H.R. 5958 — National Worker Cooperative Development and Support Act

This section directs the head of each covered agency to (1) implement programs and initiatives to support and expand worker-owned cooperative businesses; (2) periodically review existing regulations and propose revisions to remove barriers to their formation and expansion; (3) facilitate their access to capital, including by exploring innovative financing options and using existing programs; (4) coordinate with the United States Council on Worker Cooperatives; (5) develop, use, and contribute to the federal strategy described in section 4(d)(1); (6) conduct and support research on their economic impact, barriers to growth, and the effectiveness of related existing programs; (7) provide education, outreach, and technical assistance to help existing businesses transition to worker-owned cooperatives; (8) engage with businesses, nonprofit organizations, and academic institutions to identify best practices; and (9) provide training for federal workers to integrate worker-owned cooperatives into federal systems.

This section directs the Administrator of the Small Business Administration to (1) develop educational materials on worker-owned cooperative businesses (i.e., businesses owned and controlled by their worker-members) that are accessible online and in print and translated into multiple languages; and (2) implement an outreach program on such businesses in communities where English is not the predominant language.

This section directs the Secretary of Labor to establish, not later than 180 days after enactment, the United States Council on Worker Cooperatives to coordinate federal activities relating to the formation and expansion of worker-owned cooperative businesses. The Secretary of Labor (or designee) chairs the Council, which comprises (1) the Administrator of the Small Business Administration, (2) the Commissioner of Internal Revenue, (3) the Secretary of the Treasury, (4) the Secretary of Commerce, (5) a National Economic Council representative, (6) the Director of the Domestic Policy Council, (7) a Department of Agriculture representative from the Interagency Working Group on Cooperative Development, and (8) other members as determined by the Secretary of Labor. The Council must (1) develop a federal strategy incorporating worker-owned cooperatives for economic development, (2) identify and propose solutions to federal regulatory barriers to such cooperatives, and (3) coordinate data/research, educational initiatives, and related federal activities. Not later than two years after enactment and annually thereafter, the Council must submit to Congress and publish online a report on its progress, policy recommendations, and federal agency successes, best practices, and challenges. The Council terminates 10 years after enactment.

This section revises the Small Business Intermediary Lending Pilot program for worker-owned cooperative businesses by (1) redefining an eligible intermediary as a cooperative (as defined in subsection (a)(35)), (2) extending the program through 2036 (from 2011, 2012, and 2013), and (3) increasing total funding to $60 million (from $20 million). (The program provides funds to intermediaries for onward loans to startup and expanding worker-owned cooperatives.)

This section expands the permitted uses of financial assistance from the Community Development Financial Institutions (CDFI) Fund to include the provision of education and facilitation of services to assist in the establishment and management of worker-owned cooperative businesses. (Thus, CDFIs receiving such assistance—a program that supports financial institutions serving low-income communities, investment areas, and targeted populations—may now direct funds toward worker cooperatives in addition to existing uses such as affordable housing, job creation, and basic financial services.)

This section defines, for purposes of the Act, (1) covered agency as the Small Business Administration, Internal Revenue Service, Department of the Treasury, Department of Commerce, Department of Agriculture, or Department of Labor; and (2) worker-owned cooperative business as an entity organized under state law relating to worker cooperatives and majority owned or controlled by its employees, or an eligible worker-owned cooperative as defined in section 1042(c) of the Internal Revenue Code of 1986.