Minnesota Cities Magazine
More from Sep-Oct 2016 issue

Letter of the Law: Got Extra Stuff? Donating It May Now Be an Option

By Chris Smith

Do you have some equipment at your city that—for whatever reason—you can no longer use? Maybe you’ve considered donating that stuff to a worthy cause, but you can’t because state law doesn’t allow it. Well now, thanks to a new state law, you can donate certain items to certain organizations.

In 2016, the Minnesota LegislatureFirefighters' turnout gear hanging on hooks passed a new law (2016 Minnesota Session Laws, Chapter 87) authorizing certain donations. The legislation provides that a “local government,” including any city, may donate “surplus equipment” to a “nonprofit organization.” The new law became effective Aug. 1, 2016.

Definitions in the law
The law defines “surplus equipment” as “equipment used by a local government public works department, and cellular phones and emergency medical and firefighting equipment that is no longer needed by the local government because it does not meet industry standards for emergency medical services, police, or fire departments, or has minimal or no resale value.”

A “nonprofit organization” is defined as “an organization formed under section 501©(3) of the Internal Revenue Code.” This limitation will prevent you from donating to some nonprofit organizations.

However, it might be possible that a qualified nonprofit organization could serve as an intermediary for another nonprofit organization. For example, donation to an intermediary organization might allow a city to donate outdated firefighting equipment to a foreign city that could use the equipment.

Policy required
Before surplus equipment can be donated, a city “must adopt a policy on how it will determine what equipment is surplus eligible for donation and how it will determine which nonprofit organizations may receive donations.” In addition, the policy “must address the obligations of the local government to disclose to the nonprofit that the surplus equipment may be defective and cannot be relied upon for safety purposes.” The League has drafted a model policy to help cities comply with the policy adoption requirement. You can download the model policy at www.lmc.org/donation.

The policy helps you identify and determine surplus equipment that will be eligible for donation. While a city is under no obligation to donate surplus equipment, the new statute gives you another tool for donating equipment to a wide variety of nonprofit organizations. As part of the policy, your city may limit the types of nonprofit organizations you will make donations to.

Additional suggestions for a policy
In developing a policy, you need to think about how you will let the world know that you have surplus equipment available. While there is no duty to advertise under the law, the model policy includes a requirement to advertise surplus equipment on your city website.

The model policy also includes a Surplus Equipment Form to be filled out by any nonprofit organization requesting a donation. While there is no requirement in the law that nonprofit organizations apply for surplus equipment, the idea is that an application promotes transparency in the donation process by allowing all eligible organizations to request a donation.

As part of the Surplus Equipment Form, you can also provide specific notice, as required by the law, that the surplus equipment may be defective and cannot be relied upon for safety purposes. By signing the Surplus Equipment Form, the nonprofit organization acknowledges the city’s conditions and that it is accepting the surplus equipment “as is.”

By signing the form, the nonprofit organization also acknowledges that the city cannot be held liable for any damages related to the donated surplus equipment. A city might also think about requiring a more formal contract between the parties to limit the city’s obligations.

The provisions of the model policy are recommendations. You need to carefully consider your city’s own circumstances before adopting a donation policy. In particular, you may want to impose additional requirements or restrictions on the types of nonprofit organizations that are eligible for donations, how or whether surplus equipment will be advertised, and how the city will determine which nonprofit organizations will receive donations.

One more thing
The new law also adds a new municipal tort immunity to Minnesota Statues, section 466.03. Municipalities, including cities, are immune from liability for any tort claim “resulting from the use of surplus equipment donated by the municipality to a nonprofit organization under section 471.3459.” Keep in mind, though, that immunity does not apply if “the claim is a direct result of fraud or intentional misrepresentation.”

Chris Smith is a risk management attorney with the League of Minnesota Cities. Contact: csmith@lmc.org or (651) 281-1269.

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