[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1132 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1132

To amend the Internal Revenue Code of 1986 to allow the reinvestment of 
    employee stock ownership plan dividends without the loss of any 
                          dividend deduction.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 26, 1999

 Mr. Breaux (for himself and Mr. Hatch) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to allow the reinvestment of 
    employee stock ownership plan dividends without the loss of any 
                          dividend deduction.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``ESOP Dividend Reinvestment and 
Participant Security Act of 1999''.

SEC. 2. ESOP DIVIDENDS MAY BE REINVESTED WITHOUT LOSS OF DIVIDEND 
              DEDUCTION.

    (a) In General.--Section 404(k)(2)(A) of the Internal Revenue Code 
of 1986 (defining applicable dividends) is amended by striking ``or'' 
at the end of clause (ii), by redesignating clause (iii) as clause 
(iv), and by inserting after clause (ii) the following new clause:
                            ``(iii) is, at the election of such 
                        participants or their beneficiaries--
                                    ``(I) payable as provided in clause 
                                (i) or (ii), or
                                    ``(II) paid to the plan and 
                                reinvested in qualifying employee 
                                securities, or''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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