[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6419 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6419

To amend the Internal Revenue Code of 1986 to exclude from gross income 
      compensation received by employees consisting of qualified 
                    distributions of employer stock.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 26, 2008

 Mr. Rohrabacher (for himself, Mr. Goode, Mr. Jones of North Carolina, 
 and Mr. Roskam) 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 from gross income 
      compensation received by employees consisting of qualified 
                    distributions of employer stock.

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

SECTION 1. QUALIFIED STOCK DISTRIBUTIONS TO EMPLOYEES.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139A the following new section:

``SEC. 139B. QUALIFIED STOCK DISTRIBUTIONS TO EMPLOYEES.

    ``(a) In General.--Gross income shall not include--
            ``(1) so many shares of any stock received by an individual 
        in a qualified employee stock distribution of such individual's 
        employer as does not exceed the maximum stock amount, and
            ``(2) any gain on stock excluded from gross income under 
        paragraph (1) if such stock is held by such individual for not 
        less than 10 years.
    ``(b) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified employee stock distribution.--The term 
        `qualified employee stock distribution' means a distribution by 
        an employer of stock of such employer to all employees 
        (determined as of the date of the distribution) of such 
        employer as compensation for services.
            ``(2) Maximum stock amount.--The term `maximum stock 
        amount' means, with respect to any distribution, the lowest 
        number of shares of stock of the employer received by any 
        employee of the employer in such distribution.
    ``(c) Employment Taxes.--Amounts excluded from gross income under 
subsection (a)(1) shall not be taken into account as wages for purposes 
of chapters 21, 22, 23, 23A, and 24.
    ``(d) Recapture if Stock Disposed During Required Holding Period.--
If an amount is excluded from gross income under subsection (a)(1) with 
respect to any stock and the individual disposes of such stock at any 
time during the 10-year period beginning on the date that such 
individual received such stock--
            ``(1) the gross income of such individual for the taxable 
        year which includes the date of such disposition shall be 
        increased by the amount so excluded, and
            ``(2) the tax imposed by this chapter for such taxable year 
        shall be increased by the sum of the amounts of tax which would 
        have been imposed under subchapters A and B of chapters 21 and 
        22 if subsection (c) had not applied with respect to such 
        amount.
For purposes of this title and the Social Security Act, any increase in 
tax under paragraph (2) shall be treated as imposed under the provision 
of chapter 21 or 22 with respect to which such increase relates.
    ``(e) Regulations.--The Secretary shall issue such regulations as 
may be necessary or appropriate to carry out this section, including 
regulations which provide for the application of this section to stock 
options.''.
    (b) Clerical Amendment.--The table of section for such part is 
amended by inserting after the item relating to section 139A the 
following new item:

``Sec. 139B. Qualified stock distributions to employees.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to stock received by employees after December 31, 2008.
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