AN ACT CONCERNING MATCHING FUNDS FOR DONATIONS TO THE ENDOWMENT FUNDS OF THE CONSTITUENT UNITS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsection (a) of section 10a-77a of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(a) (1) The Board of Trustees of the Community-Technical Colleges shall establish a permanent Endowment Fund for the Community-Technical College System to encourage donations from the private sector, with an incentive in the form of an endowment fund state grant, the net earnings on the principal of which are dedicated and made available to a regional community-technical college or the community-technical college system as a whole, for endowed professorships, scholarships and programmatic enhancements. The fund shall be administered by the board of trustees, or by a nonprofit entity entrusted for such purpose and qualified as a Section 501(c)(3) organization under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and preferably constituted and controlled independent of the state and board of trustees so as to qualify the interest on state bonds the proceeds of which have been granted for deposit in the endowment fund as excludable from taxation under such code and shall, in any event, be held in a trust fund separate and apart from all other funds and accounts of the state and the community-technical college system. There shall be deposited into the fund: (A) Endowment fund state grants; and (B) interest or other income earned on the investment of moneys in the endowment fund pending transfer of the principal of the fund for the purposes identified in this subdivision. Endowment fund eligible gifts made on behalf of a regional community-technical college or the system as a whole shall be deposited in a permanent endowment fund created for each regional community-technical college and the system as a whole in the appropriate foundation established pursuant to sections 4-37e and 4-37f. A portion of the endowment fund state grant and a portion of earnings on such grant, including capital appreciation, shall be transferred, annually, within thirty days of the receipt of the endowment fund state grant by the permanent Endowment Fund for the Community-Technical College System, to such a regional community-technical college endowment fund based on the ratio of the total amount of such gifts made to such regional community-technical college to the total amount of all such gifts made to all the regional community-technical colleges and the system as a whole, provided the provisions of section 4-37f are satisfied.

(2) (A) For each of the fiscal years ending June 30, 2000, to June 30, 2006, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b, shall deposit in the Endowment Fund for the Community-Technical College System a grant in an amount equal to half of the total amount of endowment fund eligible gifts received by or for the benefit of the community-technical college system as a whole and each regional community-technical college for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the board of trustees by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made.

(B) For each of the fiscal years ending June 30, 2007, to June 30, 2014, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b, shall deposit in the Endowment Fund for the Community-Technical College System a grant in an amount equal to one-quarter of the total amount of endowment fund eligible gifts, except as provided in this subdivision, received by or for the benefit of the community-technical college system as a whole and each regional community-technical college for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the board of trustees by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made. Endowment fund eligible gifts that meet the criteria set forth in this subdivision, made by donors during the period from January 1, 2005, to June 30, 2005, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received. Commitments by donors to make endowment fund eligible gifts for two or more years that meet the criteria set forth in this subdivision and that are made for the period prior to December 31, 2004, but ending before December 31, 2012, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received through the commitment.

(C) In any such fiscal year in which the total of the eligible gifts received by the community-technical colleges exceeds the endowment fund state grant maximum commitment for such fiscal year the amount in excess of such endowment fund state grant maximum commitment shall be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state grant maximum commitment. Any endowment fund eligible gifts that are not included in the total amount of endowment fund eligible gifts certified by the chairperson of the board of trustees pursuant to this subdivision may be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state matching grant commitment for such fiscal year.

(3) The Board of Trustees of the Community-Technical Colleges shall adopt, by October 1, 1997, guidelines with respect to (A) the solicitation of endowment fund eligible gifts from private donors, and (B) governing the acceptance of gifts made by a foundation established pursuant to sections 4-37e and 4-37f, to a community-technical college or its employees for reimbursement of expenditures or payment of expenditures on behalf of a community-technical college or its employees. Private donations shall not be construed to include proceeds of municipal grants.

Sec. 2. Subsection (a) of section 10a-99a of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(a) (1) The Board of Trustees of the Connecticut State University System shall establish a permanent Endowment Fund for the Connecticut State University System to encourage donations from the private sector, with an incentive in the form of an endowment fund state grant, the net earnings on the principal of which are dedicated and made available to a state university or the Connecticut State University system as a whole, for endowed professorships, scholarships and programmatic enhancements. The fund shall be administered by the board of trustees, or by a nonprofit entity entrusted for such purpose and qualified as a Section 501(c)(3) organization under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and preferably constituted and controlled independent of the state and university so as to qualify the interest on state bonds the proceeds of which have been granted for deposit in the endowment fund as excludable from federal taxation under such code and shall, in any event, be held in a trust fund separate and apart from all other funds and accounts of the state and university. There shall be deposited into the fund: (A) Endowment fund state grants; and (B) interest or other earnings from the investment of moneys in the endowment fund pending transfer of the principal of the fund for the purposes identified in this subdivision. Endowment fund eligible gifts made on behalf of a state university or the system as a whole shall be deposited in a permanent endowment fund created for each such state university and the system as a whole in the appropriate foundation established pursuant to sections 4-37e and 4-37f. A portion of the endowment fund state grant and a portion of earnings on such grant, including capital appreciation, shall be transferred, annually, within thirty days of the receipt of the endowment fund state grant by the permanent Endowment Fund for the Connecticut State University System, to such a state university endowment fund based on the ratio of the total amount of such gifts made to such state university to the total amount of all such gifts made to all the state universities and the system as a whole, provided the provisions of section 4-37f are satisfied.

(2) (A) For each of the fiscal years ending June 30, 2000, to June 30, 2006, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b, shall deposit in the Endowment Fund for the Connecticut State University System a grant in an amount equal to half of the total amount of endowment fund eligible gifts received by or for the benefit of the Connecticut State University system as a whole and each state university for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the board of trustees by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made.

(B) For each of the fiscal years ending June 30, 2007, to June 30, 2014, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b, shall deposit in the Endowment Fund for the Connecticut State University System a grant in an amount equal to one-quarter of the total amount of endowment fund eligible gifts, except as provided for in this subdivision, received by or for the benefit of the Connecticut State University system as a whole and each state university for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the board of trustees by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made. Endowment fund eligible gifts that meet the criteria set forth in this subdivision, made by donors during the period from January 1, 2005, to June 30, 2005, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received. Commitments by donors to make endowment fund eligible gifts for two or more years that meet the criteria set forth in this subdivision and that are made for the period prior to December 31, 2004, but ending before December 31, 2012, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received.

(C) In any such fiscal year in which the total of the eligible gifts received by the Connecticut State University system as a whole and each state university exceed the endowment fund state grant maximum commitment for such fiscal year the amount in excess of such endowment fund state grant maximum commitment shall be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state grant maximum commitment. Any endowment fund eligible gifts that are not included in the total amount of endowment fund eligible gifts certified by the chairperson of the board of trustees pursuant to this subdivision may be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state matching grant maximum commitment for such fiscal year.

(3) The Board of Trustees of the Connecticut State University System shall adopt, by October 1, 1997, guidelines with respect to (A) the solicitation of endowment fund eligible gifts from private donors, and (B) governing the acceptance of gifts made by a foundation established pursuant to sections 4-37e and 4-37f, to a state university or its employees for reimbursement of expenditures or payment of expenditures on behalf of a state university or its employees. Private donations shall not be construed to include proceeds of federal grants but may include proceeds of municipal grants.

Sec. 3. Subsection (b) of section 10a-109i of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(b) (1) A permanent Endowment Fund for The University of Connecticut shall be confirmed, established or created to encourage donations from the private sector, with an incentive in the form of an endowment fund state grant, which shall be deposited in the university or in a foundation operating pursuant to sections 4-37e and 4-37f consistent with the deposit of endowment fund eligible gifts, and the net earnings on the principal of which are to be dedicated and made available to the university for endowed professorships, scholarships and programmatic enhancements. The fund shall be administered by the board of trustees, or by a nonprofit entity entrusted for such purpose and created or to be created and qualified as a Section 501(c)(3) organization under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and preferably constituted and controlled independent of the state and university so as to qualify the interest on state bonds the proceeds of which have been granted for deposit in the endowment fund as excludable from federal taxation under such code and shall, in any event, be held in a trust fund with a bank or trust company separate and apart from all other funds and accounts of the state and university. There shall be deposited into the fund: (A) Endowment fund eligible gifts, (B) endowment fund state grants and (C) interest or other income earned on the investment of moneys in the endowment fund pending application or transfer or use of earnings on the principal thereof for the purposes identified in this subdivision (1) of subsection (b) of this section.

(2) (A) For each of the fiscal years ending June 30, 1999, to June 30, 2006, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b shall deposit in the endowment fund for the university a grant in an amount equal to half of the total amount of endowment fund eligible gifts, except as provided in this subparagraph, received by the university or for the benefit of the university for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the board of trustees by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made. For the fiscal years ending June 30, 1999, and June 30, 2000, the Department of Higher Education shall deposit in the endowment fund for the university grants in total amounts which shall not exceed the endowment fund state grant, as defined in subdivision (7) of section 10a-109c of the general statutes, revision of 1958, revised to January 1, 1997, and which shall be equal to the amounts certified by the chairperson of the board of trustees for each such fiscal year of endowment fund eligible gifts received by the university or for the benefit of the university and for which written commitments were made prior to July 1, 1997. For the fiscal year ending June 30, 1999, the funds required to be deposited in the endowment fund pursuant to this subparagraph shall be appropriated to the university for such purpose and not appropriated to the fund established pursuant to section 10a-8b.

(B) For each of the fiscal years ending June 30, 2007, to June 30, 2014, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b shall deposit in the endowment fund for the university a grant in an amount equal to one-quarter of the total amount of endowment fund eligible gifts, except as provided in this subdivision, received by the university or for the benefit of the university for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the board of trustees by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made. Endowment fund eligible gifts that meet the criteria set forth in this subdivision, made by donors during the period from January 1, 2005, to June 30, 2005, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received. Commitments by donors to make endowment fund eligible gifts for two or more years that meet the criteria set forth in this subdivision and that are made for the period prior to December 31, 2004, but ending before December 31, 2012, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received through the commitment.

(C) In any such fiscal year in which the eligible gifts received by the university exceed the endowment fund state grant maximum commitment for such fiscal year the amount in excess of such endowment fund state grant maximum commitment for such fiscal year, shall be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 1999, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state grant maximum commitment for such fiscal year. Any endowment fund eligible gifts that are not included in the total amount of endowment fund eligible gifts certified by the chairperson of the board of trustees pursuant to this subparagraph may be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state matching grant maximum commitment for such fiscal year.

(3) Moneys in the endowment fund shall be invested pursuant to subdivision (1) of subsection (b) of section 10a-109i, as amended, in such obligations as are eligible for investment of pension funds by the Treasurer provided any deposit in a bank or money market or other banking or money market arrangement, such as repurchase agreement, shall be fully secured unless otherwise insured by a federal corporation and the net earnings of the endowment fund shall be used solely for the purposes for which the fund has been established. There shall be no commingling of the investments of the endowment fund with any other fund or account of the state or the university.

(4) The board of trustees shall adopt guidelines with respect to the solicitation of endowment fund eligible gifts from private donors. Private donations shall not be construed to include proceeds of federal grants but may include proceeds of municipal grants.

Sec. 4. Subsection (a) of section 10a-143a of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

(a) (1) The Board for State Academic Awards shall establish a permanent Endowment Fund for Charter Oak State College to encourage donations from the private sector, with an incentive in the form of an endowment fund state grant, the net earnings on the principal of which are dedicated and made available to Charter Oak State College for scholarships and programmatic enhancements. The fund shall be administered by the Board for State Academic Awards or by a nonprofit entity entrusted for such purpose and qualified as a Section 501(c)(3) organization under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and preferably constituted and controlled independent of the state and college so as to qualify the interest on state bonds the proceeds of which have been granted for deposit in the endowment fund as excludable from federal taxation under such code and shall, in any event, be held in a trust fund separate and apart from all other funds and accounts of the state and the Board for State Academic Awards. There shall be deposited into the fund: (A) Endowment fund eligible gifts; (B) endowment fund state grants; and (C) interest or other earnings from the investment of moneys in the endowment fund pending transfer or use of earnings on the principal of the fund for the purposes identified in this subdivision.

(2) (A) For each of the fiscal years ending June 30, 2000, to June 30, 2006, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b, shall deposit in the Endowment Fund for Charter Oak State College a grant in an amount equal to half of the total amount of endowment fund eligible gifts received by or for the benefit of Charter Oak State College for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the Board for State Academic Awards by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made.

(B) For each of the fiscal years ending June 30, 2007, to June 30, 2014, inclusive, as part of the state contract with donors of endowment fund eligible gifts, the Department of Higher Education, in accordance with section 10a-8b, shall deposit in the Endowment Fund for Charter Oak State College a grant in an amount equal to one-quarter of the total amount of endowment fund eligible gifts, except as provided in this subdivision, received by or for the benefit of Charter Oak State College for the calendar year ending the December thirty-first preceding the commencement of such fiscal year, as certified by the chairperson of the Board for State Academic Awards by February fifteenth to (i) the Secretary of the Office of Policy and Management, (ii) the joint standing committee of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, and (iii) the Commissioner of Higher Education, provided such sums do not exceed the endowment fund state grant maximum commitment for the fiscal year in which the grant is made. Endowment fund eligible gifts that meet the criteria set forth in this subdivision, made by donors during the period from January 1, 2005, to June 30, 2005, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received. Commitments by donors to make endowment fund eligible gifts for two or more years that meet the criteria set forth in this subdivision and that are made for the period prior to December 31, 2004, but ending before December 31, 2012, shall continue to be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received through the commitment.

(C) In any such fiscal year in which the total of the eligible gifts received by Charter Oak State College exceeds the endowment fund state grant maximum commitment for such fiscal year the amount in excess of such endowment fund state grant maximum commitment shall be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state grant maximum commitment. Any endowment fund eligible gifts that are not included in the total amount of endowment fund eligible gifts certified by the chairperson of the Board for State Academic Awards pursuant to this subdivision may be carried forward and be eligible for a matching state grant in any succeeding fiscal year from the fiscal year ending June 30, 2000, to the fiscal year ending June 30, 2014, inclusive, subject to the endowment fund state matching grant maximum commitment for such fiscal year.

(3) The Board for State Academic Awards shall adopt, by October 1, 1997, guidelines with respect to (A) the solicitation of endowment fund eligible gifts from private donors, and (B) governing the acceptance of gifts made by a foundation established pursuant to sections 4-37e and 4-37f, to Charter Oak State College or its employees for reimbursement of expenditures or payment of expenditures on behalf of Charter Oak State College or its employees. Private donations shall not be construed to include proceeds of municipal grants.

Sec. 5. Section 10a-8c of the 2006 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2006):

[Notwithstanding] (a) Except as provided in subsection (b) of this section, notwithstanding the provisions of sections 10a-77a, as amended by this act, 10a-99a, as amended by this act, 10a-109c, 10a-109i, as amended by this act, and 10a-143a, as amended by this act, no funds shall be appropriated to the Department of Higher Education for grants pursuant to subdivision (2) of subsection (a) of section 10a-77a, as amended by this act, subdivision (2) of subsection (a) of section 10a-99a, as amended by this act, subdivision (2) of subsection (b) of section 10a-109i, as amended by this act, and subdivision (2) of subsection (a) of section 10a-143a, as amended by this act: (1) Until such time as the amount in the Budget Reserve Fund, established in section 4-30a, equals ten per cent of the net General Fund appropriations for the fiscal year in progress, (2) the amount of the grants appropriated shall be reduced proportionately if the amount available is less than the amount required for such grants, and (3) the amount of funds available to be appropriated during any fiscal year for such grants shall not exceed twenty-five million dollars.

(b) Endowment fund eligible gifts that meet the criteria set forth in subdivision (2) of subsection (a) of section 10a-77a, as amended by this act, subdivision (2) of subsection (a) of section 10a-99a, as amended by this act, subdivision (2) of subsection (b) of section 10a-109i, as amended by this act, and subdivision (2) of subsection (a) of section 10a-143a, as amended by this act, made by donors during the period from January 1, 2005, to June 30, 2005, shall be matched by the Department of Higher Education in an amount equal to one-half of the total amount of endowment fund eligible gifts received. The department shall transfer the amount of the match to the endowment funds of the constituent units in accordance with section 10a-8b.