Page:United States Statutes at Large Volume 102 Part 4.djvu/517

 PUBLIC LAW 100-647—NdV. 10, 1988 "(6)

102 STAT. 3487

CERTAIN PLANS MAINTAINED BY EDUCATIONAL INSTITU-

TIONS.—If an educational organization described in section 170(b)(l)(A)(ii) of the Internal Revenue Code of 1986 makes an election under this paragraph with respect to a plan described in section 125(c)(2)(C) of such Code, the amendments made by this section shall apply with respect to such plan for plan years b a n n i n g after the date of the enactment of this Act. (27XA) Section 4976 of the 1986 Code is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: "(c) TAX ON FUNDED WELFARE BENEFIT FUNDS WHICH INCLUDE DISCRIMINATORY EMPLOYEE BENEFIT PLAN.— "(1) IN GENERAL.—If—

"(A) an employer maintains a welfare benefit fund, and "(6) a discnminatory employee benefit plan (within the meaning of section 89) is part of such fund for any plan year, there is hereby imposed on such employer for the taxable year with or within which the plan year ends a tax in the amount determined under paragraph (2). "(2) AMOUNT OF TAX.—The amount of the tax under paragraph (1) shall be equal to the excess (if any) of— "(A) the product of the highest rate of tax imposed by section 11, multiplied by the lesser of— "(i) the aggregate excess benefits (as defined in section 89) for such plan year, or "(ii) the taxable income of the fund for such plan year, over "(B) the amount of tax imposed by chapter 1 on such fund for such plan year." (B) Section 4976(b) of the 1986 (Dode is amended by adding at the end thereof the following new paragraph: "(5) LIMITATION IN CASE OF BENEFITS TO WHICH SECTION 89

APPLIES.—If section 89 applies to any post-retirement medical benefit or life insurance benefit provided by a fund, the amount of the disqualified benefit under paragraph (1)(B) with respect to such benefit shall not exceed the aggregate excess benefits provided by the plan (as determined under section 89)." (C) Section 505(a)(l) of the 1986 Code is amended by adding at the end thereof the following new subsection: "This paragraph shall not apply to any organization by reason of a failure to meet the requirements of subsection (b) with respect to a benefit to which section 89 applies." (28) Section 89(h)(4) of the 1986 Code is amended by striking out "subsection (h)(5)" and inserting in lieu thereof "subsection (g)(5)". (29) Section 89(k)(l) of the 1986 Code is amended by striking out the last sentence and inserting in lieu thereof the following new sentences: "Such inclusion shall be coordinated (under regulations prescribed by the Secretary) with any inclusion under subsection (a) with respect to such plan. In the case of a statutory employee benefit plan described in subsection (i)(l)(B), any amount required to be included in gross income under this subsection shall be included in the gross income of the beneficiary." (30) Section 129(d)(l)(B) of the 1986 Code is amended by striking out "(6)" and inserting in lieu thereof "(7)".

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