Main Street Employee Ownership 2.0 Act of 2022
Bill: H.R.9347 | Sponsor: Rep. Velazquez, Nydia M. (D-NY)
Policy area: Commerce

Summary:
Main Street Employee Ownership 2.0 Act of 2022
This bill prohibits the Small Business Administration (SBA) from imposing certain requirements on loans to specified employee-owned businesses. For example, the SBA may not require a qualified employee trust or cooperative to provide any mandatory equity to receive a loan.

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 2022''.

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)(G) of the Small Business Act (15 U.S.C. 636 
(a)(15)(G)) is amended to read as follows:
            ``(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 require the qualified employee trust 
                or cooperative to provide any mandatory equity to make 
                the loan;
                    ``(ii) may not 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);
                    ``(iii) 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); and
                    ``(iv) may not 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.''.

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

    Section 7(a)(35) of the Small Business Act (15 U.S.C. 636(a)(35)) 
is amended by striking subparagraph (B) and replacing it with the 
following:
                    ``(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 shall 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 period after ``liquidation'' and inserting the 
following: ``: Provided further, that the Administrator shall permit 
deferred participation loans (including those made by lenders 
participating in the program defined in section 7(a)(3)(iii)) 
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) (15 U.S.C. 636(b)) is amended--
            (1) in paragraph (1)(A), by inserting ``, including to 
        cooperatives as defined in subsection (a)(35)(A),'' after 
        ``basis)'';
            (2) in paragraph (1)(B), by inserting ``(including 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 a cooperative as defined 
        in subsection (a)(35)(A))''.
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