No time better than the present: Let’s get rid of the archaic, unfair rules that annually sting mutual-fund investors with surprise tax bills.

The fund industry and investor groups have long lobbied unsuccessfully to change the tax treatment of annual capital gains distributions. But the movement got a push a couple of weeks ago when three U.S. senators introduced companion legislation to a House bill called – take a deep breath – the Generating Retirement Ownership Through Long-Term Holding Act. The GROWTH Act.

Granted, it’s a tough time to push for anything that looks like a tax cut. But this is not a cut; it’s a deferral. It would put funds on the same footing as stocks and other investments, letting the investor decide when a taxable gain would be triggered.

Currently, fund managers control that. Funds are required to pay to shareholders the net profits realized on stocks, bonds or other fund-portfolio holdings the managers sell during the year.

These distributions typically arrive every November and December. Unless the fund is held in a tax-deferred account such as a 401(k) or IRA, the payment is taxed as a short- or long-term capital gain – even if the money is immediately reinvested in more fund shares.

In the record year, 2000, funds distributed about $114 billion to investors with taxable accounts.

Distributions have been relatively small in the post-bubble years since then – $22 billion last year, for instance. But they could soar again if the market takes off.

Indeed, some funds could well have whopping distributions this year, as managers lock in gains by selling winning stocks. Lipper, the fund-tracking company, says natural resources funds, which own lots of energy stocks, are up nearly 30 percent this year, while Latin American funds have gained 34 percent.

The GROWTH Act would eliminate the immediate tax on any capital gains distribution the investor automatically reinvests in more of the fund’s shares. Instead, the investor would be taxed on the gain realized when those shares are sold, which could be many years later.

For the investor, there would be two benefits:

The investor would determine when that profit is taken and, hence, when the tax will be due – just as one does in deciding when to sell a money-making stock. That would make it easier to postpone taxable gains until it’s convenient – when the investor has an offsetting tax loss, for instance.

Money that currently is spent paying annual taxes on distributions would remain in the investor’s accounts longer, continuing to compound, thus increasing investment returns over the long term.

Want to lobby Congress? Find contact information for your senators and representative at www.congress.org.

Meanwhile, since there’s no guarantee the GROWTH ACT will pass this year, or any other, investors should keep using some basic tax-minimizing strategies.

One is to invest in “tax-managed” funds designed to reduce the impact of annual distributions. These funds use techniques such as selling losing stocks to offset gains, or holding winners long enough to get the lower tax rate that applies to investments held at least 12 months.

Also, index-style funds and exchange-traded funds tend to have small distributions – and small annual tax bills – because they hold stocks for the long term. In contrast, many actively managed funds generate big distributions because their managers are selling winners in favor of the next hot prospect.

If you are attracted to a fund that often has big distributions, consider buying it through your 401(k) or IRA, since there is no annual tax on distributions in those accounts.

You can hunt for tax-managed funds and other tax-efficient funds with the screeners at www.morningstar.com, the site of fund-tracking company Morningstar Inc.