[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5020 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 5020

   To amend the Internal Revenue Code of 1986 to permit penalty-free 
  withdrawals by unemployed individuals from certain retirement plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            August 23, 1994

  Mr. Lazio introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to permit penalty-free 
  withdrawals by unemployed individuals from certain retirement plans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT PENALTY 
              DURING PERIODS OF UNEMPLOYMENT.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to exceptions to 10-percent additional 
tax on early distributions from qualified retirement plans) is amended 
by adding at the end the following new subparagraph:
                    ``(D) Distributions from certain plans during 
                periods of unemployment.--Distributions to an 
                individual from an individual retirement plan, or from 
                amounts attributable to employer contributions made 
                pursuant to elective deferrals described in 
                subparagraph (A) or (C) of section 402(g)(3) or section 
                501(c)(18)(D)(iii), during a period--
                            ``(i) for which such individual is 
                        receiving unemployment compensation (as defined 
                        in section 85(b)), or
                            ``(ii) for which such individual would have 
                        been entitled to receive unemployment 
                        compensation (as so defined) but for--
                                    ``(I) the termination of the period 
                                during which such compensation was 
                                payable, or
                                    ``(II) an exhaustion of such 
                                individual's rights to such 
                                compensation.
                The preceding sentence shall apply only to the extent 
                that the amount of the distributions during any period 
                do not exceed the reasonable living expenses of the 
                taxpayer for such period.''
    (b) Conforming Amendments.--
            (1) Subparagraph (B) of section 72(t)(2) of such Code is 
        amended by striking ``or (C)'' and inserting ``, (C) or (D)''.
            (2) Section 401(k)(2)(B)(i) of such Code is amended by 
        striking ``or'' at the end of subclause (III), by striking 
        ``and'' at the end of subclause (IV) and inserting ``or'', and 
        by inserting after subclause (IV) the following new subclause:
                                    ``(V) the date on which a period 
                                referred to in section 72(t)(2)(D) 
                                begins, and''.
            (3) Section 403(b)(11) of such Code is amended by striking 
        ``or'' at the end of subparagraph (A), by striking the period 
        at the end of subparagraph (B) and inserting ``, or'', and by 
        inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) for distributions to which 72(t)(2)(D) 
                applies.''
    (c) Effective Date.--The amendments made by this section shall 
apply to payments and distributions after the date of the enactment of 
this Act.
                                 <all>