HOUSE BILL No. 4226


     February 9, 1999, Introduced by Reps. Martinez, Baird and Scott and referred to the Committee on Tax Policy.


        A bill to amend 1961 PA 101, entitled

   "Supervision of trustees for charitable purposes act,"

   by amending section 3 (MCL 14.253).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 3.  (1)  (a)  This act does not apply to the United

 2    States, any state, territory, or possession of the United States,

 3    the  district  DISTRICT of Columbia, the  commonwealth 

 4    COMMONWEALTH of Puerto Rico, or to any of their agencies or gov-

 5    ernmental subdivisions;  ,  to an officer of a religious organi-

 6    zation who holds property for religious purposes;  ,  or to a

 7    charitable corporation organized and operated primarily as an

 8    educational institution, including amateur theater, band, and

 9    orchestra corporations, OR AS a religious organization.  or

10     hospital.  This exemption does not apply to a governmental

11    subdivision of this state, except state supported colleges or


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 1    universities, as to property held for charitable purposes other

 2    than or more limited or specific than its general public or cor-

 3    porate purposes.  This act  shall  DOES not apply to any non-

 4    profit charitable corporation, EXCEPT FOR A HOSPITAL, organized

 5    under the laws of this state whose operating funds are derived,

 6    in whole or in part, from community funds or united foundation

 7    sources.  but  HOWEVER, this act  shall  DOES apply to  such  a

 8    charitable corporation DESCRIBED IN THIS SUBSECTION as to funds

 9    or properties received by it as trustee of an inter vivos trust

10    of a continuing nature.

11         (2)  (b)  The registration and periodic reporting require-

12    ments of this act  shall  DO not apply to any trust in which the

13    interests of the charitable remainder beneficiaries are remote.

14    For the purpose of this act, the interests of charitable remain-

15    der beneficiaries of a trust  shall be  ARE considered remote if

16    under the maximum exercise of discretion by the trustee in favor

17    of the charitable remainder beneficiaries of  such  THOSE trusts,

18    the value of their interests in the aggregate assets  ,  IS com-

19    puted actuarially at 5% or less of the value of the property

20    subject to the trust,  such  AND THAT determination  shall be  IS

21    made at the time of the creation of an irrevocable trust,  or  at

22    the time a revocable trust becomes irrevocable, or at the death

23    of the testator in case of a testamentary trust.  When  IF a

24    remote charitable interest vests in present possession or enjoy-

25    ment, registration and periodic reports  shall be  ARE required

26    for the first time under this act.





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 1         (3)  (c)  Unless the governing instrument provides

 2    otherwise, a trust, whether testamentary or inter vivos,  shall

 3     not be deemed  IS NOT a charitable trust only for the purposes of

 4    registration, accounting, and notice,  in the case where  IF the

 5    individual or individuals are the sole income beneficiaries of

 6    the trust and a charitable organization or organizations,  ( 

 7    none of which or the selection of which are under the dominion or

 8    control of the grantor, testator, executor, or trustee, or any

 9    members of his OR HER family,  )  are remaindermen, until the

10    remainder interest of at least  one  1 charitable organization

11    vests in  enjoyment  THE CHARITABLE ORGANIZATION.  This

12     provision shall  SUBSECTION DOES not apply in the case of a dis-

13    puted last will and testament.































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