DALLAS – The $3 billion of bonding authority given to the Cancer Prevention and Research Institute of Texas by voters in 2007 would be stripped by a measure proposed by an east Texas lawmaker.
The Texas Public Finance Authority would be prohibited from issuing taxable general obligation bonds for the cancer-fighting agency at the end of 2013 under the resolution filed Tuesday by Sen. Kevin Eltife, R-Tyler.
If Eltife’s Senate Joint Resolution 19 is adopted by the Legislature, voters would decide in November 2013 whether to include the bond ban in the Texas Constitution.
The proposed amendment would allow only refunding bonds to be issued for the Institute after Jan. 1, 2014.
Cancer research is an important quest and the Institute needs to remain functional, Eltife said.
“However, I do not support the state of Texas going into debt to accomplish these objectives, and would prefer that it be funded on a ‘pay-as-you-go’ basis,” he said.
The measure would be listed on the ballot as, “The constitutional amendment discontinuing the authority to issue bonded indebtedness on behalf of the Cancer Prevention and Research Institute of Texas.”
Proposition 15, the constitutional amendment setting up the bond-financed research effort, was approved by more than 60% of Texans voting in November 2007. Texans authorized almost $10 billion of new state debt in that election.
The 2007 amendment allowed up to $3 billion of state taxable GO bonds to finance cancer-fighting research grants and prevention efforts funded by the agency. Sales were limited to tranches of $300 million a year over 10 years.
CPRIT has disbursed more than $800 million of cancer research grants since early 2010.
Texas Public Finance Authority issued $347 million of general obligation bonds for the CPRIT program in July 2011. The bonds were rated triple-A by Moody’s Investors Service and Fitch Ratings and AA-plus by Standard & Poor’s.
A bill to allow debt service to be paid from royalties and other revenues generated through agency-funded research was introduced earlier in the session by Sen. Jane Nelson, R-Flower Mound.
“As our investment begins to yield royalties and other proceeds, we should make sure that this revenue is used to offset costs and eventually put CPRIT on a path toward self-sustainability,” Nelson said.
Nelson also filed Senate Bill 149 to require a compliance officer to verify future grants received proper review and that additional measures are implemented to prevent future conflicts of interest.
“The public must have faith that (CPRIT) is operating in a fair, transparent manner and in compliance with the rules and laws we put in place to ensure accountability,” Nelson said.
Criminal and civil investigations into CPRIT’s process for awarding grants are under way by the Texas Attorney General and the Travis County District Attorney’s public integrity unit.
The probes began in December after CPRIT’s new compliance officer found an $11 million grant awarded in 2010 to a Dallas-based startup company did not receive proper scientific and financial reviews.
Gov. Rick Perry and other state officials have asked for a moratorium on grants until the investigations are complete. CPRIT received $600 million from the Legislature in the current two-year budget, but the proposed state budget for fiscal 2014-2015 does not include funding for the institute.