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Q: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Helping Those Who Serve Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Increasing numbers of members of the Armed Forces 
        serving in Afghanistan and Iraq are suffering from the 
        significant injuries of the current conflict: post traumatic 
        stress disorder and traumatic brain injury (hereafter in this 
        Act referred to as ``PTSD'' and ``TBI'', respectively) .
            (2) A recent report by the RAND Corporation estimated that 
        of the 1.64 million individuals who have been deployed to 
        Afghanistan and Iraq, approximately 300,000 individuals 
        currently suffer from PTSD or major depression and that 320,000 
        report having a probable TBI during deployment.
            (3) The need for mental health services is likely to 
        increase because deployment lengths have increased in the last 
        year, the number of troops who have served in multiple 
        deployments is increasing, and the breaks between deployments 
        have been infrequent.
            (4) Several experts have noted the difficulties faced by 
        members of the Armed Forces in getting screened, diagnosed, and 
        treated for PTSD and TBI. The RAND report found that, of those 
        who met diagnostic criteria for PTSD or major depression, only 
        53 percent had seen a physician or mental health provider to 
        seek help for a mental health problem in the past 12 months.
            (5) Stigma remains a critical barrier to members of the 
        Armed Forces who may be in need of psychological care, 
        especially fears that seeking mental health care will lower the 
        confidence of others in their abilities, threaten career 
        advancement and security clearances, and possibly cause removal 
        from their unit.
            (6) Stigma may be greatest among those individuals with the 
        greatest need for mental health services.
            (7) To combat stigma, the Mental Health Task Force of the 
        Department of Defense and others have noted the need for the 
        Department to reexamine its policies, including those policies 
        related to command notification or self-disclosure of 
        psychological health issues that contribute to fears that 
        seeking mental health care will negatively affect career 
        opportunities or advancement.
            (8) The Mental Health Task Force stated that this 
        ``widespread perception that seeking psychological health 
        services is costly to an individual's career . . . must be 
        challenged through thoughtful refinements in command 
        notification policies, including redefining the balance between 
        the need to encourage those in need to seek help and the need 
        for commanders to know in order to maintain force readiness''.
            (9) Congress recognizes that much change is under way to 
        implement numerous recommendations to address concerns that 
        soldiers in need of mental health services for PTSD and other 
        conditions are not receiving, including efforts led by the 
        Department of Defense and the Department of Veterans Affairs.
            (10) However, without addressing stigma at all levels, 
        including structurally, these laudable efforts may not 
        accomplish their goals.
            (11) In its July 2007 report, the Mental Health Task Force 
        called for ending overly conservative policies that have the 
        unintentional consequence of fueling erroneous beliefs that 
        seeking psychological health care invariably results in 
        permanent damage to one's military career. For example, the 
        Task Force called for allowing, in the case of alcohol use by a 
        member of the Armed Forces, for the member to receive 
        appropriate and non-prejudicial education and preventive 
        services, without a requirement for command notification, when, 
        in a clinician's judgment, the alcohol use does not warrant a 
        diagnosis of substance abuse or dependency or does not require 
        entry into a formal treatment program.
            (12) In May, responding to some of these concerns, 
        Secretary of Defense Robert Gates reportedly approved a change 
        in the Department's security clearance process to help remove 
        the stigma associated with seeking mental health care. Under 
        the change, members of the Armed Forces and employees of the 
        Department of Defense who have received mental health care will 
        no longer have to acknowledge that when they fill out standard 
        security clearance forms, unless the treatment was court-
        ordered or involved violence.
            (13) Congress encourages the Department to explore further 
        changes to notification and other policies to further reduce 
        stigma among members of the Armed Forces, especially as it 
        relates to career opportunities.

SEC. 3. MENTAL HEALTH SERVICES ACCESS DEMONSTRATION PROJECT.

    (a) Demonstration Project Required.--The Secretary of Defense shall 
conduct a demonstration project designed to develop and test options 
for the following:
            (1) Increasing access of members of the Armed Forces 
        returning from deployment abroad, and family members of such 
        members, to accessible, safe, and confidential mental health 
        counseling.
            (2) Reducing stigma and perceived career repercussions 
        associated with such members seeking such services.
            (3) Making high quality mental health services more user 
        friendly and accessible for members of the Armed Forces and 
        their family members, including making services available 
        outside standard working hours.
    (b) Purpose.--The purpose of the demonstration project is to 
provide high-quality treatment, using (to the extent practicable) 
evidence-based treatment, for a broad range of mental health 
conditions, including post-traumatic stress disorder and depression, 
with the goal of early intervention to promote effective coping and 
resilience.
    (c) Duration of Project.--The demonstration project authorized by 
this section shall be implemented for a period of three years beginning 
not later than one year after the date of the enactment of this Act.

SEC. 4. SPECIAL WORKING GROUP ON CONFIDENTIALITY.

    (a) Establishment.--The Secretary of Defense, acting through the 
Assistant Secretary of Defense for Health Affairs, shall establish a 
Special Working Group, which shall be composed of mental health 
professionals from each of the Armed Forces, officials from the Surgeon 
General Offices at each Armed Force, members of the Armed Forces who 
have been deployed in support of Operation Enduring Freedom or 
Operation Iraqi Freedom, and other members as determined appropriated 
by the Assistant Secretary.
    (b) Appointment.--The Secretary shall make every effort to appoint 
members of the working group not later than 60 days after the date of 
the enactment of this Act.
    (c) Purpose.--The Special Working Group shall develop guidelines 
and make recommendations about regulations to ensure that 
confidentiality is protected to the maximum extent possible for members 
of the Armed Forces participating in the demonstration project.
    (d) Specific Duties.--In addition to such other duties as the 
Secretary may assign to the Working Group, the duties of the Working 
Group shall include the following:
            (1) Review of requirements for documentation of health care 
        visits.--The review of current policies, questionnaires, and 
        other relevant documents that require official documentation of 
        health care visits by a member of the Armed Forces seeking 
        mental health services, including when access to such services 
        must be documented in the personnel record of a member.
            (2) Criteria for changes to command notification.--The 
        development of guidelines and criteria for the demonstration 
        project to address any needed changes to military command 
        notification requirements to ensure that a visit to an off-base 
        treatment site by a member of the Armed Forces for mental 
        health services is not recorded on any military medical or 
        other record of the member, except in accordance with 
        guidelines developed under paragraph (3).
            (3) Guidelines for breach of confidentiality.--The 
        development of guidelines for the demonstration project to 
        address the circumstances under which the confidentiality 
        protections afforded to a member of the Armed Forces 
        participating in the demonstration project may be breached and 
        notification to military commanders and documentation in 
        personnel records may be made. Such guidelines shall provide, 
        in general, that confidentiality may be broken only if a mental 
        health professional determines that the member is a threat to 
        the member or to another person.
            (4) Criteria to limit access to treatment records.--The 
        development of criteria for the demonstration project for 
        limiting access to the treatment records of members of the 
        Armed Forces treated at the demonstration locations, including 
        when to allow, if appropriate, appropriate access and 
        notification to military commanders consistent with guidelines 
        developed under paragraph (3).
            (5) Criteria for fitness for duty.--The development of 
        criteria for determining fitness for duty and deployment for a 
        member of the Armed Forces that does not depend solely on the 
        number of visits to mental health providers by the member.
            (6) Guidelines for payment.--The development of guidelines 
        for ensuring that demonstration sites under the demonstration 
        project receive payment from the Department of Defense for 
        treating members of the Armed Forces notwithstanding any 
        requirements of the Department that prohibit such payments 
        without certain commander notification or personnel 
        documentation requirements.
            (7) Changes related to disclosure of services received 
        under project.--The provision of changes as necessary to ensure 
        that those receiving care at demonstration locations are not 
        required to reveal any services they receive at these locations 
        on any military form or questionnaire, except to comply with 
        any guidelines developed under paragraph (3).
            (8) Standards to assess effectiveness of project.--The 
        development of evaluation standards and criteria to use to 
        assess the effectiveness of the demonstration project in 
        increasing access to care, decreasing stigma, and improving 
        high quality mental health care provided to members of the 
        Armed Forces. As appropriate, the evaluation should be 
        structured to include both pre- and post-demonstration 
        assessments of changes in--
                    (A) access and utilization of care;
                    (B) costs of care;
                    (C) outcomes of care;
                    (D) member satisfaction with access to and quality 
                of care; and
                    (E) impact on the ability of military commanders to 
                determine member fitness for duty and deployability.
    (e) Submission of Plan and Deadline.--
            (1) Plan.--The Special Working Group shall submit to the 
        Secretary of Defense a plan with details on the implementation 
        and evaluation of the demonstration project. After approval of 
        the plan by the Secretary, the Special Working Group shall 
        submit to Congress the plan.
            (2) Deadline.--All duties of the Special Working group, 
        including submission of the plan under paragraph (1), shall be 
        completed before selection of any site of the demonstration 
        project under section 3 but in no case shall the date of 
        completion of such duties be later than one year after the date 
        of the enactment of this Act.
    (f) Application of Guidelines and Recommendations.--The guidelines 
and other recommendations, including changes and standards, developed 
by the Special Working Group under this section shall be applicable 
only to the demonstration project unless the Secretary of Defense 
determines otherwise.

SEC. 5. ADVISORY GROUP FOR OVERSIGHT OF DEMONSTRATION PROGRAM.

    (a) Establishment.--The Secretary of Defense shall establish an 
advisory group of qualified individuals to oversee implementation of 
the demonstration project.
    (b) Duties.--The advisory group shall--
            (1) ensure that the demonstration project adheres to the 
        guidelines developed by the Special Working Group under section 
        4;
            (2) ensure that plans for implementing the demonstration at 
        selected sites are developed and include--
                    (A) outreach strategies to ensure that participants 
                in the project are informed about the availability of 
                the programs being provided under the project; and
                    (B) a plan for training and certifying mental 
                health providers as well as the development of 
                strategies and settings, including settings that are 
                not located at military treatment facilities, where 
                care can be offered;
            (3) ensure that the demonstration project has detailed 
        evaluation plans, using the criteria and standards developed by 
        the Special Working Group; and
            (4) ensure that independent evaluations of the 
        demonstration project are conducted in accordance with the 
        guidelines developed by the Special Working Group, and that the 
        results of those evaluations are provided to the Secretary of 
        Defense.

SEC. 6. REPORTS ON DEMONSTRATION PROJECT.

    (a) Reports Required.--
            (1) In general.--The Secretary of Defense shall submit to 
        the Committees on Armed Services of the Senate and the House of 
        Representatives two reports on the demonstration project.
            (2) First report.--The first report shall examine and 
        assess the plan developed by the Special Working Group under 
        section 4(e)(1) for implementation and evaluation of the 
        demonstration project.
            (3) Second report.--The second report shall include the 
        following:
                    (A) The results of the demonstration project, 
                evaluated in accordance with the guidelines and other 
                criteria, changes, and standards developed by the 
                Special Working Group.
                    (B) Recommendations on whether any of the policy 
                changes tested in the demonstration project should be 
                adopted throughout the Department of Defense.
                    (C) A plan to ensure that each member of the Armed 
                Forces participating in the demonstration project 
                continues to have access to mental health services and 
                providers after the conclusion of the demonstration 
                project.
    (b) Deadlines.--The first report under this section shall be 
submitted not later than one year after the date the demonstration 
project begins to be implemented. The second report shall be submitted 
at the completion of the demonstration project.

SEC. 7. STUDY AND REPORT ON RETENTION OF MILITARY MENTAL HEALTH 
              PROFESSIONALS.

    (a) Study.--The Secretary of Defense, in consultation with the 
Surgeon General of each branch of the Armed Forces, shall conduct a 
study to determine the reasons for attrition among military mental 
health professionals and to make recommendations to increase 
recruitment and retention of military mental health professionals, such 
as through scholarships, loan forgiveness, or updates in current 
recruiting bonuses.
    (b) Report.--Not later than six months after the date of the 
enactment of this Act, the Secretary of Defense shall submit to 
Congress a report on the study conducted and recommendations made under 
subsection (a), including--
            (1) the estimated cost of implementing each such 
        recommendation;
            (2) with respect to each branch of the Armed Forces, an 
        estimate of the existing number of military mental health 
        professionals and the estimated number of such professionals 
        required to meet demand, including for future years, for mental 
        health services; and
            (3) any recommendations for legislative changes necessary 
        to implement the recommendations made under such study.
    (c) Military Mental Health Professional Defined.--For purposes of 
this section, the term ``military mental health professional'' means a 
mental health professional who provides mental health services to 
members of the Armed Forces, whether such professional is a member of 
the Armed Forces, an employee of the Department of Defense, or a 
contractor of the Department of Defense.

A: Helping Those Who Serve Act - Directs the Secretary of Defense to conduct a demonstration project (project) designed to: (1) increase access of members of the Armed Forces (members) returning from deployment abroad, and their families, to accessible, safe, and confidential mental health counseling; (2) reduce the stigma and career repercussions associated with seeking such services; and (3) make high-quality mental health services more user-friendly to such members and their families.

Requires the Secretary to: (1) establish a Special Working Group to develop guidelines and recommendations to ensure the protection of confidentiality for members participating in the project; (2) establish an advisory group to oversee project implementation; (3) submit project reports to the congressional defense committees; and (4) conduct a study of reasons for attrition among military mental health professionals, and make recommendations to increase the recruitment and retention of such individuals.
****
Q: SECTION 1. TRANSITIONAL HOUSING ASSISTANCE GRANTS FOR CHILD VICTIMS OF 
              DOMESTIC VIOLENCE, STALKING, OR SEXUAL ASSAULT.

    Subtitle B of the Violence Against Women Act of 1994 (42 U.S.C. 
13701 note; 108 Stat. 1925) is amended by adding at the end the 
following:

``CHAPTER 11--TRANSITIONAL HOUSING ASSISTANCE GRANTS FOR CHILD VICTIMS 
           OF DOMESTIC VIOLENCE, STALKING, OR SEXUAL ASSAULT

``SEC. 40299. TRANSITIONAL HOUSING ASSISTANCE GRANTS FOR CHILD VICTIMS 
              OF DOMESTIC VIOLENCE, STALKING, OR SEXUAL ASSAULT.

    ``(a) In General.--The Attorney General, acting in consultation 
with the Director of the Violence Against Women Office of the 
Department of Justice, shall award grants under this section to States, 
units of local government, Indian tribes, and other organizations 
(referred to in this section as the `recipient') to carry out programs 
to provide assistance to minors, adults, and their dependents--
            ``(1) who are homeless, or in need of transitional housing 
        or other housing assistance, as a result of fleeing a situation 
        of domestic violence; and
            ``(2) for whom emergency shelter services or other crisis 
        intervention services are unavailable or insufficient.
    ``(b) Grants.--Grants awarded under this section may be used for 
programs that provide--
            ``(1) short-term housing assistance, including rental or 
        utilities payments assistance and assistance with related 
        expenses such as payment of security deposits and other costs 
        incidental to relocation to transitional housing for persons 
        described in subsection (a); and
            ``(2) support services designed to enable a minor, an 
        adult, or a dependent of such minor or adult, who is fleeing a 
        situation of domestic violence to--
                    ``(A) locate and secure permanent housing; and
                    ``(B) integrate into a community by providing that 
                minor, adult, or dependent with services, such as 
                transportation, counseling, child care services, case 
                management, employment counseling, and other 
                assistance.
    ``(c) Duration.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        minor, an adult, or a dependent, who receives assistance under 
        this section shall receive that assistance for not more than 18 
        months.
            ``(2) Waiver.--The recipient of a grant under this section 
        may waive the restriction under paragraph (1) for not more than 
        an additional 6 month period with respect to any minor, adult, 
        or dependent, who--
                    ``(A) has made a good-faith effort to acquire 
                permanent housing; and
                    ``(B) has been unable to acquire permanent housing.
    ``(d) Application.--
            ``(1) In general.--Each eligible entity desiring a grant 
        under this section shall submit an application to the Attorney 
        General at such time, in such manner, and accompanied by such 
        information as the Attorney General may reasonably require.
            ``(2) Contents.--Each application submitted pursuant to 
        paragraph (1) shall--
                    ``(A) describe the activities for which assistance 
                under this section is sought; and
                    ``(B) provide such additional assurances as the 
                Attorney General determines to be essential to ensure 
                compliance with the requirements of this section.
            ``(3) Application.--Nothing in this subsection shall be 
        construed to require--
                    ``(A) victims to participate in the criminal 
                justice system in order to receive services; or
                    ``(B) domestic violence advocates to breach client 
                confidentiality.
    ``(e) Report to the Attorney General.--
            ``(1) In general.--A recipient of a grant under this 
        section shall annually prepare and submit to the Attorney 
        General a report describing--
                    ``(A) the number of minors, adults, and dependents 
                assisted under this section; and
                    ``(B) the types of housing assistance and support 
                services provided under this section.
            ``(2) Contents.--Each report prepared and submitted 
        pursuant to paragraph (1) shall include information regarding--
                    ``(A) the amount of housing assistance provided to 
                each minor, adult, or dependent, assisted under this 
                section and the reason for that assistance;
                    ``(B) the number of months each minor, adult, or 
                dependent, received assistance under this section;
                    ``(C) the number of minors, adults, and dependents 
                who--
                            ``(i) were eligible to receive assistance 
                        under this section; and
                            ``(ii) were not provided with assistance 
                        under this section solely due to a lack of 
                        available housing; and
                    ``(D) the type of support services provided to each 
                minor, adult, or dependent, assisted under this 
                section.
    ``(f) Report to Congress.--
            ``(1) Reporting requirement.--The Attorney General, with 
        the Director of the Violence Against Women Office, shall 
        annually prepare and submit to the Committee on the Judiciary 
        of the House of Representatives and the Committee on the 
        Judiciary of the Senate a report that contains a compilation of 
        the information contained in the report submitted under 
        subsection (e).
            ``(2) Availability of report.--In order to coordinate 
        efforts to assist the victims of domestic violence, the 
        Attorney General, in coordination with the Director of the 
        Violence Against Women Office, shall transmit a copy of the 
        report submitted under paragraph (1) to--
                    ``(A) the Office of Community Planning and 
                Development at the United States Department of Housing 
                and Urban Development; and
                    ``(B) the Office of Women's Health at the United 
                States Department of Health and Human Services.
    ``(g) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        to carry out this section $30,000,000 for each of the fiscal 
        years 2004 through 2008.
            ``(2) Limitations.--Of the amount made available to carry 
        out this section in any fiscal year, not more than 3 percent 
        may be used by the Attorney General for salaries and 
        administrative expenses.
            ``(3) Minimum amount.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), unless all eligible applications 
                submitted by any States, units of local government, 
                Indian tribes, or organizations within a State for a 
                grant under this section have been funded, that State, 
                together with the grantees within the State (other than 
                Indian tribes), shall be allocated in each fiscal year, 
                not less than 0.75 percent of the total amount 
                appropriated in the fiscal year for grants pursuant to 
                this section.
                    ``(B) Exception.--The United States Virgin Islands, 
                American Samoa, Guam, and the Northern Mariana Islands 
                shall each be allocated not less than 0.25 percent of 
                the total amount appropriated in the fiscal year for 
                grants pursuant to this section.''.

A: Amends the Violence Against Women Act of 1994 to require the Attorney General to award grants to States, units of local government, Indian tribes, and other organizations to carry out programs to provide short-term housing assistance and related support services to minors, adults, and their dependents: (1) who are homeless, or in need of transitional housing or other housing assistance, as a result of fleeing a situation of domestic violence; and (2) for whom emergency shelter services or other crisis intervention services are unavailable or insufficient.

Limits the duration of such assistance to an 18-month period, except that a grant recipient may extend such assistance for an additional six-month period with respect to any minor, adult, or dependent who has been unable to acquire permanent housing despite a good-faith effort to do so.
****
Q: SECTION 1. INCREASE IN CONTRIBUTION LIMITS AND AMOUNTS AT WHICH PHASE 
              OUT OF DEDUCTION BEGINS FOR INDIVIDUAL RETIREMENT ACCOUNT 
              CONTRIBUTIONS.

    (a) Increase in Maximum Amount of Contribution to Individual 
Retirement Accounts.--
            (1) In general.--Subparagraph (A) of section 219(b)(1) of 
        the Internal Revenue Code of 1986 (relating to maximum amount 
        of deduction) is amended by striking ``$2,000'' and inserting 
        ``the applicable amount''.
            (2) Applicable amount.--Subsection (b) of section 219 of 
        such Code is amended by adding at the end the following new 
        paragraph:
            ``(5) Applicable amount.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `applicable amount' means--
                            ``(i) for any taxable year beginning in 
                        1997, $2,500,
                            ``(ii) for any taxable year beginning after 
                        1997 and before 2006, the applicable amount 
                        determined under this paragraph for the 
                        preceding taxable year, increased by $500, and
                            ``(iii) for any taxable year beginning 
                        after 2005, $7,000.
                    ``(B) Inflation adjustment.--In the case of a 
                taxable year beginning in a calendar year after 2006, 
                the $7,000 amount contained in subparagraph (A)(iii) 
                shall be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment under 
                        section 1(f)(3) for the calendar year in which 
                        the taxable year begins, determined by 
                        substituting `calendar year 2005' for `calendar 
                        year 1992' in subparagraph (B) thereof.
                If any amount as adjusted under the preceding sentence 
                is not a multiple of $10, such amount shall be rounded 
                to the nearest multiple of $10.''
    (b) Increase of Amounts at Which Phase-Out Of Deduction For IRA 
Contributions Begins.--
            (1) In general.--Clauses (i) and (ii) of section 
        219(g)(3)(B) of such Code (relating to limitation on deduction 
        for active participants in certain pension plans) are amended 
        to read as follows:
                            ``(i) in the case of a taxpayer filing a 
                        joint return--
                                    ``(I) for taxable years beginning 
                                in 1997, $50,000,
                                    ``(II) for taxable years beginning 
                                after 1997 and before 2003, the 
                                applicable dollar amount determined 
                                under this subclause for the preceding 
                                taxable year, increased by $10,000, and
                                    ``(III) for taxable years beginning 
                                after 2002, $110,000.
                            ``(ii) in the case of any other taxpayer 
                        (other than a married individual filing a 
                        separate return)--
                                    ``(I) for taxable years beginning 
                                in 1997, $30,000,
                                    ``(II) for taxable years beginning 
                                after 1997 and before 2003, the 
                                applicable dollar amount determined 
                                under this subclause for the preceding 
                                taxable year, increased by $5,000, and
                                    ``(III) for taxable years beginning 
                                after 2002, $60,000, and''
            (2) Inflation adjustment.--Paragraph (3) of section 219(g) 
        of such Code is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Inflation adjustment.--In the case of a 
                taxable year beginning in a calendar year after 2003, 
                the $110,000 amount contained in subparagraph 
                (B)(i)(III) and the $60,000 amount contained in 
                subparagraph (B)(ii)(III) shall each be increased by an 
                amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment under 
                        section 1(f)(3) for the calendar year in which 
                        the taxable year begins, determined by 
                        substituting `calendar year 2004' for `calendar 
                        year 1992' in subparagraph (B) thereof.
                If any amount as adjusted under the preceding sentence 
                is not a multiple of $100, such amount shall be rounded 
                to the nearest multiple of $100.''
    (c) Conforming Amendments.--
            (1) Paragraph (1) of section 408(a) of such Code is amended 
        by striking ``$2,000'' and inserting ``the applicable amount 
        (as in effect under section 219(b) for such taxable year)''.
            (2) Subparagraph (B) of section 408(b)(2) of such Code is 
        amended by striking ``$2,000'' and inserting ``the applicable 
        amount in effect under section 219(b) for the taxable year of 
        such individual''.
            (3) Subsection (b) of section 408 of such Code is amended 
        in the last sentence by striking `$2,000'' and inserting ``the 
        applicable amount in effect under section 219(b) for such 
        taxable year''.
            (4) Subparagraph (A) of section 408(d)(5) of such Code is 
        amended by striking ``dollar amount'' and inserting 
        ``applicable amount''.
            (5) Subsection (j) of section 408 of such Code is amended 
        by striking ``$2,000'' and inserting ``applicable''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 2. PENALTY-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS, 
              401(k) PLANS, ETC.

    (a) Distributions Related to First Homes, Education, or Adoption.--
            (1) In general.--Paragraph (2) of section 72(t) (relating 
        to exceptions to 10-percent additional tax on early 
        distributions from qualified retirement plans) is amended by 
        adding at the end the following new subparagraph:
                    ``(E) Certain distributions from individual 
                retirement plans, 401(k) plans, etc.--Distributions to 
                an individual from an individual retirement plan, or 
                from amounts attributable to employer contributions 
                made pursuant to elective deferrals described in 
                subparagraph (A) or (C) of section 402(g)(3) or section 
                501(c)(18)(D)(iii), to the extent such distributions do 
                not exceed the sum of--
                            ``(i) qualified first-time homebuyer 
                        distributions (as defined in paragraph (7)) 
                        made during the taxable year,
                            ``(ii) qualified education expenses (as 
                        defined in paragraph (8)) of the taxpayer for 
                        the taxable year, and
                            ``(iii) qualified adoption expenses (as 
                        defined in section 23(d), determined without 
                        regard to section 23(d)(2)(B)) paid or incurred 
                        by the taxpayer during the taxable year.''
            (2) Definitions.--Section 72(t) is amended by adding at the 
        end the following new paragraphs:
            ``(7) Qualified first-time homebuyer distributions.--For 
        purposes of paragraph (2)(E)(i)--
                    ``(A) In general.--The term `qualified first-time 
                homebuyer distribution' means any payment or 
                distribution received by an individual to the extent 
                such payment or distribution is used by the individual 
                before the close of the 60th day after the day on which 
                such payment or distribution is received to pay 
                qualified acquisition costs with respect to a principal 
                residence of a first-time homebuyer who is such 
                individual, the spouse of such individual, or any 
                child, grandchild, or ancestor of such individual or 
                the individual's spouse.
                    ``(B) Qualified acquisition costs.--For purposes of 
                this paragraph, the term `qualified acquisition costs' 
                means the costs of acquiring, constructing, or 
                reconstructing a residence. Such term includes any 
                usual or reasonable settlement, financing, or other 
                closing costs.
                    ``(C) First-time homebuyer; other definitions.--For 
                purposes of this paragraph--
                            ``(i) First-time homebuyer.--The term 
                        `first-time homebuyer' means any individual 
                        if--
                                    ``(I) such individual (and if 
                                married, such individual's spouse) had 
                                no present ownership interest in a 
                                principal residence during the 2-year 
                                period ending on the date of 
                                acquisition of the principal residence 
                                to which this paragraph applies, and
                                    ``(II) subsection (h) or (k) of 
                                section 1034 did not suspend the 
                                running of any period of time specified 
                                in section 1034 with respect to such 
                                individual on the day before the date 
                                the distribution is applied pursuant to 
                                subparagraph (A).
                            ``(ii) Principal residence.--The term 
                        `principal residence' has the same meaning as 
                        when used in section 1034.
                            ``(iii) Date of acquisition.--The term 
                        `date of acquisition' means the date--
                                    ``(I) on which a binding contract 
                                to acquire the principal residence to 
                                which subparagraph (A) applies is 
                                entered into, or
                                    ``(II) on which construction or 
                                reconstruction of such a principal 
                                residence is commenced.
                    ``(D) Special rule where delay in acquisition.--If 
                any distribution from any individual retirement plan 
                fails to meet the requirements of subparagraph (A) 
                solely by reason of a delay or cancellation of the 
                purchase or construction of the residence, the amount 
                of the distribution may be contributed to an individual 
                retirement plan as provided in section 408(d)(3)(A)(i) 
                (determined by substituting `120 days' for `60 days' in 
                such section), 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) applies to any other amount.
            ``(8) Qualified education expenses.--For purposes of 
        paragraph (2)(E)(ii)--
                    ``(A) In general.--The term `qualified higher 
                education expenses' means tuition, fees, books, 
                supplies, and equipment required for the education of--
                            ``(i) the taxpayer,
                            ``(ii) the taxpayer's spouse, or
                            ``(iii) any child (as defined in section 
                        151(c)(3)), grandchild, or ancestor of the 
                        taxpayer or the taxpayer's spouse,
                whether or not such education takes place at an 
                eligible educational institution (as defined in section 
                135(c)(3)).
                    ``(B) Coordination with savings bond provisions.--
                The amount of qualified education expenses for any 
                taxable year shall be reduced by any amount excludable 
                from gross income under section 135.''
            (3) Conforming amendment.--Subparagraph (B) of section 
        72(t)(2) is amended by striking ``or (D)'' and inserting ``, 
        (D), or (E)''.
    (b) Penalty-Free Distributions for Certain Unemployed Individuals 
Not Limited to Health Insurance Costs and Allowed From 401(k) Plans, 
Etc.--Subparagraph (D) of section 72(t)(2) is amended--
            (1) in clause (i), by inserting ``, or from amounts 
        attributable to employer contributions made pursuant to 
        elective deferrals described in subparagraph (A) or (C) of 
        section 402(g)(3) or section 501(c)(18)(D)(iii),'' after 
        ``individual retirement plan'',
            (2) in clause (i), by inserting ``and'' at the end of 
        subclause (I), by striking ``, and'' at the end of subclause 
        (II) and inserting a period, and by striking subclause (III), 
        and
            (3) by striking ``for health insurance premiums'' in the 
        heading.
    (c) Unlimited Penalty-Free Distributions for Medical Care and 
Expanded Definition of Dependents for Purposes of Such Distributions.--
Subparagraph (B) of section 72(t)(2) is amended by striking ``medical 
care'' and all that follows and inserting ``medical care, determined--
                            ``(i) without regard to whether the 
                        employee itemizes deductions for such taxable 
                        year, and
                            ``(ii) in the case of a distribution from 
                        an individual retirement plan, or from amounts 
                        attributable to employer contributions made 
                        pursuant to elective deferrals described in 
                        subparagraph (A) or (C) of section 402(g)(3) or 
                        section 501(c)(18)(D)(iii)--
                                    ``(I) without regard to whether or 
                                not such expenses exceed 7.5 percent of 
                                adjusted gross income, and
                                    ``(II) by treating an individual's 
                                dependents as including all children 
                                and grandchildren of the individual (or 
                                of such individual's spouse), and all 
                                ancestors of the individual (or of such 
                                individual's spouse).''
    (d) Effective Date.--The amendments made by this section shall 
apply to payments and distributions in taxable years beginning after 
December 31, 1996.

A:
Amends the Internal Revenue Code to increase the:  (1) maximum deduction for individual retirement account contributions; and (2) income amount at which phase-out of that deduction begins. 
Exempts from the early distribution penalty:  (1) distributions from certain types of retirement plans for first-time home buyer, education, or adoption expenses; and (2) for unemployed individuals (currently, for unemployed individuals for health insurance premiums).  Modifies requirements regarding penalties for medical care early distributions.
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