§ 1341. Termination of single-employer plans

Footnotes

1. 1 See References in Text note below.
2. 2 So in original. Probably should be “benefit liabilities”.
3. 3 So in original. The word “a” probably should appear.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1974

   Employee Retirement Income Security Act of 1974

   Pub. L. 93–406 title IV § 4041 · 88 Stat. 829

   Enacted · 29 U.S.C. § 1341

   Pub. L. 93–406, title IV, § 4041, Sept. 2, 1974, 88 Stat. 1020

   Source evidence

   Code source credit
   Pub. L. 93–406, title IV, § 4041, Sept. 2, 1974, 88 Stat. 1020

   Enacted provision · exact public law section
   Sec. 4041. termination by plan administrator (a) Before the effective date of the termination of a plan, 29 USC 1341. the plan administrator shall file a notice with the corporation that the plan is to be terminated on a proposed date (which may not be earlier than 10 days after the filing of the notice), and for a period of 90 days after the proposed termination date the plan administrator shall pay no amount pursuant to the termination procedure of the plan unless, before the expiration of such period, he receives a notice of sufficiency under subsection (b). Upon receiving such a notice, the plan administrator may proceed with the termination of the plan in a manner consistent with this subtitle. (b) If the corporation determines that, after application of section 4044, the assets held under the plan are sufficient to discharge when due all obligations of the plan with respect to basic benefits, it shall notify the plan administrator of such determination as soon as practicable. (c) If, within such 90-day period, the corporation finds that it is unable to determine that, if the assets of the plan are allocated in accordance with the provisions of section 4044, the assets held under the plan are sufficient to discharge when due all obligations of the plan with respect to basic benefits, it shall notify the plan administrator within such 90-day period of that finding. When the corporation issues a notice under this subsection, it shall commence proceedings in accordance with the provisions of section 4042. Upon receiving a notice under this subsection, the plan administrator shall refrain from taking any action under the proposed termination. (d) The corporation and the plan administrator may agree to extend the 90-day period provided by this section by a written agreement signed by the corporation and the plan administrator before the expiration of the 90-day period, or the corporation may apply to an appropriate court (as defined in section 4042(g)) for an order extending the 90-day period provided by this section. The 90-day period shall be extended as provided in the agreement or in any court order obtained by the corporation. The 90-day period may be further extended by subsequent written agreements signed by the corporation and the plan administrator made before the expiration of a previously agreed upon extension of the 90-day period, or by subsequent order of the court. Any extension may be made upon such terms and conditions (including the payment of benefits) as are agreed upon by the corporation and the plan administrator or as specified in the court order. (e) If, after the plan administrator has begun to terminate the plan as authorized by this section, the corporation or the plan administrator finds that the plan is unable, or will be unable, to pay basic benefits when due, the plan administrator shall notify the corporation of such finding as soon as practicable thereafter. If the corporation makes such a finding or concurs with the finding of the plan administrator, it shall institute appropriate proceedings under section 4042. The plan administrator terminating a plan shall furnish such reports to the corporation as it may require for purposes of its duties under this section. (f) For purposes of subsection (a), a plan with respect to which basic benefits are guaranteed shall be treated as terminated upon the adoption of an amendment to such plan, if, after giving effect to such amendment, the plan is a plan described in section 4021(b)(1). (g) Notwithstanding any other provision of this title, a plan administrator or the corporation may petition the appropriate court for the appointment of a trustee in accordance with the provisions of section 4042 if the interests of the participants and beneficiaries would be better served by the appointment of the trustee.

2. 1980

   Multiemployer Pension Plan Amendments Act of 1980

   Pub. L. 96–364 § 403(d)(2) · 94 Stat. 1208

   Inserted · 29 U.S.C. § 1341(a)

   Pub. L. 96–364, § 403(d)(2), inserted “single-employer” after “termination of a”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 96–364, § 403(d)(2), inserted “single-employer” after “termination of a”.

   Enacted provision · exact public law section
   (2) in subsection (a), by inserting “single-employer” after “termination of a”; and

3. 1980

   Multiemployer Pension Plan Amendments Act of 1980

   Pub. L. 96–364 § 403(d)(3) · 94 Stat. 1208

   Struck · 29 U.S.C. § 1341(g)

   Pub. L. 96–364, § 403(d)(3), struck out subsec. (g) which related to petition to the appropriate court for appointment of a trustee

   Source evidence

   Code amendment note
   Subsec. (g). Pub. L. 96–364, § 403(d)(3), struck out subsec. (g) which related to petition to the appropriate court for appointment of a trustee.

   Enacted provision · exact public law section
   (3) by striking out subsection (g).

4. 1986

   Single-Employer Pension Plan Amendments Act of 1986

   Pub. L. 99–272 § 11007(a) · 100 Stat. 82

   1. Added · 29 U.S.C. § 1341(a)

      Pub. L. 99–272, § 11007(a), added subsec. (a) relating to general rules governing single-employer plan terminations

   2. Struck · 29 U.S.C. § 1341(a)

      Pub. L. 99–272, § 11007(a), struck out former subsec. (a) relating to filing of notice that the plan is to be terminated

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 99–272, § 11007(a), added subsec. (a) relating to general rules governing single-employer plan terminations and struck out former subsec. (a) relating to filing of notice that the plan is to be terminated.

   Enacted provision · exact public law section
   (a) In General.— Section 4041 (29 U.S.C. 1341) is amended by striking out subsections (a) through (c) and inserting in lieu thereof the following: “Sec. 4041. (a) General Rules Governing Single-Employer Plan Terminations.— “(1) Exclusive means of plan termination.— Except in the case of a termination for which proceedings are otherwise instituted Post, p. 253. by the corporation as provided in section 4042, a single-employer plan may be terminated only in a standard termination under subsection (b) or a distress termination under subsection (c). “(2) 60-day notice of intent to terminate.— Not less than 60 days before the proposed termination date of a standard termination under subsection (b) or a distress termination under subsection (c), the plan administrator shall provide to each affected party (other than the corporation in the case of a standard termination) a written notice of intent to terminate stating that such termination is intended and the proposed termination date. The written notice shall include any related additional information required in regulations of the corporation. “(3) Adherence to collective bargaining agreements.— The corporation shall not proceed with a termination of a plan under this section if the termination would violate the terms and conditions of an existing collective bargaining agreement. Nothing in the preceding sentence shall be construed as limiting the authority of the corporation to institute proceedings to involuntarily terminate a plan under section 4042.”.

5. 1986

   Single-Employer Pension Plan Amendments Act of 1986

   Pub. L. 99–272 title XI · 100 Stat. 82

   1. Added · 29 U.S.C. § 1341(b)

      Pub. L. 99–272, §§ 11007(a), 11008(a), added subsec. (b) relating to standard termination of single-employer plans

   2. Struck · 29 U.S.C. § 1341(b)

      Pub. L. 99–272, §§ 11007(a), 11008(a), struck out former subsec. (b) relating to notice of sufficiency of plan assets

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 99–272, §§ 11007(a), 11008(a), added subsec. (b) relating to standard termination of single-employer plans and struck out former subsec. (b) relating to notice of sufficiency of plan assets.

   Enacted provision · exact public law
   TITLE XI— SINGLE-EMPLOYER PLAN TERMINATION INSURANCE SYSTEM AMENDMENTS SEC. 11001. SHORT TITLE AND TABLE OF CONTENTS. This title may be cited as “Single-Employer Pension Plan Amendments Act of 1986”. TABLE OF CONTENTS Sec. 11001. Short title and table of contents. Sec. 11002. Findings and declaration of policy. Sec. 11003. Amendment of the Employee Retirement Income Security Act of 1974. Sec. 11004. Definitions. Sec. 11005. Single-employer plan termination insurance premiums. Sec. 11006. Notice of significant reduction in benefit accruals. Sec. 11007. General requirements relating to termination of single-employer plans by plan administrators. Sec. 11008. Standard termination of single-employer plans. Sec. 11009. Distress termination of single-employer plans. Sec. 11010. Termination proceeding; duties of the corporation. Sec. 11011. Amendments to liability provisions; liabilities relating to benefit commitments in excess of benefits guaranteed by the corporation. Sec. 11012. Distribution to participants and beneficiaries of liability payments to section 4049 trust. Sec. 11013. Treatment of transactions to evade liability; effect of corporate reorganization. Sec. 11014. Enforcement authority relating to terminations of single-employer plans. Sec. 11015. Provisions relating to waivers of minimum funding standard and extensions of amortization period. Sec. 11016. Conforming, clarifying, technical, and miscellaneous amendments. Sec. 11017. Studies. Sec. 11018. Limitation on regulations. Sec. 11019. Effective date of title; temporary procedures. SEC. 11002. FINDINGS AND DECLARATION OF POLICY. (a) Findings.— The Congress finds that— (1) single-employer defined benefit pension plans have a substantial impact on interstate commerce and are affected with a national interest; (2) the continued well-being and retirement income security of millions of workers, retirees, and their dependents are directly affected by such plans; (3) the existence of a sound termination insurance system is fundamental to the retirement income security of participants and beneficiaries of such plans; and (4) the current termination insurance system in some instances encourages employers to terminate pension plans, evade their obligations to pay benefits, and shift unfunded pension liabilities onto the termination insurance system and the other premium-payers. (b) Additional Findings.— The Congress further finds that modification of the current termination insurance system and an increase in the insurance premium for single-employer defined benefit pension plans— (1) is desirable to increase the likelihood that full benefits will be paid to participants and beneficiaries of such plans; (2) is desirable to provide for the transfer of liabilities to the termination insurance system only in cases of severe hardship; (3) is necessary to maintain the premium costs of such system at a reasonable level; and (4) is necessary to finance properly current funding deficiencies and future obligations of the single-employer pension plan termination insurance system. (c) Declaration of Policy.— It is hereby declared to be the policy of this title— (1) to foster and facilitate interstate commerce; (2) to encourage the maintenance and growth of single-employer defined benefit pension plans; (3) to increase the likelihood that participants and beneficiaries under single-employer defined benefit pension plans will receive their full benefits; (4) to provide for the transfer of unfunded pension liabilities onto the single-employer pension plan termination insurance system only in cases of severe hardship; (5) to maintain the premium costs of such system at a reasonable level; and (6) to assure the prudent financing of current funding deficiencies and future obligations of the single-employer pension plan termination insurance system by increasing termination insurance premiums. SEC. 11003. AMENDMENT OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1971. Whenever in this title an amendment or repeal is expressed in terms of an amendment to or repeal of a section or other provision, the reference is to a section or other provision of the Employee Retirement Income Security Act of 1974, unless otherwise specified. SEC. 11004. DEFINITIONS. (a) In General.— Section 4001(a) (29 U.S.C. 1301(a)) is amended— (1) by striking out paragraph (2) and inserting in lieu thereof the following new paragraph: “(2) ‘substantial employer’, for any plan year of a single-employer plan, means one or more persons— “(A) who are contributing sponsors of the plan in such plan year, “(B) who, at any time during such plan year, are members of the same controlled group, and “(C) whose required contributions to the plan for each plan year constituting one of— “(i) the two immediately preceding plan years, or “(ii) the first two of the three immediately preceding plan years, total an amount greater than or equal to 10 percent of all contributions required to be paid to or under the plan for such plan year;”; (2) in paragraph (11), by striking out “and”; (3) in paragraph (12), by striking out “corporation.” and inserting in lieu thereof “corporation;”; and (4) by adding after paragraph (12) the following new paragraphs: “(13) ‘contributing sponsor’, of a single-employer plan, means a person— “(A) who is responsible, in connection with such plan, for meeting the funding requirements under section 302 of this Act or section 412 of the Internal Revenue Code of 1954, or 29 USC 1112. 26 USC 412. “(B) who is a member of the controlled group of a person described in subparagraph (A), has been responsible for meeting such funding requirements, and has employed a significant number (as may be defined in regulations of the corporation) of participants under such plan while such person was so responsible; “(14) in the case of a single-employer plan— “(A) ‘controlled group’ means, in connection with any person, a group consisting of such person and all other persons under common control with such person; and “(B) the determination of whether two or more persons are under ‘common control’ shall be made under regulations of the corporation which are consistent and coextensive with regulations prescribed for similar purposes by the Secretary of the Treasury under subsections (b) and (c) of section 414 of the Internal Revenue Code of 1954; 26 USC 414. “(15) ‘single-employer plan’ means any defined benefit plan (as defined in section 3(35)) which is not a multiemployer plan; 29 USC 1002. “(16) ‘benefit commitments’, to a participant or beneficiary as of any date under a single-employer plan, means all benefits provided by the plan with respect to the participant or beneficiary which— “(A) are guaranteed under section 4022, 29 USC 1322. “(B) would be guaranteed under section 4022, but for the operation of subsection 4022(b), or “(C) constitute— “(i) early retirement supplements or subsidies, or “(ii) plant closing benefits, irrespective of whether any such supplements, subsidies, or benefits are benefits guaranteed under section 4022, if the participant or beneficiary has satisfied, as of such date, all of the conditions required of him or her under the provisions of the plan to establish entitlement to the benefits, except for the submission of a formal application, retirement, completion of a required waiting period subsequent to application for benefits, or designation of a beneficiary; “(17) ‘amount of unfunded guaranteed benefits’, of a participant or beneficiary as of any date under a single-employer plan, means an amount equal to the excess of— “(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefits of the 29 USC 1344. participant or beneficiary under the plan which are guaranteed under section 4022, over “(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefits under section 4044; 29 USC 1344. “(18) ‘amount of unfunded benefit commitments’, of a participant or beneficiary as of any date under a single-employer plan, means an amount equal to the excess of— “(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefit commitments to the participant or beneficiary under the plan, over “(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefit 29 USC 1344. commitments under section 4044; “(19) ‘outstanding amount of benefit commitments’, of a participant or beneficiary under a terminated single-employer plan, means the excess of— “(A) the actuarial present value (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefit commitments to such participant or beneficiary under the plan, over “(B) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefits of such participant or beneficiary which are guaranteed under section 29 USC 1322. 4022 or to which assets of the plan are required to be allocated under section 4044; “(20) ‘person’ has the meaning set forth in section 3(9); “(21) ‘affected party’ means, with respect to a plan— “(A) each participant in the plan, “(B) each beneficiary under the plan who is a beneficiary of a deceased participant or who is an alternate payee 29 USC 1056. (within the meaning of section 206(d)(3)(K)) under an applicable qualified domestic relations order (within the meaning of section 206(d)(3)(B)(i)), “(C) each employee organization representing participants in the plan, and “(D) the corporation, except that, in connection with any notice required to be provided to the affected party, if an affected party has designated, in writing, a person to receive such notice on behalf of the affected party, any reference to the affected party shall be construed to refer to such person.”. (b) Technical Correction of Error in Multiemployer Pension Plan Amendments Act of 1980.— Section 4001 is further amended by striking out the amendments made by section 402(a)(1)(F) of the Multiemployer Pension Plan Amendments Act of 1980 (94 Stat. 29 USC 1301. 1297) (adding new paragraphs after a subsection (c)(1)), and, in lieu thereof, in subsection (b), by inserting “(1)” after “(b)” and by adding at the end of such subsection the following new paragraph: “(2) For purposes of subtitle E— “(A) except as otherwise provided in subtitle E, contributions or other payments shall be considered made under a plan for a plan year if they are made within the period prescribed under 26 USC 412. section 412(c)(10) of the Internal Revenue Code of 1954 (determined in the case of a terminated plan, as if the plan had continued beyond the termination date), and “(B) the term ‘Secretary of the Treasury’ means the Secretary of the Treasury or such Secretary’s delegate.”. SEC. 11005. SINGLE-EMPLOYER PLAN TERMINATION INSURANCE PREMIUMS. (a) Premium Increase.— (1) General rule.— Section 4006(a)(3)(A)(i) (29 U.S.C. 1306(a)(3)(A)(i)) is amended by striking out “for plan years beginning after December 31, 1977, an amount equal to $2.60” and inserting in lieu thereof “for plan years beginning after December 31, 1985, an amount equal to $8.50”. (2) Conforming amendment with respect to plan years after 1977.— Section 4006(c)(1) (29 U.S.C. 1306(c)(1)) is amended by striking out subparagraph (A) and inserting in lieu thereof the following new subparagraph: “(A) in the case of each plan which was not a multiemployer plan in a plan year— “(i) with respect to each plan year beginning before January 1, 1978, an amount equal to $1 for each individual who was a participant in such plan during the plan year, and “(ii) with respect to each plan year beginning after December 31, 1977, an amount equal to $2.60 for each individual who was a participant in such plan during the plan year, and”. (b) Incorporation of Certain Former Provisions in Lieu of Cross Reference Thereto.— Section 4006(a) (29 U.S.C. 1306(a)) is amended— (1) in paragraph (1), by striking out the last sentence; and (2) by adding at the end thereof the following new paragraph: “(6) (A) In carrying out its authority under paragraph (1) to establish premium rates and bases for basic benefits guaranteed under section 4022 with respect to single-employer plans, the corporation 29 USC 1322. shall establish such rates and bases in coverage schedules in accordance with the provisions of this paragraph. “(B) The corporation may establish annual premiums for single-employer plans composed of the sum of— “(i) a charge based on a rate applicable to the excess, if any, of the present value of the basic benefits of the plan which are guaranteed over the value of the assets of the plan, not in excess of 0.1 percent, and “(ii) an additional charge based on a rate applicable to the present value of the basic benefits of the plan which are guaranteed. The rate for the additional charge referred to in clause (ii) shall be set by the corporation for every year at a level which the corporation estimates will yield total revenue approximately equal to the total revenue to be derived by the corporation from the charges referred to in clause (i) of this subparagraph. “(C) The corporation may establish annual premiums for single-employer plans based on— “(i) the number of participants in a plan, but such premium rates shall not exceed the rates described in paragraph (3), “(ii) unfunded basic benefits guaranteed under this title, but such premium rates shall not exceed the limitations applicable to charges referred to in subparagraph (B)(i), or “(iii) total guaranteed basic benefits, but such premium rates shall not exceed the rates for additional charges referred to in subparagraph (B)(ii). If the corporation uses two or more of the rate bases described in this subparagraph, the premium rates shall be designed to produce approximately equal amounts of aggregate premium revenue from each of the rate bases used. “(D) For purposes of this paragraph, the corporation shall by regulation define the terms ‘value of assets’ and ‘present value of the benefits of the plan which are guaranteed’ in a manner consist-ent with the purposes of this title and the provisions of this section.”. (c) Approval by Joint Resolution of Recommendations of the Pension Benefit Guaranty Corporation.— Title IV is amended as follows: (1) The last sentence of subsection (a)(2) of section 4006 (29 U.S.C. 1306(a)(2)) is amended by striking out “the Congress approves such revised schedule by a concurrent resolution” and inserting in lieu thereof “a joint resolution approving such revised schedule is enacted”. (2) Subsection (a)(4) of section 4006 (29 U.S.C. 1306(a)(4)) is amended by striking out “approval by the Congress” and inserting in lieu thereof “the enactment of a joint resolution”. (3) Subsection (b)(3) of section 4006 (29 U.S.C. 1306(b)(3)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”, by striking out “That the Congress favors the” and inserting in lieu thereof “The”, and by inserting “is hereby approved” before the period preceding the quotation marks. (4) Subsection (f)(2)(B) of section 4022A (29 U.S.C. 1322a(f)(2)(B)) is amended by striking out “Congress by concurrent resolution” and inserting in lieu thereof “the enactment of a joint resolution”. (5) Subsection (f)(2)(C) of section 4022A (29 U.S.C. 1322a(f)(2)(C)) is amended by striking out “approved” and inserting in lieu thereof “so enacted”. (6) Subsection (f)(3)(B) of section 4022A (29 U.S.C. 1322a(f)(3)(A)) is amended by striking out “Congress by a concurrent resolution” and inserting in lieu thereof “enactment of a joint resolution”. (7) Subsection (f)(4)(A) of section 4022A (29 U.S.C. 1322a(f)(4)(A)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”. (8) Subsection (f)(4)(B) of section 4022A (29 U.S.C. 1322a(f)(4)(B)) is amended by striking out “concurrent” each place it appears and inserting in lieu thereof “joint”, by striking out “That the Congress favors the” and inserting in lieu thereof “The”, and by inserting “is hereby approved” immediately before the period preceding the quotation marks. (9) Subsection (f)(4)(C) of section 4022A (29 U.S.C. 1322a(f)(4)(C)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”. (10) Subsection (g)(4)(A)(ii) of section 4022A (29 U.S.C. 1322a(g)(4)(A)(ii)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”, and by striking out “adopted” and inserting in lieu thereof “enacted”. (11) Subsection (g)(4)(B) of section 4022A (29 U.S.C. 1322a(g)(4)(B)) is amended by striking out “concurrent” each place it appears and inserting in lieu thereof “joint”, by striking out “That the Congress disapproves the” and inserting in lieu thereof “The”, and by inserting “is hereby disapproved” immediately before the period preceding the quotation marks. (12) Subsection (g)(4)(D) of section 4022A (29 U.S.C. 1322a(g)(4)(D)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”. (d) Effective Dates.— (1) General rule.— Except as provided in paragraph (2), the amendments made by this section shall be effective for plan years commencing after December 31, 1985. (2) Special rule.— The amendments made by subsection (bl shall be effective as of the date of the enactment of the Multi-employer Pension Plan Amendments Act of 1980. (e) Transitional Rule.— 29 USC 1001 note. 42 USC 1306 note. (1) Notice of premium increase.— Not later than 30 days after the date of the enactment of this Act, the Pension Benefit Guaranty Corporation shall send a notice to the plan administrator of each single-employer plan affected by the premium increase established by the amendment made by subsection (a)(1). Such notice shall describe such increase and the requirements of this subsection. (2) Due date for unpaid premiums.— With respect to any plan year beginning during the period beginning on January 1, 1986, and ending 30 days after the date of the enactment of this Act, any unpaid amount of such premium increase shall be due and payable no later than the earlier of 60 days after the date of the enactment of this Act or 30 days after the date on which the notice required by paragraph (1) is sent, except that in no event shall the amount of the premium increase established under the amendment made by subsection (a)(1) be due and payable for a plan year earlier than the date on which premiums for the plan would have been due for such plan year had this Act not been enacted. (3) Enforcement.— For purposes of enforcement, the requirements of paragraphs (1) and (2) shall be considered to be requirements of sections 4006 and 4007 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306 and 1307). SEC. 11006. NOTICE OF SIGNIFICANT REDUCTION IN BENEFIT ACCRUALS. (a) In General.— Section 204 (29 U.S.C. 1054) is amended— (1) by redesignating subsection (h) as subsection (i); and (2) by inserting after subsection (g) the following new subsection: “(h) A single-employer plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual, unless, after adoption of the plan amendment and not less than 15 days before the effective date of the plan amendment, the plan administrator provides a written notice, setting forth the plan amendment and its effective date, to— “(1) each participant in the plan, “(2) each beneficiary who is an alternate payee (within the meaning of section 206(d)(3)(K)) under an applicable qualified 29 USC 1056. domestic relations order (within the meaning of section 206(d)(3)(B)(i)), and “(3) each employee organization representing participants in the plan, except that such notice shall instead be provided to a person designated, in writing, to receive such notice on behalf of any person referred to in paragraph (1), (2), or (3).”. (b) Effective Date.— The amendments made by subsection (a) 29 USC 1054 note. shall apply with respect to plan amendments adopted on or after January 1, 1986, except that, in the case of plan amendments adopted on or after January 1, 1986, and on or before the date of the enactment of this Act, the requirements of section 204(h) of the Employee Retirement Income Security Act of 1974 (as added by this section) shall be treated as met if the written notice required under such section 204(h) is provided before 60 days after the date of the enactment of this Act. SEC. 11007. GENERAL REQUIREMENTS RELATING TO TERMINATION OF SINGLE-EMPLOYER PLANS BY PLAN ADMINISTRATORS. (a) In General.— Section 4041 (29 U.S.C. 1341) is amended by striking out subsections (a) through (c) and inserting in lieu thereof the following: “Sec. 4041. (a) General Rules Governing Single-Employer Plan Terminations.— “(1) Exclusive means of plan termination.— Except in the case of a termination for which proceedings are otherwise instituted Post, p. 253. by the corporation as provided in section 4042, a single-employer plan may be terminated only in a standard termination under subsection (b) or a distress termination under subsection (c). “(2) 60-day notice of intent to terminate.— Not less than 60 days before the proposed termination date of a standard termination under subsection (b) or a distress termination under subsection (c), the plan administrator shall provide to each affected party (other than the corporation in the case of a standard termination) a written notice of intent to terminate stating that such termination is intended and the proposed termination date. The written notice shall include any related additional information required in regulations of the corporation. “(3) Adherence to collective bargaining agreements.— The corporation shall not proceed with a termination of a plan under this section if the termination would violate the terms and conditions of an existing collective bargaining agreement. Nothing in the preceding sentence shall be construed as limiting the authority of the corporation to institute proceedings to involuntarily terminate a plan under section 4042.”. (b) Definitions Relating to Sufficiency.— Section 4041(d) (29 U.S.C. 1341(d)) is amended to read as follows: “(d) Sufficiency.— For purposes of this section— “(1) Sufficiency for benefit commitments.— A single-employer plan is sufficient for benefit commitments if there is no amount of unfunded benefit commitments under the plan. “(2) Sufficiency for guaranteed benefits.— A single-employer plan is sufficient for guaranteed benefits if there is no amount of unfunded guaranteed benefits under the plan.”. SEC. 11008. STANDARD TERMINATION OF SINGLE-EMPLOYER PLANS. (a) In General.— Section 4041 (as amended by section 11007 of this Act) is further amended by inserting after subsection (a) the following new subsection: “(b) Standard Termination of Single-Employer Plans.— “(1) General requirements.— A single-employer plan may terminate under a standard termination only if— “(A) the plan administrator provides the 60-day advance notice of intent to terminate to affected parties required under subsection (a)(2), “(B) the requirements of subparagraphs (A) and (B) of paragraph (2) are met, “(C) the corporation does not issue a notice of noncompliance under subparagraph (C) of paragraph (2), and “(D) when the final distribution of assets occurs, the plan is sufficient for benefit commitments (determined as of the termination date). “(2) Termination procedure.— “(A) Notice to the corporation.— As soon as practicable after the date on which the notice of intent to terminate is provided pursuant to subsection (a)(2), the plan administrator shall send a notice to the corporation setting forth— “(i) certification by an enrolled actuary— “(I) of the projected amount of the assets of the plan (as of a proposed date of final distribution of assets), “(II) of the actuarial present value (as of such date) of the benefit commitments (determined as of the proposed termination date) under the plan, and “(III) that the plan is projected to be sufficient (as of such proposed date of final distribution) for such benefit commitments, “(ii) such information as the corporation may prescribe Regulations. in regulations as necessary to enable the corporation to make determinations under subparagraph (C), and “(iii) certification by the plan administrator that the information on which the enrolled actuary based the certification under clause (i) and the information provided to the corporation under clause (ii) are accurate and complete. “(B) Notice to participants and beneficiaries of benefit commitments.— No later than the date on which a notice is sent by the plan administrator under subparagraph (A), the plan administrator shall send a notice to each person who is a participant or beneficiary under the plan— “(i) specifying the amount of such person’s benefit commitments (if any) as of the proposed termination date and the benefit form on the basis of which such amount is determined, and “(ii) including the following information used in determining such benefit commitments: “(I) the length of service, “(II) the age of the participant or beneficiary, “(III) wages, “(IV) the assumptions, including the interest rate, and “(V) such other information as the corporation may require. Such notice shall be written in such manner as is likely to be understood by the participant or beneficiary and as may be prescribed in regulations of the corporation. “(C) Notice from the corporation of noncompliance.— “(i) In general.— Within 60 days after receipt of the notice under subparagraph (A), the corporation shall issue a notice of noncompliance to the plan administrator if— “(I) it has reason to believe that any requirement of subsection (a)(2) or subparagraph (A) or (B) has not been met, or “(II) it otherwise determines, on the basis of information provided by affected parties or otherwise obtained by the corporation, that there is reason to believe that the plan is not sufficient for benefit commitments. “(ii) Extension.— The corporation and the plan administrator may agree to extend the 60-day period referred to in clause (i) by a written agreement signed by the corporation and the plan administrator before the expiration of the 60-day period. The 60-day period shall be extended as provided in the agreement and may be further extended by subsequent written agreements signed by the corporation and the plan administrator made before the expiration of a previously agreed upon extension of the 60-day period. Any extension may be made upon such terms and conditions (including the payment of benefits) as are agreed upon by the corporation and the plan administrator. “(D) Final distribution of assets in absence of notice of noncompliance.— The plan administrator shall commence the final distribution of assets pursuant to the standard termination of the plan as soon as practicable after the expiration of the 60-day (or extended) period referred to in subparagraph (C), but such final distribution may occur only if— “(i) the plan administrator has not received during such period a notice of noncompliance from the corporation under subparagraph (C), and “(ii) when such final distribution occurs, the plan is sufficient for benefit commitments (determined as of the termination date). “(3) Methods of final distribution of assets.— “(A) In general.— In connection with any final distribution of assets pursuant to the standard termination of the plan under this subsection, the plan administrator shall 29 USC 1344. distribute the assets in accordance with section 4044. In distributing such assets, the plan administrator shall— “(i) purchase irrevocable commitments from an insurer to provide the benefit commitments under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 4044, or “(ii) in accordance with the provisions of the plan and any applicable regulations of the corporation, otherwise fully provide the benefit commitments under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 4044. “(B) Certification to the corporation of final distribution of assets.— Within 30 days after the final distribution of assets is completed pursuant to the standard termination of the plan under this subsection, the plan administrator shall send a notice to the corporation certifying that the assets of the plan have been distributed in accordance with the provisions of subparagraph (A) so as to pay the benefit commitments under the plan and all other benefits under the plan to which assets are required to be allocated under section 4044. 29 USC 1344. “(4) Continuing authority.— Nothing in this section shall be construed to preclude the continued exercise by the corporation, after the termination date of a plan terminated in a standard termination under this subsection, of its authority under section 4003 with respect to matters relating to the termination. A 29 USC 1303. certification under paragraph (3)(B) shall not affect the corporation’s obligations under section 4022.”. 29 USC 1322. (b) Conforming Amendment.— Section 4041(f) (29 U.S.C. 1341(f)) is amended to read as follows: “(f) Limitation on the Conversion of a Defined Benefit Plan to a Defined Contribution Plan.— The adoption of an amendment to a plan which causes the plan to become a plan described in section 4021(b)(1) constitutes a termination of the plan. Such an 29 USC 1321. amendment may take effect only after the plan satisfies the requirements for standard termination under subsection (b) or distress termination under subsection (c).”. (c) Authority for 60-Day Extension.— In the case of a standard 29 USC 1341 note. Ante, p. 244. termination of a plan under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this section) with respect to which a notice of intent to terminate is filed before 120 days after the date of the enactment of this Act, the Pension Benefit Guaranty Corporation may, without the consent of the plan administrator, extend the 604ay period under section 4041(b)(2)(C)(i) of such Act (as so amended) for a period not to exceed 60 days. (d) Special Temporary Rule.— (1) Requirements to be met before final distribution of assets.— In the case of the termination of a single-employer plan described in paragraph (2) with respect to which the amount payable to the employer pursuant to section 4044(d) 29 USC 1344. exceeds $1,000,000 (determined as of the proposed date of final distribution of assets), the final distribution of assets pursuant to such termination may not occur unless the Pension Benefit Guaranty Corporation— (A) determines that the assets of the plan are sufficient for benefit commitments (within the meaning of section 4041(d)(1) of the Employee Retirement Income Security Act of 1974 (as amended by section 11007)) under the plan, and (B) issues to the plan administrator a written notice setting forth the determination described in subparagraph (A). (2) Plans to which subsection applies.— A single-employer plan is described in this paragraph if— (A) the plan administrator has filed a notice of intent to terminate with the Pension Benefit Guaranty Corporation, and— (i) the filing was made before January 1, 1986, and the Corporation has not issued a notice of sufficiency for such plan before the date of the enactment of this Act, or (ii) the filing is made on or after January 1, 1986, and before 60 days after the date of the enactment of this Act and the Corporation has not issued a notice of sufficiency for such plan before the date of the enactment of this Act, and (B) of the persons who are (as of the termination date) participants in the plan, the lesser of 10 percent or 200 have filed complaints with the Corporation regarding such termination— (i) in the case of plans described in subparagraph (A)(i), before 15 days after the date of the enactment of this Act, or (ii) in any other case, before the later of 15 days after the date of the enactment of this Act or 45 days after the date of the filing of such notice. (3) Consideration of complaints.— The Corporation shall consider and respond to such complaints not later than 90 days after the date on which the Corporation makes the determination described in paragraph (1)(A). The Corporation may hold informal hearings to expedite consideration of such complaints. Any such hearing shall be exempt from the requirements of 5 USC 500 et seq. chapter 5 of title 5, United States Code. (4) Delay on issuance of notice.— (A) General rule.— Except as provided in subparagraph (B), the Corporation shall not issue any notice described in paragraph (1)(B) until 90 days after the date on which the Corporation makes the determination described in paragraph (1)(A). (B) Exception in cases of substantial business hardship.— Except in the case of an acquisition, takeover, or leveraged buyout, the preceding provisions of this subsection shall not apply if the contributing sponsor demonstrates to the satisfaction of the Corporation that the contributing sponsor is experiencing substantial business hardship. For purposes of this subparagraph, a contributing sponsor shall be considered as experiencing substantial business hardship if the contributing sponsor has been operating, and can demonstrate that the contributing sponsor will continue to operate, at an economic loss. SEC. 11009. DISTRESS TERMINATION OF SINGLE-EMPLOYER PLANS. (a) In General.— Section 4041 (as amended by sections 11007 and 11008 of this Act) is further amended by inserting after subsection (b) the following new subsection: “(c) Distress Termination of Single-Employer Plans.— “(1) In general.— A single-employer plan may terminate under a distress termination only if— “(A) the plan administrator provides the 60-day advance notice of intent to terminate to affected parties required under subsection (a)(2), “(B) the requirements of subparagraph (A) of paragraph (2) are met, and “(C) the corporation determines that the requirements of subparagraph (B) of paragraph (2) are met. “(2) Termination requirements.— “(A) Information submitted to the corporation.— As soon as practicable after the date on which the notice of intent to terminate is provided pursuant to subsection (a)(2), the plan administrator shall provide the corporation, in such form as may be prescribed by the corporation in regulations, the following information: “(i) such information as the corporation may prescribe by regulation as necessary to make determinations under subparagraph (B) and paragraph (3); “(ii) certification by an enrolled actuary of— “(I) the amount (as of the proposed termination date) of the current value of the assets of the plan, “(II) the actuarial present value (as of such date) of the benefit commitments under the plan, “(III) whether the plan is sufficient for benefit commitments as of such date, “(IV) the actuarial present value (as of such date) of benefits under the plan guaranteed under section 4022, and 29 USC 1322. “(V) whether the plan is sufficient for guaranteed benefits as of such date; “(iii) in any case in which the plan is not sufficient for benefit commitments as of such date— “(I) the name and address of each participant and beneficiary under the plan as of such date, and “(II) such other information as shall be prescribed by the corporation by regulation as necessary to enable the corporation (or its designee under section 4049(b)) to be able to make payments Post, p. 258. to participants and beneficiaries as required under section 4049; and “(iv) certification by the plan administrator that the information on which the enrolled actuary based the certifications under clause (ii) and the information provided to the corporation under clauses (i) and (iii) are accurate and complete. “(B) Determination by the corporation of necessary distress criteria.— Upon receipt of the notice of intent to terminate required under subsection (a)(2) and the information required under subparagraph (A), the corporation shall determine whether the requirements of this subparagraph are met as provided in clause (i), (ii), or (iii). The requirements of this subparagraph are met if each person who is (as of the termination date) a contributing sponsor of such plan or a substantial member of such sponsor’s controlled group meets the requirements of any of the following clauses: “(i) Liquidation in bankruptcy or insolvency proceedings.— The requirements of this clause are met by a person if— “(I) such person has filed or has had filed against such person, as of the termination date, a petition seeking liquidation in a case under title 11, United States Code, or under any similar law of a State or political subdivision of a State, and “(II) such case has not, as of the termination date, been dismissed. “(ii) Reorganization in bankruptcy or insolvency proceedings.— The requirements of this clause are met by a person if— “(I) such person has filed, or has had filed against such person, as of the termination date, a petition seeking reorganization in a case under title 11, United States Code, or under any similar law of a State or political subdivision of a State (or a case described in clause (i) filed by or against such person has been converted, as of such date, to such a case in which reorganization is sought), “(II) such case has not, as of the termination date, been dismissed, and “(III) the bankruptcy court (or other appropriate court in a case under such similar law of a State or political subdivision) approves the termination. “(iii) Termination required to enable payment of DEBTS WHILE STAYING IN BUSINESS OR TO AVOID UNREASONABLY BURDENSOME PENSION COSTS CAUSED BY declining workforce.— The requirements of this clause are met by a person if such person demonstrates to the satisfaction of the corporation that— “(I) unless a distress termination occurs, such person will be unable to pay such person’s debts when due and will be unable to continue in business, or “(II) the costs of providing pension coverage have become unreasonably burdensome to such person, solely as a result of a decline of such person’s workforce covered as participants under all single-employer plans of which such person is a contributing sponsor. “(C) Substantial member.— For purposes of subparagraph (B), the term ‘substantial member’ of a controlled group means a person whose assets comprise 5 percent or more of the total assets of the controlled group as a whole. “(D) Notification of determinations by the corporation.— The corporation shall notify the plan administrator as soon as practicable of its determinations made pursuant to subparagraph (B). “(3) Termination procedure.— “(A) Determinations by the corporation relating to PLAN SUFFICIENCY FOR GUARANTEED BENEFITS AND FOR BENEFIT commitments.— If the corporation determines that the requirements for a distress termination set forth in paragraphs (1) and (2) are met, the corporation shall— “(i) determine that the plan is sufficient for guaranteed benefits (as of the termination date) or that the corporation is unable to make such determination on the basis of information made available to the corporation, “(ii) determine that the plan is sufficient for benefit commitments (as of the termination date) or that the corporation is unable to make such determination on the basis of information made available to the corporation, and “(iii) notify the plan administrator of the determinations made pursuant to this subparagraph as soon as practicable. “(B) Implementation of termination.— After the corporation notifies the plan administrator of its determinations under subparagraph (A), the termination of the plan shall be carried out as soon as practicable, as provided in clause (i), (ii), or (iii). “(i) Cases of sufficiency for benefit commitments.— In any case in which the corporation determines that the plan is sufficient for benefit commitments, the plan administrator shall proceed to distribute the plan’s assets, and make certification to the corporation with respect to such distribution, in the manner described in subsection (b)(3), and shall take such other actions as may be appropriate to carry out the termination of the plan. “(ii) Cases of sufficiency for guaranteed benefits without a finding of sufficiency for benefit commitments.— In any case in which the corporation determines that the plan is sufficient for guaranteed benefits, but further determines that it is unable to determine that the plan is sufficient for benefit commitments on the basis of the information made available to it— “(I) the plan administrator shall proceed to distribute the plan’s assets in the manner described in subsection (b)(3), make certification to the corporation that the distribution has occurred, and take such actions as may be appropriate to carry out the termination of the plan, and “(II) the corporation shall establish a separate trust in connection with the plan for purposes of section 4049. Post, p. 258. “(iii) Cases without any finding of sufficiency.— In any case in which the corporation determines that it is unable to determine that the plan is sufficient for guaranteed benefits on the basis of the information made available to it— “(I) the corporation shall commence proceedings Post, p. 253, in accordance with section 4042, and “(II) the corporation shall establish a separate trust in connection with the plan for purposes of section 4049 unless the corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under section 4022. 29 USC 1322. “(C) Finding after authorized commencement of termination that plan is unable to pay benefits.— “(i) Finding with respect to benefit commitments WHICH ARE NOT GUARANTEED BENEFITS.— If, after the plan administrator has begun to terminate the plan as authorized under subparagraph (B)(i), the plan administrator finds that the plan is unable, or will be unable, to pay benefit commitments which are not benefits guaranteed by the corporation under section 4022, the plan administrator shall notify the corporation of such finding as soon as practicable thereafter. If the corporation concurs in the finding of the plan administrator (or the corporation itself makes such a finding) the corporation shall take the actions set forth in subparagraph (B)(ii)(II) relating to the trust established Post, p. 258. for purposes of section 4049. “(ii) Finding with respect to guaranteed benefits.— If, after the plan administrator has begun to terminate the plan as authorized by subparagraph (B) (i) or (ii), the plan administrator finds that the plan is unable, or will be unable, to pay all benefits under the plan which are guaranteed by the corporation under 29 USC 1322. section 4022, the plan administrator shall notify the corporation of such finding as soon as practicable thereafter. If the corporation concurs in the finding of the plan administrator (or the corporation itself makes such a finding), the corporation shall institute appropriate 29 USC 1342. proceedings under section 4042. “(D) Administration of the plan during interim period.— “(i) In general.— The plan administrator shall— “(I) meet the requirements of clause (ii) for the period commencing on the date on which the plan administrator provides a notice of distress termination to the corporation under subsection (a)(2) and ending on the date on which the plan administrator receives notification from the corporation of its determinations under subparagraph (A), and “(II) meet the requirements of clause (ii) commencing on the date on which the plan administrator or the corporation makes a finding under subparagraph (C)(ii). “(ii) Requirements.— The requirements of this clause are met by the plan administrator if the plan administrator— “(I) refrains from distributing assets or taking any other actions to carry out the proposed termination of this subsection, “(II) pays benefits attributable to employer contributions, other than death benefits, only in the form of an annuity, “(III) does not use plan assets to purchase irrevocable commitments to provide benefits from an insurer, and “(IV) continues to pay all benefit commitments under the plan, but, commencing on the proposed termination date, limits the payment of benefits under the plan to those benefits which are guaranteed by the corporation under section 4022 or to which assets are required to be allocated under section 4044. In the event the plan administrator is later determined not to have met the requirements for distress termination, any benefits which are not paid solely by reason of compliance with subclause (IV) shall be due and payable immediately (together with interest, at a reasonable rate, in accordance with regulations of the corporation).”. (b) Conforming Amendments.— Section 4041 (as amended by the preceding provisions of this title) is further amended— (1) by striking out subsection (e); and (2) by redesignating subsection (f) as subsection (e). SEC. 11010. TERMINATION PROCEEDINGS; DUTIES OF THE CORPORATION. (b) Establishment of Section 4049 Trust.— Section 4042 is further amended by adding at the end thereof the following new subsection: “(i) In any case in which a plan is terminated under this section in a termination proceeding initiated by the corporation pursuant to subsection (a), the corporation shall establish a separate trust in connection with the plan for purposes of section 4049, unless the Post, p. 258. corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under section 4022 or 29 USC 1322. that there is no amount of unfunded benefit commitments under the plan.”. (c) Conforming Amendment.— The heading for section 4042 is amended to read as follows: “institution of termination proceedings by the corporation”. SEC. 11011. AMENDMENTS TO LIABILITY PROVISIONS; LIABILITIES RELATING TO BENEFIT COMMITMENTS IN EXCESS OF BENEFITS GUARANTEED BY THE CORPORATION. (a) Liability for Distress Terminations and Terminations by the Corporation.— Section 4062 (29 U.S.C. 1362) is amended— (1) by redesignating subsection (e) as subsection (f); and (2) by striking out so much as precedes subsection (f) (as redesignated) and inserting in lieu thereof the following: “Sec. 4062. “liability for termination of single-employer plans under a distress termination or a termination by the corporation (a) In General.— In any case in which a single-employer plan is terminated in a distress termination under section Ante, p. 248. Ante, p. 253. 4041(c) or a termination otherwise instituted by the corporation under section 4042, any person who is, on the termination date, a contributing sponsor of the plan or a member of such a contributing sponsor’s controlled group shall incur liability under this section. The liability under this section of all such persons shall be joint and several. The liability under this section consists of— “(1) liability to the corporation, to the extent provided in subsection (b), “(2) liability to the trust established pursuant to section Ante, pp, 248, 253, 4041(c)(3)(B) (ii) or (iii) or section 4042(i), to the extent provided in subsection (c), and “(3) liability to the trustee appointed under subsection (b) or (c) of section 4042, to the extent provided in subsection (d). “(b) Liability to the Corporation.— “(1) Amount of liability.— “(A) In general.— Except as provided in subparagraph (B), the liability to the corporation of a person described in subsection (a) shall consist of the sum of— “(i) the lesser of— “(I) the total amount of unfunded guaranteed benefits (as of the termination date) of all participants and beneficiaries under the plan, or “(II) 30 percent of the collective net worth of all persons described in subsection (a), and “(ii) the excess (if any) of— “(I) 75 percent of the amount described in clause (i)(I), over “(II) the amount described in clause (i)(II), together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation. “(B) Special rule in case of subsequent insufficiency.— For purposes of subparagraph (A), in any case described in section 4041(c)(3)(C)(ii), actuarial present values shall be determined as of the date of the notice to the corporation (or the finding by the corporation) described in such section. “(2) Payment of liability.— “(A) In general.— Except as provided in subparagraph (B), the liability to the corporation under this subsection shall be due and payable to the corporation as of the termination date, in cash or securities acceptable to the corporation. “(B) Special rule.— Payment of the liability under paragraph (1)(A)(ii) shall be made under commercially reasonable terms prescribed by the corporation. The parties involved shall make a reasonable effort to reach agreement on such commercially reasonable terms. Any such terms prescribed by the corporation shall provide for deferral of 50 percent of any amount of liability otherwise payable for any year under this subparagraph if a person subject to such liability demonstrates to the satisfaction of the corporation that no person subject to such liability has any individual pretax profits for such person’s fiscal year ending during such year. “(3) Alternative arrangements.— The corporation and any person liable under this section may agree to alternative arrangements for the satisfaction of liability to the corporation under this subsection. “(c) Liability to Section 4049 Trust.— “(1) Amount of liability.— “(A) In general.— In any case in which there is an outstanding amount of benefit commitments under a plan terminated under section 4041(c) or 4042, a person described Ante, pp. 248, 253. in subsection (a) shall be subject to liability under this subsection to the trust established under section 4041(c)(3)(B) (ii) or (iii) or section 4042(i) in connection with the terminated plan. Except as provided in subparagraph (B), the liability of such person under this subsection shall consist of the lesser of— “(i) 75 percent of the total outstanding amount of benefit commitments under the plan, or “(ii) 15 percent of the actuarial present value (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of all benefit commitments under the 29 USC 1344. plan. “(B) Special rule in case of subsequent insufficiency.— For purposes of subparagraph (A)— “(i) Plans insufficient for guaranteed benefits.— In any case described in section 4041(c)(3)(C)(ii), actuarial present values shall be determined as of the date of the notice to the corporation (or the finding by the corporation) described in such section. “(ii) Plans sufficient for guaranteed benefits but insufficient for benefit entitlements.— In any case described in section 4041(c)(3)(C)(i) but not described in section 4041(c)(3)(C)(ii), actuarial present values shall be determined as of the date on which the final distribution of assets is completed. “(2) Payment of Liability.— “(A) General rule.— Except as otherwise provided in this paragraph, payment of a person’s liability under this subsection shall be made for liability payment years under commercially reasonable terms prescribed by the fiduciary designated by the corporation pursuant to section 4049(b)(1)(A). Such fiduciary and the liable persons assessed Post, p. 258. liability under this subsection shall make a reasonable effort to reach agreement on such commercially reasonable terms. “(B) Special rule for plans with low amounts of liability.— In any case in which the amount described in paragraph (1)(A) is less than $100,000, the requirements of subparagraph (A) may be satisfied by payment of such liability over 10 liability payment years in equal annual installments (with interest at the rate determined under section 6621(b) of the Internal Revenue Code of 1954). The 26 USC 6621. corporation may, by regulation, increase the dollar amount referred to in this subparagraph as it determines appropriate, taking into account reasonable administrative costs Ante, p. 248. Ante, p. 253. of trusts established under section 4041(c)(3)(B) (ii) or (iii) or section 4042(i). “(C) Deferral of payments.— The terms for payment provided for under subparagraph (A) or (B) shall also provide for deferral of 75 percent of any amount of liability otherwise payable for any liability payment year if a person subject to such liability demonstrates to the satisfaction of the corporation that no person subject to such liability has any individual pretax profits for such person’s fiscal year ending during such year. The amount of liability so deferred is payable only after payment in full of any amount of liability under subsection (b) in connection with the termination of the same plan which has been deferred pursuant to terms provided for under subsection (b)(2)(B). “(d) Liability to Section 4042 Trustee.— A person described in subsection (a) shall be subject to liability under this subsection to the trustee appointed under subsection (b) or (c) of section 4042. The liability of such person under this subsection shall consist of— “(1) the outstanding balance of the accumulated funding deficiencies 29 USC 1082. 26 USC 412. (within the meaning of section 302(a)(2) of this Act and section 412(a) of the Internal Revenue Code of 1954) of the plan (if any) (which, for purposes of this subparagraph, shall include the amount of any increase in such accumulated funding deficiencies of the plan which would result if all pending applications for waivers of the minimum funding standard under 29 USC 1083. 29 USC 1084. section 303 of this Act or section 412(d) of such Code and for extensions of the amortization period under section 304 of this Act or section 412(e) of such Code with respect to such plan were denied and if no additional contributions (other than those already made by the termination date) were made for the plan year in which the termination date occurs or for any previous plan year), “(2) the outstanding balance of the amount of waived funding deficiencies of the plan waived before such date under section 303 of this Act or section 412(d) of such Code (if any), and “(3) the outstanding balance of the amount of decreases in the minimum funding standard allowed before such date under section 304 of this Act or section 412(e) of such Code (if any), together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation. The liability under this subsection shall be due and payable to such trustee as of the termination date, in cash or securities acceptable to such trustee. “(e) Definitions.— “(1) Collective net worth of persons subject to liability.— “(A) In general.— The collective net worth of persons subject to liability in connection with a plan termination consists of the sum of the individual net worths of all persons who— “(i) have individual net worths which are greater than zero, and “(ii) are (as of the termination date) contributing sponsors of the terminated plan or members of their controlled groups. “(B) Determination of net worth.— For purposes of this paragraph, the net worth of a person is— “(i) determined on whatever basis best reflects, in the determination of the corporation, the current status of the person’s operations and prospects at the time chosen for determining the net worth of the person, and “(ii) increased by the amount of any transfers of assets made by the person which are determined by the corporation to be improper under the circumstances, including any such transfers which would be inappropriate under title 11, United States Code, if the person were a debtor in a case under chapter 7 of such title. 11 USC 701 et seq. “(C) Timing of determination.— For purposes of this paragraph, determinations of net worth shall be made as of a day chosen by the corporation (during the 120-day period ending with the termination date) and shall be computed without regard to any liability under this section. “(2) Pretax profits.— The term ‘pretax profits’ means— “(A) except as provided in subparagraph (B), for any fiscal year of any person, such person’s consolidated net income (excluding any extraordinary charges to income and including any extraordinary credits to income) for such fiscal year, as shown on audited financial statements prepared in accordance with generally accepted accounting principles, or “(B) for any fiscal year of an organization described in section 501(c) of the Internal Revenue Code of 1954, the 26 USC 501. excess of income over expenses (as such terms are defined for such organizations under generally accepted accounting principles), before provision for or deduction of Federal or other income tax, any contribution to any single-employer plan of which such person is a contributing sponsor at any time during the period beginning on the termination date and ending with the end of such fiscal year, and any amounts required to be paid for such fiscal year under this section. The corporation may by regulation require such information to be filed on such forms as may be necessary to determine the existence and amount of such pretax profits. “(3) Liability payment years.— The liability payment years in connection with a terminated plan consist of the consecutive one-year periods following the last plan year preceding the termination date, excluding the first such year in any case in which the first such year ends less than 180 days after the termination date.”. (b) Clerical Amendment.— Subsection (f) of section 4062 (as redesignated 42 USC 1362. by subsection (a)(1)) is amended by inserting “Treatment of Substantial Cessation of Operations.—” after “(f)”. (c) Amendments to the Internal Revenue Code of 1954.— (1) Time for deduction of certain employer liability payments.— Paragraph (3) of section 404(g) of the Internal Revenue Code of 1954 (relating to certain employer liability payments 26 USC 404. considered as contributions) is amended to read as follows: “(3) Timing of deduction of contributions.— “(A) In general.— Except as otherwise provided in this paragraph, any payment described in paragraph (1) shall (subject to the last sentence of subsection (a)(1)(A)) be deductible under this section when paid. “(B) Contributions under standard terminations.— Subparagraph (A) shall not apply (and subsection (a)(1)(A) shall apply) to any payments described in paragraph (1) which are paid to terminate a plan under section 4041(b) of Ante, p. 244. the Employee Retirement Income Security Act of 1974 to the extent such payments result in the assets of the plan being in excess of the total amount of benefits under such plan which are guaranteed by the Pension Benefit Guaranty 29 USC 1322. Corporation under section 4022 of such Act. “(C) Contributions to certain trusts.— Subparagraph (A) shall not apply to any payment described in paragraph 29 USC 1362. (1) which is made under section 4062(c) of such Act and such payment shall be deductible at such time as may be prescribed in regulations which are based on principles similar to the principles of subsection (a)(1)(A).”. (2) References to erisa.— Subsection (g) of section 404 of the 26 USC 404; ante, p. 257. Internal Revenue Code of 1954 is amended by adding at the end thereof the following new paragraph: “(4) References to employee retirement income security act of 1974.— For purposes of this subsection, any reference to a section of the Employee Retirement Income Security Act of 1974 shall be treated as a reference to such section as in effect on the date of the enactment of the Single-Employer Pension Plan Ante, p. 237. Amendments Act of 1986.”. (3) Effective date.— The amendments made by this subsection shall apply to payments made after January 1, 1986, in taxable years ending after such date. SEC. 11012. DISTRIBUTION TO PARTICIPANTS AND BENEFICIARIES OF LIABILITY PAYMENTS TO SECTION 4049 TRUST. (a) In General.— Subtitle C of title IV is amended by adding at the end thereof the following new section: “Sec. 4049. “distribution to participants and beneficiaries of liability payments to section 4049 trust (a) Trust Requirements.— The requirements of this section apply to a trust established by the corporation in connection Ante, p. 248. with a terminated plan pursuant to section 4041(c)(3)(B) (ii) or (iii). The trust shall be used exclusively for— “(1) receiving liability payments under section 4062(c) from the persons who were (as of the termination date) contributing sponsors of the terminated plan and members of their controlled groups, “(2) making distributions as provided in this section to the persons who were (as of the termination date) participants and beneficiaries under the terminated plan, and “(3) defraying the reasonable administrative expenses incurred in carrying out responsibilities under this section. The trust shall be maintained for such period of time as is necessary to receive all liability payments required to be made to the trust under section 4062(c) with respect to the terminated plan and to make all distributions required to be made to participants and beneficiaries under this section with respect to the terminated plan. “(b) Designation of Fiduciary by the Corporation.— “(1) Purposes for designation of fiduciary.— “(A) Collection of liability.— The corporation shall designate a fiduciary (within the meaning of section 3(21)) to 29 USC 1002. serve as trustee of the trust for purposes of conducting negotiations and assessing and collecting liability pursuant to section 4062(c). 29 USC 1362. “(B) Administration of trust.— “(i) Corporation’s functions.— Except as provided in clause (ii), the corporation shall serve as trustee of the trust for purposes of administering the trust, including making distributions from the trust to participants and beneficiaries. “(ii) Designation of fiduciary if cost-effective.— If the corporation determines that it would be cost-effective to do so, it may designate a fiduciary (within the meaning of section 3(21)), including the fiduciary designated under subparagraph (A), to perform the functions described in clause (i). “(2) Fiduciary requirements.— A fiduciary designated under paragraph (1) shall be— “(A) independent of each contributing sponsor of the plan and the members of such sponsor’s controlled group, and “(B) subject to the requirements of part 4 of subtitle B of title I (other than section 406(a)) as if such trust were a plan 29 USC 1101, 1106. subject to such part. “(c) Distributions From Trust.— “(1) In general.— Not later than 30 days after the end of each liability payment year (described in section 4062(e)(3)) with 29 USC 1362. respect to a terminated single-employer plan, the corporation, or its designee under subsection (b), shall distribute from the trust maintained pursuant to subsection (a) to each person who was (as of the termination date) a participant or beneficiary under the plan— “(A) in any case not described in subparagraph (B), an amount equal to the outstanding amount of benefit commitments to such person under the plan (including interest calculated from the termination date), to the extent not previously paid under this paragraph, or “(B) in any case in which the balance in the trust at the end of such year which is in cash or may be prudently converted to cash (after taking into account liability payments received under subsection (a)(1) and administrative expenses paid under subsection (a)(3)) is less than the total of all amounts described in subparagraph (A) in connection with all persons who were (as of the termination date) participants and beneficiaries under the terminated plan, the product derived by multiplying— “(i) the amount described in subparagraph (A) in connection with each such person, by “(ii) a fraction— “(I) the numerator of which is such balance in the trust, and “(II) the denominator of which is equal to the total of all amounts described in subparagraph (A) in connection with all persons who were (as of the termination date) participants and beneficiaries under the terminated plan. “(2) Carry-over of minimal payment amounts.— The corporation, or its designee under subsection (bl, may withhold a payment to any person under this subsection in connection with any liability payment year (other than the last liability payment year with respect to which payments under paragraph (1) are payable) if such payment does not exceed $100. In any case in which such a payment is so withheld, the payment to such person in connection with the next following liability payment year shall be increased by the amount of such withheld payment. “(d) Regulations.— The corporation may issue such regulations as it considers necessary to carry out the purposes of this section.”. (b) Tax-Exempt Status for Trusts Described in Section 4049 of ERISA.— Subsection (c) of section 501 of the Internal Revenue Code 26 USC 501. of 1954 (relating to list of tax-exempt organizations) is amended by adding at the end thereof the following new paragraph: “(24) A trust described in section 4049 of the Employee Retirement Ante, p. 258. Income Security Act of 1974 (as in effect on the date of the enactment of the Single-Employer Pension Plan Amendments Ante, p. 237. Act of 1986).”. (c) Rollovers of Payments From Trust Allowed.— Paragraph 26 USC 402. (6) of section 402(a) of such Code (relating to special rollover rules) is amended by adding at the end thereof the following new subparagraph: “(G) Payments from certain pension plan termination trusts.— If— “(i) any amount is paid or distributed to a recipient from a trust described in section 501(c)(24), “(ii) the recipient transfers any portion of the property received in such distribution to an eligible retirement plan described in subclause (I) or (II) of paragraph (5)(E)(iv), and “(iii) in the case of a distribution of property other than money, the amount so transferred consists of the property distributed, then the portion of the distribution so transferred shall be treated as a distribution described in paragraph (5)(A).”. (d) Special Delayed Payment Rule.— In the case of a distress termination under section 4041(c) of the Employee Retirement Income Security Act of 1974 (as amended by section 11009) pursuant to a notice of intent to terminate filed before January 1, 1987, no payment of liability otherwise payable as provided in section 29 USC 1362. 4062(c)(2)(B) of such Act (as amended by this section) shall be required to be made before January 1, 1989. SEC. 11013. TREATMENT OF TRANSACTIONS TO EVADE LIABILITY; EFFECT OF CORPORATE REORGANIZATION. (a) In General.— Subtitle D of title IV is amended by adding at the end thereof the following new section: “Sec. 4069. “treatment of transactions to evade liability; effect of corporate reorganization (a) Treatment of Transactions to Evade Liability.— If a principal purpose of any person in entering into any transaction is to evade liability to which such person would be subject under this subtitle and the transaction becomes effective within five years before the termination date of the termination on which such liability would be based, then such person and the members of such person’s controlled group (determined as of the termination date) shall be subject to liability under this subtitle in connection with such termination as if such person were a contributing sponsor of the terminated plan as of the termination date. This subsection shall not cause any person to be liable under this subtitle in connection with such plan termination for any increases or improvements in the benefits provided under the plan which are adopted after the date on which the transaction referred to in the preceding sentence becomes effective. “(b) Effect of Corporate Reorganization.— For purposes of this subtitle, the following rules apply in the case of certain corporate reorganizations: “(1) Change of identity, form, etc.— If a person ceases to exist by reason of a reorganization which involves a mere change in identity, form, or place of organization, however effected, a successor corporation resulting from such reorganization shall be treated as the person to whom this subtitle applies. “(2) Liquidation into parent corporation.— If a person ceases to exist by reason of liquidation into a parent corporation, the parent corporation shall be treated as the person to whom this subtitle applies. “(3) Merger, consolidation, or division.— If a person ceases to exist by reason of a merger, consolidation, or division, the successor corporation or corporations shall be treated as the person to whom this subtitle applies.”. (b) Effective Date.— Section 4069(a) of the Employee Retirement Income Security Act of 1974 (as added by subsection (a)) shall apply 29 USC 1369 note. with respect to transactions becoming effective on or after January 1, 1986. SEC. 11014. ENFORCEMENT AUTHORITY RELATING TO TERMINATIONS OF SINGLE-EMPLOYER PLANS. (a) Private Rights of Action—Subtitle D of title IV (as amended by section 11013) is further amended by adding at the end thereof the following new section: “Sec. 4070. “enforcement authority relating to terminations of single-employer plans (a) In General.— Any person who is with respect to a 29 USC 1370. single-employer plan a fiduciary, contributing sponsor, member of a contributing sponsor’s controlled group, participant, or beneficiary, and is adversely affected by an act or practice of any party (other than the corporation) in violation of any provision of section 4041, 4042, 4049, 4062, 4063, 4064, or 4069, or who is an employee organization Ante, pp. 244, 253, 258. 29 USC 1362–1364. Ante, p. 260. representing such a participant or beneficiary so adversely affected for purposes of collective bargaining with respect to such plan, may bring an action— “(1) to enjoin such act or practice, or “(2) to obtain other appropriate equitable relief (A) to redress such violation or (B) to enforce such provision. “(b) Status of Plan as Party to Action and With Respect to Legal Process.— A single-employer plan may be sued under this section as an entity. Service of summons, subpoena, or other legal process of a court upon a trustee or an administrator of a single-employer plan in such trustee’s or administrator’s capacity as such shall constitute service upon the plan. If a plan has not designated in the summary plan description of the plan an individual as agent for the service of legal process, service upon any contributing sponsor of the plan shall constitute such service. Any money judgment under this section against a single-employer plan shall be enforceable only against the plan as an entity and shall not be enforceable against any other person unless liability against such person is established in such person’s individual capacity. “(c) Jurisdiction and Venue.— The district courts of the United States shall have exclusive jurisdiction of civil actions under this section. Such actions may be brought in the district where the plan is administered, where the violation took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found. The district courts of the United States shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to grant the relief provided for in subsection (a) in any action. “(d) Right of Corporation to Intervene.— A copy of the complaint or notice of appeal in any action under this section shall be served upon the corporation by certified mail. The corporation shall have the right in its discretion to intervene in any action. “(e) Awards of Costs and Expenses.— “(1) General rule.— In any action brought under this section, the court in its discretion may award all or a portion of the costs and expenses incurred in connection with such action, including reasonable attorney’s fees, to any party who prevails or substantially prevails in such action. “(2) Exemption for plans.— Notwithstanding the preceding provisions of this subsection, no plan shall be required in any action to pay any costs and expenses (including attorney’s fees). “(f) Limitation on Actions.— “(1) In general.— Except as provided in paragraph (3), an action under this section may not be brought after the later of— “(A) 6 years after the date on which the cause of action arose, or “(B) 3 years after the applicable date specified in paragraph (2). “(2) Applicable date.— “(A) General rule.— Except as provided in subparagraph (B), the applicable date specified in this paragraph is the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action. “(B) Special rule for plaintiffs who are fiduciaries.— In the case of a plaintiff who is a fiduciary bringing the action in the exercise of fiduciary duties, the applicable date specified in this paragraph is the date on which the plaintiff became a fiduciary with respect to the plan if such date is later than the date described in subparagraph (A). “(3) Cases of fraud or concealment.— In the case of fraud or concealment, the period described in paragraph (1)(B) shall be extended to 6 years after the applicable date specified in paragraph (2).”, (b) Civil Actions Involving the Pension Benefit Guaranty Corporation.— (1) Actions against the corporation.— Section 4003(f) (29 U.S.C. 1303(f)) is amended to read as follows: “(f) (1) Except with respect to withdrawal liability disputes under part 1 of subtitle E, any person who is a fiduciary, employer, contributing sponsor, member of a contributing sponsor’s controlled group, participant, or beneficiary, and is adversely affected by any action of the corporation with respect to a plan in which such person has an interest, or who is an employee organization representing such a participant or beneficiary so adversely affected for purposes of collective bargaining with respect to such plan, may bring an action against the corporation for appropriate equitable relief in the appropriate court. “(2) For purposes of this subsection, the term ‘appropriate court’ means— “(A) the United States district court before which proceedings under section 4041 or 4042 are being conducted, “(B) if no such proceedings are being conducted, the United Ante, pp. 244, 253. States district court for the judicial district in which the plan has its principal office, or “(C) the United States District Court for the District of Columbia. “(3) In any action brought under this subsection, the court may award all or a portion of the costs and expenses incurred in connection with such action to any party who prevails or substantially prevails in such action. “(4) This subsection shall be the exclusive means for bringing actions against the corporation under this title, including actions against the corporation in its capacity as a trustee under section 4042 or 4049. Ante, p. 258. “(5) (A) Except as provided in subparagraph (C), an action under this subsection may not be brought after the later of— “(i) 6 years after the date on which the cause of action arose, or “(ii) 3 years after the applicable date specified in subparagraph (B). “(B) (i) Except as provided in clause (ii), the applicable date specified in this subparagraph is the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action. “(ii) In the case of a plaintiff who is a fiduciary bringing the action in the exercise of fiduciary duties, the applicable date specified in this subparagraph is the date on which the plaintiff became a fiduciary with respect to the plan if such date is later than the date specified in clause (i). “(C) In the case of fraud or concealment, the period described in subparagraph (A)(ii) shall be extended to 6 years after the applicable date specified in subparagraph (B). “(6) The district courts of the United States have jurisdiction of actions brought under this subsection without regard to the amount in controversy. “(7) In any suit, action, or proceeding in which the corporation is a party, or intervenes under section 4301, in any State court, the 29 USC 1451. corporation may, without bond or security, remove such suit, action, or proceeding from the State court to the United States district court for the district or division in which such suit, action, or proceeding is pending by following any procedure for removal now or hereafter in effect.“. (2) Limitation on actions by the corporation.— Section 4003(e) (29 U.S.C. 1303(e)) is amended by adding at the end thereof the following new paragraph: “(6) (A) Except as provided in subparagraph (C), an action under this subsection may not be brought after the later of— “(i) 6 years after the date on which the cause of action arose, or “(ii) 3 years after the applicable date specified in subparagraph (Bi. “(B) (i) Except as provided in clause (ii), the applicable date specified in this subparagraph is the earliest date on which the corporation acquired or should have acquired actual knowledge of the existence of such cause of action. “(ii) If the corporation brings the action as a trustee, the applicable date specified in this subparagraph is the date on which the corporation became a trustee with respect to the plan if such date is later than the date described in clause (i). “(C) In the case of fraud or concealment, the period described in subparagraph (A)(ii) shall be extended to 6 years after the applicable date specified in subparagraph (B).”. (3) Effective date.— The amendments made by this subsection shall apply with respect to actions filed after the date of the enactment of this Act. SEC. 11015. PROVISIONS RELATING TO WAIVERS OF MINIMUM FUNDING STANDARD AND EXTENSIONS OF AMORTIZATION PERIOD. (a) Security For Waivers.— (1) ERISA amendment.— (A) In general.— Part 3 of subtitle B of title I is amended— (i) by redesignating section 306 (29 U.S.C. 1086) as section 307; and (ii) by inserting after section 305 (29 U.S.C. 1085) the following new section: “Sec. 306. “security for waivers of minimum funding standard and extensions of amortization period (a) Security May Be Required.— “(1) In general.— Except as provided in subsection (c), the Secretary of the Treasury may require an employer maintaining a defined benefit plan which is a single-employer plan 29 USC 1301. (within the meaning of section 4001(a)(15)) to provide security to such plan as a condition for granting or modifying a waiver under section 303 or an extension 29 USC 1083, 1084. under section 304. “(2) Special rules.— Any security provided under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation or, at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13)) or a member of such sponsor’s controlled group (within the meaning of section 4001(a)(14)). “(b) Consultation With the Pension Benefit Guaranty Corporation.— Except as provided in subsection (c), the Secretary of the Treasury shall, before granting or modifying a waiver under section 303 or an extension under section 304 with respect to a plan described in subsection (a)(1)— “(1) provide the Pension Benefit Guaranty Corporation with— “(A) notice of the completed application for any waiver, extension, or modification, and “(B) an opportunity to comment on such application within 30 days after receipt of such notice, and “(2) consider— “(A) any comments of the Corporation under paragraph (1)(B), and “(B) any views of any employee organization representing participants in the plan which are submitted in writing to the Secretary of the Treasury in connection with such application. Information provided to the corporation under this subsection shall be considered tax return information and subject to the safeguarding and reporting requirements of section 6103(p) of the Internal Revenue Code of 1954. 26 USC 6103. “(c) Exception for Certain Waivers and Extensions.— “(1) In general.— The preceding provisions of this section shall not apply to any plan with respect to which the sum of— “(A) the outstanding balance of the accumulated funding deficiencies (within the meaning of section 302(a)(2) of this Act and section 412(a) of the Internal Revenue Code of 1954) 29 USC 1082. 26 USC 412. of the plan, “(B) the outstanding balance of the amount of waived funding deficiencies of the plan waived under section 303 of this Act or section 412(d) of such Code, and “(C) the outstanding balance of the amount of decreases in the minimum funding standard allowed under section 304 of this Act or section 412(e) of such Code, 29 USC 1084. is less than $2,000,000. “(2) Accumulated funding deficiencies.— For purposes of paragraph (1)(A), accumulated funding deficiencies shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under section 303 of this Act or section 412(d) of the Internal Revenue 29 USC 1083. Code of 1954 and for extensions of the amortization period under section 304 of this Act or section 412(e) of such Code which are pending with respect to such plan were denied.”. (B) Conforming amendment.— Section 211(c)(1) is 29 USC 1061. amended by striking out “306(c)” and inserting in lieu thereof “307(c)”. (C) Clerical amendment.— The table of sections in section 1 is amended by striking out the item relating to section 306 and inserting in lieu thereof the following new items: “Sec. 306. Security for waivers of minimum funding standard and extensions of amortization period. “Sec. 307. Effective dates.” (2) Amendments to the internal revenue code of 1954.— (A) In general.— Subsection (f) of section 412 of the Internal Revenue Code of 1954 (relating to requirement 26 USC 412. that benefits may not be increased during waiver or extension period) is amended by adding at the end thereof the following new paragraph: “(3) Security for waivers and extensions; consultations.— “(A) Security may be required.— “(i) In general.— Except as provided in subparagraph (C), the Secretary may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15) of the Employee Retirement Income Security 29 USC 1301. Act of 1974) to provide security to such plan as a condition for granting or modifying a waiver under subsection (d) or an extension under subsection (e). “(ii) Special rules.— Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor Ante, p. 238. (within the meaning of section 4001(a)(13) of such Act), or a member of such sponsor’s controlled group (within Ante, p. 238. the meaning of section 4001(a)(14) of such Act). “(B) Consultation with the pension benefit guaranty corporation.— Except as provided in subparagraph (C), the Secretary shall, before granting or modifying a waiver under subsection (d) or an extension under subsection (e) with respect to a plan described in subparagraph (A)(i)— “(i) provide the Pension Benefit Guaranty Corporation with— “(I) notice of the completed application for any waiver, extension, or modification, and “(II) an opportunity to comment on such application within 30 days after receipt of such notice, and “(ii) consider— “(I) any comments of the Corporation under clause (i)(II), and “(II) any views of any employee organization (within the meaning of section 3(4) of the Employee 29 USC 1002. Retirement Income Security Act of 1974) representing participants in the plan which are submitted in writing to the Secretary in connection with such application. Information provided to the corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements 26 USC 6103. of section 6103(p). “(C) Exception for certain waivers and extensions.— “(i) In general.— The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of— “(I) the outstanding balance of the accumulated funding deficiencies (within the meaning of subsection 29 USC 1082. (a) and section 302(a) of such Act) of the plan, “(II) the outstanding balance of the amount of waived funding deficiencies of the plan waived 29 USC 1083. under subsection (d) or section 303 of such Act, and “(III) the outstanding balance of the amount of decreases in the minimum funding standard allowed under subsection (e) or section 304 of such 29 USC 1084. Act is less than $2,000,000. “(ii) Accumulated funding deficiencies.— For purposes of clause (i)(I), accumulated funding deficiencies shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under subsection (d) or section 303 of such Act and for extensions of the amortization period 29 USC 1083. 29 USC 1084. under subsection (e) or section 304 of such Act which are pending with respect to such plan were denied.”. (B) Conforming amendments.— Section 412(f) of the Internal Revenue Code of 1954 is amended— 26 USC 412. (i) by striking out the heading thereof and inserting in lieu thereof: “(f) Requirements Relating to Waivers and Extensions.—”, and (ii) by striking out the heading of paragraph (1) thereof and inserting in lieu thereof: “(1) Benefits may not be increased during waiver or extension period.—”, (3) Effective dates.— The amendments made by this subsection 29 USC 1085a note. shall apply with respect to applications for waivers, extensions, and modifications filed on or after the date of the enactment of this Act. (b) Applicable Interest Rate Under Arrangements Providing for Waivers and Extensions— (1) Amendments to erisa.— (A) Variances from the minimum funding standard.— Section 303(a) (29 U.S.C. 1083(a)) is amended by adding at the end thereof the following new sentence: “The interest rate used for purposes of computing the amortization charge described in section 302(b)(2)(C) for a variance 29 USC 1082. granted under this subsection shall be the rate determined under section 6621(b) of the Internal Revenue Code of 1954.”. 26 USC 6621. (B) Extensions of the amortization period.— Section 304(a) (29 U.S.C. 1084(a)) is amended by adding after and below paragraph (2) the following new sentence: “The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b) of the Internal Revenue Code of 1954.”, (2) Amendments to internal revenue code.— (A) Variances from the minimum funding standard.— Paragraph (1) of section 412(d) of the Internal Revenue Code of 1954 (relating to waivers in case of substantial business 26 USC 412. hardship) is amended by adding at the end thereof the following new sentence: “The interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection shall be the rate determined under section 6621(b).”. (B) Extensions of the amortization period.— Subsection (e) of section 412 of such Code (relating to extension of amortization period) is amended by adding after and below paragraph (2) the following new sentence: “The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b).”. SEC. 11016. CONFORMING, CLARIFYING, TECHNICAL, AND MISCELLANEOUS AMENDMENTS. (a) Conforming Amendments Relating to Plan Terminations— (1) Estimated benefits for certain single-employer plans.— Section 4005(b)(2) (29 U.S.C. 1305(b)(2)) is amended— (A) by striking out “and” at the end of subparagraph (C); (B) by striking out the period at the end of subparagraph (D) and inserting in lieu thereof “, and”; and (C) by adding at the end thereof the following: “(E) to pay to participants and beneficiaries the estimated amount of benefits which are guaranteed by the corporation under this title and the estimated amount of other benefits to 29 USC 1344. which plan assets are allocated under section 4044, under single-employer plans which are unable to pay benefits when due or which are abandoned.”. (2) Credits to revolving fund.— Section 4005(b)(1) (29 U.S.C. 1305(b)(1)) is amended— (A) by striking out “and” at the end of subparagraph (E); (B) by redesignating subparagraph (F) as subparagraph (G); and (C) by inserting after subparagraph (E) the following new subparagraph: “(F) attorney’s fees awarded to the corporation, and”. (3) Restoration of plans.— Section 4047 (29 U.S.C. 1347) is amended— (A) in the first sentence, by inserting “under section 4041 or 4042” after “terminated” each place it appears; and (B) in the second sentence, by striking out “section 4042” and inserting in lieu thereof “section 4041 or 4042”. (4) Termination date.— Section 4048(a) (29 U.S.C. 1348(a)) is amended— (A) by striking out “date of termination” and inserting in lieu thereof “termination date”; (B) by redesignating paragraphs (1) through (3) as paragraphs (2) through (4), respectively; (C) in paragraph (2) (as redesignated), by inserting “in a distress termination” after “terminated” and by striking out “section 4041” and inserting in lieu thereof “section 4041(c)”; (D) by inserting before paragraph (2) (as redesignated) the following new paragraph: “(1) in the case of a plan terminated in a standard termination in accordance with the provisions of section 4041(b), the termination date proposed in the notice provided under section 4041(a)(2),”; and (E) in paragraph (4) (as redesignated), by striking out “in accordance with the provisions of either section” and inserting in lieu thereof “under section 4041(c) or 4042”. (5) Conforming amendments to special liability rules relating to certain single-employer plans under multiple controlled groups— (A) Liability of substantial employer for withdrawal.— (i) Section 4063(a) (29 U.S.C. 1363(a)) is amended— (I) by striking out “plan under which more than one employer makes contributions (other than a multiemployer plan)” and inserting in lieu thereof “single-employer plan which has two or more contributing sponsors at least two of whom are not under common control”; (II) in paragraph (1), by striking out “withdrawal of a substantial employer” and inserting in lieu thereof “withdrawal during a plan year of a substantial employer for such plan year”; (III) in paragraph (2), by striking out “of such employer” and all that follows and inserting in lieu thereof “of all persons with respect to the withdrawal of the substantial employer.”; (IV) by striking out “whether such employer is liable for any amount under this subtitle with respect to the withdrawal” and inserting in lieu thereof “whether there is liability resulting from the withdrawal of the substantial employer”; and (V) by striking out “notify such employer” and inserting in lieu thereof “notify the liable persons”. (ii) Section 4063(b) (29 U.S.C. 1363(b)) is amended— (I) by striking out “an employer” and all that follows down through “shall be liable” and inserting in lieu thereof “any one or more contributing sponsors who withdraw, during a plan year for which they constitute a substantial employer, from a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control, shall, upon notification of such contributing sponsors by the corporation as provided by subsection (a), be liable, together with the members of their controlled groups,”; (II) by striking out “such employer’s”; (III) by striking out “the employer’s withdrawal” and inserting in lieu thereof “the withdrawal referred to in subsection (a)(1)”; (IV) in paragraph (1), by striking out “such employer” and inserting in lieu thereof “such contributing sponsors”; (V) in paragraph (2), by striking out “all employers” and inserting in lieu thereof “all contributing sponsors”; and (VI) by striking out “the liability of each such employer” and inserting in lieu thereof “such liability”. (iii) Section 4063(c) (29 U.S.C. 1363(c)) is amended— (I) in paragraph (1), by striking out “In lieu of payment of his liability under this section the employer” and inserting in lieu thereof “In lieu of payment of a contributing sponsor’s liability under this section, the contributing sponsor”; (II) in paragraph (2), by inserting “under section 4041(c) or 4042” after “terminated”, by striking out “of such employer”, and by striking out “to the employer (or his bond cancelled)” and inserting in lieu thereof “(or the bond cancelled)”; and (III) in paragraph (3), by inserting “under section 4041(c) or 4042” after “terminates” and by striking out “employer” in subparagraph (C) and inserting in lieu thereof “contributing sponsor”. (iv) Section 4063(d) (29 U.S.C. 1363(d)) is amended— (I) by striking out “Upon a showing by the plan administrator of a plan (other than a multiemployer plan) that the withdrawal from the plan by any employer or employers has resulted” and inserting in lieu thereof “Upon a showing by the plan administrator of the plan that the withdrawal from the plan by one or more contributing sponsors has resulted”; (II) by striking out “by employers”; (III) in paragraph (1), by striking out “their employer’s” and inserting in lieu thereof “the”; and (IV) in paragraph (2), by striking out “termination” and inserting in lieu thereof “plan terminated under section 4042”. (v) Section 4063(e) (29 U.S.C. 1363(e)) is amended— (I) by striking out “to any employer or plan administrator”; and (II) by striking out “al! other employers” and inserting in lieu thereof “contributing sponsors”. (vi) The heading for section 4063 is amended by adding at the end thereof the following “from single-employer plans under multiple controlled groups.”. (B) Allocation of liability upon termination of certain SINGLE-EMPLOYER PLANS.— (i) Section 4064(a) (29 U.S.C. 1364(a)) is amended— (I) by striking out “all employers who maintain a plan under which more than one employer makes contributions (other than a multiemployer plan)” and inserting in lieu thereof “all contributing sponsors of a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control”; and (II) by inserting “under section 4041(c) or 4042” after “terminated”. (ii) Section 4064(b) (29 U.S.C. 1364(b)) is amended to read as follows: “(b) The corporation shall determine the liability with respect to each contributing sponsor and each member of its controlled group 29 USC 1362. in a manner consistent with section 4062, except that— “(1) the amount of the liability determined under section 4062(b)(1) with respect to the entire plan— “(A) shall be determined without regard to clauses (i)(II) and (ii) of section 4062(b)(1)(A), and “(B) shall be allocated to each controlled group by multiplying such amount by a fraction— “(i) the numerator of which is the amount required to be contributed to the plan for the last 5 plan years ending prior to the termination date by persons in such controlled group as contributing sponsors, and “(ii) the denominator of which is the total amount required to be contributed to the plan for such last 5 plan years by all persons as contributing sponsors, and clauses (i)(II) and (ii) of section 4062(b)(1)(A) shall be applied 29 USC 1362. separately with respect to each such controlled group, and “(2) the amount of the liability determined under section 4062(c)(1) with respect to the entire plan shall be allocated to each controlled group by multiplying such amount by the fraction described in paragraph (1)(B) in connection with such controlled group. The corporation may also determine the liability of each such contributing sponsor and member of its controlled group on any other equitable basis prescribed by the corporation in regulations.”. (iii) The heading for section 4064 is amended to read as follows: “liability on termination of single-employer plans under multiple controlled groups”. (C) Annual notification to substantial employers.— Section 4066 (29 U.S.C. 1366) is amended— (i) by striking out “each plan under which contributions are made by more than one employer (other than a multiemployer plan)” and inserting in lieu thereof “each single-employer plan which has at least two contributing sponsors at least two of whom are not under common control”; (ii) by striking out “any employer making contributions under that plan” and inserting in lieu thereof “contributing sponsor of the plan”; and (iii) by striking out “that he is a substantial employer” and inserting in lieu thereof “that such contributing sponsor (alone or together with members of such contributing sponsor’s controlled group) constitutes a substantial employer”. (6) Additional amendments relating to recovery of amounts of liability.— (A) Section 4067 (29 U.S.C. 1367) is amended— (i) in the heading, by striking out “employer”; (ii) by striking out “employer or employers” and inserting in lieu thereof “contributing sponsors and members of their controlled groups”; and (iii) by inserting “of amounts of liability to the corporation accruing as of the termination date” after “deferred payment”. (B) Section 4068 (29 U.S.C. 1368) is amended— (i) in the heading, by striking out “of employer”; (ii) in subsection (a), by striking out “employer or employers” the first place it appears and inserting in lieu thereof “person”, by striking out “neglect or refuse” and inserting in lieu thereof “neglects or refuses”, by inserting “to the extent of an amount equal to the unpaid amount described in section 4062(b)(1)(A)(i)” after “liability” and after “corporation” the second place it appears, and by striking out employer or employers” and inserting in lieu thereof “person”; (iii) in subsection (d)(1), by striking out “employer” and inserting in lieu thereof “liable person”; (iv) in subsection (d)(2), by striking out “employer” each place it appears and inserting in lieu thereof “liable person”; (v) in subsection (e), by striking out “employer or employers” and inserting in lieu thereof “liable person”; and (vi) by striking out subsection (c)(1) (29 U.S.C. 1368(c)(1)) and inserting in lieu thereof the following: “(c) (1) Except as otherwise provided under this section, the priority of a lien imposed under subsection (a) shall be determined in the same manner as under section 6323 of the Internal Revenue Code of 26 USC 6323. Ante, p. 237. 1954 (as in effect on the date of the enactment of the Single-Employer Pension Plan Amendments Act of 1986). Such section 6323 shall be applied for purposes of this section by disregarding subsection (g)(4) and by substituting— (A) ‘lien imposed by section 4068 of the Employee Retirement 29 USC 1368. Income Security Act of 1974’ for ‘lien imposed by section 6321’ each place it appears in subsections (a), (b), (c)(1), (c)(4)(B), (d), (e), and (h)(5); “(B) ‘the corporation’ for ‘the Secretary’ in subsections (a) and (b)(9)(C); “(C) ‘the payment of the amount on which the section 4068(a) lien is based’ for ‘the collection of any tax under this title’ in subsection (b)(3); “(D) ‘a person whose property is subject to the lien’ for ‘the taxpayer’ in subsections (b)(8), (c)(2)(A)(i) (the first place it appears), (c)(2)(A)(ii), (c)(2)(B), (c)(4)(B), and (c)(4)(C) (in the matter preceding clause (i)); “(E) ‘such person’ for ‘the taxpayer’ in subsections (c)(2)(A)(i) (the second place it appears) and (c)(4)(C)(ii); “(F) ’payment of the loan value of the amount on which the lien is based is made to the corporation’ for ‘satisfaction of a levy pursuant to section 6332(b)’ in subsection (b)(9)(C); “(G) ‘section 4068(a) lien’ for ‘tax lien’ each place it appears in subsections (c)(1), (c)(2)(A), (c)(2)(B), (c)(3)(B)(iii), (c)(4)(B), (d), and (h)(5); and “(H) ‘the date on which the lien is first filed’ for ‘the date of the assessment of the tax’ in subsection (g)(3)(A).”. (b) Clarification of Description of Certain Information Required To Be Filed in Annual Report.— (1) In general.— Section 103(d)(6) (29 U.S.C. 1023(d)(6)) is amended to read as follows: “(6) Information required in regulations of the Pension Benefit Guaranty Corporation with respect to: “(A) the current value of the assets of the plan, “(B) the present value of all nonforfeitable benefits for participants and beneficiaries receiving payments under the plan, “(C) the present value of all nonforfeitable benefits for all other participants and beneficiaries, “(D) the present value of all accrued benefits which are not nonforfeitable (including a separate accounting of such benefits which are benefit commitments, as defined in section 4001 (a)(16)), and 29 USC 1301. “(E) the actuarial assumptions and techniques used in determining the values described in subparagraphs (A) through (D).”. (2) Conforming amendment.— Section 104(a)(2)(A) (29 U.S.C. 1024(a)(2)(A)) is amended by striking out the second sentence. (3) Transition rules.— Any regulations, modifications, or 29 USC 1023 note. waivers which have been issued by the Secretary of Labor with respect to section 103(d)(6) of the Employee Retirement Income Security Act of 1974 (as in effect immediately before the date of the enactment of 29 USC 1023. this Act) shall remain in full force and effect until modified by any regulations with respect to such section 103(d)(6) prescribed by the Pension Benefit Guaranty Corporation. (c) Additional Amendments.— (1) Definition for title i.— Section 3(37)(A) (29 U.S.C. 1002(37)(A)) is amended by inserting “pension” before “plan”. (2) Notice of request for waivers of minimum funding standards and right to submit relevant information—Section 303 (29 U.S.C. 1083) is amended by inserting after subsection (d) the following new subsection: “(e) (1) The Secretary of the Treasury shall, before granting a waiver under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such waiver to each employee organization representing employees covered by the affected plan. “(2) The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).”. (3) Notice of request for extensions of amortization PERIOD AND RIGHT TO SUBMIT RELEVANT INFORMATION.— Section 304 (29 U.S.C. 1084) is amended by adding at the end thereof the following new subsection: “(c) (1) The Secretary of the Treasury shall, before granting an extension under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such extension to each employee organization representing employees covered by the affected plan. “(2) The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).”. (4) Amendment to the internal revenue code of 1954.— Subsection (f) of section 412 of the Internal Revenue Code of 1954 (relating to benefits may not be increased during waiver or 26 USC 412. extension period), as amended by the preceding provisions of this title, is further amended by adding at the end thereof the following new paragraph: “(4) Additional requirements.— “(A) Advance notice.— The Secretary shall, before granting a waiver under subsection (d) or an extension under subsection (e), require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such waiver or extension to each employee organization representing employees covered by the affected plan. “(B) Consideration of relevant information.— The Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).”. (5) Audit of plans terminated in standard termination.— Section 4003(a) (29 U.S.C. 1303(a)) is amended by adding at the end thereof the following new sentence: “The corporation shall annually audit a statistically significant number of plans terminating Ante, p. 244. under section 4041(b) to determine whether participants and beneficiaries have received their benefit commitments. Each audit shall include a statistically significant number of participants and beneficiaries.”. (6) Repeal of expired authority.— Section 4004 (29 U.S.C. 1304) is repealed. (7) Voting by corporation of stock paid as liability.— Section 4005 (29 U.S.C. 1305) is amended by adding at the end thereof the following new subsection: “(g) Any stock in a person liable to the corporation under this title which is paid to the corporation by such person or a member of such person’s controlled group in satisfaction of such person’s liability under this title may be voted only by the custodial trustees or outside money managers of the corporation or fiduciaries with Ante, p. 258. respect to trusts to which the requirements of section 4049 apply.”. (8) Effective years.— Section 4022(b)(7) (29 U.S.C. 1322(b)(7)) is amended by striking out “following” and inserting in lieu thereof “beginning with”. (9) Treatment of qualified preretirement survivor annuities.— Section 4022 (29 U.S.C. 1322) is amended by adding at the end thereof the following new subsection: “(d) For purposes of subsection (a), a qualified preretirement 29 USC 1055. survivor annuity (as defined in section 205(e)(1)) with respect to a participant under a terminated single-employer plan shall not be treated as forfeitable solely because the participant has not died as of the termination date.”. (10) Clarification of power to collect amounts due the corporation.— Section 4042(d)(1)(B)(ii) (29 U.S.C. 1342(d)(1)(B)(ii)) is amended by inserting after “amounts due the plan” the following: “, including but not limited to the power to collect from the persons obligated to meet the requirements of 29 USC 1082. section 302 or the terms of the plan”. (11) Conforming amendment.— Section 4042(d)(3) (29 U.S.C. 1342(d)(3)) is amended by striking out “same duties as a trustee appointed under section 47 of the Bankruptcy Act” and inserting in lieu thereof “same duties as those of a trustee under section 704 of title 11, United States Code”. (12) Conforming amendment.— Section 4044(a) (29 U.S.C. 1344(a)) is amended by striking out “defined benefit”. (13) Clerical corrections.— Section 4044(a)(4) (29 U.S.C. 1344(a)(4)(A)) is amended— (A) in subparagraph (A), by striking out “section 4022(b)(5)” and inserting in lieu thereof “section 4022B(a)”; and (B) in subparagraph (B), by striking out “section 4022(b)(6)” and inserting in lieu thereof “section 4022(b)(5)”. (14) Release of lien.— Section 4068(e) (29 U.S.C. 1368(e)) is amended by striking out “, with the consent of the board of directors,”. (d) Studies by Comptroller General.— 29 USC 1143a. Congress. (1) In general.— The Comptroller General of the United States may, pursuant to the request of any Member of Congress, study employee benefit plans, including the effects of such plans on employees, participants, and their beneficiaries. (2) Access to books, documents, etc.— For the purpose of conducting studies under this subsection, the Comptroller General, or any of his duly authorized representatives, shall have access to and the right to examine and copy any books, documents, papers, records, or other recorded information— (A) within the possession or control of the administrator, sponsor, or employer of and persons providing services to any employee benefit plan, and (B) which the Comptroller General or his representative finds, in his own judgment, pertinent to such study. The Comptroller General shall not disclose the identity of any Classified information. individual or employer in making any information obtained under this subsection available to the public. (3) Definitions.— For purposes of this subsection, the terms “employee benefit plan”, “participant”, “administrator”, “beneficiary’ , “plan sponsor”, “employee”, and “employer” are defined in section 3 of the Employee Retirement Income Security Act of 1974. (4) Effective date.— The preceding provisions of this subsection 29 USC 1002. 29 USC 1143a note. shall be effective on the date of the enactment of this Act. (e) Amendments to the Table of Contents of ERISA.— The table of contents in section 1 is amended— (1) by striking out the item relating to section 4004; (2) by striking out the item relating to section 4042 and inserting in lieu thereof the following new item: “Sec. 4042. Institution of termination proceedings by the corporation.”; (3) by inserting after the item relating to section 4048 the following new item: “Sec. 4049. Distribution to participants and beneficiaries of liability payments to section 4049 trust.3”; and (4) by striking out the items relating to subtitle D of title IV and inserting in lieu thereof the following new items: “Subtitle D— Liability “Sec. 4061. Amounts payable by the corporation. “Sec. 4062. Liability for termination of single-employer plans under a distress termination or a termination by the corporation. “Sec. 4063. Liability of substantial employer for withdrawal from single-employer plans under multiple controlled groups. “Sec. 4064. Liability on termination of single-employer plans under multiple controlled groups. “Sec. 4065. Annual report of plan administrator. “Sec. 4066. Annual notification of substantial employers. “Sec. 4067. Recovery of liability for plan termination. “Sec. 4068. Lien for liability. “Sec. 4069. Treatment of transactions to evade liability; effect of corporate reorganization. “Sec. 4070. Enforcement authority relating to terminations of single-employer plans.”. SEC. 11017. STUDIES. (a) Single-Employer Pension Plan Termination Insurance Premium Study.— (1) In general.— As soon as practicable after the date of the enactment of this Act, the Pension Benefit Guaranty Corporation shall conduct a study of the premiums established under the single-employer pension plan termination insurance program under title IV of the Employee Retirement Income Security 29 USC 1301. Act of 1974. (2) Matters to be studied.— The Corporation shall specifically consider in its study the following matters: (A) the effect of the amendments made by this title on the long-term stability of the single-employer pension plan termination insurance program under title IV of the Employee Retirement Income Security Act of 1974, (B) alternatives to the current statutory mechanism with respect to proposals for changes in the premium levels under such program, (C) the methods currently used by the Corporation in projecting future program costs of the single-employer pension plan termination insurance program, (D) alternative methods of projecting such future program costs and an evaluation of each such alternative method, (E) the methods currently used by the Corporation in determining premiums needed to allocate and adequately fund such future program costs, (F) alternative methods of making such premium determinations and an evaluation of each such alternative method, and (G) alternative premium bases upon which some or all of such projected future program costs would be allocated on an exposure-related or risk-related computation, which may take into account the different exposures or risks imposed on the Corporation by plan sponsors with different histories and under different circumstances. (3) Submission of corporation’s report.— Not later than one year after the date of the enactment of this Act, the Corporation shall report the results of its study, together with any recommendations for statutory changes, to an advisory council, to be appointed by the chairmen of the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives and the Committee on Labor and Human Resources and the Committee on Finance of the Senate. The advisory council shall be composed of representatives of single-employer plan sponsors, employee organizations representing single-employer plan participants, and members of the general public who are experts in the matters to be considered in the study. The members of the advisory council shall serve without compensation. (4) Submission of council’s report to congress.— Not later than 180 days after the date of the submission of the Corporation’s report to the advisory council under paragraph (3), the advisory council shall submit the results of the Corporation’s study and the Corporation’s recommendations, together with the recommendations of the council, to the Speaker of the House of Representatives and the President pro tempore of the Senate. (5) Cooperation by the pension benefit guaranty corporation and other federal agencies.— The Corporation shall cooperate with the advisory council in reviewing the results of the Corporation’s study and recommendations. In order to avoid unnecessary expense and duplication, to the extent not otherwise prohibited by law, the Corporation and any other Federal agency shall provide to the advisory council any data, analyses, or other relevant information related to the matters under review. (b) Overfunded Pension Plan Study.— (1) In general.— As soon as practicable after the date of enactment of this Act. the Secretary of Labor shall conduct a study of terminations resulting in residual assets under section 4044(d) of the Employee Retirement Income Security Act of 1974. 29 USC 1344. (2) Report.— No later than May 1, 1986, the Secretary of Labor shall submit a report on the study conducted under paragraph (1), together with any recommendations for statutory changes, to the chairmen of the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives and the Committee on Labor and Human Resources and the Committee on Finance of the Senate. SEC. 11018. LIMITATION ON REGULATIONS. (a) Regulatory Treatment of Assets of Real Estate Entities.— (1) In general—Except as a defense, no rule or regulation adopted pursuant to the Secretary’s proposed regulation defining “plan assets” for purposes of the Employee Retirement Income Security Act of 1974 (50 Fed. Reg. 961, January 8, 1985, as modified by 50 Fed. Reg. 6361, February 15, 1985), or any reproposal thereof prior to the adoption of the regulations required to be issued in accordance with subsection (d), shall apply to any asset of a real estate entity in which a plan, account, or arrangement subject to such Act invests if— (A) any interest in the entity is first offered to a plan, account, or arrangement subject to such Act investing in the entity (hereinafter in this section referred to as a “plan investor’ 1 on or before the date which is 120 days after the date of publication of such rule or regulation as a final rule or regulation; (B) no plan investor acquires an interest in the entity from an issuer or underwriter at any time on or after the date which is 270 days after the date of publication of such rule or regulation as a final rule or regulation (except pursuant to a contract or subscription binding on the plan investor and entered into, or tendered, before the expiration of such 270-day period, or pursuant to the exercise, on or before December 31, 1990, of a warrant which was the subject of an effective registration under the Securities Act of 1933 (15 U.S.C. 77q et seq.) prior to the date of the 15 USC 77a et seq. enactment of this section); and (C) every interest in the entity acquired by a plan investor (or contracted for or subscribed to by a plan investor) before the expiration of such 270-day period is a security— (i) which is part of an issue or class of securities which upon such acquisition or at any time during the offering period is held by 100 or more persons; (ii) the economic rights of ownership in respect of which are freely transferable; (iii) which is registered under the Securities Act of 15 USC 77a et seq. 1933; and (iv) which is part of an issue or class of securities which is registered under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (or is so registered within three years of the effective date of the registration statement of such securities for purposes of the Securities Act of 1933: Provided, That the issuer provides plan investors with such reports with respect to the offering period as are required with respect to such period by the Securities and Exchange Commission under such Acts and the rules and regulations promulgated thereunder). In the case of partnerships organized prior to enactment of this section, the requirements of subparagraphs (iii) and (iv) shall not apply to initial limited partnership interests in an entity otherwise described above: Provided, That such entity was the subject of an effective registration under the Securities Act of 1933 prior to the date of the enactment of this section, such interests were issued solely for partnership organizational purposes in compliance with State limited partnership laws, and such interest has a value as of the date of issue of less than $20,000 and represents less than one percent of the total interests outstanding as of the completion of the offering period. (2) Maintenance of current regulatory treatment.— No asset of any real estate entity described in paragraph (1) shall be treated as an asset of any plan investor for any purpose of 29 USC 1001 note. the Employee Retirement Income Security Act of 1974 if the assets of such entity would not have been assets of such plan investor under the provisions of— (A) Interpretive Bulletin 75–2 (29 CFR 2509 750–2); or (B) the regulations proposed by the Secretary of Labor and published— (i) on August 28, 1979, at 44 Fed. Reg. 50363; (ii) on June 6, 1980, at 45 Fed. Reg. 38084; (iii) on January 8, 1985, at 50 Fed. Reg. 961; or (iv) on February 15, 1985, at 50 Fed. Reg. 6361, without regard to any limitation of any effective date proposed therein. (b) Definitions and Special Rules.— For purposes of this section— (1) The term “real estate entity” means an entity which, at any time within two years after the closing of its offering period has invested or has contracted to invest at least 75 percent of the value of its net assets available for investment in direct or indirect ownership of “real estate assets” or “interests in real property”. (2) The term “real estate asset” means real property (including an interest in real property) and any share of stock or beneficial interest, partnership interest, depository receipt, or any other interest in any other real estate entity. (3) The term “interest in real property” includes, directly or indirectly, the following: (A) the ownership or co-ownership of land or improvements thereon; (B) any mortgage (including an interest in or co-ownership of any mortgage, leasehold mortgage, pool of mortgages, deed of trust, or similar instrument) on land or improvements thereon, (C) any leasehold of land or improvements thereon; and (D) any option to acquire any of the foregoing, but does not include any mineral, oil, or gas royalty interest. (4) Whether the economic rights of ownership with respect to a security are “freely transferable” shall be determined based upon all the facts and circumstances, but ordinarily none of the following, alone or in any combination, shall cause the economic rights of ownership to be considered not freely transferable— (A) any requirement that not less than a minimum number of shares or units of such security be transferred or assigned by any investor: Provided, That such requirement does not prevent transfer of all of the then remaining shares or units held by an investor; (B) any prohibition against transfer or assignment of such security or rights in respect thereof to an ineligible or unsuitable investor; (C) any restriction on or prohibition against any transfer or assignment which would either result in a termination or reclassification of the entity for Federal or State tax purposes or which would violate any State or Federal statute, regulation, court order, judicial decree, or rule of law; (D) any requirement that reasonable transfer or administrative fees be paid in connection with a transfer or assignment; (E) any requirement that advance notice of a transfer or assignment be given to the entity and any requirement regarding execution of documentation evidencing such transfer or assignment (including documentation setting forth representations from either or both of the transferor or transferee as to compliance with any restriction or requirement described in this section or requiring compliance with the entity’s governing instruments); (F) any restriction on substitution of an assignee as a limited partner of a partnership, including a general partner consent requirement: Provided, That the economic benefits of ownership of the assignor may be transferred or assigned without regard to such restriction or consent (other than compliance with any other restriction described in this section); (G) any administrative procedure which establishes an effective date, or an event such as the completion of the offering, prior to which a transfer or assignment will not be effective; and (H) any limitation or restriction on transfer or assignment which is not created or imposed by the issuer or any person acting for or on behalf of such issuer. (c) No Effect on Secretary’s Authority Other Than As Provided.— Except as provided in subsection (a), nothing in this section shall limit the authority of the Secretary of Labor to issue regula-tions or otherwise interpret section 3(21) of the Employee Retirement 29 USC 1002. Income Security Act of 1974. (d) Time Limit for Final Regulations.— The Secretary of Labor shall adopt final regulations defining “plan assets” by December 31, 1986. (e) Effective Date.— The preceding provisions of this section shall take effect on the date of the enactment of this Act. SEC. 11019. EFFECTIVE DATE OF TITLE; TEMPORARY PROCEDURES. (a) In General.— Except as otherwise provided in this title, the amendments made by this title shall be effective as of January 1, 1986, except that such amendments shall not apply with respect to terminations for which— (1) notices of intent to terminate were filed with the Pension Benefit Guaranty Corporation under section 4041 of the Employee Ante, p. 244. Retirement Income Security Act of 1974 before such date, or (2) proceedings were commenced under section 4042 of such Ante, p. 253. Act before such date. (b) Transitional Rules.— (1) In general.— In the case of a single-employer plan termination for which a notice of intent to terminate was filed with the Pension Benefit Guaranty Corporation under section 4041 of the Employee Retirement Income Security Act of 1974 (as in effect before the amendments made by this title) on or after January 1, 1986, but before the date of the enactment of this Act, the amendments made by this title shall apply with respect to such termination, as modified by paragraphs (2) and (3). (2) Deemed compliance with notice requirements.— The requirements of subsections (a)(2), (b)(1)(A), and (c)(1)(A) of section 4041 of the Employee Retirement Income Security Act of 1974 (as amended by this title) shall be considered to have been met with respect to a termination described in paragraph (1) if— (A) the plan administrator provided notice to the participants in the plan regarding the termination in compliance with applicable regulations of the Pension Benefit Guaranty Corporation as in effect on the date of the notice, and (B) the notice of intent to terminate provided to the Pension Benefit Guaranty Corporation in connection with the termination was filed with the Corporation not less than 10 days before the proposed date of termination specified in the notice. For purposes of section 4041 of such Act (as amended by this title), the proposed date of termination specified in the notice of intent to terminate referred to in subparagraph (B) shall be considered the proposed termination date. (3) Special termination procedures.— (A) In general.— This paragraph shall apply with respect to any termination described in paragraph (1) if, within 90 days after the date of enactment of this Act, the plan administrator notifies the Corporation in writing— (i) that the plan administrator wishes the termination to proceed as a standard termination under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this title) in accordance with subparagraph (B), (ii) that the plan administrator wishes the termination to proceed as a distress termination under section 4041(c) of such Act (as amended by this title) in Ante, p. 248. accordance with subparagraph IC), or (iii) that the plan administrator wishes to stop the termination proceedings in accordance with subparagraph (D). (B) TERMINATIONS PROCEEDING AS STANDARD TERMINATION.— (i) Terminations for which sufficiency notices have not been issued.— (I) In general—In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has not been issued by the Corporation before the date of the enactment of this Act, if, during the 90-day period commencing on the date of the notice required in subclause (II), all benefit commitments under the plan have been satisfied, the termination shall be treated as a standard termination under section 4041(b) of such Act (as amended by this title), (II) Special notice regarding sufficiency for terminations for which notices of sufficiency have not been issued as of date of enactment.— In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has not been issued by the Corporation before the date of the enactment of this Act, the Corporation shall make the determinations described in section 4041(c)(3)(A) (i) and (ii) (as amended by this title) and notify the plan administrator of such determinations as provided in section 4041(c)(3)(A)(iii) (as amended by this title). (ii) Terminations for which notices of sufficiency have been issued.— In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has been issued by the Corporation before the date of the enactment of this Act, clause (i)(I) shall apply, except that the 90-day period referred to in clause (i)(I) shall begin on the date of the enactment of this Act. (C) Terminations proceeding as distress termination.— In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(ii), if the requirements of section 4041(c)(2)(B) of such Act (as amended by this title) are met, the termination Ante, p. 248. shall be treated as a distress termination under section 4041(c) of such Act (as amended by this title). (D) Termination of proceedings by plan administrator.— (i) In general.— Except as provided in clause (ii), in the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(hi), the termination shall not take effect. (ii) Terminations with respect to which final distribution of assets has commenced.— Clause (i) shall not apply with respect to a termination with respect to which the final distribution of assets has commenced before the date of the enactment of this Act unless, within 90 days after the date of the enactment of this Act, the plan has been restored in accordance with procedures issued by the Corporation pursuant to subsection (c). (E) Authority of corporation to extend 90-day periods to permit standard termination.— The Corporation may, on a case-by-case basis in accordance with subsection (c), provide for extensions of the applicable 90-day period referred to in clause (i) or (ii) of subparagraph (B) if it is demonstrated to the satisfaction of the Corporation that— (i) the plan could not otherwise, pursuant to the preceding provisions of this paragraph, terminate in a termination treated as a standard termination under section 4041(b) of the Employee Retirement Income Ante, p. 244. Security Act of 1974 (as amended by this title), and (ii) the extension would result in a greater likelihood that benefit commitments under the plan would be paid in full, except that any such period may not be so extended beyond one year after the date of the enactment of this Act. (c) Authority To Prescribe Temporary Procedures.— The Pension Benefit Guaranty Corporation may prescribe temporary procedures for purposes of carrying out the amendments made by this title during the 180-day period beginning on the date described in subsection (a).

6. 1986

   Single-Employer Pension Plan Amendments Act of 1986

   Pub. L. 99–272 title XI · 100 Stat. 82

   1. Added · 29 U.S.C. § 1341(c)

      Pub. L. 99–272, §§ 11007(a), 11009(a), added subsec. (c) relating to distress termination of single-employer plans

   2. Struck · 29 U.S.C. § 1341(c)

      Pub. L. 99–272, §§ 11007(a), 11009(a), struck out former subsec. (c) relating to a finding and notice of inability to determine that the assets of a plan are sufficient

   Source evidence

   Code amendment note
   Subsec. (c). Pub. L. 99–272, §§ 11007(a), 11009(a), added subsec. (c) relating to distress termination of single-employer plans and struck out former subsec. (c) relating to a finding and notice of inability to determine that the assets of a plan are sufficient.

   Enacted provision · exact public law
   TITLE XI— SINGLE-EMPLOYER PLAN TERMINATION INSURANCE SYSTEM AMENDMENTS SEC. 11001. SHORT TITLE AND TABLE OF CONTENTS. This title may be cited as “Single-Employer Pension Plan Amendments Act of 1986”. TABLE OF CONTENTS Sec. 11001. Short title and table of contents. Sec. 11002. Findings and declaration of policy. Sec. 11003. Amendment of the Employee Retirement Income Security Act of 1974. Sec. 11004. Definitions. Sec. 11005. Single-employer plan termination insurance premiums. Sec. 11006. Notice of significant reduction in benefit accruals. Sec. 11007. General requirements relating to termination of single-employer plans by plan administrators. Sec. 11008. Standard termination of single-employer plans. Sec. 11009. Distress termination of single-employer plans. Sec. 11010. Termination proceeding; duties of the corporation. Sec. 11011. Amendments to liability provisions; liabilities relating to benefit commitments in excess of benefits guaranteed by the corporation. Sec. 11012. Distribution to participants and beneficiaries of liability payments to section 4049 trust. Sec. 11013. Treatment of transactions to evade liability; effect of corporate reorganization. Sec. 11014. Enforcement authority relating to terminations of single-employer plans. Sec. 11015. Provisions relating to waivers of minimum funding standard and extensions of amortization period. Sec. 11016. Conforming, clarifying, technical, and miscellaneous amendments. Sec. 11017. Studies. Sec. 11018. Limitation on regulations. Sec. 11019. Effective date of title; temporary procedures. SEC. 11002. FINDINGS AND DECLARATION OF POLICY. (a) Findings.— The Congress finds that— (1) single-employer defined benefit pension plans have a substantial impact on interstate commerce and are affected with a national interest; (2) the continued well-being and retirement income security of millions of workers, retirees, and their dependents are directly affected by such plans; (3) the existence of a sound termination insurance system is fundamental to the retirement income security of participants and beneficiaries of such plans; and (4) the current termination insurance system in some instances encourages employers to terminate pension plans, evade their obligations to pay benefits, and shift unfunded pension liabilities onto the termination insurance system and the other premium-payers. (b) Additional Findings.— The Congress further finds that modification of the current termination insurance system and an increase in the insurance premium for single-employer defined benefit pension plans— (1) is desirable to increase the likelihood that full benefits will be paid to participants and beneficiaries of such plans; (2) is desirable to provide for the transfer of liabilities to the termination insurance system only in cases of severe hardship; (3) is necessary to maintain the premium costs of such system at a reasonable level; and (4) is necessary to finance properly current funding deficiencies and future obligations of the single-employer pension plan termination insurance system. (c) Declaration of Policy.— It is hereby declared to be the policy of this title— (1) to foster and facilitate interstate commerce; (2) to encourage the maintenance and growth of single-employer defined benefit pension plans; (3) to increase the likelihood that participants and beneficiaries under single-employer defined benefit pension plans will receive their full benefits; (4) to provide for the transfer of unfunded pension liabilities onto the single-employer pension plan termination insurance system only in cases of severe hardship; (5) to maintain the premium costs of such system at a reasonable level; and (6) to assure the prudent financing of current funding deficiencies and future obligations of the single-employer pension plan termination insurance system by increasing termination insurance premiums. SEC. 11003. AMENDMENT OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1971. Whenever in this title an amendment or repeal is expressed in terms of an amendment to or repeal of a section or other provision, the reference is to a section or other provision of the Employee Retirement Income Security Act of 1974, unless otherwise specified. SEC. 11004. DEFINITIONS. (a) In General.— Section 4001(a) (29 U.S.C. 1301(a)) is amended— (1) by striking out paragraph (2) and inserting in lieu thereof the following new paragraph: “(2) ‘substantial employer’, for any plan year of a single-employer plan, means one or more persons— “(A) who are contributing sponsors of the plan in such plan year, “(B) who, at any time during such plan year, are members of the same controlled group, and “(C) whose required contributions to the plan for each plan year constituting one of— “(i) the two immediately preceding plan years, or “(ii) the first two of the three immediately preceding plan years, total an amount greater than or equal to 10 percent of all contributions required to be paid to or under the plan for such plan year;”; (2) in paragraph (11), by striking out “and”; (3) in paragraph (12), by striking out “corporation.” and inserting in lieu thereof “corporation;”; and (4) by adding after paragraph (12) the following new paragraphs: “(13) ‘contributing sponsor’, of a single-employer plan, means a person— “(A) who is responsible, in connection with such plan, for meeting the funding requirements under section 302 of this Act or section 412 of the Internal Revenue Code of 1954, or 29 USC 1112. 26 USC 412. “(B) who is a member of the controlled group of a person described in subparagraph (A), has been responsible for meeting such funding requirements, and has employed a significant number (as may be defined in regulations of the corporation) of participants under such plan while such person was so responsible; “(14) in the case of a single-employer plan— “(A) ‘controlled group’ means, in connection with any person, a group consisting of such person and all other persons under common control with such person; and “(B) the determination of whether two or more persons are under ‘common control’ shall be made under regulations of the corporation which are consistent and coextensive with regulations prescribed for similar purposes by the Secretary of the Treasury under subsections (b) and (c) of section 414 of the Internal Revenue Code of 1954; 26 USC 414. “(15) ‘single-employer plan’ means any defined benefit plan (as defined in section 3(35)) which is not a multiemployer plan; 29 USC 1002. “(16) ‘benefit commitments’, to a participant or beneficiary as of any date under a single-employer plan, means all benefits provided by the plan with respect to the participant or beneficiary which— “(A) are guaranteed under section 4022, 29 USC 1322. “(B) would be guaranteed under section 4022, but for the operation of subsection 4022(b), or “(C) constitute— “(i) early retirement supplements or subsidies, or “(ii) plant closing benefits, irrespective of whether any such supplements, subsidies, or benefits are benefits guaranteed under section 4022, if the participant or beneficiary has satisfied, as of such date, all of the conditions required of him or her under the provisions of the plan to establish entitlement to the benefits, except for the submission of a formal application, retirement, completion of a required waiting period subsequent to application for benefits, or designation of a beneficiary; “(17) ‘amount of unfunded guaranteed benefits’, of a participant or beneficiary as of any date under a single-employer plan, means an amount equal to the excess of— “(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefits of the 29 USC 1344. participant or beneficiary under the plan which are guaranteed under section 4022, over “(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefits under section 4044; 29 USC 1344. “(18) ‘amount of unfunded benefit commitments’, of a participant or beneficiary as of any date under a single-employer plan, means an amount equal to the excess of— “(A) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefit commitments to the participant or beneficiary under the plan, over “(B) the current value (as of such date) of the assets of the plan which are required to be allocated to those benefit 29 USC 1344. commitments under section 4044; “(19) ‘outstanding amount of benefit commitments’, of a participant or beneficiary under a terminated single-employer plan, means the excess of— “(A) the actuarial present value (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefit commitments to such participant or beneficiary under the plan, over “(B) the actuarial present value (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of the benefits of such participant or beneficiary which are guaranteed under section 29 USC 1322. 4022 or to which assets of the plan are required to be allocated under section 4044; “(20) ‘person’ has the meaning set forth in section 3(9); “(21) ‘affected party’ means, with respect to a plan— “(A) each participant in the plan, “(B) each beneficiary under the plan who is a beneficiary of a deceased participant or who is an alternate payee 29 USC 1056. (within the meaning of section 206(d)(3)(K)) under an applicable qualified domestic relations order (within the meaning of section 206(d)(3)(B)(i)), “(C) each employee organization representing participants in the plan, and “(D) the corporation, except that, in connection with any notice required to be provided to the affected party, if an affected party has designated, in writing, a person to receive such notice on behalf of the affected party, any reference to the affected party shall be construed to refer to such person.”. (b) Technical Correction of Error in Multiemployer Pension Plan Amendments Act of 1980.— Section 4001 is further amended by striking out the amendments made by section 402(a)(1)(F) of the Multiemployer Pension Plan Amendments Act of 1980 (94 Stat. 29 USC 1301. 1297) (adding new paragraphs after a subsection (c)(1)), and, in lieu thereof, in subsection (b), by inserting “(1)” after “(b)” and by adding at the end of such subsection the following new paragraph: “(2) For purposes of subtitle E— “(A) except as otherwise provided in subtitle E, contributions or other payments shall be considered made under a plan for a plan year if they are made within the period prescribed under 26 USC 412. section 412(c)(10) of the Internal Revenue Code of 1954 (determined in the case of a terminated plan, as if the plan had continued beyond the termination date), and “(B) the term ‘Secretary of the Treasury’ means the Secretary of the Treasury or such Secretary’s delegate.”. SEC. 11005. SINGLE-EMPLOYER PLAN TERMINATION INSURANCE PREMIUMS. (a) Premium Increase.— (1) General rule.— Section 4006(a)(3)(A)(i) (29 U.S.C. 1306(a)(3)(A)(i)) is amended by striking out “for plan years beginning after December 31, 1977, an amount equal to $2.60” and inserting in lieu thereof “for plan years beginning after December 31, 1985, an amount equal to $8.50”. (2) Conforming amendment with respect to plan years after 1977.— Section 4006(c)(1) (29 U.S.C. 1306(c)(1)) is amended by striking out subparagraph (A) and inserting in lieu thereof the following new subparagraph: “(A) in the case of each plan which was not a multiemployer plan in a plan year— “(i) with respect to each plan year beginning before January 1, 1978, an amount equal to $1 for each individual who was a participant in such plan during the plan year, and “(ii) with respect to each plan year beginning after December 31, 1977, an amount equal to $2.60 for each individual who was a participant in such plan during the plan year, and”. (b) Incorporation of Certain Former Provisions in Lieu of Cross Reference Thereto.— Section 4006(a) (29 U.S.C. 1306(a)) is amended— (1) in paragraph (1), by striking out the last sentence; and (2) by adding at the end thereof the following new paragraph: “(6) (A) In carrying out its authority under paragraph (1) to establish premium rates and bases for basic benefits guaranteed under section 4022 with respect to single-employer plans, the corporation 29 USC 1322. shall establish such rates and bases in coverage schedules in accordance with the provisions of this paragraph. “(B) The corporation may establish annual premiums for single-employer plans composed of the sum of— “(i) a charge based on a rate applicable to the excess, if any, of the present value of the basic benefits of the plan which are guaranteed over the value of the assets of the plan, not in excess of 0.1 percent, and “(ii) an additional charge based on a rate applicable to the present value of the basic benefits of the plan which are guaranteed. The rate for the additional charge referred to in clause (ii) shall be set by the corporation for every year at a level which the corporation estimates will yield total revenue approximately equal to the total revenue to be derived by the corporation from the charges referred to in clause (i) of this subparagraph. “(C) The corporation may establish annual premiums for single-employer plans based on— “(i) the number of participants in a plan, but such premium rates shall not exceed the rates described in paragraph (3), “(ii) unfunded basic benefits guaranteed under this title, but such premium rates shall not exceed the limitations applicable to charges referred to in subparagraph (B)(i), or “(iii) total guaranteed basic benefits, but such premium rates shall not exceed the rates for additional charges referred to in subparagraph (B)(ii). If the corporation uses two or more of the rate bases described in this subparagraph, the premium rates shall be designed to produce approximately equal amounts of aggregate premium revenue from each of the rate bases used. “(D) For purposes of this paragraph, the corporation shall by regulation define the terms ‘value of assets’ and ‘present value of the benefits of the plan which are guaranteed’ in a manner consist-ent with the purposes of this title and the provisions of this section.”. (c) Approval by Joint Resolution of Recommendations of the Pension Benefit Guaranty Corporation.— Title IV is amended as follows: (1) The last sentence of subsection (a)(2) of section 4006 (29 U.S.C. 1306(a)(2)) is amended by striking out “the Congress approves such revised schedule by a concurrent resolution” and inserting in lieu thereof “a joint resolution approving such revised schedule is enacted”. (2) Subsection (a)(4) of section 4006 (29 U.S.C. 1306(a)(4)) is amended by striking out “approval by the Congress” and inserting in lieu thereof “the enactment of a joint resolution”. (3) Subsection (b)(3) of section 4006 (29 U.S.C. 1306(b)(3)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”, by striking out “That the Congress favors the” and inserting in lieu thereof “The”, and by inserting “is hereby approved” before the period preceding the quotation marks. (4) Subsection (f)(2)(B) of section 4022A (29 U.S.C. 1322a(f)(2)(B)) is amended by striking out “Congress by concurrent resolution” and inserting in lieu thereof “the enactment of a joint resolution”. (5) Subsection (f)(2)(C) of section 4022A (29 U.S.C. 1322a(f)(2)(C)) is amended by striking out “approved” and inserting in lieu thereof “so enacted”. (6) Subsection (f)(3)(B) of section 4022A (29 U.S.C. 1322a(f)(3)(A)) is amended by striking out “Congress by a concurrent resolution” and inserting in lieu thereof “enactment of a joint resolution”. (7) Subsection (f)(4)(A) of section 4022A (29 U.S.C. 1322a(f)(4)(A)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”. (8) Subsection (f)(4)(B) of section 4022A (29 U.S.C. 1322a(f)(4)(B)) is amended by striking out “concurrent” each place it appears and inserting in lieu thereof “joint”, by striking out “That the Congress favors the” and inserting in lieu thereof “The”, and by inserting “is hereby approved” immediately before the period preceding the quotation marks. (9) Subsection (f)(4)(C) of section 4022A (29 U.S.C. 1322a(f)(4)(C)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”. (10) Subsection (g)(4)(A)(ii) of section 4022A (29 U.S.C. 1322a(g)(4)(A)(ii)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”, and by striking out “adopted” and inserting in lieu thereof “enacted”. (11) Subsection (g)(4)(B) of section 4022A (29 U.S.C. 1322a(g)(4)(B)) is amended by striking out “concurrent” each place it appears and inserting in lieu thereof “joint”, by striking out “That the Congress disapproves the” and inserting in lieu thereof “The”, and by inserting “is hereby disapproved” immediately before the period preceding the quotation marks. (12) Subsection (g)(4)(D) of section 4022A (29 U.S.C. 1322a(g)(4)(D)) is amended by striking out “concurrent” and inserting in lieu thereof “joint”. (d) Effective Dates.— (1) General rule.— Except as provided in paragraph (2), the amendments made by this section shall be effective for plan years commencing after December 31, 1985. (2) Special rule.— The amendments made by subsection (bl shall be effective as of the date of the enactment of the Multi-employer Pension Plan Amendments Act of 1980. (e) Transitional Rule.— 29 USC 1001 note. 42 USC 1306 note. (1) Notice of premium increase.— Not later than 30 days after the date of the enactment of this Act, the Pension Benefit Guaranty Corporation shall send a notice to the plan administrator of each single-employer plan affected by the premium increase established by the amendment made by subsection (a)(1). Such notice shall describe such increase and the requirements of this subsection. (2) Due date for unpaid premiums.— With respect to any plan year beginning during the period beginning on January 1, 1986, and ending 30 days after the date of the enactment of this Act, any unpaid amount of such premium increase shall be due and payable no later than the earlier of 60 days after the date of the enactment of this Act or 30 days after the date on which the notice required by paragraph (1) is sent, except that in no event shall the amount of the premium increase established under the amendment made by subsection (a)(1) be due and payable for a plan year earlier than the date on which premiums for the plan would have been due for such plan year had this Act not been enacted. (3) Enforcement.— For purposes of enforcement, the requirements of paragraphs (1) and (2) shall be considered to be requirements of sections 4006 and 4007 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306 and 1307). SEC. 11006. NOTICE OF SIGNIFICANT REDUCTION IN BENEFIT ACCRUALS. (a) In General.— Section 204 (29 U.S.C. 1054) is amended— (1) by redesignating subsection (h) as subsection (i); and (2) by inserting after subsection (g) the following new subsection: “(h) A single-employer plan may not be amended so as to provide for a significant reduction in the rate of future benefit accrual, unless, after adoption of the plan amendment and not less than 15 days before the effective date of the plan amendment, the plan administrator provides a written notice, setting forth the plan amendment and its effective date, to— “(1) each participant in the plan, “(2) each beneficiary who is an alternate payee (within the meaning of section 206(d)(3)(K)) under an applicable qualified 29 USC 1056. domestic relations order (within the meaning of section 206(d)(3)(B)(i)), and “(3) each employee organization representing participants in the plan, except that such notice shall instead be provided to a person designated, in writing, to receive such notice on behalf of any person referred to in paragraph (1), (2), or (3).”. (b) Effective Date.— The amendments made by subsection (a) 29 USC 1054 note. shall apply with respect to plan amendments adopted on or after January 1, 1986, except that, in the case of plan amendments adopted on or after January 1, 1986, and on or before the date of the enactment of this Act, the requirements of section 204(h) of the Employee Retirement Income Security Act of 1974 (as added by this section) shall be treated as met if the written notice required under such section 204(h) is provided before 60 days after the date of the enactment of this Act. SEC. 11007. GENERAL REQUIREMENTS RELATING TO TERMINATION OF SINGLE-EMPLOYER PLANS BY PLAN ADMINISTRATORS. (a) In General.— Section 4041 (29 U.S.C. 1341) is amended by striking out subsections (a) through (c) and inserting in lieu thereof the following: “Sec. 4041. (a) General Rules Governing Single-Employer Plan Terminations.— “(1) Exclusive means of plan termination.— Except in the case of a termination for which proceedings are otherwise instituted Post, p. 253. by the corporation as provided in section 4042, a single-employer plan may be terminated only in a standard termination under subsection (b) or a distress termination under subsection (c). “(2) 60-day notice of intent to terminate.— Not less than 60 days before the proposed termination date of a standard termination under subsection (b) or a distress termination under subsection (c), the plan administrator shall provide to each affected party (other than the corporation in the case of a standard termination) a written notice of intent to terminate stating that such termination is intended and the proposed termination date. The written notice shall include any related additional information required in regulations of the corporation. “(3) Adherence to collective bargaining agreements.— The corporation shall not proceed with a termination of a plan under this section if the termination would violate the terms and conditions of an existing collective bargaining agreement. Nothing in the preceding sentence shall be construed as limiting the authority of the corporation to institute proceedings to involuntarily terminate a plan under section 4042.”. (b) Definitions Relating to Sufficiency.— Section 4041(d) (29 U.S.C. 1341(d)) is amended to read as follows: “(d) Sufficiency.— For purposes of this section— “(1) Sufficiency for benefit commitments.— A single-employer plan is sufficient for benefit commitments if there is no amount of unfunded benefit commitments under the plan. “(2) Sufficiency for guaranteed benefits.— A single-employer plan is sufficient for guaranteed benefits if there is no amount of unfunded guaranteed benefits under the plan.”. SEC. 11008. STANDARD TERMINATION OF SINGLE-EMPLOYER PLANS. (a) In General.— Section 4041 (as amended by section 11007 of this Act) is further amended by inserting after subsection (a) the following new subsection: “(b) Standard Termination of Single-Employer Plans.— “(1) General requirements.— A single-employer plan may terminate under a standard termination only if— “(A) the plan administrator provides the 60-day advance notice of intent to terminate to affected parties required under subsection (a)(2), “(B) the requirements of subparagraphs (A) and (B) of paragraph (2) are met, “(C) the corporation does not issue a notice of noncompliance under subparagraph (C) of paragraph (2), and “(D) when the final distribution of assets occurs, the plan is sufficient for benefit commitments (determined as of the termination date). “(2) Termination procedure.— “(A) Notice to the corporation.— As soon as practicable after the date on which the notice of intent to terminate is provided pursuant to subsection (a)(2), the plan administrator shall send a notice to the corporation setting forth— “(i) certification by an enrolled actuary— “(I) of the projected amount of the assets of the plan (as of a proposed date of final distribution of assets), “(II) of the actuarial present value (as of such date) of the benefit commitments (determined as of the proposed termination date) under the plan, and “(III) that the plan is projected to be sufficient (as of such proposed date of final distribution) for such benefit commitments, “(ii) such information as the corporation may prescribe Regulations. in regulations as necessary to enable the corporation to make determinations under subparagraph (C), and “(iii) certification by the plan administrator that the information on which the enrolled actuary based the certification under clause (i) and the information provided to the corporation under clause (ii) are accurate and complete. “(B) Notice to participants and beneficiaries of benefit commitments.— No later than the date on which a notice is sent by the plan administrator under subparagraph (A), the plan administrator shall send a notice to each person who is a participant or beneficiary under the plan— “(i) specifying the amount of such person’s benefit commitments (if any) as of the proposed termination date and the benefit form on the basis of which such amount is determined, and “(ii) including the following information used in determining such benefit commitments: “(I) the length of service, “(II) the age of the participant or beneficiary, “(III) wages, “(IV) the assumptions, including the interest rate, and “(V) such other information as the corporation may require. Such notice shall be written in such manner as is likely to be understood by the participant or beneficiary and as may be prescribed in regulations of the corporation. “(C) Notice from the corporation of noncompliance.— “(i) In general.— Within 60 days after receipt of the notice under subparagraph (A), the corporation shall issue a notice of noncompliance to the plan administrator if— “(I) it has reason to believe that any requirement of subsection (a)(2) or subparagraph (A) or (B) has not been met, or “(II) it otherwise determines, on the basis of information provided by affected parties or otherwise obtained by the corporation, that there is reason to believe that the plan is not sufficient for benefit commitments. “(ii) Extension.— The corporation and the plan administrator may agree to extend the 60-day period referred to in clause (i) by a written agreement signed by the corporation and the plan administrator before the expiration of the 60-day period. The 60-day period shall be extended as provided in the agreement and may be further extended by subsequent written agreements signed by the corporation and the plan administrator made before the expiration of a previously agreed upon extension of the 60-day period. Any extension may be made upon such terms and conditions (including the payment of benefits) as are agreed upon by the corporation and the plan administrator. “(D) Final distribution of assets in absence of notice of noncompliance.— The plan administrator shall commence the final distribution of assets pursuant to the standard termination of the plan as soon as practicable after the expiration of the 60-day (or extended) period referred to in subparagraph (C), but such final distribution may occur only if— “(i) the plan administrator has not received during such period a notice of noncompliance from the corporation under subparagraph (C), and “(ii) when such final distribution occurs, the plan is sufficient for benefit commitments (determined as of the termination date). “(3) Methods of final distribution of assets.— “(A) In general.— In connection with any final distribution of assets pursuant to the standard termination of the plan under this subsection, the plan administrator shall 29 USC 1344. distribute the assets in accordance with section 4044. In distributing such assets, the plan administrator shall— “(i) purchase irrevocable commitments from an insurer to provide the benefit commitments under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 4044, or “(ii) in accordance with the provisions of the plan and any applicable regulations of the corporation, otherwise fully provide the benefit commitments under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 4044. “(B) Certification to the corporation of final distribution of assets.— Within 30 days after the final distribution of assets is completed pursuant to the standard termination of the plan under this subsection, the plan administrator shall send a notice to the corporation certifying that the assets of the plan have been distributed in accordance with the provisions of subparagraph (A) so as to pay the benefit commitments under the plan and all other benefits under the plan to which assets are required to be allocated under section 4044. 29 USC 1344. “(4) Continuing authority.— Nothing in this section shall be construed to preclude the continued exercise by the corporation, after the termination date of a plan terminated in a standard termination under this subsection, of its authority under section 4003 with respect to matters relating to the termination. A 29 USC 1303. certification under paragraph (3)(B) shall not affect the corporation’s obligations under section 4022.”. 29 USC 1322. (b) Conforming Amendment.— Section 4041(f) (29 U.S.C. 1341(f)) is amended to read as follows: “(f) Limitation on the Conversion of a Defined Benefit Plan to a Defined Contribution Plan.— The adoption of an amendment to a plan which causes the plan to become a plan described in section 4021(b)(1) constitutes a termination of the plan. Such an 29 USC 1321. amendment may take effect only after the plan satisfies the requirements for standard termination under subsection (b) or distress termination under subsection (c).”. (c) Authority for 60-Day Extension.— In the case of a standard 29 USC 1341 note. Ante, p. 244. termination of a plan under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this section) with respect to which a notice of intent to terminate is filed before 120 days after the date of the enactment of this Act, the Pension Benefit Guaranty Corporation may, without the consent of the plan administrator, extend the 604ay period under section 4041(b)(2)(C)(i) of such Act (as so amended) for a period not to exceed 60 days. (d) Special Temporary Rule.— (1) Requirements to be met before final distribution of assets.— In the case of the termination of a single-employer plan described in paragraph (2) with respect to which the amount payable to the employer pursuant to section 4044(d) 29 USC 1344. exceeds $1,000,000 (determined as of the proposed date of final distribution of assets), the final distribution of assets pursuant to such termination may not occur unless the Pension Benefit Guaranty Corporation— (A) determines that the assets of the plan are sufficient for benefit commitments (within the meaning of section 4041(d)(1) of the Employee Retirement Income Security Act of 1974 (as amended by section 11007)) under the plan, and (B) issues to the plan administrator a written notice setting forth the determination described in subparagraph (A). (2) Plans to which subsection applies.— A single-employer plan is described in this paragraph if— (A) the plan administrator has filed a notice of intent to terminate with the Pension Benefit Guaranty Corporation, and— (i) the filing was made before January 1, 1986, and the Corporation has not issued a notice of sufficiency for such plan before the date of the enactment of this Act, or (ii) the filing is made on or after January 1, 1986, and before 60 days after the date of the enactment of this Act and the Corporation has not issued a notice of sufficiency for such plan before the date of the enactment of this Act, and (B) of the persons who are (as of the termination date) participants in the plan, the lesser of 10 percent or 200 have filed complaints with the Corporation regarding such termination— (i) in the case of plans described in subparagraph (A)(i), before 15 days after the date of the enactment of this Act, or (ii) in any other case, before the later of 15 days after the date of the enactment of this Act or 45 days after the date of the filing of such notice. (3) Consideration of complaints.— The Corporation shall consider and respond to such complaints not later than 90 days after the date on which the Corporation makes the determination described in paragraph (1)(A). The Corporation may hold informal hearings to expedite consideration of such complaints. Any such hearing shall be exempt from the requirements of 5 USC 500 et seq. chapter 5 of title 5, United States Code. (4) Delay on issuance of notice.— (A) General rule.— Except as provided in subparagraph (B), the Corporation shall not issue any notice described in paragraph (1)(B) until 90 days after the date on which the Corporation makes the determination described in paragraph (1)(A). (B) Exception in cases of substantial business hardship.— Except in the case of an acquisition, takeover, or leveraged buyout, the preceding provisions of this subsection shall not apply if the contributing sponsor demonstrates to the satisfaction of the Corporation that the contributing sponsor is experiencing substantial business hardship. For purposes of this subparagraph, a contributing sponsor shall be considered as experiencing substantial business hardship if the contributing sponsor has been operating, and can demonstrate that the contributing sponsor will continue to operate, at an economic loss. SEC. 11009. DISTRESS TERMINATION OF SINGLE-EMPLOYER PLANS. (a) In General.— Section 4041 (as amended by sections 11007 and 11008 of this Act) is further amended by inserting after subsection (b) the following new subsection: “(c) Distress Termination of Single-Employer Plans.— “(1) In general.— A single-employer plan may terminate under a distress termination only if— “(A) the plan administrator provides the 60-day advance notice of intent to terminate to affected parties required under subsection (a)(2), “(B) the requirements of subparagraph (A) of paragraph (2) are met, and “(C) the corporation determines that the requirements of subparagraph (B) of paragraph (2) are met. “(2) Termination requirements.— “(A) Information submitted to the corporation.— As soon as practicable after the date on which the notice of intent to terminate is provided pursuant to subsection (a)(2), the plan administrator shall provide the corporation, in such form as may be prescribed by the corporation in regulations, the following information: “(i) such information as the corporation may prescribe by regulation as necessary to make determinations under subparagraph (B) and paragraph (3); “(ii) certification by an enrolled actuary of— “(I) the amount (as of the proposed termination date) of the current value of the assets of the plan, “(II) the actuarial present value (as of such date) of the benefit commitments under the plan, “(III) whether the plan is sufficient for benefit commitments as of such date, “(IV) the actuarial present value (as of such date) of benefits under the plan guaranteed under section 4022, and 29 USC 1322. “(V) whether the plan is sufficient for guaranteed benefits as of such date; “(iii) in any case in which the plan is not sufficient for benefit commitments as of such date— “(I) the name and address of each participant and beneficiary under the plan as of such date, and “(II) such other information as shall be prescribed by the corporation by regulation as necessary to enable the corporation (or its designee under section 4049(b)) to be able to make payments Post, p. 258. to participants and beneficiaries as required under section 4049; and “(iv) certification by the plan administrator that the information on which the enrolled actuary based the certifications under clause (ii) and the information provided to the corporation under clauses (i) and (iii) are accurate and complete. “(B) Determination by the corporation of necessary distress criteria.— Upon receipt of the notice of intent to terminate required under subsection (a)(2) and the information required under subparagraph (A), the corporation shall determine whether the requirements of this subparagraph are met as provided in clause (i), (ii), or (iii). The requirements of this subparagraph are met if each person who is (as of the termination date) a contributing sponsor of such plan or a substantial member of such sponsor’s controlled group meets the requirements of any of the following clauses: “(i) Liquidation in bankruptcy or insolvency proceedings.— The requirements of this clause are met by a person if— “(I) such person has filed or has had filed against such person, as of the termination date, a petition seeking liquidation in a case under title 11, United States Code, or under any similar law of a State or political subdivision of a State, and “(II) such case has not, as of the termination date, been dismissed. “(ii) Reorganization in bankruptcy or insolvency proceedings.— The requirements of this clause are met by a person if— “(I) such person has filed, or has had filed against such person, as of the termination date, a petition seeking reorganization in a case under title 11, United States Code, or under any similar law of a State or political subdivision of a State (or a case described in clause (i) filed by or against such person has been converted, as of such date, to such a case in which reorganization is sought), “(II) such case has not, as of the termination date, been dismissed, and “(III) the bankruptcy court (or other appropriate court in a case under such similar law of a State or political subdivision) approves the termination. “(iii) Termination required to enable payment of DEBTS WHILE STAYING IN BUSINESS OR TO AVOID UNREASONABLY BURDENSOME PENSION COSTS CAUSED BY declining workforce.— The requirements of this clause are met by a person if such person demonstrates to the satisfaction of the corporation that— “(I) unless a distress termination occurs, such person will be unable to pay such person’s debts when due and will be unable to continue in business, or “(II) the costs of providing pension coverage have become unreasonably burdensome to such person, solely as a result of a decline of such person’s workforce covered as participants under all single-employer plans of which such person is a contributing sponsor. “(C) Substantial member.— For purposes of subparagraph (B), the term ‘substantial member’ of a controlled group means a person whose assets comprise 5 percent or more of the total assets of the controlled group as a whole. “(D) Notification of determinations by the corporation.— The corporation shall notify the plan administrator as soon as practicable of its determinations made pursuant to subparagraph (B). “(3) Termination procedure.— “(A) Determinations by the corporation relating to PLAN SUFFICIENCY FOR GUARANTEED BENEFITS AND FOR BENEFIT commitments.— If the corporation determines that the requirements for a distress termination set forth in paragraphs (1) and (2) are met, the corporation shall— “(i) determine that the plan is sufficient for guaranteed benefits (as of the termination date) or that the corporation is unable to make such determination on the basis of information made available to the corporation, “(ii) determine that the plan is sufficient for benefit commitments (as of the termination date) or that the corporation is unable to make such determination on the basis of information made available to the corporation, and “(iii) notify the plan administrator of the determinations made pursuant to this subparagraph as soon as practicable. “(B) Implementation of termination.— After the corporation notifies the plan administrator of its determinations under subparagraph (A), the termination of the plan shall be carried out as soon as practicable, as provided in clause (i), (ii), or (iii). “(i) Cases of sufficiency for benefit commitments.— In any case in which the corporation determines that the plan is sufficient for benefit commitments, the plan administrator shall proceed to distribute the plan’s assets, and make certification to the corporation with respect to such distribution, in the manner described in subsection (b)(3), and shall take such other actions as may be appropriate to carry out the termination of the plan. “(ii) Cases of sufficiency for guaranteed benefits without a finding of sufficiency for benefit commitments.— In any case in which the corporation determines that the plan is sufficient for guaranteed benefits, but further determines that it is unable to determine that the plan is sufficient for benefit commitments on the basis of the information made available to it— “(I) the plan administrator shall proceed to distribute the plan’s assets in the manner described in subsection (b)(3), make certification to the corporation that the distribution has occurred, and take such actions as may be appropriate to carry out the termination of the plan, and “(II) the corporation shall establish a separate trust in connection with the plan for purposes of section 4049. Post, p. 258. “(iii) Cases without any finding of sufficiency.— In any case in which the corporation determines that it is unable to determine that the plan is sufficient for guaranteed benefits on the basis of the information made available to it— “(I) the corporation shall commence proceedings Post, p. 253, in accordance with section 4042, and “(II) the corporation shall establish a separate trust in connection with the plan for purposes of section 4049 unless the corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under section 4022. 29 USC 1322. “(C) Finding after authorized commencement of termination that plan is unable to pay benefits.— “(i) Finding with respect to benefit commitments WHICH ARE NOT GUARANTEED BENEFITS.— If, after the plan administrator has begun to terminate the plan as authorized under subparagraph (B)(i), the plan administrator finds that the plan is unable, or will be unable, to pay benefit commitments which are not benefits guaranteed by the corporation under section 4022, the plan administrator shall notify the corporation of such finding as soon as practicable thereafter. If the corporation concurs in the finding of the plan administrator (or the corporation itself makes such a finding) the corporation shall take the actions set forth in subparagraph (B)(ii)(II) relating to the trust established Post, p. 258. for purposes of section 4049. “(ii) Finding with respect to guaranteed benefits.— If, after the plan administrator has begun to terminate the plan as authorized by subparagraph (B) (i) or (ii), the plan administrator finds that the plan is unable, or will be unable, to pay all benefits under the plan which are guaranteed by the corporation under 29 USC 1322. section 4022, the plan administrator shall notify the corporation of such finding as soon as practicable thereafter. If the corporation concurs in the finding of the plan administrator (or the corporation itself makes such a finding), the corporation shall institute appropriate 29 USC 1342. proceedings under section 4042. “(D) Administration of the plan during interim period.— “(i) In general.— The plan administrator shall— “(I) meet the requirements of clause (ii) for the period commencing on the date on which the plan administrator provides a notice of distress termination to the corporation under subsection (a)(2) and ending on the date on which the plan administrator receives notification from the corporation of its determinations under subparagraph (A), and “(II) meet the requirements of clause (ii) commencing on the date on which the plan administrator or the corporation makes a finding under subparagraph (C)(ii). “(ii) Requirements.— The requirements of this clause are met by the plan administrator if the plan administrator— “(I) refrains from distributing assets or taking any other actions to carry out the proposed termination of this subsection, “(II) pays benefits attributable to employer contributions, other than death benefits, only in the form of an annuity, “(III) does not use plan assets to purchase irrevocable commitments to provide benefits from an insurer, and “(IV) continues to pay all benefit commitments under the plan, but, commencing on the proposed termination date, limits the payment of benefits under the plan to those benefits which are guaranteed by the corporation under section 4022 or to which assets are required to be allocated under section 4044. In the event the plan administrator is later determined not to have met the requirements for distress termination, any benefits which are not paid solely by reason of compliance with subclause (IV) shall be due and payable immediately (together with interest, at a reasonable rate, in accordance with regulations of the corporation).”. (b) Conforming Amendments.— Section 4041 (as amended by the preceding provisions of this title) is further amended— (1) by striking out subsection (e); and (2) by redesignating subsection (f) as subsection (e). SEC. 11010. TERMINATION PROCEEDINGS; DUTIES OF THE CORPORATION. (b) Establishment of Section 4049 Trust.— Section 4042 is further amended by adding at the end thereof the following new subsection: “(i) In any case in which a plan is terminated under this section in a termination proceeding initiated by the corporation pursuant to subsection (a), the corporation shall establish a separate trust in connection with the plan for purposes of section 4049, unless the Post, p. 258. corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under section 4022 or 29 USC 1322. that there is no amount of unfunded benefit commitments under the plan.”. (c) Conforming Amendment.— The heading for section 4042 is amended to read as follows: “institution of termination proceedings by the corporation”. SEC. 11011. AMENDMENTS TO LIABILITY PROVISIONS; LIABILITIES RELATING TO BENEFIT COMMITMENTS IN EXCESS OF BENEFITS GUARANTEED BY THE CORPORATION. (a) Liability for Distress Terminations and Terminations by the Corporation.— Section 4062 (29 U.S.C. 1362) is amended— (1) by redesignating subsection (e) as subsection (f); and (2) by striking out so much as precedes subsection (f) (as redesignated) and inserting in lieu thereof the following: “Sec. 4062. “liability for termination of single-employer plans under a distress termination or a termination by the corporation (a) In General.— In any case in which a single-employer plan is terminated in a distress termination under section Ante, p. 248. Ante, p. 253. 4041(c) or a termination otherwise instituted by the corporation under section 4042, any person who is, on the termination date, a contributing sponsor of the plan or a member of such a contributing sponsor’s controlled group shall incur liability under this section. The liability under this section of all such persons shall be joint and several. The liability under this section consists of— “(1) liability to the corporation, to the extent provided in subsection (b), “(2) liability to the trust established pursuant to section Ante, pp, 248, 253, 4041(c)(3)(B) (ii) or (iii) or section 4042(i), to the extent provided in subsection (c), and “(3) liability to the trustee appointed under subsection (b) or (c) of section 4042, to the extent provided in subsection (d). “(b) Liability to the Corporation.— “(1) Amount of liability.— “(A) In general.— Except as provided in subparagraph (B), the liability to the corporation of a person described in subsection (a) shall consist of the sum of— “(i) the lesser of— “(I) the total amount of unfunded guaranteed benefits (as of the termination date) of all participants and beneficiaries under the plan, or “(II) 30 percent of the collective net worth of all persons described in subsection (a), and “(ii) the excess (if any) of— “(I) 75 percent of the amount described in clause (i)(I), over “(II) the amount described in clause (i)(II), together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation. “(B) Special rule in case of subsequent insufficiency.— For purposes of subparagraph (A), in any case described in section 4041(c)(3)(C)(ii), actuarial present values shall be determined as of the date of the notice to the corporation (or the finding by the corporation) described in such section. “(2) Payment of liability.— “(A) In general.— Except as provided in subparagraph (B), the liability to the corporation under this subsection shall be due and payable to the corporation as of the termination date, in cash or securities acceptable to the corporation. “(B) Special rule.— Payment of the liability under paragraph (1)(A)(ii) shall be made under commercially reasonable terms prescribed by the corporation. The parties involved shall make a reasonable effort to reach agreement on such commercially reasonable terms. Any such terms prescribed by the corporation shall provide for deferral of 50 percent of any amount of liability otherwise payable for any year under this subparagraph if a person subject to such liability demonstrates to the satisfaction of the corporation that no person subject to such liability has any individual pretax profits for such person’s fiscal year ending during such year. “(3) Alternative arrangements.— The corporation and any person liable under this section may agree to alternative arrangements for the satisfaction of liability to the corporation under this subsection. “(c) Liability to Section 4049 Trust.— “(1) Amount of liability.— “(A) In general.— In any case in which there is an outstanding amount of benefit commitments under a plan terminated under section 4041(c) or 4042, a person described Ante, pp. 248, 253. in subsection (a) shall be subject to liability under this subsection to the trust established under section 4041(c)(3)(B) (ii) or (iii) or section 4042(i) in connection with the terminated plan. Except as provided in subparagraph (B), the liability of such person under this subsection shall consist of the lesser of— “(i) 75 percent of the total outstanding amount of benefit commitments under the plan, or “(ii) 15 percent of the actuarial present value (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of section 4044) of all benefit commitments under the 29 USC 1344. plan. “(B) Special rule in case of subsequent insufficiency.— For purposes of subparagraph (A)— “(i) Plans insufficient for guaranteed benefits.— In any case described in section 4041(c)(3)(C)(ii), actuarial present values shall be determined as of the date of the notice to the corporation (or the finding by the corporation) described in such section. “(ii) Plans sufficient for guaranteed benefits but insufficient for benefit entitlements.— In any case described in section 4041(c)(3)(C)(i) but not described in section 4041(c)(3)(C)(ii), actuarial present values shall be determined as of the date on which the final distribution of assets is completed. “(2) Payment of Liability.— “(A) General rule.— Except as otherwise provided in this paragraph, payment of a person’s liability under this subsection shall be made for liability payment years under commercially reasonable terms prescribed by the fiduciary designated by the corporation pursuant to section 4049(b)(1)(A). Such fiduciary and the liable persons assessed Post, p. 258. liability under this subsection shall make a reasonable effort to reach agreement on such commercially reasonable terms. “(B) Special rule for plans with low amounts of liability.— In any case in which the amount described in paragraph (1)(A) is less than $100,000, the requirements of subparagraph (A) may be satisfied by payment of such liability over 10 liability payment years in equal annual installments (with interest at the rate determined under section 6621(b) of the Internal Revenue Code of 1954). The 26 USC 6621. corporation may, by regulation, increase the dollar amount referred to in this subparagraph as it determines appropriate, taking into account reasonable administrative costs Ante, p. 248. Ante, p. 253. of trusts established under section 4041(c)(3)(B) (ii) or (iii) or section 4042(i). “(C) Deferral of payments.— The terms for payment provided for under subparagraph (A) or (B) shall also provide for deferral of 75 percent of any amount of liability otherwise payable for any liability payment year if a person subject to such liability demonstrates to the satisfaction of the corporation that no person subject to such liability has any individual pretax profits for such person’s fiscal year ending during such year. The amount of liability so deferred is payable only after payment in full of any amount of liability under subsection (b) in connection with the termination of the same plan which has been deferred pursuant to terms provided for under subsection (b)(2)(B). “(d) Liability to Section 4042 Trustee.— A person described in subsection (a) shall be subject to liability under this subsection to the trustee appointed under subsection (b) or (c) of section 4042. The liability of such person under this subsection shall consist of— “(1) the outstanding balance of the accumulated funding deficiencies 29 USC 1082. 26 USC 412. (within the meaning of section 302(a)(2) of this Act and section 412(a) of the Internal Revenue Code of 1954) of the plan (if any) (which, for purposes of this subparagraph, shall include the amount of any increase in such accumulated funding deficiencies of the plan which would result if all pending applications for waivers of the minimum funding standard under 29 USC 1083. 29 USC 1084. section 303 of this Act or section 412(d) of such Code and for extensions of the amortization period under section 304 of this Act or section 412(e) of such Code with respect to such plan were denied and if no additional contributions (other than those already made by the termination date) were made for the plan year in which the termination date occurs or for any previous plan year), “(2) the outstanding balance of the amount of waived funding deficiencies of the plan waived before such date under section 303 of this Act or section 412(d) of such Code (if any), and “(3) the outstanding balance of the amount of decreases in the minimum funding standard allowed before such date under section 304 of this Act or section 412(e) of such Code (if any), together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation. The liability under this subsection shall be due and payable to such trustee as of the termination date, in cash or securities acceptable to such trustee. “(e) Definitions.— “(1) Collective net worth of persons subject to liability.— “(A) In general.— The collective net worth of persons subject to liability in connection with a plan termination consists of the sum of the individual net worths of all persons who— “(i) have individual net worths which are greater than zero, and “(ii) are (as of the termination date) contributing sponsors of the terminated plan or members of their controlled groups. “(B) Determination of net worth.— For purposes of this paragraph, the net worth of a person is— “(i) determined on whatever basis best reflects, in the determination of the corporation, the current status of the person’s operations and prospects at the time chosen for determining the net worth of the person, and “(ii) increased by the amount of any transfers of assets made by the person which are determined by the corporation to be improper under the circumstances, including any such transfers which would be inappropriate under title 11, United States Code, if the person were a debtor in a case under chapter 7 of such title. 11 USC 701 et seq. “(C) Timing of determination.— For purposes of this paragraph, determinations of net worth shall be made as of a day chosen by the corporation (during the 120-day period ending with the termination date) and shall be computed without regard to any liability under this section. “(2) Pretax profits.— The term ‘pretax profits’ means— “(A) except as provided in subparagraph (B), for any fiscal year of any person, such person’s consolidated net income (excluding any extraordinary charges to income and including any extraordinary credits to income) for such fiscal year, as shown on audited financial statements prepared in accordance with generally accepted accounting principles, or “(B) for any fiscal year of an organization described in section 501(c) of the Internal Revenue Code of 1954, the 26 USC 501. excess of income over expenses (as such terms are defined for such organizations under generally accepted accounting principles), before provision for or deduction of Federal or other income tax, any contribution to any single-employer plan of which such person is a contributing sponsor at any time during the period beginning on the termination date and ending with the end of such fiscal year, and any amounts required to be paid for such fiscal year under this section. The corporation may by regulation require such information to be filed on such forms as may be necessary to determine the existence and amount of such pretax profits. “(3) Liability payment years.— The liability payment years in connection with a terminated plan consist of the consecutive one-year periods following the last plan year preceding the termination date, excluding the first such year in any case in which the first such year ends less than 180 days after the termination date.”. (b) Clerical Amendment.— Subsection (f) of section 4062 (as redesignated 42 USC 1362. by subsection (a)(1)) is amended by inserting “Treatment of Substantial Cessation of Operations.—” after “(f)”. (c) Amendments to the Internal Revenue Code of 1954.— (1) Time for deduction of certain employer liability payments.— Paragraph (3) of section 404(g) of the Internal Revenue Code of 1954 (relating to certain employer liability payments 26 USC 404. considered as contributions) is amended to read as follows: “(3) Timing of deduction of contributions.— “(A) In general.— Except as otherwise provided in this paragraph, any payment described in paragraph (1) shall (subject to the last sentence of subsection (a)(1)(A)) be deductible under this section when paid. “(B) Contributions under standard terminations.— Subparagraph (A) shall not apply (and subsection (a)(1)(A) shall apply) to any payments described in paragraph (1) which are paid to terminate a plan under section 4041(b) of Ante, p. 244. the Employee Retirement Income Security Act of 1974 to the extent such payments result in the assets of the plan being in excess of the total amount of benefits under such plan which are guaranteed by the Pension Benefit Guaranty 29 USC 1322. Corporation under section 4022 of such Act. “(C) Contributions to certain trusts.— Subparagraph (A) shall not apply to any payment described in paragraph 29 USC 1362. (1) which is made under section 4062(c) of such Act and such payment shall be deductible at such time as may be prescribed in regulations which are based on principles similar to the principles of subsection (a)(1)(A).”. (2) References to erisa.— Subsection (g) of section 404 of the 26 USC 404; ante, p. 257. Internal Revenue Code of 1954 is amended by adding at the end thereof the following new paragraph: “(4) References to employee retirement income security act of 1974.— For purposes of this subsection, any reference to a section of the Employee Retirement Income Security Act of 1974 shall be treated as a reference to such section as in effect on the date of the enactment of the Single-Employer Pension Plan Ante, p. 237. Amendments Act of 1986.”. (3) Effective date.— The amendments made by this subsection shall apply to payments made after January 1, 1986, in taxable years ending after such date. SEC. 11012. DISTRIBUTION TO PARTICIPANTS AND BENEFICIARIES OF LIABILITY PAYMENTS TO SECTION 4049 TRUST. (a) In General.— Subtitle C of title IV is amended by adding at the end thereof the following new section: “Sec. 4049. “distribution to participants and beneficiaries of liability payments to section 4049 trust (a) Trust Requirements.— The requirements of this section apply to a trust established by the corporation in connection Ante, p. 248. with a terminated plan pursuant to section 4041(c)(3)(B) (ii) or (iii). The trust shall be used exclusively for— “(1) receiving liability payments under section 4062(c) from the persons who were (as of the termination date) contributing sponsors of the terminated plan and members of their controlled groups, “(2) making distributions as provided in this section to the persons who were (as of the termination date) participants and beneficiaries under the terminated plan, and “(3) defraying the reasonable administrative expenses incurred in carrying out responsibilities under this section. The trust shall be maintained for such period of time as is necessary to receive all liability payments required to be made to the trust under section 4062(c) with respect to the terminated plan and to make all distributions required to be made to participants and beneficiaries under this section with respect to the terminated plan. “(b) Designation of Fiduciary by the Corporation.— “(1) Purposes for designation of fiduciary.— “(A) Collection of liability.— The corporation shall designate a fiduciary (within the meaning of section 3(21)) to 29 USC 1002. serve as trustee of the trust for purposes of conducting negotiations and assessing and collecting liability pursuant to section 4062(c). 29 USC 1362. “(B) Administration of trust.— “(i) Corporation’s functions.— Except as provided in clause (ii), the corporation shall serve as trustee of the trust for purposes of administering the trust, including making distributions from the trust to participants and beneficiaries. “(ii) Designation of fiduciary if cost-effective.— If the corporation determines that it would be cost-effective to do so, it may designate a fiduciary (within the meaning of section 3(21)), including the fiduciary designated under subparagraph (A), to perform the functions described in clause (i). “(2) Fiduciary requirements.— A fiduciary designated under paragraph (1) shall be— “(A) independent of each contributing sponsor of the plan and the members of such sponsor’s controlled group, and “(B) subject to the requirements of part 4 of subtitle B of title I (other than section 406(a)) as if such trust were a plan 29 USC 1101, 1106. subject to such part. “(c) Distributions From Trust.— “(1) In general.— Not later than 30 days after the end of each liability payment year (described in section 4062(e)(3)) with 29 USC 1362. respect to a terminated single-employer plan, the corporation, or its designee under subsection (b), shall distribute from the trust maintained pursuant to subsection (a) to each person who was (as of the termination date) a participant or beneficiary under the plan— “(A) in any case not described in subparagraph (B), an amount equal to the outstanding amount of benefit commitments to such person under the plan (including interest calculated from the termination date), to the extent not previously paid under this paragraph, or “(B) in any case in which the balance in the trust at the end of such year which is in cash or may be prudently converted to cash (after taking into account liability payments received under subsection (a)(1) and administrative expenses paid under subsection (a)(3)) is less than the total of all amounts described in subparagraph (A) in connection with all persons who were (as of the termination date) participants and beneficiaries under the terminated plan, the product derived by multiplying— “(i) the amount described in subparagraph (A) in connection with each such person, by “(ii) a fraction— “(I) the numerator of which is such balance in the trust, and “(II) the denominator of which is equal to the total of all amounts described in subparagraph (A) in connection with all persons who were (as of the termination date) participants and beneficiaries under the terminated plan. “(2) Carry-over of minimal payment amounts.— The corporation, or its designee under subsection (bl, may withhold a payment to any person under this subsection in connection with any liability payment year (other than the last liability payment year with respect to which payments under paragraph (1) are payable) if such payment does not exceed $100. In any case in which such a payment is so withheld, the payment to such person in connection with the next following liability payment year shall be increased by the amount of such withheld payment. “(d) Regulations.— The corporation may issue such regulations as it considers necessary to carry out the purposes of this section.”. (b) Tax-Exempt Status for Trusts Described in Section 4049 of ERISA.— Subsection (c) of section 501 of the Internal Revenue Code 26 USC 501. of 1954 (relating to list of tax-exempt organizations) is amended by adding at the end thereof the following new paragraph: “(24) A trust described in section 4049 of the Employee Retirement Ante, p. 258. Income Security Act of 1974 (as in effect on the date of the enactment of the Single-Employer Pension Plan Amendments Ante, p. 237. Act of 1986).”. (c) Rollovers of Payments From Trust Allowed.— Paragraph 26 USC 402. (6) of section 402(a) of such Code (relating to special rollover rules) is amended by adding at the end thereof the following new subparagraph: “(G) Payments from certain pension plan termination trusts.— If— “(i) any amount is paid or distributed to a recipient from a trust described in section 501(c)(24), “(ii) the recipient transfers any portion of the property received in such distribution to an eligible retirement plan described in subclause (I) or (II) of paragraph (5)(E)(iv), and “(iii) in the case of a distribution of property other than money, the amount so transferred consists of the property distributed, then the portion of the distribution so transferred shall be treated as a distribution described in paragraph (5)(A).”. (d) Special Delayed Payment Rule.— In the case of a distress termination under section 4041(c) of the Employee Retirement Income Security Act of 1974 (as amended by section 11009) pursuant to a notice of intent to terminate filed before January 1, 1987, no payment of liability otherwise payable as provided in section 29 USC 1362. 4062(c)(2)(B) of such Act (as amended by this section) shall be required to be made before January 1, 1989. SEC. 11013. TREATMENT OF TRANSACTIONS TO EVADE LIABILITY; EFFECT OF CORPORATE REORGANIZATION. (a) In General.— Subtitle D of title IV is amended by adding at the end thereof the following new section: “Sec. 4069. “treatment of transactions to evade liability; effect of corporate reorganization (a) Treatment of Transactions to Evade Liability.— If a principal purpose of any person in entering into any transaction is to evade liability to which such person would be subject under this subtitle and the transaction becomes effective within five years before the termination date of the termination on which such liability would be based, then such person and the members of such person’s controlled group (determined as of the termination date) shall be subject to liability under this subtitle in connection with such termination as if such person were a contributing sponsor of the terminated plan as of the termination date. This subsection shall not cause any person to be liable under this subtitle in connection with such plan termination for any increases or improvements in the benefits provided under the plan which are adopted after the date on which the transaction referred to in the preceding sentence becomes effective. “(b) Effect of Corporate Reorganization.— For purposes of this subtitle, the following rules apply in the case of certain corporate reorganizations: “(1) Change of identity, form, etc.— If a person ceases to exist by reason of a reorganization which involves a mere change in identity, form, or place of organization, however effected, a successor corporation resulting from such reorganization shall be treated as the person to whom this subtitle applies. “(2) Liquidation into parent corporation.— If a person ceases to exist by reason of liquidation into a parent corporation, the parent corporation shall be treated as the person to whom this subtitle applies. “(3) Merger, consolidation, or division.— If a person ceases to exist by reason of a merger, consolidation, or division, the successor corporation or corporations shall be treated as the person to whom this subtitle applies.”. (b) Effective Date.— Section 4069(a) of the Employee Retirement Income Security Act of 1974 (as added by subsection (a)) shall apply 29 USC 1369 note. with respect to transactions becoming effective on or after January 1, 1986. SEC. 11014. ENFORCEMENT AUTHORITY RELATING TO TERMINATIONS OF SINGLE-EMPLOYER PLANS. (a) Private Rights of Action—Subtitle D of title IV (as amended by section 11013) is further amended by adding at the end thereof the following new section: “Sec. 4070. “enforcement authority relating to terminations of single-employer plans (a) In General.— Any person who is with respect to a 29 USC 1370. single-employer plan a fiduciary, contributing sponsor, member of a contributing sponsor’s controlled group, participant, or beneficiary, and is adversely affected by an act or practice of any party (other than the corporation) in violation of any provision of section 4041, 4042, 4049, 4062, 4063, 4064, or 4069, or who is an employee organization Ante, pp. 244, 253, 258. 29 USC 1362–1364. Ante, p. 260. representing such a participant or beneficiary so adversely affected for purposes of collective bargaining with respect to such plan, may bring an action— “(1) to enjoin such act or practice, or “(2) to obtain other appropriate equitable relief (A) to redress such violation or (B) to enforce such provision. “(b) Status of Plan as Party to Action and With Respect to Legal Process.— A single-employer plan may be sued under this section as an entity. Service of summons, subpoena, or other legal process of a court upon a trustee or an administrator of a single-employer plan in such trustee’s or administrator’s capacity as such shall constitute service upon the plan. If a plan has not designated in the summary plan description of the plan an individual as agent for the service of legal process, service upon any contributing sponsor of the plan shall constitute such service. Any money judgment under this section against a single-employer plan shall be enforceable only against the plan as an entity and shall not be enforceable against any other person unless liability against such person is established in such person’s individual capacity. “(c) Jurisdiction and Venue.— The district courts of the United States shall have exclusive jurisdiction of civil actions under this section. Such actions may be brought in the district where the plan is administered, where the violation took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found. The district courts of the United States shall have jurisdiction, without regard to the amount in controversy or the citizenship of the parties, to grant the relief provided for in subsection (a) in any action. “(d) Right of Corporation to Intervene.— A copy of the complaint or notice of appeal in any action under this section shall be served upon the corporation by certified mail. The corporation shall have the right in its discretion to intervene in any action. “(e) Awards of Costs and Expenses.— “(1) General rule.— In any action brought under this section, the court in its discretion may award all or a portion of the costs and expenses incurred in connection with such action, including reasonable attorney’s fees, to any party who prevails or substantially prevails in such action. “(2) Exemption for plans.— Notwithstanding the preceding provisions of this subsection, no plan shall be required in any action to pay any costs and expenses (including attorney’s fees). “(f) Limitation on Actions.— “(1) In general.— Except as provided in paragraph (3), an action under this section may not be brought after the later of— “(A) 6 years after the date on which the cause of action arose, or “(B) 3 years after the applicable date specified in paragraph (2). “(2) Applicable date.— “(A) General rule.— Except as provided in subparagraph (B), the applicable date specified in this paragraph is the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action. “(B) Special rule for plaintiffs who are fiduciaries.— In the case of a plaintiff who is a fiduciary bringing the action in the exercise of fiduciary duties, the applicable date specified in this paragraph is the date on which the plaintiff became a fiduciary with respect to the plan if such date is later than the date described in subparagraph (A). “(3) Cases of fraud or concealment.— In the case of fraud or concealment, the period described in paragraph (1)(B) shall be extended to 6 years after the applicable date specified in paragraph (2).”, (b) Civil Actions Involving the Pension Benefit Guaranty Corporation.— (1) Actions against the corporation.— Section 4003(f) (29 U.S.C. 1303(f)) is amended to read as follows: “(f) (1) Except with respect to withdrawal liability disputes under part 1 of subtitle E, any person who is a fiduciary, employer, contributing sponsor, member of a contributing sponsor’s controlled group, participant, or beneficiary, and is adversely affected by any action of the corporation with respect to a plan in which such person has an interest, or who is an employee organization representing such a participant or beneficiary so adversely affected for purposes of collective bargaining with respect to such plan, may bring an action against the corporation for appropriate equitable relief in the appropriate court. “(2) For purposes of this subsection, the term ‘appropriate court’ means— “(A) the United States district court before which proceedings under section 4041 or 4042 are being conducted, “(B) if no such proceedings are being conducted, the United Ante, pp. 244, 253. States district court for the judicial district in which the plan has its principal office, or “(C) the United States District Court for the District of Columbia. “(3) In any action brought under this subsection, the court may award all or a portion of the costs and expenses incurred in connection with such action to any party who prevails or substantially prevails in such action. “(4) This subsection shall be the exclusive means for bringing actions against the corporation under this title, including actions against the corporation in its capacity as a trustee under section 4042 or 4049. Ante, p. 258. “(5) (A) Except as provided in subparagraph (C), an action under this subsection may not be brought after the later of— “(i) 6 years after the date on which the cause of action arose, or “(ii) 3 years after the applicable date specified in subparagraph (B). “(B) (i) Except as provided in clause (ii), the applicable date specified in this subparagraph is the earliest date on which the plaintiff acquired or should have acquired actual knowledge of the existence of such cause of action. “(ii) In the case of a plaintiff who is a fiduciary bringing the action in the exercise of fiduciary duties, the applicable date specified in this subparagraph is the date on which the plaintiff became a fiduciary with respect to the plan if such date is later than the date specified in clause (i). “(C) In the case of fraud or concealment, the period described in subparagraph (A)(ii) shall be extended to 6 years after the applicable date specified in subparagraph (B). “(6) The district courts of the United States have jurisdiction of actions brought under this subsection without regard to the amount in controversy. “(7) In any suit, action, or proceeding in which the corporation is a party, or intervenes under section 4301, in any State court, the 29 USC 1451. corporation may, without bond or security, remove such suit, action, or proceeding from the State court to the United States district court for the district or division in which such suit, action, or proceeding is pending by following any procedure for removal now or hereafter in effect.“. (2) Limitation on actions by the corporation.— Section 4003(e) (29 U.S.C. 1303(e)) is amended by adding at the end thereof the following new paragraph: “(6) (A) Except as provided in subparagraph (C), an action under this subsection may not be brought after the later of— “(i) 6 years after the date on which the cause of action arose, or “(ii) 3 years after the applicable date specified in subparagraph (Bi. “(B) (i) Except as provided in clause (ii), the applicable date specified in this subparagraph is the earliest date on which the corporation acquired or should have acquired actual knowledge of the existence of such cause of action. “(ii) If the corporation brings the action as a trustee, the applicable date specified in this subparagraph is the date on which the corporation became a trustee with respect to the plan if such date is later than the date described in clause (i). “(C) In the case of fraud or concealment, the period described in subparagraph (A)(ii) shall be extended to 6 years after the applicable date specified in subparagraph (B).”. (3) Effective date.— The amendments made by this subsection shall apply with respect to actions filed after the date of the enactment of this Act. SEC. 11015. PROVISIONS RELATING TO WAIVERS OF MINIMUM FUNDING STANDARD AND EXTENSIONS OF AMORTIZATION PERIOD. (a) Security For Waivers.— (1) ERISA amendment.— (A) In general.— Part 3 of subtitle B of title I is amended— (i) by redesignating section 306 (29 U.S.C. 1086) as section 307; and (ii) by inserting after section 305 (29 U.S.C. 1085) the following new section: “Sec. 306. “security for waivers of minimum funding standard and extensions of amortization period (a) Security May Be Required.— “(1) In general.— Except as provided in subsection (c), the Secretary of the Treasury may require an employer maintaining a defined benefit plan which is a single-employer plan 29 USC 1301. (within the meaning of section 4001(a)(15)) to provide security to such plan as a condition for granting or modifying a waiver under section 303 or an extension 29 USC 1083, 1084. under section 304. “(2) Special rules.— Any security provided under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation or, at the direction of the Corporation, by a contributing sponsor (within the meaning of section 4001(a)(13)) or a member of such sponsor’s controlled group (within the meaning of section 4001(a)(14)). “(b) Consultation With the Pension Benefit Guaranty Corporation.— Except as provided in subsection (c), the Secretary of the Treasury shall, before granting or modifying a waiver under section 303 or an extension under section 304 with respect to a plan described in subsection (a)(1)— “(1) provide the Pension Benefit Guaranty Corporation with— “(A) notice of the completed application for any waiver, extension, or modification, and “(B) an opportunity to comment on such application within 30 days after receipt of such notice, and “(2) consider— “(A) any comments of the Corporation under paragraph (1)(B), and “(B) any views of any employee organization representing participants in the plan which are submitted in writing to the Secretary of the Treasury in connection with such application. Information provided to the corporation under this subsection shall be considered tax return information and subject to the safeguarding and reporting requirements of section 6103(p) of the Internal Revenue Code of 1954. 26 USC 6103. “(c) Exception for Certain Waivers and Extensions.— “(1) In general.— The preceding provisions of this section shall not apply to any plan with respect to which the sum of— “(A) the outstanding balance of the accumulated funding deficiencies (within the meaning of section 302(a)(2) of this Act and section 412(a) of the Internal Revenue Code of 1954) 29 USC 1082. 26 USC 412. of the plan, “(B) the outstanding balance of the amount of waived funding deficiencies of the plan waived under section 303 of this Act or section 412(d) of such Code, and “(C) the outstanding balance of the amount of decreases in the minimum funding standard allowed under section 304 of this Act or section 412(e) of such Code, 29 USC 1084. is less than $2,000,000. “(2) Accumulated funding deficiencies.— For purposes of paragraph (1)(A), accumulated funding deficiencies shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under section 303 of this Act or section 412(d) of the Internal Revenue 29 USC 1083. Code of 1954 and for extensions of the amortization period under section 304 of this Act or section 412(e) of such Code which are pending with respect to such plan were denied.”. (B) Conforming amendment.— Section 211(c)(1) is 29 USC 1061. amended by striking out “306(c)” and inserting in lieu thereof “307(c)”. (C) Clerical amendment.— The table of sections in section 1 is amended by striking out the item relating to section 306 and inserting in lieu thereof the following new items: “Sec. 306. Security for waivers of minimum funding standard and extensions of amortization period. “Sec. 307. Effective dates.” (2) Amendments to the internal revenue code of 1954.— (A) In general.— Subsection (f) of section 412 of the Internal Revenue Code of 1954 (relating to requirement 26 USC 412. that benefits may not be increased during waiver or extension period) is amended by adding at the end thereof the following new paragraph: “(3) Security for waivers and extensions; consultations.— “(A) Security may be required.— “(i) In general.— Except as provided in subparagraph (C), the Secretary may require an employer maintaining a defined benefit plan which is a single-employer plan (within the meaning of section 4001(a)(15) of the Employee Retirement Income Security 29 USC 1301. Act of 1974) to provide security to such plan as a condition for granting or modifying a waiver under subsection (d) or an extension under subsection (e). “(ii) Special rules.— Any security provided under clause (i) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Corporation, by a contributing sponsor Ante, p. 238. (within the meaning of section 4001(a)(13) of such Act), or a member of such sponsor’s controlled group (within Ante, p. 238. the meaning of section 4001(a)(14) of such Act). “(B) Consultation with the pension benefit guaranty corporation.— Except as provided in subparagraph (C), the Secretary shall, before granting or modifying a waiver under subsection (d) or an extension under subsection (e) with respect to a plan described in subparagraph (A)(i)— “(i) provide the Pension Benefit Guaranty Corporation with— “(I) notice of the completed application for any waiver, extension, or modification, and “(II) an opportunity to comment on such application within 30 days after receipt of such notice, and “(ii) consider— “(I) any comments of the Corporation under clause (i)(II), and “(II) any views of any employee organization (within the meaning of section 3(4) of the Employee 29 USC 1002. Retirement Income Security Act of 1974) representing participants in the plan which are submitted in writing to the Secretary in connection with such application. Information provided to the corporation under this subparagraph shall be considered tax return information and subject to the safeguarding and reporting requirements 26 USC 6103. of section 6103(p). “(C) Exception for certain waivers and extensions.— “(i) In general.— The preceding provisions of this paragraph shall not apply to any plan with respect to which the sum of— “(I) the outstanding balance of the accumulated funding deficiencies (within the meaning of subsection 29 USC 1082. (a) and section 302(a) of such Act) of the plan, “(II) the outstanding balance of the amount of waived funding deficiencies of the plan waived 29 USC 1083. under subsection (d) or section 303 of such Act, and “(III) the outstanding balance of the amount of decreases in the minimum funding standard allowed under subsection (e) or section 304 of such 29 USC 1084. Act is less than $2,000,000. “(ii) Accumulated funding deficiencies.— For purposes of clause (i)(I), accumulated funding deficiencies shall include any increase in such amount which would result if all applications for waivers of the minimum funding standard under subsection (d) or section 303 of such Act and for extensions of the amortization period 29 USC 1083. 29 USC 1084. under subsection (e) or section 304 of such Act which are pending with respect to such plan were denied.”. (B) Conforming amendments.— Section 412(f) of the Internal Revenue Code of 1954 is amended— 26 USC 412. (i) by striking out the heading thereof and inserting in lieu thereof: “(f) Requirements Relating to Waivers and Extensions.—”, and (ii) by striking out the heading of paragraph (1) thereof and inserting in lieu thereof: “(1) Benefits may not be increased during waiver or extension period.—”, (3) Effective dates.— The amendments made by this subsection 29 USC 1085a note. shall apply with respect to applications for waivers, extensions, and modifications filed on or after the date of the enactment of this Act. (b) Applicable Interest Rate Under Arrangements Providing for Waivers and Extensions— (1) Amendments to erisa.— (A) Variances from the minimum funding standard.— Section 303(a) (29 U.S.C. 1083(a)) is amended by adding at the end thereof the following new sentence: “The interest rate used for purposes of computing the amortization charge described in section 302(b)(2)(C) for a variance 29 USC 1082. granted under this subsection shall be the rate determined under section 6621(b) of the Internal Revenue Code of 1954.”. 26 USC 6621. (B) Extensions of the amortization period.— Section 304(a) (29 U.S.C. 1084(a)) is amended by adding after and below paragraph (2) the following new sentence: “The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b) of the Internal Revenue Code of 1954.”, (2) Amendments to internal revenue code.— (A) Variances from the minimum funding standard.— Paragraph (1) of section 412(d) of the Internal Revenue Code of 1954 (relating to waivers in case of substantial business 26 USC 412. hardship) is amended by adding at the end thereof the following new sentence: “The interest rate used for purposes of computing the amortization charge described in section 412(b)(2)(C) for a variance granted under this subsection shall be the rate determined under section 6621(b).”. (B) Extensions of the amortization period.— Subsection (e) of section 412 of such Code (relating to extension of amortization period) is amended by adding after and below paragraph (2) the following new sentence: “The interest rate applicable under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the rate determined under section 6621(b).”. SEC. 11016. CONFORMING, CLARIFYING, TECHNICAL, AND MISCELLANEOUS AMENDMENTS. (a) Conforming Amendments Relating to Plan Terminations— (1) Estimated benefits for certain single-employer plans.— Section 4005(b)(2) (29 U.S.C. 1305(b)(2)) is amended— (A) by striking out “and” at the end of subparagraph (C); (B) by striking out the period at the end of subparagraph (D) and inserting in lieu thereof “, and”; and (C) by adding at the end thereof the following: “(E) to pay to participants and beneficiaries the estimated amount of benefits which are guaranteed by the corporation under this title and the estimated amount of other benefits to 29 USC 1344. which plan assets are allocated under section 4044, under single-employer plans which are unable to pay benefits when due or which are abandoned.”. (2) Credits to revolving fund.— Section 4005(b)(1) (29 U.S.C. 1305(b)(1)) is amended— (A) by striking out “and” at the end of subparagraph (E); (B) by redesignating subparagraph (F) as subparagraph (G); and (C) by inserting after subparagraph (E) the following new subparagraph: “(F) attorney’s fees awarded to the corporation, and”. (3) Restoration of plans.— Section 4047 (29 U.S.C. 1347) is amended— (A) in the first sentence, by inserting “under section 4041 or 4042” after “terminated” each place it appears; and (B) in the second sentence, by striking out “section 4042” and inserting in lieu thereof “section 4041 or 4042”. (4) Termination date.— Section 4048(a) (29 U.S.C. 1348(a)) is amended— (A) by striking out “date of termination” and inserting in lieu thereof “termination date”; (B) by redesignating paragraphs (1) through (3) as paragraphs (2) through (4), respectively; (C) in paragraph (2) (as redesignated), by inserting “in a distress termination” after “terminated” and by striking out “section 4041” and inserting in lieu thereof “section 4041(c)”; (D) by inserting before paragraph (2) (as redesignated) the following new paragraph: “(1) in the case of a plan terminated in a standard termination in accordance with the provisions of section 4041(b), the termination date proposed in the notice provided under section 4041(a)(2),”; and (E) in paragraph (4) (as redesignated), by striking out “in accordance with the provisions of either section” and inserting in lieu thereof “under section 4041(c) or 4042”. (5) Conforming amendments to special liability rules relating to certain single-employer plans under multiple controlled groups— (A) Liability of substantial employer for withdrawal.— (i) Section 4063(a) (29 U.S.C. 1363(a)) is amended— (I) by striking out “plan under which more than one employer makes contributions (other than a multiemployer plan)” and inserting in lieu thereof “single-employer plan which has two or more contributing sponsors at least two of whom are not under common control”; (II) in paragraph (1), by striking out “withdrawal of a substantial employer” and inserting in lieu thereof “withdrawal during a plan year of a substantial employer for such plan year”; (III) in paragraph (2), by striking out “of such employer” and all that follows and inserting in lieu thereof “of all persons with respect to the withdrawal of the substantial employer.”; (IV) by striking out “whether such employer is liable for any amount under this subtitle with respect to the withdrawal” and inserting in lieu thereof “whether there is liability resulting from the withdrawal of the substantial employer”; and (V) by striking out “notify such employer” and inserting in lieu thereof “notify the liable persons”. (ii) Section 4063(b) (29 U.S.C. 1363(b)) is amended— (I) by striking out “an employer” and all that follows down through “shall be liable” and inserting in lieu thereof “any one or more contributing sponsors who withdraw, during a plan year for which they constitute a substantial employer, from a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control, shall, upon notification of such contributing sponsors by the corporation as provided by subsection (a), be liable, together with the members of their controlled groups,”; (II) by striking out “such employer’s”; (III) by striking out “the employer’s withdrawal” and inserting in lieu thereof “the withdrawal referred to in subsection (a)(1)”; (IV) in paragraph (1), by striking out “such employer” and inserting in lieu thereof “such contributing sponsors”; (V) in paragraph (2), by striking out “all employers” and inserting in lieu thereof “all contributing sponsors”; and (VI) by striking out “the liability of each such employer” and inserting in lieu thereof “such liability”. (iii) Section 4063(c) (29 U.S.C. 1363(c)) is amended— (I) in paragraph (1), by striking out “In lieu of payment of his liability under this section the employer” and inserting in lieu thereof “In lieu of payment of a contributing sponsor’s liability under this section, the contributing sponsor”; (II) in paragraph (2), by inserting “under section 4041(c) or 4042” after “terminated”, by striking out “of such employer”, and by striking out “to the employer (or his bond cancelled)” and inserting in lieu thereof “(or the bond cancelled)”; and (III) in paragraph (3), by inserting “under section 4041(c) or 4042” after “terminates” and by striking out “employer” in subparagraph (C) and inserting in lieu thereof “contributing sponsor”. (iv) Section 4063(d) (29 U.S.C. 1363(d)) is amended— (I) by striking out “Upon a showing by the plan administrator of a plan (other than a multiemployer plan) that the withdrawal from the plan by any employer or employers has resulted” and inserting in lieu thereof “Upon a showing by the plan administrator of the plan that the withdrawal from the plan by one or more contributing sponsors has resulted”; (II) by striking out “by employers”; (III) in paragraph (1), by striking out “their employer’s” and inserting in lieu thereof “the”; and (IV) in paragraph (2), by striking out “termination” and inserting in lieu thereof “plan terminated under section 4042”. (v) Section 4063(e) (29 U.S.C. 1363(e)) is amended— (I) by striking out “to any employer or plan administrator”; and (II) by striking out “al! other employers” and inserting in lieu thereof “contributing sponsors”. (vi) The heading for section 4063 is amended by adding at the end thereof the following “from single-employer plans under multiple controlled groups.”. (B) Allocation of liability upon termination of certain SINGLE-EMPLOYER PLANS.— (i) Section 4064(a) (29 U.S.C. 1364(a)) is amended— (I) by striking out “all employers who maintain a plan under which more than one employer makes contributions (other than a multiemployer plan)” and inserting in lieu thereof “all contributing sponsors of a single-employer plan which has two or more contributing sponsors at least two of whom are not under common control”; and (II) by inserting “under section 4041(c) or 4042” after “terminated”. (ii) Section 4064(b) (29 U.S.C. 1364(b)) is amended to read as follows: “(b) The corporation shall determine the liability with respect to each contributing sponsor and each member of its controlled group 29 USC 1362. in a manner consistent with section 4062, except that— “(1) the amount of the liability determined under section 4062(b)(1) with respect to the entire plan— “(A) shall be determined without regard to clauses (i)(II) and (ii) of section 4062(b)(1)(A), and “(B) shall be allocated to each controlled group by multiplying such amount by a fraction— “(i) the numerator of which is the amount required to be contributed to the plan for the last 5 plan years ending prior to the termination date by persons in such controlled group as contributing sponsors, and “(ii) the denominator of which is the total amount required to be contributed to the plan for such last 5 plan years by all persons as contributing sponsors, and clauses (i)(II) and (ii) of section 4062(b)(1)(A) shall be applied 29 USC 1362. separately with respect to each such controlled group, and “(2) the amount of the liability determined under section 4062(c)(1) with respect to the entire plan shall be allocated to each controlled group by multiplying such amount by the fraction described in paragraph (1)(B) in connection with such controlled group. The corporation may also determine the liability of each such contributing sponsor and member of its controlled group on any other equitable basis prescribed by the corporation in regulations.”. (iii) The heading for section 4064 is amended to read as follows: “liability on termination of single-employer plans under multiple controlled groups”. (C) Annual notification to substantial employers.— Section 4066 (29 U.S.C. 1366) is amended— (i) by striking out “each plan under which contributions are made by more than one employer (other than a multiemployer plan)” and inserting in lieu thereof “each single-employer plan which has at least two contributing sponsors at least two of whom are not under common control”; (ii) by striking out “any employer making contributions under that plan” and inserting in lieu thereof “contributing sponsor of the plan”; and (iii) by striking out “that he is a substantial employer” and inserting in lieu thereof “that such contributing sponsor (alone or together with members of such contributing sponsor’s controlled group) constitutes a substantial employer”. (6) Additional amendments relating to recovery of amounts of liability.— (A) Section 4067 (29 U.S.C. 1367) is amended— (i) in the heading, by striking out “employer”; (ii) by striking out “employer or employers” and inserting in lieu thereof “contributing sponsors and members of their controlled groups”; and (iii) by inserting “of amounts of liability to the corporation accruing as of the termination date” after “deferred payment”. (B) Section 4068 (29 U.S.C. 1368) is amended— (i) in the heading, by striking out “of employer”; (ii) in subsection (a), by striking out “employer or employers” the first place it appears and inserting in lieu thereof “person”, by striking out “neglect or refuse” and inserting in lieu thereof “neglects or refuses”, by inserting “to the extent of an amount equal to the unpaid amount described in section 4062(b)(1)(A)(i)” after “liability” and after “corporation” the second place it appears, and by striking out employer or employers” and inserting in lieu thereof “person”; (iii) in subsection (d)(1), by striking out “employer” and inserting in lieu thereof “liable person”; (iv) in subsection (d)(2), by striking out “employer” each place it appears and inserting in lieu thereof “liable person”; (v) in subsection (e), by striking out “employer or employers” and inserting in lieu thereof “liable person”; and (vi) by striking out subsection (c)(1) (29 U.S.C. 1368(c)(1)) and inserting in lieu thereof the following: “(c) (1) Except as otherwise provided under this section, the priority of a lien imposed under subsection (a) shall be determined in the same manner as under section 6323 of the Internal Revenue Code of 26 USC 6323. Ante, p. 237. 1954 (as in effect on the date of the enactment of the Single-Employer Pension Plan Amendments Act of 1986). Such section 6323 shall be applied for purposes of this section by disregarding subsection (g)(4) and by substituting— (A) ‘lien imposed by section 4068 of the Employee Retirement 29 USC 1368. Income Security Act of 1974’ for ‘lien imposed by section 6321’ each place it appears in subsections (a), (b), (c)(1), (c)(4)(B), (d), (e), and (h)(5); “(B) ‘the corporation’ for ‘the Secretary’ in subsections (a) and (b)(9)(C); “(C) ‘the payment of the amount on which the section 4068(a) lien is based’ for ‘the collection of any tax under this title’ in subsection (b)(3); “(D) ‘a person whose property is subject to the lien’ for ‘the taxpayer’ in subsections (b)(8), (c)(2)(A)(i) (the first place it appears), (c)(2)(A)(ii), (c)(2)(B), (c)(4)(B), and (c)(4)(C) (in the matter preceding clause (i)); “(E) ‘such person’ for ‘the taxpayer’ in subsections (c)(2)(A)(i) (the second place it appears) and (c)(4)(C)(ii); “(F) ’payment of the loan value of the amount on which the lien is based is made to the corporation’ for ‘satisfaction of a levy pursuant to section 6332(b)’ in subsection (b)(9)(C); “(G) ‘section 4068(a) lien’ for ‘tax lien’ each place it appears in subsections (c)(1), (c)(2)(A), (c)(2)(B), (c)(3)(B)(iii), (c)(4)(B), (d), and (h)(5); and “(H) ‘the date on which the lien is first filed’ for ‘the date of the assessment of the tax’ in subsection (g)(3)(A).”. (b) Clarification of Description of Certain Information Required To Be Filed in Annual Report.— (1) In general.— Section 103(d)(6) (29 U.S.C. 1023(d)(6)) is amended to read as follows: “(6) Information required in regulations of the Pension Benefit Guaranty Corporation with respect to: “(A) the current value of the assets of the plan, “(B) the present value of all nonforfeitable benefits for participants and beneficiaries receiving payments under the plan, “(C) the present value of all nonforfeitable benefits for all other participants and beneficiaries, “(D) the present value of all accrued benefits which are not nonforfeitable (including a separate accounting of such benefits which are benefit commitments, as defined in section 4001 (a)(16)), and 29 USC 1301. “(E) the actuarial assumptions and techniques used in determining the values described in subparagraphs (A) through (D).”. (2) Conforming amendment.— Section 104(a)(2)(A) (29 U.S.C. 1024(a)(2)(A)) is amended by striking out the second sentence. (3) Transition rules.— Any regulations, modifications, or 29 USC 1023 note. waivers which have been issued by the Secretary of Labor with respect to section 103(d)(6) of the Employee Retirement Income Security Act of 1974 (as in effect immediately before the date of the enactment of 29 USC 1023. this Act) shall remain in full force and effect until modified by any regulations with respect to such section 103(d)(6) prescribed by the Pension Benefit Guaranty Corporation. (c) Additional Amendments.— (1) Definition for title i.— Section 3(37)(A) (29 U.S.C. 1002(37)(A)) is amended by inserting “pension” before “plan”. (2) Notice of request for waivers of minimum funding standards and right to submit relevant information—Section 303 (29 U.S.C. 1083) is amended by inserting after subsection (d) the following new subsection: “(e) (1) The Secretary of the Treasury shall, before granting a waiver under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such waiver to each employee organization representing employees covered by the affected plan. “(2) The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).”. (3) Notice of request for extensions of amortization PERIOD AND RIGHT TO SUBMIT RELEVANT INFORMATION.— Section 304 (29 U.S.C. 1084) is amended by adding at the end thereof the following new subsection: “(c) (1) The Secretary of the Treasury shall, before granting an extension under this section, require each applicant to provide evidence satisfactory to such Secretary that the applicant has provided notice of the filing of the application for such extension to each employee organization representing employees covered by the affected plan. “(2) The Secretary of the Treasury shall consider any relevant information provided by a person to whom notice was given under paragraph (1).”. (4) Amendment to the internal revenue code of 1954.— Subsection (f) of section 412 of the Internal Revenue Code of 1954 (relating to benefits may not be increased during waiver or 26 USC 412. extension period), as amended by the preceding provisions of this title, is further amended by adding at the end thereof the following new paragraph: “(4) Additional requirements.— “(A) Advance notice.— The Secretary shall, before granting a waiver under subsection (d) or an extension under subsection (e), require each applicant to provide evidence satisfactory to the Secretary that the applicant has provided notice of the filing of the application for such waiver or extension to each employee organization representing employees covered by the affected plan. “(B) Consideration of relevant information.— The Secretary shall consider any relevant information provided by a person to whom notice was given under subparagraph (A).”. (5) Audit of plans terminated in standard termination.— Section 4003(a) (29 U.S.C. 1303(a)) is amended by adding at the end thereof the following new sentence: “The corporation shall annually audit a statistically significant number of plans terminating Ante, p. 244. under section 4041(b) to determine whether participants and beneficiaries have received their benefit commitments. Each audit shall include a statistically significant number of participants and beneficiaries.”. (6) Repeal of expired authority.— Section 4004 (29 U.S.C. 1304) is repealed. (7) Voting by corporation of stock paid as liability.— Section 4005 (29 U.S.C. 1305) is amended by adding at the end thereof the following new subsection: “(g) Any stock in a person liable to the corporation under this title which is paid to the corporation by such person or a member of such person’s controlled group in satisfaction of such person’s liability under this title may be voted only by the custodial trustees or outside money managers of the corporation or fiduciaries with Ante, p. 258. respect to trusts to which the requirements of section 4049 apply.”. (8) Effective years.— Section 4022(b)(7) (29 U.S.C. 1322(b)(7)) is amended by striking out “following” and inserting in lieu thereof “beginning with”. (9) Treatment of qualified preretirement survivor annuities.— Section 4022 (29 U.S.C. 1322) is amended by adding at the end thereof the following new subsection: “(d) For purposes of subsection (a), a qualified preretirement 29 USC 1055. survivor annuity (as defined in section 205(e)(1)) with respect to a participant under a terminated single-employer plan shall not be treated as forfeitable solely because the participant has not died as of the termination date.”. (10) Clarification of power to collect amounts due the corporation.— Section 4042(d)(1)(B)(ii) (29 U.S.C. 1342(d)(1)(B)(ii)) is amended by inserting after “amounts due the plan” the following: “, including but not limited to the power to collect from the persons obligated to meet the requirements of 29 USC 1082. section 302 or the terms of the plan”. (11) Conforming amendment.— Section 4042(d)(3) (29 U.S.C. 1342(d)(3)) is amended by striking out “same duties as a trustee appointed under section 47 of the Bankruptcy Act” and inserting in lieu thereof “same duties as those of a trustee under section 704 of title 11, United States Code”. (12) Conforming amendment.— Section 4044(a) (29 U.S.C. 1344(a)) is amended by striking out “defined benefit”. (13) Clerical corrections.— Section 4044(a)(4) (29 U.S.C. 1344(a)(4)(A)) is amended— (A) in subparagraph (A), by striking out “section 4022(b)(5)” and inserting in lieu thereof “section 4022B(a)”; and (B) in subparagraph (B), by striking out “section 4022(b)(6)” and inserting in lieu thereof “section 4022(b)(5)”. (14) Release of lien.— Section 4068(e) (29 U.S.C. 1368(e)) is amended by striking out “, with the consent of the board of directors,”. (d) Studies by Comptroller General.— 29 USC 1143a. Congress. (1) In general.— The Comptroller General of the United States may, pursuant to the request of any Member of Congress, study employee benefit plans, including the effects of such plans on employees, participants, and their beneficiaries. (2) Access to books, documents, etc.— For the purpose of conducting studies under this subsection, the Comptroller General, or any of his duly authorized representatives, shall have access to and the right to examine and copy any books, documents, papers, records, or other recorded information— (A) within the possession or control of the administrator, sponsor, or employer of and persons providing services to any employee benefit plan, and (B) which the Comptroller General or his representative finds, in his own judgment, pertinent to such study. The Comptroller General shall not disclose the identity of any Classified information. individual or employer in making any information obtained under this subsection available to the public. (3) Definitions.— For purposes of this subsection, the terms “employee benefit plan”, “participant”, “administrator”, “beneficiary’ , “plan sponsor”, “employee”, and “employer” are defined in section 3 of the Employee Retirement Income Security Act of 1974. (4) Effective date.— The preceding provisions of this subsection 29 USC 1002. 29 USC 1143a note. shall be effective on the date of the enactment of this Act. (e) Amendments to the Table of Contents of ERISA.— The table of contents in section 1 is amended— (1) by striking out the item relating to section 4004; (2) by striking out the item relating to section 4042 and inserting in lieu thereof the following new item: “Sec. 4042. Institution of termination proceedings by the corporation.”; (3) by inserting after the item relating to section 4048 the following new item: “Sec. 4049. Distribution to participants and beneficiaries of liability payments to section 4049 trust.3”; and (4) by striking out the items relating to subtitle D of title IV and inserting in lieu thereof the following new items: “Subtitle D— Liability “Sec. 4061. Amounts payable by the corporation. “Sec. 4062. Liability for termination of single-employer plans under a distress termination or a termination by the corporation. “Sec. 4063. Liability of substantial employer for withdrawal from single-employer plans under multiple controlled groups. “Sec. 4064. Liability on termination of single-employer plans under multiple controlled groups. “Sec. 4065. Annual report of plan administrator. “Sec. 4066. Annual notification of substantial employers. “Sec. 4067. Recovery of liability for plan termination. “Sec. 4068. Lien for liability. “Sec. 4069. Treatment of transactions to evade liability; effect of corporate reorganization. “Sec. 4070. Enforcement authority relating to terminations of single-employer plans.”. SEC. 11017. STUDIES. (a) Single-Employer Pension Plan Termination Insurance Premium Study.— (1) In general.— As soon as practicable after the date of the enactment of this Act, the Pension Benefit Guaranty Corporation shall conduct a study of the premiums established under the single-employer pension plan termination insurance program under title IV of the Employee Retirement Income Security 29 USC 1301. Act of 1974. (2) Matters to be studied.— The Corporation shall specifically consider in its study the following matters: (A) the effect of the amendments made by this title on the long-term stability of the single-employer pension plan termination insurance program under title IV of the Employee Retirement Income Security Act of 1974, (B) alternatives to the current statutory mechanism with respect to proposals for changes in the premium levels under such program, (C) the methods currently used by the Corporation in projecting future program costs of the single-employer pension plan termination insurance program, (D) alternative methods of projecting such future program costs and an evaluation of each such alternative method, (E) the methods currently used by the Corporation in determining premiums needed to allocate and adequately fund such future program costs, (F) alternative methods of making such premium determinations and an evaluation of each such alternative method, and (G) alternative premium bases upon which some or all of such projected future program costs would be allocated on an exposure-related or risk-related computation, which may take into account the different exposures or risks imposed on the Corporation by plan sponsors with different histories and under different circumstances. (3) Submission of corporation’s report.— Not later than one year after the date of the enactment of this Act, the Corporation shall report the results of its study, together with any recommendations for statutory changes, to an advisory council, to be appointed by the chairmen of the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives and the Committee on Labor and Human Resources and the Committee on Finance of the Senate. The advisory council shall be composed of representatives of single-employer plan sponsors, employee organizations representing single-employer plan participants, and members of the general public who are experts in the matters to be considered in the study. The members of the advisory council shall serve without compensation. (4) Submission of council’s report to congress.— Not later than 180 days after the date of the submission of the Corporation’s report to the advisory council under paragraph (3), the advisory council shall submit the results of the Corporation’s study and the Corporation’s recommendations, together with the recommendations of the council, to the Speaker of the House of Representatives and the President pro tempore of the Senate. (5) Cooperation by the pension benefit guaranty corporation and other federal agencies.— The Corporation shall cooperate with the advisory council in reviewing the results of the Corporation’s study and recommendations. In order to avoid unnecessary expense and duplication, to the extent not otherwise prohibited by law, the Corporation and any other Federal agency shall provide to the advisory council any data, analyses, or other relevant information related to the matters under review. (b) Overfunded Pension Plan Study.— (1) In general.— As soon as practicable after the date of enactment of this Act. the Secretary of Labor shall conduct a study of terminations resulting in residual assets under section 4044(d) of the Employee Retirement Income Security Act of 1974. 29 USC 1344. (2) Report.— No later than May 1, 1986, the Secretary of Labor shall submit a report on the study conducted under paragraph (1), together with any recommendations for statutory changes, to the chairmen of the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives and the Committee on Labor and Human Resources and the Committee on Finance of the Senate. SEC. 11018. LIMITATION ON REGULATIONS. (a) Regulatory Treatment of Assets of Real Estate Entities.— (1) In general—Except as a defense, no rule or regulation adopted pursuant to the Secretary’s proposed regulation defining “plan assets” for purposes of the Employee Retirement Income Security Act of 1974 (50 Fed. Reg. 961, January 8, 1985, as modified by 50 Fed. Reg. 6361, February 15, 1985), or any reproposal thereof prior to the adoption of the regulations required to be issued in accordance with subsection (d), shall apply to any asset of a real estate entity in which a plan, account, or arrangement subject to such Act invests if— (A) any interest in the entity is first offered to a plan, account, or arrangement subject to such Act investing in the entity (hereinafter in this section referred to as a “plan investor’ 1 on or before the date which is 120 days after the date of publication of such rule or regulation as a final rule or regulation; (B) no plan investor acquires an interest in the entity from an issuer or underwriter at any time on or after the date which is 270 days after the date of publication of such rule or regulation as a final rule or regulation (except pursuant to a contract or subscription binding on the plan investor and entered into, or tendered, before the expiration of such 270-day period, or pursuant to the exercise, on or before December 31, 1990, of a warrant which was the subject of an effective registration under the Securities Act of 1933 (15 U.S.C. 77q et seq.) prior to the date of the 15 USC 77a et seq. enactment of this section); and (C) every interest in the entity acquired by a plan investor (or contracted for or subscribed to by a plan investor) before the expiration of such 270-day period is a security— (i) which is part of an issue or class of securities which upon such acquisition or at any time during the offering period is held by 100 or more persons; (ii) the economic rights of ownership in respect of which are freely transferable; (iii) which is registered under the Securities Act of 15 USC 77a et seq. 1933; and (iv) which is part of an issue or class of securities which is registered under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (or is so registered within three years of the effective date of the registration statement of such securities for purposes of the Securities Act of 1933: Provided, That the issuer provides plan investors with such reports with respect to the offering period as are required with respect to such period by the Securities and Exchange Commission under such Acts and the rules and regulations promulgated thereunder). In the case of partnerships organized prior to enactment of this section, the requirements of subparagraphs (iii) and (iv) shall not apply to initial limited partnership interests in an entity otherwise described above: Provided, That such entity was the subject of an effective registration under the Securities Act of 1933 prior to the date of the enactment of this section, such interests were issued solely for partnership organizational purposes in compliance with State limited partnership laws, and such interest has a value as of the date of issue of less than $20,000 and represents less than one percent of the total interests outstanding as of the completion of the offering period. (2) Maintenance of current regulatory treatment.— No asset of any real estate entity described in paragraph (1) shall be treated as an asset of any plan investor for any purpose of 29 USC 1001 note. the Employee Retirement Income Security Act of 1974 if the assets of such entity would not have been assets of such plan investor under the provisions of— (A) Interpretive Bulletin 75–2 (29 CFR 2509 750–2); or (B) the regulations proposed by the Secretary of Labor and published— (i) on August 28, 1979, at 44 Fed. Reg. 50363; (ii) on June 6, 1980, at 45 Fed. Reg. 38084; (iii) on January 8, 1985, at 50 Fed. Reg. 961; or (iv) on February 15, 1985, at 50 Fed. Reg. 6361, without regard to any limitation of any effective date proposed therein. (b) Definitions and Special Rules.— For purposes of this section— (1) The term “real estate entity” means an entity which, at any time within two years after the closing of its offering period has invested or has contracted to invest at least 75 percent of the value of its net assets available for investment in direct or indirect ownership of “real estate assets” or “interests in real property”. (2) The term “real estate asset” means real property (including an interest in real property) and any share of stock or beneficial interest, partnership interest, depository receipt, or any other interest in any other real estate entity. (3) The term “interest in real property” includes, directly or indirectly, the following: (A) the ownership or co-ownership of land or improvements thereon; (B) any mortgage (including an interest in or co-ownership of any mortgage, leasehold mortgage, pool of mortgages, deed of trust, or similar instrument) on land or improvements thereon, (C) any leasehold of land or improvements thereon; and (D) any option to acquire any of the foregoing, but does not include any mineral, oil, or gas royalty interest. (4) Whether the economic rights of ownership with respect to a security are “freely transferable” shall be determined based upon all the facts and circumstances, but ordinarily none of the following, alone or in any combination, shall cause the economic rights of ownership to be considered not freely transferable— (A) any requirement that not less than a minimum number of shares or units of such security be transferred or assigned by any investor: Provided, That such requirement does not prevent transfer of all of the then remaining shares or units held by an investor; (B) any prohibition against transfer or assignment of such security or rights in respect thereof to an ineligible or unsuitable investor; (C) any restriction on or prohibition against any transfer or assignment which would either result in a termination or reclassification of the entity for Federal or State tax purposes or which would violate any State or Federal statute, regulation, court order, judicial decree, or rule of law; (D) any requirement that reasonable transfer or administrative fees be paid in connection with a transfer or assignment; (E) any requirement that advance notice of a transfer or assignment be given to the entity and any requirement regarding execution of documentation evidencing such transfer or assignment (including documentation setting forth representations from either or both of the transferor or transferee as to compliance with any restriction or requirement described in this section or requiring compliance with the entity’s governing instruments); (F) any restriction on substitution of an assignee as a limited partner of a partnership, including a general partner consent requirement: Provided, That the economic benefits of ownership of the assignor may be transferred or assigned without regard to such restriction or consent (other than compliance with any other restriction described in this section); (G) any administrative procedure which establishes an effective date, or an event such as the completion of the offering, prior to which a transfer or assignment will not be effective; and (H) any limitation or restriction on transfer or assignment which is not created or imposed by the issuer or any person acting for or on behalf of such issuer. (c) No Effect on Secretary’s Authority Other Than As Provided.— Except as provided in subsection (a), nothing in this section shall limit the authority of the Secretary of Labor to issue regula-tions or otherwise interpret section 3(21) of the Employee Retirement 29 USC 1002. Income Security Act of 1974. (d) Time Limit for Final Regulations.— The Secretary of Labor shall adopt final regulations defining “plan assets” by December 31, 1986. (e) Effective Date.— The preceding provisions of this section shall take effect on the date of the enactment of this Act. SEC. 11019. EFFECTIVE DATE OF TITLE; TEMPORARY PROCEDURES. (a) In General.— Except as otherwise provided in this title, the amendments made by this title shall be effective as of January 1, 1986, except that such amendments shall not apply with respect to terminations for which— (1) notices of intent to terminate were filed with the Pension Benefit Guaranty Corporation under section 4041 of the Employee Ante, p. 244. Retirement Income Security Act of 1974 before such date, or (2) proceedings were commenced under section 4042 of such Ante, p. 253. Act before such date. (b) Transitional Rules.— (1) In general.— In the case of a single-employer plan termination for which a notice of intent to terminate was filed with the Pension Benefit Guaranty Corporation under section 4041 of the Employee Retirement Income Security Act of 1974 (as in effect before the amendments made by this title) on or after January 1, 1986, but before the date of the enactment of this Act, the amendments made by this title shall apply with respect to such termination, as modified by paragraphs (2) and (3). (2) Deemed compliance with notice requirements.— The requirements of subsections (a)(2), (b)(1)(A), and (c)(1)(A) of section 4041 of the Employee Retirement Income Security Act of 1974 (as amended by this title) shall be considered to have been met with respect to a termination described in paragraph (1) if— (A) the plan administrator provided notice to the participants in the plan regarding the termination in compliance with applicable regulations of the Pension Benefit Guaranty Corporation as in effect on the date of the notice, and (B) the notice of intent to terminate provided to the Pension Benefit Guaranty Corporation in connection with the termination was filed with the Corporation not less than 10 days before the proposed date of termination specified in the notice. For purposes of section 4041 of such Act (as amended by this title), the proposed date of termination specified in the notice of intent to terminate referred to in subparagraph (B) shall be considered the proposed termination date. (3) Special termination procedures.— (A) In general.— This paragraph shall apply with respect to any termination described in paragraph (1) if, within 90 days after the date of enactment of this Act, the plan administrator notifies the Corporation in writing— (i) that the plan administrator wishes the termination to proceed as a standard termination under section 4041(b) of the Employee Retirement Income Security Act of 1974 (as amended by this title) in accordance with subparagraph (B), (ii) that the plan administrator wishes the termination to proceed as a distress termination under section 4041(c) of such Act (as amended by this title) in Ante, p. 248. accordance with subparagraph IC), or (iii) that the plan administrator wishes to stop the termination proceedings in accordance with subparagraph (D). (B) TERMINATIONS PROCEEDING AS STANDARD TERMINATION.— (i) Terminations for which sufficiency notices have not been issued.— (I) In general—In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has not been issued by the Corporation before the date of the enactment of this Act, if, during the 90-day period commencing on the date of the notice required in subclause (II), all benefit commitments under the plan have been satisfied, the termination shall be treated as a standard termination under section 4041(b) of such Act (as amended by this title), (II) Special notice regarding sufficiency for terminations for which notices of sufficiency have not been issued as of date of enactment.— In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has not been issued by the Corporation before the date of the enactment of this Act, the Corporation shall make the determinations described in section 4041(c)(3)(A) (i) and (ii) (as amended by this title) and notify the plan administrator of such determinations as provided in section 4041(c)(3)(A)(iii) (as amended by this title). (ii) Terminations for which notices of sufficiency have been issued.— In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(i) and with respect to which a notice of sufficiency has been issued by the Corporation before the date of the enactment of this Act, clause (i)(I) shall apply, except that the 90-day period referred to in clause (i)(I) shall begin on the date of the enactment of this Act. (C) Terminations proceeding as distress termination.— In the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(ii), if the requirements of section 4041(c)(2)(B) of such Act (as amended by this title) are met, the termination Ante, p. 248. shall be treated as a distress termination under section 4041(c) of such Act (as amended by this title). (D) Termination of proceedings by plan administrator.— (i) In general.— Except as provided in clause (ii), in the case of a plan termination described in paragraph (1) with respect to which the Corporation has been provided the notification described in subparagraph (A)(hi), the termination shall not take effect. (ii) Terminations with respect to which final distribution of assets has commenced.— Clause (i) shall not apply with respect to a termination with respect to which the final distribution of assets has commenced before the date of the enactment of this Act unless, within 90 days after the date of the enactment of this Act, the plan has been restored in accordance with procedures issued by the Corporation pursuant to subsection (c). (E) Authority of corporation to extend 90-day periods to permit standard termination.— The Corporation may, on a case-by-case basis in accordance with subsection (c), provide for extensions of the applicable 90-day period referred to in clause (i) or (ii) of subparagraph (B) if it is demonstrated to the satisfaction of the Corporation that— (i) the plan could not otherwise, pursuant to the preceding provisions of this paragraph, terminate in a termination treated as a standard termination under section 4041(b) of the Employee Retirement Income Ante, p. 244. Security Act of 1974 (as amended by this title), and (ii) the extension would result in a greater likelihood that benefit commitments under the plan would be paid in full, except that any such period may not be so extended beyond one year after the date of the enactment of this Act. (c) Authority To Prescribe Temporary Procedures.— The Pension Benefit Guaranty Corporation may prescribe temporary procedures for purposes of carrying out the amendments made by this title during the 180-day period beginning on the date described in subsection (a).

7. 1986

   Single-Employer Pension Plan Amendments Act of 1986

   Pub. L. 99–272 § 11007(b) · 100 Stat. 82

   1. Amended · 29 U.S.C. § 1341(d)

      Pub. L. 99–272, § 11007(b), amended subsec. (d) generally

   2. Substituted · 29 U.S.C. § 1341(d)

      Pub. L. 99–272, § 11007(b), substituting provisions relating to sufficiency for benefit commitments and for guaranteed benefits, for provisions relating to an extension of the 90-day period upon written agreement

   Source evidence

   Code amendment note
   Subsec. (d). Pub. L. 99–272, § 11007(b), amended subsec. (d) generally, substituting provisions relating to sufficiency for benefit commitments and for guaranteed benefits, for provisions relating to an extension of the 90-day period upon written agreement.

   Enacted provision · exact public law section
   (b) Definitions Relating to Sufficiency.— Section 4041(d) (29 U.S.C. 1341(d)) is amended to read as follows: “(d) Sufficiency.— For purposes of this section— “(1) Sufficiency for benefit commitments.— A single-employer plan is sufficient for benefit commitments if there is no amount of unfunded benefit commitments under the plan. “(2) Sufficiency for guaranteed benefits.— A single-employer plan is sufficient for guaranteed benefits if there is no amount of unfunded guaranteed benefits under the plan.”.

8. 1986

   Single-Employer Pension Plan Amendments Act of 1986

   Pub. L. 99–272 § 11009(b) · 100 Stat. 82

   1. Redesignated · 29 U.S.C. § 1341(e)

      Pub. L. 99–272, § 11009(b), redesignated subsec. (f) as (e)

   2. Struck · 29 U.S.C. § 1341(e)

      Pub. L. 99–272, § 11009(b), struck out former subsec. (e) which related to notification and appropriate proceedings upon a finding after authorized commencement of termination that the plan is unable to pay basic benefits when due

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 99–272, § 11009(b), redesignated subsec. (f) as (e) and struck out former subsec. (e) which related to notification and appropriate proceedings upon a finding after authorized commencement of termination that the plan is unable to pay basic benefits when due.

   Enacted provision · exact public law section
   (b) Conforming Amendments.— Section 4041 (as amended by the preceding provisions of this title) is further amended— (1) by striking out subsection (e); and (2) by redesignating subsection (f) as subsection (e).

9. 1986

   Single-Employer Pension Plan Amendments Act of 1986

   Pub. L. 99–272 § 11009(b)(2) · 100 Stat. 82

   Redesignated · 29 U.S.C. § 1341(f)

   Pub. L. 99–272, § 11009(b)(2), redesignated subsec. (f) as (e)

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 99–272, § 11009(b)(2), redesignated subsec. (f) as (e).

   Enacted provision · exact public law section
   (2) by redesignating subsection (f) as subsection (e).

10. 1986

    Single-Employer Pension Plan Amendments Act of 1986

    Pub. L. 99–272 § 11008(b) · 100 Stat. 82

    1. Amended · 29 U.S.C. § 1341(f)

       Pub. L. 99–272, § 11008(b), amended subsec. (f) generally

    2. Substituted · 29 U.S.C. § 1341(f)

       Pub. L. 99–272, § 11008(b), substituting provisions relating to limitation on the conversion of a defined benefit plan to a defined contribution plan, for provisions relating to amendment of a plan with respect to which basic benefits are guaranteed

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 99–272, § 11008(b), amended subsec. (f) generally, substituting provisions relating to limitation on the conversion of a defined benefit plan to a defined contribution plan, for provisions relating to amendment of a plan with respect to which basic benefits are guaranteed.

    Enacted provision · exact public law section
    (b) Conforming Amendment.— Section 4041(f) (29 U.S.C. 1341(f)) is amended to read as follows: “(f) Limitation on the Conversion of a Defined Benefit Plan to a Defined Contribution Plan.— The adoption of an amendment to a plan which causes the plan to become a plan described in section 4021(b)(1) constitutes a termination of the plan. Such an 29 USC 1321. amendment may take effect only after the plan satisfies the requirements for standard termination under subsection (b) or distress termination under subsection (c).”.

11. 1987

    Pub. L. 100–203 § 9313(a)(1) · 101 Stat. 1330

    Amended · 29 U.S.C. § 1341(b)(1)(D)

    Pub. L. 100–203, § 9313(a)(1), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “when the final distribution of assets occurs, the plan is sufficient for benefit commitments (determined as of the termination date).”

    Source evidence

    Code amendment note
    Subsec. (b)(1)(D). Pub. L. 100–203, § 9313(a)(1), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “when the final distribution of assets occurs, the plan is sufficient for benefit commitments (determined as of the termination date).”

    Enacted provision · exact public law section
    (1) In general.— Subparagraph (D) of section 4041(b)(1) of ERISA (29 U.S.C. 1341(b)(1)(D)) is amended to read as follows: “(D) when the final distribution of assets occurs, the plan is sufficient for benefit liabilities (determined as of the termination date).”

12. 1987

    Pub. L. 100–203 § 9314(a)(1)(B) · 101 Stat. 1330

    Inserted · 29 U.S.C. § 1341(b)(2)(A)

    Pub. L. 100–203, § 9314(a)(1)(B), inserted at end “Clause (i) and clause (iii)(I) shall not apply to a plan described in section 412(i) of title 26.”

    Source evidence

    Code amendment note
    Subsec. (b)(2)(A). Pub. L. 100–203, § 9314(a)(1)(B), inserted at end “Clause (i) and clause (iii)(I) shall not apply to a plan described in section 412(i) of title 26.”

    Enacted provision · exact public law section
    (B) by adding at the end thereof the following:

13. 1987

    Pub. L. 100–203 § 9313(a)(2)(A) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(b)(2)(A)(i)

    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments” in subcls. (II) and (III)

    Source evidence

    Code amendment note
    Subsec. (b)(2)(A)(i). Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments” in subcls. (II) and (III).

    Enacted provision · exact public law section
    (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”.

14. 1987

    Pub. L. 100–203 § 9314(a)(1)(A) · 101 Stat. 1330

    1. Added · 29 U.S.C. § 1341(b)(2)(A)(iii)

       Pub. L. 100–203, § 9314(a)(1)(A), added cl. (iii)

    2. Struck · 29 U.S.C. § 1341(b)(2)(A)(iii)

       Pub. L. 100–203, § 9314(a)(1)(A), struck out former cl. (iii) which read as follows: “certification by the plan administrator that the information on which the enrolled actuary based the certification under clause (i) and the information provided to the corporation under clause (ii) are accurate and complete.”

    Source evidence

    Code amendment note
    Subsec. (b)(2)(A)(iii). Pub. L. 100–203, § 9314(a)(1)(A), added cl. (iii) and struck out former cl. (iii) which read as follows: “certification by the plan administrator that the information on which the enrolled actuary based the certification under clause (i) and the information provided to the corporation under clause (ii) are accurate and complete.”

    Enacted provision · exact public law section
    (A) by striking clause (iii) and inserting the following: “(iii) certification by the plan administrator that— “(I) the information on which the enrolled actuary based the certification under clause (i) is accurate and complete, and “(II) the information provided to the corporation under clause (ii) is accurate and complete.”; and

15. 1987

    Pub. L. 100–203 § 9313(a)(2)(B) · 101 Stat. 1330

    1. Substituted · 29 U.S.C. § 1341(b)(2)(B)

       Pub. L. 100–203, § 9313(a)(2)(B), substituted “the amount of the benefit liabilities (if any) attributable to such person” for “the amount of such person’s benefit commitments (if any)” in cl. (ii)

    2. Substituted · 29 U.S.C. § 1341(b)(2)(B)

       Pub. L. 100–203, § 9313(a)(2)(B), substituted “such benefit liabilities” for “such benefit commitments” in cl. (ii)

    Source evidence

    Code amendment note
    Subsec. (b)(2)(B). Pub. L. 100–203, § 9313(a)(2)(B), substituted “the amount of the benefit liabilities (if any) attributable to such person” for “the amount of such person’s benefit commitments (if any)” in cl. (i), and “such benefit liabilities” for “such benefit commitments” in cl. (ii).

    Enacted provision · exact public law section
    (B) Subparagraph (B) of section 4041(b)(2) of ERISA (29 U.S.C. 134ia))(2)(B)) is amended— (i) by striking out “the amount of such person’s benefit commitments (if any)” and inserting in lieu thereof “the amount of the benefit liabilities (if any) attributable to such person”; and (ii) by striking out “such benefit commitments” and inserting in lieu thereof “such benefit liabilities”.

16. 1987

    Pub. L. 100–203 § 9313(a)(2)(A) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(b)(2)(C)(i)(II); 29 U.S.C. § 1341(b)(2)(C)(D)(ii)

    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (b)(2)(C)(i)(II), (D)(ii). Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”.

17. 1987

    Pub. L. 100–203 § 9313(a)(2)(C)(i) · 101 Stat. 1330

    1. Added · 29 U.S.C. § 1341(b)(3)(A)(i)

       Pub. L. 100–203, § 9313(a)(2)(C)(i), added cl. (i)

    2. Struck · 29 U.S.C. § 1341(b)(3)(A)(i)

       Pub. L. 100–203, § 9313(a)(2)(C)(i), struck out former cl. (i) which read as follows: “purchase irrevocable commitments from an insurer to provide the benefit liabilities under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 1344 of this title, or”

    Source evidence

    Code amendment note
    Subsec. (b)(3)(A)(i). Pub. L. 100–203, § 9313(a)(2)(C)(i), added cl. (i) and struck out former cl. (i) which read as follows: “purchase irrevocable commitments from an insurer to provide the benefit liabilities under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 1344 of this title, or”.

    Enacted provision · exact public law section
    (i) Subparagraph (A) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)(A)) is amended by striking out clauses (i) and (ii) and inserting in lieu thereof the following: “(i) purchase irrevocable commitments from an insurer to provide all benefit liabilities under the plan, or “(ii) in accordance with the provisions of the plan and any applicable regulations, otherwise fully provide all benefit liabilities under the plan.”

18. 1987

    Pub. L. 100–203 § 9313(a)(2)(A) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(b)(3)(A)(i)

    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”.

19. 1987

    Pub. L. 100–203 § 9313(a)(2)(C)(i) · 101 Stat. 1330

    1. Added · 29 U.S.C. § 1341(b)(3)(A)(ii)

       Pub. L. 100–203, § 9313(a)(2)(C)(i), added cl. (ii)

    2. Struck · 29 U.S.C. § 1341(b)(3)(A)(ii)

       Pub. L. 100–203, § 9313(a)(2)(C)(i), struck out former cl. (ii) which read as follows: “in accordance with the provisions of the plan and any applicable regulations of the corporation, otherwise fully provide the benefit liabilities under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 1344 of this title.”

    Source evidence

    Code amendment note
    Subsec. (b)(3)(A)(ii). Pub. L. 100–203, § 9313(a)(2)(C)(i), added cl. (ii) and struck out former cl. (ii) which read as follows: “in accordance with the provisions of the plan and any applicable regulations of the corporation, otherwise fully provide the benefit liabilities under the plan and all other benefits (if any) under the plan to which assets are required to be allocated under section 1344 of this title.”

    Enacted provision · exact public law section
    (i) Subparagraph (A) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)(A)) is amended by striking out clauses (i) and (ii) and inserting in lieu thereof the following: “(i) purchase irrevocable commitments from an insurer to provide all benefit liabilities under the plan, or “(ii) in accordance with the provisions of the plan and any applicable regulations, otherwise fully provide all benefit liabilities under the plan.”

20. 1987

    Pub. L. 100–203 § 9313(a)(2)(A) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(b)(3)(A)(ii)

    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”.

21. 1987

    Pub. L. 100–203 § 9313(a)(2)(C)(ii) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(b)(3)(B)

    Pub. L. 100–203, § 9313(a)(2)(C)(ii), substituted “so as to pay all benefit liabilities under the plan” for “so as to pay the benefit liabilities under the plan and all other benefits under the plan to which assets are required to be allocated under section 1344 of this title.”

    Source evidence

    Code amendment note
    Subsec. (b)(3)(B). Pub. L. 100–203, § 9313(a)(2)(C)(ii), substituted “so as to pay all benefit liabilities under the plan” for “so as to pay the benefit liabilities under the plan and all other benefits under the plan to which assets are required to be allocated under section 1344 of this title.”

    Enacted provision · exact public law section
    (ii) Subparagraph (B) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)) is amended by striking out “so as to pay” and all that follows and inserting in lieu thereof “so as to pay all benefit liabilities under the plan”.

22. 1987

    Pub. L. 100–203 § 9313(a)(2)(A) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(b)(3)(B)

    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 100–203, § 9313(a)(2)(A), substituted “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”.

23. 1987

    Pub. L. 100–203 § 9314(a)(1)(B) · 101 Stat. 1330

    Inserted · 29 U.S.C. § 1341(c)(2)(A)

    Pub. L. 100–203, § 9314(a)(1)(B), inserted at end “Clause (ii) and clause (iv)(I) shall not apply to a plan described in section 412(i) of title 26.”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(A). Pub. L. 100–203, § 9314(a)(1)(B), inserted at end “Clause (ii) and clause (iv)(I) shall not apply to a plan described in section 412(i) of title 26.”

    Enacted provision · exact public law section
    (B) by adding at the end thereof the following:

24. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(2)(A)(ii)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments” in subcls. (II) and (III)

    Source evidence

    Code amendment note
    Subsec. (c)(2)(A)(ii). Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments” in subcls. (II) and (III).

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

25. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(2)(A)(iii)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments” in introductory provision

    Source evidence

    Code amendment note
    Subsec. (c)(2)(A)(iii). Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments” in introductory provision.

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

26. 1987

    Pub. L. 100–203 § 9314(a)(2)(A) · 101 Stat. 1330

    1. Added · 29 U.S.C. § 1341(c)(2)(A)(iv)

       Pub. L. 100–203, § 9314(a)(2)(A), added cl. (iv)

    2. Struck · 29 U.S.C. § 1341(c)(2)(A)(iv)

       Pub. L. 100–203, § 9314(a)(2)(A), struck out former cl. (iv) which read as follows: “certification by the plan administrator that the information on which the enrolled actuary based the certifications under clause (ii) and the information provided to the corporation under clauses (i) and (iii) are accurate and complete.”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(A)(iv). Pub. L. 100–203, § 9314(a)(2)(A), added cl. (iv) and struck out former cl. (iv) which read as follows: “certification by the plan administrator that the information on which the enrolled actuary based the certifications under clause (ii) and the information provided to the corporation under clauses (i) and (iii) are accurate and complete.”

    Enacted provision · exact public law section
    (A) by striking clause (iv) and inserting the following: “(iv) certification by the plan administrator that— “(I) the information on which the enrolled actuary based the certifications under clause (ii) is accurate and complete, and “(II) the information provided to the corporation under clauses (i) and (iii) is accurate and complete.”; and

27. 1987

    Pub. L. 100–203 § 9313(b)(1)(A) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(2)(B)

    Pub. L. 100–203, § 9313(b)(1)(A), substituted “a member” for “a substantial member” in introductory provisions

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B). Pub. L. 100–203, § 9313(b)(1)(A), substituted “a member” for “a substantial member” in introductory provisions.

    Enacted provision · exact public law section
    (A) in subparagraph (B), by striking “a substantial member” in the matter preceding clause (i) and inserting “a member”; and

28. 1987

    Pub. L. 100–203 § 9313(b)(3) · 101 Stat. 1330

    1. Amended · 29 U.S.C. § 1341(c)(2)(B)(i)

       Pub. L. 100–203, § 9313(b)(3), as amended by Pub. L. 101–239, § 7881(g)(5)

    2. Substituted · 29 U.S.C. § 1341(c)(2)(B)(i)

       Pub. L. 100–203, § 9313(b)(3), as substituted “proposed termination date” for “termination date” in subcls. (I) and (II)

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(i). Pub. L. 100–203, § 9313(b)(3), as amended by Pub. L. 101–239, § 7881(g)(5), substituted “proposed termination date” for “termination date” in subcls. (I) and (II).

    Enacted provision · exact public law section
    (3) Clarification of date as of which employer must be in a bankruptcy proceeding to qualify for distress termination.— Clauses (i) and (ii) of section 4041(c)(2)(B) of ERISA (29 U.S.C. 1341(c)(2)(B) (i) and (ii)) are each amended by inserting “proposed” before “termination date”.

29. 1987

    Pub. L. 100–203 § 9313(b)(4) · 101 Stat. 1330

    Inserted · 29 U.S.C. § 1341(c)(2)(B)(i)

    Pub. L. 100–203, § 9313(b)(4), inserted “(or a case described in clause (ii) filed by or against such person has been converted, as of such date, to a case in which liquidation is sought)” in subcl. (I)

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 100–203, § 9313(b)(4), inserted “(or a case described in clause (ii) filed by or against such person has been converted, as of such date, to a case in which liquidation is sought)” in subcl. (I).

    Enacted provision · exact public law section
    (4) Treatment under distress tests of cases converted to liquidation.— Section 4041(c)(2)(B)(i)(I) of ERISA (29 U.S.C. 1341(c)(2)(B)(i)(I)) is amended by inserting before the comma at the end the following: “(or a case described in clause (ii) filed by or against such person has been converted, as of such date, to a case in which liquidation is sought)”.

30. 1987

    Pub. L. 100–203 § 9313(b)(3) · 101 Stat. 1330

    1. Amended · 29 U.S.C. § 1341(c)(2)(B)(ii)(I)

       Pub. L. 100–203, § 9313(b)(3), as amended by Pub. L. 101–239, § 7881(g)(5)

    2. Substituted · 29 U.S.C. § 1341(c)(2)(B)(ii)(I)

       Pub. L. 100–203, § 9313(b)(3), as substituted “proposed termination date” for “termination date”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(ii)(I). Pub. L. 100–203, § 9313(b)(3), as amended by Pub. L. 101–239, § 7881(g)(5), substituted “proposed termination date” for “termination date”.

    Enacted provision · exact public law section
    (3) Clarification of date as of which employer must be in a bankruptcy proceeding to qualify for distress termination.— Clauses (i) and (ii) of section 4041(c)(2)(B) of ERISA (29 U.S.C. 1341(c)(2)(B) (i) and (ii)) are each amended by inserting “proposed” before “termination date”.

31. 1987

    Pub. L. 100–203 title IX · 101 Stat. 1330

    Struck · 29 U.S.C. § 1341(c)(2)(B)(ii)(II)

    Pub. L. 100–203 § 9313(b)(5)(A), struck out “and” at end

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(ii)(II). Pub. L. 100–203 § 9313(b)(5)(A), struck out “and” at end.

    Enacted provision · exact public law
    TITLE IX— INCOME SECURITY AND RELATED PROGRAMS TABLE OF CONTENTS Subtitle A— OASDI Provisions Part 1— Coverage and Benefits Sec. 9001. Coverage of inactive duty military training. Sec. 9002. Coverage of all cash pay of agricultural employees whose employers spend $2,500 or more a year for agricultural labor. Sec. 9003. Coverage of the employer cost of group-term life insurance. Sec. 9004 , Coverage of services performed by one spouse in the employ of the other. Sec. 9005. Treatment of service performed by an individual in the employ of a parent. Sec. 9006. Application of employer taxes to employees’ cash tips. Sec. 9007. Applicability of Government pension offset to certain Federal employees. Sec. 9008. Modification of agreement with Iowa to provide coverage for certain policemen and firemen. Sec. 9009. Continuation of disability benefits during appeal. Sec. 9010. Extension of disability re-entitlement period from 15 months to 36 months. Part 2— Other Social Security Provisions Sec. 9021. Moratorium on reductions in attorneys’ fees; studies of attorneys’ fee payment system. Sec. 9022. Corporate directors. Sec. 9023. Technical corrections. Part 3— Railroad Retirement Program Sec. 9031. Increase in rates of tier 2 Railroad Retirement Tax on employees for 1988 and thereafter. Sec. 9032. Increase in rates of tier 2 Railroad Retirement Tax on employers for 1988 and thereafter. Sec. 9033. Commission on Railroad Retirement Reform. Sec. 9034. Transfer to railroad retirement account. Subtitle B— Provisions Relating to Public Assistance and Unemployment Compensation Part 1— AFDC and SSI Amendments Sec. 9101. Permanent extension of disregard of nonprofit organizations’ in-kind assistance to SSI and AFDC recipients. Sec. 9102. Fraud control under AFDC program. Sec. 9103. Exclusion of real property when it cannot be sold. Sec. 9104. Adjustment of penalty where asset is transferred for less than fair market value. Sec. 9105. Exclusion of interest on burial accounts. Sec. 9106. Exception from SSI retrospective accounting for AFDC and certain other assistance payments. Sec. 9107. Technical amendment relating to 1986 amendment concerning the treatment of certain couples in medical institutions. Sec. 9108. Extension of deadline for disabled widows to apply for Medicaid protection under 1984 amendments. Sec. 9109. Increase in SSI emergency advance payments. Sec. 9110. Modification of interim assistance reimbursement program. Sec. 9111. Special notice to blind recipients. Sec. 9112. Rehabilitation services for blind SSI recipients. Sec. 9113. Extending the number of months that an individual in a public emergency shelter can be eligible for SSI. Sec. 9114. Exclusion of underpayments from resources. Sec. 9115. Continuation of full benefit standard for individuals temporarily institutionalized. Sec. 9116. Retention of Medicaid when SSI benefits are lost upon entitlement to early widow’s or widower’s insurance benefits. Sec. 9117. Demonstration program to assist homeless individuals. Sec. 9118. Assistance to homeless AFDC families. Sec. 9119. Increase in personal needs allowance for SSI recipients. Sec. 9120. Exclusion of death benefits to the extent spent on last illness and burial. Sec. 9121. Demonstration of Family Independence Program.8383Copy read “family independence program.”. Sec. 9122. Child support demonstration program in New York State.8484Copy read “state.”. Sec. 9123. Technical correction. Part 2— Social Services, Child Welfare Services, and Other Provisions Relating to Children Sec. 9131. Permanent extension of authority for voluntary foster care placements. Sec. 9132. 2-year extension of foster care ceiling and of authority to transfer foster care funds to child welfare services. Sec. 9133. Mother/infant foster care. Sec. 9134. Increased funding for social services block grants. Sec. 9135. Extension of social services block grant and child welfare services programs to American Samoa. Sec. 9136. National Commission on Children.8585Copy read “commission on children.”. Sec. 9137. Boarder babies demonstration project. Sec. 9138. Study of infants and children with AIDS in foster care. Sec. 9139. Technical corrections. Part 3— Child Support Enforcement Amendments Sec. 9141. Continuation of child support enforcement services to families no longer receiving AFDC. Sec. 9142. Child support enforcement services required for certain families receiving Medicaid. Sec. 9143. Repeal of unnecessary child support revolving fund. Part 4— Unemployment Compensation Sec. 9151. Determination of amount of Federal share with respect to certain extended benefits payments. Sec. 9152. Demonstration program to provide self-employment allowances for eligible individuals. Sec. 9153. Extension of FUTA tax. Sec. 9154. Transfer of funds into the Federal Unemployment Account and the Extended Unemployment Compensation Account. Sec. 9155. Interest on advances to the Federal Unemployment Account and the Extended Unemployment Compensation Account. Sec. 9156. Crediting to the Federal Unemployment Account of interest earned on advances by the States. Subtitle C— Manufacturers Excise Tax on Certain Vaccines Sec. 9201. Manufacturers excise tax on certain vaccines. Sec. 9202. Vaccine Injury Compensation Trust Fund. Subtitle D— Pension Provisions Part I— Full-Funding Limitations Sec. 9301. Full-funding limitation for deductions to qualified plans. Part II— Pension Funding and Termination Requirements Sec. 9302. Short title; definitions. Subpart A— Additional Funding Requirements Sec. 9303. Additional funding requirements. Sec. 9304. Time for making contributions. Sec. 9305. Liability of members of controlled group for taxes on failure to meet minimum funding standards and to make minimum funding contributions. Sec. 9307. Other funding changes. Subpart B— Plant Terminations Sec. 9311. Limitations on employer reversions upon plan termination. Sec. 9312. Elimination of section 4049 trust: increase in liability to pension benefit guaranty corporation and in payments by corporation to participants and beneficiaries. Sec. 9313. Standards for termination. Sec. 9314. Additional amendments relating to plan termination. Subpart C— Increase in Premium Rates Sec. 9331. Increase in premium rates. Subpart D— Miscellaneous Provisions Sec. 9341. Security required upon adoption of plan amendment resulting in significant underfunding. Sec. 9342. Reporting requirements. Sec. 9343. Coordination of provisions of the Internal Revenue Code of 1986 with provisions of the Employee Retirement Income Security Act of 1974. Sec. 9344. Clarification regarding the imposition of an annual sanction for prohibited transactions which are continuing in nature. Sec. 9345. Additional limitations on investment by an individual account plan forming part of a floor-offset arrangement and on investment by an individual account plan in employer stock. Sec. 9346. Interest rate on accumulated contributions. Subtitle E— Miscellaneous Provisions Sec. 9401. Restoration of trust funds for 1987. Sec. 9402. 6-month extension of provisions relating to collection of non-tax debts owed to Federal agencies. Sec. 9403. Increase in limit on long-term bonds. Subtitle F— Customs User Fees; Trade and Customs Authorizations Sec. 9501. Customs user fees. Sec. 9502. United States International Trade Commission authorizations. Sec. 9503. United States Customs Service8686Copy read “service”. authorizations. Sec. 9504. Office of the United States Trade Representative authorizations. Subtitle A— OASDI Provisions PART 1— COVERAGE AND BENEFITS SEC. 9001. COVERAGE OF INACTIVE DUTY MILITARY TRAINING. (a) Social Security Act Amendments.— (1) Paragraph (1) of section 210(1) of the Social Security Act is amended to read as follows: 42 USC 410. “(l) (1) Except as provided in paragraph (4), the term ‘employment’ shall, notwithstanding the provisions of subsection (a) of this section, include— “(A) service performed after December 1956 by an individual as a member of a uniformed service on active duty, but such term shall not include any such service which is performed while on leave without pay, and “(B) service performed after December 1987 by an individual as a member of a uniformed service on inactive duty training.”. (2) The second indented paragraph following subsection (s) in section 209 of such Act (relating to service in the uniformed services) 42 USC 409. is amended by striking “only his basic pay” and all that follows and inserting “only (1) his basic pay as described in chapter 3 and section 1009 of title 37, United States Code, in the case of an individual performing service to which subparagraph (A) of such section 210(1)(1) applies, or (2) his compensation for such service as determined under section 206(a) of title 37, United States Code, in the case of an individual performing service to which subparagraph (B) of such section 210(1)(1) applies.”. (b) FICA Amendments.— (1) Paragraph (1) of section 3121(m) of the Internal Revenue Code of 1986 (relating to inclusion of service in 26 USC 3121. the uniformed services) is amended to read as follows: “(1) Inclusion of service.— The term ‘employment’ shall, notwithstanding the provisions of subsection (b) of this section, include— “(A) service performed by an individual as a member of a uniformed service on active duty, but such term shall not include any such service which is performed while on leave without pay, and “(B) service performed by an individual as a member of a uniformed service on inactive duty training.”. (2) Paragraph (2) of section 3121(i) of such Code (relating to computation of wages for individuals performing service in the uniformed services) is amended by striking “only his basic pay” and all that follows and inserting “only (A) his basic pay as described in chapter 3 and section 1009 of title 37, United States Code, in the case of an individual performing service to which subparagraph (A) of such subsection (m)(l) applies, or (B) his compensation for such service as determined under section 206(a) of title 37, United States Code, in the case of an individual performing service to which subparagraph (B) of such subsection (m)(l) applies.”. (c) Conforming Amendment.— Section 229(a) of the Social Security Act is amended by striking “section 210(1)” and inserting 42 USC 429. “210(1)(1)(A)”. (d) Effective Date.— The amendments made by this section shall 26 USC 3121 note. apply with respect to remuneration paid after December 31, 1987. SEC. 9002. COVERAGE OF ALL CASH PAY OF AGRICULTURAL EMPLOYEES WHOSE EMPLOYERS SPEND $2,500 OR MORE A YEAR FOR AGRICULTURAL LABOR. (a) Social Security Act Amendment.— Paragraph (2) of section 209(h) of the Social Security Act is amended by striking clause (B) 42 USC 409. and inserting “(B) the employer’s expenditures for agricultural labor in such year equal or exceed $2,500;”. (b) FICA Amendment.— Subparagraph (B) of section 3121(a)(8) of the Internal Revenue Code of 1986 (relating to wages) is amended by 26 USC 3121. striking clause (ii) and inserting “(ii) the employer’s expenditures for agricultural labor in such year equal or exceed $2,500;”. (c) Effective Date.— The amendments made by this section shall 26 USC 3121 note. apply with respect to remuneration for agricultural labor paid after December 31, 1987. SEC. 9003. COVERAGE OF THE EMPLOYER COST OF GROUP-TERM LIFE INSURANCE. (a) Coverage Under Old-Age, Survivors, and Disability Insurance Program.— (1) Social security act amendment.— Clause (3) of section 209(b) of the Social Security Act is amended by striking “death” 42 USC 409. and inserting “death, except that this subsection does not apply to a payment for group-term life insurance to the extent that such payment is includible in t he gross income of t he employee under the Internal Revenue Code of 1986”. (2) FICA amendment.— Subparagraph (C) of section 3121(a)(2) of the Internal Revenue Code of 1986 (relating to wages) is 26 USC 3121. amended by striking “death” and inserting “death, except that this paragraph does not apply to a payment for group-term life insurance to the extent that such payment is includible in t he gross income of the employee”. (b) Effective Date.— The amendments made by subsection (a) 26 USC 3121 note. shall apply with respect to group-term life insurance coverage in effect after December 31, 1987. SEC. 9004. COVERAGE OF SERVICES PERFORMED BY ONE SPOUSE IN THE EMPLOY OF THE OTHER. (a) Social Security Act Amendments.— (1) In general.— Subparagraph (A) of section 210(a)(3) of the Social Security Act is amended by striking “performed by an 42 USC 410. individual in the employ of his spouse, and service”. (2) Exception for certain domestic service in the private home of a spouse.— Paragraph (3) of section 210(a) of such Act is amended by striking so much of subparagraph (B) as precedes clause (i) and inserting the following: “(B) Service not in the course of the employer’s trade or business, or domestic service in a private home of the employer, performed by an individual in the employ of his spouse or son or daughter; except that the provisions of this subparagraph shall not be applicable to such domestic service performed by an individual in the employ of his son or daughter if—”. (b) FICA Amendments.— (1) In general.— Subparagraph (A) of section 3121(b)(3) of the Internal Revenue Code of 1986 (relating to employment) is 26 USC 3121. amended by striking “performed by an individual in the employ of his spouse, and service”. (2) Exception for certain domestic service in the private home of a spouse.— Paragraph (3) of section 3121(b) of such Code (relating to employment) is amended by striking so much of subparagraph (B) as precedes clause (i) and inserting the following: “(B) service not in the course of the employer’s trade or business, or domestic service in a private home of the employer, performed by an individual in the employ of his spouse or son or daughter; except that the provisions of this subparagraph shall not be applicable to such domestic service performed by an individual in the employ of his son or daughter if—”. (c) Effective Date.— The amendments made by this section shall 26 USC 3121 note. apply with respect to remuneration paid after December 31, 1987. SEC. 9005. TREATMENT OF SERVICE PERFORMED BY AN INDIVIDUAL IN THE EMPLOY OF A PARENT. (a) Social Security Act Amendments.— (1) Age below which service for parent is excluded from covered employment reduced to age 18.— Subparagraph (A) of section 210(a)(3) of the Social Security Act (as amended by section 9004(a)(1) of this Act) is further amended by striking “twenty-one” and inserting “18”. (2) Exception for certain domestic service in the private home of parent.— Subparagraph (B) of section 210(a)(3) of such Act (as amended by section 9004(a)(2) of this Act) is further amended by inserting “under the age of 21 in the employ of his father or mother, or performed by an individual” after “individual” the first place it appears. (b) FICA Amendments.— (1) Age below which service for parent is excluded from covered employment reduced to age 18.— Subparagraph (A) of section 3121(b)(3) of the Internal Revenue Code of 1986 (as amended by section 9004(b)(1) of this Act) is further amended by striking “21” and inserting “18”. (2) Exception for certain domestic service in the private home of parent.— Subparagraph (B) of section 3121(b)(3) of such Code (as amended by section 9004(b)(2) of this Act) is further amended by inserting “under the age of 21 in the employ of his father or mother, or performed by an individual” after “individual” the first place it appears. (c) Effective Date.— The amendments made by this section shall 26 USC 3121 note. apply with respect to remuneration paid after December 31, 1987. SEC. 9006. APPLICATION OF EMPLOYER TAXES TO EMPLOYEES’ CASH TIPS. (a) Application of Tax to Tips.— Section 3121(q) of the Internal Revenue Code of 1986 (relating to inclusion of tips for employee 26 USC 3121. taxes) is amended— (1) by striking “Employee Taxes” in the heading and inserting “Both Employee and Employer Taxes”; (2) by striking “other than for purposes of the taxes imposed by section 3111”; (3) by striking “remuneration for employment” and inserting “remuneration for such employment (and deemed to have been paid by the employer for purposes of subsections (a) and (b) of section 3111)”; and (4) by inserting after “at the time received” the following: “; except that, in determining the employer’s liability in connection with the taxes imposed by section 3111 with respect to such tips in any case where no statement including such tips was so furnished (or to the extent that the statement so furnished was inaccurate or incomplete), such remuneration shall be deemed for purposes of subtitle F to be paid on the date on which notice and demand for such taxes is made to the employer by the Secretary”. (b) Conforming Amendments.— (1) Subsections (a) and (b) of section 3111(a) of such Code (relating to rate of tax on employers) are 26 USC 3111. each amended by striking “and (t)”. (2) Section 3121(t) of such Code (relating to special rule) is repealed. (c) Effective Date.— The amendments made by this section shall 26 USC 3111 note. apply with respect to tips received (and wages paid) on and after January 1, 1988. SEC. 9007. APPLICABILITY OF GOVERNMENT PENSION OFFSET TO CERTAIN FEDERAL EMPLOYEES. (a) Wife’s Insurance Benefits.— Paragraph (4) of section 202(b) of the Social Security Act is amended— 42 USC 402. (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by striking subparagraph (A) and inserting the following: “(A) The amount of a wife’s insurance benefit for each month (as determined after application of the provisions of subsections (q) and (k)) shall be reduced (but not below zero) by an amount equal to two-thirds of the amount of any monthly periodic benefit payable to the wife (or divorced wife) for such month which is based upon her earnings while in the service of the Federal Government or any State (or political subdivision thereof, as defined in section 218(b)(2)) if, on the last day she was employed by such entity— “(i) such service did not constitute ‘employment’ as defined in section 210, or “(ii) such service was being performed while in the service of the Federal Government, and constituted ‘employment’ as so defined solely by reason of— “(I) clause (ii) or (iii) of subparagraph (G) of section 210(a)(5), where the lump-sum pa3mient described in such clause (ii) or the cessation of coverage described in such clause (iii) (whichever is applicable) was received or occurred on or after January 1, 1988, or “(II) an election to become subject to chapter 84 of title 5, United States Code, made pursuant to law after December 31, 1987, unless subparagraph (B) applies. The amount of the reduction in any benefit under this subparagraph, if not a multiple of $0.10, shall be rounded to the next higher multiple of $0.10. “(B) Subparagraph (A)(ii) shall not apply with respect to monthly periodic benefits based in whole or in part on service which constituted ‘employment’ as defined in section 210 if such service was performed for at least 60 months in the aggregate during the period beginning January 1, 1988, and ending with the close of the first calendar month as of the end of which the wife (or divorced wife) is eligible for benefits under this subsection and has made a valid application for such benefits.”. (b) Husband’s Insurance Benefits.— Paragraph (2) of section 202(c) of such Act is amended— 42 USC 402. (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by striking subparagraph (A) and inserting the following: “(A) The amount of a husband’s insurance benefit for each month (as determined after application of the provisions of subsections (q) and (k)) shall be reduced (but not below zero) by an amount equal to two-thirds of the amount of any monthly periodic benefit payable to the husband (or divorced husband) for such month which is based upon his earnings while in the service of the Federal Government or any State (or political subdivision thereof, as defined in section 218(b)(2)) if, on the last day he was employed by such entity— “(i) such service did not constitute ‘employment’ as defined in section 210, or “(ii) such service was being performed while in the service of the Federal Government, and constituted ‘employment’ as so defined solely by reason of— “(I) clause (ii) or (iii) of subparagraph (G) of section 210(a)(5), where the lump-sum payment described in such clause (ii) or the cessation of coverage described in such clause (iii) (whichever is applicable) was received or occurred on or after January 1, 1988, or “(II) an election to become subject to chapter 84 of title 5, United States Code, made pursuant to law after December 31, 1987, unless subparagraph (B) applies. The amount of the reduction in any benefit under this subparagraph, if not a multiple of $0.10, shall be rounded to the next higher multiple of $0.10. “(B) Subparagraph (A)(ii) shall not apply with respect to monthly periodic benefits based in whole or in part on service which constituted ‘employment’ as defined in section 210 if such service was performed for at least 60 months in the aggregate during the period beginning January 1, 1988, and ending with the close of the first calendar month as of the end of which the husband (or divorced husband) is eligible for benefits under this subsection and has made a valid application for such benefits.”. (c) Widow’s Insurance Benefits.— Paragraph (7) of section 202(e) of such Act is amended— (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by striking subparagraph (A) and inserting the following: “(A) The amount of a widow’s insurance benefit for each month (as determined after application of the provisions of subsections (q) and (k), paragraph (2)(D), and paragraph (3)) shall be reduced (but not below zero) by an amount equal to two-thirds of the amount of any monthly periodic benefit payable to the widow (or surviving divorced wife) for such month which is based upon her earnings while in the service of the Federal Government or any State (or political subdivision thereof, as defined in section 218(b)(2)) if, on the last day she was employed by such entity— “(i) such service did not constitute ‘employment” as defined in section 210, or “(ii) such service was being performed while in the service of the Federal Government, and constituted ‘employment’ as so defined solely by reason of— “(I) clause (ii) or (iii) of subparagraph (G) of section 210(a)(5), where the lump-sum payment described in such clause (ii) or the cessation of coverage described in such clause (iii) (whichever is applicable) was received or occurred on or after January 1, 1988, or “(II) an election to become subject to chapter 84 of title 5, United States Code, made pursuant to law after December 31, 1987, unless subparagraph (B) applies. The amount of the reduction in any benefit under this subparagraph, if not a multiple of $0.10, shall be rounded to the next higher multiple of $0.10. “(B) Subparagraph (A)(ii) shall not apply with respect to monthly periodic benefits based in whole or in part on service which constituted ‘employment’ as defined in section 210 if such service was performed for at least 60 months in the aggregate during the period beginning January 1, 1988, and ending with the close of the first calendar month as of the end of which the widow (or surviving divorced wife) is eligible for benefits under this subsection and has made a valid application for such benefits.”. (d) Widower’s Insurance Benefits.— Paragraph (2) of section 202(f) of such Act is amended— 42 USC 402. (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by striking subparagraph (A) and inserting the following: “(A) The amount of a widower’s insurance benefit for each month (as determined after application of the provisions of subsections (q) and (k), paragraph (3)(D), and paragraph (4)) shall be reduced (but not below zero) by an amount equal to two-thirds of the amount of any monthly periodic benefit payable to the widower (or surviving divorced husband) for such month which is based upon his earnings while in the service of the Federal Government or any State (or political subdivision thereof, as defined in section 218(b)(2)) if, on the last day he was employed by such entity— “(i) such service did not constitute ‘employment’ as defined in section 210, or “(ii) such service was being performed while in the service of the Federal Government, and constituted ‘employment’ as so defined solely by reason of— “(I) clause (ii) or (iii) of subparagraph (G) of section 210(a)(5), where the lump-sum payment described in such clause (ii) or the cessation of coverage described in such clause (iii) (whichever is applicable) was received or occurred on or after January 1, 1988, or “(II) an election to become subject to chapter 84 of title 5, United States Code, made pursuant to law after December 31, 1987, unless subparagraph (B) applies. The amount of the reduction in any benefit under this subparagraph, if not a multiple of $0.10, shall be rounded to the next higher multiple of $0.10. “(B) Subparagraph (A)(ii) shall not apply with respect to monthly periodic benefits based in whole or in part on service which constituted ‘employment’ as defined in section 210 if such service was performed for at least 60 months in the aggregate during the period beginning January 1, 1988, and ending with the close of the first calendar month as of the end of which the widower (or surviving divorced husband) is eligible for benefits under this subsection and has made a valid application for such benefits.”. (e) Mother’s and Father’s Insurance Benefits.— Paragraph (4) of section 202(g) of such Act is amended— 42 USC 202. (1) by redesignating subparagraph (B) as subparagraph (C); and (2) by striking subparagraph (A) and inserting the following: “(A) The amount of a mother’s or father’s insurance benefit for each month (as determined after application of the provisions of subsection (k)) shall be reduced (but not below zero) by an amount equal to two-thirds of the amount of any monthly periodic benefit payable to the individual for such month which is based upon the individual’s earnings while in the service of the Federal Government or any State (or political subdivision thereof, as defined in section 218(b)(2)) if, on the last day the individual was employed by such entity— “(i) such service did not constitute ‘employment’ as defined in section 210, or “(ii) such service was being performed while in the service of the Federal Government, and constituted ‘employment’ as so defined solely by reason of— “(I) clause (ii) or (iii) of subparagraph (G) of section 210(a)(5), where the lump-sum payment described in such clause (ii) or the cessation of coverage described in such clause (iii) (whichever is applicable) was received or occurred on or after January 1, 1988, or “(II) an election to become subject to chapter 84 of title 5, United States Code, made pursuant to law after December 31, 1987, unless subparagraph (B) applies. The amount of the reduction in any benefit under this subparagraph, if not a multiple of $0.10, shall be rounded to the next higher multiple of $0.10. “(B) Subparagraph (A)(ii) shall not apply with respect to monthly periodic benefits based in whole or in part on service which constituted ‘employment’ as defined in section 210 if such service was performed for at least 60 months in the aggregate during the period beginning January 1, 1988, and ending with the close of the first calendar month as of the end of which the individual is eligible for benefits under this subsection and has made a valid application for such benefits.”. (f) Effective Date.— The amendments made by this section shall 42 USC 402 note. apply only with respect to benefits for months after December 1987; except that nothing in such amendments shall affect any exemption (from the application of the pension offset provisions contained in subsection (b)(4), (c)(2), (e)(7), (f)(2), or (g)(4) of section 202 of the Social Security Act) which any individual may have by reason of subsection (g) or (h) of section 334 of the Social Security Amendments of 1977. SEC. 9008. MODIFICATION OF AGREEMENT WITH IOWA TO PROVIDE COVERAGE FOR CERTAIN POLICEMEN AND FIREMEN. (a) In General.— Notwithstanding subsection (d)(5)(A) of section 218 of the Social Security Act and the references thereto in subsec-tions (d)(1) and (d)(3) of such section 218, the agreement with the State of Iowa heretofore entered into pursuant to such section 218 may, at any time prior to January 1, 1989, be modified pursuant to subsection (c)(4) of such section 218 so as to apply to services performed in policemen’s or firemen’s positions required to be covered by a retirement system pursuant to section 410.1 of the Iowa Code as in effect on July 1, 1953, if the State of Iowa has at any time prior to the date of the enactment of this Act paid to the Secretary of the Treasury, with respect to any of the services performed in such positions, the sums prescribed pursuant to subsection (e)(1) of such section 218 (as in effect on December 31, 1986, with respect to payments due with respect to wages paid on or before such date). (b) Service to Be Covered.— Notwithstanding the provisions of subsection (e) of section 218 of the Social Security Act (as so redesignated by section 9002(c)(1) of the Omnibus Budget Reconciliation Act of 1986)), any modification in the agreement with the State of Iowa under subsection (a) shall be made effective with respect to— (1) all services performed in any policemen’s or firemen’s , position to which the modification relates on or after January 1, 1987, and (2) all services performed in such a position before January 1, 1987, with respect to which the State of Iowa has paid to the Secretary of the Treasury the sums prescribed pursuant to subsection (e)(1) of such section 218 (as in effect on December 31, 1986, with respect to payments due with respect to wages paid on or before such date) at the time or times established pursuant to such subsection (e)(1), if and to the extent that— (A) no refund of the sums so paid has been obtained, or (B) a refund of part or all of the sums so paid has been obtained but the State of Iowa repays to the Secretary of the Treasury the amount of such refund within 90 days after the date on which the modification is agreed to by the State and the Secretary of Health and Human Services. SEC. 9009. CONTINUATION OF DISABILITY BENEFITS DURING APPEAL. Subsection (g) of section 223 of the Social Security Act is 42 USC 423. amended— (1) in paragraph (l)(iii), by striking “June 1988” and inserting “June 1989”; and (2) in paragraph (3)(B), by striking “January 1, 1988” and inserting “January 1, 1989”. SEC. 9010. EXTENSION OF DISABILITY RE-ENTITLEMENT PERIOD FROM 15 MONTHS TO 36 MONTHS. (a) Disability Insurance Benefits.— Paragraph (1) of section 223(a) of the Social Security Act is amended by striking “15 months” and inserting “36 months”. (b) Child’s Insurance Benefits Based On Disability.— Clause (i) of section 202(d)(1)(G) of such Act is amended by striking “15 42 USC 402. months” and inserting “36 months”. (c) Widow’s Insurance Benefits Based On Disability.— Paragraph (1) of section 202(e) of such Act is amended, in subclause (II) of the last sentence, by striking “15 months” and inserting “36 months”. (d) Widower’s Insurance Benefits Based On Disability.— Paragraph (1) of section 202(f) of such Act is amended, in subclause (II) of the last sentence, by striking “15 months” and inserting “36 months”. (e) Conforming Amendments.— (1) Termination of Period of Disability.— Subparagraph (D) of section 216(i)(2) of such Act is amended by striking “15- 42 USC 416. month” and inserting “36-month”. (2) Termination of benefits during re-entitlement period.— Subsection (e) of section 223 of such Act is amended by striking “15-month” and inserting “36-month”. (3) Special rule for 8787Copy read “For”.determination of continued medicare eligibility based on entitlement to disability benefits.— Section 226(b) of such Act is amended by adding at the end the following new sentence: “In determining when an individual’s entitlement or status terminates for purposes of the preceding sentence, the second sentence of section 223(a) shall be applied as though the term ‘36 months’ (in such second sentence) read ‘15 months’.”. (f) Effective Date.— The amendments made by this section shall 42 USC 402 note. take effect January 1, 1988, and shall apply with respect to— (1) individuals who are entitled to benefits which are payable under subsection (d)(1)(B)(ii), (d)(6)(A)(ii), (d)(6)(B), (e)(1)(B)(ii), or (f)(1)(B)(ii) of section 202 of the Social Security Act or subsection (a)(1) of section 223 of such Act for any month after December 1987, and (2) individuals who are entitled to benefits which are payable under any provision referred to in paragraph (1) for any month before January 1988 and with respect to whom the 15-month period described in the applicable provision amended by this section has not elapsed as of January 1, 1988. PART 2— OTHER SOCIAL SECURITY PROVISIONS SEC. 9021. MORATORIUM ON REDUCTIONS IN ATTORNEYS’ FEES; STUDIES OF ATTORNEYS’ FEE PAYMENT SYSTEM. (a) Moratorium.— (1) The provisions of the memorandum of the Associate Commissioner of Social Security dated March 31, 1987 (relating to revised delegations of authority for administrative law judges to determine fees of representatives) which amend sections 1–220 through 1–226 of the Office of Hearings and Appeals Staff Guides and Programs Digest (commonly referred to as the OHA Handbook), and Interim Circular No. 122 (relating to the determination authority regarding fees for representation of claimants), are hereby declared to be null and void. The preceding sentence shall apply with respect to all attorneys’ fees finally authorized in connection with claims for benefits under title II of the Social Security Act on and after the date of the enactment of this Act, regardless of when the legal services involved were performed; and no reconsideration of any such fee finally authorized prior to that date shall be required. (2) Until July 1, 1989, neither the Secretary nor the Social Security Administration may modify any of the rules and regulations relating to attorneys’ fees in connection with claims for benefits under title II of the Social Security Act. (b) Studies.— (1) The Secretary of Health and Human Services shall conduct a study of the attorneys’ fee payment process under title II of the Social Security Act. Such study shall— (A) assess the levels of reimbursement to attorneys, giving consideration to the contingent nature of most arrangements between claimants and their legal representatives, and propose alternative methods for establishing fees which take the nature of these arrangements into account, and (B) suggest changes aimed at eliminating unnecessary delays in the approval and payment of attorneys’ fees and thereby streamlining the payment process. In conducting this study, the Secretary shall consult with individuals who represent the views of attorneys and with others who represent the views of claimants. (2) At the same time, the Comptroller General shall conduct a study of the fee approval system, including at a minimum— (A) a study of the impact of the current system on claimants and attorneys, (B) an identification of obstacles to the timely payment of attorneys’ fees under present law, and (C) an assessment of the effect, if any, which the reduced limit on attorneys’ fees in effect immediately prior to the enactment of this Act has had on access to legal representation by applicants for disability insurance benefits. (3) The studies required by paragraphs (1) and (2), along with any recommendations resulting therefrom, shall be submitted to the Congress no later than July 1, 1988. SEC. 9022. CORPORATE DIRECTORS. (a) Social Security Act Amendment.— Section 211(a) of the Social Security Act is amended by adding at the end thereof the 42 USC 411. following new paragraph: “Any income of an individual which results from or is attributable to the performance of services by such individual as a director of a corporation during any taxable year shall be deemed to have been derived (and received) by such individual in that year, at the time the services were performed, regardless of when the income is actually paid to or received by such individual (unless it was actually paid and received prior to that year).”. (b) SECA Amendment.— Section 1402(a) of the Internal Revenue Code of 1986 (relating to definition of net earnings from self-employment) 26 USC 1402. is amended by adding at the end thereof the following new paragraph: “Any income of an individual which results from or is attributable to the performance of services by such individual as a director of a corporation during any taxable year shall be deemed to have been derived (and received) by such individual in that year, at the time the services were performed, regardless of when the income is actually paid to or received by such individual (unless it was actually paid and received prior to that year).”. (c) Effective Date.— The amendments made by this section shall apply with respect to services performed in taxable years beginning on or after January 1, 1988. SEC. 9023. TECHNICAL CORRECTIONS. (a) The heading of section 210(p) of the Social Security Act is 42 USC 410. amended to read as follows: “Medicare Qualified Government Employment”. (b) (1) Section 211(a)(7) of such Act is amended— 42 USC 411. (A) by inserting “and” before “section 911”; and (B) by striking “and section 931 (relating to income from sources within possessions of the United States) of the Internal Revenue Code of 1954”. (2) Section 211(a)(8) of such Act is amended to read as follows: “(8) The exclusion from gross income provided by section 931 of the Internal Revenue Code of 1986 shall not apply;—. (c) Section 218(v) of such Act is amended— 42 USC 418. (1) by striking “(v)” and inserting “(n)”; (2) by striking paragraph (3); and (3) by redesignating paragraphs (4) and (5) as paragraphs (3) and (4) respectively. (d) Section 3121(a)(5) of the Internal Revenue Code of 1986 is 26 USC 3121. amended— (1) by striking “; or” at the end of subparagraph (F) and inserting “, or”; and (2) by striking the comma at the end of subparagraph (G) and inserting a semicolon. PART 3— RAILROAD RETIREMENT PROGRAM SEC. 9031. INCREASE IN RATES OF TIER 2 RAILROAD RETIREMENT TAX ON EMPLOYEES FOR 1988 AND THEREAFTER. (a) In General.— Subsection (b) of section 3201 of the Internal Revenue Code of 1986 (relating to tier 2 employee tax) is amended to read as follows: “(b) Tier 2 Tax.— In addition to other taxes, there is hereby imposed on the income of each employee a tax equal to 4.90 percent of the compensation received during any calendar year by such employee for services rendered by such employee.”. (b) Effective Date.— The amendment made by this section shall 26 USC 3201 note. apply with respect to compensation received after December 31, 1987. SEC. 9032. INCREASE IN RATES OF TIER 2 RAILROAD RETIREMENT TAX ON EMPLOYERS FOR 1988 AND THEREAFTER. (a) In General.— Subsection (b) of section 3221 of the Internal Revenue Code of 1986 (relating to tier 2 employer tax) is amended to read as follows: “(b) Tier 2 Tax.— In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 16.10 percent of the compensation paid during any calendar year by such employer for services rendered to such employer.”. (b) Effective Date.— The amendments made by this section shall 26 USC 3221 note. apply with respect to compensation paid after December 31, 1987. SEC. 9033. COMMISSION ON RAILROAD RETIREMENT REFORM. (a) Commission on Railroad Retirement Reform.— There is established a commission to be known as the Commission on Railroad Retirement Reform (in this section referred to as the “Commission”). (b) Study.— The Commission shall conduct a comprehensive study of the issues pertaining to the long-term financing of the railroad retirement system (in this section referred to as the “system”) and the system’s short-term and long-term solvency. The Commission Reports. shall submit a report containing a detailed statement of its findings and conclusions together with recommendations to the Congress for revisions in, or alternatives to, the current system to assure the provision of retirement benefits to former, present, and future railroad employees on an actuarially sound basis. The study will take into account— (1) the possibility of restructuring the financing of railroad retirement benefits through increases in the tier 2 tax rate, increases in the tier 2 tax wage base, the imposition of a tax on operating revenues, revisions in the investment policy of the railroad retirement pension fund, and establishing a privately funded and administered railroad industry pension plan; (2) the economic outlook for the railroad industry, and the nature of the relationships between the railroad retirement system, levels of railroad employment and compensation, and the performance of the rail sector; (3) the ability of the system under current law to pay benefits to current and future retirees and other beneficiaries; (4) the financial relationship of the system to the railroad unemployment insurance system, the social security system, and the General Fund; and (5) any other matters which the Commission considers would be necessary, appropriate, or useful to the Congress in developing legislation to reform the system. (c) Membership of the Commission.— (1) Number and appointment.— The Commission shall be composed of seven members, as follows: (A) four individuals appointed by the President— President of U.S. (i) one of whom shall be appointed on the basis of recommendations made by representatives of employers (as defined in section 1(a) of the Railroad Retirement Act of 1974) so as to provide representation on the Commission satisfactory to the largest number of employers concerned, (ii) one of whom shall be appointed on the basis of recommendations made by representatives of employees (as defined in section 1(b) of the Railroad Retirement Act of 1974) so as to provide representation on the Commission satisfactory to the largest number of employees concerned, (iii) one of whom shall be appointed on the basis of recommendations made by representatives of commuter railroads, and (iv) one of whom shall be appointed from members of the public; (B) one individual appointed by the Speaker of the House of Representatives from among members of the public; (C) one individual appointed by the President pro tempore of the Senate from among members of the public; and (D) one individual appointed by the Comptroller General from among members of the public with expertise in the fields of retirement systems and pension plans. All public members of the Commission shall be appointed from among individuals who are not in the employment of and are not pecuniarily or otherwise interested in any employer (as so defined) or organization of employees (as so defined). In making President of U.S. appointments under this section, the President, the Speaker of the House of Representatives, and the President pro tempore of the Senate shall ensure that the members of the Commission, collectively, possess special knowledge of retirement income policy, social insurance, private pensions, taxation, and the structure of the transportation industry. A vacancy in the Commission shall be filled in the manner in which the original appointment was made. (2) Pay.— Members of the Commission shall serve without compensation, but shall be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of their duties as members of the Commission. (3) Quorum.— Five members of the Commission shall constitute a quorum but a lesser number may hold hearings. (4) Chairman.— The members of the Commission shall elect a Chairman 87a87aCopy read “chairman”. from among the membership. (d) Staff of Commission; Experts and Consultants.— (1) Staff.— Subject to such rules as may be prescribed by the Commission, the Chairman may appoint and fix the pay of such personnel as the Chairman considers appropriate. (2) Applicability of certain civil service laws.— The staff of the Commission may be appointed without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, except that no individual so appointed may receive pay in excess of the annual rate of basic pay payable for GS–18 of the General Schedule. (3) Experts and consultants.— Subject to such rules as may be prescribed by the Commission, the Chairman may procure temporary and intermittent services under section 3109(b) of title 5 of the United States Code, but at rates for individuals not to exceed the daily equivalent of the maximum annual rate of basic pay payable for GS–18 of the General Schedule. (4) Staff of federal agencies.— Upon request of the Commission, the Railroad Retirement Board and any other Federal agency may detail, on a reimbursable basis, any of the personnel thereof to the Commission to assist the Commission in carrying out its duties under this section. (e) Access to Official Data and Services.— (1) Official data.— The Commission may, as appropriate, secure directly from any department or agency of the United States information necessary to enable it to carry out this section. Upon request of the Chairman of the Commission, the head of such department or agency shall, as appropriate, furnish such information to the Commission. (2) Mails.— The Commission may use the United States mails in the same manner and under the same conditions as other departments and agencies of the United States. (3) Administrative support services.— The Administrator of General Services shall provide to the Commission on a reimbursable basis such administrative support services as the Commission may request. (f) Report.— The Commission shall transmit a report to the President and to each House of the Congress not later than October 1, 1989. The report shall contain a detailed statement of the findings and conclusions of the Commission, together with its legislative recommendations. (g) Termination.— The Commission shall cease to exist 60 days after submitting its report pursuant to subsection (f). (h) Authorization of appropriations.— There is authorized to be appropriated the sum of $1,000,000 for purposes of this section, to remain available until expended but in no event beyond the date of termination provided in subsection (g). SEC. 9034. TRANSFER TO RAILROAD RETIREMENT ACCOUNT. Subsection (c)(1)(A) of section 224 of the Railroad Retirement Solvency Act of 1983 (relating to section 72(r) revenue increase 45 USC 231n note. transferred to certain railroad accounts) is amended— (1) by inserting “(other than amounts described in subparagraph (B))” after “amounts”; (2) by striking “1988” and inserting “1989”; and (3) by striking the last sentence. Subtitle B— Provisions Relating to Public Assistance and Unemployment Compensation PART 1— AFDC AND SSI AMENDMENTS SEC. 9101. PERMANENT EXTENSION OF DISREGARD OF NONPROFIT ORGANIZATIONS’ IN-KIND ASSISTANCE TO SSI AND AFDC RECIPIENTS. Effective as of October 1, 1987, section 2639(d) of the Deficit Effective date. 42 USC 602 note. Reduction Act of 1984 is amended by striking “; but” and all that follows and inserting a period. SEC. 9102. FRAUD CONTROL UNDER AFDC PROGRAM. (a) In General.— Part A of title IV of the Social Security Act is amended by adding at the end the following new section: “fraud control “Sec. 416. (a) Any State, in the administration of its State plan 42 USC 616. approved under section 402, may elect to establish and operate a fraud control program in accordance with this section. “(b) Under any such program, if an individual who is a member of a family applying for or receiving aid under the State plan approved under section 402 is found by a Federal or State court or pursuant to an administrative hearing meeting requirements determined in regulations of the Secretary, on the basis of a plea of guilty or nolo contendere or otherwise, to have intentionally— “(1) made a false or misleading statement or misrepresented, concealed, or withheld facts, or “(2) committed any act intended to mislead, misrepresent, conceal, or withhold facts or propound a falsity, for the purpose of establishing or maintaining the family’s eligibility for aid under such State plan or of increasing (or preventing a reduction in) the amount of such aid, then the needs of such individual shall not be taken into account in making the determination under section 402(3)(7) with respect to his or her family (A) for a period of 6 months upon the first occasion of any such offense, (B) for a period of 12 months upon the second occasion of any such offense, and (C) permanently upon the third or a subsequent occasion of any such offense. “(c) The State agency involved shall proceed against any individual alleged to have committed an offense described in subsection (b) either by way of administrative hearing or by referring the matter to the appropriate authorities for civil or criminal action in a court of law. The State agency shall coordinate its actions under this section with any corresponding actions being taken under the food stamp program in any case where the factual issues involved arise from the same or related circumstances. “(d) Any period for which sanctions are imposed under subsection (b) shall remain in effect, without possibility of administrative stay, unless and until the finding upon which the sanctions were imposed is subsequently reversed by a court of appropriate jurisdiction; but in no event shall the duration of the period for which such sanctions are imposed be subject to review. “(e) The sanctions provided under subsection (b) shall be in addition to, and not in substitution for, any other sanctions which may be provided for by law with respect to the offenses involved. “(f) Each State which has elected to establish and operate a fraud control program under this section must provide all applicants for aid to families with dependent children under its approved State plan, at the time of their application for such aid, with a written notice of the penalties for fraud which are provided for under this section.” (b) State Plan Requirement.— Section 402(a) of such Act is 42 USC 602. amended— (1) by striking “and” after the semicolon at the end of paragraph (38); (2) by striking the period at the end of paragraph (39) and inserting “; and”; and (3) by inserting immediately after paragraph (39) the following new paragraph: “(40) provide, if the State has elected to establish and operate a fraud control program under section 416, that the State will submit to the Secretary (with such revisions as may from time to time be necessary) a description of and budget for such program, and will operate such program in full compliance with that section.”. (c) Federal Matching.— Section 403(a)(3) of such Act is 42 USC 603. amended— (1) by striking “and” after the final comma in subparagraph (B); (2) by redesignating subparagraph (C) as subparagraph (D); (3) by inserting after subparagraph (B) the following new subparagraph: “(C) 75 percent of so much of such expenditures as are for the costs of carrying out a fraud control program under section 416, including costs related to the investigation, prosecution, and administrative hearing of fraudulent cases and the making of any resultant collections, and”; and (4) by striking “(C)” in the matter following subparagraph (D) (as redesignated by paragraph (2) of this subsection) and inserting “(D)”. 8888Copy read “Effective Date.—”. (d) Effective Date.— The amendments made by this section 42 USC 602 note. shall become effective April 1, 1988. SEC. 9103. EXCLUSION OF REAL PROPERTY WHEN IT CANNOT BE SOLD. (a) In General.— Section 1613(b) of the Social Security Act is 42 USC 1382b. amended— (1) by inserting “(1)” after “(b)”; and (2) by adding at the end the following new paragraph: Notwithstanding the provisions of paragraph (1), the Secretary shall not require the disposition of any real property for so long as it cannot be sold because (A) it is jointly owned (and its sale would cause undue hardship, due to loss of housing, for the other owner or owners), (B) its sale is barred by a legal impediment, or (C) as determined under regulations issued by the Secretary, the owner’s reasonable efforts to sell it have been unsuccessful.”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 1382b note. shall become effective April 1, 1988. SEC. 9104. ADJUSTMENT OF PENALTY WHERE ASSET IS TRANSFERRED FOR LESS THAN FAIR MARKET VALUE. 8989Copy read “In General.—”. (a) In General.— Section 1613(c) of the Social Security Act is amended— (1) by inserting immediately after “the exclusions under subsection (a)” in paragraph (1) the following: “, and subject to paragraph (4) of this subsection”; and (2) by adding at the end the following new paragraph: The Secretary shall by regulation provide for suspending the Regulations. application of paragraph (1) to the extent (in any instance) that the Secretary determines that such suspension is necessary to avoid undue hardship.”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 1382b note. shall become effective April 1, 1988. SEC. 9105. EXCLUSION OF INTEREST ON BURIAL ACCOUNTS. (a) In General.— Section 1613(d) of the Social Security Act is amended— (1) in paragraph (1), by striking “if the inclusion” and all that follows and inserting a period; and (2) in paragraph (3), by striking “aside” and inserting “aside in cases where the inclusion of any portion of the amount would cause the resources of such individual, or of such individual and spouse, to exceed the limits specified in paragraph (1) or (2) (whichever may be applicable) of section 1611(a)”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 1382b note. shall become effective April 1, 1988. SEC. 9106. EXCEPTION FROM SSI RETROSPECTIVE ACCOUNTING FOR AFDC AND CERTAIN OTHER ASSISTANCE PAYMENTS. (a) In General.— Section 1611(c) of the Social Security Act is 42 USC 1382. amended— (1) by striking “paragraphs (2), (3), and (4)” in paragraph (1) and inserting “paragraphs (2), (3), (4), and (5)”; (2) by redesignating paragraphs (5) and (6) as paragraphs (6) and (7), respectively; and (3) by inserting after paragraph (4) the following new paragraph: Notwithstanding paragraphs (1) and (2), any income which is paid to or on behalf of an individual in any month pursuant to (A) a State plan approved under part A of title IV of this Act (relating to aid to families with dependent children), (B) section 472 of this Act (relating to foster care assistance), (C) section 412(e) of the Immigration and Nationality Act (relating to assistance for refugees), (D) section 501(a) of Public Law 96–422 (relating to assistance for Cuban and Haitian entrants), or (E) the Act of November 2, 1921 (42 Stat. 208), as amended (relating to assistance furnished by the Bureau of Indian Affairs), shall be taken into account in determining the amount of the benefit under this title of such individual (and his eligible spouse, if any) only for that month, and shall not be taken into account in determining the amount of the benefit for any other month.”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 1382 note. shall become effective April 1, 1988 SEC. 9107. TECHNICAL AMENDMENT RELATING TO 1986 AMENDMENT CONCERNING THE TREATMENT OF CERTAIN COUPLES IN MEDICAL INSTITUTIONS. Effective November 10, 1986, section 1611(e)(5) of the Social Security Effective date. 42 USC 1382. Act is amended— (1) by striking “sharing a room or comparable accommodation in a hospital, home, or facility” and inserting “living in the same hospital, home, or facility”; and (2) by striking “shared such a room or accommodation” and inserting “lived in the same such hospital, home, or facility”. SEC. 9108. EXTENSION OF DEADLINE FOR DISABLED WIDOWS TO APPLY FOR MEDICAID PROTECTION UNDER 1984 AMENDMENTS. Effective July 1, 1987, section 1634(b)(3) of the Social Security Act Effective date. 42 USC 1383c. is amended by striking “during the 15-month period beginning with the month in which this subsection is enacted” and inserting “no later than July 1, 1988”. SEC. 9109. INCREASE IN SSI EMERGENCY ADVANCE PAYMENTS. (a) In General.— Section 1631(a)(4)(A) of the Social Security Act is 42 USC 1383. amended by striking “a cash advance against such benefits in an amount not exceeding $100” and inserting “a cash advance against such benefits, including any federally-administered State supplementary payments, in an amount not exceeding the monthly amount that would be payable to an eligible individual with no other income for the first month of such presumptive eligibility”. (b) Effective Date.— The amendment made by subsection (a) 42 USC 1383 note. shall become effective on the date of the enactment of this Act. SEC. 9110. MODIFICATION OF INTERIM ASSISTANCE REIMBURSEMENT PROGRAM. (a) In General.— The first sentence of section 1631(g)(2) of the Social Security Act is amended by striking “at the time the Secretary makes the first payment of benefits” and inserting “at the time the Secretary makes the first payment of benefits with respect to the period described in clause (A) or (B) of paragraph (3)”. (b) Definition of Interim Assistance.— Section 1631(g)(3) of such Act is amended— (1) by inserting “(A)” after “basic needs”; and (2) by inserting before the period at the end the following: “, or (B) during the period beginning with the first month for which the individual's benefits (as defined in paragraph (2)) have been terminated or suspended if the individual was subsequently found to have been eligible for such benefits”, (c) Effective Date.— The amendments made by this section shall 42 USC 1383 note. become effective with the 13th month following the month in which this Act is enacted, or, if sooner, with the first month for which the Secretary of Health and Human Services determines that it is administratively feasible. SEC. 9111. SPECIAL NOTICE TO BLIND RECIPIENTS. (a) In General.— (1) Section 1631 of the Social Security Act is 42 USC 1383. amended by adding at the end the following new subsection: “Special Notice to Blind Individuals with Respect to Hearings and Other Official Actions “(l) (1) In any case where an individual who is applying for or receiving benefits under this title on the basis of blindness is entitled (under subsection (c) or otherwise) to receive notice from the Secretary of any decision or determination made or other action taken or proposed to be taken with respect to his or her rights under this title, such individual shall at his or her election be entitled either (A) to receive a supplementary notice of such decision, determination, or action, by telephone, within 5 working days after the initial notice is mailed, (B) to receive the initial notice in the form of a certified letter, or (C) to receive notification by some alternative procedure established by the Secretary and agreed to by the individual. “(2) The election under paragraph (1) may be made at any time; but an opportunity to make such an election shall in any event be given (A) to every individual who is an applicant for benefits under this title on the basis of blindness, at the time of his or her application, and (B) to every individual who is a recipient of such benefits on the basis of blindness, at the time of each redetermination of his or her eligibility. Such an election, once made by an individual, shall apply with respect to all notices of decisions, determinations, and actions which such individual may thereafter be entitled to receive under this title until such time as it is revoked or changed.”. (2) Not later than one year after the date on which the amendment 42 USC 1383 note. made by paragraph (1) becomes effective, the Secretary of Health and Human Services shall provide every individual receiving benefits under title XVI of the Social Security Act on the basis of blindness an opportunity to make an election under section 1631(1)(1) of such Act (as added by such amendment). (b) Study.— The Secretary of Health and Human Services shall Reports. 42 USC 1388 note. study the desirability and feasibility of extending special or supplementary notices of the type provided to blind individuals by section 1631(1) of the Social Security Act (as added by subsection (a) of this section) to other individuals who may lack the ability to read and comprehend regular written notices, and shall report the results of such study to the Congress, along with such recommendations as may be appropriate, within 12 months after the date of the enactment of this Act. (c) Effective Date.— The amendment made by subsection (a) shall 42 USC 1383 note. become effective July 1, 1988. SEC. 9112. REHABILITATION SERVICES FOR BLIND SSI RECIPIENTS. (a) In General.— Section 1631(a)(6) of the Social Security Act is 42 USC 1383. amended— (1) by inserting “blindness (as determined under section 1614(a)(2)) or” before “disability (as determined under section 1614(a)(3))”; (2) by inserting “blindness or other” before “physical or mental impairment”; and (3) by inserting “blindness and” before “disability benefit rolls” in subparagraph (B). (b) Effective Date.— The amendments made by subsection (a) 42 USC 1383 note. shall become effective April 1, 1988. SEC. 9113. EXTENDING THE NUMBER OF MONTHS THAT AN INDIVIDUAL IN A PUBLIC EMERGENCY SHELTER CAN BE ELIGIBLE FOR SSI. (a) In General.— Section 1611(e)(1)(D) of the Social Security Act is 42 USC 1382. amended by striking “three months in any 12-month period” and inserting “6 months in any 9-month period”. (b) Effective Date.— (1) The amendment made by subsection (a) 42 USC 1382 note. shall become effective January 1, 1988. (2) In the application of section 1611(e)(1)(D) of the Social Security Act on and after the effective date of such amendment, months before January 1988 in which a person was an eligible individual or eligible spouse by reason of such section shall not be taken into account. SEC. 9114. EXCLUSION OF UNDERPAYMENTS FROM RESOURCES. (a) In General.— Section 1613(a)(7) of the Social Security Act is 42 USC 1382b. amended by inserting after "shall be limited to the first 6 months following the month in which such amount is received" the following: “(or to the first 9 months following such month with respect to any amount so received during the period beginning October 1, 1987, and ending September 30, 1989)”. (b) Effective Date.— The amendment made by subsection (a) 42 USC 1382b note. shall become effective January 1, 1988. SEC. 9115. CONTINUATION OF FULL BENEFIT STANDARD FOR INDIVIDUALS TEMPORARILY INSTITUTIONALIZED. (a) In General.— Section 1611(e)(1) of the Social Security Act is amended— (1) in subparagraph (A), by striking “and (E)” and inserting “(E), and (G)”; (2) in subparagraph (B), by inserting “(subject to subparagraph (G))” after “throughout any month”; and (3) by adding at the end the following new subparagraphs: “(G) A person may be an eligible individual or eligible spouse for purposes of this title, and subparagraphs (A) and (B) shall not apply, with respect to any particular month throughout which he or she is an inmate of a public institution the primary purpose of which is the provision of medical or psychiatric care, or which is a hospital, extended care facility, nursing home, or intermediate care facility receiving payments (with respect to such individual or spouse) under a State plan approved under title XIX, if it is determined in accordance with subparagraph (H) that— “(i) such person’s stay in that institution or facility (or in that institution or facility and one or more other such institutions or facilities during a continuous period of institutionalization) is likely (as certified by a physician) not to exceed 3 months, and the particular month involved is one of the first 3 months throughout which such person is in such an institution or facility during a continuous period of institutionalization; and “(ii) such person needs to continue to maintain and provide for the expenses of the home or living arrangement to which he or she may return upon leaving the institution or facility. The benefit of any person under this title (including State supplementation if any) for each month to which this subparagraph applies shall be payable, without interruption of benefit payments and on the date the benefit involved is regularly due, at the rate that was applicable to such person in the month prior to the first month throughout which he or she is in the institution or facility. “(H) The Secretary shall establish procedures for the determinations Contracts. required by clauses (i) and (ii) of subparagraph (G), and may enter into agreements for making such determinations (or for providing information or assistance in connection with the making of such determinations) with appropriate State and local public and private agencies and organizations. Such procedures and agreements shall include the provision of appropriate assistance to individuals who, because of their physical or mental condition, are limited in their ability to furnish the information needed in connection with the making of such determinations.”. (b) Conforming Amendment.— Section 1902(1) of such Act is 42 USC 1396a. amended by striking “section 1611(e)(1)(E)” and inserting “subparagraph (E) or (G) of section 1611(e)(1)”. (c) Effective Date.— The amendments made by this section shall 42 USC 1382 note. become effective July 1, 1988. SEC. 9116. RETENTION OF MEDICAID WHEN SSI BENEFITS ARE LOST UPON ENTITLEMENT TO EARLY WIDOW’S OR WIDOWERS INSURANCE BENEFITS. (a) In General.— Section 1634 of the Social Security Act is 42 USC 1383c. amended by adding at the end the following new subsection: “(d) If any person— “(1) applies for and obtains benefits under subsection (e) or (f) of section 202 (or under any other subsection of section 202 if such person is also eligible for benefits under such subsection (e) or (f)) as required by section 1611(e)(2), being then at least 60 years of age but not entitled to hospital insurance benefits under part A of title XVIII, and “(2) is determined to be ineligible (by reason of the receipt of such benefits under section 202) for supplemental security income benefits under this title or for State supplementary payments of the type described in section 1616(a), such person shall nevertheless be deemed to be a recipient of supplemental security income benefits under this title for purposes of title XIX, so long as he or she (A) would be eligible for such supplemental security income benefits, or such State supplementary payments, in the absence of such benefits under section 202, and (B) is not entitled to hospital insurance benefits under part A of title XVIII.”. (b) Notice.— The Secretary of Health and Human Services, acting 42 USC 1383c note. through the Social Security Administration, shall (within 3 months after the date of the enactment of this Act) issue a notice to all individuals who will have attained age 60 but not age 65 as of April 1, 1988, and who received supplemental security income benefits under title XVI of the Social Security Act prior to attaining age 60 but lost those benefits by reason of the receipt of widow’s or widower’s insurance benefits (or other benefits as described in section 1634(d)(1) of that Act as added by subsection (a) of this section) under title II of that Act. Each such notice shall set forth and explain the provisions of section 1634(d) of the Social Security Act (as so added), and shall inform the individual that he or she should contact the Secretary or the appropriate State agency concerning his or her possible eligibility for medical assistance benefits under such title XIX. (c) State Determinations.— Any determination required under 42 USC 1383c note. section 1634(d) of the Social Security Act with respect to whether an individual would be eligible for benefits under title XVI of such Act (or State supplementary payments) in the absence of benefits under section 202 shall be made by the appropriate State agency. (d) Conforming Amendments.— Section 1922(a)(2) of the Social Security Act is amended— 42 USC 1396s. (1) by striking “1634 (b)” in subparagraph (B) and inserting “1634 (b) and (c)”; and (2) by adding at the end the following new subparagraph: “(C) Section 1634(d) of this Act (relating to individuals who lose eligibility for SSI benefits due to entitlement to early widow’s or widower’s insurance benefits under section 202 (e) or (f) of this Act).”. (e) Effective Date.— The amendments made by subsection (a) 42 USC 1383c note. shall apply with respect to any individual without regard to whether the determination of his or her ineligibility for supplemental security income benefits by reason of the receipt of benefits under section 202 of the Social Security Act 9090Copy read “Social Security (as”. (EIS described in section 1634(d)(2) of such Act) occurred before, on, or after the date of the enactment of this Act; but no individual shall be eligible for assistance under title XIX of such Act by reason of such amendments for any period before July 1, 1988. SEC. 9117. DEMONSTRATION PROGRAM TO ASSIST HOMELESS INDIVIDUALS. (a) In General.— The Secretary of Health and Human Services (in Grants. this section referred to as the “Secretary”) is authorized to make grants to States for projects designed to demonstrate and test the feasibility of special procedures and services to ensure that homeless individuals are provided SSI and other benefits under the Social Security Act to which they are entitled and receive assistance in using such benefits to obtain permanent housing, food, and health care. Each project approved under this section shall meet such conditions and requirements, consistent with this section, as the Secretary shall prescribe. (b) Scope of Projects.— Projects for which grants are made under Grants. this section shall include, more specifically, procedures and services to overcome barriers which prevent homeless individuals (particu-larly the chronically mentally ill) from receiving and appropriately using benefits, including— (1) the creation of cooperative approaches between the Social Security Administration, State and local governments, shelters for the homeless, and other providers of services to the homeless; (2) the establishment, where appropriate, of multi-agency SSI Outreach Teams (as described in subsection (c)), to facilitate communication between the agencies and staff involved in taking and processing claims for SSI and other benefits by the homeless who use shelters; (3) special efforts to identify homeless individuals who are potentially eligible for SSI or other benefits under the Social Security Act; (4) the provision of special assistance to the homeless in applying for benefits, including assistance in obtaining and developing evidence of disability and supporting documentation for nondisability-related eligibility requirements; (5) the provision of special training and assistance to public and private agency staff, including shelter employees, on disability eligibility procedures and evidentiary requirements; (6) the provision of ongoing assistance to formerly homeless individuals to ensure their responding to information requests related to periodic redeterminations of eligibility for SSI and other benefits; (7) the provision of assistance in ensuring appropriate use of benefit funds for the purpose of enabling homeless individuals to obtain permanent housing, nutrition, and physical and mental health care, including the use, where appropriate, of the disabled individual’s representative payee for case management services; and (8) such other procedures and services as the Secretary may approve. (c) SSI Outreach Team Projects.— (1) If a State applies for funds under this section for the purpose of establishing a multi-agency SSI Outreach Team, the membership and functions of such Team9191Copy read “team”. shall be as follows (except as provided in paragraph (2)): (A) The membership of the Team shall include a social services case worker (or case workers, if necessary); a consultative medical examiner who is qualified to provide consultative examinations for the Disability Determination Service of the State; a disability examiner, from the State Disability Determination Service; and a claims representative from an office of the Social Security Administration. (B) The Team shall have designated members responsible for— (i) identification of homeless individuals who are potentially eligible for SSI or other benefits under the Social Security Act; (ii) ensuring that such individuals understand their rights under the programs; (iii) assisting such individuals in applying for benefits, including assistance in obtaining and developing evidence and supporting documentation relating to disability- and nondisability-related eligibility requirements; (iv) arranging transportation and accompanying applicants to necessary examinations, if needed; and (v) providing for the tracking and monitoring of all claims for benefits by individuals under the project. (2) If the Secretary determines that an application by a State for an SSI Outreach Team Project under this section which proposes a membership and functions for such Team different from those prescribed in paragraph (1) but which is expected to be as effective, the Secretary may waive the requirements of such paragraph. (d) Information and Reports; Evaluation.— (1) Each State having an approved SSI Outreach Team Project shall periodically submit to the Secretary such information (with respect to the project) as may be necessary to enable the Secretary to evaluate such project in particular and the demonstration program under this section in general. (2) (A) The Secretary shall from time to time (but not less often than annually) submit to the Congress a full and complete report on the program under this section, together with a detailed evaluation of such program and of the projects thereunder along with such recommendations as may be deemed appropriate. Such evaluation and such recommendations shall be designed to serve as a basis for determining whether (and to what extent) the activities and procedures included in the demonstration program under this section should be continued, expanded, or modified, or converted (with or without changes) into a regular feature of permanent law. (B) The criteria used by the Secretary in evaluating the program and the projects thereunder shall not be limited to those which would normally be used in evaluating programs and activities of the kind involved, but shall fully take into account the special circumstances of the homeless and their need for personalized attention and follow-through assistance, and shall emphasize the extent to which the procedures and assistance made available to applicants under such projects are recognizing those circumstances and meeting that need. (e) Authorization of Appropriations.— To carry out this section, there are authorized to be appropriated to the Secretary— (A) the sum of $1,250,000 for the fiscal year 1988; (B) the sum of $2,500,000 for the fiscal year 1989; and (C) such sums as may be necessary for each fiscal year thereafter. SEC. 9118. ASSISTANCE TO HOMELESS AFDC FAMILIES. The Secretary of Health and Human Services may not take any Federal Register, publication. action, prior to October 1, 1988, that would have the effect of implementing in whole or in part the proposed regulation published in the Federal Register on December 14, 1987, with respect to emergency assistance and the need for and amount of assistance under the program of aid to families with dependent children, or that would change current policy with respect to any of the matters addressed in such proposed regulation. SEC. 9119. INCREASE IN PERSONAL NEEDS ALLOWANCE FOR SSI RECIPIENTS. (a) Increase in Standard.— Section 1611(e)(1)(B) of the Social Security Act is amended— 42 USC 1382. (1) by striking “$300 per year” in clauses (i) and (ii)(I) and inserting “$360 per year”; and (2) by striking “$600 per year” in clause (iii) and inserting “$720 per year”. (b) Mandatory Pass-Through of Increased Personal Needs Allowance.— Section 1618 of such Act is amended by adding at the 42 USC 1382g. end the following new subsection: “(g) In order for any State which makes supplementary payments of the type described in section 1616(a) (including payments pursuant to an agreement entered into under section 212(a) of Public Law 93–66) to recipients of benefits determined under section 1611(e)(1)(B), on or after October 1, 1987, to be eligible for payments pursuant to title XIX with respect to any calendar quarter which begins— “(1) after October 1, 1987, or, if later “(2) after the calendar quarter in which it first makes such supplementary payments to recipients of benefits so determined, such State must have in effect an agreement with the Secretary whereby the State will— “(3) continue to make such supplementary payments to recipients of benefits so determined, and “(4) maintain such supplementary payments to recipients of benefits so determined at levels which assure (with respect to any particular month beginning with the month in which this subsection is first effective) that— “(A) the combined level of such supplementary payments and the amounts payable to or on behalf of such recipients under section 1611(e)(1)(B) for that particular month, is not less than— “(B) the combined level of such supplementary payments and the amounts payable to or on behalf of such recipients under section 1611(e)(1)(B) for October 1987 (or, if no such supplementary payments were made for that month, the combined level for the first subsequent month for which such payments were made), increased— “(i) in a case to which clause (i) of such section 1611(e)(1)(B) applies or (with respect to the individual or spouse who is in the hospital, home, or facility involved) to which clause (ii) of such section applies, by $5, and “(ii) in a case to which clause (iii) of such section 1611(e)(1)(B) applies, by $10.”. (c) Effective Date.— The amendments made by subsections (a) 42 USC 1382 note. and (b) shall become effective July 1, 1988. SEC. 9120. EXCLUSION OF DEATH BENEFITS TO THE EXTENT SPENT ON LAST ILLNESS AND BURIAL. (a) In General.— Subparagraphs (D) and (E) of section 1612(a)(2) of the Social Security Act are amended to read as follows: 42 USC 1382a. “(D) payments to the individual occasioned by the death of another person, to the extent that the total of such payments exceeds the amount expended by such individual for purposes of the deceased person’s last illness and burial; “(E) support and alimony payments, and (subject to the provisions of subparagraph (D) excluding certain amounts expended for purposes of a last illness and burial) gifts (cash or otherwise) and inheritances; and”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 1382a note. note shall become effective April 1, 1988. SEC. 9121. DEMONSTRATION OF FAMILY INDEPENDENCE PROGRAM. (a) In General.— Upon application of the State of Washington and approval by the Secretary of Health and Human Services, the State of Washington (in this section referred to as the “State”) may conduct a demonstration project in accordance with this section for the purpose of testing whether the operation of its Family Independence Program enacted in May 1987 (in this section referred to as the “Program”), as an alternative to the AFDC program under title IV of the Social Security Act, would more effectively break the cycle of poverty and provide families with opportunities for economic independence and strengthened family functioning. (b) Nature of Project.— Under the demonstration project conducted under this section— (1) every individual eligible for aid under the State plan approved under section 402(a) of the Social Security Act shall be eligible to enroll in the Program, which shall operate simultaneously with the AFDC program so long as there are individuals who qualify for the latter; (2) cash assistance shall be furnished in a timely manner to all eligible individuals under the Program (and the State may not make expenditures for services under the Program until it has paid all necessary cash assistance), with no family receiving less in cash benefits than it would have received under the AFDC program; (3) individuals may be required to register, undergo assessment, and participate in work, education, or training under the Program, except that— (A) work or training may not be required in the case of— (i) a single parent of a child under six months of age, or more than one parent of such a child in a two-parent family, (ii) a single parent with a child of any age who has received assistance for less than six months, (iii) a single parent with a child under three years of age who has received assistance for less than three years, (iv) an individual under 16 years of age or over 64 years of age, (v) an individual who is incapacitated, temporarily ill, or needed at home to care for an impaired person, or (vi) an individual who has not yet been individually notified in writing of such requirement or of the expiration of his or her exempt status under this subparagraph; (B) participation in work or training shall in any case be voluntary during the first two years of the Program, and may thereafter be made mandatory only in counties where more than 50 percent of the enrollees can be placed in employment within three months after they are job ready; (C) in no case shall the work and training aspect of the Program be mandated in any county where the unemployment level is at least twice the State average; and (D) mandated work shall not include work in any position created by a reduction in the work force, a bona fide labor dispute, the decertification of a bargaining unit, or a new job classification which subverts the intention of the Program; (4) there shall be no change in existing State law which would eliminate guaranteed benefits or reduce the rights of applicants or enrollees; and (5) the Program shall include due process guarantees and procedures no less than those which are available to participants in the AFDC program under Federal law and regulation and under State law. (c) Waivers.— The Secretary shall (with respect to the project under this section) waive compliance with any requirements contained in title IV of the Social Security Act which (if applied) would prevent the State from carrying out the project or effectively achieving its purpose, or with the requirements of sections 1902(a)(1), 1902(e)(1), and 1916 of that Act Gout only to the extent necessary to enable the State to carry out the Program 9292Copy read “program”. as enacted by the State in April 1987). (d) Funding.— (1) The Secretary, under section 403(b) or 1903(d) of the Social Security Act, shall reimburse the State for its expenditures under the Program— (A) at a rate equal to the Federal matching rate applicable to the State under section 403(a)(1) (or 1118) of the Social Security Act, for cash assistance, medical assistance, and child care provided to enrollees; (B) at a rate equal to the applicable Federal matching rate under section 403(a)(3) of such Act, for administrative expenses; and (C) at the rate of 75 percent for an evaluation plan approved by the Secretary. (2) As a condition of approval of the project under this section, the State must provide assurances satisfactory to the Secretary that the total amount of Federal reimbursement over the period of the project will not exceed the anticipated Federal reimbursements (over that period) under the AFDC and Medicaid programs; but this paragraph shall not prevent the State from claiming reimbursement for additional persons who would qualify for assistance under the AFDC program, for costs attributable to increases in the State’s payment standard, or for any other federally-matched benefits or services. (e) Evaluation.— The State must satisfy the Secretary that the Program 9393Copy read “program”. will be evaluated using a reasonable methodology. (f) Duration of Project.— (1) The project under this section shall begin on the date on which the first individual is enrolled in the Program and (subject to paragraph (2)) shall end five years after that date. (2) The project may be terminated at any time, on six months written notice, by the State or (upon a finding that the State has materially failed to comply with this section) by the Secretary. SEC. 9122. CHILD SUPPORT DEMONSTRATION PROGRAM IN NEW YORK STATE. (a) In General.— Upon application by the State of New York and approval by the Secretary of Health and Human Services (in this section referred to as the “Secretary”), the State of New York (in this section referred to as the "State") may conduct a demonstration program in accordance with this section for the purpose of testing a State program as an alternative to the program of Aid to Families with Dependent Children under title IV of the Social Security Act. (b) Nature of Program.— Under the demonstration program conducted under this section— (1) all custodial parents of dependent children who are eligible for supplements under the State plan approved under section 402(a) of the Social Security Act (and such other types or classes of such parents as the State may specify) may elect to receive benefits under the State's Child Support Supplement Program in lieu of supplements under such plan; and (2) the Federal Government will pay to the State with respect to families receiving benefits under the State's Child Support Supplement Program the same amounts as would have been payable with respect to such families under sections 403 and 1903 of the Social Security Act as if the families were receiving aid and medical assistance under the State plans in effect with respect to such sections. (c) Waivers.— The Secretary shall (with respect to the program under this section) waive compliance with any requirements contained in title IV of the Social Security Act which (if applied) would prevent the State from carrying out the program or effectively achieving its purpose. (d) Conditions of Approval.— As a condition of approval of the program under this section, the State shall— (1) provide assurances satisfactory to the Secretary that the State— (A) will continue to make assistance available to all eligible children in the State who are in need of financial support, and (B) will continue to operate an effective child support enforcement program; (2) agree— (A) to have the program evaluated, and (B) to report interim findings to the Secretary at such Reports. times as the Secretary shall provide; and (3) satisfy the Secretary that the program will be evaluated using a reasonable methodology that can determine whether changes in work behavior and changes in earnings are attributable to participation in the program. (e) Application Process.— In order to participate in the program under this section, the State must submit an application under this section not later than two years after the date of enactment of this Act. The Secretary shall approve or disapprove the application of the State not later than 90 days after the date of its submission. If the application is disapproved, the Secretary shall provide to the State a statement of the reasons for such disapproval, of the changes needed to obtain approval, and of the date by which the State may resubmit the application. (f) Effective Date.— The program under this section shall commence not later than the first day of the third calendar quarter beginning on or after the date on which the application of the State is approved in accordance with subsection (e). (g) Duration of Program.— (1) Except as provided in paragraph (2), if the Secretary approves the application of the State, the demonstration program under this section shall be conducted for a period not to exceed five years. (2) (A) The Governor of the State may before the end of the period described in paragraph (1) terminate the demonstration program under this section if the Governor finds that the program is not successful in testing the State's Child Support Supplement Program as an alternative to the program under title IV of the Social Security Act. The Governor shall notify the Secretary of the decision to terminate the program not less than three months prior to the date of such termination. (B) The Secretary may terminate the program before the end of such period if the Secretary finds that the program is not in compliance with the terms of the application. The Secretary shall notify the Governor of the decision to terminate the program not less than three months prior to the date of such termination. SEC. 9123. TECHNICAL CORRECTION. The subsection of section 1631 of the Social Security Act which was added as subsection (j) by section 11006 of the Anti-Drug Abuse Act of 1986 is redesignated as subsection (m) and is moved to the end 42 USC 1383. of such section 1631 so that it appears immediately after subsection (1) thereof (as added by section 9111(a) of this Act); and the heading of such subsection is amended to read as follows: “Pre-Release Procedures for Institutionalized Persons”. PART 2— SOCIAL SERVICES, CHILD WELFARE SERVICES, AND OTHER PROVISIONS RELATING TO CHILDREN SEC. 9131. PERMANENT EXTENSION OF AUTHORITY FOR VOLUNTARY FOSTER CARE PLACEMENTS. (a) In General.— Section 102 of the Adoption Assistance and Child Welfare Act of 1980 is amended— 42 USC 672 note. (1) in subsection (a)(1) (in the matter preceding subparagraph (A)), by striking “and before October 1, 1987,”; (2) in subsection (c), by striking all that follows “September 30, 1979” and inserting a period; and (3) in subsection (e), by striking “with respect to which the amendments made by this section are in effect”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 672 note. shall become effective October 1, 1987. SEC. 9132. 2-YEAR EXTENSION OF FOSTER CARE CEILING AND OF AUTHORITY TO TRANSFER FOSTER CARE FUNDS TO CHILD WELFARE SERVICES. (a) In General.— Section 474 of the Social Security Act is 42 USC 674. amended— (1) in paragraphs (1), (2)(A)(iii), (2)(B), (4)(B), and (5)(A)(ii) of subsection (b), by striking “through 1987” and inserting “through 1989”; (2) in paragraph (5)(A) of subsection (b) (in the matter preceding clause (i)), by striking “October 1, 1987” and inserting “October 1, 1989”; and (3) in paragraphs (1) and (2) of subsection (c), by striking “through 1987” and inserting “through 1989”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 674 note. shall become effective October 1, 1987. SEC. 9133. MOTHER/INFANT FOSTER CARE. (a) In General.— Section 475(4) of the Social Security Act is 42 USC 675. amended— (1) by inserting “(A)” after “(4)”; and (2) by adding at the end the following new subparagraph: “(B) In cases where— “(i) a child placed in a foster family home or child-care institution is the parent of a son or daughter who is in the same home or institution, and “(ii) payments described in subparagraph (A) are being made under this part with respect to such child, the foster care maintenance payments made with respect to such child as otherwise determined under subparagraph (A) shall also include such amounts as may be necessary to cover the cost of the items described in that subparagraph with respect to such son or daughter.”, (b) Conforming Amendments Relating to Eligibility Under Other Programs.— (1) Section 402(a)(24) of such Act is amended by 42 USC 602. striking “if an individual is receiving benefits under title XVI, then, for the period for which such benefits are received,” and inserting the following: “if an individual is receiving benefits under title XVI or his costs in a foster family home or child-care institution are covered by the foster care maintenance payments being made to his or her minor parent as provided in section 475(4)(B), then, for the period for which such benefits are received or such costs are so covered”. (2) Section 472(h) of such Act is amended by adding at the end the 42 USC 672. following new sentence: “For purposes of the preceding sentence, a child whose costs in a foster family home or child-care institution are covered by the foster care maintenance payments being made with respect to his or her minor parent, as provided in section 475(4)(B), shall be considered a child with respect to whom foster care maintenance payments are made under this section.”. (3) (A) Section 473(a)(2)(A) of such Act is amended— 42 USC 673. (i) by striking “or” at the end of clause (i); (ii) by adding “or” at the end of clause (ii); and (iii) by adding after clause (ii) the following new clause: “(iii) is a child whose costs in a foster family home or child-care institution are covered by the foster care maintenance payments being made with respect to his or her minor parent as provided in section 475(4)(B),”. (B) Section 473(a)(2)(B)(iii) of such Act is amended by inserting “or (A)(iii)” after “(A)(ii)”. (4) Section 473(b) of such Act is amended by adding at the end the following new sentence: “ For purposes of the preceding sentence, a child whose costs in a foster family home or child-care institution are covered by the foster care maintenance payments being made with respect to his or her minor parent, as provided in section 475(4)(B), shall be considered a child with respect to whom foster care maintenance payments are being made under section 472.”. (c) Effective Date.— The amendments made by this section shall 42 USC 602 note. become effective April 1, 1988. SEC. 9134. INCREASED FUNDING FOR SOCIAL SERVICES BLOCK GRANTS. (a) Increase in Funding.— Section 2003(c) of the Social Security Act is amended— 42 USC 1397b. (A) by striking “and” at the end of paragraph (2); (B) in paragraph (3), by striking “year” the first place it appears and all that follows through the period and inserting “years 1984, 1985, 1986, and 1987, and for each succeeding fiscal year other than the fiscal year 1988; and”; and (C) by adding at the end the following new paragraph: “(4) $2,750,000,000 for the fiscal year 1988.”. (b) Requirement That Additional Funds Supplement and Not Supplant Funds Available from Other Sources.— The additional $50,000,000 made available to the States for the fiscal year 1988 pursuant to the amendments made by subsection (a) shall— (A) be used only for the purpose of providing additional services under title XX of the Social Security Act; and (B) be expended only to supplement the level of any funds that would, in the absence of the additional funds appropriated pursuant to such amendments, be available from other sources (including any amounts available under title XX of the Social Security Act without regard to such amendments) for services in accordance with such title, and shall in no case supplant such funds from other sources or reduce the level thereof SEC. 9135. EXTENSION OF SOCIAL SERVICES BLOCK GRANT AND CHILD WELFARE SERVICES PROGRAMS TO AMERICAN SAMOA. (a) Social Services Block Grant Program.— (1) Section 1101(a)(1) of the Social Security Act is amended by inserting “American 42 USC 1301. Samoa,” after “Guam,” in the last sentence. (2) (A) Section 2003(a) of such Act is amended by adding at the end the following new sentence: “The allotment for fiscal year 1989 and each succeeding fiscal year to American Samoa shall be an amount which bears the same ratio to the amount allotted to the Northern Mariana Islands for that fiscal year as the population of American Samoa bears to the population of the Northern Mariana Islands determined on the basis of the most recent data available at the time such allotment is determined.”. (B) Section 2003(b) of such Act is amended by inserting “American Samoa,” after “the Virgin Islands,” each place it appears. (b) Child Welfare Services Program.— (1) Section 1101(a)(1) of such Act is amended by adding at the end thereof the following new sentence: “Such term when used in part B of title IV also includes American Samoa.”. (2) Section 421(b) of such Act is amended by striking “and Guam” 42 USC 621. and inserting “Guam, and American Samoa”. (c) Effective Date.— The amendments made by this section shall 42 USC 621 note. apply with respect to fiscal years beginning on or after October 1, 1988. SEC. 9136. NATIONAL COMMISSION ON CHILDREN. Part A of title XI of the Social Security Act is amended by adding at the end the following new section: “national commission on children “Sec. 1139. (a) (1) There is hereby established a commission to be 42 USC 1320b–9. known as the National Commission on Children (in this section referred to as the ‘Commission’). “(b) (1) The Commission shall consist of— “(A) 12 members to be appointed by the President, President of U.S. “(B) 12 members to be appointed by the Speaker of the House of Representatives, and “(C) 12 members to be appointed by the President pro tempore of the Senate. “(2) The President, the Speaker, and the President pro tempore President of U.S. shall each appoint as members of the Commission— “(A) 4 individuals who— “(i) are representatives of organizations providing services to children, “(ii) are involved in activities on behalf of children, or “(iii) have engaged in academic research with respect to the problems and needs of children, “(B) 4 individuals who are elected or appointed public officials (at the Federal, State, or local level) involved in issues and programs relating to children, and “(C) 4 individuals who are parents or representatives of parents or parents' organizations. “(3) The appointments made pursuant to subparagraphs (B) and (C) of paragraph (1) shall be made in consultation with the chairmen of committees of the House of Representatives and the Senate, respectively, having jurisdiction over relevant Federal programs. “(c) (1) It shall be the duty and function of the Commission to serve Reports. as a forum on behalf of the children of the Nation and to conduct the studies and issue the report required by subsection (d). “(2) The Commission (and any committees that it may form) shall conduct public hearings in different geographic areas of the country, both urban and rural, in order to receive the views of a broad spectrum of the public on the status of the Nation's children and on ways to safeguard and enhance the physical, mental, and emotional well-being of all of the children of the Nation, including those with physical or mental disabilities, and others whose circumstances deny them a full share of the opportunities that parents of the Nation may rightfully expect for their children. “(3) The Commission shall receive testimony from individuals, and from representatives of public and private organizations and institutions with an interest in the welfare of children, including educators, health care professionals, religious leaders, providers of social services, representatives of organizations with children as members, elected and appointed public officials, and from parents and children speaking in their own behalf. “(d) The Commission shall submit to the President, and to the Reports. Committees on Finance and Labor and Human Resources of the Senate and the Committees on Ways and Means, Education and Labor, and Energy and Commerce of the House of Representatives, an interim report no later than September 30, 1988, and a final report no later than March 31, 1989, setting forth recommendations with respect to the following subjects: “(1) Questions relating to the health of children that the Commission shall address include— “(A) how to reduce infant mortality, “(B) how to reduce the number of low-birth-weight babies, “(C) how to reduce the number of children with chronic illnesses and disabilities, “(D) how to improve the nutrition of children, “(E) how to promote the physical fitness of children, “(F) how to ensure that pregnant women receive adequate prenatal care, “(G) how to ensure that all children have access to both preventive and acute care health services, and “(H) how to improve the quality and availability of health care for children. “(2) Questions relating to social and support services for children and their parents that the Commission shall address include— “(A) how to prevent and treat child neglect and abuse, “(B) how to provide help to parents who seek assistance in meeting the problems of their children, “(C) how to provide counseling services for children, “(D) how to strengthen the family unit, “(E) how children can be assured of adequate care while their parents are working or participating in education or training programs, “(F) how to improve foster care and adoption services, “(G) how to reduce drug and alcohol abuse by children and youths, and “(H) how to reduce the incidence of teenage pregnancy. “(3) Questions relating to education that the Commission shall address include— “(A) how to encourage academic excellence for all children at all levels of education, “(B) how to use preschool experiences to enhance educational achievement, “(C) how to improve the qualifications of teachers, “(D) how schools can better prepare the Nation's youth to compete in the labor market, “(E) how parents and schools can work together to help children achieve success at each step of the academic ladder, “(F) how to encourage teenagers to complete high school and remain in school to fulfill their academic potential, “(G) how to address the problems of drug and alcohol abuse by young people, “(H) how schools might lend support to efforts aimed at reducing the incidence of teenage pregnancy, and “(I) how schools might better meet the special needs of children who have physical or mental handicaps. “(4) Questions relating to income security that the Commission shall address include— “(A) how to reduce poverty among children, “(B) how to ensure that parents support their children to the fullest extent possible through improved child support collection services, including services on behalf of children whose parents are unmarried, and “(C) how to ensure that cash assistance to needy children is adequate. “(5) Questions relating to tax policy that the Commission shall address include— “(A) how to assure the equitable tax treatment of families with children, “(B) the effect of existing tax provisions, including the dependent care tax credit, the earned income tax credit, and the targeted jobs tax credit, on children living in poverty, “(C) whether the dependent care tax credit should be refundable and the effect of such a policy, “(D) whether the earned income tax credit should be adjusted for family size and the effect of such a policy, and “(E) whether there are other tax-related policies which would reduce poverty among children. “(6) In addition to addressing the questions specified in paragraphs (1) through (5), the Commission shall— “(A) seek to identify ways in which public and private organizations and institutions can work together at the community level to identify deficiencies in existing services for families and children and to develop recommendations to ensure that the needs of families and children are met, using all available resources, in a coordinated and comprehensive manner, and “(B) assess the existing capacities of agencies to collect and analyze data on the status of children and on relevant programs, identify gaps in the data collection system, and recommend ways to improve the collection of data and the coordination among agencies in the collection and utilization of data. The reports required by this subsection shall be based upon the testimony received in the hearings conducted pursuant to subsection (c), and upon other data and findings developed by the Commission. “(e) (1) (A) Members of the Commission shall first be appointed not later than 60 days after the date of the enactment of this section, for terms ending on March 31, 1989. “(B) A vacancy in the Commission shall not affect its powers, but shall be filled in the same manner as the vacant position was first filled. “(2) The Commission shall elect one of its members to serve as Chairman of the Commission. The Chairman shall be a nonvoting member of the Commission. “(3) A majority of the members of the Commission shall constitute a quorum for the transaction of business. “(4) (A) The Commission shall meet at the call of the Chairman, or at the call of a majority of the members of the Commission. “(B) The Commission shall meet not less than 4 times during the period beginning with the date of the enactment of this section and ending with March 31, 1989. “(5) Decisions of the Commission shall be according to the vote of a simple majority of those present and voting at a properly called meeting, “(6) Members of the Commission shall serve without compensation, but shall be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of their duties as members of the Commission. “(f) (1) The Commission shall appoint an Executive Director of the Commission who shall be compensated at a rate fixed by the Commission, but which shall not exceed the rate established for level V of the Executive Schedule under title 5, United States Code. “(2) In addition to the Executive Director, the Commission may appoint and fix the compensation of such personnel as it deems advisable, in accordance with the provisions of title 5, United States Code, governing appointments to the competitive service, and the provisions of chapter 51 and subchapter III of chapter 53 of such title, relating to classification and General Schedule pay rates. “(g) In carrying out its duties, the Commission, or any duly organized committee thereof, is authorized to hold such hearings, sit and act at such times and places, and take such testimony, with respect to matters for which it has a responsibility under this section, as the Commission or committee may deem advisable. “(h) (1) The Commission may secure directly from any department or agency of the United States such data and information as may be necessary to carry out its responsibilities. “(2) Upon request of the Commission, any such department or agency shall furnish any such data or information. “(i) The General Services Administration shall provide to the Commission, on a reimbursable basis, such administrative support services as the Commission may request. “(j) There are authorized to be appropriated such sums as may be necessary to carry out this section.”. Sec. 9137. BOARDER BABIES DEMONSTRATION PROJECT. Section 426 of the Social Security Act is amended— 42 USC 626. (1) by redesignating subsection (b) as subsection (c); and (2) by inserting immediately after subsection (a) the following new subsection: “(b) (1) There are authorized to be appropriated $4,000,000 for each of the fiscal years 1988, 1989, and 1990 for grants by the Secretary to public or private nonprofit entities submitting applications under this subsection for the purpose of conducting demonstration projects under this subsection to develop alternative care arrangements for infants who do not have health conditions that require hospitalization and who would otherwise remain in inappropriate hospital settings. “(2) The demonstration projects conducted under this section may include— “(A) multidisciplinary projects designed to prevent the inappropriate hospitalization of infants and to allow infants described in paragraph (1) to remain with or return to a parent in a residential setting, where appropriate care for the infant and suitable treatment for the parent (including treatment for drug or alcohol addiction) may be assured, with the goal (where possible) of rehabilitating the parent and eliminating the need for such care for the infant; “(B) multidisciplinary projects that assure appropriate, individualized care for such infants in a foster home or other non-medical residential setting in cases where such infant does not require hospitalization and would otherwise remain in inappropriate hospital settings, including projects to dem-onstrate methods to recruit, train, and retain foster care families; and “(C) such other projects as the Secretary determines will best serve the interests of such infants and will serve as models for projects that agencies or organizations in other communities may wish to develop. “(3) In the case of any project which includes the use of funds authorized under this subsection for the care of infants in foster homes or other non-medical residential settings away from their parents, there shall be developed for each such infant a case plan of the type described in section 475(1) (to the extent that such infant is not otherwise covered by such a plan), and each such project shall include a case review system of the type described in section 475(5) (covering each such infant who is not otherwise subject to such a system). “(4) In evaluating applications from entities proposing to conduct demonstration projects under this subsection, the Secretary shall give priority to those projects that serve areas most in need of alternative care arrangements for infants described in paragraph (1). “(5) No project may be funded unless the application therefor contains assurances that it will— “(A) provide for adequate evaluation; “(B) provide for coordination with local governments; “(C) provide for community education regarding the inappropriate hospitalization of infants; “(D) use, to the extent practical, other available private, local. State, and Federal sources for the provision of direct services; and “(E) meet such other criteria as the Secretary may prescribe. “(6) Grants may be used to pay the costs of maintenance and of Grants. necessary medical and social services (to the extent that these costs are not otherwise paid for under other titles of this Act), and for such other purposes as the Secretary may allow. “(7) The Secretary shall provide training and technical assistance to grantees, as requested.”. SEC. 9138. STUDY OF INFANTS AND CHILDREN WITH AIDS IN FOSTER CARE. (a) In General.— The Secretary of Health and Human Services (in this section referred to as the “Secretary”) shall conduct (or arrange for) a survey to determine— (1) the total number of infants and children in the United States who have been diagnosed as having acquired immune deficiency syndrome and who have been placed in foster care; (2) the problems encountered by social service agencies in placing infants and children with such syndrome in foster care; and (3) the potential increase (over the five-year period beginning on the date of the enactment of this Act) in the number of infants and children with such syndrome who will require foster care. For purposes of this section, an infant or child with acquired immune deficiency syndrome includes an infant or child who is infected with the virus associated with such syndrome. (b) Restriction on Scope of Survey.— In conducting (or arranging for) the survey under subsection (a), the Secretary shall assure that survey activities do not duplicate research activities conducted by the Centers for Disease Control. (c) Report.— Not later than 12 months after the date of enactment of this Act, the Secretary shall report to the Congress on the results of the survey conducted under subsection (a) and shall make recommendations to the Congress with respect to improving the care of infants and children with acquired immune deficiency syndrome who lack ongoing parental involvement and support. SEC. 9139. TECHNICAL CORRECTIONS. (a) The last sentence of section 472(a) of the Social Security Act is 42 USC 672. amended by striking out “473(a)(1)(B)” and inserting in lieu thereof “473(a)(2)(B)”. (b) Section 201(b)(2)(B) of the Immigration Reform and Control Act of 1986 is amended by striking out “Section 473(a)(1) of such Act” 42 USC 673. and inserting in lieu thereof “Section 473(a)(2) of such Act (as amended by section 1711(a) of the Tax Reform Act of 1986)”. PART 3— CHILD SUPPORT ENFORCEMENT AMENDMENTS SEC. 9141. CONTINUATION IN CHILD SUPPORT ENFORCEMENT SERVICES TO FAMILIES NO LONGER RECEIVING AFDC. (a) In General.— (1) Section 457(c) of the Social Security Act is 42 USC 657. amended to read as follows: “(c) Whenever a family with respect to which child support enforcement services have been provided pursuant to section 454(4) ceases to receive assistance under part A of this title, the State shall provide appropriate notice to the family and continue to provide such services, and pay any amount of support collected, subject to the same conditions and on the same basis as in the case of the individuals to whom services are furnished pursuant to section 454(6), except that no application or other request to continue services shall be required of a family to which this subsection applies, and the provisions of section 454(6)(B) may not be applied.”. (2) Section 454(5) of such Act is amended by striking “(except as 42 USC 654. provided in section 457(c))”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 654 note. shall become effective upon enactment. SEC. 9142. CHILD SUPPORT ENFORCEMENT SERVICES REQUIRED FOR CERTAIN FAMILIES RECEIVING MEDICAID. (a) In General.— Section 454 of the Social Security Act is amended— (1) (A) by striking “an assignment under section 402(a)(26) of this title” in paragraph (4)(A) and inserting “an assignment under section 402(a)(26) or section 1912”; (B) by striking “, and” at the end of paragraph (4)(A) and inserting “, or, in the case of such a child with respect to whom an assignment under section 1912 is in effect, the State agency administering the plan approved under title XIX determines pursuant to section 1912(a)(1)(B) that it is against the best interests of the child to do so, and”; and (C) by inserting “or medical assistance under a State plan approved under title XIX” immediately after “aid to families with dependent children” in paragraph (4)(B); and (2) (A) by striking “provide that,” and inserting “provide that (A)” in paragraph (5); and (B) by striking the semicolon at the end of paragraph (5) and inserting “; and (B) in any case in which support payments are collected for an individual pursuant to the assignment made under section 1912, such payments shall be made to the State for distribution pursuant to section 1912, except that this clause shall not apply to such payments for any month after the month in which the individual ceases to be eligible for medical assistance;”. (b) Effective Date.— The amendments made by subsection (a) 42 USC 654 note. shall become effective on July 1, 1988. SEC. 9143. REPEAL OF UNNECESSARY CHILD SUPPORT REVOLVING FUND. (a) In General.— Section 452(c) of the Social Security Act is 42 USC 652. amended to read as follows: “(c) The Secretary of the Treasury shall from time to time pay to each State for distribution in accordance with the provisions of section 457 the amount of each collection made on behalf of such State pursuant to subsection (b).”. (b) Effective Date.— The amendment made by subsection (a) 42 USC 652 note. shall apply with respect to amounts collected after the date of the enactment of this Act. PART 4— UNEMPLOYMENT COMPENSATION SEC. 9151. DETERMINATION OF AMOUNT OF FEDERAL SHARE WITH RESPECT TO CERTAIN EXTENDED BENEFITS PAYMENTS. For the purpose of determining the amount of the Federal payment 26 USC 3304 note. to any State under section 204(a)(1) of the Federal-State Extended Unemployment Compensation Act of 1970 with respect to the implementation of paragraph (3) of section 202 (a) of such Act (as added by section 1024(a) of the Omnibus Reconciliation Act of 1980), such paragraph shall be considered to apply only with respect to weeks of unemployment beginning after October 31, 1981, except that for any State in which the State legislature did not meet in 1981, it shall be considered to apply for such purpose only with respect to weeks of unemployment beginning after October 31, 1982. SEC. 9152. DEMONSTRATION PROGRAM TO PROVIDE SELF-EMPLOYMENT ALLOWANCES FOR ELIGIBLE INDIVIDUALS. (a) In General.— The Secretary of Labor (hereinafter in this section referred to as the "Secretary") shall carry out a demonstration program under this section for the purpose of making available self-employment allowances to eligible individuals. To carry out such program, the Secretary shall enter into agreements with three States that— (1) apply to participate in such program, and (2) demonstrate to the Secretary that they are capable of implementing the provisions of the agreement. (b) Selection of States.— (1) In determining whether to enter into an agreement with a State under this section, the Secretary shall take into consideration at least— (A) the availability and quality of technical assistance currently provided by agencies of the State to the self-employed; (B) existing local market conditions and the business climate for new, small business enterprises in the State; (C) the adequacy of State resources to carry out a regular unemployment compensation program and a program under this section; (D) the range and extent of specialized services to be provided by the State to individuals covered by such an agreement; (E) the design of the evaluation to be applied by the State to the program; and (F) the standards which are to be utilized by the State for the purpose of assuring that individuals who will receive self-employment assistance under this section will have sufficient experience (or training) and ability to be self employed. (2) The Secretary may not enter into an agreement with any State under this section unless the Secretary makes a determination that the State’s unemployment compensation program has adequate reserves. (c) Provisions of Agreements.— Any agreement entered into with a State under this section shall provide that— (1) each individual who is an eligible individual with respect to any benefit year beginning during the three-year period commencing on the date on which such agreement is entered into shall receive a self-employment allowance; (2) self-employment allowances made to any individual under this section shall be made in the same amount, on the same terms, and subject to the same conditions as regular or extended unemployment compensation, as the case may be, paid by such State; except that— (A) State and Federal requirements relating to availability for work, active search for work, or refusal to accept suitable work shall not apply to such individual; and (B) such individual shall be considered to be unemployed for purposes of the State and Federal laws applicable to unemployment compensation, as long as the individual meets the requirements applicable under this section to such individual; (3) to the extent that such allowances are made to an individual under this section, an amount equal to the amount of such allowances shall be charged against the amount that may be paid to such individual under State law for regular or extended unemployment compensation, as the case may be; (4) the total amount paid to an individual with respect to any benefit year under this section may not exceed the total amount that could be paid to such individual for regular or extended unemployment compensation, as the case may be, with respect to such benefit year under State law; (5) the State shall implement a program that— (A) is approved by the Secretary; (B) will not result in any cost to the Unemployment Trust Fund established by section 904(a) of the Social Security Act in excess of the cost which would have been incurred by such State and charged to such Fund if the State had not participated in the demonstration program under this section; (C) is designed to select and assist individuals for self-employment allowances, monitor the individual’s self-employment, and provide, as described in subsection (d), to the Secretary a complete evaluation of the use of such allowances; and (D) otherwise meets the requirements of this section; and (6) the State, from its general revenue funds, shall— (A) repay to the Unemployment Trust Fund any cost incurred by the State and charged to the Fund which exceeds the cost which would have been incurred by such State and charged to such Fund if the State had not participated in the demonstration program under this section; and (B) in any case in which any excess cost described in subparagraph (A) is not repaid in the fiscal year in which it was charged to the Fund, pay to the Fund an amount of interest, on the outstanding balance of such excess cost, which is sufficient (when combined with any repayment by the State described in subparagraph (A)) to reimburse the Fund for any loss which would not have been incurred if such excess cost had not been incurred. (d) Evaluation.— (1) Each State that enters into an agreement under this section shall carry out an evaluation of its activities under this section. Such evaluation shall be based on an experimental design with random assignment between a treatment group and a control group with not more than one-half of the individuals receiving assistance at any one time being assigned to the treatment group. (2) The Secretary shall use the data provided from such evaluation Reports. to analyze the benefits and the costs of the program carried out under this section, to formulate the reports under subsection (g), and to estimate any excess costs described in subsection (c)(6)(A). (e) Financing.— (1) Notwithstanding section 303(a)(5) of the Social Security Act and section 3304(a)(4) of the Internal Revenue Code of 1986, amounts in the unemployment fund of a State may be used by a State to make payments (exclusive of expenses of administration) for self-employment allowances made under this section to an individual who is receiving them in lieu of regular unemployment compensation. (2) In any case in which a self-employment allowance is made under this section to an individual in lieu of extended unemployment compensation under the Federal-State Extended Unemployment Compensation Act of 1970, payments made under this section for self-employment allowances shall be considered to be compensation described in section 204(a)(1) of such Act and paid under State law. (f) Limitation.— No funds made available to a State under title III of the Social Security Act or any other Federal law may be used for the purpose of administering the program carried out by such State under this section. (g) Report to Congress.— (1) Not later than two years after the date of the enactment of this Act, the Secretary shall submit an interim report to the Congress on the effectiveness of the demonstration program carried out under this section. Such report shall include— (A) information on the extent to which this section has been utilized; (B) an analysis of any barriers to such utilization; and (C) an analysis of the feasibility of extending the provisions of this section to individuals not covered by State unemployment compensation laws. (2) Not later than four years after the date of the enactment of this Act, the Secretary shall submit a final report to the Congress on such program. (h) Fraud and Overpayments.— (1) If an individual knowingly has made, or caused to be made by another, a false statement or representation of a material fact, or knowingly has failed, or caused another to fail, to disclose a material fact, and as a result of such false statement or representation or of such nondisclosure such individual has received payment under this section to which he was not entitled, such individual shall be— (A) ineligible for further assistance under this section; and (B) subject to prosecution under section 1001 of title 18, United States Code. (2) (A) If any person received any payment under this section to which such person was not entitled, the State is authorized to require such person to repay such assistance; except that the State agency may waive such repayment if it determines that— (i) the providing of such assistance or making of such payment was without fault on the part of such person; and (ii) such repayment would be contrary to equity and good conscience. (B) No repayment shall be required under subparagraph (A) until a determination has been made, notice thereof and an opportunity for a fair hearing has been given to the person, and the determination has become final. Any determination under such subparagraph shall be subject to review in the same manner and to the same extent as determinations under the State unemployment compensation law, and only in that manner and to that extent. (i) Definitions.— For purposes of this section— (1) the term “eligible individual” means, with respect to any benefit year, an individual who— (A) is eligible to receive regular or extended compensation under the State law during such benefit year; (B) is likely to receive unemployment compensation for the maximum number of weeks that such compensation is made available under the State law during such benefit year; (C) submits an application to the State agency for a self-employment allowance under this section; and (D) meets applicable State requirements, except that not more than (i) 3 percent of the number of individuals eligible to receive regular compensation in a State at the beginning of a fiscal year, or (ii) the number of persons who exhausted their unemployment compensation benefits in the fiscal year ending before such fiscal year, whichever is lesser, may be considered as eligible individuals for such State for purposes of this section during such fiscal year; (2) the term “self-employment allowance” means compensation paid under this section for the purpose of assisting an eligible individual with such individual’s self-employment; and (3) the terms “compensation”, “extended compensation”, “regular compensation”, “benefit year”, “State”, and “State law”, have the respective meanings given to such terms by section 205 of the Federal-State Extended Unemployment Compensation Act of 1970. SEC. 9153. EXTENSION OF FUTA TAX. (a) In General.— Paragraphs (1) and (2) of section 8301 of the Federal Unemployment Tax Act (26 U.S.C. 3301) are amended to read as follows: “(1) 6.2 percent in the case of calendar years 1988, 1989, and 1990; or “(2) 6.0 percent in the case of calendar year 1991 and each calendar year thereafter;”. (b) Effective Date.— The amendment made by subsection (a) 26 USC 3301 note. note. shall apply to wages paid on or after January 1, 1988. SEC. 9154. TRANSFER OF FUNDS INTO THE FEDERAL UNEMPLOYMENT ACCOUNT AND THE EXTENDED UNEMPLOYMENT COMPENSATION ACCOUNT. (a) In General.— Section 901 of the Social Security Act (42 U.S.C. 1101) is amended by adding at the end the following new subsection: “Transfers For Calendar Years 1988, 1989, and 1990 (1) With respect to calendar years 1988, 1989, and 1990, the Secretary of the Treasury shall transfer from the employment security administration account— “(A) to the Federal unemployment account an amount equal to 50 percent of the amount of tax received under section 3301(1) of the Federal Unemployment Tax Act which is attributable to the difference in the tax rates between paragraphs (1) and (2) of such section; and “(B) to the extended unemployment compensation account an amount equal to 50 percent of such amount of tax received. “(2) Transfers under this subsection shall be as of the beginning of the month succeeding the month in which the moneys were credited to the employment security administration account pursuant to subsection (b)(2) with respect to wages paid during such calendar years.”. (b) Increase in the Limitation on the Amounts in Such Accounts.— (1) Section 902(a)(2) of such Act (42 U.S.C. 1102(a)(2)) is amended by striking out “one-eighth” and inserting in lieu thereof “five-eighths”. (2) Section 905(b)(2)(B) of such Act (42 U.S.C. 1105a))(2)(B)) is amended by striking out “one-eighth” and inserting in lieu thereof “three-eighths”. (c) Conforming Amendments.— (1) Section 905(b)(1) of such Act (42 U.S.C. 1105(b)(1)) is amended by striking out the last sentence thereof. (2) Section 901(c)(3)(C) of such Act (42 U.S.C. 1101(c)(3)(C)) is amended by striking out “(i)” and all that follows through the period and inserting in lieu thereof “a tax rate of 0.6 percent.”. (d) Effective Date.— The amendments made by this section shall 42 USC 1101 note. become effective on the date of the enactment of this Act. SEC. 9155. INTEREST ON ADVANCES TO THE FEDERAL UNEMPLOYMENT ACCOUNT AND THE EXTENDED UNEMPLOYMENT COMPENSATION ACCOUNT. (a) Extended Unemployment Compensation Account.— Section 905(d) of the Social Security Act (42 U.S.C. 1105(d)) is amended— (1) by striking out “Without interest)” and “, without interest,”; and (2) by adding the following new sentence at the end: “Amounts appropriated as repayable advances for purposes of this subsection shall bear interest at a rate equal to the average rate of interest, computed as of the end of the calendar month next preceding the date of such advance, borne by all interest bearing obligations of the United States then forming part of the public debt; except that in cases in which such average rate is not a multiple of one-eighth of 1 percent, the rate of interest shall be the multiple of one-eighth of 1 percent next lower than such average rate.”. (b) Federal Unemployment Account.— Section 1203 of such Act (42 U.S.C. 1323) is amended— (1) by striking out “(without interest)” and “, without interest,”; and (2) by adding the following new sentence at the end: “Amounts appropriated as repayable advances for purposes of this subsection shall bear interest at a rate equal to the average rate of interest, computed as of the end of the calendar month next preceding the date of such advance, borne by all interest bearing obligations of the United States then forming part of the public debt; except that in cases in which such average rate is not a multiple of one-eighth of 1 percent, the rate of interest shall be the multiple of one-eighth of 1 percent next lower than such average rate.”. (c) Conforming Amendment.— Section 903(a)(1) of such Act (42 U.S.C. 1103(a)(1)) is amended by inserting “and interest” after “all advances”. (d) Effective Date.— The amendments made by this section shall 42 USC 1103 note. apply to advances made on or after the date of the enactment of this Act. SEC. 9156. CREDITING TO THE FEDERAL UNEMPLOYMENT ACCOUNT OF INTEREST EARNED ON ADVANCES TO THE STATES. (a) In General.— Section 1202 of the Social Security Act is 42 USC 1322. amended by adding at the end the following new subsection: “(c) Interest paid by States in accordance with this section shall be credited to the Federal unemployment account established by section 904(g) in the Unemployment Trust Fund.”. (b) Effective Date.— The amendment made by subsection (a) 42 USC 1322 note. shall apply to interest paid on advances made on or after the date of the enactment of this Act. Subtitle C— Manufacturers Excise Tax on Certain Vaccines SEC. 9201. MANUFACTURERS EXCISE TAX ON CERTAIN VACCINES. (a) In General.— Chapter 32 of the Internal Revenue Code of 1986 (relating to manufacturers excise taxes) is amended by inserting after subchapter B the following new subchapter: “Subchapter C— Certain Vaccines “Sec. 4131. Imposition of tax. “Sec. 4132. Definitions and special rules. “SEC. 4131. IMPOSITION OF TAX. “(a) General Rule.— There is hereby imposed a tax on any taxable vaccine sold by the manufacturer, producer, or importer thereof. “(b) Amount of Tax.— “(1) In General.— The amount of the tax imposed by subsecretion (a) shall be determined in accordance with the following table: “If the taxable vaccine is: The tax per dose is: DPT vaccine ............................... $4.56 DT vaccine ............................... 0.06 MMR vaccine ............................... 4.44 Polio vaccine ............................... 0.29 “(2) Combinations of vaccines.— If any taxable vaccine is included in more than 1 category of vaccines in the table contained in paragraph (1), the amount of the tax imposed by subsection (a) on such vaccine shall be the sum of the amounts determined under such table for each category in which such vaccine is so included. “(c) Termination of Tax if Amounts Collected Exceed Projected Fund Liability.— “(1) In general.— If the Secretary estimates under paragraph (3) that the Vaccine Injury Compensation Trust Fund would not have a negative projected balance were the tax imposed by this section to terminate as of the close of any applicable date, no tax shall be imposed by this section after such date. “(2) Applicable date.— For purposes of paragraph (1), the term ‘applicable date’ means— “(A) the close of any calendar quarter ending on or after December 31, 1992, and “(B) the 1st date on which petitions may not be filed under section 2111 and 2111(a) of the Public Health Service reason of section 2134 of such Act and each date thereafter. “(3) Estimates by secretary.— “(A) In general.— The Secretary shall estimate the projected balance of the Vaccine Injury Compensation Trust Fund as of— “(i) the close of each calendar quarter ending on or after December 31, 1992, and “(ii) such other times as are appropriate in the case of applicable dates described in paragraph (2)(B). “(B) Determination of projected balance.— In determining the projected balance of the Fund as of any date, the Secretary shall assume that— “(i) the tax imposed by this section will not apply a after such date, and “(ii) there shall be paid from such Trust Fund all claims made or to be made against such Trust Fund— “(I) with respect to vaccines administered before October 1, 1992, in the case of an applicable date described in paragraph (2)(A), or “(II) with respect to petitions filed under section 2111 or section 2111(a) of the Public Health Service Act, in the case of an applicable date described in paragraph (2)(B). “SEC. 4132. DEFINITIONS AND SPECIAL RULES. “(a) Definitions Relating to Taxable Vaccines.— For purposes of this subchapter— “(1) Taxable vaccine.— The term ‘taxable vaccine’ means any vaccine— “(A) which is listed in the table contained in section 4131(b)(1), and “(B) which is manufactured or produced in the United States or entered into the United States for consumption, use, or warehousing. “(2) DPT vaccine.— The term ‘DPT vaccine’ means any vaccine containing pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens. “(3) DT vaccine.— The term ‘DT vaccine’ means any vaccine (other than a DPT vaccine) containing diphtheria toxoid or tetanus toxoid. “(4) MMR vaccine.— The term “MMR vaccine” means any vaccine against measles, mumps, or rubella. Not more than 1 tax shall be imposed by section 4131 on any MMR vaccine by reason of being a vaccine against more than 1 of measles, mumps, or rubella. “(5) Polio vaccine.— The term ‘polio vaccine’ means any vaccine containing polio virus. “(6) Vaccine.— The term ‘vaccine’ means any substance designed to be administered to a human being for the prevention of 1 or more diseases. “(7) United states.— The term ‘United States’ has the meaning given such term by section 4612(a)(4). “(8) Importer.— The term ‘importer’ means the person entering the vaccine for consumption, use, or warehousing. “(b) Credit or Refund Where Vaccine Returned to Manufacturer, Etc., or Destroyed.— “(1) In general.— Under regulations prescribed by the Secretary, whenever any vaccine on which tax was imposed by section 4131 is— “(A) returned (other than for resale) to the person who paid such tax, or “(B) destroyed, the Secretary shall abate such tax or allow a credit, or pay a refund (without interest), to such person equal to the tax paid under section 4131 with respect to such vaccine. “(2) Claim must be filed within 6 months.— Paragraph (1) shall apply to any returned or destroyed vaccine only with respect to claims filed within 6 months after the date the vaccine is returned or destroyed. “(3) Condition of allowance of credit or refund.— No credit or refund shall be allowed or made under paragraph (1) with respect to any vaccine unless the person who paid the tax establishes that he— “(A) has repaid or agreed to repay the amount of the tax to the ultimate purchaser of the vaccine, or “(B) has obtained the written consent of such purchaser to the allowance of the credit or the making of the refund. “(4) Tax imposed only once.— No tax shall be imposed by section 4131 on the sale of any vaccine if tax was imposed by section 4131 on any prior sale of such vaccine and such tax is not abated, credited, or refunded. “(c) Other Special Rules.— “(1) Fractional part of a dose.— In the case of a fraction of a dose, the tax imposed by section 4131 shall be the same fraction of the amount of such tax imposed by a whole dose. “(2) Disposition of revenues from puerto rico and the virgin islands.— The provisions of subsections (a)(3) and (b)(3) of section 7652 shall not apply to any tax imposed by section 4131.” (b) Certain Provisions Relating to Tax-Free Sales, Etc. Not To Apply.— (1) Subsection (a) of section 4221 of such Code (relating to 26 USC 4221. certain tax-free sales) is amended by adding at the end thereof the following new sentence: “In the case of the tax imposed by section 4131, paragraphs (3), (4), and (5) shall not apply and paragraph (2) shall apply only if the use of the exported vaccine meets such requirements as the Secretary may by regulations prescribe.” (2) Paragraph (2) of section 6416(b) of such Code (relating to specified uses or resales) is amended by adding at the end thereof the following new sentence: “In the case of the tax imposed by section 4131, subparagraphs (B), (C), and (D) shall not apply and subparagraph (A) shall apply only if the use of the exported vaccine meets such requirements as the Secretary may by regulations prescribe.” (c) Clerical Amendment.— The table of subchapters for chapter 32 of such Code is amended by inserting after the item relating to subchapter B the following new item: “Subchapter C. Certain vaccines.” (d) Effective Date.— The amendments made by this section shall 26 USC 4131 note. take effect on January 1, 1988. SEC. 9202. VACCINE INJURY COMPENSATION TRUST FUND. (a) In General.— Subchapter A of chapter 98 of the Internal Revenue Code of 1986 (relating to trust fund code) is amended by adding at the end thereof the following new section: “SEC. 9510. VACCINE INJURY COMPENSATION TRUST FUND. “(a) Creation of Trust Fund.— There is established in the Treasury of the United States a trust fund to be known as the ‘Vaccine Injury Compensation Trust Fund’, consisting of such amounts as may be credited to such Trust Fund as provided in section 9602(b). “(b) Transfers to Trust Fund.— “(1) In general.— There are hereby appropriated to the Vaccine Injury Compensation Trust Fund amounts equivalent to the net revenues received in the Treasury from the tax imposed by section 4131 (relating to tax on certain vaccines). “(2) Net revenues.— For purposes of paragraph (1), the term ‘net revenues’ means the amount estimated by the Secretary based on the excess of— “(A) the taxes received in the Treasury under section 4131 (relating to tax on certain vaccines), over “(B) the decrease in the tax imposed by chapter 1 resulting from the tax imposed by section 4131. “(c) Expenditures from Trust Fund.— “(1) In general.— Amounts in the Vaccine Injury Compensation Trust Fund shall be available, as provided in appropriation Acts, only for the payment of compensation under subtitle 2 of title XXI of the Public Health Service Act (as in effect on the date of the enactment of this section) for vaccine-related injury or death with respect to vaccines administered after September 30, 1988, and before October 1, 1992. “(2) Transfers for certain repayments.— “(A) In general.— The Secretary shall pay from time to time from the Vaccine Injury Compensation Trust Fund into the general fund of the Treasury amounts equivalent to amounts paid under section 4132(b) and section 6416 with respect to the taxes imposed by section 4131. “(B) Transfers based on estimates.— Transfers under subparagraph (A) shall be made on the basis of estimates by the Secretary, and proper adjustments shall be made in the amounts subsequently transferred to the extent prior estimates were in excess of or less than the amounts required to be transferred. “(d) Liability of United States Limited to Amount in Trust Fund.— “(1) General rule.— Any claim filed against the Vaccine Injury Compensation Trust Fund may be paid only out of such Trust Fund. “(2) Coordination with other provisions.— Nothing in the National Childhood Vaccine Injury Act of 1986 (or in any amendment made by such Act) shall authorize the payment by the United States Government of any amount with respect to any such claim out of any source other than the Vaccine Injury Compensation Trust Fund. “(3) Order in which unpaid claims to be paid.— If at any time the Vaccine Injury Compensation Trust Fund has insufficient funds to pay all of the claims out of such Trust Fund at such time, such claims shall, to the extent permitted under paragraph (1) be paid in full in the order in which they are finally determined.” (b) Clerical Amendment.— The table of sections for such subchapter A is amended by adding at the end thereof the following new item: “Sec. 9510. Vaccine Injury Compensation Trust Fund.” (c) Effective Date.— The amendments made by this section shall 26 USC 9510 note. take effect on January 1, 1988. Subtitle D— Pension Provisions PART I— FULL-FUNDING LIMITATIONS SEC. 9301. FULL-FUNDING LIMITATION FOR DEDUCTIONS TO QUALIFIED PLANS. (a) General Rule.— Paragraph (7) of section 412(c) of the Internal Revenue Code of 1986 (defining full-funding limitation) is amended 26 USC 412. to read as follows: “(7) Full-funding limitation.— “(A) In general.— For purposes of paragraph (6), the term ‘full-funding limitation’ means the excess (if any) of— “(i) the lesser of (I) 150 percent of current liability, or (II) the accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over “(ii) the lesser of— “(I) the fair market value of the plan’s assets, or “(II) the value of such assets determined under paragraph (2). “(B) Current liability.— For purposes of subparagraphs (A) and (D), the term ‘current liability’ has the meaning given such term by subsection (1)(7) (without regard to subparagraph (D) thereof). “(C) Special rule for paragraph (6)(b).— For purposes of paragraph (6)(B), subparagraph (A)(i) shall be applied without regard to subclause (I) thereof. “(D) Regulatory authority.— The Secretary may by regulations provide— “(i) for adjustments to the percentage contained in subparagraph (A)(i) to take into account the respective ages or lengths of service of the participants, “(ii) alternative methods based on factors other than current liability for the determination of the amount taken into account under subparagraph (A)(i), and “(iii) for the treatment under this section of contributions which would be required to be made under the plan but for the provisions of subparagraph (A)(i)(I).” (b) Amendment To ERISA.— Paragraph (7) of section 302(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1082(c)(7)) is amended to read as follows: “(7) Full-funding limitation.— “(A) In general.— For purposes of paragraph (6), the term ‘full-funding limitation’ means the excess (if any) of— “(i) the lesser of (I) 150 percent of current liability, or (II) t he accrued liability (including normal cost) under the plan (determined under the entry age normal funding method if such accrued liability cannot be directly calculated under the funding method used for the plan), over “(ii) the lesser of— “(I) the fair market value of the plan’s assets, or “(II) the value of such assets determined under paragraph (2). “(B) Current liability.— For purposes of subparagraphs (A) and (D), the term ‘current liability’ has the meaning given such term by subsection (d)(7) (without regard to subparagraph (D) thereof). “(C) Special rule for paragraph (6)(b).— For purposes of paragraph (6)(B), subparagraph (A)(i) shall be applied without regard to subclause (I) thereof. “(D) Regulatory authority.— The Secretary of the Treasury may by regulations provide— “(i) for adjustments to the percentage contained in subparagraph (A)(i) to take into account the respective ages or lengths of service of the participants, “(ii) alternative methods based on factors other than current liability for the determination of the amount taken into account under subparagraph (A)(i), and “(iii) for the treatment under this section of contributions which would be required to be made under the plan but for the provisions of subparagraph (A)(i)(I).” (c) Effective Date.— (1) In general.— The amendments made by this section shall apply to years beginning after December 31, 1987. (2) Regulations.— The Secretary of the Treasury or his delegate shall prescribe such regulations as are necessary to carry out the amendments made by this section no later than August 15, 1988. (3) Study.— The Secretary of the Treasury or his delegate shall study the effect of the amendments made by this section on benefit security under defined benefit pension plans and shall report the results of such study to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate no later than August 15, 1988. PART II— PENSION FUNDING AND TERMINATION REQUIREMENTS SEC. 9302. SHORT TITLE; DEFINITIONS. (a) Short Title.— This part may be cited as the “Pension Protection Act”. (b) Definitions.— For purposes of this part— (1) 1986 Code.— The term “1986 Code” means the Internal Revenue Code of 1986. (2) ERISA.— The term “ERISA” means the Employee Retirement Income Security Act of 1974. Subpart A— Modifications of Minimum Funding Standard SEC. 9303. ADDITIONAL FUNDING REQUIREMENTS. (a) Amendments to 1986 Code.— (1) In general.— Section 412 of the 1986 Code (relating to 26 USC 412. minimum funding standard) is amended by adding at the end thereof the following new subsection: “(l) Additional Funding Requirements for Plans Which Are Not Multiemployer Plans.— “(1) In general.— In the case of a defined benefit plan (other than a multiemployer plan) which has an unfunded current liability for any plan year, the amount charged to the funding standard account for such plan year shall be increased by the sum of— “(A) the excess (if any) of— “(i) the deficit reduction contribution determined under paragraph (2) for such plan year, over “(ii) the sum of the charges for such plan year under subparagraphs (B) (other than clauses (iv) and (v) thereof), (C), and (D) of subsection (b)(2), reduced by the sum of the credits for such plan year under subparagraph (B)(i) of subsection (b)(3), plus “(B) the unpredictable contingent event amount (if any) for such plan year. Such increase shall not exceed the amount necessary to increase the funded current liability percentage to 100 percent. “(2) Deficit reduction contribution.— For purposes of paragraph (1), the deficit reduction contribution determined under this paragraph for any plan year is the sum of— “(A) the unfunded old liability amount, plus “(B) the unfunded new liability amount. “(3) Unfunded old liability amount.— For purposes of this subsection— “(A) In general.— The unfunded old liability amount with respect to any plan for any plan year is the amount necessary to amortize the unfunded old liability under the plan in equal annual installments over a period of 18 plan years (beginning with the 1st plan year beginning after December 31, 1988). “(B) Unfunded old liability.— The term ‘unfunded old liability’ means the unfunded current liability of the plan as of the beginning of the 1st plan year beginning after December 31, 1987 (determined without regard to any plan amendment increasing liabilities adopted after October 16, 1987). “(C) Special rules for benefit increases under existing collective bargaining agreements.— “(i) In general.— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and the employer ratified before October 17, 1987, the unfunded old liability amount with respect to such plan for any plan year shall be increased by the amount necessary to amortize the unfunded existing benefit increase liability in equal annual installments over a period of 18 plan years beginning with— “(I) the plan year in which the benefit increase with respect to such liability occurs, or “(II) if the taxpayer elects, the 1st plan year beginning after December 31, 1988. “(ii) Unfunded existing benefit increase liabilities— For purposes of clause (i), the unfunded existing benefit increase liability means, with respect to any benefit increase under the agreements described in clause (i) which takes effect during or after the 1st plan year beginning after December 31, 1987, the unfunded current liability determined— “(I) by taking into account only liabilities attributable to such benefit increase, and “(II) by reducing the amount determined under paragraph (8)(A)(ii) by the current liability determined without regard to such benefit increase, “(iii) Extensions, modifications, etc. not taken into account.— For purposes of this subparagraph, any extension, amendment, or other modification of an agreement after October 16, 1987, shall not be taken into account. “(4) Unfunded new liability amount.— For purposes of this subsection— “(A) In general.— The unfunded new liability amount with respect to any plan for any plan year is the applicable percentage of the unfunded new liability. “(B) Unfunded new liability.— The term ‘unfunded new liability’ means the unfunded current liability of the plan for the plan year determined without regard to— “(i) the unamortized portion of the unfunded old liability, and “(ii) the liability with respect to any unpredictable contingent event benefits (without regard to whether the event has occurred). “(C) Applicable percentage.— The term ‘applicable percentage’ means, with respect to any plan year, 30 percent, reduced by the product of— “(i) .25 multiplied by “(ii) the number of percentage points (if any) by which the funded current liability percentage exceeds 35 percent. “(5) Unpredictable contingent event amount.— “(A) In general.— The unpredictable contingent event amount with respect to a plan for any plan year is an amount equal to the greater of— “(i) the applicable percentage of the product of— “(I) 100 percent, reduced (but not below zero) by the funded current liability percentage for the plan year, multiplied by “(II) the amount of unpredictable contingent event benefits paid during the plan year, including (except as provided by the Secretary) any payment for the purchase of an annuity contract for a participant or beneficiary with respect to such benefits, or “(ii) the amount which would be determined for the plan year if the unpredictable contingent event benefit liabilities were amortized in equal annual installments over 7 plan years (beginning with the plan year in which such event occurs). “(B) Applicable percentage.— “In the case of plan years beginning in: The applicable percentage is: 1989 and 1990 ................ 5 1991 ............................... 10 1992 ............................... 15 1993 ............................... 20 1994 ............................... 30 1995 ............................... 40 1996 50 1997 ............................... 60 1998 ............................... 70 1999 ............................... 80 2000 ............................... 90 2001 and thereafter ................ 100. “(C) Paragraph not to apply to existing benefits.— This paragraph shall not apply to unpredictable contingent event benefits (and liabilities attributable thereto) for which the event occurred before October 17, 1987. “(D) Special rule for first year of amortization.— Unless the employer elects otherwise, the amount deter-mined under subparagraph (A) for the plan year in which the event occurs shall be equal to 150 percent of the amount determined under subparagraph (A)(i). The amount under subparagraph (A)(ii) for subsequent plan years in the amortization period shall be adjusted in the manner provided by the Secretary to reflect the application of this subparagraph. “(6) Special rules for small plans.— “(A) Plans with 100 or fewer participants.— This subsection shall not apply to any plan for any plan year if on each day during the preceding plan year such plan had no more than 100 participants. “(B) Plans with more than 100 but not more than 150 participants.— In the case of a plan to which subparagraph (A) does not apply and which on each day during the preceding plan year had no more than 150 participants, the amount of the increase under paragraph (1) for such plan year shall be equal to the product of— “(i) such increase determined without regard to this subparagraph, multiplied by “(ii) 2 percent for the highest number of participants in excess of 100 on any such day. “(C) Aggregation of plans.— For purposes of this paragraph, all defined benefit plans maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only employees of such employer or member shall be taken into account. “(7) Current liability.— For purposes of this subsection— “(A) In general.— The term ‘current liability’ means all liabilities to employees and their beneficiaries under the plan. “(B) Treatment of unpredictable contingent event benefits.— “(i) In general.— For purposes of subparagraph (A), any unpredictable contingent event benefit shall not be taken into account until the event on which the benefit is contingent occurs. “(ii) Unpredictable contingent event benefit.— The term ‘unpredictable contingent event benefit’ means any benefit contingent on an event other than— “(I) age, service, compensation, death, or disability, or “(II) an event which is reasonably and reliably predictable (as determined by the Secretary). “(C) Interest rates used.— The rate of interest used to determine current liability shall be t he rate of interest used under subsection (b)(5). “(D) Certain service disregarded.— “(i) In general.— In the case of a participant to whom this subparagraph applies, only the applicable percentage of the years of service before such individual became a participant shall be taken into account in computing the current liability of the plan. “(ii) Applicable percentage.— For purposes of this subparagraph, the applicable percentage shall be determined as follows: “If the years of participation are: “The applicable percentage is: 1 ................................... 20 2 ................................... 40 3 ................................... 60 4 ................................... 80 5 or more .......................... 100. “(iii) Participants to whom subparagraph applies.— This subparagraph shall apply to any participant who, at the time of becoming a participant— “(I) has not accrued any other benefit under any defined benefit plan (whether or not terminated) maintained by the employer or a member of the same controlled group of which the employer is a member, and “(II) who first becomes a participant under the plan in a plan year beginning after December 31, 1987. “(8) Other definitions.— For purposes of this subsection— “(A) Unfunded current liability.— The term ‘unfunded current liability’ means, with respect to any plan year, the excess (if any) of— “(i) the current liability under the plan, over “(ii) value of the plan’s assets determined under subsection (c)(2) reduced by any credit balance in the funding standard account. “(B) Funded current liability percentage.— The term ‘funded current liability percentage’ means, with respect to any plan year, the percentage which— “(i) the amount determined under subparagraph (A)(ii), is of “(ii) the current liability under the plan. “(C) Controlled group.— The term ‘controlled group’ means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414. “(D) Adjustments to prevent omissions and duplications.— The Secretary shall provide such adjustments in the unfunded old liability amount, the unfunded new liability amount, the unpredictable contingent event amount, the current payment amount, and any other charges or credits under this section as are necessary to avoid duplication or omission of any factors in the determination of such amounts, charges, or credits.” (2) Conforming amendment.— Paragraph (2) of section 412(b) of the 1986 Code is amended by adding at the end thereof the 26 USC 412. following new sentence: 9494Incorrect indention in copy. “For additional requirements in the case of plans other than multiemployer plans, see subsection (1).” (b) Amendments to ERISA.— (1) In general.— Section 302 of ERISA (29 U.S.C. 1082) is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: “(d) Additional Funding Requirements for Plans Which Are Not Multiemployer Plans.— “(1) In general.— In the case of a defined benefit plan (other than a multiemployer plan) which has an unfunded current liability for any plan year, the amount charged to the funding standard account for such plan year shall be increased by the sum of— “(A) the excess (if any) of— “(i) the deficit reduction contribution determined under paragraph (2) for such plan year, over “(ii) the sum of the charges for such plan year under subparagraphs (B) (other than clauses (iv) and (v) thereof), (C), and (D) of subsection (b)(2), reduced by the sum of the credits for such plan year under subparagraph (B)(i) of subsection (b)(8), plus “(B) the unpredictable contingent event amount (if any) for such plan year. Such increase shall not exceed the amount necessary to increase the funded current liability percentage to 100 percent. “(2) Deficit reduction contribution.— For purposes of paragraph (1), the deficit reduction contribution determined under this paragraph for any plan year is the sum of— “(A) the unfunded old liability amount, plus “(B) the unfunded new liability amount. “(3) Unfunded old liability amount.— For purposes of this subsection— “(A) In general.— The unfunded old liability amount with respect to any plan for any plan year is the amount necessary to amortize the unfunded old liability under the plan in equal annual installments over a period of 18 plan years (beginning with the 1st plan year beginning after December 31, 1988). “(B) Unfunded old liability.— The term ‘unfunded old liability’ means the unfunded current liability of the plan of the beginning of the 1st plan year beginning after December 31, 1987 (determined without regard to any plan amendment increasing liabilities adopted after October 16, 1987). “(C) Special rules for benefit increases under existing collective bargaining agreements.— “(i) In general.— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and the employer ratified before October 17, 1987, the unfunded old liability amount with respect to such plan for any plan year shall be increased by the amount necessary to amortize the unfunded existing benefit increase liability in equal annual installments over a period of 18 plan years beginning with— “(I) the plan year in which the benefit increase with respect to such liability occurs, or “(II) if the taxpayer elects, the 1st plan year beginning after December 31, 1988. “(ii) Unfunded existing benefit increase liabilities.— For purposes of clause (i), the unfunded existing benefit increase liability means, with respect to any benefit increase under the agreements described in clause (i) which takes effect during or after the 1st plan year beginning after December 31, 1987, the unfunded current liability determined— “(I) by taking into account only liabilities attributable to such benefit increase, and “(II) by reducing the amount determined under paragraph (8)(A)(ii) by the current liability determined without regard to such benefit increase, “(iii) Extensions, modifications, etc. not taken into account.— For purposes of this subparagraph, any extension, amendment, or other modification of an agreement after October 16, 1987, shall not be taken into account. “(4) Unfunded new liability amount.— For purposes of this subsection— “(A) In general.— The unfunded new liability amount with respect to any plan for any plan year is the applicable percentage of the unfunded new liability. “(B) Unfunded new liability.— The term ‘unfunded new liability’ means the unfunded current liability of the plan for the plan year determined without regard to— “(i) the unamortized portion of the unfunded old liability, and “(ii) the liability with respect to any unpredictable contingent event benefits (without regard to whether the event has occurred). “(C) Applicable percentage.— The term ‘applicable percentage’ means, with respect to any plan year, 30 percent, reduced by the product of— “(i) .25 multiplied by “(ii) the number of percentage points (if any) by which the funded current liability percentage exceeds 35 percent. “(5) Unpredictable contingent event amount.— “(A) In general.— The unpredictable contingent event amount with respect to a plan for any plan year is an amount equal to the greater of— “(i) the applicable percentage of the product of— “(I) 100 percent, reduced (but not below zero) by the funded current liability percentage for the plan year, multiplied by “(II) the amount of unpredictable contingent Contracts. event benefits paid during the plan year, including (except as provided by the Secretary of the Treasury) any payment for the purchase of an annuity contract for a participant or beneficiary with respect to such benefits, or “(ii) the amount which would be determined for the plan year if the unpredictable contingent event benefit liabilities were amortized in equal annual installments over 7 plan years (beginning with the plan year in which such event occurs). “(B) Applicable percentage.— “In the case of plan years beginning in: The applicable percentage is: 1989 and 1990 ..................... 5 1991 .................................. 10 1992 .................................. 15 1993 .................................. 20 1994 .................................. 30 1995 .................................. 40 1996 .................................. 50 1997 .................................. 60 1998 .................................. 70 1999 .................................. 80 2000 .................................. 90 2001 and thereafter ................... 100. “(C) Paragraph not to apply to existing benefits.— This paragraph shall not apply to unpredictable contingent event benefits (and liabilities attributable thereto) for which the event occurred before October 17, 1987. “(D) Special rule for first year of amortization.— Unless the employer elects otherwise, the amount determined under subparagraph (A) for the plan year in which the event occurs shall be equal to 150 percent of the amount determined under subparagraph (A)(i). The amount under subparagraph (A)(ii) for subsequent plan years in the amortization period shall be adjusted in the manner provided by the Secretary of the Treasury to reflect the application of this subparagraph. “(6) Special rules for small plans.— “(A) Plans with 100 or fewer participants.— This subsection shall not apply to any plan for any plan year if on each day during the preceding plan year such plan had no more than 100 participants. “(B) Plans with more than 100 but not more than 150 participants.— In the case of a plan to which subparagraph (A) does not apply and which on each day during the preceding plan year had no more than 150 participants, the amount of the increase under paragraph (1) for such plan year shall be equal to the product of— “(i) such increase determined without regard to this subparagraph, multiplied by “(ii) 2 percent for the highest number of participants in excess of 100 on any such day. “(C) Aggregation of plans.— For purposes of this paragraph, all defined benefit plans maintained by the same employer (or any member of such employer’s controlled group) shall be treated as 1 plan, but only employees of such employer or member shall be taken into account. “(7) Current liability.— For purposes of this subsection— “(A) In general.— The term ‘current liability’ means all liabilities to participants and their beneficiaries under the plan. “(B) Treatment of unpredictable contingent event benefits.— “(i) In general.— For purposes of subparagraph (A), any unpredictable contingent event benefit shall not be taken into account until the event on which the benefit is contingent occurs. “(ii) Unpredictable contingent event benefit.— The term ‘unpredictable contingent event benefit’ means any benefit contingent on an event other than— “(I) age, service, compensation, death, or disability, or “(II) an event which is reasonably and reliably predictable (as determined by the Secretary of the Treasury). “(C) Interest rates used.— The rate of interest used to determine current liability shall be the rate of interest used under subsection (b)(5). “(D) Certain service disregarded.— “(i) In general.— In the case of a participant to whom this subparagraph applies, only the applicable percentage of the years of service before such individual became a participant shall be taken into account in computing the current liability of the plan. “(ii) Applicable percentage.— For purposes of this subparagraph, the applicable percentage shall be determined as follows: “If the years of participation are: The applicable percentage is: 1 ................................. 20 2 ................................. 40 3 ................................. 60 4 ................................. 80 5 or more ......................... 100. “(iii) Participants to whom subparagraph applies.— This subparagraph shall apply to any participant who, at the time of becoming a participant— “(I) has not accrued any other benefit under any defined benefit plan (whether or not terminated) maintained by the employer or a member of the same controlled group of which the employer is a member, and “(II) who first becomes a participant under the plan in a plan year beginning after December 31, 1987. “(8) Other definitions.— For purposes of this subsection— “(A) Unfunded current liability.— The term ‘unfunded current liability’ means, with respect to any plan year, the excess (if any) of— “(i) the current liability under the plan, over “(ii) value of the plan’s assets determined under subsection (c)(2) reduced by any credit balance in the funding standard account. “(B) Funded current liability percentage.— The term ‘funded current liability percentage’ means, with respect to any plan year, the percentage which— “(i) the amount determined under subparagraph (A)(ii), is of “(ii) the current liability under the plan. “(C) Controlled group.— The term ‘controlled group’ means any group treated as a single employer under subsections 94a94aCopy read “subsection”. (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986. “(D) Adjustments to prevent omissions and duplications.— The Secretary of the Treasury shall provide such adjustments in the unfunded old liability amount, the un-funded new liability amount, the unpredictable contingent event amount, the current payment amount, and any other charges or credits under this section as are necessary to avoid duplication or omission of any factors in the determination of such amounts, charges, or credits.” (c) Revision of valuation regulations.— Effective with respect 26 USC 412 note. to plan years beginning after December 31, 1987, the provisions of the regulations prescribed under section 412(c)(2) of the 1986 Code which permit asset valuations to be based on a range between 85 percent and 115 percent of average value shall have no force and effect with respect to plans other than multiemployer plans (as defined in section 414(f) of the 1986 Code). The Secretary of the Treasury or his delegate shall amend such regulations to carry out the purposes of the preceding sentence. (d) Valuation of Bonds.— (1) Amendment to 1986 code.— Subparagraph (B) of section Regulations. 26 USC 412. 412(c)(2) of the 1986 Code is amended by adding at the end thereof the following new sentence: “In the case of a plan other than a multiemployer plan, this subparagraph shall not apply, but the Secretary may by regulations provide that the value of any dedicated bond portfolio of such plan shall be determined by using the interest rate under subsection (b)(5).” (2) Amendment to ERISA.— Subparagraph (B) of section Regulations. 29 USC 1082. 302(c)(2) of ERISA is amended by adding at the end thereof the following new sentence: “In the case of a plan other than a multiemployer plan, this subparagraph shall not apply, but the Secretary of the Treasury may by regulations provide that the value of any dedicated bond portfolio of such plan shall be determined by using the interest rate under subsection (b)(5).” (e) Effective Date.— (1) In general.— Except as provided in this subsection, the amendments made by this section shall apply with respect to plan years beginning after December 31, 1988. (2) Subsections (c) and (d).— The amendments made by subsections (c) and (d) shall apply with respect to years beginning after December 31, 1987. (3) Special rule for steel companies.— (A) In general.— For any plan year beginning before January 1, 1994, any increase in the funding standard account under section 412(1) of the 1986 Code or section 302(d) of ERISA (as added by this section) with respect to any steel employee plan shall not exceed the sum of— (i) the required percentage of the current liability under such plan, plus (ii) the amount determined under subparagraph (C)(i) for such plan year. (B) Required percentage.— For purposes of subparagraph (A), the term “required percentage” means, with respect to any plan year, the excess (if any) of— (i) the sum of— (I) the funded current liability percentage as of the beginning of the 1st plan year beginning after December 31, 1988 (determined without regard to any plan amendment adopted after June 30, 1987), plus (II) 1 percentage point for the plan year for which the determination under this paragraph is being made and for each prior plan year beginning after December 31, 1988, over (ii) the funded current liability percentage as of the beginning of the plan year for which such determination is being made. (C) Special rules for contingent events.— In the case of any unpredictable contingent event benefit with respect to which the event on which such benefits are contingent occurs after December 17, 1987— (i) Amortization amount.— For purposes of subparagraph (A)(ii), the amount determined under this clause for any plan year is the amount which would be determined if the unpredictable contingent event benefit liability were amortized in equal annual installments over 10 plan years beginning with the plan year in which such event occurs). (ii) Benefit and contributions not taken into account.— For purposes of subparagraph (B), in determining the funded current liability percentage for any plan year, there shall not be taken into account— (I) the unpredictable contingent event benefit liability, or (II) any amount contributed to the plan which is attributable to clause (i). (D) Steel employee plan.— For purposes of this paragraph, the term “steel employee plan” means any plan if— (i) such plan is maintained by a steel company, and (ii) substantially all of the employees covered by such plan are employees of such company. (E) Other definitions.— For purposes of this paragraph— (i) Steel company.— The term “steel company” means any corporation described in section 80603) of the Steel Import Stabilization Act. (ii) Other definitions.— The terms “current liability”, “funded current liability percentage”, and “unpredictable contingent event benefit” have the meanings given such terms by section 412(1) of the 1986 Code (as added by this section). (F) 9595Copy read “(E)”. Special rule.— The provisions of this paragraph shall apply in the case of a company which was originally incorporated on April 25, 1927, in Michigan and reincorporated on June 3, 1968, in Delaware in the same manner sis if such company were a steel company. SEC. 9304. TIME FOR MAKING CONTRIBUTIONS. (a) Period During Which Contributions May Be Made After Close of Year.— (1) Amendment to 1986 Code.— Paragraph (10) of section 412(c) of the 1986 Code (relating to time when certain contributions 26 USC 412. deemed made) is amended to read as follows: “(10) Time when certain contributions deemed made.— For purposes of this section— “(A) Plans other than multiemployer plans.— In the case of a plan other than a multiemployer plan, any contributions for a plan year made by an employer during the period— “(i) beginning on the day after the last day of such plan year, and “(ii) ending on the day which is 8½ months after the close of the plan year, shall be deemed to have been made on such last day. “(B) Multiemployer plans.— In the case of a multiemployer plan, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half month period may be extended for not more than six months under regulations prescribed by the Secretary.” (2) Amendment to erisa.— Paragraph (10) of section 302(c) of ERISA (relating to time when certain contributions deemed made) (29 U.S.C. 1082(c)(10)) 9696Copy read “1082(c)(10)”. is amended to read as follows: For purposes of this section— “(A) In the case of a plan other than a multiemployer plan, any contributions for a plan year made by an employer during the period— “(i) beginning on the day after the last day of such plan year, and “(ii) ending on the date which is 8V2 months after the close of the plan year, shall be deemed to have been made on such last day. “(B) In the case of a multiemployer plan, any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this subparagraph, such two and one-half Regulations. month period may be extended for not more than six months under regulations prescribed by the Secretary of the Treasury.” (3) Effective date.— The amendments made by this subsection 26 USC 412 note. shall apply to plan years beginning after December 31, 1987. (b) Quarterly estimated payments required.— (1) Amendment to 1986 code.— Section 412 of the 1986 Code (relating to minimum funding standard) is amended by adding 26 USC 412. at the end thereof the following new subsection: “(m) Quarterly contributions required.— “(1) In general.— If a plan (other than a multiemployer plan) fails to pay the full amount of a required installment for any plan year, then the rate of interest charged to the funding standard account under subsection (b)(5) with respect to the amount of the underpayment for the period of the underpayment shall be equal to the greater of— “A 175 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or “(B) the rate under subsection (b)(5). “(2) Amount of underpayment, period of underpayment.— For purposes of paragraph (1)— “(A) Amount.— The amount of the underpayment shall be the excess of— “(i) the required installment, over “(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment. “(B) Period of underpayment.— The period for which interest is charged under this subsection with regard to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan (determined without regard to subsection (c)(10)). “(C) Order of crediting contributions.— For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid. “(3) Number of required installments; due dates.— For purposes of this subsection— “(A) Payable in 4 installments.— There shall be 4 required installments for each plan year. “(B) Time for payment of installments.— “In the case of the following required installments: The due date is: 1st .......................... April 15 2nd .......................... July 15 3rd .......................... October 15 4th .......................... January 15 of the following year. “(4) Amount of required installment.— For purposes of this subsection— “(A) In general.— The amount of any required installment shall be the applicable percentage of the required annual payment. “(B) Required annual payment.— For purposes of subparagraph (A), the term ‘required annual payment’ means the lesser of— “(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 (without regard to any waiver under subsection (c) thereof), or “(ii) 100 percent of the amount so required for the preceding plan year. Clause (ii) shall not apply if the preceding plan year was not a year of 12 months. “(C) Applicable percentage.— For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table: “For plan years beginning in: The applicable percentage is: 1989 6.25 1990 12.5 1991 18.75 1992 and thereafter 25. “(D) Special rules for unpredictable contingent event benefits.— In the case of a plan with any unpredictable contingent event benefit liabilities— “(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and “(ii) each required installment shall be increased by the greater of— “(I) the amount of benefits described in subsection (1)(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs, or “(II) 25 percent of the amount determined under subsection (1)(5)(A)(ii) for the plan year. “(5) Fiscal years and short years.— “(A) Fiscal years.— In applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto. “(B) Short plan year.— This subsection shall be applied to plan years of less than 12 months in accordance with regulations prescribed by the Secretary.” (2) Amendment to erisa.— Section 302 of ERISA (29 U.S.C. 1082) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: “(e) Quarterly Contributions Required.— “(1) In general.— If a plan (other than a multiemployer plan) fails to pay the full amount of a required installment for any plan year, then the rate of interest charged to the funding standard account under subsection (b)(5) with respect to the amount of the underpayment for the period of the underpayment shall be equal to the greater of— “(A) 175 percent of the Federal mid-term rate (as in effect under section 1274 of the Internal Revenue Code of 1986 for the 1st month of such plan year), or “(B) the rate under subsection (b)(5). “(2) Amount of underpayment, period of underpayment.— For purposes of paragraph (1)— “(A) Amount.— The amount of the underpa3rment shall be the excess of— “(i) the required instalment, over “(ii) the amount (if any) of the installment contributed to or under the plan on or before the due date for the installment. “(B) Period of underpayment.— The period for which any interest is charged under this subsection with respect to any portion of the underpayment shall run from the due date for the installment to the date on which such portion is contributed to or under the plan (determined without regard to subsection (c)(10)). “(C) Order of crediting contributions.— For purposes of subparagraph (A)(ii), contributions shall be credited against unpaid required installments in the order in which such installments are required to be paid. “(3) Number of required installments; due dates.— For purposes of this subsection— “(A) Payable in 4 installments.— There shall be 4 required installments for each plan year. “(B) Time for payment of installments.— “In the case of the following required installments: The due date is: 1st .................................... April 15 2nd .................................... July 15 3rd .................................... October 15 4th .................................... January 15 of the following year. “(4) Amount of required installment.— For purposes of this subsection— “(A) In general.— The amount of any required installment shall be the applicable percentage of the required annual payment. “(B) Required annual payment.— For purposes of subparagraph (A), the term ‘required annual payment’ means the lesser of— “(i) 90 percent of the amount required to be contributed to or under the plan by the employer for the plan year under section 412 of the Internal Revenue Code of 1986 (without regard to any waiver under subsection (c) thereof), or “(ii) 100 percent of the amount so required for the preceding plan year. Clause (ii) shall not apply if the preceding plan year was not a year of 12 months. “(C) Applicable percentage.— For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table: “For plan years beginning in: The applicable percentage is: 1989 6.25 1990 12.5 1991 18.75 1992 and thereafter 25 “(D) Special rules for unpredictable contingent event benefits.— In the case of a plan with any unpredictable contingent event benefit liabilities— “(i) such liabilities shall not be taken into account in computing the required annual payment under subparagraph (B), and “(ii) each required installment shall be increased by the greater of— “(I) the amount of benefits described in subsection (d)(5)(A)(i) paid during the 3-month period preceding the month in which the due date for such installment occurs, or “(II) 25 percent of the amount determined under subsection (d)(5)(A)(ii) for the plan year. “(5) Fiscal years and short years.— “(A) Fiscal years.— In applying this subsection to a plan year beginning on any date other than January 1, there shall be substituted for the months specified in this subsection, the months which correspond thereto. “(B) Short plan year.— This section shall be applied to Regulations. plan years of less than 12 months in accordance with regulations prescribed by the Secretary of the Treasury.” (3) Effective date.— The amendments made by this subsection 26 USC 412 note. shall apply with respect to plan years beginning after 1988. (c) Increase in Excise Tax From 5 Percent to 10 Percent.— (1) In general.— Section 4971(a) of the 1986 Code (relating to 26 USC 4971. initial tax on failure to meet minimum funding standards) is amended by striking out “5 percent” and inserting in lieu thereof “10 percent (5 percent in the case of a multiemployer plan)”. (2) Effective date.— The amendments made by this subsection 26 USC 4971 note. shall apply to plan years beginning after 1988. (d) Requirement of Notice.— Section 101 of ERISA (relating to duty of disclosure and reporting) (29 U.S.C. 1021) is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: “(d) Notice of Failure to Meet Minimum Funding Standards.— “(1) In general.— If an employer of a plan other than a multiemployer plan fails to make a required installment or other payment required to meet the minimum funding standard under section 302 to a plan before the 60th day following the due date for such installment or other payment, the employer shall notify each participant and beneficiary (including an alternate payee as defined in section 206(d)(3)(K)) of such plan of such failure. Such notice shall be made at such time and in such manner as the Secretary may prescribe. “(2) Subsection not to apply if waiver pending.— This subsection shall not apply to any failure if the employer has filed a waiver request under section 303 with respect to the plan year to which the required installment relates, except that if the waiver request is denied, notice under paragraph (1) shall be provided within 60 days after the date of such denial. “(3) Definitions.— For purposes of this subsection, the terms ‘required installment’ and ‘due date’ have the same meanings given such terms by section 302(e).” (e) Imposition of Lien Where Failure to Make Required Contributions.— (1) Amendment to 1986 code.— Section 412 of the 1986 Code (as amended by this subtitle) is amended by adding at the end thereof the following new subsection: “(n) Imposition of Lien Where Failure to Make Required Contributions.— “(1) In general.— In the case of a plan to which this section applies, if— “(A) any person fails to make a required installment under subsection (m) or any other payment required under this section before the due date for such installment or other payment, and “(B) the unpaid balance of such installment or other payment (including interest), when added to the aggregate unpaid balance of all preceding such installments or other payments for which payment was not made before the due date (including interest), exceeds $1,000,000, then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member. “(2) Plans to which subsection applies.— This subsection shall apply to a defined benefit plan (other than a multiemployer plan) for any plan year for which the funded current liability percentage (within the meaning of subsection (1)(8)(B)) of such plan is less than 100 percent. “(3) Amount of lien.— For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of— “(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or “(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)— “(i) for plan years beginning after 1987, and “(ii) for which payment has not been made before the due date. “(4) Notice of failure; lien.— “(A) Notice of failure.— A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment. “(B) Period of lien.— The lien imposed by paragraph (1) shall arise on the 60th day following the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence. “(C) Certain rules to apply.— Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 of the Employee Retirement Income Security Act of 1974 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien. “(5) Enforcement.— Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor). “(6) Definitions.— For purposes of this subsection— “(A) Due date; required installment.— The terms ‘due date’ and ‘required installment’ have the meanings given such terms by subsection (m), except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under this section. 9797Copy read “section.” ”. “(B) Controlled group.— The term ‘controlled group’ means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414.” (2) Amendment to erisa.— Section 302 of ERISA (as amended by this subtitle) (29 U.S.C. 1082) is amended by redesignating subsection (f) as subsection (g) and by adding after subsection (e) the following new subsection: “(f) Imposition of Lien Where Failure to Make Required Contributions.— “(1) In general.— In the case of a plan to which this section applies, if— “(A) any person fails to make a required installment under subsection (e) or any other payment required under this section before the due date for such installment or other payment, and “(B) the unpaid balance of such installment or other payment (including interest), when added to the aggregate unpaid balance of all preceding such installments or other payments for which payment was not made before the due date (including interest), exceeds $1,000,000, then there shall be a lien in favor of the plan in the amount determined under paragraph (3) upon all property and rights to property, whether real or personal, belonging to such person and any other person who is a member of the same controlled group of which such person is a member. “(2) Plans to which subsection applies.— This subsection shall apply to a defined benefit plan (other than a multiemployer plan) for any plan year for which the funded current liability percentage (within the meaning of subsection (d)(8)(B)) of such plan is less than 100 percent. “(3) Amount of lien.— For purposes of paragraph (1), the amount of the lien shall be equal to the lesser of— “(A) the amount by which the unpaid balances described in paragraph (1)(B) (including interest) exceed $1,000,000, or “(B) the aggregate unpaid balance of required installments and other payments required under this section (including interest)— “(i) for plan years beginning after 1987, and “(ii) for which payment has not been made before the due date. “(4) Notice of failure; lien.— “(A) Notice of failure.— A person committing a failure described in paragraph (1) shall notify the Pension Benefit Guaranty Corporation of such failure within 10 days of the due date for the required installment or other payment. “(B) Period of lien.— The lien imposed by paragraph (1) shall arise on the 60th day following the due date for the required installment or other payment and shall continue until the last day of the first plan year in which the plan ceases to be described in paragraph (1)(B). Such lien shall continue to run without regard to whether such plan continues to be described in paragraph (2) during the period referred to in the preceding sentence. “(C) Certain rules to apply.— Any amount with respect to which a lien is imposed under paragraph (1) shall be treated as taxes due and owing the United States and rules similar to the rules of subsections (c), (d), and (e) of section 4068 shall apply with respect to a lien imposed by subsection (a) and the amount with respect to such lien. “(5) Enforcement.— Any lien created under paragraph (1) may be perfected and enforced only by the Pension Benefit Guaranty Corporation, or at the direction of the Pension Benefit Guaranty Corporation, by the contributing sponsor (or any member of the controlled group of the contributing sponsor). “(6) Definitions.— For purposes of this subsection— “(A) Due date; required installment.— The terms ‘due date’ and ‘required installment’ have the meanings given such terms by subsection (e), except that in the case of a payment other than a required installment, the due date shall be the date such payment is required to be made under this section.” “(B) Controlled group.— The term ‘controlled group’ means any group treated as a single employer under subsections (b), (c), (m), and (o) of section 414 of the Internal Revenue Code of 1986.” (3) Effective date.— The amendments made by this subsection 26 USC 412 note. shall apply to plan years beginning after December 31, 1987. SEC. 9305. LIABILITY OF MEMBERS OF CONTROLLED GROUP FOR TAXES ON FAILURE TO MEET MINIMUM FUNDING STANDARDS AND TO MAKE MINIMUM FUNDING CONTRIBUTIONS. (a) Excise Tax.— (1) In general.— Section 4971 of the 1986 Code (relating to 26 USC 4971. taxes on failure to meet minimum funding standards) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection: “(e) Liability for Tax.— “(1) In general.— Except as provided in paragraph (2), the tax imposed by subsection (a) or (b) shall be paid by the employer responsible for contributing to or under the plan the amount described in section 412(b)(3)(A). “(2) Joint and several liability where employer member of controlled group.— “(A) In general.— In the case of a plan other than a multiemployer plan, if the employer referred to in paragraph (1) is a member of a controlled group, each member of such group shall be jointly and severally liable for the tax imposed by subsection (a) or (b). “(B) Controlled group.— For purposes of subparagraph (A), the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.” (2) Technical amendments.— (A) Subsection (a) of section 4971 of the 1986 Code is amended by striking out the last sentence. (B) Subsection (b) of section 4971 of the 1986 Code is amended by striking out the last sentence. (b) Minimum Funding Contributions.— (1) Amendment to 1986 code.— Section 412(c) of the 1986 Code is amended by adding at the end thereof the following new paragraph: “(11) Liability for contributions.— “(A) In general.— Except as provided in subparagraph (B), the amount of any contribution required by this section and any required installments under subsection (m) shall be paid by the employer responsible for contributing to or under the plan the amount described in subsection (b)(3)(A). “(B) Joint and several liability where employer member of controlled group.— “(i) In general.— In the case of a plan other than a multiemployer plan, if the employer referred to in subparagraph (A) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contribution or required installment. “(ii) Controlled group.— For purposes of clause (i), the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.” (2) Amendment to erisa.— Section 302(c) of ERISA (29 U.S.C. 1082(c)) is amended by adding at the end thereof the following new paragraph: “(11) Liability for contributions.— “(A) In general.— Except as provided in subparagraph (B), the amount of any contribution required by this section and any required installments under subsection (e) shall be paid by the employer responsible for contributing to or under the plan the amount described in subsection (b)(3)(A). “(B) Joint and several liability where employer member of controlled group.— “(i) In general.— In the case of a plan other than a multiemployer plan, if the employer referred to in subparagraph (A) is a member of a controlled group, each member of such group shall be jointly and severally liable for payment of such contribution or required installment, “(ii) Controlled group.— For purposes of clause (i), term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.”9898Indention on paragraphs “ ‘(11)”, “ ‘(A)”, “ ‘(B)”, “ ‘(i)”, and “ ‘(ii)”, incorrect. (c) Conforming Amendment.— Section 4140)) of the 1986 Code is 26 USC 414.. amended by striking out “the minimum funding standard of section 412, the tax imposed by section 4971, and”. (d) Effective Date.— The amendments made by this section shall 26 USC 412 note. apply with respect to plan years beginning after December 31, 1987. SEC. 9306. FUNDING WAIVERS. (a) Requirements for Waivers.— (1) Amendments to 1986 code.— (A) Application must be submitted before date 2½ months after close of year.— Subsection (d) of section 412 of the 1986 Code (relating to variance from minimum funding standard) is amended by adding at the end thereof the following new paragraph: “(4) Application must be submitted before date 2½ months after close of year.— In the case of a plan other than a multiemployer plan, no waiver may be granted under this subsection with respect to any plan for any plan year unless an application therefor is submitted to the Secretary not later than the 15th day of the 3rd month beginning after the close of such plan year.” (B) Waiver allowed only for temporary hardship.— Subsection (d) of section 412 of the 1986 Code is amended— (i) by striking out “substantial business hardship” in paragraphs (1) and (2) and inserting in lieu thereof “temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)”, and (ii) by striking out “substantial— in the headings of paragraphs (1) and (2). (C) Hardship must also exist at controlled group level.— Subsection (d) of section 412 of the 1986 Code is 26 USC 412. amended by adding at the end thereof the following new paragraph: “(5) Special rule if employer is member of controlled group.— “(A) In general.— In the case of a plan other than a multiemployer plan, if an employer is a member of a controlled group, the temporary substantial business hardship requirements of paragraph (1) shall be treated as met only if such requirements are met— “(i) with respect to such employer, and “(ii) with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer). The Secretary may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this subsection. “(B) Controlled group.— For purposes of subparagraph (A), the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.” (2) Amendments to erisa.— (A) Application must be submitted before date 2½ months after close of year.— Section 303 of ERISA (relating to variance from minimum funding standard) (29 U.S.C. 1083) is amended by redesignating subsection (d) as subsection (f) and by inserting after subsection (c) the following new subsection: “(d) Special Rules.— “(1) Application must be submitted before date 2½ months after close of year.— In the case of a plan other than a multiemployer plan, no waiver may be granted under this section with respect to any plan for any plan year unless an application therefor is submitted to t h e Secretary of t h e Treasury not later than the 15th day of the 3rd month beginning after the close of such plan year.” (B) Waiver allowed only for temporary hardship.— Section 303 of ERISA (29 U.S.C. 1083) is amended by striking out “substantial business hardship” in subsections (a) and (b) and inserting in lieu thereof “temporary substantial business hardship (substantial business hardship in the case of a multiemployer plan)”. (C) Hardship must also exist at controlled group level.— Subsection (d) of section 303 of ERISA (as amended by subparagraph (A)) (29 U.S.C. 1083) is amended by adding at the end thereof the following new paragraph: “(2) Special rule if employer is member of controlled group.— “(A) In general.— In the case of a plan other than a multiemployer plan, if an employer is a member of a controlled group, the temporary substantial business hard-ship requirements of subsection (a) shall be treated as met only if such requirements are met— “(i) with respect to such employer, and “(ii) with respect to the controlled group of which such employer is a member (determined by treating all members of such group as a single employer). The Secretary of the Treasury may provide that an analysis of a trade or business or industry of a member need not be conducted if the Secretary of the Treasury determines such analysis is not necessary because the taking into account of such member would not significantly affect the determination under this subsection. “(B) Controlled group.— For purposes of subparagraph (A), the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.” (b) Frequency of Waivers.— (1) Amendments to 1986 code.— The second sentence of section 26 USC 412. 412(d)(1) of the 1986 Code is amended by striking out “more than 5 of any 15” and inserting in lieu thereof “more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan)”. (2) Amendments to erisa.— The second sentence of section 303(a) of ERISA (29 U.S.C. 1083(a)) is amended by striking out “more than 5 of any 15” and inserting in lieu thereof “more than 3 of any 15 (5 of any 15 in the case of a multiemployer plan)”. (c) Interest on Repayment of Waived Contributions.— (1) Amendments to 1986 code.— (A) Paragraph (1) of section 412(d) of the 1986 Code is amended by striking out the last sentence and inserting in lieu thereof the following new sentence: “The interest rate used for purposes of computing the amortization charge described in subsection (b)(2)(C) for any plan year shall be— “(A) in the case of a plan other than a multiemployer plan, the greater of (i) 150 percent of the Federal midterm rate (as in effect under section 1274 for the 1st month of such plan year), or (ii) the rate of interest used under the plan in determining costs, and “(B) in the case of a multiemployer plan, the rate determined under section 6621(b).” (B) Subsection (e) of section 412 of the 1986 Code is amended by striking out the last sentence and inserting in lieu thereof the following new sentence: "In the case of a plan other than a multiemployer plan, the interest rate applicable for any plan year under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the greater of (A) 150 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of such plan year), or (B) the rate of interest used under the plan in determining costs. In the case of a multiemployer plan, such rate shall be the rate determined under section 6621(b).” (2) Amendments to erisa.— (A) Subsection (a) of section 303 of ERISA (29 U.S.C. 1083(a)) is amended by striking out the last sentence and inserting in lieu thereof the following new sentence: “The interest rate used for purposes of computing the amortiza-tion charge described in subsection (b)(2)(C) for any plan year shall be— “(A) in the case of a plan other than a multiemployer plan, the greater of (i) 150 percent of the Federal midterm rate (as in effect under section 1274 of the Internal Revenue Code of 1986 for the 1st month of such plan year), or (ii) the rate of interest used under the plan in determining costs, and “(B) in the case of a multiemployer plan, the rate determined under section 6621(b).” (B) Subsection (a) of section 304 of ERISA (29 U.S.C. 1084(a)) is amended by striking out the last sentence and inserting in lieu thereof the following new sentence: “In the case of a plan other than a multiemployer plan, the interest rate applicable for any plan year under any arrangement entered into by the Secretary in connection with an extension granted under this subsection shall be the greater of (A) 150 percent of the Federal mid-term rate (as in effect under section 1274 of the Internal Revenue Code of 1986 for the 1st month of such plan year), or (B) the rate of interest used under the plan in determining costs. In the case of a multiemployer plan, such rate shall be the rate determined under section 6621(b) of such Code.” (d) Notice to Participants of Application for Funding Waivers.— (1) Amendment to 1986 code.— Section 412 (f)(4)(A) of the 1986 Code (relating to advance notice) is amended by striking out 26 USC 412. “plan.” and inserting in lieu thereof “plan, and each participant, beneficiary, and alternate payee (within the meaning of section 414(p)(8)). Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV of such Act and the benefit liabilities.”. (2) Amendment to erisa.— Section 303(e)(1) of ERISA (relating to advance notice) (29 U.S.C. 1083(e)(1)) is amended by striking out “plan.” and inserting in lieu thereof “plan, and each affected party (as defined in section 4001(a)(21)) other than the Pension Benefit Guaranty Corporation. Such notice shall include a description of the extent to which the plan is funded for benefits which are guaranteed under title IV and the benefit liabilities.”. (e) Decrease in Amount of Deficiencies Required Before Security Required.— (1) Amendment to 1986 code.— Subparagraph (C) of section 412 (0(3) is amended by striking out “$2,000,000” and inserting in lieu thereof “$1,000,000”. (2) Amendment to erisa.— Section 306(c)(1) of ERISA (29 U.S.C. 1085a(c)(1)) is amended by striking out “$2,000,000” and inserting in lieu thereof “$1,000,000”. (f) Effective Dates.— (1) In general.— Except as provided in this subsection, the amendments made by this section shall apply in the case of— (A) any application submitted after December 17, 1987, and (B) any waiver granted pursuant to such an application. (2) Special rule for application requirement.— (A) In general.— The amendments made by subsections (a)(1)(A) and (a)(2)(A) shall apply to plan years beginning after December 31, 1987. (B) Transitional rule for years beginning in 1988.— In the case of any plan year beginning during calendar 1988, section 412(d)(4) of the 1986 Code and section 303(d)(1) of ERISA (as added by subsection (a)(1)) shall be applied by substituting “6th month” for “3rd month”. (3) Frequency of waivers.— In applying the second sentence of section 412(d) of the 1986 Code and section 303(a) of ERISA to plans other than multiemployer plans, the number of waivers which may be granted pursuant to applications submitted after December 17, 1987, shall be determined without regard to waivers granted with respect to plan years beginning before January 1, 1988. (4) Subsection (d).— The amendments made by subsection (d) shall apply to applications submitted more than 90 days after the date of the enactment of this Act. SEC. 9307. OTHER FUNDING CHANGES. (a) Amortization Periods.— (1) Amendments to 1986 code.— (A) Paragraphs (2)(B)(iv), (2)(C), and (3)(B)(ii) of section 412(b) of the 1986 Code are each amended by striking out 26 USC 412. “15 plan years” and inserting in lieu thereof “5 plan years (15 plan years in the case of a multiemployer plan)”. (B) Paragraphs (2)(B)(v) and (3)(B)(iii) of section 412(b) of the 1986 Code are each amended by striking out “30 plan years” and inserting in lieu thereof “10 plan years (30 plan years in the case of a multiemployer plan)”. (2) Amendments to erisa.— (A) Paragraphs (2)(B)(iv), (2)(C), and (3)(B)(ii) of section 302(b) of ERISA (29 U.S.C. 1082(b)) are each amended by striking out “15 plan years” and inserting in lieu thereof “5 plan years (15 plan years in the case of a multiemployer plan)”. (B) Paragraphs (2)(B)(v) and (3)(B)(iii) of section 3020)) of ERISA (29 U.S.C. 1082(b)) are each amended by striking out “30 plan years” and inserting in lieu thereof’ 10 plan years (30 plan years in the case of a multiemployer plan)”. (b) Actuarial Assumptions Must Be Reasonable.— (1) Amendment to 1986 code.— Paragraph (3) of section 412(c) of the 1986 Code is amended to read as follows: “(3) Actuarial assumptions must be reasonable.— For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods— “(A) in the case of— “(i) a plan other than a multiemployer plan, each of which is reasonable (taking into account the experience of the plan and reasonable expectations) or which, in the aggregate, result in a total contribution equivalent to that which would be determined if each such assumption and method were reasonable, or “(ii) a multiemployer plan, which, in the aggregate, are reasonable (taking into account the experiences of the plan and reasonable expectations), and “(B) which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” (2) Amendment to erisa.— Paragraph (3) of section 302(c) of ERISA (29 U.S.C. 1082(c)(3)) is amended to read as follows: “(3) For purposes of this section, all costs, liabilities, rates of interest, and other factors under the plan shall be determined on the basis of actuarial assumptions and methods— “(A) in the case of— “(i) a plan other than a multiemployer plan, each of which is reasonable (taking into account the experience of the plan and reasonable expectations) or which, in the aggregate, result in a total contribution equivalent to that which would be determined if each such assumption and method were reasonable, or “(ii) a multiemployer plan, which, in the aggregate, are reasonable (taking into account the experiences of the plan and reasonable expectations), and “(B) which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” (c) Limitation on Deduction for Contributions to Certain Plans Not Less Than Unfunded Current Liability.— Paragraph (1) of section 404(a) of the 1986 Code is amended by redesignating 26 USC 404. subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph: “(D) Special rule in case of certain plans.— In the case of any defined benefit plan (other than a multiemployer plan) which has more than 100 participants for the plan year, except as provided in regulations, the maximum amount deductible under the limitations of this paragraph shall not be less than the unfunded current liability determined under section 412(1) (without regard to any reduction by the credit balance in the funding standard account). For purposes of this subparagraph, all defined benefit plans maintained by the same employer (or any member of such employer’s controlled group (within the meaning of section 412(l)(8)(c))) shall be treated as 1 plan, but only employees of such member or employer shall be taken into account.” (d) Limitation on Amortization of Past Service Credits.— Clause (iii) of section 404(a)(1)(A) of the 1986 Code (relating to pension trusts) is amended by striking out “to amortize such credits” and inserting in lieu thereof “to amortize the unfunded costs attributable to such credits”. (e) Limitation on Interest Rate.— (1) Amendment to 1986 code.— Paragraph (5) of section 412(b)) of the 1986 Code (relating to interest) is amended to read as follows: “(5) Interest.— “(A) In general.— The funding standard account (and Regulations. items therein) shall be charged or credited (as determined under regulations prescribed by the Secretary) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs. “(B) Required change of interest rate.— For purposes of determining a plan’s current liability and for purposes of determining a plan’s required contribution under section 412(1) for any plan year— “(i) In general.— If any rate of interest used under the plan to determine cost is not within the permissible range, the plan shall establish a new rate of interest within the permissible range. “(ii) Permissible range.— For purposes of this subparagraph— “(I) In general.— Except as provided in subclause (II), the term ‘permissible range’ means a rate of interest which is not more than 10 percent above, and not more than 10 percent below, the weighted average of the rates of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year. “(II) Secretarial authority.— If the Secretary finds that the lowest rate of interest permissible under subclause (I) is unreasonably high, the Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under subclause (I). “(iii) Assumptions.— Notwithstanding subsection (c)(3)(A)(i), for purposes of this section and for purposes of determining current liability, the interest rate used under the plan shall be— “(I) determined without taking into account the experience of the plan and reasonable expectations, but “(II) consistent with the assumptions which reflect the purchase rates which would be used by insurance companies to satisfy the liabilities under the plan.”. (2) Amendment to erisa.— Paragraph (5) of section 302(b) of ERISA (relating to interest) (29 U.S.C. 1082(b)(5)) is amended to read as follows: “(5) Interest.— For purposes of determining a plan’s current liability and for purposes of determining a plan’s required contribution under section 412(1) for any plan year— “(A) In general.— The funding standard account (and items Regulations. therein) shall be charged or credited (as determined under regulations prescribed by the Secretary of the Treasury) with interest at the appropriate rate consistent with the rate or rates of interest used under the plan to determine costs. “(B) Required change of interest rate.— “(i) In general.— If any rate of interest used under the plan to determine cost is not within the permissible range, the plan shall establish a new rate of interest within the permissible range. “(ii) Permissible range.— For purposes of this subparagraph— “(I) In general.— Except as provided in subclause (II), the term ‘permissible range’ means a rate of interest which is not more than 10 percent above, and not more than 10 percent below, the average rate of interest on 30-year Treasury securities during the 4-year period ending on the last day before the beginning of the plan year. “(II) Secretarial authority.— If the Secretary finds that the lowest rate of interest permissible under subclause (I) is unreasonably high, the Secretary may prescribe a lower rate of interest, except that such rate may not be less than 80 percent of the average rate determined under subclause (I). “(iii) Assumptions.— Notwithstanding subsection (c)(3)(A)(i), for purposes of this section and for purposes of determining current liability, the interest rate used under the plan shall be— “(I) determined without taking into account the experience of the plan and reasonable expectations, but “(II) consistent with the assumptions which reflect the purchase rates which would be used by insurance companies to satisfy the liabilities under the plan.”. (f) Effective Date.— The amendments made by this section shall 26 USC 404 note. apply to years beginning after December 31, 1987. Subpart B— Plan Terminations SEC. 9311. LIMITATIONS ON EMPLOYER REVERSIONS UPON PLAN TERMINATION. (a) Restrictions On Reversions Pursuant To Recently Amended Plans.— (1) In general.— Section 4044(d) of ERISA (29 U.S.C. 1344(d)) is amended— (A) by redesignating paragraph (2) as paragraph (3); and (B) by inserting after paragraph (1) the following new paragraph: (A) In determining the extent to which a plan provides for the distribution of plan assets to the employer for purposes of paragraph (1)(C), any such provision, and any amendment increasing the amount which may be distributed to the employer, shall not be treated as effective before the end of the fifth calendar year following the date of the adoption of such provision or amendment. “(B) A distribution to the employer from a plan shall not be treated as failing to satisfy the requirements of this paragraph if the plan has been in effect for fewer than 5 years and the plan has provided for such a distribution since the effective date of the plan. “(C) Except as otherwise provided in regulations of the Secretary Regulations. of the Treasury, in any case in which a transaction described in section 208 occurs, subparagraph (A) shall continue to apply separately with respect to the amount of any assets transferred in such transaction. “(D) For purposes of this subsection, the term ‘employer’ includes any member of the controlled group of which the employer is a member. For purposes of the preceding sentence, the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986.” (2) Transitional rule.— The amendments made by paragraph 29 USC 1344 note. (1) shall apply, in the case of plans which, as of note. December 17, 1987, have no provision relating to the distribution of plan assets to the employer for purposes of section 4044(d)(1)(C) of the Employee Retirement Income Security Act of 1974, only with respect to plan amendments providing for the distribution of plan assets to the employer which are adopted after 1 year after the effective date of such amendments made by paragraph (1). Such amendment shall not apply to any provision of the plan adopted on or before December 17, 1987, which provides for the distribution of plan assets to the employer. (b) Distribution of Assets Attributable to Employee Contributions.— Section 4044(d) of ERISA (29 U.S.C. 1344(d)) is amended— (1) in paragraph (1), by striking “Any” and inserting “Subject to paragraph (3), any”; and (2) by striking paragraph (3) (as redesignated by subsection (c)(1)) and inserting the following new paragraph: “(3) (A) Before any distribution from a plan pursuant to paragraph (1), if any assets of the plan attributable to employee contributions remain after satisfaction of all liabilities described in subsection (a), such remaining assets shall be equitably distributed to the participants who made such contributions or their beneficiaries (including alternate payees, within the meaning of section 206(d)(3)(K)). “(B) For purposes of subparagraph (A), the portion of the remaining assets which are attributable to employee contributions shall be an amount equal to the product derived by multiplying— “(i) the market value of the total remaining assets, by “(ii) a fraction— “(I) the numerator of which is the present value of all portions of the accrued benefits with respect to participants which are derived from participants’ mandatory contributions (referred to in subsection (a)(2)), and “(II) the denominator of which is the present value of all benefits with respect to which assets are allocated under paragraphs (2) through (6) of subsection (a). “(C) For purposes of this paragraph, each person who is, as of the termination date— “(i) a participant under the plan, or “(ii) an individual who has received, during the 3-year period ending with the termination date, a distribution from the plan of such individual’s entire nonforfeitable benefit in the form of a single sum distribution in accordance with section 203(e) or in the form of irrevocable commitments purchased by the plan from an insurer to provide such nonforfeitable benefit, shall be treated as a participant with respect to the termination, if all or part of the nonforfeitable benefit with respect to such person is or was attributable to participants’ mandatory contributions (referred to in subsection (a)(2)).” (c) Technical Amendment.— Section 4044(b)(4) of ERISA (29 U.S.C. 1344(b)(4)) is amended by striking “section 401(a), 403(a), or 405(a)” and inserting “section 401(a) or 403(a)”. (d) Effective Date.— The amendments made by this section shall 29 USC 1344 note. apply with respect to— (1) plan terminations under section 4041(c) of ERISA with respect to which notices of intent to terminate are provided under section 4041(aX2) of ERISA after December 17, 1987, and (2) plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation under section 4042 of ERISA after December 17, 1987. SEC. 9312. ELIMINATION OF SECTION 4049 TRUST: INCREASE IN LIABILITY TO PENSION BENEFIT GUARANTY CORPORATION AND IN PAYMENTS BY CORPORATION TO PARTICIPANTS AND BENEFICIARIES. (a) Repeal.— Section 4049 of ERISA (29 U.S.C. 1349) is repealed. (b) Conforming Amendments.— (1) Elimination of employer liability to section 4049 trust.— (A) Repeal.— Subsection (c) of section 4062 of ERISA (29 U.S.C. 1362(c)) is repealed. (B) Conforming amendments.— Section 4062 of ERISA is further amended by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively. (2) Increase in employer liability to the corporation.— (A) In general.— Subparagraph (A) of section 4062(b)(1) of ERISA (29 U.S.C. 1362(b)(1)(A)) is amended to read as follows: “(A) In general.— Except as provided in subparagraph Regulations. (B), the liability to the corporation of a person described in subsection (a) shall be the total amount of the unfunded benefit liabilities (as of the termination date) to all participants and beneficiaries under the plan, together with interest (at a reasonable rate) calculated from the termination date in accordance with regulations prescribed by the corporation.” (B) Lien limited to 30 percent of net worth.— (i) Subsection (a) of section 4068 of ERISA (29 U.S.C. 1368(a)) is amended by striking out “to the extent of an amount equal to the unpaid amount described in section 4062(b)(l)(A)(i)” each place it appears and inserting in lieu thereof “to the extent such amount does not exceed 30 percent of the collective net worth of all persons described in section 4062(a)”. (ii) Title IV of ERISA (29 U.S.C. 4001 et seq.) is amended by transferring subsection (e) of section 4062 of ERISA (29 U.S.C. 1362(e)) to the end of section 4068 of ERISA (29 U.S.C. 1368) and by redesignating such subsection as subsection (f). (C) Treatment of multiple controlled groups.— (i) In general.— So much of section 4064(b) of ERISA (29 U.S.C. 13640t))) as precedes the second sentence is amended to read as follows: “(b) The corporation shall determine the liability with respect to each contributing sponsor and each member of its controlled group in a manner consistent with section 4062, except that the amount of liability determined under section 4062(b)(1) with respect to the entire plan shall be allocated to each controlled group by multiplying such amount by a fraction— “(1) the numerator of which is the amount required to be contributed to the plan for the last 5 plan years ending prior to the termination date by persons in such controlled group as contributing sponsors, and “(2) the denominator of which is the total amount required to be contributed to the plan for such last 5 plan years by all persons as contributing sponsors, and clauses (i)(II) and (ii) of section 4062(b)(1)(A) shall be applied separately with respect to each controlled group.” (ii) Conforming amendments.— Section 4068(a) of ERISA (29 U.S.C. 1368(a)) is amended by adding at the end thereof the following new sentence: “The preceding provision of this subsection shall be applied in a manner consistent with the provisions of section 4064(d) relating to treatment of multiple controlled groups.” (3) Payment by corporation to participants and beneficiaries of recovery percentage of outstanding amount of benefit liabilities— (A) In general.— Section 4022 of ERISA (29 U.S.C. 1322) is amended— (i) by redesignating subsections (c) and (d) as subsections (d) and (e); and (ii) by inserting after subsection 0)) the following new subsection: “(c) (1) In addition to benefits paid under the preceding provisions of this section with respect to a terminated plan, the corporation shall pay the portion of the amount determined under paragraph (2) which is allocated with respect to each participant under section 4044(a), to such participant or (in the case of a deceased participant) to such participant’s beneficiaries (including alternate payees, within the meaning of section 206(d)(3)(K)). “(2) The amount determined under this paragraph is an amount equal to the product derived by multiplying— “(A) the outstanding amount of benefit liabilities under the plan (including interest calculated from the termination date), by “(B) the applicable recovery ratio. “(3) (A) Except as provided in subparagraph (C), for purposes of this subsection, the term ‘recovery ratio’ means the average ratio, with respect to prior plan terminations described in subparagraph (B), of— “(i) the value of the recovery of the corporation under section 4062, 4063, or 4064 in connection with such prior terminations, to “(ii) the amount of unfunded benefit liabilities under such plans as of the termination date in connection with such prior terminations. “(B) A plan termination described in this subparagraph is a termination with respect to which— “(i) the corporation has determined the value of recoveries under section 4062, 4063, or 4064, and “(ii) notices of intent to terminate were provided after December 17, 1987. “(C) In the case of a terminated plan with respect to which the outstanding amount of benefit liabilities exceeds $20,000,000, for purposes of this section, the term ‘recovery ratio’ means, with respect to the termination of such plan, the ratio of— “(i) the value of the recoveries of the corporation under section 4062, 4063, or 4064 in connection with such plan, to “(ii) the amount of unfunded benefit liabilities under such plan as of the termination date. “(4) Determinations under this subsection shall be made by the corporation. Such determinations shall be binding unless shown by clear and convincing evidence to be unreasonable.” (B) Transitional rule.— (i) In general.— In the case of any plan termination to which the amendments made by this section apply and with respect to which notices of intent to terminate were provided on or before December 17, 1990— (I) subparagraph (A) of section 4022(c)(1) of ERISA (as amended by this paragraph) shall not apply, and (II) subparagraph (B) of section 4022(c)(1) of ERISA (as so amended) shall apply irrespective of the outstanding amount of benefit liabilities under the plan, (ii) Limitation.— Clause (i) shall not apply in the case of any plan termination referred to in clause (i) with respect to which the recovery ratio is not finally determined under section 4022(c)(1)(B) of ERISA (as so amended) as of December 17, 1990. (4) Benefit liabilities.— Paragraph (16) of section 4001(a) of ERISA (29 U.S.C. 1301(aX16)) is amended to read as follows: “(16) ‘benefit liabilities’ means the benefits of employees and their beneficiaries under the plan (within the meaning of section 401(a)(2) of the Internal Revenue Code of 1986);”. (5) Outstanding amount of benefit liabilities.— Paragraph (19) of section 4001(a) of ERISA (29 U.S.C. 1301(a)(19)) is amended to read as follows: “(19) ‘outstanding amount of benefit liabilities’ means, with respect to any plan, the excess (if any) of— “(A) the value of the benefit liabilities under the plan (determined as of the termination date on the basis of assumptions prescribed by the corporation for purposes of section 4044), over “(B) the value of the benefit liabilities which would be so determined by only taking into account benefits which are guaranteed under section 4022 or to which assets of the plan are allocated under section 4044;”. (c) Additional Conforming Amendments.— (1) Section 4041(c)(3)(B)(ii) of ERISA (29 U.S.C. 1341(c)(3)(B)(ii)) is amended— (A) by striking subclause (II); (B) by striking “plan, and” at the end of subclause (I) and inserting “plan.”; and (C) by striking “available to it—” and all that follows through “the plan administrator” and inserting “available to it, the plan administrator”. (2) Section 4041(c)(3)(B)(iii) of ERISA (29 U.S.C. 1341(c)(3)(B)(iii)) is amended— (A) by striking subclause (II); (B) by striking “section 4042, and” at the end of subclause (I) and inserting “section 4042.”; and (C) by striking “available to it—” and all that follows through “the corporation” in subclause (I) and inserting “available to it, the corporation”. (3) Subsection (i) of section 4042 of ERISA (29 U.S.C. 1342(i)) is repealed. (4) Section 4005(g) of ERISA (29 U.S.C. 1305(g)) is amended by striking out “or fiduciaries with respect to trusts to which the requirements of section 4049 apply”, (d) Effective Date.— (1) In general.— The amendments made by this section shall 29 USC 1301 note. apply with respect to— (A) plan terminations under section 4041(c) of ERISA with respect to which notices of intent to terminate are provided under section 4041(a)(2) of ERISA after December 17, 1987, and (B) plan terminations with respect to which proceedings are instituted by the Pension Benefit Guaranty Corporation under section 4042 of ERISA after December 17, 1987. (2) Section 4049 administrative expenses under prior terminations.— Section 4049(a) of ERISA (as effective under paragraph (1)), is amended by adding at the end thereof the following new sentence: "Reasonable administrative expenses incurred in carrying out the responsibilities under this section prior to the receipt of any liability payments under section 4062(c) shall be paid by the persons described in section 4062(a) in accordance with procedures which shall be prescribed by the corporation by regulation, and the amount of the liability determined under section 4062(c) shall be reduced by the amount of such expenses so paid.” SEC. 9313. STANDARDS FOR TERMINATION. (a) Standard Termination Procedures Available Only When Assets Sufficient to Meet Benefit Liabilities.— (1) In general.— Subparagraph (D) of section 4041(b)(1) of ERISA (29 U.S.C. 1341(b)(1)(D)) is amended to read as follows: “(D) when the final distribution of assets occurs, the plan is sufficient for benefit liabilities (determined as of the termination date).” (2) Technical amendments.— (A) Paragraphs (2)(A), (2)(C), (2)(D), and (3) of section 4041(b) of ERISA (29 U.S.C. 1341(b)(2)(A), (2)(C), (2)(D), (3)) are each amended by striking out “benefit commitments” each place it appears and inserting in lieu thereof “benefit liabilities”. (B) Subparagraph (B) of section 4041(b)(2) of ERISA (29 U.S.C. 134ia))(2)(B)) is amended— (i) by striking out “the amount of such person’s benefit commitments (if any)” and inserting in lieu thereof “the amount of the benefit liabilities (if any) attributable to such person”; and (ii) by striking out “such benefit commitments” and inserting in lieu thereof “such benefit liabilities”. (C) (i) Subparagraph (A) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)(A)) is amended by striking out clauses (i) and (ii) and inserting in lieu thereof the following: “(i) purchase irrevocable commitments from an insurer to provide all benefit liabilities under the plan, or “(ii) in accordance with the provisions of the plan and any applicable regulations, otherwise fully provide all benefit liabilities under the plan.” (ii) Subparagraph (B) of section 4041(b)(3) of ERISA (29 U.S.C. 1341(b)(3)) is amended by striking out “so as to pay” and all that follows and inserting in lieu thereof “so as to pay all benefit liabilities under the plan”. (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”. (E) Paragraph (1) of section 4041(d) of ERISA (29 U.S.C. 1341(d)) is amended— (i) by striking out “no amount of unfunded benefit commitments” and inserting in lieu thereof “no amount of unfunded benefit liabilities”, and (ii) by striking out “BENEFIT COMMITMENTS” in the paragraph heading and inserting in lieu thereof “benefit liabilities”. (F) Paragraph (18) of section 4001(a) of ERISA (29 U.S.C. 1301(a)(18)) is amended to read as follows: “(18) ‘amount of unfunded benefit liabilities’ means, as of any date, the excess (if any) of— “(A) the value of the benefit liabilities under the plan (determined as of such date on the basis of assumptions prescribed by the corporation for purposes of section 4044), over “(B) the current value (as of such date) of the assets of the plan;”. (b) Criteria for Distress Termination.— (1) Applicability to all members of controlled group.— Section 4041(c)(2) of ERISA (29 U.S.C. 1341(c)(2)) is amended— (A) in subparagraph (B), by striking “a substantial member” in the matter preceding clause (i) and inserting “a member”; and (B) by striking subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C). (2) Requirement of additional findings to qualify for distress termination based on reorganization in bankruptcy.— Section 4041(c)(2)(B)(ii)(III) of ERISA (29 U.S.C. 1341(c)(2)(B)(ii)(III)) is amended by striking “approves the termination” and inserting “determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process and approves the termination”. (3) Clarification of date as of which employer must be in a bankruptcy proceeding to qualify for distress termination.— Clauses (i) and (ii) of section 4041(c)(2)(B) of ERISA (29 U.S.C. 1341(c)(2)(B) (i) and (ii)) are each amended by inserting “proposed” before “termination date”. (4) Treatment under distress tests of cases converted to liquidation.— Section 4041(c)(2)(B)(i)(I) of ERISA (29 U.S.C. 1341(c)(2)(B)(i)(I)) is amended by inserting before the comma at the end the following: “(or a case described in clause (ii) filed by or against such person has been converted, as of such date, to a case in which liquidation is sought)”. (5) Notice to corporation under reorganization distress test.— Section 4041(c)(2)(B)(ii) of ERISA (29 U.S.C 1341(c)(2)(B)(ii)) is amended— (A) in subclause (II), by striking “and” at the end; (B) by redesignating subclause (III) as subclause (IV); (C) by inserting after subclause (II) the following new subclause: “(III) such person timely submits to the corporation any request for the approval of the bankruptcy court (or other appropriate court in a case under such similar law of a State or political subdivision) of the plan termination, and”; and (D) in subclause (IV) (as redesignated), by striking “(or other” and all that follows through subdivision) and inserting “(or such other appropriate court)”. (6) Arrangements for payment of liability by controlled groups.— Section 4067 of ERISA (29 U.S.C. 1367) is amended by striking “controlled groups who are” and inserting “controlled groups who are or may become”. (c) Effective Date.— The amendments made by this section shall 29 USC 1301 note. apply with respect to plan terminations under section 4041 of ERISA with respect to which notices of intent to terminate are provided under section 4041(a)(2) of ERISA after December 17, 1987. SEC. 9314. ADDITIONAL AMENDMENTS RELATING TO PLAN TERMINATION. (a) Certain Information Not Required From Certain Insurance Contract Plans.— (1) Standard termination.— Section 4041(b)(2)(A) of ERISA (29 U.S.C. 1341(b)(2)(A)) is amended— (A) by striking clause (iii) and inserting the following: “(iii) certification by the plan administrator that— “(I) the information on which the enrolled actuary based the certification under clause (i) is accurate and complete, and “(II) the information provided to the corporation under clause (ii) is accurate and complete.”; and (B) by adding at the end thereof the following: “Clause (i) and clause (iii)(I) shall not apply to a plan described in section 412(i) of the Internal Revenue Code of 1986.”. (2) Distress termination.— Section 4041(c)(2)(A) of ERISA (29 U.S.C. 1341(c)(2)(A)) is amended— (A) by striking clause (iv) and inserting the following: “(iv) certification by the plan administrator that— “(I) the information on which the enrolled actuary based the certifications under clause (ii) is accurate and complete, and “(II) the information provided to the corporation under clauses (i) and (iii) is accurate and complete.”; and (B) by adding at the end the following: “Clause (ii) and clause (iv)(I) shall not apply to a plan described in section 412(i) of the Internal Revenue Code of 1986.”. (b) Clarification of Existing Authority to Pool Assets of Terminated Plans.— Section 4042 of ERISA (29 U.S.C. 1342(a)) is amended by striking the third sentence and inserting the following: “Notwithstanding any other provision of this title, the corporation is authorized to pool assets of terminated plans for purposes of administration, investment, payment of liabilities of all such terminated plans, and such other purposes as it determines to be appropriate in the administration of this title.”. (b) Submission of Plan Data in Involuntary Termination.— Section 4042(c) of ERISA (29 U.S.C. 1342(c)) is amended by adding at the end the following new paragraph: “(3) In the case of a proceeding initiated under this section, the plan administrator shall provide the corporation, upon the request of the corporation, the information described in clauses (ii), (iii), and (iv) of section 4041(c)(2)(A).”. (c) Civil Penalties for Failure to Timely Provide Required Information Relating to Single-Employer Plans.— (1) In general.— Subtitle D of ERISA (29 U.S.C. 1361 et seq.) is amended by adding at the end the following new section: “penalty for failure to timely provide required information “Sec. 4071. The corporation may assess a penalty, payable to the 29 USC 1371. corporation, against any person who fails to provide any notice or other material information required under this subtitle or subtitle A, B, or C, or any regulations prescribed under any such subtitle, within the applicable time limit specified therein. Such penalty shall not exceed $1,000 for each day for which such failure continues.”. (2) Clerical amendments.— The table of contents in section 1 of ERISA (29 U.S.C. 1001 note) is amended by adding after the item relating to section 4070 the following new item: “Sec. 4071. Penalty for failure to timely provide required information.”. Subpart C— Increase in Premium Rates SEC. 9331. INCREASE IN PREMIUM RATES. (a) General rule.— Clause (i) of section 4006(a)(3)(A) of ERISA (29 U.S.C. 1306(a)(3)(A)) is amended by striking out “for plan years beginning after December 31, 1985, an amount equal to $8.50” and inserting in lieu thereof “for plan years beginning after December 31, 1987, an amount equal to the sum of $16 plus the additional premium (if any) determined under subparagraph (E)”. (b) Determination Of Additional Premium.— Paragraph (3) of section 4006(a) of ERISA (29 U.S.C. 1306(a)(3)) is amended by adding at the end thereof the following new subparagraph: “(E) (i) The additional premium determined under this subparagraph with respect to any plan for any plan year shall be an amount equal to the amount determined under clause (ii) divided by the number of participants in such plan as of the close of the preceding plan year. “(ii) The amount determined under this clause for any plan year shall be an amount equal to $6.00 for each $1,000 (or fraction thereof) of unfunded vested benefits under the plan as of the close of the preceding plan year. “(iii) For purposes of clause (ii)— “(I) Except as provided in subclause (II), the term ‘unfunded vested benefits’ means the amount which would be the unfunded current liability (within the meaning of section 302(d)(8)(A)) if only vested benefits were taken into account. “(II) The interest rate used in valuing vested benefits for purposes of subclause (I) shall be equal to 80 percent of the annual yield on 30-year Treasury securities for the month preceding the month in which the plan year begins. “(iv) (I) Except as provided in this clause, the aggregate increase in the premium payable with respect to any participant by reason of this subparagraph shall not exceed $34. “(II) If an employer made contributions to a plan during 1 or more of the 5 plan years preceding the 1st plan year to which this subparagraph applies in an amount not less than the maximum amount allowable as a deduction with respect to such contributions under section 404 of such Code, the dollar amount in effect under subclause (I) for the 1st 5 plan years to which this subparagraph applies shall be reduced by $3 for each plan year for which such contributions were made in such amount. (c) Liability for Premium.— (1) In general.— Section 4007 of ERISA (29 U.S.C. 1307) is amended by striking out “plan administrator” each place it appears and inserting in lieu thereof “designated payor”. (2) Designated payor.— Section 4007 of ERISA (29 U.S.C. 1307) is amended by adding at the end thereof the following new subsection: “(e) (1) For purposes of this section, the term ‘designated payor’ means— “(A) the contributing sponsor or plan administrator in the case of a single-employer plan, and “(B) the plan administrator in the case of a multiemployer plan. “(2) If the contributing sponsor of any single-employer plan is a member of a controlled group, each member of such group shall be jointly and severally liable for any premiums required to be paid by such contributing sponsor. For purposes of the preceding sentence, the term 'controlled group' means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.” (d) Deposit of Premiums Into Separate Revolving Fund.— Section 4005 of ERISA (relating to establishment of Pension Benefit Guaranty funds) (29 U.S.C. 1305) is amended by redesignating subsections (f) and (g) as subsections (g) and (h) and by inserting after subsection (e) the following new subsection: “(f) (1) A seventh fund shall be established and credited with— “(A) premiums, penalties, and interest charges collected under section 4006(a)(3)(A)(i) (not described in subparagraph (B)) to the extent attributable to the amount of the premium in excess of $8.50, “(B) premiums, penalties, and interest charges collected under section 4006(a)(3)(E), and “(C) earnings on investments of the fund or on assets credited to the fund. “(2) Amounts in the fund shall be available for transfer to other funds established under this section with respect to a single-employer plan but shall not be available to pay— “(A) administrative costs of the corporation, or “(B) benefits under any plan which was terminated before October 1, 1988, unless no other amounts are available for such payment. “(3) The corporation may invest amounts of the fund in such obligations as the corporation considers appropriate.” (e) Conforming Amendments.— Section 4006(c)(1)(A) of ERISA (29 U.S.C. 1306(c)(1)(A)) is amended by striking out “and” at the end of clause (i), by inserting “and before January 1, 1986,” after “after December 31, 1977,”, and by adding at the end thereof the following new clause: “(iii) with respect to each plan year beginning after December 31, 1985, and before January 1, 1988, an amount equal to $8.50 for each individual who was a participant in such plan during the plan year, and”. (f) Effective Date.— (1) In general.— The amendments made by this section shall apply to plan years beginning after December 31, 1987. (2) Separate accounting.— The amendments made by subsection (d) shall apply to fiscal years beginning after September 30, 1988. Subpart D— Miscellaneous Provisions SEC. 9341. SECURITY REQUIRED UPON ADOPTION OF PLAN AMENDMENT RESULTING IN SIGNIFICANT UNDERFUNDING. (a) Amendments to 1986 code.—9999Copy read “Code—”. Subsection (a) of section 401 of the 1986 Code (relating to requirements for qualification) is amended by inserting after paragraph (28) the following new paragraph: 100100Copy read “paragraph:—”. “(29) Security required upon adoption of plan amendment resulting in significant underfunding.— “(A) In general.—If— “(i) a defined benefit plan (other than a multiemployer plan) adopts an amendment an effect of which is to increase current liability under the plan for a plan year, and “(ii) the funded current liability percentage of the plan for the plan year in which the amendment takes effect is less than 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, the trust of which such plan is a part shall not constitute a qualified trust under this subsection unless such amendment does not take effect until the contributing sponsor (or any member of the controlled group of the contributing sponsor) provides security to the plan. “(B) Form of security.— The security required under subparagraph (A) shall consist of— “(i) a bond issued by a corporate surety company that is an acceptable surety for purposes of section 412 of the Employee Retirement Income Security Act of 1974, “(ii) cash, or United States obligations which mature in 3 years or less, held in escrow by a bank or similar financial institution, or “(iii) such other form of security as is satisfactory to the Secretary and the parties involved. “(C) Amount of security.— The security shall be in an amount equal to the excess of— “(i) the lesser of— “(I) the amount of additional plan assets which would be necessary to increase the funded current liability percentage under the plan to 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, or “(II) the amount of the increase in current liability under the plan attributable to the plan amendment, over “(ii) $10,000,000. “(D) Release of security.— The security shall be released (and any amounts thereunder shall be refunded together with any interest accrued thereon) at the end of the first plan year which ends after the provision of the security and for which the funded current liability percentage under the plan is not less than 60 percent. The Secretary may prescribe Regulations. regulations for partial releases of the security by reason of increases in the funded current liability percentage. “(E) Definitions.— For purposes of this paragraph, the terms ‘current liability’, ‘funded current liability percentage’, and ‘unfunded current liability’ shall have the meanings given such terms by section 412(1), except that in computing unfunded current liability there shall not be taken into account any unamortized portion of the unfunded old liability amount as of the close of the plan year.” (b) Amendments to ERISA.— Part 3 of subtitle B of title I of ERISA (29 U.S.C. 1081 et seq.) is amended— (1) by redesignating section 307 as section 308; and 29 USC 1086. (2) by inserting after section 306 the following new section: “security required upon adoption of plan amendment resulting in significant underfunding “Sec. 307. (a) In General.— If— 29 USC 1085b. “(1) a defined benefit plan (other than a multiemployer plan) adopts an amendment an effect of which is to increase current liability under the plan for a plan year, and “(2) the funded current liability percentage of the plan for the plan year in which the amendment takes effect is less than 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, the contributing sponsor (or any member of the controlled group of the contributing sponsor) shall provide security to the plan. “(b) Form of Security.— The security required under subsection (a) shall consist of— “(1) a bond issued by a corporate surety company that is an acceptable surety for purposes of section 412, “(2) cash, or United States obligations which mature in 3 years or less, held in escrow by a bank or similar financial institution, or “(3) such other form of security as is satisfactory to the Secretary of the Treasury and the parties involved. “(c) Amount of Security.— The security shall be in an amount equal to the excess of— “(1) the lesser of— “(A) the amount of additional plan assets which would be necessary to increase the funded current liability percentage under the plan to 60 percent, including the amount of the unfunded current liability under the plan attributable to the plan amendment, or “(B) the amount of the increase in current liability under the plan attributable to the plan amendment, over “(2) $10,000,000. “(d) Release of Security.— The security shall be released (and any amounts thereunder shall be refunded together with any interest accrued thereon) at the end of the first plan year which ends after the provision of the security and for which the funded current liability percentage under the plan is not less than 60 percent. The Regulations. Secretary may prescribe regulations for partial releases of the security by reason of increases in the funded current liability percentage. “(e) Definitions.— For purposes of this section, the terms ‘current liability’, ‘funded current liability percentage’, and ‘unfunded current liability’ shall have the meanings given such terms by section 302(d), except that in computing unfunded current liability there shall not be taken into account any unamortized portion of the unfunded old liability amount as of the close of the plan year.” (b) Clerical Amendment.— The table of contents in section 1 of ERISA (29 U.S.C. 1001 note) is amended by striking out the item relating to section 307 and inserting in lieu thereof the following new items: “Sec. 307. Security required upon adoption of plan amendment resulting in significant underfunding. “Sec. 308. Effective dates.” (c) Effective Date.— (1) In general.— Except sis provided in this subsection, the amendments made by this section shall apply to plan amendments adopted after the date of the enactment of this Act. (2) Collective bargaining agreements.— In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of the enactment of this Act, the amendments made by this section shall not apply to plan amendments adopted pursuant to collective bargaining agreements ratified before the date of enactment. SEC. 9342. REPORTING REQUIREMENTS. (a) Funded Percentage Required To Be Shown in Annual Report— (1) Subsection (d) of section 103 of ERISA (29 U.S.C. 1023(d)) is amended by redesignating paragraphs (11) and (12) as paragraphs (12) and (13), respectively, and by inserting after paragraph (10) the following new paragraph: “(11) If the current value of the assets of the plan is less than 60 percent of the current liability under the plan (within the meaning of section 302(d)(7)), such percentage.” (2) Paragraph (3) of section 104(b) of ERISA (29 U.S.C. 1024(b)(3)) is amended by striking out “such other material” and inserting in lieu thereof “such other material (including the percentage determined under section 103(d)(11))”. (b) Amendment of Statute of Limitations With Respect to Certain Reports.— Section 413(a)(2) of ERISA (29 U.S.C. 1113(a)(2)) is amended by striking “(A)” and by striking “or (B)” and all that follows through “title”. (c) Penalty For Failure to Provide Annual Report in Complete Form.— Section 502(c) of ERISA (29 U.S.C. 1132(c)) is amended— (1) by inserting “(1)” after “(c)”, and by striking “(1) who” and “(2) who” and inserting “(A) who” and “(B) who”, respectively; and (2) by adding at the end the following new paragraph: “(2) The Secretary may assess a civil penalty of up to $1,000 a day from the date of a plan administrator's failure or refusal to file the annual report required to be filed with the Secretary under section 101(b)(4). For purposes of this paragraph, an annual report that has been rejected under section 104(a)(4) for failure to provide material information shall not be treated as having been filed with the Secretary.”. (d) Effective Date.— (1) In general.— The amendments made by this section shall apply with respect to reports required to be filed after December 31, 1987. (2) Regulations.— The Secretary of Labor shall issue the regulations required to carry out the amendments made by subsection (c) not later than January 1, 1989. SEC. 9343. COORDINATION OF PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986 WITH PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. 101101Copy read “1974”. (a) Interpretation of Internal Revenue Code.— Except to the 26 USC 401 note. extent specifically provided in the Internal Revenue Code of 1986 or as determined by the Secretary of the Treasury, titles I and IV of the Employee Retirement Income Security Act of 1974 are not applicable in interpreting such Code. (b) Clarification Regarding Effect of Determination Letter by the Internal Revenue Service on Enforcement by the Department of Labor of Fiduciary Standards Under 102102Copy read “under”. ERISA.— Section 3001(d) of ERISA (29 U.S.C. 1201(d)) is amended by adding after the second sentence the following: “The determination of the Secretary of the Treasury shall not be prima facie evidence on issues relating solely to part 4 of subtitle B of title I.”. (c) Clarification Regarding Returns of Contributions Upon Receipt of Adverse Determination Letters.— (1) In general.— Subparagraph (B) of section 403(c)(2) of ERISA (29 U.S.C. 1103(c)(2)(B)) is amended to read as follows: “(B) If a contribution is conditioned on initial qualification of the plan under section 401 or 403(a) of the Internal Revenue Code of 1986, and if the plan receives an adverse determination with respect to its initial qualification, then paragraph (1) shall not prohibit the return of such contribution to the employer within one year after such determination, but only if the application for the determination is made by the time prescribed by law for filing the employer's return for the taxable year in which such plan was adopted, or such later date as the Secretary of the Treasury may prescribe.”. (2) Conforming amendment.— Paragraph (3) of section 403(c) of ERISA (29 U.S.C. 1103(c)(3)) is amended by striking out “4972(b) of the Internal Revenue Code of 1954” and inserting in lieu thereof “4979(c) of the Internal Revenue Code of 1986”. SEC. 9344. CLARIFICATION REGARDING THE IMPOSITION OF AN ANNUAL SANCTION FOR PROHIBITED TRANSACTIONS WHICH ARE CONTINUING IN NATURE. Section 502(i) of ERISA (29 U.S.C. 1132(i)) is amended by striking the second sentence and inserting the following: “The amount of Regulations. such penalty may not exceed 5 percent of the amount involved in each such transaction (as defined in section 4975(f)(4) of the Internal Revenue Code of 1986) for each year or part thereof during which ; in the prohibited transaction continues, except that, if the transaction is not corrected (in such manner as the Secretary shall prescribe 103103Copy read “presribe”. in regulations which shall be consistent with section 4975(f)(5) of such Code) within 90 days after notice from the Secretary (or such longer period as the Secretary may permit), such penalty may be in an amount not more than 100 percent of the amount involved.”. SEC. 9345. ADDITIONAL LIMITATIONS ON INVESTMENT BY AN INDIVIDUAL ACCOUNT PLAN FORMING PART OF A FLOOR-OFFSET ARRANGEMENT AND ON INVESTMENT BY AN INDIVIDUAL ACCOUNT PLAN IN EMPLOYER STOCK. (a) Treatment of Individual Account Portions of Floor-Offset Arrangements.— (1) In general.— Section 407(d)(3) of ERISA (29 U.S.C. 1107(d)(3)) is amended by adding at the end the following new subparagraph: “(C) The term ‘eligible individual account plan’ does not include any individual account plan the benefits of which are taken into account in determining the benefits payable to a participant under any defined benefit plan.” (2) Treatment of floor-offset arrangement as single plan.— Section 407(d) of ERISA (29 U.S.C. 1107(d)) is amended by adding at the end the following new paragraph: “(9) For purposes of this section, an arrangement which consists of a defined benefit plan and an individual account plan shall be treated as 1 plan if the benefits of such arrangement are taken into account in determining the benefits payable under such defined benefit plan.” (3) Effective Date.— The amendments made by this subsection 29 USC 1107 note. shall apply with respect to arrangements established after December 17, 1987. (b) Restrictions on Treatment of Stock as Qualifying Employer Security.— Section 407 of ERISA (29 U.S.C. 1107) is amended— (1) in subsection (d)(5), by adding at the end the following new sentence: “After December 17, 1987, in the case of a plan other than an eligible individual account plan, stock shall be considered a qualifying employer security only if such stock satisfies the requirements of subsection (f)(1).”; and (2) by adding at the end the following new subsection: “(f) (1) Stock satisfies the requirements of this subsection if— “(A) no more than 25 percent of the aggregate amount of stock of the same class issued and outstanding at the time of acquisition is held by the plan, and “(B) at least 50 percent of the aggregate amount referred to in subparagraph (A) is held by persons independent of the issuer. “(2) Until January 1, 1993, a plan shall not be treated as violating subsection (a) solely by holding stock which fails to satisfy the requirements of paragraph (1) if such stock— “(A) has been so held since December 17, 1987, or “(B) was acquired after December 17, 1987, pursuant to a Contracts. legally binding contract in effect on December 17, 1987, and has been so held at all times after the acquisition. “(3) After December 17, 1987, no plan may acquire stock which Contracts. does not satisfy the requirements of paragraph (1) unless the acquisition is made pursuant to a legally binding contract in effect on such date”. SEC. 9346. INTEREST RATE ON ACCUMULATED CONTRIBUTIONS. (a) Amendments to ERISA.— Section 204(c)(2) of ERISA (29 U.S.C. 1054(c)(2)) is amended— (1) in subparagraph (C)(iii), by striking “5 percent per annum” and inserting “120 percent of the Federal mid-term rate (as in effect under section 1274 of the Internal Revenue Code of 1986 for the 1st month of a plan year)”; and (2) in subparagraph (D)— (A) in the first sentence, by striking “, the rate of interest described in clause (iii) of subparagraph (C), or both,”; and (B) by striking the second sentence. (b) Amendments to 1986 Code.— Section 411(c)(2) of the 1986 Code 26 USC 411. (relating to accrued benefit derived from employee contributions) is amended— (1) in subparagraph (C)(iii), by striking “5 percent per annum” and inserting “120 percent of the Federal mid-term rate (as in effect under section 1274 for the 1st month of a plan year)”; and (2) in subparagraph (D)— (A) in the first sentence, by striking “, the rate of interest described in clause (iii) of subparagraph (C), or both,”; and (B) by striking the second sentence. (c) Effective Date.— (1) In general.— The amendments made by this section shall apply to plan years beginning after December 31, 1987. (2) Plan amendments not required until january 1989.— If any amendment made by this section requires an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after January 1, 1989, if— (A) during the period after such amendments made by this section take effect and before such first plan year, the plan is operated in accordance with the requirements of such amendments or in accordance with an amendment prescribed by the Secretary of the Treasury and adopted by the plan, and (B) such plan amendment applies retroactively to the period after such amendments take effect and such first plan year. A plan shall not be treated as failing to provide definitely determinable benefits or contributions, or to be operated in accordance with the provisions of the plan, merely because it operates in accordance with this subsection. Subtitle E— Miscellaneous Provisions SEC. 9401. RESTORATION OF TRUST FUNDS FOR 1987. (a) In General.— (1) Obligations issued.— Except as provided in subsection (b), within 30 days after the expiration of any debt issuance suspension period to which this section applies, the Secretary of the Treasury shall issue to each Federal fund obligations under chapter 31 of title 31, United States Code, which bear such issue dates, interest rates, and maturity dates as are necessary to ensure that, after such obligations are issued, the holdings of such Federal fund will replicate to the maximum extent practicable the obligations that would have been held by such Federal fund if any— (A) failure to invest amounts in such Federal fund (or any disinvestment) resulting from the limitation of section 3101(b) of title 31, United States Code, had not occurred, and (B) issuance of such obligations had occurred immediately on the expiration of the debt issuance suspension period. (2) Interest credited.— On the first normal interest payment date or within 30 days after the expiration of any debt issuance suspension period (whichever is later) to which this section applies, the Secretary of the Treasury shall credit to each Federal fund an amount determined by the Secretary, after taking into account the actions taken pursuant to paragraph (1), to be equal to the income lost by such Federal fund by reason of any failure to invest amounts in such Federal fund (or any disinvestment) resulting from the limitation of such section 3101(b), including any income lost between the expiration of the debt issuance suspension period and the date of the credit. (b) Interest on Market-Based Obligations.— With respect to any Federal fund which invests in market-based special obligations, on the expiration of a debt issuance suspension period to which this section applies, the Secretary of the Treasury shall immediately credit to such fund an amount equal to the interest that would have been earned by such fund during the debt issuance suspension period if the daily balance in such fund that the Secretary was unable to invest by reason of the limitation of such section 3101(b) had been invested each day during such period, overnight, in obligations under chapter 31 of title 31, United States Code, earning interest at a rate determined by the Secretary in accordance with the standard practice of the Department of the Treasury. (c) Interest on State and Local Government Series.— On the expiration of any debt issuance suspension period to which this section applies, the Secretary of the Treasury shall (as of the close of such period) credit to each holder of any obligation which is part of the State and Local Government Series and which is in the nature of a demand deposit an amount equal to the income lost by such holder by reason of not being able to reinvest the principal of, and interest on, such obligation during such period. (d) Debt Issuance Suspension Periods to Which Section Applies.— This section shall apply to debt issuance suspension periods beginning on or after July 18, 1987, and ending before January 1, 1988. (e) Credited Amounts Treated as Interest.—104104Copy read “amounts treated as interest.—” All amounts credited under this section shall be treated as interest on obligations issued under chapter 31 of title 31, United States Code, for all purposes of Federal law. (f) Definitions.— For purposes of this section— (1) Debt issuance suspension period.— The term “debt issuance suspension period” means any period for which the Secretary of the Treasury determines that the issuance of obligations of the United States sufficient to conduct the orderly financial operations of the United States may not be made without exceeding the limitation imposed by section 3101(b) of title 31, United States Code. (2) Federal fund.— The term “Federal fund” means any Federal trust fund or Government account established pursuant to Federal law to which the Secretary of the Treasury has issued or is expressly authorized by law directly to issue obligations under chapter 31 of title 31, United States Code, in respect of public money, money otherwise required to be deposited in the Treasury, or amounts appropriated; except that such term shall not include the Civil Service Retirement and Disability Fund or the Thrift Savings Fund of the Federal Employees’ Retirement System. (g) Special Rules.— In the case of any debt suspension period beginning on or after July 18, 1987, and ending before the date of the enactment of this Act— (1) for purposes of determining the date on which the Secretary of the Treasury is required to take the actions described in subsections (a), (b), and (c), such period shall be treated as having ended on such date of enactment, and (2) the amount required to be credited under subsection (c) shall include any income lost because the credit was not made upon the expiration of such period. SEC. 9402. 6-MONTH EXTENSION OF PROVISIONS RELATING TO COLLECTION OF NON-TAX DEBTS OWED TO FEDERAL AGENCIES. (a) General Rule.— Subsection (c) of section 2653 of the Deficit Reduction Act of 1984 is amended by striking out “January 1, 1988” 26 USC 6402 note. and inserting in lieu thereof “July 1, 1988”. (b) Clarification of Congressional Intent as to Scope of Provision.— (1) Nothing in the amendments made by section 2653 of the Deficit Reduction Act of 1984 shall be construed as exempting, debts of corporations or any other category of persons from the application of such amendments. (2) It is the intent of the Congress that, to the extent practicable, the amendments made by section 2653 of the Deficit Reduction Act of 1984 shall extend to all Federal agencies (as defined in the amendments made by such section). (3) The Secretary of the Treasury shall issue regulations to Regulations. carry out the purposes of this subsection. (c) Study by the General Accounting Office.— The Comptroller 26 USC 6402 note. General of the United States, in consultation with the Secretary of the Treasury or his delegate, shall conduct a study of the operation and effectiveness of the amendments made by section 2653 of the Deficit Reduction Act of 1984. The study shall compile and evaluate information on the effect of those amendments on voluntary compliance with the income tax laws. Not later than April 1, 1989, the Reports. Comptroller General shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report of the study conducted under this subsection, together with such recommendations as he may deem advisable. SEC. 9403. INCREASE IN LIMIT ON LONG-TERM BONDS. The last sentence of section 3102(a) of title 31, United States Code, is amended by striking out “$250,000,000,000” and inserting in lieu thereof “$270,000,000,000”. Subtitle F— Customs User Fees; Trade and Customs Agency Authorizations SEC. 9501. CUSTOMS USER FEES. (a) Amendments to Customs User Fees Program.— Section 13031 of the Consolidated Budget Reconciliation Act of 1985 (19 U.S.C. 58c) is amended as follows: (1) Merchandise processing fee imposed on foreign content of certain schedule 8 articles.— (A) Subsection (a)(9)(A) is amended to read as follows: “(A) provided for under any item in schedule 8 of the Tariff Schedules of the United States except item 806.30 or 807.00,”. (B) Subsection (b)(8)(A) is amended— (i) by striking out “and” at the end of clause (i); (ii) by striking out the period at the end of clause (ii) and inserting a semicolon; and (iii) by adding at the end thereof the following: “(iii) in the case of merchandise classified under item 806.30 of the Tariff Schedules of the United States, be applied to the value of the foreign repairs or alterations to the merchandise; and “(iv) in the case of merchandise classified under item 807.00 of such Schedules, be applied to the full value of the merchandise, less the cost or value of the component United States products. With respect to merchandise that is classified under item 806.30 or 807.00 of such Schedules and is duty-free, the Secretary may collect the fee charged on the processing of the merchandise under subsection (a) (9) or (10) on the basis of aggregate data derived from financial and manufacturing reports used by the importer in the normal course of business, rather than on the basis of entry-by-entry accounting.”. (2) Provision of customs services.— Subsection (e) is amended— (A) by redesignating paragraph (4) as paragraph (6); (B) by inserting after paragraph (3) the following new paragraphs: “(4) Notwithstanding any other provision of law, all customs services (including, but not limited to, normal and overtime clearance and preclearance services) shall be adequately provided, when requested, for— “(A) the clearance of any commercial vessel, vehicle, or air- craft or its passengers, crew, stores, material, or cargo arriving, departing, or transiting the United States; “(B) the preclearance at any customs facility outside the United States of any commercial vessel, vehicle or aircraft or its passengers, crew, stores, material, or cargo; and “(C) the inspection or release of commercial cargo or other commercial shipments being entered into, or withdrawn from, the customs territory of the United States. “(5) For purposes of this subsection, customs services shall be treated as being ‘adequately provided’ if such of those services that are necessary to meet the needs of parties subject to customs inspection are provided in a timely manner taking into account factors such as— “(A) the unavoidability of weather, mechanical, and other delays; “(B) the necessity for prompt and efficient passenger and baggage clearance; “(C) the perishability of cargo; “(D) the desirability or unavoidability of late night and early morning arrivals from various time zones; “(E) the availability (in accordance with regulations prescribed under subsection (g)(2)) of customs personnel and resources; and “(F) the need for specific enforcement checks.”; and (C) by amending paragraph (6) (as redesignated by subparagraph (A)) to read as follows: “(6) Notwithstanding any other provision of law except paragraph (2), during any period when fees are authorized under subsection (a), no charges, other than such fees, may be collected— “(A) for any— “(i) cargo inspection, clearance, or other customs activity, expense, or service performed (regardless whether performed outside of normal business hours on an overtime basis), or “(ii) customs personnel provided, in connection with the arrival or departure of any commercial vessel, vehicle, or aircraft, or its passengers, crew, stores, material, or cargo, in the United States; “(B) for any preclearance or other customs activity, expense, or service performed, and any customs personnel provided, outside the United States in connection with the departure of any commercial vessel, vehicle, or aircraft, or its passengers, crew, stores, material, or cargo, for the United States; or “(C) in connection with— “(i) the activation or operation (including Customs Service supervision) of any foreign trade zone or subzone established under the Act of June 18, 1934 (commonly know as the Foreign Trade Zones Act, 19 U.S.C. 81a et seq.), or “(ii) the designation or operation (including Customs Service supervision) of any bonded warehouse under section 555 of the Tariff Act of 1930 (19 U.S.C. 1555).”. (3) Disposition of fees.— Subsection (f) is amended by striking out paragraphs (1), (2), and (3) and inserting the following: “(f) Disposition of Fees.— (1) There is established in the general fund of the Treasury a separate account which shall be known as the ‘Customs User Fee Account’. Notwithstanding section 524 of the Tariff Act of 1930 (19 U.S.C. 1524), there shall be deposited as offsetting receipts into the Customs User Fee Account all fees collected under subsection (a) except that portion of such fees that is required under paragraph (3) for the direct reimbursement of appropriations. “(2) All funds in the Customs User Fee Account shall be available, to the extent provided for in appropriations Acts, to pay the costs (other than costs for which direct reimbursement under paragraph (3) is required) incurred by the United States Customs Service in conducting commercial operations, including, but not limited to, all costs associated with commercial passenger, vessel, vehicle, aircraft, and cargo processing. So long as there is a surplus of funds in the Customs User Fee Account, the Secretary of the Treasury may not reduce personnel staffing levels for providing commercial clearance and preclearance services. “(3) The Secretary of the Treasury, in accordance with such section 524 and without regard to apportionment or any other administrative practice or limitation, shall directly reimburse, from the fees collected under subsection (a), each appropriation for the amount paid out of that appropriation for the costs incurred by the Secretary in providing— “(A) inspectional overtime services; and “(B) all preclearance services; for which the recipients of such services are not required to reimburse the Secretary of the Treasury. Reimbursement under this paragraph shall apply with respect to each fiscal year occurring after September 30, 1987, and shall be made at least quarterly. To the extent necessary, reimbursement of appropriations under this paragraph may be made on the basis of estimates made by the Secretary of the Treasury of the costs for inspectional overtime and preclearance services, and adjustments shall be made in subsequent reimbursements to the extent that the estimates were in excess of, or less than, the amounts required to be reimbursed.”. (4) Regulations.— Subsection (g) is amended— (A) by striking out “(g) Regulations.—The” and inserting “(g) Regulations.—(1) In addition to the regulations required under paragraph (2), the “; and (B) by inserting at the end thereof the following new paragraph: “(2) The Secretary of the Treasury shall prescribe regulations governing the work shifts of customs personnel at airports. Such regulations shall provide, among such other factors considered appropriate by the Secretary, that— “(A) the work shifts will be adjusted, as necessary, to meet cyclical and seasonal demands and to minimize the use of overtime; “(B) the work shifts will not be arbitrarily reduced or compressed; And “(C) consultation with the Advisory Committee on Commercial Operations of the United States Customs Service (established under section 9501(c) of the Omnibus Budget Reconciliation Act of 1987) will be carried out before adjustments are made in the work shifts.”. (5) Extension of customs user fees program.— Subsection (j)(3) is amended by striking out “1989” and inserting “1990”. (b) Additional Period to Claim Certain Refunds.— Section 1893(g)(2) of the Tax Reform Act of 1986 is amended by striking out 19 USC 58c note. “90 days after the date of enactment of this Act” and inserting “90 day-off after the date of the enactment of the Omnibus Budget Reconciliation Act of 1987”. (c) Analysis Regarding the CES Program; Effect on Implementation of Program.— (1) The Comptroller General of the United States shall conduct a comprehensive analysis, including a cost-benefit study, of the centralized cargo examination station (CES) concept from the perspective of both the United States Customs Service and business community users. The analysis shall be submitted on the same day to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate (hereinafter in this subsection referred to as the “Committees”) not later than March 30, 1988, and shall include recommendations as to how best to implement cargo inspection procedures. (2) The United States Customs Service— (A) may not, after the date of the enactment of this Act, establish any new centralized cargo examination station at any ocean port, airport, or land border location unless the Customs Service provides to the Committees advance notice, in writing, of not less than 90 days regarding the proposed establishment; and (B) shall, on such date of enactment, suspend operations at each centralized cargo examination station that was operating at an airport on the day before such date until the 90th day after a date— (i) that is not earlier than the date on which the analysis required under paragraph (1) is submitted to the Committees, and (ii) on which the Customs Service provides to the Committees notice, in writing, that it intends to resume such operations at the station. During the period of suspension of operations under subparagraph (B) at any centralized cargo examination station at an airport, the Secretary of the Treasury shall maintain customs operations and staffing at that airport at a level not less than that which was in effect immediately before the suspension took effect. (d) Effective Dates.— (1) Except as otherwise provided in this subsection, the provisions of this section take effect on the date of the enactment of this Act. (2) The amendments made by subsection (a)(1) apply with respect to articles entered, or withdrawn from warehouse for consumption, on or after the 15th day after the date of enactment of this Act. (3) The amendment made by subsection (a)(3) shall take effect on October 1, 1987. SEC. 9502. UNITED STATES INTERNATIONAL TRADE COMMISSION AUTHORIZATIONS. Section 330(e)(2) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is amended— (1) by striking out “1986” and inserting “1988”; and (2) by striking out “$28,901,000;” and inserting “$35,386,000;”. SEC. 9503. UNITED STATES CUSTOMS SERVICE AUTHORIZATIONS. (a) Authorization of Appropriations.— Section 301(b) of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)) is amended to read as follows: “(b) Authorization of Appropriations.— “(1) For noncommercial operations.— There are authorized to be appropriated for fiscal year 1988 not to exceed $348,192,000 for the salaries and expenses of the United States Customs Service that are incurred in noncommercial operations, of which $171,857.06 shall be available only for concluding Contract TC-82–54 that was awarded for the development and testing of an automatic license plate reader. “(2) For commercial operations.— There are authorized to be appropriated for fiscal year 1988 not to exceed $615,000,000 from the Customs User Fee Account for the salaries and expenses of the United States Customs Service that are incurred in commercial operations. “(3) For air interdiction.— There are authorized to be appropriated for fiscal year 1988 not to exceed $118,309,000 for the operation (including salaries and expenses) and maintenance of the air interdiction program of the United States Customs Service.”. (b) Congressional Notice of Certain Actions.— Section 301 of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075) is amended— (1) by striking out “Use Of Savings Resulting from Administrative Consolidations.—” in subsection (f); (2) by striking out “Allocation of Resources.—” in subsection (g) and inserting “(1)”; and (3) by adding at the end of subsection (g) the following new paragraph: “(2) The Commissioner of Customs shall notify the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives at least 180 days prior to taking any action which would— “(A) result in any significant reduction in force of employees other than by means of attrition; “(B) result in any significant reduction in hours of operation or services rendered at any office of the United States Customs Service or any port of entry;” “(C) eliminate or relocate any office of the United States Customs Service; “(D) eliminate any port of entry; or “(E) significantly reduce the number of employees assigned to any office of the United States Customs Service or any port of entry.”, (c) Advisory Committee on Commercial Operations of the United States Customs Service.— (1) The Secretary of the Treasury shall establish an advisory committee which shall be known as the “Advisory Committee on Commercial Operations of the United States Customs Service” (hereafter in this subsection referred to as the “Advisory Committee”). (2) (A) The Advisory Committee shall consist of 20 members appointed by the Secretary of the Treasury. (B) In making appointments under subparagraph (A), the Secretary of the Treasury shall ensure that— (i) the membership of the Advisory Committee is representative of the individuals and firms affected by the commercial operations of the United States Customs Service; and (ii) a majority of the members of the Advisory Committee do not belong to the same political party. (3) The Advisory Committee shall— (A) provide advice to the Secretary of the Treasury on all matters involving the commercial operations of the United States Customs Service; and (B) submit an annual report to the Committee on Finance Reports. of the Senate and the Committee on Ways and Means of the House of Representatives that shall— (i) describe the operations of the Advisory Committee during the preceding year, and (ii) set forth any recommendations of the Advisory Committee regarding the commercial operations of the United States Customs Service. (4) The Assistant Secretary of the Treasury for Enforcement shall preside over meetings of the Advisory Committee. (d) Dissolution of Existing Advisory Committee.— Section 13033 of the Consolidated Budget Reconciliation Act of 1985 is repealed. 19 USC 2071 note. SEC. 9504. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE AUTHORIZATIONS. Section 141(0(1) of the Trade Act of 1974 (19 U.S.C. 2171(f)(1)) is amended to read as follows: “(f) (1) (A) There are authorized to be appropriated for fiscal year 1988 to the Office for the purposes of carrying out its functions not to exceed $15,172,000. “(B) Of the amounts authorized to be appropriated under subparagraph (A) for fiscal year 1988— “(i) not to exceed $69,000 may be used for entertainment and representation expenses of the Office; and “(ii) not to exceed $1,000,000 shall remain available until expended.”.

32. 1987

    Pub. L. 100–203 § 9313(b)(3) · 101 Stat. 1330

    1. Amended · 29 U.S.C. § 1341(c)(2)(B)(ii)(II)

       Pub. L. 100–203, § 9313(b)(3), as amended by Pub. L. 101–239, § 7881(g)(5)

    2. Substituted · 29 U.S.C. § 1341(c)(2)(B)(ii)(II)

       Pub. L. 100–203, § 9313(b)(3), as substituted “proposed termination date” for “termination date”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 100–203, § 9313(b)(3), as amended by Pub. L. 101–239, § 7881(g)(5), substituted “proposed termination date” for “termination date”.

    Enacted provision · exact public law section
    (3) Clarification of date as of which employer must be in a bankruptcy proceeding to qualify for distress termination.— Clauses (i) and (ii) of section 4041(c)(2)(B) of ERISA (29 U.S.C. 1341(c)(2)(B) (i) and (ii)) are each amended by inserting “proposed” before “termination date”.

33. 1987

    Pub. L. 100–203 § 9313(b)(5)(C) · 101 Stat. 1330

    Redesignated · 29 U.S.C. § 1341(c)(2)(B)(ii)(III)

    Pub. L. 100–203, § 9313(b)(5)(C), added subcl. (III). Former subcl. (III) redesignated (IV)

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(ii)(III). Pub. L. 100–203, § 9313(b)(5)(C), added subcl. (III). Former subcl. (III) redesignated (IV).

    Enacted provision · exact public law section
    (C) by inserting after subclause (II) the following new subclause: “(III) such person timely submits to the corporation any request for the approval of the bankruptcy court (or other appropriate court in a case under such similar law of a State or political subdivision) of the plan termination, and”; and

34. 1987

    Pub. L. 100–203 § 9313(b)(2) · 101 Stat. 1330

    1. Redesignated · 29 U.S.C. § 1341(c)(2)(B)(ii)(IV)

       Pub. L. 100–203, § 9313(b)(2), (5)(B), (D), redesignated former subcl. (III) as (IV)

    2. Substituted · 29 U.S.C. § 1341(c)(2)(B)(ii)(IV)

       Pub. L. 100–203, § 9313(b)(2), (5)(B), (D), substituted “(or such other appropriate court) determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process and approves the termination” for “(or other appropriate court in a case under such similar law of a State or political subdivision) approves the termination”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(ii)(IV). Pub. L. 100–203, § 9313(b)(2), (5)(B), (D), redesignated former subcl. (III) as (IV) and substituted “(or such other appropriate court) determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process and approves the termination” for “(or other appropriate court in a case under such similar law of a State or political subdivision) approves the termination”.

    Enacted provision · exact public law section
    (2) Requirement of additional findings to qualify for distress termination based on reorganization in bankruptcy.— Section 4041(c)(2)(B)(ii)(III) of ERISA (29 U.S.C. 1341(c)(2)(B)(ii)(III)) is amended by striking “approves the termination” and inserting “determines that, unless the plan is terminated, such person will be unable to pay all its debts pursuant to a plan of reorganization and will be unable to continue in business outside the chapter 11 reorganization process and approves the termination”.

35. 1987

    Pub. L. 100–203 § 9313(b)(1)(B) · 101 Stat. 1330

    1. Redesignated · 29 U.S.C. § 1341(c)(2)(C); 29 U.S.C. § 1341(c)(2)(D)

       Pub. L. 100–203, § 9313(b)(1)(B), redesignated former subpar. (D) as (C)

    2. Struck · 29 U.S.C. § 1341(c)(2)(C); 29 U.S.C. § 1341(c)(2)(D)

       Pub. L. 100–203, § 9313(b)(1)(B), struck out former subpar. (C) which read as follows: “For purposes of subparagraph (B), the term ‘substantial member’ of a controlled group means a person whose assets comprise 5 percent or more of the total assets of the controlled group as a whole.”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(C), (D). Pub. L. 100–203, § 9313(b)(1)(B), redesignated former subpar. (D) as (C) and struck out former subpar. (C) which read as follows: “For purposes of subparagraph (B), the term ‘substantial member’ of a controlled group means a person whose assets comprise 5 percent or more of the total assets of the controlled group as a whole.”

    Enacted provision · exact public law section
    (B) by striking subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C).

36. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(3)(A)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments” in heading and in cl. (ii)

    Source evidence

    Code amendment note
    Subsec. (c)(3)(A). Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments” in heading and in cl. (ii).

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

37. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(3)(B)(i)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted in heading and text “benefit liabilities” for “benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(B)(i). Pub. L. 100–203, § 9313(a)(2)(D), substituted in heading and text “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

38. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(3)(B)(ii)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted in heading and text “benefit liabilities” for “benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(B)(ii). Pub. L. 100–203, § 9313(a)(2)(D), substituted in heading and text “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

39. 1987

    Pub. L. 100–203 § 9312(c)(1) · 101 Stat. 1330

    1. Struck · 29 U.S.C. § 1341(c)(3)(B)(ii)

       Pub. L. 100–203, § 9312(c)(1), struck out former subcl. (I) designation

    2. Substituted · 29 U.S.C. § 1341(c)(3)(B)(ii)

       Pub. L. 100–203, § 9312(c)(1), substituted comma for dash before “the plan administrator”

    3. Substituted · 29 U.S.C. § 1341(c)(3)(B)(ii)

       Pub. L. 100–203, § 9312(c)(1), substituted period for “, and” after “termination of the plan”

    4. Struck · 29 U.S.C. § 1341(c)(3)(B)(ii)

       Pub. L. 100–203, § 9312(c)(1), struck out former subcl. (II) which read as follows: “the corporation shall establish a separate trust in connection with the plan for purposes of section 1349 of this title.”

    Target inherited from the preceding amendment note.

    Source evidence

    Code amendment note
    Pub. L. 100–203, § 9312(c)(1), struck out former subcl. (I) designation and substituted comma for dash before “the plan administrator”, substituted period for “, and” after “termination of the plan”, and struck out former subcl. (II) which read as follows: “the corporation shall establish a separate trust in connection with the plan for purposes of section 1349 of this title.”

    Enacted provision · exact public law section
    (1) Section 4041(c)(3)(B)(ii) of ERISA (29 U.S.C. 1341(c)(3)(B)(ii)) is amended— (A) by striking subclause (II); (B) by striking “plan, and” at the end of subclause (I) and inserting “plan.”; and (C) by striking “available to it—” and all that follows through “the plan administrator” and inserting “available to it, the plan administrator”.

40. 1987

    Pub. L. 100–203 § 9312(c)(2) · 101 Stat. 1330

    1. Struck · 29 U.S.C. § 1341(c)(3)(B)(iii)

       Pub. L. 100–203, § 9312(c)(2), struck out former subcl. (I) designation

    2. Substituted · 29 U.S.C. § 1341(c)(3)(B)(iii)

       Pub. L. 100–203, § 9312(c)(2), substituted comma for dash before “the corporation shall commence”

    3. Substituted · 29 U.S.C. § 1341(c)(3)(B)(iii)

       Pub. L. 100–203, § 9312(c)(2), substituted period for “, and” after “section 1342 of this title”

    4. Struck · 29 U.S.C. § 1341(c)(3)(B)(iii)

       Pub. L. 100–203, § 9312(c)(2), struck out former subcl. (II) which read as follows: “the corporation shall establish a separate trust in connection with the plan for purposes of section 1349 of this title unless the corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under section 1322 of this title.”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(B)(iii). Pub. L. 100–203, § 9312(c)(2), struck out former subcl. (I) designation and substituted comma for dash before “the corporation shall commence”, substituted period for “, and” after “section 1342 of this title”, and struck out former subcl. (II) which read as follows: “the corporation shall establish a separate trust in connection with the plan for purposes of section 1349 of this title unless the corporation determines that all benefit commitments under the plan are benefits guaranteed by the corporation under section 1322 of this title.”

    Enacted provision · exact public law section
    (2) Section 4041(c)(3)(B)(iii) of ERISA (29 U.S.C. 1341(c)(3)(B)(iii)) is amended— (A) by striking subclause (II); (B) by striking “section 4042, and” at the end of subclause (I) and inserting “section 4042.”; and (C) by striking “available to it—” and all that follows through “the corporation” in subclause (I) and inserting “available to it, the corporation”.

41. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(3)(C)(i)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted in heading and text “benefit liabilities” for “benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(C)(i). Pub. L. 100–203, § 9313(a)(2)(D), substituted in heading and text “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

42. 1987

    Pub. L. 100–203 § 9313(a)(2)(D) · 101 Stat. 1330

    Substituted · 29 U.S.C. § 1341(c)(3)(D)(ii)(IV)

    Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(D)(ii)(IV). Pub. L. 100–203, § 9313(a)(2)(D), substituted “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (D) Paragraphs (2) and (3) of section 4041(c) of ERISA (29 U.S.C. 1341(c) (2), (3)) are each amended by striking out “benefit commitments” each place it appears (including in any heading) and inserting in lieu thereof “benefit liabilities”.

43. 1987

    Pub. L. 100–203 § 9313(a)(2)(E) · 101 Stat. 1330

    1. Substituted · 29 U.S.C. § 1341(d)(1)

       Pub. L. 100–203, § 9313(a)(2)(E), substituted in text, “no amount of unfunded benefit liabilities” for “no amount of unfunded benefit commitments”

    2. Substituted · 29 U.S.C. § 1341(d)(1)

       Pub. L. 100–203, § 9313(a)(2)(E), substituted in text, “benefit liabilities” for “benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (d)(1). Pub. L. 100–203, § 9313(a)(2)(E), substituted in text, “no amount of unfunded benefit liabilities” for “no amount of unfunded benefit commitments” and in heading, “benefit liabilities” for “benefit commitments”.

    Enacted provision · exact public law section
    (E) Paragraph (1) of section 4041(d) of ERISA (29 U.S.C. 1341(d)) is amended— (i) by striking out “no amount of unfunded benefit commitments” and inserting in lieu thereof “no amount of unfunded benefit liabilities”, and (ii) by striking out “BENEFIT COMMITMENTS” in the paragraph heading and inserting in lieu thereof “benefit liabilities”.

44. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(g)(6) · 103 Stat. 2106

    Changed · 29 U.S.C. § 1341(b)(2)(A)

    Pub. L. 101–239, § 7881(g)(6), realigned margin of last sentence

    Source evidence

    Code amendment note
    Subsec. (b)(2)(A). Pub. L. 101–239, § 7881(g)(6), realigned margin of last sentence.

    Enacted provision · exact public law section
    (6) Section 4041(b)(2)(A) of ERISA is amended by adjusting the left-hand margination of the last sentence two ems to the right.

45. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7893(c) · 103 Stat. 2106

    Changed · 29 U.S.C. § 1341(b)(2)(B)

    Pub. L. 101–239, § 7893(c), realigned margin of last sentence

    Source evidence

    Code amendment note
    Subsec. (b)(2)(B). Pub. L. 101–239, § 7893(c), realigned margin of last sentence.

    Enacted provision · exact public law section
    (c) Amendment Related to Section 11008.— Subparagraph (B) of section 4041(b)(2) of ERISA is amended by adjusting the margination 29 USC 1341. of the sentence following clause (ii)(V) 2 ems to the left.

46. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(g)(4) · 103 Stat. 2106

    Inserted · 29 U.S.C. § 1341(b)(3)(B)

    Pub. L. 101–239, § 7881(g)(4), inserted period at end

    Source evidence

    Code amendment note
    Subsec. (b)(3)(B). Pub. L. 101–239, § 7881(g)(4), inserted period at end.

    Enacted provision · exact public law section
    (4) Subparagraph (B) of section 4041(b)(3) of ERISA is amended by adding a period at the end.

47. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(g)(3) · 103 Stat. 2106

    1. Inserted · 29 U.S.C. § 1341(c)(2)(A)(ii)

       Pub. L. 101–239, § 7881(g)(3), in introductory provisions, inserted “unless the corporation determines the information is not necessary for purposes of paragraph (3)(A) or section 1362 of this title,” before “certification”, in subcl. (I)

    2. Inserted · 29 U.S.C. § 1341(c)(2)(A)(ii)

       Pub. L. 101–239, § 7881(g)(3), in introductory provisions, inserted “and, if applicable, the proposed distribution date” after “termination date”, and in subcls. (II) to (V)

    3. Substituted · 29 U.S.C. § 1341(c)(2)(A)(ii)

       Pub. L. 101–239, § 7881(g)(3), in introductory provisions, substituted “dates” for “date”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(A)(ii). Pub. L. 101–239, § 7881(g)(3), in introductory provisions, inserted “unless the corporation determines the information is not necessary for purposes of paragraph (3)(A) or section 1362 of this title,” before “certification”, in subcl. (I), inserted “and, if applicable, the proposed distribution date” after “termination date”, and in subcls. (II) to (V), substituted “dates” for “date”.

    Enacted provision · exact public law section
    (3) Clause (ii) of section 4041(c)(2)(A) of ERISA is amended— (A) by inserting “unless the corporation determines the information is not necessary for purposes of paragraph (3)(A) or section 4062,” before “certification”, (B) by inserting “and, if applicable, the proposed distribution date” after “termination date” in subclause (I), and (C) by striking “date” and inserting “dates” in subclauses (II) through (V).

48. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(f)(7)(A) · 103 Stat. 2106

    1. Struck · 29 U.S.C. § 1341(c)(2)(A)(iii)(II)

       Pub. L. 101–239, § 7881(f)(7)(A), (B), struck out “(or its designee under section 1349(b) of this title)” before “to be able”

    2. Substituted · 29 U.S.C. § 1341(c)(2)(A)(iii)(II)

       Pub. L. 101–239, § 7881(f)(7)(A), (B), substituted “section 1322(c) of this title” for “section 1349 of this title”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(A)(iii)(II). Pub. L. 101–239, § 7881(f)(7)(A), (B), struck out “(or its designee under section 1349(b) of this title)” before “to be able” and substituted “section 1322(c) of this title” for “section 1349 of this title”.

    Enacted provision · exact public law section
    (A) fay striking “(or its designee under section 4049(b))” in paragraph (2)(A)(iii)(H),

49. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(g)(2) · 103 Stat. 2106

    Substituted · 29 U.S.C. § 1341(c)(2)(B)

    Pub. L. 101–239, § 7881(g)(2), substituted “(as of the proposed termination date)” for “(as of the termination date)”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B). Pub. L. 101–239, § 7881(g)(2), substituted “(as of the proposed termination date)” for “(as of the termination date)”.

    Enacted provision · exact public law section
    (2) Section 4041(c)(2)(B) of ERISA is amended by inserting “proposed” before “termination” in the parenthetical in the second sentence.

50. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(g)(5) · 103 Stat. 2106

    Changed · 29 U.S.C. § 1341(c)(2)(B)(i); 29 U.S.C. § 1341(c)(2)(B)(ii)

    Pub. L. 101–239, § 7881(g)(5), made clarifying amendment to directory language of Pub. L. 100–203, § 9313(b)(3), see 1987 Amendment note below

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(i), (ii). Pub. L. 101–239, § 7881(g)(5), made clarifying amendment to directory language of Pub. L. 100–203, § 9313(b)(3), see 1987 Amendment note below.

    Enacted provision · exact public law section
    (5) Section 9313(b)(3) of the Pension Protection Act is amended 29 USC 1341. by inserting “each place it appears” before the period.

51. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(f)(7)(C) · 103 Stat. 2106

    Struck · 29 U.S.C. § 1341(c)(3)(C)(i)

    Pub. L. 101–239, § 7881(f)(7)(C), struck out at end “If the corporation concurs in the finding of the plan administrator (or the corporation itself makes such a finding) the corporation shall take the actions set forth in subparagraph (B)(ii)(II) relating to the trust established for purposes of section 1349 of this title.”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(C)(i). Pub. L. 101–239, § 7881(f)(7)(C), struck out at end “If the corporation concurs in the finding of the plan administrator (or the corporation itself makes such a finding) the corporation shall take the actions set forth in subparagraph (B)(ii)(II) relating to the trust established for purposes of section 1349 of this title.”

    Enacted provision · exact public law section
    (C) by striking the last sentence of paragraph (3)(C)(i).

52. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7893(d)(1) · 103 Stat. 2106

    Changed · 29 U.S.C. § 1341(c)(3)(D)

    Pub. L. 101–239, § 7893(d)(1), realigned margins

    Source evidence

    Code amendment note
    Subsec. (c)(3)(D). Pub. L. 101–239, § 7893(d)(1), realigned margins.

    Enacted provision · exact public law section
    (1) Subparagraph (D) of section 4041(c)(3) of ERISA is amended by adjusting the margination thereof, and of each subdivision thereof, 2 ems to the right.

53. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7893(d)(2) · 103 Stat. 2106

    Substituted · 29 U.S.C. § 1341(c)(3)(D)(ii)(I)

    Pub. L. 101–239, § 7893(d)(2), substituted “under this subsection” for “of this subsection”

    Source evidence

    Code amendment note
    Subsec. (c)(3)(D)(ii)(I). Pub. L. 101–239, § 7893(d)(2), substituted “under this subsection” for “of this subsection”.

    Enacted provision · exact public law section
    (2) Subclause (I) of section 4041(c)(3)(D)(ii) of ERISA is amended by striking “of” and inserting “under”.

54. 1989

    Revenue Reconciliation Act of 1989

    Pub. L. 101–239 § 7881(g)(1) · 103 Stat. 2106

    Substituted · 29 U.S.C. § 1341(d)(1)

    Pub. L. 101–239, § 7881(g)(1), substituted “sufficient for benefit liabilities” for “sufficient for benefit commitments”

    Source evidence

    Code amendment note
    Subsec. (d)(1). Pub. L. 101–239, § 7881(g)(1), substituted “sufficient for benefit liabilities” for “sufficient for benefit commitments”.

    Enacted provision · exact public law section
    (1) Section 4041(d)(1) of ERISA is amended by striking “sufficient 29 USC 1341. for benefit commitments” and inserting “sufficient for benefit liabilities”.

55. 1994

    Retirement Protection Act of 1994

    Pub. L. 103–465 § 778(a)(1)(A) · 108 Stat. 4809

    1. Added · 29 U.S.C. § 1341(b)(2)(C)(i)(I)

       Pub. L. 103–465, § 778(a)(1)(A), added subcl. (I)

    2. Struck · 29 U.S.C. § 1341(b)(2)(C)(i)(I)

       Pub. L. 103–465, § 778(a)(1)(A), struck out former subcl. (I) which read as follows: “It has reason to believe that any requirement of subsection (a)(2) or subparagraph (A) or (B) has not been met, or”

    Source evidence

    Code amendment note
    Subsec. (b)(2)(C)(i)(I). Pub. L. 103–465, § 778(a)(1)(A), added subcl. (I) and struck out former subcl. (I) which read as follows: “It has reason to believe that any requirement of subsection (a)(2) or subparagraph (A) or (B) has not been met, or”.

    Enacted provision · exact public law section
    (A) by striking subclause (I) and inserting the following new subclause: “(I) it determines, based on the notice sent under paragraph (2)(A) of subsection (b), that there is reason to believe that the plan is not sufficient for benefit liabilities,”;

56. 1994

    Retirement Protection Act of 1994

    Pub. L. 103–465 § 778(a)(1)(B) · 108 Stat. 4809

    Added · 29 U.S.C. § 1341(b)(2)(C)(i)(III)

    Pub. L. 103–465, § 778(a)(1)(B), (C), added subcl. (III)

    Source evidence

    Code amendment note
    Subsec. (b)(2)(C)(i)(III). Pub. L. 103–465, § 778(a)(1)(B), (C), added subcl. (III).

    Enacted provision · exact public law section
    (B) by striking the period at the end of subclause (II) and inserting “, or”; and

57. 1994

    Retirement Protection Act of 1994

    Pub. L. 103–465 § 776(b)(3) · 108 Stat. 4809

    Inserted · 29 U.S.C. § 1341(b)(3)(A)(ii)

    Pub. L. 103–465, § 776(b)(3), inserted at end “A transfer of assets to the corporation in accordance with section 1350 of this title on behalf of a missing participant shall satisfy this subparagraph with respect to such participant.”

    Source evidence

    Code amendment note
    Subsec. (b)(3)(A)(ii). Pub. L. 103–465, § 776(b)(3), inserted at end “A transfer of assets to the corporation in accordance with section 1350 of this title on behalf of a missing participant shall satisfy this subparagraph with respect to such participant.”

    Enacted provision · exact public law section
    (3) Amendment to section 4041.— Section 4041(b)(3)(A)(ii) of such Act (29 U.S.C. 1341(b)(3)(A)(ii)) is amended by adding at the end the following new sentence: “A transfer of assets to the corporation in accordance with section 4050 on behalf of a missing participant shall satisfy this subparagraph with respect to such participant”

58. 1994

    Retirement Protection Act of 1994

    Pub. L. 103–465 § 778(b)(1) · 108 Stat. 4809

    Inserted · 29 U.S.C. § 1341(c)(2)(B)(i)(I)

    Pub. L. 103–465, § 778(b)(1), inserted “Federal law or” after “under any similar”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(B)(i)(I). Pub. L. 103–465, § 778(b)(1), inserted “Federal law or” after “under any similar”.

    Enacted provision · exact public law section
    (1) Clarification of distress criterion.— Subclause (I) of section 4041(c)(2)(B)(i) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341(c)(2)(B)(i)) is amended by inserting after “under any similar” the following: “Federal law or”.

59. 2006

    Pub. L. 109–280 § 409(a) · 120 Stat. 780

    Added · 29 U.S.C. § 1341(b)(5)

    Pub. L. 109–280, § 409(a), added par. (5)

    Source evidence

    Code amendment note
    Subsec. (b)(5). Pub. L. 109–280, § 409(a), added par. (5).

    Enacted provision · exact public law section
    (a) In General.— Section 4041(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341(b)) is amended by adding at the end the following new paragraph: “(5) Special rule for certain plans where cessation or change in membership of a controlled group.— “(A) In general.— Except as provided in subparagraph (B), if— “(i) there is transaction or series of transactions which result in a person ceasing to be a member of a controlled group, and “(ii) such person immediately before the transaction or series of transactions maintained a single-employer plan which is a defined benefit plan which is fully funded, then the interest rate used in determining whether the plan is sufficient for benefit liabilities or to otherwise assess plan liabilities for purposes of this subsection or section 4042(a)(4) shall be not less than the interest rate used in determining whether the plan is fully funded. “(B) Limitations.— Subparagraph (A) shall not apply to any transaction or series of transactions unless— “(i) any employer maintaining the plan immediately before or after such transaction or series of transactions— “(I) has an outstanding senior unsecured debt instrument which is rated investment grade by each of the nationally recognized statistical rating organizations for corporate bonds that has issued a credit rating for such instrument, or “(II) if no such debt instrument of such employer has been rated by such an organization but 1 or more of such organizations has made an issuer credit rating for such employer, all such organizations which have so rated the employer have rated such employer investment grade, and “(ii) the employer maintaining the plan after the transaction or series of transactions employs at least 20 percent of the employees located in the United States who were employed by such employer immediately before the transaction or series of transactions. “(C) Fully funded.— For purposes of subparagraph (A), a plan shall be treated as fully funded with respect to any transaction or series of transactions if— “(i) in the case of a transaction or series of transactions which occur in a plan year beginning before January 1, 2008, the funded current liability percentage determined under section 302(d) for the plan year is at least 100 percent, and “(ii) in the case of a transaction or series of transactions which occur in a plan year beginning on or after such date, the funding target attainment percentage determined under section 303 is, as of the valuation date for such plan year, at least 100 percent. “(D) 2 year limitation.— Subparagraph (A) shall not apply to any transaction or series of transactions if the plan referred to in subparagraph (A)(ii) is terminated under section 4041(c) or 4042 after the close of the 2-year period beginning on the date on which the first such transaction occurs.” .

    Effective date note
    Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

60. 2006

    Pub. L. 109–280 § 506(a)(2) · 120 Stat. 780

    Substituted · 29 U.S.C. § 1341(c)(1)(C)

    Pub. L. 109–280, § 506(a)(2), substituted “subparagraphs (B) and (D)” for “subparagraph (B)”

    Source evidence

    Code amendment note
    Subsec. (c)(1)(C). Pub. L. 109–280, § 506(a)(2), substituted “subparagraphs (B) and (D)” for “subparagraph (B)”.

    Enacted provision · exact public law section
    (2) Conforming amendment.— Section 4041(c)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341(c)(1)) is amended in subparagraph (C) by striking “subparagraph (B)” and inserting “subparagraphs (B) and (D)”.

    Effective date note
    Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

61. 2006

    Pub. L. 109–280 § 506(a)(1) · 120 Stat. 780

    Added · 29 U.S.C. § 1341(c)(2)(D)

    Pub. L. 109–280, § 506(a)(1), added subpar. (D)

    Source evidence

    Code amendment note
    Subsec. (c)(2)(D). Pub. L. 109–280, § 506(a)(1), added subpar. (D).

    Enacted provision · exact public law section
    (1) In general.— Section 4041(c)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341(c)(2)) is amended by adding at the end the following: “(D) Disclosure of termination information.— “(i) In general.— A plan administrator that has filed a notice of intent to terminate under subsection (a)(2) shall provide to an affected party any information provided to the corporation under subsection (a)(2) not later than 15 days after— “(I) receipt of a request from the affected party for the information; or “(II) the provision of new information to the corporation relating to a previous request. “(ii) Confidentiality.— “(I) In general.— The plan administrator shall not provide information under clause (i) in a form that includes any information that may directly or indirectly be associated with, or otherwise identify, an individual participant or beneficiary. “(II) Limitation.— A court may limit disclosure under this subparagraph of confidential information described in section 552(b) of title 5, United States Code, to any authorized representative of the participants or beneficiaries that agrees to ensure the confidentiality of such information. “(iii) Form and manner of information; charges.— “(I) Form and manner.— The corporation may prescribe the form and manner of the provision of information under this subparagraph, which shall include delivery in written, electronic, or other appropriate form to the extent that such form is reasonably accessible to individuals to whom the information is required to be provided. “(II) Reasonable charges.— A plan administrator may charge a reasonable fee for any information provided under this subparagraph in other than electronic form. “(iv) Authorized representative.— For purposes of this subparagraph, the term ‘authorized representative’ means any employee organization representing participants in the pension plan.” .

    Effective date note
    Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

62. 2008

    Worker, Retiree, and Employer Recovery Act of 2008

    Pub. L. 110–458 § 104(d) · 122 Stat. 5092

    Substituted · 29 U.S.C. § 1341(b)(5)(A)

    Pub. L. 110–458, § 104(d), substituted “subparagraphs (B) and (D)” for “subparagraph (B)” in introductory provisions

    Source evidence

    Code amendment note
    Subsec. (b)(5)(A). Pub. L. 110–458, § 104(d), substituted “subparagraphs (B) and (D)” for “subparagraph (B)” in introductory provisions.

    Enacted provision · exact public law section
    (d) Amendments Related to Section 409.— Section 4041(b)(5)(A) of ERISA 29 USC 1341. is amended by striking “subparagraph (B)” and inserting “subparagraphs (B) and (D)”.

    Effective date note
    Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

63. 2008

    Worker, Retiree, and Employer Recovery Act of 2008

    Pub. L. 110–458 § 105(e)(1) · 122 Stat. 5092

    Substituted · 29 U.S.C. § 1341(c)(2)(D)(i)

    Pub. L. 110–458, § 105(e)(1), substituted “subparagraph (A) or the regulations under subsection (a)(2)” for “subsection (a)(2)”

    Source evidence

    Code amendment note
    Subsec. (c)(2)(D)(i). Pub. L. 110–458, § 105(e)(1), substituted “subparagraph (A) or the regulations under subsection (a)(2)” for “subsection (a)(2)”.

    Enacted provision · exact public law section
    (1) Section 4041(c)(2)(D)(i) of ERISA 29 USC 1341. is amended by striking “subsection (a)(2)” the second place it appears and inserting “subparagraph (A) or the regulations under subsection (a)(2)”.

    Effective date note
    Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

85 of 90 references resolved to an enrolled provision · 5 partial