Good morning. It is a pleasure to be meeting at the Milton S Hershey Medical Center once again. Last year at this time, the Board of Trustees met at Penn State Harrisburg and yesterday we were back on that campus to celebrate the dedication of the new library on the Harrisburg campus, made possible by the strong support of the Commonwealth for the design and construction. It is the most technologically advanced library in central Pennsylvania and it will be a valuable resource for the students and faculty in the region.

Visiting the Harrisburg and Hershey campuses within the past two days is a reminder of the size and scope of Penn State programs within the state. Since its founding, the University has conferred more than 475,000 degrees. In fact, one in 122 Americans with a college degree is a Penn Stater. In addition, more than 5 million Pennsylvanians participate annually in educational activities provided by Penn State outreach. I am sure that you already know that we currently enroll over 80,000 students at our 24 campus locations, but you may not be aware that Penn State encompasses over 20,000 acres and owns 1,344 buildings. These statistics and other important information about the scope and quality of our programs and facilities are available in the new publication, "Penn State Facts," recently produced by the Department of University Relations. You, too, can amaze your friends and colleagues by having Penn State facts and figures at your fingertips! Copies are available on the back table.

Today, I would like to focus on several topics related to higher education that have been in the national and state-wide news. One of the issues that has been the focus of national media attention is the student protests that have taken place on many campuses over the issue of labor conditions in overseas factories that produce apparel for universities.

I am pleased to say that Penn State has been proactive on this issue. We are ahead of virtually all other universities in this country in our efforts. We were among the first universities to become involved in efforts to monitor conditions in the factories where clothing is produced that carries the Penn State name and we were, with the support of our students, among the original members of the Fair Labor Association. Penn State was involved in developing and supporting the FLA's Code of Conduct and we were among the first universities to publish on the web the locations of factories producing Penn State merchandise. In the past few months, we have made a commitment to the International Youth Foundation and the new Global Alliance for workers and Communities. A team of university faculty and staff with expertise in children, youth, and families has been assembled to consult with the Alliance leadership.

Although Penn State has been a leader in this area, we recognize that further improvements may be possible and we are open to any new developments. We will continue to monitor this important issue.

Another topic that has been discussed at several universities, including ours, is the disclosure of investments. Students at some universities have asked to see lists of investment holdings, typically with the goal of urging institutions to invest in socially responsible companies. A group of Penn State students has met with Dan Sieminski, Assistant Vice President for Finance and Business, and Dave Branigan, Associate Treasurer, to get more information on our investments. I have talked with students about this topic as well. At these meetings, we have clarified our policies and made sure the students understand that no taxpayer or tuition dollars are invested in equity instruments.

After several such meetings and in the spirit of openness about our practices, we have decided to make two pieces of information available. As you know, Penn State's securities are managed by, and at the discretion of, outside professional money managers, who have been charged to make investments based solely on fiduciary concerns. At the beginning of this week, we released the names of the outside professional money managers currently employed to manage our investments. Beginning this summer, we will produce and make available, on an annual basis, a listing of the University's investment holdings, effective each June 30. The list will include the names of all companies and entities in which the University has direct investments, including equity and fixed income securities. This list will be available upon request approximately two weeks after the close of the fiscal year. Of course, this list will provide only a snapshot of the holdings at one point in time because the companies in which our money managers invest change from day to day. We want to be responsive to such requests for information and we felt that this step was important.

Following the tragic fire at Seton Hall, another topic that has been on the minds of many is residence hall safety. At Penn State we are committed to fire safety in all of our facilities. All of our residence hall rooms have smoke detectors. In our student residences, we have fire drills once a month. We have trained our campus police personnel in fire fighting and they are the first response to any campus fire alarm. These officers are trained to extinguish fires before they become more serious. All these efforts are aimed at providing a safe living environment for our students.

The focus of much of the media coverage following the incident at Seton Hall has been on sprinkler systems within residence halls. Penn State currently has approximately 400,000 square feet of new and recently renovated space that incorporates sprinklers. We have plans to spend approximately $200 million over the next ten years to develop new campus housing and to renovate our older housing and dining facilities; all of this space will incorporate sprinklers. I want to assure you that Penn State is committed to safe housing and that we will continue to do everything we can to accelerate the installation of sprinklers in all spaces.

The value of a Penn State education continues to bring us new applications. A record number of students have applied to Penn State, using both traditional paper and electronic applications. As of last week, we had received 66,553 applications for all campuses -- an increase of about 4,900 from last year at this time. Despite the influx of applications, we will continue to hold enrollment at University Park between 40,000 and 42,000. I am pleased to say that, as planned, the increased availability of baccalaureate degree programs on our other campuses is working to level off the flow of upper division students into University Park. More upper-division students are deciding to remain at our other campuses.

Penn State students continue to be involved in a variety of activities. Of course, the student event that has the greatest participation is THON, short for the Interfraternity Council/Panhellenic Dance Marathon. This year, the 28th annual dance marathon raised a record-setting $3,076,983.97 for the Four Diamonds Fund of the Hershey Medical Center. The Four Diamonds Fund supports children with cancer and their families; aiding up to 500 families at one time.

This event is the largest student-run philanthropy in the country. Eighteen thousand students were involved in THON in some way and an estimated 25,000 to 30,000 spectators passed through Rec Hall to watch the event, including a number of families whose children have been helped by the Four Diamonds Fund over the years. During THON 2000, nearly 700 students danced for 48 hours, aided by over 300 students on the operations committee and thousands of others who provided back rubs, food, and moral support to keep the dancers moving. To fully appreciate the magnitude of this event, you have to experience it. But I can tell you that it is impossible not to feel proud of our Penn State students as you watch them give time and energy to this charitable cause.

Penn State graduates continue to focus on serving others after they graduate. Seventy-two former Penn State students are currently working in the Peace Corps in various countries around the world. With this number of volunteers, Penn State ranks fourth on the Peace Corps, annual list of colleges and universities with the largest number of volunteers serving overseas for the organization.

Providing service overseas is not limited to our students, however. Trustee Boyd Wolff is currently in Moldova, a small country between Romania and the Ukraine, helping farmers in five villages form cooperatives so they can pool their milk, transport it to a dairy, and receive a small income. Moldova is a country in which gas, electricity and water are often shut off for entire villages, farmers have only one cow, and people are very poor. Boyd ended a recent email by saying, "We don't know how fortunate we are."

Students are not spending all of their free time in service activities. More and more of them are spending their evenings at the activities that are part of Late Night Penn State, our program in the HUB to provide entertainment in an alcohol-free environment. The program has been a great success. Movies, arts and craft sessions, bands, dance lessons, magicians, and comedians have been popular. This spring, attendance at Late Night Programs has averaged over 2,400 students each weekend, with as many as 4,000-5,000 students at the HUB on our busiest weekends. Just ask Ted Junker or Ed Hintz how they liked the hypnotist at a Late Night event in January.

As you know, technology seems to change almost daily and, at Penn State, we are always trying to be at the forefront of each new advance. The next revolution is digital television, when the Internet and television will converge -- leading to a dynamic new learning environment. The FCC issued a mandate that all television stations must broadcast in digital format and existing analog systems by 2003. By 2006 they must broadcast only in digital format. This means that digital television (DTV) will become a new broadcast standard in the next few years.

This digital medium not only provides us with high quality television, but will also provide multicasting or multi-channel capabilities. Multicasting, the delivery of 3-4 programs at once, will allow viewers to customize viewing, choosing from children's programming, continuing education, news or public affairs. This special capability will allow interactivity of these programs via the Internet turning them into tools to support our instructional and service missions.

I am pleased to report that we are on the front-edge of the evolution in the use of this technology. We have received support from the Corporation for Public Broadcasting to work with our colleagues at the University of Wisconsin and Washington State University in creating the programmatic vision for this new endeavor. Two weeks ago, members of the University, community leaders, and the Penn State Public Broadcasting Board of Representatives, had the opportunity to learn more about this topic during a half-day demonstration presented by our colleagues at the University of Wisconsin.

I attended the demonstration, along with other members of President's Council, and I was impressed by the interactive capabilities of the new technology. The next step will be to figure out how to make it a reality. We hope that funding to support this initiative will come from Federal and State resources and from the regions we serve. The digital medium will introduce new educational opportunities and has tremendous potential for addressing important societal issues.

I am happy to report that our World Campus continues to be a resounding success, recently graduating its first "class." Seventeen students -- professionals pursuing varied careers in scattered locations across the United States -- completed the certificate program in Geographic Information systems. The program consists of four 10-week courses, each offered entirely on-line. Upon successful completion of the program, students earn 16 continuing education units and a certificate from Penn State's top-ranked geography department.

One of the problems related to the incredible increases in the use of computers, the web, and other new technologies is the need to hire and train people with the right skills to work on these projects. There is a shortage of trained people in the information technology field nationally. Companies across the country are struggling to find experienced or trained information technology employees to fill positions as network engineers, programmers, software engineers, Web site developers, and computer technicians. Estimates are that the shortage of technology professionals will be as high as 2.5 million nationally over the next five years.

Although this is good news for our new IST programs, and student demand for them is high, the situation is just as difficult for Penn State as it is for other employers as we try to expand and deliver computer services. In an effort to address this program, the Office of Administrative Systems (OAS) has started an in-house training program for Penn State employees. This "grow your own information technology professional" idea offers our employees new skills and advancement opportunities, while Penn State gets much-needed programmers.

I have focused primarily on ways in which we reach out to people in the state and around the country through innovations in technology, but I would like to tell you about other ways we are reaching out by partnering with businesses around the state. Over the past two years, OSRAM SYLVANIA, a leading North American manufacturer of incandescent lighting, has been using a video-based training program to train new employees that was developed by Penn State DuBois continuing education staff in collaboration with Penn State's Workforce Education and Development faculty and MediaSOLUTIONS staff from Penn State Public Broadcasting. Since using the new training method, worker efficiency and product quality have improved, making the plant more efficient and cost-competitive.

Another successful partnership story comes from the Penn State Erie campus. GE Transportation systems, one of the world's top locomotive builders, has decided to locate its e-commerce business unit at Knowledge Park on the Erie campus. As part of the developing affiliation with Penn State, GE Transportation Systems has donated a 6-ton locomotive cab to the college to serve as a hands-on laboratory for students working on electrical and mechanical engineering products. Painted with Penn State and GE colors and logos, the cab is a symbol of cooperation between the two. Penn State professors and students are already working closely with GE's e-business unit at Knowledge Park to develop remote monitoring and diagnostics systems. Other potential areas of collaboration include class projects, student internships, and faculty involvement in GE Transportation design reviews.

I want to finish my remarks this morning by changing the focus a bit. You all received a copy of the latest report from the Kellogg Commission on the Future of State and Land-Grant Universities, which I chair. In that report, the emphasis is on building a coherent campus culture. We suggest that the greater capacity of today's students to shape and guide their own learning and the increasing demands of the modern world require us to rework our traditional concepts of teaching, research, and service into new visions that emphasize learning, discovery, and engagement. At Penn State, our very best faculty already embody these concepts. I think it is especially important to recognize those who make exceptional contributions in all three areas of learning, discovery, and engagement.

We recently named seventeen faculty members to join the ranks of "Distinguished Professors" at Penn State. The honor was established in 1961 to recognize a select group of professors who have exceptional accomplishments in research, teaching, and service. Let me give you two examples of the impressive accomplishments of these distinguished professors. Since we are in Hershey today, I have chosen to highlight this year's Distinguished Professors from the College of Medicine.

Dr. Harriet Isom, Professor in the Department of Microbiology and Immunology and Pathology is a national and international leader in the study of liver cell growth and differentiation. With over 100 publications and multiple grants from the NIH, her pioneering work to provide models in which hepatocytes could be grown in culture is very widely quoted and used. The liver cell lines that she derived have been used for many important experiments in laboratories all over the world. Recently, Dr. Isom and one of her students demonstrated a new method to achieve the infection of human hepatic cells with hepatitis B virus, a significant finding that has great promise to further combat Hepatitis B virus. She is also considered an excellent teacher, training numerous graduate and medical students and recently becoming the Associate Director of the College of Medicine's MD/Ph.D. program. She has served on many important committees within her department and various national committees within her area of specialization. Dr. Isom is with us today.

The second Distinguished Scholar from the College of Medicine this year is Dr. James Hammond, Professor of Medicine and Chief of the Division of Endocrinology, Diabetes, and Metabolism. Dr. Hammond has developed a national and international reputation in the field of ovarian physiology. He is best known for his study of the role of growth factors in the ovary and of the ovarian insulin-like growth factor (IGF) system in particular. He is recognized as having developed the ovarian IGF hypothesis in pioneering studies in the 1980's and since that time he and his colleagues have developed a comprehensive picture of the importance of the IGF system within the physiology of the ovary. He has had more than 25 years of consistent NIH grant funding and he has published more than 120 papers on the topic. His accomplishments are particularly noteworthy because of his heavy clinical and administrative responsibilities. He maintains an active clinical practice and mentors clinic fellows and junior faculty. Dr. Hammond could not be with us today due to a family emergency.

There are currently 61 individuals who hold the title of Distinguished Professor at Penn State. Everyone has a wonderful story of academic leadership and I wish there were time to tell them all to you.