Iowa

In a session year shortened due to the COVID-19 pandemic, the Iowa Legislature still managed to pass significant bipartisan legislation impacting livestock and food production. Most notably, SF 2413 (signed by Gov. Kim Reynolds in June) addresses what Sen. Ken Rozenboom says are “the most critical issues facing the livestock industry in Iowa today: foreign animal diseases and protection of food production facilities.”

Under this measure, he says, the Iowa Department of Agriculture and Land Stewardship now has a more clearly defined process for how to respond to a foreign animal disease. The state agency had participated in a U.S. Department of Agriculture mock drill earlier and found some weaknesses in its ability to respond to outbreaks of such diseases as African swine fever or avian influenzas.

Iowa’s statutory language has now been broadened by replacing the word “livestock” with the word “animals,” thus allowing the department to segregate, treat or dispose of diseased animals, including those that may be abandoned by their owners.

An ESOP is a type of tax-qualified retirement plan, one that states such as Iowa have identified as a tool for helping retain businesses when owners decide to sell some or all of their interests in a company.

Here is how an ESOP generally works: A privately held company contributes its stock, or money to buy its stock, to a retirement plan for employees. Each worker participating in the plan has his or her own account, and an ESOP trust is created to hold these shares of company stock. ESOPs can be a mechanism for allowing partial or full ownership of a privately held company to be transferred to employees (when the owner retires, for example). In contrast, the sale of a business to an outside entity increases the risk of lost jobs.

According to the National Center for Employee Ownership, other potential benefits of ESOPs include improving retirement security, reducing a company’s tax burden, bolstering worker morale, and giving employees a voice in management. Since the passage of legislation in 2012 (HF 2465), Iowa has provided a tax incentive to encourage the sale of in-state businesses to employees: Owners get a 50 percent deduction from income taxes on any net gains from the sale; the transaction must result in the employees (via the ESOP) owning at least 30 percent of the company. Iowa also reimburses 50 percent of the costs for businesses that conduct studies on the feasibility of setting up an ESOP.

Amid widespread protests and calls for change in response to the May 25 killing of George Floyd by police in Minneapolis, the push for state-level legislative reforms has intensified. Here is a look at some of the bills and policy proposals in three Midwestern states: Minnesota, Michigan and Iowa.