,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #bhfb  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,july #cj1 #bjac ,mr4 
,ma!son introduc$ ! foll[+ bill2 :i* 0  
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to all[ a tempor>y       
divid5ds receiv$ d$uction = #bjac or    
#bjad4  #a4 ,%ort title ,?is ,act may be
 cit$ z ! ,fre$om to ,inve/ ,act (      
#bjac4  #b4 ,tempor>y divid5ds receiv$  
d$uction all[$ = #bjac or #bjad  7a7    
,election ,subsection 7f7 ( section #ife
 ( ! ,int]nal ,rev5ue ,code ( #aihf     
7relat+ to election7 is am5d$ to read z 
foll[s3  7f7 ,election ,! taxpay] may   
elect to apply ?is section to--  7#a7 ! 
taxpay]'s la/ taxable ye> :i* beg9s be=e
 ! date ( ! enactm5t ( ?is subsection1  
or  7#b7 ! taxpay]'s fir/ taxable ye>   
:i* beg9s dur+ ! #a-ye> p]iod beg9n+ on 
su* date4  ,su* election may be made = a
 taxable ye> only if made on or be=e !  
due date 7includ+ ext5sions7 = fil+ !   
return ( tax = su* taxable ye>4  4  7b7 

,limitation ,p>agraph 7#a7 ( section    
#ife7;b7 ( su* ,code is am5d$ to read z 
foll[s3  7#a7 ,9 g5]al ,! am\nt (       
divid5ds tak5 into acc\nt "u subsection 
7a7 %all n exce$ ! sum ( ! curr5t &     
accumulat$ e>n+s & pr(its describ$ 9    
section #iei7;c77#c7 = ! ye> a d$uction 
is claim$ "u subsection 7a71 )\t        
dim9ution by reason ( any di/ributions  
made dur+ ! election ye>1 = all         
controll$ =eign corporations ( ! ,unit$ 
,/ates %>ehold]4  4  7c7 ,failure ,to   
ma9ta9 employm5t levels ,p>agraph 7#d7 (
 section #ife7;b7 ( su* ,code 7relat+ to
 limitations7 is am5d$ to read z foll[s3
  7#d7 ,r$uction 9 b5efits = failure to 
ma9ta9 employm5t levels  7,a7 ,9 g5]al  
,if1 dur+ ! p]iod consi/+ ( ! cal5d>    
mon? 9 :i* ! taxpay] fir/ receives a    
di/ribution describ$ 9 subsection       
7a77#a7 & ! succe$+ #bc cal5d> mon?s1 ! 
taxpay] does n ma9ta9 an av]age         
employm5t level at lea/ equal to !      
taxpay]'s prior av]age employm5t1 an    
additional am\nt equal to #be1jjj       

multipli$ by ! numb] ( employees by :i* 
! taxpay]'s av]age employm5t level dur+ 
su* p]iod falls bel[ ! prior av]age     
employm5t 7b n exce$+ ! aggregate am\nt 
all[$ z a d$uction pursuant to          
subsection 7a77#a77 %all be tak5 into   
income by ! taxpay] dur+ ! taxable ye> t
 includes ! f9al day ( su* p]iod4  7,b7 
,av]age employm5t level ,= purposes (   
?is p>agraph1 ! taxpay]'s av]age        
employm5t level = a p]iod %all be !     
av]age numb] ( full-"t ,unit$ ,/ates    
employees ( ! taxpay]1 measur$ at ! end 
( ea* mon? dur+ ! p]iod4  7,c7 ,prior   
av]age employm5t ,= purposes ( ?is      
p>agraph1 ! taxpay]'s prior av]age      
employm5t %all be ! av]age numb] (      
full-"t ,unit$ ,/ates employees ( !     
taxpay] dur+ ! p]iod consi/+ ( ! #bd    
cal5d> mon?s imm$iately prec$+ ! cal5d> 
mon? 9 :i* ! taxpay] fir/ receives a    
di/ribution describ$ 9 subsection       
7a77#a74  7,d7 ,full-"t ,unit$ ,/ates   
employee ,= purposes ( ?is p>agraph--   
7i7 ,9 g5]al ,! t]m full-"t ,unit$      

,/ates employee means an individual :o  
provides s]vices 9 ! ,unit$ ,/ates z a  
full-"t employee1 bas$ on ! employ]'s   
/&>ds & practices2 except t reg>dless ( 
! employ]'s classification ( ! employee1
 an employee ^: normal s*$ule is #dj    
h\rs or m p] week is consid]$ a full-"t 
employee4  7ii7 ,exception = *anges 9   
own]%ip ( trades or bus9esses ,su* t]m  
does n include--  7,i7 any individual :o
 0 an employee1 on ! date ( acquisition1
 ( any trade or bus9ess acquir$ by !    
taxpay] dur+ ! #bd-mon? p]iod ref]r$ to 
9 subp>agraph 7,a72 &  7,,ii7 any       
individual :o 0 an employee ( any trade 
or bus9ess dispos$ ( by ! taxpay] dur+ !
 #bd-mon? p]iod ref]r$ to 9 subp>agraph 
7,a7 or ! #bd-mon? p]iod ref]r$ to 9    
subp>agraph 7,c74  7,e7 ,aggregation    
rules ,9 det]m9+ ! taxpay]'s av]age     
employm5t level & prior av]age          
employm5t1 all dome/ic memb]s ( a       
controll$ gr\p %all be treat$ z a s+le  
taxpay]4  4  7d7 ,?re%old p]iod ,section
 #ife ( su* ,code is am5d$ by /rik+     

,june #cj1 #bjjc ea* place x occurs &   
ins]t+ ,june #cj1 #bjab4  7e7 ,base     
p]iod ,p>agraph 7#b7 ( subsection       
#ife7;c7 ( su* ,code is am5d$ by ins]t+ 
at ! end ( subp>agraph 7,a7 ! foll[+    
flu% s5t5ce3 ,= purposes ( ?is p>agraph1
 taxable ye>s %all n include any ye> =  
:i* an election "u section #ife 0 9     
effect44  7f7 ,indebt$ness det]m9ation  
date ,subp>agraph 7,b7 ( section        
#ife7;b77#c7 ( su* ,code is am5d$ by    
/rik+ ,octob] #c1 #bjjd & ins]t+ ,janu>y
 #aa1 #bjac4  7g7 ,con=m+ am5dm5ts  7#a7
 ,subsection #ife7;c7 ( su* ,code1 z    
am5d$ by subsection 7e71 is am5d$ by    
/rik+ p>agraph 7#a7 & r$esignat+        
p>agraphs 7#b71 7#c71 7#d71 & 7#e7 z    
p>agraphs 7#a71 7#b71 7#c71 & 7#d71     
respectively4  7#b7 ,p>agraph           
#ife7;c77#d7 ( su* ,code1 z r$esignat$  
by p>agraph 7#a71 is am5d$ to read z    
foll[s3  7#d7 ,controll$ gr\ps ,all     
,unit$ ,/ates %>ehold]s :i* are memb]s (
 an affiliat$ gr\p fil+ a consolidat$   
return "u section #aeja %all be treat$ z

 "o ,unit$ ,/ates %>ehold]4  4  7h7     
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s end+ 
on or aft] ! date ( ! enactm5t ( ?is    
,act4