,i #aahth ,,congress #b;d ,session ,h4 ,r4 #gbic ,,in ,,the ,,house ,,of ,,representatives ,february #g1 #bjbd,mr4 ,neal introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide rules for automatic contribution retirement plans and arrangements4 #a4 ,short title2 table of contents1 etc 7a7 ,short title ,this ,act may be cited as the ,automatic ,,ira ,act of #bjbd4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents1 etc4,sec4 #b4 ,automatic contribution plan or arrangement4,sec4 #c4 ,credit for certain small employer automatic ,,ira arrangements4,sec4 #d4 ,treatment of automatic ,,ira arrangements under ,state law4 7c7 ,amendment of #aihf ,code ,except as otherwise expressly provided1 whenever in this subtitle an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 #b4 ,automatic contribution plan or arrangement 7a7 ,automatic contribution plan or arrangement 7#a7 ,in general ,section #dad is amended by adding at the end the following3 7dd7 ,automatic contribution plan or arrangement ,for purposes of this title-- 7#a7 ,in general ,the term automatic contribution plan or arrangement means-- 7,a7 a defined contribution plan that-- 7i7 is described in clause 7i71 7ii71 or 7iv7 of section #bai7;g77#e77;,a71 7ii7 includes a qualified cash or deferred arrangement or a salary reduction arrangement1 and 7iii7 meets the notice1 eligibility1 contribution1 fee1 and lifetime income requirements of paragraphs 7#b71 7#c71 7#d71 7#f71 and 7#g71 respectively1 7,b7 an automatic ,,ira arrangement described in paragraph 7#h71 7,c7 an arrangement described in section #djh7p7 that meets the notice1 contribution1 investment1 and fee requirements described in paragraphs 7#b71 7#d71 7#e71 7#f71 respectively1 and 7,d7 a plan described in clause 7i71 7ii71 7iv71 7v71 or 7vi7 of section #bai7;g77#e77;,a7 that is established and maintained by an employer as of the date of enactment of the ,automatic ,,ira ,act of #bjbd1 or a plan described in section #bai7;g77#e77;,a77iv7 that is not subject to title ,i of the ,employee ,retirement ,income ,security ,act of #aigd and offers annuity contracts1 or makes custodial accounts available to employees1 as of such date4 7#b7 ,notice requirements ,a plan or arrangement shall be treated as meeting the notice requirements of this paragraph with respect to an employee if the plan or arrangement meets notice requirements similar to the notice requirements of section #dja7k77#ac77;,e74 7#c7 ,eligibility requirements 7,a7 ,in general ,the requirements of this paragraph shall be treated as met if all employees of the employer are eligible to participate in an automatic contribution plan or arrangement maintained or facilitated by the employer4 7,b7 ,certain exclusions ,the following employees may be excluded from consideration in determining whether the requirements of this paragraph are met3 7i7 ,individuals less than #ba years old ,any employee who has not attained age #ba4 7ii7 ,certain other employees ,any employee described in section #daj7;b77#c74 7iii7 ,service requirements ,any employee who has completed neither of the following periods of service with the employer maintaining or facilitating the plan or arrangement3 7,i7 ,the period permitted under section #daj7;a77#a7 7determined without regard to subparagraph 7,b77i7 thereof74 7,,ii7 ,a period of #b consecutive #ab-month periods during each of which the employee has at least #ejj hours of service4 ,for purposes of subclause 7,,ii71 #ab-month periods shall be determined in the same manner as under the last sentence of section #daj7;a77#c77;,a74 7iv7 ,certain students in case of a #djc7;b7 plans ,in the case of an annuity contract described in section #djc7;b71 employees who are students1 but only to the extent such employees may be excluded under the last sentence of #djc7;b77#ab77;,a74 7,c7 ,special rules for controlled groups ,all eligible employees of an employer need not be eligible to participate in the same automatic contribution plan or arrangement4 ,for purposes of this subsection1 the term employer shall include all employers treated as a single employer under subsection 7b71 7c71 7m71 or 7o7 of section #dad4 7,d7 ,entry dates ,rules similar to the rules of section #daj7;a77#d7 shall apply with respect to employees who have satisfied the age and service requirements referenced in subparagraph 7,b7 and who are otherwise entitled to participate in a plan or arrangement4 7,e7 ,automatic ,i,r,as for non-employees ,the ,secretary shall by regulation or other guidance provide for making available automatic ,i,r,as to individuals who provide services that do not constitute employment4 7#d7 ,contribution requirements 7,a7 ,in general ,the requirements of this paragraph shall be treated as met if1 under the plan or arrangement1 each employee eligible to participate in the plan or arrangement is treated as having elected to have the employer make elective contributions in an amount equal to the qualified percentage of compensation4 7,b7 ,election out ,the election treated as having been made under subparagraph 7,a7 shall cease to apply with respect to any employee if such employee makes an affirmative election-- 7i7 not to have such contributions made1 or 7ii7 to make elective contributions at a level specified in such affirmative election4 7,c7 ,qualified percentage ,for purposes of this paragraph1 and except as provided in subparagraph 7,d77i71 the term qualified percentage means1 with respect to any employee1 any percentage determined under the plan or arrangement if such percentage is applied uniformly1 does not exceed #ae percent 7#aj percent during the period described in clause 7i771 and is at least-- 7i7 #f percent during the period beginning on the date on which the first elective contribution described in subparagraph 7,a7 is made with respect to such employee and ending on the last day of the first plan year which begins after such date1 7ii7 #g percent during the first plan year following the plan year described in clause 7i71 7iii7 #h percent during the first plan year following the plan year described in clause 7ii71 7iv7 #i percent during the first plan year following the plan year described in clause 7iii71 and 7v7 #aj percent during any subsequent plan year4 7,d7 ,rules relating to automatic ,,ira arrangements ,for purposes of this paragraph-- 7i7 ,qualified percentage ,in the case of an automatic ,,ira arrangement1 the term qualified percentage means1 with respect to an employee for any taxable year1 a percentage equal to the minimum percentage described for the taxable year under subparagraph 7,c7 determined by substituting taxable year of the employee for the plan year each place it appears4 7ii7 ,payroll deduction contributions ,in the case of an automatic ,,ira arrangement1 any reference in this paragraph to elective contributions shall be treated as including a reference to payroll deduction contributions4 7#e7 ,investment requirements 7,a7 ,in general 7i7 ,default investments ,a plan or arrangement shall be treated as meeting the requirements of this paragraph if in the absence of an investment election by a participant or beneficiary1 amounts are invested only in the class of assets or funds described in subparagraph 7,b74 7ii7 ,required investment options in automatic ,,ira arrangement ,in addition to the default investment requirement of clause 7i71 an automatic ,,ira arrangement shall be treated as meeting the requirements of this paragraph if the arrangement provides the option of investing in each of the classes of assets or funds described in subparagraphs 7,b71 7,c71 7,d71 and 7,e71 and no other investment options4 7,b7 ,target date_/lifecycle option ,the class of assets or funds described in this clause is the class of assets or funds that constitutes an investment fund product or model portfolio described in ,department of ,labor regulation section #beej4djd;c-#e7;e77#d77;i74 7,c7 ,principal preservation ,the class of assets or funds described in this clause is the class of assets or funds that is designed to protect the principal of the individual on an ongoing basis4 7,d7 ,balanced option ,the class of assets or funds described in this clause is the class of assets or funds that constitutes a qualified default investment alternative under ,department of ,labor regulation section #beej4djd;c-#e7;e77#d77;ii74 7,e7 ,other ,any other class of assets or funds determined by the ,secretary to be a qualified investment for purposes of this section4 7#f7 ,fee requirements ,in the case of any plan or arrangement not otherwise subject to title ,i of the ,employee ,retirement ,income ,security ,act of #aigd1 under the fee requirements of this paragraph1 no participant1 beneficiary1 employer1 individual retirement account1 plan1 or arrangement may be charged unreasonable fees or expenses4 7#g7 ,lifetime income requirements 7,a7 ,in general ,except in the case of a plan maintained by an eligible employer 7as defined in section #djh7p77#b77;,c77i771 a plan or arrangement shall be treated as meeting the lifetime income requirement described in this paragraph if the plan or arrangement permits participants to elect to receive at least #ej percent of their vested account balance in a form of distribution described in section #dja7;a77#ch77;,b77iii74 7,b7 ,exception 7i7 ,in general ,this paragraph shall not apply with respect to any participant whose vested account balance is #bjj1jjj or less at the time of distribution4 7ii7 ,not treated as discriminatory in favor of highly compensated employees ,a plan shall not be treated as failing to meet the requirements of section #dja7;a77#d7 solely by reason of applying the exception of clause 7i7 to the requirements of subparagraph 7,a74 7#h7 ,automatic ,,ira arrangement 7,a7 ,in general ,for purposes of this paragraph1 the term automatic ,,ira arrangement means1 with respect to an employer 7and trustee or issuer designated by the employer71 an arrangement facilitated by the employer which meets the requirements of this paragraph and the contribution1 investment1 and fee requirements of paragraphs 7#d71 7#e71 and 7#f71 respectively1 and under which an employee-- 7i7 may elect-- 7,i7 to have the employer make payroll deduction deposits on behalf of the individual as payroll deduction contributions to an individual retirement account1 or 7,,ii7 to have such payments paid to the employee directly in cash1 7ii7 is treated as having made the election under clause 7i77,i7 at the level determined under paragraph 7#d77;,d7 until the individual makes an affirmative election not to have such contributions made 7or to have such contributions made at a level specified in the affirmative election71 and 7iii7 may elect to modify prospectively the level at which contributions are made and the manner in which such contributions are invested for such year4 7,b7 ,administrative requirements 7i7 ,payments ,the requirements of this paragraph shall not be treated as met with respect to any automatic ,,ira arrangement unless the employer makes the payments elected or treated as elected under subparagraph 7,a77i7 on or before the last day of the month following the month in which the compensation otherwise would have been payable to the employee in cash4 7ii7 ,notice of election period ,the requirements of this paragraph shall not be treated as met with respect to any year unless the employer notifies each employee eligible to participate1 within a reasonable period of time before the beginning of such year 7and1 for the first year the employee is so eligible1 a reasonable period of time before the first day such employee is so eligible71 of-- 7,i7 the opportunity to elect to have contributions made1 or to be treated as so electing1 under clause 7i77,i71 or 7ii71 of subparagraph 7,a71 7,,ii7 the opportunity to elect not to have payroll deduction contributions made or to have such contributions made at a different percentage or in a different amount1 and 7,,iii7 the opportunity under subparagraph 7,a77iii7 to modify the manner in which such amounts are invested for such year4 ,the employer shall provide such notice in paper form or1 if the employee so elects1 in electronic form4 7,c7 ,eligibility requirements 7i7 ,in general ,the requirements of this paragraph shall not be treated as met with respect to an automatic ,,ira arrangement facilitated by the employer unless all employees of the employer are eligible to participate in the arrangement4 7ii7 ,certain exclusions ,the following employees may be excluded from consideration in determining whether the requirements of this paragraph are met3 7,i7 ,individuals less than #ah years old ,any employee who has not attained age #ah4 7,,ii7 ,certain other employees ,any employee described in section #daj7;b77#c74 7,,iii7 ,service requirements ,any employee who has not completed at least #c months of service with the employer facilitating the arrangement4 7iii7 ,special rules for controlled groups ,for purposes of this subparagraph1 all eligible employees of an employer need not be eligible to participate in the same arrangement4 ,for purposes of this clause1 the term employer shall include all employers treated as a single employer under subsection 7b71 7c71 7m71 or 7o7 of section #dad4 7iv7 ,automatic ,i,r,as for non-employees ,the ,secretary shall by regulation or other guidance provide for making available automatic ,i,r,as to individuals who provide services that do not constitute employment4 7,d7 ,limits on contributions ,an employer shall not be treated as failing to satisfy the requirements of this section or any other provision of this title merely because-- 7i7 aggregate payroll deduction contributions by or on behalf of an individual to individual retirement accounts of the individual exceed the deductible amount in effect under section #bai7;b77#e7 7determined without regard to subparagraph 7,b7 thereof7 for any taxable year in which any payroll deduction contributions by the employer under an automatic ,,ira arrangement are made1 or 7ii7 the employer chooses to limit the payroll deduction contributions under this subsection on behalf of an employee for any calendar year in a manner reasonably designed to avoid exceeding such deductible amount4 7,e7 ,default treatment as ,roth ,,ira ,an employee on whose behalf payroll deduction contributions are made to an individual retirement account under subparagraph 7,a7 may elect1 at such time and in such manner and form as the ,secretary may prescribe1 whether to treat the individual retirement account as designated as a ,roth ,,ira4 ,if no such election is made1 the account shall be treated as designated as a ,roth ,,ira4 7,f7 ,deposits to individual retirement accounts of a designated trustee or issuer 7i7 ,in general ,an employer shall not be treated as failing to satisfy the requirements of this section1 or any other provision of this title1 merely because the employer makes all payroll deduction contributions on behalf of all employees 7or all employees who do not specify an individual retirement account1 trustee1 or issuer to receive the contributions7 to individual retirement accounts specified in clause 7ii74 7ii7 ,individual retirement accounts other than those selected by employee 7,i7 ,in general ,an employer may elect to have payroll deduction contributions for all employees participating in an automatic ,,ira arrangement made to individual retirement accounts of a trustee or issuer under the arrangement that has been designated by the employer1 but only if the provider of such accounts1 and the investments therein1 are identified on the website established under subparagraph 7,g77iii74 7,,ii7 ,notice ,subclause 7,i7 shall not apply unless each participant is notified in writing that the participant may direct the participant's balance be transferred without cost or penalty to another individual retirement account established by or on behalf of the participant4 ,such notice shall be in paper form or1 if the employee so elects1 electronic form4 7iii7 ,employers may permit employee to choose ,,ira ,if the employer so elects1 the arrangement may provide for an employee election to have payroll deduction contributions made to any individual retirement account specified by the employee4 7iv7 ,regulations ,the ,secretary may issue such regulations as are necessary to carry out the purposes of this subparagraph1 including establishment of procedures to assist employers and individuals in connecting with certified and available providers of individual retirement accounts and to communicate to individuals the importance of investment diversification4 7,g7 ,model notice1 etc ,the ,secretary shall-- 7i7 provide a model notice1 written in a manner calculated to be understandable to the average worker1 that is simple to use-- 7,i7 to notify employees of the requirement under this section for the employer to provide certain employees with the opportunity to participate in an automatic ,,ira arrangement1 and 7,,ii7 to satisfy the requirements of subparagraph 7,b77ii71 7ii7 provide model forms for enrollment1 including automatic enrollment1 in an automatic ,,ira arrangement1 7iii7 establish a website or other electronic means that small employers and individuals can access and use to obtain information on automatic ,,ira arrangements 7including clear1 standardized1 easy-to-compare information on fees and expenses1 investment options and returns1 and defaults in a format prescribed by the ,secretary7 and to obtain notices and forms1 and 7iv7 establish a process-- 7,i7 for the provider of an automatic ,,ira arrangement to demonstrate to the ,secretary that the arrangement is described in this paragraph and meets the requirements specified in paragraph 7#a77;,b71 and 7,,ii7 to certify any arrangement that the ,secretary determines so demonstrates1 to regularly monitor compliance and update such determinations and certifications1 and to list all arrangements so certified on the website described in clause 7iii7 as appropriate for use by employers and participants4 ,the information referred to in clause 7iii7 shall be provided in a manner designed to assist employers and providers by facilitating the identification by employers of private-sector providers of individual retirement accounts1 including the provider's investment options1 that are appropriate for use in automatic ,,ira arrangements4 7,h7 ,certain ,state-based arrangements ,an arrangement facilitated by an employer shall not fail to be treated as an automatic ,,ira arrangement merely because such arrangement is required1 provided for1 facilitated1 or otherwise offered1 in whole or in part1 by a ,state 7or a political subdivision1 agency1 or instrumentality thereof74 7,i7 ,individual retirement account ,for purposes of this paragraph1 the term individual retirement account shall have the meaning given such term by section #djh7;a71 except that such term shall include individual retirement annuities 7as defined in section #djh7;b774 4 7#b7 ,other rules applicable to automatic ,,ira arrangements 7,a7 ,penalty for failure to timely remit contributions to automatic ,,ira arrangements ,section #dige7;c7 is amended by adding at the end the following new paragraph3 7#g7 ,special rule for automatic ,,ira arrangements ,for purposes of paragraph 7#a71 if an employer is required under an automatic ,,ira arrangement 7as defined in section #dad7;dd77#a77;,b77 to deposit amounts withheld from an employee's compensation into an individual retirement account 7within the meaning of section #dad7;dd77#h77;,i77 but fails to do so within the time prescribed under section #dad7;dd77#h77;,b77i71 such amounts shall be treated as assets of the individual retirement account4 4 7,b7 ,waiver of early withdrawal penalty for certain distributions following initial election to participate in automatic ,,ira arrangement ,section #gb7t7 is amended by adding at the end the following new paragraph3 7#aa7 ,distribution following initial election to participate in automatic ,,ira arrangement ,paragraph 7#a7 shall not apply in the case of a distribution-- 7,a7 to an individual from an individual retirement account 7within the meaning of section #dad7;dd77#h77;,i77 that is part of an automatic ,,ira arrangement 7as defined in section #dad7;dd77#h77;,a771 and 7,b7 made not later than #ij days after the individual is first treated under clause 7ii7 of section #dad7;dd77#h77;,a7 as having made an election under clause 7i77,i7 of such section4 4 7,c7 ,automatic ,,ira ,advisory ,group 7i7 ,in general ,not later than #ij days after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall establish an ,automatic ,,ira ,advisory ,group 7hereinafter in this subparagraph referred to as the ,advisory ,group74 ,the purpose of the ,advisory ,group shall be to make recommendations1 advise1 and assist in the ,secretary's implementation and administration of paragraphs 7#e71 7#f71 and 7#h7 of section #dad7;dd7 of the ,internal ,revenue ,code of #aihf with respect to automatic ,,ira arrangements in the best financial interest of savers1 including-- 7,i7 the procedures and criteria for the periodic certification1 website listing1 and monitoring of arrangements and investment options that meet the requirements of those paragraphs1 7,,ii7 user-friendly disclosure regarding investment returns and risks1 terms1 fees1 and expenses to facilitate comparison1 7,,iii7 the use of low-cost investment options1 7,,iv7 the appropriate use of electronic and paper methods to provide notice and disclosure1 7,v7 any possible learnings or efficiencies based on the ,secretary's procedures and experience in approving nonbank individual retirement account trustees1 and 7,,vi7 such other related matters as may be determined by the ,secretary4 7ii7 ,membership ,the ,advisory ,group shall consist of not more than #ae members and shall be composed of-- 7,i7 such individuals as the ,secretary may consider appropriate to provide expertise regarding the financial needs and challenges of lower- and middle-income households1 7,,ii7 at least one individual who is an expert in retirement-related consumer protections or who represents the general public1 and 7,,iii7 at least one representative of the ,department of the ,treasury4 7iii7 ,compensation ,the members of the ,advisory ,group shall serve without compensation4 7iv7 ,administrative support ,the ,department of the ,treasury shall provide appropriate administrative support to the ,advisory ,group1 including technical assistance4 ,the ,advisory ,group may use the services and facilities of such ,department1 with or without reimbursement1 as determined by such ,department4 7v7 ,report by ,advisory ,group ,not later than #a year after the date of the enactment of this ,act1 the ,advisory ,group shall submit to the ,secretary of the ,treasury a report containing its recommendations4 ,the ,secretary may request that the ,advisory ,group submit subsequent reports4 7#c7 ,conforming amendment relating to qualified cash or deferred arrangements ,section #dja7k77#ae77;,b77i7 is amended by inserting or section #dad7;dd77#c77;,b77iii77,,ii7 after paragraph 7#b77;,d77ii7 in the matter preceding subclause 7,i7 thereof4 7b7 ,excise tax for failure ,to maintain or facilitate automatic contribution plans or arrangements 7#a7 ,in general ,chapter #dc is amended by adding at the end the following new section3 #dihj;,j4 ,failure to maintain or facilitate automatic contribution plans or arrangements 7a7 ,general rule 7#a7 ,in general ,there is hereby imposed a tax on the failure of an employer to maintain or facilitate an automatic contribution plan or arrangement4 7#b7 ,exception for arrangements under qualified ,state law ,paragraph 7#a7 shall not apply to an employer to the extent such employer facilitates an arrangement described in subsection 7f77#c77;,b7 under a qualified ,state law4 7b7 ,amount of tax 7#a7 ,in general ,the amount of the tax imposed by subsection 7a7 on any failure with respect to an employee shall be #aj for each day in the noncompliance period with respect to such failure4 7#b7 ,noncompliance period ,for purposes of this section1 the term noncompliance period means1 with respect to any failure1 the period-- 7,a7 beginning on the date such failure first occurs1 and 7,b7 ending on the earlier of-- 7i7 the date such failure is corrected1 or 7ii7 with respect to any employer1 the date that is #c months after the last date on which the employee is required to be eligible to participate in an automatic contribution plan or arrangement maintained or facilitated by such employer4 7#c7 ,adjustment for inflation 7,a7 ,in general ,in the case of any failure relating to maintaining or facilitating a plan or arrangement in a calendar year beginning after #bjbf1 the #aj amount under paragraph 7#a7 shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year determined by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,b7 ,rounding ,if any amount adjusted under subparagraph 7,a7 is not a whole dollar amount1 such amount shall be rounded to the nearest whole dollar amount4 7c7 ,limitations on amount of tax 7#a7 ,tax not to apply where failure not discovered exercising reasonable diligence ,no tax shall be imposed by subsection 7a7 on any failure during any period for which it is established to the satisfaction of the ,secretary that none of the persons referred to in subsection 7e7 knew1 nor exercising reasonable diligence would have known1 that such failure existed4 7#b7 ,tax not to apply to failures corrected within #i months ,no tax shall be imposed by subsection 7a7 on any failure if-- 7,a7 such failure was due to reasonable cause and not to willful neglect1 and 7,b7 such failure is corrected during the #i-month period beginning on the first date any of the persons referred to in subsection 7e7 knew that such failure existed1 or exercising reasonable diligence would have known4 7#c7 ,overall limitation for unintentional failures ,in the case of failures which are due to reasonable cause and not to willful neglect-- 7,a7 ,general rule ,the tax imposed by subsection 7a7 for failures during the taxable year of the employer shall not exceed #ejj1jjj4 7,b7 ,taxable years in the case of certain controlled groups ,for purposes of this subparagraph1 if not all persons who are treated as a single employer for purposes of this section have the same taxable year1 the taxable years taken into account shall be determined under principles similar to the principles of section #aefa4 7#d7 ,waiver by ,secretary ,in the case of a failure which is due to reasonable cause and not to willful neglect1 the ,secretary may waive part or all of the tax imposed by subsection 7a7 to the extent that the payment of such tax would be excessive relative to the failure involved4 7d7 ,tax not to apply in certain cases ,this section shall not apply in the case of-- 7#a7 any employer that employed no more than #aj employees each of whom received at least #e1jjj of compensation from the employer during the prior calendar year1 7#b7 any employer with respect to a governmental plan 7within the meaning of section #dad7;d771 7#c7 any employer with respect to a church plan 7within the meaning of section #dad7;e771 or 7#d7 any employer that has been in existence for fewer than #b years1 taking into account all predecessor employers4 7e7 ,liability for tax ,the employer shall be liable for the tax imposed by subsection 7a7 on a failure4 ,all employers1 determined without regard to subsection 7f77#b71 shall be jointly and severally liable for the liability of any other employer with which they are aggregated under subsection 7f77#b74 7f7 ,definitions ,for purposes of this section-- 7#a7 ,automatic contribution plan or arrangement ,the term automatic contribution plan or arrangement has the meaning given such term under section #dad7;dd71 and 7#b7 ,employer ,the term employer includes all employers treated as a single employer under subsection 7b71 7c71 7m71 or 7o7 of section #dad4 7#c7 ,qualified ,state law ,the term qualified ,state law means a ,state law 7as it may be amended from time to time7 that-- 7,a7 was enacted before ,january #a1 #bjbg1 and 7,b7 requires certain employers to facilitate an automatic ,,ira arrangement pursuant to a payroll deduction savings program of the ,state4 4 7#b7 ,clerical amendment ,the table of sections for chapter #dc is amended by adding at the end the following new item3 ,sec4 #dihj;,j4 ,failure to maintain or facilitate automatic contribution plans or arrangements4 4 7c7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjbf4 #c4 ,credit for certain small employer automatic ,,ira arrangements 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a is amended by adding at the end the following new section3 #de;,,bb4 ,credit for certain small employer automatic ,,ira arrangements 7a7 ,general rule ,for purposes of section #ch1 in the case of an eligible employer1 the small employer automatic ,,ira arrangement credit determined under this section for any taxable year in the credit period is #ejj4 7b7 ,definitions ,for purposes of this section-- 7#a7 ,eligible employer ,the term eligible employer means1 with respect to the calendar year in which the taxable year begins1 an employer which-- 7,a7 7i7 facilitates an automatic ,,ira arrangement 7as defined in section #dad7;dd77#h771 or an arrangement described in #dihj;,j7a77#b71 and 7ii7 is described in #djh7p77#b77;,c77i71 and 7,b7 did not maintain an eligible employer plan during the portion of the calendar year preceding the commencement of such arrangement and the #b preceding calendar years4 7#b7 ,credit period ,the term credit period means the first #c calendar years beginning after the date of the enactment of this section in which the eligible employer participates in the arrangement4 7#c7 ,eligible employer plan ,the term eligible employer plan means a qualified employer plan within the meaning of section #digb7;d74 7c7 ,other rules ,for purposes of this section1 rules similar to the rules of section #de;,e7e77#b7 shall apply4 4 7b7 ,credit allowed as part of general business credit ,section #ch7;b7 is amended by striking plus at the end of paragraph 7#dj71 by striking the period at the end of paragraph 7#da7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#db7 the small employer automatic ,,ira arrangement credit determined under section #de;,,bb7a74 4 7c7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a is amended by adding at the end the following new item3 ,sec4 #de;,,bb4 ,credit for certain small employer automatic ,,ira arrangements4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbd4 #d4 ,treatment of automatic ,,ira arrangements under ,state law 7a7 ,preemption of ,state law ,this ,act1 and the amendments made thereby1 shall supersede any law of a ,state which would directly or indirectly prohibit or restrict an automatic ,,ira arrangement 7as defined in section #dad7;dd77#h7 of the ,internal ,revenue ,code of #aihf74 7b7 ,employers maintaining automatic ,,ira arrangement 7#a7 ,in general ,any employer maintaining such an arrangement shall not be subject to any requirement imposed by a ,state or political subdivision thereof to facilitate a payroll deduction savings program of a ,state or political subdivision thereof4 7#b7 ,qualified ,state law exception ,paragraph 7#a7 shall not apply with respect to any employer to the extent that such employer facilitates an arrangement under a qualified ,state law 7as defined in section #dihj;,j7f77#c7 of the ,internal ,revenue ,code of #aihf7 for employees with respect to whom such qualified ,state law applies4