[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 3072 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 3072

To amend the Internal Revenue Code of 1986 to make inapplicable the 10 
  percent additional tax on early distributions from certain pension 
                   plans of public safety employees.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 8, 2002

  Mr. Inhofe introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to make inapplicable the 10 
  percent additional tax on early distributions from certain pension 
                   plans of public safety employees.

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

SECTION 1. INAPPLICABILITY OF 10 PERCENT ADDITIONAL TAX ON EARLY 
              DISTRIBUTIONS OF PENSION PLANS OF PUBLIC SAFETY 
              EMPLOYEES.

    (a) In General.--Section 72(t)(2) of the Internal Revenue Code of 
1986 (relating to subsection not to apply to certain distributions) is 
amended by adding at the end the following new subsection:
                    ``(G) DROP distributions to qualified public safety 
                employees in governmental plans.--
                            ``(i) In general.--Distributions to an 
                        individual who is a qualified public safety 
                        employee from a governmental plan within the 
                        meaning of section 414(d) to the extent such 
                        distributions are attributable to a DROP 
                        benefit.
                            ``(ii) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) DROP benefit.--The term `DROP 
                                benefit' means a feature of a 
                                governmental plan under which an 
                                employee elects to receive credits to 
                                an account (including a notional 
                                account) in the plan in lieu of 
                                increases in the employee's accrued 
                                pension benefit based on years of 
                                service after the effective date of the 
                                DROP election.
                                    ``(II) Qualified public safety 
                                employee.--The term `qualified public 
                                safety employee' means any employee of 
                                any police department or fire 
                                department organized and operated by a 
                                State or political subdivision of a 
                                State if the employee provides police 
                                protection, firefighting services, or 
                                emergency medical services for any area 
                                within the jurisdiction of such State 
                                or political subdivision.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after December 31, 2002.
                                 <all>