[Congressional Record Volume 150, Number 73 (Friday, May 21, 2004)]
[Senate]
[Page S6093]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLARD (for himself, Mr. Durbin, and Ms. Landrieu):
  S. 2474. A bill to amend the Internal Revenue Code of 1986 to allow 
penalty-free withdrawals from retirement plans during the period that a 
military reservist or national guardsman is called to active duty for 
an extended period, and for other purposes; to the Committee on 
Finance.
  Mr. ALLARD. Mr. President, I rise to introduce the Guardsmen and 
Reservists Financial Relief Act of 2004. National guardsmen and 
reservists are serving our country with virtue and valor in the war on 
terror. These brave men and women deserve recognition for the many 
sacrifices they make in serving and protecting this great country. 
Their families also deserve protection from potential financial 
hardships experienced at home that may result from the guardsmen or 
reservists being called to service.
  Since September 11, 2004, many men and women have left their jobs in 
the private sector to fill vitally needed positions for our national 
defense. In playing the role of true citizen soldiers, some have taken 
drastic pay cuts from their civilian jobs in order to fulfill their 
duty to their country. This is beginning to create financial strains on 
their families.
  The Department of Defense estimates that 3 percent of its reservists 
have been called up more than once since September 11, 2001. 
Additionally, the GAO reports that nearly 41 percent of reservists are 
impacted by a pay discrepancy between his or her military and civilian 
salary.
  The Guardsmen and Reservists Financial Relief Act of 2004 will see 
that the families and loved ones of Guard members and reservists, who 
are called to service after September 11, 2001, can access retirement 
funds without incurring any penalties.
  This important legislation will allow Guard members and reservists 
who are activated for more than 179 days to make penalty-free early 
withdrawals from their IRA or 401(k) plan.
  This bill retroactively covers members of the Guard and Reserve who 
were called to service beginning on September 11, 2001, and extends 
coverage to those who may continue to be called on to serve on an 
active basis through September 12, 2005.
  Furthermore, this bill will encourage repayment of any withdrawal 
from an IRA or 401(k) fund within 2 years of a guardsman or reservist 
ending their active duty, ensuring retirement, financial security for 
soldiers and their families.
  It also temporarily lifts the contribution cap to equal the amount of 
the withdrawn funds to allow for full repayment.
  National Guard members and military reservists have been imperative 
to the military strength of our Nation over the years. Today, almost 
half of our military strength is from those who serve in the National 
Guard and military Reserve. There are currently 169,000 National Guard 
members and military reservists on active duty helping fight the war on 
terror.
  Since September 11, 2001, 373,707 total National Guard members and 
military reservists have been mobilized. There is no doubt we owe a 
great deal to our men and women in uniform who are so honorably serving 
their country by fighting the war on terror. Helping to ease the 
financial burdens of families of Guard members and reservists is a good 
start.
  I look forward to working with my colleagues in the Senate on the 
Guardsmen and Reservists Financial Relief of 2004 to provide members of 
our National Guard and military Reserve with the financial relief they 
deserve for loyally serving and protecting this country.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2474

       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 ``Guardsmen and Reservists 
     Financial Relief Act of 2004''.

     SEC. 2. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR 
                   INDIVIDUALS CALLED TO ACTIVE DUTY FOR AT LEAST 
                   179 DAYS.

       (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 retirement plans to individuals 
     called to active duty.--
       ``(i) In general.--Any qualified reservist distribution.
       ``(ii) Amount distributed may be repaid.--Any individual 
     who receives a qualified reservist distribution may, at any 
     time during the 2-year period beginning on the day after the 
     end of the active duty period, make one or more contributions 
     to an individual retirement plan of such individual in an 
     aggregate amount not to exceed the amount of such 
     distribution. The dollar limitations otherwise applicable to 
     contributions to individual retirement plans shall not apply 
     to any contribution made pursuant to the preceding sentence. 
     No deduction shall be allowed for any contribution pursuant 
     to this clause.
       ``(iii) Qualified reservist distribution.--For purposes of 
     this subparagraph, the term `qualified reservist 
     distribution' means any distribution to an individual if--

       ``(I) such distribution is 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),
       ``(II) such individual was (by reason of being a member of 
     a reserve component (as defined in section 101 of title 37, 
     United States Code)), ordered or called to active duty for a 
     period in excess of 179 days or for an indefinite period, and
       ``(III) such distribution is made during the period 
     beginning on the date of such order or call and ending at the 
     close of the active duty period.

       ``(iv) Application of subparagraph.--This subparagraph 
     applies to individuals ordered or called to active duty after 
     September 11, 2001, and before September 12, 2005. In no 
     event shall the 2-year period referred to in clause (ii) end 
     before the date which is 2 years after the date of the 
     enactment of this subparagraph.''.
       (b) Conforming Amendments.--
       (1) Section 401(k)(2)(B)(i) of such Code is amended by 
     striking ``or'' at the end of subclause (III), by striking 
     ``and'' at the end of subclause (IV) and inserting ``or'', 
     and by inserting after subclause (IV) the following new 
     subclause:

       ``(V) the date on which a period referred to in section 
     72(t)(2)(G)(iii)(III) begins, and''.

       (2) Section 403(b)(11) of such Code is amended by striking 
     ``or'' at the end of subparagraph (A), by striking the period 
     at the end of subparagraph (B) and inserting ``, or'', and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) for distributions to which section 72(t)(2)(G) 
     applies.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions after September 11, 2001.
                                 ______