I 
113TH CONGRESS 
1ST SESSION H. R. 2832 
To amend the Internal Revenue Code of 1986 to facilitate program-related 
investments by private foundations. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2013 
Mr. GARDNER (for himself and Mr. POLIS) introduced the following bill; which 
was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to facilitate 
program-related investments by private foundations. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Philanthropic Facilitation Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Facilitation of program-related investments. 
Sec. 3. Declaratory judgment remedy. 
Sec. 4. Information returns. 
Sec. 5. Publicity of information. 
Sec. 6. Conforming amendments. 
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Sec. 7. Regulations. 
Sec. 8. Effective date. 
SEC. 2. FACILITATION OF PROGRAM-RELATED INVEST-
MENTS. 
Subsection (c) of section 4944 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘(c) PROGRAM RELATED INVESTMENTS.— 
‘‘(1) TREATMENT OF PROGRAM RELATED IN-
VESTMENTS.—For purposes of this subchapter, pro-
gram-related investments— 
‘‘(A) are not investments which jeopardize 
the carrying out of one or more purposes de-
scribed in section 170(c)(2)(B), 
‘‘(B) are not business holdings under sec-
tion 4943, and 
‘‘(C) may be qualifying distributions under 
section 4942. 
‘‘(2) PROGRAM-RELATED
INVESTMENTS
DE-
FINED.— 
‘‘(A) IN GENERAL.—For purposes of this 
subchapter and chapter 61, an investment made 
by a private foundation constitutes a program- 
related investment if— 
‘‘(i) the primary purpose of the invest-
ment is to accomplish one or more of the 
purposes described in section 170(c)(2)(B), 
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‘‘(ii) no significant purpose of the in-
vestment is the production of income or 
the appreciation of property, and 
‘‘(iii) no purpose of the investment is 
to accomplish one or more of the purposes 
described in section 170(c)(2)(D). 
‘‘(B) SPECIAL
RULES.—For purposes of 
subparagraph (A)— 
‘‘(i) determinations of whether an in-
vestment qualifies as a program-related in-
vestment shall be based on consideration of 
all relevant facts and circumstances, and 
‘‘(ii) the fact that the entity produces 
significant income or capital appreciation 
shall not, in the absence of other factors, 
be conclusive evidence of a significant pur-
pose involving the production of income or 
the appreciation of property. 
‘‘(3) SAFE
HARBOR
DETERMINATIONS.—The 
Secretary shall establish a procedure which shall be 
substantially similar to the processes for recognition 
of exemption under section 501(a) or 4945(g) and 
under which an entity seeking to receive program-re-
lated investments may petition the Secretary for a 
determination that, based on consideration of all rel-
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evant facts and circumstances, investments by pri-
vate foundations in such entity will be program-re-
lated investments meeting the requirements of para-
graph (2). Under this procedure, the Secretary shall 
rule on all requests within 120 days of submission. 
‘‘(4) EFFECT OF DETERMINATION.—Once a de-
termination has been made that investments in an 
entity qualify as program-related investments, orga-
nizations making such investments shall be entitled 
to rely on the determination, unless and until the 
Secretary publishes notice of revocation of the deter-
mination. 
‘‘(5) VOLUNTARY NATURE OF PROCESS.—Enti-
ties seeking program-related investments are not re-
quired to seek a determination under paragraph (3), 
and the absence of such a determination shall not 
affect the ability of a private foundation to make a 
program-related investment based on its own deter-
mination that the investment qualifies as a program- 
related investment. 
‘‘(6) ORGANIZATIONS
TREATED
AS
PRIVATE 
FOUNDATIONS.—For purposes of this subsection and 
section 6104A, all references to private foundations 
include organizations that are treated as private 
foundations under any of the provisions of sections 
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4940 through 4948, inclusive, whether created under 
state law or the law of any federally-recognized 
tribe.’’. 
SEC. 3. DECLARATORY JUDGMENT REMEDY. 
Paragraph (1) of section 7428(a) of the Internal Rev-
enue Code of 1986 is amended by striking ‘‘or’’ at the 
end of subparagraph (C) and by adding after subpara-
graph (D) the following new subparagraph: 
‘‘(E) with respect to whether investments 
in an entity are program-related investments 
(as described in section 4944(c)(2)), or’’. 
SEC. 4. INFORMATION RETURNS. 
Part III of subchapter A of chapter 61 of the Internal 
Revenue Code of 1986 is amended by inserting after sec-
tion 6033 the following new section: 
‘‘SEC. 6033A. INFORMATION REPORTING BY FOR-PROFIT 
ORGANIZATIONS RECEIVING PROGRAM-RE-
LATED INVESTMENTS. 
‘‘(a) ORGANIZATIONS REQUIRED TO FILE.—If in-
vestments in an entity have been determined to be pro-
gram-related investments through a determination of the 
Internal Revenue Service pursuant to section 4944(c)(3) 
or by a determination of a court pursuant to section 
7428(a), the entity shall, in addition to any other applica-
ble filing obligations, file an annual return providing the 
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information specified in subsection (b) for any taxable 
year in which it receives or retains one or more program- 
related investments (as defined in section 4944(c)(2)). 
‘‘(b) REQUIRED REPORTING.—The return described 
in subsection (a) shall provide, in such manner and at 
such time as the Secretary may by forms or regulations 
prescribe, the following information— 
‘‘(1) the organization’s gross income for the 
year, 
‘‘(2) its expenses attributable to such income 
incurred within the year, 
‘‘(3) its disbursements within the year for one 
or more purposes described in section 170(c)(2)(B), 
together with a narrative statement describing the 
results obtained from the use of those assets for 
such one or more purposes described in section 
170(c)(2)(B), 
‘‘(4) a balance sheet showing its assets, liabil-
ities, and net worth as of the beginning and end of 
such year, 
‘‘(5) the names and addresses of all private 
foundations holding program-related investments in 
the organization, 
‘‘(6) a statement of the portion of its liabilities 
and net worth that represent capitalization obtained 
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by means of program-related investments as of the 
beginning and end of such year, 
‘‘(7) a statement of any interest, dividends, or 
other distributions paid with respect to any pro-
gram-related investments during the year, and 
‘‘(8) such other information as may be nec-
essary for the return described in subsection (a) to 
satisfy the annual financial reporting required by the 
expenditure responsibility rules pursuant to the reg-
ulations under section 4945 or as the Secretary may 
by forms or regulations prescribe.’’. 
SEC. 5. PUBLICITY OF INFORMATION. 
Subchapter B of chapter 61 of the Internal Revenue 
Code of 1986 is amended by inserting after section 6104 
the following new section: 
‘‘SEC. 6104A. PUBLICITY OF INFORMATION REGARDING OR-
GANIZATIONS 
RECEIVING 
PROGRAM-RE-
LATED INVESTMENTS. 
‘‘(a) INSPECTION OF PETITIONS FOR DETERMINA-
TION OF PROGRAM-RELATED INVESTMENT STATUS.—If 
an entity seeks a determination pursuant to section 
4944(c)(3) that investments by private foundations in 
such organization will be program-related investments, the 
petition seeking such a determination, together with any 
documents submitted in support of such petition and any 
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determination or other document issued by the Internal 
Revenue Service with respect to such petition, shall be 
open to public inspection at the national office of the In-
ternal Revenue Service. 
‘‘(b) INSPECTION
OF ANNUAL INFORMATION RE-
TURNS.—The information required to be furnished by sec-
tion 6033A, together with the names and addresses of 
such entity, shall be made available to the public at such 
times and in such places as the Secretary may prescribe. 
‘‘(c) PUBLIC INSPECTION OF PETITIONS AND AN-
NUAL INFORMATION RETURNS.—Any entity that receives 
a determination from the Internal Revenue Service that 
private foundation investments shall be program-related 
investments pursuant to section 4944(c)(3) shall make 
copies available at the organization’s principal office, dur-
ing regular business hours, of the petition for such deter-
mination (together with supporting materials provided 
with the petition and documents issued by the Internal 
Revenue Service with respect to such petition), as well as 
the annual returns required by section 6033A filed by such 
organization. Upon request of an individual made at such 
principal office, copies of such petition materials and an-
nual reports shall be provided to such individual without 
charge other than a reasonable fee for any reproduction 
and mailing costs. The inspection and duplication rights 
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granted in this subsection shall apply to an annual return 
only during the three-year period beginning on the last 
day prescribed for filing such return (determined with re-
gard to any extension of time for filing). 
‘‘(d) LIMITATION
ON PROVIDING COPIES.—Para-
graph (c) shall not apply to any request if, in accordance 
with regulations promulgated by the Secretary, the entity 
has made the requested documents widely available, or the 
Secretary determines, upon application by an entity, that 
such request is part of a harassment campaign and that 
compliance with such request is not in the public inter-
est.’’. 
SEC. 6. CONFORMING AMENDMENTS. 
(a) CONFORMING CHANGE TO SECTION 501(n).— 
Paragraph (4)(A) of section 501(n) of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘paragraph 
(2) of’’ before ‘‘section 4944(c).’’ 
(b) CONFORMING CHANGE TO SECTION 514(b).— 
Paragraph (1) of section 514(b) of the Internal Revenue 
Code of 1986 is amended by redesignating subparagraphs 
(D) and (E) as subparagraphs (E) and (F) and by insert-
ing after subparagraph (C) the following new subpara-
graph: 
‘‘(D) any property owned or treated as 
owned by a private foundation by virtue of its 
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having made an investment in an entity that 
has received a determination from the Internal 
Revenue 
Service 
pursuant 
to 
section 
4944(c)(3), or by a court pursuant to section 
7428(a), that such investments in such entity 
qualify as program-related investments;’’. 
(c) CONFORMING CHANGE TO SECTION 4943(d).— 
Paragraph (3) of section 4943(d) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘or’’ at the end of 
subparagraph (A), by redesignating subparagraph (B) as 
subparagraph (C) and by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) any program-related investment, as 
defined in section 4944(c)(2), or’’. 
SEC. 7. REGULATIONS. 
The Secretary of the Treasury shall, not later than 
1 year after the date of the enactment of this Act, amend 
any applicable regulations as may be necessary or appro-
priate to implement any amendments contained in this Act 
or to carry out the purposes of this Act, including pro-
viding additional examples of qualifying program-related 
investments. 
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SEC. 8. EFFECTIVE DATE. 
The amendments made by this Act shall apply to in-
vestments made after the date of the enactment of this 
Act in taxable years ending after such date. 
Æ 
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