Update: California Employee Ownership Bill Passes Senate Unanimously
Bill now moves to Assembly
California Senate Bill 1407, the Expanding Employee Ownership Act, has passed without dissent in the California Senate. As discussed in a previous post, this bill, if it becomes law, would be the most significant step forward by a state yet in promoting employee ownership. Introduced by Senator Josh Becker, the bill would provide outreach funding, access to transaction financing, and financial support for technical assistance for conversions to employee ownership. While the bill appears to have no opposition and has been endorsed by a wide variety of groups, letters to Assembly members in support of the bill would help move it forward. California legislation often serves as a model for other states, so its impact could well go beyond the state.
Specifically, the bill would:
- Create a “California Employee Ownership Program” to be administered by an “Employee Ownership Program Manager.”
- Appropriate funds to make grants to qualified nonprofits to provide outreach and education programs on employee ownership in the state.
- Provide grants of up to $50,000 per company to pay for up to 50% of the cost of conducting feasibility assessments for employee ownership transitions.
- Direct the Program Manager to “work with all California state agencies whose regulations and programs affect employee-owned companies, and businesses with the potential to become employee owned, to enhance opportunities and reduce barriers.”
- Direct the Program to “work with the California Infrastructure and Economic Development Bank, the California Pollution Control Financing Authority, and related entities to shape and implement guidance on lending to broad-based employee ownership vehicles.” This could result in these agencies making loans or loan guarantees for ESOP transition (the Pollution Control Financing Authority has a very broad scope that possibly could include such loans).
The bill has been supported by Project Equity, Ownership America, the Democracy at Work Institute, and SEIU-IHW. If you would like to voice your support for the bill, we have a sample letter of support (Word document).