IN THE SENATE OF THE UNITED STATES
February 11, 2020
Mr. Tillis (for himself and Mr. Peters) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to allow certain qualified over-the-counter securities to be treated as readily traded on an established securities market for the purpose of diversification requirements for employee stock ownership plans.
This Act may be cited as the
2020 ESOP Fairness Act.
Certain securities treated as publicly traded
Paragraph (35) of section 401(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
Rules relating to publicly traded securities
For purposes of this paragraph—
The term publicly traded employer securities means employer securities which are readily tradable on an established securities market.
A security shall be treated as described in clause (i) if the security—
is the subject of priced quotations by at least 2 dealers, published and made continuously available on an interdealer quotation system (as such term is used in section 13 of the Securities Exchange Act of 1934) which has made the request described in section 6(j) of such Act to be treated as an alternative trading system,
is not a penny stock (as defined by section 3(a)(51) of such Act),
is issued by a company which is not a shell company (as such term is used in section 4(d)(6) of the Securities Act of 1933) or a blank check company (as defined in section 7(b)(3) of such Act), and is not subject to bankruptcy proceedings,
in the case of a security issued by a company incorporated in the United States, the issuer publishes, not less frequently than annually, financial statements audited by an independent auditor registered with the Public Company Accounting Oversight Board established under the Sarbanes-Oxley Act of 2002, and
in the case of a security issued by a company incorporated outside of the United States, the issuer—
is subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)),
is subject to the reporting requirements of section 230.257 of title 17, Code of Federal Regulations, or
is exempt from such requirements under section 240.12g3–2(b) of title 17, Code of Federal Regulations, and
Subparagraph (G) of section 401(a)(35) of the Internal Revenue Code of 1986 is amended by striking clause (v) and by redesignating clause (vi) as clause (v).
The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act.