[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2193 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2193

To amend the Internal Revenue Code of 1986 to establish fairness in the 
  treatment of certain pension plans maintained by churches, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 25, 2006

Mrs. Hutchison 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 establish fairness in the 
  treatment of certain pension plans maintained by churches, and for 
                            other purposes.

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

SECTION 1. EXTENDING WAIVER OF DEFINED BENEFIT COMPENSATION LIMIT TO 
              PARTICIPANTS IN CHURCH PLANS WHO ARE NOT HIGHLY 
              COMPENSATED EMPLOYEES.

    (a) In General.--Paragraph (11) of section 415(b) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``Subparagraph (B) of paragraph (1) shall not apply to a plan 
maintained by an organization described in section 3121(w)(3) except 
with respect to highly compensated benefits. For purposes of this 
paragraph, the term `highly compensated benefits' means any benefits 
accrued for an employee in any year on or after the first year in which 
such employee is a highly compensated employee (as defined in section 
414(q)) of the organization described in section 3121(w)(3). For 
purposes of applying paragraph (1)(B) to highly compensated benefits, 
all benefits of the employee otherwise taken into account (without 
regard to this paragraph) shall be taken into account.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2005.

SEC. 2. EQUALIZING TREATMENT OF RETIREMENT INCOME ACCOUNTS PROVIDED BY 
              CHURCHES WITH RESPECT TO ACQUISITION INDEBTEDNESS.

    (a) In General.--Section 514(c)(9)(C) of the Internal Revenue Code 
of 1986 (defining qualified organization) is amended by striking ``or'' 
at the end of clause (ii), by striking the period at the end of clause 
(iii) and inserting ``; or'' , and by adding at the end the following:
                            ``(iv) a retirement income account (as 
                        defined in section 403(b)(9)(B)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.
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