Contractors will be subject to the following funding restrictions, unless statute or Council rules require otherwise:

1. (1) Projects are funded only on a reimbursement basis. No advance payments for services will be made.
2. (2) The council does not pay indirect costs of projects.

3. (3) Unallowable costs.

   1. (A) The following is a list of the most common types but not a comprehensive list of costs which are unallowed:

      1. (i) bad debts;
      2. (ii) contingencies;
      3. (iii) contributions and donations;
      4. (iv) entertainment;
      5. (v) honoraria;
      6. (vi) indirect costs;
      7. (vii) interest and other financial costs;
      8. (viii) legislative expenses;
      9. (ix) professional association fees;
      10. (x) merit raises exceeding 3% of an individual's salary which are awarded more frequently than once every 12 months.
   2. (B) Items not listed in paragraph (3) of this section are not necessarily allowable.

4. (4) Project Income. Any revenues received from projects funded by the council must be reported quarterly on forms provided by the council.

   1. (A) Project income shall be used for any purpose which furthers the objectives of the program, implementation of the Texas Cancer Plan, and scope of work of the council contract. Project income generally includes all fees, royalties, registrations, et cetera, that are generated by services, activities, or products provided through the funded project.
   2. (B) Project income must be deducted from total project costs to determine the net costs on which the council's reimbursement will be based. Any remaining revenue may be retained by the contractor as long as it is used for activities which further implementation of the Texas Cancer Plan.
   3. (C) If income is generated through the activities or materials developed with council funding, the council may require a Memorandum of Agreement with the contracting agency that specifies the conditions under which the income will be used.
   4. (D) For this subsection, "project" refers to activities financed by the council through a contract and "program" refers to a cancer prevention or control effort of which the council-funded project is a component.

Source Note:The provisions of this §703.10 adopted to be effective September 18, 1991, 16 TexReg 4955; amended to be effective December 14, 1993, 18 TexReg 8952; amended to be effective August 30, 1995, 20 TexReg 6324; amended to be effective March 3, 1999, 24 TexReg 1387; amended to be effective February 28, 2000, 25 TexReg 1704; amended to be effective May 29, 2006, 31 TexReg 4438.