New Jersey is the latest state to pass pro-ESOP legislation, with Governor Mikie Sherrill signing S4218/A5016 into law on September 4. The law codifies and expands the “Employee Stock Ownership Plan Assistance Program” that offers grants to cover the costs of feasibility studies for businesses considering transitioning to employee ownership.
The law also creates the Employee Ownership Transition Program which will provide employee ownership education and outreach to businesses as well as affordable financing through the Employee Ownership Revolving Loan Fund. The revolving loan funds would allow New Jersey to provide low-interest loans to companies to support majority employee ownership transitions and cover transaction costs. The bill did not include initial funding for the fund.
New Jersey’s action is the latest development in growing interest in state legislation supporting existing ESOPs and promoting the creation of new ones. As policymakers look for ways to retain local businesses and protect jobs, ESOPs are a practical tool that benefits workers and addresses the growing crisis of baby boomer business owners retiring without succession plans. The ESOP Association will continue working with state legislatures to advocate for legislation that expands the benefits of ESOPs to workers throughout the country while providing a reliable succession plan for retiring business owners.
