PUBLIC LAW 109–280—AUG. 17, 2006
120 STAT. 1103
of an organization described in subparagraph (A), such person is— ‘‘(i) a person (other than an organization described in paragraph (1), (2), or (4) of section 509(a)) who directly or indirectly controls, either alone or together with persons described in clauses (ii) and (iii), the governing body of such supported 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 509(f)(2)(B)’ for ‘persons described in subparagraph (A) or (B) of paragraph (1)’ in subparagraph (A)(i) thereof). ‘‘(3) SUPPORTED ORGANIZATION.—For purposes of this subsection, the term ‘supported organization’ means, with respect to an organization described in subsection (a)(3), an organization described in paragraph (1) or (2) of subsection (a)— ‘‘(A) for whose benefit the organization described in subsection (a)(3) is organized and operated, or ‘‘(B) with respect to which the organization performs the functions of, or carries out the purposes of.’’. (c) CHARITABLE TRUSTS WHICH ARE TYPE III SUPPORTING ORGANIZATIONS.—For purposes of section 509(a)(3)(B)(iii) of the Internal Revenue Code of 1986, an organization which is a trust shall not be considered to be operated in connection with any organization described in paragraph (1) or (2) of section 509(a) of such Code solely because— (1) it is a charitable trust under State law, (2) the supported organization (as defined in section 509(f)(3) of such Code) is a beneficiary of such trust, and (3) the supported organization (as so defined) has the power to enforce the trust and compel an accounting. (d) PAYOUT REQUIREMENTS FOR TYPE III SUPPORTING ORGANIZATIONS.— (1) IN GENERAL.—The Secretary of the Treasury shall promulgate new regulations under section 509 of the Internal Revenue Code of 1986 on payments required by type III supporting organizations which are not functionally integrated type III supporting organizations. Such regulations shall require such organizations to make distributions of a percentage of either income or assets to supported organizations (as defined in section 509(f)(3) of such Code) in order to ensure that a significant amount is paid to such organizations. (2) TYPE III SUPPORTING ORGANIZATION; FUNCTIONALLY INTEGRATED TYPE III SUPPORTING ORGANIZATION.—For purposes of paragraph (1), the terms ‘‘type III supporting organization’’ and ‘‘functionally integrated type III supporting organization’’ have the meanings given such terms under subparagraphs (A) and (B) section 4943(f)(5) of the Internal Revenue Code of 1986 (as added by this Act), respectively. (e) EFFECTIVE DATES.— (1) IN GENERAL.—The amendments made by subsections (a) and (b) shall take effect on the date of the enactment of this Act.
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26 USC 509 note.
26 USC 509 note. Regulations.
26 USC 509 note.
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