,,ii  #aafth ,,congress  #ast ,session  
,s4 #bdbc  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,august #a1    
#bjai,ms4 ,stabenow 7for herself and    
,mr4 ,peters7 introduced the following  
bill2 which was read twice and referred 
to the ,committee on ,finance  ,a ,,bill
  ,to amend the ,internal ,revenue ,code
 of #aihf 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     
plans4  #a4 ,certain purchases of       
employee-owned stock disregarded for    
purposes of foundation tax on excess    
business holdings  7a7 ,in general      
,section #didc7;c77#d77;,a7 of the      
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new clause3  7v7 ,for purposes
 of clause 7i71 subparagraph 7,d71 and  
paragraph 7#b71 any voting stock which--
 7,i7 is not readily tradable on an     

established securities market1  7,,ii7  
is purchased by the business enterprise 
on or after ,january #a1 #bjje1 from an 
employee stock ownership plan 7as       
defined in section #dige7;e77#g77 in    
which employees of such business        
enterprise participate1 in connection   
with a distribution from such plan1 and 
7,,iii7 is held by the business         
enterprise as treasury stock1 cancelled1
 or retired1  shall be treated as       
outstanding voting stock1 but only to   
the extent so treating such stock would 
not result in permitted holdings        
exceeding #di percent 7determined       
without regard to this clause74 ,the    
preceding sentence shall not apply with 
respect to the purchase of stock from a 
plan during the #aj-year period         
beginning on the date the plan is       
established4  4  7b7 ,effective date    
7#a7 ,in general ,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 before1 on1 
or after the date of the enactment of   
this ,act4  7#b7 ,special rule for      
grandfathered foundations in case of    
decrease in ownership by reason of      
pre-enactment purchases ,section        
#didc7;c77#d77;,a77ii7 of the ,internal 
,revenue ,code of #aihf shall not apply 
with respect to any decrease in the     
percentage of holdings in a business    
enterprise by reason of the application 
of section #didc7;c77#d77;,a77v7 of such
 ,code 7as added by this section74