[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 615 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 615

      To amend the Internal Revenue Code of 1986 to permit early 
distributions from employee stock ownership plans for higher education 
              expenses and first-time homebuyer purchases.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 8, 1999

  Mr. Crane 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 early 
distributions from employee stock ownership plans for higher education 
              expenses and first-time homebuyer purchases.

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

SECTION 1. EARLY DISTRIBUTIONS FROM EMPLOYEE STOCK OWNERSHIP PLANS FOR 
              HIGHER EDUCATION EXPENSES AND FIRST-TIME HOMEBUYER 
              PURCHASES.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to 10-percent additional tax on early 
distributions from qualified retirement plans) is amended by adding at 
the end the following new subparagraph:
                    ``(G) Distributions from employee stock ownership 
                plans for higher education expenses and first-time 
                homebuyer purchases.--
                            ``(i) In general.--Distributions made to 
                        the employee from an employee stock ownership 
                        plan (within the meaning of section 
                        4975(e)(7)), the amount of which does not 
                        exceed the sum of--
                                    ``(I) qualified higher education 
                                expenses (as defined by paragraph (7)) 
                                reduced by the amount of such expenses 
                                taken into account under subparagraph 
                                (E), and
                                    ``(II) qualified first-time 
                                homebuyer distributions (as defined by 
                                paragraph (8)) reduced by the amount of 
                                such distributions taken into account 
                                under subparagraph (F).
                            ``(ii) Limitation.--A distribution may only 
                        be taken into account under clause (i) if--
                                    ``(I) such distribution is in the 
                                form of either employer securities 
                                (within the meaning of section 409(l)) 
                                or cash proceeds resulting from the 
                                sale of such securities made not more 
                                than 180 days before the date of such 
                                distribution for the purposes of such 
                                distribution,
                                    ``(II) such securities so 
                                distributed or sold were held by such 
                                plan for at least 5 years before the 
                                date of such distribution or, if 
                                applicable, sale, and
                                    ``(III) the number of shares in 
                                each class of such securities so 
                                distributed or sold, when added to all 
                                previous distributions and sales of 
                                each such class of such securities for 
                                such purposes on behalf of such 
                                employee, does not exceed 10 percent of 
                                the aggregate number of shares of each 
                                class of such securities allocated to 
                                the account of such employee under such 
                                plan.
                            ``(iii) Valuation of distributed 
                        securities.--For purposes of clause (ii), the 
                        value of a security shall be the value of such 
                        security on the date of distribution.''.
    (b) Conforming Amendments.--
            (1) Paragraph (7) of section 72(t) of such Code is amended 
        by striking ``paragraph(2)(E)'' and inserting ``subparagraphs 
        (E) and (G) of paragraph (2)''.
            (2) Paragraph (8) of section 72(t) of such Code is amended 
        by striking ``paragraph(2)(F)'' and inserting ``subparagraphs 
        (F) and (G) of paragraph (2)''.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions made after December 31, 1999.
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