Butch Lewis Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2254 To amend the Internal Revenue Code of 1986 to create a Pension Rehabilita- tion Trust Fund, to establish a Pension Rehabilitation Administration within the Department of the Treasury to make loans to multiemployer defined benefit plans, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 24, 2019 Mr. BROWN (for himself, Ms. BALDWIN, Mr. BLUMENTHAL, Mr. BOOKER, Mr. CASEY, Ms. DUCKWORTH, Mr. DURBIN, Ms. HARRIS, Ms. HASSAN, Mr. HEINRICH, Ms. HIRONO, Mr. JONES, Mr. KAINE, Ms. KLOBUCHAR, Mr. MANCHIN, Mr. MARKEY, Mr. MERKLEY, Mr. PETERS, Ms. ROSEN, Mr. SANDERS, Mr. SCHUMER, Mrs. SHAHEEN, Ms. SMITH, Ms. STABENOW, Mr. VAN HOLLEN, Ms. WARREN, and Mr. WHITEHOUSE) introduced the following bill; which was read twice and referred to the Committee on Fi- nance A BILL To amend the Internal Revenue Code of 1986 to create a Pension Rehabilitation Trust Fund, to establish a Pen- sion Rehabilitation Administration within the Depart- ment of the Treasury to make loans to multiemployer defined benefit plans, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 2 •S 2254 IS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Butch Lewis Act of 2 2019’’. 3 SEC. 2. PENSION REHABILITATION ADMINISTRATION; ES- 4 TABLISHMENT; POWERS. 5 (a) ESTABLISHMENT.—There is established in the 6 Department of the Treasury an agency to be known as 7 the ‘‘Pension Rehabilitation Administration’’. 8 (b) DIRECTOR.— 9 (1) ESTABLISHMENT OF POSITION.—There 10 shall be at the head of the Pension Rehabilitation 11 Administration a Director, who shall be appointed 12 by the President. 13 (2) TERM.— 14 (A) IN GENERAL.—The term of office of 15 the Director shall be 5 years. 16 (B) SERVICE UNTIL APPOINTMENT OF 17 SUCCESSOR.—An individual serving as Director 18 at the expiration of a term may continue to 19 serve until a successor is appointed. 20 (3) POWERS.— 21 (A) APPOINTMENT OF DEPUTY DIREC- 22 TORS, OFFICERS, AND EMPLOYEES.—The Di- 23 rector may appoint Deputy Directors, officers, 24 and employees, including attorneys, in accord- 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 3 •S 2254 IS ance with chapter 51 and subchapter III of 1 chapter 53 of title 5, United States Code. 2 (B) CONTRACTING.— 3 (i) IN GENERAL.—The Director may 4 contract for financial and administrative 5 services (including those related to budget 6 and accounting, financial reporting, per- 7 sonnel, and procurement) with the General 8 Services Administration, or such other 9 Federal agency as the Director determines 10 appropriate, for which payment shall be 11 made in advance, or by reimbursement, 12 from funds of the Pension Rehabilitation 13 Administration in such amounts as may be 14 agreed upon by the Director and the head 15 of the Federal agency providing the serv- 16 ices. 17 (ii) SUBJECT TO APPROPRIATIONS.— 18 Contract authority under clause (i) shall be 19 effective for any fiscal year only to the ex- 20 tent that appropriations are available for 21 that purpose. 22 (c) TRANSFER OF FUNDS.—The Secretary of the 23 Treasury may transfer for any fiscal year, from unobli- 24 gated amounts appropriated to the Department of the 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 4 •S 2254 IS Treasury, to the Pension Rehabilitation Administration 1 such sums as may be reasonably necessary for the admin- 2 istrative and operating expenses of the Pension Rehabilita- 3 tion Administration. 4 SEC. 3. PENSION REHABILITATION TRUST FUND. 5 (a) IN GENERAL.—Subchapter A of chapter 98 of the 6 Internal Revenue Code of 1986 is amended by adding at 7 the end the following new section: 8 ‘‘SEC. 9512. PENSION REHABILITATION TRUST FUND. 9 ‘‘(a) CREATION OF TRUST FUND.—There is estab- 10 lished in the Treasury of the United States a trust fund 11 to be known as the ‘Pension Rehabilitation Trust Fund’ 12 (hereafter in this section referred to as the ‘Fund’), con- 13 sisting of such amounts as may be appropriated or cred- 14 ited to the Fund as provided in this section and section 15 9602(b). 16 ‘‘(b) TRANSFERS TO FUND.— 17 ‘‘(1) AMOUNTS ATTRIBUTABLE TO TREASURY 18 BONDS.—There shall be credited to the Fund the 19 amounts transferred under section 6 of the Butch 20 Lewis Act of 2019. 21 ‘‘(2) LOAN INTEREST AND PRINCIPAL.— 22 ‘‘(A) IN GENERAL.—The Director of the 23 Pension Rehabilitation Administration estab- 24 lished under section 2 of the Butch Lewis Act 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 5 •S 2254 IS of 2019 shall deposit in the Fund any amounts 1 received from a plan as payment of interest or 2 principal on a loan under section 4 of such Act. 3 ‘‘(B) INTEREST.—For purposes of sub- 4 paragraph (A), the term ‘interest’ includes 5 points and other similar amounts. 6 ‘‘(3) TRANSFERS FROM SECRETARY.—The Di- 7 rector of the Pension Rehabilitation Administration 8 shall deposit in the Fund any amounts received from 9 the Secretary under section 2(c) of such Act. 10 ‘‘(4) AVAILABILITY OF FUNDS.—Amounts cred- 11 ited to or deposited in the Fund shall remain avail- 12 able until expended. 13 ‘‘(c) EXPENDITURES FROM FUND.—Amounts in the 14 Fund are available without further appropriation to the 15 Pension Rehabilitation Administration— 16 ‘‘(1) for the purpose of making the loans de- 17 scribed in section 4 of the Butch Lewis Act of 2019, 18 ‘‘(2) for the payment of principal and interest 19 on obligations issued under section 6 of such Act, 20 and 21 ‘‘(3) for administrative and operating expenses 22 of such Administration.’’. 23 (b) CLERICAL AMENDMENT.—The table of sections 24 for subchapter A of chapter 98 of the Internal Revenue 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 6 •S 2254 IS Code of 1986 is amended by adding at the end the fol- 1 lowing new item: 2 ‘‘Sec. 9512. Pension Rehabilitation Trust Fund.’’. SEC. 4. LOAN PROGRAM FOR MULTIEMPLOYER DEFINED 3 BENEFIT PLANS. 4 (a) LOAN AUTHORITY.— 5 (1) IN GENERAL.—The Pension Rehabilitation 6 Administration established under section 2 is au- 7 thorized— 8 (A) to make loans to multiemployer plans 9 (as defined in section 414(f) of the Internal 10 Revenue Code of 1986) which are defined ben- 11 efit plans (as defined in section 414(j) of such 12 Code) and which— 13 (i) are in critical and declining status 14 (within the meaning of section 432(b)(6) 15 of such Code and section 305(b)(6) of such 16 Act) as of the date of the enactment of 17 this Act, or with respect to which a sus- 18 pension of benefits has been approved 19 under section 432(e)(9) of such Code and 20 section 305(e)(9) of such Act as of such 21 date; 22 (ii) as of such date of enactment, are 23 in critical status (within the meaning of 24 section 432(b)(2) of such Code and section 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 7 •S 2254 IS 305(b)(2) of such Act), have a funded per- 1 centage of less than 40 percent (as deter- 2 mined for purposes of section 432 of such 3 Code and section 305 of such Act), and 4 have a ratio of active to inactive partici- 5 pants which is less than 2 to 3; or 6 (iii) are insolvent for purposes of sec- 7 tion 418E of such Code as of such date of 8 enactment, if they became insolvent after 9 December 16, 2014, and have not been 10 terminated; and 11 (B) subject to subsection (b), to establish 12 appropriate terms for such loans. 13 (2) CONSULTATION.—The Director of the Pen- 14 sion Rehabilitation Administration shall consult with 15 the Secretary of the Treasury, the Secretary of 16 Labor, and the Director of the Pension Benefit 17 Guaranty Corporation before making any loan under 18 paragraph (1), and shall share with such persons the 19 application and plan information with respect to 20 each such loan. 21 (3) ESTABLISHMENT OF LOAN PROGRAM.— 22 (A) IN GENERAL.—A program to make the 23 loans authorized under this section shall be es- 24 tablished not later than September 30, 2019, 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 8 •S 2254 IS with guidance regarding such program to be 1 promulgated by the Director of the Pension Re- 2 habilitation Administration, in consultation with 3 the Pension Benefit Guaranty Corporation and 4 the Department of Labor, not later than De- 5 cember 31, 2019. 6 (B) LOANS AUTHORIZED BEFORE PRO- 7 GRAM DATE.—Without regard to whether the 8 program under subparagraph (A) has been es- 9 tablished, a plan may apply for a loan under 10 this section before either date described in such 11 subparagraph, and the Pension Rehabilitation 12 Administration shall approve the application 13 and make the loan before establishment of the 14 program if necessary to avoid any suspension of 15 the accrued benefits of participants. 16 (b) LOAN TERMS.— 17 (1) IN GENERAL.—The terms of any loan made 18 under subsection (a) shall state that— 19 (A) the plan shall make payments of inter- 20 est on the loan for a period of 29 years begin- 21 ning on the date of the loan (or 19 years in the 22 case of a plan making the election under sub- 23 section (c)(5)); 24 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 9 •S 2254 IS (B) final payment of interest and principal 1 shall be due in the 30th year after the date of 2 the loan (except as provided in an election 3 under subsection (c)(5)); and 4 (C) as a condition of the loan, the plan 5 sponsor stipulates that— 6 (i) except as provided in clause (ii), 7 the plan will not increase benefits, allow 8 any employer participating in the plan to 9 reduce its contributions, or accept any col- 10 lective bargaining agreement which pro- 11 vides for reduced contribution rates, dur- 12 ing the 30-year period described in sub- 13 paragraphs (A) and (B); 14 (ii) in the case of a plan with respect 15 to which a suspension of benefits has been 16 approved under section 432(e)(9) of the 17 Internal Revenue Code of 1986 and section 18 305(e)(9) of the Employee Retirement In- 19 come Security Act of 1974, or under sec- 20 tion 418E of such Code, before the loan, 21 the plan will reinstate the suspended bene- 22 fits (or will not carry out any suspension 23 which has been approved but not yet im- 24 plemented); 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 10 •S 2254 IS (iii) the plan sponsor will comply with 1 the requirements of section 6059A of the 2 Internal Revenue Code of 1986; 3 (iv) the plan will continue to pay all 4 premiums due under section 4007 of the 5 Employee Retirement Income Security Act 6 of 1974; and 7 (v) the plan and plan administrator 8 will meet such other requirements as the 9 Director of the Pension Rehabilitation Ad- 10 ministration provides in the loan terms. 11 The terms of the loan shall not make reference 12 to whether the plan is receiving financial assist- 13 ance under section 4261(d) of the Employee 14 Retirement Income Security Act of 1974 (29 15 U.S.C. 1431(d)) or to any adjustment of the 16 loan amount under subsection (d)(2)(A)(ii). 17 (2) INTEREST RATE.—Except as provided in 18 the second sentence of this paragraph and sub- 19 section (c)(5), loans made under subsection (a) shall 20 have as low an interest rate as is feasible. Such rate 21 shall be determined by the Pension Rehabilitation 22 Administration and shall— 23 (A) not be lower than the rate of interest 24 on 30-year Treasury securities on the first day 25 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 11 •S 2254 IS of the calendar year in which the loan is issued; 1 and 2 (B) not exceed the greater of— 3 (i) a rate .2 percent higher than such 4 rate of interest on such date; or 5 (ii) the rate necessary to collect reve- 6 nues sufficient to administer the program 7 under this section. 8 (c) LOAN APPLICATION.— 9 (1) IN GENERAL.—In applying for a loan under 10 subsection (a), the plan sponsor shall— 11 (A) demonstrate that, except as provided 12 in subparagraph (C)— 13 (i) the loan will enable the plan to 14 avoid insolvency for at least the 30-year 15 period described in subparagraphs (A) and 16 (B) of subsection (b)(1) or, in the case of 17 a plan which is already insolvent, to 18 emerge from insolvency within and avoid 19 insolvency for the remainder of such pe- 20 riod; and 21 (ii) the plan is reasonably expected to 22 be able to pay benefits and the interest on 23 the loan during such period and to accu- 24 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 12 •S 2254 IS mulate sufficient funds to repay the prin- 1 cipal when due; 2 (B) provide the plan’s most recently filed 3 Form 5500 as of the date of application and 4 any other information necessary to determine 5 the loan amount under subsection (d); 6 (C) stipulate whether the plan is also ap- 7 plying for financial assistance under section 8 4261(d) of the Employee Retirement Income 9 Security Act of 1974 (29 U.S.C. 1431(d)) in 10 combination with the loan to enable the plan to 11 avoid insolvency and to pay benefits, or is al- 12 ready receiving such financial assistance as a 13 result of a previous application; 14 (D) state in what manner the loan pro- 15 ceeds will be invested pursuant to subsection 16 (d), the person from whom any annuity con- 17 tracts under such subsection will be purchased, 18 and the person who will be the investment man- 19 ager for any portfolio implemented under such 20 subsection; and 21 (E) include such other information and 22 certifications as the Director of the Pension Re- 23 habilitation Administration shall require. 24 VerDate Sep 11 2014 00:49 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2254.IS S2254 kjohnson on DSK79L0C42 with BILLS 13 •S 2254 IS (2) STANDARD FOR ACCEPTIN [Text truncated for display. 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