HR3248-119

What This Bill Does

The American Ownership and Resilience Act creates a new Commerce Department finance regime for worker ownership. Commerce would license ownership investment companies that invest only in covered investments, primarily transactions where an employee stock ownership plan or eligible worker-owned cooperative becomes the majority owner of a covered business concern. The facility may provide up to $5 billion per fiscal year in leverage, with not more than 20 percent going to Protégé OICs. ESOP transactions require an independent trustee, an independent financial advisor fairness opinion, restrictions on employee personal financing, participant voting protections, annual demographic and account reporting, and no control by the ownership investment company over the covered business. The bill also sets licensing, capital, borrowing, portfolio-diversification, securities-registration exemptions, leverage certification, reporting, examination, injunction, conflict-of-interest, management-removal, penalty, jurisdiction, trust-certificate, and guarantee rules.

Who Benefits and How

Employee stock ownership plans benefit because the facility supplies leverage for majority-ownership transactions while requiring independent trustees and fairness opinions. Eligible worker-owned cooperatives benefit because ownership investment companies can finance cooperative majority ownership and ongoing capital needs. Covered business workers benefit if more closely held companies convert to employee or cooperative ownership instead of selling to outside buyers. Ownership investment companies benefit from a new Commerce license and access to federally guaranteed leverage for covered investments.

Who Bears the Burden and How

Commerce Department staff must license OICs, operate the $5 billion annual leverage facility, supervise reports, conduct examinations, and enforce suspensions or penalties. OIC managers must meet capital, portfolio, leverage, conflict-of-interest, reporting, fiduciary, and no-control requirements. Independent trustees must evaluate ESOP transactions, obtain fairness opinions, and protect participant voting and sale-proceeds allocation. Licensee officers face removal, cease-and-desist orders, forfeitures, injunctions, and penalties for false statements, conflicts, or fiduciary breaches.

Key Provisions

• Establishes a Commerce Department ownership investment facility with up to $5 billion in annual leverage authority.
• Authorizes licensed ownership investment companies to finance ESOP and worker-cooperative majority ownership transactions.
• Requires independent trustees, fairness opinions, voting protections, annual reporting, and limits on employee personal financing.
• Provides licensing, capital, borrowing, examination, conflict, penalty, trust-certificate, and guarantee rules for OIC supervision.