HB 185

relating to the creation of the Mental Health and Brain Research
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subtitle H, Title 3, Education Code, is amended
by adding Chapter 157 to read as follows:
CHAPTER 157.  MENTAL HEALTH AND BRAIN RESEARCH INSTITUTE OF TEXAS
SUBCHAPTER A.  GENERAL PROVISIONS
Sec. 157.001.  DEFINITIONS.  In this chapter:
(1)  "Institute" means the Mental Health and Brain
(2)  "Oversight committee" means the Mental Health and
Brain Research Institute of Texas Oversight Committee.
(3)  "Peer review committee" means the Mental Health
and Brain Research Institute of Texas Peer Review Committee.
(4)  “Program integration committee” means the Mental
Health and Brain Research Institute of Texas Program Integration
(5)  "Research plan" means the Texas Mental Health and
Brain Health Research Plan developed by the institute.
Sec. 157.002.  PURPOSES.  The Mental Health and Brain
Research Institute of Texas is established to:
(1)  create and expedite innovation in mental health
and brain research to improve the health of residents of this state,
enhance the potential for a medical or scientific breakthrough in
mental health and brain-related sciences and biomedical research,
and enhance the mental health and brain research superiority of
(2)  attract, create, or expand research capabilities
of eligible institutions of higher education and other public or
private entities by awarding grants to promote a substantial
increase in mental health and brain research, strategies for
prevention of mental health issues and brain-related diseases,
mental health and brain health initiatives, and the creation of
exceptional jobs in this state; and
(3)  develop and implement a research plan to foster
synergistic collaboration between eligible institutions of higher
education and their partners and other grant recipients in mental
health and brain health research.
Sec. 157.003.  STATE AUDITOR.  Nothing in this chapter
limits the authority of the state auditor under Chapter 321,
SUBCHAPTER B.  POWERS AND DUTIES OF INSTITUTE
Sec. 157.051.  POWERS AND DUTIES.  (a)  The institute:
(1)  may award grants to institutions of learning,
advanced medical research facilities, public or private persons,
and collaborations in this state to further the purposes of this
chapter and Section 68, Article III, Texas Constitution, including:
(A)  implementation of the research plan;
(B)  research, including translational and
(i)  the causes of, the means of prevention
of, the treatment and rehabilitation of, and the cures for mental
health issues and human brain-related diseases, syndromes,
disorders, dysfunctions, injuries, developmental issues,
neurological health issues, behavioral health issues, and
substance use disorders and other addictions; and
(ii)  any other issues affecting mental
health and the human brain, including issues that directly or
indirectly affect or are affected by mental health or the brain or
brain health, such as the gut microbiome, nutrition, and the spinal
cord or nervous system, that the peer review committee and the
(C)  research, including translational research,
to develop therapies, protocols, medical pharmaceuticals, or
procedures for the cure or substantial mitigation of all types of
human brain diseases and disorders;
(D)  support for institutions of learning,
advanced medical research facilities, public or private persons,
and collaborations in this state in conducting the research subject
to the grant award, including in developing programs to address
access to advanced treatment of mental health issues and brain
(E)  facilities, equipment, supplies, salaries,
benefits, and other costs related to mental health and brain
(F)  prevention programs and strategies to
mitigate the incidence of detrimental health impacts on mental
(2)  shall collaborate with relevant state agencies,
coordinating councils, and consortiums to enhance mental health and
brain-related health care and research;
(3)  shall establish the appropriate standards and
oversight bodies to ensure money authorized under this chapter is
properly used for the purposes of this chapter;
(4)  shall employ necessary staff to provide
administrative support to the institute;
(5)  may contract with another state agency to share
the cost of administrative services, including grant accounting,
grant monitoring, technical and document management of the grant
application review process, legal services, and compliance
(6)  shall monitor grant contracts authorized by this
chapter and ensure each grant recipient complies with the terms and
(7)  shall ensure all grant proposals comply with this
chapter and rules adopted under this chapter before the proposals
are submitted to the oversight committee for approval;
(8)  shall establish procedures to document compliance
by the institute, its employees, and its committee members
appointed under this chapter with all laws and rules governing the
peer review process and conflicts of interest; and
(9)  shall create a statewide research and clinical
data registry for mental health and brain research.
(b)  The institute shall implement and monitor the research
plan and revise the plan as necessary.
Sec. 157.052.  CHIEF EXECUTIVE OFFICER; CHIEF COMPLIANCE
OFFICER; ADDITIONAL OFFICERS.  (a)  The oversight committee shall
hire a chief executive officer.  The chief executive officer shall
perform the duties required by this chapter and the duties
designated by the oversight committee.  The chief executive officer
must have a demonstrated ability to lead and develop academic,
commercial, and governmental partnerships and coalitions.
(b)  The institute shall employ a chief compliance officer to
monitor compliance with this chapter and rules adopted under this
chapter and to report incidents of noncompliance to the oversight
(c)  The chief executive officer may hire any other officer
position the chief executive officer determines necessary for
efficient operation of the institute.
Sec. 157.053.  ANNUAL PUBLIC REPORT; INTERNET POSTING.  Not
later than January 31 of each year, the institute shall prepare and
submit to the governor, the lieutenant governor, the speaker of the
house of representatives, 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 on:
(1)  the institute's activities under this chapter;
(2)  a list of recipients of grants awarded during the
preceding state fiscal year and the grant amount awarded to each
(3)  any research accomplishments a grant recipient or
the recipient's partners achieved during the preceding state fiscal
(4)  an overview summary of the institute's most recent
(5)  an assessment of the relationship between the
institute's grants and the strategy of its research program;
(6)  a statement of the institute's strategic research
(7)  an estimate of the financial cost to this state of
mental health issues and brain disease during the most recent state
fiscal year for which data is available, including the amounts this
state spent related to mental health issues and brain disease
through the Medicaid program, the Teacher Retirement System of
Texas, and the Employees Retirement System of Texas;
(8)  a statement of the institute's compliance program
activities, including any proposed legislation or other
recommendations identified through the activities;
(9)  for the preceding state fiscal year:
(A)  a list of any conflicts of interest requiring
recusal under this chapter or rules adopted under this chapter;
(B)  any unreported conflicts of interest
confirmed by an investigation conducted under Section 157.254,
including any institute actions regarding an unreported conflict of
interest and subsequent investigation; and
(C)  any waivers granted through the process
established under Section 157.253; and
(10)  the institute's future direction.
Sec. 157.054.  INDEPENDENT FINANCIAL AUDIT.  (a)  The
institute shall annually commission a certified public accounting
firm to perform an independent financial audit of its activities.
(b)  The oversight committee shall review the annual
financial audit and the financial practices of the institute.
Sec. 157.055.  GRANT RECORDS; AUDIT OF ELECTRONIC GRANT
MANAGEMENT SYSTEM.  (a)  The institute shall maintain complete
(1)  the review of each grant application submitted to
the institute, including the score the peer review committee
assigns to each reviewed grant application in accordance with rules
(2)  each grant recipient's financial reports,
including the amount of matching money dedicated to the research
(3)  each grant recipient's progress reports;
(4)  the identity of each principal investor and owner
of each grant recipient as provided by institute rules to determine
(5)  the institute's review of the grant recipient's
financial reports and progress reports.
(b)  The institute shall keep each record described by
Subsection (a) until at least the 15th anniversary of the record's
(c)  The institute shall have prepared periodic audits of any
electronic grant management system used to maintain records of
grant applications and grant awards.  The institute shall timely
address each weakness identified in an audit of the system.
Sec. 157.056.  GIFTS AND GRANTS.  The institute may solicit
and accept gifts and grants from any source for the purposes of this
Sec. 157.057.  PROHIBITED OFFICE LOCATION.  An institute
employee may not have an office located in a facility owned by an
entity receiving or applying to receive money from the institute.
Sec. 157.058.  COMPLIANCE PROGRAM; INVESTIGATIONS.  (a)  The
institute shall establish a compliance program operating under the
direction of the institute's chief compliance officer to monitor
compliance with this chapter and rules adopted under this chapter
and for reporting incidents of noncompliance to the oversight
(b)  The chief compliance officer or the officer's designee
shall attend and observe meetings of the peer review committee and
the program integration committee to ensure compliance with this
chapter and rules adopted under this chapter.
(c)  The chief compliance officer shall submit a written
report to the oversight committee confirming that each grant
application recommendation included on the list submitted by the
program integration committee under Section 157.302(a)(2) complies
with the oversight committee's rules regarding grant award
procedures.  The report must contain all relevant information on:
(1)  the peer review process for the grant application;
(2)  the score the peer review committee assigns to the
(3)  adherence to the conflict-of-interest
notification and recusal process; and
(4)  confirmation that a recommended grant applicant
did not make any gift or grant prohibited by Section 157.302(f).
(d)  To ensure each grant recipient complies with reporting
requirements included in the grant contract and the rules adopted
under this chapter, 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 a grant
recipient does not timely submit to the institute.
(e)  The chief compliance officer shall:
(1)  monitor compliance with this section and the
status of any required report a grant recipient does not timely
(2)  notify the general counsel of the institute and
the oversight committee of a grant recipient who has not complied
with the grant contract reporting requirements to allow the
institute to suspend or terminate the contract as warranted.
(f)  The chief compliance officer shall establish procedures
for investigating allegations of fraud, waste, or abuse of state
resources against oversight committee members, institute employees
or contractors, grant applicants, or grant recipients.  The
(1)  private access to the compliance program office,
such as a telephone hotline; and
(2)  to the extent possible, preservation of the
confidentiality of communications and the anonymity of a person
submitting a compliance report related to fraud, waste, or abuse or
participating in a compliance investigation.
SUBCHAPTER C.  OVERSIGHT COMMITTEE
Sec. 157.101.  COMPOSITION OF OVERSIGHT COMMITTEE.  (a)  The
oversight committee is the governing body of the institute.
(b)  The oversight committee is composed of the following
(1)  three members appointed by the governor;
(2)  three members appointed by the lieutenant
(3)  three members appointed by the speaker of the
(c)  The oversight committee members must represent the
geographic and cultural diversity of this state.
(d)  In making appointments to the oversight committee, the
governor, lieutenant governor, and speaker of the house of
(1)  must each appoint at least one person who is a
physician or a scientist with extensive experience working with
mental health issues or brain disease or in the field of public
(2)  should attempt to include persons affected by
mental health issues or brain disease or family members or
caregivers of mental health or brain disease patients.
(e)  A person may not be an oversight committee member if the
(1)  is employed by or participates in the management
of an entity receiving money from the institute;
(2)  owns or controls, directly or indirectly, an
interest in an entity 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.
Sec. 157.102.  REMOVAL.  (a)  It is a ground for removal from
the oversight committee that a member:
(1)  is ineligible for membership under Section
(2)  cannot, because of illness or disability,
discharge the member's duties for a substantial part of the member's
(3)  is absent from more than half of the regularly
scheduled oversight committee meetings the member is eligible to
attend during a calendar year without an excuse approved by a
majority vote of the committee.
(b)  The validity of an action of the oversight committee is
not affected by the fact the action is taken when a ground for
removal of a committee member exists.
(c)  If the chief executive officer has knowledge that a
potential ground for removal exists, the chief executive officer
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 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.
Sec. 157.103.  TERMS; VACANCY.  (a)  Oversight committee
members appointed by the governor, lieutenant governor, and speaker
of the house serve at the pleasure of the appointing official for
staggered six-year terms, with the terms of three members expiring
on January 31 of each odd-numbered year.
(b)  If a vacancy occurs on the oversight committee, the
appropriate appointing official shall appoint a successor in the
same manner as the original appointment to serve for the remainder
of the unexpired term.  The appropriate appointing official shall
appoint the successor not later than the 30th day after the date the
Sec. 157.104.  OFFICERS.  (a)  The oversight committee shall
elect 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
(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
Sec. 157.105.  EXPENSES.  An oversight committee member is
not entitled to compensation but is entitled to reimbursement for
actual and necessary expenses incurred in attending meetings of the
committee or performing other official duties authorized by the
Sec. 157.106.  MEETINGS.  (a)  The oversight committee shall
hold at least one public meeting each quarter of the calendar year,
with appropriate notice and a formal public comment period.
(b)  The oversight committee may conduct a closed meeting in
accordance with Subchapter E, Chapter 551, Government Code, to
(1)  managing, acquiring, or selling securities or
other revenue-sharing obligations realized under the standards
established as required by Section 157.305; and
(2)  an ongoing compliance investigation into issues
related to fraud, waste, or abuse of state resources.
Sec. 157.107.  POWERS AND DUTIES.  (a) The oversight
(1)  hire a chief executive officer;
(2)  annually set priorities for each grant program
established under this chapter; and
(3)  consider the priorities set under Subdivision (2)
in awarding grants under this chapter.
(b)  The oversight committee shall adopt a code of conduct
applicable to each oversight committee member, program integration
committee member, peer review committee member, and institute
employee that includes 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 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 holding a financial
interest that could reasonably create a substantial conflict
between the member's or employee's private interest and the member's
(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
(6)  leasing, directly or indirectly, any property,
capital equipment, employee, or service to any entity that receives
(7)  submitting a grant application for funding by the
(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
Sec. 157.108.  RULEMAKING AUTHORITY.  The oversight
committee may adopt rules to administer this chapter.
Sec. 157.109.  FINANCIAL STATEMENT REQUIRED.  Each oversight
committee member 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.
SUBCHAPTER D.  OTHER INSTITUTE COMMITTEES
Sec. 157.151.  PEER REVIEW COMMITTEE.  (a)  The oversight
committee shall establish a peer review committee.  The chief
executive officer, with approval by a simple majority of the
oversight committee members, shall appoint as members of the peer
review committee experts in fields related to mental health or the
brain, including research, health care, disease treatment and
prevention, and other study areas and trained patient advocates who
meet the qualifications adopted under Subsection (c).
(b)  The oversight committee shall adopt a written policy on
in-state or out-of-state residency requirements for peer review
(c)  The oversight committee shall adopt rules regarding the
qualifications required of a trained patient advocate committee
member for a peer review committee.  The rules must require the
trained patient advocate to successfully complete science-based
(d)  A peer review committee member may receive an honorarium
and may be reimbursed for travel expenses incurred in conducting
committee business.  Subchapter B, Chapter 2254, Government Code,
does not apply to an honorarium the member receives under this
(e)  The chief executive officer, in consultation with the
oversight committee, shall adopt a policy regarding honoraria and
document any change in the amount of honoraria paid to a peer review
committee member, including information explaining the basis for
(f)  A peer review committee member 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.
(g)  Peer review committee members serve for terms as
determined by the chief executive officer.
Sec. 157.152.  PROGRAM INTEGRATION COMMITTEE.   (a)  The
institute shall establish a program integration committee with the
duties assigned under this chapter.
(b)  The program integration committee is composed of:
(1)  the institute's chief executive officer, who shall
serve as the presiding officer of the program integration
(2)  three senior-level institute employees
responsible for program policy and oversight, appointed by the
chief executive officer with the approval of a majority of the
oversight committee members; and
(3)  the executive commissioner of the Health and Human
Services Commission or the executive commissioner's designee.
Sec. 157.153.  HIGHER EDUCATION ADVISORY COMMITTEE.  (a)
The higher education advisory committee is composed of the
(1)  one member appointed by the president of Baylor
(2)  one member appointed by the president of Texas A&M
(3)  one member appointed by the president of Texas
Tech University Health Sciences Center;
(4)  one member appointed by the president of Texas
Tech University Health Sciences Center at El Paso;
(5)  one member appointed by the president of The
University of Texas Southwestern Medical Center;
(6)  one member appointed by the president of The
University of Texas Medical Branch at Galveston;
(7)  one member appointed by the president of The
University of Texas Health Science Center at Houston;
(8)  one member appointed by the president of The
University of Texas Health Science Center at San Antonio;
(9)  one member appointed by the president of The
University of Texas at Tyler Health Science Center;
(10)  one member appointed by the dean of Dell Medical
School at The University of Texas at Austin;
(11)  one member appointed by the president of The
University of Texas M. D. Anderson Cancer Center;
(12)  one member appointed by the dean of The
University of Texas Rio Grande Valley School of Medicine;
(13)  one member appointed by the president of
University of North Texas Health Science Center at Fort Worth;
(14)  one member appointed by the president of Rice
(15)  one member appointed by the dean of University of
Houston College of Medicine; and
(16)  one member appointed by the dean of Sam Houston
State University College of Osteopathic Medicine.
(b)  The oversight committee by majority vote may increase
the membership of the higher education advisory committee to
include appointees representing institutions of higher education
(c)  The higher education advisory committee shall advise
the oversight committee on issues, opportunities, the role of
higher education, and other subjects involving mental health or
Sec. 157.154.  AD HOC ADVISORY COMMITTEE.  (a)  The oversight
committee, as necessary, may create additional ad hoc advisory
committees of experts to advise the oversight committee on issues
relating to mental health research, brain research, brain health,
brain-related diseases, spinal cord injuries, traumatic brain
injuries, mental and behavioral health issues, including substance
abuse disorders and other addictions, or other brain- or
(b)  Ad hoc committee members serve for the terms determined
Sec. 157.155.  EXPENSES.  Members of the higher education
advisory committee or any ad hoc advisory committee appointed under
this subchapter serve without compensation but are entitled to
reimbursement for actual and necessary expenses incurred in
attending committee meetings or performing other official duties
authorized by the presiding officer, including travel expenses.
SUBCHAPTER E.  MENTAL HEALTH AND BRAIN INSTITUTE RESEARCH FUND
Sec. 157.201.  MENTAL HEALTH AND BRAIN INSTITUTE RESEARCH
FUND.  (a)  In this subchapter, "fund" means the Mental Health and
Brain Institute Research Fund established under Section 68, Article
III, Texas Constitution.  The fund is a special fund in the treasury
outside the general revenue fund to be administered by the
institute. The institute may use money in the fund as authorized by
this chapter without further legislative appropriation.
(1)  money transferred to the fund under Section 68,
Article III, Texas Constitution;
(2)  money the legislature appropriates, credits, or
(3)  gifts and grants, including grants from the
federal government, and other donations received for the fund;
(4)  patent, royalty, and license fees and other income
received under a contract entered into as provided by Section
(5)  investment earnings and interest earned on amounts
(c)  The fund may only be used for the purposes authorized
under Section 68, Article III, Texas Constitution, including:
(1)  the award of grants for mental health and brain
research, research facilities, and research opportunities:
(A)  for the prevention, treatment, and
rehabilitation of mental and behavioral health diseases and other
issues and substance use disorders and other addictions, and the
mitigation of the incidence of detrimental health impacts on mental
(B)  to develop therapies, protocols, medical
pharmaceuticals, or procedures for the cure or substantial
mitigation of brain diseases or disorders;
(2)  the purchase, construction, or renovation,
subject to approval by the institute, of research facilities by or
for a state agency or grant recipient; and
(3)  the operation of the institute.
Sec. 157.202.  ROLE OF TEXAS TREASURY SAFEKEEPING TRUST
COMPANY.  (a)  In this section, "trust company" means the Texas
Treasury Safekeeping Trust Company.
(b)  The trust company shall invest the fund in accordance
(c)  The trust company shall hold and invest the fund, and
any accounts established in the fund, for the institute, taking
into consideration the authorized uses of money in the fund.  The
fund may be invested with the state treasury pool and may be pooled
with other state assets for purposes of investment.
(d)  The overall objective for the investment of the fund is
to maintain sufficient liquidity to meet the needs of the fund while
striving to preserve the purchasing power of the fund over a full
(e)  The trust company has any power necessary to accomplish
the purposes of managing and investing the assets of the fund.  In
managing the assets of the fund, through procedures and subject to
restrictions the trust company considers appropriate, the trust
company may acquire, exchange, sell, supervise, manage, or retain
any kind of investment that a prudent investor, exercising
reasonable care, skill, and caution, would acquire or retain in
light of the purposes, terms, distribution requirements, and other
circumstances of the fund then prevailing, taking into
consideration the investment of all the assets of the fund rather
(f)  The expenses of managing the fund shall be paid from the
(g)  The trust company annually shall provide to the
institute and the oversight committee a written report on the
(h)  The trust company shall adopt an appropriate written
investment policy for the fund.  The trust company shall present the
investment policy to the investment advisory board established
under Section 404.028, Government Code.  The investment advisory
board shall submit to the trust company recommendations regarding
(i)  The institute annually shall provide to the trust
company a forecast of the cash flows into and out of the fund.  The
institute shall provide updates to the forecasts as appropriate to
ensure the trust company is able to achieve the objective specified
(j)  The trust company shall disburse money from the fund as
directed by the institute. The institute shall direct disbursements
from the fund on a semiannual schedule specified by the institute
and not more frequently than twice in any state fiscal year.
Sec. 157.203.  AUTHORIZED USE OF GRANT MONEY; LIMITATIONS.
(a)  A grant recipient awarded money from the fund may use the money
for research consistent with the purposes of this chapter and in
accordance with a contract between the grant recipient and the
(b)  Except as otherwise provided by this section, grant
money awarded under this chapter may be used for authorized
(4)  conference fees and expenses;
(7)  contracted research and development;
(9)  construction or renovation of state or private
(10)  reimbursement for participation costs incurred
by brain cancer clinical trial participants, including
transportation, lodging, and any costs reimbursed under the cancer
clinical trial participation program established under Chapter 51,
(c)  A grant recipient awarded money under this chapter for
mental health or brain disease research may not spend more than five
percent of the money for indirect costs.  For purposes of this
subsection, "indirect costs" means the expenses of conducting
business that are not readily identified with a particular grant,
contract, project, function, or activity, but are necessary for the
general operation of the organization or the performance of the
(d)  Not more than five percent of the total amount of grant
money awarded under this chapter in a state fiscal year may be used
for facility purchase, construction, remodel, or renovation
purposes, and those expenditures must benefit mental health or
(e)  Not more than 10 percent of the total amount of grant
money awarded under this chapter in a state fiscal year may be used
during that year for prevention projects and strategies to mitigate
the incidence of detrimental impacts on mental health or the brain.
SUBCHAPTER F.  CONFLICTS OF INTEREST: DISCLOSURE; RECUSAL
Sec. 157.251.  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 peer
review committee, and institute employees.
(b)  An oversight committee member, program integration
committee member, peer review committee member, or institute
employee shall recuse themselves, as provided by Section
157.252(a), (b), or (c), as applicable, if the member or employee,
or a person who is related to the member or employee within the
second degree of affinity or consanguinity, has a professional or
financial interest in an entity awarded a grant or applying for a
(c)  A person has a professional interest in an entity
awarded a grant or applying for a grant from the institute if the
(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
(2)  serves as an elected or appointed officer of the
(3)  is an employee of or is negotiating future
(5)  is a professional associate of a primary member of
(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 project team;
(7)  is engaged or is actively planning to be engaged in
collaboration with a primary member of the entity's project team;
(8)  has long-standing scientific differences or
disagreements with a primary member of the entity's project team,
and those differences or disagreements:
(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 awarded a
grant or applying for a grant 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 awarded a grant or applying for a grant
(2)  could reasonably foresee that an action taken by
the oversight committee, the program integration committee, a peer
review committee, or the institute could result in a financial
(e)  Nothing in this chapter limits the authority of the
oversight committee to adopt additional conflict-of-interest
Sec. 157.252.  DISCLOSURE OF CONFLICT OF INTEREST; RECUSAL.
(a)  If an oversight committee member or program integration
committee member has a conflict of interest described by Section
157.251 regarding an application 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
(2)  disclose the conflict of interest in an open
meeting of the oversight committee; and
(3)  recuse themselves from participating in the
review, discussion, deliberation, and vote on the application and
from accessing information regarding the matter to be decided.
(b)  If a peer review committee member has a conflict of
interest described by Section 157.251 regarding an application
before the member's committee for review or other action, the
(1)  provide written notice to the chief executive
officer of the conflict of interest; and
(2)  recuse themselves from participating in the
review, discussion, deliberation, and vote on the application and
from accessing information regarding the matter to be decided.
(c)  If an institute employee has a conflict of interest
described by Section 157.251 regarding an application before the
employee for review or other action, the employee:
(1)  shall provide written notice to the chief
executive officer of the conflict of interest;
(2)  shall recuse themselves from participating in the
(3)  may not access information regarding the matter to
(d)  An oversight committee member, program integration
committee member, peer review committee member, or institute
employee with a conflict of interest may seek a waiver as provided
(e)  An oversight committee member, program integration
committee member, peer review 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,
(f)  An oversight committee member, program integration
committee member, peer review committee member, or institute
employee who intentionally violates this section is subject to
removal from further participation in the institute's grant review
Sec. 157.253.  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, peer review committee
member, or institute employee.  The rules must:
(1)  authorize the chief executive officer or an
oversight committee member to propose granting 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
(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
(5)  require the institute to retain documentation of
Sec. 157.254.  INVESTIGATION OF UNREPORTED CONFLICTS OF
INTEREST.  (a)  An oversight committee member, a program
integration committee member, a peer review committee member, or an
institute employee who becomes aware of a potential conflict of
interest described by Section 157.251 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
(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
(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
(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
(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. 157.255.  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 157.251 or other impropriety or
self-dealing.  The determination must specify any actions to be
taken to address the conflict of interest, impropriety, or
(1)  reconsideration of the application; or
(2)  referral of the application to another peer 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
(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
SUBCHAPTER G.  PROCEDURE FOR AWARDING GRANTS
Sec. 157.301.  PEER REVIEW PROCESS FOR GRANT AWARD.  The
institute shall establish a peer review process to evaluate and
recommend all grants the oversight committee awards under this
Sec. 157.302.  GRANT AWARD RULES AND PROCEDURES.  (a)  The
oversight committee shall adopt rules regarding the procedure for
awarding grants to an applicant under this chapter.  The rules must
(1)  the peer review committee to score grant
applications and make recommendations to the program integration
committee and the oversight committee regarding the award of
grants, including providing a prioritized list that:
(A)  ranks the grant applications in the order the
peer review committee determines applications should be funded; and
(B)  includes information explaining each grant
applicant's qualification under the peer review committee's
standards for recommendation; and
(2)  the program integration committee to submit to the
oversight committee a list of grant applications the program
integration committee by majority vote approved for recommendation
(A)  includes documentation on the factors the
program integration committee considered in making the
(B)  is substantially based on the list submitted
by the peer review committee under Subdivision (1); and
(C)  to the extent possible, gives priority to
(i)  may lead to immediate or long-term
medical and scientific breakthroughs in the areas of prevention,
treatment, or cures for mental health issues or brain disease;
(ii)  strengthen and enhance fundamental
science in mental health or brain research;
(iii)  ensure a comprehensive coordinated
approach to mental health or brain research;
(v)  align with state priorities and needs,
including priorities and needs outlined in other state agency
strategic plans, or address federal or other major research
sponsors' priorities in scientific or technological fields in the
area of mental health or brain research;
(vi)  are matched with money provided by a
private or nonprofit entity or institution of higher education;
(vii)  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)  benefit the residents of this state,
including a demonstrable economic development benefit to this
(ix)  enhance research superiority at
institutions of higher education in this state by creating new
research superiority, attracting existing research superiority
from institutions outside this state and other research entities,
or attracting from outside this state additional researchers and
(x)  expedite innovation and product
development, attract private sector entities to stimulate a
substantial increase in high-quality jobs, and increase higher
education applied science or technology research capabilities; and
(xi)  address the goals of the research
(b)  A member of a peer review committee may not attempt to
use the committee member's official position to influence a
decision to approve or award a grant or contract to the committee
(c)  A program integration committee member may not discuss a
grant applicant recommendation with an oversight committee member
unless the program integration committee has fulfilled the
requirements of Subsection (a)(2).
(d)  Two-thirds of the oversight committee members present
and voting must vote to approve each grant award recommendation of
the program integration committee.  If the oversight committee does
not approve a grant award recommendation of the program integration
committee, a statement explaining the reasons the recommendation
was not followed must be included in the minutes of the meeting.
(e)  The oversight committee may not award more than $300
million in grants under this chapter in a state fiscal year.
(f)  The oversight committee may not award a grant to an
applicant who has made a gift or grant to the institute, an
oversight committee member, or an institute employee on or after
January 1, 2026.  This section does not apply to gifts, fees,
honoraria, or other items also excepted under Section 36.10, Penal
Sec. 157.303.  MULTIYEAR PROJECTS.  (a)  The oversight
committee may approve the award of grant money for a multiyear
(b)  The oversight committee shall specify the total amount
of money approved to fund the multiyear project.  For purposes of
this chapter, the total amount is considered to have been awarded in
the state fiscal year the peer review committee approved the
project.  The institute shall distribute only the money to be
expended during that fiscal year.  The institute shall distribute
the remaining grant money as the money is needed in each subsequent
Sec. 157.304.  CONTRACT TERMS.  (a)  Before disbursing a
grant awarded under this chapter, the institute shall execute a
written contract with the grant recipient.  The contract shall:
(1)  specify that except for awards to state  agencies
or public institutions of higher education, if all or any portion of
the grant amount 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
(i)  repay to this 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 this state a proportionate
amount of any profit realized from the sale;
(2)  specify that if the grant recipient has not used
awarded grant money for the purposes for which the grant was
intended, the recipient shall repay that grant amount and any
related interest applicable under the contract to this state at the
agreed rate and on the agreed terms;
(3)  specify that 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 awarded grant money
and any related interest applicable under the contract to this
state at the agreed rate and on the agreed terms;
(4)  include terms relating to intellectual property
rights consistent with the standards developed by the oversight
committee under Section 157.305;
(5)  require, in accordance with Subsection (b), the
grant recipient to dedicate an amount of matching money equal to
one-half of the amount of the grant awarded and specify the amount
of matching money to be dedicated;
(6)  specify the period in which the grant award must be
(7)  include the specific deliverables of the project
that is the subject of the grant proposal.
(b)  Before the institute may disburse grant money, the grant
recipient must certify the recipient has available an unexpended
amount of money equal to one-half of the grant money and has
dedicated that available money to the research subject to the grant
proposal.  The institute shall adopt rules specifying a grant
recipient's obligations under this subchapter.  At a minimum, the
(1)  allow a recipient institution of higher education
or private or independent institution of higher education, as those
terms are defined by Section 61.003, or research institute or
center affiliated with the institution, to credit toward the
recipient's matching money 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 157.203(c);
(A)  a grant recipient of more than one grant
award under this chapter may provide matching money certification
(B)  the recipient of a multiyear grant award may
yearly certify matching money; and
(C)  grant money may not be disbursed to the grant
recipient until the annual certification of the matching money has
(3)  specify that money for certification purposes may
(B)  the fair market value of drug development
support provided to the recipient by the National Institutes of
Health or other similar programs;
(D)  funds of other states; and
(E)  nongovernmental funds, including private
funds, foundation grants, gifts, and donations;
(4)  specify that the following items may not be used
(B)  volunteer services provided to a grant
(D)  preexisting real estate of the grant
recipient, including buildings, facilities, and land;
(E)  deferred giving, including a charitable
remainder annuity trust, charitable remainder unitrust, or pooled
(F)  any other items determined by the institute;
(5)  require the grant recipient's certification to be
included in the grant award contract;
(6)  specify that a grant recipient's failure to
provide certification serves as grounds for terminating the grant
(7)  require a grant recipient to maintain adequate
documentation supporting the source and use of the money required
by this subsection and to provide documentation to the institute on
(8)  require the institute to establish a procedure to
annually review the documentation supporting the source and use of
money reported in the required certification.
(c)  The institute shall establish a policy on advance
(d)  The oversight committee shall adopt rules to administer
Sec. 157.305.  PATENT ROYALTIES AND LICENSE REVENUES PAID TO
STATE.  (a)  The oversight committee shall establish standards
requiring all grant awards to be subject to an intellectual
property agreement that allows this state to collect royalties,
income, and other benefits, including interest or proceeds
resulting from securities and equity ownership, realized as a