RÉSUMÉ DIGEST
ACT 274 (SB 498) 2024 Regular Session Foil
New law (R.S. 9:2348) provides that a special charitable trust may be created when a person
makes a donation inter vivos to the trust in an amount not less than $50 million for purposes
of improving the health and lives of the people of La. and forms the trust pursuant to the
provisions of new law. Provides that the special charitable trust may provide for any type of
beneficiary, including an institutional beneficiary as defined in existing law.
New law (R.S. 9:2349) provides that subject to any limitations, restrictions, reservations in
the trust, resolution of the trustees, or applicable law, the special charitable trust shall be
managed by the trustees. Provides that the trustee has a fiduciary duty to act in the best
interest of the special charitable trust and its beneficiaries, and shall exercise due diligence
in the performance of his duties pursuant to the provisions of existing law.
New law prohibits a trustee, an immediate family member of a trustee, or a business
associated with either, from doing business with or receiving renumeration from the trust
except for reasonable compensation for services as a trustee as provided for in new law.
Further prohibits a trustee from engaging in conduct or activity that would be prohibited
pursuant to existing law as though the trust were a governmental entity.
New law provides that notwithstanding the provisions of new law, the trustee of a special
charitable trust shall be authorized to delegate the performance of his duties to one or more
trustees, or to an officer, employee, or agent of the trust by resolution of the trustees without
requiring a power of attorney.
New law provides that the delegation of authority shall not relieve the trustee of any
responsibility imposed by law. Provides that the president or equivalent officer, or the
trustee, may delegate powers or duties if an officer is absent or for any other reason deemed
sufficient.
New law provides that the officer, employee, or agent is authorized to perform the delegated
duties of the special charitable trust as prescribed by the trustee, and shall be subject to a
court of competent jurisdiction on all matters relating to the performance of his duties.
New law provides that the trustee shall exercise reasonable care, skill, and caution in
selecting an officer, employee, or agent, and in establishing the scope and terms of the
delegation consistent with the purposes of the special charitable trust when delegating
performance of his duties authorized pursuant to new law. In the event the trustee discovers
a breach of duty, reasonable action under the circumstance shall be taken to remedy the
breach.
New law provides that in performing a delegated function, an officer, employee, or agent of
a special charitable trust shall have the same fiduciary duty as the delegating trustee to the
special charitable trust, act in the best interest of the special charitable trust and its
beneficiaries, and exercise due diligence in the performance of his duties within the scope
and terms of his delegation.
New law provides that the liability of trustees and officers of a special charitable trust shall
be as provided in new law (R.S. 9:2792.1.1).
New law provides that a trustee shall not be held liable under the provisions of new law if
he acted in good faith reliance on any of the following:
(1) A report made by a representative of the special charitable trust.
(2) A report made by an appraiser selected with reasonable care by the trustees.
(3) A financial statement or other record represented as accurate by the president or
officer in charge of the financial accounts or records of the special charitable trust.
(4) A written report by a certified public accountant fairly reflecting the financial
condition of the special charitable trust.
New law provides that nothing contained in new law shall derogate from the indemnification
authorized pursuant to new law (R.S. 9:2350).
New law provides that the trustees, officers, employees, or agents of a special charitable trust
shall be entitled to reasonable compensation as determined by the trustees for services
performed on behalf of the special charitable trust.
New law (R.S. 9:2349.1) provides that a special charitable trust shall comply with the
provisions of new law, including but not limited to, restrictions on influencing legislation and
participating in political campaign activity, and limitations of substantial activities promoting
propaganda.
New law provides that a special charitable trust shall not publish or distribute statements or
provide funding, directly or indirectly, relating to, supporting, or opposing a political
campaign regarding any candidate for public office or any campaign regarding a political
issue.
New law (R.S. 9:2350) provides that a special charitable trust may indemnify a party to any
action or proceeding, including any action by the special charitable trust, and as set forth in
existing law, in either of the following circumstances:
(a) The party is a past or present trustee, officer, employee, or agent of the special
charitable trust.
(b) The party is or was serving, at the request of the special charitable trust, as a trustee,
officer, employee, or agent of another nonprofit, business or foreign special
charitable trust, partnership, joint venture or other enterprise.
New law provides that the trustee, officer, employee, or agent shall be entitled to
indemnification of each of the following:
(a) Expenses, reasonable attorney fees, settlements and judgments, and fines.
New law requires that the amounts to be indemnified be reasonably incurred in connection
with the action or proceeding.
New law provisions on indemnification shall apply only if the party both:
(i) Acted in good faith and exercised reasonable care and skill in a manner he reasonably
believed to be in the best interests of the special charitable trust.
(ii) Had reasonable cause to believe his conduct was lawful.
New law provides that in a criminal action or proceeding by the special charitable trust or its
trustees, the indemnification shall be limited to expenses, attorney fees, settlements and
judgments, and the estimated cost of the litigation and shall be reasonably incurred in
connection with the defense of the action.
New law provides that the trustee shall not be entitled to indemnification if found by a court
of competent jurisdiction to be liable for negligence or willful misconduct in the performance
of his duty to the special charitable trust. Provides that the court may find based upon the
facts and circumstances that, notwithstanding the adjudication of liability, the trustee shall
be entitled to indemnification for reasonable expenses as determined by the court.
New law provides that a settlement or judgment, order, conviction, or plea of nolo
contendere shall not create a presumption that the person acted in bad faith and not in the
best interest of the special charitable trust, or, in a criminal action, had reasonable cause to
believe that his conduct was unlawful.
New law provides that a trustee, officer, employee, or agent of a special charitable trust who
has prevailed in any action or proceeding, or in defense of any claim shall be entitled to
indemnification of actual expenses, and reasonable attorney fees which he incurred.
New law provides that the indemnification pursuant to new law, unless ordered by the court,
shall be made by the special charitable trust only as authorized and upon a determination that
the person met the applicable standard. Provides that the determination shall be made by a
majority vote of a quorum consisting of trustees who were not parties to the action or
proceeding, or by independent legal counsel, if a quorum of trustees is not obtainable or if
directed by a quorum of disinterested trustees.
New law provides that the expenses incurred in defense of an action or proceeding may be
paid by the special charitable trust in advance of the final disposition if authorized by the
trustees in the manner provided in new law, upon receipt of an undertaking by or on behalf
of the trustee, officer, employee, or agent to repay such amount unless determined that he is
entitled to indemnification by the special charitable trust as authorized in new law.
New law provides that the indemnification provided by new law shall not be deemed
exclusive of any rights the person otherwise may be entitled by law, agreement, by-laws, or
authorization of disinterested trustees, both, acting in his official capacity or in another
capacity while holding office.
New law provides that the indemnification shall continue to a person who is no longer a
trustee, officer, employee, or agent and shall inure to the benefit of his heirs and legal
representative.
New law provides that a special charitable trust may procure liability insurance on behalf of
a past or present trustee, officer, employee, or agent of the special charitable trust, or a person
who is or was serving at the request of a special charitable trust as a trustee, officer,
employee, or agent of another nonprofit, business or foreign corporation, partnership, joint
venture or other enterprise, acting in a prudent manner in the performance of his duties,
notwithstanding the indemnification provided by a special charitable trust authorized under
the provisions of new law.
New law (R.S. 9:2350.1) provides that a special charitable trust may be subject to
indemnification, reimbursement claims, assumption of obligations, and liabilities of another
entity to incentivize donations or contributions to the special charitable trust. New law
provides that this provision shall be broadly construed.
New law (R.S. 9:2350.2) provides for application of other code provisions whenever the
provisions of new law are silent.
New law provides that the application of other code provisions shall not be applied in a
contradictory manner to new law, nor to invalidate a trust authorized pursuant to new law,
to adversely affect the tax-exempt status of a special charitable trust, nor to prevent any tax
deduction for contributions to the trust.
New law provides that notwithstanding any provision to the contrary, a special charitable
trust shall be subject to existing law provisions of the Uniform Prudent Management of
Institutional Funds Act.
New law provides that a special charitable trust shall be considered an "institution" as
defined in existing law and the trust assets shall not be considered funds "held for an
institution by a trustee that is not an institution" pursuant to existing law although the special
charitable trust has "individuals" as trustees.
New law provides that the trust may only be amended with court approval. The trust shall
not be amended to relieve a trustee of his fiduciary obligations or to waive a conflict of
interest or ethical rules.
New law (R.S. 9:2792.1.1) provides that a person who serves as a trustee or officer of a
special charitable trust qualified as a tax-exempt organization under federal law, and who is
compensated for such services shall not be individually liable for any act or omission
resulting in damage or injury, arising out of the exercise of his judgment in the formation and
implementation of policy while acting as a trustee or officer of the special charitable trust,
or arising out of the management of the affairs of the special charitable trust, provided he was
acting in good faith and within the scope of his official functions and duties, unless such
damage or injury was caused by his willful or wanton misconduct.
Effective May 23, 2024.
(Adds R.S. 9:2348-2350.2 and 2792.1.1)