I 
111TH CONGRESS 
1ST SESSION H. R. 3153 
To amend the Internal Revenue Code of 1986 to impose a tax on over- 
the-counter derivatives transactions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 9, 2009 
Mr. LARSON of Connecticut 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 impose 
a tax on over-the-counter derivatives transactions, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Transparent Markets 
Act of 2009’’. 
SEC. 2. OVER-THE-COUNTER DERIVATIVES TRANSACTION 
TAX. 
(a) IN GENERAL.—Chapter 36 of the Internal Rev-
enue Code of 1986 is amended by inserting after sub-
chapter B the following new subchapter: 
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‘‘Subchapter C—Tax on Over-the-Counter 
Derivatives 
‘‘Sec. 4475. Tax on over-the-counter derivatives. 
‘‘SEC. 4475. TAX ON OVER-THE-COUNTER DERIVATIVES. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
a tax on each covered derivative transaction. 
‘‘(b) RATE OF TAX.—The rate of such tax shall be 
equal to 0.25 percent of the fair market value of the un-
derlying property with respect to, or the notional principal 
amount of, the derivative financial instrument involved in 
such transaction. 
‘‘(c) BY WHOM PAID.—All parties to a covered deriv-
ative transaction shall be jointly and severally liable for 
the tax imposed on such transaction by this section. 
‘‘(d) COVERED DERIVATIVES TRANSACTION.—For 
purposes of this section, the term ‘covered derivative 
transaction’ means becoming a party to a derivative finan-
cial instrument which is not traded on (or subject to the 
rules of) a qualified board or exchange (as defined in sec-
tion 1256(g)(7), determined without regard to subpara-
graph (C) thereof). 
‘‘(e) DERIVATIVE FINANCIAL INSTRUMENT.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘derivative finan-
cial instrument’ means any option, forward contract, 
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short position, notional principal contract, credit de-
fault swap, or similar financial instrument in any— 
‘‘(A) share of stock in a corporation, 
‘‘(B) partnership or beneficial ownership 
interest in a widely held or publicly traded part-
nership or trust, 
‘‘(C) note, bond, debenture, or other evi-
dence of indebtedness, 
‘‘(D) commodity which is actively traded 
(within the meaning of section 1092(d)(1)), 
‘‘(E) any foreign currency, or 
‘‘(F) any specified index. 
‘‘(2) SPECIFIED
INDEX.—The term ‘specified 
index’ means any one or more or any combination 
of— 
‘‘(A) a fixed rate, price, or amount, or 
‘‘(B) a variable rate, price, or amount 
which is based on any current, objectively deter-
minable information which is not within the control 
of any of the parties to the contract or instrument 
and is not unique to any of the parties’ cir-
cumstances. 
‘‘(f) METHOD OF COLLECTION.— 
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‘‘(1) IN GENERAL.—The tax imposed by sub-
section (a) shall be collected on the basis of an an-
nual return. 
‘‘(2) CONTENT OF RETURN.—Such return shall 
include the following information: 
‘‘(A) A description of the derivative finan-
cial instrument involved in such transaction. 
‘‘(B) The parties to the covered derivatives 
transaction (and each such party’s tax resi-
dence). 
‘‘(C) The fair market value of the under-
lying property with respect to, or the notional 
principal amount of, the derivative financial in-
strument involved in such transaction. 
‘‘(D) A description of any underlying asset 
or specified index with respect to such trans-
action, including a description of how each 
party to such transaction characterizes any 
such asset for tax purposes. 
‘‘(E) A description of any provision for 
physical settlement of such transaction. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary or appropriate to 
carry out the purposes of this section, including the fol-
lowing: 
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‘‘(1) Prescribing the time for filing the annual 
return of tax imposed under subsection (a) and the 
time for payment of such tax. 
‘‘(2) Excluding or including certain transactions 
from such tax as may be consistent with the pur-
poses of this section. 
‘‘(3) Guidance for determining such tax if the 
fair market value or notional principal amount is un-
clear on the face of the instrument.’’. 
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 36 of such Code is amended by in-
serting after the item relating to subchapter B the fol-
lowing new item: 
‘‘SUBCHAPTER C. TAX ON OVER-THE-COUNTER DERIVATIVES’’. 
(c) REPORT.— 
(1) IN
GENERAL.—Not later than 180 days 
after the first deadline established by the Secretary 
of the Treasury for filing a return of the tax im-
posed under section 4475 of the Internal Revenue 
Code of 1986, and each deadline for filing such re-
turn thereafter, the Secretary shall submit a report 
to Congress. 
(2) CONTENT.—Such report shall include— 
(A) a description and a statistical analysis 
of the information included on the returns of 
such tax for the previous filing period, and 
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(B) a detailed analysis of the scope and 
nature of over-the-counter derivatives markets 
and the feasibility and advisability of regulating 
such markets. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions entered into on or 
after the date of the enactment of this Act. 
Æ 
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