II 

109TH CONGRESS 

1ST SESSION S. 772 

To amend the Internal Revenue Code of 1986 to expand workplace health 

incentives by equalizing the tax consequences of employee athletic facility 

use. 

IN THE SENATE OF THE UNITED STATES 

APRIL 13, 2005 

Mr. CORNYN (for himself and Mr. HARKIN) 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 

workplace health incentives by equalizing the tax consequences of employee athletic facility use.

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 ‘‘Workforce Health Im5 provement Program Act of 2005’’. 

6 SEC. 2. EMPLOYER-PROVIDED OFF-PREMISES HEALTH 

7 CLUB SERVICES. 

8 (a) TREATMENT AS FRINGE BENEFIT.—Subpara9 graph (A) of section 132(j)(4) of the Internal Revenue 
2

•S 772 IS

1 Code of 1986 (relating to on-premises gyms and other ath2 letic facilities) is amended to read as follows: 

3 ‘‘(A) IN GENERAL.—Gross income shall 

4 not include— 

5 ‘‘(i) the value of any on-premises ath6 letic facility provided by an employer to its 

7 employees, and 

8 ‘‘(ii) so much of the fees, dues, or 

9 membership expenses paid by an employer 

10 to an athletic or fitness facility described 

11 in subparagraph (C) on behalf of its em12 ployees as does not exceed $900 per em13 ployee per year.’’. 

14 (b) ATHLETIC FACILITIES DESCRIBED.—Paragraph 

15 (4) of section 132(j) of the Internal Revenue Code of 1986 

16 (relating to special rules) is amended by adding at the end 

17 the following new subparagraph: 

18 ‘‘(C) CERTAIN ATHLETIC OR FITNESS FA19 CILITIES DESCRIBED.—For purposes of sub20 paragraph (A)(ii), an athletic or fitness facility 

21 described in this subparagraph is a facility— 

22 ‘‘(i) which provides instruction in a 

23 program of physical exercise, offers facili24 ties for the preservation, maintenance, en25 couragement, or development of physical 
3

•S 772 IS

1 fitness, or is the site of such a program of 

2 a State or local government, 

3 ‘‘(ii) which is not a private club owned 

4 and operated by its members, 

5 ‘‘(iii) which does not offer golf, hunt6 ing, sailing, or riding facilities, 

7 ‘‘(iv) whose health or fitness facility is 

8 not incidental to its overall function and 

9 purpose, and 

10 ‘‘(v) which is fully compliant with the 

11 State of jurisdiction and Federal anti-dis12 crimination laws.’’. 

13 (c) EXCLUSION APPLIES TO HIGHLY COMPENSATED

14 EMPLOYEES ONLY IF NO DISCRIMINATION.—Section 

15 132(j)(1) of the Internal Revenue Code of 1986 is amend16 ed— 

17 (1) by striking ‘‘Paragraphs (1) and (2) of sub18 section (a)’’ and inserting ‘‘Subsections (a)(1), 

19 (a)(2), and (j)(4)’’, and 

20 (2) by striking the heading thereof through ‘‘(2)

21 APPLY’’ and inserting ‘‘CERTAIN EXCLUSIONS

22 APPLY’’. 

23 (d) EMPLOYER DEDUCTION FOR DUES TO CERTAIN

24 ATHLETIC FACILITIES.— 
4

•S 772 IS

1 (1) IN GENERAL.—Paragraph (3) of section 

2 274(a) of the Internal Revenue Code of 1986 (relat3 ing to denial of deduction for club dues) is amended 

4 by adding at the end the following new sentence: 

5 ‘‘The preceding sentence shall not apply to so much 

6 of the fees, dues, or membership expenses paid to 

7 athletic or fitness facilities (within the meaning of 

8 section 132(j)(4)(C)) as does not exceed $900 per 

9 employee per year.’’. 

10 (2) CONFORMING AMENDMENT.—The last sen11 tence of section 274(e)(4) of such Code is amended 

12 by inserting ‘‘the first sentence of’’ before ‘‘sub13 section (a)(3)’’. 

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

15 this section shall apply to taxable years beginning after 

16 the date of the enactment of this Act.

Æ