An Act to provide an extension of the interest equalization tax, and for other purposes
PL 90-59 (H.R.6098), enacted 07/31/1967

81 STAT. 
PUBLIC LAW 90-59-JULY 31, 1967 
145 
Public Law 90-59 
AN ACT 
To provide an extension of the interest equalization tax, and for other purposes. 
Be it enacted by 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 1967". 
(b) AMENDMENT OF 1954 CODE.—Except as otherwise expressly 
provided, whenever in this Act an amendment is expressed in terms of 
an amendment to a section or other provision, the reference is to a 
section or other provision of the Internal Revenue Code of 1954. 
SEC. 2. EXTENSION OF INTEREST EQUALIZATION TAX. 
Section 4911(d) is amended by striking out "July 31, 1967" and 
inserting in lieu thereof "July 31, 1969". 
SEC. 3. IMPOSITION OF TAX. 
(a) AMOUNT OF TAX.—Section 4911(b) is amended to read as fol-
lows : 
"(b) 
AMOUNT OF TAX.— 
"(1) RATES OF TAX.—Except as provided in paragraphs (2) 
and (3)— 
"(A) STOCK.—The tax imposed by subsection (a) on the 
acquisition of stock shall be equal to 15 percent of the actual 
value of the stock. 
"(B) 
DEBT OBLIGATIONS.—The tax imposed by subsection 
(a) on the acquisition of a debt obligation shall be equal to 
a percentage of the actual value of the debt obligation meas-
ured by the period remaining to its maturity and determined 
under column 11(A) of the following table: 
July 31, 1967 
[H. R. 6098] 
Interest Equali-
zation Tax Exten-
sion Act of 1967. 
79 Stat. 954. 
26 u s e 4911. 
78 Stat. 809. 
"I 
"If the period remaining to maturity is— 
At least 1 year, but less than 13^ years 
. 
_ 
_ . 
_ 
At least 13^ vears, but less than l]/^ vears. 
At least 13^ years, but less than 1 ^ years-
At least 1% vears, but less than 2)4, years. 
_ 
_ „ 
At least 23^ years, but less than 2 ^ vears 
_ _ 
_ _ 
At least 2 ^ years, but less than 33^ years. 
__ 
__ . 
At least 33^2 years, but less than 43^ years 
_ 
. 
_ 
At least 43^ years, but less than 53^ years 
At least 53^ years, but less than 63^ years 
At least 63^ years, but less than 73^ years 
At least 73^ years, but less than 83^2 years _ . 
At least 8 ^ years, but less than 93^2 years 
At least 93^ years, but less than 103^2 years 
_ 
_ _ 
At least 103^ years, but less than 113^ years, _ 
_ 
_ _ 
At least 113^ years, but less than 133^ years. 
At least 133^ years, but less than 163^ years __ _ 
At least 163^ years, but less than 183^ years 
At least 183^ years, but less than 213^ years 
_ _ 
At least 213^ years, but less than 2334 years. . 
At least 233^ years, but less than 263^ years 
At least 263^ years, but less than 283^2 years. 
_ _ 
_ . 
283^ years or more. _. 
_. _ ._ 
II 
The tax, as a percent-
age of actual value, 
is—• 
(A) 
1.05 
1.30 
1.50 
1.85 
2.30 
2.75 
3.55 
4.35 
5.10 
5.80 
6.50 
7.10 
7.70 
8.30 
9.10 
10.30 
11.35 
12.25 
13.05 
13.75 
14.35 
15.00 
(B) 
1.58 
1.95 
2.25 
2.78 
3.45 
4.13 
5.33 
6.53 
7.65 
8.70 
9.75 
10.65 
11.55 
12.45 
13.65 
15.45 
17.03 
18.38 
19.58 
20.63 
21.53 
22.50 
146 
PUBLIC LAW 90-59-JULY 31, 1967 
fel 
STAT. 
"(2) 
MODIFICATION or TAX BATES BY EXECUTIVE ORDER.— 
"(A) I N GENERAL.—If the President of the United States 
determines that the rates of tax imposed by paragraph (1), 
or provided in any prior Executive order issued pursuant to 
this paragraph, are lower or liigher than the rates of tax 
necessary to limit the total acquisitions by United States 
persons of stock of foreign issuers and debt obligations of 
foreign obligors within a range consistent with the balance-
of-payments objectives of the United States, he may by 
Executive order (effective as provided in subparagraph 
(C) (ii)) increase or decrease such rates of tax. 
"(B) MAXIMUM RATE.—No increase in the rates of tax 
which is prescribed in an Executive order issued under sub-
paragraph (A) shall— 
"(i) cause the rate applicable to the acquisition of 
stock to be higher than 22.5 j)ercent, or 
"(ii) cause the rates applicable to the acquisition of 
debt obligations to be higher than the rates set forth in 
column 11(B) of the table in paragraph (1) (B) of this 
subsection. 
"(C) 
APPLICATION or EXECUTIVE ORDERS.— 
"(i) Each increase and each decrease in the rates 
of tax which is prescribed in an Executive order issued 
under subparagraph (A) shall provide for the same 
proportionate increase or decrease in each rate of tax, 
except that any such rate may be rounded to the nearest 
0.01 percent. 
" (ii) Any Executive order issued under subparagraph 
(A) shall apply with respect to acquisitions made after 
the date on which such order is issued (or, if later, after 
the 29th day following the date of the enactment of this 
paragraph); except that in the case of any such order 
which increases the rates of tax (as in effect without re-
gard to such order), to the extent specified in such order, 
rules similar to the rules prescribed by paragraphs (2), 
(3), and (4) of section 3(c) of the Interest Equalization 
Tax Extension Act of 1967 shall apply. 
" (iii) If, by reason of an Executive order issued under 
subparagraph (A), the rates of tax in effect on the date 
of an acquisition described in paragraph (2) or (4) of 
section 3(c) of the Interest Equalization Tax Extension 
Act of 1967 are lower than the rates of tax in effect on 
January 25, 1967, the applicable rate of tax prescribed 
in such Executive order shall apply to such acquisition. 
"(3) RATES DURING INTERIM PERIOD.—In the case of acquisi-
tions of stock and debt obligations made after January 25, 1967, 
and before the thirtieth day after the date of the enactment of 
this paragraph, the tax imposed by subsection (a) shall be 22,5 
percent in the case of acquisition of stock, and shall be determined 
under column 11(B) (rather than column I I (A)) of the table in 
paragraph (1) (B) in the case of acquisition of a debt obligation. 
"(4) REGULATIONS.—The Secretary or his delegate may pre-
scribe such regulations (not inconsistent with the provisions of 
this section or of any Executive order issued and in effect under 
this section) as may be necessary to carry out the provisions of 
this section." 
Post, p. 147. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
147 
(b) APPLICATION OF EXECUTIVE ORDER 11198, ETC.— 
^° 5sc ^Jai^' 
(1) The table in section 4931(c) (relating to debt obligations note. 
with maturity from 1 to 3 years) is amended to read as follows: 
_ J | stat. 839; 
The tax, as a per- 
^"''«-
"If the period remaining 
centage of ac-
to maturity is: 
tual value, is: 
"At least 1 year, but less than 1 ^ years 
1. 58 percent 
At least 1 ^ years, but less than l^^ years 
1, 95 percent 
At least IV2 years, but less than 1% years 
2. 25 percent 
At least 1% years, but less than 2^4 years 
2. 78 percent 
At least 2 ^ years, but less than 2% years 
3. 45 percent 
At least 2% years, but less than 3 years 
4.13 percent." 
(2) Section 3(e) (1) (A) of the Interest Equalization Tax Ex-
tension Act of 1965 is amended to read as follows: 
^^ ^t^'- ^^s. 
"(A) by striking out subsection (c) (as amended by the 
Interest Equalization Tax Extension Act of 19G7) and re-
designating subsections (d) and (e) as subsections (c) and 
(d), respectively;". 
(c) 
EFFECTIVE DATE AND SPECIAL RULES.— 
(1) GENERAL RUiJE.—The amendments made by subsection (a) 
shall apply only with respect to acquisitions of stock or debt 
obligations made after January 25,1967. The amendment made by 
I)aragraph (1) of subsection (b) shall apply only with respect to 
acquisitions of debt obligations made after January 25, 1967, and 
before February 21, 1967 (the date on which the amendments 
made by section 3(e)(1) of the Interest Equalization Tax Ex-
tension Act of 1965 became effective). 
(2) PREEXISTING COMMITMENTS.—Except as provided in sec-
tion 4911(b) (2) (C)(iii) of the Internal Revenue Code of 1954 
(as added by such amendments), sucli amendments shall not ap-
ply to an acquisition— 
(A) made pursuant to an obligation to acquire which on 
January 25, 1967— 
(i) was unconditional, or 
(ii) was subject only to conditions contained in a for-
mal contract under which partial performance had oc-
curred; or 
(B) as to which on or before January 25, 1967, the acquir-
ing United States person (or, in a case where 2 or more United 
States persons are making acquisitions as part of a single 
transaction, a majority in interest of such persons) had 
taken every action to signify approval of the acquisition 
under the procedures ordinarily employed by such person (or 
j)ersons) in similar transactions and had sent or deposited for 
delivery to the foreign person from whom the acquisition was 
made written evidence of such approval in the form of a 
commitment letter, memorandum of terms, draft purchase 
contract, or other document setting forth, or referring to 
a document sent by the foreign person from whom the acqui-
sition was made which set forth, the principal terms of such 
acquisition, subject only to the execution of formal documents 
evidencing the acquisition and to customary closing condi-
tions. 
(3) PUBLIC OFFERINGS.—Such amendments shall not apply 
to an acquisition made on or before March 27, 1967, if— 
(A) a reijistration statement (within the meaning of the 
Securities Act of 1933) was in effect with respect to the stock 
'^^ stat. 74. 
or debt obligation acquired at tlie time ot its acquisition; 
Ante, p. 146. 
15 u s e 77a. 
Ante, p. 146. 
148 
PUBLIC LAW 90-59-JULY 31, 1967 
[81 STAT. 
(B) the registration statement was first tiled with the 
Securities and Exchange Commission on January 25, 1967, 
or within 90 days before that date; and 
(C) no amendment was filed with the Securities and Ex-
change Commission after January 25, 1967, and before the 
acquisition which had the effect of increasing the number of 
shares of stock or the aggregate face amount of the debt 
obligations covered by the registration statement. 
(4) OPTIONS, FORECLOSURES, AND CONVERSIONS.—Except as pro-
vided in section 4911(b) (2) (C) (iii) of the Internal Revenue 
Code of 1954 (as added by such amendments), such amendments 
shall not apply to an acquisition— 
(A) of stock pursuant to the exercise of an option or 
similar right (or a right to convert a debt obligation into 
stock), if such option or right was held on January 25, 1967, 
by the person making the acquisition or by a decedent from 
whom such person acquired the right to exercise such option 
or right by bequest or inheritance or by reason of such 
decedent's death, or 
(B) of stock or debt obligations as a result of a foreclosure 
by a creditor pursuant to the terms of an instrument held by 
such creditor on January 25,1967. 
(d) RETURNS.—If, by reason of the enactment of this Act, a per-
son incurs additional liability for interest equalization tax with re-
spect to acquisitions of stock or debt obligations made after January 
25, 1967, for which a return has been filed under section 6011(d) (1) 
78 Stat. 843. 
,^f ^]^g Internal Revenue Code of 1954 before the date of the enact-
ment of this Act, such person shall make an amended return showing 
such additional liability. If liability for interest equalization tax with 
respect to such acquisitions is initially created by reason of the enact-
ment of this section, the person incurring such liability shall make a 
return. The returns required to be made by this paragraph shall be 
filed on or before the last day of the month following the close of the 
calendar quarter in which the date of the enactment of this Act occurs 
or at such later time as the Secretary or his delegate may prescribe. 
SEC. 4. COMPLIANCE PROCEDURES. 
(a) EXEMPTION FOR PRIOR AMERICAN OWNERSHIP AND COMPLI-
80^st^'t^^isss.' 
ANCE.—Section 4918 is amended to read as follows: 
"SEC. 4918. EXEMPTION FOR PRIOR AMERICAN OWNERSHIP AND 
COMPLIANCE. 
Ante, p. 145. 
4i^^^ GENERAL RULE.—The tax imposed by section 4911 shall not 
apply to an acquisition of stock of a foreign issuer or a debt obligation 
of a foreign obligor if it is established in the manner provided in this 
section that— 
"(1) the person from whom such stock or debt obligation was 
acquired was a United States person throughout the period of 
his ownership or continuously since July 18, 1963, and was not 
ineligible, under the provisions of this chapter, to dispose of such 
stock or debt obligation as a United States person; and 
"(2) such person— 
"(A) had paid the tax imposed by section 4911 with re-
spect to the acquisition of such stock or debt obligation by 
such person; or 
"(B) acquired such stock or debt obligation without lia-
bility for payment of such tax. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
149 
"(b) ESTABLISHING EXEMPHON roR PRIOR AMERICAN OWNERSHIP 
AND 
COMPLIANCE.— 
"(1) CONCLUSIVE PROOF.—For purposes of the exemption for 
prior American ownership and compliance provided in subsection 
"'(A) a validation certificate, evidencing that the person 
from whom stock of a foreign issuer or a debt obligation of a 
foreign obligor was acquired was a person described in sub-
section (a), issued by the Secretary or his delegate (or by any 
officelr or employee of the United States designated by the 
Secretary or his delegate) and filed in accordance with the 
requirements prescribed by the Secretary or his delegate; or 
"(B) a written confirmation (referred to as an l E T clean 
confirmation) received by the person acquiring such stock or 
debt obligation from a participating firm acting as a broker 
in effecting the acquisition (or acting for its own account) 
which contains no reference to liability for the tax imposed 
by section 4911, 
Ante, p. us. 
shall be conclusive proof that such exemption applies with re-
spect to the acquisition of the stock or debt obligation described 
in such certificate or confirmation, if the f)erson making the ac-
quisition relies in good faith on the validity of such certificate 
or confirmation. 
"(2) OTHER PROOF.—If the person making an acquisition of 
stock or a debt obligation shows reasonable cause for his inability 
to establish such exemption under paragraph (1) he may fur-
nish other evidence to establish to the satisfaction of the Secretary 
or his delegate that such exemption is applicable to such 
acquisition. 
"(c) 
PARTIGIPATING FIRM.— 
"(1) DEFINITION.—For purposes of this section, a participating 
firm is a member or member organization of a national securities 
exchange or association registered with the Securities and Ex-
change Commission which satisfies the eligibility requirements set 
forth in paragraph (2). 
"(2) 
ELIGIBILITY REQUIREMENTS.— 
"(A) I N GENERAL.—A member or member organization of 
a national securities exchange or association registered with 
the Securities and Exchange Commission shall qualify as a 
participating firm if such member or member organization 
notifies the Secretary or his delegate that it— 
"(i) agrees to comply with the provisions of this 
chapter and with the documentation, recordkeeping, 
reporting, and auditing requirements prescribed by the 
Secretary or his delegate to implement such provisions; 
and 
"(ii) if such notification is made after August 14, 
1967, is complying with such provisions and require-
ments. 
"(B) 
PARTICIPATING FIRMS DURING INTERIM PERIOD.—Dur-
ing the period commencing July 15, 1967, and ending on 
August 14,1967, the following are deemed to be participating 
firms which satisfy the eligibility requirements of subpara-
graph (A) : 
"(i) all members and member organizations of the 
New York Stock Exchange; 
"(ii) all members and member organizations of the 
American Stock Exchange; and 
"(iii) members or member organizations of the Na-
tional Association of Securities Dealers, Inc., which 
reported net capital (as defined in rule 15c 3-1 under 
the Securities Exchange Act of 1984) of $750,000 in the 
Jf l'^^ ^^l' 
150 
PUBLIC LAW 90-59-JULY 31, 1967 
fel 
STAT. 
latest tinancial statement tiled with the Securities and 
Exchange Commission on form X-17A-5 prior to July 
13, 1967, or which effected at least 300 transactions with 
respect to the sale or acquisition of stock of foreign is-
suers or debt obligations of foreign obligors during 
either the week commencing on July 2,1967, or the week 
commencing on July 9,1967. 
"(C) TERMINATION OF STATUS.—The status of a member or 
member organization of a national securities exchange or 
association registered with the Securities and Exchange Com-
mission qualifying as a participating firm shall be terminated 
if— 
"(i) such member or member organization qualifies as 
a participating firm during the interim period described 
in subparagraph (B) and does not submit to the Secre-
tary or his delegate, on or before August 15, 1967, the 
notification described in subparagraph ( A ) ; 
"(ii) such member or member organization files a 
written request with the Secretary or his delegate to 
terminate such status; or 
"(iii) the Secretary or his delegate has reasonable 
cause to believe a participating firm is failing to comply 
with the statutory provisions and procedural require-
ments described in subparagraph (A), and notifies the 
participating firm of such noncompliance. 
Any termination of the status of a participating firm in 
accordance with this subparagraph shall be effective as of the 
date specified in a notice to such participating firm issued by 
the Secretary or his delegate which date shall be subsequent 
to the date on which information regarding the termination 
of such status is published for the purpose of informing the 
remaining participating firms and participating custodians. 
For purposes of this paragraph, an associate member or member 
organization of the New York Stock Exchange, the American 
Stock Exchange, or a national securities association registered 
with the Securities and Exchange Commission shall be deemed a 
member or member organization of such exchange or association. 
"(d) ISSUANCE OF I E T 
CLEAN CONFIRMATION BY PARTICIPATING 
FIRM.—A participating firm may issue an I E T clean confirmation (re-
ferred to in subsection (b) (1) (B)) in connection with an acquisition 
of stock of a foreign issuer or a debt obligation of a foreign obligor by 
a United States person— 
"(1) if such participating firm— 
"(A) acted as a broker in effecting such acquisition and 
received from another participating firm a written compari-
son or broker-dealer confirmation under subsection (e) which 
indicates that the exemption for prior American ownership 
and compliance provided in subsection (a) applies to such 
acquisition; 
"(B) acted as a broker in effecting both the sale and acqui-
sition on the same day of such stock or debt obligation and 
would have been entitled to issue a written comparison or 
broker-dealer confirmation under paragraph (e) which in-
dicates that the exemption for prior American ownership 
and compliance provided in subsection (a) applies to such 
acquisition if such acquisition had been effected by another 
participating firm; or 
"(C) sold such stock or debt obligati(m for its own ac-
count and is a person described in subsection (a) with respect 
to such acquisition; or 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
151 
"(2) if such acquisition was effected by such participatin/i; 
firm in a sale b^, or effected by, another participating firm on a 
national securities exchange registered with the Securities and 
Exchange Commission, or in a transaction in which such partici-
pating firm and the participating firm effecting the sale were 
members of a national association of securities dealers registered 
with the Securities and Exchange Commission, and if such 
acquisition was effected in accordance with rules of such exchange 
or such association which the Secretary or his delegate determines 
require acquisitions exempt from tax under this section to be 
effected in such a manner that the requirements of subsection (e) 
are satisfied. 
Any l E T clean confirmation issued under this subsection shall be 
clearly distinguishable from any other confirmation issued with re-
spect to an acquisition of stock of a foreign issuer or a debt obligation 
of a foreign obligor by a participating firm. 
"(e) SALES EFFECTED BY PARTICIPATING FIRMS IN CONNECTION W I T H 
EXEMPT ACQUISITIONS.—A participating firm selling, or effecting the 
sale of, stock of a foreign issuer or a debt obligation of a foreign 
obligor may issue a written comparison or broker-dealer confirmation, 
which indicates the exemption for prior American ownership and com-
pliance provided in subsection (a) applies to such acquisition, only if 
such participating firm has in its possession (except in the case of a 
sale for another participating firm or a participating custodian to 
which paragraph (4) applies) a statement, upon which such partici-
pating firm relies in good faith, executed under penalty of perjury 
by the person making the sale, establishing that such person is a 
United States person and is the owner of all stock of foreign issuers 
and debt obligations of foreign obligors carried in the records of such 
participating firm for the account of such person; and either— 
"(1) (A) at the close of business on July 14, 1967, carried such 
stock or debt obligation in its records (on a trade-date basis) for 
the account of the seller; and 
"(B) included such stock or debt obligation in the transition 
inventory referred to in subsection (g) filed or to be filed on or 
before the due date by such participating firm with the Secretary 
or his delegate in accordance wdth the provisions of such sub-
section ; 
"(2) after July 14,1967— 
" (A) sold for its own account such stock or debt obligation 
to the seller, or acting as broker effected the acquisition of 
such stock or debt obligation by the seller, if the exemption 
for prior American ownership and compliance provided in 
subsection (a) applied to such acquisition by reason of sub-
section (b) (1) ( B ) ; and 
"(B) continuously carried in its records on a trade-date 
basis for the account of the seller such stock or debt 
obligation; 
"(3) (A) sold for its own account such stock or debt obliga-
tion to the seller, or acting as a broker effected the acquisition of 
such stock or debt obligation by the seller, if, by reason of sub-
section (b)(1)(B) (or by reason of subsections (c) or (d) as 
in effect with respect to acquisitions before July 15, 1967), the 
exemption for prior American ownership and compliance pro-
vided by subsection (a) (or the exemption for prior American 
ownership provided by subsection (a) as in effect with respect 
to acquisitions before July 15, 1967) applied to such acquisition; 
and 
Ante, 
p. 145. 
152 
PUBLIC LAW 90-59-JULY 31, 1967 
[81 STAT. 
"(B) after July 14, 1967, received from the seller the identical 
stock certificates or evidences of indebtedness which it had pre-
viously delivered to the seller with respect to such acquisition by 
the seller; 
"(4) receives possession of such stock or debt obligation from 
another participating firm or from a participating custodian, 
together with a transfer of custody certificate, as provided in sub-
section (h); 
"(5) receives from the seller stock which was registered before 
July 19, 1963, in the name of the seller by a participating custo-
dian which acted as transfer agent or registrar in registering such 
stock; 
"(6) receives a validation certificate issued by the Secretary or 
his delegate evidencing that the seller is a person described in 
subsection (a) with respect to such stock or debt obligation and 
files such certificate with the Secretary or his delegate in accord-
ance with the requirements prescribed by the Secretary or his 
delegate; or 
" (7) withholds from the proceeds of such sale (with the consent 
of the seller) an amount equal to the tax which would be imposed 
under section 4911 on the acquisition of such stock or debt obliga-
tion by the purchaser if such acquisition vrere not exempt from 
such tax under this section. 
The withholding under paragraph (7) shall be treated as the collec-
tion of the tax imposed under section 4911 on the acquisition by the 
seller of such stock or debt obligation and shall be paid over to the 
Secretary or his delegate or released to the seller at such time and in 
such manner as provided in regulations prescribed by the Secretary or 
his delegate. 
"(f) 
PARTICIPATING CUSTODIAN.— 
"(1) DEFINITION.—For purposes of this section, a participating 
custodian is a bank or trust company insured by the Federal De-
posit Insurance Corporation which satisfies the eligibility require-
ments set forth in paragraph (2). 
"(2) 
ELIGIBILITY REQUIREMENTS.— 
"(A) I N GENERAL.—A bank or trust company insured by 
the Federal Deposit Insurance Corporation may become a 
participating custodian if such bank or trust company noti-
fies the Secretary or his delegate that it— 
"(i) agrees to comply with the provisions of this chap-
ter and the documentation, record-keeping, reporting, 
and auditing requirements prescribed by the Secretary 
or his delegate to implement such provisions, and 
"(ii) if such notification is made after August 14, 
1967, is complying with such provisions and require-
ments. 
"(B) 
PARTICIPATING CUSTODIANS DURING INTERIM PERIOD.— 
During the period commencing July 15, 1967, and ending 
on August 14, 1967, Federal Reserve member banks which 
are classified as reserve city banks are deemed to be partici-
pating custodians which satisfy the eligibility requirements 
of subparagraph (A). 
"(C) TERMINATION OF STATUS.—The status of a bank or 
trust company insured by the Federal Deposit Insurance 
Corporation as a participating custodian shall be termi-
nated, if— 
"(i) such bank or trust company qualifies as a par-
ticipating firm during the interim period described in 
subparagraph (B) and does not submit to the Secretary 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
153 
or his delegate, on or before August 15,1967, the notifica-
tion described in subparagraph (A); 
"(ii) such bank or trust company files a written re-
quest with the Secretary or his delegate to terminate such 
status; or 
"(iii) the Secretary or his delegate has reasonable 
cause to believe a participating custodian is failing to 
comply with the statutory provisions and procedural re-
quirements described in subparagraph (A), and notifies 
the participating custodian of such noncompliance. 
Any termination of the status of a participating custodian in 
accordance with this subparagraph shall be effective as of 
the date specified in a notice to such participating custodian 
issued by the Secretary or his delegate which date shall be 
subsequent to the date on which information regarding the 
termination of such status is published for the purpose of 
informing the remaining participating custodians and par-
ticipating firms. 
"(g) FILING or TitiVNSiTioN INVENTORY.—A participating firm and 
participating custodian which qualifies before August 15, 1967, shall, 
on or before August 15, 1967, file an inventory (designated as a tran-
sition inventory) with the Secretary or his delegate which shall 
include all stock of foreign issuers and debt obligations of foreign 
obligors carried in its records (on a trade-date basis) by such partici-
pating firm or participating custodian as of the close of business on 
July 14, 1967 (excluding, in the case of a member or member organi-
zation which becomes a participating firm after July 15, 1967, and in 
the case of a bank or trust company which becomes a participating 
custodian after July 15, 1967, stock and debt obligations not also car-
ried in its records (on a trade-date basis) as of the close of business 
on the day prior to the day on which it became a participating firm 
or participating custodian), together with such information as may 
be required by the Secretary or his delegate. 
"(h) 
TRANSFER OF CUSTODY CERTIFICATE.— 
"(1) NATURE OF CERTIFICATE.—A certificate (designated as a 
transfer of custody certificate) may be issued' in accordance with 
paragraph (2) by a participating firm or participating custodian 
in connection with a delivery of stock of foreign issuers or debt 
obligations of foreign obligors which are carried in its records for 
the account of a United States person to another participating 
firm or participating custodian. 
" (2) AUTHORIZED TRANSFERS OF CUSTODY.—A participating firm 
or participating custodian shall issue a transfer of custody certifi-
cate only if, with respect to the stock or debt obligations described 
in such certificate, it has in its possession a statement, upon which 
it relies in good faith, executed under penalty of perjury, by the 
person for whose account the delivery is being made, establishing 
that such person is a United States person and is the owner of all 
stock of foreign issuers and debt obligations of foreign obligors 
carried in its records for the account of such person, and if either— 
"(A) such participating firm or participating custodian— 
"(i) carried in its records (on a trade-date basis) at 
the close of business on July 14, 1967, for the account of 
a United States person the stock or debt obligation de-
scribed in the transfer of custody certificate; and 
"(ii) includes such stock or debt obligation in the 
transition inventory referred to in subsection (g) filed or 
to be filed on or before the due date by such participating 
154 
PUBLIC LAW 90-59-JULY 31, 1967 
[81 STAT. 
firm with tlie Secretary or his delegate in accordance 
with the provisions of such subsection; 
"(B) such participating firm or participating custodian 
received a like amount of stock or debt obligations described 
in the transfer of custody certificate from another participat-
ing firm or participating custodian accompanied by a transfer 
of custody certificate with respect to such stock or debt 
obligation; 
"(C) such participating firm— 
"(i) effected as broker (or for its own account) the 
acquisition of the stock or debt obligation described in 
the transfer of custody certificate, and the exemption for 
prior American ownership and compliance provided in 
subsection (a) applied to such acquisition by reason of 
subsection (b) (1) ( B ) ; and 
"(ii) continuously carried in its records for the ac-
count of the person who acquired such stock or debt ob-
ligation, or received from such person, the identical 
stock certificates or evidences of indebtedness which it 
had previously delivered to such person in connection 
with such acquisition; 
"(D) such participating custodian received an l E T clean 
confirmation in connection with the acquisition of the stock 
or debt obligation described in the transfer of custody certifi-
cate for the person for whose account such stock or debt obli-
gation is carried in its records; or 
"(E) conditions set forth in regulations prescribed by the 
Secretary or his delegate are met. 
"(i) CERTAIN DEBT OBLIGATIONS ARISING OUT OF LOANS TO ASSURE 
RAW MATERIAL SOURCES.—Under regulations prescribed by the Secre-
tary or his delegate, subsection (a) shall not apply to the acquisition 
by a United States person of any debt obligation to which section 
J8 Stat. 817; 
4914(d) applied where the acquisition of the debt obligation by such 
' "^"^ ''°' 
person is made with an intent to sell, or to offer to sell, any part of 
such debt obligation to United States persons. The preceding sentence 
shall not apply if the tax imposed by section 4911 has applied to any 
prior acquisition of such debt obligation. 
"(j) REGULATIONS.—The Secretary or his delegate shall prescribe 
such regulations as may be necessary to carry out the purposes of this 
section." 
78 Stat. 843. 
^j^^ RETURN REQUIREMENTS.—Sectlou 6011(d)(1) is amended to 
read as follows: 
" ( 1 ) 
I N GENERAL.— 
"(A) Every person shall make a return for each calendar 
quarter during which he incurs liability for the tax imposed 
by section 4911, or would so incur liability but for the pro-
Ante, p. 148. 
visions of section 4918. The return shall, in addition to such 
other information as the Secretary or his delegate may by 
regulations require, include a list of all acquisitions made 
by such person during the calendar quarter for which exemp-
tion is claimed under section 4918 accompanied by a copy of 
any return made during such quarter under subparagraph 
(B). No return or accompanying evidence shall be required 
under this paragraph, in connection with any acquisition 
with respect to which—• 
"(i) an l E T clean confirmation is obtained in accord-
ance with the provisions of section 4918(b), 
"(ii) a validation certificate described in section 
4918(b) issued to the person from whom such acquisition 
80 Stat. 1585. 
Ante, 
p. 145. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
155 
was made is obtained, and such certificate was filed in 
accordance with the requirements prescribed by the 
Secretary or his delegate, or 
"(iii) a validation certificate was obtained by the 
acquiring person after such acquisition and before the 
date prescribed by section 6076(a) for the filing of the '"^'^^• 
return, 
nor shall any such acquisition be required to be listed in any 
return made under this paragraph. 
"(B) Every person who incurs liability for the tax im-
posed by section 4911 shall, if he disposes of the stock or debt 
^"'e, p. 145. 
obligation with respect to which such liability was incurred 
prior to the filing of the return required by subparagraph 
(A), make a return of such tax." 
(c) TIME FOR FILING RETURNS.—The text of section 6076 is amended 
^^ ^'^* ^'*'* 
to read as follows: 
"(a) Each return made under section 6011 (d) (1) (A) shall be filed ^"'*' P- ^^^• 
on or before the last day of the first month following the period for 
which it is made. 
"(b) Each return made under section 6011(d) (1) (B) shall be filed 
on or before the date of disposition of the stock or debt obligation 
with respect to which such return is made." 
(d) 
PENALTIES FOR FALSE STATEMENTS, ETC.— 
(1) Section 6681 is amended by striking out subsections (a) 
^^ stat. 845. 
and (b) and inserting in lieu thereof the following: 
"(a) 
FALSE STATEMENT OF UNITED STATES PERSON STATUS.—In ad-
dition to the criminal penalty imposed by section 7241, any person 
^°®'' P- ^^^ 
who, for purposes of section 4918(e), knowingly executes a statement 
^"'e- P- i^s. 
as to his status as a United States person and ownership of stock and 
debt obligations which contains a misstatement of material fact shall 
be liable to a penalty equal to 125 jjercent of the amount of the tax im-
posed by section 4911 on the acquisition of any stock or debt obliga-
tion which, but for the provisions of section 4918, would be payable by 
the person acquiring such stock or debt obligation. 
"(b) 
LIABILITY OF PARTICIPATING FIRMS AND PARTICIPATING CUS-
TODIANS.— 
"(1) CONFIRMATIONS AND COMPARISONS.—A participating firm 
described in section 4918(c) shall be liable to a penalty equal to 
125 percent of the amount of tax imposed by section 4911 on 
the acquisition of stock or a debt obligation which, but for the 
provisions of section 4918, would be payable by the person ac-
quiring the stock or debt obligation, if such participating firm 
knowingly— 
"(A) furnishes an l E T clean confirmation referred to in 
section 4918(b) other than in accordance with the provisions 
of section 4918(d), 
" (B^ furnishes a written comparison or broker-dealer con-
firmation other than in accordance with the provisions of 
section 4918(e), or 
"(C) violates the rules of an exchange or association re-
ferred to in section 4918(d) (2) and as a result thereof an 
l E T clean confirmation referred to in section 4918(b) is 
issued under section 4918(d)(2) by another participating 
firm. 
" (2) TRANSFER OF CUSTODY CERTIFICATES.—A participating firm 
or participating custodian (described in section 4918(f)) shall be 
liable to a penalty equal to 125 percent of the amount of tax im-
posed by section 4911 on the acquisition of stock or a debt obli-
gation which, but for the provisions of section 4918, would be pay-
156 
PUBLIC LAW 90-59-JULY 31, 1967 
fel 
STAT. 
Ante, p. 148. 
78 Stat. 847. 
able by the person acquirinj^ the stock or debt obligation, if such 
firm or custodian knowingly issues a transfer of custody certifi-
cate (described in section 4918(h) (1)) which contains a misstate-
ment of material fact or knowingly issues a transfer of custody 
certificate other than in accordance with the provisions of section 
4918." 
78 Stat. 846. 
(£) Scctlon 6681(e) is amended to read as follows: 
"(e) PENALTY To B E IN LIEU OF TAX IN CERTAIN CASES.—Unless 
the person acquiring the stock or debt obligation involved had reason 
to know that the l E T clean confirmation which he received was false 
in any material respect, the penalty under subsection (b) (1) shall be 
in lieu of any tax on the acquisition of stock or debt obligation under 
Ante, p. 145. 
sCCtioU 4 9 1 1 . " 
(3) Section 6681 is amended by adding at the end thereof the 
following new subsection: 
"(f) FALSE APPLICATION FOR VALIDATION CERTIFICATE, ETC.—Any 
person who knowingly supplies information in connection with an 
application for a validation certificate (described in section 4918 
(b)(1)(A)) which contains a misstatement of a material fact, or 
w^ho knowingly obtains or uses a validation certificate for the purpose 
of establishing an exemption for prior American ownership and com-
pliance under section 4918(a) other than in accordance with the provi-
sions of section 4918, shall be liable to a penalty equal to 125 percent 
of an amount equal to the tax which would have been imposed by 
section 4911 if the stock or debt obligation described in such certifi-
cate had been acquired by a person required to pay such tax on the 
date of application." 
(e) CRIMINAL PENALTY.—Section 7241 is amended by inserting 
" ( a ) " before "Any person" and by adding at the end thereof the fol-
lowing new subsection: 
"(b) Any person who, on or after the date of the enactment of the 
Interest Equalization Tax Extension Act of 1967, willfully executes, 
for purposes of section 4918(e), a statement as to his status as a 
United States person and ownership of stock and debt obligations 
which is known by him to be fraudulent or to be false in any material 
respect shall be guilty of a misdemeanor and, upon conviction thereof, 
shall for each offense be fined not more than $1,000, or imprisoned 
not more than 1 year, or both." 
(f) CONFORMING AMENDMENT.—Section 4920(a)(5) is amended 
by striking out "execute a certificate of American ownership (within 
the meaning of section 4918)" and insert in lieu thereof "be consid-
ered a United States person". 
(g) CLERICAL AMENDMENT.—The table of sections for subchapter 
A of chapter 41 is amended by striking out the item relating to section 
4918 and inserting in lieu thereof the following: 
"Sec. 4J)18. Exemption for prior American ownership and com-
pliance." 
(h) EFFECTIVE DATE.—The amendments made by this section (other 
than by subsections (d) and (e)) shall apply wath respect to acquisi-
tions of stock and debt obligations made after July 14, 1967. The 
amendments made by subsections (d) and (e) shall take effect on the 
date of the enactment of this Act. 
(i) INTERIM PROCEDURES.—The Secretary of the Treasury or his 
delegate may establish such procedures and require the filing of such 
information and the maintenance of such records as may be neces-
sary in order to permit an orderly transition in respect to market pro-
cedures for the period beginning on July 15, 1967, and ending on 
August 14, 1967, pursuant to which participating firms and par-
ticipating custodians may issue l E T clean confirmations, written com-
79 Stat. 962. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
157 
Ante, p. 148. 
parisons, broker-dealer confirmations, and transfer of custody certifi-
cates without satisfying the specific procedural requirements provided 
in section 4918 of the Internal Revenue Code of 1954 as amended by 
subsection (a) of this section. 
SEC. 5. OTHER AMENDMENTS. 
(a) COMMISSIONS PAID TO FOREIGN BRANCH OFFICES OF DOMESTIC 
(1) Section 4912(b) (2) (B) is amended by adding at the end 7/|tft'^96f °' 
thereof the following new sentence: "The preceding sentence shall 
not apply to a transfer of money or other property by a domestic 
corporation or partnership to a branch office with respect to which 
there is an election in effect under paragraph (5) of section 4920 
(a), to the extent that such transfer is in payment of a com- 
^s stat. 837; 
mission on a transaction initiated by such branch office and such 
commission is not in excess of the commission which such domestic 
corporation or partnership would pay to another domestic cor-
poration or partnership in a similar transaction entered into at 
arm's length." 
(2) The amendment made by paragraph (1) shall apply with 
respect to transfers made on or after the date of the enactment 
of this Act. 
(b) EXCLUSION OF ACQUISITIONS ARISING OUT OF SALES OF CERTAIN 
FOREIGN REAL PROPERTY.— 
(1) Section 4914(b) (14) is amended to read as follows: 
79 stat. 958. 
"(14) FOREIGN PROPERTY.—Of debt obligations arising out of 
the sale of— 
"(A) tangible property located outside the United States 
which was held by the person acquiring such obligation for 
his personal use, or 
"(B) real property (other than real property to which 
subparagraph (A) applies) located outside the United States 
and owned, on July 18, 1963, by— 
"(i) the person acquiring such obligation, 
"(ii) a decedent who was a United States person on 
the date of his death, if such real property was trans-
ferred to the person acquiring such obligation by rea-
son of the death of the decedent, or 
"(iii) a LTnited States person who after July 18, 1963, 
transferred such property (whether or not for considera-
tion) to a trust created by him for the benefit of the 
members of his family (within the meaning of section 
318(a)(1)), if such trust is the person acquiring such 
esA stat. 99. 
obligation." 
(2) The amendment made by paragraph (1) shall apply only 
with respect to acquisitions made on or after the date of the 
enactment of this Act. 
(c) EXCLUSION OF CERTAIN ACQUISITIONS BY RESIDENTS NOT 
CITIZENS.— 
(1) Section 4914(b) is amended by adding at the end thereof 
^s stat. 814. 
the following new paragraph: 
"(15) 
CERTAIN ACQUISITIONS BY RESIDENTS NOT CITIZENS.—Of 
stock or debt obligations by an individual who is a resident but not 
a citizen of the United States, during the 90-day period beginning 
on the date such individual first became a resident of the United 
States." 
(2) Section 4914 (j) (2) is amended by adding at the end thereof 
the following new sentence: "For purposes of this chapter, if, after 
February 27, 1967, a United States person sells or otherwise dis-
poses of stock or a debt obligation to the acquisition of which 
78 Stat. 824. 
158 
PUBLIC LAW 90-59-JULY 31, 1967 
[81 STAT. 
subsection (b)(15) applied, such person shall not, with respect 
to that stock or debt obligation, be considered a United States 
person." 
(3) The amendment made by paragraph (1) shall apply with 
respect to acquisitions made after July 18,1963. 
(d) 
EXPORT CREDIT TRANSACTIONS GUARANTEED BY UNITED STATES 
78 Stat. 815. 
" 
(1) Sectlou 4914(c) (1) Is amended— 
(A) by striking out "to such obligor" in the matter 
preceding subparagraph (A) ; and 
(B) by inserting before "the United States person" in 
subparagraph (B) "such sale is made to such foreign obligor 
and". 
(2) The amendments made by paragraph (1) shall apply with 
respect to acquisitions made on or after the date of the enactment 
of this Act. 
(e) 
CERTAIN SALES OF ORES OR MINERAUS BY UNITED STATES 
PERSONS.— 
(1) Section 4914 (c) (5) is amended by adding at the end thereof 
(after and below subparagraph (B)) the following new sen-
tence : 
"For purposes of clause (iii) of subparagraph (A) (and for 
purposes of determining whether a debt obligation arises out of 
a loan described in subparagraph (B) in a case where the ores, 
minerals, or derivatives involved are obtained under a contract 
described in such clause), a contract shall be deemed to have been 
entered into on or before July 18, 1963, if it is entered into after 
such date and before January 26, 1967, and is a substitute for a 
contract, which has been canceled or terminated, between the 
same parties which was entered into on or before July 18, 1963; 
except that the total amount of the acquisitions excluded by this 
paragraph on the basis of a contract entered into after July 18, 
1963, which is deemed by this sentence to have been entered into 
on or before such date shall not exceed the total amount of the 
acquisitions which could have been excluded by this paragraph 
on the basis of the earlier contract for which such contract was 
substituted." 
(2) The amendment made by paragraph (1) shall apply with 
respect to acquisitions made on or after the date of the enactment 
of this Act. 
(f) REACQUISITION OF CERTAIN EXPORT DEBT OBLIGATIONS.— 
(1) Section 4914(c) is amended by renumbering paragraph 
(7) as (8), and by inserting after paragraph (6) tlie following 
new paragraph: 
"(7) 
REACQUISITION OF CERTAIN EXPORT DEBT OBLIGATIONS.— 
If paragraph (1), (2), or (6) of this subsection applied to the 
acquisition of a debt obligation by a United States person and such 
debt obligation is transferred by such United States person to a 
person other than a United States person (and subsection 
(j) (1) (A) (iii) would have applied if such transfer had been to 
a United States person), the tax imposed by section 4911 shall 
not apply to the reacquisition of such debt obligation by such 
United States person from such person." 
(2) The amendment made by paragraph (1) shall apply with 
respect to reacquisitions made on or after the date of the enact-
ment of this Act. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
159 
(g) LESS DEVELOPED COUNTRY SHIPPING COMPANIES.— 
(1) Section 4916(c) is amended— 
^s stat. 828. 
(A) by redesignating subparagraph (B) of paragraph (1) 
as subparagraph (C); 
(B) by striking out subparagraph (A) of paragraph (1) 
and inserting in heu thereof the following: 
"(A) meets the requirements of section 955(c) (1); 
^^ ^*°'- ^°^2-
"(B) (i) meets the requirements of section 955(c) (2), and 
"(ii) on each day of such applicable periods, is owned (as 
determined under section 958(a)), to the extent of at least 80 
^^ ^*^*- ^°^*-
percent of each class of its stock, by United States persons 
or residents of one or more less developed countries; or"; 
(C) by striking out the last sentence of paragraph (1) and 
inserting in lieu thereof the following: "A foreign partner-
ship, as defined in section 7701(a) (2) and (5), the jxssets, 
^^A stat. 911. 
gross income, and ownership of which, for the applicable 
periods set forth in paragraph (3), satisfy the requirements 
of subparagraph (A), (B), or (C) of the first sentence of 
this paragraph, shall be treated as a less developed country 
corporation for purposes of this section."; 
(D) by strikmg out "subparagraphs (A) and (B)" in 
paragraphs (2) (A) and (3) and insarting in lieu thereof 
"subparagraphs (A), (B), and (C)"; and 
(E) by striking out "subparagraph (B)" in paragraph (2) 
(C) and inserting in lieu thereof "subparagraph (C)". 
(2) The amendments made by paragraph (1) shall apply with 
respect to acquisitions made after the date of the enactment of this 
Act. 
(h) INTERNATIONAL MONETARY STABILITY EXCLUSION.— 
(1) Section 4917(d) is amended by— 
'^ s*«* ^^o-
(A) striking out "after the date of the enactment of the 
Interest Equalization Tax Extension Act of 1965"; 
(B) striking out "5 percent" and inserting in lieu thereof 
"1 percent"; and 
(C) striking out "25 percent" and inserting in lieu thereof 
"5 percent". 
(2) The amendments made by paragraph (1) shall apply with 
respect to acquisitions made after July 18,1963. 
(3) If, with respect to an acquisition after July 18, 1963, and 
before the date of enactment of this Act, by a State or political 
subdivision, or by any agency or instrumentality thereof, of stock 
or a debt obligation which is all or part of an original or new 
issue to which an Executive order issued under section 4917(a) 
^* ^*^'- ^3°-
is applicable (other than an Executive order which is applicable 
to a limited aggregate amount of such issues), the notice of acqui-
sition required by section 4917(a) is filed on or before the 60th day 
after the date or enactment of this Act, such notice shall be con-
sidered as filed on or before the last day specified in the regula-
tions prescribed by the Secretary or his delegate under section 
4917(a). 
(4) No interest shall be paid with respect to any credit or refund 
allowed or made by reason of the application of this subsection. 
(i) RESALES OF DEBT OBLIGATIONS BY UNITED STATES DEALERS.— 
(1) Sections 4919(a) (2) (A) (ii) and 4919(a) (2) (B) (ii) are 
each amended by striking r)ut "on the same or the next business 
85-622 0-68—13 
78 Stat. 833. 
160 
PUBLIC LAW 90-59-JULY 31, 1967 
[81 STAT. 
day" and inserting in lieu thereof "within 30 days after the day 
of purchase". 
'« ^*^*- '23- 
(2) Section 4919(b) (3) is amended— 
(A) by striking out in subparagraph (A) (ii) "on the day 
of purchase or the next business day" and inserting in lieu 
thereof "within 30 days after the day of purchase"; 
(B) by striking out in the sentence following subpara-
graph (A) (ii) "on the day on which it was purchased or the 
next business day" and inserting in lieu thereof "within 30 
days after the day of purchase"; 
(C) by striking out "or" at the end of subparagraph 
( B ) ( i ) ; 
(D) by striking out "or debt obligation" in subparagraph 
(B) (ii) and by adding "or" at the end of such subparagraph; 
(E) by adding after subparagraph (B) (ii) the following: 
"(iii) purchased a debt obligation which he resold 
within 30 days after the day of purchase to a person other 
than a United States person,"; and 
(F) by striking out in the matter following subparagraph 
(B) (iii) (as added by subparagraph (E) of this paragraph) 
"on the day of purchase or the next business day" and by 
inserting before the period at the end of subparagraph (B) 
the following: "on the day of purchase or the next business 
day in the case of stock, or within 30 days after the day of 
purchase in the case of a debt obligation". 
(3) The amendments made by this subsection shall apply only 
with respect to an acquisition by a dealer of a debt obligation 
which is resold by such dealer to another dealer (whether such 
acquisition by the former dealer occurs before or after such resale) 
after January 25,1967. 
(j) 
FOREIGN LENDING AND FINANCE BUSINESSES.— 
78 Stat. 836. 
(1) Sectlou 4920(a) (3) is amended hj striking out the period 
at the end of subparagraph (B) and inserting in lieu thereof 
"; or", and by adding after subparagraph (B) the following new 
subparagraph: 
"(C) a domestic corporation which together with its sub-
sidiaries (if any) — 
"(i) is primarily engaged in the lending or finance 
business through offices located outside the United States, 
and 
"(ii) holds itself out, in the course of such business 
outside the United States, as lending money to the public 
generally, 
and which elects to be treated as a foreign issuer or obligor 
for purposes of this chapter. The election under the preceding 
sentence shall be made on or before the 60th day after the 
date of the enactment of this subparagraph or the 60th day 
after the organization of the corporation, whichever is later, 
under regulations prescribed by tne Secretary or his delegate. 
Any such election shall be effective as of January 26, 1967, 
or the date of the organization of the corporation, whichever 
is later, and shall remain in effect until revoked. If, at the 
close of any succeeding calendar quarter, the corporation 
ceases to meet the requirement of clause (i) or clause (ii), the 
election shall thereupon (with respect to quarters after such 
78 Stat. 835. 
Ante, 
p. 160. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
161 
calendar quarter) be deemed revoked. When an election is 
revoked no further election may be made." 
(2) Section 4920(a) is further amended by inserting after par-
agraph (3) the following new paragraph: 
"(3A) For purposes of paragraph (S) (C) — 
"(A) the term 'lending or finance business' has the mean- ^^^^^"1^^^^°^^',', 
ing given it by section 542(d) (1); except that for such "Ts'^sta't.^To.^^ 
purposes the term '60 months' appearing in subparagraph 
(B) (i) of such section shall be deemed to read '48 months' 
and the subsequent portion of such subparagraph (B)(i) 
shall be disregarded; 
"(B) a corporation shall be considered a 'subsidiary' of 
another corporation only if stock possessing at least 50 per-
cent of the voting power of all classes of its stock is directly 
or indirectly owned by such other corporation and the two 
corporations are aifiliated with each other; and 
"(C) a corjK)ration primarily engaged in lending money 
to one or more other corporations each of which is affiliated 
with it and satisfies the requirements of clauses (i) and (ii) 
of paragraph (3) (C) shall itself be deemed to satisfy such 
requirements. 
For purposes of this paragraph, two corporations are 'affiliated' 
with each other if they are members (or would be members if they 
were both domestic corporations) of the same affiliated group 
(within the meaning of section 1504)." 
^^^ ^*^*- ^^^• 
(3) Section 4920(a) (4) (C) is amended by striking out "para-
graph (3) (B)" and inserting in lieu thereof "subparagraph (B) 
or (C) of paragraph (3)". 
(k) 
CERTAIN FINANCING COMPANIES,— 
(1) Section 4920(a) is amended by inserting after paragraph 
(3A) 
(as added by subsection (j)(2)) 
the following new 
paragraph: 
"(3B) CERTAIN DOMESTIC FINANCING COMPANIES.—The terms 
"Foreign is-
'foreign issuer', 'foreign obligor', and 'foreign issuer or obligor' obfi^or." ""^^^^^ 
also mean a domestic corporation if— 
"(A) such corporation is engaged in the business of 
acquiring— 
" (i) debt obligations arising out of the sale of tangible 
personal property produced, manufactured, assembled, 
or extracted by one or more includible corporations in 
an affiliated group (as determined under section 48(c) 
(3) (C)) of which such corporation is a member, 
^^ ^*^* ^^^• 
"(ii) debtobligationsarisingoutof the sale of tangible 
personal property received as part or all of the consid-
eration in sales of property described in clause (i), 
"(iii) debt obligations arising out of the sale of tan-
gible personal property received as part or all of the con-
sideration in sales of propert;^ described in clause (ii), 
"(iv) debt obligations arising out of the sale of tangi-
ble property or property described in section 4914(c) (3) 
(A) or services (or any combination thereof) by one or 
78 stat. 8i6. 
more includible corporations in an affiliated group (as 
determined under section 1054) of which such corpora-
tion is a member, if at least 15 percent of the purchase 
price of each such sale is attributable to the sale of prop-
78 Stat. 833 
78 Stat. 811 
78 Stat. 824. 
162 
PUBLIC LAW 90-59-JULY 31, 1967 
[81 STAT. 
erty manufactured, produced, grown, or extracted in the 
United States by one or more such includible corpora-
tions, or to the performance of services by one or more 
such includible corporations, or to both, 
"(v) debt obligations arising out of loans to dealers 
or distributors primarily engaged in the business of sell-
ing property described in clause (i), (ii), or (iii), the 
proceeds of which are used by such dealers or distributors 
m such business, or 
"(vi) any combination of the foregoing, 
"(B) at least 90 percent of the actual value of the debt 
obligations acquired by such corporation during each calendar 
quarter consists of debt obligations described in subparagraph 
"(C) such corporation acquires the debt obligations de-
scribed in subparagraph (A) solely out of the proceeds of the 
sale (including a sale in a transaction described in section 
4919(a) (1) by such corporation (or by a domestic corpora-
tion described in section 4912(b) (3) which owns all of the 
stock of such corporation) of debt obligations of such corpor-
ation (or such other domestic corporation) to persons other 
than— 
"(i) a United States person, 
"(ii) a foreign partnership in which such corporation 
owns directly or indirectly (within the meaning of sec-
tion 4915(a)(1)) 10 percent or more of the profits 
interest, or 
"(iii) a foreign corporation, if such domestic corpo-
ration (or one or more includible corporations in an 
68A Stat. 369. 
affiliated group, as determined under section 1504, of 
which such domestic 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 corpora-
tion has, after having given advance notice to the Secre-
tary or his delegate, sold its debt obligations to persons 
other than persons described in clause (i) or (ii) or 
this clause and is using the proceeds of the sale of such 
debt obligations to acquire the debt obligations of such 
domestic corporation (or such other domestic corpora-
tion) , 
"(D) the total actual value of the outstanding debt obliga-
tions described in subparagraph (C) sold by such corpora-
tion (or such other domestic corporation) at all times ex-
ceeds the total actual value of the debt obligations described 
in subparagraph (A) owned by such corporation, 
"(E) the total actual value of the debt obligations des-
cribed in subparagraph (A) owned by such corporation with 
a period remaining to maturity of less than one year at the 
time of acquisition at all times exceed the total actual value 
of the outstanding debt obligations described in subpara-
graph (C) sold by such corporation (or such other domestic 
corporation) with a period remaining to maturity of less 
than one year at the time of sale (other than debt obligations 
sold pursuant to an overdraft arrangement). 
Ante, 
p. 145. 
81 STAT.] 
PUBLIC LAW 90-59-JULY 31, 1967 
163 
"(F) such corporation does not acquire any stock or debt 
obligations of foreign issuers or foreign obligors (other than 
debt obligations described in subparagraph (A)), or any 
stock or debt obhgations of a domestic corporation described 
in section 4912(b) (3), the acquisition of which would have 
'^^ ^
*
^
*
- ^^^• 
been subject to the tax imposed by section 4911 if such cor-
poration had not elected to be treated as a foreign issuer or 
obligor under subparagraph (H), 
"(G) such corporation, in a manner satisfactory to the 
Secretary or his delegate, identifies the certificates represent-
ing its sitock and debt obligations, and maintains such records 
and accounts and submits such reports as may be necessary 
to establish that the requirements of the foregoing subpara-
graphs have been met, and 
"(H) such corporation elects to be treated as a foreign 
issuer or obligor for purposes of this chapter. 
The election under subparagraph (H) shall be made on or before 
the 60th day after the date of the enactment of this paragraph or 
the 60th day after the organization of the corporation, whichever 
is later, under regulations prescribed by the Secretary or his dele-
gate. Any such election shall be effective as of the date thereof and 
shall remain in effect until revoked. If, at any time, the corpora-
tion ceases to meet any requirement of subparagraph (A), (B), 
(C), (D), (E), (F), or (G), the election shall thereupon be 
deemed revoked. When an election is revoked, no further elec-
tion may be made. If an election is revoked, the corporation shall 
incur liability at the time of such revocation for the tax imposed 
by section 4911 with respect to all debt obligations described in 
subparagraph (A) (and all stock and debt obligations described 
in subparagraph (F)) which were acquired by it during the 
period for which the election was 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. For pur-
poses of sections 4912 and 4915, a corporation which has made an 
election under subparagraph (H) shall, during the period for 
which such election is in effect, be treated with respect to acquisi-
tions from such corporation, as a foreign corporation which is not 
formed or availed of for the principal purpose described in section 
4915(c)(1)." 
(2) Section 4920(a) (4) (C) (as amended by subsection (j) (3)) 
is amended by inserting after "subparagraph (B) or (C) of para-
graph (3)" the following: "or in paragraph (3B)". 
(3) Section 4915(c) is amended by redesignating paragraph (3) 
^^ ^tat. 826. 
as paragraph (4), and by inserting after paragraph (2) the fol-
lowing new paragraph: 
"(3) FOREIGN FINANCING COMPANY.—A foreign corporation— 
"(A) 50 percent or more of the voting power of all classes 
of stock of which is owned directly or indirectly (within the 
meaning of subsection (a)) by a domestic corporation (or by 
one or more includible corporations in tin affiliated group, as 
defined in section 48(c) (3) (C), of which such domestic cor- 
76 stat. 969. 
poration is a member), 
"(B) which, if it were a domestic corporation, would be 
eligible to make an election under section 4920(a) (3B), and 
Ante, 
p. 161. 
Ante, 
p. 161. 
164 
PUBLIC LAW 90-60-AUG. 1, 1967 
[81 STAT. 
"(C) gives notice to the Secretary or his delegate within the 
period for making an election under such section, 
shall, during the period after the date of such notice during which 
it meets the requirements of subj)aragraphs (A), (B), (C), (D), 
(E), (F), and (G) of such section, oe treated as not formed or 
availed of for the principal purpose described in paragraph (1) 
of this subsection. If such corporation ceases to meet such require-
ments, such corporation shall be treated as having been availed of 
for the principal purpose described in paragraph (1) of this 
subsection at the time of such cessation." 
Approved July 31, 1967, 7:22 p. m. 
August I, 1967 
[S. 1191] 
Public Law 90-60 
AN A C T 
To provide for the distribution of judgment funds among members of the 
Cbnfederated Band.s of the Ute Indian Tribes. 
Ute Tribe of 
Indians. 
Judgment funds. 
79 Stat. 81. 
25 u s e 671-
673. 
25 u s e 676,677 
et seq. 
Be it enacted hy the Senate and House of Representatives 
of the 
United /States of America in Congress assembled, That the 'Secretary of 
the Interior is hereby authorized and directed to divide the trust fund 
belonging to the Confederated Bands of Ute Indians appropriated by 
the Second Supplemental Appropriations Act, 1965, and deposited in 
the United States Treasury pursuant to the final judgment entered in 
Indian Claims Commission docket numbered 327, including the interest 
thereon, by crediting 60 per centum to the Ute Indian Tribe of the 
Uintah and Ouray Reservation and the Ute Distribution Corporation, 
20 per centum to the Ute Mountain Tribe of the Ute Mountain Reser-
vation, and 20 per centum for the Southern Ute Tribe of the Southern 
Ute Reservation. The portion of the trust fund, upon its division as 
herein directed, credited to the Ute Indian Tribe of the Uintah and 
Ouray Reservation to the Ute Distribution Corporation and to the 
Southern Ute Tribe of the Southern Ute Reservation, shall be available 
for use in accordance with existing authorization for use of funds of the 
tribes and the Ute Distribution Corporation, including the Act of 
August 21, 1951 (65 Stat. 193), as amended, the Act of June 28, 1954 
(68 Stat. 300), and the Act of August 27, 1954 (68 Stat. 868), as 
amended. Any part of such funds that may be distributed to the mem-
bers of the tribe shall not be subject to Federal or State income taxes. 
Approved AugUvSt 1, 1967. 
August 2, 1967 
[S. J. Res. 98] 
Public Law 90-61 
J O I N T RESOLUTION 
Authorizing the National Advisory Commission on Civil Disorders to compel the 
attendance and testimony of witnesses and the production of evidence 
Resolved hy the Senate and House of Representatives 
of the United 
or^^!>*^mistfoi^ 
•S'^a^^es of America in Congress assembled. That (a) for the purposes 
on^civn'ors^orders. of this joiut resolutiou, the term "Commission" means the Commission 
subpena power, appointed by the President by Executive Order 11365, dated July 29, 
32 F. R. m i l . 
1967. 
(b) The Commission, or any member of the Commission when so 
authorized by the Commission, shall have power to issue subpenas 
requiring the attendance and testimony of witnesses and the produc-
tion of any evidence that relates to any matter under investigation by 
the Commission. The Commission, or any member of the Commission