I 

116TH CONGRESS 

1ST SESSION H. R. 545 

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 15, 2019 

Mr. OLSON (for himself, Mr. BEYER, Mr. PERLMUTTER, Mr. WEBER of 

Texas, Mr. MCKINLEY, Mr. TRONE, Ms. KENDRA S. HORN of Oklahoma, 

Mr. ALLRED, Mr. BROWN of Maryland, Mr. COURTNEY, Mr. BABIN, and 

Mr. GAETZ) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Financial Relief for 

5 Feds Act of 2019’’. 


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1 SEC. 2. TAX-FAVORED WITHDRAWALS FROM RETIREMENT 

2 PLANS. 

3 (a) IN GENERAL.—Section 72(t) of the Internal Rev4 enue Code of 1986 shall not apply to any Federal Govern5 ment shutdown distribution. 

6 (b) AGGREGATE DOLLAR LIMITATION.— 

7 (1) IN GENERAL.—For purposes of this sub8 section, the aggregate amount of distributions re9 ceived by an individual which may be treated as 

10 Federal Government shutdown distributions for any 

11 taxable year, and with respect to any Federal appro12 priations lapse, shall not exceed the excess (if any) 

13 of— 

14 (A) the applicable amount, over 

15 (B) the aggregate amounts treated as Fed16 eral Government shutdown distributions re17 ceived by such individual with respect to such 

18 Federal appropriations lapse. 

19 (2) APPLICABLE AMOUNT.—For purposes of 

20 paragraph (1), the applicable amount with respect to 

21 an individual is an amount equal to— 

22 (A) $4,000, multiplied by 

23 (B) the number of 14-day periods begin24 ning during any Federal appropriations lapse 

25 with respect to such individual. 

26 (3) TREATMENT OF PLAN DISTRIBUTIONS.— 


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1 (A) IN GENERAL.—If a distribution to an 

2 individual would (without regard to paragraph 

3 (1)) be a Federal Government shutdown dis4 tribution, a plan shall not be treated as vio5 lating any provision of law merely because the 

6 plan treats such distribution as a Federal Gov7 ernment shutdown distribution, unless the ag8 gregate amount of such distributions from all 

9 plans maintained by the employer (and any 

10 member of any controlled group which includes 

11 the employer) to such individual exceeds the ap12 plicable amount with respect to such individual. 

13 (B) NO TSP CONDITIONS ON CONTRIBU14 TIONS OR DISTRIBUTIONS.—In the case of the 

15 Thrift Savings Fund, no limit on the number of 

16 distributions made to an individual, or on the 

17 amount of contributions which may be made by 

18 such individual, shall be imposed solely by rea19 son of a distribution which is a Federal Govern20 ment shutdown distribution. 

21 (4) CONTROLLED GROUP.—For purposes of 

22 paragraph (3), the term ‘‘controlled group’’ means 

23 any group treated as a single employer under sub24 section (b), (c), (m), or (o) of section 414 of the In25 ternal Revenue Code of 1986. 


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1 (c) AMOUNT DISTRIBUTED MAY BE REPAID.— 

2 (1) IN GENERAL.—Any individual who receives 

3 a Federal Government shutdown distribution may, 

4 at any time during the 3-year period beginning on 

5 the day after the date on which such distribution 

6 was received, make 1 or more contributions in an 

7 aggregate amount not to exceed the amount of such 

8 distribution to an eligible retirement plan of which 

9 such individual is a beneficiary and to which a roll10 over contribution of such distribution could be made 

11 under section 402(c), 403(a)(4), 403(b)(8), 

12 408(d)(3), or 457(e)(16), of the Internal Revenue 

13 Code of 1986, as the case may be. 

14 (2) TREATMENT OF REPAYMENTS OF DISTRIBU15 TIONS FROM ELIGIBLE RETIREMENT PLANS OTHER

16 THAN IRAS.—For purposes of the Internal Revenue 

17 Code of 1986, if a contribution is made pursuant to 

18 paragraph (1) with respect to a Federal Government 

19 shutdown distribution from an eligible retirement 

20 plan other than an individual retirement plan, then 

21 the taxpayer shall, to the extent of the amount of 

22 the contribution, be treated as having received the 

23 Federal Government shutdown distribution in an eli24 gible rollover distribution (as defined in section 

25 402(c)(4) of such Code) and as having transferred 


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1 the amount to the eligible retirement plan in a direct 

2 trustee to trustee transfer within 60 days of the dis3 tribution. 

4 (3) TREATMENT OF REPAYMENTS OF DISTRIBU5 TIONS FROM IRAS.—For purposes of the Internal 

6 Revenue Code of 1986, if a contribution is made 

7 pursuant to paragraph (1) with respect to a Federal 

8 Government shutdown distribution from an indi9 vidual retirement plan (as defined by section 

10 7701(a)(37) of such Code), then, to the extent of the 

11 amount of the contribution, the Federal Government 

12 shutdown distribution shall be treated as a distribu13 tion described in section 408(d)(3) of such Code and 

14 as having been transferred to the eligible retirement 

15 plan in a direct trustee to trustee transfer within 60 

16 days of the distribution. 

17 (d) DEFINITIONS.—For purposes of this section— 

18 (1) FEDERAL GOVERNMENT SHUTDOWN DIS19 TRIBUTION.—The term ‘‘Federal Government shut20 down distribution’’ means any distribution by an ap21 plicable individual from an eligible retirement plan 

22 made during a Federal appropriations lapse with re23 spect to such individual. 

24 (2) APPLICABLE INDIVIDUAL.—The term ‘‘ap25 plicable individual’’ means any individual— 


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1 (A) who is a Federal employee furloughed 

2 due to a Federal appropriations lapse; 

3 (B) who is placed on unpaid leave as a 

4 Federal contractor, or as an employee of a Fed5 eral contractor, due to a Federal appropriations 

6 lapse, and whose sole source of earned income 

7 (as defined in section 32(c)(2) of the Internal 

8 Revenue Code of 1986) would (but for such 

9 lapse) be remuneration as such a contractor, or 

10 employee thereof; 

11 (C) who is an employee of a State or other 

12 Federal grantee— 

13 (i) whose compensation is advanced or 

14 reimbursed in whole or in part by the Fed15 eral Government; and 

16 (ii) who is furloughed due to a Fed17 eral appropriations lapse; or 

18 (D) who is furloughed due to a Federal ap19 propriations lapse as an employee of the Dis20 trict of Columbia Courts, the Public Defender 

21 Service for the District of Columbia, or the Dis22 trict of Columbia government. 

23 Such term shall include any excepted employee or an 

24 employee performing emergency work, as such terms 

25 are defined by the Office of Personnel Management 


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1 or the appropriate District of Columbia public em2 ployer, as applicable, during a Federal appropria3 tions lapse. 

4 (3) FEDERAL APPROPRIATION LAPSE.— 

5 (A) IN GENERAL.—The term ‘‘Federal ap6 propriations lapse’’ means any continuous pe7 riod during which there is a lapse in Federal 

8 appropriations. 

9 (B) PERIOD OF LAPSE.—A period of lapse 

10 in Federal appropriations shall not be a Federal 

11 appropriations lapse with respect to an indi12 vidual for longer than the period during which 

13 the individual is furloughed (or on unpaid leave 

14 in the case of an individual described in para15 graph (2)(B)) due to such lapse. 

16 (4) ELIGIBLE RETIREMENT PLAN.—The term 

17 ‘‘eligible retirement plan’’ shall have the meaning 

18 given such term by section 402(c)(8)(B) of the In19 ternal Revenue Code of 1986. 

20 (e) INCOME INCLUSION SPREAD OVER 3-YEAR PE21 RIOD.— 

22 (1) IN GENERAL.—In the case of any Federal 

23 Government shutdown distribution, unless the tax24 payer elects not to have this paragraph apply for 

25 any taxable year, any amount required to be inVerDate Sep 11 2014 23:55 Jan 30, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H545.IH H545

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1 cluded in gross income for such taxable year shall be 

2 so included ratably over the 3-taxable-year period 

3 beginning with such taxable year. 

4 (2) SPECIAL RULE.—For purposes of para5 graph (1), rules similar to the rules of subparagraph 

6 (E) of section 408A(d)(3) of the Internal Revenue 

7 Code of 1986 shall apply. 

8 (f) SPECIAL RULES.— 

9 (1) EXEMPTION OF DISTRIBUTIONS FROM

10 TRUSTEE TO TRUSTEE TRANSFER AND WITH11 HOLDING RULES.—For purposes of sections 

12 401(a)(31), 402(f), and 3405 of the Internal Rev13 enue Code of 1986, Federal Government shutdown 

14 distributions shall not be treated as eligible rollover 

15 distributions. 

16 (2) FEDERAL GOVERNMENT SHUTDOWN DIS17 TRIBUTIONS TREATED AS MEETING PLAN DISTRIBU18 TION REQUIREMENTS.—For purposes the Internal 

19 Revenue Code of 1986, a Federal Government shut20 down distribution shall be treated as meeting the re21 quirements of sections 401(k)(2)(B)(i), 

22 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of 

23 such Code. 

Æ 


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