Bill Would Create Indiana Employee Ownership Center

Indiana state Senator Shelli Yoder (D-Bloomington) has introduced S. Bill 175, a bill that would create and fund an Indiana Employee-Owned Business Resource Center. Yoder is the minority caucus leader in the Indiana Senate. The Center would:

• “Provide education and awareness concerning the benefits of employee ownership and employee ownership succession."
• "Provide technical assistance to: (A) employees seeking to start an employee-owned business; or (B) business owners exploring the possibility of transferring full or partial ownership to employees."
• "Train employees and employers with respect to methods of employee participation in open-book management, work teams, committees, and other approaches for seeking greater employee input."
• "Create and manage an employee ownership referral service that connects business owners and employees with local legal, financial, and technical advisers."
• "Conduct research, studies, and analyses concerning employee ownership."

The bill would also create a low-interest revolving loan program. It does not specify a funding amount for the fund. The fund could also accept outside donations.

The bill is the second on employee ownership to be introduced this year. Indiana HB 1038, a bill to create a linked deposit program for state funds to encourage ESOP lending, has been sent to committee. Sponsored by Jake Teshka (R-South Bend), the bill would revive a program that ran for several years in Indiana in the early 2000s.  The bill would require the Indiana state treasurer to establish and administer a program in which state funds are deposited in participating banks at not more than 3% below the comparable Treasury Bill rate. The bank would then loan the money to a company using an ESOP to buy shares at a reduced interest rate corresponding to CDs offered by the bank. When the program was in effect before, a few loans were made under it.  Interest rates at that time were similar to today’s rates, but somewhat lower.