Promotion and Expansion of Private Employee Ownership Act of 2025

Summary

Creates new federal support for employee ownership of S corporations by changing certain tax-deferral rules, instructing Treasury to set up an S‑corporation Employee Ownership Assistance Office, directing the Small Business Administration to treat ESOP participants as proportionate owners for small‑business program eligibility, and adding an Advocate for Employee Ownership at the Department of Labor. The bill also makes specific effective‑date rules for those changes and authorizes necessary funding for the Labor Advocate position.

• Amends tax-deferral rules for certain ESOP stock sales and repeals a recent Code subsection for sales occurring after enactment.
• Creates an S Corporation Employee Ownership Assistance Office at Treasury within 90 days to provide education and technical help on ESOPs.
• Requires SBA to treat each ESOP participant as directly owning a proportional share of ESOP stock for small-business program eligibility, effective the January 1 after enactment.
• Establishes a Department of Labor Advocate for Employee Ownership with duties to advise, educate, assist in disputes, coordinate with Treasury, and recommend regulatory/legislative changes.
• Labor Advocate is appointed outside Title 5 competitive hiring rules, paid at Executive Schedule Level V, and must file an annual public report to specific congressional committees.
• Authorizes appropriations (“such sums as may be necessary”) to carry out the Labor Advocate function.
• Definitions of ESOP and ESOP business concern are tied to the Internal Revenue Code and Small Business Act rules, preserving earlier small‑business status treatment in many cases.
• Implements specific effective dates: immediate administrative deadlines (Treasury 90 days), tax repeal for post‑enactment sales, and SBA rule starting Jan 1 following enactment.