No Subsidies for Wealthy Universities Act
This bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs) with endowments above specified thresholds. (Generally, indirect costs represent expenses that are not specific to a research project but are needed to maintain the infrastructure and administrative support for federally funded research.)
Specifically, the National Center for Education Statistics (NCES) must annually collect information regarding the endowments of each IHE that has entered into a program participation agreement with the Department of Education.
With this collected information, NCES must identify and make lists of (1) each IHE with an endowment of more than $5 billion, and (2) each IHE with an endowment of more than $2 billion (but not more than $5 billion). NCES must submit these lists to the Office of Management and Budget, which must then distribute the lists to federal agencies, Congress, and the public.
The bill establishes the following limits on the indirect costs allowable under federal research awards:
The Government Accountability Office must annually report to Congress on indirect cost reimbursement on federal research awards for IHEs.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 422 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 422
To establish Federal research award reimbursement limits for indirect
costs for institutions of higher education, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 15, 2025
Mr. Cline (for himself, Mr. Clyde, and Mr. Harris of Maryland)
introduced the following bill; which was referred to the Committee on
Science, Space, and Technology, and in addition to the Committee on
Education and Workforce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To establish Federal research award reimbursement limits for indirect
costs for institutions of higher education, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``No Subsidies for Wealthy
Universities Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Agency.--The term ``agency'' has the meaning given the
term in section 551 of title 5, United States Code.
(2) Direct cost.--The term ``direct cost'' has the meaning
given the term in subpart E of part 200 of title 2, Code of
Federal Regulations (or any successor regulation).
(3) Endowment fund.--The term ``endowment fund'' has the
meaning given the term in section 312(c) of the Higher
Education Act of 1965 (20 U.S.C. 1058(c)).
(4) Federal research award.--The term ``Federal research
award'' means support provided to an individual or entity by an
agency to carry out research activities, which may include
support in the form of a grant, contract, cooperative
agreement, or other transaction.
(5) Indirect cost.--The term ``indirect cost'' has the
meaning given the term in subpart E of part 200 of title 2,
Code of Federal Regulations (or any successor regulation).
(6) Indirect cost rate.--The term ``indirect cost rate'',
with respect to a project supported under a Federal research
award, means the ratio, expressed as a percentage, of the
indirect costs of the project to the direct costs of the
project, as determined in accordance with subpart E of part 200
of title 2, Code of Federal Regulations (or any successor
regulation).
(7) Institution of higher education.--The term
``institution of higher education'' has the meaning given such
term in section 102 of the Higher Education Act of 1965 (20
U.S.C. 1002).
SEC. 3. CAPPING INDIRECT COSTS ALLOWABLE UNDER FEDERAL RESEARCH AWARDS.
(a) Endowment Calculations.--
(1) Collection by nces.--Not later than September 30 of
each year, the Commissioner for Education Statistics shall--
(A) collect information regarding the value of the
endowment funds, as of September 30 of the preceding
fiscal year, of each institution of higher education
that has entered into a program participation agreement
with the Secretary of Education under section 487(a) of
the Higher Education Act of 1965 (20 U.S.C. 1094(a));
(B) use the data described in subparagraph (A) to
identify--
(i) each such institution of higher
education with endowment funds that, in total,
are valued at more than $5,000,000,000, as of
September 30 of the preceding fiscal year; and
(ii) each such institution of higher
education with endowments funds that, in total,
are valued at more than $2,000,000,000 but not
more than $5,000,000,000, as of September 30 of
the preceding fiscal year; and
(C) make lists of the institutions identified under
each of clauses (i) and (ii) of subparagraph (B) and
submit such lists to the Director of the Office of
Management and Budget.
(2) Distribution by omb.--Not later than September 30 of
each year, the Director of the Office of Management and Budget
shall make the lists described in paragraph (1)(C) available
to--
(A) the head of each agency;
(B) Congress; and
(C) the public.
(b) Limits on Indirect Cost Reimbursements for Institutions With
Significant Endowment Funds.--
(1) Prohibition for institutions with highest endowment
funds.--Notwithstanding any other provision of law, the head of
an agency making a Federal research award for a fiscal year to
an institution of higher education identified under subsection
(a)(1)(B)(i) for the preceding fiscal year shall not allow any
Federal research award funds to be used for indirect costs.
(2) Indirect cost rate limit for institutions with
substantial endowment funds.--Notwithstanding any other
provision of law, the head of an agency making a Federal
research award for a fiscal year to an institution of higher
education identified under subsection (a)(1)(B)(ii) for the
preceding fiscal year shall establish an indirect cost rate for
the Federal research award that is not more than 8 percent.
(c) Limits on Indirect Cost Reimbursements Rates for Other
Institutions.--Notwithstanding any other provision of law, the head of
an agency making a Federal research award for a fiscal year to an
institution of higher education not identified under clause (i) or (ii)
of subsection (a)(1)(B) for the preceding fiscal year shall establish
an indirect cost rate for the Federal research award that is not more
than 15 percent.
(d) Program Participation Agreement Requirement.--Section 487(a) of
the Higher Education Act of 1965 (20 U.S.C. 1094(a)) is amended by
adding at the end the following:
``(30) The institution will annually provide the
Commissioner for Education Statistics with the endowment fund
information needed by the Commissioner to carry out section
3(a)(1) of the No Subsidies for Wealthy Universities Act.''.
SEC. 4. IMPROVING OVERSIGHT OF INDIRECT COST REIMBURSEMENT.
The Comptroller General of the United States shall prepare and
submit to Congress an annual report regarding the indirect costs
reimbursed under Federal research awards made to institutions of higher
education for the preceding fiscal year. The report shall--
(1) determine, to the extent practicable, for such fiscal
year--
(A) the amount of reimbursed indirect costs for
Federal research awards that were used for
administrative staff compensation at institutions of
higher education; and
(B) the amount of reimbursed indirect costs for
Federal research awards that were used for compensation
for administrative staff members with responsibilities
related to diversity, equity, and inclusion;
(2) identify the research fields that receive the highest
levels of funding from Federal research awards made to
institutions of higher education; and
(3) identify--
(A) the agencies that awarded the highest amount of
Federal research award funds to institutions of higher
education; and
(B) the institutions of higher education that
received Federal research awards from such agencies.
SEC. 5. EFFECTIVE DATE; APPLICABILITY.
This Act shall take effect on the date that is 1 year after the
date of enactment on this Act and shall apply with respect to Federal
research awards made on or after such date.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Science, Space, and Technology, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Science, Space, and Technology, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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