American Ownership and Resilience Act

Summary#

This bill would create a new program at the Department of Commerce called an ownership succession investment facility. The facility would license private "ownership investment companies" to provide capital to help employees or worker cooperatives buy businesses. The Department may guarantee debentures (debt) issued by those licensed companies and may issue trust certificates backed by guaranteed debentures. The bill sets application, licensing, capitalization, and conduct rules for licensees, including a minimum private capital of $10,000,000 and limits on how much leverage each licensee may have.

The bill requires special protections for transactions that sell a business to an employee stock ownership plan (ESOP). Those protections include appointing an independent trustee, getting a fairness opinion from an independent financial advisor, limits on employee-provided financing, rules for share recirculation and allocations if the business is later sold, and maintaining an independent trustee while the licensee holds an interest.

The bill limits total leverage the Department can provide to $5,000,000,000 per fiscal year and places firm-level caps (for example, up to the lesser of 100% of private capital or $500,000,000 for most licensees, and lower caps for Protege OICs). The Department would collect a nonrefundable fee equal to 3 percent of leverage granted and may set other fees and interest terms. The bill requires regular reporting, audits, examinations, conflict-of-interest rules, enforcement powers (including license suspension and revocation), and an annual report to Congress that must include losses and other program details. The bill also creates a Protege OIC program to help newer firms, sets implementation timelines, and includes a sunset rule that stops new licensing about 20 years after the first license is approved.

What it means for you#

  • If you are an employee in a company converting to employee ownership through an ESOP, the transaction would require an independent trustee and an independent fairness opinion before the sale is completed. The ESOP must include rules about how sale proceeds would be allocated to participants.
  • If you are a member of or considering forming a worker-owned cooperative, licensed ownership investment companies could provide capital under the program.
  • If you run or invest in a firm that would seek a license, the bill sets licensing steps, minimum private capital, reporting, audits, and limits on leverage you could receive.
  • For taxpayers and the public, the Department could guarantee private debentures and pledge the full faith and credit of the United States for those guarantees. The bill also requires annual reports to Congress that must include losses sustained.

Expenses#

No publicly available information about official cost estimates (for example, a CBO score) is included in the bill text or metadata.

The bill includes provisions that would affect Federal finances, however, including:

  • A statutory cap that limits Department guarantees (leverage) to $5,000,000,000 per fiscal year, with not more than 20 percent of that amount available to Protege OICs in a year.
  • The Department may pledge the full faith and credit of the United States for guaranteed debentures and trust certificates it guarantees.
  • Licensees would pay a nonrefundable leverage fee equal to 3 percent of the face amount of leverage (1 percent at commitment and the remainder when leverage is drawn, with a 3 percent charge if no commitment is made).
  • The Secretary may set an additional annual charge on debentures (not to exceed 1.38 percent per year) to reduce to zero the net cost to the Department of guaranteeing debentures, as defined under Federal credit rules.
  • The Department must report annually to Congress on operations and include the amount of losses sustained and expected losses.

Proponents' View#

No publicly available information about proponents' stated views or arguments is included in the bill text or metadata.

Opponents' View#

No publicly available information about opponents' stated views or arguments is included in the bill text or metadata.