Bill Summary – FastDemocracy

OHIO LEGISLATIVE SERVICE COMMISSION
                                                 Office of Research                            Legislative Budget
www.lsc.ohio.gov                                   and Drafting                                      Office
                             S.B. 309                                 Bill Analysis
                      135th General Assembly
                                                                      Click here for S.B. 309’s Fiscal Note
    Version: As Introduced
    Primary Sponsor: Sen. Wilson
    Effective date:
    Holly Gilman, Attorney
                                                           SUMMARY
                      ▪ Permits a community foundation to be trustee of endowments and other charitable funds
                         received by public schools.
                      ▪ Permits a public school to appoint a community foundation to invest money in the
                         Education Foundation Fund created under continuing law.
                      ▪ Classifies a fund held for an institution by a community foundation trustee as an
                         “institutional fund.”
                                                  DETAILED ANALYSIS
Community foundation as trustee of educational funds
       The bill generally permits a school district board of education, governing authority of a
community school, or governing body of a STEM school to designate a community foundation as
trustee of any gift or endowment of intangible personal property made by grant, devise, or
bequest, or in any other manner, or any proceeds from any gift or endowment, including
charitable funds and institutional or endowment funds, provided the latter are related to the
school district or school.1
         Under the bill, a “community foundation” is a nonprofit, tax-exempt foundation that does
all of the following:
                      1. Supports a specific and defined geographical area by either or both of the following:
                         a. Facilitating and pooling donations or state and federal grants to address community
                            needs and support local nonprofit corporations and educational institutions; or
1     R.C. 3314.55, 3315.43, 3326.53, and 3328.53.
                                                                                                              December 9, 2024
Office of Research and Drafting                        LSC                            Legislative Budget Office
          b. Providing grants, including donor-advised funds, endowments, scholarships, field-of-
             interest funds, and giving circles;
      2. Publishes at least annually and circulates widely within its community an audited report
         of its fund balances, activities, and donors;
      3. Satisfies the federal requirements for community trusts.2
    Limitations on gifts or endowments
        The bill requires that when a district or school designates a community foundation to
invest funds, that designation remains subject to any conditions and limitations to which the
original gift or endowment was subject or to which the institutional or endowment fund was
subject.3
    Return of property
       In addition, the bill requires that the community foundation return any property it
receives from the district or school if the foundation: (1) no longer satisfies the bill’s
requirements, (2) is liquidated, or (3) substantially violates any condition, limitation, or
requirement imposed on the property.4
Education Foundation Fund – school districts
        The bill specifies that a community foundation may be the nonprofit, tax-exempt
foundation a school district board may appoint as trustee of an education foundation fund the
district board has created under continuing law. Under continuing law school districts may
establish an education foundation fund to invest any bequests, gifts, or endowments for which
the proceeds may be used for operating or capital costs of any existing or new and innovative
program designed to enhance or promote education within the district, such as scholarships for
students or teachers.5
Institutional funds
        The bill expands the definition of “institutional fund” to include a fund held for an
institution by a community foundation trustee under the bill.
        Under continuing law, an institutional fund is a fund that is held by an institution
exclusively for charitable purposes but does not include (1) program-related assets, (2) funds held
for an institution by a trustee that is not an institution, and (3) funds 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.6
2   R.C. 3315.43(A); see also 26 Code of Federal Regulations 1.170A-9(10) and (11).
3   R.C. 3314.55(C), 3315.43(C), 3326.53(C), and 3328.53(C).
4   R.C. 3314.55(D), 3315.43(D), 3326.53(D), and 3328.53(D).
5   R.C 3315.41; see also R.C. 3315.40, not in the bill.
6   R.C. 1715.51.
P a g e |2                                                                                            S.B. 309
                                                                                                As Introduced
Office of Research and Drafting         LSC                 Legislative Budget Office
                                      HISTORY
                             Action                       Date
 Introduced                                     8-28-24
ANSB0309IN-135/ar
P a g e |3                                                                  S.B. 309
                                                                      As Introduced
Statutes affected: 
As Introduced: 1715.51, 3315.10, 3315.41