Page:United States Statutes at Large Volume 120.djvu/1133

 120 STAT. 1102

26 USC 508 note.

PUBLIC LAW 109–280—AUG. 17, 2006

4966(d)(2)) and the manner in which such organization plans to operate such funds.’’. (2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to organizations applying for tax-exempt status after the date of the enactment of this Act.

PART 3—IMPROVED ACCOUNTABILITY OF SUPPORTING ORGANIZATIONS SEC. 1241. REQUIREMENTS FOR SUPPORTING ORGANIZATIONS. 26 USC 509.

VerDate 14-DEC-2004

10:20 Jul 12, 2007

(a) TYPES OF SUPPORTING ORGANIZATIONS.—Subparagraph (B) of section 509(a)(3) is amended to read as follows: ‘‘(B) is— ‘‘(i) operated, supervised, or controlled by one or more organizations described in paragraph (1) or (2), ‘‘(ii) supervised or controlled in connection with one or more such organizations, or ‘‘(iii) operated in connection with one or more such organizations, and’’. (b) REQUIREMENTS FOR SUPPORTING ORGANIZATIONS.—Section 509 (relating to private foundation defined) is amended by adding at the end the following new subsection: ‘‘(f) REQUIREMENTS FOR SUPPORTING ORGANIZATIONS.— ‘‘(1) TYPE III SUPPORTING ORGANIZATIONS.—For purposes of subsection (a)(3)(B)(iii), an organization shall not be considered to be operated in connection with any organization described in paragraph (1) or (2) of subsection (a) unless such organization meets the following requirements: ‘‘(A) RESPONSIVENESS.—For each taxable year beginning after the date of the enactment of this subsection, the organization provides to each supported organization such information as the Secretary may require to ensure that such organization is responsive to the needs or demands of the supported organization. ‘‘(B) FOREIGN SUPPORTED ORGANIZATIONS.— ‘‘(i) IN GENERAL.—The organization is not operated in connection with any supported organization that is not organized in the United States. ‘‘(ii) TRANSITION RULE FOR EXISTING ORGANIZATIONS.—If the organization is operated in connection with an organization that is not organized in the United States on the date of the enactment of this subsection, clause (i) shall not apply until the first day of the third taxable year of the organization beginning after the date of the enactment of this subsection. ‘‘(2) ORGANIZATIONS CONTROLLED BY DONORS.— ‘‘(A) IN GENERAL.—For purposes of subsection (a)(3)(B), an organization shall not be considered to be— ‘‘(i) operated, supervised, or controlled by any organization described in paragraph (1) or (2) of subsection (a), or ‘‘(ii) operated in connection with any organization described in paragraph (1) or (2) of subsection (a), if such organization accepts any gift or contribution from any person described in subparagraph (B). ‘‘(B) PERSON DESCRIBED.—A person is described in this subparagraph if, with respect to a supported organization

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