Page:United States Statutes at Large Volume 92 Part 3.djvu/261

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2893

(hereinafter referred to as a *GSOC') means a domestic corporation which— "(1) is not a member of an affiliated group (as defined in section 1504), and

26 USC 1504.

"(2) is chartered and organized after December 31, 1978, and before January 1, 1984; "(3) is chartered by an act of a State legislature or as a result of a State-wide referendum; "(A) for the issuance of only 1 class of stocks, "(B) for the issuance of shares only to eligible individuals (as defined in subsection (c)); "(C) for the issuance of at least one share to each eligible individual, unless such eligible individual elects within one year after the date of issuance not to receive such share; "(D) that no share of stock shall be transferable— "(i) by a shareholder other than by will or the laws of descent and distribution until after the expiration of 5 years from the date such stock is issued by the GSOC except where the shareholder ceases to be a resident of the State; "(ii) to any person other than a resident individual of the chartering State; "(iii) to any individual who, after the transfer, would own more than 10 shares of the GSOC; "(E) that such corporation shall qualify as a GSOC under the Internal Revenue Code; "(5) is empowered to invest in properties (but not in properties acquired by it or for its benefit through the right of eminent domain). For purposes of this subsection, section 1504(a) shall be applied by substituting '20 percent' for '80 percent' wherever it appears. "(b) ELECTING GSOC.—For purposes of this subchapter, the term 'electing GSOC means a GSOC which files an election under section 1392 which, under section 1392, is in effect for such taxable year. "(c) ELIGIBLE INDIVIDUALS.—For purposes of subsection (a), the term 'eligible individual' means an individual who is, as of a date specified in the State's enabling legislation for the GSOC, a resident of the chartering State and who remains a resident of such State between that date and the date of issuance. "(d) TREATED AS PRIVATE CORPORATION.—For purposes of this title, a GSOC shall be treated as a private corporation and not as a governmental unit. "(e) STUDY OF GENERAL STOCK OWNERSHIP CORPORATIONS.—The
 * '(4) has a charter providing—

staff of the Joint Committee on Taxation shall prepare a report on the operation and effects of this subchapter relating to GSOC's. An interim report shall be filed within two years after the first GSOC is formed and a final report shall be filed by September 30, 1983. "SEC. 1392. ELECTION BY GSOC.

26 USC 1392.

"(a) ELIGIBILITY.—Except as provided in section 1393, any GSOC 26 USC 1393. may elect, in accordance with the provisions of this section, not to be subject to the taxes imposed by this chapter. "(b) EFFECT.—If a GSOC makes an election under subsection (a) then— "(1) with respect to the taxable years of the GSOC for which such election is in effect, such corporation shall not be subject to the taxes imposed by this chapter and, with respect to such

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