(b) (1) The public institutions of higher education are encouraged to
promote private fundraising by strengthening institutional development activities
and by maintaining relationships with affiliated foundations.

(2) Affiliated foundations that are independently established for this
purpose shall [operate subject to policies adopted by the governing boards and] BE
approved for form and legal sufficiency by the Attorney General.

(3) THE PRESIDENTS OF THE UNIVERSITY SYSTEM OF MARYLAND
CONSTITUENT INSTITUTIONS MAY ESTABLISH CAMPUS-BASED FOUNDATIONS. EACH
FOUNDATION NEED NOT BE APPROVED BY THE BOARD OF REGENTS OF THE
UNIVERSITY SYSTEM OF MARYLAND BUT SHALL OPERATE SUBJECT TO POLICIES
ADOPTED BY THE BOARD OF REGENTS OF THE UNIVERSITY SYSTEM OF MARYLAND
IN CONSULTATION WITH THE PRESIDENTS OF THE UNIVERSITY SYSTEM OF
MARYLAND CONSTITUENT INSTITUTIONS.

(4) AN AFFILIATED FOUNDATION ESTABLISHED AND OPERATED UNDER
THIS SUBSECTION MAY NOT BE CONSIDERED AN AGENCY OR INSTRUMENTALITY OF
THE STATE OR A UNIT OF THE EXECUTIVE BRANCH FOR ANY PURPOSE.

(5) A FINANCIAL OBLIGATION OR LIABILITY OF AN AFFILIATED
FOUNDATION ESTABLISHED AND OPERATED UNDER THIS SUBSECTION MAY NOT BE
CONSIDERED A DEBT OR AN OBLIGATION OF THE STATE OR THE UNIVERSITY
SYSTEM OF MARYLAND.

[(3)](4) (6) Sections 15-501 through 15-504 of the State Government
Article do not bar an official or employee of a public institution of higher education
from becoming a director, official, or employee of an independent foundation
organized to foster fundraising and provide related services for the benefit of the
institution.

[(4)] (6) (7) No funds shall be accepted from an affiliated foundation
by a public institution of postsecondary education unless the fiscal affairs of the
affiliated foundation are audited annually by an independent certified public
accountant,

SECTION 2. AND BE IT FURTHER ENACTED, That the Board of Regents of
the University System of Maryland in consultation with the presidents of the
University System of Maryland constituent institutions shall report to the General
Assembly on or before September 1, 1999, in accordance with Section 2-1246 of the
State Government Article, on a plan to transfer to any foundation established under
this Act the assets held on behalf of any University System of Maryland constituent
institution.

SECTION 3. 2. AND BE IT FURTHER ENACTED, That this Act shall take
effect July 1, 1999.