INDIRECT COSTS.

SEC. 203. INDIRECT COSTS. (a) Matching Funds.—Matching funds required pursuant to section 204(a)(2)(C) of the Academic Research Facilities Modernization Act of 1988 (42 U.S.C. 1862c(a)(2)(C)) shall not be considered facilities costs for purposes of determining indirect cost rates under Office of Management and Budget Circular A–21. (b) Report.— (1) In general.—The Director of the Office of Science and Technology Policy, in consultation with other Federal agencies the Director deems appropriate, shall prepare a report— (A) analyzing the Federal indirect cost reimbursement rates (as the term is defined in Office of Management and Budget Circular A-21) paid to universities in comparison with Federal indirect cost reimbursement rates paid to other entities, such as industry, government laboratories, research hospitals, and nonprofit institutions; (B)(i) analyzing the distribution of the Federal indirect cost reimbursement rates by category (such as administration, facilities, utilities, and libraries), and by the type of entity; and (ii) determining what factors, including the type of research, influence the distribution; (C) analyzing the impact, if any, that changes in Office of Management and Budget Circular A–21 have had on— (i) the Federal indirect cost reimbursement rates, the rate of change of the Federal indirect cost reimbursement rates, the distribution by category of the Federal indirect cost reimbursement rates, and the distribution by type of entity of the Federal indirect cost reimbursement rates; and (ii) the Federal indirect cost reimbursement (as calculated in accordance with Office of Management and Budget Circular A–21), the rate of change of the Federal indirect cost reimbursement, the distribution by category of the Federal indirect cost reimbursement, and the distribution by type of entity of the Federal indirect cost reimbursement; (D) analyzing the impact, if any, of Federal and State law on the Federal indirect cost reimbursement rates; (E)(i) analyzing options to reduce or control the rate of growth of the Federal indirect cost reimbursement rates, including options such as benchmarking of facilities and equipment cost, elimination of cost studies, mandated percentage reductions in the Federal indirect cost reimbursement; and (ii) assessing the benefits and burdens of the options to the Federal Government, research institutions, and researchers; and (F) analyzing options for creating a database—112 STAT. 876 (i) for tracking the Federal indirect cost reimbursement rates and the Federal indirect cost reimbursement; and (ii) for analyzing the impact that changes in policies with respect to Federal indirect cost reimbursement will have on the Federal Government, researchers, and research institutions. (2) Report to congress.—The report prepared under paragraph (1) shall be submitted to Congress not later than 1 year after the date of enactment of this Act.