[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6961 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 6961
To amend the Internal Revenue Code of 1986 to allow certain public
employees a deduction for distributions from governmental plans for
health and long-term care insurance, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 18, 2008
Mr. Crowley introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow certain public
employees a deduction for distributions from governmental plans for
health and long-term care insurance, and for other purposes.
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 ``Healthcare Enhancement for Local
Public Servants Act of 2008''.
SEC. 2. DISTRIBUTIONS FROM GOVERNMENTAL PLANS FOR HEALTH AND LONG-TERM
CARE INSURANCE ALLOWED FOR OTHER PUBLIC EMPLOYEES.
(a) In General.--
(1) Distributions allowed for other public employees.--
Paragraph (1) of section 402(l) of the Internal Revenue Code of
1986 (relating to distributions from governmental plans for
health and long-term care insurance) is amended by striking
``retired public safety officer who makes the election
described in paragraph (6)'' and inserting ``retired public
employee''.
(2) Retired public employee.--
(A) Paragraph (4) of section 402(l) of such Code is
amended--
(i) by striking ``(B) eligible retired
public safety officer.--The term `eligible
retired public safety officer' means'' and
inserting the following:
``(B) Eligible retired public employee.--
``(i) In general.--The term `eligible
retired public employee' means'',
(ii) by inserting ``, public school
personnel, or other public employee'' after
``public safety officer'' in subparagraph (B),
and
(iii) by redesignating subparagraph (C) as
clause (ii), by moving such clause (as so
redesignated) 2 ems to the right, and by
inserting after such clause (as so
redesignated) the following new clauses:
``(iii) Public school personnel.--The term
`public school personnel' shall have the same
meaning given such term by section 4151(10) of
the elementary and secondary education Act of
1965 (20 U.S.C. 7161(10)) whether employed by
an institution of higher education (as defined
in section 101 of the Higher Education Act of
1965 (20 U.S.C. 1001) or a local educational
agency (as defined in section 9101 of the
Elementary and Secondary Education Act of 1965
(20 U.S.C. 7801(26)).
``(iv) Public employee.--The term `public
employee' means any employee of a State,
political subdivision of a State, or agency or
instrumentality of a State or political
subdivision of a State.''.
(3) Conforming amendment.--
(A) Subsection (l) of section 402 of such Code (as
amended by this section) is amended by striking
``retired public safety officer'' in each place it
appears and inserting ``retired public employee''.
(B) Subparagraph (D) of section 402(l)(4) of such
Code is redesignated as subparagraph (C).
(b) Effective Date.--The amendments made by this section shall
apply to distributions in taxable years beginning after December 31,
2008.
SEC. 3. DISTRIBUTION ALLOWED AS DEDUCTION RATHER THAN EXCLUDED FROM
GROSS INCOME.
(a) In General.--
(1) Deduction allowed.--Paragraph (1) of section 402(l) of
the Internal Revenue Code of 1986 is amended by striking
``gross income of such employee for such taxable year does not
include'' and all that follows through the period at the end
and inserting the following: ``there shall be allowed as a
deduction from gross income for the taxable year an amount
equal to the aggregate amount of distributions from an eligible
retirement plan of the individual in the taxable year to the
extent that such amount does not exceed the amount paid by such
employee for qualified health premiums for such taxable year.''
(2) Deduction with respect to surviving spouse.--Subsection
(l) of section 402 of such Code is amended by striking
paragraph (6) and inserting the following new paragraph:
``(6) Special rule for surviving spouse.--In the case of a
deceased individual with respect to whom a deduction was
allowed under paragraph (1) for the taxable year closed by
reason of the individual's death, the surviving spouse of such
individual shall be treated as the employee with respect to the
plan for purposes of paragraph (1) for all subsequent taxable
years.''.
(b) Deduction Allowed Whether or Not Taxpayer Itemizes.--Subsection
(a) of section 62 of such Code is amended by inserting after paragraph
(21) the following new paragraph:
``(22) Distributions from governmental retirement plans for
health and long-term care insurance for public employees.--The
deduction allowed by section 402(l).''.
(c) Conforming Amendments.--
(1) Paragraph (1) of section 402(l) of such Code is amended
by striking ``of the employee, his spouse, or dependents (as
defined in section 152)''.
(2) Paragraph (2) of section 402(l) of such Code is amended
by striking ``The amount which may be excluded from gross
income for the taxable year by reason of paragraph (1)'' and
inserting ``The amount allowable as a deduction under paragraph
(1) for the taxable year''.
(3) Paragraph (3) of section 402(l) of such Code is amended
to read as follows:
``(3) Distributions must be included in gross income.--An
amount shall be treated as a distribution for purposes of
paragraph (1) only to the extent that such amount is included
in gross income for the taxable year.''.
(4) Paragraph (7) and (8) of section 402(l) of such Code
are each amended by striking ``The amounts excluded from gross
income'' and inserting ``Any amount allowable as a deduction''.
(5) Subsection (a) of section 403 of such Code is amended
by striking paragraph (2).
(6) Subsection (a) of section 457 of such Code is amended
by striking paragraph (3).
(d) Effective Date.--The amendments made by this section shall
apply to distributions in taxable years beginning after December 31,
2008.
SEC. 4. FURTHER MODIFICATIONS RELATING TO 402(L).
(a) In General.--
(1) Subsection (l) of section 402 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(9) Cost-of-living adjustment.--In the case of taxable
years beginning after December 31, 2009, the Secretary shall
adjust the $3,000 amount under paragraph (2) at the same time
and in the same manner as under section 415(d), except that the
base period shall be the calendar quarter beginning July 1,
2008, and any increase under this paragraph which is not a
multiple of $100 shall be rounded to the next lowest multiple
of $100.''.
(2) Subparagraph (A) of section 402(l)(4) of such Code
(defining eligible retirement plan) is amended to read as
follows:
``(A) Eligible retirement plan.--For purposes of
paragraph (1), the term `eligible retirement plan'
means a plan described in--
``(i) subsection (c)(8)(B)(iii) (and is a
governmental plan within the meaning of section
414(d)),
``(ii) subsection (c)(8)(B)(iv) (and is
maintained by an employer which is a State, a
political subdivision of a State, or an agency
or instrumentality of a State or political
subdivision of a State),
``(iii) subsection (c)(8)(B)(v), or
``(iv) subsection (c)(8)(B)(vi) (and is
maintained by an employer which is a State, a
political subdivision of a State, or an agency
or instrumentality of a State or political
subdivision of a State).''.
(3) Subparagraph (C) of section 402(l)(4) of such Code (as
redesignated by this Act) is amended--
(A) by inserting ``(as defined in section 152,
determined without regard to subsections (b)(1),
(b)(2), and (d)(1)(B) thereof)'' after ``dependents'',
and
(B) by striking ``insurance''.
(4)(A) Subparagraph (B) of section 402(l)(4) of such Code
is amended by striking ``normal retirement age'' and inserting
``normal retirement date''.
(B) Paragraph (4) of section 402(l) of such Code is amended
by adding at the end the following new subparagraph:
``(D) Normal retirement date.--The term `normal
retirement date' means the earliest date on which the
individual may retire and receive a retirement benefit
from the governmental plan which is not reduced by
reason of the individual's age or years of service.''.
(5) Paragraph (5) of section 402(l) of such Code is amended
to read as follows:
``(5) Related plans treated as 1 plan.--For purposes of
this subsection, all eligible retirement plans of an employer
shall be treated as a single plan.''.
(b) Effective Date.--The amendments made by this section shall
apply to distributions in taxable years beginning after December 31,
2008.
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