Page:United States Statutes at Large Volume 92 Part 3.djvu/162

 92 STAT. 2794

26 USC 46.

PUBLIC LAW 95-600—NOV. 6, 1978 "(6) BASIC ESOP PERCENTAGE.—The term 'basic ESOP percentage' means the 1-percent ESOP percentage set forth in section 46(a)(2)(E)(i). "(7) MATCHING ESOP PERCENTAGE.—The term 'matching ESOP percentage' means the additional ESOP percentage (not to exceed ¥2 of 1 percent) set forth in section 46(a)(2)(E)(ii)." (c) ASSESSABLE PENALTIES.—

(1) IN GENERAL.—Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: 26 USC 6699.

26 USC 409. 26 USC 48.

"SEC. 6699. ASSESSABLE PENALTIES RELATING TO ESOP.

"(a) IN GENERAL.—If a taxpayer who has claimed an ESOP credit for any taxable year— "(1) fails to satisfy any requirement provided by section 409A, or "(2) fails to make any contribution which is required under section 48(n) within the period required for making such contribution, the taxpayer shall pay a penalty in an amount equal to the amount involved in such failure. "(b) No PENALTY WHERE THERE Is TIMELY CORRECTION OF FAIL-

URE.—Subsection (a) shall not apply with respect to any failure if the employer corrects such failure (as determined by the Secretary) within 90 days after the Secretary notifies him of such failure. "(c) AMOUNT INVOLVED DEFINED.—

"(1) IN GENERAL.—For purposes of this section, the term 'amount involved' means an amount determined by the Secretary. "(2) MAXIMUM AND MINIMUM AMOUNT.—The amount determined under paragraph (1)— "(A) shall not exceed the amount determined by multiplying the qualified investment of the employer for the taxable year to which the failure relates by the ESOP percentage claimed by the employer for such year, and "(B) shall not be less than the product of one-half of 1 percent of the amount referred to in subparagraph (A), multiplied by the number of months (or parts thereof) during which such failure continues." (2) CLERICAL AMENDMENT.—The table of sections for such subchapter B is amended by adding at the end thereof the following new item: "Sec. 6699. Assessable penalties relating to ESOP." 26 USC 56.

26 USC 46.

(d) REGULAR TAX DEDUCTION FOR PURPOSES OF THE MINIMUM TAX DETERMINED WITHOUT REGARD TO ESOP PERCENTAGE.—Subsection

(c) of section 56 (defining regular tax deduction) is amended by adding at the end thereof the following new sentence: "For purposes of the preceding sentence, the amount of the credit allowable under section 38 shall be determined without regard to the ESOP percentage set forth in section 46(a)(2)(E)." (e) ESOP CREDIT EXTENDED FOR 3 YEARS.—Subparagraph (E) of section 46(a)(2) (relating to amount of business investment credit for current taxable year) is amended by striking out "and ending on December 31, 1980," each place it appears and inserting in lieu thereof "December 31, 1983".

�