Page:United States Statutes at Large Volume 103 Part 3.djvu/279

 PUBLIC LAW 101-239—DEC. 19, 1989 103 STAT. 2347 by any other employee stock ownership plan which is main- tained by— "(i) the employer maintaining the plan, or "(ii) any member of a controlled group of corporations (within the meeining of section 409GX4)) of which the em- ployer described in clause (i) is a member." (b) TERM OF LOAN MAY NOT EXCEED 15 YEARS. —Paragraph (1) of section 133(b) is amended by adding at the end thereof the following new sentence: "The term 'securities acquisition loan' shall not include a loan with a term greater than 15 years." (c) VOTING RIGHTS.— Subsection (b) of section 133, as smiended by subsection (a), is amended by adding at the end thereof the following new paragraph: ^^ "(7) VOTING RIGHTS OF EMPLOYER SECURITIES.— A loan shall not ^ be treated as a securities acquisition loan for purposes of this section unless— "(A) the employee stock ownership plan meets the requirements of section 409(e)(2) with respect to all employer securities acquired by, or transferred to, the plan in connection with such loan (without regard to whether or not the employer has a registration-type class of securities), and "(B) no stock described in section 409GX3) is acquired by, or transferred to, the plan in connection with such loan unless— "(i) such stock has voting rights equivalent to the stock to which it may be converted, and "(ii) the requirements of subparagraph (A) are met with respect to such voting rights.". (d) TAX ON DISPOSITION OF SECURITIES BY EMPLOYEE STOCK OWNER SHIP PLANS. — (1) IN GENERAL.—Chapter 43 is amended by inserting after section 4978A the following new section: "SEC. 4978B. TAX ON DISPOSITION OF EMPLOYER SECURITIES TO WHICH SECTION 133 APPLIED. "(a) IMPOSITION OF TAX. —In the case of an employee stock owner- ship plan which has acquired section 133 securities, there is hereby imposed a tax on each taxable event in an amount equal to the amount determined under subsection (b). "(b) AMOUNT OF TAX.— "(1) IN GENERAL. —The amount of the tax imposed by subsec- tion (a) shall be equal to 10 percent of the amount realized on the disposition to the extent allocable to section 133 securities under section 4978(b)(2). "(2) DISPOSITIONS OTHER THAN SALES OR EXCHANGES. — For pur- poses of paragraph (1), in the case of a disposition of employer securities which is not a sale or exchange, the amount realized on such disposition shall be the fair market value of such securities at the time of disposition. "(c) TAXABLE EVENT. — For purposes of this section, the term 'tax- able event' means any of the following dispositions: "(1) DISPOSITIONS WITHIN S YEARS. —Any disposition of any . employer securities by an employee stock ownership plan within 3 years after such plan acquired section 133 securities if—

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