118 STAT. 1437 PUBLIC LAW 108–357—OCT. 22, 2004 SEC. 239. INFORMATION RETURNS FOR QUALIFIED SUBCHAPTER S SUBSIDIARIES. (a) IN GENERAL.—Section 1361(b)(3)(A) (relating to treatment of certain wholly owned subsidiaries) is amended by inserting ‘‘and in the case of information returns required under part III of sub chapter A of chapter 61’’ after ‘‘Secretary’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2004. SEC. 240. REPAYMENT OF LOANS FOR QUALIFYING EMPLOYER SECURI TIES. (a) IN GENERAL.—Subsection (f) of section 4975 (relating to other definitions and special rules) is amended by adding at the end the following new paragraph: ‘‘(7) S CORPORATION REPAYMENT OF LOANS FOR QUALIFYING EMPLOYER SECURITIES.—A plan shall not be treated as violating the requirements of section 401 or 409 or subsection (e)(7), or as engaging in a prohibited transaction for purposes of subsection (d)(3), merely by reason of any distribution (as described in section 1368(a)) with respect to S corporation stock that constitutes qualifying employer securities, which in accord ance with the plan provisions is used to make payments on a loan described in subsection (d)(3) the proceeds of which were used to acquire such qualifying employer securities (whether or not allocated to participants). The preceding sen tence shall not apply in the case of a distribution which is paid with respect to any employer security which is allocated to a participant unless the plan provides that employer securi ties with a fair market value of not less than the amount of such distribution are allocated to such participant for the year which (but for the preceding sentence) such distribution would have been allocated to such participant.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to distributions with respect to S corporation stock made after December 31, 1997. Subtitle E—Other Business Incentives SEC. 241. PHASEOUT OF 4.3 CENT MOTOR FUEL EXCISE TAXES ON RAIL ROADS AND INLAND WATERWAY TRANSPORTATION WHICH REMAIN IN GENERAL FUND. (a) TAXES ON TRAINS.— (1) IN GENERAL.—Clause (ii) of section 4041(a)(1)(C) is amended by striking subclauses (I), (II), and (III) and inserting the following new subclauses: ‘‘(I) 3.3 cents per gallon after December 31, 2004, and before July 1, 2005, ‘‘(II) 2.3 cents per gallon after June 30, 2005, and before January 1, 2007, and ‘‘(III) 0 after December 31, 2006.’’. (2) CONFORMING AMENDMENTS.— (A) Subsection (d) of section 4041 is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph: ‘‘(3) DIESEL FUEL USED IN TRAINS.—In the case of any sale for use or use after December 31, 2006, there is hereby 26 USC 4975 note. 26 USC 1361 note.
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