LR: 3751:  An Act To Broaden Business Ownership in Maine

                   Sponsor:  Speaker of the House,  Steven Rowe of Portland

Background

Maine communities and workers are vulnerable to changes in ownership of local businesses and branch plants. Maine needs more options to respond proactively to these market trends and ensure that Maine people have a direct stake in businesses that operate instate.  The purpose of this bill is to broaden the local ownership of Maine businesses through employee ownership and other forms of community and consumer ownership. 

Provisions of the Bill  

1. Feasibility Fund  for Employee Buyouts

A $300,000 feasibility fund will be administered by the Department of Economic and Community Development (DECD) for analyzing the potential for employee ownership in firms in Maine employing at least 10 full-time workers in jobs paying at least the median wage for that labor market.  

The fund will be available as grants to employee-led groups who are seeking to acquire at least 30% ownership of the firm which is facing a sudden closure or sale of their plant or firm.  Grants are available up to $20,000 based on the size of the company  and the number of jobs involved.

2.  Education and Outreach for Employee Ownership

DECD will contract with a community development corporation to conduct an  Education and Outreach Program for Maine businesses on employee ownership options that include employee stock ownership plans (ESOPs), stock options, and cooperatives.   

The outreach program will inform Maine closely-held businesses facing ownership succession issues, as well as other Maine-based businesses about  employee ownership options, including the various financial and tax advantages, sources of finance, and organizational structures.  

The outreach program will link Maine businesses to available technical and legal resources  specializing in employee ownership.  The outreach program will also help firms contract for a preliminary feasibility study to determine whether employee ownership is viable. 

At the end of each year of the program, the contractor will assess the potential and barriers to employee ownership in the Maine market and make programmatic and policy recommendations to  DECD and the legislature.

Annual appropriation - $100,000 for three years.

3.  Commission to Study Ownership Patterns in Maine

The purpose of the commission is to investigate the current patterns and impact of instate, out-of-state and international ownership of Maine businesses. 

Commission Members:  The Commission will consist of  13 members, all of whom must have knowledge of and experience with Maine business and labor issues, and the structure of the Maine economy.

The following members must be appointed by the Governor:   

·         A representative from the Finance Authority of Maine

·         A representative of  the Department of Labor

·         A representative from the Department of Community and Economic Development

The following members must be appointed by the President of the Senate:

·         Two representatives of the Maine Senate, one from each major political party

·         A representative from organized labor

·         A representative from a large business in Maine

·         A representative from a bank in Maine

The following members must be appointed by the Speaker of the House: 

·         Two members of the House of Representatives, one from each major political party

·         A representative from a community economic development organization

·         A representative from a Maine economic policy organization

·         A representative from a small Maine business 

Responsibilities of the commission.

1.  Document ownership patterns (instate, out-of-state, international) and characteristics of businesses operating in Maine according to sectors, size and location of firms.

2. Document ownership patterns of small Maine growth companies as they expand:  do they stay locally owned, do they continue to operate in Maine if they receive outside investment or are bought out?

3.  Examine existing research and media reports on the linkage between ownership and impact on the well being of communities where firms are located:  i.e. number and quality of jobs,  revenues and tax base,  civic responsiveness, environmental accountability

4.  Commission research studies that are deemed necessary if  funding can be raised.

5.  Examine options for expanding opportunities for Maine people and institutions to participate more broadly in the ownership of  businesses operating in Maine:  what are the current opportunities?  Is there a role for state policy to enhance employee, consumer or community ownership options?

Report:  The commission shall prepare and submit a report, including any legislation necessary to implement its recommendations to the 120th Legislature.  The preliminary report is due by January 15, 2001 and the final report  by June 1st, 2001. 

Budget:  A budget will be prepared by the Commission and submitted to the Legislative Council for approval.