,,ii #aae? ,,congress #a/ ,session ,s4 #aghh ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,septemb] #aa1 #bjag ,ms4 ,baldw9 7= h]self & ,mrs4 ,gillibr&7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to enc\rage companies to exp& employee own]%ip1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,work] ,own$ ,weal? ,act4 #b4 ,def9ition ,9 ?is ,act1 ! t]m ,,esop means an employee /ock own]%ip plan1 z def9$ 9 section #dige7;e77#g7 ( ! ,int]nal ,rev5ue ,code ( #aihf4 #c4 ,employee ,own]%ip ,revolv+ ,loan funds 7a7 ,9 g5]al ,! ,secret>y ( ! ,treasury %all e/abli% 9 ea* field (fice 9 ! ,dep>tm5t ( ! ,treasury an ,employee ,own]%ip ,revolv+ ,loan ,fund t makes-- 7#a7 l[-int]e/ loans to bus9ess own]s seek+ to e/abli% employee own]%ip 9 ! bus9ess2 & 7#b7 loan gu>antees to private l5d]s :o make loans to ,e,s,o,ps4 7b7 ,/aff 7#a7 ,9 g5]al ,! ,secret>y ( ! ,treasury may1 )\t reg>d to ! civil s]vice laws 7includ+ regulations71 appo9t & t]m9ate su* p]sonnel z may be necess>y to enable ! ,secret>y to c>ry out ?is section4 7#b7 ,comp5sation ,! ,secret>y ( ! ,treasury may fix ! comp5sation ( p]sonnel )\t reg>d to *apt] #ea & sub*apt] ,,iii ( *apt] #ec ( title #e1 ,unit$ ,/ates ,code1 relat+ to classification ( positions & ,g5]al ,s*$ule pay rates1 except t ! rate ( pay = p]sonnel may n exce$ ! rate payable = level ,v ( ! ,executive ,s*$ule "u section #ecaf ( t title4 7c7 ,au?orization ( appropriations ,!re is au?oriz$ to be appropriat$ #a1jjj1jjj1jjj to c>ry out ?is section4 #d4 ,exclusion ( int]e/ on loans us$ to acquire employ] securities = employee /ock own]%ip plans 7a7 ,9 g5]al ,"p ,,iii ( sub*apt] ,b ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] section #acb ! foll[+ new section3 #acc4 ,int]e/ on c]ta9 loans us$ to acquire employ] securities 7a7 ,all[ance ( exclusion 7#a7 ,9 g5]al ,except z provid$ 9 p>agraph 7#b71 gross income does n include ! applicable p]c5tage ( ! int]e/ receiv$ by-- 7,a7 a bank 7)9 ! mean+ ( section #eha71 7,b7 an insurance company to :i* sub*apt] ,l applies1 7,c7 a corporation actively engag$ 9 ! bus9ess ( l5d+ money1 or 7,d7 a regulat$ inve/m5t company 7z def9$ 9 section #hea71 ) respect to a securities acquisition loan4 7#b7 ,annual limitation ,! aggregate am\nt ( int]e/ :i* may be exclud$ by a taxpay] "u p>agraph 7#a7 = any taxable ye> %all n exce$ #bj1jjj1jjj4 7#c7 ,applicable p]c5tage ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,except z provid$ 9 subp>agraph 7,b71 ! applicable p]c5tage ( a taxpay] ) respect to any securities acquisition loan is #ej p]c5t4 7,b7 ,l[] p]c5tages = l>g] f9ancial in/itutions ,if1 = any taxable ye> 9 :i* a taxpay] ent]s into a securities acquisition loan-- 7i7 ! av]age adju/$ bases ( all assets ( ! taxpay] are equal to or great] ?an #b1jjj1jjj1jjj b less ?an or equal to #aj1jjj1jjj1jjj1 ! taxpay]'s applicable p]c5tage ) respect to int]e/ receiv$ by ! taxpay] on su* loan 7includ+ any ref9anc+ ( su* loan treat$ z a securities acquisition loan7 = su* taxable ye> & any succe$+ taxable ye> %all be #be p]c5t1 & 7ii7 ! av]age adju/$ bases ( all assets ( ! taxpay] are great] ?an #aj1jjj1jjj1jjj1 ! taxpay]'s applicable p]c5tage ) respect to int]e/ receiv$ by ! taxpay] on su* loan 7includ+ any ref9anc+ ( su* loan treat$ z a securities acquisition loan7 = su* taxable ye> & any succe$+ taxable ye> %all be #aj p]c5t4 7#d7 ,controll$ gr\p ( corporations ,all memb]s ( a controll$ gr\p ( corporations 7z def9$ 9 section #dji7l77#d77 %all be treat$ z #a taxpay] = purposes ( apply+ p>agraphs 7#b7 & 7#c74 7b7 ,securities acquisition loan 7#a7 ,9 g5]al ,= purposes ( ?is section1 ! t]m securities acquisition loan means-- 7,a7 any loan to a corporation or to an employee /ock own]%ip plan to ! ext5t t ! proce$s are us$ to acquire employ] securities = ! plan1 or 7,b7 any loan to a corporation to ! ext5t t1 )9 #cj days1 employ] securities are transf]r$ to ! plan 9 an am\nt equal to ! proce$s ( su* loan & su* securities are allocable to acc\nts ( plan p>ticipants )9 #a ye> ( ! date ( su* loan4 ,= purposes ( ?is p>agraph1 ! t]m employ] securities has ! mean+ giv5 su* t]m by section #dji7l74 ,! t]m securities acquisition loan %all n include a loan ) a t]m great] ?an #ae ye>s1 except t 9 ! case ( a securities acquisition loan :i* is a ref9anc+ loan describ$ 9 p>agraph 7#e71 su* t]m may n ext5d beyond ! la/ day ( ! orig9al securities acquisition loan :i* su* loan is ref9anc+4 7#b7 ,loans betwe5 relat$ p]sons ,! t]m securities acquisition loan %all n include-- 7,a7 any loan made betwe5 corporations :i* are memb]s ( ! same controll$ gr\p ( corporations1 or 7,b7 any loan made betwe5 an employee /ock own]%ip plan & any p]son t is-- 7i7 ! employ] ( any employees :o are cov]$ by ! plan1 or 7ii7 a memb] ( a controll$ gr\p ( corporations :i* includes su* employ]4 ,= purposes ( ?is p>agraph1 subp>agraphs 7,a7 & 7,b7 %all n apply to any loan :i*1 b = su* subp>agraphs1 w\ld be a securities acquisition loan if su* loan 0 n orig9at$ by ! employ] ( any employees :o are cov]$ by ! plan or by any memb] ( ! controll$ gr\p ( corporations :i* includes su* employ]1 except t ?is section %all n apply to any int]e/ receiv$ on su* loan dur+ su* "t z su* loan is held by su* employ] 7or any memb] ( su* controll$ gr\p74 7#c7 ,t]ms applicable to c]ta9 securities acquisition loans ,a loan to a corporation %all n fail to be treat$ z a securities acquisition loan m]ely because ! proce$s ( su* loan are l5t to an employee /ock own]%ip plan sponsor$ by su* corporation 7or by any memb] ( ! controll$ gr\p ( corporations :i* includes su* corporation7 if su* loan includes-- 7,a7 repaym5t t]ms :i* are sub/antially simil> to ! t]ms ( ! loan ( su* corporation f a l5d] describ$ 9 subsection 7a71 or 7,b7 repaym5t t]ms provid+ = m rapid repaym5t ( pr9cipal or int]e/ on su* loan1 b only if allocations "u ! plan attributable to su* repaym5t d n discrim9ate 9 favor ( highly comp5sat$ employees 7)9 ! mean+ ( section #dad7q774 7#d7 ,controll$ gr\p ( corporations ,= purposes ( ?is subsection1 ! t]m controll$ gr\p ( corporations has ! mean+ giv5 su* t]m by section #dji7l77#d74 7#e7 ,treatm5t ( ref9anc+s ,! t]m securities acquisition loan %all include any loan :i*-- 7,a7 is 7or is "p ( a s]ies ( loans7 us$ to ref9ance a loan describ$ 9 subp>agraph 7,a7 or 7,b7 ( p>agraph 7#a71 & 7,b7 meets ! requirem5ts ( p>agraphs 7#b7 & 7#c74 7#f7 ,plan requirem5ts 7,a7 ,9 g5]al ,a loan %all n be treat$ z a securities acquisition loan = purposes ( ?is section unless1 imm$iately aft] ! acquisition or transf] ref]r$ to 9 subp>agraph 7,a7 or 7,b7 ( p>agraph 7#a71 respectively1 ! employee /ock own]%ip plan meets ! requirem5ts ( subp>agraphs 7,b7 & 7,c74 7,b7 ,plan mu/ hold m ?an #e p]c5t ( /ock aft] acquisition or transf] ,an employee /ock own]%ip plan meets ! requirem5ts ( ?is subp>agraph if ! plan owns m ?an #e p]c5t (-- 7i7 ea* class ( out/&+ /ock ( ! corporation issu+ ! employ] securities1 or 7ii7 ! total value ( all out/&+ /ock ( ! corporation4 7,c7 ,plan mu/ cov] at lea/ #ej p]c5t ( nonhighly comp5sat$ employees 7i7 ,9 g5]al ,an employee /ock own]%ip plan meets ! requirem5ts ( ?is subp>agraph if at lea/ #ej p]c5t ( ! employees ( ea* employ] ma9ta9+ ! plan :o are n highly comp5sat$ employees 7z def9$ 9 section #dad7q77 are p>ticipants 9 ! plan4 7ii7 ,c]ta9 employees may be exclud$ ,= purposes ( clause 7i71 an employ] may elect to exclude "u ! plan employees-- 7,i7 :o h n atta9$ ! age ( #ba be=e ! close ( a plan ye>1 7,,ii7 :o h less ?an #a ye> ( s]vice ) ! employ] z ( any day dur+ ! plan ye>1 7,,iii7 :o are cov]$ "u an agreem5t :i* ! ,secret>y ( ,labor f9ds to be a collective b>ga9+ agreem5t if !re is evid5ce t ! b5efits cov]$ "u ! employee /ock own]%ip plan 7 ! subject ( good fai? b>ga9+ betwe5 employee repres5tatives & ! employ]1 or 7,,iv7 :o are describ$ 9 section #daj7;b77#c77;,c7 7relat+ to nonresid5t ali5s work+ outside ! ,unit$ ,/ates74 7,d7 ,failure to meet requirem5ts 7i7 ,9 g5]al ,subsection 7a7 %all n apply to any int]e/ receiv$ ) respect to a securities acquisition loan :i* is allocable to any p]iod dur+ :i* ! employee /ock own]%ip plan does n meet ! requirem5ts ( subp>agraphs 7,b7 & 7,c74 7ii7 ,exception ,to ! ext5t provid$ by ! ,secret>y1 clause 7i7 %all n apply to any p]iod if1 )9 #ij days ( ! fir/ date on :i* ! failure occurr$ 7or su* long] p]iod n 9 excess ( #ahj days z ! ,secret>y may prescribe71 ! plan takes su* actions z are requir$ to meet ! requirem5ts ( subp>agraphs 7,b7 & 7,c74 7,e7 ,/ock ,= purposes ( subp>agraph 7,b7-- 7i7 ,9 g5]al ,! t]m /ock means /ock o!r ?an /ock describ$ 9 section #aejd7;a77#d74 7ii7 ,treatm5t ( c]ta9 rights ,! ,secret>y may provide t w>rants1 options1 contracts to acquire /ock1 conv]tible debt int]e/s & o!r simil> int]e/s be treat$ z /ock = #a or m purposes "u subp>agraph 7,b74 7,f7 ,aggregation rule ,= purposes ( det]m9+ :e!r ! requirem5ts ( subp>agraph 7,b7 are met1 an employee /ock own]%ip plan %all be treat$ z own+ /ock 9 ! corporation issu+ ! employ] securities :i* is held by any o!r employee /ock own]%ip plan :i* is ma9ta9$-- 7i7 ! employ] ma9ta9+ ! plan1 or 7ii7 any memb] ( a controll$ gr\p ( corporations 7)9 ! mean+ ( section #dji7l77#d77 ( :i* ! employ] describ$ 9 clause 7i7 is a memb]4 7#g7 ,vot+ rights ( employ] securities ,a loan %all n be treat$ z a securities acquisition loan = purposes ( ?is section unless-- 7,a7 ! employee /ock own]%ip plan meets ! requirem5ts ( section #dji7;e77#b7 ) respect to all employ] securities acquir$ by1 or transf]r$ to1 ! plan 9 connection ) su* loan 7)\t reg>d to :e!r or n ! employ] has a regi/ration-type class ( securities71 & 7,b7 no /ock describ$ 9 section #dji7l77#c7 is acquir$ by1 or transf]r$ to1 ! plan 9 connection ) su* loan unless-- 7i7 su* /ock has vot+ rights equival5t to ! /ock to :i* x may be conv]t$1 & 7ii7 ! requirem5ts ( subp>agraph 7,a7 are met ) respect to su* vot+ rights4 7c7 ,employee /ock own]%ip plan 7#a7 ,9 g5]al ,= purposes ( ?is section1 ! t]m employee /ock own]%ip plan has ! mean+ giv5 to su* t]m by section #dige7;e77#g74 7#b7 ,eligible work]-own$ coop]atives includ$ ,= purposes ( ?is section & sections #digh;,b1 #fjdb1 & #ghgb1 su* t]m %all also include an eligible work]-own$ coop]ative 7z def9$ 9 section #ajdb7;c774 7d7 ,application ) section #dhc & orig9al issue disc\nt rules ,9 apply+ section #dhc & subp>t ,a ( "p ,v ( sub*apt] ,p to any obligation to :i* ?is section applies1 appropriate adju/m5ts %all be made to ! applicable ,f$]al rate to take into acc\nt ! exclusion "u subsection 7a74 7e7 ,p]iod to :i* int]e/ exclusion applies 7#a7 ,9 g5]al ,9 ! case (-- 7,a7 an orig9al securities acquisition loan1 & 7,b7 any securities acquisition loan 7or s]ies ( su* loans7 us$ to ref9ance ! orig9al securities acquisition loan1 subsection 7a7 %all apply only to int]e/ accru+ dur+ ! excludable p]iod ) respect to ! orig9al securities acquisition loan4 7#b7 ,excludable p]iod ,= purposes ( ?is subsection1 ! t]m excludable p]iod means1 ) respect to any orig9al securities acquisition loan-- 7,a7 ,9 g5]al ,! #g-ye> p]iod beg9n+ on ! date ( su* loan4 7,b7 ,loans describ$ 9 subsection 7b77#a77;,a7 ,if ! t]m ( an orig9al securities acquisition loan describ$ 9 subsection 7b77#a77;,a7 is great] ?an #g ye>s1 ! t]m ( su* loan4 ,?is subp>agraph %all n apply to a loan describ$ 9 subsection 7b77#c77;,b74 7#c7 ,orig9al securities acquisition loan ,= ! purposes ( ?is subsection1 ! t]m orig9al securities acquisition loan means a securities acquisition loan describ$ 9 subp>agraph 7,a7 or 7,b7 ( subsection 7b77#a74 4 7b7 ,con=m+ am5dm5ts 7#a7 ,subp>agraph 7,b7 ( section #bia7;e77#a7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ clause 7iv7 z clause 7v7 & by ins]t+ aft] clause 7iii7 ! foll[+ new clause3 7iv7 ,special rules = obligations to :i* section #acc applies ,9 ! case ( an obligation to :i* section #acc applies1 int]e/ on su* obligation %all n be treat$ z exempt f taxation = purposes ( ?is subp>agraph4 4 7#b7 ,section #hab ( su* ,code is am5d$ by add+ at ! end ! foll[+3 7g7 ,treatm5t ( ,int]e/ ,p>tially ,tax-,exempt ,"u ,section #acc ,= purposes ( ?is section & subsections 7a7 & 7b7 ( section #hjg1 ! t]ms gross inve/m5t income & tax-exempt int]e/ %all n include any int]e/ receiv$ ) respect to a securities acquisition loan 7z def9$ 9 section #acc7;b774 ,su* int]e/ %all n be includ$ 9 life insurance gross income = purposes ( subsection 7b77#c74 4 7#c7 ,p>agraph 7#e7 ( section #heb7;b7 ( su* ,code is am5d$ by add+ at ! end ! foll[+3 7,c7 ,int]e/ on c]ta9 loans us$ to acquire employ] securities ,= purposes ( ?is section-- 7i7 ! applicable p]c5tage 7z def9$ 9 section #acc7;a77#c77 ( ! am\nt ( any loan held by a regulat$ inve/m5t company :i* qualifies z a securities acquisition loan 7z def9$ 9 section #acc7 %all be treat$ z an obligation describ$ 9 section #ajc7;a71 & 7ii7 su* applicable p]c5tage ( ! int]e/ receiv$ on su* loan %all be treat$ z int]e/ excludable f gross income "u section #ajc4 4 7#d7 ,p>agraph 7#b7 ( section #digh7;b7 ( su* ,code is am5d$ by /rik+ subp>agraphs 7,a7 & 7,b7 & all t foll[s & ins]t+3 7,a7 fir/1 f section #acc securities 7z def9$ 9 section #digh;,b7e77#b77 acquir$ dur+ ! #c-ye> p]iod end+ on ! date ( su* disposition1 beg9n+ ) ! securities fir/ s acquir$1 7,b7 second1 f section #acc securities 7z s def9$7 acquir$ be=e su* #c-ye> p]iod unless su* securities 7or proce$s f ! disposition7 h be5 allocat$ to acc\nts ( p>ticipants or b5efici>ies1 7,c7 ?ird1 f qualifi$ securities to :i* section #ajdb appli$ acquir$ dur+ ! #c-ye> p]iod end+ on ! date ( ! disposition1 beg9n+ ) ! securities fir/ s acquir$1 & 7,d7 !n f any o!r employ] securities4 ,if subsection 7d7 or section #digh;,b7d7 applies to a disposition1 ! disposition %all be treat$ z made f employ] securities 9 ! opposite ord] ( ! prec$+ s5t5ce4 4 7#e7 7,a7 ,*apt] #dc ( su* ,code is am5d$ by ins]t+ be=e section #digi ! foll[+ new section3 #digh;,b4 ,tax on disposition ( employ] securities to :i* section #acc appli$ 7a7 ,imposition ( tax ,9 ! case ( an employee /ock own]%ip plan :i* has acquir$ section #acc securities1 !re is h]eby impos$ a tax on ea* taxable ev5t 9 an am\nt equal to ! am\nt det]m9$ "u subsection 7b74 7b7 ,am\nt ( tax 7#a7 ,9 g5]al ,! am\nt ( ! tax impos$ by subsection 7a7 %all be equal to #aj p]c5t ( ! am\nt realiz$ on ! disposition to ! ext5t allocable to section #acc securities "u section #digh7;b77#b74 7#b7 ,dispositions o!r ?an sales or ex*anges ,= purposes ( p>agraph 7#a71 9 ! case ( a disposition ( employ] securities :i* is n a sale or ex*ange1 ! am\nt realiz$ on su* disposition %all be ! fair m>ket value ( su* securities at ! "t ( disposition4 7c7 ,taxable ev5t ,= purposes ( ?is section1 ! t]m taxable ev5t means any ( ! foll[+ dispositions3 7#a7 ,dispositions )9 #c ye>s ,any disposition ( any employ] securities by an employee /ock own]%ip plan )9 #c ye>s aft] su* plan acquir$ section #acc securities if-- 7,a7 ! total numb] ( employ] securities held by su* plan aft] su* disposition is less ?an ! total numb] ( employ] securities held aft] su* acquisition1 or 7,b7 except to ! ext5t provid$ 9 regulations1 ! value ( employ] securities held by su* plan aft] ! disposition is #ej p]c5t or less ( ! total value ( all employ] securities z ( ! "t ( ! disposition4 ,= purposes ( subp>agraph 7,b71 ! aggregation rule ( section #acc7;b77#f77;,d7 %all apply4 7#b7 ,/ock dispos$ ( be=e allocation ,any disposition ( section #acc securities to :i* p>agraph 7#a7 does n apply if-- 7,a7 su* disposition occurs be=e su* securities are allocat$ to acc\nts ( p>ticipants or _! b5efici>ies1 & 7,b7 ! proce$s f su* disposition are n s allocat$4 7d7 ,section n ,to apply to c]ta9 dispositions 7#a7 ,9 g5]al ,?is section %all n apply to any disposition describ$ 9 p>agraph 7#a71 7#c71 or 7#d7 ( section #digh7;d74 7#b7 ,c]ta9 reorganizations ,= purposes ( ?is section1 any ex*ange ( section #acc securities = employ] securities ( ano!r corporation 9 any reorganization describ$ 9 section #cfh7;a77#a7 %all n be treat$ z a disposition1 b ! employ] securities receiv$ %all be treat$ z section #acc securities & z hav+ be5 held by ! plan dur+ ! p]iod ! securities :i* 7 ex*ang$ 7 held4 7#c7 ,=c$ disposition occurr+ by op]ation ( /ate law ,any =c$ disposition ( section #acc securities by an employee /ock own]%ip plan occurr+ by op]ation ( a ,/ate law %all n be treat$ z a disposition4 ,?is p>agraph %all only apply to securities :i*1 at ! "t ! securities 7 acquir$ by ! plan1 7 regul>ly trad$ on an e/abli%$ securities m>ket4 7#d7 ,coord9ation ) o!r taxes ,?is section %all n apply to any disposition :i* is subject to tax "u section #digh or section #digh;,a 7z 9 effect on ! day be=e its repeal74 7e7 ,def9itions & special rules ,= purposes ( ?is section-- 7#a7 ,liability = paym5t ( taxes ,! tax impos$ by ?is section %all be paid by ! employ]4 7#b7 ,section #acc securities ,! t]m section #acc securities means employ] securities acquir$ by an employee /ock own]%ip plan 9 a transaction to :i* section #acc appli$4 7#c7 ,disposition ,! t]m disposition includes any di/ribution4 7#d7 ,ord]+ rules ,= ord]+ rules = dispositions ( employ] securities1 see section #digh7;b77#b74 4 7,b7 ,! table ( sections = *apt] #dc ( su* ,code is am5d$ by ins]t+ be=e ! item relat+ to section #digi ! foll[+ new item3 ,sec4 #digh;,b4 ,tax on disposition ( employ] securities to :i* section #acc appli$4 4 7#f7 ,subsection 7e7 ( section #fjdg ( su* ,code is am5d$ by /rik+ p>agraphs 7#a7 & 7#b7 & ins]t+ ! foll[+ new p>agraphs3 7#a7 any employ] ma9ta9+1 or ! plan adm9i/rator 7)9 ! mean+ ( section #dad7;g77 (1 an employee /ock own]%ip plan-- 7,a7 :i* acquir$ /ock 9 a transaction to :i* section #acc applies1 or 7,b7 :i* holds /ock ) respect to :i* section #djd7k7 applies to divid5ds paid on su* /ock1 7#b7 any p]son mak+ or hold+ a loan to :i* section #acc applies1 or 7#c7 bo? su* employ] or plan adm9i/rator & su* p]son1 4 7#g7 ,subsection 7f7 ( section #ghgb ( su* ,code is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#ab7 ,special rule = c]ta9 employ] security loans ,?is section %all n apply to any loan betwe5 a corporation 7or any memb] ( ! controll$ gr\p ( corporations :i* includes su* corporation7 & an employee /ock own]%ip plan describ$ 9 section #dige7;e77#g7 to ! ext5t t ! int]e/ rate on su* loan is equal to ! int]e/ rate paid on a relat$ securities acquisition loan 7z describ$ 9 section #acc7;b77 to su* corporation4 4 7#h7 ,! table ( sections = "p ,,iii ( sub*apt] ,b ( *apt] #a ( su* ,code is am5d$ by ins]t+ aft] ! item relat+ to section #acb ! foll[+ new item3 ,sec4 #acc4 ,int]e/ on c]ta9 loans us$ to acquire employ] securities4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to orig9al securities acquisition loans 7z def9$ 9 section #acc7;e77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7& loans ref9anc+ su* loans77 made aft] ! date ( ! enactm5t ( ?is ,act4 #e4 ,employee /ock own]%ip requirem5ts = use ( p]=mance exception to limitation ( d$uctibility ( executive comp5sation2 expansion ( publicly held corporation def9ition 7a7 ,limitation on use ( p]=mance exception 7#a7 ,9 g5]al ,section #afb7m7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,employee /ock own]%ip requirem5ts = use ( p]=mance exception 7,a7 ,9 g5]al ,! exception "u p>agraph 7#d77;,c7 %all n apply to any remun]ation payable by a publicly held corporation = any taxable ye> unless ! corporation has 9 effect at all times dur+ ! ye> a qualifi$ employee /ock program4 7,b7 ,qualifi$ employee /ock program ,= purposes ( ?is p>agraph1 ! t]m qualifi$ employee /ock program means1 ) respect to any corporation1 a program ( ! corporation "u :i*-- 7i7 employees ( ! corporation o!r ?an highly comp5sat$ employees 7)9 ! mean+ ( section #dad7q77 hold non=feitable rights to at lea/ #e p]c5t (-- 7,i7 ei!r ea* class ( out/&+ /ock ( ! corporation issu+ ! employ] securities or ! total value ( all out/&+ /ock ( ! corporation1 & 7,,ii7 ! vot+ rights ( ! total out/&+ vot+ %>es ( /ock ( ! corporation1 7ii7 any /ock 7or any "r ) respect to su* /ock7 tak5 into acc\nt ) respect to an employee "u clause 7i7 is provid$ to ! employee z an employ] contribution & at no co/ to ! employee1 & 7iii7 ! provid+ ( su* /ock or "r by ! corporation is n 9 lieu ( any o!r remun]ation payable to su* employee4 ,if a program includes ! grant+ at no co/ to employees ( /ock options "u :i* employees may pur*ase /ock ?r\gh ! ex]cise ( ! options1 ! co/ to ! employee ( su* pur*ase %all n be tak5 into acc\nt 9 det]m9+ :e!r ! program meets ! requirem5ts ( clause 7ii74 7,c7 ,failure to reta9 m9imum /ock int]e/ 7i7 ,9 g5]al ,not)/&+ subp>agraph 7,a71 p>agraph 7#d77;,c7 %all n apply to any remun]ation payable by a corporation ) a qualifi$ employee /ock program dur+ any p]iod employees d n own /ock meet+ ! requirem5ts ( subp>agraph 7,b77i74 7ii7 ,exception ,to ! ext5t provid$ by ! ,secret>y1 clause 7i7 %all n apply to any p]iod if1 )9 #ij days ( ! fir/ date on :i* ! failure occurr$ 7or su* long] p]iod n 9 excess ( #ahj days z ! ,secret>y may prescribe71 ! employees are giv5 /ock :i* results 9 ! program meet+ ! requirem5ts ( subp>agraph 7,b77i74 7,d7 ,/ock ,= purposes ( ?is p>agraph-- 7i7 ,9 g5]al ,! t]m /ock means /ock o!r ?an /ock describ$ 9 section #aejd7;a77#d74 7ii7 ,treatm5t ( c]ta9 rights ,! ,secret>y may provide t w>rants1 options1 contracts to acquire /ock1 conv]tible debt int]e/s & o!r simil> int]e/s be treat$ z /ock = #a or m purposes "u subp>agraph 7,a74 7,e7 ,aggregation rule ,= purposes ( det]m9+ :e!r ! /ock own]%ip requirem5ts ( subp>agraph 7,b77i7 are met1 a controll$ gr\p ( corporations 7)9 ! mean+ ( section #dji7l77#d77 may elect to treat all memb]s ( ! gr\p z #a corporation4 7,f7 ,exception = exi/+ b9d+ contracts ,?is p>agraph %all n apply to any remun]ation payable "u a writt5 b9d+ contract :i* 0 9 effect on ,april #a1 #bjag1 & :i* 0 n modifi$ !reaft] 9 any mat]ial respect be=e su* remun]ation is paid4 4 7#b7 ,con=m+ am5dm5t ,subp>agraph 7,c7 ( section #afb7m77#d7 ( su* ,code is am5d$ by /rik+ ,! t]m & ins]t+ ,subject to p>agraph 7#g71 ! t]m4 7b7 ,def9ition ( publicly held corporation ,p>agraph 7#b7 ( section #afb7m7 is am5d$ to read z foll[s3 7#b7 ,publicly held corporation ,= purposes ( ?is subsection1 ! t]m publicly held corporation means any corporation :i*-- 7,a7 qualifies z an issu] ! securities ( :i* are regi/]$ "u section #ab ( ! ,securities ,ex*ange ,act ( #aicd1 or 7,b7 is requir$ to file reports "u section #ae7;d7 ( su* ,act4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #f4 ,(fice ( ,employee ,own]%ip & ,work] ,emp[]m5t 7a7 ,e/abli%m5t ,!re is e/abli%$ )9 ! ,national ,economic ,c\ncil ! ,(fice ( ,employee ,own]%ip & ,work] ,emp[]m5t4 7b7 ,duties ,! ,(fice ( ,employee ,own]%ip & ,work] ,emp[]m5t e/abli%$ "u subsection 7a7 %all-- 7#a7 provide educational & te*nical assi/ance at no co/ to small bus9esses1 z def9$ by ! ,adm9i/rator ( ! ,small ,bus9ess ,adm9i/ration1 t are attempt+ to e/abli% employee own]%ip2 7#b7 raise aw>5ess ( pr(it %>+ to companies & employees1 includ+ ,e,s,o,ps2 & 7#c7 n lat] ?an #ahj days aft] ! date ( enactm5t ( ?is ,act1 submit to ,congress a report on any b>ri]s to employee own]%ip 9 companies4 7c7 ,/aff 7#a7 ,9 g5]al ,! ,director ( ! ,national ,economic ,c\ncil may1 )\t reg>d to ! civil s]vice laws 7includ+ regulations71 appo9t & t]m9ate su* p]sonnel z may be necess>y to enable ! ,(fice ( ,employee ,own]%ip & ,work] ,emp[]m5t to c>ry out ?is section4 7#b7 ,comp5sation ,! ,director ( ! ,national ,economic ,c\ncil may fix ! comp5sation ( p]sonnel )\t reg>d to *apt] #ea & sub*apt] ,,iii ( *apt] #ec ( title #e1 ,unit$ ,/ates ,code1 relat+ to classification ( positions & ,g5]al ,s*$ule pay rates1 except t ! rate ( pay = p]sonnel may n exce$ ! rate payable = level ,v ( ! ,executive ,s*$ule "u section #ecaf ( t title4