U.S. Sens. Todd Young (R-IN), Ben Cardin (D-MD), and Steve Daines (R-MT) have joined 18 colleagues to reintroduce legislation that makes it easier for companies to establish or expand employee-ownership.
The expanded Promotion and Expansion of Private Employee Ownership Act encourages retirement savings by fostering the growth of S corporations owned by Employee Stock Ownership Plans (S-ESOPs).
“Employee ownership provides small business owners and workers incredible opportunities to build generational wealth and create resiliency for their businesses,” Cardin said. “We need to preserve and expand this structure to enable more businesses to grow and to allow employees to accrue valuable benefits.”
Cardin said Americans deserve the opportunity to build generational wealth, adding that ESOPS are a proven path toward the goal.
Bill provisions include incentivizing owners of S Corporations to sell their stock to an ESOP by providing deferral treatment for contributions of S Corporation stock to an ESOP so long as certain reinvestment requirements are met; providing technical assistance for companies that may be interested in forming an S-ESOP; ensuring small businesses that become ESOPs retain their SBA certification; and affirming the importance of preserving the S-ESOP structure in the Internal Revenue Code.
“While Montana workers and businesses struggle to navigate this challenging economy, it’s important we strengthen creative ways to help folks grow their wealth and reach financial security,” Daines said. “ESOPs help expand ownership of the economy to middle class Montanans and make it easier for folks to invest toward a comfortable retirement.”