DEPOSIT Act

Subjects: Taxation

Summary:  <p> <strong>Deliver Executive Profits On Seized Institutions to Taxpayers Act or the DEPOSIT Act</strong></p> <p>This bill imposes an increased tax rate on bonuses paid after March 1, 2023, and profits from sales of bank stock received by highly-paid bank executives employed by failing banks that were closed and for which the Federal Deposit Insurance Corporation has been appointed conservator or receiver. The bill expresses the sense of the Senate that revenues from such increased taxes be returned to the Deposit Insurance Fund of the Federal Deposit Insurance Corporation.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 800 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 800

 To amend the Internal Revenue Code of 1986 to impose a higher rate of 
 tax on bonuses and profits from sales of stock received by executives 
 employed by failing banks that were closed and for which the Federal 
  Deposit Insurance Corporation has been appointed as conservator or 
                               receiver.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 14, 2023

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 impose a higher rate of 
 tax on bonuses and profits from sales of stock received by executives 
 employed by failing banks that were closed and for which the Federal 
  Deposit Insurance Corporation has been appointed as conservator or 
                               receiver.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Deliver Executive Profits On Seized 
Institutions to Taxpayers Act'' or the ``DEPOSIT Act''.

SEC. 2. SENSE OF THE SENATE.

    It is the sense of the Senate that the revenue raised from the tax 
imposed under subsection (k) of section 1 of the Internal Revenue Code 
of 1986 (as added by section 3) will be returned to the Deposit 
Insurance Fund (as defined in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813)).

SEC. 3. HIGHER RATE OF TAX ON BONUSES AND STOCK PROFITS RECEIVED BY 
              CERTAIN BANK EXECUTIVES.

    (a) In General.--Section 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subsection:
    ``(k) Rate of Tax on Profits Received by Certain Bank Executives.--
            ``(1) In general.--In the case of any applicable individual 
        who receives any excluded profits during the taxable year, the 
        tax imposed by this section shall be equal to--
                    ``(A) the tax which would be imposed by this 
                section if the taxable income of such individual for 
                the taxable year were reduced (but not below zero) by 
                the amount of the excluded profits received by such 
                individual during such taxable year, plus
                    ``(B) 90 percent of the excluded profits described 
                in subclause (I) of paragraph (2)(B)(i) which were 
                received by such individual during such taxable year, 
                plus
                    ``(C) 100 percent of the excluded profits described 
                in subclause (II) of such paragraph which were received 
                by such individual during such taxable year.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Applicable individual.--The term `applicable 
                individual' means any individual--
                            ``(i) who--
                                    ``(I) was employed by an insured 
                                depository institution for which the 
                                Federal Deposit Insurance Corporation 
                                has been appointed conservator or 
                                receiver, and
                                    ``(II) served as an executive 
                                officer for such institution prior to 
                                such conservatorship or receivership, 
                                and
                            ``(ii) with respect to the taxable year in 
                        which the excluded profits were received, whose 
                        adjusted gross income (reduced by the amount of 
                        such excluded profits) for such taxable year 
                        was greater than $250,000.
                    ``(B) Excluded profits.--
                            ``(i) In general.--The term `excluded 
                        profits' means, with respect to any applicable 
                        individual for any taxable year--
                                    ``(I) any payment in the nature of 
                                a bonus which is paid--
                                            ``(aa) after March 1, 2023, 
                                        and
                                            ``(bb) by any insured 
                                        depository institution within 
                                        the 60-day period prior to the 
                                        date on which the Federal 
                                        Deposit Insurance Corporation 
                                        was appointed conservator or 
                                        receiver for such institution, 
                                        or
                                    ``(II) any profit made by such 
                                applicable individual from the sale of 
                                any security of the insured depository 
                                institution that employs such 
                                applicable individual, if that sale 
                                occurs not more than 60 days before the 
                                date on which the Federal Deposit 
                                Insurance Corporation is appointed 
                                conservator or receiver with respect to 
                                the insured depository institution.
                            ``(ii) Controlled groups.--
                                    ``(I) In general.--For purposes of 
                                clause (i), all persons treated as a 
                                single employer under subsection (a) or 
                                (b) of section 52 or under subsection 
                                (m) or (o) of section 414 shall be 
                                treated as one person.
                                    ``(II) Inclusion of foreign 
                                corporations.--For purposes of 
                                subclause (I), in applying subsections 
                                (a) and (b) of section 52 to this 
                                section, section 1563 shall be applied 
                                without regard to subsection (b)(2)(C) 
                                thereof.
                    ``(C) Executive officer.--The term `executive 
                officer' means, with respect to any insured depository 
                institution, its president, any vice president of such 
                institution in charge of a principal business unit, 
                division or function (such as sales, administration or 
                finance), any other officer who performs a policy 
                making function or any other person who performs 
                similar policy making functions for such institution. 
                Executive officers of subsidiaries may be deemed 
                executive officers of such institution if they perform 
                such policy making functions for such institution.
                    ``(D) Insured depository institution.--The term 
                `insured depository institution' has the same meaning 
                given such term under section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after the date of the enactment of this Act.
                                 &lt;all&gt;
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