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Reduction of Excess Business Holding Accrual Act
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.
Summary
This bill amends the Internal Revenue Code to modify how private foundations calculate excess business holdings for tax purposes when a business purchases stock from an employee stock ownership plan (ESOP). For stock purchased on or after January 1, 2020, from an ESOP and held as treasury stock, cancelled, or retired by the business, that stock is treated as outstanding voting stock for purposes of the excess business holdings tax, provided permitted holdings do not exceed 49 percent. The provision does not apply during the first 10 years after a plan is established. The amendment is effective for taxable years ending after enactment and for stock purchases beginning after December 31, 2019.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
Money behind the sponsor
Top reported contributors to W. Gregory Steube’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- CHENEY BROTHERS $7,800
- NEXTGEN MANAGEMENT $6,600
- STEPHENS, INC. $6,600
- NEPTUNE WELLNESS SOLUTIONS $6,600
- COOLTODAY $6,600
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for W. Gregory Steube → · Outside spending →
Actions (2)
- Mar 10, 2025 Referred to the House Committee on Ways and Means. · house
- Mar 10, 2025 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Text versions (1)
Bills are re-published as they move (Introduced → Reported → Engrossed → Enrolled …). Each stage below is a separate text; pick two to see what changed. Data from Congress.gov.
Full text
IN THE HOUSE OF REPRESENTATIVES
March 10, 2025
Mr. Steube 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. 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) Section 4943(c)(4)(A)(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 amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act and to purchases by a business enterprise of voting stock in taxable years beginning after December 31, 2019. <all>
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