[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2201 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2201

 To provide for the penalty-free use of retirement funds for mortgage 
                          delinquency relief.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 18, 2007

  Mr. Coleman (for himself and Mr. Martinez) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide for the penalty-free use of retirement funds for mortgage 
                          delinquency relief.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Home Ownership Mortgage Emergency 
Act'' or the ``HOME Act''.

SEC. 2. TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS FOR MORTGAGE 
              DELINQUENCY RELIEF.

    (a) In General.--Section 72(t) of the Internal Revenue Code of 1986 
shall not apply to any qualified mortgage delinquency relief 
distribution.
    (b) Aggregate Dollar Limitation.--
            (1) In general.--For purposes of this section, the 
        aggregate amount of distributions received by an individual 
        which may be treated as qualified mortgage delinquency relief 
        distributions for any taxable year shall not exceed the excess 
        (if any) of--
                    (A) $100,000, over
                    (B) the aggregate amounts treated as qualified 
                mortgage delinquency relief distributions received by 
                such individual for all prior taxable years.
            (2) Treatment of plan distributions.--If a distribution to 
        an individual would (without regard to paragraph (1)) be a 
        qualified mortgage delinquency relief distribution, a plan 
        shall not be treated as violating any requirement of the 
        Internal Revenue Code of 1986 merely because the plan treats 
        such distribution as a qualified mortgage delinquency relief 
        distribution, unless the aggregate amount of such distributions 
        from all plans maintained by the employer (and any member of 
        any controlled group which includes the employer) to such 
        individual exceeds $100,000.
            (3) Controlled group.--For purposes of paragraph (2), the 
        term ``controlled group'' means any group treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        of such Code.
    (c) Amount Distributed May Be Repaid.--
            (1) In general.--Any individual who receives a qualified 
        mortgage delinquency relief distribution may, at any time 
        during the 3-year period beginning on the day after the date on 
        which such distribution was received, make one or more 
        contributions in an aggregate amount not to exceed the amount 
        of such distribution to an eligible retirement plan of which 
        such individual is a beneficiary and to which a rollover 
        contribution of such distribution could be made under section 
        402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the 
        Internal Revenue Code of 1986, as the case may be.
            (2) Treatment of repayments of distributions from eligible 
        retirement plans other than iras.--For purposes of such Code, 
        if a contribution is made pursuant to paragraph (1) with 
        respect to a qualified mortgage delinquency relief distribution 
        from an eligible retirement plan other than an individual 
        retirement plan, then the taxpayer shall, to the extent of the 
        amount of the contribution, be treated as having received the 
        qualified mortgage delinquency relief distribution in an 
        eligible rollover distribution (as defined in section 402(c)(4) 
        of such Code) and as having transferred the amount to the 
        eligible retirement plan in a direct trustee to trustee 
        transfer within 60 days of the distribution.
            (3) Treatment of repayments for distributions from iras.--
        For purposes of such Code, if a contribution is made pursuant 
        to paragraph (1) with respect to a qualified mortgage 
        delinquency relief distribution from an individual retirement 
        plan (as defined by section 7701(a)(37) of such Code), then, to 
        the extent of the amount of the contribution, the qualified 
        mortgage delinquency relief distribution shall be treated as a 
        distribution described in section 408(d)(3) of such Code and as 
        having been transferred to the eligible retirement plan in a 
        direct trustee to trustee transfer within 60 days of the 
        distribution.
    (d) Definitions.--For purposes of this section--
            (1) Qualified mortgage delinquency relief distribution.--
        Except as provided in subsection (b), the term ``qualified 
        mortgage delinquency relief distribution'' means any 
        distribution from an eligible retirement plan made on or after 
        the date of the enactment of this Act and before January 1, 
        2010, to an individual--
                    (A) whose acquisition indebtedness (as defined in 
                section 163(h)(3)(B) of the Internal Revenue Code of 
                1986, without regard to clause (ii) thereof) with 
                respect to the principal residence of the taxpayer is 
                in delinquency for at least 60 days, and
                    (B) whose adjusted gross income (as defined in 
                section 62 of the such Code) for the taxable year of 
                such distribution does not exceed $114,000 ($166,000 in 
                the case of a joint return under section 6013 of such 
                Code).
            (2) Eligible retirement plan.--The term ``eligible 
        retirement plan'' shall have the meaning given such term by 
        section 402(c)(8)(B) of such Code.
            (3) Principal residence.--The term ``principal residence'' 
        has the same meaning as when used in section 121 of such Code.
    (e) Income Inclusion Spread Over 3 Year Period for Qualified 
Mortgage Delinquency Relief Distributions.--
            (1) In general.--In the case of any qualified mortgage 
        delinquency relief distribution, unless the taxpayer elects not 
        to have this subsection apply for any taxable year, any amount 
        required to be included in gross income for such taxable year 
        shall be so included ratably over the 3-taxable year period 
        beginning with such taxable year.
            (2) Special rule.--For purposes of paragraph (1), rules 
        similar to the rules of subparagraph (E) of section 408A(d)(3) 
        of the Internal Revenue Code of 1986 shall apply.
    (f) Special Rules.--
            (1) Exemption of distributions from trustee to trustee 
        transfer and withholding rules.--For purposes of sections 
        401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 
        1986, qualified mortgage delinquency relief distributions shall 
        not be treated as eligible rollover distributions.
            (2) Qualified mortgage delinquency relief distributions 
        treated as meeting plan distribution requirements.--For 
        purposes of such Code, a qualified mortgage delinquency relief 
        distribution shall be treated as meeting the requirements of 
        sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 
        457(d)(1)(A) of such Code.
    (g) Provisions Relating to Plan Amendments.--
            (1) In general.--If this subsection applies to any 
        amendment to any plan or annuity contract, such plan or 
        contract shall be treated as being operated in accordance with 
        the terms of the plan during the period described in paragraph 
        (2)(B)(i).
            (2) Amendments to which subsection applies.--
                    (A) In general.--This subsection shall apply to any 
                amendment to any plan or annuity contract which is 
                made--
                            (i) pursuant to any amendment made by this 
                        section, or pursuant to any regulation issued 
                        by the Secretary of the Treasury or the 
                        Secretary of Labor under this section, and
                            (ii) on or before the last day of the first 
                        plan year beginning on or after January 1, 
                        2010, or such later date as the Secretary of 
                        the Treasury may prescribe.
                In the case of a governmental plan (as defined in 
                section 414(d) of the Internal Revenue Code of 1986), 
                clause (ii) shall be applied by substituting the date 
                which is 2 years after the date otherwise applied under 
                clause (ii).
                    (B) Conditions.--This subsection shall not apply to 
                any amendment unless--
                            (i) during the period--
                                    (I) beginning on the date the 
                                legislative or regulatory amendment 
                                described in subparagraph (A)(i) takes 
                                effect (or in the case of a plan or 
                                contract amendment not required by such 
                                legislative or regulatory amendment, 
                                the effective date specified by the 
                                plan), and
                                    (II) ending on the date described 
                                in subparagraph (A)(ii) (or, if 
                                earlier, the date the plan or contract 
                                amendment is adopted),
                        the plan or contract is operated as if such 
                        plan or contract amendment were in effect; and
                            (ii) such plan or contract amendment 
                        applies retroactively for such period.
                                 <all>