768                               Laws of Maryland                      [Ch. 365

fined not more than two thousand dollars ($2,000.00) or be con-
fined not more than six months in jail.

Sec. 2. And be it further enacted, That this Act shall take effect
July 1, 1971.

Approved May 6, 1971.

CHAPTER 365
(Senate Bill 169)

AN ACT to add new Sections 445 to 450, inclusive, to Article 23 of
the Annotated Code of Maryland (1970 Supplement), title "Cor-
porations," to follow immediately after Section 444 thereof and to
be under the new subtitle "Charitable Corporations," "PRIVATE
FOUNDATIONS," to regulate the activities of any corporation
which is a private foundation as defined in Section 509 (a) of the
Internal Revenue Code of 1954 by prohibiting self-dealing, reten-
tion of excess business holdings, improper investments and im-
proper expenditures, and by requiring minimum annual distribu-
tions, all as defined and provided by Sections 4941 (d), 4943 (c),
4944, 4945 (d) and 4942 (a), respectively, of the Internal Revenue
Code of 1954.

Section 1. Be it enacted by the General Assembly of Maryland,
That new Sections 445 through 450 be and they are hereby added to
Article 23 of the Annotated Code of Maryland (1970 Supplement),
title "Corporations," to follow immediately after Section 444 thereof,
and to be under the new subtitle "Charitable Corporations," "PRI-
VATE FOUNDATIONS," and to read as follows:

Charitable Corporation PRIVATE FOUNDATIONS
445.

No corporation which is a "private foundation" as defined in
Section 509 (a) of the Internal Revenue Code of 1954, shall

(a)  engage in any act of "self-dealing" (as defined in Section
4941 (d) of the Internal Revenue Code of 1954), which would give
rise to any liability for the tax imposed by Section 4941 (a) of the
Internal Revenue Code of 1954;

(b)  retain any "excess business holdings" (as defined in Section

4943  (c) of the Internal Revenue Code of 1954), which would give
rise to any liability for the tax imposed by Section 4943 (a) of the
Internal Revenue Code of 1954;

(c)  make any investment which would jeopardize the carrying
out of any of its exempt purposes, within the meaning of Section

4944  of the Internal Revenue Code of 1954, so as to give rise to any
liability for the tax imposed by Section 4944 (a) of the Internal
Revenue Code of 1954; and