[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 622 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 622

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

                             April 22, 1997

    Mr. Hatch (for himself, Mr. Conrad, Mr. Cochran, Mr. Gregg, Ms. 
Moseley-Braun, Mr. Enzi, Mr. Inouye, Mr. Baucus, Mr. Reid, Mr. D'Amato, 
 Mr. Kyl, Mr. Ashcroft, Mr. Domenici, Mr. Hagel, Mr. Bond, Mr. Thomas, 
 Mr. Murkowski, and Mr. Nickles) 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.--Section 401(a)(5) 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:
                    ``(G) Governmental plans.--Paragraphs (3) and (4) 
                shall not apply to a governmental plan (within the 
                meaning of section 414(d)).''.
            (2) Additional participation requirements.--Section 
        401(a)(26)(H) of such Code (relating to additional 
        participation requirements) 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.--Section 410(c)(2) of 
        such Code (relating to application of participation standards 
        to certain plans) 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.--Section 401(k)(3) of the Internal Revenue Code of 1986 
(relating to application of participation and discrimination standards) 
is amended by adding at the end the following:
                    ``(G)(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.--Section 
403(b)(12) of the Internal Revenue Code of 1986 (relating to 
nondiscrimination requirements) is amended by adding at the end the 
following:
                    ``(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 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>