IRS Form 990T The ESOP owns with JPL/Caltech the JPL campus with a leveraged ESOP
IRS Form 990T The ESOP owns with JPL/Caltech the JPL campus with a leveraged ESOP; applicability to the Caltech/JPL campus
24 years ago I proposed that a public hospital could set up a for-profit entity that Public hospitals commonly do to sell in home health care or hospital equipment.My proposal was much more grandiose, it involved the public hospital setting up a for-profit subsidiary that would be owned by an ESOP.The ESOP would be a leveraged ESOP That borrows funds to purchase a majority of the public hospital’s assets to include buildings and operations.The public hospital would remain the operating entity and the trustee of the ESOP.The case I used was Erlanger Hamilton county hospital system of Chattanooga back in 1996.It is worth about $500 million and my plan as of 15 years ago would be that the IRS would allow both a 203 B and a ESOP to coexist side by side only if the hospital placed the $500 million sale to the Leveraged ESOP into a 501 C research trust, this is a trust that is most familiar as the Howard Hughes research trust.
I thought to myself that this could work when I was listening to the talks at OPAG 2017 by Janet vertesi and Amanda Zangarari and Louis Procter.long voyages by project team members who seek to share diversity and leadership and science advancements together are better served by my ESOP model, and that would be that the private-public partnership model that is Caltech/JPL and NASA be expanded in a bold new significant way to include the employees of JPL and by extension any JPL AO mission scientists.
let me go through the Leveraged ESOP steps as for Erlanger case; The employer(JPL?) or (Caltech)sets up a for-profit subsidiary that is owned by the ESOP, the ESOP trustee borrows the amount needed to purchase most of the JPL campus and operations.This might be several $ Billions The ESOP pays down the loan with cash flows to JPL over 30 t0 50 years.The loan as its paid off becomes equity in the ESOP that the JPL employees own.We need to ask the IRS for a private letter ruling to allow the nonprofit local government 203 pension plans to continue and for the ESOP to be in place since both together will eventually produce contributions by the employer over the 20% maximum.
I propose society has an interest in allowing employees and employers to contribute more than 20% of income in cases where the purchase price goes into a 501C research ch institute, after all, I propose the research institute is also a related to the hospital or educational entity, or the research trust funds participating scientists program of its own.
What does this mean for a JPL or other entity AO?The employees on a JPL planetary mission would have ownership interests and JPL would have to adopt ESOP participations standards and democracy IE doesn’t abuse the ESOP ethic.The mission itself I think must adopt these ideas.a flagship mission cash flows pay down some of the leveraged dept contributing to the JPL capital that becomes equity in the JPL ESOP.
Can a NASA AO allow a NASA developed spacecraft to build a second spacecraft paid for by the JPL ESOP and leased for 30 years?
NASA leases an Ice Giant planetary mission from the JPL ESOP partnership and the mission scientists actually own the future mission
legalitys of spacecraft leasing and data purchase and FAR
The next blog entry will discuss more the grand unified AO and sub-AO’s