I 

118TH CONGRESS 

2D SESSION H. R. 10242 

To amend the Small Business Act to modify requirements relating to certain 

employee-owned businesses, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 21, 2024 

Ms. VELA ́ZQUEZ introduced the following bill; which was referred to the 

Committee on Small Business 

A BILL 

To amend the Small Business Act to modify requirements 

relating to certain employee-owned businesses, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Main Street Employee 

5 Ownership 2.0 Act of 2024’’. 

6 SEC. 2. PROHIBITION OF SELLER GUARANTEES. 

7 Section 7(a)(15)(B)(iv) of the Small Business Act 

8 (15 U.S.C. 636(a)(15)(B)(iv)) is amended to read as fol9 lows: 


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1 ‘‘(iv) with respect to a loan made to a trust 

2 or to a cooperative in accordance with para3 graph (35), a seller of the small business con4 cern may remain involved as an officer, direc5 tor, or key employee of the small business con6 cern after a qualified employee trust or cooper7 ative has acquired 100 percent of ownership of 

8 the small business concern.’’. 

9 SEC. 3. PROHIBITION OF CERTAIN REQUIREMENTS RELAT10 ING TO LENDING TO QUALIFIED EMPLOYEE 

11 TRUSTS AND COOPERATIVES. 

12 Section 7(a)(15) of the Small Business Act (15 

13 U.S.C. 636(a)(15)(G)) is amended by striking subpara14 graph (G) and inserting the following new subparagraphs:: 

15 ‘‘(G) With respect to a loan made to a qualified 

16 employee trust under this paragraph or to a cooper17 ative in accordance with paragraph (35), the Admin18 istrator— 

19 ‘‘(i) may not, as a condition of such loan— 

20 ‘‘(I) require the qualified employee 

21 trust or cooperative to provide any manda22 tory equity; 

23 ‘‘(II) require the qualified employee 

24 trust or cooperative to obtain from the 

25 Secretary of the Treasury a determination 


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1 letter with respect to its status as a quali2 fied employee trust or cooperative (as ap3 plicable); or 

4 ‘‘(III) require the qualified employee 

5 trust or cooperative to obtain or submit an 

6 additional valuation of the qualified em7 ployee trust or cooperative (as applicable) 

8 if the qualified employee trust or coopera9 tive has already obtained a valuation from 

10 a third party pursuant to any Federal law; 

11 and 

12 ‘‘(ii) shall allow the qualified employee 

13 trust or cooperative to submit an opinion letter 

14 with respect to its status as a qualified em15 ployee trust or cooperative (as applicable) at 

16 any time.’’. 

17 SEC. 4. PROHIBITION OF PERSONAL OR ENTITY GUAR18 ANTEE REQUIREMENT. 

19 Section 7(a)(35)(B) of the Small Business Act (15 

20 U.S.C. 636(a)(35)(B)) is amended to read as follows: 

21 ‘‘(B) AUTHORITY.— 

22 ‘‘(i) IN GENERAL.—The Administrator 

23 shall guarantee loans made to a coopera24 tive for the purpose described in paragraph 

25 (15). 


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1 ‘‘(ii) PROHIBITION ON PERSONAL OR

2 ENTITY GUARANTEE.—The Administrator 

3 may not require a cooperative to provide a 

4 personal guarantee or an entity guarantee 

5 for a loan under this subsection.’’. 

6 SEC. 5. DELEGATED AUTHORITY FOR 7(a) PREFERRED 

7 LENDERS PROGRAM LOANS TO QUALIFIED 

8 EMPLOYEE TRUSTS AND COOPERATIVES. 

9 Section 5(b)(7) of the Small Business Act (15 U.S.C. 

10 634(b)(7)) is amended by striking the semicolon after ‘‘liq11 uidation’’ and inserting the following: ‘‘: Provided further, 

12 That the Administrator shall permit deferred participation 

13 loans that are guaranteed under paragraph (15) or (35) 

14 of section 7(a) to be processed under the lender’s dele15 gated authority to make and close loans under this sub16 section;’’. 

17 SEC. 6. COOPERATIVE ELIGIBILITY FOR DISASTER ASSIST18 ANCE PROGRAM. 

19 Section 7(b) of the Small Business Act (15 U.S.C. 

20 636(b)) is amended— 

21 (1) in paragraph (1)(A), by inserting ‘‘, includ22 ing to a cooperative as defined in subsection 

23 (a)(35)(A),’’ after ‘‘basis)’’; 

24 (2) in paragraph (1)(B), by inserting ‘‘(includ25 ing such a home or concern of a cooperative as deVerDate Sep 11 2014 01:10 Dec 28, 2024 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H10242.IH H10242

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1 fined in subsection (a)(35)(A))’’ after ‘‘business con2 cern’’; and 

3 (3) in paragraph (2), by inserting after ‘‘small 

4 business concern’’ the following: ‘‘(including to a co5 operative as defined in subsection (a)(35)(A))’’. 

Æ 


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