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H.R. 925 - Heroes Act

SEP. 28, 2020

H.R. 925; Heroes Act

DATED SEP. 28, 2020
DOCUMENT ATTRIBUTES
Citations: H.R. 925; Heroes Act
[Editor's Note:

Asterisks indicate omitted text.

]

116TH CONGRESS
2D SESSION

H.R. ___

Making emergency supplemental appropriations for the fiscal year
ending September 30, 2021, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

Mrs. LOWEY (for herself, Mr. SCOTT of Virginia, Mr. PALLONE, Ms. WATERS,
Mr. GRIJALVA, Mrs. CAROLYN B. MALONEY of New York, Ms. VELAZQUEZ,
Mr. TAKANO, Mr. NEAL, and Ms. LOFGREN) introduced the following bill;
which was referred to the Committee on _____

A BILL

Making emergency supplemental appropriations for the fiscal year ending September 30, 2021, 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. SHORT TITLE.

This Act may be cited as "The Heroes Act".

* * *

TITLE III — TAX PROVISIONS

SEC. 301. IMPROVED COORDINATION BETWEEN PAYCHECK PROTECTION PROGRAM AND EMPLOYEE RETENTION TAX CREDIT.

(a) AMENDMENT TO PAYCHECK PROTECTION PROGRAM. — Section 1106(a)(8) of the CARES Act (15 U.S.C. 9005(a)(8)) is amended by inserting ", except that such costs shall not include qualified wages taken into account in determining the credit allowed under section 2301 of this Act" before the period at the end.

(b) AMENDMENTS TO EMPLOYEE RETENTION TAX

(1) IN GENERAL. — Section 2301(g) of the CARES Act (Public Law 116–136; 26 U.S.C. 3111 note) is amended to read as follows:

"(g) ELECTION TO NOT TAKE CERTAIN WAGES INTO ACCOUNT. —

"(1) IN GENERAL. — This section shall not apply to so much of the qualified wages paid by an eligible employer as such employer elects (at such time and in such manner as the Secretary may prescribe) to not take into account for purposes of this section.

"(2) COORDINATION WITH PAYCHECK PROTECTION PROGRAM. — The Secretary,in consultation with the Administrator of the Small Business Administration, shall issue guidance providing that payroll costs paid or incurred during the covered period shall not fail to be treated as qualified wages under this section by reason of an election under paragraph (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 1106(g). Terms used in the preceding sentence which are also used in section 1106 shall have the same meaning as when used in such section.".

(2) CONFORMING AMENDMENTS. —

(A) Section 2301 of the CARES Act (Public Law 116–136; 26 U.S.C. 3111 note) is amended by striking subsection (j).

(B) Section 2301(l) of the CARES Act (Public Law 116–136; 26 U.S.C. 3111 note) is amended by striking paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the provisions of the CARES Act (Public Law 116–136) to which they relate.

 * * *

DIVISION F — REVENUE PROVISIONS

SEC. 100. SHORT TITLE, ETC.

(a) SHORT TITLE. — This division may be cited as the "COVID–19 Tax Relief Act of 2020".

(b) TABLE OF CONTENTS. — The table of contents for this division is as follows:

Sec. 100. Short title, etc.

TITLE I — ECONOMIC STIMULUS

Subtitle A — Additional Recovery Rebates to Individuals

Sec. 101. Additional recovery rebates to individuals.

Subtitle B — Earned Income Tax Credit

Sec. 111. Strengthening the earned income tax credit for individuals with no qualifying children.

Sec. 112. Taxpayer eligible for childless earned income credit in case of qualifying children who fail to meet certain identification requirements.

Sec. 113. Credit allowed in case of certain separated spouses.

Sec. 114. Elimination of disqualified investment income test.

Sec. 115. Application of earned income tax credit in possessions of the United States.

Sec. 116. Temporary special rule for determining earned income for purposes of earned income tax credit.

Subtitle C — Child Tax Credit

Sec. 121. Child tax credit improvements for 2020.

Sec. 122. Application of child tax credit in possessions.

Subtitle D — Dependent Care Assistance

Sec. 131. Refundability and enhancement of child and dependent care tax credit.

Sec. 132. Increase in exclusion for employerprovided dependent care assistance.

Subtitle E — Credits for Paid Sick and Family Leave

Sec. 141. Extension of credits.

Sec. 142. Repeal of reduced rate of credit for certain leave.

Sec. 143. Increase in limitations on credits for paid family leave.

Sec. 144. Election to use prior year net earnings from selfemployment in determining average daily selfemployment income.

Sec. 145. Federal, State, and local governments allowed tax credits for paid sick and paid family and medical leave.

Sec. 146. Certain technical improvements.

Sec. 147. Credits not allowed to certain large employers.

Subtitle F — Deduction of State and Local Taxes

Sec. 151. Elimination for 2020 limitation on deduction of State and local taxes.

TITLE II — PROVISIONS TO PREVENT BUSINESS INTERRUPTION

Sec. 201. Improvements to employee retention and rehiring credit.

Sec. 202. Certain loan forgiveness and other business financial assistance under CARES Act not includible in gross income.

Sec. 203. Clarification of treatment of expenses paid or incurred with proceeds from certain grants and loans.

TITLE III — NET OPERATING LOSSES

Sec. 301. Limitation on excess business losses of noncorporate taxpayers restored and made permanent.

Sec. 302. Certain taxpayers allowed carryback of net operating losses arising in 2019 and 2020.

TITLE I — ECONOMIC STIMULUS 

Subtitle A — Additional Recovery Rebates to Individuals

SEC. 101. ADDITIONAL RECOVERY REBATES TO INDIVIDUALS.

(a) IN GENERAL. — Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after section 6428 the following new section:

"SEC. 6428A. ADDITIONAL RECOVERY REBATES TO INDIVIDUALS.

"(a) IN GENERAL. — In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2020 an amount equal to the additional rebate amount determined for such taxable year.

"(b) ADDITIONAL REBATE AMOUNT. — For purposes of this section, the term 'additional rebate amount' means, with respect to any taxpayer for any taxable year, the sum of —

"(1) $1,200 ($2,400 in the case of a joint return), plus

"(2) $500 multiplied by the number of dependents of the taxpayer for such taxable year.

"(c) ELIGIBLE INDIVIDUAL. — For purposes of this section, the term 'eligible individual' means any individual other than —

"(1) any nonresident alien individual,

"(2) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and

"(3) an estate or trust.

"(d) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME. — The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's modified adjusted gross income as exceeds —

"(1) $150,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)),

"(2) $112,500 in the case of a head of household (as defined in section 2(b)), and

"(3) $75,000 in any other case.

"(e) DEFINITIONS AND SPECIAL RULES. —

"(1) MODIFIED ADJUSTED GROSS INCOME. — For purposes of this subsection (other than this paragraph), the term 'modified adjusted gross income' means adjusted gross income determined without regard to sections 911, 931, and 933.

"(2) DEPENDENT DEFINED. — For purposes of this section, the term 'dependent' has the meaning given such term by section 152.

"(3) CREDIT TREATED AS REFUNDABLE. — The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.

"(4) IDENTIFICATION NUMBER REQUIREMENT. —

"(A) IN GENERAL. — The $1,200 amount in subsection (b)(1) shall be treated as being zero unless the taxpayer includes the TIN of the taxpayer on the return of tax for the taxable year.

"(B) JOINT RETURNS. — In the case of a joint return, the $2,400 amount in subsection (b)(1) shall be treated as being —

"(i) zero if the TIN of neither spouse is included on the return of tax for the taxable year, and

"(ii) $1,200 if the TIN of only one spouse is so included.

"(C) DEPENDENTS. — A dependent shall not be taken into account under subsection (b)(2) unless the TIN of such dependent is included on the return of tax for the taxable year. 

"(D) COORDINATION WITH CERTAIN ADVANCE PAYMENTS. — In the case of any payment made pursuant to subsection (g)(5)(A)(ii), a TIN shall be treated for purposes of this paragraph as included on the taxpayer's return of tax if such TIN is provided pursuant to such subsection.

"(f) COORDINATION WITH ADVANCE REFUNDS OF CREDIT. —

"(1) REDUCTION OF REFUNDABLE CREDIT. — The amount of the credit which would (but for this paragraph) be allowable under subsection (a) shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer (or any dependent of the taxpayer) under subsection (g). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).

"(2) JOINT RETURNS. — In the case of a refund or credit made or allowed under subsection (g) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.

"(g) ADVANCE REFUNDS AND CREDITS. —

"(1) IN GENERAL. — Subject to paragraph (5), each individual who was an eligible individual for such individual's first taxable year beginning in 2019 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund amount for such taxable year.

"(2) ADVANCE REFUND AMOUNT. — For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such taxable year if this section (other than subsection (f) and this subsection) had applied to such taxable year.

"(3) TIMING AND MANNER OF PAYMENTS. —

"(A) TIMING. — The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this section as rapidly as possible. No refund or credit shall be made or allowed under this subsection after December 31, 2020.

"(B) DELIVERY OF PAYMENTS. — Notwithstanding any other provision of law, the Secretary may certify and disburse refunds payable under this subsection electronically to any account to which the payee authorized, on or after January 1, 2018, the delivery of a refund of taxes under this title or of a Federal payment (as defined in section 3332 of title 31, United States Code).

"(C) WAIVER OF CERTAIN RULES. — Notwithstanding section 3325 of title 31, United States Code, or any other provision of law, with respect to any payment of a refund under this subsection, a disbursing official in the executive branch of the United States Government may modify payment information received from an officer or employee described in section 3325(a)(1)(B) of such title for the purpose of facilitating the accurate and efficient delivery of such payment. Except in cases of fraud or reckless neglect, no liability under sections 3325, 3527, 3528, or 3529 of title 31, United States Code, shall be imposed with respect to payments made under this subparagraph.

"(4) NO INTEREST. — No interest shall be allowed on any overpayment attributable to this section.

"(5) APPLICATION TO INDIVIDUALS WHO DO NOT FILE A RETURN OF TAX FOR 2019. —

"(A) IN GENERAL. — In the case of an individual who, at the time of any determination made pursuant to paragraph (3), has not filed a tax return for the year described in paragraph (1), the Secretary shall —

"(i) apply paragraph (1) by substituting '2018' for '2019', and

"(ii) in the case of a specified individual who has not filed a tax return for such individual's first taxable year beginning in 2018, determine the advance refund amount with respect to such individual without regard to subsections (d) and on the basis of information with respect to such individual which is provided by —

"(I) in the case of a specified social security beneficiary or a specified supplemental security income recipient, the Commissioner of Social Security,

"(II) in the case of a specified railroad retirement beneficiary, the Railroad Retirement Board, and

"(III) in the case of a specified veterans beneficiary, the Secretary of Veterans Affairs (in coordination with, and with the assistance of, the Commissioner of Social Security if appropriate).

"(B) SPECIFIED INDIVIDUAL. — For purposes of this paragraph, the term 'specified individual' means any individual who is —

"(i) a specified social security beneficiary,

"(ii) a specified supplemental security income recipient,

"(iii) a specified railroad retirement beneficiary, or

"(iv) a specified veterans beneficiary.

"(C) SPECIFIED SOCIAL SECURITY BENEFICIARY. — For purposes of this paragraph —

"(i) IN GENERAL. — The term 'specified social security beneficiary' means any individual who, for the last month that ends prior to the date of enactment of this section, is entitled to any monthly insurance benefit payable under title II of the Social Security Act (42 U.S.C. 401 et seq.), including payments made pursuant to sections 202(d), 223(g), and 223(i)(7) of such Act.

"(ii) EXCEPTION. — Such term shall not include any individual if such benefit is not payable for such month by reason of section 202(x) of the Social Security Act (42 U.S.C. 402(x)) or section 1129A of such Act (42 U.S.C. 1320a–8a).

"(D) SPECIFIED SUPPLEMENTAL SECURITY INCOME RECIPIENT. — For purposes of this paragraph —

"(i) IN GENERAL. — The term 'specified supplemental security income recipient' means any individual who, for the last month that ends prior to the date of enactment of this section, is eligible for a monthly benefit payable under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.) (other than a benefit to an individual described in section 1611(e)(1)(B) of such Act (42 U.S.C. 1382(e)(1)(B)), including —

"(I) payments made pursuant to section 1614(a)(3)(C) of such Act (42 U.S.C. 1382c(a)(3)(C)),

"(II) payments made pursuant to section 1619(a) (42 U.S.C. 1382h) or subsections (a)(4), (a)(7), or (p)(7) of section 1631 (42 U.S.C. 1383) of such Act, and

"(III) State supplementary payments of the type referred to in section 1616(a) of such Act (42 U.S.C. 1382e(a)) (or payments of the type described in section 212(a) of Public Law 93–66) which are paid by the Commissioner under an agreement referred to in such section 1616(a) (or section 212(a) of Public Law 93–66).

"(ii) EXCEPTION. — Such term shall not include any individual if such monthly benefit is not payable for such month by reason of subsection (e)(1)(A) or (e)(4) of section 1611 (42 U.S.C. 1382) or section 1129A of such Act (42 U.S.C. 1320a–8a).

"(E) SPECIFIED RAILROAD RETIREMENT BENEFICIARY. — For purposes of this paragraph, the term 'specified railroad retirement beneficiary' means any individual who, for the last month that ends prior to the date of enactment of this section, is entitled to a monthly annuity or pension payment payable (without regard to section 5(a)(ii) of the Railroad Retirement Act of 1974 (45 U.S.C. 231d(a)(ii))) under —

"(i) section 2(a)(1) of such Act (45 U.S.C. 231a(a)(1)),

"(ii) section 2(c) of such Act (45 U.S.C. 231a(c)),

"(iii) section 2(d)(1) of such Act (45 U.S.C. 231a(d)(1)), or

"(iv) section 7(b)(2) of such Act (45 U.S.C. 231f(b)(2)) with respect to any of the benefit payments described in subparagraph (C)(i).

"(F) SPECIFIED VETERANS BENEFICIARY. — For purposes of this paragraph —

"(i) IN GENERAL. — The term 'specified veterans beneficiary' means any individual who, for the last month that ends prior to the date of enactment of this section, is entitled to a compensation or pension payment payable under —

"(I) section 1110, 1117, 1121, 1131, 1141, or 1151 of title 38, United States Code,

"(II) section 1310, 1312, 1313, 1315, 1316, or 1318 of title 38, United States Code,

"(III) section 1513, 1521, 1533, 1536, 1537, 1541, 1542, or 1562 of title 38, United States Code, or

"(IV) section 1805, 1815, or 1821 of title 38, United States Code, to a veteran, surviving spouse, child, or parent as described in paragraph (2), (3), (4)(A)(ii), or (5) of section 101, title 38, United States Code.

"(ii) EXCEPTION. — Such term shall not include any individual if such compensation or pension payment is not payable, or was reduced, for such month by reason of section 1505, 5313, or 5313B of title 38, United States Code.

"(G) SUBSEQUENT DETERMINATIONS AND REDETERMINATIONS NOT TAKEN INTO ACCOUNT. — For purposes of this section, any individual's status as a specified social security beneficiary, a specified supplemental security income recipient, a specified railroad retirement beneficiary, or a specified veterans beneficiary shall be unaffected by any determination or redetermination of any entitlement to, or eligibility for, any benefit, payment, or compensation, if such determination or redetermination occurs after the last month that ends prior to the date of enactment of this section.

"(H) PAYMENT TO REPRESENTATIVE PAYEES AND FIDUCIARIES. —

"(i) IN GENERAL. — If the benefit, payment, or compensation referred to in subparagraph (C)(i), (D)(i), (E), or (F)(i) with respect to any specified individual is paid to a representative payee or fiduciary, payment by the Secretary under paragraph (3) with respect to such specified individual shall be made to such individual's representative payee or fiduciary and the entire payment shall be used only for the benefit of the individual who is entitled to the payment.

"(ii) APPLICATION OF ENFORCEMENT PROVISIONS. —

"(I) In the case of a payment described in clause (i) which is made with respect to a specified social security beneficiary or a specified supplemental security income recipient, section 1129(a)(3) of the Social Security Act (42 U.S.C. 1320a–8(a)(3)) shall apply to such payment in the same manner as such section applies to a payment under title II or XVI of such Act.

"(II) In the case of a payment described in clause (i) which is made with respect to a specified railroad retirement beneficiary, section 13 of the Railroad Retirement Act (45 U.S.C. 231l) shall apply to such payment in the same manner as such section applies to a payment under such Act.

"(III) In the case of a payment described in clause (i) which is made with respect to a specified veterans beneficiary, sections 5502, 6106, and 6108 of title 38, United States Code, shall apply to such payment in the same manner as such sections apply to a payment under such title.

"(6) NOTICE TO TAXPAYER. — Not later than 15 days after the date on which the Secretary distributed any payment to an eligible taxpayer pursuant to this subsection, notice shall be sent by mail to such taxpayer's last known address. Such notice shall indicate the method by which such payment was made, the amount of such payment, and a phone number for the appropriate point of contact at the Internal Revenue Service to report any error with respect to such payment.

"(h) REGULATIONS. — The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including —

"(1) regulations or other guidance providing taxpayers the opportunity to provide the Secretary information sufficient to allow the Secretary to make payments to such taxpayers under subsection (g) (including the determination of the amount of such payment) if such information is not otherwise available to the Secretary, and

"(2) regulations or other guidance providing for the proper treatment of joint returns and taxpayers with dependents to ensure that an individual is not taken into account more than once in determining the amount of any credit under subsection (a) and any credit or refund under subsection (g).

"(i) OUTREACH. — The Secretary shall carry out a robust and comprehensive outreach program to ensure that all taxpayers described in subsection (h)(1) learn of their eligibility for the advance refunds and credits under subsection (g); are advised of the opportunity to receive such advance refunds and credits as provided under subsection (h)(1); and are provided assistance in applying for such advance refunds and credits. In conducting such outreach program, the Secretary shall coordinate with other government, State, and local agencies; federal partners; and communitybased nonprofit organizations that regularly inter face with such taxpayers.".

(b) TREATMENT OF CERTAIN POSSESSIONS. —

(1) PAYMENTS TO POSSESSIONS WITH MIRROR CODE TAX SYSTEMS. — The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the amendments made by this section. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.

(2) PAYMENTS TO OTHER POSSESSIONS. — The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents.

(3) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES. — No credit shall be allowed against United States income taxes under section 6428A of the Internal Revenue Code of 1986 (as added by this section), nor shall any credit or refund be made or allowed under subsection (g) of such section, to any person —

(A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or

(B) who is eligible for a payment under a plan described in paragraph (2).

(4) MIRROR CODE TAX SYSTEM. — For purposes of this subsection, the term "mirror code tax system" means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

(c) ADMINISTRATIVE PROVISIONS. —

(1) DEFINITION OF DEFICIENCY. — Section 6211(b)(4)(A) of the Internal Revenue Code of 1986 is amended by striking "and 6428" and inserting "6428, and 6428A".

(2) MATHEMATICAL OR CLERICAL ERROR AUTHORITY. — Section 6213(g)(2) of such Code is amended —

(A) by inserting "or section 6428A (relating to additional recovery rebates to individuals)" before the comma at the end of subparagraph (H), and

(B) by striking "or 6428" in subparagraph (L) and inserting "6428, or 6428A".

(3) EXCEPTION FROM REDUCTION OR OFFSET. — Any credit or refund allowed or made to any individual by reason of section 6428A of the Internal Revenue Code of 1986 (as added by this section) or by reason of subsection (b) of this section shall not be —

(A) subject to reduction or offset pursuant to section 3716 or 3720A of title 31, United States Code,

(B) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 of the Internal Revenue Code of 1986, or

(C) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection.

(4) ASSIGNMENT OF BENEFITS. —

(A) IN GENERAL. — The right of any person to any applicable payment shall not be transferable or assignable, at law or in equity, and no applicable payment shall be subject to, execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law.

(B) ENCODING OF PAYMENTS. — In the case of an applicable payment described in subparagraph (E)(iii)(I) that is paid electronically by direct deposit through the Automated Clearing House (ACH) network, the Secretary of the Treasury (or the Secretary's delegate) shall —

(i) issue the payment using a unique identifier that is reasonably sufficient to allow a financial institution to identify the payment as an applicable payment, and

(ii) further encode the payment pursuant to the same specifications as required for a benefit payment defined in section 212.3 of title 31, Code of Federal Regulations.

(C) GARNISHMENT. —

(i) ENCODED PAYMENTS. — In the case of a garnishment order that applies to an account that has received an applicable payment that is encoded as provided in subparagraph (B), a financial institution shall follow the requirements and procedures set forth in part 212 of title 31, Code of Federal Regulations, except —

(I) notwithstanding section 212.4 of title 31, Code of Federal Regulations (and except as provided in subclause (II)), a financial institution shall not fail to follow the procedures of sections 212.5 and 212.6 of such title with respect to an garnishment order merely because such order has attached, or includes, a notice of right to garnish federal benefits issued by a State child support enforcement agency, and

(II) a financial institution shall not, with regard to any applicable payment, be required to provide the notice referenced in sections 212.6 and 212.7 of title 31, Code of Federal Regulations.

(ii) OTHER PAYMENTS. — If a financial institution receives a garnishment order (other than an order that has been served by the United States), that has been received by a financial institution and that applies to an account into which an applicable payment that has not been encoded as provided in subparagraph (B) has been deposited electronically or by an applicable payment that has been deposited by check on any date in the lookback period, the financial institution, upon the request of the account holder, shall treat the amount of the funds in the account at the time of the request, up to the amount of the applicable payment (in addition to any amounts otherwise protected under part 212 of title 31, Code of Federal Regulations), as exempt from a garnishment order without requiring the consent of the party serving the garnishment order or the judgment creditor.

(iii) LIABILITY. — A financial institution that acts in good faith in reliance on clauses (i) or (ii) shall not be subject to liability or regulatory action under any Federal or State law, regulation, court or other order, or regulatory interpretation for actions concerning any applicable payments.

(D) PRESERVATION OF RECLAMATION RIGHTS. — This paragraph shall not alter the status of applicable payments as tax refunds or other nonbenefit payments for purpose of any reclamation rights of the Department of the Treasury or the Internal Revenue Service as per part 210 of title 31, Code of Federal Regulations.

(E) DEFINITIONS. — For purposes of this paragraph —

(i) ACCOUNT HOLDER. — The term "account holder" means a natural person whose name appears in a financial institution's records as the direct or beneficial owner of an account.

(ii) ACCOUNT REVIEW. — The term "account review" means the process of examining deposits in an account to determine if an applicable payment has been deposited into the account during the lookback period. The financial institution shall perform the account review following the procedures outlined in section 212.5 of title 31, Code of Federal Regulations and in accordance with the requirements of section 212.6 of title 31, Code of Federal Regulations.

(iii) APPLICABLE PAYMENT. — The term "applicable payment" means —

(I) any advance refund amount paid pursuant to subsection (g) of section 6428A of the Internal Revenue Code of 1986 (as so added),

(II) any payment made by a possession of the United States with a mirror code tax system (as defined in subsection (c) of section 2201 of the CARES Act (Public Law 116–136)) pursuant to such subsection which corresponds to a payment described in subclause (I), and

(III) any payment made by a possession of the United States without a mirror code tax system (as so defined) pursuant to section 2201(c) of such Act.

(iv) GARNISHMENT. — The term "garnishment" means execution, levy, attachment, garnishment, or other legal process.

(v) GARNISHMENT ORDER. — The term "garnishment order" means a writ, order, notice, summons, judgment, levy, or similar written instruction issued by a court, a State or State agency, a municipality or municipal corporation, or a State child support enforcement agency, including a lien arising by operation of law for overdue child support or an order to freeze the assets in an account, to effect a garnishment against a debtor.

(vi) LOOKBACK PERIOD. — The term "lookback period" means the two month period that begins on the date preceding the date of account review and ends on the corresponding date of the month two months earlier, or on the last date of the month two months earlier if the corresponding date does not exist.

(5) TREATMENT OF CREDIT AND ADVANCE PAYMENTS. — For purposes of section 1324 of title 31, United States Code, any credit under section 6428A(a) of the Internal Revenue Code of 1986, any credit or refund under section 6428A(g) of such Code, and any payment under subsection (b) of this section, shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section 1324.

(6) AGENCY INFORMATION SHARING AND ASSISTANCE. — The Commissioner of Social Security, the Railroad Retirement Board, and the Secretary of Veterans Affairs shall each provide the Secretary of the Treasury (or the Secretary's delegate) such information and assistance as the Secretary of the Treasury (or the Secretary's delegate) may require for purposes of making payments under section 6428A(g) of the Internal Revenue Code of 1986 to individuals described in paragraph (5)(A)(ii) thereof.

(7) CLERICAL AMENDMENT. — The table of sections for subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 6428 the following new item:

"Sec. 6428A. Additional recovery rebates to individuals.".

(d) CERTAIN REQUIREMENTS RELATED TO RECOVERY REBATES AND ADDITIONAL RECOVERY REBATES. —

(1) SIGNATURES ON CHECKS AND NOTICES, ETC., BY THE DEPARTMENT OF THE TREASURY. — Any check issued to an individual by the Department of the Treasury pursuant to section 6428 or 6428A of the Internal Revenue Code of 1986, and any notice issued pursuant to section 6428(f)(6) or section 6428A(g)(6) of such Code, may not be signed by or otherwise bear the name, signature, image or likeness of the President, the Vice President or any elected official or cabinet level officer of the United States, or any individual who, with respect to any of the aforementioned individuals, bears any relationship described in subparagraphs (A) through (G) of section 152(d)(2) of the Internal Revenue Code of 1986.

(2) EFFECTIVE DATE. — Paragraph (1) shall apply to checks and notices issued after the date of the enactment of this Act.

(e) REPORTS TO CONGRESS. — Each week beginning before December 31, 2020, on Friday of such week, not later than 3 p.m. Eastern Time, the Secretary of the Treasury shall provide a written report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate. Such report shall include the following information with respect to payments made pursuant to each of sections 6428 and 6428A of the Internal Revenue Code of 1986:

(1) The number of scheduled payments sent to the Bureau of Fiscal Service for payment by direct deposit or paper check for the following week (stated separately for direct deposit and paper check).

(2) The total dollar amount of the scheduled payments described in paragraph (1).

(3) The number of direct deposit payments returned to the Department of the Treasury and the total dollar value of such payments, for the week ending on the day prior to the day on which the report is provided.

(4) The total number of letters related to payments under section 6428 or 6428A of such Code mailed to taxpayers during the week ending on the day prior to the day on which the report is provided.

Subtitle B — Earned Income Tax Credit

SEC. 111. STRENGTHENING THE EARNED INCOME TAX CREDIT FOR INDIVIDUALS WITH NO QUALIFYING CHILDREN.

(a) SPECIAL RULES FOR 2020. — Section 32 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

"(n) SPECIAL RULES FOR INDIVIDUALS WITHOUT QUALIFYING CHILDREN. — In the case of any taxable year beginning after December 31, 2019, and before January 1, 2021 —

"(1) DECREASE IN MINIMUM AGE FOR credit. —

"(A) IN GENERAL. — Subsection (c)(1)(A)(ii)(II) shall be applied by substituting 'the applicable minimum age' for 'age 25'.

"(B) APPLICABLE MINIMUM AGE. — For purposes of this paragraph, the term 'applicable minimum age' means —

"(i) except as otherwise provided in this subparagraph, age 19,

"(ii) in the case of a full-time student (other than a qualified former foster youth or a qualified homeless youth), age 25, and

"(iii) in the case of a qualified former foster youth or a qualified homeless youth, age 18.

"(C) FULL-TIME STUDENT. — For purposes of this paragraph, the term 'full-time student' means, with respect to any taxable year, an individual who is an eligible student (as defined in section 25A(b)(3)) during at least 5 calendar months during the taxable year.

"(D) QUALIFIED FORMER FOSTER YOUTH. — For purposes of this paragraph, the term 'qualified former foster youth' means an individual who —

"(i) on or after the date that such individual attained age 14, was in foster care provided under the supervision or administration of a State or tribal agency administering (or eligible to administer) a plan under part B or part E of the Social Security Act (without regard to whether Federal assistance was provided with respect to such child under such part E), and

"(ii) provides (in such manner as the Secretary may provide) consent for State and tribal agencies which administer a plan under part B or part E of the Social Security Act to disclose to the Secretary information related to the status of such individual as a qualified former foster youth.

"(E) QUALIFIED HOMELESS YOUTH. — For purposes of this paragraph, the term 'qualified homeless youth' means, with respect to any taxable year, an individual who —

"(i) is certified by a local educational agency or a financial aid administrator during such taxable year as being either an unaccompanied youth who is a homeless child or youth, or as unaccompanied, at risk of homelessness, and self-supporting. Terms used in the preceding sentence which are also used in section 480(d)(1) of the Higher Education Act of 1965 shall have the same meaning as when used in such section, and

"(ii) provides (in such manner as the Secretary may provide) consent for local educational agencies and financial aid administrators to disclose to the Secretary information related to the status of such individual as a qualified homeless youth.

"(2) INCREASE IN MAXIMUM AGE FOR CREDIT. — Subsection (c)(1)(A)(ii)(II) shall be applied by substituting 'age 66' for 'age 65'.

"(3) INCREASE IN CREDIT AND PHASEOUT PERCENTAGES. — The table contained in subsection (b)(1) shall be applied by substituting '15.3' for '7.65' each place it appears therein.

"(4) INCREASE IN EARNED INCOME AND PHASEOUT AMOUNTS. —

"(A) IN GENERAL. — The table contained in subsection (b)(2)(A) shall be applied —

"(i) by substituting '$9,720' for '$4,220', and

"(ii) by substituting '$11,490' for '$5,280'.

"(B) COORDINATION WITH INFLATION ADJUSTMENT. — Subsection (j) shall not apply to any dollar amount specified in this paragraph.".

(b) INFORMATION RETURN MATCHING. — As soon as practicable, the Secretary of the Treasury (or the Secretary's delegate) shall develop and implement procedures to use information returns under section 6050S (relating to returns relating to higher education tuition and related expenses) to check the status of individuals as full-time students for purposes of section 32(n)(1)(B)(ii) of the Internal Revenue Code of 1986 (as added by this section).

(c) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after December 31, 2019.

SEC. 112. TAXPAYER ELIGIBLE FOR CHILDLESS EARNED INCOME CREDIT IN CASE OF QUALIFYING CHILDREN WHO FAIL TO MEET CERTAIN IDENTIFICATION REQUIREMENTS.

(a) IN GENERAL. — Section 32(c)(1) of the Internal Revenue Code of 1986 is amended by striking subparagraph (F).

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 113. CREDIT ALLOWED IN CASE OF CERTAIN SEPARATED SPOUSES.

(a) IN GENERAL. — Section 32(d) of the Internal Revenue Code of 1986 is amended —

(1) by striking "MARRIED INDIVIDUALS. — In the case of" and inserting the following: "MARRIED INDIVIDUALS. —

"(1) IN GENERAL. — In the case of", and

(2) by adding at the end the following new paragraph:

"(2) DETERMINATION OF MARITAL STATUS. — For purposes of this section —

"(A) IN GENERAL. — Except as provided in subparagraph (B), marital status shall be determined under section 7703(a).

"(B) SPECIAL RULE FOR SEPARATED SPOUSE. — An individual shall not be treated as married if such individual —

"(i) is married (as determined under section 7703(a)) and does not file a joint return for the taxable year,

"(ii) lives with a qualifying child of the individual for more than one-half of such taxable year, and

"(iii)(I) during the last 6 months of such taxable year, does not have the same principal place of abode as the individual's spouse, or

"(II) has a decree, instrument, or agreement (other than a decree of divorce) described in section 121(d)(3)(C) with respect to the individual's spouse and is not a member of the same household with the individual's spouse by the end of the taxable year.".

(b) CONFORMING AMENDMENTS. —

(1) Section 32(c)(1)(A) of such Code is amended by striking the last sentence.

(2) Section 32(c)(1)(E)(ii) of such Code is amended by striking "(within the meaning of section 7703)".

(3) Section 32(d)(1) of such Code, as amended by subsection (a), is amended by striking "(within the meaning of section 7703)".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 114. ELIMINATION OF DISQUALIFIED INVESTMENT INCOME TEST.

(a) IN GENERAL. — Section 32 of the Internal Revenue Code of 1986 is amended by striking subsection (i).

(b) CONFORMING AMENDMENTS. —

(1) Section 32(j)(1) of such Code is amended by striking "subsections (b)(2) and (i)(1)" and inserting "subsection (b)(2)".

(2) Section 32(j)(1)(B)(i) of such Code is amended by striking "subsections (b)(2)(A) and (i)(1)" and inserting "subsection (b)(2)(A)".

(3) Section 32(j)(2) of such Code is amended —

(A) by striking subparagraph (B), and

(B) by striking "ROUNDING. — " and all that follows through "If any dollar amount" and inserting the following: "ROUNDING. — If any dollar amount".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

SEC. 115. APPLICATION OF EARNED INCOME TAX CREDIT IN POSSESSIONS OF THE UNITED STATES.

(a) IN GENERAL. — Chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

"SEC. 7530. APPLICATION OF EARNED INCOME TAX CREDIT TO POSSESSIONS OF THE UNITED STATES.

"(a) PUERTO RICO. —

"(1) IN GENERAL. — With respect to calendar year 2021 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to Puerto Rico equal to —

"(A) the specified matching amount for such calendar year, plus

"(B) in the case of calendar years 2021 through 2025, the lesser of —

"(i) the expenditures made by Puerto Rico during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to the earned income tax credit, or

"(ii) $1,000,000.

"(2) REQUIREMENT TO REFORM EARNED INCOME TAX CREDIT. — The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless Puerto Rico has in effect an earned income tax credit for taxable years beginning in or with such calendar year which (relative to the earned income tax credit which was in effect for taxable years beginning in or with calendar year 2019) increases the percentage of earned income which is allowed as a credit for each group of individuals with respect to which such percentage is separately stated or determined in a manner designed to substantially increase workforce participation.

"(3) SPECIFIED MATCHING AMOUNT. — For purposes of this subsection —

"(A) IN GENERAL. — The term 'specified matching amount' means, with respect to any calendar year, the lesser of —

"(i) the excess (if any) of —

"(I) the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with such calendar year, over

"(II) the base amount for such calendar year, or

"(ii) the product of 3, multiplied by the base amount for such calendar year.

"(B) BASE AMOUNT. —

"(i) BASE AMOUNT FOR 2020. — In the case of calendar year 2020, the term 'base amount' means the greater of —

"(I) the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with calendar year 2019 (rounded to the nearest multiple of $1,000,000), or

"(II) $200,000,000.

"(ii) INFLATION ADJUSTMENT. — In the case of any calendar year after 2021, the term 'base amount' means the dollar amount determined under clause (i) increased by an amount equal to —

"(I) such dollar amount, multiplied by —

"(II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting 'calendar year 2020' for 'calendar year 2016' in subparagraph (A)(ii) thereof.

Any amount determined under this clause shall be rounded to the nearest multiple of $1,000,000.

"(4) RULES RELATED TO PAYMENTS AND REPORTS. —

"(A) TIMING OF PAYMENTS. — The Secretary shall make payments under paragraph (1) for any calendar year —

"(i) after receipt of the report described in subparagraph (B) for such calendar year, and

"(ii) except as provided in clause (i), within a reasonable period of time before the due date for individual income tax returns (as determined under the laws of Puerto Rico) for taxable years which began on the first day of such calendar year.

"(B) ANNUAL REPORTS. — With respect to calendar year 2021 and each calendar year thereafter, Puerto Rico shall provide to the Secretary a report which shall include —

"(i) an estimate of the costs described in paragraphs (1)(B)(i) and (3)(A)(i)(I) with respect to such calendar year, and

"(ii) a statement of such costs with respect to the preceding calendar year.

"(C) ADJUSTMENTS. —

"(i) IN GENERAL. — In the event that any estimate of an amount is more or less than the actual amount as later determined and any payment under paragraph (1) was determined on the basis of such estimate, proper payment shall be made by, or to, the Secretary (as the case may be) as soon as practicable after the determination that such estimate was inaccurate. Proper adjustment shall be made in the amount of any subsequent payments made under paragraph (1) to the extent that proper payment is not made under the preceding sentence before such subsequent payments.

"(ii) ADDITIONAL REPORTS. — The Secretary may require such additional periodic reports of the information described in subparagraph (B) as the Secretary determines appropriate to facilitate timely adjustments under clause (i).

"(D) DETERMINATION OF COST OF EARNED INCOME TAX CREDIT. — For purposes of this subsection, the cost to Puerto Rico of the earned income tax credit shall be determined by the Secretary on the basis of the laws of Puerto Rico and shall include reductions in revenues received by Puerto Rico by reason of such credit and refunds attributable to such credit, but shall not include any administrative costs with respect to such credit.

"(E) PREVENTION OF MANIPULATION OF BASE AMOUNT. — No payments shall be made under paragraph (1) if the earned income tax credit as in effect in Puerto Rico for taxable years beginning in or with calendar year 2019 is modified after the date of the enactment of this subsection.

"(b) POSSESSIONS WITH MIRROR CODE TAX SYSTEMS. —

"(1) IN GENERAL. — With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to the Virgin Islands, Guam, and the Commonwealth of the Northern Mariana Islands equal to —

"(A) 75 percent of the cost to such possession of the earned income tax credit for taxable years beginning in or with such calendar year, plus

"(B) in the case of calendar years 2020 through 2024, the lesser of —

"(i) the expenditures made by such possession during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or

"(ii) $50,000.

"(2) APPLICATION OF CERTAIN RULES. — Rules similar to the rules of subparagraphs (A), (B), (C), and (D) of subsection (a)(4) shall apply for purposes of this subsection.

"(c) AMERICAN SAMOA. —

"(1) IN GENERAL. — With respect to calendar year 2020 and each calendar year thereafter, the Secretary shall, except as otherwise provided in this subsection, make payments to American Samoa equal to —

"(A) the lesser of —

"(i) 75 percent of the cost to American Samoa of the earned income tax credit for taxable years beginning in or with such calendar year, or

"(ii) $12,000,000, plus

"(B) in the case of calendar years 2020 through 2024, the lesser of —

"(i) the expenditures made by American Samoa during such calendar year for education efforts with respect to individual taxpayers and tax return preparers relating to such earned income tax credit, or

"(ii) $50,000.

"(2) REQUIREMENT TO ENACT AND MAINTAIN AN EARNED INCOME TAX CREDIT. — The Secretary shall not make any payments under paragraph (1) with respect to any calendar year unless American Samoa has in effect an earned income tax credit for taxable years beginning in or with such calendar year which allows a refundable tax credit to individuals on the basis of the taxpayer's earned income which is designed to substantially increase workforce participation.

"(3) INFLATION ADJUSTMENT. — In the case of any calendar year after 2020, the $12,000,000 amount in paragraph (1)(A)(ii) shall be increased by an amount equal to —

"(A) such dollar amount, multiplied by —

"(B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting 'calendar year 2019' for 'calendar year 2016' in subparagraph (A)(ii) thereof.

Any increase determined under this clause shall be rounded to the nearest multiple of $100,000.

"(4) APPLICATION OF CERTAIN RULES. — Rules similar to the rules of subparagraphs (A), (B), (C), and (D) of subsection (a)(4) shall apply for purposes of this subsection.

"(d) TREATMENT OF PAYMENTS. — For purposes of section 1324 of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.".

(b) CLERICAL AMENDMENT. — The table of sections for chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

"Sec. 7529. Application of earned income tax credit to possessions of the United States.".

SEC. 116. TEMPORARY SPECIAL RULE FOR DETERMINING EARNED INCOME FOR PURPOSES OF EARNED INCOME TAX CREDIT.

(a) IN GENERAL. — If the earned income of the taxpayer for the taxpayer's first taxable year beginning in 2020 is less than the earned income of the taxpayer for the preceding taxable year, the credit allowed under section 32 of the Internal Revenue Code of 1986 may, at the election of the taxpayer, be determined by substituting —

(1) such earned income for the preceding taxable year, for

(2) such earned income for the taxpayer's first taxable year beginning in 2020.

(b) EARNED INCOME. —

(1) IN GENERAL. — For purposes of this section, the term "earned income" has the meaning given such term under section 32(c) of the Internal Revenue Code of 1986.

(2) APPLICATION TO JOINT RETURNS. — For purposes of subsection (a), in the case of a joint return, the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year.

(c) SPECIAL RULES. —

(1) ERRORS TREATED AS MATHEMATICAL ERROR. — For purposes of section 6213 of the Internal Revenue Code of 1986, an incorrect use on a return of earned income pursuant to subsection (a) shall be treated as a mathematical or clerical error.

(2) NO EFFECT ON DETERMINATION OF GROSS INCOME, ETC. — Except as otherwise provided in this subsection, the Internal Revenue Code of 1986 shall be applied without regard to any substitution under subsection (a).

(d) TREATMENT OF CERTAIN POSSESSIONS. —

(1) PAYMENTS TO POSSESSIONS WITH MIRROR CODE TAX SYSTEMS. — The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this section (other than this subsection) with respect to section 32 of the Internal Revenue Code of 1986. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.

(2) PAYMENTS TO OTHER POSSESSIONS. — The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this section (other than this subsection) with respect to section 32 of the Internal Revenue Code of 1986 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents.

(3) MIRROR CODE TAX SYSTEM. — For purposes of this section, the term "mirror code tax system" means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

(4) TREATMENT OF PAYMENTS. — For purposes of section 1324 of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

Subtitle C — Child Tax Credit

SEC. 121. CHILD TAX CREDIT IMPROVEMENTS FOR 2020.

(a) IN GENERAL. — Section 24 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

"(i) SPECIAL RULE FOR REFUNDABLE CREDIT. — In the case of any taxable year beginning in 2020, subsection (h)(5) shall not apply and the increase determined under the first sentence of subsection (d)(1) shall be the amount determined under subsection (d)(1)(A) (determined without regard to subsection (h)(4)).".

(b) ADVANCE PAYMENT OF CREDIT. —

(1) IN GENERAL. — Chapter 77 of such Code is amended by inserting after section 7527 the following new section:

"SEC. 7527A. ADVANCE PAYMENT OF CHILD TAX CREDIT.

"(a) IN GENERAL. — As soon as practicable after the date of the enactment of this Act, the Secretary shall establish a program for making advance payments of the credit allowed under subsection (a) of section 24 on a monthly basis (determined without regard to subsection (i)(2)) of such section), or as frequently as the Secretary determines to be administratively feasible, to taxpayers determined to be eligible for advance payment of such credit.

"(b) LIMITATION. —

"(1) IN GENERAL. — The Secretary may make payments under subsection (a) only to the extent that the total amount of such payments made to any taxpayer during the taxable year does not exceed an amount equal to the excess, if any, of —

"(A) subject to paragraph (2), the amount determined under subsection (a) of section 24 with respect to such taxpayer (determined without regard to subsection (i)(2)) of such section) for such taxable year, over

"(B) the estimated tax imposed by subtitle A, as reduced by the credits allowable under subparts A and C (other than section 24) of such part IV, with respect to such taxpayer for such taxable year, as determined in such manner as the Secretary deems appropriate.

"(2) APPLICATION OF THRESHOLD AMOUNT LIMITATION. — The program described in subsection (a) shall make reasonable efforts to apply the limitation of section 24(b) with respect to payments made under such program.

"(c) APPLICATION. — The advance payments described in this section shall only be made with respect to credits allowed under section 24 for taxable years beginning during 2020.".

(2) RECONCILIATION OF CREDIT AND ADVANCE CREDIT. — Section 24(i) of such Code, as amended by subsection (a), is amended —

(A) by striking "in the case of any taxable year", and inserting the following:

"(1) IN GENERAL. — 'In the case of any taxable year' ", and

(B) by adding at the end the following new paragraph:

"(2) RECONCILIATION OF CREDIT AND ADVANCE CREDIT. —

"(A) IN GENERAL. — The amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the aggregate amount of any advance payments of such credit under section 7527A for such taxable year.

"(B) EXCESS ADVANCE PAYMENTS. — If the aggregate amount of advance payments under section 7527A for the taxable year exceeds the amount of the credit allowed under this section for such taxable year (determined without regard to subparagraph (A)), the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess.".

(3) CLERICAL AMENDMENT. — The table of sections for chapter 77 of such Code is amended by inserting after the item relating to section 7527 the following new item:

"Sec. 7527A. Advance payment of child tax credit.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

SEC. 122. APPLICATION OF CHILD TAX CREDIT IN POSSESSIONS.

(a) IN GENERAL. — Section 24 of the Internal Revenue Code of 1986, as amended by the preceding provisions of this Act, is amended by adding at the end the following new subsection:

"(j) APPLICATION OF CREDIT IN POSSESSIONS. —

"(1) MIRROR CODE POSSESSIONS. —

"(A) IN GENERAL. — The Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to application of this section (determined without regard to this subsection) with respect to taxable years beginning after 2019. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession.

"(B) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES. — No credit shall be allowed under this section for any taxable year to any individual to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of the application of this section in such possession for such taxable year.

"(C) MIRROR CODE TAX SYSTEM. — For purposes of this paragraph, the term 'mirror code tax system' means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

"(2) PUERTO RICO. — In the case of any bona fide resident of Puerto Rico (within the meaning of section 937(a)) —

"(A) the credit determined under this section shall be allowable to such resident,

"(B) in the case of any taxable year beginning during 2020, the increase determined under the first sentence of subsection (d)(1) shall be the amount determined under subsection (d)(1)(A) (determined without regard to subsection (h)(4)),

"(C) in the case of any taxable year beginning after December 31, 2020, and before January 1, 2026, the increase determined under the first sentence of subsection (d)(1) shall be the lesser of —

"(i) the amount determined under subsection (d)(1)(A) (determined without regard to subsection (h)(4)), or

"(ii) the dollar amount in effect under subsection (h)(5), and

"(D) in the case of any taxable year after December 31, 2025, the increase determined under the first sentence of subsection (d)(1) shall be the amount determined under subsection (d)(1)(A).

"(3) AMERICAN SAMOA. —

"(A) IN GENERAL. — The Secretary shall pay to American Samoa amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of American Samoa by reason of the application of this section for taxable years beginning after 2019 if the provisions of this section had been in effect in American Samoa.

"(B) DISTRIBUTION REQUIREMENT. — Subparagraph (A) shall not apply unless American Samoa has a plan, which has been approved by the Secretary, under which American Samoa will promptly distribute such payments to the residents of American Samoa in a manner which replicates to the greatest degree practicable the benefits that would have been so provided to each such resident.

"(C) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES. —

"(i) IN GENERAL. — In the case of a taxable year with respect to which a plan is approved under subparagraph (B), this section (other than this subsection) shall not apply to any individual eligible for a distribution under such plan.

"(ii) APPLICATION OF SECTION IN EVENT OF ABSENCE OF APPROVED PLAN. — In the case of a taxable year with respect to which a plan is not approved under subparagraph (B), rules similar to the rules of paragraph (2) shall apply with respect to bona fide residents of American Samoa (within the meaning of section 937(a)).

"(4) TREATMENT OF PAYMENTS. — The payments made under this subsection shall be treated in the same manner for purposes of section 1324(b)(2) of title 31, United States Code, as refunds due from the credit allowed under this section.".

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after December 31, 2019.

Subtitle D — Dependent Care Assistance

SEC. 131. REFUNDABILITY AND ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX CREDIT.

(a) IN GENERAL. — Section 21 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

"(g) SPECIAL RULES FOR 2020. — In the case of any taxable year beginning after December 31, 2019, and before January 1, 2021 —

"(1) CREDIT MADE REFUNDABLE. — In the case of an individual other than a nonresident alien, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart).

"(2) INCREASE IN APPLICABLE PERCENTAGE. — Subsection (a)(2) shall be applied —

"(A) by substituting '50 percent' for '35 percent ', and

"(B) by substituting '$120,000' for '$15,000'.

"(3) INCREASE IN DOLLAR LIMIT ON AMOUNT CREDITABLE. — Subsection (c) shall be applied —

"(A) by substituting '$6,000' for '$3,000' in paragraph (1) thereof, and

"(B) by substituting 'twice the amount in effect under paragraph (1)' for '$6,000' in paragraph (2) thereof.".

(b) CONFORMING AMENDMENT. — Section 1324(b)(2) of title 31, United States Code, is amended by inserting "21 (by reason of subsection (g) thereof)," before "25A".

(c) COORDINATION WITH POSSESSION TAX SYSTEMS. — Section 21(g)(1) of the Internal Revenue Code of 1986 (as added by this section) shall not apply to any person —

(1) to whom a credit is allowed against taxes imposed by a possession with a mirror code tax system by reason of the application of section 21 of such Code in such possession for such taxable year, or

(2) to whom a credit would be allowed against taxes imposed by a possession which does not have a mirror code tax system if the provisions of section 21 of such Code had been in effect in such possession for such taxable year.

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

SEC. 132. INCREASE IN EXCLUSION FOR EMPLOYER PROVIDED DEPENDENT CARE ASSISTANCE.

(a) IN GENERAL. — Section 129(a)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(D) SPECIAL RULE FOR 2020. — In the case of any taxable year beginning during 2020, subparagraph (A) shall be applied be substituting '$10,500 (half such dollar amount' for '$5,000 ($2,500'.".

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after December 31, 2019.

(c) RETROACTIVE PLAN AMENDMENTS. — A plan or other arrangement that otherwise satisfies all applicable requirements of sections 106, 125, and 129 of the Internal Revenue Code of 1986 (including any rules or regulations thereunder) shall not fail to be treated as a cafeteria plan or dependent care flexible spending arrangement merely because such plan or arrangement is amended pursuant to a provision under this section and such amendment is retroactive, if —

(1) such amendment is adopted no later than the last day of the plan year in which the amendment is effective, and

(2) the plan or arrangement is operated consistent with the terms of such amendment during the period beginning on the effective date of the amendment and ending on the date the amendment is adopted.

Subtitle E — Credits for Paid Sick and Family Leave

SEC. 141. EXTENSION OF CREDITS.

(a) IN GENERAL. — Sections 7001(g), 7002(e), 7003(g), and 7004(e) of the Families First Coronavirus Response Act are each amended by striking "December 31, 2020" and inserting "February 28, 2021".

(b) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the provisions of the Families First Coronavirus Response Act to which they relate.

SEC. 142. REPEAL OF REDUCED RATE OF CREDIT FOR CERTAIN LEAVE.

(a) PAYROLL CREDIT. — Section 7001(b) of the Families First Coronavirus Response Act is amended by inserting "(as in effect immediately before the date of the enactment of the COVID–19 Tax Relief Act of 2020) or any day on or after the date of the enactment of the COVID–19 Tax Relief Act of 2020" after "in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act".

(b) SELF-EMPLOYED CREDIT. —

(1) IN GENERAL. — Clauses (i) and (ii) of section 7002(c)(1)(B) of the Families First Coronavirus Response Act are each amended by inserting "(as in effect immediately before the date of the enactment of the COVID–19 Tax Relief Act of 2020) or any day on or after the date of the enactment of the COVID–19 Tax Relief Act of 2020" after "in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act".

(2) CONFORMING AMENDMENT. — Section 7002(d)(3) of the Families First Coronavirus Response Act is amended by inserting "(as in effect immediately before the date of the enactment of the COVID–19 Tax Relief Act of 2020) or any day on or after the date of the enactment of the COVID–19 Tax Relief Act of 2020" after "in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to days on or after the date of the enactment of this Act.

SEC. 143. INCREASE IN LIMITATIONS ON CREDITS FOR PAID FAMILY LEAVE.

(a) INCREASE IN OVERALL LIMITATION ON QUALIFIED FAMILY LEAVE WAGES. —

(1) IN GENERAL. — Section 7003(b)(1)(B) of the Families First Coronavirus Response Act is amended by striking "$10,000" and inserting "$12,000".

(2) CONFORMING AMENDMENT. — Section 7004(d)(3) of the Families First Coronavirus Response Act is amended by striking "$10,000" and inserting "$12,000".

(b) INCREASE IN QUALIFIED FAMILY LEAVE EQUIVALENT AMOUNT FOR SELF-EMPLOYED INDIVIDUALS. —  Section 7004(c)(1)(A) of the Families First Coronavirus Response Act is amended by striking "50" and inserting "60".

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the provisions of the Families First Coronavirus Response Act to which they relate.

SEC. 144. ELECTION TO USE PRIOR YEAR NET EARNINGS FROM SELF-EMPLOYMENT IN DETERMINING AVERAGE DAILY SELF-EMPLOYMENT INCOME.

(a) CREDIT FOR SICK LEAVE. — Section 7002(c) of the Families First Coronavirus Response Act is amended by adding at the end the following new paragraph:

"(4) ELECTION TO USE PRIOR YEAR NET EARNINGS FROM SELF-EMPLOYMENT INCOME. — In the case of an individual who elects (at such time and in such manner as the Secretary, or the Secretary's delegate, may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting 'the prior taxable year' for 'the taxable year'.".

(b) CREDIT FOR FAMILY LEAVE. — Section 7004(c) of the Families First Coronavirus Response Act is amended by adding at the end the following new paragraph:

"(4) ELECTION TO USE PRIOR YEAR NET EARNINGS FROM SELF-EMPLOYMENT INCOME. — In the case of an individual who elects (at such time and in such manner as the Secretary, or the Secretary's delegate, may provide) the application of this paragraph, paragraph (2)(A) shall be applied by substituting 'the prior taxable year' for 'the taxable

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the provisions of the Families First Coronavirus Response Act to which they relate.

SEC. 145. FEDERAL, STATE, AND LOCAL GOVERNMENTS ALLOWED TAX CREDITS FOR PAID SICK AND PAID FAMILY AND MEDICAL LEAVE.

(a) IN GENERAL. — Sections 7001(e) and 7003(e) of the Families First Coronavirus Response Act are each amended by striking paragraph (4).

(b) COORDINATION WITH APPLICATION OF CERTAIN DEFINITIONS. —

(1) IN GENERAL. — Sections 7001(c) and 7003(c) of the Families First Coronavirus Response Act are each amended —

(A) by inserting ", determined without regard to paragraphs (1) through (22) of section 3121(b) of such Code" after "as defined in section 3121(a) of the Internal Revenue Code of 1986", and

(B) by inserting ", determined without regard to the sentence in paragraph (1) thereof which begins 'Such term does include remuneration' " after "as defined in section 3231(e) of the Internal Revenue Code".

(2) CONFORMING AMENDMENTS. — Sections 7001(e)(3) and 7003(e)(3) of the Families First Coronavirus Response Act are each amended by striking "Any term" and inserting "Except as otherwise provided in this section, any term".

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the provisions of the Families First Coronavirus Response Act to which they relate.

SEC. 146. CERTAIN TECHNICAL IMPROVEMENTS.

(a) COORDINATION WITH EXCLUSION FROM EMPLOYMENT TAXES. — Sections 7001(c) and 7003(c) of the Families First Coronavirus Response Act, as amended by the preceding provisions of this Act, are each amended —

(1) by inserting "and section 7005(a) of this Act," after "determined without regard to paragraphs (1) through (22) of section 3121(b) of such Code", and

(2) by inserting "and without regard to section 7005(a) of this Act" after "which begins 'Such term does not include remuneration' ".

(b) CLARIFICATION OF APPLICABLE RAILROAD RETIREMENT TAX FOR PAID LEAVE CREDITS. — Sections 7001(e) and 7003(e) of the Families First Coronavirus Response Act, as amended by the preceding provisions of this Act, are each amended by adding at the end the following new paragraph:

"(4) REFERENCES TO RAILROAD RETIREMENT TAX. — Any reference in this section to the tax imposed by section 3221(a) of the Internal Revenue Code of 1986 shall be treated as a reference to so much of such tax as is attributable to the rate in effect under section 3111(a) of such Code.".

(c) CLARIFICATION OF TREATMENT OF PAID LEAVE FOR APPLICABLE RAILROAD RETIREMENT TAX. — Section 7005(a) of the Families First Coronavirus Response Act is amended by adding the following sentence at the end of such subsection: "Any reference in this subsection to the tax imposed by section 3221(a) of such Code shall be treated as a reference to so much of the tax as is attributable to the rate in effect under section 3111(a) of such Code."

(d) CLARIFICATION OF APPLICABLE RAILROAD RETIREMENT TAX FOR HOSPITAL INSURANCE TAX CREDIT. — Section 7005(b)(1) of the Families First Coronavirus Response Act is amended to read as follows:

"(1) IN GENERAL. — The credit allowed by section 7001 and the credit allowed by section 7003 shall each be increased by the amount of the tax imposed by section 3111(b) of the Internal Revenue Code of 1986 and so much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(b) of such Code on qualified sick leave wages, or qualified family leave wages, for which credit is allowed under such section 7001 or 7003 (respectively).".

(e) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the provisions of the Families First Coronavirus Response Act to which they relate.

SEC. 147. CREDITS NOT ALLOWED TO CERTAIN LARGE EMPLOYERS.

(a) CREDIT FOR REQUIRED PAID SICK LEAVE. —

(1) IN GENERAL. — Section 7001(a) of the Families First Coronavirus Response Act is amended by striking "In the case of an employer" and inserting "In the case of an eligible employer".

(2) ELIGIBLE EMPLOYER. — Section 7001(c) of the Families First Coronavirus Response Act, as amended by the preceding provisions of this Act, is amended by striking "For purposes of this section, the term" and all that precedes it and inserting the following:

"(c) DEFINITIONS. — For purposes of this section —

"(1) ELIGIBLE EMPLOYER. — The term 'eligible employer' means any employer other than an applicable large employer (as defined in section 4980H(c)(2), determined by substituting '500' for '50' each place it appears in subparagraphs (A) and (B) thereof and without regard to subparagraphs (D) and (F) thereof). For purposes of the preceding sentence, the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing shall not be treated as an applicable large employer.

"(2) QUALIFIED SICK LEAVE WAGES. — The term".

(b) CREDIT FOR REQUIRED PAID FAMILY LEAVE. —

(1) IN GENERAL. — Section 7003(a) of the Families First Coronavirus Response Act is amended by striking "In the case of an employer" and inserting "In the case of an eligible employer".

(2) ELIGIBLE EMPLOYER. — Section 7003(c) of the Families First Coronavirus Response Act, as amended by the preceding provisions of this Act, is amended by striking "For purposes of this section, the term" and all that precedes it and inserting the following:

"(c) DEFINITIONS. — For purposes of this section —

"(1) ELIGIBLE EMPLOYER. — The term 'eligible employer' means any employer other than an applicable large employer (as defined in section 4980H(c)(2), determined by substituting '500' for '50' each place it appears in subparagraphs (A) and (B) thereof and without regard to subparagraphs (D) and (F) thereof). For purposes of the preceding sentence, the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing, shall not be treated as an applicable large employer.

"(2) QUALIFIED FAMILY LEAVE WAGES. — The term".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to wages paid after the date of the enactment of this Act.

Subtitle F — Deduction of State and Local Taxes

SEC. 151. ELIMINATION FOR 2020 LIMITATION ON DEDUCTION OF STATE AND LOCAL TAXES.

(a) IN GENERAL. — Section 164(b)(6)(B) of the Internal Revenue Code of 1986 is amended by inserting "in the case of a taxable year beginning before January 1, 2020, or after December 31, 2020," before "the aggregate amount of taxes".

(b) CONFORMING AMENDMENTS. — Section 164(b)(6) of the Internal Revenue Code of 1986 is amended —

(1) by striking "For purposes of subparagraph (B)" and inserting "For purposes of this section",

(2) by striking "January 1, 2018" and inserting "January 1, 2021",

(3) by striking "December 31, 2017, shall" and inserting "December 31, 2020, shall", and

(4) by adding at the end the following: "For purposes of this section, in the case of State or local taxes with respect to any real or personal property paid during a taxable year beginning in 2020, the Secretary shall prescribe rules which treat all or a portion of such taxes as paid in a taxable year or years other than the taxable year in which actually paid as necessary or appropriate to prevent the avoidance of the limitations of this subsection.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after December 31, 2019.

TITLE II — PROVISIONS TO PREVENT BUSINESS INTERRUPTION

SEC. 201. IMPROVEMENTS TO EMPLOYEE RETENTION AND REHIRING CREDIT.

(a) EMPLOYEE RETENTION CREDIT RENAMED. — Section 2301 of the CARES Act is amended in the heading by striking "EMPLOYEE RETENTION CREDIT" and inserting "EMPLOYEE RETENTION AND REHIRING CREDIT".

(b) INCREASE IN CREDIT PERCENTAGE. — Section 2301(a) of the CARES Act is amended by striking "50 percent" and inserting "80 percent".

(c) INCREASE IN PER EMPLOYEE LIMITATION. — Section 2301(b)(1) of the CARES Act is amended by striking "for all calendar quarters shall not exceed $10,000." and inserting "shall not exceed —

"(A) $15,000 in any calendar quarter, and

"(B) $45,000 in the aggregate for all calendar quarters.".

(d) MODIFICATION OF THRESHOLD FOR TREATMENT AS A LARGE EMPLOYER. —

(1) IN GENERAL. — Section 2301(c)(3)(A) of the CARES Act is amended —

(A) by striking "for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was greater than 100" in clause (i) and inserting "which is a large employer", and

(B) by striking "for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 100" in clause (ii) and inserting "which is not a large employer".

(2) LARGE EMPLOYER DEFINED. — Section 2301(c) of the CARES Act is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph:

"(6) LARGE EMPLOYER. — The term 'large employer' means any eligible employer if —

"(A) the average number of full-time employees (as determined for purposes of determining whether an employer is an applicable large employer for purposes of section 4980H(c)(2) of the Internal Revenue Code of 1986) employed by such eligible employer during calendar year 2019 was greater than 1,500, and

"(B) the gross receipts (within the meaning of section 448(c) of the Internal Revenue Code of 1986) of such eligible employer during calendar year 2019 was greater than $41,500,000.".

(e) PHASE-IN OF ELIGIBILITY BASED ON REDUCTION IN GROSS RECEIPTS. —

(1) DECREASE OF REDUCTION IN GROSS RECEIPTS NECESSARY TO QUALIFY FOR CREDIT. — Section 2301(c)(2)(B) of the CARES Act is amended —

(A) by striking "50 percent" in clause (i) and inserting "90 percent", and

(B) by striking "80 percent" in clause (ii) and inserting "90 percent".

(2) PHASE-IN OF CREDIT IF REDUCTION IN GROSS RECEIPTS IS LESS THAN 50 PERCENT. — section 2301(c)(2) of the CARES Act is amended by adding at the end the following new subparagraph:

"(D) PHASE-IN OF CREDIT WHERE BUSINESS NOT SUSPENDED AND REDUCTION IN GROSS RECEIPTS LESS THAN 50 PERCENT. —

"(i) IN GENERAL. — In the case of any calendar quarter with respect to which an eligible employer would not be an eligible employer if subparagraph (B)(i) were applied by substituting '50 percent' for '90 percent', the amount of the credit allowed under subsection (a) shall be reduced by the amount which bears the same ratio to the amount of such credit (determined without regard to this subparagraph) as —

"(I) the excess gross receipts percentage point amount, bears to

"(II) 40 percentage points.

"(ii) EXCESS GROSS RECEIPTS PERCENTAGE POINT AMOUNT. — For purposes of this subparagraph, the term 'excess gross receipts percentage point amount' means, with respect to any calendar quarter, the excess of —

"(I) the lowest of the gross receipts percentage point amounts determined with respect to any calendar quarter during the period ending with such calendar quarter and beginning with the first calendar quarter during the period described in subparagraph (B), over

"(II) 50 percentage points.

"(iii) GROSS RECEIPTS PERCENTAGE POINT AMOUNTS. — For purposes of this subparagraph, the term 'gross receipts percentage point amount' means, with respect to any calendar quarter, the percentage (expressed as a number of percentage points) obtained by dividing —

"(I) the gross receipts (within the meaning of subparagraph (B)) for such calendar quarter, by

"(II) the gross receipts for the same calendar quarter in calendar year 2019.".

(3) GROSS RECEIPTS OF TAX-EXEMPT ORGANIZATIONS. — Section 2301(c)(2)(C) of the CARES Act is amended —

(A) by striking "of such Code, clauses (i) and (ii)(I)" and inserting "of such Code —

"(i) clauses (i) and (ii)(I)",

(B) by striking the period at the end and inserting ", and", and

(C) by adding at the end the following new clause:

"(ii) any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033 of such Code.".

(f) MODIFICATION OF TREATMENT OF HEALTH PLAN EXPENSES. —

(1) IN GENERAL. — Section 2301(c)(5) of the CARES Act is amended to read as follows:

"(5) WAGES. —

"(A) IN GENERAL. — The term 'wages' means wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) and compensation (as defined in section 3231(e) of such Code).

"(B) ALLOWANCE FOR CERTAIN HEALTH PLAN EXPENSES. —

"(i) IN GENERAL. — Such term shall include amounts paid or incurred by the eligible employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code.

"(ii) ALLOCATION RULES. — For purposes of this section, amounts treated as wages under clause (i) shall be treated as paid with respect to any employee (and with respect to any period) to the extent that such amounts are properly allocable to such employee (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage.".

(2) CONFORMING AMENDMENT. — Section 2301(c)(3) of the CARES Act is amended by striking subparagraph (C).

(g) QUALIFIED WAGES PERMITTED TO INCLUDE AMOUNTS FOR TIP REPLACEMENT. — Section 2301(c)(3)(B) of the CARES Act is amended by inserting "(including tips which would have been deemed to be paid by the employer under section 3121(q))" after "would have been paid".

(h) CERTAIN GOVERNMENTAL EMPLOYERS ELIGIBLE FOR CREDIT. —

(1) IN GENERAL. — Section 2301(f) of the CARES Act is amended to read as follows:

"(f) CERTAIN GOVERNMENTAL EMPLOYERS. —

"(1) IN GENERAL. — The credit under this section shall not be allowed to the Federal Government or any agency or instrumentality thereof.

"(2) EXCEPTION. — Paragraph (1) shall not apply to any organization described in section 501(c)(1) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code.

"(3) SPECIAL RULES. — In the case of any State government, Indian tribal government, or any agency, instrumentality, or political subdivision of the foregoing —

"(A) clauses (i) and (ii)(I) of subsection (c)(2)(A) shall apply to all operations of such entity, and

"(B) subclause (II) of subsection (c)(2)(A)(ii) shall not apply.".

(2) COORDINATION WITH APPLICATION OF CERTAIN DEFINITIONS. —

(A) IN GENERAL. — Section 2301(c)(5)(A) of the CARES Act, as amended by the preceding provisions of this Act, is amended by adding at the end the following: "For purposes of the preceding sentence (other than for purposes of subsection (b)(2)), wages as defined in section 3121(a) of the Internal Revenue Code of 1986 shall be determined without regard to paragraphs (1), (5), (6), (7), (8), (10), (13), (18), (19), and (22) of section 3212(b) of such Code (except with respect to services performed in a penal institution by an inmate thereof).".

(B) CONFORMING AMENDMENTS. — Sections 2301(c)(6) of the CARES Act is amended by striking "Any term" and inserting "Except as otherwise provided in this section, any term".

(i) COORDINATION WITH INCOME TAX CREDITS. — Section 2301(h) of the CARES Act, as amended by preceding provisions of this Act, is amended —

(1) by striking paragraphs (1) and (2) and inserting the following:

"(1) COORDINATION WITH INCOME TAX CREDITS. — Any wages taken into account in determining the credit allowed under this section shall not be taken into account as wages for purposes of sections 41, 45A, 45B, 45P, 45S, 51, and 1396 of the Internal Revenue 23 Code of 1986.", and

(2) by redesignating paragraph (3) as paragraph (2).

(j) APPLICATION OF CREDIT TO EMPLOYERS OF DOMESTIC WORKERS. —

(1) IN GENERAL. — Section 2301(c)(2) of the CARES Act, as amended by the preceding provisions of this Act, is amended by adding at the end the following new subparagraph:

"(E) EMPLOYERS OF DOMESTIC WORKERS. — In the case of an employer with one or more employees who perform domestic service (within the meaning of section 3121(a)(7) of such Code) in the private home of such employer, with respect to such employees —

"(i) subparagraph (A) shall be applied —

"(I) by substituting 'employing an employee who performs domestic service in the private home of such employer' for 'carrying on a trade or business' in clause (i) thereof, and

"(II) by substituting 'such employment' for 'the operation of the trade or business' in clause (ii)(I) thereof.

"(ii) subclause (II) of subparagraph (A)(ii) shall not apply, and

"(iii) such employer shall be treated as a large employer.".

(2) DENIAL OF DOUBLE BENEFIT. — Section 2301(h)(1) of the CARES Act, as amended by the preceding provisions of this Act, is further amended —

(A) by striking "shall not be taken into account as wages" and inserting "shall not be taken into account as —

"(A) wages",

(B) by striking the period at the end and inserting ", and", and

(C) by adding at the end the following:

"(B) if such wages are paid for domestic service described in subsection (c)(2)(E), as employment-related expenses for purposes of section 21 of such Code.

In the case of any individual who pays wages for domestic service described in subsection (c)(2)(E) and receives a reimbursement for such wages which is excludible from gross income under section 129 of such Code, such wages shall not be treated as qualified wages for purposes of this section.".

(k) COORDINATION WITH GOVERNMENT GRANTS. — Section 2301(h) of the CARES Act, as amended by the preceding provisions of this Act, is further amended by adding at the end the following new paragraph:

"(3) COORDINATION WITH GOVERNMENT GRANTS. — Qualified wages shall not be taken into account under this section to the extent that grants (or similar amounts) are provided by the Federal government for purposes of paying or reimbursing expenses for such wages.".

(l) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in section 2301 of the CARES Act.

SEC. 202. CERTAIN LOAN FORGIVENESS AND OTHER BUSINESS FINANCIAL ASSISTANCE UNDER CARES ACT NOT INCLUDIBLE IN GROSS INCOME.

(a) UNITED STATES TREASURY PROGRAM MANAGEMENT AUTHORITY. — For purposes of the Internal Revenue Code of 1986, no amount shall be included in gross income by reason of loan forgiveness described in section 1109(d)(2)(D) of the CARES Act.

(b) EMERGENCY EIDL GRANTS. — For purposes of the Internal Revenue Code of 1986, any advance described in section 1110(e) of the CARES Act shall not be included in the gross income of the person that receives such advance.

(c) SUBSIDY FOR CERTAIN LOAN PAYMENTS. — For purposes of the Internal Revenue Code of 1986, any payment described in section 1112(c) of the CARES Act shall not be included in the gross income of the person on whose behalf such payment is made.

(d) RESTAURANTS GRANTS. — For purposes of the Internal Revenue Code of 1986, any grants (or similar amounts) made to an eligible entity under the RESTAURANTS Act of 2020 shall not be included in the gross income of such entity.

(e) EFFECTIVE DATE. — (1) Subsections (a), (b), and (c) shall apply to taxable years ending after the date of the enactment of the CARES Act.

(2) RESTAURANTS GRANTS. — Subsection (d) shall apply to taxable years ending after the date of the enactment of the RESTAURANTS Act of 2020.

SEC. 203. CLARIFICATION OF TREATMENT OF EXPENSES PAID OR INCURRED WITH PROCEEDS FROM CERTAIN GRANTS AND LOANS.

(a) IN GENERAL. — For purposes of the Internal Revenue Code of 1986 and notwithstanding any other provision of law, any deduction and the basis of any property shall be determined without regard to whether any amount is excluded from gross income under section 202 of this Act or section 1106(i) of the CARES Act.

(b) CLARIFICATION OF EXCLUSION OF LOAN FOR GIVENESS. — Section 1106(i) of the CARES Act is amended to read as follows:

"(i) TAXABILITY. — For purposes of the Internal Revenue Code of 1986, no amount shall be included in the gross income of the eligible recipient by reason of forgiveness of indebtedness described in subsection (b).".

(c) EFFECTIVE DATE. — Subsection (a) and the amendment made by subsection (b) shall apply to taxable years ending after the date of the enactment of the CARES Act.

TITLE III — NET OPERATING LOSSES

SEC. 301. LIMITATION ON EXCESS BUSINESS LOSSES OF NON-CORPORATE TAXPAYERS RESTORED AND MADE PERMANENT.

(a) IN GENERAL. — Section 461(l)(1) of the Internal Revenue Code of 1986 is amended to read as follows:

"(1) LIMITATION. — In the case of a taxpayer other than a corporation, any excess business loss of the taxpayer shall not be allowed.".

(b) FARMING LOSSES. — Section 461 of such Code is amended by striking subsection (j).

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2017.

SEC. 302. CERTAIN TAXPAYERS ALLOWED CARRYBACK OF NET OPERATING LOSSES ARISING IN 2019 AND 2020.

(a) CARRYBACK OF LOSSES ARISING IN 2019 AND 2020. —

(1) IN GENERAL. — Section 172(b)(1)(D)(i) of the Internal Revenue Code of 1986 is amended to read as follows:

"(i) IN GENERAL. — In the case of any net operating loss arising in a taxable year beginning after December 31, 2018, and before January 1, 2021, and to which subparagraphs (B) and (C)(i) do not apply, such loss shall be a net operating loss carryback to each taxable year preceding the taxable year of such loss, but not to any taxable year beginning before January 1, 2018.".

(2) CONFORMING AMENDMENTS. —

(A) The heading for section 172(b)(1)(D) of such Code is amended by striking "2018, 2019, AND" and inserting "2019 AND".

(B) Section 172(b)(1)(D) of such Code is amended by striking clause (iii) and by redesignating clauses (iv) and (v) as clauses (iii) and (iv), respectively.

(C) Section 172(b)(1)(D)(iii) of such Code, as so redesignated, is amended by striking "(i)(I)" and inserting "(i)".

(D) Section 172(b)(1)(D)(iv) of such Code, as so redesignated, is amended —

(i) by striking "If the 5-year carryback period under clause (i)(I)" in subclause (I) and inserting "If the carryback period under clause (i)", and

(ii) by striking "2018 or" in subclause (II).

(b) DISALLOWED FOR CERTAIN TAXPAYERS. — Section 172(b)(1)(D) of such Code, as amended by the preceding provisions of this Act, is amended by adding at the end the following new clauses:

"(v) CARRYBACK DISALLOWED FOR CERTAIN TAXPAYERS. — Clause (i) shall not apply with respect to any loss arising in a taxable year in which —

"(I) the taxpayer (or any related person) is not allowed a deduction under this chapter for the taxable year by reason of section 162(m) or section 280G, or

"(II) the taxpayer (or any related person) is a specified corporation for the taxable year.

"(vi) SPECIFIED CORPORATION. — For purposes of clause (v) —

"(I) IN GENERAL. — The term 'specified corporation' means, with respect to any taxable year, a corporation the fair market value of the aggregate distributions (including redemptions), measured as of the date of each such distribution, of which during all taxable years ending after December 31, 2017, exceed the sum of applicable stock issued of such corporation and 5 percent of the fair market value of the stock of such corporation as of the last day of the taxable year.

"(II) APPLICABLE STOCK ISSUED. — The term 'applicable stock issued' means, with respect to any corporation, the aggregate fair market value of stock (as of the issue date of such stock) issued by the corporation during all taxable years ending after December 31, 2017, in exchange for money or property other than stock in such corporation.

"(III) CERTAIN PREFERRED STOCK DISREGARDED. — For purposes of subclause (I), stock described in section 1504(a)(4), and distributions (including redemptions) with respect to such stock, shall be disregarded.

"(vii) RELATED PERSON. — For purposes of clause (v), a person is a related person to a taxpayer if the related person bears a relationship to the taxpayer specified in section 267(b) or section 707(b)(1).".

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the enactment of section 2303(b) of the Coronavirus Aid, Relief, and Economic Security Act.

DIVISION G — RETIREMENT PROVISIONS

SEC. 100. SHORT TITLE, ETC.

(a) SHORT TITLE. — This division may be cited as the "Emergency Pension Plan Relief Act of 2020".

(b) TABLE OF CONTENTS. — The table of contents for this division is as follows:

Sec. 100. Short title, etc.

TITLE I — RELIEF FOR MULTIEMPLOYER PENSION PLANS

Sec. 101. Special partition relief.

Sec. 102. Repeal of benefit suspensions for multiemployer plans in critical and declining status.

Sec. 103. Temporary delay of designation of multiemployer plans as in endangered, critical, or critical and declining status.

Sec. 104. Temporary extension of the funding improvement and rehabilitation periods for multiemployer pension plans in critical and endangered status for 2020 or 2021.

Sec. 105. Adjustments to funding standard account rules.

Sec. 106. PBGC guarantee for participants in multiemployer plans.

TITLE II — RELIEF FOR SINGLE EMPLOYER PENSION PLANS

Sec. 201. Extended amortization for single employer plans.

Sec. 202. Extension of pension funding stabilization percentages for single employer plans.

TITLE III — OTHER RETIREMENT RELATED PROVISIONS

Sec. 301. Waiver of required minimum distributions for 2019.

Sec. 302. Waiver of 60-day rule in case of rollover of otherwise required minimum distributions in 2019 or 2020.

Sec. 303. Exclusion of benefits provided to volunteer firefighters and emergency medical responders made permanent.

Sec. 304. Application of special rules to money purchase pension plans.

Sec. 305. Grants to assist lowincome women and survivors of domestic violence in obtaining qualified domestic relations orders.

Sec. 306. Modification of special rules for minimum funding standards for com

Sec. 307. Minimum rate of interest for certain determinations related to life insurance contracts.

TITLE I — RELIEF FOR MULTIEMPLOYER PENSION PLANS

SEC. 101. SPECIAL PARTITION RELIEF.

(a) APPROPRIATION. — Section 4005 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1305) is amended by adding at the end the following:

"(i)(1) An eighth fund shall be established for partition assistance to multiemployer pension plans, as provided under section 4233A, and to pay for necessary administrative and operating expenses relating to such assistance.

"(2) There is appropriated from the general fund such amounts as necessary for the costs of providing partition assistance under section 4233A and necessary administrative and operating expenses. The eighth fund established under this subsection shall be credited with such amounts from time to time as the Secretary of the Treasury determines appropriate, from the general fund of the Treasury, and such amounts shall remain available until expended.".

(b) SPECIAL PARTITION AUTHORITY. — The Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by inserting after section 4233 the following:

"SEC. 4233A. SPECIAL PARTITION RELIEF.

"(a) SPECIAL PARTITION AUTHORITY. —

"(1) IN GENERAL. — Upon the application of a plan sponsor of an eligible multiemployer plan for partition of the plan under this section, the corporation shall order a partition of the plan in accordance with this section.

"(2) INAPPLICABILITY OF CERTAIN REPAYMENT OBLIGATION. — A plan receiving partition assistance pursuant to this section shall not be subject to repayment obligations under section 4261(b)(2).

"(b) ELIGIBLE PLANS. —

"(1) IN GENERAL. — For purposes of this section, a multiemployer plan is an eligible multiemployer plan if —

"(A) the plan is in critical and declining status (within the meaning of section 305(b)(6)) in any plan year beginning in 2020 through 2024;

"(B) a suspension of benefits has been approved with respect to the plan under section 305(e)(9) as of the date of the enactment of this section;

"(C) in any plan year beginning in 2020 through 2024, the plan is certified by the plan meaning of section 305(b)(2)), has a modified funded percentage of less than 40 percent, and has a ratio of active to inactive participants which is less than 2 to 3; or

"(D) the plan is insolvent for purposes of section 418E of the Internal Revenue Code of 1986 as of the date of enactment of this section, if the plan became insolvent after December 16, 2014, and has not been terminated by such date of enactment.

"(2) MODIFIED FUNDED PERCENTAGE. — For purposes of paragraph (1)(C), the term 'modified funded percentage' means the percentage equal to a fraction the numerator of which is current value of plan assets (as defined in section 3(26) of such Act) and the denominator of which is current liabilities (as defined in section 431(c)(6)(D) of such Code and section 304(c)(6)(D) of such Act).

"(c) APPLICATIONS FOR SPECIAL PARTITION. —

"(1) GUIDANCE. — The corporation shall issue guidance setting forth requirements for special partition applications under this section not later than 120 days after the date of the enactment of this section. In such guidance, the corporation shall —

"(A) limit the materials required for a special partition application to the minimum necessary to make a determination on the application; and

"(B) provide for an alternate application for special partition under this section, which may be used by a plan that has been approved for a partition under section 4233 before the date of enactment of this section.

"(2) TEMPORARY PRIORITY CONSIDERATION OF APPLICATIONS. —

"(A) IN GENERAL. — The corporation may specify in guidance under paragraph (1) that, during the first 2 years following the date of enactment of this section, special partition applications will be provided priority consideration, if —

"(i) the plan is likely to become insolvent within 5 years of the date of enactment of this section;

"(ii) the corporation projects a plan to have a present value of financial assistance payments under section 4261 that exceeds $1,000,000,000 if the special partition is not ordered;

"(iii) the plan has implemented benefit suspensions under section 305(e)(9) as of the date of the enactment of this section; or

"(iv) the corporation determines it appropriate based on other circumstances.

"(B) NO EFFECT ON AMOUNT OF ASSISTANCE. — A plan that is approved for special partition assistance under this section shall not receive reduced special partition assistance on account of not receiving priority consideration under subparagraph (A).

"(3) ACTUARIAL ASSUMPTIONS AND OTHER INFORMATION. — The corporation shall accept assumptions incorporated in a multiemployer plan's determination that it is in critical status or critical and declining status (within the meaning of section 305(b)), or that the plan's modified funded percentage is less than 40 percent, unless such assumptions are clearly erroneous. The corporation may require such other information as the corporation determines appropriate for making a determination of eligibility and the amount of special partition assistance necessary under this section.

"(4) APPLICATION DEADLINE. — Any application by a plan for special partition assistance under this section shall be submitted no later than December 31, 2026, and any revised application for special partition assistance shall be submitted no later than December 31, 2027.

"(5) NOTICE OF APPLICATION. — Not later than 120 days after the date of enactment of this section, the corporation shall issue guidance requiring multiemployer plans to notify participants and beneficiaries that the plan has applied for partition under this section, after the corporation has determined that the application is complete. Such notice shall reference the special partition relief internet website described in subsection (p).

"(d) DETERMINATIONS ON APPLICATIONS. — A plan's application for special partition under this section that is timely filed in accordance with guidance issued under subsection (c)(1) shall be deemed approved and the corporation shall issue a special partition order unless the corporation notifies the plan within 120 days of the filing of the application that the application is incomplete or the plan is not eligible under this section. Such notice shall specify the reasons the plan is ineligible for a special partition or information needed to complete the application. If a plan is denied partition under this subsection, the plan may submit a revised application under this section. Any revised application for special partition submitted by a plan shall be deemed approved unless the corporation notifies the plan within 120 days of the filing of the revised application that the application is incomplete or the plan is not eligible under this section. A special partition order issued by the corporation shall be effective no later than 120 days after a plan's special partition application is approved by the corporation or deemed approved.

"(e) AMOUNT AND MANNER OF SPECIAL PARTITION ASSISTANCE. —

"(1) IN GENERAL. — The liabilities of an eligible multiemployer plan that the corporation assumes pursuant to a special partition order under this section shall be the amount necessary for the plan to meet its funding goals described in subsection (g).

"(2) NO CAP. — Liabilities assumed by the corporation pursuant to a special partition order under this section shall not be capped by the guarantee under section 4022A. The corporation shall have discretion on how liabilities of the plan are partitioned.

"(f) SUCCESSOR PLAN. —

"(1) IN GENERAL. — The plan created by a special partition order under this section is a successor plan to which section 4022A applies.

"(2) PLAN SPONSOR AND ADMINISTRATOR. — The plan sponsor of an eligible multiemployer plan prior to the special partition and the administrator of such plan shall be the plan sponsor and the administrator, respectively, of the plan created by the partition.

"(g) FUNDING GOALS. —

"(1) IN GENERAL. — The funding goals of a multiemployer plan eligible for partition under this section are both of the following:

"(A) The plan will remain solvent over 30 years with no reduction in a participant's or beneficiary's accrued benefit (except to the extent of a reduction in accordance with section 305(e)(8) adopted prior to the plan's application for partition under this section).

"(B) The funded percentage of the plan (disregarding partitioned benefits) at the end of the 30-year period is projected to be 80 percent.

"(2) BASIS. — The funding projections under paragraph (1) shall be performed on a deterministic basis.

"(h) RESTORATION OF BENEFIT SUSPENSIONS. — An eligible multiemployer plan that is partitioned under this section shall —

"(1) reinstate any benefits that were suspended under section 305(e)(9) or section 4245(a), effective as of the first month the special partition order is effective, for participants or beneficiaries as of the effective date of the partition; and

"(2) provide payments equal to the amount of benefits previously suspended to any participants or beneficiaries in pay status as of the effective date of the special partition, payable in the form of a lump sum within 3 months of such effective date or in equal monthly installments over a period of 5 years, with no adjustment for interest.

"(i) ADJUSTMENT OF SPECIAL PARTITION ASSISTANCE. —

"(1) IN GENERAL. — Every 5 years, the corporation shall adjust the special partition assistance described in subsection (e) as necessary for the eligible multiemployer plan to satisfy the funding goals described in subsection (g). If the 30 year period described in subsection (g) has lapsed, in applying this paragraph, 5 years shall be substituted for 30 years.

"(2) SUBMISSION OF INFORMATION. — An eligible multiemployer plan that is the subject of a special partition order under subsection (a) shall submit such information as the corporation may require to determine the amount of the adjustment under paragraph (1).

"(3) CESSATION OF ADJUSTMENTS. — Adjustments under this subsection with respect to special partition assistance for an eligible multiemployer plan shall cease and the corporation shall permanently assume liability for payment of any benefits transferred to the successor plan (subject to subsection (l)) beginning with the first plan year that the funded percentage of the eligible multiemployer plan (disregarding partitioned benefits) is at least 80 percent and the plan's projected funded percentage for each of the next 10 years is at least 80 percent. Any accumulated funding deficiency of the plan (within the meaning of section 304(a)) shall be reduced to zero as of the first day of the plan year for which partition assistance is permanent under this paragraph.

"(j) CONDITIONS ON PLANS DURING PARTITION. —

"(1) IN GENERAL. — The corporation may impose, by regulation, reasonable conditions on an eligible multiemployer plan that is partitioned under section (a) relating to increases in future accrual rates and any retroactive benefit improvements, allocation of plan assets, reductions in employer contribution rates, diversion of contributions to, and allocation of, expenses to other retirement plans, and withdrawal liability.

"(2) LIMITATIONS. — The corporation shall not impose conditions on an eligible multiemployer plan as a condition of or following receipt of such partition assistance under this section relating to —

"(A) any reduction in plan benefits (including benefits that may be adjusted pursuant to section 305(e)(8));

"(B) plan governance, including selection of, removal of, and terms of contracts with, trustees, actuaries, investment managers, and other service providers; or

"(C) any funding rules relating to the plan that is partitioned under this section.

"(3) CONDITION. — An eligible multiemployer plan that is partitioned under subsection (a) shall continue to pay all premiums due under section 4007 for participants and beneficiaries in the plan created by a special partition order until the plan year beginning after a cessation of adjustments applies under subsection (i).

"(k) WITHDRAWAL LIABILITY. — An employer's withdrawal liability for purposes of this title shall be calculated taking into account any plan liabilities that are partitioned under subsection (a) until the plan year beginning after the expiration of 15 calendar years from the effective date of the partition.

"(l) CESSATION OF PARTITION ASSISTANCE. — If a plan that receives partition assistance under this section becomes insolvent for purposes of section 418E of the Internal Revenue Code of 1986, the plan shall no longer be eligible for assistance under this section and shall be eligible for assistance under section 4261.

"(m) REPORTING. — An eligible multiemployer plan that receives partition assistance under this section shall file with the corporation a report, including the following information, in such manner (which may include electronic filing requirements) and at such time as the corporation requires:

"(1) The funded percentage (as defined in section 305(j)(2)) as of the first day of such plan year, and the underlying actuarial value of assets and liabilities taken into account in determining such percentage.

"(2) The market value of the assets of the plan (determined as provided in paragraph (1)) as of the last day of the plan year preceding such plan year.

"(3) The total value of all contributions made by employers and employees during the plan year preceding such plan year.

"(4) The total value of all benefits paid during the plan year preceding such plan year.

"(5) Cash flow projections for such plan year and the 9 succeeding plan years, and the assumptions used in making such projections.

"(6) Funding standard account projections for such plan year and the 9 succeeding plan years, and the assumptions relied upon in making such projections.

"(7) The total value of all investment gains or losses during the plan year preceding such plan year.

"(8) Any significant reduction in the number of active participants during the plan year preceding such plan year, and the reason for such reduction.

"(9) A list of employers that withdrew from the plan in the plan year preceding such plan year, the payment schedule with respect to such withdrawal liability, and the resulting reduction in contributions.

"(10) A list of employers that paid withdrawal liability to the plan during the plan year preceding such plan year and, for each employer, a total assessment of the withdrawal liability paid, the annual payment amount, and the number of years remaining in the payment schedule with respect to such withdrawal liability.

"(11) Any material changes to benefits, accrual rates, or contribution rates during the plan year preceding such plan year, and whether such changes relate to the conditions of the partition assistance.

"(12) Details regarding any funding improvement plan or rehabilitation plan and updates to such plan.

"(13) The number of participants and beneficiaries during the plan year preceding such plan year who are active participants, the number of participants and beneficiaries in pay status, and the number of terminated vested participants and beneficiaries.

"(14) The information contained on the most recent annual funding notice submitted by the plan under section 101(f).

"(15) The information contained on the most recent annual return under section 6058 of the Internal Revenue Code of 1986 and actuarial report under section 6059 of such Code of the plan.

"(16) Copies of the plan document and amendments, other retirement benefit or ancillary benefit plans relating to the plan and contribution obligations under such plans, a breakdown of administrative expenses of the plan, participant census data and distribution of benefits, the most recent actuarial valuation report as of the plan year, financial reports, and copies of the portions of collective bargaining agreements relating to plan contributions, funding coverage, or benefits, and such other information as the corporation may reasonably require.

Any information disclosed by a plan to the corporation that could identify individual employers shall be confidential and not subject to publication or disclosure.

"(n) REPORT TO CONGRESS. —

"(1) IN GENERAL. — Not later than 1 year after the date of enactment of this section and annually thereafter, the board of directors of the corporation shall submit to the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate and the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives a detailed report on the implementation and administration of this section. Such report shall include —

"(A) information on the name and number of multiemployer plans that have applied for partition assistance under this section;

"(B) the name and number of such plans that have been approved for partition assistance under this section and the name and number of the plans that have not been approved for special partition assistance;

"(C) a detailed rationale for any decision by the corporation to not approve an application for special partition assistance;

"(D) the amount of special partition assistance provided to eligible multiemployer plans (including amounts provided on an individual plan basis and in the aggregate);

"(E) the name and number of the multiemployer plans that restored benefit suspensions and provided lump sum or monthly installment payments to participants or beneficiaries;

"(F) the amount of benefits that were restored and lump sum or monthly installment payments that were paid (including amounts provided on an individual plan basis and in the aggregate);

"(G) the name and number of the plans that received adjustments to partition assistance under subsection (i);

"(H) a list of, and rationale for, each reasonable condition imposed by the corporation on plans approved for special partition assistance under this section;

"(I) the contracts that have been awarded by the corporation to implement or administer this section;

"(J) the number, purpose, and dollar amounts of the contracts that have been awarded to implement or administer the section;

"(K) a detailed summary of the reports required under subsection (m); and

"(L) a detailed summary of the feedback received on the pension relief internet website established under subsection (p).

"(2) PBGC CERTIFICATION. — The board of directors of the corporation shall include with the report under paragraph (1) a certification and affirmation that the amount of special partition assistance provided to each plan under this section is the amount necessary to meet its funding goals under subsection (g), including, if applicable, any adjustment of special partition assistance as determined under subsection (i).

"(3) CONFIDENTIALITY. — Congress may publicize the reports received under paragraph (1) only after redacting all sensitive or proprietary information.

"(o) GAO REPORT. — Not later than 1 year after the first partition application is approved by the corporation under this section, and biennially thereafter, the Comptroller General of the United States shall submit to the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate and the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives a detailed report on the actions of the corporation to implement and administer this section, including an examination of the contracts awarded by such corporation to carry out this section and an analysis of such corporation's compliance with subsections (e) and (g).

"(p) SPECIAL PARTITION RELIEF WEBSITE. —

"(1) ESTABLISHMENT. — Not later than 120 days after the date of enactment of this section, the corporation shall establish and maintain a user friendly, public-facing internet website to foster greater accountability and transparency in the implementation and administration of this section.

"(2) PURPOSE. — The internet website established and maintained under paragraph (1) shall be a portal to key information relating to this section for multiemployer plan administrators and trustees, plan participants, beneficiaries, participating employers, other stakeholders, and the public.

"(3) CONTENT AND FUNCTION. — The internet website established under paragraph (1) shall —

"(A) describe the nature and scope of the special partition authority and assistance under this section in a manner calculated to be understood by the average plan participant;

"(B) include published guidance, Regulations, and all other relevant information on the implementation and administration of this section;

"(C) include, with respect to plan applications for special partition assistance —

"(i) a general description of the process by which eligible plans can apply for special partition assistance, information on how and when the corporation will process and consider plan applications;

"(ii) information on how the corporation will address any incomplete applications as specified in under this section;

"(iii) a list of the plans that have applied for special partition assistance and, for each application, the date of submission of a completed application;

"(iv) the text of each plan's completed application for special partition assistance with appropriate redactions of personal, proprietary, or sensitive information;

"(v) the estimated date that a decision will be made by the corporation on each application;

"(vi) the actual date when such decision is made;

"(vii) the corporation's decision on each application; and

"(viii) as applicable, a detailed rationale for any decision not to approve a plan's application for special partition assistance;

"(D) provide detailed information on each contract solicited and awarded to implement or administer this section;

"(E) include reports, audits, and other relevant oversight and accountability information on this section, including the annual reports submitted by the board of directors of the corporation to Congress required under subsection (n), the Office of the Inspector General audits, correspondence, and publications, and the Government Accountability Office reports under subsection (o);

"(F) provide a clear means for multiemployer plan administrators, plan participants, beneficiaries, other stakeholders, and the public to contact the corporation and provide feedback on the implementation and administration of this section; and

"(G) be regularly updated to carry out the purposes of this subsection.

"(q) OFFICE OF INSPECTOR GENERAL. — There is authorized to be appropriated to the corporation's Office of Inspector General $24,000,000 for fiscal year 2020, which shall remain available through September 30, 2028, for salaries and expenses necessary for conducting investigations and audits of the implementation and administration of this section.

"(r) APPLICATION OF EXCISE TAX. — During the period that a plan is subject to a partition order under this section and prior to a cessation of adjustments pursuant to subsection (i)(3), the plan shall not be subject to section 4971 of the Internal Revenue Code of 1986.".

SEC. 102. REPEAL OF BENEFIT SUSPENSIONS FOR MULTI-EMPLOYER PLANS IN CRITICAL AND DECLINING STATUS.

(a) AMENDMENT TO INTERNAL REVENUE CODE OF 1986. — Paragraph (9) of section 432(e) of the Internal Revenue Code of 1986 is repealed.

(b) AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Paragraph (9) of section 305(e) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(e)) is repealed.

(c) EFFECTIVE DATE. — The repeals made by this section shall not apply to plans that have been approved for a suspension of benefit under section 432(e)(9)(G) of the Internal Revenue Code of 1986 and section 305(e)(9)(G) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(e)(9)(G)) before the date of the enactment of this Act.

SEC. 103. TEMPORARY DELAY OF DESIGNATION OF MULTI-EMPLOYER PLANS AS IN ENDANGERED, CRITICAL, OR CRITICAL AND DECLINING STATUS.

(a) IN GENERAL. — Notwithstanding the actuarial certification under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 and section 432(b)(3) of the Internal Revenue Code of 1986, if a plan sponsor of a multiemployer plan elects the application of this section, then, for purposes of section 305 of such Act and section 432 of such Code —

(1) the status of the plan for its first plan year beginning during the period beginning on March 1, 2020, and ending on February 28, 2021, or the next succeeding plan year (as designated by the plan sponsor in such election), shall be the same as the status of such plan under such sections for the plan year preceding such designated plan year, and

(2) in the case of a plan which was in endangered or critical status for the plan year preceding the designated plan year described in paragraph (1), the plan shall not be required to update its plan or schedules under section 305(c)(6) of such Act and section 432(c)(6) of such Code, or section 305(e)(3)(B) of such Act and section 432(e)(3)(B) of such Code, whichever is applicable, until the plan year following the designated plan year described in paragraph (1).

If section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 did not apply to the plan year preceding the designated plan year described in paragraph (1), the plan actuary shall make a certification of the status of the plan under section 305(b)(3) of such Act and section 432(b)(3) of such Code for the preceding plan year in the same manner as if such sections had applied to such preceding plan year.

(b) EXCEPTION FOR PLANS BECOMING CRITICAL

(1) an election was made under subsection (a) with respect to a multiemployer plan, and

(2) such plan has, without regard to such election, been certified by the plan actuary under section 305(b)(3) of the Employee Retirement Income Security Act of 1974 and section 432(b)(3) of the Internal Revenue Code of 1986 to be in critical status for the designated plan year described in subsection (a)(1), then such plan shall be treated as a plan in critical status for such plan year for purposes of applying section 4971(g)(1)(A) of such Code, section 302(b)(3) of such Act (without regard to the second sentence thereof), and section 412(b)(3) of such Code (without regard to the second sentence thereof).

(c) ELECTION AND NOTICE. —

(1) ELECTION. — An election under subsection (a) —

(A) shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary's delegate may prescribe and, once made, may be revoked only with the consent of the Secretary, and

(B) if made —

(i) before the date the annual certification is submitted to the Secretary or the Secretary's delegate under section 305(b)(3) of such Act and section 432(b)(3) of such Code, shall be included with such annual certification, and

(ii) after such date, shall be submitted to the Secretary or the Secretary's delegate not later than 30 days after the date of the election.

(2) NOTICE TO PARTICIPANTS. —

(A) IN GENERAL. — Notwithstanding section 305(b)(3)(D) of the Employee Retirement Income Security Act of 1974 and section 432(b)(3)(D) of the Internal Revenue Code of 1986, if the plan is neither in endangered nor critical status by reason of an election made under subsection (a) —

(i) the plan sponsor of a multiemployer plan shall not be required to provide notice under such sections, and

(ii) the plan sponsor shall provide to the participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor a notice of the election under subsection (a) and such other information as the Secretary of the Treasury (in consultation with the Secretary of Labor) may require —

(I) if the election is made before the date the annual certification is submitted to the Secretary or the Secretary's delegate under section 305(b)(3) of such Act and section 432(b)(3) of such Code, not later than 30 days after the date of the certification, and

(II) if the election is made after such date, not later than 30 days after the date of the election.

(B) NOTICE OF ENDANGERED STATUS. — Notwithstanding section 305(b)(3)(D) of such Act and section 432(b)(3)(D) of such Code, if the plan is certified to be in critical status for any plan year but is in endangered status by reason of an election made under subsection (a), the notice provided under such sections shall be the notice which would have been provided if the plan had been certified to be in endangered status.

SEC. 104. TEMPORARY EXTENSION OF THE FUNDING IMPROVEMENT AND REHABILITATION PERIODS FOR MULTIEMPLOYER PENSION PLANS IN CRITICAL AND ENDANGERED STATUS FOR 2020 OR 2021.

(a) IN GENERAL. — If the plan sponsor of a multiemployer plan which is in endangered or critical status for a plan year beginning in 2020 or 2021 (determined after application of section 4) elects the application of this section, then, for purposes of section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 —

(1) except as provided in paragraph (2), the plan's funding improvement period or rehabilitation period, whichever is applicable, shall be 15 years rather than 10 years, and

(2) in the case of a plan in seriously endangered status, the plan's funding improvement period shall be 20 years rather than 15 years.

(b) DEFINITIONS AND SPECIAL RULES. — For purposes of this section —

(1) ELECTION. — An election under this section shall be made at such time, and in such manner and form, as (in consultation with the Secretary of Labor) the Secretary of the Treasury or the Secretary's delegate may prescribe.

(2) DEFINITIONS. — Any term which is used in this section which is also used in section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such sections.

(c) EFFECTIVE DATE. — This section shall apply to plan years beginning after December 31, 2019.

SEC. 105. ADJUSTMENTS TO FUNDING STANDARD ACCOUNT RULES.

(a) ADJUSTMENTS. —

(1) AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 304(b)(8) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is amended by adding at the end the following new subparagraph:

"(F) RELIEF FOR 2020 AND 2021. — A multiemployer plan with respect to which the solvency test under subparagraph (C) is met as of February 29, 2020, may elect to apply this paragraph by substituting 'February 29, 2020' for 'August 31, 2008' each place it appears in subparagraphs (A)(i), (B)(i)(I), and (B)(i)(II) (without regard to whether such plan previously elected the application of this paragraph). The preceding sentence shall not apply to a plan with respect to which a partition order is in effect under section 4233A.".

(2) AMENDMENT TO INTERNAL REVENUE CODE OF 1986. — Section 431(b)(8) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(F) RELIEF FOR 2020 AND 2021. — A multiemployer plan with respect to which the solvency test under subparagraph (C) is met as of February 29, 2020, may elect to apply this paragraph by substituting 'February 29, 2020' for 'August 31, 2008' each place it appears in subparagraphs (A)(i), (B)(i)(I), and (B)(i)(II) (without regard to whether such plan previously elected the application of this paragraph). The preceding sentence shall not apply to a plan with respect to which a partition order is in effect under section 4233A of the Employee Retirement Income Security Act of 1974.".

(b) EFFECTIVE DATES. —

(1) IN GENERAL. — The amendments made by this section shall take effect as of the first day of the first plan year ending on or after February 29, 2020, except that any election a plan makes pursuant to this section that affects the plan's funding standard account for the first plan year beginning after February 29, 2020, shall be disregarded for purposes of applying the provisions of section 305 of the Employee Retirement Income Security Act of 1974 and section 432 of the Internal Revenue Code of 1986 to such plan year.

(2) RESTRICTIONS ON BENEFIT INCREASES. — Notwithstanding paragraph (1), the restrictions on plan amendments increasing benefits in sections 304(b)(8)(D) of such Act and 431(b)(8)(D) of such Code, as applied by the amendments made by this section, shall take effect on the date of enactment of this Act.

SEC. 106. PBGC GUARANTEE FOR PARTICIPANTS IN MULTI-EMPLOYER PLANS.

Section 4022A(c)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1322a(c)(1)) is amended by striking subparagraphs (A) and (B) and inserting the following:

"(A) 100 percent of the accrual rate up to $15, plus 75 percent of the lesser of —

"(i) $70; or

"(ii) the accrual rate, if any, in excess of $15; and

"(B) the number of the participant's years of credited service.

For each calendar year after the first full calendar year following the date of the enactment of the Emergency Pension Plan Relief Act, the accrual rates in subparagraph (A) shall increase by the national average wage index (as defined in section 209(k)(1) of the Social Security Act). For purposes of this subsection, the rates applicable for determining the guaranteed benefits of the participants of any plan shall be the rates in effect for the calendar year in which the plan becomes insolvent under section 4245 or the calendar year in which the plan is terminated, if earlier.".

TITLE II — RELIEF FOR SINGLE EMPLOYER PENSION PLANS

SEC. 201. EXTENDED AMORTIZATION FOR SINGLE EMPLOYER PLANS.

(a) 15-YEAR AMORTIZATION UNDER THE INTERNAL REVENUE CODE OF 1986. — Section 430(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(8) 15-YEAR AMORTIZATION. — With respect to plan years beginning after December 31, 2019 —

"(A) the shortfall amortization bases for all plan years preceding the first plan year beginning after December 31, 2019 (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero, and

"(B) subparagraphs (A) and (B) of paragraph (2) shall each be applied by substituting '15-plan-year period' for '7-plan-year period'.".

(b) 15-YEAR AMORTIZATION UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 303(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)) is amended by adding at the end the following new paragraph:

"(8) 15-YEAR AMORTIZATION. — With respect to plan years beginning after December 31, 2019 —

"(A) the shortfall amortization bases for all plan years preceding the first plan year beginning after December 31, 2019 (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero, and

"(B) subparagraphs (A) and (B) of paragraph (2) shall each be applied by substituting '15-plan-year period' for '7-plan-year period'.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to plan years beginning after December 31, 2019.

SEC. 202. EXTENSION OF PENSION FUNDING STABILIZATION PERCENTAGES FOR SINGLE EMPLOYER PLANS.

(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986. —

(1) IN GENERAL. — The table contained in subclause (II) of section 430(h)(2)(C)(iv) of the Internal Revenue Code of 1986 is amended to read as follows:

"If the calendar year is:

The applicable minimum percentage is:

The applicable maximum percentage is:

Any year in the period starting in 2012 and ending in 2019

90%

110%

Any year in the period starting in 2020 and ending in 2025

95%

105%

2026

90%

110%

2027

85%

115%

2028

80%

120%

2029

75%

125%

After 2029

70%

130%.".

(2) FLOOR ON 25-YEAR AVERAGES. — Subclause (I) of section 430(h)(2)(C)(iv) of such Code is amended by adding at the end the following: "Notwithstanding anything in this subclause, if the average of the first, second, or third segment rate for any 25-year period is less than 5 percent, such average shall be deemed to be 5 percent.".

(b) AMENDMENTS TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. —

(1) IN GENERAL. — The table contained in subclause (II) of section 303(h)(2)(C)(iv) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(h)(2)(C)(iv)(II)) is amended to read as follows:

"If the calendar year is:

The applicable minimum percentage is:

The applicable maximum percentage is:

Any year in the period starting in 2012 and ending in 2019

90%

110%

Any year in the period starting in 2020 and ending in 2025

95%

105%

2026

90%

110%

2027

85%

115%

2028

80%

120%

2029

75%

125%

After 2029

70%

130%.".

(2) CONFORMING AMENDMENTS. —

(A) IN GENERAL. — Section 101(f)(2)(D) of such Act (29 U.S.C. 1021(f)(2)(D)) is amended —

(i) in clause (i) by striking "and the Bipartisan Budget Act of 2015" both places it appears and inserting ", the Bipartisan Budget Act of 2015, and the Emergency Pension Plan Relief Act", and

(ii) in clause (ii) by striking "2023" and inserting "2029".

(B) STATEMENTS. — The Secretary of Labor shall modify the statements required under subclauses (I) and (II) of section 101(f)(2)(D)(i) of such Act to conform to the amendments made by this section.

(3) FLOOR ON 25-YEAR AVERAGES. — Subclause (I) of section 303(h)(2)(C)(iv) of such Act (29 U.S.C. 1083(h)(2)(C)(iv)(II)) is amended by adding at the end the following: "Notwithstanding anything in this subclause, if the average of the first, second, or third segment rate for any 25-year period is less than 5 percent, such average shall be deemed to be 5 percent.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply with respect to plan years beginning after December 31, 2019.

TITLE III — OTHER RETIREMENT RELATED PROVISIONS

SEC. 301. WAIVER OF REQUIRED MINIMUM DISTRIBUTIONS FOR 2019.

(a) IN GENERAL. — Section 401(a)(9)(I)(i) of the Internal Revenue Code of 1986 is amended by striking "calendar year 2020" and inserting "calendar years 2019 and 2020".

(b) ELIGIBLE ROLLOVER DISTRIBUTIONS. — Section 402(c)(4) of such Code is amended by striking "2020" each place it appears in the last sentence and inserting "2019 or 2020".

(c) CONFORMING AMENDMENTS. — Section 401(a)(9)(I) of such Code is amended —

(1) by striking clause (ii) and redesignating clause (iii) as clause (ii), and

(2) by striking "calendar year 2020" in clause (ii)(II), as so redesignated, and inserting "calendar years 2019 and 2020".

(d) EFFECTIVE DATE. — The amendments made by this section shall take effect as if included in the enactment of section 2203 of the Coronavirus Aid, Relief, and Economic Security Act, except that subparagraph (c)(1) thereof shall be applied by substituting "December 31, 2018" for "December 31, 2019".

SEC. 302. WAIVER OF 60-DAY RULE IN CASE OF ROLLOVER OF OTHERWISE REQUIRED MINIMUM DISTRIBUTIONS IN 2019 OR 2020.

(a) QUALIFIED TRUSTS. — 402(c)(3) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(D) EXCEPTION FOR ROLLOVER OF OTHERWISE REQUIRED MINIMUM DISTRIBUTIONS IN 2019 OR 2020. — In the case of an eligible rollover distribution described in the second sentence of paragraph (4), subparagraph (A) shall not apply to any transfer of such distribution made before December 1, 2020.".

(b) INDIVIDUAL RETIREMENT ACCOUNTS. — Section 408(d)(3) of such Code is amended by adding at the end the following new subparagraph:

"(J) WAIVER OF 60-DAY RULE AND ONCE PER-YEAR LIMITATION FOR CERTAIN 2019 AND 2020 ROLLOVERS. — In the case of a distribution during 2019 or 2020 to which, under subparagraph (E), this paragraph would not have applied had the minimum distribution requirements of section 401(a)(9) applied during such years, the 60-day requirement under subparagraph (A) and the limitation under subparagraph (B) shall not apply to such distribution to the extent the amount is paid into an individual retirement account, individual retirement annuity (other than an endowment contract), or eligible retirement plan (as defined in subparagraph (A)) as otherwise required under such subparagraph before December 1, 2020.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2018.

SEC. 303. EXCLUSION OF BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS MADE PERMANENT.

(a) IN GENERAL. — Section 139B of the Internal Revenue Code of 1986 is amended by striking subsection (d).

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 304. APPLICATION OF SPECIAL RULES TO MONEY PURCHASE PENSION PLANS.

Section 2202(a)(6)(B) of the Coronavirus Aid, Relief, and Economic Security Act is amended by inserting ", and, in the case of a money purchase pension plan, a coronavirus-related distribution which is an in-service withdrawal shall be treated as meeting the distribution rules of section 401(a) of such Code" before the period.

SEC. 305. GRANTS TO ASSIST LOW-INCOME WOMEN AND SURVIVORS OF DOMESTIC VIOLENCE IN OBTAINING QUALIFIED DOMESTIC RELATIONS ORDERS.

(a) AUTHORIZATION OF GRANT AWARDS. — The Secretary of Labor, acting through the Director of the Women's Bureau and in conjunction with the Assistant Secretary of the Employee Benefits Security Administration, shall award grants, on a competitive basis, to eligible entities to enable such entities to assist low-income women and survivors of domestic violence in obtaining qualified domestic relations orders and ensuring that those women actually obtain the benefits to which they are entitled through those orders.

(b) DEFINITION OF ELIGIBLE ENTITY. — In this section, the term "eligible entity" means a community-based organization with proven experience and expertise in serving women and the financial and retirement needs of women.

(c) APPLICATION. — An eligible entity that desires to receive a grant under this section shall submit an application to the Secretary of Labor at such time, in such manner, and accompanied by such information as the Secretary of Labor may require.

(d) MINIMUM GRANT AMOUNT. — The Secretary of Labor shall award grants under this section in amounts of not less than $250,000.

(e) USE OF FUNDS. — An eligible entity that receives a grant under this section shall use the grant funds to develop programs to offer help to low-income women or survivors of domestic violence who need assistance in preparing, obtaining, and effectuating a qualified domestic relations order.

(f) AUTHORIZATION OF APPROPRIATIONS. — There is authorized to be appropriated to carry out this section $100,000,000 for fiscal year 2020 and each succeeding fiscal year.

SEC. 306. MODIFICATION OF SPECIAL RULES FOR MINIMUM FUNDING STANDARDS FOR COMMUNITY NEWSPAPER PLANS.

(a) AMENDMENT TO INTERNAL REVENUE CODE OF 1986. — Subsection (m) of section 430 of the Internal Revenue Code of 1986, as added by the Setting Every Community Up for Retirement Enhancement Act of 2019, is amended to read as follows:

"(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER PLANS. —

"(1) IN GENERAL. — An eligible newspaper plan sponsor of a plan under which no participant has had the participant's accrued benefit increased (whether because of service or compensation) after April 2, 2019, may elect to have the alternative standards described in paragraph (4) apply to such plan.

"(2) ELIGIBLE NEWSPAPER PLAN SPONSOR. — The term 'eligible newspaper plan sponsor' means the plan sponsor of —

"(A) any community newspaper plan, or

"(B) any other plan sponsored, as of April 2, 2019, by a member of the same controlled group of a plan sponsor of a community newspaper plan if such member is in the trade or

"(3) ELECTION. — An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary.

"(4) ALTERNATIVE MINIMUM FUNDING STANDARDS. — The alternative standards described in this paragraph are the following:

"(A) INTEREST RATES. —

"(i) IN GENERAL. — Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.

"(ii) NEW BENEFIT ACCRUALS. — Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year.

"(iii) UNITED STATES TREASURY OBLIGATION YIELD CURVE. — For purposes of this subsection, the term 'United States Treasury obligation yield curve' means, with respect to any day, a yield curve which shall be prescribed by the Secretary for such day on interest-bearing obligations of the United States.

"(B) SHORTFALL AMORTIZATION BASE. —

"(i) PREVIOUS SHORTFALL AMORTIZATION BASES. — The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).

"(ii) NEW SHORTFALL AMORTIZATION BASE. — Notwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)).

"(C) DETERMINATION OF SHORTFALL AMORTIZATION INSTALLMENTS. —

"(i) 30-YEAR PERIOD. — Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting '30-plan-year' for '7-plan-year' each place it appears.

"(ii) NO SPECIAL ELECTION. — The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies.

"(D) EXEMPTION FROM AT-RISK TREATMENT. — Subsection (i) shall not apply.

"(5) COMMUNITY NEWSPAPER PLAN. — For purposes of this subsection —

"(A) IN GENERAL. — The term 'community newspaper plan' means any plan to which this section applies maintained as of December 31, 2018, by an employer which —

"(i) maintains the plan on behalf of participants and beneficiaries with respect to employment in the trade or business of publishing 1 or more newspapers which were published by the employer at any time during the 11-year period ending on the date of the enactment of this subsection,

"(ii)(I) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company, or

"(II) is controlled, directly or indirectly, during the entire 30-year period ending on the date of the enactment of this subsection by individuals who are members of the same family, and does not publish or distribute a daily newspaper that is carrier-distributed in printed form in more than 5 States, and

"(iii) is controlled, directly or indirectly —

"(I) by 1 or more persons residing primarily in a State in which the community newspaper has been published on newsprint or carrier-distributed,

"(II) during the entire 30-year period ending on the date of the enactment of this subsection by individuals who are members of the same family,

"(III) by 1 or more trusts, the sole trustees of which are persons described in subclause (I) or (II), or

"(IV) by a combination of persons described in subclause (I), (II), or (III).

"(B) NEWSPAPER. — The term 'newspaper' does not include any newspaper (determined without regard to this subparagraph) to which any of the following apply:

"(i) Is not in general circulation.

"(ii) Is published (on newsprint or electronically) less frequently than 3 times per week.

"(iii) Has not ever been regularly published on newsprint.

"(iv) Does not have a bona fide list of paid subscribers.

"(C) CONTROL. — A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities.

"(6) CONTROLLED GROUP. — For purposes of this subsection, the term 'controlled group' means all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 as of the date of the enactment of this subsection.".

(b) AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Subsection (m) of section 303 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(m)), as added by the Setting Every Community Up for Retirement Enhancement Act of 2019, is amended to read as follows:

"(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER PLANS. —

"(1) IN GENERAL. — An eligible newspaper plan sponsor of a plan under which no participant has had the participant's accrued benefit increased (whether because of service or compensation) after April 2, 2019, may elect to have the alternative standards described in paragraph (4) apply to such plan.

"(2) ELIGIBLE NEWSPAPER PLAN SPONSOR. — The term 'eligible newspaper plan sponsor' means the plan sponsor of —

"(A) any community newspaper plan, or

"(B) any other plan sponsored, as of April 2, 2019, by a member of the same controlled group of a plan sponsor of a community newspaper plan if such member is in the trade or business of publishing 1 or more newspapers.

"(3) ELECTION. — An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary of the Treasury. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary of the Treasury.

"(4) ALTERNATIVE MINIMUM FUNDING STANDARDS. — The alternative standards described in this paragraph are the following:

"(A) INTEREST RATES. —

"(i) IN GENERAL. — Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.

"(ii) NEW BENEFIT ACCRUALS. — Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year.

"(iii) UNITED STATES TREASURY OBLIGATION YIELD CURVE. — For purposes of this subsection, the term 'United States Treasury obligation yield curve' means, with respect to any day, a yield curve which shall be prescribed by the Secretary of the Treasury for such day on interest bearing obligations of the United States.

"(B) SHORTFALL AMORTIZATION BASE. —

"(i) PREVIOUS SHORTFALL AMORTIZATION BASES. — The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).

"(ii) NEW SHORTFALL AMORTIZATION BASE. — Notwithstanding subsection (c)(3), the shortfall amortization base for the first plan year to which the election under paragraph (1) applies shall be the funding shortfall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)).

"(C) DETERMINATION OF SHORTFALL AMORTIZATION INSTALLMENTS. —

"(i) 30-YEAR PERIOD. — Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting '30-plan-year' for '7-plan-year' each place it appears.

"(ii) NO SPECIAL ELECTION. — The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph (1) applies.

"(D) EXEMPTION FROM AT-RISK TREATMENT. — Subsection (i) shall not apply.

"(5) COMMUNITY NEWSPAPER PLAN. — For purposes of this subsection —

"(A) IN GENERAL. — The term 'community newspaper plan' means a plan to which this section applies maintained as of December 31, 2018, by an employer which —

"(i) maintains the plan on behalf of participants and beneficiaries with respect to employment in the trade or business of publishing 1 or more newspapers which were published by the employer at any time during the 11-year period ending on the date of the enactment of this subsection,

"(ii)(I) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company, or

"(II) is controlled, directly, or indirectly, during the entire 30-year period ending on the date of the enactment of this subsection by individuals who are members of the same family, and does not publish or distribute a daily newspaper that is carrier-distributed in printed form in more than 5 States, and

"(iii) is controlled, directly, or indirectly —

"(I) by 1 or more persons residing primarily in a State in which the community newspaper has been published on newsprint or carrier-distributed,

"(II) during the entire 30-year period ending on the date of the enactment of this subsection by individuals who are members of the same family,

"(III) by 1 or more trusts, the sole trustees of which are persons described in subclause (I) or (II), or

"(IV) by a combination of persons described in subclause (I), (II), or (III).

"(B) NEWSPAPER. — The term 'newspaper' does not include any newspaper (determined without regard to this subparagraph) to which any of the following apply:

"(i) Is not in general circulation.

"(ii) Is published (on newsprint or electronically) less frequently than 3 times per week.

"(iii) Has not ever been regularly published on newsprint.

"(iv) Does not have a bona fide list of paid subscribers.

"(C) CONTROL. — A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities.

"(6) CONTROLLED GROUP. — For purposes of this subsection, the term 'controlled group' means all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 as of the date of the enactment of this subsection.

"(7) EFFECT ON PREMIUM RATE CALCULATION. — Notwithstanding any other provision of law or any regulation issued by the Pension Benefit Guaranty Corporation, in the case of a plan for which an election is made to apply the alternative standards described in paragraph (3), the additional premium under section 4006(a)(3)(E) shall be determined as if such election had not been made.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to plan years ending after December 31, 2017.

SEC. 307. MINIMUM RATE OF INTEREST FOR CERTAIN DETERMINATIONS RELATED TO LIFE INSURANCE CONTRACTS.

(a) MODIFICATION OF MINIMUM RATE FOR PURPOSES OF CASH VALUE ACCUMULATION TEST. —

(1) IN GENERAL. — Section 7702(b)(2)(A) of the Internal Revenue Code of 1986 is amended by striking "an annual effective rate of 4 percent" and inserting "the applicable accumulation test minimum rate".

(2) APPLICABLE ACCUMULATION TEST MINIMUM RATE. — Section 7702(b) of such Code is amended by adding at the end the following new paragraph:

"(3) APPLICABLE ACCUMULATION TEST MINIMUM RATE. — For purposes of paragraph (2)(A), the term 'applicable accumulation test minimum rate' means the lesser of —

"(A) an annual effective rate of 4 percent, or

"(B) the insurance interest rate (as defined in subsection (f)(11)) in effect at the time the contract is issued.".

(b) MODIFICATION OF MINIMUM RATE FOR PURPOSES OF GUIDELINE PREMIUM REQUIREMENTS. —

(1) IN GENERAL. — Section 7702(c)(3)(B)(iii) of such Code is amended by striking "an annual effective rate of 6 percent" and inserting "the applicable guideline premium minimum rate".

(2) APPLICABLE GUIDELINE PREMIUM MINIMUM RATE. — Section7702(c)(3) of such Code is amended by adding at the end the following new subparagraph:

"(E) APPLICABLE GUIDELINE PREMIUM MINIMUM RATE. — For purposes of subparagraph (B)(iii), the term 'applicable guideline premium minimum rate' means the applicable accumulation test minimum rate (as defined in subsection (b)(3)) plus 2 percentage points.".

(c) APPLICATION OF MODIFIED MINIMUM RATES TO DETERMINATION OF GUIDELINE LEVEL PREMIUM. — Section 7702(c)(4) of such Code is amended —

(1) by striking "4 percent" and inserting "the applicable accumulation test minimum rate", and

(2) by striking "6 percent" and inserting "the applicable guideline premium minimum rate".

(d) INSURANCE INTEREST RATE. — Section 7702(f) of such Code is amended by adding at the end the following new paragraph:

"(11) INSURANCE INTEREST RATE. — For purposes of this section —

"(A) IN GENERAL. — The term 'insurance interest rate' means, with respect to any contract issued in any calendar year, the lesser of —

"(i) the section 7702 valuation interest rate for such calendar year (or, if such calendar year is not an adjustment year, the most recent adjustment year), or

"(ii) the section 7702 applicable Federal interest rate for such calendar year (or, if such calendar year is not an adjustment year, the most recent adjustment year).

"(B) SECTION 7702 VALUATION INTEREST RATE. — The term 'section 7702 valuation interest rate' means, with respect to any adjustment year, the prescribed U.S. valuation interest rate for life insurance with guaranteed durations of more than 20 years (as defined in the National Association of Insurance Commissioners' Standard Valuation Law) as effective in the calendar year immediately preceding such adjustment year.

"(C) SECTION 7702 APPLICABLE FEDERAL INTEREST RATE. — The term 'section 7702 applicable Federal interest rate' means, with respect to any adjustment year, the average (rounded to the nearest whole percentage point) of the applicable Federal midterm rates (as defined in section 1274(d) but based on annual compounding) effective as of the beginning of each of the calendar months in the most recent 60month period ending before the second calendar year prior to such adjustment year.

"(D) ADJUSTMENT YEAR. — The term 'adjustment year' means the calendar year following any calendar year that includes the effective date of a change in the prescribed U.S. valuation interest rate for life insurance with guaranteed durations of more than 20 years (as defined in the National Association of Insurance Commissioners' Standard Valuation Law).

"(E) TRANSITION RULE. — Notwithstanding subparagraph (A), the insurance interest rate shall be 2 percent in the case of any contract which is issued during the period that —

"(i) begins on January 1, 2021, and

"(ii) ends immediately before the beginning of the first adjustment year that beings after December 31, 2021.".

(e) EFFECTIVE DATE. — The amendments made by this section shall apply to contracts issued after December

31, 2020.

DIVISION H — GIVING RETIREMENT OPTIONS TO WORKERS ACT

SEC. 101. SHORT TITLE, ETC.

(a) SHORT TITLE. — This division may be cited as the "Giving Retirement Options to Workers Act of 2020" or the "GROW Act".

(b) TABLE OF CONTENTS. — The table of contents for this division is as follows:

Sec. 101. Short title, etc.

Sec. 102. Composite plans.

Sec. 103. Application of certain requirements to composite plans.

Sec. 104. Treatment of composite plans under title IV.

Sec. 105. Conforming changes.

Sec. 106. Effective date.

SEC. 102. COMPOSITE PLANS.

(a) AMENDMENT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. —

(1) IN GENERAL. — Title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by adding at the end the following:

"PART 8 — COMPOSITE PLANS AND LEGACY PLANS

"SEC. 801. COMPOSITE PLAN DEFINED.

"(a) IN GENERAL. — For purposes of this Act, the term 'composite plan' means a pension plan —

"(1) which is a multiemployer plan that is neither a defined benefit plan nor a defined contribution plan;

"(2) the terms of which provide that the plan is a composite plan for purposes of this title with respect to which not more than one multiemployer defined benefit plan is treated as a legacy plan within the meaning of section 805, unless there is more than one legacy plan following a merger of composite plans under section 806;

"(3) which provides systematically for the payment of benefits —

"(A) objectively calculated pursuant to a formula enumerated in the plan document with respect to plan participants after retirement, for life; and

"(B) in the form of life annuities, except for benefits which under section 203(e) may be immediately distributed without the consent of the participant;

"(4) for which the plan contributions for the first plan year are at least 120 percent of the normal cost for the plan year;

"(5) which requires —

"(A) an annual valuation of the liability of the plan as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year;

"(B) an annual actuarial determination of the plan's current funded ratio and projected funded ratio under section 802(a);

"(C) corrective action through a realignment program pursuant to section 803 whenever the plan's projected funded ratio is below 120 percent for the plan year; and

"(D) an annual notification to each participant describing the participant's benefits under the plan and explaining that such benefits may be subject to reduction under a realignment program pursuant to section 803 based on the plan's funded status in future plan years; and

"(6) the board of trustees of which includes at least one retiree or beneficiary in pay status during each plan year following the first plan year in which at least 5 percent of the participants in the plan are retirees or beneficiaries in pay status.

"(b) TRANSITION FROM A MULTIEMPLOYER DEFINED BENEFIT PLAN. —

"(1) IN GENERAL. — The plan sponsor of a defined benefit plan that is a multiemployer plan may, subject to paragraph (2), amend the plan to incorporate the features of a composite plan as a component of the multiemployer plan separate from the defined benefit plan component, except in the case of a defined benefit plan for which the plan actuary has certified under section 305(b)(3) that the plan is or will be in critical status for the plan year in which such amendment would become effective or for any of the succeeding 5 plan years.

"(2) REQUIREMENTS. — Any amendment pursuant to paragraph (1) to incorporate the features of a composite plan as a component of a multiemployer plan shall —

"(A) apply with respect to all collective bargaining agreements providing for contributions to the multiemployer plan on or after the effective date of the amendment;

"(B) apply with respect to all participants in the multiemployer plan for whom contributions are made to the multiemployer plan on or after the effective date of the amendment;

"(C) specify that the effective date of the amendment is —

"(i) the first day of a specified plan year following the date of the adoption of the amendment, except that the plan sponsor may alternatively provide for a separate effective date with respect to each collective bargaining agreement under which contributions to the multiemployer plan are required, which shall occur on the first day of the first plan year beginning after the termination, or if earlier, the reopening, of each such agreement, or such earlier date as the parties to the agreement and the plan sponsor of the multiemployer plan shall agree to; and

"(ii) not later than the first day of the fifth plan year beginning on or after the date of the adoption of the amendment;

"(D) specify that, as of the amendment's effective date, no further benefits shall accrue under the defined benefit component of the multiemployer plan; and

"(E) specify that, as of the amendment's effective date, the plan sponsor of the multiemployer plan shall be the plan sponsor of both the composite plan component and the defined benefit plan component of the plan.

"(3) SPECIAL RULES. — If a multiemployer plan is amended pursuant to paragraph (1) —

"(A) the requirements of this title and title IV shall be applied to the composite plan component and the defined benefit plan component of the multiemployer plan as if each such component were maintained as a separate plan; and

"(B) the assets of the composite plan component and the defined benefit plan component of the plan shall be held in a single trust forming part of the plan under which the trust instrument expressly provides —

"(i) for separate accounts (and appropriate records) to be maintained to reflect the interest which each of the plan components has in the trust, including separate accounting for additions to the trust for the benefit of each plan component, disbursements made from each plan component's account in the trust, investment experience of the trust allocable to that account, and administrative expenses (whether direct expenses or shared expenses allocated proportionally), and permits, but does not require, the pooling of some or all of the assets of the two plan components for investment purposes; and

"(ii) that the assets of each of the two plan components shall be held, invested, reinvested, managed, administered and distributed for the exclusive benefit of the participants and beneficiaries of each such plan component, and in no event shall the assets of one of the plan components be available to pay benefits due under the other plan component.

"(4) NOT A TERMINATION EVENT. — Notwithstanding section 4041A, an amendment pursuant to paragraph (1) to incorporate the features of a composite plan as a component of a multiemployer plan does not constitute termination of the multiemployer plan.

"(5) NOTICE TO THE SECRETARY. —

"(A) NOTICE. — The plan sponsor of a composite plan shall provide notice to the Secretary of the intent to establish the composite plan (or, in the case of a composite plan incorporated as a component of a multiemployer plan as described in paragraph (1), the intent to amend the multiemployer plan to incorporate such composite plan) at least 30 days prior to the effective date of such establishment or amendment.

"(B) CERTIFICATION. — In the case of a composite plan incorporated as a component of a multiemployer plan as described in paragraph (1), such notice shall include a certification by the plan actuary under section 305(b)(3) that the effective date of the amendment occurs in a plan year for which the multiemployer plan is not in critical status for that plan year and any of the succeeding 5 plan years.

"(6) REFERENCES TO COMPOSITE PLAN COMPONENT. — As used in this part, the term 'composite plan' includes a composite plan component added to a defined benefit plan pursuant to paragraph (1).

"(7) RULE OF CONSTRUCTION. — Paragraph (2)(A) shall not be construed as preventing the plan sponsor of a multiemployer plan from adopting an amendment pursuant to paragraph (1) because some collective bargaining agreements are amended to cease any covered employer's obligation to contribute to the multiemployer plan before or after the plan amendment is effective. Paragraph (2)(B) shall not be construed as preventing the plan sponsor of a multiemployer plan from adopting an amendment pursuant to paragraph (1) because some participants cease to have contributions made to the multiemployer plan on their behalf before or after the plan amendment is effective.

"(c) COORDINATION WITH FUNDING RULES. — Except as otherwise provided in this title, sections 302, 304, and 305 shall not apply to a composite plan.

"(d) TREATMENT OF A COMPOSITE PLAN. — For purposes of this Act (other than sections 302 and 4245), a composite plan shall be treated as if it were a defined benefit plan unless a different treatment is provided for under applicable law.

"SEC. 802. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS.

"(a) CERTIFICATION OF FUNDED RATIOS. —

"(1) IN GENERAL. — Not later than the one-hundred twentieth day of each plan year of a composite plan, the plan actuary of the composite plan shall certify to the Secretary, the Secretary of the Treasury, and the plan sponsor the plan's current funded ratio and projected funded ratio for the plan year.

"(2) DETERMINATION OF CURRENT FUNDED RATIO AND PROJECTED FUNDED RATIO. — For purposes of this section:

"(A) CURRENT FUNDED RATIO. — The current funded ratio is the ratio (expressed as a percentage) of —

"(i) the value of the plan's assets as of the first day of the plan year; to

"(ii) the plan actuary's best estimate of the present value of the plan liabilities as of the first day of the plan year.

"(B) PROJECTED FUNDED RATIO. — The projected funded ratio is the current funded ratio projected to the first day of the fifteenth plan year following the plan year for which the determination is being made.

"(3) CONSIDERATION OF CONTRIBUTION RATE INCREASES. — For purposes of projections under this subsection, the plan sponsor may anticipate contribution rate increases beyond the term of the current collective bargaining agreement and any agreed to supplements, up to a maximum of 2.5 percent per year, compounded annually, unless it would be unreasonable under the circumstances to assume that contributions would increase by that amount.

"(b) ACTUARIAL ASSUMPTIONS AND METHODS. — For purposes of this part:

"(1) IN GENERAL. — All costs, liabilities, rates of interest and other factors under the plan shall be determined for a plan year on the basis of actuarial assumptions and methods —

"(A) each of which is reasonable (taking into account the experience of the plan and reasonable expectations);

"(B) which, in combination, offer the actuary's best estimate of anticipated experience under the plan; and

"(C) with respect to which any change from the actuarial assumptions and methods used in the previous plan year shall be certified by the plan actuary and the actuarial rationale for such change provided in the annual report required by section 103.

"(2) FAIR MARKET VALUE OF ASSETS. — The value of the plan's assets shall be taken into account on the basis of their fair market value.

"(3) DETERMINATION OF NORMAL COST AND PLAN LIABILITIES. — A plan's normal cost and liabilities shall be based on the most recent actuarial valuation required under section 801(a)(5)(A) and the unit credit funding method.

"(4) TIME WHEN CERTAIN CONTRIBUTIONS DEEMED MADE. — Any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and one-half months after such day, shall be deemed to have been made on such last day. For purposes of this paragraph, such two and one-half month period may be extended for not more than six months under Regulations prescribed by the Secretary of the Treasury.

"(5) ADDITIONAL ACTUARIAL ASSUMPTIONS. — Except where otherwise provided in this part, the provisions of section 305(b)(3)(B) shall apply to any determination or projection under this part.

"SEC. 803. REALIGNMENT PROGRAM.

"(a) REALIGNMENT PROGRAM. —

"(1) ADOPTION. — In any case in which the plan actuary certifies under section 802(a) that the plan's projected funded ratio is below 120 percent for the plan year, the plan sponsor shall adopt a realignment program under paragraph (2) not later than 210 days after the due date of the certification required under such section 802(a). The plan sponsor shall adopt an updated realignment program for each succeeding plan year for which a certification described in the preceding sentence is made.

"(2) CONTENT OF REALIGNMENT PROGRAM. —

"(A) IN GENERAL. — A realignment program adopted under this paragraph is a written program which consists of all reasonable measures, including options or a range of options to be undertaken by the plan sponsor or proposed to the bargaining parties, formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year.

"(B) INITIAL PROGRAM ELEMENTS. — Reasonable measures under a realignment program described in subparagraph (A) may include any of the following:

"(i) Proposed contribution increases.

"(ii) A reduction in the rate of future benefit accruals, so long as the resulting rate is not less than 1 percent of the contributions on which benefits are based as of the start of the plan year (or the equivalent standard accrual rate as described in section 305(e)(6)).

"(iii) A modification or elimination of adjustable benefits of participants that are not in pay status before the date of the notice required under subsection (b)(1).

"(iv) Any other lawfully available measures not specifically described in this subparagraph or subparagraph (C) or (D) that the plan sponsor determines are reasonable.

"(C) ADDITIONAL PROGRAM ELEMENTS. — If the plan sponsor has determined that all reasonable measures available under subparagraph (B) will not enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year, such reasonable measures may also include —

"(i) a reduction of accrued benefits that are not in pay status by the date of the notice required under subsection (b)(1); or

"(ii) a reduction of any benefits of participants that are in pay status before the date of the notice required under sub section (b)(1) other than core benefits as defined in paragraph (4).

"(D) ADDITIONAL REDUCTIONS. — In the case of a composite plan for which the plan sponsor has determined that all reasonable measures available under subparagraphs (B) and (C) will not enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year, such reasonable measures may also include —

"(i) a further reduction in the rate of future benefit accruals without regard to the limitation applicable under subparagraph (B)(ii); or

"(ii) a reduction of core benefits; provided that such reductions shall be equitably distributed across the participant and beneficiary population, taking into account factors, with respect to participants and beneficiaries and their benefits, that may include one or more of the factors listed in subclauses (I) through (X) of section 305(e)(9)(D)(vi), to the extent necessary to enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year, or at the election of the plan sponsor, a projected funded ratio of at least 100 percent for the following plan year and a current funded ratio of at least 90 percent.

"(3) ADJUSTABLE BENEFIT DEFINED. — For purposes of this part, the term 'adjustable benefit' means —

"(A) benefits, rights, and features under the plan, including post-retirement death benefits, 60-month guarantees, disability benefits not yet in pay status, and similar benefits;

"(B) any early retirement benefit or retirement-type subsidy (within the meaning of section 204(g)(2)(A)) and any benefit payment option (other than the qualified joint and survivor annuity); and

"(C) benefit increases that were adopted (or, if later, took effect) less than 60 months before the first day such realignment program took effect.

"(4) CORE BENEFIT DEFINED. — For purposes of this part, the term 'core benefit' means a participant's accrued benefit payable in the normal form of an annuity commencing at normal retirement age, determined without regard to —

"(A) any early retirement benefits, retirement-type subsidies, or other benefits, rights, or features that may be associated with that benefit; and

"(B) any cost-of-living adjustments or benefit increases effective after the date of retirement.

"(5) COORDINATION WITH CONTRIBUTION INCREASES. —

"(A) IN GENERAL. — A realignment program may provide that some or all of the benefit modifications described in the program will only take effect if the bargaining parties fail to agree to specified levels of increases in contributions to the plan, effective as of specified dates.

"(B) INDEPENDENT BENEFIT MODIFICATIONS. — If a realignment program adopts any changes to the benefit formula that are independent of potential contribution increases, such changes shall take effect not later than 180 days after the first day of the first plan year that begins following the adoption of the realignment program.

"(C) CONDITIONAL BENEFIT MODIFICATIONS. — If a realignment program adopts any changes to the benefit formula that take effect only if the bargaining parties fail to agree to contribution increases, such changes shall take effect not later than the first day of the first plan year beginning after the third anniversary of the date of adoption of the realignment program.

"(D) REVOCATION OF CERTAIN BENEFIT MODIFICATIONS. — Benefit modifications described in subparagraph (C) may be revoked, in whole or in part, and retroactively or prospectively, when contributions to the plan are increased, as specified in the realignment program, including any amendments thereto. The preceding sentence shall not apply unless the contribution increases are to be effective not later than the fifth anniversary of the first day of the first plan year that begins after the adoption of the realignment program.

"(b) NOTICE. —

"(1) IN GENERAL. — In any case in which it is certified under section 802(a) that the projected funded ratio is less than 120 percent, the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the current and projected funded ratios to the participants and beneficiaries, the bargaining parties, and the Secretary. Such notice shall include —

"(A) an explanation that contribution rate increases or benefit reductions may be necessary;

"(B) a description of the types of benefits that might be reduced; and

"(C) an estimate of the contribution increases and benefit reductions that may be necessary to achieve a projected funded ratio of 120 percent.

"(2) NOTICE OF BENEFIT MODIFICATIONS. —

"(A) IN GENERAL. — No modifications may be made that reduce the rate of future benefit accrual or that reduce core benefits or adjustable benefits unless notice of such reduction has been given at least 180 days before the general effective date of such reduction for all participants and beneficiaries to —

"(i) plan participants and beneficiaries;

"(ii) each employer who has an obligation to contribute to the composite plan; and

"(iii) each employee organization which, for purposes of collective bargaining, represents plan participants employed by such employers.

"(B) CONTENT OF NOTICE. — The notice under subparagraph (A) shall contain —

"(i) sufficient information to enable participants and beneficiaries to understand the effect of any reduction on their benefits, including an illustration of any affected benefit or subsidy, on an annual or monthly basis that a participant or beneficiary would otherwise have been eligible for as of the general effective date described in subparagraph (A); and

"(ii) information as to the rights and remedies of plan participants and beneficiaries as well as how to contact the Department of Labor for further information and assistance, where appropriate.

"(C) FORM AND MANNER. — Any notice under subparagraph (A) —

"(i) shall be provided in a form and manner prescribed in regulations of the Secretary of Labor;

"(ii) shall be written in a manner so as to be understood by the average plan participant.

"(3) MODEL NOTICES. — The Secretary shall —

"(A) prescribe model notices that the plan sponsor of a composite plan may use to satisfy the notice requirements under this subsection; and

"(B) by regulation enumerate any details related to the elements listed in paragraph (1) that any notice under this subsection must include.

"(4) DELIVERY METHOD. — Any notice under this part shall be provided in writing and may also be provided in electronic form to the extent that the form is reasonably accessible to persons to whom the notice is provided.

"SEC. 804. LIMITATION ON INCREASING BENEFITS.

"(a) LEVEL OF CURRENT FUNDED RATIOS. — Except as provided in subsections (c), (d), and (e), no plan amendment increasing benefits or establishing new benefits under a composite plan may be adopted for a plan year unless —

"(1) the plan's current funded ratio is at least 110 percent (without regard to the benefit increase or new benefits);

"(2) taking the benefit increase or new benefits into account, the current funded ratio is at least 100 percent and the projected funded ratio for the current plan year is at least 120 percent;

"(3) in any case in which, after taking the benefit increase or new benefits into account, the current funded ratio is less than 140 percent and the projected funded ratio is less than 140 percent, the benefit increase or new benefits are projected by the plan actuary to increase the present value of the plan's liabilities for the plan year by not more than 3 percent; and

"(4) expected contributions for the current plan year are at least 120 percent of normal cost for the plan year, determined using the unit credit funding method and treating the benefit increase or new benefits as in effect for the entire plan year.

"(b) ADDITIONAL REQUIREMENTS WHERE CORE BENEFITS REDUCED. — If a plan has been amended to reduce core benefits pursuant to a realignment program under section 803(a)(2)(D), such plan may not be subsequently amended to increase core benefits unless the amendment —

"(1) increases the level of future benefit payments only; and

"(2) provides for an equitable distribution of benefit increases across the participant and beneficiary population, taking into account the extent to which the benefits of participants were previously reduced pursuant to such realignment program.

"(c) EXCEPTION TO COMPLY WITH APPLICABLE LAW. — Subsection (a) shall not apply in connection with a plan amendment if the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 or to comply with other applicable law.

"(d) EXCEPTION WHERE MAXIMUM DEDUCTIBLE LIMIT APPLIES. — Subsection (a) shall not apply in connection with a plan amendment if and to the extent that contributions to the composite plan would not be deductible for the plan year under section 404(a)(1)(E) of the Internal Revenue Code of 1986 if the plan amendment is not adopted.

"(e) EXCEPTION FOR CERTAIN BENEFIT MODIFICATIONS. — Subsection (a) shall not apply in connection with a plan amendment under section 803(a)(5)(C), regarding conditional benefit modifications.

"(f) TREATMENT OF PLAN AMENDMENTS. — For purposes of this section —

"(1) if two or more plan amendments increasing benefits or establishing new benefits are adopted in a plan year, such amendments shall be treated as a single amendment adopted on the last day of the plan year;

"(2) all benefit increases and new benefits adopted in a single amendment are treated as a single benefit increase, irrespective of whether the increases and new benefits take effect in more than one plan year; and

"(3) increases in contributions or decreases in plan liabilities which are scheduled to take effect in future plan years may be taken into account in connection with a plan amendment if they have been agreed to in writing or otherwise formalized by the date the plan amendment is adopted.

"SEC. 805. COMPOSITE PLAN RESTRICTIONS TO PRESERVE LEGACY PLAN FUNDING.

"(a) TREATMENT AS A LEGACY PLAN. —

"(1) IN GENERAL. — For purposes of this part and parts 2 and 3, a defined benefit plan shall be treated as a legacy plan with respect to the composite plan under which the employees who were eligible to accrue a benefit under the defined benefit plan become eligible to accrue a benefit under such composite plan.

"(2) COMPONENT PLANS. — In any case in which a defined benefit plan is amended to add a composite plan component pursuant to section 801(b), paragraph (1) shall be applied by substituting 'defined benefit component' for 'defined benefit plan' and 'composite plan component' for 'composite plan'.

"(3) ELIGIBLE TO ACCRUE A BENEFIT. — For purposes of paragraph (1), an employee is considered eligible to accrue a benefit under a composite plan as of the first day in which the employee completes an hour of service under a collective bargaining agreement that provides for contributions to and accruals under the composite plan in lieu of accruals under the legacy plan.

"(4) COLLECTIVE BARGAINING AGREEMENT. — As used in this part, the term 'collective bargaining agreement' includes any agreement under which an employer has an obligation to contribute to a plan.

"(5) OTHER TERMS. — Any term used in this part which is not defined in this part and which is also used in section 305 shall have the same meaning provided such term in such section.

"(b) RESTRICTIONS ON ACCEPTANCE BY COMPOSITE PLAN OF AGREEMENTS AND CONTRIBUTIONS. —

"(1) IN GENERAL. — The plan sponsor of a composite plan shall not accept or recognize a collective bargaining agreement (or any modification to such agreement), and no contributions may be accepted and no benefits may be accrued or otherwise earned under the agreement —

"(A) in any case in which the plan actuary of any defined benefit plan that would be treated as a legacy plan with respect to such composite plan has certified under section 305(b)(3) that such defined benefit plan is or will be in critical status for the plan year in which such agreement would take effect or for any of the succeeding 5 plan years; and

"(B) unless the agreement requires each employer who is a party to such agreement, including employers whose employees are not participants in the legacy plan, to provide contributions to the legacy plan with respect to such composite plan in a manner that satisfies the transition contribution requirements of subsection (d).

"(2) NOTICE. — Not later than 30 days after a determination by a plan sponsor of a composite plan that an agreement fails to satisfy the requirements described in paragraph (1), the plan sponsor shall provide notification of such failure and the reasons for such determination —

"(A) to the parties to the agreement;

"(B) to active participants of the composite plan who have ceased to accrue or otherwise earn benefits with respect to service with an employer pursuant to paragraph (1); and

"(C) to the Secretary, the Secretary of the Treasury, and the Pension Benefit Guaranty Corporation.

"(3) LIMITATION ON RETROACTIVE EFFECT. — This subsection shall not apply to benefits accrued before the date on which notice is provided under paragraph (2).

"(c) RESTRICTION ON ACCRUAL OF BENEFITS UNDER A COMPOSITE PLAN. —

"(1) IN GENERAL. — In any case in which an employer, under a collective bargaining agreement entered into after the date of enactment of the Giving Retirement Options to Workers Act of 2020, ceases to have an obligation to contribute to a multiemployer defined benefit plan, no employees employed by the employer may accrue or otherwise earn benefits under any composite plan, with respect to service with that employer, for a 60month period beginning on the date on which the employer entered into such collective bargaining agreement.

"(2) NOTICE OF CESSATION OF OBLIGATION. — Within 30 days of determining that an employer has ceased to have an obligation to contribute to a legacy plan with respect to employees employed by an employer that is or will be contributing to a composite plan with respect to service of such employees, the plan sponsor of the legacy plan shall notify the plan sponsor of the composite plan of that cessation.

"(3) NOTICE OF CESSATION OF ACCRUALS. — Not later than 30 days after determining that an employer has ceased to have an obligation to contribute to a legacy plan, the plan sponsor of the composite plan shall notify the bargaining parties, the active participants affected by the cessation of accruals, the Secretary, the Secretary of the Treasury, and the Pension Benefit Guaranty Corporation of the cessation of accruals, the period during which such cessation is in effect, and the reasons therefor.

"(4) LIMITATION ON RETROACTIVE EFFECT. — This subsection shall not apply to benefits accrued before the date on which notice is provided under paragraph (3).

"(d) TRANSITION CONTRIBUTION REQUIREMENTS. —

"(1) IN GENERAL. — A collective bargaining agreement satisfies the transition contribution requirements of this subsection if the agreement —

"(A) authorizes payment of contributions to a legacy plan at a rate or rates equal to or greater than the transition contribution rate established by the legacy plan under paragraph (2); and

"(B) does not provide for —

"(i) a suspension of contributions to the legacy plan with respect to any period of service; or

"(ii) any new direct or indirect exclusion of younger or newly hired employees of the employer from being taken into account in determining contributions owed to the legacy plan.

"(2) TRANSITION CONTRIBUTION RATE. —

"(A) IN GENERAL. — The transition contribution rate for a plan year is the contribution rate that, as certified by the actuary of the legacy plan in accordance with the principles in section 305(b)(3)(B), is reasonably expected to be adequate —

"(i) to fund the normal cost for the plan year;

"(ii) to amortize the plan's unfunded liabilities in level annual installments over 25 years, beginning with the plan year in which the transition contribution rate is first established; and

"(iii) to amortize any subsequent changes in the legacy plan's unfunded liability due to experience gains or losses (including investment gains or losses, gains or losses due to contributions greater or less than the contributions made under the prior transition contribution rate, and other actuarial gains or losses), changes in actuarial assumptions, changes to the legacy plan's benefits, or changes in funding method over a period of 15 plan years be ginning with the plan year in which such change in unfunded liability is incurred.

The transition contribution rate for any plan year may not be less than the transition contribution rate for the plan year in which such rate is first established.

"(B) MULTIPLE RATES. — If different rates of contribution are payable to the legacy plan by different employers or for different classes of employees, the certification shall specify a transition contribution rate for each such employer.

"(C) RATE APPLICABLE TO EMPLOYER. —

"(i) IN GENERAL. — Except as provided by clause (ii), the transition contribution rate applicable to an employer for a plan year is the rate in effect for the plan year of the legacy plan that commences on or after 180 days before the earlier of —

"(I) the effective date of the collective bargaining agreement pursuant to which the employer contributes to the legacy plan; or

"(II) 5 years after the last plan year for which the transition contribution rate applicable to the employer was established or updated.

"(ii) EXCEPTION. — The transition contribution rate applicable to an employer for the first plan year beginning on or after the commencement of the employer's obligation to contribute to the composite plan is the rate in effect for the plan year of the legacy plan that commences on or after 180 days before such first plan year.

"(D) EFFECT OF LEGACY PLAN FINANCIAL CIRCUMSTANCES. — If the plan actuary of the legacy plan has certified under section 305 that the plan is in endangered or critical status for a plan year, the transition contribution rate for the following plan year is the rate determined with respect to the employer under the legacy plan's funding improvement or rehabilitation plan under section 305, if greater than the rate otherwise determined, but in no event greater than 75 percent of the sum of the contribution rates applicable to the legacy plan and the composite plan for the plan year.

"(E) OTHER ACTUARIAL ASSUMPTIONS AND METHODS. — Except as provided in subparagraph (A), the determination of the transition contribution rate for a plan year shall be based on actuarial assumptions and methods consistent with the minimum funding determinations made under section 304 (or, if applicable, section 305) with respect to the legacy plan for the plan year.

"(F) ADJUSTMENTS IN RATE. — The plan sponsor of a legacy plan from time to time may adjust the transition contribution rate or rates applicable to an employer under this paragraph by increasing some rates and decreasing others if the actuary certifies that such adjusted rates in combination will produce projected contribution income for the plan year beginning on or after the date of certification that is not less than would be produced by the transition contribution rates in effect at the time of the certification.

"(G) NOTICE OF TRANSITION CONTRIBUTION RATE. — The plan sponsor of a legacy plan shall provide notice to the parties to collective bargaining agreements pursuant to which contributions are made to the legacy plan of changes to the transition contribution rate requirements at least 30 days before the beginning of the plan year for which the rate is effective.

"(H) NOTICE TO COMPOSITE PLAN SPONSOR. — Not later than 30 days after a determination by the plan sponsor of a legacy plan that a collective bargaining agreement provides for a rate of contributions that is below the transition contribution rate applicable to one or more employers that are parties to the collective bargaining agreement, the plan sponsor of the legacy plan shall notify the plan sponsor of any composite plan under which employees of such employer would otherwise be eligible to accrue a benefit.

"(3) CORRECTION PROCEDURES. — Pursuant to standards prescribed by the Secretary, the plan sponsor of a composite plan shall adopt rules and procedures that give the parties to the collective bargaining agreement notice of the failure of such agreement to satisfy the transition contribution requirements of this subsection, and a reasonable opportunity to correct such failure, not to exceed 180 days from the date of notice given under subsection (b)(2).

"(4) SUPPLEMENTAL CONTRIBUTIONS. — A collective bargaining agreement may provide for supplemental contributions to the legacy plan for a plan year in excess of the transition contribution rate determined under paragraph (2), regardless of whether the legacy plan is in endangered or critical status for such plan year.

"(e) NONAPPLICATION OF COMPOSITE PLAN RESTRICTIONS. —

"(1) IN GENERAL. — The provisions of subsections (a), (b), and (c) shall not apply with respect to a collective bargaining agreement, to the extent the agreement, or a predecessor agreement, provides or provided for contributions to a defined benefit plan that is a legacy plan, as of the first day of the first plan year following a plan year for which the plan actuary certifies that the plan is fully funded, has been fully funded for at least three out of the immediately preceding 5 plan years, and is projected to remain fully funded for at least the following 4 plan years.

"(2) DETERMINATION OF FULLY FUNDED. — A plan is fully funded for purposes of paragraph (1) if, as of the valuation date of the plan for a plan year, the value of the plan's assets equals or exceeds the present value of the plan's liabilities, determined in accordance with the rules prescribed by the Pension Benefit Guaranty Corporation under sections 4219(c)(1)(D) and 4281 for multiemployer plans terminating by mass withdrawal, as in effect for the date of the determination, except the plan's reasonable assumption regarding the starting date of benefits may be used.

"(3) OTHER APPLICABLE RULES. — Except as provided in paragraph (2), actuarial determinations and projections under this section shall be based on the rules in section 305(b)(3) and section 802(b).

"SEC. 806. MERGERS AND ASSET TRANSFERS OF COMPOSITE PLANS.

"(a) IN GENERAL. — Assets and liabilities of a composite plan may only be merged with, or transferred to, another plan if —

"(1) the other plan is a composite plan;

"(2) the plan or plans resulting from the merger or transfer is a composite plan;

"(3) no participant's accrued benefit or adjustable benefit is lower immediately after the transaction than it was immediately before the transaction; and

"(4) the value of the assets transferred in the case of a transfer reasonably reflects the value of the amounts contributed with respect to the participants whose benefits are being transferred, adjusted for allocable distributions, investment gains and losses, and administrative expenses.

"(b) LEGACY PLAN. —

"(1) IN GENERAL. — After a merger or transfer involving a composite plan, the legacy plan with respect to an employer that is obligated to contribute to the resulting composite plan is the legacy plan that applied to that employer immediately before the merger or transfer.

"(2) MULTIPLE LEGACY PLANS. — If an employer is obligated to contribute to more than one legacy plan with respect to employees eligible to accrue benefits under more than one composite plan and there is a merger or transfer of such legacy plans, the transition contribution rate applicable to the legacy plan resulting from the merger or transfer with respect to that employer shall be determined in accordance with the provisions of section 805(d)(2)(B).".

(2) PENALTIES. —

(A) CIVIL ENFORCEMENT OF FAILURE TO COMPLY WITH REALIGNMENT PROGRAM. — section 502(a) of such Act (29 U.S.C. 1132(a)) is amended —

(i) in paragraph (10), by striking "or" at the end;

(ii) in paragraph (11), by striking the period at the end and inserting "; or"; and

(iii) by adding at the end the following:

"(12) in the case of a composite plan required to adopt a realignment program under section 803, if the plan sponsor —

"(A) has not adopted a realignment program under that section by the deadline established in such section; or

"(B) fails to update or comply with the terms of the realignment program in accordance with the requirements of such section,

by the Secretary, by an employer that has an obligation to contribute with respect to the composite plan, or by an employee organization that represents active participants in the composite plan, for an order compelling the plan sponsor to adopt a realignment program, or to update or comply with the terms of the realignment program, in accordance with the requirements of such section and the realignment program.".

(B) CIVIL PENALTIES. — Section 502(c) of such Act (29 U.S.C. 1132(c)) is amended —

(i) by moving paragraphs (8), (10), and (12) each 2 ems to the left;

(ii) by redesignating paragraphs (9) through (12) as paragraphs (12) through (15), respectively; and

(iii) by inserting after paragraph (8) the following:

"(9) The Secretary may assess against any plan sponsor of a composite plan a civil penalty of not more than $1,100 per day for each violation by such sponsor —

"(A) of the requirement under section 802(a) on the plan actuary to certify the plan's current or projected funded ratio by the date specified in such subsection; or

"(B) of the requirement under section 803 to adopt a realignment program by the deadline established in that section and to comply with its terms.

"(10)(A) The Secretary may assess against any plan sponsor of a composite plan a civil penalty of not more than $100 per day for each violation by such sponsor of the requirement under section 803(b) to provide notice as described in such section, except that no penalty may be assessed in any case in which the plan sponsor exercised reasonable diligence to meet the requirements of such section and —

"(i) the plan sponsor did not know that the violation existed; or

"(ii) the plan sponsor provided such notice during the 30-day period beginning on the first date on which the plan sponsor knew, or in exercising reasonable due diligence should have known, that such violation existed.

"(B) In any case in which the plan sponsor exercised reasonable diligence to meet the requirements of section 803(b) —

"(i) the total penalty assessed under this paragraph against such sponsor for a plan year may not exceed $500,000; and

"(ii) the Secretary may waive part or all of such penalty to the extent that the payment of such penalty would be excessive or otherwise inequitable relative to the violation involved.

"(11) The Secretary may assess against any plan sponsor of a composite plan a civil penalty of not more than $100 per day for each violation by such sponsor of the notice requirements under sections 801(b)(5) and 805(b)(2).".

(3) CONFORMING AMENDMENT. — The table of contents in section 1 of such Act (29 U.S.C. 1001 note) is amended by inserting after the item relating to section 734 the following:

"PART 8 — COMPOSITE PLANS AND LEGACY PLANS

"Sec. 801. Composite plan defined.

"Sec. 802. Funded ratios; actuarial assumptions.

"Sec. 803. Realignment program.

"Sec. 804. Limitation on increasing benefits.

"Sec. 805. Composite plan restrictions to preserve legacy plan funding.

"Sec. 806. Mergers and asset transfers of composite plans.".

(b) AMENDMENT TO THE INTERNAL REVENUE CODE OF 1986. —

(1) IN GENERAL. — Part III of subchapter D of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

"Subpart C — Composite Plans and Legacy Plans

"Sec. 437. Composite plan defined.

"Sec. 438. Funded ratios; actuarial assumptions.

"Sec. 439. Realignment program.

"Sec. 440. Limitation on increasing benefits.

"Sec. 440A. Composite plan restrictions to preserve legacy plan funding.

"Sec. 440B. Mergers and asset transfers of composite plans.

"SEC. 437. COMPOSITE PLAN DEFINED.

"(a) IN GENERAL. — For purposes of this title, the term 'composite plan' means a pension plan —

"(1) which is a multiemployer plan that is neither a defined benefit plan nor a defined contribution plan,

"(2) the terms of which provide that the plan is a composite plan for purposes of this title with respect to which not more than one multiemployer defined benefit plan is treated as a legacy plan within the meaning of section 440A, unless there is more than one legacy plan following a merger of composite plans under section 440B,

"(3) which provides systematically for the payment of benefits —

"(A) objectively calculated pursuant to a formula enumerated in the plan document with respect to plan participants after retirement, for life, and

"(B) in the form of life annuities, except for benefits which under section 411(a)(11) may be immediately distributed without the consent of the participant,

"(4) for which the plan contributions for the first plan year are at least 120 percent of the nor

"(5) which requires —

"(A) an annual valuation of the liability of the plan as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year,

"(B) an annual actuarial determination of the plan's current funded ratio and projected funded ratio under section 438(a),

"(C) corrective action through a realignment program pursuant to section 439 whenever the plan's projected funded ratio is below 120 percent for the plan year, and

"(D) an annual notification to each participant describing the participant's benefits under the plan and explaining that such benefits may be subject to reduction under a realignment program pursuant to section 439 based on the plan's funded status in future plan years, and

"(6) the board of trustees of which includes at least one retiree or beneficiary in pay status during each plan year following the first plan year in which at least 5 percent of the participants in the plan are retirees or beneficiaries in pay status.

"(b) TRANSITION FROM A MULTIEMPLOYER DEFINED BENEFIT PLAN. —

"(1) IN GENERAL. — The plan sponsor of a defined benefit plan that is a multiemployer plan may, subject to paragraph (2), amend the plan to incorporate the features of a composite plan as a component of the multiemployer plan separate from the defined benefit plan component, except in the case of a defined benefit plan for which the plan actuary has certified under section 432(b)(3) that the plan is or will be in critical status for the plan year in which such amendment would become effective or for any of the succeeding 5 plan years.

"(2) REQUIREMENTS. — Any amendment pursuant to paragraph (1) to incorporate the features of a composite plan as a component of a multiemployer plan shall —

"(A) apply with respect to all collective bargaining agreements providing for contributions to the multiemployer plan on or after the effective date of the amendment,

"(B) apply with respect to all participants in the multiemployer plan for whom contributions are made to the multiemployer plan on or after the effective date of the amendment,

"(C) specify that the effective date of the amendment is —

"(i) the first day of a specified plan year following the date of the adoption of the amendment, except that the plan sponsor may alternatively provide for a separate effective date with respect to each collective bargaining agreement under which contributions to the multiemployer plan are required, which shall occur on the first day of the first plan year beginning after the termination, or if earlier, the reopening, of each such agreement, or such earlier date as the parties to the agreement and the plan sponsor of the multiemployer plan shall agree to, and

"(ii) not later than the first day of the fifth plan year beginning on or after the date of the adoption of the amendment,

"(D) specify that, as of the amendment's effective date, no further benefits shall accrue under the defined benefit component of the multiemployer plan, and

"(E) specify that, as of the amendment's effective date, the plan sponsor of the multiemployer plan shall be the plan sponsor of both the composite plan component and the defined benefit plan component of the plan.

"(3) SPECIAL RULES. — If a multiemployer plan is amended pursuant to paragraph (1) —

"(A) the requirements of this title shall be applied to the composite plan component and the defined benefit plan component of the multiemployer plan as if each such component were maintained as a separate plan, and

"(B) the assets of the composite plan component and the defined benefit plan component of the plan shall be held in a single trust forming part of the plan under which the trust instrument expressly provides —

"(i) for separate accounts (and appropriate records) to be maintained to reflect the interest which each of the plan components has in the trust, including separate accounting for additions to the trust for the benefit of each plan component, disbursements made from each plan component's account in the trust, investment experience of the trust allocable to that account, and administrative expenses (whether direct expenses or shared expenses allocated proportionally), and permits, but does not require, the pooling of some or all of the assets of the two plan components for investment purposes, and

"(ii) that the assets of each of the two plan components shall be held, invested, reinvested, managed, administered and distributed for the exclusive benefit of the participants and beneficiaries of each such plan component, and in no event shall the assets of one of the plan components be available to pay benefits due under the other plan component.

"(4) NOT A TERMINATION EVENT. — Notwithstanding section 4041A of the Employee Retirement Income Security Act of 1974, an amendment pursuant to paragraph (1) to incorporate the features of a composite plan as a component of a multiemployer plan does not constitute termination of the multiemployer plan.

"(5) NOTICE TO THE SECRETARY. —

"(A) NOTICE. — The plan sponsor of a composite plan shall provide notice to the Secretary of the intent to establish the composite plan (or, in the case of a composite plan incorporated as a component of a multiemployer plan as described in paragraph (1), the intent to amend the multiemployer plan to incorporate such composite plan) at least 30 days prior to the effective date of such establishment or amendment.

"(B) CERTIFICATION. — In the case of a composite plan incorporated as a component of a multiemployer plan as described in paragraph (1), such notice shall include a certification by the plan actuary under section 432(b)(3) that the effective date of the amendment occurs in a plan year for which the multiemployer plan is not in critical status for that plan year and any of the succeeding 5 plan years.

"(6) REFERENCES TO COMPOSITE PLAN COMPONENT. — As used in this subpart, the term 'composite plan' includes a composite plan component added to a defined benefit plan pursuant to paragraph (1).

"(7) RULE OF CONSTRUCTION. — Paragraph (2)(A) shall not be construed as preventing the plan sponsor of a multiemployer plan from adopting an amendment pursuant to paragraph (1) because some collective bargaining agreements are amended to cease any covered employer's obligation to contribute to the multiemployer plan before or after the plan amendment is effective. Paragraph (2)(B) shall not be construed as preventing the plan sponsor of a multiemployer plan from adopting an amendment pursuant to paragraph (1) because some participants cease to have contributions made to the multiemployer plan on their behalf before or after the plan amendment is effective.

"(c) COORDINATION WITH FUNDING RULES. — Except as otherwise provided in this title, sections 412, 431, and 432 shall not apply to a composite plan.

"(d) TREATMENT OF A COMPOSITE PLAN. — For purposes of this title (other than sections 412 and 418E), a composite plan shall be treated as if it were a defined benefit plan unless a different treatment is provided for under applicable law.

"SEC. 438. FUNDED RATIOS; ACTUARIAL ASSUMPTIONS.

"(a) CERTIFICATION OF FUNDED RATIOS. —

"(1) IN GENERAL. — Not later than the one-hundred twentieth day of each plan year of a composite plan, the plan actuary of the composite plan shall certify to the Secretary, the Secretary of Labor, and the plan sponsor the plan's current funded ratio and projected funded ratio for the plan year.

"(2) DETERMINATION OF CURRENT FUNDED RATIO AND PROJECTED FUNDED RATIO. — For purposes of this section —

"(A) CURRENT FUNDED RATIO. — The current funded ratio is the ratio (expressed as a percentage) of —

"(i) the value of the plan's assets as of the first day of the plan year, to

"(ii) the plan actuary's best estimate of the present value of the plan liabilities as of the first day of the plan year.

"(B) PROJECTED FUNDED RATIO. — The projected funded ratio is the current funded ratio projected to the first day of the fifteenth plan year following the plan year for which the determination is being made.

"(3) CONSIDERATION OF CONTRIBUTION RATE INCREASES. — For purposes of projections under this subsection, the plan sponsor may anticipate contribution rate increases beyond the term of the current collective bargaining agreement and any agreed to supplements, up to a maximum of 2.5 percent per year, compounded annually, unless it would be un reasonable under the circumstances to assume that contributions would increase by that amount.

"(b) ACTUARIAL ASSUMPTIONS AND METHODS. — For purposes of this part —

"(1) IN GENERAL. — All costs, liabilities, rates of interest, and other factors under the plan shall be determined for a plan year on the basis of actuarial assumptions and methods —

"(A) each of which is reasonable (taking into account the experience of the plan and reasonable expectations),

"(B) which, in combination, offer the actuary's best estimate of anticipated experience under the plan, and

"(C) with respect to which any change from the actuarial assumptions and methods used in the previous plan year shall be certified by the plan actuary and the actuarial rationale for such change provided in the annual report required by section 6058.

"(2) FAIR MARKET VALUE OF ASSETS. — The value of the plan's assets shall be taken into account on the basis of their fair market value.

"(3) DETERMINATION OF NORMAL COST AND PLAN LIABILITIES. — A plan's normal cost and liabilities shall be based on the most recent actuarial valuation required under section 437(a)(5)(A) and the unit credit funding method.

"(4) TIME WHEN CERTAIN CONTRIBUTIONS DEEMED MADE. — Any contributions for a plan year made by an employer after the last day of such plan year, but not later than two and onehalf months after such day, shall be deemed to have been made on such last day. For purposes of this paragraph, such two and onehalf month period may be extended for not more than six months under Regulations prescribed by the Secretary.

"(5) ADDITIONAL ACTUARIAL ASSUMPTIONS. — Except where otherwise provided in this subpart, the provisions of section 432(b)(3)(B) shall apply to any determination or projection under this subpart.

"SEC. 439. REALIGNMENT PROGRAM.

"(a) REALIGNMENT PROGRAM. —

"(1) ADOPTION. — In any case in which the plan actuary certifies under section 438(a) that the plan's projected funded ratio is below 120 percent for the plan year, the plan sponsor shall adopt a realignment program under paragraph (2) not later than 210 days after the due date of the certification required under section 438(a). The plan sponsor shall adopt an updated realignment program for each succeeding plan year for which a certification described in the preceding sentence is made.

"(2) CONTENT OF REALIGNMENT PROGRAM. —

"(A) IN GENERAL. — A realignment program adopted under this paragraph is a written program which consists of all reasonable measures, including options or a range of options to be undertaken by the plan sponsor or proposed to the bargaining parties, formulated, based on reasonably anticipated experience and reasonable actuarial assumptions, to enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year.

"(B) INITIAL PROGRAM ELEMENTS. — Reasonable measures under a realignment program described in subparagraph (A) may include any of the following:

"(i) Proposed contribution increases.

"(ii) A reduction in the rate of future benefit accruals, so long as the resulting rate shall not be less than 1 percent of the contributions on which benefits are based as of the start of the plan year (or the equivalent standard accrual rate as described in section 432(e)(6)).

"(iii) A modification or elimination of adjustable benefits of participants that are not in pay status before the date of the notice required under subsection (b)(1).

"(iv) Any other legally available measures not specifically described in this subparagraph or subparagraph (C) or (D) that the plan sponsor determines are reasonable.

"(C) ADDITIONAL PROGRAM ELEMENTS. — If the plan sponsor has determined that all reasonable measures available under subparagraph (B) will not enable the plan to achieve a projected funded ratio of at least 120 percent the following plan year, such reasonable measures may also include —

"(i) a reduction of accrued benefits that are not in pay status by the date of the notice required under subsection (b)(1), or

"(ii) a reduction of any benefits of participants that are in pay status before the date of the notice required under subsection (b)(1) other than core benefits as defined in paragraph (4).

"(D) ADDITIONAL REDUCTIONS. — In the case of a composite plan for which the plan sponsor has determined that all reasonable measures available under subparagraphs (B) and (C) will not enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year, such reasonable measures may also include —

"(i) a further reduction in the rate of future benefit accruals without regard to the limitation applicable under subparagraph (B)(ii), or

"(ii) a reduction of core benefits, provided that such reductions shall be equitably distributed across the participant and beneficiary population, taking into account factors, with respect to participants and beneficiaries and their benefits, that may include one or more of the factors listed in subclauses (I) through (X) of section 432(e)(9)(D)(vi), to the extent necessary to enable the plan to achieve a projected funded ratio of at least 120 percent for the following plan year, or at the election of the plan sponsor, a projected funded ratio of at least 100 percent for the following plan year and a current funded ratio of at least 90 percent.

"(3) ADJUSTABLE BENEFIT DEFINED. — For purposes of this subpart, the term 'adjustable benefit' means —

"(A) benefits, rights, and features under the plan, including post-retirement death benefits, 60month guarantees, disability benefits not yet in pay status, and similar benefits,

"(B) any early retirement benefit or retirement-type subsidy (within the meaning of section 411(d)(6)(B)(i)) and any benefit payment option (other than the qualified joint and survivor annuity), and

"(C) benefit increases that were adopted (or, if later, took effect) less than 60 months before the first day such realignment program took effect.

"(4) CORE BENEFIT DEFINED. — For purposes of this subpart, the term 'core benefit' means a participant's accrued benefit payable in the normal form of an annuity commencing at normal retirement age, determined without regard to —

"(A) any early retirement benefits, retirement-type subsidies, or other benefits, rights, or features that may be associated with that benefit, and

"(B) any cost-of-living adjustments or benefit increases effective after the date of retirement.

"(5) COORDINATION WITH CONTRIBUTION INCREASES. —

"(A) IN GENERAL. — A realignment program may provide that some or all of the benefit modifications described in the program will only take effect if the bargaining parties fail to agree to specified levels of increases in contributions to the plan, effective as of specified dates.

"(B) INDEPENDENT BENEFIT MODIFICATIONS. — If a realignment program adopts any changes to the benefit formula that are independent of potential contribution increases, such changes shall take effect not later than 180 days following the first day of the first plan year that begins following the adoption of the realignment program.

"(C) CONDITIONAL BENEFIT MODIFICATIONS. — If a realignment program adopts any changes to the benefit formula that take effect only if the bargaining parties fail to agree to contribution increases, such changes shall take effect not later than the first day of the first plan year beginning after the third anniversary of the date of adoption of the realignment program.

"(D) REVOCATION OF CERTAIN BENEFIT MODIFICATIONS. — Benefit modifications described in paragraph (3) may be revoked, in whole or in part, and retroactively or prospectively, when contributions to the plan are increased, as specified in the realignment program, including any amendments thereto. The preceding sentence shall not apply unless the contribution increases are to be effective not later than the fifth anniversary of the first day of the first plan year that begins after the adoption of the realignment program.

"(b) NOTICE. —

"(1) IN GENERAL. — In any case in which it is certified under section 438(a) that the projected funded ratio is less than 120 percent, the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the current and projected funded ratios to the participants and beneficiaries, the bargaining parties, and the Secretary. Such notice shall include —

"(A) an explanation that contribution rate increases or benefit reductions may be necessary,

"(B) a description of the types of benefits that might be reduced, and

"(C) an estimate of the contribution increases and benefit reductions that may be necessary to achieve a projected funded ratio of 120 percent.

"(2) NOTICE OF BENEFIT MODIFICATIONS. —

"(A) IN GENERAL. — No modifications may be made that reduce the rate of future benefit accrual or that reduce core benefits or adjustable benefits unless notice of such reduction has been given at least 180 days before the general effective date of such reduction for all participants and beneficiaries to —

"(i) plan participants and beneficiaries,

"(ii) each employer who has an obligation to contribute to the composite plan, and

"(iii) each employee organization which, for purposes of collective bargaining, represents plan participants employed by such employers.

"(B) CONTENT OF NOTICE. — The notice under subparagraph (A) shall contain —

"(i) sufficient information to enable participants and beneficiaries to understand the effect of any reduction on their benefits, including an illustration of any affected benefit or subsidy, on an annual or monthly basis that a participant or beneficiary would otherwise have been eligible for as of the general effective date described in subparagraph (A), and

"(ii) information as to the rights and remedies of plan participants and beneficiaries as well as how to contact the Department of Labor for further information and assistance, where appropriate.

"(C) FORM AND MANNER. — Any notice under subparagraph (A) —

"(i) shall be provided in a form and manner prescribed in regulations of the Secretary of Labor,

"(ii) shall be written in a manner so as to be understood by the average plan participant.

"(3) MODEL NOTICES. — The Secretary shall —

"(A) prescribe model notices that the plan sponsor of a composite plan may use to satisfy the notice requirements under this subsection, and

"(B) by regulation enumerate any details related to the elements listed in paragraph (1) that any notice under this subsection must include.

"(4) DELIVERY METHOD. — Any notice under this part shall be provided in writing and may also be provided in electronic form to the extent that the form is reasonably accessible to persons to whom the notice is provided.

"SEC. 440. LIMITATION ON INCREASING BENEFITS.

"(a) LEVEL OF CURRENT FUNDED RATIOS. — Except as provided in subsections (c), (d), and (e), no plan amendment increasing benefits or establishing new benefits under a composite plan may be adopted for a plan year unless —

"(1) the plan's current funded ratio is at least 110 percent (without regard to the benefit increase or new benefits),

"(2) taking the benefit increase or new benefits into account, the current funded ratio is at least 100 percent and the projected funded ratio for the current plan year is at least 120 percent,

"(3) in any case in which, after taking the benefit increase or new benefits into account, the current funded ratio is less than 140 percent or the projected funded ratio is less than 140 percent, the benefit increase or new benefits are projected by the plan actuary to increase the present value of the plan's liabilities for the plan year by not more than 3 percent, and

"(4) expected contributions for the current plan year are at least 120 percent of normal cost for the plan year, determined using the unit credit funding method and treating the benefit increase or new benefits as in effect for the entire plan year.

"(b) ADDITIONAL REQUIREMENTS WHERE CORE BENEFITS REDUCED. — If a plan has been amended to reduce core benefits pursuant to a realignment program under section 439(a)(2)(D), such plan may not be subsequently amended to increase core benefits unless the amendment —

"(1) increases the level of future benefit payments only, and

"(2) provides for an equitable distribution of benefit increases across the participant and beneficiary population, taking into account the extent to which the benefits of participants were previously reduced pursuant to such realignment program.

"(c) EXCEPTION TO COMPLY WITH APPLICABLE LAW. — Subsection (a) shall not apply in connection with a plan amendment if the amendment is required as a condition of qualification under part I of subchapter D of chapter 1 or to comply with other applicable law.

"(d) EXCEPTION WHERE MAXIMUM DEDUCTIBLE LIMIT APPLIES. — Subsection (a) shall not apply in connection with a plan amendment if and to the extent that contributions to the composite plan would not be deductible for the plan year under section 404(a)(1)(E) if the plan amendment is not adopted. The Secretary of the Treasury shall issue regulations to implement this paragraph.

"(e) EXCEPTION FOR CERTAIN BENEFIT MODIFICATIONS. — Subsection (a) shall not apply in connection with a plan amendment under section 439(a)(5)(C), regarding conditional benefit modifications.

"(f) TREATMENT OF PLAN AMENDMENTS. — For purposes of this section —

"(1) if two or more plan amendments increasing benefits or establishing new benefits are adopted in a plan year, such amendments shall be treated as a single amendment adopted on the last day of the plan year,

"(2) all benefit increases and new benefits adopted in a single amendment are treated as a single benefit increase, irrespective of whether the increases and new benefits take effect in more than one plan year, and

"(3) increases in contributions or decreases in plan liabilities which are scheduled to take effect in future plan years may be taken into account in connection with a plan amendment if they have been agreed to in writing or otherwise formalized by the date the plan amendment is adopted.

"SEC. 440A. COMPOSITE PLAN RESTRICTIONS TO PRESERVE LEGACY PLAN FUNDING.

"(a) TREATMENT AS A LEGACY PLAN. —

"(1) IN GENERAL. — For purposes of this sub chapter, a defined benefit plan shall be treated as a legacy plan with respect to the composite plan under which the employees who were eligible to accrue a benefit under the defined benefit plan become eligible to accrue a benefit under such composite plan.

"(2) COMPONENT PLANS. — In any case in which a defined benefit plan is amended to add a composite plan component pursuant to section 437(b), paragraph (1) shall be applied by substituting 'defined benefit component' for 'defined benefit plan' and 'composite plan component' for 'composite plan'.

"(3) ELIGIBLE TO ACCRUE A BENEFIT. — For purposes of paragraph (1), an employee is considered eligible to accrue a benefit under a composite plan as of the first day in which the employee completes an hour of service under a collective bargaining agreement that provides for contributions to and accruals under the composite plan in lieu of accruals under the legacy plan.

"(4) COLLECTIVE BARGAINING AGREEMENT. — As used in this subpart, the term 'collective bargaining agreement' includes any agreement under which an employer has an obligation to contribute to a plan.

"(5) OTHER TERMS. — Any term used in this subpart which is not defined in this part and which is also used in section 432 shall have the same meaning provided such term in such section.

"(b) RESTRICTIONS ON ACCEPTANCE BY COMPOSITE PLAN OF AGREEMENTS AND CONTRIBUTIONS. —

"(1) IN GENERAL. — The plan sponsor of a composite plan shall not accept or recognize a collective bargaining agreement (or any modification to such agreement), and no contributions may be accepted and no benefits may be accrued or otherwise earned under the agreement —

"(A) in any case in which the plan actuary of any defined benefit plan that would be treated as a legacy plan with respect to such composite plan has certified under section 432(b)(3) that such defined benefit plan is or will be in critical status for the plan year in which such agreement would take effect or for any of the succeeding 5 plan years, and

"(B) unless the agreement requires each employer who is a party to such agreement, including employers whose employees are not participants in the legacy plan, to provide contributions to the legacy plan with respect to such composite plan in a manner that satisfies the transition contribution requirements of subsection (d).

"(2) NOTICE. — Not later than 30 days after a determination by a plan sponsor of a composite plan that an agreement fails to satisfy the requirements described in paragraph (1), the plan sponsor shall provide notification of such failure and the reasons for such determination to —

"(A) the parties to the agreement,

"(B) active participants of the composite plan who have ceased to accrue or otherwise earn benefits with respect to service with an employer pursuant to paragraph (1), and

"(C) the Secretary of Labor, the Secretary of the Treasury, and the Pension Benefit Guaranty Corporation.

"(3) LIMITATION ON RETROACTIVE EFFECT. — This subsection shall not apply to benefits accrued before the date on which notice is provided under paragraph (2).

"(c) RESTRICTION ON ACCRUAL OF BENEFITS UNDER A COMPOSITE PLAN. —

"(1) IN GENERAL. — In any case in which an employer, under a collective bargaining agreement entered into after the date of enactment of the Giving Retirement Options to Workers Act of 2020, ceases to have an obligation to contribute to a multiemployer defined benefit plan, no employees employed by the employer may accrue or otherwise earn benefits under any composite plan, with respect to service with that employer, for a 60month period beginning on the date on which the employer entered into such collective bargaining agreement.

"(2) NOTICE OF CESSATION OF OBLIGATION. — Within 30 days of determining that an employer has ceased to have an obligation to contribute to a legacy plan with respect to employees employed by an employer that is or will be contributing to a composite plan with respect to service of such employees, the plan sponsor of the legacy plan shall notify the plan sponsor of the composite plan of that cessation.

"(3) NOTICE OF CESSATION OF ACCRUALS. — Not later than 30 days after determining that an employer has ceased to have an obligation to contribute to a legacy plan, the plan sponsor of the composite plan shall notify the bargaining parties, the active participants affected by the cessation of accruals, the Secretary, the Secretary of Labor, and the Pension Benefit Guaranty Corporation of the cessation of accruals, the period during which such cessation is in effect, and the reasons therefor.

"(4) LIMITATION ON RETROACTIVE EFFECT. — This subsection shall not apply to benefits accrued before the date on which notice is provided under paragraph (3).

"(d) TRANSITION CONTRIBUTION REQUIREMENTS. —

"(1) IN GENERAL. — A collective bargaining agreement satisfies the transition contribution requirements of this subsection if the agreement —

"(A) authorizes for payment of contributions to a legacy plan at a rate or rates equal to or greater than the transition contribution rate established under paragraph (2), and

"(B) does not provide for —

"(i) a suspension of contributions to the legacy plan with respect to any period of service, or

"(ii) any new direct or indirect exclusion of younger or newly hired employees of the employer from being taken into account in determining contributions owed to the legacy plan.

"(2) TRANSITION CONTRIBUTION RATE. —

"(A) IN GENERAL. — The transition contribution rate for a plan year is the contribution rate that, as certified by the actuary of the legacy plan in accordance with the principles in section 432(b)(3)(B), is reasonably expected to be adequate —

"(i) to fund the normal cost for the plan year,

"(ii) to amortize the plan's unfunded liabilities in level annual installments over 25 years, beginning with the plan year in which the transition contribution rate is first established, and

"(iii) to amortize any subsequent changes in the legacy plan's unfunded liability due to experience gains or losses (including investment gains or losses, gains or losses due to contributions greater or less than the contributions made under the prior transition contribution rate, and other actuarial gains or losses), changes in actuarial assumptions, changes to the legacy plan's benefits, or changes in funding method over a period of 15 plan years be ginning with the plan year in which such change in unfunded liability is incurred.

The transition contribution rate for any plan year may not be less than the transition contribution rate for the plan year in which such rate is first established.

"(B) MULTIPLE RATES. — If different rates of contribution are payable to the legacy plan by different employers or for different classes of employees, the certification shall specify a transition contribution rate for each such employer.

"(C) RATE APPLICABLE TO EMPLOYER. —

"(i) IN GENERAL. — Except as provided by clause (ii), the transition contribution rate applicable to an employer for a plan year is the rate in effect for the plan year of the legacy plan that commences on or after 180 days before the earlier of —

"(I) the effective date of the collective bargaining agreement pursuant to which the employer contributes to the legacy plan, or

"(II) 5 years after the last plan year for which the transition contribution rate applicable to the employer was established or updated.

"(ii) EXCEPTION. — The transition contribution rate applicable to an employer for the first plan year beginning on or after the commencement of the employer's obligation to contribute to the composite plan is the rate in effect for the plan year of the legacy plan that commences on or after 180 days before such first plan year.

"(D) EFFECT OF LEGACY PLAN FINANCIAL CIRCUMSTANCES. — If the plan actuary of the legacy plan has certified under section 432 that the plan is in endangered or critical status for a plan year, the transition contribution rate for the following plan year is the rate determined with respect to the employer under the legacy plan's funding improvement or rehabilitation plan under section 432, if greater than the rate otherwise determined, but in no event greater than 75 percent of the sum of the contribution rates applicable to the legacy plan and the composite plan for the plan year.

"(E) OTHER ACTUARIAL ASSUMPTIONS AND METHODS. — Except as provided in sub paragraph (A), the determination of the transition contribution rate for a plan year shall be based on actuarial assumptions and methods consistent with the minimum funding determinations made under section 431 (or, if applicable, section 432) with respect to the legacy plan for the plan year.

"(F) ADJUSTMENTS IN RATE. — The plan sponsor of a legacy plan from time to time may adjust the transition contribution rate or rates applicable to an employer under this paragraph by increasing some rates and decreasing others if the actuary certifies that such adjusted rates in combination will produce projected contribution income for the plan year beginning on or after the date of certification that is not less than would be produced by the transition contribution rates in effect at the time of the certification.

"(G) NOTICE OF TRANSITION CONTRIBUTION RATE. — The plan sponsor of a legacy plan shall provide notice to the parties to collective bargaining agreements pursuant to which contributions are made to the legacy plan of changes to the transition contribution rate requirements at least 30 days before the beginning of the plan year for which the rate is effective.

"(H) NOTICE TO COMPOSITE PLAN SPONSOR. — Not later than 30 days after a determination by the plan sponsor of a legacy plan that a collective bargaining agreement provides for a rate of contributions that is below the transition contribution rate applicable to one or more employers that are parties to the collective bargaining agreement, the plan sponsor of the legacy plan shall notify the plan sponsor of any composite plan under which employees of such employer would otherwise be eligible to accrue a benefit.

"(3) CORRECTION PROCEDURES. — Pursuant to standards prescribed by the Secretary of Labor, the plan sponsor of a composite plan shall adopt rules and procedures that give the parties to the collective bargaining agreement notice of the failure of such agreement to satisfy the transition contribution requirements of this subsection, and a reasonable opportunity to correct such failure, not to exceed 180 days from the date of notice given under subsection (b)(2).

"(4) SUPPLEMENTAL CONTRIBUTIONS. — A collective bargaining agreement may provide for supplemental contributions to the legacy plan for a plan year in excess of the transition contribution rate determined under paragraph (2), regardless of whether the legacy plan is in endangered or critical status for such plan year.

"(e) NONAPPLICATION OF COMPOSITE PLAN RESTRICTIONS. —

"(1) IN GENERAL. — The provisions of subsections (a), (b), and (c) shall not apply with respect to a collective bargaining agreement, to the extent the agreement, or a predecessor agreement, provides or provided for contributions to a defined benefit plan that is a legacy plan, as of the first day of the first plan year following a plan year for which the plan actuary certifies that the plan is fully funded, has been fully funded for at least three out of the immediately preceding 5 plan years, and is projected to remain fully funded for at least the following 4 plan years.

"(2) DETERMINATION OF FULLY FUNDED. — A plan is fully funded for purposes of paragraph (1) if, as of the valuation date of the plan for a plan year, the value of the plan's assets equals or exceeds the present value of the plan's liabilities, determined in accordance with the rules prescribed by the Pension Benefit Guaranty Corporation under sections 4219(c)(1)(D) and 4281 of Employee Retirement Income and Security Act for multiemployer plans terminating by mass withdrawal, as in effect for the date of the determination, except the plan's reasonable assumption regarding the starting date of benefits may be used.

"(3) OTHER APPLICABLE RULES. — Except as provided in paragraph (2), actuarial determinations and projections under this section shall be based on the rules in section 432(b)(3) and section 438(b).

"SEC. 440B. MERGERS AND ASSET TRANSFERS OF COMPOSITE PLANS.

"(a) IN GENERAL. — Assets and liabilities of a composite plan may only be merged with, or transferred to, another plan if —

"(1) the other plan is a composite plan,

"(2) the plan or plans resulting from the merger or transfer is a composite plan,

"(3) no participant's accrued benefit or adjustable benefit is lower immediately after the transaction than it was immediately before the transaction, and

"(4) the value of the assets transferred in the case of a transfer reasonably reflects the value of the amounts contributed with respect to the participants whose benefits are being transferred, adjusted for allocable distributions, investment gains and losses, and administrative expenses.

"(b) LEGACY PLAN. —

"(1) IN GENERAL. — After a merger or transfer involving a composite plan, the legacy plan with respect to an employer that is obligated to contribute to the resulting composite plan is the legacy plan that applied to that employer immediately before the merger or transfer.

"(2) MULTIPLE LEGACY PLANS. — If an employer is obligated to contribute to more than one legacy plan with respect to employees eligible to accrue benefits under more than one composite plan and there is a merger or transfer of such legacy plans, the transition contribution rate applicable to the legacy plan resulting from the merger or transfer with respect to that employer shall be determined in accordance with the provisions of section 440A(d)(2)(B).".

(2) CLERICAL AMENDMENT. — The table of subparts for part III of subchapter D of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

"SUBPART C. COMPOSITE PLANS AND LEGACY PLANS".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act.

SEC. 103. APPLICATION OF CERTAIN REQUIREMENTS TO COMPOSITE PLANS.

(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. —

(1) TREATMENT FOR PURPOSES OF FUNDING NOTICES. — Section 101(f) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021(f)) is amended —

(A) in paragraph (1) by striking "title IV applies" and inserting "title IV applies or which is a composite plan"; and

(B) by adding at the end the following:

"(5) APPLICATION TO COMPOSITE PLANS. — The provisions of this subsection shall apply to a composite plan only to the extent prescribed by the Secretary in regulations that take into account the differences between a composite plan and a defined benefit plan that is a multiemployer plan.".

(2) TREATMENT FOR PURPOSES OF ANNUAL REPORT. — Section 103 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023) is amended —

(A) in subsection (d) by adding at the end the following sentence: "The provisions of this subsection shall apply to a composite plan only to the extent prescribed by the Secretary in regulations that take into account the differences between a composite plan and a defined benefit plan that is a multiemployer plan.";

(B) in subsection (f) by adding at the end the following:

"(3) ADDITIONAL INFORMATION FOR COMPOSITE PLANS. — With respect to any composite plan —

"(A) the provisions of paragraph (1)(A) shall apply by substituting 'current funded ratio and projected funded ratio (as such terms are defined in section 802(a)(2))' for 'funded percentage' each place it appears; and

"(B) the provisions of paragraph (2) shall apply only to the extent prescribed by the Secretary in regulations that take into account the differences between a composite plan and a defined benefit plan that is a multiemployer plan."; and

(C) by adding at the end the following:

"(h) COMPOSITE PLANS. — A multiemployer plan that incorporates the features of a composite plan as provided in section 801(b) shall be treated as a single plan for purposes of the report required by this section, except that separate financial statements and actuarial statements shall be provided under paragraphs (3) and (4) of subsection (a) for the defined benefit plan component and for the composite plan component of the multiemployer plan.".

(3) TREATMENT FOR PURPOSES OF PENSION BENEFIT STATEMENTS. — Section 105(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1025(a)) is amended by adding at the end the following:

"(4) COMPOSITE PLANS. — For purposes of this subsection, a composite plan shall be treated as a defined benefit plan to the extent prescribed by the Secretary in regulations that take into account the differences between a composite plan and a defined benefit plan that is a multiemployer plan.".

(b) AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986. — Section 6058 of the Internal Revenue Code of 1986 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following:

"(f) COMPOSITE PLANS. — A multiemployer plan that incorporates the features of a composite plan as provided in section 437(b) shall be treated as a single plan for purposes of the return required by this section, except that separate financial statements shall be provided for the defined benefit plan component and for the composite plan component of the multiemployer plan.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act.

SEC. 104. TREATMENT OF COMPOSITE PLANS UNDER TITLE IV.

(a) DEFINITION. — Section 4001(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1301(a)) is amended by striking the period at the end of paragraph (21) and inserting a semicolon and by adding at the end the following:

"(22) COMPOSITE PLAN. — The term 'composite plan' has the meaning set forth in section 801.".

(b) COMPOSITE PLANS DISREGARDED FOR CALCULATING PREMIUMS. — Section 4006(a) of such Act (29 U.S.C. 1306(a)) is amended by adding at the end the following:

"(9) The composite plan component of a multiemployer plan shall be disregarded in determining the premiums due under this section from the multiemployer plan.".

(c) COMPOSITE PLANS NOT COVERED. — Section 4021(b)(1) of such Act (29 U.S.C. 1321(b)(1)) is amended by striking "Act" and inserting "Act, or a composite plan, as defined in paragraph (43) of section 3 of this Act".

(d) NO WITHDRAWAL LIABILITY. — Section 4201 of such Act (29 U.S.C. 1381) is amended by adding at the end the following:

"(c) Contributions by an employer to the composite plan component of a multiemployer plan shall not be taken into account for any purpose under this title.".

(e) NO WITHDRAWAL LIABILITY FOR CERTAIN PLANS. — Section 4201 of such Act (29 U.S.C. 1381) is further amended by adding at the end the following:

"(d) Contributions by an employer to a multiemployer plan described in the except clause of section 3(35) of this Act pursuant to a collective bargaining agreement that specifically designates that such contributions shall be allocated to the separate defined contribution accounts of participants under the plan shall not be taken into account with respect to the defined benefit portion of the plan for any purpose under this title (including the determination of the employer's highest contribution rate under section 4219), even if, under the terms of the plan, participants have the option to transfer assets in their separate defined contribution accounts to the defined benefit portion of the plan in return for service credit under the defined benefit portion, at rates established by the plan sponsor.

"(e) A legacy plan created under section 805 shall be deemed to have no unfunded vested benefits for purposes of this part, for each plan year following a period of 5 consecutive plan years for which —

"(1) the plan was fully funded within the meaning of section 805 for at least 3 of the plan years during that period, ending with a plan year for which the plan is fully funded;

"(2) the plan had no unfunded vested benefits for at least 3 of the plan years during that period, ending with a plan year for which the plan is fully funded; and

"(3) the plan is projected to be fully funded and to have no unfunded vested benefits for the following four plan years.".

(f) NO WITHDRAWAL LIABILITY FOR EMPLOYERS CONTRIBUTING TO CERTAIN FULLY FUNDED LEGACY PLANS. — Section 4211 of such Act (29 U.S.C. 1382) is amended by adding at the end the following:

"(g) No amount of unfunded vested benefits shall be allocated to an employer that has an obligation to contribute to a legacy plan described in subsection (e) of section 4201 for each plan year for which such subsection applies.".

(g) NO OBLIGATION TO CONTRIBUTE. — Section 4212 of such Act (29 U.S.C. 1392) is amended by adding at the end the following:

"(d) NO OBLIGATION TO CONTRIBUTE. — An employer shall not be treated as having an obligation to contribute to a multiemployer defined benefit plan within the meaning of subsection (a) solely because —

"(1) in the case of a multiemployer plan that includes a composite plan component, the employer has an obligation to contribute to the composite plan component of the plan;

"(2) the employer has an obligation to contribute to a composite plan that is maintained pursuant to one or more collective bargaining agreements under which the multiemployer defined benefit plan is or previously was maintained; or

"(3) the employer contributes or has contributed under section 805(d) to a legacy plan associated with a composite plan pursuant to a collective bargaining agreement but employees of that employer were not eligible to accrue benefits under the legacy plan with respect to service with that employer.".

(h) NO INFERENCE. — Nothing in the amendment made by subsection (e) shall be construed to create an inference with respect to the treatment under title IV of the Employee Retirement Income Security Act of 1974, as in effect before such amendment, of contributions by an employer to a multiemployer plan described in the except clause of section 3(35) of such Act that are made before the effective date of subsection (e) specified in subsection (h)(2).

(i) EFFECTIVE DATE. —

(1) IN GENERAL. — Except as provided in subparagraph (2), the amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act.

(2) SPECIAL RULE FOR SECTION 414(k) MULTI-EMPLOYER PLANS. — The amendment made by subsection (e) shall apply only to required contributions payable for plan years beginning after the date of the enactment of this Act.

SEC. 105. CONFORMING CHANGES.

(a) DEFINITIONS. — Section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002) is amended —

(1) in paragraph (35), by inserting "or a composite plan" after "other than an individual account plan"; and

(2) by adding at the end the following:

"(43) The term 'composite plan' has the meaning given the term in section 801(a).".

(b) SPECIAL FUNDING RULE FOR CERTAIN LEGACY

(1) AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 304(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1084(b)) is amended by adding at the end the following:

"(9) SPECIAL FUNDING RULE FOR CERTAIN LEGACY PLANS. — In the case of a multiemployer defined benefit plan that has adopted an amendment under section 801(b), in accordance with which no further benefits shall accrue under the multiemployer defined benefit plan, the plan sponsor may combine the outstanding balance of all charge and credit bases and amortize that combined base in a period of 25 plan years beginning with the plan year following the date all benefit accruals ceased.".

(2) AMENDMENT TO INTERNAL REVENUE CODE OF 1986. — Section 431(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following:

"(9) SPECIAL FUNDING RULE FOR CERTAIN LEGACY PLANS. — In the case of a multiemployer defined benefit plan that has adopted an amendment under section 437(b), in accordance with which no further benefits shall accrue under the multiemployer defined benefit plan, the plan sponsor may combine the outstanding balance of all charge and credit bases and amortize that combined base in level annual installments (until fully amortized) over a period of 25 plan years beginning with the plan year following the date on which all benefit accruals ceased.".

(c) BENEFITS AFTER MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS. —

(1) AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 208 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1058) is amended —

(A) by striking so much of the first sentence as precedes "may not merge" and inserting the following:

"(1) IN GENERAL. — Except as provided in paragraph (2), a pension plan may not merge, and"; and

(B) by striking the second sentence and adding at the end the following:

"(2) SPECIAL REQUIREMENTS FOR MULTIEMPLOYER PLANS. — Paragraph (1) shall not apply to any transaction to the extent that participants either before or after the transaction are covered under a multiemployer plan to which title IV of this Act applies or a composite plan.".

(2) AMENDMENTS TO INTERNAL REVENUE CODE OF 1986. —

(A) QUALIFICATION REQUIREMENT. — Section 401(a)(12) of the Internal Revenue Code of 1986 is amended —

(i) by striking "(12) A trust" and inserting the following:

"(12) BENEFITS AFTER MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS. —

"(A) IN GENERAL. — Except as provided in subparagraph (B), a trust";

(ii) by striking the second sentence; and

(iii) by adding at the end the following:

"(B) SPECIAL REQUIREMENTS FOR MULTI-EMPLOYER PLANS. — Subparagraph (A) shall not apply to any multiemployer plan with respect to any transaction to the extent that participants either before or after the transaction are covered under a multiemployer plan to which title IV of the Employee Retirement Income Security Act of 1974 applies or a composite plan.".

(B) ADDITIONAL QUALIFICATION REQUIREMENT. — Paragraph (1) of section 414(l) of such Code is amended —

(i) by striking "(1) IN GENERAL" and all that follows through "shall not constitute" and inserting the following:

"(1) BENEFIT PROTECTIONS: MERGER, CONSOLIDATION, TRANSFER. —

"(A) IN GENERAL. — Except as provided in subparagraph (B), a trust which forms a part of a plan shall not constitute"; and

(ii) by striking the second sentence; and

(iii) by adding at the end the following:

"(B) SPECIAL REQUIREMENTS FOR MULTIEMPLOYER PLANS. — Subparagraph (A) does not apply to any multiemployer plan with respect to any transaction to the extent that participants either before or after the transaction are covered under a multiemployer plan to which title IV of the Employee Retirement Income Security Act of 1974 applies or a composite plan.".

(d) REQUIREMENTS FOR STATUS AS A QUALIFIED PLAN. —

(1) REQUIREMENT THAT ACTUARIAL ASSUMPTIONS BE SPECIFIED. — Section 401(a)(25) of the Internal Revenue Code of 1986 is amended by inserting "(in the case of a composite plan, benefits objectively calculated pursuant to a formula)" after "definitely determinable benefits".

(2) MISSING PARTICIPANTS IN TERMINATING COMPOSITE PLAN. — Section 401(a)(34) of the Internal Revenue Code of 1986 is amended by striking ", a trust" and inserting "or a composite plan, a trust".

(e) DEDUCTION FOR CONTRIBUTIONS TO A QUALIFIED PLAN. — Section 404(a)(1) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (E) as subparagraph (F) and by inserting after subparagraph (D) the following:

"(E) COMPOSITE PLANS. —

"(i) IN GENERAL. — In the case of a composite plan, subparagraph (D) shall not apply and the maximum amount deductible for a plan year shall be the excess (if any) of —

"(I) 160 percent of the greater of —

"(aa) the current liability of the plan determined in accordance with the principles of section 431(c)(6)(D), or

"(bb) the present value of plan liabilities as determined under section 438, over

"(II) the fair market value of the plan's assets, projected to the end of the plan year.

"(ii) SPECIAL RULES FOR PREDECESSOR MULTI-EMPLOYER PLAN TO COMPOSITE PLAN. —

"(I) IN GENERAL. — Except as provided in subclause (II), if an employer contributes to a composite plan with respect to its employees, contributions by that employer to a multiemployer defined benefit plan with respect to some or all of the same group of employees shall be deductible under sections 162 and this section, subject to the limits in subparagraph (D).

"(II) TRANSITION CONTRIBUTION. — The full amount of a contribution to satisfy the transition contribution requirement (as defined in section 440A(d)) and allocated to the legacy defined benefit plan for the plan year shall be deductible for the employer's taxable year ending with or within the plan year.".

(f) MINIMUM VESTING STANDARDS. —

(1) YEARS OF SERVICE UNDER COMPOSITE PLANS. —

(A) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 203 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053) is amended by inserting after subsection (f) the following:

"(g) SPECIAL RULES FOR COMPUTING YEARS OF SERVICE UNDER COMPOSITE PLANS. —

"(1) IN GENERAL. — In determining a qualified employee's years of service under a composite plan for purposes of this section, the employee's years of service under a legacy plan shall be treated as years of service earned under the composite plan. For purposes of such determination, a composite plan shall not be treated as a defined benefit plan pursuant to section 801(d).

"(2) QUALIFIED EMPLOYEE. — For purposes of this subsection, an employee is a qualified employee if the employee first completes an hour of service under the composite plan (determined without regard to the provisions of this subsection) within the 12month period immediately preceding or the 24month period immediately following the date the employee ceased to accrue benefits under the legacy plan.

"(3) CERTIFICATION OF YEARS OF SERVICE. — For purposes of paragraph (1), the plan sponsor of the composite plan shall rely on a written certification by the plan sponsor of the legacy plan of the years of service the qualified employee completed under the defined benefit plan as of the date the employee satisfies the requirements of paragraph (2), disregarding any years of service that had been forfeited under the rules of the defined benefit plan before that date.

"(h) SPECIAL RULES FOR COMPUTING YEARS OF SERVICE UNDER LEGACY PLANS. —

"(1) IN GENERAL. — In determining a qualified employee's years of service under a legacy plan for purposes of this section, and in addition to any service under applicable regulations, the employee's years of service under a composite plan shall be treated as years of service earned under the legacy plan. For purposes of such determination, a composite plan shall not be treated as a defined benefit plan pursuant to section 801(d).

"(2) QUALIFIED EMPLOYEE. — For purposes of this subsection, an employee is a qualified employee if the employee first completes an hour of service under the composite plan (determined without regard to the provisions of this subsection) within the 12month period immediately preceding or the 24month period immediately following the date the employee ceased to accrue benefits under the legacy plan.

"(3) CERTIFICATION OF YEARS OF SERVICE. — For purposes of paragraph (1), the plan sponsor of the legacy plan shall rely on a written certification by the plan sponsor of the composite plan of the years of service the qualified employee completed under the composite plan after the employee satisfies the requirements of paragraph (2), disregarding any years of service that has been forfeited under the rules of the composite plan.".

(B) INTERNAL REVENUE CODE OF 1986. — Section 411(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following:

"(14) SPECIAL RULES FOR DETERMINING YEARS OF SERVICE UNDER COMPOSITE PLANS. —

"(A) IN GENERAL. — In determining a qualified employee's years of service under a composite plan for purposes of this subsection, the employee's years of service under a legacy plan shall be treated as years of service earned under the composite plan. For purposes of such determination, a composite plan shall not be treated as a defined benefit plan pursuant to section 437(d).

"(B) QUALIFIED EMPLOYEE. — For purposes of this paragraph, an employee is a qualified employee if the employee first completes an hour of service under the composite plan (determined without regard to the provisions of this paragraph) within the 12month period immediately preceding or the 24month period immediately following the date the employee ceased to accrue benefits under the legacy plan.

"(C) CERTIFICATION OF YEARS OF SERVICE. — For purposes of subparagraph (A), the plan sponsor of the composite plan shall rely on a written certification by the plan sponsor of the legacy plan of the years of service the qualified employee completed under the legacy plan as of the date the employee satisfies the requirements of subparagraph (B), disregarding any years of service that had been forfeited under the rules of the defined benefit plan be fore that date.

"(15) SPECIAL RULES FOR COMPUTING YEARS OF SERVICE UNDER LEGACY PLANS. —

"(A) IN GENERAL. — In determining a qualified employee's years of service under a legacy plan for purposes of this section, and in addition to any service under applicable Regulations, the employee's years of service under a composite plan shall be treated as years of service earned under the legacy plan. For purposes of such determination, a composite plan shall not be treated as a defined benefit plan pursuant to section 437(d).

"(B) QUALIFIED EMPLOYEE. — For purposes of this paragraph, an employee is a qualified employee if the employee first completes an hour of service under the composite plan (determined without regard to the provisions of this paragraph) within the 12month period immediately preceding or the 24month period immediately following the date the employee ceased to accrue benefits under the legacy plan.

"(C) CERTIFICATION OF YEARS OF SERVICE. — For purposes of subparagraph (A), the plan sponsor of the legacy plan shall rely on a written certification by the plan sponsor of the composite plan of the years of service the qualified employee completed under the composite plan after the employee satisfies the requirements of subparagraph (B), disregarding any years of service that has been forfeited under the rules of the composite plan.".

(2) REDUCTION OF BENEFITS. —

(A) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 203(a)(3)(E)(ii) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)(3)(E)(ii)) is amended —

(i) in subclause (I) by striking "4244A" and inserting "305(e), 803,"; and

(ii) in subclause (II) by striking "4245" and inserting "305(e), 4245,".

(B) INTERNAL REVENUE CODE OF 1986. — Section 411(a)(3)(F) of the Internal Revenue Code of 1986 is amended —

(i) in clause (i) by striking "section 418D or under section 4281 of the Employee Retirement Income Security Act of 1974" and inserting "section 432(e) or 439 or under section 4281 of the Employee Retirement Income Security Act of 1974"; and

(ii) in clause (ii) by inserting "or 432(e)" after "section 418E".

(3) ACCRUED BENEFIT REQUIREMENTS. —

(A) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 204(b)(1)(B)(i) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(b)(1)(B)(i)) is amended by inserting ", including an amendment reducing or suspending benefits under section 305(e), 803, 4245 or 4281," after "any amendment to the plan".

(B) INTERNAL REVENUE CODE OF 1986. — Section 411(b)(1)(B)(i) of the Internal Revenue Code of 1986 is amended by inserting ", including an amendment reducing or suspending benefits under section 418E, 432(e) or 439, or under section 4281 of the Employee Retirement Income Security Act of 1974," after "any amendment to the plan".

(4) ADDITIONAL ACCRUED BENEFIT REQUIREMENTS. —

(A) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 204(b)(1)(H)(v) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(b)(1)(H)(v)) is amended by inserting before the period at the end the following: ", or benefits are reduced or suspended under section 305(e), 803, 4245, or 4281".

(B) INTERNAL REVENUE CODE OF 1986. — Section 411(b)(1)(H)(iv) of the Internal Revenue Code of 1986 is amended —

(i) in the heading by striking "BEN EFIT" and inserting "BENEFIT AND THE SUSPENSION AND REDUCTION OF CERTAIN BENEFITS"; and

(ii) in the text by inserting before the period at the end the following: ", or benefits are reduced or suspended under section 418E, 432(e), or 439, or under section 4281 of the Employee Retirement Income Security Act of 1974".

(5) ACCRUED BENEFIT NOT TO BE DECREASED BY AMENDMENT. —

(A) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 204(g)(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(g)(1)) is amended by inserting after "302(d)(2)" the following: ", 305(e), 803, 4245,".

(B) INTERNAL REVENUE CODE OF 1986. — Section 411(d)(6)(A) of the Internal Revenue Code of 1986 is amended by inserting after "412(d)(2)," the following: "418E, 432(e), or 439,".

(g) CERTAIN FUNDING RULES NOT APPLICABLE. —

(1) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. — Section 305 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085) is amended by adding at the end the following:

"(k) LEGACY PLANS. — Sections 302, 304, and 305 shall not apply to an employer that has an obligation to contribute to a plan that is a legacy plan within the meaning of section 805(a) solely because the employer has an obligation to contribute to a composite plan described in section 801 that is associated with that legacy plan.".

(2) INTERNAL REVENUE CODE OF 1986. — Section 432 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

"(k) LEGACY PLANS. — Sections 412, 431, and 432 shall not apply to an employer that has an obligation to contribute to a plan that is a legacy plan within the meaning of section 440A(a) solely because the employer has an obligation to contribute to a composite plan described in section 437 that is associated with that legacy plan.".

(h) TERMINATION OF COMPOSITE PLAN. — Section 403(d) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1103(d) is amended —

(1) in paragraph (1), by striking "regulations of the Secretary." and inserting "regulations of the Secretary, or as provided in paragraph (3)."; and

(2) by adding at the end the following:

"(3) Section 4044(a) of this Act shall be applied in the case of the termination of a composite plan by —

"(A) limiting the benefits subject to paragraph (3) thereof to benefits as defined in section 802(b)(3)(B); and

"(B) including in the benefits subject to paragraph (4) all other benefits (if any) of individuals under the plan that would be guaranteed under section 4022A if the plan were subject to title IV.".

(i) GOOD FAITH COMPLIANCE PRIOR TO GUIDANCE. — Where the implementation of any provision of law added or amended by this division is subject to issuance of regulations by the Secretary of Labor, the Secretary of the Treasury, or the Pension Benefit Guaranty Corporation, a multiemployer plan shall not be treated as failing to meet the requirements of any such provision prior to the issuance of final regulations or other guidance to carry out such provision if such plan is operated in accordance with a reasonable, good faith interpretation of such provision.

SEC. 106. EFFECTIVE DATE.

Unless otherwise specified, the amendments made by this division shall apply to plan years beginning after the date of the enactment of this Act.

DIVISION K — HEALTH PROVISIONS

SEC. 100. SHORT TITLE.

This division may be cited as the "Investing in America's Health Care During the COVID–19 Pandemic Act".

* * *

SEC. 311. APPLICATION OF PREMIUM TAX CREDIT IN CASE OF INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION DURING THE COVID19 PUBLIC HEALTH EMERGENCY.

(a) IN GENERAL. — Section 36B of the Internal Revenue Code of 1986, as amended by the preceding provisions of this Act, is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:

"(g) SPECIAL RULE FOR INDIVIDUALS WHO RECEIVE UNEMPLOYMENT COMPENSATION DURING COVID-19 PUBLIC HEALTH EMERGENCY. —

"(1) IN GENERAL. — For purposes of the credit determined under this section, in the case of a taxpayer who has received, or has been approved to receive, unemployment compensation for any week during the applicable period, for the taxable year in which such week begins —

"(A) such taxpayer shall be treated as an applicable taxpayer, and

"(B) there shall not be taken into account any household income of the taxpayer in excess of 133 percent of the poverty line for a family of the size involved.

"(2) APPLICABLE PERIOD. — For purposes of this section, the applicable period is the period that —

"(A) begins on the date of the enactment of this subsection, and

"(B) ends 60 days after the last day of the emergency period described in section 1135(g)(1)(B) of the Social Security Act.

"(3) REASONABLE EVIDENCE OF UNEMPLOYMENT COMPENSATION. — For purposes of this subsection, a taxpayer shall not be treated as having received (or been approved to receive) unemployment compensation for any week unless such taxpayer provides documentation which demonstrates such receipt or approval.

"(4) UNEMPLOYMENT COMPENSATION. — For purposes of this subsection, the term 'unemployment compensation' has the meaning given such term in section 1311(c)(8)(E) of the Patient Protection and Affordable Care Act.".

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

SEC. 312. INCREASING ACCESSIBILITY AND AFFORDABILITY TO QUALIFIED HEALTH PLANS FOR INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION DURING THE COVID–19 EMERGENCY PERIOD.

(a) ESTABLISHMENT OF SPECIAL ENROLLMENT PERIODS FOR INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION. — Section 1311(c) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(c)) is amended —

(1) in paragraph (6) —

(A) in subparagraph (C), by striking at the end "and";

(B) in subparagraph (D), by striking the period at the end and inserting "; and"; and

(C) by adding at the end the following new subparagraph:

"(E) special enrollment periods described in paragraph (8)."; and

(2) by adding at the end the following new paragraph:

"(8) SPECIAL ENROLLMENT PERIODS FOR INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION. —

"(A) IN GENERAL. — The special enrollment period described in this paragraph —

"(i) in the case of an individual who becomes eligible for unemployment compensation on any date before January 1, 2021, is the period beginning on the first day on or after such date that the individual is not eligible for minimum essential coverage (as defined in section 5000A(f) of the Internal Revenue Code of 1986) and ending on the later of —

"(I) December 31, 2020; and

"(II) the day that is 60 days after such first day; and

"(ii) in the case of an individual who becomes eligible for unemployment compensation beginning on any date that is on or after January 1, 2021, is the 60-day period beginning on the first day on or after such date that the individual is not eligible for minimum essential coverage.

"(B) SELF-ATTESTATION. — For purposes of this paragraph, eligibility of an individual for unemployment compensation and the date on which such eligibility begins shall be determined by the self-attestation of such individual.

"(C) EXCLUSION. — For purposes of this paragraph, an individual shall not be treated as eligible for minimum essential coverage if —

"(i) such individual is eligible only for coverage described in section 5000A(f)(1)(C) of the Internal Revenue Code of 1986; or

"(ii) such individual would not be treated as eligible for minimum essential coverage pursuant to section 36B(c)(2)(C) of such Code.

"(D) CLARIFICATION. — Nothing in subparagraph (A) shall be construed to prohibit an individual described in such subparagraph from qualifying for multiple special enrollment periods under such subparagraph.

"(E) UNEMPLOYMENT COMPENSATION DEFINED. — In this paragraph, the term 'unemployment compensation' means, with respect to an individual —

"(i) regular compensation and extended compensation (as such terms are defined by section 205 of the FederalState Extended Unemployment Compensation Act of 1970);

"(ii) unemployment compensation (as defined by section 85(b) of the Internal Revenue Code of 1986) provided under any program administered by a State under an agreement with the Secretary;

"(iii) pandemic unemployment assistance under section 2102 of the CARES Act;

"(iv) pandemic emergency unemployment compensation under section 2107 of the CARES Act;

"(v) pandemic emergency unemployment extension compensation under section 2107A of the CARES Act;

"(vi) unemployment benefits under the Railroad Unemployment Insurance Act; and

"(vii) trade adjustment assistance under title II of the Trade Act of 1974; for which such individual is eligible for any week during the period beginning on the first day of the emergency period described in section 1135(g)(1)(B) of the Social Security Act and ending on December 31, 2021.".

(b) REQUIREMENT FOR FIRST DAY OF COVERAGE FOR INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION ENROLLING DURING SPECIAL ENROLLMENT PERIODS. — Section 1303 of the Patient Protection and Affordable Care Act (42 U.S.C. 18023) is amended by adding at the end the following new subsection:

"(e) REQUIREMENT FOR FIRST DAY OF COVERAGE FOR INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION ENROLLING DURING SPECIAL ENROLLMENT PERIODS. —

"(1) IN GENERAL. — In the case of an individual described in section 1311(c)(8)(A) who enrolls in a qualified health plan through an Exchange during a month during a special enrollment period described in such section, such coverage shall be effective beginning on —

"(A) if such individual was enrolled in minimum essential coverage (other than the qualified health plan enrolled through such a special enrollment period) on the first day of such month, the first day of such month on which the individual is longer so enrolled; and"(B) if such individual was not enrolled in minimum essential coverage (other than the qualified health plan enrolled through such a special enrollment period) on the first day of such month, the first day of such month.

"(2) MINIMUM ESSENTIAL COVERAGE DEFINED. — In this subsection, the term 'minimum essential coverage' has the meaning given such term in section 5000A(f) of the Internal Revenue Code of 1986.".

(c) MODEL NOTICE AND PUBLICATION OF INFORMATION RELATING TO SPECIAL ENROLLMENT PERIODS AND CREDITS FOR INDIVIDUALS RECEIVING UNEMPLOYMENT COMPENSATION. —

(1) MODEL NOTICE. — The Secretary of Health and Human Services shall make available to States a model notice (which may be sent by mail, email, or electronic means upon the receipt of unemployment compensation (as defined in subparagraph (D) of section 1311(c)(8) of the Patient Protection and Affordable Care Act, as added by subsection (a)) that includes information with respect to the eligibility of individuals described in subparagraph (A) of such section —

(A) to enroll in a qualified health plan offered through an Exchange during a special enrollment period described in section 1311(c)(8)(A) of such Act;

(B) for the premium tax credit under section 36B of the Internal Revenue Code of 1986; and

(C) for any increase to the premium tax credit an individual otherwise receives under section 36B of the Internal Revenue Code of 1986 by reason of subsection (g) of such section.

(2) PUBLICATION OF INFORMATION. — Section 1311(b) of the Patient Protection and Affordable Care Act (42 U.S.C. 18031(b)) by adding at the end the following new paragraph:

"(3) PUBLICATION OF INFORMATION RELATING TO A SPECIAL ENROLLMENT PERIOD AND CREDITS. — An Exchange shall, not later than 7 days after the date of the enactment of this paragraph, prominently post on the homepage of the Internet website for such Exchange information with respect to the special enrollment period described in subsection (c)(8)(A) and hyperlinks to information with respect to the eligibility of individuals described in such subsection —

"(A) to enroll in a qualified health plan offered through an Exchange during a special enrollment period described in such subsection;

"(B) for the premium tax credit under section 36B of the Internal Revenue Code of 1986; and

"(C) for any increase to the premium tax credit an individual otherwise receives under section 36B of the Internal Revenue Code of 1986 by reason of subsection (g) of such section.".

SEC. 313. TEMPORARY MODIFICATION OF LIMITATIONS ON RECONCILIATION OF TAX CREDITS FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN WITH ADVANCE PAYMENTS OF SUCH CREDIT.

(a) IN GENERAL. — Section 36B(f)(2)(B) of the Internal Revenue Code of 1986 is amended by adding at the end the following new clause:

"(iii) TEMPORARY MODIFICATION OF LIMITATION ON INCREASE. — In the case of any taxable year beginning in 2020 or 2021, clause (i) shall be applied —

"(I) by substituting '600 percent' for '400 percent' the first place it appears therein, and

"(II) by substituting the following table for the table contained therein:

"If the household income (expressed as a percent of poverty line) is:

The applicable dollar amount is:

Less than 500%

$0

At least 500% but less than 550%

$1,600

At least 550% but less than 600%

$2,650

The dollar amounts in the table contained under this clause shall be increased under clause (ii) for taxable years beginning calendar year 2021 by substituting 'calendar year 2020' for 'calendar year 2013' in subclause (II) thereof.".

(b) EFFECTIVE DATE. — The amendment made by this section shall apply to taxable years beginning after December 31, 2019.

SEC. 314. REQUIREMENTS FOR COBRA NOTICES RELATING TO THE AVAILABILITY OF HEALTH INSURANCE COVERAGE AND ASSISTANCE.

(a) ADDITIONAL NOTIFICATION REQUIREMENT FOR COBRA NOTICES. —

(1) IN GENERAL. — In the case of a notice provided under section 606(a)(4) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1166(4)), section 4980B(f)(6)(D) of the Internal Revenue Code of 1986, or section 2206(4) of the Public Health Service Act (42 U.S.C. 300bb–6(4)), with respect to an individual who, during the period described in paragraph (2), becomes entitled to elect COBRA continuation coverage, the requirements of such provisions shall not be treated as met unless such notice includes an additional written notice advising such individual, in clear and understandable language —

(A) that such individual may be eligible for —

(i) a special enrollment period described in section 1311(c)(8)(A) of the Patient Protection and Affordable Care Act; and

(ii) a premium tax credit under section 36B of the Internal Revenue Code of 1986 (including a possible increase to such credit by reason of subsection (g) of such section); and

(B) of the existence and potential effects of the temporary modification of limitations on reconciliation of such credits under section 36B(f)(2)(B)(iii) of such Code.

(2) PERIOD DESCRIBED. — For purposes of paragraph (1), the period described in this paragraph is the period that —

(A) begins 14 days after the date of the enactment of this Act; and

(B) ends 60 days after the last day of the emergency period described in section 1135(g)(1)(B) of the Social Security Act (42 U.S.C. 1320b–5(g)(1)(B)).

(3) FORM. — The requirement of the additional notification under this subsection may be met by amendment of existing notice forms or by inclusion of a separate document with the notice otherwise required.

(4) MODEL NOTICES. — Not later than 14 days after the date of enactment of this Act, with respect to any individual described in paragraph (1), the Secretary of Labor, in consultation with the Secretary of the Treasury and the Secretary of Health and Human Services, shall prescribe models for the additional notification required under this subsection. Such models shall include an estimate of the amount of the monthly premium of a silver-level qualified health plan offered through an Exchange following the application of tax credits under section 36B of the Internal Revenue Code of 1986 for the average individual eligible for the special enrollment period described in paragraph (1)(A)(i).

(b) OUTREACH BY THE SECRETARY OF LABOR. — The Secretary of Labor, in consultation with the Secretary of the Treasury and the Secretary of Health and Human Services, shall provide outreach consisting of public education and enrollment assistance relating to premium assistance, special enrollment periods, and reconciliation modifications described in subsection (a)(1). Such outreach shall target employers, group health plan administrators, public assistance programs, States, consumers, and other entities as determined appropriate by such Secretaries. Information on such premium assistance, special enrollment periods, and reconciliation modifications shall also be made available on the websites of the Departments of Labor, Treasury, and Health and Human Services.

(c) DEFINITIONS. — In this section:

(1) COBRA CONTINUATION COVERAGE. — The term "COBRA continuation coverage" means continuation coverage provided pursuant to part 6 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (other than under section 609), title XXII of the Public Health Service Act, or section 4980B of the Internal Revenue Code of 1986 (other than subsection (f)(1) of such section insofar as it relates to pediatric vaccines), or under a State program that provides comparable continuation coverage. Such term does not include coverage under a health flexible spending arrangement under a cafeteria plan within the meaning of section 125 of the Internal Revenue Code of 1986.

(2) EXCHANGE. — The term "Exchange" means an American Health Benefit Exchange established under section 1311 of the Patient Protection and Affordable Care Act.

(3) GROUP HEALTH PLAN. — The term "group health plan" has the meaning given such term in section 607(1) of the Employee Retirement Income Security Act of 1974.

(4) QUALIFIED HEALTH PLAN. — The term "qualified health plan" has the meaning given such term in section 1301(a)(1) of the Patient Protection and Affordable Care Act.

(5) STATE. — The term "State" includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.

(6) UNEMPLOYMENT COMPENSATION. — The term "unemployment compensation" means, with respect to an individual —

(A) regular compensation and extended compensation (as such terms are defined by section 205 of the Federal-State Extended Unemployment Compensation Act of 1970);

(B) unemployment compensation (as defined by section 85(b) of the Internal Revenue Code of 1986) provided under any program administered by a State under an agreement with the Secretary;

(C) pandemic unemployment assistance under section 2102 of the CARES Act;

(D) pandemic emergency unemployment compensation under section 2107 of the CARES Act;

(E) unemployment benefits under the Railroad Unemployment Insurance Act; and

(F) trade adjustment assistance under title II of the Trade Act of 1974;

for which such individual is eligible for any week during the period described in subsection (a)(2).

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