106TH CONGRESS

1ST SESSION S. 1309

AN ACT

To amend title I of the Employee Retirement Income Security Act of 1974 to provide for the preemption of State

law in certain cases relating to certain church plans.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. PURPOSE.

2 The purpose of this Act is only to clarify the applica3 tion to a church plan that is a welfare plan of State insur4 ance laws that require or solely relate to licensing, sol5 vency, insolvency, or the status of such plan as a single

6 employer plan.

7 SEC. 2. CLARIFICATION OF CHURCH WELFARE PLAN STA8 TUS UNDER STATE INSURANCE LAW.

9 (a) IN GENERAL.—For purposes of determining the

10 status of a church plan that is a welfare plan under provi11 sions of a State insurance law described in subsection (b),

12 such a church plan (and any trust under such plan) shall

13 be deemed to be a plan sponsored by a single employer

14 that reimburses costs from general church assets, or pur15 chases insurance coverage with general church assets, or

16 both.

17 (b) STATE INSURANCE LAW.—A State insurance law

18 described in this subsection is a law that—

19 (1) requires a church plan, or an organization

20 described in section 414(e)(3)(A) of the Internal

21 Revenue Code of 1986 and section 3(33)(C)(i) of the

22 Employee Retirement Income Security Act of 1974

23 (29 U.S.C. 1002(33)(C)(i)) to the extent that it is

24 administering or funding such a plan, to be licensed;

25 or
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1 (2) relates solely to the solvency or insolvency

2 of a church plan (including participation in State

3 guaranty funds and associations).

4 (c) DEFINITIONS.—For purposes of this section:

5 (1) CHURCH PLAN.—The term ‘‘church plan’’

6 has the meaning given such term by section 414(e)

7 of the Internal Revenue Code of 1986 and section

8 3(33) of the Employee Retirement Income Security

9 Act of 1974 (29 U.S.C. 1002(33)).

10 (2) REIMBURSES COSTS FROM GENERAL

11 CHURCH ASSETS.—The term ‘‘reimburses costs from

12 general church assets’’ means engaging in an activ13 ity that is not the spreading of risk solely for the

14 purposes of the provisions of State insurance laws

15 described in subsection (b).

16 (3) WELFARE PLAN.—The term ‘‘welfare

17 plan’’—

18 (A) means any church plan to the extent

19 that such plan provides medical, surgical, or

20 hospital care or benefits, or benefits in the

21 event of sickness, accident, disability, death or

22 unemployment, or vacation benefits, apprentice23 ship or other training programs, or day care

24 centers, scholarship funds, or prepaid legal

25 services; and
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1 (B) does not include any entity, such as a

2 health insurance issuer described in section

3 9832(b)(2) of the Internal Revenue Code of

4 1986 or a health maintenance organization de5 scribed in section 9832(b)(3) of such Code, or

6 any other organization that does business with

7 the church plan or organization sponsoring or

8 maintaining such a plan.

9 (d) ENFORCEMENT AUTHORITY.—Notwithstanding

10 any other provision of this section, for purposes of enforc11 ing provisions of State insurance laws that apply to a

12 church plan that is a welfare plan, the church plan shall

13 be subject to State enforcement as if the church plan were

14 an insurer licensed by the State.

15 (e) APPLICATION OF SECTION.—Except as provided

16 in subsection (d), the application of this section is limited

17 to determining the status of a church plan that is a wel18 fare plan under the provisions of State insurance laws de19 scribed in subsection (b). This section shall not otherwise

20 be construed to recharacterize the status, or modify or af21 fect the rights, of any plan participant or beneficiary, in-
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1 cluding participants or beneficiaries who make plan con2 tributions.

Passed the Senate November 19, 1999.

Attest:

Secretary.
106TH CONGRESS

1ST SESSION S. 1309

AN ACT

To amend title I of the Employee Retirement Income Security Act of 1974 to provide for the preemption of State law in certain cases relating to

certain church plans.