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TITLE 26-INTERNAL REVENUE CODE "(B) the application for such a determination is filed with the Secretary not later than 90 days after the date on which the credit under section 38 [section 38 of this title] is allowed, and "(C) the contribution is returned within one year after the date on which the Secretary issues notice to the employer that such plan does not satisfy the requirements of this subsection, subsection (c), or section 401(a) of such Code [section 401(a) of this title]. "(e) Plan requirements for taxpayers electing addi- tional one-half percent credit.- "(1) General rule.-For purposes of clause (1i) of section 46(a)(2)(B) of the Internal Revenue Code of 1954 (subsec. (a)(2)(B) of this section], the amount determined under this subsection for a taxable year is an amount equal to the sum of the matching em- ployee contributions for the taxable year which meet the requirements of this subsection. "(2) Election; basic plan requirements.-No amount shall be determined under this subsection for the taxable year unless the corporation elects to have this subsection apply for that year. A corpora- tion may not elect to have the provisions of this sub- section apply for a taxable year unless the corpora- tion meets the requirements of subsection (d) and the requirements of this subsection. "(3) Employer contribution.-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 shall state in such claim that the employer agrees, as a condition of receiving any such credit, adjustment, or refund attributable to the provisions of section 46(a)(2)(B)(ii) of such Code [subsection (a)(2)(B)(ii) of this section], to transfer at the time described in subsection (d)(6)(B) employer securities (as defined in subsection (d)(9)(A)) to the plan having an aggregate value at the time of the transfer of not more than one-half of one percent of the amount of the qualified invest- ment (as determined under subsections c) and (d) of section 46 of such Code (subsections (c) and (d) of this section]) of the taxpayer for the taxable year. 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. "(4) Requirements relating to matching employee contributions.- "(A) An amount contributed by an employee under a plan described in subsection (d) for the taxable year may not be treated as a matching em- ployee contribution for that taxable year under this subsection unless- "(i) each employee who participates in the plan described in subsection (d) is entitled to make such a contribution, "(i) the contribution is designated by the em- ployee as a contribution intended to be used for matching employer amounts transferred under paragraph (3) to a plan which meets the require- ments of this subsection, and "(iII) the contribution is in the form of an amount paid in cash to the employer or plan ad- ministrator not later than 24 months after the close of the taxable year in which the portion of the credit allowed by section 38 of such Code [section 38 of this title] (and determined under clause (ii) of section 46(a)(2)(B) of such Code [subsec. (a)(2)(B) of this section] which the con- tribution is to match) is allowed, and is invested forthwith in employer securities (as defined in subsection (d)(9)(A)). "(B) The sum of the amounts of matching em- ployee contributions taken into account for pur- poses of this subsection for any taxable year may not exceed the value (at the time of transfer) of the employer securities transferred to the plan in accordance with the requirements of paragraph (3) for the year for which the employee contributions are designated as matching contributions. "(C) The employer may not make participation in the plan a condition of employment and the plan may not require matching employee contribu- tions as a condition of participation in the plan. "(D) Employee contributions under the plan must meet the requirements of section 401(a)(4) of such Code [section 401(a)(4) of this title] (relating to contributions). "(5) A plan must provide for allocation of all em- ployer securities transferred to it or purchased by it under this subsection to the account of each partici- pant (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 the plan year in an amount equal to his matching employee contributions for the year. Matching employee con- tributions and amounts so allocated shall be deemed to be allocated under subsection (d)(3). "(f) Recapture.- "(1) General rule.-Amounts transferred to a plan under subsection (d)(6) or (e)(3) may be withdrawn from the plan by the employcr if the plan provides that while subject to recapture- "(A) amounts so transferred with respect to a taxable year are segregated from other plan assets, and "(B) separate accounts are maintained for par- ticipants on whose behalf amounts so transferred have been allocated for a taxable year. "(2) Coordination with other law.-Notwithstand- Ing any other law or rule of law, an amount with- drawn by the employer will neither fail to be consid. ered to be nonforfeitable nor fail to be for the exclu- sive benefit of participants or their beneficiaries merely because of the withdrawal from the plan of- "(A) amounts described in paragraph (1), or "(B) employer amoun, transferred under sub. section (e)(3) to the plan which are not matched by matching employee contributions or which are in excess of the limitations of section 415 of such Code [section 415 of this title], nor will the withdrawal of any such amount be con- sidered to violate the provisions of section 403(c)(1) of the Employee Retirement Income Security Act of 1974 [section 1103(c)(1) of title 29]." PUBLIC UTILITY PROPERTY SUBJECT TO SUBSEC. (e); PRO- VISIONS RESPECTING TREATMENT OF INVESTMENT CREDIT BY FEDERAL REGULATORY AGENCIES INAPPLICA- BLE Section 105(e) of Pub. L. 92-178 provided that: "Sec- tion 203(e) of the Revenue Act of 1964 [set out as note under section 38 of this title] shall not apply to public utlity property to which section 46(e) of the Internal Revenue Code of 1954 (as added by subsection (c)) [subsec. (e) of this section] applies." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 47, 48, 50, 50B, 383, 6411 of this title. § 47. Certain dispositions, etc., of section 38 property (a) General rule Under regulations prescribed by the Secre- tary- (1) Early disposition, etc. If during any taxable year any property is disposed of, or otherwise ceases to be section 38 property with respect to the taxpayer, before the close of the useful life which was taken into account in computing the credit under section 38, then the tax under this chapter for such taxable year shall be in- creased by an amount equal to the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from substituting, in de- termining qualified investment, for such Page 65