Page:United States Statutes at Large Volume 120.djvu/379

 120 STAT. 348 26 USC 468B note.

PUBLIC LAW 109–222—MAY 17, 2006

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to accounts and funds established after the date of the enactment of this Act. SEC. 202. MODIFICATION OF ACTIVE BUSINESS DEFINITION UNDER SECTION 355.

26 USC 355.

Subsection (b) of section 355 (defining active conduct of a trade or business) is amended by adding at the end the following new paragraph: ‘‘(3) SPECIAL RULE RELATING TO ACTIVE BUSINESS REQUIREMENT.— ‘‘(A) IN GENERAL.—In the case of any distribution made after the date of the enactment of this paragraph and on or before December 31, 2010, a corporation shall be treated as meeting the requirement of paragraph (2)(A) if and only if such corporation is engaged in the active conduct of a trade or business. ‘‘(B) AFFILIATED GROUP RULE.—For purposes of subparagraph (A), all members of such corporation’s separate affiliated group shall be treated as one corporation. For purposes of the preceding sentence, a corporation’s separate affiliated group is the affiliated group which would be determined under section 1504(a) if such corporation were the common parent and section 1504(b) did not apply. ‘‘(C) TRANSITION RULE.—Subparagraph (A) shall not apply to any distribution pursuant to a transaction which is— ‘‘(i) made pursuant to an agreement which was binding on the date of the enactment of this paragraph and at all times thereafter, ‘‘(ii) described in a ruling request submitted to the Internal Revenue Service on or before such date, or ‘‘(iii) described on or before such date in a public announcement or in a filing with the Securities and Exchange Commission. The preceding sentence shall not apply if the distributing corporation elects not to have such sentence apply to distributions of such corporation. Any such election, once made, shall be irrevocable. ‘‘(D) SPECIAL RULE FOR CERTAIN PRE-ENACTMENT DISTRIBUTIONS.—For purposes of determining the continued qualification under paragraph (2)(A) of distributions made on or before the date of the enactment of this paragraph as a result of an acquisition, disposition, or other restructuring after such date and on or before December 31, 2010, such distribution shall be treated as made on the date of such acquisition, disposition, or restructuring for purposes of applying subparagraphs (A) through (C) of this paragraph.’’. SEC. 203. VETERANS’ MORTGAGE BONDS.

(a) EXPANSION OF DEFINITION OF VETERANS ELIGIBLE FOR STATE HOME LOAN PROGRAMS FUNDED BY QUALIFIED VETERANS’ MORTGAGE BONDS.— (1) IN GENERAL.—Paragraph (4) of section 143(l) (defining qualified veteran) is amended to read as follows:

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