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 (7) days of the decision. This notification must include details about the sale, the owner's intent to sell, the opportunity for employees to form a group to purchase the business, and access to resources for assistance, including the secretary of state's employee-owned business resource list.

The bill outlines the procedures for qualified employee groups (QEGs) to express interest in purchasing the business, including a thirty (30) day period to signal intent to compete for the purchase and timelines for business valuation. It also provides exemptions from capital gains tax for owners selling their businesses to employee groups under certain conditions, specifically for gains under one million dollars ($1,000,000). The act emphasizes the importance of maintaining democratic governance within the newly formed employee-owned businesses, ensuring that QEGs hold sole voting rights and decision-making power. Additionally, it stipulates that existing labor union membership or collective bargaining agreements remain in effect after the sale.

The provisions of this act will become effective sixty (60) days after communication notices are sent to qualifying businesses in Rhode Island.