Senate to Hold Hearing on Employee Ownership This Thursday
The Senate’s HELP (Health, Education, Labor, and Pensions) Committee will hold hearings on employee ownership at 10am Eastern on Thursday, July 24. The hearing’s title is "Empowering Workers by Expanding Employee Ownership," and the public can livestream it at the hearing’s landing page.
A press release from the committee describes the purpose of the hearings as “strengthening Employee Stock Ownership Plans (ESOPs), empowering workers to have a stake in their company and build wealth for themselves and their families.”
The chair of the HELP committee, Senator Bill Cassidy (R-LA), and its ranking member, Senator Bernie Sanders (I-VT), are both active supporters of employee ownership.
The committee is calling four witnesses. Three are senior leaders at ESOP companies: Bill Roark (executive chair of Starfish Holdings), Eddy Dupuis (CEO of Acadian Companies), and Brock Barton (CFO of King Arthur Baking Company). In addition, Joseph Blasi of the Rutgers University Institute for the Study of Employee Ownership and Profit Sharing will also testify.
Senator Cassidy recently introduced two bills to encourage ESOPs. The first, the Employee Ownership Representation Act (PDF), would add two new ESOP company board members to the Advisory Council on Employee Welfare and Pension Benefit Plans, also known as the ERISA Advisory Council.
The second, the Employee Ownership Fairness Act (PDF) codifies and expands existing IRS private letter rulings that allow C corporation ESOPs to apply the Internal Revenue Code Section 404 contribution limit separately for (1) employer contributions to repay ESOP loan principal and (2) employer contributions to other defined contribution plans or a nonleveraged component of an ESOP. The bill expands this principle by providing that that neither contributions to repay ESOP loan principal nor contributions of employer stock to the ESOP would be taken into account for purposes of the contribution limit under Section 404. Also, the bill does not limit this to C corporations, so it would apply to S corporations as well.
Meanwhile, Senator Sanders is planning to reintroduce his Employee Ownership Financing Act, which would create a $500 billion Employee Ownership Finance Program within the DOL to provide financing for employee ownership transitions.