I
103D CONGRESS
2D SESSION
H. R. 4027
To amend the Internal Revenue Code of 1986 to allow penalty-free withdraw-
als from certain retirement plans for the repair or replacement of certain
property damaged in a Presidentially-declared disaster.
IN THE HOUSE OF REPRESENTATIVES
MARCH 11, 1994
Mr. DREIER (for himself, Mr. EVANS, Mr. CALVERT, Mr. COX, Mr. BAKER
of California, Mr. DORNAN, Mr. ROHRABACHER, Mr. MOORHEAD, and
Mr. MCKEON) 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 allow pen-
alty-free withdrawals from certain retirement plans for
the repair or replacement of certain property damaged
in a Presidentially-declared disaster.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. PENALTY-FREE DISTRIBUTIONS FROM CER-
TAIN RETIREMENT PLANS TO REPAIR OR RE-
PLACE CERTAIN PROPERTY DAMAGED IN
PRESIDENTIALLY-DECLARED DISASTERS.
(a) IN GENERAL.—Paragraph (2) of section 72(t) of
the Internal Revenue Code of 1986 (relating to exceptions
to 10-percent additional tax on early distributions from
qualified retirement plans) is amended by adding at the
end thereof the following new subparagraph:
‘‘(D) DISTRIBUTIONS FROM CERTAIN RE-
TIREMENT PLANS FOR DISASTER-RELATED EX-
PENSES.—Distributions from an individual re-
tirement plan, or from amounts attributable to
employer contributions made pursuant to elec-
tive deferrals described in subparagraph (A) or
(C) 
of 
section 
402(g)(3) 
or 
section
501(c)(18)(D)(iii), which are qualified disaster-
related distributions (as defined in paragraph
(6)).’’
(b) DEFINITIONS.—Section 72(t) of such Code is
amended by adding at the end thereof the following new
paragraph:
‘‘(6) QUALIFIED DISASTER-RELATED DISTRIBU-
TIONS.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (2)(D), the term ‘qualified disaster-relat-
ed distribution’ means any distribution received
by an individual to the extent such distribution
is used by such individual before the close of
the 60th day after the day on which such dis-
tribution is received to pay for the repair or re-
placement of qualified disaster-damaged prop-
erty which is—
‘‘(i) personal property of such individ-
ual, or
‘‘(ii) a residence of such individual.
‘‘(B) LIMITATIONS.—
‘‘(i) ONLY
DISTRIBUTIONS
WITHIN
FIRST
YEAR
TO
QUALIFY.—Paragraph
(2)(D) shall not apply to any distribution
made more than 1 year after the date of
the determination referred to in subpara-
graph (C)(ii).
‘‘(ii) WITHDRAWALS LIMITED TO UN-
INSURED LOSSES.—Paragraph (2)(D) shall
apply to distributions to repair or replace
any property—
‘‘(I) only to the extent of the loss
sustained with respect to such prop-
erty which is not compensated for by
insurance or otherwise, and
‘‘(II) in the case of property cov-
ered by insurance, only if a timely
claim is filed for compensation by
such insurance on the loss sustained
with respect to such property.
‘‘(C) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) 
DISASTER-DAMAGED
PROP-
ERTY.—The term ‘qualified disaster-dam-
aged property’ means property—
‘‘(I) which was located in a disas-
ter area on the date of the determina-
tion referred to in clause (ii),
‘‘(II) which was damaged or de-
stroyed as a result of the disaster oc-
curring in such area, and
‘‘(III) which is not connected
with a trade or business or a trans-
action entered into for profit.
‘‘(ii) DISASTER AREA.—The term ‘dis-
aster area’ means an area determined by
the President to warrant assistance under
the Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
‘‘(D) SPECIAL
RULES
RELATING
TO
RE-
PLACEMENT OF RESIDENCE.—For purposes of
this paragraph—
‘‘(i) CERTAIN COSTS INCLUDED.—The
cost of replacing a residence includes any
usual or reasonable settlement, financing,
or other closing costs.
‘‘(ii) SPECIAL RULE WHERE DELAY IN
ACQUISITION.—If any distribution fails to
meet the requirements of subparagraph
(A) solely by reason of a delay or cancella-
tion of the purchase or construction of a
residence, the amount of the distribution
may be contributed to an individual retire-
ment 
plan 
as 
provided 
in 
section
408(d)(3)(A)(i) (determined by substitut-
ing ‘120 days’ for ‘60 days’ in such sec-
tion), except that—
‘‘(I) section 408(d)(3)(B) shall
not be applied to such contribution,
and
‘‘(II) such amount shall not be
taken into account in determining
whether section 408(d)(3)(A)(i) ap-
plies to any other amount.’’
(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 qualified
disaster-related distributions (as de-
fined in section 72(t)(6)) are made,
and’’.
(2) 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 qualified disaster-related distribu-
tions (as defined in section 72(t)(6)).’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions after December 31,
1993, with respect to areas determined after such date
to warrant assistance under the Robert T. Stafford Disas-
ter Relief and Emergency Assistance Act.
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