II 

111TH CONGRESS 

2D SESSION S. 3453 

To provide an exception from the payout requirements established for certain 

section 501(c)(3) type III supporting organizations under section 1241(d) 

of the Pension Protection Act of 2006. 

IN THE SENATE OF THE UNITED STATES 

MAY 28 (legislative day, MAY 26), 2010 

Mr. NELSON of Florida (for himself, Mr. CARPER, and Mr. CHAMBLISS) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To provide an exception from the payout requirements established for certain section 501(c)(3) type III supporting 

organizations under section 1241(d) of the Pension Protection Act of 2006. 

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

3 SECTION 1. EXCEPTION FROM PAYOUT REQUIREMENTS 

4 FOR TYPE III SUPPORTING ORGANIZATIONS. 

5 (a) IN GENERAL.—Section 1241(d) of the Pension 

6 Protection Act of 2006 (26 U.S.C. 509 note) is amended 

7 by redesignating paragraph (2) as paragraph (3) and by 

8 inserting after paragraph (1) the following new paragraph: 

mstockstill on DSKH9S0YB1PROD with BILLS

2 

•S 3453 IS

1 ‘‘(2) EXCEPTION FOR CERTAIN EXISTING ORGA2 NIZATIONS.— 

3 ‘‘(A) IN GENERAL.—The regulations under 

4 paragraph (1) shall not apply to any type III 

5 supporting organization described in subpara6 graph (B). 

7 ‘‘(B) APPLICATION.—A type III sup8 porting organization is described in this sub9 paragraph if— 

10 ‘‘(i) the organization was classified as 

11 an organization described in section 

12 509(a)(3) of the Internal Revenue Code of 

13 1986 before August 17, 2006, 

14 ‘‘(ii) no substantial contributor (with15 in the meaning of section 4958(c)(3)(C) of 

16 such Code) to the organization was alive 

17 on August 17, 2006, 

18 ‘‘(iii) no family member (within the 

19 meaning of section 4958(f)(4) of such 

20 Code) of any substantial contributor is an 

21 organization manager (as defined in sec22 tion 4958(f)(2) of such Code) with respect 

23 to the organization or is a borrower or les24 see of property from the organization, and 

25 ‘‘(iv) either— 

mstockstill on DSKH9S0YB1PROD with BILLS

3 

•S 3453 IS

1 ‘‘(I) the organization has not ac2 cepted any contribution from a sub3 stantial contributor after December 

4 31, 1970, other than by operation of 

5 the creator’s will or other gift instru6 ment that was executed before De7 cember 31, 1970, or 

8 ‘‘(II) the organization normally 

9 distributes each year for its exempt 

10 purposes an amount not less than 85 

11 percent of the organization’s adjusted 

12 net income (as defined in section 

13 4942(f) of such Code) for the imme14 diately preceding year and holds 30 

15 percent or more of the reasonably es16 timated value of its total assets, other 

17 than assets used or held for use di18 rectly in carrying out one or more 

19 purposes described in section 

20 170(c)(2)(B), in the form of assets for 

21 which market quotations are not read22 ily available but which normally 

23 produce gross investment income (as 

24 defined in section 4940(c)(2) of such 

25 Code).’’. 

mstockstill on DSKH9S0YB1PROD with BILLS

4 

•S 3453 IS

1 (b) CONFORMING AMENDMENT.—Section 1241(d)(3) 

2 of such Act, as redesignated by subsection (a), is amended 

3 by striking ‘‘paragraph (1)’’ and inserting ‘‘this sub4 section’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall take effect as if included in the provisions 

7 of the Pension Protection Act of 2006 to which such 

8 amendments relate. 

Æ 

mstockstill on DSKH9S0YB1PROD with BILLS