II

105TH CONGRESS

1ST SESSION S. 194

To amend the Internal Revenue Code of 1986 to make permanent the section

170(e)(5) rules pertaining to gifts of publicly-traded stock to certain

private foundations, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 22, 1997

Mr. CHAFEE (for himself, Mr. MOYNIHAN, Mr. ABRAHAM, and Mr. KYL) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to make

permanent the section 170(e)(5) rules pertaining to gifts

of publicly-traded stock to certain private foundations,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 (a) IN GENERAL.—Section 170(e)(5) of the Internal

4 Revenue Code of 1986 (relating to special rule for con5 tributions of stock for which market quotations are readily

6 available) is amended by striking subparagraph (D).
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to contributions made after May

3 31, 1997.

4 SEC. 2. PRIVATE FOUNDATION GRANTS TO FOREIGN ORGA5 NIZATIONS TREATED AS PRIVATE FOUNDA6 TIONS.

7 (a) IN GENERAL.—Section 4942(g)(3) of the Internal

8 Revenue Code of 1986 (relating to certain contributions

9 to section 501(c)(3) organizations) is amended to read as

10 follows:

11 ‘‘(3) CERTAIN CONTRIBUTIONS TO SECTION

12 501(c)(3) ORGANIZATIONS.—For purposes of this sec13 tion, the term ‘qualifying distribution’ includes a

14 contribution to a section 501(c)(3) organization de15 scribed in clause (i) or (ii) of paragraph (1)(A) if—

16 ‘‘(A) not later than the close of the first

17 taxable year after its taxable year in which such

18 contribution is received—

19 ‘‘(i) such organization makes a dis20 tribution equal to the amount of such con21 tribution and such distribution is a qualify22 ing distribution (within the meaning of

23 paragraph (1) or (2), without regard to

24 this paragraph) which is treated under
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1 subsection (h) as a distribution out of cor2 pus (or would be so treated if such section

3 501(c)(3) organization were a private foun4 dation which is not an operating founda5 tion), or

6 ‘‘(ii) in the case of a grant to a for7 eign organization that is not controlled (di8 rectly or indirectly) by the foundation or 1

9 or more disqualified persons (as defined in

10 section 4946) with respect to the founda11 tion, such organization makes expenditures

12 equal to the amount of such contribution

13 to accomplish 1 or more purposes de14 scribed in section 170(c)(2)(B) and the

15 grantor foundation exercises expenditure

16 responsibility with respect to the grant (as

17 defined in section 4945(h)), and

18 ‘‘(B) the private foundation making the

19 contribution obtains adequate records or other

20 sufficient evidence from such organization

21 showing that the requirements of subparagraph

22 (A) are satisfied.’’

23 (b) EFFECTIVE DATE.—The amendment made by

24 subsection (a) shall apply to taxable years beginning after

25 December 31, 1996.
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1 SEC. 3. CHANGING DUE DATE FOR FIRST QUARTER ESTI2 MATED TAX PAYMENTS BY PRIVATE FOUNDA3 TIONS.

4 (a) IN GENERAL.—Section 6655(g)(3) of the Internal

5 Revenue Code of 1986 (relating to certain tax exempt or6 ganizations) is amended by inserting after subparagraph

7 (C) the following new subparagraph:

8 ‘‘(D) In the case of any private foundation,

9 subsection (c)(2) shall be applied by substitut10 ing ‘May 15’ for ‘April 15 ’. ’’

11 (b) EFFECTIVE DATE.—The amendment made by

12 subsection (a) shall apply to taxable years beginning after

13 December 31, 1996.

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