(a) For purposes of this chapter, a Conflict of Interest exists when an individual subject to this rule has an interest in the outcome of a Grant Application submitted by an entity receiving or applying to receive money from the Institute such that the individual is in a position to gain financially, professionally, or personally from either a positive or negative evaluation of the Grant Application. Individuals subject to this rule are:
  (1) Oversight Committee Members;
  (2) Institute employees;
  (3) Scientific Research and Prevention Programs Committee Members;
  (4) Program Integration Committee Members; and
  (5) Independent Contractors that perform services associated with the Grant Review Process on behalf of the Institute, such as facilitating grant review activities, evaluating the intellectual property held by or licensed to a Grant Applicant, or performing a business management due diligence review.
(b) Except under exceptional circumstances as provided in §702.17 of this chapter (relating to Exceptional Circumstances Requiring Participation), an individual who has a financial, professional, or personal interest, as set forth herein, in an entity receiving or applying to receive money from the Institute shall recuse himself or herself and may not participate in the review, discussion, deliberation, or vote related to the entity.
(c) A financial Conflict of Interest exists if the individual subject to this rule or a Relative of the individual subject to this rule:
  (1) Owns or controls, directly or indirectly, an ownership interest in an entity receiving or applying to receive money from the Institute or in a foundation or similar organization affiliated with the entity;
    (A) 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) It is not a financial Conflict of Interest if the ownership interest is limited to shares owned via an investment in a publicly traded mutual fund or similar investment vehicle so long as the individual subject to this rule does not exercise any discretion or control regarding the investment of the assets of the fund or other investment vehicle;
  (2) Could reasonably foresee that an action taken by the Scientific Research and Prevention Programs Committee, the Program Integration Committee, the Institute, or its Oversight Committee related to an entity receiving or applying to receive money from the Institute could result in a financial benefit to the individual; or
  (3) Has received a financial benefit from the Grant Applicant unrelated to the Grant Application of more than $5,000 within the past twelve months. This total includes fees, stock and other benefits. It also includes current stock holdings, equity interest, intellectual property or real property interest, but does not include diversified mutual funds or similar investment vehicle in which the person does not exercise any discretion or control regarding the investment of the assets of the fund or other investment vehicle.
(d) For purposes of this rule, a professional Conflict of Interest exists if the individual subject to this rule or a Relative of the individual subject to this rule:
  (1) Is a member of the board of directors, other governing board or any committee of an entity or of a foundation or similar organization affiliated with an entity receiving or applying to receive money from the Institute during the same Grant Review Cycle;
  (2) Serves as an elected or appointed officer of an entity receiving or applying to receive money from the Institute or of a foundation or similar organization affiliated with the entity;
  (3) Is an employee of or is negotiating future employment with an entity receiving or applying to receive money from the Institute or a foundation or similar organization affiliated with the entity;
  (4) Represents in business or law, including actively seeking to represent, an entity receiving or applying to receive money from the Institute or a foundation or similar organization affiliated with the entity;
    (A) Representation that constitutes a professional Conflict of Interest includes providing services as a consultant or contractor;
    (B) "Actively seeking to represent" includes activities such as responding to a request for proposals or qualifications issued by the entity applying to receive money from the Institute, providing a solicited or unsolicited proposal for work to the entity applying to receive money from the Institute, and negotiating terms of service for representation even if a final agreement has not yet been executed;
    (C) For the purposes of this rule, an individual is no longer considered to be actively seeking to represent an entity if that entity has selected another provider or has notified the individual that the individual's services are not needed;
  (5) Is a colleague, scientific mentor, or student of a Senior Member or Key Personnel of the research or prevention program team listed on the Grant Application, or is conducting or has conducted research or other significant professional activities with a Senior Member or Key Personnel of the research or prevention program team listed on the Grant Application within three years of the date of the review;
  (6) Is a student, postdoctoral associate, or part of a laboratory research group for a Senior Member or Key Personnel of the research or prevention program team listed on the Grant Application or has been within the past six years;
  (7) Is engaged or is actively planning to be engaged in collaboration with a Senior Member or Key Personnel of the research or prevention program team listed on the Grant Application; or
  (8) Has long-standing scientific differences or disagreements with a Senior Member or Key Personnel of the research or prevention program team listed on the Grant Application that are known to the professional community and could be perceived as affecting objectivity.
(e) For purposes of this rule, a personal Conflict of Interest exists if a Senior Member or Key Personnel of the research or prevention program team listed on the Grant Application or an applicant is a Relative or close personal friend of an individual subject to this rule.
(f) Nothing herein shall prevent the Oversight Committee from adopting more stringent standards with regard to prohibited conflicts of interest.
(g) The General Counsel and Chief Compliance Officer may provide guidance to individuals subject to this section on what interests would constitute a Conflict of Interest or an appearance of a Conflict of Interest.

Source Note: The provisions of this §702.11 adopted to be effective July 13, 2009, 34 TexReg 4640; amended to be effective February 11, 2010, 35 TexReg 872; amended to be effective March 2, 2014, 39 TexReg 1385; amended to be effective June 12, 2016, 41 TexReg 4027