I

106TH CONGRESS

1ST SESSION H. R. 1322

To amend the Internal Revenue Code of 1986 to increase the limits on

the amount of nondeductible contributions to individual retirement plans

and to adjust the amount of deductible contributions to individual retirement accounts for inflation.

IN THE HOUSE OF REPRESENTATIVES

MARCH 25, 1999

Mr. GALLEGLY (for himself, Mrs. EMERSEON, Mr. FROST, Mr. SHOWS, and

Mr. WEYGAND) 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 increase

the limits on the amount of nondeductible contributions

to individual retirement plans and to adjust the amount

of deductible contributions to individual retirement accounts for inflation.

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 ‘‘Small Savers Retire5 ment Enhancement Act’’.
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1 SEC. 2. INCREASE IN CONTRIBUTION LIMITS FOR INDI2 VIDUAL RETIREMENT ACCOUNTS.

3 (a) IN GENERAL.—Section 408 of the Internal Rev4 enue Code of 1986 (relating to individual retirement ac5 counts) is amended—

6 (1) in subsection (a)(1) by striking ‘‘$2,000’’

7 and inserting ‘‘$5,000’’, and

8 (2) in subsection (b) by striking ‘‘$2,000’’ both

9 places it appears and inserting ‘‘$5,000’’.

10 (b) DESIGNATED NONDEDUCTIBLE CONTRIBU11 TIONS.—Clause (i) of section 408(o)(2)(B) of such Code

12 (relating to limitation on nondeductible contributions) is

13 amended in the matter preceding subclause (I) by striking

14 ‘‘excess of—’’ and inserting ‘‘excess of $5,000, over’’.

15 (c) CONTRIBUTIONS TO ROTH IRA’S.—Subpara16 graph (A) of section 408A(c)(2) (relating to contribution

17 limit) is amended to read as follows:

18 ‘‘(A) $5,000, over’’.

19 (d) INFLATION ADJUSTMENT IN AMOUNTS ALLOW20 ABLE AS DEDUCTIBLE IRA CONTRIBUTIONS.—Subsection

21 (f) of section 219 of such Code (relating to other defini22 tions and special rules) is amended by redesignating para23 graph (7) as paragraph (8) and by inserting after para24 graph (6) the following new paragraph:

25 ‘‘(7) INFLATION ADJUSTMENT.—In the case of

26 a taxable year beginning in a calendar year after
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1 1999, the $2,000 amount set forth in subsection

2 (b)(1)(A) shall be increased by an amount equal

3 to—

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

5 ‘‘(B) the cost-of-living adjustment deter6 mined under section 1(f)(3) for such calendar

7 year by substituting ‘calendar year 1998’ for

8 ‘calendar year 1992’ in subparagraph (B)

9 thereof.

10 If any increase determined under the preceding sen11 tence is not a multiple of $50, such increase shall

12 be rounded to the nearest multiple of $50.’’.

13 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

14 (1) Subsection (j) of section 408 of such Code

15 is amended by striking ‘‘the $2,000 amounts con16 tained’’ and inserting ‘‘the dollar limitations referred

17 to’’.

18 (2) Paragraph (8) of section 408(p) of such

19 Code is amended by striking ‘‘$2,000’’ and inserting

20 ‘‘the dollar limitation in effect under section

21 219(b)(1)(A)’’.

22 (3) Subsection (b) of section 4973 of such Code

23 is amended—

24 (A) in paragraph (1) by amending sub25 paragraph (B) to read as follows:
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1 ‘‘(B) the sum of—

2 ‘‘(i) in the case of contributions for

3 which a deduction is allowed under section

4 219, the amount allowable as a deduction

5 under section 219 for such contributions,

6 and

7 ‘‘(ii) in the case of nondeductible con8 tributions, the amount allowable as a con9 tribution under section 408(o), and’’, and

10 (B) in paragraph (2) by amending sub11 paragraph (C) to read as follows:

12 ‘‘(C) the excess (if any) of—

13 ‘‘(i) the sum of—

14 ‘‘(I) in the case of contributions

15 for which a deduction is allowed under

16 section 219, the maximum amount al17 lowable as a deduction under section

18 219 for the taxable year, and

19 ‘‘(II) in the case of nondeductible

20 contributions, the amount allowable as

21 a contribution under section 408(o),

22 over

23 ‘‘(ii) the amount contributed (deter24 mined without regard to section 219(f)(6))

25 to the accounts or for the annuities (in-
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1 cluding the amount contributed to a Roth

2 IRA) for the taxable year.’’.

3 (f) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to taxable years beginning after

5 December 31, 1998.

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