[Senate Report 107-350]
[From the U.S. Government Publishing Office]



107th Congress 
 2d Session                      SENATE                          Report
                                                                107-350
_______________________________________________________________________
                                                       Calendar No. 772
 
        21st CENTURY NANOTECHNOLOGY RESEARCH AND DEVELOPMENT ACT

                               __________

                              R E P O R T

                                 of the

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                S. 2945

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


               November 20, 2002.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                      one hundred seventh congress
                             second session

              ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska
    Virginia                         CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana            KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
RON WYDEN, Oregon                    SAM BROWNBACK, Kansas
MAX CLELAND, Georgia                 GORDON SMITH, Oregon
BARBARA BOXER, California            PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina         JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri              GEORGE ALLEN, Virginia
BILL NELSON, Florida
                     Kevin D. Kayes, Staff Director
                       Moses Boyd, Chief Counsel
                      Gregg Elias, General Counsel
      Jeanne Bumpus, Republican Staff Director and General Counsel
             Ann Begeman, Republican Deputy Staff Director
             Robert W. Chamberlin, Republican Chief Counsel
                                                       Calendar No. 772
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-350

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

        21st CENTURY NANOTECHNOLOGY RESEARCH AND DEVELOPMENT ACT
                                _______
                                

               November 20, 2002.--Ordered to be printed

                                _______
                                

      Mr. Hollings, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 2945]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 2945) to authorize 
appropriations for nanoscience, nanoengineering, and 
nanotechnology research, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of the bill, as reported, is to authorize a 
coordinated inter-agency program that will support long-term 
nanoscale research and development which will lead to potential 
breakthroughs in technologies related to a number of areas, 
including materials and manufacturing, nano-electronics, 
medicine and healthcare, the environment, energy, chemicals, 
biotechnology, agriculture, information technology, and 
national and homeland security.

                          BACKGROUND AND NEEDS

    Nanoscience, often referred to as nanotechnology, is an 
emerging scientific field which aims to create devices, 
materials, and systems at the nanometer scale. A nanometer is 
one billionth of a meter (10-9 m), or roughly 
100,000 times smaller than a strand of human hair. Nano-
technologists are studying and designing materials and systems 
at this sub-microscopic level.
    Nanotechnology is a multi-disciplinary field, combing all 
aspects of the traditional sciences. Nanotechnology requires 
expertise in engineering, chemistry, physics, materials 
science, biology, and computer science. A field like quantum 
computing, the next stage in the information technology 
revolution, builds on knowledge and achievements in quantum 
mechanics and computer science to develop systems with 
processing powers that are several orders of magnitude greater 
than currently possible.
    The future of nanotechnology is touted as the next 
industrial revolution. It will enable scientists to create 
advanced materials and systems. For example, in combining an 
understanding of a material's properties and the ability to 
manipulate atoms, scientists are expected to be able to produce 
a substance that is stronger than steel, yet as light as a 
feather. Nanotechnology is still in its infancy. It has 
recently passed theoretic feasibility and is entering the 
laboratory. Breakthroughs in nanotechnology promise to 
fundamentally alter the way we manufacture products.
    According to the NanoBusiness Alliance, the nanotechnology 
market currently generates $45 billion a year in worldwide 
sales. This is projected to grow to $700 billion by 2008. A 
more conservative prediction by the National Science Foundation 
(NSF) is that the market for nanotechnology will reach $1 
trillion by 2015. The potential gains are immense. It is key 
for the United States to maintain an intellectual lead and use 
that knowledge to maintain its commercial edge.
    The National Nanotechnology Initiative (NNI) was created in 
2001 with the goal of coordinating the Federal government's 
research and development efforts in nanotechnology. Federal 
support is crucial because nanotechnology is so nascent that 
few companies will invest in it because the pay-offs are so far 
into the future. Venture capitalists also shy away from 
nanotechnology for the same reasons. Universities tend not to 
have sufficient funds to engage in such exploratory work. Only 
the Federal government can bridge the gap for the next few 
decades before this research can be applied widely to 
commercial products. The Federal government has a history of 
sponsoring research that opens new frontiers (atomic physics, 
space exploration, and development of the Internet). Many 
believe that nanotechnology is the next such frontier.

                          LEGISLATIVE HISTORY

    On September 17, 2002, the Subcommittee on Science, 
Technology, and Space conducted a hearing on the 21st Century 
Nanotechnology Research and Development Act which was 
introduced by Senators Wyden, Allen, Lieberman, Mikulski, 
Landrieu, and Clinton the same day. This hearing included the 
following witnesses: The Honorable Richard Russell, Associate 
Director for Technology, Office of Science and Technology 
Policy; Mr. F. Mark Modzelewski, Executive Director of the 
NanoBusiness Alliance; Dr. Samuel I. Stupp, Board of Trustees 
Professor, Materials Science, Chemistry, and Engineering and 
Director of the Institute for Bioengineering and Nanoscience in 
Advanced Medicine, Northwestern University; Dr. R. Stanley 
Williams, Fellow and Director of Quantum Science Research, 
Hewlett Packard; and Mr. Nathan Swami, Executive Director of 
Initiative for Nanotechnology in Virginia, University of 
Virginia.
    On September 19, 2002, the Commerce Committee met in 
Executive Session and ordered the bill reported without 
amendment.

                      SUMMARY OF MAJOR PROVISIONS

Authorization of appropriations

    S. 2945, as reported, would authorize appropriations for 
several government agencies for nanoscale science and 
technology research and development in the amount of $476 
million for fiscal year (FY) 2003 and $547.3 million in FY 
2004, for a total of $1.02 billion over the next two years, as 
follows:

                        [In millions of dollars]
------------------------------------------------------------------------
               Agency                  FY 2003     FY 2004      Total
------------------------------------------------------------------------
National Science Foundation........       221.0       254.1      475.15
Department of Energy...............       139.3       160.2      299.495
National Aeronautics and Space             22.0        25.3       47.3
 Administration (NASA).............
National Institutes of Health (NIH)        43.2        49.7       92.88
National Institute of Standards and        44.0        50.6       94.6
 Technology (NIST).................
Environmental Protection Agency             5.0         5.7       10.75
 (EPA).............................
Department of Justice..............         1.4         1.6        3.01
                                    ------------------------------------
      Total........................       475.9       547.3    1,023.185
------------------------------------------------------------------------

  The funding level for FY 2003 reflects the President's 
requested level for these programs, and the FY 2004 level is 
fifteen percent higher than the FY 2003 request.

National Nanotechnology Research Program

  S. 2945, as reported, would authorize the President to 
establish a National Nanotechnology Research Program (NNRP) 
with the goal of coordinating long-term Federal nanotechnology 
research and development. The program would build on the NNI, 
providing Federally funded research through participating 
government agencies. The NNRP would include: (1) grand 
challenges that will promote the advancement of the field; (2) 
regional interdisciplinary research centers that provide access 
to facilities for academia and industry; (3) the development of 
an adequate research infrastructure; (4) the creation of a 
Center for Ethical, Societal, Educational, Legal and Workforce 
Issues Related to Nanotechnology, which will support social 
science research on nanotechnology; and (5) the development of 
mechanisms to promote prompt technology transfers. 
Additionally, the program would emphasize the interdisciplinary 
nature of the nanotechnology field, and as a result, give 
preference to universities that show a commitment to 
interdisciplinary curricula and research.

Program coordination and management

  S. 2945, as reported, would authorize the National Science 
and Technology Council (NSTC) to oversee the planning, 
management and coordination of the NNRP. The NSTC would be 
required to coordinate the budget requests of, and provide 
guidance to, participating departments and agencies. The NSTC 
would submit an annual report to Congress detailing the goals, 
grand challenges, and program funding areas of the NNRP.
  S. 2945 also would authorize the President to establish a 
Nanotechnology Advisory Panel, which would advise the President 
and the NSTC on goals and objectives of the NNRP. The Panel, 
modeled on the President's Information Technology Advisory 
Council, would be responsible for providing an annual 
evaluation of the NNRP, including a review of the program's 
management, a review of the balance of the research portfolio 
across agencies and disciplines, and recommendations for new 
grand challenges, and other charges. The President would have 
the authority to appoint up to 20 individuals to serve on the 
panel.
  S. 2945, as reported, also would authorize the President to 
create a National Nanotechnology Coordination Office (NNCO) to 
serve as the primary point of contact for Federal 
nanotechnology activities. The NNCO would provide day-to-day 
technical and administrative support to assure full 
coordination of nanotechnology research efforts.

                            ESTIMATED COSTS

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 1, 2002.
Hon. Ernest F. Hollings,
Chairman, Committee on Commerce, Science, and Transportation, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2945, the 21st 
Century Nanotechnology Research and Development Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 2945--21st Century Nanotechnology Research and Development Act

    Summary: S. 2945 would authorize the appropriation of about 
$1 billion over the 2003-2004 period for civilian research and 
development (R&D) on nanotechnology (these technologies involve 
manipulating matter at the atomic level). It would allocate 
this funding among seven agencies: the National Science 
Foundation, Department of Energy, National Aeronautics and 
Space Administration, National Institutes of Health, National 
Institute of Standards and Technology, Environmental Protection 
Agency, and the Department of Justice. Other provisions would 
establish programmatic and reporting guidelines for agency 
initiatives and create a scientific advisory board and office. 
Finally, S. 2945 would direct the Office of Science and 
Technology Policy to coordinate agency initiatives and sponsor 
biennial studies by the National Academy of Sciences (NAS) on 
how R&D efforts in the United States compare with those of 
other countries.
    Assuming appropriation of the authorized amounts, CBO 
estimates that implementing this bill would cost $989 million 
over the 2003-2007 period. CBO estimates that enacting S. 2945 
would have no effect on direct spending or revenues.
    S. 2945 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments. Public universities and agencies would benefit 
from grants to create interdisciplinary centers for research in 
nanotechnology. These entities may incur costs as a result of 
participating in the grant program, but such costs would be 
voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2945 is shown in the following table. 
The costs of this legislation fall within budget functions 250 
(general science, space, and technology), 300 (natural 
resources and the environment), 376 (commerce and housing 
credit), 550 (health), and 750 (administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2002     2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Nanotechnology spending under current law:
    Budget authority \1\..................................      424        0        0        0        0        0
    Estimated outlays.....................................      344      231       54       15        7        2
Proposed changes:
    Estimated authorization level.........................        0      476      547        0        1        0
    Estimated outlays.....................................        0      186      425      292       67       19
Nanotechnology spending under S. 2945:
    Estimated authorization level \1\.....................      424      476      548        0        1        0
    Estimated outlays.....................................      344      417      479      307       74       21
----------------------------------------------------------------------------------------------------------------
\1\ The 2002 level reflects agencies' estimates of the amount appropriated for that year for R&D on
  nanotechnology, a full-year appropriation for 2003 for these agencies has not yet been enacted.

    Basis of estimate: For this estimate, CBO assumes that the 
amounts authorized will be appropriated near the start of each 
fiscal year and that outlays will occur at rates similar to 
those for other R&D programs at each agency. The amounts shown 
in the table reflect the amounts specified in S. 2945 for 
agency R&D and the cost of the NAS studies comparing the U.S. 
program to those of other countries. Based on information from 
the NAS, CBO estimates that each biennial study on 
international trends would cost about $1 million.
    Intergovernmental or private-sector impact: S. 2945 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on State, local, or 
tribal governments. Public universities and agencies would 
benefit from grants to create interdisciplinary centers for 
research in nanotechnology. These entities may incur costs as a 
result of participating in the grant program, but such costs 
would be voluntary.
    Estimate prepared by: Federal costs: Kathleen Gramp; impact 
on State, local, and tribal governments: Susan Sieg Tompkins; 
impact on the private sector: Jean Talarico.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.
  
  

                      REGULATORY IMPACT STATEMENT

  In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

Number of persons covered

  The Committee believes that the bill will not subject any 
individuals or businesses affected by the legislation to any 
additional regulation.

Economic impact

  This legislation authorizes significant funding for research 
and development in nanoscale science and technology. However, 
it is not expected to have an adverse economic impact on the 
Nation.

Privacy

  This legislation will not have a negative impact on the 
personal privacy of individuals.

Paperwork

  This legislation will not increase paperwork requirements for 
private individuals or businesses. It would require the 
following reports: (1) an annual report by the Advisory Panel 
reviewing the program's success according to metrics 
established by the Panel; (2) a budget request by each Federal 
agency or department participating in the program submitted to 
the Office of Management and Budget (OMB); (3) an annual report 
to Congress produced by the NSTC detailing the funding levels 
for each agency and department participating in the program; 
and (4) a triennial review conducted by the National Research 
Council evaluating the program's technical success, management 
and coordination, and funding levels.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

  Section 1 would set forth the short title of the bill as 
``The 21st Century Nanotechnology and Research Development 
Act.''

Section 2. Findings

  Section 2 would provide findings concerning the potential 
benefits of nanotechnology, including potential breakthroughs 
in materials and manufacturing, electronics, medicine and 
healthcare, the environment, energy, chemicals, biotechnology, 
agriculture, information technology, and national security.

Section 3. Purpose

  This section would provide for the coordination of an inter-
agency program to support long-term nanoscale research and 
development in certain key areas.

Section 4. National nanotechnology research program

  Subsection (a) would require the President to establish a 
program to fund and coordinate basic nanoscience and 
engineering research among Federal agencies, academic 
laboratories, and the private sector.
  Subsection (b) would identify the program's goals as to 
assure the United States remain a world leader in 
nanotechnology, which will help meet national goals for 
advances in health, manufacturing, technology, education, 
science, energy, the environment, and national security. The 
program also would consider philosophical, ethical, and other 
societal concerns in conjunction with the development of 
nanotechnology.
  Subsection (c) would identify major research and development 
areas. Funding would be authorized to provide awards of less 
than $1 million each to single investigators and small groups 
conducting long-term fundamental, innovative research, and to 
fund the development of university-industry-laboratory and 
interagency partnerships. The program also would support 
``Grand Challenges'', including multidisciplinary 
nanotechnology research centers to achieve long-term 
objectives, such as stronger and lighter nano-materials, 
nanoelectronics, healthcare applications, energy and 
environmental advances, and national security.
  The appropriate agencies would fund 10 new 
``Interdisciplinary Nanotechnology Research Centers'' in the 
range of $3 million to $5 million each year for 5 years. Grants 
could be renewed for another 5-year term following a positive 
performance review. The Centers would assist in reaching other 
priorities, including fundamental research, grand challenges, 
education, development and utilization of specific research 
tools, and promoting partnerships with industry. To the 
greatest extent possible, agencies participating in the program 
would establish geographically diverse centers, including at 
least one center participating in the NSF Experimental Program 
to Stimulate Competitive Research. The program would be 
authorized to use underutilized manufacturing facilities in 
areas of high unemployment for production engineering and 
research testbeds for micron-scale technologies.
  The Director of the NSF would be required to establish a new 
Center for Ethical, Societal, Educational, Legal, and Workforce 
Issues Related to Nanotechnology at a funding level of $5 
million per year. The center would be required to track and 
research the societal, ethical, educational, legal, and 
workforce issues related to nanotechnology. The program, 
through its participating agencies, would ensure cooperation 
and collaboration with United States industries in all relevant 
research efforts and develop mechanisms to ensure prompt 
technology transfer.

Section 5. Program coordination and management

  Subsection (a) would direct the NSTC to oversee the planning, 
management, and coordination of the Federal nanotechnology 
research and development program. The NSTC would be required 
to: establish a set of broad applications for nanotechnology; 
submit an annual report to the Senate Committee on Commerce, 
Science, and Transportation and the House of Representatives 
Committee on Science; coordinate with Federal agencies, 
including the Department of Defense; consult with academic, 
industry, State and local governments and other appropriate 
groups in conducting nanotechnology research; establish an 
Information Services and Applications Council to promote access 
to and early application of new nanotechnologies; and measure 
the program's performance against its goals.
  Subsection (b) would require the President to establish a 
National Nanotechnology Advisory Panel (NNAP) composed of up to 
20 nanotechnology experts who are not Federal employees. The 
panel must represent a cross-section of views and expertise, 
including those related to the societal, ethical, educational, 
legal, and workforce issues in nanotechnology. The panel would 
meet not less than twice annually, issue an annual report 
measuring performance goals, and advise the President and 
inform Congress on matters relating to the NNRP.
  Subsection (c) would require the President also to create a 
NNCO in which a full-time staff will provide day-to-day 
technical and administrative support to the Council and 
Advisory Panel, and be the point of contact for Federal 
nanotechnology activities for government organizations, 
academia, industry, professional societies, and others to 
exchange technical and programmatic information.
  Subsection (d) would establish criteria for the report by the 
National Nanotechnology Advisory Panel. The annual report would 
review the program's technical success according to the 
program's stated goals; review the program's management, 
coordination, and funding levels; assess the degree of 
participation by minority-serving institutions; review policy 
issues arising from advances in nanotechnology; recommend new 
goals, grand challenges, and investments; and evaluate the 
application of new nanotechnologies to commercial and military 
products.
  In addition, subsection (d) would require each Federal agency 
participating in the nanotechnology program, as part of its 
annual request for appropriations, to submit a report to OMB 
that identifies each element of its nanotechnology research 
that contributes directly to the nanotechnology program. In the 
President's annual budget request to Congress, OMB would be 
required to state the amount of funding for each agency related 
to nanotechnology research.
  The NSTC would be required to submit an annual report to 
Congress regarding the nanotechnology research development 
program, including its goals, progress, and funding. No later 
than 6 months after enactment, the Director of the NSF would be 
required to enter into an agreement with the National Research 
Council of the National Academy of Sciences to conduct a 
triennial evaluation of the Federal nanotechnology research and 
development program, and submit that study to the Senate 
Committee on Commerce, Science, and Transportation and House of 
Representatives Committee on Science. The first such evaluation 
shall be transmitted no later than 12 months after the date of 
enactment, with subsequent evaluations transmitted every 3 
years thereafter.

Section 6. Authorization

  NSF would be authorized to spend $221 million in FY 2003 and 
$254.15 million in FY 2004 to carry out the Act. Of the 
authorized funds, $40 million in FY 2003 and $50 million in FY 
2004 would be allocated specifically for grants of up to $5 
million each for multidisciplinary nanotechnology research 
centers. Of the authorized funds, $5 million would be 
authorized for a university-based Center for Societal, Ethical, 
Educational, Legal and Workforce Issues Related to 
Nanotechnology. Of the authorized funds, $5 million for each 
fiscal year would be provided to the NNCO and $5 million would 
be provided to the Science and Technology Policy Institute for 
use in competitive grants to address research areas which are 
not being adequately addressed by the agencies' current 
research programs.
  To carry out the Act, other agencies would be authorized 
appropriations in the following amounts: Department of Energy: 
$139.3 for FY 2003 and $160.195 million for FY 2004; NASA: $22 
million for FY 2003 and $25.3 million for FY 2004; National 
Institutes of Health: $43.2 million for FY 2003 and $49.68 
million for FY 2004; National Institute of Standards and 
Technology: $44 million for FY 2003 and $50.6 million for FY 
2004; Environmental Protection Agency: $5 million for FY 2003 
and $5.75 million for FY 2004; Department of Justice: $1.4 
million for FY 2003 and $1.61 million for FY 2004.

Section 7. Additional reports, studies, and plans

  Subsection (a) would require the President, through NSTC, to 
enter into an agreement with the National Research Council of 
the National Academy of Sciences to conduct a biennial study of 
the relative position of the United States compared to other 
nations with respect to nanotechnology research and 
development. The study would address the following issues: the 
current and likely future position of United States private, 
academic, and government sector research in nanotechnology 
relative to other nations; niche technology research areas 
where the United States is trailing other nations; and 
institutions, funding, and human resource factors that are 
critical to maintaining leadership status in this field. Not 
less than 6 months after receipt of each study, the NSTC would 
develop a plan for addressing issues raised in the study, 
including strategies for investment, strategies for promoting 
international research cooperation, and institutional and 
human-resource changes to be made to achieve or maintain 
leadership status in this field. NSTC will submit the National 
Research Council study and the NSTC plan to the Senate 
Committee on Commerce, Science, and Transportation and the 
House of Representatives Committee on Science, not later than 
18 months after the date of the enactment and every 2 years 
thereafter.
  As authorized by subsection (b), the NSF Director would be 
directed to encourage, conduct, coordinate, commission, 
collect, and disseminate studies on the societal, educational, 
and workforce implications of nanotechnology through the Center 
for Societal, Ethical, Educational, and Workforce Issues 
established under section 4 (c). The NSF Director would collect 
data to assess the anticipated nanotechnology workforce needs 
based on detailed occupation, industry, and firm 
characteristics, and determine the adequacy of the trained 
talent pool in the United States. The Director also would be 
required to submit reports on these issues to the President, 
the NSTC, the Senate Committee on Commerce, Science, and 
Transportation, and the House of Representatives Committee on 
Science not later than 18 months after the date of enactment of 
this Act.

Section 8. Definitions

  This section defines key terms in the Act, including 
``Advisory Panel'', ``fundamental research'', ``grand 
challenges'', ``interdisciplinary nanotechnology research 
center'', ``nanotechnology'', ``program'', and ``research 
infrastructure''.

                        CHANGES IN EXISTING LAW

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, the Committee states that the bill as 
reported would make no change to existing law.

                                
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