II 

118TH CONGRESS 

1ST SESSION S. 3043 

To provide special rules for retirement accounts and personal casualty losses 

with respect to certain major disasters occurring in 2023. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 16, 2023 

Ms. HIRONO (for herself and Mr. SCHATZ) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To provide special rules for retirement accounts and personal 

casualty losses with respect to certain major disasters 

occurring in 2023. 

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 ‘‘Natural Disaster Tax 

5 Relief Act of 2023’’. 

6 SEC. 2. DEFINITIONS. 

7 For purposes of this Act— 

8 (1) QUALIFIED DISASTER AREA.—The term 

9 ‘‘qualified disaster area’’ means any area with re10 spect to which a major disaster was declared, during 


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1 calendar year 2023, by the President under section 

2 401 of the Robert T. Stafford Disaster Relief and 

3 Emergency Assistance Act if the incident period of 

4 the disaster with respect to which such declaration 

5 is made begins during calendar year 2023. 

6 (2) QUALIFIED DISASTER.—The term ‘‘quali7 fied disaster’’ means, with respect to any qualified 

8 disaster area, the disaster by reason of which a 

9 major disaster was declared with respect to such 

10 area. 

11 (3) INCIDENT PERIOD.—The term ‘‘incident pe12 riod’’ means, with respect to any qualified disaster, 

13 the period specified by the Federal Emergency Man14 agement Agency as the period during which such 

15 disaster occurred (except that for purposes of this 

16 Act such period shall not be treated as ending after 

17 January 31, 2024). 

18 SEC. 3. SPECIAL DISASTER-RELATED RULES FOR USE OF 

19 RETIREMENT FUNDS. 

20 (a) TAX-FAVORED WITHDRAWALS FROM RETIRE21 MENT PLANS.— 

22 (1) IN GENERAL.—Section 72(t) of the Internal 

23 Revenue Code of 1986 shall not apply to any quali24 fied disaster distribution. 

25 (2) AGGREGATE DOLLAR LIMITATION.— 


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1 (A) IN GENERAL.—For purposes of this 

2 subsection, the aggregate amount of distribu3 tions received by an individual which may be 

4 treated as qualified disaster distributions for 

5 any taxable year shall not exceed the excess (if 

6 any) of— 

7 (i) $100,000, over 

8 (ii) the aggregate amounts treated as 

9 qualified disaster distributions received by 

10 such individual for all prior taxable years. 

11 (B) TREATMENT OF PLAN DISTRIBU12 TIONS.—If a distribution to an individual would 

13 (without regard to subparagraph (A)) be a 

14 qualified disaster distribution, a plan shall not 

15 be treated as violating any requirement of the 

16 Internal Revenue Code of 1986 merely because 

17 the plan treats such distribution as a qualified 

18 disaster distribution, unless the aggregate 

19 amount of such distributions from all plans 

20 maintained by the employer (and any member 

21 of any controlled group which includes the em22 ployer) to such individual exceeds $100,000. 

23 (C) CONTROLLED GROUP.—For purposes 

24 of subparagraph (B), the term ‘‘controlled 

25 group’’ means any group treated as a single 


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1 employer under subsection (b), (c), (m), or (o) 

2 of section 414 of the Internal Revenue Code of 

3 1986. 

4 (D) SPECIAL RULE FOR INDIVIDUALS AF5 FECTED BY MORE THAN ONE DISASTER.—The 

6 limitation of subparagraph (A) shall be applied 

7 separately with respect to distributions made 

8 with respect to each qualified disaster. 

9 (3) AMOUNT DISTRIBUTED MAY BE REPAID.— 

10 (A) IN GENERAL.—Any individual who re11 ceives a qualified disaster distribution may, at 

12 any time during the 3-year period beginning on 

13 the day after the date on which such distribu14 tion was received, make 1 or more contributions 

15 in an aggregate amount not to exceed the 

16 amount of such distribution to an eligible retire17 ment plan of which such individual is a bene18 ficiary and to which a rollover contribution of 

19 such distribution could be made under section 

20 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 

21 457(e)(16), of the Internal Revenue Code of 

22 1986, as the case may be. 

23 (B) TREATMENT OF REPAYMENTS OF DIS24 TRIBUTIONS FROM ELIGIBLE RETIREMENT

25 PLANS OTHER THAN IRAS.—For purposes of 


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1 the Internal Revenue Code of 1986, if a con2 tribution is made pursuant to subparagraph (A) 

3 with respect to a qualified disaster distribution 

4 from an eligible retirement plan other than an 

5 individual retirement plan, then the taxpayer 

6 shall, to the extent of the amount of the con7 tribution, be treated as having received the 

8 qualified disaster distribution in an eligible roll9 over distribution (as defined in section 

10 402(c)(4) of such Code) and as having trans11 ferred the amount to the eligible retirement 

12 plan in a direct trustee to trustee transfer with13 in 60 days of the distribution. 

14 (C) TREATMENT OF REPAYMENTS OF DIS15 TRIBUTIONS FROM IRAS.—For purposes of the 

16 Internal Revenue Code of 1986, if a contribu17 tion is made pursuant to subparagraph (A) 

18 with respect to a qualified disaster distribution 

19 from an individual retirement plan (as defined 

20 by section 7701(a)(37) of such Code), then, to 

21 the extent of the amount of the contribution, 

22 the qualified disaster distribution shall be treat23 ed as a distribution described in section 

24 408(d)(3) of such Code and as having been 

25 transferred to the eligible retirement plan in a 


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1 direct trustee to trustee transfer within 60 days 

2 of the distribution. 

3 (4) DEFINITIONS.—For purposes of this sub4 section— 

5 (A) QUALIFIED DISASTER DISTRIBU6 TION.—Except as provided in paragraph (2), 

7 the term ‘‘qualified disaster distribution’’ means 

8 any distribution from an eligible retirement 

9 plan made— 

10 (i) on or after the first day of the in11 cident period of a qualified disaster and 

12 before July 1, 2024, and 

13 (ii) to an individual whose principal 

14 place of abode at any time during the inci15 dent period of such qualified disaster is lo16 cated in the qualified disaster area with re17 spect to such qualified disaster and who 

18 has sustained an economic loss by reason 

19 of such qualified disaster. 

20 (B) ELIGIBLE RETIREMENT PLAN.—The 

21 term ‘‘eligible retirement plan’’ shall have the 

22 meaning given such term by section 

23 402(c)(8)(B) of the Internal Revenue Code of 

24 1986. 


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1 (5) INCOME INCLUSION SPREAD OVER 3-YEAR

2 PERIOD.— 

3 (A) IN GENERAL.—In the case of any 

4 qualified disaster distribution, unless the tax5 payer elects not to have this paragraph apply 

6 for any taxable year, any amount required to be 

7 included in gross income for such taxable year 

8 shall be so included ratably over the 3-taxable9 year period beginning with such taxable year. 

10 (B) SPECIAL RULE.—For purposes of sub11 paragraph (A), rules similar to the rules of sub12 paragraph (E) of section 408A(d)(3) of the In13 ternal Revenue Code of 1986 shall apply. 

14 (6) SPECIAL RULES.— 

15 (A) EXEMPTION OF DISTRIBUTIONS FROM

16 TRUSTEE TO TRUSTEE TRANSFER AND WITH17 HOLDING RULES.—For purposes of sections 

18 401(a)(31), 402(f), and 3405 of the Internal 

19 Revenue Code of 1986, qualified disaster dis20 tributions shall not be treated as eligible roll21 over distributions. 

22 (B) QUALIFIED DISASTER DISTRIBUTIONS

23 TREATED AS MEETING PLAN DISTRIBUTION RE24 QUIREMENTS.—For purposes of the Internal 

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1 tribution shall be treated as meeting the re2 quirements of sections 401(k)(2)(B)(i), 

3 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) 

4 of such Code and section 8433(h)(1) of title 5, 

5 United States Code, and, in the case of a 

6 money purchase pension plan, a qualified dis7 aster distribution which is an in-service with8 drawal shall be treated as meeting the distribu9 tion rules of section 401(a) of such Code. 

10 (b) RECONTRIBUTIONS OF WITHDRAWALS FOR

11 HOME PURCHASES.— 

12 (1) RECONTRIBUTIONS.— 

13 (A) IN GENERAL.—Any individual who re14 ceived a qualified distribution may, during the 

15 applicable period, make 1 or more contributions 

16 in an aggregate amount not to exceed the 

17 amount of such qualified distribution to an eli18 gible retirement plan (as defined in section 

19 402(c)(8)(B) of the Internal Revenue Code of 

20 1986) of which such individual is a beneficiary 

21 and to which a rollover contribution of such dis22 tribution could be made under section 402(c), 

23 403(a)(4), 403(b)(8), or 408(d)(3), of such 

24 Code, as the case may be. 


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1 (B) TREATMENT OF REPAYMENTS.—Rules 

2 similar to the rules of subparagraphs (B) and 

3 (C) of subsection (a)(3) shall apply for purposes 

4 of this subsection. 

5 (2) QUALIFIED DISTRIBUTION.—For purposes 

6 of this subsection, the term ‘‘qualified distribution’’ 

7 means any distribution— 

8 (A) described in section 

9 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), 

10 403(b)(11)(B), or 72(t)(2)(F), of the Internal 

11 Revenue Code of 1986, 

12 (B) which was to be used to purchase or 

13 construct a principal residence in a qualified 

14 disaster area, but which was not so used on ac15 count of the qualified disaster with respect to 

16 such area, and 

17 (C) which was received during the period 

18 beginning on the date which is 180 days before 

19 the first day of the incident period of such 

20 qualified disaster and ending on the date which 

21 is 30 days after the last day of such incident 

22 period. 

23 (3) APPLICABLE PERIOD.—For purposes of this 

24 subsection, the term ‘‘applicable period’’ means, in 

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1 aster area with respect to any qualified disaster, the 

2 period beginning on the first day of the incident pe3 riod of such qualified disaster and ending on June 

4 30, 2024. 

5 (c) LOANS FROM QUALIFIED PLANS.— 

6 (1) INCREASE IN LIMIT ON LOANS NOT TREAT7 ED AS DISTRIBUTIONS.—In the case of any loan 

8 from a qualified employer plan (as defined under 

9 section 72(p)(4) of the Internal Revenue Code of 

10 1986) to a qualified individual made during the pe11 riod beginning on the date of the enactment of this 

12 Act and ending on June 30, 2024— 

13 (A) clause (i) of section 72(p)(2)(A) of 

14 such Code shall be applied by substituting 

15 ‘‘$100,000’’ for ‘‘$50,000’’, and 

16 (B) clause (ii) of such section shall be ap17 plied by substituting ‘‘the present value of the 

18 nonforfeitable accrued benefit of the employee 

19 under the plan’’ for ‘‘one-half of the present 

20 value of the nonforfeitable accrued benefit of 

21 the employee under the plan’’. 

22 (2) DELAY OF REPAYMENT.—In the case of a 

23 qualified individual (with respect to any qualified 

24 disaster) with an outstanding loan (on or after the 

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1 aster) from a qualified employer plan (as defined in 

2 section 72(p)(4) of the Internal Revenue Code of 

3 1986)— 

4 (A) if the due date pursuant to subpara5 graph (B) or (C) of section 72(p)(2) of such 

6 Code for any repayment with respect to such 

7 loan occurs during the period beginning on the 

8 first day of the incident period of such qualified 

9 disaster and ending on the date which is 180 

10 days after the last day of such incident period, 

11 such due date shall be delayed for 1 year (or, 

12 if later, until June 30, 2024), 

13 (B) any subsequent repayments with re14 spect to any such loan shall be appropriately 

15 adjusted to reflect the delay in the due date 

16 under subparagraph (A) and any interest accru17 ing during such delay, and 

18 (C) in determining the 5-year period and 

19 the term of a loan under subparagraph (B) or 

20 (C) of section 72(p)(2) of such Code, the period 

21 described in subparagraph (A) of this para22 graph shall be disregarded. 

23 (3) QUALIFIED INDIVIDUAL.—For purposes of 

24 this subsection, the term ‘‘qualified individual’’ 

25 means any individual— 


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1 (A) whose principal place of abode at any 

2 time during the incident period of any qualified 

3 disaster is located in the qualified disaster area 

4 with respect to such qualified disaster, and 

5 (B) who has sustained an economic loss by 

6 reason of such qualified disaster. 

7 (d) PROVISIONS RELATING TO PLAN AMEND8 MENTS.— 

9 (1) IN GENERAL.—If this subsection applies to 

10 any amendment to any plan or annuity contract, 

11 such plan or contract shall be treated as being oper12 ated in accordance with the terms of the plan during 

13 the period described in paragraph (2)(B)(i). 

14 (2) AMENDMENTS TO WHICH SUBSECTION AP15 PLIES.— 

16 (A) IN GENERAL.—This subsection shall 

17 apply to any amendment to any plan or annuity 

18 contract which is made— 

19 (i) pursuant to any provision of this 

20 section, or pursuant to any regulation 

21 issued by the Secretary or the Secretary of 

22 Labor under any provision of this section, 

23 and 

24 (ii) on or before the last day of the 

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1 ary 1, 2024, or such later date as the Sec2 retary may prescribe. 

3 In the case of a governmental plan (as defined 

4 in section 414(d) of the Internal Revenue Code 

5 of 1986), clause (ii) shall be applied by sub6 stituting the date which is 2 years after the 

7 date otherwise applied under clause (ii). 

8 (B) CONDITIONS.—This subsection shall 

9 not apply to any amendment unless— 

10 (i) during the period— 

11 (I) beginning on the date that 

12 this section or the regulation de13 scribed in subparagraph (A)(i) takes 

14 effect (or in the case of a plan or con15 tract amendment not required by this 

16 section or such regulation, the effec17 tive date specified by the plan), and 

18 (II) ending on the date described 

19 in subparagraph (A)(ii) (or, if earlier, 

20 the date the plan or contract amend21 ment is adopted), 

22 the plan or contract is operated as if such plan 

23 or contract amendment were in effect, and 

24 (ii) such plan or contract amendment 

25 applies retroactively for such period. 


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1 SEC. 4. SPECIAL RULES FOR QUALIFIED DISASTER-RE2 LATED PERSONAL CASUALTY LOSSES. 

3 (a) IN GENERAL.—If an individual has a net disaster 

4 loss for any taxable year— 

5 (1) the amount determined under section 

6 165(h)(2)(A)(ii) of the Internal Revenue Code of 

7 1986 shall be equal to the sum of— 

8 (A) such net disaster loss, and 

9 (B) so much of the excess referred to in 

10 the matter preceding clause (i) of section 

11 165(h)(2)(A) of such Code (reduced by the 

12 amount in clause (i) of this subparagraph) as 

13 exceeds 10 percent of the adjusted gross income 

14 of the individual, 

15 (2) in the case of qualified disaster-related per16 sonal casualty losses, section 165(h)(1) of such Code 

17 shall be applied to by substituting ‘‘$500’’ for ‘‘$500 

18 ($100 for taxable years beginning after December 

19 31, 2009)’’, 

20 (3) the standard deduction determined under 

21 section 63(c) of such Code shall be increased by the 

22 net disaster loss, and 

23 (4) section 56(b)(1)(E) of such Code shall not 

24 apply to so much of the standard deduction as is at25 tributable to the increase under subparagraph (C) of 

26 this paragraph. 


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1 (b) NET DISASTER LOSS.—For purposes of this sub2 section, the term ‘‘net disaster loss’’ means the excess of 

3 qualified disaster-related personal casualty losses over per4 sonal casualty gains (as defined in section 165(h)(3)(A) 

5 of the Internal Revenue Code of 1986). 

6 (c) QUALIFIED DISASTER-RELATED PERSONAL CAS7 UALTY LOSSES.—For purposes of this subsection, the 

8 term ‘‘qualified disaster-related personal casualty losses’’ 

9 means losses described in section 165(c)(3) of the Internal 

10 Revenue Code of 1986 which arise in a qualified disaster 

11 area on or after the first day of the incident period of 

12 the qualified disaster to which such area relates, and 

13 which are attributable to such qualified disaster. 

Æ 


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