II 

116TH CONGRESS 

1ST SESSION S. 469 

To allow penalty-free distributions from retirement accounts in the case of 

certain Federal contractors impacted by Federal Government shutdowns. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 13, 2019 

Ms. CORTEZ MASTO (for herself, Mrs. MURRAY, Mr. WYDEN, Ms. KLOBUCHAR, Mrs. FEINSTEIN, Ms. SMITH, Mr. BROWN, Mr. CASEY, Mr. VAN

HOLLEN, Mr. MENENDEZ, Ms. DUCKWORTH, Mr. BLUMENTHAL, Mr. 

KAINE, and Ms. ROSEN) introduced the following bill; which was read 

twice and referred to the Committee on Finance 

A BILL 

To allow penalty-free distributions from retirement accounts 

in the case of certain Federal contractors impacted by 

Federal Government shutdowns. 

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 ‘‘Emergency Relief for 

5 Federal Contractors Act of 2019’’. 


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•S 469 IS

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 section, 

8 the aggregate amount of distributions received by an 

9 individual which may be treated as Federal govern10 ment shutdown distributions for any taxable year 

11 shall not exceed $30,000. 

12 (2) TREATMENT OF PLAN DISTRIBUTIONS.—If 

13 a distribution to an individual would (without regard 

14 to paragraph (1)) be a Federal government shut15 down distribution, a plan shall not be treated as vio16 lating any provision of law merely because the plan 

17 treats such distribution as a Federal government 

18 shutdown distribution, unless the aggregate amount 

19 of such distributions from all plans maintained by 

20 the employer (and any member of any controlled 

21 group which includes the employer) to such indi22 vidual for any taxable year exceeds $30,000. 

23 (3) CONTROLLED GROUP.—For purposes of 

24 paragraph (2), the term ‘‘controlled group’’ means 

25 any group treated as a single employer under subVerDate Sep 11 2014 01:15 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S469.IS S469

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1 section (b), (c), (m), or (o) of section 414 of the In2 ternal Revenue Code of 1986. 

3 (c) AMOUNT DISTRIBUTED MAY BE REPAID.— 

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

5 a Federal government shutdown distribution may, at 

6 any time during the 3-year period beginning on the 

7 day after the date on which such distribution was re8 ceived, make 1 or more contributions in an aggre9 gate amount not to exceed the amount of such dis10 tribution to an eligible retirement plan of which such 

11 individual is a beneficiary and to which a rollover 

12 contribution of such distribution could be made 

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

14 408(d)(3), or 457(e)(16) of the Internal Revenue 

15 Code of 1986. 

16 (2) TREATMENT OF REPAYMENTS OF DISTRIBU17 TIONS FROM ELIGIBLE RETIREMENT PLANS OTHER

18 THAN IRAS.—For purposes of the Internal Revenue 

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

20 paragraph (1) with respect to a Federal government 

21 shutdown distribution from an eligible retirement 

22 plan other than an individual retirement plan, then 

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

24 the contribution, be treated as having received the 

25 Federal government shutdown distribution in an eliVerDate Sep 11 2014 01:15 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S469.IS S469

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1 gible rollover distribution (as defined in section 

2 402(c)(4) of such Code) and as having transferred 

3 the amount to the eligible retirement plan in a direct 

4 trustee to trustee transfer within 60 days of the dis5 tribution. 

6 (3) TREATMENT OF REPAYMENTS OF DISTRIBU7 TIONS FROM IRAS.—For purposes of the Internal 

8 Revenue Code of 1986, if a contribution is made 

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

10 government shutdown distribution from an indi11 vidual retirement plan (as defined by section 

12 7701(a)(37) of such Code), then, to the extent of the 

13 amount of the contribution, the Federal government 

14 shutdown distribution shall be treated as a distribu15 tion described in section 408(d)(3) of such Code and 

16 as having been transferred to the eligible retirement 

17 plan in a direct trustee to trustee transfer within 60 

18 days of the distribution. 

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

20 (1) FEDERAL GOVERNMENT SHUTDOWN DIS21 TRIBUTION.—The term ‘‘Federal government shut22 down distribution’’ means any distribution which 

23 is— 

24 (A) received by an applicable individual 

25 from an eligible retirement plan; and 


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1 (B) made during a Federal appropriations 

2 lapse with respect to such individual. 

3 (2) APPLICABLE INDIVIDUAL.—The term ‘‘ap4 plicable individual’’ means any individual— 

5 (A) who is a Federal contractor or an em6 ployee of a Federal contractor and is placed on 

7 unpaid leave or working without pay due to a 

8 Federal appropriations lapse, 

9 (B) who is an employee of a State or other 

10 Federal grantee whose compensation is ad11 vanced or reimbursed in whole or in part by the 

12 Federal Government, and is furloughed, work13 ing without pay, or working with a decrease in 

14 pay due to a Federal appropriations lapse, or 

15 (C) who is an employee of the District of 

16 Columbia Courts, the Public Defender Service 

17 for the District of Columbia, or the District of 

18 Columbia government and is furloughed or 

19 working without pay due to a Federal appro20 priations lapse. 

21 (3) FEDERAL APPROPRIATIONS LAPSE.— 

22 (A) IN GENERAL.—The term ‘‘Federal ap23 propriations lapse’’ means any continuous pe24 riod of at least 2 weeks during which there is 


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1 a lapse in Federal appropriations (including a 

2 partial lapse). 

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

4 in Federal appropriations shall not be a Federal 

5 appropriations lapse with respect to an indi6 vidual for longer than the period during which 

7 the individual is furloughed, on unpaid leave, or 

8 performing work without pay due to such lapse. 

9 (4) ELIGIBLE RETIREMENT PLAN.—The term 

10 ‘‘eligible retirement plan’’ has the meaning given 

11 such term by section 402(c)(8)(B) of the Internal 

12 Revenue Code of 1986. 

13 (e) INCOME INCLUSION SPREAD OVER 3-YEAR PE14 RIOD.— 

15 (1) IN GENERAL.—Unless the taxpayer elects 

16 not to have this paragraph apply for any taxable 

17 year, any amount required to be included in gross 

18 income for such taxable year with respect to any 

19 Federal government shutdown distribution shall be 

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

21 beginning with such taxable year. 

22 (2) SPECIAL RULE.—For purposes of para23 graph (1), rules similar to the rules of subparagraph 

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

25 Code of 1986 shall apply. 


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1 (f) SPECIAL RULES.— 

2 (1) EXEMPTION OF DISTRIBUTIONS FROM

3 TRUSTEE TO TRUSTEE TRANSFER AND WITH4 HOLDING RULES.—For purposes of sections 

5 401(a)(31), 402(f), and 3405 of the Internal Rev6 enue Code of 1986, a Federal government shutdown 

7 distribution shall not be treated as an eligible roll8 over distribution. 

9 (2) FEDERAL GOVERNMENT SHUTDOWN DIS10 TRIBUTIONS TREATED AS MEETING PLAN DISTRIBU11 TION REQUIREMENTS.—For purposes of the Internal 

12 Revenue Code of 1986, a Federal government shut13 down distribution shall be treated as meeting the re14 quirements of sections 401(k)(2)(B)(i), 

15 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of 

16 such Code. 

Æ 


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