On September 16, 2009 lawmakers introduced The S Corporation ESOP Promotion and Expansion Act of 2009 (H.R. 3586) to improve and promote S ESOP laws.
The bill would:
- permit owners of S stock to sell their stock to an ESOP under the same treatment C stock of a private company receives under Internal Revenue Code Section 1042, also known as the ESOP cap gains deferred rollover provision;
- permit a lender to S corporations to exclude 50% of its interest income if the loan is used for a qualified employer securities loan, modeled after former IRC Section 133;
- permit an S ESOP to assume the estate tax liability of an estate if S stock of equal value is transferred to the S corporation ESOP;
- and establish a Federal program in the Department of Labor to encourage S ESOP creation.
The bill was introduced by Congressman Ron Kind (D-WI) and is co-sponsored by Congressman Earl Blumenauer (D-OR).