I 
112TH CONGRESS 
2D SESSION 
H. R. 3899 
To provide for rollover treatment to traditional IRAs of amounts received 
in airline carrier bankruptcy. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 3, 2012 
Mr. LEWIS of Georgia (for himself and Mr. DAVIS of Kentucky) introduced 
the following bill; which was referred to the Committee on Ways and Means 
A BILL 
To provide for rollover treatment to traditional IRAs of 
amounts received in airline carrier bankruptcy. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE 
CARRIER BANKRUPTCY. 
(a) GENERAL RULES.— 
(1) 
ROLLOVER
OF
AIRLINE
PAYMENT 
AMOUNT.—If a qualified airline employee receives 
any airline payment amount and transfers any por-
tion of such amount to a traditional IRA within 180 
days of receipt of such amount (or, if later, within 
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180 days of the date of the enactment of this Act), 
then such amount (to the extent so transferred) 
shall be treated as a rollover contribution described 
in section 402(c) of the Internal Revenue Code of 
1986. A qualified airline employee making such a 
transfer may exclude from gross income the amount 
transferred, in the taxable year in which the airline 
payment amount was paid to the qualified airline 
employee by the commercial passenger airline car-
rier. 
(2) TRANSFER OR AMOUNTS ATTRIBUTABLE TO 
AIRLINE PAYMENT AMOUNT FOLLOWING ROLLOVER 
TO ROTH IRA.—A qualified, airline employee who 
has contributed an airline payment amount to a 
Roth IRA that is treated as a qualified rollover con-
tribution pursuant to section 125 of the Worker, Re-
tiree, and Employer Recovery Act of 2008, may 
transfer to a traditional IRA, in a trustee-to-trustee 
transfer, all or any part of the contribution (together 
with any net income allocable to such contribution), 
and the transfer to the traditional IRA will be 
deemed to have been made at the time of the roll-
over to the Roth IRA, if such transfer is made with-
in 180 days of the date of the enactment of this Act. 
A qualified airline employee making such a transfer 
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may exclude from gross income the airline payment 
amount previously rolled over to the Roth IRA, to 
the extent an amount attributable to the previous 
rollover was transferred to a traditional IRA, in the 
taxable year in which the airline payment amount 
was paid to the qualified airline employee by the 
commercial passenger airline carrier. No amount so 
transferred to a traditional IRA may be treated as 
a qualified rollover contribution with respect to a 
Roth IRA within the 5-taxable year period beginning 
with the taxable year in which such transfer was 
made. 
(3) EXTENSION OF TIME TO FILE CLAIM FOR 
REFUND.—A qualified airline employee who excludes 
an amount from gross income in a prior taxable year 
under paragraph (1) or (2) may reflect such exclu-
sion in a claim for refund filed within the period of 
limitation under section 6511(a) of such Code (or, if 
later, April 15, 2013). 
(4) OVERALL LIMITATION ON AMOUNTS TRANS-
FERRED TO TRADITIONAL IRAS.— 
(A) IN GENERAL.—The aggregate amount 
of airline payment amounts which may be 
transferred to 1 or more traditional IRAs under 
paragraphs (1) and (2) with respect to any 
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qualified employee for any taxable year shall 
not exceed the excess (if any) of— 
(i) 90 percent of the aggregate airline 
payment amounts received by the qualified 
airline employee during the taxable year 
and all preceding taxable years, over 
(ii) the aggregate amount of such 
transfers to which paragraphs (1) and (2) 
applied for all preceding taxable years. 
(B) SPECIAL RULES.—For purposes of ap-
plying the limitation under subparagraph (A)— 
(i) any airline payment amount re-
ceived by the surviving spouse of any quali-
fied employee, and any amount transferred 
to a traditional IRA by such spouse under 
subsection (d), shall be treated as an 
amount received or transferred by the 
qualified employee, and 
(ii) any amount transferred to a tradi-
tional IRA which is attributable to net in-
come described in paragraph (2) shall not 
be taken into account. 
(5) COVERED EXECUTIVES NOT ELIGIBLE TO 
MAKE TRANSFERS.—Paragraphs (1) and (2) shall 
not apply to any transfer by a qualified airline em-
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ployee (or any transfer authorized under subsection 
(d) by a surviving spouse of the qualified airline em-
ployee) if at any time during the taxable year of the 
transfer or any preceding taxable year the qualified 
airline employee held a position described in sub-
paragraph (A) or (B) of section 162(m)(3) with the 
commercial passenger airline carrier from whom the 
airline payment amount was received. 
(b) TREATMENT OF AIRLINE PAYMENT AMOUNTS 
AND TRANSFERS FOR EMPLOYMENT TAXES.—For pur-
poses of chapter 21 of the Internal Revenue Code of 1986 
and section 209 of the Social Security Act, an airline pay-
ment amount shall not fail to be treated as a payment 
of wages by the commercial passenger airline carrier to 
the qualified airline employee in the taxable year of pay-
ment because such amount is excluded from the qualified 
airline employee’s gross income under subsection (a). 
(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
(1) AIRLINE PAYMENT AMOUNT.— 
(A) IN GENERAL.—The term ‘‘airline pay-
ment amount’’ means any payment of any 
money or other property which is payable by a 
commercial passenger airline carrier to a quali-
fied airline employee— 
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(i) under the approval of an order of 
a Federal bankruptcy court in a case filed 
after September 11, 2001, and before Jan-
uary 1, 2007, and 
(ii) in respect of the qualified airline 
employee’s interest in a bankruptcy claim 
against the carrier, any note of the carrier 
(or amount paid in lieu of a note being 
issued), or any other fixed obligation of the 
carrier to pay a lump sum amount. 
The amount of such payment shall be deter-
mined without regard to any requirement to de-
duct and withhold tax from such payment 
under sections 3102(a) of the Internal Revenue 
Code of 1986 and 3402(a) of such Code. 
(B) 
EXCEPTION.—An 
airline 
payment 
amount shall not include any amount payable 
on the basis of the carrier’s future earnings or 
profits. 
(2) QUALIFIED AIRLINE EMPLOYEE.—The term 
‘‘qualified airline employee’’ means an employee or 
former employee of a commercial passenger airline 
carrier who was a participant in a defined benefit 
plan maintained by the carrier which— 
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(A) is a plan described in section 401(a) of 
the Internal Revenue Code of 1986 which in-
cludes a trust exempt from tax under section 
2501(a) of such Code, and 
(B) was terminated or became subject to 
the restrictions contained in paragraphs (2) and 
(3) of section 402(b) of the Pension Protection 
Act of 2006. 
(3) TRADITIONAL IRA.—The term ‘‘traditional 
IRA’’ means an individual retirement plan (as de-
fined in section 7701(a)(37) of the Internal Revenue 
Code of 1986) which is not a Roth IRA. 
(4) ROTH IRA.—The term ‘‘Roth IRA’’ has the 
meaning given such term by section 408A(b) of such 
Code. 
(d) SURVIVING SPOUSE.—If a qualified airline em-
ployee died after receiving an airline payment amount, or 
if an airline payment amount was paid to the surviving 
spouse of a qualified airline employee in respect of the 
qualified airline employee, the surviving spouse of the 
qualified airline employee may take all actions permitted 
under section 125 of the Worker, Retiree, and Employer 
Recovery Act of 2008, or under this section, to the same 
extent that the qualified airline employee could have done 
had the qualified airline employee survived. 
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(e) EFFECTIVE DATE.—This section shall apply to 
transfers made after the date of the enactment of this Act 
with respect to airline payment amounts paid before, on, 
or after such date. 
Æ 
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