< Back to S. 2523 (103rd Congress, 1993–1994)

Text of A bill to amend the Internal Revenue Code of 1986 to permit certain foreign pension plans to invest in the ...

...invest in the United States on a nontaxable basis.

This bill was introduced on October 6, 1994, in a previous session of Congress, but was not enacted. The text of the bill below is as of Oct 6, 1994 (Introduced).

Source: GPO

S 2523 IS

103d CONGRESS

2d Session

S. 2523

To amend the Internal Revenue Code of 1986 to permit certain foreign pension plans to invest in the United States on a nontaxable basis.

IN THE SENATE OF THE UNITED STATES

October 6 (legislative day, SEPTEMBER 12), 1994

Mr. WALLOP introduced the following bill; which was read twice and referred to the Committee on Finance


A BILL

To amend the Internal Revenue Code of 1986 to permit certain foreign pension plans to invest in the United States on a nontaxable basis.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. TAX EXEMPTION FOR CERTAIN FOREIGN PENSION PLANS INVESTING IN THE UNITED STATES.

    (a) IN GENERAL- Section 501(c) of the Internal Revenue Code of 1986 (relating to organizations exempt from tax under section 501(a)) is amended by adding at the end the following new paragraph:

      ‘(26)(A) Except as provided in subparagraph (B), a trust, corporation, or fund which is formed pursuant to, or as part of, a foreign pension plan--

        ‘(i) which is described in section 3(2) of the Employee Retirement Income Security Act (29 U.S.C. 1002(2));

        ‘(ii) the assets of which are segregated from the assets of the employer or employers maintaining the plan pursuant to the laws of the foreign country in which such plan is maintained;

        ‘(iii) the income of which is, under the laws of the foreign country in which the plan is maintained, exempt from tax or is subject to a lower rate of taxation than is generally imposed on other residents of such foreign country; and

        ‘(iv) which provides benefits to a broad classification of employees, not merely highly compensated employees or owners.

      If all of the assets of a trust, corporation, or fund are held for the benefit of one or more foreign pension plans described in this subparagraph, such trust, corporation, or fund shall be treated as described in this subparagraph.

      ‘(B) The exemption provided by this paragraph shall be subject to adjustment under section 896 (relating to the adjustment of tax of nationals of foreign countries). The President shall, no later than January 1, 1996, report to Congress on the extent to which the President has exercised the authority under that section with respect to relief from foreign income taxes for plans described in section 401(a).’

    (b) CONFORMING AMENDMENTS- (1) Section 512(a)(2) of the Internal Revenue Code of 1986 (relating to the unrelated business taxable income of certain foreign organizations) is amended by inserting ‘or section 501(c)(26)’ after ‘section 511’.

    (2) Clause (ii) of section 514(c)(9)(C) of such Code (relating to unrelated debt-financed income of qualified trusts) is amended by inserting ‘or any foreign pension plan described in section 501(c)(26)’ after ‘section 401’.

    (3) Section 818(a) of such Code (relating to pension plan contracts of life insurance companies) is amended by striking ‘or’ at the end of paragraph (5), by striking the period at the end of paragraph (6) and inserting ‘; or’, and by adding at the end the following new paragraph:

      ‘(7) entered into with trusts, corporations, or funds which are formed pursuant to, or as part of, a foreign pension plan described in section 501(c)(26).’

    (c) EFFECTIVE DATE- The amendments made by this section shall take effect on January 1, 1995.