Business View Magazine Feb 2023

149 BUSINESS VIEW MAGAZINE VOLUME 10, ISSUE 2 THE ESOP ASSOC I AT ION steps to promote employee ownership and signal to the marketplace that this is something that both parties would like to see grow over the next ten years.” Another new federal law is the WORK (Worker Opportunity, Readiness and Knowledge Act, sponsored in the Senate by Senators Bernie Sanders and Jerry Moran. “That’s another indicator of the broad and bipartisan support for employee ownership,” Bonham notes. “When you can get a conservative Republican from Kansas to co-sponsor a bill with an Independent socialist from Vermont, it tells you that this is probably a pretty good thing.” “The WORK Act includes several provisions,” Bonham continues. “It creates an office of employee ownership within the U.S. Department of Labor that is tasked with promoting and advancing ESOPs. That’s a big deal because the Department of Labor is our primary regulator. To have an office specifically tasked with promoting this form of ownership – that sends a very strong message to the marketplace that this is a model that our government is strongly trying to encourage.” “Another aspect is that it provides $50 million worth of grants over the next five years that states can use for the promotion of employee ownership, including providing direct funding and grants for ESOP feasibility studies to be performed by companies that are thinking of forming an ESOP. Those grants can be as much as $50,000 per company. Embedded in there, as well, is language that will direct the U.S. Department of Labor, again, our primary regulator, to promulgate final regulations on how a company should value the shares that are being bought by an ESOP.” “We are seeing a lot of activity at the state level, as well. Colorado has been the leader with Governor Polis creating a statewide commission to support employee ownership. He also created tax incentives and grants for new ESOP formation. And, sure enough, it’s resulting in a lot more ESOPs being formed in Colorado. And there are other states beginning to follow that model; California is one of them. And although we would have liked to have seen funding attached to the legislation that they passed, they did pass a bill, so that was a first good step. The bottom line is there’s a lot of activity promoting employee ownership right now.” Bonham adds that the ESOP Association is not advocating for its agenda in a vacuum. “We work with a lot of organizations,” he shares. “For example, at our national conference in Washington, this year, we did a town hall meeting with the National Governors Association and the National Association of Counties to talk about state programs and incentives.” “We also reach out to other national trade associations; we work with the associations that represent retirement plans; we work with the Chamber of Commerce. There’s a lot of interest and a lot of commonalities to some of the core issues that affect ESOPS, 401(k)s, and other types of qualified retirement plans.