. This fifteen million dollar, three year, industry-
    university-SEMATECH joint program significantly advanced silicon-on-
    insulator materials, devices, and design techniques for low-power,
    high-performance microelectronics. Also while in this position, Dr.
    Theis coordinated the transfer of copper interconnection technology
    from IBM Research to the IBM Microelectronics Division. The replacement
    of aluminum chip wiring by copper was an industry first, the biggest
    change in chip wiring technology in thirty years, and involved close
    collaboration between research, product development, and manufacturing
    organizations. Dr. Theis assumed his current position, Director,
    Physical Sciences, in February 1998.
        Dr. Theis is a member of the IEEE, the Materials Research Society,
    and a Fellow of the American Physical Society and currently serves on
    advisory boards for the American Institute of Physics Corporate
    Associates, the American Physical Society's Physics Policy Committee,
    the National Nanofabrication Users network, and the National Research
    Council's Board on Physics and Astronomy. He served as a Member of the
    Committee for the Review of the National Nanotechnology Initiative,
    sponsored by the National Research Council. He has authored or co-
    authored over 60 scientific and technical publications.

        Chairman Boehlert. Thank you very much, Dr. Theis. Dr.
    Roberto.

        STATEMENT OF DR. JAMES B. ROBERTO, ASSOCIATE LABORATORY
     DIRECTOR FOR PHYSICAL SCIENCES, OAK RIDGE NATIONAL LABORATORY

        Dr. Roberto. Mr. Chairman and Members of the Committee, I
    am the Associate Laboratory Director for Physical Sciences at
    Oak Ridge National Laboratory, which is a Department of Energy
    multi-program lab managed by UT-Battelle, a partnership of the
    University of Tennessee and Battelle Memorial Institute. It is
    an honor to appear before the Committee in support of H.R. 766.
        At ORNL, I oversee the physical sciences, which include
    nanoscale science and technology and the development of ORNL's
    Center for Nanophase Materials Sciences. This is one of DOE's
    five planned Nanoscale Science Research Centers. The CNMS is a
    state-of-the-art user facility for nanoscale science and
    technology. It is located next to the Spallation Neutron Source
    and builds upon ORNL's strengths in neutron scattering,
    materials and chemical sciences, and computational science.
        I would like to emphasize that the excitement surrounding
    nanoscale science and technology is real. The recent Nanoscale
    Science Research Centers Workshop, which was held in
    Washington, DC, attracted more than 400 scientists from 94
    universities, 40 industries, and 15 federal laboratories. It
    was a pleasure to have Mrs. Biggert join us and give the
    keynote address at that workshop. In all, more than 2,000
    researchers have attended regional and national workshops for
    the DOE Nanoscale Science Research Centers, excuse me.
        Nanoscale science and technology crosscuts the traditional
    disciplines of materials science, chemistry, physics, biology,
    computational science, and engineering. It occupies the
    frontiers of this field, and many of the most important
    problems in science and technology. The solutions to these
    problems offer a line of sight to technical advances of
    enormous impact in materials, information technology,
    healthcare, and national security. Many see nanotechnology as
    the basis of the next industrial revolution.
        John Marburger describes this revolution as one in which
    ``the notion that everything is made of atoms has a real
    operational significance''. What this means is that we are
    learning how to use atoms and molecules as building blocks for
    larger assemblies with more--with new and astounding
    properties. This has been made possible by extraordinary tools,
    including synchrotron light sources, neutron sources, electron
    microscopes, scanning probe microscopes, and high-performance
    computers. These tools have enabled the atomic-scale
    characterization, manipulation, and simulation of complex
    assemblies of atoms and molecules. This is a ``bottoms up''
    view of the world, Mother Nature's world, that embraces
    breathtaking complexity and seemingly endless possibilities.
        So we are at a crossroads in the physical sciences. The
    boundaries between scientific disciplines are disappearing at
    the nanoscale. The study of simple, isolated systems is giving
    way to complex assemblies. We are moving from atomic-scale
    characterization to atomic-scale control, from miniaturization
    to self-assembly. This paradigm shift for the physical sciences
    rivals other revolutions in science, such as the revolution in
    biology following the discovery of the molecular structure of
    DNA.
        It is this paradigm shift and the technological impact that
    will result that underpins H.R. 766. This Act is an important
    part of the strategy to strengthen the physical sciences in the
    United States. Other components include the Energy Research,
    Development, and Commercial Application Act and the Energy
    Science Research Investment Act. The traceability of advances
    in the physical sciences to economic growth, new medical
    technology, energy independence, and enhanced national security
    are direct. As you know, the President's Council of Advisors on
    Science and Technology has given high priority to strengthening
    the physical sciences, including nanoscale science and
    technology. This priority is reflected in the budget request
    for the National Nanotechnology Initiative, which increases to
    849 million in fiscal year 2004, including 197 for DOE.
        Thank you, Mr. Chairman, for your commitment to science and
    to nanotechnology research and development. H.R. 766 is good
    for science, and it is good for America. I appreciate the
    Committee's leadership in this area, and I firmly believe that
    the future of our nation depends on continued leadership at the
    scientific and technological frontier, a frontier that includes
    nanoscale science and technology. Thank you.
        [The prepared statement of Dr. Roberto follows:]

                     Prepared Statement of James B. Roberto

    Mr. Chairman and Members of the Committee:

        My name is James Roberto, and I am the Associate Laboratory
    Director for Physical Sciences at Oak Ridge National Laboratory (ORNL).
    ORNL is a Department of Energy multi-program laboratory managed by UT-
    Battelle, LLC, a partnership of the University of Tennessee and
    Battelle Memorial Institute. It is an honor to appear before the
    Committee in support of the Nanotechnology Research and Development Act
    of 2003.
        In my role at ORNL I oversee the physical sciences, including
    nanoscale science and technology. This includes the development of
    ORNL's Center for Nanophase Materials Sciences (CNMS), one of DOE's
    five planned Nanoscale Science Research Centers. The CNMS is a state-
    of-the-art user facility for nanoscale science and technology. It
    builds upon ORNL's strengths in neutron scattering (for atomic-scale
    structure and dynamics), materials and chemical sciences (for synthesis
    and characterization), and computational science (for simulation and
    modeling).
        The excitement surrounding nanoscale science and technology is
    real. The recent DOE Nanoscale Science Research Centers Workshop and
    National Users Meeting in Washington, D.C., attracted more than 400
    scientists and engineers from 94 universities, 40 industries, and 15
    federal laboratories. More than 2000 researchers have attended regional
    and national workshops for the DOE Nanoscale Science Research Centers.
    It is difficult to find a month without a national or international
    meeting in this field.
        Nanoscale science and technology crosscuts the traditional
    disciplines of materials science, chemistry, physics, biology,
    computational science, and engineering. It occupies the frontiers of
    these fields and includes some of the most challenging research
    problems. The solutions to these problems offer a line-of-sight to
    technical advances of enormous potential in materials, information
    technology, health care, and national security. Many see nanotechnology
    as the basis of the next industrial revolution.
        John Marburger, Director of the Office of Science and Technology
    Policy, describes this revolution as one in which ``the notion that
    everything is made of atoms has a real operational significance.'' This
    has been made possible by extraordinary tools such as synchrotron light
    sources, neutron sources, electron microscopes, scanning probe
    microscopes, and high-performance computers. These tools have enabled
    the atomic-scale characterization, manipulation, and simulation of
    complex assemblies of atoms and molecules. This is a ``bottoms up''
    view of the physical world--Mother Nature's view--that embraces
    breathtaking complexity and seemingly endless possibilities.
        So we are at a crossroads in the physical sciences. The boundaries
    between scientific disciplines are disappearing at the nanoscale. The
    study of simple, isolated systems is giving way to complex assemblies.
    We are moving from atomic-scale characterization to atomic-scale
    control, from miniaturization to self-assembly. Change is opportunity,
    and this paradigm shift for the physical sciences rivals other
    revolutions in science, such as the revolution in biology following the
    discovery of the molecular structure of DNA.
        It is this opportunity, and the technological impact that will
    result, that underpin the Nanotechnology Research and Development Act
    of 2003. This Act is an important element of the strategy to strengthen
    the physical sciences in the United States. Other components include
    the Energy Research, Development, Demonstration, and Commercial
    Application Act of 2003 (H.R. 238) and the Energy and Science Research
    Investment Act of 2003 (H.R. 34). The traceability of advances in the
    physical sciences to economic growth, new medical technology, energy
    independence, and enhanced national security is strong. As you know,
    the President's Council of Advisors on Science and Technology (PCAST)
    has given high priority to strengthening the physical sciences,
    including nanoscale science and technology. This priority is reflected
    in the budget request for the National Nanotechnology Initiative, which
    increases to $849M in FY 2004, including $197M for DOE.
        I offer the following responses to the specific questions posed by
    the Committee:

    Question 1. LThrough a workshop and other planning exercises, Oak Ridge
    National Laboratory (ORNL) has developed a roadmap for its Nanoscale
    Science, Engineering and Technology research programs, establishing
    criteria by which staff research proposals are evaluated. ORNL's
    planning and management activities are analogous to the tasks assigned
    to the Interagency Committee established in section 3(c) of H.R. 766.
    In your view, would it be worthwhile to develop a national technology
    roadmap to guide federal nanotechnology research? To your knowledge, is
    such an effort underway now?

    Answer 1. Through two widely-attended workshops (there has been a lot
    of interest in these workshops), ORNL developed with the scientific
    community a set of proposed research focus areas, equipment priorities,
    and access policies for the CNMS. This input is reflected in the design
    and research capabilities of the CNMS. This was a very productive
    exercise, embodying the elements of identifying research grand
    challenges, improving community cooperation, and enabling
    interdisciplinary planning that are addressed in the National Academy
    of Sciences recommendations on the National Nanotechnology Initiative
    and the provisions of H.R. 766.
        A similar roadmapping exercise to guide federal nanotechnology
    research would be useful. Nanotechnology is here and growing, and the
    time between discovery and application is shrinking. A coordinated
    federal program could more effectively leverage the capabilities of the
    various agencies, establish overarching investment strategies, and
    inform the research community of technological challenges and needs.
    One must be careful here. We do not know all the answers. The roadmap
    will provide focus and accelerate progress in identified directions,
    but a healthy component of fundamental research must be maintained to
    underpin the overall nanotechnology effort and provide a broader avenue
    for innovation.
        There are many planning activities under way in nanotechnology at
    agency, interagency, institutional, professional society, and industry-
    specific levels. I am not aware of any comprehensive federal
    nanotechnology roadmapping effort.

    Question 2. LLikewise, ORNL's Center for Nanophase Materials Sciences,
    currently under construction, could be a model for the
    interdisciplinary research centers and advanced technology user
    facilities authorized in section 3(b). How will the Center foster
    effective collaboration across academic disciplines, and among
    government, university, and industry researchers?

    Answer 2. The Center for Nanophase Materials Sciences is organized
    around research focus areas that represent grand challenges in
    nanoscale science and technology. These focus areas are inherently
    interdisciplinary and will naturally attract researchers from many
    disciplines. In addition, an active workshop program will bring
    together scientists and engineers from a variety of disciplines to
    assess opportunities in emerging areas of nanoscale science and
    technology. These workshops, which will be broadly advertised and open,
    will precipitate the assembly of interdisciplinary teams that will
    develop user proposals. Finally, the Center will be staffed with
    scientific and technical user support staff that span materials
    science, chemistry, physics, biology, computational science, and
    engineering. These staff and the users will work together in laboratory
    spaces designed for interdisciplinary research.

    Question 3. LSome individuals and groups have suggested that
    nanotechnology developments may raise societal and ethical concerns. Is
    any part of ORNL's activity devoted to addressing such concerns?

    Answer 3. There are legitimate societal and ethical concerns related to
    technological advances including nanoscale science and technology.
    While these concerns have been exaggerated in the popular press, all
    technical progress includes some risk. Public awareness and involvement
    are essential to dealing with this risk. I am pleased that H.R. 766
    includes specific provisions for supporting studies of societal and
    ethical concerns.
        ORNL has a significant outreach program of communication and
    interaction with the public. This includes public lectures, tours, and
    secondary school programs, including classroom visits and teacher
    development. CNMS will be actively engaged in these programs.

    Question 4. LAre the views of the research community affiliated with
    ORNL adequately reflected in the research plan for the federal
    interagency nanotechnology research initiative? Do you believe that
    there would be value in establishing an external advisory committee for
    the initiative?

    Answer 4. I believe that the views of the nanoscale science and
    technology community affiliated with ORNL are generally reflected in
    the research plan for the federal nanotechnology research initiative.
    However, as the initiative develops, continued review and oversight of
    federal nanotechnology programs by PCAST would be useful in providing
    overall guidance for the initiative, providing high-level feedback on
    programs and research directions, and providing visible and independent
    assessment of national policy and opportunities.

        Thank you, Mr. Chairman, for your commitment to science and
    nanotechnology research and development. The scientific community
    appreciates the Committee's leadership in this area and firmly believes
    that the future of our nation depends on continued leadership in
    science and technology.

                         Biography for James B. Roberto

        Jim Roberto is Associate Laboratory Director for Physical Sciences
    at Oak Ridge National Laboratory. As Associate Laboratory Director, he
    is responsible for ORNL's research portfolio in materials science,
    condensed matter physics, chemistry, and nuclear physics. This includes
    the Chemical Sciences, Condensed Matter Sciences, Metals and Ceramics,
    Physics, and Research Reactors divisions; the High Flux Isotope
    Reactor; the Center for Nanophase Materials Sciences; and scientific
    user facilities in neutron scattering, heavy ion nuclear physics, and
    materials microanalysis (more than 600 staff and $180M in annual
    expenditures).
        Roberto joined ORNL in 1974 following completion of a Ph.D. in
    applied physics from Cornell University. Prior to his present
    appointment he served as director of ORNL's Solid State Division from
    1990 to 1999. His research interests have included x-ray and neutron
    scattering, ion-solid interactions, and materials for fusion reactors.
    He is a former President of the Materials Research Society and Chair of
    the Division of Materials Physics of the American Physical Society. He
    has served on three National Research Council committees, most recently
    as Vice-Chair of the NRC study on Condensed-Matter and Materials
    Physics, and is a fellow of the American Association for the
    Advancement of Science.

        Chairman Boehlert. Thank you very much, Dr. Roberto. And
    let me thank you for providing specific responses to specific
    questions posed to you, which is in your testimony, which I
    commend to the attention of my colleagues. Thank you for that.
    Dr. Batt.

           STATEMENT OF DR. CARL A. BATT, CO-DIRECTOR OF THE
              NANOBIOTECHNOLOGY CENTER, CORNELL UNIVERSITY

        Dr. Batt. It is rare that an academic has such a rarefied
    audience, and it is also rare that I only have five minutes to
    talk about a whole field. So if you will, I will quickly go
    through a series of images, which I hope will sort of portray
    what nanotechnology is all about and the excitement of the
    Nanobiotechnology Center, which is a National Science
    Foundation supported science and technology center.
        So let me, first of all, treat you all like I would my
    students, and those include not only undergraduates and
    graduate students at Cornell, but also kids in elementary
    programs, middle schools, and high schools. I try to see them
    all.
        Chairman Boehlert. That is at the right level.
        [Slide]
        Dr. Batt. So I will pose a question here, and the question
    is: How many angels can dance on the head of a pin? And the
    answer is, of course, one, as you will see in the image over on
    your left. The real question is: How small can we make the head
    of a pin, but more importantly, how small can we make the tip
    of a pin? And the image over on the right is an atomic force
    microscope, which is basically like a microscope. It feels
    along the surfaces, and we can make these tips as narrow as a
    single molecule. Back in 1959, Richard Feynman prophetically
    sort of laid out nanotechnology as we know it by suggesting the
    notion that why couldn't we write the Encyclopedia Britannica
    on the head of a pin? An IBM--my colleagues at IBM, about 10 or
    12 years ago, actually showed that you could really write out
    IBM, which was one of the most brilliant sort of advertising
    schemes that I have ever thought of. And so we can write the
    Encyclopedia Britannica on the head of a pin. There is no issue
    related to that.
        So let's again continue our education lesson. When we talk
    about nanotechnology and we talk about nanometer scale, we are
    talking about molecular scale. We go from the width of a hair,
    which is about 100 microns, about what we can see, except when
    we get a little bit older and we need some glasses, down to
    around two nanometers. So it is two nanometers across the helix
    of DNA.
        So really what we do at the Nanobiotechnology Center is,
    really, we are trying to build innovative tools to study
    biology at the nanometer scale. Most biology really occurs at
    the nanometer scale, but we have yet to really discover all of
    the interesting tools that we need to study this phenomena at
    that scale, and that is what our Nanobiotechnology Center is
    all about.
        The Center is composed of six institutions, Cornell being
    the lead institution, and we are very grateful to the National
    Science Foundation for their investment in our Center. We are
    joined by Princeton University, Clark Atlanta, Howard, Oregon
    Health and Sciences Center, and Wadsworth Center, which is in
    the New York State Department of Health.
        So let me just spend a few minutes telling you about what
    we are doing now and what totally exciting things that are
    going on in nanotechnology. Basically, the human genome is
    done. We have finished that, and although it lays out a
    blueprint for what is the basis for human beings, as we know
    it, we really are only beginning to scratch the surfaces.
        [Slide]
        On the right hand side, is an image of a machine that is
    used to sequence DNA. It took about 300 of these machines about
    a year to sequence one genome. If we are going to ever advance
    genomics into the realm of sort of modern medicine and be able
    to have sort of healthcare directed toward genomics, we are
    going to have to improve that. My colleagues Paul McEuen and
    Harold Craighead, and this was the cover of Science a few weeks
    ago, have developed a new technology for sequencing DNA. They
    are sequencing single molecules of DNA, which allows us to do
    this process in a massively parallel type of fashion, which
    really allows us to then look at instrumentation for sequencing
    DNA at, really, the nanometer scale.
        Some other colleagues of mine, Bob Austin, who is at
    Princeton University, and Lois Pollack, who is at Cornell, are
    studying the fundamental issues of how proteins fold. Again, we
    understand the complete genome. We understand all of the DNA
    sequences, but what we don't understand is how these sequences
    actually fold up into proteins. And they are studying this
    fundamental phenomenon by taking single molecules of proteins
    and watching how they fold, watching how they fold in a
    microsecond time scale.
        My own group at Cornell is looking at what we call
    biofabrication. We want to take all of these chip people and
    actually put them out of business by making structures
    biologically, by producing various types of structures.
        [Slide]
        And what you see there, that NBTC [Nanobiotechnology
    Center] image, is actually about the width of a hair. And we
    have grown these sort of structures onto the surface of silicon
    using enzymes and various types of components.
        And then finally, we are not unaware of the fact that we
    need to take this technology and reduce it to something that is
    relevant to things like homeland security. And so my group is
    working on basically hand-held sensors that we believe in the
    next few years will be able to detect a wide variety of food-
    born pathogens, biowarfare agents, and other sorts of medical
    pathogens that might be important in the future. And I have--
    and at some point you might want to come and see, we have these
    little chips here, which are basically chips to actually purify
    DNA and then do the amplification all on the chip. And we see,
    in the next five years, these being very affordable hand-held
    sensors.
        So what is the road to success? The road to success in the
    Center is basically looking at interdisciplinary efforts. We
    try to ask fundamentally important biological questions. We try
    to ask how cells respond, what--how does DNA sort of function.
    But we are also trying to do, in collaboration with engineers
    and physicists, develop innovative tools.
        We are very grateful to the National Science Foundation for
    their long-term investment, but there are issues to be
    addressed. University departments are like little kingdoms.
    They are basically built to function primarily in the education
    area, and when we start looking at research opportunities that
    sort of cross over these areas, we have significant challenges.
    Independent investigators, the term used in academia is
    ``herding cats.'' If you can imagine how hard that is to do,
    that is how hard it is to sort of get different faculties to
    sort of agree on a single research focus. We need to sort of
    understand how we can evolve departmental structures and how
    eventually the flow of what we call indirect cost really
    benefits all.
        And there are solutions. Certainly, our Center is a
    solution. We bring to the problem a variety of different
    departments throughout Cornell University as well as a number
    of other institutions. We recognize contributions that
    individuals make. And what is really needed is investment in
    infrastructure. We are one of the hubs of the National
    Nanofabrication Users Network, a wonderful system, a wonderful
    toolbox where we can go out and perform nanotechnology.
        So what is not nano? The book came out, I bought it, hard
    cover, 30 bucks, and let me just tell you, that is not what
    nano is.
        [Slide]
        The images you see at the left and the right are cartoons.
    They are nothing more than an artist's imagination. They are
    not what nanotechnology is all about. The book in and of itself
    has really no technical base that I could understand. I am a
    microbiologist. It was kind of interesting reading. I am
    looking forward to the movie. Maybe it will make sense then.
    What is nanotechnology to me and what is important in terms of
    addressing societal and ethical issues is sort of portrayed on
    this next set of images.
        [Slide]
        As I said, I spend about a third of my time out in schools
    talking to little kids. They are the future of science and
    engineering in this country. We have programs that we run not
    only at--around the Ithaca area, but we also go up to the
    Onondaga Nation School, a very charming community of Native
    Americans about an hour away. We go up to Shea Middle School up
    in Syracuse. This is the future of science in America. These
    are the sort of people--these are the sort of opportunities
    that academic scientists need to embrace and need to really
    understand their role in sort of communicating to this
    audience.
        [Slide]
        The group of pictures over in the lower right hand side are
    my students. They are very much committed to this era. They are
    very much interdisciplinary. I am amazed at how much they know,
    and I try to pretend that I really understand all of it, so I
    thank you very much.
        [The prepared statement of Dr. Batt follows:]

                       Prepared Statement of Carl A. Batt

        Let me first thank you for the invitation to offer my testimony on
    H.R. 766, Nanotechnology Research and Development Act of 2003. It is a
    privilege to speak not just on behalf of my own group, but the
    Nanobiotechnology Center and moreover the scientists and engineers who
    are engaged in a grand adventure. To start the discussion, I would pose
    the age old question, how many angels can dance on the head of a pin?
    While this vexing question has been the fodder of philosophers and
    theologians, a practical answer eludes us. Two confounding factors: how
    small are angels and how small can we make the head of a pin. In
    medieval times, angels were believed to be the smallest possible
    physical object. A more approachable challenge came in 1959 with the
    question from Richard Feynman ``Why cannot we write the entire 24
    volumes of the Encyclopedia Britannica on the head of a pin?'' \1\ The
    challenge of moving around single atoms has been met, the issue of
    making it practical remains.\2\ We can now for all practical purposes
    write the Encyclopedia Britannica on the head of a pin. But what should
    come of these technological feats, what is nanotechnology?
    ---------------------------------------------------------------------------
        \1\ Feynman, R.P. (1959) (http://nano.xerox.com/nanotech/
    feynman.html)
        \2\ Eigler, D.M., Schweizer, E.K. Nature 344:524-526 (1990).
    (http://www.almaden.ibm.com/vis/stm/atomo.html)
    ---------------------------------------------------------------------------
        Through nanotechnology we seek to control single molecules at the
    atomic level and through those processes create novel materials as well
    as new devices. Nanotechnology as practiced by scientists and engineers
    in the academic sector is not just an exercise in fancy science, it
    will have a significant impact on industry and society as a whole. It
    will provide novel medical therapies, help to survey and protect the
    environment, make unique materials that have enhanced properties and
    lead to a new generation of manufacturing capabilities that will simply
    revolutionize and revitalize American industry.
        The impact that nanotechnology is currently having on new and
    existing industries is significant, but the potential for the future is
    enormous. It is estimated that nanotechnology will have a one-trillion
    dollar impact on the global economy in the next decade. Existing
    industries including those not typically characterized as `high tech'
    will see their product lines and the way they manufacture them
    influenced by our growing knowledge in nanotechnology. Moreover,
    aspects of nanotechnology will help to drive small companies whose
    products are developed for niche markets including sensors, bio and
    chemical analytical devices and boutique chemical and ingredients.
    These technologies are not likely to require the multi-billion dollar
    investments that `chip' manufacturers must face. Therefore progress
    will be even more rapid as the relative risk from investing in
    nanotechnology will be lower. Nevertheless significant investment in
    research and development is needed especially in the academic sector.
        Nanotechnology will lead a renaissance in manufacturing in more
    rural areas abandoned by traditional manufacturing over the past 50
    years. It has the potential for reviving communities that used to be
    the home of skilled laborers who contributed to the last industrial
    revolution. While `traditional' chip based manufacturing has
    contributed to economic growth in a select number of regional areas,
    nanotechnology and especially its applications to the interface with
    biology will have a more wide-spread geographic impact. As a resident
    of upstate New York, I look forward to nanotechnology being an economic
    driver in a community that has seen most of the manufacturing jobs lost
    over the past 50 years. I live in a small town, Groton, New York that
    used to be the home of Smith Corona. At one point it employed over a
    thousand people in my town but those jobs left as the utility of the
    typewriter dwindled.

            How does the Cornell Nanobiotechnology Center advance
            nanotechnology research and development compared to what the
            University could accomplish on its own?

        Support from the National Science Foundation through our
    designation as a Science and Technology Center is clearly the driving
    force behind our research and development efforts at the
    Nanobiotechnology Center. Our center has one mission: to build
    innovative tools to study biology at the nanometer scale. Cornell
    University is the lead institution in the Nanobiotechnology Center and
    our partners include Wadsworth Center (NYS Department of Health),
    Princeton University, Oregon Health and Sciences University, Howard
    University and Clark Atlanta University.
        The field of nanobiotechnology, as created with the establishment
    of our center in 2000, would not exist in its current incarnation were
    it not for the collective efforts of the center's faculty and the
    commitment of the NSF. Most of today's most challenging problems in
    science and engineering are complex and they will not be solved by
    single investigators working within the borders of their own chosen
    fields. Problems as far ranging as curing cancer to building the next-
    generation of sensors to help safeguard our homelands, could not be
    successfully addressed without support similar in size and scope to the
    investment made by the NSF in our center. That investment over the
    anticipated 10 years of our center's life will total approximately
    $40M. While that is substantial compared to individual investigator
    awards (by an order of magnitude), the support per investigator within
    the Nanobiotechnology Center is not extraordinary, nevertheless the
    center concept works and value is added through a `center' type of
    mechanism. What is extraordinary is the nature of the center and the
    commitment that we have to act as an interdisciplinary team pooling our
    collective skills in fields including life sciences, engineering,
    physics and chemistry. Not an obligation borne out of mandate, but a
    commitment that arises from the notion that no individual and no single
    discipline can bring all of the skills that are required for these
    complex endeavors. The center will cease to be a Science and Technology
    Center at the end of 2009, the obliged 10-year sunset of all NSF
    supported Science and Technology Centers. What we hope to leave as a
    legacy is a unique collection of innovative tools to study biology at
    the nanometer scale, a fledgling knowledge of how biological molecules
    behave in the nanospace and a talented group of young people. My
    colleagues Paul McEuen, Harold Craighead and I are extending Paul's
    efforts to create single molecule transistors\3\ to develop sensors
    that are sensitive enough to detect a single piece of DNA. We see
    applications in environmental protection, food safety and homeland
    security for these sensors and envision how a network of these sensors
    can form a web that would survey large areas alerting us to potential
    hazards. Others at the Nanobiotechnology Center including Lois Pollack
    and Robert Austin (Princeton) are creating devices\4\ to understand how
    proteins fold, a fundamental process that will unlock the mysteries of
    the genome by informing us how to translate the vast databases of DNA
    sequences into functional elements.
    ---------------------------------------------------------------------------
        \3\ Park J., Pasupathy A.N., Goldsmith J.I., Chang C., Yaish Y.,
    Petta J.R., Rinkoski M., Sethna J.P., Abruna H.D., McEuen P.L., Ralph
    D.C. (2002) Nature 417:722-725
        \4\ Pollack, L., Tate, M.W., Finnefrock, A.C., Kalidas, C.,
    Trotter, S., Darnton, N.C., Lurio, L., Austin. R.H., Batt, C.A.,
    Gruner, S.M., and Mochrie, S.G. (2001) Phys Rev Lett 86:4962-4965
    ---------------------------------------------------------------------------
        The challenges of addressing the development of new scientific
    disciplines in a university setting are significant but Cornell does it
    better than most. The University is just a physical entity that
    hopefully fosters the faculty, students and staff to excel. Fortunately
    if you are at a university like Cornell, which is rich in a tradition
    that nurtures interdisciplinary research and whose departments, schools
    and colleges cover a wide range of areas from food science to physics
    (not to mention the humanities), you have all of the resources that you
    could ever hope to muster. Nevertheless there needs to be some glue,
    some incentive. The Nanobiotechnology Center with the support of the
    NSF provides that incentive, as it encourages faculty to nucleate and
    explore complex problems that can only be addressed by developing and
    exploiting unique tools. Support is primarily used to provide stipends
    and salaries for graduate students and postdoctoral associates. They
    are truly the bright young minds that bring their enthusiasm to bear on
    these biological problems. So in effect the center has many products,
    not just the fruits of our scientific discoveries but also the students
    and postdoctoral associates that are supported and trained by the
    center. These students and postdoctoral associates are the next-
    generation of scientists and engineers who are equipped with a unique
    set of skills honed by the interdisciplinary nature of their research.
    My students approach scientific questions in a much different fashion
    than traditionally trained students, acquiring, then applying a wide
    range of skills far more diverse and more versatile than I garnered as
    a graduate student. Graduate training, at its core, is focused on
    engaging a student's mind and providing them with challenging
    questions. It is not much different than when I was a graduate student,
    but the current set of questions and the potential routes to answer
    those questions are much more robust for students engaged in the
    center's programs. For example students in my laboratory are actively
    engaged in what we call biofabrication, using biological systems much
    the same way that you would use tools and processes from the
    microelectronics industry to build computer chips. We, on the other
    hand, instead of using x-rays and harsh chemicals, use biological
    molecules and `grow' our components with tools isolated from cells. We
    hope over the coming years to marry the biological machinery with more
    traditional forms of fabrication to develop unique materials and then
    structures that have properties virtually unknown in the natural or
    manmade world. These might be replacement parts for damaged cellular
    components or new devices that can survey the environment for
    pollutants well before we recognize the impact of these pollutants on
    our health. We look to biofabrication as being an environmentally
    friendly form of fabrication that will complement the existing silicon
    processing methods that are well entrenched in the industry.

            Does the center actively foster collaboration across academic
            disciplines, for example?

        The research projects supported by the Nanobiotechnology Center are
    expected to be interdisciplinary, and in fact, it would be virtually
    impossible for us to make progress if we worked in isolation apart from
    our colleagues in other disciplines. The challenges are simply too
    complex and for the faculty our training was for the most part focused
    narrowly in a single discipline. When you survey the goals of the
    various research projects you discover that even those biological
    questions which appear simple are vastly complex. We also seek unique
    solutions for fabrication at the nanometer scale using biology to
    inform us. You can look at something as simple as a diatom and realize
    that within its limited genome is the blueprint for creating three-
    dimensional structures in silicon that would be the envy of any
    engineer. But our main focus is on exploring problems in biology at the
    nanometer scale. For example, a number of projects seek to explore the
    question: how molecules behave in the nanospace? Through nanotechnology
    we seek to have an unprecedented and highly precise means to understand
    and control molecules. To assemble them and to rearrange them in a
    manner that yields unique properties. Molecules behave quite
    differently when they are constrained and yet most models to explain,
    for example, how various molecules regulate the controlled growth of
    cells (or the uncontrolled as in the case of cancer) do not account for
    the complexity of these situations. So to address the question, the
    center fosters interactions between biologists who understand the
    nature of the molecules and the engineers who can build tools to study
    these molecules. Left alone biologists would not attempt to build tools
    to study molecules at the nanometer scale, while engineers would not
    have an appreciation of the complexity of biological molecules let
    alone the systems in which they are found.
        Cornell University is fortunate to have four NSF supported centers
    that have a focus or at least a concentration in nanotechnology. These
    include my own Nanobiotechnology Center, the Cornell Center for
    Materials Research, the Center for Nanoscale Systems and a splendid
    facility, the Cornell Nanofabrication Facility that is our beloved
    `tool box' where we create these nanodevices. There are faculty that
    are members of more than one of these centers and we collectively form
    a very strong foundation in nanotechnology. We come from different
    departments and from different colleges scattered throughout Cornell
    University. We come together not just because of the funding but
    because of the intellectual community that exists within these
    different centers.
        For faculty, working across disciplines is a matter of
    communication. We speak different languages and exist in different
    cultures. We approach problems differently. Physicists work in a world
    dominated by large analytical instruments many of which are custom
    built and years are invested in their creation. Biologists are much
    more likely to seek out existing technology because their science
    involves generating data that can be compared to data generated using
    similar instrumentation. But moreover we differ in the way we approach
    experimentation and the questions that we are seeking to answer. Our
    students are hybrids able to conceive, create and use innovative tools
    and seek answers to important biological questions. Our job as faculty
    is to facilitate and encourage this interaction. In my experience once
    it gets started, those students that are motivated and forward
    thinking, get engaged and will move the effort along.

            How does your center interface with the private sector? Do you
            host any collaborative university-industry nanotechnology
            research and, if the answer is yes, does the existence of the
            center make those collaborations easier?

        In 2001, I was fortunate to be the project leader for an effort
    that was selected by New York State, through the New York State Office
    of Science, Technology and Academic Research (NYSTAR) for support. Over
    two years, $2.8M was pledged to the Alliance for Nanomedical
    Technologies. The Alliance had one simple goal: to bring together
    academia and the private-sector to develop the next generation of
    nanomedical devices. In establishing this research and development
    center, we sought industrial input from the beginning. Too often
    academic institutions invent, publish and then look to find a champion
    for its technology. Too often then the specifications of the technology
    arising from a scientific discovery made in academia do not match the
    needs of the private-sector. Too often then the investment in
    retrofitting technology developed in academia for the private-sector is
    greater than the return. Academia is a grand incubator from which
    emerges scientific discovery and that process should remain unfettered.
    Nevertheless the Alliance set forth, in developing its research goals,
    to be inclusive of the private-sector and within one year we had 28
    affiliates who brought their business plans and technology targets to
    the table and engaged our academic scientists in serious discussions.
    From those discussions, a series of research projects were formulated
    which were driven by the rigorous academic questions offered by the
    faculty balanced with the future needs of the industry. For example,
    Alliance supported researchers are looking at arrhythmia in cardiac
    cells while also designing the next generation in wireless cardiac
    monitoring all guided by specifications articulated by our private-
    sector affiliates. Similarly, Alliance supported research will yield a
    new class of hand-held sensors that are capable of precise
    identification of bacteria. This technology will have multiple uses in
    insuring food safety and well as homeland security.
        The linkage between the university and the private-sector is
    absolutely critical. Having been engaged in one form or another of
    technology development for over 20 years, I believe that success is
    dependent upon the technology having a practical impact on the lives of
    people. Making scientific discoveries, publishing papers, going to
    meetings to exchange ideas with my colleagues is only part of the
    process. Seeing technology reach a point where it is available is also
    important. And the university is typically awful about bringing
    technology to a point where it is commercially viable. The Alliance for
    Nanomedical Technologies is attempting to bridge that gap and simplify
    the hand off from the university to the private-sector. Not everyone in
    academia is happy about this linkage, many feeling that it will
    compromise their `academic freedom.' To paraphrase the words of Lloyd
    Old, a friend and the Chief Executive of the Ludwig Institute for
    Cancer Research (with whom we have a partnership to develop therapeutic
    agents for cancer research) scientific discoveries by the academic
    community in and of themselves, are admirable but it remains a great
    challenge to insure that they are useful. While linkages with industry
    are only one way that research discoveries can achieve a degree of
    usefulness, certainly seeing research reach some stage of application
    is important especially as we articulate its value to the general
    public.

            Some individuals and groups have suggested that nanotechnology
            developments may raise societal and ethical concerns. Is any
            part of your center's activity devoted to addressing such
            concerns?

        New technology will always raise the concerns of the public
    especially when we, the scientific community do not take the time and
    have the patience to articulate the field. What falls into the void
    that we create by remaining cloistered in our laboratories, are pundits
    and pseudoscientists whose mission is to, at best, tantalize, at worse,
    to strike fear. It makes great novels, and it makes even better movies
    but the threshold into science fiction is murky. Nanotechnology will
    not as a technology spawn a new threat to society. History shows that
    most of the dangers to society that result from the misuse of
    technology arises not from state-of-the-art technology but more mundane
    technology in the hands of opportunists. We have in the last twenty
    years alone seen horrific acts carried out by individuals and groups
    with some fairly unsophisticated technology.
        There are certainly ethical concerns with any new technology that
    must be considered. The prospects of a run away technology as described
    in Michael Crichton's book Prey would be a sad outcome, but the current
    state-of-the-art in nanotechnology in no way enables that outcome. The
    technology as described in this fictional account is not even close to
    reality. No enabling technology exists or is on the horizon that could
    account for the fanciful creatures described there. In fact I was, as a
    microbiologist disappointed by the lack of even a single technically
    feasible anchor in the book. Yet it received lots of press coverage and
    through a variety of media especially the Internet, fanciful
    predictions of doom proliferated. Unfortunately, the barrier between
    scientific reality and science fiction is only as high as the
    imagination of a talented cartoonist. Pictures abound on the internet
    of nanobots and other imaginary things and we at the Nanobiotechnology
    Center spend a good deal of time engaged in reality checks for students
    and the general public. Even some of my colleagues lean over the line
    at times seduced by the publicity and the potential that this notoriety
    brings in terms of funding and other opportunities. Yet the practical
    reality, self-assembling, autonomous machines smaller than a bacterium
    that can scurry about like little fleas are still just the product of
    an artist's imagination. One practical problem that is yet to be solved
    is powering these devices. In most cases the battery to run any
    mechanical device far exceeds the device itself.
        There are real dangers in the world and those that concern us now
    are fifty year old technologies, lethal in the hands of individuals and
    organizations that would choose to use them.
        So how best to meet the societal concerns of nanotechnology? My
    colleague, Anna Waldron (who directs our education effort at the
    Nanobiotechnology Center) and I have elected to focus our attention on
    the next generation of potential scientists and engineers. This is not
    a theoretical exercise carried out in the ivy covered walls of Cornell
    University, but a practical experiment in classrooms in towns and
    villages that surround our campus. We are engaging the young men and
    especially the young woman, who in increasing numbers, do not look at
    science as an educational opportunity let alone a career for them. They
    do not see themselves as scientists and that is a significant barrier
    that we seek to overcome. We work in concert with their teachers
    recognizing that this partnership will only work if we understand their
    world. With more and more mandated curricula, we need to fit into their
    needs rather than offering content that has no relevance to the rest of
    their educational experience. We operate three middle school science
    clubs for girls addressing the challenge of encouraging young women to
    consider careers in science. We also host two afterschool science clubs
    for underrepresented minorities at the Onondaga Nation School and Shea
    Middle School (Syracuse, NY) exercising our belief that these young
    students have all the potential in the world. We offer events for the
    general public and every summer we engage more than 3,000 people at the
    Great New York State Fair with the wonders of the Nanoworld. In about
    one month we will have the grand opening for a traveling museum
    exhibit, It's a NanoWorld,\5\ that has been developed with our
    collaborators from the Sciencenter and Painted Universe in Ithaca,
    which we estimate will reach more than one million people during its
    tour around the United States.
    ---------------------------------------------------------------------------
        \5\ www.itsananoworld.org
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        In helping educate and more importantly inspire these young
    students, we hope to raise the general awareness of the public at large
    as to what nanotechnology is all about. That this technology and in
    general most technology has a very positive impact on our lives. We
    have coined this effort Main Street Science and over the next five
    years hope to take the scientific discoveries of our center and others
    and translate them into practical and approachable concepts for
    students and the general public. At Main Street Science we will harness
    the energy of our undergraduates and graduate students to develop
    hands-on activities giving them a practical experience in community
    science. What scientific discoveries do we hope to share with young
    students? For example few students even through high school understand
    what the term `nano' means in its fullest context. They understand that
    a nanosecond is pretty fast but they don't comprehend that a
    hummingbird beats its wings about 100-200 times per second. That is
    virtually imperceptible to the human eye and is faster than the
    flickering of a fluorescent light bulb. Never the less computers
    operate about a million times faster. They know that a nanometer is
    pretty small, but they do not realize that the distance between atoms
    is on the order of a nanometer. So for younger children, we consider it
    a challenge for them to comprehend simply what a billion is and expose
    them to the concept using thousands of little plastic Lego blocks. We
    engage kids and have them hopefully begin to believe that science is a
    good thing and learning about science can be exciting. Regardless of
    whether these kids go on to get their Ph.D. in nanotechnology it is
    important to have them believe that they can do it.
        A more scientifically literate public is one sure route to
    ameliorate the fears that seem to accompany many scientific
    revolutions. History is replete with examples of where new scientific
    discoveries were met with public challenges and only after a
    significant back lash, did we the scientific community come out of our
    laboratories and seek to engage the public. The NSF to their credit has
    put engagement as one of the important criterion for their supported
    research programs.

            Are the views of the academic research community adequately
            reflected in the research plan for the federal interagency
            nanotechnology research initiative? Do you believe that there
            would be value in establishing an external advisory committee
            for the initiative?

        Clearly any researcher focused on nanotechnology would find merit
    in the research plan for the interagency nanotechnology research
    initiative as outlined in H.R. 766. I have watched with a great deal of
    satisfaction and pride the efforts of the National Science Foundation
    in their development of the current array of centers and other
    programs. It is precisely these types of external stimuli that help
    drive innovation at the university. Investments by the NSF are welcome
    and more would be appreciated. The benefit from investing in technology
    is magnified well beyond the academic community and is an economic
    driver for new and existing industries. The number of new startups
    whose business plan includes nanotechnology is growing exponentially.
        An external advisory committee would have a daunting task in
    lending guidance to a national nanotechnology initiative.
    Nanotechnology is a very complex field whose definition has yet to be
    fully formulated and embraced by everyone in the scientific community.
    Purists look at nanotechnology as including only those efforts that
    impact at the nanometer scale. I take a more broader view cognizant of
    the appeal that the term `nano' has especially when it comes to
    engaging young scientists. I like the definition in H.R. 766 ``at the
    atomic and molecular scale.'' Certainly an advisory committee charged
    with insuring that the scientific community moves forward is important.
    Too often academics look at research in their chosen field and funding
    for it as an entitlement. The never-ending battle cry that more
    research is needed is something that I believe needs to be continuously
    reassessed. Scientists in academia have two important functions, to
    engage in scientific discovery and to provide educational opportunities
    for students of all ages. Nanotechnology represents one field that will
    have a dramatic impact on our nation and its citizens. Moving forward
    in a bold and progressive fashion is important and certainly guidance
    from highly regarded and respected scientists in the field would be an
    useful component.
        In summary, this bill represents a significant investment but one
    that will stimulate a new era in, not only science but technology.
    Nanotechnology will be the basis for vast improvements in materials,
    sensors, electronics and will impact a number of fields including the
    life sciences. It will stimulate scientists in a diverse array of
    disciplines to think beyond their current set of tools and the
    potential is enormous. We will see nanotechnology impact existing
    industries but also drive the development of new industries launching
    new start-up firms that take the best of American entrepreneurship and
    couple that to discoveries in academia. Investment in nanotechnology
    through the a mechanism as outlined in H.R. 766 will help enormously.

        Chairman Boehlert. Thank you very much, Dr. Batt. Mr.
    Marty.

    STATEMENT OF MR. ALAN MARTY, EXECUTIVE-IN-RESIDENCE, JP MORGAN
                                PARTNERS

        Mr. Marty. Mr. Chairman, Members of the Committee, I thank
    you for allowing me the opportunity to testify before you on
    behalf of the Nanobusiness Alliance and its member
    organization.
        We are witnessing the dawn of a new era in science,
    industry, and quality of life. More quickly than anyone could
    have imagined even just a few years ago when the NNI was
    announced, nanotechnology is entering the marketplace. And my
    testimony will be focused on that marketplace transition more
    than on the science specifically and indeed changing our lives.
        My own firm, JP Morgan Partners, believes that
    nanotechnology advances will impact many of the sectors where
    we already invest, including biotechnology, energy,
    communications, and semiconductors. Over the past few years, we
    have provided venture capital to five nanotechnology companies
    in diverse market applications like textiles, drug discovery,
    electronics, and flat panel displays. Last quarter, JPMP led a
    $30 million C round of funding in Optiva, which was one of the
    largest nanotechnology funding rounds for all VCs in 2002. We
    are continuing to diligently investigate private equity funding
    opportunities in nanotechnology and feel that it is a promising
    area for commercial growth.
        The NSF conservatively predicts a $1 trillion global market
    for nanotechnology in little over a decade. In order to ensure
    that nanotechnology hits its potential, we must proceed
    aggressively, learning from lessons of the past, and create a
    dialogue with the public today so that everyone understands and
    prepares for the transformative effects of nanotechnology in
    the future. This starts with the passage of the Nanotechnology
    Research and Development Act of 2003.
        The Act is a visionary piece of legislation. It has the
    strong support of the Nanobusiness Alliance and its member
    organizations: some 250 start-ups, corporations, universities,
    economic development groups, and investment firms from across
    the United States.
        With a plethora of products in the market, and more on the
    way, it is no longer prudent to view nanotechnology as just a
    science. While basic research efforts must be protected and
    enhanced, as they are the linchpins of this new industrial
    revolution, our focus must be widened to include
    commercialization and a global race in the field of
    nanobusiness. We must look to find ways to take basic research
    and advance it toward commercialization. We must--we are--we
    need funding solutions for technical problems, such as
    packaging and integration of nanotechnology. Further, we need
    funding solutions to scaling problems, such as process
    reproducibility and process quality.
        In the effort to commercialize nanotechnology, private
    equity can play an important role. Over 60 U.S. venture capital
    firms and numerous corporate venturing operations have invested
    in nanotechnology related start-ups. But many promising
    entrepreneurs and interesting technologies will not be funded
    by private equity sources, because they can not bridge the gap
    from the laboratory to the marketplace.
        Venture firms must place funds in a manner that will bring
    competitive returns to our limited partners. Usually this means
    that a start-up must make reasonable progress in
    commercialization issues before a venture firm can reasonably
    invest. Unfortunately, this is often where federal funding has
    been lacking. The result is that many businesses that could
    drive future commercial growth for our country never get their
    ideas out of the laboratory.
        Foreign governments, on the other hand, are very focused on
    bridging the gap from the laboratory to the marketplace, and
    here is a recent example. Two weeks ago, Japan held a nanotech
    event that demonstrated products that were already in the
    market or were about to be introduced to the market. 25,000
    attendees showed up over three days at the convention center.
    Some 18 countries had booths at the show. What was particularly
    telling was that all of the country booths were sponsored by
    government economic development groups, except the United
    States, which was science and academic backed. Also telling was
    that most commercialized technology demonstrated at the show
    was derived from U.S. developed intellectual property, only it
    was Japanese, German, and Korean companies that were
    commercializing these technologies and advancing them beyond
    basic research.
        But while the proposed increases to the NNI are indeed
    solid and significant, especially in these turbulent economic
    times, we must remain aware of the fact that other nations are
    challenging us and are willing to match and, in some cases,
    exceed us in spending and effort.
        In closing, the Nano Alliance--excuse me, the Nanobusiness
    Alliance sees the Act's ability to strengthen the structure of
    the NNI as being vitally important. Second, we support the
    Act's call for the development of some sort of outside advisory
    board, though we feel this group must include not just
    researchers, but business people, local government officials,
    economic development experts, and ethicists. Third, we support
    the Act's call for further examination and tracking of
    international funding, development, and competition. Fourth, we
    support the Act's efforts to further address the social and
    environmental impacts of the science, but we would caution, as
    mentioned by Dr. Batt, that this effort be focused on real
    science, not well-read science fiction. And fifth, we back the
    Act's efforts to encourage nanoscience through additional
    grants and the establishment of interdisciplinary
    Nanotechnology Research Centers.
        Again, I would like to thank the Chairman, Congressman
    Hall, and the Committee for this opportunity to address them.
        [The prepared statement of Mr. Marty follows:]

                        Prepared Statement of Alan Marty

    Introduction

        Mr. Chairman, Congressman Hall, Members of the Committee, I thank
    you for allowing me the opportunity to testify before you on the topic
    of the Nanotechnology Research and Development Act of 2003--on behalf
    of the NanoBusiness Alliance and its member organizations.
        We are witnessing the dawn of a new era in science, industry and
    quality of life. More quickly than anyone could have imagined even just
    a few years ago when the National Nanotechnology Initiative (NNI) was
    announced, nanotechnology is entering the marketplace and indeed
    changing our lives.
        Today's nanotech industry might be compared to the computer
    industry of the 1960s, before the integrated circuit, or the biotech
    industry of the 1970s. A variety of nanomaterials including enhanced
    polymers, coatings, and fillers, are already available, producing
    revenues, and profits. America's store shelves have sunscreens, tennis
    rackets, and cell phones with nanotechnology elements bettering them.
    Carbon nanotube flatscreens, advanced military sensors and other
    electronic products will be in the market within 18 months. And
    advanced nanotech medical advances will be imminently impacting lives
    as they proceed through human trials--targeted drug delivery and cancer
    tagging procedures.
        My own firm, JP Morgan Partners, believes that nanotechnology
    advances will impact many of the sectors where we already invest,
    including biotechnology, energy, communications and semiconductors.
    Over the past few years, we have provided venture capital to five
    nanotechnology companies in diverse market applications like textiles,
    drug discovery, electronics and flat panel displays. Last quarter, JPMP
    led a $30 million C round of funding in Optiva, which was one of the
    largest nanotechnology funding rounds for all VC's in 2002. We are
    continuing to diligently investigate private equity funding
    opportunities in nanotechnology and feel it is a promising area for
    commercial growth.
        As production of nano-products becomes easier, faster and cheaper,
    every market sector will begin to feel their impact. The NSF
    conservatively predicts a $1 trillion global market for nanotechnology
    in little over a decade.
        In order to ensure these types of numbers; in order to ensure that
    nanotechnology hits its potential; in order to ensure that the U.S.
    remains the leader in nanoscience and nanobusiness; we must proceed
    aggressively--learning from the lessons of the past--and create a
    dialog with the public today so that everyone understands and prepares
    for the transformative effects of nanotechnology in the future. This
    starts with the passage of the Nanotechnology Research and Development
    Act of 2003.
        The Act is a visionary piece of legislation. It has the strong
    support of the NanoBusiness Alliance and the Alliance member
    organizations--some 250 start-ups, corporations, universities, economic
    development groups and investment firms from across America. By all
    accounts this is a vital and timely bill that builds on the fine work
    of the NNI and will assist America's long-term scientific and economic
    competitiveness in the nanotech field.

    NanoScience to NanoBusiness

        Nanotechnology is becoming nanobusiness faster than anyone
    imagined. A big reason for this has been the ripple effect from the
    NNI's groundbreaking work and how it has sparked the imagination of
    researchers, entrepreneurs, executives, and people from across the
    world. The foresight of Presidents Clinton and Bush, the efforts of
    Mike Roco, Jim Murday, Phil Bond and others has been the trigger for a
    new age of industry.
        With a plethora of products in the market and more on the way, it
    is no longer prudent to view nanotechnology as just a science. While
    basic research efforts must be protected and enhanced as they are the
    lynchpin of this new industrial revolution, our focus must be widened
    to include commercialization and a global race in the field of
    nanobusiness. We must look to find ways to take basic research and
    advance it towards commercialization. We need funding solutions for
    technical problems such as packaging and integration of nanotechnology.
    Further, we need funding solutions to scaling problems such as process
    reproducibility, product quality and product cost. We must find a way
    to use nanotechnology to give taxpayers a return on their investment,
    develop the economy and create good high paying jobs. The
    Nanotechnology Research and Development Act of 2003 lays the foundation
    for this.

    Corporations

        Just five years ago only a few corporate visionaries--IBM, HP, TI
    among them--were undertaking any research and development in the
    nanosciences. Today you would find that most manufacturing companies of
    the Fortune 500 have some nanotechnology effort--GM, GE, Siemens,
    Intel, NEC, ChevronTexaco, Mitsubishi, Hitachi and Dow have launched
    significant nanotech efforts--in R&D, investment and product
    development.

    Start-Ups

        Unlike the Dot-com era, nanotech start ups are built on physical,
    chemical and biological science. They have real technology. Real
    assets. And more often than not, they are founded by researchers from
    universities, government and corporate laboratories.
        More than half the world nanotech start-ups are in the U.S. And
    while it is difficult to pin an exact number on how many there are, it
    is safe to say that over one thousand are currently in operation or in
    the incubation stage in the U.S., up from approximately one hundred
    just three years ago. Although these start-ups are driven by
    enthusiastic entrepreneurs and usually have valuable technology, most
    of these small companies will fade away due to lack of expertise or
    funding necessary to bring them to product commercialization.

    Private Equity Funding

        Over sixty U.S. venture capital firms, in addition to numerous
    corporate venturing operations, have invested in nanotech-related
    companies. Because the formal definition of nanotechnology is quite
    malleable, it is difficult to measure the total private equity
    investment level, but Venture One tracked almost $500 million in
    nanotech funding to start-ups in 2002.
        Many promising entrepreneurs and interesting technologies will not
    be funded by private equity sources because they cannot bridge the gap
    from the laboratory to the marketplace. Venture firms like JP Morgan
    Partners must place funds in a manner that will bring competitive
    returns to our limited partners. Usually, this means that a start-up
    must make reasonable progress in process reproducibility, product
    quality and product cost before a venture firm can reasonably invest.
    Unfortunately, this is often where federal funding has been lacking.
    The result is that many businesses that could drive the future
    commercial growth for our country never get their ideas out of the
    laboratory.

    Regional Development

        Ultimately, regional development efforts--the creation of
    technology clusters (Nanotech Valleys if you will)--will fuel the
    explosive growth of the nanotechnology industry. Localized development
    efforts are already underway from Virginia to Texas to California.
        In February alone, Massachusetts, Michigan, New Jersey, and
    Connecticut announced the formation of statewide nanotechnology
    initiatives, initiatives that begin to bring together businesses,
    universities, investors and government agencies. This has been the
    fulfillment of much of the Johnny Appleseed-like efforts of the
    NanoBusiness Alliance that started at its inception.
        The Alliance launched a ``Nanotech Hubs Initiative'' last year to
    jump start regional technology cluster development. It has been
    overwhelmed with interest in starting these efforts. Though it has
    launched efforts in six regions--as well as affiliates in the EU and
    Canada--the Alliance has been inundated with calls from 38 states and
    27 countries to help develop this capacity. These states and regions
    are already looking to nanotechnology to ignite economic development.
        Regions are looking to grasp the size of the market, its dynamics,
    its best practices, how to improve tech transfer efforts and how to
    leverage other nanotech initiatives. In some cases the Alliance has the
    answer. In many it does not. This is a consequence of the nanotech
    field's growth outpacing original projects.

    Foreign Competition

        Nanotechnology is emerging as a truly global technology. Unlike
    many past waves of technological development, nanotechnology is not
    dominated by the United States. In several areas of nanotechnology the
    U.S. is being outpaced by foreign competition. Japan, EU, Russia,
    Korea, and China are all significant players in the field of
    nanotechnology.
        A recent report from the Journal of Japanese Trade & Industry notes
    that the Japanese government views the successful development of
    nanotechnology as the key to ``restoration of the Japanese economy.''
    In an editorial to the Jerusalem Post just last week titled
    ``NANOTECHNOLOGY HOLDS A KEY TO ISRAEL'S FUTURE,'' Shimon Peres made a
    similar case. They are not alone. Funding has grown at unprecedented
    rates across the globe over the last three years as nations try to
    outpace the U.S.
        Two weeks ago Japan held a nanotech event that demonstrated
    products that were already in the market or were about to be introduced
    to market. 25,000 attendees showed up over 3 days at the convention
    center. Some 18 countries had booths at the show. What was particularly
    telling was that all the country booths were sponsored by government
    economic development groups except the U.S.--which was science and
    academic backed. Also telling was that most commoditized technology
    demonstrated at the show was derived from U.S. developed intellectual
    property--only it was Japanese, German and Korean companies that were
    commercializing these technologies and advancing them beyond basic
    research.
        China spends about $300-400 million on nanotechnology a year--yet
    in adjusted value that is a huge amount. The European NanoBusiness
    Association has made the claim that nanotech is ``the EU's to lose''
    and says that they outspend the United States 2 to 1. Japan's numbers
    are almost directly in line with our NNI and from a per capita level
    the Swiss and even the Australians are spending more than the U.S.
        So while the proposed increases to the NNI are indeed solid and
    significant--especially in these turbulent economic times, we must
    remain aware of the fact that other nations are challenging us and are
    willing to match and in some cases exceed us in spending and effort. It
    is important that we focus on this and spend money wisely and create a
    solid partnership between government, industry and the U.S. university
    system to ensure that effort and performance are maximized so that we
    can indeed win this next industrial revolution.

    Summary of Challenges in the NanoBusiness World

        Many nanotech companies have emerged from the basic research cycle
    and are addressing commercialization issues such as packaging,
    integration and scaling. Except for the ATP program, no government
    programs properly address this vital timeframe in the cycle of research
    and business. This time period is one that competing nations in Asia
    and the EU are particularly attuned to addressing and are providing a
    life line to many U.S. start-ups, which sends growth and profits
    abroad.
        Another area of concern for nanotech start ups is the current state
    of U.S. intellectual property. The Patent Office is in desperate need
    of training programs to ensure its examiners understand nanotechnology
    and its multi-disciplinary nature.
        In addition, the current state of technology transfer is lacking by
    any measure. The technology transfer process from government and
    academic labs to the marketplace is very difficult. Bayh-Dole is a well
    written piece of legislation, but its implementation at America's
    universities is stalling the transfer process.
        And while the NNI and overall government nanotech efforts have been
    a great source of coordination and basic research funding for many,
    these nanotech grants remain among the most competitive in the
    government.
        Also, education, as well as workforce training and development are
    beginning to become issues among the nanotech community. In order to be
    the industry of tomorrow nanotechnology companies need the workforce of
    tomorrow--well trained researchers and staff.
        Lastly, while the futuristic nanotechnology scenario described by
    Michael Crichton is thankfully science fiction, real researchers in the
    lab still have many questions on nanotechnology's health, environmental
    and societal effects. These concerns are leading to hesitation. They
    have also left room for activists with bad intent to fill the
    information void with fear. Nanotechnology is too important to the
    future of the American people to let this happen. We need more
    information and a coordinated effort to educate and dialog with the
    public on nanotechnology and its potential.

    Close

        In closing, nanotechnology the science is indeed now rapidly
    becoming nanotechnology the business. As a nation we have been very
    fortunate to have the visionary support--from both sides of the aisle--
    in developing and maintaining the NNI. However, we are now at a cross
    roads where we must expand its reach from the laboratory to the board
    room. While maintaining the development of basic research as a
    priority, we must expand our sights to cultivate the nanotechnology
    industry and usher in a new Industrial Revolution. Again, that is why
    the Nanotechnology Research and Development Act of 2003 is so
    important.

            1. We see the Act's ability to strengthen the structure of the
            NNI as being vitally important--increasing the long-term
            stability and growth of our nation's nanotechnology efforts.

            2. The Act makes the development of the nanotechnology sector
            a major government focus. We especially support the Act's call
            for the development of some sort of outside advisory board--
            though we feel this group must include not just researchers,
            but business people, local government officials, economic
            development experts and ethicists.

            3. To ensure America's long-term leadership in nanoscience and
            nanobusiness, we also strongly support the Act's call for
            further examination and tracking of international funding,
            development and competition.

            4. We strongly support the Act's efforts to further address
            the social and environmental impacts of the science, but we
            would caution that this effort be focused on real science, not
            well read science fiction.

            5. And, we back the Act's efforts to encourage nanoscience
            through additional grants, and the establishment of
            interdisciplinary nanotechnology research centers. This will
            lead to more innovation and further development of the nanotech
            economy.

        Long-term, the Alliance would like to see Congress continue its
    focus on nanotechnology developing programs--and expanding existing
    programs--for commercializing nanotechnology development.

            1. Develop real numbers and benchmarks for the size and
            projected growth of the nanotechnology field and its economic
            effects.

            2. Create programs to develop the nanotechnology workforce of
            tomorrow from Ph.D. level through K-12. We must find ways to
            incentivize American children to pursue the sciences in
            general--but especially nanoscience.

            3. Ensure that the USPTO is properly educated and equipped to
            evaluate and approve nanotechnology patents. And make sure that
            there is global patent fairness. We cannot allow other nations
            to use patent approval as a weapon to slow down and steal our
            basic research.

            4. Develop programs that promote and nurture regional
            nanotechnology cluster development.

            5. Develop programs to improve the state of tech transfer at
            government labs and academic institutions which will improve
            the commercialization of emerging technologies.

            6. Involve the U.S. public more in the dialog educating them
            and listening to their views on this paradigm shifting
            technology.

        Again, I would like to thank the Chairman, Congressman Hall and the
    Committee for this opportunity to address them.

                                   Discussion

        Chairman Boehlert. Thank you very much. Let me ask our non-
    government witnesses--well, let me ask all of you, where are we
    vis-a-vis the competition? Are we playing catch-up? Are we
    ahead, but being challenged as never before? How would you
    assess where we are, and what are other governments doing to
    support nanotechnology R&D? Dr. Theis?
        Dr. Theis. Well, certainly, we see other governments
    willing to fund this kind of research and development at a
    level that is comparable to the U.S. National Nanotechnology
    Initiative. I do personally believe that the United States has
    a bit of a secret weapon in our venture capital community and
    our entrepreneurial spirit that we are willing to focus and--in
    a way, and take chances and accelerate certain science, the
    development of that science into products. And that is a system
    that should be encouraged. And it is a system that can't
    function without government funding of basic research, which--
    --
        Chairman Boehlert. Dr. Roberto, yeah, what do you--how do
    you see things?
        Dr. Roberto. I think we are in a very tough fight. I think
    that we have an edge right now, but I think the kind of
    investments that we are talking about in H.R. 766 and the kind
    of priority you are addressing this with is essential to
    staying ahead.
        Chairman Boehlert. Dr. Batt.
        Dr. Batt. I think you have to define, you know, which
    particular field we are looking at. I think if you are talking
    about sort of the grinded out kind of miniaturization sort of
    stuff, yeah, I would say that we are not necessarily as
    competitive as we should be. I would argue in our particular
    field, nanobiotechnology, where we are trying to marriage two
    distinct fields, we are way ahead of the game. We seem to have,
    in the United States, this ability to sort of collaborate
    across disciplines that is really kind of unique and almost
    indifferent to the university structure.
        Chairman Boehlert. Mr. Marty, talking about venture
    capital.
        Mr. Marty. Well, let me talk about governments first, just
    a couple numbers, and these numbers have a big error band on
    them, because they are--none of the governments do a
    particularly good job at defining exactly what is
    nanotechnology and what it isn't. But Japan, in '03, is looking
    to spend a billion dollars of government money in
    nanotechnology. The European Union, greater than one billion in
    '03. South Korea, 145 million in '02. And a lot of this is
    focused not on basic research, but on the commercialization
    process. So I think most people would feel comfortable that the
    U.S. has a good lead, maybe not as strong a lead as we have had
    in past scientific endeavors, but I think we have got a good
    lead in basic science.
        I think the challenge for us is can we commercialize this
    so that we can get the economic benefit, the jobs benefit out
    of this nanotechnology revolution.
        Chairman Boehlert. So you are comforted by the
    Administration's Initiative and the response from the Congress
    on a bipartisan basis?
        Mr. Marty. I am absolutely comforted by it, and I think it
    is very fundamental.
        Chairman Boehlert. Thank you. Mr. Russell, do you want to
    respond to that?
        Mr. Russell. Yeah, I think the summary is a good one. I
    think that this is clearly an area that there is a tremendous
    interest across the globe in terms of research. I think we
    still are in the leadership position, and I also think that it
    is an area that we are going to continue to have to fund
    aggressively.
        Chairman Boehlert. Mr. Marty, what about the
    commercialization part of the equation, ATP [Advanced
    Technology Program], for example?
        Mr. Marty. Well, ATP has been, you know, challenged here in
    Washington, DC by many folks. I do think that ATP has a unique
    role to play in commercialization. I mean, there are a lot of
    start-ups, and that is where I spend my life, the world of
    start-ups, who have a basic technology that they have been able
    to prove once or maybe a dozen times in the laboratory. But
    unfortunately, I have--you know, as I look at hundreds of
    deals, I am not able to invest in any of those start-ups. And
    that is generally true for all venture capital players, because
    there is no--we have no intuition that they will have an
    ability to produce that product at any sort of volume, at any
    sort of an appropriate cost structure.
        And the ATP, actually, is one of the unique funding
    mechanisms that allows those kinds of start-ups to get funding
    that can move them a little bit further down the path. And by
    showing some reasonable progress, all of a sudden, the venture
    funds become available to these companies. But without showing
    some reasonable progress in that area, they, frankly, die and
    go away.
        Chairman Boehlert. Well, that is the very purpose of ATP,
    as I see it. We don't need another agency to provide money for
    what the private sector is willing to provide money for.
        Mr. Marty. That is right.
        Chairman Boehlert. We have got to be the investors. Dr.
    Batt, I--you ought to take your show on the road, because you
    can excite a lot of people, and you bring it down to everyday
    real terms that people can understand. And I will tell you one
    way to get a lot of people excited about this is not so much
    through the technology, but the opportunities it presents for
    America outside of our urban centers to develop new industries,
    new job opportunities. That is a wonderful presentation you
    have.
        Dr. Batt. Well, thank you. I mean, one of the things that
    we look at, and I started about five years ago a small company
    in Ithaca basically to sort of bridge the academic sort of
    commercial gap that I saw there. And I think it is very
    important for us to sort of recognize the fact that this--these
    sorts of industries will not be the giant chip manufacturers.
    These are going to be small industries, and as you are well
    aware in upstate New York, we would like to see a little bit
    more of these sort of high-tech jobs come back there and be
    able to sort of rejuvenate that area.
        Chairman Boehlert. Thank you very much. Cornell is leading
    the way in that regard. Mr. Hall.
        Mr. Hall. Mr. Chairman, Mr. Marty is--the Advanced
    Technology Program has been controversial since its inception,
    has it not?
        Mr. Marty. It has.
        Mr. Hall. And is not----
        Mr. Marty. Not in the industry. I think it has been
    controversial, you know, in Washington. I think in industry, it
    has been----
        Mr. Hall. I think----
        Mr. Marty [continuing]. Appreciated.
        Mr. Hall [continuing]. It is heading into doing away with
    it.
        Mr. Marty. Right.
        Mr. Hall. And I think you probably have a problem with
    that. And I might ask Mr. Russell, though, in all fairness,
    what emphasis should the National Nanotechnology Initiative
    base on the transition of research results to commercial
    developments and to bridge the gap between basic research and
    commercialization? What is your position? Or do you have a
    position opposite to what Mr. Marty has?
        Mr. Russell. Well, two separate issues I think here. One is
    in terms of sort of the emphasis of NNI currently and over
    time. Clearly, one of the things that has been emphasized by
    NNI is basic research. And I suspect that that will continue
    into the future. That being said, if you look at some of the
    specific programs that are--that fall under NNI, including the
    centers, for example, that DOE is structuring, there clearly is
    a specific outreach effort to the commercial sector through
    user facilities again, for example, at both DOE and NSF. NSF
    has actually started those centers up.
        In addition, I think when you start talking about
    technology transfer, that is a major issue and consideration
    not just for nanotechnology, but I think across the entire
    federal research effort. It is something that we are taking
    very seriously and something we are working hard on. An
    example, the PCAST, which is now beginning to review NNI, has
    just released an interim report on how we can improve our
    mechanisms for technology transfer. They are going to continue
    to do that review. They are sort of uniquely qualified to look
    at that issue, in part because they are made up of both
    university presidents and heads of major companies.
        And so I think the issue of how we transfer technology is
    an important one. It is embedded in the NNI program. There are
    parts of the NNI program that are specifically oriented toward
    interfacing with not just academia, but also industry. But I
    also think that the primary focus, at least currently for NNI,
    is going to be basic research.
        Mr. Hall. Mr. Marty, your company thinks nanotechnology
    advances are going to impact a lot of the sectors where we
    already invest--and that seems to be something that you could
    really--including biotechnology, energy, communications, and
    semiconductors, in your opening speech.
        Mr. Marty. Right.
        Mr. Hall. What is your position on Mr. Russell's--I mean, I
    think you to be wonderful, and you all are--all of you
    obviously have two brains. And you can get around any questions
    that we ask, but it would be wonderful in this, which is a
    wonderful thrust, one of the greatest. And I really recognize
    the Chairman and the other Members who introduced this
    legislation. It is really one of the finest, the most pure. It
    makes you feel clean when you are a part of it, this thrust.
    How can you two continue to work together, because we want to
    be successful in this? We want to be first. We don't want to be
    third.
        Mr. Marty. Well, first of all, I do feel strongly that, as
    I said in my remarks, that nanotechnology will impact some of
    the most basic industries in our country. And so the ability to
    move forward with not only basic research, but also
    commercialize it, is going to impact the semiconductor
    industry. You know, it is a $136 billion industry. It is
    growing at 10 percent. It will not continue in at the pace it
    has been continuing if we do not have the advances in
    nanotechnology. It is just fundamental.
        The same is going to be true for the flat panel display
    industry, an industry that the United States would like to take
    a larger share of. It is a $25 billion industry. We have got
    some very interesting basic research and basic intellectual
    property that has been established here in the United States.
    If we are not able to find a way to commercialize that and
    bridge the gap to commercialization, then my expectation is
    that that $25 billion industry, which is currently growing at
    28 percent, will continue to be dominated by countries outside
    of the United States.
        So for me, the challenge for us is to take what we have as
    fundamentally strong and compelling intellectual property in
    the nanotechnology area and find a way to move that into, you
    know, the industrial complex that we have within the United
    States to create jobs and opportunity.
        Mr. Hall. My time is up, and I thank you. I yield back.
        Mr. Smith of Michigan [presiding]. Well, with the
    prerogative of the Chair, I hope when we are talking about
    ``commercialization,'' we are talking about commercialization
    in the United States. And when we are talking about ``taking
    the lead,'' we are talking about taking the lead in adding to
    not only health and our capacity to improve research, but also
    the United States' economy. And with that, Mr. Rohrabacher.
        Mr. Rohrabacher. Thank you very much. I note that the
    legislation is suggesting about a 10 percent increase in our
    spending level for this research. And of course, the panel has
    unanimously forced this increase in spending levels,
    considering that this is the technology of the future,
    etcetera. Maybe you could tell us where we should decrease the
    spending of research in order--what is the technology of the
    past that we need to defund in order to come up with this
    money?
        Mr. Russell. Well, first let me be clear about my
    statement. And I think in my written testimony it is clear. I
    have been--I discussed the President's '04 budget, which
    included a 10 percent increase. I think in that budget you will
    find that we did, indeed, weigh pros and cons and, as current
    discussion that you have heard indicates, there are some
    programs that did not receive as much funding as other
    programs. We think nanotechnology is one that----
        Mr. Rohrabacher. You are being nebulous about that. You
    might mention a few.
        Mr. Russell. For example, the--a program that we were just
    discussing, the ATP program, did not receive significant
    amounts of funding in the President's budget, and again, NNI
    and other priority basic research programs did receive
    substantial increases. And I think that priority setting is
    crucial in any budget exercise. And so we believe that
    nanotechnology research is a priority. It is one of the few
    priorities that we specifically outlined to the heads of all of
    the various research agencies when the Director of OMB, Mitch
    Daniels, and the head of OSTP, Dr. Marburger, sent out their
    memo last summer indicating what the priorities are. So----
        Mr. Rohrabacher. Anybody else want to take a shot at
    knocking somebody else off his horse in order to get onto the
    horse? I would have to say that in my 14 years in Congress, I
    have always been able to find people who have something to
    advocate spending more money on, but I have never been able to
    find even those people willing to advocate spending less money
    on something else. And until the scientific community gets its
    act together and is able to do that, it is not going to be
    taken as seriously as they would be. People who come up here to
    testify should be able to very easily say, ``This research is
    no longer as worthwhile. This research is, and that is why we
    are advocating we spend it there.''
        About some of the other things that we have heard today, is
    this--are we going to be able to write an encyclopedia on the
    head of a pin? Is that--are we going to be able to--with--take
    information something on the size of the head of a pin and
    retrieve it?
        Dr. Theis. I would say beyond a shadow of a doubt. In fact,
    the problem, of course, is not writing it, it is retrieving it.
    But I think----
        Mr. Rohrabacher. Right.
        Dr. Theis [continuing]. That the exploratory research in
    laboratories around the world certainly indicates that that
    will happen, that and quite a bit more.
        Mr. Rohrabacher. Okay. But that hasn't happened yet, right?
    We haven't----
        Dr. Theis. Not--certainly not as a practical product.
        Mr. Rohrabacher. All right. So this trillion dollars a
    year, and I think as Mr. Marty has suggested, a trillion
    dollars, within 10 years, we are going to have a billion-
    dollar--this is going to be a trillion-dollar business?
        Dr. Theis. Well, you know, I would like to continue with
    that.
        Mr. Rohrabacher. Sure.
        Dr. Theis. We--Mr. Russell and I did try and make the point
    that this is about new materials. I don't know the exact
    science of the material sector of the economy, but it is
    certainly hundreds of billions of dollars. And there are--there
    will be very few new materials developed and brought into the
    marketplace in the future that are not nanostructured
    materials. In other words, all new materials in the future, all
    improved materials will be nanostructured materials. So that is
    an enormous sector of the economy by itself. To get to the
    trillion dollars, I think you also have to include the--you
    know, the information technology hardware, which I alluded to,
    which is already a nanotechnology. It is not a mature
    nanotechnology, but it is already a nanotechnology. So those
    are realistic kinds of numbers.
        Mr. Rohrabacher. Are we going to have clothing that you
    don't have to wash as much because it won't get as dirty?
        Dr. Theis. Well, that is a--that sounds trivial, and I
    may----
        Mr. Rohrabacher. No, it is not trivial.
        Dr. Theis. I don't know. But you know, there are--those
    things are happening right now. There are nanoparticles being
    incorporated into fibers for clothing for exactly those
    applications. There are nanoparticles in paints, in cosmetics,
    in all sorts of mundane, everyday things, but this--I--you
    know, those are obviously not the spectacular applications of
    material science, and they are not the spectacular
    application----
        Mr. Rohrabacher. But you do remember the man in the white
    suit?
        Dr. Theis. Yes.
        Mr. Rohrabacher. For those who don't--haven't seen that
    film, I would recommend it. It is kind of an interesting film.
    But thank you very much. Your remarks have been enlightening.
        Mr. Smith of Michigan. And the new man in the white suit,
    the suit stays white. Mr. Miller.
        Mr. Miller. Thank you. For the last 21 years I have been
    married, my dirty clothes simply appear clean and folded in my
    chest of drawers, and up here in Washington, I find the only
    way they become clean is if I go down to the coin-operated
    laundry in my building. So having clothes that stay cleaner is
    very attractive to me. It is not trivial at all.
        I did want to follow up on the questions that Mr. Hall
    asked earlier. Mr. Marty, Senator Allen testified earlier that
    we were well behind in nanotechnology, behind other
    industrialized countries, or even some that were not so
    industrialized. He had listed Japan, Korea, the European Union,
    China, I don't think he mentioned Israel, but I have read or
    heard elsewhere that Israel is also probably ahead of us in
    nanotechnology. Do you agree that we are behind them in
    nanotechnology?
        Mr. Marty. It is very hard to measure.
        Mr. Miller. Um-hum.
        Mr. Marty. And so as you read in literature, and as I talk
    to people, I get a variety of different opinions. My own
    opinion is that we are being outspent by Japan. We are being
    outspent by the European Union right now. And on a per capita
    basis, we are being outspent by a lot of people: Singapore,
    Korea, etcetera.
        But I also believe that we fundamentally have some
    structures in the United States that give us some advantage and
    that make it--make this a very attractive place for not only
    developing technology with our university labs and our
    universities, but also commercializing technology. So I think
    the future is yet to be written. To me, an important thing to
    realize is that we are not as far ahead as we have been in past
    scientific endeavors. And so I think it is a closer race. And
    if we don't keep our minds focused on some of the issues of
    commercialization, we may find it is a race that we are yet to
    lose.
        Mr. Miller. When you say those other nations are
    outspending us, are you--are they outspending us in basic
    research or in commercialization efforts?
        Mr. Marty. You know, I wish I could give you a good answer.
    I think--I have not been able to find literature that is
    compelling to answer that question. I think it is very fuzzy.
    And to the extent that somebody within the Federal Government,
    as envisioned in this bill, could give us better visibility as
    to who is spending real money on what, I think that would
    actually be significant value added.
        Mr. Miller. In--Mr. Marty, in both your written testimony,
    I think you also mentioned in your oral testimony, that JP
    Morgan Partners have invested in five nanotechnology companies
    in textiles, drug discoveries, electronics, flat panel. How
    much have you invested and what do you--is your expected rate
    of return on that over the next five or 10 years?
        Mr. Marty. Well, the first four that we invested in were
    small investments. We were still trying to understand what
    nanotechnology was. We did make, as I mentioned in my notes, we
    did lead a $30 million round just last November in a company
    called Optiva. So given that we are an $8 billion fund, our
    investments in nanotechnology to date are, you know, less than
    $40 million. So it is a pretty over the last, you know, four
    years or so. So it is actually a pretty small amount of our
    investment. And I think this makes a very important point,
    which is that we invest not because it is nanotechnology and
    not because it is the future of, you know, economic development
    for the country. We invest for return. And generally what we
    find, if we take nanotechnology investments and we compare them
    against investments in, you know, movie theaters or
    pharmaceutical companies or, you know, oil drilling or
    something like that, and we look at all of those different
    possibilities, the nanotechnology often is too risky. It is not
    sufficiently commercialized yet for us to be able to make a
    good, wise investment.
        And so that is okay. That is what venture capital is about,
    but I think it points to the issue of making sure that we can,
    in fact, engage the venture capital community in
    commercializing this technology. And that means we need to
    bring it along a little bit more.
        Mr. Miller. Had the ATP program, the Advanced Technology
    Program, in any way, helped take those products from basic
    research to commercialization? Had they done anything in
    packaging, integration, scaling to prepare those--make the
    transition?
        Mr. Marty. There are certainly good examples where ATP has
    been helpful. I am sure there are also examples where ATP has
    been ineffective. And so I am not trying to say exactly how the
    legislation ought to be written. But I am advocating, having
    spent a lot of time in other countries in the commercial world,
    I do believe that the United States needs to continue to look
    for ways that we can help small companies to make progress
    toward commercialization, because otherwise, those companies
    will seek funding outside of the United States.
        Dr. Batt. If I may chime in for a second, just sort of
    looking at the academic section of the investment there, I
    think we are still the envy of the world. I think the
    investments that are made by, for example, the National Science
    Foundation to academic science, are--there are countries
    looking to model what we are doing here. I think where the gap
    exists is simply taking that basic research, taking that
    knowledge and then sort of converting that into something that
    is commercializable. And that is where you see a significant
    investment in countries like Japan and Korea and in the EU.
        But I think as far as the bringing together of academic
    scientists to sort of cross disciplines, I know that our
    particular center has been approached many, many times to sort
    of ask us a question: ``How do we do that?'' And I still think
    that the creativity in the academic sector is still there. It
    is still a very powerful resource and worthy of investment.
        Mr. Smith of Michigan. As Chairman of the Research
    Subcommittee, we have held hearings on nanotechnology. And of
    course, outside of medical, NSF is the largest basic research
    effort in nano, as you know, Mr. Batt. And at $221 million,
    we--NSF represents about 30 percent of the total NNI budget.
    But in NSF, with our basic research and our requirements for
    publication, and I am moving back into commercialization again,
    I mean, we might lead the world in terms of our basic research,
    but I guess a couple concerns, one is making sure that the
    American taxpayers paying for that effort get some of the
    rewards. And so the technology transfer in this area that
    allows the economy in the United States to benefit has got to
    be one effort.
        And the other thing that I have been--that seems to be
    apparent is other countries are coming to Cornell and looking
    at our basic research and trying to utilize that basic
    research, add to theirs that isn't always as available as ours,
    to win the war in commercialization. So maybe start with you,
    Dr. Batt, in your general comments, since you are the only one,
    I guess, here that is conducting the--some of the NSF money in
    the area.
        Dr. Batt. Yeah, I mean, it is a great concern, because you
    know, we try to be as global as we can in terms of one where
    our students come from, and also trying to then, as I do to
    sort of maximize the pool of students of U.S. citizens that
    come into our educational system. And we try to sort of
    encourage those sort of linkages with the private sector. The
    problem in academia is largely that when we continue to operate
    in sort of isolation, we build this widget, and then we go out
    and try to sell it. And then we realize that that linkage
    should have been made well before we really formulated all of
    our research plans. And that is--a lot of what we try to do is
    just sort of bring the private sector, not serving their needs
    exclusively, but understanding what their needs are all about,
    so that the transfer of that technology into the private sector
    is a relatively smooth transition. We still have a lot to
    learn. You know, academia sort of built this educational
    institution. And it is probably only within the last, you know,
    30 or 40 years we began to realize that it is, as you well
    articulate, that we can't simply operate in a vacuum, that our
    resources come from the taxpayers of the United States. And we
    need to sort of give back to them something that is really
    tangible, not a publication in Science.
        Mr. Smith of Michigan. All right. Let us take it from there
    with Mr. Theis and let Mr. Marty maybe in turn. So you know,
    this is a Science Committee, but as Mr. Rohrabacher points out,
    other countries can--are allowed to consider their investments
    in the new machinery, the new investments--and depreciate it on
    their tax bill the year that they purchase it. We have to let
    the inflation sort of eat up some of our investment. So it
    seems to me like not only do we need NNI for the research, we
    need some of an effort within Congress to look at the different
    aspects to help make sure that we commercialize it and take
    advantage of it here. And I am talking about the depreciation
    schedule that tends to--inflation eats up the value of that
    depreciation. But in terms of the commercialization, Mr. Theis,
    then you, Mr. Marty.
        Dr. Theis. Well, I can't comment on what changes in the tax
    laws or the accounting principles would help that effort. But I
    distinguished between companies like IBM that are large and
    established and are defending established markets and need to
    incorporate a continuing stream of incremental improvements and
    advances in the established technologies. And I think large
    companies, established companies in the United States, at least
    in information technology, are doing a good job of that. And we
    will go to the national labs, and we will go to the
    universities. And we develop the university relationships.
    Different companies do it differently, but we all have strong
    mechanisms in place to make sure that we are looking at what is
    going on and collaborating and moving this stuff out of----
        Mr. Smith of Michigan. Is there any way that you can think
    of that we can encourage the private sector to be part of that
    basic research investment? Any way we can have a win-win? Mr.
    Marty, you go ahead.
        Dr. Batt. I don't have a specific recommendation.
        Mr. Marty. I have one specific one, which I would envision
    that the whole panel here would be supportive of. I mean, the
    U.S. Patent Office is challenged right now in the
    nanotechnology area just because nano--I mean, we are all
    challenged in the nanotechnology area. So that is not a
    reflection particularly on the Office, but nanotechnology is
    moving very quickly. It is very broad, and it is very
    interdisciplinary, which means it is challenging to get your
    hands around the science as well as what the commercial
    ramifications are. To the extent that we are able to have
    faster patent movement, more clear patent movement, that allows
    the private sector to have something to invest in even before
    the commercial product is, you know, within two years. And so I
    would say one of the things that we could make sure that we
    follow-up on as a National Nanotechnology Initiative, is to
    assure that our patent office is the very best in the world
    when it comes to handling patents in the nanotechnology----
        Mr. Smith of Michigan. Give me Mr. Russell and Mr. Roberto
    just very quickly. Do we--is there some kind of an effort that
    should satisfy us that we are looking at the research that
    countries like Japan and Germany or whoever that are leading or
    challenging us in this area, do we know the kind of research
    results that they have achieved? Or is that difficult with the
    organizations?
        Mr. Russell. Two quick things. One, first getting back to
    your first question. There actually is one thing in the tax
    code that I think would be helpful, which is making the tax
    credit permanent, something the Administration supports and
    something that I know a lot of the Members of this committee--
    --
        Mr. Smith of Michigan. Yeah, but you know, you can play so
    many games with it that it is tough. But I would like to
    encourage more basic research credit, actually. But go ahead.
        Mr. Russell. Yes. The second thing is, on the patent issue,
    that is also an important issue. And actually, the Patent and
    Trademark Office has put forward a plan that is intended to
    reformulate how it does business and hopefully will speed the
    process. And that really is something that hopefully will be
    helpful.
        In terms of looking at what is happening overseas, one of
    the big complicating features there is even just the definition
    of nano. And I think you will find this with all of the numbers
    that you see. Nano can be defined as everything, because
    everything, obviously, is built on atoms. And so yes, it is
    followed. We do look at it. There are some good studies, but a
    lot of the numbers aren't apples to apples. And you have to
    keep that in mind.
        Mr. Smith of Michigan. Just a comment, Mr. Roberto.
        Dr. Roberto. Through the scientific community, we have a
    very good interaction internationally, and I think we have a
    good idea of what is going out there in basic science--going on
    out there in basic science.
        Mr. Smith of Michigan. Do you have a good idea of what is
    going on in military research complex?
        Dr. Roberto. It would depend on whether that was classified
    or not, and probably not.
        Mr. Smith of Michigan. Probably not. Mr. Honda.
        Mr. Honda. Thank you, Mr. Chairman. And I really do
    appreciate the testimony of our experts up here. A couple of
    words that I have heard that sort of takes off some thinking is
    I believe Dr. Batt had something about vacuum. And I think that
    nature hates a vacuum, so it is going to be filled by
    something. And so I really appreciated your approach and
    instruct that you focus on what nanoscale technology is all
    about. And we talk about youngsters. And I think that that is
    where we have to really start mainly because in the past when
    we talk about technology, we have always--the big battle was
    about H1B Visas. If we do it right now and do it correctly now,
    we can grow our own. But I don't think that we have to be
    concerned about foreign competition or people coming from other
    countries. Because they add a flavor and insight that we don't
    have in this country that we found that, at least in Silicon
    Valley, that the great amount of technology came from folks who
    came overseas and stayed and created jobs. So I am not fearful
    of that, either.
        What I am concerned about is we talked about having people
    at the table, presidents of universities and things like that.
    My question to the group is who is not at the table now that
    should be, because what I want to be able to do is anticipate
    unintended consequences? The only way you are going to do that
    is have folks like yourselves from different backgrounds ask
    the question, ``What if?'' And I think the new one that came up
    for me today that I haven't thought about were problems that
    could be barriers in terms of the patent office. And you know,
    how do we make that efficient? How do we make it fair so that
    there is access to some sort of economic benefit to the
    research and the creativity we have both in the private sector
    and the university?
        And I guess my other question would be, we need to find
    ways to make new ideas more public so that those folks who are
    not in that circle can also think why not this, so that we can
    expand this whole mindset even further? And you are right, I
    believe nanoscale is ubiquitous, and there isn't anywhere that
    it wouldn't be applicable. So I am very curious of--to hear the
    reaction of the panel.
        Mr. Marty. I really appreciate your comments, Congressman
    Honda. I do think that the engine of nanotechnology is the
    scientific community. There is no doubt about it. But in order
    to actually move the whole train forward, and in particular
    with respect to this bill, when we talk about, you know, who is
    going to be the outside advisory board that is going to talk
    about nanotechnology. As I suggested in my comments, I really
    think we need heavy research, no doubt about that. But we also
    need some business people, some local government officials,
    because a lot of this can be handled, you know, with regional
    sorts of initiatives, economic development experts and
    ethicists, I think, having that whole community. When you ask
    who are the people at the table, I think these are the kinds of
    people you should consider having at the table in order to
    round out nanotechnology.
        Dr. Batt. Back about two years ago with support from the
    state of New York, we established what we call the Alliance for
    Nanomedical Technologies. And when I set up my advisory panel,
    I did just that. We brought in, you know, representatives from
    the private sector at the beginning, so that we, again, were
    not this sort of pure academic institution that was going to
    sort of develop these things and then go out and shop them.
    What we found was that there were significant issues, but they
    could be addressed in terms of intellectual property, in terms
    of who owned the technology, what did the people who came to
    the table first get as an advantage. And what they got as an
    advantage was a first look at the technology that was coming
    out of this research effort.
        We didn't really bring in the--sort of the societal ethical
    issues, because I think what is not at the table right now and
    what is missing in a lot of this is really just the general
    public. I mean, the general public has no idea. We are
    developing exhibits for the science center in Ithaca. We ask
    kids, like, ``What is nano?'' And they have no idea. It is
    probably not until maybe high school where people understand
    what that scale is. And yet when you look at the general
    public, they are terrified of things they can't see. You know,
    you sort--you know, you see it in terms of bacteria and
    biowarfare agents. And now nanotechnology is even worse,
    because it is something that a bunch of guys in spooky suits
    are making some place in the deserts in New Mexico. It is not
    happening, but those are the kind of things that you get.
        And that is why I think what we are trying to do in terms
    of going out to the general public and just simply talking to
    them, which is very hard for academics to do. I mean, we are
    terrified talking to normal people. But it is something that we
    have to do. We have to show them that we are kind of like
    normal people. We just, you know, sort of sit in a lab all day,
    but more or less, we are kind of just like the rest of them.
        Mr. Honda. I--thank you for that response, but I think that
    you are correct. And that is why I think the advisory group is
    important so that we start addressing some of these questions
    that--and the best example I can think of is stem cell
    research, where all kinds of things come up in people's minds
    where it bridges or sometimes becomes a barrier, you know, in
    our beliefs and our value systems. And if we do it right at the
    beginning, we can avoid a lot of that fear and really start
    working with youngsters. Because when you go from the vacuum
    tube and the size of computers back in the 50's, when I was
    going to high school, to today, you would have never convinced
    anybody that that was possible. And yet, we are past the Dick
    Tracy era now. And I think that it can be wild and fun, but I
    don't want it to be scary for folks. And we can really control
    this kind of----
        Chairman Boehlert. Thank you very much. The gentleman's
    time has expired. Mrs. Biggert.
        Mrs. Biggert. Thank you, Mr. Chairman. Just briefly, Mr.
    Marty, you mentioned in your testimony that at the group of the
    various countries that were together with their products, so to
    speak, that so many of what they had presented was based on our
    intellectual property. Did you mean that we had given that to
    them or was this something that had become available by other
    means?
        Mr. Marty. No, I only reflected that a lot of this basic
    research had been initiated here. I was not meaning to reflect
    anything illegal. It is just within the world of basic science,
    if things aren't patented, I mean, information flows pretty
    broadly. So----
        Mrs. Biggert. I just wanted to clarify that that it is--
    having been in China recently and seen a lot of our goods over
    there that were questionable. My question then for the panel is
    how will the flat--or what I might call inadequate or disparate
    funding levels for research in the physical sciences
    adversely--will this adversely affect our ability to realize
    the promise of nanotechnology? Whoever would like to answer
    this----
        Mr. Marty. Well, it certainly has an effect. I would say
    that one of the good things about the NNI is that it has
    resulted in some increases in funding for the physical
    sciences. And it has resulted in a significant shift of
    resources from areas that are a little less exciting and less
    interesting to this area, which is very exciting and
    interesting. So it has had a desirable effect.
        Of course, the history, as I believe you know, is that
    funding in the physical sciences has been flat as a fraction
    of--or actually trending downward for a very--as a fraction of
    total funding for quite a long time. And it is certainly not
    something we want to continue, because if you look at all of
    the basic science that supports, you know, silicon
    microelectronics, our existing information technology, that
    basic science was done in the 1930's and the 1940's. And so
    there is this long lead time between doing the basic research
    and getting the tremendous economic benefits that we know flow
    from basic research. So we need to make the investments now for
    the next 20 years.
        Mrs. Biggert. Well, what we have seen is with NIH. We have
    doubled the funding in five years for that with NSF. The same
    as that we are proceeding to do that, so that it seems to me
    that we are, you know, losing parity with the physical sciences
    to keep up with those other two.
        Mr. Marty. Well, I could amplify that by saying that there
    is a tremendous role for the physical sciences to play in
    health science and in life sciences. And that is all the
    instrumentation and all of the mechanisms by which the studies
    of biology, the human body, and so forth are done and by--and
    the instruments, which support medicine. And that does come
    from the physical sciences. So we don't want to get this--and
    in fact, NIH has now, because they have a good funding
    situation, they have directed some of that funding in the
    direction of instrumentation, and some of it is in the
    direction of nanotechnology. So some of that funding is going
    into the overall thrust.
        Mrs. Biggert. Thank you. Mr. Russell.
        Mr. Russell. Yeah. No, on those two points, I think that
    they are being made well. Two things. One is with respect to
    NNI, one of the strengths of the program is that it is an
    interagency program that captures not just the leading physical
    science funders, such as NSF, but also NIH, also DOD. As a
    matter of fact, one of the recommendations of the NRC report is
    to actually have NIH even participate more in the program. And
    that is something that we are very supportive of. And so I
    think it is a great model of how we can take a basic science
    and rope in all of the relevant agencies, because as was
    pointed out, NIH relies on the physical sciences. And actually,
    it also funds the physical sciences, if you look over time. I
    think the last time I looked at it, about a billion dollars of
    NIH's money was going to chemistry and physics-related
    research. But I think clearly that NNI is a great example, and
    I think that is one of the reasons why it not only has so much
    support, it is also receiving substantial increases in budget.
        Mrs. Biggert. And we are talking about so much--well,
    really for nanotechnology to flourish, we are going to need new
    skills in this field and in engineering. And are we going to
    have the next generation of scientists and engineers to be
    educated and trained in this field? Probably Dr. Batt or Dr.
    Theis.
        Dr. Theis. Well, let me just say that it is my hope. I
    mean, you know, science, as a profession, is not looked at very
    favorably by the vast majority of young people. They don't
    understand what we do. They don't understand what the benefits
    are. They can turn on cable TV and see basketball players and
    all of these rock stars and all of this other stuff. I am not
    advocating a cable channel devoted to science, because I don't
    think that is appropriate. But I think we have to sort of have
    these kids understand that there are exciting opportunities
    there and hopefully give them that sort of peek of what it is
    all about in a very sort of fun way.
        Everything we do is fun. That is what we try to go out
    there and convince these kids that it is kind of fun. And yes,
    there is some hard work behind that, but it is not just hard
    work, that there are really some interesting things.
        To go back to what you were talking about as far as, you
    know, the sort of physical sciences, one of the things that we
    discovered that--in developing the center is that the really
    intriguing questions in science are in biology. And yet the
    really intriguing tools to answer those probably lie in the
    physical sciences. And it is only in--probably in the last
    couple of years that the physical sciences have developed
    enough instrumentation to really probe these very complex
    biological questions. And how you sort of bring those groups
    together is a very interesting problem.
        Chairman Boehlert. The gentlelady's time has expired. Mr.
    Bell.
        Mr. Bell. Thank you, Mr. Chairman. First, I would like to
    thank all of you for your presentations here today. I would
    agree with those who believe that nanotechnology is the present
    as well as the future, and it is extraordinarily important in
    my district. Dr. Batt, you probably know that we have an NSF-
    funded nanotechnology center in my district, Rice University,
    that is working very hard, so I certainly realize the
    invaluable work that folks, such as yourselves, are doing. And
    I also appreciate Dr. Russell including in his statement the
    cutting edge work of Dr. Richard Smalley, who I have had a
    chance to visit with here recently. And for those of you who
    don't know, Dr. Smalley is the Rice Nobel Laureate, who, for
    those with a less scientific background, is also known as ``the
    Buckey Ball guy.''
        And I--we have--Dr. Batt, you pointed out what--in your
    presentation, what nanotechnology is not, but I guess what is
    also sort of fascinating about it that it is so many things.
    And whether medicine, engineering, computing, it can have a
    huge impact on all of those areas, but one area we really
    haven't touched on very much here today is energy. And you
    know, when Dr. Smalley gives talks about this subject, he talks
    about how nanotechnology could really change the world in which
    we live when it comes to energy. And I am curious as to whether
    you all think this legislation takes into account the
    importance of nanotechnology's energy applications. And Dr.
    Batt, I will just start with you.
        Dr. Batt. Well, first of all, I am well aware of the
    program at Rice. They do a lot of things very, very well. And
    Smalley there, is a pioneer. There is absolutely no doubt. And
    I am really surprised how small Rice really is as a university.
    It is really not large, and yet they have made a very large
    impact in a very small field.
        As far as energy is concerned, we look at energy in two
    forms. One is that there are a lot of interest in how do you
    power these devices. You know, we can sort of look at these and
    design these very small-scale things that move, and yet when it
    comes to them powering these things, it is an intangible
    problem. A colleague of mine, Amit Lal at Cornell University,
    is developing very, very small batteries that take advantage of
    the properties of radioactive material. And these are very low-
    level energy radioactive materials, and he is actually
    developing batteries that are on the size scale of the types of
    devices that we are trying to develop.
        The only area that is really intriguing is biological
    energy. Obviously, we are full of billions of cells that all
    fuel themselves and all have energy, and yet we don't walk
    around with 50-pound batteries on our backs that, integrated
    into biological systems, is really not only a system to sort of
    utilize energy, but also to generate them. And yet we
    understand a little bit about that, but again, we don't
    understand it as a fundamental basis. And we don't understand
    how we then take that fundamental knowledge in biology and
    really convert that into something which we can practically
    harness in terms of developing these sort of nanoscopic
    materials.
        Dr. Roberto. I would like to add that looking more broadly
    at energy, there are tremendous impacts of nanoscience that--
    you can think of fuel cell materials. You can think of
    catalysis for the hydrogen economy or for other applications.
    That is a $30 billion or more industry. You can talk about
    advances in using photosynthesis. You can talk about high-
    temperature materials, and there are a number of applications
    where you can improve the properties of materials and make them
    perform better at the high temperatures that you need to get
    energy efficiency, also lightweight materials for vehicles. And
    so there are tremendous opportunities that we see in energy and
    energy independence that can come from nanoscience.
        Mr. Bell. Does anyone else have any thoughts on how the
    legislation addresses the energy application? Mr. Russell.
        Mr. Russell. Yeah, I was going to say I had the pleasure,
    actually, of participating with Dr. Smalley on a panel that
    briefed PCAST before it took on the assignment of looking at
    nanotechnology and the NNI program. And actually, PCAST has set
    up one of the three areas it is going to look at. It is
    actually segmenting itself into three sort of task forces. One
    of them is energy and environment. And that is going to be co-
    chaired by Charles Vest. And so as this relates to the advisory
    functions that are recommended by the legislation, I think that
    is going to be an important component. It is one of the reasons
    why we are so gung ho on having PCAST perform those advisory
    functions is because they, I think, have targeted the right
    issues, and energy is one of them.
        Mr. Bell. Thank you, Mr. Chairman.
        Chairman Boehlert. Thank you, Mr. Bell. We are going to
    have the folks from Rice up in our early April hearing, so we
    very much look forward to that. Dr. Gingrey.
        Dr. Gingrey. Thank you, Mr. Chairman. Not to be outdone by
    my colleague, the gentleman from Texas, I would like to put in
    a plug for the outstanding work that is being done at my Alma
    Mater, the Georgia Institute of Technology in regard to
    nanotechnology as well.
        I wanted to ask--I am going to direct this question, Dr.
    Batt, to you and also to Mr. Marty. In light of the recent bill
    that we passed in the House banning human cloning for both
    reproductive--reproduction and research, some individuals in
    groups have suggested that nanotechnology developments may
    raise societal and ethical concerns. Is any part of your
    center's activity at Cornell devoted to addressing such
    concerns? And then I will ask Mr. Marty the same question in
    regard to your investment choices.
        Dr. Batt. To--as I said, we haven't addressed that issue
    sort of head-on. We get a lot of interest from people who I
    would argue on the fringes of their knowledge of
    nanotechnology. I was interviewed by a high school student who
    basically asked the question, ``Was nanotechnology going to
    lead to the demise of civilization as we know it?'' And I said,
    ``No, it is not.'' Until we sort of really sort of broaden the
    sort of education base of the general public, then the
    arguments are simply between sort of academic scientists on one
    end and sort of the--what I again would call the fringe element
    at the other end. And that is really not a very productive
    discussion at this point in time, because it sort of argues
    what their knowledge of nanotechnology is, which is the sort of
    black helicopter sort of floating through your bloodstream and
    sort of changing your personality versus what we know to be as
    the very core fundamental limitations and what we can do right
    now. And what lies in between is sometimes not a very
    productive discussion, because I will try to tell them that I
    can't imagine why you would want to do that. And they will say,
    well, because of these unknown elements out there that really
    want to promote that. What is lying in between is the general
    public that we have to sort of really embrace and begin to have
    them understand what is nanotechnology, what are things they
    can't see, what is this area all about, how is this going to
    benefit me at a really very early stage.
        I mean, the classic error that was made was with, as we now
    know as being in error, with genetically modified organisms.
    The industries that were involved in it really didn't think it
    was important for them to sort of articulate what they were
    doing to the general public. Then what happens is there is this
    backlash, and now you have to sort of go back, deal with the
    backlash, and then deal with what is people's fundamental
    misconceptions about what is going on.
        So we, as a center, haven't really done that probably as
    much as we should, but largely because those discussions tend
    to be very, again, on two ends of the spectrum without the
    great middle being involved in that. And the great middle is
    really what we try to do, which is to educate the general
    public as to what nanotechnology is all about.
        Dr. Gingrey. And Mr. Marty.
        Mr. Marty. Yeah. Great comments. You know, as VC investors,
    you know, I guess speaking for myself in particular, I mean,
    what we try to do is understand, you know, what is--if you can
    paint a scenario that says, ``This is possible that this could
    happen,'' then you think about it. And you think about what the
    ramifications are, both as an investment--investor and as a
    citizen. And so for a lot of the things that we work on and
    everything we have invested in to date, you know, textiles and
    displays and, you know, computers, I mean, there is really no
    ethical ramifications that we can even come up with. Now as
    we--as you look down the road and we hear about some of the
    scenarios that, you know, I labeled kind of well-read fiction,
    my challenge with dealing with those intellectually is I can
    not come up with a scenario where that can become real. And so
    I kind of don't spend much time thinking about those things,
    although I get those comments from people: ``Well, aren't you
    worried about this? Aren't you worried about that?'' Unless I
    can scientifically come up with a scenario where that could, in
    fact, become reality, I really don't know how to deal with it.
    I don't know how to think about that scenario.
        So I do think it is important in this bill that we continue
    anything that is new is going to have some impact on society.
    And it is going to have some impact--you know, we want to have
    society kind of involved in the conversation, and we want to be
    thinking about these things proactively. But most of what has
    hit the press and most of the ethical things that have kind of
    come to me to date, I haven't been able to paint a scenario
    where they can scientifically become real. So they have not
    gotten my mind share to date.
        Dr. Gingrey. There is so much misinformation out there on
    the Internet, as you all know. And of course, I think the
    educational program, Dr. Batt, that you are taking on the road,
    is exactly the way to approach it so that knowledge is
    understanding of this technology. Thank you.
        Chairman Boehlert. Thank you very much. And I want to thank
    all of our witnesses for being resources for the Committee. We
    really appreciate you sharing your time and your thoughts and
    your expertise with us. We are working together in common cause
    for something that is very important to our future. So thank
    you very much. Now we may have some additional questions that
    we would submit in writing, and we would ask, if we do that,
    that you try to be timely in your response to give us the
    benefit of your thinking. Thank you so much. The meeting is
    adjourned.
        [Whereupon, at 11:56 a.m., the Committee was adjourned.]
                                  Appendix 1:

                                  ----------

                       Answers to Post-Hearing Questions

                       Answers to Post-Hearing Questions
    Responses by Richard M. Russell, Associate Director for Technology,
            Office of Science and Technology Policy

    Question submitted by Chairman Sherwood Boehlert

    Q1. You mention in your testimony that the Department of Homeland
    Security (DHS) is part of the interagency nanotechnology initiative.
    Can you tell us how much of the DHS budget is being devoted to that and
    what the nature of DHS participation will be?

    A1. The President's FY 2004 Budget identified $2 million for
    nanotechnology efforts at the Department of Homeland Security (DHS).
    These efforts represent ongoing investments within the Transportation
    Security Administration for technologies to assist in explosives
    detection and other advanced transportation security systems.

    Questions submitted by Ranking Member Ralph M. Hall

    Q1. The National Research Council committee that reviewed the National
    Nanotechnology Initiative criticized the initiative for too little
    information sharing among the agencies during program planning and
    execution and for a lack of willingness by the participating agencies
    to co-fund large research programs. What is your response to these
    criticisms? Since OSTP has broad responsibility for coordinating the
    major interagency research initiatives, how do you intend to address
    these findings of the NRC committee?

    A1. OSTP is keenly interested in ensuring that the NNI represents a
    highly coordinated interagency activity. Towards this end, OSTP has
    initiated activities aimed at increasing the degree of coordination
    between the agencies that participate in the program. These include a
    principals-level meeting convened by OSTP Director John Marburger,
    which has resulted in an increased commitment to significant
    interagency coordination between the Department of Energy's (DOE'S)
    Office of Science, the National Science Foundation (NSF), and the
    National Institutes of Health (NIH). In addition, the restructuring of
    the current National Science and Technology Council's Nanoscale
    Science, Engineering, and Technology (NSET) subcommittee into an
    interagency working group, with a reconstituted subcommittee made up of
    higher level agency officials, will enable enhanced coordination and
    priority setting. Similarly, the role of the National Nanotechnology
    Coordination Office (NNCO), which assists NSET-participating agencies
    in their activities and serves as the secretariat for the NNI, has been
    strengthened by the hiring of a full-time director to run that office.
    All of these efforts are aimed at increasing the extent of interagency
    coordination within the NNI.
        In addition, the NRC committee's report, in addressing the issue of
    interdisciplinary, cross-agency research, suggested the creation of a
    nanotechnology advisory panel that ``would be capable of identifying
    research opportunities that do not fit within any single agency's
    mission,'' and ``should be composed of leaders from a broad
    representation of industry and academia. . .leaders with scientific,
    technical, social science, or research management credentials relevant
    to advances in nanoscale science and technology.'' The President's
    Council of Advisors on Science and Technology (PCAST), whose members
    encompass this range of experience and backgrounds, has begun a review
    of the NNI and, in particular, will help identify new Grand Challenges
    that will help guide the program. Issues related to interagency
    coordination surfaced at PCAST's March 3 meeting, at which the
    nanotechnology review was discussed, and are likely to be an area of
    further examination.

    Q2. The budget justification for the President's FY 2004 budget
    request for the National Nanotechnology Initiative states, ``This
    research could lead to. . .accelerated biotechnical applications in
    medicine, health care, and agriculture.'' Similarly, the National
    Research Council committee that reviewed the National Nanotechnology
    Initiative suggests that the impact of nanotechnology on medicine and
    health care will be great and that, consequently, NIH should be a major
    player in the initiative. Yet, despite all the promise of
    nanotechnology for applications related to disease diagnosis and drug
    delivery, NIH is proposing to allocate only $70 million to the $850
    million nanotechnology initiative out of the agency's $28 billion FY
    2004 budget request. Can you explain why NIH has such relatively little
    interest and commitment to the initiative, particularly in light of the
    tasking memo from OMB and OSTP to the agencies that identified
    nanoscale science and technology as one of the highest R&D priorities
    of the Administration?

    A2. NIH's commitment to biomedical research and development at the
    nanoscale, and to related interagency collaboration, is very strong. In
    fact, NIH's investment in nanotechnology research has tripled over the
    last four years, and NIH Director Elias Zerhouni stated in a recent
    letter to members of the Senate, ``I have made nanoscale biomedical
    research at the NIH a personal priority, my staff have included the
    area in our `roadmapping' efforts to plan future research directions,
    and we plan to proactively pursue opportunities in nanoscale biomedical
    research in support of our mission and national health care
    priorities.''
        NIH's organization comprises 27 institutes, each of which
    administers its own research and grant programs based on its unique
    mission, presents challenges for funding research in a
    multidisciplinary field such as nanotechnology. To address these
    challenges, NIH has created a mechanism for dealing with cross-cutting
    issues, the Bioengineering Consortium (BECON), which consists of
    senior-level representatives from all of the NIH institutes, centers,
    and divisions plus representatives of other federal agencies concerned
    with biomedical research and development. BECON is able to facilitate
    requests for and reviews of grant proposals for research areas that cut
    across different institutes at NIH. BECON recently issued a Program
    Announcement specifically aimed at enhancing nanoscience and
    nanotechnology research approaches that have the potential to make
    valuable contributions to biology and medicine. In addition, NIH
    started the Bioengineering Nanotechnology Initiative to partner with
    the small business community.
        NIH's most recent call for projects, ``Nanoscience and
    Nanotechnology in Biology and Medicine'' is targeted at high risk, high
    impact exploratory and developmental projects based upon
    nanotechnology. Recent solicitations from several institutes have
    focused on using nanotechnology to develop improved imaging contrast
    agents for the diagnosis of disease, systems for targeted drug delivery
    and tissue replacement, tools for studying the basic functioning of
    living cells and their constituent proteins, and completely novel ways
    to sequence DNA.
        NIH representatives, through the Nanoscale Science and Engineering
    Technology (NSET) interagency working group, are preparing a workshop
    aimed at identifying future research directions for nano-biotechnology.
    This workshop will communicate the concepts and recent discoveries from
    the physical science and engineering communities to members of the
    biomedical community, identifying key areas for the formation of new
    interdisciplinary research partnerships.

    Q3. What portion of the proposed FY 2004 funding for the National
    Nanotechnology Initiative will be directed to instrumentation
    development, and will the responsibility for such activities be across
    several agencies or concentrated at DOE?

    A3. Research and development of instrumentation and metrology form one
    of the nine grand challenges currently identified by the NSET. Roughly
    three percent of the FY 2003 request was allocated to instrumentation
    and metrology, with the bulk of the research effort focused at NIST.
    The investment in scientific instruments and tools will increase in FY
    2004 and expand to several agencies, including NSF, the Department of
    Defense, and DOE. In addition, NIH also funds the development of new
    tools to measure various cellular and sub-cellular functions.

    Q4. Does the National Nanotechnology Initiative place sufficient
    emphasis on the transition of research results to commercial
    developments? You noted in your testimony that the initiative is ``a
    critical link between high-risk, novel research concepts and new
    technologies that can be developed by industry.'' Please describe how
    the initiative provides this linkage and explain what kinds of
    mechanisms under federally sponsor research programs are appropriate
    for encouraging and supporting technology transfer to industry?

    A4. Issues of technology transfer are not unique to nanotechnology.
    Ensuring that research and development activities funded by the Federal
    Government are effectively transferred to the private sector is an
    issue that is relevant to virtually all areas of science and
    technology. Recognizing this, PCAST recently completed a study on
    technology transfer. Their report is currently in the final stages of
    preparation and will be released shortly.
        The NNI continues to invest in the construction of central user
    facilities that serve as a nexus for innovation and outreach. Over the
    past five years NSF has developed a National Nanofabrication Users
    Network (NNUN), which provides centralized user facilities for
    academia, industry and national laboratories. These centers provide
    nanofabrication and characterization facilities for a fee much smaller
    than the cost of developing and maintaining unique facilities. To
    complement and expand the user center network, DOE is constructing five
    new centralized facilities associated with particular DOE Laboratories.
    The DOE centers will also offer peer-reviewed access to fabrication,
    testing and characterization facilities, and will do so at no charge to
    users doing non-proprietary research. These user facilities allow
    companies to experiment with high-risk, high-payoff nanotechnologies
    without the burden of sometimes significant capital investments and
    will foster industrial collaborations with academic and national
    laboratory researchers.

                       Answers to Post-Hearing Questions

    Responses by Alan Marty, Executive-in-Residence, JP Morgan Partners

    Questions submitted by Representative Ralph M. Hall

    Q1. You cited the Bayh-Dole Act in your testimony as being a well-
    written piece of legislation, but indicate that its implementation is
    stalling the technology transfer process. Could you give us some
    examples of what you mean, and suggest how we could improve the
    implementation process?

    A1. The Bayh-Dole Act is a well written piece of legislation.
    Unfortunately its implementation has been lacking. The Harvard Business
    Review noted that more than $1 trillion annually is wasted in patent
    assets--when one considers both corporate and university operations. An
    entire pillar of the economy goes wasted every year.
        According to the Association of University Technology Managers,
    North American universities last year spent approximately $29.5 billion
    on research which resulted in approximately 13,032 new invention
    disclosures. Approximately 75 percent of these new technologies go
    unlicensed. Of the more than 3,000 universities actively involved in
    tech transfer less than 10 make a profit. That is a painful statistic
    indeed.
        While universities can argue that their impact on the economy
    through research is a well trained workforce, this is still no excuse
    for the lack of commercialization. The NanoBusiness Alliance from
    speaking to numerous corporate and university members have found a
    range of problems.

            1. The Home Run: Most universities make the majority of their
            income from a single transferred patent, hence they are always
            trying to find the next big one instead of managing and
            effectively marketing a layered portfolio. Also this quest for
            a home run creates a great deal of fear--fear of not
            negotiating a high enough percentage of a transfer deal that
            will lead to scrutiny later. Hence they often transfer nothing
            for fear of being called to the mat for cutting a bad deal.

            2. Business Dynamics: Universities for all of our calls to act
            more like a business do have some reasonable restraints on
            acting like a corporation. Businesses fail to notice this and
            hence negotiate as if they are dealing with someone in the same
            industry. Hence there is a failure to communicate the business
            dynamics properly.

            3. Limitations on Collaboration: Many U.S. government grants
            to universities provide no benefit for corporations to
            collaborate with universities in terms of tech transfer
            creating a disincentive to work with U.S. schools.

            4. Marketing Budgets: Universities fail to understand they
            need to aggressively market their technology portfolios. The
            U.S. government labs have been far more aggressive at attending
            trade shows, providing information on their websites and in
            helping their researchers and staff understand business
            dynamics.

            5. Skill Set: University employees are often not equipped or
            incentivized to be entrepreneurial and fundamentally don't
            understand the dynamics of business. Many schools would be
            better served contracting out managing their efforts to private
            firms.

        This failing must be corrected soon. I have heard one leading U.S.
    corporation note they would rather work with the less expensive and
    easier to negotiate schools in China, India, Russia, and EU than U.S.
    schools.
        To improve the system what is needed is not so much a major
    rewriting of Bayh-Dole, but a framework for more successfully
    implementing it and a network to share best practices. In addition:

            We need to ensure labs have the resources and motivations to
            prioritize tech transfer. Despite mission statements that tout
            tech transfer as a priority, many labs fail to direct
            resources--either capital or people with industry expertise or
            both--to fund effective collaborative efforts.

            We need to better understand the impact of licensing activity
            on University research. Bayh-Dole has clearly had enormous
            benefits for our universities, facilitating commercialization
            of innovations and encouraging partnership outside the ivy
            towers. It has helped research universities emerge as real
            drivers of regional economic growth. We need to better
            understand the impact of increased university emphasis on
            licensing opportunities--on the mix of basic and applied
            research, on dissemination and sharing of knowledge, and on
            industries' willingness to partner with universities.

            We need to train and create entrepreneurial and business savvy
            professors, graduate students and tech transfer staff and
            provide a system to rate and incentivize their performance.

    Q2. You called in your testimony for development of the real numbers
    and benchmarks for the size and projected growth of the nanotechnology
    field and its economic benefits. What would be some of the difficulties
    to developing these benchmarks and who should be responsible for this
    carrying out of this work?

    A2. Real Numbers: The greatest difficulty in developing real numbers
    for the nanotech field has much to do with the size and scope of the
    field.
        Nanotechnology will have an effect on nearly every industry in much
    the same way that the internal combustion engine, harnessed electricity
    and the transistor did on existing industries. Determining the value of
    ``nano'' developments prove incredibly difficult and accurately
    arriving at numbers is indeed the stuff of leading economists.
        Current estimates on the size of today's nanotech field range from
    $1 billion to $350 billion depending on the criteria.
        Long-term estimates of industry size as developed by NSF ($1
    trillion market in 13 years) are not based on accepted economic
    methodology. Industry leaders--mostly the R&D professionals of
    companies--were polled and the numbers were simply added up at the end.
    It could be correct, but it would have more to do with luck than
    science.
        Not having simple numbers and agreed upon criteria make it
    difficult to gauge growth and performance. It also makes the ability to
    judge competitive threats and the value of investments abroad all the
    more difficult. Before starting studies on using nanotech as a means of
    economic development or putting in place surveys on sector growth or
    gauging foreign competition, we need accepted and agreed upon numbers
    and baselines.
        The Department of Commerce Office of Technology Policy would likely
    be the most capable office at developing accurate and timely numbers,
    drawing on the resources of industry and the other agencies involved in
    the NNI.

                                  Appendix 2:

                                  ----------

                       Additional Material for the Record

           President's Council of Advisors on Science and Technology

                            NANOTECHNOLOGY WORK PLAN

                                 March 3, 2003
        PCAST's nanotechnology efforts will be conducted at the full
    committee level as an ongoing, long-term activity. Task forces will be
    formed as needed to investigate particular topic areas.

    Initial Primary Objectives

        PCAST will conduct a comprehensive review of the federal
    nanotechnology effort including the extent to which it successfully
    links to the needs of the private sector, its importance to economic
    competitiveness, and what results can fairly be expected (short-term
    and long-term). The Administration's management objectives, as well as
    the National Research Council's (NRC's) recommendations, suggest two
    primary objectives for PCAST to achieve. While additional goals and
    objectives exist and PCAST will address other NRC concerns over time,
    PCAST can initially assist in:

            1. Developing a compelling set of ``Grand Challenges'' to
            focus the research effort on key scientific/technological
            challenges (including a review of the NNI program's existing
            grand challenges); and

            2. Developing a crisp, compelling overarching Strategic Plan
            to set the general direction of the Federal Government program
            and to guide the development of detailed research plans.

        In order to achieve these objectives, PCAST will work with the
    National Science and Technology Council's (NSTC's) Nanoscale Science,
    Engineering and Technology INSET) Subcommittee, as well as the National
    Nanotechnology Coordination Office.

    Initial PCAST Task Forces

        PCAST will initially form three Task Forces among its members to
    explore particular topic areas:

    Technical Expertise

        PCAST will form a ``Technical Task Force'' of outside (non-
    government) technical experts to assist PCAST in its review of the NNI
    program. The Technical Task Force will be comprised of scientists who
    are on the forefront of the various fields of nanotechnology research.
    The types of expertise represented might include: materials science;
    bio/life sciences; energy; electronics/photonics; and molecular motors.

    Additional Outreach

        PCAST will also outreach and consult with Congress, interested
    businesses, scientists, institutions (e.g., universities), trade
    associations, state and local government representatives, and other
    parties with an interest or relevant experience (such as the Director
    of the National Coordination Office for the NSTC's Networking and
    Information Technology R&D program).

    Additional Topics

        After addressing the two primary objectives listed above, and in
    addition to its ongoing review of the federal nanotechnology effort,
    PCAST will explore a wide variety of topics relating to nanotechnology
    and its potential benefits to the American public and the U.S. economy.
    Such topics may include the identification of metrics for measuring
    progress (and applying these metrics to continually assess program
    progress); social and ethical considerations of nanotechnology;
    technology transfer issues and mechanisms; and comparisons of the U.S.
    program with international programs (in terms of both effort and
    results).

    Initial Timelines

             Late Summer 2003--Primary Objectives--a set of
            recommendations on Grand Challenges and Strategic Goals to
            inform the formation of the FY 2005 budget for NNI (not
            budgetary levels but how the money is spent).

             Early 2004--NNI Program Review--a presentation from
            NNI on its FY 2005 budget and the achievement of the
            recommended objectives.

             Summer 2004--Report on Metrics, and decide on new
            topic area(s).

             When warranted, issue additional recommendations and
            follow-up reports.

    108th CONGRESS
        1st Session

                                    H. R. 766

    To provide for a National Nanotechnology Research and Development
        Program, and for other purposes.

                                   __________

                        IN THE HOUSE OF REPRESENTATIVES

                               February 13, 2003

    Mr. Boehlert (for himself, Mr. Honda, Mr. Ehlers, Mr. Hall, Mr. Smith
        of Michigan, Mr. Gordon, Mrs. Biggert, Ms. Eddie Bernice Johnson of
        Texas, Mr. Bartlett of Maryland, Ms. Lofgren, Mr. Gutknecht, and
        Mr. Bishop of New York) introduced the following bill; which was
        referred to the Committee on Science
                                   __________

                                     A BILL

    To provide for a National Nanotechnology Research and Development
        Program, and for other purposes.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Nanotechnology Research and
    Development Act of 2003''.

    SEC. 2. DEFINITIONS.

         In this Act--
                (1) the term ``advanced technology user facility'' means a
            nanotechnology research and development facility supported, in
            whole or in part, by Federal funds that is open to all United
            States researchers on a competitive, merit-reviewed basis;
                (2) the term ``Advisory Committee'' means the advisory
            committee established under section 5;
                (3) the term ``Director'' means the Director of the Office
            of Science and Technology Policy;
                (4) the term ``Interagency Committee'' means the
            interagency committee established under section 3(c);
                (5) the term ``nanotechnology'' means science and
            engineering aimed at creating materials, devices, and systems
            at the atomic and molecular level;
                (6) the term ``Program'' means the National Nanotechnology
            Research and Development Program described in section 3; and
                (7) the term ``program component area'' means a major
            subject area established under section 3(c)(2) under which is
            grouped related individual projects and activities carried out
            under the Program.

    SEC. 3. NATIONAL NANOTECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM.

        (a) In General.--The President shall implement a National
    Nanotechnology Research and Development Program to promote Federal
    nanotechnology research, development, demonstration, education,
    technology transfer, and commercial application activities as necessary
    to ensure continued United States leadership in nanotechnology research
    and development and to ensure effective coordination of nanotechnology
    research and development across Federal agencies and across scientific
    and engineering disciplines.
        (b) Program Activities.--The activities of the Program shall be
    designed to--
                (1) provide sustained support for nanotechnology research
            and development through--
                        (A) grants to individual investigators and
                    interdisciplinary teams of investigators; and
                        (B) establishment of interdisciplinary research
                    centers and advanced technology user facilities;
                (2) ensure that solicitation and evaluation of proposals
            under the Program encourage interdisciplinary research;
                (3) expand education and training of undergraduate and
            graduate students in interdisciplinary nanotechnology science
            and engineering;
                (4) accelerate the commercial application of nanotechnology
            innovations in the private sector; and
                (5) ensure that societal and ethical concerns will be
            addressed as the technology is developed by--
                        (A) establishing a research program to identify
                    societal and ethical concerns related to
                    nanotechnology, and ensuring that the results of such
                    research are widely disseminated; and
                        (B) integrating, insofar as possible, research on
                    societal and ethical concerns with nanotechnology
                    research and development.
        (c) Interagency Committee.--The President shall establish or
    designate an interagency committee on nanotechnology research and
    development, chaired by the Director, which shall include
    representatives from the National Science Foundation, the Department of
    Energy, the National Aeronautics and Space Administration, the National
    Institute of Standards and Technology, the Environmental Protection
    Agency, and any other agency that the President may designate. The
    Interagency Committee, which shall also include a representative from
    the Office of Management and Budget, shall oversee the planning,
    management, and coordination of the Program. The Interagency Committee
    shall--
                (1) establish goals and priorities for the Program;
                (2) establish program component areas, with specific
            priorities and technical goals, that reflect the goals and
            priorities established for the Program;
                (3) develop, within 6 months after the date of enactment of
            this Act, and update annually, a strategic plan to meet the
            goals and priorities established under paragraph (1) and to
            guide the activities of the program component areas established
            under paragraph (2);
                (4) consult with academic, State, industry, and other
            appropriate groups conducting research on and using
            nanotechnology, and the Advisory Committee; and
                (5) propose a coordinated interagency budget for the
            Program that will ensure the maintenance of a balanced
            nanotechnology research portfolio and ensure that each agency
            and each program component area is allocated the level of
            funding required to meet the goals and priorities established
            for the Program.

    SEC. 4. ANNUAL REPORT.

        The Director shall prepare an annual report, to be submitted to the
    Committee on Science of the House of Representatives and the Committee
    on Commerce, Science, and Transportation of the Senate at the time of
    the President's budget request to Congress, that includes--
                (1) the Program budget, for the current fiscal year, for
            each agency that participates in the Program and for each
            program component area;
                (2) the proposed Program budget, for the next fiscal year,
            for each agency that participates in the Program and for each
            program component area;
                (3) an analysis of the progress made toward achieving the
            goals and priorities established for the Program; and
                (4) an analysis of the extent to which the Program has
            incorporated the recommendations of the Advisory Committee.

    SEC. 5. ADVISORY COMMITTEE.

        (a) In General.--The President shall establish an advisory
    committee on nanotechnology consisting of non-Federal members,
    including representatives of research and academic institutions and
    industry, who are qualified to provide advice and information on
    nanotechnology research, development, demonstration, education,
    technology transfer, commercial application, and societal and ethical
    concerns. The recommendations of the Advisory Committee shall be
    considered by Federal agencies in implementing the Program.
        (b) Assessment.--The Advisory Committee shall assess--
                (1) trends and developments in nanotechnology science and
            engineering;
                (2) progress made in implementing the Program;
                (3) the need to revise the Program;
                (4) the balance among the components of the Program,
            including funding levels for the program component areas;
                (5) whether the program component areas, priorities, and
            technical goals developed by the Interagency Committee are
            helping to maintain United States leadership in nanotechnology;
                (6) the management, coordination, implementation, and
            activities of the Program; and
                (7) whether societal and ethical concerns are adequately
            addressed by the Program.
        (c) Reports.--The Advisory Committee shall report not less
    frequently than once every 2 fiscal years to the President and to the
    Committee on Science of the House of Representatives and the Committee
    on Commerce, Science, and Transportation of the Senate on its findings
    of the assessment carried out under subsection (b), its recommendations
    for ways to improve the Program, and the concerns assessed under
    subsection (b)(7). The first report shall be due within 1 year after
    the date of enactment of this Act.
        (d) Federal Advisory Committee Act Application.--Section 14 of the
    Federal Advisory Committee Act shall not apply to the Advisory
    Committee.

    SEC. 6. NATIONAL NANOTECHNOLOGY COORDINATION OFFICE.

        The President shall establish a National Nanotechnology
    Coordination Office, with full-time staff, which shall--
                (1) provide technical and administrative support to the
            Interagency Committee and the Advisory Committee;
                (2) serve as a point of contact on Federal nanotechnology
            activities for government organizations, academia, industry,
            professional societies, and others to exchange technical and
            programmatic information; and
                (3) conduct public outreach, including dissemination of
            findings and recommendations of the Interagency Committee and
            the Advisory Committee, as appropriate.

    SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

        (a) National Science Foundation.--There are authorized to be
    appropriated to the National Science Foundation for carrying out this
    Act--
                (1) $350,000,000 for fiscal year 2004;
                (2) $385,000,000 for fiscal year 2005; and
                (3) $424,000,000 for fiscal year 2006.
        (b) Department of Energy.--There are authorized to be appropriated
    to the Secretary of Energy for carrying out this Act--
                (1) $197,000,000 for fiscal year 2004;
                (2) $217,000,000 for fiscal year 2005; and
                (3) $239,000,000 for fiscal year 2006.
        (c) National Aeronautics and Space Administration.--There are
    authorized to be appropriated to the National Aeronautics and Space
    Administration for carrying out this Act--
                (1) $31,000,000 for fiscal year 2004;
                (2) $34,000,000 for fiscal year 2005; and
                (3) $37,000,000 for fiscal year 2006.
        (d) National Institute of Standards and Technology.--There are
    authorized to be appropriated to the National Institute of Standards
    and Technology for carrying out this Act--
                (1) $62,000,000 for fiscal year 2004;
                (2) $68,000,000 for fiscal year 2005; and
                (3) $75,000,000 for fiscal year 2006.
        (e) Environmental Protection Agency.--There are authorized to be
    appropriated to the Environmental Protection Agency for carrying out
    this Act--
                (1) $5,000,000 for fiscal year 2004;
                (2) $5,500,000 for fiscal year 2005; and
                (3) $6,000,000 for fiscal year 2006.

    SEC. 8. EXTERNAL REVIEW OF THE NATIONAL NANOTECHNOLOGY RESEARCH AND
                        DEVELOPMENT PROGRAM.

        Not later than 6 months after the date of enactment of this Act,
    the Director shall enter into an agreement with the National Academy of
    Sciences to conduct periodic reviews of the Program. The reviews shall
    be conducted once every 3 years during the 10-year period following the
    enactment of this Act. The reviews shall include--
                (1) an evaluation of the technical achievements of the
            Program;
                (2) recommendations for changes in the Program;
                (3) an evaluation of the relative position of the United
            States with respect to other nations in nanotechnology research
            and development;
                (4) an evaluation of the Program's success in transferring
            technology to the private sector;
                (5) an evaluation of whether the Program has been
            successful in fostering interdisciplinary research and
            development; and
                (6) an evaluation of the extent to which the Program has
            adequately considered societal and ethical concerns.