42 U.S.C. § 290b — Establishment and duties of Foundation

**(a) In general** The Secretary shall, acting through the Director of NIH, establish a nonprofit corporation to be known as the Foundation for the National Institutes of Health (hereafter in this section referred to as the “Foundation”). The Foundation shall not be an agency or instrumentality of the United States Government. **(b) Purpose of Foundation** The purpose of the Foundation shall be to support the National Institutes of Health in its mission (including collection of funds for pediatric pharmacologic research), and to advance collaboration with biomedical researchers from universities, industry, and nonprofit organizations. **(c) Certain activities of Foundation** (1) **In general** — In carrying out subsection (b), the Foundation may solicit and accept gifts, grants, and other donations, establish accounts, and invest and expend funds in support of the following activities with respect to the purpose described in such subsection: (A) A program to provide and administer endowed positions that are associated with the research program of the National Institutes of Health. Such endowments may be expended for the compensation of individuals holding the positions, for staff, equipment, quarters, travel, and other expenditures that are appropriate in supporting the endowed positions. (B) A program to provide and administer fellowships and grants to research personnel in order to work and study in association with the National Institutes of Health. Such fellowships and grants may include stipends, travel, health insurance benefits and other appropriate expenses. The recipients of fellowships shall be selected by the donors and the Foundation upon the recommendation of the National Institutes of Health employees in the laboratory where the fellow would serve, and shall be subject to the agreement of the Director of the National Institutes of Health and the Executive Director of the Foundation. (C) A program to collect funds for pediatric pharmacologic research and studies. (D) Supplementary programs to provide for— (i) scientists of other countries to serve in research capacities in the United States in association with the National Institutes of Health or elsewhere, or opportunities for employees of the National Institutes of Health or other public health officials in the United States to serve in such capacities in other countries, or both; (ii) the conduct and support of studies, projects, and research, which may include stipends, travel and other support for personnel in collaboration with national and international non-profit and for-profit organizations; (iii) the conduct and support of forums, meetings, conferences, courses, and training workshops that may include undergraduate, graduate, post-graduate, and post-doctoral accredited courses and the maintenance of accreditation of such courses by the Foundation at the State and national level for college or continuing education credits or for degrees; (iv) programs to support and encourage teachers and students of science at all levels of education and programs for the general public which promote the understanding of science; (v) programs for writing, editing, printing, publishing, and vending of books and other materials; and (vi) the conduct of other activities to carry out and support the purpose described in subsection (b). (E) The Cures Acceleration Network described in [section 287a of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section287a&num=0&edition=prelim). (2) **Fees** — The Foundation may assess fees for the provision of professional, administrative and management services by the Foundation in amounts determined reasonable and appropriate by the Executive Director. (3) **Authority of Foundation** — The Foundation shall be the sole entity responsible for carrying out the activities described in this subsection. **(d) Board of Directors** (1) **Composition** (A) The Foundation shall have a Board of Directors (hereafter referred to in this section as the “Board”), which shall be composed of ex officio and appointed members in accordance with this subsection. All appointed members of the Board shall be voting members. (B) The ex officio members of the Board shall be— (i) the Chairman and ranking minority member of the Subcommittee on Health and the Environment (Committee on Energy and Commerce) or their designees, in the case of the House of Representatives; (ii) the Chairman and ranking minority member of the Committee on Labor and Human Resources or their designees, in the case of the Senate; (iii) the Director of the National Institutes of Health; and (iv) the Commissioner of Food and Drugs. (C) The ex officio members of the Board under subparagraph (B) shall appoint to the Board individuals from among a list of candidates to be provided by the National Academy of Science. Such appointed members shall include— (i) representatives of the general biomedical field; (ii) representatives of experts in pediatric medicine and research; (iii) representatives of the general biobehavioral field, which may include experts in biomedical ethics; and (iv) representatives of the general public, which may include representatives of affected industries. (D) (i) Not later than 30 days after June 10, 1993, the Director of the National Institutes of Health shall convene a meeting of the ex officio members of the Board to— (I) incorporate the Foundation and establish the general policies of the Foundation for carrying out the purposes of subsection (b), including the establishment of the bylaws of the Foundation; and (II) appoint the members of the Board in accordance with subparagraph (C). (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. (E) The agreement of not less than three-fifths of the members of the ex officio members of the Board shall be required for the appointment of each member to the initial Board. (F) No employee of the National Institutes of Health shall be appointed as a member 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). (2) **Chair** (A) The ex officio members of the Board under paragraph (1)(B) shall designate an individual to serve as the initial Chair of the Board. (B) Upon the termination of the term of service of the initial Chair of the Board, the appointed members of the Board shall elect a member of the Board to serve as the Chair of the Board. (3) **Terms and vacancies** (A) The term of office of each member of the Board appointed under paragraph (1)(C) shall be 5 years, except that the terms of offices for the initial appointed members of the Board shall expire as determined by the ex officio members and the Chair. (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. (C) If a member of the Board does not serve the full term applicable under subparagraph (A), the individual appointed to fill the resulting vacancy shall be appointed for the remainder of the term of the predecessor of the individual. (D) A member of the Board may continue to serve after the expiration of the term of the member until a successor is appointed. (4) **Compensation** — Members of the Board may not receive compensation for service on the Board. Such members may be reimbursed for travel, subsistence, and other necessary expenses incurred in carrying out the duties of the Board, as set forth in the bylaws issued by 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. (6) **Certain bylaws** (A) In establishing bylaws under this subsection, the Board shall ensure that the following are provided for: (i) Policies for the selection of the officers, employees, agents, and contractors of the Foundation. (ii) Policies, including ethical standards, for the acceptance, solicitation, and disposition of donations and grants to the Foundation and for the disposition of the assets of the Foundation. Policies with respect to ethical standards shall ensure that officers, employees and agents of the Foundation (including members of the Board) avoid encumbrances that would result in a conflict of interest, including a financial conflict of interest or a divided allegiance. Such policies shall include requirements for the provision of information concerning any ownership or controlling interest in entities related to the activities of the Foundation by such officers, employees and agents and their spouses and relatives. (iii) Policies for the conduct of the general operations of the Foundation. (iv) Policies for writing, editing, printing, publishing, and vending of books and other materials. (B) In establishing bylaws under this subsection, the Board shall ensure that such bylaws (and activities carried out under the bylaws) do not— (i) reflect unfavorably upon the ability of the Foundation or the National Institutes of Health to carry out its responsibilities or official duties in a fair and objective manner; or (ii) compromise, or appear to compromise, the integrity of any governmental agency or program, or any officer or employee involved in such program. **(e) Incorporation** The initial members of the Board shall serve as incorporators and shall take whatever actions necessary to incorporate the Foundation. **(f) Nonprofit status** The Foundation shall be considered to be a corporation under [section 501(c) of title 26](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section501/c&num=0&edition=prelim), and shall be subject to the provisions of such section. **(g) Executive Director** (1) **In general** — The Foundation shall have an Executive Director who shall be appointed by the Board and shall serve at the pleasure of the Board. The Executive Director shall be responsible for the day-to-day operations of the Foundation and shall have such specific duties and responsibilities as the Board shall prescribe. (2) **Compensation** — The rate of compensation of the Executive Director shall be fixed by the Board. **(h) Powers** In carrying out subsection (b), the Foundation may— (1) operate under the direction of its Board; (2) adopt, alter, and use a corporate seal, which shall be judicially noticed; (3) provide for 1 or more officers, employees, and agents, as may be necessary, define their duties, and require surety bonds or make other provisions against losses occasioned by acts of such persons; (4) hire, promote, compensate, and discharge officers and employees of the Foundation, and define the duties of the officers and employees; (5) with the consent of any executive department or independent agency, use the information, services, staff, and facilities of such in carrying out this section; (6) sue and be sued in its corporate name, and complain and defend in courts of competent jurisdiction; (7) modify or consent to the modification of any contract or agreement to which it is a party or in which it has an interest under this part; (8) establish a process for the selection of candidates for positions under subsection (c); (9) enter into contracts with public and private organizations for the writing, editing, printing, and publishing of books and other material; (10) take such action as may be necessary to obtain patents and licenses for devices and procedures developed by the Foundation and its employees; (11) solicit, accept, hold, administer, invest, and spend any gift, devise, or bequest of real or personal property made to the Foundation; (12) enter into such other contracts, leases, cooperative agreements, and other transactions as the Executive Director considers appropriate to conduct the activities of the Foundation; (13) appoint other groups of advisors as may be determined necessary from time to time to carry out the functions of the Foundation; (14) enter into such other contracts, leases, cooperative agreements, and other transactions as the Executive Director considers appropriate to conduct the activities of the Foundation; and (15) exercise other powers as set forth in this section, and such other incidental powers as are necessary to carry out its powers, duties, and functions in accordance with this part. **(i) Administrative control** No participant in the program established under this part shall exercise any administrative control over any Federal employee. **(j) General provisions** (1) **Foundation integrity** — The members of the Board shall be accountable for the integrity of the operations of the Foundation and shall ensure such integrity through the development and enforcement of criteria and procedures relating to standards of conduct, financial disclosure statements, conflict of interest rules, recusal and waiver rules, audits and other matter determined appropriate by the Board. (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)(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 (as such term is defined in [section 13101(16) of title 5](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title5-section13101/16&num=0&edition=prelim)) 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. (3) **Audits; availability of records** — The Foundation shall— (A) provide for annual audits of the financial condition of the Foundation; and (B) make such audits, and all other records, documents, and other papers of the Foundation, available to the Secretary and the Comptroller General of the United States for examination or audit. (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). (B) With respect to the financial condition of the Foundation, each report under subparagraph (A) shall include the source, and a description of, all gifts or grants to the Foundation of real or personal property, and the source and amount of all gifts or grants to the Foundation of money. Each such report shall include a specification of any restrictions on the purposes for which gifts or grants to the Foundation may be used. (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 (ii) to the appropriate committees of Congress. (D) The Board shall annually hold a public meeting to summarize the activities of the Foundation and distribute written reports concerning such activities and the scientific results derived from such activities. (5) **Service of Federal employees** — Federal employees may serve on committees advisory to the Foundation and otherwise cooperate with and assist the Foundation in carrying out its function, so long as the employees do not direct or control Foundation activities. (6) **Relationship with existing entities** — The Foundation may, pursuant to appropriate agreements, merge with, acquire, or use the resources of existing nonprofit private corporations with missions similar to the purposes of the Foundation, such as the Foundation for Advanced Education in the Sciences. (7) **Intellectual property rights** — The Board shall adopt written standards with respect to the ownership of any intellectual property rights derived from the collaborative efforts of the Foundation prior to the commencement of such efforts. (8) **National Institutes of Health Amendments of 1990** — The activities conducted in support of the National Institutes of Health Amendments of 1990 (Public Law 101–613), and the amendments made by such Act, shall not be nullified by the enactment of this section.11 So in original. Probably should be “subsection”. (9) **Limitation of activities** (A) *In general* — The Foundation shall exist solely as an entity to work in collaboration with the research programs of the National Institutes of Health. The Foundation may not undertake activities (such as the operation of independent laboratories or competing for Federal research funds) that are independent of those of the National Institutes of Health research programs. (B) *Gifts, grants, and other donations* (i) *In general* — Gifts, grants, and other donations to the Foundation may be designated for pediatric research and studies on drugs, and funds so designated shall be used solely for grants for research and studies under subsection (c)(1)(C). (ii) *Other gifts* — Other gifts, grants, or donations received by the Foundation and not described in clause (i) may also be used to support such pediatric research and studies. (iii) *Report* — The recipient of a grant for research and studies shall agree to provide the Director of the National Institutes of Health and the Commissioner of Food and Drugs, at the conclusion of the research and studies— (I) a report describing the results of the research and studies; and (II) all data generated in connection with the research and studies. (iv) *Action by the Commissioner of Food and Drugs* — The Commissioner of Food and Drugs shall take appropriate action in response to a report received under clause (iii) in accordance with paragraphs (7) through (12) 22 See References in Text note below. of [section 284m(c) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section284m/c&num=0&edition=prelim), including negotiating with the holders of approved applications for the drugs studied for any labeling changes that the Commissioner determines to be appropriate and requests the holders to make. (C) *Applicability* — Subparagraph (A) does not apply to the program described in subsection (c)(1)(C). (10) **Transfer of funds** — The Foundation may transfer funds to the National Institutes of Health and the National Institutes of Health may accept transfers of funds from the Foundation. Any funds transferred under this paragraph shall be subject to all Federal limitations relating to federally-funded research. **(k) Duties of Director** (1) **Applicability of certain standards to non-Federal employees** — In the case of any individual who is not an employee of the Federal Government and who serves in association with the National Institutes of Health, with respect to financial assistance received from the Foundation, the Foundation may not provide the assistance of, or otherwise permit the work at the National Institutes of Health to begin until a memorandum of understanding between the individual and the Director of the National Institutes of Health, or the designee of such Director, has been executed specifying that the individual shall be subject to such ethical and procedural standards of conduct relating to duties performed at the National Institutes of Health, as the Director of the National Institutes of Health determines is appropriate. (2) **Support services** — The Director of the National Institutes of Health may provide facilities, utilities and support services to the Foundation if it is determined by the Director to be advantageous to the research programs of the National Institutes of Health. **(l) Funding** From amounts appropriated to the National Institutes of Health, for each fiscal year, the Director of NIH shall transfer not less than $1,250,000 and not more than $5,000,000 to the Foundation.