To amend the Internal Revenue Code of 1986 to allow expanded penalty-free withdrawals from certain retirement plans during periods of unemployment for any employee of an air carrier or of a manufacturer of aircraft or parts or components of aircraft.

January 8, 2003

Mr. TIAHRT introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow expanded penalty-free withdrawals from certain retirement plans during periods of unemployment for any employee of an air carrier or of a manufacturer of aircraft or parts or components of aircraft.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Aviation Employee Assistance Relief Act'.

SEC. 2. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT PENALTY DURING PERIODS OF UNEMPLOYMENT.

(a) IN GENERAL- Paragraph (2) of section 72(t) of the Internal Revenue Code of 1986 (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:

`(G) ADDITIONAL DISTRIBUTIONS TO INDIVIDUALS SEPARATED FROM EMPLOYMENT BY AIR CARRIERS, AIRCRAFT MANUFACTURERS, OR MANUFACTURERS OF PARTS OR COMPONENTS OF AIRCRAFT-

`(i) IN GENERAL- Distributions 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 an individual after separation from qualified employment if--

`(I) such individual has received unemployment compensation for 12 consecutive weeks under any Federal or State unemployment compensation law by reason of such separation, and

`(II) such distributions are made during the period beginning on the date of such separation and ending on June 30, 2003.

`(ii) QUALIFIED EMPLOYMENT- For purposes of this subparagraph, the term `qualified employment' means employment by an air carrier (as defined in section 4102 of title 49, United States Code), by an aircraft manufacturer, or by a manufacturer of parts or components of aircraft.

`(iii) DISTRIBUTIONS AFTER REEMPLOYMENT- Clause (i) shall not apply to any distribution made after the individual has been employed on a fulltime basis for at least 60 days after the separation from employment to which clause (i) applies.

`(iv) COORDINATION WITH SUBPARAGRAPH (D)- Distributions during the period described in clause (i)(II) shall not be taken into account in applying the limitation under subparagraph (D)(i)(III).'

(b) CONFORMING AMENDMENTS-

(1) Section 401(k)(2)(B)(i) 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) the date on which a period referred to in section 72(t)(2)(G) begins, and'.

(2) Section 403(b)(11) of such Code is amended by striking `or' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, or', and by inserting after subparagraph (B) the following new subparagraph:

`(C) for distributions to which section 72(t)(2)(G) applies.'

(c) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after the date of the enactment of this Act.

END