[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2523 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2523

 To amend the Internal Revenue Code of 1986 to permit certain foreign 
  pension plans to invest in the United States on a nontaxable basis.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            October 6 (legislative day, September 12), 1994

  Mr. Wallop introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to permit certain foreign 
  pension plans to invest in the United States on a nontaxable basis.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TAX EXEMPTION FOR CERTAIN FOREIGN PENSION PLANS INVESTING IN 
              THE UNITED STATES.

    (a) In General.--Section 501(c) of the Internal Revenue Code of 
1986 (relating to organizations exempt from tax under section 501(a)) 
is amended by adding at the end the following new paragraph:
            ``(26)(A) Except as provided in subparagraph (B), a trust, 
        corporation, or fund which is formed pursuant to, or as part 
        of, a foreign pension plan--
                    ``(i) which is described in section 3(2) of the 
                Employee Retirement Income Security Act (29 U.S.C. 
                1002(2));
                    ``(ii) the assets of which are segregated from the 
                assets of the employer or employers maintaining the 
                plan pursuant to the laws of the foreign country in 
                which such plan is maintained;
                    ``(iii) the income of which is, under the laws of 
                the foreign country in which the plan is maintained, 
                exempt from tax or is subject to a lower rate of 
                taxation than is generally imposed on other residents 
                of such foreign country; and
                    ``(iv) which provides benefits to a broad 
                classification of employees, not merely highly 
                compensated employees or owners.
        If all of the assets of a trust, corporation, or fund are held 
        for the benefit of one or more foreign pension plans described 
        in this subparagraph, such trust, corporation, or fund shall be 
        treated as described in this subparagraph.
            ``(B) The exemption provided by this paragraph shall be 
        subject to adjustment under section 896 (relating to the 
        adjustment of tax of nationals of foreign countries). The 
        President shall, no later than January 1, 1996, report to 
        Congress on the extent to which the President has exercised the 
        authority under that section with respect to relief from 
        foreign income taxes for plans described in section 401(a).''
    (b) Conforming Amendments.--(1) Section 512(a)(2) of the Internal 
Revenue Code of 1986 (relating to the unrelated business taxable income 
of certain foreign organizations) is amended by inserting ``or section 
501(c)(26)'' after ``section 511''.
    (2) Clause (ii) of section 514(c)(9)(C) of such Code (relating to 
unrelated debt-financed income of qualified trusts) is amended by 
inserting ``or any foreign pension plan described in section 
501(c)(26)'' after ``section 401''.
    (3) Section 818(a) of such Code (relating to pension plan contracts 
of life insurance companies) is amended by striking ``or'' at the end 
of paragraph (5), by striking the period at the end of paragraph (6) 
and inserting ``; or'', and by adding at the end the following new 
paragraph:
            ``(7) entered into with trusts, corporations, or funds 
        which are formed pursuant to, or as part of, a foreign pension 
        plan described in section 501(c)(26).''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1995.
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