S.Amdt. 2695

SA 2695. Mrs. GILLIBRAND submitted an amendment intended to be
proposed by her to the bill H.R. 1, to provide for reconciliation
pursuant to title II of H. Con. Res. 14; which was ordered to lie on
the table; as follows:

At the appropriate place in subtitle A of title VII, insert
the following:

SEC. ___. EXEMPTING FROM FEDERAL INCOME TAXATION PAYMENTS
ALLOCABLE TO SEXUAL ASSAULT OR SEXUAL
HARASSMENT CLAIMS.

(a) In General.--Part III of subchapter B of chapter 1, as
amended by the preceding provisions of this Act, is amended
by inserting before section 140 the following new section:

``SEC. 139M. AMOUNTS RECEIVED AS JUDGMENTS, AWARDS, AND
SETTLEMENTS WITH RESPECT TO SEXUAL ASSAULT OR
SEXUAL HARASSMENT CLAIMS.

``(a) In General.--In the case of an individual, gross
income shall not include any amount received as a judgment,
award, or settlement (including back pay, front pay, punitive
damages, or any payments made in connection with a release of
claims or to resolve, settle, or litigate claims), whether by
lump sum or periodic payments, from--
``(1) a claim involving an alleged nonconsensual sexual act
or sexual contact, as such terms are defined in section 2246
of title 18, United States Code, or similar applicable
Tribal, State, or local law, including when the victim lacks
capacity to consent, or
``(2) a claim relating to conduct that is alleged to
constitute sexual harassment under applicable Federal,
Tribal, State, or local law.
``(b) Regulations and Guidance.--The Secretary shall issue
such regulations or other guidance as the Secretary
determines necessary to carry out the purposes of this
section, including regulations or other guidance to
distinguish amounts received in connection with a claim
described in subsection (a) from other amounts received as
part of a judgment, award, or settlement.''.
(b) Social Security Taxes.--Section 3121(a) is amended by
striking ``or'' at the end of paragraph (22), by striking the
period at the end of paragraph (23) and inserting ``; or'',
and by inserting after paragraph (23) the following new
paragraph:
``(24) any amount received which is excludable from the
gross income of the employee under section 139M.''.
(c) Railroad Retirement Tax.--Section 3231(e) is amended by
adding at the end the following new paragraph:
``(13) Amounts received as judgments, awards, and
settlements with respect to sexual assault or sexual
harassment claims.--The term `compensation' shall not include
any amount received which is excludable from the gross income
of the employee under section 139M.''.
(d) Unemployment Taxes.--Section 3306(b) is amended by
striking ``or'' at the end of paragraph (19), by striking the
period at the end of paragraph (20) and inserting ``; or'',
and by inserting after paragraph (20) the following new
paragraph:
``(21) any amount received which is excludable from the
gross income of the employee under section 139M.''.
(e) Wage Withholding.--Section 3401 is amended by striking
``or'' at the end of paragraph (22), by striking the period
at the end of paragraph (23) and inserting ``, or'', and by
inserting after paragraph (23) the following new paragraph:
``(24) any amount received which is excludable from the
gross income of the employee under section 139M.''.
(f) Clerical Amendment.--The table of sections for part III
of subchapter B of chapter 1, as amended by the preceding
provisions of this Act, is amended by inserting before the
item relating to section 140 the following new item:

``Sec. 139M. Amounts received as judgments, awards, and settlements
with respect to sexual assault or sexual harassment
claims.''.
(g) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
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