| 1 | 1 | | II |
|---|
| 2 | 2 | | 119THCONGRESS |
|---|
| 3 | 3 | | 1 |
|---|
| 4 | 4 | | STSESSION S. 1416 |
|---|
| 5 | 5 | | To amend the Internal Revenue Code of 1986 for purposes of the tax |
|---|
| 6 | 6 | | on private foundation excess business holdings to treat as outstanding |
|---|
| 7 | 7 | | any employee-owned stock purchased by a business enterprise pursuant |
|---|
| 8 | 8 | | to certain employee stock ownership retirement plans. |
|---|
| 9 | 9 | | IN THE SENATE OF THE UNITED STATES |
|---|
| 10 | 10 | | APRIL10, 2025 |
|---|
| 11 | 11 | | Mr. S |
|---|
| 12 | 12 | | COTTof Florida introduced the following bill; which was read twice and |
|---|
| 13 | 13 | | referred to the Committee on Finance |
|---|
| 14 | 14 | | A BILL |
|---|
| 15 | 15 | | To amend the Internal Revenue Code of 1986 for purposes |
|---|
| 16 | 16 | | of the tax on private foundation excess business holdings |
|---|
| 17 | 17 | | to treat as outstanding any employee-owned stock pur- |
|---|
| 18 | 18 | | chased by a business enterprise pursuant to certain em- |
|---|
| 19 | 19 | | ployee stock ownership retirement plans. |
|---|
| 20 | 20 | | Be it enacted by the Senate and House of Representa-1 |
|---|
| 21 | 21 | | tives of the United States of America in Congress assembled, 2 |
|---|
| 22 | 22 | | SECTION 1. SHORT TITLE. 3 |
|---|
| 23 | 23 | | This Act may be cited as the ‘‘Reduction of Excess 4 |
|---|
| 24 | 24 | | Business Holding Accrual Act’’. 5 |
|---|
| 25 | 25 | | VerDate Sep 11 2014 05:11 Apr 29, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1416.IS S1416 |
|---|
| 26 | 26 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 2 |
|---|
| 27 | 27 | | •S 1416 IS |
|---|
| 28 | 28 | | SEC. 2. CERTAIN PURCHASES OF EMPLOYEE-OWNED STOCK 1 |
|---|
| 29 | 29 | | DISREGARDED FOR PURPOSES OF FOUNDA-2 |
|---|
| 30 | 30 | | TION TAX ON EXCESS BUSINESS HOLDINGS. 3 |
|---|
| 31 | 31 | | (a) I |
|---|
| 32 | 32 | | NGENERAL.—Section 4943(c)(4)(A) of the In-4 |
|---|
| 33 | 33 | | ternal Revenue Code of 1986 is amended by adding at the 5 |
|---|
| 34 | 34 | | end the following new clauses: 6 |
|---|
| 35 | 35 | | ‘‘(v) For purposes of clause (i), subpara-7 |
|---|
| 36 | 36 | | graph (D), and paragraph (2), any voting stock 8 |
|---|
| 37 | 37 | | which— 9 |
|---|
| 38 | 38 | | ‘‘(I) is not readily tradable on an es-10 |
|---|
| 39 | 39 | | tablished securities market, 11 |
|---|
| 40 | 40 | | ‘‘(II) is purchased by the business en-12 |
|---|
| 41 | 41 | | terprise on or after January 1, 2020, from 13 |
|---|
| 42 | 42 | | an employee stock ownership plan (as de-14 |
|---|
| 43 | 43 | | fined in section 4975(e)(7)) in which em-15 |
|---|
| 44 | 44 | | ployees of such business enterprise partici-16 |
|---|
| 45 | 45 | | pate, in connection with a distribution 17 |
|---|
| 46 | 46 | | from such plan, and 18 |
|---|
| 47 | 47 | | ‘‘(III) is held by the business enter-19 |
|---|
| 48 | 48 | | prise as treasury stock, cancelled, or re-20 |
|---|
| 49 | 49 | | tired, 21 |
|---|
| 50 | 50 | | shall be treated as outstanding voting stock, but 22 |
|---|
| 51 | 51 | | only to the extent so treating such stock would 23 |
|---|
| 52 | 52 | | not result in permitted holdings exceeding 49 24 |
|---|
| 53 | 53 | | percent (determined without regard to this 25 |
|---|
| 54 | 54 | | clause). The preceding sentence shall not apply 26 |
|---|
| 55 | 55 | | VerDate Sep 11 2014 05:11 Apr 29, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1416.IS S1416 |
|---|
| 56 | 56 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB 3 |
|---|
| 57 | 57 | | •S 1416 IS |
|---|
| 58 | 58 | | with respect to the purchase of stock from a 1 |
|---|
| 59 | 59 | | plan during the 10-year period beginning on the 2 |
|---|
| 60 | 60 | | date the plan is established. 3 |
|---|
| 61 | 61 | | ‘‘(vi) Clause (ii) shall not apply with re-4 |
|---|
| 62 | 62 | | spect to any decrease in the percentage of hold-5 |
|---|
| 63 | 63 | | ings in a business enterprise by reason of the 6 |
|---|
| 64 | 64 | | application of clause (v).’’. 7 |
|---|
| 65 | 65 | | (b) E |
|---|
| 66 | 66 | | FFECTIVEDATE.—The amendment made by 8 |
|---|
| 67 | 67 | | this section shall apply to taxable years ending after the 9 |
|---|
| 68 | 68 | | date of the enactment of this Act. 10 |
|---|
| 69 | 69 | | Æ |
|---|
| 70 | 70 | | VerDate Sep 11 2014 05:11 Apr 29, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S1416.IS S1416 |
|---|
| 71 | 71 | | kjohnson on DSK7ZCZBW3PROD with $$_JOB |
|---|