[Senate Report 109-75]
[From the U.S. Government Publishing Office]
Calendar No. 117
109th Congress Report
SENATE
1st Session 109-75
======================================================================
FOUNDATION FOR THE NATIONAL INSTITUTES OF HEALTH IMPROVEMENT ACT
_______
May 26, 2005.--Ordered to be printed
_______
Mr. Enzi, from the Committee on Health, Education, Labor, and Pensions,
submitted the following
R E P O R T
[To accompany S. 302]
The Committee on Health, Education, Labor, and Pensions, to
which was referred the bill (S. 302) to make improvements in
the Foundation for the National Institutes of Health, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and summary of the bill..................................1
II. Background and need for legislation..............................2
III. Legislative history and committee action.........................2
IV. Explanation of bill and committee views..........................2
V. Cost estimate....................................................3
VI. Application of law to the legislative branch.....................4
VII. Regulatory impact statement......................................4
VIII.Section-by-section analysis......................................4
IX. Changes in existing law..........................................4
I. Purpose and Summary of the Bill
The purpose of S. 302, the Foundation for the National
Institutes of Health Improvement Act, is to make technical
corrections and improvements to Section 499 of the Public
Health Service Act (PHSA), which established the Foundation for
the National Institutes of Health (the Foundation). Most
significantly, these corrections clarify membership in the
Foundation's board of directors and assure that the Foundation
receives funds from the National Institutes of Health (NIH) to
support the Foundation's administrative and operating expenses.
II. Background and Need For Legislation
The Foundation is a private, not-for-profit foundation
established by Congress to raise private funds to support the
work of the NIH. Authorized in 1990 and incorporated as a
nonprofit organization in Maryland 9 years ago, the Foundation
in 2003 raised $426 in private funds for every $1 that the
Foundation received from the NIH, and 85 percent of the money
the Foundation spent in 2003 directly supported the programs
and initiatives of the NIH, with 15 percent used for
administration and fundraising. Since its inception, the
Foundation has raised $276.5 million or $66 in private support
for every appropriated dollar received.
The Foundation is currently managing 38 programs that are
supported by $276.5 million generated from private
contributions. In 2003, Bill Gates announced a gift to the
Foundation for NIH of $200 million to establish the Grand
Challenges in Global Health initiative, supporting research on
global health priorities. When the Congress passed the Best
Pharmaceuticals for Children Act in 2001 (P.L. 107-109), it
charged the Foundation with collecting private funds to study
drugs in children. The Foundation's role with the NIH is
expected to continue to grow productively in the coming years.
One current project is the construction of the Edmond J.
Safra Family Lodge on the NIH campus. Families of patients
receiving in-patient treatment at the NIH Clinical Center will
have the Lodge as a place to stay, at no cost to them. The
project is funded completely by private funds donated through
the Foundation, with services and land donated by the NIH. In
addition, the Foundation currently has partnerships with the
NIH that include helping develop new cancer treatments, two
initiatives identifying biomarkers for Osteoarthritis and
Alzheimer's Disease, and others that highlight the great
promise of genomics. Through a public-private partnership, the
Foundation helped accelerate the sequencing of the mouse
genome.
The operating costs for the Foundation climbed from the
$0.944 million in 2002 to $3.09 million in 2005. The Bill &
Melinda Gates Foundation provides an additional $2.25 million
in funding to cover the direct costs associated with the Grand
Challenges initiative; however, the Foundation will also expand
its staffing for media relations and communications functions,
as well as staffing for its public-private partnerships.
III. Legislative History and Committee Action
On February 7, 2005, Senator Kennedy, for himself and
Senator Gregg, Senator Frist, Senator Enzi, and Senator
Bingaman, introduced S. 302, to amend Section 499 of the PHSA
to improve the Foundation for the National Institutes of
Health. On February 9, 2005, the committee held an executive
session to consider S. 302. After accepting a manager's
amendment, the committee approved S. 302 by unanimous voice
vote.
IV. Explanation of Bill and Committee Views
In the past, the Foundation has been provided $500,000
through the NIH appropriation to help defray its operating and
administrative costs. The legislation will correct the current
need for a yearly line appropriation of $500,000 for the
Foundation in the NIH appropriation bill, and will allow the
Foundation to continue its effective support for the work and
the mission of the NIH. The legislation permits the NIH to
support the work of the Foundation beyond the $500,000 baseline
if, in the judgment of the NIH Director, an occasion were to
arise that would warrant it.
In addition, when Congress charged the Foundation with
collecting private funds to study drugs in children in the
BPCA, it added the Commissioner of Food and Drugs as an ex
officio member of the board of the Foundation. This addition
failed to take account of the fact that, under Section
499(d)(I)(D)(ii) of the PHSA, the terms of service of the
original ex officio members of the board (the chair and ranking
minority member of the Subcommittee on Health and the
Environment of the House Energy and Commerce Committee, the
chair and ranking minority member of the Senate Committee on
Labor and Human Resources, and the Director of NIH) terminated
on appointment of the initial board. The legislation maintains
the policy that the terms of service of the congressional
members of the board terminated upon initial appointment of the
board, but clarifies that the NIH Director and the FDA
Commissioner remain as ex officio members of the board.
V. Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 14, 2005.
Hon. Mike B. Enzi,
Chairman, Committee on Health, Education, Labor, and Pensions, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 302, the Foundation
for the National Institutes of Health Improvement Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Christopher
Topoleski.
Sincerely,
Elizabeth M. Robinson,
(For Douglas Holtz-Eakin, Director).
Enclosure.
S. 302--Foundation for the National Institutes of Health Improvement
Act
S. 302 would modify the Public Health Service Act to change
the law that governs the Foundation for the National Institutes
of Health (NIH), a private, not-for-profit entity that raises
private funds to support the work of NIH. It would specify that
the Director of the National Institutes of Health and the
Commissioner of the Food and Drug Administration remain as ex
officio members of the board, make provisions for the continued
operation of the board when vacancies occur, and correct an
incorrect cross-reference in the statute. The bill also would
require that $500,000 out of funds appropriated for NIH be
transferred to the foundation each year. Such annual payments
are authorized under current law but are not required.
CBO estimates that implementing S. 302 would have no
significant budgetary effect in any individual year. Enacting
the bill would not affect receipts or direct spending.
S. 302 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact is Christopher Topoleski. This
estimate was approved by Peter H. Fontaine, Deputy Assistance
Director for Budget Analysis.
VI. Application of Law to the Legislative Branch
S. 302 amends Section 499 of the PHSA to make improvements
to the functioning of the Foundation for the National
Institutes of Health, a non-profit corporation in the State of
Maryland that supports the work of the NIH. As such, it has no
application to the legislative branch.
VII. Regulatory Impact Statement
The committee has determined that there will be de minimus
changes to the regulatory burden due to this bill.
VIII. Section-by-Section Analysis
Sec. 1. Short title
Sec. 2. National Institutes of Health establishment and duties
Paragraph (1)(A) makes a technical amendment to clarify
that the NIH Director and the FDA Commissioner will serve as ex
officio members of the board of the Foundation.
Paragraph (1)(B) clarifies an ambiguous provision of
current law and codifies current policy under which new members
of the Foundation's board are appointed under the bylaws of the
Foundation.
Paragraph (1)(C) makes a conforming amendment.
Paragraph (2)(A) corrects an incorrect cross-reference in
section 499 of the PHSA.
Paragraph (2)(B) requires the Foundation's annual reports
to include an accounting of the use of funds transferred from
the NIH to the Foundation for its operating expenses and that
these reports be provided to the appropriate committees in
Congress.
Paragraph (2)(C) makes a technical correction to clarify
that the NIH may accept transfers of funds from the Foundation.
Paragraph (3) makes a change to require the NIH Director to
transfer no less than $500,000 and no more than $1,250,000 to
the Foundation for operating expenses.
IX. Changes in Existing Law
In compliance with rule XXVI paragraph 12 of the Standing
Rules of the Senate, the following provides a print of the
statute or the part or section thereof to be amended or
replaced (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman):
PUBLIC HEALTH SERVICE ACT
* * * * * * *
PART I--FOUNDATION FOR THE NATIONAL INSTITUTES OF HEALTH
SEC. 499. ESTABLISHMENT AND DUTIES OF FOUNDATION.
(a) In General.--* * *
* * * * * * *
(d) Board of Directors.--
(1) Composition.--
(A) * * *
* * * * * * *
(D)(i) * * *
* * * * * * *
[(ii) Upon the appointment of the members of
the Board under clause (i)(II), the terms of
service of the ex officio members of the Board
as members of the Board shall terminate.]
(ii) Upon the appointment of the appointed
members of the Board under clause (i)(II), the
terms of service as members of the Board of the
ex officio members of the Board described in
clauses (i) and (ii) of subparagraph (B) shall
terminate. The ex officio members of the Board
described in clauses (iii) and (iv) of
subparagraph (B) shall continue to serve as ex
officio members of the Board.
* * * * * * *
(G) The Board may, through amendments to the
bylaws of the Foundation, provide that the
number of appointed members of the Board shall
be greater than the number specified in
subparagraph (C).
* * * * * * *
(3) Terms and vacancies.--
(A) * * *
[(B) Any vacancy in the membership of the
Board shall be filled in the manner in which
the original position was made and shall not
affect the power of the remaining members to
execute the duties of the Board.]
(B) Any vacancy in the membership of the
appointed members of the Board shall be filled
in accordance with the bylaws of the Foundation
established in accordance with paragraph (6),
and shall not affect the power of the remaining
appointed members to execute the duties of the
Board.
* * * * * * *
(5) Meetings and quorum.--A majority of the appointed
members of the Board shall constitute a quorum for
purposes of conducting the business of the Board.
* * * * * * *
(j) General Provisions.--
(1) Foundation integrity.--* * *
(2) Financial conflicts of interest.--Any individual
who is an officer, employee, or member of the Board of
the Foundation may not (in accordance with policies and
requirements developed under subsection
[(d)(2)(B)(i)(II)] (d)(6) personally or substantially
participate in the consideration or determination by
the Foundation of any matter that would directly or
predictably affect any financial interest of the
individual or a relative affect any financial interest
of the individual or a relative (as such term is
defined in section 109(16) of the Ethics in Government
Act of 1978) of the individual, of any business
organization or other entity, or of which the
individual is an officer or employee, or is negotiating
for employment, or in which the individual has any
other financial interest.
* * * * * * *
(4) Reports.--
(A) Not later than 5 months following the end
of each fiscal year, the Foundation shall
publish a report describing the activities of
the Foundation during the preceding fiscal
year. Each such report shall include for the
fiscal year involved a comprehensive statement
of the operations, activities, financial
condition, and accomplishments of the
Foundation, including an accounting of the use
of amounts transferred under subsection (l).
* * * * * * *
[(C) The Foundation shall make copies of each
report submitted under subparagraph (A)
available for public inspection, and shall upon
request provide a copy of the report to any
individual for a charge not exceeding the cost
of providing the copy.]
(C) The Foundation shall make copies of each
report submitted under subparagraph (A)
available--
(i) for public inspection, and shall
upon request provide a copy of the
report to any individual for a charge
that shall not exceed the cost of
providing the copy; and
(i) to the appropriate committees of
Congress.
* * * * * * *
(10) Transfer of funds.--The Foundation may transfer
funds to the National Institutes [of Health.] of Health
and the National Institutes of Health may accept
transfers of funds from the Foundation.
* * * * * * *
[(1) Funding.--
[(1) Authorization of appropriations.--For the
purpose of carrying out this part, there is authorized
to be appropriated an aggregate $500,000 for each
fiscal year.
[(2) Limitation regarding other funds.--Amounts
appropriated under any provision of law other than
paragraph (1) may not be expended to establish or
operate the Foundation.]
(l) Funding.--From amounts appropriated to the National
Institutes of Health, for each fiscal year, the Director of NIH
shall transfer not less than $500,000 and not more than
$1,250,000 to the Foundation.
* * * * * * *