Senate Research Center   S.B. 1630
78R8344 JSA-FBy: Ratliff/Barrientos
As Filed


Current Texas law allows 50 percent of a university's indirect cost
reimbursements to be deducted  from the institution's state general
revenue appropriations.   By losing half the value of these overhead
payments on research grants, institutions are being taxed by the state for
their ability to attract external grants.  If institutions could retain
100 percent of the indirect cost, the money could be reinvested in the
research enterprise to help attract even more external funds.  As
proposed, S.B. 1630 provides that no more than 40 percent, rather than 50
percent, of funds received for paying overhead costs may be used to reduce
general revenue appropriations to general academic and teaching
institutions and medical and dental schools.  


This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 


SECTION 1.  Amends Section 145.001(c), Education Code, to provide that if
the legislature in the General Appropriations Act, adopts a funding
provision for the application of certain locally generated funds to be
appropriated to a general academic teaching institution or medical or
dental unit in such a way as to reduce the general revenue appropriated to
it, then: 

(1)  not more than 40 percent, rather than 50 percent, of funds may be
applied to pay for overhead cost; 

(2)  for the state fiscal year beginning September 1, 2005, and for each
subsequent state fiscal year, the amount of funds that may be applied
under this subsection to reduce general revenue appropriations to a
general academic teaching institution or a medical or dental unit may not
include any funds received after August 31, 2005, for paying overhead
costs in connection with a research grant awarded or renewed after that
date or a research contract entered into or renewed after that date; and 

(3)  Requires that not  less than 40 , rather than more of 50, percent, of
the funds that are retained but not applied to reduce general revenue
appropriations to be expended under guidelines approved by the
institution's governing board for projects encouraging further research at
the unit, agency, or department level at which the research was conducted,
to meet certain requirements.   

(4)  Redesignates Subdivision (3) as (4).  Makes a conforming change. 

SECTION 2.  Effective date: September 1, 2003.  Makes application of this
Act prospective.