REPORT TITLE:
Private Foundations


DESCRIPTION:
Requires a nonprofit corporation that is a private foundation to
conform to certain Internal Revenue Code provisions to maintain
its tax exempt status.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2205
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT
RELATING TO NONPROFIT CORPORATIONS.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 415B, Hawaii Revised Statutes, is
 
 2 amended by adding a new section to be appropriately designated
 
 3 and to read as follows:
 
 4      "415B-    Private foundations; tax-exempt status.  No
 
 5 nonprofit corporation which is a private foundation, as defined
 
 6 in section 509(a) of the Code shall:
 
 7      (1)  Engage in any act of self-dealing, as defined in
 
 8           section 4941(d) of the Code;
 
 9      (2)  Retain any excess business holdings, as defined in
 
10           section 4943(c) of the Code;
 
11      (3)  Make any investments in such manner as to subject it to
 
12           tax under section 4944 of the Code; and
 
13      (4)  Make any taxable expenditures, as defined in
 
14           section 4945(d) of the Code.
 
15      Each nonprofit corporation which is a private foundation as
 
16 defined in section 509 of the Code shall distribute, for the
 
17 purpose specified in its charter of incorporation, such amounts
 
18 at such time and in such manner as shall be required so as not to
 
19 subject it to tax under section 4942 of the Code.
 
20      Nothing in this section shall impair the rights and powers
 

 
Page 2                                                     2205
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 of the courts, the attorney general, or the director of commerce
 
 2 and consumer affairs of this State with respect to any
 
 3 corporation.
 
 4      References in this section to sections of the Code are to
 
 5 sections of the Internal Revenue Code of 1986, as amended."
 
 6      SECTION 2.  New statutory material is underscored.
 
 7      SECTION 3.  This Act shall take effect upon its approval and
 
 8 shall be applied retroactively to July 1, 1987.