Q: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
SECTION 1. SHORT TITLE.

This Act may be cited as the ''Employee Ownership Act of 1999''.

SEC. 2. OWNERSHIP POLICY FOR THE UNITED STATES.

(a) Findings.--The Congress finds that--
(1) there is considerable evidence that employee-owned and
employee-controlled corporations are more productive and
provide more wealth to their employees than corporations not so
owned, and
(2) the workplace experience of employee-owned and
employee-controlled corporations is proven to foster greater
appreciation of the economic system of the United States that
relies on ownership of private property and capitalism.
(b) Policy.--It is the policy of the United States that by the year
2010, 30 percent of all United States corporations are owned and
controlled by employees of the corporations.

SEC. 3. TAX INCENTIVES RELATING TO EMPLOYEE-OWNED AND EMPLOYEE-
CONTROLLED CORPORATIONS.

(a) Trust of Employee-Owned and Employee-Controlled Corporation
Exempt From Taxation.--
(1) In general.--Section 501(c) of the Internal Revenue
Code of 1986 (relating to list of exempt organizations) is
amended by adding at the end the following new paragraph:
''(28)(A) employee-owned and employee-controlled
corporation trust.
''(B) For purposes of subparagraph (A), the term 'employee-
owned and employee-controlled corporation trust' means a trust
which has as its primary assets the employer securities (within
the meaning of section 409(l)) of an employee-owned and
employee-controlled corporation.
(2) Employee-owned and employee-controlled corporation
defined.--Subsection (a) of section 7701 of such Code (relating
to definitions) is amended by adding at the end the following
new paragraph:
''(47) Employee-owned and employee-controlled
corporation.--The term 'employee-owned and employee-controlled
corporation' means a corporation in which--
''(A) more than 50 percent of the voting stock of
such corporation is held by a trust for the benefit of
the employees of that corporation,
''(B) in all matters requiring the vote of stock,
including the election of the board of directors of the
corporation, the trustee of such trust is obligated to
vote the stock held in trust and allocated to
participants in the trust in the manner in which the
participants direct, on the basis of 1-employee 1-vote,
and to vote any stock not so allocated as if it were so
allocated,
''(C) at least 25 employees of such corporation are
participants in and beneficiaries of such trust,
''(D) a minimum of 90 percent of the employees who
work at least 1,000 hours annually for such corporation
are participants in such trust, and
''(E) the trustee administers such trust for the
benefit of the employees of such corporation and
complies with all requirements of this title relating
to employee stock ownership plans (as defined in
section 4975(e)(7)) pertaining to independent appraisal
of shares not readily tradable and distribution of
those shares.''.
(b) No Tax on Corporate Income of Employee-Owned and Employee-
Controlled Corporation.--Subsection (a) of section 11 of such Code
(relating to corporations in general) is amended by inserting before
the period at the end the following: ''(other than any employee-owned
and employee-controlled corporation)''.
(c) Exclusion of Income From Sale of Employee-Owned and Employee-
Controlled Corporation Stock by Employee Owner.--
(1) In general.--Part III of subchapter B of chapter 1 of
such Code (relating to items specifically excluded from gross
income) is amended by redesignating section 139 as section 140
and by inserting after section 138 the following new section:

''SEC. 139. INCOME FROM EMPLOYEE OWNER SALE OF EMPLOYER SECURITIES
DISTRIBUTED FROM EMPLOYEE-OWNED AND EMPLOYEE-CONTROLLED
CORPORATION TRUST.

''(a) In General.--In the case of an individual, gross income shall
not include any proceeds from the qualified sale of employer
securities.
''(b) Qualified Sale of Employer Securities.--The term 'qualified
sale of employer securities' means the sale of employer securities (as
defined in section 409(l)) which were distributed to a participant in
the employee-owned and employee-controlled corporation trust to--
''(1) an employee of the employee-owned and employee-
controlled corporation which issued such securities,
''(2) such corporation, or
''(3) such trust.''.
(2) Clerical amendment.--The table of sections for part III
of subchapter B of chapter 1 of such Code is amended by
striking the item relating to section 139 and inserting after
the item relating to section 138 the following new items:

''Sec. 139. Income from employee owner
sale of employer securities
distributed from employee-owned
and employee-controlled
corporation trust.
''Sec. 140. Cross references to other
Acts.''.
(d) Receipt of Stock in an Employee Owned and Controlled
Corporation During 3-Year Transition Period.--Section 83 of such Code
(relating to property transferred in connection with performance of
services) is amended by adding at the end the following new subsection:
''(i) Receipt of Stock in an Employee Owned and Controlled
Corporation During 3-Year Transition Period.--
''(1) In general.--In the case of an employee, this section
shall not apply to the transfer in lieu of compensation of
employer securities in an employer owned and controlled
corporation during the 3-year period beginning on the effective
date of the election of a corporation to become an employee
owned and controlled corporation.
''(2) Exception.--If, on the day after the end of the 3-
year period referred to in paragraph (1), such corporation is
not an employee owned and controlled corporation, paragraph (1)
shall not apply and the following sum shall be included in the
gross income of such employee:
''(A) an amount equal to the fair market value of
all of such securities at the time of transfer
(determined without regard to any restriction other
than a restriction which by its terms will never lapse)
to the employee in lieu of compensation for such
period, plus
''(B) an amount equal to 10 percent of the amount
determined under subparagraph (A).''.
(e) No Tax on Gain on Sales or Transfers to Employee-Owned and
Employee-Controlled Corporation Trust.--
(1) In general.--Part III of subchapter O of chapter 1 of
such Code (relating to common nontaxable exchanges) is amended
by adding at the end the following new section:

''SEC. 1046. SALE OF SECURITIES TO EMPLOYEE-OWNED AND EMPLOYEE-
CONTROLLED CORPORATION TRUST.

''(a) Nonrecognition of Gain.--If the taxpayer elects the
application of this section, in the case of the sale or transfer of
employer securities (as defined in section 409(l)) to an employee-owned
and employee-controlled corporation trust, gain on such sale or
transfer shall not be recognized if the requirements of subsection (b)
are met.
''(b) Requirements.--
''(1) In general.--The requirements of this subsection are
that--
''(A) the employee-owned and employee-controlled
corporation trust acquiring such securities from the
taxpayer agrees--
''(i) to hold such securities for the 3-
year period beginning on the date of such
transfer or sale, and
''(ii) to notify the taxpayer upon the
transfer of such securities before the end of
such period, and
''(B) the taxpayer agrees to the provisions of
subsection (b).
''(2) Exceptions.--Paragraph (1) shall not apply--
''(A) in a case where such securities are
securities of an employee-owned and employee-controlled
corporation which are distributed within such 3-year
period to an employee of such corporation, and
''(B) in the case of the sale or transfer of stock
of an employee-owned and employee-controlled
corporation in connection with the sale or
reorganization of such corporation, if such sale or
reorganization is approved by the employees of such
corporation in a vote held on a 1-employee 1-vote
basis.
''(c) Recapture of Tax.--If, during any year within the 3-year
period referred to in subsection (b)(1), securities subject to
subsection (a) are sold or transferred in a manner that does not meet
the requirements of subsection (b), then gain on the sale or transfer
described in subsection (a) shall be recognized for the year in which
such requirements are not met.''.
(2) Clerical amendment.--The table of sections for part III
of subchapter O of chapter 1 of such Code is amended by adding
at the end the following new item:

''Sec. 1046. Sale of securities to
employee-owned and employee-
controlled corporation
trust.''.
(f) Credit For Transfer of Stock From Estate to Employee-Owned and
Employee-Controlled Corporation.--
(1) In general.--Part II of subchapter A of chapter 11 of
such Code (relating to credits against tax) is amended by
redesignating section 2016 as section 2017 and by inserting
after section 2015 the following new section:

''SEC. 2016. CREDIT FOR TRANSFER OF EMPLOYEE SECURITIES FROM ESTATE TO
EMPLOYEE-OWNED AND EMPLOYEE-CONTROLLED CORPORATION TRUST.

''(a) General Rule.--The tax imposed by section 2001 shall be
credited with the amount of employer securities considered to have been
acquired from or to have passed from the decedent to an employee-owned
and employee-controlled corporation trust.
''(b) Limitation.--Such credit may not exceed the tax imposed by
section 2001, reduced under this part (other than by this section).
''(c) Value of Stock Not Readily Tradable.--No credit shall be
allowed under subsection (a) in the case of employer securities which
are not readily tradable on an established securities market unless the
value of such employer securities is established by an independent
appraiser. For purposes of the preceding sentence, the term
'independent appraiser' means any appraiser meeting requirements
similar to the requirements of the regulations prescribed under section
170(a)(1).
''(d) Definitions.--For purposes of subsection (a)--
''(1) Acquired from or passed from a decedent.--Employer
securities shall be considered to have been acquired from or to
have passed from a decedent if the basis of such property in
the hands of the employee-owned and employee-controlled
corporation trust is determined under section 1014 by reference
to paragraph (1), (2), (4), or (9) of subsection (b) of such
section.
''(2) Employer securities.--The term 'employer securities'
has the meaning given such term by section 409(l)), except that
such term shall not include any security which is not voting
common stock.''.
(2) Clerical amendment.--The table of sections for part II
of subchapter A of chapter 11 of such Code (relating to credits
against tax) is amended by striking the item relating to
section 2016 and adding at the end the following new items:

''Sec. 2016. Credit for transfer of
employee securities from estate
to employee-owned and employee-
controlled corporation trust.
''Sec. 2017. Recovery of taxes claimed as
credit.''.
(g) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after the date of the enactment of this Act.
(2) Credit for transfer of stock from estate to employee-
owned and employee-controlled corporation.--The amendments made
subsection (f) shall apply to estates of decedents dying after
the date of the enactment of this Act.

SEC. 4. STUDY OF GOVERNMENT POLICIES AFFECTING EMPLOYEE-OWNED AND
EMPLOYEE-CONTROLLED CORPORATIONS.

The Comptroller General of the United States shall--
(1) conduct a study of all Federal Government regulations
and policies that might impact the creation and operation of an
employee-owned and employee-controlled corporation as defined
in section 7701(a)(47) of the Internal Revenue Code of 1986,
(2) identify those regulations and policies that are
barriers to employee ownership and control of such a
corporation, and
(3) not later than one year after the date of the enactment
of this Act, submit a report on the findings of such study,
together with such recommendations as the Comptroller General
determines appropriate, to the Congress.

SEC. 5. PRESIDENTIAL COMMISSION ON EMPLOYEE OWNERSHIP.

(a) Establishment.--Not later than one year after the date of the
enactment of this Act, the President shall establish a commission to be
known as the ''Presidential Commission on Employee Ownership''
(hereafter in this section referred to as the ''Commission'').
(b) Duties and Report.--The Commission shall--
(1) conduct a study concerning all issues that affect
ownership of businesses in the United States, with a primary
focus on the issues that affect employee ownership of such
businesses, and
(2) not later than two years after the date of its
establishment, submit a final report to the President and the
Congress which includes the findings and recommendations of the
Commission.
(c) Membership.--The Commission shall be composed of 15 members
appointed by the President as follows:
(1) Three individuals, each of whom is an employee of a
corporation that has at least 50 percent of its voting stock in
a trust for the benefit of employees and who is not an officer
or senior manager of that corporation.
(2) Three individuals, each of whom is an employee of a
corporation that has at least 50 percent of its voting stock in
a trust for the benefit of employees and who is an officer or
senior manager of that corporation.
(3) Three individuals, each of whom is a professor employed
by an institution of higher learning.
(4) Three individuals, each of whom is employed by a not-
for-profit entity that has as its primary mission issues
arising from employee ownership of businesses.
(5) The Secretary of Labor, or his designee, the Secretary
of the Treasury, or his designee, and the Director of the
Office of Management and Budget, or his designee.
(d) Staff.--The Commission shall have such number of staff as the
President shall determine, except that such staff shall include not
less than five full-time employees.
(e) Gifts and Bequests.--The Commission may accept, use, and
dispose of gifts or bequests or services or personal property for the
purpose of aiding or facilitating the work of the Commission. Gifts or
bequests of money and proceeds from sales of other property received as
gifts or bequests shall be deposited in the Treasury and shall be
available for disbursement upon order of the Commission.
A:
(Sec. 3) Amends the Internal Revenue Code to provide for tax-exempt employee-owned and employee-controlled corporation (EOECC) trusts whose primary assets consist of the employer securities of an EOECC in which: (1) more than 50 percent of the voting stock is held by a trust for the benefit of the corporation's employees; (2) in all matters requiring the vote of stock, including the election of the corporate board of directors, the trustee of such trust is obligated to vote the stock held in trust and allocated to participants in the trust in the manner in which the participants direct, on the basis of one-employee one-vote (and vote any stock not so allocated as if it were so allocated); (3) at least 25 employees of such corporation are participants in and beneficiaries of such trust; (4) a minimum of 90 percent of the employees who work at least 1,000 hours annually for such corporation are participants in such trust; and (5) the trustee administers the trust for the benefit of the corporation's employees, complying with all Code requirements for employee stock ownership plans which pertain to independent appraisal of shares not readily tradable, and distribution of those shares.
Declares that: (1) there shall be no tax on the corporate income of an EOECC; and (2) the gross income of an employee owner shall not include any proceeds from the qualified sale of EOECC securities.
Exempts from inclusion in gross income of property transferred in connection with performance of services any transfer (in lieu of compensation) of EOECC securities during the three years following a corporation's election to become an EOECC.
Mandates nonrecognition of gain in the case of the sale or transfer of EOECC securities to an EOECC trust.
Establishes a credit against the estate tax for the amount of EOECC securities considered to have been acquired from or to have passed from a decedent to an EOECC trust.
(Sec. 4) Directs the Comptroller General to study and report to Congress on Federal regulations and policies affecting EOECCs.
(Sec. 5) Directs the President to establish a Presidential Commission on Employee Ownership to study and report on all issues that affect ownership of businesses in the United States, with a primary focus on the issues that affect employee ownership of such businesses.