Bill Text: TX HB2389 | 2023-2024 | 88th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to employee-owned companies.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2023-05-11 - Referred to Business & Commerce [HB2389 Detail]

Download: Texas-2023-HB2389-Introduced.html

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88R7386 JES-F
By: Shine H.B. No. 2389

A BILL TO BE ENTITLED
AN ACT
relating to companies in which employees have ownership interests
through employee stock ownership plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 301.004, Business Organizations Code, is
amended to read as follows:
Sec. 301.004. AUTHORIZED PERSON. For purposes of this
title, a person is an authorized person with respect to:
(1) a professional association if the person is a
professional individual; [and]
(2) a [professional corporation or a] professional
limited liability company if the person is a professional
individual or professional organization; and
(3) a professional corporation if the person is:
(A) a professional individual;
(B) a professional organization; or
(C) an employee stock ownership plan, as
described by Section 303.0015, established by the corporation.
SECTION 2. Chapter 303, Business Organizations Code, is
amended by adding Section 303.0015 to read as follows:
Sec. 303.0015. AUTHORIZED PERSON: EMPLOYEE STOCK OWNERSHIP
PLAN. For purposes of this chapter, an employee stock ownership
plan, as defined by Section 4975(e) of the Internal Revenue Code of
1986 (26 U.S.C. Section 4975(e)), established by a professional
corporation, is an authorized person if:
(1) all of the voting trustees of the plan are
professional individuals who are licensed to provide at least one
category of the professional services described in the
corporation's certificate of formation; and
(2) the ownership interests in the plan are not
directly issued to any person other than the plan trust or a
professional individual licensed to provide at least one category
of the professional services described in the corporation's
certificate of formation.
SECTION 3. Subchapter B, Chapter 481, Government Code, is
amended by adding Section 481.030 to read as follows:
Sec. 481.030. ESTABLISHMENT OF EMPLOYEE OWNERSHIP
ASSISTANCE WEBSITE. The office shall establish and maintain an
Internet website for employee-owned company information to serve as
a source of:
(1) outreach and information dissemination for
fostering increased awareness of employee stock ownership plans;
and
(2) technical assistance to assist businesses in
determining the feasibility of establishing an employee stock
ownership plan.
SECTION 4. Subchapter B, Chapter 2161, Government Code, is
amended by adding Section 2161.0611 to read as follows:
Sec. 2161.0611. RETENTION OF STATUS AS HISTORICALLY
UNDERUTILIZED BUSINESS. (a) In this section, "employee stock
ownership plan" has the meaning assigned by Section 4975(e),
Internal Revenue Code of 1986 (26 U.S.C. Section 4975(e)).
(b) Notwithstanding any other law, a historically
underutilized business that establishes an employee stock
ownership plan retains the business's status as a historically
underutilized business after the business establishes the plan if a
majority of members of the board of directors of the business are
economically disadvantaged persons.
(c) If a business described by Section 2161.001(2) is
certified as a historically underutilized business and the business
establishes an employee stock ownership plan that causes the
business to lose status as a historically underutilized business or
eligibility for recertification as a historically underutilized
business, the business retains that status or eligibility for a
period of not more than 10 years after the date the business
establishes the plan.
SECTION 5. This Act takes effect September 1, 2023.