H.R. 4739

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4739 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 4739

To amend the Internal Revenue Code of 1986 to provide a reduced rate of 
tax for corporations that maintain a plan for distributing equity to 
employees, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

July 23, 2025

Mr. Suozzi (for himself, Mr. Kelly of Pennsylvania, Mr. Thompson of 
California, Mr. Fitzpatrick, Mr. Larson of Connecticut, Ms. 
Malliotakis, Mr. Panetta, Ms. Tenney, Ms. Sewell, Mr. Smucker, and Mr. 
Horsford) 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 provide a reduced rate of 
tax for corporations that maintain a plan for distributing equity to 
employees, 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. SHORT TITLE.

This Act may be cited as the ``Share Holder Allocation for Rewards 
to Employees Plan Act'' or as the ``SHARE Plan Act''.

SEC. 2. REDUCED RATE OF TAX FOR CORPORATIONS THAT MAINTAIN A PLAN FOR 
DISTRIBUTING EQUITY TO EMPLOYEES.

(a) In General.--Part II of subchapter A of chapter 1 of the 
Internal Revenue Code of 1986 is amended by redesignating section 12 as 
section 13 and by inserting after section 11 the following new new 
section:

``SEC. 12. REDUCED RATE OF TAX FOR CORPORATIONS MAINTAINING SHARE 
PLANS.

``(a) In General.--In the case of any corporation which is a SHARE 
corporation for any taxable year, the rate of tax under section 11(b) 
shall be 3 percentage points less than the rate of tax otherwise in 
effect under such section. The preceding sentence shall not apply to 
any SHARE corporation for any taxable year, 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 (c)(1)(A) (determined as 
of the date of issue of such stock) with respect to such corporation.
``(b) SHARE Corporation.--For purposes of this section--
``(1) In general.--The term `SHARE corporation' means, with 
respect to any taxable year, any corporation--
``(A) which has an average of 500 or more full-time 
employees resident in the United States during such 
taxable year,
``(B) which (as of the close of such taxable year) 
is domiciled in the United States,
``(C) which demonstrates to the satisfaction of the 
Secretary that such corporation (as of the close of 
such taxable year) has--
``(i) a SHARE ratio of not less than 5 
percent, or
``(ii) 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 1 percent of the aggregate 
outstanding shares of common stock of such 
corporation (other than shares held by such 
corporation), and
``(D) in the case of any corporation the common 
stock of which is not (as of the close of such taxable 
year) regularly traded on an established securities 
market, which demonstrates to the satisfaction of the 
Secretary that such corporation has--
``(i) conducted (as of the close of such 
taxable year) a valid market valuation of such 
corporation, and
``(ii) 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 stock.
``(2) Safe harbor for elective limitation on amount of 
stock granted to each employee.--
``(A) In general.--A corporation shall not be 
treated as failing to meet the requirement of paragraph 
(1)(C) 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 $250,000 (determined on the 
basis of the fair market value of each share on the 
date of issuance of such share).
``(B) Adjustment.--In the case of any taxable year 
beginning after December 31, 2025, the Secretary shall 
annually adjust the $250,000 amount specified in 
subparagraph (A) to take into account national private 
sector wage growth (determined with respect to a base 
year of 2024).
``(c) SHARE Ratio.--For purposes of this section--
``(1) In general.--The term `SHARE ratio' means, with 
respect to any corporation for any taxable year, the ratio 
(expressed as a percentage) of--
``(A) 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 year, 
divided by
``(B) the aggregate outstanding shares of common 
stock of such corporation (other than shares held by 
such corporation).
``(2) Treatment of certain grants before establishment of 
share plan.--If such corporation demonstrates to the 
satisfaction of the Secretary that, during the 10 years 
preceding the date of the enactment of this section, such 
corporation made grants of common stock to eligible employees 
of such corporation which were not in exchange for compensation 
(other than service as an employee), such stock shall be taken 
into account under paragraph (1)(A).
``(3) Treatment of convertible stock.--In the case of any 
class of stock of any corporation which may be converted to 
common stock, such stock shall be taken into account as common 
stock under paragraphs (1)(B) and (2) on a fully diluted basis.
``(4) Exclusion of incentive equity.--
``(A) In general.--Incentive equity shall not be 
taken into account under subparagraph (A) or (B) of 
paragraph (1) (including any stock which would 
otherwise be so taken into account by reason of 
paragraph (2) or (3)).
``(B) Incentive equity.--For purposes of this 
paragraph, the term `incentive equity' means any 
performance-based restricted stock granted to an 
employee of the corporation, any stock acquired 
pursuant to a performance-based incentive stock option 
granted to an employee of the corporation, or any 
similar grant of performance-based stock or convertible 
equity.
``(5) Treatment of forfeited stock.--In the case of any 
stock which is forfeited (by reason of a failure to vest or 
otherwise), such stock shall not be taken into account under 
paragraph (1) after the second calendar year following the 
calendar year in which such stock is so forfeited.
``(d) SHARE Plan.--For purposes of this section--
``(1) In general.--The term `SHARE plan' means, with 
respect to any corporation, a plan which provides for making 
periodic distributions of common stock of such corporation to 
each participating employee of such corporation (determined as 
the date of each such periodic distribution).
``(2) Participating employees.--
``(A) In general.--The term `participating 
employee' means, with respect to any corporation, any 
eligible employee of such corporation who is treated as 
a participating employee under the terms of the plan.
``(B) 80-percent requirement.--A plan shall not be 
treated as a SHARE plan unless, with respect to each 
periodic distribution made under such plan, the lowest 
compensated 80 percent of eligible employees of such 
corporation are participating employees with respect to 
such distribution.
``(3) Eligible employee.--The term `eligible employee' 
means, with respect to any corporation, any full-time employee 
who is based in the United States and who does not receive 
$250,000 or more in annual cash compensation from such 
corporation (determined without regard to SHARE plan stock). 
The $250,000 amount specified in the preceding sentence shall 
be adjusted as provided in subsection (b)(2)(B).
``(4) Common stock.--
``(A) In general.--The term `common stock' means, 
with respect to any corporation, stock which has the 
same economic and voting rights as the most widely held 
(determined without regard to any stock issued under 
the SHARE plan) common stock of such corporation which 
has both economic and voting rights.
``(B) Substitution of index-based mutual funds or 
etfs.--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 
(A) 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 stock, determined as of the date that 
such shares of the index-based mutual fund or exchange 
traded fund are distributed to the employee.
``(5) Distribution requirements.--
``(A) In general.--A plan shall not be treated as a 
SHARE plan unless the distributions made under such 
plan--
``(i) are made without compensation (other 
than service as an employee),
``(ii) except as provided in subparagraph 
(B), are made in equal amounts to each 
participating employee (determined in the 
aggregate with respect to any calendar year and 
properly adjusted with respect any employee not 
employed at all times during such calendar 
year),
``(iii) vest in the employee after such 
period of employment of the employee by the 
distributing corporation as may be specified in 
such plan, except that the period so 
specified--
``(I) may not exceed 5 years and 
the employer may elect whether to treat 
periods of employment occurring before 
the establishment of the plan as 
counting toward such period, and
``(II) shall be treated as 
satisfied upon retirement, termination 
of employment without cause, or change 
in control of the corporation, and
``(iv) may be sold or transferred without 
restriction once vested.
``(B) Adjustments for period of service.--The 
requirement of subparagraph (A)(ii) shall be treated as 
met if such requirement is met when applied separately 
to groups of participating employees divided (under the 
terms of the corporation's SHARE plan) on the basis of 
the period for which such employees have been employed 
by the distributing corporation.
``(e) 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 corporations.
``(f) Deduction for SHARE Plan Stock Distributions.--SHARE 
corporations shall be allowed a deduction equal to the fair market 
value (determined as of distribution) of stock distributed pursuant to 
a SHARE plan during the taxable year.
``(g) Corporate Right To Implement SHARE Plan.--Notwithstanding any 
other provision of Federal, State, or local law, a corporation shall 
not be prevented or enjoined from, or subject to any monetary or other 
penalty or damages for, establishing, maintaining, or making 
distributions of stock pursuant to, a SHARE plan.
``(h) Aggregation Rules.--In the case of any controlled group 
(within the meaning of section 1563(a)), 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 group, 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 plans.''.
(b) Clerical Amendment.--The table of sections for part II of 
subchapter A of chapter 1 of the Internal Revenue Code of 1986 is 
amended by redesignating the item relating to section 12 as an item 
relating to section 13 and by inserting after the item relating to 
section 11 the following new item:

``Sec. 12. Reduced rate of tax for corporations maintaining SHARE 
plans.''.
(c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning more than 1 year after the date of the 
enactment of this Act.

SEC. 3. DISTRIBUTIONS OF STOCK ISSUED UNDER SHARE PLANS EXCLUDED FROM 
GROSS INCOME.

(a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139I the following new section:

``SEC. 139J. SHARE PLAN DISTRIBUTIONS.

``(a) In General.--Gross income shall not include any SHARE plan 
stock received by an employee under a SHARE plan.
``(b) Definitions Related to SHARE Plans.--For purposes of this 
section--
``(1) SHARE plan.--The term `SHARE plan' has the meaning 
given such term in section 12.
``(2) SHARE plan stock.--The term `SHARE plan stock' means, 
with respect to any employee, stock received by such employee 
under a SHARE plan.''.
(b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to section 139I the 
following new item:

``Sec. 139J. SHARE plan distributions.''.
(c) Effective Date.--The amendments made by this section shall 
apply to stock received after the date of the enactment of this Act.
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