Sponsors (7)
Introduced May 7, 2025 by Christopher Van Hollen · Last progress May 7, 2025
The bill expands and structures federal support to promote employee ownership and small-business financing and strengthens oversight, but it simultaneously increases taxpayer financial exposure, raises compliance costs and entry barriers, and grants broad discretionary enforcement authority that may create uncertainty and rights concerns.
Small-business owners (and their employees) gain materially expanded access to federally supported capital and structured financing (debt, equity, preferred, synthetic equity, annual debenture guarantees, and a $5 billion annual leverage facility) to support ownership transitions and growth.
Employees and retirement-plan participants (ESOPs/worker cooperatives) are better protected in ownership transitions because sales must preserve participant ownership shares, require independent trustees and fairness opinions, and the statute tracks ESOP/cooperative creation.
Taxpayers and the public benefit from stronger oversight, enforcement, and reporting: mandatory audits, regular examinations, nationwide subpoena/enforcement authority, annual loss/accounting reports, and disclosures (including paid-expeditor and licensing reporting) improve transparency and the ability to detect and deter fraud or mismanagement.
Taxpayers face substantial increased federal financial exposure because the United States pledges its full faith and credit for trust-certificate/guaranteed debentures, a recurring issuance program, and an annual $5 billion leverage facility—any defaults or rapid expansion of guarantees could create sizeable federal liabilities.
Licensees, small firms, and applicants will face materially higher compliance costs and barriers (frequent exams, audited valuations, approved-CPA requirements, filing penalties, leverage fees, application/licensing fees, and a $10 million private-capital floor), which may exclude smaller entrants and raise costs passed to consumers.
The bill concentrates substantial regulatory discretion (Secretary and delegated authorities, SEC exemption powers, approval/waiver paths) that could create uncertainty, inconsistent outcomes, and perceived politicization of licensing, valuation, and exemption decisions.
Based on analysis of 23 sections of legislative text.
Creates a Commerce-run licensing program that guarantees debt for ownership investment companies to fund ESOPs and eligible worker cooperatives, with capital, oversight, and concentration limits.
Creates a federal licensing and credit-guarantee program run by the Department of Commerce to fund employee ownership and eligible worker-owned cooperatives. Licensed "ownership investment companies" (OICs) can make capital investments and borrow with Treasury-backed guarantees under strict licensing, capital, underwriting, reporting, and oversight rules. The program limits annual federal leverage, sets borrower and concentration caps, requires ESOP/independent trustee protections, and gives the Secretary broad examination, enforcement, and removal powers to manage financial and governance risks.