Page:United States Statutes at Large Volume 96 Part 1.djvu/533

 PUBLIC LAW 97-248—SEPT. 3, 1982

96 STAT. 491

is acquired, stock constituting control of such b a n k is transferred to a BHC in connection with its formation, "(ii) incident to the formation of the BHC the r e is a distribution of property described in subsection (a), and "(iii) the shareholders of the BHC who receive distributions of such property do not have control of such BHC, then, subsection (a) shall not apply to any securities received by a qualified minority shareholder incident to the formation of such BHC. "(D) DEFINITIONS A N D SPECIAL RULE.—For

purposes

of

subparagraph (C) and this subparagraph — "(i) QUALIFIED

MINORITY

SHAREHOLDER.—The

term

'qualified minority shareholder' means any shareholder who owns less than 10 percent (in value) of the stock of the BHC. For purposes of the preceding sentence, the rules of paragraph (3) of subsection (c) shall apply. "(ii) B H C — The term ' B H C means a b a n k holding company (within the m e a n i n g of section 2(a) of the Bank Holding Company Act of 1956).

12 USC 1841.

"(iii) SPECIAL RULE I N CASE OF BHC'S FORMED BEFORE

1985.—In the case of a BHC which is formed before 1985, clause (i) of subparagraph (C) shall not apply." (B) Subsection (f) of section 351 (relating to cross references) is amended by adding a t the e n d thereof the following new paragraph:

26 USC 351.

"(5) For coordination of this section with section 304, see section 304(b)(3)." (2) APPLICATION OF SECTION 3 0 4 WHERE STOCK IS ACQUIRED I N THE TRANSACTION.—

(A) Subsection (c) of section 304 is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following new paragraph: "(2) STOCK ACQUIRED I N THE TRANSACTION.—For purposes of

subsection (a)(1)— "(A) GENERAL RULE.—Where 1 or more persons in control of the issuing corporation transfer stock of such corporation in exchange for stock of the acquiring corporation, the stock of the acquiring corporation received shall be t a k e n into account in determining w h e the r such person or persons a r e in control of the acquiring corporation. "(B) DEFINITION OF CONTROL G R O U P. — W h e r e 2 or more

persons in control of the issuing corporation transfer stock of such corporation to the acquiring corporation and, after the transfer, the transferors a r e in control of the acquiring corporation, the person or persons in control of each corporation shall include each of the persons who so transfer stock." (B) Paragraph (3) of section 304(c) (as redesignated by paragraph (D) is amended by striking out " paragraph (1)" and inserting in lieu thereof "this section". (3) DETERMINATION OF EARNINGS AND P R OF I T S. — Subparagraph

(A) of section 304(b)(2) (relating to a m o u n t constituting dividend) is amended to read as follows:

26 USC 304.

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