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:
- Creates 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).
- Creates an appointed commission to oversee the project. It would include four members of the legislature (one Republican and one Democrat from each house), five people from the private sector (two from employee ownership businesses, one from a business association, one private-sector economic development expert, and one from a financial institution with employee ownership transition experience), and two from the public sector (one public-sector economic development expert and one from the Department of Commerce).
- Establishes a feasibility assessment and implementation tax credit for ESOPs, worker coops, and EOTs of up to 50% of the first $100,000 for ESOPs and $25,000 for worker coops and EOTs. The total amount of credits is capped at $2 million per year.
- Creates a revolving loan fund that would directly support financing for ESOP or worker cooperative conversion transactions. This funding would be contingent on federal funds being available for this purpose. The State Small Business Credit Initiative (SSBCI) could be one such program, and the bill specifies that SSBCI funds could be used for this purpose.