[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7292 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 7292
To amend the Internal Revenue Code of 1986 to exclude from gross income
compensation received by employees consisting of qualified
distributions of employer stock.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 19, 2008
Mr. Rohrabacher introduced the following bill; which was referred to
the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to exclude from gross income
compensation received by employees consisting of qualified
distributions of employer stock.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. QUALIFIED STOCK DISTRIBUTIONS TO EMPLOYEES.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
139A the following new section:
``SEC. 139B. QUALIFIED STOCK DISTRIBUTIONS TO EMPLOYEES.
``(a) In General.--Gross income shall not include--
``(1) so many shares of any stock received by an individual
in a qualified employee stock distribution of such individual's
employer as does not exceed the maximum stock amount,
``(2) any gain on stock excluded from gross income under
paragraph (1) if such stock is held by such individual for not
less than 10 years, and
``(3) in the case of any qualified disposition of stock
which is described in paragraph (2) (and which meets the
holding requirement of such paragraph), any gain on so much
stock acquired during the 60-day period beginning on the date
of such disposition as does not exceed the fair market value of
the stock so disposed (determined as of the time of
disposition).
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualified employee stock distribution.--The term
`qualified employee stock distribution' means a distribution by
an employer of stock of such employer to all employees
(determined as of the date of the distribution) of such
employer as compensation for services.
``(2) Maximum stock amount.--The term `maximum stock
amount' means, with respect to any distribution, the lowest
number of shares of stock of the employer received by any
employee of the employer in such distribution.
``(3) Qualified disposition.--
``(A) In general.--The term `qualified disposition'
means, with respect to the disposition of any stock
described in paragraph (2) during any calendar year,
the disposition of a number of shares of such stock not
in excess of the excess of--
``(i) the applicable percentage of the
aggregate number of shares of such stock
received during the calendar year that such
stock was received, over
``(ii) the aggregate number of shares of
such stock taken into account under this
subparagraph for all prior calendar years.
``(B) Applicable percentage.--For purposes of
clause (i), the applicable percentage is, with respect
to any calendar year following the calendar year in
which such stock was received, the percentage
determined in accordance with the following table:
The applicable
``In the case of: percentage is:
The first through tenth such calendar years.. 0 percent
The eleventh such calendar year.............. 10 percent
The twelfth such calendar year............... 20 percent
The thirteenth such calendar year............ 30 percent
The fourteenth such calendar year............ 40 percent
The fifteenth such calendar year............. 50 percent
The sixteenth such calendar year............. 60 percent
The seventeenth such calendar year........... 70 percent
The eighteenth such calendar year............ 80 percent
The nineteenth such calendar year............ 90 percent
Any subsequent calendar year................. 100 percent.
``(c) Employment Taxes.--Amounts excluded from gross income under
subsection (a)(1) shall not be taken into account as wages for purposes
of chapters 21, 22, 23, 23A, and 24.
``(d) Recapture if Stock Disposed During Required Holding Period.--
If an amount is excluded from gross income under subsection (a)(1) with
respect to any stock and the individual disposes of such stock at any
time during the 5-year period beginning on the date that such
individual received such stock--
``(1) the gross income of such individual for the taxable
year which includes the date of such disposition shall be
increased by the amount so excluded, and
``(2) the tax imposed by this chapter for such taxable year
shall be increased by the sum of the amounts of tax which would
have been imposed under subchapters A and B of chapters 21 and
22 if subsection (c) had not applied with respect to such
amount.
For purposes of this title and the Social Security Act, any increase in
tax under paragraph (2) shall be treated as imposed under the provision
of chapter 21 or 22 with respect to which such increase relates.
``(e) Regulations.--The Secretary shall issue such regulations as
may be necessary or appropriate to carry out this section, including
regulations which provide for the application of this section to stock
options.''.
(b) Clerical Amendment.--The table of section for such part is
amended by inserting after the item relating to section 139A the
following new item:
``Sec. 139B. Qualified stock distributions to employees.''.
(c) Effective Date.--The amendments made by this section shall
apply to stock received by employees after December 31, 2008.
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