Page:United States Statutes at Large Volume 100 Part 3.djvu/1008

 100 STAT. 2816

PUBLIC LAW 99-514—OCT. 22, 1986 "Sec. 468B. Special rules for designated settlement funds." (C) SPECIAL RULE FOR TAXPAYER IN BANKRUPTCY REORGA-

NIZATION.—In the case of any settlement fund which is established for claimants against a corporation which filed a petition for reorganization under chapter 11 of title 11, United States Code, on August 26, 1982, and which filed ^•i v^rith a United States district court a first amended and restated plan of reorganization before March 1, 1986— (i) any portion of such fund which meets the require^ ^ -ments of subparagraphs (A), (C), (D), and (F) of section 468B(d)(2) of the Internal Revenue Code of 1954 (as .,^^,, added by this paragraph) shall be treated as a des,^^.V'. ignated settlement fund for purposes of section 468B of .V such Code, (ii) such corporation (or any successor thereof) shall y-^il. be liable for the tax imposed by section 468B of such Code on such portion of the fund (and the fund shall f.(- .;. not be liable for such tax), such tax shall be deductible by the corporation, and the rate of tax under section l« - •. u 468B of such Code for any taxable year shall be equal to 15 percent, and (iii) any transaction by any portion of the fund not -.u:> ' described in clause (i) shall be treated as a transaction made by the corporation. umih^'

(D) CLARIFICATION OF LAW WITH RESPECT TO CERTAIN FUNDS.—

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(i) IN GENERAL.—Nothing in any provision of law shall be construed as providing that an escrow account, settlement fund, or similar fund is not subject to curj.gj^^ income tax. If contributions to such an account or fund are not deductible, then the account or fund shall be taxed as a grantor trust. (ii) EFFECTIVE DATE.—The provisions of clause (i) shall apply to accounts or funds established after August 16, 1986.

(8) TRANSITIONAL RULE FOR CERTAIN AMOUNTS.—For purposes

of section 461(h) of the Internal Revenue Code of 1954, economic performance shall be treated as occurring on the date of a payment to an insurance company if— 5 (A) such payment was made before November 23, 1985, for indemnification Eigainst a tort liability relating to personal injury or death caused by inhalation or ingestion of dust from asbestos-containing insulation products, (B) such insurance company is unrelated to taxpayer, (C) such payment is not refundable, and (D) the taxpayer is not engaged in the mining of asbestos nor is any member of any affiliated group which includes the taxpayer so engaged, (b) AMENDMENTS RELATED TO SECTION 92 OF THE ACT.— (1) TREATMENT OF SERVICES.—Subsection (g) of section
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467 (relating to comparable rules for services) is amended by adding at the end thereof the following new sentence: "The preceding sentence shall not apply to any amount to which section 404 or ^*i 404A (or any other provision specified in regulations) applies." (2) CLERICAL AMENDMENTS.—

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