Employee Ownership Legislation Progresses in Congress

The Main Street Employee Ownership Act (S. 2786) has been included in the Senate's National Defense Authorization Act (NDAA), widely seen as a must-pass bill. The Senate is expected to vote on the NDAA as early as next week. It would be the first pro-ESOP bill to become law in 21 years.

The bill would focus on increasing the lending and outreach efforts of the Small Business Administration (SBA) to support ESOPs and worker cooperatives by:

• Updating the SBA's lending practices to better serve employee-owned businesses
• Empowering the SBA to assist small business owners in converting their companies to employee ownership through outreach and training programs
• Directing the SBA to coordinate with funds licensed as SBA Small Business Investment Companies and its Microloan program to consider employee ownership as an area for investment and lending

Senator Kirsten Gillibrand (D-NY) has campaigned for the bill (see the May 1 Employee Ownership Update). A press release from her office quotes her as saying, "Employee-owned businesses have a strong track record of better pay and retirement benefits for workers and a commitment to creating local jobs."

The Senate bill has won consistent bipartisan support and is co-sponsored by Senators Gillibrand and James Risch (R-ID).

The companion bill in the House of Representatives (H. 5236) passed the House in a voice vote on May 8, and is also included in the House version of the NDAA. Its primary sponsor, Nydia M. Velázquez (D-NY), says, "This bill will empower more employees to invest in firms and coops where they work, raising wages and creating greater economic opportunity."

The next step for the bill is the conference committee to reconcile the House and Senate versions of the NDAA, which is expected in late summer or early fall, following which the bill would proceed to the President to be signed into law.