I
104TH CONGRESS
2D SESSION
H. R. 4099
To amend the Internal Revenue Code of 1986 to modify the application
of the pension nondiscrimination rules to governmental plans.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 17, 1996
Mr. PORTMAN (for himself, Mr. CARDIN, Mr. ENSIGN, Mr. MATSUI, Mr. HOB-
SON, and Mr. POMEROY) 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 modify
the application of the pension nondiscrimination rules
to governmental plans.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS TO NONDISCRIMINATION AND
MINIMUM PARTICIPATION RULES WITH RE-
SPECT TO GOVERNMENTAL PLANS.
(a) GENERAL NONDISCRIMINATION AND PARTICIPA-
TION RULES.—
(1) 
NONDISCRIMINATION
REQUIREMENTS.—
Paragraph (5) of section 401(a) of the Internal Rev-
enue Code of 1986 (relating to qualified pension,
profit-sharing, and stock bonus plans) is amended by
adding at the end the following new subparagraph:
‘‘(G) 
GOVERNMENTAL
PLANS.—Para-
graphs (3) and (4) shall not apply to a govern-
mental plan (within the meaning of section
414(d)).’’
(2) 
ADDITIONAL
PARTICIPATION
REQUIRE-
MENTS.—Subparagraph (H) of section 401(a)(26) of
such Code is amended to read as follows:
‘‘(H) EXCEPTION
FOR
GOVERNMENTAL
PLANS.—This paragraph shall not apply to a
governmental plan (within the meaning of sec-
tion 414(d)).’’
(3) MINIMUM
PARTICIPATION
STANDARDS.—
Paragraph (2) of section 410(c) of such Code is
amended to read as follows:
‘‘(2) A plan described in paragraph (1) shall be
treated as meeting the requirements of this section
for purposes of section 401(a), except that in the
case of a plan described in subparagraph (B), (C),
or (D) of paragraph (1), this paragraph shall only
apply if such plan meets the requirements of section
401(a)(3) (as in effect on September 1, 1974).’’
(b) PARTICIPATION STANDARDS
FOR QUALIFIED
CASH OR DEFERRED ARRANGEMENTS.—Paragraph (3) of
section 401(k) of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subpara-
graph:
‘‘(G)(i) The requirements of subparagraph
(A)(i) and (C) shall not apply to a govern-
mental plan (within the meaning of section
414(d)).
‘‘(ii) 
The 
requirements 
of 
subsection
(m)(2) (without regard to subsection (a)(4))
shall apply to any matching contribution of a
governmental plan (as so defined).’’
(c) NONDISCRIMINATION
RULES
FOR
SECTION
403(b) PLANS.—Paragraph (12) of section 403(b) of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new subparagraph:
‘‘(C) GOVERNMENTAL
PLANS.—For pur-
poses of paragraph (1)(D), the requirements of
subparagraph (A)(i) shall not apply to a gov-
ernmental plan (within the meaning of section
414(d)).’’
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to taxable years beginning on
or after the date of enactment of this Act.
(2) TREATMENT
FOR
YEARS
BEGINNING
BE-
FORE DATE OF ENACTMENT.—A governmental plan
(within the meaning of section 414(d) of the Inter-
nal Revenue Code of 1986) shall be treated as satis-
fying the requirements of sections 401(a)(3),
401(a)(4), 
401(a)(26), 
401(k), 
401(m), 
403
(b)(1)(D) and (b)(12), and 410 of such Code for all
taxable years beginning before the date of enactment
of this Act.
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