II 116TH CONGRESS 1ST SESSION S. 2544 To provide tax relief for the victims of Hurricane Florence, Hurricane Michael, and certain California wildfires. IN THE SENATE OF THE UNITED STATES SEPTEMBER 25, 2019 Mr. BURR (for himself, Mr. TILLIS, Mrs. FEINSTEIN, Ms. HARRIS, Mr. ISAK- SON, Mr. GRAHAM, and Mr. RUBIO) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide tax relief for the victims of Hurricane Florence, Hurricane Michael, and certain California wildfires. 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 ‘‘Hurricanes Florence 4 and Michael and California Wildfire Tax Relief Act’’. 5 SEC. 2. DEFINITIONS. 6 For purposes of this Act— 7 (1) HURRICANE FLORENCE DISASTER ZONE.— 8 The term ‘‘Hurricane Florence disaster zone’’ means 9 that portion of the Hurricane Florence disaster area 10 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 2544 IS determined by the President to warrant individual or 1 individual and public assistance from the Federal 2 Government under the Robert T. Stafford Disaster 3 Relief and Emergency Assistance Act by reason of 4 Hurricane Florence. 5 (2) HURRICANE FLORENCE DISASTER AREA.— 6 The term ‘‘Hurricane Florence disaster area’’ means 7 an area with respect to which a major disaster has 8 been declared by the President before November 26, 9 2018, under section 401 of such Act by reason of 10 Hurricane Florence. 11 (3) HURRICANE MICHAEL DISASTER ZONE.— 12 The term ‘‘Hurricane Michael disaster zone’’ means 13 that portion of the Hurricane Michael disaster area 14 determined by the President to warrant individual or 15 individual and public assistance from the Federal 16 Government under the Robert T. Stafford Disaster 17 Relief and Emergency Assistance Act by reason of 18 Hurricane Michael. 19 (4) HURRICANE MICHAEL DISASTER AREA.— 20 The term ‘‘Hurricane Michael disaster area’’ means 21 an area with respect to which a major disaster has 22 been declared by the President before November 26, 23 2018, under section 401 of such Act by reason of 24 Hurricane Michael. 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 2544 IS (5) MENDOCINO AND CARR WILDFIRES.— 1 (A) MENDOCINO AND CARR WILDFIRE DIS- 2 ASTER ZONE.—The term ‘‘Mendocino and Carr 3 wildfire disaster zone’’ means that portion of 4 the Mendocino and Carr wildfire disaster area 5 determined by the President to warrant indi- 6 vidual or individual and public assistance from 7 the Federal Government under the Robert T. 8 Stafford Disaster Relief and Emergency Assist- 9 ance Act by reason of the wildfires in California 10 commonly known as the Mendocino and Carr 11 wildfires of 2018. 12 (B) MENDOCINO AND CARR WILDFIRE DIS- 13 ASTER AREA.—The term ‘‘Mendocino and Carr 14 wildfire disaster area’’ means an area with re- 15 spect to which between August 4, 2018, and 16 November 26, 2018, a major disaster has been 17 declared by the President under section 401 of 18 such Act by reason of the wildfire in California 19 commonly known as the Mendocino and Carr 20 wildfires of 2018. 21 (6) CAMP, WOOLSEY, AND HILL WILDFIRES.— 22 (A) CAMP, WOOLSEY, AND HILL WILDFIRE 23 DISASTER ZONE.—The term ‘‘Camp, Woolsey, 24 and Hill wildfire disaster zone’’ means that por- 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 2544 IS tion of the Camp, Woolsey, and Hill wildfire 1 disaster area determined by the President to 2 warrant individual or individual and public as- 3 sistance from the Federal Government under 4 the Robert T. Stafford Disaster Relief and 5 Emergency Assistance Act by reason of the 6 wildfires in California commonly known as the 7 Camp, Woolsey, and Hill wildfires of 2018. 8 (B) CAMP, WOOLSEY, AND HILL WILDFIRE 9 DISASTER AREA.—The term ‘‘Camp, Woolsey, 10 and Hill wildfire disaster area’’ means an area 11 with respect to which between November 12, 12 2018, and December 15, 2018, a major disaster 13 has been declared by the President under sec- 14 tion 401 of such Act by reason of the wildfires 15 in California commonly known as the Camp, 16 Woolsey, and Hill wildfires of 2018. 17 SEC. 3. SPECIAL DISASTER-RELATED RULES FOR USE OF 18 RETIREMENT FUNDS. 19 (a) TAX-FAVORED WITHDRAWALS FROM RETIRE- 20 MENT PLANS.— 21 (1) IN GENERAL.—Section 72(t) of the Internal 22 Revenue Code of 1986 shall not apply to any quali- 23 fied disaster distribution. 24 (2) AGGREGATE DOLLAR LIMITATION.— 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 2544 IS (A) IN GENERAL.—For purposes of this 1 subsection, the aggregate amount of distribu- 2 tions received by an individual which may be 3 treated as qualified disaster distributions for 4 any taxable year shall not exceed the excess (if 5 any) of— 6 (i) $100,000, over 7 (ii) the aggregate amounts treated as 8 qualified disaster distributions received by 9 such individual for all prior taxable years. 10 (B) TREATMENT OF PLAN DISTRIBU- 11 TIONS.—If a distribution to an individual would 12 (without regard to subparagraph (A)) be a 13 qualified disaster distribution, a plan shall not 14 be treated as violating any requirement of the 15 Internal Revenue Code of 1986 merely because 16 the plan treats such distribution as a qualified 17 disaster distribution, unless the aggregate 18 amount of such distributions from all plans 19 maintained by the employer (and any member 20 of any controlled group which includes the em- 21 ployer) to such individual exceeds $100,000. 22 (C) CONTROLLED GROUP.—For purposes 23 of subparagraph (B), the term ‘‘controlled 24 group’’ means any group treated as a single 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 2544 IS employer under subsection (b), (c), (m), or (o) 1 of section 414 of the Internal Revenue Code of 2 1986. 3 (D) SPECIAL RULE FOR INDIVIDUALS AF- 4 FECTED BY MORE THAN ONE DISASTER.—The 5 limitation of subparagraph (A) shall be applied 6 separately with respect to distributions de- 7 scribed in each clause of paragraph (4)(A). 8 (3) AMOUNT DISTRIBUTED MAY BE REPAID.— 9 (A) IN GENERAL.—Any individual who re- 10 ceives a qualified disaster distribution may, at 11 any time during the 3-year period beginning on 12 the day after the date on which such distribu- 13 tion was received, make one or more contribu- 14 tions in an aggregate amount not to exceed the 15 amount of such distribution to an eligible retire- 16 ment plan of which such individual is a bene- 17 ficiary and to which a rollover contribution of 18 such distribution could be made under section 19 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 20 457(e)(16), of the Internal Revenue Code of 21 1986, as the case may be. 22 (B) TREATMENT OF REPAYMENTS OF DIS- 23 TRIBUTIONS FROM ELIGIBLE RETIREMENT 24 PLANS OTHER THAN IRAS.—For purposes of 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 2544 IS the Internal Revenue Code of 1986, if a con- 1 tribution is made pursuant to subparagraph (A) 2 with respect to a qualified disaster distribution 3 from an eligible retirement plan other than an 4 individual retirement plan, then the taxpayer 5 shall, to the extent of the amount of the con- 6 tribution, be treated as having received the 7 qualified disaster distribution in an eligible roll- 8 over distribution (as defined in section 9 402(c)(4) of such Code) and as having trans- 10 ferred the amount to the eligible retirement 11 plan in a direct trustee to trustee transfer with- 12 in 60 days of the distribution. 13 (C) TREATMENT OF REPAYMENTS FOR 14 DISTRIBUTIONS FROM IRAS.—For purposes of 15 the Internal Revenue Code of 1986, if a con- 16 tribution is made pursuant to subparagraph (A) 17 with respect to a qualified disaster distribution 18 from an individual retirement plan (as defined 19 by section 7701(a)(37) of such Code), then, to 20 the extent of the amount of the contribution, 21 the qualified disaster distribution shall be treat- 22 ed as a distribution described in section 23 408(d)(3) of such Code and as having been 24 transferred to the eligible retirement plan in a 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 2544 IS direct trustee to trustee transfer within 60 days 1 of the distribution. 2 (4) DEFINITIONS.—For purposes of this sub- 3 section— 4 (A) QUALIFIED DISASTER DISTRIBU- 5 TION.—Except as provided in paragraph (2), 6 the term ‘‘qualified disaster distribution’’ 7 means— 8 (i) any distribution from an eligible 9 retirement plan made on or after Sep- 10 tember 7, 2018, and before January 1, 11 2020, to an individual whose principal 12 place of abode on September 7, 2018, is lo- 13 cated in the Hurricane Florence disaster 14 area and who has sustained an economic 15 loss by reason of Hurricane Florence, 16 (ii) any distribution from an eligible 17 retirement plan made on or after October 18 7, 2018, and before January 1, 2020, to 19 an individual whose principal place of 20 abode on October 7, 2018, is located in the 21 Hurricane Michael disaster area and who 22 has sustained an economic loss by reason 23 of Hurricane Michael, 24 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 2544 IS (iii) any distribution from an eligible 1 retirement plan made on or after July 23, 2 2018, and before January 1, 2020, to an 3 individual whose principal place of abode 4 during any portion of the period from July 5 23, 2018, to September 19, 2018, is lo- 6 cated in the Mendocino and Carr wildfire 7 disaster area and who has sustained an 8 economic loss by reason of the wildfires to 9 which the declaration of such area relates, 10 and 11 (iv) any distribution from an eligible 12 retirement plan made on or after Novem- 13 ber 8, 2018, and before January 1, 2020, 14 to an individual whose principal place of 15 abode during any portion of the period 16 from November 8, 2018, to December 15, 17 2018, is located in the Camp, Woolsey, and 18 Hill wildfire disaster area and who has 19 sustained an economic loss by reason of 20 the wildfires to which the declaration of 21 such area relates. 22 (B) ELIGIBLE RETIREMENT PLAN.—The 23 term ‘‘eligible retirement plan’’ shall have the 24 meaning given such term by section 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 2544 IS 402(c)(8)(B) of the Internal Revenue Code of 1 1986. 2 (5) INCOME INCLUSION SPREAD OVER 3-YEAR 3 PERIOD.— 4 (A) IN GENERAL.—In the case of any 5 qualified disaster distribution, unless the tax- 6 payer elects not to have this paragraph apply 7 for any taxable year, any amount required to be 8 included in gross income for such taxable year 9 shall be so included ratably over the 3-taxable- 10 year period beginning with such taxable year. 11 (B) SPECIAL RULE.—For purposes of sub- 12 paragraph (A), rules similar to the rules of sub- 13 paragraph (E) of section 408A(d)(3) of the In- 14 ternal Revenue Code of 1986 shall apply. 15 (6) SPECIAL RULES.— 16 (A) EXEMPTION OF DISTRIBUTIONS FROM 17 TRUSTEE TO TRUSTEE TRANSFER AND WITH- 18 HOLDING RULES.—For purposes of sections 19 401(a)(31), 402(f), and 3405 of the Internal 20 Revenue Code of 1986, qualified disaster dis- 21 tributions shall not be treated as eligible roll- 22 over distributions. 23 (B) QUALIFIED DISASTER DISTRIBUTIONS 24 TREATED AS MEETING PLAN DISTRIBUTION RE- 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 2544 IS QUIREMENTS.—For purposes the Internal Rev- 1 enue Code of 1986, a qualified disaster dis- 2 tribution shall be treated as meeting the re- 3 quirements of sections 401(k)(2)(B)(i), 4 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) 5 of such Code. 6 (b) RECONTRIBUTIONS OF WITHDRAWALS FOR 7 HOME PURCHASES.— 8 (1) RECONTRIBUTIONS.— 9 (A) IN GENERAL.—Any individual who re- 10 ceived a qualified distribution may, during the 11 applicable period, make one or more contribu- 12 tions in an aggregate amount not to exceed the 13 amount of such qualified distribution to an eli- 14 gible retirement plan (as defined in section 15 402(c)(8)(B) of the Internal Revenue Code of 16 1986) of which such individual is a beneficiary 17 and to which a rollover contribution of such dis- 18 tribution could be made under section 402(c), 19 403(a)(4), 403(b)(8), or 408(d)(3), of such 20 Code, as the case may be. 21 (B) TREATMENT OF REPAYMENTS.—Rules 22 similar to the rules of subparagraphs (B) and 23 (C) of subsection (a)(3) shall apply for purposes 24 of this subsection. 25 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 12 •S 2544 IS (2) QUALIFIED DISTRIBUTION.—For purposes 1 of this subsection— 2 (A) IN GENERAL.—The term ‘‘qualified 3 distribution’’ means any qualified Florence dis- 4 tribution, any qualified Michael distribution, 5 any qualified Mendocino and Carr distribution, 6 and any qualified Camp, Woolsey, and Hill dis- 7 tribution. 8 (B) QUALIFIED FLORENCE DISTRIBU- 9 TION.—The term ‘‘qualified Florence distribu- 10 tion’’ means any distribution— 11 (i) described in section 12 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but 13 only to the extent such distribution relates 14 to financial hardship), 403(b)(11)(B), or 15 72(t)(2)(F), of the Internal Revenue Code 16 of 1986, 17 (ii) received after February 28, 2018, 18 and before November 8, 2018, and 19 (iii) which was to be used to purchase 20 or construct a principal residence in the 21 Hurricane Florence disaster area, but 22 which was not so purchased or constructed 23 on account of Hurricane Florence. 24 VerDate Sep 11 2014 21:43 Oct 03, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2544.IS S2544 pamtmann on DSKBC07HB2PROD with BILLS 13 [Text truncated for display. 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