Young, Colleagues Introduce Bill to Boost Employee Ownership of Businesses

WASHINGTON – U.S. Senator Todd Young (R-Ind.) joined colleagues in introducing legislation to make it easier for private companies to transfer ownership of a business to their employees. Currently, over 30 percent of U.S. corporate stock is owned by foreign investors, and foreign corporate ownership is set to increase as a wave of business owners in the baby boom generation retire and sell their companies (known as the silver tsunami). The American Ownership and Resilience Act would return a greater share of American profits to American workers by supporting the sale of businesses to their employees.

“This legislation will make it easier to establish or expand employee-ownership, incentivizing American businesses and creating new economic opportunities for Hoosier small business owners and their employees,” said Senator Young.

Nearly half of all private businesses are owned by individuals who are at or near retirement age – totaling 2.9 million companies that employ over 32 million workers. Many of these owners will sell their businesses to buyers in the mergers and acquisitions (M&A) market or close their doors, ultimately resulting in the loss of jobs and businesses in local communities. Employee ownership can be a solution to preserving those jobs and local economic activity, but the current process of transitioning to this model is burdensome. The status quo typically places the onus on the business owner to initiate the transaction, ensure compliance with complex regulations, and provide the financing themselves – a difficult ordeal that, provided it is successful, ends with owners waiting several years to receive their full payout from the transaction.

The American Ownership and Resilience Act creates a new zero-subsidy investment facility administered by the U.S. Commerce Department to provide loan guarantees to support licensed private investment funds devoted to expanding employee ownership at small and mid-size businesses. These investment funds would finance and facilitate the process of selling a company to its employees and sustain and expand existing employee-owned firms.

In addition to Senator Young, U.S. Senators Chris Van Hollen (D-Md.), Jerry Moran (R-Kan.), Tammy Baldwin (D-Wis.), Jeanne Shaheen (D-N.H.), Eric Schmitt (R-Mo.), and Peter Welch (D-Vt.) co-sponsored the legislation.

U.S. Representatives Blake Moore (R-UT-1), Lori Trahan (D-MA-3), Dusty Johnson (R-SD), and Bill Foster (D-IL-11) introduced legislation in the House of Representatives.

Full text of the legislation can be found here.