[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2546 Introduced in Senate (IS)]

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114th CONGRESS
  2d Session
                                S. 2546

  To amend the Internal Revenue Code of 1986 to require certain plans 
 providing for nonqualified deferred compensation to require repayment 
of benefits to the employer in the event of extraordinary governmental 
                  assistance, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 11, 2016

   Mr. Whitehouse (for himself, Mr. Blumenthal, and Mrs. McCaskill) 
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 require certain plans 
 providing for nonqualified deferred compensation to require repayment 
of benefits to the employer in the event of extraordinary governmental 
                  assistance, and for other purposes.

    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 ``No Windfalls for Bailed Out 
Executives Act''.

SEC. 2. REQUIRED REPAYMENT OF CERTAIN NONQUALIFIED DEFERRED 
              COMPENSATION IN CASE OF EXTRAORDINARY GOVERNMENTAL 
              ASSISTANCE.

    (a) In General.--Subsection (a) of section 409A of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(5) Required repayment in case of extraordinary 
        governmental assistance.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if the plan provides that, if any 
                employer maintaining the plan receives extraordinary 
                governmental assistance--
                            ``(i) any compensation deferred under the 
                        plan which is attributable to services 
                        performed by a designated individual with 
                        respect to such employer during the 36-month 
                        period ending on the date of the receipt of 
                        such assistance shall be forfeited, if not yet 
                        distributed by such date, or repaid to the 
                        employer, if already distributed by such date, 
                        and
                            ``(ii) no further compensation will be 
                        deferred under the plan with respect to such 
                        designated individuals before the date on which 
                        the extraordinary governmental assistance is 
                        fully repaid to the Federal Government.
                    ``(B) Extraordinary governmental assistance.--For 
                purposes of this paragraph, the term `extraordinary 
                governmental assistance' means any grant, loan, loan 
                guarantee, or other assistance (whether in cash or 
                otherwise) made by the Federal Government to or on 
                behalf of an employer which is intended to prevent the 
                employer from becoming imminently insolvent (within the 
                meaning of section 101(32) of title 11, United States 
                Code) or to cure such insolvency of the employer.
                    ``(C) Designated individual.--For purposes of this 
                paragraph, the term `designated individual' means--
                            ``(i) any key employee (as defined in 
                        section 416(i)(1)),
                            ``(ii) any member of the board of directors 
                        or other officer, and
                            ``(iii) any other employee having an annual 
                        compensation from the employer of more than 
                        $1,000,000 in any year during or after the 36-
                        month period ending on the date of the receipt 
                        of the extraordinary governmental assistance.
                    ``(D) Additional tax payable with respect to 
                compensation deferred or not repaid in violation of 
                rules.--
                            ``(i) In general.--If compensation is 
                        required to be included in gross income under 
                        paragraph (1)(A) for a taxable year due to a 
                        failure to meet the requirements of this 
                        paragraph, then in the case of any compensation 
                        which is not repaid to the employer in 
                        violation of subparagraph (A)(i) and any 
                        compensation which is deferred under the plan 
                        in violation of subparagraph (A)(ii), paragraph 
                        (1)(B) shall not apply and the tax imposed by 
                        this chapter for the taxable year shall be 
                        increased by an amount equal to--
                                    ``(I) 100 percent of the 
                                compensation that was not repaid in 
                                violation of subparagraph (A)(i), or 
                                100 percent of the compensation that 
                                was deferred in violation of 
                                subparagraph (A)(ii) which is 
                                attributable to services performed 
                                during the taxable year, whichever is 
                                applicable, reduced by
                                    ``(II) the amount of tax imposed by 
                                this chapter with respect to such 
                                compensation for the taxable year other 
                                than under this subparagraph.
                        In no event shall the effective rate of tax 
                        imposed by this chapter on any such 
                        compensation be greater than 100 percent.
                            ``(ii) Coordination with employer 
                        withholding.--For purposes of applying section 
                        3402(a) to--
                                    ``(I) any compensation which is not 
                                repaid to the employer in violation of 
                                subparagraph (A)(i), and
                                    ``(II) any compensation which is 
                                deferred under the plan in violation of 
                                subparagraph (A)(ii),
                        which is treated as wages for a taxable year by 
                        reason of this paragraph, in lieu of the rate 
                        of tax applicable under section 3402(a)(1), tax 
                        shall be withheld on such compensation at a 
                        rate of 100 percent.''.
    (b) Conforming Amendments.--
            (1) Subclause (I) of section 409A(a)(1)(A)(i) of the 
        Internal Revenue Code of 1986 is amended by striking ``and 
        (4)'' and inserting ``(4), and (5)''.
            (2) Clause (i) of section 409A(a)(1)(B) of such Code is 
        amended by striking ``If'' and inserting ``Except as provided 
        in paragraph (5)(D), if''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to amounts deferred under nonqualified deferred 
        compensation plans (as defined in section 409A(d)(1) of the 
        Internal Revenue Code of 1986) in taxable years beginning after 
        the date of the enactment of this Act.
            (2) Special rule.--The amendments made by this section 
        shall apply to earnings on deferred compensation only to the 
        extent that such amendments apply to such compensation.
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