To require financial institutions receiving TARP assistance to redeem from the United States preferred stock in an amount equal to excess bonuses for 2008 or to pay a 35 percent tax on such amount.

SA 468. Mr. WYDEN (for himself and Ms. Snowe) submitted an amendment
intended to be proposed to amendment SA 98 proposed by Mr. Inouye (for
himself and Mr. Baucus) to the bill H.R. 1, making supplemental
appropriations for job preservation and creation, infrastructure
investment, energy efficiency and science, assistance to the
unemployed, and State and local fiscal stabilization, for fiscal year
ending September 30, 2009, and for other purposes; which was ordered to
lie on the table; as follows:

At the end of title I of division B, insert the following:

SEC. 1903. TREATMENT OF EXCESSIVE BONUSES BY TARP RECIPIENTS.

(a) In General.--If, before the date of enactment of this
Act, the preferred stock of a financial institution was
purchased by the Government using funds provided under the
Troubled Asset Relief Program established pursuant to the
Emergency Economic Stabilization Act of 2008, then,
notwithstanding any otherwise applicable restriction on the
redeemability of such preferred stock, such financial
institution shall redeem an amount of such preferred stock
equal to the aggregate amount of all excessive bonuses paid
or payable to all covered individuals.
(b) Timing.--Each financial institution described in
subsection (a) shall comply with the requirements of
subsection (a)--
(1) not later than 120 days after the date of enactment of
this Act, with respect to excessive bonuses (or portions
thereof) paid before the date of enactment of this Act; and
(2) not later than the day before an excessive bonus (or
portion thereof) is paid, with respect to any excessive bonus
(or portion thereof) paid on or after the date of enactment
of this Act.
(c) Definitions.--As used in this section, the following
definitions shall apply:
(1) Excessive bonus.--
(A) In general.--The term ``excessive bonus'' means the
portion of the applicable bonus payments made to a covered
individual in excess of $100,000.
(B) Applicable bonus payments.--
(i) In general.--The term ``applicable bonus payment''
means any bonus payment to a covered individual--

(I) which is paid or payable by reason of services
performed by such individual in a taxable year of the
financial institution (or any member of a controlled group
described in subparagraph (D)) ending in 2008, and
(II) the amount of which was first communicated to such
individual during the period beginning on January 1, 2008,
and ending January 31, 2009, or was based on a resolution of
the board of directors of such institution that was adopted
before the end of such taxable year.

(ii) Certain payments and conditions disregarded.--In
determining whether a bonus payment is described in clause
(i)(I)--

(I) a bonus payment that relates to services performed in
any taxable year before the

[[Page S1746]]

taxable year described in such clause and that is wholly or
partially contingent on the performance of services in the
taxable year so described shall be disregarded, and
(II) any condition on a bonus payment for services
performed in the taxable year so described that the employee
perform services in taxable years after the taxable year so
described shall be disregarded.

(C) Bonus payment.--The term ``bonus payment'' means any
payment which--
(i) is a discretionary payment to a covered individual by a
financial institution (or any member of a controlled group
described in subparagraph (D)) for services rendered,
(ii) is in addition to any amount payable to such
individual for services performed by such individual at a
regular hourly, daily, weekly, monthly, or similar periodic
rate, and
(iii) is paid or payable in cash or other property other
than--

(I) stock in such institution or member, or
(II) an interest in a troubled asset (within the meaning of
the Emergency Economic Stabilization Act of 2008) held
directly or indirectly by such institution or member.

Such term does not include payments to an employee as
commissions, welfare and fringe benefits, or expense
reimbursements.
(D) Covered individual.--The term ``covered individual''
means, with respect to any financial institution, any
director or officer or other employee of such financial
institution or of any member of a controlled group of
corporations (within the meaning of section 52(a) of the
Internal Revenue Code of 1986) that includes such financial
institution.
(2) Financial institution.--The term ``financial
institution'' has the same meaning as in section 3 of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C.
5252).
(d) Excise Tax on TARP Companies That Fail to Redeem
Certain Securities From United States.--
(1) In general.--Chapter 46 of the Internal Revenue Code of
1986 (relating to excise tax on golden parachute payments) is
amended by adding at the end the following new section:

``SEC. 4999A. FAILURE TO REDEEM CERTAIN SECURITIES FROM
UNITED STATES.

``(a) Imposition of Tax.--There is hereby imposed a tax on
any financial institution which--
``(1) is required to redeem an amount of its preferred
stock from the United States pursuant to section 1903(a) of
the American Recovery and Reinvestment Tax Act of 2009, and
``(2) fails to redeem all or any portion of such amount
within the period prescribed for such redemption.
``(b) Amount of Tax.--The amount of the tax imposed by
subsection (a) shall be equal to 35 percent of the amount
which the financial institution failed to redeem within the
time prescribed under 1903(b) of the American Recovery and
Reinvestment Tax Act of 2009.
``(c) Administrative Provisions.--
``(1) In general.--For purposes of subtitle F, any tax
imposed by this section shall be treated as a tax imposed by
subtitle A for the taxable year in which a deduction is
allowed for any excessive bonus with respect to which the
redemption described in subsection (a)(1) is required to be
made.
``(2) Extension of time.--The due date for payment of tax
imposed by this section shall in no event be earlier than the
150th day following the date of the enactment of this
section.''.
(2) Conforming amendments.--
(A) The heading for chapter 46 of such Code are amended to
read as follows:

``Chapter 46--Taxes on Certain Excessive Remuneration

``Sec. 4999. Golden parachute payments.
``Sec. 4999A. Failure to redeem certain securities from United
States.''.
(B) The item relating to chapter 46 in the table of
chapters for subtitle D of such Code is amended to read as
follows:

``Chapter 46. Taxes on excessive remuneration.''.
(3) Effective date.--The amendments made by this subsection
shall apply to failures described in section 4999A(a)(2) of
the Internal Revenue Code of 1986 occurring after the date of
the enactment of this Act.
______