110 STAT. 1478 PUBLIC LAW 104-168-^ULY 30, 1996 (1) IN GENERAL. — Paragraph (4) of section 501(c) is amended by inserting "(A)" after "(4)" and by adding at the end the following: "(B) Subparagraph (A) shall not apply to an entity unless no pgirt of the net earnings of such entity inures to the benefit of any private shareholder or individual.". 26 USC 501 note. (2) SPECIAL RULE FOR CERTAIN COOPERATIVES. —In the case of an organization operating on a cooperative basis which, before the date of the enactment of this Act, was determined by the Secretary of the Treasury or his delegate, to be described in section 501(c)(4) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, the allocation or return of net margins or capital to the members of such organization in accordance with its incorporating statute and bylaws shall not be treated for purposes of such Code as the inurement of the net earnings of such orgsuiization to the benefit of any private shareholder or individual. The preceding sentence shall apply only if such statute and bylaws are substantially as such statute and bylaws were in existence on the date of the enactment of this Act. (c) TECHNICAL AND CONFORMING AMENDMENTS. — (1) Subsection (e) of section 4955 is amended— (A) by striking "SECTION 4945" in the heading and inserting "SECTIONS 4945 AND 4958", and (B) by inserting before the period "or an excess benefit for purposes of section 4958". (2) Subsections (a), (b), and (c) of section 4963 are each amended by inserting "4958," after "4955,". (3) Subsection (e) of section 6213 is amended by inserting "4958 (relating to private excess benefit)," before "4971". (4) Paragraphs (2) and (3) of section 7422(g) are each amended by inserting "4958," after "4955,". (5) Subsection (b) of section 7454 is amended by inserting "or whether an organization manager (as defined in section 4958(f)(2)) has 'knowingly' participated in an excess benefit transaction (as defined in section 4958(c))," after "section 4912(b),". (6) The table of subchapters for chapter 42 is amended by striking the last item and inserting the following: "SUBCHAPTER D. Failure by certain charitable organizations to meet certain qualification requirements. "SUBCHAPTER E. Abatement of first and second tier taxes in certain cases.". (d) EFFECTIVE DATES.— 26 USC 4955 (1) IN GENERAL.—The amendments made by this section note. (other than subsection (b)) shall apply to excess benefit transactions occurring on or after September 14, 1995. 26 USC 4955 (2) BINDING CONTRACTS. —The amendments referred to in note. paragraph (1) shall not apply to any benefit arising from a transaction pursuant to any written contract which was binding on September 13, 1995, and at all times thereafter before such transaction occurred. 26 USC 501 note. (3) APPLICATION OF PRIVATE INUREMENT RULE TO TAX- EXEMPT ORGANIZATIONS DESCRIBED IN SECTION 501(c)(4). — (A) IN GENERAL.— The amendment made by subsection (b) shall apply to inurement occurring on or after September 14, 1995.
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