CLARIFICATION OF RULE FOR EMERGENCE FROM CRITICAL STATUS.

SEC. 103. CLARIFICATION OF RULE FOR EMERGENCE FROM CRITICAL STATUS. (a) Amendment to Employee Retirement Income Security Act of 1974.—Section 305(e)(4)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1085(e)(4)(B)) is amended to read as follows: “(B) Emergence.— “(i) In general.—A plan in critical status shall remain in such status until a plan year for which the plan actuary certifies, in accordance with subsection (b)(3)(A), that— “(I) the plan is not described in one or more of the subparagraphs in subsection (b)(2) as of the beginning of the plan year; “(II) the plan is not projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 304(d)(2) or section 304 (as in effect prior to the enactment of the Pension Protection Act of 2006); and “(III) the plan is not projected to become insolvent within the meaning of section 4245 for any of the 30 succeeding plan years. “(ii) Plans with certain amortization extensions.— “(I) Special emergence rule.—Notwithstanding clause (i), a plan in critical status that has an automatic extension of amortization periods under section 304(d)(1) shall no longer be in critical status if the plan actuary certifies for a plan year, in accordance with subsection (b)(3)(A), that— “(aa) the plan is not projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 304(d)(1); and “(bb) the plan is not projected to become insolvent within the meaning of section 4245 for any of the 30 succeeding plan years, regardless of whether the plan is described in one or more of the subparagraphs in subsection (b)(2) as of the beginning of the plan year. “(II) Reentry into critical status.—A plan that emerges from critical status under subclause (I) shall not reenter critical status for any subsequent plan year unless— “(aa) the plan is projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 304(d); or “(bb) the plan is projected to become insolvent within the meaning of section 4245 for any of the 30 succeeding plan years.” . (b) [26 U.S.C. 432] Amendment to the Internal Revenue Code.—Section 432(e)(4)(B) of the Internal Revenue Code of 1986 is amended to read as follows: “(B) Emergence.— “(i) In general.—A plan in critical status shall remain in such status until a plan year for which the plan actuary certifies, in accordance with subsection (b)(3)(A), that— “(I) the plan is not described in one or more of the subparagraphs in subsection (b)(2) as of the beginning of the plan year, “(II) the plan is not projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 431(d)(2) or section 412(e) (as in effect prior to the enactment of the Pension Protection Act of 2006), and “(III) the plan is not projected to become insolvent within the meaning of section 418E for any of the 30 succeeding plan years. “(ii) Plans with certain amortization extensions.— “(I) Special emergence rule.—Notwithstanding clause (i), a plan in critical status that has an automatic extension of amortization periods under section 431(d)(1) shall no longer be in critical status if the plan actuary certifies for a plan year, in accordance with subsection (b)(3)(A), that— “(aa) the plan is not projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 431(d)(1), and “(bb) the plan is not projected to become insolvent within the meaning of section 418E for any of the 30 succeeding plan years, regardless of whether the plan is described in one or more of the subparagraphs in subsection (b)(2) as of the beginning of the plan year. “(II) Reentry into critical status.—A plan that emerges from critical status under subclause (I) shall not reenter critical status for any subsequent plan year unless— “(aa) the plan is projected to have an accumulated funding deficiency for the plan year or any of the 9 succeeding plan years, without regard to the use of the shortfall method but taking into account any extension of amortization periods under section 431(d), or “(bb) the plan is projected to become insolvent within the meaning of section 418E for any of the 30 succeeding plan years.” . (c) [26 U.S.C. 432 note] Effective Date.—The amendments made by this section shall apply with respect to plan years beginning after December 31, 2014.