II 

115TH CONGRESS 

1ST SESSION S. 82 

To amend the Internal Revenue Code of 1986 to expand the denial of 

deduction for certain excessive employee remuneration, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 10, 2017 

Mr. REED (for himself and Mr. BLUMENTHAL) 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 employee 

remuneration, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Subsidizing Mul5 timillion Dollar Corporate Bonuses Act’’. 

6 SEC. 2. EXPANSION OF DENIAL OF DEDUCTION FOR CER7 TAIN EXCESSIVE EMPLOYEE REMUNERA8 TION. 

9 (a) APPLICATION TO ALL CURRENT AND FORMER

10 EMPLOYEES.— 


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1 (1) IN GENERAL.—Section 162(m) of the Inter2 nal Revenue Code of 1986 is amended— 

3 (A) by striking ‘‘covered employee’’ each 

4 place it appears in paragraphs (1) and (4) and 

5 inserting ‘‘covered individual’’, and 

6 (B) by striking ‘‘such employee’’ each 

7 place it appears in subparagraphs (A) and (G) 

8 of paragraph (4) and inserting ‘‘such indi9 vidual’’. 

10 (2) COVERED INDIVIDUAL.—Paragraph (3) of 

11 section 162(m) of such Code is amended to read as 

12 follows: 

13 ‘‘(3) COVERED INDIVIDUAL.—For purposes of 

14 this subsection, the term ‘covered individual’ means 

15 any individual who is an officer, director, or em16 ployee of the taxpayer or a former officer, director, 

17 or employee of the taxpayer.’’. 

18 (3) CONFORMING AMENDMENTS.— 

19 (A) Section 48D(b)(3)(A) of such Code is 

20 amended by inserting ‘‘(as in effect for taxable 

21 years beginning before January 1, 2018)’’ after 

22 ‘‘section 162(m)(3)’’. 

23 (B) Section 409A(b)(3)(D)(ii) of such 

24 Code is amended by inserting ‘‘(as in effect for 


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1 taxable years beginning before January 1, 

2 2018)’’ after ‘‘section 162(m)(3)’’. 

3 (b) EXPANSION OF APPLICABLE EMPLOYEE REMU4 NERATION.— 

5 (1) ELIMINATION OF EXCEPTION FOR COMMIS6 SION-BASED PAY.— 

7 (A) IN GENERAL.—Paragraph (4) of sec8 tion 162(m) of such Code, as amended by sub9 section (a), is amended by striking subpara10 graph (B) and by redesignating subparagraphs 

11 (C) through (G) as subparagraphs (B) through 

12 (F), respectively. 

13 (B) CONFORMING AMENDMENTS.— 

14 (i) Section 162(m)(5) of such Code is 

15 amended— 

16 (I) by striking ‘‘subparagraphs 

17 (B), (C), and (D) thereof’’ in sub18 paragraph (E) and inserting ‘‘sub19 paragraphs (B) and (C) thereof’’, and 

20 (II) by striking ‘‘subparagraphs 

21 (F) and (G)’’ in subparagraph (G) 

22 and inserting ‘‘subparagraphs (E) and 

23 (F)’’. 

24 (ii) Section 162(m)(6) of such Code is 

25 amended— 


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1 (I) by striking ‘‘subparagraphs 

2 (B), (C), and (D) thereof’’ in sub3 paragraph (D) and inserting ‘‘sub4 paragraphs (B) and (C) thereof’’, and 

5 (II) by striking ‘‘subparagraphs 

6 (F) and (G)’’ in subparagraph (G) 

7 and inserting ‘‘subparagraphs (E) and 

8 (F)’’. 

9 (2) INCLUSION OF PERFORMANCE-BASED COM10 PENSATION.— 

11 (A) IN GENERAL.—Paragraph (4) of sec12 tion 162(m) of the Internal Revenue Code of 

13 1986, as amended by subsection (a) and para14 graph (1) of this subsection, is amended by 

15 striking subparagraph (B) and redesignating 

16 subparagraphs (C) through (F) as subpara17 graphs (B) through (E), respectively. 

18 (B) CONFORMING AMENDMENTS.— 

19 (i) Section 162(m)(5) of such Code, 

20 as amended by paragraph (1), is amend21 ed— 

22 (I) by striking ‘‘subparagraphs 

23 (B) and (C) thereof’’ in subparagraph 

24 (E) and inserting ‘‘subparagraph (B) 

25 thereof’’, and 


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1 (II) by striking ‘‘subparagraphs 

2 (E) and (F)’’ in subparagraph (G) 

3 and inserting ‘‘subparagraphs (D) and 

4 (E)’’. 

5 (ii) Section 162(m)(6) of such Code, 

6 as amended by paragraph (1), is amend7 ed— 

8 (I) by striking ‘‘subparagraphs 

9 (B) and (C) thereof’’ in subparagraph 

10 (D) and inserting ‘‘subparagraph (B) 

11 thereof’’, and 

12 (II) by striking ‘‘subparagraphs 

13 (E) and (F)’’ in subparagraph (G) 

14 and inserting ‘‘subparagraphs (D) and 

15 (E)’’. 

16 (c) EXPANSION OF APPLICABLE EMPLOYER.—Para17 graph (2) of section 162(m) of the Internal Revenue Code 

18 of 1986 is amended to read as follows: 

19 ‘‘(2) PUBLICLY HELD CORPORATION.—For pur20 poses of this subsection, the term ‘publicly held cor21 poration’ means any corporation which is an issuer 

22 (as defined in section 3 of the Securities Exchange 

23 Act of 1934 (15 U.S.C. 78c))— 


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1 ‘‘(A) the securities of which are registered 

2 under section 12 of such Act (15 U.S.C. 78l), 

3 or 

4 ‘‘(B) that is required to file reports under 

5 section 15(d) of such Act (15 U.S.C. 780(d)).’’. 

6 (d) REGULATORY AUTHORITY.— 

7 (1) IN GENERAL.—Section 162(m) of the Inter8 nal Revenue Code of 1986 is amended by adding at 

9 the end the following new paragraph: 

10 ‘‘(7) REGULATIONS.—The Secretary may pre11 scribe such guidance, rules, or regulations, including 

12 with respect to reporting, as are necessary to carry 

13 out the purposes of this subsection.’’. 

14 (2) CONFORMING AMENDMENT.—Paragraph (6) 

15 of section 162(m) of such Code is amended by strik16 ing subparagraph (H). 

17 (e) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2017. 

Æ 


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