PRINTER'S NO. 2134
No. 1719 Session of 2001
INTRODUCED BY STEELMAN, BEBKO-JONES, BELARDI, CALTAGIRONE,
M. COHEN, COLAFELLA, COSTA, COY, DeLUCA, EACHUS, D. EVANS,
FRANKEL, GEORGE, GRUCELA, HALUSKA, HARHAI, HORSEY, JAMES,
JOSEPHS, LaGROTTA, LEDERER, LUCYK, MANN, McCALL, MELIO,
PALLONE, RIEGER, ROONEY, SAINATO, SANTONI, SHANER, SOLOBAY,
STABACK, SURRA, THOMAS, TRAVAGLIO, TRELLO, TRICH,
C. WILLIAMS, WOJNAROSKI AND YUDICHAK, JUNE 11, 2001
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
JUNE 11, 2001
AN ACT
1 Providing for the establishment, implementation and
2 administration of the Pennsylvania Biomedical Research
3 Authority; imposing powers and duties on a board of trustees;
4 providing for the issuance of notes and bonds; and making an
5 appropriation.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the Pennsylvania
10 Biomedical Research Authority Act.
11 Section 2. Legislative intent.
12 The General Assembly finds and declares as follows:
13 (1) Pennsylvania's teaching colleges, academic health
14 centers and cancer research institutes have allowed this
15 Commonwealth to become a national leader in medical education
16 and research.
1 (2) Health care, the largest nonagriculture segment of
2 this Commonwealth's economy, accounts for more than 14% of
3 the domestic State product.
4 (3) At the heart of this Commonwealth's pharmaceutical
5 and emerging biotechnology industries is medical research for
6 which Pennsylvania provides no direct support or investment.
7 (4) Many academic health centers have reorganized their
8 research operations to encourage technology transfer and to
9 allow these institutions to share in the intellectual
10 property created by researchers at the institutions.
11 Section 3. Definitions.
12 The following words and phrases when used in this act shall
13 have the meanings given to them in this section unless the
14 context clearly indicates otherwise:
15 "Authority." The Pennsylvania Biomedical Research Authority.
16 "Biomedical company." A person whose headquarters or base of
17 operations is located in this Commonwealth, engaged in the
18 research, development, production or provision of biomedicine
19 for the purpose of developing or providing products, processes
20 or technologies for specific commercial or public purposes,
21 including, but not limited to, medical, pharmaceutical and
22 nutritional and other health-related purposes, or a person whose
23 headquarters or base of operations is located in this
24 Commonwealth who is engaged in providing services or products
25 necessary for such research, development, product or provision
26 of service. The term includes bioinformatics, biomedicine,
27 biopharmacogenomics, biopharmaceuticals, biorobotics,
28 bioscience, biotechnology and genome research companies.
29 "Biomedicine." The continually expanding body of fundamental
30 knowledge about the structure and function of biological systems
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1 which seeks, through research, to use that knowledge of
2 naturally occurring processes to develop products, services and
3 technologies to address medical problems, prolong life and
4 prevent and treat disease.
5 "Board." The board of directors of the Pennsylvania
6 Biomedical Research Authority.
7 "Bonds." Bonds, notes or other evidences of indebtedness
8 issued by the authority pursuant to this act.
9 "Clinical trials." Tests conducted at a site located within
10 this Commonwealth that has been approved for conducting studies
11 on the efficacy of drugs and other pharmaceutical products
12 leading to approval by the United States Food and Drug
13 Administration.
14 "Financial manager." An organization authorized to do
15 business in this Commonwealth that:
16 (1) is authorized to act as a trustee pursuant to the
17 provisions of the Employee Retirement Income Security Act of
18 1974 (Public Law 93-406, 88 Stat. 829) or an insurance
19 company;
20 (2) (i) is licensed or chartered by the Insurance
21 Department or Department of Banking;
22 (ii) is chartered by an agency of the Federal
23 Government; or
24 (iii) is subject to the jurisdiction of the Federal
25 Securities and Exchange Commission; and
26 (3) provides or secures venture capital.
27 "Fund." The Biomedical Research Revolving Fund.
28 "Governmental unit." Any agency of the Commonwealth or any
29 county, municipality or school district, or any agency,
30 instrumentality, authority or corporation thereof, or any public
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1 body having local or regional jurisdiction or power.
2 "Master Settlement Agreement." The settlement agreement and
3 related documents entered into on November 23, 1998, by the
4 Commonwealth and leading tobacco product manufacturers and
5 approved by the court in Commonwealth v. Philip Morris, April
6 Term 1997, No.2443 (CP Philadelphia County), on January 13,
7 1999.
8 "Public school retirement system." The retirement system for
9 public school employees created pursuant to 24 Pa.C.S. (relating
10 to education).
11 "Research center." An academic health center, medical school
12 or Federally approved cancer research center located within this
13 Commonwealth.
14 "State Employees' Retirement System." The retirement system
15 for State employees created pursuant to 71 Pa.C.S. (relating to
16 State government).
17 "Venture capital." A financial investment that results in
18 the acquisition of equity interests or a combination of debt and
19 equity interests which is expected to grow substantially in the
20 future and in which the expected return on investment is to come
21 predominantly from an increase in the value of the equity
22 interests.
23 Section 4. Creation of Pennsylvania Biomedical Research
24 Authority.
25 (a) Establishment.--There is hereby established a body
26 corporate and politic, with corporate succession, to be known as
27 the Pennsylvania Biomedical Research Authority. The authority is
28 constituted an instrumentality of the Commonwealth, and the
29 exercise by the authority of the powers conferred by this act
30 shall be deemed and held to be a public and essential
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1 governmental function.
2 (b) Membership.--The authority shall consist of an 11-member
3 board of directors composed of:
4 (1) The Physician General.
5 (2) The Secretary of Health.
6 (3) The Secretary of Community and Economic Development.
7 (4) Two Senators, one each to be appointed by the
8 President pro tempore of the Senate and the Minority Leader
9 of the Senate.
10 (5) Two members of the House of Representatives, one
11 each to be appointed by the Speaker of the House of
12 Representatives and the Minority Leader of the House of
13 Representatives.
14 (6) Four persons to be appointed by the Governor, who
15 shall serve for a term of two years and shall be eligible for
16 reappointment as follows:
17 (i) One shall be a licensed physician in this
18 Commonwealth.
19 (ii) One shall be a representative of a biomedical
20 company or a trade or regional association that
21 represents biomedical companies.
22 (iii) One shall be a representative of a health
23 consumer interest group.
24 (iv) One shall be a representative of a research
25 center.
26 (c) Officers.--The Secretary of Community and Economic
27 Development shall be the chairman and chief executive officer of
28 the authority. The board shall biannually elect a vice chairman.
29 The board shall select a secretary and treasurer who need not be
30 members of the board, and the same person may be selected to
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1 serve as both secretary and treasurer.
2 (d) Vesting of powers.--The powers of the authority shall be
3 vested in the board in office from time to time, and eight
4 members of the board shall constitute a quorum at any meeting.
5 Action may be taken and motions and resolutions adopted by the
6 authority by the affirmative vote of at least seven members of
7 the board. No vacancy on the board shall impair the right of a
8 quorum of the members of the board to exercise the powers and
9 perform the duties of the authority.
10 (e) Designees.--Each public officer member of the board may
11 designate an officer or employee of the Commonwealth to
12 represent him at meetings of the board. Each designee may
13 lawfully vote and otherwise act on behalf of the member of the
14 board for whom he constitutes the designee. The designation
15 shall be in writing delivered to the authority and shall
16 continue in effect until revoked or amended in writing delivered
17 to the authority.
18 (f) Services.--Research, investigation and other services
19 necessary for the operation of the board shall be carried out
20 from resources and by employees from the various executive
21 departments represented on the board. All applicable
22 Commonwealth departments and agencies shall cooperate with and
23 provide assistance to the board, which may at its discretion
24 provide financial reimbursement.
25 (g) Dissolution.--The authority may be dissolved by law,
26 provided that the authority has no bonds or other debts or
27 obligations outstanding or that provision has been made for the
28 payment or retirement of all such bonds, debts and obligations.
29 Upon any dissolution of the authority, all property, funds and
30 assets of the authority shall be vested in the Commonwealth.
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1 (h) Credit and taxing power of the Commonwealth.--The
2 authority shall have no power at any time to pledge the credit
3 or taxing power of the Commonwealth or any of its municipalities
4 or political subdivisions nor shall any of its obligations be
5 deemed to be obligations of the Commonwealth or any of its
6 political subdivisions.
7 Section 5. Revenues of authority.
8 (a) Sources of revenues.--The authority may receive money
9 from sources of revenue, including, but not limited to, the
10 following:
11 (1) State funds appropriated to the authority.
12 (2) Federal funds appropriated to or granted to the
13 authority.
14 (3) Venture capital from private companies.
15 (4) Proceeds from the sale of bonds of the authority
16 authorized under section 7.
17 (5) Proceeds from the sale of authority assets.
18 (6) Repayment of loan principal.
19 (7) Payment of interest on loans made by the authority.
20 (8) Interest earned on the investment of authority
21 moneys.
22 (9) Proceeds from licensing fees, royalties or any other
23 intellectual property source.
24 (b) Control of revenues; investment of funds.--The board
25 shall have exclusive control and management of all moneys of the
26 authority and full power to invest moneys not required for
27 immediate use in any securities or other investments in which
28 funds of the Commonwealth are authorized to be invested and in
29 any other type of security or investment if, prior to the
30 acquisition of the securities or investments, the board
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1 determines by resolution that the type of security or investment
2 is in the best interests of the authority and the State
3 Treasurer approves of the type of security or other investment.
4 (c) Fiduciary status of board.--
5 (1) The members of the board, employees of the board and
6 agents thereof shall stand in a fiduciary relationship
7 regarding the investments and disbursements of any of the
8 moneys of the fund and shall not profit either directly or
9 indirectly with respect thereto. The board may, when possible
10 and consistent with its fiduciary duties imposed by this
11 subsection or other law, including its obligation to invest
12 and manage the fund, consider whether an investment in any
13 project or business enhances and promotes the general welfare
14 of this Commonwealth and its citizens, including, but not
15 limited to, investments that increase and enhance the
16 employment of Commonwealth residents and stimulate further
17 investment and economic activity in this Commonwealth.
18 (2) In determining whether an investment meets the
19 standard of prudence, the board may consider, together with
20 the expected return on and the risk characteristics of the
21 particular investment, the actual and expected future returns
22 and the risk characteristics of the total venture capital
23 investments held by the board at the time and the degree to
24 which the proposed new investment would promote further
25 diversification within the venture capital asset class.
26 (3) The board in its prudent discretion may make any
27 investments which meet the standard of prudence set forth in
28 paragraph (1) by becoming:
29 (i) a limited partner in partnerships that will hold
30 or make the investments or by acquiring stocks or shares
20010H1719B2134 - 8 -
1 or units of participation or otherwise participating
2 beneficially in the fund of any corporation or trust
3 organized or created and existing under the laws of the
4 United States or of this Commonwealth, if the liability
5 of the fund shall be limited to the amount of its
6 investment;
7 (ii) by supporting clinical trials of any drug or
8 pharmaceutical in exchange for a financial interest in
9 that drug or pharmaceutical or the company developing
10 that drug or pharmaceutical; or
11 (iii) by supporting research at a research center
12 that the board believes has a reasonable expectation of
13 resulting in a product or service which can or will be
14 transferred to a biomedical company, in exchange for
15 future financial consideration.
16 (d) Legislative declaration concerning certain authorized
17 investments.--The General Assembly finds and declares that
18 authorized investments of the fund made by or on behalf of the
19 board under this section whereby the board becomes a joint owner
20 or stockholder in any company, corporation or association are
21 outside the scope of the original intent of and therefore do not
22 violate the prohibition set forth in section 8 of Article VIII
23 of the Constitution of Pennsylvania.
24 (e) Limitations on investments.--Notwithstanding any other
25 provision of this act to the contrary, the board shall invest
26 the moneys in the fund exclusively to provide grants and loans
27 to or take an equity interest in biomedical business ventures,
28 including supporting research and product development and
29 transfer at research centers and supporting clinical trials,
30 within this Commonwealth. The board may make these investments
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1 directly or through an approved financial manager.
2 (f) General fund and other separate funds or accounts.--
3 (1) The board shall establish a general fund from which
4 it may authorize expenditures for any of the purposes of this
5 act.
6 (2) The board shall establish and administer a
7 Biomedical Research Revolving Fund and may establish such
8 other separate revolving funds and accounts when determined
9 by the board to be necessary or convenient. The board may
10 deposit no more than $725,000,000 in funds and accounts
11 established under this paragraph from the sources specified
12 in subsection (a)(4) and (5). This limitation shall not apply
13 to any Federal funds.
14 (3) The board may also establish such nonrevolving funds
15 and accounts as it deems necessary or convenient. Any funds
16 from sources specified in subsection (a)(4) and (5) which are
17 not deposited in the board's revolving funds and accounts
18 shall be deposited into these nonrevolving funds and
19 accounts.
20 (g) Loan repayment.--Subject to any agreement with the
21 holders of bonds, repayments of loan principal, together with
22 any interest thereon, shall be deposited with the authority.
23 Repayments from loans made from revolving funds and accounts may
24 be deposited in such funds and accounts as the board shall
25 determine. Repayments from other loans shall be deposited in
26 nonrevolving funds and accounts for the purpose of repayment of
27 general obligation bonds of the Commonwealth issued under the
28 authority of this act. The board shall maintain such separate
29 funds and accounts as may be necessary for the deposit of
30 payments made under authority or requirement of Federal or State
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1 law.
2 Section 6. Powers and duties of authority.
3 The authority shall have and may exercise all powers
4 necessary or appropriate to carry out and effectuate the
5 purposes of this act, including, but not limited to, the
6 following:
7 (1) Conduct examinations and investigations and take
8 testimony, under oath or affirmation, on any matter necessary
9 to the determination and approval of project applications.
10 (2) Sue and be sued, implead and be impleaded, complain
11 and defend in all courts.
12 (3) Adopt, use and alter at will a corporate seal.
13 (4) (i) Make bylaws for the management and regulation
14 of its affairs and make and, from time to time, adopt,
15 amend and repeal rules and regulations governing the
16 administrative procedures and business of the authority.
17 (ii) Notwithstanding subparagraph (i) and in order
18 to facilitate the speedy implementation of the Biomedical
19 Research Program, the board shall have the power and
20 authority to promulgate, adopt and use guidelines that
21 shall be published in the Pennsylvania Bulletin. The
22 guidelines shall be subject to review pursuant to section
23 204(b) of the act of October 15, 1980 (P.L.950, No.164),
24 known as the Commonwealth Attorneys Act, and shall not be
25 subject to review pursuant to the act of June 25, 1982
26 (P.L.633, No.181), known as the Regulatory Review Act,
27 and shall be effective for a period not to exceed two
28 years from the effective date of this act.
29 (iii) After expiration of the two-year period, all
30 guidelines relating to the Biomedical Research Program
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1 shall expire and shall be replaced by regulations which
2 shall have been promulgated, adopted and published as
3 provided by law.
4 (5) Make contracts of every name and nature and execute
5 all instruments necessary or convenient for the carrying on
6 of its business.
7 (6) Accept grants from and enter into contracts or other
8 transactions with any Federal, State or local agency.
9 (7) Provide financial assistance, including, but not
10 limited to, grants, loans, loan guarantees, bond guarantees
11 and grants for projects fulfilling the purposes of this act.
12 (8) Collect fees and charges and revenue from licensing
13 fees, royalties and other intellectual property sources
14 relating to projects funded under this act, as the board
15 determines to be reasonable, relating to activities
16 undertaken in furtherance of the purposes of this act.
17 (9) Borrow money and issue bonds and provide for the
18 right of holders thereof in accordance with the provisions of
19 this act.
20 (10) Pledge, hypothecate or otherwise encumber all or
21 any of the revenues or receipts of the authority as security
22 for all or any of the bonds of the authority.
23 (11) Receive appropriations and apply for and accept
24 grants, gifts, donations, bequests and settlements from any
25 public or private source.
26 (12) Acquire, own, hold, construct, improve,
27 rehabilitate, renovate, operate, maintain, sell, assign,
28 exchange, lease, mortgage or otherwise dispose of real and
29 personal property or any interest therein in the exercise of
30 its powers and the performance of its duties under this act.
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1 (13) Procure insurance against any loss in connection
2 with its property and other assets and operations in any
3 amounts and from any insurers as it deems desirable.
4 (14) Contract for the services of attorneys, accountants
5 and financial experts and any other advisors, consultants and
6 agents as may be necessary in its judgment, subject to the
7 requirement that the chairman shall ensure that minority-
8 owned or minority-controlled firms shall have an opportunity
9 to participate to a significant degree in the provision of
10 any contractual services purchased by the authority.
11 (15) Subject to any agreement with holders of its bonds,
12 notes or other obligations, purchase bonds, notes and other
13 obligations of the authority.
14 (16) Subject to any agreement with holders of its bonds,
15 notes or other obligations, obtain as security for payment of
16 all or any part of the principal of and interest and premium
17 on the bonds, notes and other obligations of the authority,
18 lines of credit and letters of credit in any amounts and upon
19 any terms as the authority may determine, and pay any fees
20 and expenses required in connection therewith.
21 (17) Do any act necessary or convenient to the exercise
22 of the powers enumerated in this section or reasonably
23 implied therefrom.
24 (18) Prepare plans and reports and provide for public
25 participation as deemed appropriate.
26 (19) Fund prefeasibility studies from any of its sources
27 of revenue.
28 (20) Establish an equity interest in any company that
29 receives assistance from the fund in a measure determined on
30 a valuation of the amount of the assistance and to acquire
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1 and sell security interests at public or private sale; to
2 negotiate modifications or alterations to security interests;
3 to foreclose on security interest in default or commence any
4 action to protect or enforce any right conferred upon it by
5 any law, security agreement, contract or other agreement; to
6 bid for and purchase property which was the subject of such
7 security interest at any foreclosure or at any other sale; to
8 acquire or take possession of any such property; and to
9 exercise any and all rights as provided by law for the
10 benefit or protection of the authority or security interest
11 holders.
12 (21) To make and execute contracts and to pay the
13 reasonable value of services rendered to the authority
14 pursuant to those contracts.
15 Section 7. Specific power to issue bonds.
16 (a) Principal amounts.--The authority may issue its bonds,
17 notes or other obligations in principal amounts as in the
18 judgment of the authority shall be necessary, but not to exceed
19 a total sum of $100,000,000, to provide sufficient funds for any
20 of its corporate purposes. Corporate purposes shall be deemed to
21 include:
22 (1) The payment, funding or refunding of the principal
23 of or interest or redemption premiums on any bonds issued by
24 it, whether the bonds to be funded or refunded have or have
25 not become due.
26 (2) The establishment or increase of reserves to secure
27 or to pay the bonds or interest thereon.
28 (3) All other costs or expenses of the authority
29 incident to and necessary to carry out its corporate purposes
30 and powers.
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1 (b) Negotiable instrument designation.--Whether or not the
2 bonds are of a form and character as to be negotiable
3 instruments under the terms of 13 Pa.C.S. (relating to
4 commercial code), the bonds are made negotiable instruments
5 within the meaning of and for the purposes of 13 Pa.C.S.,
6 subject only to the provisions of the bonds for registration.
7 (c) Resolution; terms of bonds.--Bonds shall be authorized
8 by resolution of the board, may be issued in one or more series
9 and shall bear any date or dates, mature at any time or times
10 not later than 35 years from the date of issuance thereof, bear
11 interest at any rate or rates or at variable rates, be in any
12 denomination or denominations, be in any form, either coupon or
13 registered, carry any conversion or registration privileges,
14 have any rank or priority, be executed in any manner, be payable
15 from such sources in any medium of payment at any place or
16 places within or without this Commonwealth and be subject to any
17 terms of redemption, purchase or tender by the authority or the
18 holders thereof, with or without premium, as the resolution or
19 resolutions may provide. A resolution of the authority
20 authorizing the issuance of bonds may provide that the bonds be
21 secured by a trust indenture between the authority and a
22 trustee, vesting in the trustee any property, rights, powers and
23 duties in trust consistent with the provisions of this act as
24 the authority may determine. Such resolution may further provide
25 for the acquisition of credit enhancement devices such as bond
26 insurance, letters of credit or any other instruments to carry
27 out the provisions of this section.
28 (d) Public or private sale.--Bonds shall be sold initially
29 at public sale at any price or prices and in any manner as the
30 authority may determine, subject to the requirement that the
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1 chairman shall ensure that minority-owned or minority-controlled
2 firms shall have an opportunity to participate to a significant
3 degree in any bond sale activities. Any portion of any bond
4 issue so offered and not sold or subscribed for may be disposed
5 of by private sale by the authority in such manner and at such
6 prices as the authority shall direct.
7 (e) No prior preconditions on bond issuance.--Bonds may be
8 issued under the provisions of this act without obtaining the
9 consent of any department, division, board, bureau or agency of
10 the Commonwealth and without any other proceeding or the
11 happening of any other conditions or other things than those
12 proceedings, conditions or things which are specifically
13 required by this act.
14 (f) Limitation on obligations.--Bonds issued under the
15 provisions of this act shall not be a debt or liability of the
16 Commonwealth or of any of its political subdivisions other than
17 the authority and shall not create or constitute any
18 indebtedness, liability or obligation of the Commonwealth or of
19 any political subdivision. All bonds shall be payable solely
20 from revenues or funds pledged or available for their payment as
21 authorized in this act, including the proceeds of any issue of
22 bonds. Each bond shall contain on its face a statement to the
23 effect that the authority is obligated to pay the principal
24 thereof or the interest thereon only from its revenues, receipts
25 or funds pledged or available for their payment as authorized in
26 this act, that neither the Commonwealth nor any political
27 subdivisions are obligated to pay the principal or interest and
28 that neither the faith and credit nor the taxing power of the
29 Commonwealth or any political subdivision is pledged to the
30 payment of the principal of or the interest on the bonds.
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1 (g) Nature of obligation and payment.--Each issue of bonds
2 may, if it is determined by the authority, be general
3 obligations of the authority payable out of any revenues,
4 receipts or funds of the authority, or special obligations
5 payable out of particular revenues, receipts or funds, subject
6 only to agreements with the holders of the bonds. Bonds may be
7 secured by one or more of the following:
8 (1) Pledges of revenues and other receipts to be derived
9 from the payment of the interest on and any principal of
10 notes and bonds issued by one or more governmental units and
11 purchased by the authority, and any other payment made to the
12 authority pursuant to agreements with any governmental unit
13 or a pledge or assignment of any notes and bonds of any
14 governmental units, and the rights and interests of the
15 authority therein.
16 (2) Pledges of loan payments, rentals, other revenues to
17 be derived from loan agreements, leases or other contractual
18 arrangements with any person or entity, public or private, or
19 a pledged or assignment of any such loan agreements, leases
20 or other contractual arrangements, and the rights and
21 interests of the authority therein.
22 (3) Pledges of grants, subsidies, contributions,
23 appropriations or other payments to be received from the
24 Federal Government or any instrumentality thereof or from the
25 Commonwealth, any Commonwealth agency or other governmental
26 unit.
27 (4) Pledges of all moneys, funds, accounts, securities
28 and other funds, including the proceeds of the bonds.
29 (5) Mortgages and security interests covering all or
30 part of any project or other property of any person or
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1 entity, real or personal, then owned or thereafter to be
2 acquired, or a pledge or assignment of mortgages and security
3 interests made or granted to the authority by any person or
4 entity, and the rights and interests of the authority
5 therein.
6 (h) Exemption from taxation.--All bonds and notes issued
7 under the provisions of this section shall be exempt from
8 taxation for State and local purposes.
9 Section 8. Covenants and express conditions on obligations.
10 In any resolution of the authority authorizing or relating to
11 the issuance of bonds, the authority, in order to secure payment
12 of the bonds, and, in addition to its other powers, may, by
13 provisions in the resolution which shall constitute covenants by
14 the authority and contracts with the holders of the bonds, do
15 the following:
16 (1) Secure the bonds.
17 (2) Make covenants against pledging all or part of its
18 revenues or receipts to other parties.
19 (3) Make covenants limiting its right to sell, pledge or
20 otherwise dispose of notes and bonds of governmental units,
21 loan agreements of public or private persons or entities, or
22 other property of any kind.
23 (4) Make covenants as to additional bonds to be issued,
24 the limitations thereon, the terms and conditions thereof,
25 and the custody, application, investment and disposition of
26 the proceeds thereof.
27 (5) Make covenants as to the incurring of other debts by
28 it.
29 (6) Make covenants as to the payment of principal of or
30 interest on bonds, the sources and methods of the payment,
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1 the rank or priority of bonds with respect to liens or
2 security interests or the acceleration of maturity of bonds.
3 (7) Provide for replacement of lost, stolen, destroyed
4 or mutilated bonds.
5 (8) Make covenants as to the redemption, purchase or
6 tender of bonds by the authority, or the holders thereof, and
7 the privileges of exchanging them for other bonds.
8 (9) Make covenants to create or authorize the creation
9 of special funds or accounts to be held in trust or otherwise
10 for the benefit of holders of bonds, or of reserves for other
11 purposes and as to the use, investment and disposition of
12 moneys held in those funds, accounts or reserves.
13 (10) Provide for the rights, liabilities, powers and
14 duties arising upon the breach of a covenant, condition or
15 obligation and prescribe the events of default and the terms
16 and conditions upon which any or all of the bonds shall
17 become or may be declared due and payable before maturity and
18 the terms and conditions upon which the declaration and its
19 consequences may be waived.
20 (11) Vest in a trustee or trustees within or without
21 this Commonwealth in trust any property, rights, powers and
22 duties as the authority may determine. These may include any
23 or all of the rights, powers and duties of any trustee
24 appointed by the holders of bonds or notes, including rights
25 with respect to the sale or other disposition of notes and
26 bonds of governmental units and other instruments and
27 security pledged pursuant to a resolution or trust indenture
28 for the benefit of the holders of bonds and the right, by
29 suit or action, to foreclose any mortgage pledged pursuant to
30 the resolution or trust indenture for the benefit of the
20010H1719B2134 - 19 -
1 holders of the bonds, notes or other obligations, and to
2 limit the right of the holders of any bonds to appoint a
3 trustee under this act and to limit the rights, powers and
4 duties of the trustee.
5 (12) Pay the costs or expenses incident to the
6 enforcement of the bonds or the provisions of the resolution
7 authorizing the issuance of those bonds, or the trust
8 indenture securing the bonds or any covenant or agreement of
9 the authority with the holders of the bonds, notes or other
10 obligations.
11 (13) Limit the rights of the holders of any bonds to
12 enforce any pledge or covenant securing bonds.
13 (14) Make covenants other than or in addition to the
14 covenants authorized by this act of like or different
15 character and make covenants to do or refrain from doing any
16 acts and things as may be necessary, or convenient and
17 desirable, in order to better secure bonds or which, in the
18 absolute discretion of the authority, will tend to make bonds
19 more marketable, notwithstanding that the covenants, acts or
20 things may not be enumerated in this act.
21 Section 9. Nature and effect of pledges.
22 A pledge of revenues, receipts, moneys, funds or other
23 property or instruments made by the authority shall be valid and
24 binding from the time when the pledge is made. The revenues,
25 receipts, moneys, funds or other property pledged and thereafter
26 received by the authority shall be immediately subject to the
27 lien of the pledge without its physical delivery or further act,
28 and the lien of any pledge shall be valid and binding as against
29 all parties having claims of any kind in tort, contract or
30 otherwise against the authority irrespective of whether the
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1 parties have notice of the lien. Neither the resolution nor any
2 other instrument by which a pledge under this section is created
3 or evidenced need be filed or recorded except in the records of
4 the authority.
5 Section 10. State Employees' Retirement System and Public
6 School Employees' Retirement System.
7 The State Employees' Retirement System and the Public School
8 Employees' Retirement System are authorized to invest funds
9 through the authority, to make investments in conjunction with
10 that authority, to partner with the authority or any financial
11 manager contracting with the authority in making investments in
12 biomedicine. Investments and commitment of funds shall meet the
13 same fiduciary standard applied to investments made by the
14 authority and shall be deemed to meet the applicable fiduciary
15 standard for each retirement system. Investments or commitment
16 of funds shall not apply against any limitation in statute or
17 regulation on the amount or percentage of retirement system
18 funds that can be invested in high-risk ventures.
19 Section 11. Appropriation.
20 A one-time appropriation of $150,000,000 shall be made from
21 the revenue received pursuant to the Master Settlement Agreement
22 and an annual appropriation shall be made of an amount
23 sufficient to carry out the purposes of this act.
24 Section 12. Effective date.
25 This act shall take effect in 60 days.
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