I 

112TH CONGRESS 

2D SESSION H. R. 3899 

To provide for rollover treatment to traditional IRAs of amounts received 

in airline carrier bankruptcy. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 3, 2012 

Mr. LEWIS of Georgia (for himself and Mr. DAVIS of Kentucky) introduced 

the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To provide for rollover treatment to traditional IRAs of 

amounts received in airline carrier bankruptcy. 

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

3 SECTION 1. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE 

4 CARRIER BANKRUPTCY. 

5 (a) GENERAL RULES.— 

6 (1) ROLLOVER OF AIRLINE PAYMENT

7 AMOUNT.—If a qualified airline employee receives 

8 any airline payment amount and transfers any por9 tion of such amount to a traditional IRA within 180 

10 days of receipt of such amount (or, if later, within 


srobinson on DSK4SPTVN1PROD with BILLS
2 

•HR 3899 IH

1 180 days of the date of the enactment of this Act), 

2 then such amount (to the extent so transferred) 

3 shall be treated as a rollover contribution described 

4 in section 402(c) of the Internal Revenue Code of 

5 1986. A qualified airline employee making such a 

6 transfer may exclude from gross income the amount 

7 transferred, in the taxable year in which the airline 

8 payment amount was paid to the qualified airline 

9 employee by the commercial passenger airline car10 rier. 

11 (2) TRANSFER OR AMOUNTS ATTRIBUTABLE TO

12 AIRLINE PAYMENT AMOUNT FOLLOWING ROLLOVER

13 TO ROTH IRA.—A qualified, airline employee who 

14 has contributed an airline payment amount to a 

15 Roth IRA that is treated as a qualified rollover con16 tribution pursuant to section 125 of the Worker, Re17 tiree, and Employer Recovery Act of 2008, may 

18 transfer to a traditional IRA, in a trustee-to-trustee 

19 transfer, all or any part of the contribution (together 

20 with any net income allocable to such contribution), 

21 and the transfer to the traditional IRA will be 

22 deemed to have been made at the time of the roll23 over to the Roth IRA, if such transfer is made with24 in 180 days of the date of the enactment of this Act. 

25 A qualified airline employee making such a transfer 


srobinson on DSK4SPTVN1PROD with BILLS
3 

•HR 3899 IH

1 may exclude from gross income the airline payment 

2 amount previously rolled over to the Roth IRA, to 

3 the extent an amount attributable to the previous 

4 rollover was transferred to a traditional IRA, in the 

5 taxable year in which the airline payment amount 

6 was paid to the qualified airline employee by the 

7 commercial passenger airline carrier. No amount so 

8 transferred to a traditional IRA may be treated as 

9 a qualified rollover contribution with respect to a 

10 Roth IRA within the 5-taxable year period beginning 

11 with the taxable year in which such transfer was 

12 made. 

13 (3) EXTENSION OF TIME TO FILE CLAIM FOR

14 REFUND.—A qualified airline employee who excludes 

15 an amount from gross income in a prior taxable year 

16 under paragraph (1) or (2) may reflect such exclu17 sion in a claim for refund filed within the period of 

18 limitation under section 6511(a) of such Code (or, if 

19 later, April 15, 2013). 

20 (4) OVERALL LIMITATION ON AMOUNTS TRANS21 FERRED TO TRADITIONAL IRAS.— 

22 (A) IN GENERAL.—The aggregate amount 

23 of airline payment amounts which may be 

24 transferred to 1 or more traditional IRAs under 

25 paragraphs (1) and (2) with respect to any 


srobinson on DSK4SPTVN1PROD with BILLS
4 

•HR 3899 IH

1 qualified employee for any taxable year shall 

2 not exceed the excess (if any) of— 

3 (i) 90 percent of the aggregate airline 

4 payment amounts received by the qualified 

5 airline employee during the taxable year 

6 and all preceding taxable years, over 

7 (ii) the aggregate amount of such 

8 transfers to which paragraphs (1) and (2) 

9 applied for all preceding taxable years. 

10 (B) SPECIAL RULES.—For purposes of ap11 plying the limitation under subparagraph (A)— 

12 (i) any airline payment amount re13 ceived by the surviving spouse of any quali14 fied employee, and any amount transferred 

15 to a traditional IRA by such spouse under 

16 subsection (d), shall be treated as an 

17 amount received or transferred by the 

18 qualified employee, and 

19 (ii) any amount transferred to a tradi20 tional IRA which is attributable to net in21 come described in paragraph (2) shall not 

22 be taken into account. 

23 (5) COVERED EXECUTIVES NOT ELIGIBLE TO

24 MAKE TRANSFERS.—Paragraphs (1) and (2) shall 

25 not apply to any transfer by a qualified airline emVerDate Mar 15 2010 22:36 Feb 07, 2012 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3899.IH H3899

srobinson on DSK4SPTVN1PROD with BILLS
5 

•HR 3899 IH

1 ployee (or any transfer authorized under subsection 

2 (d) by a surviving spouse of the qualified airline em3 ployee) if at any time during the taxable year of the 

4 transfer or any preceding taxable year the qualified 

5 airline employee held a position described in sub6 paragraph (A) or (B) of section 162(m)(3) with the 

7 commercial passenger airline carrier from whom the 

8 airline payment amount was received. 

9 (b) TREATMENT OF AIRLINE PAYMENT AMOUNTS

10 AND TRANSFERS FOR EMPLOYMENT TAXES.—For pur11 poses of chapter 21 of the Internal Revenue Code of 1986 

12 and section 209 of the Social Security Act, an airline pay13 ment amount shall not fail to be treated as a payment 

14 of wages by the commercial passenger airline carrier to 

15 the qualified airline employee in the taxable year of pay16 ment because such amount is excluded from the qualified 

17 airline employee’s gross income under subsection (a). 

18 (c) DEFINITIONS AND SPECIAL RULES.—For pur19 poses of this section— 

20 (1) AIRLINE PAYMENT AMOUNT.— 

21 (A) IN GENERAL.—The term ‘‘airline pay22 ment amount’’ means any payment of any 

23 money or other property which is payable by a 

24 commercial passenger airline carrier to a quali25 fied airline employee— 


srobinson on DSK4SPTVN1PROD with BILLS
6 

•HR 3899 IH

1 (i) under the approval of an order of 

2 a Federal bankruptcy court in a case filed 

3 after September 11, 2001, and before Jan4 uary 1, 2007, and 

5 (ii) in respect of the qualified airline 

6 employee’s interest in a bankruptcy claim 

7 against the carrier, any note of the carrier 

8 (or amount paid in lieu of a note being 

9 issued), or any other fixed obligation of the 

10 carrier to pay a lump sum amount. 

11 The amount of such payment shall be deter12 mined without regard to any requirement to de13 duct and withhold tax from such payment 

14 under sections 3102(a) of the Internal Revenue 

15 Code of 1986 and 3402(a) of such Code. 

16 (B) EXCEPTION.—An airline payment 

17 amount shall not include any amount payable 

18 on the basis of the carrier’s future earnings or 

19 profits. 

20 (2) QUALIFIED AIRLINE EMPLOYEE.—The term 

21 ‘‘qualified airline employee’’ means an employee or 

22 former employee of a commercial passenger airline 

23 carrier who was a participant in a defined benefit 

24 plan maintained by the carrier which— 


srobinson on DSK4SPTVN1PROD with BILLS
7 

•HR 3899 IH

1 (A) is a plan described in section 401(a) of 

2 the Internal Revenue Code of 1986 which in3 cludes a trust exempt from tax under section 

4 2501(a) of such Code, and 

5 (B) was terminated or became subject to 

6 the restrictions contained in paragraphs (2) and 

7 (3) of section 402(b) of the Pension Protection 

8 Act of 2006. 

9 (3) TRADITIONAL IRA.—The term ‘‘traditional 

10 IRA’’ means an individual retirement plan (as de11 fined in section 7701(a)(37) of the Internal Revenue 

12 Code of 1986) which is not a Roth IRA. 

13 (4) ROTH IRA.—The term ‘‘Roth IRA’’ has the 

14 meaning given such term by section 408A(b) of such 

15 Code. 

16 (d) SURVIVING SPOUSE.—If a qualified airline em17 ployee died after receiving an airline payment amount, or 

18 if an airline payment amount was paid to the surviving 

19 spouse of a qualified airline employee in respect of the 

20 qualified airline employee, the surviving spouse of the 

21 qualified airline employee may take all actions permitted 

22 under section 125 of the Worker, Retiree, and Employer 

23 Recovery Act of 2008, or under this section, to the same 

24 extent that the qualified airline employee could have done 

25 had the qualified airline employee survived. 


srobinson on DSK4SPTVN1PROD with BILLS
8 

•HR 3899 IH

1 (e) EFFECTIVE DATE.—This section shall apply to 

2 transfers made after the date of the enactment of this Act 

3 with respect to airline payment amounts paid before, on, 

4 or after such date. 

Æ 


srobinson on DSK4SPTVN1PROD with BILLS