S6272 CONGRESSIONAL RECORD — SENATE September 12, 2012 

(Ms. STABENOW) and the Senator from 

Michigan (Mr. LEVIN) were added as cosponsors of S.J. Res. 44, a joint resolution granting the consent of Congress 

to the State and Province Emergency 

Management Assistance Memorandum 

of Understanding. 

S.J. RES. 48

At the request of Mr. JOHNSON of Wisconsin, the names of the Senator from 

Arkansas (Mr. BOOZMAN) and the Senator from Tennessee (Mr. CORKER) were 

added as cosponsors of S.J. Res. 48, a 

joint resolution disapproving the rule 

submitted by the Internal Revenue 

Service relating to the health insurance premium tax credit. 

S.J. RES. 50

At the request of Mr. HATCH, the 

names of the Senator from Indiana 

(Mr. COATS), the Senator from Oklahoma (Mr. INHOFE), the Senator from 

Maine (Ms. COLLINS) and the Senator 

from Tennessee (Mr. CORKER) were 

added as cosponsors of S.J. Res. 50, a 

joint resolution providing for congressional disapproval under chapter 8 of 

title 5, United States Code, of the rule 

submitted by the Office of Family Assistance of the Administration for Children and Families of the Department of 

Health and Human Services relating to 

waiver and expenditure authority 

under section 1115 of the Social Security Act (42 U.S.C. 1315) with respect to 

the Temporary Assistance for Needy 

Families program. 

S. RES. 401

At the request of Mr. WHITEHOUSE, 

the name of the Senator from Arkansas 

(Mr. PRYOR) was added as a cosponsor 

of S. Res. 401, a resolution expressing 

appreciation for Foreign Service and 

Civil Service professionals who represent the United States around the 

globe. 

S. RES. 448

At the request of Mrs. BOXER, the 

names of the Senator from New York 

(Mr. SCHUMER) and the Senator from 

Wisconsin (Mr. KOHL) were added as cosponsors of S. Res. 448, a resolution 

recognizing the 100th anniversary of 

Hadassah, the Women’s Zionist Organization of America, Inc. 

AMENDMENT NO. 2785

At the request of Mr. BEGICH, the 

name of the Senator from Washington 

(Ms. CANTWELL) was added as a cosponsor of amendment No. 2785 intended to 

be proposed to S. 3457, a bill to require 

the Secretary of Veterans Affairs to establish a veterans jobs corps, and for 

other purposes. 

AMENDMENT NO. 2786

At the request of Mr. MCCAIN, the 

name of the Senator from New Hampshire (Ms. AYOTTE) was added as a cosponsor of amendment No. 2786 intended to be proposed to S. 3457, a bill 

to require the Secretary of Veterans 

Affairs to establish a veterans jobs 

corps, and for other purposes. 

AMENDMENT NO. 2789

At the request of Mrs. MURRAY, the 

name of the Senator from West Virginia (Mr. ROCKEFELLER) was added as 

a cosponsor of amendment No. 2789 proposed to S. 3457, a bill to require the 

Secretary of Veterans Affairs to establish a veterans jobs corps, and for other 

purposes. 

f 

STATEMENTS ON INTRODUCED 

BILLS AND JOINT RESOLUTIONS 

By Mrs. HUTCHISON (for herself 

and Mr. CARDIN): 

S. 3532. A bill to amend the Internal 

Revenue Code of 1986 to clarify the 

treatment of church pension plans, and 

for other purposes; to the Committee 

on Finance. 

Mrs. HUTCHISON. Mr. President, I 

ask unanimous consent that this statement be included in the RECORD upon 

introduction of my legislation, the 

Church Plan Clarification Act of 2012, 

with Senator CARDIN. 

Today, my colleague Senator CARDIN

and I are reintroducing this legislation, 

which refines the language included in 

our previous bill, S. 143. 

Our goal is to resolve an unfortunate 

application of our current pension 

rules on church pension beneficiaries, 

and protect the retirement security of 

ministers and church lay workers. 

Church pensions are critically important compensation plans that help support over one million clergy members 

across the country in their retirement—particularly those who dedicated their careers to serving in economically disadvantaged congregations. 

Some of these plans date back to the 

18th Century, and they are designed to 

ensure that our pastors and lay staff, 

who are often paid lower salaries, have 

adequate resources during their retirement years. 

Today, denominational church plans 

provide benefits to an estimated one 

million-plus ministers, church workers, 

and their dependents, most of them 

working for small churches throughout 

the nation. 

Church plans developed structures 

and mechanisms that reflect the differing church polities they serve and 

their unique status has been recognized 

in law. 

However, recent IRS regulations governing 403(b) pension programs and legislative changes have resulted in uncertainty and compliance issues for 

church pension plans. In response, Senator CARDIN and I sent a letter to the 

Internal Revenue Service informing 

them of our legislation, nothing that 

the unintended consequences of their 

regulations may negatively affect 

church ministers and church lay workers. 

I hope we can work to provide clarity 

for these distinctive plans and resolve 

this issue before the end of the year. 

This unequal treatment is simply unfair, and it is time we correct it. 

I ask my colleagues to join Senator 

CARDIN and me today in establishing 

parity for the beneficiaries of church 

pensions by supporting this necessary, 

long overdue fix to the Internal Revenue Code. 

Mr. President, I ask unanimous consent that the text of the bill be printed 

in the RECORD. 

There being no objection, the text of 

the bill was ordered to be printed in 

the RECORD, as follows: 

S. 3532 

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 ‘‘Church Plan 

Clarification Act of 2012’’. 

SEC. 2. CHURCH PLAN CLARIFICATION. 

(a) APPLICATION OF CONTROLLED GROUP

RULES TO CHURCH PLANS.— 

(1) IN GENERAL.—Section 414(c) of the Internal Revenue Code of 1986 is amended— 

(A) by striking ‘‘For purposes’’ and inserting the following: 

‘‘(1) IN GENERAL.—For purposes’’, and 

(B) by adding at the end the following new 

paragraph: 

‘‘(2) CHURCH PLANS.— 

‘‘(A) GENERAL RULE.—Except as provided in 

subparagraphs (B) and (C), for purposes of 

this subsection and subsection (m), an organization that is otherwise eligible to participate in a church plan as defined in subsection (e) shall not be aggregated with another such organization and treated as a single employer with such other organization 

unless— 

‘‘(i) one such organization provides directly or indirectly at least 80 percent of the 

operating funds for the other organization 

during the preceding tax year of the recipient organization, and 

‘‘(ii) there is a degree of common management or supervision between the organizations. 

For purposes of this subparagraph, a degree 

of common management or supervision exists only if the organization providing the 

operating funds is directly involved in the 

day-to-day operations of the other organization. 

‘‘(B) NONQUALIFIED CHURCH-CONTROLLED ORGANIZATIONS.—Notwithstanding the provisions of subparagraph (A), for purposes of 

this subsection and subsection (m), an organization that is a nonqualified church-controlled organization shall be aggregated with 

one or more other nonqualified church-controlled organizations, or with an organization that is not exempt from tax under section 501, and treated as a single employer 

with such other organizations, if at least 80 

percent of the directors or trustees of such 

organizations are either representatives of, 

or directly or indirectly controlled by, the 

first organization. For purposes of this subparagraph, a ‘nonqualified church controlled 

organization’ shall mean a church-controlled 

organization described in section 501(c)(3) 

that is not a qualified church-controlled organization described in section 3121(w)(3)(B). 

‘‘(C) PERMISSIVE AGGREGATION AMONG

CHURCH-RELATED ORGANIZATIONS.—Organizations described in subparagraph (A) may 

elect to be treated as under common control 

for purposes of this subsection. Such election 

shall be made by the church or convention or 

association of churches with which such organizations are associated within the meaning of subsection (e)(3)(D), or by an organization determined by such church or convention or association of churches to be the appropriate organization for making such election. 

‘‘(D) PERMISSIVE DISAGGREGATION OF

CHURCH-RELATED ORGANIZATIONS.—For purposes of subparagraph (A), in the case of a 

church plan (as defined in subsection (e)), 

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September 12, 2012 CONGRESSIONAL RECORD — SENATE S6273 

any employer may permissively disaggregate 

those entities that are not churches (as defined in section 403(b)(12)(B)) separately from 

those entities that are churches, even if such 

entities maintain separate church plans. 

‘‘(E) ANTI-ABUSE RULE.—For purposes of 

subparagraphs (A) and (B), the anti-abuse 

rule in Treasury Regulation section 1.414(c)– 

5(f) shall apply.’’. 

(2) EFFECTIVE DATE.—The amendments 

made by this subsection shall apply to taxable years beginning before, on, or after the 

date of the enactment of this Act. 

(b) APPLICATION OF CONTRIBUTION AND

FUNDING LIMITATIONS TO 403(b) GRANDFATHERED DEFINED BENEFIT PLANS.— 

(1) IN GENERAL.—Section 251(e)(5) of the 

Tax Equity and Fiscal Responsibility Act of 

1982 (Public Law 97–248), is amended— 

(A) by striking ‘‘403(b)(2)’’ and inserting 

‘‘403(b)’’, and 

(B) by inserting before the period at the 

end the following: ‘‘, and shall be subject to 

the applicable limitations of section 415(b) of 

such Code as if it were a defined benefit plan 

under section 401(a) of such Code and not the 

limitations of section 415(c) of such Code (relating to limitation for defined contribution 

plans).’’. 

(2) EFFECTIVE DATE.—The amendments 

made by this subsection shall apply as if included in the enactment of the Tax Equity 

and Fiscal Responsibility Act of 1982. 

(c) AUTOMATIC ENROLLMENT BY CHURCH

PLANS.— 

(1) IN GENERAL.—This subsection shall supersede any law of a State which would directly or indirectly prohibit or restrict the 

inclusion in any church plan (as defined in 

this subsection) of an automatic contribution arrangement. 

(2) DEFINITION OF AUTOMATIC CONTRIBUTION

ARRANGEMENT.—For purposes of this subsection, the term ‘‘automatic contribution 

arrangement’’ means an arrangement— 

(A) under which a participant may elect to 

have the plan sponsor make payments as 

contributions under the plan on behalf of the 

participant, or to the participant directly in 

cash, and 

(B) under which a participant is treated as 

having elected to have the plan sponsor 

make such contributions in an amount equal 

to a uniform percentage of compensation 

provided under the plan until the participant 

specifically elects not to have such contributions made (or specifically elects to have 

such contributions made at a different percentage). 

(3) NOTICE REQUIREMENTS.— 

(A) IN GENERAL.—The plan administrator of 

an automatic contribution arrangement 

shall, within a reasonable period before such 

plan year, provide to each participant to 

whom the arrangement applies for such plan 

year notice of the participant’s rights and 

obligations under the arrangement which— 

(i) is sufficiently accurate and comprehensive to apprise the participant of such rights 

and obligations, and 

(ii) is written in a manner calculated to be 

understood by the average participant to 

whom the arrangement applies. 

(B) ELECTION REQUIREMENTS.—A notice 

shall not be treated as meeting the requirements of subparagraph (A) with respect to a 

participant unless— 

(i) the notice includes an explanation of 

the participant’s right under the arrangement not to have elective contributions 

made on the participant’s behalf (or to elect 

to have such contributions made at a different percentage), 

(ii) the participant has a reasonable period 

of time, after receipt of the notice described 

in clause (i) and before the first elective contribution is made, to make such election, 

and 

(iii) the notice explains how contributions 

made under the arrangement will be invested 

in the absence of any investment election by 

the participant. 

(4) EFFECTIVE DATE.—This subsection shall 

take effect on the date of the enactment of 

this Act. 

(d) ALLOW CERTAIN PLAN TRANSFERS AND

MERGERS.— 

(1) IN GENERAL.—Section 414 of the Internal 

Revenue Code of 1986 is amended by adding 

at the end the following new subsection: 

‘‘(z) CERTAIN PLAN TRANSFERS AND MERGERS.— 

‘‘(1) IN GENERAL.—Under rules prescribed 

by the Secretary, except as provided in paragraph (2), no amount shall be includible in 

gross income by reason of— 

‘‘(A) a transfer of all or a portion of the account balance of a participant or beneficiary, whether or not vested, from a plan 

described in section 401(a) or an annuity contract described in section 403(b), which is a 

church plan described in subsection (e) to an 

annuity contract described in section 403(b), 

if such plan and annuity contract are both 

maintained by the same church or convention or association of churches, 

‘‘(B) a transfer of all or a portion of the account balance of a participant or beneficiary, whether or not vested, from an annuity contract described in section 403(b) to a 

plan described in section 401(a) or an annuity 

contract described in section 403(b), which is 

a church plan described in subsection (e), if 

such plan and annuity contract are both 

maintained by the same church or convention or association of churches, or 

‘‘(C) a merger of a plan described in section 

401(a), or an annuity contract described in 

section 403(b), which is a church plan described in subsection (e) with an annuity 

contract described in section 403(b), if such 

plan and annuity contract are both maintained by the same church or convention or 

association of churches. 

‘‘(2) LIMITATION.—Paragraph (1) shall not 

apply to a transfer or merger unless the participant’s or beneficiary’s benefit immediately after the transfer or merger is equal 

to or greater than the participant’s or beneficiary’s benefit immediately before the 

transfer or merger. 

‘‘(3) QUALIFICATION.—A plan or annuity 

contract shall not fail to be considered to be 

described in sections 401(a) or 403(b) merely 

because such plan or account engages in a 

transfer or merger described in this subsection. 

‘‘(4) DEFINITIONS.—For purposes of this subsection: 

‘‘(A) CHURCH.—The term ‘church’ includes 

an organization described in subparagraph 

(A) or (B)(ii) of subsection (e)(3). 

‘‘(B) ANNUITY CONTRACT.—The term ‘annuity contract’ includes a custodial account described in section 403(b)(7) and a retirement 

income account described in section 

403(b)(9).’’. 

(2) EFFECTIVE DATE.—The amendment 

made by this subsection shall apply to transfers or mergers occurring after the date of 

the enactment of this Act. 

(e) INVESTMENTS BY CHURCH PLANS IN COLLECTIVE TRUSTS.— 

(1) IN GENERAL.—In the case of— 

(A) a church plan (as defined in section 

414(e) of the Internal Revenue Code of 1986), 

including a plan described in section 401(a) of 

such Code and a retirement income account 

described in section 403(b)(9) of such Code, 

and 

(B) an organization described in section 

414(e)(3)(A) of such Code the principal purpose or function of which is the administration of such a plan or account, 

the assets of such plan, account, or organization (including any assets otherwise permitted to be commingled for investment purposes with the assets of such a plan, account, 

or organization) may be invested in a group 

trust otherwise described in Internal Revenue Service Revenue Ruling 81–100 (as modified by Internal Revenue Service Revenue 

Rulings 2004–67 and 2011–1), or any subsequent revenue ruling that supersedes or 

modifies such revenue ruling, without adversely affecting the tax status of the group 

trust, such plan, account, or organization, or 

any other plan or trust that invests in the 

group trust. 

(2) EFFECTIVE DATE.—This subsection shall 

apply to investments made after the date of 

the enactment of this Act. 

f 

SUBMITTED RESOLUTIONS 

SENATE RESOLUTION 551—COMMENDING THE 4 AMERICAN PUBLIC SERVANTS WHO DIED IN 

BENGHAZI, LIBYA, INCLUDING 

AMBASSADOR J. CHRISTOPHER 

STEVENS, FOR THEIR TIRELESS 

EFFORTS ON BEHALF OF THE 

AMERICAN PEOPLE AND CONDEMNING THE VIOLENT ATTACK 

ON THE UNITED STATES CONSULATE IN BENGHAZI 

Mr. LUGAR (for himself, Mr. KERRY, 

Mr. REID of Nevada, Mr. MCCONNELL, 

Mr. AKAKA, Mr. ALEXANDER, Ms. 

AYOTTE, Mr. BARRASSO, Mr. BAUCUS, 

Mr. BEGICH, Mr. BENNET, Mr. BINGAMAN, Mr. BLUMENTHAL, Mr. BLUNT, Mr. 

BOOZMAN, Mrs. BOXER, Mr. BROWN of 

Massachusetts, Mr. BROWN of Ohio, Mr. 

BURR, Ms CANTWELL, Mr. CARDIN, Mr. 

CARPER, Mr. CASEY, Mr. CHAMBLISS, 

Mr. COATS, Mr. COBURN, Mr. COCHRAN, 

Ms. COLLINS, Mr. CONRAD, Mr. COONS, 

Mr. CORKER, Mr. CORNYN, Mr. CRAPO, 

Mr. DEMINT, Mr. DURBIN, Mr. ENZI, 

Mrs. FEINSTEIN, Mr. FRANKEN, Mrs. 

GILLIBRAND, Mr. GRAHAM, Mr. GRASSLEY, Mrs. HAGAN, Mr. HARKIN, Mr. 

HATCH, Mr. HELLER, Mr. HOEVEN, Mrs. 

HUTCHISON, Mr. INHOFE, Mr. INOUYE, 

Mr. ISAKSON, Mr. JOHANNS, Mr. JOHNSON of Wisconsin, Mr. JOHNSON of 

South Dakota, Mr. KIRK, Ms. KLOBUCHAR, Mr. KOHL, Mr. KYL, Ms. LANDRIEU, Mr. LAUTENBERG, Mr. LEAHY, 

Mr. LEE, Mr. LEVIN, Mr. LIEBERMAN, 

Mr. MANCHIN, Mr. MCCAIN, Mrs. MCCASKILL, Mr. MENENDEZ, Mr. MERKLEY, Ms. 

MIKULSKI, Mr. MORAN, Ms. MURKOWSKI, 

Mrs. MURRAY, Mr. NELSON of Nebraska, 

Mr. NELSON of Florida, Mr. PAUL, Mr. 

PORTMAN, Mr. PRYOR, Mr. REED of 

Rhode Island, Mr. RISCH, Mr. ROBERTS, 

Mr. ROCKEFELLER, Mr. RUBIO, Mr. 

SANDERS, Mr. SCHUMER, Mr. SESSIONS, 

Mrs. SHAHEEN, Mr. SHELBY, Ms. SNOWE, 

Ms. STABENOW, Mr. TESTER, Mr. THUNE, 

Mr. TOOMEY, Mr. UDALL of Colorado, 

Mr. UDALL of New Mexico, Mr. VITTER, 

Mr. WARNER, Mr. WEBB, Mr. WHITEHOUSE, Mr. WICKER, and Mr. WYDEN) 

submitting the following resolution; 

which was considered and agreed to: 

S. RES. 551 

Whereas on September 11, 2012, 4 American 

public servants, including United States Ambassador to Libya, John Christopher Stevens, and Sean Smith, were killed in a reprehensible and vicious attack on the United 

States consulate in Benghazi, Libya; 

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