II
114th CONGRESS
1st Session
S. 324
IN THE SENATE OF THE UNITED STATES
January 30, 2015
Mr. Enzi (for himself and Mr. Nelson) 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 modify the rules relating to loans made from a qualified employer plan, and for other purposes.
Short title
This Act may be cited as the Shrinking Emergency Account Losses Act of 2015
or the SEAL Act
.
Extended rollover period for the rollover of plan loan offset amounts in certain cases
In general
Paragraph (3) of section 402(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
Rollover of certain plan loan offset amounts
In general
In the case of a qualified plan loan offset amount, paragraph (1) shall not apply to any transfer of such amount made after the due date (including extensions) for filing the return of tax for the taxable year in which such amount is treated as distributed from a qualified employer plan.
Qualified plan loan offset amount
For purposes of this subparagraph, the term qualified plan loan offset amount means a plan loan offset amount which is treated as distributed from a qualified employer plan to a participant or beneficiary solely by reason of—
the termination of the qualified employer plan, or
the failure to meet the repayment terms of the loan from such plan because of the severance from employment of the participant.
Plan loan offset amount
For purposes of clause (ii), the term plan loan offset amount means the amount by which the participant's accrued benefit under the plan is reduced in order to repay a loan from the plan.
Limitation
This subparagraph shall not apply to any plan loan offset amount unless such plan loan offset amount relates to a loan to which section 72(p)(1) does not apply by reason of section 72(p)(2).
Qualified employer plan
For purposes of this subsection, the term qualified employer plan has the meaning given such term by section 72(p)(4).
.
Conforming amendment
Subparagraph (A) of section 402(c)(3) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B)
and inserting subparagraphs (B) and (C)
.
Effective date
The amendments made by this section shall apply to transfers made after the date of the enactment of this Act.
Modification of rules governing hardship distributions
Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury shall modify Treasury Regulation section 1.401(k)–1(d)(3)(iv)(E) to—
delete the prohibition imposed by paragraph (2) thereof, and
to make any other modifications necessary to carry out the purposes of section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986.
Qualified employer plans prohibited from making loans through credit cards and other similar arrangements
In general
Paragraph (2) of section 72(p) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph:
Prohibition of loans through credit cards and other similar arrangements
Subparagraph (A) shall not apply to any loan which is made through the use of any credit card or any other similar arrangement.
.
Effective date
The amendments made by this section shall apply to plan years beginning after the date which is 60 days after the date of the enactment of this Act.