An Act to continue for a temporary period certain existing rules relating to the deductibility of accrued vacation pay and for other purposes
PL 88-554 (H.R.10467), enacted 08/31/1964

78 STAT.] 
PUBLIC LAW 88-554-AUG. 31, 1964 
761 
Public Law 88-554 
AN ACT 
August 31, 1964 
To continue for a temporary period certain existing rules relating to the 
[H. R. i0467j 
deductibility of accrued vacation pay, and for other purposes. 
Taxes. 
Vacation pay, 
68A Stat. 373. 
26 use 2001. 
60 Stat. 1031. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 97 of 
the Technical Amendments Act of 1958, as amended (26 U.S.C, sec. deducubrnty.' 
162, note), is amended by striking out "January 1,1965," and inserting 
72 stat. i672; 
in lieu thereof "January 1,1967,". 
SEC. 2. (a) For purposes of the tax imposed by section 2001 of 
the Internal Revenue Code of 1954, the value of the taxable estate of 
Carbon P. Dubbs, who died on August 21, 1962, shall be determined 
by deducting from the value of the gross estate of such Carbon P. 
Dubbs (in addition to all other deductions and exemptions allowed 
by part IV of subchapter A of chapter 11 of such Code) $808,147.87, if J^^ ^sc 2051-
cash in the amount of $779,699.17 and household furnishings and 
equipment with a fair market value of $28,448.70 are transferred, on 
or before the sixtieth day after the date of the enactment of this Act, 
to the Department of State of the United States pursuant to and in ac-
cordance with the offer of bequest dated February 19, 1963, from the 
estate of such Carbon P. Dubbs (accepted by the Secretary of State 
pursuant to section 1021 of the Foreign Service Act of 1946 (22 U.S.C. 
809 (1958)), on June 5, 1963). The deduction provided for in this 
section shall be treated for purposes of the Internal Revenue Code of 
1954 as if it had been provided for under section 2055 of such Code, 
^^ "^^ 2°''^-
on August 21,1962. 
(b) The Commissioner of Internal Revenue is authorized to enter 
into a closing agreement under section 7121 of the Internal Revenue 
Code of 1954 to meet and satisfy the condition set forth in subpara- 
^^ "^^ ^^''^• 
graph (B) of the eleventh paragraph of the Agreement, as amended, 
made as of May 1,1964, with respect to the probate proceedings relat-
ing to the estate of Anna Gould de Talleyrand (entitled "Probate 
Proceeding, Will of Anna Gould de Talleyrand, Deceased", in the 
Surrogate's Court of the County of New York, State of New York 
(file No. P3878-1961)), between the United States of America, the 
National Trust for Historic Preservation, the First National City 
Bank of New York, and others. The enactment of this subsection shall 
constitute approval of such closing agreement and of the allowance 
of the deductions in computing the taxable estate of Anna Gould de 
Talleyrand specified in subparagraph (B) of the eleventh paragraph 
of such Agreement. 
SEO. 3. (a) The Secretary of Commerce is authorized and directed 
Taxation^s^S^" 
to investigate and study the feasibility of imposing taxes on those tran- les. "
" 
sit and commuter systems which are the beneficiaries of Federal 
financial assistance under the Urban Mass Transportation Act of 1964 
for the purpose of raising revenues to defray Federal expenditures 
under such Act. 
(b) In making the investigation and study under subsection (a), 
the Secretary of Commerce is authorized to cooperate and consult 
with appropriate Federal, State, and local government agencies, and 
with representatives of the transit and commuter service industry and 
national organizations concerned with mass transportation service. 
(c) The costs of making the investigation and study under sub-
section (a) shall be paid from appropriations available for expenses 
of the Office of the Secretary of Commerce. 
(d) The Secretary of Commerce shall report the results of the r^s^k)na\°co°"r 
investigation and study under subsection (a), together with his recom- mitlees^^ '"""' 
mendations, to the Committee on Finance of the Senate and the Com-
Ante, p. 302. 
762 
PUBLIC LAW 88-554-AUG. 31, 1964 
[78 STAT. 
mittee on Ways and Means of the House of Representatives at the 
earliest practicable date, but not later than June 30, 1965. 
Il%l'c'ii8' 
S^^- ^- (^) Section 318(a) of the Internal Eevenue Code of 1954 
(relating to constructive ownership of stock) is amended by striking 
out pai^agraphs (2), (3), and (4) and inserting in lieu thereof the 
f ollov/ing: 
"(2) ATTRIBUTIOI^ FROM PARTNERSHIPS, ESTATES, TRUSTS, AND 
CORPORATIONS.— 
"(A) FROM PARTNERSHIPS AND ESTATES.—Stock owned, 
directly or indirectly, by or for a partnership or estate shall 
be considered as owned proportionately by its partners or 
beneficiaries. 
"(B) FROM TRUSTS.— 
"(i) Stock owned, directly or indirectly, by or for 
a trust (other than an employees' trust described in sec-
^6 us^c 4of' 
^^^^ 401(a) which is exempt from tax under section 
26 use 501.' 
501 (a)) shall be considered as owned by its beneficiaries 
in proportion to the actuarial interest of such benefici-
aries in such trust. 
"(ii) Stock owned, directly or indirectly, by or for 
any portion of a trust of which a person is considered 
678^ ^^^ ^^^' 
^^^^ owner under subpart E of part I of subchapter J 
(relating to grantors and others treated as substantial 
owners) shall be considered as owned by such person. 
"(C) FROM CORPORATIONS.—If 50 percent or more in value 
of the stock in a corporation is owned, directly or indirectly, 
by or for any person, such person shall be considered as own-
ing the stock owned, directly or indirectly, by or for such 
corporation, in that proportion which the value of the stock 
which such person so owns bears to the value of all the stock in 
such corporation. 
"(3) ATTRIBUTION TO PARTNERSHIPS, ESTATES, TRUSTS, AND COR-
PORATIONS.— 
"(A) TO PARTNERSHIPS AND ESTATES.—Stock owned, di-
rectly or indirectly, by or for a partner or a beneficiary of 
an estate shall be considered as owned by the partnership 
or estate. 
" ( B ) To TRUSTS.— 
"(i) Stock owned, directly or indirectly, by or for a 
beneficiary of a trust (other than an employees' trust de-
scribed in section 401 (a) which is exempt from tax under 
section 501 (a)) shall be considered as owned b j the trust, 
unless such beneficiary's interest in the trust is a remote 
contingent interest. For purposes of this clause, a con-
tingent interest of a beneficiary in a trust shall be con-
sidered remote if, under the maximum exercise of 
discretion by the trustee in favor of such beneficiary, the 
value of such interest, computed actuarially, is 5 percent 
or less of the value of the trust property. 
"(ii) Stock owned, directly or indirectly, by or for 
a person who is considered the owner of any portion of a 
trust under subpart E of part I of subchapter J (relat-
ing to grantors and others treated as substantial own-
ers) shall be considered as owned by the trust. 
"(C) To CORPORATIONS.—If 50 percent or more in value of 
the stock in a corporation is owned, directly or indirectly, by 
or for any person, such corporation shall be considered as 
owning the stock owned, directly or indirectly, by or for 
such person. 
78 STAT.] 
PUBLIC LAW 88-554-AUG. 31, 1964 
763 
"(4) OPTIONS.—If any person has an option to acquire stock, 
such stock shall be considered as owned by such person. 
For 
purposes of this paragraph, an option to acquire such an option, 
and each one of a series of such options, shall be considered as 
an option to acquire such stock. 
" (5) OPERATING RULES.— 
"(A) I N GENERAL.—Except as provided in subparagraphs 
(B) and (C), stock constructively owned by a person by 
reason of the application of paragraph (1), (2), (3), or (4), 
shall, for purposes of applying paragraphs (1), (2), (3), 
and (4), be considered as actually owned by such person. 
"(B) MEMBERS OF FAMILY.—Stock constructively owned 
by an individual by reason of the application of paragraph 
(1) shall not be considered as owned bv him for purposes 
of again applying paragraph (1) in order to make another 
the constructive owner of such stock. 
"(C) PARTNERSHIPS, ESTATES, TRUSTS, AND CORPORATIONS.— 
Stock constructively owned by a partnership, estate, trust, 
or corporation by reason of the application of paragraph (3) 
shall not be considered as owned by it for purposes of apply-
ing paragraph (2) in order to make another the constructive 
owner of such stock. 
"(D) 
OPTION RULE IN LIEU or FAMILY RULE.—For purposes 
of this paragraph, if stock may be considered as owned by an 
individual under paragraph (1) or (4), it shall be considered 
as owned by him under paragraph (4)." 
(b)(1) Section 304(b)(1) (relating to rule, for determinations 
under section 302(b)) and section 304(c) (2) (relating to constructive 
ownership) of the Internal Revenue Code of 1954 are amended by 
26'us<f*304!" 
striking out "section 318(a) (2) (C)" and inserting in lieu thereof "sec-
tions 318(a) (2) (C) and 318 (a) (3) (C)". 
(2) Section 318(b) of such Code (relating to cross-references) is 
^^ "^"^ ^'^• 
amended by striking out "and" at the end of para^aph (6), by 
renumbering paragraph (7) as paragraph (8), and by inserting after 
paragraph (6) the following new paragraph: 
"O) section 958(b) (relating to constructive ownership rules with 
respect to controlled foreign corporations); and" 
(3) Section 382 (a) (3) of such Code (relating to attribution of own- 
^e use 382. 
ership) is amended by striking out "section 318 (a) (2) (C)" and insert-
ing in lieu thereof "sections 318(a) (2) (C) and 318(a) (3) (C)". 
(4) Section 856(d) of such Code (relating to rents from real prop-
erty defined) is amended by striking out "section 318(a) (2)" in the 
last sentence and inserting in lieu thereof "sections 318(a) (2) and 318 
(a)(3)". 
(5) Section 958(b) of such Code (relating to constructive owner-
ship) is amended— 
(A) by striking out "the first sentence of subparagraphs (A) 
and (B), and in applying clause (i) of subparagraph (C)," in 
paragraph (2) and inserting in lieu thereof "subparagraphs (A), 
(B), and (C)"; 
(B) by striking out paragraph (3); 
(C) by striking out "(4) In applying clause (i) of subpara-
graph (C)" and inserting m lieu thereof "(3) In applying sub-
paragraph (C)"; and 
(D) by striking out "(5) The second sentence of subpara-
graphs (A) and (B), and clause (ii) of subparagraph ((J), of 
section 318(a)(2)" and inserting in lieu thereof "^(4) Subpara-
graphs (A), (B), and (C) of section 318(a) (3)". 
74 Stat. 1004. 
26 use 856. 
76 Stat. 1018. 
26 use 958. 
764 
PUBLIC LAW 88-555-AUG. 31, 1964 
[78 
STAT. 
76 Stat. 1059. 
26 u s e 6038. 
Ante, p. 762. 
26 u s e 302, 304. 
(6) Section 6038(d)(1) of such Code (relating to definition of 
control) is amended— 
(A) by striking out "the second sentence of subparagraj)hs (A) 
and (B), and clause (ii) of subparagraph (C), of section 318 
(a) (2)" in subparagraph (A) and inserting in lieu thereof "sub-
paragraphs (A), 
(B), and (C) of section 318(a) (3)"; and 
(B) by striMng out "clause (i) of" in subparagraph (B). 
(c) The amendments made by this section shall take effect on the 
date of the enactment of this Act, except that, for purposes of sections 
302 and 304 of the Internal Eevenue Code of 1954, such amendments 
shall not apply with respect to distributions in payment for stock 
acquisitions or redemptions, if such acquisitions or redemptions 
occurred before the date of the enactment of this Act. 
Approved August 31, 1964. 
August 31, 1964 
[H. J. Res. 733] 
Public Law 88-555 
JOINT RESOLUTION 
To designate the powerhouse on Clear Creek at the head of Whiskeytown 
Reservoir, in the State of California, as Judge Francis Carr Powerhouse. 
Clear ereek, 
ealif. 
Judge Francis 
earr Powerhouse, 
designation. 
Resolved hy the Senate and House of Representatives 
of the United 
States of America in Congress assemhled^ That the one hundred and 
thirty thousand kilowatt capacity powerhouse on Clear Creek at the 
head of Whiskeytown Keservoir shall hereafter be known as Judge 
Francis Carr Powerhouse in honor of Judge Francis Carr, of 
Redding, California, a lawyer, judge, public servant, and advocate 
of reclamation development including the great Central Valley proj-
ect developed to meet the serious water shortages in the San Joaquin 
Valley and Sacramento Valley of California. 
The Secretary of the 
Interior is hereby directed to place a suitable plaque at the site. Any 
law, regulation, document, or record of the United States in which 
such powerhouse is designated or referred to shall be held to refer 
to such powerhouse under and by the name of Judge Francis Carr 
Powerhouse. 
Approved August 31, 1964. 
August 31, 1964 
[H. R. 8355] 
Public Law 88-556 
AN ACT 
To amend the Life Insurance Company Act of the District of Columbia (48 
Stat. 1145), approved June 19, 1934, as amended. 
D.C. 
Life Insurance 
Act, amendment. 
D . e . eode 
35-508. 
75 Stat. 514. 
D.C. Code 
35-535. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 8, 
chapter I I I of the Life Insurance Act (48 Stat. 1145) is amended 
by inserting at the beginning thereof " ( a ) " and by striking the figure 
"$100,000" in the first sentence thereof and inserting in lieu thereof 
the figure "$200,000", and by adding the following subsection: 
"(b) No company shall be exempt from the provisions of this sec-
tion by reason of its having been incorporated in the District or 
elsewhere prior to the effective date of this subsection, except that in 
the case of companies authorized in the District of Columbia on (date 
of passage) and continuously authorized thereafter without any in-
crease or broadening of authority, the minimum capital required of 
a stock company shall not be increased by this section," 
SEC. 2. (a) Subsection 10(b) (ii) of section 35 of chapter I I I of the 
Life Insurance Act of the District of Columbia (48 Stat. 1145) is