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The 2017 Tax Cuts and Jobs Act affects ESOPs in a variety of ways. The law created:

The American Rescue Plan Act of 2021 reauthorized and funded a new round of the State Small Business Credit Initiative (SSBCI 2.0), which provides a combined $10 billion to states, the District of Columbia, territories, and tribal governments to empower businesses to access capital needed to invest in job-creating opportunities as the country emerges from the COVID-19 pandemic. Each state is responsible for creating the SSBCI 2.0 programs they will use to deploy federal dollars received.

When a company becomes employee-owned, it can often act as the catalyst for significant change in behaviors, norms, and workplace culture.

The number of new ESOP cases making it to court continued to decline in the period from June 30, 2018, to June 30, 2019, with just 13 new cases. The table below shows the issues that were involved in the cases. Several cases involved more than one issue, so the number does not add to 13.

There were 25 new ESOP cases that made it to court between July 1, 2020 and July 31, 2021.

After the excitement of an ESOP launch, the realization may set in that there is a lot of work ahead to make the plan effective. In your first year, there are many key steps to take to make this happen. This article describes some of these and provides links to NCEO resources (most of them free to members) designed to make getting started a lot easier.

The recent announcement that the 800 employees of CHI Overhead Doors would receive an average of $175,000 each from the $3 billion sale of the company to Nucor by the private equity firm KKR generated considerable publicity— and debate.

MYTH #1: ESOPs are too risky for employees

Leveraged ESOP accounting can seem counterintuitive at times, especially on the balance sheet. In a presentation at the 2023 Annual Conference, Brian Sharkey of Kreischer Miller walked attendees through how the process works.

The biggest development in employee ownership covered in this newsletter is the release of new research by the NCEO and sponsored by ESCA.