§ 8-1.8 Private foundations: administration of certain trusts as defined

in the United States internal revenue code of 1954

(a) For purposes of this section, a "trust" means a private foundation
as defined in section 509 of the United States Internal Revenue Code of
1986 ("code") including a private foundation charitable trust as defined
in section 4947(a)(1) of the code, or a split-interest trust as defined
in section 4947(a)(2) of the code, whether heretofore or hereafter
created which is administered by a trustee described in subparagraph
(a)(1) of section 8-1.4. The administration of a trust, as herein
defined, is subject to the following provisions:

(1) The trust shall distribute for each taxable year such amounts at
such time and in such manner as sufficient for such trust to avoid
liability for any tax imposed on undistributed income under section 4942
of the code.

(2) The trust shall not engage in any act of self-dealing which would
result in the taxation of any amount involved with respect to any such
act of self-dealing under section 4941 of the code.

(3) The trust shall not retain any excess business holdings which
would result in the taxation of any such excess business holdings under
section 4943 of the code unless the trust is exempt from section 4943 of
the code pursuant to section 4947(b)(3)(A) or (B) of the code.

(4) The trust shall not make any investments in such a manner as to
jeopardize the carrying out of any such trust's exempt purposes which
would result in the taxation of any such investments under section 4944
of the code unless the trust is exempt from section 4944 of the code
pursuant to section 4947(b)(3)(A) or (B) of the code.

(5) The trust shall not make any taxable expenditures which would
result in the liability of the trust for any tax imposed on any such
taxable expenditures under section 4945 of the code.

Except as provided in paragraph (b), this paragraph applies
notwithstanding any provision of the governing instrument of a trust.

(b) Paragraph (a) shall not apply with respect to assets transferred
in trust prior to the effective date of this section to the extent that
it conflicts with any mandatory direction in the governing instrument of
the trust unless such conflicting direction is removed as impracticable
under this article or in any other manner provided by law. The absence
of a specific provision in the governing instrument of the trust for the
current use of the principal of the fund, or the presence in such an
instrument of a provision, as to the principal of a fund, limited to the
principal's being held, invested and reinvested, is not such a
conflicting mandatory direction.

(b-1) A trust, as defined in paragraph (a) of this section, required
by section 6104(d) of the code to make available for public inspection
its annual return shall publish notice of the availability of such
return for inspection. Such notice shall be published, not later than
the day prescribed for filing such annual return (determined with regard
to any extension of time for filing), in a newspaper designated by the
clerk of the county in which the principal office of the trust is
located, having general circulation in that county. When such county is
located within a city with a population of one million or more, such
designation shall be as though the notice were a notice or advertisement
of judicial proceedings. The notice shall state that the annual return
of the trust is available at its principal office for inspection during
regular business hours by any citizen who requests it within one hundred
eighty days after the date of such publication, and shall state the
address and the telephone number of the trust's principal office and the
name of its principal manager. A copy or notice published in a newspaper
other than the newspaper or newspapers designated by the county clerk
shall not be deemed to be one of the publications required by this
paragraph.

(c) All references in this section to sections of the code shall be to
such sections as amended from time to time, or to corresponding
provisions of subsequent internal revenue laws.

(d) Nothing in this act shall impair the rights and powers of the
courts or the attorney-general of this state.