is properly allocable (as determined under regulations prescribed by the Secretary or his delegate) to the cost of life, accident, health, or other insurance. (3) LIFE INSURANCE CONTRACTS.***(A) This paragraph shall apply to any life insurance contract ***(i) purchased as a part of a plan described in section 403(a), or **(ii) purchased by a trust decribed in section 401(a) which is exempt from tax under section 501(a) if the proceeds of such contract are payable directly or indirectly to a participant in such trust or to a beneficiary of such participant. (B) Any contribution to a plan described in subparagraph (A) (1) or a trust described in subparagraph (A) (ii) which is allowed as a deduction under section 404, and any income of a trust described in subparagraph (A) (i), which is determined in accordance with regulations prescribed by the Secretary or his delegate to have been applied to purchase the life insurance protection under a contract described in subparagraph (A), is includible in the gross income of the participant for the taxable year when so applied. (C) In the case of the death of an individual insured under a contract described in subparagraph (A), an amount equal to the cash surrender value of the contract immediately before the death of the insured shall be treated as a payment under such plan or a distribution by such trust, and the excess of the amount payable by reason of the death of the insured over such cash surrender value shall not be includible in gross income under this section and shall be treated as provided in section 101. ***(4) AMOUNTS CONSTRUCTIVELY RECEIVED. "(A) ASSIGNMENTS OR PLEDGES.If during any taxable year an owner-employee assigns (or agrees to assign) or pledges (or agrees to pledge any portion of his interest in a trust described in section 401(a) which is exempt from tax under section 501(a) or any portion of the value of a contract purchased as part of a plan described in section 403(a), such portion shall be treated as having been received by such owner-employee as a distribution from such trust or as an amount received under the contract. (B) LOANS ON CONTRACTS.—If during any taxable year, an owneremployee receives, directly or indirectly, any amount from any insurance company as a loan under a contract purchased by a trust described in section 401(a) which is exempt from tax under section 501 (a) or purchased as part of a plan described in section 403(a), and issued by such insurance company. such amount shall be treated as an amount received under the contract. ***(5) PENALTIES applicable TO CERTAIN AMOUNTS RECEIVED BY OWNER-EMPLOYEES. ***(A) This paragraph shall apply— (1) to amounts (other than any amount received by an individual in his capacity as a policyholder of an annuity, endowment, or life insurance contract which is in the nature of a dividend or similar distribution) which are received from a qualfied trust described in section 401(a) or under a plan described in section 403(a) and which are received by an individual, who is, or has been, an owner-employee, before such individual attains the age of 5912 years, for any reason other than the individual's becoming disabled (within the meaning of section 213(g) (3)), but only to the extent that such amounts are attributable to contributions paid on behalf of such individual (whether or not paid by him) while he was an owner-employee, "(ii) to amounts which are received from a qualified trust described in section 401(a) or under a plan described in section 403 a) at any time by an individual who is, or has been, an owner-employee, or by the successor of such individual, but only to the extent that such amounts are determined, under regulations prescribed by the Secretary or his delegate, to exceed the benefits provided for such individual under the plan formula, and "(iii) to amounts which are received, by an individual who is, or has been, an owner-employee, by reason of the distribution under the provisions of section 401(e) (2) (E) of his entire interest in all qualified trusts described in section 401(a) and in all plans described in section 403(a). (B) (1) If the aggregate of the amounts to which this paragraph applies received by any person in his taxable year equals or exceeds $2,500, the increase in his tax for the taxable year in which such amounts are received and attributable to such amounts shall not be less than 110 percent of the aggregate increase in taxes, for the taxable year and the 4 immediately preceding taxable years, which would have resulted if such amounts had been included in such person's gross income ratably over such taxable years. "(ii) If deductions have been allowed under section 404 for contributions paid on behalf of the individual while he is an owner-employee for a number of prior taxable years less than 4, clause (1) shall be applied by taking into account a number of taxable years immediately preceding the taxable year in which the amount was so received equal to such lesser number. ***(C) If subparagraph (B) does not apply to a person for the taxable year, the increase in tax of such person for the taxable year attributable to the amounts to which this paragraph applies shall be 110 percent of such increase (computed without regard to this subparagraph). "'(D) Subparagraph (A)(ii) of this paragraph shall not apply to any amount to which section 402(a) (2) or 403(a) (2) applies. ***(E) For special rules for computation of taxable income for taxable years to which this paragraph applies, see subsection (n) (3). (6) OWNER-EMPLOYEE DEFINED.— for purposes of this subsection, the term "owner-employee" has the meaning assigned to it by section 401(c)(3). ***(n) TREATMENT OF CERTAIN DistriBUTIONS WITH Respect to CONTRIBUTIONS BY SELF-EMPLOYED INDIVIDUALS. — ***(1) APPLICATION OF SUBSECTION.—— **(A) DISTRIBUTIONS BY EMPLOYEES' TRUST.—Subject to the provisions of subparagraph (C), this subsection shall apply to amounts distributed to a distributee, in the case of an employees' trust described in section 401(a) which is exempt from tax under section 501(a), if the total distributions payable to the distributee, with respect to an employee are paid to the distributee within one taxable year of the distributee (i) on account of the employee's death, (ii) after the employee has attained the age of 5911⁄2 years, or (iii) after the employee has become disabled (within the meaning of section 213(g) (3)). ***(B) ANNUITY PLANS-Subject to the provisions of subparagraph (C), this subsection shall apply to amounts paid to a payee, in the case of an annuity plan described in section 403(a), if the total amounts payable to the payee with respect to an employee are paid to the payee within one taxable year of the payee '(1) on account of the employee's death, (ii) after the employee has attained the age of 59 years, or (iii) after the employee has become disabled (within the meaning of section 213(g) (3)). ***(C) LIMITATIONS AND EXCEPTIONS. This subsection shall apply ***(i) only with respect to so much of any distribution or payment to which (without regard to this subparagraph) subparagraph (A) or (B) applies as is attributable to contributions made on behalf of an employee while he was an employee within the meaning of section 401(e) (1), and "(ii) if the recipient is the employee on whose behalf such contributions were made, only if contributions which were allowed as a deduction under section 404 have been made on behalf of such employee while he was an employee within the meaning of section 401(c) (1) for 5 or more taxable years prior to the taxable year in which the total distributions payable or total amounts payable, as the case may be, are paid. This subsection shall not apply to amounts described in clauses (ii) and (iii) of subparagraph (A) of subsection (m) (5) (but, in the case of amounts described in clause (ii) of such subparagraph, only to the extent that subsection (m) (5) applies to such amounts). "(2) LIMITATION OF TAX.-In any case to which this subsection applies, the tax attributable to the amounts to which this subsection applies for the taxable year in which such amounts are received shall not exceed whichever of the following is the greater: "(A) 5 times the increase in tax which would result from the inclusion in gross income of the recipient of 20 percent of so much of the amount so received as is includible in gross income, or "(B) 5 times the increase in tax which would result if the taxable income of the recipient for such taxable year equaled 20 percent of the amount of the taxable income of the recipient for such taxable year determined under paragraph (3) (A). "(3) DETERMINATION OF TAXABLE INCOME.-Notwithstanding section 63 (relating to definition of taxable income), for purposes only of computing the tax under this chapter attributable to amounts to which this subsection or subsection (m) (5) applies and which are includible in gross income "(A) the taxable income of the recipient for the taxable year of receipt shall be treated as being not less than the amount by which (i) the aggregate of such amounts so includible in gross income exceeds (ii) the amount of the deductions allowed for such taxable year under section 151 (relating to deductions for personal exemptions); and "(B) in making ratable inclusion computations under paragraph (5) (B) of subsection (m), the taxable income of the recipient for each taxable year involved in such ratable inclusion shall be treated as being not less than the amount required by such paragraph (5) (B) to be treated as includible in gross income for such taxable year. In any case in which the preceding sentence results in an increase in taxable income for any taxable year, the resulting increase in the taxes imposed by section 1 or 3 for such taxable year shall not be reduced by any credit under part IV of subchapter A (other than section 31 thereof) which, but for this sentence, would be allowable.' "(c) CAPITAL GAINS TREATMENT OF CERTAIN EMPLOYEES' TRUST DISTRIBUTION.Section 402 (a) (2) of the Internal Revenue Code of 1954 (relating to capital gains treatment for certain distributions) is amended by adding at the end thereof the following new sentence: "This paragraph shall not apply to distributions paid to any distributee to the extent such distributions are attributable to contributions made on behalf of the employee while he was an employee within the meaning of section 401 (c) (1).' "(d) CAPITAL GAINS TREATMENT OF CERTAIN EMPLOYEES' ANNUITY PAYMENTS.— Section 403 (a) of the Internal Revenue Code of 1954 (relating to taxability of a beneficiary under a qualified annuity plan) is amended "(1) by striking out in paragraph (2) (A) (i) 'which meets the requirements of sections 401(a) (3), (4), (5), and (6)', and inserting in lieu thereof 'described in paragraph (1)'; "(2) by adding at the end of paragraph (2) (A) the following new sentence: "This subparagraph shall not apply to amounts paid to any payee to the extent such amounts are attributable to contributions made on behalf of the employee while he was an employee within the meaning of section 401(c) (1).'; and "(3) by adding after paragraph (2) the following new paragraph: "(3) SELF-EMPLOYED INDIVIDUALS.For purposes of this subsection, the term "employee" includes an individual who is an employee within the meaning of section 401 (c) (1), and the employer of such individual is the person treated as his employer under section 401 (c) (4).' "SEC. 5. PLANS FOR PURCHASE OF UNITED STATES BONDS. "(a) QUALIFIED BOND PURCHASE PLANS.-Part I of subchapter D of chapter 1 of the Internal Revenue Code of 1954 (relating to deferred compensation, etc.) is amended by adding at the end thereof the following new section: "SEC. 405. QUALIFIED BOND PURCHASE PLANS. "(a) REQUIREMENTS FOR QUALIFICATION. A plan of an employer for the purchase for and distribution to his employees or their beneficiaries of United States bonds described in subsection (b) shall constitue a qualified bond purchase plan under this section if "(1) the plan meets the requirements of section 401(a) (3), (4), (5), (6), (7), and (8) and, if applicable, the requirements of section 401(a) (9) and (10) and of section 401(d) (other than paragraphs (1), (5) (B), and (8)); and "(2) contributions under the plan are used solely to purchase for employees or their beneficiaries United States bonds described in subsection (b). "(b) BONDS TO WHICH APPLICABLE. "(1) CHARACTERISTICS OF BONDS.This section shall apply only to a bond issue under the Second Liberty Bond Act, as amended, which by its terms, or by regulations prescribed by the Secretary under such Act "(A) provides for payment of interest, or investment yield, only upon redemption; "(B) may be purchased only in the name of an individual; "(C) ceases to bear interest, or provide investment yield, not later than 5 years after the death of the individual in whose name it is purchased; "(D) may be redeemed before the death of the individual in whose name it is purchased only if such individual "(i) has attained the age of 591⁄2 years, or "(ii) has become disabled (within the meaning of section 213(g) (3)); and "(E) is nontransferable. "(2) MUST BE PURCHASED IN NAME OF EMPLOYEE.-This section shall apply to a bond described in paragraph (1) only if it is purchased in the name of the employee. "(c) DEDUCTION FOR CONTRIBUTIONS TO BOND PURCHASE PLANS.-Contributions paid by an employer to or under a qualified bond purchase plan shall be allowed as a deduction in an amount determined under section 404 in the same manner and to the same extent as if such contributions were made to a trust described in section 401(a) which is exempt from tax under section 501(a). "(d) TAXABILITY OF BENEFICIARY OF QUALIFIED BOND PURCHASE PLAN. "(1) GROSS INCOME NOT TO INCLUDE BONDS AT TIME OF DISTRIBUTION.-For purposes of this chapter, in the case of a distributee of a bond described in subsection (b) under a qualified bond purchase plan, or from a trust described in section 401(a) which is exempt from tax under section 501(a), gross income does not include any amount attributable to the receipt of such bond. Upon redemption of such bond, the proceeds shall be subject to taxation under this chapter, but the provisions of section 72 (relating to annuities, etc.) and section 1232 (relating to bonds and other evidences of indebtedness) shall not apply. "(2) BASIS.-The basis of any bond received by a distributee under a qualified bond purchase plan "(A) if such bond is distributed to an employee, or with respect to an employee, who at the time of purchase of the bond, was an employee other than an employee within the meaning of section 401 (c) (1), shall be the amount of the contributions by the employee which were used to purchase the bond, and "(B) if such bond is distributed to an employee, or with respect to an employee, who, at the time of purchase of the bond, was an employee within the meaning of section 401 (c) (1), shall be the amount of the contributions used to purchase the bond which were made on behalf of such employee and were not allowed as a deduction under subsection (c). The basis of any bond described in subsection (b) received by a distributee from a trust described in section 401(a) which is exempt from tax under section 501(a) shall be determined under regulations prescribed by the Secretary or his delegate. "(e) CAPITAL GAINS TREATMENT NOT TO APPLY TO BONDS DISTRIBUTED BY TRUSTS.-Section 402(a) (2) shall not apply to any bond described in subsection (b) distributed to any distributee and, for purposes of applying such section, any such bond distributed to any distributee and any such bond to the credit of any employee shall not be taken into account. ***(f) EMPLOYEE DEFINED.-For purposes of this section, the term 'employee' includes an individual who is an employee within the meaning of section 401(c) (1), and the employer of such individual shall be the person treated as his employer under section 401 (c) (4). "(g) PROOF OF PURCHASE.-At the time of purchase of any bond to which this section applies, proof of such purchase shall be furnished in such form as will enable the purchaser, and the employee in whose name such bond is purchased, to comply with the provisions of this section. ***(h) REGULATIONS.-The Secretary or his delegate shall prescribe such regulations as may be necessary to carry out the provisions of this section.' "(b) CLERICAL AMENDMENT.-The table of sections for such part is amended by adding at the end thereof the following new item: "SEC, 405. Qualified bond purchase plans.' "SEC. 6. PROHIBITED TRANSACTIONS. "Section 503 of the Internal Revenue Code of 1954 (relating to prohibited transactions) is amended by adding at the end thereof the following new subsection: ***(j) TRUSTS BENEFITING CERTAIN OWNER-EMPLOYEES.— "(1) PROHIBITED TRANSACTIONS.-In the case of a trust described in section 401(a) which is part of a plan providing contributions or benefits for employees some or all of whom are owner-employees (as defined in section 401(c) (3)) who control (within the meaning of section 401 (d) (9) (B)) the trade or business with respect to which the plan is established, the term "prohibited transaction" also means any transaction in which such trust, directly or indirectly— (A) lends any part of the corpus or income of the trust to; "(B) pays any compensation for personal services rendered to the trust to; "(C) makes any part of its services available on a preferential basis to; or "(D) acquires for the trust any property from, or sells any property to; any person described in subsection (c) or to any such owner-employee, a member of the family (as defined in section 267 (c) (4)) of any such owner employee, or a corporation controlled by any such owner-employee through the ownership, directly or indirectly. of 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation. "(2) SPECIAL RULE FOR LOANS.-For purposes of the application of paragraph (1)(A), the following rules shall apply with respect to a loan made before the date of the enactment of this subsection which would be a prohibited transaction if made in a taxable year beginning after December 31, 1962: (A) If any part of the loan is repayable prior to December 31, 1965, the renewal of such part of the loan for a period not extending beyond December 31, 1965, on the same terms, shall not be considered a prohibited transaction. (B) If the loan is repayable on demand, the continuation of the loan beyond Demember 31, 1965. shall be considered a prohibited transaction.' "SEC. 7. OTHER SPECIAL RULES, TECHNICAL CHANGES, AND ADMINISTRATIVE PROVISIONS. "(a) RETIREMENT INCOME CREDIT. Section 37 (c) (1) of the Internal Revenue Code of 1954 (relating to definition of retirement income) is amended "(1) by striking out subparagraph (A) and inserting in lieu thereof the following: "(A) pensions and annuities (including, in the case of an individual who is, or has been, an employee within the meaning of section 401(c)(1), distributions by a trust described in section 401(a) which is exempt from tax under section 501 (a)),'; and "(2) by striking out 'and' at the end of subparagraph (C), by striking out 'or' at the end of subparagraph (D) and inserting in lieu thereof 'and'. and by adding after subparagraph (D) the following new subparagraph: (E) bonds described in section 405(b) (1) which are received under a qualified bond purchase plan described in section 405 (a) or in a distribution from a trust described in section 401(a) which is exempt from tax under section 501(a), or'. "(b) ADJUSTED GROSS INCOME.-Section 62 of the Internal Revenue Code of 1954 (relating to the definition of adjusted gross income) is amended by inserting after paragraph (6) the following new paragraph: "(7) PENSION, PROFIT-SHARING, ANNUITY, AND BOND PURCHASE PLANS OF SELF-EMPLOYED INDIVIDUALS.-In the case of an individual who is an employee within the meaning of section 401(c) (1), the deductions allowed by section 404 and section 405(c) to the extent attributable to contributions made on behalf of such individual.' "(c) DEATH BENEFITS.—Section 101(b) of the Internal Revenue Code of 1954 (relating to employees' death benefits) is amended "(1) by striking out clause (ii) of paragraph (2) (B) and inserting in lieu thereof the following: ***(ii) under an annuity contract under a plan described in section 403(a), or'; and "(2) by adding at the end thereof the following new paragraph: ***(3) SELF-EMPLOYED INDIVIDUAL NOT CONSIDERED AN EMPLOYEE-For purposes of this subsection, the term "employee" does not include an individual who is an employee within the meaning of section 401(c) (1) relating to self-employed individuals).' "(d) AMOUNTS RECEIVED THROUGH ACCIDENT OR HEALTH INSURANCE—Section 104(a) of the Internal Revenue Code of 1954 (relating to compensation for injuries or sickness) is amended by adding at the end thereof the following new sentence: 'For purposes of paragraph (3), in the case of an individual who is, or has been, an employee within the meaning of section 401 (c) (1) (relating to self-employed individuals), contributions made on behalf of such individual while he was such an employee to a trust described in section 401(a) which is exempt from tax under section 501(a), or under a plan described in section 403(a), shall, to the extent allowed as deductions under section 404, be treated as contributions by the employer which were not includible in the gross income of the employee.' "(e) AMOUNTS RECEIVED UNDER ACcCIDENT AND HEALTH PLANS-Section 105 of the Internal Revenue Code of 1954 (relating to amounts received under accident and health plans) is amended by adding at the end thereof the following new subsection: "(g) SELF-EMPLOYED INDIVIDUAL NOT CONSIDERED AN EMPLOYEE-For purposes of this section, the term "employee" does not include an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals).' "(1) NET OPERATING LOSS DEDUCTION.-Section 172(d) (4) of the Internal Revenue Code of 1954 (relating to nonbusiness deductions of taxpayers other than corporations) is amended “(1) by striking out 'and' at the end of subparagraph (B); "(2) by striking out the period at the end of subparagraph (C) and inserting ; and'; and “(3) by adding after subparagraph (C) the following new subparagraph: "'(D) any deduction allowed under section 404 or section 405(c) to the extent attributable to contributions which are made on behalf of an individual who is an employee within the meaning of section 401 (c) (1) shall not be treated as attributable to the trade or business of such individual.' "(g) CERTAIN LIFE INSURANCE RESERVES.-Section 805(d)(1) of the Internal Revenue Code of 1954 (relating to pension plan reserves) is amended— "(1) by striking out in subparagraph (B) 'meeting the requirements of section 401(a) (3), (4), (5), and (6) or' and inserting in lieu thereof 'described in section 403 (a), or plans meeting'; and "(2) by striking out in subparagraph (C) 'and (6)' and inserting in lieu thereof '(6), (7), and (8)'. "(h) UNINCORPORATED BUSINESS ELECTING TO BE TAXED AS CORPORATIONS.-Section 1361 (d) of the Internal Revenue Code of 1954 (relating to unincorporated business enterprises electing to be taxed as domestic corporations) is amended by inserting before the period at the end thereof the following: 'other than an employee within the meaning of section 401 (c) (1) (relating to self-employed individuals), or for purposes of section 405 (relating to qualified bond purchase plans) other than an employee described in section 405 (f)'. "(1) ESTATE TAX EXEMPTION OF EMPLOYEES' ANNUITIES.-Section 2039 of the Internal Revenue Code of 1954 (relating to exemption from the gross estate of annuities under certain trusts and plans) is amended "(1) by striking out in subsection (c) (2) 'met the requirements of section 401(a) (3), (4), (5), and (6)', and inserting 'was a plan described in section 403 (a)'; and "(2) by adding at the end of subsection (c) the following new sentence: 'For purposes of this subsection, contributions or payments on behalf of the decedent while he was an employee within the meaning of section 401(c) (1) made under a trust or plan described in paragraph (1) or (2) shall be considered to be contributions or payments made by the decedent.'. "(j) GIFT TAX EXEMPTION OF EMPLOYEES' ANNUITIES.-Section 2517 of the Internal Revenue Code of 1954 (relating to exclusion from gift tax in case of certain annuities under qualified plans) is amended "(1) by striking out in subsection (a) (2) 'met the requirements of section 401(a) (3), (4), (5), and (6)', and inserting in lieu thereof 'was a plan described in section 403 (a)'; and "(2) by adding at the end of subsection (b) the following new sentence: 'For purposes of this subsection, payments or contributions on behalf of an individual while he was an employee within the meaning of section 401 (c) (1) made under a trust or plan described in subsection (a) (1) or (2) shall be considered to be payments or contributions made by the employee.' "(k) FEDERAL UNEMPLOYMENT TAX ACT.-Section 3306(b) (5) of the Internal Revenue Code of 1954 (relating to definition of wages) is amended by striking out subparagraph (B) and inserting in lieu thereof the following new subparagraphs: "(B) under or to an annuity plan which, at the time of such payment, is a plan described in section 403 (a), or "(C) under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405 (a);' "(1) WITHHOLDING OF INCOME TAX.Section 3401(a) (12) of the Internal Revenue Code of 1954 (relating to definition of wages) is amended by striking out subparagraph (B) and inserting in lieu thereof the following new subparagraphs: "(B) under or to an annuity plan which, at the time of such payment, is a plan described in section 403 (a); or "(C) under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a).' "(m) INFORMATION REQUIREMENTS."(1) IN GENERAL.-Subpart B of part III of subchapter A of chapter 61 of the Internal Revenue Code of 1954 relating to information concerning transactions with other persons) is amended by adding after section 6046 the following new section: "SEC. 6047. INFORMATION RELATING TO CERTAIN TRUSTS AND ANNUITY AND BOND PURCHASE PLANS. "(a) TRUSTEES AND INSURANCE COMPANIES.-The trustee of a trust described in section 4010) which is exempt from tax under section 501 (a) to which contributions have been paid under a plan on behalf of any owner-employee (as defined in section 401 (c) (3)), and each insurance company or other person which is the issuer of a contract purchased by such a trust, or purchased under a plan described in section 403 (a), contributions for which have been paid on behalf of any owner-employee, shall file such returns (in such form and at such times), keep such records, make such identification of contracts and funds (and accounts within such funds), and supply such information, as the Secretary or his delegate shall by forms or regulations prescribe. "(b) OWNER-EMPLOYEES.-Every individual on whose behalf contributions have been paid as an owner-employee (as defined in section 401 (c) (3)) "(1) to a trust described in section 401(a) which is exempt from tax under section 501(a), or "(2) to an insurance company or other person under a plan described in section 403(a), shall furnish the trustee, insurance company, or other person, as the case may be, such information at such times and in such form and manner as the Secretary or his delegate shall prescribe by forms or regulations. "(c) EMPLOYEES UNDER UNDER QUALIFIED BOND PURCHASE PLANS.-Every individual in whose name a bond described in section 405(b) (1) is purchased by his employer under a qualified bond purchase plan described in section 405 (a), or by a trust described in section 401 (a) which is exempt from tax under section 501 (a), shall furnish "(1) to his employer or to such trust, and "(2) to the Secretary (or to such person as the Secretary may by regulations prescribe), such information as the Secretary or his delegate shall by forms or regulations prescribe. "(d) CROSS REFERENCE. "For criminal penalty for furnishing fraudulent information, information, see section 7207.' "(2) CLERICAL AMENDMENT.-The table of sections for such subpart B is amended by adding after the reference to section 6046 the following: "'Sec. 6047. Information relating to certain trusts and annuity and bond purchase plans.' "(3) PENALTY.-Section 7207 of the Internal Revenue Code of 1954 (relating to fraudulent returns, statements, or other documents) is amended by adding at the end thereof the following new sentence: 'Any person required pursuant to section 6047 (b) or (c) to furnish any information to the Secretary or any other person who willfully furnishes to the Secretary or such other person any information known by him to be fraudulent or to be false as to any material matter shall be fined not more than $1,000, or imprisoned not more than 1 year, or both." "SEC. 8. EFFECTIVE DATE. "The amendments made by this Act shall apply to taxable years beginning after December 31, 1962." Mr. MCCARTHY submitted the following notice in writing: In accordance with rule XI of the Standing Rules of the Senate. I hereby give notice in writing that it is my intention to move to suspend paragraph 4 of rule XVI for the purpose of proposing to the bill (H.R. 13290) making supplemental appropriations for the fiscal year ending June 30, 1963, and for other purposes, the following amendment; namely, at the end of the bill add the following new section: "SEC. That section 6 of the Temporary Extended Unemployment Compensation Act of 1961 (75 Stat. 8) is amended to read as follows: "'COVERED PERIOD ""SEC. 6. In the case of any individual, the covered period referred to in sections 3 and 4 is the period "(1) beginning on whichever of the following is the later: "(A) April 8, 1961; or "(B) the day after the date on which any applicable agreement is entered into under section 7 or 8, and "(2) ending "(A) on February 28, 1963, or "(B) on May 31, 1963, in the case of an individual who (for a week beginning before March 1, 1963) had a week with respect to which temporary extended unemployment compensation was payable under section 3, reimbursement was payable under section 4, or reimbursement would have been so payable but for the fact that the unemployment compensation was payable under title XV, with the exception of the period ***(3) beginning "(A) on April 1, 1962, or (B) on July 1, 1962, in the case of an individual who for a week beginning before April 1, 1962) had a week with respect to which temporary extended unemployment compensation was payable under section 3. reimbursement was payable under section 4, or reimbursement would have been so payable but for the fact that the unemployment compensation was payable under the XV, and "(4) ending on November 3, 1962.'* PROMOTION OF FOREIGN COMMERCE THROUGH MOBILE TRADE FAIRS The PRESIDING OFFICER laid before the Senate the amendment this day received from the House of Representatives for concurrence to the text of the bill (S. 3389) to promote the foreign commerce of the United States through the use of mobile trade fairs, together with the amendment to the title providing that the same read as follows: "An Act to amend the Merchant Marine Act, 1936, to develop the American merchant marine and promote the foreign commerce of the United States through the use of mobile trade fairs." On motion by Mr. ENGLE. Resolved, That the Senate disagree to the amendment of the House of Representatives to the said bill and ask a conference with the House on the disagreeing votes of the two Houses thereon. Ordered, That the conferees on the part of the Senate be appointed by the Presiding Officer; and The PRESIDING OFFICER appointed Mr. ENGLE, Mr. BARTLETT, and Mr. BurLER. Ordered. That the Secretary notify the House of Representatives theerof. CONFERENCE REPORT ON H.R. 11665 Mr. JORDAN of North Carolina submitted the following conference report: The committee of conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H.R. 11665) to revise the formula for apportioning cash assistance funds among the States under the National School Lunch Act, and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows: That the House recede from its disagreement to the amendment of the Senate numbered 1, and agree to the same. Amendment numbered 2: That the House recede from its disagreement to the amendment of the Senate numbered 2, and agree to the same with an amendment, as follows: In lieu of the matter proposed to be inserted by the Senate amendment insert the following: Sec. 11. (a) There is hereby authorized to be appropriated $10.000.000 for the fiscal year ending June 20, 1963, and such sums as may be necessary for each succeeding fiscal year to provide special assistance to schools drawing attendance from areas in which poor economic conditions exist, for the purpose of helping such schools to meet the requirement of section 9 of this Act concerning the service of lunches to children unable to pay the full cost of such lunches. (b) Of the sums appropriated pursuant to this section for any fiscal year, 3 per centum shall be available for apportionment to Puerto Rico, the Virgin Islands, Guam, and American Samoa. From the funds so available the Secretary shall apportion to each such State an amount which bears the same ratio to the total of such funds as the number of free or reduced-price lunches served in accordance with section 9 of this Act in such State in the preceding fiscal year bears to the total number of such free or reduced-price lunches served in all such States in the preceding fiscal year: Provided, That for the fiscal year ending June 30, 1963, $5,000 shall be apportioned to American Samoa, which amount shall be first deducted from the total amount available for apportionment under this subsection. If any such State cannot utilize for the purposes of this section all of the funds apportioned to it, the Secretary shall make further apportionment on the same basis as the initial apportionment to any such States which justify the need for additional funds for such purposes. (c) Of the remaining sums appropriated pursuant to this section for any fiscal year, not less than 50 per centum shall be apportioned among States, other than Puerto Rico, the Virgin Islands, Guam, and American Samoa, on the basis of the following factors for each State: (1) the number of free or reduced-price lunches served in accordance with section 9 of this Act in the preceding fiscal year, and (2) the assistance need rate. These factors shall be applied in the following manner: First, determine an index for each State by multiplying factors (1) and (2); second, divide this index by the sum of the indices for all such States; and, third, apply the figure thus obtained to the total funds to be apportioned. Any funds so initially apportioned which cannot be used for the purpose of this section by the State in which apportioned, together with the remainder of the funds available under this subsection, shall be further apportioned by the Secretary on the same basis as the initial apportionment to such States which justify on the basis of operating experience the need for additional funds to meet the need of students in such States for free or reduced-price lunches in schools deemed eligible by their State educational agencies for special assistance in accordance with the factors set forth in subsection (e) of this section. (d) Payment of the funds apportioned to any State under this section shall be made as provided in the last sentence of section 7 of the Act. (e) Funds paid to any State during any fiscal year pursuant to this section shall be disbursed to selected schools in such State to assist such schools in the purchase of agricultural commodities and other foods. The selection of schools and the amounts of funds that each shall from time to time receive (within a maximum per lunch amount established by the Secretary for all the States shall be determined by the State educational agency on the basis of the following factors: (1) The economic condition of the area from which such schools draw attendance; (2) the needs of pupils in such schools for free or reduced-price lunches; (3) the percentages of free and reduced-price lunches being served in such schools to their pupils; (4) the prevailing price of lunches in such schools as compared with the average prevailing price of lunches served in the State under this Act; and (5) the need of such schools for additional assistance as reflected by the financial posttion of the school lunch programs in such schools. (f) If in any State the State educational agency is not permitted by law to disburse funds paid to it under this Act to nonprofit private schools in the State, the Secretary shall withhold from the funds apportioned to such State under subsections (b) or (c) of this section an amount which bears the same ratio to such funds as the number of free and reduced-price lunches served in accordance with section 9 of this Act in the preceding fiscal year by all nonprofit private schools participating in the program under this Act in such State bears to the number of such free and reducedprice lunches served during such year by all schools participating in the program under this Act in such State. The Secretary shall disburse the funds so withheld directly to the nonprofit private schools within such State for the same purposes and subject to the same conditions as are applicable to a State educational agency disbursing funds under this section. (g) In carrying out this section, the terms and conditions governing the operation of the school lunch program set forth in other sections of this Act, including those applicable to funds apportioned or paid pursuant to sections 4 or 5 but excluding the provisions of section 7 relating to matching, shall be applicable to the extent they are not inconsistent with the express requirements of this section. And the Senate agree to the same. BOURKE B. HICKENLOOPER, JOHN SHERMAN COOPER, Managers on the Part of the House. |