73
STAT.]
621
PUBLIC LAW 86-346-SEPT. 22, 1959
Public Law 86-346 AN ACT September 22, 1959 [H. R. 9035] To permit the issuance of series E and H United States savings bonds at interest rates above the existing maximum, to permit the Secretary of the Treasury to designate certain exchanges of Government securities to be made without recognition of gain or loss, 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—IN GENERAL SEC. 101. (a) The Second Liberty Bond Act, as amended, is amended by adding at the end thereof the following new section: "SEC. 25. I n the case of any offering of United States savings bonds issued or to be issued under section 22 of this Act, the maximum limits on the interest rate or the investment yield or both may be exceeded upon a finding by the President with respect to such offering that the national interest requires that such maximum limits be exceeded: Provided, howe^ver^ That in no event may the interest rate or the investment yield exceed 4 ^ per centum per annum." (b) Paragraph (2) of section 22(b) of the Second Liberty Bond Act, as amended (31 U.S.C. sec. 75Tc(b)(2)), is amended to read as follows: " (2) The Secretary of the Treasury, with the approval of the President, is authorized to provide by regulations: " (A) That owners of series E and H savings bonds may, at their option, retain the bonds after maturity, or after any period beyond maturity during which such bonds have earned interest, and continue to earn interest upon them at rates which (subject to section 25) are consistent with the provisions of paragraph (1). " (B) That series E and H savings bonds on which the rates of interest have been fixed prior to such regulations will earn interest at higher rates which (subject to section 25) are consistent with the provisions of paragraph (1)." (c) The authority granted by the amendments made by subsections (a) and (b) may be exercised with respect to United States savings bonds bearing issue dates of June 1, 1959, or thereafter. Such authority may also be exercised with respect to United States savings bonds issued before June 1, 1959, but in no case shall the interest rate, or investment yield, on any bond be changed pursuant to such authority for any period which begins before June Ij 1959. SEC. 102. The heading and first sentence of section 454(c) of the Internal Revenue Code of 1954 (relating to matured United States savings bonds) are amended to read as follows: "(c) MATURED UNITED STATES SAVINGS BONDS.—In the case of a taxpayer who— "(1) holds a series E United States savings bond at the date of maturity, and "(2) pursuant to regulations prescribed under the Second Liberty Bond Act (A) retains his investment in such series E bond in an obligation of the United States, other than a current income obligation, or (B) exchanges such series E bond for another nontransferable obligation of the United States in an exchange upon which gain or loss is not recognized because of section 1037 (or so much of section 1031 as relates to section 1037), the increase in redemption value (to the extent not previously includible in gross income) in excess of the amount paid for such series E
S. u.Is.
savings
I n t e r e s t rates increase. 40 Stat. 288. 31 USC 774(2).
65 Stat. 26.
R e t e n t i o n of matured bon<ls.
68A Stat. 156.
31 USC 774(2).
P o s t, p. 623. 68A Stat. 302.
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