Page:United States Statutes at Large Volume 103 Part 3.djvu/278

 103 STAT. 2346 PUBLIC LAW 101-239—DEC. 19, 1989 effect on August 2, 1989, and at all times thereafter before such acquisition or redemption, or „ (C) any distribution with respect to stock after August 2, 1989, which was declared on or before August 2, 1989. Any distribution to which the preceding sentence applies shall be taken into account under section 172(m)(3)(C)(iiXI) of the distributions). Subtitle C—Employee Benetit Provisions PART I—EMPLOYEE STOCK OWNERSHIP PLANS SEC. 7301. LIMITATIONS ON PARTIAL EXCLUSION OF INTEREST ON LOANS USED TO ACQUIRE EMPLOYER SECURITIES. (a) EXCLUSION AVAILABLE ONLY WHERE EMPLOYEES RECEIVE SIGNIFICANT OWNERSHIP INTEREST. —Subsection 0)) of section 133 (defining securities acquisition loans) is sunended by adding at the, end thereof the following new paragraph: "(6) PLAN MUST HOLD MORE THAN 50 PERCENT OF STOCK AFTER ACQUISITION OR TRANSFER. — "(A) IN GENERAL. — A losm shall not be treated as a securi- ties acquisition loan for purposes of this section unless, immediately after the acquisition or transfer referred to in subparagraph (A) or (B) of paragraph (1), respectively, the employee stock ownership plan owns more than 50 percent of— "(i) each class of outstanding stock of the corporation issuing the employer securities, or "(ii) the total value of all outstanding stock of the corporation. "(B) FAILURE TO RETAIN MINIMUM STOCK INTEREST. — "(i) IN GENERAL.—Subsection (a) shall not apply to any interest received with respect to a securities ac- quisition loan which is allocable to any period during which the employee stock ownership plan does not own stock meeting the requirements of subparagraph (A), "(ii) EXCEPTION. — To the extent provided by the Sec- retary, clause (i) shall not apply to any period if, within ^.90 days of the first date on which the failure occurred (or such longer period not in excess of 180 days as the Secretary may prescribe), the plan acc[uires stock - which results in its meeting the requirements of subparagraph (A). "(C) STOCK.— For purposes of subparagraph (A)— "(i) IN GENERAL. —The term stock'means stock Other than stock described in section 1504(a)(4). "(ii) TREATMENT OF CERTAIN RIGHTS.—The Secretary V may provide that warrants, options, contracts to ac- quire stock, convertible debt interests and other similar «. interests be treated as stock for 1 or more purposes under subparagraph (A). "(D) AGGREGATION RULE.— For purposes of determining whether the requirements of subparagraph (A) are met, an employee stock ownership plan shall be treated as owning stock in the corporation issuing the employer securities which is held
 * Internal Revenue Code of 1986 (relating to base period for

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