
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 107-16 Section 611(d)(3)(C)]
[Document affected by Public Law 107-90 Section 202]
[Document affected by Public Law 107-134 Section 104]
[CITE: 26USC501]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                   Subchapter F--Exempt Organizations
 
                          PART I--GENERAL RULE
 
Sec. 501. Exemption from tax on corporations, certain trusts, 
        etc.
        

(a) Exemption from taxation

    An organization described in subsection (c) or (d) or section 401(a) 
shall be exempt from taxation under this subtitle unless such exemption 
is denied under section 502 or 503.

(b) Tax on unrelated business income and certain other activities

    An organization exempt from taxation under subsection (a) shall be 
subject to tax to the extent provided in parts II, III, and VI of this 
subchapter, but (notwithstanding parts II, III, and VI of this 
subchapter) shall be considered an organization exempt from income taxes 
for the purpose of any law which refers to organizations exempt from 
income taxes.

(c) List of exempt organizations

    The following organizations are referred to in subsection (a):
        (1) Any corporation organized under Act of Congress which is an 
    instrumentality of the United States but only if such corporation--
            (A) is exempt from Federal income taxes--
                (i) under such Act as amended and supplemented before 
            July 18, 1984, or
                (ii) under this title without regard to any provision of 
            law which is not contained in this title and which is not 
            contained in a revenue Act, or

            (B) is described in subsection (l).

        (2) Corporations organized for the exclusive purpose of holding 
    title to property, collecting income therefrom, and turning over the 
    entire amount thereof, less expenses, to an organization which 
    itself is exempt under this section. Rules similar to the rules of 
    subparagraph (G) of paragraph (25) shall apply for purposes of this 
    paragraph.
        (3) Corporations, and any community chest, fund, or foundation, 
    organized and operated exclusively for religious, charitable, 
    scientific, testing for public safety, literary, or educational 
    purposes, or to foster national or international amateur sports 
    competition (but only if no part of its activities involve the 
    provision of athletic facilities or equipment), or for the 
    prevention of cruelty to children or animals, no part of the net 
    earnings of which inures to the benefit of any private shareholder 
    or individual, no substantial part of the activities of which is 
    carrying on propaganda, or otherwise attempting, to influence 
    legislation (except as otherwise provided in subsection (h)), and 
    which does not participate in, or intervene in (including the 
    publishing or distributing of statements), any political campaign on 
    behalf of (or in opposition to) any candidate for public office.
        (4)(A) Civic leagues or organizations not organized for profit 
    but operated exclusively for the promotion of social welfare, or 
    local associations of employees, the membership of which is limited 
    to the employees of a designated person or persons in a particular 
    municipality, and the net earnings of which are devoted exclusively 
    to charitable, educational, or recreational purposes.
        (B) Subparagraph (A) shall not apply to an entity unless no part 
    of the net earnings of such entity inures to the benefit of any 
    private shareholder or individual.
        (5) Labor, agricultural, or horticultural organizations.
        (6) Business leagues, chambers of commerce, real-estate boards, 
    boards of trade, or professional football leagues (whether or not 
    administering a pension fund for football players), not organized 
    for profit and no part of the net earnings of which inures to the 
    benefit of any private shareholder or individual.
        (7) Clubs organized for pleasure, recreation, and other 
    nonprofitable purposes, substantially all of the activities of which 
    are for such purposes and no part of the net earnings of which 
    inures to the benefit of any private shareholder.
        (8) Fraternal beneficiary societies, orders, or associations--
            (A) operating under the lodge system or for the exclusive 
        benefit of the members of a fraternity itself operating under 
        the lodge system, and
            (B) providing for the payment of life, sick, accident, or 
        other benefits to the members of such society, order, or 
        association or their dependents.

        (9) Voluntary employees' beneficiary associations providing for 
    the payment of life, sick, accident, or other benefits to the 
    members of such association or their dependents or designated 
    beneficiaries, if no part of the net earnings of such association 
    inures (other than through such payments) to the benefit of any 
    private shareholder or individual.
        (10) Domestic fraternal societies, orders, or associations, 
    operating under the lodge system--
            (A) the net earnings of which are devoted exclusively to 
        religious, charitable, scientific, literary, educational, and 
        fraternal purposes, and
            (B) which do not provide for the payment of life, sick, 
        accident, or other benefits.

        (11) Teachers' retirement fund associations of a purely local 
    character, if--
            (A) no part of their net earnings inures (other than through 
        payment of retirement benefits) to the benefit of any private 
        shareholder or individual, and
            (B) the income consists solely of amounts received from 
        public taxation, amounts received from assessments on the 
        teaching salaries of members, and income in respect of 
        investments.

        (12)(A) Benevolent life insurance associations of a purely local 
    character, mutual ditch or irrigation companies, mutual or 
    cooperative telephone companies, or like organizations; but only if 
    85 percent or more of the income consists of amounts collected from 
    members for the sole purpose of meeting losses and expenses.
        (B) In the case of a mutual or cooperative telephone company, 
    subparagraph (A) shall be applied without taking into account any 
    income received or accrued--
            (i) from a nonmember telephone company for the performance 
        of communication services which involve members of the mutual or 
        cooperative telephone company,
            (ii) from qualified pole rentals,
            (iii) from the sale of display listings in a directory 
        furnished to the members of the mutual or cooperative telephone 
        company, or
            (iv) from the prepayment of a loan under section 306A, 306B, 
        or 311 \1\ of the Rural Electrification Act of 1936 (as in 
        effect on January 1, 1987).
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    \1\ See References in Text note below.

        (C) In the case of a mutual or cooperative electric company, 
    subparagraph (A) shall be applied without taking into account any 
    income received or accrued--
            (i) from qualified pole rentals, or
            (ii) from the prepayment of a loan under section 306A, 306B, 
        or 311 \1\ of the Rural Electrification Act of 1936 (as in 
        effect on January 1, 1987).

        (D) For purposes of this paragraph, the term ``qualified pole 
    rental'' means any rental of a pole (or other structure used to 
    support wires) if such pole (or other structure)--
            (i) is used by the telephone or electric company to support 
        one or more wires which are used by such company in providing 
        telephone or electric services to its members, and
            (ii) is used pursuant to the rental to support one or more 
        wires (in addition to the wires described in clause (i)) for use 
        in connection with the transmission by wire of electricity or of 
        telephone or other communications.

    For purposes of the preceding sentence, the term ``rental'' includes 
    any sale of the right to use the pole (or other structure).
        (13) Cemetery companies owned and operated exclusively for the 
    benefit of their members or which are not operated for profit; and 
    any corporation chartered solely for the purpose of the disposal of 
    bodies by burial or cremation which is not permitted by its charter 
    to engage in any business not necessarily incident to that purpose 
    and no part of the net earnings of which inures to the benefit of 
    any private shareholder or individual.
        (14)(A) Credit unions without capital stock organized and 
    operated for mutual purposes and without profit.
        (B) Corporations or associations without capital stock organized 
    before September 1, 1957, and operated for mutual purposes and 
    without profit for the purpose of providing reserve funds for, and 
    insurance of shares or deposits in--
            (i) domestic building and loan associations,
            (ii) cooperative banks without capital stock organized and 
        operated for mutual purposes and without profit,
            (iii) mutual savings banks not having capital stock 
        represented by shares, or
            (iv) mutual savings banks described in section 591(b) \2\
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    \2\ So in original. Probably should be followed by a period.

        (C) Corporations or associations organized before September 1, 
    1957, and operated for mutual purposes and without profit for the 
    purpose of providing reserve funds for associations or banks 
    described in clause (i), (ii), or (iii) of subparagraph (B); but 
    only if 85 percent or more of the income is attributable to 
    providing such reserve funds and to investments. This subparagraph 
    shall not apply to any corporation or association entitled to 
    exemption under subparagraph (B).
        (15)(A) Insurance companies or associations other than life 
    (including interinsurers and reciprocal underwriters) if the net 
    written premiums (or, if greater, direct written premiums) for the 
    taxable year do not exceed $350,000.
        (B) For purposes of subparagraph (A), in determining whether any 
    company or association is described in subparagraph (A), such 
    company or association shall be treated as receiving during the 
    taxable year amounts described in subparagraph (A) which are 
    received during such year by all other companies or associations 
    which are members of the same controlled group as the insurance 
    company or association for which the determination is being made.
        (C) For purposes of subparagraph (B), the term ``controlled 
    group'' has the meaning given such term by section 831(b)(2)(B)(ii).
        (16) Corporations organized by an association subject to part IV 
    of this subchapter or members thereof, for the purpose of financing 
    the ordinary crop operations of such members or other producers, and 
    operated in conjunction with such association. Exemption shall not 
    be denied any such corporation because it has capital stock, if the 
    dividend rate of such stock is fixed at not to exceed the legal rate 
    of interest in the State of incorporation or 8 percent per annum, 
    whichever is greater, on the value of the consideration for which 
    the stock was issued, and if substantially all such stock (other 
    than nonvoting preferred stock, the owners of which are not entitled 
    or permitted to participate, directly or indirectly, in the profits 
    of the corporation, on dissolution or otherwise, beyond the fixed 
    dividends) is owned by such association, or members thereof; nor 
    shall exemption be denied any such corporation because there is 
    accumulated and maintained by it a reserve required by State law or 
    a reasonable reserve for any necessary purpose.
        (17)(A) A trust or trusts forming part of a plan providing for 
    the payment of supplemental unemployment compensation benefits, if--
            (i) under the plan, it is impossible, at any time prior to 
        the satisfaction of all liabilities, with respect to employees 
        under the plan, for any part of the corpus or income to be 
        (within the taxable year or thereafter) used for, or diverted 
        to, any purpose other than the providing of supplemental 
        unemployment compensation benefits,
            (ii) such benefits are payable to employees under a 
        classification which is set forth in the plan and which is found 
        by the Secretary not to be discriminatory in favor of employees 
        who are highly compensated employees (within the meaning of 
        section 414(q)), and
            (iii) such benefits do not discriminate in favor of 
        employees who are highly compensated employees (within the 
        meaning of section 414(q)). A plan shall not be considered 
        discriminatory within the meaning of this clause merely because 
        the benefits received under the plan bear a uniform relationship 
        to the total compensation, or the basic or regular rate of 
        compensation, of the employees covered by the plan.

        (B) In determining whether a plan meets the requirements of 
    subparagraph (A), any benefits provided under any other plan shall 
    not be taken into consideration, except that a plan shall not be 
    considered discriminatory--
            (i) merely because the benefits under the plan which are 
        first determined in a nondiscriminatory manner within the 
        meaning of subparagraph (A) are then reduced by any sick, 
        accident, or unemployment compensation benefits received under 
        State or Federal law (or reduced by a portion of such benefits 
        if determined in a nondiscriminatory manner), or
            (ii) merely because the plan provides only for employees who 
        are not eligible to receive sick, accident, or unemployment 
        compensation benefits under State or Federal law the same 
        benefits (or a portion of such benefits if determined in a 
        nondiscriminatory manner) which such employees would receive 
        under such laws if such employees were eligible for such 
        benefits, or
            (iii) merely because the plan provides only for employees 
        who are not eligible under another plan (which meets the 
        requirements of subparagraph (A)) of supplemental unemployment 
        compensation benefits provided wholly by the employer the same 
        benefits (or a portion of such benefits if determined in a 
        nondiscriminatory manner) which such employees would receive 
        under such other plan if such employees were eligible under such 
        other plan, but only if the employees eligible under both plans 
        would make a classification which would be nondiscriminatory 
        within the meaning of subparagraph (A).

        (C) A plan shall be considered to meet the requirements of 
    subparagraph (A) during the whole of any year of the plan if on one 
    day in each quarter it satisfies such requirements.
        (D) The term ``supplemental unemployment compensation benefits'' 
    means only--
            (i) benefits which are paid to an employee because of his 
        involuntary separation from the employment of the employer 
        (whether or not such separation is temporary) resulting directly 
        from a reduction in force, the discontinuance of a plant or 
        operation, or other similar conditions, and
            (ii) sick and accident benefits subordinate to the benefits 
        described in clause (i).

        (E) Exemption shall not be denied under subsection (a) to any 
    organization entitled to such exemption as an association described 
    in paragraph (9) of this subsection merely because such organization 
    provides for the payment of supplemental unemployment benefits (as 
    defined in subparagraph (D)(i)).
        (18) A trust or trusts created before June 25, 1959, forming 
    part of a plan providing for the payment of benefits under a pension 
    plan funded only by contributions of employees, if--
            (A) under the plan, it is impossible, at any time prior to 
        the satisfaction of all liabilities with respect to employees 
        under the plan, for any part of the corpus or income to be 
        (within the taxable year or thereafter) used for, or diverted 
        to, any purpose other than the providing of benefits under the 
        plan,
            (B) such benefits are payable to employees under a 
        classification which is set forth in the plan and which is found 
        by the Secretary not to be discriminatory in favor of employees 
        who are highly compensated employees (within the meaning of 
        section 414(q)),
            (C) such benefits do not discriminate in favor of employees 
        who are highly compensated employees (within the meaning of 
        section 414(q)). A plan shall not be considered discriminatory 
        within the meaning of this subparagraph merely because the 
        benefits received under the plan bear a uniform relationship to 
        the total compensation, or the basic or regular rate of 
        compensation, of the employees covered by the plan, and
            (D) in the case of a plan under which an employee may 
        designate certain contributions as deductible--
                (i) such contributions do not exceed the amount with 
            respect to which a deduction is allowable under section 
            219(b)(3),
                (ii) requirements similar to the requirements of section 
            401(k)(3)(A)(ii) are met with respect to such elective 
            contributions,
                (iii) such contributions are treated as elective 
            deferrals for purposes of section 402(g) (other than 
            paragraph (4) thereof), and
                (iv) the requirements of section 401(a)(30) are met.

    For purposes of subparagraph (D)(ii), rules similar to the rules of 
    section 401(k)(8) shall apply. For purposes of section 4979, any 
    excess contribution under clause (ii) shall be treated as an excess 
    contribution under a cash or deferred arrangement.
        (19) A post or organization of past or present members of the 
    Armed Forces of the United States, or an auxiliary unit or society 
    of, or a trust or foundation for, any such post or organization--
            (A) organized in the United States or any of its 
        possessions,
            (B) at least 75 percent of the members of which are past or 
        present members of the Armed Forces of the United States and 
        substantially all of the other members of which are individuals 
        who are cadets or are spouses, widows, or widowers of past or 
        present members of the Armed Forces of the United States or of 
        cadets, and
            (C) no part of the net earnings of which inures to the 
        benefit of any private shareholder or individual.

        (20) an \3\ organization or trust created or organized in the 
    United States, the exclusive function of which is to form part of a 
    qualified group legal services plan or plans, within the meaning of 
    section 120. An organization or trust which receives contributions 
    because of section 120(c)(5)(C) shall not be prevented from 
    qualifying as an organization described in this paragraph merely 
    because it provides legal services or indemnification against the 
    cost of legal services unassociated with a qualified group legal 
    services plan.
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    \3\ So in original. Probably should be capitalized.
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        (21)(A) A trust or trusts established in writing, created or 
    organized in the United States, and contributed to by any person 
    (except an insurance company) if--
            (i) the purpose of such trust or trusts is exclusively--
                (I) to satisfy, in whole or in part, the liability of 
            such person for, or with respect to, claims for compensation 
            for disability or death due to pneumoconiosis under Black 
            Lung Acts,
                (II) to pay premiums for insurance exclusively covering 
            such liability,
                (III) to pay administrative and other incidental 
            expenses of such trust in connection with the operation of 
            the trust and the processing of claims against such person 
            under Black Lung Acts, and
                (IV) to pay accident or health benefits for retired 
            miners and their spouses and dependents (including 
            administrative and other incidental expenses of such trust 
            in connection therewith) or premiums for insurance 
            exclusively covering such benefits; and

            (ii) no part of the assets of the trust may be used for, or 
        diverted to, any purpose other than--
                (I) the purposes described in clause (i),
                (II) investment (but only to the extent that the trustee 
            determines that a portion of the assets is not currently 
            needed for the purposes described in clause (i)) in 
            qualified investments, or
                (III) payment into the Black Lung Disability Trust Fund 
            established under section 9501, or into the general fund of 
            the United States Treasury (other than in satisfaction of 
            any tax or other civil or criminal liability of the person 
            who established or contributed to the trust).

        (B) No deduction shall be allowed under this chapter for any 
    payment described in subparagraph (A)(i)(IV) from such trust.
        (C) Payments described in subparagraph (A)(i)(IV) may be made 
    from such trust during a taxable year only to the extent that the 
    aggregate amount of such payments during such taxable year does not 
    exceed the lesser of--
            (i) the excess (if any) (as of the close of the preceding 
        taxable year) of--
                (I) the fair market value of the assets of the trust, 
            over
                (II) 110 percent of the present value of the liability 
            described in subparagraph (A)(i)(I) of such person, or

            (ii) the excess (if any) of--
                (I) the sum of a similar excess determined as of the 
            close of the last taxable year ending before the date of the 
            enactment of this subparagraph plus earnings thereon as of 
            the close of the taxable year preceding the taxable year 
            involved, over
                (II) the aggregate payments described in subparagraph 
            (A)(i)(IV) made from the trust during all taxable years 
            beginning after the date of the enactment of this 
            subparagraph.

    The determinations under the preceding sentence shall be made by an 
    independent actuary using actuarial methods and assumptions (not 
    inconsistent with the regulations prescribed under section 
    192(c)(1)(A)) each of which is reasonable and which are reasonable 
    in the aggregate.
        (D) For purposes of this paragraph:
            (i) The term ``Black Lung Acts'' means part C of title IV of 
        the Federal Mine Safety and Health Act of 1977, and any State 
        law providing compensation for disability or death due to that 
        pneumoconiosis.
            (ii) The term ``qualified investments'' means--
                (I) public debt securities of the United States,
                (II) obligations of a State or local government which 
            are not in default as to principal or interest, and
                (III) time or demand deposits in a bank (as defined in 
            section 581) or an insured credit union (within the meaning 
            of section 101(7) of the Federal Credit Union Act, 12 U.S.C. 
            1752(7)) located in the United States.

            (iii) The term ``miner'' has the same meaning as such term 
        has when used in section 402(d) of the Black Lung Benefits Act 
        (30 U.S.C. 902(d)).
            (iv) The term ``incidental expenses'' includes legal, 
        accounting, actuarial, and trustee expenses.

        (22) A trust created or organized in the United States and 
    established in writing by the plan sponsors of multiemployer plans 
    if--
            (A) the purpose of such trust is exclusively--
                (i) to pay any amount described in section 4223(c) or 
            (h) of the Employee Retirement Income Security Act of 1974, 
            and
                (ii) to pay reasonable and necessary administrative 
            expenses in connection with the establishment and operation 
            of the trust and the processing of claims against the trust,

            (B) no part of the assets of the trust may be used for, or 
        diverted to, any purpose other than--
                (i) the purposes described in subparagraph (A), or
                (ii) the investment in securities, obligations, or time 
            or demand deposits described in clause (ii) of paragraph 
            (21)(B),

            (C) such trust meets the requirements of paragraphs (2), 
        (3), and (4) of section 4223(b), 4223(h), or, if applicable, 
        section 4223(c) of the Employee Retirement Income Security Act 
        of 1974, and
            (D) the trust instrument provides that, on dissolution of 
        the trust, assets of the trust may not be paid other than to 
        plans which have participated in the plan or, in the case of a 
        trust established under section 4223(h) of such Act, to plans 
        with respect to which employers have participated in the fund.

        (23) Any association organized before 1880 more than 75 percent 
    of the members of which are present or past members of the Armed 
    Forces and a principal purpose of which is to provide insurance and 
    other benefits to veterans or their dependents.
        (24) A trust described in section 4049 of the Employee 
    Retirement Income Security Act of 1974 (as in effect on the date of 
    the enactment of the Single-Employer Pension Plan Amendments Act of 
    1986).
        (25)(A) Any corporation or trust which--
            (i) has no more than 35 shareholders or beneficiaries,
            (ii) has only 1 class of stock or beneficial interest, and
            (iii) is organized for the exclusive purposes of--
                (I) acquiring real property and holding title to, and 
            collecting income from, such property, and
                (II) remitting the entire amount of income from such 
            property (less expenses) to 1 or more organizations 
            described in subparagraph (C) which are shareholders of such 
            corporation or beneficiaries of such trust.

    For purposes of clause (iii), the term ``real property'' shall not 
    include any interest as a tenant in common (or similar interest) and 
    shall not include any indirect interest.
        (B) A corporation or trust shall be described in subparagraph 
    (A) without regard to whether the corporation or trust is organized 
    by 1 or more organizations described in subparagraph (C).
        (C) An organization is described in this subparagraph if such 
    organization is--
            (i) a qualified pension, profit sharing, or stock bonus plan 
        that meets the requirements of section 401(a),
            (ii) a governmental plan (within the meaning of section 
        414(d)),
            (iii) the United States, any State or political subdivision 
        thereof, or any agency or instrumentality of any of the 
        foregoing, or
            (iv) any organization described in paragraph (3).

        (D) A corporation or trust shall in no event be treated as 
    described in subparagraph (A) unless such corporation or trust 
    permits its shareholders or beneficiaries--
            (i) to dismiss the corporation's or trust's investment 
        adviser, following reasonable notice, upon a vote of the 
        shareholders or beneficiaries holding a majority of interest in 
        the corporation or trust, and
            (ii) to terminate their interest in the corporation or trust 
        by either, or both, of the following alternatives, as determined 
        by the corporation or trust:
                (I) by selling or exchanging their stock in the 
            corporation or interest in the trust (subject to any Federal 
            or State securities law) to any organization described in 
            subparagraph (C) so long as the sale or exchange does not 
            increase the number of shareholders or beneficiaries in such 
            corporation or trust above 35, or
                (II) by having their stock or interest redeemed by the 
            corporation or trust after the shareholder or beneficiary 
            has provided 90 days notice to such corporation or trust.

        (E)(i) For purposes of this title--
            (I) a corporation which is a qualified subsidiary shall not 
        be treated as a separate corporation, and
            (II) all assets, liabilities, and items of income, 
        deduction, and credit of a qualified subsidiary shall be treated 
        as assets, liabilities, and such items (as the case may be) of 
        the corporation or trust described in subparagraph (A).

        (ii) For purposes of this subparagraph, the term ``qualified 
    subsidiary'' means any corporation if, at all times during the 
    period such corporation was in existence, 100 percent of the stock 
    of such corporation is held by the corporation or trust described in 
    subparagraph (A).
        (iii) For purposes of this subtitle, if any corporation which 
    was a qualified subsidiary ceases to meet the requirements of clause 
    (ii), such corporation shall be treated as a new corporation 
    acquiring all of its assets (and assuming all of its liabilities) 
    immediately before such cessation from the corporation or trust 
    described in subparagraph (A) in exchange for its stock.
        (F) For purposes of subparagraph (A), the term ``real property'' 
    includes any personal property which is leased under, or in 
    connection with, a lease of real property, but only if the rent 
    attributable to such personal property (determined under the rules 
    of section 856(d)(1)) for the taxable year does not exceed 15 
    percent of the total rent for the taxable year attributable to both 
    the real and personal property leased under, or in connection with, 
    such lease.
        (G)(i) An organization shall not be treated as failing to be 
    described in this paragraph merely by reason of the receipt of any 
    otherwise disqualifying income which is incidentally derived from 
    the holding of real property.
        (ii) Clause (i) shall not apply if the amount of gross income 
    described in such clause exceeds 10 percent of the organization's 
    gross income for the taxable year unless the organization 
    establishes to the satisfaction of the Secretary that the receipt of 
    gross income described in clause (i) in excess of such limitation 
    was inadvertent and reasonable steps are being taken to correct the 
    circumstances giving rise to such income.
        (26) Any membership organization if--
            (A) such organization is established by a State exclusively 
        to provide coverage for medical care (as defined in section 
        213(d)) on a not-for-profit basis to individuals described in 
        subparagraph (B) through--
                (i) insurance issued by the organization, or
                (ii) a health maintenance organization under an 
            arrangement with the organization,

            (B) the only individuals receiving such coverage through the 
        organization are individuals--
                (i) who are residents of such State, and
                (ii) who, by reason of the existence or history of a 
            medical condition--
                    (I) are unable to acquire medical care coverage for 
                such condition through insurance or from a health 
                maintenance organization, or
                    (II) are able to acquire such coverage only at a 
                rate which is substantially in excess of the rate for 
                such coverage through the membership organization,

            (C) the composition of the membership in such organization 
        is specified by such State, and
            (D) no part of the net earnings of the organization inures 
        to the benefit of any private shareholder or individual.

    A spouse and any qualifying child (as defined in section 24(c)) of 
    an individual described in subparagraph (B) (without regard to this 
    sentence) shall be treated as described in subparagraph (B).
        (27)(A) Any membership organization if--
            (i) such organization is established before June 1, 1996, by 
        a State exclusively to reimburse its members for losses arising 
        under workmen's compensation acts,
            (ii) such State requires that the membership of such 
        organization consist of--
                (I) all persons who issue insurance covering workmen's 
            compensation losses in such State, and
                (II) all persons and governmental entities who self-
            insure against such losses, and

            (iii) such organization operates as a non-profit 
        organization by--
                (I) returning surplus income to its members or workmen's 
            compensation policyholders on a periodic basis, and
                (II) reducing initial premiums in anticipation of 
            investment income.

        (B) Any organization (including a mutual insurance company) if--
            (i) such organization is created by State law and is 
        organized and operated under State law exclusively to--
                (I) provide workmen's compensation insurance which is 
            required by State law or with respect to which State law 
            provides significant disincentives if such insurance is not 
            purchased by an employer, and
                (II) provide related coverage which is incidental to 
            workmen's compensation insurance,

            (ii) such organization must provide workmen's compensation 
        insurance to any employer in the State (for employees in the 
        State or temporarily assigned out-of-State) which seeks such 
        insurance and meets other reasonable requirements relating 
        thereto,
            (iii)(I) the State makes a financial commitment with respect 
        to such organization either by extending the full faith and 
        credit of the State to the initial debt of such organization or 
        by providing the initial operating capital of such organization, 
        and (II) in the case of periods after the date of enactment of 
        this subparagraph, the assets of such organization revert to the 
        State upon dissolution or State law does not permit the 
        dissolution of such organization, and
            (iv) the majority of the board of directors or oversight 
        body of such organization are appointed by the chief executive 
        officer or other executive branch official of the State, by the 
        State legislature, or by both.

(d) Religious and apostolic organizations

    The following organizations are referred to in subsection (a): 
Religious or apostolic associations or corporations, if such 
associations or corporations have a common treasury or community 
treasury, even if such associations or corporations engage in business 
for the common benefit of the members, but only if the members thereof 
include (at the time of filing their returns) in their gross income 
their entire pro rata shares, whether distributed or not, of the taxable 
income of the association or corporation for such year. Any amount so 
included in the gross income of a member shall be treated as a dividend 
received.

(e) Cooperative hospital service organizations

    For purposes of this title, an organization shall be treated as an 
organization organized and operated exclusively for charitable purposes, 
if--
        (1) such organization is organized and operated solely--
            (A) to perform, on a centralized basis, one or more of the 
        following services which, if performed on its own behalf by a 
        hospital which is an organization described in subsection (c)(3) 
        and exempt from taxation under subsection (a), would constitute 
        activities in exercising or performing the purpose or function 
        constituting the basis for its exemption: data processing, 
        purchasing (including the purchasing of insurance on a group 
        basis), warehousing, billing and collection (including the 
        purchase of patron accounts receivable on a recourse basis), 
        food, clinical, industrial engineering, laboratory, printing, 
        communications, record center, and personnel (including 
        selection, testing, training, and education of personnel) 
        services; and
            (B) to perform such services solely for two or more 
        hospitals each of which is--
                (i) an organization described in subsection (c)(3) which 
            is exempt from taxation under subsection (a),
                (ii) a constituent part of an organization described in 
            subsection (c)(3) which is exempt from taxation under 
            subsection (a) and which, if organized and operated as a 
            separate entity, would constitute an organization described 
            in subsection (c)(3), or
                (iii) owned and operated by the United States, a State, 
            the District of Columbia, or a possession of the United 
            States, or a political subdivision or an agency or 
            instrumentality of any of the foregoing;

        (2) such organization is organized and operated on a cooperative 
    basis and allocates or pays, within 8\1/2\ months after the close of 
    its taxable year, all net earnings to patrons on the basis of 
    services performed for them; and
        (3) if such organization has capital stock, all of such stock 
    outstanding is owned by its patrons.

For purposes of this title, any organization which, by reason of the 
preceding sentence, is an organization described in subsection (c)(3) 
and exempt from taxation under subsection (a), shall be treated as a 
hospital and as an organization referred to in section 
170(b)(1)(A)(iii).

(f) Cooperative service organizations of operating educational 
        organizations

    For purposes of this title, if an organization is--
        (1) organized and operated solely to hold, commingle, and 
    collectively invest and reinvest (including arranging for and 
    supervising the performance by independent contractors of investment 
    services related thereto) in stocks and securities, the moneys 
    contributed thereto by each of the members of such organization, and 
    to collect income therefrom and turn over the entire amount thereof, 
    less expenses, to such members,
        (2) organized and controlled by one or more such members, and
        (3) comprised solely of members that are organizations described 
    in clause (ii) or (iv) of section 170(b)(1)(A)--
            (A) which are exempt from taxation under subsection (a), or
            (B) the income of which is excluded from taxation under 
        section 115(a),

    then such organization shall be treated as an organization organized 
    and operated exclusively for charitable purposes.

(g) Definition of agricultural

    For purposes of subsection (c)(5), the term ``agricultural'' 
includes the art or science of cultivating land, harvesting crops or 
aquatic resources, or raising livestock.

(h) Expenditures by public charities to influence legislation

                          (1) General rule

        In the case of an organization to which this subsection applies, 
    exemption from taxation under subsection (a) shall be denied because 
    a substantial part of the activities of such organization consists 
    of carrying on propaganda, or otherwise attempting, to influence 
    legislation, but only if such organization normally--
            (A) makes lobbying expenditures in excess of the lobbying 
        ceiling amount for such organization for each taxable year, or
            (B) makes grass roots expenditures in excess of the grass 
        roots ceiling amount for such organization for each taxable 
        year.

                           (2) Definitions

        For purposes of this subsection--

        (A) Lobbying expenditures

            The term ``lobbying expenditures'' means expenditures for 
        the purpose of influencing legislation (as defined in section 
        4911(d)).

        (B) Lobbying ceiling amount

            The lobbying ceiling amount for any organization for any 
        taxable year is 150 percent of the lobbying nontaxable amount 
        for such organization for such taxable year, determined under 
        section 4911.

        (C) Grass roots expenditures

            The term ``grass roots expenditures'' means expenditures for 
        the purpose of influencing legislation (as defined in section 
        4911(d) without regard to paragraph (1)(B) thereof).

        (D) Grass roots ceiling amount

            The grass roots ceiling amount for any organization for any 
        taxable year is 150 percent of the grass roots nontaxable amount 
        for such organization for such taxable year, determined under 
        section 4911.

         (3) Organizations to which this subsection applies

        This subsection shall apply to any organization which has 
    elected (in such manner and at such time as the Secretary may 
    prescribe) to have the provisions of this subsection apply to such 
    organization and which, for the taxable year which includes the date 
    the election is made, is described in subsection (c)(3) and--
            (A) is described in paragraph (4), and
            (B) is not a disqualified organization under paragraph (5).

    (4) Organizations permitted to elect to have this subsection 
                                    apply

        An organization is described in this paragraph if it is 
    described in--
            (A) section 170(b)(1)(A)(ii) (relating to educational 
        institutions),
            (B) section 170(b)(1)(A)(iii) (relating to hospitals and 
        medical research organizations),
            (C) section 170(b)(1)(A)(iv) (relating to organizations 
        supporting government schools),
            (D) section 170(b)(1)(A)(vi) (relating to organizations 
        publicly supported by charitable contributions),
            (E) section 509(a)(2) (relating to organizations publicly 
        supported by admissions, sales, etc.), or
            (F) section 509(a)(3) (relating to organizations supporting 
        certain types of public charities) except that for purposes of 
        this subparagraph, section 509(a)(3) shall be applied without 
        regard to the last sentence of section 509(a).

                   (5) Disqualified organizations

        For purposes of paragraph (3) an organization is a disqualified 
    organization if it is--
            (A) described in section 170(b)(1)(A)(i) (relating to 
        churches),
            (B) an integrated auxiliary of a church or of a convention 
        or association of churches, or
            (C) a member of an affiliated group of organizations (within 
        the meaning of section 4911(f)(2)) if one or more members of 
        such group is described in subparagraph (A) or (B).

              (6) Years for which election is effective

        An election by an organization under this subsection shall be 
    effective for all taxable years of such organization which--
            (A) end after the date the election is made, and
            (B) begin before the date the election is revoked by such 
        organization (under regulations prescribed by the Secretary).

               (7) No effect on certain organizations

        With respect to any organization for a taxable year for which--
            (A) such organization is a disqualified organization (within 
        the meaning of paragraph (5)), or
            (B) an election under this subsection is not in effect for 
        such organization,

    nothing in this subsection or in section 4911 shall be construed to 
    affect the interpretation of the phrase, ``no substantial part of 
    the activities of which is carrying on propaganda, or otherwise 
    attempting, to influence legislation,'' under subsection (c)(3).

                    (8) Affiliated organizations

            For rules regarding affiliated organizations, see section 
        4911(f).

(i) Prohibition of discrimination by certain social clubs

    Notwithstanding subsection (a), an organization which is described 
in subsection (c)(7) shall not be exempt from taxation under subsection 
(a) for any taxable year if, at any time during such taxable year, the 
charter, bylaws, or other governing instrument, of such organization or 
any written policy statement of such organization contains a provision 
which provides for discrimination against any person on the basis of 
race, color, or religion. The preceding sentence to the extent it 
relates to discrimination on the basis of religion shall not apply to--
        (1) an auxiliary of a fraternal beneficiary society if such 
    society--
            (A) is described in subsection (c)(8) and exempt from tax 
        under subsection (a), and
            (B) limits its membership to the members of a particular 
        religion, or

        (2) a club which in good faith limits its membership to the 
    members of a particular religion in order to further the teachings 
    or principles of that religion, and not to exclude individuals of a 
    particular race or color.

(j) Special rules for certain amateur sports organizations

                           (1) In general

        In the case of a qualified amateur sports organization--
            (A) the requirement of subsection (c)(3) that no part of its 
        activities involve the provision of athletic facilities or 
        equipment shall not apply, and
            (B) such organization shall not fail to meet the 
        requirements of subsection (c)(3) merely because its membership 
        is local or regional in nature.

          (2) Qualified amateur sports organization defined

        For purposes of this subsection, the term ``qualified amateur 
    sports organization'' means any organization organized and operated 
    exclusively to foster national or international amateur sports 
    competition if such organization is also organized and operated 
    primarily to conduct national or international competition in sports 
    or to support and develop amateur athletes for national or 
    international competition in sports.

(k) Treatment of certain organizations providing child care

    For purposes of subsection (c)(3) of this section and sections 
170(c)(2), 2055(a)(2), and 2522(a)(2), the term ``educational purposes'' 
includes the providing of care of children away from their homes if--
        (1) substantially all of the care provided by the organization 
    is for purposes of enabling individuals to be gainfully employed, 
    and
        (2) the services provided by the organization are available to 
    the general public.

(l) Government corporations exempt under subsection (c)(1)

    For purposes of subsection (c)(1), the following organizations are 
described in this subsection:
        (1) The Central Liquidity Facility established under title III 
    of the Federal Credit Union Act (12 U.S.C. 1795 et seq.).
        (2) The Resolution Trust Corporation established under section 
    21A of the Federal Home Loan Bank Act.
        (3) The Resolution Funding Corporation established under section 
    21B of the Federal Home Loan Bank Act.

(m) Certain organizations providing commercial-type insurance not exempt 
        from tax

    (1) Denial of tax exemption where providing commercial-type 
                 insurance is substantial part of activities

        An organization described in paragraph (3) or (4) of subsection 
    (c) shall be exempt from tax under subsection (a) only if no 
    substantial part of its activities consists of providing commercial-
    type insurance.

      (2) Other organizations taxed as insurance companies on 
                             insurance business

        In the case of an organization described in paragraph (3) or (4) 
    of subsection (c) which is exempt from tax under subsection (a) 
    after the application of paragraph (1) of this subsection--
            (A) the activity of providing commercial-type insurance 
        shall be treated as an unrelated trade or business (as defined 
        in section 513), and
            (B) in lieu of the tax imposed by section 511 with respect 
        to such activity, such organization shall be treated as an 
        insurance company for purposes of applying subchapter L with 
        respect to such activity.

                    (3) Commercial-type insurance

        For purposes of this subsection, the term ``commercial-type 
    insurance'' shall not include--
            (A) insurance provided at substantially below cost to a 
        class of charitable recipients,
            (B) incidental health insurance provided by a health 
        maintenance organization of a kind customarily provided by such 
        organizations,
            (C) property or casualty insurance provided (directly or 
        through an organization described in section 414(e)(3)(B)(ii)) 
        by a church or convention or association of churches for such 
        church or convention or association of churches,
            (D) providing retirement or welfare benefits (or both) by a 
        church or a convention or association of churches (directly or 
        through an organization described in section 414(e)(3)(A) or 
        414(e)(3)(B)(ii)) for the employees (including employees 
        described in section 414(e)(3)(B)) of such church or convention 
        or association of churches or the beneficiaries of such 
        employees, and
            (E) charitable gift annuities.

                  (4) Insurance includes annuities

        For purposes of this subsection, the issuance of annuity 
    contracts shall be treated as providing insurance.

                     (5) Charitable gift annuity

        For purposes of paragraph (3)(E), the term ``charitable gift 
    annuity'' means an annuity if--
            (A) a portion of the amount paid in connection with the 
        issuance of the annuity is allowable as a deduction under 
        section 170 or 2055, and
            (B) the annuity is described in section 514(c)(5) 
        (determined as if any amount paid in cash in connection with 
        such issuance were property).

(n) Charitable risk pools

                           (1) In general

        For purposes of this title--
            (A) a qualified charitable risk pool shall be treated as an 
        organization organized and operated exclusively for charitable 
        purposes, and
            (B) subsection (m) shall not apply to a qualified charitable 
        risk pool.

                 (2) Qualified charitable risk pool

        For purposes of this subsection, the term ``qualified charitable 
    risk pool'' means any organization--
            (A) which is organized and operated solely to pool insurable 
        risks of its members (other than risks related to medical 
        malpractice) and to provide information to its members with 
        respect to loss control and risk management,
            (B) which is comprised solely of members that are 
        organizations described in subsection (c)(3) and exempt from tax 
        under subsection (a), and
            (C) which meets the organizational requirements of paragraph 
        (3).

                   (3) Organizational requirements

        An organization (hereinafter in this subsection referred to as 
    the ``risk pool'') meets the organizational requirements of this 
    paragraph if--
            (A) such risk pool is organized as a nonprofit organization 
        under State law provisions authorizing risk pooling arrangements 
        for charitable organizations,
            (B) such risk pool is exempt from any income tax imposed by 
        the State (or will be so exempt after such pool qualifies as an 
        organization exempt from tax under this title),
            (C) such risk pool has obtained at least $1,000,000 in 
        startup capital from nonmember charitable organizations,
            (D) such risk pool is controlled by a board of directors 
        elected by its members, and
            (E) the organizational documents of such risk pool require 
        that--
                (i) each member of such pool shall at all times be an 
            organization described in subsection (c)(3) and exempt from 
            tax under subsection (a),
                (ii) any member which receives a final determination 
            that it no longer qualifies as an organization described in 
            subsection (c)(3) shall immediately notify the pool of such 
            determination and the effective date of such determination, 
            and
                (iii) each policy of insurance issued by the risk pool 
            shall provide that such policy will not cover the insured 
            with respect to events occurring after the date such final 
            determination was issued to the insured.

    An organization shall not cease to qualify as a qualified charitable 
    risk pool solely by reason of the failure of any of its members to 
    continue to be an organization described in subsection (c)(3) if, 
    within a reasonable period of time after such pool is notified as 
    required under subparagraph (E)(ii), such pool takes such action as 
    may be reasonably necessary to remove such member from such pool.

                        (4) Other definitions

        For purposes of this subsection--

        (A) Startup capital

            The term ``startup capital'' means any capital contributed 
        to, and any program-related investments (within the meaning of 
        section 4944(c)) made in, the risk pool before such pool 
        commences operations.

        (B) Nonmember charitable organization

            The term ``nonmember charitable organization'' means any 
        organization which is described in subsection (c)(3) and exempt 
        from tax under subsection (a) and which is not a member of the 
        risk pool and does not benefit (directly or indirectly) from the 
        insurance coverage provided by the pool to its members.

(o) Treatment of hospitals participating in provider-sponsored 
        organizations

    An organization shall not fail to be treated as organized and 
operated exclusively for a charitable purpose for purposes of subsection 
(c)(3) solely because a hospital which is owned and operated by such 
organization participates in a provider-sponsored organization (as 
defined in section 1855(d) of the Social Security Act), whether or not 
the provider-sponsored organization is exempt from tax. For purposes of 
subsection (c)(3), any person with a material financial interest in such 
a provider-sponsored organization shall be treated as a private 
shareholder or individual with respect to the hospital.

(p) Cross reference

            For nonexemption of Communist-controlled organizations, see 
        section 11(b) of the Internal Security Act of 1950 (64 Stat. 
        997; 50 U.S.C. 790(b)).

(Aug. 16, 1954, ch. 736, 68A Stat. 163; Mar. 13, 1956, ch. 83, 
Sec. 5(2), 70 Stat. 49; Pub. L. 86-428, Sec. 1, Apr. 22, 1960, 74 Stat. 
54; Pub. L. 86-667, Sec. 1, July 14, 1960, 74 Stat. 534; Pub. L. 87-834, 
Sec. 8(d), Oct. 16, 1962, 76 Stat. 997; Pub. L. 89-352, Sec. 1, Feb. 2, 
1966, 80 Stat. 4; Pub. L. 89-800, Sec. 6(a), Nov. 8, 1966, 80 Stat. 
1515; Pub. L. 90-364, title I, Sec. 109(a), June 28, 1968, 82 Stat. 269; 
Pub. L. 91-172, title I, Secs. 101(j)(3)-(6), 121(b)(5)(A), (6)(A), Dec. 
30, 1969, 83 Stat. 526, 527, 541; Pub. L. 91-618, Sec. 1, Dec. 31, 1970, 
84 Stat. 1855; Pub. L. 92-418, Sec. 1(a), Aug. 29, 1972, 86 Stat. 656; 
Pub. L. 93-310, Sec. 3(a), June 8, 1974, 88 Stat. 235; Pub. L. 93-625, 
Sec. 10(c), Jan. 3, 1975, 88 Stat. 2119; Pub. L. 94-455, title XIII, 
Secs. 1307(a)(1), (d)(1)(A), 1312(a), 1313(a), title XIX, 
Sec. 1906(b)(13)(A), title XXI, Secs. 2113(a), 2134(b), Oct. 4, 1976, 90 
Stat. 1720, 1727, 1730, 1834, 1907, 1927; Pub. L. 94-568, Secs. 1(a), 
2(a), Oct. 20, 1976, 90 Stat. 2697; Pub. L. 95-227, Sec. 4(a), Feb. 10, 
1978, 92 Stat. 15; Pub. L. 95-345, Sec. 1(a), Aug. 15, 1978, 92 Stat. 
481; Pub. L. 95-600, title VII, Sec. 703(b)(2), (g)(2)(A), (B), Nov. 6, 
1978, 92 Stat. 2939, 2940; Pub. L. 96-222, title I, Sec. 108(b)(2)(B), 
Apr. 1, 1980, 94 Stat. 226; Pub. L. 96-364, title II, Sec. 209(a), Sept. 
26, 1980, 94 Stat. 1290; Pub. L. 96-601, Sec. 3(a), Dec. 24, 1980, 94 
Stat. 3496; Pub. L. 96-605, title I, Sec. 106(a), Dec. 28, 1980, 94 
Stat. 3523; Pub. L. 97-119, title I, Sec. 103(c)(1), Dec. 29, 1981, 95 
Stat. 1638; Pub. L. 97-248, title II, Sec. 286(a), title III, 
Sec. 354(a), (b), Sept. 3, 1982, 96 Stat. 569, 640, 641; Pub. L. 97-448, 
title III, Sec. 306(b)(5), Jan. 12, 1983, 96 Stat. 2406; Pub. L. 98-369, 
div. A, title X, Secs. 1032(a), 1079, div. B, title VIII, Sec. 2813(b), 
July 18, 1984, 98 Stat. 1033, 1056, 1206; Pub. L. 99-272, title XI, 
Sec. 11012(b), Apr. 7, 1986, 100 Stat. 260; Pub. L. 99-514, title X, 
Secs. 1012(a), 1024(b), title XI, Secs. 1109(a), 1114(b)(14), title XVI, 
Sec. 1603(a), title XVIII, Secs. 1879(k)(1), 1899A(15), Oct. 22, 1986, 
100 Stat. 2390, 2406, 2435, 2451, 2768, 2909, 2959; Pub. L. 100-203, 
title X, Sec. 10711(a)(2), Dec. 22, 1987, 101 Stat. 1330-464; Pub. L. 
100-647, title I, Secs. 1010(b)(4), 1011(c)(7)(D), 1016(a)(1)(A), (2)-
(4), 1018(u)(14), (15), (34), title II, Sec. 2003(a)(1), (2), title VI, 
Sec. 6202(a), Nov. 10, 1988, 102 Stat. 3451, 3458, 3573, 3574, 3590, 
3592, 3597, 3598, 3730; Pub. L. 101-73, title XIV, Sec. 1402(a), Aug. 9, 
1989, 103 Stat. 550; Pub. L. 102-486, title XIX, Sec. 1940(a), Oct. 24, 
1992, 106 Stat. 3034; Pub. L. 103-66, title XIII, Sec. 13146(a), (b), 
Aug. 10, 1993, 107 Stat. 443; Pub. L. 104-168, title XIII, 
Sec. 1311(b)(1), July 30, 1996, 110 Stat. 1477; Pub. L. 104-188, title 
I, Secs. 1114(a), 1704(j)(5), Aug. 20, 1996, 110 Stat. 1759, 1882; Pub. 
L. 104-191, title III, Secs. 341(a), 342(a), Aug. 21, 1996, 110 Stat. 
2070; Pub. L. 105-33, title IV, Sec. 4041(a), Aug. 5, 1997, 111 Stat. 
360; Pub. L. 105-34, title I, Sec. 101(c), title IX, Secs. 963(a), (b), 
974(a), Aug. 5, 1997, 111 Stat. 799, 892, 898; Pub. L. 105-206, title 
VI, Sec. 6023(6), (7), July 22, 1998, 112 Stat. 825.)

                       References in Text

    Sections 306A, 306B, and 311 of the Rural Electrification Act of 
1936, referred to in subsec. (c)(12)(B)(iv), (C)(ii), are classified to 
sections 936a and 936b, respectively, of Title 7, Agriculture. Section 
311 of the Act was classified to section 940a of Title 7 prior to repeal 
by Pub. L. 104-127, title VII, Sec. 780, Apr. 4, 1996, 110 Stat. 1151.
    The date of the enactment of this subparagraph, referred to in 
subsec. (c)(21)(C)(ii), is the date of enactment of Pub. L. 102-486, 
which was approved Oct. 24, 1992.
    The Federal Mine Safety and Health Act of 1977, referred to in 
subsec. (c)(21)(D)(i), is Pub. L. 91-173, Dec. 30, 1969, 83 Stat. 742, 
as amended by Pub. L. 95-164, Nov. 9, 1977, 91 Stat. 1290. Part C of 
title IV of the Act is classified generally to part C (Sec. 931 et seq.) 
of subchapter IV of chapter 22 of Title 30, Mineral Lands and Mining. 
For complete classification of this Act to the Code, see Short Title 
note set out under section 801 of Title 30 and Tables.
    Section 4223 of the Employee Retirement Income Security Act of 1974, 
referred to in subsec. (c)(22)(A)(i), (C), (D), is classified to section 
1403 of Title 29, Labor.
    Section 4049 of the Employee Retirement Income Security Act of 1974, 
referred to in subsec. (c)(24), was classified to section 1349 of Title 
29, prior to its repeal by Pub. L. 100-203, title IX, Sec. 9312(a), Dec. 
22, 1987, 101 Stat. 1330-361.
    The date of the enactment of the Single-Employer Pension Plan 
Amendments Act of 1986, referred to in subsec. (c)(24), is the date of 
enactment of title XI of Pub. L. 99-272, which was approved Apr. 7, 
1986.
    The date of enactment of this subparagraph, referred to in subsec. 
(c)(27)(B)(iii)(I), is the date of enactment of Pub. L. 105-34, which 
was approved Aug. 5, 1997.
    The provisions of subsec. (a) of section 115, referred to in subsec. 
(f)(3)(B), now comprise section 115 in its entirety, following the 
deletion therefrom of the subsec. (a) designation by section 1901(a)(19) 
of Pub. L. 94-455.
    The Federal Credit Union Act, referred to in subsec. (l)(1), is act 
June 26, 1934, ch. 750, 48 Stat. 1216, as amended. Title III of the 
Federal Credit Union Act is classified generally to subchapter III 
(Sec. 1795 et seq.) of chapter 14 of Title 12, Banks and Banking. For 
complete classification of this Act to the Code, see section 1751 of 
Title 12 and Tables.
    Sections 21A and 21B of the Federal Home Loan Bank Act, referred to 
in subsec. (l)(2), (3), are classified to sections 1441a and 1441b, 
respectively, of Title 12.
    Section 1855(d) of the Social Security Act, referred to in subsec. 
(o), is classified to section 1395w-25(d) of Title 42, The Public Health 
and Welfare.
    Section 11(b) of the Internal Security Act of 1950 (64 Stat. 997; 50 
U.S.C. 790(b)), referred to in subsec. (p), was repealed by Pub. L. 103-
199, title VIII, Sec. 803(1), Dec. 17, 1993, 107 Stat. 2329.


                               Amendments

    1998--Subsec. (n)(3). Pub. L. 105-206, Sec. 6023(6), substituted 
``subparagraph (E)(ii)'' for ``subparagraph (C)(ii)'' in concluding 
provisions.
    Subsec. (o). Pub. L. 105-206, Sec. 6023(7), substituted ``section 
1855(d)'' for ``section 1853(e)''.
    1997--Subsec. (c)(26). Pub. L. 105-34, Sec. 101(c), inserted 
concluding provisions ``A spouse and any qualifying child (as defined in 
section 24(c)) of an individual described in subparagraph (B) (without 
regard to this sentence) shall be treated as described in subparagraph 
(B).''
    Subsec. (c)(27). Pub. L. 105-34, Sec. 963(a), (b), designated 
existing provisions as subpar. (A), redesignated former subpar. (A) as 
cl. (i), redesignated subpar. (B) as cl. (ii) and former cls. (i) and 
(ii) of subpar. (B) as subcls. (I) and (II), respectively, of cl. (ii), 
redesignated subpar. (C) as cl. (iii) and former cls. (i) and (ii) of 
subpar. (C) as subcls. (I) and (II), respectively, of cl. (iii), and 
added subpar. (B).
    Subsec. (e)(1)(A). Pub. L. 105-34, Sec. 974(a), inserted 
``(including the purchase of patron accounts receivable on a recourse 
basis)'' after ``billing and collection''.
    Subsecs. (o), (p). Pub. L. 105-33 added subsec. (o) and redesignated 
former subsec. (o) as (p).
    1996--Subsec. (c)(4). Pub. L. 104-168 designated existing provisions 
as subpar. (A) and added subpar. (B).
    Subsec. (c)(21)(D)(ii)(III). Pub. L. 104-188, Sec. 1704(j)(5), 
substituted ``section 101(7)'' for ``section 101(6)'' and ``1752(7)'' 
for ``1752(6)''.
    Subsec. (c)(26). Pub. L. 104-191, Sec. 341(a), added par. (26).
    Subsec. (c)(27). Pub. L. 104-191, Sec. 342(a), added par. (27).
    Subsecs. (n), (o). Pub. L. 104-188, Sec. 1114(a), added subsec. (n) 
and redesignated former subsec. (n) as (o).
    1993--Subsec. (c)(2). Pub. L. 103-66, Sec. 13146(b), inserted at end 
``Rules similar to the rules of subparagraph (G) of paragraph (25) shall 
apply for purposes of this paragraph.''
    Subsec. (c)(25)(G). Pub. L. 103-66, Sec. 13146(a), added subpar. 
(G).
    1992--Subsec. (c)(21). Pub. L. 102-486 amended par. (21) generally, 
substituting present provisions consisting of subpars. (A) to (D) for 
former provisions consisting of subpars. (A) and (B).
    1989--Subsec. (l). Pub. L. 101-73 amended subsec. (l) generally. 
Prior to amendment, subsec. (l) read as follows: ``The organization 
described in this subsection is the Central Liquidity Facility 
established under title III of the Federal Credit Union Act (12 U.S.C. 
1795 et seq.).''
    1988--Subsec. (c)(1). Pub. L. 100-647, Sec. 1018(u)(15), substituted 
``Any'' for ``any''.
    Subsec. (c)(12)(B)(iv). Pub. L. 100-647, Sec. 2003(a)(1), added cl. 
(iv).
    Subsec. (c)(12)(C). Pub. L. 100-647, Sec. 2003(a)(2), amended 
subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: 
``In the case of a mutual or cooperative electric company, subparagraph 
(A) shall be applied without taking into account any income received or 
accrued from qualified pole rentals.''
    Subsec. (c)(17)(A)(ii), (iii), (18)(B), (C). Pub. L. 100-647, 
Sec. 1018(u)(34), made technical amendments to Pub. L. 99-154, 
Sec. 1114(b)(14). See 1986 Amendment note below.
    Subsec. (c)(18)(D)(iv). Pub. L. 100-647, Sec. 1011(c)(7)(D), added 
cl. (iv).
    Subsec. (c)(23). Pub. L. 100-647, Sec. 1018(u)(14), substituted 
``Any'' for ``any''.
    Subsec. (c)(25)(A). Pub. L. 100-647, Sec. 1016(a)(1)(A), inserted at 
end ``For purposes of clause (iii), the term `real property' shall not 
include any interest as a tenant in common (or similar interest) and 
shall not include any indirect interest.''
    Subsec. (c)(25)(C)(v). Pub. L. 100-647, Sec. 1016(a)(3)(B), struck 
out cl. (v) which read as follows: ``any organization described in this 
paragraph.''
    Subsec. (c)(25)(D). Pub. L. 100-647, Sec. 1016(a)(2), substituted 
``A corporation or trust shall in no event be treated as described in 
subparagraph (A) unless such corporation or trust permits its 
shareholders or beneficiaries'' for ``A corporation or trust described 
in this paragraph must permit its shareholders or beneficiaries'' in 
introductory text.
    Subsec. (c)(25)(E), (F). Pub. L. 100-647, Sec. 1016(a)(3)(A), (4), 
added subpars. (E) and (F).
    Subsec. (e)(1)(A). Pub. L. 100-647, Sec. 6202(a), inserted 
``(including the purchasing of insurance on a group basis)'' after 
``purchasing''.
    Subsec. (m)(3)(E). Pub. L. 100-647, Sec. 1010(b)(4)(A), added 
subpar. (E).
    Subsec. (m)(5). Pub. L. 100-647, Sec. 1010(b)(4)(B), added par. (5).
    1987--Subsec. (c)(3). Pub. L. 100-203 inserted ``(or in opposition 
to)'' after ``in behalf of''.
    1986--Subsec. (c)(1)(A)(i). Pub. L. 99-514, Sec. 1899A(15), 
substituted ``July 18, 1984'' for ``the date of the enactment of the Tax 
Reform Act of 1984''.
    Subsec. (c)(14)(B)(iv). Pub. L. 99-514, Sec. 1879(k)(1), added cl. 
(iv).
    Subsec. (c)(15). Pub. L. 99-514, Sec. 1024(b), amended par. (15) 
generally. Prior to amendment, par. (15) read as follows: ``Mutual 
insurance companies or associations other than life or marine (including 
inter-insurers and reciprocal underwriters) if the gross amount received 
during the taxable year from the items described in section 822(b) 
(other than paragraph (1)(D) thereof) and premiums (including deposits 
and assessments) does not exceed $150,000.''
    Subsec. (c)(17)(A)(ii), (iii), (18)(B), (C). Pub. L. 99-514, 
Sec. 1114(b)(14), as amended by Pub. L. 100-647, Sec. 1018(u)(34), 
substituted ``highly compensated employees (within the meaning of 
section 414(q))'' for ``officers, shareholders, persons whose principal 
duties consist of supervising the work of other employees, or highly 
compensated employees''.
    Subsec. (c)(18)(D). Pub. L. 99-514, Sec. 1109(a), added subpar. (D).
    Subsec. (c)(24). Pub. L. 99-272 added par. (24).
    Subsec. (c)(25). Pub. L. 99-514, Sec. 1603(a), added par. (25).
    Subsecs. (m), (n). Pub. L. 99-514, Sec. 1012(a), added subsec. (m) 
and redesignated former subsec. (m) as (n).
    1984--Subsec. (c)(1). Pub. L. 98-369, Sec. 2813(b)(2), designated 
existing provisions as subpar. (A) and added subpar. (B).
    Subsec. (c)(1)(A). Pub. L. 98-369, Sec. 1079, substituted provisions 
referring to corporations exempt from Federal income taxes under any Act 
of Congress as amended and supplemented before July 18, 1984, or under 
this title without regard to any provision of law not contained in this 
title and not contained in a revenue Act for provisions referring to 
corporations exempt from Federal income taxes under any Act of Congress 
as amended and supplemented.
    Subsec. (k). Pub. L. 98-369, Sec. 1032(a), added subsec. (k). Former 
subsec. (k) redesignated (l).
    Subsec. (l). Pub. L. 98-369, Sec. 2813(b)(1), added subsec. (l). 
Former subsec. (l) redesignated (m).
    Pub. L. 98-369, Sec. 1032(a), redesignated former subsec. (k) as 
(l).
    Subsec. (m). Pub. L. 98-369, Sec. 2813(b)(1), redesignated former 
subsec. (l) as (m).
    1983--Subsec. (c)(23). Pub. L. 97-448 substituted ``75 percent'' for 
``25 percent''.
    1982--Subsec. (c)(19). Pub. L. 97-248, Sec. 354(a)(1), substituted 
``past or present members of the Armed Forces of the United States'' for 
``war veterans'' after ``A post or organization of''.
    Subsec. (c)(19)(B). Pub. L. 97-248, Sec. 354(a)(2), substituted 
``past or present members of the Armed Forces of the United States'' for 
``war veterans'' wherever appearing, struck out ``veterans (but not war 
veterans), or are'' after ``individuals who are'', and substituted ``or 
of cadets'' for ``or such individuals'' before ``, and''.
    Subsec. (c)(23). Pub. L. 97-248, Sec. 354(b), added par. (23).
    Subsecs. (j), (k). Pub. L. 97-248, Sec. 286(a), added subsec. (j) 
and redesignated former subsec. (j) as (k).
    1981--Subsec. (c)(21)(B)(iii). Pub. L. 97-119 substituted 
``established under section 9501'' for ``established under section 3 of 
the Black Lung Benefits Revenue Act of 1977''.
    1980--Subsec. (c)(12). Pub. L. 96-605 designated existing provision 
as subpar. (A), struck out provision that, in the case of any mutual or 
cooperative telephone company, the 85 per cent or more income 
requirement be applied without taking into account any income received 
or accrued from a nonmember telephone company for the performance of 
communication services which involve members of such mutual or 
cooperative telephone company, and added subpars. (B) to (D).
    Subsec. (c)(21). Pub. L. 96-222 substituted ``Federal Mine Safety 
and Health Act of 1977'' for ``Federal Coal Mine Health and Safety Act 
of 1969''.
    Subsec. (c)(22). Pub. L. 96-364 added par. (22).
    Subsec. (i). Pub. L. 96-601 inserted provision that the restriction 
on religious discrimination not apply to an auxiliary of a fraternal 
beneficiary society if the society is described in subsec. (c)(8) of 
this section, is exempt from income tax under subsec. (a) of this 
section, and limits its membership to the members of a particular 
religion or to a club which in good faith limits its membership to the 
members of a particular religion in order to further the teachings or 
principles of that religion, and not to exclude individuals of a 
particular race or color.
    1978--Subsec. (c)(12). Pub. L. 95-345 inserted provision relating to 
applicability of statutory provisions to mutual or cooperative telephone 
company of income received or accrued from a nonmember telephone 
company.
    Subsec. (c)(20). Pub. L. 95-600, Sec. 703(b)(2), substituted ``this 
paragraph'' for ``section 501(c)(20)''.
    Subsec. (c)(21). Pub. L. 95-227 added par. (21).
    Subsecs. (g), (i). Pub. L. 95-600, Sec. 703(g)(2)(B), redesignated 
subsec. (g), which was added by section 2(a) of Pub. L. 94-568, as 
subsec. (i). Former subsec. (i), relating to cross reference, 
redesignated (j).
    Subsecs. (i), (j). Pub. L. 95-600, Sec. 703(g)(2)(A), amended Pub. 
L. 95-600, Sec. 2(a). See 1976 Amendment note below.
    1976--Subsec. (c)(3). Pub. L. 94-455, Secs. 1313(a), 1307(d)(1)(A), 
inserted ``or to foster national or international amateur sports 
competition (but only if no part of its activities involve the provision 
of athletic facilities or equipment)'' after ``educational purposes'' 
and inserted ``(except as otherwise provided in subsection (h))'' after 
``influence legislation''.
    Subsec. (c)(7). Pub. L. 94-568, Sec. 1(a), struck out requirement 
that clubs be ``operated exclusively'' for specified purposes but 
required that substantially all of club activities be for specified 
purposes.
    Subsec. (c)(17), (18). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck 
out ``or his delegate'' after ``Secretary''.
    Subsec. (c)(20). Pub. L. 94-455, Sec. 2134(b), added par. (20).
    Subsec. (e)(1)(A). Pub. L. 94-455, Sec. 1312(a), inserted 
``clinical'' after ``food''.
    Subsec. (g). Pub. L. 94-568, Sec. 2(a), added subsec. (g) relating 
to prohibition of discrimination by certain social clubs.
    Pub. L. 94-455, Sec. 2113(a), added subsec. (g) defining 
agricultural. Former subsec. (g) redesignated (h).
    Subsec. (h). Pub. L. 94-455, Secs. 1307(a)(1), 2113(a), added 
subsec. (h). Former subsec. (g), relating to cross reference, 
redesignated (h) and further redesignated (i).
    Subsec. (i). Pub. L. 94-568, Sec. 2(a), as amended by Pub. L. 95-
600, Sec. 703(g)(2)(A), added subsec. (i). Former subsec. (i) 
redesignated (j).
    Pub. L. 94-455, Sec. 1307(a)(1), redesignated subsec. (h), relating 
to cross reference, as (i).
    Subsec. (j). Pub. L. 94-568, Sec. 2(a), as amended by Pub. L. 95-
600, Sec. 703(g)(2)(A), redesignated subsec. (i), relating to cross 
reference, as (j).
    1975--Subsec. (b). Pub. L. 93-625 inserted references to part VI of 
this subchapter.
    1974--Subsecs. (f), (g). Pub. L. 93-310 added subsec. (f) and 
redesignated former subsec. (f) as (g).
    1972--Subsec. (c)(19). Pub. L. 92-418 added par. (19).
    1970--Subsec. (c)(13). Pub. L., 91-618 substituted ``corporation 
chartered solely for the purpose of disposal of bodies by burial or 
cremation which is not permitted'' for ``corporation chartered solely 
for burial purposes as a cemetery corporation and is not permitted''.
    1969--Subsec. (a). Pub. L. 91-172, Sec. 101(j)(3), struck out 
reference to section 504.
    Subsec. (b). Pub. L. 91-172, Sec. 101(j)(4), inserted reference to 
certain other activities in heading and to part III in text, and struck 
out reference to tax on unrelated income.
    Subsec. (c). Pub. L. 91-172, Secs. 101(j)(5), 121(b)(6)(A), 
substituted ``part IV'' for ``part III'' after ``Corporations organized 
by an association subject to'' and added par. 18.
    Subsec. (c)(9). Pub. L. 91-172, Sec. 121(b)(5)(A), inserted 
reference to designated beneficiaries and struck out reference to 85 
percent or more income of voluntary employees' beneficiary associations.
    Subsec. (c)(10). Pub. L. 91-172, Sec. 121(b)(5)(A), substituted 
provisions concerning domestic fraternal societies, orders, or 
associations, operating under the lodge system, for provisions covering 
voluntary employees' beneficiary associations which would pay benefits 
to designated beneficiaries of members.
    Subsec. (e). Pub. L. 91-172, Sec. 101(j)(6), substituted ``section 
170(b)(1)(A)(iii)'' for ``section 503(b)(5)'' in last sentence.
    1968--Subsecs. (e), (f). Pub. L. 90-364 added subsec. (e) and 
redesignated former subsec. (e) as (f).
    1966--Subsec. (c)(6). Pub. L. 89-800 inserted reference to 
professional football leagues (whether or not administering a pension 
fund for football players).
    Subsec. (c)(14). Pub. L. 89-352 designated as subpar. (A) provisions 
covering credit unions which were formerly set out preceding subpar. 
(A), designated as subpar. (B) and clauses (i), (ii), and (iii) 
thereunder provisions covering corporation or associations without 
capital stock organized before Sept. 1, 1957, which formerly were set 
out as provisions preceding subpar. (A) and as subpars. (A), (B), and 
(C) respectively, and added subpar. (C).
    1962--Subsec. (c)(15). Pub. L. 87-834 substituted ``$150,000'' for 
``$75,000''.
    1960--Subsec. (c)(14). Pub. L. 86-428 substituted ``September 1, 
1957'' for ``September 1, 1951''.
    Subsec. (c)(17). Pub. L. 86-667 added par. (17).
    1956--Subsec. (c)(15). Act Mar. 13, 1956, substituted ``the items 
described in section 822(b) (other than paragraph (1)(D) thereof)'' for 
``interest, dividends, rents,''.


                    Effective Date of 1997 Amendments

    Amendment by section 101(c) of Pub. L. 105-34 applicable to taxable 
years beginning after Dec. 31, 1997, see section 101(e) of Pub. L. 105-
34, set out as an Effective Date note under section 24 of this title.
    Section 963(c) of Pub. L. 105-34 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1997.''
    Section 974(b) of Pub. L. 105-34 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after December 31, 1996.''
    Section 4041(b) of Pub. L. 105-33 provided that: ``The amendment 
made by subsection (a) [amending this section] shall take effect on the 
date of the enactment of this Act [Aug. 5, 1997].''


                    Effective Date of 1996 Amendments

    Section 341(b) of Pub. L. 104-191 provided that: ``The amendment 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1996.''
    Section 342(b) of Pub. L. 104-191 provided that: ``The amendment 
made by this section [amending this section] shall apply to taxable 
years ending after the date of the enactment of this Act [Aug. 21, 
1996].''
    Section 1114(b) of Pub. L. 104-188 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to taxable 
years beginning after the date of the enactment of this Act [Aug. 20, 
1996].''
    Section 1311(d)(3) of Pub. L. 104-168 provided that:
    ``(A) In general.--The amendment made by subsection (b) [amending 
this section] shall apply to inurement occurring on or after September 
14, 1995.
    ``(B) Binding contracts.--The amendment made by subsection (b) shall 
not apply to any inurement occurring before January 1, 1997, pursuant to 
a written contract which was binding on September 13, 1995, and at all 
times thereafter before such inurement occurred.''


                    Effective Date of 1993 Amendment

    Section 13146(c) of Pub. L. 103-66 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning on or after January 1, 1994.''


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-486 applicable to taxable years beginning 
after Dec. 31, 1991, see section 1940(d) of Pub. L. 102-486, set out as 
a note under section 192 of this title.


                    Effective Date of 1989 Amendment

    Section 1402(b) of Pub. L. 101-73 provided that: ``The amendment 
made by subsection (a) [amending this section] shall take effect on the 
date of the enactment of this Act [Aug. 9, 1989].''


                    Effective Date of 1988 Amendment

    Amendment by section 1011(c)(7)(D) of Pub. L. 100-647 applicable to 
plan years beginning after Dec. 31, 1987, with exception in case of a 
plan described in section 1105(c)(2) of Pub. L. 99-514, see section 
1011(c)(7)(E) of Pub. L. 100-647, set out as a note under section 401 of 
this title.
    Section 1016(a)(1)(B) of Pub. L. 100-647 provided that: ``The 
amendment made by subparagraph (A) [amending this section] shall apply 
with respect to property acquired by the organization after June 10, 
1987, except that such amendment shall not apply to any property 
acquired after June 10, 1987, pursuant to a binding written contract in 
effect on June 10, 1987, and at all times thereafter before such 
acquisition.''
    Amendment by sections 1010(b)(4), 1016(a)(2)-(4), and 1018(u)(14), 
(15), (34) of Pub. L. 100-647 effective, except as otherwise provided, 
as if included in the provision of the Tax Reform Act of 1986, Pub. L. 
99-514, to which such amendment relates, see section 1019(a) of Pub. L. 
100-647, set out as a note under section 1 of this title.
    Section 2003(a)(3) of Pub. L. 100-647 provided that: ``The 
amendments made by this subsection [amending this section] shall apply 
to taxable years ending after the date of the enactment of the Omnibus 
Budget Reconciliation Act of 1986 [Oct. 21, 1986].''
    Section 6202(b) of Pub. L. 100-647 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to purchases 
before, on, or after the date of the enactment of this Act [Nov. 10, 
1988].''


                    Effective Date of 1987 Amendment

    Amendment by Pub. L. 100-203 applicable with respect to activities 
after Dec. 22, 1987, see section 10711(c) of Pub. L. 100-203, set out as 
a note under section 170 of this title.


                    Effective Date of 1986 Amendments

    Amendment by section 1012(a) of Pub. L. 99-514 applicable to taxable 
years beginning after Dec. 31, 1986, see section 1012(c) of Pub. L. 99-
514, set out as an Effective Date note under section 833 of this title.
    Amendment by section 1024(b) of Pub. L. 99-514 applicable to taxable 
years beginning after Dec. 31, 1986, see section 1024(e) of Pub. L. 99-
514, set out as a note under section 831 of this title.
    Amendment by section 1109(a) of Pub. L. 99-514 applicable to taxable 
years beginning after Dec. 31, 1986, see section 1109(c) of Pub. L. 99-
514, set out as a note under section 219 of this title.
    Amendment by section 1114(b)(14) of Pub. L. 99-514 applicable to 
years beginning after Dec. 31, 1986, see section 1114(c)(1) of Pub. L. 
99-514, set out as a note under section 414 of this title.
    Section 1603(c) of Pub. L. 99-514 provided that: ``The amendments 
made by this section [amending this section and section 514 of this 
title] shall apply to taxable years beginning after December 31, 1986.''
    Section 1879(k)(2) of Pub. L. 99-514 provided that: ``The amendments 
made by this subsection [amending this section] shall apply to taxable 
years ending after August 13, 1981.''
    Amendment by Pub. L. 99-272 effective Jan. 1, 1986, with certain 
exceptions, see section 11019 of Pub. L. 99-272, set out as a note under 
section 1341 of Title 29, Labor.


                    Effective Date of 1984 Amendment

    Amendment by section 1032 of Pub. L. 98-369 applicable to taxable 
years beginning after July 18, 1984, see section 1032(c) of Pub. L. 98-
369, set out as a note under section 170 of this title.
    Amendment by section 2813(b) of Pub. L. 98-369 effective Oct. 1, 
1979, see section 2813(c) of Pub. L. 98-369, set out as an Effective 
Date note under section 1795k of Title 12, Banks and Banking.


                    Effective Date of 1983 Amendment

    Amendment by Pub. L. 97-448 effective as if included in the 
provisions of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. 
L. 97-248, to which such amendment relates, see section 311(d) of Pub. 
L. 97-448, set out as a note under section 31 of this title.


                    Effective Date of 1982 Amendment

    Section 286(c) of Pub. L. 97-248 provided that: ``The amendments 
made by this section [amending this section and sections 170, 2055, and 
2522 of this title] shall take effect on October 5, 1976.''
    Section 354(c) of Pub. L. 97-248 provided that: ``The amendments 
made by subsections (a) and (b) [amending this section] shall apply to 
taxable years beginning after the date of the enactment of this Act 
[Sept. 3, 1982].''


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-119 effective Jan. 1, 1982, see section 
103(d)(1) of Pub. L. 97-119, set out as an Effective Date note under 
section 9501 of this title.


                    Effective Date of 1980 Amendments

    Section 106(c)(1) of Pub. L. 96-605, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply to all 
taxable years to which the Internal Revenue Code of 1986 [formerly 
I.R.C. 1954] applies.''
    Section 3(b) of Pub. L. 96-601 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after October 20, 1976.''
    Amendment by Pub. L. 96-364 applicable to taxable years ending after 
Sept. 26, 1980, see section 210(c) of Pub. L. 96-364, set out as an 
Effective Date note under section 418 of this title.
    Amendment by Pub. L. 96-222 effective, except as otherwise provided, 
as if it had been included in the provisions of the Revenue Act of 1978, 
Pub. L. 95-600, to which such amendment relates, see section 201 of Pub. 
L. 96-222, set out as an Effective Date of 1980 Amendment note under 
section 32 of this title.


                    Effective Date of 1978 Amendments

    Amendment by section 703(b)(2), (g)(2)(B) of Pub. L. 95-600 
effective on Oct. 4, 1976, see section 703(r) of Pub. L. 95-600, set out 
as a note under section 46 of this title.
    Section 703(g)(2)(C) of Pub. L. 95-600 provided that: ``The 
amendments made by this paragraph [amending this section] shall take 
effect on October 20, 1976, as if included in Public Law 94-568.''
    Section 1(b) of Pub. L. 95-345 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after December 31, 1974.''
    Amendment by Pub. L. 95-227 applicable with respect to 
contributions, acts, and expenditures made after Dec. 31, 1977, in and 
for taxable years beginning after such date, see section 4(f) of Pub. L. 
95-227, set out as a note under section 192 of this title.


                    Effective Date of 1976 Amendments

    Section 1(d) of Pub. L. 94-568 provided that: ``The amendments made 
by this section [amending this section and sections 277 and 512 of this 
title] shall apply to taxable years beginning after the date of the 
enactment of this Act [Oct. 20, 1976].''
    Section 2(b) of Pub. L. 94-568 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after the date of the enactment of this Act [Oct. 20, 1976].''
    Section 1307(e) of Pub. L. 94-455 provided that: ``The amendments 
made by this section [amending this section and sections 170, 275, 2055, 
2106, 2522, 6104, 6161, 6201, 6211, 6212, 6213, 6214, 6344, 6501, 6512, 
6601, and 7422 of this title and enacting sections 504 and 4911 of this 
title] shall apply--
        ``(1) except as otherwise specified in paragraph (2), in the 
    case of amendments to subtitle A, to taxable years beginning after 
    December 31, 1976;
        ``(2) in the case of the amendments made by subsection (a)(2) 
    [enacting section 504 of this title], to activities occurring after 
    the date of the enactment of this Act [Oct. 4, 1976];
        ``(3) in the case of amendments to chapter 11, to the estates of 
    decedents dying after December 31, 1976;
        ``(4) in the case of amendments to chapter 12, to gifts in 
    calendar years beginning after December 31, 1976;
        ``(5) in the case of amendments to subtitle D, to taxable years 
    beginning after December 31, 1976; and
        ``(6) in the case of amendments to subtitle F, on and after the 
    date of the enactment of this Act [Oct. 4, 1976].''

    Section 1312(b) of Pub. L. 94-455 provided that: ``The amendment 
made by this section [amending this section] shall apply to taxable 
years ending after December 31, 1976.''
    Section 1313(d) of Pub. L. 94-455 provided that: ``The amendments 
made by this section [amending this section and sections 170, 2055, and 
2522 of this title] shall apply on the day following the date of the 
enactment of this Act [Oct. 4, 1976].''
    Section 2113(b) of Pub. L. 94-455 provided that: ``The amendment 
made by this section [amending this section] applies to taxable years 
ending after December 31, 1975.''


                    Effective Date of 1975 Amendment

    Amendment by Pub. L. 93-625 applicable to taxable years beginning 
after Dec. 31, 1974, see section 10(e) of Pub. L. 93-625, set out as an 
Effective Date note under section 527 of this title.


                    Effective Date of 1974 Amendment

    Section 3(b) of Pub. L. 93-310 provided that: ``The amendments made 
by this section [amending this section] shall apply to taxable years 
ending after December 31, 1973.''


                    Effective Date of 1972 Amendment

    Section 1(c) of Pub. L. 92-418 provided that: ``The amendments made 
by this section [amending this section and section 512 of this title] 
shall apply to taxable years beginning after December 31, 1969.''


                    Effective Date of 1970 Amendment

    Section 2 of Pub L. 91-618 provided that: ``The amendment made by 
the first section of this Act [amending this section] shall apply to 
taxable years ending after the date of enactment of this Act [Dec. 31, 
1970].''


                    Effective Date of 1969 Amendment

    Amendment by section 101(j)(3) of Pub. L. 91-172 effective Jan. 1, 
1970, except that amendment of subsec. (a) of this section applicable to 
taxable years beginning after Dec. 31, 1969, see section 101(k)(1), 
(2)(B) of Pub. L. 91-172, set out as an Effective Date note under 
section 4940 of this title.
    Amendment by section 121(b)(5)(A), (6)(A) of Pub. L. 91-172 
applicable to taxable years beginning after Dec. 31, 1969, see section 
121(g) of Pub. L. 91-172, set out as a note under section 511 of this 
title.


                    Effective Date of 1968 Amendment

    Section 109(b) of Pub. L. 90-364 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply to taxable 
years ending after the date of the enactment of this Act [June 28, 
1968].''


                    Effective Date of 1966 Amendments

    Section 6(c) of Pub. L. 89-800 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
ending after the date of the enactment of this Act [Nov. 8, 1966].''
    Section 3 of Pub. 89-352 provided in part that: ``The amendment made 
by the first section of this Act [amending this section] shall apply to 
taxable years ending after the date of the enactment of this Act [Feb. 
2, 1966].''


                    Effective Date of 1962 Amendment

    Section 8(h) of Pub. L. 87-834 provided that: ``The amendments made 
by this section [enacting sections 823 to 826 of this title, amending 
this section and sections 821, 822, 832, 841, 1016, and 1201 of this 
title, and redesignating former section 823 as section 822(f) of this 
title] (other than by subsection (f) [amending section 831 of this 
title]) shall apply with respect to taxable years beginning after 
December 31, 1962.''


                    Effective Date of 1960 Amendments

    Section 6 of Pub. L. 86-667 provided that:
    ``(a) Except as provided in subsection (b), the amendments made by 
this Act [amending this section and sections 503, 511, 513, and 514 of 
this title] shall apply to taxable years beginning after December 31, 
1959.
    ``(b) In the case of loans, the amendments made by section 2 of this 
Act [amending section 503 of this title] shall apply only to loans made, 
renewed, or continued after December 31, 1959.''
    Section 2 of Pub. L. 86-428 provided that: ``The amendment made by 
this Act [amending this section] shall apply only with respect to 
taxable years beginning after December 31, 1959.''


                    Effective Date of 1956 Amendment

    Amendment by act Mar. 13, 1956, applicable only to taxable years 
beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956, set 
out as a note under section 316 of this title.


                               Regulations

    Secretary of the Treasury or his delegate to issue before Feb. 1, 
1988, final regulations to carry out amendments made by section 1114 of 
Pub. L. 99-514, see section 1141 of Pub. L. 99-514, set out as a note 
under section 401 of this title.


                  Special Rule for Certain Cooperatives

    Section 1311(b)(2) of Pub. L. 104-168 provided that: ``In the case 
of an organization operating on a cooperative basis which, before the 
date of the enactment of this Act [July 30, 1996], was determined by the 
Secretary of the Treasury or his delegate, to be described in section 
501(c)(4) of the Internal Revenue Code of 1986 and exempt from tax under 
section 501(a) of such Code, the allocation or return of net margins or 
capital to the members of such organization in accordance with its 
incorporating statute and bylaws shall not be treated for purposes of 
such Code as the inurement of the net earnings of such organization to 
the benefit of any private shareholder or individual. The preceding 
sentence shall apply only if such statute and bylaws are substantially 
as such statute and bylaws were in existence on the date of the 
enactment of this Act.''


        Application of Pub. L. 100-647 to Section 501(c)(3) Bonds

    Section 1013(i) of Pub. L. 100-647 provided that: ``In accordance 
with section 1302 of the Reform Act [Pub. L. 99-514, set out as a note 
below], each amendment and other provision of this Act [see Tables for 
classification] which applies to private activity bonds shall, unless 
otherwise expressly provided, apply to qualified 501(c)(3) bonds.''


  Cancellation of Certain Debts Originated by or Guaranteed by United 
   States Not Taken Into Account in Determining Tax Exempt Status of 
                          Certain Organizations

    Section 6203 of Pub. L. 100-647 provided that: ``Subparagraph (A) of 
section 501(c)(12) of the 1986 Code shall be applied without taking into 
account any income attributable to the cancellation of any loan 
originally made or guaranteed by the United States (or any agency or 
instrumentality thereof) if such cancellation occurs after 1986 and 
before 1990.''


           Plan Amendments Not Required Until January 1, 1989

    For provisions directing that if any amendments made by subtitle A 
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII 
[Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, 
such plan amendment shall not be required to be made before the first 
plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. 
L. 99-514, as amended, set out as a note under section 401 of this 
title.


                  Treatment of Section 501(c)(3) Bonds

    Section 1302 of title XIII of Pub. L. 99-514 provided that: 
``Nothing in the treatment of section 501(c)(3) bonds as private 
activity bonds under the amendments made by this title [enacting 
sections 141 to 150 and 7703 of this title, amending sections 2, 22, 25, 
32, 86, 103, 105, 152, 153, 163, 172, 194, 269A, 414, 879, 1016, 1398, 
3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of this title, 
repealing sections 103A, 1391 to 1397, and 6039B of this title, enacting 
provisions set out as notes under sections 141 and 148 of this title, 
and amending provisions set out as a note under section 103A of this 
title] shall be construed as indicating how section 501(c)(3) bonds will 
be treated in future legislation, and any change in future legislation 
applicable to private activity bonds shall apply to section 501(c)(3) 
bonds only if expressly provided in such legislation.''


     Tax-Exempt Status for Organization Introducing Into Public Use 
             Technology Developed by Qualified Organizations

    Section 1605 of Pub. L. 99-514 provided that:
    ``(a) In General.--For purposes of the Internal Revenue Code of 
1986, an organization shall be treated as an organization organized and 
operated exclusively for charitable purposes if such organization--
        ``(1) is organized and operated exclusively--
            ``(A) to provide for (directly or by arranging for and 
        supervising the performance by independent contractors)--
                ``(i) reviewing technology disclosures from qualified 
            organizations,
                ``(ii) obtaining protection for such technology through 
            patents, copyrights, or other means, and
                ``(iii) licensing, sale, or other exploitation of such 
            technology,
            ``(B) to distribute the income therefrom, to such qualified 
        organizations after paying expenses and other amounts as agreed 
        with the originating qualified organizations, and
            ``(C) to make research grants to such qualified 
        organizations,
        ``(2) regularly provides the services and research grants 
    described in paragraph (1) exclusively to 1 or more qualified 
    organizations, except that research grants may be made to such 
    qualified organizations through an organization which is controlled 
    by 1 or more organizations each of which--
            ``(A) is an organization described in section 501(c)(3) of 
        the Internal Revenue Code of 1986 or the income of which is 
        excluded from taxation under section 115 of such Code, and
            ``(B) may be a recipient of the services or research grants 
        described in paragraph (1),
        ``(3) derives at least 80 percent of its gross revenues from 
    providing services to qualified organizations located in the same 
    State as the State in which such organization has its principal 
    office, and
        ``(4) was incorporated on July 20, 1981.
    ``(b) Qualified Organizations.--For purposes of this section, the 
term `qualified organization' has the same meaning given to such term by 
subparagraphs (A) and (B) of section 41(e)(6) (as redesignated by 
section 231(d)(2)) of the Internal Revenue Code of 1986.
    ``(c) Treatment of Investment in a Technology Transfer Service 
Organization.--
        ``(1) In general.--A qualified investment made by a private 
    foundation in an organization described in subparagraph (C) shall be 
    treated as an investment described in section 4944(c) of the 
    Internal Revenue Code of 1986 and shall not result in imposition of 
    taxes under section 4941, 4943, 4944, 4945, or 507(c) of such Code.
        ``(2) Definitions.--For purposes of this subsection--
            ``(A) Qualified investment.--The term `qualified investment' 
        means a transfer by a private foundation of--
                ``(i) all of the patents, copyrights, know-how, and 
            other technology or rights thereto of the private 
            foundation, and
                ``(ii) investment assets, net receivables, and cash not 
            exceeding $35,000,000,
    to such organization in exchange for debt.
            ``(B) Private foundation.--The term `private foundation' 
        means--
                ``(i) a nonprofit corporation which was incorporated 
            before 1913 which is described in sections 501(c)(3) and 
            509(a) of such Code, and which is exempt from taxation under 
            section 501(a) of such Code, and
                ``(ii) the principal purposes of which are to support 
            research by and to provide technology transfer services to 
            organizations described in section 170(b)(1)(A) of such 
            Code--
          ``(I) which are exempt from taxation under section 501(a) of 
                such Code, or
          ``(II) the income of which is excluded from taxation under 
                section 115 of such Code.
            ``(C) Technology transfer organization.--The term 
        `technology transfer organization' means a corporation 
        established after the date of the enactment of this Act [Oct. 
        22, 1986]--
                ``(i) which is organized and operated to advance the 
            public welfare through the provision of technology transfer 
            services to research organizations,
                ``(ii) no part of the net earnings of which inures to 
            the benefit of, or is distributable to, any private 
            shareholder, individual, or entity, other than a private 
            foundation or research organization,
                ``(iii) which does not participate in, or intervene in 
            (including the publishing or distributing of statements) any 
            political campaign on behalf of any candidate for public 
            office,
                ``(iv) no substantial part of the activities of which is 
            carrying on propaganda, or otherwise attempting, to 
            influence legislation, and
                ``(v) upon liquidation or dissolution of which all of 
            its net assets can be distributed only to research 
            organizations.
    ``(d) Effective Date.--This section shall take effect on the date of 
the enactment of this Act [Oct. 22, 1986].''


        Applicability of 1976 Amendment to Certain Organizations

    Section 1313(c) of Pub. L. 94-455, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``An organization 
which (without regard to the amendments made by this section [amending 
this section and sections 170, 2055, and 2522 of this title]) is an 
organization described in section 170(c)(2)(B), 501(c)(3), 2055(a)(2), 
or 2522(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 
1954] shall not be treated as an organization not so described as a 
result of the amendments made by this section.''


       Tax Exemption for Certain Puerto Rican Pension, etc., Plans

    Section 1022(i) of Pub. L. 93-406, title II, Sept. 2, 1974, 88 Stat. 
942, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 
2095, provided that:
    ``(1) General rule.--Effective for taxable years beginning after 
December 31, 1973, for purposes of section 501(a) of the Internal 
Revenue Code of 1986 [formerly I.R.C. 1954] (relating to exemption from 
tax), any trust forming part of a pension, profit-sharing, or stock 
bonus plan all of the participants of which are residents of the 
Commonwealth of Puerto Rico shall be treated as an organization 
described in section 401(a) of such Code if such trust--
        ``(A) forms part of a pension, profit-sharing, or stock bonus 
    plan, and
        ``(B) is exempt from income tax under the laws of the 
    Commonwealth of Puerto Rico.
    ``(2) Election to have provisions of, and amendments made by, title 
ii of this act apply.--
        ``(A) If the administrator of a pension, profit-sharing, or 
    stock bonus plan which is created or organized in Puerto Rico 
    elects, at such time and in such manner as the Secretary of the 
    Treasury may require, to have the provisions of this paragraph 
    apply, for plan years beginning after the date of election any trust 
    forming a part of such plan shall be treated as a trust created or 
    organized in the United States for purposes of section 401(a) of the 
    Internal Revenue Code of 1986.
        ``(B) An election under subparagraph (A), once made, is 
    irrevocable.
        ``(C) This paragraph applies to plan years beginning after the 
    date of enactment of this Act [Sept. 2, 1974]
        ``(D) The source of any distributions made under a plan which 
    makes an election under this paragraph to participants and 
    beneficiaries residing outside of the United States shall be 
    determined, for purposes of subchapter N of chapter 1 of the 
    Internal Revenue Code of 1986 by the Secretary of the Treasury in 
    accordance with regulations prescribed by him. For purposes of this 
    subparagraph the United States means the United States as defined in 
    section 7701(a)(9) of the Internal Revenue Code of 1986.''


                      Exchanges for Sale of Poultry

    Pub. L. 89-44, title VIII, Sec. 811, June 21, 1965, 79 Stat. 169, 
provided that certain corporations, associations, or organizations 
organized and operated exclusively for the purpose of providing an 
exchange for the sale of poultry growers of a particular locality shall 
be treated for purposes of this title as an exempt organization and that 
such exemption shall apply to taxable years beginning after Dec. 31, 
1953, and ending after Aug. 16, 1954, which begin before Jan. 1, 1966.

                  Section Referred to in Other Sections

    This section is referred to in sections 21, 41, 42, 50, 57, 62, 72, 
79, 104, 108, 120, 129, 131, 141, 144, 145, 146, 147, 148, 149, 150, 
151, 168, 170, 192, 194A, 219, 246, 265, 267, 274, 280G, 318, 401, 402, 
403, 404, 408, 410, 411, 412, 414, 415, 419, 419A, 447, 448, 457, 468A, 
502, 503, 504, 505, 507, 508, 509, 511, 512, 513, 514, 527, 529, 542, 
593, 642, 644, 681, 818, 831, 832, 854, 856, 871, 992, 1275, 1361, 1441, 
1504, 1563, 2055, 2503, 2522, 3121, 3303, 3306, 3309, 3401, 4041, 4221, 
4251, 4253, 4294, 4421, 4911, 4912, 4940, 4941, 4942, 4945, 4947, 4948, 
4951, 4952, 4953, 4955, 4958, 4962, 4972, 4974, 4975, 4979, 4982, 5214, 
6033, 6039F, 6043, 6047, 6048, 6049, 6072, 6104, 6110, 6113, 6420, 6421, 
6427, 6501, 6711, 6852, 7409, 7428, 7454, 7526, 7603, 7611, 7701, 9012, 
9501, 9702, 9712 of this title; title 2 sections 117e, 806, 1611; title 
4 section 114; title 5 sections 504, 3102, 4111, 7342, 8440; title 7 
sections 1726b, 1732, 2279, 4809, 5801, 5901; title 8 section 1101; 
title 10 section 2580; title 12 sections 1441a-1, 1709, 1843, 3051, 
4145, 4146; title 15 sections 37a, 77c, 80a-3, 80a-3a, 656, 1291, 1679a, 
6402; title 16 sections 18f-2, 284d, 539f, 583j-2, 742f, 1447a, 2105, 
2708, 5406; title 18 sections 207, 209, 1307, 1511, 1955; title 19 
section 3391; title 20 sections 80q-7, 1085, 1128a, 1135, 1681, 4357, 
5502, 5509, 8004; title 21 sections 353, 1523; title 22 sections 262p-
4c, 262p-4e; title 25 sections 3653, 3662, 3663; title 28 section 2412; 
title 29 sections 169, 623, 705, 1002, 1051, 1052, 1081, 1082, 1086, 
1103, 1321, 1362, 1403, 2703; title 35 sections 201, 287; title 36 
sections 40705, 40706, 80102, 80106; title 38 section 3772; title 40 
sections 207c-2, 483, 484, 1002; title 42 sections 280d-11, 290b, 300e-
9, 409, 604, 1301, 1382a, 1382b, 1395w-28, 1395x, 1395eee, 1396b, 1396u-
4, 1397a, 1485, 1760, 1784, 2000e, 2996b, 3056, 5177a, 5603, 6322, 6371, 
6372, 8013, 8143, 9660, 9907, 9926, 10702, 11371, 12111, 12584, 14505; 
title 43 section 390ss; title 45 section 1347; title 46 section 2101; 
title 47 sections 154, 396; title 49 section 13709.
