Page:United States Statutes at Large Volume 82.djvu/311

 82 STAT. ]

PUBLIC LAW 90-364-JUNE 28, 1968

269

" (c) ADVERTISING IN A CONVENTION PROGRAM OF A NATIONAL POLITICAL CONVENTION.—Subsection (a) shall not apply to any amount

paid or incurred for advertising in a convention program of a political party distributed in connection with a convention held for the purpose of nominating candidates for the offices of President and Vice President of the United States, if the proceeds from such program are used solely to defray the costs of conducting such convention (or a subsequent convention of such party held for such purpose) and the amount paid or incurred for such advertising is reasonable in light of the business the taxpayer may expect to receive— "(1) directly as a result of such advertising, or " (2) as a result of the convention being held in an area in which the taxpayer has a principal place of business." (b) P>FECTIVE DATE.—The amendments made by subsection (a) shall apply with respect to amounts paid or incurred on or after January 1, 1968. SEC. 109. TAX-EXEMPT STATUS OF CERTAIN HOSPITAL SERVICE ORGANIZATIONS. (a) EXEMPTION FROM TAX.—Section 501 (relating to exemption from tax on corporations, etc.) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: ''(e) COOPERATIVE HOSPITAL SERVICE ORGANIZATIONS.—For purposes of this title, an organization shall be treated as an organization organized and operated exclusively for charitable purposes, if— " (1) such organ'zation is organized and operated solely— " (A) to perform, on a centralized basis, one or more of the following services which, if performed on its own behalf by a hospital which is an organization described in subsection (c) (3) and exempt from taxation under subsection (a), would constitute activities in exercising or performing the purpose or function constituting the basis for its exemption: data processing, purchasing, warehousing, billing and collection, food, industrial engineering, laboratory, printing, communications, record center, and personnel (including selection, testing, training, and education of personnel) services; and " (B) to perform such services solely for two or more hospitals each of which is— " (i) an organization described in subsection (c)(3) which is exempt from taxation under subsection (a), "(ii) a constituent part of an organization described in subsection (c)(3) which is exempt from taxation under subsection (a) and which, if organized and operated as a separate entity, would constitute an organization described in subsection (c)(3), or "(iii) owned and operated by the United States, a State, the District of Columbia, or a possession of the United States, or a political subdivision or an agency or instrumentality of any of the foregoing; "(2) such organization is organized and operated on a cooperative basis and allocates or pays, within 8i/^ months after the close of its taxable year, all net earnings to patrons on the basis of services performed for them; and

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