PUBLIC LAW 107-16-JUNE 7, 2001 115 STAT. 135 "(1) DEFINITIONS.— Except as provided in paragraph (2), terms used in this section have the same respective meanings as when used in sections 409 and 4978. "(2) SPECIAL RULES RELATING TO TAX IMPOSED BY REASON OF PARAGRAPH (3) OR (4) OF SUBSECTION (a).— "(A) PROHIBITED ALLOCATIONS. —The amount involved with respect to any tax imposed by reason of subsection (a)(3) is the amount allocated to the account of any person in violation of section 409(p)(l). "(B) SYNTHETIC EQUITY. —The amount involved with respect to any tax imposed by reason of subsection (a)(4) is the value of the shares on which the synthetic equity is based. "(C) SPECIAL RULE DURING FIRST NONALLOCATION YEAR. —For purposes of subparagraph (A), the amount involved for the first nonallocation year of any employee stock ownership plan shall be determined by taking into account the total value of all the deemed-owned shares of all disqualified persons with respect to such plan. "(D) STATUTE OF LIMITATIONS.— The statutory period for the assessment of any tax imposed by this section by reason of paragraph (3) or (4) of subsection (a) shall not expire before the date which is 3 years from the later of— "(i) the allocation or ownership referred to in such paragraph giving rise to such tax, or "(ii) the date on which the Secretary is notified of such allocation or ownership.". (d) EFFECTIVE DATES.— Applicability. (1) IN GENERAL.— The amendments made by this section 26 USC 409 note, shall apply to plan years beginning after December 31, 2004. (2) EXCEPTION FOR CERTAIN PLANS.—In the case of any— (A) employee stock ownership plan established after March 14, 2001, or (B) employee stock ownership plan established on or ... before such date if employer securities held by the plan consist of stock in a corporation with respect to which an election under section 1362(a) of the Internal Revenue Code of 1986 is not in effect on such date, the amendments made by this section shall apply to plan years ending after March 14, 2001. SEC. 657. AUTOMATIC ROLLOVERS OF CERTAIN MANDATORY DIS- TRIBUTIONS. (a) DIRECT TRANSFERS OF MANDATORY DISTRIBUTIONS. — (1) IN GENERAL. — Section 401(a)(31) (relating to optional 26 USC 401. direct transfer of eligible rollover distributions), as amended by section 643, is amended by redesignating subparagraphs (B), (C), and (D) as subparagraphs (C), (D), and (E), respectively, and by inserting after subparagraph (A) the following new subparagraph: "(B) CERTAIN MANDATORY DISTRIBUTIONS. — - "(i) IN GENERAL.—In case of a trust which is part of an eligible plan, such trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that if—
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