ECONOMIC GROWTH-Week of Jan. 23, 2012

SSB 3014 – Employee Stock Ownership Plans (ESOPs)

COMMITTEE ACTION:

SSB 3014 relates to employee stock ownership plans (ESOP). An ESOP is a tool for allowing the owners of companies to share the business equity with employees and provide a retirement plan for those employees. SSB 3014 provides for a $1 million appropriation to establish a loan/forgivable loan program to businesses interested in forming an ESOP. The program would be administered by the Iowa Economic Development Authority. In addition, the appropriation would be used for conferences that would provide education and provide networking opportunities for professionals and businesses on the benefits for ESOPs. In addition, the bill provides a capital gain deduction to those business owners who sell their business to employees in the form of an ESOP. An amendment was adopted in committee to change the fiscal year from an FY12 appropriation to an FY13 appropriation. [1/24: short form]