(March 16) – Rep. James Coleman’s bill to promote employee ownership of Colorado businesses won a party-line endorsement in the House Business Affairs & Labor Committee this afternoon.
HB17-1214 directs the state Office of Economic Development and International Trade to promote employee ownership as part of its small business assistance center.
Rep. Coleman, D-Denver, told the committee that the bill represents “a new approach to increasing the positive impact small businesses can have.”
The bill addresses a looming shift in Colorado’s business climate. Small businesses employ a million Coloradans, about half the workforce. Of those million Coloradans, about two-thirds work for companies owned by baby boomers, who are now starting to retire in large numbers. In many, perhaps most cases, converting these businesses to employee ownership, rather than selling the businesses to outside investors, would be the softest landing for the employees, for the companies’ health and for the Colorado economy.
By many statistical measures, employee-owned companies simply perform better. They hire more employees and lay off fewer employees. They pay higher wages and have better retirement plans. They even have higher sales than non-employee-owned companies. The ranks of employee-owned businesses include widely acclaimed companies like New Belgium in Fort Collins, demonstrating that this business model can be highly successful.
Transitioning businesses to employee ownership would be “a highly cost-effective way to retain and create jobs, increase wealth for a broad sector of workers, strengthen communities, and expand economic growth,” the bill declares.
As amended today, OEDIT would also establish and administer a revolving loan program cash fund, bankrolled by gifts, grants and donations, to help existing businesses convert into employee-owned businesses. No state funds would be involved.
Every Democrat on the Business Affairs & Labor Committee voted for this business-friendly bill, while every Republican voted against it. The 7-6 vote sends HB17-1214 to the House floor.