The legislation was passed by both the House and Senate unanimously.
"Everyone understood the necessity of this action. By revising some of the legal barriers and obstacles, ... we have enabled the system to save or earn millions of dollars," said Sen. Andy Dinniman, (D., Chester), minority chair of the Senate education committee.
Dinniman said they had no firm estimates on how much money the changes could bring into the colleges. It all depends how heavily the changes are used by the schools.
"It could have a very significant impact," said Kenn Marshall, a spokesman for the state system. "It really puts us on a level playing field with every other college and university, not just in Pennsylvania but across the country."
Previously, professors were barred from commercializing their research because of a conflict of interest clause, Dinniman explained. Pennsylvania State University and other state-related schools don't have that restriction, he said.
Faculty union heads are cautiously optimistic about the changes. They want to make sure that the focus remains on teaching students and not too heavily on research.
"It's a tricky balancing act," said Lisa Millhous, president of the faculty union at West Chester University and a professor of communications studies.
Ken Mash, vice president of the Association of Pennsylvania State College & University Faculties (APSCUF) - the statewide faculty union - also said he hopes there won't be "a mad rush" to create doctoral programs which could drain resources from other areas of the school.
Mash, a political science professor at East Stroudsburg University, also said that the restrictions on commercialization probably won't affect a lot of professors.
"I don't see that this is going to open up a flood gate of opportunities," he said.
But Millhous and Mash said they welcome the potential for new dollars in an environment of declining or flat state funding. Under the budget just passed, the universities will receive the same funding in 2012-13 as they did in the most recent year. The year before, their funding was cut 18 percent, which prompted Dinniman and other legislators to start looking for alternative revenue sources.
"It creates some really interesting ways to be innovative," Millhous said, crediting lawmakers for seeking input from the faculty union.
"As we go through these tough economic times, this is one instance where we laud the chancellor's office for looking for opportunities to be more efficient," added Mash.
Before the laws were passed, presidents or provosts couldn't lobby for funds for their colleges' foundations because of a conflict of interest clause.
"Now they all can work much more effectively together in raising funds for their institutions," Dinniman said.
Also, Indiana University of Pennsylvania was the only school that could offer doctorates. They will remain the only school with Phd programs, but the others can now add applied doctorates.
West Chester already is prepared to launch one in bio statistics to better serve the area's pharmaceutical industry, Marshall said. Other colleges are looking at applied doctorates in nursing, he said.
Contact Susan Snyder at 215-854-4693 or ssnyder@phillynews.com, or follow on Twitter @ssnyderinq
