Text: S.2268 — 116th Congress (2019-2020)All Information (Except Text)

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Introduced in Senate (07/25/2019)


116th CONGRESS
1st Session
S. 2268


To amend the Internal Revenue Code of 1986 to expand the denial of deduction for certain excessive remuneration, and for other purposes.


IN THE SENATE OF THE UNITED STATES

July 25, 2019

Mr. Reed (for himself, Mr. Blumenthal, Mr. Whitehouse, Mr. Merkley, Ms. Baldwin, Ms. Warren, Mr. Van Hollen, and Mr. Brown) 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 expand the denial of deduction for certain excessive remuneration, 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 “Stop Subsidizing Multimillion Dollar Corporate Bonuses Act”.

SEC. 2. Expansion of denial of deduction for certain excessive remuneration.

(a) In general.—

(1) EXPANSION.—Section 162(m) of the Internal Revenue Code of 1986 is amended—

(A) by striking “applicable employee remuneration” each place it appears in paragraphs (1), (4), and (5)(E) and inserting “applicable remuneration”;

(B) by striking “covered employee” each place it appears in paragraphs (1) and (4) and inserting “covered individual”; and

(C) by striking “employee” each place it appears in paragraph (1) and subparagraphs (A), (C)(ii), and (E) of paragraph (4) and inserting “individual”.

(2) COVERED INDIVIDUAL.—Paragraph (3) of section 162(m) of such Code is amended to read as follows:

“(3) COVERED INDIVIDUAL.—For purposes of this subsection, the term ‘covered individual’ means—

“(A) any individual who performs services (directly or indirectly) for the taxpayer (or any predecessor) for any taxable year beginning after December 31, 2019, or

“(B) any employee—

“(i) who was the principal executive officer or principal financial officer of the taxpayer (or any predecessor) at any time during any preceding taxable year beginning after December 31, 2016, and before January 1, 2020, or who was an individual acting in such a capacity, or

“(ii) the total compensation of whom for any taxable year described in clause (i) was required to be reported to shareholders under the Securities Exchange Act of 1934 by reason of such individual being among the 3 highest compensated officers for the taxable year (other than any individual described in clause (i)).

Such term shall include any employee who would be described in subparagraph (B)(ii) if the reporting described in such subparagraph were required as so described.”.

(3) CONFORMING AMENDMENTS.—

(A) The heading for section 162(m) of the Internal Revenue Code of 1986 is amended by striking “employee”.

(B) The heading for section 162(m)(4) is amended by striking “employee”.

(b) Modification of definition of publicly held corporation.—Section 162(m)(2) of the Internal Revenue Code of 1986 is amended—

(1) by inserting “, with respect to any taxable year,” after “means”; and

(2) by striking subparagraph (B) and inserting the following:

“(B) that was required to file reports under section 15(d) of such Act (15 U.S.C. 78o(d)) at any time during the 3-taxable year period ending with such taxable year.”.

(c) Regulatory authority.—

(1) IN GENERAL.—Section 162(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(7) REGULATIONS.—The Secretary may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this subsection, including regulations—

“(A) with respect to reporting, and

“(B) to prevent avoidance of the purposes of this section by providing compensation through a pass-through or other entity.”.

(2) CONFORMING AMENDMENT.—Paragraph (6) of section 162(m) of such Code is amended by striking subparagraph (H).

(d) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2019.