I 

114TH CONGRESS 

1ST SESSION H. R. 3675 

To amend the Higher Education Act of 1965 to ensure that student loans 

are available at interest rates that do not exceed the interest rates 

at which the Federal Government provides loans to banks through the 

discount window operated by the Federal Reserve System, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 1, 2015 

Mr. DESAULNIER (for himself, Mr. TAKANO, Mr. HUFFMAN, Ms. JUDY CHU

of California, Mr. LOWENTHAL, and Ms. SLAUGHTER) introduced the following bill; which was referred to the Committee on Ways and Means, 

and in addition to the Committee on Education and the Workforce, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Higher Education Act of 1965 to ensure 

that student loans are available at interest rates that 

do not exceed the interest rates at which the Federal 

Government provides loans to banks through the discount 

window operated by the Federal Reserve System, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Student Borrower 

3 Fairness Act’’. 

4 SEC. 2. AVAILABILITY OF STUDENT LOANS AT FEDERAL RE5 SERVE BANK DISCOUNT RATE. 

6 (a) AVAILABILITY OF STUDENT LOANS.—Section 

7 455(b) of the Higher Education Act of 1965 (20 U.S.C. 

8 1087e(b)) is amended— 

9 (1) by redesignating paragraphs (9) and (10) 

10 as paragraphs (10) and (11); and 

11 (2) by inserting after paragraph (8) the fol12 lowing new paragraph: 

13 ‘‘(9) SPECIAL RULE FOR NEW LOANS ON OR

14 AFTER JULY 1, 2015.— 

15 ‘‘(A) APPLICATION OF LOWER RATE OF IN16 TEREST.—Notwithstanding the preceding para17 graphs of this subsection, if the rate of interest 

18 determined under subparagraph (B) with re19 spect to any loan for which the first disburse20 ment is made on or after July 1, 2015, is less 

21 than the applicable rate of interest for the loan 

22 under paragraph (8), the applicable rate of in23 terest for the loan shall be the rate determined 

24 under subparagraph (B). 

25 ‘‘(B) DETERMINATION OF RATE.—The 

26 rate of interest determined under this subparaVerDate Sep 11 2014 04:23 Oct 06, 2015 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3675.IH H3675

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1 graph is, with respect to a loan disbursed dur2 ing any 12-month period beginning on July 1 

3 and ending on June 30, the primary credit rate 

4 charged by the Federal Reserve banks on the 

5 preceding June 1 for purposes of sections 13 

6 and 13A of the Federal Reserve Act (12 U.S.C. 

7 342 et seq.). 

8 ‘‘(C) CONSULTATION.—The Secretary shall 

9 determine the rate of interest under subpara10 graph (B) after consultation with the Secretary 

11 of the Treasury and shall publish such rate in 

12 the Federal Register as soon as practicable 

13 after the date of determination. 

14 ‘‘(D) FIXED RATE.—The applicable rate of 

15 interest determined under this paragraph for a 

16 loan shall be fixed for the period of the loan.’’. 

17 (b) BORROWER MODIFICATION OF INTEREST

18 RATES.—Section 455(b) of such Act (20 U.S.C. 

19 1087e(b)), as amended by subsection (a), is further 

20 amended by adding at the end the following new para21 graph: 

22 ‘‘(12) BORROWER MODIFICATION OF INTEREST

23 RATE.— 

24 ‘‘(A) MODIFICATION.—Notwithstanding 

25 the preceding paragraphs of this subsection, the 


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1 borrower of a Federal Direct Stafford Loan, a 

2 Federal Direct Unsubsidized Stafford Loan, a 

3 Federal Direct PLUS Loan, or a Federal Di4 rect Consolidation Loan may elect to modify the 

5 interest rate of the loan to be equal to the in6 terest rate that would be applicable to such loan 

7 if such loan were first disbursed (or in the case 

8 of a Federal Direct Consolidation Loan, first 

9 applied for) on the date on which such borrower 

10 elects to modify the interest rate of such loan. 

11 ‘‘(B) FIXED RATE.—Except as provided in 

12 subparagraph (C), an interest rate elected 

13 under subparagraph (A) for a loan shall be 

14 fixed for the life of the loan. 

15 ‘‘(C) CONTINUING AUTHORITY TO MOD16 IFY.—A borrower may elect to modify the inter17 est rate of a loan in accordance with subpara18 graph (A) at any time during the life of the 

19 loan. 

20 ‘‘(D) CONSTRUCTION.—Nothing in this 

21 paragraph shall be construed to authorize any 

22 refunding of any repayment of a loan.’’. 


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1 SEC. 3. INCOME TAX RATE OF PUBLICLY TRADED COR2 PORATIONS BASED ON COMPENSATION 

3 RATIO. 

4 (a) IN GENERAL.—Section 11 of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following: 

7 ‘‘(e) TAX RATE OF PUBLICLY TRADED CORPORA8 TIONS BASED ON COMPENSATION RATIO.— 

9 ‘‘(1) IN GENERAL.—In the case of a publicly 

10 traded corporation (as defined in section 

11 162(m)(2)), the amount of tax under subsection (b) 

12 shall be determined— 

13 ‘‘(A) by adjusting the highest rate of tax 

14 applicable to the taxpayer by the percentage 

15 point adjustment specified in paragraph (2), 

16 and 

17 ‘‘(B) by making proper adjustments to— 

18 ‘‘(i) the dollar amount in clause (ii) of 

19 the second sentence of paragraph (1), and 

20 ‘‘(ii) the dollar amount in clause (ii) 

21 of the third sentence of paragraph (1). 

22 ‘‘(2) ADJUSTMENT OF TAX RATE.—For pur23 poses of paragraph (1), the percentage points speci24 fied in this paragraph shall be determined as follows: 


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‘‘If the compensation ratio is: The percentage point adjustment is: 

Not more than 25 ................................ ¥1 percentage points 

More than 25 but not more than 50 .... ¥0.5 percentage points 

More than 50 but not more than 100 .. zero 

More than 100 but not more than 150 +0.5 percentage points 

More than 150 but not more than 200 +1 percentage points 

More than 200 but not more than 250 +1.5 percentage points 

More than 250 but not more than 300 +2 percentage points 

More than 300 but not more than 400 +2.5 percentage points 

More than 400 ..................................... +3 percentage points. 

1 ‘‘(3) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) COMPENSATION RATIO.—The com4 pensation ratio for a taxable year means a 

5 ratio— 

6 ‘‘(i) the numerator of which is the 

7 amount equal to the greater of the com8 pensation of the chief operating officer or 

9 the highest paid employee of the taxpayer 

10 for the calendar year preceding the begin11 ning of the taxable year, and 

12 ‘‘(ii) the denominator of which is the 

13 amount equal to the median compensation 

14 of all employees employed by the taxpayer 

15 in the United States for the calendar year 

16 preceding the beginning of the taxable 

17 year. 

18 ‘‘(B) COMPENSATION.— 

19 ‘‘(i) EMPLOYEES.—In the case of em20 ployees of the taxpayer other than the 


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1 chief operating officer or the highest paid 

2 employee, the term ‘compensation’ means 

3 wages (as defined in section 3121(a)) paid 

4 by the taxpayer during a calendar year. 

5 ‘‘(ii) CEO AND HIGHEST PAID EM6 PLOYEE.—In the case of the chief oper7 ating officer and the highest paid employee 

8 of the taxpayer, the term ‘compensation’ 

9 means total compensation for the calendar 

10 year, as reported in the Summary Com11 pensation Table reported to the Securities 

12 and Exchange Commission pursuant to 

13 Item 402 of Regulation S–K of the Securi14 ties and Exchange Commission. 

15 ‘‘(4) SPECIAL RULE IF CONTRACTED OR FOR16 EIGN EMPLOYEE RATIO INCREASES.— 

17 ‘‘(A) IN GENERAL.—If— 

18 ‘‘(i) the total number of full-time em19 ployees, determined on an annual full-time 

20 equivalent basis, employed by the taxpayer 

21 in the United States for a taxable year is 

22 reduced by more than 10 percent, as com23 pared to the total number of full-time em24 ployees, determined on an annual full-time 

25 equivalent basis, employed by the taxpayer 


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1 in the United States for the preceding tax2 able year, and 

3 ‘‘(ii) the total number of contracted 

4 employees or foreign full-time employees, 

5 determined on an annual full-time equiva6 lent basis, of the taxpayer for that taxable 

7 year has increased, as compared with the 

8 total number of contracted employees or 

9 foreign full-time employees, determined on 

10 an annual full-time equivalent basis, of the 

11 taxpayer for the preceding taxable year, 

12 then the applicable tax rate determined under 

13 paragraph (2) shall be increased by 50 percent. 

14 For taxpayers who first commence doing busi15 ness during the taxable year, the number of 

16 full-time employees, contracted employees, and 

17 foreign full-time employees for the immediately 

18 preceding prior taxable year shall be zero. 

19 ‘‘(B) DEFINITIONS.—For purposes of this 

20 paragraph— 

21 ‘‘(i) ANNUAL FULL-TIME EQUIVA22 LENT.—The term ‘annual full-time equiva23 lent’ means— 

24 ‘‘(I) in the case of a full-time em25 ployee paid hourly qualified wages, the 


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1 total number of hours worked for the 

2 taxpayer by the employee, not to ex3 ceed 2,000 hours per employee, di4 vided by 2,000, and 

5 ‘‘(II) in the case of a salaried 

6 full-time employee, the total number 

7 of weeks worked for the taxpayer by 

8 the employee divided by 52. 

9 ‘‘(ii) CONTRACTED FULL-TIME EM10 PLOYEE.—The term ‘contracted full-time 

11 employee’ means an individual engaged by 

12 the taxpayer to provide a specific set of 

13 services established pursuant to the terms 

14 and conditions of a written employment 

15 contract that delineates the length of em16 ployment, the salary and bonuses (if any) 

17 to be paid, and the benefits that accrue to 

18 that individual. 

19 ‘‘(iii) FOREIGN FULL-TIME EM20 PLOYEE.—The term ‘foreign full-time em21 ployee’ means a full-time employee of the 

22 taxpayer that is employed at a location 

23 other than the United States. 


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1 ‘‘(iv) FULL-TIME EMPLOYEE.—The 

2 term ‘full-time employee’ means an em3 ployee of the taxpayer that either— 

4 ‘‘(I) is paid compensation by the 

5 taxpayer for services of not less than 

6 an average of 35 hours per week, or 

7 ‘‘(II) is a salaried employee of 

8 the taxpayer and is paid compensation 

9 during the taxable year for full-time 

10 employment. 

11 ‘‘(5) CONTROLLED GROUPS.—For purposes of 

12 this subsection, all persons treated as a single em13 ployer under subsection (b), (c), (m) or (o) of sec14 tion 414, shall be treated as one person. 

15 ‘‘(6) REPORTS.—The taxpayer shall furnish 

16 such reports to the Secretary with respect to com17 pensation and such other matters as the Secretary 

18 may require. The reports required by this subsection 

19 shall be filed at such time and in such manner as 

20 may be required by the Secretary. 

21 ‘‘(7) REGULATIONS.—The Secretary shall pre22 scribe such regulations and other guidance as may 

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1 mination of wages, average compensation, and com2 pensation ratio.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 subsection (a) shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

Æ 


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