To amend the Internal Revenue Code of 1986 to impose an excise tax on excessive 2009 bonuses received from certain major recipients of Federal emergency economic assistance, to limit the deduction allowable for such bonuses, and for other purposes.

SA 3342. Mr. WEBB (for himself and Mrs. Boxer) submitted an amendment
intended to be proposed by him to the bill H.R. 4213, to amend the
Internal Revenue Code of 1986 to extend certain expiring provisions,
and for other purposes; which was ordered to lie on the table; as
follows:

At the end, insert the following:

TITLE __--TAXPAYER FAIRNESS ACT

SEC. _01. SHORT TITLE.

This title may be cited as the ``Taxpayer Fairness Act''.

SEC. _02. FINDINGS.

Congress finds the following:
(1) During the years 2008 and 2009, the Nation's largest
financial firms received extraordinary and unprecedented
assistance from the public.
(2) Such assistance was critical to the success and in many
cases the survival of these firms during the year 2009.
(3) High earners at such firms should contribute a portion
of any excessive bonuses obtained for the year 2009 to help
the Nation reduce the public debt and recover from the
recession.

SEC. _03. EXCISE TAXES ON EXCESSIVE 2009 BONUSES RECEIVED
FROM MAJOR RECIPIENTS OF FEDERAL EMERGENCY
ECONOMIC ASSISTANCE.

(a) Imposition of Tax.--Chapter 46 is amended by adding at
the end the following new section:

``SEC. 4999A. EXCESSIVE 2009 BONUSES RECEIVED FROM MAJOR
RECIPIENTS OF FEDERAL EMERGENCY ECONOMIC
ASSISTANCE.

``(a) Imposition of Tax.--There is hereby imposed on any
person who receives a covered excessive 2009 bonus a tax
equal to 50 percent of the amount of such bonus.
``(b) Definition.--For purposes of this section, the term
`covered excessive 2009 bonus' has the meaning given such
term by section 280I(b).
``(c) Administrative Provisions and Special Rules.--
``(1) Withholding.--
``(A) In general.--In the case of any covered excessive
2009 bonus which is treated as wages for purposes of section
3402, the amount otherwise required to be deducted and
withheld under such section shall be increased by the amount
of the tax imposed by this section on such bonus.
``(B) Bonuses paid before enactment.--In the case of any
covered excessive 2009 bonus to which subparagraph (A)
applies which is paid before the date of the enactment of
this section, no penalty, addition to tax, or interest shall
be imposed with respect to any failure to deduct and withhold
the tax imposed by this section on such bonus.
``(2) Treatment of tax.--For purposes of subtitle F, any
tax imposed by this section shall be treated as a tax imposed
by subtitle A.
``(3) Notice requirements.--The Secretary shall require
each major Federal emergency economic assistance recipient
(as defined in section 280I(d)(1)) to notify, as soon as
practicable after the date of the enactment of this section
and at such other times as the Secretary determines
appropriate, the Secretary and each covered employee (as
defined in section 280I(e)) of the amount of covered
excessive 2009 bonuses to which this section applies and the
amount of tax deducted and withheld on such bonuses.
``(4) Secretarial authority.--The Secretary may prescribe
such regulations, rules, and guidance of general
applicability as may be necessary to carry out the provisions
of this section, including--
``(A) to prescribe the due date and manner of payment of
the tax imposed by this section with respect to any covered
excessive 2009 bonus paid before the date of the enactment of
this section, and
``(B) to prevent--
``(i) the recharacterization of a bonus payment as a
payment which is not a bonus payment in order to avoid the
purposes of this section,
``(ii) the treatment as other than an additional 2009 bonus
payment of any payment of increased wages or other payments
to a covered employee who receives a bonus payment subject to
this section in order to reimburse such covered employee for
the tax imposed by this section with regard to such bonus, or
``(iii) the avoidance of the purposes of this section
through the use of partnerships or other pass-thru
entities.''.
(b) Clerical Amendments.--
(1) The heading and table of sections for chapter 46 are
amended to read as follows:

``Chapter 46--Taxes on Certain Excessive Remuneration

``Sec. 4999. Golden parachute payments.
``Sec. 4999A. Excessive 2009 bonuses received from major recipients of
Federal emergency economic assistance.''.

(2) The item relating to chapter 46 in the table of
chapters for subtitle D is amended to read as follows:

``Chapter 46. Taxes on certain excessive remuneration.''.

(c) Effective Date.--The amendments made by this section
shall apply to payments of covered excessive 2009 bonuses
after December 31, 2008, in taxable years ending after such
date.

SEC. _04. LIMITATION ON DEDUCTION OF AMOUNTS PAID AS
EXCESSIVE 2009 BONUSES BY MAJOR RECIPIENTS OF
FEDERAL EMERGENCY ECONOMIC ASSISTANCE.

(a) In General.--Part IX of subchapter B of chapter 1 is
amended by adding at the end the following new section:

``SEC. 280I. EXCESSIVE 2009 BONUSES PAID BY MAJOR RECIPIENTS
OF FEDERAL EMERGENCY ECONOMIC ASSISTANCE.

``(a) General Rule.--The deduction allowed under this
chapter with respect to the amount of any covered excessive
2009 bonus shall not exceed 50 percent of the amount of such
bonus.
``(b) Covered Excessive 2009 Bonus.--For purposes of this
section, the term `covered excessive 2009 bonus' means any
2009 bonus payment paid during any calendar year to a covered
employee by any major Federal emergency economic assistance
recipient, to the extent that the aggregate of such 2009
bonus payments (without regard to the date on which such
payments are paid) with respect to such employee exceeds the
dollar amount of the compensation received by the President
under section 102 of title 3, United States Code, for
calendar year 2009.
``(c) 2009 Bonus Payment.--
``(1) In general.--The term `2009 bonus payment' means any
payment which--
``(A) is a payment for services rendered,
``(B) is in addition to any amount payable to a covered
employee for services performed by such covered employee at a
regular hourly, daily, weekly, monthly, or similar periodic
rate,
``(C) in the case of a retention bonus, is paid for
continued service during calendar year 2009 or 2010, and
``(D) in the case of a payment not described in
subparagraph (C), is attributable to services performed by a
covered employee during calendar year 2009 (without regard to
the year in which such payment is paid).

Such term does not include payments to an employee as
commissions, contributions to any qualified retirement plan
(as defined in section 4974(c)), welfare and fringe benefits,
overtime pay, or expense reimbursements. In the case of a
payment which is attributable to services performed during
multiple calendar years, such payment shall be treated as a
2009 bonus payment to the extent it is attributable to
services performed during calendar year 2009.
``(2) Deferred deduction bonus payments.--
``(A) In general.--The term `2009 bonus payment' includes
payments attributable to services performed in 2009 which are
paid in the form of remuneration (within the meaning of
section 162(m)(4)(E)) for which the deduction under this
chapter (determined without regard to this section) for such
payment is allowable in a subsequent taxable year.
``(B) Timing of deferred deduction bonus payments.--For
purposes of this section and section 4999A, the amount of any
payment described in subparagraph (A) (as determined in the
year in which the deduction under this chapter, determined
without regard to this section, for such payment would be
allowable) shall be treated as having been made in the
calendar year in which any interest in such amount is granted
to a covered employee (without regard to the date on which
any portion of such interest vests).
``(3) Retention bonus.--The term `retention bonus' means
any bonus payment (without regard to the date such payment is
paid) to a covered employee which--
``(A) is contingent on the completion of a period of
service with a major Federal emergency economic assistance
recipient, the completion of a specific project or other
activity for the major Federal emergency economic assistance
recipient, or such other circumstances as the Secretary may
prescribe, and
``(B) is not based on the performance of the covered
employee (other than a requirement that the employee not be
separated from employment for cause).

A bonus payment shall not be treated as based on performance
for purposes of subparagraph (B) solely because the amount of
the payment is determined by reference to a previous bonus
payment which was based on performance.
``(d) Major Federal Emergency Economic Assistance
Recipient.--For purposes of this section--
``(1) In general.--The term `major Federal emergency
economic assistance recipient' means--
``(A) any financial institution (within the meaning of
section 3 of the Emergency Economic Stabilization Act of
2008) if at any time after December 31, 2007, the Federal
Government acquires--
``(i) an equity interest in such person pursuant to a
program authorized by the Emergency Economic Stabilization
Act of 2008 or the third undesignated paragraph of section 13
of the Federal Reserve Act (12 U.S.C. 343), or
``(ii) any warrant (or other right) to acquire any equity
interest with respect to such person pursuant to any such
program,

[[Page S893]]

but only if the total value of the equity interest described
in clauses (i) and (ii) in such person is not less than
$5,000,000,000,
``(B) the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, and
``(C) any person which is a member of the same affiliated
group (as defined in section 1504, determined without regard
to subsection (b) thereof) as a person described in
subparagraph (A) or (B).
``(2) Treatment of controlled groups.--All persons treated
as a single employer under subsection (a) or (b) of section
52 or subsection (m) or (o) of section 414 shall be treated
as a single employer with respect to any covered employee.
``(e) Covered Employee.--For purposes of this section, the
term `covered employee' means, with respect to any major
Federal emergency economic assistance recipient--
``(1) any employee of such recipient, and
``(2) any director of such recipient who is not an
employee.

In the case of any major Federal emergency economic
assistance recipient which is a partnership or other
unincorporated trade or business, the term `employee' shall
include employees of such recipient within the meaning of
section 401(c)(1).
``(f) Regulations.--The Secretary may prescribe such
regulations, rules, and guidance of general applicability as
may be necessary to carry out the provisions of this section,
including--
``(1) to prescribe the due date and manner of reporting and
payment of any increase in the tax imposed by this chapter
due to the application of this section to any covered
excessive 2009 bonus paid before the date of the enactment of
this section, and
``(2) to prevent--
``(A) the recharacterization of a bonus payment as a
payment which is not a bonus payment in order to avoid the
purposes of this section, or
``(B) the avoidance of the purposes of this section through
the use of partnerships or other pass-thru entities.''.
(b) Clerical Amendment.--The table of sections for part IX
of subchapter B of chapter 1 is amended by adding at the end
the following new item:

``Sec. 280I. Excessive 2009 bonuses paid by major recipients of Federal
emergency economic assistance.''.

(c) Conforming Amendments.--
(1) Subparagraph (F) of section 162(m)(4) is amended--
(A) by inserting ``and excessive 2009 bonuses'' after
``payments'' in the heading,
(B) by striking ``the amount'' and inserting ``the total
amounts'', and
(C) by inserting ``or 280I'' before the period.
(2) Subparagraph (A) of section 3121(v)(2) is amended by
inserting ``, to any covered excessive 2009 bonus (as defined
in section 280I(b)),'' after ``section 280G(b))''.
(d) Effective Date.--The amendments made by this section
shall apply to payments of covered excessive 2009 bonuses
after December 31, 2008, in taxable years ending after such
date.
______