[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2512 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2512

 To amend the Internal Revenue Code of 1986 to provide a credit for re-
     enrollment provisions in retirement plans of small employers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 26, 2023

Mr. Cassidy (for himself and Mr. Kaine) 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 provide a credit for re-
     enrollment provisions in retirement plans of small employers.

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

SECTION 1. RETIREMENT PLAN RE-ENROLLMENT CREDIT FOR SMALL EMPLOYERS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45BB. CREDIT FOR RE-ENROLLMENT PROVISIONS IN PLANS PROVIDED BY 
              SMALL EMPLOYERS.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible employer, the retirement re-enrollment credit determined under 
this section for any taxable year is an amount equal to--
            ``(1) $500 for any taxable year occurring during the credit 
        period, and
            ``(2) zero for any other taxable year.
    ``(b) Credit Period.--For purposes of subsection (a)--
            ``(1) In general.--The credit period with respect to any 
        eligible employer is the 3-taxable-year period beginning with 
        the first taxable year for which the employer includes a re-
        enrollment provision in an eligible automatic contribution 
        arrangement under a qualified employer plan (as defined in 
        section 4972(d)) maintained by the employer.
            ``(2) Maintenance of arrangement.--No taxable year with 
        respect to an employer shall be treated as occurring within the 
        credit period unless the provision described in paragraph (1) 
        is included in the plan for such year.
    ``(c) Re-Enrollment Provision.--For purposes of this section--
            ``(1) In general.--The term `re-enrollment provision' means 
        a provision of an eligible automatic contribution arrangement 
        under which each employee eligible to participate in the 
        arrangement who is not contributing or is contributing less 
        than the percentage applicable to an eligible employee in the 
        first year of eligibility is treated as being in such first 
        year of eligibility in each applicable year with respect to the 
        employee.
            ``(2) Election out.--The election treated as having been 
        made under paragraph (1) shall cease to apply with respect to 
        any employee if such employee makes an affirmative election--
                    ``(A) not to have such contributions made, or
                    ``(B) to make elective contributions at a level 
                specified in such affirmative election.
            ``(3) Applicable year every third year.--
                    ``(A) In general.--The term `applicable year' 
                means, with respect to an employee, such employee's 
                first plan year of eligibility under the arrangement 
                and all subsequent plan years of eligibility.
                    ``(B) Exception.--Following any applicable year of 
                an employee (determined after the application of this 
                subparagraph), the plan may elect to treat the next 1 
                or 2 plan years as not being applicable years with 
                respect to such employee.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Eligible employer.--The term `eligible employer' has 
        the meaning given such term in section 408(p)(2)(C)(i).
            ``(2) Eligible automatic contribution arrangement.--The 
        term `eligible automatic contribution arrangement' has the 
        meaning given such term in section 414(w)(3).''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of the Internal Revenue Code of 1986 is amended by 
striking ``plus'' at the end of paragraph (40), by striking the period 
at the end of paragraph (41) and inserting ``, plus'', and by adding at 
the end the following new paragraph:
            ``(42) in the case of an eligible employer (as defined in 
        section 45BB(d)(1)), the retirement re-enrollment credit 
        determined under section 45BB(a).''.
    (c) Treatment of Credit for Certified Professional Employer 
Organizations.--Paragraph (2) of section 3511(d) of the Internal 
Revenue Code of 1986 is amended--
            (1) by redesignating subparagraphs (G), (H), and (I) as 
        subparagraphs (H), (I), and (J) respectively, and
            (2) by inserting after subparagraph (F) the following new 
        subparagraph:
                    ``(G) section 45BB (retirement re-enrollment 
                credit),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45AA 
the following new item:

``Sec. 45BB. Credit for re-enrollment provisions in plans provided by 
                            small employers.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.
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