Page:United States Statutes at Large Volume 100 Part 3.djvu/960

 100 STAT. 2768

PUBLIC LAW 99-514—OCT. 22, 1986

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to activities in taxable years beginning after the date of the enactment of this Act. SEC. 1603. TAX EXEMPTION FOR CERTAIN TITLE-HOLDING COMPANIES.

(a) IN GENERAL.—Section 501(c) (relating to the list of exempt organizations) is amended by adding at the end thereof the following new paragraph: "(25)(A) Any corporation or trust which— "(i) has no more than 35 shareholders or beneficiaries, "(ii) has only 1 class of stock or beneficial interest, and "(iii) is organized for the exclusive purposes of— "(I) acquiring real property and holding title to, and collecting income from, such property, and c "(II) remitting the entire amount of income from fic yi such property (less expenses) to 1 or more organizations described in subparagraph (C) which are shareholders of such corporation or beneficiaries of such trust. "(B) A corporation or trust shall be described in subparagraph (A) without regard to whether the corporation or trust is organized by 1 or more organizations described in subparagraph (C). "(C) An organization is described in this subparagraph if such organization is— "(i) a qualified pension, profit sharing, or stock bonus plan that meets the requirements of section 401(a), "(ii) a governmental plan (within the meaning of section 9f!r 414(d)), "(iii) the United States, any State or political subdivision fk5 thereof, or any agency or instrumentality of any of the foregoing, "(iv) any organization described in paragraph (3), or "(v) any organization described in this paragraph. "(D) A corporation or trust described in this paragraph must permit its shareholders or beneficiaries— "(i) to dismiss the corporation's or trust's investment adviser, following reasonable notice, upon a vote of the shareholders or beneficiaries holding a majority of interest in the corporation or trust, and i' "(ii) to terminate their interest in the corporation or trust by either, or both, of the following alternatives, as deter„^^, mined by the corporation or trust: '*" "(I) by selling or exchanging their stock in the corporation or interest in the trust (subject to any Federal f ^ or State securities law) to any organization described in subparagraph (C) so long as the sale or exchange does not increase the number of shareholders or beneficiaries in such corporation or trust above 35, or . -,. -. "(II) by having their stock or interest redeemed by the corporation or trust after the shareholder or bener*' '!> ficiary has provided 90 days notice to such corporation or trust." (b) CLERICAL AMENDMENT.—Subparagraph (C) of section 514(c)(9) (relating to real property acquired by a qualified organization) is amended— (1) by striking out "or" at the end of clause (i), (2) by striking out the period following clause (ii) and inserting in lieu thereof "; or", and

�