WA Bill Would Eliminate State’s Employee Ownership Program

Facing a budget deficit, Washington Governor Bob Ferguson is looking to potentially eliminate the state’s employee ownership program, which just got underway in 2024 and is similar to one in Colorado. Representative Adison Richards, a Democrat, has introduced HB 2407, a bill that would eliminate the program and its funding.

In 2023, Washington enacted comprehensive employee ownership legislation. The law created a state employee ownership program with a director housed in the Washington State Department of Commerce. The program would provide outreach and technical services to help promote ESOPs, worker cooperatives, and employee ownership trusts (EOTs) and set up an appointed commission to oversee the project. Those parts of the program cost about $900,000 per year and would be terminated by the current bill. The 2023 law also established a feasibility assessment and implementation tax credit for ESOPs, worker cooperatives, and EOTs of up to 50% of the first $100,000 for ESOPs and $25,000 for worker cooperatives and EOTs. The total amount of credits was capped at $2 million per year. That portion of the law would remain in effect under HB 2407. A revolving loan fund designed to directly support financing for ESOP or worker cooperative conversion transactions was set up but was contingent on federal funding for this purpose being created under the federal Work Act. That has not happened. The State Small Business Credit Initiative (SSBCI) could be one such program, and the 2023 law specifies that SSBCI funds could be used for this purpose.

A committee hearing on HB 2407 is set for April 3. Written testimony can be submitted for the hearing, or you can ask to testify in person (live or remotely); Washington residents can also send a comment on the bill to their legislators. Details are here.