I 
113TH CONGRESS 
2D SESSION 
H. R. 3970 
To amend the Internal Revenue Code of 1986 to expand the denial of 
deduction for certain excessive employee remuneration, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 29, 2014 
Mr. DOGGETT 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 expand 
the denial of deduction for certain excessive employee 
remuneration, 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 ‘‘Stop Subsidizing Mul-
timillion Dollar Corporate Bonuses Act’’. 
SEC. 2. EXPANSION OF DENIAL OF DEDUCTION FOR CER-
TAIN 
EXCESSIVE 
EMPLOYEE 
REMUNERA-
TION. 
(a) APPLICATION TO ALL CURRENT AND FORMER 
EMPLOYEES.— 
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(1) IN GENERAL.—Section 162(m) of the Inter-
nal Revenue Code of 1986 is amended— 
(A) by striking ‘‘covered employee’’ each 
place it appears in paragraphs (1) and (4) and 
inserting ‘‘covered individual’’, and 
(B) by striking ‘‘such employee’’ each 
place it appears in subparagraphs (A) and (G) 
of paragraph (4) and inserting ‘‘such indi-
vidual’’. 
(2) COVERED INDIVIDUAL.—Paragraph (3) of 
section 162(m) of such Code is amended to read as 
follows: 
‘‘(3) COVERED INDIVIDUAL.—For purposes of 
this subsection, the term ‘covered individual’ means 
any individual who is an officer, director, or em-
ployee of the taxpayer or a former officer, director, 
or employee of the taxpayer.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Section 48D(b)(3)(A) of such Code is 
amended by inserting ‘‘(as in effect for taxable 
years beginning before January 1, 2014)’’ after 
‘‘section 162(m)(3)’’. 
(B) Section 409A(b)(3)(D)(ii) of such 
Code is amended by inserting ‘‘(as in effect for 
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taxable years beginning before January 1, 
2014)’’ after ‘‘section 162(m)(3)’’. 
(b) EXPANSION OF APPLICABLE EMPLOYEE REMU-
NERATION.— 
(1) ELIMINATION OF EXCEPTION FOR COMMIS-
SION-BASED PAY.— 
(A) IN GENERAL.—Paragraph (4) of sec-
tion 162(m) of such Code, as amended by sub-
section (a), is amended by striking subpara-
graph (B) and by redesignating subparagraphs 
(C) through (G) as subparagraphs (B) through 
(F), respectively. 
(B) CONFORMING AMENDMENTS.— 
(i) Section 162(m)(5) of such Code is 
amended— 
(I) by striking ‘‘subparagraphs 
(B), (C), and (D) thereof’’ in sub-
paragraph (E) and inserting ‘‘sub-
paragraphs (B) and (C) thereof’’, and 
(II) by striking ‘‘subparagraphs 
(F) and (G)’’ in subparagraph (G) 
and inserting ‘‘subparagraphs (E) and 
(F)’’. 
(ii) Section 162(m)(6) of such Code is 
amended— 
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(I) by striking ‘‘subparagraphs 
(B), (C), and (D) thereof’’ in sub-
paragraph (D) and inserting ‘‘sub-
paragraphs (B) and (C) thereof’’, and 
(II) by striking ‘‘subparagraphs 
(F) and (G)’’ in subparagraph (G) 
and inserting ‘‘subparagraphs (E) and 
(F)’’. 
(2) INCLUSION OF PERFORMANCE-BASED COM-
PENSATION.— 
(A) IN GENERAL.—Paragraph (4) of sec-
tion 162(m) of the Internal Revenue Code of 
1986, as amended by subsection (a) and para-
graph (1) of this subsection, is amended by 
striking subparagraph (B) and redesignating 
subparagraphs (C) through (F) as subpara-
graphs (B) through (E), respectively. 
(B) CONFORMING AMENDMENTS.— 
(i) Section 162(m)(5) of such Code, 
as amended by paragraph (1), is amend-
ed— 
(I) by striking ‘‘subparagraphs 
(B) and (C) thereof’’ in subparagraph 
(E) and inserting ‘‘subparagraph (B) 
thereof’’, and 
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(II) by striking ‘‘subparagraphs 
(E) and (F)’’ in subparagraph (G) 
and inserting ‘‘subparagraphs (D) and 
(E)’’. 
(ii) Section 162(m)(6) of such Code, 
as amended by paragraph (1), is amend-
ed— 
(I) by striking ‘‘subparagraphs 
(B) and (C) thereof’’ in subparagraph 
(D) and inserting ‘‘subparagraph (B) 
thereof’’, and 
(II) by striking ‘‘subparagraphs 
(E) and (F)’’ in subparagraph (G) 
and inserting ‘‘subparagraphs (D) and 
(E)’’. 
(c) EXPANSION OF APPLICABLE EMPLOYER.—Para-
graph (2) of section 162(m) of the Internal Revenue Code 
of 1986 is amended to read as follows: 
‘‘(2) PUBLICLY HELD CORPORATION.—For pur-
poses of this subsection, the term ‘publicly held cor-
poration’ means any corporation which is an issuer 
(as defined in section 3 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c))— 
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