S.Amdt. 4770

SA 4770. Ms. CANTWELL submitted an amendment intended to be proposed
to amendment SA 4753 proposed by Mr. Reid (for himself and Mr.
McConnell) to the bill H.R. 4853, to amend the Internal Revenue Code of
1986 to extend the funding and expenditure authority of the Airport and
Airway Trust Fund, to amend title 49, United States Code, to extend
authorizations for the airport improvement program, and for other
purposes; which was ordered to lie on the table; as follows:

At the appropriate place, add the following:

SEC. ___. ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE CARRIER
BANKRUPTCY.

(a) General Rules.--
(1) Rollover of airline payment amount.--If a qualified
airline employee receives any airline payment amount and
transfers any portion of such amount to a traditional IRA
within 180 days of receipt of such amount (or, if later,
within 180 days of the date of the enactment of this Act),
then such amount (to the extent so transferred) shall be
treated as a rollover contribution described in section
402(c) of the Internal Revenue Code of 1986. A qualified
airline employee making such a transfer may exclude from
gross income the amount transferred, in the taxable year in
which the airline payment amount was paid to the qualified
airline employee by the commercial passenger airline carrier.
(2) Transfer of amounts attributable to airline payment
amount following rollover to roth ira.--A qualified airline
employee who made a rollover of an airline payment amount to
a Roth IRA pursuant to section 125 of the Worker, Retiree,
and Employer Recovery Act of 2008, may transfer to a
traditional IRA all or any part of the Roth IRA attributable
to such rollover, and the transfer to the traditional IRA
will be deemed to have been made at the time of the rollover
to the Roth IRA, if such transfer is made within 180 days of
the date of the enactment of this Act. A qualified airline
employee making such a transfer may exclude from gross income
the airline payment amount previously rolled over to the Roth
IRA, to the extent an amount attributable to the previous
rollover was transferred to a traditional IRA, in the taxable
year in which the airline payment amount was paid to the
qualified airline employee by the commercial passenger
airline carrier.

[[Page S8870]]

(3) Extension of time to file claim for refund.--A
qualified airline employee who excludes an amount from gross
income in a prior taxable year under paragraph (1) or (2) may
reflect such exclusion in a claim for refund filed within the
period of limitation under section 6511(a) (or, if later,
April 15, 2011).
(b) Treatment of Airline Payment Amounts and Transfers for
Employment Taxes.--For purposes of chapter 21 of the Internal
Revenue Code of 1986 and section 209 of the Social Security
Act, an airline payment amount shall not fail to be treated
as a payment of wages by the commercial passenger airline
carrier to the qualified airline employee in the taxable year
of payment because such amount is excluded from the qualified
airline employee's gross income under subsection (a).
(c) Definitions and Special Rules.--For purposes of this
section--
(1) Airline payment amount.--
(A) In general.--The term ``airline payment amount'' means
any payment of any money or other property which is payable
by a commercial passenger airline carrier to a qualified
airline employee--
(i) under the approval of an order of a Federal bankruptcy
court in a case filed after September 11, 2001, and before
January 1, 2007, and
(ii) in respect of the qualified airline employee's
interest in a bankruptcy claim against the carrier, any note
of the carrier (or amount paid in lieu of a note being
issued), or any other fixed obligation of the carrier to pay
a lump sum amount.

The amount of such payment shall be determined without regard
to any requirement to deduct and withhold tax from such
payment under sections 3102(a) and 3402(a).
(B) Exception.--An airline payment amount shall not include
any amount payable on the basis of the carrier's future
earnings or profits.
(2) Qualified airline employee.--The term ``qualified
airline employee'' means an employee or former employee of a
commercial passenger airline carrier who was a participant in
a defined benefit plan maintained by the carrier which--
(A) is a plan described in section 401(a) of the Internal
Revenue Code of 1986 which includes a trust exempt from tax
under section 501(a) of such Code, and
(B) was terminated or became subject to the restrictions
contained in paragraphs (2) and (3) of section 402(b) of the
Pension Protection Act of 2006.
(3) Traditional ira.--The term ``traditional IRA'' means an
individual retirement plan (as defined in section 7701(a)(37)
of the Internal Revenue Code of 1986) which is not a Roth
IRA.
(4) Roth ira.--The term ``Roth IRA'' has the meaning given
such term by section 408A(b) of such Code.
(d) Surviving Spouse.--If a qualified airline employee died
after receiving an airline payment amount, or if an airline
payment amount was paid to the surviving spouse of a
qualified airline employee in respect of the qualified
airline employee, the surviving spouse of the qualified
airline employee may take all actions permitted under section
125 of the Worker, Retiree and Employer Recovery Act of 2008,
or under this section, to the same extent that the qualified
airline employee could have done had the qualified airline
employee survived.
(e) Effective Date.--This section shall apply to transfers
made after the date of the enactment of this Act with respect
to airline payment amounts paid before, on, or after such
date.
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