§ 406 — Private foundation, as defined in the United States internal revenue code of 1954: provisions included in the certificate of incorporation

§ 406. Private foundation, as defined in the United States internal\n revenue code of 1954: provisions included in the certificate of\n incorporation.\n (a) The following provisions are hereby included in the certificate of\nincorporation of every domestic corporation, heretofore or hereafter\nformed, to which this chapter applies in whole or in part, and which is\na "private foundation" as defined in section 509 of the United States\ninternal revenue code of 1954 ("code"):\n (1) The corporation shall distribute such amounts for each taxable\nyear at such time and in such manner as not to subject the corporation\nto tax on undistributed income under section 4942 of the code.\n (2) The corporation shall not engage in any act or self-dealing which\nis subject to tax under section 4941 of the code.\n (3) The corporation shall not retain any excess business holdings\nwhich are subject to tax under section 4943 of the code.\n (4) The corporation shall not make any investments in such manner as\nto subject the corporation to tax under section 4944 of the code.\n (5) The corporation shall not make any taxable expenditures which are\nsubject to tax under section 4945 of the code.\nExcept as provided in paragraph (b), this paragraph applies\nnotwithstanding any other provision of the certificate of incorporation\nor any direction in a gift instrument.\n (b) Paragraph (a) shall not apply to the extent that it conflicts with\nany mandatory direction in a gift instrument executed prior to the\neffective date of this section unless such conflicting direction is\nremoved as impracticable under article eight of the estates, powers and\ntrusts law or in any other manner provided by law. The absence of a\nspecific provision in the gift instrument for the current use of the\nprincipal of the fund, or the presence in such an instrument of a\nprovision, as to the principal of a fund, limited to the principal's\nbeing held, invested and reinvested, is not such a conflicting mandatory\ndirection.\n (b-1) A domestic, not-for-profit corporation that is a "private\nfoundation" as defined in section 509 of the code and that is required\nby section 6104(d) of the code to make available for public inspection\nits annual return shall publish notice of the availability of such\nreturn for inspection. Such notice shall be published, not later than\nthe day prescribed for filing such annual return (determined with regard\nto any extension of time for filing), in a newspaper designated by the\nclerk of the county in which the principal office of the private\nfoundation is located, having general circulation in that county. When\nsuch county is located within a city with a population of one million or\nmore, such designation shall be as though such notice were a notice of\njudicial proceedings. The notice shall state that the annual return of\nthe private foundation is available at its principal office for\ninspection during regular business hours by any citizen who requests it\nwithin one hundred eighty days after the date of such publication, and\nshall state the address and the telephone number of the private\nfoundation's principal office and the name of its principal manager. A\ncopy or notice published in a newspaper other than the newspaper or\nnewspapers designated by the county clerk shall not be deemed to be one\nof the publications required by this paragraph.\n (c) All references in this section to sections of the code shall be to\nsuch sections as amended from time to time, or to corresponding\nprovisions of subsequent internal revenue laws.\n (d) Nothing in this section shall impair the rights and powers of the\ncourts or the attorney-general of this state.\n (e) For purposes of this section, the term gift instrument shall have\nthe meaning set forth in section 551 (Definitions).\n