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  S.B. No. 149
 
 
 
 
AN ACT
  relating to the Cancer Prevention and Research Institute of Texas.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 102.001, Health and Safety Code, is
  amended by adding Subdivision (2-a) and amending Subdivision (3) to
  read as follows:
               (2-a)  "Program integration committee" means the
  Cancer Prevention and Research Institute of Texas Program
  Integration Committee.
               (3)  "Research and prevention programs committee"
  means a [the] Cancer Prevention and Research Institute of Texas
  Scientific Research and Prevention Programs committee [committees]
  appointed by the chief executive officer [director].
         SECTION 2.  Subchapter A, Chapter 102, Health and Safety
  Code, is amended by adding Section 102.004 to read as follows:
         Sec. 102.004.  STATE AUDITOR.  Nothing in this chapter
  limits the authority of the state auditor under Chapter 321,
  Government Code, or other law.
         SECTION 3.  Section 102.051, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsections (c) and
  (d) to read as follows:
         (a)  The institute [may]:
               (1)  may make grants to provide funds to public or
  private persons to implement the Texas Cancer Plan, and may make
  grants to institutions of learning and to advanced medical research
  facilities and collaborations in this state for:
                     (A)  research into the causes of and cures for all
  types of cancer in humans;
                     (B)  facilities for use in research into the
  causes of and cures for cancer;
                     (C)  research, including translational research,
  to develop therapies, protocols, medical pharmaceuticals, or
  procedures for the cure or substantial mitigation of all types of
  cancer in humans; and
                     (D)  cancer prevention and control programs in
  this state to mitigate the incidence of all types of cancer in
  humans;
               (2)  may support institutions of learning and advanced
  medical research facilities and collaborations in this state in all
  stages in the process of finding the causes of all types of cancer
  in humans and developing cures, from laboratory research to
  clinical trials and including programs to address the problem of
  access to advanced cancer treatment;
               (3)  may establish the appropriate standards and
  oversight bodies to ensure the proper use of funds authorized under
  this chapter for cancer research and facilities development;
               (4)  may [employ an executive director as determined by
  the oversight committee;
               [(5)]  employ necessary staff to provide
  administrative support; [and]
               (5)  shall continuously [(6)] monitor contracts and
  agreements authorized by this chapter and ensure that each grant
  recipient complies with the terms and conditions of the grant
  contract;
               (6)  shall ensure that all grant proposals comply with
  this chapter and rules adopted under this chapter before the
  proposals are submitted to the oversight committee for approval;
  and
               (7)  shall establish procedures to document that the
  institute, its employees, and its committee members appointed under
  this chapter comply with all laws and rules governing the peer
  review process and conflicts of interest.
         (c)  The institute shall employ a chief compliance officer to
  monitor and report to the oversight committee regarding compliance
  with this chapter and rules adopted under this chapter.
         (d)  The chief compliance officer shall:
               (1)  ensure that all grant proposals comply with this
  chapter and rules adopted under this chapter before the proposals
  are submitted to the oversight committee for approval; and
               (2)  attend and observe the meetings of the program
  integration committee to ensure compliance with this chapter and
  rules adopted under this chapter.
         SECTION 4.  Subchapter B, Chapter 102, Health and Safety
  Code, is amended by adding Section 102.0511 to read as follows:
         Sec. 102.0511.  CHIEF EXECUTIVE OFFICER; OTHER OFFICERS.  
  (a)  The oversight committee shall hire a chief executive officer.  
  The chief executive officer shall perform the duties required by
  this chapter or designated by the oversight committee.
         (b)  The chief executive officer must have a demonstrated
  ability to lead and develop academic, commercial, and governmental
  partnerships and coalitions.
         (c)  The chief executive officer shall hire:
               (1)  one chief scientific officer;
               (2)  one chief operating officer;
               (3)  one chief product development officer; and
               (4)  one chief prevention officer.
         (d)  The officers described by Subsections (c)(1)-(4) shall
  report directly to the chief executive officer and assist the chief
  executive officer in collaborative outreach to further cancer
  research and prevention.
         SECTION 5.  The heading to Section 102.052, Health and
  Safety Code, is amended to read as follows:
         Sec. 102.052.  ANNUAL PUBLIC REPORT; INTERNET POSTING.
         SECTION 6.  Section 102.052, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsection (c) to
  read as follows:
         (a)  Not later than January 31 of each year, the institute
  shall submit to the lieutenant governor, the speaker of the house of
  representatives, the governor, and the standing committee of each
  house of the legislature with primary jurisdiction over institute
  matters and post on the institute's Internet website a report
  outlining [The institute shall issue an annual public report
  outlining] the institute's activities, grants awarded, grants in
  progress, research accomplishments, and future program
  directions.  The report must include:
               (1)  the number and dollar amounts of research and
  facilities grants;
               (2)  identification of the grant recipients for the
  reported year;
               (3)  the institute's administrative expenses;
               (4)  an assessment of the availability of funding for
  cancer research from sources other than the institute;
               (5)  a summary of findings of research funded by the
  institute, including promising new research areas;
               (6)  an assessment of the relationship between the
  institute's grants and the overall strategy of its research
  program;
               (7)  a statement of the institute's strategic research
  and financial plans; [and]
               (8)  an estimate of how much cancer has cost the state
  during the year, including the amounts spent by the state relating
  to cancer by the child health program, the Medicaid program, the
  Teacher Retirement System of Texas, and the Employees Retirement
  System of Texas;
               (9)  a statement of the institute's compliance program
  activities, including any proposed legislation or other
  recommendations identified through the activities; and
               (10)  for the previous 12 months, a list of any
  conflicts of interest under this chapter or rules adopted under
  this chapter, any conflicts of interest that require recusal under
  Section 102.1061, any unreported conflicts of interest confirmed by
  an investigation conducted under Section 102.1063, including any
  actions taken by the institute regarding an unreported conflict of
  interest and subsequent investigation, and any waivers granted
  through the process established under Section 102.1062.
         (c)  The institute shall post on the institute's Internet
  website the list described by Subsection (a)(10).
         SECTION 7.  Subchapter B, Chapter 102, Health and Safety
  Code, is amended by adding Section 102.0535 to read as follows:
         Sec. 102.0535.  GRANT RECORDS. (a)  The institute shall
  maintain complete records of:
               (1)  the review of each grant application submitted to
  the institute, including the score assigned to each grant
  application reviewed by a research and prevention programs
  committee in accordance with rules adopted under Section
  102.251(a)(1), even if the grant application is not funded by the
  institute or is withdrawn after submission to the institute;
               (2)  each grant recipient's financial reports,
  including the amount of matching funds dedicated to the research
  specified for the grant award;
               (3)  each grant recipient's progress reports;
               (4)  for the purpose of determining any conflict of
  interest, the identity of each principal investor and owner of each
  grant recipient as provided by institute rules; and
               (5)  the institute's review of the grant recipient's
  financial reports and progress reports.
         (b)  The institute shall have periodic audits made of any
  electronic grant management system used to maintain records of
  grant applications and grant awards under this section.  The
  institute shall address in a timely manner each weakness identified
  in an audit of the system.
         SECTION 8.  Section 102.056, Health and Safety Code, is
  amended to read as follows:
         Sec. 102.056.  SALARY. (a)  The institute may not
  supplement the salary of any institute employee with a gift or grant
  received by the institute.
         (b)  The institute may supplement the salary of the chief
  scientific officer [executive director and other senior institute
  staff members].  Funding for a salary supplement for the chief
  scientific officer may only come from legislative [gifts, grants,
  donations, or] appropriations or bond proceeds.
         (c)  The institute may not supplement the salary of the chief
  executive officer.  The salary of the chief executive officer may
  only be paid from legislative appropriations.
         SECTION 9.  Subchapter B, Chapter 102, Health and Safety
  Code, is amended by adding Section 102.057 to read as follows:
         Sec. 102.057.  PROHIBITED OFFICE LOCATION. An institute
  employee may not have an office in a facility owned by an entity
  receiving or applying to receive money from the institute.
         SECTION 10.  Section 102.101, Health and Safety Code, is
  amended by amending Subsections (b), (d), and (e) and adding
  Subsection (f) to read as follows:
         (b)  The oversight committee is composed of the following
  nine [11] members:
               (1)  three members appointed by the governor;
               (2)  three members appointed by the lieutenant
  governor; and
               (3)  three members appointed by the speaker of the
  house of representatives[;
               [(4)     the comptroller or the comptroller's designee;
  and
               [(5)     the attorney general or the attorney general's
  designee].
         (d)  In making appointments to the oversight committee, the
  governor, lieutenant governor, and speaker of the house of
  representatives:
               (1)  must each appoint at least one person who is a
  physician or a scientist with extensive experience in the field of
  oncology or public health; and
               (2)  should attempt to include cancer survivors and
  family members of cancer patients if possible.
         (e)  A person may not be a member of the oversight committee
  if the person or the person's spouse:
               (1)  is employed by or participates in the management
  of a business entity or other organization receiving money from the
  institute;
               (2)  owns or controls, directly or indirectly, an [more
  than a five percent] interest in a business entity or other
  organization receiving money from the institute; or
               (3)  uses or receives a substantial amount of tangible
  goods, services, or money from the institute, other than
  reimbursement authorized by this chapter for oversight committee
  membership, attendance, or expenses.
         (f)  A person appointed to the oversight committee shall
  disclose to the institute each political contribution to a
  candidate for a state or federal office over $1,000 made by the
  person in the five years preceding the person's appointment and
  each year after the person's appointment until the person's term
  expires.  The institute annually shall post a report of the
  political contributions made by oversight committee members on the
  institute's publicly accessible Internet website and post a link to
  the report on the oversight committee's main Internet web page.
         SECTION 11.  Subsection (c), Section 102.102, Health and
  Safety Code, is amended to read as follows:
         (c)  If the chief executive officer [director] has knowledge
  that a potential ground for removal exists, the chief executive
  officer [director] shall notify the presiding officer of the
  oversight committee of the potential ground.  The presiding officer
  shall then notify the appointing authority and the attorney general
  that a potential ground for removal exists.  If the potential ground
  for removal involves the presiding officer, the chief executive
  officer [director] shall notify the next highest ranking officer of
  the oversight committee, who shall then notify the appointing
  authority and the attorney general that a potential ground for
  removal exists.
         SECTION 12.  Subsection (a), Section 102.103, Health and
  Safety Code, is amended to read as follows:
         (a)  Oversight committee members appointed by the governor,
  lieutenant governor, and speaker of the house serve at the pleasure
  of the appointing office for staggered six-year terms, with the
  terms of three members expiring on January 31 of each odd-numbered
  year.
         SECTION 13.  Section 102.104, Health and Safety Code, is
  amended to read as follows:
         Sec. 102.104.  OFFICERS.  (a)  The oversight committee shall
  elect [select] a presiding officer and assistant presiding officer
  from among its members every two years.  The oversight committee may
  elect additional officers from among its members.
         (b)  The presiding officer and assistant presiding officer
  may not serve in the position to which the officer was elected for
  two consecutive terms.
         (c)  The oversight committee shall:
               (1)  establish and approve duties and responsibilities
  for officers of the committee; and
               (2)  develop and implement policies that distinguish
  the responsibilities of the oversight committee and the committee's
  officers from the responsibilities of the chief executive officer
  and the employees of the institute.
         SECTION 14.  Section 102.106, Health and Safety Code, is
  amended to read as follows:
         Sec. 102.106.  CONFLICT OF INTEREST.  (a)  The oversight
  committee shall adopt conflict-of-interest rules, based on
  standards applicable to members of scientific review committees of
  the National Institutes of Health, to govern members of the
  oversight committee, the program integration committee, the
  research and prevention programs committees, and institute
  employees.
         (b)  An institute employee, oversight committee member,
  program integration committee member, or research and prevention
  programs committee member shall recuse himself or herself, as
  provided by Section 102.1061(a), (b), or (c) as applicable, if the
  employee or member, or a person who is related to the employee or
  member within the second degree of affinity or consanguinity, has a
  professional or financial interest in an entity receiving or
  applying to receive money from the institute.
         (c)  A person has a professional interest in an entity
  receiving or applying to receive money from the institute if the
  person:
               (1)  is a member of the board of directors, another
  governing board, or any committee of the entity, or of a foundation
  or similar organization affiliated with the entity, during the same
  grant cycle;
               (2)  serves as an elected or appointed officer of the
  entity or of a foundation or similar organization affiliated with
  the entity;
               (3)  is an employee of or is negotiating future
  employment with the entity or with a foundation or similar
  organization affiliated with the entity;
               (4)  represents the entity or a foundation or similar
  organization affiliated with the entity;
               (5)  is a professional associate of a primary member of
  the entity's research or prevention program team;
               (6)  is, or within the preceding six years has been, a
  student, postdoctoral associate, or part of a laboratory research
  group for a primary member of the entity's research or prevention
  program team;
               (7)  is engaged or is actively planning to be engaged in
  collaboration with a primary member of the entity's research or
  prevention program team; or
               (8)  has long-standing scientific differences or
  disagreements with a primary member of the entity's research or
  prevention program team, and those differences:
                     (A)  are known to the professional community; and
                     (B)  could be perceived as affecting objectivity.
         (d)  A person has a financial interest in an entity receiving
  or applying to receive money from the institute if the person:
               (1)  owns or controls, directly or indirectly, an
  ownership interest, including sharing in profits, proceeds, or
  capital gains, in an entity receiving or applying to receive money
  from the institute or in a foundation or similar organization
  affiliated with the entity; or
               (2)  could reasonably foresee that an action taken by
  the institute, a research and prevention programs committee, the
  program integration committee, or the oversight committee could
  result in a financial benefit to the person.
         (e)  Nothing in this chapter limits the authority of the
  oversight committee to adopt additional conflict-of-interest
  standards.
         SECTION 15.  Subchapter C, Chapter 102, Health and Safety
  Code, is amended by adding Sections 102.1061 through 102.1064 to
  read as follows:
         Sec. 102.1061.  DISCLOSURE OF CONFLICT OF INTEREST; RECUSAL.
  (a)  If an oversight committee member or program integration
  committee member has a conflict of interest as described by Section
  102.106 regarding an application that comes before the member for
  review or other action, the member shall:
               (1)  provide written notice to the chief executive
  officer and the presiding officer of the oversight committee or the
  next ranking member of the committee if the presiding officer has
  the conflict of interest;
               (2)  disclose the conflict of interest in an open
  meeting of the oversight committee; and
               (3)  recuse himself or herself from participating in
  the review, discussion, deliberation, and vote on the application
  and from accessing information regarding the matter to be decided.
         (b)  If an institute employee has a conflict of interest
  described by Section 102.106 regarding an application that comes
  before the employee for review or other action, the employee shall:
               (1)  provide written notice to the chief executive
  officer of the conflict of interest; and
               (2)  recuse himself or herself from participating in
  the review of the application and be prevented from accessing
  information regarding the matter to be decided.
         (c)  If a research and prevention programs committee member
  has a conflict of interest described by Section 102.106 regarding
  an application that comes before the member's committee for review
  or other action, the member shall:
               (1)  provide written notice to the chief executive
  officer of the conflict of interest; and
               (2)  recuse himself or herself from participating in
  the review, discussion, deliberation, and vote on the application
  and from accessing information regarding the matter to be decided.
         (d)  An oversight committee member, program integration
  committee member, research and prevention programs committee
  member, or institute employee with a conflict of interest may seek a
  waiver as provided by Section 102.1062.
         (e)  An oversight committee member, program integration
  committee member, research and prevention programs committee
  member, or institute employee who reports a potential conflict of
  interest or another impropriety or self-dealing of the member or
  employee and who fully complies with the recommendations of the
  general counsel and recusal requirements is considered in
  compliance with the conflict-of-interest provisions of this
  chapter.  The member or employee is subject to other applicable
  laws, rules, requirements, and prohibitions.
         (f)  An oversight committee member, program integration
  committee member, research and prevention programs committee
  member, or institute employee who intentionally violates this
  section is subject to removal from further participation in the
  institute's grant review process.
         Sec. 102.1062.  EXCEPTIONAL CIRCUMSTANCES REQUIRING
  PARTICIPATION.  The oversight committee shall adopt rules governing
  the waiver of the conflict-of-interest requirements of this chapter
  under exceptional circumstances for an oversight committee member,
  program integration committee member, research and prevention
  programs committee member, or institute employee.  The rules must:
               (1)  authorize the chief executive officer or an
  oversight committee member to propose the granting of a waiver by
  submitting to the presiding officer of the oversight committee a
  written statement about the conflict of interest, the exceptional
  circumstance requiring the waiver, and any proposed limitations to
  the waiver;
               (2)  require a proposed waiver to be publicly reported
  at a meeting of the oversight committee;
               (3)  require a majority vote of the oversight committee
  members present and voting to grant a waiver;
               (4)  require any waiver granted to be reported annually
  to the lieutenant governor, the speaker of the house of
  representatives, the governor, and the standing committee of each
  house of the legislature with primary jurisdiction over institute
  matters; and
               (5)  require the institute to retain documentation of
  each waiver granted.
         Sec. 102.1063.  INVESTIGATION OF UNREPORTED CONFLICTS OF
  INTEREST. (a)  An oversight committee member, a program
  integration committee member, a research and prevention programs
  committee member, or an institute employee who becomes aware of a
  potential conflict of interest described by Section 102.106 that
  has not been reported shall immediately notify the chief executive
  officer of the potential conflict of interest.  On notification,
  the chief executive officer shall notify the presiding officer of
  the oversight committee and the general counsel, who shall
  determine the nature and extent of any unreported conflict.
         (b)  A grant applicant seeking an investigation regarding
  whether a prohibited conflict of interest was not reported shall
  file a written request with the institute's chief executive
  officer.  The applicant must:
               (1)  include in the request all facts regarding the
  alleged conflict of interest; and
               (2)  submit the request not later than the 30th day
  after the date the chief executive officer presents final funding
  recommendations for the affected grant cycle to the oversight
  committee.
         (c)  On notification of an alleged conflict of interest under
  Subsection (a) or (b), the institute's general counsel shall:
               (1)  investigate the matter; and
               (2)  provide to the chief executive officer and
  presiding officer of the oversight committee an opinion that
  includes:
                     (A)  a statement of facts;
                     (B)  a determination of whether a conflict of
  interest or another impropriety or self-dealing exists; and
                     (C)  if the opinion provides that a conflict of
  interest or another impropriety or self-dealing exists,
  recommendations for an appropriate course of action.
         (d)  If the conflict of interest, impropriety, or
  self-dealing involves the presiding officer of the oversight
  committee, the institute's general counsel shall provide the
  opinion to the next ranking oversight committee member who is not
  involved with the conflict of interest, impropriety, or
  self-dealing.
         (e)  After receiving the opinion and consulting with the
  presiding officer of the oversight committee, the chief executive
  officer shall take action regarding the recusal of the individual
  from any discussion of or access to information related to the
  conflict of interest or other recommended action related to the
  impropriety or self-dealing.  If the alleged conflict of interest,
  impropriety, or self-dealing is held by, or is an act of, the chief
  executive officer, the presiding officer of the oversight committee
  shall take actions regarding the recusal or other action.
         Sec. 102.1064.  FINAL DETERMINATION OF UNREPORTED CONFLICT
  OF INTEREST. (a)  The chief executive officer or, if applicable,
  the presiding officer of the oversight committee shall make a
  determination regarding the existence of an unreported conflict of
  interest described by Section 102.1063 or other impropriety or
  self-dealing.  The determination must specify any actions to be
  taken to address the conflict of interest, impropriety, or
  self-dealing, including:
               (1)  reconsideration of the application; or
               (2)  referral of the application to another research
  and prevention programs committee for review.
         (b)  The determination made under Subsection (a) is
  considered final unless three or more oversight committee members
  request that the issue be added to the agenda of the oversight
  committee.
         (c)  The chief executive officer or, if applicable, the
  presiding officer of the oversight committee, shall provide written
  notice of the final determination, including any further actions to
  be taken, to the grant applicant requesting the investigation.
         (d)  Unless specifically determined by the chief executive
  officer or, if applicable, the presiding officer of the oversight
  committee, or the oversight committee, the validity of an action
  taken on a grant application is not affected by the fact that an
  individual who failed to report a conflict of interest participated
  in the action.
         SECTION 16.  Section 102.107, Health and Safety Code, is
  amended to read as follows:
         Sec. 102.107.  POWERS AND DUTIES. The oversight committee
  shall:
               (1)  hire a chief [an] executive officer;
               (2)  annually set priorities as prescribed by the
  legislature for each grant program that receives money under this
  chapter; and
               (3)  consider the priorities set under Subdivision (2)
  in awarding grants under this chapter [director].
         SECTION 17.  Subchapter C, Chapter 102, Health and Safety
  Code, is amended by adding Sections 102.109 and 102.110 to read as
  follows:
         Sec. 102.109.  CODE OF CONDUCT. (a)  The oversight
  committee shall adopt a code of conduct applicable to each
  oversight committee member, program integration committee member,
  and institute employee.
         (b)  The code of conduct at a minimum must include provisions
  prohibiting the member, the employee, or the member's or employee's
  spouse from:
               (1)  accepting or soliciting any gift, favor, or
  service that could reasonably influence the member or employee in
  the discharge of official duties or that the member, employee, or
  spouse of the member or employee knows or should know is being
  offered with the intent to influence the member's or employee's
  official conduct;
               (2)  accepting employment or engaging in any business
  or professional activity that would reasonably require or induce
  the member or employee to disclose confidential information
  acquired in the member's or employee's official position;
               (3)  accepting other employment or compensation that
  could reasonably impair the member's or employee's independent
  judgment in the performance of official duties;
               (4)  making personal investments or having a financial
  interest that could reasonably create a substantial conflict
  between the member's or employee's private interest and the member's
  or employee's official duties;
               (5)  intentionally or knowingly soliciting, accepting,
  or agreeing to accept any benefit for exercising the member's
  official powers or performing the member's or employee's official
  duties in favor of another;
               (6)  leasing, directly or indirectly, any property,
  capital equipment, employee, or service to any entity that receives
  a grant from the institute;
               (7)  submitting a grant application for funding by the
  institute;
               (8)  serving on the board of directors of an
  organization established with a grant from the institute; or
               (9)  serving on the board of directors of a grant
  recipient.
         Sec. 102.110.  FINANCIAL STATEMENT REQUIRED. Each member of
  the oversight committee shall file with the chief compliance
  officer a verified financial statement complying with Sections
  572.022 through 572.0252, Government Code, as required of a state
  officer by Section 572.021, Government Code.
         SECTION 18.  Section 102.151, Health and Safety Code, is
  amended by amending Subsections (a-1) and (b) and adding
  Subsections (c) and (e) to read as follows:
         (a-1)  The oversight committee shall establish research and
  prevention programs committees.  The chief executive officer
  [director], with approval by simple majority of the members of the
  oversight committee, shall appoint as members of [scientific]
  research and prevention programs committees experts in the field of
  cancer research and prevention, including qualified trained cancer
  patient advocates who meet the qualifications developed by rule as
  provided by Subsection (c).
         (b)  The institute shall adopt a written policy on in-state
  or out-of-state residency requirements for members of the research
  and prevention programs committees.  [Individuals appointed to the
  research and prevention programs committee may be residents of
  another state.]
         (c)  The oversight committee shall adopt rules regarding the
  qualifications required for an individual who will serve as a
  trained cancer patient advocate committee member for a research and
  prevention programs committee.  The rules must require a trained
  cancer patient advocate to receive science-based training.
         (e)  The chief executive officer, in consultation with the
  oversight committee, shall adopt a policy and document any change
  in the amount of honorarium paid to a member of a research and
  prevention programs committee, including information explaining
  the basis for changing the amount.
         SECTION 19.  Section 102.152, Health and Safety Code, is
  amended to read as follows:
         Sec. 102.152.  TERMS OF RESEARCH AND PREVENTION PROGRAMS
  COMMITTEE MEMBERS. Members of a research and prevention programs
  committee serve for terms as determined by the chief executive
  officer [director].
         SECTION 20.  Subsections (a), (b), and (c), Section 102.156,
  Health and Safety Code, are amended to read as follows:
         (a)  A member of a research and prevention programs
  committee[, the university advisory committee, or any ad hoc
  committee] appointed under this subchapter shall disclose in
  writing to the chief executive officer [director] if the member has
  a professional [an interest in a matter that comes before the
  member's committee] or [has a substantial] financial interest, as
  defined by Section 102.106, in an entity that has a direct interest
  in a [the] matter that comes before the member's committee.
         (b)  The member shall recuse himself or herself in the manner
  described by Section 102.1061 from the committee's deliberations
  and actions on the matter in Subsection (a) and may not participate
  in the committee's decision on the matter.
         (c)  A member of a research and prevention programs committee
  appointed under this chapter may not serve on the board of directors
  or other governing board of an entity receiving a grant from the
  institute or of a foundation or similar organization affiliated
  with the entity [A person has a substantial financial interest in an
  entity if the person:
               [(1)     is an employee, member, director, or officer of
  the entity; or
               [(2)     owns or controls, directly or indirectly, more
  than a five percent interest in the entity].
         SECTION 21.  Subsections (b) and (c), Section 102.201,
  Health and Safety Code, are amended to read as follows:
         (b)  The cancer prevention and research fund consists of:
               (1)  [patent, royalty, and license fees and other
  income received under a contract entered into as provided by
  Section 102.255;
               [(2)]  appropriations of money to the fund by the
  legislature, except that the appropriated money may not include the
  proceeds from the issuance of bonds authorized by Section 67,
  Article III, Texas Constitution;
               (2) [(3)]  gifts, grants, including grants from the
  federal government, and other donations received for the fund; and
               (3) [(4)]  interest earned on the investment of money
  in the fund.
         (c)  The fund may be used only to pay for:
               (1)  grants for cancer research and for cancer research
  facilities in this state to realize therapies, protocols, and
  medical procedures for the cure or substantial mitigation of all
  types of cancer in humans;
               (2)  the purchase, subject to approval by the
  institute, of laboratory facilities by or on behalf of a state
  agency or grant recipient;
               (3)  grants to public or private persons to implement
  the Texas Cancer Plan;
               (4)  the operation of the institute; [and]
               (5)  grants for cancer prevention and control programs
  in this state to mitigate the incidence of all types of cancer in
  humans; and
               (6)  debt service on bonds issued as authorized by
  Section 67, Article III, Texas Constitution.
         SECTION 22.  Section 102.251, Health and Safety Code, is
  amended by amending Subsection (a) and adding Subsections (c), (d),
  and (e) to read as follows:
         (a)  The oversight committee shall issue rules regarding the
  procedure for awarding grants to an applicant under this chapter.  
  The rules must include the following procedures:
               (1)  a research and prevention programs committee shall
  score [review] grant applications and make recommendations to the
  program integration committee, established under Section 102.264,
  and the oversight committee [executive director] regarding the
  award of cancer research and prevention grants, including a
  prioritized list that:
                     (A)  ranks the grant applications in the order the
  committee determines applications should be funded; and
                     (B)  includes information explaining how each
  grant application on the list meets the research and prevention
  programs committee's standards for recommendation;
               (2)  the program integration committee [executive
  director] shall submit to the oversight committee a list of grant
  applications the program integration committee by majority vote
  approved for recommendation that:
                     (A)  includes documentation on the factors the
  program integration committee considered in making the grant
  recommendations;
                     (B)  [that] is substantially based on the list
  submitted by the research and prevention programs committee under
  Subdivision (1); and
                     (C)  [,] to the extent possible, gives priority to
  proposals that:
                           (i) [(A)]  could lead to immediate or
  long-term medical and scientific breakthroughs in the area of
  cancer prevention or cures for cancer;
                           (ii) [(B)]  strengthen and enhance
  fundamental science in cancer research;
                           (iii) [(C)]  ensure a comprehensive
  coordinated approach to cancer research;
                           (iv) [(D)]  are interdisciplinary or
  interinstitutional;
                           (v) [(E)]  address federal or other major
  research sponsors' priorities in emerging scientific or technology
  fields in the area of cancer prevention or cures for cancer;
                           (vi) [(F)]  are matched with funds available
  by a private or nonprofit entity and institution or institutions of
  higher education;
                           (vii) [(G)]  are collaborative between any
  combination of private and nonprofit entities, public or private
  agencies or institutions in this state, and public or private
  institutions outside this state;
                           (viii) [(H)]  have a demonstrable economic
  development benefit to this state;
                           (ix) [(I)]  enhance research superiority at
  institutions of higher education in this state by creating new
  research superiority, attracting existing research superiority
  from institutions not located in this state and other research
  entities, or enhancing existing research superiority by attracting
  from outside this state additional researchers and resources; [and]
                           (x) [(J)]  expedite innovation and product
  development [commercialization], attract, create, or expand
  private sector entities that will drive a substantial increase in
  high-quality jobs, and increase higher education applied science or
  technology research capabilities; and
                           (xi)  address the goals of the Texas Cancer
  Plan; and
               (3)  the institute's chief compliance officer shall
  compare each grant application submitted to the institute to a list
  of donors from any nonprofit organization established to provide
  support to the institute compiled from information made available
  under Section 102.262(c) before the application is submitted to a
  research and prevention programs committee for review and again
  before any grant is awarded to the applicant.
         (c)  The chief executive officer shall submit a written
  affidavit for each grant application recommendation included on the
  list submitted to the oversight committee under Subsection (a)(2).  
  The affidavit must contain all relevant information on:
               (1)  the peer review process for the grant application;
               (2)  the application's peer review score assigned by
  the research and prevention programs committee; and
               (3)  if applicable, the intellectual property and other
  due diligence reviews of the application.
         (d)  A member of the program integration committee may not
  discuss a grant applicant recommendation with a member of the
  oversight committee unless the chief executive officer and the
  program integration committee have fulfilled the requirements of
  Subsections (a)(2) and (c), as applicable.
         (e)  The institute may not award a grant to an applicant who
  has made a gift or grant to the institute or a nonprofit
  organization established to provide support to the institute.
         SECTION 23.  Section 102.252, Health and Safety Code, is
  amended to read as follows:
         Sec. 102.252.  FUNDING [OVERRIDING] RECOMMENDATIONS.
  Two-thirds of the members of the [The] oversight committee present
  and voting must vote to approve each [follow the] funding
  recommendation [recommendations] of the program integration
  committee.  If the oversight committee does not approve a funding
  recommendation of the program integration committee, a statement
  explaining the reasons a funding recommendation was not followed
  must be included in the minutes of the meeting [executive director
  in the order the   executive director submits the applications to the
  oversight committee unless two-thirds of the members of the
  oversight committee vote to disregard a recommendation].
         SECTION 24.  Section 102.255, Health and Safety Code, is
  amended by amending Subsections (b), (c), and (d) and adding
  Subsection (e) to read as follows:
         (b)  Before awarding a grant under Subchapter E, the
  committee shall enter into a written contract with the grant
  recipient.  The contract may specify that:
               (1)  if all or any portion of the amount of the grant is
  used to build a capital improvement:
                     (A)  the state retains a lien or other interest in
  the capital improvement in proportion to the percentage of the
  grant amount used to pay for the capital improvement; and
                     (B)  the grant recipient shall, if the capital
  improvement is sold:
                           (i)  repay to the state the grant money used
  to pay for the capital improvement, with interest at the rate and
  according to the other terms provided by the contract; and
                           (ii)  share with the state a proportionate
  amount of any profit realized from the sale; [and]
               (2)  if[, as of a date specified in the contract,] the
  grant recipient has not used grant money awarded under Subchapter E
  for the purposes for which the grant was intended, the recipient
  shall repay that amount and any related interest applicable under
  the contract to the state at the agreed rate and on the agreed
  terms; and
               (3)  if the grant recipient fails to meet the terms and
  conditions of the contract, the institute may terminate the
  contract using the written process prescribed in the contract and
  require the recipient to repay the grant money awarded under
  Subchapter E and any related interest applicable under the contract
  to this state at the agreed rate and on the agreed terms.
         (c)  The contract must:
               (1)  include terms relating to intellectual property
  rights consistent with the standards developed by the oversight
  committee under Section 102.256;
               (2)  require, in accordance with Subsection (d), the
  grant recipient to dedicate an amount of matching funds equal to
  one-half of the amount of the research grant awarded; and
               (3)  specify:
                     (A)  the amount of matching funds to be dedicated
  under Subdivision (2);
                     (B)  the period in which the grant award must be
  spent;
                     (C)  the name of the research project to which
  matching funds are to be dedicated; and
                     (D)  the specific deliverables of the project that
  is the subject of the grant proposal.
         (d)  Before the oversight committee may make for cancer
  research any grant of any proceeds of the bonds issued under
  Subchapter E, the recipient of the grant must certify that the
  recipient has [have] an amount of funds equal to one-half of the
  grant and dedicate those funds [dedicated] to the research that is
  the subject of the grant request.  The institute shall adopt rules
  specifying how a grant recipient fulfills obligations under this
  subchapter.  At a minimum, the rules must:
               (1)  allow a grant recipient that is a public or private
  institution of higher education, as defined by Section 61.003,
  Education Code, to credit toward the recipient's matching funds the
  dollar amount equivalent to the difference between the indirect
  cost rate authorized by the federal government for research grants
  awarded to the recipient and the indirect cost rate authorized by
  Section 102.203(c);
               (2)  require that a grant recipient certify before the
  distribution of any money awarded under a grant for cancer
  research:
                     (A)  that encumbered funds equal to one-half of
  the amount of the total grant award are available and not yet
  expended for research that is the subject of the grant; or
                     (B)  if the grant recipient is a public or private
  institution of higher education, the indirect cost rate authorized
  by the federal research grants awarded to the recipient;
               (3)  specify that:
                     (A)  a grant recipient receiving more than one
  grant award may provide matching funds certification at an
  institutional level;
                     (B)  the recipient of a multiyear grant award may
  certify matching funds on a yearly basis; and
                     (C)  grant funds may not be distributed to the
  grant recipient until the annual certification of the matching
  funds has been approved;
               (4)  specify that money used for purposes of
  certification may include:
                     (A)  federal funds, including funds provided
  under the American Recovery and Reinvestment Act of 2009 (Pub. L.
  No. 111-5) and the fair market value of drug development support
  provided to the recipient by the National Cancer Institute or other
  similar programs;
                     (B)  funds of this state;
                     (C)  funds of other states; and
                     (D)  nongovernmental funds, including private
  funds, foundation grants, gifts, and donations;
               (5)  specify that the following items do not qualify
  for purposes of the certification required by this subsection:
                     (A)  in-kind costs;
                     (B)  volunteer services furnished to a grant
  recipient;
                     (C)  noncash contributions;
                     (D)  income earned by the grant recipient that is
  not available at the time of the award;
                     (E)  preexisting real estate of the grant
  recipient, including buildings, facilities, and land;
                     (F)  deferred giving, including a charitable
  remainder annuity trust, a charitable remainder unitrust, or a
  pooled income fund; or
                     (G)  other items as may be determined by the
  oversight committee;
               (6)  require a grant recipient and the institute to
  include the certification in the grant award contract;
               (7)  specify that a grant recipient's failure to
  provide certification shall serve as grounds for terminating the
  grant award contract;
               (8)  require a grant recipient to maintain adequate
  documentation supporting the source and use of the funds required
  by this subsection and to provide documentation to the institute
  upon request; and
               (9)  require that the institute establish a procedure
  to conduct an annual review of the documentation supporting the
  source and use of funds reported in the required certification.
         (e)  The institute shall adopt a policy on advance payments
  to grant recipients.
         SECTION 25.  Section 102.260, Health and Safety Code, is
  amended by amending Subsections (b) and (c) and adding Subsections
  (d), (e), and (f) to read as follows:
         (b)  The chief executive officer [director] shall determine
  the grant review process under this section.  The chief executive
  officer [director] may terminate grants that do not meet
  contractual obligations.
         (c)  The chief executive officer [director] shall report at
  least annually to the oversight committee on the progress and
  continued merit of each research program funded by the institute.
         (d)  The institute shall establish and implement reporting
  requirements to ensure that each grant recipient complies with the
  terms and conditions in the grant contract, including verification
  of the amounts of matching funds dedicated to the research that is
  the subject of the grant award to the grant recipient.
         (e)  The institute shall implement a system to:
               (1)  track the dates on which grant recipient reports
  are due and are received by the institute; and
               (2)  monitor the status of any required report that is
  not timely submitted to the institute by a grant recipient.
         (f)  The chief compliance officer shall monitor compliance
  with this section and at least annually shall inquire into and
  monitor the status of any required report that is not timely
  submitted to the institute by a grant recipient. The chief
  compliance officer shall notify the general counsel and the
  oversight committee of a grant recipient that has not maintained
  compliance with the reporting requirements or matching funds
  provisions of the grant contract to allow the institute to begin
  suspension or termination of the grant contract under Subsection
  (b).  This subsection does not limit other remedies available under
  the grant contract.
         SECTION 26.  Section 102.262, Health and Safety Code, is
  amended by adding Subsections (c) and (d) to read as follows:
         (c)  The records of a nonprofit organization established to
  provide support to the institute are public information subject to
  Chapter 552, Government Code.
         (d)  The institute shall post on the institute's Internet
  website records that pertain specifically to any gift, grant, or
  other consideration provided to the institute, an institute
  employee, or a member of an institute committee.  The posted
  information must include each donor's name and the amount and date
  of the donor's donation.
         SECTION 27.  Subchapter F, Chapter 102, Health and Safety
  Code, is amended by adding Sections 102.263, 102.2631, and 102.264
  to read as follows:
         Sec. 102.263.  COMPLIANCE PROGRAM.  (a)  In this section,
  "compliance program" means a process to assess and ensure
  compliance by the institute's committee members and employees with
  applicable laws, rules, and policies, including matters of:
               (1)  ethics and standards of conduct;
               (2)  financial reporting;
               (3)  internal accounting controls; and
               (4)  auditing.
         (b)  The institute shall establish a compliance program that
  operates under the direction of the institute's chief compliance
  officer.  The institute may establish procedures, such as a
  telephone hotline, to allow private access to the compliance
  program office and to preserve the confidentiality of
  communications and the anonymity of a person making a compliance
  report or participating in a compliance investigation.
         (c)  The following are confidential and are not subject to
  disclosure under Chapter 552, Government Code:
               (1)  information that directly or indirectly reveals
  the identity of an individual who made a report to the institute's
  compliance program office, sought guidance from the office, or
  participated in an investigation conducted under the compliance
  program;
               (2)  information that directly or indirectly reveals
  the identity of an individual who is alleged to have or may have
  planned, initiated, or participated in activities that are the
  subject of a report made to the office if, after completing an
  investigation, the office determines the report to be
  unsubstantiated or without merit; and
               (3)  other information that is collected or produced in
  a compliance program investigation if releasing the information
  would interfere with an ongoing compliance investigation.
         (d)  Subsection (c) does not apply to information related to
  an individual who consents to disclosure of the information.
         (e)  Information made confidential or excepted from public
  disclosure by this section may be made available to the following on
  request in compliance with applicable laws and procedures:
               (1)  a law enforcement agency or prosecutor;
               (2)  a governmental agency responsible for
  investigating the matter that is the subject of a compliance
  report, including the Texas Workforce Commission civil rights
  division or the federal Equal Employment Opportunity Commission; or
               (3)  a committee member or institute employee who is
  responsible under institutional policy for a compliance program
  investigation or for a review of a compliance program
  investigation.
         (f)  A disclosure under Subsection (e) is not a voluntary
  disclosure for purposes of Section 552.007, Government Code.
         Sec. 102.2631.  COMPLIANCE MATTERS; CLOSED MEETING.  The
  oversight committee may conduct a closed meeting under Chapter 551,
  Government Code, to discuss an ongoing compliance investigation
  into issues related to fraud, waste, or abuse of state resources.
         Sec. 102.264.  PROGRAM INTEGRATION COMMITTEE. (a)  The
  institute shall establish a program integration committee.  The
  committee is composed of the following five members:
               (1)  the chief executive officer;
               (2)  the chief scientific officer;
               (3)  the chief product development officer;
               (4)  the commissioner of state health services; and
               (5)  the chief prevention officer.
         (b)  The committee has the duties assigned under this
  chapter.
         (c)  The chief executive officer shall serve as the presiding
  officer of the program integration committee.
         SECTION 28.  Chapter 102, Health and Safety Code, is amended
  by adding Subchapter G to read as follows:
  SUBCHAPTER G.  CANCER PREVENTION AND RESEARCH INTEREST AND SINKING
  FUND
         Sec. 102.270.  ESTABLISHMENT OF FUND.  (a)  The cancer
  prevention and research interest and sinking fund is a dedicated
  account in the general revenue fund.
         (b)  The fund consists of:
               (1)  patent, royalty, and license fees and other income
  received under a contract entered into as provided by Section
  102.255; and
               (2)  interest earned on the investment of money in the
  fund.
         (c)  The fund may be used only to pay for debt service on
  bonds issued as authorized by Section 67, Article III, Texas
  Constitution, at a time and in a manner to be determined by the
  legislature in the General Appropriations Act.
         SECTION 29.  (a)  The terms of the members of the Cancer
  Prevention and Research Institute of Texas Oversight Committee
  serving immediately before the effective date of this Act expire on
  the effective date of this Act.
         (b)  As soon as practicable after the effective date of this
  Act, the governor, lieutenant governor, and speaker of the house of
  representatives shall each appoint members to the Cancer Prevention
  and Research Institute of Texas Oversight Committee as required by
  Section 102.101, Health and Safety Code, as amended by this Act.  In
  making the initial appointments under that section, each appointing
  office shall designate one member for a term expiring January 31,
  2015, one member for a term expiring January 31, 2017, and one
  member for a term expiring January 31, 2019.
         SECTION 30.  (a)  As soon as practicable after the effective
  date of this Act, the Cancer Prevention and Research Institute of
  Texas Oversight Committee shall adopt the rules necessary to
  implement the changes in law made by this Act.
         (b)  The changes in law made by this Act apply only to a grant
  application submitted to the Cancer Prevention and Research
  Institute of Texas on or after the effective date of this Act.  A
  grant application submitted before the effective date of this Act
  is governed by the law in effect on the date the application was
  submitted, and that law is continued in effect for that purpose.
         (c)  Not later than January 1, 2014, employees, oversight
  committee members, and members of other committees of the Cancer
  Prevention and Research Institute of Texas must comply with the
  changes in law made by this Act regarding the qualifications of the
  employees and members.
         (d)  Not later than December 1, 2013, the Cancer Prevention
  and Research Institute of Texas Oversight Committee shall employ a
  chief compliance officer and a chief executive officer as required
  by Subsection (c), Section 102.051, and Section 102.0511, Health
  and Safety Code, as added by this Act.
         (e)  As soon as practicable after the effective date of this
  Act, the Cancer Prevention and Research Institute of Texas
  Oversight Committee shall establish a compliance program as
  required by Section 102.263, Health and Safety Code, as added by
  this Act.
         SECTION 31.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.  
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2013.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 149 passed the Senate on
  April 3, 2013, by the following vote: Yeas 31, Nays 0; and that
  the Senate concurred in House amendments on May 24, 2013, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 149 passed the House, with
  amendments, on May 20, 2013, by the following vote: Yeas 140,
  Nays 3, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor