To amend the Internal Revenue Code of 1986 to allow withdrawals from qualified retirement plans without penalty by individuals within areas determined by the President to be disaster areas by reason of Hurricane Katrina.

Amends the Internal Revenue Code to allow distributions from tax-qualified retirement plans made before December 31, 2006, to individuals who reside within, or own real property located in, a Hurricane Katrina disaster area, without incurring the 10 percent penalty for premature distributions.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3759 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3759

 To amend the Internal Revenue Code of 1986 to allow withdrawals from 
qualified retirement plans without penalty by individuals within areas 
determined by the President to be disaster areas by reason of Hurricane 
                                Katrina.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 13, 2005

    Mr. Wynn (for himself and Mr. Lewis of Kentucky) 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 withdrawals from 
qualified retirement plans without penalty by individuals within areas 
determined by the President to be disaster areas by reason of Hurricane 
                                Katrina.

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

SECTION 1. PENALTY-FREE WITHDRAWALS FROM QUALIFIED RETIREMENT PLANS FOR 
              INDIVIDUALS WITHIN HURRICANE KATRINA DISASTER AREA.

    (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to 10-percent additional tax on early 
distributions from qualified retirement plans) is amended by adding at 
the end the following new subparagraph:
                    ``(G) Distributions to victims of hurricane 
                katrina.--Distributions made before December 31, 2006, 
                to individuals who reside within, or hold real property 
                located within, an area determined by the President to 
                warrant assistance from the Federal Government under 
                the Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act by reason of Hurricane Katrina. 
                Distributions shall not be taken into account under the 
                preceding sentence if such distributions are described 
                in subparagraph (A), (D), (E), or (F) or to the extent 
                paragraph (1) does not apply to such distributions by 
                reason of subparagraph (B).''.
    (b) Conforming Amendment.--Clause (i) of section 401(k)(2)(B) 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) a distribution described in 
                                section 72(t)(2)(G), and''.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions received after the date of the enactment of this Act, 
in taxable years ending after such date.
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