I 
116TH CONGRESS 
1ST SESSION H. R. 4181 
To amend the Internal Revenue Code of 1986 to allow distributions from 
qualified cash or deferred arrangements in the event that the employer 
files for chapter 11 bankruptcy and the employee is not regularly sched-
uled for work or paid. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 9, 2019 
Mr. GRIFFITH 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 dis-
tributions from qualified cash or deferred arrangements 
in the event that the employer files for chapter 11 bank-
ruptcy and the employee is not regularly scheduled for 
work or paid. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. DISTRIBUTIONS FROM QUALIFIED CASH OR DE-
FERRED ARRANGEMENTS ALLOWED IN CHAP-
TER 11 BANKRUPTCY IF EMPLOYEE NOT REG-
ULARLY SCHEDULED FOR WORK OR PAID. 
(a) IN GENERAL.—Section 401(k)(2)(B)(i) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘or’’ 
at the end of subclause (IV), by striking ‘‘and’’ at the end 
of subclause (V) and inserting ‘‘, or’’, and by inserting 
after subclause (V) the following new subclause: 
‘‘(VI) in the case of a qualified 
bankruptcy reorganization delay dis-
tribution (as defined in paragraph 
(15)), the beginning of the period de-
scribed 
in 
paragraph 
(15)(A)(iii), 
and’’. 
(b) QUALIFIED
BANKRUPTCY
REORGANIZATION 
DELAY DISTRIBUTION.—Section 401(k) of such Code is 
amended by adding at the end the following new para-
graph: 
‘‘(15) QUALIFIED
BANKRUPTCY
REORGANIZA-
TION DELAY DISTRIBUTION.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (2)(B)(i)(VI), the term ‘qualified bank-
ruptcy reorganization delay distribution’ means 
any distribution to an employee if— 
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‘‘(i) the employer has filed a case 
under chapter 11 of title 11, United States 
Code, and is under the jurisdiction of the 
court in such case, 
‘‘(ii) such employee, at any time after 
the filing of such case, is not scheduled to 
work for at least the number of hours that 
such employee is customarily scheduled to 
work or is not paid on or before the time 
that such employee is customarily paid, 
and 
‘‘(iii) such distribution is made during 
the period beginning with the first time 
which is described in clause (ii) with re-
spect to such employee and ending on the 
first date thereafter on which such em-
ployee is scheduled to work for at least the 
number of hours that such employee is 
customarily scheduled to work and is paid 
at the time such employee is customarily 
paid (or, if earlier, ending on the date of 
severance from employment). 
‘‘(B) LIMITATION
ON
DISTRIBUTIONS.— 
The aggregate amount of distributions received 
by any employee which may be treated as quali-
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fied bankruptcy reorganization delay distribu-
tions with respect to any case described in sub-
paragraph (A)(i) shall not exceed the amount 
which bears the same proportion to such em-
ployee’s annual salary as the period beginning 
with the beginning of the period described in 
subparagraph (A)(iii) and ending on the date of 
the distribution bears to a calendar year.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to distributions made after 
the date of the enactment of this Act. 
(2) TRANSITION.—During the 2-year period be-
ginning with the date of the enactment of this Act, 
a plan shall not fail to satisfy any provision of the 
Internal Revenue Code of 1986 merely because the 
terms of the plan do not provide for making quali-
fied bankruptcy reorganization delay distributions 
(as defined in section 401(k)(15) of such Code, as 
added by this section) but such plan nonetheless 
provides for such distributions. 
Æ 
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