I 
119TH CONGRESS 
1ST SESSION H. R. 3248 
To establish a domestic ownership succession investment facility, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 7, 2025 
Mr. MOORE of Utah (for himself, Mrs. TRAHAN, Mr. JOHNSON of South Da-
kota, and Mr. FOSTER) introduced the following bill; which was referred 
to the Committee on Financial Services, and in addition to the Committee 
on Ways and Means, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To establish a domestic ownership succession investment 
facility, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘American Ownership 
and Resilience Act’’. 
SEC. 2. DEFINITIONS. 
In this Act: 
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(1) 1940 ACT COMPANY.—The term ‘‘1940 Act 
Company’’ means an investment company subject to 
registration under the Investment Company Act of 
1940 (15 U.S.C. 80a–1 et seq.). 
(2) 1980 ACT COMPANY.—The term ‘‘1980 Act 
Company’’ means an investment company subject to 
registration under the Small Business Investment 
Incentive Act of 1980 (15 U.S.C. 80a–51 et seq.). 
(3) ARTICLES.—The term ‘‘articles’’ means— 
(A) articles of incorporation for an incor-
porated body; or 
(B) the functional equivalent or other simi-
lar documents specified by the Secretary for 
other business entities. 
(4) CAPITAL INTEREST.—The term ‘‘capital in-
terest’’ means an interest in a subsidiary LLC deter-
mined at the time of receipt that gives the holder of 
the interest a share of the proceeds in a complete 
liquidation of the subsidiary LLC if the assets of the 
subsidiary LLC are sold at fair market value. 
(5) COVERED BUSINESS CONCERN.—The term 
‘‘covered business concern’’ means an enterprise, re-
gardless of any size standard, that is independently 
owned and operated, except that an investment by a 
venture capital firm, investment company, employee 
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welfare benefit plan or pension plan, or trust, foun-
dation, or endowment that is exempt from Federal 
income taxation shall not cause a business concern 
to be deemed not independently owned and operated 
regardless of the allocation of control during the in-
vestment period under any investment agreement be-
tween the business concern and the entity making 
the investment. 
(6) COVERED
INVESTMENT.—The term ‘‘cov-
ered investment’’ means, with respect to an invest-
ment in a covered business concern— 
(A) the provision of capital to finance the 
sale of an ownership interest of a covered busi-
ness concern, including a covered business con-
cern created as a result of a corporate divesti-
ture, to an employee stock ownership plan or el-
igible worker-owned cooperative if such sale re-
sults in— 
(i) the employee stock ownership plan 
or eligible worker-owned cooperative, re-
spectively, holding a majority interest of 
the outstanding stock of the covered busi-
ness concern; and 
(ii) with respect to such a sale to an 
employee stock ownership plan, the ap-
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pointment of an independent trustee for 
the transaction; or 
(B) the provision of capital to finance a 
covered business concern if— 
(i) an employee stock ownership plan 
or eligible worker-owned cooperative holds 
a majority interest of the outstanding 
stock of the covered business concern, 
prior to and immediately following the pro-
vision of capital; and 
(ii) the provision of capital does not 
reduce the percentage of stock of the cov-
ered business concern held by the employee 
stock ownership plan or eligible worker- 
owned cooperative (as applicable), exclud-
ing any synthetic equity. 
(7) DEPARTMENT.—The term ‘‘Department’’ 
means the Department of Commerce. 
(8) 
ELIGIBLE
WORKER-OWNED
COOPERA-
TIVE.—The term ‘‘eligible worker-owned coopera-
tive’’ has the meaning given that term in section 
1042(c) of the Internal Revenue Code of 1986. 
(9) EMPLOYEE STOCK OWNERSHIP PLAN.—The 
term ‘‘employee stock ownership plan’’ has the 
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meaning given that term in section 4975(e) of the 
Internal Revenue Code of 1986. 
(10) EMPLOYEE
WELFARE
BENEFIT
PLAN; 
PENSION PLAN.—The terms ‘‘employee welfare ben-
efit plan’’ and ‘‘pension plan’’— 
(A) have the meanings given those terms 
in section 3 of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1002); 
and 
(B) include— 
(i) public and private pension or re-
tirement plans subject to such Act; and 
(ii) similar plans not covered by such 
Act that have been established and that 
are maintained by the Federal Government 
or any State or political subdivision, or any 
agency or instrumentality thereof, for the 
benefit of employees. 
(11) INDEPENDENT FINANCIAL ADVISOR.—The 
term ‘‘independent financial advisor’’ means a finan-
cial or valuation advisor that— 
(A) is in the profession of serving as a fi-
nancial or valuation advisor for transactions in-
volving employee stock ownership plans; 
(B) has never— 
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(i) performed services, including a 
preliminary valuation, for or on behalf of— 
(I) any party selling an owner-
ship interest in the covered business 
concern to the employee stock owner-
ship plan involved in the transaction 
that the advisor is evaluating; or 
(II) the covered business concern, 
unless the services were provided sole-
ly to an existing employee stock own-
ership plan sponsored by the covered 
business concern; or 
(ii) been a director, officer, or em-
ployee of the covered business concern; 
(C) has not performed services related to 
the transaction the advisor is evaluating, includ-
ing a preliminary valuation, for or on behalf 
of— 
(i) the ownership investment company 
that is preparing to or has already allo-
cated capital to the covered business con-
cern; or 
(ii) any other entity that is struc-
turing or financing the transaction for any 
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party other than the employee stock owner-
ship plan; and 
(D) does not have a familial or corporate 
relationship (such as a parent-subsidiary rela-
tionship) to any of person or entity described in 
subparagraph (B) or (C). 
(12) 
INDEPENDENT
TRUSTEE.—The 
term 
‘‘independent trustee’’ means a trustee that— 
(A) is in the profession of serving as a fi-
duciary for employee stock ownership plans; 
(B) has never— 
(i) performed services for or on behalf 
of any party selling an ownership interest 
in the covered business concern to the em-
ployee stock ownership plan involved in the 
transaction that the trustee is considering; 
or 
(ii) been a director, officer, or em-
ployee of the covered business concern; 
(C) has not performed services for or on 
behalf of the covered business concern at any 
time during the 5-year period ending on the 
date of execution of the transaction the trustee 
is considering, unless such services solely con-
sisted of acting as a fiduciary of an employee 
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benefit plan (including an employee stock own-
ership plan) under the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1001 
et seq.); 
(D) has not performed services related to 
the transaction the trustee is considering, for or 
on behalf of— 
(i) the ownership investment company 
that is preparing to or has already allo-
cated capital to the covered business con-
cern; or 
(ii) any other entity that is struc-
turing or financing the transaction for any 
party other than the employee stock owner-
ship plan; and 
(E) does not have a familial or corporate 
relationship (such as a parent-subsidiary rela-
tionship) to any person or entity described in 
subparagraph (B), (C), or (D). 
(13) LEVERAGE.—The term ‘‘leverage’’ means 
debentures guaranteed by the Department. 
(14) LICENSE.—The term ‘‘license’’ means a li-
cense issued by the Department as provided in sec-
tion 4(c). 
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(15) LICENSEE.—The term ‘‘licensee’’ means a 
company approved by the Secretary to operate under 
the provisions of this Act and issued a license pro-
vided in section 4(c). 
(16) LIMITED LIABILITY COMPANY.—The term 
‘‘limited liability company’’ means a business entity 
that is organized and operating in accordance with 
a State limited liability company statute approved by 
the Department. 
(17) MEMBER.—The term ‘‘member’’ means, 
with respect to a licensee that is a limited liability 
company, a holder of an ownership interest or a per-
son otherwise admitted to membership in the limited 
liability company. 
(18) NON-LEVERAGED
LICENSEE.—The term 
‘‘non-leveraged licensee’’ means a licensee that— 
(A) has no outstanding leverage or lever-
age commitment; and 
(B) certifies to the Department in writing 
that the licensee will not seek leverage in the 
future. 
(19) OUTSTANDING
STOCK.—The term ‘‘out-
standing stock’’ means shares of stock, including 
synthetic equity. 
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(20) OWNERSHIP INVESTMENT COMPANY.—The 
term ‘‘ownership investment company’’ means— 
(A) a company approved by the Secretary 
to operate under the provisions of this Act and 
issued a license as provided in section 4(c); and 
(B) for which— 
(i) 100 percent of the total capital 
managed by the investment firm shall be 
invested in covered investments; 
(ii) not less than 50 percent of the 
total capital managed by the investment 
firm shall be invested in covered invest-
ments described in paragraph (6)(A); and 
(iii) covered investment returns are 
obtained from debt, synthetic equity, pre-
ferred stock, equity, or a combination 
thereof, including returns obtained from 
cash interest, payment-in-kind interest, 
and stock warrants. 
(21) PREFERRED STOCK.—The term ‘‘preferred 
stock’’ has the meaning given that term in section 
351(g)(3) of the Internal Revenue Code of 1986. 
(22) PRIVATE
CAPITAL.—The term ‘‘private 
capital’’— 
(A) means the sum of— 
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(i) the paid-in capital and paid-in sur-
plus of a corporate licensee, the contrib-
uted capital of the partners of a partner-
ship licensee, or the equity investment of 
the members of a limited liability company 
licensee; and 
(ii) unfunded binding commitments, 
from investors that meet criteria estab-
lished by the Secretary, to contribute cap-
ital to the licensee, provided that such un-
funded commitments may be counted as 
private capital for purposes of approval by 
the Secretary of any request for leverage, 
but leverage shall not be funded based on 
such commitments; and 
(B) does not include any— 
(i) funds borrowed by a licensee from 
any source; 
(ii) 
funds 
obtained 
through 
the 
issuance of leverage; or 
(iii) funds obtained directly or indi-
rectly from any Federal, State, or local 
government, or any government agency or 
instrumentality, except for— 
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(I) funds obtained from the busi-
ness revenues (excluding any govern-
mental appropriation) of any federally 
chartered 
or 
government-sponsored 
corporation established before October 
1, 1987; 
(II) funds invested by an em-
ployee welfare benefit plan or pension 
plan; and 
(III) any qualified nonprivate 
funds (if the investors of the qualified 
nonprivate funds do not control, di-
rectly or indirectly, the management, 
board of directors, general partners, 
or members of the licensee). 
(23) PROFITS
INTEREST.—The term ‘‘profits 
interests’’ means an interest in a subsidiary LLC 
other than a capital interest. 
(24) PROTE´GE´ OIC.—The term ‘‘Prote´ge´ OIC’’ 
means an entity licensed under section 4(c) as an 
ownership investment company and selected in ac-
cordance with section 6— 
(A) for which the managers of the firm 
have a documented record of successful busi-
ness experience; and 
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(B) that has an investment track record 
that does not meet the requirements under sec-
tion 4(c)(3)(B)(i). 
(25) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Commerce. 
(26) STATE.—The term ‘‘State’’ includes the 
several States, the territories and possessions of the 
United States, the Commonwealth of Puerto Rico, 
and the District of Columbia. 
(27) SUBSIDIARY LLC.—The term ‘‘subsidiary 
LLC’’ means a limited liability company owned by a 
corporation through equity ownership of the sub-
sidiary with a common parent corporation, as de-
scribed in section 1563 of the Internal Revenue 
Code of 1986, in which— 
(A) the equity of the subsidiary LLC 
owned by the corporation possesses not less 
than 80 percent of the total combined voting 
power of all classes of equity of the subsidiary 
LLC entitled to vote; and 
(B) the equity value of the subsidiary LLC 
owned by the corporation that represents— 
(i) not less than 51 percent of the 
total value of all classes of equity of the 
subsidiary LLC; and 
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(ii) not less than 51 percent equity 
ownership of the subsidiary LLC. 
(28) SYNTHETIC EQUITY.—The term ‘‘synthetic 
equity’’ includes— 
(A) synthetic equity, as defined in section 
409(p)(6) of the Internal Revenue Code of 
1986; 
(B) a profits interest of a subsidiary LLC 
granted to, purchased by, or otherwise obtained 
directly or indirectly by employees and directors 
of the subsidiary LLC; and 
(C) nonqualified deferred compensation 
plans and arrangements subject to section 409A 
of the Internal Revenue Code of 1986. 
(29) THIRD-PARTY
DEBT.—The term ‘‘third- 
party debt’’ means any indebtedness for borrowed 
money, other than indebtedness owed to the Depart-
ment. 
SEC. 3. OWNERSHIP INVESTMENT FACILITY. 
(a) DEFINITION OF FACILITY.—In this section, the 
term ‘‘facility’’ means the facility established under sub-
section (b). 
(b) ESTABLISHMENT.—The Secretary shall establish 
and carry out a facility to provide leverage to licensed own-
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ership investment companies for the purpose of encour-
aging covered investments. 
(c) COMBINED LEVERAGE.—The Secretary may not 
provide leverage to ownership investment companies under 
the facility in a total amount that is greater than 
$5,000,000,000 for a fiscal year. Not more than 20 per-
cent of such total amount may be provided to Prote´ge´ OIC 
companies for a fiscal year. 
(d) TRANSACTION REQUIREMENTS.— 
(1) IN GENERAL.—With respect to a covered in-
vestment described in section 2(6)(A) involving a 
sale to an employee stock ownership plan, an inde-
pendent trustee for the employee stock ownership 
plan shall be appointed by the covered business con-
cern before the execution of the covered investment 
for a period of time that is sufficient for the inde-
pendent trustee to fully evaluate the proposed trans-
action. 
(2) FAIRNESS OPINION.—With respect to the 
scope of appointment under paragraph (1), an inde-
pendent trustee appointed under paragraph (1) shall 
obtain a fairness opinion on the proposed covered in-
vestment from an independent financial advisor, 
which shall evaluate whether the price, terms, and 
cost of financing of the proposed covered investment 
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are financially fair to the employee stock ownership 
plan. 
(e) PROHIBITIONS.— 
(1) FINANCING.— 
(A) IN GENERAL.—An employee of a cov-
ered business concern may not provide personal 
financing of any kind for a covered investment, 
including through a wage concession or rollover 
of a retirement plan. 
(B) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply to— 
(i) financing provided by an employee 
for the sale of an ownership interest held 
by the employee in a covered business con-
cern; or 
(ii) employee capital contributions or 
membership fees paid by members of an el-
igible worker-owned cooperative, if such 
amounts are reasonable and customary 
and not used for the purchase of the cov-
ered business concern. 
(2) CONTROL.—An ownership investment com-
pany shall not exercise control over a covered busi-
ness concern in which the ownership investment 
company has made a covered investment. 
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(f) EMPLOYEE ALLOCATIONS.—With respect to a 
covered investment described in section 2(6)(A) made by 
an ownership investment company that involves an em-
ployee stock ownership plan, the employee stock ownership 
plan shall include a requirement that in the event of a 
sale to a third party of the covered business concern in 
which the covered investment is made, the proceeds that 
the employee stock ownership plan receives from the sale 
shall be distributed as though all shares of stock held by 
the employee stock ownership plan prior to the sale were 
fully allocated based on each participant’s compensation, 
as defined under section 415(c)(3) of the Internal Revenue 
Code of 1986. 
(g) RECIRCULATION OF SHARES.— 
(1) SHARE COUNT.—With respect to a covered 
investment described in section 2(6)(A) made by an 
ownership investment company that involves an em-
ployee stock ownership plan, the number of shares 
held by the employee stock ownership plan on the 
final date of each plan year shall not be less than 
the number of shares held by the employee stock 
ownership plan on the execution date of the covered 
investment. 
(2) 
LIMITATION.—The 
requirements 
under 
paragraph (1) shall apply only with respect to the 
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period during which the ownership investment com-
pany has an interest in the covered business con-
cern. 
(3) EXCEPTION.—The requirement under para-
graph (1) may be waived by the independent trustee 
for the applicable employee stock ownership plan. 
(h) INDEPENDENT TRUSTEES.—With respect to a 
covered investment described in section 2(6)(A) made by 
an ownership investment company that involves an em-
ployee stock ownership plan, the employee stock ownership 
plan shall have an independent trustee during the period 
that the ownership investment company has an interest 
in the covered business concern. 
(i) SUBSIDIARY LLCS.—With respect to any covered 
investment made by an ownership investment company 
that involves an employee stock ownership plan, a sub-
sidiary LLC may be permitted to be established, provided 
that the following requirements are met: 
(1) ESOP MAJORITY INTEREST.—The employee 
stock ownership plan exercises a majority interest in 
the subsidiary LLC as a result of the sale or provi-
sion of capital. 
(2) S CORPORATION
BOARD
GOVERNANCE.— 
The board governance of the subsidiary LLC resides 
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exclusively at the level of the S corporation by which 
the subsidiary LLC is owned. 
(3) PROFITS INTEREST.—The profits interest 
or any type of similar arrangements, including phan-
tom stock and any deferred bonus plan related to eq-
uity in the subsidiary LLC, complies with section 
409(p) of the Internal Revenue Code of 1986. 
(4) EVENT PROTECTION.—The requirements of 
subsection (f) apply at the level of the subsidiary 
LLC. 
(j) PROCEDURES RELATED TO A SALE OF A COV-
ERED BUSINESS CONCERN.— 
(1) IN GENERAL.—Subject to paragraph (2), an 
ownership investment company shall require as a 
condition of making a covered investment described 
in section 2(6)(A) involving an employee stock own-
ership plan that— 
(A) before any stock sale or the execution 
of any corporate matter listed in section 
409(e)(3) of the Internal Revenue Code of 
1986, the employee stock ownership plan 
shall— 
(i) appoint an independent trustee for 
the transaction; and 
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(ii) require that the independent 
trustee obtain a fairness opinion from an 
independent financial advisor, which shall 
evaluate whether the price, terms, and cost 
of financing of the proposed covered invest-
ment are financially fair to the employee 
stock ownership plan; and 
(B) the employee stock ownership plan re-
quires that— 
(i) in addition to the corporate mat-
ters listed in section 409(e)(3) of the In-
ternal Revenue Code of 1986, each partici-
pant or beneficiary in the employee stock 
ownership plan is entitled to direct the em-
ployee stock ownership plan as to the man-
ner in which voting rights under securities 
of the employer which are allocated to the 
account of such participant or beneficiary 
are to be exercised with respect to the ap-
proval or disapproval of any stock sale; 
(ii) 
the 
requirements 
of 
section 
409(e)(3) of the Internal Revenue Code of 
1986 and clause (i) of this subparagraph 
shall be met using the procedures de-
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scribed in section 409(e)(5) of the Internal 
Revenue Code of 1986; 
(iii) unless the parties agree other-
wise, with respect to unallocated shares, 
the independent trustee shall be directed to 
vote or tender such unallocated shares in 
the same proportion as allocated shares for 
which the independent trustee has received 
voting or tender instructions from partici-
pants in the employee stock ownership 
plan; and 
(iv) with respect to allocated shares 
that the independent trustee does not re-
ceive voting or tender instructions from 
participants in the employee stock owner-
ship plan, the independent trustee shall 
have voting discretion over such shares. 
(2) VOTING
DISCRETION.—Nothing in para-
graph (1)(B) shall limit the ability of an inde-
pendent trustee to exercise voting discretion in ac-
cordance with the fiduciary obligations of the inde-
pendent trustee under the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1001 et seq.). 
(3) 
LIMITATION.—The 
requirements 
under 
paragraph (1) shall apply only with respect to the 
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period during which the ownership investment com-
pany has an interest in the covered business con-
cern. 
(k) REPORTS.—Each ownership investment company 
(including Prote´ge´ OICs) shall submit to the Secretary an 
annual report, which shall include, for the year covered 
by the report, the following information, disaggregated by 
type of covered investment as described in subparagraph 
(A) or (B) of section 2(6), as applicable: 
(1) Whether the covered investment was made 
with respect to an employee stock ownership plan or 
eligible worker-owned cooperative. 
(2) For an employee stock ownership plan— 
(A) the effective date of the employee stock 
ownership plan; 
(B) the number of active employee stock 
ownership plan participants; 
(C) the number of employees of the cov-
ered business concern for which the employee 
stock ownership plan is established; 
(D) the total value of employer securities, 
as determined by an independent appraiser 
hired by the independent trustee of the em-
ployee stock ownership plan; 
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(E) the total employee stock ownership 
plan assets; 
(F) the total contributions during the em-
ployee stock ownership plan year; 
(G) the total distributions during the em-
ployee stock ownership plan year; 
(H) the median account asset balance; and 
(I) demographic information of employee 
stock 
ownership 
plan 
participants, 
disaggregated by race, gender, and State, to the 
extent available. 
(3) For an eligible worker-owned cooperative— 
(A) the number of member-owners; 
(B) the number of employees of the cov-
ered business concern for which the eligible 
worker-owned cooperative is established; 
(C) the total value of employer securities; 
(D) the aggregate assets of all membership 
accounts of the eligible worker-owned coopera-
tive; 
(E) the median membership account bal-
ance; and 
(F) demographic information of member-
ship base, disaggregated by race, gender, and 
State, to the extent available. 
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(l) IMPLEMENTATION MILESTONES.— 
(1) IN
GENERAL.—Not later than 540 days 
after the date of enactment of this Act, the Sec-
retary shall begin accepting applications to be li-
censed to participate in the facility as an ownership 
investment company. 
(2) LICENSE
TIMELINE.—Not later than 2 
years after the date of enactment of this Act, the 
Secretary shall approve the first tranche of licenses 
to participate in the facility as an ownership invest-
ment company with respect to applicants that satisfy 
the applicable eligibility criteria. 
(m) SUNSET.— 
(1) DEFINITION.—In this subsection, the term 
‘‘sunset date’’ means the first day of the 20th cal-
endar year that begins after the date on which the 
Secretary approves the first license to participate in 
the facility as an ownership investment company (in-
cluding as a Prote´ge´ OIC). 
(2) TERMINATION
OF
AUTHORITY.—On and 
after the sunset date, the Secretary may not license 
an entity to participate in the facility as an owner-
ship investment company (including as a Prote´ge´ 
OIC). 
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(3) CONTINUED
PARTICIPATION
BY
EXISTING 
ENTITIES.—Nothing in paragraph (2) shall be con-
strued to prohibit an ownership investment company 
(including a Prote´ge´ OIC) from continuing to draw 
leverage on and after the sunset date that was com-
mitted to the entity through the facility before the 
sunset date. 
(4) APPLICATION.—The Secretary shall not 
consider paragraph (2) as a factor in the decision to 
license an entity to participate in the facility as an 
ownership investment company (including as a 
Prote´ge´ OIC) before the sunset date. 
SEC. 4. ORGANIZATION OF OWNERSHIP INVESTMENT COM-
PANIES. 
(a) IN GENERAL.— 
(1) REQUIREMENT.—An ownership investment 
company shall be an incorporated body, a limited li-
ability company, or a limited partnership organized 
and chartered or otherwise existing under State law 
solely for the purpose of performing the functions 
and conducting the activities contemplated under 
this Act, which— 
(A) if incorporated, has succession for a 
period of not fewer than 30 years unless sooner 
dissolved by its shareholders; or 
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(B) if a limited partnership, has succession 
for a period of not fewer than 10 years, and 
possesses the powers reasonably necessary to 
perform such functions and conduct such activi-
ties. 
(2) AREA OF OPERATION.—The area in which 
an ownership investment company described in para-
graph (1) is to conduct its operations, and the estab-
lishment of branch offices or agencies (if authorized 
by the articles), shall be subject to the approval of 
the Department. 
(b) ARTICLES.— 
(1) REQUIREMENTS.—The articles of any own-
ership investment company shall specify— 
(A) the objects for which the company is 
formed in general terms; 
(B) the name assumed by the ownership 
investment company; 
(C) the area or areas in which the oper-
ations of the ownership investment company are 
to be carried on; 
(D) the place where the principal office of 
the ownership investment company is to be lo-
cated; and 
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(E) the amount and classes of the shares 
of capital stock of the ownership investment 
company. 
(2) INCLUSIONS.—Articles of an ownership in-
vestment company may contain any other provisions 
not inconsistent with this Act that the ownership in-
vestment company may see fit to adopt for the regu-
lation of the business of the ownership investment 
company and the conduct of the affairs of the own-
ership investment company. 
(3) APPROVAL.—Articles of an ownership in-
vestment company and any amendments thereto 
adopted from time to time shall be subject to the ap-
proval of the Secretary. 
(c) ISSUANCE OF LICENSE.— 
(1) SUBMISSION OF APPLICATION.— 
(A) IN GENERAL.—Each applicant to oper-
ate as an ownership investment company (in-
cluding a Prote´ge´ OIC) under this Act shall 
submit to the Secretary an application, in a 
form and including such documentation as may 
be prescribed by the Secretary. 
(B) ROLLING BASIS.—The Secretary shall 
accept applications under subparagraph (A) on 
a rolling basis. 
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(C) ELECTRONIC SUBMISSIONS.—The Sec-
retary shall allow an applicant under this sub-
section to electronically submit any document 
required by this subsection and to provide an 
electronic signature for any signature that is re-
quired on such a document. 
(2) PROCEDURES.— 
(A) STATUS.—Not later than 90 days after 
the initial receipt by the Secretary of an appli-
cation under this subsection, the Secretary shall 
provide the applicant with a written report de-
tailing the status of the application and any re-
quirements remaining for completion of the ap-
plication. 
(B) APPROVAL OR DISAPPROVAL.—Within 
90 days after receiving a completed application 
submitted in accordance with this subsection 
and in accordance with such requirements as 
the Secretary may prescribe by regulation, the 
Secretary shall— 
(i) approve the application and issue a 
license for such operation to the applicant 
if the requirements of this section are sat-
isfied; or 
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(ii) disapprove the application and no-
tify the applicant in writing of the dis-
approval. 
(3) MATTERS CONSIDERED.— 
(A) IN GENERAL.—In reviewing and proc-
essing any application under this subsection, 
the Secretary— 
(i) shall determine whether— 
(I) the applicant meets the re-
quirements of subsections (a) and (b) 
of section 6; and 
(II) the management of the ap-
plicant is qualified and has the knowl-
edge, experience, and capability nec-
essary to comply with this Act; 
(ii) shall take into consideration— 
(I) the need for and availability 
of financing for a covered business 
concern in the geographic area in 
which the applicant is to commence 
business; 
(II) the general business reputa-
tion of the owners and management of 
the applicant; and 
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(III) the probability of successful 
operations of the applicant, including 
adequate profitability and financial 
soundness; and 
(iii) shall not take into consideration 
any projected shortage or unavailability of 
leverage. 
(B) ADDITIONAL
MATTERS
CONSIDERED 
FOR OWNERSHIP INVESTMENT COMPANIES.— 
(i) INVESTMENT
TRACK
RECORD.— 
Except as provided in clause (ii), an appli-
cant for a license to operate as an owner-
ship investment company shall submit to 
the Secretary proof that the managers of 
the applicant have a track record of man-
aging investments, including structured in-
vestments, realized or unrealized, in an 
employee stock ownership plan or eligible 
worker-owned cooperative. 
(ii) 
ADVISORY
REQUIREMENT.—An 
applicant that does not have an investment 
track record described in clause (i) or that 
is a Prote´ge´ OIC shall submit to the Sec-
retary evidence that the applicant has re-
tained or will retain a legal, accounting, or 
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financial advisory firm with not fewer than 
5 years of experience in structuring em-
ployee stock ownership plans or eligible 
worker-owned cooperatives. 
(iii) LIMITATION.—The Secretary may 
not reject an applicant for a license to op-
erate as an ownership investment company 
solely because the applicant lacks a suffi-
cient track record in realized investments 
if the applicant demonstrates an otherwise 
successful investment track record that in-
cludes unrealized covered investments. 
(C) PROVISIONAL APPROVAL.— 
(i) IN GENERAL.—The Secretary may 
provide provisional approval for a license 
to participate in the facility as an owner-
ship investment company (including a 
Prote´ge´ OIC) for a period not to exceed 1 
year to an investment firm submitting an 
application under this subsection or— 
(I) that does not meet the min-
imum private capital requirements 
under section 6(a) necessary for li-
censing under this subsection at the 
time of application; 
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(II) that states an intent to more 
effectively raise capital commitments 
in private markets with a license; and 
(III) that states an intent to 
more precisely request the desired 
amount of leverage contingent on se-
curing capital from private market in-
vestors. 
(ii) 
CAPITAL
REQUIREMENTS.—An 
applicant granted provisional approval 
under clause (i) shall not be eligible to re-
ceive leverage until the applicant satisfies 
the requirements of section 6(a). 
(D) FEES.— 
(i) IN GENERAL.—The Secretary may 
prescribe fees to be paid by each applicant 
for a license to operate as an ownership in-
vestment company (including a Prote´ge´ 
OIC) under this Act. 
(ii) USE
OF
AMOUNTS.—Fees col-
lected under this subparagraph— 
(I) shall be deposited in the ac-
count for salaries and expenses of the 
Department; and 
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(II) are authorized to be appro-
priated solely to cover the costs of li-
censing examinations. 
(d) 1940 AND 1980 ACT COMPANIES.— 
(1) IN GENERAL.— 
(A) APPLICATION.—A 1940 Act Company 
or 1980 Act Company is eligible to apply for a 
license under this Act. 
(B) ELIGIBILITY
OF
LICENSEES.—A li-
censee that is not registered as a 1940 Act 
Company or 1980 Act Company is eligible to 
apply for approval from the Secretary to con-
vert to a 1940 Act Company or 1980 Act Com-
pany. 
(2) REGULATION.—A 1940 Act Company or 
1980 Act Company that is a licensee may elect to 
be taxed as a regulated investment company for pur-
poses of section 851 of the Internal Revenue Code 
of 1986 (26 U.S.C. 851), provided that the licensee 
making such election may make distributions only as 
permitted under the applicable guidance or regula-
tions that the Secretary may prescribe. 
SEC. 5. PROTE´ GE´ OIC PROGRAM. 
(a) ESTABLISHMENT.—The Secretary shall establish 
a program to be known as the ‘‘Prote´ge´ OIC Program’’ 
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under which a manager of an ownership investment com-
pany that is not a Prote´ge´ OIC may enter into a written 
agreement approved by the Secretary to provide guidance 
and assistance to a Prote´ge´ OIC with respect to— 
(1) applying for a license for the Prote´ge´ OIC 
to operate as an ownership investment company; and 
(2) management of the ownership investment 
company after licensure. 
(b) APPLICATION.—After entering into a written 
agreement described in subsection (a), the Prote´ge´ OIC 
shall apply for a license under section 4(c). 
(c) SELECTION.—The Secretary may grant a license 
to a Prote´ge´ OIC to operate as an ownership investment 
company under section 4(c) based on the investment track 
record of 1 or more of the managers that have entered 
into a written agreement described in subsection (a) of 
this section with the applicant Prote´ge´ OIC. 
(d) REQUIREMENTS FOR MANAGERS.—If a manager 
enters into a written agreement described in subsection 
(a)— 
(1) the manager may hold a minority financial 
interest in the ownership investment company that is 
to be managed by the Prote´ge´ OIC; 
(2) the otherwise applicable maximum amount 
of outstanding leverage that may be made available 
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(7) The number of ownership investment com-
panies the Department licensed (including Prote´ge´ 
OICs), the number of licensees that have been 
placed in liquidation, and the number of licensees 
that have surrendered their licenses during the year 
ending on the date the report is submitted, identi-
fying the amount of leverage each received during 
that period. 
(8) The amount of leverage that ownership in-
vestment companies (including Prote´ge´ OICs) re-
ceived during the year ending on the date the report 
is submitted. 
(9) The sizes, geographic locations, and other 
characteristics of licensed ownership investment 
companies (including Prote´ge´ OICs), including the 
extent to which the ownership investment companies 
have used the leverage to make debt, synthetic eq-
uity, preferred equity, or equity investments, or a 
combination thereof, to covered business concerns. 
(10) The geographic dispersion of licensees in 
each State compared to the population of the State. 
(11) A summary of employee stock ownership 
plans created by an ownership investment company 
(including Prote´ge´ OICs), including— 
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