EXCISE TAX RELIEF FOR SOUND PENSION FUNDING.

SEC. 653. EXCISE TAX RELIEF FOR SOUND PENSION FUNDING. (a) In General.—Subsection (c) of section 4972 (relating to nondeductible contributions) is amended by adding at the end the following new paragraph: “(7) Defined benefit plan exception.—In determining the amount of nondeductible contributions for any taxable year, an employer may elect for such year not to take into account any contributions to a defined benefit plan except to the extent that such contributions exceed the full-funding limitation (as defined in section 412(c)(7), determined without regard to subparagraph (A)(i)(I) thereof). For purposes of this paragraph, the deductible limits under section 404(a)(7) shall first be applied to amounts contributed to defined contribution plans and then to amounts described in this paragraph. If an employer makes an election under this paragraph for a taxable year, paragraph (6) shall not apply to such employer for such taxable year.”. (b) Effective Date.—The amendment made by this section shall apply to years beginning after December 31, 2001.