Title: 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.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to exclude certain purchases of employee-owned stock from being considered as outstanding voting stock for the purpose of the tax on excess business holdings of a private foundation in a business enterprise.
The bill applies to any voting stock that is: (1) not readily tradable on an established securities market; (2) purchased by the business enterprise on or after January 1, 2005, from a stock bonus or profit sharing plan in which employees of the business enterprise participate, in connection with a distribution from the plan; and (3) held by the business enterprise as treasury stock, cancelled, or retired.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2293 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 2293

 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 HOUSE OF REPRESENTATIVES

                              May 2, 2017

Mr. Holding (for himself and Mr. Levin) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 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. 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 clause:
                            ``(v) Certain purchases of employee-owned 
                        stock disregarded.--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, 2005, 
                                from a stock bonus or profit sharing 
                                plan described in section 401(a) 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.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years ending after the date of enactment of 
        this Act and to purchases by a business enterprise of voting 
        stock in taxable years beginning before, on, or after the date 
        of enactment of this Act.
            (2) Special rule for grandfathered foundations in case of 
        decrease in ownership by reason of pre-enactment purchases.--
        Section 4943(c)(4)(A)(ii) of such Code shall not apply with 
        respect to any decrease in the percentage of holdings in a 
        business enterprise by reason of section 4943(c)(4)(A)(v) of 
        such Code (as added by this Act).
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