[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4714 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4714

     To amend the Internal Revenue Code of 1986 to exempt certain 
  transactions at fair market value between partnerships and private 
 foundations from the tax on self-dealing and to require the Secretary 
  of the Treasury to establish an exemption procedure from such taxes.


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                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 1998

 Mr. Campbell introduced the following bill; which was referred to the 
                      Committee on Ways and Means

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                                 A BILL


 
     To amend the Internal Revenue Code of 1986 to exempt certain 
  transactions at fair market value between partnerships and private 
 foundations from the tax on self-dealing and to require the Secretary 
  of the Treasury to establish an exemption procedure from such taxes.

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

SECTION 1. TAX ON SELF-DEALING NOT TO APPLY TO CERTAIN TRANSACTIONS.

    (a) Certain Partnership Transactions.--Paragraph (2) of section 
4941(d) of the Internal Revenue Code of 1986 (relating to special rule 
in respect of self-dealing) is amended by striking ``and'' at the end 
of subparagraph (G), by striking the period at the end of subparagraph 
(H) and inserting ``; and'', and by inserting after subparagraph (H) 
the following new subparagraph:
                    ``(I) any transaction between a private foundation 
                and a partnership which is a disqualified person (as 
                defined in section 4946(a)) pursuant to any 
                liquidation, merger, redemption, recapitalization, or 
                other partnership adjustment, formation, or 
                reorganization shall not be an act of self-dealing if 
                all of the partnership interests of the same class as 
                that held by the foundation are subject to the same 
                terms and such terms provide for the receipt by the 
                foundation of no less than fair market value for its 
                partnership interests.''.
    (b) Exemption Procedure From Taxes on Self-Dealing.--Subsection (d) 
of section 4941 of such Code (relating to taxes on self-dealing) is 
amended by adding at the end the following new paragraph:
            ``(3) Special exemption.--The Secretary shall establish an 
        exemption procedure for purposes of this subsection. Pursuant 
        to such procedure, the Secretary may grant a conditional or 
        unconditional exemption of any disqualified person or 
        transaction or class of disqualified persons or transactions, 
        from all or part of the restrictions imposed by paragraph (1). 
        The Secretary may not grant an exemption under this paragraph 
        unless he finds that such exemption is--
                    ``(A) administratively feasible,
                    ``(B) in the interests of the private foundation 
                and the disqualified person, and
                    ``(C) protective of the rights of the private 
                foundation and the disqualified person.
        Before granting an exemption under this paragraph, the 
        Secretary shall require adequate notice to be given to 
        interested persons and shall publish notice in the Federal 
        Register of the pendency of such exemption and shall afford 
        interested persons an opportunity to present views.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transactions occurring after the date of the enactment of this 
Act.
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