,i  #aaith ,,congress  #ast ,session    
,h4 ,r4 #dgci  ,,in ,,the ,,house ,,of  
,,representatives  ,july #bc1 #bjbe,mr4 
,suozzi 7for himself1 ,mr4 ,kelly of    
,pennsylvania1 ,mr4 ,thompson of        
,california1 ,mr4 ,fitzpatrick1 ,mr4    
,larson of ,connecticut1 ,ms4           
,malliotakis1 ,mr4 ,panetta1 ,ms4       
,tenney1 ,ms4 ,sewell1 ,mr4 ,smucker1   
and ,mr4 ,horsford7 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 provide a reduced    
rate of tax for corporations that       
maintain a plan for distributing equity 
to employees1 and for other purposes4   
#a4 ,short title ,this ,act may be cited
 as the ,share ,holder ,allocation for  
,rewards to ,employees ,plan ,act or as 
the ,,share ,plan ,act4  #b4 ,reduced   
rate of tax for corporations that       
maintain a plan for distributing equity 
to employees  7a7 ,in general ,part ,,ii
 of subchapter ,a of chapter #a of the  

,internal ,revenue ,code of #aihf is    
amended by redesignating section #ab as 
section #ac and by inserting after      
section #aa the following new new       
section3  #ab4 ,reduced rate of tax for 
corporations maintaining ,,share plans  
7a7 ,in general ,in the case of any     
corporation which is a ,,share          
corporation for any taxable year1 the   
rate of tax under section #aa7;b7 shall 
be #c percentage points less than the   
rate of tax otherwise in effect under   
such section4 ,the preceding sentence   
shall not apply to any ,,share          
corporation for any taxable year1 if the
 application of such sentence to such   
taxable year would cause the aggregate  
income tax reductions for such taxable  
year and all preceding taxable years of 
such corporation by reason of this      
section to exceed the aggregate market  
value of stock described in subsection  
7c77#a77;,a7 7determined as of the date 
of issue of such stock7 with respect to 
such corporation4  7b7 ,,share          

corporation ,for purposes of this       
section-- 7#a7 ,in general ,the term    
,,share corporation means1 with respect 
to any taxable year1 any corporation--  
7,a7 which has an average of #ejj or    
more full-time employees resident in the
 ,united ,states during such taxable    
year1  7,b7 which 7as of the close of   
such taxable year7 is domiciled in the  
,united ,states1  7,c7 which            
demonstrates to the satisfaction of the 
,secretary that such corporation 7as of 
the close of such taxable year7 has--   
7i7 a ,,share ratio of not less than #e 
percent1 or  7ii7 made distributions of 
common stock of such corporation to     
employees of such corporation pursuant  
to a ,,share plan during such taxable   
year which in the aggregate equals or   
exceeds #a percent of the aggregate     
outstanding shares of common stock of   
such corporation 7other than shares held
 by such corporation71 and  7,d7 in the 
case of any corporation the common stock
 of which is not 7as of the close of    

such taxable year7 regularly traded on  
an established securities market1 which 
demonstrates to the satisfaction of the 
,secretary that such corporation has--  
7i7 conducted 7as of the close of such  
taxable year7 a valid market valuation  
of such corporation1 and  7ii7 provided 
employees with adequate opportunities   
during such taxable year to liquidate   
the employee's holdings of such         
corporation's stock at the fair market  
value of such stock4  7#b7 ,safe harbor 
for elective limitation on amount of    
stock granted to each employee  7,a7 ,in
 general ,a corporation shall not be    
treated as failing to meet the          
requirement of paragraph 7#a77;,c7      
solely because the ,,share plan of such 
corporation provides that the amount of 
common stock of such corporation        
distributed under such plan to each     
employee shall not exceed #bej1jjj      
7determined on the basis of the fair    
market value of each share on the date  
of issuance of such share74  7,b7       

,adjustment ,in the case of any taxable 
year beginning after ,december #ca1     
#bjbe1 the ,secretary shall annually    
adjust the #bej1jjj amount specified in 
subparagraph 7,a7 to take into account  
national private sector wage growth     
7determined with respect to a base year 
of #bjbd74  7c7 ,,share ratio ,for      
purposes of this section-- 7#a7 ,in     
general ,the term ,,share ratio means1  
with respect to any corporation for any 
taxable year1 the ratio 7expressed as a 
percentage7 of-- 7,a7 the aggregate     
shares of common stock of such          
corporation which have been granted to  
participating employees of such         
corporation pursuant to a ,,share plan  
during such taxable year or any prior   
taxable year1 divided by  7,b7 the      
aggregate outstanding shares of common  
stock of such corporation 7other than   
shares held by such corporation74  7#b7 
,treatment of certain grants before     
establishment of ,,share plan ,if such  
corporation demonstrates to the         

satisfaction of the ,secretary that1    
during the #aj years preceding the date 
of the enactment of this section1 such  
corporation made grants of common stock 
to eligible employees of such           
corporation which were not in exchange  
for compensation 7other than service as 
an employee71 such stock shall be taken 
into account under paragraph 7#a77;,a74 
7#c7 ,treatment of convertible stock ,in
 the case of any class of stock of any  
corporation which may be converted to   
common stock1 such stock shall be taken 
into account as common stock under      
paragraphs 7#a77;,b7 and 7#b7 on a fully
 diluted basis4  7#d7 ,exclusion of     
incentive equity  7,a7 ,in general      
,incentive equity shall not be taken    
into account under subparagraph 7,a7 or 
7,b7 of paragraph 7#a7 7including any   
stock which would otherwise be so taken 
into account by reason of paragraph 7#b7
 or 7#c774  7,b7 ,incentive equity ,for 
purposes of this paragraph1 the term    
incentive equity means any              

performance-based restricted stock      
granted to an employee of the           
corporation1 any stock acquired pursuant
 to a performance-based incentive stock 
option granted to an employee of the    
corporation1 or any similar grant of    
performance-based stock or convertible  
equity4  7#e7 ,treatment of forfeited   
stock ,in the case of any stock which is
 forfeited 7by reason of a failure to   
vest or otherwise71 such stock shall not
 be taken into account under paragraph  
7#a7 after the second calendar year     
following the calendar year in which    
such stock is so forfeited4  7d7 ,,share
 plan ,for purposes of this section--   
7#a7 ,in general ,the term ,,share plan 
means1 with respect to any corporation1 
a plan which provides for making        
periodic distributions of common stock  
of such corporation to each             
participating employee of such          
corporation 7determined as the date of  
each such periodic distribution74  7#b7 
,participating employees  7,a7 ,in      

general ,the term participating employee
 means1 with respect to any corporation1
 any eligible employee of such          
corporation who is treated as a         
participating employee under the terms  
of the plan4  7,b7 #hj-percent          
requirement ,a plan shall not be treated
 as a ,,share plan unless1 with respect 
to each periodic distribution made under
 such plan1 the lowest compensated #hj  
percent of eligible employees of such   
corporation are participating employees 
with respect to such distribution4  7#c7
 ,eligible employee ,the term eligible  
employee means1 with respect to any     
corporation1 any full-time employee who 
is based in the ,united ,states and who 
does not receive #bej1jjj or more in    
annual cash compensation from such      
corporation 7determined without regard  
to ,,share plan stock74 ,the #bej1jjj   
amount specified in the preceding       
sentence shall be adjusted as provided  
in subsection 7b77#b77;,b74  7#d7       
,common stock  7,a7 ,in general ,the    

term common stock means1 with respect to
 any corporation1 stock which has the   
same economic and voting rights as the  
most widely held 7determined without    
regard to any stock issued under the    
,,share plan7 common stock of such      
corporation which has both economic and 
voting rights4  7,b7 ,substitution of   
index-based mutual funds or ,e,t,fs     
,shares of an index-based mutual fund or
 exchange traded fund shall be treated  
for purposes of this section in the same
 manner as shares of common stock issued
 by the corporation referred to in      
subparagraph 7,a7 in the same ratio that
 the fair market value of such shares of
 the index-based mutual fund or exchange
 traded fund bears to the fair market   
value of such shares of common stock1   
determined as of the date that such     
shares of the index-based mutual fund or
 exchange traded fund are distributed to
 the employee4  7#e7 ,distribution      
requirements  7,a7 ,in general ,a plan  
shall not be treated as a ,,share plan  

unless the distributions made under such
 plan-- 7i7 are made without            
compensation 7other than service as an  
employee71  7ii7 except as provided in  
subparagraph 7,b71 are made in equal    
amounts to each participating employee  
7determined in the aggregate with       
respect to any calendar year and        
properly adjusted with respect any      
employee not employed at all times      
during such calendar year71  7iii7 vest 
in the employee after such period of    
employment of the employee by the       
distributing corporation as may be      
specified in such plan1 except that the 
period so specified-- 7,i7 may not      
exceed #e years and the employer may    
elect whether to treat periods of       
employment occurring before the         
establishment of the plan as counting   
toward such period1 and  7,,ii7 shall be
 treated as satisfied upon retirement1  
termination of employment without cause1
 or change in control of the            
corporation1 and  7iv7 may be sold or   

transferred without restriction once    
vested4  7,b7 ,adjustments for period of
 service ,the requirement of            
subparagraph 7,a77ii7 shall be treated  
as met if such requirement is met when  
applied separately to groups of         
participating employees divided 7under  
the terms of the corporation's ,,share  
plan7 on the basis of the period for    
which such employees have been employed 
by the distributing corporation4  7e7   
,publication by ,treasury ,the          
,secretary shall make publicly available
 with respect to each taxable year a    
list of corporations which the          
,secretary has identified as ,,share    
corporations4  7f7 ,deduction for       
,,share plan stock distributions ,,share
 corporations shall be allowed a        
deduction equal to the fair market value
 7determined as of distribution7 of     
stock distributed pursuant to a ,,share 
plan during the taxable year4  7g7      
,corporate right ,to implement ,,share  
plan ,notwithstanding any other         

provision of ,federal1 ,state1 or local 
law1 a corporation shall not be         
prevented or enjoined from1 or subject  
to any monetary or other penalty or     
damages for1 establishing1 maintaining1 
or making distributions of stock        
pursuant to1 a ,,share plan4  7h7       
,aggregation rules ,in the case of any  
controlled group 7within the meaning of 
section #aefc7;a771 the ,secretary may  
issue such regulations or other guidance
 as the ,secretary determines to be     
appropriate for purposes of applying the
 provisions of this section to such     
group1 including regulations or other   
guidance that coordinates or            
consolidates the ,,share plans of the   
corporations in such group or allows or 
requires employees of any corporation in
 such group to receive stock of another 
corporation in such group pursuant to   
such ,,share plans4  4  7b7 ,clerical   
amendment ,the table of sections for    
part ,,ii of subchapter ,a of chapter #a
 of the ,internal ,revenue ,code of     

#aihf is amended by redesignating the   
item relating to section #ab as an item 
relating to section #ac and by inserting
 after the item relating to section #aa 
the following new item3  ,sec4 #ab4     
,reduced rate of tax for corporations   
maintaining ,,share plans4  4  7c7      
,effective date ,the amendments made by 
this section shall apply to taxable     
years beginning more than #a year after 
the date of the enactment of this ,act4 
#c4 ,distributions of stock issued under
 ,,share plans excluded from gross      
income  7a7 ,in general ,part ,,iii of  
subchapter ,b of chapter #a of the      
,internal ,revenue ,code of #aihf is    
amended by inserting after section      
#aci;,i the following new section3      
#aci;,j4 ,,share plan distributions  7a7
 ,in general ,gross income shall not    
include any ,,share plan stock received 
by an employee under a ,,share plan4    
7b7 ,definitions related to ,,share     
plans ,for purposes of this section--   
7#a7 ,,share plan ,the term ,,share plan

 has the meaning given such term in     
section #ab4  7#b7 ,,share plan stock   
,the term ,,share plan stock means1 with
 respect to any employee1 stock received
 by such employee under a ,,share plan4 
4  7b7 ,clerical amendment ,the table of
 sections for part ,,iii of subchapter  
,b of chapter #a of the ,internal       
,revenue ,code of #aihf is amended by   
inserting after the item relating to    
section #aci;,i the following new item3 
,sec4 #aci;,j4 ,,share plan             
distributions4  4  7c7 ,effective date  
,the amendments made by this section    
shall apply to stock received after the 
date of the enactment of this ,act4