HEA 1256 Summary

• Allows counties that sold a county hospital before January 1, 2017, to establish a charitable nonprofit foundation to hold hospital sale proceeds in trust for county benefit, with ordinances adopted after June 30, 2018.

• Foundation board consists of five members: one county council member, one county executive member, two financial professionals (certified public accountant, financial adviser, banker, or investment manager), and the county treasurer who serves as chairperson.

• Restricts principal access with a 5-year lockup period; after year five, county council and executive may access up to 10% of the three-year average balance or $2,000,000 annually through a supermajority vote, with higher thresholds (up to 50% of principal) requiring two votes at least one year apart.

• Establishes annual spending limit of 5% of principal calculated January 1 each year and requires annual independent audits and quarterly board meetings with investment adviser updates.

• Authorizes municipal units to deposit capital asset sale proceeds into the foundation through interlocal agreements and prohibits the Department of Local Government Finance from reducing property tax levies based on foundation deposits or expenditures.