In the June 21, 1996 Issue:

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Update on the FY 1997 Budget
Last week, the House and the Senate approved the concurrent (final) budget resolution for FY 1997. The $1.63 trillion spending blueprint establishes broad spending targets for the coming fiscal year. Nondefense R&D is budgeted at $32.2 billion in FY 1997, down from the FY 1996 total of $32.7 billion.

The AAAS R&D Budget and Policy Project has calculated the impact of the resolution on nondefense r&d. The impact on the major r&d agencies breaks down as follows:



Agency/Program		 R&D

FY 1995

R&D

FY 1996 (est.)

R&D

FY 1997 (proj.)

HHS 11,690 12,091 11,925
NASA 9,875 9,416 9,316
DOE (nondefense) 3,969 3,577 3,456
NSF 2,544 2,401 2,464
USDA 1,540 1,425 1,425
Commerce 1,284 948 880

All figures in million of dollars budget authority Source: AAAS Analysis

Congress continues work on the 13 appropriations bills which will fund discretionary program, including federal r&d spending. As of June 13, the House had approved four appropriations bills: Defense (HR3610); Agriculture (HR 3603); Foreign/AID (HR 3540) and Military Construction (HR 3517).

The AAAS R&D Budget and Policy Project tracks proposed funding levels for r&d in the various appropriations bills as they move through Congress. The information is available at its web site: http://www.aaas.org/spp/dspp/rd/rdwwwpg.htm

NIJ Seeks Proposals for R&D Projects
The Justice Department's National Institute of Justice has announced that $4 million is available for projects that would support research, development, and application of innovative technologies for the enhancement of community policing efforts across the country. The technologies should be able to be commercialized with a focus on affordability, reliability, and effective use by the law enforcement community.

Research and development to be supported under the solicitation is intended to (1) improve police-citizen cooperation and communication, (2) increase police and citizen ability to solve community problems innovatively, and (3) promote the effective flow of information and feedback from inside and outside law enforcement agencies.

Grants will be awarded in the following five project categories:

NIJ encourages the use of the National Law Enforcement and Corrections Technology Center (NLECTC) in Rockville, Maryland, or the regional NLECTCs (in Rome, New York: Charleston, South Carolina; Denver, Colorado; and El Segundo, California) for assistance, field testing, evaluation, and demonstration.

Proposals are due on August 1 and must show an active partnership between a law enforcement agency and a private company, educational institutions, nonprofit organizations, or individuals.

The solicitation is available on the Justice Information Center's home page at http://www.ncjrs.org/fedgrant.htm (select NIJ Solicitation: Technology Research and Development Partnership Projects for Community Policing) or from the State Science and Technology Institute at 614/421-SSTI (7784).

Applicants are encouraged to contact NIJ before submitting proposals. To obtain further information, applicants may contact the program manager, Trent DePersia, by fax at 202/307-9907.

GAO Uncertain About Impact of R&D Tax Credit
The General Accounting Office (GAO) has released a report, "Tax Policy and Administration: Review of Studies of the Effectiveness of the Research Tax Credit," that concludes that much uncertainty remains about the responsiveness of research spending to tax incentives. There was mixed evidence that the amount of research and development spending stimulated by the federal credit equals or exceeds the cost of the lost revenue.

GAO found that it was "unable to conclude from the recent studies that they provide adequate evidence that a dollar of research tax credit would stimulate a dollar of additional research spending."

GAO determined that the studies were limited by both the data and the methodologies used. The lack of adequate data was attributed largely to the use of publicly available data rather than tax return data. Tax return data are confidential and therefore were unavailable for the studies. The primary source of data was the COMPUSAT service, which provides financial information on publicly traded companies drawn from such sources as annual reports and SEC filings. In the opinion of the GAO authors, "publicly available data are not a suitable proxy for tax return data when measuring this incentive because the public sources use different definitions of taxable income and research spending."

The GAO report examined eight studies about the federal tax credit including studies reviewed earlier by the Office of Technology Assessment and KPMG Peat Marwick. (The Peat Marwick report, "Tax Incentives for R&D: What Do the Data Tell Us?" was commissioned by the Council on Research and Technology). GAO also reviewed academic articles and government studies relating to mechanisms for determining the social benefits of research spending.

Copies of the report (GAO/GGD-96-43) are available from GAO at 202/512-6000.

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