48 Stat. 901. 15 USC 78w. 49 Stat. 1380. 15 USC 78ff. 48 Stat. 77. 54 Stat. 857. 15 USC 77k. 78 STAT. 580. SEC. 10. Subsection (b) of section 23 of the Securities Exchange Act of 1934 is amended by adding at the end thereof the following new sentence: "The Commission shall include in its annual reports to the Congress for the fiscal years ended on June 30 of 1965, 1966, and 1967 information, data, and recommendations specifically related to the operation of the amendments to this Act made by the Securities Acts Amendments of 1964." SEC. 11. The first sentence of subsection (b) of section 32 of the Securities Exchange Act of 1934 is amended (1) by striking out "pursuant to an undertaking contained in a registration statement as provided in" and inserting in lieu thereof "required to be filed under" and (2) by inserting immediately after "this title" the following: "or any rule or regulation thereunder". SEC. 12. Section 4 of the Securities Act of 1933 is amended to read as follows: "SEC. 4. The provisions of section 5 shall not apply to— “(1) transactions by any person other than an issuer, underwriter, or dealer. "(2) transactions by an issuer not involving any public offering. "(3) transactions by a dealer (including an underwriter no longer acting as an underwriter in respect of the security involved in such transaction), except— "(A) transactions taking place prior to the expiration of forty days after the first date upon which the security was bona fide offered to the public by the issuer or by or through an underwriter, "(B) transactions in a security as to which a registration statement has been filed taking place prior to the expiration of forty days after the effective date of such registration statement or prior to the expiration of forty days after the first date upon which the security was bona fide offered to the public by the issuer or by or through an underwriter after such effective date, whichever is later (excluding in the computation of such forty days any time during which a stop order issued under section 8 is in effect as to the security), or such shorter period as the Commission may specify by rules and regulations or order, and "(C) transactions as to securities constituting the whole or a part of an unsold allotment to or subscription by such dealer as a participant in the distribution of such securities by the issuer or by or through an underwriter. With respect to transactions referred to in clause (B), if securities of the issuer have not previously been sold pursuant to an earlier effective registration statement the applicable period, instead of forty days, shall be ninety days, or such shorter period as the Commission may specify by rules and regulations or order. "(4) brokers' transactions executed upon customers' orders on any exchange or in the over-the-counter market but not the solicitation of such orders." 78 STAT. 580. SEC. 13. The amendments made by this Act shall take effect as Effective follows: (1) The effective date of section 12(g) (1) of the Securities Exchange Act of 1934, as added by section 3(c) of this Act, shall be July 1, 1964. (2) The effective date of the amendments to sections 12(b) and 15(a) of the Securities Exchange Act of 1934, contained in sections 3(a) and 6(a), respectively, of this Act, shall be July 1, 1964. (3) All other amendments contained in this Act shall take effect on the date of its enactment. Approved August 20, 1964. dates. LEGISLATIVE HISTORY: HOUSE REPORT No. 1418 accompanying H. R. 6793 (Comm. on Interstate & Foreign Commerce). SENATE REPORT No. 379 (Comm. on Banking & Currency). CONGRESSIONAL RECORD: Vol. 109 (1963): July 30, considered and passed Senate. Vol. 110 (1964): Aug. 4, considered in House. Aug. 5, considered and passed House, amended, Aug. 6, Senate concurred in House amendment. To amend section 341 of the Internal Revenue Code of 1954, relating to collapsible corporations, and to amend section 543 (a)(2) of such Code, relating to the inclusion of rents in personal holding company income. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 341 Taxes. of the Internal Revenue Code of 1954 (relating to collapsible corpora- Collapsible oortions) is amended by striking out "except as provided in subsection porations. (d)," in subsection (a) and inserting in lieu thereof "except as other- 68A Stat. 1073 wise provided in this section," and by adding after subsection (e) the 72 Stat. 1615, following new subsection: "(f) CERTAIN SALES OF STOCK OF CONSENTING CORPORATIONS.— "(1) IN GENERAL.-Subsection (a) (1) shall not apply to a sale of stock of a corporation (other than a sale to the issuing corporation) if such corporation (hereinafter in this subsection referred to as 'consenting corporation') consents (at such time and in such manner as the Secretary or his delegate may by regulations prescribe) to have the provisions of paragraph (2) apply. Such consent shall apply with respect to each sale of stock of such corporation made within the 6-month period beginning with the date on which such consent is filed. "(2) RECOGNITION OF GAIN.-Except as provided in paragraph (3), if a subsection (f) asset (as defined in paragraph (4)) is disposed of at any time by a consenting corporation (or, if paragraph (3) applies, by a transferee corporation), then the amount by which "(A) in the case of a sale, exchange, or involuntary conversion, the amount realized, or "(B) in the case of any other disposition, the fair market exceeds the adjusted basis of such asset shall be treated as (3) EXCEPTION FOR CERTAIN TAX-FREE TRANSACTIONS.-If the or 374 (a), then the amount of gain taken into account by the 68A Stat. 102; transferor under paragraph (2) shall not exceed the amount of 70 Stat. 402. gain recognized to the transferor on the transfer of such asset 26 USC 332,351, (determined without regard to this subsection). This paragraph 361, 371, 374. only if the transferee— shall app is not an organization which is exempt from tax (A) imposed by this chapter, and (B) agrees (at such time and in such manner as the Secretary or his delegate may by regulations prescribe) to have the provisions of paragraph (2) apply to any disposition by it of such subsection (f) asset. "(4) SUBSECTION (f) ASSET DEFINED.-For purposes of this subsection "(A) IN GENERAL.-The term 'subsection (f) asset' means any property which, as of the date of any sale of stock referred to in paragraph (1), is not a capital asset and is property owned by, or subject to an option to acquire held by, the consenting corporation. For purposes of this subparagraph, land or any interest in real property (other than 68A Stat. 84. 26 USC 301, 312. Ante, p. 596. 76 Stat. 1035. 26 USC 453. Effective date. 78 STAT. 597. a security interest), and unrealized receivables or fees (as defined in subsection (b) (4)), shall be treated as property which is not a capital asset. "(B) PROPERTY UNDER CONSTRUCTION.-If manufacture, construction, or production with respect to any property described in subparagraph (A) has commenced before any date of sale described therein, the term 'subsection (f) asset' includes the property resulting from such manufacture, construction, or production. "(C) SPECIAL RULE FOR LAND.-In the case of land or any interest in real property (other than a security interest) described in subparagraph (A), the term 'subsection (f) asset' includes any improvements resulting from construction with respect to such property if such construction is commenced (by the consenting corporation or by a transferee corporation which has agreed to the application of paragraph (2)) within 2 years after the date of any sale described in subparagraph (A). "(5) 5-YEAR LIMITATION AS TO SHAREHOLDER.-Paragraph (1) shall not apply to the sale of stock of a corporation by a shareholder if, during the 5-year period ending on the date of such sale, such shareholder (or any related person within the meaning of subsection (e) (8) (A)) sold any stock of another consenting corporation within any 6-month period beginning on a date on which a consent was filed under paragraph (1) by such other corporation. "(6) SPECIAL RULE FOR STOCK OWNERSHIP IN OTHER CORPORATIONS.-If a corporation (hereinafter in this paragraph referred to as 'owning corporation') owns 5 percent or more in value of the outstanding stock of another corporation on the date of any sale of stock of the owning corporation during a 6-month period with respect to which a consent under paragraph (1) was filed by the owning corporation, such consent shall not be valid with respect to such sale unless such other corporation has (within the 6-month period ending on the date of such sale) filed a valid consent under paragraph (1) with respect to sales of its stock. For purposes of applying paragraph (4) to such other corporation, a sale of stock of the owning corporation to which paragraph (1) applies shall be treated as a sale of stock of such other corporation. In the case of a chain of corporations connected by the 5-percent ownership requirements of this paragraph, rules similar to the rules of the two preceding sentences shall be applied. (7) ADJUSTMENTS TO BASIS.-The Secretary or his delegate shall prescribe such regulations as he may deem necessary to provide for adjustments to the basis of property to reflect gain recognized under paragraph (2)." (b) (1) Subsections (b) and (d) of section 301 (relating to amount distributed), and paragraph (3) of section 312(c) (relating to adjustments of earnings and profits), of the Internal Revenue Code of 1954 are each amended by striking out "section 311" and inserting in lieu thereof "section 311, under section 341 (f),". (2) Subparagraphs (A) and (B) of section 453 (d) (4) of such Code (relating to distribution of installment obligations in certain corporate liquidations) are each amended by inserting "section 341(f) or" before "section 1245 (a)". SEC. 2. The amendments made by the first section of this Act shall apply with respect to transactions after the date of the enactment of this Act in taxable years ending after such date. 78 STAT. 598. SEC. 3. (a) Section 543 (u) (2) of the Internal Revenue Code of 1954 Personal holding (relating to rents) is amended by adding at the end thereof the fol- company income. lowing new sentence: "For purposes of applying this paragraph, Rents. royalties received for the use of, or for the privilege of using, a patent, Ante, p. 81. invention, model, or design (whether or not patented), secret formula 26 USC 543. or process, or any other similar property right shall be treated as rent, if such property right is also used by the corporation receiving such royalties in the manufacture or production of tangible personal property held for lease to customers, and if the amount (computed without regard to this sentence) constituting rent from such leases to customers meets the requirements of subparagraph (A)." (b) The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 1963. Approved August 22, 1964. LEGISLATIVE HISTORY: HOUSE REPORT No. 1308 (Comm. on Ways and Means). June 29: Considered and passed House. July 29 Considered and passed Senate, amended. |