[Congressional Record Volume 150, Number 115 (Wednesday, September 22, 2004)]
[Senate]
[Pages S9533-S9534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH (for himself, Mr. Bingaman, Mr. Conrad, Mr. Daschle, 
        Mr. Hatch, and Mr. Thomas):
  S. 2831. A bill to amend the Internal Revenue Code of 1986 and the 
Employee Retirement Income Security Act of 1974 to clarify that 
federally recognized Indian tribal governments are to be regulated 
under the same government employer rules and procedures that apply to 
Federal, State, and other local government employers with regard to the 
establishment and maintenance of employee benefit plans; to the 
Committee on Finance.
  Mr. SMITH. Mr. President, I rise today to speak about the need to 
clarify the legal status of employee benefit plans offered by Indian 
tribal governments.
  In the past, the pension and welfare benefit plans of Indian tribal 
governments enjoyed the same status as granted to state and local 
governments. However, in recent years, a legal cloud has developed over 
the status of these plans. Confusion has arisen regarding whether or 
not the existing definition of a governmental plan includes plans 
sponsored by Indian tribal governments. In part, this has been a result 
of the Internal Revenue Service's lack of guidance to tribal 
governments on this issue; the inconsistent practice of granting 
governmental plan status to plans sponsored by Indian tribal 
governments; and finally a January ``no ruling'' position by the 
Internal Revenue Service that places many plans in the status of 
operating without a current determination letter recognizing the 
legality of their plan. As a result, many tribal governments have 
limited their offering of such welfare and retirement benefits to 
employees.
  Today, I am introducing legislation--the Government Pensions 
Equalization Act--to remove this legal uncertainty by amending the 
definition of a governmental plan to explicitly include plans offered 
by Indian tribal governments. Indian tribes, like all employers, 
require legal certainty regarding the status of their employee benefit 
under the Internal Revenue Code and ERISA. Moreover, Indian tribes 
should be afforded the same sovereignty status given state and local 
governments.
  Governmental plans are relieved from many of the requirements 
governing the operation of tax qualified pension and welfare benefit 
plans. There are several reasons for this relief. Governments exist for 
the benefit of their citizens and are not subject to the profit and 
loss pressures affecting the private sector. Governments offer redress 
for grievances under their own judicial systems. Elected officials who 
are responsible for government benefit programs are directly 
accountable to their constituents via the ballot box. Governments often 
offer more generous benefit plans for key officers, such as judges, 
legislators, and key executive personnel as a means to gain the 
valuable services of these skilled individuals. They also offer special 
pensions for public safety officers who can retire at a relatively 
young age and short period of service. This flexibility is impossible 
without the special relief provided governmental plans.
  Indian tribal governments meet all the special protections, 
conditions, and needs I have described. This legislation clarifies once 
and for all that they should be afforded the same treatment as their 
state and local government counterparts.
  Passage of this legislation is an important step in the fight to 
protect the sovereignty of Indian country and to foster the ability of 
tribal governments to provide retirement security to their employees 
and nation. I look forward to President Bush signing this legislation 
into law. I ask unanimous consent that the text of the legislation be 
printed in the Record.
  There being no objection, the bill was ordered to be printed ion the 
Record, as follows:

                                S. 2831

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Governmental Pension Plan 
     Equalization Act of 2004''.

     SEC. 2. CLARIFICATION OF ``GOVERNMENTAL PLAN'' DEFINITIONS.

       (a) Amendment to Internal Revenue Code of 1986.--Section 
     414(d) of the Internal Revenue Code of 1986 (definition of 
     governmental plan) is amended by adding at the end thereof 
     the following new sentence: ``The term `governmental plan' 
     also includes a plan established or maintained for its 
     employees by an Indian tribal government (as defined in 
     section 7701(a)(40)), a subdivision of an Indian tribal 
     government (determined in accordance with section 7871(d)), 
     an agency or instrumentality of an Indian tribal government 
     or a subdivision thereof, or an entity established under 
     tribal, Federal, or State law which is wholly owned or 
     controlled by any of the foregoing.''.
       (b) Amendment to Employee Retirement Income Security Act of 
     1974.--Section 3(32)of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1002(32)) is amended by 
     adding at the end the following new sentence: ``The term 
     `governmental plan' also includes a plan established or 
     maintained for its employees by an Indian tribal government 
     (as defined in section 7701(a)(40) of the Internal Revenue 
     Code of 1986), a subdivision of an Indian tribal government 
     (determined in accordance with section 7871(d) of such Code), 
     an agency or instrumentality of an Indian tribal government 
     or subdivision thereof, or an entity established under 
     tribal, Federal, or State law which is wholly owned or 
     controlled by any of the foregoing.''.

     SEC. 3. EXTENSION TO ALL GOVERNMENTAL PLANS OF CURRENT 
                   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) of the Internal Revenue Code of 
     1986 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) of such Code 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 section 401(a)(5)(G) of such Code is 
     amended to read as follows:
       ``(G) Governmental plans.--''.
       (2) The heading for section 401(a)(26)(H) of such Code is 
     amended to read as follows:
       ``(H) Exception for governmental plans.--''.
       (3) Section 401(k)(3)(G) of such Code is amended by 
     inserting ``Governmental plan.--'' after ``(G)''.

     SEC. 4. CLARIFICATION THAT TRIBAL GOVERNMENTS ARE SUBJECT TO 
                   THE SAME DEFINED BENEFIT PLAN RULES AND 
                   REGULATIONS APPLIED TO STATE AND OTHER LOCAL 
                   GOVERNMENTS, THEIR POLICE AND FIREFIGHTERS.

       (a) Amendments to Internal Revenue Code of 1986.--
       (1) Police and firefighters.--Subparagraph (H) section 
     415(b)(2) of the Internal Revenue Code of 1986 (defining 
     participant) is amended--
       (A) in clause (i) by inserting ``, Indian tribal government 
     (as defined in section 7701(a)(40)),'' after ``State'', and
       (B) in clause (ii)(I) by inserting ``, Indian tribal 
     government,'' after ``State'' both places it appears.
       (2) State and local government plans.--
       (A) In general.--Subparagraph (A) of section 415(b)(10) of 
     such Code (relating to limitation to equal accrued benefit) 
     is amended by inserting ``, Indian tribal government (as 
     defined in section 7701(a)(40)),'' after ``State''.
       (B) Conforming amendment.--The heading for section 
     415(b)(10) of such Code is amended to read as follows:
       ``(10) Special rule for state, indian tribal, and local 
     government plans.--''.
       (3) Government pick up contributions.--Paragraph (2) of 
     section 414(h) of such Code (relating to designation by units 
     of government) is amended by inserting ``, Indian tribal 
     government (as defined in section 7701(a)(40)),'' after 
     ``State''.
       (b) Amendments to Employee Retirement Income Security Act 
     of 1974.--Section 4021(b)of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1321(b)) is amended--
       (1) in paragraph (12), by striking ``or'' at the end;
       (2) in paragraph (13), by striking ``plan.'' and inserting 
     ``plan; or''; and
       (3) by adding at the end the following new paragraph:
       ``(14) established and maintained for its employees by an 
     Indian tribal government (as defined in section 7701(a)(40) 
     of the Internal Revenue Code of 1986), a subdivision of an 
     Indian tribal government (determined in accordance with 
     section 7871(d) of such Code), an agency or instrumentality 
     of an Indian tribal government or subdivision thereof, or an 
     entity established under tribal, Federal, or State law which 
     is wholly owned or controlled by any of the foregoing.''.

[[Page S9534]]

     SEC. 5. EFFECTIVE DATE.

       The amendments made by this Act shall apply to years 
     beginning before, on, or after the date of the enactment of 
     this Act.

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