plan does not own stock meeting the re-
quirements of subparagraph (A). 
‘‘(ii) EXCEPTION.—To the extent pro-
vided by the Secretary, clause (i) shall not 
apply to any period if, within 90 days of 
the first date on which the failure occurred 
(or such longer period not in excess of 180 
days as the Secretary may prescribe), the 
plan acquires stock which results in its 
meeting the requirements of subparagraph 
(A). 
‘‘(C) STOCK.—For purposes of subpara-
graph (A), the Secretary may provide that war-
rants, options, contracts to acquire stock, con-
vertible debt interests and other similar inter-
ests be treated as stock for one or more pur-
poses under subparagraph (A). 
‘‘(c) EMPLOYEE STOCK OWNERSHIP PLAN.—For 
purposes of this section, the term ‘employee stock owner-
ship plan’ has the meaning given to such term by section 
4975(e)(7).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 of such Code 
is amended by adding at the end the following new item: 
‘‘Sec. 200. Interest on certain loans for the purchase of employer securities by 
an employee stock ownership plan sponsored by an S corpora-
tion.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to interest accrued on loans made 
after the date of the enactment of this Act. 
SEC. 5. DEPARTMENT OF THE TREASURY TECHNICAL AS-
SISTANCE OFFICE. 
(a) ESTABLISHMENT REQUIRED.—Before the end of 
the 90-day period beginning on the date of enactment of 
this Act, the Secretary of the Treasury shall establish the 
S Corporation Employee Ownership Assistance Office to 
foster increased employee ownership of S corporations. 
(b) DUTIES OF THE OFFICE.—The S Corporation 
Employee Ownership Assistance Office shall provide— 
(1) education and outreach to inform companies 
and individuals about the possibilities and benefits of 
employee ownership of S corporations; and 
(2) technical assistance to assist S corporations 
in sponsoring employee stock ownership plans. 
SEC. 6. SMALL BUSINESS AND EMPLOYEE STOCK OWNER-
SHIP. 
(a) IN GENERAL.—The Small Business Act (15 
U.S.C. 631 et seq.) is amended— 
(1) by redesignating section 47 as section 48; 
and 
(2) by inserting after section 46 the following: 
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‘‘SEC. 47. EMPLOYEE STOCK OWNERSHIP PLANS. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘ESOP’ means an employee stock 
ownership plan, as defined in section 4975(e)(7) of 
the Internal Revenue Code of 1986; and 
‘‘(2) the term ‘ESOP business concern’ means 
a business concern that was a small business con-
cern eligible for a loan, preference, or other program 
under this Act before the date on which more than 
49 percent of the business concern was acquired by 
an ESOP. 
‘‘(b) CONTINUED
ELIGIBILITY.—In determining 
whether an ESOP business concern qualifies as a small 
business concern for purposes of a loan, preference, or 
other program under this Act, each ESOP participant 
shall be treated as directly owning his or her proportionate 
share of the stock in the ESOP business concern owned 
by the ESOP.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1 of the first cal-
endar year beginning after the date of the enactment of 
this Act. 
Æ 
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