Page:United States Statutes at Large Volume 110 Part 3.djvu/79

 PUBLIC LAW 104-188—AUG. 20, 1996 110 STAT. 1809 regard to the limitation of its application to profit-sharing or stock bonus plans).". (b) PUBLIC UTILITY DISTRICTS. —Clause (i) of section 401(k)(7)(B) (defining rural cooperative) is amended to read as follows: "(i) any organization which— "(I) is engaged primarily in providing electric service on a mutual or cooperative basis, or "(11) is engaged primarily in providing electric service to the public in its area of service and which is exempt from tax under this subtitle or which is a State or local government (or an agency or instrumentality thereof), other than a municipality (or an agency or instrumentality thereof),". (c) EFFECTIVE DATES.— 26 USC 40i note. (1) DISTRIBUTIONS.— The amendments made by subsection (a) shall apply to distributions after the date of the enactment of this Act. (2) PUBLIC UTILITY DISTRICTS.—The amendments made by subsection (b) shall apply to plan years beginning after December 31, 1996. SEC. 1444. TREATMENT OF GOVERNMENTAL PLANS UNDER SECTION 415. (a) COMPENSATION LIMIT.— Subsection (b) of section 415 is amended by adding immediately after paragraph (10) the following new paragraph: " (11) SPECIAL LIMITATION RULE FOR GOVERNMENTAL PLANS.— In the case of a governmental plan (as defined in section 414(d)), subparagraph (B) of paragraph (1) shall not apply.". (b) TREATMENT OF CERTAIN EXCESS BENEFIT PLANS.— (1) IN GENERAL.— Section 415 is amended by adding at the end the following new subsection: "(m) TREATMENT OF QUALIFIED GOVERNMENTAL EXCESS BENE- FIT ARRANGEMENTS.— "(1) GOVERNMENTAL PLAN NOT AFFECTED.—In determining whether a governmental plan (as defined in section 414(d)) meets the requirements of this section, benefits provided under a qualified governmental excess benefit arrangement shall not be taken into account. Income accruing to a governmental plan (or to a trust that is maintained solely for the purpose of providing benefits under a qualified governmental excess benefit arrangement) in respect of a qualified governmental excess benefit arrangement shall constitute income derived from the exercise of an essential governmental function upon which such governmental plan (or trust) shall be exempt from tax under section 115. "(2) TAXATION OF PARTICIPANT. —For purposes of this chapter— "(A) the taxable year or years for which amounts in respect of a qualified governmental excess benefit arrangement are includible in gross income by a participant, and "(B) the treatment of such amounts when so includible by the participant, shall be determined as if such qualified governmental excess benefit arrangement were treated as a plan for the deferral of compensation which is maintained by a corporation not

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