HOUSE BILL No. 4970 June 19, 2001, Introduced by Reps. Shackleton, Bovin, Richardville and Allen and referred to the Committee on Education. A bill to amend 1976 PA 451, entitled "The revised school code," by amending sections 15 and 602 (MCL 380.15 and 380.602), as added by 2000 PA 231. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 15. (1) As part of its powers under section 11a, the 2 school board of a general powers school district may receive, 3 own, and enjoy a gift of real or personal property made by grant, 4 devise, bequest, or in any other manner, that is made for school 5 purposes under this act. A school board may transfer a gift of 6 intangible personal property or the proceeds from that gift to a 7 community foundation OR, SUBJECT TO SUBSECTION (4), TO AN EDUCA- 8 TIONAL FOUNDATION. If a gift received by the school board was 9 subject to a condition, limitation, or requirement, the transfer 10 must be to a fund within the community foundation OR EDUCATIONAL 03542'01 TAV 2 1 FOUNDATION that incorporates a condition, limitation, or 2 requirement that is identical or substantially similar to the 3 condition, limitation, or requirement the gift was subject to. 4 If a gift received by the school board was not subject to any 5 condition, limitation, or requirement, the transfer must be to a 6 fund within the community foundation OR EDUCATIONAL FOUNDATION 7 that imposes conditions, limitations, or requirements on the use 8 of the gift property for 1 or more school purposes under this 9 act. 10 (2) If a school board transfers a gift to a community foun- 11 dation OR EDUCATIONAL FOUNDATION pursuant to this section and if 12 1 or more of the following occur, the community foundation OR 13 EDUCATIONAL FOUNDATION shall return the gift to the school 14 board: 15 (a)TheIF THE TRANSFER IS TO A COMMUNITY FOUNDATION, THE 16 community foundation fails to meet all of the requirements for 17 certification as a community foundation under section 261 of the 18 income tax act of 1967, 1967 PA 281, MCL 206.261. 19 (b) The community foundation OR EDUCATIONAL FOUNDATION is 20 liquidated. 21 (c) The community foundation OR EDUCATIONAL FOUNDATION sub- 22 stantially violates any condition, limitation, or requirement on 23 the gift. 24 (3) Unless waived by the school board transferring the gift, 25 before a school board may transfer a gift to a community founda- 26 tion OR EDUCATIONAL FOUNDATION pursuant to this section, the 27 community foundation OR EDUCATIONAL FOUNDATION shall establish a 03542'01 3 1 donor advisory board for that gift. The donor advisory board 2 shall include at least 1 representative of the school board 3 transferring the gift. The donor advisory board shall do all of 4 the following: 5 (a) Monitor the community foundation's OR EDUCATIONAL 6 FOUNDATION'S compliance with any condition, limitation, or 7 requirement on the use of the gift. 8 (b) Make recommendations to the community foundation OR EDU- 9 CATIONAL FOUNDATION for the use of distributions or other pro- 10 ceeds from the gift. 11 (4) A SCHOOL BOARD MAY TRANSFER A GIFT TO AN EDUCATIONAL 12 FOUNDATION UNDER THIS SECTION ONLY IF THE GIFT IS EITHER TO 13 ESTABLISH OR CONTRIBUTE TO A SCHOLARSHIP FUND AND THE SCHOLARSHIP 14 FUND IS CLEARLY INTENDED TO BENEFIT A STUDENT OR STUDENTS ATTEND- 15 ING THE COMMUNITY COLLEGE OR STATE PUBLIC UNIVERSITY WITH WHICH 16 THE EDUCATIONAL FOUNDATION IS AFFILIATED. 17 (5)(4)A transfer of a gift made in accordance with this 18 section that occurred before the effective date of this section 19 OR BEFORE THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED 20 SUBSECTION (4) is ratified and confirmed and the transfer is con- 21 sidered valid as if it had been made under this section. 22 (6)(5)As used in this section: 23 (a) "Community foundation" means that term as defined in 24 section 261 of the income tax act of 1967, 1967 PA 281, 25 MCL 206.261. 26 (b) "Condition, limitation, or requirement" does not include 27 a material restriction or condition that violates 26 03542'01 4 1 C.F.R. 1.170A-9 or that restricts a community foundation's OR 2 EDUCATIONAL FOUNDATION'S inherent power of modification described 3 in 26 C.F.R. 1.170A-9. 4 (C) "EDUCATIONAL FOUNDATION" MEANS A FOUNDATION ORGANIZED 5 AND OPERATED TO ASSIST THE FUNCTIONS OF A COMMUNITY COLLEGE OR 6 STATE PUBLIC UNIVERSITY. 7 (D)(c)"Gift" does not include state school aid or 8 another grant from state or federal sources. 9 Sec. 602. (1) As part of its powers under section 601a, the 10 intermediate school board of an intermediate school district may 11 receive, own, and enjoy a gift of real or personal property made 12 by grant, devise, bequest, or in any other manner, that is made 13 for intermediate school district purposes under this act. An 14 intermediate school board may transfer a gift of intangible per- 15 sonal property or the proceeds from that gift to a community 16 foundation OR, SUBJECT TO SUBSECTION (4), TO AN EDUCATIONAL 17 FOUNDATION. If a gift received by the intermediate school board 18 was subject to a condition, limitation, or requirement, the 19 transfer must be to a fund within the community foundation OR 20 EDUCATIONAL FOUNDATION that incorporates a condition, limitation, 21 or requirement that is identical or substantially similar to the 22 condition, limitation, or requirement the gift was subject to. 23 If a gift received by the intermediate school board was not 24 subject to any condition, limitation, or requirement, the trans- 25 fer must be to a fund within the community foundation OR EDUCA- 26 TIONAL FOUNDATION that imposes conditions, limitations, or 03542'01 5 1 requirements on the use of the gift property for 1 or more 2 intermediate school district purposes under this act. 3 (2) If an intermediate school board transfers a gift to a 4 community foundation OR EDUCATIONAL FOUNDATION pursuant to this 5 section and if 1 or more of the following occur, the community 6 foundation OR EDUCATIONAL FOUNDATION shall return the gift to the 7 intermediate school board: 8 (a)TheIF THE TRANSFER IS TO A COMMUNITY FOUNDATION, THE 9 community foundation fails to meet all of the requirements for 10 certification as a community foundation under section 261 of the 11 income tax act of 1967, 1967 PA 281, MCL 206.261. 12 (b) The community foundation OR EDUCATIONAL FOUNDATION is 13 liquidated. 14 (c) The community foundation OR EDUCATIONAL FOUNDATION sub- 15 stantially violates any condition, limitation, or requirement on 16 the gift. 17 (3) Unless waived by the intermediate school board transfer- 18 ring the gift, before an intermediate school board may transfer a 19 gift to a community foundation OR EDUCATIONAL FOUNDATION pursuant 20 to this section, the community foundation OR EDUCATIONAL 21 FOUNDATION shall establish a donor advisory board for that gift. 22 The donor advisory board shall include at least 1 representative 23 of the intermediate school board transferring the gift. The 24 donor advisory board shall do all of the following: 25 (a) Monitor the community foundation's OR EDUCATIONAL 26 FOUNDATION'S compliance with any condition, limitation, or 27 requirement on the use of the gift. 03542'01 6 1 (b) Make recommendations to the community foundation OR 2 EDUCATIONAL FOUNDATION for the use of distributions or other pro- 3 ceeds from the gift. 4 (4) AN INTERMEDIATE SCHOOL BOARD MAY TRANSFER A GIFT TO AN 5 EDUCATIONAL FOUNDATION UNDER THIS SECTION ONLY IF THE GIFT IS 6 EITHER TO ESTABLISH OR CONTRIBUTE TO A SCHOLARSHIP FUND AND THE 7 SCHOLARSHIP FUND IS CLEARLY INTENDED TO BENEFIT A STUDENT OR STU- 8 DENTS ATTENDING THE COMMUNITY COLLEGE OR STATE PUBLIC UNIVERSITY 9 WITH WHICH THE EDUCATIONAL FOUNDATION IS AFFILIATED. 10 (5)(4)A transfer of a gift made in accordance with this 11 section that occurred before the effective date of this section 12 OR BEFORE THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED 13 SUBSECTION (4) is ratified and confirmed and the transfer is con- 14 sidered valid as if it had been made under this section. 15 (6)(5)As used in this section: 16 (a) "Community foundation" means that term as defined in 17 section 261 of the income tax act of 1967, 1967 PA 281, 18 MCL 206.261. 19 (b) "Condition, limitation, or requirement" does not include 20 a material restriction or condition that violates 26 21 C.F.R. 1.170A-9 or that restricts a community foundation's OR 22 EDUCATIONAL FOUNDATION'S inherent power of modification described 23 in 26 C.F.R. 1.170A-9. 24 (C) "EDUCATIONAL FOUNDATION" MEANS A FOUNDATION ORGANIZED 25 AND OPERATED TO ASSIST THE FUNCTIONS OF A COMMUNITY COLLEGE OR 26 STATE PUBLIC UNIVERSITY. 03542'01 7 1 (D)(c)"Gift" does not include state school aid or 2 another grant from state or federal sources. 03542'01 Final page. 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