An act to amend the Internal Revenue Code of 1954 with respect to the tax treatment of periodic payments for damages received on account of personal injury or sickness, and for other purposes.
PL 97-473 (H.R.5470), enacted 01/14/1983

PUBLIC LAW 97-473—JAN. 14, 1983 
96 STAT. 2605 
Public Law 97-473 
97th Congress 
An Act 
To amend the Internal Revenue Code of 1954 with respect to the tax treatment of 
periodic payments for damages received on account of personal injury or sickness, 
and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. AMENDMENT OF 1954 CODE. 
Whenever in title I or II an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1954. 
TITLE I—INCOME TAX PROVISIONS 
Jan. 14,1983 
[H.R. 5470] 
Dcunages for 
personal injury 
or sickness, tax 
treatment of 
periodic 
pajonents. 
26 use 1 et seq. 
SEC. 101. TREATMENT 
OF RECIPIENT 
OF SETTLEMENT 
PERIODIC 
PAYMENTS. 
(a) TREATMENT OF RECIPIENT.—Paragraph (2) of section 104(a) 
(relating to compensation for injuries or sickness) is amended by 
striking out "whether by suit or agreement" and inserting in lieu 
thereof "whether by suit or agreement and whether as lump sums 
or as periodic pajnnents". 
(b) TREATMENT OF ASSIGNEE-PAYOR.— 
(1) IN GENERAL.—Part III of subchapter B of chapter 1 (relat-
ing to items specifically excluded from gross income) is amended 
by redesignating section 130 as section 131 and by inserting 
after section 129 the following new section: 
"SEC. 130. CERTAIN PERSONAL INJURY LIABILITY ASSIGNMENTS. 
"(a) IN GENERAL.—Any amount received for agreeing to a quali-
fied assignment shall not be included in gross income to the extent 
that such amount does not exceed the aggregate cost of any qualified 
funding assets. 
"(b) TREATMENT OP QUAUFIED FUNDING ASSET.—In the case of any 
qualified funding asset— 
"(1) the basis of such asset shall be reduced by the amount 
excluded from gross income under subsection (a) by reason of 
the purchase of such asset, and 
"(2) any gain recognized on a disposition of such asset shall be 
treated as ordinary income. 
"(c) QUAUFIED ASSIGNMENT.—For purposes of this section, the 
term 'qualified assignment' means any assignment of a liability to 
make periodic payments as damages (whether by suit or agreement) 
on account of personal injury or sickness— 
"(1) if the assignee assumes such liability from a person who 
is a party to the suit or agreement, and 
"(2) if— 
26 use 104. 
26 use 131. 
26 use 130. 
96 STAT. 2606 
PUBLIC LAW 97-473—JAN. 14, 1983 
"(A) such periodic pa3aiients are fixed and determinable 
as to amount and time of pa3mient, 
"(B) such periodic payments cannot be accelerated, 
deferred, increased, or decreased by the recipient of such 
payments, 
(C) the assignee does not provide to the recipient of such 
payments rights against the assignee which are greater 
than those of a general creditor, 
"(D) the assignee's obligation on account of the personal 
injuries or siclmess is no greater than the obligation of the 
person who assigned the liability, and 
"(E) such periodic payments are excludable from the 
gross income of the recipient under section 104(aX2). 
"(d) QUALIFIED FUNDING ASSET.—For purposes of this section, the 
term 'quedified funding asset' means any annuity contract issued by 
a company licensed to do business as an insurance company under 
the laws of any State, or any obligation of the United States, if— 
"(1) such annuity contract or obligation is used by the 
assignee to fund periodic payments under any qualified 
assignment, 
"(2) the periods of the pajmients under the annuity contract 
or obligation are reasonably related to the periodic payments 
under the qualified assignment, and the amount of any such 
payment under the contract or obligation does not exceed the 
periodic pa5ntnent to which it relates, 
"(3) such annuity contract or obligation is designated by the 
taxpayer (in such manner as the Secretary shall by regulations 
prescribe) as being taken into account under this section with 
resjpect to such qualified assignment, and 
(4) such annuity contract or obligation is purchased by the 
taxpayer not more than 60 days before the date of the qualified 
assignment and not later than 60 days sifter the date of such 
assignment." 
(2) CONFORMING AMENDMENT.—The table of sections for part 
III of subchapter B of chapter 1 is amended by striking out the 
item relating to section 130 and inserting in lieu thereof the 
following new items: 
"Sec. 130. Certain personal injury liability assignments. 
"Sec. 131. Cross references to other Acts. 
26 use 130 note. 
(c) EFFECTIVE DATE.—The amendments made by this section shall 
apply to taxable years ending after December 31,1982. 
SEC. 102. EXCLUSION FROM GROSS INCOME FOR CERTAIN FOSTER CARE 
PAYMENTS. 
(a) IN GENERAL.—Part III of subchapter B of chapter 1 (relating to 
items specifically excluded from gross income), as amended by sec-
Ante, p. 2605. 
tion 101(b), is amended by redesignating section 131 as section 132 
26 use 132. 
and by inserting after section 130 the following new section: 
26 use 131. 
"SEC. 131. CERTAIN FOSTER CARE PAYMENTS. 
"(a) GENERAL RULE.—Gross income shall not include amounts 
received by a foster parent during the taxable year as qualified 
foster care payments. 
"(b) QUAUFIED FOSTER CARE PAYMENT DEFINED.—For purposes of 
this section— 
"(1) IN GENERAL.—The term 'qualified foster care payment' 
means any amount— 
PUBLIC LAW 97-473—JAN. 14, 1983 
96 STAT. 2607 
"(A) which is paid by a State or political subdivision 
thereof or by a child-placing agency which is described in 
section 501(cX3) and exempt from tax under section 501(a), 
and 
"(B) which is— 
"(i) paid to reimburse the foster parent for the 
expenses of caring for a qualified foster child in the 
foster parent's home, or 
"(ii) a difficulty of care payment. 
"(2) QUALIFIED FOSTER CHILD.—The term 'qualified foster 
child' means any individual who— 
"(A) has not attained age 19, and 
"(B) is living in a foster family home in which such 
individual was placed by— 
"(i) an agency of a State or political subdivision 
thereof, or 
"(ii) an organization which is licensed by a State (or 
political subdivision thereof) as a child-placing agency 
and which is described in section 501(cX3) and exempt 
from tax under section 501(a). 
"(c) DIFFICULTY OF CARE 
PAYMENTS.—For purposes of this 
section— 
"(1) DIFFICULTY OF CARE PAYMENTS.—The term 'difficulty of 
care payments' means payments to individuals which are not 
described in subsection ObXlXBXi), and which— 
"(A) are compensation for providing the additional care of 
a qualified foster child which is— 
"(i) required by reason of a physical, mental, or 
emotional handicap of such child with respect to which 
the State has determined that there is a need for 
additional compensation, and 
"(ii) provided in the home of the foster parent, and 
"(B) are designated by the payor as compensation 
described in subparagraph (A). 
"(2) LiMrrATioN BASED ON NUMBER OF CHILDREN.—In the case 
of any foster home, difficulty of care payments for any period to 
which such payments relate shall not be excludable from gross 
income under subsection (a) to the extent svich pajnnents are 
made for more than 10 qualified foster children." 
(b) CLERICAL AMENDMENT.—The table of sections for part III of 
subchapter B of chapter 1 is amended by striking out the item 
relating to section 131 and by inserting in lieu thereof the following 
items: 
"Sec. 131. Certain foster care payments. 
"Sec. 132. Cross references to other Acts." 
(c) EFFECTIVE DATE.—The amendments made by this section shall 
26 USC131 note, 
apply to taxable years beginning after December 31,1978. 
Indian Tribal 
Governmental Tax 
TITLE II—TAX STATUS OF INDIAN TRIBAL 
GOVERNMENTS 
f^^'"^''' 
SEC. 201. SHORT TITLE. 
26 USC 1 note. 
This title may be cited as the "Indian Tribal Governmental Tax 
Status Act of 1982". 
96 STAT. 2608 
PUBLIC LAW 97-473—JAN. 14, 1983 
SEC. 202. INDIAN TRIBAL GOVERNMENTS TREATED AS STATES FOR CER-
TAIN PURPOSES. 
(a) GENERAL RULE.—Chapter 80 (relating to general rules) is 
amended by adding at the end thereof the following new subchapter: 
''Subchapter C—Provisions Affecting More than One Subtitle 
"Sec. 7871. Indian tribal governments treated as States for certain purposes. 
26 use 7871. 
"SEC. 787L INDIAN TRIBAL GOVERNMENTS TREATED AS STATES FOR CER-
TAIN PURPOSES. 
"(a) GENERAL RULE.—An Indian tribal government shall be 
treated as a State— 
"(1) for purposes of determining whether and in what amount 
any contribution or transfer to or for the use of such govern-
ment (or a political subdivision thereof) is deductible under— 
"(A) section 170 (relating to income tax deduction for 
charitable, etc., contributions and gifts), 
"(B) sections 2055 and 2106(aX2) (relating to estate tax 
deduction for transfers of public, charitable, and religious 
uses), or 
"(C) section 2522 (relating to gift tax deduction for chari-
table and similar gifts); 
"(2) subject to subsection (b), for purposes of any exemption 
from, credit or refund of, or pa3mient with respect to, an excise 
tax imposed by— 
26 use 4041 et 
*'(A) chapter 31 (relating to tax on special fuels), 
**9- 
"(B) chapter 32 (relating to manufacturers excise taxes), 
26 use 4061 et 
« ( Q subchapter B of chapter 33 (relating to communica-
2?usc 4251 
*^°"^ excise tax), or 
26 use 4481. 
"(^) subchapter D of chapter 36 (relating to tax on use of 
certain highway vehicles); 
"(3) for purposes of section 164 (relating to deduction for 
taxes); 
"(4) subject to subsection (c), for purposes of section 103 
(relating to interest on certain governmental obligations); 
"(5) for purposes of section 511(aX2XB) (relating to the tax-
ation of colleges and universities which are agencies or instru-
mentalities of governments or their political subdivisions); 
"(6) for purposes of— 
"(A) section 37(eX9XA) (relating to certain public retire-
ment systems), 
"(B) section 41(cX4) (defining State for purposes of credit 
for contribution to candidates for public offices), 
"(C) section 117(bX2XA) (relating to scholarships and fel-
lowship grants), and 
"(D) section 403(bXlXAXii) (relating to the taxation of 
contributions of certain employers for employee annuities); 
and 
"(7) for purposes of— 
26 use 4911 et 
"(A) chapter 41 (relating to tax on excess expenditures to 
**9- 
influence legislation), and 
26 use 4940. 
"(B) subchapter A of chapter 42 (relating to private 
foundations). 
"(b) ADDITIGNAL REQUIREMENTS FOR EXCISE TAX EXEMPTIONS.— 
Paragraph (2) of subsection (a) shall apply with respect to any 
transaction only if, in addition to any other requirement of this title 
PUBLIC LAW 97-473—JAN. 14, 1983 
96 STAT. 2609 
applicable to similar transactions involving a State or political 
subdivision thereof, the transaction involves the exercise of an 
essential governmentEil function of the Indian tribal government. 
"(c) ADDITIONAL REQUIREMENTS FOR TAX-EXEMPT BONDS.— 
"(1) IN GENERAL.—Subsection (a) of section 103 shall apply to 
any obligation (not described in paragraph (2)) issued by an 
Indian tribal government (or subdivision thereof) only if such 
obligation is part of an issue substantially all of the proceeds of 
which are to be used in the exercise of any essential governmen-
tal function. 
"(2) N o EXEMPTION FOR CERTAIN PRIVATE-ACTIVrrY BONDS.— 
Subsection (a) of section 103 shall not apply to any of the 
following issued by an Indian tribal government (or subdivision 
thereof): 
"(A) An industrial development bond (as defined in sec-
tion 103(b)(2)). 
"(B) An obligation described in section 103(1X1XA) (relat-
ing to scholarship bonds). 
"(C) A mortgage subsidy bond (as defined in paragraph (1) 
of section 103A(b) without regard to paragraph (2) thereof). 
"(d) TREATMENT OF SUBDIVISIONS OF INDIAN TRIBAL GOVERNMENTS 
A
S POLITICAL SUBDIVISIONS.—For the purposes specified in subsec-
tion (a), a subdivision of an Indian tribal government shall be 
treated as a political subdivision of a State if (and only if) the 
Secretary determines (after consultation with the Secretary of the 
Interior) that such subdivision has been delegated the right to 
exercise one or more of the substantial governmental functions of 
the Indian tribal government." 
(b) CONFORMING AMENDMENTS RELATING TO CROSS REFERENCES.— 
(1) Subsection (d) of section 41 is amended to read as follows: 26 use 41. 
"(d) CROSS REFERENCES.— 
"(1) For disallowance of credits to estates and trusts, see section 
642(a)(2). 
"(2) For treatment of Indian tribal governments as States (and the 
political subdivisions of Indian tribal governments as political subdivi-
sions of States), see section 7871." 
(2) Subsection (m) of section 103 is amended to read as follows: 26 use 103. 
"(m) CROSS REFERENCES.— 
"For provisions relating to the taxable status of— 
"(1) Certain obligations issued by Indian tribal governments (or their 
subdivisions), see section 7871. 
"(2) Exempt interest dividends of regulated investment companies, see 
section 852(b)(5)(B). 
"(3) Puerto Rican bonds, see section 3 of the Act of March 2, 1917, as 
amended (48 U.S.C. 745). 
"(4) Virgin Islands insular and municipal bonds, see section 1 of the Act 
of October 27, 1919 (48 U.S.C. 1403). 
"(5) Certain obligations issued under title I of the Housing Act of 1949, 
see section 102(g) of title I of such Act (42 U.S.C. 1452(g))." 
(3) Section 164(f) is amended by adding at the end thereof the 26 use 164. 
following new paragraph. 
"(3) For treatment of taxes imposed by Indian tribal governments (or 
their subdivisions), see section 7871." 
(4) Section 170(k) is amended by adding at the end thereof the 26 use 170. 
following new paragraph: 
96 STAT. 2610 
PUBLIC LAW 97-473—JAN. 14, 1983 
**(8) For charitable contributions to or for the use of Indian tribal gov-
ernments (or their subdivisions), see section 7871." 
26 use 2055. 
(5) Section 2055(f) is amended by adding at the end thereof the 
following new paragraph: 
"(11) For treatment of gifts and bequests to or for the use of Indian 
tribal governments (or their subdivisions), see section 7871." 
26 use 2106. 
(6) Subparagraph (F) of section 2106(a)(2) is amended to read 
as follows: 
"(F) CROSS REFERENCES.— 
"(i) For option as to time for valuation for purposes of deduction under 
this section, see section 2032. 
"(ii) For exemption of certain bequests for the benefit of the United 
States and for rules of construction for certain bequests, see section 
2055(f). 
"(iii) For treatment of gifts and bequests to or for the use of Indian 
tribal governments (or their subdivisions), see section 7871." 
26 use 2522. 
(7) Subsection (d) of section 2522 is amended to read as follows: 
"(d) CROSS REFERENCES.— 
"(1) For exemption of certain gifts to or for the benefit of the United 
States and for rules of construction with respect to certain bequests, see 
section 2055(f). 
"(2) For treatment of gifts to or for the use of Indian tribal govern* 
ments (or their subdivisions), see section 7871." 
26 use 4227. 
(g) Section 4227 is amended to read as follows: 
"SEC. 4227. CROSS REFERENCES. 
"(1) For exemption for a sale to an Indian tribal government (or its 
subdivision) for the exclusive use of an Indian tribal government (or its 
subdivision), see section 7871. 
"(2) For credit for taxes on tires and tubes, see section 6416(c)." 
(9) The table of sections for subchapter G of chapter 32 is 
amended by striking out the item relating to section 4227 and 
inserting in lieu thereof the following new item: 
"Sec. 4227. Cross references." 
26 use 4484. 
(10) Section 4484 is amended to read as follows: 
"SEC. 4484. CROSS REFERENCES. 
"(1) For penalties and administrative provisions applicable to this sub-
chapter, see subtitle F. 
"(2) For exemption for uses by Indian tribal governments (or their sub-
divisions), see section 7871." 
(11) The table of sections for subchapter D of chapter 36 is 
amended by striking out the item relating to section 4484 and 
inserting in lieu thereof the following new item: 
"Sec. 4484. Cross references." 
2
6 use 6420, 
(12) Sections 6420(h) and 6421(j) are each amended by adding 
®^^- 
at the end thereof the following new paragraph: 
"(4) For treatment of an Indian tribal government as a State and a 
subdivision of an Indian tribal government as a political subdivision of a 
State), see section 7871." 
26 use 6424, 
(13) Sections 6424(g) and 6427(k) are each amended by adding 
^^^- 
at the end thereof the following new paragraph: 
"(3) For treatment of an Indian tribal government as a State (and a 
subdivision of an Indian tribal government as a political subdivision of a 
State), see section 7871." 
(c) CLERICAL AMENDMENT.—The table of subchapters for chapter 
80 is amended by adding at the end thereof the following new item: 
"Subchapter C. Provisions affecting more than one subtitle." 
PUBLIC LAW 97-473—JAN. 14, 1983 
96 STAT. 2611 
SEC. 203. DEFINITION OF INDIAN TRIBAL GOVERNMENT. 
Subsection (a) of Section 7701 (relating to definitions) is amended 
^«*«' P- 2406. 
by adding at the end thereof the following new paragraph: 
^6 use 770i. 
"(40) INDIAN TRIBAL GOVERNMEI^.— 
"(A) IN GENERAL.—The term 'Indian tribal government* 
means the governing body of any tribe, b£ind, community, 
village, or group of Indians, or (if applicable) Alaska Na-
tives, which is determined by the Secretary, after consulta-
tion with the Secretary of the Interior, to exercise 
governmental functions. 
"(B) SPECIAL RULE FOR ALASKA NATIVES.—No determina-
tion under subparagraph (A) with respect to Alaska Natives 
shall grant or defer any status or powers other than those 
enumerated in section 7871. Nothing in the Indian Tribal 
^"*«' P- 2608. 
Grovemmental Tax Status Act of 1982, or in the amend- 
Ante, p. 2607. 
ments made thereby, shall validate or invalidate any claim 
by Alaska Natives of sovereign authority over lands or 
people." 
SEC. 204. EFFECTIVE DATES. 
26 USC 7871 
The amendments made by this title— 
^° ' 
(1) insofar as they relate to chapter 1 of the Internal Revenue 
Code of 1954 (other than section 103 thereof), shall apply to 26USCletseq. 
taxable years beginning after December 31, 1982, and before 
January 1,1985, 
(2) insofar as they relate to section 103 of such Code, shall 
apply to obligations issued after December 31, 1982, and before 
January 1,1985, 
(3) insofar as they relate to chapter 11 of such Code, shall 26 USC 2001 et 
apply to estates of decedents dying after December 31,1982, and *^^-
before January 1,1985, 
(4) insofar as they relate to chapter 12 of such Code, shall 26 USC 2501 et 
apply to gifts made after December 31, 1982, and before *^^-
January 1,1985, and 
(5) insofar as they relate to taxes imposed by subtitle D of 
such Code, shall take effect on January 1, 1983, and shall cease 26 USC 4041. 
to apply at the close of December 31,1984. 
TITLE III—AMENDMENTS TO EMPLOYEE 
RETIREMENT INCOME SECURITY ACT 
OF 1974 
SEC. 301. TREATMENT OF HAWAII PREPAID HEALTH CARE ACT UNDER 
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. 
(a) EXEMPTION FROM PREEMPTION.—Section 514(b) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)) is 
amended by adding at the end thereof the following new parsigraph: 
"(5XA) Except as provided in subparagraph (B), subsection (a) shall 
not apply to the Hawaii Prepaid Health Care Act (Haw. Rev. Stat. 
§§ 393-1 through 393-51). 
"(B) Nothing in subparagraph (A) shall be construed to exempt 
from subsection (a)— 
"(i) any State tax law relating to employee benefit plans, or 
97-200 O—84—pt. 2 
40 : QL3 
96 STAT. 2612 
PUBLIC LAW 97-473—JAN. 14, 1983 
29 use 1136. 
29 u s e 1144 
note. 
29 u s e 1144 
note. 
"Control 
group." 
29 u s e 1301. 
"Rural electric 
cooperative." 
26 u s e 501. 
"(ii) any amendment of the Hawaii Prepaid Health Care Act 
enacted after September 2, 1974, to the extent it provides for 
^ more than the effective administration of such Act as in effect 
on such date. 
"(C) Notwithstanding subparagraph (A), parts 1 and 4 of this 
subtitle, and the preceding sections of this part to the extent they 
govern matters which are governed by the provisions of such parts 1 
and 4, shall supersede the Hawaii Prepaid Health Care Act (as in 
effect on or after the date of the enactment of this paragraph), but 
the Secretary may enter into cooperative arrangements under this 
paragraph and section 506 with officials of the State of Hawaii to 
assist them in effectuating the policies of provisions of such Act 
which are superseded by such parts.". 
(b) TREATMENT OF OTHER STATE LAWS.—The amendment made by 
this section shall not be considered a precedent with respect to 
extending such amendment to any other State law. 
(c) EFFECTIVE DATE.—The amendment made by this section shall 
take effect on the date of the enactment of this Act. 
SEC. 302. TREATMENT OF MULTIPLE EMPLOYER WELFARE ARRANGE-
MENTS UNDER EMPLOYEE RETIREMENT INCOME SECURITY 
ACT OF 1974. 
(a) DEFINITION OF MULTIPLE EMPLOYER WELFARE ARRANGEMENT.— 
Section 3 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1002), relating to definitions, is amended by adding at the 
end thereof the following new paragraph: 
"(40)(A) The term 'multiple employer welfare arrangement' 
means an employee welfare benefit plan, or any other arrangement 
(other than an employee welfare benefit plan), which is established 
or maintained for the purpose of offering or providing any benefit 
described in paragraph (1) to the employees of two or more employ-
ers (including one or more self-employed individuals), or to their 
beneficiaries, except that such term does not include any such plan 
or other arrangement which is established or maintained— 
"(i) under or pursuant to one or more agreements which the 
Secretary finds to be collective bargaining agreements, or 
"(ii) by a rural electric cooperative. 
"(B) For purposes of this paragraph— 
"(i) two or more trades or businesses, whether or not incorpo-
rated, shall be deemed a single employer if such trades or 
businesses are within the same control group, 
"(ii) the term 'control group' means a group of trades or 
businesses under common control, 
"(iii) the determination of whether a trade or business is 
under 'common control' with another trade or business shall be 
determined under regulations of the Secretary applying princi-
ples similar to the principles applied in determining whether 
employees of two or more trades or businesses are treated as 
employed by a single employer under section 4001(b), except 
that, for purposes of this paragraph, common control shall not 
be based on an interest of less than 25 percent, and 
"(iv) the term 'rural electric cooperative' means— 
"(I) any organization which is exempt from tax under 
section 501(a) of the Internal Revenue Code of 1954 and 
which is engaged primarily in providing electric service on 
a mutual or cooperative basis, and 
fi..i9 • m-
PUBLIC LAW 97-473—JAN. 14, 1983 
96 STAT. 2613 
"(II) any organization described in paragraph (4) or (6) of 
section 501(c) of the Internal Revenue Code of 1954 which is 
26 USC 501. 
exempt from tax under section 501(a) of such Code and at 
least 80 percent of the members of which are organizations 
described in subclause (I)." 
(b) LIMITATION ON PREEMPTION OF STATE LAW WITH REGARD TO 
WELFARE PLANS WHICH ARE MULTIPLE EMPLOYER WELFARE AR-
RANGEMENTS.—Section 514(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144(b)), as amended by section 301 of 
this Act, is further amended by adding at the end thereof the 
following new paragraph: 
"(6XA) Notwithstanding any other provision of this section— 
"(i) in the case of an employee welfare benefit plan which is a 
multiple employer welfare arrangement and is fully insured (or 
which is a multiple employer welfare arrangement subject to an 
exemption under subparagraph (B)), any law of any State which 
regulates insurance may apply to such arrangement to the 
extent that such law provides— 
"(I) standards, requiring the maintenance of specified 
levels of reserves and specified levels of contributions, 
which any such plan, or any trust established under such a 
plan, must meet in order to be considered under such law 
able to pay benefits in full when due, and 
"(II) provisions to enforce such standards, and 
"(ii) in the case of any other employee welfare benefit plan 
which is a multiple employer welfare arrangement, in addition 
to this title, any law of any State which regulates insurance 
may apply to the extent not inconsistent with the preceding 
sections of this title. 
"(B) The Secretary may, under regulations which may be pre-
scribed by the Secretary, exempt from subparagraph (A)(ii), individ-
ually or by class, multiple employer welfare arrangements which 
are not fully insured. Any such exemption may be granted with 
respect to any arrangement or class of arrangements only if such 
arrangement or each arrangement which is a member of such class 
meets the requirements of section 3(1) and section 4 necessary to be 
29 USC 1002, 
considered an employee welfare benefit plan to which this title ^^^^• 
applies. 
"(C) Nothing in subparagraph (A) shall affect the manner or 
extent to which the provisions of this title apply to an employee 
welfare benefit plan which is not a multiple employer welfare 
arrangement and which is a plan, fund, or program participating in, 
subscribing to, or otherwise using a multiple employer welfare 
arrangement to fund or administer benefits to such plan's partici-
pants and beneficiaries. 
"(D) For purposes of this paragraph, a multiple employer welfare 
arrangement shall be considered fully insured only if the terms of 
the arrangement provide for benefits the amount of all of which the 
96 STAT. 2614 
PUBLIC LAW 97-473—JAN. 14, 1983 
Secretary determines are guaranteed under a contract, or policy of 
insurance, issued by an insurance company, insurance service, or 
insurance organization, qualified to conduct business in a State." 
29 use 1002 
(c) EFFECTIVE DATE.—The amendments made by this section shall 
^°^- 
take effect on the date of the enactment of this Act. 
Approved January 14, 1983. 
LEGISLATIVE HISTORY—H.R. 5470: 
HOUSE REPORTS: No. 97-832 (Comm. on Ways and Means) and No. 97-984 (Ctomm. of 
Oonf6r6nc6). 
S E N A T E R E P O R T No. 97-646 (Comm. on Finance). 
CONGRESSIONAL RECORD, Vol. 128 (1982): 
Sept. 20, considered and passed House. 
Oct. 1, considered and passed Senate, amended. 
Dec. 13, House concurred in Senate amendment and in another with an 
amen dement. 
Dec. 21, House and Senate agreed to conference report.