Reduction of Excess Business Holding Accrual Act

This bill changes how certain private foundations are taxed when they own a large share of a company's voting stock. Normally, a private foundation faces a special tax if it owns too much of a company, but this bill says that certain stock a company buys back from an employee stock ownership plan (ESOP) should still be counted as if it were active voting stock. This means a private foundation could end up owning a smaller percentage of the company on paper, helping it avoid or reduce that tax. There are some limits, though — for example, this rule doesn't apply if the stock was bought back within the first 10 years of setting up the ESOP, or if it would let the foundation control more than 49% of the company's voting stock.

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