II 115th CONGRESS 1st Session S. 82 IN THE SENATE OF THE UNITED STATES January 10, 2017 Mr. Reed (for himself and 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 expand the denial of deduction for certain excessive employee remuneration, and for other purposes.

1. Short title This Act may be cited as the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act . 2. Expansion of denial of deduction for certain excessive employee remuneration (a) Application to all current and former employees (1) In general Section 162(m) of the Internal 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 individual . (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 employee 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, 2018) after section 162(m)(3) . (B) Section 409A(b)(3)(D)(ii) of such Code is amended by inserting (as in effect for taxable years beginning before January 1, 2018) after section 162(m)(3) . (b) Expansion of applicable employee remuneration (1) Elimination of exception for commission-based pay (A) In general Paragraph (4) of section 162(m) of such Code, as amended by subsection (a), is amended by striking subparagraph (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 subparagraph (E) and inserting subparagraphs (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— (I) by striking subparagraphs (B), (C), and (D) thereof in subparagraph (D) and inserting subparagraphs (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 compensation (A) In general Paragraph (4) of section 162(m) of the Internal Revenue Code of 1986, as amended by subsection (a) and paragraph (1) of this subsection, is amended by striking subparagraph (B) and redesignating subparagraphs (C) through (F) as subparagraphs (B) through (E), respectively. (B) Conforming amendments (i) Section 162(m)(5) of such Code, as amended by paragraph (1), is amended— (I) by striking subparagraphs (B) and (C) thereof in subparagraph (E) and inserting subparagraph (B) thereof , and (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 amended— (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 Paragraph (2) of section 162(m) of the Internal Revenue Code of 1986 is amended to read as follows: (2) Publicly held corporation For purposes of this subsection, the term publicly held corporation means any corporation which is an issuer (as defined in section 3 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c ))— (A) the securities of which are registered under section 12 of such Act ( 15 U.S.C. 78l ), or (B) that is required to file reports under section 15(d) of such Act ( 15 U.S.C. 780(d) ). . (d) Regulatory authority (1) In general Section 162(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (7) Regulations The Secretary may prescribe such guidance, rules, or regulations, including with respect to reporting, as are necessary to carry out the purposes of this subsection. . (2) Conforming amendment Paragraph (6) of section 162(m) of such Code is amended by striking subparagraph (H). (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2017.