American Ownership and Resilience Act
Sponsored By: Senator Van Hollen, Chris [D-MD]
Introduced
Summary
Would create a Department of Commerce–run Ownership Investment Facility to back loans and guarantees that help finance ESOP sales and worker-owned cooperative transactions. It would license Ownership Investment Companies and set a hard annual leverage cap of $5.0 billion while restricting how much protege firms can receive.
Show full summary
- Workers and employee-owners: Requires an independent ESOP trustee and a fairness opinion for ESOP transactions, preserves participant voting directions and allocation protections, and narrowly limits employee personal financing.
- Small businesses and sellers: Expands access to government-backed leverage for buyouts and ownership transitions, with per-license leverage limits typically up to $500 million and Protege OIC caps of $100 million.
- Investors, managers, and regulators: Would require OICs to hold at least $10.0 million in private capital, submit regular reports, undergo examinations and audits, follow conflict-of-interest rules, and operate under a sunset rule 20 years after the first license is approved.
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Bill Overview
Analyzed Economic Effects
7 provisions identified: 0 benefits, 2 costs, 5 mixed.
Caps and limits on OIC leverage
If enacted, the bill would cap outstanding leverage to non‑Protege firms at the lesser of their private capital or $500 million, and cap Protege firms at the lesser of private capital or $100 million. Two or more commonly controlled non‑impaired firms together could not exceed $1 billion. The Secretary may exclude certain U.S. activity cost basis up to $75 million or 25% of private capital (not for Protege firms). The bill also allows OICs to require borrowers to refinance so the OIC is the sole creditor and lets the Secretary restrict risky third‑party debt.
New federal leverage facility rules
If enacted, the Department would run a new federal facility to provide leverage to licensed firms. The facility could provide up to $5 billion each year and make guarantees and trust certificates when Congress funds them. Debentures could have terms up to 15 years and an interest floor tied to Treasury yields plus an added charge not to exceed 1.38%. The Department would collect a nonrefundable 3% leverage fee (1% at commitment and 2% at draw, or 3% at draw if no prior commitment).
Licensing, capital, and manager rules
If enacted, the Department would start taking electronic license applications within 540 days and must decide complete applications within 90 days. Applicants must meet a $10 million private capital minimum and show qualified management or hire experienced advisors. The Department may grant provisional approval up to one year, but provisional firms could not draw leverage until they meet capital rules. Licensed firms would face exams at least every 2 years and could be charged exam costs and licensing fees.
Loan terms and portfolio concentration rules
If enacted, loans made under the program could have maturities up to 20 years and may be extended up to 10 more years to aid orderly liquidation. Loans must be secure or of sound value. While Department financing is outstanding, a licensee could not invest more than 10% of (its private capital plus projected leverage) in any single covered business without Secretary approval.
ESOP protections and reporting rules
If enacted, ESOP transactions involving OICs would need an independent trustee and a fairness opinion before signing. On third‑party sales, ESOP proceeds would be shared as if pre‑sale shares were fully allocated. ESOPs must keep at least the same number of shares at year end unless waived. Employees could not personally finance a covered investment (few narrow exceptions). OICs would file detailed annual ESOP reports and the Secretary would report to Congress yearly. Subsidiary LLCs may be used only if the ESOP gets a majority interest and tax and governance rules are followed.
Stronger enforcement and removal powers
If enacted, the Secretary would get broad investigatory and enforcement powers over licensed firms. The Secretary could subpoena evidence, seek injunctions without bond, ask courts to appoint trustees or receivers, and revoke or suspend licenses after a hearing. The Secretary could start removal proceedings against management officials for willful violations, with hearings set 30 to 60 days after notice. Suits must be filed where the firm keeps its main office and appeals have a 30‑day window.
Securities law exemptions for OIC debt
If enacted, the SEC could add classes of ownership investment company securities to exemptions under the Securities Act and the Trust Indenture Act when it finds investor protection would not require enforcement. Certain Investment Company Act limits would not apply to senior securities if the Department guarantees that class.
Sponsors & CoSponsors
Sponsor
Van Hollen, Chris [D-MD]
MD • D
Cosponsors
Sen. Moran, Jerry [R-KS]
KS • R
Sponsored 5/7/2025
Sen. Baldwin, Tammy [D-WI]
WI • D
Sponsored 5/7/2025
Sen. Young, Todd [R-IN]
IN • R
Sponsored 5/7/2025
Sen. Shaheen, Jeanne [D-NH]
NH • D
Sponsored 5/7/2025
Sen. Schmitt, Eric [R-MO]
MO • R
Sponsored 5/7/2025
Peter Welch
VT • D
Sponsored 5/7/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov