H.R. 2993: ESOP Funding for SBA Position Act of 2025

This bill, known as the ESOP Funding for SBA Position Act of 2025, aims to create a new position within the Small Business Administration (SBA) specifically designed to assist small businesses in setting up employee stock ownership plans (ESOPs). Here is a breakdown of its main components:

Establishment of the Position

The bill establishes a new position within the SBA that will be responsible for providing guidance and support to small businesses that are interested in implementing ESOPs. This position will be appointed by the Administrator of the SBA and will focus on helping these businesses navigate the complexities involved in creating ESOPs.

Responsibilities of the Position

The individual in this position will have several key responsibilities, including:

• Providing information on the establishment of ESOPs, such as the tax implications, regulatory compliance, stock valuation, and funding opportunities.
• Coordinating with both public and private entities to offer resources and assistance tailored to the needs of small businesses looking to set up ESOPs.
• Working with the Department of Labor to ensure small businesses comply with all relevant regulations when establishing these ownership plans.
• Advocating for clear guidance from federal agencies on the regulations surrounding ESOPs, particularly concerning stock valuation and employee ownership.
• Fulfilling any additional tasks deemed appropriate by the SBA Administrator.

Reporting Requirements

Within one year of the bill’s enactment, and annually thereafter, the SBA Administrator must report to Congress on the activities of this new position. The report will include:

• The number of small businesses that received assistance for establishing ESOPs.
• The types of assistance provided to these businesses.
• Suggested policy improvements for facilitating the setup and maintenance of ESOPs.

Definitions

Key terms in the bill are defined as follows:

• Administration: Refers to the Small Business Administration.
• Administrator: Refers to the Administrator of the Small Business Administration.
• Employee Stock Ownership Plan (ESOP): Defined as per section 4975(e)(7) of the Internal Revenue Code of 1986.
• Small Business Concern: Defined according to section 3 of the Small Business Act.

Funding Authorization

The bill authorizes appropriations as necessary to implement its provisions, with an initial funding of $500,000 allocated for the fiscal year in which the bill is enacted.

Relevant Companies

None found