II 110th CONGRESS 2d Session S. 3675 IN THE SENATE OF THE UNITED STATES October 1 (legislative day, September 17), 2008 Mr. Kerry 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 provide for the treatment of certain excessive employee remuneration, and for other purposes.

1.

Short title

This Act may be cited as the Compensation Fairness Act of 2008.

2.

Treatment of certain excessive employee remuneration

(a)

Inflation index of limitation

Section 162(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (5)

Inflation adjustment

(A)

In general

In the case of any taxable year beginning after 2008, the $1,000,000 dollar amount under paragraph (1) shall be increased by an amount equal to— (i)such dollar amount, multiplied by (ii)the cost of living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2007 for calendar year 1992 in subparagraph (B) thereof. (B)

Rounding

If any amount as adjusted under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000. . (b)

Repeal of exception for remuneration payable on commission basis

Section 162(m)(4) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B) and by redesignating subparagraphs (C) through (G) as subparagraphs (B) through (F), respectively. (c)

Repeal of exception for other performance-based compensation

Section 162(m)(4) of the Internal Revenue Code of 1986, as amended by subsection (b), is amended by striking subparagraph (B) and by redesignating subparagraphs (C) through (F) as subparagraphs (B) through (E), respectively. (d)

Timing for determination of certain covered employees

Section 162(m)(3)(A) of the Internal Revenue Code of 1986 is amended by striking as of the close of the taxable year and inserting at any time during the taxable year. (e)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.