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of the assets and income described in subpara-
graph (A) (in the case of a qualified transfer
other than a collectively bargained transfer) or
subparagraph (B) (in the case of a collectively
bargained transfer).’’.
(2) CONFORMING AMENDMENTS.—
(A) Subparagraph (A) of section 420(c)(3)
of such Code is amended to read as follows:
‘‘(A) IN
GENERAL.—The requirements of
this paragraph are met if—
‘‘(i) except as provided in clause (ii),
each group health plan or arrangement
under which applicable health benefits are
provided provides that the applicable em-
ployer cost for each taxable year during the
cost maintenance period shall not be less
than the higher of the applicable employer
costs for each of the 2 taxable years imme-
diately preceding the taxable year of the
qualified transfer, and
‘‘(ii) in the case of a collectively bar-
gained transfer, each collectively bargained
group health plan under which collectively
bargained health benefits are provided pro-
vides that the collectively bargained em-
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HR 2830 EAS
ployer cost for each taxable year during the
collectively bargained cost maintenance pe-
riod shall not be less than the amount speci-
fied by the collective bargaining agree-
ment.’’.
(B) Section 420(c)(3) of such Code is
amended by redesignating subparagraphs (C),
(D), and (E) as subparagraphs (D), (E), and
(F), respectively, and by inserting after subpara-
graph (B) the following new subparagraph:
‘‘(C) COLLECTIVELY BARGAINED EMPLOYER
COST.—For purposes of this paragraph, the term
‘collectively bargained employer cost’ means the
average cost per covered individual of providing
collectively bargained retiree health benefits as
determined in accordance with the applicable
collective bargaining agreement. Such agreement
may provide for an appropriate reduction in the
collectively bargained employer cost to take into
account any portion of the collectively bargained
retiree health benefits that is provided or fi-
nanced by a government program or other
source.’’.
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HR 2830 EAS
(C) Subparagraph (E) of section 420(c)(3)
of such Code (as redesignated by subparagraph
(B)) is amended to read as follows:
‘‘(E) MAINTENANCE PERIOD.—For purposes
of this paragraph—
‘‘(i) COST MAINTENANCE PERIOD.—The
term ‘cost maintenance period’ means the
period of 5 taxable years beginning with the
taxable year in which the qualified transfer
occurs. If a taxable year is in 2 or more
overlapping cost maintenance periods, this
paragraph shall be applied by taking into
account the highest applicable employer cost
required to be provided under subparagraph
(A)(i) for such taxable year.
‘‘(ii) COLLECTIVELY BARGAINED COST
MAINTENANCE
PERIOD.—The term ‘collec-
tively bargained cost maintenance period’
means, with respect to each covered retiree
and his covered spouse and dependents, the
shorter of—
‘‘(I) the remaining lifetime of
such covered retiree and his covered
spouse and dependents, or
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‘‘(II) the period of coverage pro-
vided by the collectively bargained
health plan (determined as of the date
of the collectively bargained transfer)
with respect to such covered retiree and
his covered spouse and dependents.’’.
(c) LIMITATIONS ON EMPLOYER.—Subsection (d) of
section 420 of the Internal Revenue Code of 1986 is amend-
ed to read as follows:
‘‘(d) LIMITATIONS ON EMPLOYER.—For purposes of
this title—
‘‘(1) DEDUCTION
LIMITATIONS.—No deduction
shall be allowed—
‘‘(A) for the transfer of any amount to a
health benefits account in a qualified transfer (or
any retransfer to the plan under subsection
(c)(1)(C)),
‘‘(B) for qualified current retiree health li-
abilities or collectively bargained retiree health
liabilities paid out of the assets (and income) de-
scribed in subsection (c)(1), or
‘‘(C) except in the case of a collectively bar-
gained transfer, for any amounts to which sub-
paragraph (B) does not apply and which are
paid for qualified current retiree health liabil-
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HR 2830 EAS
ities for the taxable year to the extent such
amounts are not greater than the excess (if any)
of—
‘‘(i) the amount determined under sub-
paragraph (A) (and income allocable there-
to), over
‘‘(ii) the amount determined under
subparagraph (B).
‘‘(2) OTHER LIMITATIONS.—
‘‘(A) NO
CONTRIBUTIONS
ALLOWED.—Ex-
cept as provided in subparagraph (B), an em-
ployer may not contribute after December 31,
1990, any amount to a health benefits account or
welfare benefit fund (as defined in section
419(e)(1)) with respect to qualified current re-
tiree health liabilities for which transferred as-
sets are required to be used under subsection
(c)(1)(A).
‘‘(B) EXCEPTION.—An employer may con-
tribute an amount to a health benefits account or
welfare benefit fund (as defined in section
419(e)(1)) with respect to collectively bargained
retiree health liabilities for which transferred as-
sets are required to be used under subsection
(c)(1)(B), and the deductibility of any such con-