114
administrator shall provide written notice to each
applicable individual (and to each employee organi-
zation representing applicable individuals).
‘‘(2) NOTICE.—The notice required by para-
graph (1) shall be written in a manner calculated to
be understood by the average plan participant and
shall provide sufficient information (as determined
in accordance with regulations prescribed by the
Secretary) to allow applicable individuals to under-
stand the effect of the plan amendment.
‘‘(3) TIMING OF NOTICE.—Except as provided
in regulations, the notice required by paragraph (1)
shall be provided within a reasonable time before the
effective date of the plan amendment.
‘‘(4) DESIGNEES.—Any notice under paragraph
(1) may be provided to a person designated, in writ-
ing, by the person to which it would otherwise be
provided.
‘‘(5) NOTICE
BEFORE
ADOPTION
OF
AMEND-
MENT.—A plan shall not be treated as failing to
meet the requirements of paragraph (1) merely be-
cause notice is provided before the adoption of the
plan amendment if no material modification of the
amendment occurs before the amendment is adopt-
ed.
115
‘‘(f ) APPLICABLE INDIVIDUAL; APPLICABLE PEN-
SION PLAN.—For purposes of this section—
‘‘(1) APPLICABLE INDIVIDUAL.—The term ‘ap-
plicable individual’ means, with respect to any plan
amendment—
‘‘(A) any participant in the plan, and
‘‘(B) any beneficiary who is an alternate
payee (within the meaning of section 414(p)(8))
under an applicable qualified domestic relations
order 
(within 
the 
meaning 
of 
section
414(p)(1)(A)),
who may reasonably be expected to be affected by
such plan amendment.
‘‘(2) APPLICABLE
PENSION
PLAN.—The term
‘applicable pension plan’ means—
‘‘(A) any defined benefit plan, or
‘‘(B) an individual account plan which is
subject to the funding standards of section 412,
which had 100 or more participants who had ac-
crued a benefit, or with respect to whom contribu-
tions were made, under the plan (whether or not
vested) as of the last day of the plan year preceding
the plan year in which the plan amendment becomes
effective. Such term shall not include a governmental
plan (within the meaning of section 414(d)) or a
116
church plan (within the meaning of section 414(e))
with respect to which the election provided by sec-
tion 410(d) has not been made.’’.
(b) AMENDMENT TO ERISA.—Section 204(h) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1054(h)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(3)(A) A plan to which paragraph (1) applies shall
not be treated as meeting the requirements of such para-
graph unless, in addition to any notice required to be pro-
vided to an individual or organization under such para-
graph, the plan administrator provides the notice de-
scribed in subparagraph (B).
‘‘(B) The notice required by subparagraph (A) shall
be written in a manner calculated to be understood by the
average plan participant and shall provide sufficient infor-
mation (as determined in accordance with regulations pre-
scribed by the Secretary of the Treasury) to allow individ-
uals to understand the effect of the plan amendment.
‘‘(C) Except as provided in regulations prescribed by
the Secretary of the Treasury, the notice required by sub-
paragraph (A) shall be provided within a reasonable time
before the effective date of the plan amendment.
‘‘(D) A plan shall not be treated as failing to meet
the requirements of subparagraph (A) merely because no-
117
tice is provided before the adoption of the plan amendment
if no material modification of the amendment occurs be-
fore the amendment is adopted.’’.
(c) CLERICAL AMENDMENT.—The table of sections
for chapter 43 is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 4980F. Failure of applicable plans reducing benefit accruals
to satisfy notice requirements.’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plan amendments taking
effect on or after the date of the enactment of this
Act.
(2) TRANSITION.—Until such time as the Sec-
retary of the Treasury issues regulations under sec-
tions 4980F(e)(2) and (3) of the Internal Revenue
Code of 1986 and section 204(h)(3) of the Employee
Retirement Income Security Act of 1974 (as added
by the amendments made by this section), a plan
shall be treated as meeting the requirements of such
sections if it makes a good faith effort to comply
with such requirements.
(3) SPECIAL RULE.—The period for providing
any notice required by the amendments made by this
section shall not end before the date which is 3
months after the date of the enactment of this Act.
118
SEC. 348. PROTECTION OF INVESTMENT OF EMPLOYEE
CONTRIBUTIONS TO 401(K) PLANS.
(a) IN GENERAL.—Section 1524(b) of the Taxpayer
Relief Act of 1997 is amended to read as follows:
‘‘(b) EFFECTIVE DATE.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to elective deferrals for plan years begin-
ning after December 31, 1998.
‘‘(2) NONAPPLICATION
TO
PREVIOUSLY
AC-
QUIRED PROPERTY.—The amendments made by this
section shall not apply to any elective deferral which
is invested in assets consisting of qualifying em-
ployer securities, qualifying employer real property,
or both, if such assets were acquired before January
1, 1999.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply as if included in the provision of
the Taxpayer Relief Act of 1997 to which it relates.
SEC. 349. TREATMENT OF MULTIEMPLOYER PLANS UNDER
SECTION 415.
(a) COMPENSATION LIMIT.—Paragraph (11) of sec-
tion 415(b) (relating to limitation for defined benefit
plans) is amended to read as follows:
‘‘(11) SPECIAL LIMITATION RULE FOR GOVERN-
MENTAL AND MULTIEMPLOYER PLANS.—In the case
119
of a governmental plan (as defined in section
414(d)) or a multiemployer plan (as defined in sec-
tion 414(f )), subparagraph (B) of paragraph (1)
shall not apply.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to years beginning after December
31, 2000.
SEC. 350. TECHNICAL CORRECTIONS TO SAVER ACT.
Section 517 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1147) is amended—
(1) in subsection (a), by striking ‘‘2001 and
2005 on or after September 1 of each year involved’’
and inserting ‘‘2001, 2005, and 2009 in the month
of September of each year involved’’;
(2) in subsection (b), by adding at the end the
following new sentence: ‘‘To effectuate the purposes
of this paragraph, the Secretary may enter into a co-
operative agreement, pursuant to the Federal Grant
and Cooperative Agreement Act of 1977 (31 U.S.C.
6301 et seq.), with the American Savings Education
Council.’’;
(3) in subsection (e)(2)—
(A) by striking subparagraph (D) and in-
serting the following:
120
‘‘(D) the Chairman and Ranking Member
of the Subcommittee on Labor, Health and
Human Services, and Education of the Com-
mittee on Appropriations of the House of Rep-
resentatives and the Chairman and Ranking
Member of the Subcommittee on Labor, Health
and Human Services, and Education of the
Committee on Appropriations of the Senate;’’;
(B) by redesignating subparagraph (G) as
subparagraph (J); and
(C) by inserting after subparagraph (F)
the following new subparagraphs:
‘‘(G) the Chairman and Ranking Member
of the Committee on Finance of the Senate;
‘‘(H) the Chairman and Ranking Member
of the Committee on Ways and Means of the
House of Representatives;
‘‘(I) the Chairman and Ranking Member
of the Subcommittee on Employer-Employee
Relations of the Committee on Education and
the Workforce of the House of Representatives;
and’’;
(4) in subsection (e)(3)(A)—
(A) by striking ‘‘There shall be no more
than 200 additional participants.’’ and inserting
121
‘‘The participants in the National Summit shall
also include additional participants appointed
under this subparagraph.’’;
(B) by striking ‘‘one-half shall be ap-
pointed by the President,’’ in clause (i) and in-
serting ‘‘not more than 100 participants shall
be appointed under this clause by the Presi-
dent,’’, and by striking ‘‘and’’ at the end of
clause (i);
(C) by striking ‘‘one-half shall be ap-
pointed by the elected leaders of Congress’’ in
clause (ii) and inserting ‘‘not more than 100
participants shall be appointed under this
clause by the elected leaders of Congress’’, and
by striking the period at the end of clause (ii)
and inserting ‘‘; and’’; and
(D) by adding at the end the following new
clause:
‘‘(iii) The President, in consultation
with the elected leaders of Congress re-
ferred to in subsection (a), may appoint
under this clause additional participants to
the National Summit. The number of such
additional participants appointed under
this clause may not exceed the lesser of 3
122
percent of the total number of all addi-
tional participants appointed under this
paragraph, or 10. Such additional partici-
pants shall be appointed from persons
nominated by the organization referred to
in subsection (b)(2) which is made up of
private sector businesses and associations
partnered with Government entities to pro-
mote long term financial security in retire-
ment through savings and with which the
Secretary is required thereunder to consult
and cooperate and shall not be Federal,
State, or local government employees.’’;
(5) in subsection (e)(3)(B), by striking ‘‘Janu-
ary 31, 1998’’ in subparagraph (B) and inserting
‘‘May 1, 2001, May 1, 2005, and May 1, 2009, for
each of the subsequent summits, respectively’’;
(6) in subsection (f)(1)(C), by inserting ‘‘, no
later than 90 days prior to the date of the com-
mencement of the National Summit,’’ after ‘‘com-
ment’’ in paragraph (1)(C);
(7) in subsection (g), by inserting ‘‘, in con-
sultation with the congressional leaders specified in
subsection (e)(2),’’ after ‘‘report’’;
(8) in subsection (i)—
123
(A) by striking ‘‘beginning on or after Oc-
tober 1, 1997’’ in paragraph (1) and inserting
‘‘2001, 2005, and 2009’’; and
(B) by adding at the end the following new
paragraph:
‘‘(3) RECEPTION
AND
REPRESENTATION
AU-
THORITY.—The Secretary is hereby granted recep-
tion and representation authority limited specifically
to the events at the National Summit. The Secretary
shall use any private contributions received in con-
nection with the National Summit prior to using
funds appropriated for purposes of the National
Summit pursuant to this paragraph.’’; and
(9) in subsection (k)—
(A) by striking ‘‘shall enter into a contract
on a sole-source basis’’ and inserting ‘‘may
enter into a contract on a sole-source basis’’;
and
(B) by striking ‘‘fiscal year 1998’’ and in-
serting ‘‘fiscal years 2001, 2005, and 2009’’.
SEC. 351. MODEL SPOUSAL CONSENT LANGUAGE AND
QUALIFIED DOMESTIC RELATIONS ORDER.
(a) MODEL SPOUSAL CONSENT LANGUAGE.—Section
205(c) of the Employee Retirement Income Security Act
124
of 1974 (29 U.S.C. 1055(c)) is amended by adding at the
end the following new paragraph:
‘‘(9) Not later than January 1, 2001, the Secretary
of Labor shall develop model language for the spousal con-
sent required under paragraph (2) which—
‘‘(A) is written in a manner calculated to be un-
derstood by the average person, and
‘‘(B) discloses in plain terms whether—
‘‘(i) the waiver is irrevocable, and
‘‘(ii) the waiver may be revoked by a quali-
fied domestic relations order.’’.
(b) MODEL
QUALIFIED
DOMESTIC
RELATIONS
ORDER.—Section 206(d)(3) of such Act (29 U.S.C.
1056(d)(3)) is amended by adding at the end the following
new subparagraph:
‘‘(O) Not later than January 1, 2001, the Secretary
shall develop language for a qualified domestic relations
order which meets—
‘‘(i) the requirements of subparagraph (B)(i),
and
‘‘(ii) the requirements of this Act related to the
need to consider the treatment of any lump sum
payment, qualified joint and survivor annuity, or
qualified preretirement survivor annuity.’’.
125
(c) PUBLICITY.—The Secretary of Labor shall in-
clude publicity for the model language required by the
amendments made by this section in the pension outreach
efforts undertaken by each Secretary.
SEC. 352. ELIMINATION OF ERISA DOUBLE JEOPARDY.
(a) ELIMINATION OF SECOND LAWSUITS BY THE
SECRETARY.—Section 502(h) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1132(h)) is
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(h)’’, and
(2) by adding at the end the following:
‘‘(2) In any case in which—
‘‘(A) a complaint in an action brought against
a person under subsection (a)(2) is served in accord-
ance with paragraph (1), and
‘‘(B) the action is maintained as a class action
or derivative action under the Federal Rules of Civil
Procedure,
‘‘(C) the action is resolved by a court-approved
settlement agreement,
‘‘(D) the complaint is served upon the Secretary
at least 90 days prior to final court approval of the
settlement agreement, and
‘‘(E) the Secretary receives a fully executed
copy of the settlement agreement within the time es-
126
tablished by the court for notifying the plan’s par-
ticipants of the proposed compromise pursuant to
Rule 23 or 23.1 of the Federal Rules of Civil Proce-
dure,
the Secretary shall be barred from litigating any claim
against such person under subsection (a)(2) that was, or
could have been, brought in that action with respect to
the same plan. Notwithstanding this paragraph, the Sec-
retary shall not be barred from litigating any claim
against such person under subsection (a)(2) if the Sec-
retary filed a complaint under subsection (a)(2) prior to
the final court approval of the settlement agreement.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section are effective with respect to all actions or
claims commenced by the Secretary that are pending on
or after the date of the enactment of this Act.
Subtitle E—Reducing Regulatory
Burdens
SEC. 361. MODIFICATION OF TIMING OF PLAN VALUATIONS.
(a) IN GENERAL.—Section 412(c)(9) (relating to an-
nual valuation) is amended—
(1) by striking ‘‘For purposes’’ and inserting
the following:
‘‘(A) IN GENERAL.—For purposes’’, and
(2) by adding at the end the following:
127
‘‘(B) ELECTION
TO
USE
PRIOR
YEAR
VALUATION.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), if, for any plan year—
‘‘(I) an election is in effect under
this subparagraph with respect to a
plan, and
‘‘(II) the assets of the plan are
not less than 125 percent of the
plan’s current liability (as defined in
paragraph (7)(B)), determined as of
the valuation date for the preceding
plan year,
then this section shall be applied using the
information available as of such valuation
date.
‘‘(ii) EXCEPTIONS.—
‘‘(I) ACTUAL VALUATION EVERY
3 YEARS.—Clause (i) shall not apply
for more than 2 consecutive plan
years and valuation shall be under
subparagraph (A) with respect to any
plan year to which clause (i) does not
apply by reason of this subclause.
128
‘‘(II) REGULATIONS.—Clause (i)
shall not apply to the extent that
more frequent valuations are required
under the regulations under subpara-
graph (A).
‘‘(iii) 
ADJUSTMENTS.—Information
under clause (i) shall, in accordance with
regulations, be actuarially adjusted to re-
flect significant differences in participants.
‘‘(iv) ELECTION.—An election under
this subparagraph, once made, shall be ir-
revocable without the consent of the Sec-
retary.’’.
(b) AMENDMENTS
TO ERISA.—Paragraph (9) of
section 302(c) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1053(c)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(9)’’, and
(2) by adding at the end the following:
‘‘(B)(i) Except as provided in clause (ii), if, for any
plan year—
‘‘(I) an election is in effect under this subpara-
graph with respect to a plan, and
‘‘(II) the assets of the plan are not less than
125 percent of the plan’s current liability (as defined
129
in paragraph (7)(B)), determined as of the valuation
date for the preceding plan year,
then this section shall be applied using the information
available as of such valuation date.
‘‘(ii)(I) Clause (i) shall not apply for more than 2
consecutive plan years and valuation shall be under sub-
paragraph (A) with respect to any plan year to which
clause (i) does not apply by reason of this subclause.
‘‘(II) Clause (i) shall not apply to the extent that
more frequent valuations are required under the regula-
tions under subparagraph (A).
‘‘(iii) Information under clause (i) shall, in accord-
ance with regulations, be actuarially adjusted to reflect
significant differences in participants.
‘‘(iv) An election under this subparagraph, once
made, shall be irrevocable without the consent of the Sec-
retary of the Treasury.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to plan years beginning after De-
cember 31, 2000.
SEC. 362. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT
LOSS OF DIVIDEND DEDUCTION.
(a) IN GENERAL.—Section 404(k)(2)(A) (defining
applicable dividends) is amended by striking ‘‘or’’ at the
end of clause (ii), by redesignating clause (iii) as clause
130
(iv), and by inserting after clause (ii) the following new
clause:
‘‘(iii) is, at the election of such par-
ticipants or their beneficiaries—
‘‘(I) payable as provided in clause
(i) or (ii), or
‘‘(II) paid to the plan and rein-
vested in qualifying employer securi-
ties, or’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
SEC. 363. REPEAL OF TRANSITION RULE RELATING TO CER-
TAIN HIGHLY COMPENSATED EMPLOYEES.
(a) IN GENERAL.—Paragraph (4) of section 1114(c)
of the Tax Reform Act of 1986 is hereby repealed.
(b) EFFECTIVE DATE.—The repeal made by sub-
section (a) shall apply to plan years beginning after De-
cember 31, 1999.
SEC. 364. EMPLOYEES OF TAX-EXEMPT ENTITIES.
(a) IN GENERAL.—The Secretary of the Treasury
shall modify Treasury Regulations section 1.410(b)–6(g)
to provide that employees of an organization described in
section 403(b)(1)(A)(i) of the Internal Revenue Code of
1986 who are eligible to make contributions under section
131
403(b) of such Code pursuant to a salary reduction agree-
ment may be treated as excludable with respect to a plan
under section 401 (k) or (m) of such Code that is provided
under the same general arrangement as a plan under such
section 401(k), if—
(1) no employee of an organization described in
section 403(b)(1)(A)(i) of such Code is eligible to
participate in such section 401(k) plan or section
401(m) plan, and
(2) 95 percent of the employees who are not
employees of an organization described in section
403(b)(1)(A)(i) of such Code are eligible to partici-
pate in such plan under such section 401 (k) or (m).
(b) EFFECTIVE DATE.—The modification required by
subsection (a) shall apply as of the same date set forth
in section 1426(b) of the Small Business Job Protection
Act of 1996.
SEC. 365. CLARIFICATION OF TREATMENT OF EMPLOYER-
PROVIDED RETIREMENT ADVICE.
(a) IN GENERAL.—Subsection (a) of section 132 (re-
lating to exclusion from gross income) is amended by
striking ‘‘or’’ at the end of paragraph (5), by striking the
period at the end of paragraph (6) and inserting ‘‘, or’’,
and by adding at the end the following new paragraph:
‘‘(7) qualified retirement planning services.’’.
132
(b) QUALIFIED RETIREMENT PLANNING SERVICES
DEFINED.—Section 132 is amended by redesignating sub-
section (m) as subsection (n) and by inserting after sub-
section (l) the following:
‘‘(m) QUALIFIED RETIREMENT PLANNING SERV-
ICES.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified retirement planning serv-
ices’ means any retirement planning service provided
to an employee and his spouse by an employer main-
taining a qualified employer plan.
‘‘(2) NONDISCRIMINATION
RULE.—Subsection
(a)(7) shall apply in the case of highly compensated
employees only if such services are available on sub-
stantially the same terms to each member of the
group of employees normally provided education and
information regarding the employer’s qualified em-
ployer plan.
‘‘(3) QUALIFIED EMPLOYER PLAN.—For pur-
poses of this subsection, the term ‘qualified employer
plan’ means a plan, contract, pension, or account de-
scribed in section 219(g)(5).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to years beginning after December
31, 2000.
133
SEC. 366. REPORTING SIMPLIFICATION.
(a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR
OWNERS AND THEIR SPOUSES.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall modify the requirements for filing annual
returns with respect to one-participant retirement
plans to ensure that such plans with assets of
$250,000 or less as of the close of the plan year
need not file a return for that year.
(2) ONE-PARTICIPANT RETIREMENT PLAN DE-
FINED.—For purposes of this subsection, the term
‘‘one-participant retirement plan’’ means a retire-
ment plan that—
(A) on the first day of the plan year—
(i) covered only the employer (and the
employer’s spouse) and the employer
owned the entire business (whether or not
incorporated), or
(ii) covered only one or more partners
(and their spouses) in a business partner-
ship (including partners in an S or C cor-
poration),
(B) meets the minimum coverage require-
ments of section 410(b) of the Internal Revenue
Code of 1986 without being combined with any
134
other plan of the business that covers the em-
ployees of the business,
(C) does not provide benefits to anyone ex-
cept the employer (and the employer’s spouse)
or the partners (and their spouses),
(D) does not cover a business that is a
member of an affiliated service group, a con-
trolled group of corporations, or a group of
businesses under common control, and
(E) does not cover a business that leases
employees.
(3) OTHER DEFINITIONS.—Terms used in para-
graph (2) which are also used in section 414 of the
Internal Revenue Code of 1986 shall have the re-
spective meanings given such terms by such section.
(b) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR
PLANS WITH FEWER THAN 25 EMPLOYEES.—In the case
of a retirement plan which covers less than 25 employees
on the first day of the plan year and meets the require-
ments described in subparagraphs (B), (D), and (E) of
subsection (a)(2), the Secretary of the Treasury shall pro-
vide for the filing of a simplified annual return that is
substantially similar to the annual return required to be
filed by a one-participant retirement plan.
135
(c) EFFECTIVE DATE.—The provisions of this section
shall take effect on January 1, 2001.
SEC. 367. IMPROVEMENT OF EMPLOYEE PLANS COMPLI-
ANCE RESOLUTION SYSTEM.
The Secretary of the Treasury shall continue to up-
date and improve the Employee Plans Compliance Resolu-
tion System (or any successor program) giving special at-
tention to—
(1) increasing the awareness and knowledge of
small employers concerning the availability and use
of the program,
(2) taking into account special concerns and
circumstances that small employers face with respect
to compliance and correction of compliance failures,
(3) extending the duration of the self-correction
period under the Administrative Policy Regarding
Self-Correction for significant compliance failures,
(4) expanding the availability to correct insig-
nificant compliance failures under the Administra-
tive Policy Regarding Self-Correction during audit,
and
(5) assuring that any tax, penalty, or sanction
that is imposed by reason of a compliance failure is
not excessive and bears a reasonable relationship to
the nature, extent, and severity of the failure.
136
SEC. 368. SUBSTANTIAL OWNER BENEFITS IN TERMINATED
PLANS.
(a) MODIFICATION OF PHASE-IN OF GUARANTEE.—
Section 4022(b)(5) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1322(b)(5)) is amended
to read as follows:
‘‘(5)(A) For purposes of this paragraph, the term
‘majority owner’ means an individual who, at any time
during the 60-month period ending on the date the deter-
mination is being made—
‘‘(i) owns the entire interest in an unincor-
porated trade or business,
‘‘(ii) in the case of a partnership, is a partner
who owns, directly or indirectly, 50 percent or more
of either the capital interest or the profits interest
in such partnership, or
‘‘(iii) in the case of a corporation, owns, directly
or indirectly, 50 percent or more in value of either
the voting stock of that corporation or all the stock
of that corporation.
For purposes of clause (iii), the constructive ownership
rules of section 1563(e) of the Internal Revenue Code of
1986 shall apply (determined without regard to section
1563(e)(3)(C)).
137
‘‘(B) In the case of a participant who is a majority
owner, the amount of benefits guaranteed under this sec-
tion shall equal the product of—
‘‘(i) a fraction (not to exceed 1) the numerator
of which is the number of years from the later of the
effective date or the adoption date of the plan to the
termination date, and the denominator of which is
10, and
‘‘(ii) the amount of benefits that would be guar-
anteed under this section if the participant were not
a majority owner.’’.
(b) MODIFICATION OF ALLOCATION OF ASSETS.—
(1) Section 4044(a)(4)(B) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1344(a)(4)(B)) is amended by striking ‘‘section
4022(b)(5)’’ and inserting ‘‘section 4022(b)(5)(B)’’.
(2) Section 4044(b) of such Act (29 U.S.C.
1344(b)) is amended—
(A) by striking ‘‘(5)’’ in paragraph (2) and
inserting ‘‘(4), (5),’’, and
(B) 
by 
redesignating 
paragraphs 
(3)
through (6) as paragraphs (4) through (7), re-
spectively, and by inserting after paragraph (2)
the following:
138
‘‘(3) If assets available for allocation under
paragraph (4) of subsection (a) are insufficient to
satisfy in full the benefits of all individuals who are
described in that paragraph, the assets shall be allo-
cated first to benefits described in subparagraph (A)
of that paragraph. Any remaining assets shall then
be allocated to benefits described in subparagraph
(B) of that paragraph. If assets allocated to such
subparagraph (B) are insufficient to satisfy in full
the benefits described in that subparagraph, the as-
sets shall be allocated pro rata among individuals on
the basis of the present value (as of the termination
date) of their respective benefits described in that
subparagraph.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 4021 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1321) is
amended—
(A) in subsection (b)(9), by striking ‘‘as
defined in section 4022(b)(6)’’, and
(B) by adding at the end the following:
‘‘(d) For purposes of subsection (b)(9), the term ‘sub-
stantial owner’ means an individual who, at any time dur-
ing the 60-month period ending on the date the determina-
tion is being made—
139
‘‘(1) owns the entire interest in an unincor-
porated trade or business,
‘‘(2) in the case of a partnership, is a partner
who owns, directly or indirectly, more than 10 per-
cent of either the capital interest or the profits inter-
est in such partnership, or
‘‘(3) in the case of a corporation, owns, directly
or indirectly, more than 10 percent in value of either
the voting stock of that corporation or all the stock
of that corporation.
For purposes of paragraph (3), the constructive ownership
rules of section 1563(e) of the Internal Revenue Code of
1986 shall apply (determined without regard to section
1563(e)(3)(C)).’’.
(2) Section 4043(c)(7) of such Act (29 U.S.C.
1343(c)(7)) is amended by striking ‘‘section 4022(b)(6)’’
and inserting ‘‘section 4021(d)’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to plan terminations—
(A) under section 4041(c) of the Employee
Retirement Income Security Act of 1974 (29
U.S.C. 1341(c)) with respect to which notices
of intent to terminate are provided under sec-
140
tion 4041(a)(2) of such Act (29 U.S.C.
1341(a)(2)) after December 31, 2000, and
(B) under section 4042 of such Act (29
U.S.C. 1342) with respect to which proceedings
are instituted by the corporation after such
date.
(2) CONFORMING AMENDMENTS.—The amend-
ments made by subsection (c) shall take effect on
the date of the enactment of this Act.
SEC. 369. MODIFICATION OF EXCLUSION FOR EMPLOYER
PROVIDED TRANSIT PASSES.
(a) IN GENERAL.—Section 132(f )(3) (relating to
cash reimbursements) is amended by striking the last sen-
tence.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 370. REPEAL OF THE MULTIPLE USE TEST.
(a) IN GENERAL.—Paragraph (9) of section 401(m)
is amended to read as follows:
‘‘(9) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary to carry
out the purposes of this subsection and subsection
(k), including regulations permitting appropriate ag-
gregation of plans and contributions.’’.
141
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to years beginning after December
31, 2000.
SEC. 371. FLEXIBILITY IN NONDISCRIMINATION, COV-
ERAGE, AND LINE OF BUSINESS RULES.
(a) NONDISCRIMINATION.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall, by regulation, provide that a plan shall be
deemed to satisfy the requirements of section
401(a)(4) of the Internal Revenue Code of 1986 if
such plan satisfies the facts and circumstances test
under section 401(a)(4) of such Code, as in effect
before January 1, 1994, but only if—
(A) the plan satisfies conditions prescribed
by the Secretary to appropriately limit the
availability of such test, and
(B) the plan is submitted to the Secretary
for a determination of whether it satisfies such
test.
Subparagraph (B) shall only apply to the extent pro-
vided by the Secretary.
(2) EFFECTIVE DATES.—
(A) REGULATIONS.—The regulation re-
quired by paragraph (1) shall apply to years be-
ginning after December 31, 2000.
142
(B) CONDITIONS OF AVAILABILITY.—Any
condition of availability prescribed by the Sec-
retary under paragraph (1)(A) shall not apply
before the first year beginning not less than
120 days after the date on which such condition
is prescribed.
(b) COVERAGE TEST.—
(1) IN GENERAL.—Section 410(b)(1) (relating
to minimum coverage requirements) is amended by
adding at the end the following:
‘‘(D) In the case that the plan fails to
meet the requirements of subparagraphs (A),
(B) and (C), the plan—
‘‘(i) satisfies subparagraph (B), as in
effect immediately before the enactment of
the Tax Reform Act of 1986,
‘‘(ii) is submitted to the Secretary for
a determination of whether it satisfies the
requirement described in clause (i), and
‘‘(iii) satisfies conditions prescribed by
the Secretary by regulation that appro-
priately limit the availability of this sub-
paragraph.
Clause (ii) shall apply only to the extent pro-
vided by the Secretary.’’.
143
(2) EFFECTIVE DATES.—
(A) IN GENERAL.—The amendment made
by paragraph (1) shall apply to years beginning
after December 31, 2000.
(B) CONDITIONS OF AVAILABILITY.—Any
condition of availability prescribed by the Sec-
retary under regulations prescribed by the Sec-
retary under section 410(b)(1)(D) of the Inter-
nal Revenue Code of 1986 shall not apply be-
fore the first year beginning not less than 120
days after the date on which such condition is
prescribed.
(c) LINE OF BUSINESS RULES.—The Secretary of
the Treasury shall, on or before December 31, 2000, mod-
ify the existing regulations issued under section 414(r) of
the Internal Revenue Code of 1986 in order to expand
(to the extent that the Secretary determines appropriate)
the ability of a pension plan to demonstrate compliance
with the line of business requirements based upon the
facts and circumstances surrounding the design and oper-
ation of the plan, even though the plan is unable to satisfy
the mechanical tests currently used to determine compli-
ance.
144
SEC. 372. EXTENSION TO INTERNATIONAL ORGANIZATIONS
OF MORATORIUM ON APPLICATION OF CER-
TAIN NONDISCRIMINATION RULES APPLICA-
BLE TO STATE AND LOCAL PLANS.
(a) IN GENERAL.—Subparagraph (G) of section
401(a)(5), subparagraph (H) of section 401(a)(26), sub-
paragraph (G) of section 401(k)(3), and paragraph (2) of
section 1505(d) of the Taxpayer Relief Act of 1997 are
each amended by inserting ‘‘or by an international organi-
zation which is described in section 414(d)’’ after ‘‘or in-
strumentality thereof)’’.
(b) CONFORMING AMENDMENTS.—
(1) The headings for subparagraph (G) of sec-
tion 401(a)(5) and subparagraph (H) of section
401(a)(26) are each amended by inserting ‘‘AND
INTERNATIONAL
ORGANIZATION’’ after ‘‘GOVERN-
MENTAL’’.
(2) Subparagraph (G) of section 401(k)(3) is
amended by inserting ‘‘STATE AND LOCAL GOVERN-
MENTAL
AND
INTERNATIONAL
ORGANIZATION
PLANS.—’’ after ‘‘(G)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to years beginning after December
31, 2000.
145
SEC. 373. NOTICE AND CONSENT PERIOD REGARDING DIS-
TRIBUTIONS.
(a) EXPANSION OF PERIOD.—
(1) IN GENERAL.—Subparagraph (A) of section
205(c)(7) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1055) is amended by
striking ‘‘90-day’’ and inserting ‘‘180-day’’.
(2) MODIFICATION
OF
REGULATIONS.—The
Secretary of the Treasury shall modify the regula-
tions of such Secretary under part 2 of subtitle B
of title I of the Employee Retirement Income Secu-
rity Act of 1974 to the extent that they relate to
sections 203(e) and 205 of such Act to substitute
‘‘180 days’’ for ‘‘90 days’’ each place it appears.
(3) EFFECTIVE DATE.—The amendments made
by paragraph (1) and the modifications required by
paragraph (2) shall apply to years beginning after
December 31, 2000.
(b) CONSENT REGULATION INAPPLICABLE TO CER-
TAIN DISTRIBUTIONS.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall modify the regulations under section 205
of the Employee Retirement Income Security Act of
1974 to provide that the description of a partici-
pant’s right, if any, to defer receipt of a distribution
146
shall also describe the consequences of failing to
defer such receipt.
(2) EFFECTIVE DATE.—The modifications re-
quired by paragraph (1) shall apply to years begin-
ning after December 31, 2000.
SEC. 374. ANNUAL REPORT DISSEMINATION.
(a) IN GENERAL.—Section 104(b)(3) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1024(b)(3)) is amended by striking ‘‘shall furnish’’
and inserting ‘‘shall make available for examination (and,
upon request, shall furnish)’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to reports for years beginning after
December 31, 1998.
SEC. 375. EXCESS BENEFIT PLANS.
(a) IN GENERAL.—Section 3(36) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(36)) is amended to read as follows:
‘‘(36) The term ‘excess benefit plan’ means a plan,
without regard to whether such plan is funded, maintained
by an employer solely for the purpose of providing benefits
to employees in excess of any limitation imposed by section
401(a)(17) or 415 of the Internal Revenue Code of 1986
or any other limitation on contributions or benefits in such
Code on plans to which any of such sections apply. To
147
the extent that a separable part of a plan (as determined
by the Secretary of Labor) maintained by an employer is
maintained for such purpose, that part shall be treated
as a separate plan which is an excess benefit plan.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to years beginning after December
31, 1999.
SEC. 376. BENEFIT SUSPENSION NOTICE.
(a) MODIFICATION OF REGULATION.—The Secretary
of Labor shall modify the regulation under section
203(a)(3)(B) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1053(a)(3)(B)) to provide
that, except in the case of employment, subsequent to the
commencement of payment of benefits, with a former em-
ployer, the notification required by such regulation—
(1) may be included in the summary plan de-
scription for the plan furnished in accordance with
section 104(b) of such Act (29 U.S.C. 1024(b)),
rather than in a separate notice, and
(2) need not include a copy of the relevant plan
provisions.
(c) EFFECTIVE
DATE.—The modification made
under this section shall apply to plan years beginning after
December 31, 1999.
148
SEC. 377. CLARIFICATION OF CHURCH WELFARE PLAN STA-
TUS UNDER STATE INSURANCE LAW.
For purposes of determining the status under State
insurance law of a church plan (as defined in section
414(e) of the Internal Revenue Code and section 3(33)
of the Employee Retirement Income Security Act that is
a welfare plan (as defined in section 3(1)), such church
plan (and any trust under such plan) shall be deemed a
single-employer plan that—
(1) reimburses costs from general church as-
sets;
(2) purchases insurance coverage with general
church assets; or
(3) both.
For purposes of this paragraph, the term ‘‘reimbursing
costs from general church assets’’ means engaging in a
practice that does not have the effect of transferring or
spreading risk. The scope of this paragraph is limited to
determining the status of a church welfare plan under
State insurance law, and does not otherwise recharacter-
ized the status, or modify or affect the rights, of any plan
participant, including those who make plan contributions.
Subtitle F—Plan Amendments
SEC. 381. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) IN GENERAL.—If this section applies to any plan
or contract amendment—
149
(1) such plan or contract shall be treated as
being operated in accordance with the terms of the
plan during the period described in subsection
(b)(2)(A), and
(2) such plan shall not fail to meet the require-
ments of section 411(d)(6) of the Internal Revenue
Code of 1986 by reason of such amendment.
(b) AMENDMENTS TO WHICH SECTION APPLIES.—
(1) IN GENERAL.—This section shall apply to
any amendment to any plan or annuity contract
which is made—
(A) pursuant to any amendment made by
this title, or pursuant to any regulation issued
under this title, and
(B) on or before the last day of the first
plan year beginning on or after January 1,
2003.
In the case of a government plan (as defined in sec-
tion 414(d) of the Internal Revenue Code of 1986),
this paragraph shall be applied by substituting
‘‘2005’’ for ‘‘2003’’.
(2) CONDITIONS.—This section shall not apply
to any amendment unless—
(A) during the period—
150
(i) beginning on the date the legisla-
tive or regulatory amendment described in
paragraph (1)(A) takes effect (or in the
case of a plan or contract amendment not
required by such legislative or regulatory
amendment, the effective date specified by
the plan), and
(ii) ending on the date described in
paragraph (1)(B) (or, if earlier, the date
the plan or contract amendment is adopt-
ed),
the plan or contract is operated as if such plan
or contract amendment were in effect, and
(B) such plan or contract amendment ap-
plies retroactively for such period.
TITLE IV—EXTENSION OF WORK
OPPORTUNITY CREDIT AND
WELFARE-TO-WORK CREDIT
SEC. 401. WORK OPPORTUNITY CREDIT AND WELFARE-TO-
WORK CREDIT.
(a) TEMPORARY EXTENSION.—Sections 51(c)(4)(B)
and 51A(f ) (relating to termination) are each amended
by striking ‘‘June 30, 1999’’ and inserting ‘‘December 31,
2001’’.