68A Stat. 84. 26 USC 301, 312. 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 (a) (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. Public Law 89-289 An Act 79 STAT. 1051. To amend the Securities Act of 1933 with respect to certain registration fees. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) is amended by 48 Stat. 78. striking out "one one-hundredth" and inserting in lieu thereof "onefiftieth", and by striking out "$25." and inserting in lieu thereof "$100." SEC. 2. The amendments made by the first section of this Act shall Effective date. take effect January 1, 1966. Approved October 22, 1965. LEGISLATIVE HISTORY: HOUSE REPORT No. 1015 (Comm. on Interstate & Foreign Commerce). CONGRESSIONAL RECORD, Vol. 111 (1965): Oct. 5: Passed House. Public Law 89-485 89th Congress, H. R. 7371 July 1, 1966 An Act To amend the Bank Holding Company Act of 1956. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(a)) is amended to read as follows: 80 STAT. 236 Ban!: Holding 1956, amend ments. "Bank holding "(a) Bank holding company' means any company (1) that directly or indirectly owns, controls, or holds with power to vote 25 per centum or more of the voting shares of each of two or more banks or of a company that is or becomes a bank holding company by virtue of this Act, or (2) that controls in any manner the election of a majority of the directors of each of two or more banks; and, for the purposes of this Act, any successor to any such company shall be deemed to be a bank holding company from the date as of which such predecessor company became a bank holding company. Notwithstanding the foregoing, (A) no bank and no company owning or controlling voting shares of a bank shall be a bank holding company by virtue of such bank's ownership or control of shares in a fiduciary capacity, except as provided in paragraphs (2) and (3) of subsection (g) of this section, (B) no company shall be a bank holding company by virtue Post, p. 237. of its ownership or control of shares acquired by it in connection with its underwriting of securities if such shares are held only for such period of time as will permit the sale thereof on a reasonable basis, and (C) no company formed for the sole purpose of participating in a proxy solicitation shall be a bank holding company by virtue of its control of voting rights of shares acquired in the course of such solicitation." SEC. 2. Subsection (b) of section 2 of the Bank Holding Company Act of 1956 (12 U.S.Č. 1841 (b)) is amended to read as follows: "(b) "Company' means any corporation, business trust, association, "Company." or similar organization, or any other trust unless by its terms it must terminate within twenty-five years or not later than twenty-one years and ten months after the death of individuals living on the effective date of the trust, but shall not include (1) any corporation the majority of the shares of which are owned by the United States or by any State, or (2) any partnership." SEC. 3. Subsection (c) of section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 (c)) is amended to read as follows: "(c) 'Bank' means any institution that accepts deposits that the "Bank." depositor has a legal right to withdraw on demand, but shall not include any organization operating under section 25 or section 25 (a) of the Federal Reserve Act, or any organization that does not do business within the United States. District bank' means any bank organized or operating under the Code of Law for the District of Columbia." SEC. 4. Subsection (d) of section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(d)) is amended to read as follows: 39 Stat. 755; 41 Stat. 378; Post, p. 241. 12 USC 601-631. "District bank." "Subsidiary." "(d) 'Subsidiary', with respect to a specified bank holding company, means (1) any company 25 per centum or more of whose voting shares (excluding shares owned by the United States or by any company wholly owned by the United States) is directly or indirectly owned or controlled by such bank holding company, or is held by it with power to vote; or (2) any company the election of a majority of whose directors is controlled in any manner by such bank holding company." SEC. 5. Subsection (g) of section 2 of the Bank Holding Company Repeal. Act of 1956 (12 U.S.C. 1841 (g)) is repealed. (330) 80 STAT. 237. 70 Stat. 133. 48 Stat. 183; Post, pp. 241, 243. 12 USC 371c. Post, pp. 238240. 12 USC 1843. Acquisition of bank shares or assets. Ante, p.236. SEC. 6. Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841), as amended by this Act, is further amended by adding at the end thereof the following new subsections: "(g) For the purposes of this Act "(1) shares owned or controlled by any subsidiary of a bank holding company shall be deemed to be indirectly owned or controlled by such bank holding company; "(2) shares held or controlled directly or indirectly by trustees for the benefit of (A) a company, (B) the shareholders or members of a company, or (C) the employees (whether exclusively or not) of a company, shall be deemed to be controlled by such company; and "(3) shares transferred after January 1, 1966, by any bank holding company (or by any company which, but for such transfer, would be a bank holding company) directly or indirectly to any transferee that is indebted to the transferor, or has one or more officers, directors, trustees, or beneficiaries in common with or subject to control by the transferor, shall be deemed to be indirectly owned or controlled by the transferor unless the Board, after opportunity for hearing, determines that the transferor is not in fact capable of controlling the transferee. "(h) The application of this Act and of section 23A of the Federal Reserve Act (12 U.S.C. 371), as amended, shall not be affected by the fact that a transaction takes place wholly or partly outside the United States or that a company is organized or operates outside the United States: Provided, however, That the prohibitions of section 4 of this Act shall not apply to shares of any company organized under the laws of a foreign country that does not do any business within the United States, if such shares are held or acquired by a bank holding company that is principally engaged in the banking business outside the United States." SEC. 7. (a) The first sentence of subsection (a) of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842 (a)) is amended to read as follows: "It shall be unlawful, except with the prior approval of the Board, (1) for any action to be taken that causes any company to become a bank holding company; (2) for any action to be taken that causes a bank to become a subsidiary of a bank holding company; (3) for any bank holding company to acquire direct or indirect ownership or control of any voting shares of any bank if, after such acquisition, such company will directly or indirectly own or control more than 5 per centum of the voting shares of such bank; (4) for any bank holding company or subsidiary thereof, other than a bank, to acquire all or substantially all of the assets of a bank; or (5) for any bank holding company to merge or consolidate with any other bank holding company." (b) The second sentence of subsection (a) of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842 (a)) is amended by striking the words "except where such shares are held for the benefit of the shareholders of such bank" at the end of clause (i) and inserting in lieu thereof the words "except where such shares are held under a trust that constitutes a company as defined in section 2(b) and except as provided in paragraphs (2) and (3) of section 2(g)". (c) Subsection (c) of section 3 of the Bank Holding Company Act of 1956 is amended to read as follows: "(c) The Board shall not approve— "(1) any acquisition or merger or consolidation under this section which would result in a monopoly, or which would be in furtherance of any combination or conspiracy to monoplize or |