PUBLIC LAW 96-613, 94 STAT. 3579

96TH CONGRESS, H.R. 7171 DECEMBER 28, 1980
An Act To make certain miscellaneous changes in the tax laws.

Be enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. ANNUITY CONTRACTS PURCHASED BY THE UNIFORMED SERVICES UNIVERSITY OF THE HEALTH SCIENCES.

(a) In General.-An annuity contract purchased by the Uniformed Services University of the Health Sciences for any employee who is a member of the civilian faculty or staff of such university shall, for purposes of section 403(b) of the Internal Revenue Code of 1954, // 26 USC 403. // be treated as an annuity contract purchased for an employee by an employer described in section 501(c)(3) of such Code // 26 USC 501. // which is exempt from tax under section 501(a) of such Code.

(b) Effective Date.-Subsection (a) shall apply to service after December 31, 1979, in taxable years ending after such date.

SEC. 2. RETIREMENT-REPLACEMENT-BETTERMENT METHOD OF DEPRECIATION.

(a) In General.-Section 167 of the Internal Revenue Code of 1954 // 26 USC 167. // (relating to allowance for depreciation) is amended by redesignating subsection (r) as subsection (s) and by inserting after subsection (q) the following new subsection:

"(r) Retirement-Replacement-Betterment Method.-In the case of railroad track used by a common carrier by railroad (including a railroad switching company or a terminal company), the term 'reasonable allowance' as used in subsection (a) includes an allowance for such tract computed under the retirement-replacement-betterment method.".

(b) Effective Date.-The amendments made by subsection (a) // 26 USC 167 // shall apply with respect to taxable years ending after December 31, 1953.

SEC. 3. TREATMENT OF CERTAIN RAILROAD STOCK FOR PURPOSES OF CONSOLIDATED RETURN REGULATIONS.

(a) In General.-For purposes of the consolidated return regulations prescribed under section 1502 of the Internal Revenue Code of 1954, // 26 USC 1502. // if the determination of whether or not there has been a deemed disposition of stock in a transferor railroad (as defined in section 374(c)(5)(B) of such Code) // 26 USC 374. // depends on a determination of final value by the special court under the Regional Rail Reorganization Act of 1973, // 45 USC 701 // that deemed disposition shall not be treated as occurring before the earlier of--,

(1) the date on which such determination becomes final, or

(2) the first date on which there is an actual disposition of the stock or a deemed disposition not described above.

(b) Effective Date.-Subsection (a) shall apply to taxable years ending after March 31, 1976.

SEC. 4. // 26 USC 374 // RESTORATION OF CERTAIN NET OPERATING LOSS CARRYOVERS TO RAILROADS IN CONRAIL PROCEEDINGS WHERE OTHER MEMBERS OF CONSOLIDATED GROUP HAD INCOME BECAUSE OF STOCK DISPOSITION.

(a) In General.-For purposes of subsection (e) of section 374 of the Internal Revenue Code of 1954 // 26 USC 374. // (relating to use of expired net operating loss carryovers to offset income arising from certain railroad reorganization proceedings), if--,

(1) subparagraphs (A) and (B) of paragraph (1) of such subsection are satisfied with respect to a corporation,

(2) such corporation had a net operating loss for a taxable year which would have satisfied the requirements of clause (i) of subparagraph (C) of such paragraph (1) but for the fact that such net operating loss was used to reduce the income of an affiliated group of corporations which filed a consolidated return, and

(3) any portion of the amount so used was included in an excess loss account which was required to be restored to the income of a member or members of the affiliated group (or would be required to be so restored but for an election under Regulation $1.1502-19(a)(6)),

// 26 CFR 1.1502-19. // then an amount equal to the restoration amount shall be treated as meeting the requirements of subparagraph (C) of such paragraph (1).

(b) Restoration Amount Defined.--,

(1) In General.-For purposes of subsection (a), the term "restoration amount" means, with respect to the net operating loss for any taxable year, an amount equal to the sum of--,

(A) so much of the portion referred to in subsection

(a)(3) as

was required to be treated as ordinary income, and

(B) an amount equal to so much of such portion as was required to be treated as long-term capital gain,

multiplied

by the capital gain conversion fraction.

(2) Capital gain conversion fraction.-For purposes of paragraph (1), the capital gain conversion fraction is a fraction--,

(A) the numerator of which is the rate of tax set forth

in

section 1201(a)(2) of such Code

// 26 USC 1201. //

for the taxable year the

portion was required to be included in income, and

(B) the denominator of which is the highest rate of tax

set

forth in section 11(b) of such Code

// 26 USC 11. //

for such taxable year.

(3) FIFO rule for additions to excess loss account.-For purposes of this subsection, the amount in any excess loss account at the time of restoration (and the ordinary income portion of the restoration) shall be treated as attributable to net operating losses in the order of the years in which the respective net operating losses arose.

(4) Capital gain treatment.-For purposes of paragraph (1), any amount to which an election under Regulation $1.1502-19(a)(6)

// 26 CFR 1.1502-19. //

applies shall be treated as long-term capital gain.

(c) Effective Date.-This section shall apply to restorations occurring after March 31, 1976.

SEC. 5. PREVENTION OF ABUSE OF CERTAIN PENSION PLAN PROVISIONS THROUGH THE USE OF SEPARATE CORPORATIONS OR OTHER ORGANIZATIONS.

(a) In General.-Section 414 // 26 USC 414. // (relating to definitions and special rules relating to pension plan, etc.) is amended by adding at the end thereof the following new subsection:

"(m) Employees of an Affiliated Service Group.--,

"(1) In general.-For purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer.

"(2) Affiliated service group.-For purposes of this subsection, the term 'affiliated service group' means a group consisting of a service organization (hereinafter in this paragraph referred to as the 'first organization') and one or more of the following:

"(A) any service organization which--, "(i) is a shareholder or partner in the first

organization,

and

"(ii) regularly performs services for the first

organization

or is regularly associated with the first organization

in performing services for third persons, and

"(B) any other organization if--, "(i) a significant portion of the business of such

organization

is the performance of services (for the first

organization, for organizations described in

subparagraph

(A), or for both) of a type historically performed in

such service field by employees, and

"(ii) 10 percent or more of the interests in such organization is held by persons who are officers, highly compensated employees, or owners of the first

organization

or an organization described in subparagraph (A).

"(3) Service organizations.-For purposes of this subsection, the term 'service organization' means an organization the principal business of which is the performance of services.

"(4) Employee benefit requirements.-For purposes of this subsection, the employee benefit requirements listed in this paragraph are--,

"(A) paragraphs (3), (4), (7), and (16) of

section 401(a),

// 26 USC 401. //

"(B) sections 408(k), 410, 411, and 415,

// 26 USC 408, 410, 411, 415. //

"(C) section 105(h), and

// 26 USC 105. //

"(D) section 125.

// 26 USC 125. //

"(5) Other definitions.-For purposes of this subsection--,

"(A) Organization defined.-The term 'organization' means a corporation, partnership, or other organization. "(B) Ownership.-In determining ownership, the

principles

of section 267(c)

// 26 USC 267. //

shall apply.

"(6) Prevention of avoidance.-The Secretary shall prescribe such regulations as may be necessary to prevent the avoidance with respect to service organizations, through the use of separate organizations, of any employee benefit requirement listed in paragraph(4)."

(b) Technical Amendments.--,

(1) Paragraph (8) of section 105(h)

// 26 USC 105. //

(relating to amount paid to highly compensated individuals under a discriminatory self-insured medical expense reimbursement plan) is amended--,

(A) by striking out "subsection (b) or (c) of

section 414" and

inserting in lieu thereof "subsection (b), (c), or (m)

of section

414", and

(B) by striking out " CONTROLLED GROUPS" in the

paragraph

heading and inserting in lieu thereof " CONTROLLED

GROUPS,

ETC.".

(2) Paragraph (4) of section 125(g)

// 26 USC 125. //

(relating to special rules for cafeteria plans) is amended--,

(A) by striking out "subsection (b) or (c) of

section 414" and

inserting in lieu thereof "subsection (b), (c), or (m)

of section

414", and

(B) by striking out " CONTROLLED GROUPS" in the

paragraph

heading and inserting in lieu thereof " CONTROLLED

GROUPS,

ETC.".

(c) Effective Dates.--, // 26 USC 414 //

(1) In General.-Except as provided in paragraph (2), the amendments made by this section shall apply to plan years ending after November 30, 1980.

(2) Plans in existence on November 30, 1980.-In the case of a plan in existence on November 30, 1980, the amendments made by this section shall apply to plan years beginning after November 30, 1980.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1050 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1032 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

June 17, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to certain Senate amendments, to others with amendments and disagreed to Senate amendment No. 9; Senate receded from its amendment No. 9 and agreed to remaining House amendments.

PUBLIC LAW 96-612, 94 STAT. 3575

96th CONGRESS, S. 2261 DECEMBER 28, 1980
An Act To provide for the establishment of the Indiana Dunes

National Lakeshore, and for

other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Act entitled " An Act to provide for the establishment of the Indiana Dunes National Lakeshore, and for other purposes", approved November 5, 1966 (80 Stat. 1309), as amended (16 U.S.C. 460u), is further amended as follows:

(1) A new section is added at the end thereof to read as follows:

" Sec. 20. // 16 USC 460u-20. // (a) The Indiana Dunes National Lakeshore is hereby dedicated to the memory of Paul H. Douglas in grateful recognition of his leadership in the effort to protect, preserve, and enhance the natural,scientific, historic, and recreational value of the lakeshore for the use, enjoyment, and edification of present and future generations.

"(b) To further accomplish the purposes of subsection (a) of this section, the Secretary of the Interior shall designate the west unit of the lakeshore as the ' Paul H. Douglas Ecological and Recreational Unit' and shall, subject to appropriations being granted, design and construct a suitable structure or designate an existing structure within the lakeshore to be known as the ' Paul H. Douglas Center for Environmental Education' which shall provide facilities designed primarily to familiarize students and other visitors with, among other things: (1) the natural history of the lakeshore and its association with the natural history of the Great Lakes region: (2) the evolution of human activities in the area; and (3) the historical features which led to the establishment of the lakeshore by the Congress of the United States.

"(c) To inform the public of the contributions of Paul H. Douglas to the creation of the lakeshore, the Secretary of the Interior shall provide such signs, markers, maps, interpretive materials, literature, and programs as he deems appropriate.".

(2) Section 1 of the Act

// 16 USC 460u. //

is amended by changing " September 1976 and bearing the number 626 - 91007" to " December 1980, and bearing the number 626 - 91014".

(3) Section 2(a) of the Act

// 16 USC 460u-1. //

is amended by adding the following new sentence at the end thereof: " The Secretary is expressly authorized to acquire by donation, purchase with donated or appropriated funds, or exchange, lands or interests therein which are owned for school or educational purposes by a State or a political subdivision thereof.".

(4) Section 2(b) of the Act is amended by changing the phrase "section 10" to section 9".

(5) In the first sentence of section 4 of the Act,

// 16 USC 460u-3. //

preceding the word " February" insert: " January 1, 1981 or, in the case of improved property located within the boundaries delineated on a map identified as ' Boundary Map, Indiana Dunes National Lakeshore', dated September 1976 and bearing the number 626 - 91007, before".

(6) The first sentence of section 5(a) of the Act

// 16 USC 460u-5. //

is amended to read as follows: " Except for owners of improved property within the area on the map referredc to in the first section of this Act as area II-B, any owner or owners of record of improved property may retain a right of use and occupancy of said improved property for noncommercial residential purposes for a term (1) ending on his or her death or the death of his or her spouse, whichever occurs last, or (2) for a fixed term not to extend beyond September 30, 2010, or such lesser term as the owner or owners may elect at the time of acquisition by the Secretary: Provided, That the retention of a retained right under clause numbered (1) shall only be available to homeowners of record as of October 1, 1980, who have attained the age of majority as of that date and make a bona fide written offer not later than October 1, 1985, to sell to the Secretary.".

(7) Section 5 of the Act is amended by adding a new subsection (c) as follows:

"(c) With respect to improved properties acquired priod to the enactment of this subsection and upon which a valid existing right of use and occupancy has been reserved for a term of not more than twenty years, the Secretary may, in his discretion, extend the term of such retained right for a period of not more than nine years upon receipt of payment prior to September 30, 1983, from the holder of the retained right. The amount of such payment shall be equivalent to the amount discounted from the purchase price paid by the Secretary for the identical period of time under the terms of the original sale adjusted by a general index adopted by the Secretary reflecting overall value trends within Indiana Dunes National Lakeshore between the time of the original sale and the time of the retained right of extension offered by this subsection.".

(8) Section 7(a) of the Act

// 16 USC 460u-79 //

is amended by changing "ten years after the date of establishment of the national lakeshore pursuant to this Act" to "on September 30, 1985".

(9) Section 7(b) of the Act is amended as follows:

(A) by striking out "eleven members" and inserting in

lieu

thereof "thirteen members";

(B) by striking out "one member who is a year-round resident" in clause (4) and inserting in lieu thereof

"two

members who are year-round residents"; and

(C) by striking out "one member who is a year-round resident" in clause (7) and inserting in lieu thereof

"two

members who are year-round residents".

(10) Section 9 of the Act

// 16 USC 460u-9. //

is amended as follows:

(A) in the first sentence, change "$9,440,000 for

development"

to "$11,000,000 for development: Provided, That not

more than $500,000 of said amount may be appropriated

for

the development of the Paul H. Douglas Environmental

Deucation Center authorized pursuant to section 20 of

this

Act."; and

(B) at the end thereof, add a new paragraph as follows:

" In addition to any sums heretofore authorized for the acquisition of lands and interests in lands pursuant to the provisions of this Act, there are further authorized to be appropriated an additional $3,120,000.".

(11) A new section 21 is added to the Act as follows:

" Sec. 21. // 16 USC 460u-21. // (a) The Secretary in consultation with the Secretary of Transportation, shall conduct a study of various modes of public access into and within the lakeshore which are consistent with the preservation of the lakeshore and conservation of energy by encouraging the use of transportation modes other than personal motor vehicles.

"(b) In carrying out the study, the Secretary shall utilize to the greastest extent practicable the resources and facilities of the organizations designated as clearinghouses under title IV of the Intergovernmental Cooperation Act of 1968 // 42 USC 4231. // as implemented by Office of Management and Budget Circular A-95, and which have comprehensive planning responsibilities in the regions where the lakeshore is located, as well as any other agencies or organizations which the Secretary may designate. The Secretary shall make provision for timely and substantive consultations with the appropriate agencies of the States of Indiana and Illinois, local elected officials, and the general public in the formulation and implementation of the study.

"(c) The study shall address the adequacy of access facilities for members of the public who desire to visit and enjoy the lakeshore. Consideration shall be given to alternatives for alleviating the dependence on automobile transportation. The study of public transportation facilities shall cover the distance from cities of thirty-five thousand population or more within fifty miles of the lakeshore.

"(d) the study shall include proposals deemed necessary to assure equitable visitor access and public enjoyment by all segments of the population, including those who are physically or economically disadvantaged. It shall provide for retention of the natural, scenic, and historic values for which the lakeshore was established, and shall propose plans and alternatives for the protection and maintenance of these values as they relate to transportation improvements.

"(e) The study shall examine proposals for the renovation and preservation of a portion of the existing South Shore Railroad passenger car fleet. The study shall consider the historic value of the existing rolling stock and its role in transporting visitors into and within the lakeshore.

"(f) The study shall present alternative plans to improve, construct, and extend access roads, public transportation, and bicycle and pedestrian trails. It shall include cost estimates of all plans considered in this study, and shall discuss existing and proposed sources of funding for the implementation of the recommended plan alternatives.

"(g) The study shall be completed and presented to the Congress within two complete fiscal years from the effective date of this provision.

"(h) Effective October 1, 1981, there is hereby authorized to be appropriated not to exceed $200,000 for this study.".

(12) A new section 22 is added to the Act as follows:

" Sec. 22. // 26 USC 460u-22. // In exercising his authority to acquire property under this Act, the Secretary shall give prompt and careful consideration to any offer made by an individual owning property within the lakeshore to sell such property, if such individual notifies the Secretary in writing that the continued ownership of such property is causing, or would result in, undue hardship.".

(13) A new section 23 is added to the Act as follows:

" Sec. 23. // 16 USC 460u-23. // (a) The Secretary may acquire only such interest in that portion of area VII-A which is described in subsection (b) as the Secretary determines is necessary to assure public access over said portion of area VII-A.

"(b) The portion of area VII-A, as designated on the map referred to in section 1, to which subsection 1, to which subsection (a) applies is a parcel of land bounded--,

"(1) on the east by a line three hundred feet east of the electrical transmission line crossing area VII-A on January 1, 1979;

"(2) on the west by a line fifty feet west of such electrical transmission line; and

"(3) on the north and south by the northern and southern boundaries, respectively, of area VII-A.

"(c) Area VII-A includes the bed of the railroad tracks forming the northern and northwestern boundaries of this area and extends to the northern edge of the bed of the railroad tracks forming the southern boundaries of this area.

"(d) Area I-D includes the bed of the railroad tracks along the northern boundary of this area.

"(e) The area designated as area VII-C on the map referred to in section 1 does not include approximately 1.3 acres of land on which the Linde Air Products plant is situated, nor does it include approximately 1 acre of land on which the Old Union Station building and the adjacent REA building are situated. Except as provided in the foregoing sentence, area VII-C extends to, but does not include, the beds of the railroad tracks forming the northern and southern boundaries of such area.".

Sec. 2. Authorizations of moneys to be appropriated this Act // 16 USC 460u // shall be effective on October 1, 1981. Notwithstanding any other provision of this Act, authority to enter into contracts, to incur obligations, or to make payments under this Act shall be effective only to the extent, and in such amounts, as are provided in advance in appropriation Acts.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

SENATE REPORT No. 96 - 1005 (Comm. on Energy and Natural Resources).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Sept. 30, considered and passed Senate.

Dec. 11, considered and passed House, amended.

Dec. 12, Senate agreed to House amendments.

PUBLIC LAW 96-611, 94 STAT. 3566

96th CONGRESS, H.R. 8406 DECEMBER 28, 1980
An Act To amend title XVIII of the Social Security Act to

provide for medicare coverage of

pneumococcal vaccine and its administration.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a)(1) section 1861(s) of the Social Security Act // 42 USC 1395x. // is amended--,

(A) by redesignating paragraphs (10) through (13) as paragraphs (11) through (14), respectively;

(B) by striking out "and" at the end of paragraph (8);

(C) by striking out the period at the end of paragraph (9) and inserting in lieu thereof "; and"; and

(D) by inserting after paragraph (9) the following paragraph:

"(10) pneumococcal vaccine and its administration.".

(2) Section 1864(a) of such Act // 42 USC 1395aa. // is amended by striking out "paragraphs (10) and (11) of section 1861(s)" and inserting in lieu thereof "paragraphs (11) and (12) of section 1861( s)".

(3) Section 1862(a) of such Act // 42 USC 1395y. // is amended--,

(A) by inserting ", or, in the case of items and services described in section 1861(s)(10), which are not reasonable and necessary for the prevention of illness" before the semicolon at the end of paragraph (1), and

(B) by inserting "(except as otherwise allowed under section 1861(s)(10) and paragraph (1))" in paragraph (7) after "immunizations".

(b)(1) Section 1833(a) of such Act // 42 USC 1395l. // (as amended by sections 932(a)(1)(B), 934(d), and 942 of the Medicare and Medicaid Amendments of 1980) is amended--,

(A) by striking out "and" before "(G)" in paragraph (1);

(B) by inserting at the end of paragraph (1) the following: "and (H) with respect to items and services described in section 1861(s)(10), the amounts paid shall be 100 percent of the reasonable charges for such items and services,";

(C) by inserting "and to items and services described in section 1861(s)(10)" in paragraph (2)(A) after "home health services"; and

(D) by inserting "(other than for items and services described in section 1861(s)(10))" in paragraph (3) after "but in no case may the payment for such services".

(2) The first sentence of section 1833(b) of such Act is amended by inserting "(A)" in clause (2) after "expenses incurred", and by inserting before the comma at the end of such clause the following: ", or (B) for items and services described in section 1861(s)(10)".

(3) Subparagraph (A) of section 1861(aa)(1) of such Act is amended by inserting before the comma at the end the following: "and items and services described in section 1861(s)(10)".

(4) Section 1866(a)(2)(A) of such Act // 42 USC 1395cc. // is amended by adding at the end the following new sentence: " A provider of services may not impose a charge under clause (ii) of the first sentence of this subparagraph with respect to items and services described in section 1861(s)(10) for which payment is made under part B.".

Sec. 2. The amendments made by this Act // 42 USC 1395l. // shall take effect on, and apply to services furnished on or after, July 1, 1981.

PAYMENTS TO STATES FOR ADOPTION ASSISTANCE AND

FOSTER CARE

Sec. 3. Section 474 of the Social Security Act // 42 USC 674. // is amended by adding at the end the following new subsection:

"(d)(1) The Secretary shall, prior to the beginning of each quarter, estimate the amount to which a State will be entitled under subsections (a), (b), and (c) for such quarter, such estimates to be based on (A) a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsections, and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than the State's proportionate share of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived, (B) records showing the number of children in the State receiving assistance under this part, and (c) such other investigation as the secretary may find necessary.

"(2) The Secretary shall then pay to the State, in such installments as he may determine, the amounts so estimated, reduced or increased to the extent of any overpayment or underpayment which the Secretary determines was made under this section to such State for any prior quarter and with respect to which adjustment has not already been made under this subsection.

"(3) The pro rata share to which the United States is equitably entitled, as determined by the Secretary, of the net amount recovered during any quarter by the State or any political subdivision thereof with respect to foster care and adoption assistance furnished under the State plan shall be considered an overpayment to be adjusted under this subsection.".

Sec. 4. Section 406(a)(2) of the Social Security Act // 42 USC 606. // is amended--,

(1) by inserting "at the option of the State," after "(B)"; and

(2) by inserting before the semicolon at the end thereof the following: ", or (C) at the option of the State, under the age of twenty-one and (as determined by the State in accordance with standards prescribed by the Secretary) a student regularly attending a school in grade twelve or below or regularly attending a course of vocational or technical training, other than a course provided by or through a college or university, designed to fit him for gainful employment".

Sec. 5. (a) Section 1613 of the Social Security Act // 42 USC 1382b. // is amended by adding at the end thereof the following new subsection:

" DISPOSAL OF RESOURCES FOR LESS THAN FAIR MARKET

VALUE

"(c)(1) In determining the resources of an individual (and his eligible spouse, if any) there shall be included (but subject to the exclusions under subsection (a)) any resource (or interest therein) owned by such individual or eligible spouse within the preceding 24 months if such individual or eligible spouse gave away or sold such resource or interest at less than fair market value of such resource or interest for the purpose of establishing eligibility for benefits or assistance under this Act.

"(2) Any transaction described in paragraph (1) shall be presumed to have been for the purpose of establishing eligibility for benefits or assistance under this Act unless such individual or eligible spouse furnishes convincing evidence to establish that the transaction was exclusively for some other purpose.

"(3) For purposes of paragraph (1) the value of such a resource or interest shall be the fair market value of such resource or interest at the time it was sold or given away, less the amount of compensation received for such resource or interest, if any.".

(b) Section 1902 of the Social Security Act // 42 USC 1396a. // is amended by adding at the end thereof the following new subsection:

"(j)(1) Notwithstanding any other provision of this title, an individual who would otherwise be eligible for medical assistance under the State plan approved under this title may be denied such assistance if such individual would not be eligible for such medical assistance but for the fact that he disposed of resources for less than fair market value. If the State plan provides for the denial of such assistance by reason of such disposal of resources, the State plan shall specify a procedure for implementing such denial which, except as provided in paragraph (2), is not more restrictive than the procedure specified in section 1613(c) of this Act.

"(2) In any case where the uncompensated value of disposed of resources exceeds $12,000, the State plan may provide for a period of ineligibility which exceeds 24 months. If a State plan provides for a period of ineligibility exceeding 24 months, such plan shall provide for the period of ineligibility to bear a reasonable relationship to such uncompensated value.

"(3) In any case where an individual is ineligible for medical assistance under the State plan solely because of the applicability to such individual of the provisions of section 1613(c), the State plan may provide for the eligibility of such individual for medical assistance under the plan if such individual would be so eligible if the State plan requirements with respect to disposal of resources applicable under paragraphs (1) and (2) of this subsection were applied in lieu of the provisions of section 1613(c).".

(c) The amendment made by subsection (a) // 42 USC 1382b. // shall be effective with respect to applications for benefits under title XVI of the Social Security Act // 42 USC 1601. // filed on or after the first day of the first month which begins at least 60 days after the date of enactment of this Act.

SHORT TITLE

Sec. 6. Sections 6 to 10 of this Act // 42 USC 1305 // may be cited as the " Parental Kidnaping Prevention Act of 1980".

FINDINGS AND PURPOSES

Sec. 7. (a) The Congress finds that--,

(1) there is a large and growing number of cases annually involving disputes between persons claiming rights of custody and visitation of children under the laws, and in the courts, of different States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States;

(2) the laws and practices by which the courts of those jurisdictions determine their jurisdiction to decide such disputes, and the effect to be given the decisions of such disputes by the courts of other jurisdictions, are often inconsistent and conflicting;

(3) those characteristics of the law and practice in such cases, along with the limits imposed by a Federal system on the authority of each such jurisdiction to conduct investigations and take other actions outside its own boundaries, contribute to a tendency of parties involved in such disputes to frequently resort to the seizure, restraint, concealment, and interstate transportation of children, the disregard of court orders, excessive relitigation of cases, obtaining of conflicting orders by the courts of various jurisdictions, and interstate travel and communication that is so expensive and time consuming as to disrupt their occupations and commercial activities; and

(4) among the results of those conditions and activities are the failure of the courts of such jurisdictions to give full faith and credit to the judicial proceedings of the other jurisdictions, the deprivation of rights of liberty and property without due process of law, burdens on commerce among such jurisdictions and with foreign nations, and harm to the welfare of children and their parents and other custodians.

(b) For those reasons it is necessary to establish a national system for locating parents and children who travel from one such jurisdiction to another and are concealed in connection with such disputes, and to establish national standards under which the courts of such jurisdictions will determine their jurisdiction to decide such disputes and the effect to be given by each such jurisdiction to such decisions by the courts of other such jurisdictions.

(c) The general purposes of sections 6 to 10 of this Act are to--,

(1) promote cooperation between State courts to the end that a determination of custody and visitation is rendered in the State which can best decide the case in the interest of the child;

(2) promote and expand the exchange of information and other forms of mutual assistance between States which are concerned with the same child;

(3) facilitate the enforcement of custody and visitation decrees of sister States;

(4) discourage continuing interstate controversies over child custody in the interest of greater stability of home environment and of secure family relationships for the child;

(5) avoid jurisdictional competition and conflict between State courts in matters of child custody and visitation which have in the past resulted in the shifting of children from State to State with harmful effects on their well-being; and

(6) deter interstate abductions and other unilateral removals of children undertaken to obtain custody and visitation awards.

FULL FAITH AND CREDIT GIVEN TO CHILD CUSTODY

DETERMINATIONS

Sec. 8. (a) Chapter 115 of title 28, United States Code, // 28 USC 1731 // is amended by adding immediately after section 1738 the following new section:

" Section 1738 A. // 28 USC 1738 A. // Full faith and credit given to child custody determinations

"(a) The appropriate authorities of every State shall enforce according to its terms, and shall not modify except as provided in subsection (f) if this section, any child custody determination made consistently with the provisions of this section by a court of another State.

"(b) As used in this section, the term--,

"(1) 'child' means a person under the age of eighteen;

"(2) 'contestant' means a person, including a parent, who claims a right to custody or visitation of a child;

"(3) 'custody determination' means a judgment, decree, or other order of a court providing for the custody or visitation of a child, and includes permanent and temporary orders, and initial orders and modifications;

"(4) 'home State' means the State in which, immediately preceding the time involved, the child lived with his parents, a parent, or a person acting as parent, for at least six consecutive months, and in the case of a child less than six months old, the State in which the child lived from birth with any of such persons. Periods of temporary absence of any of such persons are counted as part of the six-month or other period;

"(5) 'modification' and 'modify' refer to a custody determination which modifies, replaces, supersedes, or otherwise is made subsequent to, a prior custody determination concerning the same child, whether made by the same court or not;

"(6) 'person acting as a parent' means a person, other than a parent, who has physical custody of a child and who has either been awarded custody by a court or claims a right to custody;

"(7) 'physical custody' means actual possession and control of a child; and

"(8) ' State' means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a territory or possession of the United States.

"(c) A child custody determination made by a court of a State is consistent with the provisions of this section only if--,

"(1) such court has jurisdiction under the law of such State; and

"(2) one of the following conditions is met:

"(A) such State (i) is the home State of the child on

the date

of the commencement of the proceeding, or (ii) had been

the

child's home State within six months before the date

of the

commencement of the proceeding and the child is absent

from such State because of his removal or retention by

a

contestant or for other reasons, and a contestant

continues

to live in such State;

"(B)(i) it appears that no other State would have

jurisdiction

under subparagraph (A), and (ii) it is in the best

interest

of the child that a court of such State assume

jurisdiction

because (I) the child and his parents, or the child

and at least

one contestant, have a significant connection with such

State other than mere physical presence in such

State, and

(II) there is available in such State substantial

evidence

concerning the child's present or future care,

protection,

training, and personal relationships;

"(C) the child is physically present in such State and

(i) the

child has been abandoned, or (ii) it is necessary in an

emergency to protect the child because he has been

subjected

to or threatened with mistreatment or abuse;

"(D)(i) it appears that no other State would have

jurisdiction

under subparagraph (A), (B), (C), or (E), or

another State

has declined to exercise jurisdiction on the ground

that the

State whose jurisdiction is in issue is the more

appropriate

forum to determine the custody of the child, and (ii)

it is in

the best interest of the child that such court assume

jurisdiction;

or

"(E) the court has continuing jurisdiction pursuant to subsection (d) of this section.

"(d) The jurisdiction of a court of a State which has made a child custody determination consistently with the provisions of this section continues as long as the requirement of subsection (c)(1) of this section continues to be met and such State remains the residence of the child or of any contestant.

"(e) Before a child custody determination is made, reasonable notice and opportunity to be heard shall be given to the contestants, any parent whose parental rights have not been previously terminated and any person who has physical custody of a child.

"(f) A court of a State may modify a determination of the custody of the same child made by a court of another State, if--,

"(1) it has jurisdiction to make such a child custody determination; and

"(2) the court of the other State no longer has jurisdiction, or it has declined to exercise such jurisdiction to modify such determination.

"(g) A court of a State shall not exercise jurisdiction in any proceeding for a custody determination commenced during the pendency of a proceeding in a court of another State where such court of that other State is exercising jurisdiction consistently with the provisions of this section to make a custody determination.".

(b) The table of sections at the beginning of chapter 115 of title 28, United States Code, // 28 USC 1738 A // is amended by inserting after the item relating to section 1738 the following new item:

"1738 A. Full faith and credit given to child custody determinations.".

(c) In furtherance of the purposes of section 1738 A of title 28, United States Code, as added by subsection (a) of this section, State courts are encouraged to--,

(1) afford priority to proceedings for custody determinations; and

(2) award to the person entitled to custody or visitation pursuant to a custody determination which is consistent with the provisions of such section 1738 A, necessary travel expenses, attorneys' fees, costs of private investigations, witness fees or expenses, and other expenses incurred in connection with such custody determination in any case in which--,

(A) contestant has, without the consent of the person entitled to custody or visitation pursuant to a custody determination which is consistent with the provisions of such section 1738 A, (i) wrongfully removed the child

from

the physical custody of such person, or (ii) wrongfully

retained the child after a visit or other temporary

relinquishment

of physical custody; or

(B) the court determines it is appropriate. USE OF FEDERAL PARENT LOCATOR SERVICE IN

CONNECTION WITH THE

ENFORCEMENT OR DETERMINATION OF CHILD CUSTODY

AND IN CASES

OF PARENTAL KIDNAPING OF A CHILD

Sec. 9. (a) Section 454 of the Social Security Act // 42 USC 654. // is amended--,

(1) by striking out "and" at the end of paragraph (15);

(2) by striking out the period at the end of paragraph (16) and inserting in lieu thereof "; and"; and

(3) by inserting after paragraph (16) the following new paragraph:

"(17) in the case of a State which has in effect an agreement with the Secretary entered into pursuant to section 463 for the use of the Parent Locator Service established under section 453, // 42 USC 653. // to accept and transmit to the Secretary requests for information authorized under the provisions of the agreement to be furnished by such Service to authorized persons, and to impose and collect (in accordance with regulations of the Secretary) a fee sufficient to cover the costs to the State and to the Secretary incurred by reason of such requests, to transmit to the Secretary from time to time (in accordanc with such regulations) so much of the fees collected as are attributable to such costs to the Secretary so incurred, and during the period that such agreement is in effect, otherwise to comply with such agreement and regulations of the Secretary with respect thereto.".

(b) Part D of title IV of the Social Security Act // 42 USC 651. // is amended by adding at the end thereof the following new section:

" USE OF FEDERAL PARENT LOCATOR SERVICE IN

CONNECTION WITH THE

ENFORCEMENT OR DETERMINATION OF CHILD CUSTODY

AND IN CASES

OF PARENTAL KIDNAPING OF A CHILD

" Sec. 463. // 42 USC 663. // (a) The Secretary shall enter into an agreement with any State which is able and willing to do so, under which the services of the Parent Locator Service established under section 453 shall be made available to such State for the purpose of determining the whereabouts of any absent parent or child when such information is to be used to locate such parent or child for the purpose of--,

"(1) enforcing any State or Federal law with respect to the unlawful taking or restraint of a child; or

"(2) making or enforcing a child custody determination.

"(b) An agreement entered into under this section shall provide that the State agency described in section 454 // 42 USC 654. // will, under procedures prescribed by the Secretary in regulations, receive and transmit to the Secretary requests from authorized persons for information as to (or useful in determining) the whereabouts of any absent parent or child when such information is to be used to locate such parent or child for the purpose of--,

"(1) enforcing any State or Federal law with respect to the unlawful taking or restraint of a child; or

"(2) making or enforcing a child custody determination.

"(c) Information authorized to be provided by the Secretary under this section shall be subject to the same conditions with respect to disclosure as information authorized to be provided under section 453, // 42 USC 653. // and a request for information by the Secretary under this section shall be considered to be a request for information under section 453 which is authorized to be provided under such section. Only information as to the most recent address and place of employment of any absent parent or child shall be provided under this section.

"(d) For purposes of this section--,

"(1) the term 'custody determination' means a judgment, decree, or other order of a court providing for the custody or visitation of a child, and includes permanent and temporary orders, and initial orders and modification;

"(2) the term 'authorized person' means--,

"(A) any agent or attorney of any State having an

agreement

under this section, who has the duty or authority

under the law of such State to enforce a child custody

determination;

"(B) any court having jurisdiction to make or enforce

such

a child custody determination, or any agent of such

court;

and

"(C) any agent or attorney of the United States, or of

a

State having an agreement under this section, who has

the

duty or authority to investigate, enforce, or bring a

prosecution

with respect to the unlawful taking or restraint of a

child.".

(c) Section 455(a) of such Act // 42 USC 655. // is amended by adding after paragraph (3) the following: "except that no amount shall be paid to any State on account of amounts expended to carry out an agreement which it has entered into pursuant to section 463.".

(d) No agreement entered into under section 463 of the Social Security Act // 42 USC 663 // shall become effective before the date on which section 1738 A of title 28, United States Code (as added by this title) becomes effective.

PARENTAL KIDNAPING

Sec. 10. (a) In view of the findings of the Congress and the purposes of sections 6 to 10 of this Act // 18 USC 1073 // set forth in section 302, // 42 USC 502. // the Congress hereby expressly declares its intent that section 1073 of title 18, United States Code, apply to cases involving parental kidnaping and interstate or international flight to avoid prosecution under applicable State felony statutes.

(b) The Attorney General of the United States, not later than 120 days after the date of the enactment of this section (and once every 6 months during the 3-year period following such 120-day period), shall submit a report to the Congress with respect to steps taken to comply with the intent of the Congress set forth in subsection (a). Each such report shall include--,

(1) data relating to the number of applications for complaints under section 1073 of title 18, United States Code, in cases involving parental kidnaping;

(2) data relating to the number of complaints issued in such cases; and

(3) such other information as may assist in describing the activities of the Department of Justice in conformance with such intent.

TECHNICAL AMENDMENTS AND AMENDMENTS RELATING TO

CHILD

SUPPORT AUDITS

Sec. 11. (a)(1) Section 127(a)(1) of the Food Stamp Act Amendments of 1980 (Public Law 96 - 249), is amended by striking out " Subsection (i) of section 6103" and inserting in lieu thereof " Subsection (1) of section 6103".

(2)(A) Section 408(a)(1) of the Social Security Disability Amendments of 1980 (Public Law 96 - 265), is amended by striking out (in the new paragraph added thereby to subsection (1) of section 6103 of the Internal Revenue Code of 1954) "(7) Disclosure" and inserting in lieu thereof "(8) Disclosure".

(B) Section 408(a)(2) of the Social Security Disability Amendments of 1980 is amended--,

(i) in subparagraph (A), by--,

(I) striking out "(1)(1) or (4)(B) or (5)" and

inserting in lieu

thereof "(1)(1), (4)(B), (5), or (7)", and

(II) striking out "(1)(1), (4)(B), (5), or (7)" and

inserting in

lieu thereof "(1)(1), (4)(B), (5), (7), or (8)";

(ii) in subparagraph (B), by--,

(I) striking out "(1) (3) or (6)" and inserting in lieu

thereof

"(1) (3), (6), or (7)", and

(II) striking out "(1) (3), (6), or (7)" and inserting

in lieu

thereof "(1) (3), (6), (7), or (8)";

(iii) in subparagraph (C), by--,

(I) striking out "(1)(6)" and inserting in lieu thereof

"(1)(6)

or (7)", and

(II) striking out "(1) (6) or (7)" and inserting in lieu

thereof

"(1) (6), (7), or (8)"; and

(iv) in subparagraph (D),

// 26 USC 7213. //

by--,

(I) striking out "subsection (d), (1)(6) or (m)(4)(B)"

and

inserting in lieu thereof "subsection (d), (1) (6)

or (7), or

(m)(4)(B)", and

(II) striking out "subsection (d), (1) (6) or (7), or

(m)(4)(B)"

and inserting in lieu thereof "subsection (d), (1) (6),

(7), or (8),

or (m)(4)(B)".

(3) The amendment made by paragraph (1) // 26 USC 6103 // shall take effect on May 26, 1980 and the amendments made by paragraph (2) shall take effect on June 9, 1980.

(4)(A) The first sentence of section 7213(a)(2) of the Internal Revenue Code of 1954 // 26 USC 7213. // (relating to unauthorized disclosure of information by State and other employees) is amended by striking out "(1) (6) or (7)" and inserting in lieu thereof "(1) (6), (7), or (8)".

(B) The amendment made by subparagraph (A) // 26 USC 7213 // shall take effect on December 5, 1980.

(b)(1) Section 309 of the Adoption Assistance and Child Welfare Act of 1980 is amended by striking out "fiscal year 1977 or fiscal year 1978 shall be made prior to October 1, 1980" and inserting in lieu thereof "any of the fiscal years 1977 through 1980 shall be made prior to October 1, 1981".

(2) The regulations pertaining to audit criteria (as set forth in 45 CFR 305.20) and the regulations pertaining to penalty for failure to have an effective child support enforcement program (as set forth in 45 CFR 305.50), under the child support program established by title IV-D of the Social Security Act, // 42 USC 651. // as in effect on the date of enactment of this Act, shall remain in effect until October 1, 1981.

(c) Section 455(a) of the Social Security Act // 42 USC 655. // is amended by striking out the semicolon at the end thereof and inserting in lieu thereof a period.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

CONGRESSIONAL RECORD, Vol. 126 (1980):

Dec. 5, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to Senate

amendments.

PUBLIC LAW 96-610, 94 STAT. 3564, NATIONAL VISITOR CENTER EMERGENCY REPORT ACT OF 1980

96th CONGRESS, S. 2729 DECEMBER 28, 1980
An Act To authorize certain emergency repairs at the National

Visitor Center in the

District of Columbia.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act // 40 USC 801 // may be cited as the " National Visitor Center Emergency Repair Act of 1980".

Sec. 2. // 40 USC 802 // (a) There is hereby authorized to be appropriated to the Secretary of the Interior for the fiscal year ending September 30, 1981, the sum of $11,000,000 for the purpose of making emergency repairs to the primary structure and roofs of the National Visitor Center in the District of Columbia and for the purpose of providing protection of the structural elements of the unfinished parking facility and southeast ramp at such Center. Such sum shall remain available until expended.

(b) Proir to entering into any contract for the repairs or protection authorized by subsection (a) of this section, the Secretary of the Interior shall consult with the Secretary of Transportation regarding the planning for such repairs or protection. Sec. 3. // 40 USC 802 // (a) The Office of Legal Counsel of the Department of Justice shall prepare an opinion on the question of whether the United States or the Terminal Realty Baltimore Co. and the Terminal Realty Penn Co. are legally liable for the repairs anticipated by the provisions of this Act. If the Office of Legal Counsel determines that there is a reasonable cause to believe a party other than the United States is legally obligated to bear all or a portion of the costs of that repair authorized by this Act, the Attorney General shall institute an action to recover expenditures that were incurred by the Secretary pursuant to this Act.

(b) None of the actions taken pursuant to the provisions of this Act shall be deemed to limit or affect in any way the rights of the United States under the lease for real property between Terminal Realty Baltimore Co. and Terminal Realty Penn. Co. and the United States of America, dated March 1, 1972, or any additions or modifications thereto.

Sec. 4. // 40 USC 809. // The Architect of the Capitol may enter into a contract or other agreement with the Secretary of the Interior providing for the Architect of the Capitol to furnish steam from the Capitol Power Plant to the Union Station-National Visitor Center complex. Under such contract, the Secretary of the Interior shall pay for such steam at rates, not less than cost, and shall connect the Union Station- National Visitor Center complex with the Capitol Power Plant steam lines without expenses to the Congress.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 902 accompanying H.R. 6674 (Comm. on Public Works and Transportation).

SENATE REPORT No. 96 - 775 (Comm. on Environment and Public Works).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Dec. 13, considered and passed Senate and House.

PUBLIC LAW 96-609, 94 STAT. 3555

96th CONGRESS, H.R. 5047 DECEMBER 28, 1980
An Act To provide for the temporary suspension of certain

duties, to extend certain existing

suspensions of duties, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I-AMENDMENTS TO TARIFF SCHEDULES

SEC. 101. AMENDMENT OF TARIFF SCHEDULES; DEFINITION OF ENTERED.

(a) Whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a schedule, item, or other provision, the reference shall be considered to be made to a schedule, item, or other provision of the Tariff Schedules of the United States (19 U.S.C. 1202).

(b) For purposes of this title, the term "entered" means entered, or withdrawn from warehouse, for consumption within the customs territory of the United States.

SEC. 102. FOREIGN MATERIALS DETERMINATIONS RELATING TO TARIFF TREATMENT OF PRODUCTS OF INSULAR POSSESSIONS.

General headnote 3(a)(ii) // 19 USC 1202. // is amended to read as follows:

"(ii) In determining whether an article produced or manufactured in any such insular possession contains foreign materials to the value of more than 50 percent, no material shall be considered foreign which either--,

"(A) at the time such article is entered, or "(B) at the time such material is imported into the insular possession,

may be imported into the customs territory from a foreign country, other than Cuba or the Philippine Republic, and entered free of duty; except that no article containing material to which (B) of this subdivision applies shall be exempt from duty under subdivision (i) unless adequate documentation is supplied to show that the material has been incorporated into such article during the 18-month period after the date on which such material is imported into the insular possession.".

SEC. 103. YARNS OF SILK.

(a) Subpart D of part 1 of schedule 3 // 19 USC 1202. // is amended--,

(1) by amending item 308.40 by striking out "8.1% ad val." and "40% ad val." in rate columns numbered 1 and 2, respectively, and inserting in lieu thereof " Free", and by striking out "5% ad val." in the LDDC column; and

(2) by amending item 308.50 by striking out "11.6% ad val." and "50% ad val." in rate columns numbered 1 and 2, respectively, and inserting in lieu thereof " Free", and by striking out "5% ad val." in the LDDC column.

(b) Items 905.30 and 905.31 are repealed.

(c) The amendments made by subsections (a) and (b) shall apply with respect to articles entered after June 30, 1980.

SEC. 104. POPPY STRAW EXTRACT.

(a) Part 3 of schedule 4 // 19 USC 1202. // is amended by inserting in numerical sequence the following new item--,

ITEM OMITTED

(b) Item 907.70 is repealed.

(c) The amendments made by subsections (a) and (b) apply with respect to articles entered after June 30, 1980.

SEC. 105. CERTAIN VALUABLE WASTES.

Headnote 2(b)(ii) of subpart C of part 5 of schedule 8 // 19 USC 1202. // is amended to read as follows:

"(ii) all articles and valuable wastes resulting from such processing will be exported or destroyed under customs supervision within the bonded period; except that in lieu of the exportation or destruction of valuable wastes, duties may be tendered on such wastes at rates of duties in effect for such wastes at the time of importation".

SEC. 106. WATER CHESTNUTS AND BAMBOO SHOOTS.

(a) Subpart B of part 1 of the Appendix is // 19 USC 1202 app. // is amended by inserting in numerical sequence the following new items:

ITEMS OMITTED

(b) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act

SEC. 107. URETHANE CURING AGENT (TMAB).

(a) Subpart B of part 1 of the Appendix // 19 USC 1202 app. // is amended by inserting in numerical sequence the following new item:

ITEM OMITTED.

(b) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

SEC. 108. COLOR COUPLERS AND COLOR INTERMEDIATES.

(a)(1) Item 907.10 of the Appendix is amended by striking out "provided for in item 403.60," and inserting in lieu thereof "however provided for in items 402.36 through 406.63," and by striking out "6/ 30/80" and inserting in lieu thereof "6/30/82".

(2) Item 907.12 of the Appendix is amended by striking out "405.20," and inserting in lieu thereof "408.41,", and by striking out

"6/30/80" and inserting in lieu thereof "6/30/82".

(b) The amendments made by subsection (a) shall apply with respect to articles entered after June 30, 1980.

SEC. 109. DOXORUBICIN HYDROCHLORIDE.

(a) Item 907.20 of the Appendix is amended by striking out "407.85," and inserting in lieu thereof "411.76,", and by striking out

"6/30/80" and inserting in lieu thereof "6/30/82".

(b) The amendment made by subsection (a) shall apply with respect to articles entered after June 30, 1980.

SEC. 110. LEVULOSE.

(a) Item 907.90 of the Appendix is amended by striking out "10% ad val." and inserting in lieu thereof " Free", and by striking out "6/30/ 80" and inserting in lieu thereof "12/31/81".

(b) The amendments made by subsection (a) shall apply with respect to articles entered after June 30, 1980.

SEC. 111. FLAT KNITTING MACHINES.

(a) Subpart B of part 1 of the Appendix // 19 USC 1202 app. // is amended by striking out items 912.07 and 912.08, and by inserting in numerical sequence the following new item:

ITEM OMITTED.

(b) The amendments made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

SEC. 112. WARP KNITTING MACHINES.

(a) Subpart B of Part 1 of the Appendix // 19 USC 1202 app. // is amended by inserting in numerical sequence the following new item:

ITEM OMITTED.

(b) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

SEC. 113. CHIPPER KNIFE STEEL.

(a) Subpart B of part 1 of the Appendix // 19 USC 1202 app. // is amended by inserting in numerical sequence the following new item:

ITEM OMITTED.

(b) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

SEC. 114. UNWROUGHT LEAD.

(a) Subpart B of part 1 of the Appendix // 19 USC 1202 app. // is amended by inserting in numerical sequence the following item:

ITEM OMITTED.

(b) Before July 1, 1983--,

(1) no modification of the temporary column 1 rate of duty in item 911.50 (as added by subsection (a)) may be proclaimed by the President under any authority of law except title II of the Trade Act of 1974;

// 19 USC 2251. //

and

(2) no duty or other import fee, except that provided for in such item 911.50 and those provided for under the amendments made by title I of the Trade Agreements Act of 1979,

// 19 USC 1671. //

may be imposed on unwrought lead provided for in such item.

(c) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

(d) Upon request therefor filed with the customs officer concerned on or before the 90th day after the date of enactment of this Act, the entry, or withdrawal from warehouse, for consumption of any article described in item 624.03 of the Tariff Schedules of the United States and--,

(1) that was made on or after January 1, 1980, and before the date of the enactment of this Act; and

(2) with respect to which the duty would have been different if the amendment made by subsection (a) applied to such entry or withdrawal;

shall, notwithstanding the provisions of section 514 of the Tariff Act of 1930 // 19 USC 1514. // or any other provision of law, be liquidated or reliquidated as though such entry or withdrawal had been made on the date of the enactment of this Act.

SEC. 115. CERTAIN FISH NET AND NETTING PURCHASES AND REPAIRS.

(a) Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466) is amended by adding at the end thereof the following new subsection:

"(g) The duty imposed by subsection (a) shall not apply to entries on and after October 1, 1979, and before January 1, 1982, of--,

"(1) tuna purse seine nets and netting which are equipments or parts thereof,

"(2) repair parts for such nets and netting, or materials used in repairing such nets and netting, or

"(3) the expenses of repairs of such nets and netting,

for any United States documented tuna purse seine vessel of greater than 500 tons carrying capacity or any United States tuna purse seine vessel required to carry a certificate of inclusion under the general permit issued to the American Tunaboat Association pursuant to section 104 of the Marine Mammal Protection Act of 1972." // 16 USC 1374. //

(b) Upon request therefor filed with the customs officer concerned on or before the 90th day after the date of the enactment of this Act, the entry of any article to which section 466(a) of the Tariff Act of 1930 // 19 USC 1466 // applied and--,

(1) that was made on or after October 1, 1979, and before the date of the enactment of this Act; and

(2) with respect to which there would have been no duty if the amendment made by subsection (a) applied to such entry or withdrawal;

shall, notwithstanding the provisions of section 514 of the Tariff Act of 1930 // 19 USC 1514. // or any other provision of law, be liquidated or reliquidated as though such entry or withdrawal had been made on the date of the enactment of this Act.

SEC. 116. WOOD VENEERS.

(a) Part 3 of schedule 2 // 19 USC 1202. // is amended as follows:

(1) Item 240.00 is amended by striking out "1% ad val." in rate column numbered 1 and inserting in lieu thereof " Free", and by striking out " Free" in the LDDC rate column.

(2) Item 240.02 is amended by striking out "7% ad val." in rate column numbered 1 and inserting in lieu thereof " Free", and by striking out "4% ad val." in the LDDC column.

(3) Item 240.03 is amended by striking out "2% ad val." in rate column numbered 1 and inserting in lieu thereof " Free", and by striking out " Free" in the LDDC column.

(4) Item 240.04 is amended by striking out "5% ad val." in rate column numbered 1 and inserting in lieu thereof " Free", and by striking out "3.2% ad val." in the LDDC column.

(5) Item 240.06 is amended by striking out "2% ad val." in rate column numbered 1 and inserting in lieu thereof " Free", and by striking out " Free" in the LDDC column.

(b) The amendments made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

SEC. 117. EPHEDRINE, RACEPHEDRINE, AND THEIR SALTS.

Effective with respect to articles entered on or after the date of the enactment of this Act--,

(a) Subpart C of part 1 of schedule 4 // 19 USC 1202. // is amended by striking out item 411.32 and inserting the following new items in lieu thereof:

ITEM OMITTED.

(b) The rates of duty in column numbered 1 for items 411.30 and 411.31 of the Tariff Schedules of the United States (19 U.S.C. 1202) (as added by subsection (a)) shall be subject to any staged rate reductions proclaimed by the President for items 411.32 and 437.20, respectively, which have been proclaimed by the President before the date of the enactment of this Act.

(c) Whenever the rate of duty specified in the column numbered 1 for item 411.30 or 411.31 of the Tariff Schedules of the United States (19 U.S.C. 1202) (as added by subsection (a)) is reduced to the same level as the corresponding rate of duty specified in the column entitled " LDDC" for such item, or to a lower level, the rate of duty in the column entitled " LDDC" shall be deleted from such Schedules.

(d) For purposes of the Trade Act of 1974, // 19 USC 2101. // the amendments made by this section (not including the rates of duty in column numbered 2 of the Tariff Schedules of the United States) shall be considered to be trade agreement obligations entered into and proclaimed under the Trade Act of 1974 of benefit to foreign countries or instrumentalities.

(e) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

SEC. 118. SPECIAL EFFECTIVE DATE PROVISION.

Upon request therefor filed with the customs officer concerned on or before the 180th day after the date of the enactment of this Act, the entry of any article--,

(1) which was made after June 30, 1980, and before such date of enactment, and

(2) with respect to which there would have been no duty if the amendment or amendments, as the case may be, made by sections 103, 104, 108, 109, and 110 applied to such entry,

shall, notwithstanding the provisions of section 514 of the Tariff Act of 1930 // 19 USC 1514. // or any other provision of law, be liquidated or reliquidated as though such entry had been made on June 30, 1980.

SEC. 119. HOVERCRAFT SKIRTS.

(a) Subpart B of part 1 of the Appendix // 19 USC 1202 app. // is amended by inserting in numerical sequence the following new item:

ITEM OMITTED

(b) The amendment made by subsection (a) shall apply with respect to articles entered on or after the date of the enactment of this Act.

TITLE II-AMENDMENTS TO OTHER TRADE LAWS

SEC. 201. SAME CONDITION DRAWBACK.

(a) Section 313 of the Tariff Act of 1930 (19 U.S.C. 1313) is amended--,

(1) by redesignating subsections (j) and (k) as subsections (k) and (1), respectively; and

(2) by inserting immediately after subsection (i) the following:

"(j) Same Condition Drawback.-(1) If imported merchandise, on which was paid any duty, tax, or fee imposed under Federal law because of its importation--,

"(A) is, before the close of the three-year period beginning on the date of importation--,

"(i) exported in the same condition as when imported, or "(ii) destroyed under Customs supervision; and

"(B) is not used within the United States before such exportation or destruction;

then upon such exportation or destruction 99 per centum of the amount of each such duty, tax, and fee so paid shall be refunded as drawback.

"(2) The performing of incidental operations (including, but not limited to, testing, cleaning, repacking, and inspecting) on the imported merchandise itself, not amounting to manufacture or production for drawback purposes under the preceding provisions of this section, shall not be treated as a use of that merchandise for purposes of applying paragraph (1)(B).".

(b) The amendments made by subsection (a) // 19 USC 1313 // shall apply with respect to articles entered, or withdrawn from warehouse, for consumption on or after the date of the enactment of this Act.

SEC. 202. INFORMAL ENTRY OF CERTAIN UNITED STATES PRODUCTS.

Section 498(a) of the Tariff Act of 1930 (19 U.S.C. 1498(a)) is amended--,

(1) by redesignating paragraphs (2) through (11) as paragraphs (3) through (12), respectively; and

(2) by inserting immediately after paragraph (1) the following new paragraph:

"(2) Products of the United States, when the aggregate value of the shipment does not exceed $10,000 and the products are imported--,

"(A) for the purposes of repair or alteration prior to reexportation, or "(B) after having been either rejected or returned by the foreign purchaser to the United States for credit;".

SEC. 203. TECHNICAL AMENDMENTS TO THE TRADE AGREEMENTS ACT OF 1979.

(a) The Trade Agreements Act of 1979 (Public Law 96 - 39; 93 Stat. 144 et seq.) is amended as follows:

(1) Section 852

// 19 USC 1202. //

is amended by striking out:

" So much of subpart D of part 12 of schedule 1 of the Tariff Schedules of the United States as follows headnot 1 is amended to read as follows:

TARIFF SCHEDULES OMITTED.

and inserting in lieu thereof the following:

" Subpart D of part 12 of schedule 1 of the Tariff Schedules of the United States is amended to read as follows:

TARIFF SCHEDULES OMITTED.

(2) Paragraph (1) of section 1107(a)

// 19 USC 1202. //

is amended to read as follows:

"(1) by inserting 'and' after 'subpart E,', and by striking out 'headnote 4' and inserting in lieu thereof 'headnote 3', in headnote 3(a)(i), and".

(3) The amendments made by this subsection shall apply with respect to articles entered, or withdrawn from warehouse, for consumption on or after January 1, 1980.

(b) The amendments made to the Trade Agreements Act of 1979 // 19 USC 2501. // by section 14(a)(3)(A) of Public Law 96 - 467 with respect to items 678.50, 694.15, 694.20, and 694.40 of the Tariff schedules of the United States shall apply with respect to articles entered, or withdrawn from warehouse, for consumption on or after January 1, 1980.

SEC. 204. FOREIGN-TRADE ZONES BOARD REPORTS.

Section 16(c) of the Act entitled " An Act to provide for the establishment, operation, and maintenance of foreign-trade zones in ports of entry of the United States, to expedite and encourage foreign commerce, and for other purposes", approved June 18, 1934 (48 Stat. 1002; 19 U.S.C. 81p(c)), is amended by striking out "on the first day of each regular session" and inserting in lieu thereof "by April 1 of each year".

SEC. 205. COUNTRY-OF-ORIGIN DETERMINATIONS.

Notwithstanding subparagraph (1)(A) of subsection 5(a) of Reorganization Plan No. 3 of 1979 (44 F.R. 69272, 93 Stat. 1381), // 19 USC 2515 // the Secretary of the Treasury or his delegate shall issue such advisory rulings and make such determinations as are authorized by subsection 305(b)(1) of the Trade Agreements Act of 1979 (19 U.S.C. 2515(b)(1)). // 19 USC 2171 //

TITLE III-MISCELLANEOUS PROVISIONS

SEC. 301. TECHNICAL AMENDMENTS TO THE TARIFF SCHEDULES.

(a) The Tariff Schedules of the United States (19 U.S.C. 1202) are amended--,

(1) by striking out "4% ad val." in rate of duty column numbered 1 for item 470.18 and inserting in lieu thereof "3.9% ad val.",

(2) by inserting "3.1% ad val." in the column entitled " LDDC" for item 470.18, and

(3) by striking out "provided for in item 403.60," in item 907.11 of the Appendix and inserting in lieu thereof "however provided for in items 402.36 through 406.63,".

(b) The rates of duty in column numbered 1 for item 470.18 of the Tariff Schedules of the United States (19 U.S.C. 1202) shall be subject to any staged rate reductions for item 470.15, which have been proclaimed by the President before the date of the enactment of this Act.

(c) Whenever the rate of duty specified in column numbered 1 for item 470.18 of the Tariff Schedules of the United States (19 U.S.C. 1202) is reduced to the same level as the corresponding rate of duty specified in the column entitled " LDDC" for such item, or to a lower level, the rate of duty in the column entitled " LDDC" for such item shall be deleted.

(d) For purposes of the Trade Act of 1974, // 19 USC 2101. // the amendments made by paragraphs (1) and (2) of subsection (a) shall be considered to be trade agreement obligations entered into and proclaimed under the Trade Act of 1974, of benefit to foreign countries or instrumentalities.

(e) This section, and the amendments made by this section, shall apply with respect to articles entered, or withdrawn from warehouse, for consumption on or after October 17, 1980.

SEC. 302. CONVEYANCE OF CERTAIN LANDING CRAFT TO COOS COUNTY, OREGON.

(a) Notwithstanding any provision of title III of the Liquor Law Repeal and Enforcement Act (49 Stat. 879), // 40 USC 304f. // and subject to subsection (b), the District Director of the United States Customs Service, Portland, Oregon, is authorized and directed to convey to the Coos County sheriff's office, Coos County, Oregon, all right, title, and interest of the United States to the three lighter amphibious resupply cargo craft (LARC'S) seized by officers of such Customs Service and officers of such sheriff's office in the drug raid conducted jointly by such officers on December 31, 1977, at Bandon, Coos County, Oregon.

(b) The conveyance described in subsection (a) shall be made subject to the payment by the Coos County sheriff's office of such storage or other expenses which may have been incurred with respect to the craft described in such section from the date of seizure of such craft to the date of delivery to the sheriff's office.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1109 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 999 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

July 21, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to Senate amendments.

PUBLIC LAW 96-608, 94 STAT. 3550

96th CONGRESS, H.R. 5973 DECEMBER 28, 1980
An Act To amend the Internal Revenue Code of 1954 to waive in

certain cases the residency

requirements for deductions or exclusions of

individuals living abroad, to allow

the tax-free rollover of certain distributions from

money purchase pension plans,

and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. RESIDENCY REQUIREMENTS FOR DEDUCTIONS OR EXCLUSIONS OF INDIVIDUALS LIVING ABROAD.

(a) General Rule.-Subsection (j) of section 913 of the Internal Revenue Code of 1954 // 26 USC 913. // (relating to deduction for certain expenses of living abroad) is amended by adding at the end thereof the following new paragraph:

"(4) Waiver of period of stay in foreign country.-For purposes of paragraphs (1) and (2) of subsection (a), an individual who--,

"(A) for any period is a bona fide resident of or is

present in

a foreign country,

"(B) leaves such foreign country after

August 31, 1978--,

"(i) during any period during which the Secretary determines, after consultation with the Secretary of State or his delegate, that individuals were required

to

leave such foreign country because of war, civil unrest,

or similar adverse conditions in such foreign country

which precluded the normal conduct of business by such

individuals, and

"(ii) before meeting the requirements of such paragraphs (1) and (2), and "(C) establishes to the satisfaction of the Secretary

that he

could reasonably have been expected to have met such

requirements but for the conditions referred to in

clause (i)

of subparagraph (B),

shall be treated as having met such requirements with respect to the period described in subparagraph (A) during which he was a bona fide resident or was present in the foreign country."

(b) Effective Dates.--,

(1) In general.-The amendment made by subsection (a)

// 26 USC 913 //

shall apply to taxable years beginning after December 31, 1977.

(2) Application for purposes of section 911.

// 26 USC 911. //

-In the case of an individual who leaves the foreeign country after August 31, 1978, rules similar to the rules of section 913( j)(4) of the Internal Revenue Code of 1945 (as added by subsection (a)) shall apply for purposes of applying section 911 of such Code for taxable years beginning in 1977 or 1978.

SEC. 2. ROLLOVER TREATMENT FOR CERTAIN DISTRIBUTIONS FROM MONEY PURCHASE PENSION PLANS.

(a) General Rule.-Paragraph (6) of section 402(a) of the Internal Revenue Code of 1954 // 26 USC 402. // (relating to special rollover rules) is amended by adding at the end thereof the following new subparagraph:

"(E) Special rule where employer maintains money purchase pension plan and other pension plan.--,

"(i) In general.-In the case of any distribution from a money purchase pension plan which is maintained by an employer, for purposes of paragraph (5)(D)(i)(II),

subsection

(e)(4)(C) shall be applied by not taking into

account any pension plan maintained by such employer

which is not a money purchase pension plan. The

preceding sentence shall not apply to any distribution

which is a qualifying rollover distribution without

regard to this subparagraph. "(ii) Treatment of subsequent distributions.-If--, "(I) any distribution of the balance to the credit of an employee from a money purchase pension plan maintained by an employer is treated as a qualifying rollover distibution by reason of clause (i), and "(II) any portion of such distribution is transferred in a transfer to which paragraph (5)(A) applies, then paragraph (2) of subsection (a), and paragraphs (1) and (3) of subsection (e), shall not apply to any

distribution

(after the taxable year in which the distribution

described in subparagraph (A) of paragraph (5) is made)

of the balance to the credit of such employee from any

other pension plan maintained by such employer."

(b) Effective Dates.--,

(1) In general.-The amendment made by subsection (a)

// 26 USC 402 //

shall apply to payments made in taxable years beginning after December 31, 1978.

(2) Transitional rule.-In the case of any payment made before January 1, 1982, in a taxable year beginning after December 31, 1978, which is treated as a qualifying rollover distribution (as defined in section 402(a)(5)(D)(i) of the Internal Revenue Code of 1954) by reason of the amendment made by subsection (a), the applicable period specified in section 402(a)(5)(C) of such Code shall not expire before the close of December 31, 1981.

SEC. 3. TREATMENT OF CERTAIN REPAYMENTS OF SUPPLEMENTAL UNEMPLOYMENT COMPENSATION BENEFITS.

(a) General Rule.-Section 62 of the Internal Revenue Code of 1954 // 26 USC 62. // (defining adjusted gross income) is amended by inserting after paragraph (15) the following new paragraph:

"(16) Certain required repayments of supplemental unemployment compensation benefits.-The deduction allowed by section 165

// 26 USC 165. //

for the repayment to a trust described in paragraph (9) or (17) of section 501(c)

// 26 USC 501. //

of supplemental unemployment compensation benefits received from such trust if such repayment is required because of the receipt of trade readjustment allowances under section 231 or 232 of the Trade Act of 1974 (19 U.S.C. 2291 and 2292)."

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 62 // shall apply to repayments made in taxable years beginning after the date of the enactment of this Act.

SEC. 4. TAX TREATMENT OF EXPENSES IN ATTENDING FOREIGN CONVENTIONS.

(a) In General.-Subsection (h) of section 274 // 26 USC 274. // of the Internal Revenue Code of 1954 (relating to attendance at foreign conventions, etc.) is amended to read as follows: "(h) Attendance at Conventions, Etc.--,

"(1) In General.-In the case of any individual who attends a convention, seminar, or similar meeting which is held outside the North American area, no deduction shall be allowed under section 162 or 212

// 26 USC 162, 212. //

for expenses allocable to such meeting unless the taxpayer establishes that the meeting is directly related to the active conduct of his trade or business or to an activity described in section 212 and that, after taking into account in the manner provided by regulations prescribed by the Secretary--,

"(A) the purpose of such meeting and the activities

taking

place at such meeting,

"(B) the purposes and activities of the sponsoring

organizations

or groups,

"(C) the residences of the active members of the

sponsoring

organization and the places at which other meetings of

the

sponsoring organization or groups have been held or

will be

held, and

"(D) such other relevant factors as the taxpayer may present,

it is as reasonable for the meeting to be held outside the North American area as within the North American area.

"(2) Conventions on cruise ships.-In the case of any individual who attends a convention, seminar, or other meeting which is held on any cruise ship, no deduction shall be allowed under section 162 or 212 for expenses allocable to such meeting.

"(3) Definitions.-For purposes of this subsection--,

"(A) North american area.-The term ' North American area' means the United States, its possession, and

the Trust

Territory of the Pacific Islands, and Canada and

Mexico.

"(B) Cruise ship.-The term 'cruise ship' means any

vessel

sailing within or without the territorial waters of the

United

States.

"(4) Subsection to apply to employer as well as to traveler.--,

"(A) Except as provided in subparagraph (B), this

subsection

shall apply to deductions otherwise allowable under

section 162 or 212 to any person, whether or not such

person

is the individual attending the convention, seminar, or

similar meeting.

"(B) This subsection shall not deny a deduction to any person other than the individual attending the

convention,

seminar, or similar meeting with respect to any amount

paid

by such person to or on behalf of such individual if

includible

in the gross income of such individual. The preceding

sentence

shall not apply if the amount is required to be included

in any information return filed by such person under

III

of subchapter A of chapter 61

// 26 USC 6001. //

and is not so included.".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 274 // of this section shall apply to conventions, seminars, and meetings beginning after December 31, 1980, except that in the case of any convention, seminar, or meeting beginning after such date which was scheduled on or before such date, a person, in such manner as the Secretary of the Treasury or his delegate may prescribe, may elect to have the provisions of section 274(h) of the Internal Revenue Code of 1954 be applied to such convention, seminar or meeting without regard to such amendment.

SEC. 5. TAXES ON SELF-DEALING IN THE CASE OF CERTAIN LEASES.

Section 4941(d)(2) of the Internal Revenue Code of 1954 // 26 USC 4941. // (relating to special rules in the case of self-dealing) is amended--,

(1) by striking out "and" at the end of subparagraph (F);

(2) by striking out the period at the end of subparagraph (G) and inserting a semicolon and "and"; and

(3) by adding at the end thereof the following:

"(H) the leasing by a disqualified person to a private foundation of office space for use by the foundation in

a

building with other tenants who are not disqualified

persons

shall not be treated as an act of self-dealing if--,

"(i) such leasing of office space is pursuant to a binding lease which was in effect on October 9, 1969,

or

pursuant to renewals of such a lease;

"(ii) the execution of such lease was not a prohibited transaction (within the meaning of section 503(b)

// 26 USC 503. //

or any

corresponding provision of prior law) at the time of

such

execution; and

"(iii) the terms of the lease (or any renewal) reflect an arm's-length transaction."

SEC. 6. TREATMENT OF CERTAIN INDEBTEDNESS INCURRED BEFORE 1965 FOR PURPOSES OF SECTION 514.

(a) General Rule.-For purposes of applying section 514 of the Internal Revenue Code of 1954 // 26 USC 514. // with respect to any sale of real property during 1976, indebtedness incurred before January 1, 1965, by an organization to finance the construction of a building on such property shall not be treated as acquisition indebtedness if the parcel of real property on which such building was constructed--,

(1) was acquired by such organization before January 1, 1952, and

(2) is contiguous to another parcel of real property which--,

(A) was acquired by such organization before January 1, 1952, and (B) was used by such organization, on January 1, 1952,

and

at all times thereafter before the date of the

enactment of

this Act, in a manner which meets the requirements of

section 514(b)(1)(A) of such Code

// 26 USC 514. //

(relating to property used in

carrying out exempt purpose).

(b) Effective Date.-The provisions of subsection (a) shall apply to sales during calendar year 1976.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 689 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1031 (Comm. on Finance).

CONGRESSIONAL RECORD:

Vol. 125 (1979): Dec. 17, considered and passed House.

Vol. 126 (1980): Dec. 13, considered and passed Senate, amended; House agreed to Senate amendments.

PUBLIC LAW 96-607, 94 STAT. 3539

96th CONGRESS, S. 2363 DECEMBER 28, 1980
An Act To provide, with respect to the national park system:

for the establishment of new

units; for adjustments in boundaries; for increases in

appropriation authorizations

for land acquisition and development; and for other

purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I ROGER WILLIAMS NATIONAL MEMORIAL

Sec. 101. Section 4 of the Act of October 22, 1965 (79 Stat. 1069) // 16 USC 450pp3. // entitled " An Act to provide for the establishment of the Roger Williams Natinal Memorial in the city of Providence, Rhode Island, and for other purposes" is amended to read as follows:

" Sec. 4. There are hereby authorized to be appropriated not more than $146,000 for the acquisition of lands and interests in land and not more than $1,862,000 for the development of the Roger Williams National Memorial, as provided in this Act.".

TITLE II HAMILTON GRANGE NATIONAL MEMORIAL

Sec. 201. Section 3 of the Joint Resolution of April 27, 1962 (76 Stat. 57) is amended by changing "$460,000" to "$960,000".

TITLE III CORONADO NATIONAL MEMORIAL

Sec. 301. Section 301 of the National Parks and Recreation Act of 1978 (92 Stat. 3467, 3473) is amended by striking out "$1,410,000" in paragraph (4) and inserting in lieu thereof "$2,875,000".

TITLE IV BIG BEND NATIONAL PARK

Sec. 401. // 16 USC 157c. // The boundary of the Big Bend National Park in the State of Texas is hereby revised to include the lands and interests therein within the area generally depicted on the map entitled " Big Bend National Park, Boundary Additions", numbered 155/ 80,019-A and dated June 1980 which shall be on file and available for public inspection in the local and Washington, District of Columbia, Offices of the National Park Service, Department of the Interior. The Secretary is authorized to acquire the lands and interests therein added to the park by this section by donation, purchase with donated or appropriated funds, or exchange, except that lands and interests therein owned by the State of Texas or any political subdivision thereof may be acquired only by donation or exchange. There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, but not to exceed $1,500,000 for the acquisition of lands and interests therein.

TITLE V GENERAL MANAGEMENT PLANS

Sec. 501. Within three complete fiscal years from the effective date of this Act, // 16 USC 410 ll // the Secretary shall submit to the Committee on Interior and Insular Affairs of the United States House of Representatives and the Committee on Energy and Natural Resources of the United States Senate, comprehensive general management plans for the areas established pursuant to titles XII and XVI of this Act, pursuant to the provisions of section 12(b) of the Act of August 18, 1970 (84 Stat.825; 16 U.S.C 1a-1 et seq.).

TITLE VI LYNDON B. JOHNSON NATIONAL HISTORICAL PARK

Sec. 601. The Act entitled " An Act to establish the Lyndon B. Johnson National Historic Site", approved December 2, 1969 (83 Stat. 274) is amended--,

(1) in the first section,

// 16 USC 410kk. //

by changing "by donation or by purchase with donated funds" to "by donation or by purchase with donated or appropriated funds" and by changing "drawing entitled ' Lyndon B. Johnson National Historic Site Boundary Map', numbered NHS-LBJ-20,000 and dated September 1969" to "drawings entitled ' Boundary Map, Lyndon B. Johnson National Historical Park', numbered 447 - 40,008 B and 447 - 40,000 A, and dated January 1980";

(2) in section 3,

// 16 USC 410kk-2. //

by changing "not more than $680,000 to provide for the development of" to "such sums as may be necessary to carry out the provisions of this Act, but not more than $4,100,000 for development and not more than $1,400,000 for the acquisition of lands and interests therein for"; and

(3) by changing " National Historic Site" whenever it appears to " National Historical Park".

TITLE VII MOUND CITY GROUP NATIONAL MONUMENT

Sec. 701. (a) In order to preserve in public ownership certain prehistoric archeological resources of outstanding significance for the benefit and education of the people of the United States the boundary of Mound City Group National Monument, Ohio, is revised to include the lands within the area generally depicted as " Parcel X" on the map entitled " Hopeton Earthworks Study Area", numbered 353/ 40,025 B, and dated May 1980, and within the area generally depicted as " Revised Monument Boundary" on the map entitled " Transfer of Jurisdiction, Mound City Group National Monument", numbered 353/40,001 A, and dated March 1978, which maps shall be on file and available for public inspection in the Office of the National Park Service, Department of the Interior. With respect to the lands within " Parcel X" above, the lands may be acquired only in fee and shall be limited to the mound area depicted on the above referenced map plus such other lands immediately adjacent to the mounds so as to assure adequate access and protection to the area: Provided, That the total area acquired in fee shall not exceed one hundred and fifty acres. Access to lands in the vicinity of the mounds by existing roadways shall in no manner be encumbered by Federal acquisition or by the administration of the monument.

(b) Within the boundary of the national monument, the Secretary is authorized to acquire lands and waters by donation, purchase with donated or appropriated funds, transfer from any other Federal agency, or exchange. Notwithstanding any other provision of law to the contrary, Federal lands in the vicinity of the monument which are determined to be surplus to the needs of the United States shall upon the request of the Secretary be transferred to the Secretary for use by him in acquiring lands within the monument by exchange.

(c) The Secretary shall, in consultation with interested organizations and individuals, investigate other sites in the region which contain archeological data illustrating the prehistoric Hopewellian civilization that flourished in the Eastern United States, and as a part of this investigation he shall identify those sites which he determines should be protected as part of the Mound City Group National Monument. Not later than two complete fiscal years from the effective date of this section, the Secretary shall transmit a report of his investigation to the Committee on Interior and Insular Affairs of the United States House of Representatives and the Committee on Energy and Natural Resources of the United States Senate, together with his recommendations for such further legislation as may be appropriate.

(d) There is authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, not to exceed $1,000,000 for the acquisition of lands and waters and not to exceed $100,000 for the development of facilities and the conduct of archeological investigations on the properties acquired pursuant to this section.

TITLE VIII THEODORE ROOSEVELT INAUGURAL NATIONAL HISTORIC SITE

Sec. 801. The first two sections of the Act // 16 USC 461 // entitled " An Act to provide for the acquisition and preservation of the real property known as the Ansley Wilcox House in Buffalo, New York, as a national historic site", approved November 2, 1966 (Public Law 89 - 708), are amended to read as follows: " That, notwithstanding any other provision of law, the Secretary of the Interior shall acquire on behalf of the United States the real property described in section 3 of this Act, known as the Ansley Wilcox House, which real property is of national historic significance as the place in which Theodore Roosevelt took the oath of office as President of the United States on September 14, 1901, following the assassination of President William Mc Kinley. Such property is hereby designated as the Theodore Roosevelt Inaugural National Historic Site.

" Sec. 2. (a) Notwithstanding any other provision of law, the property referred to in the first section of this Act shall be administered by the Secretary of the Interior, acting through the National Park Sevice, in accordance with this section and provisions of law generally applicable to units of the National Park System, including the Act entitled ' An Act to establish a National Park Service, and for other purposes', approved August 25, 1916 (39 Stat. 535; 16 U.S.C. 1, 2 - 4), and the provisions of the Act entitled ' An Act to provide for the preservation of historic American sites, buildings, objects, and antiquities of national significance and for other purposes', approved August 21, 1935 (49 Stat. 666; 16 U.S.C. 461 - 7).

"(b) The Secretary of the Interior shall enter into cooperative agreements with the Theodore Roosevelt Inaugural Site Foundation or other qualified public or private entities for the operation, maintenance, management, development, and interpretation of the Theodore Roosevelt Inaugural National Historic Site.

"(c) Notwithstanding any other provision of law, the Department of the Interior share in any fiscal year of the annual operating costs of the Theodore Roosevelt Inaugural National Historic Site shall not exceed two-tthirds of such operating cost.".

TITLE IX STUDY COMMITTEE

Sec. 901. The Congress finds that those portions of the Mississippi, Saint Croix, and Minnesota River corridors lying within the counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington Counties in the State of Minnesota--,

(a) represent a significant recreation resource which would benefit a large population in the immediate vicinity;

(b) represent a significant historical and cultural resource worthy of preservation for the enjoyment and benefit of present and future generations;

(c) contain significant natural and scientific values that enhance the diversity and esthetic character of the metropolitan area;

(d) are important commercial resources vital to the continued economic well-being of the region and the Nation;

(e) are of national significance and constitute an area of national concern;

(f) are in need of cooperative recreational planning and management so as to improve efforts to further the preservation, enhancement, and use of these recreational resouces.

Sec. 902. (a) A Study Committee consisting of fifteen members shall be established to examine methods by which Federal, State, regional, and local governments can cooperate to enhance the recreational opportunities along those portions of the Mississippi, Minnesota, and Saint Croix Rivers described in section 901 of this title. The members of the Study Committee shall be selected as follows:

(1) A Chairperson shall be appointed by the Secretary of the Interior. The Secretary shall appoint the Chairperson from a list of nominees submitted by the Governor of Minnesota;

(2) A representative designated by the Secretary of the Interior shall serve as Vice Chairperson;

(3) One representative shall be designated by each of the

following: the Secretary of Agriculture, the Secretary of Commerce,

the Secretary of Transportation, and the Secretary of Defense;

(4) Nine other members shall be appointed by the Secretary of the Interior. The Secretary shall appoint these members from a list of nominees submitted by the Governor of Minnesota, the Metropolitan Council, and the mayors of Minneapolis and Saint Paul;

(5) The nominations and appointments required by section 902( a) shall include representatives of each of those interests described in section 904(e).

(b) The Governor of Minnesota, the Metropolitan Council, and the mayors of Minneapolis and Saint Paul shall submit the nominations called for in section 902(a) within forty-five days of the date on which this Act is signed into law. All appointments called for in section 902(a) shall be made within sixty days of the date on which this Act is signed into law.

(c) Each member of the Study Committee who is an officer or employee of the United States shall serve without additional compensation, but shall continue to receive the salary of his regular position when engaged in the performance of the duties vested in the Study Committee.

(d) All members of the Study Committee shall be reimbursed for travel, subsistence, and other necessary expenses incurred by them in the performance of the duties invested in the Study Committee from funds appropriated for this purpose.

(e) The Chairperson of the Study Committee, if other than one to whom paragraph (c) applies, shall receive per diem at the maximum daily rate for a GS-11 of the General Schedule when engaged in the actual performance of duties vested in the Study Committee from funds appropriated for this purpose.

(f) The Study Committee shall terminate within two years and two months from the date on which the initial appropriation for this title is signed into law. The funds appropriated under this title shall be available until expended.

Sec. 903. (a) If a multifunctional regional agency authorized by State law plan for and coordinate the development of the seven counties described in secton 901 is in existence on the date this bill is signed into law, the Governor of the State of Minnesota shall designate such multifunctional regional agency to assist in carrying out the study directed in this title. The agency shall hereinafter be referred to as " Regional Planning Agency".

(b) No later than forty-five days after receiving the report required by section 904(b), the Regional Planning Agency shall provide the Study Committee with written comments on that report. Upon receipt of those comments, the Study Committee shall submit the report, along with the written comments, to the President, the Congress, and appropriate State, regional, and local government units.

Sec. 904. (a) The Study Committee shall conduct a study on the preservation, enhancement, protection, and use of the designated recreation areas along the river corridors described in section 901 of this title. For the purpose of this title, designated areas shall be defined as those park, open space, recreation, or historical sites designated b an adopted Federal or State law or identified in a regional or local government plan.

(b) No later than two years after the date on which the initial appropriation for this title is signed into law, the Study Committee shall provide the Regional Planning Agency with a written report on the findings and conclusions of this study along with recommended policies.

(c) In its report, the Study Committee shall make recommendations as to the policies which should be adopted, and actions which should be taken to optimize the recreational, fish and wildlife, historic, natural, scientific, scenic, and cultural values of the river corridor areas referred to in section 901 of this title. The study may also include, but need not be limited to, recommendations for institutional changes, if any, which the Study Committee deems desirable and feasible to provide permanent management of the designated recreational areas along these river corridors. The report may also include recommendations for specific areas of local, regional, State, and Federal agency cooperation for river corridor management of the designated recreational areas. However,

(1) The Study Committee shall recommend no policy or action which would place unreasonable restrictions on existing or compatible economic uses of these resources.

(2) All policies and actions recommended by the Study Committee shall be compatible with and maintain the integrity of, existing federally designated management programs and units on the Saint Croix and Minnesota River Corridors.

(d) The Study Committee shall review and utilize existing studies and consider existing plans, programs and policies as they affect the present and future recreational use of the river corridors described in section 901 of this title.

(e) The Study Committee shall provide for public participation in the planning process in order to account for the concerns of recreational, commercial, cultural, and environmental interests, and State, regional, and local government.

Sec. 905. There are hereby authorized to be appropriated $300,000 to the Department of the Interior to be granted to the Regional Planning Agency to carry out the purposes of this Act.

TITLE X GOLDEN GATE NATIONAL RECREATION AREA

Sec. 1001. The Act of October 27, 1972 (86 Stat. 1299; 16 U.S.C. 460bb) is amended as follows:

(1) in subsection 2(a),

// 16 USC 460bb-1. //

at the end thereof, add the following: " The recreation area shall also include the lands and waters in San Mateo County generally depicted on the map entitled ' Sweeney Ridge Addition, Golden Gate National Recreation Area', numbered NRA GG-80,000- A, and dated May 1980.";

(2) strike out "map" in section 2(b) and substitute "maps";

(3) by adding " Point Montara", after " Point Diablo", in section 3(g);

// 16 USC 460bb-2. //

(4) add the following at the end of section 3(h): " That property known as the Pillar Point Military Reservation, under the jurisdiction of the Secretary of Defense shall be transferred to the administrative jurisdiction of the Secretary at such time as the property, or any portion thereof, becomes excess to the needs of the Department of Defense.";

(5) add at the end of section 3 the following:

"(p) With reference to those lands known as the San Francisco water department property shown on map numbered NRA GG-80,000- A, the Secretary shall administer such land in accordance with the provisions of the documents entitled ' Grant of Scenic Easement', and ' Grant of Scenic and Recreation Easement', both executed on January 15, 1969, between the city and county of San Francisco and the United States, including such amendments to the subject document as may be agreed to by the affected parties subsequent to the date of enactment of this subsection. The Secretary is authorized to seek appropriate agreements needed to establish a trail within this property and connecting with a suitable beach unit under the jurisdiction of the Secretary,";

(6) in subsection 5(b),

// 16 USC 460bb-4. //

change "seventeen" to "eighteen"; and

(7) insert a comma and the phrase " San Mateo," after " Marin" in section 5(e).

TITLE XI GRANT-KOHRS RANCH NATIONAL HISTORIC SITE

Sec. 1101. The Act entitled " An Act to authorize the establishment of the Grant-Kohrs Ranch National Historic Site in the State of Montana, and for other purposes", approved August 25, 1972 (86 Stat. 632) is amended--,

(1) by inserting the following after the period in the first section: " The boundary of the National Historic Site shall be as generally depicted on the map entitled, ' Boundary Map, Grant-Kohrs Ranch National Historic Site', numbered 451 - 80 - 013, and dated January 25, 1980, which shall be on file and available for

public inspection in the local and Washington, District

of Columbia, offices of the National Park Service, Department of the Interior."; and

(2) by striking out "$752,000" and "$2,075,000" in section 4 and inserting in lieu thereof "$1,100,000" and "$7,818,000," respectively.

TITLE XII JAMES A. GARFIELD NATIONAL HISTORIC SITE

Sec. 1201. // 16 USC 461 // In order to preserve for the benefit, education, and inspiration of present and future generations certain historically signficant properties associated with the life of James A. GARFIELD, the Secretary is authorized to acquire by donation, purchase with donated or appropriated funds, or exchange, the lands and buildings thereon known as " Lawnfield", comprising 7.56 acres at 1059 Mentor Avenue, Mentor, Ohio: Provided, That the portion of Lawnfield owned by the Western Reserve Historical Society may be only acquired by donation. Upon the acquisition of the aforesaid property, the Secretary may establish the same as the James A. Garfield National Historic Site by publication of a notice and boundary map in the Federal Register. The Secretary shall administer the site in accordance with the Act of August 25, 1916 (39 Stat. 535), // 43 USC 1457, 16 USC 1, 2, 3, 22, 43. // as amended and supplemented, and the Act of August 21, 1935 (49 Stat. 666), // 16 USC 450m, 450n, 461, 462. // as amended, and he may enter into an agreement with the Western Reserve Historical Society pursuant to which the Society may operate and maintain the site and charge reasonable admission fees, notwithstanding any other provision of law, which may be used to defray the costs of such operation and maintenance.

Sec. 1202. There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this title, but not to exceed $205,000 for the acquisition of lands and interests in lands, and $250,000 for development.

TITLE XIII KEITH SEBELIUS LAKE

Sec. 1301. The water impounded by the Norton Dam, a component of the Almena Unit of the Pick-Sloan Missouri River Basin project, in the State of Kansas, constructed under the general authority of the Act of July 24, 1946 (60 Stat. 641 et seq.) is hereby designated and hereafter shall be known as the " Keith Sebelius Lake". Any law, regulation, record, map, or other document of the United States referring to the waters impounded by the Norton Dam unit of this project shall be held to refer to the " Keith Sebelius Lake", and any future regulations, records, maps, or other documents of the United States, in reference to these waters, shall bear the name " Keith Sebelius Lake".

TITLE XIV MONOCACY NATIONAL BATTLEFIELD

Sec. 140. (a) The Act // 16 USC 430j. // entitled " An Act to establish a National Military Park at the battlefield of Monocacy, Maryland" approved June 21, 1934 (48 Stat. 1198) is amended by revising the first section thereof to read as follows: " That in order to commemorate the Battle of Monocacy, Maryland, and to preserve for historical purposes the breastworks, earthworks, walls, or other defenses or shelters used by the armies therein, the battlefield at Monocacy in the State of Maryland is hereby established as the Monocacy National Battlefield. The battlefield shall comprise the area within the boundary generally depicted on the map entitled ' Monocacy National Battlefield', numbered 894/40,001 A, and dated April 1980, which shall be on file and available for public inspection in the Office of the National Park Service, Department of the Interior.".

(b) In addition to other funds available for purposes of the park referred to in subsection (a), there is authorized to be appropriated up to an additional $725,000 for acquisition of lands and interests in lands and $1,250,000 for development.

TITLE XV ROGERS C. B. MORTON RECOGNITION

Sec. 1501. The Secretary is authorized to commemorate, at Assateague Island National Seashore, Maryland, the contributions of Rogers C. B. Morton, as a Member of Congress, and later as Secretary of the Interior, toward the development of the Seashore and to conservation in general. Such commemoration shall be in the form of an appropriate plaque or monument, suitably located, or may subsequently take the form of dedication of a suitable structure. Within one year of the effective date of this section, the Secretary shall inform, in writing, the Committee on Interior and Insular Affairs of the United States House of Representatives and the Committee on Energy and Natural Resources of the United States Senate, as to actions he has taken to implement the provisions of this section.

TITLE XVI WOMEN'S RIGHTS NATIONAL HISTORICAL PARK

Sec. 1601. // 16 USC 410 ll. // (a) The Congress finds that--,

(1) The Women's Rights Convention held at the Wesleyan Methodist Chapel in Seneca Falls, New York, in 1848 was an event of major importance in the history of the United States because it marked the formal beginning of the struggle of women for their equal rights.

(2) The Declaration of Sentiments approved by the 1848 Women's Rights Convention is a document of enduring relevance, which expresses the goal that equality and justice should be extended to all people without regard to sex.

(3) There are nine sites located in Seneca Falls and Waterloo, New York, associated with the nineteenth century women's rights movement which should be recognized, preserved, and interpreted for the benefit of the public.

(b) It is the purpose of this section to preserve and interpret for the education, inspiration, and benefit of present and future generations the nationally significant historical and cultural sites and structures associated with the struggle for equal rights for women and to cooperate with State and local entities to preserve the character and historic setting of such sites and structures.

(c) To carry out the purpose of this section there is hereby established the Women's Rights National Historical Park (hereinafter in this section referred to as the "park"). The park shall consist initially of the following designated sites in Seneca Falls and Waterloo, New York:

(1) Stanton House, 32 Washington Street, Seneca Falls;

(2) dwelling, 30 Washington Street, Seneca Falls;

(3) dwelling, 34 Washington Street, Seneca Falls;

(4) lot, 26 - 28 Washington Street, Seneca Falls;

(5) former Wesleyan Chapel, 126 Fall Street, Seneca Falls;

(6) theater, 128 Fall Street, Seneca Falls;

(7) Bloomer House, 53 East Bayard Street, Seneca Falls;

(8) Mc Clintock House, 16 East Williams Street, Waterloo; and

(9) Hunt House, 401 East Main Street, Waterloo.

(d) The Secretary is authorized to acquire by donation, purchase with donated or appropriated funds, transfer from any other Federal agency, or exchange lands and interests therein within sites designated as part of the park, except that the Secretary may not acquire the fee simple title to the land comprising the sites designated in paragraphs (7) through (9) of subsection (c). Lands and interests therein owned by a State or political subdivision thereof may be acquired only by donation.

(e) The Secretary is authorized to enter into cooperative agreements with the owners of properties designated as part of the park, pursuant to which the Secretary may mark, interpret, improve, restore, and provide technical assistance with respect to the preservation and interpretation of such properties. Such agreements shall contain, but need not be limited to, provisions that the Secretary shall have the right of access at reasonable times to public portions of the property for interpretive and other purposes, and that no changes or alterations shall be made in the property except by mutual agreement.

(f) The Secretary shall encourage State and local governmental agencies to develop and implement plans for the preservation and rehabilitation of sites designated as part of the park and their immediate environs, in order to preserve the historic character of the setting in which such sites are located. The Secretary may provide technical and financial assistance to such agencies in the development and implementation of such plans, but financial assistance may not exceed 50 per centum of the cost thereof.

(g) The Secretary shall administer the park in accordance with the provisions of this section and the provisions of law generally applicable to the administration of units of the National Park System, including the Act of August 25, 1916 (39 Stat. 535; 16 U.S.C. 1, 2 - 4) and the Act of August 21, 1935 (49 Stat. 666; 16 U.S.C. 461 - 7).

(h)(1) There is hereby established the Women's Rights National Historical Park Advisory Commission (hereinafter referred to as the " Commission"). The Commission shall consist of eleven members, each appointed by the Secretary for a term of five years as follows:

(A) One member appointed from recommendations submitted by the Elizabeth Cady Stanton Foundation;

(B) One member appointed from recommendations submitted by the Women's Hall of Fame;

(C) Two members appointed from recommendations submitted by the Governor of New York;

(D) One member appointed from recommendations submitted by the village of Seneca Falls;

(E) One member appointed from recommendations submitted by the town of Seneca Falls; and

(F) Five members appointed by the Secretary, at least one of whom shall represent an institution of higher learning and at least two of whom shall represent national women's rights organizations.

(2) The Secretary shall designate one member to be the Chair of the Commission. Any vacancy on the commission shall be filled in the same manner in which the original appointment was made.

(3) Members of the Commission shall serve without compensation as such, but the Secretary may pay the expenses reasonably incurred by the Commission and its members in carrying out their responsibilities under this section upon presentation of vouchers signed by the Chair of the Commission.

(4) The function of the Commission shall be to advise the Secretary with respect to matters relating to the administration of the park and the carrying out of the provisions of this section. The Secretary shall consult with the Commission from time to time with respect to his responsibilities and authorities under this section.

(5) The Commission shall terminate ten years from the effective date of this section.

(i) There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, but not to exceed $490,000 for acquisition, and $500,000 for development.

TITLE XVII AUTHORIZATION OF APPROPRIATIONS

Sec. 1701. Authorization of amounts to be appropriated under this Act shall be effective October 1, 1981. Authority to enter into cooperative agreements and to make payments under this Act shall be effective only to such extent or in such amounts as are provided in advance in appropriation Acts.

TITLE XVIII DEFINITION

Sec. 1801. As used in this Act, except as otherwise specifically provided, the term " Secretary" means the Secretary of the Interior.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1520 (Comm. on Conference).

SENATE REPORT No. 96 - 755 (Comm. on Energy and Natural Resources).

CONGRESSIONAL RECORD, Vol. 126 (1980):

June 5, considered and passed Senate.

June 17, considered and passed House, amended.

Dec. 3, House and Senate agreed to conference report.

PUBLIC LAW 96-606, 94 STAT. 3534

96th CONGRESS, H.R. 5737 DECEMBER 28, 1980
An Act To amend the International Claims Settlement Act

of 1949 to allow recovery by

United States nationals for losses incurred in

Vietnam.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the International Claims Settlement Act of 1949 (22 U.S.C. 1621 et seq.) is amended by adding at the end thereof the following new title:

" TITLE VII " PURPOSE OF TITLE

" SEC. 701. // 22 USC 1645. // It is the purpose of this title to provide for the determination of the validity and amounts of outstanding claims against Vietnam which arose out of the nationalization, expropriation, or other taking of (or special measures directed against) property of nationals of the United States. This title shall not be construed as authorizing or as any intention to authorize an appropriation by the United States for the purpose of paying such claims.

" DEFINITIONS

" SEC. 702. // 22 USC 1645a. // As used in this title--,

"(1) the term 'national of the United States' means--,

"(A) a natural person who is a citizen of the United

States;

and

"(B) a corporation or other legal entity which is

organized

under the laws of the United States or of any State,

the

District of Columbia, or the Commonwealth of Puerto

Rico, if

natural persons who are citizens of the United States

own,

directly or indirectly, 50 per centum or more of the

outstanding

capital stock or other beneficial interest of such

corporation

or entity;

"(2) the term ' Commission' means the Foreign Claims Settlement Commission of the United States;

"(3) the term 'property' means--,

"(A) any property, right, or interest, including any

lease--,

hold interest,

"(B) any debt owed by Vietnam or by any enterprise which has been nationalized, expropriated, or otherwise taken

by

Vietnam, and

"(C) any debt which is a charge on property which has been nationalized, expropriated, or otherwise taken by Vietnam;

"(4) the term ' Vietnam' means--,

"(A) the Government of the Socialist Republic of

Vietnam,

"(B) any predecessor governing authority operating in South Vietnam on or after April 29, 1975, including

the

Provisional Revolutionary Government of South

Vietnam,

"(C) the Government of the former Democratic Republic

of

Vietnam, and

"(D) any political subdivision, agency, or

instrumentality

of any of the entities referred to in subparagraphs

(A), (B),

and (C); and

"(5) the term ' Claims Fund' means the special fund established in the Treasury of the United States composed of such sums as may be paid to or realized by the United States pursuant to the terms of any agreement settling those claims described in section 703 that may be entered into between the Governments of the United States and Vietnam.

" RECEIPT AND DETERMINATION OF CLAIMS

" Sec. 703. // 22 USC 1645b. // The Commission shall receive and determine in accordance with applicable substantive law, including international law, the validity and amounts of claims by nationals of the United States against Vietnam arising on or after April 29, 1975, for losses incurred as a result of the nationalization, expropriation, or other taking of (or special measures directed against) property which, at the time of such nationalization, expropriation, or other taking, was owned wholly or partially, directly or indirectly, by nationals of the United States to whom no restoration or adequate compensation for such property has been made. Such claims must be submitted to the Commission within the period specified by the Commission by notice published in the Federal Register (which period shall not be more than a period of two years beginning on the date of such publication) within sixty days after the date of the enactment of this title or of legislation making appropriations to the Commission for payment of administrative expenses incurred in carrying out its functions under this title, whichever date is later.

" OWNERSHIP OF CLAIMS

" Sec. 704. // 22 USC 1645c. // A claim may be favorably considered under section 703 of this Act only if the property right on which it is based was owned, wholly or partially, directly or indirectly, by a national of the United States on the date of loss and only to the extent that the claim has been held by one or more nationals of the United States continuously from the date that the loss occurred until the date of filing with the Commission.

" CORPORATE CLAIMS

" Sec. 705. // 22 USC 1645d. // (a) A claim under section 703 of this Act based upon an ownership interest in any corporation, association, or other entity which is a national of the United States may not be considered. A claim under section 703 based upon a debt or other obligation owing by any corporation, association, or other entity organized under the laws of the United States, or of any State, the District of Columbia, or the Commonwealth of Puerto Rico may be considered only if such debt or other obligation is a charge on property which has been nationalized, expropriated, or otherwise taken by Vietnam.

"(b) A claim under section 703 based upon a direct ownership interest in a corporation, association, or other entity may be considered, subject to the other provisions of this title, if such corporation, association, or other entity on the date of the loss was not a national of the United States, without regard to the per centum of ownership vested in the claimant.

"(c) A claim under section 703 based upon an indirect ownership interest in a corporation, association, or other entity may be considered, subject to the other provisions of this title, only if at least 25 per centum of the entire ownership interest thereof, at the time of such loss, was vested in nationals of the United States or if, at the time of the loss, nationals of the United States in fact controlled the corporation, association, or entity, as determined by the Commission.

"(D) The amount of any claim covered by subsection (b) or (c) of this section shall be calculated on the basis of the total loss suffered by the corporation, association, or other entity, with respect to which the claim is made, and shall bear the same proportion to such loss as the ownership interest of the claimant at the time of loss bears to the entire ownership interest thereof.

" OFFSETS

" Sec. 706. // 22 USC 1645e. // In determining the amount of any claim under this title, the Commission shall deduct all amounts the claimant has received from any source on account of the same loss or losses for which the claim is filed.

" CERTIFICATION; ASSIGNED CLAIMS

" Sec. 707. // 22 USC 1645f. // (a) The Commission shall certify to each claimant who files a claim under this title the amount determined by the Commission to be the loss suffered by the claimant which is covered by this title. The Commission shall certify to the Secretary of State such amount and the basic information underlying that amount, together with a statement of the evidence relied upon and the reasoning employed in making that determination.

"(b) In any case in which a claim under this title is assigned by purchase before the Commission determines the amount due on that claim, the amount so determined shall not exceed the amount of actual consideration paid by the last such assignee.

" CONSOLIDATED AWARDS

" Sec. 708. // 22 USC 1645g. // With respect to any claim under section 703 of this Act which, at the time of the award, is vested in persons other than the person by whom the original loss was sustained, the Commission shall issue a consolidated award in favor of all claimants then entitled to the award, which award shall indicate the respective interests of such claimants in the award, and all such claimants shall participate, in proportion to their indicated interests, in any payments that may be made under this title in all respects as if the award had been in favor of a single person.

" CLAIMS FUND

" Sec. 709. // 22 USC 1645h. // (a) The Secretary of the Treasury may establish in the Treasury of the United States the Claims Fund for the payment of unsatisfied claims of nationals of the United States against Vietnam, as authorized by this title.

"(b) The Secretary of the Treasury shall deduct from any amounts covered into the Claims Fund an amount equal to 5 per centum thereof as reimbursement to the Government of the United States for expenses incurred by the Commission and by the Treasury Department in the administration of this title. The amounts so deducted shall be covered into the Treasury as miscellaneous receipts.

" AWARD PAYMENT PROCEDURES

" Sec. 710. // 22 USC 1645i. // (a) The Commission shall certify to the Secretary of the Treasury, in terms of United States currency, each award made pursuant to section 703 of this Act.

"(b)(1) Upon certification of each award made pursuant to section 703, the Secretary of the Treasury shall, out of the sums covered into the Claims Fund, make payments on account of such awards as follows, and in the following order of priority:

"(A) Payment in the amount of $2,500 or the principal amount of the award, whichever is less.

"(B) Thereafter, payments from time to time, in ratable proportions, on account of the unpaid balance of the principal amounts of all awards according to the proportions which the unpaid balance of such awards bear to the total amount in the Claims Fund available for distribution at the time such payments are made.

"(2) After payment has been made in full of the principal amounts of all awards pursuant to paragraph (1), pro rata payments may be made on account of any interest that may be allowed on such awards.

"(c) Payments or applications for payments under subsection (b) shall be made in accordance with such regulations as the Secretary of the Treasury may prescribe.

" SETTLEMENT PERIOD

" Sec. 711. // 22 USC 1645j. // The Commission shall complete its affairs in connection with the settlement of claims pursuant to this title not later than three years after the final date for the filing of claims as provided in section 703 of this Act.

" TRANSFER OF RECORDS

" Sec. 712. // 22 USC 1645k. // The Secretary of State, the Secretary of the Treasury, and the Secretary of Defense shall transfer or otherwise make available to the Commission such records and documents relating to claims authorized by this title as may be required by the Commission in carrying out its functions under this title.

" AUTHORIZATION OF APPROPRIATIONS

" Sec. 713. // 22 USC 1645l. // There are authorized to be appropriated for any fiscal year beginning on or after October 1, 1980, such sums as may be necessary to enable the Commission and the Treasury Department to pay their respective administrative expenses incurred in carrying out their functions under this title. Amounts appropriated under this section may remain available until expended.

" FEES FOR SERVICES

" Sec. 714. // 22 USC 1645m. // No remuneration on account of services rendered on behalf of any claimant, in connection with any claim filed with the Commission under this title, shall exceed 10 per centum of the total amount paid pursuant to any award certified under the provisions of this title on account of such claim. Any agreement to the contrary shall be unlawful and void. Whoever, in the United States or elsewhere, demands or receives, on account of services so rendered, any remuneration in excess of the maximum permitted by this section shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $5,000 or imprisoned not more than twelve months, or both.

" APPLICATION OF OTHER PROVISIONS OF THE ACT

" Sec. 715. // 22 USC 1645n. // (a) To the extent they are not inconsistent with the provisions of this title, // 22 USC 1621. // the following provisions of title I of this Act shall be applicable to this title: subsections (b), (c), (d), (e), and (h) of section 4 and subsections (c), (d), (e), and (f) of section 7. // 22 Usc 1623, 1626. // Any reference in such provisions to 'this title' shall be deemed to be a reference to those provisions and to this title.

"(b) Except as otherwise provided in this title and in those provisions of title I referred to in subsection (a), the Commission shall comply with the provisions of subchapter II of chapter 5, // 5 USC 551. // and the provisions of chapter 7, of title 5, United States Code. // 5 USC 201. //

" SEPARABILITY

" Sec. 716. // 22 USC 1645o. // If any provision of this title or the application thereof to any person or circumstances is held invalid, the remainder of this title or the application of such provision to other persons or circumstances shall not be affected.".

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 915 (Comm. on Foreign Affairs).

CONGRESSIONAL RECORD, Vol. 126 (1980):

May 5, considered and passed House.

Dec. 15, considered and passed Senate.

PUBLIC Law 96-605, 94 STAT. 3521, MISCELLANEOUS REVENUE ACT OF 1980.

96th CONGRESS, H.S. 7956 DECEMBER 28, 1980
An Act To make various changes in the tax laws.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT of 1954 CODE.

(a) Short Title.-This Act // 26 USC 1 // may be cited as the " Miscellaneous Revenue Act of 1980".

(b) Amendment of 1954 Code.-Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1954. // 26 USC 1. //

TITLE I-AMENDMENTS RELATING TO INCOME TAX GENERALLY

SEC. 101. TREATMENT OF COMMUNITY INCOME WHERE SPOUSES LIVE APART.

(a) General Rule.-Part I of subchapter B of chapter 1 (defining gross income, adjusted gross income, taxable income, etc.) is amended by adding at the end thereof the following new section:

" SEC. 66. // 26 USC 66. // TREATMENT OF COMMUNITY INCOME WHERE SPOUSES LIVE APART.

"(a) General Rule.-If--,

"(1) 2 individuals are married to each other at any time during a calendar year;

"(2) such individuals--,

"(A) live apart at all times during the calendar year,

and

"(B) do not file a joint return under section 6013 with

each

other for a taxable year beginning or ending in the

calendar

year;

"(3) one or both of such individuals have earned income for the calendar year which is community income; and

"(4) no portion of such earned income is transferred (directly or indirectly) between such individuals before the close of the calendar year,

then, for purposes of this title, any community income of such individuals for the calendar year shall be treated in accordance with the rules provided by section 879(a). // 26 USC 879. //

"(b) Definitions.-For purposes of this section--,

"(1) Earned income.-The term 'earned income' has the meaning given to such term by section 911(b).

// 26 USC 911. //

"(2) Community income.-The term 'community income' means income which, under applicable community property laws, is treated as community income.

"(3) Community property laws.-The term 'community property laws' means the community property laws of a State, a foreign country, or a possession of the United States."

(b) Clerical Amendment.-The table of sections for part I of subchapter B of chapter 1 is amended by adding at the end thereof the following new item:

" Sec. 66. Treatment of community income where spouses live apart."

(c) Effective Date.-The amendments made by this section // 22 USC 66. // shall apply to calendar years beginning after December 31, 1980.

SEC. 102. AMORTIZATION OF START- UP EXPENDITURES.

(a) In General.-Part VI of subchapter B of chapter 1 (relating to itemized deductions for individuals and corporations) is amended by adding at the end thereof the following new section:

" SEC. 195. // 26 USC 195. // START- UP EXPENDITURES.

"(a) Election To Amortize.-Start-up expenditures may, at the election of the taxpayer, be treated as deferred expenses. Such deferred expenses shall be allowed as a deduction ratably over such period of not less than 60 months as may be selected by the taxpayer (beginning with the month in which the business begins).

"(b) Start-Up Expenditures.-For purposes of this section, the term 'start-up expenditure' means any amount--,

"(1) paid or incurred in connection with--,

"(A) investigating the creation or acquisition of an

active

trade or business, or

"(B) creating an active trade or business, and

"(2) which, if paid or incurred in connection with the expansion of an existing trade or business (in the same field as the trade or business referred to in paragraph (1)), would be allowable as a deduction for the taxable year in which paid or incurred.

"(c) Election.--,

"(1) Time for making election.-An election under subsection (a) shall be made not later than the time prescribed by law for filing the return for the taxable year in which the business begins (including extensions thereof).

"(2) Scope of election.-The period selected under subsection (a) shall be adhered to in computing taxable income for the

taxable year for which the election is made and all subsequent

taxable years.

"(3) Manner of making election.-An election under subsection (a) shll be made in such manner as the Secretary shall by regulations prescribe.

"(d) Business Beginning.-For purposes of this section, an acquired trade or business shall be treated as beginning when the taxpayer acquires it."

(b) Clerical Amendment.-The table of sections for part VI of subchapter B of chapter 1 is amended by adding at the end thereof the following new item:

" Sec. 195. Start-up expenditures."

(c) Effective Date.-The amendements made by this section // 26 USC 195 // shall apply to amounts paid or incurred after July 29, 1980, in taxable years ending after such date

SEC. 104. REVISION OF SOURCE RULES FOR INCOME FROM CERTAIN LEASED AIRCRAFT, VESSELS, AND SPACECRAFT.

(a) In General.-Subsection (e) of section 861 // 26 USC 861. // relating to election to treat income from certain aircraft and vessels as income from sources within the United States) is amended to read as follows:

"(e) Income From Certain Leased Aircraft, Vessels, and Spacecraft Treated as Income From Sources Within the United States.--,

"(1) In general.-For purposes of subsection (a) and section 862(a), if--,

// 26 USC 862 //

"(A) a taxpayer owning a craft which is section 38

// 26 USC 38. // property

(or would be section 38 property but for

section 48(a)(5))

// 26 USC 48. //

leases such craft to a United States person, other

than a

member of the same controlled group of corporations (as

defined in section 1563)

// 26 USC 1563. //

as the taxpayer, and

"(B) such craft is manufactured or constructed in the United States,

then all amounts includible in gross income by the taxpayer with respect to such craft for any taxable year ending after the commencement of such lease (whether during or after the period of such lease), including gain from sale, exchange, or other disposition of such craft, shall be treated as income from sources within the United States.

"(2) Certain transfers involving carryover basis.-If the taxpayer transfers or distributes a craft to which paragraph (1) applied and the basis of such craft in the hands of the transferee or distributee is determined by reference to its basis in the hands of the transferor or distributor, paragraph (1) shall continue to apply to such craft in the hands of the transferee or distributee.

"(3) Craft defined.-For purposes of this subsection, the term 'craft' means a vessel, aircraft, or spacecraft.".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 861 // shall apply to property first leased after the date of the enactment of this Act.

SEC. 105. TAXATION OF HOMEOWNERS ASSOCIATIONS.

(a) General Rule.-Subsection (b) of section 528 // 26 USC 528. // (relating to tax imposed with respect to certain homeowners associations) is amended to read as follows:

"(b) Tax Imposed.-A tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association. Such tax shall be equal to 30 percent of the homeowners association taxable income.".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 528 // shall apply to taxable years beginning after December 31, 1980.

SEC. 106. TREATMENT OF CERTAIN INCOME OF MUTUAL OR COOPERATIVE ELECTRIC AND TELEPHONE COMPANIES.

(a) Treatment of Cetain Income for Purposes of Tax Exempt Status.- Paragraph (12) of section 501(c) // 26 USC 501. // (relating to list of exempt organizations) is amended--,

(1) by striking out "(12)" and inserting in lieu thereof "(12)(A)",

(2) by striking out the second sentence, and

(3) by adding at the end therof the following new subparagraphs:

"(B) In the case of a mutual or cooperative telephone company, subparagraph (A) shall be applied without taking into account any income received or accrued--,

"(i) from a nonmember telephone company for the

performance

of communication services which involve memvers

of the mutual or cooperative telephone company,

"(ii) from qualified pole rentals, or "(iii) from the sale of display listings in a directory

furnished

to the members of the mutual or cooperative telephone

company.

"(C) In the case of a mutual or cooperative electric company, subparagraph (A) shall be applied without taking into account any income received or accrued from qualified pole rentals.

"(D) For purposes of this paragraph, the term 'qualified pole rental' means any rental of a pole (or other structure used to support wires) if such pole (or other structure)--,

"(i) is used by the telephone or electric company to

support

one or more wires which are used by such company in

providing telephone or electric services to its

members, and

"(ii) is used pursuant to the rental to support one or

more

wires (in addition to the wires described in clause (i)

for use

in connection with the transmission by wire of

electricity or

of telephone or other communications.

For purposes of the preceding sentence, the term 'rental' includes any sale of the right to use the pole (or other structure)."

(b) Engaging in Pole Rentals Treated as Not Engaging in Unrelated Trade or Business.-Section 513 // 26 USC 513. // (defining unrelated trade or business) is amended by adding at the end thereof the following new subsection:

"(g) Certain Pole Rentals.-In the case of a mutual or cooperative telephone or electric company, the term 'unrelated trade or business' does not include engaging in qualified pole rentals (as defined in section 501(c)(12)(D))."

(c) Effective Dates.--,

(1) Subsection (a).-The amendments made by subsection (a)

// 26 USC 501 //

shall apply to all taxable years to which the Internal Revenue Code of 1954

// 26 USC 119 //

applies.

(2) Subsection (b).-The amendment made by subsection (b)

// 26 USC 513 //

shall apply to taxable years beginning after December 31, 1969.

SEC. 107. EXEMPTION FOR CERTAIN SUBSISTENCE ALLOWANCES RECEIVED BY CERTAIN POLICE OFFICERS BEFORE JANUARY 1, 1978.

(a) General Rule.-Subsection (b) of section 3 of the Act of October 7, 1978, // 26 USC 119 // entitled " An Act to prohibit the issuance of regulations on the taxation of fringe benefits, and for other purposes" is amended--,

(1) by striking out " January 1, 1977" and inserting in lieu thereof " January 1, 1974", and

(2) by striking out "calendar year 1977" and inserting in lieu thereof "calendar year 1974, 1975, 1976, or 1977".

(b) Statute of Limitations.-In the case of any allowance received during calendar year 1974, 1975, 1976, or 1977, subsections (a)(2) and (e) of such section 3 // 26 USC 119 // shall be applied by substituting the date one year after the date of the enactment of this Act for " April 15, 1979" each place it appears.

SEC. 108. TREATMENT OF CERTAIN EXPENSES INCLUDIBLE IN THE INCOME OF THE RECIPIENT.

(a) In General.-Subsection (e) of section 274 // 26 USC 274. // (relating to specific exceptions to application of disallowance of certain entertainment, etc., expenses) is amended by inserting after paragraph (9) the following new paragraph:

"(10) Expenses includible in income of persons who are not employes.-Expenses paid or incurred by the taxpayer for goods, services, and facilities to the extent that the expenses are includible in the gross income of a recipient of the entertainment, amusement, or recreation who is not an employee of the taxpayer as compensation for services rendered or as a prize or award under section 74.

// 26 USC 74. //

The preceding sentence shall not apply to any amount paid or incurred by the taxpayer if such amount is required to be included (or would be so required except that the amount is less than $600) in any information return filed by such taxpayer under part III of subchapter A of chapter 61

// 26 USC 6031. //

and is not so included."

(b) Effective Date.-The amendment made by this section // 26 USC 274 // shall apply to any expenses paid or incurred after December 31, 1980, in taxable years ending after such date.

SEC. 109. INVESTMENT CREDIT FOR CERTAIN PROPERTY USED IN MARITIME SATELLITE COMMUNICATIONS.

(a) General Rule.-Paragraph (5) of section 48(a) // 26 USC 48. // (relating to property used by governmental units) is amended to read as follows:

"(5) Property used by governmental units.-Property used by the United States, any State or political subdivision thereof, any international organization, or any agency or instrumentality of any of the foregoing shall not be treated as section 38

// 26 USC 38. //

property. For purposes of the preceding sentence, the International Telecommunications Satellite Consortium, the International Maritime Satellite Organization, and any successor organization of such Consortium or Organization shall not be treated as an international organization."

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 48 // shall apply to taxable years beginning after December 31, 1979.

SEC. 110. Acquisition INDEBTEDNESS.

(a) In General.-Section 514(c) of the Internal Revenue Code of 1954 // 26 USC 514. // (defining acquisition indebtedness) is amended by adding the end thereof the following new paragraph:

"(9) Real property acquired by qualified trust.-For purposes of this section--,

"(A) In general.-Except as provided in subparagraph (B), the term 'acquisition indebtedness' does not

include

indebtedness incurred by a qualified trust in acquiring

or

improving any real property.

"(B) Exceptions.-The provisions of subparagraph (A) shall not apply in any case in which--, "(i) the acquisition price is not a fixed amount

determined

as of the date of acquisition;

"(ii) the amount of any indebtedness or any other amount payable with respect to such indebtedness, or the time for making any payment of any such amount, is dependent, in whole or in part, upon any revenue, income, or profits derived from such real property; "(iii) the real property is at any time after the

acquisition

leased by the qualified trust to the person selling

such property to such trust or to any person who bears a

relationship described in section 267(b)

// 26 USC 267. //

to such person;

"(iv) the real property is acquired from, or is at any time after the acquisition leased by the qualified trust to, any person who--, "(I) bears a relationship which is described in section 4975(e)(2) (C), (E), or (G)

// 26 USC 4975. //

to any plan with

respect to which such trust was formed, or

"(II) bears a relationship which is described in section 4975(e)(2) (F) or (H) to any person described in subclause (I); or "(v) any person described in clause (iii) or (iv) provides the qualified trust with nonrecourse financing in

connection

with such transaction and such debt--,

"(I) is subordinate to any other indebtedness on such property, or "(II) bears interest at a rate which is significantly less than the rate available from any person not described in clause (iii) or (iv) at the time such indebtedness is incurred. "(C) Qualified trust.-For purposes of this paragraph, the term 'qualified trust' means any trust which

constitutes

a qualified trust under seection 401."

// 26 USC 401. //

(b) No Precedent.-The amendment made by subsection (a) // 26 USC 514 // shall not be considered a precedent with respect to extending such amendment (or similar rules) to any other person.

(c) Effective Date.-The amendment made by subsection (a) // 26 USC 514 // shall apply to taxable years beginning after December 31, 1980.

TITLE II-AMENDMENTS RELATING TO PENSION PLANS Subtitle A-Prevention of Abuse of Certain Pension Plan Provisions

SEC. 201. PREVENTION OF ABUSE OF CERTAIN PENSION PLAN PROVISIONS THROUGH THE USE OF SEPARATE CORPORATIONS OR OTHER ORGANIZATIONS:

(a) In General.-Section 414 // 26 USC 414. // (relating to definitions and special rules relating to pension plan, etc.) is amended by adding at the end thereof the following new subsection:

"(m) Employees of an Affiliated Service Group.--,

"(1) In general.-For purposes of the employee benefit requirements listed in paragraph (4), except to the extent otherwise provided in regulations, all employees of the members of an affiliated service group shall be treated as employed by a single employer.

"(2) Affiliated service group.-For purposes of this subsection, the term 'affiliated service group' means a group consisting of a service organization (hereinafter in this paragraph referred to as the 'first organization') and one or more of the following:

"(A) any service organization which--, "(i) is a shareholder or partner in the first

organization,

and

"(ii) regularly performs services for the first

organization

or is regularly associated with the first organization

in performing services for third persons, and

"(B) any other organization if--, "(i) a significant portion of the business of such

organization

is the performance of services (for the first

organization, for organizations described in

subparagraph

(A), or for both) of a type historically performed in

such service field by employees, and

"(ii) 10 percent or more of the interests in such organization is held by persons who are officers, highly compensated employees, or owners of the first

organization

or an organization described in subparagraph (A).

"(3) Service organizations.-For purposes of this subsection, the term 'service organization' means an organization the principal business of which is the performance of services.

"(4) Employee benefit requirements.-For purposes of this subsection, the employee benefit requirements listed in this paragraph are--,

"(A) paragraphs (3), (4), (7), and (16) of

section 401(a),

// 26 USC 401. //

"(B) sections 408(k), 410, 411, and 415,

// 26 USC 408, 410, 411, 415. //

"(C) section 105(h),

// 26 USC 105. //

and

"(D) section 125.

// 26 USC 125. //

"(5) Other definitions.-For purposes of this subsection--,

"(A) Organization defined.-The term 'organization' means a corporation, partnership, or other organization. "(B) Ownership.-In determining ownership, the

principles

of section 267(c)

// 26 USC 267. //

shall apply.

"(6) Prevention of avoidance.-The Secretary shall prescribe such regulations as may be necessary to prevent the avoidance with respect to service organizations, through the use of separate organizations, of any employee benefit requirement listed in paragraph (4)."

(b) Technical Amendments.--,

(1) Paragraph (8) of section 105(h)

// 26 USC 105. //

(relating to amount paid to highly compensated individuals under a discriminatory self-insured medical expense reimbursement plan) is amended--,

(A) by striking out "subsection (b) or (c) of

section 414" and

inserting in lieu thereof "subsection (b), (c), or (m)

of section

414", and

(B) by striking out "controlled groups" in the paragraph heading and inserting in lieu thereof "controlled

groups,

etc.".

(2) Paragraph (4) of section 125(g)

// 26 USC 125. //

(relating to special rules for cafeteria plans) is amended--,

(A) by striking out "subsection (b) or (c) of

section 414" and

inserting in lieu thereof "subsection (b), (c), or (m)

of section

414", and

(B) by striking out "controlled groups" in the paragraph heading and inserting in lieu thereof "controlled

groups,

etc.".

(c) Effective Dates.--,

(1) In general.-Except as provided in paragraph (2), the amendments made by this section

// 26 USC 414 //

shall apply to plan years ending after November 30, 1980.

(2) Plans in existence on november 30, 1980.-In the case of a plan in existence on November 30, 1980, the amendments made by this section shall apply to plan years beginning after November 30, 1980.

Subtitle B-Amendments Relating to Employee Stock Ownership Plans

SEC. 221. CASH DISTRIBUTION OPTION AND PUT OPTION FOR STOCK BONUS PLANS.

(a) In General.-Subsection (a) of section 401 // 26 USC 401. // (relating to requirements for qualification) is amended by inserting immediately before the last sentence thereof the following new paragraph:

"(23) A stock bonus plan which otherwise meets the requirements of this section shall not be considered to fail to meet the requirements of this section because it provides a cash distribution option to participants if that option meets the requirements of section 409 A(h)(2)."

// 26 USC 409 A. //

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 401 // shall apply with respect to plan years beginning after December 31, 1980.

SEC. 222. LIMITATION ON ANNUAL ADDITIONS TO PARTICIPANT ACCOUNTS UNDER EMPLOYEE STOCK OWNERSHIP PLANS.

(a) In General.-Subparagraph (A) of section 415(c)(6) // 26 USC 415. // (relating to special limitation for employee stock ownership plan) is amended by inserting ", or purchased with cash contributed," after "contributed".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 415 // shall apply with respect to years beginning after December 31, 1980.

SEC. 223. VALUATION OF EMPLOYER SECURITIES IN TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLANS.

(a) In General.-Clause (i) of section 48(n)(6)(B) // 26 USC 48. // (defining value for employer securities) is amended by striking out "the due date for filing the return for the taxable year (determined with regard to extensions)" and inserting in lieu thereof "the date on which the securities are contributed to the plan".

(b) Effective Date.-The amendments made by subsection (a) // 26 USC 48 // shall apply with respect to taxable years beginning after December 31, 1980.

SEC. 224. PARTICIPATION OF SUBSIDIARY CORPORATION IN TAX CREDIT EMPLOYEE STOCK OWNERSHIP PLAN.

(a) In General.-Paragraph (4) of section 409 A(1) // 26 USC 409 A. // (defining controlled group of corporations) is amended--,

(1) by striking out the caption and inserting in lieu thereof "(4) Application to controlled group of corporations.--,"

(2) by striking out " Common parent may own only" in the caption of subparagraph (B) and inserting in lieu thereof " Where common parent owns at least", and

(3) by adding at the end thereof the following new subparagraph:

"(C) Where common parent owns 100 percent of first tier subsidiary.-For purposes of subparagraph (A), if

the

common parent 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 at least 50 percent of

the

voting power of all classes of stock, and at least 50

percent of

each class of nonvoting stock, in a second tier

subsidiary of

the common parent, such second tier subsidiary (and all

other corporations below it in the chain which would

meet

the 80 percent test of section 1563(a)

// 26 USC 1563. //

if the second tier

subsidiary were the common parent) shall be treated as

includible corporations.".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 409 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 // 26 USC 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)

// 26 USC 401. //

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."

(b) Conforming Amendments.--,

(1) The last sentence of section 401(a)(4)

// 26 USC 401. //

is amended by striking out "section 410(b)(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 410(b)(2)(C)" and

inserting in

lieu thereof "section 410(b)(3)(C)".

(3) The last sentence of section 408(k)(2)

// 26 USC 408. //

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 // 26 USC 401 // 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) // 26 USC 125. // (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)) // 26 USC 401. // 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."

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 125 // shall apply with respect to taxable years beginning after December 31, 1980.

SEC. 227. ELIMINATION OF WITHHOLDING TAX ON PENSIONS PAID TO CERTAIN NONRESIDENT ALIENS.

(a) In General.-Section 871(f) // 26 USC 871. // (relating to taxation of nonresident alien individuals) is amended to read as follows:

"(1) In general.-For purposes of this section, gross income does not include any amount received as an annuity under a qualified annuity plan described in section 403(a)(1),

// 26 USC 403. //

or from a qualified trust described in section 401(a)

// 26 USC 401. //

which is exempt from tax under section 501(a),

// 26 USC 501. //

if--,

"(A) all of the personal services by reason of which the annuity is payable were either--, "(i) personal services performed outside the United States by an individual who, at the time of performance of such personal services, was a nonresident alien, or "(ii) personal services described in section 864(b)(1)

// 26 USC 864. //

performed within the United States by such individual,

and

"(B) at the time the first amount is paid as an annuity under the annuity plan or by the trust, 90 percent or

more of

the employees for whom contributions or benefits are

provided

under such annuity plan, or under the plan or plans of

which the trust is a part, are citizens or residents of

the

United States.

"(2) Exclusion.-Income received during the taxable year which would be excluded from gross income under this subsection but for the requirement of paragraph (1)(B) shall not be included in gross income if--,

"(A) the recipients's country of residence grants a

substantially

equivalent exclusion to residents and citizens of the

United States; or

"(B) the recipient's country of residence is a

beneficiary

developing country within the meaning of section 502 of

the

Trade Act of 1974 (19 U.S.C. 2462).".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 871 // shall apply to amounts received after July 1, 1979.

TITLE III-AMENDMENTS RELATING TO ESTATE TAX

SEC. 301. ADDITIONAL 3 YEARS ALLOWED TO AMEND GOVERNING INSTRUMENTS TO MEET REQUIREMENTS FOR GIFT OF SPLIT INTEREST TO CHARITY.

(a) Charitable Lead Trusts and Charitable Remainder Trusts in the Case of Estate Taxes.-The first sentence of paragraph (3) of section 2055(e) // 26 USC 2055. // (relating to disallowance of deductions in certain cases) is amended--,

(1) by striking out " December 31, 1977" and inserting in lieu thereof " December 31, 1978"; and

(2) by striking out " December 31, 1978" each place it appears and inserting in lieu thereof " December 31, 1981".

(b) Effective Date.--,

(1) In general.-The amendment made by subsection (a)

// 26 USC 2055 //

shall apply in the case of decedents dying after December 31, 1969.

(2) Charitable lead trusts and charitable remainder trusts in the case of income and gift taxes.-Section 514(b) (and section 514(c) insofar as it relates to section 514(b)) of the Revenue Act of 1978

// 92 Stat. 2884. //

shall be applied as if the amendment made by subsection (a) had been included in the amendment made by section 514(a) of such Act.

TITLE IV-MISCELLANEOUS AMENDMENTS

SEC. 401. TREATMENT OF CERTAIN SOCIAL SECURITY TAX WAIVER EXEMPTIONS.

(a) Waiver Certificate.--,

(1) In general.-Notwithstanding any other provision of law, any waiver certificate filed by a qualified corporation (herinafter in this section referred to as the "corporation") under section 3121(k)(1) of the Internal Revenue Code of 1954

// 26 USC 3121. //

(relating to waiver of exemption from social security taxes by certain organizations) shall be deemed not to be effective, for purposes of the taxes imposed by section 3101 of such Code,

// 26 USC 3101. //

with respect to any wages--,

(A) paid by the Corporation to any employee thereof

after

December 31, 1972, and before April 1, 1975, if the

Corporation

furnishes to the Secretary of the Treasury or his

delegate evidence reasonably satisfactory to him that

the

Corporation as refunded, prior to February 1, 1977,

to such

employee (or to his survivors or estate) the full

amount of the

taxes imposed by section 3101 of such Code on such

wages, or

(B) paid after March 31, 1975, and prior to

July 1, 1977, by

the Corporation to an individual as an employee of the

Corporation, if the Corporation furnishes to the

Secretary of

the Treasury or his delegate evidence reasonably

satisfactory

to him that (i) such individual was not an employee of

the Corporation on June 30, 1978, and (ii) no amount

of the

taxes imposed by section 3101 of such Code on such

wages

were withheld by the Corporation from such wages.

(2) Application of paragraph (1).--,

(A) Evidence to be submitted to secretary.-The

provisions

of paragraph (1) shall not apply to wages described in

subparagraph (A) or (B) of such paragraph unless,

prior to

the close of the one-year period which begins on the

date of

the enactment of this Act, the Corporation furnishes

to the

Secretary of the Treasury or his delegate the evidence

referred to in either such subparagraph.

(B) Tax not imposed.-If the provisions of paragraph (1) apply with respect to any wages paid by the

Corporation to

an employee thereof, no taxes imposed on such wages by

section 3101 of the Internal Revenue Code of 1954

shall be

payable, and no interest or penalty with respect to the

imposition of taxes by such section on such wages (or

with

respect to the imposition of taxes by such section or

section

3111 of such Code

// 26 USC 3111. //

on any wages paid by the Corporation

prior to January 1, 1978) shall be imposed or

collected.

(C) Credit against tax.-Under regulations prescribed by the Secretary, there shall be allowed as a one-time

credit

against the tax imposed on the Corporation under

section

3101 or 3111 of the Internal Revenue Code of 1954

// 26 USC 3101, 3111. //

(and any

interest or penalties imposed thereon) an amount equal

to

the sum of--,

(i) all amounts of tax imposed by section 3101 of such Code

// 26 USC 3101. //

which have been paid by the Corporation with

respect to wages to which paragraph (1) applies, and

(ii) all amounts paid by such Corporation as a penalty or as interest with respect to the tax imposed by

section

3101 or 3111 of such Code on such wages.

(b) Treatment for Purposes of Social Security Act.-In the administration of titles II and XVIII of the Social Security Act, // 42 USC 401, 1395. // any wages paid to any individual to which the provisions of subsection (a) apply shall be treated as wages (within the meaning of section 209 of such Act) // 42 UC 409. // for purposes of determining--,

(1) entitlement to, or amount of, any insurance benefit payable to such individual or any other person on the basis of the wages and self-employment income of such individual, or

(2) entitlement of such individual to benefits under title XVIII of such Act or entitlement of any other person to such benefits on the basis of the wages and self-employment income of such individual.

(c) Qualified Corporation Defined.-For purposes of this section, the term "qualified corporation" means any corporation which--,

(1) filed a waiver certificate under section 3121 of the Internal Revenue Code of 1954

// 26 USC 3121. //

during 1968;

(2) filed a second waiver certificate under such section during 1975 believing that no other waiver certificate had been filed;

(3) received a refund of the taxes imposed by sections 3101 and 3111 of such Code

// 26 USC 3101, 3111. //

with respect to certain wages paid to more than 120 but less than 180 employees who did not concur in the filing of the second waiver certificate; and

(4) was notified during 1977 by the Internal Revenue Service that the certificate had been filed during 1968.

(d) Liability for Taxes.-Except as provided in subsection (a)(2)(C)( ii), nothing in this section shall be construed to relieve the Corporation of any liability for the payment of the taxes imposed by section 3111 of the Internal Revenue Code of 1954 with respect to any wages paid by it to any individual for any period.

SEC. 402. TREATMENT OF AUTHORS AND ARTISTS AS EMPLOYEES.

(a) In General.-An author or artist performing services under contract with a corporation shall be considered as an employee of the corporation for the purpose of applying the provisions specified in section 7701(a)(20) of the Internal Revenue Code of 1954, // 26 USC 7701. // if, on December 31, 1977, such author or artist was a participant in one or more of the pension, profit-sharing or annuity plans of such corporation which are described in subsection (b)(2).

(b) Definitions.-For purposes of this section--,

(1) Contract.-The term "contract" means a contract which during its term--,

(A) requires such author or artist to give the

corporation

first reading or first refusal on writings or drawings

of

specified types, and prohibits him from offering any

such

writing or drawing to any other publication unless it

has

been offered to and rejected by the corporation; or

(B) requires such author or artist to use his best

efforts to

produce work of specified types for the corporation.

(2) Corporation.-The term "corporation" means a corporation which for at least 15 years prior to January 1, 1978, had in effect one or more pension, profit-sharing and annuity plans, each of which--,

(A) had contained from its inception a definition of the term "employee" that included the category of "authors

and

artists under contract", and

(B) had been determined by the Secretary of the

Treasury

(taking into account the definition described in

subparagraph

(A)) to be qualified plan within part I of subchapter

D of chapter 1 of subtitle A of the Internal

Revenue Code of

1954

// 26 USC 401. //

for all of such years.

(c) Effective Date.-The provisions of this section shall apply to taxable years ending after December 31, 1980.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1278 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1036 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Sept. 9, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to certain Senate amendments, to others with amendments, and disagreed to those

remaining; Senate agreed to certain House amendments and receded from its

remaining amendments.

PUBLIC LAW 96-604, 94 STAT. 3516, STATE AND LOCAL FISCAL ASSISTANCE ACT AMENDMENTS OF 1980.

96th CONGRESS, H.R. 7112 DECEMBER 28, 1980
An Act To authorize an extension and amendment of the revenue

sharing program to

provide general purpose fiscal assistance to local

governments, and for other

purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act // 31 USC 1221 // may be cited as the " State and Local Fiscal Assistance Act Amendments of 1980".

SEC. 2. EXTENSION OF PROGRAM.

(a) Authorization of Appropriations for Local Share.-Section 105(c)( 1) of the State and Local Fiscal Assistance Act of 1972 // 31 USC 1224. // is amended by adding at the end thereof the following: " In addition, there are authorized to be appropriated to the Trust Fund to pay the entitlements of units of local government hereinafter provided $4,566,700,000 for each of the entitlement periods beginning October 1 of 1980, 1981, and 1982.".

(b) State Share Provisions.--,

(1) Authorization of state share appropriations.-Section 105 of the State and Local Fiscal Assistance Act of 1972 is further amended by redesignating subsection (d) as subsection (e) and by inserting immediately before such subsection the following new subsection:

"(d) Authorization of Appropriations for Allocations to State Governments.--,

"(1) In general.-In the case of each entitlement period described in paragraph (2), there are authorized to be appropriated to the Trust Fund $2,300,000,000 for each such entitlement period to make allocations to State governments in accordance

with section 107(a)(2). // 31 USC 1226. //

"(2) Entitlement periods.-The following entitlement periods are described in this paragraph:

"(A) The entitlement period beginning October 1, 1981, and ending September 30, 1982; and "(B) The entitlement period beginning October 1, 1982, and ending September 30, 1983.".

(2) State share allocation.-Subsection (a) of section 107 of the State and Local Fiscal Assistance Act of 1972

// 31 USC 1226. //

is amended to read as follows:

"(a) Division Between State and Local Governments.--,

"(1) Entitlement allocations.--,

"(A) State government share.-The State government shall be entitled to receive--, "(i) one-third of the amount allocated to that State under section 106 for each entitlement period ending before October 1, 1980; and "(ii) no part of such amount for any entitlement period beginning on or after October 1, 1980. "(B) Local government share.-Of the amount allocated to a State under section 106--,

// 31 USC 1225. //

"(i) for an entitlement period ending before October 1, 1980, two-thirds shall be allocated, as provided in

section

108,

// 31 USC 1227. //

among the units of local government of that State;

and

"(ii) for any entitlement period beginning on or after October 1, 1980, all of such amount shall be

allocated, as

provided in section 108, among the units of local

government

of that State.

"(2) Nonentitlement allocation to states.-From any amount appropriated pursuant to section 105(d)

// 31 USC 1224. //

for any entitlement period described in section 105(d)(2), there shall be allocated to each State government an amount which bears the same ratio to the amount so appropriated for that period as the amount allocable to that State under section 106(b)

// 31 USC 1225. //

bears to the sum of the amounts allocable to all States under section 106(b), except that (A) no payment of any such allocation shall be made to any State unless the Secretary determines (in accordance with regulations prescribed by the Secretary) that such State has declined to receive or has refunded to the United States, from funds otherwise available to such State under any Federal categorical grant program (as identified in such regulations), an amount equal to such allocation, and (B) any funds which would otherwise be paid to a State but for clause (A) shall be transferred by the Secretary from the Trust Fund to the general fund of the Treasury in accordance with section 105(d).".

(c) Conforming Amendments.--,

(1) Payments.-Section 102(a)(1) of the Act

// 31 USC 1221. //

is amended by striking out "the entitlement" and inserting in lieu thereof "the allocation, if any,".

(2) Adjustment of local government entitlements.-Section 108 of the Act

// 31 USC 1227. //

is amended--,

(A) by striking out "two-thirds of" in

subsection (b)(6)(B);

(B) by striking out subparagraph (C) of

subsection (b)(7)

and inserting in lieu thereof the following:

"(C) Adjustment for application of limitation.-In any case in which the amount allocated to a unit of local government is reduced under paragraph (6)(C) by the

Secretary,

the amount of that reduction--,

"(i) in the case of a unit of local government (other than a county government), shall be added to and increase the allocation of the county government of the county area in which it is located, unless (on account

of

the application of paragraph (6)) that county government

may not receive it, in which case the amount of the

reduction shall be reallocated in accordance with

subparagraph

(D); and

"(ii) in the case of a county government, shall be reallocated in accordance with subparagraph (D). "(D) Reallocation of excess amounts.-Amounts

reallocated

under this subparagraph shall be added to and

increase the entitlements--,

"(i) first, of units of local government within the

State,

to the extent that such units may (after the application

of paragraph (6)) receive such a reallocation, and

"(ii) then, if no unit of local government may receive such an allocation on account of the application of paragraph (6), among all units of local government within the State on a pro rata basis."; (C) by striking out " September 30, 1980" in subsection (c)(1)(C) and inserting in lieu thereof

" September 30, 1983";

and

(D) by adding at the end of subsection (e) the following

new

paragraph:

"(5) Rule for periods for which there is no state government amount.-For the entitlement period beginning October 1, 1980, and for any entitlement period for which the amounts authorized by section 105(d)

// 31 USC 1224. //

are not appropriated, this subsection shall be applied--,

"(A) by substituting '13.5 percent' for '15 percent' in

the

first sentence of paragraph (1),

"(B) by substituting '6.75 percent' for '7.5 percent' in

the

second sentence of paragraph (1),

"(C) without regard to the words 'one half of' in the

first

sentence of paragraph (2),

"(D) by substituting '6.75 percent' for '3.75 percent'

in the

second sentence of paragraph (2), and

"(E) without regard to paragraph (3) or (4).".

(3) Definition of entitlement period.-Section 141(b) of the Act

// 31 USC 1261. //

is amended by inserting at the end thereof the following new paragraph:

"(8) The one-year periods beginning on October 1 of 1980, 1981, and 1982.".

(4) Judicial review.-Section 143(a) of the Act

// 31 USC 1263. //

is amended by striking out " State which receives a notice of reduction in entitlement under section 107(b),

// 31 USC 1226. //

and any".

(d) Population Data.-Paragraph (1) of section 109(a) of the State and Local Fiscal Assistance Act of 1972 // 31 USC 1228. // is amended to read as follows:

"(1) Population.--,

"(A) In general.-Population shall be determined on the same basis as resident population is determined by the Bureau of the Census for general statistical purposes. "(B) Undercount adjustment.-The Secretary shall request the Bureau of the Census to adjust the

population

data provided under subparagraph (A), as soon as

practicable

to include a reasonable estimate of the number of

resident persons not counted in the 1980 census or

subsequent

revisions thereof. The Secretary shall use such

estimates in the calculation of allocations for the next

entitlement period beginning after receipt of such

estimates.".

(e) Transition Provision.-Section 121(c)(2) of the Act // 31 USC 1241. // is amended by adding at the end thereof the following new sentence: " For the entitlement period beginning on October 1, 1980, and ending September 30, 1981, a State government or unit of local government shall not be deemed to be in violation of the requirements of subsection (b) or paragraph (1) of this subsection if such government or unit has, prior to the date of enactment of the State and Local Fiscal Assistance Act Amendments of 1980, conducted hearings required under subsection (a) on proposed uses of funds on the basis of a reasonable projection of the amount of funds to be made available to such unit under such Amendments.".

(f) Waiver Provision.-Section 123(c)(5) of the Act // 31 USC 1243. // is amended to read as follows:

"(5) Waiver.-The Secretary may waive the requirements of paragraph (1) or paragraph (2), in whole or in part, with respect to any State government or unit of local government for any fiscal year as to which (in accordance with the regulations prescribed by the Secretary) there is a finding that--,

"(A) the financial accounts of such government for such period are not auditable, and that such government

demonstrates

substantial progress toward making such financial

accounts auditable, or

"(B) such government has been audited by a State audit agency which does not follow generally accepted auditing standards or which is not independent (in accordance

with

regulations prescribed by the Secretary), and such

State

audit agency demonstrates progress toward meeting

generally

accepted auditing standards or becoming independent.".

(g) Modification of Certain Audit Requirements. // 31 USC 1243 // In any case in which--,

(1) a State had on July 25, 1974, entered into an agreement with the United States to conduct the audits required under section 123(c) of the Act

// 31 USC 1243. //

on behalf of the units of local government in such State, and

(2) such audits were not conducted as so required for the entitlement periods beginning after December 31, 1976, and before January 1, 1980,

then any unit of local government of such State may meet the audit requirements of section 123(c) of the Act with respect to such entitlement periods by conducting audits which otherwise meet such requirements, except that, in the aggregate, such audits need cover only those funds of accounts in the financial activity of the local unit of government into which payments under the Act have been deposited.

(h) Statement of Assurances.-Section 123(a) // 31 USC 1243. // is amended--,

(1) by striking out the semicolon at the end of paragraph (6) and inserting in lieu thereof the following: ";and";

(2) by striking out "; and" at the end of paragraph (7) and inserting in lieu thereof a period; and

(3) by striking out paragraph (8).

SEC. 3. DISCHARGE THE STATES FROM THE OBLIGATION OF REPAYMENT OF CERTAIN MONEY.

(a) In General.-The various States with which money was deposited by the Secretary of the Treasury under the provisions of sections 13 and 14 of the Act entitled " An Act to regulate the deposits of the public money", approved June 23, 1836 (5 Stat. 55), are hereby discharged of all obligations for repayment to the United States of the money so deposited.

(b) Crediting of Accounts.-The proper accounting officers of the Government shall credit the various States with the amounts charged to them on the books of the Treasury Department pursuant to the proviso in the paragraph entitled " Credit in accounts of the Treasurer" in the Act of June 25, 1910 (36 Stat. 776).

SEC. 4. ADJUSTMENTS PURSUANT TO SECTION 118 OF PUBLIC LAW 96 - 369.

Section 109 of the Act // 31 USC 1228. // is amended by adding a new subsection, as follows:

"(h) The allocations to States and local jurisdictions shall reflect any adjustments made pursuant to section 118 of Public Law 96 - 369, and nothing in this Act shall be construed so as to preclude such adjustments being used for the purpose of allocation.".

SEC. 5. EFFECTIVE DATE.

The amendments made by sections 1, 2, and 4 of this Act // 31 USC 1221 // shall apply with respect to entitlement periods (as such term is defined in section 141(b) of the State and Local Fiscal Assistance Act of 1972) // 31 USC 1261 // beginning on or after October 1, 1980.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1277 (Comm. on Government Operations).

SENATE REPORT No. 96 - 1009 accompanying S. 2574 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Sept. 24, Nov. 12, 13, considered and passed House.

Dec. 9, considered and passed Senate, amended.

Dec. 10, House agreed to certain Senate amendments, to others with amendments, and disagreed to remaining Senate amendments.

Dec. 12, Senate receded from certain Senate amendments and agreed to remaining House amendments.

PUBLIC LAW 96-603, 94 STAT. 3503

96th CONGRESS, H.R. 4155 DECEMBER 28, 1980
An Act To amend the Internal Revenue Code of 1954 to simplify

private foundation return

and reporting requirements, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SIMPLIFICATION OF PRIVATE FOUNDATION RETURN AND REPORTING REQUIREMENTS.

(a) Amendment of Section 6033.-Section 6033 of the Internal Revenue Code of 1954 // 26 USC 6033. // (relating to returns by exempt organizations) is amended by redesignating subsection (c) as subsection (e) and by inserting after subsection (b) the following new subsections:

"(c) Additional Provisions Relating to Private Foundations.--, In the case of an organization which is a private foundation (within the meaning of section 509(a))--, // 26 USC 509. //

"(1) the Secretary shall by regulations provide that the private foundation shall include in its annual return under this section such information (not required to be furnished by subsection (b) or the forms or regulations prescribed thereunder) as would have been required to be furnished under section 6056

// 26 USC 6056. //

(relating to annual reports by private foundations) as such section 6056 was in effect on January 1, 1979,

"(2) a copy of the notice required by section 6104(d)

// 26 USC 6104. //

(relating to public inspection of private foundations' annual returns), together with proof of publication thereof, shall be filed by the foundation together with the annual return under this section, and

"(3) the foundation managers shall furnish copies of the annual return under this section to such State officials, at such times, and under such conditions, as the Secretary may by regulations prescribe.

Nothing in paragraph (1) shall require the inclusion of the name and address of any recipient (other than a disqualified person within the meaning of section 4946) // 26 USC 4946. // of 1 or more charitable gifts or grants made by the foundation to such recipient as an indigent or needy person if the aggregate of such gifts or grants made by the foundation to such recipient during the year does not exceed $1,000.

"(d) Section To Apply to Nonexempt Charitable Trusts and Nonexempt Private Foundations.-The following organizations shall comply with the requirements of this section in the same manner as organizations described in section 501(c)(3) // 26 USC 501. // which are exempt from tax under section 501(a):

"(1) Nonexempt charitable trusts.-A trust described in section 4947(a)(1)

// 26 USC 4947. //

(relating to nonexempt charitable trusts).

"(2) Nonexempt private foundations.-A private foundation which is not exempt from tax under section 501(a)."

(b) Public Inspection of Private Foundations' Annual Returns.--,

(1) In general.-The first sentence of subsection (d) of section 6104 of such Code

// 26 USC 6104. //

(relating to public inspection of private foundations' annual reports) is amended to read as follows: " The annual return required to be filed under section 6033

// 26 USC 6033. //

(relating to returns by exempt organizations) by any organization which is a private foundation within the meaning of section 509( a)

// 26 USC 509. //

shall be made available by the foundation managers for inspection at the principal office of the foundation during regular business hours by any citizen on request made within 180 days after the date of the publication of notice of its availability."

(2) Conforming amendments.-Such subsection (d) is amended--,

(A) by striking out " Annual Reports" in the heading and inserting in lieu thereof " Annual Returns"; and (B) by striking out "annual report" each place it appears in the second and third sentences and inserting in lieu thereof "annual return".

(c) Repeal of Private Foundation Annual Reporting Requirements.--, Subpart D of part III of subchapter A of chapter 61 of such Code // 26 USC 6056. // (relating to information concerning private foundations) is hereby repealed.

(d) Technical Amendments.--,

(1) Section 6034 of such Code

// 26 USC 6034. //

(relating to returns by trust described in section 4947(a) or claiming charitable deductions under section 642(c)) is amended--,

(A) by striking out "section 4947(a)" in subsection (a)

and

inserting in lieu thereof "section 4947(a)(2)";

(B) by adding at the end of subsection (b) the following

new

sentence: " This section shall not apply in the case

of a trust

described in section 4947(a)(1).";

(C) by striking out " Exception" in the heading of

subsection

(b) and inserting in lieu thereof " Exceptions"; and

(D) by striking out "section 4947(a)" in the section

heading

and inserting in lieu thereof "section 4947(a)(2)".

(2)(A) The first sentence of section 6652(d)(3) of such Code

// 26 USC 6652. //

(relating to annual reports) is amended to read as follows: " In the case of a failure to comply with the requirements of section 6104(d) (relating to public inspection of private foundations' annual returns), on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to meet such requirement, $10 for each day during which such failure continues, but the total amount imposed hereunder on all such persons for such failure with respect to any one annual return shall not exceed $5,000."

(B) The heading of paragraph (3) of section 6652(d) of such Code is amended by striking out " REPORTS" and inserting in lieu thereof " RETURNS".

(3) Subsection (b) of section 6104 of such Code

// 26 USC 6104. //

(relating to inspection of annual information returns) is amended by striking out "6056,".

(4) Section 6685 of such Code

// 26 USC 6685. //

(relating to assessable penalties with respect to private foundation annual reports) is amended to read as follows:

" SEC. 6685. ASSESSABLE PENALTIES WITH RESPECT TO PRIVATE FOUNDATION ANNUAL RETURNS.

" In addition to the penalty imposed by section 7207 // 26 USC 7207. // (relating to fraudulent returns, statements, or other documents), any person who is required to comply with the requirements of section 6104(d) // 26 USC 6104. // (relating to private foundations' annual returns) and who fails to so comply with respect to any return, if such failure is willful, shall pay a penalty of $1,000 with respect to each such return."

(5) Section 7207 of such Code

// 26 USC 7207. //

(relating to fraudulent returns, statements, or other documents) is amended by striking out "sections 6047 (b) or (c), 6056, or 6104(d)" and inserting in lieu thereof "subsection (b) or (c) of section 6047 or pursuant to subsection (d) of section 6104".

(e) Clerical Amendments.--,

(1) The table of sections for subpart A of part III of subchapter A of chapter 61 of such Code is amended by striking out "4947(a)" in the item relating to section 6034 and inserting in lieu thereof "4947(a)(2)".

(2) The table of subparts for part III of subchapter A of chapter 61 of such Code is amended by striking out the item relating to subpart D.

(3) The table of sections for subchapter B of chapter 68 of such Code is amended by striking out "reports" in the item relating to section 6685 and inserting in lieu thereof "returns".

(f) Effective Date.-The amendments made by this section // 26 USC 6033 // shall apply to taxable years beginning after December 31, 1980.

SEC. 2. ALLOWANCE OF DEDUCTION FOR CERTAIN FOREIGN DEFERRED COMPENSATION PLANS.

(a) Allowance.-Part I of subchapter D of chapter 1 of the Internal Revenue Code of 1954 (relating to pension, profit sharing, stock bonus plans, etc.) is amended by inserting after section 404 the following new section:

" SEC. 404 A. // 26 USC 404 A. // DEDUCTION FOR CERTAIN FOREIGN DEFERRED COMPENSATION PLANS.

"(a) General Rule.-Amounts paid or accrued by an employer under a qualified foreign plan--,

"(1) shall not be allowable as a deduction under section 162, 212, or 404,

// 26 USC 162, 212, 404. //

but

"(2) if they satisfy the conditions of section 162, shall be allowed as a deduction under this section for the taxable year for which such amounts are properly taken into account under this section.

"(b) Rules for Qualified Funded Plans.-For purposes of this section--,

"(1) In general.-Except as otherwise provided in this section, in the case of a qualified funded plan contributions are properly taken into account for the taxable year in which paid.

"(2) Payment after close of taxable year.-For purposes of paragraph (1), a payment made after the close of a taxable year shall be treated as made on the last day of such year if the payment is made--,

"(A) on account of such year, and "(B) not later than the time prescribed by law for

filing the

return for such year (including extensions thereof).

"(3) Limitations.-In the case of a qualified funded plan, the amount allowable as a deduction for the taxable year shall be subject to--,

"(A) in the case of--, "(i) a plan under which the benefits are fixed or determinable, limitations similar to those contained in clauses (ii) and (iii) of subparagraph (A) of section 404(a)(1)

// 26 USC 404. //

(determined without regard to the last sentence

of such subparagraph (A)), or

"(ii) any other plan, limitations similar to the

limitations

contained in paragraph (3) of section 404(a), and

"(B) limitations similar to those contained in paragraph

(7)

of section 404(a).

"(4) Carryover.-If--,

"(A) the aggregate of the contributions paid during the taxable year reduced by any contributions not allowable

as a

deduction under paragraphs (1) and (2) of subsection

(g),

exceeds

"(B) the amount allowable as a deduction under subsection (a) (determined without regard to subsection (d)),

such excess shall be treated as an amount paid in the succeeding taxable year.

"(5) Amounts must be paid to qualified trust, etc.-In the case of a qualified funded plan, a contribution shall be taken into account only if it is paid--,

"(A) to a trust (or the equivalent of a trust) which

meets

the requirements of section 401(a)(2),

// 26 USC 401. //

"(B) for a retirement annuity, or "(C) to a participant or beneficiary.

"(c) Rules Relating to Qualified Reserve Plans.-For purposes of this section--,

"(1) In general.-In the case of a qualified reserve plan, the amount properly taken into account for the taxable year is the reasonable addition for such year to a reserve for the taxpayer's liability under the plan. Unless otherwise required or permitted in regulations prescribed by the Secretary, the reserve for the taxpayer's liability shall be determined under the unit credit method modified to reflect the requirements of paragraphs (3) and (4). All benefits paid under the plan shall be charged to the reserve.

"(2) Income item.-In the case of a plan which is or has been a qualified reserve plan, an amount equal to that portion of any decrease for the taxable year in the reserve which is not attributable to the payment of benefits shall be included in gross income.

"(3) Rights must be nonforfeitable, etc.-In the case of a qualified reserve plan, an item shall be taken into account for a taxable year only if--,

"(A) there is no substantial risk that the rights of the employee will be forfeited, and "(B) such item meets such additional requirements as the Secretary may by regulations prescribe as necessary or appropriate to ensure that the liability will be

satisfied.

"(4) Spreading of certain increases and decreases in reserves.-There shall be amortized over a 10-year period any increase or decrease to the reserve on account of--,

"(A) the adoption of the plan or a plan amendment, "(B) experience gains and losses, and "(C) any change in actuarial assumptions, "(D) changes in the interest rate under

subsection (g)(3)(B),

and

"(E) such other factors as may be prescribe by

regulations.

"(d) Amounts Taken Into Account Must Be Consistent With Amounts Allowed Under Foreign Law.--,

"(1) General rule.-In the case of any plan, the amount allowed as a deduction under subsection (a) for any taxable year shall equal--,

"(A) the lesser of--, "(i) the cumulative United States amount, or "(ii) the cumulative foreign amount, reduced by "(B) the aggregate amount determined under this section for all prior taxable years.

"(2) Cumulative amounts defined.-For purposes of paragraph (1)--,

"(A) Cumulative United States amount.-The term 'cumulative United States amount' means the aggregate amount determined with respect to the plan under this section for the taxable year and for all prior taxable

years to

which this section applies. Such determination shall

be

made for each taxable year without regard to the

application

of paragraph (1).

"(B) Cumulative foreign amount.-The term 'cumulative foreign amount' means the aggregate amount allowed as a deduction under the appropriate foreign tax laws

for the

taxable year and all prior taxable years to which this

section

applies.

"(3) Effect on earnings and profits, etc.-In determining the earnings and profits and accumulated profits of any foreign corporation with respect to a qualified foreign plan, the amount determined under paragraph (1) with respect to any plan for any taxable year shall in no event exceed the amount allowed as a deduction under the appropriate foreign tax laws for such taxable year.

"(e) Qualified Foreign Plan.-For purposes of this section, the term 'qualified foreign plan' means any written plan of an employer for deferring the receipt of compensation but only if--,

"(1) such plan is for the exclusive benefit of the employer's employees or their beneficiaries,

"(2) 90 percent or more of the amounts taken into account for the taxable year under the plan are attributable to services--,

"(A) performed by nonresident aliens, and "(B) the compensation for which is not subject to tax

under

this chapter, and

"(3) the employer elects (at such time and in such manner as the Secretary shall by regulations prescribe) to have this section apply to such plan.

"(f) Funded and Reserve Plans.-For purposes of this section--,

"(1) Qualified funded plan.-The term 'qualified funded plan' means a qualified foreign plan which is not a qualified reserve plan.

"(2) Qualified reserve plan.-The term 'qualified reserve plan' means a qualified foreign plan with respect to which an election made by the taxpayer is in effect for the taxable year. An election under the preceding sentence shall be made in such manner and form as the Secretary may by regulations prescribe and, once made, may be revoked only with the consent of the Secretary.

"(g) Other Special Rules.--,

"(1) No deduction for certain amounts.-Except as provided in section 404(a)(5),

// 26 USC 404. //

no deduction shall be allowed under this section for any item to the extent such item is attributable to services--,

"(A) performed by a citizen or resident of the United States who is an officer, shareholder, or highly

compensated,

or

"(B) performed in the United States the compensation

for

which is subject to tax under this chapter.

"(2) Taxpayer must furnish information.--,

"(A) In general.-No deduction shall be allowed under this section with respect to any plan for any taxable

year

unless the taxpayer furnishes to the Secretary with

respect

to such plan (at such time as the Secretary may by

regulations

prescribe)--,

"(i) a statement from the foreign tax authorities specifying the amount of the deduction allowed in

computing

taxable income under foreign law for such year

with respect to such plan,

"(ii) if the return under foreign tax law shows the deduction for plan contributions or reserves as a

separate,

identifiable item, a copy of the foreign tax return

for the taxable year, or

"(iii) such other statement, return, or other evidence as the Secretary prescribes by regulation as being

sufficient

to establish the amount of the deduction under

foreign law.

"(B) Redetermination where foreign tax deduction is adjusted.-If the deduction under foreign tax law is adjusted, the taxpayer shall notify the Secretary of

such

adjustment on or before the date prescribed by

regulations,

and the Secretary shall redetermine the amount of the

tax

for the year or years affected. In any case described

in the

preceding sentence, rules similar to the rules of

subsection

(c) of section 905

// 26 USC 905. //

shall apply.

"(3) Actuarial assumptions must be reasonable; full funding.--,

"(A) In general.-Except as provided in subparagraph (B), principles similar to those set forth in

paragraphs (3) and

(7) of section 412(c)

// 26 USC 412. //

shall apply for purposes of this section.

"(B) Interest rate for reserve plan.--, "(i) In general.-In the case of a qualified reserve plan, in lieu of taking rates of interest into account under subparagraph (A), the rate of interest for the

plan

shall be the rate selected by the taxpayer which is

within the permissible range.

"(ii) Rate remains in effect so long as it falls within permissible range.-Any rate selected by the taxpayer for the plan under this subparagraph shall remain in effect for such plan until the first taxable

year

for which such rate is no longer within the permissible

range. At such time, the taxpayer shall select a new

rate

of interest which is within the permissible range

applicable

at such time.

"(iii) Permissible range.-For purposes of this

subparagraph,

the term 'permissible range' means a rate of

interest which is not more than 20 percent above, and

not more than 20 percent below, the average rate of

interest for long-term corporate bonds in the

appropriate

country for the 15-year period ending on the last day

before the beginning of the taxable year.

"(4) Accounting method.-Any change in the method (but not the actuarial assumptions) used to determine the amount allowed as a deduction under subsection (a) shall be treated as a change in accounting method under section 446(e).

// 26 USC 446. //

"(5) Section 481

// 26 USC 481. //

applies to election.-For purposes of section 481, any election under this section shall be treated as a change in the taxpayer's method of accounting. In applying section 481 with respect to any such election, the period for taking into account any increase or decrease in accumulated profits, earnings and profits or taxable income resulting from the application of section 481( a)(2) shall be the year for which the election is made and the fourteen succeeding years.

"(h) Regulations.-The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section (including regulations providing for the coordination of the provisions of this section with section 404 // 26 USC 404. // in the case of a plan which has been subject to both of such sections)."

(b) Amendments of Section 679(a).-Subsection (a)(1) of section 679 of such Code // 26 USC 679. // (relating to foreign trusts having one or more United States beneficiaries) is amended by adding the phrase " Or section 404 A" immediately after the phrase "section 404(a)(4)".

(c) Taxpayer Must Notify Secretary Where There is a Redetermination of Tax, Etc., Under Foreign Law.--,

(1) Amendment of section 905(c).-Subsection (c) of section 905 of such Code

// 26 USC 905. //

(relating to adjustments on payment of accrued taxes) is amended by adding at the end thereof the following new sentence: " The preceding sentence shall not apply (with respect to any period after the refund or adjustment in the foreign taxes) if the taxpayer fails to notify the Secretary (on or before the date prescribed by regulations for giving such notice) unless it is shown that such failure is due to reasonable cause and not due to willful neglect."

(2) Civil penalty for failure to notify.-Subchapter B of chapter 68 of such Code (relating to assessable penalties) is amended by inserting after section 6688 the following new section:

" SEC. 6689. // 26 USC 6689. // FAILURE TO FILE NOTICE OF REDETERMINATION OF FOREIGN TAX.

"(a) Civil Penalty.-If the taxpayer fails to notify the Secretary (on or before the date prescribed by regulations for giving such notice) of a foreign tax redetermination, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the deficiency attributable to such redetermination an amount (not in excess of 25 percent of the deficiency) determined as follows--,

"(1) 5 percent of the deficiency if the failure is for not more than 1 month, with

"(2) an additional 5 percent of the deficiency for each month (or fraction thereof) during which the failure continues.

"(b) Foreign Tax Redetermination Defined.-For purposes of this section, the term 'foreign tax redetermination' means any redetermination for which a notice is required under subsection (c) of section 905 // 26 USC 905. // or paragraph (2) of section 404 A(g)."

(d) Clerical Amendments.--,

(1) The table of sections for part I of subchapter D of chapter 1 of such Code is amended by inserting after the item relating to section 404 the following new item:

" Sec. 404 A. Deduction for certain foreign deferred compensation plans."

(2) The table of sections for subchapter B of chapter 68 of such Code is amended by inserting after the item relating to section 6688 the following new item:

" Sec. 6689. Failure to file notice of redetermination of foreign tax."

(e) Effective Date.--, // 26 USC 404 A //

(1) In general.-The amendments made by this section shall apply with respect to employer contributions or accruals for taxable years beginning after December 31, 1979.

(2) Election to apply amendments retroactively with respect to foreign subsidiaries.--,

(A) In general.-The taxpayer may elect to have the amendments made by this section apply retroactively with respect to its foreign subsidiaries. (B) Scope of retroactive application.-Any election made under this paragraph shall apply with respect to

all

foreign subsidiaries of the taxpayer for the taxpayer's

open

period.

(C) Distributions by foreign subsidiary must be out of post-1971 earnings and profits.-The election under this paragraph shall apply to distributions made by a foreign subsidiary only if made out of accumulated profits (or earnings and profits) earned after December 31, 1970. (D) Revocation only with consent.-An election under this paragraph may be revoked only with the consent of

the

Secretary of the Treasury or his delegate.

(E) Open period.-For purposes of this subsection, the term "open period" means, with respect to any taxpayer,

all

taxable years which begin before January 1, 1980, and

which

begin after December 31, 1971, and for which, on

December

31, 1980, the making of a refund, or the assessment of a

deficiency, was barred by any law or rule of law.

(3) Allowance of prior deductions in case of certain funded branch plans.--,

(A) In general.-If--, (i) the taxpayer elects to have this paragraph apply, and (ii) the taxpayer agrees to the assessment of all

deficiencies

(including interest thereon) arising from all

erroneous deductions,

then an amount equal to 1/15th of the aggregate of the

prior

deductions which would have been allowable if the

amendments

made by this section applied to taxable years beginning

before January 1, 1980, shall be allowed as a deduction

for the taxpayer's first taxable year beginning

in 1980, and

an equal amount shall be allowed for each of the

succeeding

14 taxable years.

(B) Prior deduction.-For purposes of subparagraph (A), the term "prior deduction" means a deduction with

respect

to a qualified funded plan (within the meaning of

section

404 A(f)(1) of the Internal Revenue Code of 1954) of

the

taxpayer--,

(i) which the taxpayer claimed for a taxable year (or could have claimed if the amendments made by this section applied to taxable years beginning before

January

1, 1980) beginning before January 1, 1980,

(ii) which was not allowable, and (iii) with respect to which, on December 1, 1980, the assessment of a deficiency was not barred by any law or rule of law.

(4) Time and manner for making elections.--,

(A) Time.-An election under paragraph (2) or (3) may be made only on or before the due date (including

extensions)

for filing the taxpayer's return of tax under chapter 1

of the

Internal Revenue Code of 1954

// 26 USC 1 //

for its first taxable year

ending on or after December 31, 1980.

(B) Manner.-An election under paragraph (2) may be made only by a statement attached to the taxpayer's

return

for its first taxable year ending on or after December

31,

1980. An election under paragraph (3) may be made

only if

the taxpayer, on or before the last day for making the

election, files with the Secretary of the Treasury or

his

delegate such amended return and such other information

as the Secretary of the Treasury or his delegate may

require,

and agrees to the assessment of a deficiency for any

closed

year falling within the open period, to the extent such

deficiency is attributable to the operation of such

election.

SEC. 3. TREATMENT OF TRANSFERS OF PROVEN OIL OR GAS PROPERTIES BY INDIVIDUALS TO CORPORATIONS.

(a) In General.-Subsection (c) of section 613 A of the Internal Revenue Code of 1954 // 26 USC 613 A. // (relating to exemption for independent producers and royalty owners) is amended by redesignating paragraphs (10) and (11) as paragraphs (11) and (12), respectively, and by inserting after paragraph (9) the following new paragraph:

"(10) Transfers by individuals to corporations.--,

"(A) In general.-Paragraph (9)(A) shall not apply to a transfer by an individual of qualified property to a

qualified

transferee corporation solely in exchange for stock in

such

corporation.

"(B) 1,000-barrel limit for corporation.-A tentative quantity shall be determined for the qualified

transferee

corporation under this subsection.

"(C) Transferor's tentative quantity reduced.--, "(i) In general.-The tentative quantity for the transferor (and his family) for any period shall be reduced by the transferor's pro rata share of the

corporation's

depletable quantity for such period.

"(ii) Pro rata share.-For purposes of clause (i), a transferor's pro rata share for any period shall be--, "(I) in the case of production from property to which subparagraph (A) applies, that portion of the corporation's depletable quantity which is allocable to production from such property, and "(II) in the case of production from all other property, that portion of the corporation's depletable quantity which is allocable to the production from such property, multiplied by a fraction the numerator of which is the fair market value of the transferor's stock in the corporation, and the denominator of which is the fair market value of all stock in the corporation. "(iii) Depletable quantity.-For purposes of this paragraph, a corporation's depletable quantity for any period in the lesser of--, "(I) such corporation's tentative quantity for such period (determined under paragraphs (3) and (8)), or "(II) such corporation's average daily production for such period. "(D) Qualified transferee corporation defined.-For purposes of this paragraph, the term 'qualified

transferee

corporation' means a corporation all of the outstanding

stock

of which has been issued to individuals solely in

exchange for

qualified property held by such individuals.

"(E) Qualified property defined.-For purposes of this paragraph, the term 'qualified property' means oil or

gas

property with respect to which--,

"(i) there has been no prior transfer to which paragraph (9)(A) applied, and "(ii) the transferor has made an election to have this paragraph apply. The term also includes cash (not to exceed $1,000 in

the

aggregate) which one or more individuals transfer to the

corporation.

"(F) Transferor must retain stock during lifetime.-If at any time during his lifetime any transferor disposes

of

stock in the corporation (other than to a member of his

family), then the depletable quantity of the corporation

(determined without regard to this subparagraph) shall

be

reduced (for all periods on or after the date of the

disposition)

by an amount which bears the same ratio to such

quantity as

the fair market value of the stock so disposed of bears

to the

aggregate fair market value of all stock of the

corporation on

such date of disposition.

"(G) Special rules relating to family of transferor.--, "(i) In general.-For purposes of this paragraph--, "(I) the issuance of stock to a member of the family of the transferor shall be treated as issuance of stock to the transferor, and "(II) during the lifetime of the transferor, stock transferred to a member of the family of the transferor shall be treated as held by the transferor. If stock described in the preceding sentence ceases to

be

held by a member of the family of the transferor, the

transferor shall be treated as having disposed of such

stock at the time of such cessation.

"(ii) Family defined.-For purposes of this paragraph, the members of the family of an individual include only his spouse and minor children. "(H) Property subject to liabilities.-For purposes of this paragraph, section 357

// 26 USC 357. //

shall be applied as if--,

"(i) references to section 351

// 26 USC 351. //

include references to

subparagraph (A) of this paragraph, and

"(ii) the reference in subsection (a)(1) of section 357

// 26 USC 357. //

to

the nonrecognition of gain includes a reference to the

nonapplication of paragraph (9)(A) of this subsection.

"(I) Election.-A transferor may make an election under this paragraph only in such manner as the Secretary

may by

regulations prescribe and only on or before the due date

(including extensions) for filing the return of the

corporation

of the taxes imposed by this chapter for the

corporation's

first taxable year ending after the date of the

transfer (or, if

later, after the date of the enactment of this

paragraph).

"(J) Regulations.-The Secretary shall prescribe such regulations as may be necessary to carry out the

purposes of

this paragraph."

(b) Effective Date.-The amendments made by subsection (a) // 26 USC 613 A // shall apply to transfers in taxable years ending after December 31, 1974, but only for purposes of applying section 613 A of the Internal Revenue Code of 1954 // 26 USC 613 A. // to periods after December 31, 1979.

SEC. 4. CREDITS ALLOWABLE AGAINST MINIMUM TAX.

(a) Allowance of Credit.--,

(1) In general.-Paragraph (1) of section 55(c)

// 26 USC 55. //

(relating to credits allowable against alternative minimum tax) is amended to read as follows:

"(1) In general.-For purposes of--,

"(A) determining the amount of any credit allowable under subpart A of part IV of this subchapter

// 26 USC 31. //

(other than the

foreign tax credit allowable under section 33(a))

// 26 USC 33. //

against the

tax imposed by subsection (a), the tax imposed by

subsection

(a) shall be treated as a tax imposed by this chapter

only to

the extent of the amount which would be determined under

subsection (a)(1) if the alternative minimum taxable

income

was reduced by the sum of--,

"(i) the net capital gain, and "(ii) the adjusted itemized deductions, and "(B) determining the amount of any such credit (including the credit allowable under section 33(a)) against the

tax

imposed by this chapter (other than the tax imposed by

this

section) for the current taxable year, this section

shall be

disregarded."

(2) Method of determining credits taken into account.--, Section 55(c)

// 26 USC 55. //

is amended by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively, and by inserting after paragraph (1) the following new paragraph:

"(2) Rules for determining amount of credit allowable.--, For purposes of determining the amount of any credit under subpart A of part IV of this subchapter

// 26 USC 31. //

(other than the credits imposed by sections 31, 39, and 43)

// 26 USC 31, 39, 43. //

which can be taken against the tax imposed by subsection (a)--,

"(A) the amount of such credit shall be increased by an amount equal to the lesser of--, "(i) the amount of such credit allowable in computing the regular tax for the current taxable year, or "(ii) the excess of--, "(I) the amount of the tax imposed by subsection (a), over "(II) the sum of the amounts determined under this subparagraph with respect to credits allowed under a section of such subpart having a higher number designation than such credit (other than the credits allowable by sections 31, 39, and 43),

// 26 USC 31, 39, 43. //

and

"(B) in the case of any credit under section 38, 40,

or 44 B,

// 26 USC 38, 40, 44 B. //

such credit shall be reduced, under regulations

prescribed by

the Secretary, by that portion of such credit which is

not

attributable to an active trade or business of the

taxpayer."

(3) Paragraph (4) of section 55(c)

// 26 USC 55. //

(relating to carryover and carryback of certain credits), as redesignated by paragraph (2), is amended to read as follows:

"(4) Carryover and carryback of certain credits.--,

"(A) In general.-For purposes of determining the amount of any carryover or carryback to any other

taxable

year of any credit allowable under subpart A of part

IV of

this subchapter

// 26 USC 31, 33. //

(other than section 33), the amount of the

limitation under section 44 E(e)(1), 44 C(b) (1)

and (2), 53(b),

50 A(a)(2), or 46(a)(3)

// 26 USC 44 E, 44 C, 53. 26 USC 50 A, 46. //

(to the exent such limitation does not

exceed the amount of the credit allowable in computing

the

regular tax for the current taxable year) shall be

increased

for the current taxable year by the amount determined

under subparagraph (A) of paragraph (1) of this

subsection,

and decreased by--,

"(i) the sum of the credits allowed under a section having a lower number designation than the section allowing such credit (other than the credits allowable

by

sections 31, 33, 39, and 43)

// 26 USC 31, 33, 39, 43. //

against the tax imposed by

subsection (a), and

"(ii) the amount determined with respect to such credit under paragraph (2)(B) for the current taxable year. "(B) Amount of credit.-Any increase under paragraph (2)(A) shall be taken into account in determining the

amount

of any carryover or carryback from the current taxable

year."

(b) Technical and Conforming Amendments.--,

(1) Paragraph (2) of section 55(b)

// 26 USC 55. //

(defining regular tax) is amended by striking out "credit allowable under section 33"

// 26 USC 33. //

and inserting in lieu thereof "credits allowable under such subpart".

(2) Paragraph (3) of section 55(c) (relating to foreign tax credit), as redesignated by subsection (a)(2), is amended--,

(A) by striking out subparagraph (B) and redesignating subparagraphs (C), (D), and (E) as subparagraphs

(B), (C), and

(D), respectively;

(B) by striking out "subparagraph (C)" in subparagraphs (C) and (D)(i), as so redesignated, and inserting in

lieu thereof

"subparagraph (B)"; and

(C) by striking out clause (ii) of subparagraph (D), as

so

redesignated, and inserting in lieu thereof the

following:

"(ii) any increase under paragraph (2)(A) shall be taken into account."

(c) Effective Date.-The amendments made by this section // 26 USC 55 // shall apply to taxable years beginning after December 31, 1979.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1044 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1039 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

June 17, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to Senate amendments with amendments; Senate agreed to House amendments.

PUBLIC LAW 96-602, 94 STAT. 3500

96th CONGRESS, S. 1803 DECEMBER 28, 1980
An Act To modify the boundary of the Cibola National Forest

in the State of New Mexico,

and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the exterior boundary of the Cibola National Forest in New Mexico is hereby modified to include an area of approximately fourteen thousand four hundred and seventy-six acres as shown on United States Department of Agriculture, Forest Service map entitled " Boundary Modification, Cibola National Forest", dated April 1980.

Sec. 2. Subject to valid existing rights, all lands owned by the United States in the areas described in section 1 of this Act are hereby added to the Cibola National Forest, and shall be administered in accordance with the laws, rules, and regulations applicable thereto.

Sec. 3. For the purpose of section 6 (renumbered section 7 by the Act of July 11, 1972, 86 Stat. 459) of the Land and Water Conservation Fund Act of 1965 (78 Stat. 903 as amended; 16 U.S.C. 4601 - 9 (1976)) // 16 USC 460l-9. // the boundary of the Cibola National Forest, as modified by section 1 of this Act, shall be treated as if it were the boundary of that forest on January 1, 1965.

Sec. 4. The Act of March 14, 1978 (92 Stat. 154), // 20 USC 238 // is amended as follows:

(a) In section 1(a), in the first sentence, delete the phrase "two--, year", and change " September 30, 1980" to " September 30, 1985"; and

(b) In section 1(c) strike the second sentence in its entirety and insert the following: " There is authorized to be appropriated an amount not to exceed $1,500,000 annually for fiscal years 1979 through 1982 to carry out the provisions of this Act: Provided, That any appropriations made pursuant to this Act shall be reduced by the amount of any payments made to said districts pursuant to the Acts of September 23, 1950 (64 Stat. 906), as amended (20 U.S.C. 631 et seq.), and September 30, 1950 (64 Stat. 1100), as amended (20 U.S.C. 236 et seq.). For the authorizations made in this subsection, any amounts authorized but not appropriated in any fiscal year shall remain available for appropriation in succeeding fiscal years.".

Sec. 5. (a) The Secretary of the Army, acting through the Chief of Engineers, is prohibited from taking any legal or administrative action in connection with the operation and maintenance of the Conchas Lake project, New Mexico seeking to remove improvements, including dwelling, that are presently located within the flowage easement below elevation 4,220 feet mean sea level: Provided, That this prohibition shall not be construed as creating any liability in the United States, or any of its officers, agents, or assigns, for any injury, loss, or damage accruing to the owners of such improvements, their leasees or occupants, as a result of any flooding or inundation of such improvements by the waters of the reservoir, or for such injury, loss, or damage as may occur through the operation and maintenance of the dam and reservoir in any manner.

(b)(1) The Secretary of the Army is prohibited from determining the forty-five-acre cabin site in the south recreation area at Conchas Lake, New Mexico, to be excess of project needs prior to 1996, unless such a determination is agreed to by the Governor of the State of New Mexico or his designee.

(2) The Secretary of the Army shall not require the removal or sale and purchase of existing cabins, cottages, or other privately owned improvements located on the site referred to in paragraph (1) of this subsection prior to 1996, unless agreed to by the Governor of the State of New Mexico or his designee. Existing and prospective lease arrangements shall reflect the requirements of this section.

Sec. 6. (a) The Secretary of the Treasury shall pay out of any funds in the Treasury, not otherwise appropriated, to the estate of Demetrio Madrid or into a court of competent jurisdiction, for distribution to such persons as shall be lawfully entitled thereto, the sum of $21,054.

(b) Upon payment being made as provided in subsection (a), the United States and all officers and employees thereof shall be forever released and discharged of and from any and all claims at law or in equity, if any, arising out of or in any way connected with the erroneous inclusion of certain lands in homestead entry and patent numbered 323419, issued on April 3, 1913, to Demetrio Madrid, a resident of New Mexico.

(c) No amount in excess of 10 per centum of any payment referred to in this section shall be paid to or received by any agent or attorney in consideration for services rendered in connection with such pay--, ment. Any violation of this subsection shall be a misdemeanor and any person convicted thereof shall be fined not more than $1,000.

Sec. 7. Any mining claim located under the Mining Laws of the United States subsequent to June 18, 1879, and prior to January 17, 1969, in the northwest quarter of the northwest quarter of section 9, township 1 north, range 5 east of the Gila and Salt River base and meridian, State of Arizona, shall be effective to the same extent in all respects as if such lands at the time of location, and at all times thereafter had been open to the operation of the Mining Laws of the United States: Provided, however, That the claimants have complied with all requirements of the Mining Laws of the United States, including section 314 of the Federal Land Policy and Management Act of 1976 // 43 USC 1744. // and that the claims would be subject to any valid intervening rights by private parties under the laws of the United States.

Approved December 28, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1465 (Comm. on Interior and Insular Affairs).

SENATE REPORT No. 96 - 661 (Comm. on Energy and Natural Resources).

CONGRESSIONAL RECORD, Vol. 126 (1980):

June 6, considered and passed Senate.

Dec. 9, considered and passed House, amended.

Dec. 12, Senate agreed to House amendment.

PUBLIC LAW 96-601, 94 STAT. 3495

96 TH CONGRESS, H.R. 5505 DECEMBER 24, 1980
An Act To simplify certain provisions of the Internal Revenue

Code of 1954, and for other

purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. AMENDMENT OF 1954 CODE.

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1954. // 26 USC 1. //

SEC. 2. TRANSFER OF DOMESTC WINE TO CUSTOMS BONDED WAREHOUSE FOR CERTAIN PURPOSES.

(a) Transfer to Customs Bonded Warehouse.-Paragraph (4) of section 5362(c) // 26 USC 5362. // (relating to withdrawals of wine free of tax or without payment of tax) is amended to read as follows:

"(4) without payment of tax for transfer to any customs bonded warehouse;".

(b) Withdrawal From Customs Bonded Warehouses for Use of Foreign Embassies, Legations, Etc.-Section 5362 is amended by adding at the end thereof the following new subsection:

"(e) Withdrawal From Customs Bonded Warehouses for Use of Foreign Embassies, Legations, Etc.--,

"(1) In general.-Notwithstanding any other provision of law, wine entered into customs bonded warehouses under subsection (c)( 4) may, under such regulations as the Secretary may prescribe, be withdrawn from such warehouses for consumption in the United States by and for the official or family use of such foreign governments, organizations, and individuals who are entitled to withdraw imported wines from such warehouses free of tax. Wines transferred to customs bonded warehouses under subsection (c)(4) shall be entered, stored, and accounted for in such warehouses under such regulations and bonds as the Secretary may prescribe, and may be withdrawn therefrom by such governments, organizations, and individuals free of tax under the same conditions and procedures as imported wines.

"(2) Withdrawal for domestic use.-Wine entered into customs bonded warehouses under subsection (c)(4) for purposes of removal under paragraph (1) may be withdrawn therefrom for domestic use. Wines so withdrawn shall be treated as American goods exported and returned.

"(3) Sale or unauthorized use prohibited.-Wine withdrawn from customs bonded warehouses or otherwise brought into the United States free of tax for the official or family use of foreign governments, organizations, or individuals authorized to obtain wine free of tax shall not be sold and shall not be disposed of or possessed for any use other than an authorized use. The provisions of paragraphs (1)(B) and (3) of section 5043(a)

// 26 USC 5043. //

are hereby extended and made applicable to any person selling, disposing of, or possessing any wine in violation of the preceding sentence, and to the wine involved in any such violation.".

(c) Effective Date.-The amendments made by this section // 26 USC 5362 // shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act.

SEC. 3. EXEMPT STATUS OF AUXILIARIES OF CERTAIN FRATERNAL BENEFICIARY SOCIETIES.

(a) General Rule.-Subsection (i) of section 501 // 26 USC 501. // is amended by adding at the end thereof the following new sentence: " The preceding sentence to the extent it relates to discriminatin on the basis of religion shall not apply to--,

"(1) an auxiliary of a fraternal beneficiary society if such society--,

"(A) is described in subsection (c)(8) and exempt from

tax

under subsection (a), and

"(B) limits its membership to the members of a particular religion, or

"(2) a club which in good faith limits its membership to the members of a particular religion in order to further the teachings or principles of that religion, and not to exclude ndividuals of a particular race or color.".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 501 // shall apply to taxable years beginning after October 20, 1976.

SEC. 4. EXTENSION OF WITHHOLDING TO PAYMENTS OF SICK PAY MADE BY THIRD PARTIES.

(a) General Rule.-Paragraph (1) of section 3402(o) // 26 USC 3402. // (relating to extension of withholding to certain payments other than wages) is amended by striking out "and" at the end of subparagraph (A), by adding "and" at the end of subparagraph (B), and by inserting after subparagraph (B) the following new subparagraph:

"(C) any payment to an individual of sick pay which does not constitute wages (determined without regard to this subsection), if at the time the payment is made a request that such sick pay be subject to withholding under this chapter is in effect,".

(b) Amount To Be Deducted and Withheld.-Subsection (o) of section 3402 is amended by striking out paragraph (3) and inserting in lieu thereof the following new paragraphs:

"(3) Amount withheld from annuity payments or sick pay.-If a payee makes a request that an annuity or any sick pay be subject to withholding under this chapter, the amount to be deducted and withheld under this chapter from any payment to which such request applies shall be an amount (not less than a minimum amount determined under regulations prescribed by the Secretary) specified by the payee in such request. The amount deducted and withheld with respect to a payment which is greater or less than a full payment shall bear the same relation to the specified amount as such payment bears to a full payment.

"(4) Request for withholding.-A request that an annuity or any sick pay be subject to withholding under this chapter--,

"(A) shall be made by the payee in writing to the person making the payments and shall contain the social

security

number of the payee,

"(B) shall specify the amount to be deducted and withheld from each full payment, and "(C) shall take effect--, "(i) in the case of sick pay, with respect to payments made more than 7 days after the date on which such request is furnished to the payor, or "(ii) in the case of an annuity, at such time (after the date on which such request is furnished to the payor) as the Secretary shall by regulations prescribe.

Such a request may be changed or terminated by furnishing to the person making the payments a written statement of change or termination which shall take effect in the same manner as provided in subparagraph (C). At the election of the payor, any such request (or statement of change or revocation) may take effect earlier than as provided in subparagraph (C).

"(5) Special rule for sick pay paid pursuant to certain collective-bargaining agreements.-In the case of any sick pay paid pursuant to a collective-bargaining agreement between employee representatives and one or more employers which contains a provision specifying that this paragraph is to apply to sick pay paid pursuant to such agreement and contains a

provision for determining the amount to be deducted and withheld

from each payment of such sick pay--,

"(A) the requirement of paragraph (1)(C) that a request

for

withholding be in effect shall not apply, and

"(B) except as provided in subsection (n), the amounts

to be

deducted and withheld under this chapter shall be

determined

in accordance with such agreement.

The preceding sentence shall not apply with respect to sick pay paid pursuant to any agreement to any individual unless the social security number of such individual is furnished to the payor and the payor is furnished with such information as is necessary to determine whether the payment is pursuant to the agreement and to determine the amount to be deducted and withheld.".

(c) Definition of Sick Pay.-Paragraph (2) of section 3402(o) // 26 USC 3402. // (relating to definitions) is amended by adding at the end thereof the following new subparagraph:

"(C) Sick pay.-For purposes of this subsection, the term 'sick pay' means any amount which--,

"(i) is paid to an employee pursuant to a plan to which the employer is a party, and "(ii) constitutes remuneration or a payment in lieu of remuneration for any period during which the employee is temporarily absent from work on account of sickness or personal injuries.".

(d) Technical Amendment.-Subparagraph (B) of section 3402(o)(2) (defining annuity) is amended by striking out ", but only to the extent that the amount is includible in the gross income of such individual".

(e) Reporting Requirements.-Section 6051 // 26 USC 6051. // (relating to receipts for employees) is amended by adding at the end thereof the following new subsection:

"(f) Statements Required in Case of Sick Pay Paid by Third Parties.--,

"(1) Statements required from payor.--,

"(A) In general.-If, during any calendar year, any person makes a payment of third-party sick pay to an employee, such person shall, on or before January 15 of the succeeding year, furnish a written statement to the employer in respect of whom such payment was made showing--, "(i) the name and, if there is withholding under section 3402(o),

// 26 USC 3402. //

the social security number of such

employee,

"(ii) the total amount of the third-party sick pay paid to such employee during the calendar year, and "(iii) the total amount (if any) deducted and withheld from such sick pay under section 3402. For purposes of the preceding sentence, the term

'third-party

sick pay' means any sick pay (as defined in section

3402(o)(2)(C)

// 26 USC 3401 //

which does not constitute wages for purposes of

chapter 24 (determined without regard to

section 3402(o)(1)).

"(B) Special rules.--, "(i) Statements are in lieu of other reporting requirements.-The reporting requirements of

subparagraph

(A) with respect to any payments shall, with

respect to such payments, be in lieu of the requirements

of subsection (a) and of section 6041.

// 26 USC 6041. //

"(ii) Penalties made applicable.-For purposes of sections 6674 and 7204, the statements required to be furnished by subparagraph (A)

// 26 USC 6674, 7204. //

shall be treated as statements

required under this section to be furnished to

employees.

"(2) Information required to be furnished by employer.--, Every employer who receives a statement under paragraph (1)(A) with respect to sick pay paid to any employee during any calendar year shall, on or before January 31 of the succeeding year, furnish a written statement to such employee showing--,

"(A) the information shown on the statement furnished under paragraph (1)(A), and "(B) if any portion of the sick pay is excludable from

gross

income under section 104(a)(3),

// 26 USC 104. //

the portion which is not so

excludable and the portion which is so excludable.

To the extent practicable, the information required under the preceding sentence shall be furnished on or with the statement (if any) required under subsection (a).".

(f) Effective Date.-The amendments made by this section // 26 USC 3402 // shall apply to payments made on or after the first day of the first calendar month beginning more than 120 days after the date of the enactment of this Act.

SEC. 5. RHODE ISLAND INDIAN CLAIMS SETTLEMENT ACT.

(a) In General.-The Rhode Island Indian Claims Settlement Act (Ppublic Law 95 - 395) is amended by adding at the end thereof the following new title:

" TITLE II-TAX TREATMENT " EXEMPTION FROM TAXATION

" Sec. 201. (a) Except as otherwise provided in subsections (b) and (c), // 26 USC 1715. // the settlement lands received by the State Corporation shall not be subject to any form of Federal, State, or local taxation while held by the State Corporation.

"(b) The exemption provided in subsection (a) shall not apply to any income-producing actvities occurring on the settlement lands.

"(c) Nothing in this Act shall prevent the making of payments in lieu of taxes by the State Corporation for services provided in connection with the settlement lands.

" DEFERRAL OF CAPITAL GAINS

" Sec. 202. For purposes of the Internal Revenue Code of 1954, // 25 USC 1716. 26 USC 1. // any sale or disposition of private settlement lands pursuant to the terms and conditions of the settlement agreement shall be treated as an involuntary conversion within the meaning of section 1033 of the Internal Revenue Code of 1954.". // 26 USC 1033. //

(b) Effective Date.-The amendment made by subsection (a) // 25 USC 1715. // shall take effect on September 30, 1978.

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 545 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1033 (Comm. on Finance).

CONGRESSIONAL RECORD:

Vol. 125 (1979): Oct. 30, considered and passed House.

Vol. 126 (1980): Dec. 13, considered and passed Senate, amended; House agreed to Senate amendments with amendments; Senate agreed to House amendments.

PUBLIC LAW 96-600, 94 STAT. 3493

96 TH CONGRESS, H.R. 7694

DECEMBER 24, 1980

An Act To authorize the Secretary of Defense to provide

civilian career employees of the

Department of Defense who are residents of Guam, the

Virgin Islands, or the

Commonwealth of Puerto Rico the same relative

rotation rithts as apply to other

career employees, to authorize the Delegates in

Congress from Guam and the

Virgin Islands to have two appointments at a time,

rather than one appointment,

to each of the service academies, and to authorize the

establishment of a National

Guard of Guam.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 1586 of title 10, United States Code, // 10 USC 1586. // relating to the rotation of civilian employees of the Department of Defense assigned to duty outside the United States, is amended by adding at the end thereof the following new subsection:

"(h) The Secretary of Defense may, under such regulations as he may prescribe, make the provisions of subsections (a) through (g) applicable to civilian employees of the Department of Defense who are residents of Guam, the Virgin Islands, or the Commonwealth of Puerto Rico at the time of their employment by the Department of Defense in the same manner as if the references in such subsections to the United States (when used in a geographical sense) were references to Guam, the Virgin Islands, or the Commonwealth of Puerto Rico, as the case may be.".

Sec. 2. (a) Section 4342(a) of title 10, United States Code, // 10 USC 4342. // relating to the number of cadets at the United States Military Academy, is amended by striking out " One cadet" in clauses (6) and (9) and inserting in lieu thereof " Two cadets".

(b) Section 6954(a) of such title, // 10 USC 6954. // relating to the number of midshipmen at the United States Naval Academy, is amended by striking out " One" in clauses (6) and (9) and inserting in lieu thereof " Two". (c) Section 9342(a) of such title, // 10 USC 9342. // relating to the number of cadets at the United States Air Force Academy, is amended by striking out " One cadet" in clauses (6) and (9) and inserting in lieu thereof " Two cadets".

(d) The amendments made by this section // 10 USC 4342 // shall be effective beginning with the nominations for appointment to the service academies for academic years beginning more than one year after the date of enactment of this Act.

Sec. 3. (a) Section 101(1) of title 32, United States Code, // 32 USC 101. // relating to the definition of the term " Territory", is amended by inserting " Guam and" before "the Virgin Islands".

(b) Clauses (7) and (9) of section 101 of title 37, United States Code, // 37 USC 101. // relating to the definitions of the terms " Army National Guard" and " Air National Guard", are each amended by inserting " Guam," after " Puerto Rico,".

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1226, Pt. 1 (Comm. on Armed Services).

SENATE REPORT No. 96 - 1053 (Comm. on Armed Services).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Aug. 25, considered and passed House.

Dec. 12, considered and passed Senate, amended.

Dec. 13, House agreed to Senate amendments.

PUBLIC LAW 96-599, 94 STAT. 3491, INTERNATIONAL COFFEE AGREEMENT ACT OF 1980

96 TH CONGRESS, H.R. 3637 DECEMBER 24, 1980
An Act To carry out the obligations of the United States under

the International Coffee

Agreement 1976, signed at New York on

February 27, 1976, and entered into

force for the United States on October 1, 1976, and

for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Section 1. This Act // 19 USC 1356k // may be cited as the " International Coffee Agreement Act of 1980".

INPORTATION OF COFFEE UNDER INTERNATIONAL COFFEE

AGREEMENT

1976; PRESIDENTIAL POWERS AND DUTIES

Sec. 2. // 19 USC 1356k. // On and after the entry into force of the International Coffee Agreement 1976, and for such period prior to October 1, 1982 as the agreement remains in effect, the President is authorized, in order to carry out and enforce the provisions of that agreement--,

(1) to regulate the entry of coffee for consumption, or withdrawal of coffee from warehouse for consumption, or any other form of entry or withdrawal of coffee such as for transportation or exportation, including whenever quotas are in effect pursuant to the agreement, (A) the limitation of entry, or withdrawal from warehouse, of coffee imported from countries which are not members of the International Coffee Organization, and (B) the prohibition of entry of any shipment from any member of the International Coffee Organization of coffee which is not accompanied either by a valid certificate of origin, a valid certificate of reexport, a valid certificate of reshipment, or a valid certificate of transit, issued by a qualified agency in such form as required under the agreement;

(2) to require that every export or reexport of coffee from the United States shall be accompanied by a valid certificate of origin or a valid certificate of reexport, issued by a qualified agency of the United States designated by him, in such form as required under the agreement;

(3) to require the keeping of such records, statistics, and other information, and the rendering of such reports, relating to the importation, distribution, prices, and consumption of coffee as he may from time to time prescribe; and

(4) to take such other action, and issue and enforce such rules and regulations, as he may consider necessary or appropriate in order to implement the obligations of the United States under the agreement.

DEFINITION OF COFFEE

Sec. 3. As used in this Act, // 19 USC 1356l. // the term "coffee" means coffee as defined in article 3 of the International Coffee Agreement 1976. // 28 UST 6401. //

DELEGATION OF PRESIDENTIAL POWERS AND DUTIES;

PROTECTION OF

INTERESTS OF UNITED STATES CONSUMERS; REMEDIAL

ACTION

Sec. 4. // 19 USC 1356m. // The President may exercise any powers and duties conferred on him by sections 2 through 5 of this Act through such agency or officer as he shall direct. The powers and duties conferred by sections 2 through 5 of this Act shall be exercised in the manner the President considers appropriate to protect the interest of United States consumers. In the event the President determines that there has been an unwarranted increase in the price of coffee due in whole or in part to the International Coffee Agreement, or to market manipulation by two or more members of the International Coffee Organization, the President shall request the International Coffee Council or the Executive Board to increase supplies of coffee available to world markets by suspending coffee export quotas and to take any other appropriate action. At the same time he shall report his determination to the Congress. In the event the International Coffee Council has failed to take corrective action to remedy the situation within a reasonable time after such request, the President shall submit to the Congress such recommendations as he may consider appropriate to correct the situation. In the event that members of the International Coffee Organization involved in market manipulation which has resulted in price increases have failed to remedy the situation within a reasonable time after a request for remedy, the exercise of the authority set forth in section 2 of this Act shall be suspended until the President determines that effective market manipulation activities have ceased.

REPORT TO THE CONGRESS

Sec. 5. // 19 USC 1356n. // The President shall submit to the Congress an annual report on the International Coffee Agreement 1976. // 28 UST 6401. // Such report shall contain full information on the operation of such agreement, including full information with respect to the general level of prices of coffee and matters pertaining to the transportation of coffee from exporting countries to the United States. The report shall also include a summary of the actions the United States and the International Coffee Organization have taken to protect the interest of United States consumers.

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT: No. 96 - 1322 (Comm. on Ways and Means).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Dec. 2, considered and passed House.

Dec. 15, considered and passed Senate.

PUBLIC LAW 96-598, 94 STAT. 3485

96 TH CONGRESS, H.R. 3317 DECEMBER 24, 1980
An Act To amend the Internal Revenue Code of 1954 with

respect to excise tax refunds in

the case of certain uses of tread rubber, and for other

purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. EXCISE TAX REFUNDS IN CASE OF CERTAIN USES OF TREAD RUBBER.

(a) Refunds for Certain Uses.-Subparagraph (G) of section 6416(b)(2) of the Internal Revenue Code of 1954 // 26 USC 6416. // (relating to special cases in which tax payments considered overpayments) is amended to read as follows:

"(G) in the case of tread rubber in respect of which tax was paid under section 4071(a)(4)--,

"(i) used or sold for use otherwise than in the recapping or retreading of tires of the type used on highway vehicles (as defined in section 4072(c)), "(ii) destroyed, scrapped, wasted, or rendered useless in the recapping or retreading process, "(iii) used in the recapping or retreading of a tire the sale of which is later adjusted pursuant to a warranty

or

guarantee, in which case the overpayment shall be in

proportion to the adjustment in the sales price of such

tire, or

"(iv) used in the recapping or retreading of a tire, if such tire is by any person exported, used or sold for

use

as supplies for vessels or aircraft, sold to a State

or local

government for the exclusive use of a State or local

government, or sold to a nonprofit educational

organization

for its exclusive use,

unless credit or refund of such tax is allowable under paragraph (3);".

(b) Use in Further Manufacture, Etc.--,

(1) In general.-Paragraph (3) of section 6416(b) of such Code (relating to tax-paid articles used for further manufacture, etc.) is amended by inserting after subparagraph (C) the following new subparagraph:

"(D) in the case of tread rubber in respect of which tax

was

paid under section 4071(a)(4) used in the recapping or

retreading of a tire, such tire is sold by the

subsequent

manufacturer or producer on or in connection with, or

with

the sale of, any other article manufactured or produced

by

him and such other article is by any person exported,

sold to

a State or local government for the exclusive use of a

State or

local government, sold to a nonprofit educational

organization

for its exclusive use, or used or sold for use as

supplies

for vessels or aircraft, unless credit or refund of

such tax is

allowable under subparagraph (C);".

(2) Technical amendments.--,

(A) Subparagraph (E) of section 6416(b)(2) of such

Code is

amended by inserting after "paragraph (3)" the

following:

"(or in the case of the tread rubber on a recapped or

retreaded tire, resold for use as provided in

subparagraph (D)

of paragraph (3)),".

(B) Subparagraph (C) of section 6416(a)(1) of such

Code is

amended by striking out "(b)(3)(C)" and inserting in

lieu

thereof "(b)(3) (C) or (D)".

(C) Subparagraph (A) of section 6416(b)(3) of such

Code is

amended by inserting "(D)," after "(C),".

(D) Subparagraph (A) of section 6416(b)(4) of such

Code is

amended by striking out "section 4071" and inserting in

lieu

thereof "section 4071, or a recapped or retreaded tire

in

respect of which tax under section 4071(a)(4) was paid

on the

tread rubber used in the recapping or retreading,".

(c) Statute of Limitations.-Section 6511 of such Code // 26 USC 6511. // (relating to limitations on credit or refund) is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection:

"(i) Special Rule for Certain Tread Rubber Tax Credits or Refunds.- The period for allowing a credit or making a refund of any overpayment of tax arising by reason of subparagraph (G)(iii) of section 6416(b)(2) with respect to any adjustment of sales price of a tire pursuant to a warranty or guarantee shall not expire if claim therefor is filed before the date which is one year after the day on which such adjustment is made.".

(d) Imported Recapped or Retreaded United States Tires.--, Section 4071 of such Code // 26 USC 4071. // (relating to excise tax on tires and tubes) is amended by adding at the end thereof the following new subsection:

"(f) Imported Recapped or Retreaded United States Tires.--,

"(1) In general.-For purposes of subsection (a)(4), in the case of a tire which has been exported from the United States, recapped or retreaded (other than from bead to bead) outside the United States, and imported into the United States--,

"(A) the person importing such tire shall be treated as importing the tread rubber used in such recapping or retreading (determined as of the completion of the

recapping

or retreading), and

"(B) the sale of such tire by the importer thereof shall

be

treated as the sale of such tread rubber.

"(2) Exception for certain taxable sales.-Paragraph (1) shall not apply with respect to the sale of any tire if such tire is sold on or in connection with the sale of an article on which tax is imposed under section 4061.".

(e) Effective Date.-The amendments made by this section // 26 USC 4071 // shall take effect on the first day of the first calendar month which begins more than 10 days after the date of the enactment of this Act.

SEC. 2. // 26 USC 1034 // NONRECOGNITION OF GAIN ON SALE OF PRINCIPAL RESIDENCE.

(a) In General.-In the case of an individual--,

(1) who sold his principal residence (within the meaning of section 1034 of the Internal Revenue Code of 1954) in 1977,

(2) who purchased property on which to construct a new principal residence (within the meaning of such section)--,

(A) the construction of which commenced during such year, and (B) the construction of which was terminated before

completion,

(3) who brought an action, and obtained a judgment, against the builder who commenced construction of the new residence but failed to complete it,

(4) who suspended construction of such residence so that the partially constructed residence could be used as evidence in connection with the prosecution of the builder (without regard to whether it was so used), and

(5) who failed to meet the requirements of such section with respect to occupancy of the new principal residence because of such suspension of construction,

the Secretary of the Treasury, in the administration of section 1034(c) of the Internal Revenue Code of 1954 (relating to rules for application of section 1034), shall apply paragraph (5) of such section as if "5 years" were substituted for "2 years" where it appears in the last sentence of such paragraph.

(b) Effective Date.-The provisions of the first section of this Act shall apply with respect to taxable years beginning after December 31, 1976, and before January 1, 1983.

SEC. 3. DISCLOSURE OF TAX RETURNS TO STATE AUDIT AGENCIES.

(a) General Rule.-Subsection (d) of section 6103 of the Internal Revenue Code of 1954 // 26 USC 6103. // (relating to disclosure of return information to State tax officials) is amended to read as follows:

"(d) Disclosure to State Tax Officials.--,

"(1) In general.-Returns and return information with respect to taxes imposed by chapters 1, 2, 6, 11, 12, 21, 23, 24, 31, 32, 44, 51, and 52 and subchapter D of chapter 36

// 26 USC 1, 1401, 1501, 2001, 2501, 3101, 3301, 3401, 4001, 4061, 4981, 5001, 5701, 4481. //

shall be open to inspection by, or disclosure to, any State agency, body, or commission, or its legal representative, which is charged under the laws of such State with responsibility for the administration of State tax laws for the purpose of, and only to the extent necessary in, the administration of such laws, including any procedures with respect to locating any person who may be entitled to a refund. Such inspection shall be permitted, or such disclosure made, only upon written request by the head of such agency, body, or commission, and only to the representatives of such agency, body, or commission designated in such written request as the individuals who are to inspect or to receive the returns or return information on behalf of such agency, body, or commission. Such representatives shall not include any individual who is the chief executive officer of such State or who is neither an employee or legal representative of such agency, body, or commission nor a person described in subsection (n). However, such return information shall not be disclosed to the extent that the Secretary determines that such disclosure would identify a confidential informant or seriously impair any civil or criminal tax investigation.

"(2) Disclosure to state audit agencies.--,

"(A) In general.-Any returns or return information obtained under paragraph (1) by any State agency,

body, or

commission may be open to inspection by, or disclosure

to,

officers and employees of the State audit agency for

the

purpose of, and only to the extent necessary in, making

an

audit of the State agency, body, or commission

referred to in

paragraph (1).

"(B) State audit agency.-For purposes of subparagraph (A), the term ' State audit agency' means any State

agency,

body, or commission which is charged under the laws of

the

State with the responsibility of auditing State

revenues and

programs.".

(b) Effective Date.-The amendment made by this section // 26 USC 6103 // shall take effect on the date of the enactment of this Act.

SEC. 4. TREATMENT OF BONNER'S FERRY RESTORIUM UNDER THE SUPPLEMENTARY SECURITY INCOME PROGRAM.

(a) Treatment as Non-Public Institution.-For purposes of title XVI of the Social Security Act, // 42 USC 1381. // the Boundary County Restorium (popularly known as the Bonner's Ferry Restorium) in Bonner's Ferry, Idaho, shall not be considered a public institution (within the meaning of section 1611(e)(1)(C) of such Act). // 42 USC 1382. //

(b) Effective Date.-Subsection (a) shall apply to supplemental security income benefits payable under title XVI of the Social Security Act for months beginning with November 1980.

SEC. 5. TREATMENT OF CERTAIN EXPENSES INCLUDIBLE IN THE INCOME OF THE RECIPIENT.

(a) In General.-Subsection (e) of section 274 of the Internal Revenue Code of 1954 // 26 USC 274. // (relating to specific exceptions to application of disallowance of certain entertainment, etc., expenses) is amended by inserting after paragraph (9) the following new paragraph:

"(10) Expenses includible in income of persons who are not employees.-Expenses paid or incurred by the taxpayer for goods, services, and facilities to the extent that the expenses are includible in the gross income of a recipient of the entertainment, amusement, or recreation who is not an employee of the taxpayer as compensation for services rendered or as a prize or award under section 74. The preceding sentence shall not apply to any amount paid or incurred by the taxpayer if such amount is required to be included (or would be so required except that the amount is less than $600) in any information return filed by such taxpayer under part III of subchapter A of chapter 61

// 26 USC 6031. //

and is not so included."

(b) Effective Date.-The amendment made by this section // 26 USC 274 // shall apply to any expenses paid or incurred after December 31, 1980, in taxable years ending after such date.

SEC. 6. PRESERVING EXISTING TAX STATUS OF WINE AND FLAVORS USED IN THE PRODUCTION OF DISTILLED SPIRITS.

(a) Allowance of Credit.-Subpart A of part I of subchapter A of chapter 51 of the Internal Revenue Code of 1954 (relating to distilled spirits) is amended by adding at the end thereof the following new section:

SEC. 5010. // 26 USC 5010. // CREDIT FOR WINE CONTENT AND FOR FLAVORS CONTENT.

"(a) Allowance of Credit.--,

"(1) Wine content.-On each proof gallon of the wine content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to the excess of--,

"(A) $10.50, over "(B) the rate of tax which would be imposed on the wine under section 5041(b) but for its removal to bonded

premises.

"(2) Flavors content.-On each proof gallon of the flavors content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to $10.50.

"(3) Fractional part of proof gallon.-In the case of any fractional part of a proof gallon of the wine content, or of the flavors content, of distilled spirits, a proportionate credit shall be allowed.

"(b) Time for Determining and Allowing Credit.--,

"(1) In general.-The credit allowable by subsection (a)--,

"(A) shall be determined at the same time the tax is determined under section 5006 (or 7652) on the distilled spirits containing the wine or flavors, and "(B) shall be allowable at the time the tax imposed by section 5001 (or 7652) on such distilled spirits is

payable as if

the credit allowable by this section constituted a

reduction in

the rate of tax.

"(2) Determination of content in the case of imports.-For purposes of this section, the wine content, and the flavors content, of imported distilled spirits shall be established by such chemical analysis, certification, or other methods as may be set forth in regulations prescribed by the Secretary.

"(c) Definitions.-For purposes of this section--,

"(1) Wine content.--,

"(A) In general.-The term 'wine content' means alcohol derived from wine. "(B) Wine.-The term 'wine'--, "(i) means wine on which tax would be imposed by paragraph (1), (2), or (3) of section 5041(b) but for

its

removal to bonded premises, and

"(ii) does not include any substance which has been subject to distillation at a distilled spirits plant

after

receipt in bond.

"(2) Flavors content.--,

"(A) In general.-Except as provided in subparagraph (B), the term 'flavors content' means alcohol derived

from

flavors of a type for which drawback is allowable under

section 5134.

"(B) Exceptions.-The term 'flavors content' does not include--, "(i) alcohol derived from flavors made at a distilled spirits plant, and "(ii) in the case of any distilled spirits product,

alcohol

derived from flavors to the extent such alcohol exceeds

(on a proof gallon basis) 2 percent of the finished

product."

(b) Clerical Amendment.-The table of sections for such subpart A of part I of subchapter A of chapter 51 of such Code is amended by adding at the end thereof the following new item:

" Sec. 5010. Credit for wine content and for flavors content."

(c) Effective Date.-The amendments made by subsections (a) and // 26 USC 5010 // (b) shall take effect on January 1, 1980.

(d) Transfers of Alcohol.-Section 5212 of the Internal Revenue Code of 1954 // 26 USC 5212. // (relating to the transfer of spirits in bond) is amended by adding at the end thereof the following new sentence: " The provisions of this section restricting transfers to bulk distilled spirits shall not apply to alcohol bottled under the provisions of section 5235 which is to be withdrawn for industrial purposes."

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 560 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 898 (Comm. on Finance).

CONGRESSIONAL RECORD:

Vol. 125 (1979): Nov. 27, considered and passed House.

Vol. 126 (1980): Oct. 1, considered and passed Senate, amended. Dec. 10, House agreed to Senate amendments with amendments. Dec. 12, Senate agreed to House amendments.

PUBLIC LAW 96-597, 94 STAT. 3477

96th CONGRESS, H.R. 8444 DECEMBER 24, 1980
An Act To authorize appropriations for certain insular areas of

the United States, and for

other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I-AMERICAN SAMOA

Sec. 101 // 48 USC 1662 // Notwithstanding any other provision of law and subject to valid existing rights, all right, title, and interest of the Government of the United States in personal property situated in American Samoa shall be transferred, without reimbursement, to the American Samoa government on October 1, 1981, unless the agency of the Government of the United States having administrative responsibility for the property advises the Secretary of the Interior in writing before the date of transfer that it has a continuing requirement for such property.

TITLE II-GUAM

Sec. 201. (a) Section 3 and section 5 of the Act entitled " An Act to provide for the rehabilitation of Guam, and for other purposes" (Public Law 88 - 170; 77 Stat. 302) are hereby repealed.

(b) The Act entitled " An Act to provide for the rehabilitation of Guam, and for other purposes" is amended by adding at the end thereof the following new section:

" Sec. 7. The government of Guam shall not be liable to the United States on and after the effective date of this section for repayment of any amount appropriated under this Act which was not repaid to the United States before such date.".

(c) This section shall take effect October 1, 1981.

TITLE III-NORTHERN MARIANA ISLANDS

Sec. 301. Within six months from the date of enactment of this Act, the Secretary of the Interior is directed to submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Interior and Insular Affairs of the House of Representatives a report on the existing dock and harbor facilities in the Northern Mariana Islands; the need, if any, for repair, improvement, or replacement of such facilities; the cost of such rehabilitation; and the amount of Federal assistance which would be necessary to achieve such rehabilitation.

Sec. 302. (a) Section 12 of the Act of August 9, 1950 (64 Stat. 434), // 16 USC 777k. // as amended, is further amended by deleting " Governor of American Samoa," and inserting in lieu thereof " Governor of American Samoa, the Governor of the Commonwealth of the Northern Mariana Islands,"; by deleting "to apportion to Puerto Rico, Guam, American Samoa," and inserting in lieu thereof "to apportion to Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands,"; by deleting " Samoa one-third of 1 per centum," and inserting in lieu thereof " Samoa one-third of 1 per centum, for the Commonwealth of the Northern Mariana Islands one-third of 1 per centum,"; and by deleting "expenditure in Puerto Rico, Guam," and inserting in lieu thereof "expenditure in Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands,".

(b) Section 8(a) of the Act of September 2, 1937 // 16 USC 669g-1. // as added August 18, 1941 (55 Stat. 632), as amended, is further amended by deleting " Governor of Guam," and inserting in lieu thereof " Governor of Guam, the Governor of the Commonwealth of the Northern Mariana Islands,"; by deleting "apportion to Puerto Rico, Guam," and inserting in lieu thereof "apportion to Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands,"; by deleting " Guam one-sixth of 1 per centum," and inserting in lieu thereof " Guam one-sixth of 1 per centum, for the Commonwealth of the Northern Mariana Islands one-sixth of 1 per centum,"; and by deleting "expenditure in Puerto Rico, Guam," and inserting in lieu thereof "expenditure in Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands,".

Sec. 303. (a) The Act of March 12, 1980 (Public Law 96 - 205; 94 Stat. 87) // 48 USC 1681 // is hereby amended as follows: In section 205(a) change "and before January 1, 1981." to "until, but not after, January 1, 1983.".

(b) The provisions of section 205(c) shall be suspended and shall be of no force or effect until January 1, 1983.

TITLE IV-TRUST TERRITORY OF THE PACIFIC ISLANDS

Sec. 401. Section 101 of the Act of March 12, 1980 (94 Stat. 84), // 48 USC 1681 // is amended by changing the commas after "program" and "system" to semicolons; by deleting the word "and" after "system"; and by inserting after " Ponape;" the following: "for expenditure by grant or contract for the installation, operation, and maintenance of communications systems which will provide internal and external communications;".

Sec. 402. // 48 USC 1681 // (a) Notwithstanding any other provision of law, subject to valid existing rights, and subject to subsection (b) of this section, all right, title, and interest of the Government of the United States in personal property situated in the Trust Territory of the Pacific Islands and of the government of the Trust Territory of the Pacific Islands in personal property wherever located shall be transferred, without reimbursement, by October 1, 1982, to the government of the Northern Mariana Islands, Palau, the Marshall Islands, or the Federated States of Micronesia according to a list of distribution established by the High Commissioner of the Trust Territory of the Pacific Islands in consultation with the recipient government.

(b) Personal property referred to in subsection (a) of this section shall be transferred upon declaration by the High Commissioner of the Trust Territory of the Pacific Islands that such property is surplus to the needs of the government of the Trust Territory of the Pacific Islands, which declaration shall be approved, if applicable, by the head of the agency of the Government of the United States having administrative responsibility for the property.

(c) If no government exists in Palau at the time of enactment of this section that is capable of receiving title to such property in its own name, the government of the Trust Territory of the Pacific Islands shall hold such property in trust for the prospective government of Palau until such government is established.

Sec. 403. Section 104 of the Act of March 12, 1980 // 48 USC 1695. // is amended as follows:

(a) strike "nor shall participation" and insert "and shall continue to be available to the extent said territory or its successor or successors are eligible to participate in such programs. Participation";

(b) change "governments be denied" to "governments shall not be denied"; and

(c) strike the period and insert "and shall continue at such levels as the Congress may provide in appropriation Acts.".

TITLE V-VIRGIN ISLANDS AND GUAM

Sec. 501. Section 5 of the Act of October 21, 1976 (Public Law 94 - 584; 90 Stat 2899) // 48 USC prec. 1391. // is amended by changing "sixty days after its submission" to "sixty legislative days (not interrupted by an adjournment sine die of the Congress) after its submission".

Sec. 502. Notwithstanding any other provision of law, with regard to parcels 2 and 22 (Estate Upper Bethlehem, Saint Croix, United States Virgin Islands) and parcels 2 A and 23 (Fredensborg and Upper Bethlehem, Saint Croix, United States Virgin Islands) and parcel 24 (Estate Body Slob and Upper Bethlehem, Saint Croix, United States Virgin Islands), the government of the Virgin Islands is hereby released from all obligation under the mortgage and note given by the government of the Virgin Islands when such parcels were conveyed to the government of the Virgin Islands by the Government of the United States.

TITLE VI-MISCELLANEOUS

Sec. 601. // 48 USC 1469d. // General Technical Assistance.-(a) The Secretary of the Interior is authorized to extend to the governments of American Samoa, Guam, the Northern Mariana Islands, the Virgin Islands, and the Trust Territory of the Pacific Islands, and their agencies and instrumentalities, with or without reimbursement, technical assistance on subjects within the responsibility of the respective territorial governments. Such assistance may be provided by the Secretary of the Interior through members of his staff, reimbursements to other departments or agencies of the Federal Government under the Economy Act (31 U.S.C. 686), grants to or cooperative agreements with such governments, agreements with Federal agencies or agencies of State or local governments, or the employment of private individuals, partnerships, or corporations. Technical assistance may include research, planning assistance, studies, and demonstration projects.

(b) The Secretary of the Interior is further authorized to provide technical assistance to, and maintenance of agricultural plantings and physical facilities for, the peoples from Enewetak Atoll and Bikini Atoll, as well as for the purchase of food and equipment and for the transportation of such food, equipment and persons as he deems necessary and appropriate until such areas produce sufficient food to fully sustain the residents after resettlement. This provision shall not cease to be applicable either before or after the termination of the trusteeship without the express approval of the United States Congress.

(c) The Secretary of Agriculture is authorized to extend, in his discretion, programs administered by the Department of Agriculture to Guam, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, the Virgin Islands, and American Samoa (hereinafter called the territories). Notwithstanding any other provision of law, the Secretary of Agriculture is authorized to waive or modify any statutory requirements relating to the provision of assistance under such programs when he deems it necessary in order to adapt the programs to the needs of the respective territory: Provided, That not less than sixty days prior to extending any program pursuant to this section or waiving or modifying any statutory requirement pursuant to this section, the Secretary of Agriculture shall notify the Committee on Agriculture and the Committee on Interior and Insular Affairs of the House of Representatives and the Committee on Energy and Natural Resources and the Committee on Agriculture, Nutrition, and Forestry of the Senate of his proposed action together with an explanation of why his action is necessary and the anticipated benefits to each territory affected. Such programs shall be carried out in cooperation with the respective governments of the territories and shall be covered by a memorandum of understanding between the respective territorial government and the Department of Agriculture. Any sums appropriated pursuant to this paragraph shall be allocated to the agencies of the Department of Agriculture concerned with the administration of programs in the territories.

(d) Effective October 1, 1981, there are authorized to be appropriated such sums as may be necessary to carry out the purposes of this section.

Sec. 602. // 48 USC 1681 // In the event that a political union is effected at a future time between the Territory of Guam and the Commonwealth of the Northern Mariana Islands, the Federal Government and each of its agencies is authorized and directed to assure that--,

(i) there will be no diminution of any rights or entitlements otherwise eligible to said territory and Commonwealth in effect on the effective date of such union,

(ii) there will be no adverse effect on any funds which have been or may hereafter be authorized or appropriated for said territory or Commonwealth, as of the effective date of such union, or

(iii) no action is taken that would in any manner discourage such unification.

Whenever any discrepancy exists or arises between the benefits available for either said territory or Commonwealth under any policies or programs authorized by law (including, but not limited to, any formulas for matching grants-in-aid or comparable programs or benefits), the most favorable terms available to either said territory or Commonwealth shall be deemed applicable to said unified area after the effective date of unification.

Sec. 603. Notwithstanding any other provision of law to the contrary, funds appropriated under the Emergency School Aid Act for fiscal year 1980 // 20 USC 1601 // which are available for use in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, the Trust Territory of the Pacific Islands, and the Virgin Islands shall be available in such areas for the purposes set forth in section 702 of the Emergency School Aid Act // 20 USC 1601 // as such section was in effect immediately before September 30, 1979.

Sec. 604. // 48 USC 1492. // (a) The Congress finds that--,

(1) the Caribbean and Pacific insular areas of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Federated States of Micronesia, the Marshall Islands, and Palau are virtually completely dependent on imported sources of energy;

(2) the dependence of such areas on imported sources of energy coupled with the increasing cost and the uncertain availability and supply of such sources of energy will continue to frustrate the political, social, and economic development of such areas by placing increasingly severe fiscal burdens on the local governments of these areas;

(3) these insular areas are endowed with a variety of renewable sources of energy which, if developed, would alleviate their dependence on imported sources of energy, relieve the fiscal burden on local governments imposed by the costs of imported fuel, and strengthen the base for political, social, and economic development;

(4) appropriate technologies are presently available to develop the renewable energy resources of these insular areas but that comprehensive energy plans have not been adequately developed to meet the energy demands of these areas from renewable energy resources.

(b) The Congress declares that it is the policy of the Federal Government to--,

(1) develop the renewable energy resources of the Caribbean and Pacific insular areas of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Federated States of Micronesia, the Marshall Islands, and Palau; and

(2) to assist other insular areas in the Caribbean and Pacific Basin in the development of their renewable energy resources.

(c) The Secretary of Energy or any administrative official who may succeed him shall prepare a comprehensive energy plan with emphasis on indigenous renewable sources of energy for Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Federated States of Micronesia, the Marshall Islands and Palau. The plan shall be prepared with the approval of the Secretary of the Interior and in cooperation with the chief executive officer of each insular area by--,

(1) surveying existing sources and uses of energy;

(2) estimating future energy needs to the year 2020, giving due consideration to a range of economic development possibilities;

(3) assessing, in depth, the availability and potential for development of indigenous energy sources, including solar, wind, hydropower, ocean current and tidal, biogas, biofuel, geothermal and ocean thermal energy conversion;

(4) assessing the mix of energy sources (including fossil fuels) and identifying those technologies that are needed to meet the projected demands for energy; and

(5) drafting long-term energy plans for such insular areas with the objective of minimizing their reliance on energy imports and making maximum use of their indigenous energy resources.

(d) The Secretary of Energy or any administrative official who may succeed him, with the approval of the Secretary of the Interior, as part of the comprehensive energy planning may demonstrate those indigenous renewable energy technologies which are determined to be most cost effective through the use of existing programs.

(e) Within two years from the date of enactment of this Act, the Secretary of Energy or any administrative official who may succeed him shall submit the comprehensive energy plan for each insular area to the Congress.

(f) There are hereby authorized to be appropriated such sums as may be necessary to carry out the purposes of this section.

Sec. 605. Effective October 1, 1981, section 22 of the Water Resources Development Act of 1974 (Public Law 93 - 251) // 42 USC 1962d-16. // is amended by adding at the end thereof the following:

"(c) For the purposes of this section, the term ' State' means the several States of the United States, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Commonwealth of the Northern Marianas, and the Trust Territory of the Pacific Islands.".

Sec. 606. (a) The Congress finds that--,

(1) the Trust Territory of the Pacific Islands is composed over two thousand islands scattered over three million square miles of the North Pacific Ocean with a total land area of only seven hundred square miles supporting approximately one hundred thousand persons;

(2) the health, safety, welfare, as well as the political, social, and economic development of the peoples of the Trust Territory of the Pacific Islands are totally dependent on the adequacy and regularity of inter-island transportation;

(3) the principal form of inter-island transportation, especially for the outer islands is and will continue to be surface transportation;

(4) at present inter-island surface transportation is completely dependent on uncertain supplies of increasingly expensive imported fuel;

(5) recent developments in sail-assisted technology offer the potential for alleviating the dependence of the peoples of the Trust Territory of the Pacific Islands on imported fuel for surface transportation, thereby improving the capability for regular supply schedules to the various islands, relieving the fiscal burden on local governments caused by the costs of imported fuel, and strengthening the base for political, social, and economic development of the peoples of the Trust Territory of the Pacific Islands.

(b) In order to ascertain the potential for sail-assisted technology for inter-island transportatin in the Trust Territory of the Pacific Islands, the Secretary of the Interior is directed to review the transportation needs of the Trust Territory of the Pacific Islands and submit a report to the Congress by October 1, 1981, on his findings and recommendations.

(c) In preparing his report, the Secretary of the Interior shall consider, but is not limited to, frequency of services, present and alternative routes, cargo delivery, operating costs, port and docking availability and adequacy, and the impact on energy costs of the use of a second generation of inter-island field trip vessels using sail-assisted technology. The report shall set forth a scientific analysis of the potential applications of sail-assisted technology as a means of reducing energy costs for inter-island transportion including, but not limited to, statistics on windspeed, direction, wave heights and currents; possible design configurations and specifications for sail-assisted vessels; cost estimates for construction, financing, and operation; and such other information as he deems appropriate to determine the feasibility of sail-assisted technology for inter-island transportation.

(d) The Secretary is directed to consult with appropriate representatives of the various local government units in the Trust Territory of the Pacific Islands as well as the Secretary of Transportation, the Secretary of Commerce, and the Secretary of Defense in preparing the report.

Sec. 607. // 48 USC 1641 // (a) In order to assist the governments of Guam and the Virgin Islands in eliminating general fund deficits, there is authorized to be appropriated to the Secretary of the Interior for payment to Guam not to exceed $15,000,000 for fiscal year 1982, and $11,000,000 for fiscal year 1983, $7,500,000 for fiscal year 1984, and $4,000,000 for fiscal year 1985; and for payment to the Virgin Islands not to exceed $12,000,000 for fiscal year 1982, $9,000,000 for fiscal year 1983, $6,000,000 for fiscal year 1984, and $3,000,000 for fiscal year 1985.

(b) The Governors of Guam and the Virgin Islands shall each submit a plan for approval to the Secretary of the Interior in consultation with the Secretary of the Treasury which is designed to eliminate the respective territory's general fund deficits by the beginning of fiscal year 1986. Such plan shall provide for--,

(1) implementation of an effective budgeting and accounting system;

(2) realistic revenue and expenditure projections which will progressively reduce current year general fund deficits and result in a balanced general fund budget no later than the

beginning of fiscal year 1986;

(3) financing of accumulated general fund deficits;

(4) quarterly goals and timetables for implementing the plan. The plan shall also indicate that the Governor has the necessary authority to implement the plan.

(c) Not more than thirty days after the close of each quarter which occurs after the plan required under subsection (a) of this section has been approved by the Secretary of the Interior in consultation with the Secretary of the Treasury and through the close of fiscal year 1985, the respective Governor shall submit a report to the Secretary of the Interior and the Secretary of the Treasury, certified by the respective government comptroller, describing in detail the success or failure of such territory in meeting the goals and timetables described in such plan.

(d) No payment shall be made under this title until the plan required under this section has been approved by the Secretary of the Interior in consultation with the Secretary of the Treasury. Before making any payment under this title after such plan has been approved, the Secretary shall determine whether the respective territory is meeting the goals and timetables prescribed in such plan. If the Secretary determines that such territory is not meeting such goals or timetables, he shall withhold payments otherwise due such territory until he determines that such goals and timetables are being met.

Sec. 608. Authority to enter into contracts, to incur obligatins, or to make payments under this Act shall be effective only to the extent or in such amounts as are provided in advance in appropriations Acts.

Approved December 24, 1980.

LEGISLATIVE HISTORY:

CONGRESSIONAL RECORD, Vol. 126 (1980):

Dec. 9, considered and passed House.

Dec. 12, considered and passed Senate.

PUBLIC LAW 96-596, 94 STAT. 3469

96th CONGRESS, H.R. 5391 DECEMBER 24, 1980
An Act To amend the Internal Revenue Code of 1954 with

respect to the determination of

second tier taxes, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. AMENDMENT of 1954 CODE.

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1954. // 26 USC 1 //

SEC. 2. DETERMINATION OF SECOND TIER TAXES.

(a) Date for Determining Amount of Second Tier Taxes.--,

(1) Substitution of taxable period for correction period--, The following provisions are each amended

// 26 USC 4941-4945, 4951, 4952, 4971, 4975. //

by striking out "correction period" and inserting in lieu thereof "taxable period":

(A) Section 4941(b)(1) (relating to additional taxes on

self--,

dealer).

(B) Section 4941(e)(2)(B) (defining amount involved). (C) Section 4942(b) (relating to additional tax on

failure to

distribute income).

(D) Section 4943(b) (relating to additional tax on

excess

business holdings).

(E) Section 4944(b)(1) (relating to additional taxes on investment which jeopardizes charitable purpose). (F) Section 4945(b)(1) (relating to additional taxes on

taxable

expenditures).

(G) Section 4951(b)(1) (relating to additional taxes on

self--,

dealer).

(H) Section 4951(e)(2)(B) (defining amount involved). (I) Section 4952(b)(1) (relating to additional taxes on

taxable

expenditures).

(J) Section 4971(b) (relating to additional tax on

failure to

meet minimum funding standards).

(K) Section 4975(b) (relating to additional taxes on

disqualified

persons).

(L) Section 4975(f)(4)(B) (defining amount involved).

(2) Definition of taxable period--,

(A) Paragraph (1) of section 4941(e) (defining taxable period) is amended to read as follows:

"(1) Taxable period.-The term 'taxable period' means, with respect to any act of self-dealing, the period beginning with the date on which the act of self-dealing occurs and ending on the earliest of--,

"(A) the date of mailing a notice of deficiency with

respect

to the tax imposed by subsection (a)(1) under

section 6212,

"(B) the date on which the tax imposed by subsection

(a)(1)

is assessed, or

"(C) the date on which correction of the act of

self-dealing

is completed."

(B) Paragraph (1) of section 4942(j)

// 26 USC 4942. //

is amended to read as

follows:

"(1) Taxable period.-The term 'taxable period' means, with respect to the undistributed income for any taxable year, the period beginning with the first day of the taxable year and ending on the earlier of--,

"(A) the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (a) under

section

6212, or

"(B) the date on which the tax imposed by subsection (a)

is

assessed."

(C) Paragraph (2) of section 4943(d)

// 26 USC 4943. //

is amended to read as

follows:

"(2) Taxable period.-The term 'taxable period' means, with respect to any excess business holdings of a private foundation in a business enterprise, the period beginning on the first day on which there are excess holdings and ending on the earlier of--,

"(A) the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (a) under

section

6212 in respect of such holdings, or

"(B) the date on which the tax imposed by subsection (a)

in

respect of such holdings is assessed."

(D) Paragraph (1) of section 4944(e)

// 26 USC 4944. //

is amended to read as

follows:

"(1) Taxable period.-The term 'taxable period' means, with respect to any investment which jeopardizes the carrying out of exempt purposes, the period beginning with the date on which the amount is so invested and ending on the earliest of--,

"(A) the date of mailing of a notice of deficiency with respect to the tax imposed by subsection (a)(1) under

section

6212,

"(B) the date on which the tax imposed by subsection

(a)(1)

is assessed, or

"(C) the date on which the amount so invested is removed from jeopardy." (E) Paragraph (2) of section 4945(i)

// 26 USC 4945. //

is amended to read as

follows:

"(2) Taxable period.-The term 'taxable period' means,with respect to any taxable expenditure, the period beginning with the date on which the taxable expenditure occurs and ending on the earlier of--,

"(A) the date of mailing a notice of deficiency with

respect

to the tax imposed by subsection (a)(1) under

section 6212, or

"(B) the date on which the tax imposed by subsection

(a)(1)

is assessed."

(F) Paragraph (1) of section 4951(e)

// 26 USC 4951. //

is amended to read as

follows:

"(1) Taxable period.-The term 'taxable period' means, with respect to any act of self-dealing, the period beginning with the date on which the act of self-dealing occurs and ending on the earliest of--,

"(A) the date of mailing a notice of deficiency with

respect

to the tax imposed by subsection (a)(1) under

section 6212,

"(B) the date on which the tax imposed by subsection

(a)(1)

is assessed, or

"(C) the date on which correction of the act of

self-dealing

is completed."

(G) Paragraph (2) of section 4952(e)

// 26 USC 4952. //

is amended to read as

follows:

"(2) Taxable period.-The term 'taxable period' means, with respect to any taxable expenditure, the period beginning with the date on which the taxable expenditure occurs and ending on the earlier of --,

"(A) the date of mailing a notice of deficiency with

respect

to the tax imposed by subsection (a)(1) under

section 6212, or

"(B) the date on which the tax imposed by subsection

(a)(1)

is assessed."

(H) Paragraph (3) of section 4971(c)

// 26 USC 4971. //

is amended to read as

follows:

"(3) Taxable period.-The term 'taxable period' means, with respect to an accumulated funding deficiency, the period beginning with the end of the plan year in which there is an accumulated funding deficiency and ending on the earlier of--,

"(A) the date of mailing of notice of deficiency with respect to the tax imposed by subsection (a), or "(B) the date on which the tax imposed by subsection (a)

is

assessed."

(I) Paragraph (2) of section 4975(f)

// 26 USC 4975. //

is amended to read as

follows:

"(2) Taxable period.-The term 'taxable period' means, with respect to any prohibited transaction, the period beginning with the date on which the prohibited transaction occurs and ending on the earliest of--,

"(A) the date of mailing a notice of deficiency with

respect

to the tax imposed by subsection (a) under section 6212,

"(B) the date on which the tax imposed by subsection (a)

is

assessed, or

"(C)d the date on which correction of the prohibited

transaction

is completed."

(3) Technical amendments.--,

(A) Subsection (e) of section 4941

// 26 USC 4941. //

is amended by striking

out paragraph (4).

(B) Subsection (j) of section 4942

// 26 USC 4942. //

is amended--,

(i) by striking out paragraph (2), (ii) by striking out "paragraph (5)" in paragraph (3)(B)(i) and inserting in lieu thereof

"paragraph (4)",

(iii) by redesignating paragraph (4) as paragraph (2), and (iv) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively. (C) Subsection (d) of section 4943

// 26 USC 4943. //

is amended by striking

out paragraph (3) and by redesignating paragraph (4) as

paragraph (3).

(D) Subsection (e) of section 4944

// 26 USC 4944. //

is amended by striking

out paragraph (3).

(E) Subsection (e) of section 4951

// 26 USC 4951. //

is amended by striking

out paragraph (4) and by redesignating paragraph (5) as

paragraph (4).

(F) Subsection (f) of section 4975

// 26 USC 4975. //

is amended by striking out

paragraph (6).

(4) Clerical amendments.--,

(A) Clause (ii) of section 4942(g)(2)(C)

// 26 USC 4942. //

is amended by striking

out "the initial correction period provided in

subsection

(j)(2)" and inserting in lieu thereof "the correction

period (as

defined in section 4962(e))".

(B) Subparagraph (A) of section 4943(d)(3)

// 26 USC 4943. //

(as redesignated

by paragraph (3)(c)) is amended by striking

out "4942(j)(5)"

and inserting in lieu thereof "4942(j)(4)".

(C) Subsection (e) of section 6213

// 26 USC 6213. //

(relating to suspension of

filing period for certain excise taxes) is amended by

striking

out "section 4941(e)(4)" and all that follows through

the end

of such subsection and inserting in lieu thereof

"section

4962(e)."

(D) Subsection (g) of section 6503

// 26 USC 6503. //

(relating to suspension

of running of period of limitation pending correction)

is

amended by striking out "section 4941(e)(4)" and all

that

follows through the end of such subsection and

inserting in

lieu thereof "section 4962(e)."

(E) Section 6503 is amended by redesignating subsection

(j)

as subsection (i).

(F) The amendments made by sections 1203(h)(1) and 1601(f)( 2) of the Tax Reform Act of 1976,

// 26 USC 6503 //

and the amendment

made by section 362(d)(5) of the Revenue Act of 1978,

// 26 USC 6503. //

shall be

deemed to be amendments to section 6503(i) of the

Internal

Revenue Code of 1954 (as redesignated by subparagraph

(E)).

(b) Tax Court To Determine Whether Taxable Event Has Been Corrected.-Subsection (c) of section 6214 // 26 USC 6214. // (relating to determinations by Tax Court) is amended by adding at the end thereof the following new sentence: " The Tax Court, in redetermining a deficiency of any second tier tax (as defined in section 4962(b)), shall make a determination with respect to whether the taxable event has been corrected."

(c) Abatement of Tax Where There is Correction During Correction Period.--,

(1) In general.-Chapter 42 is amended by adding at the end thereof the following new subchapter:

" Subchapter C-Abatement of Second Tier Taxes Where

There Is

Correction During Correction Period

" Sec. 4961. Abatement of second tier taxes where there is correction.

Sec. 4962. Definitions.

" SEC. 4961. // 26 USC 4961. // ABATEMENENT OF SECOND TIER TAXES WHERE THERE IS CORRECTION.

"(a) General Rule.-If any taxable event is corrected during the correction period for such event, then any second tier tax imposed with respect to such event (including interest additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.

"(b) Supplemental Proceeding.-If the determination by a court that the taxpayer is liable for a second tier tax has become final, such court shall have jurisdiction to conduct any necessary supplemental proceeding to determine whether the taxable event was corrected during the correction period. Such a supplemental proceeding may be begun only during the period which ends on the 90th day after the last day of the correction period. Where such a supplemental proceeding has begun, the reference in the second sentence of section 6213(a) to a final decision of the Tax Court shall be treated as including a final decision in such supplemental proceeding.

"(c) Suspension of Period of Collection for Second Tier Tax.--,

"(1) Proceeding in district court or court of claims.-If, not later than 90 days after the day on which the second tier tax is assessed, the first tier tax is paid in full and a claim for refund of the amount so paid is filed, no levy or proceeding in court for the collection of the second tier tax shall be made, bgun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2) (and of any supplemental proceeding with respect thereto under subsection (b)). Notwithstanding section 7421(a), the collection by levy or proceeding may be enjoined during the time such prohibition is in force by a proceeding in the proper court.

"(2) Suit must be brought to determine liability.-If, within 90 days after the day on which his claim for refund is denied, the person against whom the second tier tax was assessed fails to begin a proceeding described in section 7422 for the determination of his liability for such tax, paragraph (1) shall cease to apply with respect to such tax, effective on the day following the close of the 90-day period referred to in this paragraph.

"(3) Suspension of running of period of limitations on collection.-The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court with respect to any second tier tax described in paragraph

(1) shall be suspended for the period during which the Secretary

is prohibited from collecting by levy or a proceeding in court.

"(4) Jeopardy collection.-If the Secretary makes a finding that the collection of the second tier tax is in jeopardy, nothing in this subsection shall prevent the immediate collection of such tax.

" SEC.4962. // 26 USC 4962. // DEFINITIONS.

"(a) First Tier Tax.-For purposes of this subchapter, the term 'first tier tax' means any tax imposed by subsection(a) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4971, or 4975.

"(b) Second Tier Tax.-For purposes of this subchapter, the term 'second tier tax' means any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4971, or 4975.

"(c) Taxable Event-For purposes of this subchapter, the term

'taxable event' means any act (or failure to act) giving rise to liability for tax under section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4971, or 4975.

"(d) Correct.-For purposes of this subchapter--,

"(1) In general.-Except as provided in paragraph (2), the term 'correct' has the same meaning as when used in the section which imposes the second tier tax.

"(2) Special rules.-The term 'correct' means--,

"(A) in the case of the second tier tax imposed by

section

4942(b), reducing the amount of the undistributed

income to

zero,

"(B) in the case of the second tier tax imposed by

section

4943(b), reducing the amount of the excess business

holdings

to zero, and

"(C) in the case of the second tier tax imposed by

section

4944, removing the investment from jeopardy.

"(e) Correction Period.-For purposes of this subchapter--,

"(1) In general.-The term 'correction period' means, with respect to any taxable event, the period beginning on the date on which such event occurs and ending 90 days after the date of mailing under section 6212 of a notice of deficiency with respect to the second tier tax imposed on such taxable event, extended by--,

"(A) any period in which a deficiency cannot be assessed under section 6213(a) (determined without regard to the

last

sentence of section 4961(b)), and

"(B) any other period which the Secretary determines is reasonable and necessary to bring about correction of

the

taxable event.

"(2) Special rules for when taxable event occurs.-For purposes of paragraph (1), the taxable event shall be treated as occurring--,

"(A) in the case of section 4942, on the first day of the taxable year for which there was a failure to distribute income, "(B) in the case of section 4943, on the first day on

which

there are excess businessholdings,

"(C) in the case of section 4971, on the last day of the

plan

year in which there is an accumulated funding

deficiency,

and

"(D) in any other case, the date on which such event occurred."

(2) Civil actions for refunds.-Paragraph (1) of section 7422( g)

// 26 USC 7422. //

(relating to special rules for certain excise taxes imposed by chapter 42 or 43)

// 26 USC 4940 //

is amended to read as follows:

"(1) Right to bring actions.--,

"(A) In general.-With respect to any taxable event, payment of the full amount of the first tier tax shall constitute sufficient payment in order to maintain an

action

under this section with respect to the second tier tax.

"(B) Definitions.-For purposes of subparagraph (A),

the

terms 'taxable event', 'first tier tax', and second

tier tax'

have the respective meanings given to such terms by

section

4962."

(3) Clerical amendment.-The table of subchapters for chapter 42 is amended by adding at the end thereof the following new item:

" Subchapter C. Abatement of second tier taxes where

there is correction

during correction period."

(d) Effective Dates.--,

(1) First tier taxes.-The amendments made by this section

// 26 USC 4961 //

with respect to any first tier tax shall take effect as if included in the Internal Revenue Code of 1954 when such tax was first imposed.

(2) Second tier taxes.-The amendments made by this section with respect to any second tier tax shall apply only with respect to taxes assessed after the date of the enactment of this Act. Nothing in the preceding sentence shall be construed to permit the assessment of a tax in a case to which, on the date of the enactment of this Act, the doctrine of res judicata applies.

(3) First and second tier tax.-For purposes of this subsection, the terms "first tier tax" and "second tier tax" have the respective meanings given to such terms by section 4962 of the Internal Revenue Code of 1954.

// 26 USC 4962. //

SEC. 3. TREATMENT OF CERTAIN CHARITABLE TRUSTS FOR PURPOSES OF THE MINIMUM TAX.

(a) General Rule.-Subparagraph (C) of section 57(b)(2) // 26 USC 57. // (relating to treatment of certain charitable contributions of trusts for purposes of the minimum tax) is amended by redesignating clauses (iv) and (v) as clauses (v) and (vi), respectively, and by inserting after clauses (iii) the following new clause:

"(iv) deductions allowable to a trust--,

"(I) all the income interests in which are devoted to one or more of the purposes described in section 170(c) (determined without regard to section 170(c)(2)(A)), "(II) all of the interests (other than income interests) in which are held by a corporation, and "(III) the grantor of which is a corporation."

(b) Effective Date.-The amendments made by subsection (a) // 26 USC 57 // shall apply to taxable years beginning after December 31, 1975.

SEC. 4. EXCISE TAXES ON TIRES.

(a) Reductions in Rate of Tax.--,

(1) In general.--,

(A) Section 4071(a)(1)

// 26 USC 4071. //

is amended by striking out "10 cents"

and inserting "9.75 cents".

(B) Section 4071(a)(2) is amended by striking out "5

cents"

and inserting "4.875 cents".

(C) Section 4071(d)(1) is amended by striking out "5

cents"

and inserting "4.875 cents".

(2) Effective Date.-The amendments made by this subsection

// 26 USC 4071 //

shall apply on and after January 1, 1981.

(b) Determination of Overpayment.--, // 26 USC 4071 //

(1) In general.-The determination of the extent to which any overpayment of tax imposed by section 4071(a)(1) or (2) or section 4071(b) has arisen by reason of an adjustment of a tire after the original sale pursuant to a warranty or guarantee, and the

allowance of a credit or refund of any such overpayment, shall be

determined in accordance with the principles set forth in regulations and rulings relating thereto to the extent in effect on March 31, 1978.

(2) Effective date.-This subsection shall apply to the adjustment of any tire after March 31, 1978 and prior to January 1, 1983.

(c) Tires and Inner Tubes.--,

(1) In general.-Paragraph (1) of section 6416(b)

// 26 USC 4061 //

(relating to price readjustments) is amended to read as follows:

"(1) Price readjustments.--,

"(A) In general.-Except as provided in subparagraph

(B)

or (C), if the price of any article in respect of

which a tax,

based on such price, is imposed by chapter 32,

// 26 USC 4061 //

is readjusted

by reason of the return or repossession of the article

or a

covering or container, or by a bona fide discount,

rebate, or

allowance, including a readjustment for local

advertising

(but only to the extent provided in section 4216(e) (2)

and (3)),

the part of the tax proportionate to the part of the

price

repaid or credited to the purchaser shall be deemed to

be an

overpayment.

"(B) Further manufacture.-Subparagraph (A) shall not apply in the case of an article in respect of which tax

was

computed under section 4223(b)(2); but if the price for

which

such article was sold is readjusted by reson of the

return or

repossession of the article, the part of the tax

proportionate

to the part of such price repaid or credited to the

purchaser

shall be deemed to be an overpayment.

"(C) Adjustment of tire price.-No credit or refund of any tax imposed by section 4071(a)(1) or (2) or section

4071(b)

shall be allowed or made by reason of an adjustment of

a tire

pursuant to a warranty or guarantee."

(2) Effective date.-The amendments made by this subsection

// 26 USC 6416 //

shall apply to the adjustments of any tire after December 31, 1982.

SEC. 5. TAX TREATMENT OF PROCEEDS HELD IN TRUST FOR KLAMATH INDIAN TRIBE.

(a) In General.-The first section of the Act // 25 USC 564j // entitled " An Act to exclude from gross income gains from the condemnation of certain forest lands held in trust for the Klamath Indian Tribe", approved August 9, 1975, is amended by striking out "gain resulting from" and inserting in lieu thereof "all amounts realized by the trust from".

(b) Effective Date.-The amendment made by subsection (a) // 25 USC 564j // shall apply to all amounts whether received before, on, or after the date of the enactment of this Act.

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No.96 - 912 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1034 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

May 20, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to Senate amendments with amendments; Senate agreed to House amendments.

PUBLIC LAW 96-595, 94 STAT. 3464

96 TH CONGRESS, H.R. 4968 DECEMBER 24, 1980
An Act To amend the Internal Revenue Code of 1954 with

respect to net operating loss

carryovers of taxpayers who cease to be real estate

investment trusts, to increase

interest rates on certain United States retirement

bonds, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. NET OPERATING LOSS CARRYOVER FOR CERTAIN REITS.

(a) In General.-Subparagraph (E) of section 172(b)(1) of the Internal Revenue Code of 1954 // 26 USC 172. // (relating to net operating loss deduction) is amended to read as follows:

"(E)(i) A net operating loss for a REIT year--,

"(I) shall not be a net operating loss carryback to any taxable year preceding the taxable year of such loss,

and

"(II) shall be a net operating loss carryover to each of the 8 taxable years following the taxable year of such loss.

"(ii) In the case of any net operating loss for a taxable year which is not a REIT year--,

"(I) such loss shall not be carried back to any taxable year which is a REIT year, and "(II) the number of taxable years to which such loss may be a net operating loss carryover under subparagraph (B) shall be increased (to a number not greater than 8) by the number of taxable years to which such loss may not be a net operating loss carryback by reason of subclause (I).

"(iii) For purposes of this subparagraph, the term ' REIT year' means any taxable year for which the provisions of part II of subchapter M (relating to real estate investment trusts) apply to the taxpayer.".

(b) Effective Date.-The amendment made by subsection (a) // 26 USC 172 // shall apply to the determination of the net operating loss deduction for taxable years ending after October 4, 1976. For purposes of applying the preceding sentence to any net operating loss for a taxable year which is not a REIT year and which ends on or before October 4, 1976, subclause (II) of section 172(b)(1)(E)(ii) of the Internal Revenue Code of 1954 // 26 USC 172. // shall be applied by substituting "the number of REIT years to which such loss was a net operating loss carryback" for "the number of taxable years to which such loss may not be a net operating loss carryback by reason of subclause (I)". In the case of a net operating loss for a taxable year described in the preceding sentence, subclause (II) of section 172(b)( 1)(E)(ii) of such Code shall not apply to any taxpayer which acted so as to cause it to cease to qualify as a "real estate investment trust" within the meaning of section 856 of such Code // 26 USC 856. // if the principal purpose for such action was to secure the benefit of the allowance of a net operating loss carryover under section 172(b)(1)(B) of such Code.

SEC. 2. INCREASES IN INTEREST RATES PAYABLE ON UNITED STATES RETIREMENT PLAN AND INDIVIDUAL RETIREMENT BONDS.

(a) In General.-The first section of the Second Liberty Bond Act (31 U.S.C. 752) is amended by adding at the end thereof the following new paragraph:

" The Secretary of the Treasury, with the approval of the President, may provide by regulations that the investment yield on any offerings of bonds issued under this Act which are described in section 405(b) or 409(a) of the Internal Revenue Code of 1954 // 26 USC 405, 409. // (relating to retirement plan bonds and individual retirement bonds, respectively) be increased for the interest accrual periods specified in such regulations so that the investment yield on such bonds for such periods is consistent with the investment yield on new offerings of such bonds.".

(b) Effective Date.-The amendment made by subsection (a) // 31 USC 752 // shall apply with respect to the investment yield on bonds issued before, on, or after the date of the enactment of this Act, but only for purposes of increasing the investment yield on such bonds for interest accrual periods beginning after the date of enactment of this Act.

SEC. 3. GENERAL STOCK OWNERSHIP CORPORATIONS.

(a) In General.-Subchapter U of the Internal Revenue Code of 1954 // 26 USC 1391. // (relating to general stock ownership corporations) is amended--,

(1) by inserting "or the estate of a deceased shareholder" after " State" in section 1391(a)(4)(D)(ii);

(2) by striking out " Individuals" in the caption of section 1391(c) and inserting in lieu thereof " Individual";

(3) by striking out "1393" in section 1392(a) and inserting in lieu thereof "1396(b)";

(4) by striking out "and all succeeding years" in section 1392(b)(1);

(5) by striking out "section, the term 'taxable income''' in section 1393(a)(2) and inserting in lieu thereof "subchapter, the taxable income";

(6) by striking out "a GSOC" in sections 1393(a)(2), 1393(b)( 3), 1394(c), and 1396(b) and inserting in lieu thereof "an electing GSOC";

(7) by striking out " GSOC's" in the heading for section 1394 and inserting in lieu thereof " GSOC";

(8) by striking out "the GSOC" in sections 1393(b)(3) and 1394(d) and inserting in lieu thereof "an electing GSOC";

(9) by striking out " A GSOC" in section 1396(a) and inserting in lieu thereof " An electing GSOC";

(10) by adding at the end of section 1396(b) the following: " Such tax shall be deductible as an ordinary and necessary expense of the corporation under section 162."; and

(11) by amending the table of sections for such subchapter to read as follows:

" Subchapter U-General Stock Ownership Corporations

" Sec. 1391 Definitions.

" Sec. 1392. Election by GSOC.

" Sec. 1393. GSOC taxable income taxed to shareholders.

" Sec. 1394. Rules applicable to distributions of an electing GSOC.

" Sec. 1395. Adjustment to basis of stock of shareholders.

" Sec. 1396. Minimum distributions.

" Sec. 1397. Special rules applicable to an electing GSOC.".

(b) Conforming Amendment.-The last sentence of section 6039 B of such Code // 26 USC 6039 B. // (relating to return of general stock ownership corporations) is amended by inserting "electing" after " Every".

(c) Effective Date.-The amendments made by this section // USC 1391 // shall apply with respect to corporations chartered after December 31, 1978, and before January 1, 1984.

SEC. 4. CHARITABLE SERVICES PERFORMED ABROAD.

(a) In General.-Subsection (a) of section 911 of the Internal Revenue Code of 1954 // 26 USC 911. // (relating to income earned by individuals in certain camps) is amended by inserting "or who performs qualified charitable services in a lesser developed country," after "hardship area,".

(b) Dollar Limitations.--,

(1) In General.-Subparagraph (A) of subsection (c)(1) of such section 911 of such Code is amended to read as follows:

"(A) Dollar limitations.--, "(i) Camp residents.-In the case of an individual who resides in a camp located in a hardship area, the amount excluded from the gross income of the individual under subsection (a) for any taxable year shall not exceed an amount which shall be computed on a daily basis at an annual rate of $20,000 for days during which he resides in a camp. "(ii) Employees of charitable organizations.-If any individual performs qualified charitable services in a lesser developed country during any taxable year, the amount of the earned income attributable to such

services

excluded from the gross income of the individual

under subsection (a) for the taxable year shall not

exceed an amount which shall be computed on a daily

basis at an annual rate of $20,000.

"(iii) Special rule.-If any individual performs qualified charitable services in a lesser developed country and performs other services while residing in a camp located in a hardship area during any taxable year, the amount of the earned income attributable to such other services excluded from the gross income of the individual under subsection (a) for the taxable year

shall

not (after the application of clause (i) with respect to

such earned income) exceed $20,000 reduced by the

amount of the earned income attributable to qualified

charitable services excluded from gross income under

subsection (a) for the taxable year.".

(2) Definitions.-Subsection (c)(1) of such section 911 of such Code is amended by adding at the end thereof the following:

"(D) Qualified charitable services.-For purposes of this subsection, the term 'qualified charitable

services'

means services performed by an employee for an employer

which--,

"(i) meets the requirements of section 501(c)(3), and "(ii) is not a private foundation (within the meaning of section 509(a)). "(E) Lesser developed country.-The term 'lesser

developed

country' means any foreign country other than--,

"(i) a country listed in the first sentence of section 502( b) of the Trade Act of 1974 (19 U.S.C. 2462), or "(ii) a country designated by the President as not being a lesser developed country.".

(c) Technical Amendments.--,

(1) The heading for such section 911 of such Code

// 26 USC 911. //

is amended by inserting " OR FROM CHARITABLE SERVICES" after " CAMPS".

(2) The item relating to section 911 in the table of sections for subpart B of part III of subchapter N of chapter 1 of such Code is amended by inserting "or from charitable services" after "camps".

(d) Effective Date.-The amendments made by this section // 26 USC 911 // shall apply to taxable years beginning after December 31, 1978.

SEC. 5. ARBITRAGE REQUIREMENTS FOR MORTGAGE SUBSIDY BONDS.

(a) General Rule.-Paragraph (4) of section 103 A(i) of the Internal Revenue Code of 1954 // 26 USC 103 A. // (relating to requirements related to arbitrage) is amended by adding at the end thereof the following new subparagraphs:

"(C) Reduction where issuer does not use full 1 percentage point under paragraph (2).--,

"(i) In general.-The amount required to be paid or credited to mortgagors under subparagraph (A)

(determined

under this paragraph without regard to this

subparagraph) shall be reduced by the unused paragraph

(2) amount.

"(ii) Unused paragraph (2) amount.-For purposes of clause (i), the unused paragraph (2) amount is the amount which (if it were treated as an interest payment made by mortgagors) would result in the excess referred to in paragraph (2)(A) being equal to 1 percentage

point.

Such amount shall be fixed and determined as of the

yield determination date.

"(D) Election to pay united states.-Subparagraph (A) shall be satisfied with respect to any issue if the issuer elects before issuing the obligations to pay over to the United States--,

"(i) not less frequently than once each 5 years after the date of issue, an amount equal to 90 percent of the aggregate amount which would be required to be paid or credited to mortgagors under subparagraph (A) (and not theretofore paid to the United States), and "(ii) not later than 30 days after the redemption of the last obligation, 100 percent of such aggregate amount not theretofore paid to the United States.

"(E) Simplified accounting.-The Secretary shall permit any simplified system of accounting for purposes of this paragraph which the issuer establishes to the satisfaction of the Secretary will assure that the purposes of this paragraph are carried out.".

(b) Technical Amendment.-Paragraph (8) of section 103 A(1) of such Code is amended by inserting "or paid to the United States" after "credited to mortgagors".

(c) Effective Date.-The amendments made by this section // 26 USC 103 A // shall take effect as if included in the amendments made by section 1102 of the Mortgage Subsidy Bond Tax Act of 1980.

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1045 (Comm. on Ways and Means).

SENATE REPORT No. 96 - 1037 (Comm. on Finance).

CONGRESSIONAL RECORD, Vol. 126 (1980):

June 17, considered and failed of passage.

Nov. 17, considered and passed House.

Dec. 13, considered and passed Senate, amended; House agreed to Senate amendments.

PUBLIC LAW 96-594, 94 STAT. 3453, VESSEL DOCUMENTAION ACT

96th CONGRESS, H.R. 1196 DECEMBER 24, 1980
An Act To revise and improve the laws relating to the

documentation of vessels, and for

other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I

SEC. 101. SHORT TITLE.

This title // 46 USC 65 // may be cited as the " Vessel Documentation Act".

SEC. 102. // 46 USC 65. // DEFINITIONS.

As used in this title--,

(1) "documented vessel" means a vessel for which a certificate of documentation has been issued under this title;

(2) "fisheries" includes the planting, cultivation, catching, taking, or harvesting of fish, shellfish, marine animals, pearls, shells, or marine vegetation at any place within the fishery conservation zone established by section 101 of the Fishery Conservation and Management Act of 1976 (16 U.S.C. 1811); and

(3) " Secretary" means the Secretary of the department in which the Coast Guard is operating.

SEC. 103. // 46 USC 65a. // PORTS OF DOCUMENTATION.

The Secretary shall designate ports of documentation in the United States where vessels may be documented and instruments affecting title to, or interest in, documented vessels may be recorded. The Secretary shall specify the geographic area to be served by each designated port, and he may discontinue, relocate, or designate additional ports of documentation.

SEC. 104. // 46 USC 65b. // VESSELS ELIGIBLE FOR DOCUMENTATION.

Any vessel of at least five net tons that is not registered under the laws of a foreign country is eligible for documentation if it is owned by--,

(1) an individual who is a citizen of the United States;

(2) a partnership or association whose members are all citizens of the United States;

(3) a corporation created under the laws of the United States, or any State, territory, or possession thereof, or of the District of Columbia, or the Commonwealth of Puerto Rico; whose president or other chief executive officer and chairman of its board of directors are citizens of the United States and no more of its directors are noncitizens than a minority of the number necessary to constitute a quorum;

(4) the United States Government; or

(5) the government of any State, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.

SEC. 105. // 46 USC 65c. // HOME PORTS.

(a) With the approval of the Secretary and subject to such regulations as he may prescribe, the port of documentation selected by an owner for the documentation of his vessel shall be the vessel's home port.

(b) Once a vessel's home port has been fixed as provided in subsection (a), it may not be changed without the approval of the Secretary, subject to such regulations as he may prescribe.

SEC. 106. // 46 USC 65d. // NAME OF VESSEL.

(a) At the time of application for initial documentation of a vessel, the owner shall provide a name for the vessel. Subject to the approval of the Secretary and upon the issuance of a certificate of documentation, that name shall become the vessel's name of record.

(b) Once a vessel's name of record has been fixed as provided in subsection (a), it shall not be changed without the approval of the Secretary, subject to such regulations as he may prescribe.

(c) The Secretary may prescribe a reasonable fee for changing a documented vessel's name of record.

SEC. 107. // 46 USC 65e. // CERTIFICATE OF DOCUMENTATION: APPLICATION; ISSUANCE; FORM; EXHIBITION.

(a) Upon application by the owner of any vessel eligible for documentation, the Secretary shall issue a certificate of documentation of a type specified in section 110, 111, 112, 113, or 114 of this title.

(b) The Secretary may prescribe the form of, the manner of filing, and the information to be contained in, applications for certificates of documentation.

(c) Each certificate of documentation shall--,

(1) contain the name, the home port, and a description of the vessel for which it is issued;

(2) identify its owner; and

(3) be in the form and contain any additional information prescribed by the Secretary.

(d) The Secretary shall, by regulation, prescribe procedures to insure the integrity of, and the accuracy of information contained in, certificates of documentation issued under this title.

(e) The owner and the master of each documented vessel shall make the vessel's certificate of documentation available for examination as the law may require or as the Secretary may prescribe.

SEC. 108. // 46 USC 65f. // NUMBERS; SIGNAL LETTERS; IDENTIFICATION MARKINGS.

(a) The Secretary shall maintain a numbering system for the identification of documented vessels and shall assign a number to each documented vessel.

(b) The Secretary may maintain a system of signal letters for documented vessels.

(c) The owner of each documented vessel shall affix to the vessel and maintain in the manner prescribed by the Secretary the number assigned under subsection (a) and any other identification markings the Secretary may prescribe.

SEC. 109. // 46 USC 65g. // PURPOSE OF DOCUMENTATION.

A certificate of documentation issued under this title is--,

(1) conclusive evidence of nationality for international purposes, but not in any proceeding conducted under the laws of the United STATES;

(2) except in the case of a pleasure vessel license, conclusive evidence of qualification to be employed in a specified trade; and

(3) not conclusive evidence of ownership in any proceeding in which ownership is in issue.

SEC. 110. // 46 USC 65h. // CERTIFICATE OF DOCUMENTATION; REGISTRY.

(a) A registry may be issued for any vessel that is eligible for documentation.

(b) A vessel for which a registry is issued may be employed in foreign trade or trade with Guam, American Samoa, Wake, Midway, or Kingman Reef.

(c) Upon application of the owner of any vessel that qualifies for a coastwise license under section 111 of this title, a Great Lakes license under section 112 of this title, or a fishery license under section 113 of this title, the Secretary may issue a registry appropriately endorsed authorizing the vessel to be employed in the coastwise trade, the Great Lakes trade, or the fisheries, as the case may be.

(d) Except as provided in sections 111, 112, and 113 of this title, a foreign built vessel registered pursuant to this section may not engage in the coastwise trade, the Great Lakes trade, or the fisheries.

SEC. 111. // 46 USC 65i. // CERTIFICATE OF DOCUMENTATION: COASTWISE LICENSE.

(a) A coastwise license or, as provided in section 110(c) of this title, an appropriately endorsed registry, may be issued for any vessel that--,

(1) is eligible for documentation;

(2) was built in the United States (or in the case of a vessel not built in the United States, has been captured in war by citizens of the United States and lawfully condemned as prize, has been adjudged to be forfeited for a breach of the laws of the United States, or has qualified for documentation under section 4136 of the Revised Statutes of the United States, as amended (46 U.S.C. 14)); and

(3) otherwise qualifies under laws of the United States to be employed in the coastwise trade.

(b) Only a vessel for which a coastwise license or an appropriately endorsed registry is issued may, subject to the laws of the United States regulating those trades, be employed in--,

(1) the coastwise trade; and

(2) the fisheries.

SEC. 112. // 46 USC 65j. // CERTIFICATE OF DOCUMENTATION: GREAT LAKES LICENSE.

(a) A Great Lakes license, or, as provided in section 110(c) of this title, an appropriately endorsed registry, may be issued for any vessel that--,

(1) is eligible for documentation;

(2) was built in the United States (or in the case of a vessel not built in the United States, has been captured in war by citizens of the United States and lawfully condemned as prize, has been adjudged to be forfeited for a breach of the laws of the United States, or has qualified for documentation under section 4136 of the Revised Statutes of the United States, as amended (46 U.S.C. 14)); and

(3) otherwise qualifies under the laws of the United States to be employed in the coastwise trade.

(b) Only a vessel for which a Great Lakes license or an appropriately endorsed registry is issued may, on the Great Lakes and their tributary and connecting waters and subject to the laws of the United States regulating those trades, be employed in--,

(1) the coastwise trade;

(2) trade with Canada; and

(3) the fisheries.

SEC. 113. // 46 USC 65k. // CERTIFICATE OF DOCUMENTATION: FISHERY LICENSE.

(a) A fishery license, or, as provided in section 110(c) of this title, an appropriately endorsed registry, may be issued for any vessel that--,

(1) is eligible for documentation;

(2) was built in the United States (or in the case of a vessel not built in the United States, has been captured in war by citizens of the United States and lawfully condemned as prize, has been adjudged to be forfeited for a breach of the laws of the United States, or has qualified for documentation under section 4136 of the Revised Statutes of the United States, as amended (46 U.S.C. 14)); and

(3) otherwise qualifies under the laws of the United States to be employed in the fisheries.

(b) Subject to the laws of the United States regulating the fisheries, only a vessel for which a fishery license or an appropriately endorsed registry is issued may be employed in the trade.

SEC. 114. // 46 USC 65l. // CERTIFICATE OF DOCUMENTATION: PLEASURE VESSEL LICENSE.

(a) A pleasure vessel license may be issued for any vessel that--,

(1) is eligible for documentation, and

(2) is to be used exclusively for pleasure.

(b) A licensed pleasure vessel may proceed from or to any port of the United States and to any foreign port without entering or clearing with the United States Customs Service.

(c) Notwithstanding any other law, the Secretary may prescribe reasonable fees for issuing, renewing, or replacing a pleasure vessel license; or for providing any other service in connection with a pleasure vessel license. The fees shall be based on the costs of the service provided.

SEC. 115. // 46 USC 65m. // VESSEL LIMITED TO TRADE COVERED BY CERTIFICATE OF DOCUMENTATION; EXEMPTIONS; PENALTY.

(a) A vessel may not be employed in any trade other than a trade covered by the certificate of documentation issued for that vessel. A documented pleasure vessel may not be used for purposes other than pleasure. However, any certificate of documentation may, under regulations prescribed by the Secretary, be exchanged for any other type of certificate of documentation,or appropriately endorsed for any trade, for which the vessel qualifies.

(b) A non-self-propelled vessel which is qualified to be employed in the coastwise trade may, without being documented, to be employed in that trade within a harbor or on the rivers or inland lakes of the United States, or on the internal waters or canals of any State.

(c) Whenever a vessel is employed in a trade that is not covered by the certificate of documentation issued for that vessel or a documented pleasure vessel is used other than for pleasure, the vessel, together with its equipment, is liable to seizure by and forfeiture to the United States.

(d) A documented vessel may not be placed under the command of a person other than a citizen of the United States.

SEC. 116. // 46 USC 65n. // FALSIFICATION IN DOCUMENTATION: FRAUDULENT USE OF DOCUMENT; PENALTY.

(a) Whenever the owner of a vessel knowingly falsifies or conceals a material fact, or makes a false statement or representation in connection with the documentation of his vessel under this title, in addition to any other penalty provided by law, that vessel, together with its equipment, is liable to seizure by and forfeiture to the United States.

(b) Whenever a certificate of documentation is knowingly and fraudulently used for any vessel, that vessel, together with its equipment, is liable to seizure by and forfeiture to the United States.

SEC. 117. // 46 USC 65o. // CERTIFICATE OF DOCUMENTATION: TERMINATION OF VALIDITY.

(a) A certificate of documentation is invalid if the vessel for which it is issued--,

(1) no longer meets the requirements of this Act and the regulations prescribed thereunder pertaining to that certificate of documentation; or

(2) is placed under the command of a person who is not a citizen of the United States.

(b) Except as provided by subsection (o) of section 30 of the Act of June 5, 1920, as amended (46 U.S.C. 961(a)), an invalid certificate of documentation shall be surrendered in accordance with regulations prescribed by the Secretary.

SEC. 118. // 46 USC 65p. // VESSELS PROCURED OUTSIDE THE UNITED STATES.

(a) The Secretary and the Secretary of State, acting jointly, may provide for the issuance of an appropriate document for any vessel procured outside the United States that meets the ownership requirements of section 104 of this title.

(b) Subject to any limitations the Secretary may prescribe, a vessel for which an appropriate document is issued under this section may proceed to the United States and engage en route in the foreign trade or trade with Guam, American Samoa, Wake, Midway, or Kingman Reef. Upon the vessel's arrival in the United States the document shall be surrendered in accordance with regulations prescribed by the Secretary.

(c) A vessel for which a document is issued under this section is subject to the jurisdiction and laws of the United States. However, the Secretary may suspend for a period not to exceed six months the application of any vessel inspection law administered by him, or any regulation issued thereunder, if he considers the suspension to be in the public interest.

SEC. 119. // 46 USC 65q. // RECORDING OF UNITED STATES BUILT VESSELS.

The Secretary may provide for the recording and certifying of any information pertaining to vessels built in the United States that he considers to be in the public interest.

SEC. 120. // 46 USC 65r. // REGISTRATION OF FUNNEL MARKS AND HOUSE FLAGS.

The Secretary shall provide for the registration of funnel marks and house flags by owners of vessels.

SEC. 121. // 46 USC 65s. // LIST OF DOCUMENTED VESSELS.

The Secretary shall publish periodically a list of all documented vessels together with any information pertaining to them that he considers pertinent or useful.

SEC. 122. // 46 USC 65t. // REPORTS.

To insure compliance with this title and the laws governing the qualifications of vessels to engage in the coastwise trade and the fisheries, the Secretary may require owners and masters of documented vessels to submit reports in any reasonable form and manner he may prescribe.

SEC. 123. // 46 USC 65u. // VIOLATIONS; PENALTY.

(a) Any person who is found by the Secretary, after notice and an opportunity for a hearing, to have violated this title or a regulation issued hereunder shall be liable to the United States for a civil penalty, not to exceed $500 for each violation. Each day of a continuing violation shall constitute a separate violation. The amount of the penalty shall be assessed by the Secretary, or his designee, by written notice. In determining the amount of the penalty, the Secretary shall take into account the nature, circumstances, extent, and gravity of the prohibited acts committed and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require.

(b) The Secretary may compromise, modify, or remit, with or without conditions, any civil penalty under this section.

(c) If any person fails to pay an assessment of a civil penalty after it has become final, the Secretary may refer the matter to the Attorney General for collection in any appropriate district court of the United States.

SEC. 124. // 46 USC 65v. // DELEGATIONS AND REGULATIONS.

The Secretary may--,

(1) delegate, and authorize successive redelegations of, any of the duties or powers conferred on him by this title; and

(2) prescribe regulations to carry out this title.

SEC. 125. // 46 USC 65w. // RELATED TERMS IN OTHER LAWS.

With respect to the documentation of a vessel whenever used in any law, regulation, document ruling, or other official act--,

(1) "certificate of registry", "registry", and "register" mean a registry as provided for in section 110 of this title;

(2) "license", "enrollment and license", "license for the coastwise (or coasting) trade", and "enrollment and license for the coastwise (or coasting) trade" mean a coastwise license as provided for in section 111 of this title;

(3) "enrollment and license to engage in the foreign and coastwise (or coasting) trade on the northern, northeastern, and northwestern frontiers, otherwise than by sea" means a Great Lakes license as provided for in section 112 of this title;

(4) "license for the fisheries" and "enrollment and license for the fisheries" mean a fishery license as provided for in section 113 of this title; and

(5) "yacht" means a pleasure vessel whether or not documented.

SEC. 126. AMENDMENTS TO OTHER LAWS.

(a) Section 4131 of the Revised Statutes of the United States, as amended (46 U.S.C. 221), is further amended to read as follows: " Only a citizen of the United States may serve as master, chief engineer, or officer in charge of a deck watch or engineering watch on any vessel documented under the laws of the United States. However, if a documented vessel is deprived of the services of any officer, other than the master, while on a foreign voyage and a vacancy is thereby created, until the vessel's first return to a United States port where a United States citizen replacement can be obtained, a person who is not a citizen of the United States may serve in--,

"(1) the vacancy; or

"(2) any vacancy resulting from the promotion of another to fill the original vacancy.".

(b) Section 4311 of the Revised Statutes of the United States, as amended (46 U.S.C. 251), is further amended by striking the first and third sentences of subsection (a).

(c) Section 4320 of the Revised Statutes of the United States, as amended (46 U.S.C. 262), is further amended by--,

(1) striking the word "licensed" in the first sentence and inserting in lieu thereof the word "documented"; and

(2) striking the last sentence.

(d) Section 4377 of the Revised Statutes of the United States, as amended (46 U.S.C. 325), is further amended by striking the second sentence.

(e) Section 7 of the Act of June 19, 1886, as amended (46 U.S.C. 319), is further amended by--,

(1) striking the first sentence and inserting in lieu thereof the following:

" Whenever a vessel, entitled to be documented and not so documented, is employed in a trade for which certificates of documentation are issued under the vessel documentation laws, other than a trade covered by a registry, the vessel is liable to a civil penalty of $500 for each port at which it arrives without the proper certificate of documentation, and if it has on board any merchandise of foreign growth or manufacture (sea stores excepted), or any taxable domestic spirits, wines, or other alcoholic liquors, on which the duties or taxes have not been paid or secured to be paid, the vessel, together with its equipment and cargo, is liable to seizure and forfeiture."; and

(2) striking the last sentence.

SEC. 127. // 46 USC 65 // REPEALS.

The following laws are repealed, except with respect to rights and duties that matured, penalties that were incurred, and proceedings that were begun before the effective date of this title:

LISTING OF REPEALED LAWS OMITTED.

SEC. 128. // 46 USC 65 // EFFECTIVE DATE.

This title shall be effective on the first day of the eighteenth month following the month in which enacted.

TITLE II

Sec. 201. Short Title.-This Act // 46 USC 71 // may be cited as the " Tonnage Measurement Simplification Act".

Sec. 202. Measurement.-Section 4148 of the Revised Statutes of the United States, as amended (46 U.S.C. 71) is further amended to read as follows:

" Sec. 4148. (a) Before a vessel is documented or recorded under the laws of the United States, or where the application of a law of the United States to a vessel is determined by its tonnage, the vessel shall be measured by the Secretary of the department in which the Coast Guard is operating. The Secretary may, by regulation, provide for the temporary documentation of a vessel prior to the measurement required by this section.

"(b) A vessel required to be measured under subsection (a) of this section, other than a vessel used exclusively for pleasure, shall be measured as prescribed in sections 4151 and 4153 of the Revised Statutes of the United States, // 46 USC 75, 77. // as amended, and to the extent applicable, as prescribed in Public Law 89 - 219, September 29, 1965 (79 Stat. 891; 46 U.S.C. 83 - 83k) if--,

"(1) it engages or intends to engage in an international voyage by sea; or

"(2) it is at least twenty-four meters in length and is self-propelled.

"(c) A vessel not required to be measured under subsection (b) of this section may be so measured if requested by its owner. A vessel not measured under subsection (b) shall be assigned gross and net tonnages by the Secretary which are functions of its length, breadth, depth, and other dimensions, including appropriate coefficients. The Secretary shall prescribe the manner in which dimensions are measured and which coefficients are appropriate. The resulting gross tonnages, taken as a group, shall reasonably reflect the relative internal volumes of the vessels measured, and the resulting net tonnages shall be in approximately the same ratios to corresponding gross tonnages as are the net and gross tonnages of comparable vessels measured under subsection (b) of this section. In accordance with regulations issued under this subsection, the Secretary may determine the gross and net tonnages of a vessel which is representative of a designated class, model, or type and may assign those gross and net tonnages to other vessels of the same class, model, or type.

"(d) A vessel shall be remeasured if--,

"(1) the vessel is altered or the use of its space is changed so that its gross or net tonnage is affected;

"(2) having been measured under subsection (c) of this section, the vessel becomes, by use or alteration, subject to subsection (b) of this section; or

"(3) having been measured under subsection (b) of this section and not required to be so measured, the owner requests that the vessel be measured under subsection (c) of this section.

Except as provided in this subsection, a vessel that has been measured is not required to be remeasured to obtain another document.

"(e) The Secretary shall make such regulations as may be necessary to carry out the provisions of sections 4148, 4149, 4150, 4151, and 4153 of the Revised Statutes, as amended (46 U.S.C. 71, 72, 74, 75, 77).".

Sec. 203. // 46 USC 71 // APPLICATION.- A vessel measured prior to the effective date of this title under sections 4151 and 4153 of the Revised Statutes of the United States, // 46 USC 75, 77. // as amended, is considered as having been measured under section 4148(b) of the Revised Statutes of the United States, // 46 USC 71. // as amended, by this act.

Sec. 204. Effective Date.-The provisions of this title // 46 USC 71 // shall take effect on the first day of the twelfth month following the month in which enacted.

TITLE III

Sec. 301. The penultimate sentence of section 5(b) of the Act of May 27, 1936 (49 U.S.C. 369(b)), // 46 USC 369. // as amended, is amended by striking " November 1, 1983," and substituting " Novermber 1, 1988.".

Sec. 302. There is authorized to be appropriated to the Secretary of Transportation $500,000 for fiscal year 1981 to conduct a study of the feasibility of constructing a new two track railroad drawbridge across Coos Bay, Oregon, which would replace the existing Southern Pacific Railroad drawbridge located at mile 9.0 and would have a clear navigational opening of 400 feet or such lesser clearance as the Secretary may determine to be reasonable. Such study shall include an analysis of any modifications to the Coos Bay City Airport that would be required to permit construction of a new railroad drawbridge.

Sec. 303. Notwithstanding the provisions of title V, Merchant Marine Act of 1936 and section 11, Merchant Ship Sales Act of 1946, // 46 USC 1151, 50 USC app. 1744. // the Secretary of Commerce is hereby authorized to transfer, without reimbursement, the title and ownership of V4-M-A1 ocean tug Scotch Cap to the Superior-Douglas County Museum in Superior, Wisconsin, for use as a maritime museum. The vessel shall be delivered to the museum at the place where the vessel is located on the effective date of this Act, in its present condition, without cost to the United States. While the vessel is owned by the Superior-Douglas County Museum it shall be used solely as a maritime museum, and such vessel shall not be used for operation or transportation purposes of any nature whatsoever. In the event that the United States should have need for the vessel, the Superior-Douglas County Museum, on request of the Secretary of Commerce shall make the vessel available to the United States without cost. In the event the Superior-Douglas County Museum no longer requires the vessel for the purposes of this Act, such vessel shall be conveyed back to the United States in as good condition as when received, except for ordinary wear and tear, to be delivered by the Superior-Douglas County Museum to the point of original delivery without any cost to the United States.

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 428 (Comm. on Merchant Marine and Fisheries).

CONGRESSIONAL RECORD:

Vol. 125 (1979): Sept. 17, considered and passed House.

Vol. 126 (1980): Dec. 9, considered and passed Senate, amended. Dec. 10, House concurred in Senate amendment.

PUBLIC LAW 96-593, 94 STAT. 3452

96 TH CONGRESS, H.R. 4774 DECEMBER 24, 1980
An Act To amend the National Labor Relations Act to provide

that any employee who is a

member of a religion or sect historically holding

conscientious objection to joining

or financially supporting a labor organization shall

not be required to do so.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 19 of the National Labor Relations Act // 29 USC 169. // be replaced by a new section 19 as follows:

" Sec. 19. Any employee who is a member of and adheres to established and traditional tenets or teachings of a bona fide religion, body, or sect which has historically held conscientious objections to joining or financially supporting labor organizations shall not be required to join or financially support any labor organization as a condition of employment; except that such employee may be required in a contract between such employees' employer and a labor organization in lieu of periodic dues and initiation fees, to pay sums equal to such dues and initiation fees to a nonreligious, nonlabor organization charitable fund exempt from taxation under section 501(c)( 3) of title 26 of the Internal Revenue Code, // 26 USC 501. // chosen by such employee from a list of at least three such funds, designated in such contract or if the contract fails to designate such funds, then to any such fund chosen by the employee. If such employee who holds conscientious objections pursuant to this section requests the labor organization to use the grievance-arbitration procedure on the employee's behalf, the labor organization is authorized to charge the employee for the reasonable cost of using such procedure.".

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 496 (Comm. on Education and Labor).

CONGRESSIONAL RECORD, Vol. 126 (1980):

Feb. 11, 12, considered and passed House.

Dec. 13, considered and passed Senate.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 17, No. 1:

Jan. 2, Presidential statement.

PUBLIC LAW 96-592, 94 STAT. 3437, FARM CREDIT ACT AMENDMENTS OF 1980

96th CONGRESS, S. 1465 DECEMBER 25, 1980
An Act To amend the Farm Credit Act of 1971 to permit Farm

Credit System institutions to

improve their services to borrowers, and for other

purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act // 12 USC 2001. // may be cited as the " Farm Credit Act Amendments of 1980".

TITLE I-FEDERAL LAND BANKS AND ASSOCIATIONS

Sec. 101. Section 1.4 of the Farm Credit Act of 1971 // 12 USC 2012. // is amended by--,

(1) striking out in paragraph (6) "loans and" and inserting in lieu thereof "and participate in loans, make";

(2) inserting before the period at the end of paragraph (12) ", participate with one or more other Farm Credit System institutions in loans made under this title or other titles of this Act on the basis prescribed in section 4.18 of this Act, and participate with lenders which are not Farm Credit System institutions in loans that the bank is authorized to make under this title";

(3) inserting after " System" in the first sentence of paragraph (14) "or any insured State nonmember bank as defined in section 2 of the Federal Deposit Insurance Act";

(4) striking out everything after the second comma in paragraph (15) and inserting in lieu thereof "and, as may be authorized by its board of directors and approved by the Farm Credit Administration, (i) sell to lenders which are not Farm Credit System institutions interests in loans, (ii) buy from and sell to Farm Credit System institutions interests in loans and in other financial assistance extended and nonvoting stock, and (iii) make other investments."; and

(5) adding new paragraphs (22) and (23) as follows:

"(22) Accept contributions to its capital from Federal land bank associations and account therefor as authorized by the Farm Credit Administration.

"(23) As may be authorized by its board of directors and approved by the Farm Credit Administration, agree with other Farm Credit System institutions to share loan and other losses, whether to protect against capital impairment or for any other purpose.".

Sec. 102. Section 1.5 of the Farm Credit Act of 1971 // 12 USC 2013. // is amended by--,

(1) striking out in subsection (b) "hypotheticated" and inserting in lieu thereof "hypothecated";

(2) striking out the first sentence of subsection (d) and inserting in lieu thereof two new sentences as follows: " Nonvoting stock may be issued to the Governor of the Farm Credit Administration, to borrowers as patronage refunds, and may also be issued to Federal land bank associations in amounts that will permit the bank to extend financial assistance to eligible persons other than farmers, ranchers, and producers or harvesters of aquatic products. Nonvoting stock also may be issued to and shall be retired for other Farm Credit System institutions as may be authorized by its board of directors and approved by the Farm Credit Administration."; and

(3) adding new subsections (f) and (g) as follows:

"(f) Patronage refunds may be paid in nonvoting stock, participation certificates, allocated surplus, and other equities of the bank, or cash, or in both equities and cash, as determined by the board of the bank, to borrowers of the fiscal year for which such patronage refunds are distributed. All patronage refunds shall be paid in the proportion that the amount of interest on the loans to each borrower during the year bears to the interest on the loans of all borrowers during the year or on such other proportionate patronage basis as the Farm Credit Administration may approve.

"(g) Equities to evidence contributions to capital may be issued to Federal land bank associations when the bylaws of the bank so provide.".

Sec. 103. Section 1.6 of the Farm Credit Act of 1971 // 12 USC 2014. // is amended to read as follows:

" Sec. 1.6. Real Estate Mortgage Loans.-The Federal land banks are authorized to make or participate with other lenders in long-term real estate mortgage loans in rural areas, as defined by the Farm Credit Administration, or to producers or harvesters of aquatic products, and make continuing commitments to make such loans under specified circumstances, or extend other financial assistance of a similar nature to eligible borrowers, for a term of not less than five nor more than forty years.".

Sec. 104. Section 1.7 of the Farm Credit Act of 1971 // 12 USC 2015. // is amended by inserting before the period in the first sentence "as provided in section 4.17 of this Act".

Sec. 105. Section 1.8 of the Farm Credit Act of 1971 // 12 USC 2016. // is amended by striking out in clause (1) "and ranchers" and inserting in lieu thereof ",ranchers, or producers or harvesters of aquatic products".

Sec. 106. Section 1.9 of the Farm Credit Act of 1971 // 12 USC 2017. // is amended by striking out the first sentence and inserting in lieu thereof the following: Loans originated by a Federal land bank or in which it " Loans originated by a Federal land bank or in which it participates with a lender which is not a Farm Credit System institution shall not exceed 85 per centum of the appraised value of the real estate security, or such greater amount, not to exceed 97 per centum of the appraised value of the real estate security, as may be authorized under regulations of the Farm Credit Administration for loans guaranteed by Federal, State, or other governmental agencies, and shall be secured by first liens on interest in real estate of such classes as may be approved by the Farm Credit Administration.".

Sec. 107. Section 1.10 of the Farm Credit Act of 1971 // 12 USC 2018. // is amended by striking out the first sentence and inserting in lieu thereof the following: " Loans made by the Federal land banks to farmers, ranchers, and producers or harvesters of aquatic products may be for any agricultural or aquatic purpose and other credit needs of the applicant, including financing for basic processing and marketing directly related to the applicant's operations and those of other eligible farmers, ranchers, and producers or harvesters of aquatic products: Provided, That the applicant's operations shall supply at least 20 per centum, or such larger per centum that is required by the board of directors of the bank under regulations of the Farm Credit Administration, of the total processing or marketing for which financing is extended.".

Sec. 108. Section 1.11 of the Farm Credit Act of 1971 // 12 USC 2019. // is amended by inserting "and aquatic" before "operations".

Sec. 109 Section 1.12 of the Farm Credit Act of 1971 // 12 USC 2020. // is amended by striking out the designation "(a)".

Sec. 110. Section 1.15 of the Farm Credit Act of 1971 // 12 USC 2033. // is amended by--,

(1) striking out in paragraph (13) "shall";

(2) striking out in paragraph (14) "may" the second time it appears; and

(3) adding a new paragraph (21) as follows:

"(21) Contribute to the capital of the bank.".

Sec. 111. Section 1.16 of the Farm Credit Act of 1971 // 12 USC 2034. // is amended by--,

(1) striking out in the sixth sentence of subsection (a) "fair"; and

(2) adding a new subsection (c) as follows:

"(c) Notwithstanding the provisions of subsection (a) of this section, the purchase of stock need not be required with respect to that part of any loan (1) made by a Federal land bank which it sells to a lender which is not a Farm Credit System institution, or (2) that such lender retains or acquires in participating in the loan with a Federal land bank.".

Sec. 112. Section 1.17 of the Farm Credit Act of 1971 // 12 USC 2051. // is amended by--,

(1) striking out in the last sentence of subsection (a) "exess" and inserting in lieu thereof "excess"; and

(2) amending subsection (b) by inserting", and pay patronage refunds, or do any of them, as provided in its bylaws," after "dividends", and striking out "with" and inserting in lieu thereof "the".

Sec. 113. Section 1.18(b) of the Farm Credit Act of 1971 // 12 USC 2052. // is amended to read as follows:

"(b) Any association may declare a dividend or dividends and pay patronage refunds, or do any of them, as provided in its bylaws, out of the whole or any part of its net earnings available therefor which remain after (1) maintenance of the reserve required in subsection (a) of this section and (2) bank approval. All patronage refunds shall be paid on the proportionate patronage basis approved by the bank. Dividends shall be noncumulative, and the rate of dividends may be different between classes and issues of stock and participation certificates on the basis of the comparative contributions of the holders thereof to the capital or earnings of the Federal land bank by such classes and issues, but otherwise dividends shall be without preference.".

Sec. 114. Section 1.19 of the Farm Credit Act of 1971 // 12 USC 2053. // is amended by adding at the end thereof a new sentence as follows: " As may be authorized by the bank in accordance with regulations of the Farm Credit Administration, associations also may enter into agreements with other Farm Credit System institutions to share loan and other losses, whether to protect against capital impairment or for any other purpose.".

Sec. 115. Section 1.20 of the Farm Credit Act of 1971 // 12 USC 2054. // is amended by inserting after "stock" the second time it appears "or participation certificates," and inserting "or other Farm Credit System institutions" after " Administration".

TITLE II- FEDERAL INTERMEDIATE CREDIT BANKS AND PRODUCTION CREDIT ASSOCIATIONS

Sec. 201. Section 2.1 of the Farm Credit Act of 1971 // 12 USC 2072. // is amended by--,

(1) inserting after " System" in the first sentence of paragraph (12) "or any insured State nonmember bank as defined in section 2 of the Federal Deposit Insurance Act";

(2) striking out in paragraph (13) everything after "agency" the second time it appears and inserting in lieu thereof ", and, as may be authorized by its board of directors and approved by the Farm Credit Administration, (i) buy from and sell to Farm Credit System institutions interests in loans and in other financial assistance extended and nonvoting stock, and (ii) make other investments.";

(3) amending paragraph (18) to read as follows:

"(18) As may be authorized by its board of directors and approved by the Farm Credit Administration, agree with other Farm Credit System institutions to share loan or other losses, whether to protect against capital impairment or for any other purposes,"; and

(4) inserting before the period at the end of paragraph (20) ", and participate with one or more other Farm Credit System institutions in loans made under this title or other titles of this Act on the basis prescribed in section 4.18 of this Act".

Sec. 202. Section 2.2 of the Farm Credit Act of 1971 // 12 USC 2073. // is amended by--,

(1) inserting before the period at the end of the first sentence of subsection (d) ", and may be issued to and, notwithstanding the provisions of subsection (g) of this section, shall be retired for other Farm Credit System institutions as may be authorized by its board of directors and approved by the Farm Credit Administration";

(2) striking out in the second and fourth paragraphs of subsection (g) "fair";

(3) striking out everything through " Governor" in subsection (h) and inserting in lieu thereof " Except with regard to stock or participation certificates held by the Governor or other Farm Credit System institutions"; and

(4) striking out in subsection (i) "fair".

Sec. 203. Section 2.3 of the Farm Credit Act of 1971 // 12 USC 2074. // is amended to read as follows:

" Sec. 2.3. Loans; Discounts; Participation; Leasing.-(a) The Federal intermediate credit banks are authorized to make loans and extend other similar financial assistance to, and to discount for or purchase from--,

"(1) any production credit association, or

"(2) any national bank, State bank, trust company, agricultural credit corporation, incorporated livestock loan company, savings institution, credit union, or any association of agricultural producers engaged in the making of loans to farmers and ranchers, and any corporation engaged in the making of loans to producers or harvesters of aquatic products,

any note, draft, or other obligation with its endorsement or guarantee, the proceeds of which note, draft, or other obligation have been advanced to persons and for purposes eligible for financing by production credit associations under section 2.15(a) (1), (2), and (3) of this Act. // 12 USC 2096. //

"(b) The Federal intermediate credit banks may participate with one or more production credit associations or intermediate credit banks in the making of loans to eligible borrowers and may participate with one or more other Farm Credit System institutions in loans made under this title or other titles of this Act on the basis prescribed in section 4.18 of this Act. The banks may own and lease or lease with option to purchase to persons eligible for assistance under this title, equipment needed in the operations of such persons.

"(c) No paper shall be purchased from or discounted for, and no loans shall be made or other similar financial assistance extended by a Federal intermediate credit bank to any entity identified in subsection (a) (1) and (2) of this section if the amount of such paper added to the aggregate liabilities of such entity, whether direct or contingent (other than bona fide deposit liabilities), exceeds ten times the paid-in and unimpaired capital and surplus of such entity or (in the case of financing institutions under subsection (a)(2) of this section) the amount of such liabilities permitted under the laws of the jurisdiction creating such institution, whichever is the lesser. It shall be unlawful for any national bank which is indebted to any Federal intermediate credit bank, upon paper discounted or purchased under subsection (a) of this section, to incur any additional indebtedness, if by virtue of such additional indebtedness its aggregate liabilities direct or contingent, will exceed the limitation herein contained.

"(d) All of the loans, financial assistance, discounts, and purchases authorized by this section shall be subject to regulations of the Farm Credit Administration and shall be secured by collateral, if any, as may be required in such regulations. The regulations shall assure that such loans, financial assistance, discounts, and purchases are available on a reasonable basis to any financing institution authorized to receive such services under subsection (a)(2) of this section that (i) is significantly involved in lending for agricultural or aquatic purposes, (ii) demonstrates a continuing need for supplementary sources of funds to meet the credit requirements of its agricultural or aquatic borrowers, (iii) has limited access to national or regional capital markets, and (iv) does not use such services to expand its financing activities to persons and for purposes other than those authorized in section 2.15(a) (1), (2), and (3) of this Act. // 12 USC 2096. // The regulations may authorize a Federal intermediate credit bank to charge reasonable fees for any commitment to extend service under this section to such a financing institution. For purposes of this subsection, a financing institution together with its subsidiaries and affiliates may be considered as one but such determination to consider such institution together with its subsidiaries and affiliates as one shall be made in the first instance by the bank and in the event of a denial by the bank of its services to a financial institution, thereafter by the Farm Credit Administration on a case-by-case basis with due regard to the total relationship of the financing institution, its subsidiaries, and affiliates.

"(e) Nothing in this section shall require termination of discount relationships in existence on the effective date of the Farm Credit Act Amendments of 1980.".

Sec. 204. Section 2.4 of the Farm Credit Act of 1971 // 12 USC 2075. // is amended by striking out the first sentence and inserting in lieu thereof the following: " Loans, advances, or discounts made under section 2.3 of this Act shall be repayable in not more than seven years(fifteen years if made to producers or harvesters of aquatic products) from the time they are made or discounted by the Federal intermediate credit bank, except that the district farm credit board, under regulations of the Farm Credit Administration, may approve policies permitting loans, advances, or discounts (other than those made to producers or harvesters of aquatic products) to be repayable in not more than ten years from the time they are made or discounted by such bank. Loans, advances, and discounts shall bear such rate or rates of interest or discount as the board of directors of the bank shall from time to time determine with the approval of the Farm Credit Administration as provided in section 4.17 of this Act, but the rates charged financing institutions shall be the same as those charged production credit associations.".

Sec. 205. Section 2.5 of the Farm Credit Act of 1971 // 12 USC 2076. // is amended by inserting "and aquatic" after "on-farm".

Sec. 206. Section 2.6(c) of the Farm Credit Act of 1971 // 12 USC 2077. // is amended by striking out "of less than 25 per centum" in the second sentence.

Sec. 207. Section 2.10 of the Farm Credit Act of 1971 // 12 USC 2091. // is amended by striking out the comma after " States" in the first sentence and inserting in lieu thereof a period.

Sec. 208. Section 2.12 of the Farm Credit Act of 1971 // 12 USC 2093. // is amended by--,

(1) inserting before the period at the end of paragraph (11) "and buy from and sell to such banks interests in loans and in other financial assistance extended and nonvoting stock, as may be authorized by the Federal intermediate credit bank in accordance with regulations of the Farm Credit Administration";

(2) inserting before the period at the end of paragraph (13) "and when authorized by the bank participate with one or more other Farm Credit System institutions in loans made under this title or other titles of this Act on the basis prescribed in section 4.18 of this Act"; and

(3) amending paragraph (15) to read as follows:

"(15) As may be authorized by the Federal intermediate credit bank in accordance with regulations of the Farm Credit Administration, agree with other Farm Credit System institutions to share loan or other losses, whether to protect against capital impairment or for any other purpose.".

Sec. 209. Section 2.13 of the Farm Credit Act of 1971 // 12 USC 2094. // is amended by--,

(1) inserting before the period at the end of subsection (e) "or in lieu of nonvoting stock";

(2) striking out in the first sentence of subsection (f) "fair";

(3) amending the last sentence of subsection (f) to read as follows: " Notwithstanding any other provisions of this section, for a loan in which an association participates with a commercial bank or other financial institution other than a Farm Credit System institution, nonvoting stock or participation certificates may be issued to the commercial bank or other financial institution in satisfaction of the requirement that the borrower own stock or participation certificates, which requirement shall apply only to the portion of the loan which is retained by the association.";

(4) striking out in the first sentence in subsection (g) "fair";

(5) striking out everything through " Governor" in subsection (j) and inserting in lieu thereof " Except with regard to stock or participation certificates held by the Governor or other Farm Credit System institutions"; and

(6) striking out in subsection (k) "fair".

Sec. 210. Section 2.15 of the Farm Credit Act of 1971 // 12 USC 2096. // is amended by--,

(1) amending clause (1) in the first sentence of subsection (a) to read as follows: "(1) bona fide farmers and ranchers and the producers or harvesters of aquatic products, for agricultural or aquatic purposes and other requirements of such borrowers, including financing for basic processing and marketing directly related to the borrower's operations and those of other eligible farmers, ranchers, and producers or harvesters of aquatic products: Provided, That the borrower's operations shall supply at least 20 per centum, or such larger per centum that is required by the supervising bank under regulations of the Farm Credit Administration, of the total processing or marketing for which financing is extended,"; and

(2) inserting in subsection (b) after " Administration" in the first sentence "as provided in section 4.17 of this Act".

Sec. 211. Section 2.16 of the Farm Credit Act of 1971 // 12 USC 2097. // is amended by inserting "and aquatic" after "on-farm".

TITLE III- BANKS FOR COOPERATIVES

Sec. 301. Section 3.1 of the Farm Credit Act of 1971 // 12 USC 2122. // is amended by--,

(1) inserting before the period at the end of paragraph (11) ", and participate with one or more other Farm Credit System institutions in loans made under this title or other titles of this Act on the basis prescribed in section 4.18 of this Act";

(2) inserting after " System" in the first sentence in paragraph (12) "or any insured State nonmember bank as defined in section 2 of the Federal Deposit Insurance Act

// 12 USC 264, 1811 - 1831. //

or, to the extent necessary to facilitate transactions which may be financed under section

3.7(b) of this Act, any other financial organization, domestic or

foreign, as may be authorized by its board of directors and approved by the Farm Credit Administration";

(3) amending paragraph (13) by:

(a) inserting immediately after "(13)" the designation "(A)"; (b) inserting after subparagraph (A) the following new subparagraphs (B) and (C):

"(B) As may be authorized by its board of directors and approved by the Farm Credit Administration, buy from and sell to Farm Credit System institutions interests in loans and in other financial assistance extended and nonvoting stock.

"(C) As may be authorized by its board of directors and approved by the Farm Credit Administration, and solely for the purposes of obtaining credit information and other services needed to facilitate transactions which may be financed under section 3.7(b) of this Act, invest in ownership interests in foreign business entities that are principally engaged in providing credit information to and performing such servicing functions for their members in connection with the members' international activities."; and

(4) adding new paragraphs (18) and (19) as follows:

"(18) As may be authorized by the board of directors and approved by the Farm Credit Administration, maintain credit balances and pay or receive fees or interest thereon, for the purpose of assisting in the transfer of funds to or from parties to transactions that may be financed under section 3.7(b) of this Act: Provided, however, That nothing herein shall authorize the banks for cooperatives to engage in the business of accepting domestic deposits.

"(19) As may be authorized by its board of directors and approved by the Farm Credit Administration, agree with other Farm Credit System institutions to share loan or other losses, whether to protect against capital impairment or for any other purpose.".

Sec. 302. Section 3.3 of the Farm Credit Act of 1971 // 12 USC 2124. // is amended by adding a new subsection (f) as follows:

"(f) Participation certificates may be issued to parties to whom voting stock may not be issued.".

Sec. 303. Section 3.5 of the Farm Credit Act of 1971 // 12 USC 2126. // is amended by--,

(1) striking out the first three sentences and inserting in lieu thereof three new sentences as follows: " Any nonvoting stock held by the Governor of the Farm Credit Administration shall be

retired to the extent required by section 4.0(b) of this Act // 12 USC 2151. // before

any other outstanding voting or nonvoting stock or participation certificates shall be retired except as may be otherwise authorized by the Farm Credit Administration. When those requirements have been satisfied, nonvoting investment stock and participation certificates may be called for retirement at par. With the approval of the issuing bank, the holder may elect not to have the called stock or participation certificates retired in response to a call, reserving the right to have such stock or participation certificates included in the next call for retirement."; and

(2) striking out in the fourth sentence "fair book value not exceeding".

Sec. 304. Section 3.7 of the Farm Credit Act of 1971 // 12 USC 2128. // is amended by--,

(1) adding the designation "(a)" before the text, and inserting before "collateral custody" in the first sentence, "currency exchange necessary to service individual transactions that may be financed under subsection (b) of this section,", and inserting before the period at the end of the third sentence "and may make or participate in loans or commitments and extend other technical and financial assistance to other domestic parties for the acquisition of equipment and facilities to be leased to such stockholders for use in their operations in the United States"; and

(2) adding new subsections (b), (c), (d), and (e) as follows:

"(b) A bank for cooperatives is authorized to make or participate in loans and commitments to, and to extend other technical and financial assistance to (1) a domestic or foreign party with respect to its transactions with an association that is a voting stockholder of the bank for the export or import of agricultural commodities, farm supplies, or aquatic products through purchases, sales or exchanges, and (2) a domestic or foreign party in which such an association has at least the minimum ownership interest approved under regulations of the Farm Credit Administration for the purpose of facilitating the associations's export or import operations of the type described in clause (1) of this subsection: Provided, That a bank for cooperatives determines,under regulations of the Farm Credit Administration, that the voting stockholder will benefit substantially as a result of such loan, commitment, or assistance.

"(c) Loans, commitments, and assistance authorized by subsection (b) of this section shall be extended in accordance with policies adopted by the board of directors of the bank under regulations of the Farm Credit Administration.

"(d) The regulations of the Farm Credit Administration implementing subsection (b) of this section and the other provisions of this title relating to the authority under subsection (b) of this section may not confer upon the banks for cooperatives powers and authorities greater than those specified in this title. The Farm Credit Administration shall, during the formulation of such regulations, closely consult on a continuing basis with the Board of Governors of the Federal Reserve System to ensure that such regulations conform to national banking policies, objectives, and limitations.

"(e) Notwithstanding any other provision of this title, the banks for cooperatives shall not make or participate in loans or commitments for the purpose of financing speculative futures transactions by eligible borrowers in foreign currencies.".

Sec. 305. Section 3.8 of the Farm Credit Act of 1971 // 12 USC 2129. // is amended by--,

(1) in the first paragraph striking out the second comma and inserting "or aquatic" before "business";

(2) striking out in subsection (c) "or farm business services" and inserting in lieu thereof "farm or aquatic business services, or services to eligible cooperatives"; and

(3) amending subsection (d) to read as follows:

"(d) A percentage of the voting control of the association not less than 80 per centum (60 per centum (1) in the case of rural electric, telephone, public utility, and service cooperatives; (2) in the case of local farm supply cooperatives that have historically served needs of the community that would not adequately be served by other suppliers and have experienced a reduction in the percentage of farmer membership due to changed circumstances beyond their control such as, but not limited to, urbanization of the community; and (3) in the case of local farm supply cooperatives that provide or will provide needed services to a community and that are or will be in competition with a cooperative specified in paragraph (2) or, with respect to any type of association or cooperative, such higher percentage as established by the district board, is held by farmers, producers or harvesters of aquatic products, or eligible cooperative associations as defined herein;".

Sec. 306. Section 3.9(a) of the Farm Credit Act of 1971 // 12 USC 2130. // is amended by striking out the first sentence and inserting in lieu thereof a new sentence as follows: " Each borrower entitled to hold voting stock shall, at the time a loan is made by a bank for cooperatives, own at least one share of voting stock and shall be required by the bank with the approval of the Farm Credit Administration to invest in additional voting stock or nonvoting investment stock at that time, or from time to time, as the lending bank may determine, but the requirement for investment in stock at the time the loan is closed shall not exceed an amount equal to 10 per centum of the face amount of the loan.".

Sec. 307. Section 3.10 of the Farm Credit Act of 1971 // 12 USC 2131. // is amended by--,

(1) inserting before the period in the first sentence of subsection (a) as provided in section 4.17 of this Act"; and

(2) strikingout in the first sentence of subsection(d) "book" and inserting in lieu thereof "market" and adding a new sentence as follows: " In no event shall the bank's equities be retired or canceled if the retirement or cancellation would adversely affect the bank's capital structure, as determined by the Farm Credit Administration.".

Sec. 308. Section 3.11 of the Farm Credit Act of 1971 // 12 USC 2132. // is amended by--,

(1) striking out in the second sentence of subsection (b) "of less than 25 per centum" and "of not to exceed such per centum of net savings"; and

(2) striking out the first sentence of subsection (c) and inserting in lieu thereof a new sentence as follows: " The net savings of each district bank for cooperatives, after the earnings for the fiscal year have been applied in accordance with subsection (a) or (b) of this section, whichever is applicable, shall be paid in stock, participation certificates, or cash, or in any of them, as determined by its board, as patronage refunds to borrowers to whom such refunds are payable who are borrowers of the fiscal year for which such patronage refunds are distributed.".

TITLE IV- PROVISIONS APPLICABLE TO TWO OR MORE CLASSES OF INSTITUTIONS OF THE SYSTEM

Sec. 401. Section 4.5 of the Farm Credit Act of 1971 // 12 USC 2156. // is amended by--,

(1) striking out in the first sentence "presidents of each bank" and inserting in lieu thereof "president of each bank or the president's designee"; and

(2) striking out in the third sentence "subcommittee's" and inserting in lieu thereof "subcommittees". Sec. 402. Section 4.10 of the Farm Credit Act of 1971

// 12 USC 2181. // is amended by striking out "name" and inserting in lieu thereof "same".

Sec. 403. Title IV of the Farm Credit Act of 1971 is amended by adding new sections 4.17, 4.18, 4.19, and 4.20 as follows:

" Sec. 4.17. Interest Rates.-Interest rates on loans from institutions of the Farm Credit System shall be determined with the approval of the Farm Credit Administration as provided in this Act, // 12 USC 2205. // notwithstanding any interest rate limitation imposed by any State constitution or statute or other laws which are hereby preempted for purposes of this Act. Interest rates on loans made by agricultural credit corporations organized in conjunction with cooperative associations for the purpose of financing the ordinary crop operations of the members of such associations or other producers and eligible to discount with the Federal intermediate credit banks pursuant to section 2.3 of this Act shall be exempt from any interest rate limitation imposed by any State constitution or statute or other laws which are hereby preempted for purposes of this Act.

" Sec. 4.18. Participation Loans.-Notwithstanding any other provisions of this Act, // 12 USC 2206. // the terms of any loan participated in by two or more Farm Credit System institutions operating under different titles of this Act, including provisions for capitalization of the portion of the loan participated in by each institution, shall be as may be agreed upon among such institutions and authorized by the Farm Credit Administration, except that for purposes of determining borrower eligibility, membership, term, amount, loan security, and purchase of stock or participation certificates by the borrower, the provisions of law applicable to the loan shall be the provisions in the title under which the institution that originates the loan operates.

" Sec. 4.19. // 12 USC 2207. // Young, Beginning, and Small Farmers and Ranchers.--,

"(a) Under policies of the district board, each Federal land bank association and production credit association shall prepare a program for furnishing sound and constructive credit and related services to young, beginning, and small farmers and ranchers. Such programs shall assure that such credit and services are available in coordination with other units of the Farm Credit System serving the territory and with other governmental and private sources of credit. Each program shall be subject to review and approval by the supervising bank.

"(b) The Federal land bank and the Federal intermediate credit bank for each district shall annually obtain from associations under their supervision reports of activities under programs developed pursuant to subsection (a) of this section and progress toward program objectives. On the basis of such reports, the banks shall provide to the Farm Credit Administration a joint annual report summarizing the operations and achievements in their district under such programs.

" Sec. 4.20. Termination of Provisions.-The provisions of (1) section 2.3 // 12 USC 2208. // authorizing the Federal intermediate credit banks to lend to or discount paper for other financial institutions, and (2) section 3.7(b) authorizing the financing of certain domestic or foreign entities in connection with the import or export activities of cooperatives which are borrowers from the banks for cooperatives, shall expire on September 30, 1990, unless extended by Act of Congress prior to that date. Any contract or agreement entered into under the authority of either provision prior to its expiration shall remain in full force and effect notwithstanding such expiration.".

Sec.404. Title IV of the Farm Credit Act of 1971 is amended by adding at the end thereof new parts D and E as follows:

" Part D-Service Organizations

" Sec. 4.25. Establishment.-Any bank of the Farm Credit System, // 12 USC 2211. // or two or more of such banks acting together, may organize a corporation or corporations for the purpose of performing functions and services for or on behalf of the organizing bank or banks that the bank or banks may perform pursuant to this Act: Provided, That a corporation so organized shall have no authority either to extend credit or provide insurance services for borrowers from Farm Credit System institutions, nor shall it have any greater authority with respect to functions and services than the organizing bank or banks possess under this Act. The organizing bank or banks shall apply for a Federal charter for the corporation by forwarding to the Governor of the Farm Credit Administration a statement of the need for the corporation and proposed articles specifying in general terms the objectives for which the corporation is formed, the powers to be exercised by it in carrying out the functions and services, and the territory it is to serve. The Governor for good cause may deny the charter applied for. Upon the approval of articles by the Governor and the issuance of a charter, the corporation shall become as of such date a federally chartered body corporate and an instrumentality of the United States.

" Sec. 4.26. Powers of the Governor.--, // 12 USC 2212. // The Governor shall have power, under rules and regulations prescribed by the Governor or by prescribing in the terms of the charter or by approval of the bylaws of the corporation, to provide for the organization of any corporation chartered under this part and the territory within which its operations may be carried on, and to direct at any time such changes in its charter as he finds necessary for the accomplishment of the purposes of this Act. The powers of the Governor to provide for the organization of any corporation chartered under this part include, but are not limited to approval of--,

"(1) corporate title;

"(2) general corporate powers;

"(3) eligibility for membership on, and the powers, composition, selection, terms, and compensation of the board of directors;

"(4) classes, issuance, value, and retirement of stock;

"(5) sources of operating funds;

"(6) dissolution, liquidation, and distribution of assets on liquidation; and

"(7) application and distribution of earnings.

" Sec. 4.27. Supervision and Examination.--, // 12 USC 2213. // The corporations organized under this part shall be institutions of the Farm Credit System and shall be subject to the same supervision and examination by the Farm Credit Administration as are the organizing bank or banks under this Act.

" Sec. 4.28. State Laws.--, // 12 USC 2214. // State and other laws shall apply to corporations organized pursuant to this part to the same extent such laws would apply to the organizing banks engaged in the same activity in the same jurisdiction: Provided, however, That to the extent that sections 1.21, 2.8, and 3.13 of this Act // 12 USC 2055, 2079, 2134. // may exempt banks of the Farm Credit System from taxation, such exemptions, other than with respect to franchise taxes, shall not extend to corporations organized pursuant to this part.

" Part E-Sale of Insurance

" Sec. 4.29. Lines of Insurance.--, // 12 USC 2218. // (a) The regulations of the Farm Credit Administration governing financially related services that the banks and associations of the Farm Credit System may provide under sections 1.11, 1.15, 2.5, and 2.16 of this Act // 12 USC 2019, 2033, 2076, 2097. // may authorize the sale to any member of any such bank or association, on an optional basis, of credit or term life and credit disability insurance appropriate to protect the loan commitment in the event of death or disability of the debtors and other insurance necessary to protect the member's farm or aquatic unit, but limited to, hail and multiple-peril crop insurance, title insurance, and insurance to protect the facilities and equipment of aquatic borrowers.

"(b) Such regulations shall provide that--,

"(1) in any case in which insurance is required as a condition for a loan or other financial assistance from a bank or association, notice be given that it is not necessary to purchase the insurance from the bank or association and that the borrower has the option of obtaining the insurance elsewhere;

"(2) such insurance services may be offered only if--,

"(i) the bank or association has the capacity to render insurance service under this Act in an effective and

efficient

manner;

"(ii) there exists the probability that any insurance

program

under this Act will generate sufficient revenue to

cover all costs; and

"(iii) rendering insurance service will not have an

adverse

effect on the bank's or association's credit or other

operations;

and

"(3) no bank or association shall directly or indirectly discriminate in any manner against any agent, broker, or insurer that is not affiliated with such bank or association, or against any party who purchases insurance through any such nonaffiliated insurance agent, broker, or insurer.

"(c) Notwithstanding any provision of this section to the contrary, any bank or association that on the date of enactment of the Farm Credit Act Amendments of 1980, is offering insurance coverages not authorized by this section may continue to sell such coverages for a period of not more than one year from such date of enactment and may continue to service such coverages until their expiration.".

TITLE V-DISTRICT AND FARM CREDIT ADMINISTRATION ORGANIZATION

Sec. 501. Section 5.0 of the Farm Credit Act of 1971 // 12 USC 2221. // is amended by inserting before the period at the end of the first sentence the following: "and one of which districts may, if authorized by the Federal Farm Credit Board, include the Virgin Islands of the United States: Provided, That the extension of credit and other services authorized by this Act in the Virgin Islands of the United States shall be undertaken only if determined to be feasible under regulations of the Farm Credit Administration".

Sec. 502. Section 5.2 of the Farm Credit Act of 1971 // 12 USC 2223. // is amended by--,

(1) striking out in the last sentence of subsection (b) "three" and inserting in lieu thereof "two"; and

(2) striking out in the first sentence of subsection (c) "three" and inserting in lieu thereof "two".

Sec. 503. Section 5.8(h) of the Farm Credit Act of 1971 // 12 USC 2242. // is amended by striking out in the first sentence "the sum of $100 a day" and inserting in lieu thereof "compensation at a rate equal to the daily equivalent of the rate prescribed for grade GS-18 under section 5332 of title 5 of the United States Code".

Sec. 504. Section 5.10 of the Farm Credit Act of 1971 // 12 USC 2244. // is amended by inserting after the second sentence a new sentence as follows: " Pursuant to a policy statement adopted by the Federal Farm Credit Board, the Governor of the Farm Credit Administration shall consult on a regular basis with the Secretary of the Treasury in connection with the exercise by the System and the Governor of the powers conferred under section 4.2 of this Act, // 12 USC 2153. // and with the Board of Governors of the Federal Reserve System in connection with the effect of System lending activities on national monetary policy.".

Sec. 505. Section 5.15 of the Farm Credit Act of 1971 // 12 USC 2249. // is amended by adding at the end thereof a new sentence as follows: " The Farm Credit Administration may dispose of property so acquired and any amounts collected from the disposition of such property shall be deposited in the special fund provided for in section 5.16(b) of this Act // 12 USC 2250. // and shall be available to the Administration in the same manner and for the same purposes as the funds collected under section 5.16(a) of this Act."

Sec. 506. Section 5.17 of the Farm Credit Act of 1971 // 12 USC 2251. // is amended by adding at the end thereof the following new clause (5) and inserting a new sentence immediately thereafter:

"(5) To sell or otherwise dispose of any interest in property leased or acquired under the foregoing if authorized by the Board. In actions undertaken by the banks pursuant to the foregoing provisions of this section, the Farm Credit Administration may act as agent for the banks.".

Sec. 507. Section 5.18 of the Farm Credit Act of 1971 // 12 USC 2252. // is amended by adding at the end of paragraph (3) a new sentence as follows: " The annual reports shall include a summary and analysis of the reports submitted to the Farm Credit Administration by the Federal land banks and Federal intermediate credit banks under section 4.19(b) of this Act relating to programs for serving young, beginning, and small farmers and ranchers.".

Sec. 508. Section 5.18 of the Farm Credit Act of 1971 // 12 USC 2251. // is amended by inserting "(a)" immediately after the section designation and adding at the end thereof the following new subsections (b) and (c):

"(b)(1) At least thirty days prior to publishing any proposed regulation in the Federal Register, the Farm Credit Administration shall transmit a copy of the regulation to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate. The Farm Credit Administration shall also transmit to such committees a copy of any final regulation prior to its publication in the Federal Register. Except as provided in paragraph (2) of this subsection, no final regulation of the Farm Credit Administration shall become effective prior to the expiration of thirty calendar days after it is published in the Federal Register during which either or both Houses of the Congress are in session.

"(2) In the case of an emergency, a final regulation of the Farm Credit Administration may become effective without regard to the last sentence of paragraph (1) of this subsection if the Farm Credit Administration notifies in writing the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate setting forth the reasons why it is necessary to make the regulation effective prior to the expiration of the thirty-day period.

"(c)(1) If there are any unresolved differences between the Farm Credit Administration and the Board of Governors of the Federal Reserve System as to whether any regulation implementing section 3.7(b) of this Act // 12 USC 2121. // or the other provisions of title III relating to the authority under section 3.7(b) conforms to national banking policies, objectives, and limitations, simultaneously with promulgation of any such regulation under this Act, and simultaneously with promulgation of any regulation implementing section 2.3 of this Act, the Farm Credit Administration shall transmit a copy thereof to the Secretary of the Senate and the Clerk of the House of Representatives. Except as provided in paragraph (2), the regulation shall not become effective if, within ninety calendar days of continuous session of Congress after the date of promulgation, both Houses of Congress adopt a concurrent resolution, the matter after the resolving clause of which is as follows: ' That Congress disapproves the regulation promulgated by the Farm Credit Administration dealing with the matter of

, which regulation was transmitted to Congress on

', the blank spaces therein being appropriately filled.

"(2) If at the end of sixty calendar days of continuous session of Congress after the date of promulgation of a regulation, no committee of either House of Congress has reported or been discharged from further consideration of a concurrent resolution disapproving the regulation, and neither House has adopted such a resolution, the regulation may go into effect immediately. If, within such sixty calendar days, such a committee has reported or been discharged from further consideration of such a resolution, or either House has adopted such a resolution, the regulation may go into effect not sooner than ninety calendar days of continuous session of Congress after its promulgation unless disapproved as provided in paragraph (1).

"(3) For the purposes of paragraphs (1) and (2) of this subsection--,

"(i) continuity of session is broken only by an adjournment of Congress sine die; and

"(ii) the days on which either House is not in session because of an adjournment of more than three days to a day certain are excluded in the computation of sixty and ninety calendar days of continuous session of Congress.

"(4) Congressional inaction on or rejection of a resolution of disapproval shall not be deemed an expression of approval of such regulation.".

Sec. 509. Title V of the Farm Credit Act of 1971 is amended by adding the following section at the end thereof:

" Sec. 5.30. General Accounting Office Audit: Report to Congress.--, // 12 USC 2260. //

"(a) The Comptroller General shall conduct an evaluation of the programs and activities authorized under the 1980 amendments to this Act, and shall make an interim report to the Congress no later than December 31, 1982, and a final report to the Congress no later than December 31, 1984. The Comptroller General shall include in such evaluation the effect that this Act, as amended, will have on agricultural credit services provided by the Farm Credit System, Federal agencies, and other entities. The Comptroller General may make such interim reports to the Congress on the programs and activities under these amendments as the Comptroller General deems necessary or as requested by Members of Congress.

"(b) For the purpose of conducting program evaluations required in subsection (a) of this section, the Comptroller General or his duly authorized representatives shall have access to and the right to examine all books, documents, papers, records, or other recorded information within the possession or control of the Federal land banks and Federal land bank associations, Federal intermediate credit banks and production credit associations and banks for cooperatives.".

Sec. 510. Paragraph (1) of section 1141b of title 12 of the United States Code is amended to read as follows:

"(1) shall maintain its principal office within the Washington, D.C.- Maryland-Virginia standard metropolitan statistical area, and such other offices in the United States as in its judgment are necessary".

Sec. 511. Section 3 of the Swine Health Protection Act (Public Law 96 - 468, approved October 17, 1980) // 7 USC 3802. // is amended by--,

(1) striking "and" at the end of clause (2);

(2) changing the period at the end of clause (3) to a semicolon and adding "and"; and

(3) inserting a new clause (4) reading as follows:

"(4) the term ' State' means the fifty States, the District of Columbia, Guam, Puerto Rico, the Virgin Islands of the United States, American Samoa, the Commonwealth of the Northern Mariana Islands, and the territories and possessions of the United States.".

Approved December 24, 1980.

LEGISLATIVE HISTORY:

HOUSE REPORT No. 96 - 1287 accompanying H.R. 7548 (Comm. on Agriculture).

SENATE REPORT No. 96 - 837 (Comm. on Agriculture, Nutrition, and Forestry).

CONGRESSIONAL RECORD, Vol. 126 (1980):

July 24, considered and passed Senate.

Nov. 19, H.R. 7548 considered and passed House; passage vacated and S. 1465, amended, passed in lieu.

Dec. 13, Senate agreed to House amendment.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 16, No. 52:

Dec. 24, Presidential statement.

PUBLIC LAW 96-591, 94 STAT. 3415, INLAND NAVIGATIONAL RULES ACT OF 1980

96th CONGRESS, H.R. 6671 DECEMBER 24, 1980
An Act To unify the rules for preventing collisions on the

inland waters of the United

States, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act // 33 USC 2001 // may be cited as the " Inland Navigational Rules Act of 1980".

Sec. 2. Inland Navigational Rules:

PART A-GENERAL RULE 1 Application

(a) These Rules apply to all vessels upon the inland waters of the United States, and to vessels of the United States on the Canadian waters of the Great Lakes to the extent that there is no conflict with Canadian law.

(b)(i) These Rules constitute special rules made by an appropriate authority within the meaning of Rule 1(b) of the International Regulations.

(ii) All vessels complying with the construction and equipment requirements of the International Regulations are considered to be in compliance with these Rules.

(c) Nothing in these Rules shall interfere with the operation of any special rules made by the Secretary of the Navy with respect to additional station or signal lights and shapes or whistle signals for ships of war and vessels proceeding under convoy, or by the Secretary with respect to additional station or signal lights and shapes for fishing vessels engaged in fishing as a fleet. These additional station or signal lights and shapes or whistle signals shall, so far as possible, be such that they cannot be mistaken for any light, shape, or signal authorized elsewhere under these Rules. Notice of such special rules shall be published in the Federal Register and, after the effective date specified in such notice, they shall have effect as if they were a part of these Rules.

(d) Vessel traffic service regulations may be in effect in certain areas.

(e) Whenever the Secretary determines that a vessel or class of vessels of special construction or purpose cannot comply fully with the provisions of any of these Rules with respect to the number, position, range, or arc of visibility of lights or shapes, as well as to the disposition and characteristics of sound-signaling appliances, without interfering with the special function of the vessel, the vessel shall comply with such other provisions in regard to the number, position, range, or arc of visibility of lights or shapes, as well as to the disposition and characteristics of sound-signaling appliances, as the Secretary shall have determined to be the closest possible compliance with these Rules. The Secretary may issue a certificate of alternative compliance for a vessel or class of vessels specifying the closest possible compliance with these Rules. The Secretary of the Navy shall make these determinations and issue certificates of alternative compliance for vessels of the Navy.

(f) The Secretary may accept a certificate of alternative compliance issued by a contracting party to the International Regulations if he determines that the alternative compliance standards of the contracting party are substantially the same as those of the United States.

RULE 2 Responsibility

(a) // 33 USC 2002. // Nothing in these Rules shall exonerate any vessel, or the owner, master, or crew thereof, from the consequences of any neglect to comply with these Rules or of the neglect of any precaution which may be required by the ordinary practice of seamen, or by the special circumstances of the case.

(b) In construing and complying with these Rules due regard shall be had to all dangers of navigation and collision and to any special circumstances, including the limitations of the vessels involved, which may make a departure from these Rules necessary to avoid immediate danger.

RULE 3 General Definitions

For the purpose of these Rules and this Act, // 33 USC 2003. // except where the context otherwise requires:

(a) The word "vessel" includes every description of water craft, including nondisplacement craft and seaplanes, used or capable of being used as a means of transportation on water;

(b) The term "power-driven vessel" means any vessel propelled by machinery;

(c) The term "sailing vessel" means any vessel under sail provided that propelling machinery, if fitted, is not being used;

(d) The term "vessel engaged in fishing" means any vessel fishing with nets, lines, trawls, or other fishing apparatus which restricts maneuverability, but does not include a vessel fishing with trolling lines or other fishing apparatus which do not restrict maneuverability;

(e) The word "seaplane" includes any aircraft designed to maneuver on the water;

(f) The term "vessel not under command" means a vessel which through some exceptional circumstance is unable to maneuver as required by these Rules and is therefore unable to keep out of the way of another vessel;

(g) The term "vessel restricted in her ability to maneuver" means a vessel which from the nature of her work is restricted in her ability to maneuver as required by these Rules and is therefore unable to keep out of the way of another vessel; vessels restricted in their ability to maneuver include, but are not limited to:

(i) a vessel engaged in laying, servicing, or picking up a navigation mark, submarine cable, or pipeline;

(ii) a vessel engaged in dredging, surveying, or underwater operations;

(iii) a vessel engaged in replenishment or transferring persons, provisions, or cargo while underway;

(iv) a vessel engaged in the launching or recovery of aircraft;

(v) a vessel engaged in minesweeping operations; and

(vi) a vessel engaged in a towing operation such as severely restricts the towing vessel and her tow in their ability to deviate from their course.

(h) The word "underway" means that a vessel is not at anchor, or made fast to the shore, or aground;

(i) The words "length" and "breadth" of a vessel mean her length overall and greatest breadth;

(j) Vessels shall be deemed to be in sight of one another only when one can be observed visually from the other;

(k) The term "restricted visibility" means any condition in which visibility is restricted by fog, mist, falling snow, heavy rainstorms, sandstorms, or any other similar causes;

(l) " Western Rivers" means the Mississippi River, its tributaries, South Pass, and Southwest Pass, to the navigational demarcation lines dividing the high seas from harbors, rivers, and other inland waters of the United States, and the Port Allen-Morgan City Alternate Route, and that part of the Atchafalaya River above its junction with the Port Allen-Morgan City Alternate Route including the Old River and the Red River;

(m) " Great Lakes" means the Great Lakes and their connecting and tributary waters including the Calumet River as far as the Thomas J. O' Brien Lock and Controlling Works (between mile 326 and 327), the Chicago River as far as the east side of the Ashland Avenue Bridge (between mile 321 and 322), and the Saint Lawrence River as far east as the lower exit of Saint Lambert Lock;

(n) " Secretary" means the Secretary of the department in which the Coast Guard is operating;

(o) " Inland Waters" means the navigable waters of the United States shoreward of the navigational demarcation lines dividing the high seas from harbors, rivers, and other inland waters of the United States and the waters of the Great Lakes on the United States side of the International Boundary;

(p) " Inland Rules" or " Rules" mean the Inland Navigational Rules and the annexes thereto, which govern the conduct of vessels and specify the lights, shapes, and sound signals that apply on inland waters; and

(q) " International Regulations" means the International Regulations for Preventing Collisions at Sea, 1972, // 33 USC 1602 // including annexes currently in force for the United States.

PART B-STEERING AND SAILING RULES Subpart I-Conduct of Vessels in Any Condition of

Visibility

RULE 4 Application

Rules in this subpart // 33 USC 2004. // apply in any condition of visibility.

RULE 5 Look-out

Every vessel shall at all times maintain a proper look-out // 33 USC 2005. // by sight and hearing as well as by all available means appropriate in the prevailing circumstances and conditions so as to make a full appraisal of the situation and of the risk of collision.

RULE 6 Safe Speed

Every vessel shall at all times proceed at a safe speed // 33 USC 2006. // so that she can take proper and effective action to avoid collision and be stopped within a distance appropriate to the prevailing circumstances and conditions.

In determining a safe speed the following factors shall be among those taken into account:

(a) By all vessels:

(i) the state of visibility;

(ii) the traffic density including concentration of fishing vessels or any other vessels;

(iii) the maneuverability of the vessel with special reference to stopping distance and turning ability in the prevailing conditions;

(iv) at night the presence of background light such as from shores lights or from back scatter of her own lights;

(v) the state of wind, sea, and current, and the proximity of navigational hazards;

(vi) the draft in relation to the available depth of water.

(b) Additionally, by vessels with operational radar:

(i) the characteristics, efficiency and limitations of the radar equipment;

(ii) any constraints imposed by the radar range scale in use;

(iii) the effect on radar detection of the sea state, weather, and other sources of interference;

(iv) the possibility that small vessels, ice and other floating objects may not be detected by radar at an adequate range;

(v) the number, location, and movement of vessels detected by radar; and

(vi) the more exact assessment of the visibility that may be possible when radar is used to determine the range of vessels or other objects in the vicinity.

RULE 7 Risk of Collision

(a) Every vessel shall use all available means appropriate to the prevailing circumstances and conditions to determine if risk of collision // 33 USC 2007. // exists. If there is any doubt such risk shall be deemed to exist.

(b) Proper use shall be made of radar equipment if fitted and operational, including long-range scanning to obtain early warning of risk of collision and radar plotting or equivalent systematic observation of detected objects.

(c) Assumptions shall not be made on the basis of scanty information, especially scanty radar information.

(d) In determining if risk of collision exists the following considerations shall be among those taken into account:

(i) such risk shall be deemed to exist if the compass bearing of an approaching vessel does not appreciably change; and

(ii) such risk may sometimes exist even when an appreciable bearing change is evident, particularly when approaching a very large vessel or a tow or when approaching a vessel at close range.

RULE 8 Action To Avoid Collision

(a) Any action taken to avoid collision // 33 USC 2008. // shall, if the circumstances of the case admit, be positive, made in ample time and with due regard to the observance of good seamanship.

(b) Any alteration of course or speed to avoid collision shall, if the circumstances of the case admit, be large enough to be readily apparent to another vessel observing visually or by radar; a succession of small alterations of course or speed should be avoided.

(c) If there is sufficient sea room, alteration of course alone may be the most effective action to avoid a close-quarters situation provided that it is made in good time, is substantial and does not result in another close-quarters situation.

(d) Action taken to avoid collision with another vessel shall be such as to result in passing at a safe distance. The effectiveness of the action shall be carefully checked until the other vessel is finally past and clear.

(e) If necessary to avoid collision or allow more time to assess the situation, a vessel shall slacken her speed or take all way off by stopping or reversing her means of propulsion.

RULE 9 Narrow Channels

(a)(i) A vessel proceeding along the course of a narrow channel // 33 USC 2009. // or fairway shall keep as near to the outer limit of the channel or fairway which lies on her starboard side as is safe and practicable.

(ii) Notwithstanding paragraph (a)(i) and Rule 14(a), a power-driven vessel operating in narrow channels or fairways on the Great Lakes, Western Rivers, or waters specified by the Secretary, and proceeding downbound with a following current shall have the right-of-way over an upbound vessel, shall propose the manner and place of passage, and shall initiate the maneuvering signals prescribed by Rule 34(a)(i), as appropriate. The vessel proceeding upbound against the current shall hold as necessary to permit safe passing.

(b) A vessel of less than 20 meters in length or a sailing vessel shall not impede the passage of a vessel that can safely navigate only within a narrow channel or fairway.

(c) A vessel engaged in fishing shall not impede the passage of any other vessel navigating within a narrow channel or fairway.

(d) A vessel shall not cross a narrow channel or fairway if such crossing impedes the passage of a vessel which can safely navigate only within that channel or fairway. The latter vessel shall use the danger signal prescribed in Rule 34(d) if in doubt as to the intention of the crossing vessel.

(e)(i) In a narrow channel or fairway when overtaking, the vessel intending to overtake shall indicate her intention by sounding the appropriate signal prescribed in Rule 34(c) and take steps to permit safe passing. The overtaken vessel, if in agreement, shall sound the same signal. If in doubt she shall sound the danger signal prescribed in Rule 34(d).

(ii) This Rule does not relieve the overtaking vessel of her obligation under Rule 13.

(f) A vessel nearing a bend or an area of a narrow channel or fairway where other vessels may be obscured by an intervening obstruction shall navigate with particular alertness and caution and shall sound the appropriate signal prescribed in Rule 34(e).

(g) Every vessel shall, if the circumstances of the case admit, avoid anchoring in a narrow channel.

RULE 10 Vessel Traffic Services

Each vessel required by regulation to participate in a vessel traffic service // 33 USC 2010. // shall comply with the applicable regulations.

Subpart II- Conduct of Vessels in Sight of One

Another

RULE 11 Application

Rules in this subpart // 33 USC 2011. // apply to vessels in sight of one another.

RULE 12 Sailing Vessels

(a) When two sailing vessels // 33 USC 2012. // are approaching one another, so as to involve risk of collision, one of them shall keep out of the way of the other as follows:

(i) when each has the wind on a different side, the vessel which has the wind on the port side shall keep out of the way of the other;

(ii) when both have the wind on the same side, the vessel which is to windward shall keep out of the way of the vessel which is to leeward; and

(iii) if a vessel with the wind on the port side sees a vessel to windward and cannot determine with certainty whether the other vessel has the wind on the port or on the starboard side, she shall keep out of the way of the other.

(b) For the purpose of this Rule the windward side shall be deemed to be the side opposite to that on which the mainsail is carried or, in the case of a square-rigged vessel, the side opposite to that on which the largest fore-and-aft sail is carried.

RULE 13 Overtaking

(a) Notwithstanding anything contained in Rules 4 through 18, any vessel overtaking // 33 USC 2013. // any other shall keep out of the way of the vessel being overtaken.

(b) A vessel shall be deemed to be overtaking when coming up with another vessel from a direction more than 22.5 degrees abaft her beam; that is, in such a position with reference to the vessel she is overtaking, that at night she would be able to see only the sternlight of that vessel but neither of her sidelights.

(c) When a vessel is in any doubt as to whether she is overtaking another, she shall assume that this is the case and act accordingly.

(d) Any subsequent alteration of the bearing between the two vessels shall not make the overtaking vessel a crossing vessel within the meaning of these Rules or relieve her of the duty of keeping clear of the overtaken vessel until she is finally past and clear.

RULE 14 Head-on Situation

(a) When two power-driven vessels are meeting on reciprocal or nearly reciprocal courses so as to involve risk of collision // 33 USC 2014. // each shall alter her course to starboard so that each shall pass on the port side of the other.

(b) Such a situation shall be deemed to exist when a vessel sees the other ahead or nearly ahead and by night she could see the masthead lights of the other in a line or nearly in a line or both sidelights and by day she observes the corresponding aspect of the other vessel.

(c) When a vessel is in any doubt as to whether such a situation exists she shall assume that it does exist and act accordingly.

RULE 15 Crossing Situation

(a) When two power-driven vessels are crossing // 33 USC 2015. // so as to involve risk of collision, the vessel which has the other on her starboard side shall keep out of the way and shall, if the circumstances of the case admit, avoid crossing ahead of the other vessel.

(b) Notwithstanding paragraph (a), on the Great Lakes, Western Rivers, or water specified by the Secretary, a vessel crossing a river shall keep out of the way of a power-driven vessel ascending or descending the river.

RULE 16 Action by Give-Way Vessel

Every vessel which is directed to keep out of the way of another vessel shall, // 33 USC 2016. // so far as possible, take early and substantial action to keep well clear.

RULE 17 Action by Stand-on Vessel

(a)(i) Where one of two vessels is to keep out of the way, // 33 USC 2017. // the other shall keep her course and speed.

(ii) The latter vessel may, however, take action to avoid collision by her maneuver alone, as soon as it becomes apparent to her that the vessel required to keep out of the way is not taking appropriate action in compliance with these Rules.

(b) When, from any cause, the vessel required to keep her course and speed finds herself so close that collision cannot be avoided by the action of the give-way vessel alone, she shall take such action as will best aid to avoid collision.

(c) A power-driven vessel which takes action in a crossing situation in accordance with subparagraph (a)(ii) of this Rule to avoid collision with another power-driven vessel shall, if the circumstances of the case admit, not alter course to port for a vessel on her own port side.

(d) This Rule does not relieve the give-way vessel of her obligation to keep out of the way.

RULE 18 Responsibilities Between Vessels

Except where Rules 9, 10, and 13 // 33 USC 2018. // otherwise require:

(a) A power-driven vessel underway shall keep out of the way of:

(i) a vessel not under command;

(ii) a vessel restricted in her ability to maneuver;

(iii) a vessel engaged in fishing; and

(iv) a sailing vessel.

(b) A sailing vessel underway shall keep out of the way of:

(i) a vessel not under command;

(ii) a vessel restricted in her ability to maneuver; and

(iii) a vessel engaged in fishing.

(c) A vessel engaged in fishing when underway shall, so far as possible, keep out of the way of:

(i) a vessel not under command; and

(ii) a vessel restricted in her ability to maneuver.

(d) A seaplane on the water shall, in general, keep well clear of all vessels and avoid impeding their navigation. In circumstances, however, where risk of collision exists, she shall comply with the Rules of this Part.

Subpart III- Conduct of Vessels in Restricted

Visibility

RULE 19 Conduct of Vessels in Restricted Visibility

(a) This Rule // 33 USC 2019. // applies to vessels not in sight of one another when navigating in or near an area of restricted visibility.

(b) Every vessel shall proceed at a safe speed adapted to the prevailing circumstances and conditions of restricted visibility. A power-driven vessel shall have her engines ready for immediate maneuver.

(c) Every vessel shall have due regard to the prevailing circumstances and conditions of restricted visibility when complying with Rules 4 through 10.

(d) A vessel which detects by radar alone the presence of another vessel shall determine if a close-quarters situation is developing or risk of collision exists. If so, she shall take avoiding action in ample time, provided that when such action consists of an alteration of course, so far as possible the following shall be avoided:

(i) an alteration of course to port for a vessel forward of the beam, other than for a vessel being overtaken; and

(ii) an alteration of course toward a vessel abeam or abaft the beam.

(e) Except where it has been determined that a risk of collision does not exist, every vessel which hears apparently forward of her beam the fog signal of another vessel, or which cannot avoid a close-quarters situation with another vessel forward of her beam, shall reduce her speed to the minimum at which she can be kept on course. She shall if necessary take all her way off and, in any event, navigate with extreme caution until danger of collision is over.

PART C-LIGHTS AND SHAPES RULE 20 Application

(a) Rules in this Part // 33 USC 2020. // shall be complied with in all weathers.

(b) The Rules concerning lights shall be complied with from sunset to sunrise, and during such times no other lights shall be exhibited, except such lights as cannot be mistaken for the lights specified in these Rules or do not impair their visibility or distinctive character, or interfere with the keeping of a proper lookout.

(c) The lights prescribed by these Rules shall, if carried, also be exhibited from sunrise to sunset in restricted visibility and may be exhibited in all other circumstances when it is deemed necessary.

(d) The Rules concerning shapes shall be complied with by day.

(e) The lights and shapes specified in these Rules shall comply with the provisions of Annex I of these Rules.

RULE 21 Definitions

(a) " Masthead light" // 33 USC 2021. // means a white light placed over the fore and aft centerline of the vessel showing an unbroken light over an arc of the horizon of 225 degrees and so fixed as to show the light from right ahead to 22.5 degrees abaft the beam on either side of the vessel, except that on a vessel of less than 12 meters in length the masthead light shall be placed as nearly as practicable to the fore and aft centerline of the vessel.

(b) " Sidelights" mean a green light on the starboard side and a red light on the port side each showing an unbroken light over an arc of the horizon of 112.5 degrees and so fixed as to show the light from right ahead to 22.5 degrees abaft the beam on its respective side. On a vessel of less than 20 meters in length the side lights may be combined in one lantern carried on the fore and aft centerline of the vessel, except that on a vessel of less than 12 meters in length the sidelights when combined in one lantern shall be placed as nearly as practicable to the fore and aft centerline of the vessel.

(c) " Sternlight" means a white light placed as nearly as practicable at the stern showing an unbroken light over an arc of the horizon of 135 degrees and so fixed as to show the light 67.5 degrees from right aft on each side of the vessel.

(d) " Towing light" means a yellow light having the same characteristics as the "sternlight" defined in paragraph (c) of this Rule.

(e) " All-round light" means a light showing an unbroken light over an arc of the horizon of 360 degrees.

(f) " Flashing light" means a light flashing at regular intervals at a frequency of 120 flashes or more per minute.

(g) " Special flashing light" means a yellow light flashing at regular intervals at a frequency of 50 to 70 flashes per minute, placed as far forward and as nearly as practicable on the fore and aft centerline of the tow and showing an unbroken light over an arc of the horizon of not less than 180 degrees nor more than 225 degrees and so fixed as to show the light from right ahead to abeam and no more than 22.5 degrees abaft the beam on either side of the vessel.

RULE 22 Visibility of Lights

The lights prescribed in these Rules // 33 USC 2022. // shall have an intensity as specified in Annex I to these Rules, so as to be visible at the following minimum ranges:

(a) In a vessel of 50 meters or more in length:

a masthead light, 6 miles;

a sidelight, 3 miles;

a sternlight, 3 miles;

a towing light, 3 miles;

a white, red, green or yellow all-round light, 3 miles; and

a special flashing light, 2 miles.

(b) In a vessel of 12 meters or more in length but less than 50 meters in length:

a masthead light, 5 miles; except that where the length of the vessel is less than 20 meters, 3 miles;

a sidelight, 2 miles;

a sternlight, 2 miles;

a towing light, 2 miles;

a white, red, green or yellow all-round light, 2 miles; and

a special flashing light, 2 miles.

(c) In a vessel of less than 12 meters in length:

a masthead light, 2 miles;

a sidelight, 1 mile;

a sternlight, 2 miles;

a towing light, 2 miles;

a white, red, green or yellow all-round light, 2 miles; and

a special flashing light, 2 miles.

(d) In an inconspicuous, partly submerged vessel or object being towed:

a white all-round light, 3 miles.

RULE 23 Power-Driven Vessels Underway

(a) A power-driven vessel underway // 33 USC 2023. // shall exhibit:

(i) a masthead light forward; except that a vessel of less than 20 meters in length need not exhibit this light forward of amidships but shall exhibit it as far forward as is practicable;

(ii) a second masthead light abaft of and higher than the forward one; except that a vessel of less than 50 meters in length shall not be obliged to exhibit such light but may do so:

(iii) sidelights; and

(iv) a sternlight.

(b) An air-cushion vessel when operating in the nondisplacement mode shall, in addition to the lights prescribed in paragraph (a) of this Rule, exhibit an all-round flashing yellow light where it can best be seen.

(c) A power-driven vessel of less than 12 meters in length may, in lieu of the lights prescribed in paragraph (a) of this Rule, exhibit an all-round white light and sidelights.

(d) A power-driven vessel when operating on the Great Lakes may carry an all-round white light in lieu of the second masthead light and sternlight prescribed in paragraph (a) of this Rule. The light shall be carried in the position of the second masthead light and be visible at the same minimum range.

RULE 24 Towing and Pushing

(a) A power-driven vessel when towing astern // 33 USC 2024. // shall exhibit:

(i) instead of the light prescribed either in Rule 23 (a)(i) or 23(a)(ii), two masthead lights in a vertical line. When the length of the tow, measuring from the stern of the towing vessel to the after end of the tow exceeds 200 meters, three such lights in a vertical line;

(ii) sidelights;

(iii) a sternlight;

(iv) a towing light in a vertical line above the sternlight; and

(v) when the length of the tow exceeds 200 meters, a diamond shape where it can best be seen.

(b) When a pushing vessel and a vessel being pushed ahead are rigidly connected in a composite unit they shall be regarded as a power-driven vessel and exhibit the lights prescribed in Rule 23.

(c) A power-driven vessel when pushing ahead or towing alongside, except as required by paragraphs (b) and (i) of this Rule, shall exhibit:

(i) instead of the light prescribed either in Rule 23(a)(i) or 23(a)(ii), two masthead lights in a vertical line;

(ii) sidelights; and

(iii) two towing lights in a vertical line.

(d) A power-driven vessel to which paragraphs (a) or (c) of this Rule apply shall also comply with Rule 23(a)(i) and 23(a)(ii).

(e) A vessel or object other than those referred to in paragraph (g) of this Rule being towed shall exhibit:

(i) sidelights;

(ii) a sternlight; and

(iii) when the length of the tow exceeds 200 meters, a diamond shape where it can best be seen.

(f) Provided that any number of vessels being towed alongside or pushed in a group shall be lighted as one vessel:

(i) a vessel being pushed ahead, not being part of a composite unit, shall exhibit at the forward end sidelights, and a special flashing light; and

(ii) a vessel being towed alongside shall exhibit a sternlight and at the forward end sidelights.

(g) An inconspicuous, partly submerged vessel or object being towed shall exhibit:

(i) if it is less than 25 meters in breadth, one all-round white light at or near each end;

(ii) if it is 25 meters or more in breadth, four all-round white lights to mark its length and breadth;

(iii) if it exceeds 100 meters in length, additional all-round white lights between the lights prescribed in subparagraphs (i) and (ii) so that the distance between the lights shall not exceed 100 meters: Provided, That any vessels or objects being towed alongside each other shall be lighted as one vessel or object;

(iv) a diamond shape at or near the aftermost extremity of the last vessel or object being towed; and

(v) the towing vessel may direct a searchlight in the direction of the tow to indicate its presence to an approaching vessel.

(h) Where from any sufficient cause it is impracticable for a vessel or object being towed to exhibit the lights prescribed in paragraph (e) or (g) of this Rule, all possible measures shall be taken to light the vessel or object towed or at least to indicate the presence of the unlighted vessel or object.

(i) Notwithstanding paragraph (c), on the Western Rivers and on waters specified by the Secretary, a power-driven vessel when pushing ahead or towing alongside, except as paragraph (b) applies, shall exhibit:

(i) sidelights; and

(ii) two towing lights in a vertical line.

(j) Where from any sufficient cause it is impracticable for a vessel not normally engaged in towing operations to display the lights prescribed by paragraph (a), (c) or (i) of this Rule, such vessel shall not be required to exhibit those lights when engaged in towing another vessel in distress or otherwise in need of assistance. All possible measures shall be taken to indicate the nature of the relationship between the towing vessel and the vessel being assisted. The searchlight authorized by Rule 36 may be used to illuminate the tow.

RULE 25 Sailing Vessels Underway and Vessels Under Oars

(a) A sailing vessel underway // 33 USC 2025. // shall exhibit:

(i) sidelights; and

(ii) a sternlight.

(b) In a sailing vessel of less than 20 meters in length the lights prescribed in paragraph (a) of this Rule may be combined in one lantern carried at or near the top of the mast where it can best be seen.

(c) A sailing vessel underway may, in addition to the lights prescribed in paragraph (a) of this Rule, exhibit at or near the top of the mast, where they can best be seen, two all-round lights in a vertical line, the upper being red and the lower green, but these lights shall not be exhibited in conjunction with the combined lantern permitted by paragraph (b) of this Rule.

(d)(i) A sailing vessel of less than 7 meters in length shall, if practicable, exhibit the lights prescribed in paragraph (a) or (b) of this Rule, but if she does not, she shall have ready at hand an electric torch or lighted lantern showing a white light which shall be exhibited in sufficient time to prevent collision.

(ii) A vessel under oars may exhibit the lights prescribed in this Rule for sailing vessels, but if she does not, she shall have ready at hand an electric torch or lighted lantern showing a white light which shall be exhibited in sufficient time to prevent collision.

(e) A vessel proceeding under sail when also being propelled by machinery shall exhibit forward where it can best be seen a conical shape, apex downward. A vessel of less than 12 meters in length is not required to exhibit this shape, but may do so.

RULE 26 Fishing Vessels

(a) A vessel engaged in fishing, // 33 USC 2026. // whether underway or at anchor, shall exhibit only the lights and shapes prescribed in this Rule.

(b) A vessel when engaged in trawling, by which is meant the dragging through the water of a dredge net or other apparatus used as a fishing appliance, shall exhibit:

(i) two all-round lights in a vertical line, the upper being green and the lower white, or a shape consisting of two cones with their apexes together in a vertical line one above the other; a vessel of less than 20 meters in length may instead of this shape exhibit a basket;

(ii) a masthead light abaft of and higher than the all-round green light; a vessel of less than 50 meters in length shall not be obliged to exhibit such a light but may do so; and

(iii) when making way through the water, in addition to the lights prescribed in this paragraph, sidelights and a sternlight.

(c) A vessel engaged in fishing, other than trawling, shall exhibit:

(i) two all-round lights in a vertical line, the upper being red and the lower white, or a shape consisting of two cones with apexes together in a vertical line one above the other; a vessel of less than 20 meters in length may instead of this shape exhibit a basket;

(ii) when there is outlying gear extending more than 150 meters horizontally from the vessel, an all-round white light or a cone apex upward in the direction of the gear; and

(iii) when making way through the water, in addition to the lights prescribed in this paragraph, sidelights and a sternlight.

(d) A vessel engaged in fishing in close proximity to other vessels engaged in fishing may exhibit the additional signals described in Annex II to these Rules.

(e) A vessel when not engaged in fishing shall not exhibit the lights or shapes prescribed in this Rule, but only those prescribed for a vessel of her length.

RULE 27 Vessels Not Under Command or Restricted in Their

Ability To

Maneuver

// 33 USC 2027. //

(a) A vessel not under command shall exhibit:

(i) two all-round red lights in a vertical line where they can best be seen;

(ii) two balls or similar shapes in a vertical line where they can best be seen; and

(iii) when making way through the water, in addition to the lights prescribed in this paragraph, sidelights and a sternlight.

(b) A vessel restricted in her ability to maneuver, except a vessel engaged in minesweeping operations, shall exhibit:

(i) three all-round lights in a vertical line where they can best be seen. The highest and lowest of these lights shall be red and the middle light shall be white;

(ii) three shapes in a vertical line where they can best be seen. The highest and lowest of these shapes shall be balls and the middle one a diamond;

(iii) when making way through the water, masthead lights, sidelights and a sternlight, in addition to the lights prescribed in subparagraph (b)(i); and

(iv) when at anchor, in addition to the lights or shapes prescribed in subparagraphs (b) (i) and (ii), the light, lights or shapes prescribed in Rule 30.

(c) A vessel engaged in a towing operation which severely restricts the towing vessel and her tow in their ability to deviate from their course shall, in addition to the lights or shapes prescribed in subparagraphs (b) (i) and (ii) of this Rule, exhibit the lights or shape prescribed in Rule 24.

(d) A vessel engaged in dredging or underwater operations, when restricted in her ability to maneuver, shall exhibit the lights and shapes prescribed in subparagraphs (b) (i), (ii), and (iii) of this Rule and shall in addition, when an obstruction exists, exhibit:

(i) two all-round red lights or two balls in a vertical line to indicate the side on which the obstruction exists;

(ii) two all-round green lights or two diamonds in a vertical line to indicate the side on which another vessel may pass; and

(iii) when at anchor, the lights or shape prescribed by this paragraph, instead of the lights or shapes prescribed in Rule 30 for anchored vessels.

(e) Whenever the size of a vessel engaged in diving operations makes it impracticable to exhibit all lights and shapes prescribed in paragraph (d) of this Rule, the following shall instead be exhibited:

(i) Three all-round lights in a vertical line where they can best be seen. The highest and lowest of these lights shall be red and the middle light shall be white.

(ii) A rigid replica of the international Code flag " A" not less than 1 meter in height. Measures shall be taken to insure its all-round visibility.

(f) A vessel engaged in minesweeping operations shall, in addition to the lights prescribed for a power-driven vessel in Rule 23, exhibit three all-round green lights or three balls. One of these lights or shapes shall be exhibited near the foremast head and one at each end of the fore yard. These lights or shapes indicate that it is dangerous for another vessel to approach closer than 1,000 meters astern or 500 meters on either side of the minesweeper.

(g) A vessel of less than 12 meters in length, except when engaged in diving operations, is not required to exhibit the lights or shapes prescribed in this Rule.

(h) The signals prescribed in this Rule are not signals of vessels in distress and requiring assistance. Such signals are contained in Annex IV to these Rules.

RULE 28

// 33 USC 2028. //

(Reserved) RULE 29 Pilot Vessels

(a) A vessel engaged on pilotage // 33 USC 2029. // duty shall exhibit:

(i) at or near the masthead, two all-round lights in a vertical line, the upper being white and the lower red;

(ii) when underway, in addition, sidelights and a sternlight; and

(iii) when at anchor, in addition to the lights prescribed in subparagraph (i), the anchor light, lights, or shape prescribed in Rule 30 for anchored vessels.

(b) A pilot vessel when not engaged on pilotage duty shall exhibit the lights or shapes prescribed for a vessel of her length.

RULE 30 Anchored Vessels and Vessels Aground

(a) A vessel at anchor // 33 USC 2030. // shall exhibit where it can best be seen:

(i) in the fore part, an all-round white light or one ball; and

(ii) at or near the stern and at a lower level than the light prescribed in subparagraph (i), an all-round white light.

(b) A vessel of less than 50 meters in length may exhibit an all-round white light where it can best be seen instead of the lights prescribed in paragraph (a) of this Rule.

(c) A vessel at anchor may, and a vessel of 100 meters or more in length shall, also use the available working or equivalent lights to illuminate her decks.

(d) A vessel aground shall exhibit the lights prescribed in paragraph (a) or (b) of this Rule and in addition, if practicable, where they can best be seen:

(i) two all-round red lights in a vertical line; and

(ii) three balls in a vertical line.

(e) A vessel of less than 7 meters in length, when at anchor, not in or near a narrow channel, fairway, anchorage, or where other vessels normally navigate, shall not be required to exhibit the lights or shape prescribed in paragraphs (a) and (b) of this Rule.

(f) A vessel of less than 12 meters in length when aground shall not be required to exhibit the lights or shapes prescribed in subparagraphs (d) (i) and (ii) of this Rule.

(g) A vessel of less than 20 meters in length, when at anchor in a special anchorage area designated by the Secretary, shall not be required to exhibit the anchor lights and shapes required by this Rule.

RULE 31 Seaplanes

Where it is impracticable for a seaplane // 33 USC 2031. // to exhibit lights and shapes of the characteristics or in the positions prescribed in the Rules of this Part she shall exhibit lights and shapes as closely similar in characteristics and position as is possible.

PART D-SOUND AND LIGHT SIGNALS RULE 32 Definitions

(a) The word "whistle" // 33 USC 2032. // means any sound signaling appliance capable of producing the prescribed blasts and which complies with specifications in Annex III to these Rules.

(b) The term "short blast" means a blast of about 1 second's duration.

(c) The term "prolonged blast" means a blast of from 4 to 6 seconds' duration.

RULE 33 Equipment for Sound Signals

(a) A vessel of 12 meters or more in length shall be provided with a whistle and a bell // 33 USC 2033. // and a vessel of 100 meters or more in length shall, in addition, be provided with a gong, the tone and sound of which cannot be confused with that of the bell. The whistle, bell and gong shall comply with the specifications in Annex III to these Rules. The bell or gong or both may be replaced by other equipment having the same respective sound characteristics, provided that manual sounding of the prescribed signals shall always be possible.

(b) A vessel of less than 12 meters in length shall not be obliged to carry the sound signaling appliances prescribed in paragraph (a) of this Rule but if she does not, she shall be provided with some other means of making an efficient sound signal.

RULE 34 Maneuvering and Warning Signals

(a) When power-driven vessels are in sight of one another and meeting or crossing at a distance within half a mile of each other, each vessel underway, when maneuvering as authorized or required by these Rules: // 33 USC 2034. //

(i) shall indicate that maneuver by the following signals on her whistle: one short blast to mean " I intend to leave you on my port side"; two short blasts to mean " I intend to leave you on my starboard side"; and three short blasts to mean " I am operating astern propulsion".

(ii) upon hearing the one or two blast signal of the other shall, if in agreement, sound the same whistle signal and take the steps necessary to effect a safe passing. If, however, from any cause, the vessel doubts the safety of the proposed maneuver, she shall sound the danger signal specified in paragraph (d) of this Rule and each vessel shall take appropriate precautionary action until a safe passing agreement is made.

(b) A vessel may supplement the whistle signals prescribed in paragraph (a) of this Rule by light signals:

(i) These signals shall have the following significance: one flash to mean " I intend to leave you on my port side"; two flashes to mean " I intend to leave you on my starboard side"; three flashes to mean " I am operating astern propulsion";

(ii) The duration of each flash shall be about 1 second; and

(iii) The light used for this signal shall, if fitted, be one all-round white or yellow light, visible at a minimum range of 2 miles, synchronized with the whistle, and shall comply with the provisions of Annex I to these Rules.

(c) When in sight of one another:

(i) a power-driven vessel intending to overtake another power-driven vessel shall indicate her intention by the following signals on her whistle: one short blast to mean " I intend to overtake you on your starboard side"; two short blasts to mean " I intend to overtake you on your port side"; and

(ii) the power-driven vessel about to be overtaken shall, if in agreement, sound a similar sound signal. If in doubt she shall sound the danger signal prescribed in paragraph (d).

(d) When vessels in sight of one another are approaching each other and from any cause either vessel fails to understand the intentions or actions of the other, or is in doubt whether sufficient action is being taken by the other to avoid collision, the vessel in doubt shall immediately indicate such doubt by giving at least five short and rapid blasts on the whistle. This signal may be supplemented by a light signal of at least five short and rapid flashes.

(e) A vessel nearing a bend or an area of a channel or fairway where other vessels may be obscured by an intervening obstruction shall sound one prolonged blast. This signal shall be answered with a prolonged blast by any approaching vessel that may be within hearing around the bend or behind the intervening obstruction.

(f) If whistles are fitted on a vessel at a distance apart of more than 100 meters, one whistle only shall be used for giving maneuvering and warning signals.

(g) When a power-driven vessel is leaving a dock or berth, she shall sound one prolonged blast.

(h) A vessel that reaches agreement with another vessel in a meeting, crossing, or overtaking situation by using the radiotelephone as prescribed by the Bridge-to-Bridge Radiotelephone Act (85 Stat. 165; 33 U.S.C. 1207), is not obliged to sound the whistle signals prescribed by this Rule, but may do so. If agreement is not reached, then whistle signals shall be exchanged in a timely manner and shall prevail.

RULE 35 Sound Signals in Restricted Visibility

In or near an area of restricted visibility, // 33 USC 2035. // whether by day or night, the signals prescribed in this Rule shall be used as follows:

(a) A power-driven vessel making way through the water shall sound at intervals of not more than 2 minutes one prolonged blast.

(b) A power-driven vessel underway but stopped and making no way through the water shall sound at intervals of not more than 2 minutes two prolonged blasts in succession with an interval of about 2 seconds between them.

(c) A vessel not under command; a vessel restricted in her ability to maneuver, whether underway or at anchor; a sailing vessel; a vessel engaged in fishing, whether underway or at anchor; and a vessel engaged in towing or pushing another vessel shall, instead of the signals prescribed in paragraphs (a) or (b) of this Rule, sound at intervals of not more than 2 minutes, three blasts in succession; namely, one prolonged followed by two short blasts.

(d) A vessel towed or if more than one vessel is towed the last vessel of the tow, if manned, shall at intervals of not more than 2 minutes sound four blasts in succession; namely, one prolonged followed by three short blasts. When practicable, this signal shall be made immediately after the signal made by the towing vessel.

(e) When a pushing vessel and a vessel being pushed ahead are rigidly connected in a composite unit they shall be regarded as a power-driven vessel and shall give the signals prescribed in paragraphs (a) or (b) of this Rule.

(f) A vessel at anchor shall at intervals of not more than 1 minute ring the bell rapidly for about 5 seconds. In a vessel of 100 meters or more in length the bell shall be sounded in the forepart of the vessel and immediately after the ringing of the bell the gong shall be sounded rapidly for about 5 seconds in the after part of the vessel. A vessel at anchor may in addition sound three blasts in succession; namely, one short, one prolonged and one short blast, to give warning of her position and of the possibility of collision to an approaching vessel.

(g) A vessel aground shall give the bell signal and if required the gong signal prescribed in paragraph (f) of this Rule and shall, in addition, give three separate and distinct strokes on the bell immediately before and after the rapid ringing of the bell. A vessel aground may in addition sound an appropriate whistle signal.

(h) A vessel of less than 12 meters in length shall not be obliged to give the above-mentioned signals but, if she does not, shall make some other efficient sound signal at intervals of not more than 2 minutes.

(i) A pilot vessel when engaged on pilotage duty may in addition to the signals prescribed in paragraphs (a), (b) or (f) of this Rule sound an identity signal consisting of four short blasts.

(j) The following vessels shall not be required to sound signals as prescribed in paragraph (f) of this Rule when anchored in a special anchorage area designated by the Secretary:

(i) a vessel of less than 20 meters in length; and

(ii) a barge, canal boat, scow, or other nondescript craft.

RULE 36 Signals To Attract Attention

If necessary to attract the attention // 33 USC 2036. // of another vessel, any vessel may make light or sound signals that cannot be mistaken for any signal authorized elsewhere in these Rules, or may direct the beam of her searchlight in the direction of the danger, in such a way as not to embarrass any vessel.

RULE 37 Distress Signals

When a vessel is in distress // 33 USC 2037. // and requires assistance she shall use or exhibit the signals described in Annex IV to these Rules.

PART E-EXEMPTIONS RULE 38 Exemptions

Any vessel or class of vessels, the keel of which is laid or which is at a corresponding stage of construction before the date of enactment of this Act, // 33 USC 2038. // provided that she complies with the requirements of--,

(a) The Act of June 7, 1897 (30 Stat. 96), as amended (33 U.S.C.154 - 232) for vessels navigating the waters subject to that statute;

(b) Section 4233 of the Revised Statutes (33 U.S.C. 301 - 356) for vessels navigating the waters subject to that statute;

(c) The Act of February 8, 1895 (28 Stat. 645), as amended (33 U.S. C. 241 - 295) for vessels navigating the waters subject to that statute; or

(d) Sections 3, 4, and 5 of the Act of April 25, 1940 (54 Stat. 163), as amended (46 U.S.C. 526 b, c, and d) for motorboats navigating the waters subject to that statute; shall be exempted from compliance with the technical Annexes to these Rules as follows:

(i) the installation of lights with ranges prescribed in Rule 22, until 4 years after the effective date of these Rules, except that vessels of less than 20 meters in length are permanently exempt;

(ii) the installation of lights with color specifications as prescribed in Annex I to these Rules, until 4 years after the effective date of these Rules, except that vessels of less than 20 meters in length are permanently exempt;

(iii) the repositioning of lights as a result of conversion to metric units and rounding off measurement figures, are permanently exempt; and

(iv) the horizontal repositioning of masthead lights prescribed by Annex I to these Rules:

(1) on vessels of less than 150 meters in length,

permanent

exemption.

(2) on vessels of 150 meters or more in length, until 9

years

after the effective date of these Rules.

(v) the restructuring or repositioning of all lights to meet the prescriptions of Annex I to these Rules, until 9 years after the effective date of these Rules;

(vi) power-driven vessels of 12 meters or more but less than 20 meters in length are permanently exempt from the provisions of Rule 23(a)(i) and 23(a)(iv) provided that, in place of these lights, the vessel exhibits a white light aft visible all round the horizon; and

(vii) the requirements for sound signal appliances prescribed in Annex III to these Rules, until 9 years after the effective date of these Rules.

Sec. 3. The Secretary may issue regulations necessary to implement and interpret this Act. // 33 USC 2071. // The Secretary shall establish the following technical annexes to these Rules: Annex I, Positioning and Technical Details of Lights and Shapes; Annex II, Additional Signals for Fishing Vessels Fishing in Close Proximity; Annex III, Technical Details of Sound Appliances; and Annex IV, Distress Signals. These annexes shall be as consistent as possible with the respective annexes to the International Regulations. The Secretary may establish other technical annexes, including local pilot rules.

Sec. 4. (a) Whoever operates a vessel in violation of this Act, // 33 USC 2072. // or of any regulation issued thereunder, or in violation of a certificate of alternative compliance issued under Rule 1 is liable to a civil penalty of not more than $5,000 for each violation.

(b) Every vessel subject to this Act, other than a public vessel being used for noncommercial purposes, that is operated in violation of this Act, or of any regulation issued thereunder, or in violation of a certificate of alternative compliance issued under Rule 1 is liable to a civil penalty of not more than $5,000 for each violation, for which penalty the vessel may be seized and proceeded against in the district court of the United States of any district within which the vessel may be found.

(c) The Secretary may assess any civil penalty authorized by this section. No such penalty may be assessed until the person charged, or the owner of the vessel charged, as appropriate, shall have been given notice of the violation involved and an opportunity for a hearing. For good cause shown, the Secretary may remit, mitigate, or compromise any penalty assessed. Upon the failure of the person charged, or the owner of the vessel charged, to pay an assessed penalty, as it may have been mitigated or compromised, the Secretary may request the Attorney General to commence an action in the appropriate district court of the United States for collection of the penalty as assessed, without regard to the amount involved, together with such other relief as may be appropriate.

(d) The Secretary of the Treasury shall withhold or revoke, at the request of the Secretary, the clearance, required by section 4197 of the Revised Statutes of the United States (46 U.S.C. 91) of any vessel, the owner or operator of which is subject to any of the penalties in this section. Clearance may be granted in such cases upon the filing of a bond or other surety satisfactory to the Secretary.

Sec. 5. (a) The Secretary shall establish a Rules of the Road Advisory Council // 33 USC 2073. // (hereinafter referred to as the Council) not exceeding 21 members. To assure balanced representation, members shall be chosen, insofar as practical, from the following groups: (1) recognized experts and leaders in organizations having an active interest in the Rules of the Road and vessel and port safety, (2) representatives of owners and operators of vessels, professional mariners, recreational boaters, and the recreational boating industry, (3) individuals with an interest in maritime law, and (4) Federal and State officials with responsibility for vessel and port safety. Additional persons may be appointed to panels of the Council to assist the Council in the performance of its functions.

(b) The Council shall advise, consult with, and make recommendations to the Secretary on matters relating to any major proposals for changes to the Inland Rules. The Council may recommend changes to the Inland Rules and International Regulations to the Secretary. Any advice or recommendation made by the Council to the Secretary shall reflect the independent judgment of the Council on the matter concerned. The Council shall meet at the call of the Secretary, but in any event not less than once during each calendar year. All proceedings of the Council shall be public, and a record of the proceedings shall be made available for public inspection.

(c) The Secretary shall furnish to the Council an executive secretary and such secretarial, clerical, and other services as are deemed necessary for the conduct of its business. Members of the Council who are not officers or employees of the United States shall, while attending meetings of the Council or while otherwise engaged in the business of the Council, be entitled to receive compensation at a rate fixed by the Secretary, not exceeding the daily equivalent of the current rate of basic pay in effect for GS-18 of the General Schedule under section 5332 of title 5, United States Code, including travel-time; and while away from their home or regular place of business, they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code. Payments under this section shall not render members of the Council officers or employees of the United States for any purpose.

(d) Unless extended by subsequent Act of Congress, the Council shall terminate 5 years from the date of enactment of this Act.

Sec. 6. The International Navigational Rules Act of 1977 (91 Stat. 308;33 U.S.C. 1601), is amended as follows:

(1) in section 5

// 33 USC 1604. //

by amending subsection (a) to read as follows:

" The International Regulations do not apply to vessels while in the waters of the United States shoreward of

the

navigational demarcation lines dividing the high seas

from

harbors, rivers, and other inland waters of the United

States.";

(2) in section 6,

// 33 USC 1605. //

by adding a new subsection (d) as follows:

"(d) A certification authorized by this section may be issued for a class of vessels.";

(3) in subsection (a) of section 9

// 33 USC 1608. //

by striking "$500" and inserting in lieu thereof "$5,000".

(4) in subsection (b) of section 9 by striking "$500" and inserting in lieu thereof "not more than $5,000".

Sec. 7. Sections 2, 4, 6(1), and 8(a) // 33 USC 2001 // are effective 12 months after the date of enactment of this Act, except that on the Great Lakes, the effective date of sections 2 and 4 will be established by the Secretary. Section 5 is effective October 1, 1981.

Sec. 8. (a) The laws specified in the following schedules are repealed. // 33 USC 2001 // Any prior rights or liabilities existing under these laws are not affected by their repeal.

REVISED STATUTES

Sec. 4233.

Sec. 4233 A.

Sec. 4233 B.

Sec. 4233 C.

SCHEDULE OMITTED.

(b) The following laws are repealed when the Secretary establishes an effective date under section 7.

REPEALED LAWS OMITTED.

Sec. 9. Section 2(c) of the Act of February 19, 1895 (28 Stat. 672), as amended (33 U.S.C. 151), is amended by striking the words "the Canal Zone,".

Approved December 24, 1980.

LEGISLATIVE HISTORY:

SENATE REPORT No. 96 - 979 (Comm. on Commerce, Science, and Transportation).

CONGRESSIONAL RECORD, Vol. 126 (1980):

June 23, considered and passed House.

Sept. 30, considered and passed Senate, amended.

Nov. 19, House concurred in certain Senate amendments and disagreed to Senate amendment No. 70.

Dec. 8, Senate receded from its amendment No. 70.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 16, No. 52:

Dec. 24, Presidential statement.

PUBLIC LAW 96-590, 94 STAT. 3414

96 TH CONGRESS, S. 3261 DECEMBER 24, 1980
An Act To amend section 222 of the Communications Act of 1934

in order to include Hawaii

in the same category as other States for the purposes

of such section.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 222(a)(10) of the Communications Act of 1934 (47 U.S.C. 222(a)(10)) is amended by striking out ", except Hawaii".

Sec. 2. Section 222 of the Communications Act of 1934 (47 U.S.C. 222), as amended, is further amended by adding at the end thereof the following new subsection:

"(g)(1) The authority of any carrier to provide any service or operate any facilities which it is authorized to provide or operate on the date of enactment of this subsection shall not be altered solely by the inclusion of Hawaii within the definition of ' Continental United States', nor shall such inclusion restrict or impair any carrier's eligibility after the date of enactment of this subsection for new or additional authority.

"(2) Whenever, upon a complaint or upon its own initiative, and after opportunity for a hearing, the Commission finds that any charge, classification, regulation, or practice relating to intercarrier arrangements of any carrier serving Hawaii is or will be unjust, unreasonable, discriminatory, or not in the public interest, the Commission shall determine and prescribe what charge, classification, regulation, or practice, or such other remedy as is or will be just, reasonable, nondiscriminatory and in the public interest to be thereafter followed.".

Approved December 24, 1980.

LEGISLATIVE HISTORY:

CONGRESSIONAL RECORD, Vol. 126 (1980):

Dec. 11, considered and passed Senate.

Dec. 12, considered and passed House.

PUBLIC LAW 96-589, 94 STAT. 3389, BANKRUPTCY TAX ACT OF 1980

96th CONGRESS, H.R. 5043 DECEMBER 24, 1980
An Act To amend the Internal Revenue Code of 1954 to provide

for the tax treatment of

bankruptcy, insolvency, and similar proceedings, and

for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS; AMENDMENT OF 1954 CODE.

(a) Short Title.-This Act // 26 USC 1 // may be cited as the " Bankruptcy Tax Act of 1980".

(b) Table of Contents.--, Sec. 1. Short title; table of contents; amendment of 1954 Code. Sec. 2. Tax treatment of discharge of indebtedness. Sec. 3. Rules relating to title 11 cases for individuals. Sec. 4. Corporate reorganization provisions. Sec. 5. Miscellaneous corporate amendments. Sec. 6. Changes in tax procedures. Sec. 7. Effective dates.

(c) Amendment of 1954 Code.--, // 26 USC 1 // Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1954.

SEC. 2. TAX TREATMENT OF DISCHARGE OF INDEBTEDNESS.

(a) Amendment of Section 108.-Section 108 (relating to discharge of indebtedness) is amended to read as follows:

" SEC. 108. // 26 USC 108. // INCOME FROM DISCHARGE OF INDEBTEDNESS.

"(a) Exclusion From Gross Income--,

"(1) In general.-Gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of the taxpayer if--,

"(A) the discharge occurs in a title 11

// 11 USC 101 //

case,

"(B) the discharge occurs when the taxpayer is insolvent, or "(C) the indebtedness discharged is qualified business indebtedness.

"(2) Coordination of exclusions.--,

"(A) Title 11 exclusion takes precedence.-Subparagraphs (B) and (C) of paragraph (1) shall not apply to a discharge which occurs in a title 11 case. "(B) Insolvency exclusion takes precedence over qualified business exclusion.-Subparagraph (C) of

paragraph

(1) shall not apply to a discharge to the extent that

the

taxpayer is insolvent.

"(3) Insolvency exclusion limited to amount of insolvency.--, In the case of a discharge to which paragraph (1)(B) applies, the amount excluded under paragraph (1)(B) shall not exceed the amount by which the taxpayer is insolvent.

"(b) Reduction of Tax Attributes in Title 11 // 11 USC 101 // Case or Insolvency.--,

"(1) In general.-The amount excluded from gross income under subparagraph (A) or (B) of subsection (a)(1) shall be applied to reduce the tax attributes of the taxpayer as provided in paragraph (2).

"(2) Tax attributes affected; order of reduction.-Except as provided in paragraph (5), the reduction referred to in paragraph (1) shall be made in the following tax attributes in the following order:

"(A) NOL.-Any net operating loss for the taxable

year of

the discharge, and any net operating loss carryover to

such

taxable year.

"(B) Certain credit carryovers.-Any carryover to or from the taxable year of the discharge of an amount for purposes of determining the amount of a credit allowable under--, "(i) section 38 (relating to investment in certain

depreciable

property),

"(ii) section 40 (relating to expenses of work incentive programs), "(iii) section 44 B (relating to credit for employment of certain new employees), or "(iv) section 44 E (relating to alcohol used as a fuel). For purposes of clause (i), there shall not be taken

into

account any portion of a carryover which is

attributable to

the employee plan credit (within the meaning of section

48(o)(3)).

"(C) Capital loss carryovers.-Any net capital loss for the taxable year of the discharge, and any capital loss carryover to such taxable year under section 1212. "(D) Basis redution.--, "(i) In general.-The basis of the property of the taxpayer. "(ii) Cross reference.--, " For provisions for making the reduction described in

clause (i), see

section 1017.

"(E) Foreign tax credit carryovers.-Any carryover to or from the taxable year of the discharge for purposes

of

determining the amount of the credit allowable under

section

33.

"(3) Amount of reduction.--,

"(A) In general.-Except as provided in subparagraph (B), the reductions described in paragraph (2) shall

be one

dollar for each dollar excluded by subsection (a).

"(B) Credit carryover reduction.-The reductions described in subparagraphs (B) and (E) of

paragraph (2) shall

be 50 cents for each dollar excluded by subsection (a).

"(4) Ordering rules.--,

"(A) Reductions made after determination of tax for year.- The reductions described in paragraph (2) shall

be

made after the determination of the tax imposed by this

chapter for the taxable year of the discharge.

"(B) Reductions under subparagraph (a) or (c) of

paragraph

(2).-The reductions described in subparagraph (A) or

(C) of paragraph (2) (as the case may be) shall be

made first in

the loss for the taxable year of the discharge and then

in the

carryovers to such taxable year in the order of the

taxable

years from which each such carryover arose.

"(C) Reductions under subparagraphs (b) and (e) of paragraph (2).-The reductions described in

subparagraphs

(B) and (E) of paragraph (2) shall be made in the

order in

which carryovers are taken into account under this

chapter

for the taxable year of the discharge.

"(5) Election to apply reduction first against depreciable property.--,

"(A) In general.-The taxpayer may elect to apply any portion of the reduction referred to in paragraph (1)

to the

reduction under section 1017 of the basis of the

depreciable

property of the taxpayer.

"(B) Limitation.-The amount to which an election under subparagraph (A) applies shall not exceed the aggregate adjusted bases of the depreciable property held by the taxpayer as of the beginning of the taxable year

following

the taxable year in which the discharge occurs.

"(C) Other tax attributes not reduced.-Paragraph (2) shall not apply to any amount to which an election under this paragraph applies.

"(c) Tax Treatment of Discharge of Qualified Business Indebtedness.--, In the case of discharge of qualified business indebtedness--,

"(1) Basis reduction.--,

"(A) In general.-The amount excluded from gross income under subparagraph (C) of subsection (a)(1)

shall be

applied to reduce the basis of the depreciable property

of the

taxpayer.

"(B) Cross reference.--, " For provisions for making the reduction described in

subparagraph

(A), see section 1017.

"(2) Limitation.-The amount excluded under subparagraph (C) of subsection (a)(1) shall not exceed the aggregate adjusted bases of the depreciable property held by the taxpayer as of the beginning of the taxable year following the taxable year in which the discharge occurs (determined after any reductions under subsection (b)).

"(d) Meaning of Terms; Special Rules Relating to Subsections (a), (b), and (c).--,

"(1) Indebtedness of taxpayer.-For purposes of this section, the term 'indebtedness of the taxpayer' means any indebtedness--,

"(A) for which the taxpayer is liable, or "(B) subject to which the taxpayer holds property.

"(2) Title 11 case.-For purposes of this section, the term 'title 11 case' means a case under title 11 of the United States Code

// 11 USC 101 //

(relating to bankruptcy), but only if the taxpayer is under the jurisdiction of the court in such case and the discharge of indebtedness is granted by the court or is pursuant to a plan approved by the court.

"(3) Insolvent.-For purposes of this section, the term 'insolvent' means the excess of liabilities over the fair market value of assets. With respect to any discharge, whether or not the taxpayer is insolvent, and the amount by which the taxpayer is insolvent, shall be determined on the basis of the taxpayer's assets and liabilities immediately before the discharge.

"(4) Qualified business indebtedness.-Indebtedness of the taxpayer shall be treated as qualified business indebtedness if (and only if)--,

"(A) the indebtedness was incurred or assumed--, "(i) by a corporation or "(ii) by an individual in conection with property used in his trade or business, and "(B) such taxpayer makes an election under this paragraph with respect to such indebtedness.

"(5) Depreciable property.-The term 'depreciable property' has the same meaning as when used in section 1017.

"(6) Subsections (a), (b), and (c) to be applied at partner level.-In the case of a partnership, subsections (a), (b), and (c) shall be applied at the partner level.

"(7) Reductions of tax attributes in title 11 cases of individuals to be made by estate.-In any case under chapter 7 or 11 of title 11 of the United States Code

// 11 USC 701, 1101 //

to which section 1398 applies, for purposes of paragraphs (1) and (5) of subsection (b) the estate (and not the individual) shall be treated as the taxpayer. The preceding sentence shall not apply for purposes of applying section 1017 to property transferred by the estate to the individual.