In order to provide independent and extensive support to scientific research and to the research infrastructure, to provide assistance for young researchers and to promote the achievement of scientific achievements of international standards the Parliament is adopting the following Act on the Hungarian Scientific Research Fund Programmes (Hungarian Scientific Research Fund Programs, hereinafter referred to as “OTKA”):

Section 1

(1) The implementation of the duties of OTKA shall be funded from an appropriation in separated chapter management within the central budget.

2) The budget appropriated for OTKA shall be used for the provision of financial support, through a competitive bidding scheme, to scientific research projects and the requirements of the performance of such research and the publication of the achievements thereof, as are expected to lead to the recognition of new scientific laws, to the generation of new scientific knowledge and the elaboration of new methods and techniques. The OTKA appropriation may be used for the improvement of infrastructure facilities required for the achievement of scientific results.

(3) The rights of the organisation supervising the chapter with respect to the appropriation of OTKA shall be exercised by the President of the Hungarian Academy of Sciences (hereinafter: the “Academy”), with the exception of the rights reserved by the Parliament or the Government.

(4) The sources of OTKA’s revenues:

a) the appropriation for financial support specifically established for this purpose each year in the annual budget of the Republic of Hungary;

b) payments and contributions from domestic and foreign legal entities and natural persons as well as the re-payments effected by domestic recipients.

(5) The availability of the central budgetary support - in compliance with the regulations pertaining to the source - shall be specified in the funding schedule.

(6) Voluntary financial contributions to OTKA qualify as commitments undertaken in the public interest in conformity with Sections 593-596 of the Civil Code.

Section 2

(1) The Hungarian Scientific Research Fund Programmes Committee (Országos Tudományos Alapprogramok Bizottsága, hereinafter: “OTKA Committee”) shall be the executive body of OTKA - it shall be comprised of a President, two Vice-Presidents and fifteen members. One Vice-President shall be proposed by the Hungarian Rectors’ Conference, the Conference of College Directors General and the Rectorial Congress of Universities of Art together, the other Vice-President shall be proposed by the Board of Academic Research Places.

(2) The President and the Vice-Presidents shall be appointed by the Prime Minister - on the joint proposal of the President of the Hungarian Academy of Sciences and the Minister of Education and Culture - for a period of three years. The appointment may be extended once, for another three year period.

(3) The membership of the OTKA Committee:

a) five experts proposed by the Minister of Education and Culture - in agreement with the Minister of Agriculture, Minister of Industry, Trade and Tourism, the Minister of Environment Protection and Regional Planning, the Minister of Transport, Communication and Water Management and the Minister of Welfare;

b) two experts proposed by the President of the Hungarian Academy of Sciences;

c) one expert proposed by the directors of Public Collections;

d) three experts proposed by higher education conferences;

e) one expert proposed by the Acting President of the National Technical Development Board (Országos Műszaki Fejlesztési Bizottság);

f) the Presidents of the three Scientific Colleges.

(4) With the exception of the Presidents of the Scientific Colleges the members of the OTKA Committee shall be appointed by the Prime Minister for a three year period. The appointment may be extended once, for another three years. The members of the OTKA Committee who are not civil servants shall not be members at the same time of the executive body of any other scientific support programme operating with central governmental funding. The position of the civil servants invited to the OTKA Committee as per Section 2 (3) a) shall be terminated upon the termination of their employment as civil servants..

(5) Within the OTKA Committee there shall be Scientific Colleges for the various scientific fields. The Presidents and members of the Scientific Colleges shall be appointed by the President of the Committee on the basis of the proposal of the OTKA Committee formulated trough secret ballot, for a period of three years. The appointment of the Presidents of the Colleges may be extended once, for another three year period.

(6) The responsibilities of the President of the OTKA Committee shall be comprised of the following:

a) submission of proposal to the OTKA Committee for the allocation of the funds in accordance with the key legal titles;

b) annual reporting on the operations of OTKA to the Government;

c) representation of OTKA; this power may be delegated to the Vice Presidents or to members of the Committee - for single cases or for defined groups of issues;

d) procurement of the preparation of the Organisational and Operational Rules of OTKA which he/she forwards to the Government for agreement;

e) appointment of the Presidents and members of the Scientific Colleges on the basis of the proposals put forth by the OTKA Committee;

f) management of the OTKA Office, exercising of the employer’s rights with respect to the head and the employees of the Office.

(7) The responsibilities OTKA Committee shall be comprised of the following:

a) decision on the allocation by key legal titles of the funds on the basis of the proposal put forth by the President;

b) identification of the priority research areas and goals of expenditure;

c) putting forth proposal to the Government concerning the amount of the budgetary funding of OTKA;

d) decision on the provision of support to bids submitted for financial assistance and the breakdown of the appropriation for such bids on the basis of the proposal formulated by the Scientific Colleges;

e) approval of the annual budgetary report;

f) submission of proposal to the President concerning the members of the Scientific Colleges, on the basis of the recommendations submitted by scientific organisations and communities and individual holders of scientific degrees;

g) approval of the Organisational and Operational Rules of OTKA;

h) preparation of a summary for the report of the President of the Academy to be made to Parliament on the outstanding scientific results and developments of the scientific infrastructure achieved with the financial assistance provide by OTKA.

Section 3

(1) The technical, financial, organisational and administrative tasks associated with the operation of OTKA shall be performed by the OTKA Office (hereinafter: “Office”).

(2) The Office shall be operating as a central budgetary organ, supervised by the Secretary General of the Academy.

(3) The operating expenses of the Office - including the honoraria paid to the experts involved in the evaluation of the bids - shall be covered from OTKA’s budgetary appropriation.

Section 4

(1) Financial aid shall be granted by OTKA through open competitive bidding.

(2) Invitation of bids shall be put out by the President of the Committee - on the basis of the proposal by the OTKA Committee.

(3) Personal expenditures and associated taxes/contributions and material as well as investment type expenditures may be covered from the budgetary appropriation of OTKA, in the form of

a) current expenditures associated with scientific research,

b) participation in international scientific research,

c) scholarship grants (with special regard to the necessity of promoting scientific activities of young researchers),

d) financial support to publication activities, and

e) costs associated with the procurement of instruments, equipment and other necessary means of scientific research (in the framework of bids for specific themes, infrastructure development).

(4) OTKA appropriation may not be expended on construction, renovation or real estate procurement.

(5) Financial assistance granted to bids shall not provide coverage for profit.

(6) Members of the OTKA Committee shall not participate in projects contained in bids for OTKA support submitted during the term of their appointment. Bids submitted by members of the Scientific Colleges shall be appraised by the OTKA Committee. No individual with an interest in a given bid, nor one biased in any other way shall participate in the evaluation process of such bid or vote on its financial support.

(7) OTKA may provide financial support for a thematic bid for three years in general - or under special circumstances - for a maximum of five years.

(8) The OTKA Committee may undertake commitments - including the commitments undertaken in prior years - for the next two years up to 85% of the current year’s budgetary appropriation.

Section 5

(1) Bids shall be evaluated from a technical/professional and from a budgeting perspective by Hungarian and/or foreign experts invited by the juries operating within the Scientific Colleges of OTKA. The juries shall rank bids on the basis of the experts’ opinions and they shall submit proposals concerning the granting of financial support. Such ranks shall be public. On the basis of the comments of the technical juries, in view of the priority scientific research directions established by the OTKA Committee the Scientific Colleges shall submit proposals to the OTKA Committee on the supporting of bids, with the appropriation allocated in a breakdown by the key items of the expenditure plan.

(2) In order to appraise the bids received the bodies referred to in the above sub-section (1) shall meet at least twice a year. The factors taken into account in making a decision concerning the supporting of a bid include the scientific results achieved by the given bidder in earlier projects supported by OTKA.

(3) Bidders shall be informed of the decision made by the OTKA Committee within 30 days of decision making. The OTKA Committee shall disclose its decisions in its official publication.

Section 6

(1) The President of the OTKA Committee executes contracts with bidders granted OTKA’s financial support and the research places providing the requirements of the research.

(2) Where the requirements of the research activity is provided by some organisation the amount of the financial aid provided by OTKA - with the exception of the coverage for overhead costs and the administration costs - shall be managed with the bidder’s right of disposal reserved - in the case of a research place belonging to the sphere of Treasury financing among the appropriations of the research place, in the case of other research places on their respective bank accounts.

(3) The conditions of the expenditure of financial aids won through bids submitted for infrastructure development shall be contained in the contract concluded between the President of the OTKA Committee and the successful bidder.

(4) The tangible assets and inventories purchased by the successful bidder with the OTKA aid money shall be recorded in the asset registry of the research place providing the requirements of the research activity, for the period of the validity of the contract.

(5) Within the term of the contact the residual amounts of the originally granted aid may be carried over to the next year.

(6) Upon any change of the terms and conditions specified in the contract or upon the expiry of the contract or in the case of failure of the supported research activities decisions on the unused appropriations and, on the right of disposal of the purchased tangible assets and/or inventories shall be made by the President of the OTKA Committee, in connection with the appraisal of the results of the research. Where a support agreement is violated the President of the OTKA Committee decides whether or not the aid amount has to be repaid.

Section 7

(1) Successful bidders shall report on the expenditure of the aid amount won through the tendering process and on the progress of the research project [not including the aids won for infrastructure development as per Section 6 (3)] in accordance with the schedule prescribed in the contract or at least once every year, to the OTKA Committee which makes its decision on the acceptance of the such reports - on the basis of expert opinions - and on the continued provision of the financial assistance, or on the amendment or termination thereof, as appropriate. The appraisal begins with the evaluation of the achievements of the first full year of the research.

(2) Upon the (contractual) completion of the research - on the basis of the report prepared by the bidder - the successfulness of the activities and the expenditure of the appropriations shall be evaluated by the bodies of the OTKA Committee as per section 5 (1), with the involvement of experts.

(3) The OTKA Committee shall appraise the results of supported research projects that are suitable for utilisation as innovations in co-operation with the National Technical Development Board, as a priority perspective in the course of the regular appraisal of the reports on the supported projects.

(4) The expenditure of the aid appropriations granted to bids for infrastructure development shall be appraised by the OTKA Committee at the intervals specified in the contracts.

(5) The summary of the appraisals as per sub-section (2) shall be disclosed in the official publication of OTKA.

Section 8

(1) This Act shall enter into force on the 15th day after its promulgation, and at the same time Act XXII of 1993 on the Hungarian Scientific Research Fund and Sections 93-98 of Act CXXI of 1995 on the amendment thereof shall be abrogated.

(2) The Hungarian Scientific Research Fund Programmes is the legal successor of the Hungarian Scientific Research Fund.

(3) Commitments undertaken to the debit of the Hungarian Scientific Research Fund shall be settled from the appropriations of the Hungarian Scientific Research Fund Programs.

(4) The Organisational and Operational Rules of OTKA shall be prepared and shall be submitted to the Government for agreement within six months of the entry into force of this Act.

*The Act was passed by Parliament on 9 December 1997.