In the August 27, 1999 Issue:

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House Eliminates Funding for ATP
Before Congress left for its August break, the House voted 217-210 to pass the Commerce-State-Justice Appropriation Bill. Among other items, the Bill (H.R. 2670) eliminates all funding for the Advanced Technology Program (ATP). With this zeroing-out of funding for ATP, NIST’s total appropriation would be $436.7 million, $300.3 million below the request of $735.0 million, and $210.5 million below FY1999 funding of $647.2 million.

The House Appropriations Committee report submitted with the bill says that after many years in existence, ATP has not produced a body of evidence to overcome fundamental questions about whether the program should exist in the first place. Given the tremendous financial constraints under which the Committee is operating, the Committee concludes that funding would be better spent on other higher priority programs and recommends that the ATP program be terminated.

This decision coincides with House Science Committee Chairman James Sensenbrenner, Jr.’s (R-WI) announcement that the General Accounting Office (GAO) has released a draft report showing that ATP reforms designed to ensure federal grants are not displacing private capital still have not been implemented.

Specifically, according to Sensenbrenner, GAO found that for the FY 1999 grant competition, ATP applicants were asked to describe why full private funding is not available and to describe their efforts to secure internal funding as well as external private funds. However, the GAO draft report says that program officials stated that ATP would not immediately disqualify an applicant if the applicant did not complete the new section as long as the rest of the application was in order.

Chairman Sensenbrenner stated, “I’m deeply discouraged by the GAO’s finding. Year after year administration officials assure Congress that ATP has been reformed and federal funds are not being wasted. Yet we now find applicants are in good standing regardless of whether they comply with the new application requirement - making the whole reform exercise a sham.”

The Clinton Administration has called the series of appropriation bills passed in recent weeks a decimation of the federal R&D budget (see related article in the 8/13/99 issue of the SSTI Weekly Digest.)

The Senate has also passed its Commerce Appropriations Bill, S. 1217. In the Senate version the Committee recommends $226,500,000 for ATP for fiscal year 2000. This amount is $23,000,000 above the fiscal year 1999 appropriated level, but $25,000,000 below the fiscal year 2000 request. The level provided by the Committee for the ATP Program would fund fully the requested level of $137,600,000 for awards created in fiscal years 1996, 1997, 1998, and 1999 and will make $73,000,000 available for new awards in fiscal year 2000.

The NIST appropriation bills now await House-Senate conference when Congress returns in September. The draft GAO report that Sensenbrenner cites is not currently available to the public.

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Missouri Launches $20 Million State Seed Capital Program
This year’s second attempt to pass legislation establishing a state-funded seed capital program in Missouri was successful during the waning hours of the 1999 session of the Missouri General Assembly. SB 518, the Missouri New Enterprise Creation Act, authorizes the creation of up to four seed capital funds at the state’s innovation centers to support new technology-based companies in the state. Funding for the program will be generated through $20 million in tax credits, with a maximum limit of $5 million in credits each year.

The legislation calls for a state seed capital and commercialization strategy to be developed and approved by a yet-to-be-established Missouri Seed Capital Investment Board prior to the creation of the seed capital funds. One fund is exempted from this provision and will be started immediately to assist any of the up to 7,000 Missourians to be laid off by the Boeing Corporation over the next two years.

“These employees are highly skilled and trained in the latest technology,” Governor Mel Carnahan said of the Boeing layoffs while signing SB 518. “Based on historical data... we expect five percent of those employees will start their own business. We want to give them the opportunity to succeed.”

According to the August 24, 1999 issue of NASVF Net News, the electronic newsletter of the National Association of State Venture Funds, “[a] professional fund management team will be recruited to provide Missouri-wide coverage. Visibility and accessibility to the fund in all regions of the state will be achieved through the placement of qualified partners or associates near or in each of the innovation centers located in St. Louis, Kansas City, Columbia and Rolla/Springfield. The centers and other organizations concerned with technology development will provide an existing deal flow network. The team will work alongside center staff to support commercialization of technologies from area universities and laboratories, and to participate in periodic educational events for Missouri entrepreneurs and angel investors.”

Additional information on the Missouri New Enterprise Creation Act can be obtained from http://www.senate.state.mo.us or from Chip Cooper at 573-446-3104; email: michc@showme.missouri.edu .

More information on the National Association of State Venture Funds can be found at http://www.nasvf.org.

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1999 NASA STTR Selections Announced
NASA has named 20 companies from 13 states as recipients of the agency’s 1999 Small Business Technology Transfer (STTR) Program Phase I solicitation. NASA received 82 proposals from 59 companies in this year’s competition.

Each selected project will receive a fixed-price, one-year contract with NASA for up to $100,000. Successful Phase I recipients may compete for two-year Phase II contracts of up to $500,000 next year.

All STTR awards involve partnerships between the selected companies and research institutions. While the small business is the recipient of the award, a minimum of 30 percent of the research must be completed at the research institution, and the small business must perform at least 40 percent.

The accompanying table presents the state-by-state awards-to-proposals statistics and a breakdown of home state for each of the selected companies and their research partners. Eight of the NASA awards involve small businesses and research institutions from different states.

More information on the NASA STTR program, including abstracts of the selected projects, can be found on the World Wide Web at http://sbir.nasa.gov

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Federal Manufacturing Task Force Created
Vice President Gore has announced the creation of an interagency task force to recommend ways to strengthen the U.S. manufacturing sector for the 21st century. Gene Sperling, director of the National Economic Council, will lead the group, charged with presenting specific recommendations on how government policies and programs can preserve and enhance American manufacturing.

The work of the Manufacturing Task Force is to be completed by early next year, providing time to incorporate any recommendations for changes into the Administration’s FY 2001 budget request. Other federal agencies serving on the task force were not identified in the Vice President’s announcement.

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