I 111th CONGRESS 1st Session H. R. 3390 IN THE HOUSE OF REPRESENTATIVES July 29, 2009 Mr. Hoekstra 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 waive the 10 percent penalty on distributions from certain retirement plans during periods of high unemployment.

1.

Short title

This Act may be cited as the Retirement Account Freedom Act of 2009.

2.

Waiver of 10 percent penalty on distributions from certain retirement plans during periods of high unemployment

(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: (H)

Distributions during periods of high national unemployment

(i)

In general

Distributions to an individual— (I)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), and (II)during any period that the national rate of unemployment is at least 7 percent. (ii)

Limitation

(I)

In general

Clause (i) shall not apply to the extent that the aggregate distributions during the taxable year exceed 10 percent of the aggregate account balances at the beginning of such year in the plans. (II)

Account balance

For purposes of subclause (I), in the case of a distribution other than from an individual retirement plan, the account balance shall include only amounts attributable to employer contributions described in clause (i)(I). . (b)

Effective date

The amendment made by this section shall apply to distributions received in taxable years ending after the date of the enactment of this Act.