By: Davis S.B. No. 386

A BILL TO BE ENTITLED

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 102.003, Health and Safety Code, is amended to read as follows:

Sec. 102.003. SUNSET PROVISION. The Cancer Prevention and Research Institute of Texas is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the institute is abolished and this chapter expires September 1, 2015 [2021].

SECTION 2. Subchapter A, Chapter 102, Health and Safety Code, is amended by adding Section 102.004 to read as follows:

Sec. 102.004. AUDIT. The financial transactions of the institute and the operations of the oversight committee are subject to audit by the state auditor in accordance with Chapter 321, Government Code.

SECTION 3. Section 102.051, Health and Safety Code, is amended by adding Subsection (c) to read as follows:

(c) The institute shall employ a compliance officer, who, under the direction of the executive director, shall ensure that:

(1) each grant proposal that is submitted to the oversight committee for approval complies with this chapter and with rules adopted under this chapter;

(2) each grant contract includes language describing the terms and conditions of the grant;

(3) each grant and grant contract is annually reviewed by the compliance officer; and

(4) the institute, its employees, and its committee members appointed under this chapter comply with state law, including the laws and rules governing the peer review process and conflicts of interest.

SECTION 4. Section 102.052(a), Health and Safety Code, is amended to read as follows:

(a) 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 and information obtained under Section 102.264 regarding each recipient's compliance with the terms and conditions of the recipient's grant contract;

(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; and

(9) an assessment of the compliance of all grant recipients by the compliance officer.

SECTION 5. Section 102.056, Health and Safety Code, is amended to read as follows:

Sec. 102.056. SALARY. The oversight committee by majority vote [institute] may approve a salary supplement for the [salary of the] executive director and other senior institute staff members, subject to legislative appropriations. Funding for a salary supplement may only come from [gifts, grants, donations, or] legislative appropriations.

SECTION 6. Subchapter B, Chapter 102, Health and Safety Code, is amended by adding Section 102.057 to read as follows:

Sec. 102.057. STANDARDS OF CONDUCT. (a) An oversight committee member or institute employee may not make a personal investment in or have a financial interest in a business entity or other organization receiving or applying to receive money from the institute.

(b) An oversight committee member may not serve on the board of directors or other governing board of a nonprofit entity a primary purpose of which is to support the institute.

(c) An institute employee may not serve on the board of directors or other governing board of an entity receiving a grant from the institute.

SECTION 7. Sections 102.101(b) and (e), Health and Safety Code, are amended 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].

(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.

SECTION 8. Section 102.104, Health and Safety Code, is amended to read as follows:

Sec. 102.104. OFFICERS. The oversight committee shall elect [select] a presiding officer and assistant presiding officer from among its members every two years.

SECTION 9. Sections 102.156(a) and (c), 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 executive director if the member has an interest in a matter that comes before the member's committee or has a [substantial] financial interest in an entity that has a direct interest in the matter.

(c) 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, an [more than a five percent] interest in the entity.

SECTION 10. Section 102.203(e), Health and Safety Code, is amended to read as follows:

(e) Not less [more] than 10 percent of the money awarded under this subchapter each year must [may] be used for cancer prevention and control programs [during any year].

SECTION 11. Section 102.251, Health and Safety Code, is amended by adding Subsection (c) to read as follows:

(c) The executive director 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 state that the grant application has been reviewed and recommended in accordance with the required review process under this section.

SECTION 12. Subchapter F, Chapter 102, Health and Safety Code, is amended by adding Section 102.2511 to read as follows:

Sec. 102.2511. GRANT APPLICANT STANDARDS OF CONDUCT. A person, business entity, or organization applying to receive a grant from the institute may not make a gift, grant, donation, or other financial contribution to:

(1) the institute unless:

(A) the grant for which the applicant applied is awarded to another applicant; or

(B) the grant recipient makes the gift, grant, donation, or other financial contribution to the institute at least 30 days after the date the grant is awarded; or

(2) an elected state official who appoints a person to the oversight committee, unless the gift, grant, donation, or other financial contribution is made in compliance with other applicable law and:

(A) the grant for which the applicant applied is awarded to another applicant; or

(B) the grant recipient makes the gift, grant, donation, or other financial contribution to the official at least 30 days after the date the grant is awarded.

SECTION 13. Section 102.252, Health and Safety Code, is amended to read as follows:

Sec. 102.252. FUNDING [OVERRIDING] RECOMMENDATIONS. The oversight committee by two-thirds vote shall approve each grant application submitted to the committee by [must follow the funding recommendations of] the 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 14. Sections 102.255(b) and (d), Health and Safety Code, are amended 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 a result of an annual review required under Section 102.264, the compliance officer determines [of a date specified in the contract,] the grant recipient has not complied with the terms and conditions of the grant contract and refuses to comply with a remediation plan approved by the oversight committee [used grant money awarded under Subchapter E for the purposes for which the grant was intended], the recipient shall repay the [that] grant money awarded under Subchapter E [amount] and any related interest applicable under the contract to the state at the agreed rate and on the agreed terms.

(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 have an amount of funds equal to one-half of the grant specifically dedicated to the research that is the subject of the grant request.

SECTION 15. Section 102.262, Health and Safety Code, is amended by adding Subsection (c) to read as follows:

(c) The records of a foundation established to benefit the institute shall be considered public information subject to Chapter 552, Government Code.

SECTION 16. Subchapter F, Chapter 102, Health and Safety Code, is amended by adding Sections 102.263 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 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:

(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; and

(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.

(d) Subsection (c) does not apply to information related to an individual who consents to disclosure of the information.

(e) Information is excepted from disclosure under Chapter 552, Government Code, if it is collected or produced in a compliance program investigation and releasing the information would interfere with an ongoing compliance investigation.

(f) Information made confidential or excepted from public disclosure by this section may be made available to the following on request in compliance with applicable law and procedure:

(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.

(g) A disclosure under Subsection (f) is not a voluntary disclosure for purposes of Section 552.007, Government Code.

Sec. 102.264. ANNUAL REVIEW OF GRANT RECIPIENTS BY COMPLIANCE OFFICER. (a) The compliance officer shall annually review each grant recipient to ensure that the grant recipient is in compliance with the terms and conditions of the grant recipient's contract with the institute.

(b) If the compliance officer determines that a grant recipient has not maintained compliance with the terms and conditions of the grant contract, the compliance officer shall recommend a remediation plan to the oversight committee to assist the grant recipient in complying with the contract.

(c) The oversight committee shall approve or disapprove a remediation plan submitted by the compliance officer. If approved, the compliance officer shall submit the approved remediation plan to the grant recipient.

SECTION 17. (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.

SECTION 18. 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.