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(2) The monitoring system establishes performance indicators to be used in measuring or assessing the achievement of the performance goals described in paragraph (1). (3) The monitoring system provides a basis for recommendations for adjustments to the assistance to enhance the impact of the assistance. 250. Report
(a) Report
Not later than December 31, 2005, and each December 31 thereafter, the President shall transmit to Congress a report that contains a detailed description of the implementation of this title for the previous fiscal year. (b) Contents
The report shall contain the following information: (1) For each grant,
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cooperative agreement, contract, contribution, or other form of assistance awarded or entered into under this title— (A) the amount of the grant, cooperative agreement, contract, contribution, or other form of assistance, the name of each recipient and each developing country with respect to which projects or activities under the grant, cooperative agreement, contract, contribution, or other form of assistance were carried out, and the approximate number of orphans and other vulnerable children who received assistance under the projects or activities; and (B) the results of the monitoring system with respect to the grant, cooperative agreement, contract, contribution, or other form of assistance.
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(2) For each grant, cooperative agreement, contract, contribution, or other form of assistance awarded or entered into under any provision of law other than this title for assistance for orphans and other vulnerable children in developing countries, the information described in paragraph (1)(A). (3) Any other appropriate information relating to the needs of orphans and other vulnerable children in developing countries that could be addressed through the provision of assistance under this title or under any other provision of law. 251.
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Authorization of appropriations; additional provisions
(a) Authorization of Appropriation
(1) In general
Of the amounts made available to carry out the provisions of law described in paragraph (2), there are authorized to be appropriated to the President to carry out this title such sums as may be necessary for each of the fiscal years 2005 and 2006.
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(2) Provisions of law
The provisions of law referred to in paragraph (1) are the following: (A) The United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( Public Law 108–25 ) and the amendments made by that Act. (B) Any other provision of law under which assistance is authorized for orphans and other vulnerable children in developing countries.
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(b) Additional Provisions
(1) Availability
Amounts appropriated pursuant to the authorization of appropriations under subsection (a) are authorized to remain available until expended and are in addition to amounts otherwise available for such purposes. (2) Minimum funding requirement
Not less than 60 percent of amounts appropriated pursuant to the authorization of appropriations under subsection (a) for a fiscal year (other than amounts made available for assistance to eliminate school fees and other costs of education pursuant to section 246) shall be provided through United States or indigenous private voluntary organizations that implement programs on the community level.
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Amounts provided by for-profit entities to not-for-profit entities from assistance under this title shall not be considered for purposes of satisfying the requirement of this paragraph. (3) Assistance under other provisions of law
(A) In general
Notwithstanding any other provision of law, amounts made available for assistance for orphans or other vulnerable children in developing countries under any provision of law other than this title may be provided to further the purposes of this title.
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(B) Report
To the extent assistance described in subparagraph (A) is provided in accordance with such subparagraph, the President shall include, as part of the report required under section 250, a detailed description of such assistance and, to the extent applicable, the information required by subsection (b)(1)(A) of such section with respect to such assistance. 252. Definitions
In this title: (1) AIDS
The term AIDS has the meaning given the term in section 104A(g)(1) of this Act.
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(2) Children
The term children means persons who have not attained the age of 18. (3) HIV
The term HIV has the meaning given the term in section 104A(g)(2) of this Act. (4) HIV/AIDS
The term HIV/AIDS has the meaning given the term in section 104A(g)(3) of this Act. (5) Orphan
The term orphan means a child deprived by death of one or both parents.
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(6) Vulnerable children
The term ‘vulnerable children’ includes children who are neglected, destitute, abandoned, homeless, disabled, suffering from malnutrition, are sexually exploited or abused, or are displaced or otherwise adversely affected by armed conflict.. 241. Findings; declaration of policy
(a) Findings
Congress finds the following: (1) By 2010, HIV/AIDS will orphan more than 25,000,000 children worldwide.
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(2) Ongoing conflicts and civil wars in developing countries are adversely affecting children in these countries, the vast majority of whom currently do not receive humanitarian assistance or other support from the United States Government.
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(3) Although the United States Government currently administers assistance programs for orphans and other vulnerable children in developing countries, for fiscal year 2002 the United States Agency for International Development reported that the United States Government provided assistance to only 462,000 such orphans and other vulnerable children, or less than one-half of one percent of the estimated 108,000,000 total number of such orphans and other vulnerable children. (4) The United States Government should increase its efforts to provide assistance for orphans and other vulnerable children in developing countries, especially those children affected by HIV/AIDS or conflict.
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(5) The United States Agency for International Development should establish improved capacity to deliver assistance to orphans and other vulnerable children in developing countries through partnerships with private voluntary organizations, including faith-based organizations. (6) Further, the United States Agency for International Development should be the primary United States Government agency responsible for identifying and assisting orphans and other vulnerable children in developing countries.
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(b) Declaration of Policy
Congress, recognizing that prompt and appropriate action by the United States to assist orphans and other vulnerable children in developing countries is an important expression of the humanitarian concern and tradition of the people of the United States, affirms the willingness of the United States to assist such orphans and other vulnerable children— (1) by providing assistance for the purpose of improving the health, nutritional, shelter, educational, economic, and psychological status of orphans and other vulnerable children in such countries; and (2) by providing humanitarian and protection assistance to such orphans and other vulnerable children affected by conflict or civil strife.
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242. Assistance to provide basic care
(a) Findings
Congress finds the following: (1) The need for individuals and local organizations in developing countries to assist households headed by children is necessary due to the increase in the number of such households. Millions of children in these types of households lack basic care, such as access to food and shelter. (2) When communities are responsible for raising orphans, these children are cared for in a rich and nurturing environment and remain connected to the traditions and rituals of families and the community.
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(3) As the number of these children increases, the ability of communities to provide basic care for such children is limited. Assistance to support the provision of such basic care is therefore necessary in and of itself and also to facilitate the provision of other types of assistance for such children under this title. (b) Assistance
(1) In general
The President is authorized to provide assistance for programs in developing countries to provide basic care for orphans and other vulnerable children. (2) Activities supported
Assistance provided under paragraph (1) should be used— (A) to support individuals and local organizations, including teachers,
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social workers, and representatives from religious institutions and nongovernmental organizations, to mobilize their own resources through the establishment of community care councils to provide basic care for orphans and other vulnerable children, including day care, food assistance, protection assistance, and home visits; (B) to increase the capacity of community care councils described in subparagraph (A) to meet on a regular basis to identify orphans and other vulnerable children and to facilitate the provision of services; and (C) to establish and operate centers in such communities to provide basic care described in subparagraph (A).
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(3) Definition
In this subsection, the term protection assistance means all appropriate measures to promote the physical and psychological security of an individual, provide equal access to basic services for the individual, and safeguard the legal and human rights and dignity of the individual. 243. Assistance to provide treatment to orphans and other vulnerable children with HIV/AIDS
(a) Findings
Congress finds the following: (1) Approximately 2,500,000 children under the age of 15 worldwide have HIV/AIDS. Every day another 2,000 children under the age of 15 are infected with HIV.
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(2) In 2002, approximately 2,500,000 children were at risk for infection with HIV through mother-to-child transmission, which includes transmission at any point during pregnancy, labor, delivery, or breastfeeding. (3) To date, more than 4,000,000 children worldwide are estimated to have died from AIDS, primarily contracted through mother-to-child transmission. Every year, approximately 700,000 babies are infected with HIV, of which the majority are living in Africa.
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(4) In southern Africa HIV/AIDS is now the leading cause of death among young children, accounting for almost half of such deaths. (5) Research has shown conclusively that initiation in a timely manner of antiretroviral therapy for infants or young children with HIV/AIDS can preserve or restore their immune functions, promote normal growth and development, and prolong life. (6) Few international development programs specifically target the treatment of children with HIV/AIDS in developing countries.
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Reasons for this include the perceived low priority of pediatric treatment, a lack of pediatric health care professionals, lack of expertise and experience in pediatric drug dosing and monitoring, the perceived complexity of pediatric treatment, and mistaken beliefs regarding the risks and benefits of pediatric treatment. (b) Assistance
(1) In general
The President is authorized to provide assistance for the treatment of orphans and other vulnerable children with HIV/AIDS in developing countries.
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(2) Activities supported
Assistance provided under paragraph (1) should be used to carry out the following activities: (A) The treatment of orphans and other vulnerable children with HIV/AIDS through the provision of pharmaceuticals, including high-quality, low-cost antiretrovirals and other therapies, including generically manufactured pharmaceuticals where appropriate. (B)(i) The recruitment and training of individuals to provide the treatment described in subparagraph (A), including the recruitment and training of appropriate support personnel.
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(ii) Such training should include appropriate methodologies relating to initial diagnosis, appropriate dosages of pharmaceuticals, monitoring, medication adherence techniques, and treatment for any complications resulting from such pharmaceuticals. (C) Activities of medical laboratories relating to the treatment described in subparagraph (A), including assistance for the purchase of necessary equipment. 244.
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Assistance to provide psychosocial support to orphans and other vulnerable children affected by HIV/AIDS
(a) Findings
Congress finds the following: (1) Many children who are orphaned as a result of AIDS blame themselves for the death of a parent and many children are separated from siblings, sometimes for life. (2) The trauma that results from the loss of a parent as a result of AIDS can trigger behavior problems of aggression or emotional withdrawal and negatively affect a child’s performance in school and the child’s social relations.
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(3) Children living in families affected by HIV/AIDS are often stigmatized, teased, and ostracized by peers. In Uganda, some children who are orphaned as a result of AIDS are called ‘walking corpses’ and discouraged from attending school. (4) Children living in families affected by HIV/AIDS who are most vulnerable are those children in households headed by children. In these households, trained community volunteers can play a major role through home visits.
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(5) In many African countries, religious leaders are mobilizing individuals and local organizations within the community to identify and respond to the psychosocial needs of those children affected by AIDS. (b) Assistance
The President is authorized to provide assistance for programs in developing countries to provide mental health treatment and related services to orphans and other vulnerable children affected by HIV/AIDS. 245.
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Assistance for school food programs
(a) Findings
Congress finds the following: (1) In 2004, it is estimated that 125,000,000 children worldwide do not attend school, in part because of hunger and malnutrition, and the vast majority of these children are young girls. (2) School food programs, including take-home rations, in developing countries provide strong incentives for parents to send their children to school and ensure that they continue with their education. School food programs may reduce short-term hunger, improve cognitive functions, and enhance learning, behavior, and achievement.
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(3) In 2004, more than 8,000,000 children in sub-Saharan Africa are underweight compared to 1994. Malnutrition enhances the risk that orphans and other vulnerable children will be at risk for illness and infections, especially if these children are also infected with HIV. (4) Healthy members of families affected by HIV/AIDS in developing countries often leave the workforce to care for those family members with HIV/AIDS, which compounds the problem of access to food for the family. Food consumption has been shown to drop by as much as 40 percent in these families.
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(5)(A) Although a number of organizations seek to meet the needs of children who are orphaned or vulnerable as a result of HIV/AIDS, local communities continue to be the primary providers of support for these children. (B) According to a survey by the United States Agency for International Development, orphans and other vulnerable children relied on relatives for food support 74 percent of the time and on friends for food support 19 percent of the time. (b) Assistance
(1) In general
The President is authorized to provide assistance for school food programs in developing countries.
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(2) Activities supported
Assistance provided under paragraph (1) should be used to purchase local or regional foodstuffs, where appropriate, for school food programs. 246. Assistance to increase educational opportunities and provide employment training
(a) Findings
Congress finds the following: (1) The lack of financial resources in families affected by HIV/AIDS prevents many orphans and other vulnerable children in developing countries from attending school because of the requirement to pay school fees and other costs of education.
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(2) Such children, in particular young girls, are often forced to miss school in order to serve as caregivers to relatives with HIV/AIDS or assume adult responsibilities for providing for the family. Younger children who lose a parent also lose the opportunity to learn skills that they will need to support themselves as they grow older. (3) According to the International Labor Organization (ILO), approximately 250,000,000 children and adolescents ages 5 to 14 in developing countries are working part-time and approximately 120,000,000 children and adolescents ages 5 to 14 in developing countries are working full-time.
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(4) In many regions of Africa and other developing countries, non-formal education plays an important role to provide children who are unable to attend school with the employment and related life skills training such children need to survive. (5) Many organizations in Africa, including faith-based organizations, provide employment and related life skills training for older children to better prepare them to serve as caregivers for younger siblings. (6) Organizations that provide non-formal education can assist the thousands of children in developing countries who are not currently being assisted by families or communities and are struggling to survive.
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(b) Assistance
(1) Education assistance
The President is authorized to provide assistance for programs in developing countries to increase enrollment in public primary schools by eliminating school fees and other costs of education, especially in developing countries heavily affected by HIV/AIDS. Amounts made available to carry out this paragraph are authorized to be made available to the President to make voluntary contributions to the United Nations Children’s Fund to achieve the purposes of this paragraph.
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(2) Employment training assistance
The President is authorized to provide assistance for programs in developing countries to provide employment training and related services for orphans and other vulnerable children, especially in developing countries heavily affected by HIV/AIDS. 247. Assistance to protect and promote inheritance rights
(a) Finding
Congress finds that orphans and other vulnerable children in developing countries, particularly children who are orphaned as a result of AIDS, are routinely denied their inheritance or encounter difficulties in claiming the land and other property which they have inherited.
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(b) Assistance
The President is authorized to provide assistance in support of programs in developing countries to protect and promote the inheritance rights of orphans and other vulnerable children, particularly young girls and children who are orphaned as a result of AIDS. 248. Administration of assistance
(a) Office for Orphans and Other Vulnerable Children
(1) Establishment
There is established within the United States Agency for International Development an Office for Orphans and Other Vulnerable Children (hereafter in this title referred to as the Office ), which shall be headed by a Director who shall be appointed by the Administrator of the Agency.
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(2) Duties
The Office shall be responsible for carrying out this title. (b) Approval of Applications
The Director of the Office shall be responsible for reviewing or approving all applications submitted to the United States Agency for International Development for assistance under this title, including applications submitted to field missions of the Agency.
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(c) Priority
In providing assistance under this title, priority should be given to assistance for developing countries in which the rate of HIV infection, as reported in the most recent epidemiological data for that country compiled by the United Nations Joint Programme on HIV/AIDS (UNAIDS), is at least 5 percent among women attending prenatal clinics or more than 15 percent among individuals in groups with high-risk behavior.
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(d) Form of Assistance
Assistance under this title shall be provided in the form of— (1) grants, cooperative agreements, or contracts; (2) contributions to international organizations; or (3) assistance to the governments of developing countries.
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(e) Coordination
The provision of assistance under this title for children who are orphaned as a result of HIV/AIDS, or are children with HIV/AIDS, shall be undertaken in a manner that is consistent with assistance authorized under section 104A of this Act and assistance relating to HIV/AIDS authorized under the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( Public Law 108–25 ).
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(f) Other Assistance
(1) Review and approval of other usaid assistance
The Director of the Office shall be responsible for reviewing or approving— (A) each component of the annual plan of a mission, bureau, or other office of the United States Agency for International Development as the component relates to assistance for orphans and other vulnerable children in developing countries; and (B) each program, project, or activity relating to such assistance. (2) Coordination of all u.s.
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Government assistance
The Director of the Office shall be responsible for ensuring coordination of all United States Government programs to provide assistance for orphans and other vulnerable children in developing countries. 249. Monitoring system
(a) Establishment
In order to maximize the sustainable development impact of assistance authorized under this title, the President shall establish a monitoring system that meets the requirements of subsection (b). (b) Requirements
The requirements referred to in subsection (a) are the following: (1) The monitoring system establishes performance goals for the assistance and expresses such goals in an objective and quantifiable form, to the extent feasible.
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(2) The monitoring system establishes performance indicators to be used in measuring or assessing the achievement of the performance goals described in paragraph (1). (3) The monitoring system provides a basis for recommendations for adjustments to the assistance to enhance the impact of the assistance. 250. Report
(a) Report
Not later than December 31, 2005, and each December 31 thereafter, the President shall transmit to Congress a report that contains a detailed description of the implementation of this title for the previous fiscal year. (b) Contents
The report shall contain the following information: (1) For each grant,
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cooperative agreement, contract, contribution, or other form of assistance awarded or entered into under this title— (A) the amount of the grant, cooperative agreement, contract, contribution, or other form of assistance, the name of each recipient and each developing country with respect to which projects or activities under the grant, cooperative agreement, contract, contribution, or other form of assistance were carried out, and the approximate number of orphans and other vulnerable children who received assistance under the projects or activities; and (B) the results of the monitoring system with respect to the grant, cooperative agreement, contract, contribution, or other form of assistance.
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(2) For each grant, cooperative agreement, contract, contribution, or other form of assistance awarded or entered into under any provision of law other than this title for assistance for orphans and other vulnerable children in developing countries, the information described in paragraph (1)(A). (3) Any other appropriate information relating to the needs of orphans and other vulnerable children in developing countries that could be addressed through the provision of assistance under this title or under any other provision of law. 251.
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Authorization of appropriations; additional provisions
(a) Authorization of Appropriation
(1) In general
Of the amounts made available to carry out the provisions of law described in paragraph (2), there are authorized to be appropriated to the President to carry out this title such sums as may be necessary for each of the fiscal years 2005 and 2006.
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(2) Provisions of law
The provisions of law referred to in paragraph (1) are the following: (A) The United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( Public Law 108–25 ) and the amendments made by that Act. (B) Any other provision of law under which assistance is authorized for orphans and other vulnerable children in developing countries.
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(b) Additional Provisions
(1) Availability
Amounts appropriated pursuant to the authorization of appropriations under subsection (a) are authorized to remain available until expended and are in addition to amounts otherwise available for such purposes. (2) Minimum funding requirement
Not less than 60 percent of amounts appropriated pursuant to the authorization of appropriations under subsection (a) for a fiscal year (other than amounts made available for assistance to eliminate school fees and other costs of education pursuant to section 246) shall be provided through United States or indigenous private voluntary organizations that implement programs on the community level.
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Amounts provided by for-profit entities to not-for-profit entities from assistance under this title shall not be considered for purposes of satisfying the requirement of this paragraph. (3) Assistance under other provisions of law
(A) In general
Notwithstanding any other provision of law, amounts made available for assistance for orphans or other vulnerable children in developing countries under any provision of law other than this title may be provided to further the purposes of this title.
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(B) Report
To the extent assistance described in subparagraph (A) is provided in accordance with such subparagraph, the President shall include, as part of the report required under section 250, a detailed description of such assistance and, to the extent applicable, the information required by subsection (b)(1)(A) of such section with respect to such assistance. 252. Definitions
In this title: (1) AIDS
The term AIDS has the meaning given the term in section 104A(g)(1) of this Act.
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(2) Children
The term children means persons who have not attained the age of 18. (3) HIV
The term HIV has the meaning given the term in section 104A(g)(2) of this Act. (4) HIV/AIDS
The term HIV/AIDS has the meaning given the term in section 104A(g)(3) of this Act. (5) Orphan
The term orphan means a child deprived by death of one or both parents.
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(6) Vulnerable children
The term ‘vulnerable children’ includes children who are neglected, destitute, abandoned, homeless, disabled, suffering from malnutrition, are sexually exploited or abused, or are displaced or otherwise adversely affected by armed conflict.
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1. Newell George Post Office Building
(a) Designation
The facility of the United States Postal Service located at 550 Nebraska Avenue in Kansas City, Kansas, shall be known and designated as the Newell George Post Office Building. (b) References
Any reference in a law, map, regulation, document, paper, or other record of the United States to the facility referred to in subsection (a) shall be deemed to be a reference to the Newell George Post Office Building.
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1. Short title
This Act may be cited as the Pension Fairness Act of 2004. 1. Findings and purpose
(a) Findings
The Congress finds as follows: (1) The pension system sponsored by private employers is in a weakened state due to economic recession and heightened global competition. (2) Employers increasingly are terminating or reducing the benefits provided under traditional defined benefit pension plans. (3) Over 44,000,000 workers, retirees, and their families depend on defined benefit pension plans as a critical component of their retirement security in addition to Social Security.
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(4) Defined benefit pension plans are currently estimated to be underfunded up to a total of $400,000,000,000, and the Pension Benefit Guaranty Corporation, the agency that insures traditional pensions, had a 2003 deficit of over $10,000,000,000. (5) The Congress in enacting the Employee Retirement Income Security Act of 1974 intended employers to adequately fund their pension plans and did not intend for the Pension Benefit Guaranty Corporation to be used as a means for restructuring companies to escape their unfunded pension liabilities.
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(6) Cash balance pension plans were created to reduce traditional defined benefit pension obligations without statutory authorization, and adequate standards do not exist to adequately protect the pensions of pension plan participants, particularly older participants. (7) Corporate executives often preserve or enhance executive pension and other employee benefits at the same time the benefits of non-highly paid employees are reduced.
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(b) Purpose
It is the purpose of this Act to better protect the retirement benefits afforded to workers and retirees by protecting the solvency of the Pension Benefit Guaranty Corporation and ensuring equitable treatment of corporate executives as compared to treatment provided to other employees when restructuring employers shift unfunded pension liabilities onto the Pension Benefit Guaranty Corporation or convert to cash balance pension plans without adequately protecting the retirement security of older workers. 2.
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Termination fairness standard for nonqualified deferred compensation plans in connection with a pension plan termination based on bankruptcy reorganization or in connection with a conversion of a plan to a cash balance plan
Section 206 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1056 ) is amended by adding at the end the following new subsection: (g) Termination fairness standard for nonqualified deferred compensation plans in connection with a pension plan termination based on bankruptcy reorganization or in connection with a conversion of a pension plan to a cash balance plan
(1) In general
In any case in which a corporation
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is a plan sponsor of a defined benefit plan with respect to which a plan amendment is adopted that has the effect of— (A) implementing a distress termination of the plan under section 4041(c) based on bankruptcy reorganization or a termination of the plan initiated by the Pension Benefit Guaranty Corporation under section 4042 based on bankruptcy reorganization, in any case in which the plan is not sufficient for guaranteed benefits (within the meaning of section 4041(d)(2)) as of the proposed termination date, or (B) converting such plan to a cash balance plan,
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in any case in which the amendment— (i) results in a significant reduction in the rate of future benefit accruals (within the meaning of section 204(h)(1)) of participants with at least 10 years of service under the plan, or (ii) does not provide for an election by affected participants with at least 10 years of service under the plan (and their beneficiaries) to retain coverage under the terms of the plan as in effect immediately prior to the amendment,
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any covered deferred compensation plan established or maintained by such plan sponsor after the date of the adoption of such plan amendment shall meet the termination fairness standard of this subsection with respect to such plan amendment. (2) Termination fairness standard
A covered deferred compensation plan established or maintained by a plan sponsor described in paragraph (1) meets the termination fairness standard of this subsection with respect to a plan amendment described in paragraph (1) if,
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during the 5-year period beginning on the date of the adoption of such plan amendment— (A) no amount of deferred compensation accrues to a disqualified individual under the terms of such covered deferred compensation plan (irrespective of whether the accrual in deferred compensation is expressed in the form of a promise, a guarantee, or any other representation), and (B) in the case of a covered deferred compensation plan established during or after the 1-year period preceding the notice date (or any amendment to a covered deferred compensation plan if such amendment is adopted during or after such 1-year period),
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no distribution of accrued deferred compensation is made under such plan (or such amendment) to a disqualified individual. (3) Definitions
For purposes of this subsection— (A) Cash balance plan
(i) In general
The term cash balance plan means a defined benefit plan under which the accrued benefit is expressed to participants and beneficiaries as an amount other than an annual benefit commencing at normal retirement age.
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(ii) Regulations to include similar or other hybrid plans
The Secretary shall issue regulations which provide that a defined benefit plan (or any portion of such a plan) which has an effect similar to a plan described in clause (i) shall be treated as a cash balance plan. Such regulations may provide that if a plan sponsor represents in communications to participants and beneficiaries that a plan amendment results in a plan being described in the preceding sentence, such plan shall be treated as a cash balance plan.
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(B) Notice date
The term notice date means, with respect to an amendment described in paragraph (1)— (i) in the case of a distress termination under section 4041(d), the date of the advance notice of intent to terminate provided pursuant to section 4041(a)(2), (ii) in the case of a termination initiated by the Pension Benefit Guaranty Corporation under section 4042, the date of the application to the court under section 4042(c), and (iii) in the case of a conversion to a cash balance plan, the date of the adoption of the amendment.
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(C) Covered deferred compensation plan
(i) In general
The term covered deferred compensation plan means any plan providing for the deferral of compensation of a disqualified individual, whether or not— (I) compensation of the disqualified individual which is deferred under such plan is subject to substantial risk of forfeiture, (II) the disqualified individual’s rights to the compensation deferred under the plan are no greater than the rights of a general creditor of the plan sponsor, (III) all amounts set aside (directly or indirectly) for purposes of paying the deferred compensation (including income), and all income attributable to such amounts,
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remain (until made available to the disqualified individual or other beneficiary) solely the property of the plan sponsor (without being restricted to the provision of benefits under the plan), (IV) the amounts referred to in subclause (III) are available to satisfy the claims of the plan sponsor’s general creditors at all times (not merely after bankruptcy or insolvency), and (V) some or all of the compensation of the disqualified individual which is deferred under such plan is guaranteed by an insurance company, insurance service, or other similar organization.
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(ii) Exception for qualified plans
Such term shall not include a plan that is— (I) described in section 219(g)(5)(A) of the Internal Revenue Code of 1986, or (II) an eligible deferred compensation plan (as defined in section 457(b) of such Code) of an eligible employer described in section 457(e)(1)(A) of such Code. (iii) Plan includes arrangements, etc
For purposes of this subparagraph, the term plan includes any agreement or arrangement.
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(D) Disqualified individual
The term disqualified individual means a director or executive officer of the plan sponsor. (E) Termination based on bankruptcy reorganization
A termination of a plan which is a distress termination under section 4041(c) or a termination instituted by the Pension Benefit Guaranty Corporation under section 4042 is based on bankruptcy reorganization if such termination is based in whole or in part on the filing, by or against any person who is a contributing sponsor of such plan or a member of such sponsor’s controlled group, of a petition seeking reorganization in a case under title 11, United States Code,
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or under any similar law of a State or political subdivision of a State (or such a case in which liquidation is sought has been converted to a case in which reorganization is sought). (F) Title IV terminology
Any term used in this subsection which is defined in section 4001(a) shall have the meaning provided such term in section 4001(a).
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(4) Special rules
(A) Coordinated benefits
If the benefits of 2 or more defined benefit plans established or maintained by an employer are coordinated in such a manner as to have the effect of the adoption of an amendment described in paragraph (1), the sponsor of the defined benefit plan or plans providing for such coordination shall be treated as having adopted such a plan amendment as of the date such coordination begins. (B) Multiple amendments
The Secretary shall issue regulations to prevent the avoidance of the purposes of this subsection through the use of 2 or more plan amendments rather than a single amendment.
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(C) Controlled groups, etc
For purposes of this subsection, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 employer. (D) Treatment of earnings
References to deferred compensation shall be treated as including references to income attributable to such compensation or such income.
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(5) Coordination
The Secretary and the Secretary of the Treasury shall ensure, through the execution of an interagency memorandum of understanding among such Secretaries, that regulations, rulings, and interpretations issued by such Secretaries relating to the same matter over which both such Secretaries have responsibility under this subsection and section 4980H of the Internal Revenue Code of 1986 are administered so as to have the same effect at all times.
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(6) Effect of waiver granted by Secretary of the Treasury
To the extent that any requirement of the termination fairness standard of section 4980H(b) of the Internal Revenue Code of 1986 is waived by the Secretary of the Treasury with respect to any disqualified individual under section 4980H(h) of such Code in the case of any plan amendment having the effect of a termination described in paragraph (1)(A) of this subsection, such requirement under the termination fairness standard of paragraph (2) of this subsection shall not apply with respect to such individual in the case of such plan amendment.. 3.
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Excise tax on funding nonqualified deferred compensation plans in the event of a pension plan termination based on bankruptcy reorganization or a conversion of a pension plan to a cash balance plan
(a) In general
Chapter 43 of the Internal Revenue Code of 1986 (relating to qualified pension, etc., plans) is amended by adding at the end the following new section: 4980H. Funding nonqualified deferred compensation plans in the event of a pension plan termination based on bankruptcy reorganization or a conversion of a pension plan to a cash balance plan
(a) Imposition of tax
In any case in which a
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corporation is a plan sponsor of a defined benefit plan with respect to which an plan amendment is adopted that has the effect of— (1) implementing a distress termination of the plan under section 4041(c) of the Employee Retirement Income Security Act of 1974 based on bankruptcy reorganization or a termination of the plan initiated by the Pension Benefit Guaranty Corporation under section 4042 of such Act based on bankruptcy reorganization, in any case in which the plan is not sufficient for guaranteed benefits (within the meaning of section 4041(d)(2) of such Act) as of the proposed termination date,
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or (2) converting such plan to a cash balance plan, in any case in which the amendment— (A) results in a significant reduction in the rate of future benefit accruals (within the meaning of section 4980F(e)(1)) of participants with at least 10 years of service under the plan, or (B) does not provide for an election by affected participants with at least 10 years of service under the plan (and their beneficiaries) to retain coverage under the terms of the plan as in effect immediately prior to the amendment,
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there is hereby imposed a tax on any failure to meet the termination fairness standard of subsection (b) with respect to such plan amendment. (b) Termination fairness standard
A covered deferred compensation plan established or maintained by a plan sponsor described in subsection (a) meets the termination fairness standard of this subsection with respect to a plan amendment described in subsection (a) if,
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during the 5-year period beginning on the date of the adoption of such plan amendment— (1) no amount of deferred compensation accrues to a disqualified individual under the terms of such covered deferred compensation plan (irrespective of whether the accrual in deferred compensation is expressed in the form of a promise, a guarantee, or any other representation), and (2) in the case of a covered deferred compensation plan established during or after the 1-year period preceding the notice date (or any amendment to a covered deferred compensation plan if such amendment is adopted during or after such 1-year period),
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no distribution of accrued deferred compensation is made under such plan (or such amendment) to a disqualified individual. (c) Amount of tax
The amount of the tax imposed by subsection (a) shall be equal to the amount of the accrual described in subsection (b)(1) comprising the failure or the distribution described in subsection (b)(2) comprising the failure. (d) Liability for tax
The plan sponsor shall be liable for the tax imposed by this section.
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(e) Definitions
For purposes of this section— (1) Cash balance plan
(A) In general
The term cash balance plan means a defined benefit plan under which the accrued benefit is expressed to participants and beneficiaries as an amount other than an annual benefit commencing at normal retirement age. (B) Regulations to include similar or other hybrid plans
The Secretary shall issue regulations which provide that a defined benefit plan (or any portion of such a plan) which has an effect similar to a plan described in subparagraph (A) shall be treated as a cash balance plan.
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Such regulations may provide that if a plan sponsor represents in communications to participants and beneficiaries that a plan amendment results in a plan being described in the preceding sentence, such plan shall be treated as a cash balance plan. (2) Notice date
The term notice date means with respect to an amendment described in subsection (a)— (A) in the case of a distress termination under section 4041(d) of the Employee Retirement Income Security Act of 1974 , the date of the advance notice of intent to terminate provided pursuant to section 4041(a)(2) of such Act,
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(B) in the case of a termination initiated by the Pension Benefit Guaranty Corporation under section 4042 of such Act, the date of the application to the court under section 4042(c) of such Act, and (C) in the case of a conversion to a cash balance plan, the date of the adoption of the amendment. (3) Covered deferred compensation plan
(A) In general
The term covered deferred compensation plan means any plan providing for the deferral of compensation of a disqualified individual,
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whether or not— (i) compensation of the disqualified individual which is deferred under such plan is subject to substantial risk of forfeiture, (ii) the disqualified individual’s rights to the compensation deferred under the plan are no greater than the rights of a general creditor of the plan sponsor, (iii) all amounts set aside (directly or indirectly) for purposes of paying the deferred compensation, and all income attributable to such amounts, remain (until made available to the participant or other beneficiary) solely the property of the (without being restricted to the provision of benefits under the plan),
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(iv) the amounts referred to in clause (iii) are available to satisfy the claims of the plan sponsor’s general creditors at all times (not merely after bankruptcy or insolvency), and (v) some or all of the compensation of the disqualified individual which is deferred under such plan is guaranteed by an insurance company, insurance service, or other similar organization.
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(B) Exception for qualified plans
Such term shall not include a plan that is— (i) described in section 219(g)(5)(A), or (ii) an eligible deferred compensation plan (as defined in section 457(b)) of an eligible described in section 457(e)(1)(A). (C) Plan includes arrangements, etc
For purposes of this paragraph, the term plan includes any agreement or arrangement. (4) Disqualified individual
The term disqualified individual means a director or executive officer of the plan sponsor.
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(5) Termination based on bankruptcy reorganization
A termination of a plan which is a distress termination under section 4041(c) or a termination instituted by the Pension Benefit Guaranty Corporation under section 4042 is based on bankruptcy reorganization if such termination is based in whole or in part on the filing, by or against any person who is a contributing sponsor of such plan or a member of such sponsor’s controlled group, of a petition seeking reorganization in a case under title 11, United States Code,
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or under any similar law of a State or political subdivision of a State (or such a case in which liquidation is sought has been converted to a case in which reorganization is sought). (6) Title IV terminology
Any term used in this section which is defined in section 4001(a) of the Employee Retirement Income Security Act of 1974 shall have the meaning provided such term in such section 4001(a).
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(f) Special rules
(1) Coordinated benefits
If the benefits of 2 or more defined benefit plans established or maintained by an are coordinated in such a manner as to have the effect of the adoption of an amendment described in subsection (a), the sponsor of the defined benefit plan or plans providing for such coordination shall be treated as having adopted such a plan amendment as of the date such coordination begins. (2) Multiple amendments
The Secretary shall issue regulations to prevent the avoidance of the purposes of this section through the use of 2 or more plan amendments rather than a single amendment.
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(3) Controlled groups, etc
For purposes of this section, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer. (4) Treatment of earnings
References to deferred compensation shall be treated as including references to income attributable to such compensation or such income.
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(g) Coordination
The Secretary and the Secretary of Labor shall ensure, through the execution of an interagency memorandum of understanding among such Secretaries, that regulations, rulings, and interpretations issued by such Secretaries relating to the same matter over which both such Secretaries have responsibility under this section and section 206(g) of the Employee Retirement Income Security Act of 1974 are administered so as to have the same effect at all times.
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(h) Waiver
(1) In general
In the case of any plan amendment having the effect of a termination described in subsection (a)(1), the Secretary may waive the application of any requirement of the termination fairness standard of subsection (b) with respect to any disqualified individual who first commences service for the plan sponsor after the notice date with respect to such plan amendment. The Secretary may grant any such waiver in the case of any such plan amendment with respect to any such disqualified individual only after consultation with the Pension Benefit Guaranty Corporation.
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The Secretary shall promptly notify the Secretary of Labor of any such waiver granted by the Secretary. (2) Requirements for waiver
A waiver may be granted under paragraph (1) only— (A) upon the filing with the Secretary by the plan sponsor of an application for such waiver, in such form and manner as shall be prescribed in regulations of the Secretary, (B) upon a showing, to the satisfaction of the Secretary, that such waiver is a business necessity for the plan sponsor, as determined under such regulations, and is in the best interest of plan participants and beneficiaries, as determined under such regulations,
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and (C) after the participants, in such form and manner as shall be provided in such regulations, have been notified of the filing of the application for the waiver and have been provided a reasonable opportunity to provide in advance comments to the Secretary regarding the proposed waiver. (b) Clerical amendment
The table of sections for chapter 43 of such Code is amended by adding at the end the following new item: Sec. 4980H. Funding nonqualified deferred compensation plans in the event of a pension plan termination based on bankruptcy reorganization or a conversion of a pension plan to a cash balance plan.
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4980H. Funding nonqualified deferred compensation plans in the event of a pension plan termination based on bankruptcy reorganization or a conversion of a pension plan to a cash balance plan
(a) Imposition of tax
In any case in which a corporation is a plan sponsor of a defined benefit plan with respect to which an plan amendment is adopted that has the effect of— (1) implementing a distress termination of the plan under section 4041(c) of the Employee Retirement Income Security Act of 1974 based on bankruptcy reorganization or a termination of the plan initiated by the Pension Benefit Guaranty Corporation under section
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4042 of such Act based on bankruptcy reorganization, in any case in which the plan is not sufficient for guaranteed benefits (within the meaning of section 4041(d)(2) of such Act) as of the proposed termination date, or (2) converting such plan to a cash balance plan, in any case in which the amendment— (A) results in a significant reduction in the rate of future benefit accruals (within the meaning of section 4980F(e)(1)) of participants with at least 10 years of service under the plan,
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or (B) does not provide for an election by affected participants with at least 10 years of service under the plan (and their beneficiaries) to retain coverage under the terms of the plan as in effect immediately prior to the amendment, there is hereby imposed a tax on any failure to meet the termination fairness standard of subsection (b) with respect to such plan amendment. (b) Termination fairness standard
A covered deferred compensation plan established or maintained by a plan sponsor described in subsection (a) meets the termination fairness standard of this subsection with respect to a plan amendment described in subsection (a) if,
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during the 5-year period beginning on the date of the adoption of such plan amendment— (1) no amount of deferred compensation accrues to a disqualified individual under the terms of such covered deferred compensation plan (irrespective of whether the accrual in deferred compensation is expressed in the form of a promise, a guarantee, or any other representation), and (2) in the case of a covered deferred compensation plan established during or after the 1-year period preceding the notice date (or any amendment to a covered deferred compensation plan if such amendment is adopted during or after such 1-year period),
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no distribution of accrued deferred compensation is made under such plan (or such amendment) to a disqualified individual. (c) Amount of tax
The amount of the tax imposed by subsection (a) shall be equal to the amount of the accrual described in subsection (b)(1) comprising the failure or the distribution described in subsection (b)(2) comprising the failure. (d) Liability for tax
The plan sponsor shall be liable for the tax imposed by this section.
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(e) Definitions
For purposes of this section— (1) Cash balance plan
(A) In general
The term cash balance plan means a defined benefit plan under which the accrued benefit is expressed to participants and beneficiaries as an amount other than an annual benefit commencing at normal retirement age. (B) Regulations to include similar or other hybrid plans
The Secretary shall issue regulations which provide that a defined benefit plan (or any portion of such a plan) which has an effect similar to a plan described in subparagraph (A) shall be treated as a cash balance plan.
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Such regulations may provide that if a plan sponsor represents in communications to participants and beneficiaries that a plan amendment results in a plan being described in the preceding sentence, such plan shall be treated as a cash balance plan. (2) Notice date
The term notice date means with respect to an amendment described in subsection (a)— (A) in the case of a distress termination under section 4041(d) of the Employee Retirement Income Security Act of 1974 , the date of the advance notice of intent to terminate provided pursuant to section 4041(a)(2) of such Act,
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