EXTENSION OF CERTAIN CORPORATE INCOME TAX REDUCTIONS.

SEC. 901. EXTENSION OF CERTAIN CORPORATE INCOME TAX REDUCTIONS. (a) In General.— Subsections (a), (b). (o), and (d) of section 11 (relating to tax imposed on corporations) are amended to read as follows: “(a) Corporations In General.— A tax is hereby imposed for each taxable year on the taxable income of every corporation. The tax shall consist of a normal tax computed under subsection (b) and a surtax computed under subsection (c). “(b) Normal Tax.— The normal tax is equal to— “(1) in the case of a taxable year ending after December 31, 1977,22 percent of the taxable income, and “(2) in the case of a taxable-year ending after December 31, 1974, and before January 1, 1978, the sum of— “(A) 20 percent of so much of the taxable income as does not exceed $25,000, plus “(B) 22 percent of so much of the taxable income as exceeds $25,000. “(c) Surtax.— The surtax is 26 percent of the amount by which the taxable, income exceeds the surtax exemption for the taxable year. “(d) Surtax Exemption.— For purposes of this subtitle, the surtax exemption for any taxable year is— “(1) $25,000 in the case of a taxable year ending after December 31, 1977, or “(2) $50,000 in the case of a taxable year ending after December 31, 1974. and before January 1, 1978, 90 STAT. 1607 except that, with respect to a corporation to which section 1561 (relating to certain multiple tax benefits in the case of certain controlled corporations) applies for the taxable year, the surtax exemption for the taxable year is the amount determined under such section.” (b) Mutual Insurance Companies.— (1) In general.— Section 821(a)(1) (relating to mutual insurance, companies) is amended to read as follows: “(1) Normal Tax.— A normal tax equal to— “(A) in the case of a taxable year ending after December 31, 1977, 22 percent of the mutual insurance company taxable income, or 44 percent of the amount by which such taxable income exceeds $6,000, whichever is lesser, or “(B) in the ease of a taxable year ending after December 31, 1974, and before January 1, 1978— “(i) 20 percent of so much of the mutual insurance company taxable income as does not exceed $25,000, plus “(ii) 22 percent of so much of the mutual insurance company taxable income as exceeds $25,000, or 44 percent of the amount by which such taxable income, exceeds $6,000, whichever is lesser; plus”. (2) Small companies.— Section 821(c)(1)(A) (relating to alternative tax for certain small companies) is amended to read as follows: “(A) Normal tax.— A normal tux equal to— “(i) in the case of a taxable year ending after December 31, 1977, 22 percent of the taxable investment income, or 44 percent of the amount by which such taxable income exceeds$3,000, whichever is lesser, or “(ii) in the case of a taxable year ending after December 31, 1974. and before January 1, 1978, 20 percent of so much of the taxable investment income as does not exceed $25,000, plus 22 percent of so much of the taxable investment income as exceeds $25,000, or 44 percent of the amount by which such taxable income exceeds $3,000, whichever is lesser; plus”. (c) Conforming Amendments.— (1) Section 1561(a) (relating to certain multiple tax benefits in the case of certain controlled corporations) is amended by adding at the end thereof the following new sentence: “In applying section 11(b)(2), the first $25,000 of taxable income and the second $25,000 of taxable income shall each be allocated among the component members of a controlled group of corporations in the same manner as the surtax exemption is allocated.” (2) Subsection (f) of section 21 (relating to change in surtax exemption treated as a change in a rate of tax) is amended by striking out “Tax Reduction Act of 1975” and all that follows and inserting in lieu thereof the following: “Tax Reduction Act of 1975 in the surtax exemption and any change under section 11(d) in the surtax exemption shall be treated as a change in a rate of tax.” (3) Section 6154 (relating to installment payments of estimated income tax by corporations) is amended by striking out subsection (h). (d) Effective dates.— The amendment made by subsection (a) shall take, effect on December 23, 1975. The amendments made, by subsection (b) shall apply to taxable years ending after December 31, 90 STAT. 16081974. The amendments made by subsection (c) shall apply to taxable years ending after December 31, 1975.