PUBLIC LAW 96-364—SEPT. 26, 1980
94 STAT. 1305
churches which is exempt from tax under section 501 of the Internal Revenue Code of 1954 fails to meet one or more of the requirements of 26 USC 501. this paragraph and corrects its failure to meet such requirements within the correction period, the plan shall be deemed to meet the requirements of this paragraph for the year in which the correction was made and for all prior years. "(ii) If a correction is not made within the correction period, the plan shall be deemed not to meet the requirements of this paragraph beginning with the date on which the earliest failure to meet one or more of such requirements occurred. "(iii) For purposes of this subparagraph, the term 'correction "Correction period' means—
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"(I) the period ending 270 days after the date of mailing by the Secretary of a notice of default with respect to the plan's failure to meet one or more of the requirements of this paragraph; or "(II) any period set by a court of competent jurisdiction after a final determination that the plan fails to meet such requirements, or, if the court does not specify such period, any reasonable period determined by the Secretary on the basis of all the facts and circumstances, but in any event not less than 270 days after the determination has become final; or "(III) any additional period which the Secretary determines is reasonable or necessary for the correction of the default, whichever has the latest ending date.". (b) Section 414(e) of the Internal Revenue Code of 1954 (defining 26 USC 414. church plan) is amended to read as follows: "(e) CHURCH PLAN.—
"(1) IN GENERAL.—For purposes of this part, the term 'church plan' means a plan established and maintained (to the extent required in paragraph (2)(B)) for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501. "(2) CERTAIN PLANS EXCLUDED.—The term 'church plan' does not include a plan—
^ "(A) which is established and maintained primarily for the benefit of employees (or their beneficiaries) of such church or convention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513); or 26 USC 513. "(B) if less than substantially all of the individuals included in the plan are individuals described in paragraph (1) or (3)(B) (or their beneficiaries). "(3) DEFINITIONS AND OTHER PROVISIONS.—For purposes of this subsection— "(A) TREATMENT AS CHURCH PLAN.—A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches. "(B) EMPLOYEE DEFINED.—The term employee of a church or a convention or association of churches shall include—
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