Legislative Information: Pro-ESOP Bill — H.R. 1244

Leading up to the Las Vegas Conference and Trade Show, November 3 – 4, 2011, we’ll be posting government affairs information that will be discussed at the Conference. Today, and update on H.R. 1244.

H.R. 1244, the “Promotion and Expansion of Private Employee Ownership Act of 2011,” was introduced March 29, 2011by a bi-partisan group of key members of the House Ways and Means Committee: Congressmen David G. Reichert (R-WA), Ron Kind (D-WI), Charles W. Boustany, Jr. (R-LA), Earl Blumenauer (D-OR), Erik Paulsen (R-MN), and Bill Pascrell (D-NJ).

“This bi-partisan declaration of support for employee ownership through the ESOP (employee stock ownership plan) model among privately held companies, especially by the popular S corporation business model, is very impressive,” stated ESOP Association President J. Michael Keeling.

H.R. 1244 will:

1.) permit owners of S stock to sell the stock to an ESOP and defer the capital gains tax on his/her gain if the proceeds are reinvested in the equities of U.S. operating corporations as owners of C corporations stock have done under IRC 1042 since 1984;

2.) permit lenders to S corporations with 50% or more ownership through an ESOP to exclude 50% of the interest from the loan if used to acquire stock for the ESOP;

3.) establish an office in the Department of Treasury to provide technical assistance to S corporations with ESOPs;

4.) provide that a small business, S or C, eligible for one of the many programs provided by the Small Business Administration to remain eligible for SBA programs if the company becomes owned 50% or more by an ESOP, and the workforce remains the same or nearly the same as before the establishment of the 50% ownership by employees through the ESOP.

Current co-sponsors:

Congressman Todd W. Akin (R-MO)

Congressman Rodney Alexander (R-LA)

Congressman Rick Berg (R-ND)

Congressman Earl Blumenauer (D-OR)

Congressman Leonard L. Boswell (D-IA)

Congressman Charles W. Boustany, Jr. (R-LA)

Congressman Bruce L. Braley (D-IA)

Congressman Vern Buchanan (R-FL)

Congressman Russ Carnahan (D-MO)

Congressman Emanuel Cleaver (D-MO)

Congressman Joe Courtney (D-CT)

Congressman Danny Davis (D-IL)

Congressman Robert J. Dold (R-IL)

Congressman Rodney P. Frelinghuysen (R-NJ)

Congressman Jim Gerlach (R-PA)

Congressman Sam Graves (R-MO)

Congressman Gene Green (D-TX)

Congressman Raul Grijalva (D-AZ)

Congressman Maurice D. Hinchey (D -NY)

Congressman Randy Hultgren (R-IL)

Congresswoman Lynn Jenkins (R-KS)

Congressman Timothy V. Johnson (R-IL)

Congressman Ron Kind (D-WI)

Congressman Adam Kinzinger (R-IL)

Congressman David Loebsack (D-IA)

Congressman Blaine Luetkemeter (R-MO)

Congressman Donald A. Manzullo (R-IL)

Congressman Kenny Marchant (R-TX)

Congresswoman Betty McCollum (D-MN)

Congressman Michael H. Michaud (D-ME)

Congresswoman Gwen Moore (D-WI)

Congressman James P. Moran (D-VA)

Congressman Richard Neal (D-MA)

Congresswoman Kristi L. Noem (R-SD)

Congressman William L. Owens (D-NY)

Congressman Bill Pascrell, Jr. (D-NJ)

Congressman Erik Paulsen (R-MN)

Congressman Gary C. Peters (D-MI)

Congressman Todd Russell Platts (R-PA)

Congressman Denny Rehberg (R-MT)

Congressman David Rivera (R-FL)

Congresswoman Ileana Ros-Lehtinen (R-FL)

Congressman Peter J. Roskam (R-IL)

Congressman Aaron Schrock (R-IL)

Congresswoman Allyson Y. Schwartz (D-PA)

Congressman Pete Sessions (R-TX)

Congressman Lee Terry (R-NE)

Congressman Glenn Thompson (R-PA)

Congressman Patrick J. Tiberi (R-OH)

Congressman Joe Walsh (R-IL)

Congressman Timothy J. Walz (D -MN)

Congressman Peter Welch (D-VT)

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