Amd §54, Work Comp L; amd §163, St Fin L; amd §3032, Ed L; add §95, Coop Corps L; amd §612, Tax L
Relates to coverage for members of a worker cooperative and employee-owned enterprises; relates to establishing an advisory panel on the viability of increasing employee-owned enterprises; relates to capital gains exemption.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9618
SPONSOR: Ryan TITLE OF BILL:
An act to amend the workers' compensation law, in relation to coverage
for members of the worker cooperative; to amend the state finance law
and the education law, in relation to employee owned enterprises; to
amend the cooperative corporations law, in relation to creating an advi-
sory panel on the viability of increasing employee-owned enterprises;
and to amend the tax law, in relation to a capital gains exemption
PURPOSE OR GENERAL IDEA OF BILL:
This bill will exempt members, directors, and executive officers of a
worker cooperative from workers' compensation coverage; will make
employee-owned enterprises eligible for a "best value" awarding of
public contracts; provide business and industry training to members of
an employee-owned enterprise; create an advisory panel on the viability
of increasing employee-owned enterprises in the State; and provide a 50%
capital gains exemption for the sale of stock to an employee-owned
enterprise.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 54 of the workers' compensation law by adding a
subdivision 9 which exempts worker cooperatives from workers' compen-
sation coverage, but allows the members to elect to be covered if they
so desire. Section 2 amends paragraph j of subsection 1 of section 163
of the state finance law to include employee-owned enterprises among the
list of quantitative factors when making a "best value" awarding of
public contracts. Section 3 amends paragraph (a) of subdivision 4 of
section 3032 of the education law to include training which would
promote the successful management and/or operation of employee-owned
enterprises. Section 4 amends the cooperative corporations laws by
adding a new section 95 which would create an advisory panel on the
viability of increasing employee-owned enterprises in the State. Section
5 would amend subsection (c) of section 612 of the tax law by adding a
new paragraph 44 which would provide a 50% capital gains exemption for
the sale of stock to an employee-owned enterprise.
JUSTIFICATION:
The intent of this bill is to promote and provide incentives for busi-
nesses to adopt an employee ownership model. Employee-owned enterprises
provide stability and staying power for local jobs. Employee-owned
enterprises are far less likely to move out of state, or even out of the
local region, because of the roots the employees of these enterprises
have in the areas they work and live. Studies have found that wages,
sales, productivity, and retirement plans for employee-owned enterprises
are higher than those of comparable, privately owned corporations. With
the wave of business-owners reaching an age of retirement, many employ-
ees fear they may lose their job or have to relocate when a business
owner retires and sells their company. This bill will provide an avenue
which will allow for these retiring business owners to sell their compa-
ny back to the employees which worked for them, keeping jobs and fami-
lies here in New York State. This bill will strengthen our local and
State economies, as well as, support local small-businesses.
PRIOR LEGISLATIVE HISTORY:
None
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None to the State.
EFFECTIVE DATE:
Immediately, provided, however that the amendments to section 163 of the
state finance law made by section two of this act shall not affect the
repeal of such section and shall be deemed repealed therewith.
