Corey Rosen
Mandate for Leadership: The Conservative Promise, a project of the 2025 Presidential Transition Project, has strongly endorsed regulatory changes to make it easier to set up ESOPs. The project, led by the Heritage Foundation, invited over 400 conservative scholars and thinkers to set out detailed policy recommendations for all aspects of the federal government, resulting in an 883-page document.
Corey Rosen
On July 10, the Department of Labor (DOL) announced it is creating the Employee Ownership Initiative within its Employee Benefits Security Administration (EBSA). The initiative results from the 2022 Worker Ownership, Readiness, and Knowledge Act (WORK Act), which was enacted as part of the SECURE 2.0 Act in the 2023 Consolidated Appropriations Act. The WORK Act requires the DOL to set up a grant program for state employee ownership centers. Funding for that provision will need an appropriation in the 2023 budget. The DOL’s Employment and Training Division will administer the grant program. The WORK Act also requires the DOL to set up an office to provide information to states and other interested parties about employee ownership. That will be under EBSA.
Corey Rosen
In 2022, the California Employee Ownership Act became law by a unanimous vote. The bill established the California Employee Ownership Hub within the California Office of Small Business. The Hub was directed to “increase awareness and understanding of employee ownership among stakeholders, assist business owners and employees in navigating available resources, and streamline and reduce barriers to employee ownership.” California has a variety of loan support programs for which companies seeking to convert to employee ownership could potentially qualify.
Corey Rosen
SB 1239, An Act Concerning Certain Employee Stock Ownership Plans, would allow Connecticut companies to avoid a state corporate tax surcharge if they provide at least 80% of their employees with at least 300 shares apiece for each year the surcharge applies. The state surcharge equals 10% of taxes paid and applies to companies with $100 million or more in income or companies that are part of a combined group of companies that file a unitary income tax return, regardless of income.
Corey Rosen
Senators Chris Van Hollen (D-MD) and Marco Rubio (R-FL), along with Representatives Dean Phillips (D-MN) and Blake Moore (R-UT), have introduced the Employee Equity Investment Act (EEIA). The bill would create an investment facility within the Small Business Administration's (SBA's) Small Business Investment Company (SBIC) program to provide loan guarantees for investment funds devoted to expanding employee ownership.
Corey Rosen
Updated February 28, 2025
Corey Rosen
The Texas House of Representatives has passed HB 2389, “An Act relating to companies in which employees have ownership interests through employee stock ownership plans.” It will now head to the Senate, where, as SB 1233, it has already passed the International Affairs and Economic Development Committee by a vote of 8-0. The bill would:
Corey Rosen
The Colorado legislature has passed (by margins of 54-2 in the House and 26-9 in the Senate) a bill (HB23-1081) to expand its tax credits for converting to employee ownership. Governor Jared Polis has strongly supported the legislation and is expected to sign it. Under prior law, companies converting to ESOP ownership could get a tax credit for up to 50% of costs for conversion, with a maximum credit of $100,000 for conversion expenses; the dollar limit is now increased to $150,000. For worker cooperatives, prior law provided a credit of up to 50% of conversion costs, with a maximum credit of $25,000; the dollar limit is now increased to $40,000. Conversions to other qualified forms of employee ownership now also qualify for a credit of up 50% of the costs, up to a maximum credit of $25,000. Finally, the bill provides a tax credit of 50% of the costs, up to a maximum credit of $25,000, for a qualified employee-owned business expanding its employee ownership by at least 20%.
Corey Rosen
By a unanimous vote, both chambers of the Washington State Legislature have passed S.B. 5096, “An act relating to expanding employee ownership.” On May 9, Governor Jay Inslee signed the bill. The law creates the most ambitious state employee ownership program yet. It includes the following provisions:
