IB 
Union Calendar No. 304 
109TH CONGRESS 
2D SESSION 
H. R. 4019 
[Report No. 109–542] 
To amend title 4 of the United States Code to clarify the treatment of 
self-employment for purposes of the limitation on State taxation of retire-
ment income. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 7, 2005 
Mr. CANNON introduced the following bill; which was referred to the 
Committee on the Judiciary 
JUNE 29, 2006 
Additional sponsors: Mr. ENGLISH of Pennsylvania, Mr. SESSIONS, Mr. KEL-
LER, Mr. FEENEY, Mr. MARCHANT, Mr. CHABOT, Mr. PENCE, Mr. 
HENSARLING, Mr. COBLE, Mr. FORBES, Mr. BAKER, Mr. BOUCHER, Mr. 
TANNER, Mr. MATHESON, Mr. ROYCE, Mr. HOLDEN, Mr. SOUDER, Ms. 
HART, Mr. PRICE of Georgia, Ms. GINNY BROWN-WAITE of Florida, Mr. 
GOODLATTE, and Mr. CAMP of Michigan 
JUNE 29, 2006 
Reported with an amendment, committed to the Committee of the Whole 
House on the State of the Union, and ordered to be printed 
[Strike out all after the enacting clause and insert the part printed in italic] 
A BILL 
To amend title 4 of the United States Code to clarify the 
treatment of self-employment for purposes of the limita-
tion on State taxation of retirement income. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CLARIFICATION OF TREATMENT OF SELF-EM-
PLOYMENT FOR PURPOSES OF THE LIMITA-
TION ON STATE TAXATION OF RETIREMENT 
INCOME. 
(a) IN GENERAL.—Section 114(b)(1)(i) of title 4, 
United States Code, is amended by— 
(1) inserting ‘‘and any plan, program, or ar-
rangement providing for retirement benefits to a re-
tired partner (treated as such under applicable tax 
laws)’’ after ‘‘section 3121(v)(2)(C) of such Code’’, 
(2) inserting ‘‘which may include income de-
scribed in subparagraphs (A) through (H)’’ after 
‘‘(not less frequently than annually’’, and 
(3) adding at the end the following: ‘‘The fact 
that benefits may be adjusted from time to time 
pursuant to the plan to limit total disbursements 
under a predetermined formula, or to provide cost of 
living or similar adjustments, will not cause the pe-
riod benefits provided under the plan to fail the 
‘substantially equal period payments’ test.’’. 
(b) APPLICATION.—The amendments made by this 
section apply to amounts received after December 31, 
1995. 
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SECTION 1. CLARIFICATION OF TREATMENT OF SELF-EM-
PLOYMENT FOR PURPOSES OF THE LIMITA-
TION ON STATE TAXATION OF RETIREMENT 
INCOME. 
(a) IN GENERAL.—Section 114(b)(1)(I) of title 4, 
United States Code, is amended— 
(1) by inserting ‘‘(or any plan, program, or ar-
rangement that is in writing, that provides for retire-
ment payments in recognition of prior service to be 
made to a retired partner, and that is in effect imme-
diately before retirement begins)’’ after ‘‘section 
3121(v)(2)(C) of such Code’’, 
(2) by inserting ‘‘which may include income de-
scribed in subparagraphs (A) through (H)’’ after 
‘‘(not less frequently than annually’’, 
(3) by adding at the end the following: 
‘‘The fact that payments may be adjusted from 
time to time pursuant to such plan, program, or 
arrangement to limit total disbursements under 
a predetermined formula, or to provide cost of 
living or similar adjustments, will not cause the 
periodic payments provided under such plan, 
program, or arrangement to fail the ‘substan-
tially equal periodic payments’ test.’’, and 
(4) by adding at the end the following: 
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‘‘(4) For purposes of this section, the term ‘re-
tired partner’ is an individual who is described as a 
partner in section 7701(a)(2) of the Internal Revenue 
Code of 1986 and who is retired under such individ-
ual’s partnership agreement.’’. 
(b) APPLICATION.—The amendments made by this sec-
tion apply to amounts received after December 31, 1995. 
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Union Calendar No. 304 
109TH CONGRESS 
2D SESSION 
H. R. 4019 
[Report No. 109–542] 
A BILL 
To amend title 4 of the United States Code to clar-
ify the treatment of self-employment for purposes 
of the limitation on State taxation of retirement 
income. 
JUNE 29, 2006 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
VerDate Aug 31 2005 
04:01 Jun 30, 2006
Jkt 049200
PO 00000
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