New ESOP Legislation Introduced in House of Representatives
New legislation has been introduced by House members Cass Ballenger (R-NC), Lewis Payne (D-VA), and Dana Rohrabacher (R-CA) to provide that Subchapter S companies could set up ESOPs. The bill would also exempt ESOP dividend payments from the Alternative Minimum Tax, allow people who acquire shares under options or other benefit arrangements to take advantage of special tax deferral rules for subsequent sales of the stock to an ESOP, allow worker cooperatives to take advantage of section 133 loans, and provide limited additional benefits for estates and charitable trusts selling to ESOPs. The legislation has not been introduced in the Senate. Similar legislation has been introduced the last several years, but no action has been taken.