HARRY HUGHES, Governor

2571

(VI) THE "FLOOR AMOUNT" MEANS THAT AMOUNT
DETERMINED BY SUBTRACTING FROM THE ELIGIBLE NET EARNINGS THE
INELIGIBLE NET EARNINGS AND THEN MULTIPLYING THE REMAINDER
BY A FRACTION WHICH CANNOT BE GREATER THAN ONE AND IS
DETERMINED AS FOLLOWS:

1. THE NUMERATOR IS THE REMAINDER OF
THE FOLLOWING:

A. THE ALLOWABLE PERCENTAGE OF THE
AVERAGE AGGREGATE AMOUNT OF THE TAXPAYER'S LOANS TO FOREIGN
PERSONS AND DEPOSITS WITH FOREIGN PERSONS WHICH ARE BANKS OR
FOREIGN BRANCHES OF BANKS (INCLUDING FOREIGN SUBSIDIARIES OR
FOREIGN BRANCHES OF THE TAXPAYER) WHICH ARE RECORDED IN THE
INTERNATIONAL BANKING INSTITUTION'S FINANCIAL ACCOUNT FOR
THE TAXABLE YEARS 1975, 1976, 1977, AND 1980: MINUS

B. THE AVERAGE AGGREGATE AMOUNT OF
THESE LOANS AND DEPOSITS (BUT NOT INCLUDING THE LOANS AND
DEPOSITS OF AN INTERNATIONAL BANKING FACILITY) FOR THE
INTERNATIONAL BANKING FACILITY'S TAXABLE YEAR. HOWEVER, THE
AMOUNT IN THIS CLAUSE MAY NOT EXCEED THE AMOUNT IN CLAUSE

2. THE ALLOWABLE PERCENTAGE IS 100
PERCENT FOR THE FIRST TAXABLE YEAR IN WHICH THE TAXPAYER
ESTABLISHES AN INTERNATIONAL BANKING FACILITY AND FOR THE
NEXT SUCCEEDING 4 TAXABLE YEARS; 80 PERCENT FOR THE FIFTH;
60 PERCENT FOR THE SIXTH; 40 PERCENT FOR THE SEVENTH; 20
PERCENT FOR THE EIGHTH YEAR; AND ZERO FOR THE NINTH AND
SUCCEEDING YEARS.

3. THE DENOMINATOR IS THE AVERAGE
AGGREGATE AMOUNT OF THE LOANS TO ANY FOREIGN PERSON AND
DEPOSITS WITH ANY FOREIGN PERSONA THAT IS A BANK OR FOREIGN
BRANCH OF A BANK (INCLUDING ANY FOREIGN SUBSIDIARY OR
FOREIGN BRANCH OF THE TAXPAYER) THAT WERE RECORDED IN THE
FINANCIAL ACCOUNTS OF THE INTERNATIONAL BANKING FACILITY FOR
THE TAXABLE YEAR.

(2) (VI) TO THE EXTENT NOT DEDUCTIBLE IN

DETERMINING    FEDERAL TAXABLE INCOME, THE ADJUSTED ELIGIBLE

NET EARNINGS  OF AN INTERNATIONAL BANKING FACILITY SHALL BE

ALLOWED AS    A DEDUCTION FROM NET EARNINGS. IF THE ADJUSTED

ELIGIBLE NET  EARNINGS OF AN INTERNATIONAL BANKING FACILITY

IS A LOSS,     THE AMOUNT OF THE LOSS SHALL BE ADDED TO NET
EARNINGS.

(3) (VII) THE ADJUSTED ELIGIBLE NET EARNINGS IS
DETERMINED BY SUBTRACTING FROM ELIGIBLE NET EARNINGS THE
INELIGIBLE FUNDING AMOUNT AND THEN SUBTRACTING THE FLOOR
AMOUNT FROM THE REMAINDER.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1981.