Prohibited activities by private foundations.

(1) As used in this section, section references, unless otherwise indicated, refer to the Internal Revenue Code of 1986, as amended, Title 26 of the United States Code, including corresponding provisions of any subsequent federal tax laws.

(2) A corporation, during the period it is a “private foundation” as defined in s. 509(a), may not:

(a) Engage in any act of “self-dealing,” as defined in s. 4941(d), which would give rise to any liability for the tax imposed by s. 4941(a);

(b) Retain any “excess business holdings,” as defined in s. 4943(c), which would give rise to any liability for the tax imposed by s. 4943(a);

(c) Make any investment which would jeopardize the carrying out of any of its exempt purposes, within the meaning of s. 4944, so as to give rise to any liability for the tax imposed by s. 4944(a); and

(d) Make any “taxable expenditures,” as defined in s. 4945(d), which would give rise to any liability for the tax imposed by s. 4945(a).

(3) Each corporation, during the period it is a “private foundation” as defined in s. 509, shall distribute, for the purposes specified in its articles of incorporation or organization, for each taxable year, amounts at least sufficient to avoid liability for the tax imposed by s. 4942(a).

(4) Subsections (2) and (3) do not apply to any corporation that was incorporated before January 1, 1970, and that has been properly relieved from the requirements of 26 U.S.C. s. 508(e)(1) by a timely judicial proceeding.

(5) This section shall not impair the rights and powers of the courts or of the Department of Legal Affairs with respect to any corporation.