April 4, 2008, 12:00 am ET - Amendment SA 4423 proposed by Senator Nelson FL to Amendment SA 4387.
April 7, 2008, 12:00 am ET - Considered by Senate.
April 8, 2008, 12:00 am ET - Considered by Senate.
April 9, 2008, 12:00 am ET - Considered by Senate.
April 9, 2008, 12:00 am ET - Proposed amendment SA 4423 withdrawn in Senate.
Full Text of this Amendment
production of renewable energy and energy conservation; which was ordered to lie on the table; as follows:
At the end of title VI, insert the following:
SEC. __. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR FORECLOSURE RECOVERY RELIEF FOR INDIVIDUALS WITH MORTGAGES ON THEIR PRINCIPAL RESIDENCES.
(a) In General.--Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified foreclosure recovery distribution.
(1) IN GENERAL.--For purposes of this section, the aggregate amount of distributions received by an individual which may be treated as qualified foreclosure recovery distributions for any taxable year shall not exceed the lesser of--
(A) the individual's qualified mortgage expenditures for the taxable year, or
(B) the excess (if any) of--
(i) $25,000, over
(ii) the aggregate amounts treated as qualified foreclosure recovery distributions received by such individual for all prior taxable years.
(2) TREATMENT OF PLAN DISTRIBUTIONS.--If a distribution to an individual would (without regard to paragraph (1)) be a qualified foreclosure recovery distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a qualified foreclosure recovery 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 exceeds $25,000.
(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 such Code.
(c) Amount Distributed May Be Repaid.--
(1) IN GENERAL.--Any individual who receives a qualified foreclosure recovery distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one 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, as the case may be.
(2) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.--For purposes of such Code, if a contribution is made pursuant to paragraph (1) with respect to a qualified foreclosure recovery 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 qualified foreclosure recovery 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 FOR DISTRIBUTIONS FROM IRAS.--For purposes of such Code, if a contribution is made pursuant to paragraph (1) with respect to a qualified foreclosure recovery 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 qualified foreclosure recovery 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.
(4) APPLICATION TO ELIGIBLE RETIREMENT PLANS.--
(A) IN GENERAL.--Nothing in this section shall be treated as requiring an eligible retirement plan to accept any contributions described in this subsection.
(B) QUALIFICATION.--An eligible retirement plan shall not be treated as violating any requirement of Federal law solely by reason of the acceptance of contributions described in this subparagraph.
(d) Definitions.--For purposes of this section--
(1) QUALIFIED FORECLOSURE RECOVERY DISTRIBUTION.--The term ``qualified foreclosure recovery distribution'' means any distribution to an individual from an eligible retirement plan which is made--
(A) on or after the date of the enactment of this Act and before January 1, 2010, and
(B) during a taxable year during which the individual has qualifying mortgage expenditures.
(2) QUALIFYING MORTGAGE EXPENDITURES.--
(A) IN GENERAL.--The term ``qualifying mortgage expenditures'' means any of the following expenditures:
(i) Payment of principal or interest on an applicable mortgage.
(ii) Payment of costs paid or incurred in refinancing, or modifying the terms of, an applicable mortgage.
(B) APPLICABLE MORTGAGE.--The term ``applicable mortgage'' means a mortgage which--
(i) was entered into after December 31, 1999, and before the date of the enactment of this Act, and
(ii) constitutes a security interest in the principal residence of the mortgagor.
(C) JOINT FILERS.--In the case of married individuals filing a joint return under section 6013 of the Internal Revenue Code of 1986, the qualifying mortgage expenditures of the taxpayer may be allocated between the spouses in such manner as they elect.
(3) ELIGIBLE RETIREMENT PLAN.--The term ``eligible retirement plan'' shall have the meaning given such term by section 402(c)(8)(B) of such Code.
(4) PRINCIPAL RESIDENCE.--The term ``principal residence'' has the same meaning as when used in section 121 of such Code.
(e) Income Inclusion Spread Over 3-Year Period for Qualified Foreclosure Recovery Distributions.--
(1) IN GENERAL.--In the case of any qualified foreclosure recovery distribution, unless the taxpayer elects not to have this subsection 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.
(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, qualified foreclosure recovery distributions shall not be treated as eligible rollover distributions.
(2) QUALIFIED FORECLOSURE RECOVERY DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.--For purposes of such Code, a qualified foreclosure recovery 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.
(3) SUBSTANTIALLY EQUAL PERIODIC PAYMENTS.--A qualified foreclosure recovery distribution--
(A) shall be disregarded in determining whether a payment is a part of a series of substantially equal periodic payment under section 72(t)(2)(A)(iv) of such Code, and
(B) shall not constitute a change in substantially equal periodic payments under section 72(t)(4) of such Code.
(g) Provisions Relating to Plan Amendments.--
(1) IN GENERAL.--If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i).
(2) AMENDMENTS TO WHICH SUBSECTION APPLIES.--
(A) IN GENERAL.--This subsection shall apply to any amendment to any plan or annuity contract which is made--
(i) pursuant to the provisions this section, or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor under this section, and
(ii) on or before the last day of the first plan year beginning on or after January 1, 2010, or such later date as the Secretary of the Treasury may prescribe.
In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii).
(B) CONDITIONS.--This subsection shall not apply to any amendment unless--
(i) during the period--
(I) beginning on the date the legislative or regulatory amendment described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, any later effective date specified by the plan), and
(II) ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted),
the plan or contract is operated as if such plan or contract amendment were in effect; and
(ii) such plan or contract amendment applies retroactively for such period.
(As printed in the Congressional Record for the Senate on Apr 3, 2008.)