EP11 - Jim Bonham - President of The ESOP Association - Interview on Current Legislation and Resources

Jim Bonham - President of “The ESOP Association” was kind enough to share with us a solid overview of the a dynamic and powerful resource for the ESOP industry.  They have a strong role to play into the ESOP political landscape being credited with ongoing legislative efforts to stay in front of congress and help advance positive ESOP legislation.  Mr. Bonham provides updates related to Secure 2.0 for the parts to affect ESOPs.  This episode will be very helpful to better understand The ESOP Association as a resource.

Transcript

[0:11] Everyone this is the ESOP guy we are on a journey to an ESOP so glad you could join us today we are a resource for folks that are thinking about, going towards an employee stock ownership plan as a strategy for their business it could be a succession planning it could be looking at an Exit Plan. 
 It could be how do you use an ESOP to grow your business there's a lot of different ways to leverage the value of an ESOP and there's a lot that goes into planning an ESOP and once you become an ESOP there's there's a lot of things that you should be in tune with. 
 Today we're going to get to kind of talk about, not just of course what is an ESOP and all that but we're going to talk about what resources that are available that I think are very important for people to know about and to do that we're going to really go into a resource called the ESOP Association which is, one of the largest associations that include member companies that are existing ESOP companies and the person that runs the all of that is Jim Bonham he's the president and CEO. 
 He's been working in that since March 2019 he has nearly 30 years of experience in government, public policy and advocacy has a deep understanding of how Washington really works from a political standpoint so wanted to welcome Jim to our podcast today thank you so much for joining. 
 
 [1:33] Hey thanks Phil really appreciate you having me in the opportunity to talk with your audience great thank you so we Jim and I were going to do this about a year ago and I wanted to kind of say it. 
 Right before we did we were going to do our interview I broke my foot if you remember that Jim. 
 
 [1:49] I was running into the ocean and I broke it and I called Jim and like I can't come in and do it but. 
 You know then I try to get get Jim back on and he's busy and I'm busy and so hey it's still better late than never right. 
 
 [2:02] Absolutely I'm really glad we're able to make this work this time, absolutely I am too and I think for the audience as we as we talk about the before we get into a lot of the questions about these apis Association can you share with us how did you get to do the job that you have right now I mean we're, where did your journey start from and even getting into ESOP so can you share a little bit of that before, wow yeah you know it goes for me I've spent about the last three decades in Washington doing just about every job you could imagine here in town I worked in the Congress for many years, both the house and the Senate, I ran a national political party committee for a couple beers for an election cycle had my own consulting firm helping candidates for federal office and then for about. 
 I 12 years before I joined the ESOP Association I ran a large government Affairs and public policy practice at at a major national law firm. 
 
 [3:04] And in that capacity I was representing some of the. 
 Most recognized companies globally and here in the United States trade associations nonprofits, from just about every quarter of the economy whether it was Autumn and you factoring or life insurance and Casualty Insurance Financial Services, um Healthcare we worked across the board and that gave me a real exposure to. 
 
 [3:34] The some of the key strategies and tactics to actually getting things done in Washington as opposed to what. 
 
 [3:42] I would call the Busy work of Washington d.c. there's a lot of activity that takes place, that really doesn't amount to getting the job done there's a lot of activity that people undertake to make themselves look good, but doesn't necessarily move the ball down the field mmm so. 
 
 [4:04] Before I joined the association I had sort of gotten tired of the some of the contract advocacy, world and started looking for what I would consider more mission-driven opportunity and it took about two years to really find something that was a nice fit for me and when the ESOP Association came up, it was attractive to me because my family has a personal history with employee ownership that goes back to my grandfather and Wyoming where I grew up. 
 
 [4:36] And a small chain of Mercantile stores and he ran where he introduced a an employee ownership concept, to his management style and it was part of my family's culture growing up and it's a believe it as a. 
 Outstanding model for business ownership. 
 And it's a proven model for business ownership so the opportunity to lead a National Organization that is advocating on behalf of the existing company's employee owners, but also trying to expand the number of companies and the opportunity for additional Americans to become employee-owners was a really attractive thing for me yeah now I can imagine and I think like one thing that stood out to me too in going into what your story was is ESOP the ESOP community. 
 
 [5:25] I think similarly almost everybody that we talked to their they kind of have have gravitated towards this because it's such a positive place. 
 To work you know being the the the deals are good for everybody there win-win for the company for the shareholders. 
 You know so just even in dealing with public policy and advocacy advocacy the things that you do even in that light you know it's like it's a very positive approach to to work life right and, well yeah absolutely and one of the great things about it you know I call it what you would. 
 
 [6:03] What people sort of refer to as white hat in Washington there are very very few issues, that you can go to the Congress or the administration, and say genuinely with a completely straight face this is an absolutely bipartisan issue we have when you can have. 
 Mitch McConnell and Bernie Sanders both supporting the same piece of legislation you know that this you're doing something right yeah and the reason is that your employee ownership is really, it could be fundamental to the way that our capitalist system works in the United States because it really allows individual employees. 
 Not just get a monthly paycheck but to actually gain as the company that they work for grows in value we all know what it's like to be a homeowner versus a renter, that when you're when you're buying your home when you own your home. 
 
 [7:08] You you will gain the equity that comes along with the market rising and that's analogous to what employee-owners experience, as the value of their company Rises during the course of their career and it's a benefit that they don't pay for out of their pocket and research has shown over and over and over, that employees at ESOP companies have substantially more retirement savings, they have much better job security and the companies themselves outperformed their non-employee on peers. 
 So it really is a win-win win and from the perspective and elected official from the perspective of government. 
 It provides tremendous, Local Economic Security because it turns out employee honors don't tend to Outsource their own jobs they don't tend to close down their own plants or factories and relocate them somewhere else, now it does of course occasionally happen where you have a large ESOP that will have facilities in multiple States or multiple areas that they will find efficiencies. 
 
 [8:19] But in those rare occasions, the way that the employees are treated is substantially different than in a non employee-owned company so it's just a really terrific model it is and there's a million things to go like Ingles to go there if. 
 One of the things that I wanted to kind of get into a little bit because you guys do do a lot of public advocacy the secure 2.0, language came out recently and I know you guys played a key role in helping get that cross the finish line, we did a podcast on this recently to kind of explain some of the, particulars but I wanted to go into that a little bit with you and and talk about that because I think it does show what we're talking about the bipartisan support if you're getting things done. 
 In Congress that I mean in nowadays right I mean it's like it's got to be difficult so getting that done has to be just an incredible you know hats off to you guys. 
 
 [9:14] Thank you fellow we worked really hard on that for, a couple of years to make sure that it actually got to the president's desk and for us that's really our Focus we're less interested in, doing busy work just to look relevant we actually want to get the job done and that's part of our job as the ESOP Association you know like I feel like I should talk a little bit about the association that I could talk about the secure 2.0 act and actually the work act which was a smaller subset of that but these stop Association we are coming up rapidly on our 50th Anniversary wow and the association was formed, after the initial passage of Arisa the employee retirement income Security Act way back in 1974, and Arisa was where Congress first. 
 Um created by an embedded into law Aesop's and made it possible for them to be formed and recognized, and then later there were tax benefits associated with forming an ESOP that came along with it and when the association was formed it was actually to do, smaller organizations that had both been formed by practitioners in the ESOP space. 
 
 [10:33] Who wanted to make sure that now that Congress created esops that they were able to keep them. 
 And they realized that they had a largely overlapping Mission so they merged and became the ESOP Association and. 
 
 [10:47] We are the only comprehensive National trade Association that represents. 
 Employee owned companies ESOP companies and the professionals who provide services to them, we have over 3,100 members and growing we've had substantial growth over the last couple of years, and we in any given year now we're spending upwards of 11 to 12 million dollars on behalf of our employee owners, in the advocacy space providing education and helping to grow Aesop's throughout the country. 
 So members of the association you can become a member of the association if your company has a nice op and the company itself is it is is the actual member and all the employee owners can use the benefits, you can become an affiliate member if you are exploring the possibility of forming an ESOP so that you can make use of a lot of our educational programs. 
 
 [11:50] As the association we have 19 state or Regional chapters all across the country, so we not only provide National level comprehensive education and programming at our for national conferences, but we also offer chapter events that are 19 chapters both in the spring and in the fall all across the country so as if you're thinking about forming an ESOP you're just exploring employee ownership, it's very inexpensive to join the association and you can go to any of those events and they are just full of, live interactive sessions where you are meeting and interacting with the top Professionals in the in the space the other real advantage of doing that is that you get to meet the companies in your area that have already been on their journey and they already there this is a very welcoming community and I guarantee if you walk up and talk to any employee owner you find out what their company is, they will put you in touch with somebody who can help, answer the questions that you need to have answered in order to move to the next step so that's who the association is now it's been really proud of the work that we did yep. 
 
 [13:07] Now in terms of the security 2.0 a. 
 This was a bill that was included as part of what we call the the year-end Christmas tree Bill the Omnibus Appropriations Act of 2022. 
 
 [13:23] And this is a bill that was passed literally the last night Congress was in session last year was sent to the president and it was signed into law on December 29th. 
 So that the government could continue to stay open now the reason we called a Christmas tree bill is that these end-of-the-year must pass bills, tend to become just like a Christmas tree and everybody tries to hang their ornament on it because they know it has to be signed into law and, we were somewhat guilty of that, but what was great is that and the reason we were successful is because we were able to generate a very strong bipartisan following and support for our small section event bill, the Omnibus Bill was over 4,000 pages long and that in the secure 2.0 Act. 
 Which is a larger retirement security bill that has to do with not just Aesop's but all kinds of different qualified retirement plans. 
 And in the secure 2.0 act it's about 340 pages of the 4,000 plus pages. 
 And then there's about eight pages in there that's what we call the work act which is the worker ownership Readiness and knowledge. 
 
 [14:38] And the work Act was what we really spent a lot of energy focused on because it is 100% to do with employee ownership and he stops. 
 Now the work Act was has been kicking around for a number of years in various forms but it really hadn't gotten traction. 
 And it was really sponsored by Senator Bernie Sanders from Vermont and. 
 
 [15:05] We worked with them to modify some of the language, and then to help them find a republican co-sponsor for the bill and we were able to meet with and, answer all the questions of Senator Jerry Moran from Kansas a Conservative Republican from Kansas and he agreed to become a co-sponsor the bill, and then once it was a it was a bipartisan piece of legislation we were then able to start talking to the chair of the Senate help committee the health education labor and pensions committee. 
 To get it included into the secure. 
 
 [15:42] Now what the work Bill does is it there are several Provisions in within it. 
 But primarily it is focused on helping business owners become sell their companies to their employees. 
 
 [16:00] Often it will be through an ESOP but it doesn't discriminate against other forms of employee ownership like an employee ownership. 
 Or a worker Co-op but most employee ownership of the United States about 95 percent of it is really esops. 
 And the program works through the establishment of an employee ownership initiative at the US Department of Labor, and that initiative will serve as a grant-making apparatus where grants will be given to the states and the states will award those grants to. 
 Colleges universities they may administer the program themselves potentially nonprofits state to local municipalities or organizations. 
 
 [16:47] And those grants. 
 Will be used to provide education to even provide feasibility studies on forming an ESOP hmm. 
 And over the next five years Congress has authorized the expenditure of 50 million dollars for these efforts. 
 And it starts in the first year is going to be 2024, that the funds will become available and will continue for the next five years and the amount increases each year during those five years but of course after that will will be well the program will be evaluated and hopefully it will be a success and will be able to get the, the program reauthorized and funded into the future. 
 But embedded in this is a very important regulatory requirement that the community has been seeking for decades. 
 And it's around what we call adequate consideration which is sort of a meaningless term for most people sure but what adequate consideration is, is the process and procedure by which an ESOP trustee values. 
 
 [17:58] The cost of the shares, that an ESOP is purchasing or selling and making sure that the trustee is giving adequate consideration to all the various factors and that the price of the ESOP is paying for the company is a good face, fair market value for that company Arisa is designed to protect the employees. 
 And therefore the Department of Labor and the government has an interest in making sure that the employees don't overpay for the company that they're buying sure. 
 Yeah so far on adequate consideration are you saying that the Department of Labor. 
 Is going to have some some more guidelines and let me back up a second because I think people do probably need to understand a little deeper than that before we jump into the, to the Department of Labor for an ESOP transaction it is a negotiated value between a seller who is the shareholder and their advisor. 
 And a trustee who's independent of the transaction. 
 And their valuation firm who supports the trustee to come up with a valuation which were calling adequate consideration that's the terminology but the actual not that actual net dollar number is going to be negotiated between a buyer and seller. 
 The trustee right now operates under a Department of Labor process. 
 
 [19:17] Then and that includes hiring an independent valuation firm and going through this negotiation arm's length negotiation. 
 So in the past there hasn't been a lot of guidance on the department from the Department of Labor, in helping people to determine what's the best way to develop adequate consideration and so what the industry is done. 
 Professionals have come up with what they think are best practices and then the company now is subject to Department of Labor investigating, that and then being subject to hey well you know that's overvalued or whatever and they're in their interaction so so the issue I think really was the Department of Labor hasn't really given guidance is that kind of how you would explain it. 
 
 [19:58] That's near here is how I would explain it here the biggest perhaps the most important. 
 Factor in the sale of any company is, the agreement between the the buyer and the seller on how much the company is worth absolutely there's nothing more fundamental than that yep, and for an ESOP transaction is think of it in terms of you the seller is clear right whoever owns the company we know who they are. 
 For the buyer if the ESOP is buying the company. 
 Then it's the trustee representing the employee beneficiaries of that ESOP trust that must represent their. 
 
 [20:43] And so the trustee has to be as you put it independent from the buyer and they have to have solid independent professional advice on valuing the company and its assets. 
 And then they can negotiate with the seller what the actual agreement will be to sell the company to the ISA. 
 
 [21:03] The problem is that the US Department of Labor has never defined with any Clarity or certainty what that process should look like. 
 And instead his had a strategy of what we call regulation by litigation. 
 You know it's kind of like being a traffic cop but not telling you what the speed limit is. 
 
 [21:26] You know we we know that we know what that you're driving too fast when we see it, and you should know because we pulled a car over last week on the street and he was driving too fast so if you know that car you should know that you were going too fast, it's a very backward way of approaching things and. 
 We felt for a very long time that this was a necessary piece of regulatory Clarity that shouldn't be that hard to develop I mean after all the IRS has very clear guidance on how to value a company, for tax purposes. 
 And honestly we could just use the same process that the IRS uses at the Department of Labor and it would be perfectly clear. 
 
 [22:12] But. 
 
 [22:13] In order to get that Guidance the association has been pursuing on behalf of our membership a notice and comment rulemaking where the Department of Labor will make it proposed rule that describes, what they believe an adequate consideration process would look like. 
 
 [22:32] The interested stakeholders you know the industry the professionals the insurers the trustees the employee owners themselves the retirees. 
 And make comment on what their proposals are. 
 They take into consideration all of those comments and then they issue a final regulation this is the process by which regulations are developed every single day in our government and it's the process that's outlined by the administrative procedures Act. 
 Unfortunately the Department of Labor has denied us the ability to weigh in and make comment and provide input into the way that we're being regulated. 
 Instead the Department of Labor has investigated and they have reached what you referred to and we call the, a small number of what we call Process agreements but if here's the problem with process agreements first of all they. 
 
 [23:28] They're about six or seven major process agreements that have been developed over about a six or seven year time period. 
 And the position that the Department of Labor takes. 
 Is a little bit different in each one hmm now if you formed your ESOP 10 years ago. 
 Standard under which that he thought was going to be judged today is different than the standard under which it was judged by the years ago. 
 Um that's one reason why there needs to be an actual regulation put in place the second big reason why the process Agreements are really an unfair way of approaching things. 
 
 [24:05] Is because it's a it's an agreement made between a prosecutor the US government. 
 
 [24:14] Purses a defendant a single company and is limited to the specific issues of that company. 
 You know maybe it was a Manufacturing Company maybe it was an Architecture Firm. 
 But they're all different in the valuation of that company is going to be very unique so. 
 
 [24:34] The process Agreements are forced under duress. 
 Under threat of we're going to prosecute you hmm you have to agree to this and if you don't we're going to go to court well. 
 Where was the opportunity for everyone else in the community. 
 
 [24:51] To provide their input well there isn't no and that's why it's on the land fair and that's why it's actually a violation in our view of the administrative procedures act now that's I think you said that very well I know it's kind of a deeper concept for a lot of people to dig into, but I think you hit all the highlights and it kind of goes back to 4, go back and going back to high level this is where your role in your Association plays such a significant role in helping to kind of continue to shape. 
 What right now is is somewhat imperfect but can be done better you know so that the expectations can be a lot more clear and we don't have as many Department of Labor headaches in the future with other transactions. 
 That's right and and the reality is is all of our common goal and the Department of Labor's mission. 
 
 [25:39] Should be to create the best environment possible, for qualified retirement plan to be established and succeed but the way that they've approached it for almost 50 years now is the exact opposite of that, I would I would submit that perhaps the single biggest reason that more Americans don't have access to esops, is because the Department of Labor has not done its job and provide a clear regulatory guidance and that's a shame because that's millions of Americans, who would have greater Financial Security they would have far better retirement savings and they would be owners in the company where they work meaning that their jobs would be much more stable. 
 And all of that is because you know far too often owners who want to sell to their employees through an ESOP. 
 Get into the process and they become scared. 
 The Department of Labor coming back down the road and second-guessing the decision or the valuation or the price that was agreed to. 
 Which is understandable reaction yep I'm sure we want to make sure that more owners. 
 Are confident that they can go through the process they can reach a fair agreement with a trustee and and our and the government is going to come in and second-guess the agreement that they. 
 
 [26:58] Now that's great so I think that was really well said the if we go into some of the reasons they do want to go and do their ESOP will talk a little bit about the 10:42 and, the secure access I want to set this up again for people that don't I say 1042 and I got to know that some people don't really know what that looks like or what it is. 
 The call I had before this episode today was with a company that was you know a c-corp already and what they get to do and their transaction as we get to do the transaction as a c-corp. 
 And then once we sell the stock we get to defer the capital gains on that transaction because they're an existing C corporation under. 
 The 1042 rules right now so that would work and then we get to elect S Corp status so then we get to pick up this S Corp exemption. 
 So right now under law an s-corporation cannot use the 10:42 to defer the capital gains, but with the secure 2.0 we are moving into as the future goes some some rules that will help an S corp actually utilize that 1042, so before we jump into that can you tell me this from your perspective why was the escort never allowed to use the 1042 or is this just a political, reality it was straight up a budgetary considerations okay just a budgetary yeah it was when when Congress put in effect that the 1042, exemption for deferral for or esops. 
 
 [28:26] It was just too expensive to include escorts and then I later Act. 
 Allowed a qualified retirement plan in this case an ESOP to have an exemption from a, prohibition on owning shares in an S corporation business so he stops are unique in that regard now because most qualified retirement plans can't own stock in an S corporation. 
 But Congress in 1996 nice occasion and made it so that an ESOP in fact can hold shares an S corporation. 
 And that made as carbs eligible for all of the tax benefits of an ESOP and exemptions, but Congress didn't fix that time the 1042 hmm so the 10:42 benefit actually benefits the seller. 
 And the exemption the s-corporation exemption benefits the ESOP company. 
 
 [29:30] So we have long felt that it that playing field needs to be leveled between C corpse and escort. 
 And then the community had developed workarounds, so that as an s-corporation quickly time the shift to a c-corp. 
 Get them 10:42 deferral then shift back to an s-corporation but that's a an unnecessary complication. 
 So what we working with other groups in the community we were able to get included into this legislation not the full deferral which is what we would like to see eventually but we at least got a start on it. 
 So that a few years from now owners who sell their S corporation to an ESOP will begin to immediately take a deferral I believe it's up to ten percent capital gains. 
 But we will be continue to work to increase that percentage over time I get it so it as an equal benefit to C corporation but it is a huge incentive for the formation of an employee-owned company you know it's funny we the ESOP Association has a, nonprofit Foundation the employee ownership Foundation is affiliated with us and last summer. 
 
 [30:48] We helped put on an International Symposium at Oxford University. 
 Really start exploring the obstacles to more employee ownership globally. 
 And we were primarily comparing and contrasting the American ESOP model. 
 To the UK's employee ownership trust model and. 
 
 [31:13] What was terrific about that is that we had delegates last year at delegates from nine different countries and ngos representing those same countries one of them was Canada, and Canada literally just last week put forward a proposal to form their own type of employee ownership Trust. 
 
 [31:34] But the unfortunate thing is that they didn't include, the tax incentives for the seller that we have seen over and over and over again as a necessary ingredient for the owner to be willing to sell to their employees yeah because. 
 You know there is there there needs to be a reason for their financial advisers to make sure they're aware of the option number one and if there's a tax benefit to it they have a responsibility to do that but second. 
 
 [32:04] Owners will often. 
 
 [32:07] Take I don't see they take greater risk but they may feel more at risk selling to an employment to their employees through an ESOP. 
 Dennis I just sell to any old buyer. 
 Yeah and the reason for that is is going to be examined by a government agency well that could be yeah and that in the reality and the Practical part of the deal and I just I just did a roll out for a new ESOP I did, and we're walking over sitting around the table talking about the ESOP to the employees and you know what I had said to him is look the sellers could have sold this to a strategic buyer. 
 I mean this this business could easily sold, but I said you got to realize in this is hard for people employees understand they're taking a more of a risk because they're going to have to hold that bank financing but their subordinate seller note is going to get paid down you know 10 years right so they got to take the risk of that transaction. 
 So having the 10:42 and this case we weren't able to use it because we were an escort but having the 10:42 definitely compensates them for some of that risk. 
 
 [33:05] And I think between and this is maybe a philosophical thing but between a strategic sale and an ESOP I think everybody wins more in regards to some of the some of the qualities of an ESOP than we do at the Strategic sale. 
 So it does it does make sense for you guys to you know Advocate that, and I've done some different podcasts I did a podcast with a guy from Australia who does employee ownership over there they don't have any tax benefits. 
 At all like there's nothing that they're still doing a lot of ESOP type of you know it's not the same as an ESOP but it's Eli Quixote and then I think UK has the tea but they do have some tax benefits but they don't have the 10:42, but I think that people the benefit once it's a trust there is no Taxi, Finance in the fact that the trust isn't getting taxed at all yeah so has the equivalent of our escort. 
 
 [33:58] Has Corporation benefit but the seller in the UK actually absolutely does get significant capital gains benefits. 
 Thumb tacks. 
 Benefits well that's good yeah and and just to clear it to there's there is eot in this country and I did I did a podcast on this on just explain the difference between the US, Quixote. 
 And the UK and the eot hear it there's no tax benefits at all it's it's you know it's a little simpler but it's not like an ESOP I mean there's nothing like an ESOP that's why it's like. 
 You know when you explain the cash flow and the tax benefits people are like what I don't I get this from on people all the time I can't believe that I'm like yeah it's true you know and I get to kind of do the numbers and show them how yeah it's true you know and that's pretty amazing. 
 Well it is and it's a huge benefit, I always bring it down to the local economy since it's such a big benefit for job stability economic stability you go into any Community where there's a there are. 
 
 [35:02] Well known and and decent size esops. 
 And you'll find that they're the ones that are sponsoring a little league team they're the ones that are providing donations for the local Museum they're the ones out doing the highway cleanup they're also known as probably the best place to work in town yeah it was terrific but they don't leave and the job security is there. 
 Where you contrast that as a seller thinking from the seller's perspective. 
 
 [35:31] It doesn't really matter what assurances the new owner gives you. 
 Once you don't own it they're going to do with that company what they're going to do with that guy that's the truth that's why I think that's the real real truth and how many times have you seen a company get bought back by the original owners and it goes through this divestiture and all that and then they sell it again yeah and the that's just the truth of it so I think, hands down you know you have to at least consider an ESOP in your in your strategy anymore I have yet to meet a founder, I did not say to me it was it was I was nervous about it I thought it was going to be harder than it actually was but I can tell you this is hands-down the most rewarding thing I have ever done in my life yeah because they can walk they can go to their hometown and they can stay engaged in part of their Community with their head held high and don't have to worry that after they sell the company. 
 
 [36:28] Whoever the Strategic buyer was or private equity come in and just shut it all down yeah I've been so many examples of that where a local employer sells to a big private Equity Firm or strategic buyer and then the next thing you know the jobs are gone yeah that's true so let me ask you this I mean we're almost running out of time, for what's coming next for the ESOP Association what are you guys working on over the next, you know you know year or two years or what's in the what's in the target range there well there's always, in Washington there's always something more to do yeah the passage of the legislation last year was really just the starting gun, now we need to make sure that everything that Congress intended and Congress has directed to be created actually gets followed through on, we need to make sure that the money is actually they're flowing from the Congress and from the treasury to support employee ownership. 
 We need to make sure that all of the state governments are aware of these opportunities for applying for federal grants to promote employee ownership. 
 
 [37:39] And that's also that's all follow up on the the work act and secure 2.0 act but we're also working very closely with a bipartisan group of, senators and members in the House of Representatives on a new piece of legislation that will help to start address some of the financing challenges that were finding you had alluded to this earlier fell about, how often is seller may need to do seller financing and subordinated loan for maybe the last 10% or 15% or sometimes more, of any sub. 
 We are working to help create a new type of lending facility under the existing sbic program that would be unique for employee on company's Nissan, they're going to call the employee Equity investment companies CICS and they will be able to provide government-backed. 
 Lungs, for the purchase of a company or a to an ESOP they'll also be available for the expansion or recapitalisation of an existing you saw. 
 
 [38:48] So we're expecting this legislation to be introduced to probably in the next four to six weeks we're really excited about it so we're going to be working on getting that passed as well. 
 
 [38:56] Then the association is also where you are we're like I said we were growing rapidly we've just, I'm grown from 18 chapters to 19 chapters so we're adding a Florida Chapter and a new Rocky Mountain chapter cool which really excited about we're getting those off the ground and in any given year close to 15,000 people attend one of our chapter Regional or national conferences that's a lot we are able huge amount of programming that's out there and available yeah we're really excited about it of course all of this, is possible because of the work in the support and the funding that our member companies and are professionals like you, provides the association now and and that's where it's a community of people trying to help everybody get the idea and that's what this podcast is all about is just letting people know about it and I know I can our Marketplace, when I first started getting any stops I mean this is so many people didn't understand them and I kept wondering why I mean it's just it does it makes sense but I think that the community of Esau people I think we're all bound together to do what, what really needs to be done and advocacy is part of the process awareness education and we all kind of need to do our part because it is it's all going to be good for everybody at the end of the day so. 
 Definitely appreciate what you guys are going to do or what you're doing what you're going to do in the future here at sounds I'm pretty excited about that I've not heard about the eei see but that's a that's a pretty exciting and getting financing as a big part of the whole. 
 The whole process as well. 
 
 [40:26] Well it is and I we really appreciate what you do Phil and the opportunity to come out of your show and talk to your audience and, of course if anybody ever needs to get questions answered or wants to learn more we've got a terrific website both the association at, ESOP Association dot-org and our foundation is the employee ownership foundation.org. 
 And there's a lot of especially on the foundation website there's a lot of free information about 20 different white papers, on things to consider if you're looking at forming an ESOP and things that as a current ESOP you may want to be thinking about and in terms of administering and running your company, great I was going to ask you to give us the website but so thank you for that so people can find you guys. 
 But you are very very vibrant organization and definitely you know a good a good place because people do look for information all the time. 
 And I know people say like there's there is a lot of information so part of this was our job today was to kind of help people understand what you do. 
 And what kind of resource you provide which I think is a significant and substantial resource to people that are thinking about Aesop's so thank you again. 
 
 [41:40] Alright well thank you fill we appreciate it all right so so for those that are listening today thank you so much for joining and we'll have more information on the ESOP Association on our website at journey to an ESOP calm as well. 
 And we'll see you on our next step on this journey to an ESOP