SENATE BILL NO. 147 January 27, 1999, Introduced by Senators GAST, MC MANUS, STILLE and VAN REGENMORTER and referred to the Committee on Appropriations. A bill to denominate, and prescribe certain aspects of, public interest trusts; to prescribe the manner of appropriating public interest trust money; and to prescribe powers and duties of certain state officers and employees. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1. (1) This act shall be known and may be cited as the 2 "public interest trusts act". 3 (2) As used in this act: 4 (a) "Board" means a public interest trust board of 5 directors. 6 (b) "Budget act" means the management and budget act, 1984 7 PA 431, MCL 18.1101 to 18.1594. 8 (c) "Person" means an individual, partnership, corporation, 9 association, governmental entity, or other legal entity. 00001'99 GWH 2 1 (d) "Proceeds from a lawsuit settlement" means that term as 2 described in section 33(2) and (3) of 1846 RS 12, MCL 14.33. 3 (e) "Public interest trust" means a trust created and 4 described by section 2. 5 (f) "State operating fund" means that term as defined and 6 used in the budget act. 7 Sec. 2. (1) A public interest trust is created when money 8 is held or acquired in a manner described by 1 or more of the 9 following: 10 (a) Money held by a legal entity that is established as a 11 trust by agreement between this state and another person, which 12 agreement partially or completely resolves civil or criminal 13 litigation involving the person and the state, or partially or 14 completely resolves an issue regarding the person's compliance 15 with a federal, state, or local law or regulation. 16 (b) Money held by an entity whose bylaws or articles of 17 incorporation include a provision that 1 or more of the legal 18 entity's governing positions are held by an official of this 19 state, ex officio and representing the state's interests. 20 (c) Money that is proceeds from a lawsuit settlement. 21 (2) The state treasurer shall place the money of each public 22 interest trust in a discrete account, each of which the state 23 treasurer shall account for separately and each of which shall be 24 named "____________________ public interest trust". 25 Sec. 3. (1) The governor shall appoint a separate board of 26 directors for each public interest trust, with the advice and 27 consent of the senate. 00001'99 3 1 (2) The agreement, bylaws or articles of incorporation, or 2 lawsuit settlement that results in the creation of the public 3 interest trust may specify its board's number and terms. If the 4 agreement, bylaws or articles of incorporation, or lawsuit set- 5 tlement that results in the creation of the public interest trust 6 does not include these provisions, a board shall have 7 members, 7 each of whom has a 2-year term, except that 4 of the initially 8 appointed members have a 3-year term. 9 (3) In consultation with the board, the state treasurer 10 shall direct the investment of a public interest trust and shall 11 credit interest and earnings of the trust to the trust. For the 12 purpose of investment, the state treasurer may combine public 13 interest trust money with the other public interest trust money 14 or other state money. 15 Sec. 4. (1) Public interest trust money shall not be 16 expended except by appropriation as provided in this act or, if 17 the board so determines, under the budget act. If the agreement, 18 bylaws or articles of incorporation, or lawsuit settlement that 19 results in the creation of a public interest trust specifies that 20 money in the public interest trust shall be expended only for a 21 specific purpose, the money shall only be appropriated for that 22 purpose. 23 (2) As determined by the board, all or a portion of the 24 money from a public interest trust may be expended under this act 25 or all or a portion may be expended under the budget act, or 26 both. For the purpose of appropriations under the budget act, a 27 public interest trust is a state operating fund. 00001'99 4 1 Sec. 5. (1) If the board decides to propose appropriation 2 of public interest trust money under this act, the board shall 3 submit to the legislature in January the proposed project or 4 projects, accompanied by the cost for each project, for which the 5 board determines that the public interest trust money should be 6 expended. The board may prioritize the projects and may include 7 an explanation of the reasons for the priorities. The legisla- 8 ture shall approve or disapprove by law 1 or more of the board's 9 proposed projects. 10 (2) If the board determines that public interest trust money 11 is to be expended under the budget act, the board shall notify 12 the state treasurer who shall transfer the money to be expended 13 under the budget act's appropriation process to the state 14 treasury. 15 (3) Whether expended under this act, the budget act, or 16 both, the total recommendations for expenditures from a public 17 interest trust shall not exceed the estimated beginning balance 18 of the trust plus the trust's estimated revenue. 19 Sec. 6. (1) This act applies to a public interest trust 20 that is created before, on, or after the effective date of this 21 act. 22 (2) A public interest trust is subject to both of the 23 following: 24 (a) The open meetings act, 1976 PA 267, MCL 15.261 to 25 15.275. 26 (b) Audit by the auditor general or the department of 27 treasury, or both. 00001'99 Final page. GWH