PUBLIC LAW 91-172-DEC. 30, 1969
"(iii) substantially all of the support (other than gross investment income as defined in section 509(e)) of which is normally received from the general public and from 5 or more exempt organizations which are not described in section 4946 (a)(1)(H) with respect to each other or the recipient foundation; not more than 25 percent of the support (other than gross investment income) of which is normally received from any one such exempt organization; and not more than half of the support of which is normally received from gross investment income. "(4) ALLOWABLE DISTRIBUTION PERIOD.—The t^rm 'allowable distribution period' means, with respect to any private foundation, the period beginning with the first day of the first taxable year following the taxable year in which the incorrect valuation (described in subsection (a)(2)) occurred and ending 90 days after the date of mailing of a notice of deficiency (with respect to the tax imposed by subsection (a)) under section 6212 extended " (A) any period in which a deficiency cannot be assessed under section 6213(a), and " (B) any other period which the Secretary or his delegate determines is reasonable and necessary to permit a distribution of undistributed income under this section. "(5) FUNCTIONALLY RELATED BUSINESS.—The term 'functionally related business' means— " (A) a trade or business which is not an unrelated trade or business (as defined in section 513), or " (B) an activity which is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which is related (aside from the need of the organization for income or funds or the use it makes of the profits derived) to the exempt purposes of the organization. "SEC. 4943. TAXES ON EXCESS BUSINESS HOLDINGS.
68A Stat. 770. 26 USC 6:212.
P o s t, pp. 541, 542.
" (a) INITIAL T A X. —
" (1) IMPOSITION.—There is hereby imposed on the excess business holdings of any private foundation in a business enterprise during any taxable year which ends during the taxable period a tax equal to 5 percent of the value of such holdings. " (2) SPECIAL RULES.—The tax imposed by paragraph (1) —
" (A) shall be imposed on the last day of the taxable year, but " (B) with respect to the private foundation's holdings in any business enterprise, shall be determined as of that day during the taxable year when the foundation's excess holdings in such enterprise were the greatest. "(b) ADDITIONAL T A X. — I n any case in which an initial tax is imposed under subsection (a) with respect to the holdings of a private foundation in any business enterprise, if, at the close of the correction period with respect to such holdings, the foundation still has excess business holdings in such enterprise, there is hereby imposed a tax equal to 200 percent of such excess business holdings. "(c) EXCESS BUSINESS HOLDINGS.—For purposes of this section— "(1) IN GENERAL.—The term 'excess business holdings' means, with respect to the holdings of any private foundation in any business enterprise, the amount of stock or other interest in the enterprise which the foundation would have to dispose of to a person other than a disqualified person in order for the remaining