WASHINGTON — Sen. Jon Husted, R-Ohio, has thrown his support behind the Promotion and Expansion of Private Employee Ownership Act of 2025, co-sponsoring the bipartisan legislation led by Sens. Steve Daines, R-Mont., and Maggie Hassan, D-N.H. Introduced on July 24, the bill aims to enhance Americans’ retirement security by expanding Employee Stock Ownership Plans (ESOPs) for S corporations, removing tax and regulatory hurdles to encourage business owners to sell their companies to employees.
“An ESOP is good for employees and local communities because it gives workers an ownership stake that builds retirement and job security, while keeping businesses rooted locally and strengthening community prosperity,” Husted said. He highlighted the benefits for Ohio’s small businesses, noting that employee ownership prevents sales to private equity firms that often lack ties to local communities.
With 47% of U.S. private sector workers lacking access to employer-sponsored retirement accounts, the bill promotes ESOPs as a qualified retirement plan offering tax advantages and a direct stake in company success. It includes a tax incentive for S corporation owners who sell to an ESOP and reinvest proceeds in specific investments within a set timeframe, making employee ownership financially appealing.
The legislation also establishes an S Corporation Employee Ownership Assistance Office within the Department of the Treasury to provide education and technical support. It ensures small businesses adopting ESOPs retain Small Business Administration (SBA) certification, addressing a regulation that revokes eligibility when an ESOP acquires over 49% of a company. Additionally, it creates an Advocate for Employee Ownership at the Department of Labor to promote and support these initiatives, including dispute resolution and inter-agency coordination.
Supported by a diverse group of senators, including Chuck Grassley, R-Iowa, Bernie Sanders, I-Vt., and Maria Cantwell, D-Wash., the bill builds on prior laws like the 1996 Small Business Job Protection Act, which first allowed ESOPs in S corporations. It accelerates a tax deferral from the SECURE 2.0 Act of 2022, effective upon enactment, and removes limitations on certain ESOP stock sales to ease ownership transitions.
The Senate Committee on Finance will review the bill.