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Committee approves HB 1038 to let state treasurer buy down ESOP loan rates through linked deposits
Summary
The committee passed HB 1038 as amended to allow the state treasurer to use linked deposits (certificates of deposit) to reduce interest rates on loans used by employees to buy their employer through an employee stock ownership plan (ESOP); the amendment extends loan maturities to 10 years and removes a $1 million cap.
Representative Jake Teschka presented House Bill 1038 and said the measure creates a linked‑deposit financing tool intended to lower the cost of loans used in employee‑stock‑ownership plan transactions. Under the bill, a lender that makes a loan to an ESOP purchaser may receive a state treasurer deposit (a certificate of deposit placed with the lender's institution) at a below‑market rate; the reduced rate is passed through to the ESOP loan, lowering borrower costs.
Teschka said the amended bill aligns the CD rate with the loan rate, increases permissible loan maturities up to 10 years, and removes a $1,000,000 cap so…
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