74
STAT.]
PUBLIC LAW 86-667-JULY U, 1960
ployees 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 tei^m '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)). " SEC. 2." (a) Subsection (a) of section 503 of the Internal Revenue Code of 1954 (relating to denial of "exemption to organizations engaged in prohibited transactions) is amended— (1) by revising paragraph (1) to read as follows: "(1)
535
Denial of ex26 USC 503.
GENERAL RULE.—
" (A) An organization described in section '501(c)(3) which is subject to the provisions of this section shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after July 1, 1950. " (B) An organization described in section 501(c) (IT) which is subject to the provisions of'this section shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after December 31, 1959. " (C) An organization described in section 401(a) which is subject to the provisions of this section shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction after March 1, 1954.", and (2) by striking out "section 501(c)(3) " in paragraph (2) and inserting in lieu thereof "section 501(c)(3) or (17)". (b) Subsection (b) of such section 503 is amended by striking out "section 501(c)(3) " and inserting in lieu thereof "section 501(c)(3) or (17)". (c) Subsection (d) of such section 503 is amended by striking out "section 501(c)(3) " and inserting in lieu thereof "section 501(c)(3) or (17)". (d) Subsection (h) of such section 503 is amended— (1) by striking out "section 401(a)" in the heading and inserting in lieu thereof "section 401(a) and section 501(c) (17)", and (2) by striking out "section 4 0 1 (a) " in such subsection and inserting in lieu thereof "section 401(a) or section 501(c) (17)". SEC. 3. (a) Subsection (a)(2) of section 511 of the Internal Revenue Code of 1954 (relating to imposition of tax on unrelated business income of charitable, etc., organizations) is amended— (1) by striking out "and (6) " in the heading of subparagraph (A) and inserting in lieu thereof " (6), and (17)", and (2) by striking out "or (6) " in the first sentence of subparagraph (A) and inserting in lieu thereof " (6), or (17)".
Ante, p. 534.
26 USC 503.
26 USC 511.
�
