Page:United States Statutes at Large Volume 65.djvu/544

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PUBLIC LAW 183—OCT. 20, 1951

[65 STAT.

SEC. 338. EXCHANGES AND DISTRIBUTIONS IN OBEDIENCE TO ORDERS OF SECURITIES AND EXCHANGE COMMISSION. i u ^ s c%373((i)

(1). • ' '

(^) DEFINITION OP SYSTEM GROUP.—Section 373(d)(1) (relating

to the definition of the term "system gfoup") is hereby amended to read as follows: "(1) A t least 90 per centmn of each class of the stock (other than (A) stock which is preferred as to both dividends and assets, and (B) stock which is limited and preferred as to dividends but which is not preferred as to assets but only if the total value of such stock is less than 1 per centum of the aggregate value of all classes of stock which are not preferred as to both dividends and assets) of each of the corporations (except the common parent corporation) is owned directly by one or more of the other corporations; and". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall be applicable with respect to taxable years affected by an exchange or distribution made after December 31, 1947.

SEC. 339. TAXATION OF BUSINESS INCOME OF STATE COLLEGES AND UNIVERSITIES. ^u.^s.^% 421(b) (a) AMENDMENTorSECTiON421 (b).—Section 421(b)(1) (organi(!)• zations subject to tax under Supplement U) is hereby amended to read as follows: "(1)

iu.^s.c;'§ioi.

Post, p. 518.

^"^'•°-

ORGANIZATIONS TAXABLE AS CORPORATIONS.—

" (A) Organizations Exempt Under Section 101(1), (6), (7) and (14).—The taxes imposed hj subsection (a)(1) shall apply in the case of any organization (other than a church, a convention or association of churches, or a trust described in paragraph (2)) which is exempt, except as provided in this supplement, from taxation under this chapter by reason of paragraph (1), (6), or (7) of section 101. Such taxes shall also apply in the case of a corporation described in section 101 (14) if the income is payable to an organization which itself is subject to the tax imposed by subsection (a) or to a church or to a convention or association of churches. " (B) State Colleges and Universities.—The taxes imposed by subsection (a)(1) shall apply in the case of any college or university which is an agency or instrumentality of any government or any political subdivision thereof, or which is owned or operated by a government or any political subdivision thereof or by any agency or instrumentality of any one or more governments or political subdivisions. Such taxes shall also apply in the case of any corporaticHi wholly owned by one or more such colleges or universities." Qy'^ U N R E L A T E D TRADE OR B U S I N E S S. — S e c t i o n 422 (b) (definition of

unrelated trade or business) is hereby amended as follows: (1) By inserting after "under section 101" the following: " ( o r, in the case of an organization described in section 421(b)(1)(B), to the exercise or performance of any purpose or function described in section 101(6)) ". (2) By inserting in paragraph (2) thereof after "section 101 (6) " the following: "or in the case of a college or university described in section 421(b)(1)(B) ". (c) EPFECTTVB DATE.—The amendments made by this section shall be applicable only with respect to taxable years beginning after December 31, 1951.