SEC. 3. FULL DEFERRAL OF TAX FOR CERTAIN SALES OF 
EMPLOYER STOCK TO EMPLOYEE STOCK 
OWNERSHIP PLAN SPONSORED BY S COR-
PORATION. 
(a) ACCELERATION OF DEFERRAL.—Section 114(c) 
of the SECURE 2.0 Act of 2022 is amended by striking 
‘‘December 31, 2027’’ and inserting ‘‘the date of the en-
actment of the Promotion and Expansion of Private Em-
ployee Ownership Act of 2025’’. 
(b) REPEAL OF LIMITATION.— 
(1) IN GENERAL.—Section 1042 of the Internal 
Revenue Code of 1986, as amended by section 114 
of the SECURE 2.0 Act of 2022, is amended by 
striking subsection (h). 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to sales after the date 
of the enactment of this Act. 
SEC. 4. DEPARTMENT OF THE TREASURY TECHNICAL AS-
SISTANCE OFFICE. 
(a) ESTABLISHMENT REQUIRED.—Before the end of 
the 90-day period beginning on the date of enactment of 
this Act, the Secretary of the Treasury shall establish the 
S Corporation Employee Ownership Assistance Office to 
foster increased employee ownership of S corporations. 
(b) DUTIES OF THE OFFICE.—The S Corporation 
Employee Ownership Assistance Office shall provide— 
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(1) education and outreach to inform companies 
and individuals about the possibilities and benefits of 
employee ownership of S corporations; and 
(2) technical assistance to assist S corporations 
in sponsoring employee stock ownership plans. 
SEC. 5. SMALL BUSINESS AND EMPLOYEE STOCK OWNER-
SHIP. 
(a) IN GENERAL.—The Small Business Act (15 
U.S.C. 631 et seq.) is amended— 
(1) by redesignating section 49 as section 50; 
and 
(2) by inserting after section 48 the following: 
‘‘SEC. 49. EMPLOYEE STOCK OWNERSHIP PLANS. 
‘‘(a) DEFINITIONS.—In this section— 
‘‘(1) the term ‘ESOP’ means an employee stock 
ownership plan, as defined in section 4975(e)(7) of 
the Internal Revenue Code of 1986; and 
‘‘(2) the term ‘ESOP business concern’ means 
a business concern that was a small business con-
cern eligible for a loan, preference, or other program 
under this Act before the date on which more than 
49 percent of the business concern was acquired by 
an ESOP. 
‘‘(b) CONTINUED
ELIGIBILITY.—In determining 
whether an ESOP business concern qualifies as a small 
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business concern for purposes of a loan, preference, or 
other program under this Act, each ESOP participant 
shall be treated as directly owning his or her proportionate 
share of the stock in the ESOP business concern owned 
by the ESOP.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1 of the first cal-
endar year beginning after the date of the enactment of 
this Act. 
SEC. 6. ESTABLISHMENT OF THE ADVOCATE FOR EM-
PLOYEE OWNERSHIP. 
(a) IN GENERAL.—Subtitle A of title III of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1201 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 3005. ADVOCATE FOR EMPLOYEE OWNERSHIP. 
‘‘(a) IN GENERAL.—The Secretary of Labor shall ap-
point an Advocate for Employee Ownership within the 
Employee Ownership Initiative established under section 
346(b)(1) of the SECURE 2.0 Act of 2022 (division T 
of the Consolidated Appropriations Act, 2023 (Public Law 
117–328)). The appointment shall be made without regard 
to the provisions of title 5, United States Code, relating 
to appointments in the competitive service or Senior Exec-
utive Service. 
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‘‘(b) DUTIES.—The Advocate for Employee Owner-
ship shall— 
‘‘(1) consult with the head of the Employee 
Ownership 
Initiative 
established 
under 
section 
346(b)(1) of the SECURE 2.0 Act of 2022 (division 
T of the Consolidated Appropriations Act, 2023 
(Public Law 117–328)); 
‘‘(2) act as a liaison between the Department of 
Labor, employee ownership advocates, employers 
considering employee ownership, workers interested 
in employee ownership, and other stakeholders, in-
cluding employee stock ownership plan sponsors and 
participants; 
‘‘(3) provide public education and assistance re-
lated to the expansion of employee ownership 
through the establishment and maintenance of prac-
tices that promote employee ownership, including the 
use of employee stock ownership plans; 
‘‘(4) provide assistance for purposes of resolving 
a dispute with the Department of Labor to any em-
ployee stock ownership plan sponsor, fiduciary, or 
participant and help facilitate communication be-
tween such entities and the Department of Labor for 
such purposes; 
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‘‘(5) in consultation with the S Corporation 
Employee Ownership Assistance Office of the De-
partment of the Treasury established under section 
4 of the Promotion and Expansion of Private Em-
ployee Ownership Act of 2025, identify and rec-
ommend potential legislative and administrative 
changes, including related to access to capital issues, 
to increase practices that promote employee owner-
ship plans, including the use of employee stock own-
ership plans; and 
‘‘(6) coordinate with other Federal agencies, in-
cluding the Administrator of the Small Business Ad-
ministration, the Secretary of the Treasury, and the 
Secretary of Commerce, and State and local govern-
ments on outreach and education to inform employ-
ees and employers about the possibilities and bene-
fits of employee ownership as a business ownership 
succession planning option. 
‘‘(c) CONSULTATION
AND INPUT.—The Secretary 
shall solicit advice and input from the Advocate for Em-
ployee Ownership in developing regulations or interpreta-
tions of this Act that relate to employee stock ownership 
plans. 
‘‘(d) COMPENSATION.—The Advocate for Employee 
Ownership shall be entitled to compensation at the same 
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rate as the rate of basic pay in effect for a position at 
level V of the Executive Schedule under section 5316 of 
title 5, United States Code. 
‘‘(e) ANNUAL REPORT.— 
‘‘(1) IN GENERAL.—Not later than December 
31 of each calendar year beginning after the date of 
enactment of this section, the Advocate for Em-
ployee Ownership shall submit a report to the Com-
mittee on Health, Education, Labor, and Pensions 
of the Senate and the Committee on Education and 
Workforce of the House of Representatives on the 
activities of the Office of the Advocate for Employee 
Ownership during the fiscal year ending during such 
calendar year, including the contents described in 
paragraph (2). 
‘‘(2) CONTENT.—Each report submitted under 
paragraph (1) shall— 
‘‘(A) summarize the assistance requests re-
ceived by the Advocate for Employee Ownership 
during the fiscal year ending during the cal-
endar year of such report; 
‘‘(B) describe the activities, including the 
activities described under paragraphs (3) and 
(4) of subsection (b), and evaluate the effective-
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ness of the Advocate for Employee Ownership 
during such fiscal year; 
‘‘(C) describe any significant problems the 
Advocate for Employee Ownership has identi-
fied during such fiscal year and ways to miti-
gate such problems; 
‘‘(D) contain recommendations for any ad-
ministrative or legislative action that may be 
appropriate to resolve barriers to, and to 
incentivize, practices that promote employee 
ownership, including the use of employee stock 
ownership plans; and 
‘‘(E) describe progress related to employee 
ownership in businesses in the United States. 
‘‘(3) CONCURRENT SUBMISSION.—The Advocate 
for Employee Ownership shall submit a copy of each 
report submitted under paragraph (1) to the Sec-
retary of Labor, and any other appropriate official, 
at the same time such report is submitted under 
paragraph (1). 
‘‘(4) PUBLIC AVAILABILITY.—The Advocate for 
Employee Ownership shall make a copy of each re-
port submitted under paragraph (1) available to the 
public. 
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‘‘(5) DEFINITION OF EMPLOYEE STOCK OWNER-
SHIP PLAN.—For purposes of this section, the term 
‘employee stock ownership plan’ has the meaning 
given the term in section 4975(e)(7) of the Internal 
Revenue Code of 1986. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated such sums as may be nec-
essary to carry out subsection (d).’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1001 note) is amended by insert-
ing after the item relating to section 3004 the following 
new item: 
‘‘Sec. 3005. Advocate for employee ownership.’’. 
Æ 
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