PUBLIC LAW 106-170—DEC. 17, 1999 113 STAT. 1935 2 taxable years immediately preceding the taxable year of the qualified transfer. "(B) APPLICABLE EMPLOYER COST.— For purposes of this paragraph, the term 'applicable employer cost' means, with respect to any taxable year, the amount determined by dividing— "(i) the qualified current retiree health liabilities of the employer for such taxable year determined— "(I) without regard to any reduction under subsection (e)(1)(B), and "(II) in the case of a taxable year in which there was no qualified transfer, in the same manner as if there had been such a transfer at the end of the taxable year, by "(ii) the number of individuals to whom coverage for applicable health benefits was provided during such taxable year. "(C) ELECTION TO COMPUTE COST SEPARATELY. — An employer may elect to have this paragraph applied separately with respect to individuals elig:ible for benefits under title XVIII of the Social Security Act at any time during the taxable year and with respect to individuals not so eligible. "(D) COST MAINTENANCE PERIOD.— For purposes of this paragraph, the term 'cost maintenance period' means the period of 5 taxable years beginning with the taxable year in which the qualified transfer occurs. If a taxable year is in two or more overlapping cost maintenance periods, this paragraph shall be applied by taking into account the highest applicable employer cost required to be provided under subparagraph (A) for such taxaible year. "(E) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to prevent an employer who significantly reduces retiree health coverage during the cost maintenance period from being treated as satisfying the minimum cost requirement of this subsection.". (2) CONFORMING AMENDMENTS. — (A) Clause (iii) of section 420(b)(1)(C) of such Code 26 USC 420. is amended by striking "benefits" and inserting "cost". (B) Subparagraph (D) of section 420(e)(1) of such Code is amended by striking "and shall not be subject to the minimum benefit requirements of subsection (c)(3)" and inserting "or in calculating applicable employer cost under subsection (c)(3)(B)". (c) EFFECTIVE DATES. — 26 USC 420 note. (1) IN GENERAL.— The amendments made by this section shall apply to qualified transfers occurring after the date of the enactment of this Act. (2) TRANSITION RULE.—If the cost maintenance period for any qualified transfer after the date of the enactment of this Act includes any portion of a benefit maintenance period for any qualified transfer on or before such date, the amendments made by subsection (b) shall not apply to such portion of the cost maintenance period (and such portion shall be treated as a benefit maintenance period). 69-194-01- 14:QL3Part3
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