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The Employee Ownership Update

Loren Rodgers

March 15, 2019

(Loren Rodgers)

Texas Bill Would Provide ESOP Contracting Preference, Establish State Employee Ownership Center

Bills in each house of the Texas legislature would provide the most comprehensive state effort yet on employee ownership. HB 1198 and SB 1650 would:

Working with Certified EO, Hart wants to use the Texas model to start a national movement for state legislation.

Mike Hart (mikehart@eeace.com) is the founder and board chair of EEA, an ESOP-owned Austin engineering company. Visit TexasESOP.org or contact Mike Hart to learn how to support the effort, and please share their website or this article with anyone who might be interested in calling Texas legislators or otherwise supporting the effort.

Attending the NCEO conference? Join a meeting about Texas and other state-level legislative initiatives at 10:30 on April 9. Contact Thomas Dudley (thomas@certifiedeo.com) at Certified EO for details.

Nebraska Allows ESOP Ownership of Accounting Firms

The Nebraska legislature passed a bill, LB 49, that would authorize the ownership of public accounting firms by ESOPs. The ESOP could own up to 49% of the firm. The bill, introduced by John Stinner (R—Gering), passed Final Reading on Feb. 28 by a vote of 47-0 and was signed into law by Governor Pete Ricketts (R) on March 6. Most states already allow minority ESOP-owned CPA firms, and Minnesota allows majority ownership.

Second Party in South Africa Vows to Promote Employee Ownership

South Africa's main opposition party, the Democratic Alliance, has stated in its party manifesto that if elected it will promote a "ground-up" policy to promote broad employee share ownership. The ruling ANC has already stated that employee ownership will be a key agenda item for it. Neither party has outlined details of what they will specifically do. National elections will be held in June.

Newark Mayor Makes Employee Ownership Economic Centerpiece

In his state of the city address on March 12, Newark mayor Ras Baraka made employee ownership a centerpiece of his economic policy. Baraka said, "We are encouraging employee ownership, and residential- and worker-owned cooperatives. As a beginning, the Council just passed an ordinance that's the first of its kind. It encourages employee ownership for Newark-based businesses. Company owners that are looking to sell or retire from their businesses will have an option of applying to the city for a loan or loan guarantee when transferring ownership to employees. We have begun to engage businesses about this idea, where workers can collectively buy the business with no personal investment but receive ownership as a part of their employee benefit package."

Berkeley Encourages Worker Cooperatives

On February 26, the City Council of Berkeley, California, voted to support the development of worker cooperatives. The ordinance gives cooperatives a preference in securing city contracts, expands the small-business loan fund to cover cooperatives, and provides technical assistance.

The NCEO's 2018 Annual Report

In 2018, the NCEO hosted a record-setting conference, expanded its outreach, and hired some new people. Our research includes new results on the impact of employee ownership on employee economic well-being, and specifically on distressed communities, as well as our ongoing research on investigations by the Department of Labor into ESOPs. Anchored by our annual conference and the Fall ESOP Forum, the NCEO's in-person and online events provided over 48,000 person-hours of education. With the support of our more than 3,300 members, the NCEO invested heavily in its future during 2018: members will be seeing the benefits of those investments throughout 2019. The 2018 annual report (PDF) is online.

Parsons Appears to Be Planning to Go Public

On March 7, Reuters reported that employee-owned Parsons is planning an initial public offering. Parsons is a construction/engineering company that is currently #6 on the NCEO's Employee Ownership 100, our list of the 100 largest majority employee-owned companies in the United States.

Beyster Institute Welcomes New Executive Director

The Beyster Institute at the Rady School of Management at the University of California, San Diego, announced that its new executive director would be Kim Blaugher. Blaugher has more than 30 years of experience as a CPA and consultant in the ESOP field. Rady School Dean Robert S. Sullivan said, "The Beyster Institute plays an important role with companies throughout the U.S. looking to transition to an employee ownership model. Kim will be instrumental in building on the institute's successes to date." Martin Staubus, the Beyster Institute's past executive director, will remain as senior staff member. The NCEO staff warmly welcomes Kim to his new position.

March-April Employee Ownership Report Available Online

The current edition of the NCEO newsletter is now available online for members.

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