House Committee Report Directs SBA to Fully Implement Main Street Employee Ownership Act
Since the Main Street Employee Ownership Act (MSEOA) was signed into law in August 2018, the NCEO and others in the field have questioned whether its implementation matched Congress's intent to promote employee ownership. See, for example, our blog post Proposed SBA Regulations Appear to Weaken the Impact of the Main Street Employee Ownership Act.
The appropriation bill for the Departments of Labor, Education, and Health and Human Services (H.R. 4502) passed by the House on July 29 includes a committee report in which (page 106) committee members make clear the intent of Congress with regard to the MSEOA, noting that the bill stated that the MSEOA "requires SBA to make structural changes in SBA lending programs to ease the challenges faced by employee-owned businesses in accessing financing" and that it "also requires SBA to use Small Business Development Centers (SBDCs) [to] establish an employee-owned business promotion program to provide assistance on structure, business succession, and planning." In acknowledgment of the challenges to the MSEOA's implementation, the committee reports also states that "SBA is directed to fully implement these requirements."
The committee report also directs the SBA to "work with the Departments of Agriculture, Labor, and Commerce to provide education and outreach to businesses, employees and financial institutions about employee-ownership, including co-operatives and employee stock ownership plans; provide technical assistance to assist employees’ efforts to become businesses; and assist in accessing capital sources."
Committee report language is not law, but is taken seriously by agencies, especially when the report comes from the committees that provide their funding. NCEO staff have also been working with Congressional Small Business Committee staff on ideas for encouraging the SBA to change its standard operating procedures for loans under the Main Street Employee Ownership Act to make them more consistent with what Congress intended.
The bill now heads to the Senate.