Employee Ownership Financing Act

The Employee Ownership Financing Act would create a new Office of Employee Ownership within the Department of Labor (outside the Employee Benefits Security Administration) to run an Employee Ownership Initiative and a new Employee Ownership Loan Program. The loan program would provide loans or loan guarantees to eligible entities—primarily employee stock ownership plans (ESOPs) or eligible worker-owned cooperatives (and related trusts or sponsors)—to achieve or expand 51% employee ownership or to increase employee participation and employment. Loans would have terms designed to encourage stability (up to 15 years, interest rates tied to borrowing costs or current market rates) and could be subordinated in bankruptcy in certain cases. The bill also imposes governance and disclosure requirements for loan recipients (such as independent directors, employee involvement, and board composition) and creates a framework for a 7-member Advisory Council to assist the Secretary. In addition, it expands protections and processes around plant closings by requiring an offer to purchase by an ESOP or eligible worker-owned cooperative, with independent valuations and specific disclosures. The act authorizes substantial funding for the loan program (starting with up to $500 million in 2026) and requests ongoing appropriations for administration and implementation.