House Resolution 1244, the Promotion and Expansion of Private Employee Ownership Act of 2011, was introduced by a bi-partisan group of key members of the House Ways and Means Committee. H.R. 1244 has four main objectives:
- Permits 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
- Permits lenders to S corporations with 50% or more ESOP ownership to exclude 50% of the interest from the loan if used to acquire stock for the ESOP
- Establishes an office in the Department of Treasury to provide technical assistance to S corporations with ESOPs
- Provides that an S or C corporation small business that is eligible for one of the many programs provided by the Small Business Administration to remain eligible for these programs if the company becomes majority-owned by an ESOP and the workforce remains the same or nearly the same
We encourage all ESOP companies and their advisors to ask their local Congressmen to support the bill. More information on the bill and how to contact your Representatives can be found on The ESOP Association’s website at www.esopassociation.org under Government Affairs.