115 STAT. 142 PUBLIC LAW 107-16-JUNE 7, 2001 29 USC 1082. Applicability. 26 USC 412 note. Applicability. 26 USC 404 note. 26 USC 414 note. "(i) CURRENT YEAR.—Except as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year. "(ii) USE OF PRIOR YEAR VALUATION. —The valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 125 percent of the plan's current liability (as defined in paragraph (7)(B)). "(iii) ADJUSTMENTS.—Information under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.". (b) AMENDMENT OF ERISA.— Paragraph (9) of section 302(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(c)) is amended— (1) by inserting "(A)" after "(9)", and (2) by adding at the end the following: "(B)(i) Except as provided in clause (ii), the valuation referred to in subparagraph (A) shall be made as of a date within the plan year to which the valuation refers or within one month prior to the beginning of such year. "(ii) The valuation referred to in subparagraph (A) may be made as of a date within the plan year prior to the year to which the valuation refers if, as of such date, the value of the assets of the plan are not less than 125 percent of the plan's current liability (as defined in paragraph (7)(B)). "(iii) Information under clause (ii) shall, in accordance with regulations, be actuarially adjusted to reflect significant differences in participants.". (c) EFFECTIVE DATE. —The amendments made by this section shall apply to plan years beginning after December 31, 2001. SEC. 662. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT LOSS OF DIVIDEND DEDUCTION. (a) IN GENERAL.—Section 404(k)(2)(A) (defining applicable dividends) is amended by striking "or" at the end of clause (ii), by redesignating clause (iii) as clause (iv), and by inserting after clause (ii) the following new clause: "(iii) is, at the election of such participants or their beneficiaries— "(I) payable as provided in clause (i) or (ii), or "(II) paid to the plan and reinvested in qualifying employer securities, or". (b) STANDARDS FOR DISALLOWANCE.—Section 404(k)(5)(A) (relating to disallowance of deduction) is amended by inserting "avoidance or" before "evasion". (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 663. REPEAL OF TRANSITION RULE RELATING TO CERTAIN HIGHLY COMPENSATED EMPLOYEES. (a) IN GENERAL. —Paragraph (4) of section 1114(c) of the Tax Reform Act of 1986 is hereby repealed.
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