HR 3987
110th CONGRESS
1st Session
H. R. 3987
To provide emergency tax relief for persons affected by California
wildfires in October of 2007.
IN THE HOUSE OF REPRESENTATIVES
October 29, 2007
Mr. BACA (for himself, Mrs. NAPOLITANO, Ms. HARMAN, Mr. CUELLAR, Mr.
FORTUN.AE6O, Mr. FILNER, Mr. AL GREEN of Texas, and Mr. NUNES) introduced
the following bill; which was referred to the Committee on Ways and Means
A BILL
To provide emergency tax relief for persons affected by California
wildfires in October of 2007.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `California Wildfire Tax Relief Act of 2007'.
SEC. 2. FINDINGS.
Congress finds the following:
(1) On October 21, 2007, and the days that followed, wildfires exploded
in San Bernardino, Riverside, San Diego, Los Angeles, Ventura, Santa
Barbara, and Orange Counties.
(2) More than 753 square miles of land were consumed by the relentless
flames that were further ignited by Santa Ana winds.
(3) 2,205 structures were destroyed.
(4) 14 lives were lost and more than 600 people were injured.
(5) The projected damages of property exceed $1,000,000,000.
(6) The President declared portions of California a natural disaster
area and the Governor of California declared a state of emergency.
TITLE I--GENERAL TAX RELIEF PROVISIONS RELATED TO CALIFORNIA WILDFIRES
OF OCTOBER 2007
SEC. 101. EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION OF GAIN
RELATED TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
Clause (i) of section 1033(a)(2)(B) of the Internal Revenue Code of 1986
shall be applied by substituting `5 years' for `2 years' with respect
to property which--
(1) is located in an area determined by the President to warrant individual
or individual and public assistance from the Federal Government under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act
by reason of the wildfires which burned in California during October
2007, and
(2) is compulsorily or involuntarily converted as a result of such wildfire,
but only if substantially all of the use of the replacement property is
located in any such area.
SEC. 102. SUSPENSION OF LIMITATIONS ON CHARITABLE CONTRIBUTIONS FOR
RELIEF EFFORTS RELATED TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
(a) In General- Except as otherwise provided in subsection (b), qualified
disaster contributions shall not be taken into account for purposes of
subsections (b) and (d) of section 170 of the Internal Revenue Code of
1986.
(b) Treatment of Excess Contributions- For purposes of section 170 of
such Code--
(1) INDIVIDUALS- In the case of an individual--
(A) LIMITATION- Any qualified disaster contribution shall be allowed
only to the extent that the aggregate of such contributions does not
exceed the excess of the taxpayer's contribution base (as defined
in paragraph (1) of section 170(b) of such Code) over the amount of
all other charitable contributions allowed under such paragraph.
(B) CARRYOVER- If the aggregate amount of qualified disaster contributions
made in the contribution year (within the meaning of section 170(d)(1)
of such Code) exceeds the limitation of subparagraph (A), such excess
shall be added to the excess described in the portion of subparagraph
(A) of such section which precedes clause (i) thereof for purposes
of applying such section.
(2) CORPORATIONS- In the case of a corporation--
(A) LIMITATION- Any qualified disaster contribution shall be allowed
only to the extent that the aggregate of such contributions does not
exceed the excess of the taxpayer's taxable income (as determined
under paragraph (2) of section 170(b) of such Code) over the amount
of all other charitable contributions allowed under such paragraph.
(B) CARRYOVER- Rules similar to the rules of paragraph (1)(B) shall
apply for purposes of this paragraph.
(c) Exception to Overall Limitation on Itemized Deductions- So much of
any deduction allowed under section 170 of such Code as does not exceed
the qualified disaster contributions made during the taxable year shall
not be treated as an itemized deduction for purposes of section 68 of
such Code.
(d) Qualified Disaster Contributions- For purposes of this section, the
term `qualified disaster contribution' means any charitable contribution
(as defined in section 170(c) of such Code)--
(1) made during the period beginning on October 21, 2007, and ending
on January 1, 2008, in cash to an organization described in section
170(b)(1)(A) of such Code (other than an organization described in section
509(a)(3) of such Code) for relief efforts related to the wildfires
which burned in California during October 2007, and
(2) with respect to which the taxpayer has elected the application of
this section.
In the case of a partnership or S corporation, the election under paragraph
(2) shall be made separately by each partner or shareholder.
SEC. 103. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS RELATED
TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
(a) In General- For purposes of the Internal Revenue Code of 1986, gross
income shall not include any amount which (but for this section) would
be includible in gross income by reason of the discharge (in whole or
in part) of qualified nonbusiness debt of a qualified individual by an
applicable entity (as defined in section 6050P(c)).
(b) Qualified Nonbusiness Debt- For purposes of this section, the term
`qualified nonbusiness debt' means any indebtedness other than indebtedness
incurred in connection with a trade or business.
(c) Qualified Individual- For purposes of this section, the term `qualified
individual' means any natural person who was a resident (as of October
20, 2007) of, or who owned real property (as of the date of such discharge)
in, any area which is determined by the President to warrant individual
or individual and public assistance from the Federal Government under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act by
reason of the wildfires which burned in California during October 2007.
(d) Exception for Real Property Outside Disaster Area- Subsection (a)
shall not apply to any discharge of indebtedness to the extent that real
property constituting security for such indebtedness is located outside
of the area described in subsection (c).
(e) Denial of Double Benefit- The amount excluded from gross income under
subsection (a) shall be applied to reduce the tax attributes of the taxpayer
as provided in section 108(b) of the Internal Revenue Code of 1986.
(f) Application- This section shall not apply to discharges after December
31, 2008.
SEC. 104. SPECIAL RULES RELATED TO CALIFORNIA WILDFIRES OF OCTOBER 2007
FOR MORTGAGE REVENUE BONDS.
(a) In General- In the case of financing provided with respect to a qualified
California Wildfires of October 2007 recovery residence, subsection (d)
of section 143 of the Internal Revenue Code of 1986 shall be applied as
if such residence were a targeted area residence.
(b) Qualified California Wildfires of October 2007 Recovery Residence-
For purposes of this section, the term `qualified California Wildfires
of October 2007 recovery residence' means any residence if such residence
is located in an area which is determined by the President to warrant
individual or individual and public assistance from the Federal Government
under the Robert T. Stafford Disaster Relief and Emergency Assistance
Act by reason of the wildfires which burned in California during October
2007.
(c) Application- Subsection (a) shall not apply to financing provided
after December 31, 2009.
SEC. 105. SUSPENSION OF CERTAIN LIMITATIONS ON PERSONAL CASUALTY LOSSES
RELATED TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
Paragraphs (1) and (2)(A) of section 165(h) of the Internal Revenue Code
of 1986 shall not apply to losses described in section 165(c)(3) of such
Code which are attributable to the wildfires which burned in California
during October 2007. In the case of any other losses, section 165(h)(2)(A)
of such Code shall be applied without regard to the losses referred to
in the preceding sentence.
SEC. 106. ADDITIONAL EXEMPTION FOR HOUSING DISPLACED INDIVIDUALS OF
CALIFORNIA WILDFIRES OF OCTOBER 2007.
(a) In General- In the case of taxable years of a natural person beginning
in 2007 and 2008, for purposes of the Internal Revenue Code of 1986, taxable
income shall be reduced by $500 for each California Wildfires of October
2007 displaced individual of the taxpayer for the taxable year.
(1) DOLLAR LIMITATION- The reduction under subsection (a) shall not
exceed $2,000, reduced by the amount of the reduction under this section
for all previous taxable years.
(2) INDIVIDUALS TAKEN INTO ACCOUNT ONLY ONCE- An individual shall not
be taken into account under subsection (a) if such individual was taken
into account under such subsection by the taxpayer in any prior taxable
year.
(c) California Wildfires of October 2007 Displaced Individual- For purposes
of this subsection, the term `displaced individual from California Wildfires
of October 2007' means, with respect to any taxpayer for any taxable year,
a natural person who--
(1) was (as of October 20, 2007) a resident of any area which is determined
by the President to warrant individual or individual and public assistance
from the Federal Government under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act by reason of the wildfires which burned
in California during October 2007,
(2) is displaced from the person's residence located in the area described
in paragraph (1), and
(3) is provided housing free of charge by the taxpayer in the principal
residence of the taxpayer for a period of 60 consecutive days which
ends in such taxable year.
Such term shall not include the spouse or any dependent of the taxpayer.
SEC. 107. SPECIAL RULE RELATED TO CALIFORNIA WILDFIRES OF OCTOBER 2007
FOR DETERMINING EARNED INCOME.
(a) In General- In the case of a qualified individual, if the earned income
of the taxpayer for the taxable year of such taxpayer which includes October
21, 2007, is less than the earned income which is attributable to the
taxpayer for the preceding taxable year, the credits allowed under sections
24(d) and 32 of the Internal Revenue Code of 1986 may, at the election
of the taxpayer, be determined by substituting--
(1) such earned income for the preceding taxable year, for
(2) such earned income for the taxable year which includes October 21,
2007.
(b) Qualified Individual- For purposes of this section, the term `qualified
individual' means any individual who was (as of October 21, 2007) a resident
of any area which is determined by the President to warrant individual
or individual and public assistance from the Federal Government under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act by
reason of the wildfires which burned in California during October 2007.
(c) Earned Income- For purposes of this section, the term `earned income'
has the meaning given such term under section 32(c) of such Code.
(1) APPLICATION TO JOINT RETURNS- For purpose of subsection (a), in
the case of a joint return for a taxable year which includes October
21, 2007--
(A) such subsection shall apply if either spouse is a qualified individual,
(B) the earned income which is attributable to the taxpayer for the
preceding taxable year shall be the sum of the earned income which
is attributable to each spouse for such preceding taxable year, and
(C) the substitution described in such subsection shall apply only
with respect to earned income which is attributable to a spouse who
is a qualified individual.
(2) UNIFORM APPLICATION OF ELECTION- Any election made under subsection
(a) shall apply with respect to both section 24(d) and section 32 of
such Code.
(3) ERRORS TREATED AS MATHEMATICAL ERROR- For purposes of section 6213
of such Code, an incorrect use on a return of earned income pursuant
to subsection (a) shall be treated as a mathematical or clerical error.
(4) NO EFFECT ON DETERMINATION OF GROSS INCOME- For purposes of the
Internal Revenue Code of 1986, gross income shall be determined without
regard to any substitution under subsection (a).
SEC. 108. SECRETARIAL AUTHORITY TO MAKE ADJUSTMENTS REGARDING TAXPAYER
AND DEPENDENCY STATUS RELATED TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
With respect to taxable years beginning in 2007 or 2008, the Secretary
of the Treasury, or his delegate, may make such adjustments in the application
of the internal revenue laws as may be necessary to ensure that taxpayers
do not lose dependency exemptions or child credits or experience a change
of filing status by reason of temporary relocations after the wildfires
which burned in California during October 2007 or by reason of the receipt
of wildfire relief. Any adjustments made under the preceding sentence
shall ensure that an individual is not taken into account by more than
one taxpayer with respect to the same tax benefit.
TITLE II--PENALTY FREE USE OF RETIREMENT FUNDS RELATED TO CALIFORNIA
WILDFIRES OF OCTOBER 2007
SEC. 201. PENALTY FREE WITHDRAWALS FROM RETIREMENT PLANS RELATED TO
CALIFORNIA WILDFIRES OF OCTOBER 2007.
(a) In General- Paragraph (2) of section 72(t) of the Internal Revenue
Code of 1986 (relating to 10-percent additional tax on early distributions
from qualified retirement plans) is amended by adding at the end the following
new subparagraph:
`(H) DISTRIBUTIONS FROM RETIREMENT PLANS UPON FEDERAL DECLARATION
OF NATURAL DISASTER-
`(i) IN GENERAL- Any qualified disaster-relief distribution.
`(ii) AGGREGATE LIMITATION- The aggregate amount of payments or
distributions received by an individual which may be treated as
qualified disaster-relief distributions for any taxable year shall
not exceed the excess (if any) of--
`(II) the aggregate amounts treated as qualified disaster-relief
distributions with respect to such individual for all prior taxable
years.
`(iii) AMOUNT DISTRIBUTED MAY BE REPAID-
`(I) IN GENERAL- Any individual who receives a qualified disaster-relief
distribution may, at any time during the 3-year period beginning
on the day after the date on which such distribution was made,
make one or more contributions in an aggregate amount not to exceed
the amount of such distribution to an eligible retirement plan
(as defined in section 402(c)(8)(B)) of which such individual
is a beneficiary and to which a rollover contribution of such
distribution could be made under section 402(c), 403(a)(4), 403(b)(8),
or 408(d)(3), as the case may be.
`(II) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM ELIGIBLE
RETIREMENT PLANS OTHER THAN IRAS- For purposes of this title,
if a contribution is made pursuant to subclause (I) with respect
to a qualified disaster-relief distribution from an eligible retirement
plan (as so defined) other than an individual retirement plan,
then the taxpayer shall, to the extent of the amount of the contribution,
be treated as having received the qualified disaster-relief distribution
in an eligible rollover distribution (as defined in section 402(c)(4))
and as having transferred the amount to the eligible retirement
plan in a direct trustee to trustee transfer within 60 days of
the distribution.
`(III) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM IRAS- For
purposes of this title, if a contribution is made pursuant to
subclause (I) with respect to a qualified disaster-relief distribution
from an individual retirement plan, then, to the extent of the
amount of the contribution, the qualified disaster-relief distribution
shall be treated as a distribution described in section 408(d)(3)
and as having been transferred to the eligible retirement plan
in a direct trustee to trustee transfer within 60 days of the
distribution.
`(IV) APPLICATION TO GOVERNMENTAL SECTION 457 PLANS- In determining
whether any distribution is a qualified disaster-relief distribution
for purposes of this clause, an eligible deferred compensation
plan (as defined in section 457(b)) maintained by an employer
described in section 457(e)(1)(A) shall be treated as a qualified
retirement plan.
`(iv) QUALIFIED DISASTER-RELIEF DISTRIBUTION- For purposes of this
subparagraph, the term `qualified disaster-relief distribution'
means any distribution--
`(I) to an individual who has sustained a loss as a result of
a major disaster declared under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act by reason of the
wildfires which burned in California during October 2007 and who
has a principal place of abode immediately before the declaration
in a qualified disaster area, and
`(II) which is made during the 1-year period beginning on the
date such declaration is made.
`(v) QUALIFIED DISASTER AREA- For purposes of this subparagraph,
the term `qualified disaster area' means any area which is determined
by the President to warrant individual or individual and public
assistance from the Federal Government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act by reason of the wildfires
which burned in California during October 2007.'.
(b) Exemption of Distributions From Trustee to Trustee Transfer and Withholding
Rules- Paragraph (4) of section 402(c) of such Code (relating to eligible
rollover distribution) is amended by striking `and' at the end of subparagraph
(B), by striking the period at the end of subparagraph (C) and inserting
`, and', and by inserting at the end the following new subparagraph:
`(D) any qualified disaster-relief distribution (within the meaning
of section 72(t)(2)(G)).'.
(c) Conforming Amendments-
(1) Section 401(k)(2)(B)(i) of such Code is amended by striking `or'
at the end of subclause (IV), by striking `and' at the end of subclause
(V) and inserting `or', and by inserting after subclause (V) the following
new subclause:
`(VI) the date on which a period referred to in section 72(t)(2)(H)(iii)(II)
begins (but only to the extent provided in section 72(t)(2)(H)), and'.
(2) Section 403(b)(7)(A)(ii) of such Code is amended by inserting `sustains
a loss as a result of a major disaster declared under section 401 of
the Robert T. Stafford Disaster Relief and Emergency Assistance Act
by reason of California Wildfires of October 2007 (but only to the extent
provided in section 72(t)(2)(H)),' before `or'.
(3) Section 403(b)(11) of such Code is amended by striking `or' at the
end of subparagraph (B), by striking the period at the end of subparagraph
(C) and inserting `, or', and by inserting after subparagraph (C) the
following new subparagraph:
`(D) for distributions to which section 72(t)(2)(H) applies.'.
(d) Effective Date- The amendments made by this section shall apply to
distributions received after October 21, 2007.
SEC. 202. INCOME AVERAGING FOR DISASTER-RELIEF DISTRIBUTIONS RELATED
TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
(a) In General- In the case of any qualified disaster-relief distribution
(within the meaning of section 72(t)(2)(G) of the Internal Revenue Code
of 1986) from a qualified retirement plan (as defined in section 4974(c)
of such Code) to a qualified individual, unless the taxpayer elects not
to have this section apply for any taxable year, any amount required to
be included in gross income for such taxable year shall be so included
ratably over the 3-taxable year period beginning with such taxable year.
(1) APPLICATION TO GOVERNMENTAL SECTION 457 PLANS- In determining whether
any distribution is a qualified disaster-relief distribution (as so
defined) for purposes of this section, an eligible deferred compensation
plan (as defined in section 457(b) of such Code) maintained by an employer
described in section 457(e)(1)(A) of such Code shall be treated as a
qualified retirement plan (as so defined).
(2) CERTAIN RULES TO APPLY- Rules similar to the rules of subparagraph
(E) of section 408A(d)(3) of such Code shall apply for purposes of this
section.
(c) Qualified Individual- For purposes of this section, the term `qualified
individual' means an individual who has sustained a loss as a result of
the major disaster declared under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170) by reason
of the wildfires which burned in California during October 2007 and who
has a principal place of abode immediately before the declaration in a
California wildfires of October 2007 disaster area.
(d) California Wildfires of October 2007 Disaster Area- For purposes of
this section, the term `California wildfires of October 2007 disaster
area' means any area which is determined by the President to warrant individual
or individual and public assistance from the Federal Government under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act by
reason of the wildfires which burned in California during October 2007.
SEC. 203. RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES CANCELLED
DUE TO CALIFORNIA WILDFIRES OF OCTOBER 2007.
(1) IN GENERAL- Any individual who received a qualified distribution
may, at any time during the 6-month period beginning on the day after
the disaster declaration date, make one or more contributions in an
aggregate amount not to exceed the amount of such qualified distribution
to an eligible retirement plan (as defined in section 402(c)(8)(B) of
the Internal Revenue Code of 1986) of which such individual is a beneficiary
and to which a rollover contribution of such distribution could be made
under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16)
of such Code, as the case may be.
(2) TREATMENT OF REPAYMENTS-
(A) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM ELIGIBLE RETIREMENT
PLANS OTHER THAN IRAS- For purposes of the Internal Revenue Code of
1986, if a contribution is made pursuant to paragraph (1) with respect
to a qualified distribution from an eligible retirement plan (as so
defined) other than an individual retirement plan (as defined in section
7701(a)(37) of such Code), then the taxpayer shall, to the extent
of the amount of the contribution, be treated as having received the
qualified distribution in an eligible rollover distribution (as defined
in section 402(c)(4) of such Code) and as having transferred the amount
to the eligible retirement plan in a direct trustee to trustee transfer
within 60 days of the distribution.
(B) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM IRAS- For purposes
of the Internal Revenue Code of 1986, if a contribution is made pursuant
to paragraph (1) with respect to a qualified distribution from an
individual retirement plan (as so defined), then, to the extent of
the amount of the contribution, the qualified distribution shall be
treated as a distribution described in section 408(d)(3) of such Code
and as having been transferred to the eligible retirement plan (as
so defined) in a direct trustee to trustee transfer within 60 days
of the distribution.
(b) Definitions- For purposes of this section--
(1) QUALIFIED DISTRIBUTION- The term `qualified distribution' means
any distribution--
(A) described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii), 403(b)(11)(B),
457(d)(1)(A)(iii), or 72(t)(2)(F) of the Internal Revenue Code of
1986,
(B) received after February 28, 2007, and before October 21, 2007,
and
(C) which was to be used to purchase or construct a principal residence
in a California wildfires of October 2007 disaster area, but which
was not so purchased or constructed.
(2) DISASTER DECLARATION DATE- The term `disaster declaration date'
means the date on which the President designated the area as a disaster
area by reason of the wildfires which burned in California during October
2007.
(3) CALIFORNIA WILDFIRES OF OCTOBER 2007 DISASTER AREA- The term `California
wildfires of October 2007 disaster area' means any area which is determined
by the President to warrant individual or individual and public assistance
from the Federal Government under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act by reason of the wildfires which burned
in California during October 2007.
SEC. 204. LOANS FROM QUALIFIED PLANS IN CONNECTION WITH CALIFORNIA WILDFIRES
OF OCTOBER 2007.
(a) Increase in Limit on Loans Not Treated as Distributions- In the case
of any loan from a qualified employer plan (as defined under section 72(p)(4)
of the Internal Revenue Code of 1986) to a qualified individual (as defined
in section 202(c)) made after the date of enactment of this Act and before
the date which is 1 year after the disaster declaration date (as defined
in section 203(b)(2))--
(1) clause (i) of section 72(p)(2)(A) of such Code shall be applied
by substituting `$200,000' for `$100,000', and
(2) clause (ii) of such section shall be applied by substituting `the
present value of the nonforfeitable accrued benefit of the employee
under the plan' for `one-half of the present value of the nonforfeitable
accrued benefit of the employee under the plan'.
(b) Delay of Repayment- In the case of a qualified individual (as defined
in section 202(c)) with an outstanding loan on or after October 20, 2007,
from a qualified employer plan (as defined in section 72(p)(4) of the
Internal Revenue Code of 1986)--
(1) if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2)
of such Code for any repayment with respect to such loan occurs during
the period beginning after October 21, 2007, and ending before November
30, 2008, such due date shall be delayed for 1 year,
(2) any subsequent repayments with respect to any such loan shall be
appropriately adjusted to reflect the delay in the due date under paragraph
(1) and any interest accruing during such delay, and
(3) in determining the 5-year period and the term of a loan under subparagraph
(B) or (C) of section 72(p)(2) of such Code, such period shall be disregarded.
SEC. 205. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) In General- If this section applies to any plan or contract amendment--
(1) such plan or contract shall be treated as being operated in accordance
with the terms of the plan during the period described in subsection
(b)(2)(A), and
(2) except as provided by the Secretary of the Treasury, such plan shall
not fail to meet the requirements of section 411(d)(6) of the Internal
Revenue Code of 1986 and section 204(g) of the Employee Retirement Income
Security Act of 1974 by reason of such amendment.
(b) Amendments to Which Section Applies-
(1) IN GENERAL- This section shall apply to any amendment to any plan
or annuity contract which is made--
(A) pursuant to any amendment made by this title, or pursuant to any
regulation issued by the Secretary of the Treasury or the Secretary
of Labor under this title, and
(B) on or before the last day of the first plan year beginning on
or after January 1, 2009, or such later date as the Secretary of the
Treasury may prescribe.
In the case of a governmental plan (as defined in section 414(d) of
the Internal Revenue Code of 1986), subparagraph (B) shall be applied
by substituting the date which is 2 years after the date otherwise applied
under subparagraph (B).
(2) CONDITIONS- This section shall not apply to any amendment unless--
(i) beginning on the date the legislative or regulatory amendment
described in paragraph (1)(A) takes effect (or in the case of a
plan or contract amendment not required by such legislative or regulatory
amendment, the effective date specified by the plan), and
(ii) ending on the date described in paragraph (1)(B) (or, if earlier,
the date the plan or contract amendment is adopted),
the plan or contract is operated as if such plan or contract amendment
were in effect; and
(B) such plan or contract amendment applies retroactively for such
period.
END
