Page:United States Statutes at Large Volume 120.djvu/1135

 120 STAT. 1104

PUBLIC LAW 109–280—AUG. 17, 2006 (2) CHARITABLE TRUSTS WHICH ARE TYPE III SUPPORTING ORGANIZATIONS.—Subsection (c) shall take effect— (A) in the case of trusts operated in connection with an organization described in paragraph (1) or (2) of section 509(a) of the Internal Revenue Code of 1986 on the date of the enactment of this Act, on the date that is one year after the date of the enactment of this Act, and (B) in the case of any other trust, on the date of the enactment of this Act.

SEC. 1242. EXCESS BENEFIT TRANSACTIONS INVOLVING SUPPORTING ORGANIZATIONS. 26 USC 4958.

VerDate 14-DEC-2004

10:20 Jul 12, 2007

(a) DISQUALIFIED PERSONS.—Paragraph (1) of section 4958(f), as amended by this Act, is amended by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F), respectively, and by adding after subparagraph (C) the following new subparagraph: ‘‘(D) any person who is described in subparagraph (A), (B), or (C) with respect to an organization described in section 509(a)(3) and organized and operated exclusively for the benefit of, to perform the functions of, or to carry out the purposes of the applicable tax-exempt organization.’’. (b) CERTAIN TRANSACTIONS TREATED AS EXCESS BENEFIT TRANSACTIONS.—Section 4958(c), as amended by this Act, is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: ‘‘(3) SPECIAL RULES FOR SUPPORTING ORGANIZATIONS.— ‘‘(A) IN GENERAL.—In the case of any organization described in section 509(a)(3)— ‘‘(i) the term ‘excess benefit transaction’ includes— ‘‘(I) any grant, loan, compensation, or other similar payment provided by such organization to a person described in subparagraph (B), and ‘‘(II) any loan provided by such organization to a disqualified person (other than an organization described in paragraph (1), (2), or (4) of section 509(a)), and ‘‘(ii) the term ‘excess benefit’ includes, with respect to any transaction described in clause (i), the amount of any such grant, loan, compensation, or other similar payment. ‘‘(B) PERSON DESCRIBED.—A person is described in this subparagraph if such person is— ‘‘(i) a substantial contributor to such organization, ‘‘(ii) a member of the family (determined under section 4958(f)(4)) of an individual described in clause (i), or ‘‘(iii) a 35-percent controlled entity (as defined in section 4958(f)(3) by substituting ‘persons described in clause (i) or (ii) of section 4958(c)(3)(B)’ for ‘persons described in subparagraph (A) or (B) of paragraph (1)’ in subparagraph (A)(i) thereof). ‘‘(C) SUBSTANTIAL CONTRIBUTOR.—For purposes of this paragraph— ‘‘(i) IN GENERAL.—The term ‘substantial contributor’ means any person who contributed or bequeathed an aggregate amount of more than $5,000 to the

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