Corey Rosen
Senate Bill 21 (PDF), a bipartisan bill introduced in both the Wisconsin Senate and Assembly, would create a tax credit of up to 70% of the costs of converting to a worker cooperative and 50% of the cost of adopting an ESOP, with a credit cap of $100,000. Up to a total of $5 million in credits could be allocated each year, and any unused allocation could be carried forward.
Loren Rodgers
The extensive coverage of President Trump’s executive order to halt payments for foreign aid has missed one of the order’s unintended consequences: the impact it will have on the thousands of people who work at U.S.-based employee-owned companies that implement many USAID projects. Companies that have employee stock ownership plans (ESOPs) are heavily represented among the contractors affected by the executive order.
Corey Rosen
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:
Loren Rodgers
On January 29, the Trump administration appears to have rescinded its executive order freezing federal grant funding. A prior order freezing foreign aid is still in effect. Press Secretary Karoline Leavitt suggested, however, that the freeze might continue in some form in a post on X: “This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court's injunction. The President's EO's on federal funding remain in full force and effect, and will be rigorously implemented.” A separate executive action, still in effect, offers buyouts to over two million federal workers.
Loren Rodgers
At 8:45 am Eastern time on January 16, the Federal Register released the public inspection versions of two proposed rules, both of which would affect the determination of the value of shares in ESOP transactions. Both proposed rules are from the Employee Benefits Security Administration (EBSA) at the Department of Labor (DOL). (Original links below replaced with links to the DOL PDFs hosted on our site after the DOL took down the pages.)
Scott Rodrick
Valuation is a crucial topic for ESOPs because in closely held companies, the price paid for company stock in transactions must be based on an independent outside appraisal, and likewise ESOP-held stock must be appraised at least annually. Much ESOP litigation over the years has revolved around valuation.
The Department of Labor issued proposed ESOP valuation regulations in 1988 but never finalized them. ESOP professionals have urged the DOL to issue formal guidance instead of leaving it to the courts, and the SECURE 2.0 Act of 2022 (as part of the WORK Act) directed the DOL to develop formal guidance on valuation. In October 2024, the DOL sent a new proposed ESOP valuation regulation to the Office of Management and Budget (OMB) for inter-agency review of costs and benefits. The OMB has now completed its review of the regulation.
Corey Rosen
Updated May 5, 2025 to reflect the most recent action
HB25-1021 has now passed both Houses of the Colorado legislature. The governor is expected to sign it. The state already provides significant tax credits for companies to adopt ESOPs, worker cooperatives, employee ownership trusts, or other structures that provide employees with at least 20% of the company's equity. The bill was one of the few passed this year that increases state expenditures or tax incentives because of Colorado's current budget issues.
Loren Rodgers
The election for the NCEO’s board of directors opens on January 7, 2025, for three-year terms that begin on April 1, 2025.
Corey Rosen
Robert Smiley, one of the pioneers of ESOPs, died at the age of 81 on November 13, 2024. Bob was a past president of the ESOP Association and was instrumental in its foundation. He was an early and generous supporter of the NCEO and served on our board for several years.
He was the founder and board chair of the Benefit Capital Group, an ESOP banking and advisory firm. He formed Benefit Capital, Inc., which provided advice to ESOP deals worth over $5 billion over 30 years. He was also a contributing author to the NCEO’s Journal of Employee Ownership Law and Finance, which was published from 1989 to 2010, and was the managing editor of Employee Stock Ownership Plans: ESOP Planning, Financing, Implementation, Law and Taxation, a definitive publication on ESOP legal, financial, and administrative issues. It was updated annually until 2013.
Mr. Smiley also served on the faculty of the University of California, Los Angeles (UCLA) Extension and was a trustee for the Reason Foundation, a free-market think tank, for nine years. He also served in the Navy. Bob was a key player in the development of the NCEO and ESOPs, and we will all miss him.
