Emergency Relief for Federal Workers Act of 2019

II 116TH CONGRESS 1ST SESSION S. 204 To amend the Internal Revenue Code of 1986 to waive certain penalties for affected Federal employees receiving a distribution from the Thrift Savings Plan during a lapse in appropriations, and for other purposes. IN THE SENATE OF THE UNITED STATES JANUARY 24, 2019 Mr. KAINE (for himself, Ms. COLLINS, Mr. WYDEN, Mrs. MURRAY, Mr. JONES, Mr. BENNET, Ms. CORTEZ MASTO, Ms. STABENOW, Mr. VAN HOLLEN, Mr. BLUMENTHAL, Mr. CARPER, Ms. WARREN, Ms. DUCKWORTH, Mr. COONS, Mr. SANDERS, Mr. WARNER, Ms. HASSAN, Mr. MENENDEZ, Mr. BROWN, Mrs. SHAHEEN, Ms. HIRONO, Mr. BOOK- ER, Mr. DURBIN, Ms. SMITH, Mr. HEINRICH, Mr. SCHATZ, Ms. KLO- BUCHAR, Mr. PORTMAN, Mr. UDALL, Mr. MANCHIN, and Mrs. FEIN- STEIN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to waive certain penalties for affected Federal employees receiving a distribution from the Thrift Savings Plan during a lapse in appropriations, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Emergency Relief for 4 Federal Workers Act of 2019’’. 5 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 2 •S 204 IS SEC. 2. WAIVER OF 10-PERCENT ADDITIONAL TAX ON CER- 1 TAIN FINANCIAL HARDSHIP DISTRIBUTIONS 2 FROM THRIFT SAVINGS PLAN. 3 (a) IN GENERAL.—Paragraph (2) of section 72(t) of 4 the Internal Revenue Code of 1986 is amended by adding 5 at the end the following new subparagraph: 6 ‘‘(H) DISTRIBUTIONS TO FEDERAL EM- 7 PLOYEES AFFECTED BY A QUALIFIED LAPSE IN 8 APPROPRIATIONS.— 9 ‘‘(i) IN GENERAL.—Distributions 10 made from the Thrift Savings Plan under 11 subchapter III of chapter 84 of title 5, 12 United States Code, upon financial hard- 13 ship of an individual who is a Federal em- 14 ployee and who is on furlough or who is 15 working without pay due to a qualified 16 lapse in appropriations, if such distribu- 17 tions are made during the period of such 18 qualified lapse in appropriations (including 19 distributions which are in process as of the 20 end of such lapse). 21 ‘‘(ii) LIMITATION.—Subclause (i) shall 22 apply to any distributions only to the ex- 23 tent the aggregate of such distributions 24 does not exceed $30,000 with respect to 25 any qualified lapse in appropriations. 26 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 3 •S 204 IS ‘‘(iii) QUALIFIED LAPSE IN APPRO- 1 PRIATIONS.—For purposes of this subpara- 2 graph, the term ‘qualified lapse in appro- 3 priations’ means a period of continuous 4 lapse in Federal appropriations (including 5 a partial lapse) of at least 2 weeks. 6 ‘‘(iv) OTHER TERMS.—For purposes 7 of this subparagraph, the terms ‘furlough’ 8 and ‘pay’ have the respective meanings 9 given such terms by section 7511 of title 10 5, United States Code.’’. 11 (b) EFFECTIVE DATE.—The amendment made by 12 this section shall apply to distributions made after Decem- 13 ber 21, 2018. 14 SEC. 3. THRIFT SAVINGS PLAN PROVISIONS. 15 (a) IN-SERVICE WITHDRAWALS.—Section 8433(h) of 16 title 5, United States Code, is amended by adding at the 17 end the following: 18 ‘‘(6)(A) In this paragraph— 19 ‘‘(i) the term ‘applicable date’, with respect to 20 a covered age-based withdrawal or covered hardship 21 withdrawal made during a qualified lapse in appro- 22 priations, means the date that is 120 days after the 23 last day of the qualified lapse in appropriations; 24 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 4 •S 204 IS ‘‘(ii) the term ‘covered age-based withdrawal’ 1 means a withdrawal under paragraph (1)(A) made 2 during the period of a qualified lapse in appropria- 3 tions; 4 ‘‘(iii) the term ‘covered hardship withdrawal’ 5 means a withdrawal described in subparagraph (B); 6 and 7 ‘‘(iv) the term ‘qualified lapse in appropriations’ 8 has the meaning given the term in section 9 72(t)(2)(H)(iii) of the Internal Revenue Code of 10 1986. 11 ‘‘(B) The Board shall permit an employee whose pay 12 has been suspended due to a qualified lapse in appropria- 13 tions to make a withdrawal based upon financial hardship 14 under paragraph (1)(B) if— 15 ‘‘(i) the withdrawal is made during the period 16 of such qualified lapse in appropriations (including 17 withdrawals which are in process as of the end of 18 such lapse); and 19 ‘‘(ii) the aggregate amount of any such with- 20 drawals during the period described in clause (i) 21 does not exceed $30,000. 22 ‘‘(C) The Board may not limit the number of covered 23 hardship withdrawals that an employee may make during 24 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 5 •S 204 IS the period of a qualified lapse in appropriations, subject 1 to the dollar limitation under subparagraph (B)(ii). 2 ‘‘(D) A covered hardship withdrawal made by an em- 3 ployee shall not affect the ability of the employee to con- 4 tribute to the Thrift Savings Fund on and after the date 5 on which the applicable qualified lapse in appropriations 6 ends. 7 ‘‘(E)(i) An individual who makes 1 or more covered 8 age-based withdrawals during the period of a qualified 9 lapse in appropriations may, before the applicable date, 10 contribute to the Thrift Savings Fund an amount not to 11 exceed the lower of— 12 ‘‘(I) the aggregate amount of the withdrawals; 13 or 14 ‘‘(II) $30,000. 15 ‘‘(ii) An individual who makes 1 or more covered 16 hardship withdrawals during the period of a qualified 17 lapse in appropriations may, before the applicable date, 18 contribute to the Thrift Savings Fund an amount not to 19 exceed the aggregate amount of the withdrawals. 20 ‘‘(iii) The dollar limitations otherwise applicable to 21 employee contributions under this title or the Internal 22 Revenue Code of 1986 shall not apply to any contribution 23 made under this subparagraph. Any such contribution 24 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 6 •S 204 IS shall be disregarded for purposes of section 8432(d) of 1 this title and section 415(c)(2) of such Code.’’. 2 (b) LOANS.—Section 8433(g) of title 5, United 3 States Code, is amended by adding at the end the fol- 4 lowing: 5 ‘‘(5) The Board shall prescribe rules providing for the 6 secure distribution of the proceeds of a loan under this 7 subsection through an electronic funds transfer, if such 8 a transfer is requested by the employee or Member receiv- 9 ing the loan. 10 ‘‘(6) The Board shall prescribe rules allowing loans 11 to be made under this subsection to employees during a 12 lapse in appropriations, without regard to the period of 13 the lapse in appropriations. 14 ‘‘(7)(A) In this paragraph— 15 ‘‘(i) the term ‘payment missed because of a 16 shutdown’ means a payment— 17 ‘‘(I) on a loan under this subsection made 18 to an employee whose pay has been suspended 19 due to a qualified lapse in appropriations; 20 ‘‘(II) that is due during the qualified lapse 21 in appropriations; and 22 ‘‘(III) that was not paid by the employee; 23 and 24 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 7 •S 204 IS ‘‘(ii) the term ‘qualified lapse in appropriations’ 1 has the meaning given the term in section 2 72(t)(2)(H)(iii) of the Internal Revenue Code of 3 1986. 4 ‘‘(B) The Board shall prescribe rules providing that 5 the full amount due for any payments missed because of 6 a shutdown by an employee shall be deducted and withheld 7 from the pay provided to the employee for the period of 8 the qualified lapse in appropriations.’’. 9 SEC. 4. MISSED LOAN PAYMENTS NOT TO BE TREATED AS 10 TAXABLE DISTRIBUTION DURING A QUALI- 11 FIED LAPSE IN APPROPRIATIONS. 12 (a) IN GENERAL.—Paragraph (2) of section 72(p) of 13 the Internal Revenue Code of 1986 is amended by adding 14 at the end the following new subparagraph: 15 ‘‘(E) SPECIAL RULE FOR MISSED LOAN RE- 16 PAYMENT DURING A QUALIFIED LAPSE IN AP- 17 PROPRIATIONS.—Subparagraph (A) shall not 18 fail to apply to any loan from the Thrift Sav- 19 ings Plan under subchapter III of chapter 84 of 20 title 5, United States Code, solely because there 21 is a payment missed because of a shutdown (as 22 defined in section 8433(g)(7)(A) of title 5, 23 United States Code) with respect to such loan, 24 and such loan (or any portion of such loan) 25 VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS 8 •S 204 IS shall not be treated as a taxable distribution 1 solely because of such missed payment.’’. 2 (b) EFFECTIVE DATE.—The amendment made by 3 this section shall apply to missed loan payments the due 4 date for which is after December 21, 2018. 5 Æ VerDate Sep 11 2014 03:29 Jan 29, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S204.IS S204 kjohnson on DSK79L0C42 with BILLS