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. 
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 ‘‘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 fol-
lows: 
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‘‘(iv) with respect to a loan made to a trust 
or to a cooperative in accordance with para-
graph (35), a seller of the small business con-
cern may remain involved as an officer, direc-
tor, or key employee of the small business con-
cern after a qualified employee trust or cooper-
ative has acquired 100 percent of ownership of 
the small business concern.’’. 
SEC. 3. PROHIBITION OF CERTAIN REQUIREMENTS RELAT-
ING 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 subpara-
graph (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 cooper-
ative in accordance with paragraph (35), the Admin-
istrator— 
‘‘(i) may not, as a condition of such loan— 
‘‘(I) require the qualified employee 
trust or cooperative to provide any manda-
tory equity; 
‘‘(II) require the qualified employee 
trust or cooperative to obtain from the 
Secretary of the Treasury a determination 
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letter with respect to its status as a quali-
fied employee trust or cooperative (as ap-
plicable); or 
‘‘(III) require the qualified employee 
trust or cooperative to obtain or submit an 
additional valuation of the qualified em-
ployee trust or cooperative (as applicable) 
if the qualified employee trust or coopera-
tive 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 em-
ployee trust or cooperative (as applicable) at 
any time.’’. 
SEC. 4. PROHIBITION OF PERSONAL OR ENTITY GUAR-
ANTEE 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 coopera-
tive for the purpose described in paragraph 
(15). 
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‘‘(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 ‘‘liq-
uidation’’ 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 dele-
gated authority to make and close loans under this sub-
section;’’. 
SEC. 6. COOPERATIVE ELIGIBILITY FOR DISASTER ASSIST-
ANCE PROGRAM. 
Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)) is amended— 
(1) in paragraph (1)(A), by inserting ‘‘, includ-
ing to a cooperative as defined in subsection 
(a)(35)(A),’’ after ‘‘basis)’’; 
(2) in paragraph (1)(B), by inserting ‘‘(includ-
ing such a home or concern of a cooperative as de-
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fined in subsection (a)(35)(A))’’ after ‘‘business con-
cern’’; and 
(3) in paragraph (2), by inserting after ‘‘small 
business concern’’ the following: ‘‘(including to a co-
operative as defined in subsection (a)(35)(A))’’. 
Æ 
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