SECTION 1. EXCLUSION FROM UNRELATED BUSINESS TAXABLE INCOME FOR CERTAIN 
              SPONSORSHIP PAYMENTS.

    (a) In General.--Section 513 of the Internal Revenue Code of 1986 
(relating to unrelated business taxable income) is amended by adding at 
the end thereof the following new subsection:
    ``(i) Treatment of Certain Sponsorship Payments.--
            ``(1) In general.--The term `unrelated trade or business' 
        does not include the activity of soliciting and receiving 
        qualified sponsorship payments with respect to any qualified 
        public event.
            ``(2) Qualified sponsorship payments.--For purposes of this 
        subsection, the term `qualified sponsorship payment' means any 
        payment by any person engaged in a trade or business with 
        respect to which there is no arrangement or expectation that 
        such person will receive any substantial return benefit other 
        than--
                    ``(A) the use of the name or logo of such person's 
                trade or business in connection with any qualified 
                public event under arrangements (including advertising) 
                in connection with such event which acknowledge such 
                person's sponsorship or promote such person's products 
                or services, or
                    ``(B) the furnishing of facilities, services, or 
                other privileges in connection with such event to 
                individuals designated by such person.
            ``(3) Qualified public event.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified public event' means any event 
                conducted by an organization described in paragraph 
                (3), (4), (5), or (6) of section 501(c) or by an 
                organization described in section 511(a)(2)(B) if such 
                event is--
                            ``(i) a public event the conduct of which 
                        is substantially 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 conducting 
                        such event, or
                            ``(ii) any public event not described in 
                        clause (i) but only if such event is the only 
                        event of that type conducted by such 
                        organization during a calendar year and such 
                        event does not exceed 30 consecutive days.
                An event shall be treated as a qualified public event 
                with respect to all organizations referred to in the 
                preceding sentence which receive sponsorship payments 
                with respect to such event if such event is a qualified 
                public event with respect to 1 of such organizations; 
                except that a payment shall be treated as not being 
                from an unrelated trade or business by reason of this 
                sentence only to the extent that such payment is used 
                to meet the expenses of such event or for the benefit 
                of the organization with respect to which such event is 
                a qualified public event (determined without regard to 
                this sentence).
                    ``(B) Exempt purpose.--For purposes of subparagraph 
                (A), the term `exempt purpose' means any purpose or 
                function constituting the basis for the organization's 
                exemption under section 501 (or, in the case of an 
                organization described in section 511(a)(2)(B), the 
                exercise or performance of any purpose or function 
                described in section 501(c)(3)).
            ``(4) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to prevent the avoidance of the 
        purposes of this subsection through the use of entities under 
        common control.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to events conducted after December 31, 1992.

SEC. 2. TREATMENT OF CERTAIN AMOUNTS RECEIVED BY OLYMPIC ORGANIZATIONS.

    In the case of a qualified amateur sports organization described in 
section 501(j)(2) of the Internal Revenue Code of 1986 or an 
organization which would be so described but for the cultural events it 
organizes in connection with national or international amateur sports 
competitions--
            (1) for purposes of section 512(b) of such Code, the term 
        ``royalty'' includes any income received (directly or 
        indirectly) by such organization if a substantial part of the 
        consideration for such income is the right to use trademarks, 
        designations, or similar properties indicating a connection 
        with the Olympic Games to be conducted in 1996 or related 
        events or the participation of the United States Olympic Team 
        at such Games or events, and
            (2) nothing in section 514 or 512(b) of such Code shall be 
        construed as treating any amount treated as royalty under 
        paragraph (1) as an item of income from an unrelated trade or 
        business.
Amends the Internal Revenue Code to declare that unrelated trade or business does not include the activity of soliciting and receiving qualified sponsorship payments (payments received by tax-exempt organizations from corporations and other sponsors in connection with certain athletic and other public events) for purposes of the tax on unrelated business income of charitable, etc., organizations. 
Excludes royalties received by certain tax-exempt olympic organizations for the 1996 Olympics as income from an unrelated trade or business.
To amend the Internal Revenue Code of 1986 to provide an exclusion from unrelated business taxable income for certain sponsorship payments.