The proposed bill, titled "The Rhode Island Opportunity for Employee Ownership Act," establishes a framework to facilitate employee ownership of businesses in Rhode Island. It introduces a new chapter in the General Laws, defining 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 be in written form and 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.

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. Following this, the owner and the QEG have one hundred eighty (180) days to assess the business's value and negotiate a sale price. The act also stipulates that if the QEG does not purchase one hundred percent (100%) of the business, the provisions still apply if the QEG retains sole voting rights and decision-making power.

Additionally, the act provides tax exemptions for owners selling their businesses under certain conditions, specifically exempting them from state capital gains tax on gains from the sale of the qualified business under one million dollars ($1,000,000). Existing labor union membership or collective bargaining agreements will remain in effect under the new ownership structure.

The Secretary of State's office is tasked with creating and maintaining a publicly visible and searchable resource list to assist potential employee-owned businesses. Furthermore, within sixty (60) days of the act's effective date, the Secretary of State's office must send communication notices to businesses that may qualify under this act, summarizing the law and providing information about the resource list.

The act will take effect upon passage.