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‘‘(i) in the case of a single-employer
plan, the minimum required contribution
under section 303 for the plan year shall be
reduced by the amount of the waived fund-
ing deficiency and such amount shall be
amortized as required under section 303(e),
and
‘‘(ii) in the case of a multiemployer
plan, the funding standard account shall be
credited under section 304(b)(3)(C) with the
amount of the waived funding deficiency
and such amount shall be amortized as re-
quired under section 304(b)(2)(C).
‘‘(C) WAIVER OF AMORTIZED PORTION NOT
ALLOWED.—The Secretary of the Treasury may
not waive under subparagraph (A) any portion
of the minimum funding standard under sub-
section (a) for a plan year which is attributable
to any waived funding deficiency for any pre-
ceding plan year.
‘‘(2) DETERMINATION
OF
BUSINESS
HARD-
SHIP.—For purposes of this subsection, the factors
taken into account in determining temporary sub-
stantial business hardship (substantial business hard-
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ship in the case of a multiemployer plan) shall in-
clude (but shall not be limited to) whether or not—
‘‘(A) the employer is operating at an eco-
nomic loss,
‘‘(B) there is substantial unemployment or
underemployment in the trade or business and
in the industry concerned,
‘‘(C) the sales and profits of the industry
concerned are depressed or declining, and
‘‘(D) it is reasonable to expect that the plan
will be continued only if the waiver is granted.
‘‘(3) WAIVED FUNDING DEFICIENCY.—For pur-
poses of this part, the term ‘waived funding defi-
ciency’ means the portion of the minimum funding
standard under subsection (a) (determined without
regard to the waiver) for a plan year waived by the
Secretary of the Treasury and not satisfied by em-
ployer contributions.
‘‘(4) SECURITY FOR WAIVERS FOR SINGLE-EM-
PLOYER PLANS, CONSULTATIONS.—
‘‘(A) SECURITY MAY BE REQUIRED.—
‘‘(i) IN GENERAL.—Except as provided
in subparagraph (C), the Secretary of the
Treasury may require an employer main-
taining a defined benefit plan which is a
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single-employer plan (within the meaning
of section 4001(a)(15)) to provide security
to such plan as a condition for granting or
modifying a waiver under paragraph (1).
‘‘(ii) SPECIAL
RULES.—Any security
provided under clause (i) may be perfected
and enforced only by the Pension Benefit
Guaranty Corporation, or, at the direction
of the Corporation, by a contributing spon-
sor 
(within 
the 
meaning 
of 
section
4001(a)(13)) or a member of such sponsor’s
controlled group (within the meaning of sec-
tion 4001(a)(14)).
‘‘(B) CONSULTATION
WITH
THE
PENSION
BENEFIT
GUARANTY
CORPORATION.—Except as
provided in subparagraph (C), the Secretary of
the Treasury shall, before granting or modifying
a waiver under this subsection with respect to a
plan described in subparagraph (A)(i)—
‘‘(i) provide the Pension Benefit Guar-
anty Corporation with—
‘‘(I) notice of the completed appli-
cation for any waiver or modification,
and
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‘‘(II) an opportunity to comment
on such application within 30 days
after receipt of such notice, and
‘‘(ii) consider—
‘‘(I) any comments of the Cor-
poration under clause (i)(II), and
‘‘(II) any views of any employee
organization (within the meaning of
section 3(4)) representing participants
in the plan which are submitted in
writing to the Secretary of the Treas-
ury in connection with such applica-
tion.
Information provided to the Corporation under
this subparagraph shall be considered tax return
information and subject to the safeguarding and
reporting requirements of section 6103(p) of the
Internal Revenue Code of 1986.
‘‘(C) EXCEPTION FOR CERTAIN WAIVERS.—
‘‘(i) IN GENERAL.—The preceding pro-
visions of this paragraph shall not apply to
any plan with respect to which the sum
of—
‘‘(I) the aggregate unpaid min-
imum required contributions for the
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plan year and all preceding plan
years, and
‘‘(II) the present value of all
waiver amortization installments de-
termined for the plan year and suc-
ceeding plan years under section
303(e)(2),
is less than $1,000,000.
‘‘(ii) TREATMENT
OF
WAIVERS
FOR
WHICH APPLICATIONS ARE PENDING.—The
amount described in clause (i)(I) shall in-
clude any increase in such amount which
would result if all applications for waivers
of the minimum funding standard under
this subsection which are pending with re-
spect to such plan were denied.
‘‘(iii) UNPAID
MINIMUM
REQUIRED
CONTRIBUTION.—For 
purposes 
of 
this
subparagraph—
‘‘(I) IN GENERAL.—The term ‘un-
paid minimum required contribution’
means, with respect to any plan year,
any minimum required contribution
under section 303 for the plan year
which is not paid on or before the due
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date (as determined under section
303(j)(1)) for the plan year.
‘‘(II) ORDERING RULE.—For pur-
poses of subclause (I), any payment to
or under a plan for any plan year
shall be allocated first to unpaid min-
imum required contributions for all
preceding plan years on a first-in,
first-out basis and then to the min-
imum required contribution under sec-
tion 303 for the plan year.
‘‘(5) SPECIAL
RULES
FOR
SINGLE-EMPLOYER
PLANS.—
‘‘(A) APPLICATION
MUST
BE
SUBMITTED
BEFORE
DATE
21⁄2
MONTHS
AFTER
CLOSE
OF
YEAR.—In the case of a single-employer plan, no
waiver may be granted under this subsection
with respect to any plan for any plan year un-
less an application therefor is submitted to the
Secretary of the Treasury not later than the 15th
day of the 3rd month beginning after the close of
such plan year.
‘‘(B) SPECIAL RULE IF EMPLOYER IS MEM-
BER OF CONTROLLED GROUP.—In the case of a
single-employer plan, if an employer is a mem-
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ber of a controlled group, the temporary substan-
tial business hardship requirements of paragraph
(1) shall be treated as met only if such require-
ments are met—
‘‘(i) with respect to such employer, and
‘‘(ii) with respect to the controlled
group of which such employer is a member
(determined by treating all members of such
group as a single employer).
The Secretary of the Treasury may provide that
an analysis of a trade or business or industry of
a member need not be conducted if the Secretary
of the Treasury determines such analysis is not
necessary because the taking into account of such
member would not significantly affect the deter-
mination under this paragraph.
‘‘(6) ADVANCE NOTICE.—
‘‘(A) IN
GENERAL.—The Secretary of the
Treasury shall, before granting a waiver under
this subsection, require each applicant to provide
evidence satisfactory to such Secretary that the
applicant has provided notice of the filing of the
application for such waiver to each affected
party (as defined in section 4001(a)(21)) other
than the Pension Benefit Guaranty Corporation
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and in the case of a multiemployer plan, to each
employer required to contribute to the plan
under subsection (b)(1). Such notice shall include
a description of the extent to which the plan is
funded for benefits which are guaranteed under
title IV and for benefit liabilities.
‘‘(B) CONSIDERATION OF RELEVANT INFOR-
MATION.—The Secretary of the Treasury shall
consider any relevant information provided by a
person to whom notice was given under subpara-
graph (A).
‘‘(7) RESTRICTION ON PLAN AMENDMENTS.—
‘‘(A) IN
GENERAL.—No amendment of a
plan which increases the liabilities of the plan by
reason of any increase in benefits, any change in
the accrual of benefits, or any change in the rate
at which benefits become nonforfeitable under the
plan shall be adopted if a waiver under this sub-
section or an extension of time under section
304(d) is in effect with respect to the plan, or if
a plan amendment described in subsection (d)(2)
has been made at any time in the preceding 24
months. If a plan is amended in violation of the
preceding sentence, any such waiver, or extension
of time, shall not apply to any plan year ending
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on or after the date on which such amendment
is adopted.
‘‘(B) EXCEPTION.—Subparagraph (A) shall
not apply to any plan amendment which—
‘‘(i) the Secretary of the Treasury de-
termines to be reasonable and which pro-
vides for only de minimis increases in the
liabilities of the plan,
‘‘(ii) only repeals an amendment de-
scribed in subsection (d)(2), or
‘‘(iii) is required as a condition of
qualification under part I of subchapter D,
of chapter 1 of the Internal Revenue Code of
1986.
‘‘(8) CROSS
REFERENCE.—For corresponding
duties of the Secretary of the Treasury with regard to
implementation of the Internal Revenue Code of 1986,
see section 412(d) of such Code.
‘‘(d) MISCELLANEOUS RULES.—
‘‘(1) CHANGE IN METHOD OR YEAR.—If the fund-
ing method, the valuation date, or a plan year for a
plan is changed, the change shall take effect only if
approved by the Secretary of the Treasury.
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‘‘(2) 
CERTAIN
RETROACTIVE
PLAN
AMEND-
MENTS.—For purposes of this section, any amend-
ment applying to a plan year which—
‘‘(A) is adopted after the close of such plan
year but no later than 21⁄2 months after the close
of the plan year (or, in the case of a multiem-
ployer plan, no later than 2 years after the close
of such plan year),
‘‘(B) does not reduce the accrued benefit of
any participant determined as of the beginning
of the first plan year to which the amendment
applies, and
‘‘(C) does not reduce the accrued benefit of
any participant determined as of the time of
adoption except to the extent required by the cir-
cumstances,
shall, at the election of the plan administrator, be
deemed to have been made on the first day of such
plan year. No amendment described in this para-
graph which reduces the accrued benefits of any par-
ticipant shall take effect unless the plan adminis-
trator files a notice with the Secretary of the Treas-
ury notifying him of such amendment and such Sec-
retary has approved such amendment, or within 90
days after the date on which such notice was filed,
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failed to disapprove such amendment. No amendment
described in this subsection shall be approved by the
Secretary of the Treasury unless such Secretary deter-
mines that such amendment is necessary because of a
temporary substantial business hardship (as deter-
mined under subsection (c)(2)) or a substantial busi-
ness hardship (as so determined) in the case of a mul-
tiemployer plan and that a waiver under subsection
(c) (or, in the case of a multiemployer plan, any ex-
tension of the amortization period under section
304(d)) is unavailable or inadequate.
‘‘(3) CONTROLLED GROUP.—For purposes of this
section, the term ‘controlled group’ means any group
treated as a single employer under subsection (b), (c),
(m), or (o) of section 414 of the Internal Revenue
Code of 1986.’’.
(c) CLERICAL AMENDMENT.—The table of contents in
section 1 of such Act is amended by striking the items relat-
ing to sections 302 through 308 and inserting the following
new item:
‘‘Sec. 302. Minimum funding standards.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after 2006.
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SEC. 102. FUNDING RULES FOR SINGLE-EMPLOYER DE-
FINED BENEFIT PENSION PLANS.
(a) IN GENERAL.—Part 3 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974 (as
amended by section 101 of this Act) is amended by inserting
after section 302 the following new section:
‘‘MINIMUM FUNDING STANDARDS FOR SINGLE-EMPLOYER
DEFINED BENEFIT PENSION PLANS
‘‘SEC. 303. (a) MINIMUM REQUIRED CONTRIBUTION.—
For purposes of this section and section 302(a)(2)(A), except
as provided in subsection (f), the term ‘minimum required
contribution’ means, with respect to any plan year of a de-
fined benefit plan which is a single employer plan—
‘‘(1) in any case in which the value of plan as-
sets of the plan (as reduced under subsection (f)(4))
is less than the funding target of the plan for the plan
year, the sum of—
‘‘(A) the target normal cost of the plan for
the plan year,
‘‘(B) the shortfall amortization charge (if
any) for the plan for the plan year determined
under subsection (c), and
‘‘(C) the waiver amortization charge (if
any) for the plan for the plan year as deter-
mined under subsection (e); or
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‘‘(2) in any case in which the value of plan as-
sets of the plan (as reduced under subsection (f)(4))
equals or exceeds the funding target of the plan for the
plan year, the target normal cost of the plan for the
plan year reduced (but not below zero) by any such
excess.
‘‘(b) TARGET NORMAL COST.—For purposes of this
section, except as provided in subsection (i)(2) with respect
to plans in at-risk status, the term ‘target normal cost’
means, for any plan year, the present value of all benefits
which are expected to accrue or to be earned under the plan
during the plan year. For purposes of this subsection, if
any benefit attributable to services performed in a preceding
plan year is increased by reason of any increase in com-
pensation during the current plan year, the increase in such
benefit shall be treated as having accrued during the current
plan year.
‘‘(c) SHORTFALL AMORTIZATION CHARGE.—
‘‘(1) IN GENERAL.—For purposes of this section,
the shortfall amortization charge for a plan for any
plan year is the aggregate total of the shortfall amor-
tization installments for such plan year with respect
to the shortfall amortization bases for such plan year
and each of the 6 preceding plan years.
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‘‘(2) 
SHORTFALL
AMORTIZATION
INSTALL-
MENT.—For purposes of paragraph (1)—
‘‘(A) DETERMINATION.—The shortfall amor-
tization installments are the amounts necessary
to amortize the shortfall amortization base of the
plan for any plan year in level annual install-
ments over the 7-plan-year period beginning
with such plan year.
‘‘(B) 
SHORTFALL
INSTALLMENT.—The
shortfall amortization installment for any plan
year in the 7-plan-year period under subpara-
graph (A) with respect to any shortfall amortiza-
tion base is the annual installment determined
under subparagraph (A) for that year for that
base.
‘‘(C) SEGMENT
RATES.—In determining
any shortfall amortization installment under
this paragraph, the plan sponsor shall use the
segment rates determined under subparagraph
(C) of subsection (h)(2), applied under rules
similar to the rules of subparagraph (B) of sub-
section (h)(2).
‘‘(3) SHORTFALL
AMORTIZATION
BASE.—For
purposes of this section, the shortfall amortization
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base of a plan for a plan year is the excess (if any)
of—
‘‘(A) the funding shortfall of such plan for
such plan year, over
‘‘(B) the present value (determined using
the segment rates determined under subpara-
graph (C) of subsection (h)(2), applied under
rules similar to the rules of subparagraph (B) of
subsection (h)(2)) of the aggregate total of the
shortfall amortization installments and waiver
amortization installments which have been deter-
mined for such plan year and any succeeding
plan year with respect to the shortfall amortiza-
tion bases and waiver amortization bases of the
plan for any plan year preceding such plan
year.
‘‘(4) FUNDING SHORTFALL.—
‘‘(A) IN
GENERAL.—For purposes of this
section, except as provided in subparagraph (B),
the funding shortfall of a plan for any plan year
is the excess (if any) of—
‘‘(i) the funding target of the plan for
the plan year, over
‘‘(ii) the value of plan assets of the
plan (as reduced under subsection (f)(4)) for
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the plan year which are held by the plan on
the valuation date.
‘‘(B) TRANSITION RULE FOR AMORTIZATION
OF FUNDING SHORTFALL.—
‘‘(i) IN GENERAL.—Solely for purposes
of applying paragraph (3) in the case of
plan years beginning after 2006 and before
2011, only the applicable percentage of the
funding target shall be taken into account
under paragraph (3)(A) in determining the
funding shortfall for the plan year.
‘‘(ii) APPLICABLE PERCENTAGE.—For
purposes of subparagraph (A)—
‘‘(I) IN GENERAL.—Except as pro-
vided in subclause (II), the applicable
percentage shall be 93 percent for plan
years beginning in 2007, 96 percent
for plan years beginning in 2008, and
100 percent for any succeeding plan
year.
‘‘(II) SMALL PLANS.—In the case
of a plan described in subsection
(g)(2)(B), the applicable percentage
shall be determined in accordance with
the following table:
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‘‘In the case of a plan year
The applicable
beginning in calendar year:
percentage is—
2007 ................................................................................................
2008 ................................................................................................
2009 ................................................................................................
2010 ................................................................................................
98.
‘‘(5) EARLY DEEMED AMORTIZATION UPON AT-
TAINMENT
OF
FUNDING
TARGET.—In any case in
which the funding shortfall of a plan for a plan year
is zero, for purposes of determining the shortfall am-
ortization charge for such plan year and succeeding
plan years, the shortfall amortization bases for all
preceding plan years (and all shortfall amortization
installments determined with respect to such bases)
shall be reduced to zero.
‘‘(d) RULES RELATING TO FUNDING TARGET.—For
purposes of this section—
‘‘(1) FUNDING TARGET.—Except as provided in
subsection (i)(1) with respect to plans in at-risk sta-
tus, the funding target of a plan for a plan year is
the present value of all benefits accrued or earned
under the plan as of the beginning of the plan year.
‘‘(2) FUNDING
TARGET
ATTAINMENT
PERCENT-
AGE.—The ‘funding target attainment percentage’ of
a plan for a plan year is the ratio (expressed as a
percentage) which—
‘‘(A) the value of plan assets for the plan
year, bears to