A.R.S. tit. 36 ch. 2 — Arizona Revised Statutes Title 36 Chapter 2 — State Health Institutions And Agencies

36-201. Definitions In this article, unless the context otherwise requires: 1. "Chief medical officer" means the chief medical officer of the state hospital. 2. "Department" means the department of health services. 3. "Director" means the director of the department of health services. 4. "Employee" means an officer or employee of the state hospital. 5. "State hospital" means Arizona state hospital. 6. "Superintendent" means the superintendent of the state hospital. 36-202. State hospital for the mentally disordered; official name; purpose; facilities and equipment A. A state hospital shall be maintained for the care and treatment of persons with mental disorders and persons with other personality disorders or emotional conditions who will benefit from care and treatment. Admissions to the state hospital shall be in accordance with law. The hospital shall be called the Arizona state hospital. B. Subject to legislative appropriation, the state hospital may provide services to persons suffering from alcoholism and to persons suffering from drug abuse. C. The state hospital shall have adequate facilities and equipment for enlightened and scientific treatment of nervous and mental diseases in accordance with approved methods of mental therapeutics. The facilities shall include, among other things: 1. Facilities for medical and psychiatric treatment with special attention to occupational therapy and other special therapies. 2. Facilities for proper segregation and care of child patients. 3. Facilities for recreation and physical training. 4. An institutional library for the use of patients. 5. A properly equipped dental department. 6. A properly equipped laboratory and x-ray department. 7. A patient tracking system approved by the director that monitors individual progress on an inpatient basis and ensures suitable aftercare placement. D. The state hospital shall be under the charge and control of the director of the department of health services, pursuant to this article. 36-202.01. Admission of juveniles to state hospital The Arizona state hospital shall collect census data for juvenile treatment programs to establish maximum capacity and the allocation formula required pursuant to section 36-206, subsection D. The Arizona state hospital is not required to provide services to juveniles that exceed the funded capacity. If the Arizona state hospital reaches its funded capacity for juveniles, the superintendent of the state hospital shall establish a waiting list for admission based on the date of the commitment or treatment order. 36-203. Persons with intellectual disabilities assigned to state hospital; department duties A. The department of health services shall develop and provide, in coordination with the department of economic security, specialized treatment programs for persons with an intellectual disability who have been admitted to the state hospital. The department of health services may contract with the department of economic security in providing these programs. B. The department, to the extent practicable, shall provide separate areas at the state hospital for persons diagnosed with intellectual disabilities and, to the extent practicable, shall provide that treatment programs developed pursuant to subsection A of this section are separate from treatment programs for other patients and for separate use of facilities by persons diagnosed with intellectual disabilities. C. The department of health services, on request of a parent or guardian of a minor with an intellectual disability or the guardian of an adult with an intellectual disability or on the request of an adult with an intellectual disability, shall notify the department of economic security before the release of that person from the state hospital and request that the department of economic security provide placement evaluation and case management services for that person. The evaluation shall consider the person's needs for housing, day programs, employment training, employment and support services. D. The department, on the application of a parent or guardian of a minor with an intellectual disability or the guardian of an adult with an intellectual disability or on the request of an adult with an intellectual disability, when the person has been authorized for discharge from the state hospital, may provide interim care and custody for that person pending the availability of intellectual disability programs and services in accordance with section 36-556. 36-204. Duties of director The director shall: 1. Adopt rules for inpatient services that ensure proper review of treatment and discharge plans, arrangement for aftercare placements, transfer of medical records and assistance with medications. 2. If deemed advisable, establish a nurses' training school in connection with the state hospital, which shall be under the supervision of the superintendent. 3. Prescribe forms of complaints, certificates of mental illness and commitments. 4. Adopt rules for the commitment of mentally ill persons that are not inconsistent with provisions of law. 5. Adopt rules for the administration of the state hospital and to carry out the purposes of this article. 36-205. Superintendent of state hospital; appointment; qualifications; compensation; chief medical officer A. There shall be a superintendent of the state hospital who shall be appointed by and under the supervision of the director. B. The compensation to be paid to the superintendent shall be determined pursuant to section 38-611. C. The superintendent shall be removed only for cause. D. The superintendent shall have the following qualifications: 1. Administrative experience in the private sector. 2. An educational background that prepares the superintendent for the administrative responsibilities assigned to the position. 3. Mental health-related experience in both an institutional and community setting. E. The superintendent, with the approval of the director, shall appoint a chief medical officer of the state hospital who is a physician and who is licensed pursuant to title 32, chapter 13 or 17. The chief medical officer shall have not less than three years' experience in the treatment of psychiatric disorders and shall be board-certified in psychiatry by the board of psychiatry and neurology. The chief medical officer is eligible for compensation pursuant to section 38-611. The chief medical officer is responsible for the clinical administration of the hospital and shall report directly to the superintendent. 36-206. Duties of superintendent; clinical assessment A. The director has charge of the state hospital and the superintendent shall supervise and direct its activities, subject to the provisions of law and approval of the director. The superintendent is directly responsible to the director for carrying out the purposes for which the hospital is maintained. Subject to the approval of the director, the superintendent may deputize any qualified officer of the state hospital to do or perform any act the superintendent is empowered to do or charged with the responsibility of doing by law. B. The superintendent in December each year shall estimate the probable daily per capita cost of treatment and maintenance of each category of patients for the next ensuing year as determined in accordance with standard accounting practices. A statement of the estimate shall be provided to the director in January of the following year. C. The superintendent, on request, shall provide to the director a clinical assessment of the state hospital's programs. D. On or before August 1 of each year, the director shall establish maximum funded capacity and a percentage allocation formula for forensic and civil bed capacity at the Arizona state hospital based on census data collected pursuant to sections 13-3992, 13-4512, 36-202.01 and 36-503.03. By June 1 of each year, the director shall solicit and consider the recommendations of representatives of the county board of supervisors, the Arizona prosecuting attorneys' advisory council and the superior court when establishing this formula. In addition to establishing the formula, the director, the county board of supervisors, the Arizona prosecuting attorneys' advisory council and the superior court shall develop a contingency plan for the placement of patients subject to sections 13-3992, 13-4512, 36-202.01 and 36-503.03 in times of emergency and other unforeseen circumstances. The director shall notify the governor, the president of the senate, the speaker of the house of representatives and the chairperson of each county board of supervisors of the funded capacity and allocation formula for the current fiscal year. Thirty days before the notification of the forensic and civil bed funded capacity formula, the director shall provide this information to the representatives of the county board of supervisors, the Arizona prosecuting attorneys' advisory council and the superior court for comment. The director shall include these comments when issuing the formula. 36-207. Fingerprinting requirements; definition A. A state hospital employee or volunteer must have a valid fingerprint clearance card issued pursuant to section 41-1758.07 or must apply for a fingerprint clearance card within seven working days after beginning employment or performing volunteer work. The employee or volunteer must certify on forms that are provided by the department and that are notarized that the person is not awaiting trial on or has never been convicted of or admitted in open court or pursuant to a plea agreement to committing any of the offenses listed in section 41-1758.07, subsection B in this state or any similar offense in another state or jurisdiction. A conviction after a plea of no contest is deemed to be a conviction for the purposes of this subsection. B. The state hospital may not allow a person to be an employee or perform volunteer work if that person has been denied a fingerprint clearance card pursuant to section 41-1758.07 or has not received an interim approval from the board of fingerprinting pursuant to section 41-619.55, subsection I. C. For the purposes of this section, "state hospital" includes the Arizona community protection and treatment center. 36-208. Employees; compensation A. Except as otherwise provided by this article, the director shall employ all employees of the state hospital. The director may employ necessary medical consultants on recommendation of the superintendent. The director may permit members of the medical staff to act as consultants in psychiatry. B. Subject to the laws of this state governing state personnel administration, the superintendent may discharge an employee for cause. An employee so discharged, on request, may have the reasons for the discharge reviewed and determined by the director. The superintendent shall file a written report with the director of each discharge setting forth the reasons for the discharge. C. The compensation of employees of the state hospital shall be as determined pursuant to section 38-611. 36-209. Reports by superintendent and director A. At such time as the director designates, the superintendent shall submit to the director a report of the activities of the state hospital during the preceding fiscal year, including: 1. The number of patients received, conditionally discharged and discharged and voluntary patients treated. 2. Methods of treatment used and the results. 3. The total number, including the number of such persons who were committed on a voluntary and involuntary basis, of seriously mentally ill patients as defined in section 36-550 and the place to which each person was discharged. 4. Census data for treatment programs pursuant to sections 13-3992, 13-4512, 36-202.01 and 36-503.03. 5. A complete employment and personnel record. 6. The condition of existing equipment. 7. Recommendations for improvement of the institution. 8. Other matters required by the director or deemed advisable by the superintendent to present a complete description of the condition and activities of the hospital. B. Not later than the fifteenth day of each month, the director shall prepare in duplicate a financial statement of the affairs of the state hospital, including: 1. The amounts appropriated for the current fiscal year for operation, maintenance and improvement. 2. The amount expended during the preceding calendar month. 3. The balance on hand. 4. The estimated expenditures for the current month. 5. An inventory report. C. The original report and statements required by this section shall be filed with and retained as records of the director and duplicates filed with the director of the department of administration. D. At such time as the director designates, the superintendent shall submit to the director a financial statement of the affairs of the state hospital during the preceding fiscal year in a form prescribed by the director of the department of administration. E. By October 1 of each year, the director shall submit to the governor a comprehensive report of the activities of the state hospital during the preceding fiscal year, which shall include the annual reports of the superintendent, and shall contain: 1. An account of the work done. 2. Recommendations for improvements. 3. Financial statements that clearly reflect the origin and disposition of all monies that have come into the hands of the director or an employee through appropriations or otherwise. F. The director shall make such supplemental reports as the governor or the legislature requests. G. The annual report prescribed by subsection E of this section shall be published for the information of the public and five copies shall be delivered to the chief clerk of the house of representatives and the secretary of the senate, respectively, who shall keep them on file for the use of the members of each house. 36-210. Expenditures A. This article does not give the director or any employee authority to create a debt or obligation in excess of the amount appropriated by the legislature to carry out its provisions. If monies are not appropriated to carry out the purpose of this article, the director shall submit recommendations to the legislature, with a statement of the cost when an improvement is requested. B. Except as provided by subsection D of this section, the director of the department of administration shall not issue a warrant for expenditures by the state hospital in excess of the estimate contained in the monthly financial statement unless the superintendent submits a written request that is approved in writing by the director of the department of health services and that states the reasons for the request. The director of the department of administration shall not issue warrants in excess of the amount available for the current quarter. C. If a patient in the state hospital requires a health care service that the state hospital or a facility or provider contracted by the state hospital cannot provide, the department of health services shall pay approved claims from a facility or provider that provides these required services as follows: 1. For inpatient and outpatient hospital services, the state shall reimburse at a level that does not exceed the reimbursement methodology established in section 36-2903.01, subsection G. 2. For health and medical services, the state shall reimburse providers at a level that does not exceed the capped fee-for-service schedule that is adopted by the Arizona health care cost containment system administration pursuant to chapter 29, article 1 of this title and that is in effect at the time the service is delivered. D. Monies appropriated for capital investment may be expended at any time during the fiscal period for which the monies are appropriated as directed by the director. 36-211. Income from land rentals and permanent funds In addition to other funds appropriated to its use, any other law notwithstanding, the legislature may appropriate to the use of the state hospital the annual income from land rentals and interest on the investment of the permanent funds arising from the grant of land for insane asylums under the terms of the enabling act of June 20, 1910, and the state constitution. The monies appropriated by this section may be expended as the director directs. 36-212. Maximum security area required The superintendent, under the direction of the director, shall equip, staff and supervise the operation of an area consisting of one or more separate buildings on the state hospital grounds in Phoenix to be designated a maximum security area. The superintendent shall designate which patients shall be confined within a maximum security area, which shall be equipped, staffed and maintained in order to provide treatment and necessary supervision to prevent the patients from leaving the area without authorization. 36-213. Store and canteen; deposit A. The superintendent, with the approval of the director, may set aside and designate any space on the grounds of the hospital that is not needed for other authorized purposes for the establishment and maintenance of store and canteen facilities for the sale of candies, cigarettes, food, nonalcoholic beverages, sundries and other articles to patients and employees and for the benefit of patients of the state hospital. B. The superintendent, with the approval of the director, may contract with an outside firm, individual or agency to lease and operate the store and canteen facilities. The outside firm, individual or agency shall provide a bond in an amount set by the superintendent with the approval of the director. The facilities shall be conducted subject to the rules and regulations of the department, and rental and service charges shall be established by the superintendent, with the approval of the director, as will reimburse the hospital for the cost thereof. C. Any profits derived from the operation of such facilities, after reimbursement to the hospital, shall be deposited in the department of health services donations fund created by authority of section 36-132, subsection B. The monies may be expended as the director directs for the benefit of the patients of the state hospital. The provisions of title 35, chapter 1 do not apply to the monies in the fund. 36-214. Arizona state hospital; private operation A. Notwithstanding any law to the contrary, pursuant to requests for proposals, the department of health services may enter into a five year contract with a private entity to administer the Arizona state hospital and deliver client services. The contract shall allow the department to renew the contract for two subsequent renewal periods of not more than five years each and shall prescribe the circumstances under which the department may terminate the contract before the end of a five year period. The department may issue separate requests for proposals for criminal, civil, juvenile and adult population categories in the state hospital. B. The contract shall include the following requirements: 1. The contractor must successfully attain performance goals prescribed by the department and the joint legislative budget committee relating to improvement of the state hospital's administration and delivery of client services. 2. The contractor shall not use subcontractors or subsidiaries to deliver services prescribed in the contract. C. To be considered for an award of a contract, the contractor must demonstrate that it has: 1. The qualifications, operations and management experience and experienced personnel necessary to carry out the terms of the contract. 2. The ability to comply with applicable standards and any specific court order, if required. 3. A demonstrated history of successful operation and management of secure behavioral health facilities. 4. A demonstrated history of successful delivery of behavioral health services. D. The contractor must agree: 1. That this state may cancel the contract at any time after the first year of operation, without penalty to this state, on ninety days' written notice. 2. To be in compliance at all times with all corrective action plans that are in effect at the time the contract is entered into or that are subsequently entered into by this state and the center for medicare and medicaid services. 3. To comply with all medicare certification requirements. E. A contract may provide for annual contract price or cost adjustments, except that any adjustments may be made only once each year effective on the anniversary of the effective date of the contract. If any adjustment is made pursuant to the terms of the contract, it must be applied to the total payments made to the contractor for the previous contract year and shall not exceed the per cent of change in the average consumer price index as published by the United States department of labor, bureau of labor statistics between that figure for the latest calendar year and the next previous calendar year. Any price or cost adjustments different than those authorized in this subsection may be made only if the legislature specifically authorizes the adjustments and appropriates monies for that purpose, if required. F. The department shall not award a contract unless: 1. It receives an acceptable proposal pursuant to any request for proposals. For the purposes of this paragraph, "acceptable proposal" means a proposal that substantially meets all of the requirements or conditions prescribed in this section and that meets all of the requirements in the request for proposals. 2. The proposal offers cost savings to this state based on the standard cost comparison model approved by the joint legislative budget committee. 3. The proposal offers a level and quality of services that equal or exceed those that would be provided by this state. 4. The contractor provides audited financial statements for the previous five years, or for each of the years the contractor has been in operation, if fewer than five years, and provides other financial information as requested. 5. The contractor provides an adequate plan of insurance, specifically including coverage or insurance for civil rights claims and liabilities as approved by the risk management division of the department of administration. 6. The contractor agrees to be liable for the costs of any emergency, public safety or security services provided to the contractor by this state or any political subdivision of this state and to reimburse this state or any political subdivision of this state for the cost of those services. G. The sovereign immunity of this state does not apply to the contractor. Neither the contractor nor the insurer of the contractor may plead the defense of sovereign immunity in any action arising out of the performance of the contract. H. The contract terms are subject to prior review by the joint legislative budget committee before placement of any advertisement that solicits a response to a request for proposals. Any proposed modification or amendment to the contract is subject to prior review by the joint legislative budget committee. I. During its first year of operation, the contracting entity shall submit monthly reports to the department and the joint legislative budget committee as prescribed by the department. Thereafter, the contracting entity shall submit quarterly reports to the department and the joint legislative budget committee as prescribed by the department. J. At the end of the fourth year of the contract, an independent evaluator selected by the department shall conduct and complete a performance review to determine if the contracting entity has met the goals specified in the contract. The independent evaluator shall submit a report of its findings to the governor, the president of the senate, the speaker of the house of representatives and the joint legislative budget committee on or before May 1, 2010 and shall provide a copy of its report to the secretary of state and the director of the Arizona state library, archives and public records. K. The department shall make a good faith attempt to place all state hospital personnel who are under the state personnel system on the effective date of the contract entered into pursuant to this section and who are not offered continued employment by the contracting entity. L. All appropriated monies that remain unexpended and unencumbered on the effective date of the contract entered into pursuant to this section revert to the state general fund. M. The department of health services shall report to the joint legislative budget committee by July 1, 2006 on whether the department intends to privatize the state hospital. If the department intends to privatize the state hospital, the report shall contain a time frame for issuing a request for proposals. If the department decides against privatizing the state hospital, the report shall include the department's rationale for not doing so. 36-215. State hospital revolving fund; nonreversion A. The permanent state hospital revolving fund is established in the amount of five thousand dollars for use in making cash outlays for postage, C.O.D. packages, travel or other minor disbursements which are proper as ultimate claims for payment from state funds. Such expenditures from this fund and reimbursement thereto shall be as prescribed by the director of the department of administration. B. A full accounting of the use of this fund shall be made to the director of the department of administration annually or as required by the director of the department of administration. C. Monies of the permanent state hospital revolving fund shall not revert to the state general fund at the end of any fiscal year. 36-216. Budget for state hospital A. The department shall present a budget request that includes all information on the potential availability of other monies, including federal monies, that may be used in the following fiscal year to fund the state hospital. B. The budget request presented pursuant to subsection A of this section shall include a proposed budget for the state hospital, with a specific amount of the total budget estimated to be used for patients who are seriously mentally ill. C. Monies appropriated to the department for the state hospital programs, fees generated by the department for these programs and grants and gifts to the department shall be maintained in the appropriate fund to pay program and administrative costs. The administrative costs of each program shall be separately identified in the accounting records of the department. 36-217. State hospital; annual report A. On or before January 1 of each year, the director shall submit to the governor, the speaker of the house of representatives and the president of the senate a financial and programmatic report on the state hospital for the preceding fiscal year. In addition to information that the department deems relevant, this report shall include all of the following information: 1. All revenues and expenditures of the state hospital, including specific identification of administrative costs for and the number of patients served at the state hospital. 2. A breakdown of the patients served at each facility at the state hospital, including information on the following: (a) Gender. (b) Race. (c) Age. (d) Legal status. (e) County of origin. (f) Program type. (g) Census by unit. (h) Primary diagnosis of each by category. (i) Length of stay. 3. Admissions by civil commitment, including the number of admissions and discharges, the time between the request for each admission and the date of the admission or denial of the admission and aggregate data for reason of denial by category. 4. Data collected from the state hospital's safety plan, including all of the following: (a) The number and type of all assaults by category, with sexual assaults reported as a separate category. (b) The number of assaults reported to law enforcement, regulatory agencies and accreditation agencies. (c) The number of times law enforcement was called to the state hospital in response to an assault. 5. An update on the establishment of a psychiatric center of excellence. B. This section does not require the release of individually identifiable health information of any specific patient. 36-218. Arizona state hospital charitable trust fund The Arizona state hospital charitable trust fund is established consisting of monies collected from contracts and lease agreements entered into pursuant to section 36-136, subsection C. The director shall administer the fund. Monies in the fund are continuously appropriated and may be spent for the benefit of persons with mental illness in this state. Monies in the fund do not revert to the state general fund at the end of a fiscal year. 36-219. Contracting requirements; art therapy services; definition A. The department may contract for art therapy services, directly or through a contractor, only with an art therapist who holds an active national board certification in art therapy from the art therapy credentials board or who is a master's level graduate in art therapy under the active supervision of a board-certified art therapist to qualify for national registration or board certification with the art therapy credentials board. B. Subsection A of this section does not require the department to contract or reimburse for art therapy services. C. For the purposes of this section, "art therapy" means the interactive use of psychotherapeutic principles and methods from an individual with master's level training in art media, the neurobiological implications of art-making and art-based assessment models to facilitate alternative modes of receptive and expressive communication and to define and implement therapeutic interventions to meet cognitive, developmental, behavioral and emotional needs. 36-251. State laboratory A. The state laboratory shall be located in such places as the department of health services determines. B. The laboratory shall examine and analyze such foods, water supplies, drugs and other specimens as the director of the department of health services directs. 36-252. Chief of state laboratory; appointment; qualifications A. The state laboratory shall be under the supervision of a chief who shall be appointed by the director of the department of health services. B. The laboratory chief shall be a skilled pharmaceutical chemist or bacteriologist and analyst of foods, water supplies and drugs. 36-253. Chief of state laboratory; powers and duties A. The laboratory chief shall perform the duties prescribed by law and by the director of the department of health services. B. The laboratory chief may make provisions or issue directions for taking and forwarding samples of potable waters, and perishable foods or drinks. 36-254. Evidentiary effect of certificate of chief of state laboratory A certificate of analysis and examination by the chief of the state laboratory is prima facie evidence of the facts therein stated. 36-255. Reports by laboratory chief A. Whenever the chief of the state laboratory finds that adulterated, mislabeled or misbranded food has been on sale in the state, he shall forthwith report the facts to the director of the department of health services. B. The chief of the laboratory shall make an annual report to the director of the department of health services on or before July 1 each year upon adulterated, mislabeled or misbranded foods and liquids, including a list of examinations by him in which adulterants were found, the articles found mislabeled or misbranded and the names of the manufacturers, producers, jobbers and sellers of such adulterated, mislabeled or misbranded articles. 36-260. Definitions In this article, unless the context otherwise requires: 1. "Children who have a chronic illness or physical disability" means children who are under twenty-one years of age and whose primary diagnosis is a severe physical condition that may require ongoing, medical or surgical intervention. 2. "Department" means the department of health services. 36-261. Children who have a chronic illness or physical disability; program Subject to the availability of monies, the department shall establish and administer a program for children who have a chronic illness or physical disability or who are suffering from a condition that leads to a chronic illness or physical disability. The program shall provide for: 1. The development, extension and improvement of services for locating these children. 2. The evaluation of needs. 3. The gathering of statistical information. 4. A statewide information and referral service for children who have a chronic illness or physical disability to link those children and their families with local service providers. 36-262. Central statewide information and referral service for children who have a chronic illness or physical disability A. The purposes of the information and referral service for children who have a chronic illness or physical disability as prescribed pursuant to this article are to: 1. Establish a roster of agencies providing medical, educational, financial, social and transportation services to children who have a chronic illness or physical disability. 2. Develop or use an existing statewide information and referral service that provides information on services for children who have a chronic illness or physical disability. B. This section does not require any person or public or private agency or other entity to participate in the information and referral service. 36-271. Definitions In this article, unless the context otherwise requires: 1. "Department" means the department of health services. 2. "Disease" means a condition or disorder that causes the human body to deviate from its normal or healthy state and that has no known general cure or adequate medically accepted treatment. 3. "Medically accepted treatment" means a methodology or protocol recognized by the American medical association, the American college of surgeons or the national cancer institute or taught by an approved school of medicine as defined in section 32-1401 as a treatment that results in the restoration of the human body to a normal or healthy state. 36-272. Biomedical research The department shall advance research in this state relating to: 1. The causes, epidemiology and diagnosis of diseases. 2. The formulation of cures for diseases. 3. The development of medically accepted treatment and prevention of diseases, including the discovery and development of new drugs. 36-273. Powers and duties A. The department may: 1. Use monies in the disease control research fund established by section 36-274 to contract with individuals, organizations, corporations and institutions, public or private, in this state for any projects or services that the department determines may advance research into the causes, the epidemiology and diagnosis, the formulation of cures, the medically accepted treatment or the prevention of diseases, including new drug discovery and development, and for acquired immune deficiency syndrome reporting and surveillance. Public monies in the disease control research fund shall not be used for capital construction projects. 2. Enter into research and development agreements, royalty agreements, development agreements, licensing agreements and profit sharing agreements concerning the research, development and production of new products developed or to be developed through department-funded research. 3. Accept or receive monies from any source, including restricted or unrestricted gifts and contributions from individuals, foundations, corporations and other organizations and institutions. 4. Obtain expert services to assist in evaluating requests and proposals. 5. Request cooperation from any state agency for the purposes of this article. 6. Provide information and technical assistance to other jurisdictions and agencies. 7. Subject to title 41, chapter 4, article 4, employ personnel needed to carry out the duties of this article. B. The department shall: 1. Review and evaluate proposals or requests for projects or services. 2. Establish a mechanism to review the contracts awarded to ensure that the monies are used in accordance with the proposals approved by the department. 3. Prepare and submit a report on or before January 15 of each year to the governor, the president of the senate and the speaker of the house of representatives that describes the projects or services proposed to the department pursuant to this article, the projects or services for which the department has awarded a contract and the amount of monies necessary for each proposal, the cost of each proposal for which a contract was awarded, the names and addresses of the recipients of each contract and the purpose for which each contract was made. The department shall provide a copy of this report to the secretary of state. 36-274. Disease control research fund; lapsing; investment A. The disease control research fund is established consisting of monies received from the state lottery fund pursuant to section 5-572, subsection D, monies appropriated by the legislature and any gifts, contributions or other monies received by the department from any source to carry out the purposes of this article, except monies from the health research fund established by section 36-275. The department shall administer the disease control research fund. B. The department may expend monies in the disease control research fund for projects or services pursuant to section 36-273 and for expenses incurred by the department in carrying out the purposes of this article, including filing applications and maintaining patents. C. As a condition of each contract for cancer research projects or services, the department shall require that the recipient shall not use fund monies for any purpose, including any administrative or building purposes, other than the specific cancer research grant project contract. D. Monies in the disease control research fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. E. On notice from the department, the state treasurer shall invest and divest monies in the disease control research fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. 36-275. Health research fund A. The health research fund is established. Notwithstanding any law to the contrary, the department shall deposit, pursuant to sections 35-146 and 35-147, all monies it administers pursuant to section 36-773 into the health research fund. The department shall administer the fund. B. Except as provided by section 36-276, the department shall only expend monies in the health research fund for research on the prevention and treatment of tobacco related disease and addiction and research into the causes, epidemiology and diagnosis of diseases, the formulation of cures, the medically accepted treatment or the prevention of diseases including new drug discovery and development, and may include behavioral studies and attitude assessments, and for expenses incurred by the department in carrying out the purposes described in section 36-773. C. Monies in the health research fund are exempt from section 35-190 relating to lapsing of appropriations.