Tennessee Employee Ownership Bill Passes Key Committees
The “Employee Ownership, Empowerment, and Expansion Act” (SB0085 and HB0154) has unanimously passed authorizing committees in both houses of the Tennessee General Assembly. The bill would provide a feasibility assessment and implementation tax credit for ESOPs, worker coops, and employee ownership trusts (EOTs) of up to 50% of the first $100,000 for ESOPs and $25,000 for worker coops and EOTs. It also would make employee-owned companies eligible for the same contracting preferences as minority-owned, woman-owned, service-disabled, veteran-owned, and disabled-owned businesses. It also directs the state to create an outreach program with existing resources to educate minority business owners about the law. Funds for the bill now have been included in the upcoming budget from the governor, and fiscal committees in both houses must approve it.
One notable feature of this bill is that it includes EOTs, a form of employee ownership that emerged in the United States less than a decade ago. The definitions and regulations on employee ownership trusts vary from state to state, and this bill defines an EOT as "an indirect form of employee ownership in which a trust holds a controlling stake in a qualified business and benefits all employees on an equal basis" (now Tennessee Code Title 67, Chapter 4, Part 20, Section 2024(b)(2)).