H. R. 2873
IN THE HOUSE OF REPRESENTATIVES
June 26, 2007
Mr. Weldon of Florida (for himself, Mr. Wexler, Mr. Young of Florida, Mr. Hastings of Florida, Ms. Ros-Lehtinen, Mr. Lincoln Diaz-Balart of Florida, Ms. Ginny Brown-Waite of Florida, Mr. Mario Diaz-Balart of Florida, Mr. Miller of Florida, Mr. Feeney, Mr. Crenshaw, and Mr. Bilirakis) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to exempt disaster relief distributions from retirement plans from the penalty for early withdrawal.
This Act may be cited as the
Affordable Homeowners Insurance Act of
Distributions from retirement plans for disaster relief not subject to penalty for early withdrawal
Paragraph (2) of section 72(t) 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 subparagraph:
Distributions from retirement plans for disaster relief
Any qualified disaster relief distribution.
Aggregate dollar limitation
For purposes of this subparagraph, the aggregate amount of distributions received by an individual which may be treated as qualified disaster relief distributions for any taxable year shall not exceed the excess (if any) of—
the aggregate amounts treated as qualified disaster relief distributions received by such individual for all prior taxable years.
Treatment of plan distributions
If a distribution to an individual would be a qualified disaster relief distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified disaster 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. For purposes of the preceding sentence, the term controlled group means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414.
Amount distributed may be repaid
Any individual who receives a qualified disaster 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), as the case may be.
Treatment of repayments of distributions from eligible retirement plans other than IRAs
For purposes of this title, if a contribution is made pursuant to subparagraph (A) with respect to a qualified disaster 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 disaster relief distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
Treatment of repayments for distributions from IRAs
For purposes of this title, if a contribution is made pursuant to subparagraph (A) with respect to a qualified disaster relief distribution from an individual retirement plan (as defined by section 7701(a)(37)), then, to the extent of the amount of the contribution, the qualified disaster relief distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
Qualified disaster relief distribution
For purposes of this subparagraph, the term qualified disaster relief distribution means a distribution made—
within 1 year after the date on which a major disaster is declared under section 401 of the Robert T. Stafford Disaster Assistance Relief and Emergency Assistance Act,
on account of such disaster, and
to an individual whose principal place of abode is in the area with respect to which such disaster was declared and who has sustained an economic loss by reason of such disaster.
Income inclusion spread over 3-year period
In the case of any qualified disaster relief distribution, unless the taxpayer elects not to have this clause 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.
For purposes of subclause (I), rules similar to the rules of subparagraph (E) of section 408A(d)(3) shall apply.
The amendment made by this section shall apply with respect to disasters declared after the date of the enactment of this Act.
Provisions relating to plan amendments
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).
Amendments to which subsection applies
This subsection shall apply to any amendment to any plan or annuity contract which is made—
pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor under any provision of this section, and
on or before the last day of the first plan year beginning on or after January 1, 2009, or such later date as the Secretary may prescribe.
This subsection shall not apply to any amendment unless—
during the period—
beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and
ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted),