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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 36 Introduced in House (IH)]

104th CONGRESS
  1st Session
                                 H. R. 36

   To amend the Employee Retirement Income Security Act of 1974 and 
related provisions to improve pension plan funding, to limit growth in 
  insurance exposure, to protect the single-employer plan termination 
  insurance program by clarifying the status of claims of the Pension 
  Benefit Guaranty Corporation and the treatment of insolvent pension 
                     plans, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 1995

  Mr. Fawell introduced the following bill; which was referred to the 
Committee on Economic and Education Opportunities and, in addition, to 
    the Committee on the Judiciary, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
   To amend the Employee Retirement Income Security Act of 1974 and 
related provisions to improve pension plan funding, to limit growth in 
  insurance exposure, to protect the single-employer plan termination 
  insurance program by clarifying the status of claims of the Pension 
  Benefit Guaranty Corporation and the treatment of insolvent pension 
                     plans, 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 AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Pension Security 
Act of 1995''.
    (b) Table of Contents.--
Sec. 1. Short title and table of contents.
Sec. 2. Amendment of ERISA.
        TITLE I--AMENDMENTS TO PENSION PLAN FUNDING REQUIREMENTS

Sec. 101. Revision of additional funding requirements for plans that 
                            are not multiemployer plans.
Sec. 102. Effective dates.
               TITLE II--AMENDMENTS TO TITLE IV OF ERISA

Sec. 201. Limitation on benefits guaranteed.
Sec. 202. Enforcement of minimum funding requirements.
Sec. 203. Recovery ratio payable under Corporation's guaranty.
Sec. 204. Elimination of the seventh revolving fund.
Sec. 205. Distress termination criteria for banking institutions.
            TITLE III--EMPLOYER LIABILITY, LIEN AND PRIORITY

 Subtitle A--Amendments to the Employee Retirement Income Security Act 
                                of 1974

Sec. 301. Employer liability lien and priority amount.
Sec. 302. Clarification of priorities in conformity with the Employee 
                            Retirement Income Security Act of 1974.
Sec. 303. Liability upon liquidation of contributing sponsor where plan 
                            remains ongoing.

SEC. 2. AMENDMENT OF ERISA.

    The sections of the Employee Retirement Income Security Act of 1974 
which are amended by the subsequent provisions of this Act are amended 
so as to read as such sections would read if the Uruguay Round 
Agreements Act had not been enacted. References to such sections in the 
subsequent provisions of this Act shall be deemed references to such 
sections as amended by this section. This section shall be effective as 
if included in the Uruguay Round Agreements Act.

        TITLE I--AMENDMENTS TO PENSION PLAN FUNDING REQUIREMENTS

SEC. 101. REVISION OF ADDITIONAL FUNDING REQUIREMENTS FOR PLANS THAT 
              ARE NOT MULTIEMPLOYER PLANS.

    (a) Accumulated Funding Deficiency.--Section 302(a)(2) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1082(a)(2)) 
is amended--
            (1) by striking ``the excess of the total charges to the 
        funding standard account'' through the end of that sentence, 
        and inserting ``the largest of--''; and
            (2) by adding at the end the following:
                    ``(A) the lesser of--
                            ``(i) the excess of the total charges to 
                        the funding standard account for all plan years 
                        (beginning with the first plan year to which 
                        this section applies) over the total credits to 
                        such account for such years, or,
                            ``(ii) the excess of the total charges to 
                        the alternative minimum funding standard 
                        account for such plan years over the total 
                        credits to such account for such years; or,
                    ``(B) if applicable, the underfunding reduction 
                requirement under subsection (d), or,
                    ``(C) if applicable, the solvency maintenance 
                requirement under subsection (g).''
    (b) Underfunding Reduction Requirement.--Section 302(d) of such Act 
(29 U.S.C. 1082(d)) is amended to read as follows:
    ``(d) Underfunding Reduction Requirement for Plans That are not 
Multiemployer Plans.--
            ``(1) Underfunding reduction requirement.--In the case of a 
        defined benefit plan (other than a multiemployer plan) that has 
        an initial funding ratio of less than 100 percent for any plan 
        year, the underfunding reduction requirement for such plan year 
        is the sum of:
                    ``(A) an amount equal to the product of--
                            ``(i) the initial unfunded liability of the 
                        plan multiplied by
                            ``(ii) 30 percent, reduced by the product 
                        of--
                                    ``(I) .25 multiplied by
                                    ``(II) the excess (if any) of the 
                                initial funding ratio of the plan over 
                                35 percent;
                    ``(B) the charges to the funding standard account 
                for normal cost under subparagraph (b)(2)(A) and for 
                the amounts necessary to amortize any waived funding 
                deficiencies under subparagraph (b)(2)(C);
                    ``(C) the excess (if any) of--
                            ``(i) the sum of charges to the funding 
                        standard account for plans years beginning 
                        after December 31, 1998, for net experience 
                        losses under clause (b)(2)(B)(iv) and net 
                        losses resulting from changes in actuarial 
                        assumptions under clause (b)(2)(B)(v) over--
                            ``(ii) the sum of credits to the funding 
                        standard account for plan years beginning after 
                        December 31, 1998--
                                    ``(I) for net experience gains 
                                under clause (b)(3)(B)(ii) and net 
                                gains resulting from changes in 
                                actuarial assumptions under clause 
                                (b)(3)(B)(iii); and
                                    ``(II) for amounts considered 
                                contributed by the employer under 
                                subparagraph (b)(3)(A) (to the extent 
                                they are necessary to avoid an 
                                accumulated funding deficiency under 
                                section 302(b)); and
                    ``(D) the net of--
                            ``(i) charges to the funding standard 
                        account for plan years beginning on or before 
                        December 31, 1998, for net experience losses 
                        under clause (b)(2)(B)(iv) and net losses 
                        resulting from changes in actuarial assumptions 
                        under clause (b)(2)(B)(v); and
                            ``(ii) the sum of credits to the funding 
                        standard account for plan years beginning on or 
                        before December 31, 1998--
                                    ``(I) for net experience gains 
                                under clause (b)(3)(B)(ii) and net 
                                gains resulting from changes in 
                                actuarial assumptions under clause 
                                (b)(3)(B)(iii); and
                                    ``(II) amounts considered 
                                contributed by the employer under 
                                subparagraph (b)(3)(A) (to the extent 
                                they are necessary to avoid an 
                                accumulated funding deficiency under 
                                section 302(b)).
            ``(2) Definitions.--For definitions relating to this 
        subsection, see subsection (g)(3).
            ``(3) Application to small plans.--For the application of 
        this subsection to small plans, see subsection (g)(4).''
    (c) Solvency Maintenance Requirement.--Section 302 of such Act is 
further amended--
            (1) by redesignating subsection (g) as (h) as subsections 
        (h) and (i), respectively; and
            (2) by inserting after subsection (f) the following new 
        subsection:
    ``(g) Solvency Maintenance Requirement for Plans That are not 
Multiemployer Plans.--
            ``(1) Solvency maintenance requirement.--In the case of a 
        defined benefit plan (other than a multiemployer plan) that has 
        an initial funding ratio of less than 100 percent for any plan 
        year, the solvency maintenance requirement for such plan year 
        is (subject to paragraph (2)) the sum of--
                    ``(A) the sum of:
                            ``(i) all disbursements from the plan for 
                        the plan year, and
                            ``(ii) an amount equal to the initial 
                        unfunded liability of the plan multiplied by 
                        the interest rate used by such plan (determined 
                        under subparagraph (b)(5)(A));
                    ``(B) the charges described in section 
                302(d)(1)(B);
                    ``(C) the amount described in section 302(d)(1)(C); 
                and
                    ``(D) the amount described in section 302(d)(1)(D).
            ``(2) Limitation on solvency maintenance requirement.--For 
        plan years commencing after December 31, 1998, the amount 
        required under paragraph (1) shall not exceed the sum of--
                    ``(A) the amount required under section 302(d); and
                    ``(B) the product desired by multiplying--
                            ``(i) the excess (if any) of--
                                    ``(I) the amount required under 
                                paragraph (1) over
                                    ``(II) the amount required under 
                                section 302(d); by--
                            ``(ii) the applicable percentage.
            ``(3) Applicable percentage.--For purposes of paragraph 
        (2)(B)(ii), the applicable percentage is:

              ``For plan years
                                                         The applicable
                commencing after:
                                                         percentage is:
                December 31, 1998....................      20 percent  
                December 31, 1999....................      40 percent  
                December 31, 2000....................      60 percent  
                December 31, 2001....................      80 percent  
                December 31, 2002....................    100 percent.  
            ``(4) Definitions.--For purposes of this subsection and 
        subsection (d)--
                    ``(A) Initial unfunded liability.--The term 
                `initial unfunded liability' means the excess (if any) 
                of the amount necessary to satisfy the initial 
                termination liability of the plan over the initial 
                value of assets of the plan.
                    ``(B) Initial funding ratio.--The term `initial 
                funding ratio' means the ratio of (i) the initial value 
                of assets of the plan to (ii) the amount necessary to 
                satisfy the initial termination liability of the plan.
                    ``(C) Initial termination liability.--The term 
                `initial termination liability' means all liabilities 
                with respect to employees and their beneficiaries under 
                the plan in the meaning of section 401(a)(2) of the 
                Internal Revenue Code of 1986 as of the first day of 
                the plan year.
                    ``(D) Initial value of assets.--The term `initial 
                value of assets' means the value of the assets of the 
                plan determined under section 302(c)(2) as of the first 
                day of the plan year.
                    ``(E) Disbursements from the plan.--
                            ``(i) In general.--The term `disbursements 
                        from the plan' means benefit payments, 
                        including purchases of annuities or payment of 
                        lump sums in satisfaction of liabilities, 
                        administrative expenditures or any other 
                        disbursements from the plan or its trust.
                            ``(ii) Special rule for purchases of 
                        annuities and payment of lump sums.--In 
                        determining the applicable amounts attributable 
                        to purchases of annuities or the payment of 
                        lump sums under clause (i), the actual purchase 
                        or lump sum amounts paid by the plan or trust 
                        shall be multiplied by the excess (if any) of 
                        one over the initial funding ratio of the plan.
            ``(5) Special rules for small plans.--
                    ``(A) Plans with 100 or fewer participants.--This 
                subsection and subsection (d) shall not apply to any 
                plan for any plan year if on each day during the 
                preceding plan year such plan had no more than 100 
                participants.
                    ``(B) Plans with more than 100 but not more than 
                150 participants.--In the case of a plan to which 
                subparagraph (A) does not apply and which on each day 
                during the preceding year had no more than 150 
                participants, the additional amounts required by the 
                underfunding reduction requirement under subsection (d) 
                or the solvency maintenance requirement under this 
                subsection shall be equal to the product of--
                            ``(i) the excess of such requirements 
                        (determined without regard to this 
                        subparagraph) over the funding deficiency (if 
                        any) under subsection 302(b), multiplied by;
                            ``(ii) 2 percent for the highest number of 
                        participants in excess of 100 on any such 
                        day.''
                    ``(C) Aggregation of plans.--For purposes of this 
                paragraph, all defined benefit plans maintained by the 
                same employer (or any member of such employer's 
                controlled group) shall be treated as 1 plan, but only 
                employees of such employer or member shall be taken 
                into account.''
    (d) Conforming Amendments.--
            (1) Section 302(b)(5)(B) of such Act (29 U.S.C. 
        1082(b)(5)(B)) is amended by striking ``and for purposes of 
        determining a plan's required contribution under section 
        302(d)'' and inserting ``under section 302(c)(7)(B)''.
            (2) Section 302(c)(7)(B) of such Act (29 U.S.C. 
        1082(c)(7)(B)) is amended by striking ``has the meaning given 
        such term by subsection 302(d)(7) (without regard to 
        subparagraph (D) thereof)'' and inserting ``means all 
        liabilities with respect to employees and their beneficiaries 
        under the plan within the meaning of applicable Federal law 
        determined by using the interest rate under section 
        302(b)(5)(B)''.
            (3) Section 307 of such Act (29 U.S.C. 1085b) is amended--
                    (A) by striking ``current liability'', ``funded 
                current liability percentage'', ``unfunded current 
                liability'', and ``302(d)'' each place they appear and 
                inserting ``initial termination liability'', ``initial 
                funding ratio'', ``initial unfunded liability'', and 
                ``302(g)'', respectively; and
                    (B) in subsection (f), by striking ``except'' and 
                all that follows and inserting ``except that in 
                computing initial unfunded liability there shall not be 
                taken into account an amount equal to the initial 
                unfunded liability of the plan as of the beginning of 
                the first plan year beginning after December 31, 1987 
(determined without regard to any plan amendment increasing liabilities 
adopted after October 16, 1987), reduced by an amount equal to the 
product of the amount necessary to amortize such pre-1988 initial 
unfunded liability in equal annual installments over a period of 18 
plan years (beginning with the first plan year beginning after December 
31, 1988) multiplied by the number of years (but not more than 18) 
beginning since December 31, 1988.''.

SEC. 102. EFFECTIVE DATES.

    The amendments made by this subtitle shall be effective for plan 
years beginning after December 31, 1998.

               TITLE II--AMENDMENTS TO TITLE IV OF ERISA

SEC. 201. LIMITATION ON BENEFITS GUARANTEED.

    (a) In General.--Section 4022(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1322(b)) is amended by adding after 
paragraph (7) the following new paragraph:
    ``(8)(A) Benefits under a new plan or any increase in benefits 
under a plan resulting from a plan amendment, which new plan or 
amendment was adopted or became effective after December 31, 1996, 
shall be disregarded, unless--
            ``(i) the plan was fully funded for vested benefits for the 
        plan year that the new plan or amendment was adopted or became 
        effective, whichever is later, or became fully funded for 
        vested benefits in a subsequent plan year; and
            ``(ii) the new plan or amendment was adopted or effective, 
        whichever is later, at least one year prior to the date of plan 
        termination.
    ``(B) For purposes of this paragraph, a plan is `fully funded for 
vested benefits' for any plan year if such plan has no unfunded vested 
benefits (within the meaning of section 4006(a)(3)(E)(iii)) as of the 
last day of such plan year.
    ``(C)(i) Except as provided in clause (ii), paragraph (7) and 
subparagraphs (B) and (C) of paragraph (5) shall not apply to benefits 
disregarded under subparagraph (A).
    ``(ii) This paragraph shall not apply, and paragraph (7) and 
subparagraphs (B) and (C) of paragraph (5) shall apply to any new plan 
or plan amendment resulting from a collective bargaining agreement or 
amendment thereto entered and ratified on or prior to December 31, 
1996.''.
    (b) No Guaranty for New Unpredictable Contingent Event Benefits.--
Subsection (b) of section 4022 of such Act (as amended by subsection 
(b) of this section) is further amended by adding at the end the 
following new paragraph:
    ``(9)(A) Notwithstanding paragraph (8), any unpredictable 
contingent event benefit (or any increase in such a benefit) created by 
any plan provision or amendment adopted or effective after December 31, 
1996, shall not be guaranteed.
    ``(B) For purposes of this section, an `unpredictable contingent 
event benefit' means any benefit contingent on an event other than--
            ``(i) age, service, compensation, death or disability, or
            ``(ii) an event which is reasonably and reliably 
        predictable (as determined under regulations prescribed by the 
        corporation).''.
    (c) Conforming Amendment.--Section 4022(b)(1) of such Act (29 
U.S.C. 1322(b)(1)) is amended by inserting ``, (8), or (9)'' after 
``paragraph (7)''.
    (d) Effective Date.--The amendments made by this section shall be 
effective on December 31, 1996.

SEC. 202. ENFORCEMENT OF MINIMUM FUNDING REQUIREMENTS.

    (a) In General.--Paragraph (1) of section 4003(e) of Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1303(e)(1)) is 
amended by inserting after ``title'' the following: ``and, in the case 
of a plan to which this title applies under section 4021, section 
302''.
    (b) Effective Date.--The amendments made by this section shall be 
effective for installments and other payments required under section 
302 of the Employee Retirement Income Security Act of 1974 due on or 
after the date of the enactment of this Act.

SEC. 203. RECOVERY RATIO PAYABLE UNDER CORPORATION'S GUARANTY.

    (a) In General.--Section 4022(c)(3)(B) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1322(c)(3)(B)) is amended--
            (1) by redesignating clauses (i) and (ii) as clauses (ii) 
        and (iii) respectively; and
            (2) by inserting before clause (ii) (as so redesignated) 
        the following new clause:
                    ``(i) the outstanding amount of benefit liabilities 
                does not exceed $20,000,000,''.
    (b) Terminations.--Clause (iii) of section 4022(c)(3)(B) of such 
Act (29 U.S.C. 1322(c)(3)(B)), as redesignated by subsection (a), is 
amended--
            (1) by inserting ``, or proceedings were instituted under 
        section 4042,'' after ``provided''; and
            (2) by striking ``in which occurs the date of the notice of 
        intent to terminate with respect to the plan termination''.
    (c) Conforming Amendments.--Clause (i) of section 9312(b)(3)(B) of 
the Pension Protection Act is amended--
            (1) by inserting ``, or proceedings were instituted under 
        section 4042,'' after ``provided''; and
            (2) by striking ``1990'' and inserting ``1994''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in section 9312(b)(3) of the Pension Protection 
Act (Public Law 100-203; 101 Stat. 1330-362).

SEC. 204. ELIMINATION OF THE SEVENTH REVOLVING FUND.

    (a) Transfer.--Effective September 30, 1997, all assets and 
liabilities of the fund described in section 4005(f)(1) of the Employee 
Retirement Income Security Act of 1974 (as in effect before the 
amendments made by this section) shall be transferred to the fund 
established pursuant to section 4005(a) of such Act with respect to 
basic benefits guaranteed under section 4022 of such Act.
    (b) Repeal.--Section 4005 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1305) is amended--
            (1) by striking subsection (f); and
            (2) by redesignating subsections (g) and (h) as subsections 
        (f) and (g), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to fiscal years beginning after September 30, 1997.

SEC. 205. DISTRESS TERMINATION CRITERIA FOR CERTAIN FINANCIAL 
              INSTITUTIONS.

    (a) In General.--Subclause (I) of section 4041(c)(2)(B)(i) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1341(c)(2)(B)(i)(I)) is amended by inserting ``Federal law or'' before 
``law of a State''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan terminations under section 4041 of the Employee Retirement 
Income Security Act of 1974 with respect to which notices of intent to 
terminate under section 4041(a)(2) of such Act are provided on or after 
the date of the enactment of this Act.

            TITLE III--EMPLOYER LIABILITY, LIEN AND PRIORITY

SEC. 301. EMPLOYER LIABILITY LIEN AND PRIORITY AMOUNT.

    (a) Revised Limitations on Lien and Tax Priority Amount.--Section 
4068(a) of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1368(a)) is amended--
            (1) by striking ``If any person liable to the corporation'' 
        and inserting ``(1) Subject to paragraphs (2) and (3), if any 
        person liable to the corporation'';
            (2) by striking ``section 4062'' and inserting ``section 
        4062(a)(1)'';
            (3) by striking the comma after ``belonging to such 
        person'' and inserting a period;
            (4) by striking ``except that such lien'' and inserting the 
        following:
            ``(2) In the case of plan terminations under section 4041 
        with respect to which notices of intent to terminate under 
        section 4041(a)(2) are provided before January 1, 1997, and 
        plan terminations with respect to which proceedings are 
        instituted by the corporation before January 1, 1997, the lien 
        established under paragraph (1)''; and
            (5) by adding at the end the following new paragraph:
            ``(3)(A) In the case of plan terminations under section 
        4041 with respect to which notices of intent to terminate under 
        section 4041(a)(2) are provided on or after January 1, 1997, 
        and plan terminations with respect to which proceedings are 
        instituted by the corporation on or after January 1, 1997, the 
        lien established under paragraph (1) may not be in an amount in 
        excess of the sum of--
                    ``(i) the amount of benefits attributable to the 
                occurrence of unpredictable contingent events valued as 
                of the date of plan termination arising at any time 
                during the 3 years preceding the date of plan 
                termination (to the extent not funded prior to plan 
                termination), plus
                    ``(ii) the greater of--
                            ``(I) 30 percent of the collective net 
                        worth of all persons described in section 
                        4062(a), or
                            ``(II) the currently applicable percentage 
                        of the excess of the amount of unfunded benefit 
                        liabilities under the plan as of the date of 
                        plan termination over the amount described in 
                        clause (i).
            ``(B) For purposes of this paragraph--
                    ``(i) the term `currently applicable percentage' 
                means--
                            ``(I) with respect to plan terminations 
                        initiated in calendar year 1997, 10 percent,
                            ``(II) with respect to plan terminations 
                        initiated in any calendar year after 1997 and 
                        before 2017, the percentage determined under 
                        this clause with respect to plan terminations 
                        initiated in the preceding calendar year, plus 
                        2 percent, and
                            ``(III) with respect to plan terminations 
                        initiated in calendar years after 2016, 50 
                        percent.
                    ``(ii) The term `amount of benefits attributable to 
                the occurrence of unpredictable contingent events' 
                means, with respect to any plan, the present value of 
                unpredictable contingent event benefits (within the 
                meaning of section 302(d)(7)(B)(ii)), determined as of 
                the termination date on the basis of assumptions 
                prescribed by the corporation for purposes of section 
                4044.
            ``(C) In applying subparagraph (A), the corporation may 
        disregard subclause (I) of clause (ii) thereof if the 
        corporation determines, in its sole discretion, that 
        disregarding such subclause (I) is cost-effective.''.
    (b) Conforming and Clarifying Amendments Relating to Amount 
Entitled to Priority Treatment in Cases of Insolvency.--Section 
4068(c)(2) of such Act (29 U.S.C. 1368(c)(2)) is amended by inserting 
``(A)'' after ``(2)'' and by adding at the end the following new 
subparagraph:
    ``(B) Subparagraph (A) shall apply--
            ``(i) in the case of terminations described in paragraph 
        (2) of subsection (a), only with respect to so much of the 
        liability as does not exceed the amount determined under such 
        paragraph (2), and
            ``(ii) in the case of terminations described in paragraph 
        (3) of subsection (a), only with respect to so much of the 
        liability as does not exceed the amount determined under such 
        paragraph (3).''.
    (c) Clarification of PBGC Claim.--Section 4068(c)(2) of such Act 
(29 U.S.C. 1368(c)(2)) is amended--
            (1) by striking ``the lien imposed under subsection (a)'' 
        and inserting ``the liability to the corporation under section 
        4062(a)(1), 4063, or 4064''; and
            (2) by inserting ``which is'' after ``tax'', and by 
        inserting ``and assigned priority'' after ``United States''.
    (d) Effective Dates.--
            (1) Section 4068(a)(2) of the Employee Retirement Income 
        Security Act of 1974 (as amended by subsection (a)) and section 
        4068(c)(2)(B)(i) of such Act (as amended by subsection (b)) 
        shall be effective with respect to plan terminations under 
        section 4041 of such Act with respect to which notices of 
        intent to terminate under section 4041(a)(2) of such Act are 
        provided before January 1, 1997, and plan terminations with 
        respect to which proceedings are instituted by the Pension 
        Benefit Guaranty Corporation under section 4042 of such Act 
        before January 1, 1997.
            (2) Section 4068(a)(3) of the Employee Retirement Income 
        Security Act of 1974 (as amended by subsection (a)) and section 
        4068(c)(2)(B)(ii) of such Act (as amended by subsection (b)) 
        shall be effective with respect to plan terminations under 
        section 4041 of such Act with respect to which notices of 
        intent to terminate under section 4041(a)(2) of such Act are 
        provided on or after January 1, 1997, and plan terminations 
        with respect to which proceedings are instituted by the Pension 
        Benefit Guaranty Corporation under section 4042 of such Act on 
        or after January 1, 1997.
            (3) The amendment made by subsection (a)(2) shall be 
        effective as if included in the enactment of section 11011(a) 
        of the Single-Employer Pension Plan Amendments Act of 1986 
        (Public Law 99-272; 100 Stat. 253).
            (4) The amendment made by subsection (c) shall be effective 
        as if included in the enactment of section 9312(b)(2)(B) of the 
        Pension Protection Act (Public Law 100-203, 101 Stat. 1330-
        361).

SEC. 302. CLARIFICATION OF PRIORITIES IN CONFORMITY WITH THE EMPLOYEE 
              RETIREMENT INCOME SECURITY ACT OF 1974.

    (a) Priority as Expenses Arising Before Commencement of Case.--
Paragraph (7) of section 507(a) of title 11 of the United States Code 
is amended--
            (1) in subparagraph (F), by striking ``or'' at the end;
            (2) in subparagraph (G), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding after subparagraph (G) the following:
                    ``(H) unpaid contributions (including interest) to 
                pension plans for plan years beginning after December 
                31, 1987, which are attributable to the period prior to 
                the date of the filing of the petition and treated as 
                taxes owing to the United States under section 
                412(n)(4)(C) of the Internal Revenue Code of 1986; or
                    ``(I) liability (including interest) arising under 
                section 4062(a)(1), 4063, or 4064 of the Employee 
                Retirement Income Security Act of 1974 to the extent it 
                is treated as a tax under section 4068(c)(2) of such 
                Act, if the date of pension plan termination is on or 
                prior to the date of the filing of the petition.
For purposes of subparagraph (I), the date of plan termination, the 
amount of the liability, and the extent to which the liability is 
treated as a tax shall be determined in accordance with the provisions 
of the Employee Retirement Income Security Act of 1974 and the 
regulations promulgated thereunder.''.
    (b) Priority as Administrative Expenses Arising After Commencement 
of Case.--Section 503(b) of such title 11 is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(7)(A) unpaid contributions (including interest) to 
        pension plans for plan years beginning after December 31, 1987, 
        which are attributable to the period beginning on the date of 
        the filing of the petition and treated as taxes owing to the 
        United States under section 412(n)(4)(C) of the Internal 
        Revenue Code of 1986; and
            ``(B) liability (including interest) arising under section 
        4062(a)(1), 4063, or 4064 of the Employee Retirement Income 
        Security Act of 1974 to the extent it is treated as a tax under 
        section 4068(c)(2) of such Act, if the date of pension plan 
        termination is after the date of the filing of the petition.
For purposes of paragraph (7)(B), the date of plan termination, the 
amount of the liability, and the extent to which the liability is 
treated as a tax shall be determined in accordance with the provisions 
of the Employee Retirement Income Security Act of 1974 and the 
regulations promulgated thereunder.''.
    (c) Notice Required Where Federally Insured Pension Plan Is 
Administered by the Debtor or Its Affiliate.--Rule 2002(j) of the 
Bankruptcy Rules (11 U.S.C. Appendix) is amended by inserting before 
the period at the end the following: ``; (5) to the Pension Benefit 
Guaranty Corporation in any case in which the debtor or an affiliate of 
the debtor maintains a pension plan to which title IV of the Employee 
Retirement Income Security Act of 1974 applies.''.
    (d) Effective Date.--Sections 507(a)(7)(H) and 503(b)(7)(A) of 
title 11 of the United States Code (as amended by this section) shall 
be effective as if included in section 9304(e) of the Pension 
Protection Act (Public Law 100-203; 101 Stat. 1330-348). Sections 
507(a)(7)(I) and 503(b)(7)(B) of such title (as amended by this 
section) shall be effective with respect to cases under such title 
which commence on or after the date of the enactment of this Act or 
cases under such title which are pending on the date of the enactment 
of this Act and in which claims for liability have not been resolved as 
of such date.

SEC. 303. LIABILITY UPON LIQUIDATION OF CONTRIBUTING SPONSOR WHERE PLAN 
              REMAINS ONGOING.

    (a) In General.--Section 4062 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1362) is amended by adding at the end 
the following new subsection:
    ``(f) Liability on Liquidation of Contributing Sponsor.--
            ``(1) In general.--In any case in which all or 
        substantially all of the assets of a person who is a 
        contributing sponsor of a single-employer plan are liquidated 
        in a case under title 11, United States Code, or under any 
        similar Federal law or law of a State or political subdivision 
        of a State, and in the course of such liquidation another 
        member of such person's controlled group remains a contributing 
        sponsor of the plan or is liable for payment of contributions 
        or installments under section 302(c)(11) of this Act, such 
        person shall be deemed liable under subsection (b) as if such 
        plan had terminated under section 4041(c) in the course of such 
        liquidation and as if the termination date were the date 
        determined by the corporation as the date on which the 
        liquidation was initiated.
            ``(2) Applicability of other provisions.--Any provision of 
        this Act or any other provision of law that applies to 
        liability under this section upon termination of a plan shall 
        apply in the same manner and to the same extent to the 
        liability established under this subsection. For purposes of 
        this paragraph, the date referred to in paragraph (1) shall be 
        deemed the date of plan termination.
            ``(3) Transfer of liability payments to the ongoing plan.--
        The corporation shall pay to the plan amounts collected by the 
        corporation in satisfaction of any liability established under 
        this subsection in connection with such plan.
            ``(4) Regulations.--The corporation may prescribe 
        regulations under this subsection. Such regulations may--
                    ``(A) prescribe rules governing--
                            ``(i) the basis upon which the plan will 
                        continue as an ongoing plan maintained by other 
                        members of the controlled group,
                            ``(ii) the determination of whether a 
                        liquidation referred to in this subsection has 
                        occurred, and
                            ``(iii) the assignment of the corporation's 
                        claim to liability payments under this 
                        subsection to other members of the controlled 
                        group as a means of collecting such payments, 
                        subject to the transfer of such payments to the 
                        plan, and
                    ``(B) provide alternative arrangements for making 
                liability payments under this subsection.''.
    (b) Conforming Amendment.--Section 4062(a)(1) of such Act (29 
U.S.C. 1362(a)(1)) is amended by striking ``subsection (b)'' and 
inserting ``subsections (b) and (f)''.
    (c) Effective Date.--The amendments made by this section shall be 
effective for liquidations initiated on or after the date of the 
enactment of this Act.
                                 <all>
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