Congress gives ESOP fiduciaries a safe harbor on stock valuations

What it does

This bill amends ERISA to clarify that fiduciaries of employee stock ownership plans (ESOPs) can rely in good faith on valuations prepared by independent appraisers using IRS Revenue Ruling 59-60 methodology when determining 'adequate consideration' for closely held stock transactions. The bill does not expand the Secretary of Labor's regulatory authority beyond what existed before enactment and preserves fiduciary obligations under ERISA section 404.

Why we flagged it

The bill's operative mechanism is a safe harbor for ESOP fiduciaries relying on independent appraisals using a specified IRS methodology. It is a technical amendment to ERISA's definition of 'adequate consideration' designed to reduce litigation risk and clarify compliance standards for closely held stock valuations.

What the text implies

• Safe harbor for 'good faith reliance' may reduce fiduciary liability even if appraisals are later shown to be inflated, potentially allowing overvaluation of closely held stock that employees hold in their retirement accounts.
• The bill preserves the Secretary of Labor's authority to promulgate regulations but explicitly states it does not expand that authority, which may limit future DOL rulemaking to clarify or tighten valuation standards.
• Employees in ESOPs may have less recourse if they discover their retirement savings were invested in overvalued company stock, since fiduciaries can now point to an independent appraisal as a defense.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

ESOPs are employee-owned retirement vehicles, so clarity on valuation standards may reduce disputes and administrative costs that could otherwise reduce plan assets. However, the safe harbor for 'good faith reliance' on appraisals may insulate fiduciaries from scrutiny if valuations are inflated, potentially harming employees whose retirement savings are tied to overvalued company stock.

Who stands to gain

• ESOP sponsors and fiduciaries (reduced litigation and compliance costs)
• Business appraisers and valuation experts (increased demand for appraisals)
• Closely held company owners (easier to justify stock valuations in ESOP transactions)

Named in the bill

Employee Retirement Income Security Act of 1974 (ERISA), Employee Stock Ownership Plans (ESOPs), Internal Revenue Service (IRS), IRS Revenue Ruling 59-60, Secretary of Labor, Section 3(18) of ERISA, Section 404 of ERISA, Section 407(d)(6) of ERISA

Where it stands

4 cosponsors: 3 Republicans, 1 Democrats.

• Sep 8, 2025 — Introduced · Congress.gov: “Introduced in House”
• Sep 8, 2025 — Referred to House Committee on Education and Workforce · Congress.gov: “Referred to the House Committee on Education and Workforce”
• Sep 17, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Sep 17, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by the Yeas and Nays: 35 - 0”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

3 lobbying clients named this bill on 4 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $21,780,000 in lobbying spend. A filing names 120 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 61% of bills with at least one filing.

Rick Allen, the sponsor, reported $565,250 in PAC receipts in the 2026 cycle.

• Chamber of Commerce of the U.S.A. — $17,960,000 on 1 filing
• American Association for Justice — $3,610,000 on 2 filings
• American Benefits Council — $210,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.