[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4019 Referred in Senate (RFS)]


109th CONGRESS
  2d Session
                                H. R. 4019


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 18, 2006

     Received; read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 AN ACT


 
To amend title 4 of the United States Code to clarify the treatment of 
  self-employment for purposes of the limitation on State taxation of 
                           retirement income.

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

SECTION 1. CLARIFICATION OF TREATMENT OF SELF-EMPLOYMENT FOR PURPOSES 
              OF THE LIMITATION ON STATE TAXATION OF RETIREMENT INCOME.

    (a) In General.--Section 114(b)(1)(I) of title 4, United States 
Code, is amended--
            (1) by inserting ``(or any plan, program, or arrangement 
        that is in writing, that provides for retirement payments in 
        recognition of prior service to be made to a retired partner, 
        and that is in effect immediately before retirement begins)'' 
        after ``section 3121(v)(2)(C) of such Code'',
            (2) by inserting ``which may include income described in 
        subparagraphs (A) through (H)'' after ``(not less frequently 
        than annually'',
            (3) by adding at the end the following:
                ``The fact that payments may be adjusted from time to 
                time pursuant to such plan, program, or arrangement to 
                limit total disbursements under a predetermined 
                formula, or to provide cost of living or similar 
                adjustments, will not cause the periodic payments 
                provided under such plan, program, or arrangement to 
                fail the `substantially equal periodic payments' 
                test.'', and
            (4) by adding at the end the following:
            ``(4) For purposes of this section, the term `retired 
        partner' is an individual who is described as a partner in 
        section 7701(a)(2) of the Internal Revenue Code of 1986 and who 
        is retired under such individual's partnership agreement.''.
    (b) Application.--The amendments made by this section apply to 
amounts received after December 31, 1995.

            Passed the House of Representatives July 17, 2006.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.