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103D CONGRESS

2D SESSION H. R. 4648

To amend the Internal Revenue Code of 1986 to provide an exclusion from

gross income for that portion of a governmental pension received by

an individual which does not exceed the maximum benefits payable under

title II of the Social Security Act which could have been excluded from

income for the taxable year.

IN THE HOUSE OF REPRESENTATIVES

JUNE 24, 1994

Mr. VENTO introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

an exclusion from gross income for that portion of a

governmental pension received by an individual which

does not exceed the maximum benefits payable under

title II of the Social Security Act which could have

been excluded from income for the taxable year.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Public Pension Parity

5 Act of 1994’’.
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1 SEC. 2. EXCLUSION FOR CERTAIN PENSIONS AND ANNU2 ITIES UNDER PUBLIC RETIREMENT SYSTEMS.

3 (a) IN GENERAL.—Part III of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to

5 items specifically excluded from income) is amended by re6 designating section 136 as section 137 and by inserting

7 after section 135 the following new section:

8 ‘‘SEC. 136. CERTAIN PENSIONS AND ANNUITIES UNDER

9 PUBLIC RETIREMENT SYSTEMS.

10 ‘‘(a) GENERAL RULE.—Gross income does not in11 clude any amount (otherwise includable in gross income)

12 received by an individual as a qualified governmental pen13 sion.

14 ‘‘(b) LIMITATIONS.—

15 ‘‘(1) DOLLAR LIMITATION.—The aggregate

16 amount excluded under subsection (a) for the tax17 able year shall not exceed—

18 ‘‘(A) the maximum excludable social secu19 rity benefits of the taxpayer for such year, re20 duced by

21 ‘‘(B) the social security benefits (within

22 the meaning of section 86(d)) received by the

23 taxpayer during such year which were excluded

24 from gross income.

25 ‘‘(2) SERVICE REQUIREMENT.—Subsection (a)

26 shall not apply to any qualified governmental pen-
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1 sion received by the taxpayer during the taxable year

2 unless the taxpayer (or the spouse or former spouse

3 of the taxpayer) performed the service giving rise to

4 such pension.

5 ‘‘(c) DEFINITIONS.—For purposes of this section—

6 ‘‘(1) QUALIFIED GOVERNMENTAL PENSION.—

7 The term ‘qualified governmental pension’ means

8 any pension or annuity received under a public re9 tirement system to the extent such pension or annu10 ity is not attributable to service—

11 ‘‘(A) which constitutes employment for

12 purposes of chapter 21 (relating to the Federal

13 Insurance Contributions Act), or

14 ‘‘(B) which is covered by an agreement

15 made pursuant to section 218 of the Social Se16 curity Act.

17 ‘‘(2) MAXIMUM EXCLUDABLE SOCIAL SECURITY

18 BENEFITS.—The term ‘maximum excludable social

19 security benefits’ means an amount equal to so

20 much of the applicable maximum benefit amount for

21 the taxpayer for the taxable year which would be ex22 cluded from gross income if such benefit amount

23 were treated as social security benefits (within the

24 meaning of section 86(d)) received during the tax25 able year.
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1 ‘‘(3) APPLICABLE MAXIMUM BENEFIT

2 AMOUNT.—The term ‘applicable maximum benefit

3 amount’ means—

4 ‘‘(A) in the case of an unmarried individ5 ual, the maximum individual social security

6 benefit,’

7 ‘‘(B) in the case of a joint return, 150 per8 cent of the maximum individual social security

9 benefit, or

10 ‘‘(C) in the case of a married individual fil11 ing a separate return, 75 percent of the maxi12 mum individual social security benefit.

13 For purposes of the preceding sentence, marital sta14 tus shall be determined under section 7703.

15 ‘‘(4) MAXIMUM INDIVIDUAL SOCIAL SECURITY

16 BENEFIT.—

17 ‘‘(A) IN GENERAL.—The term ‘maximum

18 individual social security benefit’ means, with

19 respect to any taxable year, the maximum total

20 amount (as certified by the Secretary of Health

21 and Human Services to the Secretary) which

22 could be paid for all months in the calendar

23 year ending in the taxable year as old-age in24 surance benefits under section 202(a) of the So25 cial Security Act (without regard to any reduc-
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1 tion, deduction, or offset under section 202(k)

2 or section 203 of such Act) to any individual

3 who attained age 65, and filed application for

4 such benefits, on the first day of such calendar

5 year.

6 ‘‘(B) PART YEARS.—In the case of an indi7 vidual who receives a qualified governmental

8 pension with respect to a period of less than a

9 full taxable year, the maximum individual social

10 security benefit for such individual for such

11 year shall be reduced as provided in regulations

12 prescribed by the Secretary to properly cor13 respond to such period.

14 ‘‘(5) PUBLIC RETIREMENT SYSTEM.—The term

15 ‘public retirement system’ means any pension, annu16 ity, retirement, or similar fund or system established

17 by the United States, a State, a possession of the

18 United States, any political subdivision of any of the

19 foregoing, or the District of Columbia.’’

20 (b) TECHNICAL AMENDMENT.—Subparagraph (A) of

21 section 86(b)(2) of such Code (defining modified adjusted

22 gross income) is amended by inserting ‘‘136’’ before

23 ‘‘911’’.

24 (c) CLERICAL AMENDMENT.—The table of sections

25 for part III of subchapter B of chapter 1 of such Code
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1 (relating to items specifically excluded from income) is

2 amended by redesignating the item relating to section 136

3 as section 137 and by inserting after the item relating to

4 section 135 the following new item:

‘‘Sec. 136. Certain pensions and annuities under public retirement

systems.’’

5 (d) EFFECTIVE DATE.—The amendments made by

6 this Act shall apply to taxable years beginning after the

7 date of the enactment of this Act.

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