Promotion and Expansion of Private Employee Ownership Act of 2025
Sponsored By: Senator Daines, Steve [R-MT]
Introduced
Summary
Expands employee ownership by making certain S‑corporation ESOP stock sales fully tax‑deferrable and by creating federal offices to grow and support ESOPs. This bill would remove an existing timing limit on that tax deferral and build a government support system to help companies and workers form ESOPs.
Show full summary
- S‑corporation owners and sellers would be able to defer tax on qualifying sales of employer stock to employee stock ownership plans (ESOPs) prospectively, removing the prior December 31, 2027 deadline and repealing a Section 1042(h) constraint for sales after enactment.
- Workers and ESOP companies would get clearer access to small business supports because the Small Business Act would treat ESOP participants as directly owning their proportional share for SBA loans, preferences, and programs, effective January 1 of the year after enactment.
- Federal support would expand: the Treasury must create an S Corporation Employee Ownership Assistance Office within 90 days to provide outreach and technical help, and the Department of Labor would add an Advocate for Employee Ownership to coordinate outreach, help resolve ESOP disputes, and publish an annual public report.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Tax breaks for S corporation sellers
If enacted, owners who sell S corporation stock to employee stock ownership plans (ESOPs) would be able to use an existing capital‑gains tax deferral starting on the date this Act is enacted. The bill would also remove a legal limit that narrowed that deferral, for sales after enactment. Together these changes would expand and accelerate the tax deferral available to sellers in qualifying ESOP transactions.
ESOP participants keep SBA eligibility
If enacted, starting January 1 of the first calendar year after this Act is enacted, people who hold stock through an ESOP would be treated as directly owning their proportional share of stock for Small Business Act programs. That treatment would help businesses that become majority‑owned by an ESOP keep eligibility for SBA loans, preferences, and similar programs. This change mainly affects small companies that convert ownership to employee stock plans and their worker‑owners.
New federal offices for employee ownership
If enacted, the Treasury would set up an S Corporation Employee Ownership Assistance Office within 90 days to provide education and technical help to S corporations about ESOPs. The Department of Labor would create an Advocate for Employee Ownership to give outreach, assist with disputes, advise on regulations, and report to Congress each year. Congress would be asked to provide funds the Advocate needs to do this work.
Sponsors & CoSponsors
Sponsor
Daines, Steve [R-MT]
MT • R
Cosponsors
Sen. Hassan, Margaret Wood [D-NH]
NH • D
Sponsored 7/24/2025
Sen. Blackburn, Marsha [R-TN]
TN • R
Sponsored 7/24/2025
Sen. Smith, Tina [D-MN]
MN • D
Sponsored 7/24/2025
Sen. Grassley, Chuck [R-IA]
IA • R
Sponsored 7/24/2025
Sen. Van Hollen, Chris [D-MD]
MD • D
Sponsored 7/24/2025
Sen. Tillis, Thomas [R-NC]
NC • R
Sponsored 7/24/2025
Sen. Sanders, Bernard [I-VT]
VT • I
Sponsored 7/24/2025
Sen. Young, Todd [R-IN]
IN • R
Sponsored 7/24/2025
Peter Welch
VT • D
Sponsored 7/24/2025
Sen. Risch, James E. [R-ID]
ID • R
Sponsored 7/24/2025
Sen. Hirono, Mazie K. [D-HI]
HI • D
Sponsored 7/24/2025
Sen. Cantwell, Maria [D-WA]
WA • D
Sponsored 7/24/2025
Sen. Husted, Jon [R-OH]
OH • R
Sponsored 7/24/2025
Sen. Crapo, Mike [R-ID]
ID • R
Sponsored 7/28/2025
Sen. King, Angus S., Jr. [I-ME]
ME • I
Sponsored 7/28/2025
Sen. Ricketts, Pete [R-NE]
NE • R
Sponsored 7/28/2025
Sen. Fetterman, John [D-PA]
PA • D
Sponsored 7/28/2025
Sen. Schmitt, Eric [R-MO]
MO • R
Sponsored 7/30/2025
Sen. Cortez Masto, Catherine [D-NV]
NV • D
Sponsored 7/30/2025
Sen. Sheehy, Tim [R-MT]
MT • R
Sponsored 9/9/2025
Sen. Coons, Christopher A. [D-DE]
DE • D
Sponsored 9/9/2025
Sen. Kennedy, John [R-LA]
LA • R
Sponsored 9/30/2025
Amy Klobuchar
MN • D
Sponsored 9/30/2025
Sen. Fischer, Deb [R-NE]
NE • R
Sponsored 1/15/2026
Sen. Reed, Jack [D-RI]
RI • D
Sponsored 1/15/2026
Sen. Barrasso, John [R-WY]
WY • R
Sponsored 2/9/2026
Sen. Booker, Cory A. [D-NJ]
NJ • D
Sponsored 2/9/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov