Page:United States Statutes at Large Volume 98 Part 1.djvu/828

 98 STAT. 780

Post, p. 784.

PUBLIC LAW 98-369—JULY 18, 1984 "(2) EXEMPT OPERATING FOUNDATION.—For purposes of this subsection, the term 'exempt operating foundation' means, with respect to any taxable year, any private foundation if— "(A) such foundation is an operating foundation (as defined in section 4942(j)(3)), "(B) such foundation has been publicly supported for at least 10 taxable years, "(C) at all times during the taxable year, the governing body of such foundation— "(i) consists of individuals at least 75 percent of whom are not disqualified individuals, and "(ii) is broadly representative of the general public, and "(D) at no time during the taxable year does such foundation have an officer who is a disqualified individual. "(3) DEFINITIONS.—For purposes of this subsection— "(A) PUBLICLY SUPPORTED.—A private foundation is publicly supported for a taxable year if it meets the requirements of section 170(b)(l)(A)(vi) or 509(a)(2) for such taxable year. "(B) DISQUAUFIED INDIVIDUAL.—The term 'disqualified individual' means, with respect to any private foundation, an individual who is— "(i) a substantial contributor to the foundation, "(ii) an owner of more than 20 percent of— "(I) the total combined voting power of a corporation, "(II) the profits interest of a partnership, or "(III) the beneficial interest of a trust or unincorporated enterprise, which is a substantial contributor to the foundation, or "(iii) a member of the family of any individual described in clause (i) or (ii). "(C) SUBSTANTIAL CONTRIBUTOR.—The term 'substantied contributor' means a person who is described in section 507(d)(2). "(D) FAMILY.—The term 'family' has the meaning given to such term by section 4946(d). "(E) CONSTRUCTIVE OWNERSHIP.—The rules of paragraphs (3) and (4) of section 4946(a) shall apply for purposes of subparagraph (B)(ii)." (b) REQUIREMENT OF EXPENDITURE RESPONSIBILITY NOT TO APPLY

26 USC 4945.

Ante, p. 779.

26 USC 4940.

"^ote.

TO CERTAIN OPERATING FOUNDATIONS.—Paragraph (4) of section 4945(d) (defining taxable expenditure) is amended to read as follows: "(4) as a grant to an organization unless— "(A) such organization is described in paragraph (1), (2), or (3) of section 509(a) or is an exempt operating foundation (as defined in section 4940(d)(2)), or "(B) the private foundation exercises expenditure responsibility with respect to such grant in accordance with subsection (h), or". (c) EFFECTIVE D A T E. — (1) FOR SUBSECTION

(a).—The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1984.

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