Overriding the ESOP veto
As the annual veto session begins, state lawmakers have an opportunity to help Missouri companies remain locally-owned.
The state’s General Assembly passed a bill this year to create new incentives that would make transitioning into an employee-ownership model more attractive to business owners in the state.
House Bill 2030, sponsored by Rep. Denny Hoskins, a Republican from Warrensburg, would have allowed business owners to defer up to 50 percent of the taxes gained from the sale of stock to an employee stock ownership plan as long as the company is more than 30 percent employee-owned. The bill passed both the Missouri House and Senate with support from both Republicans and Democrats.
“What this would do is it allows many businesses to remain local and be owned by the employees,” said Rep. Hoskins during a January hearing on his bill.
Employee-owned Missouri companies have also supported the bill, noting how a transition to employee-ownership helped them achieve growth.
During a hearing on the bill, Burns & McDonnell lobbyist Fred Dreiling recounted the history of the company’s bid to become employee-owned and encouraged lawmakers to pass the bill so that more Missouri businesses would take this route.
“As you know, the employee-owners of Burns & McDonnell are doing very well,” Dreiling said. “Those that are following in Burns & McDonnell’s footsteps toward becoming an ESOP could benefit from this legislation.”
Sen. Ryan Silvey, a Kansas City Republican who sponsored a similar bill in the Senate, said other companies are supportive as well.
“HyVee is probably the one people are most familiar with because they put it in their commercials, ‘We are employee owned,’” said Sen. Silvey, during an April Senate debate. “But they have already went through this process, so they don’t benefit from this. Burns and McDonnell doesn’t benefit from this. But they are all very supportive of this legislation because they know what it’s meant to their company and to their employees. It’s something they want to see other companies be able to do more easily than they did.”
Despite this bipartisan support, Gov. Jay Nixon chose to veto this effort. Now, the Missouri Chamber of Commerce and Industry is urging lawmakers to override the veto and pass this bill into law.
“This innovative proposal was widely supported during the legislative session so there is hope that lawmakers will choose to override the governor’s veto and pass House Bill 2030 into law,” said Daniel P. Mehan, Missouri Chamber president and CEO. “We urge Missouri legislators to override this veto and help Missouri companies stay locally-owned.”