‘‘and’’ at the end of subparagraph (B), by striking the 
period at the end of subparagraph (C) and inserting ‘‘, 
and’’, and by inserting at the end the following new sub-
paragraph: 
‘‘(D) any qualified disaster-relief distribu-
tion 
(within 
the 
meaning 
of 
section 
72(t)(2)(G)).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 401(k)(2)(B)(i) of such Code is 
amended by striking ‘‘or’’ at the end of subclause 
(III), by striking ‘‘and’’ at the end of subclause (IV) 
and inserting ‘‘or’’, and by inserting after subclause 
(IV) the following new subclause: 
‘‘(V) the date on which a period 
referred 
to 
in 
section 
72(t)(2)(G)(iii)(II) begins (but only to 
the 
extent 
provided 
in 
section 
72(t)(2)(G)), and’’. 
(2) Section 403(b)(7)(A)(ii) of such Code is 
amended by inserting ‘‘sustains a loss as a result of 
a major disaster declared under section 401 of the 
Robert T. Stafford Disaster Relief and Emergency 
Assistance Act by reason of Hurricane Katrina (but 
only to the extent provided in section 72(t)(2)(G)),’’ 
before ‘‘or’’.
(3) Section 403(b)(11) of such Code is amend-
ed by striking ‘‘or’’ at the end of subparagraph (A), 
by striking the period at the end of subparagraph 
(B) and inserting ‘‘, or’’, and by inserting after sub-
paragraph (B) the following new subparagraph: 
‘‘(C) for distributions to which section 
72(t)(2)(G) applies.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions received after Au-
gust 28, 2005. 
SEC. 202. INCOME AVERAGING FOR DISASTER-RELIEF DIS-
TRIBUTIONS 
RELATED 
TO 
HURRICANE 
KATRINA. 
(a) IN GENERAL.—In the case of any qualified dis-
aster-relief distribution (within the meaning of section 
72(t)(2)(G) of the Internal Revenue Code of 1986) from 
a qualified retirement plan (as defined in section 4974(c) 
of such Code) to a qualified individual, unless the taxpayer 
elects not to have this section apply for any taxable year, 
any amount required to be included in gross income for 
such taxable year shall be so included ratably over the 3- 
taxable year period beginning with such taxable year. 
(b) SPECIAL RULES.— 
(1) APPLICATION TO GOVERNMENTAL SECTION 
457 PLANS.—In determining whether any distribu-
tion is a qualified disaster-relief distribution (as so 
defined) for purposes of this section, an eligible de-
ferred compensation plan (as defined in section 
457(b) of such Code) maintained by an employer de-
scribed in section 457(e)(1)(A) of such Code shall be 
treated as a qualified retirement plan (as so defined) 
(2) CERTAIN RULES TO APPLY.—Rules similar 
to the rules of subparagraph (E) of section 
408A(d)(3) of such Code shall apply for purposes of 
this section. 
(c) QUALIFIED INDIVIDUAL.—For purposes of this 
section, the term ‘‘qualified individual’’ means an indi-
vidual who has sustained a loss as a result of the major 
disaster declared under section 401 of the Robert T. Staf-
ford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5170) by reason of Hurricane Katrina and who 
has a principal place of abode immediately before the dec-
laration in a Hurricane Katrina disaster area. 
(d) HURRICANE KATRINA DISASTER AREA.—For 
purposes of this section, the term ‘‘Hurricane Katrina dis-
aster area’’ means any area which is determined by the 
President to warrant individual or individual and public 
assistance from the Federal Government under the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act 
by reason of Hurricane Katrina.