Page:United States Statutes at Large Volume 95.djvu/317

 PUBLIC LAW 97-34—AUG. 13, 1981

95 STAT. 291

sentence, the term 'controlled group of corporations' has the meaning assigned to such term by section 1563(a) (deter- 26 USC 1563. mined without regard to subsections (a)(4) and (e)(3)(C) of such section). "(2) CARRYBACK AND CARRYOVER OF UNUSED CREDIT.— "(A) ALLOWANCE OF CREDIT.—If the amount of the

credit determined under this section for any taxable year exceeds the limitation provided under paragraph (1)(A) for such taxable year (hereinafter in this paragraph referred to as the 'unused credit year*), such excess shall be— "(i) an employee stock ownership credit carryback to each of the 3 taxable years preceding the unused credit year, and "(ii) an employee stock ownership credit carryover to each of the 15 taxable years following the unused credit year, and shall be added to the amount allowable as a credit by this section for such years. If any portion of such excess is a carryback to a taxable year ending before January 1, 1983, this section shall be deemed to have been in effect for such taxable j^ear for purposes of allowing such carryback as a credit under this section. The entire amount of the unused credit for an unused credit year shall be carried to the earliest of the 18 taxable years to which (by reason of clauses (i) and (ii)) such credit may be carried, and then to each of the other 17 taxable years to the extent that, because of the limitation contained in subparagraph (B), such unused credit may not be added for a prior taxable year to which such unused credit may be carried. "(B) LIMITATION.—The amount of the unused credit which may be added under subparagraph (A) for any preceding or succeeding taxable year shall not exceed the amount by which the limitation provided under paragraph (1)(A) for such taxable year exceeds the sum of— "(i) the credit allowable under this section for such taxable year, and "(ii) the amounts which, by reason of this paragraph, are added to the amount allowable for such taxable year and which are attributable to taxable years preceding the unused credit year. "(3) CERTAIN REGULATED COMPANIES.—NO credit shall be allowed under this section to a taxpa>^er if— "(A) the taxpayer's cost of service for ratemaking purposes or in its regulated books of account is reduced by reason of any portion of such credit which results from the transfer of employer securities or cash to a tax credit employee stock ownership plan which meets the requiremente of section 409A; "(B) the base to which the taxpayer's rate of return for ratemaking purposes is applied is reduced by reason of any portion of such credit which results from a transfer described in subparagraph (A) to such employee stock ownership plan; or ' ((j) any portion of the amount of such credit which results from a transfer described in subparagraph (A) to such employee stock ownership plan is treated for ratemaking purposes in any way other than as though it had been contributed by the taxpayer's common shareholders.

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