,,ii #aaeth ,,congress #ast ,session ,s4 #bj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #c1 #bjag,mr4 ,van ,hollen introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to expand the denial of deduction for certain excessive employee remuneration4 #a4 ,short title ,this ,act may be cited as the ,,ceo-,employee ,paycheck ,fairness ,act of #bjag4 #b4 ,expansion of denial of deduction for certain excessive employee remuneration 7a7 ,expanded application of deduction denial if pay fairness requirement not met ,section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#g7 ,special rule in case of companies not meeting pay fairness requirement 7,a7 ,in general ,in the case of a publicly held corporation which does not meet the pay fairness requirement of subparagraph 7,b7 for the taxable year-- 7i7 no deduction shall be allowed under this chapter for applicable employee remuneration with respect to any employee to the extent that the amount of such remuneration for the taxable year with respect to such employee exceeds #a1jjj1jjj1 and 7ii7 paragraph 7#d7 shall be applied without regard to subparagraphs 7,b71 7,c71 and 7,d7 thereof4 ,for purposes of the preceding sentence1 the term employee includes any officer or director of the taxpayer and any former officer1 director1 or employee of the taxpayer4 7,b7 ,pay fairness requirement ,the pay fairness requirement of this subparagraph is met if-- 7i7 7,i7 the average compensation paid by the taxpayer to or for all applicable ,united ,states employees for the taxable year1 exceeds 7,,ii7 the inflation and productivity growth adjusted average of such compensation for the preceding taxable year1 and 7ii7 the aggregate compensation paid by the employer to or for all applicable ,united ,states employees for the taxable year is not less than the aggregate of such compensation for the preceding taxable year4 7,c7 ,applicable ,united ,states employee ,for purposes of this paragraph1 the term applicable ,united ,states employee means1 with respect to any taxable year1 any employee-- 7i7 whose services with respect to the employer are substantially all performed within the ,united ,states1 and 7ii7 whose compensation from the employer for the taxable year does not exceed the dollar amount in effect under section #dad7q77#a77;,b77i7 with respect to the calendar year in which such taxable year begins4 7,d7 ,inflation and productivity growth adjusted average ,for purposes of subparagraph 7,b77i77,,ii71 the inflation and productivity growth adjusted average of compensation for any taxable year shall be determined by multiplying-- 7i7 the average of the compensation paid by the taxpayer to or for all applicable ,united ,states employees for the taxable year1 by 7ii7 the sum of the cost-of-living adjustment and the productivity adjustment for the taxable year4 7,e7 ,cost-of-living adjustment ,for purposes of subparagraph 7,d77ii71 the cost-of-living adjustment for any taxable year is the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting the second preceding calendar year for calendar year #aiib in subparagraph 7,b7 thereof4 7,f7 ,productivity adjustment ,for purposes of subparagraph 7,d77ii7-- 7i7 ,in general ,the productivity adjustment for the taxable year is an amount 7expressed as a percentage7 equal to the average annual increase in the business productivity index for the period beginning with calendar year #bjjj and ending with the calendar year preceding the calendar year in which the taxable year begins4 7ii7 ,business productivity index ,the term business productivity index means the nonfarm business productivity index published by the ,bureau of ,labor ,statistics as adjusted by the ,secretary to account for depreciation4 7,g7 ,compensation ,for purposes of this subparagraph1 the term compensation means1 with respect to any employee1 the sum of-- 7i7 the employee's wages on which the tax under section #caja7;b7 is imposed1 plus 7ii7 any amount described in paragraph 7#i71 7#aa71 7#ab71 or 7#ad7 of section #fjea7;a7 with respect to the employee4 7,h7 ,aggregation rules ,rules similar to the rules of paragraph 7#e77;,b77iii7 shall apply for purposes of this paragraph4 7,i7 ,regulations ,the ,secretary may prescribe such regulations as are necessary to carry out the purposes of this paragraph1 including adjustments to the pay fairness requirements of subparagraph 7,b7-- 7i7 to prevent avoidance of this paragraph through changes in the composition of the taxpayer's workforce1 and 7ii7 to account for significant1 non-tax-motivated changes in the size and composition of the taxpayer's workforce 7including mergers1 spinoffs1 or changes in the occupational composition of a taxpayer's workforce74 4 7b7 ,modification of definition of covered employees 7#a7 ,in general ,paragraph 7#c7 of section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 in subparagraph 7,a71 by striking as of the close of the taxable year1 such employee is the chief executive officer of the taxpayer or is and inserting such employee is the chief executive officer or the chief financial officer of the taxpayer at any time during the taxable year1 or was2 7,b7 in subparagraph 7,b7 by striking 7other than the chief executive officer7 and inserting 7other than any individual described in subparagraph 7,a772 and 7,c7 by striking or at the end of subparagraph 7,a71 by striking the period at the end of subparagraph 7,b7 and inserting 1 or1 and by adding at the end the following3 7,c7 was a covered employee of the taxpayer 7or any predecessor7 for any preceding taxable year beginning after ,december #ca1 #bjad4 4 7#b7 ,technical amendment ,section #afb7m77#c77;,b7 of such ,code is amended by striking #d highest and inserting #c highest4 7c7 ,applicable employee remuneration paid to beneficiaries1 etc ,paragraph 7#d7 of section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subparagraph3 7,h7 ,special rule for remuneration paid to beneficiaries1 etc ,remuneration shall not fail to be applicable employee remuneration merely because it is includible in the income of1 or paid to1 a person other than the covered employee1 including after the death of the covered employee4 4 7d7 ,expansion of applicable employer ,to include non-,listed public companies ,paragraph 7#b7 of section #afb7m7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#b7 ,publicly held corporation ,for purposes of this subsection1 the term publicly held corporation means any corporation which is an issuer 7as defined in section #c of the ,securities ,exchange ,act of #aicd7 and which-- 7,a7 has a class of securities registered under section #ab of such ,act1 or 7,b7 is required to file reports under section #ae7;d7 of such ,act4 4 7e7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjaf4