1.Tax on certain compensation
received from certain companies receiving bailout funds
(a)Subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end
the following new part:
VIIICertain
compensation received from certain companies receiving bailout funds
Sec. 59C. Certain compensation received from certain companies
receiving bailout funds.
59C.Certain
compensation received from certain companies receiving bailout funds
(a)In the case of any
employee (or former employee) of a bailout recipient, there is hereby imposed
(in addition to any other tax imposed by this subtitle) a tax equal to 70
percent of the amount of excess compensation received by the taxpayer during
the taxable year from any relevant employer.
(b)For purposes of this section—
(1)The term excess compensation
means the
value of all property paid or transferred to the employee during the taxable
year (including any loan that is not reasonably secured) which is in excess of
$1,000,000.
(2)Such term shall not include any of the
following:
(A)Any amount returned by the employee to the
employer within 60 days of receipt thereof or within 60 days of the enactment
of this Act, whichever is later. Any amount returned under this subparagraph
shall also be excluded from the definition of gross income.
(B)To the extent
explicitly allowed by any regulation adopted by the Secretary, shares of common
stock of the employer (or any affiliate thereof) but only if the employee is
required to hold such shares until the date on which the employer ceases to be
a relevant employer.
(C)Any amount
received before the employer became a relevant employer or after the employer
ceases to be a relevant employer, whether or not for services provided during
the period when the employer was classified as a relevant employer, but this
provision shall not apply if the payment is made out of assets which were held
in trusts, or otherwise made unavailable to the claims of general
creditors.
(D)Any commission received by a commissioned
sales person. For purposes of this subparagraph, a commission is an amount of
compensation payable determinable solely by reference to the products sold by
the commissioned sales person through direct interaction with purchasers. For
purposes of this subparagraph, a commissioned sales person is a person who
receives commissions, who spends the majority of their work time selling
products directly to purchasers, and who is not one of the persons defined in
Rule 16a1–(f) promulgated under the Securities Exchange Act of 1934.
(3)Special rules
for certain trustsIn the
event that a relevant employer puts funds for the benefit of an employee, or a
class of employees, in a trust fund (other than a qualified deferred
compensation plan) or other device, which fund is exempt from the claims of the
relevant employer’s general creditors, it shall be deemed paid to the employees
for whom it is being held.
(c)For purposes of this
section, the term relevant employer
means any entity (including
any subsidiary or affiliate of such entity) that has received, in the
aggregate, more than $500,000,000 pursuant to title I of the Emergency Economic
Stabilization Act of 2008 or pursuant to section 1117 of the Housing and
Economic Recovery Act of 2008, regardless of whether such funds are received in
return for any class of securities of the employer or any other asset. An
employer ceases to be a relevant employer when it has fully repaid to the
Federal Government all such funds.
(d)The
Secretary shall prescribe such regulations or other guidance as may be
necessary or appropriate to carry out the purposes of this
section.
.
(b)The table of parts for subchapter A of chapter 1 of
such Code is amended by adding at the end the following new item:
Part VIII—Certain compensation received from certain companies
receiving bailout
funds
.
(c)The amendments made by this section shall apply to
compensation received after December 31, 2007, in taxable years ending after
such date.