Page:United States Statutes at Large Volume 95.djvu/313

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 287

Subtitle C—Reinvestment of Dividends in Public Utilities SEC. 321. ENCOURAGEMENT OF REINVESTMENT OF DIVIDENDS IN THE STOCK OF PUBLIC UTILITIES. (a) AMENDMENT OF SECTION 305.—Section 305 (relating to distribu-

tions of stock and stock rights) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: "(e) DIVIDEND REINVESTMENT IN STOCK OF Puenc UTILITIES.— "(1) IN GENERAL.—Subsection (b) shall not apply to any qualified reinvested dividend. "(2) QUALIFIED REINVESTED DIVIDEND DEFINED.—For purposes of this subsection, the term 'qualified reinvested dividend' means— "(A) a distribution by a qualified public utility of shares of its qualified common stock to an individual with respect to the common or preferred stock of such corporation pursuant to a plan under which shareholders may elect to receive dividends in the form of stock instead of property, but "(B) only if the shareholder elects to have this subsection apply to such shares.

26 USC 305.

"(3) QUALIFIED PUBLIC UTILITY DEFINED.—

"(A) IN GENERAL.—For purposes of this subsection, the term 'qualified public utility' means, for any taxable year of the corporation, a domestic corporation which, for the 10year period ending on the day before the beginning of the taxable year, acquired public utility recovery property having a cost equal to at least 60 percent of the aggregate cost of all tangible property described in section 1245(a)(3) ^^te, p. 2i8. (other than subparagraphs (C) and (D) thereof) acquired by the corporation during such period. "(B) SPECIAL RULES.—For purposes of subparagraph (A)— "(i) all members of an affiliated group shall be treated as one corporation, "(ii) a successor corporation shall take into account the acquisitions of its predecessor, and "(iii) a new corporation to which clause (ii) does not apply shall substitute its period of existence for the 10year period set forth in subparagraph (A). "(C) DEFINITIONS.—For purposes of this paragraph— "(i) AFFILIATED GROUP.—The term 'affiliated group' has the meaning given to such term by subsection (a) of section 1504 (determined without regard to subsection (b) of section 1504). "(ii) PUBLIC UTILITY RECOVERY PROPERTY.—The term 'public utility recovery property' means public utility property (within the meaning of section 167(1)(3)(A)) which is recovery property which is 10-year property or 15-year public utility property (within the meaning of section 168), except that any requirement that the ^«^e. P 204. property be placed in service after December 31, 1980, shall not apply. "(4) QUALIFIED COMMON STOCK DEFINED.—

"(A) IN GENERAL.—For purposes of this subsection, the term 'qualified common stock means authorized but unissued common stock of the corporation—

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