An Act relating to the tax treatment of redeemable ground rents
PL 88-9 (H.R.1597), enacted 04/10/1963

PUBLIC LAW 88-8-APR. 9, 1963 
[77 STAT. 
National Har-
mony Week. 
Designation. 
Proclamation 
authorization. 
shop quartet style of close harmony singing, will celebrate the 
twenty-fifth anniversary of its founding during the six-day period 
beginning April 15,1963: Now, therefore, be it 
Resolved hy the Senate and House of Representatives 
of the United 
States of America in Congress assembled, That the six-day period 
beginning April 15,1963, and ending April 20,1963, both dates inclu-
sive, is hereby designated as "National Harmony Week", in recogni-
tion and appreciation of the successful efforts of the members of the 
Society for the Preservation and Encouragement of Barber Shop 
Quartet Singing in America, Incorporated, to maintain the barber-
shop quartet style of close harmony singing as a traditional form of 
native American music, and of their efforts, through their stimulus 
to good music and vocal harmony, to keep America singing. 
The 
President of the United States is authorized and requested to issue a 
proclamation inviting the people of the United States to join in the 
observance of such week with appropriate ceremonies and activities. 
Approved April 9, 1963. 
Public Law 88-8 
April 9, 1963 
[S. 1089] 
Cadmium dis-
posal. 
60 Stat. 596, 
597. 
.50 u s e 98b, 
98 a. 
Publication in 
F. R. 
AN ACT 
To authorize the sale, without regard to the six-month waiting period prescribed, 
of cadmium proposed to be disponed of pursuant to the Strategic and Critical 
Materials Stock Piling Act. 
Be it enacted by the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That the Adminis-
trator of General Services is hereby authorized to dispose of, by 
negotiation or otherwise,^ approximately two million pounds of 
cadmium now held in the national stockpile. Such disposition may 
be made without regard to the provisions of section 3 of the Strategic 
and Critical Materials Stock Piling Act, relating to dispositions on the 
basis of a revised determination pursuant to section 2 of said Act, to 
the effect that no such disposition shall be made until six months after 
publication in the Federal Register and transmission to the Congress 
and to the Armed Services Committees thereof of a notice of the 
proposed disposition. 
Approved April 9, 1963. 
April 10, 1963 
"[H. R. 1597] 
Taxes. 
Redeemable 
ground rents. 
68A Stat. 46. 
26 u s e 163. 
Public Law 88-9 
AN ACT 
Relating to the tax treatment of redeemable ground rents. 
Be it enacted by the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That (a) section 
163 of the Internal Revenue Code of 1954 (relating to deduction for 
interest) is amended by redesignating subsection (c) as subsection (d) 
and by inserting after subsection (b) the following new subsection: 
"(c) REDEEMABLE GROUND RENTS.—For purposes of this subtitle, 
any annual or periodic rental under a redeemable ground rent (exclud-
ing amounts in redemption thereof) shall be treated as interest on an 
indebtedness secured by a mortgage." 
77 STAT.] 
PUBLIC LAW 88-9-APR. 10, 1963 
(b) Part IV of subchapter O of chapter 1 of such Code (relating to 
special rules for determining gain or loss on disposition of property) 
is amended by redesignating section 1055 as section 1056 and by 
,68A stat. 311; 
inserting after section 1054 the following new section: 
^^e^usc °
i
o
5
*
5 
"SEC. 1055. REDEEMABLE GROUND RENTS. 
"(a) CHARACTER.—For purposes of this subtitle— 
"(1) a redeemable ground rent shall be treated as being in the 
nature of a mortgage, and 
" (2) real property held subject to liabilities under a redeemable 
ground rent shall be treated as held subject to liabilities under a 
mortgage. 
"(b) APPLICATION OF SUBSECTION (a).— 
"(1) I N GENERAL.—Subsection (a) shall take effect on the day 
after the date of the enactment of this section and shall apply 
with respect to taxable years ending after such date of enactment. 
"(2) BASIS OF HOLDER.—In determining the basis of real prop-
erty held subject to liabilities under a redeemable ground rent, 
subsection (a) shall apply whether such real property was 
acquired before or after the enactment of this section. 
"(3) BASIS OF RESERVED REDEEMABLE GROUND RENT.—In the case 
of a redeemable ground rent reserved or created on or before the 
date of the enactment of this section in connection with a trans-
fer of the right to hold real property subject to liabilities under 
such ground rent, the basis of such ground rent after such date in 
the hands of the person who reserved or created the ground rent 
shall be the amount taken into account in respect of such ground 
rent for Federal income tax purposes as consideration for the dis-
position of such real property. If no such amount was taken into 
account, such basis shall be determined as if this section had not 
been enacted. 
"(c) KEDEEMABLE GROUND RENT DEFINED.—For purposes of this 
"Redeemable 
subtitle, the term 'redeemable ground rent' means only a ground rent «f°^'^ rent." 
with respect to which— 
"(1) there is a lease of land which is assignable by the lessee 
without the consent of the lessor and which (together with periods 
for which the lease may be renewed at the option of the lessee) is 
for a term in excess of 15 years, 
"(2) the leaseholder has a present or future right to terminate, 
and to acquire the entire interest of the lessor in the land, by pay-
ment of a determined or determinable amount, which right exists 
by virtue of State or local law and not because of any private 
agreement or privately created condition, and 
"(3) the lessor's interest in the land is primarily a security 
interest to protect the rental payments to which the lessor is 
entitled under the lease. 
"(d) CROSS EEFERENCE.-^ 
"For treatment of rentals under redeemable ground rents as 
interest, see section 163(c)." 
68A stat. 46. 
(c) Section 163(d) of such Code (as redesignated by subsection (a) 
of this section) is amended by adding at the end thereof the following 
new paragrapn: 
"(5) For treatment of redeemable ground rents and real property 
held subject to liabilities under redeemable ground rents, see sec-
tion 1055." 
PUBLIC LAW 88-10-APR. 19, 1963 
[77 STAT. 
(d) The table of sections for part IV of subchapter O of chapter 1 
of such Code is amended by striking out 
"Sec. 1055. Cross references." 
and inserting in lieu thereof the following: 
"Sec. 1055. Redeemable ground rents. 
"Sec. 1056. Cross references." 
Effective date. 
SEC. 2. The amendments made by subsection (a) of the first section 
of this Act shall take effect as of January 1, 1962, and shall apply 
with respect to taxable years ending on or after such date. 
The 
amendments made by subsection (b) of the first section of this Act 
shall take effect on the day after the date of the enactment of this Act 
and shall apply with respect to ta,xable years ending after such date 
of enactment. 
Approved April 10, 1963. 
Public Law 88-10 
April 19, 1953 
[H. R. 4423] 
Riverton recla-
mation project, 
Wyo. 
Water delivery. 
76 Stat. 407. 
AN ACT 
rerniitting the Seci*etary of the Interior to continue to deliver vvuter to lands 
ill the third division, Itiverton reclamation proJH't, Wyoiiiin}^. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of Amei'ica m Congress assemhled^ That pending com-
pletion of a repayment contract or the enactment of other legislation 
])roviding for the furnishing of water to lands of the third (livision, 
liiverton reclamation project, Wyoming, the Secretary is authorized 
to continue to furnish water to the lands in such division, during 
calendar year 1963, as under the provisions of section 9. subsection 
(d) (1), of the Reclamation Project Act of 1939 (53 Stat. 1187,1195; 
43 U.S.C. 485h(d)) but without regard to tlie time limitation therein 
specified. 
Water shall be furnished upon individual api)1ications 
accompanied by payments of $4 per acre for tlie first tliree acre-feet 
per acre with water in excess of that amount at $2 per acre-foot. The 
l)ortion of the operation and maintenance costs in excess of the total 
of such payments is hereby declared to be nonreimbui-sable and 
nonreturnable. 
Approved April 19, 1963. 
Aisril 23, 1963 
[H. R. 4715] 
Public Law 88-11 
AN ACT 
To incoi'iMO'afe the Kleanor Roosevelt Memorial Fonndnti(»n. 
Eleanor 
Roosevelt Memo-
rial Foundation, 
incorporation. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assenibled, That the following 
persons designated by the President of the United States of America : 
The Honorable A(tlai E. Stevenson, Xew York, New York, as Chair-
man : 
Miss Marian Anderson, Danbury, Connecticut; 
Robert S. Benjamin, Xew York, Xew York; 
William Benton, Soutlipoi-t, Connecticut; 
Doctor Ralph J. l^unche, Xew York, Xew York; 
Henry Crown, Chicago, Illinois; 
David Dubinsky, Xew York, Xew York; 
Myer Feldman, Washington, District of Columbia; 
Mrs. Ruth Field, Xew York, Xew York;