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Promotion and Expansion of Private Employee Ownership Act of 2021
12/31/2022, 4:58 AM
Summary of Bill HR 4141
The legislation includes provisions for technical assistance programs, grants, and loans to help businesses navigate the process of becoming employee-owned. It also establishes a national center for employee ownership to provide education and training on the benefits and mechanics of employee ownership.
Additionally, the bill includes measures to promote awareness of employee ownership among entrepreneurs, investors, and policymakers. This includes creating a public database of employee-owned businesses and conducting outreach and education campaigns to highlight the advantages of this ownership structure. Overall, the Promotion and Expansion of Private Employee Ownership Act of 2021 aims to foster a more inclusive and equitable economy by promoting employee ownership as a viable business model. It seeks to empower workers, promote wealth-building opportunities, and strengthen local economies through the expansion of employee-owned businesses.
Congressional Summary of HR 4141
Promotion and Expansion of Private Employee Ownership Act of 2021
This bill expands tax incentives and federal assistance for employee stock ownership plans (ESOPs) that are sponsored by S corporations.
The bill provides additional tax incentives for ESOPs by (1) extending to all domestic corporations, including S corporations, provisions allowing deferral of tax on gain from the sale of employer securities to an ESOP; and (2) allowing a tax deduction for 50% of the interest received by a bank on loans to S corporation-sponsored ESOPs for the purchase of employer securities.
The Department of the Treasury must establish the S Corporation Employee Ownership Assistance Office to foster increased employee ownership of S corporations.
The bill defines an ESOP business concern for purposes of the Small Business Act as a business concern that was eligible for a loan, preference, or other program under such Act before more than 49% of the business concern was acquired by an ESOP.
