Sen. Ron Johnson Introduces Bill Linking ESOPs to Gov't Aid
Following his earlier statement on linking employee ownership to government aid, Senator Ron Johnson (R-WI) has introduced a bill doing just that. In a press release issued on July 21, 2020, Senator Johnson described the Temporary Federal ESOP Grant Program Act. According to the press release, the bill 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."
In the same press release, Senator Johnson spoke of his reasoning behind introducing the legislation, saying, "Unfortunately, many businesses of all sizes remain either totally or significantly shut down months into the coronavirus pandemic. PPP provided short-term financial support to small businesses, but now Congress needs to think outside the box to help otherwise viable businesses reopen. . . .This legislation would help affected businesses resume operations while also giving employees a stake in a business’ success. I hope my colleagues will embrace this innovative approach to an unprecedented challenge." James Bonham of the ESOP Association called for the bill to be included in the next COVID-19 relief bill, expected in the coming weeks.
The full text of the legislation can be found here. The bill would sunset in September 2022. We will update this post with more detail, including any developments as it moves through Congress.