Employee Ownership Financing Act
Sponsored By: Senator Sanders, Bernard [I-VT]
Introduced
Summary
Federal support to expand employee ownership through a new Office and loan program. This bill creates an Office of Employee Ownership at the Department of Labor and a loan program to help companies convert to or expand employee ownership.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 4 benefits, 0 costs, 0 mixed.
Who can get employee ownership loans
If enacted, eligible borrowers would include ESOPs, eligible worker cooperatives, qualified 401(a) trusts, or entities acting for those plans. Loans must be used to create or increase employee ownership (the target is at least 51% employee ownership) or to preserve or expand jobs. Loans could carry interest set by a lesser-of formula, must be repaid in no more than 15 years, and must meet applicable tax and pension rules. Borrowers would need a business plan, an independent valuation and cash-flow study, and governance steps (trustee voting rights, at least two independent directors, an employee-majority committee, a retirement diversification option, and quarterly progress updates). The Director could allow subordination to participant interests in bankruptcy in some cases.
Federal loan fund for employee ownership
If enacted, the bill would create an Employee Ownership Loan Program Fund in the Treasury. It would authorize $500 million for fiscal year 2026 to make loans and guarantees. Loan repayments would go back into the Fund and be available to the Director without more congressional approval. The total outstanding loans and guarantees under the program could not exceed $500 million at any time. The bill also authorizes $5 million for FY2026 administrative costs.
Employees get option to buy closing plants
If enacted, employers ordering a permanent plant closing would have to offer affected employees a chance to buy the plant through an ESOP or an eligible worker cooperative. The employer must pay for an independent appraisal and provide financial and legal disclosures. If employees and the employer begin good-faith talks within 60 days, the plant must stay open during talks and for 30 days after the closing date. The bill also would exempt certain pension and tax prohibited-transaction rules for ESOP purchases made under this buyout rule.
New Office to expand employee ownership
If enacted, the Secretary of Labor would create an Office of Employee Ownership within 90 days. The Office would hire a Director to run the new program and an Advisory Council. The Council would have seven members who meet at least four times per year and send an annual report. The Secretary would have one year to issue implementing rules and could receive appropriations to run non-loan parts of the law.
Sponsors & CoSponsors
Sponsor
Sanders, Bernard [I-VT]
VT • I
Cosponsors
Sen. Shaheen, Jeanne [D-NH]
NH • D
Sponsored 7/24/2025
Sen. Blumenthal, Richard [D-CT]
CT • D
Sponsored 7/24/2025
Sen. Gillibrand, Kirsten E. [D-NY]
NY • D
Sponsored 7/24/2025
Peter Welch
VT • D
Sponsored 7/30/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov