Read the full stored bill text
As Introduced
136th
General Assembly
Regular
Session
H. B. No. 751
2025-2026
Representatives Mathews, A., Ritter
To
amend sections 109.25, 1715.51, and 5813.06 and to enact
sections
1715.551
,
1715.552, 1715.553, 1715.554, 1715.555, 1715.556, 1715.557, 1715.558,
and 1715.559
of the Revised Code
to
establish the scope and procedures for a civil action when an
institution violates a restriction in an endowment agreement.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 109.25, 1715.51, and 5813.06 be amended and
sections
1715.551
,
1715.552, 1715.553, 1715.554, 1715.555, 1715.556, 1715.557, 1715.558,
and 1715.559
of the Revised Code be enacted to read as follows:
Sec.
109.25.
The
attorney general is a necessary party to and shall be served with
process or with summons by registered mail in all judicial
proceedings, the object of which is to:
(A)
Terminate a charitable trust or distribute assets;
(B)
Depart from the objects or purposes of a charitable trust as the same
are set forth in the instrument creating the trust, including any
proceeding for the application of the doctrine of cy pres or
deviation;
(C)
Construe the provisions of an instrument with respect to a charitable
trust;
(D)
Determine the validity of a will having provisions for a charitable
trust
;
(E)
Enforce the express terms of an endowment agreement under sections
1715.551 to 1715.559 of the Revised Code
.
A
judgment rendered in such proceedings without service of process or
summons upon the attorney general is void, unenforceable, and shall
be set aside upon the attorney general's motion seeking such relief.
The attorney general shall intervene in any judicial proceeding
affecting a charitable trust when requested to do so by the court
having jurisdiction of the proceeding, and may intervene in any
judicial proceeding affecting a charitable trust when
he
the attorney general
determines that the public interest should be protected in such
proceeding.
Sec.
1715.51.
As
used in sections 1715.51 to 1715.59 of the Revised Code:
(A)
"Benefactor"
means each person signing an endowment agreement who committed in the
agreement to transfer property to an institution with the
institution's consent.
(B)(1)
"Benefactor representative" means either:
(a)
A person designated in an endowment agreement, whether or not born or
existing at the time of such designation, to act in place of the
benefactor for the purpose of resolving disputes about the agreement,
including the agreement's validity, interpretation, performance, and
enforcement, and any action that the agreement contemplates;
(b)
If no person is designated in the endowment agreement, as described
in division (B)(1)(a) of this section, the administrator or executor
of a benefactor's estate.
(2)
"Benefactor representative" does not mean the institution
receiving or administering property under an endowment agreement or
any person designated by such institution for any purpose.
(C)
"Charitable
purpose" means any purpose the achievement of which is
beneficial to the community, including the relief of poverty, the
advancement of education or religion, the promotion of health, and
the promotion of a governmental purpose.
(B)
(D)
"Institution" means any of the following:
(1)
A person, other than an individual, organized and operated
exclusively for charitable purposes;
(2)
A governmental organization to the extent that it holds funds
exclusively for a charitable purpose;
(3)
A trust that had both charitable and noncharitable interests and the
noncharitable interests have terminated.
(C)
(E)
"Institutional fund" means a fund that is held by an
institution exclusively for charitable purposes. "Institutional
fund" does not include any of the following:
(1)
Program
related
Program-related
assets;
(2)
A fund held for an institution by a trustee that is not an
institution;
(3)
A fund in which a beneficiary that is not an institution has an
interest other than an interest that may arise upon a violation of or
the failure of the purposes of the fund.
(D)
(F)
"Endowment agreement" means a gift instrument signed by a
benefactor and by a state institution of higher education or another
institution whose corporate purpose is to benefit an identified state
institution of higher education and receives, holds, or administers
charitable transfers of property for such state institution of higher
education; and that contains both of the following obligations:
(1)
The benefactor commits to transfer property to a state institution of
higher education or to another institution to receive, hold, or
administer the property for the use or benefit of a state institution
of higher education with the consent of such state institution of
higher education.
(2)
An institution signing the instrument commits that the institution or
a state institution of higher education will receive, hold, or
administer the transferred property as an endowment fund for the use
or benefit of a state institution of higher education subject to any
restrictions on management, investment, spending, or purpose
expressed in the instrument.
(G)
"Endowment fund" means an institutional fund or any part
thereof that, under the terms of a gift instrument, is not wholly
expendable by the institution on a current basis. "Endowment
fund" does not include assets that an institution designates as
an endowment fund for its own use.
(E)
(H)
"Gift instrument" means a record or records, including an
institutional solicitation, under which property is granted to,
transferred to, or held by an institution as an institutional fund.
(F)
(I)
"Person" means an individual, corporation, business trust,
estate, trust, partnership, limited liability company, association,
joint venture, public corporation, governmental organization, or any
other legal or commercial entity.
(G)
(J)
"
Program
related
Program-related
asset"
means an asset held by an institution primarily to accomplish a
charitable purpose of the institution and not primarily for
investment.
(H)
(K)
"Record" means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(L)
"State institution of higher education" has the same
meaning as in section 3345.011 of the Revised Code and is an
"institution" within the meaning of this chapter.
Sec.
1715.551.
If
an institution violates a restriction contained in an endowment
agreement on the management, investment, spending, or purpose of the
endowment fund, a benefactor or benefactor representative may notify
the charitable law section of the office of the attorney general in
writing of the violation.
Sec.
1715.552.
The
attorney general may enforce the interests of the beneficiaries of an
endowment agreement by filing a complaint for breach or to obtain a
declaratory judgment of rights and duties expressed in the agreement
and as to all of the actions it contemplates, including the
interpretation, performance, and enforcement of the agreement and
determination of its validity.
Sec.
1715.553.
(A)
If, within one hundred eighty days after receiving the notice under
section 1715.551 of the Revised Code, the attorney general has not
obtained full compliance with the restriction and restitution to the
endowment fund of property approximately equal to any value lost due
to the violated restriction, a benefactor or benefactor
representative may file a complaint for either or both of the
following:
(1)
Breach of the endowment agreement;
(2)
To obtain a declaratory judgment of rights and duties expressed in
the agreement as to all of the actions it contemplates, including the
interpretation, performance, and enforcement of the agreement and
determination of its validity.
(B)
Each of the following applies to the complaint:
(1)
It may be filed regardless of whether the agreement expressly
reserves a right to sue or enforce.
(2)
The filing of a complaint by the attorney general under section
1715.552 of the Revised Code is not a requirement for filing a
complaint under this section.
(3)
It shall not seek a judgment awarding to the plaintiff damages, court
costs, attorney's fees, or any other award of money or other
property.
(4)
It shall seek only one or both of the following:
(a)
Declaratory relief;
(b)
Equitable relief consistent with the charitable purposes expressed in
the endowment agreement and consistent with the charitable purposes
of the institution administering the endowment fund under the
endowment agreement and the state institution of higher education
receiving the use or benefit of the endowment fund.
Sec.
1715.554.
An
institution that is a party to an endowment agreement, or the state
institution of higher education receiving the use or benefit of the
endowment fund established through an endowment agreement, may obtain
a declaratory judgment of rights and duties expressed in an endowment
agreement and as to all of the actions it contemplates, including the
interpretation, performance, and enforcement of the agreement and
determination of the agreement's validity. The institution shall seek
such declaration in response to any complaint brought under sections
1715.551 to 1715.559 of the Revised Code.
Sec.
1715.555.
Every
complaint authorized by sections 1715.551 to 1715.559 of the Revised
Code shall be filed in a court of competent general jurisdiction in
the county where the state institution of higher education receiving
the use or benefit of the endowment fund has its principal office.
Every such complaint shall:
(A)
Name the attorney general as a party;
(B)
Name as parties each institution that signed the endowment agreement
or its successor, the state institution of higher education receiving
the use or benefit of the endowment fund, and any institution that
currently holds or administers property subject to the agreement;
(C)
Name as parties each benefactor and benefactor representative.
Sec.
1715.556.
The
failure to join as a party a benefactor or benefactor representative
is not jurisdictional. The court, however, shall afford a benefactor
or benefactor representative an opportunity to be heard or to
intervene if sought within a reasonable time before the court renders
final judgment.
Sec.
1715.557.
The
interest of a benefactor and the interest represented by a benefactor
representative shall not be presumed to be identical with the
interest of the attorney general or a state institution of higher
education or an institution administering an endowment fund under an
endowment agreement.
Sec.
1715.558.
(A)
Except as allowed by division (B) of this section, a benefactor or
benefactor representative shall not file a complaint authorized by
sections 1715.551 to 1715.559 of the Revised Code based on a breach
of an endowment agreement if the person filing the complaint
discovered the breach more than six years before filing the
complaint.
(B)
If, during the sixth year after discovery of the breach of an
endowment agreement, a benefactor or benefactor representative
notifies the charitable law section of the office of the attorney
general in writing of the breach of an endowment agreement as
authorized by sections 1715.551 to 1715.559 of the Revised Code, the
period within which such benefactor or benefactor representative must
file a complaint authorized by sections 1715.551 to 1715.559 of the
Revised Code is extended automatically by two hundred ten days.
Sec.
1715.559.
Sections
1715.551 to 1715.559 of the Revised Code apply only to the following:
(A)
Endowment funds established on and after the effective date of this
section;
(B)
Endowment funds established before the effective date of this
section, but only with respect to breaches of such endowment
agreements if those breaches occur on or after the effective date of
this section.
Sec.
5813.06.
(A)
Nothing in sections 5813.01 to 5813.05 of the Revised Code affects
the construction or interpretation of sections 1715.51 to 1715.59 of
the Revised Code relating to the uniform prudent management of
institutional funds act. Specifically, neither the percentage set
forth in division (B) of section 5813.02 of the Revised Code nor the
amount actually requested by a governing board pursuant to that
section shall be construed or interpreted to limit or expand what is
a prudent amount that can be expended by a governing board of an
institution under sections 1715.51 to 1715.59 of the Revised Code.
(B)
If an institutional trust fund is also an institutional fund as
defined in division
(C)
(E)
of section 1715.51 of the Revised Code with the result that sections
1715.51 to 1715.59 of the Revised Code also are applicable to the
institutional trust fund, then sections 1715.51 to 1715.59 of the
Revised Code apply to the institutional trust fund, and sections
5813.01 to 5813.07 of the Revised Code do not apply to the
institutional trust fund.
Section
2.
That
existing sections 109.25, 1715.51, and 5813.06 of the Revised Code
are hereby repealed.