Improving SBA Engagement on Employee Ownership Act

Bill Number

H.R. 5778

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Commerce

Status

Introduced

Latest Action

2025-12-17: Placed on the Union Calendar, Calendar No. 358.

Last Updated

2026-06-11T05:06:22Z

AI-Generated Summary

Purpose

The "Improving SBA Engagement on Employee Ownership Act" (H.R. 5778) aims to enhance the Small Business Administration's (SBA) involvement in promoting employee ownership models, such as cooperatives and employee-owned businesses. It directs the SBA to improve outreach, education, and coordination with other federal entities to support these business structures, which allow workers to own part or all of a company.

Key Provisions

• Participation in Federal Engagements (Section 2): Requires the SBA Administrator (or a designee) to attend meetings, working groups, forums, or other events on cooperatives or employee ownership hosted by other federal agencies if invited or if the SBA has a prior relationship with the host.
• Expanded Outreach for Small Business Investment Companies (Section 3): Amends existing law to extend SBA outreach efforts under the Small Business Investment Company (SBIC) program— which provides funding to small businesses—to include investors and limited partners (individuals or entities that invest money but do not manage the company) in these investment companies.
• Implementation of Promotion Program (Section 4): Within 180 days of enactment, the SBA must execute requirements from a prior law (Section 862(e) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019) through its Small Business Employee Ownership and Cooperatives Promotion Program. This program focuses on educating and assisting small businesses in adopting employee ownership models.

Significant Changes to Existing Law

• Adds a new subparagraph (C) to Section 7(a)(35) of the Small Business Act (15 U.S.C. 636(35)), mandating SBA attendance at relevant federal events on employee ownership, which was not previously required.
• Modifies Section 862(c) of the 2019 National Defense Authorization Act by explicitly including investors and limited partners in SBIC outreach, broadening the scope beyond just the investment companies themselves.
• Ties the execution of prior outreach mandates (under Section 862(e)) directly to the SBA's existing promotion program, ensuring more structured and timely implementation.

Potential Impacts

• On Government Agencies: Increases coordination between the SBA and other federal offices, potentially streamlining federal support for employee ownership without adding new funding or programs.
• On Citizens and Businesses: Small business owners and employees may gain better access to education and resources on ownership models, which could lead to more stable jobs, wealth-building opportunities for workers, and stronger community-based businesses. No direct impact on international relations is evident.
• Broader Effects: Could encourage more small businesses to transition to employee-owned structures, fostering economic resilience, though implementation depends on SBA resources.

Main Stakeholders Affected

• Small Businesses and Employees: Primary beneficiaries, as they receive enhanced education and support for adopting ownership models.
• SBA and Federal Agencies: Required to increase participation and outreach, affecting administrative workloads.
• Investors and Limited Partners in SBICs: Newly included in targeted outreach, potentially leading to more investment opportunities in employee-owned firms.
• Sponsors and Policymakers: Representatives like Mrs. McIver, Mr. Bresnahan, and Ms. Velazquez, who introduced the bill, represent interests in small business innovation and worker empowerment.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill makes minor, procedural amendments to existing statutes without creating new enforcement mechanisms or penalties, ensuring compliance through administrative directives. It aligns with broader federal goals of supporting small businesses under the Small Business Act.
• Constitutional: No apparent challenges; it operates within Congress's commerce clause authority to regulate interstate business and promote economic welfare.
• Political: Reinforces bipartisan support for employee ownership as a tool for economic equity and business sustainability, potentially influencing future small business policies without significant controversy or partisan divide.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. McIver, LaMonica [D-NJ-10]

Cosponsors (5)

Rep. Bresnahan, Robert P. [R-PA-8], Rep. Velázquez, Nydia M. [D-NY-7], Rep. Fitzpatrick, Brian K. [R-PA-1], Rep. Cisneros, Gilbert Ray [D-CA-31], Rep. Goodlander, Maggie [D-NH-2]

Recent Actions

• 2025-12-17: Placed on the Union Calendar, Calendar No. 358.
• 2025-12-17: Reported by the Committee on Small Business. H. Rept. 119-412.
• 2025-12-17: Reported by the Committee on Small Business. H. Rept. 119-412.
• 2025-11-18: Ordered to be Reported by the Yeas and Nays: 27 - 0.
• 2025-11-18: Committee Consideration and Mark-up Session Held
• 2025-10-17: Referred to the House Committee on Small Business.
• 2025-10-17: Introduced in House
• 2025-10-17: Introduced in House

Bill Versions

• Improving SBA Engagement on Employee Ownership Act — issued 2025-10-17 — PDF (3 pages)
• Improving SBA Engagement on Employee Ownership Act — issued 2025-12-17 — PDF (6 pages)