Bill > HR5169

This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to provide clearer guidance on determining "adequate consideration" for closely held stock in employee stock ownership plans (ESOPs). Specifically, the bill allows fiduciaries of ESOPs to rely in good faith on independent valuations of stock value if the valuation follows the principles outlined in Internal Revenue Service (IRS) Revenue Ruling 59-60, which provides guidelines for determining the fair market value of assets. This means that when an ESOP is valuing stocks in a privately held company, the fiduciaries can use an independent appraiser's valuation as a reliable method for determining the stock's worth, as long as the appraiser uses established IRS valuation methodologies. The amendments will apply to stock valuations made on or after the date of the bill's enactment, providing more clarity and legal protection for ESOP managers when assessing the value of closely held company stock.

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https://www.congress.gov/bill/119th-congress/house-bill/5169/all-info