terest in such trust which passes or has passed
from the decedent to such surviving spouse.
‘‘(B) DEFINITIONS.—For purposes of sub-
paragraph (A)—
‘‘(i) CHARITABLE BENEFICIARY.—The
term ‘charitable beneficiary’ means any
beneficiary which is an organization de-
scribed in section 170(c).
‘‘(ii) ESOP BENEFICIARY.—The term
‘ESOP beneficiary’ means any beneficiary
which is an employee stock ownership plan
(as defined in section 4975(e)(7)) that
holds a remainder interest in qualified em-
ployer securities (as defined in section
664(d)(3)) to be transferred to such plan
in a qualified gratuitous transfer (as de-
fined in section 664(d)(3)).
‘‘(iii) QUALIFIED
CHARITABLE
RE-
MAINDER
TRUST.—The term ‘qualified
charitable remainder trust’ means a chari-
table remainder annuity trust or a chari-
table remainder unitrust (described in sec-
tion 664).’’
(10) Section 4947(b) of such Code is amended
by inserting after paragraph (3) the following new
paragraph:
‘‘(4) SECTION 507.—The provisions of section
507(a) shall not apply to a trust which is described
in subsection (a)(2) by reason of a distribution of
qualified employer securities (as defined in section
664(d)(3)) to an employee stock ownership plan (as
defined in section 4975(e)(7)) in a qualified gratu-
itous transfer (as defined by section 664(d)(3)).’’
(11) The last sentence of section 4975(e)(7) of
such Code is amended by inserting ‘‘and section
664(d)(3)’’ after ‘‘section 409(n)’’
(12) Subsection (a) of section 4978 of such
Code is amended by inserting ‘‘or acquired any
qualified employer securities in a qualified gratu-
itous transfer to which section 664(d)(3) applied’’
after ‘‘section 1042 applied’’.
(13) Paragraph (2) of section 4978(b) of such
Code is amended—
(A) by inserting ‘‘or acquired in the quali-
fied gratuitous transfer to which section
664(d)(3) applied’’ after ‘‘section 1042 ap-
plied’’, and
(B) by inserting ‘‘or to which section
664(d)(3) applied’’ after ‘‘section 1042 applied’’
in subparagraph (C) thereof.
(14) Subsection (c) of section 4978 of such
Code is amended by striking ‘‘written statement’’
and all that follows and inserting ‘‘written statement
described in section 664(d)(3)(A)(vi) or in section
1042(b)(3) (as the case may be).’’
(15) Paragraph (2) of section 4978(e) of such
Code is amended by striking the period and insert-
ing ‘‘; except that such section shall be applied with-
out regard to subparagraph (B) thereof for purposes
of applying this section and section 4979A with re-
spect to securities acquired in a qualified gratuitous
transfer (as defined in section 664(d)(3)(A)).’’
(16) Subsection (a) of section 4979A of such
Code is amended to read as follows:
‘‘(a) IMPOSITION OF TAX.—If—
‘‘(1) there is a prohibited allocation of qualified
securities by any employee stock ownership plan or
eligible worker-owned cooperative, or
‘‘(2) there is an allocation described in section
663(d)(3)(C)(i),
there is hereby imposed a tax on such allocation equal to
50 percent of the amount involved.’’
(17) Subsection (c) of section 4979A of such
Code is amended to read as follows:
‘‘(c) LIABILITY FOR TAX.—The tax imposed by this
section shall be paid by—
‘‘(1) the employer sponsoring such plan, or
‘‘(2) the eligible worker-owned cooperative,
which made the written statement described in section
664(d)(3)(A)(vi) or in section 1042(b)(3)(B) (as the case
may be).’’
(18) Section 4979A of such Code is amended
by redesignating subsection (d) as subsection (e) and
by inserting after subsection (c) the following new
subsection:
‘‘(d) SPECIAL STATUTE OF LIMITATIONS FOR TAX
ATTRIBUTABLE TO CERTAIN ALLOCATIONS.—The statu-
tory period for the assessment of any tax imposed by this
section on an allocation described in subsection (a)(2) of
qualified employer securities shall not expire before the
date which is 3 years from the later of—
‘‘(1) the 1st allocation of such securities in con-
nection with a qualified gratuitous transfer (as de-
fined in section 664(d)(3)(A)), or
‘‘(2) the date on which the Secretary is notified
of the allocation described in subsection (a)(2).’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to transfers made by trusts to, or
for the use of, an employee stock ownership plan after the
date of the enactment of this Act.
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