1. (a) Only expenditures from restricted research awards made from the following types of projects and activities and sponsored by federal, state, or local governmental agencies; private philanthropic organizations and foundations; industry associations, for-profit businesses; or individuals shall be classified as restricted research expenditures:

   1. (1) Sponsored R&D, as defined in §13.122 of this title (relating to Definitions).
   2. (2) Sponsored instruction and training, as defined in §13.122 of this title.
   3. (3) Restricted gifts for R&D as defined in §13.122 of this title.
   4. (4) Other sponsored activities as defined in §13.122 of this title.
   5. (5) Pass-through funds as defined in §13.122 of this title, that are to entities other than institutions eligible for either TCRF or CRSF.
   6. (6) Multiple Function Awards, as defined in §13.122 of this title if the scope or activities of the restricted awards include R&D, these are subject to the following limitation: if the purpose of a restricted award is primarily (more than 50 percent) research, then all expenditures, unless prohibited in §13.126 of this title (relating to Reporting of Restricted Research Expenditures), made from that award qualify as restricted research expenditures. If the purpose of the restricted award is not primarily research (less than 50 percent), then none of the expenditures may be counted as restricted research. Primary purpose will normally be demonstrated by more than half of the funds having been budgeted for research, but may be demonstrated by the sponsor's statement of purpose or other documented evidence.
2. (b) Institutions shall document the process for determining restricted research awards and shall maintain documentation justifying the rationale used to classify the awards as restricted research.
3. (c) For reporting purposes, institutions shall use the accrual accounting method as required by the Texas Comptroller for the Government-wide Financial Statements for the restricted research expenditure report.

Source Note:The provisions of this §13.124 adopted to be effective May 15, 2005, 30 TexReg 2664; amended to be effective August 26, 2009, 34 TexReg 5679; amended to be effective November 29, 2011, 36 TexReg 8014; amended to be effective November 25, 2015, 40 TexReg 8207.