Bill
H 3079
Massachusetts bill provides a deduction against net income for capital gains from selling employer securities to ESOPs, incentivizing employee ownership.
Important: the materials provided for H 3079 contain two different legislative texts—one from Massachusetts (an income‑tax/employee‑ownership measure) and one from South Carolina (a guardians ad litem / ex parte communications measure). The bill metadata (sponsor, House Docket No. 1397, sponsor Kip A. Diggs) and some action dates correspond to the Massachusetts filing; a separate South Carolina draft concerning guardians ad litem is also included. Below are concise, separate summaries of each measure and the procedural information as provided. Verify with the appropriate state legislature website for the authoritative text and status.
Purpose
- Encourage employee ownership by providing a state tax incentive for business corporations that sell employer securities to employee stock ownership plans (ESOPs).
Key provisions
- Inserts new Section 38GG into Chapter 63 (Massachusetts General Laws).
- Allows a business corporation to deduct from its taxable net income an amount equal to its earnings from capital gains realized on the sale of employer securities of a non‑publicly traded business to an ESOP that:
- Is defined under Chapter 23D;
- Owns at least 49% of all outstanding employer securities issued by the business;
- Is sponsored by the selling corporation (the corporation must be the ESOP sponsor).
- The deduction applies only to capital‑gain earnings from such sales.
Who is affected
- Privately held Massachusetts corporations with fewer than 500 employees that sponsor ESOPs and sell employer securities to those ESOPs.
- Selling owners and the sponsoring corporations stand to reduce state taxable income; state tax revenue may be reduced to the extent the deduction is claimed.
- Workers who become ESOP participants may gain increased ownership stakes.
Potential impact
- Incentivizes formation/sponsorship of ESOPs and transfers of ownership to employees.
- Could reduce short‑term state corporate tax revenue; long‑term economic and employment impacts depend on ESOP uptake.
- Administrative/filing guidance likely needed to implement and verify qualifying transactions.
Procedural/timeline notes (as provided)
- Prefiled: 12/05/2024
- Introduced/read first time: 01/14/2025
- Referred to Committee on Judiciary: 01/14/2025 (note: committee referral appears inconsistent with subject matter; another entry shows referral to Revenue on 02/27/2025)
- Referred to the committee on Revenue: 02/27/2025
- Senate concurred: 02/27/2025
- Hearing scheduled: 10/28/2025, 1:00 PM–5:00 PM in B‑2 (per schedule information provided)
Purpose
- Limit ex parte communications by guardians ad litem (GALs) in private actions before Family Court to promote fairness and transparency.
Key provisions
- Adds Section 63‑3‑835 to Article 7, Chapter 3, Title 63, S.C. Code.
- Prohibits a guardian ad litem from engaging in ex parte communications with a party’s attorney regarding a case, except for administrative, nonsubstantive purposes, unless the other party’s attorney consents.
- Requires a guardian ad litem to provide copies of any written communication with one party’s attorney to the other party’s attorney. If the other party is unrepresented, the GAL must provide the written communication directly to that party.
- Takes effect upon approval by the Governor.
Who is affected
- Guardians ad litem appointed in private Family Court actions in South Carolina.
- Parties and their attorneys in those proceedings; unrepresented parties receive direct copies of written communications.
- Family Court proceedings may see changes to GAL practice, record‑keeping, and communication protocols.
Potential impact
- Enhances procedural fairness and transparency in GAL communications.
- May require GALs to adjust practices to avoid prohibited ex parte contacts and to document/send communications.
- Implementation primarily administrative; no fiscal note provided in the text.
Procedural/timeline notes (as provided)
- Draft filed 12/05/2024
- Bill language indicates immediate effect upon gubernatorial approval.
If you want, I can:
- Check the official Massachusetts and South Carolina legislative websites and update the authoritative status and text for H 3079 (and the SC draft), or
- Produce a one‑page analysis of fiscal implications for the Massachusetts ESOP tax deduction.
Compiled from official sources — confirm details with the bill’s official record.
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