(relating to specially sweetened natural wines) of such Code are each amended by striking out "less than 14 percent" and inserting in lieu thereof "not more than 14 percent". SEC. 4. Subsection (b) of section 5385 of the Internal Revenue Code of 1954 (relating to specially sweetened natural wines) is amended to read as follows: (b) CELLAR TREATMENT.-Specially sweetened natural wines may be blended with each other, or with natural wine or heavy bodied blending wine in the further production of specially sweetened natural wine only, if the wines so blended are made from the same kind of fruit. Wines produced under this section may be cellar treated under the provisions of section 5382 (a) and (c). Wine spirits may not be added to specially sweetened natural wine. SEC. 5. Section 5386(b), and the last sentence of section 5387(a), of the Internal Revenue Code of 1954 (relating to cellar treatment of special natural wines and agricultural wines) are each amended by striking out "as provided in section 5382 (c)" and inserting in lieu thereof "under the provisions of section 5382 (a) and (c)". SEC. 6. The amendments made by this Act shall take effect on the first day of the first month which begins 90 days or more after the date of the enactment of this Act. Approved October 22, 1968. PUBLIC LAW 90-621 NINETIETH CONGRESS, OCTOBER 22, 1968 An Act relating to the income tax treatment of certain statutory mergers of corporations. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 368 (a) (2) of the Internal Revenue Code of 1954 (relating to special rules with respect to the definition of corporate reorganizations) is amended by adding at the end thereof the following new subparagraph: (D) STATUTORY MERGER USING STOCK OF CONTROLLING CORPORATION. The acquisition by one corporation, in exchange for stock of a corporation (referred to in this subparagraph as 'controlling corporation') which is in control of the acquiring corporation, of substantially all of the properties of another corporation which in the transaction is merged into the acquiring corporation shall not disqualify a transaction under paragraph (1)(A) if (i) such transaction would have qualified under paragraph (1)(A) if the merger had been into the controlling corporation, and (ii) no stock of the acquiring corporation is used in the transaction. (b) Section 368 (b) of such Code (relating to definition of a party to reorganization) is amended by adding at the end thereof the followng new sentence: "In the case of a reorganization qualifying under aragraph (1)(A) of subsection (a) by reason of paragraph (2) (D) 1 Senate Report No. 1653, page 849, this Bulletin; since House Report No. 1902 is bstantially the same as the Senate Report, it is not published herein. of that subsection, the term 'a party to a reorganization' includes the controlling corporation referred to in such paragraph (2) (D)." (c) The amendments made by subsections (a) and (b) shall apply to statutory mergers occurring after the date of the enactment of this Act. SEC. 2. (a) Section 358 (e) of the Internal Revenue Code of 1954 (relating to the exception to the rule for determining basis to distributees in corporate reorganizations) is amended to read as follows: (e) EXCEPTION.-This section shall not apply to property acquired by a corporation by the exchange of its stock or securities (or the stock or securities of a corporation which is in control of the acquiring corporation) as consideration in whole or in part for the transfer of the property to it. (b) The last sentence of section 362 (b) of such Code (relating to basis of property transferred to corporations in corporate reorganizations) is amended to read as follows: "This subsection shall not apply if the property acquired consists of stock or securities in a corporation a party to the reorganization, unless acquired by the exchange of stock or securities of the transferee (or of a corporation which is in control of the transferee) as the consideration in whole or in part for the transfer." (c) The amendments made by subsections (a) and (b) shall apply only in respect of plans of reorganization adopted after the date of the enactment of this Act. Approved October 22, 1968. PUBLIC LAW 90-622 NINETIETH CONGRESS, OCTOBER 22, 1968 An Act to amend the Internal Revenue Code of 1954 with respect to the treatment of income from the operation of a communications satellite system. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 883 of the Internal Revenue Code of 1954 (relating to exclusions from gross income) is amended by inserting "(a) INCOME OF FOREIGN CORPORATIONS FROM SHIPS AND AIRCRAFT.-" before "The", and by adding at the end thereof the following new subsection: (b) EARNINGS DERIVED FROM COMMUNICATIONS SATELLITE SYSTEM.-The earnings derived from the ownership or operation of a communications satellite system by a foreign entity designated by a foreign government to participate in such ownership or operation shall be exempt from taxation under this subtitle, if the United States, through its designated entity, participates in such system pursuant to the Communications Satellite Act of 1962 (47 U.S.C. 701 and following). (b) The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1966. Approved October 22, 1968. 1 Senate Report No. 1652, page 852, this Bulletin; since House Report No. 1889 is substantially the same as the Senate Report, it is not published herein. PUBLIC LAW 90-624 NINETIETH CONGRESS, OCTOBER 22, 1968 H.R. 75671 An Act to amend the Internal Revenue Code of 1954 with respect to the definition of compensation for purposes of tax under the Railroad Retirement Tax Act, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 3231 (e) (1) of the Internal Revenue Code of 1954 (relating to definition of compensation) is amended by inserting after the second sentence the following new sentence: "Such term does not include remuneration for service which is performed by a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101 (a) (15) of the Immigration and Nationality Act, as amended, and which is performed to carry out the purpose specified in subparagraph (F) or (J), as the case may be." SEC. 2. Section 1 (h) (1) of the Railroad Retirement Act of 1937 is amended by inserting after the second sentence the following new sentence: "Such term does not include remuneration for service which is performed by a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101 (a) (15) of the Immigration and Nationality Act, as amended, and which is performed to carry out the purpose specified in subparagraph (F) or (J), as the case may be." SEC. 3. Section 1(i) of the Railroad Unemployment Insurance Act is amended by inserting after the first sentence the following new sentence: "Such term does not include remuneration for service which is performed by a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F) or (J) of section 101 (a) (15) of the Immigration and Nationality Act, as amended, and which is performed to carry out the purpose specified in subparagraph (F) or (J), as the case may be." SEC. 4. (a) (1) The amendments made by the first two sections of this Act shall apply with respect to service performed after December 31, 1961. (2) Notwithstanding the expiration before the date of the enactment of this Act or within 6 months after such date of the period for filing claim for credit or refund, claim for credit or refund of any overpayment of any tax imposed by chapter 22 of the Internal Revenue Code of 1954 attributable to the amendment made by the first section of this Act may be filed at any time within one year after such date of enactment. (3) Any credit or refund of an overpayment of the tax imposed by section 3201 or 3211 of the Internal Revenue Code of 1954 which is attributable to the amendment made by the first section of this Act shall be appropriately adjusted for any lump-sum payment which has been made under section 5(f) (2) of the Railroad Retirement Act 4 Senate Report No. 1650, page 855, this Bulletin; since House Report No. 1844 is substantially the same as the Senate Report, it is not published herein. of 1937 before the date of the allowance of such credit or the making of such refund. (b) The amendments made by section 3 shall apply with respect to service performed after December 31, 1967. Approved October 22, 1968. PUBLIC LAW 90-630 NINETIETH CONGRESS, OCTOBER 22, 1968 An Act to amend certain provisions of the Internal Revenue Code of 1954 relating to distilled spirits, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That paragraph (1) of section 5008 (c) of the Internal Revenue Code of 1954 (relating to loss or destruction of distilled spirits) is amended (1) by striking out "before the completion of the bottling and casing or other packaging of such spirits for removal from the bottling premises" and inserting in lieu thereof "before removal from the premises", and (2) by inserting after "such loss occurred" in subparagraph (B) the following: "(i) before the completion of the bottling and casing or other packaging of such spirits for removal from the bottling premises and (ii)". SEC. 2. (a) The second sentence of section 5062 (b) of the Internal Revenue Code of 1954 (relating to drawback in the case of exportation of distilled spirits) is amended to read as follows: "In the case of distilled spirits, the preceding sentence shall not apply unless the claim for drawback is filed by the bottler or packager of the spirits and unless such spirits have been stamped or restamped, and marked, especially for export, under regulations prescribed by the Secretary or his delegate." (b) The second paragraph of section 313(d) of the Tariff Act of 1930, as amended (19 U.S.C. 1313 (d)) (relating to drawback) is amended (1) by inserting "or determined" after "been paid" each place it appears, (2) by striking out the colon and the proviso, and (3) by adding at the end thereof the following new sentence: "In the case of distilled spirits, the preceding sentence shall not apply unless the claim for drawback is filed by the bottler or packager of the spirits and unless such spirits have been stamped or restamped, and marked, especially for export, under regulations prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury." SEC. 3. (a) Section 5232 of the Internal Revenue Code of 1954 (relating to imported distilled spirits) is amended to read as follows: 1 Senate Report No. 1659, page 858, this Bulletin; since House Report No. 1843 is substantially the same as the Senate Report, it is not published herein. Excerpts from Senate Report No. 1497, page 863, this Bulletin. "SEC. 5232. IMPORTED DISTILLED SPIRITS. "(a) TRANSFER TO DISTILLED SPIRITS PLANT WITHOUT PAYMENT OF TAX.-Imported distilled spirits in bulk containers may, under such regulations as the Secretary or his delegate shall prescribe, be withdrawn from customs custody and transferred in such bulk containers or by pipeline to the bonded premises of a distilled spirits plant without payment of the internal revenue tax imposed on imported distilled spirits by section 5001. The person operating the bonded premises of the distilled spirits plant to which such spirits are transferred shall become liable for the tax on distilled spirits withdrawn from customs custody under this section upon release of the spirits from customs custody, and the importer shall thereupon be relieved of his liability for such tax. "(b) WITHDRAWALS, ETC.-Imported distilled spirits transferred pursuant to subsection (a)– "(1) may not be bottled in bond under section 5233, "(2) may be redistilled or denatured only if of 185 degrees or more of proof, and "(3) may be withdrawn for any purpose authorized by this chapter, in the same manner as domestic distilled spirits." (b) Headnote 3 for part 12 of schedule 1 of the Tariff Schedules of the United States (19 U.S.C., sec. 1202) is amended to read as follows: "3. The duties prescribed on products covered by this part are in addition to the internal-revenue taxes imposed under existing law or any subsequent Act. The duties imposed on products covered by this part which are subject also to internal-revenue taxes are imposed only on the quantities subject to such taxes; except that, in the case of distilled spirits transferred to the bonded premises of a distilled spirits plant under the provisions of section 5232 of the Internal Revenue Code of 1954, the duties are imposed on the quantity withdrawn from customs custody." SEC. 4. (a) For purposes of subsection (b), the effective date of this Act is the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act. (b) The amendments made by the first section of this Act shall apply only to losses sustained on or after such effective date. The amendments made by section 2 shall apply only to articles exported on or after such effective date. The amendments made by section 3 shall apply only to withdrawals from customs custody on or after such effective date. SEC. 5. (a) Section 175 (c) (1) of the Internal Revenue Code of 1954 (relating to soil and water conservation expenditures) is amended by striking out the last sentence and inserting in lieu thereof the following: "Notwithstanding the preceding sentences, such term also includes any amount, not otherwise allowable as a deduction, paid or incurred to satisfy any part of an assessment levied by a soil or water conservation or drainage district to defray expenditures made by such district (i) which, if paid or incurred by the taxpayer, would without regard to this sentence constitute expendi 334-533°-69-51 |