(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. (1) if all or any portion of the amount of the grant is used to build a capital improvement:

   1. (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

   2. (B) the grant recipient shall, if the capital improvement is sold:

      1. (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
      2. (ii) share with the state a proportionate amount of any profit realized from the sale;
2. (2) if 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. (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. (1) include terms relating to intellectual property rights consistent with the standards developed by the oversight committee under Section 102.256;
2. (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. (3) specify:

   1. (A) the amount of matching funds to be dedicated under Subdivision (2);
   2. (B) the period in which the grant award must be spent;
   3. (C) the name of the research project to which matching funds are to be dedicated; and
   4. (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 an amount of funds equal to one-half of the grant and dedicate those funds 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. (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. (2) require that a grant recipient certify before the distribution of any money awarded under a grant for cancer research:

   1. (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
   2. (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. (3) specify that:

   1. (A) a grant recipient receiving more than one grant award may provide matching funds certification at an institutional level;
   2. (B) the recipient of a multiyear grant award may certify matching funds on a yearly basis; and
   3. (C) grant funds may not be distributed to the grant recipient until the annual certification of the matching funds has been approved;

4. (4) specify that money used for purposes of certification may include:

   1. (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;
   2. (B) funds of this state;
   3. (C) funds of other states; and
   4. (D) nongovernmental funds, including private funds, foundation grants, gifts, and donations;

5. (5) specify that the following items do not qualify for purposes of the certification required by this subsection:

   1. (A) in-kind costs;
   2. (B) volunteer services furnished to a grant recipient;
   3. (C) noncash contributions;
   4. (D) income earned by the grant recipient that is not available at the time of the award;
   5. (E) preexisting real estate of the grant recipient, including buildings, facilities, and land;
   6. (F) deferred giving, including a charitable remainder annuity trust, a charitable remainder unitrust, or a pooled income fund; or
   7. (G) other items as may be determined by the oversight committee;
6. (6) require a grant recipient and the institute to include the certification in the grant award contract;
7. (7) specify that a grant recipient's failure to provide certification shall serve as grounds for terminating the grant award contract;
8. (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. (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.

Acts 2007, 80th Leg., R.S., Ch. 266 (H.B. 14), Sec. 4., eff. November 6, 2007.

Acts 2009, 81st Leg., R.S., Ch. 368 (H.B. 1358), Sec. 13, eff. June 19, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 1150 (S.B. 149), Sec. 24, eff. June 14, 2013.