[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8435 Introduced in House (IH)]
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118th CONGRESS
2d Session
H. R. 8435
To amend the Internal Revenue Code of 1986 to treat certain price
protection payments as eligible rollover distributions, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 16, 2024
Mr. Kelly of Pennsylvania (for himself and Mr. Blumenauer) introduced
the following bill; which was referred to the Committee on Ways and
Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to treat certain price
protection payments as eligible rollover distributions, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. PRICE PROTECTION PAYMENTS TREATED AS ELIGIBLE ROLLOVER
DISTRIBUTIONS.
(a) In General.--Section 402(c)(4) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``For purposes of'' and inserting--
``(A) In general.--For purposes of'',
(2) by striking ``If all or any portion'' and all that
follows through the period and inserting--
``(B) Special rule for 2020.--If all or any
portion'', and
(3) by adding at the end the following new subparagraphs:
``(C) Certain price protection payments treated as
eligible rollover distributions.--
``(i) Distributions prior to 2025.--In the
case of a price protection payment made after
December 12, 2019, with respect to a plan year
ending before January 1, 2025, such payment
will be treated as an eligible rollover
distribution if such payment is made pursuant
to a price protection agreement which provides
a payment to a participant (or beneficiary of
such participant) who separates from service
with an employer due to retirement, death or
disability.
``(ii) Distributions after 2024.--In the
case of a price protection payment made with
respect to a plan year ending after December
31, 2024, such payment will be treated as an
eligible rollover distribution if such payment
is made pursuant to a price protection
agreement which--
``(I) is offered as part of an
employee stock ownership plan,
``(II) covers any separation of
service of a plan participant
regardless of the reason for such
separation, and
``(III) pays price protection
payments upon commencement of plan
distributions under section
409(o)(1)(A)(i).
``(D) Definitions.--For purposes of this
paragraph--
``(i) Price protection agreement.--The term
`price protection agreement' means an agreement
between an employer maintaining an employee
stock ownership plan and the trustee of such
plan, pursuant to which a participant or
beneficiary receives a price protection payment
for stock distributions from such plan
following an exempt loan taken on by the
employer.
``(ii) Price protection payment.--The term
`price protection payment' means an amount paid
to a plan participant or beneficiary pursuant
to a price protection agreement if such
agreement provides that price protection
payments will be made--
``(I) within a specified period of
time, not to exceed the shorter of 5
years or the life of an exempt loan,
following the purchase of employer
securities with such loan, and
``(II) in an amount equal to the
excess, if any, of--
``(aa) the fair market
value of the shares of employer
securities at the time of the
distribution determined without
regard to such exempt loan,
over
``(bb) the fair market
value of the employer
securities at the time of
distribution.
``(iii) Employee stock ownership plan.--The
term `employee stock ownership plan' has the
meaning given such term in section 4975(e)(7).
``(iv) Exempt loan.--The term `exempt loan'
means a loan described in section
4975(d)(3).''.
(b) Price Protection Agreements Not Considered Discriminatory.--
Section 401(a)(5) of such Code is amended by adding at the end the
following new subparagraph:
``(H) Price protection agreements.--A plan shall
not be considered discriminatory within the meaning of
paragraph (4) merely because the plan is subject to a
price protection agreement (as defined in section
402(c)(4)(D)(ii)) which favors highly compensated
employees.''.
(c) Price Protection Payments Not Taken Into Account for Purposes
of Deduction Limits.--Section 404 of such Code is amended by adding at
the end the following new subsection:
``(p) Price Protection Payments Not Taken Into Account for Purposes
of Deduction Limits.--Price protection payments (as defined in section
402(c)(4)(D)(i)) shall not be subject to any limitation contained in
subsection (a)(3).''.
(d) Effective Dates.--
(1) The amendments made by subsection (a) shall apply to
amounts paid after December 12, 2019.
(2) The amendments made by subsections (b) and (c) shall
apply to amounts paid in plan years ending after December 31,
2024.
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