Sec. 6. Establishment of charitable foundations authorized
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/bill/113/hr/1603/ih/section-6·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Any mutual holding company or direct or indirect stock subsidiary of a mutual holding company may contribute or issue shares of such stock subsidiary to a charitable foundation established by the mutual holding company or any direct or indirect stock subsidiary of the mutual holding company, provided that— the charitable foundation qualifies as a 501(c)(3) organization under the Internal Revenue Code, as amended; the Foundation’s governance complies with regulations adopted by the appropriate Federal banking agency; at the time of the contribution or issuance to the charitable foundation, no direct or indirect stock subsidiary of the mutual holding company, nor any affiliate thereof, has issued shares of common stock to any nonaffiliate of the direct or indirect stock subsidiary of the mutual holding company; the value of the stock so contributed or issued by the direct or indirect stock subsidiary of the mutual holding company, as determined in accordance with subsection (b), shall not exceed more than 10 percent of the insured depository institution’s consolidated Tier 1 capital, as of the quarter end prior to the establishment of the charitable foundation; the direct or indirect stock subsidiary of the mutual holding company that contributes or issues the shares to the charitable foundation must reasonably expect to utilize the tax deduction within the time period proscribed by the Internal Revenue Service for contributions to charitable foundations; and the mutual holding company and each direct or indirect stock subsidiary of the mutual holding company will be “well capitalized” under the prompt corrective action regulations immediately following the contribution to the charitable foundation.
Prior to any contribution or issuance by a direct or indirect stock subsidiary of the mutual holding company to a charitable foundation pursuant to subsection (a), the mutual holding company shall obtain an appraisal, by an independent appraiser experienced in such matters, of the pro forma value of the stock so contributed on a fully converted basis. The value of the stock so contributed, as determined by the appraiser, shall be limited in accordance with paragraph
(4)of subsection (b).