Governor’s Proclamation:

Governor Eric J Holcomb has has issued a Governor’s Proclamation recognizing October 2024 as Employee Ownership Month!  Click here for a copy of the proclamation.  Please feel free to download this Proclamation for use during your ESOPs Employee Ownership Month celebrations!

Indianapolis Mayor Proclamation:

Mayor Joe Hogsett has issued a Mayoral Proclamation declaring the month of October 2024 as Employee Ownership Month.  Click here for a copy of the proclamation.  Please feel free to download this proclamation for use during your ESOPs Employee Ownership Month celebrations!

Support for Employee Ownership:

Republican Party:

There is no mention of employee ownership in the 2024 national platform.  The last mention of employee ownership was in the 2016, Republican National party platform supports employee ownership:

Republicans believe that the employer-employee relationship of the future will be built upon employee empowerment and workplace flexibility. We therefore endorse employee stock ownership plans that enable workers to become capitalists, expand the realm of private property, and energize a free enterprise economy.

At the state level there is no mention of employee ownership.

Democratic Party:

There is no mention of employee ownership in the 2024 national platform. However, in a policy statement issued Sept 25: Vice President Harris and Governor Walz will reform our tax laws to make it easier for businesses to let workers share in their company’s success, including through broad-based employee stock ownership, profit-sharing plans, and comparable arrangements, with appropriate guardrails to ensure these plans benefit and protect workers.

At the state level, the Indiana Democratic party platform does not contain information supporting employee ownership.

Project Equity (2023), has identified that members of Indiana’s boomer generation own 51,996 business which employ 675,000 Hoosiers, with a combined payroll of 25 Billion dollars.  It is estimated that 80% of these business do not have a succession plan when their owner retires.  Some of these business may transition to family members, some may be sold to out-of-state owners who might close and move the business, some may be sold to private equity firms interested in a quick flip with no regard to the employees left in the wake.  However there is a better solution – transition of ownership to the firms employees through establishment of an Employee Stock Ownership Plan.

Research has shown that Employee-Ownership is good for our citizens, our state, and our economy.  Many states have passed pro-ESOP legislation and as Indiana citizens we need to focus on state level legislation that will support and encourage transition of these boomer businesses to their employees.

Click here to view state based pro-ESOP legislative activity Prior to Jan 3, 2023.

Current activity as of July 15, 2024 is below:

Colorado – HB24-1157 Signed into law. HB24-1157 will make the Employee Ownership Office, temporarily created by Governor Polis in an executive order, a permanent office to continue supporting small business owners who are transitioning to an employee-owned business model.  The new law also creates a refundable state income tax credit for costs that come with running a new employee-owned business. The tax credit is available for tax years 2025 through 2033 and businesses are eligible if they have been partially or wholly owned by employees for fewer than seven years. This tax credit covers 50 percent of qualifying costs, granting up to $50,000 a year in savings.

Massachusetts – S-1837 An Act to promote employee ownership. and provides that a corporation can deduct 50% of the capital gains it receives from the sale of not less than 49% of the stock in a closely held company with 500 or fewer employees.

New York – Section 1503 revision to Article 15 Professional Service Corporations which will allow up to 100% employee ownership under certain circumstances of ownership held by design professionals.

New York – A1920 and S962, creates a state employee ownership center to be housed at a university, loan assistance from the New York State business development loan, and exempt any sale to a qualifying employee owned business from state capital gains taxes.

North Carolina SB 802 – which has several provisions, including language allowing ESOP companies to qualify for public contracting preferences if at least fifty-one percent of the plan participants are members of historically disadvantaged groups. The North Carolina Governor has signed the bill into law, and it became effective July 1, 2024

Pennsylvania – House bill 1790 An Act establishing the Office of Employee Ownership within the Department of Community and Economic Development; establishing the Main Street Employee Ownership Grant Program; and providing technical and financial assistance to employee-owned enterprises.

Tennessee – SB0085, and HB0154, This bill enacts the “Employee Ownership, Empowerment, and Expansion Act,” which creates tax incentives for small businesses to establish employee stock ownership plans or employee ownership trusts, or to convert to a worker-owned cooperative, as discussed below.

TAX CREDIT – For tax years commencing on or after January 1, 2024, but prior to January 1, 2029, this bill creates an excise tax credit in the tax year in which a conversion is completed, as follows:

(1) Up to 50 percent of the conversion costs, not to exceed $25,000, incurred by a qualified business for converting the qualified business to a worker-owned cooperative or an employee ownership trust; or

(2) Up to 50 percent of the conversion costs, not to exceed $100,000, incurred by a qualified business for converting the qualified business to an employee stock ownership plan.

Status – Senate bill – Recommended for passage, refer to Senate Finance, Ways, and Means Committee; House bill Rec. for pass; ref to Finance, Ways, and Means Committee.

Washington State – Senate Bill 5096, Washington Employee Ownership Program. The Washington Employee Ownership Program (program) is created to support efforts of businesses considering sale to an employee ownership structure. The program is administered within the Department of Commerce (Commerce) and overseen by the Washington Employee Ownership Commission (Commission). April 17, 2023 this bill has passed both the Senate and House, and is on the Governors desk for signature.