AN ACT Relating to eliminating the Washington employee ownership program;
Summary
HB2047 repeals Washington’s employee ownership program and sunsets related statutory provisions. The bill removes the state program that was designed to help businesses transition to employee ownership structures, including employee stock ownership plans (ESOPs), worker-owned cooperatives, and employee ownership trusts. It also eliminates the associated employee ownership commission and the revolving loan program that had been created to support such transitions.
In addition to ending the program, the bill amends tax law to terminate a business and occupation tax credit that had been available for costs incurred in converting a qualifying business to employee ownership. The credit had applied to conversion-related professional services and transition costs, subject to caps, carryover rules, and expiration dates. The bill also provides expiration dates for the program’s administrative sections and related account provisions, while preserving the framework only long enough to wind down the program and its funding mechanisms.
Impact
The bill changes Washington law by striking or expiring multiple sections in the Revised Code of Washington that established the employee ownership program, the employee ownership commission, and the employee ownership revolving loan account. It also ends the B&O tax credit for employee ownership conversion costs, affecting businesses that were considering or actively pursuing transitions to employee-owned structures. State agencies, especially the Department of Commerce and the Department of Revenue, lose ongoing authority to administer the program, issue guidance, and support related financing and technical assistance after the effective expiration dates.
Sentiment
The voting history suggests mixed but ultimately favorable sentiment toward the bill’s passage, with narrower margins in the Senate than in the House. The House and Senate both approved the measure, but the Senate final vote was close, indicating more divided views on whether the employee ownership program should be eliminated. The absence of committee transcript excerpts limits direct insight into debate, but the recorded votes show that the bill had enough support to advance despite notable opposition.
Contention
The main point of contention is the policy choice to eliminate a program intended to promote employee ownership and business succession. Supporters of repeal likely viewed the program as unnecessary, duplicative, or not an appropriate use of state resources, while opponents likely saw it as a valuable tool for preserving local businesses, supporting worker ownership, and facilitating ownership transitions. The tax credit, revolving loan support, and state-coordinated technical assistance are the most likely flashpoints, because they directly affect financing and feasibility for businesses seeking employee ownership conversions.
Enacting an excise tax on large employers on the amount of payroll expenses above the social security wage threshold to fund programs and services to benefit Washingtonians.