BILL NUMBER: S339
SPONSOR: BAILEY
 
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 of the bill amends the Economic Development Law to create the
Center for Employee Ownership, housed within the State University of New
York, from a defunct economic development program that supported educa-
tion and outreach for employee ownership succession plans.
Sections 2-6 amend 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 preexisting 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 contains the effective date.
 
JUSTIFICATION:
Employee-owned businesses and worker cooperatives are a vital business
sector that employs approximately 13.5 million workers across the coun-
try at over approximately 7,000 companies. New York provides a modicum
of support for such businesses, but several programs have become defunct
and require new authorization 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 planning, so that a business can continue when
the owner retires or moves on by spinning the business off to a cooper-
ative employee-owned enterprise.
 
PRIOR LEGISLATIVE HISTORY:
2019-20: S.2184 - Reported to Finance
2021-22: S.3313 - Reported to Finance 2023-24: S.962 - Passed Senate
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Minimal. All funding authorized under this bill would be comprised of
preexisting appropriations or through loans or loan guarantees that will
be repaid by the affected entities.
 
EFFECTIVE DATE:
Immediately, except section one of the bill shall take effect 180 days
after the bill shall have become a law.

Statutes affected:
S339: 104-a economic development law, 1836-a public authorities law, 1836-d public authorities law, 1836-d(1) public authorities law, 612 tax law, 612(c) tax law