Senate approves Libby bill to spur development of cooperatives and employee-owned businesses

Legislation from Sen. Nate Libby, D-Lewiston, to incentivize and assist with the development of cooperatives and employee-owned businesses was unanimously approved by the Maine Senate on Wednesday.

“By incentivizing and assisting with the conversion of business assets to cooperative or employee ownership, we can make progress on two of the greatest challenges facing Maine’s economy: workforce development and retention,” said Sen. Libby. “This bill comes from ideas that have been supported by everyone from Ronald Reagan to Bernie Sanders – a breadth of support reflected in today’s unanimous votes.”

As amended, LD 1520, “An Act To Create and Sustain Jobs through Development of Cooperatives and Employee-owned Businesses,” excludes from Maine income tax the amount of gain, up to a maximum of $750,000, recognized by a business owner in transferring the business to an employee stock ownership plan, eligible worker-owned cooperative, consumer cooperative or affordable housing cooperative, as well as interest from the loans that finance these transfers.

The bill also requires the Department of Economic and Community Development (DECD) to contract with an outside organization to establish a program to inform and educate Mainers about employee-owned businesses and how these transitions can happen. The program also would connect them to available resources, including financing.

LD 1520 also was approved unanimously in the Maine House of Representatives on Wednesday, and now faces additional votes in both bodies.