See other bills
under the
same topic
        PRIOR PRINTER'S NOS. 1562, 1913, 1975         PRINTER'S NO. 2015

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1142 Session of 2007


        INTRODUCED BY WAGNER, M. SMITH, DeWEESE, BELFANTI, BENNINGTON,
           CREIGHTON, CURRY, DePASQUALE, FABRIZIO, FRANKEL, FREEMAN,
           GERGELY, GIBBONS, HORNAMAN, KORTZ, KOTIK, KULA, LEACH,
           MAHONEY, MANN, MARKOSEK, McGEEHAN, McILHATTAN, SANTONI,
           SOLOBAY, WALKO, J. WHITE, YOUNGBLOOD, YUDICHAK,
           McILVAINE SMITH, COSTA, PALLONE, EACHUS AND CALTAGIRONE,
           MAY 18, 2007

        AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF
           REPRESENTATIVES, AS AMENDED, JUNE 20, 2007

                                     AN ACT

     1  Amending the act of June 26, 2001 (P.L.755, No.77), entitled "An
     2     act establishing a special fund and account for money
     3     received by the Commonwealth from the Master Settlement
     4     Agreement with tobacco manufacturers; providing for home and
     5     community-based care, for tobacco use prevention and
     6     cessation efforts, for Commonwealth universal research
     7     enhancement, for hospital uncompensated care, for health
     8     investment insurance, for medical assistance for workers with
     9     disabilities, for regional biotechnology research centers,
    10     for the HealthLink Program, for community-based health care
    11     assistance programs, for PACE reinstatement and PACENET
    12     expansion, for medical education loan assistance and for
    13     percentage allocation and appropriation of moneys," further
    14     providing for definitions, for investment of fund and
    15     accounts, for use of Tobacco Settlement Fund, for health
    16     research program, for department responsibilities, for
    17     National Institutes of Health funding formula, for
    18     accountability procedures and for regional biotechnology
    19     research centers; establishing the Jonas Salk Legacy Fund
    20     Program, the Jonas Salk Legacy Fund Board and the Jonas Salk
    21     Legacy Fund; and providing for the sale or assignment of
    22     Commonwealth Universal Research Enhancement Program receipts
    23     and for the issuance of Commonwealth Universal Research
    24     Enhancement Program bond.

    25     The General Assembly of the Commonwealth of Pennsylvania
    26  hereby enacts as follows:

     1     Section 1.  Sections 302, 303, 305 and 306 of the act of June
     2  26, 2001 (P.L.755, No.77), known as the Tobacco Settlement Act,
     3  are amended to read:
     4  Section 302.  Definitions.
     5     The following words and phrases when used in this chapter
     6  shall have the meanings given to them in this section unless the
     7  context clearly indicates otherwise:
     8     "Accounts."  The Health Endowment Account for Long-Term Hope
     9  established in section 303(b) [and], the Health Venture
    10  Investment Account established in section 303(c) and the
    11  Biotechnology Commercialization Account established in section
    12  303(d).
    13     "Bioscience product."  As defined in section 1702.
    14     "Board."  The Tobacco Settlement Investment Board established
    15  in section 304(a).
    16     "Commercialization activity."  Any activity that assists a
    17  for-profit or not-for-profit bioscience institution or
    18  organization in the jurisdiction of a regional biotechnology
    19  research center in the testing, production and licensing or sale
    20  of a bioscience product or leads to the testing, access or
    21  creation of markets for the production, licensing or sale of a
    22  bioscience product. The term includes, but is not limited to,
    23  legal and business consulting services and expenses, assessing
    24  the patentability of bioscience products, obtaining patent
    25  protection for such bioscience products in the United States and
    26  internationally, testing and marketing activities for bioscience
    27  products and negotiating licensing or commercialization
    28  agreements with licensees as well as development of new
    29  technology transfer programs.
    30     "Department."  The Department of Community and Economic
    20070H1142B2015                  - 2 -     

     1  Development of the Commonwealth.
     2  Section 303.  Establishment of special fund and [account]
     3  accounts.
     4     (a)  Tobacco Settlement Fund.--There is hereby established a
     5  special fund known as the Tobacco Settlement Fund. Except as
     6  provided in subsection (b), all payments received by the
     7  Commonwealth pursuant to the Master Settlement Agreement shall
     8  be deposited by the Treasury Department in the [fund] Tobacco
     9  Settlement Fund.
    10     (b)  Health Account.--There is hereby established within the
    11  [fund] Tobacco Settlement Fund the Health Endowment Account for
    12  Long-Term Hope. [The] Except as provided in the act of April 9,
    13  1929 (P.L.343, No.176), known as The Fiscal Code, the following
    14  amounts shall be deposited by the Treasury Department into the
    15  account:
    16         (1)  The jurisdictional payment received by the
    17     Commonwealth pursuant to the Master Settlement Agreement.
    18         (2)  The strategic contribution payments received by the
    19     Commonwealth pursuant to the Master Settlement Agreement.
    20         (3)  Earnings derived from the investment of the money in
    21     the [fund] Tobacco Settlement Fund after deduction of
    22     investment expenses, including such earnings as may have
    23     accrued prior to the effective date of this chapter.
    24         (4)  Earnings derived from the investment of the money in
    25     the Health Account after deduction of investment expenses and
    26     the approved expenses of the board.
    27         [(5)  Money received as a result of investments from the
    28     Health Venture Investment Account.]
    29     (c)  Health Venture Investment Account.--There is hereby
    30  established within the [fund] Tobacco Settlement Fund the Health
    20070H1142B2015                  - 3 -     

     1  Venture Investment Account. All proceeds received as a result of
     2  investments from the Health Venture Investment Account shall be
     3  deposited into the Health Venture Investment Account.
     4     (d)  Biotechnology Commercialization Account.--There is
     5  hereby established within the Tobacco Settlement Fund the
     6  Biotechnology Commercialization Account. Interest earned on
     7  moneys in the Biotechnology Commercialization Account shall be
     8  credited to the account. Moneys in the account shall only be
     9  used to fund applications submitted and approved under Chapter
    10  17.
    11  Section 305.  Investment of fund and accounts.
    12     (a)  Control and management.--Notwithstanding any other
    13  provision of law, the board shall have exclusive control and
    14  authority to manage, invest and reinvest money in the fund and
    15  the Health Account in accordance with this section, subject,
    16  however, to the exercise of that degree of judgment, skill and
    17  care under the circumstances then prevailing that persons of
    18  prudence, discretion and intelligence, who are familiar with
    19  investment matters, exercise in the management of their own
    20  affairs, not in regard to speculation but in regard to permanent
    21  disposition of the funds, considering the probable income to be
    22  derived from the investments and the probable safety of their
    23  capital. The board may hold, purchase, sell, lend, assign,
    24  transfer or dispose of any securities and investments, including
    25  equity securities, in which money in the fund or the accounts
    26  has been invested and of the proceeds of the investments,
    27  including any directed commissions that have accrued to the
    28  benefit of the fund or the accounts as a consequence of the
    29  investments, and of money belonging to the fund or the accounts
    30  subject to the standard of prudence in this section.
    20070H1142B2015                  - 4 -     

     1     (b)  Fiduciary status of board.--The members of the board and
     2  their professional personnel shall stand in a fiduciary
     3  relationship to the Commonwealth and its citizens regarding the
     4  investments of the money of the fund and the accounts and shall
     5  not profit, either directly or indirectly, with respect thereto.
     6     (c)  Custodian.--The State Treasurer shall be the custodian
     7  of the fund and the accounts. All investment draws from the fund
     8  or the accounts shall be made by the State Treasurer in
     9  accordance with requisitions signed by the secretary of the
    10  board and ratified by resolution of the board.
    11     (d)  Authorized investment vehicles for the fund and the
    12  Health Account.--The board may invest the money in the fund and
    13  the Health Account in investments that meet the standard of
    14  prudence set forth in subsection (a) by acquiring any type of
    15  interest in a business organization existing under the laws of
    16  any jurisdiction. The liability of the fund or the Health
    17  Account shall be limited to the amount of their investment under
    18  this subsection.
    19     (e)  Additional authorized investment vehicles for the Health
    20  Account.--The board in its prudent discretion may invest the
    21  money in the Health Account in venture capital investments,
    22  private placement investments or other alternative investments
    23  of any kind, structure or manner which meet the standard of
    24  prudence set forth in subsection (a). The liability of the
    25  Health Account shall be limited to the amount of its investment
    26  under this subsection.
    27     (f)  Authorized investment vehicles for the Health Venture
    28  Investment Account.--The board may invest the money in the
    29  Health Venture Investment Account in investments which meet the
    30  standard of prudence set forth in subsection (a) by becoming a
    20070H1142B2015                  - 5 -     

     1  limited partner in partnerships that make venture capital
     2  investments by acquiring equity interests or a combination of
     3  debt and equity interests in health care, biotechnology or any
     4  other health-related businesses that are expected to grow
     5  substantially in the future and in which the expected returns on
     6  investment are to come predominantly from increases in value of
     7  the equity interests and are not interests in or secured by real
     8  estate. The board may invest in one or more limited partnerships
     9  or comparable investment entities provided that the investment
    10  guidelines and strategies of each investment entity require, in
    11  the board's prudent discretion, that at least 70% of the
    12  investments will be made in companies located primarily in
    13  Pennsylvania or in companies willing to relocate significant
    14  business operations to Pennsylvania. The liability of the fund
    15  or the Health Venture Investment Account shall be limited to the
    16  amount of its investment under this section.
    17     (g)  Requirements for venture capital investments.--The
    18  [following are the] board, in its prudent discretion, may
    19  establish reasonable requirements to participate in a venture
    20  capital investment program undertaken by the board under
    21  subsection (e) or (f). These requirements may, in the board's
    22  discretion, include the following:
    23         (1)  Each general partner must:
    24             (i)  contribute 2% of the aggregate committee capital
    25         as a general partner; and
    26             (ii)  subordinate 5% of the board's contribution in
    27         terms of the distribution schedule, putting the general
    28         partner in a first loss position with respect to the
    29         board.
    30         (2)  The partnership must provide a preferred return of
    20070H1142B2015                  - 6 -     

     1     no less than 5% to all limited partners.
     2         (3)  The partnership must agree to operate under a
     3     prudent expert standard of care. The board shall adopt
     4     policies regarding cancellation of a contract with a general
     5     partner based on poor performance which may include policies
     6     relating to multiple instances of indemnification or
     7     substantial changes in principals.
     8         (4)  The board must be given a seat on any limited
     9     partner advisory/valuation committee.
    10         (5)  The board must be reimbursed for expenses for
    11     attending limited partner advisory/valuation committee
    12     meetings and partnership annual meetings.
    13         (6)  The partnership must issue to the board audited
    14     financial statements on the basis of Generally Accepted
    15     Accounting Principles.
    16     (h)  Legislative declaration.--The General Assembly finds and
    17  declares that authorized investments of the fund or the accounts
    18  made by or on behalf of the board under this section whereby the
    19  board becomes a joint owner, limited partner or stockholder in a
    20  company, corporation, limited partnership, association or other
    21  lawful business organization are outside the scope of the
    22  original intent of and do not violate the prohibition set forth
    23  in section 8 of Article VIII of the Constitution of
    24  Pennsylvania.
    25  Section 306.  Use of Tobacco Settlement Fund.
    26     (a)  Annual report.--The Governor shall report on the fund in
    27  the annual budget which shall include the amounts appropriated
    28  to each program.
    29     (b)  Appropriations.--
    30         (1)  [The] Except as provided in the act of April 9, 1929
    20070H1142B2015                  - 7 -     

     1     (P.L.343, No.176), known as The Fiscal Code, the General
     2     Assembly hereby appropriates funds in the fund in accordance
     3     with the following percentages based on actual funds received
     4     in each year or upon receipt of the final annual payment:
     5             (i)  Eight percent for deposit into the Health
     6         Account pursuant to this chapter, which shall be
     7         deposited immediately upon receipt.
     8             (ii)  Thirteen percent for home and community-based
     9         services pursuant to Chapter 5. For fiscal year 2001-
    10         2002, up to $13.5 million may be used for expanded
    11         counseling, area agency on aging training and education,
    12         assistive technology and for reducing waiting lists for
    13         services in the Department of Aging.
    14             (iii)  Twelve percent for tobacco use prevention and
    15         cessation programs pursuant to Chapter 7.
    16             (iv)  Eighteen percent for health and related
    17         research pursuant to section 906 and one percent for
    18         health and related research pursuant to section 909.
    19             (v)  Ten percent for the uncompensated care payment
    20         program pursuant to Chapter 11.
    21             (vi)  Thirty percent for health investment insurance
    22         pursuant to Chapter 13 and for the purchase of Medicaid
    23         benefits for workers with disabilities pursuant to
    24         Chapter 15.
    25             (vii)  [Eight] Four percent for the expansion of the
    26         PACENET program pursuant to Chapter 23.
    27             (viii)  Two percent for deposit into the Health
    28         Venture Investment Account pursuant to this chapter.
    29             (ix)  Two percent for deposit into the Biotechnology
    30         Commercialization Account pursuant to this chapter for
    20070H1142B2015                  - 8 -     

     1         commercialization activities.
     2         (2)  In addition, any Federal funds received for any of
     3     these programs is hereby specifically appropriated to those
     4     programs.
     5     (c)  Lapses.--Lapses shall be deposited in the Health Account
     6  except for the following:
     7         (1)  Lapses from moneys provided for the home and
     8     community-based care services shall be reallocated to the
     9     home and community-based care program for use in succeeding
    10     years.
    11         (2)  Lapses from moneys provided for the health
    12     investment insurance program shall be reallocated to the
    13     health investment insurance program for use in succeeding
    14     years.
    15         (3)  Lapses from moneys provided for the health venture
    16     investment program shall be reallocated to the Health Venture
    17     Investment Account for use in succeeding years.
    18         (4)  Lapses from moneys provided for commercialization
    19     activities shall be reallocated to the Biotechnology
    20     Commercialization Account for use in succeeding years.
    21     Section 2.  The definition of "applicant" in section 902 of
    22  the act is amended and the section is amended by adding
    23  definitions to read:
    24  Section 902.  Definitions.
    25     The following words and phrases when used in this chapter
    26  shall have the meanings given to them in this section unless the
    27  context clearly indicates otherwise:
    28     * * *
    29     "Applicant."  Any of the following located in this
    30  Commonwealth:
    20070H1142B2015                  - 9 -     

     1         (1)  A person.
     2         (2)  An institution.
     3         (3)  An entity established under the act of August 24,
     4     1951 (P.L.1304, No.315), known as the Local Health
     5     Administration Law.
     6         (4)  A small business.
     7     * * *
     8     "Direct research grant."  A grant to conduct research that is
     9  awarded by the National Institutes of Health, excluding all
    10  contracts, cooperative agreements and those grants that are not
    11  for investigator-initiated research projects ("R01" grants).
    12     * * *
    13     "Small business."  Any for-profit business located in this
    14  Commonwealth employing less than 500 employees.
    15     Section 3.  Sections 903(b), 904(3), 908 and 910 of the act
    16  are amended to read:
    17  Section 903.  Health research program.
    18     * * *
    19     (b)  Advisory committee.--
    20         (1)  There is hereby established in the department the
    21     Health Research Advisory Committee.
    22         (2)  The committee is comprised of the following:
    23             (i)  The secretary or a designee, who shall serve as
    24         chairperson.
    25             (ii)  Four members appointed by the Governor.
    26             (iii)  One member appointed by the President pro
    27         tempore of the Senate and one member appointed by the
    28         Minority Leader of the Senate.
    29             (iv)  One member appointed by the Speaker of the
    30         House of Representatives and one member appointed by the
    20070H1142B2015                 - 10 -     

     1         Minority Leader of the House of Representatives.
     2         (3)  [Members] At least one member appointed by the
     3     Governor must be a small business leader with experience in
     4     commercializing life sciences focused research. Remaining
     5     members appointed to the committee by the Governor must
     6     possess expertise in health care or research, with
     7     representation by institution-based research specialists,
     8     practicing clinicians, clinical investigators and public
     9     health professionals.
    10         (4)  Terms are as follows:
    11             (i)  The secretary shall serve ex officio.
    12             (ii)  A member under paragraph (2)(ii) shall serve a
    13         term of six years.
    14             (iii)  A member under paragraph (2)(iii) shall serve
    15         a term of four years but may be removed at the pleasure
    16         of the appointing authority.
    17             (iv)  A member under paragraph (2)(iv) shall serve a
    18         term of two years but may be removed at the pleasure of
    19         the appointing authority.
    20             (v)  An appointment to fill a vacancy shall be for
    21         the period of the unexpired term or until a successor is
    22         appointed and qualified.
    23         (5)  The committee shall meet as needed, but at least
    24     [twice] once a year, to fulfill the purposes provided for in
    25     this chapter. A majority of the members of the committee
    26     constitutes a quorum. A majority of the members of the
    27     committee has authority to act upon any matter properly
    28     before it. The committee is authorized to establish rules for
    29     its operation and shall hold public hearings, as necessary,
    30     to obtain public input and make recommendations to the
    20070H1142B2015                 - 11 -     

     1     department regarding research priorities, evaluation and
     2     accountability procedures and related issues. Meetings of the
     3     committee shall be conducted under 65 Pa.C.S. Ch. 7 (relating
     4     to open meetings).
     5         (6)  Members shall receive no payment for their services.
     6     Members who are not employees of State government shall be
     7     reimbursed for necessary and reasonable expenses incurred in
     8     the course of their official duties.
     9  Section 904.  Department responsibilities.
    10     The department has the following powers and duties:
    11         * * *
    12         (3)  Except as provided in section 905(f) and (g), review
    13     applications and award research grants to applicants
    14     consistent with the priorities established under paragraph
    15     (2). Research grants may be awarded for a period not to
    16     exceed [four] five years for each project.
    17         * * *
    18  Section 908.  National Institutes of Health funding formula.
    19     (a)  Eligibility.--An institution that conducts research in
    20  this Commonwealth and has received funding from the National
    21  Institutes of Health during each of the three [immediately
    22  preceding] most recent Federal fiscal years for which finalized
    23  data is available from the National Institutes of Health as of
    24  June 30 of the State fiscal year prior to the State fiscal year
    25  in which the grant is awarded shall be eligible to receive a
    26  grant pursuant to section 906(1). For one year from the
    27  effective date of this act, an institution that has immediately
    28  succeeded, by asset acquisition, the research function of
    29  another institution that received National Institutes of Health
    30  funding during any of the four immediately preceding fiscal
    20070H1142B2015                 - 12 -     

     1  years shall be considered eligible to receive a grant pursuant
     2  to section 906(1).
     3     (b)  Fund distribution.--Funds under this section shall be
     4  distributed to eligible institutions as follows:
     5         (1)  Twenty percent shall be distributed to each
     6     institution that receives more than $175,000,000 as an
     7     average amount from the National Institutes of Health during
     8     each of the three [immediately preceding] most recent Federal
     9     fiscal years[.] for which finalized data is available from
    10     the National Institutes of Health as of June 30 of the State
    11     fiscal year prior to the State fiscal year in which the grant
    12     is awarded.
    13         (2)  Seventeen percent shall be distributed to each
    14     institution that receives more than $175,000,000 in federally
    15     sponsored research and development obligations in the
    16     [immediately available preceding] most recent Federal fiscal
    17     year [as reported by] for which finalized data is available
    18     from the National Science Foundation and receives more than
    19     [$60,000,000] $50,000,000 in direct research grant funding as
    20     an average amount from the National Institutes of Health
    21     during [the three immediately preceding] each of the three
    22     most recent Federal fiscal years[.] for which finalized data
    23     is available as of June 30 of the State fiscal year prior to
    24     the State fiscal year in which the grant is awarded.
    25         (3)  The remaining funds shall be distributed to eligible
    26     institutions based on the percentage calculated by dividing
    27     an institution's average direct research grant award from the
    28     National Institutes of Health for [the three immediately
    29     preceding] each of the three most recent Federal fiscal years
    30     for which finalized data is available as of June 30 of the
    20070H1142B2015                 - 13 -     

     1     State fiscal year prior to the State fiscal year in which the
     2     grant is awarded by the sum of the average annual direct
     3     research grant funding award from the National Institutes of
     4     Health for all Pennsylvania-based eligible institutions
     5     during the three [immediately available preceding] most
     6     recent Federal fiscal years[.] for which finalized data is
     7     available as of June 30 of the State fiscal year prior to the
     8     State fiscal year in which the grant is awarded.
     9         (4)  An institution is not eligible to receive funds
    10     under more than one paragraph of this subsection.
    11         (5)  No funds shall be given to an institution that
    12     qualifies for a grant of less than $25,000 under this
    13     section. The amount of funding that would have been
    14     distributed to such an institution shall be redistributed
    15     proportionally to institutions that are eligible under
    16     subsection(b)(3).
    17     (c)  Additional requirements.--An institution that receives
    18  $400,000 or more pursuant to this section shall include the
    19  following information with its application under section 907(a):
    20         (1)  A plan for the timely licensure or commercial
    21     development of research results conducted under this section,
    22     including its management of intellectual property.
    23         (2)  Standard forms of agreement developed by the
    24     institution for use in the licensing of research results.
    25         (3)  A plan to establish affiliations, exchanges,
    26     partnerships or other cooperative efforts with postsecondary
    27     educational institutions to provide programs to train
    28     students and health professionals in the biomedical field.
    29         (4)  A description of the training opportunities provided
    30     for researchers employed by the institution relating to the
    20070H1142B2015                 - 14 -     

     1     licensing and commercial development of research.
     2         (5)  Outreach efforts directed toward informing
     3     businesses and business organizations regarding recent
     4     developments in research being conducted by the institutions.
     5         (6)  A plan for collaboration with an applicant, an
     6     institution, a regional biomedical research center under
     7     Chapter 17 or a for-profit corporation or other business
     8     entity to participate in the development of research.
     9  Section 910.  Accountability procedures.
    10     (a)  Requirements.--An applicant that receives a research
    11  grant under this chapter shall be subject to a performance
    12  review by the department upon completion of a research project
    13  or more often as deemed necessary by the department. The
    14  performance review shall be based on an evaluation process
    15  developed by the department in consultation with the advisory
    16  committee. Information shall be submitted by research grant
    17  recipients and shall include, as applicable, the following:
    18         (1)  The progress made in achieving expected research
    19     goals and objectives.
    20         (2)  The extent of clinical activities initiated and
    21     completed, detailing the number of treatment, prevention and
    22     diagnostic studies; the number of hospitals and health care
    23     professionals; the number of subjects relative to targeted
    24     goals; and the extent of penetration of the studies
    25     throughout the region or this Commonwealth.
    26         (3)  The number of peer-reviewed publications and the
    27     number of licenses and patents filed, including commercial
    28     development opportunities.
    29         (4)  Any changes in risk factors, services provided,
    30     incidence of disease, death from disease, stage of disease at
    20070H1142B2015                 - 15 -     

     1     the time of diagnosis or other relevant measures of the
     2     outcome, impact and effectiveness of the research being
     3     conducted.
     4         (5)  Any major discoveries, new drugs and new approaches
     5     for prevention, diagnosis and treatment which are
     6     attributable to the completed research project.
     7         (5.1)  Any technology transfer that has occurred due to
     8     the completed research project. Technology transfer shall
     9     include discoveries or products licensed to nonprofit or for-
    10     profit companies for further development or
    11     commercialization, spin-off companies created, new jobs
    12     created, or new investments received to commercialize the
    13     discovery or product.
    14         (6)  Any other information deemed necessary by the
    15     department.
    16     (b)  Penalty.--Notwithstanding any other provision of this
    17  chapter, an applicant that receives an unfavorable review by the
    18  department under subsection (a) may be subject to a reduction in
    19  or ineligibility for research grant funding under this chapter.
    20     Section 4.  Section 1702 of the act is amended by adding a
    21  definition to read:
    22  Section 1702.  Definitions.
    23     The following words and phrases when used in this chapter
    24  shall have the meanings given to them in this section unless the
    25  context clearly indicates otherwise:
    26     * * *
    27     "Bioscience product."  A therapeutic agent, diagnostic
    28  biomedical device, process or service related to human health
    29  that is developed or marketed by a for-profit or not-for-profit
    30  institution or organization that is in the jurisdiction of a
    20070H1142B2015                 - 16 -     

     1  regional biotechnology research center established under section
     2  1703.
     3     * * *
     4     Section 5.  Section 1703(a) and (j) of the act are amended
     5  and the section is amended by adding a subsection to read:
     6  Section 1703.  Regional biotechnology research centers.
     7     (a)  Establishment of centers.--The department, in
     8  consultation with the Department of Health, shall establish
     9  three regional biotechnology research centers to facilitate
    10  research and commercialization activity through the sharing of
    11  funds and infrastructure.
    12     * * *
    13     (i.1)  Application for commercialization activities.--Each
    14  regional biotechnology research center created under this
    15  section, acting with the approval of its board of directors,
    16  shall annually submit an application to the department
    17  requesting funding from the Biotechnology Commercialization
    18  Account for commercialization activities in its respective
    19  region. The application shall be based on a five-year funding
    20  strategy. The application shall include the proposed amount of
    21  money requested, the types of commercialization activities to be
    22  funded, the process for identifying the commercialization
    23  activities to be funded and the investment vehicle or vehicles
    24  to support the commercialization activities. Regional
    25  biotechnology research earnings on funds received from the
    26  Biotechnology Commercialization Account under this subsection
    27  shall not be subject to the provisions of subsection (g)(3). The
    28  department may request any other information deemed necessary
    29  related to the application by a regional biotechnology research
    30  center. Prior to the conclusion of the fifth year of each five-
    20070H1142B2015                 - 17 -     

     1  year funding strategy, the regional biotechnology research
     2  center shall develop a new five-year funding strategy on which
     3  its next five annual applications will be based.
     4     (j)  Review and report.--
     5         (1)  Each regional biotechnology research center shall be
     6     subject to an annual performance review by the department.
     7     The department may request other materials or information
     8     from a regional biotechnology research center at such other
     9     frequency or interval that the department deems appropriate.
    10         (2)  Each regional biotechnology research center shall,
    11     by November 30, 2002, and annually thereafter, prepare and
    12     submit a report to the department, the Department of Health,
    13     the chair and minority chair of the Appropriations Committee
    14     of the Senate, the chair and minority chair of the
    15     Appropriations Committee of the House of Representatives, the
    16     chair and minority chair of the Community and Economic
    17     Development Committee of the Senate and the chair and
    18     minority chair of the Commerce and Economic Development
    19     Committee of the House of Representatives. This report shall
    20     be in a form and manner developed by the department working
    21     in cooperation with the Department of Health and shall
    22     include the following:
    23             (i)  The current members of the board of directors
    24         for the research center.
    25             (ii)  A description of the research facilities,
    26         including space and equipment.
    27             (iii)  The research center's current policies for the
    28         management and development of intellectual property and
    29         ownership of inventions and products created during the
    30         course of research conducted through the center.
    20070H1142B2015                 - 18 -     

     1             (iv)  The research center's policies on conflicts of
     2         interest and the handling of confidential material.
     3             (v)  A listing of all organizations and for-profit
     4         and nonprofit institutions utilizing the services of the
     5         research center during the prior year.
     6             (vi)  A listing of any licenses or other contractual
     7         obligations in effect or anticipated for the intellectual
     8         property developed at the research center during the
     9         prior year.
    10             (vii)  A listing of any inventions, any patent
    11         applications or patents issued, any products or other
    12         intellectual property developed as a result of research
    13         conducted through the research center during the prior
    14         year.
    15             (viii)  A copy of the annual operating budget for the
    16         year, with a listing of the sources of all funds,
    17         including financial and in-kind services, personnel,
    18         equipment or other material donations and contributions
    19         by all parties involved in the research center; grants
    20         obtained by or through the research center; Federal funds
    21         leveraged and expenditures made, including infrastructure
    22         expenditures; and administrative and staffing costs.
    23             (ix)  Information relating to commercialization
    24         activities including:
    25                 (A)  A list of commercialization activities
    26             supported by a research center in the prior year to
    27             enter or develop markets for inventions, patents
    28             issued, products or other intellectual property.
    29                 (B)  The amount of moneys expended by each for-
    30             profit and not-for-profit institution and
    20070H1142B2015                 - 19 -     

     1             organization in the preceding year on
     2             commercialization activities supported by a research
     3             center and the amount of any return on investment to
     4             the research center from those activities.
     5                 (C)  The amount of moneys each for-profit and
     6             not-for-profit institution and organization projects
     7             to spend on commercialization activities supported by
     8             a research center in the current year and the return
     9             on investment to the research center projected from
    10             that activity.
    11                 (D)  The name of any organization within or
    12             outside this Commonwealth that has committed funding
    13             to a for-profit and not-for-profit institution and
    14             organization in the current year for
    15             commercialization activities supported by a research
    16             center and the type and amount of that funding.
    17                 (E)  A list of potential markets for the
    18             bioscience product supported by a research center and
    19             any and all target populations that could benefit
    20             from the commercialization activity.
    21                 (F)  Any other information deemed necessary by
    22             the department related to commercialization
    23             activities supported by a research center.
    24     Section 6.  The act is amended by adding a chapter to read:
    25                             CHAPTER 29
    26                  BIOSCIENCE RESEARCH DEVELOPMENT
    27  Section 2901.  Definitions.
    28     The following words and phrases when used in this chapter
    29  shall have the meanings given to them in this section unless the
    30  context clearly indicates otherwise:
    20070H1142B2015                 - 20 -     

     1     "Advisory review panel."  A panel of physicians, scientists
     2  and researchers engaged by the Jonas Salk Legacy Fund Board
     3  under section 2903.
     4     "Bioscience industry."  Research and development of
     5  technology, therapies and treatments relative to human health,
     6  medical and life science, including medical devices, chemical
     7  and biological pharmaceuticals and the biological or
     8  technological delivery of such materials.
     9     "Board."  The Jonas Salk Legacy Fund Board established under
    10  section 2903.
    11     "Bonds."  Bonds, notes, instruments, refunding notes and
    12  other evidences of indebtedness or obligations that the
    13  Pennsylvania Economic Development Financing Authority is
    14  authorized to issue pursuant to this chapter.
    15     "CURE."  The Commonwealth Universal Research Enhancement
    16  Program established under section 903.
    17     "CURE participant."  A recipient of funds under section 908
    18  or 909 in the fiscal year immediately preceding the effective
    19  date of this chapter.
    20     "CURE receipts."  Up to one-half of the funds required to be
    21  distributed for health and related research under section
    22  306(b)(1)(iv).
    23     "CURE receipts bonds."  Limited obligation revenue bonds
    24  issued by the Pennsylvania Economic Development Financing
    25  Authority pursuant to section 2906.
    26     "Department."  The Department of Community and Economic
    27  Development of the Commonwealth.
    28     "DOH."  The Department of Health of the Commonwealth.
    29     "Donor-directed funds."  Contributions made to the Jonas Salk
    30  Legacy Fund on which a donor has placed specific use conditions.
    20070H1142B2015                 - 21 -     

     1     "Donor funds."  Contributions made to the Jonas Salk Legacy
     2  Fund on which no specific use conditions have been placed by the
     3  donor.
     4     "Economic Development Financing Law."  The act of August 23,
     5  1967 (P.L.251, No.102), known as the Economic Development
     6  Financing Law.
     7     "Financing authority."  The Pennsylvania Economic Development
     8  Financing Authority established under the act of August 23, 1967
     9  (P.L.251, No.102), known as the Economic Development Financing
    10  Law.
    11     "Fund."  The Jonas Salk Legacy Fund established under section
    12  2904.
    13     "Incubator."  A facility in which small units of space are
    14  leased by new companies in the bioscience industry and in which
    15  management of the facility maintains or provides access to
    16  business development services for use by all companies leasing
    17  space in the facility.
    18     "Infrastructure project."  An activity designed to expand,
    19  remodel, renovate, alter or construct biomedical research
    20  laboratories including biology, biochemistry, cell biology,
    21  microscopy, molecular biology, virology, immunology, physiology,
    22  pathology and clinical research, including any of the following:
    23         (1)  Wet laboratories, including tissue culture
    24     laboratories, anaerobic chambers, fermenters and laboratories
    25     to conduct studies related to biochemistry, molecular
    26     biology, cell biology, pathology, organic chemistry and
    27     physical chemistry.
    28         (2)  Dry laboratories, including the use of computers,
    29     electronics and analytic equipment.
    30         (3)  Special function laboratories, including the use of
    20070H1142B2015                 - 22 -     

     1     electrophysiology, biophysics, electron microscopes, confocal
     2     microscopes, laser equipment, magnetic resonance imaging,
     3     electron spin resonance spectroscopy, X-ray crystallography,
     4     mass spectrometry, flow cytometry and robotic equipment.
     5         (4)  Clinical research centers.
     6         (5)  Incubator facilities to commercialize the
     7     development of biomedical drugs and devices.
     8     "MSA payments."  Payments paid or to be paid to the
     9  Commonwealth under the Master Settlement Agreement.
    10     "Obligee of the financing authority" or "obligee."  Any of
    11  the following:
    12         (1)  A holder or owner of CURE receipts bonds.
    13         (2)  A trustee or other fiduciary for any holder or owner
    14     of CURE receipts bonds.
    15         (3)  A provider of a letter of credit, policy of
    16     municipal bond insurance or other credit enhancement or
    17     liquidity facility or an agreement for interest rate
    18     management for CURE receipts bonds.
    19     "Opt out date."  The date set by the Jonas Salk Legacy Fund
    20  Board for the receipt of notice from CURE participants that they
    21  do not desire to participate in the program established in this
    22  chapter.
    23     "Project."  An infrastructure project or a starter kit
    24  project, as the context may require.
    25     "Program."  The Jonas Salk Legacy Fund Program established
    26  under section 2902.
    27     "Public health research."  Research concerning the protection
    28  and improvement of the health of populations that:
    29         (1)  Builds the evidence base to guide policymaking for
    30     public health practice.
    20070H1142B2015                 - 23 -     

     1         (2)  Seeks to apply research studies to health practice
     2     needs.
     3         (3)  Translates health research in a manner to facilitate
     4     its application to policy, financial and organizational
     5     issues that concern the delivery of health care and social
     6     services.
     7         (4)  Produces new insights and innovative solutions to
     8     community health problems.
     9         (5)  Addresses an important public health need, is
    10     relevant to reducing health disparities and has the potential
    11     for broad impact across more than one subject area.
    12     "Starter kit project."  An activity to renovate, furnish and
    13  equip research facilities, including the acquisition of
    14  equipment and advanced instrumentation, to assist in attracting
    15  highly rated research faculty to the applicant.
    16  Section 2902.  Jonas Salk Legacy Fund Program.
    17     (a)  Establishment.--There is established a program to be
    18  known as the Jonas Salk Legacy Fund Program. The program shall
    19  provide grants to eligible applicants for projects and for the
    20  purposes set forth in section 2904(b). The board shall develop
    21  eligibility criteria for applicants and projects, including
    22  permitted project costs, priorities in the consideration of
    23  applications and guidelines for the implementation of the
    24  program, including the payment of application fees. The board
    25  shall insure the funds are used to support basic and applied
    26  research and economic development focused on improved health.
    27  The department shall submit for publication in the Pennsylvania
    28  Bulletin a notice of the date that the board will begin
    29  accepting grant applications.
    30     (b)  Advisory review panels.--
    20070H1142B2015                 - 24 -     

     1         (1)  An advisory review panel shall be engaged by the
     2     board with respect to each proposal received. Its members
     3     shall be individuals who are nationally recognized
     4     physicians, scientists or researchers from the same or
     5     similar discipline as the project proposal under review and
     6     shall not be Pennsylvania residents. A member of an advisory
     7     review panel shall not have a relationship, employment or
     8     otherwise, with an applicant whose project is under review by
     9     the panel.
    10         (2)  Members of an advisory review panel shall review a
    11     project proposal upon receiving it from the board. The review
    12     shall be conducted in a manner that recognizes scientific and
    13     technical merit and commercialization potential, on the basis
    14     of scientific need, scientific method, research design,
    15     adequacy of facility and qualifications of the research
    16     personnel. The advisory review panel shall provide its review
    17     and recommendations to the board, and the board shall
    18     consider the recommendations when making a funding
    19     determination. The board shall place heavier weight or
    20     emphasis on an advisory review panel's recommendations
    21     regarding a starter kit project than those regarding an
    22     infrastructure project.
    23     (c)  Starter kit project.--
    24         (1)  A CURE participant or its affiliated medical center
    25     located in this Commonwealth may submit an application to the
    26     board requesting a grant for a starter kit project. The
    27     application shall be on a form required by the board and
    28     shall include or demonstrate all of the following:
    29             (i)  The applicant's name and address.
    30             (ii)  The location of the project.
    20070H1142B2015                 - 25 -     

     1             (iii)  A description of the project.
     2             (iv)  A detailed description of proposed expenditures
     3         for the project.
     4             (v)  A detailed description of other sources of
     5         financing for the project, including the match required
     6         under subsection (g).
     7             (vi)  A detailed statement by the applicant of the
     8         reasons why the project will be beneficial to the
     9         bioscience industry.
    10             (vii)  Any other information required by the board.
    11         (2)  Upon determining that an application is complete,
    12     the board shall forward the application to the advisory
    13     review panel engaged by the board for review of the
    14     feasibility of the project. The board shall also review the
    15     application and shall consider the advisory review panel's
    16     recommendations as required by subsection (b). Upon being
    17     satisfied that all requirements for awarding a grant to the
    18     applicant have been met, the board may approve the
    19     application and, if approved, the board shall award the grant
    20     and shall notify the applicant of such approval.
    21     (d)  Infrastructure projects.--
    22         (1)  A CURE participant or its affiliated medical center
    23     located in this Commonwealth may submit an application to the
    24     board requesting a grant for an infrastructure project. The
    25     application shall be on a form required by the board and
    26     shall include or demonstrate all of the following:
    27             (i)  The applicant's name and address.
    28             (ii)  The location of the project.
    29             (iii)  A description of the project.
    30             (iv)  A detailed description of proposed expenditures
    20070H1142B2015                 - 26 -     

     1         for the project.
     2             (v)  A detailed description of other sources of
     3         financing for the project, including the match required
     4         by subsection (g).
     5             (vi)  A detailed statement by the applicant of the
     6         reasons why the project will be beneficial to the
     7         bioscience industry.
     8             (vii)  Any other information required by the board.
     9         (2)  Upon determining that an application is complete,
    10     the board shall forward the application to the advisory
    11     review panel engaged by the board for review of the
    12     feasibility of the project. The board shall also review the
    13     application and shall consider the advisory review panel's
    14     recommendations as required under subsection (b). Upon being
    15     satisfied that all requirements for awarding a grant to the
    16     applicant have been met, the board may approve the
    17     application, and, if approved, the board shall award the
    18     grant and shall notify the applicant of such approval.
    19     (e)  Donor funds.--Donor funds shall be transferred by the
    20  department to the DOH for use in funding the types of grants
    21  authorized under section 906(2) and (3) or for other public
    22  health research programs.
    23     (f)  Donor-directed funds.--Donor-directed funds shall be
    24  used, to the extent allowed by the direction, to enhance
    25  existing Commonwealth programs, including the program
    26  established under this chapter. Donor-directed funds that are
    27  required to be used for public health programs shall be
    28  transferred to the DOH to be used as directed.
    29     (g)  Limitations.--
    30         (1)  A grant awarded for an infrastructure project or a
    20070H1142B2015                 - 27 -     

     1     starter kit project shall not exceed 50% of the estimated
     2     cost of the project as approved by the board. The balance of
     3     the cost of the project shall be funded by the applicant from
     4     other non-State public and private sources. Moneys derived
     5     from non-State public and private sources that are used to
     6     recruit or retain faculty by an eligible applicant may be
     7     counted toward the match required by this paragraph.
     8         (2)  Subject to section 2903(l), interest earned on money
     9     in the fund shall be transferred by the department to the DOH
    10     to award grants for the public health research programs in
    11     accordance with guidelines established by the DOH and
    12     submitted annually for publication in the Pennsylvania
    13     Bulletin.
    14         (3)  Except as provided in subsection (h), CURE
    15     participants are not eligible to receive grants under the
    16     program, and recipients of grants under the program are not
    17     eligible for funding under CURE.
    18     (h)  Special provisions relating to CURE and CURE
    19  participants.--
    20         (1)  A CURE participant shall be enrolled in the program
    21     unless the CURE participant provides written notice to the
    22     board by the opt out date that it does not desire to
    23     participate in the program. If a CURE participant enrolled in
    24     the program desires to apply for a grant under this chapter,
    25     it shall apply and be approved as provided in this chapter.
    26     CURE participants enrolled in the program shall also continue
    27     to be eligible to receive funding under CURE through June 30,
    28     2012, at the same level provided in section 908 or 909, as
    29     applicable, as if none of the CURE receipts had been sold or
    30     assigned under section 2905. The board shall have the
    20070H1142B2015                 - 28 -     

     1     authority to use moneys in the fund to supplement moneys
     2     available under section 908 or 909 for CURE in order to
     3     continue to provide funding at this level through June 30,
     4     2012. A CURE participant may use National Institutes of
     5     Health funds as a match against moneys in the fund used to
     6     supplement moneys available under this act for CURE in order
     7     to continue to provide funding at this level through June 30,
     8     2012. This commitment shall not apply to any reduction in
     9     funding under CURE that occurs for reasons unrelated to the
    10     sale or assignment of CURE receipts authorized under section
    11     2905. After June 30, 2012, CURE participants enrolled in the
    12     program shall continue to be eligible to receive funding
    13     under CURE at the level then available under section 908 or
    14     909.
    15         (2)  CURE participants that opt out of the program
    16     pursuant to paragraph (1) shall continue to be eligible to
    17     receive funding under CURE at the same level provided in
    18     section 908 or 909, as applicable, as if none of the CURE
    19     receipts had been sold or assigned pursuant to section 2905.
    20     This commitment shall not apply to any reduction in funding
    21     under CURE that occurs for reasons unrelated to the sale or
    22     assignment of CURE receipts under section 2905.
    23         (3)  Notwithstanding any provision of law to the
    24     contrary, the DOH is authorized to reduce the amount of a
    25     grant to be awarded under CURE to a CURE participant who is
    26     enrolled in the program to the extent of the amount of any
    27     moneys in the fund used by the board under paragraph (1) to
    28     supplement moneys available under CURE for such grant. In
    29     such event, the grant agreement entered into by the DOH and
    30     the CURE participant will govern the use of that portion of
    20070H1142B2015                 - 29 -     

     1     the grant being funded by MSA payments through sections 908
     2     and 909 and administered by the DOH. A separate grant
     3     agreement shall be entered into by the board and the CURE
     4     participant to govern the use of that portion of the grant
     5     being funded by the board pursuant to paragraph (1).
     6         (4)  Notwithstanding any provision of law to the
     7     contrary, the DOH is authorized to reduce the amount
     8     available for distribution under section 906(2) and (3) to an
     9     aggregate of the greater of 28.5% of all funds available to
    10     the DOH under section 906 following the sale or assignment of
    11     CURE receipts under section 2905 or $10,000,000, provided
    12     however, that the $10,000,000 minimum amount shall be subject
    13     to reduction in the event the amount of funds available to
    14     the DOH under section 906 is reduced for reasons unrelated to
    15     the sale or assignment of CURE receipts as authorized under
    16     section 2905.
    17         (5)  Notwithstanding any provision of law to the
    18     contrary, moneys received by the DOH for CURE in a fiscal
    19     year may be retained by the DOH for up to an additional
    20     fiscal year in order to complete the award process for a
    21     particular recipient or recipients for the fiscal year in
    22     which the moneys were received. The DOH may not reassign the
    23     moneys to other recipients.
    24     (i)  Evaluation criteria relating to diversification.--In
    25  reviewing applications for grants under the program, the board
    26  shall evaluate the use and development of disadvantaged
    27  businesses as defined in 62 Pa.C.S. § 2102 (relating to
    28  definitions). In reviewing applications for grants under the
    29  program, the board shall give priority consideration to projects
    30  in the Keystone Innovation Zones. The board shall develop
    20070H1142B2015                 - 30 -     

     1  criteria that evaluates the applicant's commitment and plan to
     2  provide fair and representative opportunities for disadvantaged
     3  businesses in its projects and in contracts relating to its
     4  projects as well as the applicant's commitment and plan to
     5  employ in the project a diverse professional and scientific work
     6  force, including minorities and women. In those cases where the
     7  board has cause to believe that an applicant receiving a grant
     8  under this chapter has failed to comply with the provisions of
     9  the applicant's plan, the applicant shall be subject to
    10  sanctions. The sanctions may include:
    11         (1)  Declaring the applicant ineligible to receive future
    12     grants.
    13         (2)  Suspending the applicant from receiving grants for a
    14     set period of time.
    15         (3)  Requiring repayment of a portion of the grant
    16     awarded to the applicant.
    17     (j)  Reports.--An applicant receiving a grant under this
    18  chapter shall report annually to the board on the progress of
    19  the project or as often as the board deems necessary.
    20  Section 2903.  Jonas Salk Legacy Fund Board.
    21     (a)  Establishment.--There is hereby established in the
    22  department the Jonas Salk Legacy Fund Board. The board shall
    23  consist of the following members:
    24         (1)  The Secretary of Community and Economic Development
    25     or his designee, who shall be chair of the board.
    26         (2)  The Secretary of Health or his designee, who shall
    27     be secretary of the board.
    28         (3)  One individual TWO INDIVIDUALS appointed by each of   <--
    29     the following: the President pro tempore of the Senate, the
    30     Minority Leader of the Senate, the Majority Leader of the
    20070H1142B2015                 - 31 -     

     1     House of Representatives and the Minority Leader of the House
     2     of Representatives, all of whom shall have professionally
     3     relevant experience and none of whom may be members of the
     4     General Assembly or staff of members of the General Assembly.
     5     AT LEAST ONE OF EACH OF THE INDIVIDUALS APPOINTED BY EACH      <--
     6     MEMBER OF THE LEGISLATURE DESIGNATED UNDER THIS PARAGRAPH
     7     SHALL BE FROM THE BIOTECHNOLOGY OR BIOMEDICAL COMMUNITY.
     8         (4)  Seven individuals appointed by the Governor, one of   <--
     9     whom shall be a real estate development professional, four of
    10     whom shall be from the biotechnology or biomedical community,
    11     one of whom (4)  ONE INDIVIDUAL APPOINTED BY THE GOVERNOR,     <--
    12     WHO shall be a commercialization professional and one of whom
    13     shall be a member of the Jonas Salk family or a Jonas Salk
    14     family-designated representative, in either case with respect  <--
    15     to the latter member, chosen from a list of at least three
    16     people provided by the Jonas Salk family to the Governor.
    17         (5)  TWO INDIVIDUALS APPOINTED BY THE GOVERNOR, ONE OF     <--
    18     WHOM SHALL BE A REAL ESTATE DEVELOPMENT PROFESSIONAL AND ONE
    19     OF WHOM SHALL BE A COMMERCIALIZATION PROFESSIONAL.
    20         (5) (6)  Four individuals appointed by the Governor, all   <--
    21     of whom shall be representatives of an academic medical
    22     center, a college or a university located in this
    23     Commonwealth. These members shall be nonvoting.
    24     (b)  Compensation.--Members of the board shall serve without
    25  compensation but shall be reimbursed for actual and reasonable
    26  expenses incurred in the performance of their official duties.
    27     (c)  Organization.--The members shall select from among
    28  themselves such officers in addition to a chairperson and
    29  secretary as they shall determine.
    30     (d)  Terms.--Members shall serve a term of two years from the
    20070H1142B2015                 - 32 -     

     1  date of their appointment and until their respective successors
     2  are duly appointed and qualified. Members shall be eligible for
     3  reappointment.
     4     (e)  Meetings.--The board shall meet at the call of the
     5  chairperson.
     6     (f)  Qualified majority vote.--The consent of a qualified      <--
     7  majority vote consisting of at least one gubernatorial appointee
     8  and the four legislative appointees THE CONSENT OF THE VOTE OF    <--
     9  EIGHT VOTING MEMBERS shall be necessary for the board to take
    10  action.
    11     (g)  Fiduciary relationship.--The members of the board shall
    12  stand in a fiduciary relationship with the Commonwealth as to
    13  the moneys in the fund and investments of the board.
    14     (h)  Liability.--Members of the board shall not be liable
    15  personally on any obligations of the financing authority,
    16  including the bonds of the financing authority.
    17     (i)  Conflict of interest.--The board shall establish
    18  conflict of interest policies and procedures to which members
    19  shall adhere.
    20     (j)  Initial appointment and vacancy.--Appointing authorities
    21  shall appoint initial members to the board within 30 days of the
    22  effective date of this chapter. Whenever a vacancy occurs on the
    23  board, the appointing authority shall appoint a successor member
    24  within 30 days of the vacancy.
    25     (k)  Records and meetings.--The board shall keep a record of
    26  its proceedings which shall be open to inspection by the public.
    27  Meetings of the board shall be conducted under 65 Pa.C.S. Ch. 7
    28  (relating to open meetings).
    29     (l)  Staff and legal representation.--The department shall
    30  provide administrative staff to the board and shall provide the
    20070H1142B2015                 - 33 -     

     1  board with legal representation. The board shall reimburse, from
     2  interest earned on moneys in the fund, the department for the
     3  cost of providing these services to the board.
     4     (m)  Powers.--The board shall have the power and may do any
     5  appropriate act necessary or convenient to carry out and
     6  effectuate the purposes of this chapter. The board shall also
     7  have the following powers and authority:
     8         (1)  To enter into contracts with investment advisors,
     9     fund managers and other consultants and advisors as the board
    10     deems necessary to efficiently and competently carry out the
    11     provisions of this chapter.
    12         (2)  To solicit and accept funds from all sources.
    13         (3)  To form independent advisory boards and panels.
    14         (4)  To manage, invest and reinvest money in the fund
    15     subject to the exercise of that degree of judgment, skill and
    16     care under the circumstances then prevailing that persons of
    17     prudence, discretion and intelligence who are familiar with
    18     investment matters exercise in the management of their own
    19     affairs, not in regard to speculation but in regard to
    20     permanent disposition of the funds, considering the probable
    21     income to be derived from the investments and the probable
    22     safety of their capital.
    23         (5)  To hold, purchase, sell, lend, assign, transfer or
    24     dispose of any securities and investments, including equity
    25     securities, in which money in the fund or the accounts has
    26     been invested, the proceeds of the investments, including any
    27     directed commissions that have accrued to the benefit of the
    28     fund as a consequence of the investments, and money belonging
    29     to the fund subject to the standard of prudence in this
    30     section.
    20070H1142B2015                 - 34 -     

     1     (n)  Intent.--It is the intent of the General Assembly that
     2  the board promote and ensure diversity in the awarding of grants
     3  under the programs authorized under this act. The board shall
     4  work to enhance the representation of diverse groups in the
     5  awarding of contracts and grants.
     6         (1)  The board is authorized to investigate investment
     7     advisors, fund managers, other consultants and the awarding
     8     of grants to ascertain whether effective and meaningful
     9     action has been taken or will be taken to enhance the
    10     representation of diverse groups in the awarding of contracts
    11     and grants.
    12         (2)  The board shall work to promote and ensure that it
    13     and all contractors and grant awardees afford equal
    14     employment opportunity to all prospective employees to be
    15     employed and to all actual employees employed by the board,
    16     contractors and grantees.
    17         (3)  The board shall prepare an annual report to the
    18     General Assembly on the activities undertaken by the board,
    19     its contractors and awards to grantees to promote diversity
    20     and accord equal employment opportunities in accordance with
    21     this subsection.
    22  Section 2904.  Jonas Salk Legacy Fund.
    23     (a)  Establishment.--A special fund is hereby established
    24  within the State Treasury to be known as the Jonas Salk Legacy
    25  Fund. The following shall be deposited into the fund:
    26         (1)  Proceeds of the sale or assignment of the CURE
    27     receipts to the financing authority received by the
    28     Commonwealth.
    29         (2)  Federal funds.
    30         (3)  Private funds, including funds from foundations,
    20070H1142B2015                 - 35 -     

     1     donor funds and donor-directed funds, contributed to the
     2     fund.
     3         (4)  Moneys contributed to the fund by Commonwealth
     4     agencies.
     5         (5)  Any other moneys appropriated by the General
     6     Assembly to the fund.
     7         (6)  Interest earned on moneys in the fund.
     8     (b)  Use of funds.--Moneys in the fund shall be used for the
     9  grants to be awarded under the program, for the purposes set
    10  forth in this chapter to pay reasonable fees to investment
    11  advisors or fund managers engaged by the board pursuant to
    12  section 2903 and to pay the expenses of the board in the
    13  administration of the program. Moneys in the fund are hereby
    14  appropriated, upon approval of the Governor, for the purposes
    15  set forth in this chapter.
    16  Section 2905.  Sale or assignment of CURE receipts.
    17     (a)  Sale or assignment.--The Commonwealth is authorized,
    18  with the approval of the Governor, to sell absolutely or assign
    19  irrevocably, in whole or in part, to the financing authority the
    20  Commonwealth's right, title and interest in and to the MSA
    21  payments to the extent of the amount of the CURE receipts.
    22  References in this section to the CURE receipts shall be deemed
    23  to refer to the MSA payments to the extent of the amount of the
    24  CURE receipts. In order to effectuate the sale or assignment,
    25  the Commonwealth shall have the authority to do all of the
    26  following:
    27         (1)  Execute sales or irrevocable assignments of all or a
    28     portion of the Commonwealth's right, title and interest in
    29     and to the MSA payments to the extent of the amount of the
    30     CURE receipts. If sales are utilized, each sale shall be
    20070H1142B2015                 - 36 -     

     1     deemed a true sale of property and shall be evidenced by a
     2     purchase and sale agreement and such other documentation as
     3     the financing authority deems necessary or desirable.
     4         (2)  Effectuate the sale or assignment without regard to
     5     existing laws governing other property sales or financial
     6     transactions by the Commonwealth.
     7         (3)  Enter into covenants with the financing authority
     8     regarding the use of proceeds of the sale or assignment so as
     9     to protect continuing tax exemption on the financing
    10     authority's tax-exempt bonds, if applicable.
    11         (4)  Exercise such powers in accordance with such terms
    12     and conditions and documentation as the financing authority
    13     deems necessary or desirable.
    14     (b)  Deposit of proceeds.--Proceeds received by the
    15  Commonwealth from the sale or assignment of CURE receipts shall
    16  be deposited into the fund.
    17     (c)  Payments to financing authority.--Notwithstanding any
    18  provision of law to the contrary, if the Commonwealth sells or
    19  assigns, in whole or in part, to the financing authority the
    20  Commonwealth's right, title and interest in and to the CURE
    21  receipts, then to the extent of the CURE receipts sold or
    22  assigned, all moneys that otherwise would be required to be paid
    23  to the DOH for CURE under section 306, and all rights to receive
    24  those payments whether now existing or hereafter coming into
    25  existence, shall be paid directly by the State Treasurer to the
    26  financing authority or its trustee immediately upon receipt by
    27  the Commonwealth, deposited into a trust fund established by the
    28  financing authority and pledged to pay the CURE receipts bonds
    29  until all CURE receipts bonds, together with the interest on
    30  those bonds, and all obligations of the financing authority
    20070H1142B2015                 - 37 -     

     1  relating to the CURE receipts bonds are fully paid or provided
     2  for. The authority of the State Treasurer to make payments to
     3  the financing authority as provided in this subsection shall
     4  constitute a continuing appropriation, and funds to be paid
     5  pursuant to this subsection shall not lapse. All CURE receipts
     6  sold or assigned to the financing authority at all times shall
     7  be property of the financing authority and shall not be property
     8  of the Commonwealth.
     9     (d)  Bankruptcy.--The financing authority shall not have the
    10  right to commence a bankruptcy case under 11 U.S.C. Ch. 9
    11  (relating to adjustment of debts of a municipality) so long as
    12  any CURE bonds are outstanding.
    13  Section 2906.  CURE receipt bonds.
    14     (a)  Authorization.--The financing authority may issue CURE
    15  receipts bonds in the manner provided in this chapter and in the
    16  Economic Development Financing Law for the issuance of financing
    17  authority indebtedness. In connection with the issuance of CURE
    18  receipts bonds, and in order to secure the payment of the CURE
    19  receipts bonds, the financing authority, in addition to its
    20  other powers set forth in this chapter, shall have all powers
    21  granted to it in this chapter and under the Economic Development
    22  Financing Law.
    23     (b)  Taxability.--CURE receipts bonds may be taxable or tax-
    24  exempt bonds.
    25     (c)  Use of proceeds.--The proceeds of an issue of CURE
    26  receipts bonds shall be used to pay the purchase price for the
    27  CURE receipts; to fund any required reserves, including debt
    28  service reserves; to capitalize interest; and to pay costs of
    29  issuance, including, but not limited to, costs of obtaining
    30  credit enhancement for the CURE receipts bonds.
    20070H1142B2015                 - 38 -     

     1     (d)  Maturity.--CURE receipts bonds shall mature at such time
     2  or times not exceeding 40 years from their respective dates of
     3  original issue as the financing authority shall by resolution
     4  determine.
     5     (e)  Sale.--CURE receipts bonds may be sold at public sale,
     6  invited sale or private sale for the price or prices the
     7  financing authority determines.
     8     (f)  Negotiable instruments.--CURE receipts bonds shall have
     9  the qualities of negotiable instruments under 13 Pa.C.S.
    10  (relating to commercial code).
    11     (g)  Refunding.--Subject to the provisions of this chapter
    12  and the terms of CURE receipts bonds issued in accordance with
    13  this chapter, the financing authority may refund any outstanding
    14  CURE receipts bonds whether the debt represents principal or
    15  interest, in whole or in part, at any time. For the purposes of
    16  this subsection, the term "refund" and its variations means the
    17  issuance and sale of obligations the proceeds of which are used
    18  or are to be used for the payment or redemption of outstanding
    19  obligations upon or prior to maturity.
    20     (h)  Interest rate management.--With respect to bonds, the
    21  financing authority may negotiate and enter into interest rate
    22  exchange agreements, interest rate cap agreements, collar
    23  agreements, corridor agreements, ceiling agreements, floor
    24  agreements, forward agreements, float agreements and other
    25  similar agreements, which, in the judgment of the financing
    26  authority, will assist the financing authority in managing the
    27  interest costs of the financing authority.
    28     (i)  No debt or liability of Commonwealth.--
    29         (1)  CURE receipts bonds issued under this chapter shall
    30     not be a debt or liability of the Commonwealth or any
    20070H1142B2015                 - 39 -     

     1     political subdivision and shall not create or constitute any
     2     indebtedness, liability or obligation of the Commonwealth or
     3     any political subdivision, legal, moral or otherwise.
     4         (2)  CURE receipts bonds shall be payable solely from the
     5     following:
     6             (i)  The proceeds of CURE receipts bonds.
     7             (ii)  The CURE receipts sold or assigned to the
     8         financing authority.
     9         (3)  All CURE receipts bonds shall contain on their faces
    10     a statement to the effect that:
    11             (i)  The financing authority is obligated to pay the
    12         principal of or the interest on the CURE receipts bonds
    13         only from its revenues, receipts or funds pledged or
    14         available for their payment as authorized in this
    15         chapter.
    16             (ii)  Neither the Commonwealth nor any political
    17         subdivision is obligated to pay the principal or
    18         interest.
    19             (iii)  Neither the faith and credit nor the taxing
    20         power of the Commonwealth or any political subdivision is
    21         pledged to the payment of the principal of or the
    22         interest on the CURE receipts bonds.
    23     (j)  Nonliability.--No financing authority board member,
    24  employee of the financing authority or person executing the CURE
    25  receipts bonds shall be liable personally on any CURE receipts
    26  bonds by reason of their issuance. CURE receipts bonds shall
    27  contain a statement of the limitation set forth in this
    28  subsection.
    29     (k)  CURE receipts bonds deemed valid.--Any CURE receipts
    30  bond reciting in substance that it has been issued by the
    20070H1142B2015                 - 40 -     

     1  financing authority to accomplish the public purposes of this
     2  chapter shall be conclusively deemed in any suit, action or
     3  proceeding involving the validity or enforceability of the CURE
     4  receipts bonds or security for the bonds to have been issued for
     5  such purpose.
     6     (l)  Notice and challenges.--
     7         (1)  The financing authority shall file a copy of any
     8     resolution authorizing the issuance of CURE receipts bonds
     9     adopted by it for public inspection in its office and in the
    10     office of the secretary of the department, and shall publish
    11     in the Pennsylvania Bulletin a notice stating the fact and
    12     date of the adoption, the places where the resolution has
    13     been so filed for public inspection, the date of publication
    14     of the notice and that any action or proceeding of any kind
    15     or nature in any court questioning the validity or proper
    16     authorization of CURE receipts bonds provided for by the
    17     resolution, or the validity of any covenants, agreements or
    18     contract provided for by such resolution, shall be commenced
    19     within ten days after the publication of the notice.
    20         (2)  Upon publication of notice in the Pennsylvania
    21     Bulletin and if no action or proceeding questioning the
    22     validity or proper authorization of CURE receipts bonds or
    23     the validity of any covenants, agreements or contracts
    24     provided for by the resolution shall be commenced within ten
    25     days after the publication of the notice in the Pennsylvania
    26     Bulletin, then all residents, taxpayers and all other persons
    27     forever shall be barred and foreclosed from instituting or
    28     commencing any action or proceeding in any court or pleading
    29     any defense to any action or proceedings, questioning the
    30     validity or proper authorization of such CURE receipts bonds
    20070H1142B2015                 - 41 -     

     1     or the validity of the covenants, agreements or contracts,
     2     and the CURE receipts bonds, covenants, agreements and
     3     contracts shall be conclusively deemed to be valid and
     4     binding obligations in accordance with their terms and tenor.
     5         (3)  After the issuance of CURE receipts bonds, all CURE
     6     receipts bonds shall be conclusively presumed to be fully
     7     authorized and issued by all the laws of this Commonwealth,
     8     and any person shall be estopped from questioning their sale,
     9     execution or delivery by the financing authority.
    10     (m)  Contracts with obligees of financing authority.--Except
    11  as otherwise provided in any resolution of the financing
    12  authority authorizing or awarding CURE receipt bonds, the terms
    13  of the CURE receipts bonds and of this chapter in effect when
    14  the CURE receipts bonds were authorized shall constitute a
    15  contract between the financing authority and obligees of the
    16  financing authority, subject to modification in such manner as
    17  the resolution, the trust indenture securing the CURE receipts
    18  bonds or the CURE receipts bonds shall provide.
    19     (n)  Commonwealth pledge; limitation of powers.--
    20         (1)  The Commonwealth pledges to and agrees with each
    21     obligee of the financing authority that the Commonwealth will
    22     not limit or alter the rights and powers vested in the
    23     financing authority or otherwise created by this chapter in
    24     any manner inconsistent with the obligations of the financing
    25     authority to its obligees until all CURE receipts bonds at
    26     any time issued, together with the interest on the CURE
    27     receipts bonds, are fully paid and discharged.
    28         (2)  If and to the extent that the Commonwealth sells or
    29     assigns CURE receipts pursuant to section 2905, the
    30     Commonwealth pledges to and agrees with each obligee of the
    20070H1142B2015                 - 42 -     

     1     financing authority that the Commonwealth will not abolish or
     2     reduce the financing authority's rights to receive amounts
     3     set forth in section 2905(c), including, but not limited to,
     4     abolishing or reducing the amounts required to be transferred
     5     to the DOH under section 306.
     6     (o)  CURE receipts bonds to be legal investments.--
     7         (1)  CURE receipts bonds issued pursuant to this chapter
     8     are securities in which all of the following may properly and
     9     legally invest funds, including capital, deposits or other
    10     funds in their control or belonging to them:
    11             (i)  Government agencies.
    12             (ii)  Insurance companies.
    13             (iii)  Trust companies.
    14             (iv)  Banking associations, banking corporations and
    15         savings banks.
    16             (v)  Investment companies.
    17             (vi)  Executors, trustees and other fiduciaries.
    18             (vii)  Trustees of any retirement, pension or annuity
    19         fund or system of the Commonwealth.
    20         (2)  CURE receipts bonds issued by the financing
    21     authority are securities that may properly and legally be
    22     deposited with and received by a government agency for any
    23     purpose for which the deposit of bonds or other obligations
    24     of the Commonwealth are authorized by law.
    25     (p)  Additional rights.--An obligee of the financing
    26  authority shall have the right in addition to all other rights
    27  that may be conferred on the obligee, subject only to any
    28  contractual restrictions binding upon the obligee:
    29         (1)  By mandamus, suit, action or proceeding at law or in
    30     equity, to compel the financing authority and the members,
    20070H1142B2015                 - 43 -     

     1     officers, agents or employees of the financing authority to
     2     perform each and every term, provision and covenant contained
     3     in any bond or contract of the financing authority with or
     4     for the benefit of the obligee and to require the carrying
     5     out of any or all covenants and agreements of the financing
     6     authority and the fulfillment of all duties imposed upon the
     7     financing authority by this chapter.
     8         (2)  By proceeding in equity, to obtain an injunction
     9     against any acts or things that may be unlawful or the
    10     violation of any of the rights of the obligee of the
    11     financing authority.
    12         (3)  To require the financing authority to account as if
    13     it were the trustee of an express trust for the obligees of
    14     the financing authority for any pledged revenues received.
    15         (4)  To enforce a pledge of or security interest in
    16     revenues of the financing authority securing payment of the
    17     CURE receipts bonds against all Commonwealth and local public
    18     officials in possession of any revenues at any time, which
    19     revenues may be collected directly from such officials upon
    20     notice by the obligee of the financing authority or a trustee
    21     for application to the payment of the CURE receipts bonds as
    22     and when due for deposits in any sinking, bond or debt
    23     service fund established with the trustee at the times and in
    24     the amounts specified in the CURE receipts bonds or the
    25     resolution or indenture or trust agreement securing the CURE
    26     receipts bonds. Any Commonwealth or local public official in
    27     possession of any revenues shall make payment against receipt
    28     and shall thereby be discharged from any further liability or
    29     responsibility for the revenues. If the payment is to an
    30     obligee of the financing authority, it shall be made against
    20070H1142B2015                 - 44 -     

     1     surrender of the CURE receipts bonds to the payor for
     2     delivery to the financing authority in the case of payment in
     3     full, otherwise, it shall be made against production of the
     4     CURE receipts bonds for notation on the bonds of the amount
     5     of the payment. The provisions of this section with respect
     6     to the enforceability and collection of revenues that secure
     7     CURE receipts bonds of the financing authority shall
     8     supersede any contrary or inconsistent statutory provision or
     9     rule of law.
    10         (5)  This subsection shall be construed and applied to
    11     fulfill the legislative purpose of clarifying and
    12     facilitating the financing of the financing authority by
    13     assuring to the obligees of the financing authority the full
    14     and immediate benefit of the security for the financing
    15     without delay, diminution or interference based on any
    16     statute, decision, ordinance or administrative rule or
    17     practice.
    18     (q)  Validity of pledge.--Any pledge or grant of a lien on or
    19  security interest in CURE receipts made by the financing
    20  authority shall be valid and binding from the time when the
    21  pledge is made. The CURE receipts so pledged and thereafter
    22  received by the financing authority shall immediately be subject
    23  to the lien of any such pledge, lien or security interest
    24  without any physical delivery of the CURE receipts or further
    25  act. The lien of the pledge or security interest shall be valid
    26  and binding as against all parties having claims of any kind in
    27  tort, contract or otherwise against the financing authority
    28  irrespective of whether the parties have notice of any such
    29  pledge. Neither the resolution nor any other instrument of the
    30  financing authority by which a pledge, lien or security interest
    20070H1142B2015                 - 45 -     

     1  is created need be recorded or filed to perfect such pledge or
     2  security interest.
     3     (r)  Security interest in funds and accounts.--Any moneys
     4  deposited in any fund created by the financing authority pledged
     5  to be used to pay debt service on CURE receipts bonds of the
     6  financing authority, including any sinking fund or debt service
     7  reserve fund, and all investments and proceeds of investments
     8  thereof, shall, without further action or filing, be subjected
     9  to a perfected security interest for the obligees of the
    10  financing authority with respect to the CURE receipts bonds
    11  until such moneys or investments shall be disbursed in
    12  accordance with this chapter and subject to the terms of any
    13  trust indenture or other contract between the financing
    14  authority and the obligees of the financing authority with
    15  respect to the CURE receipts bonds.
    16     (s)  Exemption from State and local taxation.--The
    17  effectuation of the purposes of the financing authority is for
    18  the benefit of the people of this Commonwealth, for the increase
    19  of commerce and prosperity and for the improvement of health,
    20  safety, welfare and living conditions. CURE receipts bonds
    21  issued by the financing authority, the transfer and the income
    22  from the CURE receipts bonds, including profit made on their
    23  sale, are free from State and local taxation within this
    24  Commonwealth. This exclusion under this subsection shall not
    25  extend to gift, estate, succession or inheritance taxes or any
    26  other taxes not levied directly on the CURE receipts bonds,
    27  their transfer, the income from the CURE receipts bonds or the
    28  realization of profits on their sale.
    29     (t)  Exemptions from Federal taxation.--
    30         (1)  If the CURE receipts bonds issued by the financing
    20070H1142B2015                 - 46 -     

     1     authority are tax-exempt bonds for which Federal law requires
     2     a private activity volume cap allocation, the department may
     3     issue an allocation upon receipt of a written request by the
     4     financing authority. An allocation must be issued by the
     5     department prior to the approval of the resolution
     6     authorizing the issuance of the bonds by the financing
     7     authority.
     8         (2)  If gubernatorial approval is required by Federal or
     9     State law, the Governor may approve the issuance of the CURE
    10     receipts bonds by the financing authority upon receipt of
    11     written request for approval from the financing authority.
    12     The written request must state all of the following:
    13             (i)  The financing authority has conducted a public
    14         hearing, with appropriate public notice, concerning the
    15         purposes for which the bonds are to be issued.
    16             (ii)  A description of the project or projects that
    17         will benefit from the grants being funded by the bonds.
    18             (iii)  A description of the grant or grants awarded
    19         for the project or projects.
    20             (iv)  A summary of the comments made and questions
    21         posed at the public hearing.
    22     (u)  Rights and remedies of obligees.--The rights and
    23  remedies conferred upon or granted to obligees of the financing
    24  authority pursuant to this chapter shall be in addition to and
    25  not in limitation of rights and remedies lawfully granted to
    26  obligees of the authority by resolution providing for the
    27  issuance of bonds or by any trust agreement or another agreement
    28  under which the CURE receipts bonds may be issued or secured.
    29     Section 7.  This act shall take effect immediately.

    C19L35AJM/20070H1142B2015       - 47 -