,i  #aafth ,,congress  #ast ,session    
,h4 ,r4 #abid  ,,in ,,the ,,house ,,of  
,,representatives  ,february #ad1       
#bjai,mrs4 ,watson ,coleman introduced  
the following bill2 which was referred  
to the ,committee on ,ways and ,means   
,a ,,bill  ,to amend the ,internal      
,revenue ,code of #aihf to deny the     
deduction for executive compensation    
unless the employer maintains           
profit-sharing distributions for        
employees4  #a4 ,short title ,this ,act 
may be cited as the ,employee           
,profit-,sharing ,encouragement ,act of 
#bjai4  #b4 ,denial of deduction for    
executive compensation unless employer  
maintains profit-sharing distributions  
7a7 ,in general ,section #afb of the    
,internal ,revenue ,code of #aihf is    
amended by redesignating subsection 7s7 
as subsection 7t7 and by inserting after
 subsection 7r7 the following new       
subsection3  7s7 ,executive compensation
 paid by employers who do not maintain  
profit-,sharing distributions  7#a7 ,in 

general ,in the case of a specified     
employer1 no deduction shall be allowed 
under this chapter for applicable       
employee remuneration with respect to   
any highly compensated individual       
7within the meaning of section #aje7;h77
 for any taxable year unless qualified  
profit-sharing distributions are made   
during such taxable year4  7#b7         
,qualified profit-sharing distributions 
,for purposes of this subsection-- 7,a7 
,in general ,the term qualified         
profit-sharing distributions means a    
cash distribution made pursuant to a    
written plan of the employer under      
which--  7i7 employees 7including       
part-time employees7 who have been      
employed for at least #a year as of the 
date of the distribution have a right to
 such distribution1 and  7ii7 the amount
 of such distributions are defined under
 such plan on the basis of a measure of 
the receipts1 profit1 revenues1 or      
earnings of such employer4  7,b7        
,minimum distribution requirements ,such

 term shall not include any             
distributions made pursuant to such plan
 during the taxable year if the         
aggregate distributions made pursuant to
 such plan during such taxable year are 
less than #e percent of the employer's  
net income for the taxable year as      
determined pursuant to the employer's   
books and records prepared in accordance
 with the employer's accounting         
procedures4  7,c7 ,nondiscrimination    
,such term shall not include any        
distributions made pursuant to such plan
 during the taxable year unless such    
plan satisfies requirements similar to  
the requirements of section             
#dja7k77#c77;,a77ii7 applied by treating
 the distributions made pursuant to the 
plan as though such distributions were  
contributions paid over to the trust    
referred to in such section4  7,d7      
,exception if distributions would       
jeopardize the business ,an employer    
shall not fail to be treated as making  
qualified profit-sharing distributions  

during the taxable year to the extent   
that such employer establishes to the   
satisfaction of the ,secretary by clear 
and convincing evidence that making such
 distributions would jeopardize the     
ability of the employer to continue as a
 going concern4  7#c7 ,specified        
employer ,for purposes of this          
subsection-- 7,a7 ,in general ,the term 
specified employer means1 with respect  
to any taxable year1 any employer which 
meets the gross receipts test of section
 #ddh7;c7 7determined without regard to 
paragraph 7#d7 thereof7 for such taxable
 year4  7,b7 ,application of gross      
receipts test to individuals1 etc ,for  
purposes of subparagraph 7,a71 in the   
case of any employer which is not a     
corporation or a partnership1 the gross 
receipts test referred to in such       
subparagraph shall be applied in the    
same manner as if each trade or business
 of such employer were a corporation or 
partnership4  7#d7 ,applicable employee 
remuneration ,for purposes of this      

subsection1 the term applicable employee
 remuneration has the meaning given such
 term by subsection 7m77#d71 determined 
without regard to subparagraph 7,b7     
thereof4  7#e7 ,controlled groups ,for  
purposes of this subsection1 all persons
 treated as a single employer under     
subsection 7b71 7c71 7m71 or 7o7 of     
section #dad shall be treated as one    
employer4  7#f7 ,coordination ,rules    
similar to the rules of subparagraphs   
7,d7 and 7,e7 of subsection 7m77#d7     
shall apply for purposes of this        
subsection4  7#g7 ,authority to address 
abuse ,the ,secretary shall have the    
authority to address any abuses by      
employers under this subsection1        
including1 but not limited to1 a        
reduction in employee compensation or   
benefits in conjunction with the payment
 of qualified profit-sharing            
distributions4  4  7b7 ,effective date  
,the amendments made by this section    
shall apply to taxable years beginning  
after the date of the enactment of this 

,act4