I 
117TH CONGRESS 
1ST SESSION H. R. 4962 
To amend the Internal Revenue Code of 1986 to provide that the stock 
of certain corporations is eligible for capital gains rates only if such 
corporation maintains a plan for distributing equity to employees, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 6, 2021 
Mr. LARSON of Connecticut (for himself, Mr. PASCRELL, and Mr. SUOZZI) in-
troduced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
that the stock of certain corporations is eligible for cap-
ital gains rates only if such corporation maintains a 
plan for distributing equity to employees, 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 ‘‘Share Holder Alloca-
tion for Rewards to Employees Plan Act’’ or as the 
‘‘SHARE Plan Act’’. 
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SEC. 2. STOCK OF CERTAIN CORPORATIONS ELIGIBLE FOR 
CAPITAL GAINS RATES ONLY IF CORPORA-
TION MAINTAINS PLAN FOR DISTRIBUTING 
EQUITY TO EMPLOYEES. 
(a) IN GENERAL.—Part III of subchapter P of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new section: 
‘‘SEC. 1224. SHARE PLANS. 
‘‘(a) IN GENERAL.—For purposes of section 1222, 
stock of any corporation which is sold or exchanged during 
any calendar year shall not be treated as held for more 
than 1 year (regardless of the holding period of such stock 
determined without regard to this section) unless— 
‘‘(1) such corporation is not a covered employer 
for the preceding calendar year, or 
‘‘(2) such corporation is a SHARE corporation 
for the preceding calendar year. 
‘‘(b) COVERED EMPLOYER.—For purposes of this 
section, the term ‘covered employer’ means, with respect 
to any calendar year— 
‘‘(1) any domestic corporation any class of 
stock of which is regularly traded on an established 
securities market as of the last day of such calendar 
year, and 
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‘‘(2) any other domestic corporation which em-
ployed on average more than 500 eligible employees 
on business days during such calendar year. 
Such term shall not include any S corporation. 
‘‘(c) SHARE CORPORATION.—For purposes of this 
section— 
‘‘(1) IN
GENERAL.—The term ‘SHARE cor-
poration’ means, with respect to any calendar year, 
any corporation which demonstrates to the satisfac-
tion of the Secretary that such corporation (as of 
the close of such calendar year) has— 
‘‘(A) a SHARE ratio of not less than 10 
percent, 
‘‘(B) made distributions of common stock 
of such corporation to employees of such cor-
poration pursuant to a SHARE plan during 
such calendar year which in the aggregate 
equals or exceeds 2 percent of the aggregate 
outstanding shares of common stock of such 
corporation (other than shares held by such cor-
poration), or 
‘‘(C) made distributions of common stock 
of such corporation to employees of such cor-
poration pursuant to a SHARE plan with a fair 
market value (determined as of the date of dis-
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tribution of each such share) which equals or 
exceeds the applicable dollar amount per em-
ployee when aggregated with all such distribu-
tions made during such calendar year and all 
prior calendar years to such employee. 
‘‘(2) APPLICABLE DOLLAR AMOUNT.—The term 
‘applicable dollar amount’ means— 
‘‘(A) in the case of the calendar year pre-
ceding the first calendar year to which sub-
section (a) applies, $50,000, and 
‘‘(B) in the case of any subsequent cal-
endar year, the applicable dollar amount in ef-
fect for the preceding calendar year increased 
by $50,000 (but not in excess of $250,000). 
‘‘(d) SHARE RATIO.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘SHARE ratio’ 
means, with respect to any corporation for any cal-
endar year, the ratio (expressed as a percentage) 
of— 
‘‘(A) the aggregate shares of common 
stock of such corporation which have been 
granted to participating employees of such cor-
poration pursuant to a SHARE plan during 
such calendar year or any prior calendar year, 
divided by 
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‘‘(B) the aggregate outstanding shares of 
common stock of such corporation (other than 
shares held by such corporation). 
‘‘(2) 
TREATMENT
OF
CERTAIN
PRIOR 
GRANTS.—If such corporation demonstrates to the 
satisfaction of the Secretary that, during the 10 
years preceding the date of the enactment of this 
section, such corporation made grants of common 
stock to eligible employees of such corporation which 
were not in exchange for compensation (other than 
service as an employee), such stock shall be taken 
into account under paragraph (1)(A). 
‘‘(3) TREATMENT OF CONVERTIBLE STOCK.—In 
the case of any class of stock of any corporation 
which may be converted to common stock, such 
stock shall be taken into account as common stock 
under paragraphs (1)(B) and (2) on a fully diluted 
basis. 
‘‘(4) EXCLUSION OF INCENTIVE EQUITY.— 
‘‘(A) IN GENERAL.—Incentive equity shall 
not be taken into account under subparagraph 
(A) or (B) of paragraph (1) (including any 
stock which would otherwise be so taken into 
account by reason of paragraph (2) or (3)). 
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