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Page:United States Statutes at Large Volume 98 Part 1.djvu/938

 98 STAT. 890

PUBLIC LAW 98-369—JULY 18, 1984 law or rule of law which would otherwise prevent such assessment." (b) CONFORMING AMENDMENTS.—

Ante, p. 569. 26 USC 1223.

Ante, p. 887.

Ante, p. 568.

Ante, p. 887.

(1) Section 1223 (relating to holding period of property) is amended by redesignating paragraph (13) as paragraph (14) and by inserting after paragraph (12) the following: "(13) In determining the period for which the taxpayer has held qualified replacement property (within the meaning of section 1042(b)) the acquisition of which resulted under section 1042 in the nonrecognition of any part of the gain realized on the sale of qualified securities (within the meaning of section 1042(b)), there shall be included the period for which such qualified securities had been held by the taxpayer." (2) Subsection (a) of section 1016 (relating to adjustments to basis), as amended by this Act, is amended— (A) by striking out "and" at the end of paragraph (25), (B) by striking out the period at the end of paragraph (26) and inserting in lieu thereof ", and", and (C) by adding at the end thereof the following new paragraph: "(27) in the case of qualified replacement property, the acquisition of which resulted under section 1042 in the nonrecognition of any part of the gain realized on the sale or exchange of any property, to the extent provided in section 1042(c)." (3) The table of sections for part III of subchapter O of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 1042. Sales of stock to employees."

26 USC 1042 note.

26 USC 404.

Ante, p. 852.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to sales of securities in taxable years beginning after the date of enactment of this Act. SEC. 542. DEDUCTIBILITY OF CERTAIN DIVIDEND DISTRIBUTIONS FROM EMPLOYEE STOCK OWNERSHIP PLANS. (a) DEDUCTION.—Section 404 (relating to deductions for employer contributions to an employees' trust) is amended by adding at the end thereof the following new subsection: "(k) DIVIDENDS PAID DEDUCTIONS.—In addition to the deductions provided under subsection (a), there shall be allowed as a deduction to a corporation the amount of any dividend paid in cash by such corporation during the taxable year with respect to the stock of such corporation if— "(1) such stock is held on the record date for the dividend by a tax credit employee stock ownership plan (as defined in section 409) or an employee stock ownership plan (as defined in section 4975(e)(7)) which is maintained by such corporation or by any other corporation that is a member of a controlled group of corporations (within the meaning of section 409(1)(4)) that includes such corporation, and "(2) in accordance with the plan provisions— "(A) the dividend is paid in cash to the participants in the plan, or "(B) the dividend is paid to the plan and is distributed in cash to participants in the plan not later than 90 days after the close of the plan year in which paid."

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Page:United States Statutes at Large Volume 98 Part 1.djvu/939

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 891

(b) DENIAL OF PARTIAL EXCLUSION.—Section 116 (relating to par-

26 USC 116.

tial exclusion of dividends) is amended by adding at the end thereof the following new subsection: "(e) DIVIDENDS FROM EMPLOYEE STOCK OWNERSHIP PLANS.—Sub-

section (a) shall not apply to any dividend described in section 404(k)."

Ante, p. 890.

(c) No WITHHOLDING ON DIVIDEND DISTRIBUTION.—Subparagraph

(B) of section 3405(d)(1) (relating to designated distributions) is amended— (1) by striking out "and" at the end of clause (i), (2) by striking out the period at the end of clause (ii) and inserting in lieu thereof ", or", and (3) by adding at the end thereof the following new clause: "(iii) any distribution described in section 404(k)(2)." (d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act. SEC. 543. EXCLUSION OF INTEREST ON LOANS USED TO FINANCE ACQUISITION OF EMPLOYER SECURITIES BY AN ESOP. (a) IN GENERAL.—Part III of subchapter B of chapter 1 (relating to items excluded from gross income), as amended by this Act, is amended by redesignating section 133 as section 134 and by inserting after section 132 the following new section: "SEC. 133. INTEREST ON CERTAIN LOANS USED TO ACQUIRE EMPLOYER SECURITIES. "(a) IN GENERAL.—Gross income does not include 50 percent of the interest received by— "(1) a bank (within the meaning of section 581), "(2) an insurance company to which subchapter L applies, or "(3) a corporation actively engaged in the business of lending money, with respect to a securities acquisition loan.

Post, p. 963.

26 USC 404 note.

26 USC 134. ^"^^' P- ^'^'^• 26 USC 133.

"(b) SECURITIES ACQUISITION LOAN.—

"(1) IN GENERAL.—For purposes of this section, the term 'securities acquisition loan' means any loan to a corporation, or to an employee stock ownership plan, to the extent that the proceeds are used to acquire employer securities (within the meaning of section 409(1)) for the plan. Ante, p. 852. "(2) LOANS BETWEEN RELATED PERSONS.—The term 'securities acquisition loan' shall not include— "(A) any loan made between corporations which are members of the same controlled group of corporations, or "(B) any loan made between an employee stock ownership plan and any person that is— "(i) the employer of any employees who are covered by the plan; or "(ii) a member of a controlled group of corporations which includes such employer. "(3) CONTROLLED GROUP OF CORPORATIONS.—For purposes of

this paragraph, the term 'controlled group of corporations' has the meaning given such term by section 409(1)(4). "(c) EMPLOYEE STOCK OWNERSHIP PLAN.—For purposes of this section, the term 'employee stock ownership plan' has the meaning given to such term by section 4975(e)(7)."

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/940

 98 STAT. 892 „

PUBLIC LAW 98-369—JULY 18, 1984 (b) CONFORMING AMENDMENT.—The table of sections for part III of subchapter B of chapter 1 is amended by striking out the item relating to section 133 and inserting in lieu thereof the following: "Sec. 133. Interest on certmn loans used to acquire employer securities. "Sec. 134. Cross references to other Act."

26 USC 133 note.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to loans used to acquire employer securities after the date of the enactment of this Act. SEC. 544. ASSUMPTION OF ESTATE TAX LIABILITY BY EMPLOYER STOCK OWNERSHIP PLAN OR COOPERATIVE RECEIVING EMPLOYER SECURITIES. (a) IN GENERAL.—Subchapter C of chapter 11 (relating to miscellaneous estate tax provisions) is amended by adding at the end thereof the following new section:

< 26 USC 2210.

"SEC. 2210. LIABILITY FOR PAYMENT IN CASE OF TRANSFER OF EMPLOYER SECURITIES TO AN EMPLOYEE STOCK OWNERSHIP PLAN OR A WORKER-OWNED COOPERATIVE. "(a) IN GENERAL.—If—

"(1) employer securities— "(A) are acquired from the decedent by an employee stock ownership plan or by an eligible worker-owned cooperative from any decedent, "(B) pass from the decedent to such a plan or cooperative, or "(C) are transferred by the executor to such a plan or cooperative, and "(2) the executor elects the application of this section and files the agreements described in subsection (e) before the due date (including extensions) for filing the return of tax imposed by section 2001, then the executor is relieved of liability for payment of that portion of the tax imposed by section 2001 which such employee stock ownership plan or cooperative is required to pay under subsection (b). "(b) PAYMENT OF TAX BY EMPLOYEE STOCK OWNERSHIP PLAN OR COOPERATIVE.—

-•<

"(1) IN GENERAL.—An employee stock ownership plan or eligible worker-owned cooperative— "(A) which has acquired employer securities from the decedent, or to which such securities have passed from the decedent or been transferred by the executor, and "(B) with respect to which an agreement described in subsection (e)(1) is in effect, shall pay that portion of the tax imposed by section 2001 with respect to the taxable estate of the decedent which is described in paragraph (2). "(2) AMOUNT OF TAX TO BE PAID.—The portion of the

tax

imposed by section 2001 with respect to the taxable estate of the decedent that is referred to in paragraph (1) is equal to the lesser of— "(A) the value of the employer securities described in subsection (a)(1) which is included in the gross estate of the decedent, or

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Page:United States Statutes at Large Volume 98 Part 1.djvu/941

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 893

"(B) the tax imposed by section 2001 with respect to such taxable estate reduced by the sum of the credits allowable against such tax. "(c) INSTALLMENT PAYMENTS.— "(1) IN GENERAL.—If^

"(A) the executor of the estate of the decedent (without regard to this section) elects to have the provisions of section 6166 (relating to extensions of time for payment of estate tax where estate consists largely of interest in closely ^,. held business) apply to payment of that portion of the tax imposed by section 2001 with respect to such estate which is attributable to employer securities, and "(B) the plan administrator or the cooperative provides to the executor the agreement described in subsection (e)(D, then the plan administrator or the cooperative may elect, before the due date (including extensions) for filing the return of such tax, to pay all or part of the tax described in subsection (b)(2) in installments under the provisions of section 6166. "(2) INTEREST ON INSTALLMENTS.—In determining the 4-percent portion for purposes of section 6601(j)— "(A) the portion of the tax imposed by section 2001 with respect to an estate for which the executor is liable, and "(B) the portion of such tax for which an employee stock ownership plan or an eligible worker-owned cooperative is liable, shall be aggregated.

.. ^ ^

"(d) GUARANTEE OF PAYMENTS.—Any employer—

"(1) whose employees are covered by an employee stock ownership plan, and "(2) who has entered into an agreement described in subsection (e)(2) which is in effect, shall guarantee (in such manner as the Secretary may prescibe) the payment of any amount such plan is required to pay under subsection (b), including any interest payable under section 6601 which is attributable to such amount. "(e) AGREEMENTS.—The agreements described in this subsection are as follows: "(1) A written agreement signed by the plan administrator, or by any authorized officer of the eligible worker-owned cooperative, consenting to the application of subsection (b) to such plan or cooperative. "(2) A written agreement signed by the employer whose employees are covered by the plan described in subsection (b) consenting to the application of subsection (d). "(f)

'^

"* '

'

EXEMPTION FROM TAX ON PROHIBITED TRANSACTIONS.—The

assumption under this section by an employee stock ownership plan of any portion of the liability for the tax imposed by section 2001 shall be treated as a loan described in section 4975(d)(3). "(g) DEFINITIONS.—For purposes of this section— "(1) EMPLOYER SECURITIES.—The term 'employer securities' has the meaning given such term by section 409(1). Ante, p. 852. "(2) EMPLOYEE STOCK OWNERSHIP PLAN.—The term 'employee stock ownership plan' has the meaning given such term by section 4975(e)(7). "(3) EuGiBLE WORKER-OWNED COOPERATIVE.—The term 'eligible worker-owned cooperative' has the meaning given to such term by section 1041(b)(2). Ante, p. 793.

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/942

 98 STAT. 894

PUBLIC LAW 98-369—JULY 18, 1984 "(4) PLAN ADMINISTRATOR.—The term 'plan administrator' has the meaning given such term by section 414(g)," (b) CONFORMING AMENDMENTS.—

26 USC 2002.

Ante, p. 892.

(1) Section 2002 (relating to liability for payment of estate tax) is amended to read as follows: "SEC. 2002. LIABILITY FOR PAYMENT. "Except as provided in section 2210, the tax imposed by this chapter shall be paid by the executor." (2) The table of sections for subchapter C of chapter 11 is amended by adding at the end thereof the following: "Sec. 2210. Liability for payment in case of transfer of employer securities to an employee stock ownership plan or a worker-owned cooperative."

26 USC 6018.

Ante, p. 892.

26 USC 6166.

(3) Section 6018 (relating to estate tax returns) is amended by adding at the end thereof the following new subsection: "(c) ELECTION UNDER SECTION 2210.—In all cases in which subsection (a) requires the filing of a return, if an executor elects the applications of section 2210— "(1) RETURN BY EXECUTOR.—The return which the executor is required to file under the provisions of subsection (a) shall be made with respect to that portion of estate tax imposed by subtitle B which the executor is required to pay. "(2) RETURN BY PLAN ADMINISTRATOR.—The plan administrator of an employee stock ownership plan or the eligible workerowned cooperative, as the case may be, shall make a return with respect to that portion of the tax imposed by section 2001 which such plan or cooperative is required to pay under section 2210(b)." (4) Subsection (j) of section 6166 (relating to cross references) is amended by adding at the end thereof the following new paragraph: "(6) PAYMENT OF ESTATE TAX BY EMPLOYEE STOCK OWNERSHIP PLAN OR ELIGIBLE WORKER-OWNED COOPERATIVE.—For provision

Ante, p. 892. 26 USC 2210 note-

26 USC 4978.

allowing plan administrator or eligible worker-owned cooperative to elect to pay a certain portion of the estate tax in installments under the provisions of this section, see section 2210(c)." (d) EFFECTIVE DATE.—The amendments made by this section shall apply to those estates of decedents which are required to file returns on a date (including any extensions) after the date of enactment of this Act. SEC. 545. EXCISE TAX ON CERTAIN DISPOSITIONS OF EMPLOYER SECURITIES BY EMPLOYEE STOCK OWNERSHIP PLANS AND CERTAIN COOPERATIVES. (a) IN GENERAL.—Chapter 43 (relating to excise taxes on qualified pension plans), as amended by this Act, is amended by adding at the end thereof the following new section: "SEC. 4978. TAX ON CERTAIN DISPOSITIONS BY EMPLOYEE STOCK OWNERSHIP PLANS AND CERTAIN COOPERATIVES. "(a) TAX ON DISPOSITIONS OF SECURITIES TO WHICH SECTION 1042 APPLIES BEFORE CLOSE OF MINIMUM HOLDING PERIOD.—If, during the

se? i j i.

3-year period after the date on which the employee stock ownership plan or eligible worker-owned cooperative acquired any qualified

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Page:United States Statutes at Large Volume 98 Part 1.djvu/943

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 895

securities in a sale to which section 1042 applied, such plan or cooperative disposes of any qualified securities and— "(1) the total number of shares held by such plan or cooperative after such disposition is less then the total number of employer securities held immediately after such sale, or "(2) except to the extent provided in regulations, the value of qualified securities held by such plan or cooperative after such disposition is less than 30 percent of the total value of all employer securities as of such disposition, there is hereby imposed a tax on the disposition equal to the amount determined under subsection (b).

Ante, p. 887.

"(b) AMOUNT OF TAX.—

"(1) IN GENERAL.—The amount of the tax imposed by paragraph (1) shall be equal to 10 percent of the amount realized on the disposition. "(2) LIMITATION.—The amount realized taken into account under paragraph (1) shall not exceed that portion allocable to qualified securities acquired in the sale to which section 1042 applied (determined as if such securities were disposed of before any other securities). "(3) DISTRIBUTIONS TO EMPLOYEES.—The amount realized on any distribution to an employee for less than fair market value shall be determined as if the qualified security had been sold to the employee at fair market value. "(c) LIABILITY FOR PAYMENT OF TAXES.—The tax imposed by this subsection shall be paid by— "(1) the employer, or "(2) the eligible worker-owned cooperative, that made the written statement described in section 1042(a)(2)(B). "(d) SECTION NOT TO APPLY TO CERTAIN DISPOSITIONS.— "(1) CERTAIN DISTRIBUTIONS TO EMPLOYEES.—This section

shall not apply with respect to any distribution of qualified securities (or sale of such securities) which is made by reason of— "(A) the death of the employee, "(B) the retirement of the employee after the employee has attained 59V2 years of age, "(C) the disability of the employee (within the meaning of section 72(m)(5)), or "(D) the separation of the employee from service for any period which results in a 1-year break in service (within the meaning of section 411(a)(6)(A)). "(2) CERTAIN REORGANIZATIONS.—In the case of any exchange of qualified securities in any reorganization described in section 368(a)(1) for stock of another corporation, such exchange shall not be treated as a disposition for purposes of this section. "(e) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) EMPLOYEE STOCK OWNERSHIP PLAN.—The term 'employee stock ownership plan' has the meaning given to such term by section 4975(e)(7). "(2) QUALIFIED SECURITIES.—The term 'qualified securities' has the meaning given to such term by section 1042(b)(1). "(3) ELIGIBLE WORKER-OWNED COOPERATIVE.—The term 'eligible worker-owned cooperative' has the meaning given to such term by section 1042(b)(1). "(4) DISPOSITION.—The term 'disposition' includes any distribution.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/944

 98 STAT. 896 Ante, p. 852.

PUBLIC LAW 98-369—JULY 18, 1984 "(5) EMPLOYER SECURITIES.—The term 'employer securities' has the meaning given to such term by section 409(1).". (b) CONFORMING AMENDMENT.—The table of sections for chapter 43 is amended by adding at the end thereof the following new item: "Sec. 4978. Tax on certain dispositions and allocations by employee stock ownership plans and certain cooperatives."

26 USC 4978 note.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.

Subtitle E—Miscellaneous 26 USC 402 note. SEC. 551. TREATMENT OF CERTAIN DISTRIBUTIONS FROM A QUALIFIED TERMINATED PLAN.

26 USC 1 et seq.

(a) IN GENERAL.—For purposes of the Internal Revenue Code 1954, if— (1) a distribution was made from a qualified terminated plan to an employee on December 16, 1976, and on January 6, 1977, such employee transferred all of the property received in such distribution to an individual retirement account (within the meaning of section 408(a) of such Code) established for the benefit of such employee, and (2) the remaining balance to the credit of such employee in such qualified terminated plan was distributed to such employee on January 21, 1977, and all the property received by such employee in such distribution was transferred by such employee to such individual retirement account on January 21, 1977, then such distributions shall be treated as qualifying rollover distributions (within the meaning of section 402(a)(5) of such Code) and shall not be includible in the gross income of such employee for the taxable year in which paid. (b) QUALIFIED TERMINATED PLAN.—For purposes of this section, the term "qualified terminated plan" means a pension plan— (1) with respect to which a notice of sufficiency was issued by the Pension Benefit Guaranty Corporation on December 2, 1976, and (2) which was terminated by corporate action on February 20, 1976. (c) REFUND OR CREDIT OF OVERPAYMENT BARRED BY STATUTE OF

LIMITATIONS.—Notwithstanding section 6511(a) of the Internal Revenue Code of 1954 or any other period of limitation or lapse of time, a claim for credit or refund of overpayment of the tax imposed by such Code which arises by reason of this section may be filed by any person at any time within the 1-year period beginning on the date of enactment of this Act. Sections 6511(b) and 6514 of such Code shall not apply to any claim for credit or refund filed under this subsection within such 1-year period. SEC. 552. PARTIAL TERMINATION FOR CERTAIN PENSION PLANS.

For purposes of section 411(d)(3) of the Internal Revenue Code of 1954 (relating to minimum vesting standards in the case of partial terminations), a partial termination shall not be treated as occurring if— (1) the partial termination is a result of a decline in plan participation which—

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text:
Author:Horace Milton Kennedy

Translations

 * History of English Literature: To Wiclif, (tr.), German by Bernhard Ten Brink

title: Author:Horace Milton Kennedy


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/945

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 897

(A) occurs by reason of the completion of the TransAlaska Oil Pipeline construction project, and (B) occurred after December 31, 1975, and before January 1, 1980, with respect to participants employed in Alaska, (2) no discrimination prohibited by section 401(a)(4) of such Code occurred with respect to such partial termination, and (3) the plan administrator establishes to the satisfaction of the Secretary of the Treasury or his delegate that the benefits of this section will not accrue to the employers under the plan. SEC. 553, DISTRIBUTION REQUIREMENTS FOR ACCOUNTS AND ANNUITIES OF AN INSURER IN A REHABILITATION PROCEEDING.

26 USC 401 note.

(a) IN GENERAL.—For purposes of sections 401(a)(9), 408(a)(6) and (7), and 408(b)(3) and (4) of the Internal Revenue Code of 1954— Ante, pp. 865, (1) a trust, custodial account, or annuity or other contract ^^'^• forming part of a pension or profit-sharing plan, or a retirement annuity, or (2) a grantor of an individual retirement account or an individual retirement annuity, shall not be treated as failing to meet the requirements of such sections if such account, annuity, or contract was issued by an insurance company which, on March 15, 1984, was a party to a rehabilitation proceeding under the applicable State insurance law. (b) LIMITATION.—Subsection (a) shall apply only during the period during which— (1) the insurance company continues to be a party to the proceeding described in subsection (a), and (2) distributions under the trust, custodial account, or annuity or other contract may not be made by reason of such proceeding. SEC. 554. EXTENSION OF TIME FOR REPAYMENT OF QUALIFIED REFUNDING LOANS.

Paragraph (2) of section 236(c) of the Tax Equity and Fiscal Responsibility Act of 1982 is amended by adding at the end thereof 26 USC 72 note. the following new subparagraph: "(D) SPECIAL RULE FOR NON-KEY EMPLOYEES.—In the case of a non-key employee (within the meaning of section 416(i)(2) of the Internal Revenue Code of 1954), this paragraph shall be applied by substituting 'January 1, 1985' for 'August 14, 1983 each place it appears." SEC. 555. TECHNICAL AMENDMENTS TO THE INCENTIVE STOCK OPTION PROVISIONS. (a) DETERMINATION OF FAIR MARKET VALUE.—

(1) IN GENERAL.—Subsection (c) of section 422A (relating to special rules) is amended by adding at the end thereof of the following new paragraph: "(10) FAIR MARKET VALUE.—For purposes of this section, the fair market value of stock shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse."

26 USC 422A.

(2) INCENTIVE STOCK OPTION AS AN ITEM OF TAX PREFERENCE.—

Paragraph (10) of section 57(a) (relating to items of tax prefer- 26 USC 57. ence) is amended by adding at the end thereof the following new sentence: "For purposes of this paragraph, the fair market value of a share of stock shall be determined without regard to

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/946

 98 STAT. 898

PUBLIC LAW 98-369—JULY 18, 1984 any restriction other than a restriction which, by its terms, will never lapse." (b) MODIFICATION OP INCENTIVE STOCK OPTIONS.—Subparagraph

26 USC 425. 26 USC 422A note.

26 USC 57 note.

26 USC 425 note.

26 USC 83 note.

(B) of section 425(h)(3) (relating to modifications) is amended by striking out "422A(b)(5),". (c) EFFECTIVE DATES.— (1) FAIR MARKET VALUE.—The amendment made by subsection

(a) shall apply to options granted after March 20, 1984, except that such subsection shall not apply to any incentive stock option granted before September 20, 1984, pursuant to a plan adopted or corporate action taken by the board of directors of the grantor corporation before May 15, 1984. (2) ITEMS OF TAX PREFERENCE.—The amendment made by subsection (b) shall apply to options exercised after March 20, 1984, In the case of an option issued after March 20, 1984, pursuant to a plan adopted or corporate action taken by the board of directors of the grantor corporation before May 15, 1984, the preceding sentence shall be applied by substituting "December 31, 1984" for "March 20, 1984". (3) MODIFICATIONS.—The amendment made by subsection (c) shall apply with respect to modifications of options after March 20, 1984. SEC. 556. TIME FOR MAKING CERTAIN SECTION 83(b) ELECTIONS.

In the case of any transfer of property in connection with the performance of services after June 30, 1976, and on or before November 18, 1982, the election permitted by section 83(b) of the Internal Revenue Code of 1954 may be made, notwithstanding paragraph (2) of such section 83(b), with the income tax return for the first taxable year ending after the date of the enactment of this Act, if— (1) the amount paid for such property was not less than its fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse), and (2) the election is consented to by the person transferring such property. The election shall contain that information required by the Secretary of the Treasury or his delegate for elections permitted by such section 83(b). The period for assessing any tax attributable to a transfer of property which is the subject of an election made pursuant to this section shall not expire before the date which is 3 years after the date such election was made.

26 USC 1239.

 * - 1;; H,

^ Ante, p. 854.

SEC. 557. EMPLOYER AND EMPLOYEE BENEFIT ASSOCIATION TREATED AS RELATED PERSONS UNDER SECTION 1239. (a) GENERAL RULE.—Section 1239 (relating to gain from sale of depreciable property between certain related taxpayers) is amended by adding at the end thereof the following new subsection: "(d) EMPLOYER AND RELATED EMPLOYEE ASSOCIATION.—For purposes of subsection (a), the term 'related person' also includes— "(1) an employer and any person related to the employer (within the meaning of subsection (b)), and "(2) a welfare benefit fund (within the meaning of section 419(e)) which is controlled directly or indirectly by persons referred to in paragraph (1)."

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Page:United States Statutes at Large Volume 98 Part 1.djvu/947

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 899

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 1239 shall apply to sales or exchanges after the date of the enactment of note, this Act in taxable years ending after such date. SEC. 558. ELIMINATION OF RETROACTIVE APPLICATION OF AMENDMENTS MADE BY MULTIEMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980. (a) IN GENERAL.—

(1) LiABiliTY.—Any withdrawal liability incurred by an employer pursuant to part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1381 et seq.) as a result of the complete or partial withdrawal of such employer from a multiemployer plan before September 26, 1980, shall be void. (2) REFUNDS.—Any amounts paid by an employer to a plan sponsor as a result of such withdrawal liability shall be refunded by the plan sponsor to the employer with interest (in accordance with section 401(a)(2)), less a reasonable amount for administrative expenses incurred by the plan sponsor (other than legal expenses incurred with respect to the plan) in calculating, assessing, and refunding such amounts.

29 USC 1381

note.

26 USC 401.

(b) CONFORMING AMENDMENTS.— (1) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF

1974.— (A) Sections 4211(b) and (c), 4217(a), and 4235(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1391 (b) and (c), 1397(a), and 1415(a)) are amended by striking out "April 28, 1980" each place it appears and inserting in lieu thereof "September 25, 1980". (B) Sections 4211(b) and (c), 4217(a), 4219(c)(l)(C)(iii), and 4402(e) of such Act (29 U.S.C. 1391 (b) and (c), 1397(a), 1399(c)(l)(C)(iii), and 1461(e)) are amended by striking out "April 29, 1980" each place it appears and inserting in lieu thereof "September 26, 1980". "(C) Section 4402(f)(1) of such Act (29 U.S.C. 1461(f)(1)) is amended by striking out "April 29, 1985" and inserting in lieu thereof "September 26, 1985". (2) MULTIEMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980.— Section 108(d) of the Multiemployer Pension Plan Amendments Act of 1980 (29 U.S.C. 1385 note) is amended— (A) by striking out "April 29, 1982" in paragraph (1) and inserting in lieu thereof "September 26, 1982"; and (B) by striking out "April 29, 1980" each place it appears in paragraphs (2) and (3) and inserting in lieu thereof "September 26, 1980". (c) No INCREASE IN LIABILITY.—The amendments made by this section shall not be construed to increase the liability incurred by any employer pursuant to part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1381 et seq.), as in effect immediately before the amendments made by subsection (b), as a result of the complete or partial withdrawal of such employer from a multiemployer plan prior to September 26, 1980. (d) SPECIAL RULE FOR CERTAIN BINDING AGREEMENTS.—In the case of an employer who, on September 26, 1980, has a binding agreement to withdraw from a multiemployer plan, subsection (a)(1) shall be applied by substituting "December 31, 1980" for "September 26, 1980".

29 USC 1381 note.

29 USC 1381 note.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/948

 98 STAT. 900

PUBLIC LAW 98-369—JULY 18, 1984 SEC. 559. TELECOMMUNICATION EMPLOYEES.

(a) EMPLOYEE PROTECTION.—Notwithstanding any provisions of the divestiture interchange agreement to the contrary, in the case of any change in employment on or after January 1, 1985, by a covered employee, the recognition of service credit, and enforcement of such recognition, shall be governed in the same manner and to same extent as provided under the divestiture interchange agreement for a change in employment by a covered employee during calendar year 1984. (b) EMPLOYEES COVERED.—For purposes of this section, a covered employee is an individual— (1) who is an employee of an entity subject to the modified final judgment, (2) who is serving in an eligible position, and (3) who— (A) on December 31, 1983, was an employee of any such entity serving in an eligible position, or (B) was a former employee with rehire or recall rights on such date and is rehired during the period of the employee's rehire or recall rights. (c) DEFINITIONS.—For purposes of this section— (1) The term "service credit" means service credit for benefit accrual, vesting, and eligibility for benefits under any pension plan, or any other employee benefits, including the interchange and treatment of associated benefit obligations and assets. (2) The term "change in employment" means the commencement of employment of a covered employee by an entity subject to the modified final judgment after the termination of employment (with or without break in service) of such individual from an eligible position within another entity subject to the modified final judgment. (3) The term "eligible position" means any position (A) which is not a supervisory position, within the meaning of section 2(11) of the National Labor Relations Act (29 U.S.C. 152(11)) or (B) the annual base pay rate for which is not more than $50,000, adjusted by the percentage increase in the consumer price index since December 31, 1983. (4) The term "modified final judgment" means the judgment of the United States District Court for the District of Columbia in the case. United States against Western Electric, et alia, No. 82-0192, as modified. (5) The term "entity subject to the modified final judgment" means— (A) any carrier divested as a result of the modified final judgment, (B) the corporation owning such carrier before divestiture, (C) any other communications common carrier owned, in whole or in part, by such corporation on December 31, 1983, or imi J' • »!.: ^^^ ^^y I n t e r c h a n g e Company (as defined in the divesti^jocf ture interchange agreement) excluding any subsidiary of such company other than any such subsidiary— ,.;C: (i) which was established as of December 31, 1983, and
 * i,,;.;i] '!;

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text:
Author:William Sloane Kennedy

Works

 * Henry W. Longfellow. Biography, anecdote, letters, criticism (1882)
 * Oliver Wendell Holmes, poet, littérateur, scientist (1883)
 * John G. Whittier, the poet of freedom (1892)
 * Reminiscences of Walt Whitman (1896)
 * In Portia′s gardens (1897)
 * Clews to Emerson's mystic verse (1903)
 * Wonders and curiosities of the railway; or, Stories of the locomotive in every land (1906)

Articles in Popular Science Monthly

 * 1.

title: Author:William Sloane Kennedy


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/949

 PUBLIC LAW 98-369—JULY 18, 1984 = ' •

98 STAT. 901

(ii) which participates in a defined benefit pension plan maintained by such Interchange Company. (6) The term "divestiture interchange agreement" refers to the agreement between entities subject to the modified final judgment which was executed as of November 1, 1983, and which provides for mutual reciprocal recognition of service credit. (7) The term "consumer price index" means the Consumer Price Index (all items—United States city average) published monthly by the Bureau of Labor Statistics. (d) COORDINATION WITH OTHER BENEFIT-RELATED PROVISIONS.—

Nothing in this section shall be construed to limit benefits which would otherwise be available to any individual, whether provided under the modified final judgment, under applicable law, or otherwise. SEC. 560. STUDY OF EMPLOYEE WELFARE BENEFIT PLANS.

(a) IN GENERAL,—The Secretary of the Treasury shall make a study of the problems relating to the use of employee welfare benefit plans for the provision of benefits to current and retired employees. Such study shall include a study of the need for participation, vesting, and funding standards. (b) REPORT.—A report of the study conducted under subsection (a), together with such recommendations for legislation as the Secretary deems appropriate, shall be made to the Congress by not later than February 1, 1985. SEC. 561. LIMITATION ON ACCRUAL OF VACATION PAY. (a) GENERAL RULE.—Paragraph (1) of section 463(a) (relating to 26 USC 463. accrual of vacation pay) is amended by striking out "and payable during" and inserting in lieu thereof "and expected to be paid during". (b) EFFECTIVE DATE.—The amendment made by subsection (a) 26 USC 463 note. shall apply to taxable years beginning after March 31, 1984.

TITLE VI—TAX-EXEMPT BOND PROVISIONS Subtitle A—Mortgage Subsidy Bonds SEC. 611. 4-YEAR EXTENSION OF MORTGAGE SUBSIDY BOND AUTHORITY.

(a) GENERAL RULE.—Subparagraph (B) of section 103A(c)(l) (defin- 26 USC 103A. ing qualified mortgage bond) is amended by striking out "December 31, 1983" each place it appears and inserting in lieu thereof "December 31, 1987". (b) REPORTING, BONDS.—

ETC., REQUIREMENTS FOR MORTGAGE

SUBSIDY

(1) IN GENERAL.—Subsection (j) of section 103A (relating to other requirements) is amended by adding at the end thereof the following new paragraphs: "(3) INFORMATION REPORTING REQUIREMENT.—

"(A) IN GENERAL.—An issue meets the requirements of this subsection only if the issuer submits to the Secretary, not later than the 15th day of the 2nd calendar month after the close of the calendar quarter in which the issue is

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Page:United States Statutes at Large Volume 98 Part 1.djvu/950

 98 STAT. 902

PUBLIC LAW 98-369—JULY 18, 1984 issued (or such later time as the Secretary may prescribe with respect to any portion of the statement) a statement concerning the issue which contains— "(i) the name and address of the issuer, "(ii) the date of the issue, the amount of the lendable proceeds of the issue, and the stated interest rate, term, and face amount of each obligation which is part of the issue, "(iii) such information as the Secretary may require in order to determine whether such issue meets the requirements of this section and the extent to which proceeds of such issue have been made available to lowincome individuals, and "(iv) such other information as the Secretary may require. "(B) EXTENSION OF TIME.—The Secretary may grant an extension of time for the filing of any statement under subparagraph (A) if there is reasonable cause for the failure to file such statement in a timely fashion. "(4) STATE CERTIFICATION REQUIREMENTS.—

"(A) IN GENERAL.—An issue meets the requirements of this subsection only if, before the issue, a State official designated by State law (or, where there is no such State official, the Governor) certifies in the manner prescribed by regulations that the issue meets the requirements of subsection (g). "(B) CERTIFICATION FURNISHED TO SECRETARY.—Any certification under subparagraph (A) shall be submitted to the Secretary at the same time as the statement with respect to such issue is submitted under paragraph (3) or such other time as the Secretary may prescribe. '

"(C)

SPECIAL RULE

FOR CONSTITUTIONAL HOME RULE

CITIES.—In the case of any constitutional home rule city (as defined in subsection (g)(5)(C)), the certification under subparagraph (A) shall be made by the chief executive officer of such city. "(5) POLICY STATEMENT.—

"(A) IN GENERAL.—An issue meets the requirements of this subsection only if the applicable elected representative of the governmental unit— "(i) which is the issuer, or "(ii) on whose behalf such issue was issued, has published (after a public hearing following reasonable public notice) a report described in subparagraph (B) by the last day of the year preceding the year in which such issue is issued and a copy of such report has been submitted to the Secretary on or before such last day. "(B) REPORT.—The report referred to in subparagraph (A) which is published by the applicable elected representative of the governmental unit shall include— "(i) a statement of the policies with respect to housing, development, and low-income housing assistance which such governmental unit is to follow in issuing qualified mortgage bonds and mortgage credit certificates, and

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Page:United States Statutes at Large Volume 98 Part 1.djvu/951

 PUBLIC LAW 98-369—JULY 18, 1984

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,

"(ii) an assessment of the compliance of such governmental unit during the preceding 1-year period preceding the date of the report with— "(I) the statement of policy on qualified mortgage bonds and mortgage credit certificates that was set forth in the previous report, if any, of an applicable elected representative of such governmental unit, and "(II) the intent of Congress that State and local governments are expected to use their authority to issue qualified mortgage bonds and mortgage credit certificates to the greatest extent feasible (taking into account prevailing interest rates and conditions in the housing market) to assist lower income families to afford home ownership before assisting higher income families."

98 STAT. 903

'

,, •

(c) TREATMENT OF QUALIFIED VETERANS' MORTGAGE BONDS.—

(1) Subparagraph (C) of section 103A(c)(3) (defining qualified 26 USC 103A. veterans' mortgage bond) is amended by striking out "subsection (j)(l)" and inserting in lieu thereof "subsection (d), paragraphs (1) and (3) of subsection (j), and subsection (o)". (2) Section 103A is amended by adding at the end thereof the following new subsection: "(o) ADDITIONAL REQUIREMENTS FOR QUALIFIED VETERANS' MORTGAGE BONDS.— "(1) VETERANS TO WHOM FINANCING MAY BE PROVIDED.—An

obligation meets the requirements of this subsection only if each mortgagor to whom financing is provided under the issue is a qualified veteran. "(2) REQUIREMENT THAT STATE PROGRAM BE IN EFFECT BEFORE

JUNE 22, 1984.—An issue meets the requirements of this subsection only if it is a general obligation of a State which issued qualified veterans' mortgage bonds before June 22, 1984. "(3) VOLUME LIMITATION.—

"(A) IN GENERAL.—An issue meets the requirements of this subsection only if the aggregate amount of bonds issued £., -? pursuant thereto (when added to the aggregate amount of qualified veterans' mortgage bonds previously issued by the State during the calendar year) does not exceed the State veterans limit for such calendar year. "(B) STATE VETERANS LIMIT.—A State veterans limit for any calendar year is the amount equal to— "(i) the aggregate amount of qualified veterans bonds issued by such State during the period beginning on January 1, 1979, and ending on June 22, 1984 (not including the amount of any qualified veterans bond issued by such State during the calendar year (or portion thereof) in such period for which the amount of such bonds so issued was the lowest), divided by "(ii) the number (not to exceed 5) of calendar years after 1979 and before 1985 during which the State issued qualified veterans bonds (determined by only taking into account bonds issued on or before June 22, 1984). "(4) QUALIFIED VETERAN.—For purposes of this subsection, the term 'qualified veteran' means any veteran—

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Page:United States Statutes at Large Volume 98 Part 1.djvu/952

 98 STAT. 904

PUBLIC LAW 98-369—JULY 18, 1984 "(A) who served on active duty at some time before January 1, 1977, and "(B) who applied for the financing before the later of— "(i) the date 30 years after the last date on which such veteran left active service, or "(ii) January 1, 1985. "(5) GOOD FAITH EFFORT RULES MADE APPLICABLE.—Rules similar to the rules of subparagraphs (B) and (C) of subsection (c)(2) shall apply to the requirements of this subsection. "(6) SPECIAL RULE FOR CERTAIN SHORT-TERM OBLIGATIONS.—In

the case of any obligation which has a term of 1 year or less and which was issued to provide financing for property taxes, the amount taken into account under this subsection with respect to such obligation shall be Vis of its principal amount." 26 USC 103A

note.

(d) EFFECTIVE DATES.— (1) SUBSECTION (a).—The

amendment made by subsection (a) shall apply with respect to obligations issued after December 31, 1983. (2) SUBSECTION (b).—The amendments made by subsection (h) shall apply to obligations issued after December 31, 1984. (3) SUBSECTION (C).—

Ante, p. 903.

(A) IN GENERAL.—Except as provided in subparagraph (B), the amendments made by subsection (c) shall apply to obligations issued after the date of the enactment of this Act. (B) VOLUME LIMITATION.—The requirements of paragraph (3) of section 103A(o) of the Internal Revenue Code of 1954 (as added by this section) shall apply to obligations issued after June 22, 1984. In applying such requirements to obligations issued after such date, obligations issued on or before such date shall not be taken into account under such paragraph (3). (C) QUALIFIED VETERANS' MORTGAGE BONDS AUTHORIZED BEFORE OCTOBER 18, 1983, NOT TAKEN INTO ACCOUNT.—The

requirements of section 103A(o)(3) of the Internal Revenue Code of 1954 shall not apply to any qualified veterans' mortgage bond if^ (i) the issuance of such bond was authorized by a State referendum before October 18, 1983, or (ii) the issuance of such bond was authorized pursuant to a State referendum before December 1, 1983, where such referendum was authorized by action of the State legislature before October 18, 1983. (4) TRANSITIONAL RULE WHERE STATE FORMULA FOR ALLOCATING STATE CEIUNG EXPIRES.—

(A) IN GENERAL.—If a State law which provided a formula for allocating the State ceiling under section 103A(g) of the Internal Revenue Code of 1954 for calendar year 1983 expires as of the close of calendar year 1983, for purposes of section 103A(g) of such Code, such State law shall be treated as remaining in effect after 1983. In any case to which the preceding sentence applies, where the State's expiring allocation formula requires action by a State official to allocate the State ceiling among issuers, actions of such State official in allocating such ceiling shall be effective. (B) TERMINATION.—Subparagraph (A) shall not apply on or after the effective date of any State legislation enacted

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Page:United States Statutes at Large Volume 98 Part 1.djvu/953

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 905

after the date of the enactment of this Act with respect to the allocation of the State ceiling. (C) SPECIAL RULE FOR TEXAS.—In the case of Texas, the Governor of such State may take the actions described in subparagraph (A) pursuant to procedures established by the Governor consistent with the State laws of Texas. (5) SPECIAL RULE FOR DETERMINATIONS OF STATISTICAL AREA.—

For purposes of applying section 103A of the Internal Revenue Code of 1954 and any other provision of Federal law— (A) RESCISSION.—The Director of the Office of Management and Budget shall rescind the designation of the Kansas City, Missouri primary metropolitan statistical area (KCMO PMSA) and the designation of the Kansas City, Kansas primary metropolitan statistical area (Kansas City, KS PMSA), and shall not take any action to designate such two primary metropolitan statistical areas as a consolidated metropolitan statistical area. (B) DESIGNATION.—The Director of the Office of Managers ment and Budget shall designate a single metropolitan statistical area which includes the following: (i) Kansas City, Kansas, (ii) Kansas City, Missouri. (iii) The counties of Johnson, Wyandotte, Leavenworth, and Miami in Kansas. (iv) The counties of Cass, Clay, Jackson, Platte, Ray, »; and Lafayette in Missouri. • The metropolitan statistical area designation pursuant to this subsection shall be known as the "Kansas City Missouri-Kansas Metropolitan Statistical Area". (6) TRANSITIONAL RULE FOR KENTUCKY AND NEVADA.—For purposes of section 103A(g) of the Internal Revenue Code of 1954, in the case of Kentucky and Nevada, subclause (I) of section 103A(g)(6)(B)(ii) of such Code shall be applied as if the first day referred to in such subclause were January 1, 1987. (7) REPORT TO CONGRESS.—The Secretary of the Treasury, in

consultation with the Secretary of Housing and Urban Development, shall, not later than January 1, 1987, submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives regarding the performance of issuers of qualified mortgage bonds and mortgage credit certificates relative to the intent of Congress described in section 103A(j) of the Internal Revenue Code of 1954. SEC. 612. MORTGAGE CREDIT CERTIFICATES.

(a) IN GENERAL.—Subpart A of part IV of subchapter A of chapter 1 (relating to credits against tax) is amended by redesignating section 25 as section 26 and by inserting after section 24 the 26 USC 26. following new section: "SEC 25. INTEREST ON CERTAIN HOME MORTGAGES. "(a) ALLOWANCE OF CREDIT.—

"(1) IN GENERAL.—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the product of— "(A) the certificate credit rate, and

26 USC 25.

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Page:United States Statutes at Large Volume 98 Part 1.djvu/954

 98 STAT. 906

PUBLIC LAW 98-369—JULY 18, 1984 "(B) the interest paid or incurred by the taxpayer during the taxable year on the remaining principal of the certified indebtedness amount. "(2) LIMITATION WHERE CREDIT RATE EXCEEDS 20 PERCENT.—

"(A) IN GENERAL.—If the certificate credit rate exceeds 20 percent, the amount of the credit allowed to the taxpayer under paragraph (1) for any taxable year shall not exceed $2,000. "(B) SPECIAL RULE WHERE 2 OR MORE PERSONS HOLD INTERESTS IN RESIDENCE.—If 2 or more persons hold interests in

any residence, the limitation of subparagraph (A) shall be allocated among such persons in proportion to their respective interests in the residence. "(b)

CERTIFICATE

CREDIT

RATE;

CERTIFIED

INDEBTEDNESS

AMOUNT.—For purposes of this section— "(1) CERTIFICATE CREDIT RATE.—The term 'certificate credit rate' means the rate of the credit allowable by this section which is specified in the mortgage credit certificate. "(2) CERTIFIED INDEBTEDNESS AMOUNT.—The term 'certified indebtedness amount' means the amount of indebtedness which is— "(A) incurred by the taxpayer— "(i) to acquire the principal residence of the taxpayer, "(ii) as a qualified home improvement loan (as defined in section 103A(1)(6)) with respect to such residence, or "(iii) as a qualified rehabilitation loan (as defined in section 103A(1)(7)) with respect to such residence, and "(B) specified in the mortgage credit certificate. "(c) MORTGAGE CREDIT CERTIFICATE; QUALIFIED MORTGAGE CREDIT CERTIFICATE PROGRAM.—For purposes of this section— "(1) MORTGAGE CREDIT CERTIFICATE.—The term 'mortgage

credit certificate' means any certificate which— "(A) is issued under a qualified mortgage credit certificate program by the State or political subdivision having the authority to issue a qualified mortgage bond to provide financing on the principal residence of the taxpayer, "(B) is issued to the taxpayer in connection with the acquisition, qualified rehabilitation, or qualified home improvement of the taxpayer's principal residence, "(C) specifies— "(i) the certificate credit rate, and "(ii) the certified indebtedness amount, and "(D) is in such form as the Secretary may prescribe. "(2) QUALIFIED MORTGAGE CREDIT CERTIFICATE PROGRAM.—

"(A) IN GENERAL.—The term 'qualified mortgage credit certificate program' means any program— "(i) which is established by a State or political subdivision thereof for any calendar year for which it is authorized to issue qualified mortgage bonds, "(ii) under which the issuing authority elects (in such manner and form as the Secretary may prescribe) not to issue an amount of qualified mortgage bonds which it may otherwise issue during such calendar year under section 103 A, "(iii) under which the indebtedness certified by mortgage credit certificates meets the requirements of the

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Page:United States Statutes at Large Volume 98 Part 1.djvu/955

 PUBLIC LAW 98-369—JULY 18, 1984

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 * ,^1

i

following subsections of section 103A (as modified by subparagraph (B) of this paragraph): "(I) subsection (d) (relating to residence requirements), "(II) subsection (e) (relating to 3-year requirement), "(III) subsection (f) (relating to purchase price requirement), "(IV) subsection (h) (relating to portion of loans required to be placed in targeted areas), and "(V) paragraph (1) of subsection (j) (relating to other requirements), "(iv) under which no mortgage credit certificate may be issued with respect to any residence any of the financing of which is provided from the proceeds of a qualified mortgage bond or a qualified veterans' mortgage bond, "(v) except to the extent provided in regulations, which is not limited to indebtedness incurred from particular lenders, "(vi) except to the extent provided in regulations, which provides that a mortgage credit certificate is not transferrable, and "(vii) if the issuing authority allocates a block of mortgage credit certificates for use in connection with a particular development, which requires the developer to furnish to the issuing authority and the homebuyer a certificate that the price for the residence is no higher than it would be without the use of a mortgage credit certificate. "(B) MODIFICATIONS OF SECTION 103A.—Under regulations prescribed by the Secretary, in applying section 103A for purposes of subclauses (II) and (IV) of subparagraph (A)(iii)"(i) each qualified mortgage certificate credit program shall be treated as a separate issue, "(ii) the product determined by multiplying— "(I) the certified indebtedness amount of each mortgage credit certificate issued under such program, by "(II) the certificate credit rate specified in such certificate, shall be treated as proceeds of such issue and the sum of such products shall be treated as the total proceeds of such issue, and "(iii) paragraph (1) of section 103A(e) shall be applied by substituting '100 percent' for '90 percent or more'. Clause (iii) shall not apply if the issuing authority submits a plan to the Secretary for administering the 90-percent requirement of section 103A(e)(l) and the Secretary is satisfied that such requirement will be met under such plan.

"(d) DETERMINATION OF CERTIFICATE CREDIT RATE.—For purposes

of this section— "(1) IN GENERAL.—The certificate credit rate specified in any mortgage credit certificate shall not be less than 10 percent or more than 50 percent. "(2) AGGREGATE LIMIT ON CERTIFICATE CREDIT RATES.—

98 STAT. 907

if.,

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Page:United States Statutes at Large Volume 98 Part 1.djvu/956

 98 STAT. 908

PUBLIC LAW 98-369—JULY 18, 1984 "(A) IN GENERAL.—In the case of each qualified mortgage credit certificate program, the sum of the products determined by multiplying— "(i) the certified indebtedness amount of each mortgage credit certificate issued under such program, by "(ii) the certificate credit rate with respect to such certificate, shall not exceed 20 percent of the nonissued bond amount. "(B) NONISSUED BOND AMOUNT.—For purposes of subparagraph (A), the term 'nonissued bond amount' means, with respect to any qualified mortgage credit certificate program, the amount of qualified mortgage bonds which the issuing authority is otherwise authorized to issue and elects not to issue under subsection (c)(2)(A)(ii). "(3) ADDITIONAL LIMIT IN CERTAIN CASES.—In the case of a qualified mortgage credit certificate program in a State which— "(A) has a State ceiling (as defined in section 103A(g)(4)) for the year an election is made that exceeds 20 percent of the average annual aggregate principal amount of mortgages executed during the immediately preceding 3 calendar years for single family owner-occupied residences located within the jurisdiction of such State, or "(B) issued qualified mortgage bonds in an aggregate amount less than $150,000,000 for calendar year 1983, the certificate credit rate for any mortgage credit certificate shall not exceed 20 percent unless the issuing authority submits a plan to the Secretary to ensure that the weighted average of the certificate credit rates in such mortgage credit certificate program does not exceed 20 percent and the Secretary approves such plan. "(e) SPECIAL RULES AND DEFINITIONS.—For purposes of this section— "(1) CARRYFORWARD OF UNUSED CREDIT.—

Ante, p. 905.

"(A) IN GENERAL.—If the credit allowable under subsection (a) for any taxable year exceeds the applicable tax limit for such taxable year, such excess shall be a carryover to each of the 3 succeeding taxable years and, subject to the limitations of subparagraph (B), shall be added to the credit allowable by subsection (a) for such succeeding taxable year. "(B) LIMITATION.—The amount of the unused credit which may be taken into account under subparagraph (A) for any taxable year shall not exceed the amount by which the applicable tax limit for such taxable year exceeds the sum of the amounts which, by reason of this paragraph, are carried to such taxable year and are attributable to taxable years before the unused credit year. "(C) APPLICABLE TAX LIMIT.—For purposes of this paragraph, the term 'applicable tax limit means the limitation imposed by section 26(a) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section). "(2) INDEBTEDNESS NOT TREATED AS CERTIFIED WHERE CERTAIN REQUIREMENTS NOT IN FACT MET.—Subsection (a) shall not apply

to any indebtedness if all the requirements of subsection (d)(1), (e), (f), and (j) of section 103A and clauses (iv), (v), and (vii) of subsection (c)(2)(A)", were not in fact met with respect to such

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Page:United States Statutes at Large Volume 98 Part 1.djvu/957

 PUBLIC LAW 98-369—JULY 18, 1984 indebtedness. Except to the extent provided in regulations, the requirements described in the preceding sentence shall be treated as met if there is a certification, under penalty of perjury, that such requirements are met. "(3) PERIOD FOR WHICH CERTIFICATE IN EFFECT.—

"(A) IN GENERAL.—Except as provided in subparagraph (B), a mortgage credit certificate shall be treated as in effect with respect to interest attributable to the period— "(i) beginning on the date such certificate is issued, and "(ii) ending on the earlier of the date on which— "(I) the certificate is revoked by the issuing authority, or "(ID the residence to which such certificate relates ceases to be the principal residence of the individual to whom the certificate relates. "(B) CERTIFICATE INVALID UNLESS INDEBTEDNESS INCURRED WITHIN CERTAIN PERIOD.—A certificate shall not apply to

any indebtedness which is incurred after the close of the second calendar year following the calendar year for which the issuing authority made the applicable election under subsection (c)(2)(A)(ii). "(C) NOTICE TO SECRETARY WHEN CERTIFICATE REVOKED.—

Any issuing authority which revokes any mortgage credit certificate shall notify the Secretary of such revocation at such time and in such manner as the Secretary shall prescribe by regulations. "(4) REISSUANCE OF MORTGAGE CREDIT CERTIFICATES.—The Secretary may prescribe regulations which allow the administrator of a mortgage credit certificate program to reissue a mortgage credit certificate specifying a certified mortgage indebtedness that replaces the outstanding balance of the certified mortgage indebtedness specified on the original certificate to any taxpayer to whom the original certificate was issued, under such terms and conditions as the Secretary determines are necessary to ensure that the amount of the credit allowable under subsection (a) with respect to such reissued certificate is equal to or less than the amount of credit which would be allowable under subsection (a) with respect to the original certificate for any taxable year ending after such reissuance. "(5) PUBLIC NOTICE THAT CERTIFICATES WILL BE ISSUED.—At

least 90 days before any mortgage credit certificate is to be issued after a qualified mortgage credit certificate program, the issuing authority shall provide reasonable public notice of— "(A) the eligibility requirements for such certificate, "(B) the methods by which such certificates are to be issued, and "(C) such other information as the Secretary may require. "(6)

INTEREST PAID OR ACCRUED TO RELATED PERSONS.—No

credit shall be allowed under subsection (a) for any interest paid or accrued to a person who is a related person to the taxpayer (within the meaning of section 103G))(6)(C)(i)). "(7) PRINCIPAL RESIDENCE.—The term 'principal residence' has the same meaning as when used in section 1034. "(8)

QUALIFIED REHABIUTATION AND HOME IMPROVEMENT.—

98 STAT. 909

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Page:United States Statutes at Large Volume 98 Part 1.djvu/958

 98 STAT. 910

PUBLIC LAW 98-369—JULY 18, 1984 "(A) QUALIFIED REHABILITATION.—The term 'qualified rehabilitation' has the meaning given such term by section 103A(1)(7)(B). "(B) QUALIFIED HOME IMPROVEMENT.—The term 'qualified home improvement' means an alteration, repair, or improvement described in section 103A(1)(6). "(9) QuAUFiED MORTGAGE BOND.—The term 'qualified mortgage bond' has the meaning given such term by section 103A(c)(l). "(10) MANUFACTURED HOUSING.—For purposes of this section, the term 'single family residence' includes any manufactured home which has a minimum of 400 square feet of living space and a minimum width in excess of 102 inches and which is of a kind customarily used at a fixed location. Nothing in the preceding sentence shall be construed as providing that such a home will be taken into account in making determinations under section 103A. "(f) REDUCTION IN AGGREGATE AMOUNT OF QUALIFIED MORTGAGE BONDS WHICH MAY B E ISSUED WHERE CERTAIN REQUIREMENTS NOT MET.—

"(1) IN GENERAL.—If for any calendar year any mortgage credit certificate program which satisfies procedural requirements with respect to volume limitations prescribed by the Secretary fails to meet the requirements of paragraph (2) of subsection (d), such requirements shall be treated as satisfied with respect to any certified indebtedness of such program, but the applicable State ceiling under paragraph (4) of section 103A(g) for the State in which such program operates shall be reduced by 1.25 times the correction amount with respect to such failure. Such reduction shall be applied to such State ceiling for the calendar year following the calendar year in which the Secretary determines the correction amount with respect to such failure. "(2) CORRECTION AMOUNT.—

"(A) IN GENERAL.—For purposes of paragraph (1), the term 'correction amount' means an amount equal to the excess credit amount divided by 0.20. "(B) EXCESS CREDIT AMOUNT.—

"(i) IN GENERAL.—For purposes of subparagraph (A)(ii), the term 'excess credit amount' means the excess of— "(I) the credit amount for any mortgage credit certificate program, over "(II) the amount which would have been the credit amount for such program had such program met the requirements of paragraph (2) of subsection (d). "(ii) CREDIT AMOUNT.—For purposes of clause (i), the

term 'credit amount' means the sum of the products determined under clauses (i) and (ii) of subsection (d)(2)(A). "(3) SPECIAL RULE FOR STATES HAVING CONSTITUTIONAL HOME

RULE CITIES.—In the case of a State having one or more constitutional home rule cities (within the meaning of section 103A(g)(5)(C)), the reduction in the State ceiling by reason of paragraph (1) shall be allocated to the constitutional home rule

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Page:United States Statutes at Large Volume 98 Part 1.djvu/959

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 911

city, or to the portion of the State not within such city, whichever caused the reduction. "(4) EXCEPTION WHERE CERTIFICATION PROGRAM.—The provisions of this subsection shall not apply in any case in which there is a certification program which is designed to insure that the requirements of this section are met and which meets such requirements as the Secretary may by regulations prescribe. "(5) WAIVER.—The Secretary may waive the application of paragraph (1) in any case in which he determines that the failure is due to reasonable cause. "(g) REPORTING REQUIREMENTS.—Each person who makes a loan which is a certified indebtedness amount under any mortgage credit certificate shall file a report with the Secretary containing— "(1) the name, address, and social security account number of the individual to which the certificate was issued, "(2) the certificate's issuer, date of issue, certified indebtedness amount, and certificate credit rate, and "(3) such other information as the Secretary may require by regulations. Each person who issues a mortgage credit certificate shall file a report showing such information as the Secretary shall by regulations prescribe. Any such report shall be filed at such time and in such manner as the Secretary may require by regulations. "(h) TERMINATION.—No election may be made under subsection (c)(2)(A)(ii) for any calendar year after 1987. "(i) REGULATIONS; CONTRACTS.—

"(1) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations which may require recipients of mortgage credit certificates to pay a reasonable processing fee to defray the expenses incurred in administering the program. "(2) CONTRACTS.—The Secretary is authorized to enter into contracts with any person to provide services in connection with the administration of this section." (b) APPLICATION WITH SECTION 103A.—Subsection (g) of section 103A (relating to limitation on aggregate amount of qualified mortgage bonds issued during any calendar year) is amended by adding at the end thereof the following new paragraph: "(8)

^'

REDUCTION FOR MORTGAGE CREDIT CERTIFICATES.—The

26 USC 103A. ^ ^.^ ^

applicable limit of any issuing authority for any calendar year ' ''' shall be reduced by the sum of— "(A) the amount of qualified mortgage bonds which such authority elects not to issue under section 25(c)(2)(A)(ii) Ante, p. 905. during such year, plus "(B) the amount of any reduction in such ceiling under ' section 25(f) applicable to such authority for such year." (c) DISALLOWANCE OF PORTION OF DEDUCTION FOR INTEREST WHERE

CREDIT TAKEN.—Section 163 (relating to deduction for interest) is 26 USC 163. amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection: "(g) REDUCTION OF DEDUCTION WHERE SECTION 25 CREDIT TAKEN.—

The amount of the deduction under this section for interest paid or accrued during any taxable year on indebtedness with respect to which a mortgage credit certificate has been issued under section 25 shall be reduced by the amount of the credit allowable with respect to such interest under section 25 (determined without regard to section 26)." Ante, p. 905.

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/960

 98 STAT. 912

PUBLIC LAW 98-369—JULY 18, 1984 . (d) CIVIL PENALTIES.—

(1) Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: 26 USC 6708. Ante, p. 682.

"SEC. 6708. PENALTIES WITH RESPECT TO MORTGAGE CREDIT CERTIFIGATES. "(a) NEGLIGENCE.—If^

Ante, p. 905.

"(1) any person makes a material misstatement in any verified written statement made under penalties of perjury with respect to the issuance of a mortgage credit certificate, and "(2) such misstatement is due to the negligence of such person, such person shall pay a penalty of $1,000 for each mortgage credit certificate with respect to which such a misstatement was made. "(b) FRAUD.—If a misstatement described in subsection (a)(1) is due to fraud on the part of the person making such misstatement, in addition to any criminal penalty, such person shall pay a penalty of $10,000 for each mortgage credit certificate with respect to which such a misstatement is made. "(c) REPORTS.—Any person required by section 25(g) to file a report with the Secretary who fails to file the report with respect to any mortgage credit certificate at the time and in the manner required by the Secretary shall pay a penalty of $200 for such failure unless it is shown that such failure is due to reasonable cause and not to willful neglect. In the case of any report required under the second sentence of section 25(g), the aggregate amount of the penalty imposed by the preceding sentence shall not exceed $2,000. "(d) MORTGAGE CREDIT CERTIFICATE.—The term 'mortgage credit certificate' has the meaning given to such term by section 25(c)." (2) The table of sections for subchapter B of chapter 68 is amended by adding at the end thereof the following new item: "Sec. 6708. Penalties with respect to mortgage credit certificates." (e) TECHNICAL AMENDMENTS.—

Ante, pp. 826, 827; 26 USC 901. Ante, p. 826.

Ante, p. 838.

26 USC 168.

(1) Sections 28(d)(2), 29(b)(5), 30(g)(1)(A), 38(c)(2), and 901(a), as amended by this Act, are each amended by striking out "section 250t))" and inserting in lieu thereof "section 260t))". (2) Section 23(b)(5), as amended by this Act, is amended by striking out "section 25(a)" and inserting in lieu thereof "section 26(a)" and by striking out "(other than this section)" and inserting in lieu thereof "(other than this section and section 25)". (3) Paragraph (3) of section 55(c) is amended— (A) by striking out "25" each place it appears and inserting in lieu thereof "26", and (B) by striking out "section 23, 30, or 38" and inserting in lieu thereof "section 23, 25, 30, or 38". (4) Clause (iii) of section 168(i)(l)(D), as added by section 208(a) of the Tax Equity and Fiscal Responsibility Act of 1982 and amended by this Act, is amended by striking out "section 25(b)(2)" and inserting in lieu thereof "section 26(b)(2)". (5) Clause (iii) of section 168(i)(l)(D), as added by section 209(b) ot the Tax Equity and Fiscal Responsibility Act of 1982 and amended by this Act, is amended by striking out "section 25(b)(2)" and inserting in lieu thereof "section 26(b)(2)".

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/961

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 913

(f) CONFORMING AMENDMENT.—The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking out the item relating to section 25 and inserting in lieu thereof the following: "Sec. 25. Interest on certain home mortgages. "Sec. 26. Limitation based on tax liability; definition of tax liability." (g) EFFECTIVE DATE.—

26 USC 25 note. (1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to interest paid or accrued after December 31, 1984, on indebtedness incurred after December 31, 1984. '; (2) ELECTIONS.—The amendments made by this section shall apply to elections under section 25(c)(2)(A)(ii) of the Internal > Revenue Code of 1954 (as added by this section) for calendar Ante, p. 905. years after 1983. SEC. 613. AUTHORITY TO BORROW FROM FEDERAL FINANCING BANK.

(a) GENERAL RULE.—Upon application by the appropriate State Housing Agency of Oregon, the Federal Financing Bank shall make qualified cash flow loans to such Agency. Such loans shall bear interest at a rate equal to the average rate on the applicable mortgage bonds with respect to which such loans were made. (b) QUALIFIED CASH FLOW LOANS.—For purposes of this section, the term "qualified cash flow loan" means any loan with respect to an applicable mortgage bond reasonably necessary to cover any excess determined under subsection (c)(2) on the basis of actual payments. The aggregate amount of such loans which may be outstanding at any 1 time shall not exceed $300,000,000. (c) APPLICABLE MORTGAGE BONDS.—For purposes of this section, the term "applicable mortgage bond" means any qualified veterans' mortgage bond issued as part of an issue— (1) which was outstanding on December 5, 1980, (2) with respect to which the excess of—(A) the projected aggregate payments of principal on the applicable mortgage bonds during the 15-fiscal year period beginning with fiscal year 1984, over (B) the projected aggregate payments during such period of principal on mortgages financed by the applicable mortgage bonds, exceeds 12 percent of the aggregate principal amount of such bonds outstanding on July 1, 1983, (3) with respect to which the amount of the average annual prepayments during fiscal years 1981, 1982, and 1983 was less than 2 percent of the average of the loan balances as of the beginning of each of such fiscal years, and (4) which, for fiscal year 1983, had a prepayment experience rate that did not exceed 20 percent of the prepayment experience rate of the Federal Housing Administration in the State or region in which the issuer is located. (d) DEFINITIONS.— (1) ASSUMPTIONS USED IN MAKING PROJECTION.—The computa-

tion under subsection (c)(2) shall be made by using the following percentage of the prepayment experience of the Federal Housing Administration in the State or region in which the issuer of the applicable mortgage bonds is located:

31-194 0 - 86 - 31: QL. 3 Part 1

]

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/962

 98 STAT. 914

PUBLIC LAW 98-369—JULY 18, 1984 Fiscal Year: 1984 1985 1986 1987 and thereafter

ekn c-

26 USC 103A ^0*^6.

Percentage: 15 20 25 30.

(2) QUALIFIED VETERANS' MORTGAGE BONDS.—The term "qualified veterans' mortgage bonds" has the meaning given to such term by section 103A(c)(3) of the Internal Revenue Code of 1954. SEC. 614. ELIMINATION OF CERTAIN EXCEPTIONS TO THE APPLICATION OF THE MORTGAGE SUBSIDY BOND TAX ACT OF 1980. Section 1104 of the Mortgage Subsidy Bond Tax Act of 1980 is amended by adding at the end thereof the following new subsections: "(p) MOST EXCEPTIONS NOT TO APPLY TO BONDS ISSUED AFTER DECEMBER 31, 1984.—In addition to any obligations to which the

26 USC 103A, prec. 101.

amendments made by section 1102 apply by reason of the provisions of this section, the amendments made by section 1102 shall apply, notwithstanding any other provision of this section (other than subsection (n)), to obligations issued after December 31, 1984, all or a major portion of the proceeds of which are used to finance new mortgages on single-family residences that are owner occupied. "(q) REDUCTION OF STATE CEILING BY AMOUNT OF SPECIAL MORTGAGE BONDS ISSUED BEFORE 1985.—

"(1) IN GENERAL.—Notwithstanding any other provision of this section (other than subsections (n) and (r)), any obligation— "(A) which is part of an issue all or a major portion of the proceeds of which are used to finance new mortgages in single-family residences that are owner occupied, "(B) which were issued by issuing authorities in such State after June 15, 1984, and before January 1, 1985, and "(C) to which the amendments made by section 1102 do not apply by reason of any provision of this section other than subsection (n), shall, for purposes of applying the Internal Revenue Code of 26 USC 1 et seq. 1954, be treated as an obligation which is not described in section 103(a) of such Code if the aggregate face amount of such issue exceeds the portion of the State ceiling that is allocated by the State to such issue prior to the date of issuance of such issue. "(2) APPLICATION OF SECTION 103A (g).—For purposes of applying section 103A(g) of such (Dode, the State ceiling for calendar year 1984 shall be reduced by the aggregate amount allocated by the State to any issues described in paragraph (1). "(3) STATE CEILING.—For purposes of this subsection, the term 'State ceiling' has the meaning given to such term by section 103A(g)(4) of the Internal Revenue Code of 1954. "(r) EXCEPTIONS TO SUBSECTION (q).—Subsection (q) shall not apply with respect to— "(1) obligations— "(A) the proceeds of which are used to finance the River Place Project located in Minneapolis, Minnesota, and "(B) the aggregate face amount of which does not exceed $55,000,000, or "(2) obligations— "(A) the proceeds of which are used to finance the Waseca, Minnesota project, and

1 j-tf.f € '.,jp • if - as ^ c -

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text: Author:W. Henry Kesteven

title: Author:W. Henry Kesteven


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/963

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 915

"(B) the aggregate face amount of which does not exceed $7,800,000."

Subtitle B—Private Activity Bonds PART I—GENERAL RESTRICTIONS SEC. 621. LIMITATION ON AGGREGATE AMOUNT OF PRIVATE ACTIVITY BONDS. Section 103 (relating to interest on certain governmental obliga- 26 USC 103. tions) is amended by redesignating subsection (n) as subsection (o) Post, p. 926. and by inserting after subsection (m) the following new subsection: "(n) LIMITATION ON AGGREGATE AMOUNT OF PRIVATE ACTIVITY BONDS ISSUED DURING ANY CALENDAR YEAR.—

"(1) IN GENERAL.—A private activity bond issued as part of an issue shall be treated as an obligation not described in subsection (a) if the aggregate amount of private activity bonds issued pursuant to such issue, when added to the aggregate amount of -• private activity bonds previously issued by the issuing authority during the calendar year, exceeds such authority's private activity bond limit for such calendar year. "(2) PRIVATE ACTIVITY BOND LIMIT FOR STATE AGENCIES.—For

purposes of this subsection— "(A) IN GENERAL.—The private activity bond limit for any agency of the State authorized to issue private activity 'Y:.: bonds for any calendar year shall be 50 percent of the State ceiling for such calendar year. o

r

"(B)

SPECIAL RULE WHERE STATE HAS MORE THAN

i

AGENCY.—If more than 1 agency of the State is authorized to issue private activity bonds, all such agencies shall be treated as a single agency. "(3) PRIVATE ACTIVITY BOND LIMIT FOR OTHER ISSUERS.—For

purposes of this subsection— n "(A) IN GENERAL.—The private activity bond limit for any issuing authority (other than a State agency) for any calendar year shall be an amount which bears the same ratio to 5, 50 percent of the State ceiling for such calendar year as— "(i) the population of the jurisdiction of such issuing ,. authority, bears to "(ii) the population for the entire State. "(B) OVERLAPPING JURISDICTIONS.—For purposes of subparagraph (A)(i), the rules of section 103A^)(3)(B) shall apply. "(4) STATE CEILING.—For purposes of this subsection— "(A) IN GENERAL.—The State ceiling applicable to any State for any calendar year shall be the greater of ^f "(i) an amount equal to $150 multiplied by the State's population, or "(ii) $200,000,000. "(B) PHASE IN OF LIMITATION WHERE AMOUNT OF I 9 8 3 PRIVATE ACTIVITY BONDS EXCEEDS THE C E I U N G. —

j,

"(i) IN GENERAL.—In the case of any State which has an excess bond amount for 1983, the State ceiling for calendar year 1984 shall be the sum of the State ceiling determined under subparagraph (A) plus 50 percent of the excess bond amount for 1983.

' ' i^ ^ J

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/964

 98 STAT. 916

PUBLIC LAW 98-369—JULY 18, 1984 "(ii) EXCESS BOND AMOUNT FOR 1983.—For purposes of

clause (i), the excess bond amount for 1983 in any State is the excess (if any) o— f ^ "(I) the aggregate amount of private activity bonds issued by issuing authorities in such State during the first 9 months of calendar year 1983 multiplied by Va, over "(II) the State ceiling determined under subparagraph (A) for calendar year 1984. "(C) ADJUSTMENT OF CEIUNG TO REFLECT PARTIAL TERMINATION OF SMALL ISSUE EXEMPTION.—In the case of calendar

years after 1986, subparagraph (A) shall be applied by substituting '$100' for '$150. "(5) SPECIAL RULE FOR STATES WITH CONSTITUTIONAL HOME

RULE CITIES.—In the case of any State with 1 or more constitutional home rule cities (as defined in section 103A(g)(5)(C)), the rules of paragraph (5) of section 103A(g) shall apply for purposes of this subsection. "(6) STATE MAY PROVIDE FOR DIFFERENT ALLOCATION.—

"(A) IN GENERAL.—A State may, by law provide a different formula for allocating the State ceiling among the governmental units in such State having authority to issue private activity bonds. "(B) INTERIM AUTHORITY FOR GOVERNOR.—

]

"(i) IN GENERAL.—The Governor of any State may proclaim a different formula for allocating the State ceiling among the governmental units in such State having authority to issue private activity bonds. "(ii) TERMINATION OF AUTHORITY.—The authority provided in clause (i) shall not apply after the earlier of— "(I) the first day of the first calendar year beginning after the legislature has met in regular session for more than 60 days after the date of the enactment of this paragraph, or "(II) the effective date of any State legislation with respect to the allocation of the State ceiling. "(C) STATE MAY NOT ALTER ALLOCATION TO CONSTITUTIONAL

HOME RULE CITIES.—The rules of paragraph (6)(C) of section 103A(g) shall apply for purposes of this paragraph. "(7) PRIVATE ACTIVITY BOND.—For purposes of this subsection— "(A) IN GENERAL.—Except as otherwise provided in the paragraph, the term 'private activity bond' means any obligation the interest on which is exempt from tax under subsection (a) and which is— "(i) an industrial development bond, or "(ii) a student loan bond. "(B) EXCEPTION FOR MULTIFAMILY HOUSING.—The term 'private activity bond' shall not include any obligation described in subsection (b)(4)(A) nor any housing program obligation under section 11(b) of the United States Housing 42 USC 14371.

Act of 1937. "(C) EXCEPTION FOR CERTAIN FACILITIES DESCRIBED I N SECTION 103(b)(4)(c) OR (D). —

"(i) IN GENERAL.—The term 'private activity bond' shall not include any obligation described in subparagraph (C) or (D) of subsection (b)(4), but only if the

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/965

 PUBLIC LAW 98-369—JULY 18, 1984 property described in such subparagraph is owned by or on behalf of a governmental unit. "(ii) EXCEPTION NOT TO APPLY TO CERTAIN PARKING

'

FACILITIES.—For purposes of clause (i), subparagraph (D) of subsection (b)(4) shall be applied as if it did not contain the phrase 'parking facilities'. "(iii) DETERMINATION OF WHETHER PROPERTY OWNED BY GOVERNMENTAL UNIT.—For purposes of clause (i), property shall not be treated as not owned by a governmental unit solely by reason of the length of the lease to which it is subject if the lessee makes an irrevocable election (binding on the lessee and all successors in interest under the lease) not to claim depreciation or an investment credit with respect to such property. "(iv) RESTRICTION WHERE SIGNIFICANT FRONT END

LOADING,—Under regulations prescribed by the Secretary, clause (i) shall not apply in any case where the property is leased under a lease which has significant front end loading of rental accruals or payments. "(D) REFUNDING ISSUES.—The term 'private activity bond' shall not include any obligation which is issued to refund another obligation to the extent that the amount of such obligation does not exceed the amount of the refunded obligation. In the case of any student loan bond, the preceding sentence shall apply only if the maturity date of the refunding obligation is not later than the later of— "(i) the maturity of the obligation to be refunded, or "(ii) the date 17 years after the date on which the refunded obligation was issued (or in the case of a series of refundings, the date on which the original obligation was issued). "(8) STUDENT LOAN BONDS.—For purposes of this subsection, the term 'student loan bond' means an obligation which is issued as part of an issue all or a major portion of the proceeds of which are to be used directly or indirectly to finance loans to individuals for educational expenses. "(9) POPULATION.—For purposes of this subsection, determinations of the population of any State (or issuing authority) shall be made with respect to any calendar year on the basis of the most recent census estimate of the resident population of such State (or issuing authority) published by the Bureau of the Census before the beginning of such calendar year. "(10) ELECTIVE CARRYFORWARD OF UNUSED LIMITATION FOR SPECIFIED PROJECT.— "(A) IN GENERAL.—If—

"(i) an issuing authority's private activity bond limit for any calendar year after 1983, exceeds "(ii) the aggregate amount of private activity bonds issued during such calendar year by such authority, such authority may elect to treat all (or any portion) of such excess as a carryforward for 1 or more carryforward projects. "(B) ELECTION MUST SPECIFY PROJECT.—In any election

under subparagraph (A), the issuing authority shall— "(i) specify the project (or projects) for which the carryforward is elected, and

98 STAT. 917

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text: Author:John Arnold Keyes

title: Author:John Arnold Keyes


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/966

 98 STAT. 918

PUBLIC LAW 98-369—JULY 18, 1984 "(ii) specify the portion of the excess described in subparagraph (A) which is to be a carr3rforward for each such project. "(C) U S E OF CARRYFORWARD.—

"(i) IN GENERAL.—If any issuing authority elects a carryforward under subparagraph (A) with respect to any carryforward project, any private activity bonds issued by such authority with respect to such project during the 3 calendar years (or, in the case of a project described in subsection (b)(4)(F), 6 calendar years) following the calendar year in which the carryforward arose shall not be taken into account under paragraph (1) to the extent the amount of such bonds do not exceed the amount of the carryforward elected for such project. "(ii) ORDER IN WHICH CARRYFORWARD USED.—Carry-

forwards elected with respect to any project shall be used in the order of the calendar years in which they arose. "(D) ELECTION.—Any election made under this paragraph shall be made at such time and in such manner as the Secretary shall by regulations prescribe. Any such election (and any specification contained therein), once made, shall be irrevocable. "(E) CARRYFORWARD PROJECT.—For purposes of this paragraph, the term 'carr5rforward project' means— "(i) any project described in paragraph (4) or (5) of subsection (b), and "(ii) the purpose of issuing student loan bonds. "(11)

TREATMENT

OF

QUALIFIED

SCHOLARSHIP

FUNDING

BONDS.—In the case of a qualified scholarship funding bond (as defined in subsection (e)), such bond shall be treated for purposes of this subsection as issued by a State or local issuing authority (whichever is appropriate). "(12) CERTIFICATION OF NO CONSIDERATION FOR ALLOCATION.—

"(A) IN GENERAL.—Any private activity bond allocated any portion of the State limit shall not be exempt from tax under subsection (a) unless the public official if any responsible for such allocation certifies under penalty of perjury that the allocation was not made in consideration of any bribe, gift, gratuity, or direct or indirect contribution to any political campaign. "(B)

26 USC 103.

ANY CRIMINAL PENALTY MADE APPLICABLE.—Any

person willfully making an allocation described in subparagraph (A) in consideration of any bribe, gift, gratuity, or direct or indirect contribution to any politicad campaign shall be subject to criminal penalty to the same extent as if such allocation were a willful attempt to evade tax imposed by this title." SEC. 622. TAX EXEMPTION DENIED WHERE OBLIGATION DIRECTLY OR INDIRECTLY GUARANTEED BY FEDERAL GOVERNMENT. Subsection (h) of section 103 (relating to certain obligations which must not be guaranteed or subsidized under a energy program) is amended to read as follows: "(h) OBLIGATION MUST NOT B E GUARANTEED, ETC.—

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/967

 PUBLIC LAW 98-369—JULY 18, 1984 "(1) IN GENERAL.—An obligation shall not be treated as an obligation described in subsection (a) if such obligation is federally guaranteed. "(2) FEDERALLY GUARANTEED DEFINED.—For purposes of paragraph (1), an obligation is federally guaranteed if— "(A) the payment of principal or interest with respect to such obligation is guaranted (in whole or in part) by the United States (or any agency or instrumentality thereof), "(B) such obligation is issued as part of an issue and a significant portion of the proceeds of such issue are to be— "(i) used in making loans the payment of principal or interest with respect to which are to be guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof), or "(ii) invested (directly or indirectly) in federally insured deposits or accounts, or "(C) the payment of principal or interest on such obligation is otherwise indirectly guaranteed (in whole or in part^ by the United States (or an agency or instrumentality thereof).

98 STAT. 919

ti;

.; •:;

"(3) EXCEPTIONS.— "(A) CERTAIN INSURANCE PROGRAMS.—An obligation shall

not be treated as federally guaranteed by reason of— "(i) any guarantee by the Federal Housing Administration, the Veterans' Administration, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, "(ii) any guarantee of student loans and any guarantee by the Student Loan Marketing Association to finance student loans, "(iii) any guarantee by the Small Business Administration with respect to qualified contracts for pollution control facilities (within the meaning of section 404(a) of the Small Business Investment Act of 1958, as in 15 USC 694-1. effect on the date of the enactment of the Tax Reform Act of 1984) if— "(I) the Administrator of the Small Business Administration charges a fee for making such guarantee, and "(II) the amount of such fee equals or exceeds 1 percent of the amount guaranteed, or "(iv) any guarantee by the Bonneville Power Authority pursuant to the Northwest Power Act (16 U.S.C. 839d) as in effect on the date of the enactment of the Tax Reform Act of 1984 with respect to any obligation issued before July 1, 1989. "(B) DEBT SERVICE, ETC.—Paragraph (1) shall not apply to— "(i) proceeds of the issue invested for an initial temporary period until such proceeds are needed for the purpose for which such issue was issued, "(ii) investments of a bona fide debt service fund, "(iii) investments of a reserve which meet the requirements of subsection (c)(4)(B), "(iv) investments in obligations issued by the United States Treasury, or

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/968

 98 STAT. 920

PUBLIC LAW 98-369—JULY 18, 1984 "(v) other investments permitted under regulations. "(C) EXCEPTION FOR HOUSING PROGRAMS.—

42 USC 14371.

"(i) IN GENERAL.—Except as provided in clause (ii), paragraph (1) shall not apply to— "(I) an obligation described in subsection (b)(4)(A) or a housing program obligation under section 11(b) of the United States Housing Act of 1937, "(II) a qualified mortgage bond (as defined in section 103A(c)(l)), or "(III) a qualified veterans' mortgage bond (as defined in section 103A(c)(3)). "(ii)

EXCEPTION NOT TO APPLY WHERE OBLIGATION

INVESTED IN FEDERALLY INSURED DEPOSITS OR ACCOUNTS.—Clause (i) shall not apply to any obligation which is federally guaranteed within the meaning of paragraph (2)(B)(ii). "(D)

LOANS TO, OR GUARANTEES BY, FINANCIAL INSTITU-

TIONS.—Except as provided in paragraph (2)(B)(ii), an obligation which is issued as part of an issue shall not be treated as federally guaranteed merely by reeison of the fact that the proceeds of such issue are used in making loans to a financial institution or there is a guarantee by a financial institution. "(4) DEFINITIONS.—For purposes of this subsection— "(A) TREATMENT OF CERTAIN ENTITIES WITH AUTHORITY TO

BORROW FROM UNITED STATES.—To the extent provided in regulations prescribed by the Secretary, any entity with statutory authority to borrow from the United States shall be treated as an instrumentality of the United States. Except in the case of a private activity bond (as defined in subsection (n)(7)), nothing in the preceding sentence shall be construed as treating the District of Columbia or any possession of the United States as an instrumentality of the United States. "(B) FEDERALLY INSURED DEPOSIT OR ACCOUNT.—The term 'federeilly insured deposit or account' means any deposit or account in a financial institution to the extent such deposit or account is insured under Federal law by the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation, the National Credit Union Administration, or any similar federally chartered corporation. "(5) CERTAIN OBLIGATIONS SUBSIDIZED UNDER ENERGY PROGRAM.—

"(A) IN GENERAL.—An obligation to which this paragraph applies shall be treated as an obligation not described in subsection (a) if the payment of the principal or interest with respect to such obligation is to be made (in whole or in part) under a program of the United States, a State, or a political subdivision of a State the principal purpose of which is to encourage the production or conservation of energy. "(B)

OBLIGATIONS TO WHICH PARAGRAPH APPLIES.—This

paragraph shall apply to any obligations to which paragraph (1) of subsection (b) does not apply by reason of— "(i) subsection (b)(4)(H) (relating to qualified hydroelectric generating facilities), or

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text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/969

 PUBLIC LAW 98-369—JULY 18, 1984 "(ii) subsection (g) (relating to qualified steam-generating or alcohol-producing facilities)." SEC. 623. AGGREGATE LIMIT PER TAXPAYER FOR SMALL ISSUE EXCEPTION. Subsection (b) of section 103 (relating to industrial development bonds) is amended by adding at the end thereof the following new paragraph: "(15) AGGREGATE LIMIT EXCEPTION.—

98 STAT. 921

26 USC 103.

PER TAXPAYER FOR SMALL ISSUE

"(A) IN GENERAL.—Paragraph (6) of this subsection shall not apply to any issue if the aggregate authorized face amount of such issue allocated to any test-period beneficiary (when increased by the outstanding tax-exempt IDE's of such beneficiary) exceeds $40,000,000. j;

"(B) OUTSTANDING TAX-EXEMPT IDB'S OF ANY PERSON.—For

purposes of applying subparagraph (A) with respect to any issue, the outstanding tax-exempt IDB's of any person who is a test-period beneficiary with respect to such issue is the aggregate face amount of all industrial development bonds the interest on which is exempt from tax under subsection (a)"(i) which are allocated to such beneficiary, and "(ii) which are outstanding at the time of such later issue (not including as outstanding any obligation which is to be redeemed from the proceeds of the later issue). "(C) ALLOCATION OF FACE AMOUNT OF AN ISSUE.—

"(i) IN GENERAL.—Except as otherwise provided in regulations, the portion of the face amount of an issue allocated to any test-period beneficiary of a facility financed by the proceeds of such issue (other than an owner of such facility) is an amount which bears the same relationship to the entire face amount of such issue as the portion of such facility used by such beneficiary bears to the entire facility. "(ii) OWNERS.—Except as otherwise provided in regulations, the portion of the face amount of an issue allocated to any test-period beneficiary who is an owner of a facility financed by the proceeds of such issue is an amount which bears the same relationship to the entire face amount of such issue as the portion of such facility owned by such beneficiary bears to the entire facility. "(D) TEST-PERIOD BENEFICIARY.—For purposes of this paragraph, except as provided in regulations, the term 'testperiod beneficiary' means any person who was an owner or a principal user of facilities being financed by the issue at any time during the 3-year period beginning on the later of— "(i) the date such facilities were placed in service, or "(ii) the date of the issue. "(E) TREATMENT OF RELATED PERSONS.—For purposes of this paragraph, all persons who are related (within the meaning of paragraph (6)(C)) to each other shall be treated as one person."

•;.

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text: Author:David Bennett King

title: Author:David Bennett King


text:
Page:United States Statutes at Large Volume 98 Part 1.djvu/970

 98 STAT. 922

PUBLIC LAW 98-369—JULY 18, 1984 PART II—ARBITRAGE LIMITATIONS SEC. 624. ARBITRAGE ON NONPURPOSE OBLIGATIONS.

26 USC 103.

(a) IN GENERAL.—Subsection (c) of section 103 (relating to arbitrage bonds) is amended by redesignating paragraph (6) as paragraph (7) and inserting after paragraph (5) the following new paragraph: "(6) INVESTMENTS IN NONPURPOSE OBLIGATIONS.—

42 USC 14371.

"(A) IN GENERAL.—For purposes of this title, any obligation which is part of an issue of industrial development bonds which does not meet the requirements of subparagraphs (C) and (D) shall be treated as an obligation which is not described in subsection (a). "(B) EXCEPTIONS.—Subparagraph (A) shall not apply to any obligation described in subsection (b)(4)(A) or to any housing program obligation under section 11(b) of the Housing Act of 1937. "(C) LIMITATION ON INVESTMENT IN NONPURPOSE OBLIGATIONS.—

"(i) IN GENERAL.—An issue meets the requirements of this subparagraph only if— "(I) at no time during any bond year, the amount invested in nonpurpose obligations with a yield higher than the yield on the issue exceeds 150 percent of the debt service on the issue for the bond year, and "(II) the aggregate amount invested as provided in subclause (I) is promptly and appropriately reduced as the amount of outstanding obligations of the issue is reduced. "(ii) EXCEPTION FOR TEMPORARY PERIODS.—Clause (i)

shall not apply to— "(I) proceeds of the issue invested for an initial temporary period until such proceeds are needed for the governmental purpose of the issue, and "(II) temporary investment periods related to debt service, "(iii) DEBT SERVICE DEFINED.—For purposes of this subparagraph, the debt service on the issue for any bond year is the scheduled amount of interest and amortization of principal payable for such year with respect to such issue. For purposes of the preceding sentence, there shall not be taken into account amounts scheduled with respect to any bond which has been retired before the beginning of the bond year, "(iv) N O DISPOSITION IN CASE OF LOSS.—This subpara-

graph shall not require the sale or disposition of any investment if such sale or disposition would result in a loss which exceeds the amount which would be paid to the United States (but for such sale or disposition) at the time of such sale or disposition. "(D) REBATE TO UNITED STATES.—An issue shall be treated as meeting the requirements of this subparagraph only if an amount equal to the sum of— "(i) the excess of—

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