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107TH CONGRESS

1ST SESSION H. R. 12

To amend the Internal Revenue Code of 1986 to increase the limitation

on contributions to individual retirement accounts.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 3, 2001

Mr. GALLEGLY (for himself, Mr. FOLEY, Mr. HERGER, and Mr. HAYWORTH)

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 limitation on contributions to individual retirement

accounts.

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 ‘‘IRA Fairness Act of

5 2001’’.

6 SEC. 2. MODIFICATION OF IRA CONTRIBUTION LIMITS.

7 (a) INCREASE IN CONTRIBUTION LIMIT.—

8 (1) IN GENERAL.—Paragraph (1)(A) of section

9 219(b) of the Internal Revenue Code of 1986 (relat-
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1 ing to maximum amount of deduction) is amended

2 by striking ‘‘$2,000’’ and inserting ‘‘the deductible

3 amount’’.

4 (2) DEDUCTIBLE AMOUNT.—Section 219(b) of

5 such Code is amended by adding at the end the fol6 lowing new paragraph:

7 ‘‘(5) DEDUCTIBLE AMOUNT.—For purposes of

8 paragraph (1)(A)—

9 ‘‘(A) IN GENERAL.—The deductible

10 amount shall be determined in accordance with

11 the following table:

‘‘For taxable years The deductible

beginning in: amount is:

2002 ............................................................................. $3,000

2003 ............................................................................. $4,000

2004 and thereafter ..................................................... $5,000.

12 ‘‘(B) CATCH-UP CONTRIBUTIONS FOR INDI13 VIDUALS 50 OR OLDER.—In the case of an indi14 vidual who has attained the age of 50 before

15 the close of the taxable year, the deductible

16 amount for such taxable year shall be an

17 amount equal to 125 percent of such amount

18 determined without regard to this subpara19 graph.

20 ‘‘(C) COST-OF-LIVING ADJUSTMENT.—In

21 the case of any taxable year beginning in a cal22 endar year after 2004, the $5,000 amount
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1 under subparagraph (A) shall be increased by

2 an amount equal to—

3 ‘‘(i) such dollar amount, multiplied by

4 ‘‘(ii) the cost-of-living adjustment de5 termined under section 1(f )(3) for the cal6 endar year in which the taxable year be7 gins, determined by substituting ‘calendar

8 year 2003’ for ‘calendar year 1992’ in sub9 paragraph (B) thereof.

10 ‘‘(D) ROUNDING RULES.—If the deductible

11 amount determined under subparagraph (B),

12 and if any amount after adjustment under sub13 paragraph (C), is not a multiple of $500, such

14 amount shall be rounded to the nearest multiple

15 of $500.’’.

16 (b) CONFORMING AMENDMENTS.—

17 (1) Section 408(a)(1) of such Code is amended

18 by striking ‘‘in excess of $2,000 on behalf of any in19 dividual’’ and inserting ‘‘on behalf of any individual

20 in excess of the amount in effect for such taxable

21 year under section 219(b)(1)(A)’’.

22 (2) Section 408(b)(2)(B) of such Code is

23 amended by striking ‘‘$2,000’’ and inserting ‘‘the

24 dollar amount in effect under section 219(b)(1)(A)’’.
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1 (3) Section 408(b) of such Code is amended by

2 striking ‘‘$2,000’’ in the matter following paragraph

3 (4) and inserting ‘‘the dollar amount in effect under

4 section 219(b)(1)(A)’’.

5 (4) Section 408( j) of such Code is amended by

6 striking ‘‘$2,000’’.

7 (5) Section 408(p)(8) of such Code is amended

8 by striking ‘‘$2,000’’ and inserting ‘‘the dollar

9 amount in effect under section 219(b)(1)(A)’’.

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

11 this section shall apply to taxable years beginning after

12 December 31, 2001.

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