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Introduced Version - Originating in Committee Senate Bill 777 History

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Key: Green = existing Code. Red = new code to be enacted
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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.)
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