Employee Ownership Blog
Corey Rosen

Corey Rosen

January 03, 2023

Major Wins for Employee Ownership in New Spending Bill

The Consolidated Appropriations Act of 2023, an omnibus spending bill with many parts that was signed into law on December 29, contains major wins for employee ownership as part of the SECURE 2.0 Act of 2022. (The original SECURE [Setting Every Community Up for Retirement Enhancement] Act of 2019 was signed into law in December 2019 and modified various retirement plan rules, such as changing the age for required minimum distributions from 70½ to 72.) Section references here are to the SECURE 2.0 Act, not the appropriations bill as a whole, which contains many laws (e.g., there are multiple “sec. 114” instances, and one of them is in the SECURE 2.0 Act, amending Section 1042).

Corey Rosen

December 22, 2022

A Christmas Carol, the ESOP Version

Lots of us love Dickens’s A Christmas Carol. The tale of Ebenezer Scrooge’s dream-tormented epiphany about what really matters in life has resonated deeply with people of all ages ever since it was published.

Corey Rosen

December 15, 2022

Rosen-Case Ownership Book Wins Book Prize

Ownership: Reinventing Capitalism, Companies, and Who Owns What won the 2023 William Foote Whyte and Kathleen King Whyte Book Prize for the best book of the year on shared capitalism. The award is issued by the Institute for the Study of Employee Ownership at the Rutgers University School of Management and Labor Relations.

Corey Rosen

November 18, 2022

Massachusetts Passes Employee Ownership Center Bill

Governor Charlie Baker of Massachusetts has signed a wide-ranging economic development legislative package that includes An Act to Enable the Massachusetts Center for Employee Ownership (S.261 / H.511), which will institutionalize the Massachusetts Center for Employee Ownership (MassCEO). The Office will be housed in the Massachusetts Office of Business Development. Much like the recently passed California Employee Ownership Act, the office will focus on outreach to business owners and serve as a resource hub for service providers and information. It will be led by a full-time director and will be able to make grants to local organizations to carry out its mission. The legislation also created a formal advisory board comprised of representatives from a number of stakeholder groups, including governor-appointed representatives from Massachusetts-based ESOP companies and worker cooperatives.

Corey Rosen

October 31, 2022

SBA Says Main Street Employee Ownership Act Has Not Produced Many ESOP Loans

The 2018 Main Street Employee Ownership Act was intended to spur lending from the Small Business Administration for ESOP transactions. While the law seemed very clear that ESOPs should be eligible for the SBA’s 7(a) lending program (a program that allows borrowers to get loans through SBA approved lenders rather than having to navigate the more cumbersome process of going to the SBA directly), SBA guidance on the Act excluded ESOPs from the program, as well as adding other requirements for equity in the deal and a separate valuation, that have made the law cumbersome at best.

Corey Rosen

October 28, 2022

2023 Plan Limits Announced

In Notice 2022-55 (October 21, 2022), the IRS announced the largest increase in annual limits for retirement plans in many years. The new limits applicable to ESOP companies include:

Corey Rosen

October 04, 2022

How the California Employee Ownership Act Became Law

The passage of the California Employee Ownership Act, the provisions of which I discussed in a recent blog post, has lessons for anyone wanting to move employee ownership forward in a state. We often think of legislation as the result of lobbying efforts by well-funded and/or politically connected groups. But the California Employee Ownership Act was the result of one employee ownership advocate calling one state legislator (Senator Josh Becker) and explaining the benefits of employee ownership in closing racial wealth and equity gaps in California. Senator Becker, coming from an entrepreneurial background, grasped the idea immediately and asked what he could do to promote more employee ownership in California. With his staff, he set up a meeting with a group of worker coop and ESOP advocates (including the NCEO) to come up with ideas. That group recruited additional supporters, and once the bill was drafted, these supporters lined up other supporters to contact their legislators (the NCEO was not involved in the lobbying part of this process). The bill moved through both houses without dissent. While the idea did not simply sell itself, it came pretty close.

Corey Rosen

September 13, 2022

New NCEO Guides to State and Federal Legislation Available

The NCEO now has comprehensive guides to active and pending state and federal legislation on our website. The articles will be updated as needed. The state guide summarizes all the state bills that have become law, including creating state employee ownership centers, tax incentives for a sale to an ESOP, and allowing certain professional firms to organize as ESOP companies. The document also summarizes significant active legislative efforts. Links to the bills are provided where available.

Corey Rosen

August 23, 2022

California California Employee Ownership Act Becomes Law

Governor Newsom has signed the California Employee Ownership Act. Both houses approved the bill unanimously. A broader version of the bill previously passed the Senate, but the bill was pared down in the Assembly. The Senate agreed to a pared down version with the understanding that an effort will be made to add the deleted features in the governor's next budget proposal.

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