    [United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 111-192
    111th Congress

    An Act

    To provide a physician payment update, to provide pension funding
    relief, and for other purposes. <>

    Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <>
    SECTION 1. SHORT TITLE.

    This Act may be cited as the ``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) <> 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 1281]]

    SEC. 102. <> 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 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 <>  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. <> --
    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 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.--
    <> 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. <> --
    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 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 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. <> --For purposes of this
    subparagraph, the term `eligible plan year' means
    any plan year beginning in 2008, 2009, 2010, or
    2011, except that a plan year shall only be
    treated as an eligible plan year if the due date
    under subsection (j)(1) for the payment of the
    minimum required contribution for such plan year
    occurs on or after the date of the enactment of
    this subparagraph.
    ``(vi) Reporting.--A plan sponsor of a plan
    who makes an election under clause (i) shall--
    ``(I) <> give notice
    of the election to participants and
    beneficiaries of the plan, and
    ``(II) inform the Pension Benefit
    Guaranty Corporation of such election in
    such form and manner as the Director of
    the Pension Benefit Guaranty Corporation
    may prescribe.
    ``(vii) Increases in required installments in
    certain cases.--For increases in required
    contributions in cases of excess compensation or
    extraordinary dividends or stock redemptions, see
    paragraph (7).''.
    (2) Increases in required installments in certain cases.--
    Section 303(c) of the Employee Retirement Income Security Act of
    1974 (29 U.S.C. 1083(c)) is amended by adding at the end the
    following paragraph:
    ``(7) Increases in alternate required installments in cases
    of excess compensation or extraordinary dividends or stock
    redemptions.--
    ``(A) In general.--If there is an installment
    acceleration amount with respect to a plan for any plan
    year in the restriction period with respect to an
    election year under paragraph (2)(D), then the shortfall
    amortization installment otherwise determined and
    payable under such paragraph for such plan year shall,
    subject to the limitation under subparagraph (B), be
    increased by such amount.
    ``(B) Total installments limited to shortfall
    base. <> --Subject to rules
    prescribed by the Secretary of the Treasury, if a
    shortfall amortization installment with respect to any
    shortfall amortization base for an election year is
    required to be increased for any plan year under
    subparagraph (A)--
    ``(i) such increase shall not result in the
    amount of such installment exceeding the present
    value of such installment and all succeeding
    installments with respect to such base (determined
    without regard to such increase but after
    application of clause (ii)), and
    ``(ii) subsequent shortfall amortization
    installments with respect to such base shall, in
    reverse order of the otherwise required
    installments, be reduced to the extent necessary
    to limit the present value of such subsequent
    shortfall amortization installments (after
    application of this paragraph) to the present
    value of the remaining unamortized shortfall
    amortization base.

    [[Page 1286]]

    ``(C) Installment acceleration amount.--For purposes
    of this paragraph--
    ``(i) In general.-- <> The
    term `installment acceleration amount' means, with
    respect to any plan year in a restriction period
    with respect to an election year, the sum of--
    ``(I) the aggregate amount of excess
    employee compensation determined under
    subparagraph (D) with respect to all
    employees for the plan year plus
    ``(II) the aggregate amount of
    extraordinary dividends and redemptions
    determined under subparagraph (E) for
    the plan year.
    ``(ii) Annual limitation.--The installment
    acceleration amount for any plan year shall not
    exceed the excess (if any) of--
    ``(I) the sum of the shortfall
    amortization installments for the plan
    year and all preceding plan years in the
    amortization period elected under
    paragraph (2)(D) with respect to the
    shortfall amortization base with respect
    to an election year, determined without
    regard to paragraph (2)(D) and this
    paragraph, over
    ``(II) the sum of the shortfall
    amortization installments for such plan
    year and all such preceding plan years,
    determined after application of
    paragraph (2)(D) (and in the case of any
    preceding plan year, after application
    of this paragraph).
    ``(iii) Carryover of excess installment
    acceleration amounts.--
    ``(I) In general.--If the
    installment acceleration amount for any
    plan year (determined without regard to
    clause (ii)) exceeds the limitation
    under clause (ii), then, subject to
    subclause (II), such excess shall be
    treated as an installment acceleration
    amount with respect to the succeeding
    plan year.
    ``(II) Cap to apply.--If any amount
    treated as an installment acceleration
    amount under subclause (I) or this
    subclause with respect any succeeding
    plan year, when added to other
    installment acceleration amounts
    (determined without regard to clause
    (ii)) with respect to the plan year,
    exceeds the limitation under clause
    (ii), the portion of such amount
    representing such excess shall be
    treated as an installment acceleration
    amount with respect to the next
    succeeding plan year.
    ``(III) Limitation on years to which
    amounts carried for.--No amount shall be
    carried under subclause (I) or (II) to a
    plan year which begins after the first
    plan year following the last plan year
    in the restriction period (or after the
    second plan year following such last
    plan year in the case of an election
    year with respect to which 15-year
    amortization was elected under paragraph
    (2)(D)).

    [[Page 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. <> --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 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. <> --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 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. <> --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 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. <> --
    Subparagraph (D) shall be applied without regard to any
    increase under subsection (c)(7).''.

    (b) Amendments to Internal Revenue Code of 1986.--
    (1) In general.--Paragraph (2) of section 430(c) <> is amended by adding at the end the following
    subparagraph:
    ``(D) Special election for eligible plan years.--
    ``(i) <> In general.--If
    a plan sponsor elects to apply this subparagraph
    with respect to the shortfall amortization base of
    a plan for any eligible plan year (in this
    subparagraph and paragraph (7) referred to as an
    `election year'), then, notwithstanding
    subparagraphs (A) and (B)--
    ``(I) the shortfall amortization
    installments with respect to such base
    shall be determined under clause (ii) or
    (iii), whichever is specified in the
    election, and
    ``(II) the shortfall amortization
    installment for any plan year in the 9-
    plan-year period described in clause
    (ii) or the 15-plan-year period
    described in clause (iii), respectively,
    with respect to such shortfall
    amortization base is the annual
    installment determined under the
    applicable clause for that year for that
    base.
    ``(ii) 2 plus 7 amortization schedule.--The
    shortfall amortization installments determined
    under this clause are--
    ``(I) in the case of the first 2
    plan years in the 9-plan-year period
    beginning with the election year,
    interest on the shortfall amortization
    base of the plan for the election year
    (determined using the effective interest
    rate for the plan for the election
    year), and
    ``(II) in the case of the last 7
    plan years in such 9-plan-year period,
    the amounts necessary to amortize the
    remaining balance of the shortfall
    amortization base of the plan for the
    election year in level annual
    installments over such last 7 plan

    [[Page 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. <> --For purposes of this
    subparagraph, the term `eligible plan year' means
    any plan year beginning in 2008, 2009, 2010, or
    2011, except that a plan year shall only be
    treated as an eligible plan year if the due date
    under subsection (j)(1) for the payment of the
    minimum required contribution for such plan year
    occurs on or after the date of the enactment of
    this subparagraph.
    ``(vi) Reporting.--A plan sponsor of a plan
    who makes an election under clause (i) shall--
    ``(I) <> give notice
    of the election to participants and
    beneficiaries of the plan, and
    ``(II) inform the Pension Benefit
    Guaranty Corporation of such election in
    such form and manner as the Director of
    the Pension Benefit Guaranty Corporation
    may prescribe.
    ``(vii) Increases in required installments in
    certain cases.--For increases in required
    contributions in cases of excess compensation or
    extraordinary dividends or stock redemptions, see
    paragraph (7).''.

    [[Page 1292]]

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

    [[Page 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. <> --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 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. <> An amount to which
    the preceding sentence applies shall not be taken
    into account under this paragraph for any
    subsequent calendar year.
    ``(iii) Only remuneration for certain post-
    2009 services counted.--Remuneration shall be
    taken into account under clause (i) only to the
    extent attributable to services performed by the
    employee for the plan sponsor after February 28,
    2010.
    ``(iv) Exception for certain equity
    payments.--
    ``(I) In general.--There shall not
    be taken into account under clause
    (i)(I) any amount includible in income
    with respect to the granting after
    February 28, 2010, of service recipient
    stock (within the meaning of section
    409A) that, upon such grant, is subject
    to a substantial risk of forfeiture (as
    defined under section 83(c)(1)) for at
    least 5 years from the date of such
    grant.
    ``(II) Secretarial authority.--The
    Secretary may by regulation provide for
    the application of this clause in the
    case of a person other than a
    corporation.
    ``(v) Other exceptions.--The following amounts
    includible in income shall not be taken into
    account under clause (i)(I):
    ``(I) Commissions.--Any remuneration
    payable on a commission basis solely on
    account of income directly generated by
    the individual performance of the
    individual to whom such remuneration is
    payable.
    ``(II) Certain payments under
    existing contracts.--Any remuneration
    consisting of nonqualified deferred
    compensation, restricted stock, stock
    options, or stock appreciation rights
    payable or granted under a written
    binding contract that was in effect on
    March 1, 2010, and which was not
    modified in any material respect before
    such remuneration is paid.
    ``(vi) Self-employed individual treated as
    employee.--The term `employee' includes, with
    respect to a calendar year, a self-employed
    individual who is treated as an employee under
    section 401(c) for the taxable year ending during
    such calendar year, and the term `compensation'
    shall include earned income of such individual
    with respect to such self-employment.
    ``(vii) Indexing of amount. <> --In the case of any calendar year
    beginning after 2010, the dollar amount

    [[Page 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 1296]]

    ``(II) Applicable preferred
    stock. <> --For
    purposes of subclause (I), the term
    `applicable preferred stock' means
    preferred stock which was issued before
    March 1, 2010 (or which was issued after
    such date and is held by an employee
    benefit plan subject to the provisions
    of title I of Employee Retirement Income
    Security Act of 1974).
    ``(F) Other definitions and rules.--For purposes of
    this paragraph--
    ``(i) Plan sponsor.--The term ` plan sponsor'
    includes any member of the plan sponsor's
    controlled group (as defined in section
    412(d)(3)).
    ``(ii) Restriction period.--The term
    `restriction period' means, with respect to any
    election year--
    ``(I) except as provided in
    subclause (II), the 3-year period
    beginning with the election year (or, if
    later, the first plan year beginning
    after December 31, 2009), and
    ``(II) if the plan sponsor elects
    15-year amortization for the shortfall
    amortization base for the election year,
    the 5-year period beginning with the
    election year (or, if later, the first
    plan year beginning after December 31,
    2009).
    ``(iii) Elections for multiple plans.--If a
    plan sponsor makes elections under paragraph
    (2)(D) with respect to 2 or more plans, the
    Secretary shall provide rules for the application
    of this paragraph to such plans, including rules
    for the ratable allocation of any installment
    acceleration amount among such plans on the basis
    of each plan's relative reduction in the plan's
    shortfall amortization installment for the first
    plan year in the amortization period described in
    subparagraph (A) (determined without regard to
    this paragraph).
    ``(iv) Mergers and acquisitions.--The
    Secretary shall prescribe rules for the
    application of paragraph (2)(D) and this paragraph
    in any case where there is a merger or acquisition
    involving a plan sponsor making the election under
    paragraph (2)(D).''.
    (3) Conforming amendments.--Section 430 <> is amended--
    (A) in subsection (c)(1), by striking ``the
    shortfall amortization bases for such plan year and each
    of the 6 preceding plan years'' and inserting ``any
    shortfall amortization base which has not been fully
    amortized under this subsection'', and
    (B) in subsection (j)(3), by adding at the end the
    following:
    ``(F) Quarterly contributions not to include certain
    increased contributions. <> --
    Subparagraph (D) shall be applied without regard to any
    increase under subsection (c)(7).''.

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

    [[Page 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 <> as section
    108 and by inserting the following after section 106:
    ``SEC. 107. <> APPLICATION OF EXTENDED
    AMORTIZATION PERIODS TO PLANS WITH DELAYED
    EFFECTIVE DATE.

    ``(a) In General.--If the plan sponsor of a plan to which section
    104, 105, or 106 of this Act applies elects to have this section apply
    for any eligible plan year (in this section referred to as an `election
    year'), section 302 of the Employee Retirement Income Security Act of
    1974 and section 412 of the Internal Revenue Code of 1986 (as in effect
    before the amendments made by this subtitle and subtitle B) shall apply
    to such year in the manner described in subsection (b) or (c), whichever
    is specified in the election. All references in this section to `such
    Act' or `such Code' shall be to such Act or such Code as in effect
    before the amendments made by this subtitle and subtitle B.
    ``(b) Application of 2 and 7 Rule.--In the case of an election year
    to which this subsection applies--
    ``(1) 2-year lookback for determining deficit reduction
    contributions for certain plans.--For purposes of applying
    section 302(d)(9) of such Act and section 412(l)(9) of such
    Code, the funded current liability percentage (as defined in
    subparagraph (C) thereof) for such plan for such plan year shall
    be such funded current liability percentage of such plan for the
    second plan year preceding the first election year of such plan.
    ``(2) Calculation of deficit reduction contribution.--For
    purposes of applying section 302(d) of such Act and section
    412(l) of such Code to a plan to which such sections apply
    (after taking into account paragraph (1))--
    ``(A) in the case of the increased unfunded new
    liability of the plan, the applicable percentage
    described in section 302(d)(4)(C) of such Act and
    section 412(l)(4)(C) of such Code shall be the third
    segment rate described in sections 104(b), 105(b), and
    106(b) of this Act, and
    ``(B) in the case of the excess of the unfunded new
    liability over the increased unfunded new liability,
    such applicable percentage shall be determined without
    regard to this section.

    ``(c) Application of 15-year Amortization.--In the case of an
    election year to which this subsection applies, for purposes of applying
    section 302(d) of such Act and section 412(l) of such Code--
    ``(1) in the case of the increased unfunded new liability of
    the plan, the applicable percentage described in section
    302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code
    for any pre-effective date plan year beginning with or after the
    first election year shall be the ratio of--
    ``(A) the annual installments payable in each year
    if the increased unfunded new liability for such plan
    year were amortized over 15 years, using an interest
    rate equal to the third segment rate described in
    sections 104(b), 105(b), and 106(b) of this Act, to

    [[Page 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 <> 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 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) <> 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. <> LOOKBACK FOR
    CERTAIN BENEFIT RESTRICTIONS.

    (a) In General.--
    (1) Amendment to erisa.--Section 206(g)(9) of the Employee
    Retirement Income Security Act of 1974 <> is
    amended by adding at the end the following:
    ``(D) Special rule for certain years.--Solely for
    purposes of any applicable provision--
    ``(i) <> In general.--For
    plan years beginning on or after October 1, 2008,
    and before October 1, 2010, the adjusted funding
    target attainment percentage of a plan shall be
    the greater of--
    ``(I) such percentage, as determined
    without regard to this subparagraph, or
    ``(II) the adjusted funding target
    attainment percentage for such plan for
    the plan year beginning after October 1,
    2007, and before October 1, 2008, as
    determined under rules prescribed by the
    Secretary of the Treasury.
    ``(ii) Special rule.--In the case of a plan
    for which the valuation date is not the first day
    of the plan year--
    ``(I) clause (i) shall apply to plan
    years beginning after December 31, 2007,
    and before January 1, 2010, and
    ``(II) clause (i)(II) shall apply
    based on the last plan year beginning
    before November 1, 2007, as determined
    under rules prescribed by the Secretary
    of the Treasury.
    ``(iii) Applicable provision.--For purposes of
    this subparagraph, the term `applicable provision'
    means--
    ``(I) paragraph (3), but only for
    purposes of applying such paragraph to a
    payment which, as determined under rules
    prescribed by the Secretary of the
    Treasury, is a payment under a social
    security leveling option which
    accelerates payments under the plan
    before, and reduces payments after, a
    participant starts receiving social
    security benefits in order to provide
    substantially similar aggregate payments
    both before and after such benefits are
    received, and
    ``(II) paragraph (4).''.

    [[Page 1300]]

    (2) Amendment to internal revenue code of 1986.--Section
    436(j) of the Internal Revenue Code of 1986 <> is amended by adding at the end the following:
    ``(3) Special rule for certain years.--Solely for purposes
    of any applicable provision--
    ``(A) <> In general.--For plan
    years beginning on or after October 1, 2008, and before
    October 1, 2010, the adjusted funding target attainment
    percentage of a plan shall be the greater of--
    ``(i) such percentage, as determined without
    regard to this paragraph, or
    ``(ii) the adjusted funding target attainment
    percentage for such plan for the plan year
    beginning after October 1, 2007, and before
    October 1, 2008, as determined under rules
    prescribed by the Secretary.
    ``(B) Special rule.--In the case of a plan for which
    the valuation date is not the first day of the plan
    year--
    ``(i) subparagraph (A) shall apply to plan
    years beginning after December 31, 2007, and
    before January 1, 2010, and
    ``(ii) subparagraph (A)(ii) shall apply based
    on the last plan year beginning before November 1,
    2007, as determined under rules prescribed by the
    Secretary.
    ``(C) <> Applicable provision.--
    For purposes of this paragraph, the term `applicable
    provision' means--
    ``(i) subsection (d), but only for purposes of
    applying such paragraph to a payment which, as
    determined under rules prescribed by the
    Secretary, is a payment under a social security
    leveling option which accelerates payments under
    the plan before, and reduces payments after, a
    participant starts receiving social security
    benefits in order to provide substantially similar
    aggregate payments both before and after such
    benefits are received, and
    ``(ii) subsection (e).''.

    (b) Interaction With Wrera Rule.--Section 203 of the Worker,
    Retiree, and Employer Recovery Act of 2008 shall apply to a plan for any
    plan year in lieu of the amendments made by this section applying to
    sections 206(g)(4) of the Employee Retirement Income Security Act of
    1974 and 436(e) of the Internal Revenue Code of 1986 only to the extent
    that such section produces a higher adjusted funding target attainment
    percentage for such plan for such year.
    (c) Effective Date.--
    (1) In general.--Except as provided in paragraph (2), the
    amendments made by this section shall apply to plan years
    beginning on or after October 1, 2008.
    (2) Special rule.--In the case of a plan for which the
    valuation date is not the first day of the plan year, the
    amendments made by this section shall apply to plan years
    beginning after December 31, 2007.
    SEC. 204. <> LOOKBACK FOR CREDIT BALANCE
    RULE FOR PLANS MAINTAINED BY CHARITIES.

    (a) Amendment to Erisa.--Paragraph (3) of section 303(f) of the
    Employee Retirement Income Security Act of 1974 <> is amended by adding the following at the end thereof:

    [[Page 1301]]

    ``(D) Special rule for certain years of plans
    maintained by charities.--
    ``(i) <> In general.--For
    purposes of applying subparagraph (C) for plan
    years beginning after August 31, 2009, and before
    September 1, 2011, the ratio determined under such
    subparagraph for the preceding plan year shall be
    the greater of--
    ``(I) such ratio, as determined
    without regard to this subparagraph, or
    ``(II) the ratio for such plan for
    the plan year beginning after August 31,
    2007, and before September 1, 2008, as
    determined under rules prescribed by the
    Secretary of the Treasury.
    ``(ii) Special rule.--In the case of a plan
    for which the valuation date is not the first day
    of the plan year--
    ``(I) clause (i) shall apply to plan
    years beginning after December 31, 2008,
    and before January 1, 2011, and
    ``(II) clause (i)(II) shall apply
    based on the last plan year beginning
    before September 1, 2007, as determined
    under rules prescribed by the Secretary
    of the Treasury.
    ``(iii) Limitation to charities.--This
    subparagraph shall not apply to any plan unless
    such plan is maintained exclusively by one or more
    organizations described in section 501(c)(3) of
    the Internal Revenue Code of 1986.''.

    (b) Amendment to Internal Revenue Code of 1986.--Paragraph (3) of
    section 430(f) of the Internal Revenue Code <> of
    1986 is amended by adding the following at the end thereof:
    ``(D) Special rule for certain years of plans
    maintained by charities.--
    ``(i) <> In general.--For
    purposes of applying subparagraph (C) for plan
    years beginning after August 31, 2009, and before
    September 1, 2011, the ratio determined under such
    subparagraph for the preceding plan year of a plan
    shall be the greater of--
    ``(I) such ratio, as determined
    without regard to this subsection, or
    ``(II) the ratio for such plan for
    the plan year beginning after August 31,
    2007 and before September 1, 2008, as
    determined under rules prescribed by the
    Secretary.
    ``(ii) Special rule.--In the case of a plan
    for which the valuation date is not the first day
    of the plan year--
    ``(I) clause (i) shall apply to plan
    years beginning after December 31, 2007,
    and before January 1, 2010, and
    ``(II) clause (i)(II) shall apply
    based on the last plan year beginning
    before September 1, 2007, as determined
    under rules prescribed by the Secretary.
    ``(iii) Limitation to charities.--This
    subparagraph shall not apply to any plan unless
    such plan

    [[Page 1302]]

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

    (c) <> Effective Date.--
    (1) In general.--Except as provided in paragraph (2), the
    amendments made by this section shall apply to plan years
    beginning after August 31, 2009.
    (2) Special rule.--In the case of a plan for which the
    valuation date is not the first day of the plan year, the
    amendments made by this section shall apply to plan years
    beginning after December 31, 2008.

    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) <> Coordination
    with extensions.--If this subparagraph applies for
    any plan year--
    ``(I) no extension of the
    amortization period under clause (i)
    shall be allowed under subsection (d),
    and
    ``(II) if an extension was granted
    under subsection (d) for any plan year
    before the election to have this
    subparagraph apply to the plan year,
    such extension shall not result in such
    amortization period exceeding 30 years.
    ``(iii) Net investment losses.--For purposes
    of this subparagraph--
    ``(I) <> In
    general.--Net investment losses shall be
    determined in the manner prescribed by
    the Secretary of the Treasury on the
    basis of the difference between actual
    and expected returns (including any
    difference attributable to any
    criminally fraudulent investment
    arrangement).
    ``(II) Criminally fraudulent
    investment arrangements.--The
    determination as to whether

    [[Page 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) <> the plan
    actuary certifies that--

    [[Page 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) <> Reporting.--A plan sponsor
    of a plan to which this paragraph applies shall--
    ``(i) give notice of such application to
    participants and beneficiaries of the plan, and
    ``(ii) inform the Pension Benefit Guaranty
    Corporation of such application in such form and
    manner as the Director of the Pension Benefit
    Guaranty Corporation may prescribe.''.
    (2) Amendment to internal revenue code of 1986.--Section
    431(b) <> is amended by adding at the end the
    following new paragraph:
    ``(8) Special relief rules.--Notwithstanding any other
    provision of this subsection--
    ``(A) Amortization of net investment losses.--
    ``(i) In general.--A multiemployer plan with
    respect to which the solvency test under
    subparagraph (C) is met may treat the portion of
    any experience loss or gain attributable to net
    investment losses incurred in either or both of
    the first two plan years ending after August 31,
    2008, as an item separate from other experience
    losses, to be amortized in equal annual
    installments (until fully amortized) over the
    period --
    ``(I) beginning with the plan year
    in which such portion is first
    recognized in the actuarial value of
    assets, and
    ``(II) ending with the last plan
    year in the 30-plan year period
    beginning with the plan year in which
    such net investment loss was incurred.
    ``(ii) Coordination with extensions.--If this
    subparagraph applies for any plan year--
    ``(I) no extension of the
    amortization period under clause (i)
    shall be allowed under subsection (d),
    and
    ``(II) if an extension was granted
    under subsection (d) for any plan year
    before the election to have this
    subparagraph apply to the plan year,
    such extension shall not result in such
    amortization period exceeding 30 years.
    ``(iii) Net investment losses.--For purposes
    of this subparagraph--
    ``(I) <> In
    general.--Net investment losses shall be
    determined in the manner prescribed by
    the Secretary on the basis of the
    difference between

    [[Page 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) <> 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

    [[Page 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) <> Reporting.--A plan sponsor
    of a plan to which this paragraph applies shall--
    ``(i) give notice of such application to
    participants and beneficiaries of the plan, and
    ``(ii) inform the Pension Benefit Guaranty
    Corporation of such application in such form and
    manner as the Director of the Pension Benefit
    Guaranty Corporation may prescribe.''.

    (b) <> Effective Dates.--
    (1) In general.--The amendments made by this section shall
    take effect as of the first day of the first plan year ending
    after August 31, 2008, except that any election a plan makes
    pursuant to this section that affects the plan's funding
    standard account for the first plan year beginning after August
    31, 2008, shall be disregarded for purposes of applying the
    provisions of section 305 of the Employee Retirement Income
    Security Act of 1974 and section 432 of the Internal Revenue
    Code of 1986 to such plan year.
    (2) Restrictions on benefit increases.--Notwithstanding
    paragraph (1), the restrictions on plan amendments increasing
    benefits in sections 304(b)(8)(D) of such Act and 431(b)(8)(D)
    of such Code, as added by this section, shall take effect on the
    date of enactment of this Act.

    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 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.