To express the sense of the Senate on the coordination of rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 with the Internal Revenue Code of 1986.

SA 3164. Mr. GREGG submitted an amendment intended to be proposed by him to the bill S. 2400, to authorize appropriations for fiscal year 2005 for military activities of the Department of Defense, for military construction, and for defense activities of the Department of Energy, to prescribe personnel strengths for such fiscal year for the Armed Services, and for other purposes; which was ordered to lie on the table; as follows:

On page 280, after line 22, insert the following:

SEC. 1068. COORDINATION OF USERRA WITH OTHER FEDERAL LAWS.

(a) Treatment of Differential Payment as Wages for Purposes of Income Tax Withholding.--Section 4302 of title 38, United States Code, is amended by adding at the end the following:

“(c)(1) For purposes of chapter 24 of the Internal Revenue Code of 1986 (relating to collection of income tax at source on wages), any differential wage payment shall be treated as a payment of wages by the employer to the employee.

“(2) For purposes of paragraph (1), the term ‘differential wage payment' means any payment which--

“(A) is made by an employer to an employee with respect to any period during which the employee is performing service in the uniformed services while on active duty for a period of more than 30 days, and

“(B) represents all or a portion of the difference between the wages the employee would have received from the employer if not performing service in the uniformed services and the wages paid for performing such service.”.

(b) Continued Contributions to Pension Plans.--Section 4318 of title 38, United States Code, is amended by adding at the end the following:

“(c) For purposes of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, any employer or employee contributor to an employee pension benefit plan to which this section applies with respect to any period during which the employee is performing service in the uniformed services while on active duty for a period of more than 30 days shall be treated as a contribution with respect to a current employee of the employer.”.