Baldwin Sponsors Introduction of Bipartisan Legislation to Help Businesses Restore Capital, Give Employees Stake in Business Success
WASHINGTON, D.C. – U.S. Senator Tammy Baldwin sponsored the introduction of the Temporary Federal ESOP Grant Program Act, bipartisan legislation to recapitalize businesses as they resume operations by helping them to create or expand an employee stock ownership plan (ESOP).
“Wisconsin has a rich history of employee-owned businesses and Congress should do more to support this successful model. This bipartisan legislation will provide grants to businesses and help encourage more workers to establish and expand the employee-owned stakes in their companies,” said Senator Baldwin.
The bipartisan legislation, introduced with Senator Ron Johnson (R-WI), would provide businesses a federal grant on a per-employee basis conditioned on the business restructuring its ownership to a standardized employee stock-ownership plan.
The Temporary Federal ESOP Grant Program Act would:
- Require the Treasury secretary to establish the grant program within 30 days of enactment.
- Authorize a grant of up to $20,000 per employee who is a participant in the employee stock ownership plan’s trust.
- Authorize up to $50,000 for costs incurred in developing the employee stock ownership agreement.
- Authorize the Treasury secretary to transfer unobligated CARES Act funding to carry out the grant program.
Businesses applying for the grant would have to provide a completed ESOP agreement, documentation for the independent valuation of the business as laid out in the agreement, and a certification that the grant funds are used for the purchase of employer securities, which in turn is put toward business operations. The program would sunset on Sept. 30, 2022.
Full text of the legislation can be found here.
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