Unemployment Compensation Amendments of 1992
PL 102-318 (H.R.5260), enacted 07/03/1992

106 STAT. 290 
PUBLIC LAW 102-318—JULY 3, 1992 
July 3, 1992 
[H.R. 5260] 
Unemployment 
Compensation 
Amendments of 
1992. 
Inter-
governmental 
relations. 
26 u s e 1 note. 
Public Law 102-318 
102d Congress 
An \ct 
To extend the emergency unemployment cc mpensation program, to revise the trigger 
provisions contained in the extended ursmployment compensation program, and 
for other purposes. 
Be it enacted by the Senate a,^d House of Representatives of 
the United States of 
America in Con^Tess assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the Unemployment Compensation 
Amendments of 1992". 
TITLE I—EXTENSION OF EMERGENCY 
UNEMPLOYMENT 
COMPENSATION 
PROGRAM 
26 u s e 3304 
note. 
SEC. 101. EXTENSION OF PROGRAM. 
(a) GENERAL RULE.—Sections 102(f)(1) and 106(aX2) of the Emer-
gency Unemployment Compensation /. ct of 1991 (Public Law 102-
164, as amended) are each amended by striking "July 4, 1992" 
and inserting "March 6,1993". 
(b) WEEKS OP BENEFITS AVAILABLE DURING EXTENSION.—Sub-
paragraph (A) of section 102(bX2) of such Act is amended by striking 
clause (ii) and the flush paragraph at the end thereof and inserting 
the following: 
"(ii) REDUCTION FOR WEEKS AFTER JUNE I3, 1992.— 
In the case of weeks beginning after Jiuie 13, 1992— 
"(I) clause (i) of this subparagraph shall be 
applied by substituting '26' for *33', and by sub-
stituting *20' for '26', and 
"(II) subparagraph (A) of paragraph (1) shall 
be applied by substituting '100 percent' for '130 
percent'. 
"(iii) REDUCTION FOR WEEKS IN 7-PERCENT PERIOD.— 
In the case of weeks beginni ig in a 7-percent period— 
"(I) clause (ii) of thi: subparagraph shall not 
apply, 
"(II) clause (i) of thit subparagraph shall be 
applied by substituting '15' for '33', and by sub-
stituting'10'for'26', and 
"(III) subparagraph (A) of paragraph (1) shall 
be applied by substituting '60 percent' for '130 
percent'. 
"(iv) REDUCTION FOR WEEKS IN 6.8-PERCENT PERIOD.— 
In the case of weeks beginning in a 6.8-percent period— 
"(I) clauses (ii) and (iii) of this subparagraph 
shall not apply. 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 291 
"(11) clause (i) of this subparagraph shall be 
applied by substituting '13' for '33', and by sub-
stituting'7'for'26', and 
"(III) subparagraph (A) of paragraph (1) shall 
be appUed by substituting '50 percent' for '130 
percent'. 
"(v) 7-PERCENT PERIOD; 6.8-PERCENT PERIOD.—For 
purposes of this subparagraph— 
"(I) A 7-percent period means a period which 
begins with the second week after the first week 
for which the requirements of subclause (II) are 
met and a 6.8 percent period means a period which 
begins with the second week after the first week 
for which the requirements of subclause (III) are 
met. 
"(II) The requirements of this subclause are met 
for any week if the average rate of total unemploy-
ment (seasonally adjusted) for all States for the 
period consisting of the most recent 2-calendar 
month period (for which data are published before 
the close of such week) is at least 6.8 percent, 
but less than 7 percent. 
"(Ill) The requirements of this subclause are 
met for any week if the average rate of total 
unemployment (seasonally adjusted) for all States 
for the period consisting of the most recent 2-
calendar month period (for which data are pub-
lished before the close of such week) is less than 
6.8 percent. 
In no event shall a 7-percent period occur after a 
6.8-percent period occurs and a 6.8-percent period, once 
begun, shall continue in effect for all weeks for which 
benefits are provided under this Act. 
"(vi) LIMITATIONS ON REDUCTIONS.—In the case of 
an individual who is receiving emergency unemploy-
ment compensation for a week preceding the first week 
for which a reduction applies under clause (ii), (iii), 
or (iv) of this subparagraph, such reduction shall not 
apply to sudi individual for the first week of such 
reduction or any week thereafter for which the individ-
ual meets the eligibility requirements of this Act." 
(c) MODIFICATION TO FINAL PHASE-OUT.—Paragraph (2) of section 
102(f) of such Act is amended to read as follows: 
26 use 3304 
"(2) TRANSITION.—In the case of an individual who is receiv- "ote. 
ing emergency unemployment compensation for a week prior 
to or including March 6, 1993, emergency unemployment com-
pensation shsdl continue to be payable to such individual for 
any week thereafter for which the individual meets the eligi-
bilily requirements of this Act. No compensation shall be pay- Termination 
ableby reason of the preceding sentence for any week beginning °°^' 
after June 19,1993." 
(d) CONFORMING AMENDMENT.— 
(1) Subparagraph (B) of section 102(bX2) of such Act is 
amended by striking "subparagraph (AXii)" and inserting 
"clauses (ii), (iii), and (iv) of subparagraph (AT. 
(2) Section 101(e) of such Act is amended— 
26 use 3304 
note. 
106 STAT. 292 
PUBLIC LAW 102-318—JULY 3, 1992 
(A) by striking "(e) ELECTION.—^Notwithstanding^ and 
inserting: 
"(e) ELECTION BY STATES; WEEKS OF BENEFITS DURING PHASE-
OUT.— 
"(1) ELECTION BY STATES.—Notwithstanding", 
(B) by adding at the end of paragpraph (1), as redesignated 
by subparagraph (A), the following new sentence: "The 
preceding sentence shall not be applicable with respect 
to any extended compensation period which begins £d[ter 
March 6, 1993, nor shall the special rule in section 
203(bXlXB) of the Federal-State Extended Unemployment 
Compensation Act of 1970 (or the similar provision in any 
State law) operate to preclude the beginning of an extended 
compensation period after March 6, 1993, because of the 
ending of an earlier extended compensation period under 
the preceding sentence.", and 
(C) by adding at the end thereof the following new para-
graph: 
"(2) 
WEEKS 
OF 
BENEFITS 
DURING 
PHASE-OUT.—Not-
withstanding subsection (b)(lXB) or any other provision of law, 
whenever an extended compensation period is beginning in 
a State (and is not triggered off under paragraph (1)) an individ-
ual, who is entitled to extended compensation in the new 
extended compensation period (whether or not the individual 
apphes therefor) and also has remaining entitlement to emer-
gency unemployment compensation under this Act, shall be 
entitled to compensation imder the program in which the 
individual's monetary entitlement (as of me beginning of the 
first week of the extended compensation period) is the greater." 
26 ^sc 3304 
(e) EFFECTIVE DATE.—^The amendments made by this section 
apply to weeks of imemployment beginning after June 13, 1992. 
note. 
SEC. 102. MODIFICATION TO ELIGIBILITY REQUIREMENTS. 
(a) INDIVIDUAL NOT INELIGIBLE BY REASON OF SUBSEQUENT 
26 use 3304 
ENTITLEMENT TO R
E
G
U
L
A
R BENEFITS.—Section 101 of such Act is 
^°^- 
amended by adding at the end thereof the following new subsection: 
"(f) CERTAIN RIGHTS TO REGULAR COMPENSATION DISREGARDED.— 
If an individual exhausted his rights to regular compensation for 
any benefit year, such individual's eUgibility to receive emergenpy 
unemployment compensation under tiiis Act in respect of such 
benefit year shall be determined without regard to any rights to 
regular compensation for a subsequent benefit year if such individ-
ual does not file a claim for regular compensation for such sub-
sequent benefit year." 
26 use 3304 
(b) EFFECTIVE DATE.— 
"°*®- 
(1) IN GENERAL.—^The amendment made by this section shall 
., 
apply to weeks of luiemployment beginning after the date of 
the enactment of this Act. 
(2) TRANSITION RULES.— 
(A) WAIVER OF RECOVERY OF CERTAIN OVERPAYMENTS.— 
On and after the date of the enactment of this Act, no 
repayment of any emergency unemplojmient compensation 
shall be required under section 105 of the Emergency 
Unemployment Compensation Act of 1991 (PubUc Law 102-
164, as amended) if the individual would have been entitled 
to receive such compensation had the amendment made 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 293 
by subsection (a) applied to all weeks beginning on or 
before the date of the enactment of this Act. 
(B) WAIVER OF RIGHTS TO CERTAIN REGULAR BENEFITS.— 
I
f
— 
(i) before the date of the enactment of this Act, 
an individual exhausted his rights to regular com-
pensation for any benefit year, and 
(ii) after such exhaustion, such individual was not 
eUgible to receive emergency unemployment com-
pensation by reason of being entitled to regular com-
pensation for a subsequent benefit year, 
such individual may elect to defer his rights to regular 
compensation for such subsequent benefit year witii respect 
to weeks beginning after such date of enactment until 
such individual has exhausted his rights to emergency 
unemployment compensation in respect of the benefit year 
referred to in clause (i), and such individual shall be enti-
tled to receive emergency unemployment compensation for 
such weeks in the same manner as if he had not been 
entitled to the regular compensation to which the election 
appUes. 
SEC. 103. TECHNICAL MODIFICATION FOR REIMBURSABLE EMPLOY-
ERS. 
(a) GENERAL RULE.—Subsection (d) of section 104 of the Emer-
gency Unemplojonent Compensation Act of 1991 (PubUc Law 102-
164, as amended) is amended by striking "as may be necessary" 
and inserting "as the Secretary estimates to be necessarjr". 
(b) EFFECTIVE DATE.—^The amendment made by subsection (a) 
shall take effect on the date of the enactment of this Act. 
SEC. 104. TREATMENT OF PERSIAN GULF CRISIS RESERVISTS. 
I
f
— 
(1) an individual who was a member of a reserve component 
of the Armed Forces was called for active duty after August 
2,1990, and before March 1,1991, 
(2) such individual was receiving regular compensation, 
extended compensation, or a trade readjustment allowance for 
the week in which he was so called, 
(3) such individual served on such active duty for at least 
90 consecutive days, and 
(4) such individual was entitled to regular compensation on 
the basis of his services on such active duty, but the weekly 
benefit amount was less than the benefit amount he received 
for the week referred to in paragraph (2), 
such individual's weekly benefit Eunount under the Emergency 
Unemployment Compensation Act of 1991 for any week beginning 
after the date of the enactment of this Act shall be not less than 
the benefit amount he received for the week referred to in paragraph 
(2). 
SEC. 105. TREATMENT OF RAILROAD WORKERS. 
(a) EXTENSION OF PROGRAM.— 
(1) IN GENERAL.—Sections 501(b)(1) and (2) of the Emergency 
Unemployment Compensation Act of 1991 (Public Law 102-
164, as amended) are each amended by striking "July 4, 1992", 45 use 352 note. 
and inserting "March 6,1993". 
(2) CONFORMING AMENDMENTS.— 
26 use 3304 
note. 
26 use 3304 
note. 
Armed Forces. 
26 use 3304 
note. 
106 STAT. 294 
PUBLIC LAW 102-318—JULY 3, 1992 
45 use 352. 
Effective dates. 
(A) Section 501(a) of such Act is amended by striking 
"July 1992" and inserting "March 1993". 
(B) Paragraph (2) of section 501(d) of such Act is amended 
to read as follows: 
*
*
(
2
) PHASE-OUT.— 
"(A) BENEFITS ON OR AFTER JUNE I4, 1992.—Effective on 
and after June 14, 1992, paragraph (1) of this section 
shall be applied by substituting '100' for '130' each place 
it appears, and by substituting '10' for '13' each place 
it appears. 
*
*
(
B
) REDUCTIONS UNDER EMERGENCY COMPENSATION 
EXTENSION PROVISIONS.— 
"(i) Effective on and after the date on whidi a reduc-
tion 
in 
benefits 
is 
imposed 
under 
section 
102(bX2XAXiii), subparagraph (A) of this paragraph 
and subparagraphs (B) and (C) of paragraph (1) shall 
not apply and subparagraph (A) of paragraph (1) shall 
be applied by substituting ^50' for '130'. 
"(ii) Effective on and after the date on which a reduc-
tion 
in 
benefits 
is 
imposed 
under 
section 
102(bX2XAXiv), subparagraph (A) of this paragraph 
': . 
and subparagraphs (B) and (C) of paragraph (1) shall 
not apply and subparagraph (A) of paragraph (1) shall 
be applied by substituting ^35' for '130'. 
"(C) LIMITATIONS ON REDUCTIONS.—Notwithstanding sub-
paragraphs (A) and (B), in the case of an individual who 
is receiving extended benefits under section 2(c) of the 
Railroad Unemplojrment Insurance Act for persons with 
10 or more but less than 15 years of service, or extended 
benefits by reason of this section, for any day during a 
week which precedes a period for which a reduction under 
this paragraph takes effect, such reduction shall not apply 
for purposes of determining the amoimt of benefits payable 
to such individual for any day thereafter for which the 
individual meets the eUgibility requirements of this section 
and the Railroad Unemplojrment Insurance Act." 
(b) TERMINATION OF BENEFITS.—Section 501 of the Emergency 
Unemployment Compensation Act of 1991 (Public Law 102-164, 
as amended) is amended by adding at the end the following new 
subsection: 
"(e) TERMINATION OF BENEFITS.—^In the case of an individual 
who is receiving extended benefits by reason of this section on 
March 6, 1993, such benefits shall not continue to be payable 
to such individual after June 19,1993." 
SEC. 106. EFFECT OF CERTAIN MILITARY SERVICE ON TRADE ADJUST, 
MENT ASSISTANCE. 
(a) TRADE ADJUSTMENT ASSISTANCE.—Paragraph (2) of section 
231(a) of the Trade Act of 1974 (19 U.S.C. 2291(a)(2)) is amended— 
(1) by striking "or" at the end of subparagraph (B), 
(2) by inserting "or" at the end of subparagraph (C), 
(3) by inserting immediately after subparagraph (C) the fol-
lowing new subparagraph: 
"(D) is on call-up for purposes of active duty in a reserve 
status in the Armed Forces of the United States, provided 
such active duly is Tederal service' as defined in 5 U.S.C. 
8521(aXl)A and 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 295 
(4) by striking "paragraph (A) or (C), or both," and inserting 
"subparagraph (A) or (C), or botii (and not more than 26 weeks, 
in the case of weeks described in subparagraph (B) or (D)),". 
(b) EFFECTIVE DATE.—^The amendments made by subsection (a) 
shall apply to weeks beginning after August 1,1990. 
SEC. 107. FINANCING PROVISIONS. 
Section 104 of the Emergency Unemplojnnent Compensation Act 
of 1991 (Public Law 102-164, as amended) is amended by adding 
at the end thereof the following new subsection: 
"(e) TRANSFER OF FUNDS.—^Notwithstanding any other provision 
of law, the Secretary of the Treasury shall transfer from the general 
fund of the Treasury (from funds not otherwise appropriated)— 
"(1) to the extended unemplo3anent compensation account 
(as established by section 905 of the Social Security Act) such 
sums as are necessary to make payments to States under 
this Act by reason of the amendments made by sections 101 
and 102 of the Unemployment Compensation Amendments of 
1992, and 
"(2) to the emplo3mient security administration account (as 
established by section 901 of the Socied Security Act) such 
sums as may be necessary for purposes of assisting States 
in meeting administrative costs by reason of the amendments 
made by sections 101, 102, 201, and 202 of the Unemployment 
Compensation Amendments of 1992. 
There is hereby appropriated from such accoimts the sums referred 
to in the preceding sentence and such sums shall not be required 
to be repaid." 
19 use 2291 
note. 
26 use 3304 
note. 
Appropriation 
authorization. 
TITLE II—MODIFICATIONS TO 
EXTENDED BENEFITS PROGRAM 
SEC. 201. MODIFICATION OF TRIGGER PROVISIONS. 
(a) IN GENERAL.—Section 203 of the Federal-State Extended 
Unemplojonent Compensation Act of 1970 is amended by adding 
at the end thereof the following new subsection: 
26 use 3304 
note. 
"ALTERNATIVE TRIGGER 
"(f)(1) Effective with respect to compensation for weeks of Effective date. 
imemployment beginning after March 6, 1993, the State may by 
law provide that for purposes of beginning or ending any extended 
benefit period under this section— 
"(A) there is a State 'on' indicator for a week if— 
"(i) the average rate of total unemployment in such State 
(seasonally adjusted) for the period consisting of the most 
recent 3 months for which data for all States are published 
before the close of such week equals or exceeds 6.5 percent, 
and 
"(ii) the average rate of total unemployment in such 
State (seasonally adjusted) for the 3-month period referred 
to in clause (i) equals or exceeds 110 percent of such 
average rate for either (or both) of the corresponding 3-
month periods ending in the 2 preceding calendar years; 
and 
106 STAT. 296 
PUBLIC LAW 102-318—JULY 3, 1992 
"(B) there is a State 'off indicator for a week if either the 
requirements of clause (i) or clause (ii) of subparagraph (A) 
are not satisfied. 
Notwithstanding the provision of any State law described in this 
paragraph, any week for which there would otherwise be a State 
'on' indicator shall continue to be such a week and shall not be 
determined to be a week for which there is a State 'off indicator. 
"(2) For purposes of this subsection, determinations of the rate 
of total unemployment in any State for any period (and of any 
seasonal adjustment) shall be made by the Secretary." 
(b) ADDITIONAL W E E K S O F B E N E F I T S AVAILABLE D U R I N G P E R I O D S 
OF H I G H UNEMPLOYMENT.—Subsection (b) of section 202 of such 
26 use 3304 
Act is amended by adding at the end thereof the following new 
"°*®- 
paragraph: 
"(SKA) Effective with respect to weeks beginning in a high 
unemployment period, paragraph (1) shall be applied by 
substituting— 
"(i) '80 per centum' for '50 per centum' in subparagraph 
(A), 
"(ii)'twenty'for thirteen'in subparagraph (B), and 
"(iii) 'forty-six* for 'thirty-nine' in subparagraph (C). 
"(B) For purposes of subparagraph (A), the term liigh 
unemployment period' means any period during which an 
extended benefit period would be in effect if section 
203(fKlXAXi) were applied by substituting '8 percent' for '6.5 
percent'." 
(c) CONFORMING AMENDMENT.—Paragraph (2) of section 204(c) 
26 use 3304 
of such Act is amended by inserting ", forty-six in any case where 
°°*« 
section 202(b)(3)(A) applies" after "thirty-nine". 
SEC. 202. MODIFICATION 
OF 
ELIGIBILITY 
REQUIREMENTS 
FOR 
UNEMPLOYMENT BENEFITS. 
(a) EARNINGS TEST.— 
(1) IN GENERAL.—Paragraph (5) of section 202(a) of the Fed-
26 use 3304 
eral-State Extended Unemployment Compensation Act of 1970 
"
*
*
*
*
• 
is amended by striking "which one of the foregoing methods" 
and inserting "which one or more of the foregoing methods". 
26 use 3304 
(2) EFFECTIVE DATE.— 
note. 
(A) IN GENERAL.—^Notwithstanding any other provision 
of law, the amendment made by paragraph (1) shall apply 
for purposes of extended imemplo3rment compensation and 
emergency unemployment compensation to weeks of 
unemployment beginning on or after the date of the enact-
ment of this Act. 
(B) WAIVER OF RECOVERY OF CERTAIN OVERPAYMENTS.— 
On and after the date of the enactment of this Act, no 
repayment of any emergency unemployment compensation 
shall be required under section 105 of the Emergency 
Unemployment Compensation Act of 1991 (Public Law 102-
164, as amended) if the individual would have been entitled 
to receive such compensation had the amendment made 
by paragraph (1) applied to all weeks beginning before 
the date of the enactment of this Act. 
(b) SUSPENSION OF CERTAIN ELIGIBILITY REQUIREMENTS.— 
(1) IN GENERAL.—Section 202(a) of such Act is amended by 
adding at the end thereof the following new paragraph: 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 297 
"(7) Paragraphs (3) and (4) shall not apply to weeks of Effective date. 
unemployment beginning after March 6,1993, and before Janu-
ary 1, 1995, and no provision of State law in conformity vdtii 
such paragraphs shall apply during such period." 
(2) STUDY.—The Federal Advisory Council established under 26 use 3304 
section 908 of the Social Security Act shidl conduct a study ^°*^-
of the provisions suspended by the amendment made by para-
graph (1). Not later than February 1, 1994, sudi Councnl shall Reports. 
submit to the Committee on Ways and Means of the House 
of Representatives and the Committee on Finance of the Senate, 
a report of its recommendations on such suspended provisions 
(including whether such provisions should be repealed or 
revised). 
TITLE ni—MODIFICATIONS TO 
FEDERALUNEMPLOYMENT TAX 
SEC. 301. INFORMATION REQUIRED WITH RESPECT TO TAXATION OF 26 USC 3304 
UNEMPLOYMENT BENEFITS. 
note-
(a) INFORMATION ON UNEMPLOYMENT BENEFITS.— 
(1) GENERAL RULE.—The State i^ency in each State shaU 
provide to an individual filing a claim for compensation under 
the State unemplojrment compensation law a written expla-
nation of the Federal and State income taxation of unemploy-
ment benefits and of the requirements to make payments of 
estimated Federal and State income taxes. 
(2) STATE AGENCY.—^For purposes of this subsection, the term 
"State agency" has the meanii^ given such term by section 
3306(e) of the Internal Revenue Code of 1986. 
(b) EFFECJTIVE DATE.—^The amendment made by subsection (a) 
shall take efiect on October 1,1992. 
SEC. 302. MAILING OF CERTAIN INFORMATION PERMITTED. 
(a) GENERAL RULE.—Section 302 of the Social Security Act (42 
U.S.C. 502) is amended by adding at the end thereof the following 
new subsection: 
"(c) No portion of the cost of mailing a statement under section 
6050B(b) of the Internal Revenue Code of 1986 (relating to 
unemployment compensation) shall be treated as not being a cost 
for the proper and efficient administration of the State unemploy-
ment compensation law by reason of including with sudi statement 
information about the earned income credit provided by section 
32 of the Internal Revenue Code of 1986. The preceding sentence 
shall not apply if the inclusion of such information increases the 
postage required to mail such statement." 
(b) EFFECTIVE DATE.—^The amendment made by subsection (a) 42 use 502 note, 
shall take efiTect on the date of the enactment of this Act. 
SEC. 303. EXTENSION OF EXISTING TREATMENT OF CERTAIN AGRI-
CULTURAL WORKERS. 
(a) GENERAL RULE.—Subparagraph (B) of section 3306(cXl) of 
the Internal Revenue Code of 1986 is amended by striking "January 26 use 3306. 
1,1993" and inserting "January 1,1995". 
(b) REPORT.—Not later than February 1,1994, the Advisory Coun- 42 use 1108 
cil on Unemployment Compensation shall submit a report to the ^°^' 
Committee on Ways and Means of the House of Representatives 
106 STAT. 298 
PUBLIC LAW 102-318—JULY 3, 1992 
,.-, 
and the Committee on Finance of the Senate on its rec-
ommendations with respect to the treatment of agricultural labor 
performed by aliens. 
26 use 3302 
SEC. 304. EXTENSION OF PERIOD FOR REPAYMENT OF FEDERAL 
"o*e 
LOANS TO STATE UNEMPLOYMENT FUNDS. 
(a) GENERAL RULE.—^If the Secretary of Labor determines that 
a State meets the requirements of subsection (b), paragraph (2) 
of section 3302(c) of the Internal Revenue Code of 1986 shall be 
appUed with respect to such State for taxable years after 1991— 
(1) by substituting "third" for "second" in subparagraph (AXi), 
(2) by substituting "fourth or fifth" for "third or fourth" in 
subparagraph (B), and 
(3) by substituting "sixth" for "fifth" in subparagraph (C). 
(b) REQUIREMENTS.—^A State meets the requirements of this sub-
section if, during calendar year 1992 or 1993, the State amended 
its unemployment compensation law to increase estimated con-
tributions required under such law by at least 25 percent. 
(c) SPECIAL RULE.—^This section shall not apply to any taxable 
year after 1994 unless — 
(1) such taxable year is in a series of consecutive taxable 
years as of the beginning of each of which there was a balance 
referred to in section 3302(cX2) of such Code, and 
(2) such series includes a taxable year beginning in 1992, 
1993, or 1994. 
TITLE IV—MODIFICATION TO REGULAR 
STATE 
UNEMPLOYMENT 
COM-
PENSATION PROGRAMS 
SEC. 401. TREATMENT 
OF 
SHORT-TIME 
UNEMPLOYMENT 
COM-
PENSATION PROGRAMS. 
(a) AUTHORIZATION OF PROGRAMS.— 
(1) Paragraph (4) of section 3304(a) of the Internal Revenue 
26 use 3304. 
Code of 1986 is amended by striking "and" at the end of 
subparagraph (C), by inserting "and" at the end of subpara-
graph (D) and by adding at the end thereof the following 
new subparagraph: 
"(E) amounts may be withdrawn for the pa3nnent of 
short-time compensation under a plan approved by the 
Secretary of Labor;" 
26 use 3306. 
(2) Subsection (f) of section 3306 of such Code is amended 
by striking "and" at the end of paragraph (2) by striking the 
period at the end of paragraph (3) and inserting "; and", and 
by adding at the end thereof the following new paragraph: 
"(4) amounts may be withdrawn for the payment of short-
time compensation under a plan approved by the Secretary 
of Labor." 
42 use 503. 
(3) Section 303(aX5) of the Social Security Act is amended 
by inserting before "; and" the following ": Provided further, 
lliat amounts may be withdrawn for the pajrment of short-
time compensation under a plan approved by the Secretary 
of Labor". 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 299 
(b) ASSISTANCE IN IMPLEMENTING PROGRAMS.—In order to assist 26 use 3304 
States in establishing and implementing short-time compensation ^°*^-
programs— 
(1) the Secretary of Labor (hereinafter in this section referred 
to as the "Secretaiy") shall develop model legislative language 
which may be used by States in developing and enacting short-
time compensation progrsmis and shall propose such revisions 
of such legislative language as may be appropriate, and 
(2) the Secretary shall provide technical assistance and guid-
ance in developing, enacting, and implementing such programs. 
The initial model legislative language referred to in paragraph 
' 
(1) shall be developed not later than January 1,1993. 
(c) REPORTS.— 
(1) INITIAL REPORT.—Not later than January 1, 1995, the 
Secretary shall submit to the Congress a report on the 
implementation of this section. Such report shall include an 
evaluation of short-time compensation programs and shall con-
tain such recommendations as the Secretary may deem advis-
able. 
(2) SUBSEQUENT REPORTS.—^After the submission of the report 
under paragraph (1), the Secretaiy shall submit such additional 
reports on the implementation of short-time compensation pro-
grams as the Secretary deems appropriate. 
(d) DEFiNrnoNS.—For purposes of tiiis section— 
(1) SHORT-TIME COMPENSATION PROGRAM.—The term "short-
time compensation program" means a program imder which— 
(A) individuals whose workweeks have been reduced by 
at least 10 percent are eligible for unemployment com-
pensation; 
(B) the amount of unemployment compensation payable 
to any such individual is a pro rata portion of the unemploy-
ment compensation which would be payable to the individ-
ual if the individual were totally unemployed; 
(C) eUgible employees are not required to meet the avail-
ability for work or work search test requirements while 
collecting short-time compensation benefits, but are 
required to be available for their normal workweek; 
(D) eligible employees may participate in an employer-
sponsored training program to enhance job skills if such 
program has been approved by the State agency; and 
(E) there is a reduction in the number of hours worked 
by employees in lieu of imposing temporary layoffs. 
(2) STATE.—The term "State" includes the District of Colum-
bia, the Commonwealth of Puerto Rico, and the Virgin Islands. 
TITLE V—REVENUE PROVISIONS 
SEC. 501. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in this title 
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 1986. 
106 STAT. 300 
PUBLIC LAW 102-318—JULY 3, 1992 
Subtitle A—^Extension of Phaseout of Per-
sonal Exemptions; Corporate Estimated 
Tax Provisions 
SEC. 
511. 
EXTENSION 
OF 
PHASEOUT 
OF 
PERSONAL 
EXEMPTIONS. 
26 use 151. 
Subparagraph (E) of section 151(d)(3) (relating to termination 
of phaseout) is amended by striking "December 31, 1995" and 
inserting "December 31,1996". 
SEC. 512. CORPORATE ESTIMATED TAX PROVISIONS. 
26 use 6655. 
(a) GENERAL RuLE.—Subsection (d) of section 6655 (relating to 
amoiuit of required installments) is amended— 
(1) by striking "90 percent" each place it appears in paragraph 
(l)(B)(i) and inserting "91 percent", 
(2) by striking "90 PERCENT" in the heading of paragraph 
(2) and inserting "91 PERCENT", and 
(3) by striking paragraph (3) and inserting the following 
new paragraph: 
"(3) TEMPORARY INCREASE IN AMOUNT OF INSTALLMENT BASED 
O
N C
U
R
R
E
N
T Y
E
A
R TAX.—In the case of any taxable year begin-
ning after June 30,1992, and before 1997— 
"(A) paragraph (IXBXi) and subsection (eX3XAXi) shall 
be applied by substituting '97 percent' for "91 percent* each 
place it appears, and 
"(B) the table contained in subsection (eX2XBXii) shall 
be appUed by substituting '24.25', '48.50', '72.75', and '97' 
for '22.75', '45.50', '68.25', and '91.00', respectively." 
(b) CONFORMING AMENDMENTS.— 
. 
(1) Clause (ii) of section 6655(eX2XB) is amended by striking 
the table contained therein and inserting the following new 
table: 
' ^ the case of the followinif 
The applicable 
required installments: 
percentage is: 
1st 
22.75 
2nd 
45.50 
3rd 
68.25 
4th 
91.00." 
(2) Clause (i) of section 6655(eX3XA) is amended by striking 
"90 percent" and inserting "91 percent". 
26 use 6655 
(c) EFFECTIVE DATE.—^The amendments made by this section shall 
^°^- 
apply to taxable years beginning after June 30,1992. 
Subtitle B—^Pension Distributions 
Retirement. 
SEC. 521. TAXABILITY OF BENEFICIARY OF QUALIFIED PLAN. 
26 use 402. 
(a) IN GENERAL.—So much of section 402 (relating to taxabiUty 
of beneficiary of employees' trust) as precedes subsection (g) thereof 
is amended to read as follows: 
<^EC. 402. TAXABILITY OF BENEFICIARY OF EMPLOYEES' TRUST. 
"(a) TAXABILITY OF BENEFICIARY OF EXEMPT TRUST.—^Except as 
otherwise provided in this section, any amount actually distributed 
to any distributee by any employees' trust described in section 
401(a) which is exempt from tax under section 501(a) shall be 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 301 
taxable to the distributee, in the taxable year of the distributee 
in which distributed, iinder section 72 (relating to annuities). 
"(b) TAXABILITY OF BENEFICIARY OF NONEXEMPT TRUST.— 
"(1) CONTRIBUTIONS.—Contributions to an employees' trust 
made by an employer during a taxable year of the employer 
which ends with or within a taxable year of the trust for 
which the trust is not exempt from tax under section 501(a) 
shall be included in the gross income of the employee in accord-
ance with section 83 (relating to property transferred in connec-
tion with performance of services), except that the value of 
the employee's interest in the trust shall be substituted for 
the fair market value of the property for purposes of applying 
such section. 
"(2) DISTRIBUTIONS.—^The amount actually distributed or 
made available to any distributee by any trust described in 
paragraph (1) shall be taxable to the distributee, in the taxable 
year in which so distributed or made available, under section 
72 (relating to annuities), except that distributions of income 
of such trust before the annuity starting date (as defined in 
section 72(cX4)) shall be included in the gross income of the 
employee without regard to section 72(eX5) (relating to amounts 
not received as annuities). 
"(3) GRANTOR TRUSTS.—^A beneflciaiy of any trust described 
in paragraph (1) shall not be consiaered the owner of any 
S
ortion of such trust imder subpart E of part I of subchapter 
(relating to grantors and others treated as substantial own-
ers). 
"(4) FAILURE TO MEET REQUIREMENTS OF SECTION 4io(b).— 
"(A) HIGHLY COMPENSATED EMPLOYEES.—If 1 of the rea-
sons a trust is not exempt from tax under section 501(a) 
is the failure of the plan of which it is a part to meet 
the requirements of section 401(a)(26) or 410(b), then a 
highly compensated employee shall, in lieu of the amount 
determined under paragraph (1) or (2) include in gross 
income for the taxable year with or within which the t£uc-
able year of the trust ends an amount equal to the vested 
accrued benefit of such employee (other than the employee's 
investment in the contract) as of the close of such taxable 
year of the trust. 
"(B) FAILURE TO MEET COVERAGE TESTS.—If a trust is 
not exempt from tax under section 501(a) for any taxable 
year solely because such trust is part of a plan which 
fails to meet the requirements of section 401(a)(26) or 
410(b), paragraphs (1) and (2) shall not apply by reason 
of such failure to any employee who was not a highly 
compensated employee during— 
"(i) such taxable year, or 
"(ii) any preceding period for which service was cred-
itable to such employee under the plan. 
"(C) HIGHLY COMPENSATED EMPLOYEE.—For purposes of 
this paragraph, the term Tiighly compensated employee' 
has the meaning given such term by section 414(q). 
"(c) RULES APPLICABLE TO ROLLOVERS FROM EXEMPT TRUSTS.— 
"(1) EXCLUSION FROM INCOME.—If— 
"(A) any portion of the balance to the credit of an 
employee in a qualified trust is paid to the employee in 
an eligible rollover distribution. 
106 STAT. 302 
PUBLIC LAW 102-318-JULY 3, 1992 
"(B) the distributee transfers any portion of the property 
received in such distribution to an eUgible retirement plan, 
and 
"(C) in the case of a distribution of property other than 
money, the amount so transferred consists of the property 
distributed, 
then such distribution (to the extent so transferred) shall not 
be includible in gross income for the taxable year in which 
paid. 
"(2) MAXIMUM AMOUNT WHICH MAY BE ROLLED OVER.—In the 
case of any eligible rollover distribution, the maximum amount 
transferred to which paragraph (1) applies shall not exceed 
the portion of such distribution which is includible in gross 
income (determined without regard to paragraph (1)). 
*
*
(
3
) TRANSFER MUST BE MADE WITHIN G
O DAYS OF RECEIPT.— 
Paragraph (1) shall not apply to any transfer of a distribution 
made after the 60th day following the day on which the distribu-
tee received the property distributed. 
"(4) ELIGIBLE ROLLOVER DISTRIBUTION.—For purposes of this 
subsection, the term 'eligible rollover distribution' means any 
distribution to an employee of all or any portion of the balance 
to the credit of the employee in a qualified trust; except that 
such term shall not include— 
"(A) any distribution which is one of a series of substan-
tially equal periodic payments (not less frequently than 
annually) made— 
"(i) for the life (or life expectancy) of the employee 
or the joint lives (or joint life expectancies) of the 
employee and the employee's designated beneficiary, 
or 
"(ii) for a specified period of 10 years or more, and 
"(B) any distribution to the extent such distribution is 
required imder section 40 l(aX9). 
*
*
(
5
) TRANSFER TREATED AS ROLLOVER CONTRIBUTION UNDER 
S
E
C
T
I
O
N 408.—^For piuposes of this title, a transfer to an eligible 
retirement plan described in clause (i) or (ii) of paragraph 
(8XB) resulting in any portion of a distribution being excluded 
from gross income under paragraph (1) shall be treated as 
a rollover contribution described in section 408(dX3). 
"(6) SALES OF DISTRIBUTED PROPERTY.—For purposes of this 
subsection— 
"(A) TRANSFER OF PROCEEDS FROM SALE OF DISTRIBUTED 
PROPERTY TREATED AS TRANSFER OF DISTRIBUTED PROP-
ERTY.—^The transfer of an amount equal to any portion 
of the proceeds from the sale of property received in the 
distribution shall be treated as the transfer of property 
received in the distribution. 
*
*
(
B
) PROCEEDS ATTRIBUTABLE TO INCREASE IN VALUE.— 
The excess of fair market value of property on sale over 
its fair market value on distribution shall be treated as 
property received in the distribution. 
"(C) DESIGNATION WHERE AMOUNT OF DISTRIBUTION 
EXCEEDS ROLLOVER CONTRIBUTION.—^In any case where part 
or all of the distribution consists of property other than 
money— 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 303 
**(i) the portion of the money or other property which 
is to be treated as attributable to amounts not included 
in gross income, and 
"(ii) the portion of the money or other property which 
is to be treated as included in the rollover contribution, 
shall be determined on a ratable basis unless the taxpayer 
designates otherwise. Any designation under this subpsira-
graph for a taxable year shall be made not later than 
the time prescribed by law for fiUng the return for such 
taxable year (including extensions thereof). Any such des-
ignation, once made, shall be irrevocable. 
"(D) NONRECOGNinON OF GAIN OR LOSS.—No gain or 
loss shall be recognized on any sale described in subpara-
graph (A) to the extent that an amount equal to the pro-
ceeds is transferred pursuant to paragraph (1). 
"(7) SPECIAL RULE FOR FROZEN DEPOSITS.— 
"(A) IN GENERAL.—^The 60-day period described in para-
graph (3) shall not— 
"(i) include any period during which the amount 
transferred to the employee is a frozen deposit, or 
"(ii) end earlier than 10 days after such amount 
ceases to be a frozen deposit. 
"(B) FROZEN DEPOSITS.—For purposes of this subpara-
graph, the term 'frozen deposit' means any deposit which 
may not be withdrawn because o
f
—
• 
"(i) the bankruptcy or insolvency of any 
financial 
institution, or 
"(ii) any requirement imposed by the State in which 
such institution is located by reason of the bankruptcy 
or insolvency (or threat thereof) of 1 or more financial 
institutions in such State. 
A deposit shall not be treated as a firozen deposit unless 
on at least 1 day during the 60-day period described in 
paragraph (3) (without regard to this paragraph) such 
deposit is described in the preceding sentence. 
"(8) DEFINITIONS.—For purposes of this subsection— 
"(A) QUALIFIED TRUST.—The term 'qualified trust' means 
an employees' trust described in section 401(a) which is 
exempt from tax under section 501(a). 
"(B) ELIGIBLE RETIREMENT PLAN.—The term 'ehgible 
retirement plan' means— 
"(i) an individual retirement account described in 
section 408(a), 
"(ii) an individual retirement annuity described in 
section 408(b) (other than an endowment contract), 
"(iii) a qualified trust, and 
"(iv) an annuity plan described in section 403(a). 
"(9) ROLLOVER WHERE SPOUSE RECEIVES DISTRIBUTION AFTER 
DEATH OF EMPLOYEE.—If any distribution attributable to an 
employee is paid to the spouse of the employee after the employ-
ee's death, the preceding provisions of this subsection shall 
apply to such distribution in the same manner as if the spouse 
were the employee; except that a trust or plan described in 
clause (iii) or (iv) of paragraph (8XB) shall not be treated 
as an eligible retirement plan with respect to such distribution. 
"(10) 
DENIAL 
OF 
AVERAGING 
FOR 
SUBSEQUENT 
DIS-
TRIBUTIONS.—If paragraph (1) applies to any distribution paid 
106 STAT. 304 
PUBLIC LAW 102-318—JULY 3, 1992 
to any employee, paragraphs (1) and (3) of subsection (d) shall 
not apply to any distribution (paid after such distribution) 
of the balance to the credit of the employee under the plan 
under which the preceding distribution was made (or under 
any other plan which, under subsection (dX4XC), would be 
aggregated with such plan). 
"(d) TAX ON LUMP SUM DiSTRffiunoNS.— 
"(1) 
IMPOSITION OF SEPARATE TAX ON LUMP SUM DIS-
TRIBUTIONS.— 
"(A) SEPARATE TAX.—^There is hereby imposed a tax (in 
the amount determined under subparagraph (B)) on a lump 
siun distribution. 
"(B) AMOUNT OF TAX.—The amount of tax imposed by 
subparagraph (A) for any taxable year is an amount equal 
to 5 times the tax which would be imposed by subsection 
(c) of section 1 if the recipient were an individual referred 
to in such subsection and the taxable income were an 
amount equal to VB of the excess o
f
— 
"(i) the total taxable amount of the lump sum dis-
tribution for the tsixable year, over 
"(ii) the minimum distribution allowance. 
"(C) MINIMUM DISTRIBUTION ALLOWANCE.—For purposes 
of tJiis paragraph, the minimum distribution allowance for 
any taxable year is an amount equal to— 
"(i) the lesser of $10,000 or one-half of the total 
taxable amount of the lump sum distribution for the 
taxable year, reduced (but not below zero) by 
"(ii) 20 percent of the amoimt (if any) by which 
such total taxable amount exceeds $20,000. 
"(D) LIABILITY FOR TAX.—The recipient shall be Hable 
for the tax imposed by this paragraph. 
"(2) DISTRIBUTIONS OF ANNUITY CONTRACTS.— 
"(A) IN GENERAL.—In the case of any recipient of a lump 
sum distribution for any taxable year, if trie distribution 
(or any part thereof) is an annuity contract, the total tax-
able amount of the distribution shall be aggregated for 
purposes of computing the tax imposed by paragraph (1)(A), 
except that the amount of tax so computed shall be reduced 
(but not below zero) by that portion of the tax on the 
aggregate total taxable amount which is attributable to 
annuity contracts. 
"(B) BENEFICIARIES.—^For purposes of this paragraph, a 
beneficiary of a trust to which a lump sum distribution 
is made shall be treated as the recipient of such distribution 
if the beneficiary is an employee (including an employee 
within the meaning of section 401(cXl)) with respect to 
the plan under which the distribution is made or if the 
beneficiary is treated as the owner of such trust for pur-
poses of subpart E of part I of subchapter J. 
"(C) ANNUITY CONTRACTS.—^For purposes of this para-
graph, in the case of the distribution of an annuity contract, 
the taxable amoimt of such distribution shall be deemed 
to be the current actuarial value of the contract, determined 
on the date of such distribution. 
"(D) TRUSTS.—^In the case of a lump sum distribution 
with respect to any individual which is made only to 2 
or more trusts, the tax imposed by paragraph (IXA) shall 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 305 
be computed as if such distribution was made to a single 
trust, but the liability for such tax shall be apportioned 
among such trusts according to the relative amounts 
received by each. 
"(E) REGULATIONS.—^The Secretary shall prescribe such 
regulations as may be necessary to carry out the purposes 
of this paragraph. 
"(3) ALLOWANCE OF DEDUCTION.—The total taxable amount 
of a lump sum distribution for any taxable year shall be allowed 
as a deduction from gross income for such taxable year, but 
only to the extent included in the taxpayer's gross income 
for such taxable year. 
"(4) DEFINITIONS AND SPECIAL RULES.— 
"(A) LUMP SUM DISTRIBUTION.—^For purposes of this sec-
tion and section 403, the term lump sum distribution' 
means the distribution or payment within 1 taxable year 
of the recipient of the balance to the credit of an employee 
which becomes payable to the recipient— 
**(i) on account of the employee's death, 
"(ii) after the employee attains age 59^2, 
"(iii) on account of the employee's separation from 
the service, or 
"(iv) after the employee has become disabled (within 
the meaning of section 72(mX7)), 
from a trust which forms a part of a plan described in 
section 401(a) and which is exempt from tax under section 
501 or from a plan described in section 403(a). Clause 
(iii) of this subparagraph shall be applied only witii respect 
to an individual who is an employee without regard to 
section 401(cXl), and clause (iv) shall be appUed only with 
respect to an employee within the meaning of section 
401(c)(1). A distribution of an cmnuity contract from a 
trust or annuity plan referred to in the first sentence 
of this subparagraph sh£dl be treated as a lump sum dis-
tribution. For purposes of this subparagraph, a distribution 
to 2 or more trusts shall be treated as a distribution 
to 1 recipient. For purposes of this subsection, the balance 
to the credit of the employee does not include the accumu-
lated deductible employee contributions under the plan 
(within the meaning of section 72(oX5)). 
"(B) AVERAGING TO APPLY TO i LUMP SUM DISTRIBUTION 
AFTER AGE 59V^.—^Paragraph (1) shall apply to a lump sum 
distribution with respect to an employee under subpara-
graph (A) only i
f
— 
"(i) such amount is received on or after the date 
on which the employee has attained age 59 ¥2, and 
"(ii) the taxpayer elects for the taxable year to have 
all such amounts received during such taxable year 
so treated. 
Not more thsui 1 election may be made under this subpara-
graph by any taxpayer with respect to any employee. No 
election may be made under this subparagraph by any 
taxpayer other than an individual, an estate, or a trust. 
In the case of a lump sum distribution made with respect 
to £ui employee to 2 or more trusts, the election imder 
this subparagraph shall be made by the personal rep-
resentative of the taxpayer. 
106 STAT. 306 
PUBLIC LAW 102-318—JULY 3, 1992 
"(C) AGGREGATION OF CERTAIN TRUSTS AND PLANS.—For 
purposes of determining the balance to the credit of an 
employee under subparagraph (A>— 
"(i) all trusts wmch are part of a plan shall be 
treated as a single trust, all pension plans maintained 
by the employer shall be treated as a single plan, 
all profit-sharing plans maintained by the employer 
shall be treated as a single plan, and all stock bonus 
plans maintained by the employer shall be treated 
as a single plan, and 
"(ii) trusts which are not qualified trusts imder sec-
tion 401(a) and annuity contracts which do not satisfy 
the requirements of section 404(a)(2) shall not be taken 
into account. 
"(D) TOTAL TAXABLE AMOUNT.—For purposes of this sec-
tion and section 403, the term total taxable amount' means, 
with respect to a liunp sum distribution, the amount of 
such distribution which exceeds the sum of— 
"(i) the amounts considered contributed by the 
employee (determined by applying section 
72(f)), 
> 
reduced by any amounts previously distributed which 
were not includible in gross income, and 
;; 
"(ii) the net unrealized appreciation attributable to 
that part of the distribution which consists of the secu-
rities of the employer corporation so distributed. 
"(E) COMMUNITY PROPERTY LAWS.—The provisions of this 
subsection, other than paragraph (3), shall be applied with-
out regard to commimity property laws. 
"(F) MINIMUM PERIOD OF SERVICE.—For purposes of this 
subsection, no amount distributed to an employee from 
or under a plan may be treated as a lump sum distribution 
under subparagraph (A) imless the employee has been 
a participant in the plan for 5 or more taxable years 
before the taxable year in which such amounts are distrib-
uted. 
"(G) AMOUNTS SUBJECT TO PENALTY.—This subsection 
shall not apply to amounts described in subparagraph (A) 
of section 72(m)(5) to the extent that section 72(m)(5) 
applies to such amounts. 
"(H) BALANCE TO CREDIT OF EMPLOYEE NOT TO INCLUDE 
AMOUNTS PAYABLE UNDER QUALIFIED DOMESTIC RELATIONS 
ORDER.—^For purposes of this subsection, the balance to 
the credit of an employee shall not include any amount 
payable to an alternate payee under a quaUfied domestic 
relations order (within the meeining of section 414(p)). 
"(I) 
TRANSFERS TO COST-OF-LIVING ARRANGEMENT NOT 
TREATED AS DISTRIBUTION.—^For purposes of this subsection, 
the balance to the credit of an employee under a defined 
contribution plan shall not include any amount transferred 
from such defined contribution plan to a qualified cost-
of-living arrangement (within the meaning of section 
415(k)(2)) under a defined benefit plan. 
"(J) LUMP SUM DISTRIBUTIONS OF ALTERNATE PAYEES.— 
If any distribution or payment of the balance to the credit 
of an employee would be treated as a lump sum dis-
tribution, then, for purposes of this subsection, the payment 
under a qualified domestic relations order (within the 
PUBUC LAW 102-318—JULY 3,1992 
106 STAT. 307 
meaning of section 414(p)) of the balance to the credit 
of an alternate payee who is the spouse or former spouse 
of the employee shall be treated as a lump sum distribution. 
For purposes of this subparagraph, the balance to the 
credit of the alternate payee shall not include any amount 
payable to the employee. 
*(K) TREATMENT OP PORTION NOT ROLLED OVER.—If any 
portion of a lump sum distribution is transferred in a 
transfer to which subsection (c) applies, parajg^phs (1) 
and (3) shall not apply with respect to the distribution. 
"(L) SECURITIES.—^For purposes of this subsection, the 
terms 'securities' and 'securities of the employer cor-
poration' have the respective meanings provided by sub-
section (eX4XE). 
"(5) 
SPECIAL RULE WHERE PORTIONS OF LUMP SUM DIS-
TRIBUTION ATTRIBUTABLE TO ROLLOVER OF BOND PURCHASED 
U
N
D
E
R QUALIFIED B
O
N
D P
U
R
C
H
A
S
E PLAN.—If any portion of a 
lump sum distribution is attributable to a transfer described 
in section 405(dX3XAXii) (as in effect before its repeal by the 
Tax Reform Act of 1984), paragraphs (1) and (3) of this sub-
section shall not apply to such portion. 
*(6) TREATMENT OF POTENTIAL FUTURE VESTING.— 
"(A) IN GENERAL.—^For purposes of determining whether 
any distribution which becomes payable to the recipient 
on account of the employee's separation from service is 
a lump sum distribution, the balance to the credit of the 
employee shall be determined without regard to any 
increase in vesting which may occur if the employee is 
reemployed by the employer. 
"(B) RECAPTURE IN CERTAIN CASES.—If— 
Regulations. 
"(i) an amount is treated as a lump sum distribution 
by reason of subparagraph (A), 
"(ii) special limip sum treatment appUes to such 
distribution, 
"(iii) the employee is subsequently reemployed by 
the employer, and 
"(iv) as a result of services performed after being 
so reemployed, there is an increase in the employee's 
vesting for benefits accrued before the separation 
referred to in subparagraph (A), 
imder regulations prescribed by the Secretary, the tax 
imposed by this chapter for the taxable year (in which 
the increase in vesting first occurs) shall be increased by 
the reduction in tax which resulted from the special lump 
sum treatment (and any election under paragraph (4XB) 
shall not be taken into account for purposes of determining 
whether the employee may make another election under 
paragraph (4XB)). 
"(C) SPECIAL LUMP SUM TREATMENT.—For purposes of 
this paragraph, special lump sum treatment apphes to 
any distribution if any portion of such distribution is taxed 
under tiie subsection by reason of an election under para-
graph (4XB). 
"(D) VESTING.—^For purposes of this paragraph, the term 
Vesting^ means the portion of the accrued benefits derived 
from employer contributions to which the participant has 
a nonforfeitable right. 
106 STAT. 308 
PUBLIC LAW 102-318—JULY 3, 1992 
"(7) COORDINATION WITH FOREIGN TAX CREDIT LIMITATIONS.— 
Subsections (a), (b), and (c) of section 904 shall be applied 
separately with respect to any lump sum distribution on which 
tax is imposed under paragraph (1), and the amount of such 
distribution shall be treated as the taxable income for purposes 
of such separate application. 
"(e) OTHER RULES APPLICABLE TO EXEMPT TRUSTS.— 
"(1) ALTERNATE PAYEES.— 
"(A) ALTERNATE PAYEE TREATED AS DISTRIBUTEE.—For 
purposes of subsection (a) and section 72, an alternate 
payee who is the spouse or former spouse of the participant 
shall be treated as the distributee of any distribution or 
payment made to the alternate payee imder a qualified 
domestic relations order (as defined in section 414(p)). 
"(B) ROLLOVERS.—If any amount is paid or distributed 
to an alternate payee who is the spouse or former spouse 
of the participant by reason of any qualified domestic rela-
tions order (within the meaning of section 414(p)), sub-
section (c) shall apply to such distribution in the same 
manner as if such alternate payee were the employee. 
"(2) 
DISTRIBUTIONS BY UNITED STATES TO NONRESIDENT 
ALIENS.—^The amoimt includible under subsection (a) in the 
gross income of a nonresident alien with respect to a dis-
tribution made by the United States in respect of services 
performed by an employee of the United States shall not exceed 
an amount which bears the same ratio to the amount includible 
in gross income without regard to this paragraph as— 
"(A) the aggregate basic pay paid by the United States 
to such employee for such services, reduced by the amoimt 
of such basic pay which was not includible in gross income 
by reason of being from sources without the United States, 
be£u*s to 
"(B) the aggregate basic pay paid by the United States 
to such employee for such services. 
In the case of distributions under the civil service retirement 
laws, the term "basic pa/ shall have the meaning provided 
in section 8331(3) of title 5, United States Code. 
"(3) CASH OR DEFERRED ARRANGEMENTS.—For purposes of 
this title, contributions made by an employer on behalf of 
an employee to a trust which is a part of a qualified cash 
or deferred arrangement (as defined in section 401(k)(2)) shall 
not be treated as distributed or made available to the employee 
nor as contributions made to the trust by the employee merely 
because the arrangement includes provisions under which the 
employee has an election whether the contribution will be made 
to the trust or received by the employee in cash. 
"(4) NET UNREALIZED APPRECIATION.— 
"(A) 
AMOUNTS 
ATTRIBUTABLE 
TO 
EMPLOYEE 
CON-
TRIBUTIONS.—For purposes of subsection (a) and section 
72, in the case of a distribution other than a lump sum 
distribution, the amount actually distributed to any dis-
tributee from a trust described in subsection (a) shall not 
include any net unrealized appreciation in securities of 
the employer corporation attributable to amounts contrib-
uted by the employee (other than deductible employee con-
tributions within the meaning of section 72(o)(5)). This 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 309 
subparagraph shall not apply to a distribution to which 
subsection (c) applies. 
"(B) 
AMOUNTS 
ATTRIBUTABLE 
TO 
EMPLOYER 
CON-
TRIBUTIONS.—^For purposes of subsection (a) and section 
72, in the case of any lump sum distribution which includes 
securities of the employer corporation, there shall be 
excluded from gross income the net unrealized appreciation 
attributable to that part of the distribution which consists 
of securities of the employer corporation. In accordance 
with rules prescribed by the Secretary, a taxpayer may 
elect, on the return of tax on which a lump sum distribution 
is required to be included, not to have this subparagraph 
apply to such distribution. 
"(C) DETERMINATION OF AMOUNTS AND ADJUSTMENTS.— 
For purposes of subparagraphs (A) and (B), net imrealized 
appreciation and the resulting adjustments to basis shall 
be determined in accordance with regulations prescribed 
by the Secretary. 
"(D) LUMP S
U
M DISTRIBUTION.—^For purposes of this para-
graph, the term lump sum distribution' has the meaning 
given such term by subsection (dX4XA) (without regard 
to subsection (dX4)(F)). 
"(E) DEFINITIONS RELATING TO SECURITIES.—For purposes 
of this paragraph— 
"(i) SECURITIES.—^The term 'securities' means only 
shares of stock and bonds or debentures issued by 
a corporation with interest coupons or in registered 
form. 
"(ii) SECURITIES OF THE EMPLOYER.—^The term 'secu-
rities of the employer corporation' includes securities 
of a parent or subsidiary corporation (as defined in 
subsections (e) and (f) of section 424) of the employer 
corporation. 
"(5) TAXABILITY OF BENEFICIARY OF CERTAIN FOREIGN SITUS 
TRUSTS,—For purposes of subsections (a), (b), and (c), a stock 
bonus, pension, or profit-sharing trust which would qualify 
for exemption from tax imder section 501(a) except for the 
fact that it is a trust created or organized outside tiie United 
States shall be treated as if it were a trust exempt from 
tax under section 501(a). 
"(f) 
WRITTEN EXPLANATION TO RECIPIENTS OF DISTRIBUTIONS 
ELIGIBLE FOR ROLLOVER TREATMENT.— 
"(1) IN GENERAL.—^The plan administrator of any plan shall, 
withjii a reasonable period of time before making an eUgible 
rollover distribution from an eligible retirement plan, provide 
a written explanation to the recipient— 
"(A) of the provisions under which the recipient may 
have the distribution directly transferred to another eligible 
retirement plan, 
"(B) of the provision which requires the withholding,of 
tax on the distribution if it is not directly transferred 
to another eligible retirement plan, 
"(C) of the provisions under which the distribution will 
not be subject to tax if transferred to an ehgible retirement 
plan withm 60 days after the date on which the recipient 
received the distribution, and 
106 STAT. 310 
PUBLIC LAW 102-318—JULY 3, 1992 
^ 
*
*
(
D
) if applicable, of the provisions of subsections (d) 
and (e) of this section. 
"(2) DEFINITIONS.—^For purposes of this subsection— 
"(A) 
EUGIBLE 
ROLLOVER 
DISTRIBUTION.—The 
term 
'eUgible rollover distribution' has the same meaning as 
when used in subsection (c) of this section or paragraph 
(4) of section 403(a). 
"(B) EUGIBLE RETIREMENT PLAN.—The term 'eKgible 
retirement plan' has the meaning given such term by sub-
section (cXSXB)." 
(b) CONFORMING AMENDMENTS.— 
26 use 55. 
(1) Paragraph (1) of section 55(c) is amended by striking 
"section 402(0)" and inserting "section 402(d)''. 
26 use 62. 
(2) Paragraph (8) of section 62(a) (relating to certain portion 
of lump-sum distributions from pension plans taxed under sec-
tion 402(e)) is amended by striking "402(0)" in the text and 
heading and inserting "402(d)". 
26 use 72. 
(3) Paragraph (4) of section 72(o) (relating to special rule 
for treatment of rollover amount) is amended by striking "sec-
tions 402(aX5), 402(aX7)" and inserting "sections 402(c)". 
26 use 219. 
(4) Paragraph (2) of section 219(d) (relating to recontributed 
amoimt) is amended by striking "section 402(aX5), 402(aX7)" 
and inserting "section 402(c)". 
26 use 401. 
(5) Paragraph (20) of section 401(a) is amended— 
(A) by striking "a qualified total distribution described 
in section 402(aX5XEXiXI)** and inserting "1 or more dis-
tributions within 1 taxable year to a distributee on account 
of a termination of the plan of which the trust is a part, 
or in the case of a profit-sharing or stock bonus plan, 
a complete discontinuance of contributions under such 
plan", and 
(B) by adding at the end the following new sentence: 
"For purposes of this paragraph, rules similar to the rules 
of section 402(aX6XB) (as in effect before its repeal by 
section 211 of the Unemployment Compensation Amend-
ments of 1992) shall apply." 
(6) Clause (v) of section 401(aX28XB) (relating to coordination 
with distribution rules) is amended to read as follows: 
"(v) COORDINATION WITH DISTRIBUTION RULES.^Any dis-
tribution required by this subparagraph shall not be taken 
into account in determining whether a subsequent distribution 
is a lump sum distribution under section 402(dX4XA) or in 
determining whether section 402(cX 
10) applies." 
(7) Subclause (IV) of section 401(kX2XBXi) is amended by 
striking "section 402(aX8)" and inserting "section 402(eX3)". 
(8) Subparagraph (B)(ii) of section 401(kX10) (relating to 
distributions that must be lump-sum distributions) is 
amended— 
' 
(A) by striking "section 402(eX4)" and inserting "section 
402(d)(4)", and 
(B) by striking "subparagraph (H)" and inserting "sub-
paragraph (F)". 
26 use 402. 
(9) Section 402(gXl) is amended by striking "subsections 
(aX8)" and inserting "subsections (eX3)". 
(10) Section 402(i) is amended by striking "subsection (eX4)" 
and inserting "subsection (dX4)". 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 311 
(11) Subsection (j) of section 402 is amended by striking 26 use 402. 
"(aXD or (eX4XJ)'' and inserting "(0X4)". 
(12XA) Clause (i) of section 403(aX4XA) is amended by insert- 26 use 403. 
ing "in an eligible rollover distribution (within tlie meaning 
of section 402(cX4)r before the comma at the end thereof 
(B) Subparagraph (B) of section 403(aX4) is amended to read 
as follows: 
"(B) CERTAIN RULES MADE APPLICABLE.—^Rules similar 
to the rules of paragraphs (2) through (7) of section 402(c) 
shall apply for purposes of subparagraph (A)." 
(13XA) Clause (i) of section 403(bX8XA) is amended by insert-
ing "in an eligible rollover distribution (within the meaning 
of section 402(cX4))'' before the comma at the end thereof. 
(B) Paragraph (8) of section 403(b) is amended by striking 
subparagraphs (B), (C), and (D) and inserting the following: 
"(B) CERTAIN RULES MADE APPUCABLE.—Rules similar 
to the rules of paragraphs (2) through (7) of section 402(c) 
shall apply for purposes of subparagraph (A).** 
(14) Section 406(c) (relating to termination of status as 26 use 406. 
deemed employee not to be treated as separation from service 
for purposes of limitation of tax) is amended by striking "section 
402(e)'' and inserting "section 402(d)''. 
(15) Section 407(c) (relating to termination of status as 26 use 407. 
deemed employee not to be treated as separation from service 
for purposes of limitation of tax) is amended by striking "section 
402(e)'' and inserting "section 402(d)''. 
(16) Paragraph (1) of section 408(a) is amended by striking 26 use 408. 
"section 402(aX5), 402(aX7)'' and inserting "section 402(c)''. 
(17) Clause (ii) of section 408(d)(3XA) is amended to read 
as follows: 
"(ii) no amount in the account and no part of the value 
of the annuity is attributable to any source other than 
a rollover contribution (as defined in section 402) from 
an employee's trust described in section 401(a) which is 
exempt from tax under section 501(a) or from an annuity 
plan described in section 403(a) (and any earnings on such 
contribution), and the entire amount received (including 
property and other money) is paid (for the benefit of such 
individual) into another such trust or annuity plan not 
later than the 60th day on which the individual receives 
the payment or the distribution; or". 
(18) Subparagraph (B) of section 408(dX3) (relating to limita-
tions) is amended by striking the second sentence thereof. 
(19) Subparagraph (F) of section 408(d)(3) (relating to frozen 
deposits) is amended by striking "section 402(aX6XH)" and 
inserting "section 402(cX7)''. 
(20) Subclause (I) of section 414(nX5XCXiii) is amended by 26 use 414. 
striking "section 402(aX8)'' and inserting "section 402(6X3)". 
(21) Clause (i) of section 414(qX7)(B) is amended by striking 
"402(aX8)''and inserting "402(0X3)". 
(22) Paragraph (2) of section 414(s) (relating to employer 
may elect to treat certain deferrals as compensation) is amend-
ed by striking "402(aX8)" and inserting "402(eX3)". 
(23) Subparagraph (A) of section 415(bX2) (relating to annual 
26 use 4i5. 
benefit in general) is amended by striking "sections 402(aX5)" 
and inserting "sections 402(c)". 
106 STAT. 312 
PUBLIC LAW 102-318—JULY 3,1992 
26 use 415. 
(24) Subparagraph (B) of section 415(bX2) (relating to adjust-
ment for certain other forms of benefit) is amended by strUdng 
"sections 402(aX5)''and inserting "sections 402(cr. 
(25) Paragraph (2) of section 415(c) (relating to annual addi-
tion) is amended by striking "sections 402(aX5)'' and inserting 
"sections 402(c)**. 
26 use 457. 
(26) Subparagraph (B) of section 457(cX2) is amended by 
striking "section 402(aX8)'' in clause (i) thereof and inserting 
"section 402(0X3)**. 
26 use 691. 
(27) Section 691(c) (relating to coordination with section 
402(e)) is amended by striking "402(ey* in the text and heading 
and inserting "402(d)**. 
26 use 871. 
(28) Subparagraph (B) of section 871(aXl) (relating to income 
other than capital gains) is amended by striking "402(aX2), 
403(aX2), or**. 
(29) Paragraph (1) of section 871(b) (relating to imposition 
of tax) is amended by striking "402(0X1)" and inserting 
"402(dXl)''. 
(30) Paragraph (1) of section 871(k) is amended by striking 
"section 402(8X4)" and inserting "section 402(eX2r. 
26 use 877. 
(31) Subsection (b) of section 877 (relating to alternative 
tax) is amended by striking "402(0X1)" and inserting "402(dXl)". 
26 use 1441. 
(32) Subsection (b) of section 1441 (relating to income items) 
is amended by striking "402(aX2), 403(aX2), or". 
(33) Paragraph (5) of section 1441(c) (relating to special items) 
is amended by striking "402(aX2), 403(aX2), or". 
26 use 3121. 
(34) Subparagraph (A) of section 3121(vXl) is amended by 
striking "section 402(aX8)" and inserting "section 402(eX3). 
26 use 3306. 
(35) Subparagraph (A) of section 3306(rXl) is amended by 
striking "section 402(aX8)" and inserting "section 402(eX3)". 
26 use 3405. 
(36) Subsection (a) of section 3405 is amended by striking 
"PENSIONS, ANNUITIES, ETC.—" firom the heading thereof and 
inserting "PERIODIC PAYMENTS.—". 
(37) Subsection (b) of section 3405 (relating to nonperiodic 
distribution) is amended— 
(A) by striking "the amount determined under paragraph 
(2)" from paragraph (1) thereof and inserting "an amount 
equal to 10 percent of such distribution"; and 
(B) by striking paragraph (2) (relating to amount of 
witUiolding) and redesignating paragraph (3) as paragraph 
(2). 
(38) Paragraph (4) of section 3405(d) (relating to qualified 
total distributions) is hereby repealed. 
(39) Paragraph (8) of section 3405(d) (relating to maximum 
amoimts withheld) is amended to read as follows: 
"(8) MAXIMUM AMOUNT WITHHELD.—^The maximimi amount 
to be withheld under this section on any designated distribution 
shall not exceed tiie sum of the amount of money and the 
fair market value of other property (other than securities of 
the employer corporation) received in the distribution. No 
amount shall be required to be withheld under this section 
in the case of any designated distribution which consists only 
of seciuities of tlie employer corporation and cash (not in excess 
of $200) in lieu of financial shares. For purposes of this para-
graph, the term 'securities of the employer corporation has 
the meaning given such term by section 402(eX4XE)." 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 313 
26 use 411. 
(40) Subparagraph (A) of section 3405(dX13) is amended by 26 use 3405. 
striking "(bXS)" and inserting "(bX2r. 
(41) Subparagraph (A) of section 4973(bXl) is amended by 26 use 4973. 
striking "sections 402(aX5), 402(aX7)'' and inserting "sections 
402(0)". 
(42) Paragraph (4) of section 4980A(c) (relating to special 26 use 4980A. 
rule where taxpayer elects income averaging) is amended by 
striking 
"section 
402(eX4)(B)" 
and 
inserting 
"section 
402(dX4XB)". 
(43) Subparagraph (C) of section 7701CJX1) is amended by 26 use 7701. 
striking "section 402(aX8)'' and inserting "section 402(eX3)''. 
(44) Section 411(dX3) is amended by adding at the end the 
following new sentence: "For purposes of this paragraph, in 
the case of the complete discontinuance of contributions under 
a profit-sharing or stock bonus plan, such plan shall be treated 
as having terminated on the day on which the plan adminis-
trator notifies the Secretary (in accordance witn regulations) 
of the discontinuance." 
(d) MODEL EXPLANATION.—The Secretary of the Treasury or his 
delegate shall develop a model explsuiation which a plan adminis-
trator may provide to a recipient in order to meet the requirements 
of section 402(0 of the Internal Revenue Code of 1986. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—^The amendments made by this section shall 
'" apply to distributions after December 31,1992. 
(2) SPECIAL RULE FOR PARTIAL DISTRIBUTIONS.—For purposes 
of section 402(aX5)(D)(i)(II) of the Internal Revenue Code of 
1986 (as in effect before the amendments made by this section), 
a distribution before January 1, 1993, which is made before 
or at the same time as a series of periodic payments shall 
not be treated as one of such series if it is not substantially 
equal in amount to other payments in such series. 
26 u s e 402 note. 
26 use 402 note. 
SEC. 522. REQUIREMENT 
THAT 
QUALIFIED 
OPTIONAL 
TRUSTEE-TO-TRUSTEE 
EUGIBLE ROLLOVER DISTRIBUTIONS. 
PLANS 
INCLUDE 
TRANSFERS 
OF 
(a) OPTIONAL TRANSFERS.— 
(1) QUALIFIED PLANS.—Subsection (a) of section 401 (relating 
to requirements for qualification) is amended by inserting after 
paragraph (30) the following new paragraph: 
"(31) OPTIONAL DIRECT TRANSFER OF EUGIBLE ROLLOVER DIS-
TRIBUTIONS.— 
"(A) IN GENERAL.—^A trust shall not constitute a qualified 
trust under this section unless the plan of which such 
trust is a part provides that if the distributee of any eligible 
rollover distribution— 
"(i) elects to have such distribution paid directly 
to an eligible retirement plan, and 
"(ii) specifies the eligiole retirement plan to which 
such distribution is to be paid (in such form and at 
such time as the plan administrator may prescribe), 
such distribution shall be made in the form of a direct 
trustee-to-trustee transfer to the eligible retirement plan 
so specified. 
"(B) LIMITATION.—Subparagraph (A) shall apply only to 
the extent that the eligible rollover distribution would be 
includible in gross income if not transferred as provided 
26 u s e 401. 
106 STAT. 314 
PUBLIC LAW 102-318—JULY 3, 1992 
in subparagraph (A) (determined without regard to sections 
402(c) and 403(aX4)). 
"(C) ELIGIBLE ROLLOVER DISTRIBUTION.—For purposes of 
this paragraph, the term 'ehgible rollover distribution' has 
the meaning given such term by section 402(fX2)(A). 
"(D) ELIGIBLE RETIREMENT PLAN.—For purposes of this 
paragraph, the term 'eligible retirement plan' has tiie 
me£uiing given such term by section 402(cX8XB), except 
that a QuaUfied trust shall be considered an eligible retire-
ment plan only if it is a defined contribution plan, the 
terms of which permit the acceptance of rollover dis-
tributions." 
26 use 404. 
(2) EMPLOYEE'S ANNUITIES.-Paragraph (2) of section 404(a) 
(relating to employee's annuities) is amended by striking "and 
(27)" and inserting "(27), and (31)". 
(3) 
ANNUITIES 
PURCHASED BY CHARITIES AND PUBLIC 
26 use 403. 
SCHOOLS.—Paragraph (10) of section 403(b) (relating to dis-
tribution requirements) is amended by striking "section 
401(aX9)" and inserting "sections 401(aX9) and 401(aX31)". 
(b) WITHHOLDING ON ELIGIBLE ROLLOVER DISTRIBUTIONS WHICH 
ARE NOT ROLLED OVER.— 
26 use 3405. 
(1) IN GENERAL.—Section 3405 (relating to special rules for 
pensions, annuities, and certain other deferred income) is 
amended by redesignating subsections (c), (d), and (e) as sub-
sections (d), (e), and (f) and by inserting after subsection (b) 
the following new subsection: 
"(c) ELIGIBLE ROLLOVER DISTRIBUTIONS.— 
"(1) IN GENERAL.—In the case of any designated distribution 
which is em eligible rollover distribution— 
"(A) subsections (a) and (b) shall not applv, and 
"(B) the payor of such distribution shaU withhold from 
such distribution an amount equal to 20 percent of such 
distribution. 
"(2) EXCEPTION.—Paragraph (IXB) shall not apply to any 
distribution if the distributee elects under section 401(a)(31)(A) 
to have such distribution paid directly to an eligible retirement 
plan. 
"(3) ELIGIBLE ROLLOVER DISTRIBUTION.—For purposes of this 
subsection, the term 'eUgible rollover distribution' has the 
meaning given such term by section 402(f)(2XA) (or in the 
case of an annuity contract imder section 403(b), a distribution 
from such contract described in section 402(fX2)(A))." 
(2) CONFORMING AMENDMENTS.— 
(A) Section 3405(aXl) is amended by striking "subsection 
(dX2)" and inserting "subsection (e)(2y'. 
(B) Section 3405(b)(1) is amended by striking "subsection 
^^' 1 > 
(d)(3)" and inserting "subsection (e)(3)". 
(C) Section 3405(d)(1) (as redesignated by paragraph (1)) 
is amended by striking "subsection (dXD" and inserting 
"subsection (e)(1)". 
26 use 3402, 
(D) Sections 3402(oX6) and 6047(dXl) are each amended 
^^^'^- 
by striking "section 3405(dXl)'' and inserting "section 
3405(eXl)". 
(E) Section 6047(d)(1)(A) is amended by striking "section 
3405(dXl)" and inserting "section 3405(dX3)". 
26 use 6652. 
(F) Section 6652(h) is amended by striking "section 
3405(dX10XB)" and inserting "section 3405(eX10)(B)". 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 315 
(c) EXCLUSION FROM INCOME.— 
(1) QUALIFIED TRUSTS.—Subsection (e) of section 402 (relating 26 use 402. 
to taxability of beneficiary of employees' trust), as amended 
by section 521, is amended by adding at the end the following 
new paragraph: 
**(6) DIRECT TRUSTEE-TO-TRUSTEE TRANSFERS.—Any amount 
transferred in a direct trustee-to-trustee transfer in accordance 
with section 401(aX31) shall not be includible in gross income 
for the taxable year of such transfer." 
(2) EMPLOYEE ANNUITIES.—Subsection (a) of section 403 is 26 use 403. 
amended by adding at the end the following new paragraph: 
"(5) DIRECT TRUSTEE-TO-TRUSTEE TRANSFER.—Any amount 
transferred in a direct trustee-to-trustee transfer in accordance 
with section 401(aX31) shall not be includible in gross income 
for the taxable year of such transfer." 
(3) ANNUITY CONTRACTS PURCHASED BY CHARITIES AND PUBLIC 
SCHOOLS.—Section 403(bX10) is amended by adding at the end 
the following new sentence: "Any amount transferred in an 
direct trustee-to-trustee transfer in accordance with section 
401(aX31) shall not be includible in gross income for the taxable 
year of the transfer." 
(d) EFFECTIVE DATES.— 
26 u s e 401 note. 
(1) IN GENERAL.—^Except as provided in paragraph (2), the 
amendments made by this section shall apply to distributions 
after December 31,1992. 
(2) TRANSITION RULE FOR CERTAIN ANNUITY CONTRACTS.— 
If, as of July 1, 1992, a State law prohibits a direct trustee-
to-trustee transfer from an annuity contract described in section 
403(b) of the Internal Revenue (Jode of 1986 which was pur-
chased for an employee by an employer which is a State or 
a political subdivision thereof (or an agenpy or instrumentaUty 
of any 1 or more of either), the amendments made by this 
section shall not apply to distributions before the earlier of— 
(A) 90 days after the first dav after July 1, 1992, on 
which such transfer is allowed under State law, or 
(B) January 1,1994. 
SEC. 523. DATE FOR ADOPTION OF PLAN AMENDMENTS. 
26 USC 401 note. 
If any amendment made by this subtitle requires an amendment 
to any plan, such plan amendment shall not be required to be 
made before the first plan year beginning on or an»r January 
1,1994, if— 
(1) during the period after such amendment takes effect 
and before such first plan year, the plan is operated in accord-
ance with the requirements of such amendment, and 
(2) such plan amendment applies retroactively to such period. 
Subtitle C—Other Provisions 
SEC. 531. MODIFICATIONS TO FEDERAL UNEMPLOYMENT ACCOUNTS. 
(a) MODIFICATIONS TO EXTENDED UNEMPLOYMENT COMPENSATION 
ACCOUNT.— 
(1) TRANSFERS TO ACCOUNT.—Paragraph (1) of section 905(b) 
of the Social Security Act is amended to read as follows— 42 use 1105. 
"(bXD Except as provided in paragraph (3), the Secretary of 
the Treasury shall transfer (as of the close of each month), irom 
106 STAT. 316 
PUBLIC LAW 102-318—JULY 3, 1992 
the emplo3nnent security administration account to the extended 
v
>
> ; •' 
unemplo3nnent compensation account established by subsection (a), 
an amount determined by him to be equal to the sum of— 
"(A) 100 percent of the transfers to the employment security 
administration account pursuant to section 901(bX2) during 
such month on account of liabilities referred to in section 
901(bXlXB), plus 
"(B) 20 percent of the excess of the transfers to such account 
pursuant to section 901(bX2) during such month on account 
of amounts referred to in section 901(bXlXA) over the payments 
during such month from the emplo)mient security administra-
tion account pursuant to section 901 (bX3) and (d). 
If for any such month the payments referred to in subparagraph 
(B) exceed the transfers referred to in subparagraph (B), proper 
adjustments shall be made in the amounts subsequently trans-
ferred." 
(2) INCREASE IN CEILING.—Subparagraph (B) of section 
42 use 1105. 
905(bX2) of such Act is amended by striking "three-eighths 
of 1 percent" and inserting "0.5 percent". 
(b) 
REDUCTION 
OF 
CEILING 
ON 
FEDERAL 
UNEMPLOYMENT 
42 use 1102. 
ACCOUNT.—Paragraph (2) of section 902(a) of such Act is amended 
by striking "five-eighths of 1 percent" and inserting "0.25 percent". 
(c) BORROWING BETWEEN FEDEICAL ACCOUNTS.—Title IX of such 
Act is amended by adding at the end the following new section: 
"BORROWING BETWEEN FEDERAL ACCOUNTS 
42 use 1110. 
«SEC. 910. (a) IN GENERAL.—Whenever the Secretary of the Treas-
ury (after consultation with the Secretary of Labor) determines 
that— 
"(1) the amount in the employment security administration 
account, Federal unemployment account, or extended unemploy-
ment compensation account, is insufficient to meet the antici-
pated payments from the account, 
"(2) such insufficiency may cause such account to borrow 
from the general fund of the Treasury, and 
"(3) the amount in any other such account exceeds the amount 
necessary to meet the anticipated payments from such other 
account, 
the Secretary shall transfer to the account referred to in paragraph 
(1) from the account referred to paragraph (3) an amount equal 
to the insufficiency determined under paragraph (1) (or, if less, 
the excess determined under paragraph (3)). 
"(b) TREATMENT OF ADVANCE.—^Any amount transferred under 
subsection (a)— 
"(1) shall be treated as a noninterest-bearing repayable 
* 
advance, and 
"(2) shall not be considered in computing the amount in 
any account for purposes of the application of sections 901(f)(2), 
902(b), and 905(b). 
"(c) REPAYMENT.—^Whenever the Secretary of the Treasury (after 
consultation with the Secretary of Labor) determines that the 
amount in the account to which an advance is made under sub-
section (a) exceeds the amount necessary to meet the anticipated 
pajonents from the account, the Secretary shall transfer from the 
account to the account from which the advance was made an amount 
equal to the lesser of the amount so advanced or such excess." 
(d) REPEAL OF EXPIRED PROVISIONS.— 
. 
. . . 
PUBLIC LAW 102-318—JULY 3, 1992 
106 STAT. 317 
(1) Paragraph (2) of section 901(f) of such Act is amended— 42 use lioi. 
(A) by striking "(A) Except as provided in subparagraph 
(B), the" and inserting The", and 
(B) by striking subparagraph (B). 
(2) Section 901 of such Act is amended by striking subsection 
(g). 
(3) Subsection (g) of section 904 is amended by striking 42 U
S
C 1104. 
all of such subsection that follows the 1st sentence. 
(e) EFFECTIVE DATES.— 
42 use 1
1
0
2 
(1) IN GENERAL.—^Except as provided in paragraph (2), the note. 
amendments made by this section shall take effect on the 
date of the enactment of this Act. 
(2) CHANGES IN CEILING AMOUNTS.—^The amendments made 
by subsection (aX2) and (b) shall apply to fiscsd years beginning 
after September 30,1993. 
SEC. 532. REQUIREMENT OF DEPOSITS BY FEDERAL AGENCIES FOR 
UNEMPLOYMENT BENEFITS. 
(a) GENERAL RULE.—Subsection (c) of section 8509 of title 5, 
United States Code, is amended by adding at the end thereof 
the following new paragraph: 
"(3) If £iny Federal agency does not deposit in the Federal Employ-
ees Compensation Account any amount before the date 30 days 
after the date on which the Secretary of Labor has notified such 
agency that it is required to so deposit such amount, the Secretary 
of Labor shall notify the Secretary of the Treasury of the failure 
to make such deposit and the Secretary of the Treasury shall 
transfer such amount to the Federal Employees Compensation 
Account from amounts otherwise appropriated to such Federal 
agency." 
(b) EFFECTIVE DATE.—^The amendment made by subsection (a) 5 use 8509 note. 
shall apply to failures outstanding on the date of the enactment 
of this Act or at any time thereafter. 
SEC 533. REPORT ON ALLOCATION OF ADMINISTRATIVE FUNDS. 
Subsection (a) of section 304 of the Emergency Unemplojnnent 42 use 502 note. 
Compensation Act of 1991 (Public Law 102-164, as amended) is 
amended by striking "within the 12-month period beginning on 
the date of the enactment of this Act" and inserting **before Decem-
ber 31,1994". 
SEC. 534. EXTENSION OF COMMISSION ON INTERSTATE CHILD SUP-
PORT. 
(a) IN GENERAL.—Section 126 of the Family Support Act of 1988 
(42 U.S.C. 666 note; 102 Stat. 2355) is amended— 
(1) in subsection (d)(2), by striking "Majr" and inserting 
"August"; and 
(2) in subsection (fKD, by striking "July 1" and inserting 
"September 30". 
106 STAT. 318 
PUBLIC LAW 102-318—JULY 3, 1992 
42 use 666 note. 
(b) EFFECTIVE DATE.—^The amendments made by this section 
shall take effect on June 30,1992. 
Approved July 3, 1992. 
LEGISLATIVE HISTORY—H.R. 5260: 
HOUSE REPORTS: Nos. 102-543, Pt. 1 (Comm. on Ways and Means) and Pt. 2 (Comm. 
on Government Operations), and 102-650 (Ck>mm. of Conference). 
CONGRESSIONAL RECORD, Vol. 138 (1992): 
June 9, considered and passed House. 
June 18, 19, considered and passed Senate, amended. 
July 2, House and Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 28 (1992): 
July 3, Presidential statement.