Tax code reforms and educational outreach would be leveraged under bipartisan legislation introduced by U.S. Sen. Pat Roberts (R-KS) on Wednesday to encourage growth of S corporations that are owned by Employee Stock Ownership Plans (S-ESOPs).
Under ESOPs, employees receive stock in a sponsoring company as part of their compensation package. The ownership stake in the company is designed to foster committed workforces for companies and retirement savings for employees.
The Promotion and Expansion of Private Employee Ownership Act would ensure that businesses that offer ESOPs continue to qualify for Small Business Administration (SBA) loans, contracting assistance and other applicable business development programs.
“The legislation will encourage employees to save for future needs, including retirement,” Roberts said. “The more we do to help people save, the more resources are freed to make critical investments, particularly those that grow jobs and help the economy.”
Additionally, the bill would make technical changes to the tax code to enable businesses to maintain minority-owned, women-owned or veteran-owned status required to qualify for certain SBA programs.
Roberts introduced the bill with bipartisan support from U.S. Sen. Ben Cardin (D-MD), who said “Americans deserve the opportunity to build secure retirement savings.”
Original cosponsors of the bill include U.S. Sens. Roy Blunt (R-MO), Susan Collins (R-ME), Jerry Moran (R-KS), Rob Portman (R-OH) and John Thune (R-SD).