Page:United States Statutes at Large Volume 80 Part 1.djvu/1164

 1128

68A Stat. 779.

PUBLIC LAW 89-719-NOV. 2, 1966

[80 STAT.

" (A) DEFINITION.—The term 'real property construction or improvement financing agreement' means an agreement to make cash disbursements to finance— " (i) the construction or improvement of real property, "(ii) a contract to construct or improve real property, or "(iii) the raising or harvesting of a farm crop or the raising of livestock or other animals. For purposes of clause (iii), the furnishing of goods and services shall be treated as the disbursement of cash. " (B) LIMITATION ON QUALIFIED PROPERTY.—The term •qualified property', when used with respect to a real property construction or improvement financing agreement, includes only— "(i) in the case of subparagraph (A)(i), the real property with respect to which the construction or improvement has been or is to be made, "(ii) in the case of subparagraph (A) ( i i), the proceeds of the contract described therein, and "(iii) in the case of subparagraph (A) (iii), property subicct to the lien imposed by section 6321 at the time of tax lien filing and the crop or the livestock or other animals referred to in subparagraph (A) (iii). " (4) OBLIGATORY DISBURSEMENT AGREEMENT.—For purposes of

this subsection— " (A) DEFINITION.—The term 'obligatory disbursement agreement' means an agreement (entered into by a person in the course of his trade or business) to make disbursements, but such an agreement shall be treated as coming within the term only to the extent of disbursements which are required to be made by reason of the intervention of the rights of a person other than the taxpayer. " (B) LIMITATION ON QUALIFIED PROPERTY.—The term 'qualified property', when used with respect to an obligatory disbursement agreement, means property subject to the lien imposed by section 6321 at the time of tax lien filing and (to the extent that the acquisition is directly traceable to the disbursements referred to in subparagraph (A)) property acquired by the taxpayer after tax lien filing. " (C) SPECIAL RULES FOR SURETY AGREEMENTS.—Where the

obligatory disbursement agreement is an agreement ensuring the performance of a contract between the taxpayer and another person— "(i) the term 'qualified property' shall be treated as also including the proceeds of the contract the performance of which was ensured, and "(ii) if the contract the performance of which was ensured was a contract to construct or improve real property, to produce goods, or to furnish services, the term 'qualified property' shall be treated as also including any tangible personal property used by the taxpayer in the performance of such ensured contract. " (d) 4 5 - D A Y PERIOD FOR MAKING DISBURSEMENTS.—Even though

notice of a lien imposed by section 6321 has been filed, such lien shall not be valid with respect to a security interest which came into existence after tax lien filing by reason of disbursements made before the 46th day after the date of tax lien filing, or (if earlier) before the person making such disbursements had actual notice or knowledge of tax lien filing, but only if such security interest—

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