Relates to the establishment of a state university-based center for employee ownership that provides education and outreach to business owners regarding employee ownership.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1920
SPONSOR: Zinerman TITLE OF BILL:
An act to amend the economic development law, the public authorities law
and the tax law, in relation to the establishment of a state universi-
ty-based center for employee ownership; and to repeal certain provisions
of the economic development law relating thereto
PURPOSE OR GENERAL IDEA OF BILL:
This bill provides several updates and revisions to current law to
support the expansion of employee-owned enterprises or worker cooper-
ative businesses.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends the Economic Development Law and creates the Center for
Employee Ownership, housed within the State University of New York, out
of a defunct economic development program to support education and
outreach on employee ownership succession plans.
Sections 2-6 amends the Public Authorities Law and revitalizes a defunct
lending program that supports loans and loan guarantees to finance
employee-owned businesses, especially in the case of succession and
purchase of a pre-existing business by employees. The authority shall
have authorization to lend up to $100 million to such businesses, and
all loans shall be repaid to the authority with proceeds used for addi-
tional lending.
Section 7 amends the Tax Law to provide complete capital gains tax
exemption for sale of stock to an employee-owned enterprise.
Section 8 is the effective date.
JUSTIFICATION:
Employee-owned businesses and worker cooperatives are a vital business
sector that employs 13.5 million workers across the country at over
7,000 companies. New York provides a modicum of support for such busi-
nesses, but several programs have become defunct and require new author-
ization and revision to properly support this growing segment of the
state's economy. This legislation will help support the creation of new
employee-owned businesses by focusing on support for succession plan-
ning, so that a business can continue when the owner retires or moves on
by spinning the business off to a cooperative employee-owned enterprise.
PRIOR LEGISLATIVE HISTORY:.:
2017-18: S.5685/A.8368(Gjonaj)- Referred. Commerce, Economic Development
and Small Business
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Minimal. All funding authorized under this bill would be comprised of
pre-existing appropriations or through loans or loan guarantees that
will be repaid by the affected entities.
EFFECTIVE DATE:
Immediately, except that section one of the bill shall take effect 180
days after the bill shall have become a law.
