Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                        CHAPTER 303-S.F.No. 743 
           An act relating to corporations; allowing nonprofit 
          corporations to establish, maintain, and operate 
          common trust funds; proposing coding for new law in 
          Minnesota Statutes, chapter 317. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [317.175] [COMMON TRUST FUNDS.] 
    Subdivision 1.  [AUTHORIZATION.] A corporation organized 
under this chapter may establish, maintain, and operate common 
trust funds as provided in this section under the appropriate 
standard of investment applicable to it. 
    Subd. 2.  [COLLECTIVE INVESTMENTS.] The corporation may 
combine money and property belonging to trusts or funds in its 
care for the purposes of facilitating investments, providing 
diversification, and obtaining a reasonable income. 
    The participating contributory interest of the trusts or 
funds must be properly evidenced by appropriate bookkeeping 
entries showing on an annual basis the capital contribution of 
and the profit and income allocable to each trust or fund. 
    Not more than ten percent of the common trust fund may be 
invested in the obligations of any one corporation or 
organization, excepting deposits in savings banks, obligations 
of the United States and of the state of Minnesota and its 
subdivisions. 
    Nothing in this subdivision shall be construed to authorize 
the investment of funds of a trust in any manner not authorized 
by law. 
    Subd. 3.  [LIMITATIONS IN TRUST INSTRUMENT.] Nothing 
contained in this section shall be construed to authorize the 
corporation to invest assets of a trust or fund in a common 
trust fund contrary to any specific limitation or restriction 
contained in the trust instrument, nor to limit or restrict the 
authority conferred upon the corporation with respect to 
investments by a trust instrument. 
    Subd. 4.  [EFFECT OF GOOD FAITH MISTAKES.] No mistake made 
in good faith and in the exercise of due care, in connection 
with the administration of a common trust fund, shall be held to 
exceed any power granted to or violate any duty imposed upon the 
corporation, if, promptly after the discovery of the mistake, 
the corporation takes action as may be practicable under the 
circumstances to remedy the mistake. 
    Subd. 5.  [DETERMINATION OF INTERESTS.] (a) A nonprofit 
corporation may invest part or all of the assets of a trust or 
fund in a common trust fund authorized by this section by adding 
those assets to it, and by apportioning a participation in the 
commmon trust fund to the trust or fund in the proportion that 
the assets of the trust or fund bear to the aggregate value of 
all the assets of the common trust fund, including the added 
trust or fund. 
     (b) The withdrawal of a participation from the common trust 
fund shall be on the basis of its proportionate interest in the 
aggregate value of all the assets of the common trust fund at 
the time of the withdrawal.  The participating interest of any 
trust or fund in the common trust fund may from time to time be 
withdrawn, in whole or in part, by the corporation.  Upon 
withdrawals, the corporation may make distributions in cash, or 
ratably in kind, or partly in cash and partly in kind. 
     (c) Participations in common trust funds shall not be sold 
by the corporation to any other corporation or person.  This 
paragraph does not prevent a corporate trustee from investing 
the assets of a common trust fund in any collective investment 
fund established and maintained by it in accordance with law and 
to which the assets comprising a common trust fund are eligible 
contributions. 
     Subd. 6.  [AMORTIZATION OF PREMIUMS ON SECURITIES HELD.] If 
a bond or other obligation for the payment of money is acquired 
as an investment for any common trust fund at a cost in excess 
of the par or maturity value of it, the nonprofit corporation 
may, during but not beyond the period that the obligation is 
held as an investment in the fund, amortize the excess cost out 
of the income on the obligation, by deducting from each payment 
of income and adding to the principal an amount equal to the sum 
obtained by dividing the excess cost by the number of periodic 
payments of income to accrue on the obligation from the date of 
the acquisition until its maturity date. 
     Subd. 7.  [RECORDS; OWNERSHIP OF ASSETS.] The nonprofit 
corporation shall designate clearly upon its records the names 
of the trusts or funds on behalf of which the corporation, as 
fiduciary or otherwise, owns a participation in any common trust 
fund and the extent of the interest of the trust or fund.  No 
trust or fund shall be deemed to have individual ownership of 
any asset in the common trust fund, but shall be deemed to have 
a proportionate undivided interest in the common trust fund.  
The ownership of the individual assets comprising any common 
trust fund shall be solely in the nonprofit corporation as 
fiduciary or otherwise. 
     Sec. 2.  [EFFECTIVE DATE.] 
     Section 1 is effective the day following final enactment. 
    Approved June 5, 1985