I 

118TH CONGRESS 

2D SESSION H. R. 8435 

To amend the Internal Revenue Code of 1986 to treat certain price protection 

payments as eligible rollover distributions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 16, 2024 

Mr. KELLY of Pennsylvania (for himself and Mr. BLUMENAUER) introduced 

the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to treat certain price protection payments as eligible rollover distributions, 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. PRICE PROTECTION PAYMENTS TREATED AS 

4 ELIGIBLE ROLLOVER DISTRIBUTIONS. 

5 (a) IN GENERAL.—Section 402(c)(4) of the Internal 

6 Revenue Code of 1986 is amended— 

7 (1) by striking ‘‘For purposes of’’ and insert8 ing— 

9 ‘‘(A) IN GENERAL.—For purposes of’’, 


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1 (2) by striking ‘‘If all or any portion’’ and all 

2 that follows through the period and inserting— 

3 ‘‘(B) SPECIAL RULE FOR 2020.—If all or 

4 any portion’’, and 

5 (3) by adding at the end the following new sub6 paragraphs: 

7 ‘‘(C) CERTAIN PRICE PROTECTION PAY8 MENTS TREATED AS ELIGIBLE ROLLOVER DIS9 TRIBUTIONS.— 

10 ‘‘(i) DISTRIBUTIONS PRIOR TO 2025.— 

11 In the case of a price protection payment 

12 made after December 12, 2019, with re13 spect to a plan year ending before January 

14 1, 2025, such payment will be treated as 

15 an eligible rollover distribution if such pay16 ment is made pursuant to a price protec17 tion agreement which provides a payment 

18 to a participant (or beneficiary of such 

19 participant) who separates from service 

20 with an employer due to retirement, death 

21 or disability. 

22 ‘‘(ii) DISTRIBUTIONS AFTER 2024.—In 

23 the case of a price protection payment 

24 made with respect to a plan year ending 

25 after December 31, 2024, such payment 


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1 will be treated as an eligible rollover dis2 tribution if such payment is made pursu3 ant to a price protection agreement 

4 which— 

5 ‘‘(I) is offered as part of an em6 ployee stock ownership plan, 

7 ‘‘(II) covers any separation of 

8 service of a plan participant regard9 less of the reason for such separation, 

10 and 

11 ‘‘(III) pays price protection pay12 ments upon commencement of plan 

13 distributions under section 

14 409(o)(1)(A)(i). 

15 ‘‘(D) DEFINITIONS.—For purposes of this 

16 paragraph— 

17 ‘‘(i) PRICE PROTECTION AGREE18 MENT.—The term ‘price protection agree19 ment’ means an agreement between an em20 ployer maintaining an employee stock own21 ership plan and the trustee of such plan, 

22 pursuant to which a participant or bene23 ficiary receives a price protection payment 

24 for stock distributions from such plan folVerDate Sep 11 2014 17:58 Jun 22, 2024 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8435.IH H8435

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1 lowing an exempt loan taken on by the em2 ployer. 

3 ‘‘(ii) PRICE PROTECTION PAYMENT.— 

4 The term ‘price protection payment’ means 

5 an amount paid to a plan participant or 

6 beneficiary pursuant to a price protection 

7 agreement if such agreement provides that 

8 price protection payments will be made— 

9 ‘‘(I) within a specified period of 

10 time, not to exceed the shorter of 5 

11 years or the life of an exempt loan, 

12 following the purchase of employer se13 curities with such loan, and 

14 ‘‘(II) in an amount equal to the 

15 excess, if any, of— 

16 ‘‘(aa) the fair market value 

17 of the shares of employer securi18 ties at the time of the distribu19 tion determined without regard 

20 to such exempt loan, over 

21 ‘‘(bb) the fair market value 

22 of the employer securities at the 

23 time of distribution. 

24 ‘‘(iii) EMPLOYEE STOCK OWNERSHIP

25 PLAN.—The term ‘employee stock ownerVerDate Sep 11 2014 17:58 Jun 22, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8435.IH H8435

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1 ship plan’ has the meaning given such 

2 term in section 4975(e)(7). 

3 ‘‘(iv) EXEMPT LOAN.—The term ‘ex4 empt loan’ means a loan described in sec5 tion 4975(d)(3).’’. 

6 (b) PRICE PROTECTION AGREEMENTS NOT CONSID7 ERED DISCRIMINATORY.—Section 401(a)(5) of such Code 

8 is amended by adding at the end the following new sub9 paragraph: 

10 ‘‘(H) PRICE PROTECTION AGREEMENTS.— 

11 A plan shall not be considered discriminatory 

12 within the meaning of paragraph (4) merely be13 cause the plan is subject to a price protection 

14 agreement (as defined in section 

15 402(c)(4)(D)(ii)) which favors highly com16 pensated employees.’’. 

17 (c) PRICE PROTECTION PAYMENTS NOT TAKEN

18 INTO ACCOUNT FOR PURPOSES OF DEDUCTION LIMITS.— 

19 Section 404 of such Code is amended by adding at the 

20 end the following new subsection: 

21 ‘‘(p) PRICE PROTECTION PAYMENTS NOT TAKEN

22 INTO ACCOUNT FOR PURPOSES OF DEDUCTION LIMITS.— 

23 Price protection payments (as defined in section 

24 402(c)(4)(D)(i)) shall not be subject to any limitation con25 tained in subsection (a)(3).’’. 


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1 (d) EFFECTIVE DATES.— 

2 (1) The amendments made by subsection (a) 

3 shall apply to amounts paid after December 12, 

4 2019. 

5 (2) The amendments made by subsections (b) 

6 and (c) shall apply to amounts paid in plan years 

7 ending after December 31, 2024. 

Æ 


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