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PUBLIC LAW 89-591-SEPT. 19, 1966

Public Law 89-591

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[80 STAT.

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September 19, 1966

AN ACT

[H. R. 11087]

T^ amend the District of Columbia Income and Franchise Tax Act of 1947, as amended, and the District of Columbia Business Corporation Act, as amended, with respect to certain foreign corporations.

Be it enacted by the Senate and House of Representatives of the D.c. United States of America in Congress assembled, That section 2(b) Foreign corporationV,''reai'^r^p- of title III of the District of Columbia Income and Franchise Tax erty investments. Act of 1947, as amended (61 Stat. 335, art. I, title III, sec. 2, as amended by 62 Stat. 207, ch. 246, sec. 3; 63 Stat. 130, ch. 146, title IV, secs. 403, 420; 71 Stat. 605, Public Law 85-281, secs. 1, 3; and 74 Stat. 219, Public Law 86-522, sec. 1; D.C. Code 47-1557a(b)), is amended by adding at the end thereof the following new paragraph: " (17) FOREIGN CORPORATION REAL PROPERTY INVESTMENT INCOME.—

Income derived by a foreign corporation authorized to invest in loans secured by real estate, which does not maintain any office, officer, agent, representative or employees for the purpose of making, maintaining, or liquidating such investment, in the District of Columbia, provided that the only activities of such foreign corporation in the District of Columbia, other than those of a liaison employee, are one or more of the following: " (A) the acquisition of loans (including the negotiation thereof) secured by mortgages or deeds of trust on real property, including leaseholds, situated in the District of Columbia pursuant to commitment agreements or arrangements made prior to or following the origination or creation of such loans: Provided, however, That nothing herein shall be deemed to permit servicing other than as permitted by subparagraph (D) of this paragraph ( 1 7); " (B) the physical inspection and appraisal of property in the District of Columbia as security for mortgages or deed of trust; " (C) the ownership, modification, renewal, extension, transfer, or foreclosure of such loans, or the acceptance of substitute additional obligors thereon; " (D) the making, collecting, and servicing of loans solely through a person authorized to engage in the District of Columbia in the business of servicing real estate loans for investors; " (E) maintaining or defending any action or suit or any administrative or arbitration proceeding arising as a result of such loans; " (F) the acquisition of title to property which is the security for such a loan m the event of default on such loan, either by foreclosure, sale, or agreement in lieu thereof; " (G) pendiiigliquidation of its investment within such period, not to exceed one year, as the Commissioners may by regulation prescribe, operating, maintaining, renting or otherwise dealing with, selling or disposing of, real property acquired by foreclosure, sale, or by agreement in lieu thereof: Provided, That if, upon the expiration of the period prescribed by the Commissioners, such property has not been sold or otherwise disposed of, such foreign corporation shall be subject to tax on all of the income derived by the corporation arising out of its ownership of such property, but such liability shall not be construed as affecting the exclusion from gross income of income from other loans made or acquired by it m accordance with this paragraph (17). "Income derived from the ownership of real property and not excludible from gross income as provided in this paragraph (17) shall

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