; or (2) allows all covered employers in the State to make contributions to an individual retirement plan (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986) on behalf of the employees of the employer, such State may prohibit employers in the State from making contributions to the American Savings Account Fund on behalf of their employees, and section 302 shall not apply to covered employers to which such prohibition applies. (b) Exemption For purposes of this Act, the term employee pension benefit plan shall not include a payroll deduction program established by a State for the purpose of making contributions to one or more individual retirement plans (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986), including such a program which provides for automatic enrollment. (c) Waiver of penalty The penalty under section 6672(f) of the Internal Revenue Code of 1986 shall not apply to a failure to make a contribution on behalf of a qualified employee if the employer makes contributions to a State plan described in subsection (a) or (b) on behalf of such employee that satisfy the applicable requirements of such State plan. The employer shall certify to the Secretary of the Treasury, in such manner as shall be determined by such Secretary, that such contributions have been made. (d) Covered employer For purposes of this section, the term covered employer means an employer— (1) that does not provide the opportunity for employees to participate in a defined contribution plan (within the meaning of section 414(i) of the Internal Revenue Code of 1986) maintained by the employer