1.1                          A bill for an act 
  1.2             relating to health; providing for disposition of 
  1.3             tobacco settlement money; creating health professional 
  1.4             education and medical research endowment fund; 
  1.5             appropriating money; proposing coding for new law in 
  1.6             Minnesota Statutes, chapters 16A; and 137. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [16A.86] [TOBACCO SETTLEMENT FUND.] 
  1.9      Subdivision 1.  [ESTABLISHMENT; PURPOSE.] The tobacco 
  1.10  settlement fund is established and dedicated for the purposes of 
  1.11  section 137.44. 
  1.12     Subd. 2.  [DEPOSIT OF MONEY.] The commissioner shall 
  1.13  deposit all settlement payments received after July 1, 1998, as 
  1.14  defined in section IIB of the settlement document filed in State 
  1.15  v. Philip Morris Inc., No. C1-94-8565 (Minnesota District Court, 
  1.16  Second Judicial District), in the tobacco settlement fund.  All 
  1.17  other payments to the state resulting from the specified 
  1.18  litigation shall be deposited in the general fund. 
  1.19     Sec. 2.  [137.44] [HEALTH PROFESSIONAL EDUCATION AND 
  1.20  MEDICAL RESEARCH ENDOWMENT FUND.] 
  1.21     Subdivision 1.  [CONDITION; APPROPRIATION.] If the board of 
  1.22  regents accepts the appropriation under this subdivision, it 
  1.23  shall comply with this section.  $350,000,000 is appropriated 
  1.24  from the tobacco settlement fund to the board of regents for the 
  1.25  health professional education and medical research endowment 
  1.26  fund.  
  2.1      Subd. 2.  [ESTABLISHMENT; PURPOSE; ADMINISTRATION.] The 
  2.2   board of regents shall establish the health professional 
  2.3   education and medical research endowment fund solely to support 
  2.4   health professional education programs at the university 
  2.5   academic health center and medical research at the university.  
  2.6   The board of regents shall administer the fund.  All earnings 
  2.7   including income and appreciation of the endowment fund must be 
  2.8   credited to the fund.  
  2.9      Subd. 3.  [INVESTMENT MANAGEMENT.] (a) The board of regents 
  2.10  shall transfer the endowment fund money to the Minnesota medical 
  2.11  foundation, which shall be responsible for managing the 
  2.12  investment of the endowment fund according to this section. 
  2.13     (b) The Minnesota medical foundation shall manage the 
  2.14  investment of the endowment fund as follows: 
  2.15     (1) all endowment fund assets including income and 
  2.16  appreciation shall be placed in a separate account; 
  2.17     (2) the endowment fund shall be audited annually by an 
  2.18  independent auditor; 
  2.19     (3) the endowment fund shall be invested and managed 
  2.20  according to rules applicable to trust investments as provided 
  2.21  in the Minnesota Prudent Investor Act, sections 501B.151 and 
  2.22  501B.152; 
  2.23     (4) reasonable and necessary administrative and investment 
  2.24  expenses directly associated with the management and investment 
  2.25  of the endowment fund may be recovered from the endowment fund; 
  2.26  and 
  2.27     (5) the Minnesota medical foundation shall transfer assets 
  2.28  from the endowment fund for purposes consistent with this 
  2.29  section as directed by the board of regents, including the 
  2.30  return of the entire balance in the endowment fund on July 1, 
  2.31  2009, to the board of regents. 
  2.32     (c) The board of regents shall in its discretion establish 
  2.33  an annual appropriation from the endowment fund, not to exceed 
  2.34  five percent of the fair market value of all assets held in the 
  2.35  endowment fund as of the first day of the calendar year. 
  2.36     (d) The amount of the annual appropriation determined in 
  3.1   paragraph (c) shall be distributed as directed by the board of 
  3.2   regents for the purposes of the endowment fund according to 
  3.3   subdivision 2. 
  3.4      Subd. 4.  [ADVISORY BOARD.] (a) The board of regents shall 
  3.5   appoint an advisory board to consult with the senior 
  3.6   vice-president for health sciences in making budget 
  3.7   recommendations regarding the annual appropriation from the 
  3.8   endowment fund. 
  3.9      (b) The advisory board shall consist of seven members, one 
  3.10  of which shall be the commissioner of health.  The other members 
  3.11  shall be Minnesota residents, selected in equal number to 
  3.12  represent the interests of health care consumers and providers. 
  3.13     Subd. 5.  [BUDGETING ANNUAL APPROPRIATION.] (a) The board 
  3.14  of regents shall adopt an annual budget for the use of the 
  3.15  annual appropriation from the endowment fund.  In each year, 
  3.16  funds shall be specifically budgeted for the instructional costs 
  3.17  of health professional education programs and for medical 
  3.18  research at the University of Minnesota.  
  3.19     (b) Seventy-five percent of the annual appropriation from 
  3.20  the endowment fund shall be budgeted for the instructional costs 
  3.21  of health professional education programs of the academic health 
  3.22  center. 
  3.23     (c) Twenty-five percent of the annual appropriation from 
  3.24  the endowment fund shall be budgeted for medical research costs 
  3.25  at the university and is available only if matched 
  3.26  dollar-for-dollar by nonstate funds. 
  3.27     Subd. 6.  [ANNUAL REPORT.] (a) The board of regents shall 
  3.28  annually prepare a report detailing how the annual appropriation 
  3.29  is budgeted and the amounts and purposes for which it is 
  3.30  expended. 
  3.31     (b) The board of regents shall include the following in the 
  3.32  biennial budget document submitted to the governor and 
  3.33  legislature: 
  3.34     (1) endowment fund annual reports for the two most recent 
  3.35  fiscal years completed; and 
  3.36     (2) a discussion of forecasted endowment fund income and 
  4.1   planned expenditures for the coming biennium. 
  4.2      Subd. 7.  [SUNSET.] The endowment fund expires July 1, 
  4.3   2009, at which time the board of regents shall return to the 
  4.4   tobacco settlement fund the balance in the endowment fund on 
  4.5   July 1, 2009. 
  4.6      Sec. 3.  [EFFECTIVE DATES.] 
  4.7      Section 1 is effective the day following final enactment.  
  4.8   Section 2 is effective July 1, 1999.