automatic portability provider or its 
affiliates in connection with the trans-
fer, 
‘‘(IV) a telephone number at 
which the individual can contact the 
automatic portability provider, and 
‘‘(V) such other disclosures as 
the Secretary may require by regula-
tion. 
‘‘(vii) NOTICE
REQUIREMENTS.—The 
notices required under clauses (v) and (vi) 
shall be written in a manner calculated to 
be understood by the average intended re-
cipient and shall not include materially 
misleading statements. 
‘‘(viii) TIMELINESS OF EXECUTION.— 
After liquidating the assets of an indi-
vidual retirement plan described in sub-
paragraph (A)(i)(I) to cash, an automatic 
portability provider shall transfer the ac-
count balance of such plan as soon as 
practicable to the plan described in sub-
paragraph (A)(i)(II). 
‘‘(ix) RECORD
RETENTION
AND
AU-
DITS.— 
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‘‘(I) IN GENERAL.—An automatic 
portability provider shall, for 6 years, 
maintain the records sufficient to 
demonstrate the terms of this sub-
paragraph have been met. 
‘‘(II) 
AUDITS.—An 
automatic 
portability provider shall conduct an 
annual audit of automatic portability 
transactions occurring during the cal-
endar year to demonstrate compliance 
with this subparagraph, and shall sub-
mit such audit annually to the Sec-
retary, in such form and manner as 
specified by the Secretary.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions occurring after De-
cember 31, 2023. 
SEC. 4. EMPLOYER AUTOMATIC PORTABILITY ARRANGE-
MENT TAX CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
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‘‘SEC. 
45U. 
EMPLOYER 
AUTOMATIC 
PORTABILITY 
AR-
RANGEMENT CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible employer, the automatic portability 
arrangement credit determined under this section for the 
adoption year is an amount equal to $500. 
‘‘(b) ELIGIBLE EMPLOYER.—For purposes of this 
section, the term ‘eligible employer’ has the meaning given 
the term by section 408(p)(2)(C)(i) (without regard to 
subclause (II) thereof). 
‘‘(c) ADOPTION YEAR.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘adoption year’ 
means the taxable year during which the eligible em-
ployer adopts an automatic portability arrangement 
as part of an eligible plan maintained by the em-
ployer. 
‘‘(2) 
AUTOMATIC
PORTABILITY
ARRANGE-
MENT.— 
‘‘(A) IN GENERAL.—The term ‘automatic 
portability arrangement’ means an arrangement 
providing for automatic portability transactions. 
‘‘(B) AUTOMATIC
PORTABILITY
TRANS-
ACTION.—The 
term 
‘automatic 
portability 
transaction’ means a transaction in which 
amounts 
distributed 
pursuant 
to 
section 
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401(a)(31)(B)(i) from a plan to an individual 
retirement plan established on behalf of an indi-
vidual are subsequently transferred to an eligi-
ble plan in which such individual is an active 
participant, after such individual has been given 
advance notice of the transfer and has not af-
firmatively opted out of such transfer. 
‘‘(3) ELIGIBLE PLAN.—The term ‘eligible plan’ 
means a qualified employer plan as defined in sec-
tion 4972(d)(1), other than a defined benefit plan.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of the Internal 
Revenue Code of 1986 is amended by striking ‘‘plus’’ at 
the end of paragraph (32), by striking the period at the 
end of paragraph (33) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph: 
‘‘(34) in the case of an eligible employer (as de-
fined in section 45U(b)), the automatic portability 
arrangement 
credit 
determined 
under 
section 
45U(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new item: 
‘‘Sec. 45U. Employer automatic portability arrangement credit.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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