Texas House Bill HB2246

Texas 2021 - 87th Regular

Caption

Relating to companies in which employees have ownership interests through employee stock ownership plans.

Impact

The act establishes the Employee Ownership Assistance Office within the Texas Economic Development and Tourism Office. This new office is tasked with promoting awareness of ESOPs among businesses and providing technical assistance, ensuring that companies can effectively gauge the feasibility of implementing such plans. By fostering employee ownership, the bill aims to contribute positively to the state economy by creating a more invested and engaged workforce, as employee-owned businesses tend to prioritize sustainable practices and employee retention.

Summary

House Bill 2246 aims to facilitate and promote employee ownership in businesses across Texas by establishing provisions for employee stock ownership plans (ESOPs). The bill amends the Business Organizations Code, allowing professional corporations to designate their employee stock ownership plans as authorized person entities, thereby simplifying the process for businesses to allocate ownership interests to employees. This consideration seeks to enhance employee engagement, strengthen workplace loyalty, and potentially improve company performance through increased employee ownership participation.

Contention

Some points of contention surrounding HB 2246 may arise regarding the implications for traditional business ownership structures and the associated regulatory burdens. Critics may argue that the bill disproportionately favors employee-owned businesses in state contracts, therefore potentially disadvantaging non-employee-owned companies. Additionally, the requirement for an outreach and information program could provoke debates over state resources and priorities, as some may question the necessity of government intervention in promoting specific business models.