[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1320 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1320

To amend the Internal Revenue Code of 1986 to exclude certain employee 
                 productivity awards from gross income.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 11, 1993

 Mr. Goodling 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 exclude certain employee 
                 productivity awards from gross income.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Business Productivity and 
Quality Enhancement Act of 1993''.

SEC. 2. EXCLUSION FROM GROSS INCOME FOR CERTAIN EMPLOYEE PRODUCTIVITY 
              AWARDS.

    (a) In General.--Section 74 of the Internal Revenue Code of 1986 
(relating to prizes and awards) is amended by adding at the end thereof 
the following new subsection:
    ``(d) Exception for Certain Employee Productivity Awards.--
            ``(1) In general.--Gross income shall not include the value 
        of an employee productivity award received by the taxpayer if 
        the cost to the employer for such award does not exceed--
                    ``(A) $500, reduced by
                    ``(B) the cost to the employer for all other 
                employee productivity awards previously made to the 
                taxpayer during the taxable year of the employer in 
                which such award was made.
            ``(2) Award exceeding cost limitation.--If the cost to the 
        employer of the employee productivity award received by the 
        taxpayer exceeds the limitation of paragraph (1), then gross 
        income includes the greater of--
                    ``(A) the portion of the cost to the employer in 
                excess of such limitation (but not in excess of the 
                value of the award), or
                    ``(B) the amount by which the value of the award 
                exceeds such limitation.
        The remaining portion of the value of such award shall not be 
        included in the gross income of the recipient.
            ``(3) Employee productivity award.--For purposes of this 
        subsection, the term `employee productivity award' means any 
        property which is--
                    ``(A) transferred by an employer to an employee for 
                productivity or quality achievement,
                    ``(B) awarded under a written plan or program of 
                the taxpayer which does not discriminate in favor of 
                highly compensated employees (within the meaning of 
                section 414(q)),
                    ``(C) awarded as part of a meaningful presentation,
                    ``(D) awarded as a result of employee activity 
                which resulted in--
                            ``(i) increased productivity per worker,
                            ``(ii) increased competitiveness in the 
                        marketability of any product of the employer, 
                        or
                            ``(iii) an improvement in, or increased 
                        efficiency in producing, any product of the 
                        employer, and
                    ``(E) awarded under conditions and circumstances 
                that do not create a significant likelihood of the 
                payment of disguised compensation.
        Such term does not include any award made during any taxable 
        year of the employer which was made after employee productivity 
        awards (other than awards excludable under section 132(e)(1)) 
        have previously been made during such taxable year to more than 
        10 percent of the employees of the taxpayer.''
    (b) Employment Tax and Withholding Exclusion.--Sections 
3121(a)(20), 3231(e)(5), 3306(b)(16), and 3401(a)(19) of such Code are 
each amended by striking ``74(c)'' and inserting ``74 (c) or (d)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to awards made on or after January 1, 1993.

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