To amend Sections 375.10 and 375.20.40 of Am. Sub. H.B. 119 of the 127th General Assembly, to amend Section 235.10.40 of Am. Sub. H.B. 699 of the 126th General Assembly, and to repeal Section 375.20.80 of Am. Sub. H.B. 119 of the 127th General Assembly to increase the funds available for the Ohio Research Scholars Program and to permit a nonpublic four-year Ohio university to submit a proposal for the Ohio Research Scholars Program if the proposal is to be implemented in collaboration with a state college or university.

Section 1. That Sections 375.10 and 375.20.40 of Am. Sub. H.B. 119 of the 127th General Assembly be amended to read as follows:

Sec. 375.10. BOR BOARD OF REGENTS

General Revenue Fund

General Services Fund Group

Federal Special Revenue Fund Group

State Special Revenue Fund Group

Sec. 375.20.40. ECONOMIC GROWTH CHALLENGE

The foregoing appropriation item 235-433, Economic Growth Challenge, shall be used to enhance the basic research capabilities of Ohio's public and private institutions of higher education, support improved doctor of philosophy degree programs throughout the state, and promote the transfer of technology developed by Ohio colleges and universities to private industry to further the economic goals of the state in collaboration with the Third Frontier Project.

Of the foregoing appropriation item 235-433, Economic Growth Challenge, $12,000,000 in each fiscal year shall be used for the Research Incentive Program to enhance the basic research capabilities of public colleges and universities and accredited Ohio institutions of higher education holding certificates of authorization issued under section 1713.02 of the Revised Code, in order to strengthen academic research for pursuing Ohio's economic development goals. The Board of Regents, in consultation with the colleges and universities, shall administer the Research Incentive Program and utilize a means of matching, on a fractional basis, external funds attracted in the previous year by institutions for basic research. The program may include incentives for increasing the amount of external research funds coming to eligible institutions and for focusing research efforts upon critical state needs. Colleges and universities shall submit for review and approval to the Board of Regents plans for the institutional allocation of state dollars received through the program. The institutional plans shall provide the rationale for the allocation in terms of the strategic targeting of funds for academic and state purposes, for strengthening research programs, for increasing the amount of external research funds, and shall include an evaluation process to provide results of the increased support. Institutional plans for the use of Research Incentive funding must demonstrate a significant investment in Third Frontier activities funded at the institution. For a college or university with multiple Third Frontier grants, as much as ten per cent of that institution's Research Incentive funding may be invested in Third Frontier Project-related activities. Each institutional plan for the investment of Research Incentive moneys shall report on existing, planned, or possible relationships with other state science and technology programs and funding recipients in order to further ongoing statewide science and technology collaboration objectives. The Board of Regents shall submit a biennial report of progress to the General Assembly.

In each fiscal year, both those state-assisted doctor of philosophy degree-granting universities and those accredited doctor of philosophy degree-granting Ohio institutions of higher education holding certificates of authorization under section 1713.02 of the Revised Code may elect to participate in the Innovation Incentive Program and may continue to implement their comprehensive plans that are designed to enhance doctor of philosophy degree programs and areas of research that have the greatest potential to attract preeminent researchers and build research capacity; enhance regional or state economic growth by creating new products and services to be commercialized; and complement Ohio's Third Frontier Project.

In each fiscal year, funding for the Innovation Incentive Program shall be generated from the funds reallocated by those participating state-assisted doctor of philosophy degree-granting universities and state matching funds provided in appropriation item 235-433, Economic Growth Challenge. In each fiscal year, the amount of funds each participating state-assisted university is required to internally reallocate shall equal the sum of the funds it was required to reallocate in the prior fiscal year plus one and one-half per cent of current fiscal year's doctoral reserve allocation as attributed by the Board of Regents. Additionally, those participating accredited Ohio institutions of higher education holding certificates of authorization under section 1713.02 of the Revised Code shall be required to set aside an amount comparable to the participating state-assisted universities as determined by the Board of Regents.

Of the foregoing appropriation item 235-433, Economic Growth Challenge, $4,686,194 in each fiscal year shall match a portion of the funds set aside by all participating universities for the Innovation Incentive Program. The Controlling Board may increase the set-aside amount in each fiscal year if the Chancellor of the Board of Regents, after meeting all other obligations, identifies unspent and unencumbered General Revenue Fund money within the Board of Regents budget and requests the Controlling Board to increase the set-aside for the Innovation Incentive Program. The amount of the set-aside increased by the Controlling Board shall not exceed the amount of available funds identified by the Chancellor of the Board of Regents.

The participating universities shall use state matching funds and the funds they internally reallocated to restructure their array of doctor of philosophy degree programs.

The Board of Regents, in consultation with participating universities and the Office of Budget and Management, shall develop guidelines for the length of a transition period and criteria for determining the acceptable level of participation in the Innovation Incentive Program. After completion of the transition period during implementation of the Innovation Incentive Program, in each fiscal year the Board of Regents may withhold up to fifty per cent of the funds each participating state-assisted doctor of philosophy degree-granting university is required to reallocate for that year if the university is not internally reallocating the required amount or does not meet the criteria established by the Board of Regents.

Of the foregoing appropriation item 235-433, Economic Growth Challenge, $500,000 in each fiscal year shall be distributed for the Technology Commercialization Incentive. The purpose of the Technology Commercialization Incentive is to reward public and private colleges and universities for successful technology transfer to Ohio-based business and industry resulting in the commercialization of new products, processes, and services and the establishment of new business start-ups within the state. The Third Frontier Commission, with counsel from the Third Frontier Advisory Board, shall establish the eligibility criteria for public and private colleges and universities interested in applying for Technology Commercialization Incentive funding. To qualify for the funds, public and private colleges and universities must maintain a significant investment in their own technology-transfer and commercialization operation and capabilities, and possess a significant history of successful research partnerships with Ohio-based business and industry.

The Board of Regents, in consultation with the colleges and universities, shall administer the Research Incentive Program to enhance the basic research capabilities of public colleges and universities and accredited Ohio institutions of higher education holding certificates of authorization issued under section 1713.02 of the Revised Code, and strengthen academic research for pursuing Ohio's economic development goals. The Board of Regents shall utilize a means of matching, on a fractional basis, external funds attracted in the previous year by institutions for basic research. The program may include incentives for increasing the amount of external research funds coming to eligible institutions and for focusing research efforts upon critical state needs. Colleges and universities shall submit for review and approval to the Board of Regents plans for the institutional allocation of state dollars received through the program. The institutional plans shall provide the rationale for the allocation in terms of the strategic targeting of funds for academic and state purposes, for strengthening research programs, for increasing the amount of external research funds, and shall include an evaluation process to provide results of the increased support. Institutional plans for the use of Research Incentive funding must demonstrate a significant investment in Third Frontier activities funded at the institution. For a college or university with multiple Third Frontier grants, as much as ten per cent of that institution's Research Incentive funding may be invested in Third Frontier Project-related activities. Each institutional plan for the investment of Research Incentive moneys shall report on existing, planned, or possible relationships with other state science and technology programs and funding recipients in order to further ongoing statewide science and technology collaboration objectives. The Board of Regents shall submit a biennial report of progress to the General Assembly.

Section 2. That existing Sections 375.10 and 375.20.40 of Am. Sub. H.B. 119 of the 127th General Assembly are hereby repealed.

Section 3. That Section 235.10.40 of Am. Sub. H.B. 699 of the 126th General Assembly be amended to read as follows:

Sec. 235.10.40. RESEARCH FACILITY ACTION AND INVESTMENT FUNDS

The Of the foregoing appropriation item CAP-032, Research Facility Action and Investment Funds, up to $3,000,000 shall be used to support the Ohio Research Scholars Program. Any money from this earmark used for capital projects under the Ohio Research Scholars Program shall not be subject to rule 3333-1-21 of the Administrative Code, but shall be subject to any rule adopted to administer the Ohio Research Scholars Program.

The remainder of foregoing appropriation item CAP-032, Research Facility Action and Investment Funds, shall be used for a program of grants to be administered by the Board of Regents to provide timely availability of capital facilities for research programs and research-oriented instructional programs at or involving state-supported and state-assisted institutions of higher education.

Section 4. That existing Section 235.10.40 of Am. Sub. H.B. 699 of the 126th General Assembly is hereby repealed.

Section 5. That Section 375.20.80 of Am. Sub. H.B. 119 of the 127th General Assembly is hereby repealed.

Section 6. Notwithstanding section 3333.67 of the Revised Code, an institution of higher education shall not be required to deposit into an endowment fund the grants awarded under the Ohio Research Scholars Program other than those funded by GRF appropriation item 235-439, Ohio Research Scholars, as originally appropriated in Am. Sub. H.B. 119 of the 127th General Assembly. The grant agreement for an Ohio Research Scholars award shall specify, if applicable, the portion of the award that is required to be deposited in an endowment fund and the portion that is restricted for capital projects.

Notwithstanding sections 3333.61 to 3333.70 of the Revised Code, a nonpublic four-year Ohio institution of higher education may submit a proposal for the Ohio Research Scholars Program to recruit scientists to the faculty of the nonpublic institution if the proposal is to be implemented in collaboration with a state university or college, as defined in section 3333.60 of the Revised Code. If the Chancellor of the Board of Regents grants a nonpublic institution an award under the Ohio Research Scholars Program, the nonpublic institution shall comply with all requirements of sections 3333.61 to 3333.70 of the Revised Code and the rules adopted under section 3333.61 of the Revised Code that apply to state universities or colleges awarded grants under the Ohio Research Scholars Program.

Section 7. The sections of law contained in this act, and the items of which they are composed, are not subject to referendum. Therefore, under Ohio Constitution, Article II, Section 1d and section 1.471 of the Revised Code, the sections and items of law go into immediate effect when this act becomes law.