118 STAT. 1467 PUBLIC LAW 108–357—OCT. 22, 2004 (b) EXTENSION OF REPLACEMENT PERIOD OF INVOLUNTARILY CONVERTED LIVESTOCK.—Subsection (e) of section 1033 (relating to involuntary conversions) is amended— (1) by striking ‘‘CONDITIONS.—For purposes’’ and inserting ‘‘CONDITIONS.— ‘‘(1) IN GENERAL.—For purposes’’, and (2) by adding at the end the following new paragraph: ‘‘(2) EXTENSION OF REPLACEMENT PERIOD.— ‘‘(A) IN GENERAL.—In the case of drought, flood, or other weather related conditions described in paragraph (1) which result in the area being designated as eligible for assistance by the Federal Government, subsection (a)(2)(B) shall be applied with respect to any converted property by substituting ‘4 years’ for ‘2 years’. ‘‘(B) FURTHER EXTENSION BY SECRETARY.—The Sec retary may extend on a regional basis the period for replacement under this section (after the application of subparagraph (A)) for such additional time as the Secretary determines appropriate if the weather related conditions which resulted in such application continue for more than 3 years.’’. (c) INCOME INCLUSION RULES.—Section 451(e) (relating to spe cial rule for proceeds from livestock sold on account of drought, flood, or other weather related conditions) is amended by adding at the end the following new paragraph: ‘‘(3) SPECIAL ELECTION RULES.—If section 1033(e)(2) applies to a sale or exchange of livestock described in paragraph (1), the election under paragraph (1) shall be deemed valid if made during the replacement period described in such section.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to any taxable year with respect to which the due date (without regard to extensions) for the return is after December 31, 2002. SEC. 312. PAYMENT OF DIVIDENDS ON STOCK OF COOPERATIVES WITH OUT REDUCING PATRONAGE DIVIDENDS. (a) IN GENERAL.—Subsection (a) of section 1388 (relating to patronage dividend defined) is amended by adding at the end the following: ‘‘For purposes of paragraph (3), net earnings shall not be reduced by amounts paid during the year as dividends on capital stock or other proprietary capital interests of the organization to the extent that the articles of incorporation or bylaws of such organization or other contract with patrons provide that such divi dends are in addition to amounts otherwise payable to patrons which are derived from business done with or for patrons during the taxable year.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to distributions in taxable years beginning after the date of the enactment of this Act. SEC. 313. APPORTIONMENT OF SMALL ETHANOL PRODUCER CREDIT. (a) ALLOCATION OF ALCOHOL FUELS CREDIT TO PATRONS OF A COOPERATIVE.—Section 40(g) (relating to definitions and special rules for eligible small ethanol producer credit) is amended by adding at the end the following new paragraph: ‘‘(6) ALLOCATION OF SMALL ETHANOL PRODUCER CREDIT TO PATRONS OF COOPERATIVE.— ‘‘(A) ELECTION TO ALLOCATE.— 26 USC 1388 note. 26 USC 451 note.
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