,,ii #aaith ,,congress #ast ,session ,s4 #agbg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #ac1 #bjbe,mr4 ,cassidy introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,employee ,retirement ,income ,security ,act of #aigd to permit employee stock ownership plan participants to benefit from the full amount of beneficial ownership that can be accrued in the plan while also fully realizing the benefits of saving for retirement in a defined contribution plan4 #a4 ,short title ,this ,act may be cited as the ,employee ,ownership ,fairness ,act of #bjbe4 #b4 ,findings ,congress finds as follows3 7#a7 ,while ,congress permitted the creation of employee stock ownership plans 7,e,s,o,ps7 in the ,employee ,retirement ,income ,security ,act of #aigd1 these plans are not just a retirement plan for their participants4 7#b7 ,the legislative history of ,e,s,o,ps indicate that ,e,s,o,ps were intended to help the economy at a time when bank financing was difficult for companies to obtain1 with the ,joint ,committee on ,taxation categorizing the ,,esop provisions of the ,tax ,reform ,act of #aihd as ,incentives for ,investment and ,continued ,economic ,growth4 7#c7 ,e,s,o,ps empower workers to gain ownership of their enterprise1 thereby aligning the incentives for owners and workers and affording workers an economic stake in the company's success4 7#d7 ,e,s,o,ps serve as a mechanism of finance whereby workers who otherwise would not have the means can acquire the businesses where they work4 7#e7 ,,esop employees who run successful1 profitable companies are often unable to make full use of their defined contribution plans as a result of their company's success accruing to their ,,esop balance1 thereby causing their other plan contributions to exceed the annual cap4 7#f7 ,unlike defined contribution plans where the amount contributed is determined by the employee1 ,,esop contributions reflect growth in the company and its value rather than planned contributions by the employee or employer4 ,this is why the vast majority of ,e,s,o,ps also sponsor a defined contribution plan1 such as a qualified cash or deferred arrangement under section #dja7k7 of the ,internal ,revenue ,code of #aihf1 which facilitates the diversification of workers' retirement savings4 7#g7 ,sections #djd and #dae of the ,internal ,revenue ,code impose limits on benefits and contributions under qualified retirement plans4 ,these limits impede the ability for ,,esop employees to diversify their retirement savings and make their own retirement savings contributions and often require their employers to deny matching contributions they would otherwise receive4 #c4 ,,esop amendments 7a7 ,,erisa ,subtitle ,b of title ,,iii of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #abba et seq47 is amended by adding at the end the following3 #c ,special rules for employee stock ownership plans #cjcc4 ,special rules for employee stock ownership plans ,for purposes of the ,internal ,revenue ,code of #aihf1 with respect to an employee stock ownership plan 7as defined in section #djg7;d77#f77-- 7#a7 for purposes of applying section #djd7;a77#c77;,a7 of the ,internal ,revenue ,code of #aihf1 the contributions taken into account for purposes of clause 7i7 thereof shall not include-- 7,a7 contributions of employer stock2 or 7,b7 contributions made to repay loans used to acquire employer securities2 7#b7 the limitations of section #djd of such ,code shall be applied separately to such plan and any other defined contribution plan of the employer2 7#c7 in determining annual additions under section #dae7;c77#b7 of such ,code1 employer contributions under subparagraph 7,a7 thereof are determined without regard to-- 7,a7 contributions of employer stock2 or 7,b7 contributions made to repay loans used to acquire employer securities2 and 7#d7 for purposes of section #dae of such ,code1 forfeitures allocated to accounts under the plan shall not be taken into account as annual additions 7as defined in section #dae7;c77#b7 of such ,code74 4 7b7 ,,irc 7#a7 ,in general ,subparagraph 7,a7 of section #djd7;a77#c7 of the ,internal ,revenue ,code is amended by adding at the end the following new clause3 7vi7 ,exception for ,e,s,o,ps ,in the case of an employee stock ownership plan 7as defined in section #dige7;e77#g771 the contributions taken into account for purposes of clause 7i7 shall not include-- 7,i7 contributions of employer stock1 or 7,,ii7 contributions made to repay loans used to acquire employer securities4 4 7#b7 ,separate determination of limitations ,subsection 7a7 of section #djd of the ,internal ,revenue ,code is amended by adding at the end the following new paragraph3 7#ac7 ,separate determination for ,e,s,o,ps ,in the case of an employee stock ownership plan 7as defined in section #dige7;e77#g771 this section shall be applied separately to such plan and any other defined contribution plan of the employer4 4 7#c7 ,determination of annual additions ,the second sentence of paragraph 7#b7 of section #dae7;c7 of the ,internal ,revenue ,code is amended-- 7,a7 by striking #deg7;e77#af77 without regard and inserting #deg7;e77#af77 and without regard1 and 7,b7 by inserting 1 and in the case of an employee stock ownership plan 7as defined in section #dige7;e77#g771 employer contributions under subparagraph 7,a7 are determined without regard to contributions of employer stock or contributions made to repay loans used to acquire employer securities before the period at the end4 7#d7 ,special rule ,section #dae of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7o7 ,special rule for ,e,s,o,ps ,in the case of an employee stock ownership plan 7as defined in section #dige7;e77#g771 forfeitures allocated to accounts under the plan shall not be taken into account as annual additions4 4 7c7 ,effective date ,the amendments made by this section shall apply to plan years beginning after the date of the enactment of this ,act4