House Small Business Committee Approves Bill to Expand SBA EO Outreach Program

The House Committee on Small Business unanimously passed H.R. 5778, the “Improving SBA Engagement on Employee Ownership Act,” which would expand the Small Business Administration's (SBA) outreach program on employee ownership under the Main Street Employee Ownership Act (MSEOA). That bill directed the SBA to conduct an outreach program through its Small Business Development Centers to “establish an employee-owned business promotion program to provide assistance on structure, business succession, and planning." It also directed the SBA to work with other agencies to implement the program. In 2021, the committee found that this was not happening and directed the SBA to “fully implement these requirements."

• It directs the SBA to attend any working groups, meetings, fora, or any other engagements on cooperatives or employee ownership hosted by any other federal agency or office to which the SBA is invited or had a previous relationship.
• It amends the MSEOA to add investors and limited partners of Small Business Investment Companies (SBICs) to its small business investment company outreach efforts.
• Section 862(e) of the MSEOA required the SBA to establish a Small Business Employee Ownership and Cooperatives Promotion Program "to offer technical assistance and training on the transition to employee ownership through cooperatives and qualified employee trusts." The SBA has not yet done so. H.R. 5778 states that no later than 180 days after its enactment, the SBA administrator "shall carry out the requirements" of Section 862(e).