text:
Page:United States Statutes at Large Volume 78.djvu/837

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PUBLIC LAW 88-560-SEPT. 2, 1964

795

INCREASE I N AUTHORIZATION FOR ANNUAL CONTRIBUTIONS

SEC. 403. Section 10(e) of the United States Housing Act of 1937 is amended by striking out "$336,000,000" and inserting in lieu thereof "$366,250,000".

75 Stat. ^les^

PAYMENTS IN LIEU OF TAXES BY LOCAL HOUSING AUTHORITIES; LOCAL CONTRIBUTIONS

SEC. 404. Section 10(h) of the United States Housing Act of 1937 ^s Stat. eai. is amended by striking out all that follows the first colon and inserting in lieu thereof the following: '•''Provided, That, with respect to any such project which is not exempt from all real and personal property taxes levied or imposed by the State, city, county, or other political subdivisions, such contract shall provide, in lieu of the requirement for tax exemption and payments in lieu of taxes, that no annual contributions by the Authority shall be made available for such project unless and until the State, city, county, or other political subdivisions in which such project is situated shall contribute, in the form of cash or tax remission, the amount by which the taxes paid with respect to the project exceed 10 per centum of the annual shelter rents charged in such project: Provided further, That, prior to execution of the contract for annual contributions the public housing agency shall, in the case of a tax-exempt project, notify the governing body of the locality of its estimate of the annual amount of such payments in lieu of taxes and of the amount of taxes which would be levied if the property were privately owned, or, in the case where the project is taxed, its estimate of the annual amount of the local cash contribution, and shall thereafter include the actual amounts of such payments or contributions in its annual report. Contracts for annual contributions entered into prior to the effective date of the Housing Act of 1964 may be amended in accordance with the first sentence of this subsection." R E L O C A T I O N OF F A M I L I E S AND INDIVIDUALS DISPLACED FROM PROJECT SITES

S E C 405. (a) Section 15(7)(b) of the United States Housing Act of 1937 is amended by striking out "and" before " ( i i) ", and by inserting before the period at the end thereof the following: "; and (iii) unless the public housing agency has demonstrated to the satisfaction of the Authority that there is a feasible method for the temporary relocation of the individuals and families displaced from the project site, and that there are or are being provided, in the project area or in other areas not generally less desirable in regard to public utilities and public and commercial facilities and at rents or prices within the financial means of such individuals and families, decent, safe, and sanitary dwellings equal in number to the number of and available to such individuals and families and reasonably accessible to their places of employment". (b) The amendments made by subsection (a) shall not be applicable to any project for which an application for preliminary loan has been approved by the local governing body prior to the date of the enactment of this Act.

63 USC 1415. 42 Stat. 422

RELOCATION PAYMENTS

SEC. 406. Section 15 of the United States Housing Act of 1937 is amended by adding at the end thereof the following new paragraph: "(8) The Authority may authorize the cost of relocation payments made by public housing agencies to be included with the development

75 Stat. i64.

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 796

PUBLIC LAW 88-560-SEPT. 2, 1964

[78 STAT.

or acquisition cost of any project for purposes of determining the amount of loans and annual contributions authorized to be made with respect to such project under sections 9 and 10, but such costs shall be separately stated as relocation costs. For purposes of this paragraph, a 'relocation payment' is a payment (i) which is made to an individual, family, business concern, or nonprofit organization displaced on or after January 27, 1964, from a low-rent housing roject site as a result of the acquisition of real property by a public ousing agency, (ii) which is not otherwise authorized under a n j Federal law, and (iii) which is made only on such terms and conditions, and subject to such limitations, as are authorized (as of the time such payment is approved) under section 114(b) or (c) of the Housing Act of 1949 for relocation payments made to individuals, families, business concerns, or nonprofit organizations, as the case may be."

E Ante, pp. 788, 789.

LOW-INCOME HOUSING DEMONSTRATION PROGRAM AUTHORIZATION

I9 f,tr !!h

^^^' ^^'^^ Section 207 of the Housing Act of 1961 is amended by striking out "$5,000,000" and inserting in lieu thereof "$10,000,000". TITLE V—EURAL HOUSING EXTENSION o r RURAL HOUSING PROGRAMS

76 ltat^**672 ^' 42 USC 1481.

75 Stat. 186.

76 Stat. 671. 42 USC 1485.

SEC. 501. (a) The second sentence of section 511 of the Housing ^^^ ^^ ^^^^ ^^ amended by— (1) striking out "June 30, 1965" and inserting in lieu thereof "September 30, 1965"; and (2) striking out "$700,000,000" and inserting in lieu thereof "$850,000,000". ^]^j^ Section 512 of such Act is amended by striking out "June 30, 1965" and inserting in lieu thereof "September 30, 1965". (c) Section 513 of such Act is amended by striking out "June 30, 1965", each place it appears, and inserting in lieu thereof "September 30, 1965". (d) Section 515(b) of such Act is amended by— (1) striking out "$100,000" in clause (1) and inserting in lieu thereof "$300,000"; and (2) striking out "1964" in clause (5) and inserting in lieu thereof "1965". DEFINITION o r DOMESTIC FARM LABOR

I2 ulc uli

SEC. 502. Section 514(f)(3) of the Housing Act of 1949 is amended to read as follows: " (3) the term 'domestic farm labor' means persons who receive a substantial portion (as determined b^ the Secretary) of their income as laborers on farms situated in the United States and either (A) are citizens of the United States or (B) reside in the United States after being legally admitted for permanent residence therein." L O W - R E N T H O U S I N G FOR DOMESTIC FARM LABOR

76"tat.^*67l!^' 42 USC 14711485.

SEC. 503. (a) Title V of the Housing Act of 1949 is amended by adding at the end thereof the following new section:

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


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Page:United States Statutes at Large Volume 78.djvu/839

 78 STAT. ]

PUBLIC LAW 88-560-SEPT. 2, 1964

797

" F I N A N C I A L ASSISTANCE TO PROVIDE L O W - R E N T H O U S I N G FOR DOMESTIC F A R M LABOR

"SEC. 516. (a) Upon the application of any State or political subdivision thereof, or any public or private nonprofit organization, the Secretary is authorized to provide financial assistance for the provision of low-rent housing and related facilities for domestic farm labor, if he finds that— "(1) the housing and related facilities for which financial assistance is requested will fulfill a pressing need in the area in which such housing and facilities will be located, and there is reasonable doubt that the same can be provided without financial assistance under this section; "(2) the applicant will contribute, from its own resources or Stat. 186. from funds borrowed under section 514 or elsewhere, at least 75 USC 1484. 42 one-third of the total development cost; "(3) the types of housing and related facilities to be provided are most practical, giving due consideration to the purposes to be served thereby and the needs of the occupants thereof; and "(4) the construction will be undertaken in an economical manner, and the housing and related facilities will not be of elaborate or extravagant design or material. " (b) The amount of any financial assistance provided under this section for low-rent housing and related facilities shall not exceed two-thirds of the total development cost thereof, as determined by the Secretary, less such amount as the Secretary determines can be practicably obtained from other sources (including a loan under section 514). "(c) No financial assistance for low-rent housing and related facilities shall be made available under this section unless, to any extent and for any periods required by the Secretary, the applicant agrees— "(1) that the rentals charged domestic farm labor shall not exceed such amounts as may be approved by the Secretary, giving due consideration to the income and earning capacity of the tenants, and the necessary costs of operating and maintaining such housing; " (2) that such housing shall be maintained at all times in a safe and sanitary condition in accordance with such standards as may be prescribed by State or local law, or, in the absence of such standards, in accordance with such minimum requirements as the Secretary shall prescribe; and "(3) an absolute priority will be given at all times in granting occupancy of such housing and facilities to domestic farm labor. " (d) The Secretary may make payments pursuant to any contract for financial assistance under this section at such times and in such manner as may be specified in the contract. I n each contract, the Secretary shall include such covenants, conditions, or provisions as he deems necessary to insure that the housing and related facilities, for which financial assistance is made available, be used only in conformity with the provisions of this section. "(e) The Secretary shall prescribe regulations to insure that Federal funds expended under this section are not wasted or dissipated. "(f) All laborers and mechanics employed by contractors or subcontractors on projects assisted by the Secretary which are undertaken by approved applicants under this section shall be paid wages at rates not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor in accordance with the DavisBacon Act, as amended (40 U.S.C. 276a—276a-5). The Secretary shall ^^^^ f ^p^^-^ij^ ^ ^' not extend any financial assistance under this section for any project

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Page:United States Statutes at Large Volume 78.djvu/840

 798

63 Stat. 108.

Ante, p. 796. Ity'icuis 42 USC 1483!

42 USC 1476.

PUBLIC LAW 88-560-SEPT. 2, 1964

[78 STAT.

without first obtaining adequate assurance that these labor standards will be maintained on the construction work; except that compliance with such standards may be waived by the Secretary in cases or classes of cases where laborers or mechanics, not otherwise employed at any time on the project, voluntarily donate their services without compensation for the purpose of lowering the costs of construction and the Secretary determines that any amounts thereby saved are fully credited to the person, corporation, association, organization, or other entity undertaking the project. The Secretary of Labor shall have, with respect to the labor standards specified in this section, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F. E. 3176; 64 Stat. 1267; 5 U.S.C. 133z-15), and section 2 of the ^ c t of Juue 13, 1934, as amended (40 U.S.C. 276c). " (g) As used in this section— "(1) the term 'low-rent housing' means rental housing within the financial reach of families of low income consisting of (A) new structures suitable for dwelling use by domestic farm labor, and (B) existing structures which can be made suitable for dwelling use by domestic farm labor by rehabilitation, alteration, conversion, or improvement; "(2) the terms 'related facilities' and 'domestic farm labor' shall have the meaning assigned to them in section 514(f); and "(3) the term 'development cost' shall have the meaning assigned to it in section 515(d)(4). " (b) Section 513 of such Act is amended by redesignating clauses " (c) " and " (d) " as clauses " (d) " and " (e) " respectively, and by inserting after the semicolon at the end of clause (b) the following: " (c) " not to exceed $10,000,000 for financial assistance pursuant to section 516 for the period ending September 30, 1965;". (^Q^ Section 506(a) of such Act is amended by striking out "sections 514 and 515", each place it appears, and inserting in lieu thereof "sections 514-516". TITLE VI—COMMUNITY F A C I L I T I E S PUBLIC

I2 USCH92.

42 USC 25^04

FACILITY

LOANS

SEC. 601. (a) Section 202(a) of the Housing Amendments of 1955 is amended by striking out in clause (1) of the first sentence "instrumentalities of States" and inserting in lieu thereof "instrumentalities of one or more States", and by striking out "in the same State" and inserting in lieu thereof "of one or more States". (b) Section 202(b)(4) of such Amendments is amended by— (1) striking out "the second sentence of section 5(a) of the Area Redevelopment Act" and inserting in lieu thereof "section ^ °^ ^^^ Area Redevelopment Act"; and (2) inserting " (A) " before "to any municipality" in the first sentence, and by striking out everything following the phrase "most recent decennial census, or" in that sentence and inserting in lieu thereof the following: "; (B) to any public agency or instrumentality serving one or more municipalities, political sub divisions, or unincorporated areas in one or more States, unless each municipality, political subdivision, or unincorporated area to be served by the specific public work or facility for which assistance is sought under this section has a population less than the applicable figure under clause (A) according to such census."

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PUBLIC LAW 88-560-SEPT. 2, 1964

799

ADVANCES FOR PUBLIC WORKS PLANNING

SEC. 602. (a) Section 702(e) of the Housing Act of 1954 is amended ,

, \i-'

^ '

°

f^ ^^f- 64i. 40 USC 452.

to read as follows: "(e) In order to provide moneys for advances in accordance with this section, the Administrator is hereby authorized to establish a revolving, fund which shall comprise (1) all moneys heretofore or hereafter appropriated pursuant to this section, together with all repayments and other receipts heretofore or hereafter received in connection with advances made under this section, and (2) all repayments and other receipts received after June 30, 1964, and all advances (and claims in connection with advances) outstanding as of such date, under title V of the W a r Mobilization and Eeconversion Act of 1944 (58 Stat. 791) and the Act of October 13, 1949 (63 Stat. 841-2). JThere are authorized to be appropriated to such revolving fund, in 40 USC'451addition to amounts authorized to be appropriated for the purposes of 458. this section prior to the date of the enactment of the Housing Act of 1964, such sums, not to exceed $20,000,000, as may be necessary to carry out the purposes of this section." (b) Section 702 of such Act is further amended by adding at the end thereof the following new subsection: " (h)(1) Notwithstanding any other provision of law, if a public agency or Indian tribe undertakes to construct only a portion of a public work planned with an advance under this section, under title V of the W a r Mobilization and Reconversion Act of 1944, or under the Act of October 13, 1949, it shall repay only such proportionate amount of the advance relating to the public work as the Administrator determines to be equitable. "(2) The Administrator is authorized to terminate, upon such terms and conditions as he shall deem equitable, all or a portion of the liability for repayment of any advance made under this section, title V of the W a r Mobilization and Reconversion Act of 1944, or the Act of October 13, 1949. Whenever the Administrator determines that there is no reasonable likelihood that the public work, or a portion of the public work, planned with such advance will be constructed, he may terminate the agreement for the advance. Such determination shall be conclusive and shall be based on standards prescribed by regulations to be issued by the Administrator." (c) Section 702 of such Act is further amended— (1) by striking out "public agencies" wherever that term appears in subsection (a) and inserting in lieu thereof "public agencies and Indian tribes"; (2) by striking out "public agency" in clause (3) of subsection (b) and inserting in lieu thereof "public agency or Indian tribe"; (3) by striking out "to any public agency" and "by the public agency" in subsection (c) and inserting in lieu thereof "to any public agency or Indian tribe" and "by the public agency or Indian tribe", respectively, and by striking out "by such agency" in such subsection and inserting in lieu thereof "by such agency or tribe"; and (4) by striking out "That if" and all that follows down through ^^ATid provided further" in subsection (c). (d) Section 702(f) of such Act is amended by striking out 73 Stat. ese. "$50,000" and inserting in lieu thereof "$100,000". (e) Section 702(a) of such Act is amended by inserting immediately before the first colon the following: ", including, in the case of public works to be constructed in connection with the development of a medical center, a general plan for the development of such center". (f) Section 702(b) of such Act is amended by striking out the last sentence.

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Page:United States Statutes at Large Volume 78.djvu/842

 800

PUBLIC LAW 88-560-SEPT. 2, 1964

[78 STAT.

TITLE VII—FEDERAL NATIONAL MORTGAGE ASSOCIATION POOLING o r MORTGAGES FOR SALE 68 Stat. 613. 12 USC 1717.

SEC. 701. (a) Section 302 of the National Housing Act is amended by adding at the end thereof a new subsection as follows: "(c) Notwithstanding any other provision of this Act or of any other law, the Association is authorized under section 306 to create, accept, execute, and otherwise administer in all respects such trusts, receiverships, conservatorships, liquidating or other agencies, or other fiduciary and representative undertakings and activities as might be appropriate for financing purposes; and in relation thereto the Association may acquire, hold and manage, dispose of, and otherwise deal in any first mortgages in which the United States or any agency or instrumentality thereof may have a financial interest. The Association may join in any such undertakings and activities notwithstanding that it is also serving in a fiduciary or representative capacity; and is 12 USC 1722. authorized, consistent with section 307, to guarantee any participations or other instruments, whether evidence of property rights or debt, issued for such financing purposes. Any participations or other instruments so guaranteed shall to the same extent as securities issued or guaranteed by the United States or its instrumentalities be deemed to be exempt securities within the meaning of laws administered by the Securities and Exchange Commission. The amounts of any mortgages acquired by the Association under section 306, pursuant to this subsection, shall not be included in the total amounts set forth in section 306(c)." 12 USC 1723c. (b)(1) Section 311 of such Act is amended by inserting after "obligations" the following: ", participations, or other instruments". 12 USC 1719, ^ (2) Sections 304(b) and 306(b) of such Act are amended respec1721. tively by striking out "or obligations which are lawful investments" and inserting in lieu thereof "or obligations, participations, or other instruments which are lawful investments". 12 USC 1723b. ^3^ Section 310 of such Act is amended by striking out "or in obligations which are lawful investments" and inserting in lieu thereof or in obligations, participations, or other instruments which are lawful investments". (c) The penultimate sentence of paragraph Seventh of section 5136 12 USC 24. of the Revised Statutes is amended by striking out "or obligations of the Federal National Mortgage Association" and inserting in lieu thereof "or obligations, participations, or other instruments of or issued by the Federal National Mortgage Association". 12 USC U31 (d)(1) Section 11(h) of the Federal Home Loan Bank Act is amended by striking out "in obligations of the Federal National Mortgage Association" and inserting in lieu thereof "in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association". 12 USC 1436. ^2) The last sentence of section 16 of such Act is amended by striking out "in obligations of the Federal National Mortgage Association" and inserting in lieu thereof "in obligations, participations, or other instruments of or issued by the Federal National Mortgage Association". 72 Stat. 1213. (e)(1) Section 1820 of title 38, United States Code, is amended by adding at the end thereof the following new subsection: "(e)(1) The Administrator is authorized from time to time, as he determines advisable, to set aside first mortgage loans, and installment sale contracts, owned and held by him under this chapter as the basis for the sale of participation certificates as herein provided.

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PUBLIC LAW 88-560-SEPT. 2. 1964

For this purpose the Administrator may enter into agreements, including trust agreements, with the Federal National Mortgage Association, and any other Federal agency, under which the Association as fiduciary may sell certificates of participation based on principal and interest collections to be received by the Administrator and the Association or any other such agency on first mortgage loans and installment sale contracts comprising mortgage pools established by them. The agreement may provide for substitution or withdrawal of mortgage loans, or installment sale contracts, or for substitution of cash for mortgages in the pool. The agreement shall provide that the Federal National Mortgage Association shall promptly pay to the Administrator the entire proceeds of any sale of certificates of participation to the extent such certificates are based on mortgages, including installment sale contracts, set aside by the Administrator and he shall periodically pay to the Association, as fiduciary, such funds as are required for payment of interest and principal due on outstanding certificates of participation to the extent of the pro rata amount allocated to the Administrator pursuant to the agreement. The agreement shall also provide that the Administrator shall retain ownership of mortgage loans and installment sale contracts set aside by him pursuant to the agreement unless transfer of ownership to the fiduciary is required in the event of default or probable default in the payment of participation certificates. The Administrator is authorized to purchase outstanding certificates of participation to the extent of the amount of his commitment to the fiduciary on participations outstanding and to pay his proper share of the costs and expenses incurred by the Federal National Mortgage Association as fiduciary pursuant to the agreement. "(2) The Administrator shall proportionately allocate and deposit the entire proceeds received from the sale of participations into the funds established pursuant to sections 1823 and 1824 of this chapter, as determined on an estimated basis, and the amounts so deposited shall be available for the purposes of the funds. The Administrator may nevertheless make such allocations of that part of the proceeds of participation sales representing anticipated interest collections on mortgage loans, including installment sale contracts, on other than an estimated proportionate basis if determined necessary to assure payment of interest on advances theretofore made to the Administrator by the Secretary of the Treasury for direct loan purposes. The Administrator shall set aside and maintain necessary reserves in the funds established pursuant to sections 1823 and 1824 of this chapter to be used for meeting commitments pursuant to this subsection and, as he determines to be necessary, for meeting interest payments on advances by the Secretary of the Treasury for direct loan purposes." (2) Section 1823 of title 38, United States Code, is amended by— (1) inserting before the period at the end of the last sentence of subsection (a) the following: ", and a reasonable reserve for meeting commitments pursuant to subsection 1820(e) of this title"; and (2) inserting before the period at the end of the last sentence of subsection (c) the following: "and for the purposes of meeting commitments under subsection 1820(e) of this title".

801

72 Stat. i2i4. Ante,

p. 800.

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Page:United States Statutes at Large Volume 78.djvu/844

 802

PUBLIC LAW 88-560-SEPT. 2, 1964 FNMA

12 usi:' iV^f? • 12 USC 1720.

REMOVAL OF $ 2 0, 0 0 0

LIMITATION

^^^' '^^^- Section 302(b) of the National Housing Act is amended— (1) by striking out "any mortgage" in clause (3) and inserting jj^ jjgy thereof "any mortgage under section 305"; and (2) by striking out the proviso in clause (3). FNMA

75 Stat. 176. 12 USC 1719.

MORTGAGE A M O U N T

[78 STAT.

NINETY

PER CENTUM

LOANS

SEC. 703. Section 304(a)(2) of the National Housing Act is amended by striking out "80 per centum" and inserting in lieu thereof "90 per centum." FNMA—^PURCHASE OF PARTICIPATIONS

70 Stat. 1096.

SEC. 704. Section 304(d) of the National Housing Act is hereby repealed. TITLE VIII—TRAINING AND F E L L O W S H I P PROGRAMS PART

1—FEDERAL-STATE TRAINING

PROGRAMS

FINDINGS AND PURPOSE

SEC. 801. (a) The Congress finds that the rapid expansion of the Nation's urban areas and urban population has caused severe problems in urban and suburban development and created a national need to (1) provide special training in skills needed for economic and efficient community development and (2) support research in new or improved methods of dealing with community development problems. (b) I t is the purpose of this part to assist and encourage the States, in cooperation with public or private universities and colleges and urban centers, to (1) organize, initiate, develop, and expand programs which will provide special training in skills needed for economic and efficient community development to those technical and professional people who are, or are training to be, employed by a governmental or public body which has responsibilities for community development; and (2) support State and local research that is needed in connection with housing programs and needs, public improvement programing, code problems, efficient land use, urban transportation, and similar community development problems. MATCHING

GRANTS TO STATES

SEC. 802. (a) Subject to the provisions of this part and in accordance with regulations prescribed by him, the Administrator may make matching grants to States to assist in— (1) organizing, initiating, developing, or expanding programs to provide special training in skills needed for economic and efficient community development to those technical and professional people who are, or are training to be, employed by a governmental or public body which has responsibilities for community development; and (2) supporting State and local research that is needed in connection with housing programs and needs, public improvement programing, code problems, efficient land use, urban transportation, and similar community development problems, and collecting, collating, and publishing statistics and information relating to such research.

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Page:United States Statutes at Large Volume 78.djvu/845

 78

STAT.]

PUBLIC LAW 88-560-SEPT. 2, 1964

803

(b) No grants may be made to a State under this part unless the Administrator has approved a plan for the State which— (1) sets forth the proposed use of the funds and the objectives to be accomplished; (2) explains the method by which the required amounts from non-Federal sources will be obtained; (3) provides such fiscal control and fund accounting procedures as may be reasonably necessary to assure proper disbursement of, and accounting for, Federal funds paid to the State under this part; (4) designates an officer or agency of the State government who has responsibility and authority for the administration of a statewide research and training program as the officer or agency with responsibility and authority for the execution of the State program under this part; and (5) provides that such officer or agency will make such reports to the Administrator, in such form, and containing such information, as may be reasonably necessary to enable the Administrator to perform his duties under this part. (c) No grant may be made under this part for any use unless an amount at least equal to such grant is made available from non-Federal sources for the same purpose and for concurrent use. (d) There is authorized to be appropriated for grants under this part, without fiscal year limitation, not to exceed $10,000,000. STATE

LIMIT

SEC. 803. Not more than 10 per centum of the total amount author^ ized to be appropriated by section 802(d) may be used for making grants to any one State. TECHNICAL

ASSISTANCE, STUDIES, A N D P U B L I C A T I O N

OF INFORMATION

SEC. 804. I n order to carry out the purpose of this part, the Administrator is authorized to provide technical assistance to State and local governmental or public bodies and to undertake such studies and publish and distribute such information, either directly or by contract, as he shall determine to be desirable. Nothing contained in this part shall limit any authority of the Administrator under any other provision of law. MISCELLANEOUS

SEC. 805. (a) As used in this part, the term "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands; and the term "Administrator" means the Housing and Home Finance Administrator. (b) There are authorized to be appropriated such sums as may be necessary for administrative and other expenses in carrying out this part. PART 2—FELLOWSHIPS FOR CITY PLANNING AND URBAN STUDIES

SEC. 810. (a) There is hereby authorized to be appropriated not to exceed $500,000 annually, for a three-year period commencing on July 1, 1964, to be used by the Housing and Home Finance Administrator for the purpose of providing fellowships for the graduate training of professional city planning and urban and housing technicians and specialists as herein provided. Persons shall be selected for such fellowships solely on the oasis of ability and upon the recommendation of the Urban Studies Fellowship Advisory Board estab-

»*State.

Appropriation.

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Page:United States Statutes at Large Volume 78.djvu/846

 804

Fe"[orsh%"Advisory Board, Establishment. n<..„u,i.u_._.

68 Stat. 645. 12 USC 170 Ih.

PUBLIC LAW 88-560-SEPT. 2, 1964

[78 STAT.

lished pursuant to subsection (b). Fellowships shall be solely for training in public and private nonprofit institutions of higher education having programs of graduate study in the field of city planning or in related fields (including architecture, civil engineering, economics, municipal finance, public administration, and sociology), which programs are oriented to training for careers in city and regional planning, housing, urban renewal, and community development. . (b) There is hereby established the Urban Studies Fellowship Advisory Board (hereinafter referred to as the "Board"), which shall consist of nine members to be appointed by the Housing and Home Finance Administrator as follows: Three from public institutions of higher learning, and three from private nonprofit institutions of higher education, who are the heads of departments which provide academic courses appropriately related to the fields referred to in subsection (a), and three from national organizations which are directly concerned with problems relating to urban, regional, and community development. The Board shall meet upon the request of the Administrator and shall make recommendations to him with respect to persons to be selected for fellowships under this section. Members of the Board shall be entitled to receive transportation expenses and a per diem in lieu of subsistence as authorized for members of advisory committees created pursuant to section 601 of the Housing Act of 1949. TITLE IX — S A VI N G S AND LOAN ASSOCIATIONS

76 Stat. 778. 12 USC 1464.

12 USC 1726.

?2 USC f464

42 USC f ^ ^ 466

SEC. 901. (a) The first sentence of section 5(c) of the Home Owners' Loan Act of 1933 is amended by striking out "fifty miles" and inserting in lieu thereof "one hundred miles". (b) The third sentence of section 403(b) of the National Housing ^Q^^ jg amended by striking out all that precedes the first semicolon and inserting in lieu thereof the following: "Each applicant for such insurance shall also file with its application an agreement that during the period that the insurance is in force it will not make any loans beyond one hundred miles from its principal office, except (1) loans in the area beyond such one-hundred-mile limit in which it was operating prior to June 27, 1934, and (2) loans which are made pursuant to regulations of the Corporation: Provided, That such agreement shall further provide that any loan made beyond fifty miles from the applicant's principal office (and outside the territory in which it was operating on such date) shall also be subject to such regulations". SEC. 902. The first proviso in section 5(c) of the Home Owners' Loan Act of 1933 is amended— (1) by striking out "$35,000" and inserting in lieu thereof "$40,000"; and (2) by striking out ", except that the aggregate sums invested pursuant to the two exceptions in this proviso shall not exceed 30 per centum of the assets of such association". SEC. 903. The next to last paragraph of section 5(c) of the Home Owners' Loan Act of 1933 is amended to read as follows: "Without regard to any other provision of this subsection, any such association is authorized to invest not more than 5 per centum of its assets in, or in interests in, real property located within urban renewal areas as defined in subsection (a) of section 110 of the Hous^^^ -^^^ ^^ -^^^^ ^^^ obligations secured by first liens on real property so located, but no investment shall be made by an association under this sentence in real property or any interest therein if the aggregate investment of the association under this sentence in real property and interests therein, determined as prescribed by the Board, would thereupon exceed 2 per centum of the assets of the association."

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 78 STAT. ]

PUBLIC LAW 88-560-SEPT. 2, 1964

SEC. 904. Section 5(c) of the Home Owners" Loan Act of 1983 is amended by adding at the end thereof a new paragraph as follows: "'For the purpose of this section the terms 'real property' and 'real estate' shall include a leasehold or subleasehold estate in real property under a lease or sublease the term of which does not expire, or which is renewable automatically or at the option of the holder (or at the option of the association) so as not to expire, for at least hfteen years beyond the maturity of the debt." SEC. 905. Section 5(c) of the Home Owners' Loan Act of 1933 is further amended by adding at the end thereof (after the paragraph added by section 804 of this Act) the following new paragraph: "Any such association is authorized to invest in the capital stock, obligations, or other securities of any corporation organized under the laws of the State, District, Commonwealth, territory, or possession in which the home office of the association is located, if the entire capital stock of such corporation is available for purchase only by savings and loan associations of that State, District, Commonwealth, territory, or Ix>ssession and by Federal savings and loan associations having their home offices therein, but no association may make any investment under this sentence if its aggregate outstanding investment under this sentence, determined as prescribed by the Board, would thereupon exceed 1 per centum of its assets." SEC. 906. Section 10(b) of the Federal Home Loan Bank Act is J J ^ ^ amended— ^ ^ ... (1) by striking out "twenty-five" in clause (1) and inserting in lieu thereof "thirty"; and (2) by striking out "$35,000" in clause (2) and inserting in lieu thereof ^'$40,000". SEC. 907. The second proviso in the first paragraph of section 5(c) of the Home Owners' Loan Act of 1933 is amended to read as follows: ": And provided further, That any portion of the assets of such associations may be invested in obligations of, or fully guaranteed as to principal and interest by, the United States, or in the stock or bonds of a Federal Home Loan Bank, or in obligations, participations, or other instruments of or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association or any other agency of the United States; or in general obligations of any State or of any political subdivision thereof; and as used in this proviso the term 'State' shall include the District of Columbia, the Commonwealth of Puerto Rico, and the possessions of the United States". SEC. 908. The first sentence of the second paragraph of section 5(c) of the Home Owners' Loan Act of 1933 is amended to read as follows: "Without regard to any other provision of this subsection except the urea requirement, any such association is authorized to invest a sum not in excess of 20 per centum of the assets of such association in loans insured under title I of the National Housing Act, in home improvement loans insured under title II of the National Housing Act, in unsecured loans insured or guaranteed under the provisions of the Servicemen's Readjustment Act of 1944, as amended, or chapter 37 of title 38 of the United States Code, and in other loans for property alteration, repair, or improvement: Prcnrided, That no such loan, unless so insured or guaranteed, shall be made in excess of $5,000." SEC. 909. Title IV of the National Housing Act is amended by adding at the end thereof the following new section:

805 12 USC 1464.

ei Stat. 714; 76 Stat. 779. 12 USC 1430.

^^ use i464.

j/gg^^*^ ^^°^" 12 USC 1707i7i5y. ss Stat. 284, ^2 stat, 1203. ^730"^^ ^^^^

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Page:United States Statutes at Large Volume 78.djvu/848

 806

PUBLIC LAW 88-560-SEPT. 2, 1964 " INVESTMENT OF CERTAIN FUNDS I N ACCOUNTS OF INSURED

12 USC 1464.

[78 STAT. INSTITUTIONS

"SEC. 409. The savings accounts and share accounts held by institutions insured by the Corporation, to the extent they are insured by the (Corporation, shall be lawful investments and may be accepted as security for all public funds of the United States, fiduciary and trust funds under the authority or control of the United States or any officer or officers thereof, and for the funds of all corporations organized under the laws of the United States (subject to any regulatory authority otherwise applicable), regardless of any limitation of law upon the investment of any such funds or upon the acceptance of security for the investment or deposit of any of such funds.'' SEC. 910. Section 5(c) of the Home Owners' Loan Act of 1933 is amended by inserting after the second paragraph the following new paragraph: "Without regard to any other provision of this subsection, any such association is authorized to invest in loans, obligations, and advances of credit (all of which are hereinafter referred to as 'loans") made for the payment of expenses of college or university education, but no association shall make any investment in loans under this paragraph if the prinicpal amount of its investment in such loans, exclusive of any investment which is or which at the time of its making was otherwise authorized, would thereupon exceed 5 per centum of its assets." TITLE X—MISCELLANEOUS OPEN-SPACE PROGRAM—GRANT AUTHORIZATION

11 usi:' /s^olja

^^^- ^^^1- Section 702(b) of the Housing Act of 1961 is amended— (1) by striking out "$50,000,000" and inserting in lieu thereof "$75,000,000"; and (2) by adding at the end thereof the following: "All funds so appropriated shall remain available until expended." COLLEGE HOUSING

64 Stat. 80; ^^12 USC ^17*49c.

SEC. 1002. The second paragraph of section 404(b) of the Housing j^ct of 1950 is amended by striking out the period and inserting in lieu thereof the following: ": Provided, That where the law of any State in effect on the date of enactment of the Housing Act of 1964 prevents the institution or institutions, for whose students or students and faculty the housing is to be provided, from cosigning the note, the Administrator shall require the corporation and the proposed project to be approved by such institution (or by any one or more of such institutions) in lieu of such cosigning." ACQUISITION OF CERTAIN HOUSING BY SECRETARY OF DEFENSE

73 Stat. 683.

42 USC 1594a.

56 Stat. 30 3. 12 USC 1743.

SEC. 1003. The first sentence of section 404(a) of the Housing Amendments of 1955 is amended by inserting before the period at the end thereof the following: ", or (3) any housing situated on or adjacent to a military installation which was (A) completed prior to July 1, 1952, (B) considered by the Department of Defense, prior to construction, as being necessary to meet an existing military family housing need and considered as military housing by the Federal Housing Commissioner, and (C) financed with mortgages insured under section 608 of the National Housing Act, including adjacent property constructed primarily to provide commercial facilities for the occupants of such housing".

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Page:United States Statutes at Large Volume 78.djvu/849

 PUBLIC LAW 88-560-SEPT. 2, 1964

78 STAT. ]

807

REAL ESTATE LOANS BY NATIONAL BANKS

SEC. 1004. Clause (3) of the third sentence of the first paragraph of 69 Stat. 633; section 24 of the Federal Reserve Act is amended to read as follows: 73 Stat. 489. "(3) any such loan may be made in an amount not to exceed 80 per 12 USC 371. centum of the appraised value of the real estate offered as security and for a term not longer than twenty-five years if the loan is secured by an amortized mortgage, deed of trust, or other such instrument under the terms of which the installment payments are sufficient to amortize the entire principal of the loan withm the period ending on the date of its maturity, and". FOREST HILLS PROJECT IN PADUCAH, KENTUCKY

SEC. 1005. The Federal Housing Commissioner is authorized and directed to sell to the Paducah-McCracken County Development Council, Incorporated, of Paducah, Kentucky, for use as a public facility (including such use by the Paducah Junior College as may be deemed appropriate by such Council), and for a total price of $1,000,000, all right, title, and interest of the United States in and to the housing project in Paducah known as Forest Hills (a project constructed under title VIII of the National Housing Act as in effect ^^ ^^^ 1^483prior to August 11, 1955, and subsequently acquired by the Federal i748h. Housing Administration). P A Y M E N T I N L I E U OF T A X E S BY HAWAII HOUSING AUTHORITY

SEC. 1006. Notwithstanding the provisions of any other law or any contract or rule of law, the Public Housing Commissioner shall approve a payment in lieu of taxes to be made for the fiscal year ended June 30, 1959, in the amount of $24,167.78, by the Hawaii Housing Authority to the city and county of Honolulu. TRANSFER OF LAND FOR URBAN RENEWAL PURPOSES BY PHILADELPHIA HOUSING AUTHORITY

SEC. 1007. (a) Notwithstanding the provisions of title I of the 42 USC Housing Act of 1949 and the United States Housing Act of 1937, the 1464; Ante, 1441p. 788. Housing and Home Finance Administrator and the Public Housing 50 Stat. 888. Commissioner are authorized and directed to consent to the transfer 42 USC 1430. by the Philadelphia Housing Authority to the Philadelphia Redevelopment Authority of all property acquired by the Housing Authority for low-rent housing project numbered Pennsylvania 2-51, on condition that (1) an amount which, together with any funds of the Housing Authority available for the purpose, is sufficient to pay and discharge all obligations incurred by the Housing Authority in connection with such low-rent housing project and owing at the time of transfer, will be paid by the Redevelopment Authority to the Public Housing Administration to be applied in satisfaction of the Housing Authority's obligations which it cannot meet with its own funds available for the purpose, and (2) the total amount so paid by the Redevelopment Authority will be included in the gross project cost of its Whitman urban renewal project, Pennsylvania R-35. (b) The Housing and Home Finance Administrator and the Public Housing Commissioner are authorized to modify any contracts heretofore entered into and to take any other appropriate action necessary to carry out the provisions of subsection (a). 31-667 0-65—54

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 808

PUBLIC LAW 88-561-SEPT. 2, 1964

[78 STAT.

ELIGIBILITY OF CERTAIN LOCAL GKANTS-IN-AID

42 USC 14411464; Ante, p. 788. 75 Stat. 169. 42 USC 1463.

SEC. 1008. (a) Notwithstanding the date of the commencement of construction of the Fox Point hurricane dam in Providence, Rhode Island, local expenditures made in connection with such dam shall, to the extent otherwise eligible, be counted as a local grant-in-aid to the railroad relocation urban renewal project (Rhode Island R-S) in accordance with the provisions of title I of the Housing Act of 1949. (b) Notwithstanding the provisions of section 112(b) of the Housing Act of 1949, expenditures made by the Methodist Hospital of Central Illinois, and Saint Francis Hospital, Peoria, Illinois, for the purchase of two parcels of land on or about June 25 and July 28, 1956, for a price of not more than $82,980, shall if otherwise eligible be counted as local grants-in-aid to the Peoria "Medical Center" urban renewal project (Illinois R-61) in accordance with the remaining provisions of title I of that Act. Approved September 2, 1964.

Public Law 88-561 September 2, 1964 [H.R. 130]

Reclamation projects. Rights-of-way.

AN ACT To provide for the payment of compensation, including severance damages, for rights-of-way acquired by the United States in connection with reclamation projects the construction of which commenced after January 1, 1961. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That notwithstanding the existence of any reservation of right-of-way for canals under the Act of August 30, 1890 (26 Stat. 371, 391; 43 U.S.C. 945), the Secretary of the Interior shall pay just compensation, including severance damages, to the owners of private land utilized for ditches or canals in connection with any reclamation project, or any unit or any division of a reclamation project, provided the construction of said ditches or canals commenced after January 1, 1961, and such compensation shall be paid notwithstanding the execution of any agreements or any judgments entered in any condemnation proceeding, prior to the effective date of this Act. Approved September 2, 1964.

Public Law 88-562 September 2, 1964 [H.R. 11338]

Massachusetts Port Authority. Land transfer, repeal of conditions.

AN ACT

To remove certain conditions subject to which certain real property in South Boston, Massachusetts, was authorized to be conveyed to the Massachusetts Port Authority. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 2 of the Act entitled "Aii Act to authorize the Secretary of the Navy to transfer to the Massachusetts Port Authority, an instrumentality of the Commonwealth of Massachusetts, certain lands and improvements thereon comprising a portion of the so-called E Street Annex, South Boston Annex, Boston Naval Shipyard, in South Boston, Massachusetts, in exchange for certain other lands", approved July 7, 1960 (Public Law 86-602; 74 Stat. 355), is repealed. Approved September 2, 1964.

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Page:United States Statutes at Large Volume 78.djvu/851

 78 STAT. ]

809

PUBLIC LAW 88-563-SEPT. 2, 1964

P u b l i c Law 88-563 AN ACT September 2, 1964 [H. R. 8000] To amend the Internal Revenue Code of 1954 to impose a tax on acquisitions of certain foreign securities in order to equalize costs of longer-term financing in the United States and in markets abroad, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, Interest EqualSECTION 1. SHORT TITLE, ETC. ization Tax Act. (a) S H O R T T I T I J S. — T h i s Act may be cited as the " I n t e r e s t E q u a l i zation T a x Act ". (b) AMENDMENT OF 1954 C O D E. — E x c e p t as other w i s e expressly provided, w h e n e v e r i n t h i s Act a n amendment is expressed in term s of a n amendment to a section o r other provision, the reference shall be considered to be m a d e to a section or other p r o v i s i o n of the 68A Stat. 3. I n t e r n a l Revenue Code of 1954. SEC. 2. INTEREST EQUALIZATION TAX. (a) IMPOSITION OF T A X. — S u b title D ( r e l a t i n g to miscellaneous excise tax e s) is amended by a d d i n g a t the e n d thereof the following new chapter:

26 USC 1 et seq.

'CHAPTER 41—INTEREST EQUALIZATION TAX "SUBCHAPTER A. Acquisitions of foreign stock and debt obligations. "SUBCHAPTER B. Acquisitions by commercial banks.

"Subchapter A—Acquisitions of Foreign Stock and Debt Obligations "Sec. "Sec. "Sec. "Sec. "Sec. "Sec. "Sec.

4911. Imposition of tax. 4912. Acquisitions. 4913. Limitation on tax on certain acquisitions. 4914. Exclusion for certain acquisitions. 4915. Exclusion for direct investments. 4916. Exclusion for investments in less developed countries. 4917. Exclusion for original or new issues where required for international monetary stability. "Sec. 4918. Exemption for prior American ownership. "Sec. 4919. Sales by underwriters and dealers to foreign persons. "Sec, 4920. Definitions and special rules. "SEC. 4911. IMPOSITION OF TAX. " (a) IN GENERAL. — The r e is hereby imposed, on each acquisition by a United States p e r s o n ( a s defined i n section 4 9 2 0 (a)(4)) of stock of a foreign issuer, o r of a debt obligation of a foreign obligor (if such obligation has a period r e m a i n i n g to m a t u r i t y of 3 year s o r more), a tax determined under subsection ( b j. "(b)

A M O U N T OF T A X. —

" (1) S TO C K. — The tax imposed by subsection (a) on the acquisition of stock shall b e equal to 15 p e r c e n t of the a c t u a l v a l u e of the stock. "(2)

D E B TO B L I G A T I O N S. — The tax i m p o s e d by subsection

(a)

on the acquisition of a debt obligation shall be equal to a percenta g e of the a c t u a l v a l u e of the debt o b l i g a t i o n m e a s u r e d by the

Post, p. 837.

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 810

PUBLIC LAW 88-563-SEPT. 2, 1964

[78 STAT.

period remaining to its maturity and determined in accordance with the following table: "If the period remaining to maturity i s: "At least 3 years, but less than sy^ years At least Sy^ years, but less than 4% years At least 4ys years, but less than sy^ years At least 5^2 years, but less than Qy^ years At least Qy2 j'ears, but less than 7% years At least 7^2 years, but less than Sy^ years At least Sy^ years, but less than 9^^ years At least 91/^ years, but less than 10^4 years At least lOy^ years, but less than 11% years At least 11% years, but less than 13% years At least 13% years, but less than 16% years At least 16% years, but less than 18% years At least 18% years, but less than 21% years At lea?t 21% years, but less than 23% years At least 23% years, but less than 26% years At least 26% years, but less than 28% years 28% years or more " (c)

-.

The tax, as a percentage of actual value, i s: 2.75 percent 3.55 percent 4.35 percent 5.10 percent 5.80 percent 6.50 percent 7.10 percent 7.70 percent 8.30 percent 9.10 percent 10.30 percent 11.35 percent 12.25 percent 13.05 percent 13.75 percent 14.35 percent 15.00 percent,

P E R S O N S L I A B L E FOR T A X. —

"(1) IN GENERAL.—The tax imposed by subsection (a) shall be paid by the person acquiring the stock or debt obligation involved. " (2) CROSS REFERENCE.—

"For imposition of penalty on maker of false certificate in lieu of or in addition to tax on acquisition in certain cases, see section 66S1.

Post, p. 835.

76 Stat. 812 26 USC 401.

" (d) TERMINATION OF TAX.—The tax imposed by subsection (a) shall not apply to any acquisition made after December 31, 1965. "(a) IN GENERAL.—For purposes of this chapter, the term 'acquisition' means any purchase, transfer, distribution, exchange, or other transaction by virtue of which ownership is obtained either directly or through a nominee, custodian, or agent. A United States person acting as a fiscal agent in connection with the redemption or purchase for retirement of stock or debt obligations (whether or not acting under a trust arrangement) shall not be considered to obtain ownership of such stock or debt obligations. The exercise of a right to convert a debt obligation (as defined in section 4920(a)(1)) into stock shall be deemed an acquisition of stock from the foreign issuer by the person exercising such ri|»ht. Any extension or renewal of ail existing debt obligation requiring affirmative action of the obligee shall be considered the acquisition of a new debt obligation, iit (b) SPECIAL RULES.—For purposes of this chapter— "(1) CERTAIN TRANSFERS TO FOREIGN TRUSTS.—Any transfer (other than in a sale or exchange for full and adequate consid• eration) of money or other property to a foreign trust shall, if such trust acquires stock or debt obligations (^of one or more foreign issuers or obligors) the direct acquisition of which by the transferor would be subject to the tax imposed by section 4911, be deemed an acquisition by the transferor (as of the time of such transfer) of stock of a foreign issuer in an amount equal to the actual value of the money or property transferred or, if less, the actual value of the stock or debt obligations so acquired by such trust. Contributions made by an employer to a foreign pension or profit-sharing trust established by such employer tor the exclusive benefit of employees (who are not owner-employees as defined in section 401(c)(3)) who perform personal services for such employer on a full-time basis in a foreign country, and contributions to a foreign pension or profit-sharing
 * SEC. 4912. ACQUISITIONS.

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Page:The Eurypterida of New York Volume 1.pdf/182

 The metastoma is very similar to that of, but subject to some variation and frequently somewhat contracted in the posterior portion [ pl. 11, fig. 5], giving it a more slender appearance.

The female genital appendage was very correctly figured by Hall [''loc. cit.'' pl. 81B, fig. 4]. Several well preserved specimens before us show the great size attained by this organ in mature individuals. It reaches with the long paired, hornlike terminal appendages, to the posterior edge of the third sternite. The interior tubular appendages of this organ are finely seen in the original of plate 12, figure 2, where the integument has broken away. They have the precise form and relative proportions of that of. The appendage of the second sternite has not been seen unobscured by the overlying appendage of the operculum. It is, however, well shown in the interior view, reproduced in plate 11, figure 4 [Hall's type of pl. 81, fig. 6]. It is extremely slender and pointed and reaches nearly as far back as that of the operculum. The male appendage does not differ from that of the preceding species.

Ornamentation. As far as our observation goes, the ornamentation is quite like that of. This is especially notable in regard to the series of scales on the dorsal side, already correctly figured by Hall [pl. 81B, fig. 1]. The smaller scales which are rarely seen, are crescent-shaped to subtnangular and nowhere densely crowded. Those of the longitudinal series were larger and circular in the anterior portion, becoming elongate in the posterior part of each row.

Ontogeny. But little is known of the ontogeny of this species as but very few young individuals have been obtained and these are too far developed to afford much information. Hall's figure, [plate 81, figure 1],


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 78 STAT. ]

PUBLIC LAW 88-563-SEPT. 2, 1964

trust established by an employer, made by an employee who performs personal services for such employer on a full-time basis m a foreign country (and is not an owner-employee as defined in section 401(c)(3)), shall not be considered under the preceding sentence as transfers which may be deemed acquisitions of stock of a foreign issuer. "(2)

811

76 Stat. 812. ^^ ^^^ ^°^'

CERTAIN TRANSFERS.—

"(A)

TRANSFERS TO FOREIGN CORPORATIONS AND PARTNER-

SHIPS.—Any transfer of money or other property to a foreign corporation or a foreign partnership— " (i) as a contribution to the capital of such corporation or partnership, or "(ii) in exchange for one or more debt obligations of such corporation or partnership, if it is a foreign corporation or partnership which is formed or availed of by the transferor for the principal purpose of acquiring (in the manner described in section 4915(c) (1^) an ^ost, p. 826. interest in stock or debt obligations the direct acquisition of which by the transferor would be subject to the tax imposed by section 4911, shall be deemed an acquisition by the transferor of stock of a foreign corporation or partnership in an amount equal to the actual value of the money or property transferred. " (B) TRANSFERS TO FOREIGN BRANCHES.—If a domestic corporation or partnership transfers money or other property to, or applies money or other property for the benefit of, a branch office of such corporation or partnership with respect to which there is in effect an election under section 4920(a) (5)(E), or if funds are borrowed by such branch office from a bank (as defined in section 581), other than from a branch 26 USC ssi. of such a bank located outside the United States lending such funds in the ordinary course of its business, such domestic corporation or partnership shall be deemed to have acquired stock of a foreign corporation or partnership in an amount equal to the actual value of the money or property transferred or applied, or the funds borrowed. " (3) ACQUISITIONS FROM DOMESTICORPORATION OR PARTNERSHIP FORMED OR AVAILED OF TO OBTAIN FUNDS FOR FOREIGN ISSUER OR

OBLIGOR.—The acquisition of stock or a debt obligation of a domestic corporation (other than a domestic corporation described in section 4 9 2 0 (a)(3)(B)), or a domestic partnership, formed or availed of for the principal purpose of obtaining funds (directly or indirectly) for a foreign issuer or obligor, shall be deemed an acquisition (from such foreign issuer or obligor) of stock or a debt obligation of such foreign issuer or obligor. "(4) REORGANIZATION EXCHANGES.—Any acquisition of stock or debt obligations of a foreign issuer or obligor in an exchange to which section 354,355, or 356 applies (or would, but for section 367, apply) shall be deemed an acquisition from the foreign issuer 26 USC 354or obligor in exchange for its stock or for its debt obligations. ^^^' ^^^' For purposes of this paragraph, in determining whether section 354, 355, or 356 applies, or would apply, to any transaction— " (A) such transaction shall, if it took place before the date of the enactment of this chapter, be treated as taking place on such date, and " (B) section 368(a)(1)(B) shall be treated as permitting 26 USC 368. the receipt by a United States person of money or other property in addition to voting stock.

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Page:United States Statutes at Large Volume 78.djvu/854

 812

PUBLIC LAW 88-563-SEPT. 2, 1964

[78 STAT.

-SEC. 4913. LIMITATION ON TAX ON CERTAIN ACQUISITIONS. "(a) CERTAIN SURRENDERS, EXTENSIONS, RENEWALS, AND EXERCISES.— "(1) GENERAL, RULE.—If stock or a debt obligation of a foreign

issuer or obligor is acquired by a United States person as the result of— " (A) the surrender to the foreign obligor, for cancellation, of a debt obligation of such obligor; " (B) the extension or renewal of an existing debt obligation requiring affirmative action of the obligee; or " (C) the exercise of an option or similar right to acquire such stock or debt obligation (or of a right to convert a debt obligation into stock), then the tax imposed on such acquisition shall not exceed the amount determined under paragraph (2) or (3). "(2) GENERAL LIMITATION.—Except in cases to which paragraph (3) applies, the tax imposed upon an acquisition described in paragraph (1) shall be limited to— " (A) the amount of tax imposed by section 4911, less " (B) the amount of tax which would have been imposed under section 4911 if the debt obligation which was surrendered, extended, or renewed, or the option or right which was exercised, had been acquired in a transaction subject to such tax immediately before such surrender, extension, renewal, o r exercise. For purposes of this paragraph, a defaulted debt obligation of the government of a foreign country or a political subdivision thereof (or an agency or instrumentality of such a government) which has been in default as to principal for at least 10 years and which is surrendered in exchange for another debt obligation of that government (or agency or instrumentality) shall be deemed to have an actual value and period remaining to maturity equal to that of the debt obligation acquired. "(3)

SPECIAL LIMITATIONS.— "(A)

Post, p. 835.

CONVERSIONS OF DEBT OBLIGATIONS INTO STOCK.—The

tax imposed upon an acquisition of stock pursuant to the exercise of a right to convert a debt obligation (as defined in section 4920(a)(1)) into stock shall be limited to— " (i) the amount of tax which would have been imposed by section 4911 if the debt obligation had been treated as stock at the time of its acquisition by the person exercising the right (or by a decedent from whom such person acquired the right by bequest or inheritance or by reason of such decedent's death), less "(ii) the amount of tax paid by the person exercising the right (or by such decedent) as a result of the acquisition of the convertible debt obligation or, if such acquisition was not subject to the tax imposed by section 4911 the amount of tax which would have been imposed as a result of such acquisition if such acquisition had been subject to such tax. "(B)

EXERCISE OF CERTAIN SHAREHOLDERS' RIGHTS.—The

tax imposed upon an acquisition of stock or a debt obligation of a foreign corporation by a United States person, where— " (i) the stock or debt obligation is acquired pursuant to the exercise of an option or similar right to acquire such stock or debt obligation which was acquired by a

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Page:United States Statutes at Large Volume 78.djvu/855

 78 STAT. ]

PUBLIC LAW 88.S6.^_SEPT. 2, 1964

813

shareholder of such corporation in a distribution with respect to its stock, and "(ii) such option or right is exercised within 90 days from the date of its distribution by such corporation, shall be limited to the amount of tax which would have been imposed by section 4911 if the price paid under such option or right were the actual value of the stock or debt obligation acquired. " (C) CERTAIN EMPLOYEE STOCK OFFIONS.—The tax imposed upon an acquisition of stock of a foreign issuer by a United States person pursuant to the exercise of an option or similar right described in section 4914(a)(8) shall be limited to the amount of tax which would have been imposed under section 4911 if the price paid under such option or right were the actual value of the stock acquired. "(b)

CERTAIN TRANSFERS W H I C H ARE DEEMED ACQUISITIONS.—The

tax imposed upon an acquisition which is deemed to have been made by reason of a transfer of money or other property to a foreign tmst, or a foreign corporation or partnership, as described in section 4912 (b)(1) or (2)(A), shall be limited to— "(1) the amount of tax imposed by section 4911, less "(2) the amount of tax paid by the transferor as the result of the transfer being otherwise taxable as an acquisition under this chapter. "(c)

ACQUISITIONS BY CERTAIN DOMESTICORPORATIONS AND PART-

NERSHIPS.—If stock or a debt obligation of a for e i ^ issuer or obligor is acquired by a domestic corporation or a domestic partnership with funds obtained as the result of an acquisition by a United States person of stock or a debt obligation of such corporation or partnership which under section 4912(b)(3) is deemed an acquisition by such person of stock or a debt obligation of a foreign issuer or obligor, the tax imposed upon the acquisition by the domestic corporation or the domestic partnership shall be limited to— "(1) the amount of tax imposed by section 4911, less " (2) the amount of tax paid by the United States person from whom the funds were obtained on the acquisition by such person which under section 4912(b)(3) is deemed an acquisition of stock or a debt obligation of a foreign issuer or obligor. '•SEC. 4914. EXCLUSION FOR CERTAIN ACQUISITIONS.

" (a) TRANSACTIONS NOT CONSIDERED ACQUISITIONS.—The term 'acquisition' shall not include— " (1) any transfer between a person and his nominee, custodian, or agent; "(2) any transfer described in section 4343(a) (relating to certain transfers by operation of law from decedents, minors, incompetents, financial institutions, bankrupts, successors, foreign governments and aliens, trustees, and survivors); " (3) any transfer by legacy, bequest, or inheritance to a United States person, or by gift to a United States person who is an individual; " (4) any distribution by a corporation of its stock or debt obligations to a shareholder with respect to or in exchange for its stock; "(5) any distribution to a shareholder by a corporation of stock or debt obligations owned by such corporation on July 18, 1963, in complete or partial liquidation of such corporation, to the extent such shareholder acquired his stock ownership in such corporation in a transaction other than in an acquisition excluded

Je use 43^47'

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 814

26 USC 361,

367

Post, p. 836.

PUBLIC LAW 88-563-SEPT. 2, 1964

[78 STAT.

from tax under subsection (b) of this section, or under section 4915, 4916, or 4917; "(6) any exchange to which section S61 applies (or would, but for section 367, apply), where the transferor corporation was a domestic corporation and was engaged in the active conduct of a trade or business, other than as a dealer in securities, immediately before the date on which the assets involved are transferred to the acquiring corporation; "(7) any exercise of a right to convert indebtedness, pursuant to its terms, into stock, if such indebtedness is treated as stock pursuant to section 4920(a)(2)(D); or "(8) the grant of a stock option or similar right to a United States person who is an individual, for any reason connected with his employment by a corporation, if such option or right (A) is granted by the employer corporation, or its parent or subsidiary corporation, to purchase stock of any such corporations, and (B) by its terms is not transferable by such United States person otherwise than by will or the laws of descent and distribution, and is exercisable, during his lifetime, only by him. "(b) EXCLUDED ACQUISITIONS.—The tax imposed by section 4911 shall not apply to the acquisition— "(1) THE UNITED STATES.—Of stock or debt obligations by an agency or wholly owned instrumentality of the United States. "(2)

C O M M E R C I A L BANK LOANS.—

" (A) Of debt obligations by a commercial bank in making loans in the ordinary course of its commercial banking business. ' " (B) Of stock or debt obligations by a commercial bank . ^ through foreclosure, where such stock or debt obligations - • were held as security for loans made in the ordinary course of its commercial banking business. "(3) ACQUISITIONS REQUIRED UNDER FOREIGN LAW.—Of stock or debt obligations by a United States person doing business in a foreign country to the extent that such acquisitions are reasonably necessary to satisfy minimum requirements relating to holdings of stock or debt obligations of foreign issuers or obligors imposed by the laws of such foreign country; except that if any of such requirements relate to the holding of insurance reserves, the exclusion otherwise allowable under this paragraph with respect to acquisitions made by such United States person during any calendar year shall be reduced by the maximum amount of the exclusion which could be allowed under subsection (e) with respect to acquisitions made by such person during that year, or by the amount of the insurance reserves which must be held in order to satisfy such requirements, whichever is less. "(4)

ACQUISITIONS I N LIEU OF PAYMENT OF FOREIGN TAX.—Of

stock or debt obligations by a United States person doing business in a foreign country, to the extent such acquisition is made, in conformity with the laws of such foreign country, as a substitute for the payment of tax to such foreign country. "(5)

ACQUISITIONS OF STOCK IN COOPERATIVE HOUSING CORPORA-

TIONS.—Of stock of a foreign corporation which entitles the holder, solely by reason of his ownership of such stock, to occupy for dwelling purposes a house, or an apartment in a building, owned or leased by such corporation. "(6) EXPORT CREDIT, ETC., TRANSACTIONS.—Of stock or debt obligations arising from the sale of property or services by United States persons, to the extent provided in subsection (c).

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" (7) LOANS TO ASSURE RAW MATERIALS SOURCES.—Of debt obligations by United States persons in connection with loans made to foreign corporations to assure raw materials sources, to the extent provided in subsection (d). "(8)

ACQUISITIONS BY INSURANCE COMPANIES DOING BUSINESS IN

FOREIGN COUNTRIES.—Of stock OT debt obligations by insurance companies doin^ business in foreign countries, to the extent provided in subsection (e). "(9) ACQUISITIONS BY CERTAIN TAX-EXEMPT LABOR, FRATERNAL, AND SIMILAR ORGANIZATIONS HAVING FOREIGN BRANCHES OR CHAP-

TERS.—Of stock or debt obligations by certain tax-exempt United States persons operating in foreign countries through local organizations, to the extent provided in subsection (f). " (10) ACQUISITIONS OF DEBT OBLIGATIONS ON SALE OR LIQUIDATION

OF WHOLLY OWNED FOREIGN SUBSIDIARIES.—Of debt obligations acquired in connection with the sales or liquidation of a wholly owned foreign corporation, to the extent provided in subsection (g). "(11) ACQUISITIONS OF DEBT OBLIGATIONS ARISING OUT OF PURCHASE OF REAL PROPERTY LOCATED IN THE UNITED STATES. Of debt

obligations secured by real property located in the United States and arising out of the purchase of such property from United States persons, to the extent provided in subsection (h). " (12) ACQUISITIONS BY UNITED STATES PERSONS RESIDING IN FOR-

EIGN COUNTRIES OF STOCK OF CERTAIN FOREIGN ISSUERS INVESTING EXCLUSIVELY IN THE UNITED STATES.

O f StOck o f foreign isSUCTS

investing exclusively in the United States by United States persons residing in foreign countries, to the extent provided in subsection "(c)

EXPORT CREDIT, ETC.. TRANSACTIONS.—

"(1) IN GENERAL.—The tax imposed by section 4911 shall not apply to the acquisition from a foreign obligor of a debt obligation arising out of the sale of tangible personal property or services (or both) to such obligor by any United States person, if— " (A) payment of such debt obligation (or of any related debt obligation arising out of such sale) is guaranteed or insured, in whole or in part, by an agency or wholly owned instrumentality of the United States; or " (B) the United States person acquiring such debt obligation makes the sale in the ordinary course of his trade or business and not less than 85 percent of the purchase price is attributable to the sale of property manufactured, produced, grown, or extracted in the United States, or to the performance of services by such United States person (or by one or more includible corporations in an affiliated group, as defined in section 1504, of which such person is a member), or to both. The term 'services', as used in this paragraph and paragraph (2), shall not be construed to include functions performed as an underwriter. "(2)

ALTERNATE RULE FOR PRODUCING EXPORTERS.—The tax

im-

posed by section 4911 shall not apply to the acquisition by a United States person from a foreign issuer or obligor of its stock in payment for, or of a debt obligation arising out of, the sale of tangible personal property or services (or both) to such issuer or obligor, if (A) at least 30 percent of the purchase price, or 60 percent of the actual value of the stock or debt obligation acquired, is attributable to the sale of property manufactured, pro-

^e use 1504,

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26 USC 1504.

PUBLIC LAW 88-563-SEPT. 2, 1%4

[78 STAT.

duced, grown, or extracted in the United States by such United States person (or by one or more includible corporations in an affiliated group, as defined in section 1504, of which such person is a member), or to the performance of services by such United States person (or by one or more such corporations), or to both, and " (B) at least 50 percent of the purchase price, or 100 percent of the actual value of the stock or debt obligation acquired, is attributable to the sale of property manufactured, produced, grown, or extracted in the United States, or to the performance of services by United States persons, or to both. "(3)

CERTAIN INTERESTS I N INTANGIBLE PERSONAL PROPERTY.—

The tax imposed by section 4911 shall not apply to the acquisition by a United States person from a foreign issuer or obligor of its stock in payment for^ or of a debt obligation arising out of, the sale or license to such issuer or pbligor of— " (A) any interest in patents, inventions, models or designs (whether or not patented), copyrights, secret processes and formulas, good will, trademarks, trade brands, franchises, or other like property (or any combination thereof), or " (B) any such interest together with services to be performed in connection with any such interest sold or licensed by such United States person (or by one or more includible corporations in an affiliated group, as defined in section 1504, of which such person is a member), if not less than 85 percent of the purchase price, or license fee, is attributable to the sale or license of any interest in property described in subparagraph (A) which was produced, created, or developed in the United States by such United States person (or by one or more such includible corporations), or is attributable to the sale or license of any interest in such property so produced, created, or developed and to the performance of services described in subparagraph (B). "(4) EXPORT-RELATED LOANS.—The tax imposed by section 4911

shall not apply to the acquisition from a foreign obligor by a United States person of a debt obligation arising out of a loan made to the obligor to increase or maintain sales of tangible personal property produced, grown, or extracted in the United States by such United States person (or by one or more includible corporations in an affiliated group, as defined in section 1504, of which such person is a member), but only if the proceeds of the loan will be used by the obligor for the installation, maintenance, or improvement of facilities outside the United States which (during the period the loan is outstanding) will be used for the storage, handling, transportation, processing, packaging, or servicing of property a substantial portion of which is tangible personal property produced, grown, or extracted in the United States by such person (or one or more such corporations). "(5)

OTHER LOANS RELATED TO CERTAIN SALES BY UNITED STATES

PERSONS.—The tax imposed by section 4911 shall not apply to the acquisition from a foreign obligor by a United States person of a debt obligation of such obligor if such debt obligation— " ( A ] was received by such United States person as all or part oi the purchase price provided in a contract under which the foreign obligor agrees to purchase for a period of 3 years or more ores or minerals (or derivatives thereof)— " (i) extracted outside the United States by such United States person or by one or more includible corpo-

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rations in an affiliated group (as defined in section 969. 48(c)(3)(C)) of which such United States person is a 76 Stat. 48. 26 USC member, "(ii) extracted outside the United States by a corporation at least 10 percent of the total combined voting power of all classes of stock of which is owned, directly or indirectly, by such United States person, by one or more such includible corporations, or by domestic corporations which own, directly or indirectly, at least 50 percent of the total combined voting power of all classes of stock of such United States person, "(iii) obtained under a contract entered into on or before July 18, 1963, by such United States person, by one or more such includible corporations, or by such domestic corporations, or " (iv) extracted outside the United States and obtained by such United States person, by one or more such includible corporations, or by such domestic corporations in exchange for similar ores or minerals (or derivatives thereof) described in clause (i), (ii), or ( i i i); or " (B) arises out of a loan (made by such United States person to such foreign obligor) the proceeds of which will be used by such obligor (or by a person controlled by, or controlling, such obligor) for the installation, maintenance, or improvement of facilities outside the United States which (during the period the loan is outstanding) will be used for the storage, handling, transportation, processing, or servicing of ores or minerals (or derivatives thereof) a substantial portion of which is extracted outside the United States by such United States person or by a corporation referred to in clause (i) or (ii) of subparagraph (A), is obtained under a contract described in clause (iii) of subparagraph (A), or is obtained in an exchange described in clause (iv) of subparagraph (A). " (6) CROSS REFERENCE.—

"For loss of exclusion otherwise allowable under this subsection in case of certain subsequent transfers, see subsection (j). " (d) LOANS TO ASSURE RAW MATERIALS SOURCES.— "(1) GENERAL RULE.—The tax imposed by section

4911 shall not apply to the acquisition by a United States person of a debt obligation arising out of a loan made by such person to a foreign corporation, if— " (A) such foreign corporation extracts or processes ores or minerals the available deposits of which in the United States are inadequate to satisfy the needs of domestic producers; " (B) United States persons own at the time of such acquisition at least 50 percent of the total combined voting power of all classes of stock of such foreign corporation; and " (C) such loan will be amortized under a contract or contracts in which persons owning stock of such corporation (including at least one of the United States persons referred to in subparagraph (B)) agree to pay during the period remaining to maturity of such obligation, by purchasing a part of the production of such corporation or otherwise, a portion of such corporation's costs of operation and costs of amortizing outstanding loans.

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,

[78 STAT.

"(2) LIMITATION.—The exclusion from tax provided by paragraph (1) shall apply to the acquisition of any debt obligation of a foreign corporation only to the extent that— " (A) the applicable percentage of (i) the actual value of the debt obligation acquired, plus (ii) the actual value (determined as of the time of such acquisition) of all other debt obligations representing loans which were theretofore made to the foreign corporation during the same calendar year and which are amortizable under contracts of the type described in paragraph (1)(C), exceeds " (B) the actual value of the debt obligations described in subparagraph (A) (ii) representing loans made by United States persons, to the extent that the acquisition of such obligations was excluded from tax under this subsection. As used in this paragraph with respect to the acquisition of a debt obligation, the term 'applicable percentage' means the lesser of (i) the percentage of the total combined voting power of all classes of stock of the foreign corporation which is owned by United States persons at the time of such acquisition, or (ii) the percentage of the corporation's operating and amortization costs for the calendar year which all such United States persons have agreed to pay (as of the time of such acquisition) under contracts of the type described in paragraph (1)(C).

"(e) ACQUISITIONS BY INSURANCE COMPANIES DOING BUSINESS IN FOREIGN COUNTRIES.—

76^stat°989^\'97 26 USC 802, ' 821, 831.

"(1) IN GENERAL.—The tax imposed by section 4911 shall not apply to the acquisition of stock or a debt obligation by a United States person which is an insurance company subject to taxation under section 802, 821, or 831, if such stock or debt obligation is designated (in accordance with paragraph (3)) as part of a fund of assets established and maintained by such insurance company (in accordance with paragraph (2)) with respect to foreign risks insured or reinsured by such company under contracts (including annuity contracts) the proceeds of which are payable only in the currency of a foreign country. As used in this subsection, the term 'foreign risks' means risks in connection with property outside, or liability arising out of activity outside, or in connection with the lives or health of residents of countries other than, the United States. "(2)

26 us^c 80?'

ESTABLISHMENT AND MAINTENANCE OF FUND OF ASSETS.—

Each insurance company which desires to obtain the benefit of exclusions under this subsection shall (as a condition of entitlement to any such exclusion) establish and maintain a fund (or funds) of assets in accordance with this paragraph and paragraph (3). A life insurance company (as defined in section 801(a)) shall establish such a fund of assets separately for each foreign currency (other than the currency of a country which qualifies as a less developed country) in which the proceeds of its insurance contracts are payable and for which insurance reserves are maintained by such company, and with respect to which it desires to obtain the benefits of exclusions under this subsection; and the preceding sentence shall be applied separately to each such fund in determining the company's entitlement to exclude acquisitions of stock and debt obligations designated as a part thereof. An insurance company other than a life insurance company (as so defined) shall establish a single fund of assets for all foreign currencies (other than currencies of countries which qualify as less developed countries at the time of the initial designation) in which the proceeds of its insurance contracts are

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payable and for which insurance reserves are maintained by such company. " (3) DESIGNATION OF ASSETS.— " (A) I N I T I A L DESIGNATION.— " (i) REQUIREMENT OF INITIAL DESIGNATION.—An

insurance company desiring to establish a fund (or funds) of assets under paragraph (2) shall initially designate, as part or all of such fund (or funds), stock and debt obligations owned by it on July 18, 1963, as follows: First, stock of foreign issuers, and debt obligations of foreign obligors having a period remaining to maturity (on July 18, 1963) of 3 years or more and payable in foreign currency; second, if the company so elects, debt obligations of foreign obligors having a period remaining to maturity (on July 18, 1963) of less than 3 years and payable in foreign currency; and third, debt obligations of foreign obligors having a period remaining to maturity (on July 18, 1963) of 3 years or more and pavable solely in United States currency. The designation under the preceding sentence with respect to any fund shall be made, in the order set forth, to the extent that the adjusted basis (within the meaning of section 1011) of the designated stock and 26 USC ion. debt obligations was (on July 18, 1963) not in excess of 110 percent of the allowable reserve applicable to such fund (determined in accordance with paragraph (4) (B) ( i i)), and shall in no case include any stock or debt obligation described in section 4916(a). ^°®'' P- ^27. " ( i i) T I M E AND MANNER OF INITIAL DESIGNATION.—

Any initial designation which an insurance company is required to make under this subparagraph shall be made on or before the 30th day after the date of the enactment of this chapter (or at such later time as the Secretary or his delegate may by regulations prescribe) by the segregation on the books of such company of the stock or debt obligations (or both) designated, " (B) CURRENT DESIGNATIONS TO MAINTAIN FUND.—To the

extent permitted by subparagraph ^ E), stock of a foreign issuer or a debt obligation of a foreign obligor acquired by an insurance company after July 18, 1963, may be designated as part of a fund of assets described in paragraph (2), if such designation is made before the expiration of 30 days after the date of such acquisition and the company continues to own the stock or debt obligation until the time the designation is made; except that any such stock or debt obligation acquired before the initial designation of assets to the fund is actually made as provided in subparagraph (A) (ii) may be designated under this subparagraph at the time of such initial designation without regard to such 30-day and continued ownership requirements. " (C) ADDITIONAL DESIGNATIONS AFTER CLOSE OF YEAR.—If

the adjusted basis of the assets held in a fund of assets described in paragraph (2) at the close of a calendar year after 1963 is less than 110 percent of the allowable reserve applicable to such fund at the close of such year, the insurance company may, to the extent permitted by subparagraph (E), designate additional stock or debt obligations (or both) which were acquired during such calendar year as part of such fund, so long as the company still owns such stock or debt obliga-

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 820

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[78 STAT.

tions at the time of designation. Any designation under this subparagraph shall be made on or before January 31 following the close of the calendar year. Any tax paid by such company under section 4911 on the acquisition of the additional stock or debt obligations so designated shall constitute an overpayment of tax; and, under regulations prescribed by the Secretary or his delegate, credit or refund (without interest) shall be allowed or made with respect to such overpayment. ' ' (D) S U P P L E M E N T A L REQUIRED DESIGNATIONS AFTEii CLOSE

Post, p. 830.

OF YEAR.—If during any calendar year an insurance company acquires stock or debt obligations which are excluded from the tax imposed by section 4911 under an Executive order described in section 4917, and if at the close of the calendar year (and after the designation of additional assets under subparagraph (C)) the adjusted basis of all assets in a fund described in paragraph (2) is less than 110 percent of the allowable reserve applicable to such fund, such company shall, to the extent permitted by subparagraph (E), designate as part of such fund stock and debt obligations acquired by it during the calendar year and owned by it at the close of the calendar year, as follows: First, stock, and debt obligations having a period remaining to maturity (on the date of acquisition) of 3 years or more and payable in foreign currency, which were excluded from the tax imposed by section 4911 under such Executive order; ^cond, if the company so elects, debt obligations of foreign obligors having a period remaining to maturity (on the date of acquisition) of less than 3 years and payable in foreign currency; and third, debt obligations having a period remaining to maturity (on the date of acquisition) of 3 years or more and payable solely in United States currency, which were excluded from the tax imposed by section 4911 under such Executive order. The designations under this subparagraph shall be made on or before January 31 following the close of the calendar year. "(E)

LIMITATIONS.—

"(i) IN GENERAL.—Stock or a debt obligation may be designated under subparagraph (B), (C), or (D) as part of a fund of assets described in paragraph (2) only to the extent that, immediately after such designation, the adjusted basis of all the assets held in such fund does not exceed 110 percent of the applicable allowable reserve (determined in accordance with paragraph (4) (B)(i)). To the extent any designation of stock or a debt obligation exceeds the amount permitted by the preceding sentence, such designation shall be ineffective and the provisions of this chapter shall apply with respect to the acquisition of such stock or debt obligation as if such designation had not been made. " ( i i) SHORT-TERM OBLIGATIONS.—No designation may

be made under subparagraph (B) or (C) of any debt obligation which has a period remaining to maturity (on the date of acquisition) of less than 3 years. " (4) DETERMINATION OF RESERVES.— " (A) GENERAL RULE.—For purposes of this subsection,

26 USC* 801^* 26 USC 810.'

the term 'allowable reserve' means— " (i) in the case of a life insurance company (as defined in section 801 ( a ^, the items taken into account under section 810(c) arising out of contracts of insurance

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and reinsurance (including annuity contracts) which relate to foreign risks and the proceeds of which are payable in a single foreign currency (other than the currency of a less developed country); and •'(ii) in the case of an insurance company other than a life insurance company (as so defined), the amount of its unearned premiums (under section 832(b)(4)) and unpaid losses (under section 832(b)(5)) which relate to foreign risks insured or reinsured under contracts providing for payment in foreign currencies (other than currencies of less developed countries) and which are taken into account in computing taxable income under section 832 (for such purpose treating underwriting income of an insurance company subject to taxation under section 821 as taxable income under section 832). "(B)

26 USC 832.

^^ ^^^- ^^^•

T I M E OF DETERMINATION.—

" (i) IN GENERAL.—For purposes of paragraph (3) (other than subparagraph (A) of such paragraph), the determination of an allowable reserve for any calendar year shall be made as of the close of such year. "(ii) INITIAL DESIGNATION.—For purposes of paragraph (3)(A), the determination of an allowable reserve shall be made as of July 18, 1963. If the insurance company so elects, the determination under this clause may be made by computing the mean of the allowable reserve at the beginning and at the close of the calendar year 1963. "(5) NONRECOGNITION OF ARTIFICIAL INCREASES IN ALLOWABLE RESERVE.—An insurance or reinsurance contract which is entered into or acquired by an insurance company for the principal purpose of artificially increasing the amount determined as an allowable reserve as provided in p a r a ^ a p h (4) shall not be recognized in computing whether an acquisition of stock or a debt obligation of a foreign issuer or obligor can be excluded under this subsection. " (f) ACQUISITIONS BY CERTAIN TAX-EXEMPT LABOR, FRATERNAL, AND SIMILAR ORGANIZATIONS HAVING FOREIGN BRANCHES OR C H A P -

TERS.—The tax imposed by section 4911 shall not apply to the acquisition of stock or debt obligations by a United States person which is described in section 501(c) and exempt from taxation under subtitle A, and which operates in a foreign country through a local organization or organizations, to the extent that— "(1) such acquisition results from the investment or reinvestment of contributions or membership fees paid in the currency of such country b ^ individuals who are members of the local organization or organizations, and " (2) the stock or debt obligations acquired are held exclusively for the benefit of the members of any of such local organizations. " (g) SALE OR LIQUIDATION OF WHOLLY OWNED FOREIGN SIDIARY.—

^e use soi.

SUB-

"(1) IN GENERAL.—The tax imposed by section 4911 shall not apply to the acquisition by a United States person of a debt obligation of a foreign obligor if the debt obligation is acquired— " (A) in connection with the sale by such United States person (or by one or more includible corporations in an affiliated group, as defined in section 4 8 (c)(3)(C), of which such United States person is a member) of all of the outstanding stock, except for qualifying shares, of a foreign corporation; or

26us^c48^'

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[78 STAT.

" (B) in connection with the liquidation by such United States person (or by one or more such includible corporations) of a foreign corporation all of the outstanding stock of which, except for qualifying shares, is owned by such United States person (or by one or more such includible corporations), but only if such debt obligation had been received by such foreign corporation as part or all of the purchase price in a sale of substantially all of its assets. "(2) LIMITATION.—Paragraph (1) shall not apply to the acquisition of a debt obligation if any of the stock sold or surrendered in connection with its acquisition was originally acquired with the intent to sell or surrender. " (h) CERTAIN DEBT MORTGAGES, ETC.—

OBLIGATIONS SECURED BY UNITED STATES

"(1) IN GENERAL.—The tax imposed by section 4911 shall not apply to the acquisition from a foreign obligor by a United States person of a debt obligation of such foreign obligor which is secured by real property located in the United States, to the extent that— " (A) the debt obligation is a part of the purchase price of such real property (or of such real property and related personal property); or " (B) the debt obligation arises out of a loan made by such United States person to the foreign obligor the proceeds of which are concurrently used as part of the purchase price of such real property (or of such real property and related personal property). "(2) LIMITATION.—Paragraph (1) shall apply to the acquisition of a debt obligation only if— " (A) the owner of the property sold is a United States person; and " (B) at least 25 percent of the purchase price of the property sold is, at the time of such sale, paid in United States currency to such United States person by the foreign obligor from funds not obtained from United States persons for the purpose of purchasing such property. " (3) RELATED PERSONAL PROPERTY.—For purposes of paragraph

(1), the term 'related personal property' means personal property which is sold in connection with the sale of real property for use in the operation of such real property, " (i) ACQUISITIONS or STOCK OF FOREIGN ISSUERS INVESTING EXCLUSIVELY I N THE UNITED STATES.—

76 Stat. 1003. ^^ ^ ^^^"

Post, p. 836.

"(1) IN GENERAL.—The tax imposed by section 4911 shall not apply to the acquisition from a foreign issuer of its stock by a United States person who is a bona fide resident of a foreign country within the meaning of section 911(a)(1), or who at the time of such acquisition is regularly performing personal services on a full-time basis in a foreign country, if at the close of each calendar quarter ending on or after June 30, 1963, preceding such acquisition, during any part of which such foreign issuer is in existence— " (A) the assets of such foreign issuer, exclusive of money or deposits with persons carrying on the banking business, consist solely of: " (i) stock or debt obligations of domestic corporations (other than a corporation which has elected under section 4920(a)(3)(B) to be treated as a foreign issuer or obligor for purposes of this chapter);

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