PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1583
amount by which the limitation imposed by subsection (a)(3) for such taxable year exceeds the sum of the amounts which, by reason of this subsection, are carried to such taxable year and are attributable to taxable years preceding the unused credit year." (3) Subparagraph (A) of section 46(c)(3) (relating to public utility property) is amended by striking out "subsection (a)(1) (C) " and inserting in lieu thereof "subsection (a)(2)(C) ". (4) Paragraph (1) of section 46(e) (relating to limitations with respect to certain persons) is amended by striking out "subsection (a)(2) " and inserting in lieu thereof "subsection (a)(3) ". (5) The first sentence of section 46(f)(8) (relating to prohibition of immediate flowthrough of investment credit) is amended by inserting after "the T a x Reduction Act of 1975" the following: "and the T a x Reform Act of 1976". (6) Subsection (f) of section 48 (relating to estates and trusts) is amended by striking o u t "section 46(a)(2) " and inserting in lieu thereof "section 46(a)(3) ". (7) Section 301(d) of the T a x Reduction Act of 1975 is amended by striking out "section 4 6 (a)(1)(B) " each place i t appears and inserting in lieu thereof "section 46(a)(2)(B) ". (c) EFFECTIVE D A T E. — The amendments made by this section shall apply to taxable years beginning after December 31, 1975. SEC. 803. EMPLOYEE STOCK OWNERSHIP PLANS; STUDY OF EXPANDED STOCK OWNERSHIP.
26 USC 46.
26 USC 48. 26 USC 46 note, 26 USC 46 note,
(a) AMENDMENT OF THE INTERNAL R E V E N U E CODE o r 1954.—Sec-
tion 4 6 (f) (relating to limitation in case of certain regulated companies) is amended by a d d i n g a t the end thereof the following new paragraph: "(9)
SPECIAL RULE FOR ADDITIONAL CREDIT.—If the
taxpayer
makes an election under subparagraph (B) of subsection (a)(2), for a taxable year beginning after December 31, 1975, then, notwithstanding the prior paragraph s of this subsection, n o credit shall be allowed by section 38 in excess of the amount which would be allowed without regard to the provisions of subparagraph (B) of subsection (a)(2) if— " (A) the taxpayer's cost of service for ratemaking purposes or in its regulated books of account is reduced by reason of any portion of such credit which results from the transfer of employer securities or cash to an employee stock ownership plan which meets the requirements of section 301(d) of the T a x Reduction Act of 1976; " (B) the base to which the taxpayer's rate of return for ratemaking purposes is applied is reduced by reason of any portion of such credit which results from a transfer described in subparagraph (A) to such employee stock ownership p l a n; or " (C) any portion of the amount of such credit which results from a transfer described in subparagraph (A) to such employee stock ownership plan is treated for ratemaking purposes in any way other than as though it h a d been contributed by the taxpayer's common shareholders." (b)
SPECIAL RULES. —
(1) Paragraph (4) of section 46(f) is amended— (A) by striking out " paragraph s (1) and (2) " i n subparagraph (A) and inserting in lieu thereof " paragraph s (1),(2),and (9)";
26 USC 46.
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