[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4739 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 4739
To amend the Internal Revenue Code of 1986 to provide a reduced rate of
tax for corporations that maintain a plan for distributing equity to
employees, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 23, 2025
Mr. Suozzi (for himself, Mr. Kelly of Pennsylvania, Mr. Thompson of
California, Mr. Fitzpatrick, Mr. Larson of Connecticut, Ms.
Malliotakis, Mr. Panetta, Ms. Tenney, Ms. Sewell, Mr. Smucker, and Mr.
Horsford) 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 provide a reduced rate of
tax for corporations that maintain a plan for distributing equity to
employees, 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 ``Share Holder Allocation for Rewards
to Employees Plan Act'' or as the ``SHARE Plan Act''.
SEC. 2. REDUCED RATE OF TAX FOR CORPORATIONS THAT MAINTAIN A PLAN FOR
DISTRIBUTING EQUITY TO EMPLOYEES.
(a) In General.--Part II of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by redesignating section 12 as
section 13 and by inserting after section 11 the following new new
section:
``SEC. 12. REDUCED RATE OF TAX FOR CORPORATIONS MAINTAINING SHARE
PLANS.
``(a) In General.--In the case of any corporation which is a SHARE
corporation for any taxable year, the rate of tax under section 11(b)
shall be 3 percentage points less than the rate of tax otherwise in
effect under such section. The preceding sentence shall not apply to
any SHARE corporation for any taxable year, if the application of such
sentence to such taxable year would cause the aggregate income tax
reductions for such taxable year and all preceding taxable years of
such corporation by reason of this section to exceed the aggregate
market value of stock described in subsection (c)(1)(A) (determined as
of the date of issue of such stock) with respect to such corporation.
``(b) SHARE Corporation.--For purposes of this section--
``(1) In general.--The term `SHARE corporation' means, with
respect to any taxable year, any corporation--
``(A) which has an average of 500 or more full-time
employees resident in the United States during such
taxable year,
``(B) which (as of the close of such taxable year)
is domiciled in the United States,
``(C) which demonstrates to the satisfaction of the
Secretary that such corporation (as of the close of
such taxable year) has--
``(i) a SHARE ratio of not less than 5
percent, or
``(ii) made distributions of common stock
of such corporation to employees of such
corporation pursuant to a SHARE plan during
such taxable year which in the aggregate equals
or exceeds 1 percent of the aggregate
outstanding shares of common stock of such
corporation (other than shares held by such
corporation), and
``(D) in the case of any corporation the common
stock of which is not (as of the close of such taxable
year) regularly traded on an established securities
market, which demonstrates to the satisfaction of the
Secretary that such corporation has--
``(i) conducted (as of the close of such
taxable year) a valid market valuation of such
corporation, and
``(ii) provided employees with adequate
opportunities during such taxable year to
liquidate the employee's holdings of such
corporation's stock at the fair market value of
such stock.
``(2) Safe harbor for elective limitation on amount of
stock granted to each employee.--
``(A) In general.--A corporation shall not be
treated as failing to meet the requirement of paragraph
(1)(C) solely because the SHARE plan of such
corporation provides that the amount of common stock of
such corporation distributed under such plan to each
employee shall not exceed $250,000 (determined on the
basis of the fair market value of each share on the
date of issuance of such share).
``(B) Adjustment.--In the case of any taxable year
beginning after December 31, 2025, the Secretary shall
annually adjust the $250,000 amount specified in
subparagraph (A) to take into account national private
sector wage growth (determined with respect to a base
year of 2024).
``(c) SHARE Ratio.--For purposes of this section--
``(1) In general.--The term `SHARE ratio' means, with
respect to any corporation for any taxable year, the ratio
(expressed as a percentage) of--
``(A) the aggregate shares of common stock of such
corporation which have been granted to participating
employees of such corporation pursuant to a SHARE plan
during such taxable year or any prior taxable year,
divided by
``(B) the aggregate outstanding shares of common
stock of such corporation (other than shares held by
such corporation).
``(2) Treatment of certain grants before establishment of
share plan.--If such corporation demonstrates to the
satisfaction of the Secretary that, during the 10 years
preceding the date of the enactment of this section, such
corporation made grants of common stock to eligible employees
of such corporation which were not in exchange for compensation
(other than service as an employee), such stock shall be taken
into account under paragraph (1)(A).
``(3) Treatment of convertible stock.--In the case of any
class of stock of any corporation which may be converted to
common stock, such stock shall be taken into account as common
stock under paragraphs (1)(B) and (2) on a fully diluted basis.
``(4) Exclusion of incentive equity.--
``(A) In general.--Incentive equity shall not be
taken into account under subparagraph (A) or (B) of
paragraph (1) (including any stock which would
otherwise be so taken into account by reason of
paragraph (2) or (3)).
``(B) Incentive equity.--For purposes of this
paragraph, the term `incentive equity' means any
performance-based restricted stock granted to an
employee of the corporation, any stock acquired
pursuant to a performance-based incentive stock option
granted to an employee of the corporation, or any
similar grant of performance-based stock or convertible
equity.
``(5) Treatment of forfeited stock.--In the case of any
stock which is forfeited (by reason of a failure to vest or
otherwise), such stock shall not be taken into account under
paragraph (1) after the second calendar year following the
calendar year in which such stock is so forfeited.
``(d) SHARE Plan.--For purposes of this section--
``(1) In general.--The term `SHARE plan' means, with
respect to any corporation, a plan which provides for making
periodic distributions of common stock of such corporation to
each participating employee of such corporation (determined as
the date of each such periodic distribution).
``(2) Participating employees.--
``(A) In general.--The term `participating
employee' means, with respect to any corporation, any
eligible employee of such corporation who is treated as
a participating employee under the terms of the plan.
``(B) 80-percent requirement.--A plan shall not be
treated as a SHARE plan unless, with respect to each
periodic distribution made under such plan, the lowest
compensated 80 percent of eligible employees of such
corporation are participating employees with respect to
such distribution.
``(3) Eligible employee.--The term `eligible employee'
means, with respect to any corporation, any full-time employee
who is based in the United States and who does not receive
$250,000 or more in annual cash compensation from such
corporation (determined without regard to SHARE plan stock).
The $250,000 amount specified in the preceding sentence shall
be adjusted as provided in subsection (b)(2)(B).
``(4) Common stock.--
``(A) In general.--The term `common stock' means,
with respect to any corporation, stock which has the
same economic and voting rights as the most widely held
(determined without regard to any stock issued under
the SHARE plan) common stock of such corporation which
has both economic and voting rights.
``(B) Substitution of index-based mutual funds or
etfs.--Shares of an index-based mutual fund or exchange
traded fund shall be treated for purposes of this
section in the same manner as shares of common stock
issued by the corporation referred to in subparagraph
(A) in the same ratio that the fair market value of
such shares of the index-based mutual fund or exchange
traded fund bears to the fair market value of such
shares of common stock, determined as of the date that
such shares of the index-based mutual fund or exchange
traded fund are distributed to the employee.
``(5) Distribution requirements.--
``(A) In general.--A plan shall not be treated as a
SHARE plan unless the distributions made under such
plan--
``(i) are made without compensation (other
than service as an employee),
``(ii) except as provided in subparagraph
(B), are made in equal amounts to each
participating employee (determined in the
aggregate with respect to any calendar year and
properly adjusted with respect any employee not
employed at all times during such calendar
year),
``(iii) vest in the employee after such
period of employment of the employee by the
distributing corporation as may be specified in
such plan, except that the period so
specified--
``(I) may not exceed 5 years and
the employer may elect whether to treat
periods of employment occurring before
the establishment of the plan as
counting toward such period, and
``(II) shall be treated as
satisfied upon retirement, termination
of employment without cause, or change
in control of the corporation, and
``(iv) may be sold or transferred without
restriction once vested.
``(B) Adjustments for period of service.--The
requirement of subparagraph (A)(ii) shall be treated as
met if such requirement is met when applied separately
to groups of participating employees divided (under the
terms of the corporation's SHARE plan) on the basis of
the period for which such employees have been employed
by the distributing corporation.
``(e) Publication by Treasury.--The Secretary shall make publicly
available with respect to each taxable year a list of corporations
which the Secretary has identified as SHARE corporations.
``(f) Deduction for SHARE Plan Stock Distributions.--SHARE
corporations shall be allowed a deduction equal to the fair market
value (determined as of distribution) of stock distributed pursuant to
a SHARE plan during the taxable year.
``(g) Corporate Right To Implement SHARE Plan.--Notwithstanding any
other provision of Federal, State, or local law, a corporation shall
not be prevented or enjoined from, or subject to any monetary or other
penalty or damages for, establishing, maintaining, or making
distributions of stock pursuant to, a SHARE plan.
``(h) Aggregation Rules.--In the case of any controlled group
(within the meaning of section 1563(a)), the Secretary may issue such
regulations or other guidance as the Secretary determines to be
appropriate for purposes of applying the provisions of this section to
such group, including regulations or other guidance that coordinates or
consolidates the SHARE plans of the corporations in such group or
allows or requires employees of any corporation in such group to
receive stock of another corporation in such group pursuant to such
SHARE plans.''.
(b) Clerical Amendment.--The table of sections for part II of
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is
amended by redesignating the item relating to section 12 as an item
relating to section 13 and by inserting after the item relating to
section 11 the following new item:
``Sec. 12. Reduced rate of tax for corporations maintaining SHARE
plans.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning more than 1 year after the date of the
enactment of this Act.
SEC. 3. DISTRIBUTIONS OF STOCK ISSUED UNDER SHARE PLANS EXCLUDED FROM
GROSS INCOME.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
139I the following new section:
``SEC. 139J. SHARE PLAN DISTRIBUTIONS.
``(a) In General.--Gross income shall not include any SHARE plan
stock received by an employee under a SHARE plan.
``(b) Definitions Related to SHARE Plans.--For purposes of this
section--
``(1) SHARE plan.--The term `SHARE plan' has the meaning
given such term in section 12.
``(2) SHARE plan stock.--The term `SHARE plan stock' means,
with respect to any employee, stock received by such employee
under a SHARE plan.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item relating to section 139I the
following new item:
``Sec. 139J. SHARE plan distributions.''.
(c) Effective Date.--The amendments made by this section shall
apply to stock received after the date of the enactment of this Act.
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