Congressman Blake Moore Introduces Bipartisan Legislation to Strengthen Employee Stock Ownership Plans

WASHINGTON – Congressman Blake Moore led a bipartisan group of lawmakers in introducing legislation that will support Employee Stock Ownership Plans (ESOPs) and empower business owners who want to transition to employee ownership. Congressman Moore was joined by Congresswoman Lori Trahan (D-MA), Congressman Dusty Johnson (R-SD), and Congressman Bill Foster (D-IL) in introducing this bill. Senators Chris Van Hollen (D-MD) and Jerry Moran (R-KS) are leading companion legislation in the Senate.

The American Ownership and Resilience Act would enable the sale of American businesses to American workers through an ESOP plan by equipping the U.S. Department of Commerce with a zero-subsidy investment facility. This will, in turn, prevent the offshoring of American manufacturing, enhance supply chain resiliency, keep businesses American-owned and operated, and enable American workers to build substantial retirement assets. 

“We will soon witness the greatest transfer of assets in American history as over two million U.S. business owners near retirement in the next decade. During a period of increased global competition, ESOPs serve as a valuable option to keep businesses open and American-owned,” said Congressman Blake Moore. “The American Ownership and Resilience Act will empower and support business owners and workers who want to transition to employee ownership, building substantial livelihoods for new employee owners and protecting our domestic supply chain from hostile foreign competitors.”

“Giving workers a real stake in the companies they help build isn’t just fair – it’s good business,” said Congresswoman Lori Trahan. “Employee ownership drives stronger performance, deeper retention, and lasting profitability. It can turn a 9-to-5 job into a wealth-building opportunity, offering working families the chance at both stability and long-term success. The bipartisan American Ownership and Resilience Act expands access to this powerful – and too often out-of-reach – path to ownership and economic mobility for workers across the country.”

“American businesses are the backbone of our economy, but many are at risk of dissolving or being sold to foreign competitors like China,” said Congressman Dusty Johnson. “The American Ownership and Resilience Act will keep these companies local, strong, and American-owned. Employee ownership is a pro-worker, pro-America solution.”

"I'm proud that the company my brother and I started in our basement with $500 dollars from our parents, that now provides over 1,500 good manufacturing jobs in the Midwest, has recently completed the transition to an ESOP and is now 100 percent owned by the employees who built it," said Congressman Bill Foster. “Employee ownership provides hardworking Americans with a pathway to financial security and a real stake in their future."

“American workers are the driving force behind our economy. By spurring more employee ownership of businesses, we’re investing in our workers and putting more of their hard-earned dollars back in their pockets, instead of sending U.S. profits overseas,” said Senator Chris Van Hollen. “This bipartisan bill will offer businesses the tools they need to transition to an employee ownership structure – empowering everyone to share in the success of the enterprise and keeping jobs, opportunity, and profits in our communities across America.”

“When businesses use an Employee Stock Ownership Plan (ESOP), it allows for employees to gain ownership as they work at the company,” said Senator Jerry Moran. “Our legislation would provide more flexibility to employers who wish to transition to an ESOP by mobilizing private investors to close the financing gaps that frequently prevent employee-ownership. Strengthening ESOPs give employees a meaningful stake in their employer and allows companies to retain a productive and satisfied workforce.”

"The approaching wave of generational business succession across America poses acute risks to the vitality of our industrial base,” said Jack Moriarty, Executive Director of Lafayette Square Institute. “By enabling the private sector to accelerate the growth of employee ownership, the American Ownership and Resilience Act offers a bipartisan opportunity to bolster U.S. economic security and supply chain resilience while creating an additional source of retirement wealth for American workers and families.”

“The American Ownership and Resilience Act offers a tremendous opportunity to mobilize capital to build wealth for hard working Americans, generate market rate returns for investors while building more resilient domestically owned companies," said Jim Sorenson, Founder of Sorenson Impact Group. "Business ownership is one of the most important avenues of wealth creation that is out of reach for many Americans. Employee Stock Ownership Plans have long been a way for employees to become owners building wealth in the privately held companies they work for, using the tools of capitalism and free markets to broaden economic prosperity."

“The ESOP Association strongly supports the bipartisan American Ownership and Resilience Act, which takes a proven approach to solving one of the biggest challenges facing employee ownership: access to capital,” said James Bonham, President and CEO of the ESOP Association. “By unlocking new financing options without creating a burden on taxpayers, this bill offers a smart, practical solution that could dramatically expand the reach of employee ownership across the country. We are grateful to the bill’s sponsors in the House and Senate for working closely with the ESOP community and for building broad, bipartisan support for this commonsense legislation.”

“Improving access to capital—especially through low-cost, high-impact solutions like the American Ownership and Resilience Act—is essential for accelerating the growth of employee-owned businesses,” said Ben Holder, Chief Executive Officer of Plastic Products Company Inc. and Chair of the ESOP Association’s Public Policy Council. “This bill represents a major step forward in addressing a long-standing barrier for companies transitioning to employee ownership. We applaud the Members in the House and Senate who are leading this effort for their commitment to advancing broad-based ownership.”

"Maintaining a robust American manufacturing sector requires steering private institutional capital sources towards domestic production,” said Julius Krein, Chairman of the New American Industrial Alliance. “Small and mid-sized American manufacturers across the country are preparing for business succession, and employee ownership offers a unique opportunity to prevent offshoring while investing in the American workforce.”

Background:

Nearly half of all private American businesses are owned by individuals at or near retirement age, and these businesses employ nearly 25 million workers and represent 2.3 million companies. More than half of these business owners are expected to retire in the next five to ten years and opt to sell their business to buyers in the mergers and acquisitions market or shut down, resulting in a loss of jobs and American productivity. 

Nearly 17,000 mergers and acquisitions occurred in 2020 compared to just 150 ESOP transactions. ESOPs have proven to be a valuable alternative, providing more resiliency during economic downturns, supporting domestic manufacturing, and providing employee owners the ability to build retirement assets. The average employee owner has over double the retirement assets of a peer in a traditional business, and employee ownership empowers workers, preserves family businesses, and keeps businesses in their communities. 

Traditional buyers in the mergers and acquisitions market often initiate transactions with sellers and offer substantial liquidity at closing, but the seller often has to self-finance the sale and wait five to ten years to see a return on investment. This is often considered prohibitive despite the existing tax incentives designed to encourage ESOPs. The American Ownership and Resiliency Act encourages owners to sell to employees, strengthening the American industrial base and investing in American workers.

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