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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6323 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 6323

 To exempt gain from the sale of certain C corporation stock from the 
 capital gains rate increase resulting from the sunset of the Jobs and 
             Growth Tax Relief Reconciliation Act of 2003.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2010

 Mr. Crowley introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
 To exempt gain from the sale of certain C corporation stock from the 
 capital gains rate increase resulting from the sunset of the Jobs and 
             Growth Tax Relief Reconciliation Act of 2003.

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

SECTION 1. EXEMPTION FROM CAPITAL GAINS RATE INCREASE FOR QUALIFIED 
              GAIN FROM SALE OR EXCHANGE OF QUALIFIED CORPORATE STOCK.

    (a) In General.--Any increase in capital gains rates resulting from 
section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 
2003 shall not apply to any qualified gain from the sale or exchange of 
qualified corporate stock held by the taxpayer for more than 5 years.
    (b) Qualified Corporate Stock.--For purposes of this section, the 
term ``qualified corporate stock'' means any stock in a C corporation 
(as defined in section 1361(a)(2) of the Internal Revenue Code of 
1986), if--
            (1) as of the date of sale and during substantially all of 
        the taxpayer's holding period for such stock, such corporation 
        has a principal place of business in the United States and 
        meets the active business requirements of section 1202(e) of 
        such Code,
            (2) for at least two years preceding the date of sale, such 
        corporation has paid for at least 60 percent of each full time 
        employee's health insurance coverage, and
            (3) for at least two years preceding the date of sale, such 
        corporation has contributed to a defined contribution plan in a 
        manner that meets the safe harbor non-discrimination 
        requirements under section 401(k)(12) of such Code.
    (c) Qualified Gain.--For purposes of this section, the term 
``qualified gain'' means any gain from the sale of stock constituting 
more than 50 percent of the total voting power of all classes entitled 
to vote and more than 50 percent of the total value of stock of such 
corporation, if--
            (1) during the applicable period, an amount equal to at 
        least 5 percent of the sales proceeds is transferred to or for 
        the benefit of eligible employees of the corporation, and
            (2) without taking into account the amount transferred 
        under paragraph (1), the aggregate amount paid as compensation 
        and benefits to eligible employees of the corporation during 
        each year of the applicable period is at least equal to the 
        base amount.
    (d) Definitions.--For purposes of this section--
            (1) Eligible employee.--The term ``eligible employee'' 
        means any full-time employee, other than an employee who, any 
        time during the 2-year period preceding the date of sale, is--
                    (A) a key employee within the meaning of section 
                416(i) of such Code,
                    (B) an employee whose annual W-2 wages exceed 
                $250,000, or,
                    (C) an employee whose principal place of employment 
                is outside the United States.
            (2) Applicable period.--The term ``applicable period'' 
        means the calendar year in which the sale of the qualified 
        corporate stock occurs and the immediately preceding calendar 
        year.
            (3) Base amount.--The term ``base amount'' means an amount 
        equal to--
                    (A) the average annual total compensation and 
                benefits paid to eligible employees of the corporation 
                during the three calendar year period immediately 
                preceding the applicable period, multiplied by
                    (B) the cost of living adjustment for the first 
                year of the applicable period.
    (e) Regulations.--The Secretary of the Treasury shall prescribe 
such regulations as may be necessary or appropriate to carry out the 
purposes of this paragraph.
    (f) Effective Date.--This section shall apply to gain from the sale 
of stock in taxable years beginning after the date of the enactment of 
this Act and before the date that is 5 years after the date of such 
enactment.
                                 <all>
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