AB 1010

This bill requires the Board of Regents of the University of Wisconsin System

to establish and maintain a center for employee ownership to provide education and

outreach to inform business owners about the benefits of employee ownership

successions, including providing initial consultations to business owners exploring

the possibility of transferring full or partial ownership to employees. In addition, the

bill requires the Wisconsin Economic Development Corporation to establish an

economic development program to make employee ownership loans or loan

guarantees to finance an eligible transaction. Under the bill, an “eligible

transaction” is the transfer of shares of a corporation or member interests of a limited

liability company to an employee stock ownership plan, an employee ownership

trust, or a direct share ownership plan.

The bill also provides certain income and franchise tax benefits to an

employee-owned business, such as excluding from taxation the income of an

employee ownership trust. Under the bill, an employee ownership trust has the

exclusive purposes of creating employee ownership by obtaining and holding shares

or member interests of an employer and of promoting the financial and nonfinancial

interests of all tenured employees. The bill defines “tenured employee” to mean any

employee or independent contractor who has provided at least 1,000 hours of service

to the employer within the immediately preceding 12-month period.

Finally, the bill provides that the Department of Administration must attempt

to ensure that 5 percent of the total amount expended to procure tangible personal

property and services is paid to businesses in which a certain percentage of the

employer stock or membership interest is held by an employee stock ownership plan

or employee ownership trust or held through a direct share ownership plan.