Title: Emergency Relief for Federal Contractors Act of 2019
Policy area: Taxation

Summary:
Emergency Relief for Federal Contractors Act of 2019
This bill allows penalty-free distributions up to $30,000 in a taxable year from tax-exempt retirement plans to certain federal contractors and District of Columbia employees made during a federal government shutdown.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 469 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                 S. 469

  To allow penalty-free distributions from retirement accounts in the 
  case of certain Federal contractors impacted by Federal Government 
                               shutdowns.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 13, 2019

 Ms. Cortez Masto (for herself, Mrs. Murray, Mr. Wyden, Ms. Klobuchar, 
 Mrs. Feinstein, Ms. Smith, Mr. Brown, Mr. Casey, Mr. Van Hollen, Mr. 
  Menendez, Ms. Duckworth, Mr. Blumenthal, Mr. Kaine, and Ms. Rosen) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To allow penalty-free distributions from retirement accounts in the 
  case of certain Federal contractors impacted by Federal Government 
                               shutdowns.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Emergency Relief for Federal 
Contractors Act of 2019''.

SEC. 2. TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS.

    (a) In General.--Section 72(t) of the Internal Revenue Code of 1986 
shall not apply to any Federal government shutdown distribution.
    (b) Aggregate Dollar Limitation.--
            (1) In general.--For purposes of this section, the 
        aggregate amount of distributions received by an individual 
        which may be treated as Federal government shutdown 
        distributions for any taxable year shall not exceed $30,000.
            (2) Treatment of plan distributions.--If a distribution to 
        an individual would (without regard to paragraph (1)) be a 
        Federal government shutdown distribution, a plan shall not be 
        treated as violating any provision of law merely because the 
        plan treats such distribution as a Federal government shutdown 
        distribution, unless the aggregate amount of such distributions 
        from all plans maintained by the employer (and any member of 
        any controlled group which includes the employer) to such 
        individual for any taxable year exceeds $30,000.
            (3) Controlled group.--For purposes of paragraph (2), the 
        term ``controlled group'' means any group treated as a single 
        employer under subsection (b), (c), (m), or (o) of section 414 
        of the Internal Revenue Code of 1986.
    (c) Amount Distributed May Be Repaid.--
            (1) In general.--Any individual who receives a Federal 
        government shutdown distribution may, at any time during the 3-
        year period beginning on the day after the date on which such 
        distribution was received, make 1 or more contributions in an 
        aggregate amount not to exceed the amount of such distribution 
        to an eligible retirement plan of which such individual is a 
        beneficiary and to which a rollover contribution of such 
        distribution could be made under section 402(c), 403(a)(4), 
        403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue 
        Code of 1986.
            (2) Treatment of repayments of distributions from eligible 
        retirement plans other than iras.--For purposes of the Internal 
        Revenue Code of 1986, if a contribution is made pursuant to 
        paragraph (1) with respect to a Federal government shutdown 
        distribution from an eligible retirement plan other than an 
        individual retirement plan, then the taxpayer shall, to the 
        extent of the amount of the contribution, be treated as having 
        received the Federal government shutdown distribution in an 
        eligible rollover distribution (as defined in section 402(c)(4) 
        of such Code) and as having transferred the amount to the 
        eligible retirement plan in a direct trustee to trustee 
        transfer within 60 days of the distribution.
            (3) Treatment of repayments of distributions from iras.--
        For purposes of the Internal Revenue Code of 1986, if a 
        contribution is made pursuant to paragraph (1) with respect to 
        a Federal government shutdown distribution from an individual 
        retirement plan (as defined by section 7701(a)(37) of such 
        Code), then, to the extent of the amount of the contribution, 
        the Federal government shutdown distribution shall be treated 
        as a distribution described in section 408(d)(3) of such Code 
        and as having been transferred to the eligible retirement plan 
        in a direct trustee to trustee transfer within 60 days of the 
        distribution.
    (d) Definitions.--For purposes of this section--
            (1) Federal government shutdown distribution.--The term 
        ``Federal government shutdown distribution'' means any 
        distribution which is--
                    (A) received by an applicable individual from an 
                eligible retirement plan; and
                    (B) made during a Federal appropriations lapse with 
                respect to such individual.
            (2) Applicable individual.--The term ``applicable 
        individual'' means any individual--
                    (A) who is a Federal contractor or an employee of a 
                Federal contractor and is placed on unpaid leave or 
                working without pay due to a Federal appropriations 
                lapse,
                    (B) who is an employee of a State or other Federal 
                grantee whose compensation is advanced or reimbursed in 
                whole or in part by the Federal Government, and is 
                furloughed, working without pay, or working with a 
                decrease in pay due to a Federal appropriations lapse, 
                or
                    (C) who is an employee of the District of Columbia 
                Courts, the Public Defender Service for the District of 
                Columbia, or the District of Columbia government and is 
                furloughed or working without pay due to a Federal 
                appropriations lapse.
            (3) Federal appropriations lapse.--
                    (A) In general.--The term ``Federal appropriations 
                lapse'' means any continuous period of at least 2 weeks 
                during which there is a lapse in Federal appropriations 
                (including a partial lapse).
                    (B) Period of lapse.--A period of lapse in Federal 
                appropriations shall not be a Federal appropriations 
                lapse with respect to an individual for longer than the 
                period during which the individual is furloughed, on 
                unpaid leave, or performing work without pay due to 
                such lapse.
            (4) Eligible retirement plan.--The term ``eligible 
        retirement plan'' has the meaning given such term by section 
        402(c)(8)(B) of the Internal Revenue Code of 1986.
    (e) Income Inclusion Spread Over 3-Year Period.--
            (1) In general.--Unless the taxpayer elects not to have 
        this paragraph apply for any taxable year, any amount required 
        to be included in gross income for such taxable year with 
        respect to any Federal government shutdown distribution shall 
        be so included ratably over the 3-taxable-year period beginning 
        with such taxable year.
            (2) Special rule.--For purposes of paragraph (1), rules 
        similar to the rules of subparagraph (E) of section 408A(d)(3) 
        of the Internal Revenue Code of 1986 shall apply.
    (f) Special Rules.--
            (1) Exemption of distributions from trustee to trustee 
        transfer and withholding rules.--For purposes of sections 
        401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 
        1986, a Federal government shutdown distribution shall not be 
        treated as an eligible rollover distribution.
            (2) Federal government shutdown distributions treated as 
        meeting plan distribution requirements.--For purposes of the 
        Internal Revenue Code of 1986, a Federal government shutdown 
        distribution shall be treated as meeting the requirements of 
        sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 
        457(d)(1)(A) of such Code.
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