[Congressional Record (Bound Edition), Volume 147 (2001), Part 9]
[Extensions of Remarks]
[Page 12612]
[From the U.S. Government Publishing Office, www.gpo.gov]



   INTRODUCTION OF THE SMALL BUSINESS WELFARE BENEFITS PROTECTION ACT

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                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                        Thursday, June 28, 2001

  Mr. WELLER. Mr. Speaker, today, Representative Neal (D-MA) and I 
introduced the Small Business Welfare Benefits Protection Act which 
deals with Welfare Benefit Plans governed by Section 419A of the Tax 
Code. The Code currently allows a deduction for contributions to 
multiple employer welfare benefit plans.
  The purpose of this legislation is to provide some clarity to this 
section of the code in a fashion that protects pension tax law while 
allowing small businesses to provide important benefits, such as life 
and health insurance, long term care insurance and severance benefits 
to their employees. While any employer can utilize Section 419A plans, 
they allow small business to compete with large employers in attracting 
and retaining talented staff by enabling them to offer meaningful 
benefits like the ones I just mentioned.
  Section 419A plans are independently trusted and administered 
ensuring employees that the funds set aside for their benefit are there 
when they need them most, when a company is facing economic 
difficulties. This is the right policy and we should do everything in 
our power to encourage small businesses to protect their employees 
against the proverbial rainy day.
  In terms of clarifying the Code, my legislation would ensure that all 
full time employees benefit. The allowable deduction would be limited 
to the cost of the benefit for the year in which the deduction is 
taken. Finally, the bill would prevent an employer who terminates 
participation in plan from pilfering the assets of the plan at the 
expense of the rank and file employees.
  This legislation will ensure that 419A plans work the way they were 
intended to by Congress, namely for the employees, especially small 
business employees.

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