text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Air Line Pension Act of 2003''.
  
  SEC. 2. MODIFICATION OF FUNDING REQUIREMENTS FOR CERTAIN PLANS.
  
      (a) Funding Rules for Certain Plans.--
              (1) In general.--Notwithstanding any provision of the 
          Internal Revenue Code of 1986 or the Employee Retirement Income 
          Security Act of 1974 to the contrary, the provisions of 
          subsections (b), (c), and (d) shall apply for any plan year 
          beginning after December 27, 2002, in the case of a defined 
          benefit plan--
                      (A) that is established and maintained by a 
                  commercial passenger air carrier; and
                      (B) that has a funded percentage of less than 80 
                  percent as of January 1, 2003.
              (2) Funded percentage.--For purposes of this section, the 
          term ``funded percentage'' means the quotient (expressed as a 
          percentage) derived by dividing--
                      (A) the market value of plan assets as of January 
                  1, 2003 (excluding receivable contributions), by
                      (B) the current liability of the plan as of January 
                  1, 2003.
              (3) Interest rate.--In determining current liability for 
          purposes of paragraph (2), the assumed interest rate shall be 
          6.65 percent.
              (4) Estimation of current liability.--If the valuation date 
          for the plan is not January 1, 2003, the current liability as 
          of January 1, 2003, shall be estimated based on generally 
          accepted actuarial principles and practices.
      (b) Moratorium on Deficit Reduction Contribution.--
              (1) In general.--In applying section 412(l)(9)(A) of such 
          Code and section 302(d)(9)(A) of such Act with respect to a 
          plan described in subsection (a)(1), the funded current 
          liability percentage of the plan shall be treated as not less 
          than 90 percent for plan years beginning after December 27, 
          2002 and before December 27, 2007.
              (2) Termination of moratorium in certain cases.--If the 
          funded current liability percentage of the plan, without 
          application of paragraph (1), is 90 percent or greater during 
          any plan year beginning after December 27, 2002 and before 
          December 27, 2007, paragraph (1) shall cease to apply to the 
          plan for plan years beginning with or after such plan year.
              (3) Extension of amortization periods.--For plan years for 
          which paragraph (1) applies in the case of the plan, net 
          experience gains and net experience losses shall be amortized 
          under sections 412(b)(2)(B)(iv) and 412(b)(3)(B)(ii) of such 
          Code (respectively) and sections 302(b)(2)(B)(iv) and 
          302(b)(3)(B)(ii) of such Act (respectively), over a period of 
          15 plan years.
              (4) Option to combine or to offset amortization bases.--For 
          the first plan year for which paragraph (1) applies with 
          respect to the plan, amounts required to be amortized under 
          paragraphs (2) and (3) of section 412(b) of such Code and 
          paragraphs (2) and (3) of section 302(b) of such Act may be 
          combined into one amount under such sections, and may be offset 
          against other amounts required to be amortized under such 
          sections, with the resulting amount in either case to be 
          amortized over a period of 15 plan years.
      (c) Amortization of 2008 Unfunded Current Liability.--
              (1) In general.--In such form and manner as the Secretary 
          of the Treasury may prescribe, the sponsor of a plan described 
          in subsection (a)(1) may make a one-time, irrevocable election 
          with the Secretary of the Treasury to amortize the unfunded 
          current liability for the first plan year beginning after 
          December 27, 2007, on an interest-only basis for the first 5 
          plan years (beginning with such first plan year) and thereafter 
          in equal annual installments over a period of 15 plan years 
          (beginning with the first plan year after December 27, 2012).
              (2) Determination of 2008 unfunded current liability in 
          calculating deficit reduction contribution after moratorium 
          ends.--If the plan sponsor makes an election under paragraph 
          (1) with respect to the plan, the unfunded current liability of 
          the plan for the first plan year after December 27, 2007, shall 
          be calculated as follows:
                      (A) such unfunded current liability shall equal the 
                  unfunded current liability as of the first day of such 
                  first plan year, and
                      (B) such unfunded current liability shall be 
                  calculated using the actuarial value of assets as of 
                  the first day of such first plan year.
              (3) Use of 2008 unfunded current liability in calculating 
          deficit reduction after moratorium ends.--If the plan sponsor 
          makes an election under paragraph (1) with respect to the plan, 
          the plan's unfunded old liability, for purposes of section 
          412(l) of such Code and section 302(l) of such Act, shall be 
          deemed equal to the unfunded current liability calculated under 
          paragraph (2) for the first plan year after December 27, 2007, 
          and the plan's unfunded old liability amount for any plan year, 
          for purposes of section 412(l) of such Code and section 302(l) 
          of such Act, shall be the amount necessary to amortize the 
          unfunded old liability under the plan as described in paragraph 
          (1).
              (4) Cessation of modifications.--If the funded current 
          liability percentage of the plan, determined without regard to 
          this section, is 90 percent or greater for any plan year after 
          December 27, 2002, this subsection shall cease to apply to the 
          plan for plan years beginning with or after such plan year.
      (d) Recognition of Waiver in Deficit Reduction Contribution.--For 
  any plan described in subsection (a)(1), the amount referred to in 
  clause (ii) of section 412(l)(8)(A) of such Code and section 
  302(d)(8)(A) of such Act shall be deemed to be an amount equal to the 
  sum of--
              (1) the value of the plan's assets determined under section 
          412(c)(2) of such Code and section 302(c)(2) of such Act, and
              (2) the unamortized portion of any waived funding 
          deficiency.
  
  SEC. 3. RESTORATION OF CERTAIN PLANS TERMINATING IN 2003.
  
      (a) In General.--Notwithstanding any provision of the Internal 
  Revenue Code of 1986 or the Employee Retirement Income Security Act of 
  1974, the provisions of subsection (b) shall apply to any defined 
  benefit plan--
              (1) that is maintained by a commercial passenger air 
          carrier,
              (2) that is maintained for the benefit of such carrier's 
          employees pursuant to a collective bargaining agreement, and
              (3) that terminated during the calendar year 2003.
      (b) Restoration of Plan.--Not later than December 31, 2003, the 
  Pension Benefit Guaranty Corporation shall restore any plan described 
  in paragraph (1) to the plan's pre-termination status and the control 
  of the plan's assets and liabilities shall be transferred to the 
  employer, unless the collective bargaining agreement provides that the 
  plan should not be restored.
      (c) Exclusion of Expected Increase in Current Liability.--In 
  applying section 412(l)(1)(A)(i) of such Code and section 
  302(d)(1)(A)(i) of such Act with respect to a plan restored under 
  subsection (b), any expected increase in current liability due to 
  benefits accruing during each plan year as described in section 
  412(1)(2)(C) of such Code and section 302(d)(2)(C) of such Act shall be 
  excluded.
      (d) Amortization of Unfunded Amounts Under Restoration Payment 
  Schedule.--
              (1) 2004 unfunded accrued liability.--
                      (A) In general.--In the case of a plan restored 
                  under subsection (b)--
                              (i) the initial post-restoration valuation 
                          date for a plan described in subsection (a) 
                          shall be January 1, 2004,
                              (ii) the initial restoration amortization 
                          base for a plan described in subsection (a) 
                          shall be an amount equal to the excess of--
                                      (I) the accrued benefit liabilities 
                                  returned by the Corporation, over
                                      (II) the market value of plan 
                                  assets returned by the Corporation, and
                              (iii) the initial restoration amortization 
                          base shall be amortized in level annual 
                          installments over a period of 30 years after 
                          the initial post-restoration valuation date, 
                          and the funding standard account of the plan 
                          under section 412 of such Code and section 302 
                          of such Act shall be charged with such 
                          installments.
                      (B) Other special funding rules remain 
                  applicable.--At the election of the plan sponsor, the 
                  provisions of subsections (b), (c), and (d) of section 
                  2 shall apply with respect to the plan.
              (2) Rules of special application.--In applying the 30-year 
          amortization described in paragraph (1)(A)--
                      (A) the assumed interest rate shall be the 
                  valuation interest rate used to determine the accrued 
                  liability under section 412(c) of such Code and section 
                  302(c) of such Act,
                      (B) the actuarial value of assets as of the initial 
                  post-restoration valuation date shall be reset to the 
                  market value of assets with a 5-year phase-in of 
                  unexpected investment gains or losses on a prospective 
                  basis, and
                      (C) for plans using the frozen initial liability 
                  (FIL) funding method in accordance with section 412(c) 
                  of such Code and section 302(c) of such Act, the 
                  initial unfunded liability used to determine normal 
                  cost shall be reset to the initial restoration 
                  amortization base.
      (e) Quarterly Contributions.--The requirements of section 412(m) of 
  such Code and section 302(e) of such Act shall not apply to a plan 
  restored under subsection (b) until the plan year beginning on the 
  initial post-restoration valuation date. The required annual payment 
  for that year shall be the lesser of--
              (1) the amount determined under section 412(m)(4)(B)(i) of 
          such Code and section 302(e)(4)(B)(i) of such Act, or
              (2) 100 percent of the amount required to be contributed 
          under the plan for the plan year beginning January 1, 2003 and 
          ending on the date of plan termination.
      (f) Resetting of Funding Standard Account Balances.--In the case of 
  a plan restored under subsection (b), any accumulated funding 
  deficiency or credit balance in the funding standard account under 
  section 412 of such Code or section 302 of such Act shall be set equal 
  to zero as of the initial post-restoration valuation date.
  
  SEC. 4. PBGC LIABILITY LIMITED.
  
      In the case of any plan--
              (1) which is described in section 2(a)(1), and which 
          terminates at a time when section 2(b)(1) applies to the plan, 
          or at a time when the unfunded current liability of the plan 
          for the first plan year after December 27, 2007, is being 
          amortized on an interest-only basis under section 2(c), or
              (2) which is described in section 3(a), which is restored 
          pursuant to section 3(b), and which subsequently terminates 
          with a date of plan termination prior to the end of the fifth 
          plan year beginning after December 27, 2007,
  section 4022 of the Employee Retirement Income Security Act of 1974 
  shall be applied as if the plan had been amended to provide that 
  participants would receive no credit for benefit accrual purposes under 
  the plan for service on and after the first day of the plan year 
  beginning after the date of the enactment of this Act.
  
  SEC. 5. EFFECTIVE DATE.
  
      The provisions of this Act shall apply to plan years beginning 
  after December 27, 2002.
target: Air Line Pension Act of 2003 - Sets forth special funding requirements for certain pension plans maintained by commercial passenger air carriers (plans), notwithstanding any contrary provisions of the Internal Revenue Code or of the Employee Retirement Income Security Act of 1974 (ERISA).
  
  Provides for such plans, if they have a funded percentage of less than 80 percent as of January 1, 2003, the following: (1) modifications of funding rules, including funded percentage, assumed interest rate for determining current liability, and estimation of current liability; (2) a moratorium on the deficit reduction contribution, under specified conditions; (3) a one-time amortization of 2008 unfunded current liability; and (4) recognition of a waiver in the deficit reduction contribution.
  
  Provides for such plans, if they are maintained for benefit of the carrier's employees pursuant to a collective bargaining agreement and if they terminated during calendar year 2003, the following: (1) restoration by the Pension Benefit Guaranty Corporation (PBGC) to the plan's pre-termination status and transfer of control of plan assets and liabilities to the employer, unless the collective bargaining agreement provides that the plan should not be restored; (2) exclusion of any expected increase in current liability due to benefits accruing during each plan year; (3) amortization of unfunded amounts under the restoration payment schedule; (4) inapplicability of certain contribution requirements to a restored plan until a plan year beginning on the initial post-restoration valuation date, with modified required annual payments; and (5) resetting of funding standard account balances.
  
   Limits PBGC liability with respect to certain plans under this Act.
feat_title: To provide special funding requirements for certain pension plans maintained by commercial passenger air carriers.