[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 766 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 766
To allow penalty-free distributions from retirement accounts in the
case of Federal employees and certain Federal contractors impacted by
the Federal Government shutdown.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 24, 2019
Mr. Graves of Louisiana introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Oversight and Reform, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To allow penalty-free distributions from retirement accounts in the
case of Federal employees and certain Federal contractors impacted by
the Federal Government shutdown.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS.
(a) In General.--Section 72(t) of the Internal Revenue Code of 1986
shall not apply to any qualified shutdown distribution.
(b) Aggregate Dollar Limitation.--
(1) In general.--For purposes of this subsection, the
aggregate amount of distributions received by an individual
which may be treated as qualified shutdown distributions for
any taxable year, and with respect to any Federal
appropriations lapse, shall not exceed an amount equal to the
compensation the individual would (but for such lapse) have
received during such lapse.
(2) Treatment of plan distributions.--
(A) In general.--If a distribution to an individual
would (without regard to paragraph (1)) be a qualified
shutdown distribution, a plan shall not be treated as
violating any provision of law merely because the plan
treats such distribution as a qualified shutdown
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 the limitation
amount with respect to such individual. Plans may
require such substantiation and certification of the
individual's compensation as may be necessary for
purposes of the preceding sentence.
(B) No tsp conditions on contributions or
distributions.--In the case of the Thrift Savings Fund,
no limit on the number of distributions made to an
individual, or on the amount of contributions which may
be made by such individual, shall be imposed solely by
reason of a distribution which is a qualified shutdown
distribution.
(3) Controlled group.--For purposes of paragraph (3), the
term ``controlled group'' means any group treated as a single
employer under subsection (b), (c), (m), or (o) of section 414
of the Internal Revenue Code of 1986.
(c) Amount Distributed May Be Repaid.--
(1) In general.--Any individual who receives a qualified
shutdown distribution may, at any time during the 180-day
period beginning on the day after the date on which the Federal
appropriations lapse to which the distribution relates ends
with respect to the individual, make 1 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 the Internal
Revenue Code of 1986, if a contribution is made pursuant to
paragraph (1) with respect to a qualified shutdown 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 shutdown 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 of distributions from iras.--
For purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to paragraph (1) with respect to
a qualified shutdown 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
shutdown 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 shutdown distribution.--The term ``qualified
shutdown distribution'' means any distribution by an applicable
individual from an eligible retirement plan made during a
Federal appropriations lapse with respect to such individual.
(2) Applicable individual.--The term ``applicable
individual'' means any individual--
(A) who is a Federal employee furloughed due to a
Federal appropriations lapse,
(B) who is placed on unpaid leave as a Federal
contractor, or as an employee of a Federal contractor,
due to a Federal appropriations lapse,
(C) who is an employee of a State or other Federal
grantee--
(i) whose compensation is advanced or
reimbursed in whole or in part by the Federal
Government, and
(ii) who is furloughed due to a Federal
appropriations lapse, or
(D) who is furloughed due to a Federal
appropriations lapse as an employee of the District of
Columbia Courts, the Public Defender Service for the
District of Columbia, or the District of Columbia
government.
Such term shall include any excepted employee or an employee
performing emergency work, as such terms are defined by the
Office of Personnel Management or the appropriate District of
Columbia public employer, as applicable, during a Federal
appropriations lapse.
(3) Federal appropriation lapse.--
(A) In general.--The term ``Federal appropriations
lapse'' means any continuous period during which there
is a lapse in Federal appropriations.
(B) Period of lapse.--A period of lapse in Federal
appropriations shall not be a Federal appropriations
lapse with respect to an individual--
(i) for longer than the period during which
the individual is furloughed (or on unpaid
leave in the case of an individual described in
paragraph (2)(B)) due to such lapse, and
(ii) unless such period includes the end of
a pay period for which compensation was not
received by reason of such lapse.
(4) Eligible retirement plan.--The term ``eligible
retirement plan'' shall have the meaning given such term by
section 402(c)(8)(B) of the Internal Revenue Code of 1986.
(e) Income Inclusion Spread Over 3-Year Period.--
(1) In general.--In the case of any qualified shutdown
distribution, unless the taxpayer elects not to have this
paragraph 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 shutdown distributions shall not be treated as
eligible rollover distributions.
(2) Qualified shutdown distributions treated as meeting
plan distribution requirements.--For purposes of the Internal
Revenue Code of 1986, a qualified shutdown 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.
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