Iowa Closer to Passing Employee Ownership Law

The Iowa House of Representatives passed a bill to encourage ESOPs in the state by a vote of 92-3. The proposal, strongly backed by the governor, now moves to the Senate, where approval seems certain. The bill would exempt capital gains from taxation if a company is sold to an ESOP that owns at least 30% of the stock. No mention is made of a requirement that the company be a C corporation. The bill also provides for an appropriation of $1 million to the state economic development authority to establish a loan program for qualifying ESOPs, and to provide technical assistance, marketing, and education on ESOPs.