Page:United States Statutes at Large Volume 94 Part 3.djvu/884

 94 STAT. 3528

PUBLIC LAW 96-605—DEC. 28, 1980

Subtitle B—Amendments Relating to Employee Stock Ownership Plans 26 USC 401.

26 USC 409 A. 26 USC 401 note.

SEC. 221. CASH DISTRIBUTION OPTION AND PUT OPTION FOR STOCK BONUS PLANS. (a) IN GENERAL.—Subsection (a) of section 401 (relating to requirements for qualification) is amended by inserting immediately before the last sentence thereof the following n e w paragraph: "(23) A stock bonus plan which otherwise m e e t s the requirements of this section shall not be considered to fail to m e e t the requirements of t h i s section because it provides a cash distribution option to part i c i p a n t s if that option meets the requirements of section 409 A(h)(2). '^ (b) EFFECTIVE D A T E. — The amendment m a d e by subsection (a) shall apply with respect to plan year s beginning after December 31, 1980.

SEC. 222. LIMITATION ON ANNUAL ADDITIONS TO PARTICIPANT ACCOUNTS UNDER EMPLOYEE STOCK OWNERSHIP PLANS. 26 USC 415. (a) IN GENERAL. — Subparagraph (A) of section 415(c)(6) (relating to special limitation for employee stock o w n e r s h i p plan) is amended by inserting ", or purchased with cash contributed," after " c o n t r i b u t e d '. 26 USC 415 note. (b) EFFECTIVE D A T E. — The amendment m a d e by subsection (a) shall apply with respect to year s beginning after December 31, 1980. SEC. 223. VALUATION OF EMPLOYER SECURITIES IN TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLANS. 26 USC 48. (a) IN GENERAL.—Clause (i) of section 48(n)(6)(B) (defining value for employer securities) is amended by striking out " the d u e date for filing the r e t u r n for the tax a b l e year (determined with regard to extensions)" and inserting in lieu thereof " the date on which the securities a r e contributed to the p l a n ". 26 USC 48 note. Qy) EFFECTIVE D A T E. — The amendments m a d e by subsection (a) shall apply w i t h respect to tax a b l e year s beginning after December

31, 1980.

26 USC 409A.

SEC. 224. PARTICIPATION OE SUBSIDIARY CORPORATION IN TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN. (a) IN GENERAL. — Paragraph (4) of section 409A(1) (defining controlled group of corporations) is amended — (1) by striking o u t the caption and inserting in lieu thereof "(4) APPLICATION TO CONTROLLED GROUP OF CORPORATIONS.—", (2) by striking out " C O M M O N PARENT MAY O W N O N L Y " in

the

caption of subparagraph (B) and inserting in lieu thereof " W H E R E COMMON PARENT OWNS AT LEAST", and

(3) by adding a t the end thereof the following n e w subparagraph: "(C) W H E R E COMMON PARENT OWNS lOO PERCENT OF FIRST

TIER SUBSIDIARY.—For purposes of subparagraph (A), if the

26 USC 1563.

common p a r e n t owns directly stock possessing all of the voting power of all classes of stock and all of the nonvoting stock, in a first tier subsidiary, and if the first tier subsidiary owns directly stock possessing a t least 50 percent of the voting power of all classes of stock, and a t least 50 percent of each class of nonvoting stock, in a second tier subsidiary of the common p a r e n t, such second tier subsidiary (and all other corporations below it in the chain which would m e e t the 80 percent test of section 1563(a) if the second tier

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