To amend the Internal Revenue Code of 1986 to impose a 70 percent tax on certain compensation received from certain companies receiving Federal bailout funds.

Summary: Amends the Internal Revenue Code to impose a 70% tax on compensation in excess of $1 million received by an employee from an employer who has received, in the aggregate, economic assistance of more than $500 million under the Troubled Asset Relief Program (TARP) of the Emergency Economic Stabilization Act of 2008 or the Housing and Economic Recovery Act of 2008. Exempts employees who return such compensation to their employer or who receive such compensation as a commissioned sales person.

SECTION 1. TAX ON CERTAIN COMPENSATION RECEIVED FROM CERTAIN COMPANIES 
              RECEIVING BAILOUT FUNDS.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new part:

   ``PART VIII--CERTAIN COMPENSATION RECEIVED FROM CERTAIN COMPANIES 
                        RECEIVING BAILOUT FUNDS

``Sec. 59C. Certain compensation received from certain companies 
                            receiving bailout funds.

``SEC. 59C. CERTAIN COMPENSATION RECEIVED FROM CERTAIN COMPANIES 
              RECEIVING BAILOUT FUNDS.

    ``(a) In General.--In the case of any employee (or former employee) 
of a bailout recipient, there is hereby imposed (in addition to any 
other tax imposed by this subtitle) a tax equal to 70 percent of the 
amount of excess compensation received by the taxpayer during the 
taxable year from any relevant employer.
    ``(b) Excess Compensation.--For purposes of this section--
            ``(1) In general.--The term `excess compensation' means the 
        value of all property paid or transferred to the employee 
        during the taxable year (including any loan that is not 
        reasonably secured) which is in excess of $1,000,000.
            ``(2) Exceptions.--Such term shall not include any of the 
        following:
                    ``(A) Any amount returned by the employee to the 
                employer within 60 days of receipt thereof or within 60 
                days of the enactment of this Act, whichever is later. 
                Any amount returned under this subparagraph shall also 
                be excluded from the definition of gross income.
                    ``(B) To the extent explicitly allowed by any 
                regulation adopted by the Secretary, shares of common 
                stock of the employer (or any affiliate thereof) but 
                only if the employee is required to hold such shares 
                until the date on which the employer ceases to be a 
                relevant employer.
                    ``(C) Any amount received before the employer 
                became a relevant employer or after the employer ceases 
                to be a relevant employer, whether or not for services 
                provided during the period when the employer was 
                classified as a relevant employer, but this provision 
                shall not apply if the payment is made out of assets 
                which were held in trusts, or otherwise made 
                unavailable to the claims of general creditors.
                    ``(D) Any commission received by a commissioned 
                sales person. For purposes of this subparagraph, a 
                commission is an amount of compensation payable 
                determinable solely by reference to the products sold 
                by the commissioned sales person through direct 
                interaction with purchasers. For purposes of this 
                subparagraph, a commissioned sales person is a person 
                who receives commissions, who spends the majority of 
                their work time selling products directly to 
                purchasers, and who is not one of the persons defined 
                in Rule 16a1-(f) promulgated under the Securities 
                Exchange Act of 1934.
            ``(3) Special rules for certain trusts.--In the event that 
        a relevant employer puts funds for the benefit of an employee, 
        or a class of employees, in a trust fund (other than a 
        qualified deferred compensation plan) or other device, which 
        fund is exempt from the claims of the relevant employer's 
        general creditors, it shall be deemed paid to the employees for 
        whom it is being held.
    ``(c) Relevant Employer.--For purposes of this section, the term 
`relevant employer' means any entity (including any subsidiary or 
affiliate of such entity) that has received, in the aggregate, more 
than $500,000,000 pursuant to title I of the Emergency Economic 
Stabilization Act of 2008 or pursuant to section 1117 of the Housing 
and Economic Recovery Act of 2008, regardless of whether such funds are 
received in return for any class of securities of the employer or any 
other asset. An employer ceases to be a relevant employer when it has 
fully repaid to the Federal Government all such funds.
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section.''.
    (b) Clerical Amendment.--The table of parts for subchapter A of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

   ``Part VIII--Certain Compensation Received From Certain Companies 
                       Receiving Bailout Funds''.

    (c) Effective Date.--The amendments made by this section shall 
apply to compensation received after December 31, 2007, in taxable 
years ending after such date.