1Urging the Department of Community and Economic Development to
2establish promote an employee ownership <-program to promote 
<-3initiative for the purpose of encouraging business retention
4and growth in this Commonwealth.

5WHEREAS, In the Employee Retirement Income Security Act of
61974 (Public Law 93-406, 88 Stat. 892), the United States
7Congress codified a technique of corporate finance which
8utilizes employee stock ownership, officially named an Employee
9Stock Ownership Plan (ESOP); and

10WHEREAS, ESOPs serve the dual purpose of providing retirement
11savings and stock ownership for employees as well as being a
12financing method for businesses; and

13WHEREAS, According to the National Center for Employee
14Ownership (NCEO), there are about 12,000 ESOP-owned companies or
15similar trust-based plans that cover 11 million participants;
16and

17WHEREAS, It is estimated that Pennsylvania has 500 companies
18with ESOPs or similar trust-based plans covering about 900,000

1participants; and

2WHEREAS, Research shows that employee ownership increases
3employment, productivity, wages and sales; and

4WHEREAS, Employee ownership keeps businesses and jobs in
5state, and

6WHEREAS, According to NCEO, ESOP companies are 25% more
7likely to stay in business and employee-owners are four times
8less likely to be laid off during the recent recession; and

9WHEREAS, ESOPs have a number of tax benefits including making
10company contributions and dividend payments tax-deductible; and

11WHEREAS, Business owners may be unaware of ESOPs or lack
12clear understanding about such plans, how they operate and the
13advantages associated with them; and

14WHEREAS, ESOPs could provide an effective tool for companies
15going through ownership transition by preserving their companies
16and jobs through employee ownership rather than closing or
17selling them to out-of-state or foreign buyers; and

18WHEREAS, Increased use of employee ownership plans can
19substantially increase the income and financial security of the
20citizens of Pennsylvania; therefore be it

21RESOLVED, That the Senate urge the Department of Community
22and Economic Development to <-establish promote an employee
23ownership <-program to promote initiative for the purpose of 
24encouraging business retention and growth in this Commonwealth;
25and be it further

26RESOLVED, That the <-program initiative should include:

27(1) education and outreach to inform employees,
28employers and entrepreneurs about the possibility and benefit
29of employee ownership;

30(2) technical assistance <-or assistance in identifying
 

1other resources that may provide technical assistance to
2assist efforts to form and transition to employee-owned
3businesses, to enable employers and employees to explore and
4assess the feasibility of transferring full or partial
5ownership to employees and to encourage employees and
6employers to start new employee-owned businesses; <-and

<-7(3) training employees and employers with respect to
8methods of employee participation in such open-book
9management, work teams, committees and other approaches for
10seeking greater employee input; and

11(4) (3) <-developing partnerships with fostering 
12cooperation among the State System of Higher Education,
13State-related universities <-and a, other State agencies and
14business and industry trade <-association associations and 
15other economic development organizations in order to host
16educational events to promote awareness and understanding of
17employee ownership of businesses.