Page:United States Statutes at Large Volume 94 Part 3.djvu/885

 PUBLIC LAW 96-605—DEC. 28, 1980

94 STAT. 3529

subsidiary were the common parent) shall be treated as includible corporations.", (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to qualified investment for taxable years beginning after December 31, 1978. SEC. 225. PARTICIPATION RULES FOR TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN WHICH IS ONLY EMPLOYER-PROVIDED ALTERNATIVE TO INDIVIDUAL RETIREMENT SAVINGS. (a) IN GENERAL.—Subsection (b) of section 410 (relating to eligibility) is amended— (1) by redesignating paragraph (2) as (3), (2) by striking out "paragraph (1)" in paragraph (3) (as so redesignated) and inserting in lieu thereof "paragraphs (1) and (2)", and (3) by inserting after paragraph (1) the following new paragraph: "(2) SPECIAL RULE FOR CERTAIN PLANS.—A trust which is part of a tax credit employees stock ownership plan which is the only plan of an employer intended to qualify under section 401(a) shall not be treated as not a qualified trust under section 401(a) solely because it fails to meet the requirements of paragraph (1) if— "(A) it benefits 50 percent or more of all the employees who are eligible under the plan (excluding employees who have not satisfied the minimum age and service requirements, if any, prescribed by the plan as a condition of participation), and "(B) the sum of the amounts allocated to each participant's account for the year does not exceed 2 percent of the compensation of that participant for the year."

26 USC 409A ^°^^-

26 USC 410.

26 USC 401.

(b) CONFORMING AMENDMENTS.—

(1) The last sentence of section 401(a)(4) is amended by striking out "section 4100))(2)(A)" and inserting in lieu thereof "section 410(b)(3)(A)". (2) Subparagraph (B) of section 401(d)(3) is amended— (A) by striking out "section 410(b)(2)(A)" and inserting in lieu thereof "section 410(b)(3)(A)", and (B) by striking out "section 41003)(2)(C)" and inserting in lieu thereof "section 410(b)(3)(C)". (3) The last sentence of section 408(k)(2) is amended by striking out "section 410(b)(2)" and inserting in lieu thereof "section 410(b)(3)". (4) Clause (i) of section 408(k)(3)(B) is amended by striking out "section 410(b)(2)" and inserting in lieu thereof "section 410(b)(3)". (c) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to plan years beginning after December 31, 1980. SEC. 226. APPLICATION OF CASH OR DEFERRED ARRANGEMENT RULES TO CAFETERIA PLANS. (a) IN GENERAL.—Paragraph (2) of section 125(d) (relating to deferred compensation plans excluded) is amended by adding at the end thereof the following: "The preceding sentence shall not apply in the case of a profit-sharing or stock bonus plan which includes a qualified cash or deferred arrangement (as defined in section 401(k)(2)) to the extent of amounts which a covered employee may elect to have the employer pay as contributions to a trust under such plan on behalf of the employee."

26 USC 401.

26 USC 408.

26 USC 401 note.

26 USC 125.

26 USC 401.

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