Three More US States Move Forward with Pro-ESOP Initiatives
Following in the footsteps of states that already have passed pro-ESOP legislation—including Pennsylvania, Iowa, New Jersey, Virginia, and Nebraska—the states of Colorado, Texas, and Missouri are now moving forward with pro-ESOP initiatives.
Colorado House Passes Pro-ESOP Legislation
In April 2017, the Colorado state legislature passed a pro-employee ownership bill (HB17-1214). The bill creates a revolving-loan program to be operated by the Colorado Office of Economic Development and International Trade (OEDIT) and to be funded by gifts and donations. The bill, which now goes to Colorado Governor John Hickenlooper for signature, also requires that the OEDIT train its employees to be sufficiently knowledgeable about employee ownership to be able to recommend it when appropriate and to promote it in OEDIT materials. The bill was sponsored by Colorado State Representative James Coleman (D-Aurora) as well as Rep. Jack Tate (R-Centennial), who said of the bill, "Anything we can do to encourage ownership helping facilitate getting folks on the path of wealth creation, I think is a good thing."
Texas Bill Would Make ESOPs Eligible to Be Designated as Historically Underutilized Businesses
In March 2017, "An Act Relating to the State Designation of Employee Owned Corporations" (H.R. 4171) was introduced by Texas State Representative Ryan Guillen. The bill, if passed, would allow ESOP companies in Texas to be recognized as Historically Underutilized Businesses. The designation would add ESOP companies to other business categories that qualify for contracting preferences with the state. Read more about this initiative.
Missouri Legislature Passes Pro-ESOP Legislation
In September 2016, the Missouri state legislature passed legislation (H.B. 2030) that provides a tax deduction on qualifying sales to Missouri-based ESOPs. Missouri Chamber of Commerce CEO Daniel Mehan welcomed the passage of the bill, commenting in a press release that it will "help ensure employee-ownership is a viable alternative when business owners decide to sell. Having more owners selling to their employees will help keep Missouri businesses locally-held and growing in our state."
As we see increasing awareness of the benefits of employee ownership, we anticipate seeing more pro-ESOP bills being introduced throughout the country.