A bill to amend the Internal Revenue Code of 1986 to clarify the estate tax deduction for sales of employer securities to employee stock ownership plans or worker-owned cooperatives, and for other purposes.

Amends the Internal Revenue Code (IRC) to revise provisions relating to the estate tax deduction for proceeds received from a sale of employer securities to an employee stock ownership plan (ESOP) or worker-owned cooperative. Makes such a deduction available only if: (1) the decedent directly owned the securities immediately before death; and (2) after the sale, the securities are either allocated to participants or held for future allocation in connection with certain exempt loans or transfers of assets.

Prohibits, except in a bona fide business transaction, the treatment of employer securities as allocated or held for future allocation insofar as they are so categorized in substitution of other employer securities so designated.

Applies the deduction to any sales of qualified employer securities (current law applies only to sales made by the executor of the estate).

Prohibits the amount of the deduction from exceeding: (1) the amount that would lead to a reduction in estate tax liability (before credits) equal of $750,000; or (2) 50 percent of the taxable estate.

Disallows proceeds from being taken into account when: (1) they exceed the net sale amount of dispositions of employer securities by the plan during the year preceding the sale in question; (2) they are attributable to transferred assets (except for assets held by the ESOP on February 26, 1987); (3) the sale takes place after the estate tax return filing deadline; or (4) the decedent received the securities under certain specified conditions.

Applies the deduction to employer securities that are: (1) issued by a domestic corporation which has no stock outstanding which is readily tradable on an established securities market; (2) includable in the gross estate of the decedent; and (3) would have been includable if the decedent had died within a specified time period.

Revises the requirements governing the contents of the written statement to be submitted by the executor of the decedent's estate in order to qualify for the deduction.

Imposes an excise tax on ESOP dispositions of employer securities for which an estate tax deduction was allowed. Sets forth the amount of tax applicable to relevant taxable events as follows: (1) 30 percent of the amount realized from any disposition of employer securities by an ESOP or eligible worker-owned cooperative within three years of the group's acquisition of qualified employer securities; (2) 30 percent of the amount realized from a disposition (not within three years after acquisition) that occurs before allocation of such securities to participants' accounts in cases when the proceeds are not allocated; or (3) 30 percent of the repayment amount in cases of a payment by an ESOP of any part of a loan used to acquire employer securities from transferred assets.

Sets out the ordering rules to govern dispositions of employer securities for purposes of this excise tax and another specified excise tax relating to ESOPs.

Makes the excise tax inapplicable to: (1) dispositions to employees, in certain cases; (2) exchanges associated with the liquidation of a corporation into a cooperative or with other reorganizational purposes; and (3) sales effected to meet IRC diversification requirements relating to pension trusts.

Places liability for the excise tax on the employer maintaining the ESOP or the eligible worker-owned cooperative.