99–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 112–131 

CHURCH PLAN INVESTMENT CLARIFICATION ACT 

JULY 1, 2011.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. BACHUS, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 33] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 33) to amend the Securities Act of 1933 to specify when 

certain securities issued in connection with church plans are treated as exempted securities for purposes of that Act, having considered the same, report favorably thereon with an amendment and 

recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Church Plan Investment Clarification Act’’. 

SEC. 2. SECURITIES ACT OF 1933 AMENDMENT. 

Section 3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is amended— 

(1) by inserting ‘‘(other than a retirement income account described in section 

403(b)(9) of the Internal Revenue Code of 1986, to the extent that the interest 

or participation in such single trust fund or collective trust fund is issued to 

a church, a convention or association of churches, or an organization described 

in section 414(e)(3)(A) of such Code establishing or maintaining the retirement 

income account or to a trust established by any such entity in connection with 

the retirement income account)’’ after ‘‘403(b) of such Code’’; and 

(2) by inserting ‘‘(other than a person participating in a church plan who is 

described in section 414(e)(3)(B) of the Internal Revenue Code of 1986)’’ after 

‘‘section 401(c)(1) of such Code’’. 

PURPOSE AND SUMMARY

H.R. 33, the Church Plan Investment Clarification Act, would 

make a technical correction to Public Law 108–359, which currently prevents church pension plans from investing in collective 

trusts. The bill would broaden and clarify an exemption that exists 


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in the current law to allow church pension plans to invest in collective trusts. In 2003, Congress attempted to achieve this result, but 

omitted a necessary exemption from the Securities Act of 1933 to 

provide parallel treatment for church plans with exemptions in the 

Investment Company Act of 1940 and the Securities Exchange Act 

of 1934. Without this correction, collective trusts will not permit investments from church pension plans. 

BACKGROUND AND NEED FOR LEGISLATION

H.R. 33, the Church Plan Investment Clarification Act, introduced by Insurance, Housing and Community Opportunity Subcommittee Chairman Judy Biggert, would broaden and clarify an 

exemption that exists in the current law to allow church pension 

plans to invest in collective trusts. During the 108th Congress, in 

2003, Representative Biggert sponsored H.R. 1533, which sought to 

amend the Investment Company Act of 1940 to exclude from its 

definition of ‘‘investment company’’ any collective trust fund maintained by a bank consisting solely of certain church pension plans, 

companies, or accounts specified in the Internal Revenue Code. The 

bill amended the Securities Act of 1933 and the Securities Exchange Act of 1934 to exempt such church pension plans, companies, or accounts from regulation under such Acts, including registration requirements. H.R. 1533 passed the house on suspension 

397–0, and later became Public Law 108–359. 

Unfortunately, H.R. 1533 failed to exempt church plans not funded by tax-deferred annuities or plans that did not include self-employed individuals. The 1933 Act church plan exemption failed to 

remove these two conditions for church plans, which is the only 

place that the collective trust exemptions do not provide parallel 

treatment among the various securities laws. H.R. 33 would fix 

that omission. 

Representative Biggert introduced H.R. 33 on January 5, 2011. 

On March 10, 2011, Representative Biggert raised H.R. 33 with 

Ms. Meredith Cross, Securities and Exchange Commission (SEC) 

Director of Corporation Finance, during the Capital Markets and 

Government Sponsored Enterprises Subcommittee hearing entitled 

‘‘Oversight of the Securities and Exchange Commission’s Operations, Activities, Challenges and FY 2012 Budget Request.’’ Ms. 

Cross indicated that the SEC wholeheartedly embraced the idea 

that participants in a church plan should have the same opportunities as participants in other plans and that there should not be regulatory obstacles to such investment, although the Commission 

itself had not officially adopted a position on the bill. 

HEARINGS

On March 10, 2011, the Subcommittee on Capital Markets and 

Government Sponsored Enterprises held a hearing entitled ‘‘Oversight of the Securities and Exchange Commission’s Operations, Activities, Challenges and FY 2012 Budget Request.’’ The Subcommittee received testimony from the following witnesses: Mr. 

Robert Cook, Director, Division of Trading and Markets, Securities 

and Exchange Commission (SEC); Ms. Meredith Cross, Director, 

Division of Corporation Finance, SEC: Mr. Robert Khuzami, Director, Division of Enforcement, SEC; Ms. Eileen Rominger, Director, 


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Division of Investment Management, SEC; and Mr. Carlo di Florio, 

Director, Office of Compliance Inspections and Examinations, SEC. 

During the hearing, Representative Biggert asked Ms. Meredith 

Cross, the Securities and Exchange Commission’s Director of Corporation Finance, to comment on the need for legislation to modify 

the treatment of church pension plan investments in collective 

trusts. 

COMMITTEE CONSIDERATION

The Subcommittee on Capital Markets and Government Sponsored Enterprises met in open session on May 3 and 4, 2011, and 

ordered H.R. 33, as amended, favorably reported to the full Committee by voice vote. 

The Committee on Financial Services met in open session on 

June 22, 2011 and ordered H.R. 33, without amendment, favorably 

reported to the House by voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. 

There were no record votes taken on amendments or in connection with ordering H.R. 33 reported to the House. A motion by 

Chairman Bachus to report the bill, as amended, to the House with 

a favorable recommendation was agreed to by voice vote. 

During consideration of H.R. 33, the following motion was considered by the Committee: 

1. A motion offered by Mr. Bachus, to move the previous question 

on H.R. 33, was agreed to by voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held hearings and made 

findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

H.R. 33, Church Plan Investment Clarification Act, would make 

a technical correction to Public Law 108–359, which currently prevents church pension plans from investing in collective trusts. The 

bill would broaden and clarify an exemption that exists in the current law to allow church pension plans to invest in collective trusts. 

In 2003, Congress attempted to achieve this result, but omitted a 

necessary exemption from the Securities Act of 1933 to provide parallel treatment for church plans with exemptions in the Investment 

Company Act of 1940 and the Securities Exchange Act of 1934. 

Without this correction, collective trusts will not permit investments from church pension plans. 


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NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

JUNE 30, 2011. 

Hon. SPENCER BACHUS, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 33, the Church Plan Investment Clarification Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Dubary Brea and 

Susan Willie. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 33—Church Plan Investment Clarification Act 

H.R. 33 would amend the Securities and Exchange Act of 1933 

to allow churches to invest pension funds in certain investment vehicles, known as collective trust funds (CTFs), that are offered by 

banks and trust companies. Under current law, CTFs are exempt 

from requirements to register with the Securities and Exchange 

Commission (SEC) as long as the CTF accepts investments only 

from certain eligible employee-benefit plans. H.R. 33 would add 

church pension plans to the group of plans that would be eligible 

to participate in a CTF. 

CBO estimates that implementing H.R. 33 would affect federal 

spending subject to appropriation, but because the bill would have 

a negligible impact on the SEC’s workload, such effects would not 

be significant. Enacting H.R. 33 would not affect direct spending or 

revenues; therefore, pay-as-you-go procedures do not apply. 

H.R. 33 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 


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The CBO staff contacts for this estimate are Dubary Brea and 

Susan Willie. The estimate was approved by Theresa Gullo, Deputy 

Assistant Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

H.R. 33 does not contain any congressional earmarks, limited tax 

benefits, or limited tariff benefits as defined in clause 9 of rule XXI. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section provides a short title to the bill by citing it as the 

‘‘Church Plan Investment Clarification Act.’’ 

Section 2. Securities Act of 1933 amendments 

This section amends the Securities Act of 1933 by inserting language that provides for an exemption for a church plan established 

under 403(b)(9) of the Internal Revenue Code of 1986 to invest in 

a collective trust. In addition, because of the unique tax treatment 

of clergy and lay workers who participate in their denominational 

pension plans, this section clarifies that the exemption allows them 

to invest in collective trusts. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

SECURITIES ACT OF 1933 

TITLE I—SHORT TITLE 

* * * * * * * 


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EXEMPTED SECURITIES

SEC. 3. (a) Except as hereinafter expressly provided, the provisions of this title shall not apply to any of the following classes of 

securities: 

(1) * * * 

(2) Any security issued or guaranteed by the United States 

or any Territory thereof, or by the District of Columbia, or by 

any State of the United States, or by any political subdivision 

of a State or Territory, or by any public instrumentality of one 

or more States or Territories, or by any person controlled or 

supervised by and acting as an instrumentality of the Government of the United States pursuant to authority granted by 

the Congress of the United States; or any certificate of deposit 

for any of the foregoing; or any security issued or guaranteed 

by any bank; or any security issued by or representing an interest in or a direct obligation of a Federal Reserve bank; or 

any interest or participation in any common trust fund or similar fund that is excluded from the definition of the term ‘‘investment company’’ under section 3(c)(3) of the Investment 

Company Act of 1940; or any security which is an industrial 

development bond (as defined in section 103(c)(2) of the Internal Revenue Code of 1954) the interest on which is excludable 

from gross income under section 103(a)(1) of such Code if, by 

reason of the application of paragraph (4) or (6) of section 

103(c) of such Code (determined as if paragraphs (4)(A), (5), 

and (7) were not included in such section 103(c)), paragraph (1) 

of such section 103(c) does not apply to such security; or any 

interest or participation in a single trust fund, or in a collective 

trust fund maintained by a bank, or any security arising out 

of a contract issued by an insurance company, which interest, 

participation, or security is issued in connection with (A) a 

stock bonus, pension, or profit-sharing plan which meets the 

requirements for qualification under section 401 of the Internal 

Revenue Code of 1954, (B) an annuity plan which meets the requirements for the deduction of the employer’s contributions 

under section 404(a)(2) of such Code, (C) a governmental plan 

as defined in section 414(d) of such Code which has been established by an employer for the exclusive benefit of its employees 

or their beneficiaries for the purpose of distributing to such 

employees or their beneficiaries the corpus and income of the 

funds accumulated under such plan, if under such plan it is 

impossible, prior to the satisfaction of all liabilities with respect to such employees and their beneficiaries, for any part of 

the corpus or income to be used for, or diverted to, purposes 

other than the exclusive benefit of such employees or their 

beneficiaries, or (D) a church plan, company, or account that 

is excluded from the definition of an investment company 

under section 3(c)(14) of the Investment Company Act of 1940, 

other than any plan described in subparagraph (A), (B), (C), or 

(D) of this paragraph (i) the contributions under which are 

held in a single trust fund or in a separate account maintained 

by an insurance company for a single employer and under 

which an amount in excess of the employer’s contribution is allocated to the purchase of securities (other than interests or 


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participations in the trust or separate account itself) issued by 

the employer or any company directly or indirectly controlling, 

controlled by, or under common control with the employer, (ii) 

which covers employees some or all of whom are employees 

within the meaning of section 401(c)(1) of such Code (other 

than a person participating in a church plan who is described 

in section 414(e)(3)(B) of the Internal Revenue Code of 1986), or 

(iii) which is a plan funded by an annuity contract described 

in section 403(b) of such Code (other than a retirement income 

account described in section 403(b)(9) of the Internal Revenue 

Code of 1986, to the extent that the interest or participation in 

such single trust fund or collective trust fund is issued to a 

church, a convention or association of churches, or an organization described in section 414(e)(3)(A) of such Code establishing 

or maintaining the retirement income account or to a trust established by any such entity in connection with the retirement 

income account). The Commission, by rules and regulations or 

order, shall exempt from the provisions of section 5 of this title 

any interest or participation issued in connection with a stock 

bonus, pension, profit-sharing, or annuity plan which covers 

employees some or all of whom are employees within the 

meaning of section 401(c)(1) of the Internal Revenue Code of 

1954, if and to the extent that the Commission determines this 

to be necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly 

intended by the policy and provisions of this title. For purposes 

of this paragraph, a security issued or guaranteed by a bank 

shall not include any interest or participation in any collective 

trust fund maintained by a bank; and the term ‘‘bank’’ means 

any national bank, or any banking institution organized under 

the laws of any State, territory, or the District of Columbia, 

the business of which is substantially confined to banking and 

is supervised by the State or territorial banking commission or 

similar official; except that in the case of a common trust fund 

or similar fund, or a collective trust fund, the term ‘‘bank’’ has 

the same meaning as in the Investment Company Act of 1940; 

* * * * * * * 

Æ 


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