AMENDMENTS RELATED TO SUBTITLES B AND C OF TITLE XI OF THE REFORM ACT.

SEC. 1011B. AMENDMENTS RELATED TO SUBTITLES B AND C OF TITLE XI OF THE REFORM ACT. (a) Amendments Related to Section 1151 of the Reform Act.— (1) Paragraph (2) of section 89(a) of the 1986 Code (relating to year of inclusion) is amended to read as follows: “(2) Year of inclusion.— “(A) In general.— Except as provided in subparagraph (B)— “(i) any amount included in gross income under paragraph (1) shall be taken into account for the taxable year of the employee with or within which the plan year ends, and “(ii) any deduction of the employer attributable to such amount shall be allowable for the taxable year of the employer with or within which the plan year ends. “(B) Election to delay inclusion for i year.— If an employer maintaining a plan with a plan year ending after September 30 and on or before December 31 of a calendar year elects the application of this subparagraph— “(i) amounts included in gross income under paragraph (1) with respect to employees of such employer shall be taken into account for the taxable year of the employee following the taxable year determined under subparagraph (A), but “(ii) any deduction of the employer which is attributable to such amounts shall be allowable for the tax-102 STAT. 3484able year with or within which the plan year following the plan year in which the excess benefits occurred ends.” (2) Paragraph (4) of section 89(b) of the 1986 Code (defining nontaxable benefits) is amended by adding at the end thereof the following new sentence: “Such term includes any group-term life insurance the cost of which is includible in gross income under section 79.” (3) Paragraph (1) of section 89(g) of the 1986 Code (relating to the aggregation of comparable health plans) is amended by adding at the end thereof the following new subparagraph: “(C) Employees covered by more than 1 plan.—The Secretary may provide that 2 or more plans providing benefits to the same participant shall be treated as 1 plan for purposes of applying subsections (d)(1)(B), (d)(2), and (f).” (4) Subparagraph (B) of section 89(g)(2) of the 1986 Code (relating to sworn statements) is amended by adding at the end thereof the following new sentence: “No statement shall be required under clause (ii) with respect to any individual eligible for coverage at no cost under a health plan which provides core health benefits and with respect to whom the employee does not elect any core health coverage from the employer.” (5) Subparagraph (D) of section 89(g)(2) of the 1986 Code is amended by striking out “under such plan” and inserting in lieu thereof “under such plans”. (6) Section 89(g) of the 1986 Code is amended by striking out paragraph (6). (7) Subparagraph (A) of section 89(h)(1) of the 1986 Code (relating to excluded employees) is amended by inserting “(or 1st day of a period of less than 31 days specified by the plan)” after “month”. (8) Section 89(j) of the 1986 Code (relating to other definitions and special rules) is amended by adding at the end thereof the following new paragraph: “(12) Employers with only highly compensated employees.—The requirements of subsections (d) and (e) shall not apply to any statutory employee benefit plan for any year for which the only employees of the employer maintaining the plan are highly compensated employees.” (9) Section 89(k) of the 1986 Code (relating to requirement that plan be in writing) is amended by adding at the end thereof the following new paragraph: “(5) Loss of exemption for certain plans.—If a plan described in paragraph (2)(E) fails to meet the requirements of paragraph (1), the organization which is part of such plan shall not be exempt from tax under section 501(a).” (10) Section 6652(k)(2)(B) of the 1986 Code (relating to amount of additional tax) is amended by striking out “subsection (g)(3)” and inserting in lieu thereof “subsection (g)(3)(C)(i)”. (11) (A) Subsection (a) of section 125 of the 1986 Code is amended to read as follows: “(a) General Rule.—Except as provided in subsection (b), no amount shall be included in the gross income of a participant in a cafeteria plan solely because, under the plan, the participant may choose among the benefits of the plan.” (B) Paragraph (1) of section 125(b) of the 1986 Code is amended -by striking out “A plan shall be treated as failing to meet the 102 STAT. 3485requirements of this subsection” and inserting in lieu thereof “In the case of a highly compensated employee, subsection (a) shall not apply to any benefit attributable to a plan year”. (C) Paragraph (2) of section 125(b) of the 1986 Code is amended by striking out “a plan shall be treated as failing to meet the requirements of this subsection” and inserting in lieu thereof “subsection (a) shall not apply to any plan year.” (12) Subparagraph (B) of section 125(c)(1) of the 1986 Code (defining cafeteria plans) is amended to read as follows: “(B) the participant may choose among 2 or more benefits consisting of cash and qualified benefits.” (13) (A) Paragraph (1) of section 125(e) of the 1986 Code (defining qualified benefits) is amended by inserting “and without regard to section 89(a)” after “subsection (a)”. (B) The last sentence of section 125(b)(2) of the 1986 Code is amended to read as follows: “For purposes of the preceding sentence, qualified benefits shall not include benefits which (without regard to this paragraph) are includible in gross income.” (14) Subsection (d) of section 129 of the 1986 Code is amended by redesignating paragraph (8) as paragraph (7). (15) Paragraph (7) of section 129(d) of the 1986 Code (as so redesignated) is amended— (A) by inserting “under all plans of the employer” after “employees” the 2nd and 3rd time it appears in subparagraph (A), (B) by striking out “there shall be disregarded” in subparagraph (B) and inserting in lieu thereof “a plan may disregard”, and (C) by striking out “415((j)(7)” in subparagraph (B) and inserting in lieu thereof “414(q)(7)”. (16) Section 414(m)(4) of the 1986 Code is amended by inserting “and” at the end of subparagraph (A), by striking out the comma at the end of subparagraph (B) and inserting in lieu thereof a period, and by striking out subparagraphs (C) and (D). (17) Paragraph (2) of section 414(t) of the 1986 Code is amended by striking out “132,” and inserting in lieu thereof “132, 162(i)(2), 162(k),”. (18) Paragraph (6) of section 129(e) of the 1986 Code is amended by striking out “of subsection (d)” and inserting in lieu thereof “of subsection (d) (other than paragraphs (4) and (7) thereof)”. (19) Subparagraph (O of section 414(n)(3) of the 1986 Code is amended by striking out “132,” and inserting in lieu thereof “132, 162(i)(2), 162(k),”. (20) Section 414(t)(1) of the 1986 Code (relating to application of controlled group rules to certain employees) is amended by striking out “of section 414” each place it appears. (21) Section 89(j)(6) of the 1986 Code is amended by striking out “described in subparagraph (A), (B), or (O of subsection (i)(2)”. (22) (A) Section 3121 of the 1986 Code (relating to definitions) is amended by adding at the end thereof the following new sub-section: “(x) Benefits Provided Under Certain Employee Benefit Plans.—Notwithstanding any paragraph of subsection (a) (other 102 STAT. 3486than paragraph (1)), the term ‘wages’ shall include any amount which is includible in gross income by reason of section 89. (B) Section 3231(e) of the 1986 Code (defining compensation) is amended by adding at the end thereof the following new paragraph: “(8) Benefits provided under certain employee benefit plans.— Notwithstanding any other paragraph of this subsection (other than paragraph (2)), the term ‘compensation’ shall include any amount which is includible in gross income by reason of section 89.” (C) Section 3306 of the 1986 Code (relating to definitions) is amended by adding at the end thereof the following new subsection: “(t) Benefits Provided Under Certain Employee Benefit Plans.—Notwithstanding any paragraph of subsection (b) (other than paragraph (1)), the term ‘wages’ shall include any amount which is includible in gross income by reason of section 89/’ (D) Section 3401 of the 1986 Code (relating to definitions) is amended by adding at the end thereof the following new sub-section: “(g) Benefits Provided Under Certain Employee Benefit Plans.—Notwithstanding any paragraph of subsection (a), the term ‘wages’ shall include any amount which is includible in gross income by reason of section 89. (E) The third to last sentence of section 209 of the Social Security Act is amended— (i) by striking out the period at the end of clause (2) and inserting in lieu thereof “, or”, and (ii) by inserting after clause (2) the following new clause: “(3) Any amount required to be included in gross income under section 89 of the Internal Revenue Code of 1986.” (F) The amendments made by this paragraph shall not apply to any individual who separated from service with the employer before January 1, 1989. (23) (A) Sections 3121(a)(5)(G) and 3306(b)(5)(G) of the 1986 Code are each amended by inserting “if such payment would not be treated as wages without regard to such plan and it is reason-able to believe that (if section 125 applied for purposes of this section) section 125 would not treat any wages as constructively received” after “section 125)”. (B) Section 209(e)(9) of the Social Security Act is amended by inserting “if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that (if section 125 applied for purposes of this section) section 125 would not treat any wages as constructively received” after “1986)”. (24) Section 1151(h)(3) of the Reform Act is amended by striking out “Section 6039B(c)” and inserting in lieu thereof “Section 6039D(c)”. (25) Paragraph (1) of section 1151(k) of the Reform Act is amended by adding at the end thereof the following new sentence: “Notwithstanding the preceding sentence, the amendments made by subsections (e)(i) and (i)(3)(C) shall, to the extent they relate to sections 106, 162(i)(2), and 162(k) of the Internal Revenue Code of 1986, apply to years beginning after 1986.” (26) Section 1151(k) of the Reform Act is amended by adding at the end thereof the following new paragraph: 102 STAT. 3487 “(6) Certain plans maintained by educational institutions.—If an educational organization described in section 17O(b)(1)(A)(ii) of the Internal Revenue Code of 1986 makes an election under this paragraph with respect to a plan described in section 125(c)(2)(C) of such Code, the amendments made by this section shall apply with respect to such plan for plan years beginning after the date of the enactment of this Act.’ (27) (A) Section 4976 of the 1986 Code is amended by re-designating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: “(c) Tax on Funded Welfare Benefit Funds Which Include Discriminatory Employee Benefit Plan.— “(1) In general.— If— “(A) an employer maintains a welfare benefit fund, and “(B) a discriminatory employee benefit plan (within the meaning of section 89) is part of such fund for any plan year, there is hereby imposed on such employer for the taxable year with or within which the plan year ends a tax in the amount determined under paragraph (2). “(2) Amount of tax.— The amount of the tax under paragraph (1) shall be equal to the excess (if any) of— “(A) the product of the highest rate of tax imposed by section 11, multiplied by the lesser of— “(i) the aggregate excess benefits (as defined in section 89) for such plan year, or “(ii) the taxable income of the fund for such plan year, over “(B) the amount of tax imposed by chapter 1 on such fund for such plan year.” (B) Section 4976(b) of the 1986 Code is amended by adding at the end thereof the following new paragraph: “(5) Limitation in case of benefits to which section 89 applies.—If section 89 applies to any post-retirement medical benefit or life insurance benefit provided by a fund, the amount of the disqualified benefit under paragraph (1)(B) with respect to such benefit shall not exceed the aggregate excess benefits provided by the plan (as determined under section 89).” (C) Section 505(a)(1) of the 1986 Code is amended by adding at the end thereof the following new subsection: “This paragraph shall not apply to any organization by reason of a failure to meet the requirements of subsection (b) with respect to a benefit to which section 89 applies.” (28) Section 89(h)(4) of the 1986 Code is amended by striking out “subsection (h)(5)” and inserting in lieu thereof “subsection (g)(5)”. (29) Section 89(k)(1) of the 1986 Code is amended by striking out the last sentence and inserting in lieu thereof the following new sentences: “Such inclusion shall be coordinated (under regulations prescribed by the Secretary) with any inclusion under subsection (a) with respect to such plan. In the case of a statutory employee benefit plan described in subsection (i)(1)(B), any amount required to be included in gross income under this subsection shall be included in the gross income of the beneficiary.” (30) Section 129(d)(1)(B) of the 1986 Code is amended by striking out “(6)” and inserting in lieu thereof “(7)”. 102 STAT. 3488 (31) (A) Section 129(d) of the 1986 Code is amended— (i) by striking out the last sentence of paragraph (3), and (ii) by inserting at the end thereof the following new paragraph: “(8) Excluded employees.—For purposes of paragraphs (2), (3), and (7), there shall be excluded from consideration employees who are excluded from consideration under section 89(h).” (B) Sections 117(d)(4), 120(c)(2), 127(b)(2), 132(h)(1), and 505(b)(2) of the 1986 Code are each amended— (i) by striking out “may” the first place it appears and inserting in lieu thereof “shall”, and (ii) by striking out “may be” the second place it appears and inserting in lieu thereof “are”. (32) Section 505(b) of the 1986 Code is amended by adding at the end thereof the following new paragraph: “(7) $200,000 compensation limit.—A plan shall not be treat-ed as meeting the requirements of this subsection unless under the plan the annual compensation of each employee taken into account for any year does not exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time and in the same manner as under section 415(d).” (33) Section 3401(a) of the 1986 Code is amended by inserting “or” at the end of paragraph (18), by striking out paragraph (19), and by redesignating paragraph (20) as paragraph (19). (34) Section 89(1)(2) of the 1986 Code is amended by striking out “6652(1)” and inserting in lieu thereof “6652(k)”. (b) Amendments Related to Section 1161 of the Reform Act.— (1) Section 162(m) of the 1986 Code (relating to special rules for health insurance costs of self-employed individuals) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: “(4) Deduction not allowed for self-employment tax purposes.—The deduction allowable by reason of this subsection shall not be taken into account in determining an individual’s net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2.” (2) Section 162(m) of the 1986 Code (relating to cross reference) as redesignated by section 1161(a) of the Reform Act, is redesignated as subsection (n). (3) Section 162(m)(2)(A) of the 1986 Code is amended by inserting: “derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established” after “401(c))”. (4) Section 211(a) of the Social Security Act is amended by inserting after paragraph (13) the following new paragraph: “(14) The deduction under section 162(m) (relating to health insurance costs of self-employed individuals) shall not be allowed.” (c) Amendments Related to Section 1163 of the Reform Act.— (1) Paragraph (8) of section 129(e) of the 1986 Code (relating to treatment of onsite facilities) is amended— (A) by inserting “maintained by an employer” after “onsite facility”, (B) by inserting “of dependent care assistance provided to an employee” after “the amount”, (C) by inserting “of the facility by a dependent of the employee” after “utilization” in subparagraph (A), and 102 STAT. 3489 (D) by inserting “with respect to such dependent” after “provided” in subparagraph (B). (2) (A) Paragraph (2) of section 129(a) of the 1986 Code is amended to read as follows: “(2) Limitation of exclusion.— “(A) In general.—The amount which may be excluded under paragraph (1) for dependent care assistance with respect to dependent care services provided during a tax-able year shall not exceed $5,000 ($2,500 in the case of a separate return by a married individual). “(B) Year of inclusion.—The amount of any excess under subparagraph (A) shall be included in gross income in the taxable year in which the dependent care services were provided (even if payment of dependent care assistance for such services occurs in a subsequent taxable year). “(C) Marital status.—For purposes of this paragraph, marital status shall be determined under the rules of paragraphs (3) and (4) of section 21(e).” (B) Section 6051(a) of the 1986 Code is amended by striking out the period at the end of paragraph (8) and inserting in lieu thereof “, and”, and by adding at the end thereof the following new paragraph: “(9) the total amount incurred for dependent care assistance with respect to such employee under a dependent care assistance program described in section 129(d).” (C) (i) Except as provided in this subparagraph, the amendments made by this paragraph shall apply to taxable years beginning after December 31, 1987. (ii) A taxpayer may elect to have the amendment made by subparagraph (A) apply to taxable years beginning in 1987. (iii) In the case of a taxpayer not making an election under clause (ii), any dependent care assistance provided in a taxable year beginning in 1987 with respect to which reimbursement was not received in such taxable year shall be treated as provided in the taxpayer’s first taxable year beginning after December 31, 1987. (d) Amendment Related to Section 1164 of the Reform Act.—Section 119(d)(2) of the 1986 Code is amended— (1) by striking out “(as of the close of the calendar year in which the taxable year begins)” in subparagraph (A)(i). and (2) by adding at the end thereof the following: “The appraised value under subparagraph (a)(1) shall be determined as of the close of the calendar year in which the taxable year begins, or, in the case of a rental period not greater than 1 year, at any time during the calendar year in which such period begins.” (e) Amendments Related to Section 1166 of the Reform Act.—Section 7701(a)(20) of the 1986 Code (defining employee) is amended— (1) by striking out “106, and 125” and inserting in lieu thereof “and 106”, and (2) by inserting “and for purposes of applying section 125 with respect to cafeteria plans,” before “the term”. (f) Amendments Related to Section 1168 of the Reform Act.— (1) Paragraph (1) of section 134(b) of the 1986 Code is amended by striking out “or regulation thereunder” and inserting in lieu thereof “, regulation, or administrative practice”. 102 STAT. 3490 (2) (A) Section 134(b)(1) of the 1986 Code is amended by inserting “(other than personal use of a vehicle)” after “in-kind benefit”. (B) The amendment made by subparagraph (A) shall apply to taxable years beginning after December 31, 1986. (3) Section 134(b)(3)(A) of the 1986 Code is amended by striking out “under any provision of law or regulation described in paragraph (1)”. (4) Section 1168(c) of the Reform Act is amended by striking out “1986” and inserting in lieu thereof “1984”. (g) Amendments Related to Section 1172 or the Reform Act.— (1) Section 1172(b)(1)(A) of the Reform Act is amended by inserting “each place it appears” before the comma. (2) Paragraphs (2) and (3) of section 409(n) of the 1986 Code (relating to securities received in certain transactions) is amended by inserting “or section 2057” after “section 1042” each place it appears. (3) Paragraph (1) of section 2057(b) of the 1986 Code (relating to qualified sale) is amended by striking out “is”. (h) Amendments Related to Section 1173 of the Reform Act.— (1) Section 133 of the 1986 Code (relating to exclusion of interest on securities acquisition loans) is amended by adding at the end thereof the following new subsection: “(e) Period to Which Interest Exclusion Applies.— “(1) In general.—In the case of— “(A) an original securities acquisition loan, and “(B) any securities acquisition loan (or series of such loans) used to refinance the original securities acquisition loan, subsection (a) shall apply only to interest accruing during the excludable period with respect to the original securities acquisition loan. “(2) Excludable period.— For purposes of this subsection, the term ‘excludable period’ means, with respect to any original securities acquisition loan— “(A) In general—The 7-year period beginning on the date of such loan. “(B) Loans described in subsection (b)(1)(A).—If the term of an original securities acquisition loan described in subsection (b)(1)(A) is greater than 7 years, the term of such loan. This subparagraph shall not apply to a loan described in subsection (b)(3)(B). “(3) Original securities acquisition loan.—For the purposes of this subsection, the term “original securities acquisition loan’ means a securities acquisition loan described in subparagraph (A) or (B) of subsection (b)(1).” (2) (A) Section 133(b) of the 1986 Code (defining securities acquisition loan) is amended— (i) by striking out “or are used to refinance such a loan,” in paragraph (I)(A), (ii) by striking out “, except that this subparagraph shall not apply to any loan the commitment period of which exceeds 7 years” in paragraph (1)(B), and (iii) by adding at the end thereof the following new paragraph: “(5) Treatment of refinancings.— The term ‘securities acquisition loan’ shall include any loan which— 102 STAT. 3491 “(A) is (or is part of a series of loans) used to refinance a loan described in subparagraph (A) or (B) of paragraph (1), and “(B) meets the requirements of paragraphs (2) and (3).” (B) Subparagraph (B) of section 133(b)(3) of the 1986 Code is amended to read as follows: “(B) repayment terms providing for more rapid repayment of principal or interest on such loan, but only if allocations under the plan attributable to such repayment do not discriminate in favor of highly compensated employees (within the meaning of section 414(q)). (3) Section 404(k) of the 1986 Code is amended— (A) by inserting “(whether or not allocated to participants)” after “employer securities” in paragraph (2)(C), and (B) by adding at the end thereof the following new sentence: “Paragraph (2)(C) shall not apply to dividends from employer securities which are allocated to any participant unless the plan provides that employer securities with a fair market value not less than the amount of such dividends are allocated to such participant for the year which (but for paragraph (2)(C)) such dividends would have been allocated to such participant.” (4) Subparagraph (C) of section 852(b)(5) of the 1986 Code (relating to interest on certain loans used to acquire employer securities) is amended by striking out “paragraph” and inserting in lieu thereof “section”. (5) (A) The amendments made by paragraphs (1) and (2) shall apply to— (i) any loan used to acquire employer securities after July 18, 1984, and (ii) loans made after July 18, 1984, which were used (or were part of a series of loans used) to refinance any loan which— (I) was used to acquire employer securities after May 23, 1984 (July 18, 1984, in the case of a loan described in section 133(b)(3)(B) of the Internal Revenue Code of 1986), and (II) met the requirements of section 133 (other than subsection (b)(2) thereof) of such Code as in effect as of the later of the date on which the loan was made, or July 19, 1984. In no event shall such amendments apply to any loan described in section 133(b)(1)(B) of such Code which is made before October 22, 1986 (or loan used, or part of a series of loans used, to refinance such a loan). (B) Subparagraph (B) of section 1173(c)(2) of the Reform Act is amended to read as follows: “(B) Section 133(b)(1)(A) of the Internal Revenue Code of 1986, as amended by subsection (b)(2), shall apply to any loan used (or part of a series of Ioans used) to refinance a loan which— “(i) was used to acquire employer securities after May 23, 1984, and “(ii) met the requirements of section 133 of the Internal Revenue Code of 1986 as in effect as of the later of— “(I) the date on which the loan was made, or 102 STAT. 3492 “(II) July 19, 1984” (6) Section 404(k) of the 1986 Code is amended by striking out “merely by reason of any distribution” in the third sentence and inserting in lieu thereof “or as engaging in a prohibited transaction for purposes of section 4975(d)(3) merely by reason of any distribution or payment”. (i) Amendments Related to Section 1174 of the Reform Act.— (1) Clause (ii) of section 409(o)(1)(A) of the 1986 Code (relating to distribution requirement) is amended by striking out “such year” and inserting in lieu thereof “distribution is required to begin under this clause”. (2) Section 1174(a)(2) of the Reform Act is amended by striking out “plan terminations” and inserting in lieu thereof “distributions”. (3) Section 409(o)(1)(A) of the 1986 Code is amended by striking out “unless the participant otherwise elects” and inserting in lieu thereof “if the participant and, if applicable pursuant to sections 401 (a)(11) and 417, with the consent of the participant’s spouse elects”. (j) Amendments Related to Section 1175 of the Reform Act.— (1) Subclause (II) of section 401(a)(28)(B) of the 1986 Code (relating to method of meeting requirements) is amended by inserting “and within 90 days after the period during which the election may be made, the plan invests the portion of the participant’s account covered by the election in accordance with such election” after “clause (i)”. (2) Clause (iv) of section 401(a)(28)(B) of the 1986 Code is amended to read as follows: “(iv) Qualified election period.— For purposes of this subparagraph, the term ‘qualified election period’ means the 6-plan-year period beginning with the later of— “(I) the 1st plan year in which the individual first became a qualified participant, or “(II) the 1st plan year beginning after December 31, 1986. For purposes of the preceding sentence, an employer may elect to treat an individual first becoming a qualified participant in the 1st plan year beginning in 1987 as having become a participant in the 1st plan year beginning in 1988.” (3) The last sentence of section 409(d) of the 1986 Code (relating to employer securities must stay in the plan) is amended by inserting “or to any distribution or reinvestment required under section 401(a)(28)” after “section 401(a)(9)”. (4) Section 4978(d) of the 1986 Code (relating to section not to apply to certain dispositions) is amended by adding at the end thereof the following new paragraph: “(4) Dispositions to meet diversification requirements.—This section shall not apply to any disposition of qualified securities which is required under section 401(a)(28).” (5) Section 409(h) of the 1986 Code (relating to right to demand employer securities; put option) is amended by adding at the end thereof the following new paragraph: (7) Exception where employee elected diversification.—Paragraph (1)(A) .shall not apply with respect to the portion of 102 STAT. 3493the participant’s account which the employee elected to have reinvested under section 401(a)(28)(B).” (7) Section 401(a)(28)(B) of the 1986 Code is amended by adding at the end thereof the following new clause: “(v) Coordination with distribution rules.— Any distribution required by this subparagraph shall not be taken into account in determining whether— “(I) a subsequent distribution is a lump-sum distribution under section 402(e)(4)(A), or “(II) section 402(a)(5)(D)(iii) applies to a subsequent distribution.” (k) Amendments Related to Section 1176 of the Reform Act.— (1) Section 401(a)(22) of the 1986 Code is amended by striking out “is not publicly traded” each place it appears and inserting in lieu thereof “is not readily tradable on an established market”. (2) Section 401(a)(22) of the 1986 Code is amended by adding at the end thereof the following new sentence: “For purposes of the preceding sentence, subsections (b), (c), (m), and (o) of section 414 shall not apply except for determining whether stock of the employer is not readily tradable on an established market.” (3) Section 409(1)(4) of the 1986 Code (relating to nonvoting common stock may be acquired in certain cases), as added by section 1176(b) of the Reform Act, is redesignated as paragraph (5). (l) Amendments Related to Section 1177 of the Reform Act.— (1) Paragraph (2) of section 1177(b) of the Reform Act is amended by striking out “section 143(d)(3)(C)” and inserting in lieu thereof “section 146(d)(3)(C)”. (2) Subsection (b) of section 1177 of the Reform Act is amended by striking out “made by this subtitle” and inserting in lieu thereof “made by section 1175”. (3) If any newspaper corporation described in section 1177(b) of the Reform Act, as amended by this subsection, pays in cash a dividend within 60 days after the date of the enactment of this Act to the corporation’s employee stock ownership plans and if a corporate resolution declaring such dividend was adopted before November 30, 1987, and such resolution specifies that such dividend shall be contingent upon passage by the Congress of technical corrections, then such dividend (to the extent the aggregate amount so paid does not exceed $3,500,000) shall be treated as if it had been declared and paid in 1987 for all purposes of the Internal Revenue Code of 1986.