(A) With the exception of the University of South Carolina, Clemson University, and the Medical University of South Carolina, institutions seeking financial support from the fund for research projects shall submit proposals to the commission for its review and approval.

(B) The portion of the fund allocated to the three senior universities excepted in subsection (A) must be distributed in a manner that takes into account the previous year’s expenditures of externally generated funds for research which each university reported to the commission.

(C) No funds allocated under the provisions of this chapter nor matching funds received pursuant to terms of this chapter may be used to increase an institution’s future years’ formula funding as computed by the Commission on Higher Education.