An Act to provide an extension of the interest equalization tax, and for other purposes
PL 92-9 (H.R.5432), enacted 04/01/1971

85 STAT.] 
PUBLIC LAW 92-9-APR. 1,1971 
13 
Public Law 92-8 
J O I N T RESOLUTION 
», 
», ,i 
,a7, 
March 31, 1971 
To provide a temporary extension of certain provisions of law relating to interest 
[s. j . Res. ss] 
rates and cost-of-living stabilization. 
Resolved hy the Senate and House of Representatives 
of the United 
^^ ^^^^^ ^^^^^ 
States of AmeHca in Congress assembled^ 
and cost-of-uving 
stabilization. 
i:K«iri..\'JI(>N o r 
I N T E R E S T RATES O N DEPOSITS A N D S H A R E A C C O U N T S I N 
'ftension. 
FINANCIAL INSTITUTIONS 
SECTION 1. Section 7 of the Act of September 21,1966, as amended 
(Public Law 91-151; 83 Stat. 371), is amended by striking out 
"March 22, 1971" and inserting in lieu thereof "June 1, 1971". 
Post, p. 38. 
12 u s e 461 
note. 
AUTHORITY TO APPLY PRICE AND WAGE CONTROLS 
SP:C. 2. Section 206 of the Economic Stabilization Act of 1970 (title 
II of Public Law 91-379), as amended (Public Law 91-558), is ue&fTos^up^.ziu 
amended by striking out "March 31, 1971" and "April 1, 1971" and 743,' 
inserting in lieu thereof "May 31, 1971" and "June 1, 1971", 
respectively. 
Approved March 31, 1971. 
12 use 1904 
note. 
Public Law 92-9 
AN ACT 
April 1, 1971 
To provide an extension of the interest equalization tax, and for other purposes. 
[H. R. 5432] 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the "Interest Equali-
zation Tax Extension Act of 1971". 
(b) AMENDMENT OF 1954 CODE.—Whenever in this Act an amend-
ment is expressed in terms of an amendment to a section or other pro-
vision, the reference is to a section or other provision of the Internal 
Eevenue Code of 1954. 
SEC. 2. EXTENSION OF INTEREST EQUALIZATION TAX. 
Section 4911(d) is amended, effective with respect to acquisitions 
made after March 31, 1971, by striking out "March 31, 1971" and 
inserting in lieu thereof "March 31, 1973". 
Interest Equali-
zation Tax Exten-
sion Act of 1971,, 
68A Stat. 3. 
26 u s e 1 etseq. 
78 Stat. 810; 
8 3 Stat. 261. 
81 Stat. 145; 
83 Stat. 262. 
14 
PUBLIC LAW 92-9-APR. 1, 1971 
[85 STAT. 
SEC. 3. OTHER AMENDMENTS. 
(a) ELECTION TO TREAT CERTAIN DEBT OBLIGATIONS AS SUBJECT TO 
TAX.— 
11 f/<fA'fo\°o 
(1) Section 4912 is amended by adding at the end thereof the 
zO UoC 4 y i 2 . 
p 11 
• 
1 
•• 
lollowmg new subsection: 
"(c) ELECTION TO SUBJECT CERTAIN DEBT OBLIGATIONS TO TAX.— 
"(1) I N GENERAL.—A domestic corporation or domestic part-
nei-ship may elect to have its debt obligations— 
"(A) which are part of a new or original issue, or 
"(B) which are part of an issue outstanding on the date of 
the enactment of the Interest Equalization Tax Extension 
Act of 1971 and are treated under subsection (b) (3) as debt 
obligations of a foreign obligor, 
treated as debt obligations of a foreign obligor the acquisition of 
which by a United States person (other than the issuer) will, not-
withstanding any other provision of this chapter, be subject to the 
tax imposed by section 4911 at the rate applicable on acquisitions 
of stock under section 4911 (b). 
"(2) ASSUMPTION or OBLIGATIONS.—For purposes of paragraph 
(1), the assumption by a domestic corporation of debt obliga-
tions of an affiliated corporation shall be treated as the issuance of 
a new or original issue of debt obligations by such domestic corpo-
ration. For purposes of this paragraph, a domestic corporation 
shall be treated as affiliated with another corporation if both 
corporations are members, or would be members if they were both 
domestic corporations) of the same controlled group (within the 
meaning of section 48(c) (3) (C)). 
" (3) ELECTION.—An election under paragraph (1) with respect 
to any issue of debt obligations shall be made at such time and in 
such manner as the Secretary or his delegate may prescribe by 
regulations, and such election may not be revoked. In the case of 
a new or original issue, such election shall be made prior to the 
issuance (or, in the case of an issue treated as a new or original 
issue under paragraph (2), prior to the assumption) of any debt 
obligations of such issue. 
"(4) INDICATION OR ENDORSEMENT OF TAXABILITY.—In the case 
of a debt obligation which is part of a new or original issue (other 
than an issue treated as a new or original issue under paragraph 
(2)), an election under paragraph (1) shall apply to such debt 
obligation only if the document evidencing such debt obligation 
indicates that its acquisition by a United States person is subject 
to the tax imposed by section 4911 as provided in paragraph (1). 
In the case of any other debt obligation, an election under para-
graph (1) shall apply to such debt obligation only if the docu-
ment evidencing such debt obligation is marked or endorsed, 
subject to such regulations as the Secretary or his delegate may 
prescribe, so as to indicate that its acquisition by a United States 
person is subject to such tax." 
83 Stat. 603. 
Ante, p . 14. 
Effective date. 
78 Stat. 813; 
81 Stat. 157. 
85 STAT. ] 
PUBLIC LAW 92-9-APR. 1, 1971 
15 
80 Stat. 1542. 
(2) Section 861(a)(1) is amended— 
26 use'861. 
(A) by striking out "and" at the end of subparagraph (E), 
(B) by striking out the period at the end of subparagraph 
(F) and inserting in lieu thereof ", and", and 
(C) by adding at the end thereof the following new sub-
paragraph : 
"(G) interest on a debt obligation which was part of an 
issue with respect to which an election has been made imder 
section 4912(c) and w^hich, when issued (or treated as issued 
under section 4912(c) (2)), had a maturity not exceeding 15 
years and, when issued, w^as purchased by one or more under-
writers wdth a view to distribution through resale, but only 
with respect to interest attributable to periods after the date 
of such election." 
(3) The amendments made by this subsection shall take effect 
on the date of the enactment of this Act. 
(b) 
ACQUISITIONS IN CONNECTION W I T H NATIONALIZATION, EXPRO-
PRIATION, ETC.— 
(1) Section 4914(b) is amended by adding at the end thereof 
the following new paragraph: 
"(16) 
ACQUISITIONS OF STOCK OR DEBT OBLIGATIONS I N CONNEC-
TION WITH NATIONALIZATION, EXPROPRIATION, ETC.—Of StOCk or 
debt obligations of a foreign issuer or obligor, where such acquisi-
tion is required as a reinvestment in connection with an actual or 
threatened nationalization, expropriation, or seizure of property, 
to the extent provided in subsection (k)." 
(2) Section 4914 is amended by adding at the end thereof the 
following new subsection: 
"(k) 
ACQUISITIONS or STOCK OR DEBT OBLIGATIONS IN CONNECTION 
W I T H NATIONALIZATION, EXPROPRIATION, ETC.—The tax imposed by 
section 4911 shall not apply to the acquisition by a United States person 
of stock or a debt obligation of a foreign issuer or obligor, to the extent 
that such acquisition is required as a reinvestment within a foreign 
country by the terms of a contract of sale to, or a contract of indemnifi-
cation with respect to the nationalization, expropriation, or seizure by, 
the government of such country or a political subdivision thereof, or 
an agency or instrumentality of such government, of property owned 
within such country or such political subdivision by such United States 
person, or by a controlled foreign corporation (as defined in section 
957) more than 50 percent of the total combined voting power of all 
classes of stock entitled to vote of which is owned (within the meaning 
of section 958) by such United States person, but only if such contract 
was entered into because the government of such country or political 
subdivision, or such agency or instrumentality— 
"(A) has nationalized or has expropriated or seized, or has 
threatened to nationalize or to expropriate or seize, a substantial 
portion of the property owned within such country or such politi-
cal subdivision by such United States person or such controlled 
foreign corporation; or 
"(B) has taken action w^hich has the effect of nationalizing or 
of expropriating or seizing, or of threatening to nationalize or to 
78 Stat. 809. 
76 Stat. 1017. 
78 Stat. 827. 
26 use 4916. 
Effective date. 
16 
PUBLIC LAW 92-9-APR. 1, 1971 
[85 STAT. 
expropriate or seize, a substantial portion of the property so 
owned. 
For purposes of this subsection, an instrumentality of the government 
of a country or a political subdivision thereof includes a corporation 
or other entity with respect to which such government, or any agency 
of such government, owns more than 50 percent of the total combined 
voting power of all classes of stock entitled to vote or, in the case of a 
corporation or other entity not issuing shares of stock, has the author-
ity to elect or appoint a majority of the board of directors or equiva-
lent body of such corporation or other entity." 
(3) Section 4916(a) is amended— 
(A) by inserting "or" after the semicolon at the end of 
paragraph (2); 
(B) by striking out"; or" at the end of paragraph (3) and 
inserting in lieu thereof a period; and 
(C) by striking out paragraph (4). 
(4) The amendments made by this subsection shall apply with 
respect to acquisitions made after the date of the enactment of 
this Act. 
(c) 
FOREIGN MINERAL FACILITIES.— 
s/star^iss^-^' 
(1) Section 4914(c) (5) is amended by adding at the end thereof 
83 Stat! 263! 
the followiug uew sentence: "For purposes of subparagraph (B), 
if the proceeds of the loan are to be used by the foreign obligor 
(or by a person controlled by, or controlling, the foreign obligor) 
for additional facilities, the substantial portion requirement con-
tained in such subparagraph, and the one-half of the percentage 
of cost requirement contained in the last sentence of such sub-
paragraph, shall be treated as satisfied with respect to such loan 
if it IS established that an additional amount of ores or minerals 
(or derivatives thereof) extracted outside the United States by 
the United States person, or otherwise taken into account for pur-
poses of such subparagraph, will be stored, handled, transported, 
processed, or serviced in the existing and additional facilities of 
such foreign obligor or person, and that, with respect to such 
additional facilities, such additional amount fulfills such substan-
tial portion requirement or such one-half of the percentage of cost 
requirement, as the case may be." 
(2) The amendment made by paragraph (1) shall apply with 
respect to acquisitions made after the date of the enactment of 
this Act. 
(d) 
SALES OR LIQUIDATIONS OF FOREIGN SUBSIDIARIES.— 
(1) Section 4914 (^) (1) is amended— 
(A) by striking out "all of the outstanding stock, except 
for qualifying shares, of a foreign corporation" in subpara-
graph (A) and inserting in lieu thereof "all of the outstanding 
stock of a foreign corj)oration held by such United States 
person (and such includible corporations)"; 
(B) by striking out "all of the outstanding stock of which, 
except for qualifying shares, is owned by such United States 
person (or by one or more such includible corporations)" in 
subparagraph ( B ) ; and 
(C) by adding at the end thereof (after and below sub-
paragraph (C)) the following new sentence: 
"Subparagraph (A) or (B) shall apply only if, immediately 
prior to the sale or liquidation involved, the United States person 
(or one or more includible corporations in an siffiliated group, as 
68A Stat. 369. 
defined in section 1504, of which such person is a member) owns 
(directly or indirectly) 10 percent or more of the total combined 
Effective date. 
79 Stat. 957. 
79 Stat. 957. 
26 u s e 4914. 
78 Stat. i813. 
Effective date. 
85 STAT. ] 
PUBLIC LAW 92-9--APR. 1, 1971 
17 
voting power of all classes of stock of the foreign corporation; 
and, for purposes of this sentence, stock owned (directly or 
indirectly) by or for a foreign corporation shall be considered as 
being owned proportionately by its shareholders." 
(2) (A) Section 4914(b) (10) is amended by striking out 
"WHOLLY OWNED" in the heading, and by striking out "a wholly 
owned foreign corporation" and inserting in lieu thereof "a 
foreign corporation". 
(B) Section 4914(g) is amended by striking out "WHOLLY 
OWNED" in the heading. 
(3) The amendments made by this subsection shall apply with 
respect to acquisitions made after the date of the enactment of this 
Act. 
(e) 
DIRECT INVESTMENTS IN CERTAIN LENDING AND FINANCING 
OlRPORATTONS.— 
(1) Section 4915 is amended— 
83 stat.^ 267. ' 
(A) by striking out subsection (c) (3), and 
(B) by adding at the end thereof the following new 
subsection : 
"(e) 
SPECIAL RULE FOR INVESTMENTS IN CERTAIN LENDING AND 
FINANCING CORPORATIONS.— 
"(1) I N GENERAL.—For purposes of this chapter, a corporation 
described in paragraph (2) shall be treated as a foreign corpora-
tion whi(ih is not foiTned or availed of for the principal purpose 
described in subsection (c) (1) with respect to an acquisition of 
its stock or debt obligations, if it is established to the satisfaction 
of the Secretary or his delegate, pursuant to regulations prescribed 
by the Secretary or his delegate, that— 
"(A)(i) the amounts received by the corporation as a 
result of the acquisition will not be used to acquire stock of 
foreign issuers or debt obligations of foreign obligors or 
utilized in any way outside of the United States, or (ii) the 
funds used for such acquisition were obtained from sources 
outside the United States; and 
"(B) such information and records with respect to the 
corporation as are necessary for the administration of this 
chapter will be made available to the Secretary or his delegate. 
" (2) CORPORATIONS.—The corporations referred to in paragraph 
(1) are— 
"(A) a domestic corporation described in section 4920(a) 
(3)(C), 
, 
"(B) a domestic corporation which is a qualified lending 
and financing corporation (as defined in section 4920(d)) 
during any period during which an election under section 
4920(a) (3B) is in effect, and 
"(C) a foreign corporation which is a qualified lending and 
financing corporation (as defined in section 4920(d)) and 
has given notice to the Secretary or his delegate of its status 
as such a corporation. 
"(3) MISUSE OF AMOUNTS RECEIVED.—In any case in which para-
graph (1) applied to an acquisition of stock or debt obligations 
and— 
"(i) the amounts received by the corf)oration whose stock 
or debt obligations were acquired as a result of such acquisi-
tion are (before the termination date specified in section 
4911(d)) used to acquire stock of foreign issuers or debt 
^"'e» ?• i3. 
obligations of foreign obligors or utilized in any other way 
outside of the United States in violation of the regulations 
prescribed under paragraph (1), or 
81 Stat. 160. 
Post, p. 18. 
18 
PUBLIC L
A
W 92-9-APR. 1, 1971 
[85 STAT. 
"(ii) information or records witli res])0('t to the corpora-
tion, which the Secretary or delegate has determined (before 
such termination date) necessary for tlie administration of 
this chapter, are not, after reasonable iiotice, made avaihible 
to the Secretary, 
78 Stat. 809; 
then liability for the tax imposed by section 4911 shall be incurred 
26 use 49*11. 
by the acquiring corporation (with respect to such acquisition) at 
the time such amounts are so used or such information or records 
are not so made available; and the amount of such tax shall be 
equal to the amount of tax for which the acquiring corporation 
would have been liable under such section upon its acquisition 
of the stock or debt obligations involved if paragraph (1) had 
not applied to such acquisition." 
83 Stat. 264. 
(g) Sectiou 4920(a) (3B) is amended to read as follows: 
" (3B) CERTAIN DOMESTIC LENDING OR FINANCING CORPORATIONS.— 
Definitions. 
"(-^) I N GENERAL.—The terms 'foreign issuer', 'foreign 
obligor', and 'foreign issuer or obligor' also mean a domestic 
corporation which is a qualified lending or financing corpo-
ration (as defined in subsection (d)) and which elects to be 
treated, for purposes of this chapter, as a foreign issuer and 
foreign obligor. 
"(B) ELECTION.—An election under subparagraph (A) 
shall be made in such manner as the Secretary or his delegate 
prescribes by regulations. Any such election shall be effective 
as of the date thereof and shall remain in effect until revoked. 
If, at any time, the corporation ceases to be a qualified lending 
or financing corporation, the election shall thereupon be 
deemed revoked. When an election is revoked, no further 
election may be made. If an election is revoked, the corpora-
tion shall incur liability at the time of such revocation for 
the tax imposed by section 4911 with respect to all stock or 
debt obligations which were acquired by it during the period 
for which the election w^as in effect and which are held by it 
at the time of such revocation; and the amount of such tax 
shall be equal to the amount of tax for which the corporation 
would be liable under such section if it had acquired such 
stock or debt obligations immediately after such revocation." 
(3) Section 4920(d) is amended to read as follows: 
"Qualified lend- 
^^ (d) 
QUALIFIED L E N D I N G AND FINANCING CORPORATIONS. 
F o r p u r -
c"^o'raao^n.""^ 
l)Oses of tliis chapter, the term 'qualified lending or financing corpora-
tion' means a corporation— 
"(1) substantially all of the business of which consists of— 
"(A) making loans (including the acquisition of obliga-
tions arising under a lease which is entered into principally 
as a financing transaction), 
"(B) acquiring accounts receivable, notes, or installment 
obligations arising out of the sale of tangible personal prop-
erty or the performance of services, 
"(C) leasing tangible personal property (but only if such 
leasing accounts for less than 50 pei"cent of its business), 
"(D) servicing debt obligations, 
"(E) carrying on incidental activities in comiection with 
its business described in subparagraphs (A), (B), (C), or 
(D),or 
"(F) any combination of the foregoing; 
"(2) all debt obligations of foreign obligors acquired by such 
corporation, and all tangible personal property not manufactured 
83 
Stat. 603. 
68A Stat. 369. 
78 Stat. 8 
24. 
85 STAT. ] 
PUBLIC LAW 92-9-APR. 1, 1971 
19 
or produced in the United States acquired by such corporation for 
leasing, are acquired and carried solely out of— 
"(A) the proceeds of the sale (including a sale in a trans-
action described in section 4919(a) (1)) by such corporation 
H use 491^9. 
(or by a domestic corporation described in section 4912 (b)(3) 
which is a member of a controlled group, as defined in section 
48 (c) (3) (C), of which such corporation is a member) of debt 
obligations of such corporation (or such domestic corpora-
tion) to persons other than— 
"(i) a United States person (not including a foreign 
branch of a domestic corporation or of a domestic part-
nership, if such branch is engaged in the commercial 
banking business and acquires such debt obligations in 
the ordinary course of such commercial banking busi-
ness) j 
"(ii) a foreign partnership in which such corporation 
(or one or more includible corporations in an affiliated 
group, as defined in section 1504, of which such corpora-
tion is a member) owns directly or indirectly (within 
the meaning of section 4915(a) (1)) 10 percent or more 
of the profits interest, or 
"(iii) a foreign corporation^ if such corporation (or 
one or more includible corporations in an affiliated group, 
as defined in section 1504, of which such corporation is a 
member) owns directly or indirectly (within the meaning 
of section 4915(a) (1)) 10 percent or more of the total 
combined voting power of all classes of stock of such 
foreign corporation, except to the extent such foreign 
corporation has, after having given advance notice to the 
Secretary or his delegate, sold its debt obligations to per-
sons other than persons described in clauses (i) and (ii) 
and this clause and is using the proceeds of the sale of 
such debt obligations to acquire the debt obligations of 
such corporation (or such other domestic corporation), 
"(B) the proceeds of payment for stock, or a contribution 
to the capital of such corporation, if the payment or contri-
bution was derived from the sale of debt obligations by one 
or more members of a controlled group (as defined in section 
48(c)(3)(C)) of which such corporation is a member (or 
by a corporation which would be such a member if it were a 
domestic corporation) to persons other than persons described 
in clauses (i), (ii), and (iii) of subparagraph (A) and such 
debt obligations, if acquired by United States persons, would 
be subject to the tax imposed by section 4911, 
83^star*26*2°^ 
"(C) retained earnings and reserves of such corporation 
to the extent attributable to the conduct of the lending or 
financing business outside the United States, or 
"(D) trade accounts and accrued liabilities, to the extent 
attributable to the conduct of the lending or financing busi-
ness outside the United States, which are payable by such 
corporation within 1 year (3 ^ears in the case of tax liabili-
ties) from the date they were incurred or accrued, and which 
arise in the ordinary course of the trade or business of the 
corporation otherwise than from borrowing; 
"(3) such corporation does not acquire any stock of foreign 
issuers or of domestic corporations or domestic partnerships other 
than stock of one or more members of a controlled group (as 
defined in section 48(c)(3)(C)) of which such corporation is a 
member (or of a corporation which would be a member if it were 
75-432 O - 72 - 4 
20 
PUBLIC LAW 92-9-APR. 1, 1971 
[85 STAT. 
Effective date. 
Ante, p. 18« 
Ante, p. 17. 
78 Stat. 833. 
26 u s e 4919. 
Effective date. 
79 Stat. 963. 
a domestic corporation) acquired as i)aymeiit for stock, or as a 
contribution to capital, of such corporation; and 
" (4) such corporation, in a manner satisfactory to the Secretary 
or his delegate, identifies the certificates representing its stock and 
debt obligations and maintains such records and accounts and 
submits such reports and other documents as may be necessary 
to establish that the requirements of the foregoing paragraphs 
have been met." 
(4) The amendments made by paragraph (1) shall apply with 
respect to acquisitions made after the date of the enactment of 
this Act. Tlie amendments made by paragraphs (2) and (3) shall 
take effect on the day after such date. 
(5) For purposes of section 4920(a) (3B) of the Internal Reve-
nue Code of 1954 (as amended by para^aph (2)) an election 
made under section 4920(d) of such Code (as in effect on the date 
of the enactment of this Act) shall be treated as an election made 
under such section 4920(a) (3B). For purposes of section 4915 
(e) (2) (C) of such Code (as amended by paragraph (1)), notice 
given under section 4915(c) (3) of such Code (as m effect on the 
date of the enactment of this Act) shall be treated as notice given 
under section 4915(e) (2) (C). 
(f) 
EXTENSION 
OF 
RESALE 
PERIOD FOR 
DEALERS 
IN 
FOREIGN 
SECURITIES.— 
(1) Section 4919(a) is amended by adding at the end thereof 
the following new sentence: "The President may by Executive 
order (which shall be applicable for such period and subject to 
such conditions as may be specified therein) extend the period of 
two business days specified in subparagraphs (A) and (B) of 
paragraph (3) to not to exceed 13 calendar days in the case of 
acquisitions made for customers and not for investment purposes, 
but any such extension shall be applicable only in cases where the 
acquiring dealer has submitted to the Secretary or his delegate 
in advance a satisfactory procedure for identifying which of his 
acquisitions are for customers and which are for investment 
purposes." 
(2) Section 4919(b)(1) is amended— 
(A) by striking out the period at the end of clause (B) 
and inserting in lieu thereof ", and"; and 
(B) by inserting after clause (B) the following new 
clause: 
"(C) in any case to which subparagraph (A) or (B) of 
subsection (a) (3) applies and which involves a sale or acqui-
sition occurring after the expiration of the two-business-day 
period specified therein, establishes that the sale or acquisition 
complied with the applicable Executive order issued under 
the last sentence of subsection (a) and that the procedure sub-
mitted under such sentence was followed." 
(3) The amendments made by this subsection shall apply with 
respect to acquisitions made after the date of the enactment of this 
Act. 
(g) 
FAILURE or FOREIGN CORPORATION TO FILE NOTICE RESPECTING 
ISSUANCE OF ADDITIONAL SHARES.— 
(1) Section 4920(b) (2) is amended by adding at the end there-
of the following new sentence: "Upon application by the issuing 
corporation within 2 years after the date on which additional 
shares described in the second sentence of this paragraph were 
issued, the Secretary or his delegate may waive the 15-day require-
ment set forth in subparagraph (D) (v) with respect to such 
additional shares if it is shown that the issuing corporation failed 
78 Stat. 824. 
Ante, p . 18. 
85 STAT. ] 
PUBLIC LAW 92-9-APR. 1, 1971 
21 
to file the notice required by such subparagraph due to inadvert-
ence and not with an intent to avoid the requirements of this 
chapter." 
(2) The requirement in the last sentence of section 4920(b) (2) 
(as added by paragraph (1) of this subsection) that the issuing 
corporation make its application within 2 years after the date on 
which additional shares were issued in order to qualify for a 
waiver shall be deemed satisfied, in any case in which such 2-year 
period has elapsed before the expiration of 60 days after the date 
of the enactment of this Act, if the issuing corporation involved 
makes the application within such 60-day period. 
(3) The amendment made by paragraph (1) shall take effect 
Effective date. 
on the date of the enactment of this Act. 
(h) 
CERTAIN MUTUAL FUNDS.— 
(1) Section 4920 is amended— 
26Usc492^J. 
(A) by inserting "subject to the provisions of subsection 
(e)," before "a domestic corporation which" in subsection 
(B) by inserting after "If, at the close of any succeeding 
quarter," in subsection (a) (3) (B) the following: "15 percent 
or more in value of the outstanding stock of the company is 
owned, directly, or indirectly (within the meaning of section 
4915(a) (1)), by one person, or"; and 
(C) by redesignating subsection (e) as (f), and by insert-
ing after subsection (d) the following new subsection: 
"(e) 
CERTAIN MUTUAL FUNDS.—Notwithstanding subsection (a) 
(3) (B), a domestic corporation described in such subsection shall not 
be treated as a 'foreign issuer', 'foreign obligor', or 'foreign issuer or 
obligor' with respect to any acquisition of stock or a debt obligation 
which is attributable to funds obtained by borrowing or through issu-
ance of its stock after March 24, 1971." 
(2) The amendments made by paragraphs (1)(A) and (C) 
shall apply with respect to acquisitions made after March 24,1971. 
The amendment made by paragraph (1) (B) shall take effect on 
the date of the enactment of this Act. 
(i) DEBT OBLIGATIONS W I T H MATURITY OF LESS THAN A YEAR.— 
(1) Subchapter A of chapter 41 is amended by adding at the 
end thereof the following new section: 
"SEC. 4921. DEBT OBLIGATIONS WITH MATURITY OF LESS THAN A 
YEAR. 
" ( a ) 
STANDBY AUTHORITY.— 
"(1) I N GENERAL.—If the President of the United States deter-
mines, after taking into account the domestic economic objectives, 
the balance of payments objectives, and the other international 
economic objectives of the United States, that it is desirable to 
apply the tax imposed by section 4911 to the acquisition of debt ga^statr'aela'!^' 
obligations of foreign obligors having a period remaining to 
maturity of less than 1 year, he may, from time to time by Execu-
tive order (applicable as provided in subsection (c)), extend the 
application of such tax, at such rate or rates (subject to the provi-
sions of subsection (b)) specified in such order, to the acquisition 
of such debt obligations specified in such order. The authority 
conferred by this paragraph may be exercised, at the discretion 
of the President, with respect to any classification of such debt 
obligations specified in paragraph (2), and with respect to acquisi-
tions occurring during such period of time, as may be specified in 
the Executive order. The President may by subsequent Executive 
order terminate or modify any Executive order previously issued 
under this section. 
Effective date. 
26 use 4911. 
22 
PUBLIC LAW 92-9-APR. 1, 1971 
[85 STAT. 
"(2) CLASSIFICATIONS.—For purposes of paragraph (1), debt 
obligations may be classified according to—' 
"(A) type of debt obligation, 
"(B) period of maturity, 
"(C) category of obligee, 
"(D) category of obligor, 
"(E) aggregate amounts subject to tax or not subject to 
tax, or 
"(F) other criteria similar to any of the foregoing. 
"(b) RATES OF TAX.—The rates of tax which may be specified in an 
Executive order issued under this section shall not exceed the rate 
applicable to debt obligations having a period remaining to maturity 
of at least 1 year, but less than 1^4 years. 
"(c) APPLICABILITY OF EXECUTIVE ORDER.—Any Executive order 
issued under this section shall apply with respect to acquisitions made 
after the date on which such Executive order is issued, except that in 
the case of any such order which subjects acquisitions to the tax which 
are not then subject to the tax, or which increases a rate of tax (as in 
effect without regard to such order), to the extent specified in such 
order, rules similar to the rules prescribed in paragraphs (2), (3), 
and (4) of section 3(c) of the Interest Equalization Tax Extension 
9
f
i n^r iQ^^• 
Act of 1967 shall apply. 
note. 
(ci) KEGULATIONS.—llie Secretary or his delegate may prescribe 
such regulations (not inconsistent with the provisions of this section 
or any Executive order issued and in effect under this section) as may 
be necessary to carry out the provisions of this section." 
(2) The table of sections for subchapter A of chapter 41 is 
amended by adding at the end thereof the following new item: 
"Sec. 4921. Debt obligations with maturity of less than a year." 
(j) PENALTY FOR FAILURE To FILE QUARTERLY RETURN OR REMIT 
TAX.— 
83 Stat. 727. 
^ ^ Sectlou 6651 is amended by adding at the end thereof the 
following new subsection: 
"(e) CERTAIN INTEREST EQUALIZATION TAX RETURNS.—The provi-
sions of this section shall apply with respect to returns of amounts 
withheld under section 4918(e)(7) 
(relating to withholding of 
interest equalization tax by participating firms) in the same manner 
and to the same extent as they apply with respect to returns specified in 
subsection (a) (1)." 
83 Stat. 268. 
(£) Sectiou 6680 is amended— 
(A) by inserting "(a) I N GENERAL.—" immediately 
before "In addition"; and 
(B) by adding at the end thereof the following new sub-
section : 
" ( b ) 
CROSS 
REFERENCE.— 
'Tor additions and penalties in case of failure to file interest 
equalization tax returns or pay or remit, see section 665L" 
Effective date. 
^3^ 'pj^g amendments made by this subsection shall apply 
with respect to returns required to be filed on or after the date 
of the enactment of this Act. 
(k) ELIMINATION OF KNOWLEDGE REQUIREMENT REGARDING FILING 
OF FALSE INTEREST EQUALIZATION TAX CERTIFICATES.— 
(1) Section 6681(a) is amended— 
(A) by striking out "knowingly"; and 
(B) bv striking out "shall be liable" and inserting in lieu 
thereof "shall, unless it is shown that such action is due to 
reasonable cause and not due to willful neglect, be liable". 
81 Stat. 148. 
81 Stat. 155, 
176. 
85 STAT. ] 
PUBLIC LAW 92-10-APR. 14, 1971 
23 
81 Stat. 155. 
26 u s e 6681. 
(2) Section 6681 (b) (1) is amended— 
(A) by striking out "A participating firm" and inserting 
in lieu thereof "Unless it is shown that such action is due 
to reasonable cause and not due to willful neglect, a par-
ticipating firm"; and 
(B) by striking out "knowingly". 
(3) Section 6681 (b) (2) is amended— 
(A) by striking out "A participating firm" and inserting 
in lieu thereof "Unless it is shown that such action is due 
to reasonable cause and not due to willful neglect, a par-
ticipating firm"; and 
(B) by striking out "knowingly" each place it appears. 
(4) The amendment made by this subsection shall apply with 
Effective date. 
respect to actions occurring after the date of the enactment of 
this Act. 
Approved April 1, 1971. 
Public Law 92-10 
AN ACT 
April 14, 1971 
To amend the tobacco marketing quota provisions of the Agricultural Adjustment 
[s. 789] 
Act of 1938, as amended. 
Burley tobacco. 
Marketing 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That the Agricultural 
Adjustment Act of 1938, as amended, hereinafter referred to as the quoTas 
"Act", is amended by adding immediately following section 318 a new 8/513^*120^' 
section 319 to read as follows: 
7 use 1281, 
1314d. 
'FARM POUNDAGE QUOTAS FOR BURLEY TOBACCO 
Referendum. 
"SEC. 319. (a) Notwithstanding any other provision of law, the Sec-
retary shall, within thirty days following the enactment of this section, 
proclaim national marketing quotas for burley tobacco for the three 
marketing years beginning October 1, 1971, and determine and 
announce the amount of the marketing quota for burley tobacco for the 
marketing year beginning October 1,1971, as provided in this section. 
"Within thirty days following such proclamation, the Secretary shall 
conduct a referendum of the farmers engaged in the production of the 
1970 crop of burley tobacco to determine whether they favor or oppose 
the establishment of farm marketing quotas on a poundage basis as 
provided in this section for the three marketing years beginning 
October 1,1971. If the Secretary determines that two-thirds or more of 
the farmers voting in such referendum approve marketing quotas on a 
poundage basis, marketing quotas as provided in this section shall be 
in effect for those three marketing years. If marketing quotas on a 
poundage basis are not approved by at least two-thirds of the farmers 
voting in such referendum, no marketing quotas or price support for 
burley tobacco shall be in effect for the marketing year beginning 
October 1, 1971. Thereafter, the provisions of section 312 of the Act ^69 stat. 557; 
shall apply: Provided^ That national marketing quotas for burley 
tobacco for any marketing year subsequent to the marketing year 
beginning October 1, 1971, shall be proclaimed as pi-ovided in this 
section. 
"(b) The Secretary shall determine and announce, not later than 
the February 1 preceding the second and third marketing years of 
any three-year period for which marketing quotas on a poundage basis 
70 Stat. 330. 
7 u s e 1312.