2006 Minnesota Statutes

317A.113 PRIVATE FOUNDATIONS; PROVISIONS CONSIDERED CONTAINED IN
ARTICLES.
    Subdivision 1. Provisions required. The articles of incorporation of a corporation that is
a private foundation as defined in section 509(a) of the Internal Revenue Code of 1986 and
an instrument governing the use, retention, or disposition by the corporation of its income or
property must contain the provisions contained in this section. If the articles and instrument do
not contain these provisions, they are considered to have incorporated the language in clauses (1)
to (5) with the same effect as though the language was set forth verbatim. Except as provided in
subdivision 2, these provisions govern the corporation as to the use, retention, and disposition
of its income and property regardless of provisions of the articles or instrument or other law
of this state to the contrary:
(1) the corporation shall distribute for each of its taxable years amounts at least sufficient to
avoid liability for the tax imposed by section 4942(a) of the Internal Revenue Code of 1986;
(2) the corporation may not engage in an act of "self-dealing" as defined in section 4941(d) of
the Internal Revenue Code of 1986 that would give rise to liability for the tax imposed by section
4941(a) of the Internal Revenue Code of 1986;
(3) the corporation may not retain "excess business holdings" as defined in section 4943(c) of
the Internal Revenue Code of 1986 that would give rise to liability for the tax imposed by section
4943(a) of the Internal Revenue Code of 1986;
(4) the corporation may not make investments that would jeopardize the carrying out of the
exempt purposes of the corporation, within the meaning of section 4944 of the Internal Revenue
Code of 1986, so as to give rise to liability for the tax imposed by section 4944(a) of the Internal
Revenue Code of 1986; and
(5) the corporation may not make a "taxable expenditure" as defined in section 4945(d) of
the Internal Revenue Code of 1986 that would give rise to liability for the tax imposed by section
4945(a) of the Internal Revenue Code of 1986.
    Subd. 2. Exception. Subdivision 1 does not apply to a corporation if a court of competent
jurisdiction determines that the application would be contrary to the terms of an instrument
described in subdivision 1 and that the instrument may not properly be changed to conform to
subdivision 1.
    Subd. 3. Future references. A reference in subdivision 1 to a particular section of the
Internal Revenue Code of 1986 includes the corresponding provision of a future United States
Internal Revenue law.
    Subd. 4. Application. This section applies to all corporations that could be governed by this
chapter, notwithstanding sections 317A.021 and 317A.051.
    Subd. 5. Rights reserved. This section does not impair the rights and powers of the attorney
general or the courts of this state with respect to a corporation.
History: 1989 c 304 s 11