Leer esta publicación en español aquí

Are you ready to lead the USFWC’s mission to build a thriving ecosystem for worker cooperatives and their leaders? Run for the USFWC Board of Directors!

Nominations for the USFWC Board of Directors are now open. In 2023, USWFC members will elect five At-Large Directors. One of them could be you or someone from your workplace.

Know a great candidate? Recommend them! USFWC member organizations can recommend a candidate using this form.

Ready to run? Nominate yourself! Individuals can self-nominate by filling out this form.

For more information, including candidate and workplace eligibility, visit our nominations page.

On May 15th, Rep. Dean Phillips (D-MN) and Senator Van Hollen (D-MD) led the effort to introduce this bipartisan, bicameral legislation to reduce barriers to small business owners who are transferring ownership to worker co-ops and ESOPs.

In recent years, there has been an uptick in interest in conversions to worker co-ops and ESOPs. Nearly half of all private businesses are owned by individuals who are at or near retirement age, and together, those businesses employ more than 32 million workers across 2.9 million businesses. Fewer than 15% of owners who are expected to retire over the next decade have a succession plan in place, leading to loss of jobs and businesses because the business closes or is merged into a larger business that is not anchored in the community. The Employee Equity Investment Act (EEIA, HR3383, S1618) will preserve jobs and build wealth for workers by converting those businesses to worker ownership.

The EEIA would mobilize Small Business Investment Companies (SBICs) to reduce the burden on seller financing to create more worker co-ops and ESOPs by allowing a zero-subsidy, or zero interest, investments in businesses formed under one of these two business models. The vision of this bill is to double the number of U.S. employee owners over the next decade creating a more dynamically competitive, inclusive, and resilient American capitalism.

The program:

• creates a special type of SBIC called an Employee Equity Investment Company (EEIC) that requires 50% or more of their investments must be transactions that create new employee-owned businesses, and requires that those investments do not exert any control over the business they have invested in
• creates a training program for SBICs that are new to worker co-ops and ESOPs to become an EEIC
• requires the EEIC to work with an advisor with 5+ years experience of working with worker co-ops or ESOPs
• requires an annual report on this program
• affirms the Main Street Employee Ownership Act by creating an office of Employee Ownership within the Small Business Administration (SBA) to provide education, outreach, and technical assistance resources for conversions, as well as assist in conversions.
• Additionally, the EEIA requires reporting on this program as well as evaluation of barriers to access to procurement programs for employee owned businesses.

“My family taught me that business is a means to an end; and that end is ensuring success is shared with the people and communities who help create it,” said Rep. Phillips, whose great-grandfather, Jay Phillips, created one of the first employee profit sharing plans in the country in 1944. “Over the coming years, millions of small business owners will reach retirement age and sell to competitors or other buyers in the mergers and acquisitions market – which often results in jobs leaving the communities that rely on them. Expanding opportunities for employee ownership will help keep businesses and jobs in local communities, allow American workers to build wealth for their families, and result in more sustainable and resilient communities. Employee ownership is both good business and good for business.”

“American workers are the true power behind our economy. By investing in employee ownership, we’re investing in our workers and putting more of their hard-earned dollars back in their pockets, instead of sending U.S. profits overseas. This bipartisan bill will offer up-for-sale businesses the tools to transition to employee ownership – empowering workers and keeping jobs and opportunity here at home,” said Senator Van Hollen.

“Worker co-ops are often overlooked when it comes to financial products and business opportunities in the U.S., usually because government and financial institutions don’t have much familiarity with the model.” said USFWC Executive Director, Esteban Kelly. “It is exciting to envision a U.S. small business landscape that centralizes worker ownership and voice. We thank Rep. Phillips, Senator Van Hollen, and the bipartisan team of legislators who recognize the importance of building wealth for workers, saving jobs, and investing in small businesses that anchor our communities and make local economies strong.”

The EEIA is cosponsored by Sens. Chris Van Hollen (D-MD), Tammy Baldwin (D-WI), Todd Young (R-IN), Jeanne Shaheen (D-NH), Mike Braun (R-IN) and Marco Rubio (R-FL), and Reps. Blake Moore (R-UT-1), Chrissy Houlahan (D-PA-6), Jill Toduka (D-HI-2), Brian Fitzpatrick (R-PA-1), Mark Pocan (D-WI-2), Dan Meuser (R-PA-9) and Dusty Johnson (R-SD)

List of Small Business Investment Companies

Full EEIA text is available here.

The Economic Development Administration has opened up the funding opportunity for the Tech Hubs program. This is an opportunity for the cooperative development community to help to shape tech and manufacturing business development strategies across the country and access federal funding to do so. This post contains background information on the Tech Hubs program, the

Background:

Funding opportunity now open

On May 12, 2023, EDA published the Tech Hubs Phase 1 Notice of Funding Opportunity (NOFO) (PDF)—the first of two phases.

PHASE 1 – Strategy Development Grants (Deadline: August 15, 2023)
EDA will designate at least 20 Tech Hubs across the country and will separately award approximately $15 million in strategy development grants to accelerate the development of future Tech Hubs. The Tech Hubs designation will be a widely recognized indicator of a region’s potential for rapid technology-led economic growth. Strategy Development Grants may fund the following types of activities:

1. Developing a comprehensive regional technology strategy;
2. Identification of regional partnerships;
3. Assessments to determine regional needs and capabilities;
4. Development or updating of goals and strategies to implement an existing comprehensive regional plan;
5. Identification or implementation of planning, local zoning, and other changes to code, law, or policy necessary;
6. Development of plans for promoting broad-based economic growth, creating good paying jobs, assessing job quality, and helping students and workers gain the skills for, secure, and advance in good jobs and careers;
7. Hiring of the coalition’s Regional Innovation Officer to lead the overall effort.

The EDA is particularly interested in proposals that focus on the following areas:

• Supporting small and rural businesses
• Promoting diversity and inclusion in the tech sector
• Addressing workforce development needs

EDA will host an informational webinar on May 18 about the Tech Hubs Program Phase 1 NOFO. Click here to register for the webinar.

PHASE 2 (EDA expects to release the Phase 2 NOFO in Fall 2023.)
In Phase 2, EDA will make at least 5 implementation awards to designated EDA Tech Hubs. Only Tech Hubs that EDA designates during Phase 1 are eligible to apply for Phase 2.

Press release: Biden-Harris Administration Launches First Tech Hubs Funding Opportunity

Steps to engagement in the Tech Hubs program:

If you value the USFWC’s work to advocate for and elevate these opportunities, please consider donating to support our efforts.

On Tuesday, May 9, 2023, Governor Inslee signed into law SB 5096, expanding employee ownership in Washington State. This bipartisan legislation led by State Senator Mike Padden (R-Spokane) and Senate Majority Leader Jamie Pedersen (D-Seattle) is among the most ambitious state employee ownership legislation to date, and it passed both chambers unanimously with no opposition. The USFWC is proud to have supported this effort, driven by partners at Ownership America and including support along the way from the Northwest Cooperative Development Center, Project Equity, and the Employee Ownership Expansion Network. 

The act will create:

• the Washington Employee Ownership Program with the Washington Department of Commerce;
• an Employee Ownership Commission with seats appointed by the Governor and legislative leaders;
• a tax credit for feasibility studies;
• clarification that State Small Business Credit Initiative (SSBCI) funding for the State of Washington maybe be used to finance employee ownership use cases;
• a revolving loan fund to support the financing of conversions without a personal guarantee requirement – a troublesome issue cooperatives face in accessing the Small Business Administration (SBA)’s loan programs.

The Washington Employee Ownership program will convene a network of technical support and service providers, work with state agencies whose regulations and programs affect employee-owned businesses, partner with external service providers and organizations to make Washington State a fertile ground for employee ownership, and curate a service provider referral service. 

“SB 5096 builds upon the successes of like-minded initiatives in other states including Colorado, California, and Massachusetts, showing that the worker ownership movement is agile, is growing fast, and is learning even faster,” said USFWC Policy Director Mo Manklang. “Worker co-ops and ESOPs have clear support from legislators from across the political spectrum, across the country, in rural and urban geographies. This support illustrates what we know – worker ownership works. It builds wealth, creates opportunity for dedicated workers, creates avenues for leadership development and skill-building, and anchors businesses in their communities.” 

“This bipartisan legislation marks another significant milestone for the employee ownership movement, said Ownership America Founder and Executive Director Jack Moriarty. “By investing in public outreach and technical assistance, feasibility study incentives for multiple forms of employee ownership, and in addressing capital access issues, Washington is now well-positioned to grow an already impressive footprint of employee-owned businesses in the coming years.”

Co-Director of NWCDC, Dr. John McNamara comments, “This law puts Washington at the forefront of the movement towards worker ownership. SB 5096 will support building resilient local economies whether they are in Walla Walla or Seattle’s Central District. By supporting the ability of workers to control their economic destiny, Washington will be creating pathways to the next generation of ownership at a time when many small business owners are facing retirement without a clear succession plan.”

Read the full bill here

Watch the bill signing here