Stop Subsidizing Multimillion Dollar Corporate Bonuses Act

II 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) intro- duced the following bill; which was read twice and referred to the Com- mittee on Finance A BILL To amend the Internal Revenue Code of 1986 to expand the denial of deduction for certain excessive remunera- tion, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Stop Subsidizing Mul- 4 timillion Dollar Corporate Bonuses Act’’. 5 SEC. 2. EXPANSION OF DENIAL OF DEDUCTION FOR CER- 6 TAIN EXCESSIVE REMUNERATION. 7 (a) IN GENERAL.— 8 VerDate Sep 11 2014 23:14 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2268.IS S2268 jspears on DSK3GMQ082PROD with BILLS 2 •S 2268 IS (1) EXPANSION.—Section 162(m) of the Inter- 1 nal Revenue Code of 1986 is amended— 2 (A) by striking ‘‘applicable employee remu- 3 neration’’ each place it appears in paragraphs 4 (1), (4), and (5)(E) and inserting ‘‘applicable 5 remuneration’’; 6 (B) by striking ‘‘covered employee’’ each 7 place it appears in paragraphs (1) and (4) and 8 inserting ‘‘covered individual’’; and 9 (C) by striking ‘‘employee’’ each place it 10 appears in paragraph (1) and subparagraphs 11 (A), (C)(ii), and (E) of paragraph (4) and in- 12 serting ‘‘individual’’. 13 (2) COVERED INDIVIDUAL.—Paragraph (3) of 14 section 162(m) of such Code is amended to read as 15 follows: 16 ‘‘(3) COVERED INDIVIDUAL.—For purposes of 17 this subsection, the term ‘covered individual’ 18 means— 19 ‘‘(A) any individual who performs services 20 (directly or indirectly) for the taxpayer (or any 21 predecessor) for any taxable year beginning 22 after December 31, 2019, or 23 ‘‘(B) any employee— 24 VerDate Sep 11 2014 23:14 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2268.IS S2268 jspears on DSK3GMQ082PROD with BILLS 3 •S 2268 IS ‘‘(i) who was the principal executive 1 officer or principal financial officer of the 2 taxpayer (or any predecessor) at any time 3 during any preceding taxable year begin- 4 ning after December 31, 2016, and before 5 January 1, 2020, or who was an individual 6 acting in such a capacity, or 7 ‘‘(ii) the total compensation of whom 8 for any taxable year described in clause (i) 9 was required to be reported to shareholders 10 under the Securities Exchange Act of 1934 11 by reason of such individual being among 12 the 3 highest compensated officers for the 13 taxable year (other than any individual de- 14 scribed in clause (i)). 15 Such term shall include any employee who would be 16 described in subparagraph (B)(ii) if the reporting 17 described in such subparagraph were required as so 18 described.’’. 19 (3) CONFORMING AMENDMENTS.— 20 (A) The heading for section 162(m) of the 21 Internal Revenue Code of 1986 is amended by 22 striking ‘‘EMPLOYEE’’. 23 (B) The heading for section 162(m)(4) is 24 amended by striking ‘‘EMPLOYEE’’. 25 VerDate Sep 11 2014 23:14 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2268.IS S2268 jspears on DSK3GMQ082PROD with BILLS 4 •S 2268 IS (b) MODIFICATION OF DEFINITION OF PUBLICLY 1 HELD CORPORATION.—Section 162(m)(2) of the Internal 2 Revenue Code of 1986 is amended— 3 (1) by inserting ‘‘, with respect to any taxable 4 year,’’ after ‘‘means’’; and 5 (2) by striking subparagraph (B) and inserting 6 the following: 7 ‘‘(B) that was required to file reports 8 under section 15(d) of such Act (15 U.S.C. 9 78o(d)) at any time during the 3-taxable year 10 period ending with such taxable year.’’. 11 (c) REGULATORY AUTHORITY.— 12 (1) IN GENERAL.—Section 162(m) of the Inter- 13 nal Revenue Code of 1986 is amended by adding at 14 the end the following new paragraph: 15 ‘‘(7) REGULATIONS.—The Secretary may pre- 16 scribe such guidance, rules, or regulations as are 17 necessary to carry out the purposes of this sub- 18 section, including regulations— 19 ‘‘(A) with respect to reporting, and 20 ‘‘(B) to prevent avoidance of the purposes 21 of this section by providing compensation 22 through a pass-through or other entity.’’. 23 VerDate Sep 11 2014 23:14 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2268.IS S2268 jspears on DSK3GMQ082PROD with BILLS 5 •S 2268 IS (2) CONFORMING AMENDMENT.—Paragraph (6) 1 of section 162(m) of such Code is amended by strik- 2 ing subparagraph (H). 3 (d) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 December 31, 2019. 6 Æ VerDate Sep 11 2014 23:14 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S2268.IS S2268 jspears on DSK3GMQ082PROD with BILLS