II 

116TH CONGRESS 

1ST SESSION S. 204 

To amend the Internal Revenue Code of 1986 to waive certain penalties 

for affected Federal employees receiving a distribution from the Thrift 

Savings Plan during a lapse in appropriations, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2019 

Mr. KAINE (for himself, Ms. COLLINS, Mr. WYDEN, Mrs. MURRAY, Mr. 

JONES, Mr. BENNET, Ms. CORTEZ MASTO, Ms. STABENOW, Mr. VAN

HOLLEN, Mr. BLUMENTHAL, Mr. CARPER, Ms. WARREN, Ms. 

DUCKWORTH, Mr. COONS, Mr. SANDERS, Mr. WARNER, Ms. HASSAN, 

Mr. MENENDEZ, Mr. BROWN, Mrs. SHAHEEN, Ms. HIRONO, Mr. BOOKER, Mr. DURBIN, Ms. SMITH, Mr. HEINRICH, Mr. SCHATZ, Ms. KLOBUCHAR, Mr. PORTMAN, Mr. UDALL, Mr. MANCHIN, and Mrs. FEINSTEIN) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to waive 

certain penalties for affected Federal employees receiving 

a distribution from the Thrift Savings Plan during a 

lapse in appropriations, and for other purposes. 

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 Workers Act of 2019’’. 


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1 SEC. 2. WAIVER OF 10-PERCENT ADDITIONAL TAX ON CER2 TAIN FINANCIAL HARDSHIP DISTRIBUTIONS 

3 FROM THRIFT SAVINGS PLAN. 

4 (a) IN GENERAL.—Paragraph (2) of section 72(t) of 

5 the Internal Revenue Code of 1986 is amended by adding 

6 at the end the following new subparagraph: 

7 ‘‘(H) DISTRIBUTIONS TO FEDERAL EM8 PLOYEES AFFECTED BY A QUALIFIED LAPSE IN

9 APPROPRIATIONS.— 

10 ‘‘(i) IN GENERAL.—Distributions 

11 made from the Thrift Savings Plan under 

12 subchapter III of chapter 84 of title 5, 

13 United States Code, upon financial hard14 ship of an individual who is a Federal em15 ployee and who is on furlough or who is 

16 working without pay due to a qualified 

17 lapse in appropriations, if such distribu18 tions are made during the period of such 

19 qualified lapse in appropriations (including 

20 distributions which are in process as of the 

21 end of such lapse). 

22 ‘‘(ii) LIMITATION.—Subclause (i) shall 

23 apply to any distributions only to the ex24 tent the aggregate of such distributions 

25 does not exceed $30,000 with respect to 

26 any qualified lapse in appropriations. 


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1 ‘‘(iii) QUALIFIED LAPSE IN APPRO2 PRIATIONS.—For purposes of this subpara3 graph, the term ‘qualified lapse in appro4 priations’ means a period of continuous 

5 lapse in Federal appropriations (including 

6 a partial lapse) of at least 2 weeks. 

7 ‘‘(iv) OTHER TERMS.—For purposes 

8 of this subparagraph, the terms ‘furlough’ 

9 and ‘pay’ have the respective meanings 

10 given such terms by section 7511 of title 

11 5, United States Code.’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to distributions made after Decem14 ber 21, 2018. 

15 SEC. 3. THRIFT SAVINGS PLAN PROVISIONS. 

16 (a) IN-SERVICE WITHDRAWALS.—Section 8433(h) of 

17 title 5, United States Code, is amended by adding at the 

18 end the following: 

19 ‘‘(6)(A) In this paragraph— 

20 ‘‘(i) the term ‘applicable date’, with respect to 

21 a covered age-based withdrawal or covered hardship 

22 withdrawal made during a qualified lapse in appro23 priations, means the date that is 120 days after the 

24 last day of the qualified lapse in appropriations; 


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1 ‘‘(ii) the term ‘covered age-based withdrawal’ 

2 means a withdrawal under paragraph (1)(A) made 

3 during the period of a qualified lapse in appropria4 tions; 

5 ‘‘(iii) the term ‘covered hardship withdrawal’ 

6 means a withdrawal described in subparagraph (B); 

7 and 

8 ‘‘(iv) the term ‘qualified lapse in appropriations’ 

9 has the meaning given the term in section 

10 72(t)(2)(H)(iii) of the Internal Revenue Code of 

11 1986. 

12 ‘‘(B) The Board shall permit an employee whose pay 

13 has been suspended due to a qualified lapse in appropria14 tions to make a withdrawal based upon financial hardship 

15 under paragraph (1)(B) if— 

16 ‘‘(i) the withdrawal is made during the period 

17 of such qualified lapse in appropriations (including 

18 withdrawals which are in process as of the end of 

19 such lapse); and 

20 ‘‘(ii) the aggregate amount of any such with21 drawals during the period described in clause (i) 

22 does not exceed $30,000. 

23 ‘‘(C) The Board may not limit the number of covered 

24 hardship withdrawals that an employee may make during 


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1 the period of a qualified lapse in appropriations, subject 

2 to the dollar limitation under subparagraph (B)(ii). 

3 ‘‘(D) A covered hardship withdrawal made by an em4 ployee shall not affect the ability of the employee to con5 tribute to the Thrift Savings Fund on and after the date 

6 on which the applicable qualified lapse in appropriations 

7 ends. 

8 ‘‘(E)(i) An individual who makes 1 or more covered 

9 age-based withdrawals during the period of a qualified 

10 lapse in appropriations may, before the applicable date, 

11 contribute to the Thrift Savings Fund an amount not to 

12 exceed the lower of— 

13 ‘‘(I) the aggregate amount of the withdrawals; 

14 or 

15 ‘‘(II) $30,000. 

16 ‘‘(ii) An individual who makes 1 or more covered 

17 hardship withdrawals during the period of a qualified 

18 lapse in appropriations may, before the applicable date, 

19 contribute to the Thrift Savings Fund an amount not to 

20 exceed the aggregate amount of the withdrawals. 

21 ‘‘(iii) The dollar limitations otherwise applicable to 

22 employee contributions under this title or the Internal 

23 Revenue Code of 1986 shall not apply to any contribution 

24 made under this subparagraph. Any such contribution 


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1 shall be disregarded for purposes of section 8432(d) of 

2 this title and section 415(c)(2) of such Code.’’. 

3 (b) LOANS.—Section 8433(g) of title 5, United 

4 States Code, is amended by adding at the end the fol5 lowing: 

6 ‘‘(5) The Board shall prescribe rules providing for the 

7 secure distribution of the proceeds of a loan under this 

8 subsection through an electronic funds transfer, if such 

9 a transfer is requested by the employee or Member receiv10 ing the loan. 

11 ‘‘(6) The Board shall prescribe rules allowing loans 

12 to be made under this subsection to employees during a 

13 lapse in appropriations, without regard to the period of 

14 the lapse in appropriations. 

15 ‘‘(7)(A) In this paragraph— 

16 ‘‘(i) the term ‘payment missed because of a 

17 shutdown’ means a payment— 

18 ‘‘(I) on a loan under this subsection made 

19 to an employee whose pay has been suspended 

20 due to a qualified lapse in appropriations; 

21 ‘‘(II) that is due during the qualified lapse 

22 in appropriations; and 

23 ‘‘(III) that was not paid by the employee; 

24 and 


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1 ‘‘(ii) the term ‘qualified lapse in appropriations’ 

2 has the meaning given the term in section 

3 72(t)(2)(H)(iii) of the Internal Revenue Code of 

4 1986. 

5 ‘‘(B) The Board shall prescribe rules providing that 

6 the full amount due for any payments missed because of 

7 a shutdown by an employee shall be deducted and withheld 

8 from the pay provided to the employee for the period of 

9 the qualified lapse in appropriations.’’. 

10 SEC. 4. MISSED LOAN PAYMENTS NOT TO BE TREATED AS 

11 TAXABLE DISTRIBUTION DURING A QUALI12 FIED LAPSE IN APPROPRIATIONS. 

13 (a) IN GENERAL.—Paragraph (2) of section 72(p) of 

14 the Internal Revenue Code of 1986 is amended by adding 

15 at the end the following new subparagraph: 

16 ‘‘(E) SPECIAL RULE FOR MISSED LOAN RE17 PAYMENT DURING A QUALIFIED LAPSE IN AP18 PROPRIATIONS.—Subparagraph (A) shall not 

19 fail to apply to any loan from the Thrift Sav20 ings Plan under subchapter III of chapter 84 of 

21 title 5, United States Code, solely because there 

22 is a payment missed because of a shutdown (as 

23 defined in section 8433(g)(7)(A) of title 5, 

24 United States Code) with respect to such loan, 

25 and such loan (or any portion of such loan) 


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1 shall not be treated as a taxable distribution 

2 solely because of such missed payment.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to missed loan payments the due 

5 date for which is after December 21, 2018. 

Æ 


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