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78R8344 JSA-F

By:  Ratliff                                                      S.B. No. 1630



A BILL TO BE ENTITLED

AN ACT

relating to overhead expenses of conducting research at 
institutions of higher education and the indirect cost 
reimbursement related to that research.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 145.001(c), Education Code, is amended 
to read as follows:
	(c)  In the General Appropriations Act, the legislature may 
adopt a method of funding provision that provides for the 
application of certain locally generated funds to the general 
revenue funds to be appropriated to a general academic teaching 
institution or a medical or dental unit in such a way as to reduce 
the general revenue to be appropriated to it.  If such a provision 
is adopted, it is specifically provided that:
		(1)  not [that no] more than 40 [50] percent of funds 
received by a general academic teaching institution or a medical or 
dental unit for paying overhead costs may be so applied;
		(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;
		(3)  not [that no] less than 40 [50] percent of the 
funds that are retained but not applied to reduce general revenue 
appropriations shall 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, including:
			(A)  conducting early pregnant feasibility 
studies;                        
			(B)  preparing competitive proposals for 
sponsored programs;               
			(C)  providing carryover funding for research 
teams to provide continuity between externally funded projects;
			(D)  supporting new researchers pending external 
funding;                  
			(E)  engaging in research programs of critical 
interest to the general welfare of the citizens of this state;
			(F)  purchasing capital equipment directly 
related to expanding the research capability of the institution;  
and
			(G)  research or project administrative costs;  
and                        
		(4) [(3)  that] the retained funds not applied to 
reduce general revenue appropriations remaining after the 
application of Subdivision (3) [(2)] of this subsection will be 
used by a general academic teaching institution or a medical or 
dental unit to support research as approved by a general academic 
teaching institution or a medical or dental unit.
	SECTION 2.  (a)  This Act takes effect September 1, 2003, and 
applies to each state fiscal year that begins on or after that date.
	(b)  The change in law made by this Act does not affect the 
application of Section 145.001, Education Code, to a state fiscal 
year before the state fiscal year that begins September 1, 2003.