PA Senate Passes Major Employee Ownership Bill
Bill would provide outreach support and feasibility funding
On a 48-1 vote on October 5, the Pennsylvania Senate passed Senate Bill 478. The bill establishes an Office of Employee Ownership in the Department of Community and Economic Development (DCED); creates an advisory board with representatives from business, labor, finance, legal, academia, and government; and establishes a grant and loan program to help fund feasibility studies and other preliminary activities. The bill requires the appointment of an Employee Ownership Advocate with the DCED to oversee the program. The bill does not authorize any specific amount of funding for the program but authorizes funding from several sources, including the Pennsylvania Small Business First Fund.
The bill directs the DCED to select and fund a Pennsylvania nonprofit to help run the outreach program. The bill would provide funds for 50% of the costs of feasibility studies to assess whether a company can convert to ownership through an ESOP, worker cooperative, employee ownership trust, or direct employee ownership (where employees buy stock in the company). The maximum assistance is $35,000. If the company does convert, it would be required to repay the loan; if it does not convert, the money becomes a grant.The bill now moves on to the House, where it will need to go through a committee before being put to a vote for the entire House. If it passes in its current form, it goes to the governor. If there are changes, a conference committee will be needed.