| 1 | 1 | | I |
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| 2 | 2 | | 119THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION H. R. 2014 |
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| 5 | 5 | | To amend the Internal Revenue Code of 1986 for purposes of the tax |
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| 6 | 6 | | on private foundation excess business holdings to treat as outstanding |
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| 7 | 7 | | any employee-owned stock purchased by a business enterprise pursuant |
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| 8 | 8 | | to certain employee stock ownership retirement plans. |
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| 9 | 9 | | IN THE HOUSE OF REPRESENTATIVES |
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| 10 | 10 | | MARCH10, 2025 |
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| 11 | 11 | | Mr. S |
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| 12 | 12 | | TEUBEintroduced the following bill; which was referred to the |
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| 13 | 13 | | Committee on Ways and Means |
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| 14 | 14 | | A BILL |
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| 15 | 15 | | To amend the Internal Revenue Code of 1986 for purposes |
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| 16 | 16 | | of the tax on private foundation excess business holdings |
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| 17 | 17 | | to treat as outstanding any employee-owned stock pur- |
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| 18 | 18 | | chased by a business enterprise pursuant to certain em- |
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| 19 | 19 | | ployee stock ownership retirement plans. |
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| 20 | 20 | | Be it enacted by the Senate and House of Representa-1 |
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| 21 | 21 | | tives of the United States of America in Congress assembled, 2 |
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| 22 | 22 | | SECTION 1. SHORT TITLE. 3 |
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| 23 | 23 | | This Act may be cited as the ‘‘Reduction of Excess 4 |
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| 24 | 24 | | Business Holding Accrual Act’’. 5 |
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| 25 | 25 | | VerDate Sep 11 2014 22:06 Mar 21, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2014.IH H2014 |
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| 26 | 26 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 2 |
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| 27 | 27 | | •HR 2014 IH |
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| 28 | 28 | | SEC. 2. CERTAIN PURCHASES OF EMPLOYEE-OWNED STOCK 1 |
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| 29 | 29 | | DISREGARDED FOR PURPOSES OF FOUNDA-2 |
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| 30 | 30 | | TION TAX ON EXCESS BUSINESS HOLDINGS. 3 |
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| 31 | 31 | | (a) I |
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| 32 | 32 | | NGENERAL.—Section 4943(c)(4)(A) of the In-4 |
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| 33 | 33 | | ternal Revenue Code of 1986 is amended by adding at the 5 |
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| 34 | 34 | | end the following new clauses: 6 |
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| 35 | 35 | | ‘‘(v) For purposes of clause (i), subpara-7 |
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| 36 | 36 | | graph (D), and paragraph (2), any voting stock 8 |
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| 37 | 37 | | which— 9 |
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| 38 | 38 | | ‘‘(I) is not readily tradable on an es-10 |
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| 39 | 39 | | tablished securities market, 11 |
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| 40 | 40 | | ‘‘(II) is purchased by the business en-12 |
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| 41 | 41 | | terprise on or after January 1, 2020, from 13 |
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| 42 | 42 | | an employee stock ownership plan (as de-14 |
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| 43 | 43 | | fined in section 4975(e)(7)) in which em-15 |
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| 44 | 44 | | ployees of such business enterprise partici-16 |
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| 45 | 45 | | pate, in connection with a distribution 17 |
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| 46 | 46 | | from such plan, and 18 |
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| 47 | 47 | | ‘‘(III) is held by the business enter-19 |
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| 48 | 48 | | prise as treasury stock, cancelled, or re-20 |
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| 49 | 49 | | tired, 21 |
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| 50 | 50 | | shall be treated as outstanding voting stock, but 22 |
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| 51 | 51 | | only to the extent so treating such stock would 23 |
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| 52 | 52 | | not result in permitted holdings exceeding 49 24 |
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| 53 | 53 | | percent (determined without regard to this 25 |
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| 54 | 54 | | clause). The preceding sentence shall not apply 26 |
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| 55 | 55 | | VerDate Sep 11 2014 22:06 Mar 21, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2014.IH H2014 |
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| 56 | 56 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 3 |
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| 57 | 57 | | •HR 2014 IH |
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| 58 | 58 | | with respect to the purchase of stock from a 1 |
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| 59 | 59 | | plan during the 10-year period beginning on the 2 |
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| 60 | 60 | | date the plan is established. 3 |
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| 61 | 61 | | ‘‘(vi) Section 4943(c)(4)(A)(ii) shall not 4 |
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| 62 | 62 | | apply with respect to any decrease in the per-5 |
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| 63 | 63 | | centage of holdings in a business enterprise by 6 |
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| 64 | 64 | | reason of the application of clause (v).’’. 7 |
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| 65 | 65 | | (b) E |
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| 66 | 66 | | FFECTIVEDATE.—The amendments made by 8 |
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| 67 | 67 | | this section shall apply to taxable years ending after the 9 |
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| 68 | 68 | | date of the enactment of this Act and to purchases by 10 |
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| 69 | 69 | | a business enterprise of voting stock in taxable years be-11 |
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| 70 | 70 | | ginning after December 31, 2019. 12 |
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| 71 | 71 | | Æ |
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| 72 | 72 | | VerDate Sep 11 2014 22:06 Mar 21, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\H2014.IH H2014 |
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| 73 | 73 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB |
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