[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3962 Enrolled Bill (ENR)]
H.R.3962
One Hundred Eleventh Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the fifth day of January, two thousand and ten
An Act
To provide a physician payment update, to provide pension funding
relief, 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. SHORT TITLE.
This Act may be cited as the ``Preservation of Access to Care for
Medicare Beneficiaries and Pension Relief Act of 2010''.
TITLE I--HEALTH PROVISIONS
SEC. 101. PHYSICIAN PAYMENT UPDATE.
(a) In General.--Section 1848(d) of the Social Security Act (42
U.S.C. 1395w-4(d)) is amended--
(1) in paragraph (10), in the heading, by striking ``portion''
and inserting ``January through may ''; and
(2) by adding at the end the following new paragraph:
``(11) Update for june through november of 2010.--
``(A) In general.--Subject to paragraphs (7)(B), (8)(B),
(9)(B), and (10)(B), in lieu of the update to the single
conversion factor established in paragraph (1)(C) that would
otherwise apply for 2010 for the period beginning on June 1,
2010, and ending on November 30, 2010, the update to the single
conversion factor shall be 2.2 percent.
``(B) No effect on computation of conversion factor for
remaining portion of 2010 and subsequent years.--The conversion
factor under this subsection shall be computed under paragraph
(1)(A) for the period beginning on December 1, 2010, and ending
on December 31, 2010, and for 2011 and subsequent years as if
subparagraph (A) had never applied.''.
(b) Statutory Paygo.--The budgetary effects of this Act, for the
purpose of complying with the Statutory Pay-As-You-Go Act of 2010,
shall be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act, jointly
submitted for printing in the Congressional Record by the Chairmen of
the House and Senate Budget Committees, provided that such statement
has been submitted prior to the vote on passage in the House acting
first on this conference report or amendment between the Houses.
SEC. 102. CLARIFICATION OF 3-DAY PAYMENT WINDOW.
(a) In General.--Section 1886 of the Social Security Act (42 U.S.C.
1395ww) is amended--
(1) by adding at the end of subsection (a)(4) the following new
sentence: ``In applying the first sentence of this paragraph, the
term `other services related to the admission' includes all
services that are not diagnostic services (other than ambulance and
maintenance renal dialysis services) for which payment may be made
under this title that are provided by a hospital (or an entity
wholly owned or operated by the hospital) to a patient--
``(A) on the date of the patient's inpatient admission; or
``(B) during the 3 days (or, in the case of a hospital that
is not a subsection (d) hospital, during the 1 day) immediately
preceding the date of such admission unless the hospital
demonstrates (in a form and manner, and at a time, specified by
the Secretary) that such services are not related (as
determined by the Secretary) to such admission.''; and
(2) in subsection (d)(7)--
(A) in subparagraph (A), by striking ``and'' at the end;
(B) in subparagraph (B), by striking the period and
inserting ``, and''; and
(C) by adding at the end the following new subparagraph:
``(C) the determination of whether services provided prior
to a patient's inpatient admission are related to the admission
(as described in subsection (a)(4)).''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to services furnished on or after the date of the enactment of
this Act.
(c) No Reopening of Previously Bundled Claims.--
(1) In general.--The Secretary of Health and Human Services may
not reopen a claim, adjust a claim, or make a payment pursuant to
any request for payment under title XVIII of the Social Security
Act, submitted by an entity (including a hospital or an entity
wholly owned or operated by the hospital) for services described in
paragraph (2) for purposes of treating, as unrelated to a patient's
inpatient admission, services provided during the 3 days (or, in
the case of a hospital that is not a subsection (d) hospital,
during the 1 day) immediately preceding the date of the patient's
inpatient admission.
(2) Services described.--For purposes of paragraph (1), the
services described in this paragraph are other services related to
the admission (as described in section 1886(a)(4) of the Social
Security Act (42 U.S.C. 1395ww(a)(4)), as amended by subsection
(a)) which were previously included on a claim or request for
payment submitted under part A of title XVIII of such Act for which
a reopening, adjustment, or request for payment under part B of
such title, was not submitted prior to the date of the enactment of
this Act.
(d) Implementation.--Notwithstanding any other provision of law,
the Secretary of Health and Human Services may implement the provisions
of this section (and amendments made by this section) by program
instruction or otherwise.
(e) Rule of Construction.--Nothing in the amendments made by this
section shall be construed as changing the policy described in section
1886(a)(4) of the Social Security Act (42 U.S.C. 1395ww(a)(4)), as
applied by the Secretary of Health and Human Services before the date
of the enactment of this Act, with respect to diagnostic services.
SEC. 103. ESTABLISH A CMS-IRS DATA MATCH TO IDENTIFY FRAUDULENT
PROVIDERS.
(a) Authority To Disclose Return Information Concerning Outstanding
Tax Debts for Purposes of Enhancing Medicare Program Integrity.--
(1) In general.--Section 6103(l) of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
paragraph:
``(22) Disclosure of return information to department of health
and human services for purposes of enhancing medicare program
integrity.--
``(A) In general.--The Secretary shall, upon written
request from the Secretary of Health and Human Services,
disclose to officers and employees of the Department of Health
and Human Services return information with respect to a
taxpayer who has applied to enroll, or reenroll, as a provider
of services or supplier under the Medicare program under title
XVIII of the Social Security Act. Such return information shall
be limited to--
``(i) the taxpayer identity information with respect to
such taxpayer;
``(ii) the amount of the delinquent tax debt owed by
that taxpayer; and
``(iii) the taxable year to which the delinquent tax
debt pertains.
``(B) Restriction on disclosure.--Return information
disclosed under subparagraph (A) may be used by officers and
employees of the Department of Health and Human Services for
the purposes of, and to the extent necessary in, establishing
the taxpayer's eligibility for enrollment or reenrollment in
the Medicare program, or in any administrative or judicial
proceeding relating to, or arising from, a denial of such
enrollment or reenrollment, or in determining the level of
enhanced oversight to be applied with respect to such taxpayer
pursuant to section 1866(j)(3) of the Social Security Act.
``(C) Delinquent tax debt.--For purposes of this paragraph,
the term `delinquent tax debt' means an outstanding debt under
this title for which a notice of lien has been filed pursuant
to section 6323, but the term does not include a debt that is
being paid in a timely manner pursuant to an agreement under
section 6159 or 7122, or a debt with respect to which a
collection due process hearing under section 6330 is requested,
pending, or completed and no payment is required.''.
(2) Conforming amendments.--Section 6103(p)(4) of such Code, as
amended by sections 1414 and 3308 of Public Law 111-148, in the
matter preceding subparagraph (A) and in subparagraph (F)(ii), is
amended by striking ``or (17)'' and inserting ``(17), or (22)''
each place it appears.
(b) Secretary's Authority To Use Information From the Department of
Treasury in Medicare Enrollments and Reenrollments.--Section 1866(j)(2)
of the Social Security Act (42 U.S.C. 1395cc(j)), as inserted by
section 6401(a) of Public Law 111-148, is further amended--
(1) by redesignating subparagraph (E) as subparagraph (F); and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Use of information from the department of treasury
concerning tax debts.--In reviewing the application of a
provider of services or supplier to enroll or reenroll under
the program under this title, the Secretary shall take into
account the information supplied by the Secretary of the
Treasury pursuant to section 6103(l)(22) of the Internal
Revenue Code of 1986, in determining whether to deny such
application or to apply enhanced oversight to such provider of
services or supplier pursuant to paragraph (3) if the Secretary
determines such provider of services or supplier owes such a
debt.''.
(c) Authority To Adjust Payments of Providers of Services and
Suppliers With the Same Tax Identification Number for Medicare
Obligations.--Section 1866(j)(6) of the Social Security Act (42 U.S.C.
1395cc(j)(6)), as inserted by section 6401(a) of Public Law 111-148 and
as redesignated by section 1304 of Public Law 111-152, is amended--
(1) in the paragraph heading, by striking ``past-due'' and
inserting ``medicare'';
(2) in subparagraph (A), by striking ``past-due obligations
described in subparagraph (B)(ii) of an'' and inserting ``amount
described in subparagraph (B)(ii) due from such''; and
(3) in subparagraph (B)(ii), by striking ``a past-due
obligation'' and inserting ``an amount that is more than the amount
required to be paid''.
TITLE II--PENSION FUNDING RELIEF
Subtitle A--Single Employer Plans
SEC. 201. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS
TO AMORTIZE CERTAIN SHORTFALL AMORTIZATION BASES.
(a) Amendments to ERISA.--
(1) In general.--Paragraph (2) of section 303(c) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(c))
is amended by adding at the end the following subparagraph:
``(D) Special election for eligible plan years.--
``(i) In general.--If a plan sponsor elects to apply
this subparagraph with respect to the shortfall
amortization base of a plan for any eligible plan year (in
this subparagraph and paragraph (7) referred to as an
`election year'), then, notwithstanding subparagraphs (A)
and (B)--
``(I) the shortfall amortization installments with
respect to such base shall be determined under clause
(ii) or (iii), whichever is specified in the election,
and
``(II) the shortfall amortization installment for
any plan year in the 9-plan-year period described in
clause (ii) or the 15-plan-year period described in
clause (iii), respectively, with respect to such
shortfall amortization base is the annual installment
determined under the applicable clause for that year
for that base.
``(ii) 2 plus 7 amortization schedule.--The shortfall
amortization installments determined under this clause
are--
``(I) in the case of the first 2 plan years in the
9-plan-year period beginning with the election year,
interest on the shortfall amortization base of the plan
for the election year (determined using the effective
interest rate for the plan for the election year), and
``(II) in the case of the last 7 plan years in such
9-plan-year period, the amounts necessary to amortize
the remaining balance of the shortfall amortization
base of the plan for the election year in level annual
installments over such last 7 plan years (using the
segment rates under subparagraph (C) for the election
year).
``(iii) 15-year amortization.--The shortfall
amortization installments determined under this
subparagraph are the amounts necessary to amortize the
shortfall amortization base of the plan for the election
year in level annual installments over the 15-plan-year
period beginning with the election year (using the segment
rates under subparagraph (C) for the election year).
``(iv) Election.--
``(I) In general.--The plan sponsor of a plan may
elect to have this subparagraph apply to not more than
2 eligible plan years with respect to the plan, except
that in the case of a plan described in section 106 of
the Pension Protection Act of 2006, the plan sponsor
may only elect to have this subparagraph apply to a
plan year beginning in 2011.
``(II) Amortization schedule.--Such election shall
specify whether the amortization schedule under clause
(ii) or (iii) shall apply to an election year, except
that if a plan sponsor elects to have this subparagraph
apply to 2 eligible plan years, the plan sponsor must
elect the same schedule for both years.
``(III) Other rules.--Such election shall be made
at such time, and in such form and manner, as shall be
prescribed by the Secretary of the Treasury, and may be
revoked only with the consent of the Secretary of the
Treasury. The Secretary of the Treasury shall, before
granting a revocation request, provide the Pension
Benefit Guaranty Corporation an opportunity to comment
on the conditions applicable to the treatment of any
portion of the election year shortfall amortization
base that remains unamortized as of the revocation
date.
``(v) Eligible plan year.--For purposes of this
subparagraph, the term `eligible plan year' means any plan
year beginning in 2008, 2009, 2010, or 2011, except that a
plan year shall only be treated as an eligible plan year if
the due date under subsection (j)(1) for the payment of the
minimum required contribution for such plan year occurs on
or after the date of the enactment of this subparagraph.
``(vi) Reporting.--A plan sponsor of a plan who makes
an election under clause (i) shall--
``(I) give notice of the election to participants
and beneficiaries of the plan, and
``(II) inform the Pension Benefit Guaranty
Corporation of such election in such form and manner as
the Director of the Pension Benefit Guaranty
Corporation may prescribe.
``(vii) Increases in required installments in certain
cases.--For increases in required contributions in cases of
excess compensation or extraordinary dividends or stock
redemptions, see paragraph (7).''.
(2) Increases in required installments in certain cases.--
Section 303(c) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1083(c)) is amended by adding at the end the
following paragraph:
``(7) Increases in alternate required installments in cases of
excess compensation or extraordinary dividends or stock
redemptions.--
``(A) In general.--If there is an installment acceleration
amount with respect to a plan for any plan year in the
restriction period with respect to an election year under
paragraph (2)(D), then the shortfall amortization installment
otherwise determined and payable under such paragraph for such
plan year shall, subject to the limitation under subparagraph
(B), be increased by such amount.
``(B) Total installments limited to shortfall base.--
Subject to rules prescribed by the Secretary of the Treasury,
if a shortfall amortization installment with respect to any
shortfall amortization base for an election year is required to
be increased for any plan year under subparagraph (A)--
``(i) such increase shall not result in the amount of
such installment exceeding the present value of such
installment and all succeeding installments with respect to
such base (determined without regard to such increase but
after application of clause (ii)), and
``(ii) subsequent shortfall amortization installments
with respect to such base shall, in reverse order of the
otherwise required installments, be reduced to the extent
necessary to limit the present value of such subsequent
shortfall amortization installments (after application of
this paragraph) to the present value of the remaining
unamortized shortfall amortization base.
``(C) Installment acceleration amount.--For purposes of
this paragraph--
``(i) In general.--The term `installment acceleration
amount' means, with respect to any plan year in a
restriction period with respect to an election year, the
sum of--
``(I) the aggregate amount of excess employee
compensation determined under subparagraph (D) with
respect to all employees for the plan year, plus
``(II) the aggregate amount of extraordinary
dividends and redemptions determined under subparagraph
(E) for the plan year.
``(ii) Annual limitation.--The installment acceleration
amount for any plan year shall not exceed the excess (if
any) of--
``(I) the sum of the shortfall amortization
installments for the plan year and all preceding plan
years in the amortization period elected under
paragraph (2)(D) with respect to the shortfall
amortization base with respect to an election year,
determined without regard to paragraph (2)(D) and this
paragraph, over
``(II) the sum of the shortfall amortization
installments for such plan year and all such preceding
plan years, determined after application of paragraph
(2)(D) (and in the case of any preceding plan year,
after application of this paragraph).
``(iii) Carryover of excess installment acceleration
amounts.--
``(I) In general.--If the installment acceleration
amount for any plan year (determined without regard to
clause (ii)) exceeds the limitation under clause (ii),
then, subject to subclause (II), such excess shall be
treated as an installment acceleration amount with
respect to the succeeding plan year.
``(II) Cap to apply.--If any amount treated as an
installment acceleration amount under subclause (I) or
this subclause with respect any succeeding plan year,
when added to other installment acceleration amounts
(determined without regard to clause (ii)) with respect
to the plan year, exceeds the limitation under clause
(ii), the portion of such amount representing such
excess shall be treated as an installment acceleration
amount with respect to the next succeeding plan year.
``(III) Limitation on years to which amounts
carried for.--No amount shall be carried under
subclause (I) or (II) to a plan year which begins after
the first plan year following the last plan year in the
restriction period (or after the second plan year
following such last plan year in the case of an
election year with respect to which 15-year
amortization was elected under paragraph (2)(D)).
``(IV) Ordering rules.--For purposes of applying
subclause (II), installment acceleration amounts for
the plan year (determined without regard to any
carryover under this clause) shall be applied first
against the limitation under clause (ii) and then
carryovers to such plan year shall be applied against
such limitation on a first-in, first-out basis.
``(D) Excess employee compensation.--For purposes of this
paragraph--
``(i) In general.--The term `excess employee
compensation' means, with respect to any employee for any
plan year, the excess (if any) of--
``(I) the aggregate amount includible in income
under chapter 1 of the Internal Revenue Code of 1986
for remuneration during the calendar year in which such
plan year begins for services performed by the employee
for the plan sponsor (whether or not performed during
such calendar year), over
``(II) $1,000,000.
``(ii) Amounts set aside for nonqualified deferred
compensation.--If during any calendar year assets are set
aside or reserved (directly or indirectly) in a trust (or
other arrangement as determined by the Secretary of the
Treasury), or transferred to such a trust or other
arrangement, by a plan sponsor for purposes of paying
deferred compensation of an employee under a nonqualified
deferred compensation plan (as defined in section 409A of
such Code) of the plan sponsor, then, for purposes of
clause (i), the amount of such assets shall be treated as
remuneration of the employee includible in income for the
calendar year unless such amount is otherwise includible in
income for such year. An amount to which the preceding
sentence applies shall not be taken into account under this
paragraph for any subsequent calendar year.
``(iii) Only remuneration for certain post-2009
services counted.--Remuneration shall be taken into account
under clause (i) only to the extent attributable to
services performed by the employee for the plan sponsor
after February 28, 2010.
``(iv) Exception for certain equity payments.--
``(I) In general.--There shall not be taken into
account under clause (i)(I) any amount includible in
income with respect to the granting after February 28,
2010, of service recipient stock (within the meaning of
section 409A of the Internal Revenue Code of 1986)
that, upon such grant, is subject to a substantial risk
of forfeiture (as defined under section 83(c)(1) of
such Code) for at least 5 years from the date of such
grant.
``(II) Secretarial authority.--The Secretary of the
Treasury may by regulation provide for the application
of this clause in the case of a person other than a
corporation.
``(v) Other exceptions.--The following amounts
includible in income shall not be taken into account under
clause (i)(I):
``(I) Commissions.--Any remuneration payable on a
commission basis solely on account of income directly
generated by the individual performance of the
individual to whom such remuneration is payable.
``(II) Certain payments under existing contracts.--
Any remuneration consisting of nonqualified deferred
compensation, restricted stock, stock options, or stock
appreciation rights payable or granted under a written
binding contract that was in effect on March 1, 2010,
and which was not modified in any material respect
before such remuneration is paid.
``(vi) Self-employed individual treated as employee.--
The term `employee' includes, with respect to a calendar
year, a self-employed individual who is treated as an
employee under section 401(c) of such Code for the taxable
year ending during such calendar year, and the term
`compensation' shall include earned income of such
individual with respect to such self-employment.
``(vii) Indexing of amount.--In the case of any
calendar year beginning after 2010, the dollar amount under
clause (i)(II) shall be increased by an amount equal to--
``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined
under section 1(f)(3) of such Code for the calendar
year, determined by substituting `calendar year 2009'
for `calendar year 1992' in subparagraph (B) thereof.
If the amount of any increase under clause (i) is not a
multiple of $1,000, such increase shall be rounded to the
next lowest multiple of $1,000.
``(E) Extraordinary dividends and redemptions.--
``(i) In general.--The amount determined under this
subparagraph for any plan year is the excess (if any) of
the sum of the dividends declared during the plan year by
the plan sponsor plus the aggregate amount paid for the
redemption of stock of the plan sponsor redeemed during the
plan year over the greater of--
``(I) the adjusted net income (within the meaning
of section 4043) of the plan sponsor for the preceding
plan year, determined without regard to any reduction
by reason of interest, taxes, depreciation, or
amortization, or
``(II) in the case of a plan sponsor that
determined and declared dividends in the same manner
for at least 5 consecutive years immediately preceding
such plan year, the aggregate amount of dividends
determined and declared for such plan year using such
manner.
``(ii) Only certain post-2009 dividends and redemptions
counted.--For purposes of clause (i), there shall only be
taken into account dividends declared, and redemptions
occurring, after February 28, 2010.
``(iii) Exception for intra-group dividends.--Dividends
paid by one member of a controlled group (as defined in
section 302(d)(3)) to another member of such group shall
not be taken into account under clause (i).
``(iv) Exception for certain redemptions.--Redemptions
that are made pursuant to a plan maintained with respect to
employees, or that are made on account of the death,
disability, or termination of employment of an employee or
shareholder, shall not be taken into account under clause
(i).
``(v) Exception for certain preferred stock.--
``(I) In general.--Dividends and redemptions with
respect to applicable preferred stock shall not be
taken into account under clause (i) to the extent that
dividends accrue with respect to such stock at a
specified rate in all events and without regard to the
plan sponsor's income, and interest accrues on any
unpaid dividends with respect to such stock.
``(II) Applicable preferred stock.--For purposes of
subclause (I), the term `applicable preferred stock'
means preferred stock which was issued before March 1,
2010 (or which was issued after such date and is held
by an employee benefit plan subject to the provisions
of this title).
``(F) Other definitions and rules.--For purposes of this
paragraph--
``(i) Plan sponsor.--The term ` plan sponsor' includes
any member of the plan sponsor's controlled group (as
defined in section 302(d)(3)).
``(ii) Restriction period.--The term `restriction
period' means, with respect to any election year--
``(I) except as provided in subclause (II), the 3-
year period beginning with the election year (or, if
later, the first plan year beginning after December 31,
2009), and
``(II) if the plan sponsor elects 15-year
amortization for the shortfall amortization base for
the election year, the 5-year period beginning with the
election year (or, if later, the first plan year
beginning after December 31, 2009).
``(iii) Elections for multiple plans.--If a plan
sponsor makes elections under paragraph (2)(D) with respect
to 2 or more plans, the Secretary of the Treasury shall
provide rules for the application of this paragraph to such
plans, including rules for the ratable allocation of any
installment acceleration amount among such plans on the
basis of each plan's relative reduction in the plan's
shortfall amortization installment for the first plan year
in the amortization period described in subparagraph (A)
(determined without regard to this paragraph).
``(iv) Mergers and acquisitions.--The Secretary of the
Treasury shall prescribe rules for the application of
paragraph (2)(D) and this paragraph in any case where there
is a merger or acquisition involving a plan sponsor making
the election under paragraph (2)(D).''.
(3) Conforming amendments.--Section 303 of such Act (29 U.S.C.
1083) is amended--
(A) in subsection (c)(1), by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under this
subsection'', and
(B) in subsection (j)(3), by adding at the end the
following:
``(F) Quarterly contributions not to include certain
increased contributions.--Subparagraph (D) shall be applied
without regard to any increase under subsection (c)(7).''.
(b) Amendments to Internal Revenue Code of 1986.--
(1) In general.--Paragraph (2) of section 430(c) is amended by
adding at the end the following subparagraph:
``(D) Special election for eligible plan years.--
``(i) In general.--If a plan sponsor elects to apply
this subparagraph with respect to the shortfall
amortization base of a plan for any eligible plan year (in
this subparagraph and paragraph (7) referred to as an
`election year'), then, notwithstanding subparagraphs (A)
and (B)--
``(I) the shortfall amortization installments with
respect to such base shall be determined under clause
(ii) or (iii), whichever is specified in the election,
and
``(II) the shortfall amortization installment for
any plan year in the 9-plan-year period described in
clause (ii) or the 15-plan-year period described in
clause (iii), respectively, with respect to such
shortfall amortization base is the annual installment
determined under the applicable clause for that year
for that base.
``(ii) 2 plus 7 amortization schedule.--The shortfall
amortization installments determined under this clause
are--
``(I) in the case of the first 2 plan years in the
9-plan-year period beginning with the election year,
interest on the shortfall amortization base of the plan
for the election year (determined using the effective
interest rate for the plan for the election year), and
``(II) in the case of the last 7 plan years in such
9-plan-year period, the amounts necessary to amortize
the remaining balance of the shortfall amortization
base of the plan for the election year in level annual
installments over such last 7 plan years (using the
segment rates under subparagraph (C) for the election
year).
``(iii) 15-year amortization.--The shortfall
amortization installments determined under this
subparagraph are the amounts necessary to amortize the
shortfall amortization base of the plan for the election
year in level annual installments over the 15-plan-year
period beginning with the election year (using the segment
rates under subparagraph (C) for the election year).
``(iv) Election.--
``(I) In general.--The plan sponsor of a plan may
elect to have this subparagraph apply to not more than
2 eligible plan years with respect to the plan, except
that in the case of a plan described in section 106 of
the Pension Protection Act of 2006, the plan sponsor
may only elect to have this subparagraph apply to a
plan year beginning in 2011.
``(II) Amortization schedule.--Such election shall
specify whether the amortization schedule under clause
(ii) or (iii) shall apply to an election year, except
that if a plan sponsor elects to have this subparagraph
apply to 2 eligible plan years, the plan sponsor must
elect the same schedule for both years.
``(III) Other rules.--Such election shall be made
at such time, and in such form and manner, as shall be
prescribed by the Secretary, and may be revoked only
with the consent of the Secretary. The Secretary shall,
before granting a revocation request, provide the
Pension Benefit Guaranty Corporation an opportunity to
comment on the conditions applicable to the treatment
of any portion of the election year shortfall
amortization base that remains unamortized as of the
revocation date.
``(v) Eligible plan year.--For purposes of this
subparagraph, the term `eligible plan year' means any plan
year beginning in 2008, 2009, 2010, or 2011, except that a
plan year shall only be treated as an eligible plan year if
the due date under subsection (j)(1) for the payment of the
minimum required contribution for such plan year occurs on
or after the date of the enactment of this subparagraph.
``(vi) Reporting.--A plan sponsor of a plan who makes
an election under clause (i) shall--
``(I) give notice of the election to participants
and beneficiaries of the plan, and
``(II) inform the Pension Benefit Guaranty
Corporation of such election in such form and manner as
the Director of the Pension Benefit Guaranty
Corporation may prescribe.
``(vii) Increases in required installments in certain
cases.--For increases in required contributions in cases of
excess compensation or extraordinary dividends or stock
redemptions, see paragraph (7).''.
(2) Increases in required contributions if excess compensation
paid.--Section 430(c) is amended by adding at the end the following
paragraph:
``(7) Increases in alternate required installments in cases of
excess compensation or extraordinary dividends or stock
redemptions.--
``(A) In general.--If there is an installment acceleration
amount with respect to a plan for any plan year in the
restriction period with respect to an election year under
paragraph (2)(D), then the shortfall amortization installment
otherwise determined and payable under such paragraph for such
plan year shall, subject to the limitation under subparagraph
(B), be increased by such amount.
``(B) Total installments limited to shortfall base.--
Subject to rules prescribed by the Secretary, if a shortfall
amortization installment with respect to any shortfall
amortization base for an election year is required to be
increased for any plan year under subparagraph (A)--
``(i) such increase shall not result in the amount of
such installment exceeding the present value of such
installment and all succeeding installments with respect to
such base (determined without regard to such increase but
after application of clause (ii)), and
``(ii) subsequent shortfall amortization installments
with respect to such base shall, in reverse order of the
otherwise required installments, be reduced to the extent
necessary to limit the present value of such subsequent
shortfall amortization installments (after application of
this paragraph) to the present value of the remaining
unamortized shortfall amortization base.
``(C) Installment acceleration amount.--For purposes of
this paragraph--
``(i) In general.--The term `installment acceleration
amount' means, with respect to any plan year in a
restriction period with respect to an election year, the
sum of--
``(I) the aggregate amount of excess employee
compensation determined under subparagraph (D) with
respect to all employees for the plan year, plus
``(II) the aggregate amount of extraordinary
dividends and redemptions determined under subparagraph
(E) for the plan year.
``(ii) Annual limitation.--The installment acceleration
amount for any plan year shall not exceed the excess (if
any) of--
``(I) the sum of the shortfall amortization
installments for the plan year and all preceding plan
years in the amortization period elected under
paragraph (2)(D) with respect to the shortfall
amortization base with respect to an election year,
determined without regard to paragraph (2)(D) and this
paragraph, over
``(II) the sum of the shortfall amortization
installments for such plan year and all such preceding
plan years, determined after application of paragraph
(2)(D) (and in the case of any preceding plan year,
after application of this paragraph).
``(iii) Carryover of excess installment acceleration
amounts.--
``(I) In general.--If the installment acceleration
amount for any plan year (determined without regard to
clause (ii)) exceeds the limitation under clause (ii),
then, subject to subclause (II), such excess shall be
treated as an installment acceleration amount with
respect to the succeeding plan year.
``(II) Cap to apply.--If any amount treated as an
installment acceleration amount under subclause (I) or
this subclause with respect any succeeding plan year,
when added to other installment acceleration amounts
(determined without regard to clause (ii)) with respect
to the plan year, exceeds the limitation under clause
(ii), the portion of such amount representing such
excess shall be treated as an installment acceleration
amount with respect to the next succeeding plan year.
``(III) Limitation on years to which amounts
carried for.--No amount shall be carried under
subclause (I) or (II) to a plan year which begins after
the first plan year following the last plan year in the
restriction period (or after the second plan year
following such last plan year in the case of an
election year with respect to which 15-year
amortization was elected under paragraph (2)(D)).
``(IV) Ordering rules.--For purposes of applying
subclause (II), installment acceleration amounts for
the plan year (determined without regard to any
carryover under this clause) shall be applied first
against the limitation under clause (ii) and then
carryovers to such plan year shall be applied against
such limitation on a first-in, first-out basis.
``(D) Excess employee compensation.--For purposes of this
paragraph--
``(i) In general.--The term `excess employee
compensation' means, with respect to any employee for any
plan year, the excess (if any) of--
``(I) the aggregate amount includible in income
under this chapter for remuneration during the calendar
year in which such plan year begins for services
performed by the employee for the plan sponsor (whether
or not performed during such calendar year), over
``(II) $1,000,000.
``(ii) Amounts set aside for nonqualified deferred
compensation.--If during any calendar year assets are set
aside or reserved (directly or indirectly) in a trust (or
other arrangement as determined by the Secretary), or
transferred to such a trust or other arrangement, by a plan
sponsor for purposes of paying deferred compensation of an
employee under a nonqualified deferred compensation plan
(as defined in section 409A) of the plan sponsor, then, for
purposes of clause (i), the amount of such assets shall be
treated as remuneration of the employee includible in
income for the calendar year unless such amount is
otherwise includible in income for such year. An amount to
which the preceding sentence applies shall not be taken
into account under this paragraph for any subsequent
calendar year.
``(iii) Only remuneration for certain post-2009
services counted.--Remuneration shall be taken into account
under clause (i) only to the extent attributable to
services performed by the employee for the plan sponsor
after February 28, 2010.
``(iv) Exception for certain equity payments.--
``(I) In general.--There shall not be taken into
account under clause (i)(I) any amount includible in
income with respect to the granting after February 28,
2010, of service recipient stock (within the meaning of
section 409A) that, upon such grant, is subject to a
substantial risk of forfeiture (as defined under
section 83(c)(1)) for at least 5 years from the date of
such grant.
``(II) Secretarial authority.--The Secretary may by
regulation provide for the application of this clause
in the case of a person other than a corporation.
``(v) Other exceptions.--The following amounts
includible in income shall not be taken into account under
clause (i)(I):
``(I) Commissions.--Any remuneration payable on a
commission basis solely on account of income directly
generated by the individual performance of the
individual to whom such remuneration is payable.
``(II) Certain payments under existing contracts.--
Any remuneration consisting of nonqualified deferred
compensation, restricted stock, stock options, or stock
appreciation rights payable or granted under a written
binding contract that was in effect on March 1, 2010,
and which was not modified in any material respect
before such remuneration is paid.
``(vi) Self-employed individual treated as employee.--
The term `employee' includes, with respect to a calendar
year, a self-employed individual who is treated as an
employee under section 401(c) for the taxable year ending
during such calendar year, and the term `compensation'
shall include earned income of such individual with respect
to such self-employment.
``(vii) Indexing of amount.--In the case of any
calendar year beginning after 2010, the dollar amount under
clause (i)(II) shall be increased by an amount equal to--
``(I) such dollar amount, multiplied by
``(II) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year, determined
by substituting `calendar year 2009' for `calendar year
1992' in subparagraph (B) thereof.
If the amount of any increase under clause (i) is not a
multiple of $1,000, such increase shall be rounded to the
next lowest multiple of $1,000.
``(E) Extraordinary dividends and redemptions.--
``(i) In general.--The amount determined under this
subparagraph for any plan year is the excess (if any) of
the sum of the dividends declared during the plan year by
the plan sponsor plus the aggregate amount paid for the
redemption of stock of the plan sponsor redeemed during the
plan year over the greater of--
``(I) the adjusted net income (within the meaning
of section 4043 of the Employee Retirement Income
Security Act of 1974) of the plan sponsor for the
preceding plan year, determined without regard to any
reduction by reason of interest, taxes, depreciation,
or amortization, or
``(II) in the case of a plan sponsor that
determined and declared dividends in the same manner
for at least 5 consecutive years immediately preceding
such plan year, the aggregate amount of dividends
determined and declared for such plan year using such
manner.
``(ii) Only certain post-2009 dividends and redemptions
counted.--For purposes of clause (i), there shall only be
taken into account dividends declared, and redemptions
occurring, after February 28, 2010.
``(iii) Exception for intra-group dividends.--Dividends
paid by one member of a controlled group (as defined in
section 412(d)(3)) to another member of such group shall
not be taken into account under clause (i).
``(iv) Exception for certain redemptions.--Redemptions
that are made pursuant to a plan maintained with respect to
employees, or that are made on account of the death,
disability, or termination of employment of an employee or
shareholder, shall not be taken into account under clause
(i).
``(v) Exception for certain preferred stock.--
``(I) In general.--Dividends and redemptions with
respect to applicable preferred stock shall not be
taken into account under clause (i) to the extent that
dividends accrue with respect to such stock at a
specified rate in all events and without regard to the
plan sponsor's income, and interest accrues on any
unpaid dividends with respect to such stock.
``(II) Applicable preferred stock.--For purposes of
subclause (I), the term `applicable preferred stock'
means preferred stock which was issued before March 1,
2010 (or which was issued after such date and is held
by an employee benefit plan subject to the provisions
of title I of Employee Retirement Income Security Act
of 1974).
``(F) Other definitions and rules.--For purposes of this
paragraph--
``(i) Plan sponsor.--The term ` plan sponsor' includes
any member of the plan sponsor's controlled group (as
defined in section 412(d)(3)).
``(ii) Restriction period.--The term `restriction
period' means, with respect to any election year--
``(I) except as provided in subclause (II), the 3-
year period beginning with the election year (or, if
later, the first plan year beginning after December 31,
2009), and
``(II) if the plan sponsor elects 15-year
amortization for the shortfall amortization base for
the election year, the 5-year period beginning with the
election year (or, if later, the first plan year
beginning after December 31, 2009).
``(iii) Elections for multiple plans.--If a plan
sponsor makes elections under paragraph (2)(D) with respect
to 2 or more plans, the Secretary shall provide rules for
the application of this paragraph to such plans, including
rules for the ratable allocation of any installment
acceleration amount among such plans on the basis of each
plan's relative reduction in the plan's shortfall
amortization installment for the first plan year in the
amortization period described in subparagraph (A)
(determined without regard to this paragraph).
``(iv) Mergers and acquisitions.--The Secretary shall
prescribe rules for the application of paragraph (2)(D) and
this paragraph in any case where there is a merger or
acquisition involving a plan sponsor making the election
under paragraph (2)(D).''.
(3) Conforming amendments.--Section 430 is amended--
(A) in subsection (c)(1), by striking ``the shortfall
amortization bases for such plan year and each of the 6
preceding plan years'' and inserting ``any shortfall
amortization base which has not been fully amortized under this
subsection'', and
(B) in subsection (j)(3), by adding at the end the
following:
``(F) Quarterly contributions not to include certain
increased contributions.--Subparagraph (D) shall be applied
without regard to any increase under subsection (c)(7).''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2007.
SEC. 202. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO PLANS
SUBJECT TO PRIOR LAW FUNDING RULES.
(a) In General.--Title I of the Pension Protection Act of 2006 is
amended by redesignating section 107 as section 108 and by inserting
the following after section 106:
``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO PLANS
WITH DELAYED EFFECTIVE DATE.
``(a) In General.--If the plan sponsor of a plan to which section
104, 105, or 106 of this Act applies elects to have this section apply
for any eligible plan year (in this section referred to as an `election
year'), section 302 of the Employee Retirement Income Security Act of
1974 and section 412 of the Internal Revenue Code of 1986 (as in effect
before the amendments made by this subtitle and subtitle B) shall apply
to such year in the manner described in subsection (b) or (c),
whichever is specified in the election. All references in this section
to `such Act' or `such Code' shall be to such Act or such Code as in
effect before the amendments made by this subtitle and subtitle B.
``(b) Application of 2 and 7 Rule.--In the case of an election year
to which this subsection applies--
``(1) 2-year lookback for determining deficit reduction
contributions for certain plans.--For purposes of applying section
302(d)(9) of such Act and section 412(l)(9) of such Code, the
funded current liability percentage (as defined in subparagraph (C)
thereof) for such plan for such plan year shall be such funded
current liability percentage of such plan for the second plan year
preceding the first election year of such plan.
``(2) Calculation of deficit reduction contribution.--For
purposes of applying section 302(d) of such Act and section 412(l)
of such Code to a plan to which such sections apply (after taking
into account paragraph (1))--
``(A) in the case of the increased unfunded new liability
of the plan, the applicable percentage described in section
302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code
shall be the third segment rate described in sections 104(b),
105(b), and 106(b) of this Act, and
``(B) in the case of the excess of the unfunded new
liability over the increased unfunded new liability, such
applicable percentage shall be determined without regard to
this section.
``(c) Application of 15-year Amortization.--In the case of an
election year to which this subsection applies, for purposes of
applying section 302(d) of such Act and section 412(l) of such Code--
``(1) in the case of the increased unfunded new liability of
the plan, the applicable percentage described in section
302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code for
any pre-effective date plan year beginning with or after the first
election year shall be the ratio of--
``(A) the annual installments payable in each year if the
increased unfunded new liability for such plan year were
amortized over 15 years, using an interest rate equal to the
third segment rate described in sections 104(b), 105(b), and
106(b) of this Act, to
``(B) the increased unfunded new liability for such plan
year, and
``(2) in the case of the excess of the unfunded new liability
over the increased unfunded new liability, such applicable
percentage shall be determined without regard to this section.
``(d) Election.--
``(1) In general.--The plan sponsor of a plan may elect to have
this section apply to not more than 2 eligible plan years with
respect to the plan, except that in the case of a plan to which
section 106 of this Act applies, the plan sponsor may only elect to
have this section apply to 1 eligible plan year.
``(2) Amortization schedule.--Such election shall specify
whether the rules under subsection (b) or (c) shall apply to an
election year, except that if a plan sponsor elects to have this
section apply to 2 eligible plan years, the plan sponsor must elect
the same rule for both years.
``(3) Other rules.--Such election shall be made at such time,
and in such form and manner, as shall be prescribed by the
Secretary of the Treasury, and may be revoked only with the consent
of the Secretary of the Treasury.
``(e) Definitions.--For purposes of this section--
``(1) Eligible plan year.--For purposes of this subparagraph,
the term `eligible plan year' means any plan year beginning in
2008, 2009, 2010, or 2011, except that a plan year beginning in
2008 shall only be treated as an eligible plan year if the due date
for the payment of the minimum required contribution for such plan
year occurs on or after the date of the enactment of this clause.
``(2) Pre-effective date plan year.--The term `pre-effective
date plan year' means, with respect to a plan, any plan year prior
to the first year in which the amendments made by this subtitle and
subtitle B apply to the plan.
``(3) Increased unfunded new liability.--The term `increased
unfunded new liability' means, with respect to a year, the excess
(if any) of the unfunded new liability over the amount of unfunded
new liability determined as if the value of the plan's assets
determined under subsection 302(c)(2) of such Act and section
412(c)(2) of such Code equaled the product of the current liability
of the plan for the year multiplied by the funded current liability
percentage (as defined in section 302(d)(8)(B) of such Act and
412(l)(8)(B) of such Code) of the plan for the second plan year
preceding the first election year of such plan.
``(4) Other definitions.--The terms `unfunded new liability'
and `current liability' shall have the meanings set forth in
section 302(d) of such Act and section 412(l) of such Code.''.
(b) Eligible Charity Plans.--Section 104 of the Pension Protection
Act of 2006 is amended--
(1) by striking ``eligible cooperative plan'' wherever it
appears in subsections (a) and (b) and inserting ``eligible
cooperative plan or an eligible charity plan'', and
(2) by adding at the end the following new subsection:
``(d) Eligible Charity Plan Defined.--For purposes of this section,
a plan shall be treated as an eligible charity plan for a plan year if
the plan is maintained by more than one employer (determined without
regard to section 414(c) of the Internal Revenue Code) and 100 percent
of the employers are described in section 501(c)(3) of such Code.''.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect as if included in the Pension Protection Act of 2006.
(2) Eligible charity plan.--The amendments made by subsection
(b) shall apply to plan years beginning after December 31, 2007,
except that a plan sponsor may elect to apply such amendments to
plan years beginning after December 31, 2008. Any such election
shall be made at such time, and in such form and manner, as shall
be prescribed by the Secretary of the Treasury, and may be revoked
only with the consent of the Secretary of the Treasury.
SEC. 203. LOOKBACK FOR CERTAIN BENEFIT RESTRICTIONS.
(a) In General.--
(1) Amendment to erisa.--Section 206(g)(9) of the Employee
Retirement Income Security Act of 1974 is amended by adding at the
end the following:
``(D) Special rule for certain years.--Solely for purposes
of any applicable provision--
``(i) In general.--For plan years beginning on or after
October 1, 2008, and before October 1, 2010, the adjusted
funding target attainment percentage of a plan shall be the
greater of--
``(I) such percentage, as determined without regard
to this subparagraph, or
``(II) the adjusted funding target attainment
percentage for such plan for the plan year beginning
after October 1, 2007, and before October 1, 2008, as
determined under rules prescribed by the Secretary of
the Treasury.
``(ii) Special rule.--In the case of a plan for which
the valuation date is not the first day of the plan year--
``(I) clause (i) shall apply to plan years
beginning after December 31, 2007, and before January
1, 2010, and
``(II) clause (i)(II) shall apply based on the last
plan year beginning before November 1, 2007, as
determined under rules prescribed by the Secretary of
the Treasury.
``(iii) Applicable provision.--For purposes of this
subparagraph, the term `applicable provision' means--
``(I) paragraph (3), but only for purposes of
applying such paragraph to a payment which, as
determined under rules prescribed by the Secretary of
the Treasury, is a payment under a social security
leveling option which accelerates payments under the
plan before, and reduces payments after, a participant
starts receiving social security benefits in order to
provide substantially similar aggregate payments both
before and after such benefits are received, and
``(II) paragraph (4).''.
(2) Amendment to internal revenue code of 1986.--Section 436(j)
of the Internal Revenue Code of 1986 is amended by adding at the
end the following:
``(3) Special rule for certain years.--Solely for purposes of
any applicable provision--
``(A) In general.--For plan years beginning on or after
October 1, 2008, and before October 1, 2010, the adjusted
funding target attainment percentage of a plan shall be the
greater of--
``(i) such percentage, as determined without regard to
this paragraph, or
``(ii) the adjusted funding target attainment
percentage for such plan for the plan year beginning after
October 1, 2007, and before October 1, 2008, as determined
under rules prescribed by the Secretary.
``(B) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year--
``(i) subparagraph (A) shall apply to plan years
beginning after December 31, 2007, and before January 1,
2010, and
``(ii) subparagraph (A)(ii) shall apply based on the
last plan year beginning before November 1, 2007, as
determined under rules prescribed by the Secretary.
``(C) Applicable provision.--For purposes of this
paragraph, the term `applicable provision' means--
``(i) subsection (d), but only for purposes of applying
such paragraph to a payment which, as determined under
rules prescribed by the Secretary, is a payment under a
social security leveling option which accelerates payments
under the plan before, and reduces payments after, a
participant starts receiving social security benefits in
order to provide substantially similar aggregate payments
both before and after such benefits are received, and
``(ii) subsection (e).''.
(b) Interaction With Wrera Rule.--Section 203 of the Worker,
Retiree, and Employer Recovery Act of 2008 shall apply to a plan for
any plan year in lieu of the amendments made by this section applying
to sections 206(g)(4) of the Employee Retirement Income Security Act of
1974 and 436(e) of the Internal Revenue Code of 1986 only to the extent
that such section produces a higher adjusted funding target attainment
percentage for such plan for such year.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years beginning
on or after October 1, 2008.
(2) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year, the
amendments made by this section shall apply to plan years beginning
after December 31, 2007.
SEC. 204. LOOKBACK FOR CREDIT BALANCE RULE FOR PLANS MAINTAINED BY
CHARITIES.
(a) Amendment to Erisa.--Paragraph (3) of section 303(f) of the
Employee Retirement Income Security Act of 1974 is amended by adding
the following at the end thereof:
``(D) Special rule for certain years of plans maintained by
charities.--
``(i) In general.--For purposes of applying
subparagraph (C) for plan years beginning after August 31,
2009, and before September 1, 2011, the ratio determined
under such subparagraph for the preceding plan year shall
be the greater of--
``(I) such ratio, as determined without regard to
this subparagraph, or
``(II) the ratio for such plan for the plan year
beginning after August 31, 2007, and before September
1, 2008, as determined under rules prescribed by the
Secretary of the Treasury.
``(ii) Special rule.--In the case of a plan for which
the valuation date is not the first day of the plan year--
``(I) clause (i) shall apply to plan years
beginning after December 31, 2008, and before January
1, 2011, and
``(II) clause (i)(II) shall apply based on the last
plan year beginning before September 1, 2007, as
determined under rules prescribed by the Secretary of
the Treasury.
``(iii) Limitation to charities.--This subparagraph
shall not apply to any plan unless such plan is maintained
exclusively by one or more organizations described in
section 501(c)(3) of the Internal Revenue Code of 1986.''.
(b) Amendment to Internal Revenue Code of 1986.--Paragraph (3) of
section 430(f) of the Internal Revenue Code of 1986 is amended by
adding the following at the end thereof:
``(D) Special rule for certain years of plans maintained by
charities.--
``(i) In general.--For purposes of applying
subparagraph (C) for plan years beginning after August 31,
2009, and before September 1, 2011, the ratio determined
under such subparagraph for the preceding plan year of a
plan shall be the greater of--
``(I) such ratio, as determined without regard to
this subsection, or
``(II) the ratio for such plan for the plan year
beginning after August 31, 2007 and before September 1,
2008, as determined under rules prescribed by the
Secretary.
``(ii) Special rule.--In the case of a plan for which
the valuation date is not the first day of the plan year--
``(I) clause (i) shall apply to plan years
beginning after December 31, 2007, and before January
1, 2010, and
``(II) clause (i)(II) shall apply based on the last
plan year beginning before September 1, 2007, as
determined under rules prescribed by the Secretary.
``(iii) Limitation to charities.--This subparagraph
shall not apply to any plan unless such plan is maintained
exclusively by one or more organizations described in
section 501(c)(3).''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years beginning
after August 31, 2009.
(2) Special rule.--In the case of a plan for which the
valuation date is not the first day of the plan year, the
amendments made by this section shall apply to plan years beginning
after December 31, 2008.
Subtitle B--Multiemployer Plans
SEC. 211. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.
(a) Adjustments.--
(1) Amendment to erisa.--Section 304(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is
amended by adding at the end the following new paragraph:
``(8) Special relief rules.--Notwithstanding any other
provision of this subsection--
``(A) Amortization of net investment losses.--
``(i) In general.--A multiemployer plan with respect to
which the solvency test under subparagraph (C) is met may
treat the portion of any experience loss or gain
attributable to net investment losses incurred in either or
both of the first two plan years ending after August 31,
2008, as an item separate from other experience losses, to
be amortized in equal annual installments (until fully
amortized) over the period --
``(I) beginning with the plan year in which such
portion is first recognized in the actuarial value of
assets, and
``(II) ending with the last plan year in the 30-
plan year period beginning with the plan year in which
such net investment loss was incurred.
``(ii) Coordination with extensions.--If this
subparagraph applies for any plan year--
``(I) no extension of the amortization period under
clause (i) shall be allowed under subsection (d), and
``(II) if an extension was granted under subsection
(d) for any plan year before the election to have this
subparagraph apply to the plan year, such extension
shall not result in such amortization period exceeding
30 years.
``(iii) Net investment losses.--For purposes of this
subparagraph--
``(I) In general.--Net investment losses shall be
determined in the manner prescribed by the Secretary of
the Treasury on the basis of the difference between
actual and expected returns (including any difference
attributable to any criminally fraudulent investment
arrangement).
``(II) Criminally fraudulent investment
arrangements.--The determination as to whether an
arrangement is a criminally fraudulent investment
arrangement shall be made under rules substantially
similar to the rules prescribed by the Secretary of the
Treasury for purposes of section 165 of the Internal
Revenue Code of 1986.
``(B) Expanded smoothing period.--
``(i) In general.--A multiemployer plan with respect to
which the solvency test under subparagraph (C) is met may
change its asset valuation method in a manner which--
``(I) spreads the difference between expected and
actual returns for either or both of the first 2 plan
years ending after August 31, 2008, over a period of
not more than 10 years,
``(II) provides that for either or both of the
first 2 plan years beginning after August 31, 2008, the
value of plan assets at any time shall not be less than
80 percent or greater than 130 percent of the fair
market value of such assets at such time, or
``(III) makes both changes described in subclauses
(I) and (II) to such method.
``(ii) Asset valuation methods.--If this subparagraph
applies for any plan year--
``(I) the Secretary of the Treasury shall not treat
the asset valuation method of the plan as unreasonable
solely because of the changes in such method described
in clause (i), and
``(II) such changes shall be deemed approved by
such Secretary under section 302(d)(1) and section
412(d)(1) of such Code.
``(iii) Amortization of reduction in unfunded accrued
liability.--If this subparagraph and subparagraph (A) both
apply for any plan year, the plan shall treat any reduction
in unfunded accrued liability resulting from the
application of this subparagraph as a separate experience
amortization base, to be amortized in equal annual
installments (until fully amortized) over a period of 30
plan years rather than the period such liability would
otherwise be amortized over.
``(C) Solvency test.--The solvency test under this
paragraph is met only if the plan actuary certifies that the
plan is projected to have sufficient assets to timely pay
expected benefits and anticipated expenditures over the
amortization period, taking into account the changes in the
funding standard account under this paragraph.
``(D) Restriction on benefit increases.--If subparagraph
(A) or (B) apply to a multiemployer plan for any plan year,
then, in addition to any other applicable restrictions on
benefit increases, a plan amendment increasing benefits may not
go into effect during either of the 2 plan years immediately
following such plan year unless--
``(i) the plan actuary certifies that--
``(I) any such increase is paid for out of
additional contributions not allocated to the plan
immediately before the application of this paragraph to
the plan, and
``(II) the plan's funded percentage and projected
credit balances for such 2 plan years are reasonably
expected to be at least as high as such percentage and
balances would have been if the benefit increase had
not been adopted, or
``(ii) the amendment is required as a condition of
qualification under part I of subchapter D of chapter 1 of
the Internal Revenue Code of 1986 or to comply with other
applicable law.
``(E) Reporting.--A plan sponsor of a plan to which this
paragraph applies shall--
``(i) give notice of such application to participants
and beneficiaries of the plan, and
``(ii) inform the Pension Benefit Guaranty Corporation
of such application in such form and manner as the Director
of the Pension Benefit Guaranty Corporation may
prescribe.''.
(2) Amendment to internal revenue code of 1986.--Section 431(b)
is amended by adding at the end the following new paragraph:
``(8) Special relief rules.--Notwithstanding any other
provision of this subsection--
``(A) Amortization of net investment losses.--
``(i) In general.--A multiemployer plan with respect to
which the solvency test under subparagraph (C) is met may
treat the portion of any experience loss or gain
attributable to net investment losses incurred in either or
both of the first two plan years ending after August 31,
2008, as an item separate from other experience losses, to
be amortized in equal annual installments (until fully
amortized) over the period --
``(I) beginning with the plan year in which such
portion is first recognized in the actuarial value of
assets, and
``(II) ending with the last plan year in the 30-
plan year period beginning with the plan year in which
such net investment loss was incurred.
``(ii) Coordination with extensions.--If this
subparagraph applies for any plan year--
``(I) no extension of the amortization period under
clause (i) shall be allowed under subsection (d), and
``(II) if an extension was granted under subsection
(d) for any plan year before the election to have this
subparagraph apply to the plan year, such extension
shall not result in such amortization period exceeding
30 years.
``(iii) Net investment losses.--For purposes of this
subparagraph--
``(I) In general.--Net investment losses shall be
determined in the manner prescribed by the Secretary on
the basis of the difference between actual and expected
returns (including any difference attributable to any
criminally fraudulent investment arrangement).
``(II) Criminally fraudulent investment
arrangements.--The determination as to whether an
arrangement is a criminally fraudulent investment
arrangement shall be made under rules substantially
similar to the rules prescribed by the Secretary for
purposes of section 165.
``(B) Expanded smoothing period.--
``(i) In general.--A multiemployer plan with respect to
which the solvency test under subparagraph (C) is met may
change its asset valuation method in a manner which--
``(I) spreads the difference between expected and
actual returns for either or both of the first 2 plan
years ending after August 31, 2008, over a period of
not more than 10 years,
``(II) provides that for either or both of the
first 2 plan years beginning after August 31, 2008, the
value of plan assets at any time shall not be less than
80 percent or greater than 130 percent of the fair
market value of such assets at such time, or
``(III) makes both changes described in subclauses
(I) and (II) to such method.
``(ii) Asset valuation methods.--If this subparagraph
applies for any plan year--
``(I) the Secretary shall not treat the asset
valuation method of the plan as unreasonable solely
because of the changes in such method described in
clause (i), and
``(II) such changes shall be deemed approved by the
Secretary under section 302(d)(1) of the Employee
Retirement Income Security Act of 1974 and section
412(d)(1).
``(iii) Amortization of reduction in unfunded accrued
liability.--If this subparagraph and subparagraph (A) both
apply for any plan year, the plan shall treat any reduction
in unfunded accrued liability resulting from the
application of this subparagraph as a separate experience
amortization base, to be amortized in equal annual
installments (until fully amortized) over a period of 30
plan years rather than the period such liability would
otherwise be amortized over.
``(C) Solvency test.--The solvency test under this
paragraph is met only if the plan actuary certifies that the
plan is projected to have sufficient assets to timely pay
expected benefits and anticipated expenditures over the
amortization period, taking into account the changes in the
funding standard account under this paragraph.
``(D) Restriction on benefit increases.--If subparagraph
(A) or (B) apply to a multiemployer plan for any plan year,
then, in addition to any other applicable restrictions on
benefit increases, a plan amendment increasing benefits may not
go into effect during either of the 2 plan years immediately
following such plan year unless--
``(i) the plan actuary certifies that--
``(I) any such increase is paid for out of
additional contributions not allocated to the plan
immediately before the application of this paragraph to
the plan, and
``(II) the plan's funded percentage and projected
credit balances for such 2 plan years are reasonably
expected to be at least as high as such percentage and
balances would have been if the benefit increase had
not been adopted, or
``(ii) the amendment is required as a condition of
qualification under part I of subchapter D or to comply
with other applicable law.
``(E) Reporting.--A plan sponsor of a plan to which this
paragraph applies shall--
``(i) give notice of such application to participants
and beneficiaries of the plan, and
``(ii) inform the Pension Benefit Guaranty Corporation
of such application in such form and manner as the Director
of the Pension Benefit Guaranty Corporation may
prescribe.''.
(b) Effective Dates.--
(1) In general.--The amendments made by this section shall take
effect as of the first day of the first plan year ending after
August 31, 2008, except that any election a plan makes pursuant to
this section that affects the plan's funding standard account for
the first plan year beginning after August 31, 2008, shall be
disregarded for purposes of applying the provisions of section 305
of the Employee Retirement Income Security Act of 1974 and section
432 of the Internal Revenue Code of 1986 to such plan year.
(2) Restrictions on benefit increases.--Notwithstanding
paragraph (1), the restrictions on plan amendments increasing
benefits in sections 304(b)(8)(D) of such Act and 431(b)(8)(D) of
such Code, as added by this section, shall take effect on the date
of enactment of this Act.
TITLE III--BUDGETARY PROVISIONS
SEC. 301. BUDGETARY PROVISIONS.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the Senate Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.