SB460,9,2423 d. The exclusive purposes of an employee ownership trust may refer to both
24current and prospective tenured employees.
1e. An employee ownership trust may prioritize certain exclusive purposes over
SB460,10,83 2. No principal or income of the employee ownership trust is distributed or
4allocated to any party other than a tenured employee, except that principal and
5income of the trust may be distributed to one or more charitable organizations. The
6employee ownership trust may distribute principal to current and past tenured
7employees if the trust sells shares or member interests of the employer by
8establishing a cutoff date for the inclusion of past tenured employees.
SB460,10,119 3. Principal and income of the employee ownership trust that is distributed or
10allocated to employees is administered proportionally to all tenured employees on
11the basis of hours worked, salary, seniority, or any combination of these factors.
SB460,10,1512 (b) 1. An employee ownership trust may limit trustee liability in a manner
13authorized under subch. X of ch. 701 if the shares or member interests of the
14employer are voted by the trustee in accordance with the direction of all tenured
15employees and on a one person, one vote basis and all of the following apply:
SB460,10,1716 a. The trustee votes all employer shares or member interests as a unit in
17accordance with the majority decision of all tenured employees.
SB460,10,2518 b. Before voting, the trustee furnishes each tenured employee with the
19information statement and other materials provided to shareholders or members in
20connection with the shareholder or member meeting, together with a form on which
21confidential voting directions may be given to the trustee or, if the trustee is not
22independent of the employer, to an independent 3rd party designated by the trustee,
23who tabulates votes and provides instructions to the trustee. The trustee or a 3rd
24party may not disclose the confidential voting directions of any tenured employee to
25the employer.
12. This paragraph does not exempt the trustee from an obligation to carry out
2the express terms and purpose of the trust in the case of a conflict with the majority
3decision of all tenured employees.
SB460,11,64 (c) An employee ownership trust is not disqualified from any benefit available
5under s. 71.05 (6) (b) 53. or 54. or 71.26 (1) (ab) or (2) (a) 13., 14., or 15. solely because
6the terms of the trust do any of the following:
SB460,11,97 1. Authorize the trustee to employ an entity, such as a corporation, a limited
8liability company, or another trust, to hold the shares or member interests of the
SB460,11,1110 2. Require that the employer obtain membership in one or more nonprofit
SB460,11,1212 3. Require that the employer pay market rate wages or benefits or both.
SB460,11,1413 4. Require that the employer retain a percentage of annual net income as
14permanent reserves that will never be distributed to employees.
SB460,11,1815 5. Impose other requirements to promote the long-term financial health of the
16employer and the continued ability of the employer to provide high-quality jobs
17under conditions of employee ownership to all current and prospective tenured
SB460,11,2019 6. Appoint a trust protector or cotrustee or both to enforce the trust and approve
20amendments to the trust.
SB460,10 21Section 10. 238.147 of the statutes is created to read:
SB460,11,23 22238.147 Employee ownership loans and loan guarantees. (1)
23Definitions. In this section:
SB460,11,2424 (a) “Eligible transaction” has the meaning given in s. 73.17 (1) (b).
SB460,11,2525 (b) “Employee ownership association” has the meaning given in s. 73.17 (1) (c).
1(c) “Employee ownership loan” has the meaning given in s. 73.17 (1) (d).
SB460,12,62 (d) “Total cost” means all reasonable and necessary costs to be incurred in the
3course of an eligible transaction, including the fair market value of the business
4interest to be acquired, as well as costs for any additional construction, land
5acquisition, improvements, equipment, pertinent rights and easements, and
6associated technical, engineering, legal, and financial services.
SB460,12,9 7(2) Establishment of program. The corporation shall establish and administer
8an economic development program under this section to make employee ownership
9loans and employee ownership loan guarantees to eligible applicants.
SB460,12,12 10(3) Application. Any corporation, limited liability company, trust, or employee
11ownership association may apply to the corporation for an employee ownership loan
12or employee ownership loan guarantee or both to finance an eligible transaction.
SB460,12,14 13(4) Loans and loan guarantees. The corporation may contract with an
14applicant under sub. (3) to do any of the following:
SB460,12,1715 (a) Make an employee ownership loan to the applicant equal to up to 40 percent
16of the total cost. At least 50 percent of a loan made under this paragraph shall be
17senior debt.
SB460,12,2018 (b) Guarantee up to 100 percent of employee ownership loans made to the
19applicant by lenders other than the corporation. All loan guarantees made to an
20applicant under this paragraph may not exceed 80 percent of the total cost.
SB460,13,4 21(5) Timeliness. The corporation shall make a loan decision or a loan guarantee
22decision under sub. (4), and inform the applicant of the corporation's decision, no
23later than 30 days after the corporation receives the applicant's application for an
24employee ownership loan or employee ownership loan guarantee under sub. (3). If
25the corporation requests that an applicant supplement its application by submitting

1additional information, the corporation shall have an additional 15 days after
2receiving the additional information by which the corporation must make a loan
3decision or a loan guarantee decision under sub. (4) and inform the applicant of the
4corporation's decision.
SB460,11 5Section 11. Nonstatutory provisions.
SB460,13,96 (1) Center for employee ownership. The Board of Regents of the University
7of Wisconsin System shall establish the center for employee ownership under section
836.25 (54) of the statutes no later than 180 days after the effective date of this
SB460,13,1010 (End)