AUGUSTA — Hoping to spur the growth of employee-owned businesses in Maine, a Lewiston lawmaker is pushing for state tax breaks for company owners who convert their firms into cooperative or employee-owned ventures.

Sen. Nate Libby, D-Lewiston, told colleagues the proposal would “help facilitate a more secure and empowered future for Maine workers — whether at mom-and-pop shops, local farms, larger mills or in their homes — by giving them the reins to run the business or their housing cooperative.”

“They’re already the labor behind businesses’ successes,” said Libby, the Senate majority leader. “Encouraging and supporting transitions to employee-owned structures cements their power even further, right where it belongs.”

At a hearing this month before the Legislature’s Taxation Committee, Libby’s bill attracted strong support and little opposition. The panel has yet to act on it.

Beckie Conrad, president of the 1,000-member Lewiston Auburn Metropolitan Chamber of Commerce, called the measure “smart tax policy that will stimulate expansion by preserving and growing jobs” in her testimony to the panel.

The bill would exclude from Maine income tax the amount of gain, up to a maximum of $750,000, that a business owner makes in transferring the company to an employee stock ownership plan, eligible worker-owned cooperative, consumer cooperative or affordable housing cooperative.

It also requires the Department of Economic and Community Development to do more to educate Mainers about employee-owned businesses and how they can be created. It would also offer practical help to those endeavoring to try it.

Conrad said the proposal “would be a very effective tool to strengthen local ownership and control and promote economic and community development for certain kinds of businesses.”

“Reducing the cost of financing through income tax exemption should become a significant incentive to convert business assets to cooperative or employee ownership,” she said, and serve as a way to retain talented workers and “keep successful businesses active within the state’s economy.”

Libby said it is known “Maine is facing incredible workforce challenges.”

“Apart from climate change,” he said, “workforce development, retention and attraction challenges are the greatest threats to Maine’s economy.”

Mark Adams, president and chief executive officer of Sebago Technics in Portland, said his company has been employee-owned since 1998. It stands today, he told legislators, “as one of Maine’s largest engineering consulting firms with tenured employees who are proud owners of not only the company” but of six-figure employee stock ownership plans.

When Sebago Technics opted for employee ownership, Adams said, it was one of only a few in Maine. Now, however, there are about 50 across the state that cover every industry from construction to engineering, financial services to agriculture and manufacturing to technology, Adams said.

Michael Newsom, owner of  The W.J. Wheeler Insurance Agency in South Paris, told the tax panel the proposal could make a big difference in what he chooses to do.

Newsom said his great-great-grandfather, William Jordan Wheeler, founded his agency 155 years ago. It has stayed in the family ever since, with an orderly transfer of ownership from one generation to the next.

When Newsom took the reins a decade ago, he said he began thinking about how to keep the agency going into the future.

“When I was a kid here in the Oxford Hills,” he said, “there was a vibrant class of business owners in our community” that spanned a range of enterprises, from machine shops to wood products manufacturing.

The owners lived in the community and “had roots with us and they were concerned not just with profits but with what we call quality of life.”

Now, though, “they’re pretty much all gone,” Newsom said.

The consequences include “wage stagnation, absentee ownership and a degraded quality of life,” Newsom said.

He said he does not want to sell his agency to the high bidder, adding it to the long list of once-local companies that are either gone or part of a big corporation that will not care “a whit about our community or our employees.”

If he sells the agency to one of those firms, Newsom said, it will lay off some of his employees, “eliminate our pro-family workplace culture and maximize the profits to be had.”

“To avoid this dreary future, I could consider selling the business to my employees,” he told legislators. “They’ll preserve our culture as a business, they’ll be its best stewards, since its success will mean their success, and they’ll make investments in themselves as owners and in the community as a whole.”

Newsom said Libby’s bill would help close the gap between what he could get for selling his firm on the open market and what it would bring in if he could work out a way for it to become an employee-owned operation.

Experts said that transitioning more businesses to employee ownership would likely help make the state more attractive to young, educated workers.

Rob Brown of the Cooperative Development Institute, a Northport nonprofit, said recent studies have found “young workers in employee-owned companies were in a much better financial situation” than their counterparts in more traditional firms, “with 33% higher wages, 92% higher household wealth and 53% longer job tenure.”

The proposal would also make it more feasible for housing owners to sell to their tenants.

“It will provide more stable economic development and affordable housing, because ownership is rooted in our local communities,” Larry Dansinger of Bangor told lawmakers.

Craig Saddlemire, manager of Lewiston’s Raise-Op Housing Cooperative, also backed Libby’s proposal.

“Creating more opportunity for local ownership of housing and business is an effective way to rebuild our economy, sharing both the risk and rewards that come with ownership,” he said.

The tax panel is likely to vote on the bill soon. To become law, it needs the backing of the House, Senate and Gov. Janet Mills.