Bill Text: IL HB4955 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Creates the Employee Ownership Development Act. Provides that the State Treasurer shall segregate a portion of the Treasurer's State investment portfolio in the Employee Ownership Development Account. Provides that moneys in the Employee Ownership Development Account shall be invested by the State Treasurer to provide employee ownership capital to employee ownership development projects seeking to locate, expand, or remain in the State. Sets forth provisions concerning Employee Ownership Development Account-Recipient Funds. Provides that the Employee Ownership Development Fund is created as a non-appropriated trust fund within the State treasury, which may receive a portion of earnings from the Employee Ownership Development Account. Provides for reporting requirements. Provides that the State Treasurer may adopt rules necessary to implement the Act. Effective immediately.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2026-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB4955 Detail]

Download: Illinois-2025-HB4955-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026HB4955 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
New Act
Creates the Employee Ownership Development Act. Provides that the State Treasurer shall segregate a portion of the Treasurer's State investment portfolio in the Employee Ownership Development Account. Provides that moneys in the Employee Ownership Development Account shall be invested by the State Treasurer to provide employee ownership capital to employee ownership development projects seeking to locate, expand, or remain in the State. Sets forth provisions concerning Employee Ownership Development Account-Recipient Funds. Provides that the Employee Ownership Development Fund is created as a non-appropriated trust fund within the State treasury, which may receive a portion of earnings from the Employee Ownership Development Account. Provides for reporting requirements. Provides that the State Treasurer may adopt rules necessary to implement the Act. Effective immediately.
LRB104 18508 SPS 31950 b
A BILL FOR
HB4955 LRB104 18508 SPS 31950 b
AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Employee Ownership Development Act.
Section 5. Definitions. As used in this Act:
"Broad-based employee ownership" means an ownership
structure in which a majority of the equity interest in a
business is held, directly or indirectly, by or on behalf of a
broad base of the business's employees through an employee
stock ownership plan, worker cooperative, employee ownership
trust, or other similar structure that provides for meaningful
employee participation in ownership.
"Employee ownership capital" means financing for
investments that facilitate the transition of businesses to
broad-based employee ownership or that provide growth capital
to existing majority employee-owned businesses.
"Employee ownership development firm" means an entity
that: (i) provides financing for transitions of businesses to
broad-based employee ownership or growth capital to existing
majority employee-owned businesses; and (ii) has a track
record of identifying, evaluating, and investing in employee
ownership transactions or demonstrates a credible and

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concerted effort to develop a pipeline of employee ownership
transactions that meet certain criteria as determined by the
State Treasurer.
"Employee ownership project" means an investment that: (i)
facilitates the transition of a business in this State to
broad-based employee ownership; (ii) provides growth capital
to an existing majority employee-owned business in this State;
or (iii) otherwise supports the development or expansion of
broad-based employee ownership in this State.
Section 10. Employee Ownership Development Account.
(a) The State Treasurer shall segregate a portion of the
Treasurer's State investment portfolio, which at no time shall
be greater than 5% of the portfolio, in the Employee Ownership
Development Account, an account that shall be maintained
separately and apart from other moneys invested by the State
Treasurer. Distributions from the investments in the Employee
Ownership Development Account may be reinvested into the
Employee Ownership Development Account without being counted
against the 2% cap. The aggregate investment in the Employee
Ownership Development Account and the aggregate commitment of
investment capital in an Employee Ownership Development
Account-Recipient Fund shall at no time be greater than 5% of
the State's investment portfolio, which shall be calculated
as: (i) the balance at the inception of the State fiscal year;
or (ii) the average balance in the immediately preceding 5

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fiscal years, whichever is greater. Any distributions from an
Employee Ownership Development Account-Recipient Fund, in an
amount not to exceed the commitment amount and the total
distributions, may be reinvested into the Employee Ownership
Development Account without being counted against the 5% cap.
The State Treasurer may make investments from the Employee
Ownership Development Account that help attract, assist, and
support quality employee ownership development projects in
this State. A portion of the investment earnings on the
Employee Ownership Development Account may be deposited into
the Employee Ownership Development Fund and reinvested by the
State Treasurer.
(b) The State Treasurer may solicit proposals from
entities to manage the Employee Ownership Development Account
consisting of investments from private sector investors that
must invest, at the direction of the general partner, in
tandem with the Employee Ownership Development Account in a
pro rata portion. The State Treasurer may enter into an
agreement with the entity managing the Employee Ownership
Development Account to advise on the investment strategy of
the Employee Ownership Development Account and fulfill other
mutually agreeable terms. All funds in the Employee Ownership
Development Account shall be kept separate and apart from
moneys in the State treasury.
(c) All or a portion of the moneys in the Employee
Ownership Development Account shall be invested by the State

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Treasurer to provide employee ownership capital to employee
ownership development projects seeking to locate, expand, or
remain in this State by placing money with employee ownership
development firms. The State Treasurer shall invest primarily
through employee ownership-focused credit funds, private
equity funds, and similar investment vehicles rather than
engaging in direct lending or loan origination. In no case
shall more than 15% of the capital in the Employee Ownership
Development Account be invested in firms based outside of this
State that do not demonstrate a credible and concerted effort
to develop a pipeline of employee ownership projects.
(d) Any Employee Ownership Development Account-Recipient
Fund created by an employee ownership development firm in
which the State Treasurer places money in accordance with this
Section shall be required by the State Treasurer to seek
investments in employee ownership projects. Any Employee
Ownership Development Account-Recipient Fund created by an
employee ownership development firm in which the State
Treasurer places money under this Section shall invest a
minimum of 1.5 times the aggregate amount of investable
capital that is received from the State Treasurer under this
Section in employee ownership projects during the life of the
fund. Investable capital is calculated as committed capital,
as defined in the firm's applicable fund's governing
documents, less related estimated fees and expenses to be
incurred during the life of the fund. Transactions outside of

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this State shall be expressly permitted beyond this floor,
enabling fund managers to maintain diversified multi-state
portfolios while developing an Illinois-focused deal pipeline.
(e) All Employee Ownership Development Account-Recipient
Funds shall also invest additional capital in employee
ownership projects during the life of the fund if, as
determined by the fund's manager, the investment:
(1) is consistent with the firm's fiduciary
responsibility to its limited partners;
(2) is consistent with the fund manager's investment
strategy; and
(3) demonstrates the potential to create risk-adjusted
financial returns consistent with the fund manager's
investment goals.
(f) Employee Ownership Development Account-Recipient Funds
shall be permitted to deploy capital into:
(1) subordinated loans and mezzanine debt that sit
junior to senior bank loans, but senior to seller notes,
and which may include warrants where appropriate;
(2) preferred or structured equity in majority
employee-owned firms seeking growth capital, potentially
paired with warrants, so long as they are not unduly
dilutive of majority employee ownership; and
(3) other instruments as determined appropriate by the
State Treasurer to facilitate broad-based employee
ownership.

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(g) The State Treasurer's investment policy shall restrict
the use of proceeds from the Employee Ownership Development
Account to transactions that deliver majority broad-based
employee ownership through an employee stock ownership plan,
worker cooperative, employee ownership trust, or other
structure approved by the State Treasurer.
(h) All Employee Ownership Development Account-Recipient
Funds shall report the following information to the State
Treasurer on a quarterly or annual basis, as determined by the
State Treasurer, for all investments, including, but not
limited to:
(1) the names of companies or employee ownership
projects invested in during the applicable investment
period;
(2) the geographic location of employee ownership
projects;
(3) the date of the initial and any follow-on
investments;
(4) the cost of the investment;
(5) the current fair market value of the investment;
(6) the number of employees at each portfolio company
at the time of investment and at each subsequent reporting
period; and
(7) the percentage of employee ownership achieved in
each transaction.
(i) If, as of the earlier to occur of (i) the fourth year

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of the investment period of any Employee Ownership Development
Account-Recipient Fund or (ii) when that Employee Ownership
Development Account-Recipient Fund has drawn more than 60% of
the investable capital of all limited partners, that Employee
Ownership Development Account-Recipient Fund fails to invest
the minimum amount required under this Section in employee
ownership projects, then the State Treasurer shall deliver
written notice to the manager of that fund seeking compliance
with the minimum amount requirement under this Section. If,
after 180 days after delivery of notice, the Employee
Ownership Development Account-Recipient Fund still fails to
invest the minimum amount required under this Section in
employee ownership projects, then the State Treasurer may
elect, in writing, to terminate any further commitment to make
capital contributions to that fund which otherwise would have
been made under this Section.
(j) The Employee Ownership Development Account and
investments made in the Employee Ownership Development Account
shall be managed in compliance with the State Treasurer's
Responsible Contractor Policy and the Illinois Sustainable
Investing Act.
Section 15. Employee Ownership Development Fund. The
Employee Ownership Development Fund is created as a
non-appropriated trust fund within the State treasury, which
may receive a portion of earnings from the Employee Ownership

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Development Account and may be used by the State Treasurer to
pay expenses related to this Act, including, but not limited
to, consulting with external advisors to assist with manager
selection, due diligence, and monitoring.
Section 20. Annual report. Beginning one year after the
effective date of this Act, and annually thereafter, the State
Treasurer shall submit a report to the General Assembly
concerning the activities and performance of the Employee
Ownership Development Account. The report shall include:
(1) the total amount invested in the Employee
Ownership Development Account;
(2) a summary of investments made through Employee
Ownership Development Account-Recipient Funds;
(3) the number and geographic distribution of employee
ownership projects financed;
(4) the estimated number of workers in this State who
have become employee-owners as a result of investments
made under this Act; and
(5) the financial performance of the Employee
Ownership Development Account.
Section 25. Rules. The State Treasurer may adopt rules
necessary to implement this Act.
Section 99. Effective date. This Act takes effect upon
becoming law.