Page:United States Statutes at Large Volume 92 Part 3.djvu/222

 92 STAT. 2854

26 USC 856 note.

PUBLIC LAW 95-600—NOV. 6, 1978 extension shall not extend the grace period beyond the date which is 6 years after the date such trust acquired such property." (d) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) shall apply to taxable years ending after the date of the enactment of this Act. The amendment made by subsection (c) shall apply to extensions granted after the date of the enactment of this Act with respect to periods beginning after December 31, 1977. SEC. 364. CONTRIBUTIONS IN AID OF CONSTRUCTION.

26 USC 118.

26 USC 7701.

26 USC 118 note-

(a) IN GENERAL.—Section 118(b) (relating to contributions in aid of construction) is amended— (1) by striking out "water" in the portion of paragraph (1) preceding subparagraph (A) thereof and inserting in lieu thereof "electric energy, gas (through a local distribution system or transportation by pipeline), water,"; (2) by striking out "water" in paragraph (1)(B) and inserting in lieu thereof "electric energy, gas, steam, water,"; (3) by striking out "water" in paragraph (2)(A)(ii) and by inserting in lieu thereof "electric energy, gas, steam, water,'; (4) by striking out "property" in paragraph (3)(A) and Jt)y inserting in lieu thereof "line" and by striking out "a main water or sewer line" in paragraph (3)(A) and by inserting in lieu thereof "an electric line, a gas main, a steam line, or a main water or sewer line"; and (5) by amending paragraph (3)(C) to read as follows: "(C) REGULATED PUBLIC UTILITY.—The term 'regulated public utility' has the meaning given such term by section 7701(a)(33); except that such term shall not include any such utility which is not required to provide electric energy, gas, water, or sewerage disposal services to members of the general public (including in the case of a gas transmission utility, the provision of gas services by sale for resale to the general public) in its service area." (b) EFFECTIVE DATE.—The amendments made by this section shall apply to contributions made after January 31, 1976. SEC. 365. LIABILITIES OF CONTROLLED CORPORATIONS.

26 USC 357.

(a) IN GENERAL.—Subsection (c) of section 357 (relating to assumption of liability) is amended by adding at the end thereof the following new paragraph: "(3) CERTAIN LiABiuTiES EXCLUDED.— "(A) IN GENERAL.—If—

26 USC 351.

26 USC 736.

"(i) the taxpayer's taxable income is computed under the cash receipts and disbursements method of accounting, and "(ii) such taxpayer transfers, in an exchange to which section 351 applies, a liability which is either— "(I) an account payable payment of which would give rise to a deduction, or "(II) an amount payable which is described in section 736(a), then, for purposes of paragraph (1), the amount of such liability shall be excluded in determining the amount of liabilities assumed or to which the property transferred is subject. "(B) EXCEPTION.—Subparagraph (A) shall not apply to any liability to the extent that the incurrence of the liability

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