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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10242 Introduced in House (IH)]

<DOC>

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. Velazquez 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Main Street Employee Ownership 2.0 
Act of 2024''.

SEC. 2. PROHIBITION OF SELLER GUARANTEES.

    Section 7(a)(15)(B)(iv) of the Small Business Act (15 U.S.C. 
636(a)(15)(B)(iv)) is amended to read as follows:
                    ``(iv) with respect to a loan made to a trust or to 
                a cooperative in accordance with paragraph (35), a 
                seller of the small business concern may remain 
                involved as an officer, director, or key employee of 
                the small business concern after a qualified employee 
                trust or cooperative has acquired 100 percent of 
                ownership of the small business concern.''.

SEC. 3. PROHIBITION OF CERTAIN REQUIREMENTS RELATING TO LENDING TO 
              QUALIFIED EMPLOYEE TRUSTS AND COOPERATIVES.

    Section 7(a)(15) of the Small Business Act (15 U.S.C. 
636(a)(15)(G)) is amended by striking subparagraph (G) and inserting 
the following new subparagraphs::
            ``(G) With respect to a loan made to a qualified employee 
        trust under this paragraph or to a cooperative in accordance 
        with paragraph (35), the Administrator--
                    ``(i) may not, as a condition of such loan--
                            ``(I) require the qualified employee trust 
                        or cooperative to provide any mandatory equity;
                            ``(II) require the qualified employee trust 
                        or cooperative to obtain from the Secretary of 
                        the Treasury a determination letter with 
                        respect to its status as a qualified employee 
                        trust or cooperative (as applicable); or
                            ``(III) require the qualified employee 
                        trust or cooperative to obtain or submit an 
                        additional valuation of the qualified employee 
                        trust or cooperative (as applicable) if the 
                        qualified employee trust or cooperative has 
                        already obtained a valuation from a third party 
                        pursuant to any Federal law; and
                    ``(ii) shall allow the qualified employee trust or 
                cooperative to submit an opinion letter with respect to 
                its status as a qualified employee trust or cooperative 
                (as applicable) at any time.''.

SEC. 4. PROHIBITION OF PERSONAL OR ENTITY GUARANTEE REQUIREMENT.

    Section 7(a)(35)(B) of the Small Business Act (15 U.S.C. 
636(a)(35)(B)) is amended to read as follows:
                    ``(B) Authority.--
                            ``(i) In general.--The Administrator shall 
                        guarantee loans made to a cooperative for the 
                        purpose described in paragraph (15).
                            ``(ii) Prohibition on personal or entity 
                        guarantee.--The Administrator may not require a 
                        cooperative to provide a personal guarantee or 
                        an entity guarantee for a loan under this 
                        subsection.''.

SEC. 5. DELEGATED AUTHORITY FOR 7(A) PREFERRED LENDERS PROGRAM LOANS TO 
              QUALIFIED EMPLOYEE TRUSTS AND COOPERATIVES.

    Section 5(b)(7) of the Small Business Act (15 U.S.C. 634(b)(7)) is 
amended by striking the semicolon after ``liquidation'' and inserting 
the following: ``: Provided further, That the Administrator shall 
permit deferred participation loans that are guaranteed under paragraph 
(15) or (35) of section 7(a) to be processed under the lender's 
delegated authority to make and close loans under this subsection;''.

SEC. 6. COOPERATIVE ELIGIBILITY FOR DISASTER ASSISTANCE PROGRAM.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended--
            (1) in paragraph (1)(A), by inserting ``, including to a 
        cooperative as defined in subsection (a)(35)(A),'' after 
        ``basis)'';
            (2) in paragraph (1)(B), by inserting ``(including such a 
        home or concern of a cooperative as defined in subsection 
        (a)(35)(A))'' after ``business concern''; and
            (3) in paragraph (2), by inserting after ``small business 
        concern'' the following: ``(including to a cooperative as 
        defined in subsection (a)(35)(A))''.
                                 <all>
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