I
103D CONGRESS
1ST SESSION
H. R. 3232
To amend the Internal Revenue Code of 1986 to provide individuals receiving
State or local governmental pensions an exclusion equivalent to that
received by social security recipients.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 6, 1993
Mr. VOLKMER introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
individuals receiving State or local governmental pensions
an exclusion equivalent to that received by social security
recipients.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
That (a) part III of subchapter B of chapter 1 of the In-
ternal Revenue Code of 1986 (relating to items specifically
excluded from income) is amended by redesignating sec-
tion 137 as section 138 and by inserting after section 136
the following new section:
‘‘SEC. 137. CERTAIN PENSIONS AND ANNUITIES UNDER
STATE OR LOCAL RETIREMENT SYSTEMS.
‘‘(a) GENERAL RULE.—Gross income does not in-
clude any amount (otherwise includible in gross income)
received by an individual as a qualified governmental pen-
sion.
‘‘(b) DOLLAR LIMITATION.—The aggregate amount
excluded under subsection (a) for the taxable year shall
not exceed—
‘‘(1) the social security exclusion amount appli-
cable to the taxpayer for such year, reduced by
‘‘(2) the sum of—
‘‘(A) the aggregate amount excluded from
gross income under section 72(b) with respect
to any qualified governmental pension, and
‘‘(B) the social security benefits (within
the meaning of section 86(d)) received by the
taxpayer during such year which were excluded
from gross income.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED
GOVERNMENTAL
PENSION.—
The term ‘qualified governmental pension’ means
any pension or annuity received under a State or
local retirement system to the extent such pension or
annuity is not attributable to service—
‘‘(A) which constitutes employment for
purposes of chapter 21 (relating to the Federal
Insurance Contributions Act), or
‘‘(B) which is covered by an agreement
made pursuant to section 218 of the Social Se-
curity Act.
‘‘(2) SOCIAL SECURITY EXCLUSION AMOUNT.—
The social security exclusion amount applicable to
any taxpayer for any taxable year is the portion of
the aggregate amount received as a qualified govern-
mental pension by such individual during such tax-
able year which would not be includible in gross in-
come if the amounts so received were social security
benefits (as defined in section 86(d)). For purposes
of the preceding sentence, amounts received as a
qualified governmental pension during such taxable
year shall not be taken into account to the extent
such amounts exceed the applicable maximum bene-
fit amount.
‘‘(3) 
APPLICABLE
MAXIMUM
BENEFIT
AMOUNT.—The term ‘applicable maximum benefit
amount’ means—
‘‘(A) in the case of an unmarried individ-
ual, the maximum individual social security
benefit,
‘‘(B) in the case of a joint return, 150 per-
cent of the maximum individual social security
benefit, or
‘‘(C) in the case of a married individual fil-
ing a separate return, 75 percent of the maxi-
mum individual social security benefit.
For purposes of the preceding sentence, marital sta-
tus shall be determined under section 143.
‘‘(4) MAXIMUM INDIVIDUAL SOCIAL SECURITY
BENEFIT.—
‘‘(A) IN GENERAL.—The term ‘maximum
individual social security benefit’ means, with
respect to any taxable year, the maximum total
amount (as certified by the Secretary of Health
and Human Services to the Secretary) which
could be paid for all months in the calendar
year ending in the taxable year as old-age in-
surance benefits under section 202(a) of the So-
cial Security Act (without regard to any reduc-
tion, deduction, or offset under section 202(k)
or section 203 of such Act) to any individual
who attained age 65, and filed application for
such benefits, on the first day of such calendar
year.