Bipartisan Group Introduces Promotion and Expansion of Private Employee Ownership Act of 2025

House Ways and Means Committee chair Mike Kelly (R-PA) and committee member Jimmy Panetta (D-CA) have introduced the Promotion and Expansion of Private Employee Ownership Act of 2025. The proposal does not yet have a bill number. The bill was introduced with six cosponsors equally split between both parties. The bill is identical to S. 2515 in the last Congress.

The bill would:

• Move up the effective date of the 10% deferral of capital gains taxation from the sale of shares to an S corporation ESOP under Internal Revenue Code Section 1042  (as added by the SECURE 2.0 Act of 2022) from 2027 to 2023 and provide that the deferral would be for 100% of the gain, as is currently the case with C corporations.
• Create an S Corporation Employee Ownership Assistance Office in the Department of the Treasury to provide education and outreach on S corporation ESOPs.
• Grandfather any ESOP company that had qualified for set-aside programs through the federal government to be able to continue to qualify after an ESOP gains a controlling interest.
• Direct the Secretary of Labor to appoint an Advocate for Employee Ownership within the Employee Ownership Initiative established under the WORK Act provisions of the SECURE 2.0 Act of 2022. The Advocate would help coordinate federal programs that could support ESOPs and provide assistance to resolve disputes between the DOL and any ESOP sponsor, fiduciary, or participant. An annual report would be required.