[Congressional Record Volume 146, Number 111 (Tuesday, September 19, 2000)]
[House]
[Pages H7780-H7798]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         DEBT RELIEF AND RETIREMENT SECURITY RECONCILIATION ACT

  Mr. SHAW. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 5203) to provide for reconciliation pursuant to sections 
103(a)(2), 103(b)(2), and 213(b)(2)(C) of the concurrent resolution on 
the budget for fiscal year 2001 to reduce the public debt and decrease 
the statutory limit on the public debt, and to amend the Internal 
Revenue Code of 1986 to provide for retirement security.
  The Clerk read as follows:

                               H.R. 5203

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

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Debt 
     Relief and Retirement Security Reconciliation Act''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title, etc.

                        DIVISION A--DEBT RELIEF

Sec. 100. Findings and purpose.

                    TITLE I--DEBT REDUCTION LOCK-BOX

Sec. 101. Establishment of Public Debt Reduction Payment Account.
Sec. 102. Reduction of statutory limit on the public debt.
Sec. 103. Off-budget status of Public Debt Reduction Payment Account.
Sec. 104. Removing Public Debt Reduction Payment Account from budget 
              pronouncements.
Sec. 105. Reports to Congress.

            TITLE II--SOCIAL SECURITY AND MEDICARE LOCK-BOX

Sec. 201. Protection of Social Security and Medicare surpluses.
Sec. 202. Removing Social Security from budget pronouncements.

                    DIVISION B--RETIREMENT SECURITY

                TITLE XI--INDIVIDUAL RETIREMENT ACCOUNTS

Sec. 1100. References.
Sec. 1101. Modification of IRA contribution limits.

                     TITLE XII--EXPANDING COVERAGE

Sec. 1201. Increase in benefit and contribution limits.
Sec. 1202. Plan loans for subchapter S owners, partners, and sole 
              proprietors.
Sec. 1203. Modification of top-heavy rules.
Sec. 1204. Elective deferrals not taken into account for purposes of 
              deduction limits.
Sec. 1205. Repeal of coordination requirements for deferred 
              compensation plans of State and local governments and 
              tax-exempt organizations.
Sec. 1206. Elimination of user fee for requests to irs regarding 
              pension plans.
Sec. 1207. Deduction limits.
Sec. 1208. Option to treat elective deferrals as after-tax 
              contributions.

                TITLE XIII--ENHANCING FAIRNESS FOR WOMEN

Sec. 1301. Catch-up contributions for individuals age 50 or over.
Sec. 1302. Equitable treatment for contributions of employees to 
              defined contribution plans.
Sec. 1303. Faster vesting of certain employer matching contributions.
Sec. 1304. Simplify and update the minimum distribution rules.
Sec. 1305. Clarification of tax treatment of division of section 457 
              plan benefits upon divorce.
Sec. 1306. Modification of safe harbor relief for hardship withdrawals 
              from cash or deferred arrangements.

           TITLE XIV--INCREASING PORTABILITY FOR PARTICIPANTS

Sec. 1401. Rollovers allowed among various types of plans.
Sec. 1402. Rollovers of IRAs into workplace retirement plans.
Sec. 1403. Rollovers of after-tax contributions.
Sec. 1404. Hardship exception to 60-day rule.
Sec. 1405. Treatment of forms of distribution.
Sec. 1406. Rationalization of restrictions on distributions.
Sec. 1407. Purchase of service credit in governmental defined benefit 
              plans.
Sec. 1408. Employers may disregard rollovers for purposes of cash-out 
              amounts.
Sec. 1409. Minimum distribution and inclusion requirements for section 
              457 plans.

        TITLE XV--STRENGTHENING PENSION SECURITY AND ENFORCEMENT

Sec. 1501. Repeal of 150 percent of current liability funding limit.
Sec. 1502. Maximum contribution deduction rules modified and applied to 
              all defined benefit plans.
Sec. 1503. Excise tax relief for sound pension funding.
Sec. 1504. Excise tax on failure to provide notice by defined benefit 
              plans significantly reducing future benefit accruals.
Sec. 1505. Treatment of multiemployer plans under section 415.
Sec. 1506. Prohibited allocations of stock in S corporation ESOP.

                 TITLE XVI--REDUCING REGULATORY BURDENS

Sec. 1601. Modification of timing of plan valuations.
Sec. 1602. ESOP dividends may be reinvested without loss of dividend 
              deduction.
Sec. 1603. Repeal of transition rule relating to certain highly 
              compensated employees.
Sec. 1604. Employees of tax-exempt entities.
Sec. 1605. Clarification of treatment of employer-provided retirement 
              advice.
Sec. 1606. Reporting simplification.
Sec. 1607. Improvement of employee plans compliance resolution system.
Sec. 1608. Repeal of the multiple use test.
Sec. 1609. Flexibility in nondiscrimination, coverage, and line of 
              business rules.
Sec. 1610. Extension to all governmental plans of moratorium on 
              application of certain nondiscrimination rules applicable 
              to State and local plans.
Sec. 1611. Notice and consent period regarding distributions.

                      TITLE XVII--PLAN AMENDMENTS

Sec. 1701. Provisions relating to plan amendments.

                        DIVISION A--DEBT RELIEF

     SEC. 100. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) fiscal discipline, resulting from the Balanced Budget 
     Act of 1997, and strong economic growth have ended decades of 
     deficit spending and have produced budget surpluses without 
     using the social security surplus;
       (2) fiscal pressures will mount in the future as the aging 
     of the population increases budget obligations;
       (3) until Congress and the President agree to legislation 
     that saves social security and medicare, the social security 
     and medicare surpluses should be used to reduce the debt held 
     by the public;
       (4) until Congress and the President agree on significant 
     tax reductions, amounts dedicated for that purpose shall be 
     used to reduce the debt held by the public;
       (5) strengthening the Government's fiscal position through 
     public debt reduction increases national savings, promotes 
     economic growth, reduces interest costs, and is a 
     constructive way to prepare for the Government's future 
     budget obligations; and
       (6) it is fiscally responsible and in the long-term 
     national economic interest to use a portion of the nonsocial 
     security and nonmedicare surpluses to reduce the debt held by 
     the public.
       (b) Purpose.--It is the purpose of this division to--
       (1) reduce the debt held by the public by $240,000,000,000 
     in fiscal year 2001 with the goal of eliminating this debt by 
     2012;
       (2) decrease the statutory limit on the public debt; and

[[Page H7781]]

       (3) ensure that the social security and hospital insurance 
     trust funds shall not be used for other purposes.

                    TITLE I--DEBT REDUCTION LOCK-BOX

     SEC. 101. ESTABLISHMENT OF PUBLIC DEBT REDUCTION PAYMENT 
                   ACCOUNT.

       (a) In General.--Subchapter I of chapter 31 of title 31, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 3114. Public debt reduction payment account

       ``(a) There is established in the Treasury of the United 
     States an account to be known as the Public Debt Reduction 
     Payment Account (hereinafter in this section referred to as 
     the `account').
       ``(b) The Secretary of the Treasury shall use amounts in 
     the account to pay at maturity, or to redeem or buy before 
     maturity, any obligation of the Government held by the public 
     and included in the public debt. Any obligation which is 
     paid, redeemed, or bought with amounts from the account shall 
     be canceled and retired and may not be reissued. Amounts 
     deposited in the account are appropriated and may only be 
     expended to carry out this section.
       ``(c) There is hereby appropriated into the account on 
     October 1, 2000, or the date of enactment of this section, 
     whichever is later, out of any money in the Treasury not 
     otherwise appropriated, $42,000,000,000 for the fiscal year 
     ending September 30, 2001. The funds appropriated to this 
     account shall remain available until expended.
       ``(d) The appropriation made under subsection (c) shall not 
     be considered direct spending for purposes of section 252 of 
     Balanced Budget and Emergency Deficit Control Act of 1985.
       ``(e) Establishment of and appropriations to the account 
     shall not affect trust fund transfers that may be authorized 
     under any other provision of law.
       ``(f) The Secretary of the Treasury and the Director of the 
     Office of Management and Budget shall each take such actions 
     as may be necessary to promptly carry out this section in 
     accordance with sound debt management policies.
       ``(g) Reducing the debt pursuant to this section shall not 
     interfere with the debt management policies or goals of the 
     Secretary of the Treasury.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     31 of title 31, United States Code, is amended by inserting 
     after the item relating to section 3113 the following:

``3114. Public debt reduction payment account.''.

     SEC. 102. REDUCTION OF STATUTORY LIMIT ON THE PUBLIC DEBT.

       Section 3101(b) of title 31, United States Code, is amended 
     by inserting ``minus the amount appropriated into the Public 
     Debt Reduction Payment Account pursuant to section 3114(c)'' 
     after ``$5,950,000,000,000''.

     SEC. 103. OFF-BUDGET STATUS OF PUBLIC DEBT REDUCTION PAYMENT 
                   ACCOUNT.

       Notwithstanding any other provision of law, the receipts 
     and disbursements of the Public Debt Reduction Payment 
     Account established by section 3114 of title 31, United 
     States Code, shall not be counted as new budget authority, 
     outlays, receipts, or deficit or surplus for purposes of--
       (1) the budget of the United States Government as submitted 
     by the President,
       (2) the congressional budget, or
       (3) the Balanced Budget and Emergency Deficit Control Act 
     of 1985.

     SEC. 104. REMOVING PUBLIC DEBT REDUCTION PAYMENT ACCOUNT FROM 
                   BUDGET PRONOUNCEMENTS.

       (a) In General.--Any official statement issued by the 
     Office of Management and Budget, the Congressional Budget 
     Office, or any other agency or instrumentality of the Federal 
     Government of surplus or deficit totals of the budget of the 
     United States Government as submitted by the President or of 
     the surplus or deficit totals of the congressional budget, 
     and any description of, or reference to, such totals in any 
     official publication or material issued by either of such 
     Offices or any other such agency or instrumentality, shall 
     exclude the outlays and receipts of the Public Debt Reduction 
     Payment Account established by section 3114 of title 31, 
     United States Code.
       (b) Separate Public Debt Reduction Payment Account Budget 
     Documents.--The excluded outlays and receipts of the Public 
     Debt Reduction Payment Account established by section 3114 of 
     title 31, United States Code, shall be submitted in separate 
     budget documents.

     SEC. 105. REPORTS TO CONGRESS.

       (a) Reports of the Secretary of the Treasury.--(1) Within 
     30 days after the appropriation is deposited into the Public 
     Debt Reduction Payment Account under section 3114 of title 
     31, United States Code, the Secretary of the Treasury shall 
     submit a report to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate confirming that such account has been established and 
     the amount and date of such deposit. Such report shall also 
     include a description of the Secretary's plan for using such 
     money to reduce debt held by the public.
       (2) Not later than October 31, 2002, the Secretary of the 
     Treasury shall submit a report to the Committee on Ways and 
     Means of the House of Representatives and the Committee on 
     Finance of the Senate setting forth the amount of money 
     deposited into the Public Debt Reduction Payment Account, the 
     amount of debt held by the public that was reduced, and a 
     description of the actual debt instruments that were redeemed 
     with such money.
       (b) Report of the Comptroller General of the United 
     States.--Not later than November 15, 2002, the Comptroller 
     General of the United States shall submit a report to the 
     Committee on Ways and Means of the House of Representatives 
     and the Committee on Finance of the Senate verifying all of 
     the information set forth in the reports submitted under 
     subsection (a).

            TITLE II--SOCIAL SECURITY AND MEDICARE LOCK-BOX

     SEC. 201. PROTECTION OF SOCIAL SECURITY AND MEDICARE 
                   SURPLUSES.

       (a) Protection of Social Security and Medicare Surpluses.--
     Section 201 of the concurrent resolution on the budget for 
     fiscal year 2001 (H. Con. Res. 290, 106th Congress) is 
     amended as follows:
       (1) In the section heading, by inserting ``AND MEDICARE'' 
     before ``SURPLUSES''.
       (2) By striking subsection (c) and inserting the following 
     new subsection:
       ``(c) Lock-box for Social Security and Hospital Insurance 
     Surpluses.--
       ``(1) Concurrent resolutions on the budget.--It shall not 
     be in order in the House of Representatives or the Senate to 
     consider any concurrent resolution on the budget, or 
     conference report thereon or amendment thereto, that would 
     set forth a surplus for any fiscal year that is less than the 
     surplus of the Federal Hospital Insurance Trust Fund for that 
     fiscal year.
       ``(2) Subsequent legislation.--(A) Except as provided by 
     subparagraph (B), it shall not be in order in the House of 
     Representatives or the Senate to consider any bill, joint 
     resolution, amendment, motion, or conference report if--
       ``(i) the enactment of that bill or resolution as reported;
       ``(ii) the adoption and enactment of that amendment; or
       ``(iii) the enactment of that bill or resolution in the 
     form recommended in that conference report,

     would cause the on-budget surplus for any fiscal year to be 
     less than the projected surplus of the Federal Hospital 
     Insurance Trust Fund (as assumed in the most recently agreed 
     to concurrent resolution on the budget) for that fiscal year 
     or increase the amount by which the on-budget surplus for any 
     fiscal year would be less than such trust fund surplus for 
     that fiscal year.
       ``(B) Subparagraph (A) shall not apply to social security 
     reform legislation or medicare reform legislation.''.
       (3) By redesignating subsections (e) and (f) as subsections 
     (g) and (h), respectively, and inserting after subsection (d) 
     the following new subsections:
       ``(e) Content of Concurrent Resolution on the Budget.--The 
     concurrent resolution on the budget for each fiscal year 
     shall set forth appropriate levels for the fiscal year 
     beginning on October 1 of such year and for at least each of 
     the 4 ensuing fiscal years of the surplus or deficit in the 
     Federal Hospital Insurance Trust Fund.
       ``(f) Definitions.--As used in this section:
       ``(1) The term `medicare reform legislation' means a bill 
     or a joint resolution to save Medicare that includes a 
     provision stating the following: `For purposes of section 
     201(c) of the concurrent resolution on the budget for fiscal 
     year 2001, this Act constitutes medicare reform 
     legislation.'.
       ``(2) The term `social security reform legislation' means a 
     bill or a joint resolution to save social security that 
     includes a provision stating the following: `For purposes of 
     section 201(c) of the concurrent resolution on the budget for 
     fiscal year 2001, this Act constitutes social security reform 
     legislation.'.''.
       (4) In the first sentence of subsection (h) (as 
     redesignated), by striking ``(1)''.
       (5) At the end, by adding the following new subsection:
       ``(i)  Effective Date.--This section shall cease to have 
     any force or effect upon the enactment of social security 
     reform legislation and medicare reform legislation.''.
       (b) Protection of Social Security and Medicare Surpluses.--
     (1) If the budget of the United States Government submitted 
     by the President under section 1105(a) of title 31, United 
     States Code, recommends an on-budget surplus for any fiscal 
     year that is less than the surplus of the Federal Hospital 
     Insurance Trust Fund for that fiscal year, then it shall 
     include proposed legislative language for social security 
     reform legislation or medicare reform legislation.
       (2) Paragraph (1) shall cease to have any force or effect 
     upon the enactment of social security reform legislation and 
     medicare reform legislation as defined by section 201(g) of 
     the concurrent resolution on the budget for fiscal year 2001 
     (H. Con. Res 290, 106th Congress).
       (c) Conforming Amendment.--The item relating to section 201 
     in the table of contents set forth in section 1(b) of the 
     concurrent resolution on the budget for fiscal year 2001 (H. 
     Con. Res 290, 106th Congress) is amended to read as follows:

``Sec. 201. Protection of social security and medicare surpluses.''.

     SEC. 202. REMOVING SOCIAL SECURITY FROM BUDGET 
                   PRONOUNCEMENTS.

       (a) In General.--Any official statement issued by the 
     Office of Management and Budget, the Congressional Budget 
     Office, or any other agency or instrumentality of the Federal 
     Government of surplus or deficit totals of the budget of the 
     United States Government as submitted by the President or of

[[Page H7782]]

     the surplus or deficit totals of the congressional budget, 
     and any description of, or reference to, such totals in any 
     official publication or material issued by either of such 
     Offices or any other such agency or instrumentality, shall 
     exclude the outlays and receipts of the old-age, survivors, 
     and disability insurance program under title II of the Social 
     Security Act (including the Federal Old-Age and Survivors 
     Insurance Trust Fund and the Federal Disability Insurance 
     Trust Fund) and the related provisions of the Internal 
     Revenue Code of 1986.
       (b) Separate Social Security Budget Documents.--The 
     excluded outlays and receipts of the old-age, survivors, and 
     disability insurance program under title II of the Social 
     Security Act shall be submitted in separate Social Security 
     budget documents.

                    DIVISION B--RETIREMENT SECURITY

                TITLE XI--INDIVIDUAL RETIREMENT ACCOUNTS

     SEC. 1100. REFERENCES.

       Except as otherwise expressly provided, whenever in this 
     division an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

     SEC. 1101. MODIFICATION OF IRA CONTRIBUTION LIMITS.

       (a) Increase in Contribution Limit.--
       (1) In general.--Paragraph (1)(A) of section 219(b) 
     (relating to maximum amount of deduction) is amended by 
     striking ``$2,000'' and inserting ``the deductible amount''.
       (2) Deductible amount.--Section 219(b) is amended by adding 
     at the end the following new paragraph:
       ``(5) Deductible amount.--For purposes of paragraph 
     (1)(A)--
       ``(A) In general.--The deductible amount shall be 
     determined in accordance with the following table:

    ``For taxable years                                  The deductible
      beginning in:                                        amount is:  
      2001..................................................$3,000 .

      2002..................................................$4,000 .

      2003 and thereafter...................................$5,000..

       ``(B) Catch-up contributions for individuals 50 or older.--
     In the case of an individual who has attained the age of 50 
     before the close of the taxable year, the deductible amount 
     for taxable years beginning in 2001 or 2002 shall be $5,000.
       ``(C) Cost-of-living adjustment.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2003, the $5,000 amount 
     under subparagraph (A) 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 in which the taxable 
     year begins, determined by substituting `calendar year 2002' 
     for `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $500, such amount shall 
     be rounded to the next lower multiple of $500.''.
       (b) Conforming Amendments.--
       (1) Section 408(a)(1) is amended by striking ``in excess of 
     $2,000 on behalf of any individual'' and inserting ``on 
     behalf of any individual in excess of the amount in effect 
     for such taxable year under section 219(b)(1)(A)''.
       (2) Section 408(b)(2)(B) is amended by striking ``$2,000'' 
     and inserting ``the dollar amount in effect under section 
     219(b)(1)(A)''.
       (3) Section 408(b) is amended by striking ``$2,000'' in the 
     matter following paragraph (4) and inserting ``the dollar 
     amount in effect under section 219(b)(1)(A)''.
       (4) Section 408( j) is amended by striking ``$2,000''.
       (5) Section 408(p)(8) is amended by striking ``$2,000'' and 
     inserting ``the dollar amount in effect under section 
     219(b)(1)(A)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

                     TITLE XII--EXPANDING COVERAGE

     SEC. 1201. INCREASE IN BENEFIT AND CONTRIBUTION LIMITS.

       (a) Defined Benefit Plans.--
       (1) Dollar limit.--
       (A) Subparagraph (A) of section 415(b)(1) (relating to 
     limitation for defined benefit plans) is amended by striking 
     ``$90,000'' and inserting ``$160,000''.
       (B) Subparagraphs (C) and (D) of section 415(b)(2) are each 
     amended by striking ``$90,000'' each place it appears in the 
     headings and the text and inserting ``$160,000''.
       (C) Paragraph (7) of section 415(b) (relating to benefits 
     under certain collectively bargained plans) is amended by 
     striking ``the greater of $68,212 or one-half the amount 
     otherwise applicable for such year under paragraph (1)(A) for 
     `$90,000' '' and inserting ``one-half the amount otherwise 
     applicable for such year under paragraph (1)(A) for 
     `$160,000' ''.
       (2) Limit reduced when benefit begins before age 62.--
     Subparagraph (C) of section 415(b)(2) is amended by striking 
     ``the social security retirement age'' each place it appears 
     in the heading and text and inserting ``age 62''.
       (3) Limit increased when benefit begins after age 65.--
     Subparagraph (D) of section 415(b)(2) is amended by striking 
     ``the social security retirement age'' each place it appears 
     in the heading and text and inserting ``age 65''.
       (4) Cost-of-living adjustments.--Subsection (d) of section 
     415 (related to cost-of-living adjustments) is amended--
       (A) by striking ``$90,000'' in paragraph (1)(A) and 
     inserting ``$160,000''; and
       (B) in paragraph (3)(A)--
       (i) by striking ``$90,000'' in the heading and inserting 
     ``$160,000''; and
       (ii) by striking ``October 1, 1986'' and inserting ``July 
     1, 2000''.
       (5) Conforming amendment.--Section 415(b)(2) is amended by 
     striking subparagraph (F).
       (b) Defined Contribution Plans.--
       (1) Dollar limit.--Subparagraph (A) of section 415(c)(1) 
     (relating to limitation for defined contribution plans) is 
     amended by striking ``$30,000'' and inserting ``$40,000''.
       (2) Cost-of-living adjustments.--Subsection (d) of section 
     415 (related to cost-of-living adjustments) is amended--
       (A) by striking ``$30,000'' in paragraph (1)(C) and 
     inserting ``$40,000''; and
       (B) in paragraph (3)(D)--
       (i) by striking ``$30,000'' in the heading and inserting 
     ``$40,000''; and
       (ii) by striking ``October 1, 1993'' and inserting ``July 
     1, 2000''.
       (c) Qualified Trusts.--
       (1) Compensation limit.--Sections 401(a)(17), 404(l), 
     408(k), and 505(b)(7) are each amended by striking 
     ``$150,000'' each place it appears and inserting 
     ``$200,000''.
       (2) Base period and rounding of cost-of-living 
     adjustment.--Subparagraph (B) of section 401(a)(17) is 
     amended--
       (A) by striking ``October 1, 1993'' and inserting ``July 1, 
     2000''; and
       (B) by striking ``$10,000'' both places it appears and 
     inserting ``$5,000''.
       (d) Elective Deferrals.--
       (1) In general.--Paragraph (1) of section 402(g) (relating 
     to limitation on exclusion for elective deferrals) is amended 
     to read as follows:
       ``(1) In general.--
       ``(A) Limitation.--Notwithstanding subsections (e)(3) and 
     (h)(1)(B), the elective deferrals of any individual for any 
     taxable year shall be included in such individual's gross 
     income to the extent the amount of such deferrals for the 
     taxable year exceeds the applicable dollar amount.
       ``(B) Applicable dollar amount.--For purposes of 
     subparagraph (A), the applicable dollar amount shall be the 
     amount determined in accordance with the following table:

    ``For taxable years                                  The applicable
      beginning in                                       dollar amount:
      calendar year:
      2001.....................................................$11,000 
      2002.....................................................$12,000 
      2003.....................................................$13,000 
      2004.....................................................$14,000 
      2005 or thereafter....................................$15,000.''.

       (2) Cost-of-living adjustment.--Paragraph (5) of section 
     402(g) is amended to read as follows:
       ``(5) Cost-of-living adjustment.--In the case of taxable 
     years beginning after December 31, 2005, the Secretary shall 
     adjust the $15,000 amount under paragraph (1)(B) at the same 
     time and in the same manner as under section 415(d), except 
     that the base period shall be the calendar quarter beginning 
     July 1, 2004, and any increase under this paragraph which is 
     not a multiple of $500 shall be rounded to the next lowest 
     multiple of $500.''.
       (3) Conforming amendments.--
       (A) Section 402(g) (relating to limitation on exclusion for 
     elective deferrals), as amended by paragraphs (1) and (2), is 
     further amended by striking paragraph (4) and redesignating 
     paragraphs (5), (6), (7), (8), and (9) as paragraphs (4), 
     (5), (6), (7), and (8), respectively.
       (B) Paragraph (2) of section 457(c) is amended by striking 
     ``402(g)(8)(A)(iii)'' and inserting ``402(g)(7)(A)(iii)''.
       (C) Clause (iii) of section 501(c)(18)(D) is amended by 
     striking ``(other than paragraph (4) thereof)''.
       (e) Deferred Compensation Plans of State and Local 
     Governments and Tax-Exempt Organizations.--
       (1) In general.--Section 457 (relating to deferred 
     compensation plans of State and local governments and tax-
     exempt organizations) is amended--
       (A) in subsections (b)(2)(A) and (c)(1) by striking 
     ``$7,500'' each place it appears and inserting ``the 
     applicable dollar amount''; and
       (B) in subsection (b)(3)(A) by striking ``$15,000'' and 
     inserting ``twice the dollar amount in effect under 
     subsection (b)(2)(A)''.
       (2) Applicable dollar amount; cost-of-living adjustment.--
     Paragraph (15) of section 457(e) is amended to read as 
     follows:
       ``(15) Applicable dollar amount.--
       ``(A) In general.--The applicable dollar amount shall be 
     the amount determined in accordance with the following table:

    ``For taxable years                                  The applicable
      beginning in                                       dollar amount:
      calendar year:
      2001.....................................................$11,000 
      2002.....................................................$12,000 
      2003.....................................................$13,000 
      2004.....................................................$14,000 
      2005 or thereafter.......................................$15,000.

       ``(B) Cost-of-living adjustments.--In the case of taxable 
     years beginning after December 31, 2005, the Secretary shall 
     adjust the $15,000 amount specified in the table in 
     subparagraph (A) at the same time and in the same manner as 
     under section 415(d), except that the base period shall be 
     the calendar quarter beginning July 1, 2004, and any increase 
     under this paragraph which is not a

[[Page H7783]]

     multiple of $500 shall be rounded to the next lowest multiple 
     of $500.''.
       (f) Simple Retirement Accounts.--
       (1) Limitation.--Clause (ii) of section 408(p)(2)(A) 
     (relating to general rule for qualified salary reduction 
     arrangement) is amended by striking ``$6,000'' and inserting 
     ``the applicable dollar amount''.
       (2) Applicable dollar amount.--Subparagraph (E) of 
     408(p)(2) is amended to read as follows:
       ``(E) Applicable dollar amount; cost-of-living 
     adjustment.--
       ``(i) In general.--For purposes of subparagraph (A)(ii), 
     the applicable dollar amount shall be the amount determined 
     in accordance with the following table:

    ``For taxable years                                  The applicable
      beginning in                                       dollar amount:
      calendar year:
        2001....................................................$7,000 
        2002....................................................$8,000 
        2003....................................................$9,000 
        2004 or thereafter.....................................$10,000.

       ``(ii) Cost-of-living adjustment.--In the case of a year 
     beginning after December 31, 2004, the Secretary shall adjust 
     the $10,000 amount under clause (i) at the same time and in 
     the same manner as under section 415(d), except that the base 
     period taken into account shall be the calendar quarter 
     beginning July 1, 2003, and any increase under this 
     subparagraph which is not a multiple of $500 shall be rounded 
     to the next lower multiple of $500.''.
       (3) Conforming amendments.--
       (A) Clause (I) of section 401(k)(11)(B)(i) is amended by 
     striking ``$6,000'' and inserting ``the amount in effect 
     under section 408(p)(2)(A)(ii)''.
       (B) Section 401(k)(11) is amended by striking subparagraph 
     (E).
       (g) Rounding Rule Relating to Defined Benefit Plans and 
     Defined Contribution Plans.--Paragraph (4) of section 415(d) 
     is amended to read as follows:
       ``(4) Rounding.--
       ``(A) $160,000 amount.--Any increase under subparagraph (A) 
     of paragraph (1) which is not a multiple of $5,000 shall be 
     rounded to the next lowest multiple of $5,000.
       ``(B) $40,000 amount.--Any increase under subparagraph (C) 
     of paragraph (1) which is not a multiple of $1,000 shall be 
     rounded to the next lowest multiple of $1,000.''.
       (h) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1202. PLAN LOANS FOR SUBCHAPTER S OWNERS, PARTNERS, AND 
                   SOLE PROPRIETORS.

       (a) In General.--Subparagraph (B) of section 4975(f)(6) 
     (relating to exemptions not to apply to certain transactions) 
     is amended by adding at the end the following new clause:
       ``(iii) Loan exception.--For purposes of subparagraph 
     (A)(i), the term `owner-employee' shall only include a person 
     described in subclause (II) or (III) of clause (i).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to loans made after December 31, 2000.

     SEC. 1203. MODIFICATION OF TOP-HEAVY RULES.

       (a) Simplification of Definition of Key Employee.--
       (1) In general.--Section 416(i)(1)(A) (defining key 
     employee) is amended--
       (A) by striking ``or any of the 4 preceding plan years'' in 
     the matter preceding clause (i);
       (B) by striking clause (i) and inserting the following:
       ``(i) an officer of the employer having an annual 
     compensation greater than $150,000,'';
       (C) by striking clause (ii) and redesignating clauses (iii) 
     and (iv) as clauses (ii) and (iii), respectively; and
       (D) by striking the second sentence in the matter following 
     clause (iii), as redesignated by subparagraph (C).
       (2) Conforming amendment.--Section 416(i)(1)(B)(iii) is 
     amended by striking ``and subparagraph (A)(ii)''.
       (b) Matching Contributions Taken Into Account for Minimum 
     Contribution Requirements.--Section 416(c)(2)(A) (relating to 
     defined contribution plans) is amended by adding at the end 
     the following: ``Employer matching contributions (as defined 
     in section 401(m)(4)(A)) shall be taken into account for 
     purposes of this subparagraph.''.
       (c) Distributions During Last Year Before Determination 
     Date Taken Into Account.--
       (1) In general.--Paragraph (3) of section 416(g) is amended 
     to read as follows:
       ``(3) Distributions during last year before determination 
     date taken into account.--
       ``(A) In general.--For purposes of determining--
       ``(i) the present value of the cumulative accrued benefit 
     for any employee, or
       ``(ii) the amount of the account of any employee,

     such present value or amount shall be increased by the 
     aggregate distributions made with respect to such employee 
     under the plan during the 1-year period ending on the 
     determination date. The preceding sentence shall also apply 
     to distributions under a terminated plan which if it had not 
     been terminated would have been required to be included in an 
     aggregation group.
       ``(B) 5-year period in case of in-service distribution.--In 
     the case of any distribution made for a reason other than 
     separation from service, death, or disability, subparagraph 
     (A) shall be applied by substituting `5-year period' for `1-
     year period'.''.
       (2) Benefits not taken into account.--Subparagraph (E) of 
     section 416(g)(4) is amended--
       (A) by striking ``last 5 years'' in the heading and 
     inserting ``last year before determination date''; and
       (B) by striking ``5-year period'' and inserting ``1-year 
     period''.
       (d) Definition of Top-Heavy Plans.--Paragraph (4) of 
     section 416(g) (relating to other special rules for top-heavy 
     plans) is amended by adding at the end the following new 
     subparagraph:
       ``(H) Cash or deferred arrangements using alternative 
     methods of meeting nondiscrimination requirements.--The term 
     `top-heavy plan' shall not include a plan which consists 
     solely of--
       ``(i) a cash or deferred arrangement which meets the 
     requirements of section 401(k)(12), and
       ``(ii) matching contributions with respect to which the 
     requirements of section 401(m)(11) are met.

     If, but for this subparagraph, a plan would be treated as a 
     top-heavy plan because it is a member of an aggregation group 
     which is a top-heavy group, contributions under the plan may 
     be taken into account in determining whether any other plan 
     in the group meets the requirements of subsection (c)(2).''.
       (e) Frozen Plan Exempt From Minimum Benefit Requirement.--
     Subparagraph (C) of section 416(c)(1) (relating to defined 
     benefit plans) is amended--
       (A) by striking ``clause (ii)'' in clause (i) and inserting 
     ``clause (ii) or (iii)''; and
       (B) by adding at the end the following:
       ``(iii) Exception for frozen plan.--For purposes of 
     determining an employee's years of service with the employer, 
     any service with the employer shall be disregarded to the 
     extent that such service occurs during a plan year when the 
     plan benefits (within the meaning of section 410(b)) no 
     employee or former employee.''.
       (f) Elimination of Family Attribution.--Section 
     416(i)(1)(B) (defining 5-percent owner) is amended by adding 
     at the end the following new clause:
       ``(iv) Family attribution disregarded.--Solely for purposes 
     of applying this paragraph (and not for purposes of any 
     provision of this title which incorporates by reference the 
     definition of a key employee or 5-percent owner under this 
     paragraph), section 318 shall be applied without regard to 
     subsection (a)(1) thereof in determining whether any person 
     is a 5-percent owner.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1204. ELECTIVE DEFERRALS NOT TAKEN INTO ACCOUNT FOR 
                   PURPOSES OF DEDUCTION LIMITS.

       (a) In General.--Section 404 (relating to deduction for 
     contributions of an employer to an employees' trust or 
     annuity plan and compensation under a deferred payment plan) 
     is amended by adding at the end the following new subsection:
       ``(n) Elective Deferrals Not Taken Into Account for 
     Purposes of Deduction Limits.--Elective deferrals (as defined 
     in section 402(g)(3)) shall not be subject to any limitation 
     contained in paragraph (3), (7), or (9) of subsection (a), 
     and such elective deferrals shall not be taken into account 
     in applying any such limitation to any other 
     contributions.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1205. REPEAL OF COORDINATION REQUIREMENTS FOR DEFERRED 
                   COMPENSATION PLANS OF STATE AND LOCAL 
                   GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS.

       (a) In General.--Subsection (c) of section 457 (relating to 
     deferred compensation plans of State and local governments 
     and tax-exempt organizations), as amended by section 1201, is 
     amended to read as follows:
       ``(c) Limitation.--The maximum amount of the compensation 
     of any one individual which may be deferred under subsection 
     (a) during any taxable year shall not exceed the amount in 
     effect under subsection (b)(2)(A) (as modified by any 
     adjustment provided under subsection (b)(3)).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to years beginning after December 31, 2000.

     SEC. 1206. ELIMINATION OF USER FEE FOR REQUESTS TO IRS 
                   REGARDING PENSION PLANS.

       (a) Elimination of Certain User Fees.--The Secretary of the 
     Treasury or the Secretary's delegate shall not require 
     payment of user fees under the program established under 
     section 7527 of the Internal Revenue Code of 1986 for 
     requests to the Internal Revenue Service for determination 
     letters with respect to the qualified status of a pension 
     benefit plan maintained solely by one or more eligible 
     employers or any trust which is part of the plan. The 
     preceding sentence shall not apply to any request--
       (1) made after the fifth plan year the pension benefit plan 
     is in existence; or
       (2) made by the sponsor of any prototype or similar plan 
     which the sponsor intends to market to participating 
     employers.
       (b) Pension Benefit Plan.--For purposes of this section, 
     the term ``pension benefit plan'' means a pension, profit-
     sharing, stock bonus, annuity, or employee stock ownership 
     plan.
       (c) Eligible Employer.--For purposes of this section, the 
     term ``eligible employer'' has the same meaning given such 
     term in

[[Page H7784]]

     section 408(p)(2)(C)(i)(I) of the Internal Revenue Code of 
     1986. The determination of whether an employer is an eligible 
     employer under this section shall be made as of the date of 
     the request described in subsection (a).
       (d) Effective Date.--The provisions of this section shall 
     apply with respect to requests made after December 31, 2000.

     SEC. 1207. DEDUCTION LIMITS.

       (a) In General.--
       (1) Stock bonus and profit sharing trusts.--Subclause (I) 
     of section 404(a)(3)(A)(i) (relating to stock bonus and 
     profit sharing trusts) is amended by striking ``15 percent'' 
     and inserting ``20 percent''.
       (2) Compensation.--Section 404(a) (relating to general 
     rule) is amended by adding at the end the following:
       ``(12) Definition of compensation.--For purposes of 
     paragraphs (3), (7), (8), and (9), the term `compensation 
     otherwise paid or accrued during the taxable year' shall 
     include amounts treated as `participant's compensation' under 
     subparagraph (C) or (D) of section 415(c)(3).''.
       (b) Conforming Amendments.--
       (1) Subparagraph (B) of section 404(a)(3) is amended by 
     striking the last sentence thereof.
       (2) Subparagraph (C) of section 404(h)(1) is amended by 
     striking ``15 percent'' each place it appears and inserting 
     ``20 percent''.
       (3) Clause (i) of section 4972(c)(6)(B) is amended by 
     striking ``(within the meaning of section 404(a))'' and 
     inserting ``(within the meaning of section 404(a) and as 
     adjusted under section 404(a)(12))''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1208. OPTION TO TREAT ELECTIVE DEFERRALS AS AFTER-TAX 
                   CONTRIBUTIONS.

       (a) In General.--Subpart A of part I of subchapter D of 
     chapter 1 (relating to deferred compensation, etc.) is 
     amended by inserting after section 402 the following new 
     section:

     ``SEC. 402A. OPTIONAL TREATMENT OF ELECTIVE DEFERRALS AS PLUS 
                   CONTRIBUTIONS.

       ``(a) General Rule.--If an applicable retirement plan 
     includes a qualified plus contribution program--
       ``(1) any designated plus contribution made by an employee 
     pursuant to the program shall be treated as an elective 
     deferral for purposes of this chapter, except that such 
     contribution shall not be excludable from gross income, and
       ``(2) such plan (and any arrangement which is part of such 
     plan) shall not be treated as failing to meet any requirement 
     of this chapter solely by reason of including such program.
       ``(b) Qualified Plus Contribution Program.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified plus contribution 
     program' means a program under which an employee may elect to 
     make designated plus contributions in lieu of all or a 
     portion of elective deferrals the employee is otherwise 
     eligible to make under the applicable retirement plan.
       ``(2) Separate accounting required.--A program shall not be 
     treated as a qualified plus contribution program unless the 
     applicable retirement plan--
       ``(A) establishes separate accounts (`designated plus 
     accounts') for the designated plus contributions of each 
     employee and any earnings properly allocable to the 
     contributions, and
       ``(B) maintains separate recordkeeping with respect to each 
     account.
       ``(c) Definitions and Rules Relating to Designated Plus 
     Contributions.--For purposes of this section--
       ``(1) Designated plus contribution.--The term `designated 
     plus contribution' means any elective deferral which--
       ``(A) is excludable from gross income of an employee 
     without regard to this section, and
       ``(B) the employee designates (at such time and in such 
     manner as the Secretary may prescribe) as not being so 
     excludable.
       ``(2) Designation limits.--The amount of elective deferrals 
     which an employee may designate under paragraph (1) shall not 
     exceed the excess (if any) of--
       ``(A) the maximum amount of elective deferrals excludable 
     from gross income of the employee for the taxable year 
     (without regard to this section), over
       ``(B) the aggregate amount of elective deferrals of the 
     employee for the taxable year which the employee does not 
     designate under paragraph (1).
       ``(3) Rollover contributions.--
       ``(A) In general.--A rollover contribution of any payment 
     or distribution from a designated plus account which is 
     otherwise allowable under this chapter may be made only if 
     the contribution is to--
       ``(i) another designated plus account of the individual 
     from whose account the payment or distribution was made, or
       ``(ii) a Roth IRA of such individual.
       ``(B) Coordination with limit.--Any rollover contribution 
     to a designated plus account under subparagraph (A) shall not 
     be taken into account for purposes of paragraph (1).
       ``(d) Distribution Rules.--For purposes of this title--
       ``(1) Exclusion.--Any qualified distribution from a 
     designated plus account shall not be includible in gross 
     income.
       ``(2) Qualified distribution.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified distribution' has 
     the meaning given such term by section 408A(d)(2)(A) (without 
     regard to clause (iv) thereof).
       ``(B) Distributions within nonexclusion period.--A payment 
     or distribution from a designated plus account shall not be 
     treated as a qualified distribution if such payment or 
     distribution is made within the 5-taxable-year period 
     beginning with the earlier of--
       ``(i) the first taxable year for which the individual made 
     a designated plus contribution to any designated plus account 
     established for such individual under the same applicable 
     retirement plan, or
       ``(ii) if a rollover contribution was made to such 
     designated plus account from a designated plus account 
     previously established for such individual under another 
     applicable retirement plan, the first taxable year for which 
     the individual made a designated plus contribution to such 
     previously established account.
       ``(C) Distributions of excess deferrals and earnings.--The 
     term `qualified distribution' shall not include any 
     distribution of any excess deferral under section 402(g)(2) 
     and any income on the excess deferral.
       ``(3) Aggregation rules.--Section 72 shall be applied 
     separately with respect to distributions and payments from a 
     designated plus account and other distributions and payments 
     from the plan.
       ``(e) Other Definitions.--For purposes of this section--
       ``(1) Applicable retirement plan.--The term `applicable 
     retirement plan' means--
       ``(A) an employees' trust described in section 401(a) which 
     is exempt from tax under section 501(a), and
       ``(B) a plan under which amounts are contributed by an 
     individual's employer for an annuity contract described in 
     section 403(b).
       ``(2) Elective deferral.--The term `elective deferral' 
     means any elective deferral described in subparagraph (A) or 
     (C) of section 402(g)(3).''.
       (b) Excess Deferrals.--Section 402(g) (relating to 
     limitation on exclusion for elective deferrals) is amended--
       (1) by adding at the end of paragraph (1) the following new 
     sentence: ``The preceding sentence shall not apply to so much 
     of such excess as does not exceed the designated plus 
     contributions of the individual for the taxable year.''; and
       (2) by inserting ``(or would be included but for the last 
     sentence thereof)'' after ``paragraph (1)'' in paragraph 
     (2)(A).
       (c) Rollovers.--Subparagraph (B) of section 402(c)(8) is 
     amended by adding at the end the following:
     ``If any portion of an eligible rollover distribution is 
     attributable to payments or distributions from a designated 
     plus account (as defined in section 402A), an eligible 
     retirement plan with respect to such portion shall include 
     only another designated plus account and a Roth IRA.''.
       (d) Reporting Requirements.--
       (1) W-2 information.--Section 6051(a)(8) is amended by 
     inserting ``, including the amount of designated plus 
     contributions (as defined in section 402A)'' before the comma 
     at the end.
       (2) Information.--Section 6047 is amended by redesignating 
     subsection (f) as subsection (g) and by inserting after 
     subsection (e) the following new subsection:
       ``(f) Designated Plus Contributions.--The Secretary shall 
     require the plan administrator of each applicable retirement 
     plan (as defined in section 402A) to make such returns and 
     reports regarding designated plus contributions (as so 
     defined) to the Secretary, participants and beneficiaries of 
     the plan, and such other persons as the Secretary may 
     prescribe.''.
       (e) Conforming Amendments.--
       (1) Section 408A(e) is amended by adding after the first 
     sentence the following new sentence: ``Such term includes a 
     rollover contribution described in section 402A(c)(3)(A).''.
       (2) The table of sections for subpart A of part I of 
     subchapter D of chapter 1 is amended by inserting after the 
     item relating to section 402 the following new item:

``Sec. 402A. Optional treatment of elective deferrals as plus 
              contributions.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

                TITLE XIII--ENHANCING FAIRNESS FOR WOMEN

     SEC. 1301. CATCH-UP CONTRIBUTIONS FOR INDIVIDUALS AGE 50 OR 
                   OVER.

       (a) In General.--Section 414 (relating to definitions and 
     special rules) is amended by adding at the end the following 
     new subsection:
       ``(v) Catch-up Contributions for Individuals Age 50 or 
     Over.--
       ``(1) In general.--An applicable employer plan shall not be 
     treated as failing to meet any requirement of this title 
     solely because the plan permits an eligible participant to 
     make additional elective deferrals in any plan year.
       ``(2) Limitation on amount of additional deferrals.--A plan 
     shall not permit additional elective deferrals under 
     paragraph (1) for any year in an amount greater than the 
     lesser of--
       ``(A) $5,000, or
       ``(B) the excess (if any) of--
       ``(i) the participant's compensation for the year, over
       ``(ii) any other elective deferrals of the participant for 
     such year which are made without regard to this subsection.

[[Page H7785]]

       ``(3) Treatment of contributions.--In the case of any 
     contribution to a plan under paragraph (1), such contribution 
     shall not, with respect to the year in which the contribution 
     is made--
       ``(A) be subject to any otherwise applicable limitation 
     contained in section 402(g), 402(h)(2), 404(a), 404(h), 
     408(p)(2)(A)(ii), 415, or 457, or
       ``(B) be taken into account in applying such limitations to 
     other contributions or benefits under such plan or any other 
     such plan.
       ``(4) Eligible participant.--For purposes of this 
     subsection, the term `eligible participant' means, with 
     respect to any plan year, a participant in a plan--
       ``(A) who has attained the age of 50 before the close of 
     the plan year, and
       ``(B) with respect to whom no other elective deferrals may 
     (without regard to this subsection) be made to the plan for 
     the plan year by reason of the application of any limitation 
     or other restriction described in paragraph (3) or comparable 
     limitation contained in the terms of the plan.
       ``(5) Other definitions and rules.--For purposes of this 
     subsection--
       ``(A) Applicable employer plan.--The term `applicable 
     employer plan' means--
       ``(i) an employees' trust described in section 401(a) which 
     is exempt from tax under section 501(a),
       ``(ii) a plan under which amounts are contributed by an 
     individual's employer for an annuity contract described in 
     section 403(b),
       ``(iii) an eligible deferred compensation plan under 
     section 457 of an eligible employer as defined in section 
     457(e)(1)(A), and
       ``(iv) an arrangement meeting the requirements of section 
     408 (k) or (p).
       ``(B) Elective deferral.--The term `elective deferral' has 
     the meaning given such term by subsection (u)(2)(C).
       ``(C) Exception for section 457 plans.--This subsection 
     shall not apply to an applicable employer plan described in 
     subparagraph (A)(iii) for any year to which section 457(b)(3) 
     applies.
       ``(D) Cost-of-living adjustment.--For years beginning after 
     December 31, 2005, the Secretary shall adjust annually the 
     $5,000 amount in subparagraph (A) for increases in the cost-
     of-living at the same time and in the same manner as 
     adjustments under section 415(d); except that the base period 
     shall be the calendar quarter beginning July 1, 2004, and any 
     increase which is not a multiple of $500 shall be rounded to 
     the next lowest multiple of $500.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions in taxable years beginning after 
     December 31, 2000.

     SEC. 1302. EQUITABLE TREATMENT FOR CONTRIBUTIONS OF EMPLOYEES 
                   TO DEFINED CONTRIBUTION PLANS.

       (a) Equitable Treatment.--
       (1) In general.--Subparagraph (B) of section 415(c)(1) 
     (relating to limitation for defined contribution plans) is 
     amended by striking ``25 percent'' and inserting ``100 
     percent''.
       (2) Application to section 403(b).--Section 403(b) is 
     amended--
       (A) by striking ``the exclusion allowance for such taxable 
     year'' in paragraph (1) and inserting ``the applicable limit 
     under section 415'';
       (B) by striking paragraph (2); and
       (C) by inserting ``or any amount received by a former 
     employee after the fifth taxable year following the taxable 
     year in which such employee was terminated'' before the 
     period at the end of the second sentence of paragraph (3).
       (3) Conforming amendments.--
       (A) Subsection (f) of section 72 is amended by striking 
     ``section 403(b)(2)(D)(iii))'' and inserting ``section 
     403(b)(2)(D)(iii), as in effect before the enactment of the 
     Debt Relief and Retirement Security Reconciliation Act)''.
       (B) Section 404(a)(10)(B) is amended by striking ``, the 
     exclusion allowance under section 403(b)(2),''.
       (C) Section 415(a)(2) is amended by striking ``, and the 
     amount of the contribution for such portion shall reduce the 
     exclusion allowance as provided in section 403(b)(2)''.
       (D) Section 415(c)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(E) Annuity contracts.--In the case of an annuity 
     contract described in section 403(b), the term `participant's 
     compensation' means the participant's includible compensation 
     determined under section 403(b)(3).''.
       (E) Section 415(c) is amended by striking paragraph (4).
       (F) Section 415(c)(7) is amended to read as follows:
       ``(7) Certain contributions by church plans not treated as 
     exceeding limit.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, at the election of a participant who is an 
     employee of a church or a convention or association of 
     churches, including an organization described in section 
     414(e)(3)(B)(ii), contributions and other additions for an 
     annuity contract or retirement income account described in 
     section 403(b) with respect to such participant, when 
     expressed as an annual addition to such participant's 
     account, shall be treated as not exceeding the limitation of 
     paragraph (1) if such annual addition is not in excess of 
     $10,000.
       ``(B) $40,000 aggregate limitation.--The total amount of 
     additions with respect to any participant which may be taken 
     into account for purposes of this subparagraph for all years 
     may not exceed $40,000.
       ``(C) Annual addition.--For purposes of this paragraph, the 
     term `annual addition' has the meaning given such term by 
     paragraph (2).''.
       (G) Subparagraph (B) of section 402(g)(7) (as redesignated 
     by section 211) is amended by inserting before the period at 
     the end the following: ``(as in effect before the enactment 
     of the Debt Relief and Retirement Security Reconciliation 
     Act)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to years beginning after December 31, 2000.
       (b) Special Rules for Sections 403(b) and 408.--
       (1) In general.--Subsection (k) of section 415 is amended 
     by adding at the end the following new paragraph:
       ``(4) Special rules for sections 403(b) and 408.--For 
     purposes of this section, any annuity contract described in 
     section 403(b) for the benefit of a participant shall be 
     treated as a defined contribution plan maintained by each 
     employer with respect to which the participant has the 
     control required under subsection (b) or (c) of section 414 
     (as modified by subsection (h)). For purposes of this 
     section, any contribution by an employer to a simplified 
     employee pension plan for an individual for a taxable year 
     shall be treated as an employer contribution to a defined 
     contribution plan for such individual for such year.''.
       (2) Effective date.--
       (A) In general.--The amendment made by paragraph (1) shall 
     apply to limitation years beginning after December 31, 1999.
       (B) Exclusion allowance.--Effective for limitation years 
     beginning in 2000, in the case of any annuity contract 
     described in section 403(b) of the Internal Revenue Code of 
     1986, the amount of the contribution disqualified by reason 
     of section 415(g) of such Code shall reduce the exclusion 
     allowance as provided in section 403(b)(2) of such Code.
       (3) Modification of 403(b) exclusion allowance to conform 
     to 415 modification.--The Secretary of the Treasury shall 
     modify the regulations regarding the exclusion allowance 
     under section 403(b)(2) of the Internal Revenue Code of 1986 
     to render void the requirement that contributions to a 
     defined benefit pension plan be treated as previously 
     excluded amounts for purposes of the exclusion allowance. For 
     taxable years beginning after December 31, 1999, such 
     regulations shall be applied as if such requirement were 
     void.
       (c) Deferred Compensation Plans of State and Local 
     Governments and Tax-Exempt Organizations.--
       (1) In general.--Subparagraph (B) of section 457(b)(2) 
     (relating to salary limitation on eligible deferred 
     compensation plans) is amended by striking ``33\1/3\ 
     percent'' and inserting ``100 percent''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to years beginning after December 31, 2000.

     SEC. 1303. FASTER VESTING OF CERTAIN EMPLOYER MATCHING 
                   CONTRIBUTIONS.

       (a) In General.--Section 411(a) (relating to minimum 
     vesting standards) is amended--
       (1) in paragraph (2), by striking ``A plan'' and inserting 
     ``Except as provided in paragraph (12), a plan''; and
       (2) by adding at the end the following:
       ``(12) Faster vesting for matching contributions.--In the 
     case of matching contributions (as defined in section 
     401(m)(4)(A)), paragraph (2) shall be applied--
       ``(A) by substituting `3 years' for `5 years' in 
     subparagraph (A), and
       ``(B) by substituting the following table for the table 
     contained in subparagraph (B):

                                                     The nonforfeitable
    ``Years of service:                                percentage is:  
      2............................................................20  
      3............................................................40  
      4............................................................60  
      5............................................................80  
      6.........................................................100.''.

       (b) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to contributions 
     for plan years beginning after December 31, 2000.
       (2) Collective bargaining agreements.--In the case of a 
     plan maintained pursuant to one or more collective bargaining 
     agreements between employee representatives and one or more 
     employers ratified by the date of the enactment of this Act, 
     the amendments made by this section shall not apply to 
     contributions on behalf of employees covered by any such 
     agreement for plan years beginning before the earlier of--
       (A) the later of--
       (i) the date on which the last of such collective 
     bargaining agreements terminates (determined without regard 
     to any extension thereof on or after such date of the 
     enactment); or
       (ii) January 1, 2001; or
       (B) January 1, 2005.
       (3) Service required.--With respect to any plan, the 
     amendments made by this section shall not apply to any 
     employee before the date that such employee has 1 hour of 
     service under such plan in any plan year to which the 
     amendments made by this section apply.

     SEC. 1304. SIMPLIFY AND UPDATE THE MINIMUM DISTRIBUTION 
                   RULES.

       (a) Simplification and Finalization of Minimum Distribution 
     Requirements.--
       (1) In general.--The Secretary of the Treasury shall--

[[Page H7786]]

       (A) simplify and finalize the regulations relating to 
     minimum distribution requirements under sections 401(a)(9), 
     408(a)(6) and (b)(3), 403(b)(10), and 457(d)(2) of the 
     Internal Revenue Code of 1986; and
       (B) modify such regulations to--
       (i) reflect current life expectancy; and
       (ii) revise the required distribution methods so that, 
     under reasonable assumptions, the amount of the required 
     minimum distribution does not decrease over a participant's 
     life expectancy.
       (2) Fresh start.--Notwithstanding subparagraph (D) of 
     section 401(a)(9) of such Code, during the first year that 
     regulations are in effect under this subsection, required 
     distributions for future years may be redetermined to reflect 
     changes under such regulations. Such redetermination shall 
     include the opportunity to choose a new designated 
     beneficiary and to elect a new method of calculating life 
     expectancy.
       (3) Effective date for regulations.--Regulations referred 
     to in paragraph (1) shall be effective for years beginning 
     after December 31, 2000, and shall apply in such years 
     without regard to whether an individual had previously begun 
     receiving minimum distributions.
       (b) Repeal of Rule Where Distributions Had Begun Before 
     Death Occurs.--
       (1) In general.--Subparagraph (B) of section 401(a)(9) is 
     amended by striking clause (i) and redesignating clauses 
     (ii), (iii), and (iv) as clauses (i), (ii), and (iii), 
     respectively.
       (2) Conforming changes.--
       (A) Clause (i) of section 401(a)(9)(B) (as so redesignated) 
     is amended--
       (i) by striking ``for other cases'' in the heading; and
       (ii) by striking ``the distribution of the employee's 
     interest has begun in accordance with subparagraph (A)(ii)'' 
     and inserting ``his entire interest has been distributed to 
     him''.
       (B) Clause (ii) of section 401(a)(9)(B) (as so 
     redesignated) is amended by striking ``clause (ii)'' and 
     inserting ``clause (i)''.
       (C) Clause (iii) of section 401(a)(9)(B) (as so 
     redesignated) is amended--
       (i) by striking ``clause (iii)(I)'' and inserting ``clause 
     (ii)(I)'';
       (ii) by striking ``clause (iii)(III)'' in subclause (I) and 
     inserting ``clause (ii)(III)'';
       (iii) by striking ``the date on which the employee would 
     have attained age 70\1/2\,'' in subclause (I) and inserting 
     ``April 1 of the calendar year following the calendar year in 
     which the spouse attains 70\1/2\,''; and
       (iv) by striking ``the distributions to such spouse 
     begin,'' in subclause (II) and inserting ``his entire 
     interest has been distributed to him,''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to years beginning after December 31, 2000.
       (c) Reduction in Excise Tax.--
       (1) In general.--Subsection (a) of section 4974 is amended 
     by striking ``50 percent'' and inserting ``10 percent''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to years beginning after December 31, 2000.

     SEC. 1305. CLARIFICATION OF TAX TREATMENT OF DIVISION OF 
                   SECTION 457 PLAN BENEFITS UPON DIVORCE.

       (a) In General.--Section 414(p)(11) (relating to 
     application of rules to governmental and church plans) is 
     amended--
       (1) by inserting ``or an eligible deferred compensation 
     plan (within the meaning of section 457(b))'' after 
     ``subsection (e))''; and
       (2) in the heading, by striking ``governmental and church 
     plans'' and inserting ``certain other plans''.
       (b) Waiver of Certain Distribution Requirements.--Paragraph 
     (10) of section 414(p) is amended by striking ``and section 
     409(d)'' and inserting ``section 409(d), and section 
     457(d)''.
       (c) Tax Treatment of Payments From a Section 457 Plan.--
     Subsection (p) of section 414 is amended by redesignating 
     paragraph (12) as paragraph (13) and inserting after 
     paragraph (11) the following new paragraph:
       ``(12) Tax treatment of payments from a section 457 plan.--
     If a distribution or payment from an eligible deferred 
     compensation plan described in section 457(b) is made 
     pursuant to a qualified domestic relations order, rules 
     similar to the rules of section 402(e)(1)(A) shall apply to 
     such distribution or payment.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to transfers, distributions, and payments made 
     after December 31, 2000.

     SEC. 1306. MODIFICATION OF SAFE HARBOR RELIEF FOR HARDSHIP 
                   WITHDRAWALS FROM CASH OR DEFERRED ARRANGEMENTS.

       (a) In General.--The Secretary of the Treasury shall revise 
     the regulations relating to hardship distributions under 
     section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 
     1986 to provide that the period an employee is prohibited 
     from making elective and employee contributions in order for 
     a distribution to be deemed necessary to satisfy financial 
     need shall be equal to 6 months.
       (b) Effective Date.--The revised regulations under 
     subsection (a) shall apply to years beginning after December 
     31, 2000.

           TITLE XIV--INCREASING PORTABILITY FOR PARTICIPANTS

     SEC. 1401. ROLLOVERS ALLOWED AMONG VARIOUS TYPES OF PLANS.

       (a) Rollovers From and to Section 457 Plans.--
       (1) Rollovers from section 457 plans.--
       (A) In general.--Section 457(e) (relating to other 
     definitions and special rules) is amended by adding at the 
     end the following:
       ``(16) Rollover amounts.--
       ``(A) General rule.--In the case of an eligible deferred 
     compensation plan established and maintained by an employer 
     described in subsection (e)(1)(A), if--
       ``(i) any portion of the balance to the credit of an 
     employee in such plan is paid to such employee in an eligible 
     rollover distribution (within the meaning of section 
     402(c)(4) without regard to subparagraph (C) thereof),
       ``(ii) the employee transfers any portion of the property 
     such employee receives in such distribution to an eligible 
     retirement plan described in section 402(c)(8)(B), and
       ``(iii) in the case of a distribution of property other 
     than money, the amount so transferred consists of the 
     property distributed,

     then such distribution (to the extent so transferred) shall 
     not be includible in gross income for the taxable year in 
     which paid.
       ``(B) Certain rules made applicable.--The rules of 
     paragraphs (2) through (7) (other than paragraph (4)(C)) and 
     (9) of section 402(c) and section 402(f) shall apply for 
     purposes of subparagraph (A).
       ``(C) Reporting.--Rollovers under this paragraph shall be 
     reported to the Secretary in the same manner as rollovers 
     from qualified retirement plans (as defined in section 
     4974(c)).''.
       (B) Deferral limit determined without regard to rollover 
     amounts.--Section 457(b)(2) (defining eligible deferred 
     compensation plan) is amended by inserting ``(other than 
     rollover amounts)'' after ``taxable year''.
       (C) Direct rollover.--Paragraph (1) of section 457(d) is 
     amended by striking ``and'' at the end of subparagraph (A), 
     by striking the period at the end of subparagraph (B) and 
     inserting ``, and'', and by inserting after subparagraph (B) 
     the following:
       ``(C) in the case of a plan maintained by an employer 
     described in subsection (e)(1)(A), the plan meets 
     requirements similar to the requirements of section 
     401(a)(31).

     Any amount transferred in a direct trustee-to-trustee 
     transfer in accordance with section 401(a)(31) shall not be 
     includible in gross income for the taxable year of 
     transfer.''.
       (D) Withholding.--
       (i) Paragraph (12) of section 3401(a) is amended by adding 
     at the end the following:
       ``(E) under or to an eligible deferred compensation plan 
     which, at the time of such payment, is a plan described in 
     section 457(b) maintained by an employer described in section 
     457(e)(1)(A); or''.
       (ii) Paragraph (3) of section 3405(c) is amended to read as 
     follows:
       ``(3) Eligible rollover distribution.--For purposes of this 
     subsection, the term `eligible rollover distribution' has the 
     meaning given such term by section 402(f)(2)(A).''.
       (iii) Liability for withholding.--Subparagraph (B) of 
     section 3405(d)(2) 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) section 457(b).''.
       (2) Rollovers to section 457 plans.--
       (A) In general.--Section 402(c)(8)(B) (defining eligible 
     retirement plan) is amended by striking ``and'' at the end of 
     clause (iii), by striking the period at the end of clause 
     (iv) and inserting ``, and'', and by inserting after clause 
     (iv) the following new clause:
       ``(v) an eligible deferred compensation plan described in 
     section 457(b) of an employer described in section 
     457(e)(1)(A).''.
       (B) Separate accounting.--Section 402(c) is amended by 
     adding at the end the following new paragraph:
       ``(11) Separate accounting.--Unless a plan described in 
     clause (v) of paragraph (8)(B) agrees to separately account 
     for amounts rolled into such plan from eligible retirement 
     plans not described in such clause, the plan described in 
     such clause may not accept transfers or rollovers from such 
     retirement plans.''.
       (C) 10 percent additional tax.--Subsection (t) of section 
     72 (relating to 10-percent additional tax on early 
     distributions from qualified retirement plans) is amended by 
     adding at the end the following new paragraph:
       ``(9) Special rule for rollovers to section 457 plans.--For 
     purposes of this subsection, a distribution from an eligible 
     deferred compensation plan (as defined in section 457(b)) of 
     an employer described in section 457(e)(1)(A) shall be 
     treated as a distribution from a qualified retirement plan 
     described in 4974(c)(1) to the extent that such distribution 
     is attributable to an amount transferred to an eligible 
     deferred compensation plan from a qualified retirement plan 
     (as defined in section 4974(c)).''.
       (b) Allowance of Rollovers From and to 403(b) Plans.--
       (1) Rollovers from section 403(b) plans.--Section 
     403(b)(8)(A)(ii) (relating to rollover amounts) is amended by 
     striking ``such distribution'' and all that follows and 
     inserting ``such distribution to an eligible retirement plan 
     described in section 402(c)(8)(B), and''.
       (2) Rollovers to section 403(b) plans.--Section 
     402(c)(8)(B) (defining eligible retirement plan), as amended 
     by subsection (a), is amended by striking ``and'' at the end 
     of clause (iv), by striking the period at the end of clause 
     (v) and inserting ``, and'', and by inserting after clause 
     (v) the following new clause:
       ``(vi) an annuity contract described in section 403(b).''.
       (c) Expanded Explanation to Recipients of Rollover 
     Distributions.--Paragraph (1)

[[Page H7787]]

     of section 402(f) (relating to written explanation to 
     recipients of distributions eligible for rollover treatment) 
     is amended by striking ``and'' at the end of subparagraph 
     (C), by striking the period at the end of subparagraph (D) 
     and inserting ``, and'', and by adding at the end the 
     following new subparagraph:
       ``(E) of the provisions under which distributions from the 
     eligible retirement plan receiving the distribution may be 
     subject to restrictions and tax consequences which are 
     different from those applicable to distributions from the 
     plan making such distribution.''.
       (d) Spousal Rollovers.--Section 402(c)(9) (relating to 
     rollover where spouse receives distribution after death of 
     employee) is amended by striking ``; except that'' and all 
     that follows up to the end period.
       (e) Conforming Amendments.--
       (1) Section 72(o)(4) is amended by striking ``and 
     408(d)(3)'' and inserting ``403(b)(8), 408(d)(3), and 
     457(e)(16)''.
       (2) Section 219(d)(2) is amended by striking ``or 
     408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
       (3) Section 401(a)(31)(B) is amended by striking ``and 
     403(a)(4)'' and inserting ``, 403(a)(4), 403(b)(8), and 
     457(e)(16)''.
       (4) Subparagraph (A) of section 402(f)(2) is amended by 
     striking ``or paragraph (4) of section 403(a)'' and inserting 
     ``, paragraph (4) of section 403(a), subparagraph (A) of 
     section 403(b)(8), or subparagraph (A) of section 
     457(e)(16)''.
       (5) Paragraph (1) of section 402(f) is amended by striking 
     ``from an eligible retirement plan''.
       (6) Subparagraphs (A) and (B) of section 402(f)(1) are 
     amended by striking ``another eligible retirement plan'' and 
     inserting ``an eligible retirement plan''.
       (7) Subparagraph (B) of section 403(b)(8) is amended to 
     read as follows:
       ``(B) Certain rules made applicable.--The rules of 
     paragraphs (2) through (7) and (9) of section 402(c) and 
     section 402(f) shall apply for purposes of subparagraph (A), 
     except that section 402(f) shall be applied to the payor in 
     lieu of the plan administrator.''.
       (8) Section 408(a)(1) is amended by striking ``or 
     403(b)(8),'' and inserting ``403(b)(8), or 457(e)(16)''.
       (9) Subparagraphs (A) and (B) of section 415(b)(2) are each 
     amended by striking ``and 408(d)(3)'' and inserting 
     ``403(b)(8), 408(d)(3), and 457(e)(16)''.
       (10) Section 415(c)(2) is amended by striking ``and 
     408(d)(3)'' and inserting ``408(d)(3), and 457(e)(16)''.
       (11) Section 4973(b)(1)(A) is amended by striking ``or 
     408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
       (f) Effective Date; Special Rule.--
       (1) Effective date.--The amendments made by this section 
     shall apply to distributions after December 31, 2000.
       (2) Special rule.--Notwithstanding any other provision of 
     law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
     Reform Act of 1986 shall not apply to any distribution from 
     an eligible retirement plan (as defined in clause (iii) or 
     (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 
     1986) on behalf of an individual if there was a rollover to 
     such plan on behalf of such individual which is permitted 
     solely by reason of any amendment made by this section.

     SEC. 1402. ROLLOVERS OF IRAS INTO WORKPLACE RETIREMENT PLANS.

       (a) In General.--Subparagraph (A) of section 408(d)(3) 
     (relating to rollover amounts) is amended by adding ``or'' at 
     the end of clause (i), by striking clauses (ii) and (iii), 
     and by adding at the end the following:
       ``(ii) the entire amount received (including money and any 
     other property) is paid into an eligible retirement plan for 
     the benefit of such individual not later than the 60th day 
     after the date on which the payment or distribution is 
     received, except that the maximum amount which may be paid 
     into such plan may not exceed the portion of the amount 
     received which is includible in gross income (determined 
     without regard to this paragraph).

     For purposes of clause (ii), the term `eligible retirement 
     plan' means an eligible retirement plan described in clause 
     (iii), (iv), (v), or (vi) of section 402(c)(8)(B).''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 403(b) is amended by striking 
     ``section 408(d)(3)(A)(iii)'' and inserting ``section 
     408(d)(3)(A)(ii)''.
       (2) Clause (i) of section 408(d)(3)(D) is amended by 
     striking ``(i), (ii), or (iii)'' and inserting ``(i) or 
     (ii)''.
       (3) Subparagraph (G) of section 408(d)(3) is amended to 
     read as follows:
       ``(G) Simple retirement accounts.--In the case of any 
     payment or distribution out of a simple retirement account 
     (as defined in subsection (p)) to which section 72(t)(6) 
     applies, this paragraph shall not apply unless such payment 
     or distribution is paid into another simple retirement 
     account.''.
       (c) Effective Date; Special Rule.--
       (1) Effective date.--The amendments made by this section 
     shall apply to distributions after December 31, 2000.
       (2) Special rule.--Notwithstanding any other provision of 
     law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
     Reform Act of 1986 shall not apply to any distribution from 
     an eligible retirement plan (as defined in clause (iii) or 
     (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 
     1986) on behalf of an individual if there was a rollover to 
     such plan on behalf of such individual which is permitted 
     solely by reason of the amendments made by this section.

     SEC. 1403. ROLLOVERS OF AFTER-TAX CONTRIBUTIONS.

       (a) Rollovers From Exempt Trusts.--Paragraph (2) of section 
     402(c) (relating to maximum amount which may be rolled over) 
     is amended by adding at the end the following: ``The 
     preceding sentence shall not apply to such distribution to 
     the extent--
       ``(A) such portion is transferred in a direct trustee-to-
     trustee transfer to a qualified trust which is part of a plan 
     which is a defined contribution plan and which agrees to 
     separately account for amounts so transferred, including 
     separately accounting for the portion of such distribution 
     which is includible in gross income and the portion of such 
     distribution which is not so includible, or
       ``(B) such portion is transferred to an eligible retirement 
     plan described in clause (i) or (ii) of paragraph (8)(B).''.
       (b) Optional Direct Transfer of Eligible Rollover 
     Distributions.--Subparagraph (B) of section 401(a)(31) 
     (relating to limitation) is amended by adding at the end the 
     following: ``The preceding sentence shall not apply to such 
     distribution if the plan to which such distribution is 
     transferred--
       ``(i) agrees to separately account for amounts so 
     transferred, including separately accounting for the portion 
     of such distribution which is includible in gross income and 
     the portion of such distribution which is not so includible, 
     or
       ``(ii) is an eligible retirement plan described in clause 
     (i) or (ii) of section 402(c)(8)(B).''.
       (c) Rules for Applying Section 72 to IRAs.--Paragraph (3) 
     of section 408(d) (relating to special rules for applying 
     section 72) is amended by inserting at the end the following:
       ``(H) Application of section 72.--
       ``(i) In general.--If--

       ``(I) a distribution is made from an individual retirement 
     plan, and
       ``(II) a rollover contribution is made to an eligible 
     retirement plan described in section 402(c)(8)(B)(iii), (iv), 
     (v), or (vi) with respect to all or part of such 
     distribution,

     then, notwithstanding paragraph (2), the rules of clause (ii) 
     shall apply for purposes of applying section 72.
       ``(ii) Applicable rules.--In the case of a distribution 
     described in clause (i)--

       ``(I) section 72 shall be applied separately to such 
     distribution,
       ``(II) notwithstanding the pro rata allocation of income 
     on, and investment in, the contract to distributions under 
     section 72, the portion of such distribution rolled over to 
     an eligible retirement plan described in clause (i) shall be 
     treated as from income on the contract (to the extent of the 
     aggregate income on the contract from all individual 
     retirement plans of the distributee), and
       ``(III) appropriate adjustments shall be made in applying 
     section 72 to other distributions in such taxable year and 
     subsequent taxable years.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to distributions made after December 31, 2000.

     SEC. 1404. HARDSHIP EXCEPTION TO 60-DAY RULE.

       (a) Exempt Trusts.--Paragraph (3) of section 402(c) 
     (relating to transfer must be made within 60 days of receipt) 
     is amended to read as follows:
       ``(3) Transfer must be made within 60 days of receipt.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     paragraph (1) shall not apply to any transfer of a 
     distribution made after the 60th day following the day on 
     which the distributee received the property distributed.
       ``(B) Hardship exception.--The Secretary may waive the 60-
     day requirement under subparagraph (A) where the failure to 
     waive such requirement would be against equity or good 
     conscience, including casualty, disaster, or other events 
     beyond the reasonable control of the individual subject to 
     such requirement.''.
       (b) IRAs.--Paragraph (3) of section 408(d) (relating to 
     rollover contributions), as amended by section 1403, is 
     amended by adding after subparagraph (H) the following new 
     subparagraph:
       ``(I) Waiver of 60-day requirement.--The Secretary may 
     waive the 60-day requirement under subparagraphs (A) and (D) 
     where the failure to waive such requirement would be against 
     equity or good conscience, including casualty, disaster, or 
     other events beyond the reasonable control of the individual 
     subject to such requirement.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions after December 31, 2000.

     SEC. 1405. TREATMENT OF FORMS OF DISTRIBUTION.

       (a) Plan Transfers.--
       (1) In general.--Paragraph (6) of section 411(d) (relating 
     to accrued benefit not to be decreased by amendment) is 
     amended by adding at the end the following:
       ``(D) Plan transfers.--
       ``(i) In general.--A defined contribution plan (in this 
     subparagraph referred to as the `transferee plan') shall not 
     be treated as failing to meet the requirements of this 
     subsection merely because the transferee plan does not 
     provide some or all of the forms of distribution previously 
     available under another defined contribution plan (in this 
     subparagraph referred to as the `transferor plan') to the 
     extent that--

       ``(I) the forms of distribution previously available under 
     the transferor plan applied

[[Page H7788]]

     to the account of a participant or beneficiary under the 
     transferor plan that was transferred from the transferor plan 
     to the transferee plan pursuant to a direct transfer rather 
     than pursuant to a distribution from the transferor plan,
       ``(II) the terms of both the transferor plan and the 
     transferee plan authorize the transfer described in subclause 
     (I),
       ``(III) the transfer described in subclause (I) was made 
     pursuant to a voluntary election by the participant or 
     beneficiary whose account was transferred to the transferee 
     plan,
       ``(IV) the election described in subclause (III) was made 
     after the participant or beneficiary received a notice 
     describing the consequences of making the election,
       ``(V) if the transferor plan provides for an annuity as the 
     normal form of distribution under the plan in accordance with 
     section 417, the transfer is made with the consent of the 
     participant's spouse (if any), and such consent meets 
     requirements similar to the requirements imposed by section 
     417(a)(2), and
       ``(VI) the transferee plan allows the participant or 
     beneficiary described in subclause (III) to receive any 
     distribution to which the participant or beneficiary is 
     entitled under the transferee plan in the form of a single 
     sum distribution.

       ``(ii) Exception.--Clause (i) shall apply to plan mergers 
     and other transactions having the effect of a direct 
     transfer, including consolidations of benefits attributable 
     to different employers within a multiple employer plan.
       ``(E) Elimination of form of distribution.--Except to the 
     extent provided in regulations, a defined contribution plan 
     shall not be treated as failing to meet the requirements of 
     this section merely because of the elimination of a form of 
     distribution previously available thereunder. This 
     subparagraph shall not apply to the elimination of a form of 
     distribution with respect to any participant unless--
       ``(i) a single sum payment is available to such participant 
     at the same time or times as the form of distribution being 
     eliminated, and
       ``(ii) such single sum payment is based on the same or 
     greater portion of the participant's account as the form of 
     distribution being eliminated.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to years beginning after December 31, 2000.
       (b) Regulations.--
       (1) In general.--The last sentence of paragraph (6)(B) of 
     section 411(d) (relating to accrued benefit not to be 
     decreased by amendment) is amended to read as follows: ``The 
     Secretary shall by regulations provide that this subparagraph 
     shall not apply to any plan amendment that does not adversely 
     affect the rights of participants in a material manner.''.
       (2) Secretary directed.--Not later than December 31, 2001, 
     the Secretary of the Treasury is directed to issue final 
     regulations under section 411(d)(6) of the Internal Revenue 
     Code of 1986, including the regulations required by the 
     amendments made by this subsection. Such regulations shall 
     apply to plan years beginning after December 31, 2001, or 
     such earlier date as is specified by the Secretary of the 
     Treasury.

     SEC. 1406. RATIONALIZATION OF RESTRICTIONS ON DISTRIBUTIONS.

       (a) Modification of Same Desk Exception.--
       (1) Section 401(k).--
       (A) Section 401(k)(2)(B)(i)(I) (relating to qualified cash 
     or deferred arrangements) is amended by striking ``separation 
     from service'' and inserting ``severance from employment''.
       (B) Subparagraph (A) of section 401(k)(10) (relating to 
     distributions upon termination of plan or disposition of 
     assets or subsidiary) is amended to read as follows:
       ``(A) In general.--An event described in this subparagraph 
     is the termination of the plan without establishment or 
     maintenance of another defined contribution plan (other than 
     an employee stock ownership plan as defined in section 
     4975(e)(7)).''.
       (C) Section 401(k)(10) is amended--
       (i) in subparagraph (B)--

       (I) by striking ``An event'' in clause (i) and inserting 
     ``A termination''; and
       (II) by striking ``the event'' in clause (i) and inserting 
     ``the termination'';

       (ii) by striking subparagraph (C); and
       (iii) by striking ``or disposition of assets or 
     subsidiary'' in the heading.
       (2) Section 403(b).--
       (A) Paragraphs (7)(A)(ii) and (11)(A) of section 403(b) are 
     each amended by striking ``separates from service'' and 
     inserting ``has a severance from employment''.
       (B) The heading for paragraph (11) of section 403(b) is 
     amended by striking ``separation from service'' and inserting 
     ``severance from employment''.
       (3) Section 457.--Clause (ii) of section 457(d)(1)(A) is 
     amended by striking ``is separated from service'' and 
     inserting ``has a severance from employment''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to distributions after December 31, 2000.

     SEC. 1407. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED 
                   BENEFIT PLANS.

       (a) 403(b) Plans.--Subsection (b) of section 403 is amended 
     by adding at the end the following new paragraph:
       ``(13) Trustee-to-trustee transfers to purchase permissive 
     service credit.--No amount shall be includible in gross 
     income by reason of a direct trustee-to-trustee transfer to a 
     defined benefit governmental plan (as defined in section 
     414(d)) if such transfer is--
       ``(A) for the purchase of permissive service credit (as 
     defined in section 415(n)(3)(A)) under such plan, or
       ``(B) a repayment to which section 415 does not apply by 
     reason of subsection (k)(3) thereof.''.
       (b) 457 Plans.--Subsection (e) of section 457 is amended by 
     adding after paragraph (16) the following new paragraph:
       ``(17) Trustee-to-trustee transfers to purchase permissive 
     service credit.--No amount shall be includible in gross 
     income by reason of a direct trustee-to-trustee transfer to a 
     defined benefit governmental plan (as defined in section 
     414(d)) if such transfer is--
       ``(A) for the purchase of permissive service credit (as 
     defined in section 415(n)(3)(A)) under such plan, or
       ``(B) a repayment to which section 415 does not apply by 
     reason of subsection (k)(3) thereof.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to trustee-to-trustee transfers after December 
     31, 2000.

     SEC. 1408. EMPLOYERS MAY DISREGARD ROLLOVERS FOR PURPOSES OF 
                   CASH-OUT AMOUNTS.

       (a) Qualified Plans.--Section 411(a)(11) (relating to 
     restrictions on certain mandatory distributions) is amended 
     by adding at the end the following:
       ``(D) Special rule for rollover contributions.--A plan 
     shall not fail to meet the requirements of this paragraph if, 
     under the terms of the plan, the present value of the 
     nonforfeitable accrued benefit is determined without regard 
     to that portion of such benefit which is attributable to 
     rollover contributions (and earnings allocable thereto). For 
     purposes of this subparagraph, the term `rollover 
     contributions' means any rollover contribution under sections 
     402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 
     457(e)(16).''.
       (b) Eligible Deferred Compensation Plans.--Clause (i) of 
     section 457(e)(9)(A) is amended by striking ``such amount'' 
     and inserting ``the portion of such amount which is not 
     attributable to rollover contributions (as defined in section 
     411(a)(11)(D))''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions after December 31, 2000.

     SEC. 1409. MINIMUM DISTRIBUTION AND INCLUSION REQUIREMENTS 
                   FOR SECTION 457 PLANS.

       (a) Minimum Distribution Requirements.--Paragraph (2) of 
     section 457(d) (relating to distribution requirements) is 
     amended to read as follows:
       ``(2) Minimum distribution requirements.--A plan meets the 
     minimum distribution requirements of this paragraph if such 
     plan meets the requirements of section 401(a)(9).''.
       (b) Inclusion in Gross Income.--
       (1) Year of inclusion.--Subsection (a) of section 457 
     (relating to year of inclusion in gross income) is amended to 
     read as follows:
       ``(a) Year of inclusion in gross income.--
       ``(1) In general.--Any amount of compensation deferred 
     under an eligible deferred compensation plan, and any income 
     attributable to the amounts so deferred, shall be includible 
     in gross income only for the taxable year in which such 
     compensation or other income--
       ``(A) is paid to the participant or other beneficiary, in 
     the case of a plan of an eligible employer described in 
     subsection (e)(1)(A), and
       ``(B) is paid or otherwise made available to the 
     participant or other beneficiary, in the case of a plan of an 
     eligible employer described in subsection (e)(1)(B).
       ``(2) Special rule for rollover amounts.--To the extent 
     provided in section 72(t)(9), section 72(t) shall apply to 
     any amount includible in gross income under this 
     subsection.''.
       (2) Conforming amendments.--
       (A) So much of paragraph (9) of section 457(e) as precedes 
     subparagraph (A) is amended to read as follows:
       ``(9) Benefits of tax exempt organization plans not treated 
     as made available by reason of certain elections, etc.--In 
     the case of an eligible deferred compensation plan of an 
     employer described in subsection (e)(1)(B)--''.
       (B) Section 457(d) is amended by adding at the end the 
     following new paragraph:
       ``(3) Special rule for government plan.--An eligible 
     deferred compensation plan of an employer described in 
     subsection (e)(1)(A) shall not be treated as failing to meet 
     the requirements of this subsection solely by reason of 
     making a distribution described in subsection (e)(9)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions after December 31, 2000.

        TITLE XV--STRENGTHENING PENSION SECURITY AND ENFORCEMENT

     SEC. 1501. REPEAL OF 150 PERCENT OF CURRENT LIABILITY FUNDING 
                   LIMIT.

       (a) In General.--Section 412(c)(7) (relating to full-
     funding limitation) is amended--
       (1) by striking ``the applicable percentage'' in 
     subparagraph (A)(i)(I) and inserting ``in the case of plan 
     years beginning before January 1, 2004, the applicable 
     percentage''; and
       (2) by amending subparagraph (F) to read as follows:

[[Page H7789]]

       ``(F) Applicable percentage.--For purposes of subparagraph 
     (A)(i)(I), the applicable percentage shall be determined in 
     accordance with the following table:

    ``In the case of any plan year                       The applicable
      beginning in--                                    percentage is--
      2001........................................................160  
      2002........................................................165  
      2003......................................................170.''.

       (b) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2000.

     SEC. 1502. MAXIMUM CONTRIBUTION DEDUCTION RULES MODIFIED AND 
                   APPLIED TO ALL DEFINED BENEFIT PLANS.

       (a) In General.--Subparagraph (D) of section 404(a)(1) 
     (relating to special rule in case of certain plans) is 
     amended to read as follows:
       ``(D) Special rule in case of certain plans.--
       ``(i) In general.--In the case of any defined benefit plan, 
     except as provided in regulations, the maximum amount 
     deductible under the limitations of this paragraph shall not 
     be less than the unfunded termination liability (determined 
     as if the proposed termination date referred to in section 
     4041(b)(2)(A)(i)(II) of the Employee Retirement Income 
     Security Act of 1974 were the last day of the plan year).
       ``(ii) Plans with less than 100 participants.--For purposes 
     of this subparagraph, in the case of a plan which has less 
     than 100 participants for the plan year, termination 
     liability shall not include the liability attributable to 
     benefit increases for highly compensated employees (as 
     defined in section 414(q)) resulting from a plan amendment 
     which is made or becomes effective, whichever is later, 
     within the last 2 years before the termination date.
       ``(iii) Rule for determining number of participants.--For 
     purposes of determining whether a plan has more than 100 
     participants, all defined benefit plans maintained by the 
     same employer (or any member of such employer's controlled 
     group (within the meaning of section 412(l)(8)(C))) shall be 
     treated as one plan, but only employees of such member or 
     employer shall be taken into account.
       ``(iv) Plans established and maintain by professional 
     service employers.--Clause (i) shall not apply to a plan 
     described in section 4021(b)(13) of the Employee Retirement 
     Income Security Act of 1974.''.
       (b) Conforming Amendment.--Paragraph (6) of section 4972(c) 
     is amended to read as follows:
       ``(6) Exceptions.--In determining the amount of 
     nondeductible contributions for any taxable year, there shall 
     not be taken into account so much of the contributions to one 
     or more defined contribution plans which are not deductible 
     when contributed solely because of section 404(a)(7) as does 
     not exceed the greater of--
       ``(A) the amount of contributions not in excess of 6 
     percent of compensation (within the meaning of section 
     404(a)) paid or accrued (during the taxable year for which 
     the contributions were made) to beneficiaries under the 
     plans, or
       ``(B) the sum of--
       ``(i) the amount of contributions described in section 
     401(m)(4)(A), plus
       ``(ii) the amount of contributions described in section 
     402(g)(3)(A).

     For purposes of this paragraph, the deductible limits under 
     section 404(a)(7) shall first be applied to amounts 
     contributed to a defined benefit plan and then to amounts 
     described in subparagraph (B).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2000.

     SEC. 1503. EXCISE TAX RELIEF FOR SOUND PENSION FUNDING.

       (a) In General.--Subsection (c) of section 4972 (relating 
     to nondeductible contributions) is amended by adding at the 
     end the following new paragraph:
       ``(7) Defined benefit plan exception.--In determining the 
     amount of nondeductible contributions for any taxable year, 
     an employer may elect for such year not to take into account 
     any contributions to a defined benefit plan except to the 
     extent that such contributions exceed the full-funding 
     limitation (as defined in section 412(c)(7), determined 
     without regard to subparagraph (A)(i)(I) thereof). For 
     purposes of this paragraph, the deductible limits under 
     section 404(a)(7) shall first be applied to amounts 
     contributed to defined contribution plans and then to amounts 
     described in this paragraph. If an employer makes an election 
     under this paragraph for a taxable year, paragraph (6) shall 
     not apply to such employer for such taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1504. EXCISE TAX ON FAILURE TO PROVIDE NOTICE BY DEFINED 
                   BENEFIT PLANS SIGNIFICANTLY REDUCING FUTURE 
                   BENEFIT ACCRUALS.

       (a) In General.--Chapter 43 (relating to qualified pension, 
     etc., plans) is amended by adding at the end the following 
     new section:

     ``SEC. 4980F. FAILURE OF APPLICABLE PLANS REDUCING BENEFIT 
                   ACCRUALS TO SATISFY NOTICE REQUIREMENTS.

       ``(a) Imposition of Tax.--There is hereby imposed a tax on 
     the failure of any applicable pension plan to meet the 
     requirements of subsection (e) with respect to any applicable 
     individual.
       ``(b) Amount of Tax.--
       ``(1) In general.--The amount of the tax imposed by 
     subsection (a) on any failure with respect to any applicable 
     individual shall be $100 for each day in the noncompliance 
     period with respect to such failure.
       ``(2) Noncompliance period.--For purposes of this section, 
     the term `noncompliance period' means, with respect to any 
     failure, the period beginning on the date the failure first 
     occurs and ending on the date the failure is corrected.
       ``(c) Limitations on Amount of Tax.--
       ``(1) Overall limitation for unintentional failures.--In 
     the case of failures that are due to reasonable cause and not 
     to willful neglect, the tax imposed by subsection (a) for 
     failures during the taxable year of the employer (or, in the 
     case of a multiemployer plan, the taxable year of the trust 
     forming part of the plan) shall not exceed $500,000. For 
     purposes of the preceding sentence, all multiemployer plans 
     of which the same trust forms a part shall be treated as one 
     plan. For purposes of this paragraph, if not all persons who 
     are treated as a single employer for purposes of this section 
     have the same taxable year, the taxable years taken into 
     account shall be determined under principles similar to the 
     principles of section 1561.
       ``(2) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive relative to the failure involved.
       ``(d) Liability for Tax.--The following shall be liable for 
     the tax imposed by subsection (a):
       ``(1) In the case of a plan other than a multiemployer 
     plan, the employer.
       ``(2) In the case of a multiemployer plan, the plan.
       ``(e) Notice Requirements for Plans Significantly Reducing 
     Benefit Accruals.--
       ``(1) In general.--If an applicable pension plan is amended 
     to provide for a significant reduction in the rate of future 
     benefit accrual, the plan administrator shall provide written 
     notice to each applicable individual (and to each employee 
     organization representing applicable individuals).
       ``(2) Notice.--The notice required by paragraph (1) shall 
     be written in a manner calculated to be understood by the 
     average plan participant and shall provide sufficient 
     information (as determined in accordance with regulations 
     prescribed by the Secretary) to allow applicable individuals 
     to understand the effect of the plan amendment.
       ``(3) Timing of notice.--Except as provided in regulations, 
     the notice required by paragraph (1) shall be provided within 
     a reasonable time before the effective date of the plan 
     amendment.
       ``(4) Designees.--Any notice under paragraph (1) may be 
     provided to a person designated, in writing, by the person to 
     which it would otherwise be provided.
       ``(5) Notice before adoption of amendment.--A plan shall 
     not be treated as failing to meet the requirements of 
     paragraph (1) merely because notice is provided before the 
     adoption of the plan amendment if no material modification of 
     the amendment occurs before the amendment is adopted.
       ``(f) Applicable Individual; Applicable Pension Plan.--For 
     purposes of this section--
       ``(1) Applicable individual.--The term `applicable 
     individual' means, with respect to any plan amendment--
       ``(A) any participant in the plan, and
       ``(B) any beneficiary who is an alternate payee (within the 
     meaning of section 414(p)(8)) under an applicable qualified 
     domestic relations order (within the meaning of section 
     414(p)(1)(A)),
     who may reasonably be expected to be affected by such plan 
     amendment.
       ``(2) Applicable pension plan.--The term `applicable 
     pension plan' means--
       ``(A) any defined benefit plan, or
       ``(B) an individual account plan which is subject to the 
     funding standards of section 412,

     which had 100 or more participants who had accrued a benefit, 
     or with respect to whom contributions were made, under the 
     plan (whether or not vested) as of the last day of the plan 
     year preceding the plan year in which the plan amendment 
     becomes effective. Such term shall not include a governmental 
     plan (within the meaning of section 414(d)) or a church plan 
     (within the meaning of section 414(e)) with respect to which 
     the election provided by section 410(d) has not been made.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     43 is amended by adding at the end the following new item:

 ``Sec. 4980F. Failure of applicable plans reducing benefit accruals to 
              satisfy notice requirements.''.
       (c) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to plan amendments taking effect on or after the date 
     of the enactment of this Act.
       (2) Transition.--Until such time as the Secretary of the 
     Treasury issues regulations under sections 4980F(e)(2) and 
     (3) of the Internal Revenue Code of 1986 (as added by the 
     amendments made by this section), a plan shall be treated as 
     meeting the requirements of such sections if it makes a good 
     faith effort to comply with such requirements.
       (3) Special rule.--The period for providing any notice 
     required by the amendments made by this section shall not end 
     before the date which is 3 months after the date of the 
     enactment of this Act.

[[Page H7790]]

       (d) Study.--The Secretary of the Treasury shall prepare a 
     report on the effects of conversions of traditional defined 
     benefit plans to cash balance or hybrid formula plans. Such 
     study shall examine the effect of such conversions on longer 
     service participants, including the incidence and effects of 
     ``wear away'' provisions under which participants earn no 
     additional benefits for a period of time after the 
     conversion. As soon as practicable, but not later than 60 
     days after the date of the enactment of this Act, the 
     Secretary shall submit such report, together with 
     recommendations thereon, to the Committee on Ways and Means 
     of the House of Representatives and the Committee on Finance 
     of the Senate.

     SEC. 1505. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 
                   415.

       (a) Compensation Limit.--Paragraph (11) of section 415(b) 
     (relating to limitation for defined benefit plans) is amended 
     to read as follows:
       ``(11) Special limitation rule for governmental and 
     multiemployer plans.--In the case of a governmental plan (as 
     defined in section 414(d)) or a multiemployer plan (as 
     defined in section 414(f)), subparagraph (B) of paragraph (1) 
     shall not apply.''.
       (b) Combining and Aggregation of Plans.--
       (1) Combining of plans.--Subsection (f) of section 415 
     (relating to combining of plans) is amended by adding at the 
     end the following:
       ``(3) Exception for multiemployer plans.--Notwithstanding 
     paragraph (1) and subsection (g), a multiemployer plan (as 
     defined in section 414(f)) shall not be combined or 
     aggregated with any other plan maintained by an employer for 
     purposes of applying the limitations established in this 
     section, except that such plan shall be combined or 
     aggregated with another plan which is not such a 
     multiemployer plan solely for purposes of determining whether 
     such other plan meets the requirements of subsections 
     (b)(1)(A) and (c).''.
       (2) Conforming amendment for aggregation of plans.--
     Subsection (g) of section 415 (relating to aggregation of 
     plans) is amended by striking ``The Secretary'' and inserting 
     ``Except as provided in subsection (f)(3), the Secretary''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1506. PROHIBITED ALLOCATIONS OF STOCK IN S CORPORATION 
                   ESOP.

       (a) In General.--Section 409 (relating to qualifications 
     for tax credit employee stock ownership plans) is amended by 
     redesignating subsection (p) as subsection (q) and by 
     inserting after subsection (o) the following new subsection:
       ``(p) Prohibited Allocations of Securities in an S 
     Corporation.--
       ``(1) In general.--An employee stock ownership plan holding 
     employer securities consisting of stock in an S corporation 
     shall provide that no portion of the assets of the plan 
     attributable to (or allocable in lieu of) such employer 
     securities may, during a nonallocation year, accrue (or be 
     allocated directly or indirectly under any plan of the 
     employer meeting the requirements of section 401(a)) for the 
     benefit of any disqualified person.
       ``(2) Failure to meet requirements.--
       ``(A) In general.--If a plan fails to meet the requirements 
     of paragraph (1), the plan shall be treated as having 
     distributed to any disqualified person the amount allocated 
     to the account of such person in violation of paragraph (1) 
     at the time of such allocation.
       ``(B) Cross reference.--

  ``For excise tax relating to violations of paragraph (1) and 
ownership of synthetic equity, see section 4979A.

       ``(3) Nonallocation year.--For purposes of this 
     subsection--
       ``(A) In general.--The term `nonallocation year' means any 
     plan year of an employee stock ownership plan if, at any time 
     during such plan year--
       ``(i) such plan holds employer securities consisting of 
     stock in an S corporation, and
       ``(ii) disqualified persons own at least 50 percent of the 
     number of shares of stock in the S corporation.
       ``(B) Attribution rules.--For purposes of subparagraph 
     (A)--
       ``(i) In general.--The rules of section 318(a) shall apply 
     for purposes of determining ownership, except that--

       ``(I) in applying paragraph (1) thereof, the members of an 
     individual's family shall include members of the family 
     described in paragraph (4)(D), and
       ``(II) paragraph (4) thereof shall not apply.

       ``(ii) Deemed-owned shares.--Notwithstanding the employee 
     trust exception in section 318(a)(2)(B)(i), individual shall 
     be treated as owning deemed-owned shares of the individual.

     Solely for purposes of applying paragraph (5), this 
     subparagraph shall be applied after the attribution rules of 
     paragraph (5) have been applied.
       ``(4) Disqualified person.--For purposes of this 
     subsection--
       ``(A) In general.--The term `disqualified person' means any 
     person if--
       ``(i) the aggregate number of deemed-owned shares of such 
     person and the members of such person's family is at least 20 
     percent of the number of deemed-owned shares of stock in the 
     S corporation, or
       ``(ii) in the case of a person not described in clause (i), 
     the number of deemed-owned shares of such person is at least 
     10 percent of the number of deemed-owned shares of stock in 
     such corporation.
       ``(B) Treatment of family members.--In the case of a 
     disqualified person described in subparagraph (A)(i), any 
     member of such person's family with deemed-owned shares shall 
     be treated as a disqualified person if not otherwise treated 
     as a disqualified person under subparagraph (A).
       ``(C) Deemed-owned shares.--
       ``(i) In general.--The term `deemed-owned shares' means, 
     with respect to any person--

       ``(I) the stock in the S corporation constituting employer 
     securities of an employee stock ownership plan which is 
     allocated to such person under the plan, and
       ``(II) such person's share of the stock in such corporation 
     which is held by such plan but which is not allocated under 
     the plan to participants.

       ``(ii) Person's share of unallocated stock.--For purposes 
     of clause (i)(II), a person's share of unallocated S 
     corporation stock held by such plan is the amount of the 
     unallocated stock which would be allocated to such person if 
     the unallocated stock were allocated to all participants in 
     the same proportions as the most recent stock allocation 
     under the plan.
       ``(D) Member of family.--For purposes of this paragraph, 
     the term `member of the family' means, with respect to any 
     individual--
       ``(i) the spouse of the individual,
       ``(ii) an ancestor or lineal descendant of the individual 
     or the individual's spouse,
       ``(iii) a brother or sister of the individual or the 
     individual's spouse and any lineal descendant of the brother 
     or sister, and
       ``(iv) the spouse of any individual described in clause 
     (ii) or (iii).
     A spouse of an individual who is legally separated from such 
     individual under a decree of divorce or separate maintenance 
     shall not be treated as such individual's spouse for purposes 
     of this subparagraph.
       ``(5) Treatment of synthetic equity.--For purposes of 
     paragraphs (3) and (4), in the case of a person who owns 
     synthetic equity in the S corporation, except to the extent 
     provided in regulations, the shares of stock in such 
     corporation on which such synthetic equity is based shall be 
     treated as outstanding stock in such corporation and deemed-
     owned shares of such person if such treatment of synthetic 
     equity of 1 or more such persons results in--
       ``(A) the treatment of any person as a disqualified person, 
     or
       ``(B) the treatment of any year as a nonallocation year.

     For purposes of this paragraph, synthetic equity shall be 
     treated as owned by a person in the same manner as stock is 
     treated as owned by a person under the rules of paragraphs 
     (2) and (3) of section 318(a). If, without regard to this 
     paragraph, a person is treated as a disqualified person or a 
     year is treated as a nonallocation year, this paragraph shall 
     not be construed to result in the person or year not being so 
     treated.
       ``(6) Definitions.--For purposes of this subsection--
       ``(A) Employee stock ownership plan.--The term `employee 
     stock ownership plan' has the meaning given such term by 
     section 4975(e)(7).
       ``(B) Employer securities.--The term `employer security' 
     has the meaning given such term by section 409(l).
       ``(C) Synthetic equity.--The term `synthetic equity' means 
     any stock option, warrant, restricted stock, deferred 
     issuance stock right, or similar interest or right that gives 
     the holder the right to acquire or receive stock of the S 
     corporation in the future. Except to the extent provided in 
     regulations, synthetic equity also includes a stock 
     appreciation right, phantom stock unit, or similar right to a 
     future cash payment based on the value of such stock or 
     appreciation in such value.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     this subsection.''.
       (b) Coordination With Section 4975(e)(7).--The last 
     sentence of section 4975(e)(7) (defining employee stock 
     ownership plan) is amended by inserting ``, section 409(p),'' 
     after ``409(n)''.
       (c) Excise Tax.--
       (1) Application of tax.--Subsection (a) of section 4979A 
     (relating to tax on certain prohibited allocations of 
     employer securities) is amended--
       (A) by striking ``or'' at the end of paragraph (1), and
       (B) by striking all that follows paragraph (2) and 
     inserting the following:
       ``(3) there is any allocation of employer securities which 
     violates the provisions of section 409(p), or a nonallocation 
     year described in subsection (e)(2)(C) with respect to an 
     employee stock ownership plan, or
       ``(4) any synthetic equity is owned by a disqualified 
     person in any nonallocation year,
     there is hereby imposed a tax on such allocation or ownership 
     equal to 50 percent of the amount involved.''.
       (2) Liability.--Section 4979A(c) (defining liability for 
     tax) is amended to read as follows:
       ``(c) Liability for Tax.--The tax imposed by this section 
     shall be paid--
       ``(1) in the case of an allocation referred to in paragraph 
     (1) or (2) of subsection (a), by--
       ``(A) the employer sponsoring such plan, or
       ``(B) the eligible worker-owned cooperative,

     which made the written statement described in section 
     664(g)(1)(E) or in section 1042(b)(3)(B) (as the case may 
     be), and

[[Page H7791]]

       ``(2) in the case of an allocation or ownership referred to 
     in paragraph (3) or (4) of subsection (a), by the S 
     corporation the stock in which was so allocated or owned.''.
       (3) Definitions.--Section 4979A(e) (relating to 
     definitions) is amended to read as follows:
       ``(e) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Definitions.--Except as provided in paragraph (2), 
     terms used in this section have the same respective meanings 
     as when used in sections 409 and 4978.
       ``(2) Special rules relating to tax imposed by reason of 
     paragraph (3) or (4) of subsection (a).--
       ``(A) Prohibited allocations.--The amount involved with 
     respect to any tax imposed by reason of subsection (a)(3) is 
     the amount allocated to the account of any person in 
     violation of section 409(p)(1).
       ``(B) Synthetic equity.--The amount involved with respect 
     to any tax imposed by reason of subsection (a)(4) is the 
     value of the shares on which the synthetic equity is based.
       ``(C) Special rule during first nonallocation year.--For 
     purposes of subparagraph (A), the amount involved for the 
     first nonallocation year of any employee stock ownership plan 
     shall be determined by taking into account the total value of 
     all the deemed-owned shares of all disqualified persons with 
     respect to such plan.
       ``(D) Statute of limitations.--The statutory period for the 
     assessment of any tax imposed by this section by reason of 
     paragraph (3) or (4) of subsection (a) shall not expire 
     before the date which is 3 years from the later of--
       ``(i) the allocation or ownership referred to in such 
     paragraph giving rise to such tax, or
       ``(ii) the date on which the Secretary is notified of such 
     allocation or ownership.''.
       (d) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     apply to plan years beginning after December 31, 2001.
       (2) Exception for certain plans.--In the case of any--
       (A) employee stock ownership plan established after July 
     11, 2000, or
       (B) employee stock ownership plan established on or before 
     such date if employer securities held by the plan consist of 
     stock in a corporation with respect to which an election 
     under section 1362(a) of the Internal Revenue Code of 1986 is 
     not in effect on such date,

     the amendments made by this section shall apply to plan years 
     ending after July 11, 2000.

                 TITLE XVI--REDUCING REGULATORY BURDENS

     SEC. 1601. MODIFICATION OF TIMING OF PLAN VALUATIONS.

       (a) In General.--Paragraph (9) of section 412(c)(9) 
     (relating to annual valuation) is amended to read as follows:
       ``(9) Annual valuation.--
       ``(A) In general.--For purposes of this section, a 
     determination of experience gains and losses and a valuation 
     of the plan's liability shall be made not less frequently 
     than once every year, except that such determination shall be 
     made more frequently to the extent required in particular 
     cases under regulations prescribed by the Secretary.
       ``(B) Valuation date.--
       ``(i) Current year.--Except as provided in clause (ii), the 
     valuation referred to in subparagraph (A) shall be made as of 
     a date within the plan year to which the valuation refers or 
     within one month prior to the beginning of such year.
       ``(ii) Election to use prior year valuation.--The valuation 
     referred to in subparagraph (A) may be made as of a date 
     within the plan year prior to the year to which the valuation 
     refers if--

       ``(I) an election is in effect under this clause with 
     respect to the plan, and
       ``(II) as of such date, the value of the assets of the plan 
     are not less than 125 percent of the plan's current liability 
     (as defined in paragraph (7)(B)).

       ``(iii) Adjustments.--Information under clause (ii) shall, 
     in accordance with regulations, be actuarially adjusted to 
     reflect significant differences in participants.
       ``(iv) Election.--An election under clause (ii), once made, 
     shall be irrevocable without the consent of the Secretary.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2000.

     SEC. 1602. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT LOSS OF 
                   DIVIDEND DEDUCTION.

       (a) In General.--Section 404(k)(2)(A) (defining applicable 
     dividends) is amended by striking ``or'' at the end of clause 
     (ii), by redesignating clause (iii) as clause (iv), and by 
     inserting after clause (ii) the following new clause:
       ``(iii) is, at the election of such participants or their 
     beneficiaries--

       ``(I) payable as provided in clause (i) or (ii), or
       ``(II) paid to the plan and reinvested in qualifying 
     employer securities, or''.

       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 1603. REPEAL OF TRANSITION RULE RELATING TO CERTAIN 
                   HIGHLY COMPENSATED EMPLOYEES.

       (a) In General.--Paragraph (4) of section 1114(c) of the 
     Tax Reform Act of 1986 is hereby repealed.
       (b) Effective Date.--The repeal made by subsection (a) 
     shall apply to plan years beginning after December 31, 2000.

     SEC. 1604. EMPLOYEES OF TAX-EXEMPT ENTITIES.

       (a) In General.--The Secretary of the Treasury shall modify 
     Treasury Regulations section 1.410(b)-6(g) to provide that 
     employees of an organization described in section 
     403(b)(1)(A)(i) of the Internal Revenue Code of 1986 who are 
     eligible to make contributions under section 403(b) of such 
     Code pursuant to a salary reduction agreement may be treated 
     as excludable with respect to a plan under section 401(k) or 
     (m) of such Code that is provided under the same general 
     arrangement as a plan under such section 401(k), if--
       (1) no employee of an organization described in section 
     403(b)(1)(A)(i) of such Code is eligible to participate in 
     such section 401(k) plan or section 401(m) plan; and
       (2) 95 percent of the employees who are not employees of an 
     organization described in section 403(b)(1)(A)(i) of such 
     Code are eligible to participate in such plan under such 
     section 401(k) or (m).
       (b) Effective Date.--The modification required by 
     subsection (a) shall apply as of the same date set forth in 
     section 1426(b) of the Small Business Job Protection Act of 
     1996.

     SEC. 1605. CLARIFICATION OF TREATMENT OF EMPLOYER-PROVIDED 
                   RETIREMENT ADVICE.

       (a) In General.--Subsection (a) of section 132 (relating to 
     exclusion from gross income) is amended by striking ``or'' at 
     the end of paragraph (5), by striking the period at the end 
     of paragraph (6) and inserting ``, or'', and by adding at the 
     end the following new paragraph:
       ``(7) qualified retirement planning services.''.
       (b) Qualified Retirement Planning Services Defined.--
     Section 132 is amended by redesignating subsection (m) as 
     subsection (n) and by inserting after subsection (l) the 
     following:
       ``(m) Qualified Retirement Planning Services.--
       ``(1) In general.--For purposes of this section, the term 
     `qualified retirement planning services' means any retirement 
     planning service provided to an employee and his spouse by an 
     employer maintaining a qualified employer plan.
       ``(2) Nondiscrimination rule.--Subsection (a)(7) shall 
     apply in the case of highly compensated employees only if 
     such services are available on substantially the same terms 
     to each member of the group of employees normally provided 
     education and information regarding the employer's qualified 
     employer plan.
       ``(3) Qualified employer plan.--For purposes of this 
     subsection, the term `qualified employer plan' means a plan, 
     contract, pension, or account described in section 
     219(g)(5).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1606. REPORTING SIMPLIFICATION.

       (a) Simplified Annual Filing Requirement for Owners and 
     Their Spouses.--
       (1) In general.--The Secretary of the Treasury shall modify 
     the requirements for filing annual returns with respect to 
     one-participant retirement plans to ensure that such plans 
     with assets of $250,000 or less as of the close of the plan 
     year need not file a return for that year.
       (2) One-participant retirement plan defined.--For purposes 
     of this subsection, the term ``one-participant retirement 
     plan'' means a retirement plan that--
       (A) on the first day of the plan year--
       (i) covered only the employer (and the employer's spouse) 
     and the employer owned the entire business (whether or not 
     incorporated); or
       (ii) covered only one or more partners (and their spouses) 
     in a business partnership (including partners in an S or C 
     corporation);
       (B) meets the minimum coverage requirements of section 
     410(b) of the Internal Revenue Code of 1986 without being 
     combined with any other plan of the business that covers the 
     employees of the business;
       (C) does not provide benefits to anyone except the employer 
     (and the employer's spouse) or the partners (and their 
     spouses);
       (D) does not cover a business that is a member of an 
     affiliated service group, a controlled group of corporations, 
     or a group of businesses under common control; and
       (E) does not cover a business that leases employees.
       (3) Other definitions.--Terms used in paragraph (2) which 
     are also used in section 414 of the Internal Revenue Code of 
     1986 shall have the respective meanings given such terms by 
     such section.
       (b) Simplified Annual Filing Requirement for Plans With 
     Fewer Than 25 Employees.--In the case of a retirement plan 
     which covers less than 25 employees on the first day of the 
     plan year and meets the requirements described in 
     subparagraphs (B), (D), and (E) of subsection (a)(2), the 
     Secretary of the Treasury shall provide for the filing of a 
     simplified annual return that is substantially similar to the 
     annual return required to be filed by a one-participant 
     retirement plan.
       (c) Effective Date.--The provisions of this section shall 
     take effect on January 1, 2001.

     SEC. 1607. IMPROVEMENT OF EMPLOYEE PLANS COMPLIANCE 
                   RESOLUTION SYSTEM.

       The Secretary of the Treasury shall continue to update and 
     improve the Employee Plans Compliance Resolution System (or 
     any successor program) giving special attention to--
       (1) increasing the awareness and knowledge of small 
     employers concerning the availability and use of the program;

[[Page H7792]]

       (2) taking into account special concerns and circumstances 
     that small employers face with respect to compliance and 
     correction of compliance failures;
       (3) extending the duration of the self-correction period 
     under the Administrative Policy Regarding Self-Correction for 
     significant compliance failures;
       (4) expanding the availability to correct insignificant 
     compliance failures under the Administrative Policy Regarding 
     Self-Correction during audit; and
       (5) assuring that any tax, penalty, or sanction that is 
     imposed by reason of a compliance failure is not excessive 
     and bears a reasonable relationship to the nature, extent, 
     and severity of the failure.

     SEC. 1608. REPEAL OF THE MULTIPLE USE TEST.

       (a) In General.--Paragraph (9) of section 401(m) is amended 
     to read as follows:
       ``(9) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out the purposes of 
     this subsection and subsection (k), including regulations 
     permitting appropriate aggregation of plans and 
     contributions.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1609. FLEXIBILITY IN NONDISCRIMINATION, COVERAGE, AND 
                   LINE OF BUSINESS RULES.

       (a) Nondiscrimination.--
       (1) In general.--The Secretary of the Treasury shall, by 
     regulation, provide that a plan shall be deemed to satisfy 
     the requirements of section 401(a)(4) of the Internal Revenue 
     Code of 1986 if such plan satisfies the facts and 
     circumstances test under section 401(a)(4) of such Code, as 
     in effect before January 1, 1994, but only if--
       (A) the plan satisfies conditions prescribed by the 
     Secretary to appropriately limit the availability of such 
     test; and
       (B) the plan is submitted to the Secretary for a 
     determination of whether it satisfies such test.
     Subparagraph (B) shall only apply to the extent provided by 
     the Secretary.
       (2) Effective dates.--
       (A) Regulations.--The regulation required by paragraph (1) 
     shall apply to years beginning after December 31, 2000.
       (B) Conditions of availability.--Any condition of 
     availability prescribed by the Secretary under paragraph 
     (1)(A) shall not apply before the first year beginning not 
     less than 120 days after the date on which such condition is 
     prescribed.
       (b) Coverage Test.--
       (1) In general.--Section 410(b)(1) (relating to minimum 
     coverage requirements) is amended by adding at the end the 
     following:
       ``(D) In the case that the plan fails to meet the 
     requirements of subparagraphs (A), (B) and (C), the plan--
       ``(i) satisfies subparagraph (B), as in effect immediately 
     before the enactment of the Tax Reform Act of 1986,
       ``(ii) is submitted to the Secretary for a determination of 
     whether it satisfies the requirement described in clause (i), 
     and
       ``(iii) satisfies conditions prescribed by the Secretary by 
     regulation that appropriately limit the availability of this 
     subparagraph.

     Clause (ii) shall apply only to the extent provided by the 
     Secretary.''.
       (2) Effective dates.--
       (A) In general.--The amendment made by paragraph (1) shall 
     apply to years beginning after December 31, 2000.
       (B) Conditions of availability.--Any condition of 
     availability prescribed by the Secretary under regulations 
     prescribed by the Secretary under section 410(b)(1)(D) of the 
     Internal Revenue Code of 1986 shall not apply before the 
     first year beginning not less than 120 days after the date on 
     which such condition is prescribed.
       (c) Line of Business Rules.--The Secretary of the Treasury 
     shall, on or before December 31, 2000, modify the existing 
     regulations issued under section 414(r) of the Internal 
     Revenue Code of 1986 in order to expand (to the extent that 
     the Secretary determines appropriate) the ability of a 
     pension plan to demonstrate compliance with the line of 
     business requirements based upon the facts and circumstances 
     surrounding the design and operation of the plan, even though 
     the plan is unable to satisfy the mechanical tests currently 
     used to determine compliance.

     SEC. 1610. EXTENSION TO ALL GOVERNMENTAL PLANS OF MORATORIUM 
                   ON APPLICATION OF CERTAIN NONDISCRIMINATION 
                   RULES APPLICABLE TO STATE AND LOCAL PLANS.

       (a) In General.--
       (1) Subparagraph (G) of section 401(a)(5) and subparagraph 
     (H) of section 401(a)(26) are each amended by striking 
     ``section 414(d))'' and all that follows and inserting 
     ``section 414(d)).''.
       (2) Subparagraph (G) of section 401(k)(3) and paragraph (2) 
     of section 1505(d) of the Taxpayer Relief Act of 1997 are 
     each amended by striking ``maintained by a State or local 
     government or political subdivision thereof (or agency or 
     instrumentality thereof)''.
       (b) Conforming Amendments.--
       (1) The heading for subparagraph (G) of section 401(a)(5) 
     is amended to read as follows: ``Governmental plans''.
       (2) The heading for subparagraph (H) of section 401(a)(26) 
     is amended to read as follows: ``Exception for governmental 
     plans''.
       (3) Subparagraph (G) of section 401(k)(3) is amended by 
     inserting ``Governmental plans.--'' after ``(G)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2000.

     SEC. 1611. NOTICE AND CONSENT PERIOD REGARDING DISTRIBUTIONS.

       (a) Expansion of Period.--
       (1) In general.--Subparagraph (A) of section 417(a)(6) is 
     amended by striking ``90-day'' and inserting ``180-day''.
       (2) Modification of regulations.--The Secretary of the 
     Treasury shall modify the regulations under sections 402(f), 
     411(a)(11), and 417 of the Internal Revenue Code of 1986 to 
     substitute ``180 days'' for ``90 days'' each place it appears 
     in Treasury Regulations sections 1.402(f)-1, 1.411(a)-11(c), 
     and 1.417(e)-1(b).
       (3) Effective date.--The amendment made by paragraph (1) 
     and the modifications required by paragraph (2) shall apply 
     to years beginning after December 31, 2000.
       (b) Consent Regulation Inapplicable to Certain 
     Distributions.--
       (1) In general.--The Secretary of the Treasury shall modify 
     the regulations under section 411(a)(11) of the Internal 
     Revenue Code of 1986 to provide that the description of a 
     participant's right, if any, to defer receipt of a 
     distribution shall also describe the consequences of failing 
     to defer such receipt.
       (2) Effective date.--The modifications required by 
     paragraph (1) shall apply to years beginning after December 
     31, 2000.

                      TITLE XVII--PLAN AMENDMENTS

     SEC. 1701. PROVISIONS RELATING TO PLAN AMENDMENTS.

       (a) In General.--If this section applies to any plan or 
     contract amendment--
       (1) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan during the 
     period described in subsection (b)(2)(A); and
       (2) such plan shall not fail to meet the requirements of 
     section 411(d)(6) of the Internal Revenue Code of 1986 by 
     reason of such amendment.
       (b) Amendments to Which Section Applies.--
       (1) In general.--This section shall apply to any amendment 
     to any plan or annuity contract which is made--
       (A) pursuant to any amendment made by this Act, or pursuant 
     to any regulation issued under this Act, and
       (B) on or before the last day of the first plan year 
     beginning on or after January 1, 2003.

     In the case of a governmental plan (as defined in section 
     414(d) of the Internal Revenue Code of 1986), this paragraph 
     shall be applied by substituting ``2005'' for ``2003''.
       (2) Conditions.--This section shall not apply to any 
     amendment unless--
       (A) during the period--
       (i) beginning on the date the legislative or regulatory 
     amendment described in paragraph (1)(A) takes effect (or in 
     the case of a plan or contract amendment not required by such 
     legislative or regulatory amendment, the effective date 
     specified by the plan); and
       (ii) ending on the date described in paragraph (1)(B) (or, 
     if earlier, the date the plan or contract amendment is 
     adopted),
     the plan or contract is operated as if such plan or contract 
     amendment were in effect; and
       (B) such plan or contract amendment applies retroactively 
     for such period.


                         Parliamentary Inquiry

  Mr. RANGEL. Mr. Speaker, a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. RANGEL. Mr. Speaker, is it within the rules of this House under 
the suspension of the rules that we can bring legislation before us 
that has already passed the House of Representatives?
  We have two bills that have already passed the House and now they are 
coming back. Is it within the rules of the House that we can repass 
same bills, the same form without any changes?
  The SPEAKER pro tempore. Under suspension of the rules, there is no 
prohibition against that.
  Mr. RANGEL. No prohibition?
  The SPEAKER pro tempore. Under the rules of the House, there is no 
prohibition.
  Mr. RANGEL. Okay, Mr. Speaker, I withdraw my parliamentary inquiry.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida (Mr. Shaw) and the gentleman from New York (Mr. Rangel) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Shaw).


                             General Leave

  Mr. SHAW. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on H.R. 5203.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. SHAW. Mr. Speaker, I yield myself such time as I may consume.

[[Page H7793]]

  Mr. Speaker, I think perhaps my statement might very well clarify 
things for my friend, the gentleman from New York (Mr. Rangel). One may 
ask why we are bringing up and voting on a bill that includes the 
legislation which so overwhelmingly passed this House yesterday under 
suspension of the rules by a vote of 381 to 3, along with the popular 
pension reform legislation which earlier passed by a vote of 401 to 25 
and had at least 181 cosponsors including 81 House Democrats.
  At a time when Washington reporters like to talk about partisan 
maneuvering at the end of a season to get Members out of town and back 
home to their districts, I would like to point out how hard the 
sponsors of this bill are working, including the Democrats and 
Republicans alike, the gentleman from Maryland (Mr. Cardin), the 
gentleman from Ohio (Mr. Portman), the gentleman from California (Mr. 
Herger), and the gentleman from Kentucky (Mr. Fletcher), we are working 
towards bipartisan solutions to important issues on which we agree.
  We are delivering this to the American people in these closing days 
of this session of this Congress, but the reason we are taking a series 
of votes on the same or similar legislation is it that we need to be 
sure that some form of these important solutions get passed by the 
other Chamber and get signed into law by the President.
  Mr. Speaker, I know that a lot of negotiations are going on along 
Pennsylvania Avenue on a variety of issues, but we are producing 
results on these items that are most important to the people, the 
people that I represent in the State of Florida; protecting Social 
Security and Medicare, protecting and enhancing their retirement 
security, and protecting our hard-earned money from wasteful Washington 
spenders.
  Make no mistake, over the last 6 years, the Republicans have done 
most of the heavy lifting in cutting wasteful Washington spending and 
bringing the budget into balance. Now, that there is a surplus, 
Republicans have begun the process of responsibly paying down the 
national debt, while protecting Social Security and Medicare and 
keeping our economy strong so that future generations of Americans 
inherit a Nation that is free of debt with a healthy thriving economy.
  In accomplishing this major feat, which less than a decade ago, 
seemed impossible, Republicans have adhered to some basic principles 
which continue to guide us as we prepare to address the challenges 
ahead of us, and that is saving Social Security and Medicare for future 
generations.
  These are our basic principles, one, payroll taxes belong to the 
people who pay into the system, not to the government. Two, the best 
way to keep Washington from spending more is to take surplus cash off 
the table and store it in a lockbox that can only be used for Social 
Security, Medicare or debt reduction. Three, long-term overpayments by 
taxpayers should be given back to taxpayers in the form of tax relief 
not co-opted by those in Washington who want to spend more.
  So it is logical that as we try to keep our economy strong and keep 
hard-earned dollars in the hands of the wage earners of this country, 
we focus on pension reform and other components of this goal. 
Increasing the savings stimulates the economic growth, reducing the 
government's take on a person's savings and earnings encourages people 
to save, leaving them more of their savings to keep them through their 
retirement years.

                              {time}  1415

  It is no wonder why both these bills are so popular. The question is, 
why are we having trouble getting similar legislation moved through the 
other Chamber and on to the President's desk? These are the specific 
reasons we are bringing up this bill today.
  First, we want to try again to break the logjam in the other body on 
moving forward with the Social Security and Medicare lockbox. 
Republicans have been pushing for this legislation since early last 
year but have been stonewalled by the minority. Everyone from the 
President to the Vice President says they want this but the minority in 
the other body continues to block its consideration.
  We hope that they are not part of some larger political game; that 
they will finally agree to the lockbox and get this bill signed into 
law.
  Second, Republicans want to set aside $42 billion of the FY 2001 
surplus right now for debt relief so that those funds cannot be spent 
on more government programs. We should not use the surplus to make 
government bigger; we should use it to make the national debt smaller.
  We would invite the President and our colleagues in the other body to 
join us in this historic effort to use 90 percent of the surplus for 
debt relief.
  Here is what our lockbox does, and, again, it is identical to the 
legislation that we have previously passed: one, it sets aside $240 
billion for debt reduction for FY 2001 alone. That is 90 percent of the 
entire surplus in FY 2001 dedicated to paying down the publicly held 
debt and putting us on to the path of eliminating the debt by the year 
2012 or perhaps even sooner. It sets aside 100 percent of the Social 
Security surplus to pay down the debt until we pass legislation that 
actually saves Social Security. That is $165 billion of debt reduction 
in fiscal year 2001 and $2.4 trillion over the next 10 years; $2.4 
trillion.
  It sets aside 100 percent of the Medicare surplus to pay down the 
debt until we pass legislation that saves Medicare. That is another $32 
billion of debt reduction in fiscal year 2001, and another $360 billion 
over the next 10 years. It sets aside an additional $42 billion of the 
non-Social Security and non-Medicare surplus for debt reduction. An 
additional $42 billion of the on-budget surplus would be set aside for 
debt reduction in a special account in Treasury.
  The bill is good for millions of Americans, especially working women 
who have no pension or have inadequate pension coverage today. As we 
will hear from other speakers today describe in even more detail, we 
raise the limit of IRAs from $2,000 to $5,000. As we all know, the IRAs 
are one of the most popular and successful programs ever conceived. As 
inflation has caught up with the value of the original amount people 
can set aside, that is $1,500 in 1974 raised to $2,000 in 1981, it 
makes sense to allow people to do more to save for retirement.
  Our bill similarly updates 401(k) amounts and improves portability so 
one can take their retirement nest egg with them when they move from 
job to job, which is even a greater incentive for younger Americans to 
start planning for their future earlier.
  Only half of all private sector workers have any kind of pension and 
only 20 percent of small business offer retirement plans. So the 
ability to design an individual program and carry their savings with 
them is as important as our effort to protect pension plans from the 
burdens of overtaxation. But do not forget, every single individual in 
this country stands to benefit from this bill because we will be 
protecting future generations from debt. We will be making retirement 
savings grow for workers of all ages, and we will be helping keep hard-
earned dollars in the hands of taxpayers rather than sending them to 
Washington.
  When given the choice to put dollars in the hands of Washington or 
keeping them in the pockets of people living in Florida, I would choose 
to trust my constituents any day.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, my friend, the gentleman from Florida (Mr. Shaw), and he 
is my friend, has spent a lot of time talking about the merits of these 
two bills that are before the House on the suspension calendar. 
Throughout his support, he mentions Republicans a half a dozen times, 
which I can understand, it is that time of the year and he needs all 
the help he can get. My problem is, he would have us to believe that 
these two bills that passed this House overwhelmingly in a bipartisan 
way is just not enough to move his Republican leaders on the other side 
of this building. And so if this is so, then we will be using the 
suspension calendar for everything that we do not like the progress of 
a piece of legislation to move Republicans that are not in this 
Chamber, which I think is an abuse of the privilege of the suspension 
calendar. But that is a political matter.
  What I am concerned about, as a member of the Committee on Ways and 
Means, is that there is a lot of talk about this new bill, H.R. 5203, 
being the

[[Page H7794]]

same as the House-passed bill, H.R. 5173. Since the new bill is still 
warm in my hand as it comes off the press, and we saw it at noontime, 
there may be a similarity in substance; but there is a heck of a lot of 
difference in terms of language. There are changes in this bill that 
may be technical, but there are 135 lines of the new bill that is 
shorter than what we had in the old bill.
  Now, I know that some Republican expert decided which was good and 
which was bad, and the gentleman has a lot of time left, and I know he 
will explain why we do have at least in terms of numbers and pages a 
different bill. But another thing bothers me and that is if we do have 
a very important piece of legislation and they both concern the 
Committee on Ways and Means, and we did have an amendment to the bill 
when it was in the House that would allow lower-income people to have 
incentives for savings, why would not this bill, if it had to be 
revisited, why would it bypass the Committee on Ways and Means? Why 
would we have something that we have not even had our staffs to read, 
since it has just been out a couple of hours? Why do we have this 
urgency to get this thing done with such speed, in view of the fact 
that our committee has no work before it?
  We do not get a chance to have a motion to recommit on the suspension 
calendar. We do not have a chance to see whether we can improve this 
bill. It is not the identical bill that we passed here before. The 
staff knows that. I am just saying that when one takes popular ideas 
and believe that each time they find us supporting something they can 
call it bipartisan, that it has to keep on getting passed, it is not 
right.
  Democrats have worked with my colleagues on the other side of the 
aisle on the legislation, and we still think that it can be improved; 
but since they have given up on tax cuts and have moved swiftly to 
budget gimmicks, I thought we had really done all that we could the 
last time this thing came up, where we are now doing by legislation 
what President Clinton has been doing by making certain the Federal 
debt is being paid down.
  I do not know how far we have to go with this type of procedures on 
the floor. Democratic support was gotten before. Democratic support has 
to be gotten now. Since the parliamentarians indicated that this can be 
brought up as often as the other side wants on the suspension calendar, 
maybe we will have other bills that we have joined together in passing. 
I might suggest, though, being in the minority, one of the ways that 
action might be gotten from the other body is for Republicans here to 
talk to Republicans there.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHAW. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to say to my friend, the gentleman from New 
York (Mr. Rangel), he has known me long enough to know that I am a man 
of my word; and I can assure him that these bills are exactly what the 
gentleman has already supported in the committee and that he has 
already supported on the floor.
  I think the gentleman knows that when we get into the closing days, 
perhaps he knows better than I do, the negotiations that are going on. 
Two bills as important as these bills are, to merge them together, 
gives us just another option in which to get these matters before the 
Senate, to the conference, and to the President's desk for signature.
  Mr. Speaker, I yield 4 minutes to the gentleman from Ohio (Mr. 
Portman), the author of the pension portion of this bill.
  (Mr. PORTMAN asked and was given permission to revise and extend his 
remarks.)
  Mr. PORTMAN. Mr. Speaker, I thank the chairman, the gentleman from 
Florida (Mr. Shaw), very much for yielding me this time; and I thank 
him for bringing this bill, H.R. 5203, to the floor today.
  It is the Debt Relief and Retirement Security Reconciliation Act of 
2000, and it is designed to give reconciliation protection to 
legislation we have already passed for the purpose of negotiating with 
the Senate to move this process forward and to get these bills enacted 
this year.
  The first is the debt lockbox legislation that puts 90 percent of 
this year's budget surplus projected for 2001 into debt relief, and 
then second of course is the bipartisan retirement security legislation 
that we have passed in this House by a vote of 401 to 25, which expands 
and strengthens IRAs, 401(k)s and other pensions.
  I would like to focus, if I could, this afternoon on the retirement 
security package that is before us. This is bipartisan legislation that 
my friend and colleague, the gentleman from Maryland (Mr. Cardin), and 
I have worked on over the last 3 years. It is very important. It is 
very important we get it enacted and do so this year. We need to do all 
we can because there is a real retirement security crunch out there. 
Seventy million Americans, about half the workforce, do not have any 
kind of a pension at all today, not even a 401(k), nothing. The problem 
is even worse among small businesses. We are told that less than 20 
percent of small businesses, Mr. Speaker, that is with businesses of 25 
or fewer employees, offer any kind of pension coverage today.
  Now, this is at a time when private savings in this country is 
dangerously low. In fact, last month we are told that our savings rate 
in this country was actually negative. This, of course, hurts our 
economy. It presents a real danger to our economy moving forward, but 
it also hurts people; it hurts individuals. Experts tell us that older 
baby-boomers, for instance, have put only 40 percent aside of what they 
will need for a financially secure retirement. So it is time to take 
action, and it is time to do it now.
  Part of the problem we have had over the years is right here in 
Congress. Over the last 20 years, Congress has made pensions less 
generous by lowering the contribution of benefit levels, believe it or 
not, and while making pension benefits lower they have also made 
pensions more costly to offer by increasing the number of rules and 
regulations on employers.
  Let me say what kind of impact that has had. Let me give a specific 
example. From 1982 to 1994, the limits on defined benefit plans were 
repeatedly reduced by Congress and new restrictions were added, 
primarily for the purpose of generating Federal revenue, by the way. 
This was not a policy decision that had to do with pensions. It had to 
do with at that time addressing the deficit. As these cutback from 1982 
to 1994 took effect, the number of traditional defined benefit plans 
insured by PBGC dropped from 114,000 plans in 1987 to 45,000 plans in 
1997. These are the facts. They speak for themselves.
  During the past 2 decades, overall pension coverage has remained 
stagnant, even when the defined contribution side is included. 
Obviously, it is past time for Congress to reverse these trends, and 
the bill before us today does just that. It is a comprehensive 
approach. It has been developed over the last 3 years with careful 
consultation with small businesses, labor organizations like the 
building trades department of the AFL-CIO. It has also been worked on 
by pension law experts in the private sector, academia and the 
administration. Most importantly, we have looked to and taken the 
advice of workers themselves, folks who are in pension plans, to see 
how they could be improved. They have been fully vetted. About 200 
Members of this House, almost equally divided between Republicans and 
Democrats, have cosponsored the bill and more than 85 outside groups 
have endorsed it. The approach is fiscally responsible, and it is very 
straightforward.
  It falls in basically three categories. First, we allow all workers 
to set aside more money for their retirement. That means setting aside 
more money in a 401(k)-type plan, in a union, multiemployer-type plan, 
a defined benefit plan and all other pensions. It also means setting 
more money aside in an IRA. In most cases, very importantly, all we are 
doing is trying to restore those limits to where they were before the 
Congress reduced them.
  For example, moving the IRA contribution levels from $2,000 to $5,000 
is about where it would have been had it been indexed to inflation in 
the 1970s. We also allow special catch-up contributions that help 
workers over 50 set aside even more for retirement.
  These accelerated contributions will allow older workers--especially 
women returning to the workforce--the opportunity to build up a 
retirement nest egg more quickly--at a time in

[[Page H7795]]

their lives when their earnings are relatively high and when they most 
need to save for retirement.
  Second, we're modernizing pension laws to adapt to what we've learned 
about the realities of an increasingly mobile workforce. So, we make 
defined contributions plans portable so workers can roll-over their 
retirement nest egg between various types of qualified plans--including 
401(k), 403(b) and 457 plans. And, we require employers to allow 
workers to become vested in their pension plans more quickly--in 3 
years rather than the current-law 5.
  Finally, we listened to those in the trenches, and we responded to 
the surveys that clearly demonstrate that we must reduce the 
complexities and red tape in current law if we are going to expand 
pension opportunities for those who work for small businesses. That's 
why we make it easier for employers--particularly small businesses--to 
establish and maintain pension plans by reducing costs and 
liabilities--including modernizing outdated laws and streamlining 
complex rules. Yet, we keep in place the important protections that 
ensure families fairness in our pension system.
  Despite the overwhelming and broad-based support for this 
legislation, there are some in the Administration who call this package 
a ``tax cut for the rich.'' That's wrong. Why should they tell working 
Americans--who are struggling to save for retirement--that the $2,000 
limit on IRA contributions established in 1981 makes sense today? Why 
should they tell working Americans that they can save less in a 401(k) 
plan than they could in the 1980s?
  Remember who benefits here--77 percent of American workers currently 
participating in a pension plan make less than $50,000 per year. By 
expanding retirement savings options, we'll be helping those workers 
who need the most help in saving for retirement.
  I urge my colleagues to join us today in sending a strong bipartisan 
message to the Senate--and to the White House--that we are committed to 
helping all Americans have more peace of mind--and more financial 
security--in their retirement years. Let's pass this package again.

                              {time}  1430

  Mr. RANGEL. Mr. Speaker, I yield 4 minutes to the gentleman from 
Washington (Mr. McDermott), a member of the Committee on Ways and Means 
and a member of the Committee on the Budget.
  Mr. McDERMOTT. Mr. Speaker, coming over here today, having been over 
here yesterday when half of this bill passed the last time, I could not 
help thinking of what, I think it was Groucho Marx said, that if you 
are going to go into politics, the first thing you have to learn to do 
is to act sincere. Because if we are going to come out here with this 
kind of legislation, we really have to work pretty hard to keep a 
straight face.
  Yesterday we passed the bill on this lockbox on debt repayment, which 
is a totally useless piece of legislation. It is not necessary; the 
debt is being paid down without any such process now. But it was a 
pretty good press release yesterday. So they thought, well, let us do 
it again tomorrow. Since we are not doing anything worthwhile anyway, 
we might as well have something to put into our press release machine 
to fire out at the newspapers all over the country, and that is a good 
one, and oh, yeah, there is that pension thing, we can pass that too. 
Why do we not staple those bills together, because it will be 
different. They cannot say we are bringing out the same bill as we 
brought out yesterday; we are bringing out the same bill yesterday, 
plus the same bill from July 19.
  Now, you say, why do we pick July 19? Well, we think about it and we 
say to ourselves, they must be bringing out the July 19 bill because 
they did it in the middle of the summer and people have forgotten about 
it, and today we are 49 days from election and we have to be sure and 
remind the people of the good legislation we passed that the majority 
in the other body killed, so we do not get blamed for it.
  Mr. Speaker, the real irony of this thing is we have the majority 
party in the House who cannot seem to get the majority party in the 
other body to pay attention to them. We fire this nonsense over there 
and they put it in a desk drawer and it never sees the light of day 
again. This is an intra-party fight inside the majority party. That is 
why we will probably be out here tomorrow with the debt reduction bill 
and, let us see, we could marry it up to the estate tax removal. That 
would be a good one to put out here. Then, on Thursday we can bring out 
the debt reduction bill and the marriage tax penalty bill. Now, let me 
think. I will sit down over here and come up with the list for next 
week. Because we have not passed the appropriation acts, we have not 
had any conference committees on the budget, so we have to come out 
here and do these little shows.
  Now, I think the American people are smarter than some people in this 
place give them credit for. They will see this; they are not going to 
forget that yesterday they read about the debt reduction bill and they 
are going to think they got the same paper 2 days in a row. Right there 
on the front pages, Republicans plan to spend 90 percent of the money 
in the surplus on paying down the debt. They cannot do it, because they 
already passed enough tax breaks to use up 22 percent; they cannot use 
90 percent and 22 percent. If we add 90 and 22, that makes 112 percent 
of the surplus.
  Now, I am not quite sure who teaches math over in the other caucus, 
but they need a new calculator, because it does not work. But, with a 
very straight face and acting very sincere, people stand down here and 
tell us that we can do it. I suppose if one believes that, one could 
believe in buying the Brooklyn Bridge or a whole lot of other things.
  The only things we have passed here in the last few days has been 
naming new bridges and new courthouses and new highways and this kind 
of stuff, part of which is legislative nonsense, and the other part is 
a decent bill. But the people are not going to be fooled by this press 
release.
  Mr. SHAW. Mr. Speaker, I yield myself such time as I may consume to 
remind the gentleman from Washington that in the other body, it is the 
other party that has been filibustering the lockbox legislation. 
Perhaps this will break something loose over there. It is very good 
bipartisan legislation in this body, but in the other body it has not 
worked that way.
  Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. 
Herger), the author of the lockbox legislation.
  Mr. HERGER. Mr. Speaker, I rise in strong support of this measure. 
This bill increases IRA contribution limits from $2,000 to $5,000, 
making it easier for Americans to save. This measure also includes two 
provisions I introduced, the Social Security lockbox, which passed the 
House last year by a 416-to-12 vote, and the Medicare lockbox, which I 
introduced in March and passed the House this June by a 420-to-2 vote.
  Mr. Speaker, for the first time, these lockboxes will protect 100 
percent of trust fund surpluses from spending on other unrelated 
government programs. Ending the raid on the Social Security and 
Medicare trust funds is the right thing to do. This legislation also 
creates another lockbox in which $42 billion additional surplus dollars 
will be held only for debt reduction. All in all, this legislation will 
use 90 percent, or $240 billion to pay down public debt this year 
alone. Never in the history of our Nation has a Congress paid down this 
much public debt in a single year.
  Today, we made debt reduction the priority, not the afterthought. 
This bill is the epitome of sound fiscal policy. For individual 
Americans, we increase opportunities to save; for the government's 
part, we protect the Social Security and Medicare trust funds for the 
first time from raids and still pay down $240 billion in public debt. 
This bill is a win-win for fiscal responsibility, a win-win for our 
children, a win-win for our seniors, and a win-win for the best 
interests of the United States. I urge my colleagues to vote for this 
measure.
  Mr. RANGEL. Mr. Speaker, I yield 4 minutes to the gentleman from 
Michigan (Mr. Levin), a senior member of the Committee on Ways and 
Means.
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Mr. Speaker, this session is descending into utter 
confusion, and if it is confusing here, we can imagine what the public 
thinks.
  The Republican majority here in the House has moved from pillar to 
post. First a $900 billion tax cut, much of it for the very wealthy, 
eating up a good portion of the nonSocial Security surplus. Well, that 
did not fly, so now we have a proposal, 90 percent of the surplus for 
debt retirement. So we go from $900 billion in an unworkable tax 
proposal to 90 percent of that surplus, that

[[Page H7796]]

would have been used up in large measure by the tax bill, now for debt 
retirement.
  Well, to add to the confusion, we now have this bill tied into 
another bill, and what could be the reason for it? The gentleman from 
Ohio talked about how it was necessary for budget reconciliation, he 
used those terms. Let me just read a statement on this point that we 
have worked on with the staff and I would like to have someone refute 
it if it is wrong.
  The debt reduction lockbox provisions in H.R. 5203 are in no way, 
shape or form a reconciliation bill in the Senate. The Senate had no 
budget reconciliation instructions for debt reduction. Among other 
things, the debt reduction provisions violate the Byrd Rule in the 
Senate and section 306 of the Budget Act which protects the 
jurisdiction of the budget committees. As such, a motion to proceed to 
consideration of such a bill under budget reconciliation rules could be 
filibustered in the Senate. What the House is doing is converting the 
House-passed pension IRA bill into a nonreconciliation bill for the 
Senate. So this bill is not only confusing, it is counterproductive.
  Well, what is the second reason given for combining these bills? It 
is said it is to get the attention of the Senate. How about e-mail or 
the telephone, or just walk across the rotunda and sit down with the 
majority leader in the Senate and we will be glad to join with the 
White House, and let us get busy and do some work and pass some 
legislation.
  What we are doing here is treading water while the session is 
sinking. It just does not make any sense, as the gentleman from New 
York (Mr. Rangel) said. We Democrats are ready to work. We are ready to 
move on. We are ready to pass legislation and not to add to an already 
confusing situation.
  Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentleman from Texas 
(Mr. DeLay).
  Mr. DeLAY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, it is not confusing. The Republicans are committed to 
empowering American families by returning power, money and choices to 
the people. We do not believe that the Federal budget surplus belongs 
to the government. It is the people's money, and it should be returned. 
They earned it.
  This is our constant and unchanging goal. That is why we proposed a 
firm commitment that applies at least 90 percent of next year's Federal 
budget surplus to paying off our debts. It turns out that a commitment 
to paying off the debt is a popular position. Last night, we forged a 
common sense coalition for debt relief. We drew support from both sides 
of the aisle. We believe that the surplus must be returned to the 
American people, if not through tax relief, then through debt 
reduction.
  Today, we take another important step. Members have another 
opportunity to send a very clear message to the White House. The 
American people demand greater fiscal discipline from their government. 
An unrestrained wave of new Washington spending is not an acceptable 
use for their surplus. Our latest initiative addresses this theme of 
fiscal discipline by both expanding retirement security and paying off 
the debt. We can again urge the President to join with us, but our 
expectations are pretty low.
  The President has already repeatedly blocked the bipartisan effort to 
return the surplus to the American people. Just last week he said, 
whether we can do debt reduction this year or not depends upon what the 
various spending commitments are. Less than 24 hours ago, this House 
voted overwhelmingly in favor of our debt reduction plan. Now every 
Member, Republican and Democrat, who voted for that initiative should 
support this common sense measure.
  Mr. President, we have room for you in our common sense coalition to 
refund the surplus, but you must first abandon any scheme to spend the 
surplus on more Washington programs. If you can commit to using at 
least 90 percent of next year's surplus to debt relief and only debt 
relief, we would like to have you with us.
  Mr. Speaker, members should support this bill. It will return power 
to the American people and strengthen our Nation.


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore. Members are reminded to address their 
remarks to the Chair.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  The majority whip has now confused me. I understood from the 
gentleman from Texas (Mr. Archer), the chairman of the Committee on 
Ways and Means, that we were relegislating this old legislation to send 
a message to the Republican leaders on the other side. However, now the 
majority whip wants to send a message to the President of the United 
States. This is really getting confusing. I mean have we given up all 
methods of communication completely? I know it is bad, but we do not 
have to legislate to talk to President Clinton. We can do these things 
directly. We can sit down today or tomorrow and work out how we can get 
some legislation passed and signed into law instead of getting out 
these press releases.
  The next speaker on this side is the coauthor of this bipartisan 
piece of legislation that overwhelmingly passed the House, and he 
worked closely with the gentleman from Ohio (Mr. Portman). I do not 
know how many times we are going to drag out the gentleman from Ohio 
(Mr. Portman) and the gentleman from Maryland (Mr. Cardin) here to show 
that some people do talk with each other on the House side, but I hope 
my Republican colleagues keep doing it until they get it right, because 
some of us have to get out of here and get back home.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Maryland (Mr. Cardin).
  Mr. CARDIN. Mr. Speaker, let me thank the gentleman from New York 
(Mr. Rangel) for yielding me this time. Let me assure our colleagues 
that there is strong bipartisan support for the provisions that are 
contained in this bill that is before us.

                              {time}  1445

  Many of us, including this Member, is confused on the process. I 
listened also to the distinguished majority whip explain what this bill 
is intended to do, and I do not believe that is included in the 
legislation before us. So I am confused on the process that we are 
using, but I hope it is an effort that will allow us to enact some very 
important legislation.
  I listened to the explanation on the lockbox, and I must tell my 
colleagues that I am confused on the explanation on the lockbox. As I 
understand, it is a 1-year bill. And we are going to be judged by our 
actions on the appropriation bills and on the tax bills, not on the 
lockbox. Let us be clear about that.
  I hope at the end of the day that we can say as Democrats and 
Republicans that we have put as our first priority retiring our debt, 
which is exactly what the President of the United States has asked us 
to do, to make the top priority the reduction of our debt with the 
surplus funds.
  Let me speak for a moment, if I might, about the pension legislation. 
The gentleman from New York (Mr. Rangel) is correct, this bill has been 
worked very carefully on a bipartisan basis. I thank my colleague, the 
gentleman from Ohio (Mr. Portman), for his leadership on this. 
Democrats and Republicans joined together in crafting this bill and in 
passing this bill by 401 votes. I would hope that by bringing it up 
again today it is a message that we intend to send to the President of 
the United States a bill that deals with pensions and is not loaded up 
with other issues that would make it impossible for us to get it 
enacted this year.
  As the gentleman from Ohio (Mr. Portman) has pointed out, it is 
important legislation because it is very comprehensive legislation that 
will not only increase the limits but will help employers provide 
employer-sponsored pension plans for their employees, which help lower-
wage workers because the employer puts the money on the table, making 
it easier for low-wage workers to put money away for their own 
retirement.
  We deal with portability and the realization that the current 
workforce holds people that will work for more than one employer in 
their work life, so they need to be able to combine their funds. We 
remove a lot of the obstacles that make it difficult for employers to 
sponsor pension plans. We make it easier for individuals to put more 
money away for themselves to address the critical need in this Nation 
to increase the savings rates.

[[Page H7797]]

  So I hope at the end of the day that we will be able to come together 
with a bill that is enacted and sent to the President. And if we can 
keep it to the pension issues alone, if we do not get confused with 
some of the other politics around here, I think we can achieve that.
  But I would urge my friends on the other side of the aisle to work 
with us on the process issues. It is somewhat confusing to us to wake 
up in the morning only to find legislation that we thought already was 
completed in this body has once again been brought up for initial 
action rather than being sent to the President for signature.
  Mr. SHAW. Mr. Speaker, I yield 1 minute to the gentleman from 
Michigan (Mr. Smith).
  Mr. SMITH of Michigan. Mr. Speaker, encouraging savings and 
investment and not leaving our kids and our grandkids with a huge 
mortgage is a reasonable combination in this piece of legislation.
  On September 13, the President said, in regard to paying down the 
debt, and I quote from the New York Times, ``Whether we can do it this 
year or not depends upon what the various spending commitments are.'' 
He may have very well said, ``I have other plans for this money.''
  Today, this House makes spending commitments under this bill. We are 
committed to paying down the debt. Maybe we could do more. I would have 
liked to have done more. But the problem is that we have to make a 
commitment to do it, otherwise the propensity to spend by the President 
and by this Congress is too great.
  Let us pass this legislation to help assure we don't simply increase 
spending. The President sent us the Democrat budget proposal last 
spring that increased spending $100 billion more than could be paid for 
with projected revenues. That meant that without increased taxes and 
increased revenues, it would have used the Social Security and the 
Medicaid trust fund surpluses.
  Let us pass this bill and move ahead. Let us make sure saving and 
investment is easier for the American people and we do not leave our 
kids with a bigger mortgage.
  Mr. SHAW. Mr. Speaker, I yield 1 minute to the gentleman from 
Illinois (Mr. Weller), a member of the Committee on Ways and Means.
  Mr. WELLER. Mr. Speaker, this is important legislation that we are 
voting on today. I strongly support setting aside 90 percent of the 
projected budget surplus to pay down the national debt. Of course, our 
goal is not only to build on the $360 billion in debt retirement we 
have already accomplished in the last 3 years, but to pay off the 
national debt by the year 2010.
  I also want to stand in strong support of this legislation which 
locks away 100 percent of the Social Security Trust Fund for Social 
Security and locks away 100 percent of the Medicare Trust Fund for 
Medicare. That is an important commitment not only for today's seniors 
but for future generations.
  My colleagues, I also stand in strong support of this legislation 
which makes it easier for America's workers and small businesses to set 
aside money for their own retirement. Efforts to expand what Americans 
can contribute to their IRAs and 401(k)s can make a big difference to 
many millions of working Americans.
  I also want to note that this legislation includes two very important 
provisions: Catch-up provisions that allow individuals to make 
additional contributions to 401(k)s or IRAs if they are over 50. That 
helps working moms. And the repeal of 415 limits, which helps 10 
million working Americans in the building trades.
  Mr. RANGEL. Mr. Speaker, I yield myself the balance of my time.
  As we close the debate on this issue, quite a number of the majority 
Members are concerned about the President of the United States getting 
involved in spending programs. I would just want the Record to be clear 
that the President will not be involved with any spending programs that 
are not supported by the majority Members in this House and the 
majority of the Members on the other side.
  So if my colleagues do not want to support any of these programs, 
then get together with the appropriation committees to see what we are 
going to do, but let us not use the legislative process to send 
messages to the other side or send messages to the President.
  Now, this is a good piece of legislation, but some of us, even though 
we supported the commitment to the reduction of the national debt, 
thought that we should have included the President's retirement plan 
that gave incentives for low-income workers to save. And the last time 
this bill was on the floor, Members had a chance to participate because 
it was not on the suspension calendar. The gentleman from Massachusetts 
(Mr. Neal) had an amendment that would have improved upon this bill and 
got over 200 votes, as I recall. Many of the Members who worked on this 
piece of legislation that once again is before us wish that this could 
have been a part of the package so that all of us, in a unanimous way, 
could say that it helps all of the workers in different income 
categories.
  So even though I will not be supporting this in its present form, 
since we do not have a chance to amend it or to work with the motion to 
recommit, I do want to congratulate the gentleman from Ohio (Mr. 
Portman) and the gentleman from Maryland (Mr. Cardin) for showing that 
in this House we can work together in a bipartisan way.
  The SPEAKER pro tempore (Mr. Scarborough). The time of the gentleman 
from New York (Mr. Rangel) has expired. The gentleman from Florida (Mr. 
Shaw) has 1\1/2\ minutes remaining.
  Mr. SHAW. Mr. Speaker, I yield 1 minute to the gentleman from 
Kentucky (Mr. Fletcher).
  Mr. FLETCHER. Mr. Speaker, I thank the gentleman for yielding me this 
time. It is a busy time of the year, but this past Sunday I was able to 
spend some time with a new grandson, born July 22. His name is Joshua.
  And that is really what this is about up here. Joshua does not 
understand partisan politics. He does not understand a lot of the games 
that may go on here. He certainly does not understand why the minority 
on the other side is blocking some legislation that would give him a 
bright future and pay down the publicly held debt instead of handing 
him a mortgage of $20,000. It would allow him, as he is growing up, to 
save more, or his parents to save more to be able to afford a home in 
the future. And he certainly does not understand the attitude of some 
people that believe it is the government's money instead of the 
people's money.
  But one day he will appreciate what we are doing here today, because 
this is really about Joshua and who Joshua represents: All the children 
across this Nation. The future. And not only the debt that they have 
that we have given them, or has been given to them due to 40 years of 
minority rule when the debt was increased, but also the opportunity to 
save and to be all that he can be.
  Mr. SHAW. Mr. Speaker, I yield myself the balance of my time.
  Because of what we do here today, if it does pass the other body and 
the President's desk, little Joshua will owe $240 billion less than he 
does today on the national debt.
  Mr. NEAL of Massachusetts. Mr. Speaker, this is an interesting bill. 
It seems to combine an unnecessary bill on debt relief that passed the 
House yesterday by a vote of 381-3, with a faulty bill on retirement 
policy that passed the House on July 19 by a vote of 401-25. It is my 
understanding that our side of the aisle learned about the contents of 
the bill about 11:00 this morning, so there may be changes that we have 
not discovered yet.
  Since revenue that is not spent goes to deficit reduction 
automatically, a statement that 90 percent of the surplus should go to 
deficit reduction next year hardly seems momentous. However, it does no 
great harm either, so I intend to vote for passage of this bill to 
indicate my strong support for deficit reduction. In addition, I am 
pleased that Members on the other side of the aisle have adopted the 
Democratic position as articulated all year, and have finally made 
deficit reduction a priority.
  On the retirement bill, let me just say that I continue to believe 
that H.R. 1102 is flawed and is in need of many improvements. I agree 
with Jane Bryant Quinn when she wrote in the Business Section of the 
Washington Post this past weekend that this and other bills are ``for 
the upper-middle, investor class. There should be a companion tax 
incentive bill that helps the workers, too.''
  Just such a companion bill, I believe, was offered by myself on July 
19, but that amendment failed by a vote of 200-216, with all 
Republicans present and voting opposed, and all Democrats but three 
present and voting in

[[Page H7798]]

support. This amendment established a refundable tax credit for 
contributions to pension plans by low and moderate income workers, and 
tax credits to small businesses to establish and contribute to pension 
plans. While not perfect, it at least made an attempt to deal with the 
problem of access to retirement income for those who can not save due 
to their low income, or can not save as much as they should. But the 
House, as I indicated, adopted the narrow approach.
  Mr. Speaker, in conclusion, I intend to vote for deficit reduction, 
and to continue my effort to enact a comprehensive retirement bill that 
helps all Americans save for retirement, not just the ``upper-middle, 
investor class.''
  Mr. GUTKNECHT. Mr. Speaker, today the House is taking up a bill which 
would ensure that 90 percent of next year's budget surplus goes to 
paying down debt. With this bill, over $600 billion of publicly held 
debt would be paid down by the end of next year. It would be entirely 
eliminated by 2013. This means lower interest rates on credit cards and 
home mortgages for millions of Americans. I can't think of a better 
gift for our children.
  Unfortunately, this debt reduction measure has been attached to H.R. 
1102, the Retirement Security Act. In my district, constituents have 
voiced concern over certain pension provisions included in this bill. 
Some recent pension conversions have been a grave injustice to American 
workers, especially mid-career and older employees who have planned for 
retirement based on the benefits built into their original pension 
plans. While H.R. 1102 provides some much-needed disclosure 
requirements, we need to be tougher on those companies who have taken 
advantage of pension conversions to fatten their bottom lines. I will 
continue to fight for those tougher provisions.
  When H.R. 1102 was being considered, I fought to ensure that all 
vested employees have the choice to remain in their current defined 
benefit plans. I brought an amendment to the Rules Committee which 
would have done just that. Unfortunately, I wasn't allowed to bring it 
to the House floor for consideration. In the end, I cast a protest vote 
against H.R. 1102 because it lacked this important provision.
  Today, there is no opportunity to amend this bill. I wish that these 
pension reform provisions had not been attached to debt relief, but it 
has. The importance of this bill in locking in debt reduction and 
increasing the ability of Americans to save for their own retirement 
will carry the day for most Members of this House. I will support this 
bill because it is critical that we offer our children a debt-free 
future.
  Mr. SHAW. Mr. Speaker, I have no further requests for time, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Florida (Mr. Shaw) that the House suspend the rules and 
pass the bill, H.R. 5203.
  The question was taken.
  Mr. SHAW. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  This is a 15-minute vote on H.R. 5203 and it will be followed by a 5-
minute vote on H.R. 3986.
  The vote was taken by electronic device, and there were--yeas 401, 
nays 20, not voting 13, as follows:

                             [Roll No. 479]

                               YEAS--401

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Baca
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth-Hage
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Crowley
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fattah
     Fletcher
     Foley
     Forbes
     Ford
     Fossella
     Fowler
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (TX)
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastert
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Leach
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     McCarthy (MO)
     McCarthy (NY)
     McCrery
     McGovern
     McHugh
     McInnis
     McIntyre
     McKeon
     McKinney
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Miller, George
     Minge
     Mink
     Moakley
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Napolitano
     Neal
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Ortiz
     Ose
     Owens
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Paul
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Salmon
     Sanchez
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Toomey
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watt (NC)
     Watts (OK)
     Waxman
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wilson
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                                NAYS--20

     Clay
     Conyers
     Davis (IL)
     Filner
     Frank (MA)
     Jackson (IL)
     Kennedy
     LaFalce
     Lee
     Matsui
     McDermott
     Mollohan
     Nadler
     Olver
     Payne
     Rangel
     Roybal-Allard
     Sabo
     Sanders
     Stark

                             NOT VOTING--13

     Campbell
     Dooley
     Franks (NJ)
     Johnson (CT)
     Klink
     Lazio
     McCollum
     McIntosh
     McNulty
     Nethercutt
     Vento
     Watkins
     Wise

                              {time}  1517

  Messrs. JACKSON of Illinois, FILNER, and NADLER changed their vote 
from ``yea'' to ``nay.''
  So (two-thirds having voted in favor thereof) the rules were 
suspended and the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mrs. JOHNSON of Connecticut. Mr. Speaker, on rollcall No. 479 I was 
inadvertently detained. Had I been present, I would have voted ``yes.''

                          ____________________