2009 - 2010 LEGISLATURE
May 11, 2009 - Offered by Committee on Veterans and Military Affairs,
Biotechnology, and Financial Institutions
SB31-SSA1,1,5 1An Act to repeal 112.10; to amend 25.15 (3), 43.58 (7) (b), 615.10 (5), 620.25 (2)
2and 881.01 (2) (a); and to create 112.11 of the statutes; relating to: the
3Uniform Prudent Management of Institutional Funds Act, as approved by the
4National Conference of Commissioners on Uniform State Laws, and
5investment standards for assets in accounts for gift annuities.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB31-SSA1, s. 1 6Section 1. 25.15 (3) of the statutes is amended to read:
SB31-SSA1,1,87 25.15 (3) Exemption. Section Sections 112.11 and 881.01 does do not apply to
8investments by the board.
SB31-SSA1, s. 2 9Section 2. 43.58 (7) (b) of the statutes is amended to read:
SB31-SSA1,2,1610 43.58 (7) (b) If a gift, bequest, or endowment is made to any public library, the
11library board may pay or transfer the gift, bequest, or endowment, or its proceeds,
12to the treasurer of the municipality or county in which the public library is situated;

1may entrust the gift, bequest, or endowment to a public depository under ch. 34; may
2pay or transfer the gift, bequest, or endowment to the library board's financial
3secretary; or may pay or transfer the gift, bequest, or endowment to a charitable
4organization, described in section 501 (c) (3) of the Internal Revenue Code and
5exempt from federal income tax under section 501 (a) of the Internal Revenue Code,
6the purpose of which is providing financial or material support to the public library.
7A payment or transfer of a gift, bequest, or endowment by a library board to a
8charitable organization described in this paragraph made prior to March 19, 2008,
9is not invalid as lacking statutory authority to make the payment or transfer. If the
10library board pays or transfers the gift, bequest, or endowment to the financial
11secretary, the financial secretary may invest the gift, bequest, or endowment as
12permitted under s. 66.0603 (1m) or 112.10 (4) 112.11 (3); or may delegate investment
13authority for the gift, bequest, or endowment as permitted under s. 66.0603 (2) or
14112.10 112.11 (5). The financial secretary shall hold office only during membership
15on the library board and shall be elected annually at the same time and in the same
16manner as the other officers of the library board.
SB31-SSA1, s. 3 17Section 3. 112.10 of the statutes is repealed.
SB31-SSA1, s. 4 18Section 4. 112.11 of the statutes is created to read:
SB31-SSA1,2,21 19112.11 Uniform Prudent Management of Institutional Funds Act. (1)
20Short title. This section may be cited as the "Uniform Prudent Management of
21Institutional Funds Act."
SB31-SSA1,2,22 22(2) Definitions. In this section:
SB31-SSA1,3,223 (a) "Charitable purpose" means the relief of poverty, the advancement of
24education or religion, the promotion of health, the promotion of a governmental

1purpose, or any other purpose, the achievement of which is beneficial to the
SB31-SSA1,3,63 (b) "Endowment fund" means an institutional fund or part thereof that, under
4the terms of a gift instrument, is not wholly expendable by the institution on a
5current basis. "Endowment fund" does not include assets that an institution
6designates as an endowment fund for its own use.
SB31-SSA1,3,97 (c) "Gift instrument" means a record or records, including an institutional
8solicitation, under which property is granted to, transferred to, or held by an
9institution as an institutional fund.
SB31-SSA1,3,1010 (d) "Institution" means any of the following:
SB31-SSA1,3,1211 1. A person, other than an individual, organized and operated exclusively for
12charitable purposes.
SB31-SSA1,3,1413 2. A government or governmental subdivision, agency, or instrumentality, to
14the extent that it holds funds exclusively for a charitable purpose.
SB31-SSA1,3,1615 3. A trust that had both charitable and noncharitable interests, after all
16noncharitable interests have terminated.
SB31-SSA1,3,1817 (e) "Institutional fund" means a fund held by an institution exclusively for
18charitable purposes, but does not include any of the following:
SB31-SSA1,3,1919 1. Program-related assets.
SB31-SSA1,3,2120 2. A fund in which a beneficiary that is not an institution has an interest, other
21than an interest that could arise upon violation or failure of the purposes of the fund.
SB31-SSA1,3,2522 (f) "Person" means an individual, corporation, business trust, estate, trust,
23partnership, limited liability company, association, joint venture, public corporation,
24government or governmental subdivision, agency, or instrumentality, or any other
25legal or commercial entity.
1(g) "Program-related asset" means an asset held by an institution primarily
2to accomplish a charitable purpose of the institution and not primarily for
SB31-SSA1,4,54 (h) "Record" means information that is inscribed on a tangible medium or that
5is stored in an electronic or other medium and is retrievable in perceivable form.
SB31-SSA1,4,9 6(3) Standard of conduct in managing and investing an institutional fund.
7(a) Subject to the intent of a donor expressed in a gift instrument, an institution, in
8managing and investing an institutional fund, shall consider the charitable purposes
9of the institution and the purposes of the institutional fund.
SB31-SSA1,4,1310 (b) In addition to complying with the duty of loyalty imposed by law other than
11this section, each person responsible for managing and investing an institutional
12fund shall manage and invest the fund in good faith and with the care an ordinarily
13prudent person in a like position would exercise under similar circumstances.
SB31-SSA1,4,1414 (c) In managing and investing an institutional fund, an institution:
SB31-SSA1,4,1615 1. May incur only costs that are appropriate and reasonable in relation to the
16assets, the purposes of the institution, and the skills available to the institution.
SB31-SSA1,4,1817 2. Shall make a reasonable effort to verify facts relevant to the management
18and investment of the fund.
SB31-SSA1,4,2019 (d) An institution may pool 2 or more institutional funds for purposes of
20management and investment.
SB31-SSA1,4,2121 (e) Except as otherwise provided by a gift instrument, the following rules apply:
SB31-SSA1,4,2322 1. In managing and investing an institutional fund, the following factors, if
23relevant, shall be considered:
SB31-SSA1,4,2424 a. General economic conditions.
SB31-SSA1,4,2525 b. The possible effect of inflation or deflation.
1c. The expected tax consequences, if any, of investment decisions or strategies.
SB31-SSA1,5,32 d. The role that each investment or course of action plays within the overall
3investment portfolio of the fund.
SB31-SSA1,5,44 e. The expected total return from income and the appreciation of investments.
SB31-SSA1,5,55 f. Other resources of the institution.
SB31-SSA1,5,76 g. The needs of the institution and the fund to make distributions and to
7preserve capital.
SB31-SSA1,5,98 h. An asset's special relationship or special value, if any, to the charitable
9purposes of the institution.
SB31-SSA1,5,1310 2. Management and investment decisions about an individual asset shall not
11be made in isolation but rather in the context of the institutional fund's portfolio of
12investments as a whole and as a part of an overall investment strategy having risk
13and return objectives reasonably suited to the fund and to the institution.
SB31-SSA1,5,1514 3. Except as otherwise provided by law other than this section, an institution
15may invest in any kind of property or type of investment consistent with this section.
SB31-SSA1,5,1816 4. An institution shall diversify the investments of an institutional fund unless
17the institution reasonably determines that, because of special circumstances, the
18purposes of the fund are better served without diversification.
SB31-SSA1,5,2319 5. Within a reasonable time after receiving property, an institution shall make
20and carry out decisions concerning the retention or disposition of the property or to
21rebalance a portfolio, in order to bring the institutional fund into compliance with the
22purposes, terms, and distribution requirements of the institution as necessary to
23meet other circumstances of the institution and the requirements of this section.
16. A person that has special skills or expertise, or is selected in reliance upon
2the person's representation that the person has special skills or expertise, has a duty
3to use those skills or that expertise in managing and investing institutional funds.
SB31-SSA1,6,14 4(4) Appropriation for expenditure or accumulation of endowment fund;
5rules of construction.
(a) Subject to the intent of a donor expressed in the gift
6instrument, an institution may appropriate for expenditure or accumulate so much
7of an endowment fund as the institution determines is prudent for the uses, benefits,
8purposes, and duration for which the endowment fund is established. Unless stated
9otherwise in the gift instrument, the assets in an endowment fund are
10donor-restricted assets until appropriated for expenditure by the institution. In
11making a determination to appropriate or accumulate, the institution shall act in
12good faith, with the care that an ordinarily prudent person in a like position would
13exercise under similar circumstances, and shall consider, if relevant, the following
SB31-SSA1,6,1515 1. The duration and preservation of the endowment fund.