,,ii  #aac? ,,congress  #b;d ,session   
,s4 #bgaj  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,july #cj1 #bjad ,mr4  
,m55dez 7= himself & ,mr4 ,?une7        
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to exempt private 
f\ndations f ! tax on excess bus9ess    
hold+s 9 ! case ( c]ta9 philan?ropic    
ent]prises :i* are indep5d5tly sup]vis$1
 & = o!r purposes4  #a4  ,%ort title    
,?is ,act may be cit$ z ! ,philan?ropic 
,ent]prise ,act ( #bjad4  #b4           
,exception f private f\ndation excess   
bus9ess hold+ tax = c]ta9 philan?ropic  
bus9ess hold+s  7a7  ,9 g5]al  ,section 
#didc ( ! ,int]nal ,rev5ue ,code ( #aihf
 is am5d$ by add+ at ! end ! foll[+ new 
subsection3  7g7  ,exception = c]ta9    
philan?ropic bus9ess hold+s  7#a7  ,9   
g5]al  ,subsection 7a7 %all n apply )   
respect to ! hold+s ( a private         
f\ndation 9 any bus9ess ent]prise :i* = 
! taxable ye> meets--  7,a7 ! exclusive 

own]%ip requirem5ts ( p>agraph 7#b71    
7,b7 ! all pr(its to *>ity requirem5t ( 
p>agraph 7#c71 &  7,c7 ! indep5d5t      
op]ation requirem5ts ( p>agraph 7#d74   
7#b7  ,exclusive own]%ip  ,! exclusive  
own]%ip requirem5ts ( ?is p>agraph are  
met if--  7,a7 all own]%ip int]e/s 9 !  
bus9ess ent]prise are held by ! private 
f\ndation at all times dur+ ! taxable   
ye>1 &  7,b7 all ! private f\ndation's  
own]%ip int]e/s 9 ! bus9ess ent]prise 7 
acquir$ "u ! t]ms ( a w or tru/ ^u !    
dea? ( ! te/ator or settlor1 z ! case   
may be4  7#c7  ,all pr(its to *>ity     
7,a7  ,9 g5]al  ,! all pr(its to *>ity  
requirem5t ( ?is p>agraph is met if !   
bus9ess ent]prise1 n lat] ?an #abj days 
aft] ! close ( ! taxable ye>1 di/ributes
 an am\nt equal to its net op]at+ income
 = su* taxable ye> to ! private         
f\ndation4  7,b7  ,net op]at+ income  ,=
 purposes ( ?is p>agraph1 ! net op]at+  
income ( any bus9ess ent]prise = any    
taxable ye> is an am\nt equal to ! gross
 income ( ! bus9ess ent]prise = !       

taxable ye>1 r$uc$ by ! sum (--  7i7 !  
d$uctions all[$ by *apt] #a = ! taxable 
ye> :i* are directly connect$ ) !       
production ( su* income1  7ii7 ! tax    
impos$ by *apt] #a on ! bus9ess         
ent]prise = ! taxable ye>1 &  7iii7 an  
am\nt = a reasonable res]ve = work+     
capital & o!r bus9ess ne$s ( ! bus9ess  
ent]prise4  7#d7  ,indep5d5t op]ation   
,! indep5d5t op]ation requirem5ts ( ?is 
p>agraph are met if1 at all times dur+ !
 taxable ye>--  7,a7 no sub/antial      
contributor 7z def9$ 9 section          
#dieh7;c77#c77;,c77 to ! private        
f\ndation1 or family memb] ( su* a      
contributor 7det]m9$ "u section         
#dieh7;f77#d77 is a director1 (fic]1    
tru/ee1 manag]1 employee1 or contractor 
( ! bus9ess ent]prise 7or an individual 
hav+ p[]s or responsibilities simil> to 
any ( ! =ego+71  7,b7 at lea/ a majority
 ( ! bo>d ( directors ( ! private       
f\ndation are n-- 7i7 also directors or 
(fic]s ( ! bus9ess ent]prise1 or  7ii7  
memb]s ( ! family 7det]m9$ "u section   

#dieh7;f77#d77 ( a sub/antial           
contributor 7z def9$ 9 section          
#dieh7;c77#c77;,c77 to ! private        
f\ndation1 &  7,c7 !re is no loan out/&+
 f ! bus9ess ent]prise to a sub/antial  
contributor 7z s def9$7 to ! private    
f\ndation or a family memb] ( su*       
contributor 7z s det]m9$74  7#e7  ,c]ta9
 deem$ private f\ndations exclud$  ,?is 
subsection %all n apply to--  7,a7 any  
fund or organization treat$ z a private 
f\ndation = purposes ( ?is section by   
reason ( subsection 7e7 or 7f71  7,b7   
any tru/ describ$ 9 section             
#didg7;a77#a7 7relat+ to *>itable       
tru/s71 &  7,c7 any tru/ describ$ 9     
section #didg7;a77#b7 7relat+ to        
split-int]e/ tru/s74  4  7b7  ,effective
 date  ,! am5dm5ts made by ?is section  
%all apply to taxable ye>s beg9n+ aft]  
,decemb] #ca1 #bjac4  #c4  ,exception to
 unrelat$ bus9ess tax on specifi$       
paym5ts f c]ta9 controll$ entities  7a7 
,9 g5]al  ,p>agraph 7#ac7 ( section     
#eab7;b7 ( ! ,int]nal ,rev5ue ,code (   

#aihf is am5d$ by add+ at ! end ! foll[+
 new subp>agraph3  7,g7  ,subp>agraph n 
to apply to paym5ts f c]ta9 philan?ropic
 controll$ entities  ,subp>agraph 7,a7  
%all n apply to any paym5t n 9 excess ( 
fair m>ket value to a private f\ndation 
f an entity :i* is a bus9ess ent]prise  
describ$ 9 section #didc7;g77#a7 )      
respect to su* f\ndation4  4  7b7       
,effective date  ,! am5dm5ts made by ?is
 section %all apply to taxable ye>s     
beg9n+ aft] ,decemb] #ca1 #bjac4