Read the full stored bill text
JJB H07467'26_HB6207_INTR_1 zk0btc
HOUSE BILL NO. 6207
A bill to amend 2009 PA 87, entitled
"Uniform prudent management of institutional funds act,"
by amending section 4 (MCL 451.924).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4. (1) Subject to the intent of a donor expressed in the 1
gift instrument and to subsection (4), an institution may 2
appropriate for expenditure or accumulate so much of an endowment 3
fund as the institution determines is prudent for the uses, 4
benefits, purposes, and duration for which the endowment fund is 5
July 03, 2026, Introduced by Reps. Jenkins -Arno, Beson, Frisbie and Neyer and referred to
Committee on Finance.
2
JJB H07467'26_HB6207_INTR_1 zk0btc
established. Unless stated otherwise in the gift instrument, the 1
assets in an endowment fund are donor-restricted assets until 2
appropriated for expenditure by the institution. In making a 3
determination to appropriate or accumulate, the institution shall 4
act in good faith, with the care that an ordinarily prudent person 5
in a like position would exercise under similar circumstances, and 6
shall consider, if relevant, all of the following factors: 7
(a) The duration and preservation of the endowment fund. 8
(b) The purposes of the institution and the endowment fund. 9
(c) General economic conditions. 10
(d) The possible effect of inflation or deflation. 11
(e) The expected total return from income and the appreciation 12
of investments. 13
(f) Other resources of the institution. 14
(g) The investment policy of the institution. 15
(2) To limit the authority to appropriate for expenditure or 16
accumulate under subsection (1), a gift instrument must 17
specifically state the limitation. 18
(3) Terms in a gift instrument designating a gift as an 19
endowment, or a direction or authorization in the gift instrument 20
to use only "income", "interest", "dividends", "rents, issues, or 21
profits", or "to preserve the principal intact", or words of 22
similar import, do both of the following: 23
(a) Create an endowment fund of permanent duration unless 24
other language in the gift instrument limits the duration or 25
purpose of the fund. 26
(b) Do not otherwise limit the authority to appropriate for 27
expenditure or accumulate under subsection (1). 28
(4) The appropriation for expenditure in any year of an amount 29
3
Final Page
JJB H07467'26_HB6207_INTR_1 zk0btc
greater than 8% of the fair market value of an endowment fund, 1
calculated on the basis of market values determined at least 2
quarterly and averaged over a period of not less than 3 years 3
immediately preceding the year in which the appropriation for 4
expenditure is made, creates a rebuttable presumption of 5
imprudence. For an endowment fund in existence for fewer than 3 6
years, the fair market value of the endowment fund must be 7
calculated for the period the endowment fund has been in existence. 8
This subsection does not do either of the following: 9
(a) Apply to an appropriation for expenditure permitted under 10
law other than this act or by the gift instrument. 11
(b) Create a presumption of prudence for an appropriation for 12
expenditure of an amount less than or equal to 8% of the fair 13
market value of the endowment fund. 14