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SEC. 860. EXPANDED USE OF TAX COURT PRACTICE FEE 
FOR PRO SE TAXPAYERS. 
(a) IN GENERAL.—Section 7475(b) of the Internal 
Revenue Code of 1986 (relating to use of fees) is amended 
by inserting before the period at the end ‘‘and to provide 
services to pro se taxpayers’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
Subtitle F—Other Provisions 
SEC. 861. EXTENSION TO ALL GOVERNMENTAL PLANS OF 
CURRENT MORATORIUM ON APPLICATION OF 
CERTAIN NONDISCRIMINATION RULES APPLI-
CABLE TO STATE AND LOCAL PLANS. 
(a) IN GENERAL.—
(1) Subparagraph (G) of section 401(a)(5) and 
subparagraph (G) of section 401(a)(26) of the Inter-
nal Revenue Code of 1986 are each amended by 
striking ‘‘section 414(d))’’ and all that follows and 
inserting ‘‘section 414(d)).’’. 
(2) Subparagraph (G) of section 401(k)(3) of 
such Code and paragraph (2) of section 1505(d) of 
the Taxpayer Relief Act of 1997 (Public Law 105–
34; 111 Stat. 1063) are each amended by striking 
‘‘maintained by a State or local government or polit-
664
ical subdivision thereof (or agency or instrumentality 
thereof)’’. 
(b) CONFORMING AMENDMENTS.—
(1) The heading of subparagraph (G) of section 
401(a)(5) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘STATE AND LOCAL GOVERN-
MENTAL’’ and inserting ‘‘GOVERNMENTAL’’. 
(2) The heading of subparagraph (G) of section 
401(a)(26) of such Code is amended by striking 
‘‘EXCEPTION FOR STATE AND LOCAL’’ and inserting 
‘‘EXCEPTION FOR’’. 
(3) Section 401(k)(3)(G) of such Code is 
amended by inserting ‘‘GOVERNMENTAL PLAN.—’’ 
after ‘‘(G)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to any year beginning after the 
date of the enactment of this Act. 
SEC. 862. ELIMINATION OF AGGREGATE LIMIT FOR USAGE 
OF EXCESS FUNDS FROM BLACK LUNG DIS-
ABILITY TRUSTS. 
(a) IN GENERAL.—So much of section 501(c)(21)(C) 
of the Internal Revenue Code of 1986 (relating to black 
lung disability trusts) as precedes the last sentence is 
amended to read as follows:
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‘‘(C) Payments described in subparagraph 
(A)(i)(IV) may be made from such trust during 
a taxable year only to the extent that the aggre-
gate amount of such payments during such tax-
able year does not exceed the excess (if any), as 
of the close of the preceding taxable year, of—
‘‘(i) the fair market value of the as-
sets of the trust, over 
‘‘(ii) 110 percent of the present value 
of the liability described in subparagraph 
(A)(i)(I) of such person.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 863. TREATMENT OF DEATH BENEFITS FROM COR-
PORATE-OWNED LIFE INSURANCE. 
(a) IN GENERAL.—Section 101 of the Internal Rev-
enue Code of 1986 (relating to certain death benefits) is 
amended by adding at the end the following new sub-
section: 
‘‘(j) TREATMENT OF CERTAIN EMPLOYER-OWNED 
LIFE INSURANCE CONTRACTS.—
‘‘(1) GENERAL RULE.—In the case of an em-
ployer-owned life insurance contract, the amount ex-
cluded from gross income of an applicable policy-
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holder by reason of paragraph (1) of subsection (a) 
shall not exceed an amount equal to the sum of the 
premiums and other amounts paid by the policy-
holder for the contract. 
‘‘(2) EXCEPTIONS.—In the case of an employer-
owned life insurance contract with respect to which 
the notice and consent requirements of paragraph 
(4) are met, paragraph (1) shall not apply to any of 
the following: 
‘‘(A) EXCEPTIONS
BASED
ON
INSURED’S 
STATUS.—Any amount received by reason of 
the death of an insured who, with respect to an 
applicable policyholder—
‘‘(i) was an employee at any time dur-
ing the 12-month period before the in-
sured’s death, or 
‘‘(ii) is, at the time the contract is 
issued—
‘‘(I) a director, 
‘‘(II) a highly compensated em-
ployee within the meaning of section 
414(q) (without regard to paragraph 
(1)(B)(ii) thereof), or 
‘‘(III) a highly compensated indi-
vidual within the meaning of section
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105(h)(5), except that ‘35 percent’ 
shall be substituted for ‘25 percent’ in 
subparagraph (C) thereof. 
‘‘(B) EXCEPTION FOR AMOUNTS PAID TO 
INSURED’S
HEIRS.—Any amount received by 
reason of the death of an insured to the ex-
tent—
‘‘(i) the amount is paid to a member 
of the family (within the meaning of sec-
tion 267(c)(4)) of the insured, any indi-
vidual who is the designated beneficiary of 
the insured under the contract (other than 
the applicable policyholder), a trust estab-
lished for the benefit of any such member 
of the family or designated beneficiary, or 
the estate of the insured, or 
‘‘(ii) the amount is used to purchase 
an equity (or capital or profits) interest in 
the applicable policyholder from any person 
described in clause (i). 
‘‘(3) EMPLOYER-OWNED LIFE INSURANCE CON-
TRACT.—
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘employer-owned life insur-
668
ance contract’ means a life insurance contract 
which—
‘‘(i) is owned by a person engaged in 
a trade or business and under which such 
person (or a related person described in 
subparagraph (B)(ii)) is directly or indi-
rectly a beneficiary under the contract, and 
‘‘(ii) covers the life of an insured who 
is an employee with respect to the trade or 
business of the applicable policyholder on 
the date the contract is issued. 
For purposes of the preceding sentence, if cov-
erage for each insured under a master contract 
is treated as a separate contract for purposes of 
sections 817(h), 7702, and 7702A, coverage for 
each such insured shall be treated as a separate 
contract. 
‘‘(B) APPLICABLE
POLICYHOLDER.—For 
purposes of this subsection—
‘‘(i) IN GENERAL.—The term ‘applica-
ble policyholder’ means, with respect to 
any employer-owned life insurance con-
tract, the person described in subpara-
graph (A)(i) which owns the contract.
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‘‘(ii) RELATED PERSONS.—The term 
‘applicable policyholder’ includes any per-
son which—
‘‘(I) bears a relationship to the 
person described in clause (i) which is 
specified 
in 
section 
267(b) 
or 
707(b)(1), or 
‘‘(II) is engaged in trades or 
businesses with such person which are 
under common control (within the 
meaning of subsection (a) or (b) of 
section 52). 
‘‘(4) NOTICE AND CONSENT REQUIREMENTS.—
The notice and consent requirements of this para-
graph are met if, before the issuance of the contract, 
the employee—
‘‘(A) is notified in writing that the applica-
ble policyholder intends to insure the employee’s 
life and the maximum face amount for which 
the employee could be insured at the time the 
contract was issued, 
‘‘(B) provides written consent to being in-
sured under the contract and that such cov-
erage may continue after the insured terminates 
employment, and
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‘‘(C) is informed in writing that an appli-
cable policyholder will be a beneficiary of any 
proceeds payable upon the death of the em-
ployee. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) EMPLOYEE.—The term ‘employee’ in-
cludes an officer, director, and highly com-
pensated employee (within the meaning of sec-
tion 414(q)). 
‘‘(B) 
INSURED.—The 
term 
‘insured’ 
means, with respect to an employer-owned life 
insurance contract, an individual covered by the 
contract who is a United States citizen or resi-
dent. In the case of a contract covering the 
joint lives of 2 individuals, references to an in-
sured include both of the individuals.’’. 
(b) REPORTING REQUIREMENTS.—Subpart A of part 
III of subchapter A of chapter 61 of the Internal Revenue 
Code of 1986 (relating to information concerning persons 
subject to special provisions) is amended by inserting after 
section 6039H the following new section:
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‘‘SEC. 6039I. RETURNS AND RECORDS WITH RESPECT TO 
EMPLOYER-OWNED LIFE INSURANCE CON-
TRACTS. 
‘‘(a) IN GENERAL.—Every applicable policyholder 
owning 1 or more employer-owned life insurance contracts 
issued after the date of the enactment of this section shall 
file a return (at such time and in such manner as the 
Secretary shall by regulations prescribe) showing for each 
year such contracts are owned—
‘‘(1) the number of employees of the applicable 
policyholder at the end of the year, 
‘‘(2) the number of such employees insured 
under such contracts at the end of the year, 
‘‘(3) the total amount of insurance in force at 
the end of the year under such contracts, 
‘‘(4) the name, address, and taxpayer identifica-
tion number of the applicable policyholder and the 
type of business in which the policyholder is en-
gaged, and 
‘‘(5) that the applicable policyholder has a valid 
consent for each insured employee (or, if all such 
consents are not obtained, the number of insured 
employees for whom such consent was not obtained). 
‘‘(b) RECORDKEEPING REQUIREMENT.—Each appli-
cable policyholder owning 1 or more employer-owned life 
insurance contracts during any year shall keep such
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records as may be necessary for purposes of determining 
whether the requirements of this section and section 
101(j) are met. 
‘‘(c) DEFINITIONS.—Any term used in this section 
which is used in section 101(j) shall have the same mean-
ing given such term by section 101(j).’’. 
(c) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 101(a) of the In-
ternal Revenue Code of 1986 is amended by striking 
‘‘and subsection (f)’’ and inserting ‘‘subsection (f), 
and subsection (j)’’. 
(2) The table of sections for subpart A of part 
III of subchapter A of chapter 61 of such Code is 
amended by inserting after the item relating to sec-
tion 6039H the following new item:
‘‘Sec. 6039I. Returns and records with respect to employer-owned life insurance 
contracts.’’.
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to life insurance contracts issued 
after the date of the enactment of this Act, except for a 
contract issued after such date pursuant to an exchange 
described in section 1035 of the Internal Revenue Code 
of 1986 for a contract issued on or prior to that date. 
For purposes of the preceding sentence, any material in-
crease in the death benefit or other material change shall 
cause the contract to be treated as a new contract except
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that, in the case of a master contract (within the meaning 
of section 264(f)(4)(E) of such Code), the addition of cov-
ered lives shall be treated as a new contract only with re-
spect to such additional covered lives. 
SEC. 864. TREATMENT OF TEST ROOM SUPERVISORS AND 
PROCTORS WHO ASSIST IN THE ADMINISTRA-
TION OF COLLEGE ENTRANCE AND PLACE-
MENT EXAMS. 
(a) IN GENERAL.—Section 530 of the Revenue Rec-
onciliation Act of 1978 is amended by adding at the end 
the following new subsection: 
‘‘(f) TREATMENT OF TEST ROOM SUPERVISORS AND 
PROCTORS WHO ASSIST
IN
THE ADMINISTRATION
OF 
COLLEGE ENTRANCE AND PLACEMENT EXAMS.—
‘‘(1) IN GENERAL.—In the case of an individual 
described in paragraph (2) who is providing services 
as a test proctor or room supervisor by assisting in 
the administration of college entrance or placement 
examinations, this section shall be applied to such 
services performed after December 31, 2006 (and 
remuneration paid for such services) without regard 
to subsection (a)(3) thereof. 
‘‘(2) APPLICABILITY.—An individual is de-
scribed in this paragraph if the individual—
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‘‘(A) is providing the services described in 
subsection (a) to an organization described in 
section 501(c), and exempt from tax under sec-
tion 501(a), of the Internal Revenue Code of 
1986, and 
‘‘(B) is not otherwise treated as an em-
ployee of such organization for purposes of sub-
title C of such Code (relating to employment 
taxes).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to remuneration for services per-
formed after December 31, 2006. 
SEC. 865. GRANDFATHER RULE FOR CHURCH PLANS 
WHICH SELF-ANNUITIZE. 
(a) IN GENERAL.—In the case of any plan year end-
ing after the date of the enactment of this Act, annuity 
payments provided with respect to any account maintained 
for a participant or beneficiary under a qualified church 
plan shall not fail to satisfy the requirements of section 
401(a)(9) of the Internal Revenue Code of 1986 merely 
because the payments are not made under an annuity con-
tract purchased from an insurance company if such pay-
ments would not fail such requirements if provided with 
respect to a retirement income account described in sec-
tion 403(b)(9) of such Code.