The proposed bill, titled "The Rhode Island Opportunity for Employee Ownership Act," aims to facilitate employee ownership of businesses in Rhode Island by establishing a new chapter in the General Laws. It defines key terms such as "employee-owned business," "qualified business," and "qualified employee group."

The act mandates that when the owner of a qualified business decides to sell at least fifty-one percent (51%) of the business, they must notify all current full-time and part-time employees within seven days of the decision. This notification must include the date of the notice, the owner's intent to sell, information about the opportunity for employees to form a group to purchase the business, details about the secretary of state's employee-owned business resource list, and any proposed sale price.

The bill outlines the rights and responsibilities of both the business owner and the employee group during the sale process. If a qualified employee group (QEG) expresses interest in purchasing the business, they have thirty (30) days from the date of the notice to signal their intent in writing and list all members of the QEG. Following this, the owner and the QEG have one hundred eighty (180) days to assess the business's value and negotiate a sale price. If the QEG reaches an agreement on a price that is equivalent or superior to other good-faith offers received, the owner is obligated to sell the business to the QEG.

The act also provides tax exemptions for owners selling their businesses to employee groups under certain conditions, specifically exempting gains from the sale of the qualified business under one million dollars ($1,000,000) from state capital gains tax. Additionally, it ensures that existing labor union membership or collective bargaining agreements remain in effect after the sale and prohibits external governance or management influence from non-worker parties in the resulting business.

The Secretary of State's office is tasked with creating and maintaining a resource list to assist potential employee-owned businesses, and communication notices will be sent to relevant businesses to inform them of the new law. The act will take effect upon passage.