I 
118TH CONGRESS 
2D SESSION 
H. R. 8435 
To amend the Internal Revenue Code of 1986 to treat certain price protection 
payments as eligible rollover distributions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 16, 2024 
Mr. KELLY of Pennsylvania (for himself and Mr. BLUMENAUER) 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 treat cer-
tain price protection payments as eligible rollover dis-
tributions, 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. PRICE PROTECTION PAYMENTS TREATED AS 
ELIGIBLE ROLLOVER DISTRIBUTIONS. 
(a) IN GENERAL.—Section 402(c)(4) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘For purposes of’’ and insert-
ing— 
‘‘(A) IN GENERAL.—For purposes of’’, 
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(2) by striking ‘‘If all or any portion’’ and all 
that follows through the period and inserting— 
‘‘(B) SPECIAL RULE FOR 2020.—If all or 
any portion’’, and 
(3) by adding at the end the following new sub-
paragraphs: 
‘‘(C) CERTAIN
PRICE
PROTECTION
PAY-
MENTS TREATED AS ELIGIBLE ROLLOVER DIS-
TRIBUTIONS.— 
‘‘(i) DISTRIBUTIONS PRIOR TO 2025.— 
In the case of a price protection payment 
made after December 12, 2019, with re-
spect to a plan year ending before January 
1, 2025, such payment will be treated as 
an eligible rollover distribution if such pay-
ment is made pursuant to a price protec-
tion agreement which provides a payment 
to a participant (or beneficiary of such 
participant) who separates from service 
with an employer due to retirement, death 
or disability. 
‘‘(ii) DISTRIBUTIONS AFTER 2024.—In 
the case of a price protection payment 
made with respect to a plan year ending 
after December 31, 2024, such payment 
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will be treated as an eligible rollover dis-
tribution if such payment is made pursu-
ant to a price protection agreement 
which— 
‘‘(I) is offered as part of an em-
ployee stock ownership plan, 
‘‘(II) covers any separation of 
service of a plan participant regard-
less of the reason for such separation, 
and 
‘‘(III) pays price protection pay-
ments upon commencement of plan 
distributions 
under 
section 
409(o)(1)(A)(i). 
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) 
PRICE
PROTECTION
AGREE-
MENT.—The term ‘price protection agree-
ment’ means an agreement between an em-
ployer maintaining an employee stock own-
ership plan and the trustee of such plan, 
pursuant to which a participant or bene-
ficiary receives a price protection payment 
for stock distributions from such plan fol-
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lowing an exempt loan taken on by the em-
ployer. 
‘‘(ii) PRICE PROTECTION PAYMENT.— 
The term ‘price protection payment’ means 
an amount paid to a plan participant or 
beneficiary pursuant to a price protection 
agreement if such agreement provides that 
price protection payments will be made— 
‘‘(I) within a specified period of 
time, not to exceed the shorter of 5 
years or the life of an exempt loan, 
following the purchase of employer se-
curities with such loan, and 
‘‘(II) in an amount equal to the 
excess, if any, of— 
‘‘(aa) the fair market value 
of the shares of employer securi-
ties at the time of the distribu-
tion determined without regard 
to such exempt loan, over 
‘‘(bb) the fair market value 
of the employer securities at the 
time of distribution. 
‘‘(iii) EMPLOYEE STOCK OWNERSHIP 
PLAN.—The term ‘employee stock owner-
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ship plan’ has the meaning given such 
term in section 4975(e)(7). 
‘‘(iv) EXEMPT LOAN.—The term ‘ex-
empt loan’ means a loan described in sec-
tion 4975(d)(3).’’. 
(b) PRICE PROTECTION AGREEMENTS NOT CONSID-
ERED DISCRIMINATORY.—Section 401(a)(5) of such Code 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(H) PRICE PROTECTION AGREEMENTS.— 
A plan shall not be considered discriminatory 
within the meaning of paragraph (4) merely be-
cause the plan is subject to a price protection 
agreement 
(as 
defined 
in 
section 
402(c)(4)(D)(ii)) which favors highly com-
pensated employees.’’. 
(c) PRICE PROTECTION PAYMENTS NOT TAKEN 
INTO ACCOUNT FOR PURPOSES OF DEDUCTION LIMITS.— 
Section 404 of such Code is amended by adding at the 
end the following new subsection: 
‘‘(p) PRICE PROTECTION PAYMENTS NOT TAKEN 
INTO ACCOUNT FOR PURPOSES OF DEDUCTION LIMITS.— 
Price protection payments (as defined in section 
402(c)(4)(D)(i)) shall not be subject to any limitation con-
tained in subsection (a)(3).’’. 
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(d) EFFECTIVE DATES.— 
(1) The amendments made by subsection (a) 
shall apply to amounts paid after December 12, 
2019. 
(2) The amendments made by subsections (b) 
and (c) shall apply to amounts paid in plan years 
ending after December 31, 2024. 
Æ 
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