['Retirement Benefits']
['Pension Protection Act (PPA)']
05/18/2022
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Pension Protection Act of 2006
Title XII Provisions Relating to Exempt Organizations
Subtitle B Reforming Exempt Organizations
Part 2 Improved Accountability of Donor Advised Funds
(a) DISQUALIFIED PERSONS.-
(a)(1) IN GENERAL.-Paragraph (1) of section 4958(f) is amended by striking "and" at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting a comma, and by adding after subparagraph (C) the following new subparagraphs:
"(D) which involves a donor advised fund (as defined in section 4966(d)(2)), any person who is described in paragraph (7) with respect to such donor advised fund (as so defined), and
"(E) which involves a sponsoring organization (as defined in section 4966(d )(1)), any person who is described in paragraph (8) with respect to such sponsoring organization (as so defined).".
(a)(2) DONORS, DONOR ADVISORS, AND INVESTMENT ADVISORS TREATED AS DISQUALIFIED PERSONS.-Section 4958(f) is amended by adding at the end the following new paragraphs:
"(7) DONORS AND DONOR ADVISORS.-For purposes of paragraph (1 )(E), a person is described in this paragraph if such person-
"(A) is described in section 4966(d)(2)(A)(iii),
"(B) is a member of the family of an individual described in subparagraph (A), or
"(C) is a 35-percent controlled entity (as defined in paragraph (3) by substituting 'persons described in subparagraph (A) or (B) of paragraph (7)' for 'persons described in subparagraph (A) or (B) of paragraph (1)' in subparagraph (A)( i) thereof).
"(8) INVESTMENT ADVISORS.-For purposes of paragraph (1 )(F)-
"(A) IN GENERAL.-A person is described in this paragraph if such person-
"( i) is an investment advisor,
"(ii) is a member of the family of an individual described in clause ( i), or
"(iii) is a 35-percent controlled entity (as defined in paragraph (3) by substituting 'persons described in clause ( i) or (ii) of paragraph (8)(A)' for 'persons described in subparagraph (A) or (B) of paragraph (1)' in subparagraph (A)( i) thereof).
"(B) INVESTMENT ADVISOR DEFINED.-For purposes of subparagraph (A), the term 'investment advisor' means, with respect to any sponsoring organization (as defined in section 4966(d )(1)), any person (other than an employee of such organization) compensated by such organization for managing the investment of, or providing investment advice with respect to, assets maintained in donor advised funds (as defined in section 4966(d)(2)) owned by such organization.".
(b) CERTAIN TRANSACTIONS TREATED AS EXCESS BENEFIT TRANSACTIONS.-
(b)(1) IN GENERAL.-Section 4958(c) is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph:
"(2) SPECIAL RULES FOR DONOR ADVISED FUNDS.-In the case of any donor advised fund (as defined in section 4966(d )(2))-
"(A) the term 'excess benefit transaction' includes any grant, loan, compensation, or other similar payment from such fund to a person described in subsection (f)(7) with respect to such fund, and
"(B) the term 'excess benefit' includes, with respect to any transaction described in subparagraph (A), the amount of any such grant, loan, compensation, or other similar payment. ".
(b)(2) SPECIAL RULE FOR CORRECTION OF TRANSACTION.-Section 4958(f)(6) is amended by inserting ", except that in the case of any correction of an excess benefit transaction described in subsection (c)(2), no amount repaid in a manner prescribed by the Secretary may be held in any donor advised fund" after "standards".
(c) EFFECTIVE DATE.- The amendments made by this section shall apply to transactions occurring after the date of the enactment of this Act.
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