[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.

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