[Congressional Record Volume 140, Number 28 (Tuesday, March 15, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: March 15, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
NATIONAL COMPETITIVENESS ACT
The Senate continued with the consideration of the bill.
Mr. ROCKEFELLER. Madam President, I am hopeful that there has been
enough time for reflection and further thought on the pending bill--S.
4, the National Competitiveness Act--to break the impasse that stalled
us last week. This body debated this legislation for over 4 days. Some
of it was on the bill, as it should have been. I wish more of it had
been on the legislation itself, so that we could determine what if any
further steps we need to take to improve the bill and pass it.
As we begin again to discuss this legislation, let us review what we
are being asked to consider:
S. 4, the National Competitiveness Act, is legislation designed to
equip our Nation to meet the challenges of our global economy that
demand a great deal from our industries, our workers, and our
Government. This is a bill that builds on a tradition--one might even
say a routine--of our Government to work directly with industry in
doing what is necessary to stay ahead economically. For many decades,
we have invested in research, in technology, and in related activities
to ensure that we are producing, manufacturing, and putting our people
to work. That tradition includes funding partnerships and extension
efforts in agriculture, medicine, energy, defense, and aerospace.
With this bill, we are proposing how and where to build on the
American tradition of working with industry to improve America's
manufacturing base, create new jobs, and retain existing jobs. It is
precisely why this country's small, medium, and large businesses and
industry support this legislation.
They recognize that our Government has a unique and essential role in
making sure that the private sector is involved in developing new
technologies, turning them into commercial products, exporting and
selling those products, and putting people to work in jobs that pay
good wages, raise families, and are part and parcel of the American
dream.
If anyone is prone to saying ``keep Government out,'' it is American
business and industry. But Madam President, they are saying the exact
opposite. They are urging us to pass this legislation because they
recognize the place for Government in making America prosperous and
competitive--a role that industry asserts, admits, and continues to
remind us every day that they can't fill on their own.
That is the point of S. 4, the bill before us. With years of thought
and effort, those of us who put this package together carefully pieced
together the existing programs and crafted some modest new programs
that we believe will reap short-term and long-term dividends--dividends
called jobs and growth. In fact, as the chairman has said for a week,
the main purpose of this legislation is, in fact, to continue and
sustain programs that have been in existence for years.
Programs like the Manufacturing Technology Centers that are modelled
directly after what we have done for decades to help the farmers of
this country. We need the same kind of network to extend basic
technical assistance to this country's small- and medium-sized
manufacturers.
Another criticism that doesn't belong in this bill is the charge
about ``industrial policy.''
Now, I might say that if any of my colleagues believe that we are
engaging in sinister ``industrial policy'' every time this body or the
U.S. Government does something to promote jobs, competitiveness, and
prosperity, then let's all 'fess up--we are guilty.
But if we are really honest about what all of us in this body has in
common, it is a commitment to economic growth, jobs, and sustaining the
American dream. That is precisely the basis for the broad and deep
support for the research and development--the R&D--tax credit that we
discussed at length last week.
It is the basis of support for our energy labs involved in cutting-
edge research and that many Members of this body fight for year in and
year out. It is why so many Senators have invested so much effort in
what we call ``defense conversion'' so that we make use of the
facilities and the people involved in our national defense to play a
role in reviving our own economy.
This bill is about common sense economic and jobs policy. If that is
someone's way of saying industrial policy, so be it.
But the way I see it, almost no one in this body is adverse to
Government promoting, helping, and investing in what keeps our
industries on top and our people employed. Some might say the R&D tax
credit is enough. Others might say even more money should be poured
into energy research or agricultural subsidies. The point of S. 4 is to
complement all of the other ways we invest in economic growth and
strength, and to fill some serious voids that threaten our ability to
compete where technology is what's at stake.
In fact, this legislation--S. 4--is about as far as you can get from
targeting a specific industry, technology, or region. It is designed to
fill, again, the role that the private sector cannot fill and doesn't
want to. The programs in this legislation are essentially generic tools
to invest in technologies that industry chooses and picks;
to distribute information about the latest technologies to small- and
medium-sized businesses that can't otherwise get their hands on key
lessons and ideas; and to give technical assistance to companies that
are trying to learn how to lower costs, improve quality, and speed new
products to the marketplace. I have listened to the debate over the
last 5 days and I am very concerned that this discussion has
degenerated into a partisan debate. We need to remember that one of our
major responsibilities as elected officials is to assure that there are
jobs for the current generation of Americans and their children and
grandchildren. This bill speaks specifically to that long-range goal.
Madam President, I truly believe that there is support for this
program on the Republican side of the aisle. Further this is not a new
concept. To illustrate my point I would like to read from a letter from
Dean Thomas Murrin of Duquesne University in Pittsburgh. As many of you
remember, Dean Murrin was the Deputy Secretary of the U.S. Department
of Commerce under President George Bush. In addition to his positions
in the Federal Government and universities, he has been elected to the
prestigious National Academy of Engineering which has 1,700 members.
There are over 1 million engineers in the United States--this election
to the academy is clearly a great honor.
Dean Murrin wrote to me:
Dear Senator Rockefeller: I want to indicate my support for
Senate 4 which is currently under debate in the Senate. This
legislation will create the National Competitiveness Act of
1994 to assist in identifying, developing, acquiring and
deploying assistance to finance needed Industrial Technology.
You may know that I have some strong positive biases on
such initiatives as I was one of the few senior people in the
previous Administration who vigorously supported a national
effort to provide technical assistance and financial support
to manufacturing industries and to encourage technology based
enterprise to start--such as Commerce's ATP and Manufacturing
Center Programs.
Overall, our United States urgently needs to develop an
effective National Technology Strategy. Locally, I believe
Senate 4 is a promising approach that will promote the
economic growth needs of our Southwestern Pennsylvania
region.
Accordingly, I urge you to pass Senate 4.
This letter is from the former Republican Deputy Secretary of
Commerce.
Further, I believe that there is extensive support for this bill
outside of the Beltway. We need to listen to constituents in the
business community.
Friday morning, I also received a letter from National Coalition for
Advanced Manufacturing [NACFAM]. NACFAM is the leading industrial group
working to modernize the manufacturing base in this country. It is a
nonpartisan, industry-led coalition. Its members include 65
corporations--including Johnson & Johnson, Merck & Co, Allen Bradley;
175 manufacturing technology centers--including Center for Materials
Production at Carnegie Mellon in Pittsburgh, Center for Technology
Transfer at University of Maine, and in my home State, the West
Virginia University-Industrial Extension--and 27 national trade and
technical associations--representing over 80,000 companies and
thousands of technical education institutions. NACFAM was the leading
organization working with Senator Bingaman to develop the Technology
Reinvestment Program. As you all know this program is part of the
bipartisan effort to convert our defense industrial base into
commercial production. The executive director, Leo Reddy, writes:
Dear Senator Rockefeller: On behalf of the National
Coalition for Advanced Manufacturing (NACFAM), I want to
reaffirm our strong support for the Senate version of the
National Competitiveness Act, S.4.
We believe that the bill deserves bipartisan support and
ask that you join many of your colleagues in supporting the
bill when it reaches the floor. Its passage will enhance the
ability of U.S. manufacturing companies to compete in the
international marketplace. S. 4 would also help to expand the
pool of high skill, high wage jobs for the American
workforce.
NACFAM especially supports the manufacturing provisions of
the bill (Title II) which, among other things, will develop a
national system of manufacturing extension centers and
technical services. This system will improve the ability of
the nation's 360,000 small and medium-sized manufacturers to
modernize through the adoption of advanced manufacturing
technology and related processes critical to increasing their
productivity, product quality, and competitiveness.
These small- and medium-sized manufacturers are the
backbone of our domestic industrial base. Manufacturing
establishments with fewer than 500 employees represent 98% of
the nation's total, employ two-thirds of the manufacturing
workforce, and produce nearly half of the nation's value
added in manufacturing.
NACFAM, a non-partisan, non-profit, industry-led coalition,
has worked as a catalyst for public-private cooperation in
modernizing America's industrial base for over 5 years.
NACFAM's rapidly growing membership includes 65 corporations,
175 manufacturing technology centers (making NACFAM the
largest association of such centers) and 27 national trade
and technical associations (representing between them over
80,000 companies and thousands of technical education
institutions).
Thanking you in advance for your kind consideration of S.
4.
Several Senators seem to believe that this is some new Government
program in industrial policy. In fact the Federal Government has been
involved with industry to improve competitiveness for many years. Prior
to the collapse of the Berlin Wall, competitiveness was defined using
the military paradigm. Today the word implies manufacturing for
consumer goods. This bill is part of a overall strategy to move from
defense-based manufacturing to consumer-oriented products.
This is not a new program. As an example, I point to a successful
Defense Department program which serves as model for this program. The
ManTech (Manufacturing Technology) and its predecessor, the
Manufacturing Testing and Technology programs, were initiated 20 years
ago to help U.S. industry develop and implement new manufacturing
processes. Some examples:
A company in Woburn, MA has developed a process to produce silicon
carbide--a material which is important for defense applications in the
SDI program but now has commercial applications.
A company in Rochester, NY developed a new type of glass which
reduces the number of lenses in sophisticated optical systems which are
used in military periscopes and riflescopes. This material is now being
applied to low-cost endoscopes which are used in minimally invasive
surgery. These medical procedures reduce the cost of gall bladder
removals and reduce the trauma to the patient. Goals which we all
support.
A consortium led by Boeing (Washington) and Sikorsky (Missouri) has
developed a state of the art manufacturing system for airframes. The
objective is to significantly reduce processing time. Potential cost
savings on one DOD project, the Comanche helicopter, is $63.6 million.
This represents exactly the same type of project that this bill
supports.
Clearly the Department of Defense has been able to manage these
programs. I am equally convinced that the Department of Commerce and
Small Business Administration will be able to manage the programs
embodied in this bill.
It is interesting that the DOD program has no requirement that the
industry provide any of the finding. In S. 4, we require that industry
to put up at least 50 percent of the funding.
Madam President, I am absolutely convinced that if everyone in this
body took a deep breath, and then would take a fresh look at this
legislation, it would win over the vast majority of this body's
support. It would be criminal to abandon the work that is already well
underway with American industry to get on top of the technologies that
define what kind of country we will be for the next decades. The losers
would not be the authors of this bill, although it would hurt, let me
tell you. The losers would be the thousands of businesses that stand to
gain from the help and investment that this bill calls for. The even
greater losers would be American workers and their families whose
livelihoods depend on the public-private partnerships envisioned in
this legislation.
I ask my colleagues to take a fresh look at S. 4. Help us break this
impasse. Help us determine what we can do to find a consensus on this
legislation. It would be needlessly destructive to abandon this basic,
common sense part--and it is only one piece--of what we know we have to
do to be competitive and promote jobs for all Americans.
This bill deserves support inside of these walls that is as broad, as
deep, and as intense as it has outside in the private sector and among
people who are trying to get our attention. The reason is that this
bill charts very basic steps that we need to continue taking to make it
in a global economy--and I promise you, we will rue the day we get
complacent about the challenges we clearly face to stay ahead in
technology, manufacturing, and jobs.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. HOLLINGS. Madam President, while awaiting our colleague on the
other side of the aisle, we have been talking about the various
antecedents to this bill--other Government-industry partnerships in
recent history. On that score, I would cite President Bush's National
Science Board, which reported some 2 years ago. I ask unanimous consent
that the entire report be printed in the Record.
There being no objection, the report was ordered to be printed in the
Record as follows:
The Competitive Strength of U.S. Industrial Science and Technology:
Strategic Issues
[From the National Science Board, Committee on Industrial Support for
R&D, August 1992]
The U.S. industrial R&D system is in trouble not only
because the recent growth of R&D expenditures is lagging that
of foreign competitors, but also because--in the view of many
knowledgeable observers--the distribution and allocation of
those expenditures is not optimal.
Both Federal and corporate policies need to be improved if
the Nation is to meet international competitive challenges.
There are significant gaps in U.S. industrial R&D strength
(e.g., in engineering research); further, a new threat is
emerging to the country's traditional sources of strength--
pioneering discoveries and inventions.
In short, the United States is spending too little, not
allocating it well, and not utilizing it effectively.
findings
The Committee's principal findings follow.
1. The real rate of growth in U.S. industrial R&D spending
has declined since the late 1970s and early 1980s. In
addition, the Nation's position has deteriorated relative to
that of its major international competitors whose investment
in nondefense R&D has been growing at a faster pace than U.S.
nondefense R&D since the mid-1980s.
Domestic industrial R&D expenditures slowed from an average
annual growth rate of 7.5 percent (constant dollars) during
1980-85 to only 0.4 percent during 1985-91. The federally
supported portion of these expenditures dropped from a growth
rate of 8.1 percent to -1.7 percent over these two periods;
industry's own support dropped from 7.3 percent to 1.3
percent. Almost all major R&D-performing industries
contributed to this reduced growth rate.
Since 1985, U.S. growth in both total and nondefense R&D
expenditures has been less than that of many of its major
industrial competitors.
The United States now trails Japan and (West) Germany, its
strongest competitors, in nondefense R&D spending as a
percentage of gross domestic product (GDP).
2. The allocation of U.S. R&D expenditures is not optimal.
The balance between defense and nondefense expenditures is
disadvantageous compared to that of foreign competitors.
International data for defense and nondefense components of
total R&D expenditures (not industrial alone) as a percentage
of GDP can be compared. Using six countries--Japan, (West)
Germany, France, the United Kingdom, Italy, and Sweden--as a
benchmark, the United States in 1989 spent almost as much as
they did on total R&D, but 25 percent less on nondefense R&D.
This imbalance has been deteriorating: the fraction of U.S.
R&D expenditures on nondefense decreased slightly (from 74 to
71 percent) during the 1980s, while that of the competitor
group increased (from 90 to 92 percent). Thus, during the
1980s, these six competitors moved from being 22 percent
ahead of the United States in nondefense R&D expenditures to
being 34 percent ahead. This increase has been driven largely
by Japan's huge growth in nondefense R&D spending; today,
Japan spends about 3 percent of its GDP on nondefense R&D,
compared to 1.9 percent for the United States.
Too little is spent on process-oriented R&D.
Several studies have found that U.S. industrial R&D is
weighted much more heavily toward product technology rather
than process technology. U.S. firms also allocate a
disproportionately small share of their R&D budgets to the
search for new and/or improved processes compared to their
Japanese counterparts.
Inadequate effort is devoted to fundamental engineering
research.
The rapid conversion of ideas into products and processes
requires command of an ever-expanding engineering knowledge
base. Yet there is an insufficiently broad and deep
fundamental engineering research base on which to build.
There is insufficient emphasis on emerging and
precompetitive technologies.
In the Industrial Research Institute survey, industry's
``relutance to invest in new enabling technologies because
the R&D may be too expensive, long-term, multi-industry, and
interdisciplinary'' received the largest number of first
place rankings as a factor adversely affecting U.S.
industry's ability to compete in global markets for high-
technology products under the major category of technology
management practices.
The United States faces an emerging risk of losing its
traditional strength in pioneering discoveries and
inventions.
Most pioneering advances of the past that have created the
basis for new industries have originated in either the
corporate laboratories of private firms or in research
universities. Both of these institutions are under severe
stress today.
U.S. expenditures are not as effective as they should be in
producing needed results.
The U.S. competitive position in important, technologically
based industries is deteriorating.
The once strong across-the-board U.S. position of a decade
ago has deteriorated substantially. U.S. industry has already
lost its leadership in several technologies that are critical
to industrial performance, and is weak or losing competitive
strength in others.
The U.S. time horizon has become too short, and the
Nation's business decisions tend not to be based on strategic
technological considerations.
In large corporations, effort is shifting away from central
laboratories toward division-level effort with greater
emphasis on risk minimization to meet the needs of today's
customers; emphasis is also shifting away from new markets
toward existing markets.
U.S. R&D is not translated into beneficial economic and
social results quickly enough.
Many companies trail their foreign rivals in the
commercialization of new technology. In many U.S. industries,
development of new products proceeds at a much slower pace
than in other countries.
4. The current information based on industrial science and
technology is inadequate it has gaps, is questionable in
parts, and does not provide enough detail to meet the needs
of policymakers.
recommendations
The Committee's findings lead to significant apprehension
about the present trajectory of U.S. industrial R&D and to
the conclusion that stronger Federal leadership is needed in
setting the course for U.S. technological competitiveness.
Implementation of a national technology policy, including
establishment of a rationale and guidelines for Federal
action should receive the highest priority. The start of such
a policy was set forth 2 years ago by the President's Office
of Science and Technology Policy, but more forceful action is
needed by the President and Congress before there is further
erosion in the U.S. technological position.
The Committee's recommendations focus on areas where NSF or
other agencies of the Federal Government may be able to
contribute to strengthening U.S. industrial competitiveness.
The recommendations include policy and programmatic
directions. They fall short of what is ultimately needed,
however. The current course of U.S. industrial R&D demands
creative policies, programs, and initiatives beyond those
devised and examined by the Committee. Committee
recommendations are listed below:
1. Stimulate the resumption of more rapid growth of
industrial R&D to match that of foreign competitors.
Adopt Federal fiscal and monetary policies that encourage
strategic investment in both tangible and intangible assets
for R&D.
Encourage changes in Federal regulations and in the
regulatory process to promote and facilitate technological
innovation.
Establish a permanent R&D tax credit.
Put a permanent moratorium on Treasury Regulation 1.861-8
which can create a tax benefit for U.S. corporations with
foreign sales that move some of their R&D to a foreign
country.
2. Encourage a reallocation of R&D expenditures toward--
nondefense R&D
Establish new programs to stimulate the redirection of
resources from defense to nondefense R&D.
Increase support for NSF strategic science and engineering
research, particularly for activities that attract industrial
cosupport. These activities include engineering research
centers, science and technology centers, cooperative multi-
user facilities, consortia, and individual investigator
projects with coparticipation by industry.
Expand programs that directly support technology transfer
activities in Federal laboratories.
process R&D
Expand and strengthen the Manufacturing Technology Centers
Program and the State Technology Extension Program of the
National Institute of Standards and Technology (NIST).
Encourage substantial NSF involvement in the emerging
Federal Coordination Council for Science, Education, and
Technology (FCCSET) Presidential initiative in manufacturing.
engineering research
Encourage and assist in the expansion of Federal support of
fundamental engineering research.
Expand and strengthen NSF's Engineering Research Center
Program.
emerging and precompetitive technologies
Activate a U.S. technology policy that favors Federal R&D
investment in generic precompetitive and emerging
technologies important to industry.
Encourage and assist in the expansion of Federal support of
fundamental scientific and engineering research that
contributes to emerging and precompetitive technologies,
including the FCCSET initiatives in biotechnology, advanced
materials and processing, and high-performance computing and
communications.
Expand the effectiveness, scope, and outreach of NSF's
Science and Technology Centers, Industry/University
Cooperative Research Centers, and other industry-related
programs, and couple these programs even more closely with
future industry needs.
Further expand NIST's Advanced Technology Program.
pioneering discoveries and inventions
Create more programmatic opportunities that encourage
interaction of scientists and engineers in academic and
industry to explore joint research interests with the
potential for pioneering discoveries and inventions.
Support traditional and nontraditional education programs
that motivate creativity, innovation, and entrepreneurship.
3. Improve the speed and effectiveness of moving R&D
results from lab to market.
Explore the feasibility of NSF supporting joint science,
engineering, and management education programs that focus on
the integration of technology and management for leadership
of both high-tech and traditional industries.
Encourage NSF activities that lead to faster dissemination
of knowledge and research results among researchers in
academia, industry, and other sectors.
Mr. HOLLINGS. Madam President, quoting from that record:
The committee's findings lead to significant apprehension
about the present trajectory of U.S. industrial R&D and the
conclusion that stronger Federal leadership is needed in
setting the course for U.S. technological competitiveness.
Implementation of a national technology policy, including
establishment of a rationale and guidelines for Federal
action, should receive the highest priority. The start of
such a policy was set forth 2 years ago by the President's
Office of Science and Technology Policy, but more forceful
action is needed by the President and Congress before there
is further erosion in the U.S. technological position.
We put in the President's Office of Science and Technology Policy 2
years before that, in 1990 and again in 1992. But the report still
calls for more forceful action. I quote further from the report:
The balance between defense and nondefense expenditures is
disadvantageous compared to that of foreign competitors.
International data for defense and nondefense components of
total R&D expenditures, not industrial alone, as a percentage
of GDP can be compared using six countries, Japan, Germany,
France, the United Kingdom, Italy, and Sweden as a bench
mark. The United States in 1989 spent almost as much as they
did on total R&D but 25 percent less on nondefense R&D.
Then in another section the particular report, it states:
There is insufficient emphasis on emerging and
precompetitive technologies. The Industrial Research
Institute surveyed industry reluctance to invest in new
enabling technologies, because the R&D may be too expensive
long term, multi-industry and interdisciplinary, received the
largest number of first-place rankings as a factor adversely
affecting U.S. industry's ability to compete in the global
market for high-technology products under the major category
of technology management practices.
The United States faces an emerging risk of losing its
traditional strength in pioneering discoveries and
inventions. Most pioneering advantages of the past that
created a basis for new industries have originated either in
the corporate laboratories of private firms or in research
universities. Both of these institutions are under severe
stress today.
That is exactly what S. 4 is intended to address, and that is the
reason why, some 6 years ago, we upgraded the old Bureau of Standards
into the high-technology National Institute of Standards and
Technology, at the same time launching the Advanced Technology Program.
So, I was aghast here last Monday, a week ago, when we started debate
on the bill and I outlined its provisions.
Someone said, ``You ought to talk more on the bill.'' I said, ``I
have been trying.'' Of course, Monday, most of our colleagues were not
here. But we went over the different components of the bill.
We heard from the Senator from Wyoming, who said, ``It is not
industrial policy, it is political policy.'' That is Senator Wallop,
and you will see that in the Record.
You begin with resentment in some quarters that these programs are
under the Department of Commerce. Then, going all the way back to a
news article of April of last year in the San Francisco Chronicle to
the effect that the National Chairman of the Democratic Party said,
``Look, California is the be-all end-all of Presidential politics and
we are going to have Secretary Brown channel conversion and retraining
funds to that state.''
S. 4 does not have any retraining funds in it. It is totally industry
initiated and totally peer reviewed and based on merit selection.
But when you talk about industrial policy, there is no question that
for 132 years Government has been heavily involved in agriculture. It
began with the Land Grant College Act in 1862. So for 132 years, we
have had an industrial policy for agribusiness.
For 79 years, Government has been in aerospace and aeronautics, with
all of the spinoffs into the private commercial aircraft industry,
which we all, both sides of the aisle, support. I certainly support it
very strongly.
I will never forget in 1955, President Eisenhower, when we put import
quotas on oil. That was industrial policy for the energy industry.
Then, later in the 1970's with OPEC, we came in with the moneys for
gasohol, for fusion research, oil shale, solar energy and so on. So for
40 years, we have had industrial policy in energy.
For 15 years, we have had industrial policy, it might be said, for
automobiles with the Chrysler bailout.
For the past 6 years, industrial policy for all of technology, with
the resolution of the National Bureau of Standards into the National
Institute of Standards and Technology and the Advanced Technology
Program.
So, you cannot come now and say, ``Wait a minute. This is a new
departure, a new philosophy, an industrial policy that we have not
discussed.''
This is industrial policy consonant with all the other policies in
aircraft and energy and agriculture and automobiles and much more.
And now to say of S. 4, ``Wait a minute; we have not discussed it'';
this is simply not so. We passed it out of the committee, we passed it
over on the House side, we passed it out of the committee unanimously
again and again. Not partisanly done, but bolstered by President Bush's
Competitiveness Policy Council in 1991, with the eminent Erich Bloch.
Mr. Bloch was the director of the National Science Foundation, at the
appointment of President Reagan, and at the appointment of President
Bush headed up this Competitiveness Policy Council. Therein they did
talk of amounts and said we were so far behind that we ought to have a
program of anywhere from $4 to $8 billion, specifically referring to
the Advanced Technology Program that has already been in the Department
of Commerce, the report said funding should be $750 million. We only
have $457 million for next year in this and for the following year,
$575 million.
So we have not even gotten up to the levels that President Bush and
his eminent council recommended.
There was no idea of politicizing these programs or this bill, but
obviously you can see from the vote that it has been politicized. This
is a filibuster on a bill that our colleagues on the other side
previously supported, a bill that they strongly recommended.
We had, 2 years ago, the distinguished Senate Republican task force
on defense conversion. We had a Democratic task force. Both of them
agreed.
But let us go to the words of the 12 distinguished Senators of the
Republican task force, including my distinguished ranking member. I
quote:
The task force endorses two programs. The National
Institute of Standards and Technology is important to the
effort to promote technology transfer to allow defense
industries to convert to civilian activities. These programs
are the Manufacturing Technology Program and the Advanced
Technology Program.
When a problem arose here last year with respect to Airbus, the
distinguished Senator responded with the introduction on February 24
last year of S. 419. I will read from that particular measure, from
page 3, section 7:
Given current and expected reductions in defense spending
and increased competitive pressures in the commercial
aircraft market, it is critical for the Federal Government to
coordinate its aeronautics and related programs and redirect
these resources to assist the U.S. commercial aircraft
industry to meet the competitive challenge from Airbus
industry.
Then it says in section 8:
The Federal Government has played an active role in
research and development of aeronautical technology since the
National Advisory Committee on Aeronautics [NACA] was created
in 1915.
That is exactly the purpose and exactly the reference that we would
give when they incorrectly say that industrial policy represents some
new departure or new philosophy. So, my colleagues, do not let us get
bogged down on this industrial policy rhubarb. Here it is; we have been
in industrial policy since 1915, according to the Senator from
Missouri.
Then going further, I read again on the next page--I ask unanimous
consent that the entire bill, S. 419 of the 103d Congress, be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 419
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 ``Aeronautical Technology
Consortium Act of 1993''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) a strong commercial aircraft industry is critical to
the health of the United States economy: aircraft production
in the United States affects nearly 80 percent of the
economy, and for every additional dollar of shipments of
aircraft, output of the economy increases by an estimated
$2.30;
(2) a strong commercial aircraft industry is critical to
the national security of the United States because of the
synergies between commercial and military aeronautical
technologies and the need for a strong advanced technology
industrial base;
(3) the National Critical Technologies Panel has identified
aeronautics as one of twenty-two categories of technologies
critical to the national economic prosperity and to national
security;
(4) while the United States has traditionally dominated the
world commercial aircraft market, the United States aircraft
industry is facing two critical challenges: significant
cutbacks in defense procurement and related military
spending, and the growing competitive strength of the
European aircraft consortium, Airbus Industrie;
(5) Airbus Industrie, a consortium of four European
aircraft manufacturing companies that have received almost
$26,000,000,000 in government subsidies over two decades, has
developed a family of competitive aircraft models and has
captured one-fourth of the world market for large civil
aircraft;
(6) in 1992, the United States signed an agreement with the
European Community that permits the European governments to
continue to subsidize up to 33 per centum of the development
costs of new large civil aircraft;
(7) given current and expected reductions in defense
spending and increased competitive pressures in the
commercial aircraft market, it is critical for the Federal
Government to coordinate its aeronautics and related programs
and redirect these resources to assist the United States
commercial aircraft industry to meet the competitive
challenge from Airbus Industrie;
(8) the Federal Government has played an active role in
research and development of aeronautical technologies since
the National Advisory Committee on Aeronautics (NACA) was
created in 1915;
(9) in recent years, however, Federal Government support
for aerospace research and development has focused
overwhelmingly on military and space technologies;
(10) Federal programs relating to aeronautics research and
development today are spread among a number of different
agencies and departments, including the Departments of
Defense, Transportation, and Commerce, as well as the
National Aeronautics and Space Administration and the
National Science Foundation;
(11) Federal financial assistance to the semiconductor
industry consortium known as Sematech has been successful in
improving the competitiveness of the United States
semiconductor industry;
(12) the Federal Government should use Sematech as a model
in developing a program to provide financial assistance to an
industry-led consortium of United States commercial aircraft
manufacturing companies; and
(13) such a government-industry consortium should focus its
efforts on research, development, and commercialization of
new aeronautical technologies and related manufacturing
technologies, as well as the transfer and conversion of
aeronautical technologies developed for national security
purposes to commercial applications for large civil aircraft.
(b) Purpose.--The purpose of this Act is to strengthen and
assist the United States commercial aircraft industry by--
(1) providing for an interagency aeronautical technology
program to coordinate and expand Federal research and
development programs relating to aeronautical technologies
and related manufacturing technologies; and
(2) assisting the United States commercial aircraft
industry in developing an Aeronautical Technology Consortium
for the purpose of providing Federal assistance to industry-
led joint ventures established for research, development, and
commercialization of aeronautical technologies and related
manufacturing technologies applicable to large civil
aircraft.
SEC. 3. DEFINITIONS.
For purposes of this Act--
(1) The term ``Director'' means the Director of the Office
of Science and Technology Policy.
(2) The term ``eligible firm'' means a company or other
business entity that, as determined by the Secretary of
Commerce--
(A) conducts a significant level of its research,
development, engineering, and manufacturing activities in the
United States; and
(B) either--
(i) is a United States-owned company; or
(ii) is a company incorporated in the United States and has
a parent company which is incorporated in a country the
government of which--
(I) affords United States-owned companies opportunities,
comparable to those afforded any other company, to
participate in research and development consortia to which
the government of that country provides funding directly or
provides funding indirectly through international
organizations or agreements; and
(II) affords adequate and effective protection for the
intellectual property rights of United States-owned
companies.
Such term includes a consortium of such companies or other
business entities, as determined by the Secretary of
Commerce.
(3) The term ``Federal laboratory'' has the meaning given
such term in section 4(6) of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3703(6)).
(4) The term ``joint venture'' has the meaning given such
term in section 28(j)(1) of the National Institute of
Standards and Technology Act (15 U.S.C. 278n(j)(1)).
(5) The term ``large civil aircraft'' means all aircraft
that are designed for passenger or cargo transportation and
have one hundred or more passenger seats or its equivalent in
cargo configuration.
(6) The term ``manufacturing technology'' means techniques
and processes designed to improve manufacturing quality,
productivity, and practices, including engineering design,
quality assurance, concurrent engineering, continuous process
production technology, energy efficiency, waste minimization,
design for recyclability or parts reuse, shop floor
management, inventory management, worker training, and
communications with customers and suppliers, as well as
manufacturing equipment and software.
(7) The term ``United States-owned company'' means a
company or other business entity the majority ownership or
control of which is by United States citizens.
SEC. 4. AERONAUTICAL TECHNOLOGY PROGRAM.
(a) Establishment.--The President shall establish an
Aeronautical Technology Program (hereafter in this Act
referred to as the ``Program''), which shall--
(1) provide for interagency coordination of Federal
research and development programs relating to aeronautical
technologies and related manufacturing technologies;
(2) provide a mechanism for private industry comment and
guidance regarding the cost-effectiveness and commercial
practicability of existing and proposed Federal research and
development programs relating to aeronautical technologies
and related manufacturing technologies;
(3) promote, to the maximum extent practicable, the
transfer and conversion to commercial applications of
aeronautical technologies developed for national security
purposes;
(4) coordinate and expand existing Federal research and
development programs relating to--
(A) subsonic aeronautics, and
(B) supersonic aeronautics,
with particular focus on government-industry cooperative
programs to develop large civil aircraft beyond the financial
means of any single company;
(5) assist the United States commercial aircraft industry
in developing an Aeronautical Technology Consortium for the
purpose of providing Federal assistance to industry-led joint
ventures established for research, development, and
commercialization of aeronautical technologies and related
manufacturing technologies applicable to large civil
aircraft; and
(6) establish other goals and priorities for Federal
research and development programs relating to aeronautical
technologies and related manufacturing technologies.
(b) National Aeronautics Strategy.--
(1) In general.--The President, acting through the
Coordinating Committee established in subsection (c), shall
develop a National Aeronautics Strategy (hereafter in this
Act referred to as the ``Strategy'') to implement the
Program. The Strategy shall contain specific recommendations
for a five-year national effort, to be submitted to the
Congress within six months after the date of enactment of
this Act.
(2) Contents of strategy.--The Strategy shall--
(A) establish the specific goals and priorities for the
Program for the fiscal year in which the Strategy is
submitted and the succeeding four fiscal years;
(B) set forth the role of each Federal agency and
department in implementing the Program;
(C) describe the levels of Federal funding for each agency
and specific research, development, and commercialization
activities required to achieve such goals and priorities;
(D) take into account the recommendations of the Advisory
Committee established in section 6; and
(E) consider and use, as appropriate, reports and studies
conducted by Federal agencies and departments, the National
Research Council, or other entities.
(3) Federal agencies and departments to be addressed.--The
Strategy shall address, where appropriate, the relevant
programs and activities of--
(A) the Department of Defense, particularly the Department
of the Air Force, the Department of the Navy, and the Defense
Advanced Research Projects Agency;
(B) the Department of Commerce, particularly the National
Institute of Standards and Technology;
(C) the Department of Transportation, particularly the
Federal Aviation Administration;
(D) the National Aeronautics and Space Administration;
(E) the National Science Foundation;
(F) the Federal laboratories; and
(G) such other agencies and departments as the President or
the Coordinating Committee considers appropriate.
(c) Coordinating Committee.--
(1) Authority; composition.--The Program shall be
administered by an Aeronautical Technology Coordinating
Committee (hereafter in this Act referred to as the
``Coordinating Committee'') composed of the following
officials:
(A) The Director, who shall be chairperson.
(B) The Secretary of Defense.
(C) The Secretary of Commerce.
(D) The Secretary of Transportation.
(E) The Administrator of the National Aeronautics and Space
Administration.
(F) The Director of the National Science Foundation.
(2) Functions.--The Coordinating Committee shall--
(A) serve as the lead entity responsible for implementation
of the Program;
(B) coordinate all Federal research and development
programs relating to aeronautical technologies and related
manufacturing technologies;
(C) consult regularly with and seek recommendations from
the Advisory Committee established by section 6;
(D) consult with academic, State, industry, and other
appropriate groups conducting research on and using
aeronautical technologies; and
(E) submit to the Congress an annual report, along with the
President's annual budget request, describing the
implementation of the Program.
SEC. 5. AERONAUTICAL TECHNOLOGY CONSORTIUM.
(a) In General.--Under the Program, the Coordinating
Committee shall provide assistance to an Aeronautical
Technology Consortium (hereafter in this Act referred to as
the ``Consortium''), which shall consist of all eligible
firms that--
(1) are engaged in research, development, testing,
demonstration, or production of aeronautical technology
applicable to the production of large civil aircraft;
(2) are selected by the Coordinating Committee, through the
Director, on the basis of the criteria specified under
subsection (d); and
(3) are necessary to enable the Consortium to achieve its
purpose as described under subsection (b).
(b) Purpose.--The purpose of the Consortium is to conduct
industry-led joint ventures relating to--
(1) manufacturing technologies applicable to the production
of large civil aircraft;
(2) the transfer and conversion of aeronautical
technologies developed for national security purposes to
commercial applications for large civil aircraft;
(3) subsonic aeronautical technologies applicable to the
development and production of large civil aircraft; and
(4) supersonic aeronautical technologies applicable to the
development and production of large civil aircraft.
(c) Assistance To Be Provided.--In providing assistance to
the Consortium, the Coordinating Committee, acting through
the Director, shall--
(1) provide financial and other assistance to the United
States commercial aircraft industry in the formation of the
Consortium;
(2) support the Consortium, and such subordinate joint
ventures as the Consortium may establish, by making available
equipment, facilities, and personnel;
(3) aid the Consortium, and such subordinate joint ventures
as the Consortium may establish, by means of grants,
cooperative agreements, contracts, and provision of
organizational and technical advice;
(4) enter into contracts and cooperative agreements in
support of the Consortium with independent research
organizations, institutions of higher education, and agencies
of State and local governments;
(5) involve the Federal laboratories in the Consortium,
where appropriate, using among other authorities the
cooperative research and development agreements provided for
under section 12 of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3710a); and
(6) carry out, in a manner consistent with this section,
such other cooperative research activities with the
Consortium and joint ventures as may be authorized by law or
assigned to the Coordinating Committee by the President.
(d) Selection of Consortium Participants.--The criteria for
selection of industry participants in the Consortium, as
referred to in subsection (a)(2), are as follows:
(1) The extent of present participation of the eligible
firm in Federal research and development programs relating to
aeronautical technologies and related manufacturing
technologies.
(2) The extent of present commercial activity of the
eligible firm relating to the development and production of
large civil aircraft, engines, advanced materials, avionics,
and other related components.
(3) The extent of present commercial activity of the
eligible firm relating to aeronautical technologies developed
for national security purposes that may have commercial
applications for large civil aircraft.
(4) The technical excellence of the eligible firm.
(5) The extent of financial commitment of the eligible firm
to the Consortium.
(6) Such other criteria that the Director prescribes.
(e) Charter; Operating Plan.--The Consortium shall have--
(1) a charter, agreed to by all industry participants in
the Consortium, that meets requirements established by the
Coordinating Committee; and
(2) an annual operating plan that is developed in
consultation with the Coordinating Committee and the Advisory
Committee established in section 6.
(f) Financial Commitment of Industry Participants.--
(1) In general.--The Director shall ensure that, to the
maximum extent the Director determines to be practicable, the
total amount of the funds provided by the Federal Government
to the Consortium does not exceed the total amount provided
by the industry participants in the Consortium.
(2) Authority to exceed 50 per centum federal funding.--
Nothing in this subsection shall be construed to prohibit the
Federal Government from providing greater than 50 per centum
of the funds for any individual joint venture, project, or
program where the Director determines such funding to be
consistent with the goals of the Program.
(3) Consideration of in-kind contributions.--The Director
shall prescribe regulations to provide for consideration of
in-kind contributions by industry participants in the
Consortium and joint ventures for the purpose of determining
the share of the funds that have been or are being provided
by such participants.
(g) Merit Review.--No contract or other award for a
research project may be made under this section until the
research project in question has been subject to a merit
review, and, in the opinion of the reviewers appointed by the
Director, has been shown to have scientific and technical
merit.
(h) Oversight of Consortium Activities.--The Coordinating
Committee, acting through the Director, shall take such
actions as are necessary and appropriate to ensure that the
Consortium's activities help to achieve the purposes of this
act, including--
(1) prescribing regulations for the purpose of this
section;
(2) establishing procedures for the use by the Coordinating
Committee of funds authorized to a particular Federal agency
or department that is participating in the Consortium;
(3) establishing procedures regarding financial reporting
and auditing to ensure that contracts and other awards are
used for the purposes specified in this section and are in
accordance with sound accounting practices;
(4) monitoring how technologies developed through the
Consortium are used, and reporting to the Congress on the
extent of any overseas transfer of those technologies;
(5) assuring that the recommendations of the Advisory
Committee established in section 6 are considered routinely
in carrying out the responsibilities of the Coordinating
Committee under this Act; and
(6) providing for the expeditious and timely transfer of
technology developed and owned by the Consortium to the
participants in the Consortium.
(i) Export of Aeronautical Technology.--Any export of
materials, equipment, and technology developed by the
Consortium in whole or in part with financial assistance
provided under this section shall be subject to the Export
Administration Act of 1979 (50 U.S.C. App. 2401 et seq.) and
shall not be subject to the Arms Export Control Act.
(j) Freedom of Information Act.--Section 552 of title 5,
United States Code, shall not apply to the following
information obtained by the Federal Government on a
confidential basis in connection with the activities of any
industry participant in the Consortium:
(1) information on the business operation of any industry
participant in the Consortium; and
(2) intellectual property, trade secrets, and technical
data possessed by any industry participant in the Consortium.
(k) Intellectual Property.--
(1) Disclosure limitations.--Notwithstanding any other
provision of law, intellectual property, trade secrets, and
technical data owned and developed by the Consortium or any
industry participant in the Consortium may not be disclosed
by any officer or employee of the Federal Government except
in accordance with a written agreement between the owner or
developer and the Director.
(2) Title to and licensing of inventions and patents.--
Title to any invention or patent arising from assistance
provided under this section shall vest in a company or
companies incorporated in the United States. The Federal
Government may reserve a nonexclusive, nontransferable,
irrevocable paid-up license, to have practiced for or on
behalf of the Federal Government, in connection with any such
invention or patent, but shall not, in the exercise of such
license, publicly disclose proprietary information related to
the license. Title to any such invention or patent shall not
be transferred or passed, except to a company incorporated in
the United States, until the expiration of the first patent
obtained in connection with such invention. For purposes of
this paragraph, the term ``invention or patent'' means an
invention patentable under title 35, United States Code, or
any patent on such an invention.
(3) Licensing to companies.--Nothing in this subsection
shall be construed to prohibit the licensing, to any company,
of intellectual property rights arising from assistance
provided under this section.
SEC. 6. AERONAUTICAL TECHNOLOGY ADVISORY COMMITTEE.
(a) Establishment.--There is established an Aeronautical
Technology Advisory Committee (hereafter in this Act referred
to as the ``Advisory Committee'').
(b) Functions.--The Advisory Committee shall advise the
Coordinating Committee and the Consortium on--
(1) the Strategy and other appropriate goals and priorities
for the Program, and how best to achieve those goals;
(2) the operating plan of the Consortium;
(3) the annual progress of the Program and the Consortium
in meeting the requirements of section 4(a) and, in the first
five years, the Strategy;
(4) organizational and programmatic reforms which would
improve the effectiveness of Federal research and development
programs relating to aeronautical technologies and related
manufacturing technologies in promoting the competitiveness
of the United States commercial aircraft industry;
(5) mechanisms for private industry comment and guidance
regarding the cost-effectiveness and commercial
practicability of existing and proposed Federal research and
development programs relating to aeronautical technologies
and related manufacturing technologies; and
(6) policies and mechanisms to promote the transfer and
conversion to commercial applications of aeronautical
technologies developed for national security purposes; and
(7) other goals and priorities for Federal research and
development programs relating to aeronautical technologies
and related manufacturing technologies.
(c) Membership.--The Advisory Committee shall be composed
of twelve members, who shall be appointed by the President
from among individuals who, because of their experience and
accomplishments in the field of aeronautics and related
technological and scientific fields, are exceptionally
qualified to analyze and recommend policy relating to
aeronautical technology research and development. Membership
of the Advisory Committee shall be composed of
representatives of--
(1) large civil aircraft manufacturing companies;
(2) aircraft engine manufacturing companies;
(3) advanced materials companies;
(4) avionics and other systems companies;
(5) other subcontractor firms engaged in aeronautical
technology research, development, and production; and
(6) Federal laboratories, universities, and independent
research institutes.
(d) Terms of Membership.--Each member of the Advisory
Committee shall be appointed for a term of three years,
except that of the members first appointed, four shall be
appointed for a term of one year, four shall be appointed for
a term of two years, and four shall be appointed for a term
of three years, as designated by the President at the time of
the appointment. A member of the Advisory Committee may serve
after the expiration of the member's term until a successor
has taken office.
(e) Chairperson.--The President shall appoint one member of
the Advisory Committee to serve as chairperson.
(f) Quorum.--Seven members of the Advisory Committee shall
constitute a quorum.
(g) Meetings.--The Advisory Committee shall meet at least
quarterly at the call of the chairperson or one-third of its
members, and at the call of the Coordinating Committee.
(h) Compensation and Expenses.--
(1) No compensation for members.--Each member of the
Advisory Committee shall serve without compensation.
(2) Travel expenses authorized.--While away from their
homes or regular places of business in performance of the
duties of the Advisory Committee, members of the Advisory
Committee shall be allowed travel expenses in accordance with
subchapter I of chapter 57 of title 5, United States Code.
(i) Federal Advisory Committee Act.--Section 14 of the
Federal Advisory Committee Act (5 U.S.C. App.) shall not
apply to the Advisory Committee.
SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Office of
Science and Technology Policy, to carry out the provisions of
this Act, such sums as may be necessary for the fiscal years
1994 and 1995.
Mr. HOLLINGS. Madam President, I read on page 4, section 11:
Federal financial assistance to the semiconductor industry
consortium, known as Sematech, has been successful in
improving the competitiveness of the U.S. semiconductor
industry.
Not just agriculture, not just energy, not just automobiles, not just
aerospace, but what about semiconductors?--$10 billion, they are
talking about. We have not even gotten to a billion. They want to talk
about amounts in this particular bill, and we have not gotten to a
billion for the manufacturing extension centers and Advanced Technology
Program; less than a billion right now.
Likewise, don't accuse us of burning holes in our pockets with money.
I note in S. 419 that it calls for spending of ``such sums as is
necessary.'' That is mighty elastic. Boy, would that not be a wonderful
thing, to simply authorize ``such sums as necessary'' in this
particular bill?
Then I read down section 13:
Such a Government industry consortium should focus its
efforts on research, development, and commercialization of
new aeronautical technologies and related manufacturing
technologies, as well as the transfer and conversion of
aeronautical technologies developed for national security
purposes to commercial applications for large civil aircraft.
At one time in the debate last week, they said they asked the
President of Boeing if he had ever gotten anything out of the defense
research in aircraft. Here the distinguished Senator cites it in his
bill. He did not have to ask that question of the head of Boeing at a
hearing. Rather, he cites it with approval here:
The conversion of aeronautical technologies developed for
national security or defense purposes to commercial
applications for large civil aircraft.
Then, again, moving along quickly now:
The purpose of this act is to strengthen and assist the
U.S. commercial aircraft industry by providing for an
Interagency Aeronautical Technology Program to coordinate and
expand Federal research and development programs relating to
aeronautical technologies and related manufacturing * * *.
You are getting into the business part of it; not just research, but
manufacturing technologies--
(2) assisting the U.S. commercial aircraft industry in
developing an aeronautical technology consortium for the
purpose of providing Federal assistance to industry-led joint
ventures established for research, development, and
commercialization of aeronautical technologies and related
manufacturing technologies applicable to large civil
aircraft.
Then, under section 3 of definitions, the term ``Director'' means the
Director of the Office of Science and Technology Policy. Madam
President, listen closely here on point 2:
The term ``eligible firm'' means a company or business
entity as determined by the Secretary of Commerce.
That is where they started off in saying something new was started in
S. 4 because now, do you really want the Secretary of Commerce
determining eligibility? Yet look at the bill, S. 419, authored by the
distinguished Senator last year; it says ``as determined by the
Secretary of Commerce,'' that is section 3, subsection 2, on page 5.
It is wrong to claim the National Institute of Standards and
Technology is a new departure, that it is industrial policy, that it is
a matter we had not discussed. It has not only been passed twice, it is
not only referred to in the Republican task force on defense
conversion, but the distinguished Senator says, in this particular act,
on page 7, and I read section 4:
The term ``joint venture'' has a meaning given such term in
section 28(j)(1) of the National Institute of Standards and
Technology Act, 15 United States Code 278-A and J-1.
So it is cited with approval here, with the 1988 act and the 1992
act; again, in this particular one, the authorization of the National
Institute of Standards and Technology Act. On the next page, under
section 4:
The President shall establish an aeronautical technology
program which shall, under subsection 3, promote to the
maximum extent practical the transfer and conversion to
commercial applications of aeronautical technologies
developed for national security purposes.
Madam President, I do not know how you can spell it out more
explicitly and then come now and say, ``Wait a minute; this is a new
departure.''
For example, again, on page 10:
``The strategy shall address, where appropriate, the relative
programs of the Department of Commerce,'' it says under subsection B.
The programs and activities of the Department of Commerce,
particularly the National Institute of Standards and
Technology of the program, to be administered by the
aeronautical technology coordinating committee.
It goes on to further say:
The act shall be composed of, A, the Director; B, the
Secretary of Defense; C, the Secretary of Commerce--
Again, it is in here.
Now they are asking the question, and I cannot give you a better
answer than my distinguished colleague has given in his own preparation
here, if you are trying to get defense conversion, you are trying to
convert it from defense to civilian, how do you turn it into a civilian
entity? Do you put it in the Department of the Interior? Do you put it
in the Indian Affairs Committee? Do you put it in the Budget Bureau or
wherever else you want to put it? It would have to go to the Department
of Commerce. Everyone acknowledges that.
I do not want to read further. The entire act is there. But it goes
to, finally, on page 21, the Technology Advisory Committee:
* * * organizational and programmatic reforms which would
improve the effectiveness of Federal research and development
programs relating to aeronautical technologies relating to
manufacturing technologies in promoting the competitiveness
of the U.S. commercial aircraft industry.
That is not defense; that is the commercial aircraft industry. And
finally, they are authorized to be appropriated ``such sums as is
necessary.''
Reading in the earlier part of the bill--we patented this after
Sematech, reading the final paragraph--``such sum as is necessary,'' it
is logical to conclude Sematech took $10 billion and, heavens above,
the aircraft industry is just as important, perhaps larger or
otherwise, than the semiconductor industry. And so I do not know how
much. All I do know is President Bush's Science Board came out and said
look, you ought to have a program of $4 to $8 billion--and we have less
than a billion--on the Advanced Technology Program. It cites the
specific figure--this is 2 years ago--of $750 million, and we only have
for next year $425 million and for the following year $525 million. So
we are within bounds on the amount.
There is some discussion that this is a runaway program. Not at all,
Madam President, when you bring over some five programs from DARPA, as
we all have been working on--the Armed Services Committee with Senator
Bingaman, the Competitiveness Council on both sides, the task force on
defense conversion on both sides. We have all been working in lockstep,
moving right along in a unanimous way.
Now they come with ``industrial policy.'' Now they come with, ``Wait
a minute; the amount is just outrageous.''
It is 10 times less than what has been recommended by President Bush
and others who have been looking at this, because as you take it from
the $40 billion--$40 billion over there in defense for all the
instrumentalities of weaponry--and move it over to the
instrumentalities of commerce and business and civilian use, I hope we
could get up to--I do not want to fly under any false colors--we could
get up to $8 billion.
We have to stay within the budget. I serve on the Budget Committee,
so when this bill was referred to the Office of Management and Budget,
they actually cut it back, I say to the Senator, and that is why we had
a substitute in the very early stage when we presented the bill. We
were authorized by the Committee of Commerce to put in the subject with
lesser amounts than what the committee had reported last year because
we have to stay within the reduced budget as enunciated here by the
Office of Management and Budget.
I yield the floor.
Amendment No. 1521 to amendment no. 1493
Mr. BROWN addressed the Chair.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. BROWN. I ask unanimous consent to set aside the pending
amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BROWN. Madam President, I rise to send an amendment to my
amendment No. 1493 to the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Colorado [Mr. Brown] proposes an amendment
numbered 1521 to amendment No. 1493.
Mr. BROWN. Mr. President, I ask unanimous consent that reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
In lieu of the language proposed to be inserted, insert the
following:
Strike line 19 on page 49, through line 21 on page 51 and
insert the following:
(B) strike paragraph (1)(B)(ii) and replace with:
``participation in such joint ventures, if the Secretary,
acting through the Director, determines participation to be
appropriate and if the joint venture as a whole agrees to pay
at least half of the total costs of such joint ventures
during the participation period, which shall not extend
beyond 5 years,'';
(C) in paragraph (2)--
(i) by striking ``and cooperative agreements'' and
inserting in lieu thereof ``cooperative agreements, and
subject to the last sentence of this subsection, other
transactions''; and
(D) by adding after paragraph (4) the following:
``The authority under paragraph (1)(B) and paragraph (2) to
enter into other transactions shall apply only if the
Secretary, acting through the Director, determines that
standard contracts, grants, or cooperative agreements are not
feasible or appropriate, and only when other transaction
instruments incorporate terms and conditions that reflect the
use of generally accepted commercial accounting and auditing
practices.'';
(3) in subsection (d)(3), by striking $2,000,000; and
inserting in lieu thereof ``$3,000,000.''
(4) by adding at the end of the following new subsection:
``(1) Notwithstanding subsections (b)(1)(B)(ii) and (d)(3),
the Director may grant an extension beyond the deadlines
established under those subsections for joint venture and
single applicant awardees to expend Federal funds to complete
their projects, if such extension may be granted with no
additional cost to the Federal Government.''.
(b) United States Joint Ventures.--(1) Section 28(d)(11)(A)
of the National Institute of Standards and Technology Act (15
U.S.C. 278N(D)(11)(A)) is amended by striking the period at
the end of the first sentence and inserting in lieu thereof
the following: ``or any other person otherwise eligible to
participate in an eligible joint venture, as agreed by the
parties, receiving funding under any particular award,
notwithstanding the requirements of section 202 (a) and (b)
of title 35, United States Code.''
(2) The amendments made by sections 303 (a) and (b) shall
be effective only with respect to assistance for which
solicitations for proposals are made after the date of
enactment of this Act or October 1, 1994, whichever occurs
later.
Mr. BROWN. Madam President, this amendment is in response to the
observations of the distinguished chairman when this measure was
originally brought up. The chairman's suggestions have been
incorporated into this amendment. We have checked with the Commerce
Department and included their recommendations.
I would like to publicly thank the chairman for his very helpful
efforts. Frankly, his suggestions are ones that will not only improve
the amendment but make it clear that I think the purpose of the
amendment can be accomplished with less paperwork and less wasted
accounting techniques than the original version.
The impact of the amendment, as amended, is simply this: It would
make it clear that joint ventures have to have at least 50 percent of
the operation coming from the investors themselves, from the venture
itself, so that the Government is not in a position of putting out more
than half the money.
I see that as a very valuable effort because I think it is the No. 1
way of assuring this money is well spent, and that is to be sure
somebody else comes up with their own funds. So the matching nature of
this amendment I think will be helpful.
In addition, this amendment does put back into law a cap of $3
million over 3 years. In other words, there is a cap of how much these
ventures can receive.
Both measures I think will improve the quality of the endeavors that
take place under this bill.
Mr. HOLLINGS. Madam President, it is an excellent initiative by the
distinguished Senator from Colorado. We have worked it out, staffs on
both sides, the Department and otherwise. We go along with great
approval, and if the Senator urges adoption, we will join him.
Mr. BROWN. I thank the Senator for his help.
Mr. HOLLINGS. I thank the Senator.
The PRESIDING OFFICER. Is there further debate? If not, the question
is on agreeing to amendment No. 1521.
The amendment (No. 1521) was agreed to.
Mr. BROWN. Madam President, I move to reconsider the vote.
Mr. HOLLINGS. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. Is there further debate on the amendment to
the amendment?
The question now is on agreeing to amendment No. 1493, as amended.
The amendment (No. 1493), as amended, was agreed to.
Mr. BROWN. Madam President, I move to reconsider the vote.
Mr. HOLLINGS. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. DORGAN. Mr. President, I ask unanimous consent to speak for 10
minutes as in morning business.
The PRESIDING OFFICER (Mr. Breaux). Without objection, it is so
ordered.
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