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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3962 Enrolled Bill (ENR)]

        H.R.3962

                      One Hundred Eleventh Congress

                                 of the

                        United States of America

                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the fifth day of January, two thousand and ten

                                 An Act

 
   To provide a physician payment update, to provide pension funding 
                     relief, and for other purposes.

    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 ``Preservation of Access to Care for 
Medicare Beneficiaries and Pension Relief Act of 2010''.

                       TITLE I--HEALTH PROVISIONS

    SEC. 101. PHYSICIAN PAYMENT UPDATE.
    (a) In General.--Section 1848(d) of the Social Security Act (42 
U.S.C. 1395w-4(d)) is amended--
        (1) in paragraph (10), in the heading, by striking ``portion'' 
    and inserting ``January through may ''; and
        (2) by adding at the end the following new paragraph:
        ``(11) Update for june through november of 2010.--
            ``(A) In general.--Subject to paragraphs (7)(B), (8)(B), 
        (9)(B), and (10)(B), in lieu of the update to the single 
        conversion factor established in paragraph (1)(C) that would 
        otherwise apply for 2010 for the period beginning on June 1, 
        2010, and ending on November 30, 2010, the update to the single 
        conversion factor shall be 2.2 percent.
            ``(B) No effect on computation of conversion factor for 
        remaining portion of 2010 and subsequent years.--The conversion 
        factor under this subsection shall be computed under paragraph 
        (1)(A) for the period beginning on December 1, 2010, and ending 
        on December 31, 2010, and for 2011 and subsequent years as if 
        subparagraph (A) had never applied.''.
    (b) Statutory Paygo.--The budgetary effects of this Act, for the 
purpose of complying with the Statutory Pay-As-You-Go Act of 2010, 
shall be determined by reference to the latest statement titled 
``Budgetary Effects of PAYGO Legislation'' for this Act, jointly 
submitted for printing in the Congressional Record by the Chairmen of 
the House and Senate Budget Committees, provided that such statement 
has been submitted prior to the vote on passage in the House acting 
first on this conference report or amendment between the Houses.
    SEC. 102. CLARIFICATION OF 3-DAY PAYMENT WINDOW.
    (a) In General.--Section 1886 of the Social Security Act (42 U.S.C. 
1395ww) is amended--
        (1) by adding at the end of subsection (a)(4) the following new 
    sentence: ``In applying the first sentence of this paragraph, the 
    term `other services related to the admission' includes all 
    services that are not diagnostic services (other than ambulance and 
    maintenance renal dialysis services) for which payment may be made 
    under this title that are provided by a hospital (or an entity 
    wholly owned or operated by the hospital) to a patient--
            ``(A) on the date of the patient's inpatient admission; or
            ``(B) during the 3 days (or, in the case of a hospital that 
        is not a subsection (d) hospital, during the 1 day) immediately 
        preceding the date of such admission unless the hospital 
        demonstrates (in a form and manner, and at a time, specified by 
        the Secretary) that such services are not related (as 
        determined by the Secretary) to such admission.''; and
        (2) in subsection (d)(7)--
            (A) in subparagraph (A), by striking ``and'' at the end;
            (B) in subparagraph (B), by striking the period and 
        inserting ``, and''; and
            (C) by adding at the end the following new subparagraph:
            ``(C) the determination of whether services provided prior 
        to a patient's inpatient admission are related to the admission 
        (as described in subsection (a)(4)).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after the date of the enactment of 
this Act.
    (c) No Reopening of Previously Bundled Claims.--
        (1) In general.--The Secretary of Health and Human Services may 
    not reopen a claim, adjust a claim, or make a payment pursuant to 
    any request for payment under title XVIII of the Social Security 
    Act, submitted by an entity (including a hospital or an entity 
    wholly owned or operated by the hospital) for services described in 
    paragraph (2) for purposes of treating, as unrelated to a patient's 
    inpatient admission, services provided during the 3 days (or, in 
    the case of a hospital that is not a subsection (d) hospital, 
    during the 1 day) immediately preceding the date of the patient's 
    inpatient admission.
        (2) Services described.--For purposes of paragraph (1), the 
    services described in this paragraph are other services related to 
    the admission (as described in section 1886(a)(4) of the Social 
    Security Act (42 U.S.C. 1395ww(a)(4)), as amended by subsection 
    (a)) which were previously included on a claim or request for 
    payment submitted under part A of title XVIII of such Act for which 
    a reopening, adjustment, or request for payment under part B of 
    such title, was not submitted prior to the date of the enactment of 
    this Act.
    (d) Implementation.--Notwithstanding any other provision of law, 
the Secretary of Health and Human Services may implement the provisions 
of this section (and amendments made by this section) by program 
instruction or otherwise.
    (e) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed as changing the policy described in section 
1886(a)(4) of the Social Security Act (42 U.S.C. 1395ww(a)(4)), as 
applied by the Secretary of Health and Human Services before the date 
of the enactment of this Act, with respect to diagnostic services.
    SEC. 103. ESTABLISH A CMS-IRS DATA MATCH TO IDENTIFY FRAUDULENT 
      PROVIDERS.
    (a) Authority To Disclose Return Information Concerning Outstanding 
Tax Debts for Purposes of Enhancing Medicare Program Integrity.--
        (1) In general.--Section 6103(l) of the Internal Revenue Code 
    of 1986 is amended by adding at the end the following new 
    paragraph:
        ``(22) Disclosure of return information to department of health 
    and human services for purposes of enhancing medicare program 
    integrity.--
            ``(A) In general.--The Secretary shall, upon written 
        request from the Secretary of Health and Human Services, 
        disclose to officers and employees of the Department of Health 
        and Human Services return information with respect to a 
        taxpayer who has applied to enroll, or reenroll, as a provider 
        of services or supplier under the Medicare program under title 
        XVIII of the Social Security Act. Such return information shall 
        be limited to--
                ``(i) the taxpayer identity information with respect to 
            such taxpayer;
                ``(ii) the amount of the delinquent tax debt owed by 
            that taxpayer; and
                ``(iii) the taxable year to which the delinquent tax 
            debt pertains.
            ``(B) Restriction on disclosure.--Return information 
        disclosed under subparagraph (A) may be used by officers and 
        employees of the Department of Health and Human Services for 
        the purposes of, and to the extent necessary in, establishing 
        the taxpayer's eligibility for enrollment or reenrollment in 
        the Medicare program, or in any administrative or judicial 
        proceeding relating to, or arising from, a denial of such 
        enrollment or reenrollment, or in determining the level of 
        enhanced oversight to be applied with respect to such taxpayer 
        pursuant to section 1866(j)(3) of the Social Security Act.
            ``(C) Delinquent tax debt.--For purposes of this paragraph, 
        the term `delinquent tax debt' means an outstanding debt under 
        this title for which a notice of lien has been filed pursuant 
        to section 6323, but the term does not include a debt that is 
        being paid in a timely manner pursuant to an agreement under 
        section 6159 or 7122, or a debt with respect to which a 
        collection due process hearing under section 6330 is requested, 
        pending, or completed and no payment is required.''.
        (2) Conforming amendments.--Section 6103(p)(4) of such Code, as 
    amended by sections 1414 and 3308 of Public Law 111-148, in the 
    matter preceding subparagraph (A) and in subparagraph (F)(ii), is 
    amended by striking ``or (17)'' and inserting ``(17), or (22)'' 
    each place it appears.
    (b) Secretary's Authority To Use Information From the Department of 
Treasury in Medicare Enrollments and Reenrollments.--Section 1866(j)(2) 
of the Social Security Act (42 U.S.C. 1395cc(j)), as inserted by 
section 6401(a) of Public Law 111-148, is further amended--
        (1) by redesignating subparagraph (E) as subparagraph (F); and
        (2) by inserting after subparagraph (D) the following new 
    subparagraph:
            ``(E) Use of information from the department of treasury 
        concerning tax debts.--In reviewing the application of a 
        provider of services or supplier to enroll or reenroll under 
        the program under this title, the Secretary shall take into 
        account the information supplied by the Secretary of the 
        Treasury pursuant to section 6103(l)(22) of the Internal 
        Revenue Code of 1986, in determining whether to deny such 
        application or to apply enhanced oversight to such provider of 
        services or supplier pursuant to paragraph (3) if the Secretary 
        determines such provider of services or supplier owes such a 
        debt.''.
    (c) Authority To Adjust Payments of Providers of Services and 
Suppliers With the Same Tax Identification Number for Medicare 
Obligations.--Section 1866(j)(6) of the Social Security Act (42 U.S.C. 
1395cc(j)(6)), as inserted by section 6401(a) of Public Law 111-148 and 
as redesignated by section 1304 of Public Law 111-152, is amended--
        (1) in the paragraph heading, by striking ``past-due'' and 
    inserting ``medicare'';
        (2) in subparagraph (A), by striking ``past-due obligations 
    described in subparagraph (B)(ii) of an'' and inserting ``amount 
    described in subparagraph (B)(ii) due from such''; and
        (3) in subparagraph (B)(ii), by striking ``a past-due 
    obligation'' and inserting ``an amount that is more than the amount 
    required to be paid''.

                    TITLE II--PENSION FUNDING RELIEF
                   Subtitle A--Single Employer Plans

    SEC. 201. EXTENDED PERIOD FOR SINGLE-EMPLOYER DEFINED BENEFIT PLANS 
      TO AMORTIZE CERTAIN SHORTFALL AMORTIZATION BASES.
    (a) Amendments to ERISA.--
        (1) In general.--Paragraph (2) of section 303(c) of the 
    Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)) 
    is amended by adding at the end the following subparagraph:
            ``(D) Special election for eligible plan years.--
                ``(i) In general.--If a plan sponsor elects to apply 
            this subparagraph with respect to the shortfall 
            amortization base of a plan for any eligible plan year (in 
            this subparagraph and paragraph (7) referred to as an 
            `election year'), then, notwithstanding subparagraphs (A) 
            and (B)--

                    ``(I) the shortfall amortization installments with 
                respect to such base shall be determined under clause 
                (ii) or (iii), whichever is specified in the election, 
                and
                    ``(II) the shortfall amortization installment for 
                any plan year in the 9-plan-year period described in 
                clause (ii) or the 15-plan-year period described in 
                clause (iii), respectively, with respect to such 
                shortfall amortization base is the annual installment 
                determined under the applicable clause for that year 
                for that base.

                ``(ii) 2 plus 7 amortization schedule.--The shortfall 
            amortization installments determined under this clause 
            are--

                    ``(I) in the case of the first 2 plan years in the 
                9-plan-year period beginning with the election year, 
                interest on the shortfall amortization base of the plan 
                for the election year (determined using the effective 
                interest rate for the plan for the election year), and
                    ``(II) in the case of the last 7 plan years in such 
                9-plan-year period, the amounts necessary to amortize 
                the remaining balance of the shortfall amortization 
                base of the plan for the election year in level annual 
                installments over such last 7 plan years (using the 
                segment rates under subparagraph (C) for the election 
                year).

                ``(iii) 15-year amortization.--The shortfall 
            amortization installments determined under this 
            subparagraph are the amounts necessary to amortize the 
            shortfall amortization base of the plan for the election 
            year in level annual installments over the 15-plan-year 
            period beginning with the election year (using the segment 
            rates under subparagraph (C) for the election year).
                ``(iv) Election.--

                    ``(I) In general.--The plan sponsor of a plan may 
                elect to have this subparagraph apply to not more than 
                2 eligible plan years with respect to the plan, except 
                that in the case of a plan described in section 106 of 
                the Pension Protection Act of 2006, the plan sponsor 
                may only elect to have this subparagraph apply to a 
                plan year beginning in 2011.
                    ``(II) Amortization schedule.--Such election shall 
                specify whether the amortization schedule under clause 
                (ii) or (iii) shall apply to an election year, except 
                that if a plan sponsor elects to have this subparagraph 
                apply to 2 eligible plan years, the plan sponsor must 
                elect the same schedule for both years.
                    ``(III) Other rules.--Such election shall be made 
                at such time, and in such form and manner, as shall be 
                prescribed by the Secretary of the Treasury, and may be 
                revoked only with the consent of the Secretary of the 
                Treasury. The Secretary of the Treasury shall, before 
                granting a revocation request, provide the Pension 
                Benefit Guaranty Corporation an opportunity to comment 
                on the conditions applicable to the treatment of any 
                portion of the election year shortfall amortization 
                base that remains unamortized as of the revocation 
                date.

                ``(v) Eligible plan year.--For purposes of this 
            subparagraph, the term `eligible plan year' means any plan 
            year beginning in 2008, 2009, 2010, or 2011, except that a 
            plan year shall only be treated as an eligible plan year if 
            the due date under subsection (j)(1) for the payment of the 
            minimum required contribution for such plan year occurs on 
            or after the date of the enactment of this subparagraph.
                ``(vi) Reporting.--A plan sponsor of a plan who makes 
            an election under clause (i) shall--

                    ``(I) give notice of the election to participants 
                and beneficiaries of the plan, and
                    ``(II) inform the Pension Benefit Guaranty 
                Corporation of such election in such form and manner as 
                the Director of the Pension Benefit Guaranty 
                Corporation may prescribe.

                ``(vii) Increases in required installments in certain 
            cases.--For increases in required contributions in cases of 
            excess compensation or extraordinary dividends or stock 
            redemptions, see paragraph (7).''.
        (2) Increases in required installments in certain cases.--
    Section 303(c) of the Employee Retirement Income Security Act of 
    1974 (29 U.S.C. 1083(c)) is amended by adding at the end the 
    following paragraph:
        ``(7) Increases in alternate required installments in cases of 
    excess compensation or extraordinary dividends or stock 
    redemptions.--
            ``(A) In general.--If there is an installment acceleration 
        amount with respect to a plan for any plan year in the 
        restriction period with respect to an election year under 
        paragraph (2)(D), then the shortfall amortization installment 
        otherwise determined and payable under such paragraph for such 
        plan year shall, subject to the limitation under subparagraph 
        (B), be increased by such amount.
            ``(B) Total installments limited to shortfall base.--
        Subject to rules prescribed by the Secretary of the Treasury, 
        if a shortfall amortization installment with respect to any 
        shortfall amortization base for an election year is required to 
        be increased for any plan year under subparagraph (A)--
                ``(i) such increase shall not result in the amount of 
            such installment exceeding the present value of such 
            installment and all succeeding installments with respect to 
            such base (determined without regard to such increase but 
            after application of clause (ii)), and
                ``(ii) subsequent shortfall amortization installments 
            with respect to such base shall, in reverse order of the 
            otherwise required installments, be reduced to the extent 
            necessary to limit the present value of such subsequent 
            shortfall amortization installments (after application of 
            this paragraph) to the present value of the remaining 
            unamortized shortfall amortization base.
            ``(C) Installment acceleration amount.--For purposes of 
        this paragraph--
                ``(i) In general.--The term `installment acceleration 
            amount' means, with respect to any plan year in a 
            restriction period with respect to an election year, the 
            sum of--

                    ``(I) the aggregate amount of excess employee 
                compensation determined under subparagraph (D) with 
                respect to all employees for the plan year, plus
                    ``(II) the aggregate amount of extraordinary 
                dividends and redemptions determined under subparagraph 
                (E) for the plan year.

                ``(ii) Annual limitation.--The installment acceleration 
            amount for any plan year shall not exceed the excess (if 
            any) of--

                    ``(I) the sum of the shortfall amortization 
                installments for the plan year and all preceding plan 
                years in the amortization period elected under 
                paragraph (2)(D) with respect to the shortfall 
                amortization base with respect to an election year, 
                determined without regard to paragraph (2)(D) and this 
                paragraph, over
                    ``(II) the sum of the shortfall amortization 
                installments for such plan year and all such preceding 
                plan years, determined after application of paragraph 
                (2)(D) (and in the case of any preceding plan year, 
                after application of this paragraph).

                ``(iii) Carryover of excess installment acceleration 
            amounts.--

                    ``(I) In general.--If the installment acceleration 
                amount for any plan year (determined without regard to 
                clause (ii)) exceeds the limitation under clause (ii), 
                then, subject to subclause (II), such excess shall be 
                treated as an installment acceleration amount with 
                respect to the succeeding plan year.
                    ``(II) Cap to apply.--If any amount treated as an 
                installment acceleration amount under subclause (I) or 
                this subclause with respect any succeeding plan year, 
                when added to other installment acceleration amounts 
                (determined without regard to clause (ii)) with respect 
                to the plan year, exceeds the limitation under clause 
                (ii), the portion of such amount representing such 
                excess shall be treated as an installment acceleration 
                amount with respect to the next succeeding plan year.
                    ``(III) Limitation on years to which amounts 
                carried for.--No amount shall be carried under 
                subclause (I) or (II) to a plan year which begins after 
                the first plan year following the last plan year in the 
                restriction period (or after the second plan year 
                following such last plan year in the case of an 
                election year with respect to which 15-year 
                amortization was elected under paragraph (2)(D)).
                    ``(IV) Ordering rules.--For purposes of applying 
                subclause (II), installment acceleration amounts for 
                the plan year (determined without regard to any 
                carryover under this clause) shall be applied first 
                against the limitation under clause (ii) and then 
                carryovers to such plan year shall be applied against 
                such limitation on a first-in, first-out basis.

            ``(D) Excess employee compensation.--For purposes of this 
        paragraph--
                ``(i) In general.--The term `excess employee 
            compensation' means, with respect to any employee for any 
            plan year, the excess (if any) of--

                    ``(I) the aggregate amount includible in income 
                under chapter 1 of the Internal Revenue Code of 1986 
                for remuneration during the calendar year in which such 
                plan year begins for services performed by the employee 
                for the plan sponsor (whether or not performed during 
                such calendar year), over
                    ``(II) $1,000,000.

                ``(ii) Amounts set aside for nonqualified deferred 
            compensation.--If during any calendar year assets are set 
            aside or reserved (directly or indirectly) in a trust (or 
            other arrangement as determined by the Secretary of the 
            Treasury), or transferred to such a trust or other 
            arrangement, by a plan sponsor for purposes of paying 
            deferred compensation of an employee under a nonqualified 
            deferred compensation plan (as defined in section 409A of 
            such Code) of the plan sponsor, then, for purposes of 
            clause (i), the amount of such assets shall be treated as 
            remuneration of the employee includible in income for the 
            calendar year unless such amount is otherwise includible in 
            income for such year. An amount to which the preceding 
            sentence applies shall not be taken into account under this 
            paragraph for any subsequent calendar year.
                ``(iii) Only remuneration for certain post-2009 
            services counted.--Remuneration shall be taken into account 
            under clause (i) only to the extent attributable to 
            services performed by the employee for the plan sponsor 
            after February 28, 2010.
                ``(iv) Exception for certain equity payments.--

                    ``(I) In general.--There shall not be taken into 
                account under clause (i)(I) any amount includible in 
                income with respect to the granting after February 28, 
                2010, of service recipient stock (within the meaning of 
                section 409A of the Internal Revenue Code of 1986) 
                that, upon such grant, is subject to a substantial risk 
                of forfeiture (as defined under section 83(c)(1) of 
                such Code) for at least 5 years from the date of such 
                grant.
                    ``(II) Secretarial authority.--The Secretary of the 
                Treasury may by regulation provide for the application 
                of this clause in the case of a person other than a 
                corporation.

                ``(v) Other exceptions.--The following amounts 
            includible in income shall not be taken into account under 
            clause (i)(I):

                    ``(I) Commissions.--Any remuneration payable on a 
                commission basis solely on account of income directly 
                generated by the individual performance of the 
                individual to whom such remuneration is payable.
                    ``(II) Certain payments under existing contracts.--
                Any remuneration consisting of nonqualified deferred 
                compensation, restricted stock, stock options, or stock 
                appreciation rights payable or granted under a written 
                binding contract that was in effect on March 1, 2010, 
                and which was not modified in any material respect 
                before such remuneration is paid.

                ``(vi) Self-employed individual treated as employee.--
            The term `employee' includes, with respect to a calendar 
            year, a self-employed individual who is treated as an 
            employee under section 401(c) of such Code for the taxable 
            year ending during such calendar year, and the term 
            `compensation' shall include earned income of such 
            individual with respect to such self-employment.
                ``(vii) Indexing of amount.--In the case of any 
            calendar year beginning after 2010, the dollar amount under 
            clause (i)(II) shall be increased by an amount equal to--

                    ``(I) such dollar amount, multiplied by
                    ``(II) the cost-of-living adjustment determined 
                under section 1(f)(3) of such Code for the calendar 
                year, determined by substituting `calendar year 2009' 
                for `calendar year 1992' in subparagraph (B) thereof.

            If the amount of any increase under clause (i) is not a 
            multiple of $1,000, such increase shall be rounded to the 
            next lowest multiple of $1,000.
            ``(E) Extraordinary dividends and redemptions.--
                ``(i) In general.--The amount determined under this 
            subparagraph for any plan year is the excess (if any) of 
            the sum of the dividends declared during the plan year by 
            the plan sponsor plus the aggregate amount paid for the 
            redemption of stock of the plan sponsor redeemed during the 
            plan year over the greater of--

                    ``(I) the adjusted net income (within the meaning 
                of section 4043) of the plan sponsor for the preceding 
                plan year, determined without regard to any reduction 
                by reason of interest, taxes, depreciation, or 
                amortization, or
                    ``(II) in the case of a plan sponsor that 
                determined and declared dividends in the same manner 
                for at least 5 consecutive years immediately preceding 
                such plan year, the aggregate amount of dividends 
                determined and declared for such plan year using such 
                manner.

                ``(ii) Only certain post-2009 dividends and redemptions 
            counted.--For purposes of clause (i), there shall only be 
            taken into account dividends declared, and redemptions 
            occurring, after February 28, 2010.
                ``(iii) Exception for intra-group dividends.--Dividends 
            paid by one member of a controlled group (as defined in 
            section 302(d)(3)) to another member of such group shall 
            not be taken into account under clause (i).
                ``(iv) Exception for certain redemptions.--Redemptions 
            that are made pursuant to a plan maintained with respect to 
            employees, or that are made on account of the death, 
            disability, or termination of employment of an employee or 
            shareholder, shall not be taken into account under clause 
            (i).
                ``(v) Exception for certain preferred stock.--

                    ``(I) In general.--Dividends and redemptions with 
                respect to applicable preferred stock shall not be 
                taken into account under clause (i) to the extent that 
                dividends accrue with respect to such stock at a 
                specified rate in all events and without regard to the 
                plan sponsor's income, and interest accrues on any 
                unpaid dividends with respect to such stock.
                    ``(II) Applicable preferred stock.--For purposes of 
                subclause (I), the term `applicable preferred stock' 
                means preferred stock which was issued before March 1, 
                2010 (or which was issued after such date and is held 
                by an employee benefit plan subject to the provisions 
                of this title).

            ``(F) Other definitions and rules.--For purposes of this 
        paragraph--
                ``(i) Plan sponsor.--The term ` plan sponsor' includes 
            any member of the plan sponsor's controlled group (as 
            defined in section 302(d)(3)).
                ``(ii) Restriction period.--The term `restriction 
            period' means, with respect to any election year--

                    ``(I) except as provided in subclause (II), the 3-
                year period beginning with the election year (or, if 
                later, the first plan year beginning after December 31, 
                2009), and
                    ``(II) if the plan sponsor elects 15-year 
                amortization for the shortfall amortization base for 
                the election year, the 5-year period beginning with the 
                election year (or, if later, the first plan year 
                beginning after December 31, 2009).

                ``(iii) Elections for multiple plans.--If a plan 
            sponsor makes elections under paragraph (2)(D) with respect 
            to 2 or more plans, the Secretary of the Treasury shall 
            provide rules for the application of this paragraph to such 
            plans, including rules for the ratable allocation of any 
            installment acceleration amount among such plans on the 
            basis of each plan's relative reduction in the plan's 
            shortfall amortization installment for the first plan year 
            in the amortization period described in subparagraph (A) 
            (determined without regard to this paragraph).
                ``(iv) Mergers and acquisitions.--The Secretary of the 
            Treasury shall prescribe rules for the application of 
            paragraph (2)(D) and this paragraph in any case where there 
            is a merger or acquisition involving a plan sponsor making 
            the election under paragraph (2)(D).''.
        (3) Conforming amendments.--Section 303 of such Act (29 U.S.C. 
    1083) is amended--
            (A) in subsection (c)(1), by striking ``the shortfall 
        amortization bases for such plan year and each of the 6 
        preceding plan years'' and inserting ``any shortfall 
        amortization base which has not been fully amortized under this 
        subsection'', and
            (B) in subsection (j)(3), by adding at the end the 
        following:
            ``(F) Quarterly contributions not to include certain 
        increased contributions.--Subparagraph (D) shall be applied 
        without regard to any increase under subsection (c)(7).''.
    (b) Amendments to Internal Revenue Code of 1986.--
        (1) In general.--Paragraph (2) of section 430(c) is amended by 
    adding at the end the following subparagraph:
            ``(D) Special election for eligible plan years.--
                ``(i) In general.--If a plan sponsor elects to apply 
            this subparagraph with respect to the shortfall 
            amortization base of a plan for any eligible plan year (in 
            this subparagraph and paragraph (7) referred to as an 
            `election year'), then, notwithstanding subparagraphs (A) 
            and (B)--

                    ``(I) the shortfall amortization installments with 
                respect to such base shall be determined under clause 
                (ii) or (iii), whichever is specified in the election, 
                and
                    ``(II) the shortfall amortization installment for 
                any plan year in the 9-plan-year period described in 
                clause (ii) or the 15-plan-year period described in 
                clause (iii), respectively, with respect to such 
                shortfall amortization base is the annual installment 
                determined under the applicable clause for that year 
                for that base.

                ``(ii) 2 plus 7 amortization schedule.--The shortfall 
            amortization installments determined under this clause 
            are--

                    ``(I) in the case of the first 2 plan years in the 
                9-plan-year period beginning with the election year, 
                interest on the shortfall amortization base of the plan 
                for the election year (determined using the effective 
                interest rate for the plan for the election year), and
                    ``(II) in the case of the last 7 plan years in such 
                9-plan-year period, the amounts necessary to amortize 
                the remaining balance of the shortfall amortization 
                base of the plan for the election year in level annual 
                installments over such last 7 plan years (using the 
                segment rates under subparagraph (C) for the election 
                year).

                ``(iii) 15-year amortization.--The shortfall 
            amortization installments determined under this 
            subparagraph are the amounts necessary to amortize the 
            shortfall amortization base of the plan for the election 
            year in level annual installments over the 15-plan-year 
            period beginning with the election year (using the segment 
            rates under subparagraph (C) for the election year).
                ``(iv) Election.--

                    ``(I) In general.--The plan sponsor of a plan may 
                elect to have this subparagraph apply to not more than 
                2 eligible plan years with respect to the plan, except 
                that in the case of a plan described in section 106 of 
                the Pension Protection Act of 2006, the plan sponsor 
                may only elect to have this subparagraph apply to a 
                plan year beginning in 2011.
                    ``(II) Amortization schedule.--Such election shall 
                specify whether the amortization schedule under clause 
                (ii) or (iii) shall apply to an election year, except 
                that if a plan sponsor elects to have this subparagraph 
                apply to 2 eligible plan years, the plan sponsor must 
                elect the same schedule for both years.
                    ``(III) Other rules.--Such election shall be made 
                at such time, and in such form and manner, as shall be 
                prescribed by the Secretary, and may be revoked only 
                with the consent of the Secretary. The Secretary shall, 
                before granting a revocation request, provide the 
                Pension Benefit Guaranty Corporation an opportunity to 
                comment on the conditions applicable to the treatment 
                of any portion of the election year shortfall 
                amortization base that remains unamortized as of the 
                revocation date.

                ``(v) Eligible plan year.--For purposes of this 
            subparagraph, the term `eligible plan year' means any plan 
            year beginning in 2008, 2009, 2010, or 2011, except that a 
            plan year shall only be treated as an eligible plan year if 
            the due date under subsection (j)(1) for the payment of the 
            minimum required contribution for such plan year occurs on 
            or after the date of the enactment of this subparagraph.
                ``(vi) Reporting.--A plan sponsor of a plan who makes 
            an election under clause (i) shall--

                    ``(I) give notice of the election to participants 
                and beneficiaries of the plan, and
                    ``(II) inform the Pension Benefit Guaranty 
                Corporation of such election in such form and manner as 
                the Director of the Pension Benefit Guaranty 
                Corporation may prescribe.

                ``(vii) Increases in required installments in certain 
            cases.--For increases in required contributions in cases of 
            excess compensation or extraordinary dividends or stock 
            redemptions, see paragraph (7).''.
        (2) Increases in required contributions if excess compensation 
    paid.--Section 430(c) is amended by adding at the end the following 
    paragraph:
        ``(7) Increases in alternate required installments in cases of 
    excess compensation or extraordinary dividends or stock 
    redemptions.--
            ``(A) In general.--If there is an installment acceleration 
        amount with respect to a plan for any plan year in the 
        restriction period with respect to an election year under 
        paragraph (2)(D), then the shortfall amortization installment 
        otherwise determined and payable under such paragraph for such 
        plan year shall, subject to the limitation under subparagraph 
        (B), be increased by such amount.
            ``(B) Total installments limited to shortfall base.--
        Subject to rules prescribed by the Secretary, if a shortfall 
        amortization installment with respect to any shortfall 
        amortization base for an election year is required to be 
        increased for any plan year under subparagraph (A)--
                ``(i) such increase shall not result in the amount of 
            such installment exceeding the present value of such 
            installment and all succeeding installments with respect to 
            such base (determined without regard to such increase but 
            after application of clause (ii)), and
                ``(ii) subsequent shortfall amortization installments 
            with respect to such base shall, in reverse order of the 
            otherwise required installments, be reduced to the extent 
            necessary to limit the present value of such subsequent 
            shortfall amortization installments (after application of 
            this paragraph) to the present value of the remaining 
            unamortized shortfall amortization base.
            ``(C) Installment acceleration amount.--For purposes of 
        this paragraph--
                ``(i) In general.--The term `installment acceleration 
            amount' means, with respect to any plan year in a 
            restriction period with respect to an election year, the 
            sum of--

                    ``(I) the aggregate amount of excess employee 
                compensation determined under subparagraph (D) with 
                respect to all employees for the plan year, plus
                    ``(II) the aggregate amount of extraordinary 
                dividends and redemptions determined under subparagraph 
                (E) for the plan year.

                ``(ii) Annual limitation.--The installment acceleration 
            amount for any plan year shall not exceed the excess (if 
            any) of--

                    ``(I) the sum of the shortfall amortization 
                installments for the plan year and all preceding plan 
                years in the amortization period elected under 
                paragraph (2)(D) with respect to the shortfall 
                amortization base with respect to an election year, 
                determined without regard to paragraph (2)(D) and this 
                paragraph, over
                    ``(II) the sum of the shortfall amortization 
                installments for such plan year and all such preceding 
                plan years, determined after application of paragraph 
                (2)(D) (and in the case of any preceding plan year, 
                after application of this paragraph).

                ``(iii) Carryover of excess installment acceleration 
            amounts.--

                    ``(I) In general.--If the installment acceleration 
                amount for any plan year (determined without regard to 
                clause (ii)) exceeds the limitation under clause (ii), 
                then, subject to subclause (II), such excess shall be 
                treated as an installment acceleration amount with 
                respect to the succeeding plan year.
                    ``(II) Cap to apply.--If any amount treated as an 
                installment acceleration amount under subclause (I) or 
                this subclause with respect any succeeding plan year, 
                when added to other installment acceleration amounts 
                (determined without regard to clause (ii)) with respect 
                to the plan year, exceeds the limitation under clause 
                (ii), the portion of such amount representing such 
                excess shall be treated as an installment acceleration 
                amount with respect to the next succeeding plan year.
                    ``(III) Limitation on years to which amounts 
                carried for.--No amount shall be carried under 
                subclause (I) or (II) to a plan year which begins after 
                the first plan year following the last plan year in the 
                restriction period (or after the second plan year 
                following such last plan year in the case of an 
                election year with respect to which 15-year 
                amortization was elected under paragraph (2)(D)).
                    ``(IV) Ordering rules.--For purposes of applying 
                subclause (II), installment acceleration amounts for 
                the plan year (determined without regard to any 
                carryover under this clause) shall be applied first 
                against the limitation under clause (ii) and then 
                carryovers to such plan year shall be applied against 
                such limitation on a first-in, first-out basis.

            ``(D) Excess employee compensation.--For purposes of this 
        paragraph--
                ``(i) In general.--The term `excess employee 
            compensation' means, with respect to any employee for any 
            plan year, the excess (if any) of--

                    ``(I) the aggregate amount includible in income 
                under this chapter for remuneration during the calendar 
                year in which such plan year begins for services 
                performed by the employee for the plan sponsor (whether 
                or not performed during such calendar year), over
                    ``(II) $1,000,000.

                ``(ii) Amounts set aside for nonqualified deferred 
            compensation.--If during any calendar year assets are set 
            aside or reserved (directly or indirectly) in a trust (or 
            other arrangement as determined by the Secretary), or 
            transferred to such a trust or other arrangement, by a plan 
            sponsor for purposes of paying deferred compensation of an 
            employee under a nonqualified deferred compensation plan 
            (as defined in section 409A) of the plan sponsor, then, for 
            purposes of clause (i), the amount of such assets shall be 
            treated as remuneration of the employee includible in 
            income for the calendar year unless such amount is 
            otherwise includible in income for such year. An amount to 
            which the preceding sentence applies shall not be taken 
            into account under this paragraph for any subsequent 
            calendar year.
                ``(iii) Only remuneration for certain post-2009 
            services counted.--Remuneration shall be taken into account 
            under clause (i) only to the extent attributable to 
            services performed by the employee for the plan sponsor 
            after February 28, 2010.
                ``(iv) Exception for certain equity payments.--

                    ``(I) In general.--There shall not be taken into 
                account under clause (i)(I) any amount includible in 
                income with respect to the granting after February 28, 
                2010, of service recipient stock (within the meaning of 
                section 409A) that, upon such grant, is subject to a 
                substantial risk of forfeiture (as defined under 
                section 83(c)(1)) for at least 5 years from the date of 
                such grant.
                    ``(II) Secretarial authority.--The Secretary may by 
                regulation provide for the application of this clause 
                in the case of a person other than a corporation.

                ``(v) Other exceptions.--The following amounts 
            includible in income shall not be taken into account under 
            clause (i)(I):

                    ``(I) Commissions.--Any remuneration payable on a 
                commission basis solely on account of income directly 
                generated by the individual performance of the 
                individual to whom such remuneration is payable.
                    ``(II) Certain payments under existing contracts.--
                Any remuneration consisting of nonqualified deferred 
                compensation, restricted stock, stock options, or stock 
                appreciation rights payable or granted under a written 
                binding contract that was in effect on March 1, 2010, 
                and which was not modified in any material respect 
                before such remuneration is paid.

                ``(vi) Self-employed individual treated as employee.--
            The term `employee' includes, with respect to a calendar 
            year, a self-employed individual who is treated as an 
            employee under section 401(c) for the taxable year ending 
            during such calendar year, and the term `compensation' 
            shall include earned income of such individual with respect 
            to such self-employment.
                ``(vii) Indexing of amount.--In the case of any 
            calendar year beginning after 2010, the dollar amount under 
            clause (i)(II) shall be increased by an amount equal to--

                    ``(I) such dollar amount, multiplied by
                    ``(II) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year, determined 
                by substituting `calendar year 2009' for `calendar year 
                1992' in subparagraph (B) thereof.

            If the amount of any increase under clause (i) is not a 
            multiple of $1,000, such increase shall be rounded to the 
            next lowest multiple of $1,000.
            ``(E) Extraordinary dividends and redemptions.--
                ``(i) In general.--The amount determined under this 
            subparagraph for any plan year is the excess (if any) of 
            the sum of the dividends declared during the plan year by 
            the plan sponsor plus the aggregate amount paid for the 
            redemption of stock of the plan sponsor redeemed during the 
            plan year over the greater of--

                    ``(I) the adjusted net income (within the meaning 
                of section 4043 of the Employee Retirement Income 
                Security Act of 1974) of the plan sponsor for the 
                preceding plan year, determined without regard to any 
                reduction by reason of interest, taxes, depreciation, 
                or amortization, or
                    ``(II) in the case of a plan sponsor that 
                determined and declared dividends in the same manner 
                for at least 5 consecutive years immediately preceding 
                such plan year, the aggregate amount of dividends 
                determined and declared for such plan year using such 
                manner.

                ``(ii) Only certain post-2009 dividends and redemptions 
            counted.--For purposes of clause (i), there shall only be 
            taken into account dividends declared, and redemptions 
            occurring, after February 28, 2010.
                ``(iii) Exception for intra-group dividends.--Dividends 
            paid by one member of a controlled group (as defined in 
            section 412(d)(3)) to another member of such group shall 
            not be taken into account under clause (i).
                ``(iv) Exception for certain redemptions.--Redemptions 
            that are made pursuant to a plan maintained with respect to 
            employees, or that are made on account of the death, 
            disability, or termination of employment of an employee or 
            shareholder, shall not be taken into account under clause 
            (i).
                ``(v) Exception for certain preferred stock.--

                    ``(I) In general.--Dividends and redemptions with 
                respect to applicable preferred stock shall not be 
                taken into account under clause (i) to the extent that 
                dividends accrue with respect to such stock at a 
                specified rate in all events and without regard to the 
                plan sponsor's income, and interest accrues on any 
                unpaid dividends with respect to such stock.
                    ``(II) Applicable preferred stock.--For purposes of 
                subclause (I), the term `applicable preferred stock' 
                means preferred stock which was issued before March 1, 
                2010 (or which was issued after such date and is held 
                by an employee benefit plan subject to the provisions 
                of title I of Employee Retirement Income Security Act 
                of 1974).

            ``(F) Other definitions and rules.--For purposes of this 
        paragraph--
                ``(i) Plan sponsor.--The term ` plan sponsor' includes 
            any member of the plan sponsor's controlled group (as 
            defined in section 412(d)(3)).
                ``(ii) Restriction period.--The term `restriction 
            period' means, with respect to any election year--

                    ``(I) except as provided in subclause (II), the 3-
                year period beginning with the election year (or, if 
                later, the first plan year beginning after December 31, 
                2009), and
                    ``(II) if the plan sponsor elects 15-year 
                amortization for the shortfall amortization base for 
                the election year, the 5-year period beginning with the 
                election year (or, if later, the first plan year 
                beginning after December 31, 2009).

                ``(iii) Elections for multiple plans.--If a plan 
            sponsor makes elections under paragraph (2)(D) with respect 
            to 2 or more plans, the Secretary shall provide rules for 
            the application of this paragraph to such plans, including 
            rules for the ratable allocation of any installment 
            acceleration amount among such plans on the basis of each 
            plan's relative reduction in the plan's shortfall 
            amortization installment for the first plan year in the 
            amortization period described in subparagraph (A) 
            (determined without regard to this paragraph).
                ``(iv) Mergers and acquisitions.--The Secretary shall 
            prescribe rules for the application of paragraph (2)(D) and 
            this paragraph in any case where there is a merger or 
            acquisition involving a plan sponsor making the election 
            under paragraph (2)(D).''.
        (3) Conforming amendments.--Section 430 is amended--
            (A) in subsection (c)(1), by striking ``the shortfall 
        amortization bases for such plan year and each of the 6 
        preceding plan years'' and inserting ``any shortfall 
        amortization base which has not been fully amortized under this 
        subsection'', and
            (B) in subsection (j)(3), by adding at the end the 
        following:
            ``(F) Quarterly contributions not to include certain 
        increased contributions.--Subparagraph (D) shall be applied 
        without regard to any increase under subsection (c)(7).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2007.
    SEC. 202. APPLICATION OF EXTENDED AMORTIZATION PERIOD TO PLANS 
      SUBJECT TO PRIOR LAW FUNDING RULES.
    (a) In General.--Title I of the Pension Protection Act of 2006 is 
amended by redesignating section 107 as section 108 and by inserting 
the following after section 106:
    ``SEC. 107. APPLICATION OF EXTENDED AMORTIZATION PERIODS TO PLANS 
      WITH DELAYED EFFECTIVE DATE.
    ``(a) In General.--If the plan sponsor of a plan to which section 
104, 105, or 106 of this Act applies elects to have this section apply 
for any eligible plan year (in this section referred to as an `election 
year'), section 302 of the Employee Retirement Income Security Act of 
1974 and section 412 of the Internal Revenue Code of 1986 (as in effect 
before the amendments made by this subtitle and subtitle B) shall apply 
to such year in the manner described in subsection (b) or (c), 
whichever is specified in the election. All references in this section 
to `such Act' or `such Code' shall be to such Act or such Code as in 
effect before the amendments made by this subtitle and subtitle B.
    ``(b) Application of 2 and 7 Rule.--In the case of an election year 
to which this subsection applies--
        ``(1) 2-year lookback for determining deficit reduction 
    contributions for certain plans.--For purposes of applying section 
    302(d)(9) of such Act and section 412(l)(9) of such Code, the 
    funded current liability percentage (as defined in subparagraph (C) 
    thereof) for such plan for such plan year shall be such funded 
    current liability percentage of such plan for the second plan year 
    preceding the first election year of such plan.
        ``(2) Calculation of deficit reduction contribution.--For 
    purposes of applying section 302(d) of such Act and section 412(l) 
    of such Code to a plan to which such sections apply (after taking 
    into account paragraph (1))--
            ``(A) in the case of the increased unfunded new liability 
        of the plan, the applicable percentage described in section 
        302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code 
        shall be the third segment rate described in sections 104(b), 
        105(b), and 106(b) of this Act, and
            ``(B) in the case of the excess of the unfunded new 
        liability over the increased unfunded new liability, such 
        applicable percentage shall be determined without regard to 
        this section.
    ``(c) Application of 15-year Amortization.--In the case of an 
election year to which this subsection applies, for purposes of 
applying section 302(d) of such Act and section 412(l) of such Code--
        ``(1) in the case of the increased unfunded new liability of 
    the plan, the applicable percentage described in section 
    302(d)(4)(C) of such Act and section 412(l)(4)(C) of such Code for 
    any pre-effective date plan year beginning with or after the first 
    election year shall be the ratio of--
            ``(A) the annual installments payable in each year if the 
        increased unfunded new liability for such plan year were 
        amortized over 15 years, using an interest rate equal to the 
        third segment rate described in sections 104(b), 105(b), and 
        106(b) of this Act, to
            ``(B) the increased unfunded new liability for such plan 
        year, and
        ``(2) in the case of the excess of the unfunded new liability 
    over the increased unfunded new liability, such applicable 
    percentage shall be determined without regard to this section.
    ``(d) Election.--
        ``(1) In general.--The plan sponsor of a plan may elect to have 
    this section apply to not more than 2 eligible plan years with 
    respect to the plan, except that in the case of a plan to which 
    section 106 of this Act applies, the plan sponsor may only elect to 
    have this section apply to 1 eligible plan year.
        ``(2) Amortization schedule.--Such election shall specify 
    whether the rules under subsection (b) or (c) shall apply to an 
    election year, except that if a plan sponsor elects to have this 
    section apply to 2 eligible plan years, the plan sponsor must elect 
    the same rule for both years.
        ``(3) Other rules.--Such election shall be made at such time, 
    and in such form and manner, as shall be prescribed by the 
    Secretary of the Treasury, and may be revoked only with the consent 
    of the Secretary of the Treasury.
    ``(e) Definitions.--For purposes of this section--
        ``(1) Eligible plan year.--For purposes of this subparagraph, 
    the term `eligible plan year' means any plan year beginning in 
    2008, 2009, 2010, or 2011, except that a plan year beginning in 
    2008 shall only be treated as an eligible plan year if the due date 
    for the payment of the minimum required contribution for such plan 
    year occurs on or after the date of the enactment of this clause.
        ``(2) Pre-effective date plan year.--The term `pre-effective 
    date plan year' means, with respect to a plan, any plan year prior 
    to the first year in which the amendments made by this subtitle and 
    subtitle B apply to the plan.
        ``(3) Increased unfunded new liability.--The term `increased 
    unfunded new liability' means, with respect to a year, the excess 
    (if any) of the unfunded new liability over the amount of unfunded 
    new liability determined as if the value of the plan's assets 
    determined under subsection 302(c)(2) of such Act and section 
    412(c)(2) of such Code equaled the product of the current liability 
    of the plan for the year multiplied by the funded current liability 
    percentage (as defined in section 302(d)(8)(B) of such Act and 
    412(l)(8)(B) of such Code) of the plan for the second plan year 
    preceding the first election year of such plan.
        ``(4) Other definitions.--The terms `unfunded new liability' 
    and `current liability' shall have the meanings set forth in 
    section 302(d) of such Act and section 412(l) of such Code.''.
    (b) Eligible Charity Plans.--Section 104 of the Pension Protection 
Act of 2006 is amended--
        (1) by striking ``eligible cooperative plan'' wherever it 
    appears in subsections (a) and (b) and inserting ``eligible 
    cooperative plan or an eligible charity plan'', and
        (2) by adding at the end the following new subsection:
    ``(d) Eligible Charity Plan Defined.--For purposes of this section, 
a plan shall be treated as an eligible charity plan for a plan year if 
the plan is maintained by more than one employer (determined without 
regard to section 414(c) of the Internal Revenue Code) and 100 percent 
of the employers are described in section 501(c)(3) of such Code.''.
    (c) Effective Date.--
        (1) In general.--The amendment made by subsection (a) shall 
    take effect as if included in the Pension Protection Act of 2006.
        (2) Eligible charity plan.--The amendments made by subsection 
    (b) shall apply to plan years beginning after December 31, 2007, 
    except that a plan sponsor may elect to apply such amendments to 
    plan years beginning after December 31, 2008. Any such election 
    shall be made at such time, and in such form and manner, as shall 
    be prescribed by the Secretary of the Treasury, and may be revoked 
    only with the consent of the Secretary of the Treasury.
    SEC. 203. LOOKBACK FOR CERTAIN BENEFIT RESTRICTIONS.
    (a) In General.--
        (1) Amendment to erisa.--Section 206(g)(9) of the Employee 
    Retirement Income Security Act of 1974 is amended by adding at the 
    end the following:
            ``(D) Special rule for certain years.--Solely for purposes 
        of any applicable provision--
                ``(i) In general.--For plan years beginning on or after 
            October 1, 2008, and before October 1, 2010, the adjusted 
            funding target attainment percentage of a plan shall be the 
            greater of--

                    ``(I) such percentage, as determined without regard 
                to this subparagraph, or
                    ``(II) the adjusted funding target attainment 
                percentage for such plan for the plan year beginning 
                after October 1, 2007, and before October 1, 2008, as 
                determined under rules prescribed by the Secretary of 
                the Treasury.

                ``(ii) Special rule.--In the case of a plan for which 
            the valuation date is not the first day of the plan year--

                    ``(I) clause (i) shall apply to plan years 
                beginning after December 31, 2007, and before January 
                1, 2010, and
                    ``(II) clause (i)(II) shall apply based on the last 
                plan year beginning before November 1, 2007, as 
                determined under rules prescribed by the Secretary of 
                the Treasury.

                ``(iii) Applicable provision.--For purposes of this 
            subparagraph, the term `applicable provision' means--

                    ``(I) paragraph (3), but only for purposes of 
                applying such paragraph to a payment which, as 
                determined under rules prescribed by the Secretary of 
                the Treasury, is a payment under a social security 
                leveling option which accelerates payments under the 
                plan before, and reduces payments after, a participant 
                starts receiving social security benefits in order to 
                provide substantially similar aggregate payments both 
                before and after such benefits are received, and
                    ``(II) paragraph (4).''.

        (2) Amendment to internal revenue code of 1986.--Section 436(j) 
    of the Internal Revenue Code of 1986 is amended by adding at the 
    end the following:
        ``(3) Special rule for certain years.--Solely for purposes of 
    any applicable provision--
            ``(A) In general.--For plan years beginning on or after 
        October 1, 2008, and before October 1, 2010, the adjusted 
        funding target attainment percentage of a plan shall be the 
        greater of--
                ``(i) such percentage, as determined without regard to 
            this paragraph, or
                ``(ii) the adjusted funding target attainment 
            percentage for such plan for the plan year beginning after 
            October 1, 2007, and before October 1, 2008, as determined 
            under rules prescribed by the Secretary.
            ``(B) Special rule.--In the case of a plan for which the 
        valuation date is not the first day of the plan year--
                ``(i) subparagraph (A) shall apply to plan years 
            beginning after December 31, 2007, and before January 1, 
            2010, and
                ``(ii) subparagraph (A)(ii) shall apply based on the 
            last plan year beginning before November 1, 2007, as 
            determined under rules prescribed by the Secretary.
            ``(C) Applicable provision.--For purposes of this 
        paragraph, the term `applicable provision' means--
                ``(i) subsection (d), but only for purposes of applying 
            such paragraph to a payment which, as determined under 
            rules prescribed by the Secretary, is a payment under a 
            social security leveling option which accelerates payments 
            under the plan before, and reduces payments after, a 
            participant starts receiving social security benefits in 
            order to provide substantially similar aggregate payments 
            both before and after such benefits are received, and
                ``(ii) subsection (e).''.
    (b) Interaction With Wrera Rule.--Section 203 of the Worker, 
Retiree, and Employer Recovery Act of 2008 shall apply to a plan for 
any plan year in lieu of the amendments made by this section applying 
to sections 206(g)(4) of the Employee Retirement Income Security Act of 
1974 and 436(e) of the Internal Revenue Code of 1986 only to the extent 
that such section produces a higher adjusted funding target attainment 
percentage for such plan for such year.
    (c) Effective Date.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall apply to plan years beginning 
    on or after October 1, 2008.
        (2) Special rule.--In the case of a plan for which the 
    valuation date is not the first day of the plan year, the 
    amendments made by this section shall apply to plan years beginning 
    after December 31, 2007.
    SEC. 204. LOOKBACK FOR CREDIT BALANCE RULE FOR PLANS MAINTAINED BY 
      CHARITIES.
    (a) Amendment to Erisa.--Paragraph (3) of section 303(f) of the 
Employee Retirement Income Security Act of 1974 is amended by adding 
the following at the end thereof:
            ``(D) Special rule for certain years of plans maintained by 
        charities.--
                ``(i) In general.--For purposes of applying 
            subparagraph (C) for plan years beginning after August 31, 
            2009, and before September 1, 2011, the ratio determined 
            under such subparagraph for the preceding plan year shall 
            be the greater of--

                    ``(I) such ratio, as determined without regard to 
                this subparagraph, or
                    ``(II) the ratio for such plan for the plan year 
                beginning after August 31, 2007, and before September 
                1, 2008, as determined under rules prescribed by the 
                Secretary of the Treasury.

                ``(ii) Special rule.--In the case of a plan for which 
            the valuation date is not the first day of the plan year--

                    ``(I) clause (i) shall apply to plan years 
                beginning after December 31, 2008, and before January 
                1, 2011, and
                    ``(II) clause (i)(II) shall apply based on the last 
                plan year beginning before September 1, 2007, as 
                determined under rules prescribed by the Secretary of 
                the Treasury.

                ``(iii) Limitation to charities.--This subparagraph 
            shall not apply to any plan unless such plan is maintained 
            exclusively by one or more organizations described in 
            section 501(c)(3) of the Internal Revenue Code of 1986.''.
    (b) Amendment to Internal Revenue Code of 1986.--Paragraph (3) of 
section 430(f) of the Internal Revenue Code of 1986 is amended by 
adding the following at the end thereof:
            ``(D) Special rule for certain years of plans maintained by 
        charities.--
                ``(i) In general.--For purposes of applying 
            subparagraph (C) for plan years beginning after August 31, 
            2009, and before September 1, 2011, the ratio determined 
            under such subparagraph for the preceding plan year of a 
            plan shall be the greater of--

                    ``(I) such ratio, as determined without regard to 
                this subsection, or
                    ``(II) the ratio for such plan for the plan year 
                beginning after August 31, 2007 and before September 1, 
                2008, as determined under rules prescribed by the 
                Secretary.

                ``(ii) Special rule.--In the case of a plan for which 
            the valuation date is not the first day of the plan year--

                    ``(I) clause (i) shall apply to plan years 
                beginning after December 31, 2007, and before January 
                1, 2010, and
                    ``(II) clause (i)(II) shall apply based on the last 
                plan year beginning before September 1, 2007, as 
                determined under rules prescribed by the Secretary.

                ``(iii) Limitation to charities.--This subparagraph 
            shall not apply to any plan unless such plan is maintained 
            exclusively by one or more organizations described in 
            section 501(c)(3).''.
    (c) Effective Date.--
        (1) In general.--Except as provided in paragraph (2), the 
    amendments made by this section shall apply to plan years beginning 
    after August 31, 2009.
        (2) Special rule.--In the case of a plan for which the 
    valuation date is not the first day of the plan year, the 
    amendments made by this section shall apply to plan years beginning 
    after December 31, 2008.

                    Subtitle B--Multiemployer Plans

    SEC. 211. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.
    (a) Adjustments.--
        (1) Amendment to erisa.--Section 304(b) of the Employee 
    Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is 
    amended by adding at the end the following new paragraph:
        ``(8) Special relief rules.--Notwithstanding any other 
    provision of this subsection--
            ``(A) Amortization of net investment losses.--
                ``(i) In general.--A multiemployer plan with respect to 
            which the solvency test under subparagraph (C) is met may 
            treat the portion of any experience loss or gain 
            attributable to net investment losses incurred in either or 
            both of the first two plan years ending after August 31, 
            2008, as an item separate from other experience losses, to 
            be amortized in equal annual installments (until fully 
            amortized) over the period --

                    ``(I) beginning with the plan year in which such 
                portion is first recognized in the actuarial value of 
                assets, and
                    ``(II) ending with the last plan year in the 30-
                plan year period beginning with the plan year in which 
                such net investment loss was incurred.

                ``(ii) Coordination with extensions.--If this 
            subparagraph applies for any plan year--

                    ``(I) no extension of the amortization period under 
                clause (i) shall be allowed under subsection (d), and
                    ``(II) if an extension was granted under subsection 
                (d) for any plan year before the election to have this 
                subparagraph apply to the plan year, such extension 
                shall not result in such amortization period exceeding 
                30 years.

                ``(iii) Net investment losses.--For purposes of this 
            subparagraph--

                    ``(I) In general.--Net investment losses shall be 
                determined in the manner prescribed by the Secretary of 
                the Treasury on the basis of the difference between 
                actual and expected returns (including any difference 
                attributable to any criminally fraudulent investment 
                arrangement).
                    ``(II) Criminally fraudulent investment 
                arrangements.--The determination as to whether an 
                arrangement is a criminally fraudulent investment 
                arrangement shall be made under rules substantially 
                similar to the rules prescribed by the Secretary of the 
                Treasury for purposes of section 165 of the Internal 
                Revenue Code of 1986.

            ``(B) Expanded smoothing period.--
                ``(i) In general.--A multiemployer plan with respect to 
            which the solvency test under subparagraph (C) is met may 
            change its asset valuation method in a manner which--

                    ``(I) spreads the difference between expected and 
                actual returns for either or both of the first 2 plan 
                years ending after August 31, 2008, over a period of 
                not more than 10 years,
                    ``(II) provides that for either or both of the 
                first 2 plan years beginning after August 31, 2008, the 
                value of plan assets at any time shall not be less than 
                80 percent or greater than 130 percent of the fair 
                market value of such assets at such time, or
                    ``(III) makes both changes described in subclauses 
                (I) and (II) to such method.

                ``(ii) Asset valuation methods.--If this subparagraph 
            applies for any plan year--

                    ``(I) the Secretary of the Treasury shall not treat 
                the asset valuation method of the plan as unreasonable 
                solely because of the changes in such method described 
                in clause (i), and
                    ``(II) such changes shall be deemed approved by 
                such Secretary under section 302(d)(1) and section 
                412(d)(1) of such Code.

                ``(iii) Amortization of reduction in unfunded accrued 
            liability.--If this subparagraph and subparagraph (A) both 
            apply for any plan year, the plan shall treat any reduction 
            in unfunded accrued liability resulting from the 
            application of this subparagraph as a separate experience 
            amortization base, to be amortized in equal annual 
            installments (until fully amortized) over a period of 30 
            plan years rather than the period such liability would 
            otherwise be amortized over.
            ``(C) Solvency test.--The solvency test under this 
        paragraph is met only if the plan actuary certifies that the 
        plan is projected to have sufficient assets to timely pay 
        expected benefits and anticipated expenditures over the 
        amortization period, taking into account the changes in the 
        funding standard account under this paragraph.
            ``(D) Restriction on benefit increases.--If subparagraph 
        (A) or (B) apply to a multiemployer plan for any plan year, 
        then, in addition to any other applicable restrictions on 
        benefit increases, a plan amendment increasing benefits may not 
        go into effect during either of the 2 plan years immediately 
        following such plan year unless--
                ``(i) the plan actuary certifies that--

                    ``(I) any such increase is paid for out of 
                additional contributions not allocated to the plan 
                immediately before the application of this paragraph to 
                the plan, and
                    ``(II) the plan's funded percentage and projected 
                credit balances for such 2 plan years are reasonably 
                expected to be at least as high as such percentage and 
                balances would have been if the benefit increase had 
                not been adopted, or

                ``(ii) the amendment is required as a condition of 
            qualification under part I of subchapter D of chapter 1 of 
            the Internal Revenue Code of 1986 or to comply with other 
            applicable law.
            ``(E) Reporting.--A plan sponsor of a plan to which this 
        paragraph applies shall--
                ``(i) give notice of such application to participants 
            and beneficiaries of the plan, and
                ``(ii) inform the Pension Benefit Guaranty Corporation 
            of such application in such form and manner as the Director 
            of the Pension Benefit Guaranty Corporation may 
            prescribe.''.
        (2) Amendment to internal revenue code of 1986.--Section 431(b) 
    is amended by adding at the end the following new paragraph:
        ``(8) Special relief rules.--Notwithstanding any other 
    provision of this subsection--
            ``(A) Amortization of net investment losses.--
                ``(i) In general.--A multiemployer plan with respect to 
            which the solvency test under subparagraph (C) is met may 
            treat the portion of any experience loss or gain 
            attributable to net investment losses incurred in either or 
            both of the first two plan years ending after August 31, 
            2008, as an item separate from other experience losses, to 
            be amortized in equal annual installments (until fully 
            amortized) over the period --

                    ``(I) beginning with the plan year in which such 
                portion is first recognized in the actuarial value of 
                assets, and
                    ``(II) ending with the last plan year in the 30-
                plan year period beginning with the plan year in which 
                such net investment loss was incurred.

                ``(ii) Coordination with extensions.--If this 
            subparagraph applies for any plan year--

                    ``(I) no extension of the amortization period under 
                clause (i) shall be allowed under subsection (d), and
                    ``(II) if an extension was granted under subsection 
                (d) for any plan year before the election to have this 
                subparagraph apply to the plan year, such extension 
                shall not result in such amortization period exceeding 
                30 years.

                ``(iii) Net investment losses.--For purposes of this 
            subparagraph--

                    ``(I) In general.--Net investment losses shall be 
                determined in the manner prescribed by the Secretary on 
                the basis of the difference between actual and expected 
                returns (including any difference attributable to any 
                criminally fraudulent investment arrangement).
                    ``(II) Criminally fraudulent investment 
                arrangements.--The determination as to whether an 
                arrangement is a criminally fraudulent investment 
                arrangement shall be made under rules substantially 
                similar to the rules prescribed by the Secretary for 
                purposes of section 165.

            ``(B) Expanded smoothing period.--
                ``(i) In general.--A multiemployer plan with respect to 
            which the solvency test under subparagraph (C) is met may 
            change its asset valuation method in a manner which--

                    ``(I) spreads the difference between expected and 
                actual returns for either or both of the first 2 plan 
                years ending after August 31, 2008, over a period of 
                not more than 10 years,
                    ``(II) provides that for either or both of the 
                first 2 plan years beginning after August 31, 2008, the 
                value of plan assets at any time shall not be less than 
                80 percent or greater than 130 percent of the fair 
                market value of such assets at such time, or
                    ``(III) makes both changes described in subclauses 
                (I) and (II) to such method.

                ``(ii) Asset valuation methods.--If this subparagraph 
            applies for any plan year--

                    ``(I) the Secretary shall not treat the asset 
                valuation method of the plan as unreasonable solely 
                because of the changes in such method described in 
                clause (i), and
                    ``(II) such changes shall be deemed approved by the 
                Secretary under section 302(d)(1) of the Employee 
                Retirement Income Security Act of 1974 and section 
                412(d)(1).

                ``(iii) Amortization of reduction in unfunded accrued 
            liability.--If this subparagraph and subparagraph (A) both 
            apply for any plan year, the plan shall treat any reduction 
            in unfunded accrued liability resulting from the 
            application of this subparagraph as a separate experience 
            amortization base, to be amortized in equal annual 
            installments (until fully amortized) over a period of 30 
            plan years rather than the period such liability would 
            otherwise be amortized over.
            ``(C) Solvency test.--The solvency test under this 
        paragraph is met only if the plan actuary certifies that the 
        plan is projected to have sufficient assets to timely pay 
        expected benefits and anticipated expenditures over the 
        amortization period, taking into account the changes in the 
        funding standard account under this paragraph.
            ``(D) Restriction on benefit increases.--If subparagraph 
        (A) or (B) apply to a multiemployer plan for any plan year, 
        then, in addition to any other applicable restrictions on 
        benefit increases, a plan amendment increasing benefits may not 
        go into effect during either of the 2 plan years immediately 
        following such plan year unless--
                ``(i) the plan actuary certifies that--

                    ``(I) any such increase is paid for out of 
                additional contributions not allocated to the plan 
                immediately before the application of this paragraph to 
                the plan, and
                    ``(II) the plan's funded percentage and projected 
                credit balances for such 2 plan years are reasonably 
                expected to be at least as high as such percentage and 
                balances would have been if the benefit increase had 
                not been adopted, or

                ``(ii) the amendment is required as a condition of 
            qualification under part I of subchapter D or to comply 
            with other applicable law.
            ``(E) Reporting.--A plan sponsor of a plan to which this 
        paragraph applies shall--
                ``(i) give notice of such application to participants 
            and beneficiaries of the plan, and
                ``(ii) inform the Pension Benefit Guaranty Corporation 
            of such application in such form and manner as the Director 
            of the Pension Benefit Guaranty Corporation may 
            prescribe.''.
    (b) Effective Dates.--
        (1) In general.--The amendments made by this section shall take 
    effect as of the first day of the first plan year ending after 
    August 31, 2008, except that any election a plan makes pursuant to 
    this section that affects the plan's funding standard account for 
    the first plan year beginning after August 31, 2008, shall be 
    disregarded for purposes of applying the provisions of section 305 
    of the Employee Retirement Income Security Act of 1974 and section 
    432 of the Internal Revenue Code of 1986 to such plan year.
        (2) Restrictions on benefit increases.--Notwithstanding 
    paragraph (1), the restrictions on plan amendments increasing 
    benefits in sections 304(b)(8)(D) of such Act and 431(b)(8)(D) of 
    such Code, as added by this section, shall take effect on the date 
    of enactment of this Act.

                    TITLE III--BUDGETARY PROVISIONS

    SEC. 301. BUDGETARY PROVISIONS.
    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the Senate Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.
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