A transcript of the hearing that discusses the findings and recommendations that are part of the Office of Technology Assessment's (OTA's) report on federally funded research is presented. The report evaluates the nature and distribution of research funding and decision-making and suggests alternative approaches that the Federal Government can take in funding research. The witnesses include: (1) Dr. Daryl Chubin (Program Director, Education and Transportation Programs, OTA); (2) Dr. Roland Schmitt (President, Rensselaer Polytechnic Institute); (3) Dr. Leon Lederman (President, American Association for the Advancement of Science--AAAS); (4) Dr. Rustum Roy (Evan Pugh Professor of the Solid State, Pennsylvania State University); and (5) Dr. Douglas A. Lauffenburger (Alumni Professor of Chemical Engineering, University of Illinois). (KR)