Us Congress 2023-2024 Regular Session

Us Congress House Bill HB8224

Introduced
5/2/24  

Caption

No Subsidies for Wealthy Universities Act

Impact

This legislation is anticipated to significantly impact the financial operations of universities with substantial endowments, compelling them to rely more heavily on their own resources rather than federal funds for indirect costs. By reducing federal financial support for these wealthy institutions, the bill aims to redirect funds toward colleges and universities with less financial backing. Proponents argue that it is a necessary measure to ensure equitable distribution of federal resources, fostering a more level playing field for institutions across the higher education landscape.

Summary

House Bill 8224, known as the 'No Subsidies for Wealthy Universities Act', seeks to establish regulations regarding the reimbursement of indirect costs associated with federal research awards for institutions of higher education. Specifically, the bill targets institutions with significant endowment funds, setting limits on the amount that can be reimbursed for indirect costs, which are often used to cover administrative expenses and funding surpluses. Institutions with endowment funds exceeding $5 billion will not be allowed to use federal awards for indirect costs, while those with funds between $2 billion and $5 billion will be capped at an indirect cost reimbursement rate of 8%. Furthermore, other institutions will face a maximum reimbursement rate of 15%.

Contention

One notable point of contention surrounding HB 8224 involves the implications for academic research and the administrative capacity of both wealthy and less wealthy institutions. Critics argue that limiting indirect cost reimbursements may hinder the research capabilities of top-tier universities, where administrative costs can be substantial. As a result, there are concerns that this could lead to a two-tier system in higher education, where research is disproportionately centered at institutions with ample private funding, potentially stifling innovation in weaker financial contexts.

Companion Bills

US SB4247

Same As No Subsidies for Wealthy Universities Act

Similar Bills

US HB420

Federal Grant Accountability ActThis bill limits the indirect costs that are allowable under federal research awards to institutions of higher education (IHEs). (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 total amount of indirect costs allowable under a federal research award may not exceed the total amount of indirect costs allowable under private research awards. The Office of Management and Budget must determine the average indirect cost rate applicable to private research awards.Additionally, the Government Accountability Office must study and report on (1) the indirect cost rates allowable under federal research awards to IHEs, including awards made by the National Institutes of Health, the National Science Foundation, and other such organizations; and (2) the indirect cost rates allowable under private research awards to IHEs.

CA SJR4

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US HB422

No Subsidies for Wealthy Universities ActThis 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:for an IHE with an endowment of more than $5 billion, the IHE is prohibited from using these awards for indirect costs;for an IHE with an endowment of more than $2 billion (but not more than $5 billion), the IHE is limited to an indirect cost rate of 8%; andfor all other IHEs, an indirect cost rate of 15%.The Government Accountability Office must annually report to Congress on indirect cost reimbursement on federal research awards for IHEs.

US SB4247

No Subsidies for Wealthy Universities Act

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Relating to the contract terms of certain grants awarded by the Cancer Prevention and Research Institute of Texas.

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