Page:United States Statutes at Large Volume 83.djvu/743

 83

STAT. ]

PUBLIC LAW 91.172-DEC. 30, 1969

715

" (b) SPECIAL RULES. — For purposes of subsection (a) — "(1) SECTION 303 REDEMPTION NEEDS.—The term 'section 303 26 USC^303^' redemption needs' means, with respect to the taxable year of the corporation in which a shareholder of the corporation died or any taxable year thereafter, the amount needed (or reasonably anticipated to be needed) to make a redemption of stock included in the gross estate of the decedent (but not in excess of the maximum amount of stock to which section 303(a) may apply). "(2) EXCESS BUSINESS HOLDINGS REDEMPTION NEEDS.—The term 'excess business holdings redemption needs' means, with respect to taxable years of the corporation ending after May 26, 1969, the amount needed (or reasonably anticipated to be needed) to redeem from a private foundation stock which— " (A) such foundation held on May 26, 1969 (or which was received by such foundation pursuant to a will or irrevocable trust to which section 4943(c)(5) applies), and ^"f^, p. 507. " (B) constituted excess business holdings on May 26, 1969, or would have constituted excess business holdings as of such date if there were taken into account (i) stock received pursuant to a will or trust described in subparagraph (A), and (ii) the reduction in the total outstanding stock of the corporation which would have resulted solely from the redemption of stock held by the private foundation. "(3) OBLIGATIONS INCURRED TO MAKE REDEMPTIONS.—In applying paragraphs (1) and (2), the discharge of any obligation incurred to make a redemption described in such paragraphs shall be treated as the making of such redemption. "(4) No INFERENCE AS TO PRIOR TAXABLE TEARS.—The application of this part to any taxable year before the first taxable year specified in paragraph (1) or (2) shall be made without regard to the fact that distributions in redemption coming within the terms of such paragraphs were subsequently made."' (b) EFFI'.CTIVE DATE.—The amendment made by subsection (a) shall apply to the tax imposed under section 531 of the Internal Revenue Code of 1954 with respect to taxable years ending after May 26, 1969. SEC. 907. INSURANCE COMPANIES. (a)

S P E C I A L C O N T I N G E N C Y RESERVES I^NDER (TROUP CONTRACTS.— (1) INTEREST PAID.—Section 805(e)(4) (relating to interest

73 Stat. iis.

paid on certain reserves) is amended to read as follows: "(4)

INTEREST ON CERTAIN SPECIAL CONTINGENCY RESERVES.—

Interest for the taxable year on special contingency reserves under contracts of group term life insurance or group health and accident insurance which are established and maintained for the provision of insurance on retired lives, for premium stabilization, or for a combination thereof." (2) RULES FOR CERTAIN CONTINGENCY RESERVES.—Section 810(c) (relating to items taken into account as reserves) is amended by inserting after paragraph (5) the following new paragraph: "(6) Special contingency reserves under contracts of group term life insurance or group health and accident insurance which are established and maintained for the provision of insurance on retired lives, for premium stabilization, or for a combination thereof."

^3 Stat. 125.

(b) CERTAIN DISTRIBUTIONS.—

(1) EXCEPTION FROM DEFINITION OF DISTRIBUTION. SectioU 815(f) (relating to definition of distribution) is amended— 78 Stat. 859; (A) by striking out "or" at the end of paragraph (3); ^' ^*"*- ^^''• (B) by striknig out the period at the end of paragraph (4) and inserting in lieu thereof "; or";

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