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103D CONGRESS

2D SESSION H. R. 4655

To amend the Internal Revenue Code of 1986 to exclude length of service

awards to volunteers performing fire fighting or prevention services,

emergency medical services, or ambulance services from the limitations

applicable to certain deferred compensation plans, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 27, 1994

Mr. MCNULTY (for himself and Mr. BUNNING) 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 exclude

length of service awards to volunteers performing fire

fighting or prevention services, emergency medical services, or ambulance services from the limitations applicable to certain deferred compensation plans, and for other

purposes.

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. TREATMENT OF LENGTH OF SERVICE AWARDS

2 TO VOLUNTEERS PERFORMING FIRE FIGHT3 ING OR PREVENTION SERVICES, EMERGENCY

4 MEDICAL SERVICES, OR AMBULANCE SERV5 ICES.

6 (a) IN GENERAL.—Paragraph (11) of section 457(e)

7 of the Internal Revenue Code of 1986 (relating to deferred

8 compensation plans of State and local governments and

9 tax-exempt organizations) is amended to read as follows:

10 ‘‘(11) CERTAIN PLANS EXCLUDED.—

11 ‘‘(A) IN GENERAL.—The following plans

12 shall be treated as not providing for the defer13 ral of compensation:

14 ‘‘(i) Any bona fide vacation leave, sick

15 leave, compensatory time, severance pay,

16 disability pay, or death benefit plan.

17 ‘‘(ii) Any plan paying solely length of

18 service awards to bona fide volunteers (or

19 their beneficiaries) on account of qualified

20 services performed by such volunteers.

21 ‘‘(B) SPECIAL RULES APPLICABLE TO

22 LENGTH OF SERVICE AWARD PLANS.—An indi23 vidual shall be treated as a bona fide volunteer

24 for purposes of subparagraph (A)(ii) if the only

25 compensation received by such individual for

26 performing qualified services is in the form of—
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1 ‘‘(i) reimbursement for (or a reason2 able allowance for) reasonable expenses in3 curred in the performance of such services,

4 or

5 ‘‘(ii) reasonable benefits (including

6 length of service awards), and nominal fees

7 for such services, customarily paid by eligi8 ble employers in connection with the per9 formance of such services by volunteers.

10 ‘‘(C) QUALIFIED SERVICES.—For purposes

11 of this paragraph, the term ‘qualified services’

12 means fire fighting and prevention services,

13 emergency medical services, and ambulance

14 services.’’

15 (b) EXEMPTION FROM SOCIAL SECURITY TAXES.—

16 (1) Subsection (i) of section 3121 of such Code

17 is amended by adding at the end the following new

18 paragraph:

19 ‘‘(6) VOLUNTEERS PERFORMING FIRE AND

20 MEDICAL SERVICES.—For purposes of this chapter,

21 the term ‘wages’ shall not include—

22 ‘‘(A) any amount deferred under a plan de23 scribed in section 457(e)(11)(A)(ii) and main24 tained by an eligible employer (as defined in

25 section 457(e)(1)), and
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1 ‘‘(B) any payment from such a plan.’’

2 (2) Section 209 of the Social Security Act is

3 amended by adding at the end the following new

4 subsection:

5 ‘‘(l) For purposes of this title, the term ‘wages’ shall

6 not include—

7 ‘‘(1) any amount deferred under a plan de8 scribed in section 457(e)(11)(A)(ii) of the Internal

9 Revenue Code of 1986 and maintained by an eligible

10 employer (as defined in section 457(e)(1) of such

11 Code), and

12 ‘‘(2) any payment from such a plan.’’

13 (c) EFFECTIVE DATE.—

14 (1) SUBSECTION (a).—The amendment made

15 by subsection (a) shall apply to taxable years begin16 ning after the date of the enactment of this Act.

17 (2) SUBSECTION (b).—The amendment made

18 by subsection (b) shall apply to remuneration paid

19 after the date of the enactment of this Act.

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