Senate Bill No. 777
(By Senators Plymale, Edgell, Green, Oliverio, Stollings,
Unger, Wells, White, Hall and Sprouse)
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[Originating in the Committee on Education; reported
February 20, 2008.]
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A BILL to amend the Code of West Virginia, 1931, as amended,
by adding thereto a new section, designated §18B-1-9,
relating generally to additional powers of governing
boards of Marshall University and West Virginia
University; authorizing conveyance of real property or
any interest therein from governing board to a real
estate foundation; providing definition of "property";
providing for creation of real estate foundation and
terms thereof; prohibiting members of board of
governors from serving as director, officer or trustee
of foundation; limiting number of state employees who
may serve as director, officer or trustee of
foundation; providing for conveyance of property to and
by foundation; requiring affirmative determination by
the governing board that no state funds were used in acquiring property to be conveyed; exempting conveyance
of property to or by a real estate foundation from
certain provisions of law; designating sale proceeds
and foundation income as private foundation money;
specifying foundation purposes; and requiring annual
report to Joint Committee on Government and Finance.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be
amended by adding there to a new section, designated §18B-1-
9, to read as follows:
ARTICLE 2A. INSTITUTIONAL BOARDS OF GOVERNORS.
§18B-1-9. Conveyance of property to real estate foundations;
additional powers of certain governing boards.
(a)
Property defined. -- For purposes of this section,
"property" means an interest in land, including, but not
limited to, any interest in natural resources on or under
the surface of the land, and any improvements thereon.
(b)
Creation of real estate foundation; tax exempt
status. --
(1) Any real estate foundation to be created shall be
established as a nonstock, nonprofit corporation under the
general corporation laws of this state.
(2) A real estate foundation shall be operated solely
in connection with and exclusively for the benefit of Marshall University or West Virginia University,
respectively, and the affiliated organizations of the
institution.
(3) Marshall University or West Virginia University may
convey property to no more than one real estate foundation.
(4) No part of the real estate foundation's net
earnings may be used in any manner that is inconsistent with
the purposes set forth in this section and the real estate
foundation's exemption from federal income tax under 26 U.
S. C. §501(c)(3).
(5) No member of the institutional board of governors
may be a director, officer or trustee of the real estate
foundation and no more than twenty percent of the board of
directors, trustees or officers of the real estate
foundation may be state employees.
(c)
Conveyance of property to and by a real estate
foundation. --
(1) The governing board of Marshall University or West
Virginia University, as applicable, may authorize the
conveyance of any interest in property or improvements
thereon held by the institution or any constituent unit
thereof, or by the state or any agency of the state on
behalf of the institution, to a real estate foundation if
that institution's governing board determines that the property was acquired with private funds or by gift, grant,
bequest or devise to or for the use of the institution.
(2) The governing board may not convey any interest in
property or improvements thereon to a real estate foundation
if any state funds were used to acquire title to or interest
in the property.
(d)
Conditions for conveying property. --
(1) Notwithstanding any provisions of this code to the
contrary, any approved conveyance of property to a real
estate foundation is exempt from laws concerning conveyance,
transfer or sale of property. Conveyances of any interest
in the property or any improvements thereon by the real
estate foundation also are exempt from compliance with any
statute concerning disposition of state property.
(2) Any income or proceeds from the conveyance of any
interest in the property are considered to be private funds
of the real estate foundation and may be used by the
foundation for any foundation purpose pursuant to subsection
(e) of this section.
(3) If the real estate foundation is terminated, all
of its net assets revert to the institution of higher
education for which the foundation was established.
(e)
Purposes of the real estate foundation. --
The purposes of the real estate foundation include, but are not limited to, the following:
(1) Holding title to, accepting, managing and
disposing of real property and any improvements thereon or
interest therein acquired by the institution by gift, grant,
bequest or devise, or purchased by the institution using
private funds, and any income derived from the property or
proceeds from the sale or transfer of the property; and
(2) Using the proceeds from the management of its real
property assets to provide regular direct and indirect
financial support for the institution for which it was
established. This financial support may be in the form of
endowed scholarships, professorships and internship
opportunities or other similar assistance.
(f)
Annual report. -- Annually, each board of governors
which has conveyed property to a real estate foundation
pursuant to this section shall submit a written report to
the Joint Committee on Government and Finance of the
Legislature identifying property it transferred to the real
estate foundation and benefits received by the institution
from the foundation during the fiscal year covered by the
report. A copy of the report shall be filed with the Joint
Committee on Government and Finance by the first day of
December following the close of the fiscal year for which
the report is made.
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(NOTE: The purpose of this bill is authorize Marshall
University and West Virginia University to manage real
property they have received as gifts, or which they have
acquired with private funds, by conveying title to these
properties to a real estate foundation established as a non-
stock, non-profit corporation exempt from federal income
tax. Before property may be conveyed, the governing board
must first make a determination that the institution
acquired the property by gift or through the use of private
monies and affirmatively approve each property transfer.
This section is new; therefore, strike-throughs and
underscoring have been omitted.)