972
Exemption.
ti<^°inFedemi'^^" Regis'ter.^ ^^^
Ante, p. 883.
PUBLIC LAW 93-406-SEPT. 2, 1974
[88 STAT.
orders of disqualified persons or transaxjtions, from all or part of the restrictions imposed by paragraph (1) of this subsection. Action under this subparagraph may be taken only after consultation and coordination with the Secretary of Labor. The Secretary or his delegate may not grant an exemption under this paragraph unless he finds that such exemption is— " (A) administratively feasible, " (B) in the interests of the plan and of its participants and beneficiaries, and " (C) protective of the rights of participants and beneficiaries of the plan. Before granting an exemption under this paragraph, the Secretary or his delegate shall require adequate notice to be given to interested persons and shall publish notice in the Federal Register of the pendency of such exemption and shall afford interested persons an opportunity to present views. No exemption may be granted under this paragraph with respect to a transaction described in subparagraph (E) or (F) of paragraph (1) unless the Secretary or his delegate affords an opportunity for a hearing and makes a determination on the record with respect to the findings required under subparagraphs (A), (B), and (C) of this paragraph, except that in lieu of such hearing the Secretary or his delegate may accept any record made b j the Secretary of Labor with respect to an application for exemption under section 408(a) of title I of the Employee Retirement Income Security Act of 1974. "(3)
SPECIAL RULE FOR INDIVIDUAL RETIREMENT ACCOUNTS.—An
individual for whose benefit an individual retirement account is established and his beneficiaries shall be exempt for the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if, with respect to such transaction, the account ceases to be an individual retirement account by reason of the application of section 408(e)(2)(A) or if section 408(e)(4) applies to such account. " (d) EXEMPTIONS.—The prohibitions provided in subsection (c) shall not apply to— " (1) any loan made by the plan to a disqualified person who is a participant or beneficiary of the plan if such loan— " (A) is available to all such participants or beneficiaries on a reasonably equivalent basis, " (B) is not made available to highly compensated employees, officers, or shareholders in an amount greater than the amount made available to other employees, " (C) is made in accordance with specific provisions regarding such loans set forth in the plan, " (D) bears a reasonable rate of interest, and " (E) is adequately secured; "(2) any contract, or reasonable arrangement, made with a disqualified person for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor; "(3) any loan to an employee stock ownership plan (as defined in subsection (e)(7)),if— " (A) such loan is primarily for the benefit of participants and beneficiaries of the plan, and " (B) such loan is at a reasonable rate of interest, and any collateral which is given to a disqualified person by the plan consists only of qualifying employer securities (as defined in subsection (e)(8));
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