Bill Text: MI SB0959 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Property; other; Michigan community foundation act; create. Creates new act & repeals secs. 1 & 4 of 1913 PA 380 (MCL 123.871 & 123.874), repeals secs. 15 & 602 of 1976 PA 451 (MCL 380.15 & 380.602) & repeals 1921 PA 136 (MCL 397.381 - 397.382).
Spectrum: Partisan Bill (Republican 2-0)
Status: (Engrossed - Dead) 2016-12-07 - Referred To Committee On Local Government [SB0959 Detail]
Download: Michigan-2015-SB0959-Engrossed.html
SB-0959, As Passed Senate, December 7, 2016
SUBSTITUTE FOR
SENATE BILL NO. 959
A bill to authorize, facilitate, and regulate the acquisition
and disposal of certain property and gifts of certain property by
certain entities to community foundations; to validate all
transfers made before the enactment of this act; and to repeal acts
and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan community foundation act".
Sec. 3. As used in this act:
(a) "Community foundation" means an organization that meets
all of the following requirements:
(i) Has been in existence for at least 10 years.
(ii) Has assets of at least $5,000,000.00.
(iii) Qualifies for exemption from federal income taxation
under section 501(c)(3) of the internal revenue code, 26 USC
501(c)(3).
(iv) Supports a broad range of charitable activities within
the specific geographic area of this state that it serves, such as
a municipality.
(v) Maintains an ongoing program to attract new endowment
funds by seeking gifts and bequests from a wide range of potential
donors in the geographic area served.
(vi) Is publicly supported, as defined by 26 CFR 1.170A-9(f).
(vii) Meets the requirements for treatment as a single entity
under 26 CFR 1.170A-9(f)(11).
(viii) Is not an organization described in section 509(a)(3)
of the internal revenue code, 26 USC 509(a)(3).
(ix) Has an independent governing body representing the
general public's interest and that is not appointed by a single
outside entity.
(x) Maintains continually at least 1 part-time or full-time
employee beginning not later than 6 months after the community
foundation is incorporated or established.
(xi) Is subject to an annual independent financial audit.
(xii) For a community foundation that is incorporated or
established after January 9, 2001, operates in a county of this
state that was not served by a community foundation when the
community foundation was incorporated or established or operates as
a geographic component of an existing community foundation.
(b) "Component fund" means a component part of a community
trust as described in 26 CFR 1.170A-9.
(c) "Condition, limitation, or requirement" does not include a
material restriction or condition that violates 26 CFR 1.170A-9 or
that restricts a community foundation's inherent power of
modification described in 26 CFR 1.170A-9.
(d) "Gift" does not include state school aid or another grant
from state or federal sources.
(e) "Intangible personal property" means incorporeal personal
property including, but not limited to, cash, proceeds of the sale
of real or personal property, deposits in banks or other financial
institutions, negotiable instruments, mortgages, debts,
receivables, shares of stock, bonds, notes, credits, evidences of
an interest in property, evidences of debt, and choses in action
generally. Intangible personal property does not include state
school aid or another grant from state or federal resources.
(f) "Municipality" means a city, village, township, county, or
a subdivision or instrumentality of any of these entities.
(g) "Public library" means a board of education, library
commission, or other public corporation empowered to maintain a
public library.
(h) "School board" and "intermediate school board" mean those
terms as defined in the revised school code, 1976 PA 451, MCL 380.1
to 380.1852.
Sec. 5. (1) A municipality may receive, own, and enjoy any
gift of real, personal, or intangible personal property, made by
grant, devise, or bequest, or in any other manner, for public
parks, grounds, cemeteries, public buildings, or other public
purposes, whether made directly or in trust, subject to the
conditions, limitations, and requirements provided in the grant,
devise, bequest, or other instrument. A gift shall not be invalid
because of an informality in the instrument evidencing the gift, if
the intent can be determined from the instrument, or by reason of
its contravening a statute or rule against perpetuities. All gifts
made prior to the effective date of this act, either by grant,
devise, or bequest, or in any other manner, are declared valid,
though they violate a statute or rule against perpetuities, the
same as if this act had been in effect when made.
(2) A school board of a general powers school district may
receive, own, and enjoy a gift of real, personal, or intangible
personal property made by grant, devise, or bequest, or in any
other manner, that is made for school purposes under the revised
school code, 1976 PA 451, MCL 380.1 to 380.1852. An intermediate
school board of an intermediate school district may receive, own,
and enjoy a gift of real or personal property made by grant,
devise, or bequest, or in any other manner, that is made for
intermediate school district purposes under the revised school
code, 1976 PA 451, MCL 380.1 to 380.1852.
(3) A public library may receive and accept gifts and
donations of real, personal, or intangible personal property, for
the library, and shall hold, use, and apply the property received
for the purposes, in accordance with the provisions, and subject to
the conditions and limitations, if any, set forth in the instrument
of gift.
(4) Whenever any property, real, personal, or intangible
personal, now or hereafter held and used for the purpose of a
municipality, school board, intermediate school board, or public
library by any municipality, school board, intermediate school
board, or public library, in the judgment of that municipality,
school board, intermediate school board, or public library, is no
longer needed for that purpose, that property may be sold and
disposed of by the municipality, school board, intermediate school
board, or public library unless the sale and disposal are
inconsistent with the terms and conditions upon which the property
was acquired, at a price and upon terms and conditions as the
municipality, school board, intermediate school board, or public
library may deem proper, and the proceeds of that property shall be
used and applied for the purpose of the municipality, school board,
intermediate school board, or public library.
Sec. 7. (1) Subject to subsections (2) and (3), a
municipality, school board, intermediate school board, or public
library may do the following:
(a) Transfer any gift of intangible personal property received
pursuant to section 5 or the proceeds of any gift received pursuant
to section 5 to a community foundation.
(b) Transfer any intangible personal property to a community
foundation.
(2) If the gift or the intangible personal property to be
transferred to a community foundation pursuant to this section was
not subject to conditions, limitations, or requirements, the
transfer shall be to an endowed or nonendowed component fund within
the community foundation that imposes conditions, limitations, or
requirements on the use of the property for 1 or more purposes
provided in section 5 for municipalities, school boards,
intermediate school boards, and public libraries, respectively.
(3) If a gift or the intangible personal property to be
transferred to a community foundation pursuant to this section was
subject to conditions, limitations, or requirements, the transfer
shall be to an endowed or nonendowed component fund within the
community foundation that incorporates conditions, limitations, or
requirements that are substantially similar to those to which the
gift or intangible personal property was subject.
(4) A transfer in accordance with this section that occurred
before the effective date of this act is ratified and confirmed,
and the transfer is considered valid as if it had been made under
this act.
(5) A community foundation to which property is transferred
pursuant to this act shall return the property to the entity that
transferred the property if 1 or more of the following occur:
(a) The community foundation fails to meet all of the
requirements for certification as a community foundation set forth
in section 3.
(b) The community foundation is liquidated.
(c) The community foundation substantially violates any
condition, limitation, or requirement imposed on the property.
(6) A municipality, school board, intermediate school board,
or public library transferring property to a community foundation
pursuant to this act may request that the community foundation
establish a donor advisory committee for the component fund holding
the transferred property. The donor advisory committee for the
component fund that holds the property shall include a
representative of the entity transferring the property and have
advisory rights only with the investment, management, and use of
the transferred property at the sole discretion of the community
foundation in accordance with the purposes of the component fund
holding the transferred property. The donor advisory committee may
do the following:
(a) Report to the community foundation on whether any
condition, limitation, or requirement on the use of the transferred
property is being complied with.
(b) Make recommendations for the use of the transferred
property.
Enacting section 1. (1) Sections 1 and 4 of 1913 PA 380, MCL
123.871 and 123.874, are repealed.
(2) Sections 15 and 602 of the revised school code, 1976 PA
451, MCL 380.15 and 380.602, are repealed.
(3) 1921 PA 136, MCL 397.381 to 397.382, is repealed.
