The Ohio House of Representatives’ Higher Education Committee recently rejected proposed language in Senate Bill 135¹ that would have amended Ohio’s version of the Uniform Prudent Management of Institutional Funds Act “UPMIFA”, located at ORC Ann. § 1715.51–1715.59. The version passed by the Senate and introduced in the House would have required a donor (or their estate, surviving spouse or designee) to first notify the attorney general of any violation of the donor’s endowment agreement by a state higher education institution.²³⁴ If the attorney general did not respond within 180 days, the donor would have standing to file a complaint to enforce the terms of agreement, as long as the complaint was brought within 6 years after discovering the violation. A donor’s complaint could also seek to transfer the fund to a different charity, although a donor would not be allowed to seek damages on their own behalf.

The proposed language also would have revised the annual spending safe-harbor provisions. Under the current law, a state higher-education institution’s 5% or less spending increase year-over-year creates an irrebuttable presumption of prudent management. The proposed — but rejected — language would have created a rebuttable presumption of imprudent management for a spending increase of greater than 7%.

The legislature’s rejection of the proposed expansion of UPMIFA’s standing requirements continues to give the attorney general exclusive standing to protect and monitor institutional funds and helps protect state universities from litigation.

FOOTNOTES

1. https://ohiohouse.gov/legislation/134/sb135; https://ohiosenate.gov/legislation/GA134-SB-135
2. S.B. 135, Synopsis of House Committee Amendments (Apr. 6, 2022), https://www.legislature.ohio.gov/download?key=18887
3. S.B. 135, As Passed by the Senate, https://search-prod.lis.state.oh.us/solarapi/v1/general_assembly_134/bills/sb135/PS/02/sb135_02_PS?format=pdf
4. Anna Staver, From $2,000 Grants to Free Speech: Ohio Passes Sweeping Higher Education Reform Bill, Columbus Dispatch (Apr. 5, 2022, 10:00 p.m.), https://www.dispatch.com/story/news/2022/04/06/grants-free-speech-new-degrees-big-education-bill-set-vote-ohio-wednesday/9473682002