H.R. 2014 · Where this bill is now
In committee
Introduced in the House, sent to the Committee on Ways and Means, Mar 10, 2025
What this bill does
In plain words · AI-written from the official summaryAdjusts tax rules for private foundation stock holdings
This bill changes how the IRS counts stock owned by private foundations when checking if they owe an excise tax. Specifically, when a corporation buys back its own stock from an employee stock ownership plan (an ESOP, which is a type of retirement benefit for workers), that repurchased stock gets treated differently for tax purposes. This means private foundations may be able to exclude certain repurchased stock when calculating whether they own too much of a company and owe the federal excise tax.
How it affects you
This change mainly affects private foundations and the corporations they invest in, particularly those with employee stock ownership plans. Most everyday people won't feel a direct effect from this bill, though it could indirectly influence how much stock private foundations hold in companies and how those foundations operate.
Read the official summary (Introduced in House, Mar 10, 2025)
Reduction of Excess Business Holding Accrual Act
This bill treats certain stock repurchased by a corporation from an employee stock ownership plan (ESOP) as outstanding voting stock for purposes of the federal excise tax imposed on a private foundation’s excess business holdings. Thus, a private foundation may exclude such stock in calculating present holdings in a corporation and liability for the excise tax. (Exceptions apply.)
As background, a federal excise tax is imposed on a private foundation that owns more than 20% of the voting stock in a corporation, reduced by the percentage of voting stock held by all disqualified persons (excess business holdings). However, a private foundation with excess business holdings on May 26, 1969 (grandfathered private foundation) may own a greater percentage of voting stock in certain circumstances.
Under the bill, stock is treated as outstanding voting stock if such stock is
• not readily tradable on an established securities market;
• repurchased from an ESOP on or after January 1, 2020; and
• held by the corporation as treasury stock, cancelled, or retired.
However, such stock is not treated as outstanding voting stock if it is repurchased within the first 10 years of establishing the ESOP or, as a result of the repurchase, the permitted holdings of the private foundation would exceed 49% of the voting stock in the corporation.
Finally, under the bill, such stock does not reduce the percentage of voting stock a grandfathered private foundation may own.
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionH. R. 2014
A BILL
Reduction of Excess Business Holding Accrual Act
Sponsor: Rep. W. Gregory Steube (R-FL-17) · Introduced Mar 10, 2025 · Taxation · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Mar 10, 2025: “Referred to the House Committee on Ways and Means.”