119-s1416

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1416 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1416

 To amend the Internal Revenue Code of 1986 for purposes of the tax on 
private foundation excess business holdings to treat as outstanding any 
 employee-owned stock purchased by a business enterprise pursuant to 
 certain employee stock ownership retirement plans.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 April 10, 2025

 Mr. Scott of Florida introduced the following bill; which was read 
 twice and referred to the Committee on Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 for purposes of the tax on 
private foundation excess business holdings to treat as outstanding any 
 employee-owned stock purchased by a business enterprise pursuant to 
 certain employee stock ownership retirement plans.

 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 ``Reduction of Excess Business Holding 
Accrual Act''.

SEC. 2. CERTAIN PURCHASES OF EMPLOYEE-OWNED STOCK DISREGARDED FOR 
 PURPOSES OF FOUNDATION TAX ON EXCESS BUSINESS HOLDINGS.

    (a) In General.--

Section 4943
            (c) (4)
        (A) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new clauses:
 ``
            (v) For purposes of clause
            (i) , subparagraph
            (D) , 
 and paragraph

    (2) , any voting stock which--
 ``
            (I) is not readily tradable on an 
 established securities market,
 ``
            (II) is purchased by the business 
 enterprise on or after January 1, 2020, from an 
 employee stock ownership plan (as defined in 
 

section 4975

    (e)

    (7) ) in which employees of such 
 business enterprise participate, in connection 
 with a distribution from such plan, and
 ``
            (III) is held by the business enterprise 
 as treasury stock, cancelled, or retired,
 shall be treated as outstanding voting stock, but only 
 to the extent so treating such stock would not result 
 in permitted holdings exceeding 49 percent (determined 
 without regard to this clause). The preceding sentence 
 shall not apply with respect to the purchase of stock 
 from a plan during the 10-year period beginning on the 
 date the plan is established.
 ``
            (vi) Clause
            (ii) shall not apply with respect to 
 any decrease in the percentage of holdings in a 
 business enterprise by reason of the application of 
 clause
            (v) .''.

    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after the date of the enactment of this Act.
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