EXTENSION OF MORATORIUM ON APPLICATION OF CERTAIN NONDISCRIMINATION RULES TO STATE AND LOCAL GOVERNMENTS.

SEC. 1505. EXTENSION OF MORATORIUM ON APPLICATION OF CERTAIN NONDISCRIMINATION RULES TO STATE AND LOCAL GOVERNMENTS. (a) General Nondiscrimination and Participation Rules.— (1) Nondiscrimination requirements.—Section 401(a)(5) (relating to qualified pension, profit-sharing, and stock bonus plans) is amended by adding at the end the following: “(G) State and local governmental plans.—Paragraphs (3) and (4) shall not apply to a governmental plan (within the meaning of section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof).”. (2) Additional participation requirements.—Section 401(a)(26)(H) (relating to additional participation requirements) is amended to read as follows: “(H) Exception for state and local governmental plans.—This paragraph shall not apply to a governmental plan (within the meaning of section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof).”. (3) Minimum participation standards.—Section 410(c)(2) (relating to application of participation standards to certain plans) is amended to read as follows: “(2) A plan described in paragraph (1) shall be treated as meeting the requirements of this section for purposes of section 401(a), except that in the case of a plan described in subparagraph (B), (C), or (D) of paragraph (1), this paragraph shall apply only if such plan meets the requirements of section 401(a)(3) (as in effect on September 1, 1974).”. (b) Participation and Discrimination Standards for Qualified Cash or Deferred Arrangements.—Section 401(k)(3) (relating to application of participation and discrimination standards) is amended by adding at the end the following:111 STAT. 1064 “(G) A governmental plan (within the meaning of section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof) shall be treated as meeting the requirements of this paragraph.”. (c) Nondiscrimination Rules for Section 403(b) Plans.—Section 403(b)(12) (relating to nondiscrimination requirements) is amended by adding at the end the following: “(C) State and local governmental plans.—For purposes of paragraph (1)(D), the requirements of subparagraph (A)(i) (other than those relating to section 401(a)(17)) shall not apply to a governmental plan (within the meaning of section 414(d)) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof).”. (d) Effective Dates.— (1) In general.—The amendments made by this section apply to taxable years beginning on or after the date of enactment of this Act. (2) Treatment for years beginning before date of enactment.—A governmental plan (within the meaning of section 414(d) of the Internal Revenue Code of 1986) maintained by a State or local government or political subdivision thereof (or agency or instrumentality thereof) shall be treated as satisfying the requirements of sections 401(a)(3), 401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and (b)(12), and 410 of such Code for all taxable years beginning before the date of enactment of this Act.