I 

111TH CONGRESS 

1ST SESSION H. R. 3903 

To amend the Internal Revenue Code of 1986 to provide a partial exclusion 

of interest from the gross income of individuals, to increase retirement 

plan contribution limitations, and to temporarily suspend minimum distribution requirements for certain defined contribution plans. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 22, 2009 

Mr. REHBERG introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a partial exclusion of interest from the gross income 

of individuals, to increase retirement plan contribution 

limitations, and to temporarily suspend minimum distribution requirements for certain defined contribution 

plans. 

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 ‘‘Securing Tomorrow 

5 by Saving Today Act of 2009’’. 


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1 SEC. 2. EXEMPTION OF CERTAIN INTEREST INCOME FROM 

2 TAX. 

3 (a) IN GENERAL.—Part III of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to 

5 amounts specifically excluded from gross income) is 

6 amended by inserting after section 115 the following new 

7 section: 

8 ‘‘SEC. 116. PARTIAL EXCLUSION OF INTEREST RECEIVED BY 

9 INDIVIDUALS. 

10 ‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in11 come does not include interest otherwise includible in 

12 gross income which is received during the taxable year by 

13 an individual. 

14 ‘‘(b) LIMITATIONS.— 

15 ‘‘(1) MAXIMUM AMOUNT.—The aggregate 

16 amount excluded under subsection (a) for any tax17 able year shall not exceed— 

18 ‘‘(A) in the case of any taxable year begin19 ning in 2009, $500 ($1,000 in the case of a 

20 joint return), and 

21 ‘‘(B) in the case of taxable years beginning 

22 after 2009— 

23 ‘‘(i) in the case of a joint return, 200 

24 percent of the dollar amount in effect 

25 under clause (ii) for the taxable year, and 

26 ‘‘(ii) in any other case, $550. 


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1 ‘‘(2) INFLATION ADJUSTMENT.—In the case of 

2 any taxable year beginning after 2010, the $550 

3 amount contained in paragraph (1)(B)(ii) shall be 

4 increased by an amount equal to— 

5 ‘‘(A) such dollar amount, multiplied by 

6 ‘‘(B) the cost-of-living adjustment deter7 mined under section 1(f)(3) for such calendar 

8 year by substituting ‘calendar year 2009’ for 

9 ‘calendar year 1992’ in subparagraph (B) 

10 thereof. 

11 If any increase under the preceding sentence is not 

12 a multiple of $10, such increase shall be rounded to 

13 the nearest multiple of $10. 

14 ‘‘(c) INTEREST.—For purposes of this section, the 

15 term ‘interest’ means— 

16 ‘‘(1) interest on deposits with a bank (as de17 fined in section 581), 

18 ‘‘(2) amounts (whether or not designated as in19 terest) paid in respect of deposits, investment certifi20 cates, or withdrawable or repurchasable shares, by— 

21 ‘‘(A) a mutual savings bank, cooperative 

22 bank, domestic building and loan association, 

23 industrial loan association or bank, or credit 

24 union, or 


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1 ‘‘(B) any other savings or thrift institution 

2 which is chartered and supervised under Fed3 eral or State law, 

4 the deposits or accounts in which are insured under 

5 Federal or State law or which are protected and 

6 guaranteed under State law. 

7 ‘‘(d) CERTAIN NONRESIDENT ALIENS INELIGIBLE

8 FOR EXCLUSION.—For purposes of this section, in the 

9 case of a nonresident alien individual, subsection (a) shall 

10 apply only in determining the taxes imposed for the tax11 able year pursuant to sections 871(b)(1) and 877(b).’’. 

12 (b) CONFORMING AMENDMENTS.— 

13 (1) Subparagraph (A) of section 32(i)(2) of 

14 such Code is amended by inserting ‘‘(determined 

15 without regard to section 116)’’ before the comma. 

16 (2) Subparagraph (B) of section 86(b)(2) of 

17 such Code is amended to read as follows: 

18 ‘‘(B) increased by the sum of— 

19 ‘‘(i) the amount of interest received or 

20 accrued by the taxpayer during the taxable 

21 year which is exempt from tax, and 

22 ‘‘(ii) the amount of interest received 

23 during the taxable year which is excluded 

24 from gross income under section 116.’’. 


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1 (3) Subsection (d) of section 135 of such Code 

2 is amended by redesignating paragraph (4) as para3 graph (5) and by inserting after paragraph (3) the 

4 following new paragraph: 

5 ‘‘(4) COORDINATION WITH SECTION 116.—This 

6 section shall be applied before section 116.’’. 

7 (4) Paragraph (2) of section 265(a) of such 

8 Code is amended by inserting before the period ‘‘, or 

9 to purchase or carry obligations or shares, or to 

10 make deposits, to the extent the interest thereon is 

11 excludable from gross income under section 116’’. 

12 (5) Subsection (c) of section 584 of such Code 

13 is amended by adding at the end the following new 

14 flush sentence: 

15 ‘‘The proportionate share of each participant in the 

16 amount of interest received by the common trust fund and 

17 to which section 116 applies shall be considered for pur18 poses of such section as having been received by such par19 ticipant.’’. 

20 (6) Subsection (a) of section 643 of such Code 

21 is amended by redesignating paragraph (7) as para22 graph (8) and by inserting after paragraph (6) the 

23 following new paragraph: 


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1 ‘‘(7) INTEREST.—There shall be included the 

2 amount of any interest excluded from gross income 

3 pursuant to section 116.’’. 

4 (7) The table of sections for part III of sub5 chapter B of chapter 1 of such Code is amended by 

6 inserting after the item relating to section 115 the 

7 following new item: 

‘‘Sec. 116. Partial exclusion of dividends and interest received by individuals.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2008. 

11 SEC. 3. INCREASE IN DOLLAR LIMITATIONS ON CONTRIBU12 TIONS TO RETIREMENT PLANS. 

13 (a) PERMANENT INCREASE IN DOLLAR LIMITATION

14 ON DEDUCTION FOR CONTRIBUTIONS TO INDIVIDUAL RE15 TIREMENT PLANS.— 

16 (1) IN GENERAL.—Paragraph (5) of section 

17 219(b) of the Internal Revenue Code of 1986 is 

18 amended— 

19 (A) by amending subparagraph (A) to read 

20 as follows: 

21 ‘‘(A) IN GENERAL.—The deductible 

22 amount for any taxable year is the applicable 

23 dollar amount in effect under section 402(g)(1) 

24 for such taxable year.’’, and 

25 (B) by striking subparagraph (D). 


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1 (2) SIMPLE RETIREMENT ACCOUNTS.—Sub2 paragraph (E) of section 408(p)(2) of such Code is 

3 amended to read as follows: 

4 ‘‘(E) APPLICABLE DOLLAR AMOUNT.—For 

5 purposes of subparagraph (A)(ii), the applicable 

6 dollar amount for any taxable year is the appli7 cable dollar amount in effect under section 

8 402(g)(1) for such taxable year.’’. 

9 (b) TEMPORARY INCREASE IN CONTRIBUTIONS TO

10 DEFINED CONTRIBUTION PLANS.— 

11 (1) INCREASE IN LIMITATION ON ELECTIVE DE12 FERRALS.—Paragraph (1) of section 402(g) of such 

13 Code is amended by adding at the end the following 

14 new subparagraph: 

15 ‘‘(D) TEMPORARY INCREASE IN APPLICA16 BLE DOLLAR AMOUNT.—In the case of taxable 

17 years beginning in calendar year 2009, 2010, or 

18 2011, the applicable dollar amount determined 

19 under subparagraph (B) shall not be less than 

20 $33,000.’’. 

21 (2) INCREASE IN COMBINED EMPLOYEE AND

22 EMPLOYER LIMITATION ON CONTRIBUTIONS TO DE23 FINED CONTRIBUTION PLANS.—Paragraph 1 of sec24 tion 415(c) of such Code is amended by adding at 

25 the end the following new flush sentence: 


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1 ‘‘In the case of taxable years beginning in calendar 

2 year 2009, 2010, or 2011, the dollar amount in ef3 fect under subparagraph (A) shall not be less than 

4 $65,500.’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2008. 

8 SEC. 4. INCREASE IN PERMITTED CATCH-UP CONTRIBU9 TIONS TO RETIREMENT PLANS. 

10 (a) TEMPORARY INCREASE IN PERMITTED CATCH11 UP CONTRIBUTIONS.— 

12 (1) IN GENERAL.—Paragraph (2) of section 

13 414(v) of such Code is amended by adding at the 

14 end the following new subparagraph: 

15 ‘‘(E) TEMPORARY INCREASE IN PER16 MITTED CATCH-UP CONTRIBUTIONS.—In the 

17 case of taxable years beginning in calendar year 

18 2009, 2010, or 2011, the dollar amount in ef19 fect under subparagraph (A) shall not be less 

20 than $10,000.’’. 

21 (2) INDIVIDUAL RETIREMENT PLANS.—Sub22 paragraph (B) of section 219(b)(5) of such Code is 

23 amended by adding at the end the following new 

24 clause: 


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1 ‘‘(iii) SPECIAL RULE FOR 2009

2 THROUGH 2011.—In the case of taxable 

3 years beginning in calendar years 2009, 

4 2010, or 2011, the dollar amount in effect 

5 under clause (i) shall not be less than 

6 $10,000.’’. 

7 (b) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to taxable years beginning after 

9 December 31, 2008. 

10 SEC. 5. SUSPENSION OF MINIMUM DISTRIBUTION RE11 QUIREMENTS. 

12 (a) IN GENERAL.—In the case of an eligible defined 

13 contribution plan of an individual, sections 401(a)(9), 

14 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), and 

15 457(d)(2) of the Internal Revenue Code of 1986 shall not 

16 apply with respect to such individual for any year during 

17 the suspension period. 

18 (b) SUSPENSION PERIOD.—For purposes of this sec19 tion, the term ‘‘suspension period’’ means the period be20 ginning on January 1, 2008, and ending on December 31, 

21 2012. 

22 (c) ELIGIBLE DEFINED CONTRIBUTION PLAN.—For 

23 purposes of this section, the term ‘‘eligible defined con24 tribution plan’’ means— 


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1 (1) a defined contribution plan (within the 

2 meaning of section 414(i) of such Code) which is— 

3 (A) an employee’s trust described in sec4 tion 401(a) of such Code which is exempt from 

5 tax under section 501(a) of such Code, 

6 (B) an annuity plan described in section 

7 403(a) of such Code, 

8 (C) an annuity contract described in sec9 tion 403(b) of such Code, and 

10 (D) an eligible deferred compensation plan 

11 described in section 457(b) of such Code which 

12 is maintained by an eligible employer described 

13 in section 457(e)(1)(A) of such Code, and 

14 (2) an individual retirement plan (as defined in 

15 section 7701(a)(37) of such Code). 

16 (d) SPECIAL RULES.— 

17 (1) REQUIRED BEGINNING DATE DURING SUS18 PENSION PERIOD.—The required beginning date 

19 with respect to any individual under section 

20 401(a)(9) of such Code shall be determined without 

21 regard to this section for purposes of applying sec22 tions 401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 

23 408(b)(3), and 457(d) of such Code for calendar 

24 years after 2009. 


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1 (2) EXCEPTION FOR 5-YEAR RULE.—In the case 

2 of a distribution required under section 

3 401(a)(9)(B)(ii) of such Code, subsection (a) shall 

4 not apply. 

5 (3) EXEMPTION OF DISTRIBUTIONS DURING

6 SUSPENSION PERIOD FROM TRUSTEE TRANSFER AND

7 WITHHOLDING RULES.—For purposes of sections 

8 401(a)(31), 402(f), and 3405 of such Code, any dis9 tribution during the suspension period which, but for 

10 subsection (a), would have been a required distribu11 tion under section 401(a)(9) of such Code shall not 

12 be treated as an eligible rollover distribution. 

13 (e) PROVISIONS RELATING TO PLAN AMEND14 MENTS.— 

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

16 any plan or annuity contract, such plan or contract 

17 shall be treated as being operated in accordance with 

18 the terms of the plan during the period described in 

19 paragraph (2)(B)(i). 

20 (2) AMENDMENTS TO WHICH SUBSECTION AP21 PLIES.— 

22 (A) IN GENERAL.—This subsection shall 

23 apply to any amendment to any plan or annuity 

24 contract which is made— 


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1 (i) pursuant to this section or pursu2 ant to any regulation issued by the Sec3 retary of the Treasury to carry out this 

4 section, and 

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

6 first plan year beginning on or after Janu7 ary 1, 2009. 

8 (B) CONDITIONS.—This subsection shall 

9 not apply to any amendment unless during the 

10 period beginning on the date such amendment 

11 takes effect and ending on December 31, 2009 

12 (or, if earlier, the date the plan or contract 

13 amendment is adopted), the plan or contract is 

14 operated as if such plan or contract amendment 

15 were in effect. 

16 (f) EFFECTIVE DATE.—This section shall take effect 

17 on the date of the enactment of this Act. 

Æ 


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