The American Ownership and Resilience Act sets up a new federal program at the Commerce Department that backs private investment funds when those funds help workers buy the company they work at. The funds, called ownership investment companies, would put capital into deals where an employee stock ownership plan (ESOP) or worker-owned cooperative ends up holding a majority stake in the business. To attract private money into these deals, the federal government would guarantee up to $5 billion per year in loans the funds issue, with the U.S. Treasury's full faith and credit standing behind those guarantees. Each fund needs at least $10 million of its own private capital and can draw up to $500 million in federally guaranteed leverage ($100 million for smaller "Protege" funds aimed at newer managers). The bill builds in worker safeguards on every deal: an independent trustee, an independent fairness opinion, voting rights that pass through to plan participants, and a guarantee that the workers' share count cannot shrink while the federal fund is involved. New licenses stop after 20 years, and the Commerce Secretary must report yearly to Congress on losses, geographic spread, and demographic data on the workers covered.
Average Household Impact
- Federal leverage facility for ESOPs — established at $5B per year for worker-cooperative buyouts
- Independent trustee and fairness opinion — required on every ESOP transaction
- Voting pass-through to ESOP participants — required on stock sales
- Share-recirculation rule — added to protect worker ownership percentages
- U.S. full-faith-and-credit pledge — added to back fund debentures, exposing taxpayers on defaults
Corporate Benefits
- Per-fund federal leverage cap — set at $500M for primary funds and $100M for Protege funds
- Leverage fee — 3% required plus subsidy-rate offset to reduce federal cost
- Securities Act registration — SEC permitted to waive for fund securities
Transparency & Accountability
- Annual Commerce report to Congress — losses, demographics, and geographic spread required
- Semiannual valuations and biennial federal exams — required for each fund
- Removal authority for managers — added for dishonesty or breach-of-trust convictions
- 2-year revolving-door bar — added on hiring former Commerce officials who handled fund matters
- 20-year sunset on new fund licenses — established to force a future reauthorization debate
- Trust Indenture Act disclosure — SEC permitted to waive for fund securities
Congressional Summary
American Ownership and Resilience ActThis bill creates an investment facility to support the conversion of private businesses into employee-owned businesses.Specifically, the Department of Commerce must establish an investment facility that provides leverage to ownership investment companies (OICs) licensed by Commerce. Under the bill, OICsmanage capital for the purpose of financing the sale of a private business to an employee stock ownership plan (ESOP) or eligible worker-owned cooperative, have the authority to borrow money and issue securities or other obligations to finance the sale, andhave the full faith and credit of the United States to guarantee the payment of all such amounts.In a sale to an ESOP, an independent trustee must be appointed to obtain a fairness opinion on the investment from an independent financial advisor.New OICs may be mentored by other OICs through the Protégé OIC program established by the bill.The bill also establishes private capital requirements, third-party debt limitations, and enforcement provisions.
Details
- Congress
- 119th
- Chamber
- Senate
- Status
- summarized
- Action
- Introduced in Senate
- Action Date
- 2025-05-07
- Date Added
- 2026-05-06
- Source
- Congress.gov →
Like reading a bill in plain English?
We're building an app that does this for every bill in Congress and lets you tell your reps how you want them to vote. We're a small team getting ready to launch, and we're trying to show investors that real people want this. Be one of them. Help us get it built. Leave your email and we'll tell you the moment the app is ready.