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TITLE 26-INTERNAL REVENUE CODE 46(a)(2), 48 and 167 of this title] shall apply to taxable years ending after October 9, 1966, except that the amendments made by section 3(b) [amending subsec. (b)(1) of this section] shall apply only if the fifth tax- able year following the unused credit year ends after December 31, 1966." Amendment of subsec. (a)(3) of this section by Pub. L. 89-389 applicable with respect to taxable years of electing small business corporations beginning after April 14, 1966, but not applicable with respect to sales or exchanges occurring before February 24, 1966, see section 2(c) of Pub. L, 89-389, set out as an Effective Date note under section 1378 of this title. Amendment of subsec. 1a)(3) by Pub. L. 89-384 appli- cable with respect to amounts received after December 31, 1964, in respect of foreign expropriation losss (as defined in section 1351(b) of this title) sustained after December 31, 1958, see section 2 of Pub. L. 89-384, set out as an Effective Date note under section 1351 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L, 88-272 applicable with re- spect to dividends received after Dec. 31, 1964, in tax- able years ending after such date, see section 201(e) of Pub. L. 88-272, set out as an Effective Date of 1964 Amendment note under section 37 of this title. EFFECTIVE DATE Section applicable with respect to taxable years ending after Dec. 31, 1961, see section 2(h) of Pub. L. 87-834, set out as an Effective Date note under section 38 of this title. PLAN REQUIREMENTS FOR TAXPAYERS ELECTING ADDITIONAL CREDITS Section 301(d), (e), f), of Pub. L. 94-12, as amended by Pub. L. 94-455, §§ 802(b)(7), 803(c), (d), (e), provided that: "(d) Plan Requirements for Taxpayers Electing Ad- ditional Credit.-In crder to meet the requirements of this subsection- "(1) Except as expressly provided in subsections (e) and (f), a corporation (hereinafter in this subjsec- tion referred to as the 'employer') must establish an employee stock ownership plan (described in para- Lraph (2)) which is funded by transfers of employer securities in accordance with the provisions of para- graph (0) and which meets all other requirements of this subsection. "(2) The plan referred to in paragraph (1) must be a defined contribution plan established in writing which- "(A) is a stock bonus plan, a stock bonus and a money purchase pension plan, or a profit-sharing plan, "(B) is designed to invest primarily in employer securities, and "(C) meets such other requirements (similar to requirements applicable to employee stock owner- ship plans as defined in section 4975(e)(7) of the Internal Revenue Code of 1954 [section 4975(e)(7) of this title]) as the Secretary of the Treasury or his delegate may prescribe. "(3) The plan must provide for the allocation of all employer securities transferred to it or purchased by it (because of the requirements of section 46(a)(1)(B) of the Internal Revenue Code of 1954 [subsec, (a)(1)(B) of this section]) to the account of each par- ticipant (who was a participant at any time during the plan year, whether or not he is a participant at the close of the plan year) as of the close of each plan year in an amount which bears substantially the same proportion to the amount of all such secu- rities allocated to all participants in the plan for that plan year as the amount of compensation paid to such participant (disregarding any compensation in excess of the first $100,000 per year) bears to the compensation paid to all such participants during that year (disregarding any compensation in excess of the first $100,000 with respect to any participant). Notwithstanding the first sentence of this para- graph, the allocation to participants' accounts may be extended over whatever period may be necessary to comply with the requirements of section 415 of the Internal Revenue Code of 1954 [section 415 of this title]. "For purposes of this paragraph, the amount of compensation paid to a participant for a year is the amount of such participant's compensation within the meaning of section 415(c)(3) of such Code [sec- tion 415(c)(3) of this title] for such year. "(4) The plan must provide that each participant has a nonforfeltable right to any stock allocated to his account unier paragraph (3), and that no stock allocated to a p.'rticipant's account may be distribut- ed from that acc, unt before the end of the eighty- fourth month beinning after the month in which the stock is allocated to the account except in the case of separation from the service, death, or disabil- ity. "(5) The plan must provide that each participant is entitled to direct the plan as to the manner in which any employer securities allocated to the ac- count of the participant are to be voted. "(6) On making a claim for credit, adjustment, or refund under section 38 of the Internal Revenue Code of 1954, (section 38 of this title] the employer states in such claim that it agrees, as a condition of receiving any such credit, adjustment, or refund- "(A) in the case of a taxable year beginning before January 1, 1977, to transfer employer secu- rities forthwith to the plan having an aggregate value at the time of the claim of 1 percent. of the amount of the qualified investment (as determined under section 46(c) and (d) of such Code [subsecs. (c) and (d) of this section]) of the taxpayer for the taxable year, and "(B) in the case of a taxable year beginning after December 31, 1976- "(i) to transfer employer securities to the plan having an aggregate value at the time of the claim of 1 percent of the amount of the qualified investment (as determined under section 46(c) and (d) of such Code [subsecs. (c) and (d) of this section]) of the employer for the taxable year, "(ii) except as provided in clause (iii), to effect the transfer not later than 30 days after the time (including extensions) for filing its income tax return for a taxable year, and "(iii) in the case of an employer whose credit (as determined under section 46(a)(2)(B) of such Code [subsec. (a)(2)(B) of this section]) for a tax- able year beginning after December 31, 1976, ex- ceeds the limitations of paragraph (3) of section 46(a) of such Code [subsec. (a) of this section]- "(I) to effect that portion of the transfer al- locable to investment credit carrybacks of such excess credit at the time required under clause (ii) for the unused credit year (within the meaning of section 46(b) of such Code [subsec. (b) of this section]), and "(II) to effect that portion of the transfer al- locable to investment credit carryovers of such excess credit at the time required under clause (ii) for the taxable year to which such portion is carried over. For purposes of meeting the requirements of this paragraph, a transfer of cash shall be treated as a transfer of employer securities if the cash is, under the plan, used to purchase employer securities. "(7) Notwithstanding any other provision of law to the contrary, if the plan does not meet the require- ments of section 401 of the Internal Revenue Code of 1954 [section 401 of this title]- "(A) stock transferred under paragraph (6) and allocated to the account of any participant under paragraph (3) and dividends thereon shall not be considered income of the participant or his benefi- ciary under the Internal Revenue Code of 1954 [this title] until actually distributed or made avail- able to the participant or his beneficiary and, at Page 63