The law establishes four competitive funds to support scientific research and innovation in Iceland: the Research Fund, Innovation Fund, Priority Fund, and Infrastructure Fund. The funds award grants to projects based on professional evaluation where applicants compete against each other, and they are financed through annual budget appropriations. The law also governs the operations of Rannís (the Icelandic Centre for Research) and requires fund boards to publish impact assessments every three years. This aims to create an internationally competitive environment for research and innovation with emphasis on quality, transparency, and societal impact.