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‘‘(B) so as to increase future benefit accru-
als, unless the plan actuary certifies in advance 
that, after taking into account the proposed in-
crease, the plan is reasonably expected to cease 
to be in critical status. 
‘‘(9) IMPLEMENTATION
OF
DEFAULT
SCHED-
ULE
UPON
FAILURE
TO
ADOPT
REHABILITATION 
PLAN.—If the plan is not amended by the end of the 
240-day period after entry into critical status to in-
clude a rehabilitation plan, the plan sponsor shall 
amend the plan to implement the schedule required 
by paragraph (5)(A)(ii). 
‘‘(10) DEEMED WITHDRAWAL.—Upon the fail-
ure of any employer who has an obligation to con-
tribute under the plan to make contributions in com-
pliance with the schedule adopted under paragraph 
(4) as part of the rehabilitation plan, the failure of 
the employer may, at the discretion of the plan spon-
sor, be treated as a withdrawal by the employer from 
the plan under section 4203 or a partial withdrawal 
by the employer under section 4205. 
‘‘(11) SPECIAL
RULE
FOR
PLAN
AMEND-
MENTS.—A multiemployer plan in critical status 
shall not fail to meet the requirements of section 
204(g) or section 411(d)(6) of the Internal Revenue
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Code of 1986 solely by reason of the adoption by the 
plan of an amendment necessary to meet the re-
quirements of this subsection. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) BARGAINING
PARTY.—The term ‘bar-
gaining party’ means, in connection with a multiem-
ployer plan— 
‘‘(A) an employer who has an obligation to 
contribute under the plan, and 
‘‘(B) an employee organization which, for 
purposes of collective bargaining, represents 
plan participants employed by such an em-
ployer. 
‘‘(2) FUNDED PERCENTAGE.—The term ‘fund-
ed percentage’ means the percentage expressed as a 
ratio of which— 
‘‘(A) the numerator of which is the value 
of the plan’s assets, as determined under sec-
tion 304(c)(2), and 
‘‘(B) the denominator of which is the ac-
crued liability of the plan. 
‘‘(3) ACCUMULATED
FUNDING
DEFICIENCY.— 
The term ‘accumulated funding deficiency’ has the 
meaning provided such term in section 304(a).
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‘‘(4) ACTIVE PARTICIPANT.—The term ‘active 
participant’ means, in connection with a multiem-
ployer plan, a participant who is in covered service 
under the plan. 
‘‘(5) INACTIVE PARTICIPANT.—The term ‘inac-
tive participant’ means, in connection with a multi-
employer plan, a participant who— 
‘‘(A) is not in covered service under the 
plan, and 
‘‘(B) is in pay status under the plan or has 
a nonforfeitable right to benefits under the 
plan. 
‘‘(6) PAY STATUS.—A person is in ‘pay status’ 
under a multiemployer plan if— 
‘‘(A) at any time during the current plan 
year, such person is a participant or beneficiary 
under the plan and is paid an early, late, nor-
mal, or disability retirement benefit under the 
plan (or a death benefit under the plan related 
to a retirement benefit), or 
‘‘(B) to the extent provided in regulations 
of the Secretary of the Treasury, such person 
is entitled to such a benefit under the plan.
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‘‘(7) OBLIGATION TO CONTRIBUTE.—The term 
‘obligation to contribute’ has the meaning provided 
such term under section 4212(a). 
‘‘(8) ENTRY INTO CRITICAL STATUS.—A plan 
shall be treated as entering into critical status as of 
the date that such plan is certified to be in critical 
status under subsection (a)(1), is presumed to be in 
critical status under subsection (a)(3), or enters into 
critical status under subsection (b)(7).’’. 
(b) ENFORCEMENT.—Section 502 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1132) 
is amended— 
(1) in subsection (a)(6) by striking ‘‘(6), or 
(7)’’ and inserting ‘‘(6), (7), or (8)’’; 
(2) by redesignating subsection (c)(8) as sub-
section (c)(9); and 
(3) by inserting after subsection (c)(7) the fol-
lowing new paragraph: 
‘‘(8) The Secretary may assess a civil penalty 
against— 
‘‘(A) any person of not more than $1,100 
per day for each violation by such person of 
subsection (a)(1), (b)(1), or (c)(1) of section 
305, or
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‘‘(B) any plan sponsor for failure by the 
plan sponsor to implement the terms of any 
funding improvement plan or rehabilitation plan 
adopted under section 305.’’. 
(c) CONFORMING AMENDMENT.—The table of con-
tents in section 1 of such Act (as amended by the pre-
ceding provisions of this Act) is amended further by in-
serting after the item relating to section 304 the following 
new item: 
‘‘Sec. 305. Additional funding rules for multiemployer plans in endangered sta-
tus or critical status.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan years begin-
ning after 2005. 
(e) SPECIAL RULE FOR 2006.—In the case of any 
plan year beginning in 2006, any reference in section 305 
of the Employee Retirement Income Security Act of 1974 
(as added by this section) to section 304 of such Act (as 
added by this Act) shall be treated as a reference to the 
corresponding provision of the Employee Retirement In-
come Security Act of 1974 as in effect for plan years be-
ginning in such year. 
SEC. 203. MEASURES TO FORESTALL INSOLVENCY OF MUL-
TIEMPLOYER PLANS. 
(a) ADVANCE DETERMINATION OF IMPENDING IN-
SOLVENCY OVER 5 YEARS.—Section 4245(d)(1) of the
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Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1426(d)(1)) is amended— 
(1) by striking ‘‘3 plan years’’ the second place 
it appears and inserting ‘‘5 plan years’’; and 
(2) by adding at the end the following new sen-
tence: ‘‘If the plan sponsor makes such a determina-
tion that the plan will be insolvent in any of the next 
5 plan years, the plan sponsor shall make the com-
parison under this paragraph at least annually until 
the plan sponsor makes a determination that the 
plan will not be insolvent in any of the next 5 plan 
years.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to determinations 
made in plan years beginning after December 31, 2005. 
SEC. 204. WITHDRAWAL LIABILITY REFORMS. 
(a) REPEAL OF LIMITATION ON WITHDRAWAL LI-
ABILITY IN THE EVENT OF CERTAIN SALES OF EM-
PLOYER ASSETS TO UNRELATED PARTIES.— 
(1) IN
GENERAL.—Section 4225 of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1405) is repealed. 
(2) CONFORMING AMENDMENT.—The table of 
contents in section 1 of such Act is amended by 
striking the item relating to section 4225.
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(3) EFFECTIVE DATE.—The amendments made 
by this section shall apply with respect to sales oc-
curring on or after January 1, 2006. 
(b) REPEAL OF LIMITATION TO 20 ANNUAL PAY-
MENTS.— 
(1) IN GENERAL.—Section 4219(c)(1) of such 
Act (29 U.S.C. 1399(c)(1)) is amended by striking 
subparagraph (B). 
(2) EFFECTIVE DATE.—The amendment made 
by this section shall apply with respect to with-
drawals occurring on or after January 1, 2006. 
(c) WITHDRAWAL LIABILITY CONTINUES IF WORK 
CONTRACTED OUT.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
4205(b)(2)(A) 
of 
such 
Act 
(29 
U.S.C. 
1385(b)(2)(A)) is amended by inserting ‘‘or to an-
other party or parties’’ after ‘‘to another location’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply with respect to work 
transferred on or after the date of the enactment of 
this Act. 
(d) REPEAL
OF SPECIAL RULE
FOR LONG
AND 
SHORT HAUL TRUCKING INDUSTRY.— 
(1) IN
GENERAL.—Subsection (d) of section 
4203 of such Act (29 U.S.C. 1383(d)) is repealed.
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(2) EFFECTIVE DATE.—The repeal under this 
subsection shall apply with respect to cessations to 
have obligations to contribute to multiemployer 
plans and cessations of covered operations under 
such plans occurring on or after January 1, 2006. 
(e) APPLICATION OF FORGIVENESS RULE TO PLANS 
PRIMARILY COVERING EMPLOYEES
IN
THE BUILDING 
AND CONSTRUCTION.— 
(1) IN GENERAL.—Section 4210(b) of such Act 
(29 U.S.C. 1390(b)) is amended— 
(A) by striking paragraph (1); and 
(B) 
by 
redesignating 
paragraphs 
(2) 
through (4) as paragraphs (1) through (3), re-
spectively. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to plan 
withdrawals occurring on or after January 1, 2006. 
SEC. 205. REMOVAL OF RESTRICTIONS WITH RESPECT TO 
PROCEDURES APPLICABLE TO DISPUTES IN-
VOLVING WITHDRAWAL LIABILITY. 
(a) IN GENERAL.—Section 4221(f)(1) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1401(f)(1)) is amended— 
(1) in subparagraph (A) by inserting ‘‘and’’ 
after ‘‘plan,’’, and
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(2) by striking subparagraphs (B) and (C) and 
inserting the following new subparagraph: 
‘‘(B) such determination is based in whole 
or in part on a finding by the plan sponsor 
under section 4212(c) that a principal purpose 
of any transaction which occurred at least 5 
years (2 years in the case of a small employer) 
before the date of the complete or partial with-
drawal was to evade or avoid withdrawal liabil-
ity under this subtitle,’’. 
(b) SMALL EMPLOYER.—Paragraph (2) of section 
4221(f) of such Act is amended by adding at the end the 
following new subparagraph: 
‘‘(C) SMALL EMPLOYER.—For purposes of 
paragraph (1)(B)— 
‘‘(i) IN GENERAL.—The term ‘small 
employer’ means any employer who (as of 
immediately before the transaction referred 
to in paragraph (1)(B))— 
‘‘(I) employs not more than 500 
employees, and 
‘‘(II) is required to make con-
tributions to the plan for not more 
than 250 employees.
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‘‘(ii) 
CONTROLLED
GROUP.—Any 
group treated as a single employer under 
subsection (b), (c), (m), or (o) of section 
414 of the Internal Revenue Code of 1986 
shall be treated as a single employer for 
purposes of this subparagraph.’’. 
(c) ADDITIONAL AMENDMENTS.— 
(1) Subparagraph (A) of section 4221(f)(2) of 
such Act (29 U.S.C. 1401(f)(2)) is amended by 
striking ‘‘Notwithstanding’’ and inserting ‘‘In the 
case of a transaction occurring before January 1, 
1999, and at least 5 years before the date of the 
complete or partial withdrawal, notwithstanding’’. 
(2) Section 4221(f)(2)(B) of such Act (29 
U.S.C. 1401(f)(2)(B)) is amended— 
(A) by inserting ‘‘with respect to with-
drawal liability payments’’ after ‘‘determina-
tion’’ the first place it appears, and 
(B) by striking ‘‘any’’ and inserting ‘‘the’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any employer that receives a 
notification under section 4219(b)(1) of the Employee Re-
tirement Income Security Act of 1974 on or after the date 
of the enactment of this Act.
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Subtitle B—Amendments to 
Internal Revenue Code of 1986 
SEC. 211. FUNDING RULES FOR MULTIEMPLOYER DEFINED 
BENEFIT PLANS. 
(a) IN GENERAL.—Subpart A of part III of sub-
chapter D of chapter 1 of the Internal Revenue Code of 
1986 (added by section 112 of this Act) is amended by 
adding at the end the following new section: 
‘‘SEC. 431. MINIMUM FUNDING STANDARDS FOR MULTIEM-
PLOYER PLANS. 
‘‘(a) IN GENERAL.—For purposes of section 412, the 
accumulated funding deficiency of a multiemployer plan 
for any plan year is— 
‘‘(1) except as provided in paragraph (2), the 
amount, determined as of the end of the plan year, 
equal to the excess (if any) of the total charges to 
the funding standard account of the plan for all plan 
years (beginning with the first plan year for which 
section 412 applies to the plan) over the total credits 
to such account for such years, and 
‘‘(2) if the multiemployer plan is in reorganiza-
tion for any plan year, the accumulated funding de-
ficiency of the plan determined under section 418B. 
‘‘(b) FUNDING STANDARD ACCOUNT.—
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‘‘(1) ACCOUNT
REQUIRED.—Each multiem-
ployer plan to which section 412 applies shall estab-
lish and maintain a funding standard account. Such 
account shall be credited and charged solely as pro-
vided in this section. 
‘‘(2) CHARGES TO ACCOUNT.—For a plan year, 
the funding standard account shall be charged with 
the sum of— 
‘‘(A) the normal cost of the plan for the 
plan year, 
‘‘(B) the amounts necessary to amortize in 
equal annual installments (until fully amor-
tized)— 
‘‘(i) in the case of a plan in existence 
on January 1, 1974, the unfunded past 
service liability under the plan on the first 
day of the first plan year to which section 
412 applies, over a period of 40 plan years, 
‘‘(ii) in the case of a plan which comes 
into existence after January 1, 1974, the 
unfunded past service liability under the 
plan on the first day of the first plan year 
to which section 412 applies, over a period 
of 15 plan years,