Sponsors (5)
The bill expands federal support and financing to help workers buy and run businesses—potentially preserving jobs and building worker wealth—but does so with meaningful fiscal exposure, added administrative complexity, and legal/fiduciary trade-offs that could shift risk onto taxpayers, creditors, and some retirement-plan participants.
Small-business owners and their employees gain access to up to $500 million in loans and loan guarantees to finance conversions to employee ownership or buyouts, increasing the ability to preserve businesses and build worker equity.
Small-business owners and workers get a centralized federal Office, Director, and staffed program to administer the Employee Ownership Initiative and loan program, which should speed outreach, technical assistance, application processing, and oversight.
Employees facing potential plant or company closures gain a formal opportunity to negotiate and purchase the business (via ESOP or cooperative) and to keep the plant open during negotiations and for at least 30 days after closing, helping preserve jobs and protect wages during transitions.
Taxpayers face significant fiscal exposure: up to $500 million in loan authority and ongoing administrative costs create default risk and, because repayments may be used without further appropriation and the bill authorizes 'such sums as may be necessary,' create open-ended budgetary commitments and potential crowding out of other priorities.
Creating and staffing a new federal Office, plus supporting an advisory council, increases administrative costs, risks duplicating existing DOL/EBSA functions, and could divert limited departmental resources unless additional, reliable funding is provided.
Exempting certain ESOP transactions from ERISA/IRC prohibited-transaction rules may reduce fiduciary protections for retirement-plan participants and expose workers' retirement savings to greater risk in some buyouts.
Based on analysis of 8 sections of legislative text.
Creates a DOL office and $500M-authorized loan program to finance employee buyouts/ESOPs, adds employee right-of-first-refusal on plant closings, and provides ERISA/IRC exemptions.
Introduced July 24, 2025 by Bernard Sanders · Last progress July 24, 2025
Creates a new Office of Employee Ownership at the Department of Labor and a federally backed loan program to help workers buy companies or convert businesses into majority employee-owned ESOPs or worker cooperatives. It adds a right-of-first-refusal for employees when an employer gives notice of a plant closing, provides tax/ERISA exemptions for qualifying transactions, establishes an advisory council, and authorizes funding to operate the program. The bill sets loan terms (up to 15 years, capped aggregate principal), requires applications to include governance and employee-engagement plans, directs the Secretary to issue implementing regulations, and authorizes $500 million for the loan fund plus start-up administrative funds.