[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 2047 Introduced in Senate (IS)]







104th CONGRESS
  2d Session
                                S. 2047

To amend the Internal Revenue Code of 1986 to modify the application of 
       the pension nondiscrimination rules to governmental plans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 2, 1996

   Mr. Hatch (for himself, Mr. Conrad, Mr. Pressler, Mr. Pryor, Mr. 
Nickles, and Mr. Baucus) 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 modify the application of 
       the pension nondiscrimination rules to governmental plans.

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

SECTION 1. MODIFICATIONS TO NONDISCRIMINATION AND MINIMUM PARTICIPATION 
              RULES WITH RESPECT TO GOVERNMENTAL PLANS.

    (a) General Nondiscrimination and Participation Rules.--
            (1) Nondiscrimination requirements.--Paragraph (5) of 
        section 401(a) of the Internal Revenue Code of 1986 (relating 
        to qualified pension, profit-sharing, and stock bonus plans) is 
        amended by adding at the end the following new subparagraph:
                    ``(F) Governmental plans.--Paragraphs (3) and (4) 
                shall not apply to a governmental plan (within the 
                meaning of section 414(d)).''
            (2) Additional participation requirements.--Subparagraph 
        (H) of section 401(a)(26) of such Code is amended to read as 
        follows:
                    ``(H) Exception for governmental plans.--This 
                paragraph shall not apply to a governmental plan 
                (within the meaning of section 414(d)).''
            (3) Minimum participation standards.--Paragraph (2) of 
        section 410(c) of such Code is amended to read as follows:
            ``(2) A plan described in paragraph (1) shall be treated as 
        meeting the requirements of this section for purposes of 
        section 401(a), except that in the case of a plan described in 
        subparagraph (B), (C), or (D) of paragraph (1), this paragraph 
        shall only apply if such plan meets the requirements of section 
        401(a)(3) (as in effect on September 1, 1974).''
    (b) Participation Standards for Qualified Cash or Deferred 
Arrangements.--Paragraph (3) of section 401(k) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(E)(i) The requirements of subparagraph (A)(i) 
                and (C) shall not apply to a governmental plan (within 
                the meaning of section 414(d)).
                    ``(ii) The requirements of subsection (m)(2) 
                (without regard to subsection (a)(4)) shall apply to 
                any matching contribution of a governmental plan (as so 
                defined).''
    (c) Nondiscrimination Rules for Section 403(b) Plans.--Paragraph 
(12) of section 403(b) of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new subparagraph:
                    ``(C) Governmental plans.--For purposes of 
                paragraph (1)(D), the requirements of subparagraph 
                (A)(i) shall not apply to a governmental plan (within 
                the meaning of section 414(d)).''
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning on or after the date of 
        enactment of this Act.
            (2) Treatment for years beginning before date of 
        enactment.--A governmental plan (within the meaning of section 
        414(d) of the Internal Revenue Code of 1986) shall be treated 
        as satisfying the requirements of sections 401(a)(3), 
        401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and 
        (b)(12), and 410 of such Code for all taxable years beginning 
        before the date of enactment of this Act.
                                 <all>