BILL REQ. #:  S-1409.1 

Read first time 02/12/2007.   Referred to Committee on Economic Development, Trade & Management.

     AN ACT Relating to supporting commercialization of life sciences research; and amending RCW 43.350.005, 43.350.010, 43.350.020, 43.350.030, 43.350.040, and 43.350.050.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 43.350.005 and 2005 c 424 s 1 are each amended to read as follows:
     The legislature declares that promoting the health of state residents is a fundamental purpose of state government. The legislature declares it to be a clear public purpose and governmental function to promote life sciences research and development to foster a preventive and predictive vision of the next generation of health-related innovations, to enhance the competitive position of Washington state in this vital sector of the economy, and to improve the quality and delivery of health care for the people of Washington. The legislature finds that public support for and promotion of life sciences research and development will benefit the state and its residents through improved health status and health outcomes, economic development, and contributions to scientific knowledge, and such research and development will lead to breakthroughs and improvements that might not otherwise be discovered due to lack of existing market incentives, especially in the area of regenerative medicine. The legislature finds that public support for and promotion of life sciences research and development has the potential to provide cures or new treatments for many debilitating diseases that cost the state millions of dollars each year. It is appropriate and consistent with the intent of the master settlement agreement between the state and tobacco product manufacturers to invest a portion of the revenues derived therefrom by the state in life sciences research and development, to leverage the revenues with other funds, and to encourage cooperation and innovation among public and private institutions involved in life sciences research and development. The purpose of this chapter is to establish a life sciences discovery fund authority, to grant that authority the power to contract with the state to receive revenues under the master settlement agreement, and to contract with other entities to receive other funds, and to disburse those funds consistent with the purpose of this chapter. The life sciences discovery fund is intended to promote the best available research in life sciences disciplines through diverse Washington institutions, promote commercialization, and ((to)) build upon existing strengths in the area of biosciences and biomanufacturing in order to spread the economic benefits across the state. The life sciences discovery fund is also intended to foster improved health care outcomes and improved agricultural production research across this state and the world. The research and development investments of the life sciences discovery fund are intended to further the goals of the "Bio 21" report and to support future statewide, comprehensive strategies to lead the nation in life sciences-related research, commercial development, and employment.

Sec. 2   RCW 43.350.010 and 2005 c 424 s 2 are each amended to read as follows:
     The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Authority" means the life sciences discovery fund authority created in this chapter.
     (2) "Board" means the governing board of trustees of the authority.
     (3) "Contribution agreement" means any agreement authorized under this chapter in which a private entity or a public entity other than the state agrees to provide to the authority contributions for the purpose of promoting life sciences research and development.
     (4) "Life sciences research and development" means advanced and applied research ((and)), development, and commercialization intended to improve human health, including scientific study of the developing brain and human learning and development, and other areas of scientific research and development vital to the state's economy.
     (5) "Master settlement agreement" means the national master settlement agreement and related documents entered into on November 23, 1998, by the state and the four principal United States tobacco product manufacturers, as amended and supplemented, for the settlement of litigation brought by the state against the tobacco product manufacturers.
     (6) "Public employee" means any person employed by the state of Washington or any agency or political subdivision thereof.
     (7) "Public facilities" means any public institution, public facility, public equipment, or any physical asset owned, leased, or controlled by the state of Washington or any agency or political subdivision thereof.
     (8) "Public funds" means any funds received or controlled by the state of Washington or any agency or political subdivision thereof, including, but not limited to, funds derived from federal, state, or local taxes, gifts or grants from any source, public or private, federal grants or payments, or intergovernmental transfers.
     (9) "State agreement" means the agreement authorized under this chapter in which the state provides to the authority the strategic contribution payments required to be made by tobacco product manufacturers to the state and the state's rights to receive such payments, pursuant to the master settlement agreement, for the purpose of promoting life sciences research and development.
     (10) "Strategic contribution payments" means the payments designated as such under the master settlement agreement, which will be made to the state in the years 2008 through 2017.
     (11) "Commercialization" means a sequence of steps, including technology transfer, technical assistance in product development, production process design, and technical skills development, necessary to achieve market entry and general market competitiveness of new innovative technologies, processes, and products.

Sec. 3   RCW 43.350.020 and 2005 c 424 s 3 are each amended to read as follows:
     (1) The life sciences discovery fund authority is created and constitutes a public instrumentality and agency of the state, separate and distinct from the state, exercising public and essential governmental functions.
     (2) The powers of the authority are vested in and shall be exercised by a board of trustees consisting of: Two members of either the house appropriations committee or the house committee dealing with technology issues, one from each caucus, to be appointed by the speaker of the house of representatives; two members of either the senate committee on ways and means or the senate committee dealing with technology issues, one from each caucus, to be appointed by the president of the senate; and seven members appointed by the governor with the consent of the senate, one of whom shall be appointed by the governor as chair of the authority and who shall serve on the board and as chair of the authority at the pleasure of the governor. At least one member of the board shall be experienced in facilitating the commercialization process. The respective officials shall make the initial appointments no later than thirty days after May 12, 2005. The term of the trustees, other than the chair, is four years from the date of their appointment, except that the terms of three of the initial gubernatorial appointees, as determined by the governor, are for two years from the date of their appointment. A trustee appointed by the governor may be removed by the governor for cause under RCW 43.06.070 and 43.06.080. The appropriate official shall fill any vacancy on the board by appointment for the remainder of the unexpired term. The trustees appointed by the governor shall be compensated in accordance with RCW 43.03.240 and may be reimbursed, solely from the funds of the authority, for expenses incurred in the discharge of their duties under this chapter, subject to RCW 43.03.050 and 43.03.060. The trustees who are legislators shall be reimbursed for travel expenses in accordance with RCW 44.04.120.
     (3) Seven members of the board constitute a quorum.
     (4) The trustees shall elect a treasurer and secretary annually, and other officers as the trustees determine necessary, and may adopt bylaws or rules for their own government.
     (5) Meetings of the board shall be held in accordance with the open public meetings act, chapter 42.30 RCW, and at the call of the chair or when a majority of the trustees so requests. Meetings of the board may be held at any location within or out of the state, and trustees may participate in a meeting of the board by means of a conference telephone or similar communication equipment under RCW 23B.08.200.
     (6) The authority is subject to audit by the state auditor.
     (7) The attorney general must advise the authority and represent it in all legal proceedings.
     The authority shall reserve and expend a minimum of five percent of available funds from the life sciences discovery fund to support commercialization opportunities through organizations with commercialization expertise such as the Spokane intercollegiate research and technology institute, the Washington technology center, and the Washington manufacturing service.

Sec. 4   RCW 43.350.030 and 2005 c 424 s 4 are each amended to read as follows:
     In addition to other powers and duties prescribed in this chapter, the authority is empowered to:
     (1) Use public moneys in the life sciences discovery fund, leveraging those moneys with amounts received from other public and private sources in accordance with contribution agreements, to promote life sciences research and development;
     (2) Solicit and receive gifts, grants, and bequests, and enter into contribution agreements with private entities and public entities other than the state to receive moneys in consideration of the authority's promise to leverage those moneys with amounts received through appropriations from the legislature and contributions from other public entities and private entities, in order to use those moneys to promote life sciences research and development. Nonstate moneys received by the authority for this purpose shall be deposited in the life sciences discovery fund created in RCW 43.350.070;
     (3) Hold funds received by the authority in trust for their use pursuant to this chapter to promote life sciences research and development;
     (4) Manage its funds, obligations, and investments as necessary and as consistent with its purpose including the segregation of revenues into separate funds and accounts;
     (5) Make grants to entities pursuant to contract for the promotion of life sciences research and development to be conducted in the state. Grant agreements shall specify deliverables to be provided by the recipient pursuant to the grant. The authority shall solicit requests for funding and evaluate the requests by reference to factors such as: (a) The quality of the proposed research or the proposed technical assistance in product development or production process design; (b) its potential to improve health outcomes, with particular attention to the likelihood that it will also lower health care costs, substitute for a more costly diagnostic or treatment modality, or offer a breakthrough treatment for a particular disease or condition; (c) its potential for leveraging additional funding; (d) its potential to provide health care benefits or benefit human learning and development; (e) its potential to stimulate ((the)) or promote technical skills training for health care delivery, biomedical manufacturing, and life sciences related employment in the state; (f) the geographic diversity of the grantees within Washington; (g) evidence of potential royalty income and contractual means to recapture such income for purposes of this chapter; and (h) evidence of public and private collaboration;
     (6) Create one or more advisory boards composed of scientists, industrialists, and others familiar with life sciences research and development; and
     (7) Adopt policies and procedures to facilitate the orderly process of grant application, review, and reward.

Sec. 5   RCW 43.350.040 and 2005 c 424 s 5 are each amended to read as follows:
     The authority has all the general powers necessary to carry out its purposes and duties and to exercise its specific powers. In addition to other powers specified in this chapter, the authority may: (1) Sue and be sued in its own name; (2) make and execute agreements, contracts, and other instruments, with any public or private person or entity, in accordance with this chapter; (3) employ, contract with, or engage independent counsel, financial advisors, auditors, other technical or professional assistants, and such other personnel as are necessary or desirable to implement this chapter; (4) establish such special funds, and controls on deposits to and disbursements from them, as it finds convenient for the implementation of this chapter; (5) enter into contracts with public and private entities for life sciences research and development to be conducted in the state; (6) adopt rules, consistent with this chapter; (7) delegate any of its powers and duties if consistent with the purposes of this chapter; (8) exercise any other power reasonably required to implement the purposes of this chapter; and (9) hire staff and pay administrative costs.

Sec. 6   RCW 43.350.050 and 2005 c 424 s 6 are each amended to read as follows:
     Members of the board and persons acting on behalf of the authority, while acting within the scope of their employment or agency, are not subject to personal liability resulting from carrying out the powers and duties conferred on them under this chapter. Neither the state nor the authority is liable for any loss, damage, harm, or other consequence resulting directly or indirectly from grants made by the authority or by any life sciences research and development funded by such grants.