2009 - 2010 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO 2009 SENATE BILL 31
May 11, 2009 - Offered by Committee on Veterans and Military Affairs,
Biotechnology, and Financial Institutions.
1An Act to repeal
112.10; to amend
25.15 (3), 43.58 (7) (b), 615.10 (5), 620.25 (2) 2
and 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:
25.15 (3) Exemption. Section Sections 112.11 and
not apply to 8
investments by the board.
SB31-SSA1, s. 2
43.58 (7) (b) of the statutes is amended to read:
(b) If a gift, bequest, or endowment is made to any public library, the 11
library board may pay or transfer the gift, bequest, or endowment, or its proceeds, 12
to the treasurer of the municipality or county in which the public library is situated;
may entrust the gift, bequest, or endowment to a public depository under ch. 34; may 2
pay or transfer the gift, bequest, or endowment to the library board's financial 3
secretary; or may pay or transfer the gift, bequest, or endowment to a charitable 4
organization, described in section 501
(c) (3) of the Internal Revenue Code and 5
exempt from federal income tax under section 501
(a) of the Internal Revenue Code, 6
the purpose of which is providing financial or material support to the public library. 7
A payment or transfer of a gift, bequest, or endowment by a library board to a 8
charitable organization described in this paragraph made prior to March 19, 2008, 9
is not invalid as lacking statutory authority to make the payment or transfer. If the 10
library board pays or transfers the gift, bequest, or endowment to the financial 11
secretary, the financial secretary may invest the gift, bequest, or endowment as 12
permitted under s. 66.0603 (1m) or 112.10 (4) 112.11 (3)
; or may delegate investment 13
authority 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 15
on the library board and shall be elected annually at the same time and in the same 16
manner as the other officers of the library board.
19112.11 Uniform Prudent Management of Institutional Funds Act. (1) 20Short title.
This section may be cited as the "Uniform Prudent Management of 21
Institutional Funds Act."
In this section:
(a) "Charitable purpose" means the relief of poverty, the advancement of 24
education or religion, the promotion of health, the promotion of a governmental
purpose, or any other purpose, the achievement of which is beneficial to the 2
(b) "Endowment fund" means an institutional fund or part thereof that, under 4
the terms of a gift instrument, is not wholly expendable by the institution on a 5
current basis. "Endowment fund" does not include assets that an institution 6
designates as an endowment fund for its own use.
(c) "Gift instrument" means a record or records, including an institutional 8
solicitation, under which property is granted to, transferred to, or held by an 9
institution as an institutional fund.
(d) "Institution" means any of the following:
1. A person, other than an individual, organized and operated exclusively for 12
2. A government or governmental subdivision, agency, or instrumentality, to 14
the extent that it holds funds exclusively for a charitable purpose.
3. A trust that had both charitable and noncharitable interests, after all 16
noncharitable interests have terminated.
(e) "Institutional fund" means a fund held by an institution exclusively for 18
charitable purposes, but does not include any of the following:
1. Program-related assets.
2. A fund in which a beneficiary that is not an institution has an interest, other 21
than an interest that could arise upon violation or failure of the purposes of the fund.
(f) "Person" means an individual, corporation, business trust, estate, trust, 23
partnership, limited liability company, association, joint venture, public corporation, 24
government or governmental subdivision, agency, or instrumentality, or any other 25
legal or commercial entity.
(g) "Program-related asset" means an asset held by an institution primarily 2
to accomplish a charitable purpose of the institution and not primarily for 3
(h) "Record" means information that is inscribed on a tangible medium or that 5
is stored in an electronic or other medium and is retrievable in perceivable form.
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 8
managing and investing an institutional fund, shall consider the charitable purposes 9
of the institution and the purposes of the institutional fund.
(b) In addition to complying with the duty of loyalty imposed by law other than 11
this section, each person responsible for managing and investing an institutional 12
fund shall manage and invest the fund in good faith and with the care an ordinarily 13
prudent person in a like position would exercise under similar circumstances.
(c) In managing and investing an institutional fund, an institution:
1. May incur only costs that are appropriate and reasonable in relation to the 16
assets, the purposes of the institution, and the skills available to the institution.
2. Shall make a reasonable effort to verify facts relevant to the management 18
and investment of the fund.
(d) An institution may pool 2 or more institutional funds for purposes of 20
management and investment.
(e) Except as otherwise provided by a gift instrument, the following rules apply:
1. In managing and investing an institutional fund, the following factors, if 23
relevant, shall be considered:
a. General economic conditions.
b. The possible effect of inflation or deflation.
c. The expected tax consequences, if any, of investment decisions or strategies.
d. The role that each investment or course of action plays within the overall 3
investment portfolio of the fund.
e. The expected total return from income and the appreciation of investments.
f. Other resources of the institution.
g. The needs of the institution and the fund to make distributions and to 7
h. An asset's special relationship or special value, if any, to the charitable 9
purposes of the institution.
2. Management and investment decisions about an individual asset shall not 11
be made in isolation but rather in the context of the institutional fund's portfolio of 12
investments as a whole and as a part of an overall investment strategy having risk 13
and return objectives reasonably suited to the fund and to the institution.
3. Except as otherwise provided by law other than this section, an institution 15
may invest in any kind of property or type of investment consistent with this section.
4. An institution shall diversify the investments of an institutional fund unless 17
the institution reasonably determines that, because of special circumstances, the 18
purposes of the fund are better served without diversification.
5. Within a reasonable time after receiving property, an institution shall make 20
and carry out decisions concerning the retention or disposition of the property or to 21
rebalance a portfolio, in order to bring the institutional fund into compliance with the 22
purposes, terms, and distribution requirements of the institution as necessary to 23
meet other circumstances of the institution and the requirements of this section.
6. A person that has special skills or expertise, or is selected in reliance upon 2
the person's representation that the person has special skills or expertise, has a duty 3
to use those skills or that expertise in managing and investing institutional funds.
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 6
instrument, an institution may appropriate for expenditure or accumulate so much 7
of an endowment fund as the institution determines is prudent for the uses, benefits, 8
purposes, and duration for which the endowment fund is established. Unless stated 9
otherwise in the gift instrument, the assets in an endowment fund are 10
donor-restricted assets until appropriated for expenditure by the institution. In 11
making a determination to appropriate or accumulate, the institution shall act in 12
good faith, with the care that an ordinarily prudent person in a like position would 13
exercise under similar circumstances, and shall consider, if relevant, the following 14
1. The duration and preservation of the endowment fund.