[111th Congress Public Law 192]
[From the U.S. Government Printing Office]



[[Page 1279]]

 PRESERVATION OF ACCESS TO CARE FOR MEDICARE BENEFICIARIES AND PENSION 
                           RELIEF ACT OF 2010

[[Page 124 STAT. 1280]]

Public Law 111-192
111th Congress

                                 An Act


 
   To provide a physician payment update, to provide pension funding 
 relief, and for other purposes. <<NOTE: June 25, 2010 -  [H.R. 3962]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Preservation of 
Access to Care for Medicare Beneficiaries and Pension Relief Act of 
2010. 29 USC 1001 note.>> 
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preservation of Access to Care for 
Medicare Beneficiaries and Pension Relief Act of 2010''.

                       TITLE I--HEALTH PROVISIONS

SEC. 101. PHYSICIAN PAYMENT UPDATE.

    (a) In General.--Section 1848(d) of the Social Security Act (42 
U.S.C. 1395w-4(d)) is amended--
            (1) in paragraph (10), in the heading, by striking 
        ``portion'' and inserting ``January through may ''; and
            (2) by adding at the end the following new paragraph:
            ``(11) <<NOTE: Time periods.>> Update for june through 
        november of 2010.--
                    ``(A) In general.--Subject to paragraphs (7)(B), 
                (8)(B), (9)(B), and (10)(B), in lieu of the update to 
                the single conversion factor established in paragraph 
                (1)(C) that would otherwise apply for 2010 for the 
                period beginning on June 1, 2010, and ending on November 
                30, 2010, the update to the single conversion factor 
                shall be 2.2 percent.
                    ``(B) No effect on computation of conversion factor 
                for remaining portion of 2010 and subsequent years.--The 
                conversion factor under this subsection shall be 
                computed under paragraph (1)(A) for the period beginning 
                on December 1, 2010, and ending on December 31, 2010, 
                and for 2011 and subsequent years as if subparagraph (A) 
                had never applied.''.

    (b) Statutory Paygo.--The budgetary effects of this Act, for the 
purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall 
be determined by reference to the latest statement titled ``Budgetary 
Effects of PAYGO Legislation'' for this Act, jointly submitted for 
printing in the Congressional Record by the Chairmen of the House and 
Senate Budget Committees, provided that such statement has been 
submitted prior to the vote on passage in the House acting first on this 
conference report or amendment between the Houses.

[[Page 124 STAT. 1281]]

SEC. 102. <<NOTE: 42 USC 1395ww note.>> CLARIFICATION OF 3-DAY 
                        PAYMENT WINDOW.

    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww) is amended--
            (1) by adding at the end of subsection (a)(4) the following 
        new sentence: ``In applying the first sentence of this 
        paragraph, the term `other services related to the admission' 
        includes all services that are not diagnostic services (other 
        than ambulance and maintenance renal dialysis services) for 
        which payment may be made under this title that are provided by 
        a hospital (or an entity wholly owned or operated by the 
        hospital) to a patient--
                    ``(A) on the date of the patient's inpatient 
                admission; or
                    ``(B) during the 3 days (or, in the case of a 
                hospital that is not a subsection (d) hospital, during 
                the 1 day) immediately preceding the date of such 
                admission unless the hospital demonstrates (in a form 
                and manner, and at a time, specified by the Secretary) 
                that such services are not related (as determined by the 
                Secretary) to such admission.''; and
            (2) in subsection (d)(7)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period and 
                inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) the determination of whether services provided 
                prior to a patient's inpatient admission are related to 
                the admission (as described in subsection (a)(4)).''.

    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after the date of the enactment of 
this Act.
    (c) No Reopening of Previously Bundled Claims.--
            (1) In general.--The Secretary of Health and Human Services 
        may not reopen a claim, adjust a claim, or make a payment 
        pursuant to any request for payment under title XVIII of the 
        Social Security Act, submitted by an entity (including a 
        hospital or an entity wholly owned or operated by the hospital) 
        for services described in paragraph (2) for purposes of 
        treating, as unrelated to a patient's inpatient admission, 
        services provided during the 3 days (or, in the case of a 
        hospital that is not a subsection (d) hospital, during the 1 
        day) immediately preceding the date of the patient's inpatient 
        admission.
            (2) Services described.--For purposes of paragraph (1), the 
        services described in this paragraph are other services related 
        to the admission (as described in section 1886(a)(4) of the 
        Social Security Act (42 U.S.C. 1395ww(a)(4)), as amended by 
        subsection (a)) which were previously included on a claim or 
        request for payment submitted under part A of title XVIII of 
        such Act for which a reopening, adjustment, or request for 
        payment under part B of such title, was not submitted prior to 
        the date of the enactment of this Act.

    (d) Implementation.--Notwithstanding any other provision of law, the 
Secretary of Health and Human Services may implement the provisions of 
this section (and amendments made by this section) by program 
instruction or otherwise.

[[Page 124 STAT. 1282]]

    (e) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed as changing the policy described in section 
1886(a)(4) of the Social Security Act (42 U.S.C. 1395ww(a)(4)), as 
applied by the Secretary of Health and Human Services before the date of 
the enactment of this Act, with respect to diagnostic services.
SEC. 103. ESTABLISH A CMS-IRS DATA MATCH TO IDENTIFY FRAUDULENT 
                        PROVIDERS.

    (a) Authority To Disclose Return Information Concerning Outstanding 
Tax Debts for Purposes of Enhancing Medicare Program Integrity.--
            (1) In general.--Section 6103(l) of the Internal Revenue 
        Code of 1986 <<NOTE: 26 USC 6103.>>  is amended by adding at the 
        end the following new paragraph:
            ``(22) Disclosure of return information to department of 
        health and human services for purposes of enhancing medicare 
        program integrity.--
                    ``(A) In general.--The Secretary shall, upon written 
                request from the Secretary of Health and Human Services, 
                disclose to officers and employees of the Department of 
                Health and Human Services return information with 
                respect to a taxpayer who has applied to enroll, or 
                reenroll, as a provider of services or supplier under 
                the Medicare program under title XVIII of the Social 
                Security Act. Such return information shall be limited 
                to--
                          ``(i) the taxpayer identity information with 
                      respect to such taxpayer;
                          ``(ii) the amount of the delinquent tax debt 
                      owed by that taxpayer; and
                          ``(iii) the taxable year to which the 
                      delinquent tax debt pertains.
                    ``(B) Restriction on disclosure.--Return information 
                disclosed under subparagraph (A) may be used by officers 
                and employees of the Department of Health and Human 
                Services for the purposes of, and to the extent 
                necessary in, establishing the taxpayer's eligibility 
                for enrollment or reenrollment in the Medicare program, 
                or in any administrative or judicial proceeding relating 
                to, or arising from, a denial of such enrollment or 
                reenrollment, or in determining the level of enhanced 
                oversight to be applied with respect to such taxpayer 
                pursuant to section 1866(j)(3) of the Social Security 
                Act.
                    ``(C) Delinquent tax debt. <<NOTE: Definition.>> --
                For purposes of this paragraph, the term `delinquent tax 
                debt' means an outstanding debt under this title for 
                which a notice of lien has been filed pursuant to 
                section 6323, but the term does not include a debt that 
                is being paid in a timely manner pursuant to an 
                agreement under section 6159 or 7122, or a debt with 
                respect to which a collection due process hearing under 
                section 6330 is requested, pending, or completed and no 
                payment is required.''.
            (2) Conforming amendments.--Section 6103(p)(4) of such Code, 
        as amended by sections 1414 and 3308 of Public Law 111-148, in 
        the matter preceding subparagraph (A) and in subparagraph 
        (F)(ii), is amended by striking ``or (17)'' and inserting 
        ``(17), or (22)'' each place it appears.

[[Page 124 STAT. 1283]]

    (b) Secretary's Authority To Use Information From the Department of 
Treasury in Medicare Enrollments and Reenrollments.--Section 1866(j)(2) 
of the Social Security Act (42 U.S.C. 1395cc(j)), as inserted by section 
6401(a) of Public Law 111-148, is further amended--
            (1) by redesignating subparagraph (E) as subparagraph (F); 
        and
            (2) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) Use of information from the department of 
                treasury concerning tax debts.-- 
                <<NOTE: Determination.>> In reviewing the application of 
                a provider of services or supplier to enroll or reenroll 
                under the program under this title, the Secretary shall 
                take into account the information supplied by the 
                Secretary of the Treasury pursuant to section 
                6103(l)(22) of the Internal Revenue Code of 1986, in 
                determining whether to deny such application or to apply 
                enhanced oversight to such provider of services or 
                supplier pursuant to paragraph (3) if the Secretary 
                determines such provider of services or supplier owes 
                such a debt.''.

    (c) Authority To Adjust Payments of Providers of Services and 
Suppliers With the Same Tax Identification Number for Medicare 
Obligations.--Section 1866(j)(6) of the Social Security Act (42 U.S.C. 
1395cc(j)(6)), as inserted by section 6401(a) of Public Law 111-148 and 
as redesignated by section 1304 of Public Law 111-152, is amended--
            (1) in the paragraph heading, by striking ``past-due'' and 
        inserting ``medicare'';
            (2) in subparagraph (A), by striking ``past-due obligations 
        described in subparagraph (B)(ii) of an'' and inserting ``amount 
        described in subparagraph (B)(ii) due from such''; and
            (3) in subparagraph (B)(ii), by striking ``a past-due 
        obligation'' and inserting ``an amount that is more than the 
        amount required to be paid''.

                    TITLE II--PENSION FUNDING RELIEF

                    Subtitle A--Single Employer Plans

SEC. 201. 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. <<NOTE: Applicability.>> --
                      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

[[Page 124 STAT. 1284]]

                                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

[[Page 124 STAT. 1285]]

                                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. <<NOTE: Definition.>> --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) <<NOTE: Notice.>> 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. <<NOTE: Regulations.>> --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.

[[Page 124 STAT. 1286]]

                    ``(C) Installment acceleration amount.--For purposes 
                of this paragraph--
                          ``(i) In general.-- <<NOTE: Definition.>> 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 124 STAT. 1287]]

                                    ``(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. <<NOTE: Definition.>> --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.

[[Page 124 STAT. 1288]]

                          ``(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. <<NOTE: Effective 
                      date.>> --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.

[[Page 124 STAT. 1289]]

                          ``(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. <<NOTE: Definition.>> --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

[[Page 124 STAT. 1290]]

                      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. <<NOTE: Applicability.>> --
                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) <<NOTE: 26 
        USC 430.>> is amended by adding at the end the following 
        subparagraph:
                    ``(D) Special election for eligible plan years.--
                          ``(i) <<NOTE: Applicability.>> 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

[[Page 124 STAT. 1291]]

                                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. <<NOTE: Definition.>> --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) <<NOTE: Notice.>> 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).''.

[[Page 124 STAT. 1292]]

            (2) Increases in required contributions if excess 
        compensation paid.--Section 430(c) <<NOTE: 26 USC 430.>> 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. <<NOTE: Regulations.>> --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. <<NOTE: Definition.>> --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

[[Page 124 STAT. 1293]]

                                    ``(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. <<NOTE: Definition.>> --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

[[Page 124 STAT. 1294]]

                      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. <<NOTE: Applicability.>> 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. <<NOTE: Effective 
                      date.>> --In the case of any calendar year 
                      beginning after 2010, the dollar amount

[[Page 124 STAT. 1295]]

                      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.

[[Page 124 STAT. 1296]]

                                    ``(II) Applicable preferred 
                                stock. <<NOTE: Definition.>> --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 <<NOTE: 26 USC 
        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. <<NOTE: Applicability.>> --
                Subparagraph (D) shall be applied without regard to any 
                increase under subsection (c)(7).''.

    (c) <<NOTE: 26 USC 430 note.>> Effective Date.--The amendments made 
by this section shall apply to plan years beginning after December 31, 
2007.

[[Page 124 STAT. 1297]]

SEC. 202. 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 <<NOTE: 120 Stat. 818.>> as section 
108 and by inserting the following after section 106:
``SEC. 107. <<NOTE: 26 USC 401 note.>> 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

[[Page 124 STAT. 1298]]

                    ``(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 <<NOTE: 26 USC 401 note.>> 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

[[Page 124 STAT. 1299]]

(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) <<NOTE: 26 USC 401 note.>> 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. 203. <<NOTE: 26 USC 436 note. Applicability.>> 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 <<NOTE: 29 USC 1056.>> is 
        amended by adding at the end the following:
                    ``(D) Special rule for certain years.--Solely for 
                purposes of any applicable provision--
                          ``(i) <<NOTE: Time periods.>> 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).''.

[[Page 124 STAT. 1300]]

            (2) Amendment to internal revenue code of 1986.--Section 
        436(j) of the Internal Revenue Code of 1986 <<NOTE: 26 USC 
        436.>> is amended by adding at the end the following:
            ``(3) Special rule for certain years.--Solely for purposes 
        of any applicable provision--
                    ``(A) <<NOTE: Time periods.>> 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) <<NOTE: Definition.>> 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. 204. <<NOTE: Applicability.>> 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 <<NOTE: 29 USC 
1083.>> is amended by adding the following at the end thereof:

[[Page 124 STAT. 1301]]

                    ``(D) Special rule for certain years of plans 
                maintained by charities.--
                          ``(i) <<NOTE: Time periods.>> 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 <<NOTE: 26 USC 430.>> of 
1986 is amended by adding the following at the end thereof:
                    ``(D) Special rule for certain years of plans 
                maintained by charities.--
                          ``(i) <<NOTE: Time periods.>> 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

[[Page 124 STAT. 1302]]

                      is maintained exclusively by one or more 
                      organizations described in section 501(c)(3).''.

    (c) <<NOTE: 26 USC 430 note.>> 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.

                     Subtitle B--Multiemployer Plans

SEC. 211. 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) <<NOTE: Applicability.>> 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) <<NOTE: Determination.>> 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

[[Page 124 STAT. 1303]]

                                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) <<NOTE: Certification.>> the plan 
                      actuary certifies that--

[[Page 124 STAT. 1304]]

                                    ``(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) <<NOTE: Notice.>> 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) <<NOTE: 26 USC 431.>> 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) <<NOTE: Determination.>> In 
                                general.--Net investment losses shall be 
                                determined in the manner prescribed by 
                                the Secretary on the basis of the 
                                difference between

[[Page 124 STAT. 1305]]

                                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) <<NOTE: Applicability.>> 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) <<NOTE: Certification.>> 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) <<NOTE: Applicability.>> 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

[[Page 124 STAT. 1306]]

                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) <<NOTE: Notice.>> 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) <<NOTE: 26 USC 431 note.>> 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.

                     TITLE III--BUDGETARY PROVISIONS

SEC. 301. BUDGETARY PROVISIONS.

    The budgetary effects of this Act, for the purpose of complying with 
the Statutory Pay-As-You-Go-Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the

[[Page 124 STAT. 1307]]

Congressional Record by the Chairman of the Senate Budget Committee, 
provided that such statement has been submitted prior to the vote on 
passage.

    Approved June 25, 2010.

LEGISLATIVE HISTORY--H.R. 3962:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD:
                                                        Vol. 155 (2009):
                                    Nov. 7, considered and passed House.
                                                        Vol. 156 (2010):
                                    June 18, considered and passed 
                                        Senate, amended.
                                    June 24, House concurred in Senate 
                                        amendments.

                                  <all>