Maryland SB 502: University System of Maryland – Board of Regents and Quasi–Endowment Funds

Bill Text

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
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SENATE BILL 502
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By: Senators Smith and Miller
Introduced and read first time: January 29, 2018
Assigned to: Budget and Taxation

A BILL ENTITLED

AN ACT concerning 1

Higher Education – University System of Maryland – Quasi–Endowment Funds 2

FOR the purpose of authorizing the Board of Regents of the University System of Maryland 3
to transfer up to a certain amount of funds from the non–State supported fund 4
balance to a quasi–endowment fund; limiting the use of certain proceeds to certain 5
purposes; stating the intent of the General Assembly for the source of a certain 6
transfer; and generally relating to quasi–endowment funds of the University System 7
of Maryland. 8

BY repealing and reenacting, with amendments, 9
Article – Education 10
Section 12–104(e)(2) 11
Annotated Code of Maryland 12
(2014 Replacement Volume and 2017 Supplement) 13

Preamble 14

WHEREAS, In Chapter 266 of the Acts of 2013, the General Assembly authorized 15
the University System of Maryland to create a quasi–endowment fund to help fund–raising 16
and other related activities at the constituent institutions of the University System of 17
Maryland; and 18

WHEREAS, The General Assembly has encouraged its institutions of higher 19
education to raise supplemental funds from the private sector through innovative 20
fund–raising to support Maryland citizens; and 21

WHEREAS, In 2017 the A. James & Alice B. Clark Foundation made an 22
unprecedented investment of $219,000,000 to the State’s flagship institution, the 23
University of Maryland, College Park Campus, for the purpose of, among other initiatives, 24
increasing college access and affordability through need–based scholarships; and 25

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WHEREAS, This private donation was one of the largest ever given to a public 1
university in the nation’s history; and 2

WHEREAS, The Clark Challenge for Maryland Promise offers the opportunity to 3
create a scholarship fund of at least $100,000,000 with supplemental matching funds to 4
support Maryland students at the University of Maryland, College Park Campus and 5
students transferring from community college with financial need–based scholarships; 6
now, therefore, 7

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 8
That the Laws of Maryland read as follows: 9

Article – Education 10

12–104. 11

(e) (2) (i) Subject to subparagraphs (ii) [and], (iii), AND (IV) of this 12
paragraph, the Board may maintain and manage quasi–endowment funds. 13

(ii) The Board may only make a one–time transfer of no more than 14
$50,000,000 from the non–State supported fund balance held and invested by the State 15
Treasurer to the quasi–endowment fund. 16

(iii) 1. Subject to the limitation under subsubparagraph 2 of this 17
subparagraph, the Board may make only a one–time transfer of no more than $50,000,000 18
from the State–supported fund balance held and invested by the State Treasurer to the 19
quasi–endowment fund. 20

2. The Board may use the investment proceeds for facility 21
renewal projects relating only to capital facilities used for State–supported activities. 22

(IV) 1. SUBJECT TO THE LIMITATION UNDER 23
SUBSUBPARAGRAPH 2 OF THIS SUBPARAGRAPH, THE BOARD MAY MAKE ONLY A 24
ONE–TIME TRANSFER OF NO MORE THAN $25,000,000 FROM THE NON–STATE 25
SUPPORTED FUND BALANCE HELD AND INVESTED BY THE STATE TREASURER TO 26
THE QUASI–ENDOWMENT FUND. 27

2. THE BOARD MAY USE THE INVESTMENT PROCEEDS 28
ONLY TO MATCH A PRIVATELY FUNDED SCHOLARSHIP PROGRAM AT THE 29
UNIVERSITY OF MARYLAND, COLLEGE PARK CAMPUS. 30

SECTION 2. AND BE IT FURTHER ENACTED, That it is the intent of the General 31
Assembly that, in transferring the funds authorized to be transferred under this Act, the 32
Board of Regents of the University System of Maryland make a transfer from the fund 33
balance held on account of and attributable to the University of Maryland, College Park 34
Campus. 35

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SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1
1, 2018. 2