Proposed Rules Title 25

TITLE 25. HEALTH SERVICES

PART 11. CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS

CHAPTER 702. RELATIONSHIP BETWEEN COUNCIL AND PRIVATE ORGANIZATIONS AND DONORS

25 TAC §§702.1 - 702.4

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Cancer Prevention and Research Institute of Texas or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Cancer Prevention and Research Institute of Texas (Institute), formerly the Texas Cancer Council, proposes the repeal of §§702.1 - 702.4, concerning the relationship between the council and private organizations and donors. The 2007 Legislature enacted House Bill 14, which amended Chapter 102 of the Health and Safety Code, abolished the Texas Cancer Council, created the Institute, and expressly directs the Institute's Oversight Committee to adopt conflict of interest rules to apply to the Oversight Committee. The rules currently in Chapter 702 are not adequate to address the rules required by the law. The matters addressed by the repealed provisions will be incorporated into a new Chapter 702. The sections of new Chapter 702 are proposed in this issue of the Texas Register.

Sandra K. Balderrama, MPA, BSW, the Interim Administrative Director of the Cancer Prevention and Research Institute of Texas has determined that for the first five-year period the repeal is in effect there will be no foreseeable implications relating to costs or revenues for state or local government as a result of enforcing or administering the repeal.

Ms. Balderrama also has determined that for each year of the first five years the repeal is in effect the public benefit anticipated as a result of enforcing the repeal will be clarification of the policies and procedures the Institute will follow to implement its statutory duties. There are no anticipated economic costs to persons who are required to comply with the repeal as proposed.

Ms. Balderrama has determined that the repeal shall not have an effect on small businesses or on micro businesses.

Comments on the proposed repeal may be submitted to Sandra Balderrama, Interim Administrative Director, Cancer Prevention and Research Institute of Texas, P.O. Box 12097, Austin, Texas 78711.

The repeal is proposed under the authority of the Texas Health and Safety Code Annotated, §102.101(e) and §102.106, which provide the Institute with the authority to govern members of the Oversight Committee and its own activities, and which direct the Oversight Committee to adopt rules relating to conflict of interest.

There is no other statute, article or code that is affected by this proposed repeal.

§702.1.Authority and Purpose.

§702.2.Donations.

§702.3.Standards of Conduct.

§702.4.Special Events.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 3, 2009.

TRD-200900915

Sandra Balderrama

Interim Administrative Director

Cancer Prevention and Research Institute of Texas

Earliest possible date of adoption: April 19, 2009

For further information, please call: (512) 438-3029

CHAPTER 702. INSTITUTE STANDARDS ON ETHICS AND CONFLICTS, INCLUDING RELATIONSHIPS BETWEEN THE INSTITUTE AND PRIVATE ORGANIZATIONS AND DONORS

25 TAC §§702.1, 702.3, 702.5, 702.7, 702.9, 702.11, 702.13, 702.15

The Cancer Prevention and Research Institute of Texas (Institute) proposes a new Chapter 702, §§702.1, 702.3, 702.5, 702.7, 702.9, 702.11, 702.13, and 702.15, regarding institute standards on ethics and conflicts, including relationships between the institute and private organizations and donors.

These proposed rules are based on the federal regulations applicable to scientific peer review of research grant applications and research and development contract projects of the National Institutes of Health (NIH). The federal NIH regulations are found at 42 CFR 52h. The Texas Health and Safety Code, §102.106 directs the Institute Oversight Committee to adopt such rules to apply to the Oversight Committee. In addition, these rules are adopted pursuant to and in satisfaction of the provisions of Texas Government Code, Chapters 572 and 2255, Texas Health and Safety Code, Chapter 102, and other relevant statutes. These rules, therefore, incorporate the matters addressed in the prior Chapter 702 rules, which are being repealed in their entirety and are being replaced with these rules. The rules will be incorporated into the Institute's ethics policy manual.

New §702.1 is proposed to set forth the authority for the rules of Chapter 702.

New §702.3 is proposed to define various terms used throughout the chapter.

New §702.5 is proposed to express the Oversight Committee's intent regarding the applicability of the rule to various individuals associated with the Institute and the grants it awards.

New §702.7 is proposed to address how donations to the Institute will be handled. It is not a substantive change to what currently exists in Chapter 702, which is being repealed.

New §702.9 is proposed to provide general standards of conduct for employees of the Institute and members of the Oversight Committee. This rule expresses the Oversight Committee's intent that the statutes of Texas Government Code §572.051 are made mandatory for Institute employees and Oversight Committee members.

New §702.11 is proposed to set forth the Institute's policy on recusal and conflicts of interest by stating what types of personal or private interests will be sufficient to require: recusal of an oversight committee member; recusal of others; and recusal of peer review group members involved in awarding, administering, reviewing, or evaluating a grant proposal or awarded grant.

New §702.13 is proposed to provide a procedure for individuals subject to the conflict rules to obtain a determination on behalf of the Institute as to whether a conflict of interest exists and whether recusal is required.

New §702.15 is proposed to require Oversight Committee members to receive regular training in the state's open government laws.

Sandra K. Balderrama, MPA, BSW, the Interim Administrative Director of the Cancer Prevention and Research Institute of Texas has determined that for the first five-year period the rules are in effect there will be no foreseeable implications relating to costs or revenues for state or local government as a result of enforcing or administering the new rules.

Ms. Balderrama also has determined that for each year of the first five years the rules are in effect the public benefit anticipated as a result of enforcing the rules will be clarification of the policies and procedures the Institute will follow to implement its statutory duties. There are no anticipated economic costs to persons who are required to comply with the rules as proposed.

Ms. Balderrama has determined that the new rules shall not have an effect on small businesses or on micro businesses.

Comments on the proposed rules may be submitted to Sandra Balderrama, Interim Administrative Director, Cancer Prevention and Research Institute of Texas, P.O. Box 12097, Austin, Texas 78711.

The new sections are proposed under the authority of the Texas Health and Safety Code Annotated, §102.101(e) and §102.106, which provide the Institute with the authority to govern members of the oversight committee and its own activities, and which direct the Oversight Committee to adopt rules relating to conflict of interest.

There is no other statute, article or code that is affected by these proposed new sections.

§702.1.Authority.

This chapter is adopted pursuant to and in satisfaction of the provisions of Texas Government Code Annotated, Chapters 572 and 2255, Texas Health and Safety Code, Chapter 102, and other relevant statutes.

§702.3.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Act means the Texas Health and Safety Code, Chapter 102.

(2) Conflict of interest means a member of the peer review group or close relative or professional associate of the reviewer has a financial or other interest in an application or proposal that is known to the reviewer or the government official managing the review and would cause a reasonable person to question the reviewers impartiality if he or she were to participate in the review.

(3) Awarding official means the Oversight Committee and any other officer or employee of the Institute to whom the authority to make an award has been delegated; except that where the Act specifically authorizes another official to make awards in connection with a particular program, the awarding official shall mean that official and any other officer or employee of the Institute to whom the authority to make an award has been delegated.

(4) Budget period means the interval of time (usually 12 months) into which the project period is divided for budgetary and reporting purposes.

(5) CPRIT and Institute mean the Cancer Prevention and Research Institute of Texas.

(6) Close relative means a parent, spouse, domestic partner, or son or daughter.

(7) Contract proposal means a written offer to enter into a contract that is submitted to the appropriate agency official by an individual or other entity, which includes, at a minimum, a description of the nature, purpose, duration, and cost of the project, and the methods, personnel, and facilities to be utilized in carrying out the project. A contract proposal may be unsolicited by the Institute or submitted in response to a request for proposals.

(8) Development means the systematic use of knowledge gained from research to create useful materials, devices, systems, or methods.

(9) Entity means any entity recognized by law, including a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, or trust, as well as any program, enterprise, non-profit corporation public or private research or academic institution.

(10) Executive Director means the Executive Director of the CPRIT and any other official or employee of the CPRIT to whom the authority involved has been delegated.

(11) Executive-level employee means the Executive Director, Chief Operating Officer, General Counsel, Chief Prevention Officer, Chief Scientific Officer and other similarly situated employee with decision-making authority. It also means any individual employed by the Institute who is compensated, as of the last date of state employment or at the time a determination regarding conflict of interest is made, at or above the amount prescribed by the General Appropriations Act for step 1, salary group 17, of the position classification salary schedule, including an employee who is exempt from the state's position classification plan.

(12) Grant as used in this chapter includes cooperative agreements.

(13) Grant proposal or grant application means any application to receive funding from the Institute.

(14) Grant recipient or awarded grant means any entity, natural or legal, and any person who has been awarded or received grant funds from the Institute.

(15) Institute means the Cancer Prevention and Research Institute of Texas or CPRIT.

(16) Institute employee means any individual within the employ of the Institute, including any individuals performing duties for the Institute pursuant to a contract of employment.

(17) Oversight Committee member means any person appointed to and serving on the Oversight Committee of the Institute, or any person who sits on that board by operation of statute or by designation.

(18) Peer review group, also referred to as scientific review group, means a group of primarily non-government experts qualified by training and experience in particular scientific or technical fields, or as authorities knowledgeable in the various disciplines and fields related to the scientific areas under review, to give expert advice on the scientific and technical merit of grant applications or contract proposals, or the concept of contract projects, in accordance with the rules of the Institute.

(19) Personal or private interest in an entity exists, notwithstanding the provisions of Texas Government Code Chapter 572, when an Oversight Committee member or the member's spouse:

(A) Owns or controls, directly or indirectly, less than a 5% interest in a business entity or other organization receiving money from the Institute. Interests subject to this provision include sharing in profits, proceeds, or capital gains. Examples of ownership or control, include but are not limited to owning shares, stock, or otherwise, and are not dependent on whether voting rights are included;

(B) Is a member of the board of directors, other governing board or any committee of the entity;

(D) Is an employee of the entity or is negotiating future employment with the entity;

(E) Represents in business or law; this prohibition includes close relatives; or

(F) Could reasonably foresee that an action taken by the Institute or its Oversight Committee could result in a financial benefit to the individual of 100% or more.

(20) Principal investigator means a single individual designated by the grantee in the grant application and approved by the Institute, who is responsible for the scientific and technical direction of the project.

(21) Professional associate of the reviewer means any colleague, scientific mentor, or student with whom the peer reviewer is currently conducting research or other significant professional activities or with whom the member has conducted such activities within three years before the date of the review.

(22) Project approach means the methodology to be followed and the resources needed in carrying out the project.

(23) Project concept means the basic purpose, scope, and objectives of the project.

(24) Project period means that time period during which the project may be supported.

(25) Request for proposals means an Institute solicitation to prospective offerors to submit a proposal to fulfill specific agency requirements based on terms and conditions defined in the request for proposals. The request for proposals shall contain information sufficient to enable all offerors to prepare proposals, and is as complete as possible with respect to: nature of work to be performed; descriptions and specifications of items to be delivered; performance schedule; special requirements clauses, or other circumstances affecting the contract; format for cost proposals; and evaluation criteria by which the proposals will be evaluated.

(26) Research means a systematic investigation, study or experiment designed to contribute to general knowledge relating broadly to public health by establishing, discovering, developing, elucidating or confirming information about, or the underlying mechanisms relating to, the biological functions, diseases, or related matters to be studied.

(27) Research and development contract project means an identified, circumscribed activity, involving a single contract or two or more similar, related, or interdependent contracts, intended and designed to acquire new or fuller knowledge and understanding in the areas of cancer research and/or to use such knowledge and understanding to develop useful materials, devices, systems, or methods.

(28) Scientific review group has the same meaning as peer review group, which is defined in paragraph (18) of this section.

(29) Solicited contract proposal means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called "bids" or "sealed bids;" responses to requests for proposals (negotiation) are offers called "proposals."

(30) Unsolicited contract proposal means a written proposal for a new or innovative idea that is submitted to an agency on the initiative of the offeror for the purpose of obtaining a contract with the state and that is not in response to a request for proposals, Broad Agency Announcement, Program Research and Development Announcement, or any other Institute-initiated solicitation or program.

§702.5.Intent.

It is the intent of the Institute that any person or entity subject to these policies avoids even the appearance of impropriety or self-dealing.

§702.7.Donations.

(a) All funds received from donations to the Institute will be deposited to the state treasury and used for the purpose specified by the donor or for general Institute programs when no purpose is specified.

(b) A member or an employee of the Institute shall not authorize a donor to use the property of the Institute unless the property is used in accordance with a contract between the Institute and the donor, the contract is found by the Institute to serve a public purpose, the contract contains provisions to ensure the public purpose continues, and the Institute is reasonably compensated for the use of the property.

§702.9.General Standards of Conduct.

Notwithstanding the provisions of Texas Government Code Chapter 572:

(1) A member of the Oversight Committee or employee of the Institute shall not accept or solicit any gift, favor, or service that might reasonably tend to influence him or her in the discharge of official duties or that he or she knows or should know is being offered with the intent to influence him or her with the intent to influence his or her official conduct.

(2) A member of the Oversight Committee or employee of the Institute shall not accept employment or engage in any business or professional activity, which he or she might reasonably expect would require or induce that person to disclose confidential information acquired by reason of his or her official position.

(3) A member of the Oversight Committee or employee of the Institute shall not accept other employment or compensation, which could reasonably be expected to impair his or her independence of judgment in the performance of his or her official duties.

(4) A member of the Oversight Committee or employee of the Institute shall not make personal investments or have a financial interest which could reasonably be expected to create a substantial conflict between his or her private interest and the individual's official duties as a member of the Oversight Committee or employee of the Institute.

(5) A member of the Oversight Committee or employee of the Institute shall not intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised his or her official powers or performed his or her official duties in favor of another.

§702.11.Recusal and Conflicts of Interest.

(a) Personal or private interest (as defined in §702.3(19) of this chapter) requiring Committee member recusal. An Oversight Committee member with a personal or private interest in a decision before the Oversight Committee, must disclose the interest in an open meeting of the Oversight Committee and must recuse him/her self from participation in the matter.

(b) Personal or private interest requiring recusal of others. A member of a advisory committee, an executive level employee of the Institute or Institute employee in a position to influence the awarding, administration, review or evaluation of a grant proposal or awarded grant who has an ownership interest of 5% or more in an entity that applies for or receives a grant from the institute is required to inform the presiding officer of the Oversight Committee and the Executive Director and to recuse him/her self from participation in that matter.

(c) Personal or private interest requiring recusal of peer review group. A member of a peer review group in a position to influence the awarding, administration, review or evaluation of a grant proposal or awarded grant is required to inform the Executive Director and to recuse himself/herself from participation in that matter if he/she or a close relative:

(1) Owns or controls, directly or indirectly, an ownership interest of 5% or more in a business entity or other organization receiving or applying to receive money from the Institute. Interests subject to this provision include sharing in profits, proceeds, or capital gains. Examples of ownership or control, include but are not limited to owning shares, stock, or otherwise, and are not dependent on whether voting rights are included;

(2) Is a member of the board of directors, other governing board or any committee of the entity;

(3) Serves as an elected or appointed officer of the entity;

(4) Is an employee of the entity or is negotiating future employment with the entity;

(5) Represents in business or law; or

(6) Could reasonably foresee that an action taken by the peer review group, Institute or its Oversight Committee could result in a financial benefit to the individual of 100% or more.

(d) An Oversight Committee member, executive level employee of the Institute, or Institute employee in a position to influence the awarding, administration, review or evaluation of a grant proposal or awarded grant shall not lease, directly or indirectly, any property, capital equipment, employee or service to any program, business, enterprise or institution that receives a grant from the Institute.

(e) Any appearance of a conflict of interest will result in recusal of a member of the Oversight Committee, a member of a peer review group, or a member of an advisory group, executive level employee of the Institute, or Institute employee in a position to influence the awarding, administration, review or evaluation of a grant proposal or awarded grant, unless a waiver is issued in compliance with §702.13 of this chapter, concerning procedures, determining that it would be difficult or impractical to carry out the review or action otherwise, and the integrity of the review process or committee action would not be impaired by the member's participation.

(f) A member of the Oversight Committee shall not submit a grant application for funding by the Institute.

(g) The Executive Director may provide guidance to the members of the Oversight Committee, to individuals responsible for managing reviews, and to reviewers on what interests would constitute a conflict of interest or an appearance of a conflict of interest.

§702.13.Procedures.

(a) An Oversight Committee member or a member of an advisory group who has a personal or private interest as defined by this chapter or an interest that has the appearance of impropriety or self-dealing shall immediately notify the Executive Director of such interest. In the event of such notice or in the event the Executive Director has such an interest, the Executive Director will notify the presiding officer of the Oversight Committee and the General Counsel who shall immediately determine the nature and extent of the conflict, if any.

(b) The General Counsel shall investigate the matter and shall notify the Executive Director and presiding officer of the Oversight Committee of the facts giving rise to the potential conflict and shall provide an opinion whether a conflict of interest or the appearance of impropriety or self-dealing exists and any appropriate course of action. If the conflict is held by the presiding officer, the General Counsel shall provide the opinion to the next ranking member of the Oversight Committee who has no conflict.

(c) After consulting with the presiding officer (or, if appropriate, the next highest ranking Oversight Committee member), the presiding officer shall take immediate actions regarding the recusal of the individual from any discussion of or access to information regarding the matter at issue.

(d) A final determination regarding the existence of a conflict of interest, appearance of impropriety or self-dealing regarding a matter involving a member of the Oversight Committee, a member of an advisory group, or the Executive Director can be made on behalf of the Institute by the presiding officer of the Oversight Committee, the next highest ranking member of the Oversight Committee if the individual at issue is the presiding officer, or by vote of the Oversight Committee or the Executive Committee.

(e) Individuals are encouraged to self-report. Any Oversight Committee member, who self-reports a potential conflict of interest or any interest that has the appearance of impropriety or self-dealing, and who fully complies with any recommendations of the General Counsel and a final determination regarding recusal from any discussion, voting, or access to information regarding the matter, shall be considered by the Institute to be in compliance with these rules. The individual is still subject to the operation of other laws, rules, requirements or prohibitions.

(f) This section does not apply to employees of the Institute other than the Executive Director or to members of a peer review group. If an employee of the Institute other than the Executive Director or a member of a peer review group has a personal or private interest as defined by this chapter, any other interest that is expressly prohibited by this chapter, or any interest that has the appearance of impropriety or self-dealing, the employee or peer review group member should report the interest to the Executive Director who may take any steps necessary to address the matter without referral of the matter to the Oversight Committee.

§702.15.Availability of Information.

The members of the Oversight Committee shall receive training on the Texas Public Information Act and the Texas Open Meetings Act after the conclusion of each regular session of the Texas Legislature. This requirement is in addition to any statutorily required training and may be met by attending a training session during a meeting of the Oversight Committee, or via other form of in-person, video, or on-line training approved by the Attorney General.