- 88 -
was indistinguishable from the Government of Great Britain. Id.
at 290-291.
In State of Michigan v. United States, 40 F.3d 817 (6th Cir.
1994), the question was whether the investment income of the
Michigan Education Trust was exempt from Federal income tax under
section 115(i) which provided that "gross income does not include
income derived from any public utility or the exercise of any
essential governmental functions and accruing to a State or any
political subdivision thereof". The trust was a public "quasi-
corporation" established to help parents provide for their
children's college education by receiving and investing advance
payments. The trust had a board of directors which was
authorized to enter into contracts on behalf of the State; the
State treasurer was an ex officio member of the board whose
members were appointed by the governor and confirmed by the
Michigan senate; the trust was "within" the treasury department,
although it acted independently; assets of the trust were not
considered State money, common cash, or State revenue although
such assets could be pooled with pension funds and other
investments of the State and invested by State employees; the
Michigan auditor general was responsible for auditing the books
of the trust and the trust was required to submit annual reports
to the governor and the State legislature. Finding that the
provision of education was an essential State function, and after
analyzing all the facts and circumstances, the Court of Appeals
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