February 6, 2009, 12:00 am ET - Amendment SA 468 proposed by Senator Wyden to Amendment SA 98.
February 6, 2009, 12:00 am ET - Amendment SA 468 agreed to in Senate by Voice Vote.
Full Text of this Amendment
lie on the table; as follows:
At the end of title I of division B, insert the following:
SEC. 1903. TREATMENT OF EXCESSIVE BONUSES BY TARP RECIPIENTS.
(a) In General.--If, before the date of enactment of this Act, the preferred stock of a financial institution was purchased by the Government using funds provided under the Troubled Asset Relief Program established pursuant to the Emergency Economic Stabilization Act of 2008, then, notwithstanding any otherwise applicable restriction on the redeemability of such preferred stock, such financial institution shall redeem an amount of such preferred stock equal to the aggregate amount of
all excessive bonuses paid or payable to all covered individuals.
(b) Timing.--Each financial institution described in subsection (a) shall comply with the requirements of subsection (a)--
(1) not later than 120 days after the date of enactment of this Act, with respect to excessive bonuses (or portions thereof) paid before the date of enactment of this Act; and
(2) not later than the day before an excessive bonus (or portion thereof) is paid, with respect to any excessive bonus (or portion thereof) paid on or after the date of enactment of this Act.
(c) Definitions.--As used in this section, the following definitions shall apply:
(1) EXCESSIVE BONUS.--
(A) IN GENERAL.--The term ``excessive bonus'' means the portion of the applicable bonus payments made to a covered individual in excess of $100,000.
(B) APPLICABLE BONUS PAYMENTS.--
(i) IN GENERAL.--The term ``applicable bonus payment'' means any bonus payment to a covered individual--
(I) which is paid or payable by reason of services performed by such individual in a taxable year of the financial institution (or any member of a controlled group described in subparagraph (D)) ending in 2008, and
(II) the amount of which was first communicated to such individual during the period beginning on January 1, 2008, and ending January 31, 2009, or was based on a resolution of the board of directors of such institution that was adopted before the end of such taxable year.
(ii) CERTAIN PAYMENTS AND CONDITIONS DISREGARDED.--In determining whether a bonus payment is described in clause (i)(I)--
(I) a bonus payment that relates to services performed in any taxable year before the taxable year described in such clause and that is wholly or partially contingent on the performance of services in the taxable year so described shall be disregarded, and
(II) any condition on a bonus payment for services performed in the taxable year so described that the employee perform services in taxable years after the taxable year so described shall be disregarded.
(C) BONUS PAYMENT.--The term ``bonus payment'' means any payment which--
(i) is a discretionary payment to a covered individual by a financial institution (or any member of a controlled group described in subparagraph (D)) for services rendered,
(ii) is in addition to any amount payable to such individual for services performed by such individual at a regular hourly, daily, weekly, monthly, or similar periodic rate, and
(iii) is paid or payable in cash or other property other than--
(I) stock in such institution or member, or
(II) an interest in a troubled asset (within the meaning of the Emergency Economic Stabilization Act of 2008) held directly or indirectly by such institution or member.
Such term does not include payments to an employee as commissions, welfare and fringe benefits, or expense reimbursements.
(D) COVERED INDIVIDUAL.--The term ``covered individual'' means, with respect to any financial institution, any director or officer or other employee of such financial institution or of any member of a controlled group of corporations (within the meaning of section 52(a) of the Internal Revenue Code of 1986) that includes such financial institution.
(2) FINANCIAL INSTITUTION.--The term ``financial institution'' has the same meaning as in section 3 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5252).
(d) Excise Tax on TARP Companies That Fail to Redeem Certain Securities From United States.--
(1) IN GENERAL.--Chapter 46 of the Internal Revenue Code of 1986 (relating to excise tax on golden parachute payments) is amended by adding at the end the following new section:
``SEC. 4999A. FAILURE TO REDEEM CERTAIN SECURITIES FROM UNITED STATES.
``(a) Imposition of Tax.--There is hereby imposed a tax on any financial institution which--
``(1) is required to redeem an amount of its preferred stock from the United States pursuant to section 1903(a) of the American Recovery and Reinvestment Tax Act of 2009, and
``(2) fails to redeem all or any portion of such amount within the period prescribed for such redemption.
``(b) Amount of Tax.--The amount of the tax imposed by subsection (a) shall be equal to 35 percent of the amount which the financial institution failed to redeem within the time prescribed under 1903(b) of the American Recovery and Reinvestment Tax Act of 2009.
``(c) Administrative Provisions.--
``(1) IN GENERAL.--For purposes of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A for the taxable year in which a deduction is allowed for any excessive bonus with respect to which the redemption described in subsection (a)(1) is required to be made.
``(2) EXTENSION OF TIME.--The due date for payment of tax imposed by this section shall in no event be earlier than the 150th day following the date of the enactment of this section.''.
(2) CONFORMING AMENDMENTS.--
(A) The heading for chapter 46 of such Code are amended to read as follows:
``Chapter 46--Taxes on Certain Excessive Remuneration
``Sec..4999..Golden parachute payments.
``Sec..4999A..Failure to redeem certain securities from United States.''.
(B) The item relating to chapter 46 in the table of chapters for subtitle D of such Code is amended to read as follows:
``Chapter 46. Taxes on excessive remuneration.''.
(3) EFFECTIVE DATE.--The amendments made by this subsection shall apply to failures described in section 4999A(a)(2) of the Internal Revenue Code of 1986 occurring after the date of the enactment of this Act.
(As printed in the Congressional Record for the Senate on Feb 5, 2009.)