[Congressional Record (Bound Edition), Volume 156 (2010), Part 4]
[Senate]
[Pages 5438-5462]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3723. Mr. COBURN submitted an amendment intended to be proposed to 
amendment SA 3721 proposed by Mr. Baucus to the bill H.R. 4851, to 
provide a temporary extension of certain programs, and for other 
purposes; as follows:


[[Page 5439]]

       At the end of the bill, insert the following:

     SEC. __. RESCISSION OF UNSPENT AND UNCOMMITTED FEDERAL FUNDS.

       (a) In General.--Notwithstanding any other provision of 
     law, of all available unobligated Federal funds, the greater 
     of $20,000,000,000 and the amount determined necessary under 
     the Statutory Pay-As-You-Go Act of 2010 (Public Law 111-139; 
     124 Stat. 8) to offset the budgetary effect of this Act, 
     excluding this section, in appropriated discretionary 
     unexpired funds are rescinded.
       (b) Implementation.--Not later than 60 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall--
       (1) identify the accounts and amounts rescinded to 
     implement subsection (a); and
       (2) submit a report to the Secretary of the Treasury and 
     Congress of the accounts and amounts identified under 
     paragraph (1) for rescission.
                                 ______
                                 
  SA 3724. Mr. McCAIN submitted an amendment intended to be proposed by 
him to the bill H.R. 4851, to provide a temporary extension of certain 
programs, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place insert the following:

     SEC. ___. SENSE OF THE SENATE REGARDING A VALUE ADDED TAX.

       It is the sense of the Senate that the Value Added Tax is a 
     massive tax increase that will cripple families on fixed 
     income and only further push back America's economic 
     recovery.
                                 ______
                                 
  SA 3725. Mr. COBURN submitted an amendment intended to be proposed to 
amendment SA 3721 proposed by Mr. Baucus to the bill H.R. 4851, to 
provide a temporary extension of certain programs, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end of the amendment, insert the following:

                     TITLE II--OFFSETS FOR THE ACT

                   Subtitle A--Discretionary Spending

     SEC. 211. RESCISSION OF UNSPENT AND UNCOMMITTED FEDERAL 
                   FUNDS.

       (a) In General.--Notwithstanding any other provision of 
     law, of all available unobligated Federal funds, the greater 
     of $10,000,000,000 and the amount determined necessary under 
     the Statutory Pay-As-You-Go Act of 2010 (Public Law 111-139; 
     124 Stat. 8) to offset the budgetary effect of this Act, 
     excluding this section, in appropriated discretionary 
     unexpired funds are rescinded.
       (b) Implementation.--Not later than 60 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall--
       (1) identify the accounts and amounts rescinded to 
     implement subsection (a); and
       (2) submit a report to the Secretary of the Treasury and 
     Congress of the accounts and amounts identified under 
     paragraph (1) for rescission.

                 Subtitle B--Revenue Offset Provisions

     SEC. 221. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title 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. 222. INFORMATION REPORTING FOR RENTAL PROPERTY EXPENSE 
                   PAYMENTS.

       (a) In General.--Section 6041 is amended by adding at the 
     end the following new subsection:
       ``(h) Treatment of Rental Property Expense Payments.--
       ``(1) In general.--For purposes of subsection (a), a person 
     receiving rental income from real estate (other than a 
     qualified residence) shall be considered to be engaged in a 
     trade or business of renting property.
       ``(2) Qualified residence.--For purposes of paragraph (1), 
     the term `qualified residence' means--
       ``(A) the principal residence (within the meaning of 
     section 121) of the taxpayer, and
       ``(B) 1 other residence of the taxpayer which is selected 
     by the taxpayer for purposes of this subsection for the 
     taxable year and which is used by the taxpayer as a residence 
     (within the meaning of section 280A(d)(1)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2010.

     SEC. 223. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL 
                   PRODUCER CREDIT.

       (a) In General.--Section 40(B)(6)(E) is amended by adding 
     at the end the following new clause:
       ``(iv) Exclusion of certain processed fuels with a high 
     acid content.--The term `cellulosic biofuel' shall not 
     include any processed fuel with an acid number greater than 
     25. For purposes of the preceding sentence, the term 
     `processed fuel' means any fuel other than a fuel--

       ``(I) more than 4 percent of which (determined by weight) 
     is any combination of water and sediment, or
       ``(II) the ash content of which is more than 1 percent 
     (determined by weight).''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to fuels sold or used on or after January 1, 
     2010.

     SEC. 224. ELIMINATION OF ADVANCE REFUNDABILITY OF EARNED 
                   INCOME CREDIT.

       (a) In General.--Section 3507, subsection (g) of section 
     32, and paragraph (7) of section 6051(a) are repealed.
       (b) Conforming Amendments.--
       (1) Section 6012(a) is amended by striking paragraph (8) 
     and by redesignating paragraph (9) as paragraph (8).
       (2) Section 6302 is amended by striking subsection (i).
       (c) Effective Date.--The repeals and amendments made by 
     this section shall apply to taxable years beginning after 
     December 31, 2010.

     SEC. 225. UNEMPLOYMENT INSURANCE PROGRAM INTEGRITY.

       (a) Reporting of First Day of Earnings to Directory of New 
     Hires.--
       (1) In general.--Section 453A(b)(1)(A) of the Social 
     Security Act (42 U.S.C. 653a(b)(1)(A)) is amended by 
     inserting ``the date services for remuneration were first 
     performed by the employee,'' after ``of the employee,''.
       (2) Reporting format and method.--Section 453A(c) of the 
     Social Security Act (42 U.S.C. 653a(c)) is amended by 
     inserting ``, to the extent practicable,'' after ``Each 
     report required by subsection (b) shall''.
       (3) Effective date.--
       (A) In general.--Subject to subparagraph (B), the 
     amendments made by this subsection shall take effect 6 months 
     after the date of enactment of this Act.
       (B) Compliance transition period.--If the Secretary of 
     Health and Human Services determines that State legislation 
     (other than legislation appropriating funds) is required in 
     order for a State plan under part D of title IV of the Social 
     Security Act to meet the additional requirements imposed by 
     the amendment made by paragraph (1), the plan shall not be 
     regarded as failing to meet such requirements before the 
     first day of the second calendar quarter beginning after the 
     close of the first regular session of the State legislature 
     that begins after the effective date of such amendment. If 
     the State has a 2-year legislative session, each year of the 
     session is deemed to be a separate regular session of the 
     State legislature.
       (b) Extension and Modification of Collection of Past-Due 
     Debt for Erroneous Payment of Unemployment Compensation.--
       (1) Permanent extension.--Subsection (f) of section 6402 is 
     amended by striking paragraph (8).
       (2) Collection in all states.--Subsection (f) of section 
     6402, as amended by paragraph (1), is amended by striking 
     paragraph (3) and redesignating paragraphs (4) through (7) as 
     paragraphs (3) through (6), respectively.
       (3) Collection for reasons other than fraud.--
       (A) In general.--Paragraph (4) of section 6402(f), as 
     redesignated by paragraph (2), is amended by striking ``due 
     to fraud'' each place it appears.
       (B) Conforming amendments.--Section 6402(f) is amended--
       (i) in paragraph (3), as redesignated by paragraph (2)--

       (I) by striking ``or due to fraud'' in subparagraph (B), 
     and
       (II) by striking ``and due to fraud'' in subparagraph (C), 
     and

       (ii) in the heading, by striking ``Resulting From Fraud''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to refunds payable on or after the date of the 
     enactment of this Act.

     SEC. 226. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
                   ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
                   CONTRIBUTIONS.

       (a) In General.--Section 402A(e)(1) (defining applicable 
     retirement plan) 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 adding at 
     the end the following:
       ``(C) an eligible deferred compensation plan (as defined in 
     section 457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (b) Elective Deferrals.--Section 402A(e)(2) (defining 
     elective deferral) is amended to read as follows:
       ``(2) Elective deferral.--The term `elective deferral' 
     means--
       ``(A) any elective deferral described in subparagraph (A) 
     or (C) of section 402(g)(3), and
       ``(B) any elective deferral of compensation by an 
     individual under an eligible deferred compensation plan (as 
     defined in section 457(b)) of an eligible employer described 
     in section 457(e)(1)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 227. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure to File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.

[[Page 5440]]

       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$1,500,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$30''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$250,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$500,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$500,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$200,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Adjustment for Inflation.--Section 6721 is amended by 
     adding at the end the following new subsection:
       ``(f) Adjustment for Inflation.--
       ``(1) In general.--For each fifth calendar year beginning 
     after 2012, each of the dollar amounts under subsections (a), 
     (b), (d) (other than paragraph (2)(A) thereof), and (e) shall 
     be increased by such dollar amount multiplied by the cost-of-
     living adjustment determined under section 1(f)(3) determined 
     by substituting `calendar year 2011' for `calendar year 1992' 
     in subparagraph (B) thereof.
       ``(2) Rounding.--If any amount adjusted under paragraph 
     (1)--
       ``(A) is not less than $75,000 and is not a multiple of 
     $500, such amount shall be rounded to the next lowest 
     multiple of $500, and
       ``(B) is not described in subparagraph (A) and is not a 
     multiple of $10, such amount shall be rounded to the next 
     lowest multiple of $10.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2011.

     SEC. 228. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO ROTH 
                   DESIGNATED ACCOUNTS.

       (a) In General.--Section 402A(c) is amended by adding at 
     the end the following new paragraph:
       ``(4) Taxable rollovers to designated roth accounts.--
       ``(A) In general.--Notwithstanding sections 402(c), 
     403(b)(8), and 457(e)(16), in the case of any distribution to 
     which this paragraph applies--
       ``(i) there shall be included in gross income any amount 
     which would be includible were it not part of a qualified 
     rollover contribution,
       ``(ii) section 72(t) shall not apply, and
       ``(iii) unless the taxpayer elects not to have this clause 
     apply, any amount required to be included in gross income for 
     any taxable year beginning in 2010 by reason of this 
     paragraph shall be so included ratably over the 2-taxable-
     year period beginning with the first taxable year beginning 
     in 2011.

     Any election under clause (iii) for any distributions during 
     a taxable year may not be changed after the due date for such 
     taxable year.
       ``(B) Distributions to which paragraph applies.--In the 
     case of an applicable retirement plan which includes a 
     qualified Roth contribution program, this paragraph shall 
     apply to a distribution from such plan other than from a 
     designated Roth account which is contributed in a qualified 
     rollover contribution to the designated Roth account 
     maintained under such plan for the benefit of the individual 
     to whom the distribution is made.
       ``(C) Other rules.--The rules of subparagraphs (D), (E), 
     and (F) of section 408A(d)(3) (as in effect for taxable years 
     beginning after 2009) shall apply for purposes of this 
     paragraph.''.
       (b) Conforming Amendment.--Section 402A(d)(3)(A) is amended 
     by striking ``A'' and inserting ``Except as provided in 
     paragraph (4), a''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions in plan years beginning after 
     December 31, 2009.

                   Subtitle C--Pension Funding Relief

                     PART I--SINGLE EMPLOYER PLANS

     SEC. 231. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT 
                   PLANS TO AMORTIZE CERTAIN SHORTFALL 
                   AMORTIZATION BASES.

       (a) Amendments to ERISA.--
       (1) In general.--Paragraph (2) of section 303(c) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1083(c)) is amended by adding at the end the following 
     subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury. The Secretary 
     of the Treasury shall, before granting a revocation request, 
     provide the Pension Benefit Guaranty Corporation an 
     opportunity to comment on the conditions applicable to the 
     treatment of any portion of the election year shortfall 
     amortization base that remains unamortized as of the 
     revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required installments in certain cases.--
     Section 303(c) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end 
     the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary of the Treasury, 
     if a shortfall amortization installment with respect to any 
     shortfall amortization base for an election year is required 
     to be increased for any plan year under subparagraph (A)--

[[Page 5441]]

       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under 
     chapter 1 of the Internal Revenue Code of 1986 for 
     remuneration during the calendar year in which such plan year 
     begins for services performed by the employee for the plan 
     sponsor (whether or not performed during such calendar year), 
     over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for nonqualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary of the 
     Treasury), or transferred to such a trust or other 
     arrangement, by a plan sponsor for purposes of paying 
     deferred compensation of an employee under a nonqualified 
     deferred compensation plan (as defined in section 409A of 
     such Code) of the plan sponsor, then, for purposes of clause 
     (i), the amount of such assets shall be treated as 
     remuneration of the employee includible in income for the 
     calendar year unless such amount is otherwise includible in 
     income for such year. An amount to which the preceding 
     sentence applies shall not be taken into account under this 
     paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A of the 
     Internal Revenue Code of 1986) that, upon such grant, is 
     subject to a substantial risk of forfeiture (as defined under 
     section 83(c)(1) of such Code) for at least 5 years from the 
     date of such grant.
       ``(II) Secretarial authority.--The Secretary of the 
     Treasury may by regulation provide for the application of 
     this clause in the case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) of such Code for the taxable year ending 
     during such calendar year, and the term `compensation' shall 
     include earned income of such individual with respect to such 
     self-employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) of such Code for the calendar year, 
     determined by substituting `calendar year 2009' for `calendar 
     year 1992' in subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043) of the plan sponsor for the preceding plan 
     year, determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 302(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of this title).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 302(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election

[[Page 5442]]

     year (or, if later, the first plan year beginning after 
     December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary of the Treasury shall provide rules 
     for the application of this paragraph to such plans, 
     including rules for the ratable allocation of any installment 
     acceleration amount among such plans on the basis of each 
     plan's relative reduction in the plan's shortfall 
     amortization installment for the first plan year in the 
     amortization period described in subparagraph (A) (determined 
     without regard to this paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary of the 
     Treasury shall prescribe rules for the application of 
     paragraph (2)(D) and this paragraph in any case where there 
     is a merger or acquisition involving a plan sponsor making 
     the election under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 303 of such Act (29 
     U.S.C. 1083) is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (b) Amendments to Internal Revenue Code of 1986.--
       (1) In general.--Paragraph (2) of section 430(c) is amended 
     by adding at the end the following subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary, and may be revoked only with the consent of 
     the Secretary. The Secretary shall, before granting a 
     revocation request, provide the Pension Benefit Guaranty 
     Corporation an opportunity to comment on the conditions 
     applicable to the treatment of any portion of the election 
     year shortfall amortization base that remains unamortized as 
     of the revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required contributions if excess 
     compensation paid.--Section 430(c) is amended by adding at 
     the end the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary, if a shortfall 
     amortization installment with respect to any shortfall 
     amortization base for an election year is required to be 
     increased for any plan year under subparagraph (A)--
       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus

       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).

[[Page 5443]]

       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under this 
     chapter for remuneration during the calendar year in which 
     such plan year begins for services performed by the employee 
     for the plan sponsor (whether or not performed during such 
     calendar year), over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for non-qualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary), or 
     transferred to such a trust or other arrangement, by a plan 
     sponsor for purposes of paying deferred compensation of an 
     employee under a nonqualified deferred compensation plan (as 
     defined in section 409A) of the plan sponsor, then, for 
     purposes of clause (i), the amount of such assets shall be 
     treated as remuneration of the employee includible in income 
     for the calendar year unless such amount is otherwise 
     includible in income for such year. An amount to which the 
     preceding sentence applies shall not be taken into account 
     under this paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A) that, 
     upon such grant, is subject to a substantial risk of 
     forfeiture (as defined under section 83(c)(1)) for at least 5 
     years from the date of such grant.
       ``(II) Secretarial authority.--The Secretary may by 
     regulation provide for the application of this clause in the 
     case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) for the taxable year ending during such 
     calendar year, and the term `compensation' shall include 
     earned income of such individual with respect to such self-
     employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2009' for `calendar year 1992' in 
     subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043 of the Employee Retirement Income Security Act 
     of 1974) of the plan sponsor for the preceding plan year, 
     determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 412(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of title I of Employee 
     Retirement Income Security Act of 1974).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 412(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election year (or, if later, the 
     first plan year beginning after December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary shall provide rules for the 
     application of this paragraph to such plans, including rules 
     for the ratable allocation of any installment acceleration 
     amount among such plans on the basis of each plan's relative 
     reduction in the plan's shortfall amortization installment 
     for the first plan year in the amortization period described 
     in subparagraph (A) (determined without regard to this 
     paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary shall 
     prescribe rules for the application of paragraph (2)(D) and 
     this paragraph in any case where there is a merger or 
     acquisition involving a plan sponsor making the election 
     under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 430 is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2007.

     SEC. 232. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO 
                   PLANS SUBJECT TO PRIOR LAW FUNDING RULES.

       (a) In General.--Title I of the Pension Protection Act of 
     2006 is amended by redesignating section 107 as section 108 
     and by inserting the following after section 106:

     ``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO 
                   PLANS WITH DELAYED EFFECTIVE DATE.

       ``(a) In General.--If the plan sponsor of a plan to which 
     section 104, 105, or 106 of this Act applies elects to have 
     this section apply for any eligible plan year (in this 
     section referred to as an `election year'), section 302 of 
     the Employee Retirement Income Security Act of 1974 and 
     section 412 of the Internal Revenue Code of 1986 (as in 
     effect before the amendments made by this subtitle and 
     subtitle B) shall apply to such year in the manner described 
     in subsection (b) or (c), whichever is specified in the 
     election. All references in this section to `such Act' or 
     `such Code' shall be to such Act or such Code as in effect 
     before the amendments made by this subtitle and subtitle B.
       ``(b) Application of 2 and 7 Rule.--In the case of an 
     election year to which this subsection applies--
       ``(1) 2-year lookback for determining deficit reduction 
     contributions for certain plans.--For purposes of applying 
     section 302(d)(9) of such Act and section 412(l)(9)

[[Page 5444]]

      of such Code, the funded current liability percentage (as 
     defined in subparagraph (C) thereof) for such plan for such 
     plan year shall be such funded current liability percentage 
     of such plan for the second plan year preceding the first 
     election year of such plan.
       ``(2) Calculation of deficit reduction contribution.--For 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code to a plan to which such sections apply 
     (after taking into account paragraph (1))--
       ``(A) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code shall be the third segment rate described in sections 
     104(b), 105(b), and 106(b) of this Act, and
       ``(B) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(c) Application of 15-Year Amortization.--In the case of 
     an election year to which this subsection applies, for 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code--
       ``(1) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code for any pre-effective date plan year beginning with or 
     after the first election year shall be the ratio of--
       ``(A) the annual installments payable in each year if the 
     increased unfunded new liability for such plan year were 
     amortized over 15 years, using an interest rate equal to the 
     third segment rate described in sections 104(b), 105(b), and 
     106(b) of this Act, to
       ``(B) the increased unfunded new liability for such plan 
     year, and
       ``(2) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(d) Election.--
       ``(1) In general.--The plan sponsor of a plan may elect to 
     have this section apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan to which section 106 of this Act applies, the plan 
     sponsor may only elect to have this section apply to 1 
     eligible plan year.
       ``(2) Amortization schedule.--Such election shall specify 
     whether the rules under subsection (b) or (c) shall apply to 
     an election year, except that if a plan sponsor elects to 
     have this section apply to 2 eligible plan years, the plan 
     sponsor must elect the same rule for both years.
       ``(3) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year beginning in 2008 shall only be treated as an 
     eligible plan year if the due date for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this clause.
       ``(2) Pre-effective date plan year.--The term `pre-
     effective date plan year' means, with respect to a plan, any 
     plan year prior to the first year in which the amendments 
     made by this subtitle and subtitle B apply to the plan.
       ``(3) Increased unfunded new liability.--The term 
     `increased unfunded new liability' means, with respect to a 
     year, the excess (if any) of the unfunded new liability over 
     the amount of unfunded new liability determined as if the 
     value of the plan's assets determined under subsection 
     302(c)(2) of such Act and section 412(c)(2) of such Code 
     equaled the product of the current liability of the plan for 
     the year multiplied by the funded current liability 
     percentage (as defined in section 302(d)(8)(B) of such Act 
     and 412(l)(8)(B) of such Code) of the plan for the second 
     plan year preceding the first election year of such plan.
       ``(4) Other definitions.--The terms `unfunded new 
     liability' and `current liability' shall have the meanings 
     set forth in section 302(d) of such Act and section 412(l) of 
     such Code.''.
       (b) Eligible Charity Plans.--Section 104 of the Pension 
     Protection Act of 2006 is amended--
       (1) by striking ``eligible cooperative plan'' wherever it 
     appears in subsections (a) and (b) and inserting ``eligible 
     cooperative plan or an eligible charity plan'', and
       (2) by adding at the end the following new subsection:
       ``(d) Eligible Charity Plan Defined.--For purposes of this 
     section, a plan shall be treated as an eligible charity plan 
     for a plan year if the plan is maintained by more than one 
     employer (determined without regard to section 414(c) of the 
     Internal Revenue Code) and 100 percent of the employers are 
     described in section 501(c)(3) of such Code.''.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect as if included in the Pension Protection Act of 
     2006.
       (2) Eligible charity plan.--The amendments made by 
     subsection (b) shall apply to plan years beginning after 
     December 31, 2007, except that a plan sponsor may elect to 
     apply such amendments to plan years beginning after December 
     31, 2008. Any such election shall be made at such time, and 
     in such form and manner, as shall be prescribed by the 
     Secretary of the Treasury, and may be revoked only with the 
     consent of the Secretary of the Treasury.

     SEC. 233. LOOKBACK FOR CERTAIN BENEFIT RESTRICTIONS.

       (a) In General.--
       (1) Amendment to erisa.--Section 206(g)(9) of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     at the end the following:
       ``(D) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(i) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--

       ``(I) such percentage, as determined without regard to this 
     subparagraph, or
       ``(II) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary of the Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before November 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Applicable provision.--For purposes of this 
     subparagraph, the term `applicable provision' means--

       ``(I) paragraph (3), but only for purposes of applying such 
     paragraph to a payment which, as determined under rules 
     prescribed by the Secretary of the Treasury, is a payment 
     under a social security leveling option which accelerates 
     payments under the plan before, and reduces payments after, a 
     participant starts receiving social security benefits in 
     order to provide substantially similar aggregate payments 
     both before and after such benefits are received, and
       ``(II) paragraph (4).''.

       (2) Amendment to internal revenue code of 1986.--Section 
     436(j) of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
       ``(3) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(A) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--
       ``(i) such percentage, as determined without regard to this 
     paragraph, or
       ``(ii) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary.
       ``(B) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--
       ``(i) subparagraph (A) shall apply to plan years beginning 
     after December 31, 2007, and before January 1, 2010, and
       ``(ii) subparagraph (A)(ii) shall apply based on the last 
     plan year beginning before November 1, 2007, as determined 
     under rules prescribed by the Secretary.
       ``(C) Applicable provision.--For purposes of this 
     paragraph, the term `applicable provision' means--
       ``(i) subsection (d), but only for purposes of applying 
     such paragraph to a payment which, as determined under rules 
     prescribed by the Secretary, is a payment under a social 
     security leveling option which accelerates payments under the 
     plan before, and reduces payments after, a participant starts 
     receiving social security benefits in order to provide 
     substantially similar aggregate payments both before and 
     after such benefits are received, and
       ``(ii) subsection (e).''.
       (b) Interaction With Wrera Rule.--Section 203 of the 
     Worker, Retiree, and Employer Recovery Act of 2008 shall 
     apply to a plan for any plan year in lieu of the amendments 
     made by this section applying to sections 206(g)(4) of the 
     Employee Retirement Income Security Act of 1974 and 436(e) of 
     the Internal Revenue Code of 1986 only to the extent that 
     such section produces a higher adjusted funding target 
     attainment percentage for such plan for such year.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning on or after October 1, 2008.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2007.

[[Page 5445]]



     SEC. 234. LOOKBACK FOR CREDIT BALANCE RULE FOR PLANS 
                   MAINTAINED BY CHARITIES.

       (a) Amendment to Erisa.--Paragraph (3) of section 303(f) of 
     the Employee Retirement Income Security Act of 1974 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year shall be the greater 
     of--

       ``(I) such ratio, as determined without regard to this 
     subparagraph, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007, and before September 1, 2008, as 
     determined under rules prescribed by the Secretary of the 
     Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2008, and before January 1, 2011, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3) of the Internal Revenue Code of 1986.''.
       (b) Amendment to Internal Revenue Code of 1986.--Paragraph 
     (3) of section 430(f) of the Internal Revenue Code of 1986 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year of a plan shall be 
     the greater of--

       ``(I) such ratio, as determined without regard to this 
     subsection, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007 and before September 1, 2008, as 
     determined under rules prescribed by the Secretary.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning after August 31, 2009.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2008.

                      PART II--MULTIEMPLOYER PLANS

     SEC. 241. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.

       (a) Adjustments.--
       (1) Amendment to erisa.--Section 304(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is 
     amended by adding at the end the following new paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period--

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary of the 
     Treasury on the basis of the difference between actual and 
     expected returns (including any difference attributable to 
     any criminally fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary of the Treasury for purposes of section 165 of the 
     Internal Revenue Code of 1986.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary of the Treasury shall not treat the 
     asset valuation method of the plan as unreasonable solely 
     because of the changes in such method described in clause 
     (i), and
       ``(II) such changes shall be deemed approved by such 
     Secretary under section 302(d)(1) and section 412(d)(1) of 
     such Code.

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D of chapter 1 of 
     the Internal Revenue Code of 1986 or to comply with other 
     applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (2) Amendment to internal revenue code of 1986.--Section 
     431(b) is amended by adding at the end the following new 
     paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period--

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the

[[Page 5446]]

     election to have this subparagraph apply to the plan year, 
     such extension shall not result in such amortization period 
     exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary on the 
     basis of the difference between actual and expected returns 
     (including any difference attributable to any criminally 
     fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary for purposes of section 165.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary shall not treat the asset valuation 
     method of the plan as unreasonable solely because of the 
     changes in such method described in clause (i), and
       ``(II) such changes shall be deemed approved by the 
     Secretary under section 302(d)(1) of the Employee Retirement 
     Income Security Act of 1974 and section 412(d)(1).

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D or to comply with 
     other applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (b) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     take effect as of the first day of the first plan year ending 
     after August 31, 2008, except that any election a plan makes 
     pursuant to this section that affects the plan's funding 
     standard account for the first plan year beginning after 
     August 31, 2008, shall be disregarded for purposes of 
     applying the provisions of section 305 of the Employee 
     Retirement Income Security Act of 1974 and section 432 of the 
     Internal Revenue Code of 1986 to such plan year.
       (2) Restrictions on benefit increases.--Notwithstanding 
     paragraph (1), the restrictions on plan amendments increasing 
     benefits in sections 304(b)(8)(D) of such Act and 
     431(b)(8)(D) of such Code, as added by this section, shall 
     take effect on the date of enactment of this Act.
                                 ______
                                 
  SA 3726. Mr. COBURN proposed an amendment to amendment SA 3721 
proposed by Mr. Baucus to the bill H.R. 4851, to provide a temporary 
extension of certain programs, and for other purposes; as follows:

       At the end of the amendment, insert the following:
                     TITLE II--OFFSETS FOR THE ACT
                   Subtitle A--Discretionary Spending

     SEC. 211. RESCISSION OF UNSPENT AND UNCOMMITTED FEDERAL 
                   FUNDS.

       (a) In General.--Notwithstanding any other provision of 
     law, of all available unobligated Federal funds, the greater 
     of $20,000,000,000 or the amount determined necessary under 
     the Statutory Pay-As-You-Go Act of 2010 (Public Law 111-139; 
     124 Stat. 8) to offset the budgetary effect of this Act, 
     excluding this section, in appropriated discretionary 
     unexpired funds are rescinded.
       (b) Implementation.--Not later than 60 days after the date 
     of enactment of this Act, the Director of the Office of 
     Management and Budget shall--
       (1) identify the accounts and amounts rescinded to 
     implement subsection (a); and
       (2) submit a report to the Secretary of the Treasury and 
     Congress of the accounts and amounts identified under 
     paragraph (1) for rescission.
                 Subtitle B--Revenue Offset Provisions

     SEC. 221. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title 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. 222. INFORMATION REPORTING FOR RENTAL PROPERTY EXPENSE 
                   PAYMENTS.

       (a) In General.--Section 6041 is amended by adding at the 
     end the following new subsection:
       ``(h) Treatment of Rental Property Expense Payments.--
       ``(1) In general.--For purposes of subsection (a), a person 
     receiving rental income from real estate (other than a 
     qualified residence) shall be considered to be engaged in a 
     trade or business of renting property.
       ``(2) Qualified residence.--For purposes of paragraph (1), 
     the term `qualified residence' means--
       ``(A) the principal residence (within the meaning of 
     section 121) of the taxpayer, and
       ``(B) 1 other residence of the taxpayer which is selected 
     by the taxpayer for purposes of this subsection for the 
     taxable year and which is used by the taxpayer as a residence 
     (within the meaning of section 280A(d)(1)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2010.

     SEC. 223. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL 
                   PRODUCER CREDIT.

       (a) In General.--Section 40(B)(6)(E) is amended by adding 
     at the end the following new clause:
       ``(iv) Exclusion of certain processed fuels with a high 
     acid content.--The term `cellulosic biofuel' shall not 
     include any processed fuel with an acid number greater than 
     25. For purposes of the preceding sentence, the term 
     `processed fuel' means any fuel other than a fuel--

       ``(I) more than 4 percent of which (determined by weight) 
     is any combination of water and sediment, or
       ``(II) the ash content of which is more than 1 percent 
     (determined by weight).''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to fuels sold or used on or after January 1, 
     2010.

     SEC. 224. ELIMINATION OF ADVANCE REFUNDABILITY OF EARNED 
                   INCOME CREDIT.

       (a) In General.--Section 3507, subsection (g) of section 
     32, and paragraph (7) of section 6051(a) are repealed.
       (b) Conforming Amendments.--
       (1) Section 6012(a) is amended by striking paragraph (8) 
     and by redesignating paragraph (9) as paragraph (8).
       (2) Section 6302 is amended by striking subsection (i).
       (c) Effective Date.--The repeals and amendments made by 
     this section shall apply to taxable years beginning after 
     December 31, 2010.

     SEC. 225. UNEMPLOYMENT INSURANCE PROGRAM INTEGRITY.

       (a) Reporting of First Day of Earnings to Directory of New 
     Hires.--
       (1) In general.--Section 453A(b)(1)(A) of the Social 
     Security Act (42 U.S.C. 653a(b)(1)(A)) is amended by 
     inserting ``the date services for remuneration were first 
     performed by the employee,'' after ``of the employee,''.
       (2) Reporting format and method.--Section 453A(c) of the 
     Social Security Act (42 U.S.C. 653a(c)) is amended by 
     inserting ``, to the extent practicable,'' after ``Each 
     report required by subsection (b) shall''.
       (3) Effective date.--
       (A) In general.--Subject to subparagraph (B), the 
     amendments made by this subsection shall take effect 6 months 
     after the date of enactment of this Act.
       (B) Compliance transition period.--If the Secretary of 
     Health and Human Services determines that State legislation 
     (other than legislation appropriating funds) is required in 
     order for a State plan under part D of title IV of the Social 
     Security Act to meet the additional requirements imposed by 
     the

[[Page 5447]]

     amendment made by paragraph (1), the plan shall not be 
     regarded as failing to meet such requirements before the 
     first day of the second calendar quarter beginning after the 
     close of the first regular session of the State legislature 
     that begins after the effective date of such amendment. If 
     the State has a 2-year legislative session, each year of the 
     session is deemed to be a separate regular session of the 
     State legislature.
       (b) Extension and Modification of Collection of Past-Due 
     Debt for Erroneous Payment of Unemployment Compensation.--
       (1) Permanent extension.--Subsection (f) of section 6402 is 
     amended by striking paragraph (8).
       (2) Collection in all states.--Subsection (f) of section 
     6402, as amended by paragraph (1), is amended by striking 
     paragraph (3) and redesignating paragraphs (4) through (7) as 
     paragraphs (3) through (6), respectively.
       (3) Collection for reasons other than fraud.--
       (A) In general.--Paragraph (4) of section 6402(f), as 
     redesignated by paragraph (2), is amended by striking ``due 
     to fraud'' each place it appears.
       (B) Conforming amendments.--Section 6402(f) is amended--
       (i) in paragraph (3), as redesignated by paragraph (2)--

       (I) by striking ``or due to fraud'' in subparagraph (B), 
     and
       (II) by striking ``and due to fraud'' in subparagraph (C), 
     and

       (ii) in the heading, by striking ``Resulting From Fraud''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to refunds payable on or after the date of the 
     enactment of this Act.

     SEC. 226. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
                   ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
                   CONTRIBUTIONS.

       (a) In General.--Section 402A(e)(1) (defining applicable 
     retirement plan) 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 adding at 
     the end the following:
       ``(C) an eligible deferred compensation plan (as defined in 
     section 457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (b) Elective Deferrals.--Section 402A(e)(2) (defining 
     elective deferral) is amended to read as follows:
       ``(2) Elective deferral.--The term `elective deferral' 
     means--
       ``(A) any elective deferral described in subparagraph (A) 
     or (C) of section 402(g)(3), and
       ``(B) any elective deferral of compensation by an 
     individual under an eligible deferred compensation plan (as 
     defined in section 457(b)) of an eligible employer described 
     in section 457(e)(1)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 227. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure To File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$1,500,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$30''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$250,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$500,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$500,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$200,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Adjustment for Inflation.--Section 6721 is amended by 
     adding at the end the following new subsection:
       ``(f) Adjustment for Inflation.--
       ``(1) In general.--For each fifth calendar year beginning 
     after 2012, each of the dollar amounts under subsections (a), 
     (b), (d) (other than paragraph (2)(A) thereof), and (e) shall 
     be increased by such dollar amount multiplied by the cost-of-
     living adjustment determined under section 1(f)(3) determined 
     by substituting `calendar year 2011' for `calendar year 1992' 
     in subparagraph (B) thereof.
       ``(2) Rounding.--If any amount adjusted under paragraph 
     (1)--
       ``(A) is not less than $75,000 and is not a multiple of 
     $500, such amount shall be rounded to the next lowest 
     multiple of $500, and
       ``(B) is not described in subparagraph (A) and is not a 
     multiple of $10, such amount shall be rounded to the next 
     lowest multiple of $10.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2011.

     SEC. 228. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO ROTH 
                   DESIGNATED ACCOUNTS.

       (a) In General.--Section 402A(c) is amended by adding at 
     the end the following new paragraph:
       ``(4) Taxable rollovers to designated roth accounts.--
       ``(A) In general.--Notwithstanding sections 402(c), 
     403(b)(8), and 457(e)(16), in the case of any distribution to 
     which this paragraph applies--
       ``(i) there shall be included in gross income any amount 
     which would be includible were it not part of a qualified 
     rollover contribution,
       ``(ii) section 72(t) shall not apply, and
       ``(iii) unless the taxpayer elects not to have this clause 
     apply, any amount required to be included in gross income for 
     any taxable year beginning in 2010 by reason of this 
     paragraph shall be so included ratably over the 2-taxable-
     year period beginning with the first taxable year beginning 
     in 2011.

     Any election under clause (iii) for any distributions during 
     a taxable year may not be changed after the due date for such 
     taxable year.
       ``(B) Distributions to which paragraph applies.--In the 
     case of an applicable retirement plan which includes a 
     qualified Roth contribution program, this paragraph shall 
     apply to a distribution from such plan other than from a 
     designated Roth account which is contributed in a qualified 
     rollover contribution to the designated Roth account 
     maintained under such plan for the benefit of the individual 
     to whom the distribution is made.
       ``(C) Other rules.--The rules of subparagraphs (D), (E), 
     and (F) of section 408A(d)(3) (as in effect for taxable years 
     beginning after 2009) shall apply for purposes of this 
     paragraph.''.
       (b) Conforming Amendment.--Section 402A(d)(3)(A) is amended 
     by striking ``A'' and inserting ``Except as provided in 
     paragraph (4), a''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions in plan years beginning after 
     December 31, 2009.
                   Subtitle C--Pension Funding Relief
                     PART I--SINGLE EMPLOYER PLANS

     SEC. 231. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT 
                   PLANS TO AMORTIZE CERTAIN SHORTFALL 
                   AMORTIZATION BASES.

       (a) Amendments to ERISA.--
       (1) In general.--Paragraph (2) of section 303(c) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1083(c)) is amended by adding at the end the following 
     subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

[[Page 5448]]

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury. The Secretary 
     of the Treasury shall, before granting a revocation request, 
     provide the Pension Benefit Guaranty Corporation an 
     opportunity to comment on the conditions applicable to the 
     treatment of any portion of the election year shortfall 
     amortization base that remains unamortized as of the 
     revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required installments in certain cases.--
     Section 303(c) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end 
     the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary of the Treasury, 
     if a shortfall amortization installment with respect to any 
     shortfall amortization base for an election year is required 
     to be increased for any plan year under subparagraph (A)--
       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under 
     chapter 1 of the Internal Revenue Code of 1986 for 
     remuneration during the calendar year in which such plan year 
     begins for services performed by the employee for the plan 
     sponsor (whether or not performed during such calendar year), 
     over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for nonqualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary of the 
     Treasury), or transferred to such a trust or other 
     arrangement, by a plan sponsor for purposes of paying 
     deferred compensation of an employee under a nonqualified 
     deferred compensation plan (as defined in section 409A of 
     such Code) of the plan sponsor, then, for purposes of clause 
     (i), the amount of such assets shall be treated as 
     remuneration of the employee includible in income for the 
     calendar year unless such amount is otherwise includible in 
     income for such year. An amount to which the preceding 
     sentence applies shall not be taken into account under this 
     paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A of the 
     Internal Revenue Code of 1986) that, upon such grant, is 
     subject to a substantial risk of forfeiture (as defined under 
     section 83(c)(1) of such Code) for at least 5 years from the 
     date of such grant.
       ``(II) Secretarial authority.--The Secretary of the 
     Treasury may by regulation provide for the application of 
     this clause in the case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) of such Code for the taxable year ending 
     during such calendar year, and the term `compensation' shall 
     include earned income of such individual with respect to such 
     self-employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by

[[Page 5449]]

       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) of such Code for the calendar year, 
     determined by substituting `calendar year 2009' for `calendar 
     year 1992' in subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043) of the plan sponsor for the preceding plan 
     year, determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 302(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of this title).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 302(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election year (or, if later, the 
     first plan year beginning after December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary of the Treasury shall provide rules 
     for the application of this paragraph to such plans, 
     including rules for the ratable allocation of any installment 
     acceleration amount among such plans on the basis of each 
     plan's relative reduction in the plan's shortfall 
     amortization installment for the first plan year in the 
     amortization period described in subparagraph (A) (determined 
     without regard to this paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary of the 
     Treasury shall prescribe rules for the application of 
     paragraph (2)(D) and this paragraph in any case where there 
     is a merger or acquisition involving a plan sponsor making 
     the election under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 303 of such Act (29 
     U.S.C. 1083) is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (b) Amendments to Internal Revenue Code of 1986.--
       (1) In general.--Paragraph (2) of section 430(c) is amended 
     by adding at the end the following subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary, and may be revoked only with the consent of 
     the Secretary. The Secretary shall, before granting a 
     revocation request, provide the Pension Benefit Guaranty 
     Corporation an opportunity to comment on the conditions 
     applicable to the treatment of any portion of the election 
     year shortfall amortization base that remains unamortized as 
     of the revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required contributions if excess 
     compensation paid.--Section 430(c) is amended by adding at 
     the end the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary, if a shortfall 
     amortization installment with respect to any shortfall 
     amortization base for an election year is required to be 
     increased for any plan year under subparagraph (A)--

[[Page 5450]]

       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under this 
     chapter for remuneration during the calendar year in which 
     such plan year begins for services performed by the employee 
     for the plan sponsor (whether or not performed during such 
     calendar year), over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for non-qualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary), or 
     transferred to such a trust or other arrangement, by a plan 
     sponsor for purposes of paying deferred compensation of an 
     employee under a nonqualified deferred compensation plan (as 
     defined in section 409A) of the plan sponsor, then, for 
     purposes of clause (i), the amount of such assets shall be 
     treated as remuneration of the employee includible in income 
     for the calendar year unless such amount is otherwise 
     includible in income for such year. An amount to which the 
     preceding sentence applies shall not be taken into account 
     under this paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A) that, 
     upon such grant, is subject to a substantial risk of 
     forfeiture (as defined under section 83(c)(1)) for at least 5 
     years from the date of such grant.
       ``(II) Secretarial authority.--The Secretary may by 
     regulation provide for the application of this clause in the 
     case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) for the taxable year ending during such 
     calendar year, and the term `compensation' shall include 
     earned income of such individual with respect to such self-
     employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2009' for `calendar year 1992' in 
     subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043 of the Employee Retirement Income Security Act 
     of 1974) of the plan sponsor for the preceding plan year, 
     determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 412(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of title I of Employee 
     Retirement Income Security Act of 1974).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 412(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election

[[Page 5451]]

     year (or, if later, the first plan year beginning after 
     December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary shall provide rules for the 
     application of this paragraph to such plans, including rules 
     for the ratable allocation of any installment acceleration 
     amount among such plans on the basis of each plan's relative 
     reduction in the plan's shortfall amortization installment 
     for the first plan year in the amortization period described 
     in subparagraph (A) (determined without regard to this 
     paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary shall 
     prescribe rules for the application of paragraph (2)(D) and 
     this paragraph in any case where there is a merger or 
     acquisition involving a plan sponsor making the election 
     under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 430 is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2007.

     SEC. 232. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO 
                   PLANS SUBJECT TO PRIOR LAW FUNDING RULES.

       (a) In General.--Title I of the Pension Protection Act of 
     2006 is amended by redesignating section 107 as section 108 
     and by inserting the following after section 106:

     ``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO 
                   PLANS WITH DELAYED EFFECTIVE DATE.

       ``(a) In General.--If the plan sponsor of a plan to which 
     section 104, 105, or 106 of this Act applies elects to have 
     this section apply for any eligible plan year (in this 
     section referred to as an `election year'), section 302 of 
     the Employee Retirement Income Security Act of 1974 and 
     section 412 of the Internal Revenue Code of 1986 (as in 
     effect before the amendments made by this subtitle and 
     subtitle B) shall apply to such year in the manner described 
     in subsection (b) or (c), whichever is specified in the 
     election. All references in this section to `such Act' or 
     `such Code' shall be to such Act or such Code as in effect 
     before the amendments made by this subtitle and subtitle B.
       ``(b) Application of 2 and 7 Rule.--In the case of an 
     election year to which this subsection applies--
       ``(1) 2-year lookback for determining deficit reduction 
     contributions for certain plans.--For purposes of applying 
     section 302(d)(9) of such Act and section 412(l)(9) of such 
     Code, the funded current liability percentage (as defined in 
     subparagraph (C) thereof) for such plan for such plan year 
     shall be such funded current liability percentage of such 
     plan for the second plan year preceding the first election 
     year of such plan.
       ``(2) Calculation of deficit reduction contribution.--For 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code to a plan to which such sections apply 
     (after taking into account paragraph (1))--
       ``(A) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code shall be the third segment rate described in sections 
     104(b), 105(b), and 106(b) of this Act, and
       ``(B) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(c) Application of 15-Year Amortization.--In the case of 
     an election year to which this subsection applies, for 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code--
       ``(1) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code for any pre-effective date plan year beginning with or 
     after the first election year shall be the ratio of--
       ``(A) the annual installments payable in each year if the 
     increased unfunded new liability for such plan year were 
     amortized over 15 years, using an interest rate equal to the 
     third segment rate described in sections 104(b), 105(b), and 
     106(b) of this Act, to
       ``(B) the increased unfunded new liability for such plan 
     year, and
       ``(2) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(d) Election.--
       ``(1) In general.--The plan sponsor of a plan may elect to 
     have this section apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan to which section 106 of this Act applies, the plan 
     sponsor may only elect to have this section apply to 1 
     eligible plan year.
       ``(2) Amortization schedule.--Such election shall specify 
     whether the rules under subsection (b) or (c) shall apply to 
     an election year, except that if a plan sponsor elects to 
     have this section apply to 2 eligible plan years, the plan 
     sponsor must elect the same rule for both years.
       ``(3) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year beginning in 2008 shall only be treated as an 
     eligible plan year if the due date for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this clause.
       ``(2) Pre-effective date plan year.--The term `pre-
     effective date plan year' means, with respect to a plan, any 
     plan year prior to the first year in which the amendments 
     made by this subtitle and subtitle B apply to the plan.
       ``(3) Increased unfunded new liability.--The term 
     `increased unfunded new liability' means, with respect to a 
     year, the excess (if any) of the unfunded new liability over 
     the amount of unfunded new liability determined as if the 
     value of the plan's assets determined under subsection 
     302(c)(2) of such Act and section 412(c)(2) of such Code 
     equaled the product of the current liability of the plan for 
     the year multiplied by the funded current liability 
     percentage (as defined in section 302(d)(8)(B) of such Act 
     and 412(l)(8)(B) of such Code) of the plan for the second 
     plan year preceding the first election year of such plan.
       ``(4) Other definitions.--The terms `unfunded new 
     liability' and `current liability' shall have the meanings 
     set forth in section 302(d) of such Act and section 412(l) of 
     such Code.''.
       (b) Eligible Charity Plans.--Section 104 of the Pension 
     Protection Act of 2006 is amended--
       (1) by striking ``eligible cooperative plan'' wherever it 
     appears in subsections (a) and (b) and inserting ``eligible 
     cooperative plan or an eligible charity plan'', and
       (2) by adding at the end the following new subsection:
       ``(d) Eligible Charity Plan Defined.--For purposes of this 
     section, a plan shall be treated as an eligible charity plan 
     for a plan year if the plan is maintained by more than one 
     employer (determined without regard to section 414(c) of the 
     Internal Revenue Code) and 100 percent of the employers are 
     described in section 501(c)(3) of such Code.''.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect as if included in the Pension Protection Act of 
     2006.
       (2) Eligible charity plan.--The amendments made by 
     subsection (b) shall apply to plan years beginning after 
     December 31, 2007, except that a plan sponsor may elect to 
     apply such amendments to plan years beginning after December 
     31, 2008. Any such election shall be made at such time, and 
     in such form and manner, as shall be prescribed by the 
     Secretary of the Treasury, and may be revoked only with the 
     consent of the Secretary of the Treasury.

     SEC. 233. LOOKBACK FOR CERTAIN BENEFIT RESTRICTIONS.

       (a) In General.--
       (1) Amendment to erisa.--Section 206(g)(9) of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     at the end the following:
       ``(D) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(i) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--

       ``(I) such percentage, as determined without regard to this 
     subparagraph, or
       ``(II) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary of the Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before November 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

[[Page 5452]]

       ``(iii) Applicable provision.--For purposes of this 
     subparagraph, the term `applicable provision' means--

       ``(I) paragraph (3), but only for purposes of applying such 
     paragraph to a payment which, as determined under rules 
     prescribed by the Secretary of the Treasury, is a payment 
     under a social security leveling option which accelerates 
     payments under the plan before, and reduces payments after, a 
     participant starts receiving social security benefits in 
     order to provide substantially similar aggregate payments 
     both before and after such benefits are received, and
       ``(II) paragraph (4).''.

       (2) Amendment to internal revenue code of 1986.--Section 
     436(j) of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
       ``(3) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(A) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--
       ``(i) such percentage, as determined without regard to this 
     paragraph, or
       ``(ii) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary.
       ``(B) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--
       ``(i) subparagraph (A) shall apply to plan years beginning 
     after December 31, 2007, and before January 1, 2010, and
       ``(ii) subparagraph (A)(ii) shall apply based on the last 
     plan year beginning before November 1, 2007, as determined 
     under rules prescribed by the Secretary.
       ``(C) Applicable provision.--For purposes of this 
     paragraph, the term `applicable provision' means--
       ``(i) subsection (d), but only for purposes of applying 
     such paragraph to a payment which, as determined under rules 
     prescribed by the Secretary, is a payment under a social 
     security leveling option which accelerates payments under the 
     plan before, and reduces payments after, a participant starts 
     receiving social security benefits in order to provide 
     substantially similar aggregate payments both before and 
     after such benefits are received, and
       ``(ii) subsection (e).''.
       (b) Interaction With Wrera Rule.--Section 203 of the 
     Worker, Retiree, and Employer Recovery Act of 2008 shall 
     apply to a plan for any plan year in lieu of the amendments 
     made by this section applying to sections 206(g)(4) of the 
     Employee Retirement Income Security Act of 1974 and 436(e) of 
     the Internal Revenue Code of 1986 only to the extent that 
     such section produces a higher adjusted funding target 
     attainment percentage for such plan for such year.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning on or after October 1, 2008.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2007.

     SEC. 234. LOOKBACK FOR CREDIT BALANCE RULE FOR PLANS 
                   MAINTAINED BY CHARITIES.

       (a) Amendment to Erisa.--Paragraph (3) of section 303(f) of 
     the Employee Retirement Income Security Act of 1974 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year shall be the greater 
     of--

       ``(I) such ratio, as determined without regard to this 
     subparagraph, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007, and before September 1, 2008, as 
     determined under rules prescribed by the Secretary of the 
     Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2008, and before January 1, 2011, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3) of the Internal Revenue Code of 1986.''.
       (b) Amendment to Internal Revenue Code of 1986.--Paragraph 
     (3) of section 430(f) of the Internal Revenue Code of 1986 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year of a plan shall be 
     the greater of--

       ``(I) such ratio, as determined without regard to this 
     subsection, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007 and before September 1, 2008, as 
     determined under rules prescribed by the Secretary.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning after August 31, 2009.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2008.

                      PART II--MULTIEMPLOYER PLANS

     SEC. 241. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.

       (a) Adjustments.--
       (1) Amendment to erisa.--Section 304(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is 
     amended by adding at the end the following new paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period--

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary of the 
     Treasury on the basis of the difference between actual and 
     expected returns (including any difference attributable to 
     any criminally fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary of the Treasury for purposes of section 165 of the 
     Internal Revenue Code of 1986.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary of the Treasury shall not treat the 
     asset valuation method of the plan as unreasonable solely 
     because of the changes in such method described in clause 
     (i), and
       ``(II) such changes shall be deemed approved by such 
     Secretary under section 302(d)(1) and section 412(d)(1) of 
     such Code.

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for

[[Page 5453]]

     any plan year, the plan shall treat any reduction in unfunded 
     accrued liability resulting from the application of this 
     subparagraph as a separate experience amortization base, to 
     be amortized in equal annual installments (until fully 
     amortized) over a period of 30 plan years rather than the 
     period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D of chapter 1 of 
     the Internal Revenue Code of 1986 or to comply with other 
     applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (2) Amendment to internal revenue code of 1986.--Section 
     431(b) is amended by adding at the end the following new 
     paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period--

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary on the 
     basis of the difference between actual and expected returns 
     (including any difference attributable to any criminally 
     fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary for purposes of section 165.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary shall not treat the asset valuation 
     method of the plan as unreasonable solely because of the 
     changes in such method described in clause (i), and
       ``(II) such changes shall be deemed approved by the 
     Secretary under section 302(d)(1) of the Employee Retirement 
     Income Security Act of 1974 and section 412(d)(1).

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D or to comply with 
     other applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (b) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     take effect as of the first day of the first plan year ending 
     after August 31, 2008, except that any election a plan makes 
     pursuant to this section that affects the plan's funding 
     standard account for the first plan year beginning after 
     August 31, 2008, shall be disregarded for purposes of 
     applying the provisions of section 305 of the Employee 
     Retirement Income Security Act of 1974 and section 432 of the 
     Internal Revenue Code of 1986 to such plan year.
       (2) Restrictions on benefit increases.--Notwithstanding 
     paragraph (1), the restrictions on plan amendments increasing 
     benefits in sections 304(b)(8)(D) of such Act and 
     431(b)(8)(D) of such Code, as added by this section, shall 
     take effect on the date of enactment of this Act.
                                 ______
                                 
  SA 3727. Mr. COBURN proposed an amendment to amendment SA 3721 
proposed by Mr. Baucus to the bill H.R. 4851, to provide a temporary 
extension of certain programs, and for other purposes; as follows:

       At the end of the amendment, insert the following:

                       TITLE II--OFFSETS FOR ACT

                 Subtitle A--Revenue Offset Provisions

     SEC. 201. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title 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. 202. INFORMATION REPORTING FOR RENTAL PROPERTY EXPENSE 
                   PAYMENTS.

       (a) In General.--Section 6041 is amended by adding at the 
     end the following new subsection:
       ``(h) Treatment of Rental Property Expense Payments.--
       ``(1) In general.--For purposes of subsection (a), a person 
     receiving rental income from real estate (other than a 
     qualified residence) shall be considered to be engaged in a 
     trade or business of renting property.
       ``(2) Qualified residence.--For purposes of paragraph (1), 
     the term `qualified residence' means--
       ``(A) the principal residence (within the meaning of 
     section 121) of the taxpayer, and
       ``(B) 1 other residence of the taxpayer which is selected 
     by the taxpayer for purposes of this subsection for the 
     taxable year and which is used by the taxpayer as a residence 
     (within the meaning of section 280A(d)(1)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments made after December 31, 2010.

     SEC. 203. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL 
                   PRODUCER CREDIT.

       (a) In General.--Section 40(B)(6)(E) is amended by adding 
     at the end the following new clause:
       ``(iv) Exclusion of certain processed fuels with a high 
     acid content.--The term

[[Page 5454]]

     `cellulosic biofuel' shall not include any processed fuel 
     with an acid number greater than 25. For purposes of the 
     preceding sentence, the term `processed fuel' means any fuel 
     other than a fuel--

       ``(I) more than 4 percent of which (determined by weight) 
     is any combination of water and sediment, or
       ``(II) the ash content of which is more than 1 percent 
     (determined by weight).''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to fuels sold or used on or after January 1, 
     2010.

     SEC. 204. ELIMINATION OF ADVANCE REFUNDABILITY OF EARNED 
                   INCOME CREDIT.

       (a) In General.--Section 3507, subsection (g) of section 
     32, and paragraph (7) of section 6051(a) are repealed.
       (b) Conforming Amendments.--
       (1) Section 6012(a) is amended by striking paragraph (8) 
     and by redesignating paragraph (9) as paragraph (8).
       (2) Section 6302 is amended by striking subsection (i).
       (c) Effective Date.--The repeals and amendments made by 
     this section shall apply to taxable years beginning after 
     December 31, 2010.

     SEC. 205. UNEMPLOYMENT INSURANCE PROGRAM INTEGRITY.

       (a) Reporting of First Day of Earnings to Directory of New 
     Hires.--
       (1) In general.--Section 453A(b)(1)(A) of the Social 
     Security Act (42 U.S.C. 653a(b)(1)(A)) is amended by 
     inserting ``the date services for remuneration were first 
     performed by the employee,'' after ``of the employee,''.
       (2) Reporting format and method.--Section 453A(c) of the 
     Social Security Act (42 U.S.C. 653a(c)) is amended by 
     inserting ``, to the extent practicable,'' after ``Each 
     report required by subsection (b) shall''.
       (3) Effective date.--
       (A) In general.--Subject to subparagraph (B), the 
     amendments made by this subsection shall take effect 6 months 
     after the date of enactment of this Act.
       (B) Compliance transition period.--If the Secretary of 
     Health and Human Services determines that State legislation 
     (other than legislation appropriating funds) is required in 
     order for a State plan under part D of title IV of the Social 
     Security Act to meet the additional requirements imposed by 
     the amendment made by paragraph (1), the plan shall not be 
     regarded as failing to meet such requirements before the 
     first day of the second calendar quarter beginning after the 
     close of the first regular session of the State legislature 
     that begins after the effective date of such amendment. If 
     the State has a 2-year legislative session, each year of the 
     session is deemed to be a separate regular session of the 
     State legislature.
       (b) Extension and Modification of Collection of Past-Due 
     Debt for Erroneous Payment of Unemployment Compensation.--
       (1) Permanent extension.--Subsection (f) of section 6402 is 
     amended by striking paragraph (8).
       (2) Collection in all states.--Subsection (f) of section 
     6402, as amended by paragraph (1), is amended by striking 
     paragraph (3) and redesignating paragraphs (4) through (7) as 
     paragraphs (3) through (6), respectively.
       (3) Collection for reasons other than fraud.--
       (A) In general.--Paragraph (4) of section 6402(f), as 
     redesignated by paragraph (2), is amended by striking ``due 
     to fraud'' each place it appears.
       (B) Conforming amendments.--Section 6402(f) is amended--
       (i) in paragraph (3), as redesignated by paragraph (2)--

       (I) by striking ``or due to fraud'' in subparagraph (B), 
     and
       (II) by striking ``and due to fraud'' in subparagraph (C), 
     and

       (ii) in the heading, by striking ``Resulting From Fraud''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to refunds payable on or after the date of the 
     enactment of this Act.

     SEC. 206. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
                   ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
                   CONTRIBUTIONS.

       (a) In General.--Section 402A(e)(1) (defining applicable 
     retirement plan) 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 adding at 
     the end the following:
       ``(C) an eligible deferred compensation plan (as defined in 
     section 457(b)) of an eligible employer described in section 
     457(e)(1)(A).''.
       (b) Elective Deferrals.--Section 402A(e)(2) (defining 
     elective deferral) is amended to read as follows:
       ``(2) Elective deferral.--The term `elective deferral' 
     means--
       ``(A) any elective deferral described in subparagraph (A) 
     or (C) of section 402(g)(3), and
       ``(B) any elective deferral of compensation by an 
     individual under an eligible deferred compensation plan (as 
     defined in section 457(b)) of an eligible employer described 
     in section 457(e)(1)(A).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2010.

     SEC. 207. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure To File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$1,500,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$30''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$250,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$500,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$500,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$200,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Adjustment for Inflation.--Section 6721 is amended by 
     adding at the end the following new subsection:
       ``(f) Adjustment for Inflation.--
       ``(1) In general.--For each fifth calendar year beginning 
     after 2012, each of the dollar amounts under subsections (a), 
     (b), (d) (other than paragraph (2)(A) thereof), and (e) shall 
     be increased by such dollar amount multiplied by the cost-of-
     living adjustment determined under section 1(f)(3) determined 
     by substituting `calendar year 2011' for `calendar year 1992' 
     in subparagraph (B) thereof.
       ``(2) Rounding.--If any amount adjusted under paragraph 
     (1)--
       ``(A) is not less than $75,000 and is not a multiple of 
     $500, such amount shall be rounded to the next lowest 
     multiple of $500, and
       ``(B) is not described in subparagraph (A) and is not a 
     multiple of $10, such amount shall be rounded to the next 
     lowest multiple of $10.''.
       (g) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2011.

     SEC. 208. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO ROTH 
                   DESIGNATED ACCOUNTS.

       (a) In General.--Section 402A(c) is amended by adding at 
     the end the following new paragraph:
       ``(4) Taxable rollovers to designated roth accounts.--
       ``(A) In general.--Notwithstanding sections 402(c), 
     403(b)(8), and 457(e)(16), in the case of any distribution to 
     which this paragraph applies--
       ``(i) there shall be included in gross income any amount 
     which would be includible were it not part of a qualified 
     rollover contribution,
       ``(ii) section 72(t) shall not apply, and
       ``(iii) unless the taxpayer elects not to have this clause 
     apply, any amount required to be included in gross income for 
     any taxable year beginning in 2010 by reason of this 
     paragraph shall be so included ratably over the 2-taxable-
     year period beginning with the first taxable year beginning 
     in 2011.

     Any election under clause (iii) for any distributions during 
     a taxable year may not be changed after the due date for such 
     taxable year.
       ``(B) Distributions to which paragraph applies.--In the 
     case of an applicable retirement plan which includes a 
     qualified Roth contribution program, this paragraph shall 
     apply to a distribution from such plan other than from a 
     designated Roth account which is contributed in a qualified 
     rollover contribution to the designated Roth account 
     maintained under such plan for the benefit of the individual 
     to whom the distribution is made.
       ``(C) Other rules.--The rules of subparagraphs (D), (E), 
     and (F) of section 408A(d)(3) (as in effect for taxable years 
     beginning after 2009) shall apply for purposes of this 
     paragraph.''.
       (b) Conforming Amendment.--Section 402A(d)(3)(A) is amended 
     by striking ``A'' and inserting ``Except as provided in 
     paragraph (4), a''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions in plan years beginning after 
     December 31, 2009.

[[Page 5455]]



                   Subtitle B--Pension Funding Relief

                     PART I--SINGLE EMPLOYER PLANS

     SEC. 211. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT 
                   PLANS TO AMORTIZE CERTAIN SHORTFALL 
                   AMORTIZATION BASES.

       (a) Amendments to ERISA.--
       (1) In general.--Paragraph (2) of section 303(c) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1083(c)) is amended by adding at the end the following 
     subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.
       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury. The Secretary 
     of the Treasury shall, before granting a revocation request, 
     provide the Pension Benefit Guaranty Corporation an 
     opportunity to comment on the conditions applicable to the 
     treatment of any portion of the election year shortfall 
     amortization base that remains unamortized as of the 
     revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required installments in certain cases.--
     Section 303(c) of the Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end 
     the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary of the Treasury, 
     if a shortfall amortization installment with respect to any 
     shortfall amortization base for an election year is required 
     to be increased for any plan year under subparagraph (A)--
       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under 
     chapter 1 of the Internal Revenue Code of 1986 for 
     remuneration during the calendar year in which such plan year 
     begins for services performed by the employee for the plan 
     sponsor (whether or not performed during such calendar year), 
     over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for nonqualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary of the 
     Treasury), or transferred to such a trust or other 
     arrangement, by a plan sponsor for purposes of paying 
     deferred compensation of an employee under a nonqualified 
     deferred compensation plan (as defined in section 409A of 
     such Code) of the plan sponsor, then, for purposes of clause 
     (i), the amount of such assets shall be treated as 
     remuneration of the employee includible in

[[Page 5456]]

     income for the calendar year unless such amount is otherwise 
     includible in income for such year. An amount to which the 
     preceding sentence applies shall not be taken into account 
     under this paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A of the 
     Internal Revenue Code of 1986) that, upon such grant, is 
     subject to a substantial risk of forfeiture (as defined under 
     section 83(c)(1) of such Code) for at least 5 years from the 
     date of such grant.
       ``(II) Secretarial authority.--The Secretary of the 
     Treasury may by regulation provide for the application of 
     this clause in the case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) of such Code for the taxable year ending 
     during such calendar year, and the term `compensation' shall 
     include earned income of such individual with respect to such 
     self-employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) of such Code for the calendar year, 
     determined by substituting `calendar year 2009' for `calendar 
     year 1992' in subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

       ``(I) the adjusted net income (within the meaning of 
     section 4043) of the plan sponsor for the preceding plan 
     year, determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 302(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of this title).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 302(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election year (or, if later, the 
     first plan year beginning after December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary of the Treasury shall provide rules 
     for the application of this paragraph to such plans, 
     including rules for the ratable allocation of any installment 
     acceleration amount among such plans on the basis of each 
     plan's relative reduction in the plan's shortfall 
     amortization installment for the first plan year in the 
     amortization period described in subparagraph (A) (determined 
     without regard to this paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary of the 
     Treasury shall prescribe rules for the application of 
     paragraph (2)(D) and this paragraph in any case where there 
     is a merger or acquisition involving a plan sponsor making 
     the election under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 303 of such Act (29 
     U.S.C. 1083) is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (b) Amendments to Internal Revenue Code of 1986.--
       (1) In general.--Paragraph (2) of section 430(c) is amended 
     by adding at the end the following subparagraph:
       ``(D) Special election for eligible plan years.--
       ``(i) In general.--If a plan sponsor elects to apply this 
     subparagraph with respect to the shortfall amortization base 
     of a plan for any eligible plan year (in this subparagraph 
     and paragraph (7) referred to as an `election year'), then, 
     notwithstanding subparagraphs (A) and (B)--

       ``(I) the shortfall amortization installments with respect 
     to such base shall be determined under clause (ii) or (iii), 
     whichever is specified in the election, and
       ``(II) the shortfall amortization installment for any plan 
     year in the 9-plan-year period described in clause (ii) or 
     the 15-plan-year period described in clause (iii), 
     respectively, with respect to such shortfall amortization 
     base is the annual installment determined under the 
     applicable clause for that year for that base.

       ``(ii) 2 plus 7 amortization schedule.--The shortfall 
     amortization installments determined under this clause are--

       ``(I) in the case of the first 2 plan years in the 9-plan-
     year period beginning with the election year, interest on the 
     shortfall amortization base of the plan for the election year 
     (determined using the effective interest rate for the plan 
     for the election year), and
       ``(II) in the case of the last 7 plan years in such 9-plan-
     year period, the amounts necessary to amortize the remaining 
     balance of the shortfall amortization base of the plan for 
     the election year in level annual installments over such last 
     7 plan years (using the segment rates under subparagraph (C) 
     for the election year).

       ``(iii) 15-year amortization.--The shortfall amortization 
     installments determined under this subparagraph are the 
     amounts necessary to amortize the shortfall amortization base 
     of the plan for the election year in level annual 
     installments over the 15-plan-year period beginning with the 
     election year (using the segment rates under subparagraph (C) 
     for the election year).
       ``(iv) Election.--

       ``(I) In general.--The plan sponsor of a plan may elect to 
     have this subparagraph apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan described in section 106 of the Pension Protection Act 
     of 2006, the plan sponsor may only elect to have this 
     subparagraph apply to a plan year beginning in 2011.
       ``(II) Amortization schedule.--Such election shall specify 
     whether the amortization schedule under clause (ii) or (iii) 
     shall apply to an election year, except that if a plan 
     sponsor elects to have this subparagraph apply to 2 eligible 
     plan years, the plan sponsor must elect the same schedule for 
     both years.

[[Page 5457]]

       ``(III) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary, and may be revoked only with the consent of 
     the Secretary. The Secretary shall, before granting a 
     revocation request, provide the Pension Benefit Guaranty 
     Corporation an opportunity to comment on the conditions 
     applicable to the treatment of any portion of the election 
     year shortfall amortization base that remains unamortized as 
     of the revocation date.

       ``(v) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year shall only be treated as an eligible plan year if 
     the due date under subsection (j)(1) for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this subparagraph.
       ``(vi) Reporting.--A plan sponsor of a plan who makes an 
     election under clause (i) shall--

       ``(I) give notice of the election to participants and 
     beneficiaries of the plan, and
       ``(II) inform the Pension Benefit Guaranty Corporation of 
     such election in such form and manner as the Director of the 
     Pension Benefit Guaranty Corporation may prescribe.

       ``(vii) Increases in required installments in certain 
     cases.--For increases in required contributions in cases of 
     excess compensation or extraordinary dividends or stock 
     redemptions, see paragraph (7).''.
       (2) Increases in required contributions if excess 
     compensation paid.--Section 430(c) is amended by adding at 
     the end the following paragraph:
       ``(7) Increases in alternate required installments in cases 
     of excess compensation or extraordinary dividends or stock 
     redemptions.--
       ``(A) In general.--If there is an installment acceleration 
     amount with respect to a plan for any plan year in the 
     restriction period with respect to an election year under 
     paragraph (2)(D), then the shortfall amortization installment 
     otherwise determined and payable under such paragraph for 
     such plan year shall, subject to the limitation under 
     subparagraph (B), be increased by such amount.
       ``(B) Total installments limited to shortfall base.--
     Subject to rules prescribed by the Secretary, if a shortfall 
     amortization installment with respect to any shortfall 
     amortization base for an election year is required to be 
     increased for any plan year under subparagraph (A)--
       ``(i) such increase shall not result in the amount of such 
     installment exceeding the present value of such installment 
     and all succeeding installments with respect to such base 
     (determined without regard to such increase but after 
     application of clause (ii)), and
       ``(ii) subsequent shortfall amortization installments with 
     respect to such base shall, in reverse order of the otherwise 
     required installments, be reduced to the extent necessary to 
     limit the present value of such subsequent shortfall 
     amortization installments (after application of this 
     paragraph) to the present value of the remaining unamortized 
     shortfall amortization base.
       ``(C) Installment acceleration amount.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `installment acceleration 
     amount' means, with respect to any plan year in a restriction 
     period with respect to an election year, the sum of--

       ``(I) the aggregate amount of excess employee compensation 
     determined under subparagraph (D) with respect to all 
     employees for the plan year, plus
       ``(II) the aggregate amount of extraordinary dividends and 
     redemptions determined under subparagraph (E) for the plan 
     year.

       ``(ii) Annual limitation.--The installment acceleration 
     amount for any plan year shall not exceed the excess (if any) 
     of--

       ``(I) the sum of the shortfall amortization installments 
     for the plan year and all preceding plan years in the 
     amortization period elected under paragraph (2)(D) with 
     respect to the shortfall amortization base with respect to an 
     election year, determined without regard to paragraph (2)(D) 
     and this paragraph, over
       ``(II) the sum of the shortfall amortization installments 
     for such plan year and all such preceding plan years, 
     determined after application of paragraph (2)(D) (and in the 
     case of any preceding plan year, after application of this 
     paragraph).

       ``(iii) Carryover of excess installment acceleration 
     amounts.--

       ``(I) In general.--If the installment acceleration amount 
     for any plan year (determined without regard to clause (ii)) 
     exceeds the limitation under clause (ii), then, subject to 
     subclause (II), such excess shall be treated as an 
     installment acceleration amount with respect to the 
     succeeding plan year.
       ``(II) Cap to apply.--If any amount treated as an 
     installment acceleration amount under subclause (I) or this 
     subclause with respect any succeeding plan year, when added 
     to other installment acceleration amounts (determined without 
     regard to clause (ii)) with respect to the plan year, exceeds 
     the limitation under clause (ii), the portion of such amount 
     representing such excess shall be treated as an installment 
     acceleration amount with respect to the next succeeding plan 
     year.
       ``(III) Limitation on years to which amounts carried for.--
     No amount shall be carried under subclause (I) or (II) to a 
     plan year which begins after the first plan year following 
     the last plan year in the restriction period (or after the 
     second plan year following such last plan year in the case of 
     an election year with respect to which 15-year amortization 
     was elected under paragraph (2)(D)).
       ``(IV) Ordering rules.--For purposes of applying subclause 
     (II), installment acceleration amounts for the plan year 
     (determined without regard to any carryover under this 
     clause) shall be applied first against the limitation under 
     clause (ii) and then carryovers to such plan year shall be 
     applied against such limitation on a first-in, first-out 
     basis.

       ``(D) Excess employee compensation.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `excess employee compensation' 
     means, with respect to any employee for any plan year, the 
     excess (if any) of--

       ``(I) the aggregate amount includible in income under this 
     chapter for remuneration during the calendar year in which 
     such plan year begins for services performed by the employee 
     for the plan sponsor (whether or not performed during such 
     calendar year), over
       ``(II) $1,000,000.

       ``(ii) Amounts set aside for nonqualified deferred 
     compensation.--If during any calendar year assets are set 
     aside or reserved (directly or indirectly) in a trust (or 
     other arrangement as determined by the Secretary), or 
     transferred to such a trust or other arrangement, by a plan 
     sponsor for purposes of paying deferred compensation of an 
     employee under a nonqualified deferred compensation plan (as 
     defined in section 409A) of the plan sponsor, then, for 
     purposes of clause (i), the amount of such assets shall be 
     treated as remuneration of the employee includible in income 
     for the calendar year unless such amount is otherwise 
     includible in income for such year. An amount to which the 
     preceding sentence applies shall not be taken into account 
     under this paragraph for any subsequent calendar year.
       ``(iii) Only remuneration for certain post-2009 services 
     counted.--Remuneration shall be taken into account under 
     clause (i) only to the extent attributable to services 
     performed by the employee for the plan sponsor after February 
     28, 2010.
       ``(iv) Exception for certain equity payments.--

       ``(I) In general.--There shall not be taken into account 
     under clause (i)(I) any amount includible in income with 
     respect to the granting after February 28, 2010, of service 
     recipient stock (within the meaning of section 409A) that, 
     upon such grant, is subject to a substantial risk of 
     forfeiture (as defined under section 83(c)(1)) for at least 5 
     years from the date of such grant.
       ``(II) Secretarial authority.--The Secretary may by 
     regulation provide for the application of this clause in the 
     case of a person other than a corporation.

       ``(v) Other exceptions.--The following amounts includible 
     in income shall not be taken into account under clause 
     (i)(I):

       ``(I) Commissions.--Any remuneration payable on a 
     commission basis solely on account of income directly 
     generated by the individual performance of the individual to 
     whom such remuneration is payable.
       ``(II) Certain payments under existing contracts.--Any 
     remuneration consisting of nonqualified deferred 
     compensation, restricted stock, stock options, or stock 
     appreciation rights payable or granted under a written 
     binding contract that was in effect on March 1, 2010, and 
     which was not modified in any material respect before such 
     remuneration is paid.

       ``(vi) Self-employed individual treated as employee.--The 
     term `employee' includes, with respect to a calendar year, a 
     self-employed individual who is treated as an employee under 
     section 401(c) for the taxable year ending during such 
     calendar year, and the term `compensation' shall include 
     earned income of such individual with respect to such self-
     employment.
       ``(vii) Indexing of amount.--In the case of any calendar 
     year beginning after 2010, the dollar amount under clause 
     (i)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2009' for `calendar year 1992' in 
     subparagraph (B) thereof.

     If the amount of any increase under clause (i) is not a 
     multiple of $1,000, such increase shall be rounded to the 
     next lowest multiple of $1,000.
       ``(E) Extraordinary dividends and redemptions.--
       ``(i) In general.--The amount determined under this 
     subparagraph for any plan year is the excess (if any) of the 
     sum of the dividends declared during the plan year by the 
     plan sponsor plus the aggregate amount paid for the 
     redemption of stock of the plan sponsor redeemed during the 
     plan year over the greater of--

[[Page 5458]]

       ``(I) the adjusted net income (within the meaning of 
     section 4043 of the Employee Retirement Income Security Act 
     of 1974) of the plan sponsor for the preceding plan year, 
     determined without regard to any reduction by reason of 
     interest, taxes, depreciation, or amortization, or
       ``(II) in the case of a plan sponsor that determined and 
     declared dividends in the same manner for at least 5 
     consecutive years immediately preceding such plan year, the 
     aggregate amount of dividends determined and declared for 
     such plan year using such manner.

       ``(ii) Only certain post-2009 dividends and redemptions 
     counted.--For purposes of clause (i), there shall only be 
     taken into account dividends declared, and redemptions 
     occurring, after February 28, 2010.
       ``(iii) Exception for intra-group dividends.--Dividends 
     paid by one member of a controlled group (as defined in 
     section 412(d)(3)) to another member of such group shall not 
     be taken into account under clause (i).
       ``(iv) Exception for certain redemptions.--Redemptions that 
     are made pursuant to a plan maintained with respect to 
     employees, or that are made on account of the death, 
     disability, or termination of employment of an employee or 
     shareholder, shall not be taken into account under clause 
     (i).
       ``(v) Exception for certain preferred stock.--

       ``(I) In general.--Dividends and redemptions with respect 
     to applicable preferred stock shall not be taken into account 
     under clause (i) to the extent that dividends accrue with 
     respect to such stock at a specified rate in all events and 
     without regard to the plan sponsor's income, and interest 
     accrues on any unpaid dividends with respect to such stock.
       ``(II) Applicable preferred stock.--For purposes of 
     subclause (I), the term `applicable preferred stock' means 
     preferred stock which was issued before March 1, 2010 (or 
     which was issued after such date and is held by an employee 
     benefit plan subject to the provisions of title I of Employee 
     Retirement Income Security Act of 1974).

       ``(F) Other definitions and rules.--For purposes of this 
     paragraph--
       ``(i) Plan sponsor.--The term ` plan sponsor' includes any 
     member of the plan sponsor's controlled group (as defined in 
     section 412(d)(3)).
       ``(ii) Restriction period.--The term `restriction period' 
     means, with respect to any election year--

       ``(I) except as provided in subclause (II), the 3-year 
     period beginning with the election year (or, if later, the 
     first plan year beginning after December 31, 2009), and
       ``(II) if the plan sponsor elects 15-year amortization for 
     the shortfall amortization base for the election year, the 5-
     year period beginning with the election year (or, if later, 
     the first plan year beginning after December 31, 2009).

       ``(iii) Elections for multiple plans.--If a plan sponsor 
     makes elections under paragraph (2)(D) with respect to 2 or 
     more plans, the Secretary shall provide rules for the 
     application of this paragraph to such plans, including rules 
     for the ratable allocation of any installment acceleration 
     amount among such plans on the basis of each plan's relative 
     reduction in the plan's shortfall amortization installment 
     for the first plan year in the amortization period described 
     in subparagraph (A) (determined without regard to this 
     paragraph).
       ``(iv) Mergers and acquisitions.--The Secretary shall 
     prescribe rules for the application of paragraph (2)(D) and 
     this paragraph in any case where there is a merger or 
     acquisition involving a plan sponsor making the election 
     under paragraph (2)(D).''.
       (3) Conforming amendments.--Section 430 is amended--
       (A) in subsection (c)(1), by striking ``the shortfall 
     amortization bases for such plan year and each of the 6 
     preceding plan years'' and inserting ``any shortfall 
     amortization base which has not been fully amortized under 
     this subsection'', and
       (B) in subsection (j)(3), by adding at the end the 
     following:
       ``(F) Quarterly contributions not to include certain 
     increased contributions.--Subparagraph (D) shall be applied 
     without regard to any increase under subsection (c)(7).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning after December 31, 2007.

     SEC. 212. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO 
                   PLANS SUBJECT TO PRIOR LAW FUNDING RULES.

       (a) In General.--Title I of the Pension Protection Act of 
     2006 is amended by redesignating section 107 as section 108 
     and by inserting the following after section 106:

     ``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO 
                   PLANS WITH DELAYED EFFECTIVE DATE.

       ``(a) In General.--If the plan sponsor of a plan to which 
     section 104, 105, or 106 of this Act applies elects to have 
     this section apply for any eligible plan year (in this 
     section referred to as an `election year'), section 302 of 
     the Employee Retirement Income Security Act of 1974 and 
     section 412 of the Internal Revenue Code of 1986 (as in 
     effect before the amendments made by this subtitle and 
     subtitle B) shall apply to such year in the manner described 
     in subsection (b) or (c), whichever is specified in the 
     election. All references in this section to `such Act' or 
     `such Code' shall be to such Act or such Code as in effect 
     before the amendments made by this subtitle and subtitle B.
       ``(b) Application of 2 and 7 Rule.--In the case of an 
     election year to which this subsection applies--
       ``(1) 2-year lookback for determining deficit reduction 
     contributions for certain plans.--For purposes of applying 
     section 302(d)(9) of such Act and section 412(l)(9) of such 
     Code, the funded current liability percentage (as defined in 
     subparagraph (C) thereof) for such plan for such plan year 
     shall be such funded current liability percentage of such 
     plan for the second plan year preceding the first election 
     year of such plan.
       ``(2) Calculation of deficit reduction contribution.--For 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code to a plan to which such sections apply 
     (after taking into account paragraph (1))--
       ``(A) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code shall be the third segment rate described in sections 
     104(b), 105(b), and 106(b) of this Act, and
       ``(B) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(c) Application of 15-Year Amortization.--In the case of 
     an election year to which this subsection applies, for 
     purposes of applying section 302(d) of such Act and section 
     412(l) of such Code--
       ``(1) in the case of the increased unfunded new liability 
     of the plan, the applicable percentage described in section 
     302(d)(4)(C) of such Act and section 412(l)(4)(C) of such 
     Code for any pre-effective date plan year beginning with or 
     after the first election year shall be the ratio of--
       ``(A) the annual installments payable in each year if the 
     increased unfunded new liability for such plan year were 
     amortized over 15 years, using an interest rate equal to the 
     third segment rate described in sections 104(b), 105(b), and 
     106(b) of this Act, to
       ``(B) the increased unfunded new liability for such plan 
     year, and
       ``(2) in the case of the excess of the unfunded new 
     liability over the increased unfunded new liability, such 
     applicable percentage shall be determined without regard to 
     this section.
       ``(d) Election.--
       ``(1) In general.--The plan sponsor of a plan may elect to 
     have this section apply to not more than 2 eligible plan 
     years with respect to the plan, except that in the case of a 
     plan to which section 106 of this Act applies, the plan 
     sponsor may only elect to have this section apply to 1 
     eligible plan year.
       ``(2) Amortization schedule.--Such election shall specify 
     whether the rules under subsection (b) or (c) shall apply to 
     an election year, except that if a plan sponsor elects to 
     have this section apply to 2 eligible plan years, the plan 
     sponsor must elect the same rule for both years.
       ``(3) Other rules.--Such election shall be made at such 
     time, and in such form and manner, as shall be prescribed by 
     the Secretary of the Treasury, and may be revoked only with 
     the consent of the Secretary of the Treasury.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Eligible plan year.--For purposes of this 
     subparagraph, the term `eligible plan year' means any plan 
     year beginning in 2008, 2009, 2010, or 2011, except that a 
     plan year beginning in 2008 shall only be treated as an 
     eligible plan year if the due date for the payment of the 
     minimum required contribution for such plan year occurs on or 
     after the date of the enactment of this clause.
       ``(2) Pre-effective date plan year.--The term `pre-
     effective date plan year' means, with respect to a plan, any 
     plan year prior to the first year in which the amendments 
     made by this subtitle and subtitle B apply to the plan.
       ``(3) Increased unfunded new liability.--The term 
     `increased unfunded new liability' means, with respect to a 
     year, the excess (if any) of the unfunded new liability over 
     the amount of unfunded new liability determined as if the 
     value of the plan's assets determined under subsection 
     302(c)(2) of such Act and section 412(c)(2) of such Code 
     equaled the product of the current liability of the plan for 
     the year multiplied by the funded current liability 
     percentage (as defined in section 302(d)(8)(B) of such Act 
     and 412(l)(8)(B) of such Code) of the plan for the second 
     plan year preceding the first election year of such plan.
       ``(4) Other definitions.--The terms `unfunded new 
     liability' and `current liability' shall have the meanings 
     set forth in section 302(d) of such Act and section 412(l) of 
     such Code.''.
       (b) Eligible Charity Plans.--Section 104 of the Pension 
     Protection Act of 2006 is amended--
       (1) by striking ``eligible cooperative plan'' wherever it 
     appears in subsections (a) and (b)

[[Page 5459]]

     and inserting ``eligible cooperative plan or an eligible 
     charity plan'', and
       (2) by adding at the end the following new subsection:
       ``(d) Eligible Charity Plan Defined.--For purposes of this 
     section, a plan shall be treated as an eligible charity plan 
     for a plan year if the plan is maintained by more than one 
     employer (determined without regard to section 414(c) of the 
     Internal Revenue Code) and 100 percent of the employers are 
     described in section 501(c)(3) of such Code.''.
       (c) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect as if included in the Pension Protection Act of 
     2006.
       (2) Eligible charity plan.--The amendments made by 
     subsection (b) shall apply to plan years beginning after 
     December 31, 2007, except that a plan sponsor may elect to 
     apply such amendments to plan years beginning after December 
     31, 2008. Any such election shall be made at such time, and 
     in such form and manner, as shall be prescribed by the 
     Secretary of the Treasury, and may be revoked only with the 
     consent of the Secretary of the Treasury.

     SEC. 213. LOOKBACK FOR CERTAIN BENEFIT RESTRICTIONS.

       (a) In General.--
       (1) Amendment to erisa.--Section 206(g)(9) of the Employee 
     Retirement Income Security Act of 1974 is amended by adding 
     at the end the following:
       ``(D) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(i) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--

       ``(I) such percentage, as determined without regard to this 
     subparagraph, or
       ``(II) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary of the Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before November 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Applicable provision.--For purposes of this 
     subparagraph, the term `applicable provision' means--

       ``(I) paragraph (3), but only for purposes of applying such 
     paragraph to a payment which, as determined under rules 
     prescribed by the Secretary of the Treasury, is a payment 
     under a social security leveling option which accelerates 
     payments under the plan before, and reduces payments after, a 
     participant starts receiving social security benefits in 
     order to provide substantially similar aggregate payments 
     both before and after such benefits are received, and
       ``(II) paragraph (4).''.

       (2) Amendment to internal revenue code of 1986.--Section 
     436(j) of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
       ``(3) Special rule for certain years.--Solely for purposes 
     of any applicable provision--
       ``(A) In general.--For plan years beginning on or after 
     October 1, 2008, and before October 1, 2010, the adjusted 
     funding target attainment percentage of a plan shall be the 
     greater of--
       ``(i) such percentage, as determined without regard to this 
     paragraph, or
       ``(ii) the adjusted funding target attainment percentage 
     for such plan for the plan year beginning after October 1, 
     2007, and before October 1, 2008, as determined under rules 
     prescribed by the Secretary.
       ``(B) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--
       ``(i) subparagraph (A) shall apply to plan years beginning 
     after December 31, 2007, and before January 1, 2010, and
       ``(ii) subparagraph (A)(ii) shall apply based on the last 
     plan year beginning before November 1, 2007, as determined 
     under rules prescribed by the Secretary.
       ``(C) Applicable provision.--For purposes of this 
     paragraph, the term `applicable provision' means--
       ``(i) subsection (d), but only for purposes of applying 
     such paragraph to a payment which, as determined under rules 
     prescribed by the Secretary, is a payment under a social 
     security leveling option which accelerates payments under the 
     plan before, and reduces payments after, a participant starts 
     receiving social security benefits in order to provide 
     substantially similar aggregate payments both before and 
     after such benefits are received, and
       ``(ii) subsection (e).''.
       (b) Interaction With Wrera Rule.--Section 203 of the 
     Worker, Retiree, and Employer Recovery Act of 2008 shall 
     apply to a plan for any plan year in lieu of the amendments 
     made by this section applying to sections 206(g)(4) of the 
     Employee Retirement Income Security Act of 1974 and 436(e) of 
     the Internal Revenue Code of 1986 only to the extent that 
     such section produces a higher adjusted funding target 
     attainment percentage for such plan for such year.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning on or after October 1, 2008.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2007.

     SEC. 214. LOOKBACK FOR CREDIT BALANCE RULE FOR PLANS 
                   MAINTAINED BY CHARITIES.

       (a) Amendment to Erisa.--Paragraph (3) of section 303(f) of 
     the Employee Retirement Income Security Act of 1974 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year shall be the greater 
     of--

       ``(I) such ratio, as determined without regard to this 
     subparagraph, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007, and before September 1, 2008, as 
     determined under rules prescribed by the Secretary of the 
     Treasury.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2008, and before January 1, 2011, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary of the Treasury.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3) of the Internal Revenue Code of 1986.''.
       (b) Amendment to Internal Revenue Code of 1986.--Paragraph 
     (3) of section 430(f) of the Internal Revenue Code of 1986 is 
     amended by adding the following at the end thereof:
       ``(D) Special rule for certain years of plans maintained by 
     charities.--
       ``(i) In general.--For purposes of applying subparagraph 
     (C) for plan years beginning after August 31, 2009, and 
     before September 1, 2011, the ratio determined under such 
     subparagraph for the preceding plan year of a plan shall be 
     the greater of--

       ``(I) such ratio, as determined without regard to this 
     subsection, or
       ``(II) the ratio for such plan for the plan year beginning 
     after August 31, 2007 and before September 1, 2008, as 
     determined under rules prescribed by the Secretary.

       ``(ii) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year--

       ``(I) clause (i) shall apply to plan years beginning after 
     December 31, 2007, and before January 1, 2010, and
       ``(II) clause (i)(II) shall apply based on the last plan 
     year beginning before September 1, 2007, as determined under 
     rules prescribed by the Secretary.

       ``(iii) Limitation to charities.--This subparagraph shall 
     not apply to any plan unless such plan is maintained 
     exclusively by one or more organizations described in section 
     501(c)(3).''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to plan years 
     beginning after August 31, 2009.
       (2) Special rule.--In the case of a plan for which the 
     valuation date is not the first day of the plan year, the 
     amendments made by this section shall apply to plan years 
     beginning after December 31, 2008.

                      PART II--MULTIEMPLOYER PLANS

     SEC. 221. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.

       (a) Adjustments.--
       (1) Amendment to erisa.--Section 304(b) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is 
     amended by adding at the end the following new paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period--

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

[[Page 5460]]

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary of the 
     Treasury on the basis of the difference between actual and 
     expected returns (including any difference attributable to 
     any criminally fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary of the Treasury for purposes of section 165 of the 
     Internal Revenue Code of 1986.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary of the Treasury shall not treat the 
     asset valuation method of the plan as unreasonable solely 
     because of the changes in such method described in clause 
     (i), and
       ``(II) such changes shall be deemed approved by such 
     Secretary under section 302(d)(1) and section 412(d)(1) of 
     such Code.

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D of chapter 1 of 
     the Internal Revenue Code of 1986 or to comply with other 
     applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (2) Amendment to internal revenue code of 1986.--Section 
     431(b) is amended by adding at the end the following new 
     paragraph:
       ``(8) Special relief rules.--Notwithstanding any other 
     provision of this subsection--
       ``(A) Amortization of net investment losses.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     treat the portion of any experience loss or gain attributable 
     to net investment losses incurred in either or both of the 
     first two plan years ending after August 31, 2008, as an item 
     separate from other experience losses, to be amortized in 
     equal annual installments (until fully amortized) over the 
     period--

       ``(I) beginning with the plan year in which such portion is 
     first recognized in the actuarial value of assets, and
       ``(II) ending with the last plan year in the 30-plan year 
     period beginning with the plan year in which such net 
     investment loss was incurred.

       ``(ii) Coordination with extensions.--If this subparagraph 
     applies for any plan year--

       ``(I) no extension of the amortization period under clause 
     (i) shall be allowed under subsection (d), and
       ``(II) if an extension was granted under subsection (d) for 
     any plan year before the election to have this subparagraph 
     apply to the plan year, such extension shall not result in 
     such amortization period exceeding 30 years.

       ``(iii) Net investment losses.--For purposes of this 
     subparagraph--

       ``(I) In general.--Net investment losses shall be 
     determined in the manner prescribed by the Secretary on the 
     basis of the difference between actual and expected returns 
     (including any difference attributable to any criminally 
     fraudulent investment arrangement).
       ``(II) Criminally fraudulent investment arrangements.--The 
     determination as to whether an arrangement is a criminally 
     fraudulent investment arrangement shall be made under rules 
     substantially similar to the rules prescribed by the 
     Secretary for purposes of section 165.

       ``(B) Expanded smoothing period.--
       ``(i) In general.--A multiemployer plan with respect to 
     which the solvency test under subparagraph (C) is met may 
     change its asset valuation method in a manner which--

       ``(I) spreads the difference between expected and actual 
     returns for either or both of the first 2 plan years ending 
     after August 31, 2008, over a period of not more than 10 
     years,
       ``(II) provides that for either or both of the first 2 plan 
     years beginning after August 31, 2008, the value of plan 
     assets at any time shall not be less than 80 percent or 
     greater than 130 percent of the fair market value of such 
     assets at such time, or
       ``(III) makes both changes described in subclauses (I) and 
     (II) to such method.

       ``(ii) Asset valuation methods.--If this subparagraph 
     applies for any plan year--

       ``(I) the Secretary shall not treat the asset valuation 
     method of the plan as unreasonable solely because of the 
     changes in such method described in clause (i), and
       ``(II) such changes shall be deemed approved by the 
     Secretary under section 302(d)(1) of the Employee Retirement 
     Income Security Act of 1974 and section 412(d)(1).

       ``(iii) Amortization of reduction in unfunded accrued 
     liability.--If this subparagraph and subparagraph (A) both 
     apply for any plan year, the plan shall treat any reduction 
     in unfunded accrued liability resulting from the application 
     of this subparagraph as a separate experience amortization 
     base, to be amortized in equal annual installments (until 
     fully amortized) over a period of 30 plan years rather than 
     the period such liability would otherwise be amortized over.
       ``(C) Solvency test.--The solvency test under this 
     paragraph is met only if the plan actuary certifies that the 
     plan is projected to have sufficient assets to timely pay 
     expected benefits and anticipated expenditures over the 
     amortization period, taking into account the changes in the 
     funding standard account under this paragraph.
       ``(D) Restriction on benefit increases.--If subparagraph 
     (A) or (B) apply to a multiemployer plan for any plan year, 
     then, in addition to any other applicable restrictions on 
     benefit increases, a plan amendment increasing benefits may 
     not go into effect during either of the 2 plan years 
     immediately following such plan year unless--
       ``(i) the plan actuary certifies that--

       ``(I) any such increase is paid for out of additional 
     contributions not allocated to the plan immediately before 
     the application of this paragraph to the plan, and
       ``(II) the plan's funded percentage and projected credit 
     balances for such 2 plan years are reasonably expected to be 
     at least as high as such percentage and balances would have 
     been if the benefit increase had not been adopted, or

       ``(ii) the amendment is required as a condition of 
     qualification under part I of subchapter D or to comply with 
     other applicable law.
       ``(E) Reporting.--A plan sponsor of a plan to which this 
     paragraph applies shall--
       ``(i) give notice of such application to participants and 
     beneficiaries of the plan, and
       ``(ii) inform the Pension Benefit Guaranty Corporation of 
     such application in such form and manner as the Director of 
     the Pension Benefit Guaranty Corporation may prescribe.''.
       (b) Effective Dates.--
       (1) In general.--The amendments made by this section shall 
     take effect as of the first day of the first plan year ending 
     after August 31, 2008, except that any election a plan makes 
     pursuant to this section that affects the plan's funding 
     standard account for the first plan year beginning after 
     August 31, 2008, shall be disregarded for purposes of 
     applying the provisions of section 305 of the Employee 
     Retirement Income Security Act of 1974 and section 432 of the 
     Internal Revenue Code of 1986 to such plan year.

[[Page 5461]]

       (2) Restrictions on benefit increases.--Notwithstanding 
     paragraph (1), the restrictions on plan amendments increasing 
     benefits in sections 304(b)(8)(D) of such Act and 
     431(b)(8)(D) of such Code, as added by this section, shall 
     take effect on the date of enactment of this Act.

                   Subtitle C--Discretionary Spending

     SEC. 231. PURPOSE.

       The purpose of this subtitle is to offset spending in this 
     Act with discretionary spending.

     SEC. 232. PAYMENTS TO DECEASED INDIVIDUALS AND ESTATES.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary of Agriculture shall not provide to any 
     deceased individual or estate of such an individual any 
     agricultural payment under Public Law 110-246, or any law 
     amended by this law, after the date that is 1 program year 
     (as determined by the Secretary with respect to the 
     applicable payment program) after the date of death of the 
     individual.
       (b) Report.--As soon as practicable after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     of Agriculture shall submit to the Committee on Agriculture 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate, and post 
     on the website of the Department of Agriculture, a report 
     that describes, for the period covered by the report--
       (1) the number and aggregate amount of agricultural 
     payments described in subsection (a) provided to deceased 
     individuals and estates of deceased individuals; and
       (2) for each such payment, the length of time the estate of 
     the deceased individual that received the payment has been 
     open.

     SEC. 233. RESCINDING 9-YEAR OLD UNUSED EARMARKS.

       (a) Definition.--In this section, the term ``earmark'' 
     means the following:
       (1) A congressionally directed spending item, as defined in 
     Rule XLIV of the Standing Rules of the Senate.
       (2) A congressional earmark, as defined for purposes of 
     Rule XXI of the Rules of the House of Representatives.
       (b) Rescission.--Any earmark of funds provided for any 
     Federal agency with more than 90 percent of the appropriated 
     amount remaining available for obligation at the end of the 
     9th fiscal year following the fiscal year in which the 
     earmark was made available is rescinded effective at the end 
     of that 9th fiscal year, except that the agency head may 
     delay any such rescission if the agency head determines that 
     an additional obligation of the earmark is likely to occur 
     during the following 12-month period.
       (c) Identification and Report.--
       (1) Agency identification.--Each Federal agency shall 
     identify and report every project that is an earmark with an 
     unobligated balance at the end of each fiscal year to the 
     Director of OMB.
       (2) Annual report.--The Director of OMB shall submit to 
     Congress and publically post on the website of OMB an annual 
     report that includes--
       (A) a listing and accounting for earmarks with unobligated 
     balances summarized by agency including the amount of the 
     original earmark, amount of the unobligated balance, and the 
     year when the funding expires, if applicable;
       (B) the number of rescissions resulting from this section 
     and the annual savings resulting from this section for the 
     previous fiscal year; and
       (C) a listing and accounting for earmarks provided for 
     Federal agencies scheduled to be rescinded at the end of the 
     current fiscal year.

     SEC. 234. OVER-THE-ROAD BUS SECURITY ASSISTANCE (PRESIDENTIAL 
                   TERMINATION).

       (a) In General.--Section 1532 of the Implementing 
     Recommendations of the 9/11 Commission Act of 2007 (6 U.S.C. 
     1182) is repealed.
       (b) Technical and Conforming Amendments.--The Implementing 
     Recommendations of the 9/11 Commission Act of 2007 (Public 
     Law 110-53; 121 Stat. 266) is amended--
       (1) in the table of contents in section 1(b), by striking 
     the item relating to section 1532;
       (2) by redesignating sections 1533 through 1542 as sections 
     1532 through 1541, respectively;
       (3) in section 1531(e)(1)(E), by striking ``section 1534'' 
     and inserting ``section 1533''; and
       (4) in section 1534(c)(4) (6 U.S.C. 1185(c)(4)), as so 
     redesignated, by striking ``and eligible recipients under 
     section 1532''.
       (c) Applicability.--Notwithstanding the amendment made by 
     subsection (a), any grant made under section 1532 of the 
     Implementing Recommendations of the 9/11 Commission Act of 
     2007 (6 U.S.C. 1532) before the date of enactment of this Act 
     shall remain in effect under the terms and for the duration 
     of the grant.

     SEC. 235. RESOURCE CONSERVATION AND DEVELOPMENT (PRESIDENTIAL 
                   TERMINATION).

       Subtitle H of title XV of the Agriculture and Food Act of 
     1981 (16 U.S.C. 3451 et seq.) is repealed.

     SEC. 236. BROWNFIELDS REVITALIZATION FUNDING (PRESIDENTIAL 
                   TERMINATION).

       Section 104 of the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9604) is 
     amended by striking subsection (k).

     SEC. 237. ENVIRONMENTAL INFRASTRUCTURE CONSTRUCTION PROJECTS 
                   (PRESIDENTIAL TERMINATION).

       The Water Resources Development Act of 2007 (Public Law 
     110-114) is amended by repealing the following sections:
       (1) Section 5039 (121 Stat. 1206).
       (2) Section 5061 (121 Stat. 1215).
       (3) Section 5065 (121 Stat. 1217).
       (4) Section 5082 (121 Stat. 1226).
       (5) Section 5085 (121 Stat. 1228).

     SEC. 238. CAPITAL GRANTS FOR RAIL LINE RELOCATION PROJECTS 
                   (PRESIDENTIAL TERMINATION).

       Section 20154 of title 49, United States Code, is repealed.

     SEC. 239. RESCISSIONS FROM THE DEPARTMENT OF COMMERCE (HOUSE 
                   PASSED).

       There are rescinded $111,500,000 from the Department of 
     Commerce under the heading ``National Telecommunications and 
     Information Administration'', under the subheading ``digital-
     to-analog converter box program'' to be derived from 
     unobligated balances made available under this heading in 
     title II of division A of the American Recovery and 
     Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 128).

     SEC. 240. RESCISSIONS FROM THE DEPARTMENT OF TRANSPORTATION 
                   (HOUSE PASSED).

       There are rescinded $44,000,000 from the Department of 
     Transportation under the heading ``National Highway Traffic 
     Safety Administration'', under the subheading ``consumer 
     assistance to recyle and save program'' to be derived from 
     unobligated balances made available in title XIII of Public 
     Law 111-32 and in Public Law 111-47.

     SEC. 241. RESCISSIONS FROM THE FOOD AND NUTRITION SERVICE OF 
                   THE DEPARTMENT OF AGRICULTURE (HOUSE PASSED).

       There are rescinded $361,825,000 from the Department of 
     Agriculture under the heading ``Food and Nutrition Service'', 
     under the subheading ``special supplemental nutrition program 
     for women, infants, and children (wic)'' to be derived from 
     unobligated balances available from amounts placed in reserve 
     in title I of division A of the American Recovery and 
     Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 115).

     SEC. 242. RESCISSION FROM THE RURAL DEVELOPMENT PROGRAM OF 
                   THE DEPARTMENT OF AGRICULTURE (HOUSE PASSED).

       There are rescinded $102,675,000 from the Department of 
     Agriculture under the heading ``Rural Development Programs'' 
     to be derived from the unobligated balances of funds that 
     were provided for such accounts in prior appropriation Acts 
     (other than Public Law 111-5) and that were designated by the 
     Congress in such Acts as an emergency requirement pursuant to 
     a concurrent resolution on the budget or the Balanced Budget 
     and Emergency Deficit Control Act of 1985.

     SEC. 243. DISPOSAL OF $4 BILLION WORTH OF EXCESS, SURPLUS, 
                   UNDERPERFORMING, AND UNNEEDED FEDERAL PROPERTY.

       (a) In General.--The Director of the Office of Management 
     and Budget, in consultation with the heads of executive 
     agencies, before FY 2011, shall dispose of up to 
     $4,000,000,000 in real property that is--
       (1) a parcel of real property under the administrative 
     jurisdiction of the Federal Government that is--
       (A) excess;
       (B) surplus;
       (C) underperforming; or
       (D) otherwise not meeting the needs of the Federal 
     Government, as determined by the Director; and
       (2) a building or other structure located on real property 
     described under paragraph (1).
       (b) Exclusion.--The disposal of real property under this 
     section excludes any parcel of real property or building or 
     other structure located on such real property that is to be 
     closed or realigned under the Defense Base Closure and 
     Realignment Act of 1990 (part A of title XXIX of Public Law 
     101-510; 10 U.S.C. 2687 note).
       (c) Reports.--The Director shall provide an itemized report 
     to Congress of the real property disposed of, including the 
     savings and revenues resulting from such disposals and the 
     reasons each property was chosen and how it was disposed.

     SEC. 244. ELIMINATION OF EXCESSIVE ADMINISTRATION AND 
                   WASTEFUL SPENDING, AND CONSOLIDATION OF 
                   DUPLICATIVE PROGRAMS, AT THE DEPARTMENT OF 
                   LABOR AND OTHER FEDERAL AGENCIES.

       (a) In General.--Notwithstanding any other provision of 
     Federal law, the Secretary of Labor and the heads of other 
     Federal agencies shall consolidate all job training and 
     employment programs carried out through the Department of 
     Labor or any of those Federal agencies. In carrying out the 
     consolidated programs, the Secretary of Labor shall reduce 
     the cost of administering such programs.
       (b) Definitions.--In this section:
       (1) Federal agency.--The term ``Federal agency'' includes 
     the Department of Veterans Affairs, the Department of 
     Education, the Department of Health and Human Services, the 
     Department of Housing and Urban

[[Page 5462]]

     Development, the Department of Commerce, the Department of 
     Homeland Security, and the Department of the Interior.
       (2) Job training and employment program.--The term ``job 
     training and employment program'' includes the programs 
     carried out under subtitle B of title I, section 167, and 
     section 173A, of the Workforce Investment Act of 1998 (42 
     U.S.C. 2811 et seq., 2912, and 2918a).

     SEC. 245. REPORT ON FUNDING FOR EXCESSIVE ADMINISTRATION, 
                   WASTEFUL PROJECTS, OR DUPLICATIVE PROJECTS AT 
                   THE DEPARTMENT OF LABOR AND OTHER FEDERAL 
                   AGENCIES.

       (a) Purpose.--The purpose of this section is to identify 
     accounts from which funds could be rescinded, to assist in 
     offset the costs of labor spending programs such as 
     unemployment insurance programs with a specific focus on the 
     Department of Labor.
       (b) Study.--The Secretary of Labor and the head of every 
     other Federal agency shall conduct a study in which the head 
     of the agency identifies--
       (1) each account of the agency that the head estimates will 
     have unobligated funds at the end of the program year ending 
     after the date of enactment of this Act, and the amount of 
     the unobligated funds estimated for each such account; and
       (2) each account of the agency that the head determines is 
     overfunded (due to funding for excessive administration, 
     wasteful projects, or duplicative projects), and the amount 
     of the overfunding for each such account.
       (c) Report.--Not later than 30 days after the date of 
     enactment of this Act, the head of each Federal agency shall 
     submit to Congress a report containing the results of the 
     study, and make the report publicly available on the Web site 
     of the agency.

                          ____________________