The bill amends the "Uniform Prudent Management of Institutional Funds Act" by introducing new provisions regarding the appropriation and accumulation of endowment funds by institutions. It emphasizes that institutions must act in good faith and exercise prudence when determining the amount to appropriate for expenditure, considering various factors such as the duration of the fund, the institution's purposes, economic conditions, and investment policies. Additionally, it clarifies that unless explicitly stated otherwise in the gift instrument, assets in an endowment fund are considered donor-restricted until appropriated.

A significant addition to the law is the establishment of a rebuttable presumption of imprudence if an institution appropriates more than 8% of the fair market value of an endowment fund in any given year. This value must be calculated based on market values determined at least quarterly and averaged over the preceding three years. The bill also specifies that this presumption does not apply to appropriations permitted under other laws or by the gift instrument, nor does it create a presumption of prudence for amounts equal to or less than 8%.

Statutes affected:
House Introduced Bill: 451.924